54 - Why DeFi is the Future | Mark Cuban

Mark Cuban https://twitter.com/mcuban?s=20 needs no introduction, but the entrepreneur and Shark Tank host has an impressive depth of knowledge of the crypto space, and he has a particular ability to break complicated subjects into simple, digestible ideas. Listen as we talk DeFi, NFTs, Ethereum, and the future of finance with Mark Cuban! ------ 🚀 SUBSCRIBE TO NEWSLETTER: http://bankless.substack.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ----- GO BANKLESS WITH THESE SPONSOR TOOLS: ⭐️ AAVE - BORROW OR LEND YOUR ASSETS https://bankless.cc/aave 🚀 GEMINI - MOST TRUSTED EXCHANGE AND ONRAMP https://bankless.cc/go-gemini 💳 MONOLITH - GET THE HOLY GRAIL OF BANKLESS VISA CARDS https://bankless.cc/monolith 📱 DHARMA - MOBILE ONRAMP DIRECTLY INTO DEFI https://bankless.cc/dharma ------ 📣LATTICE | NEXT GENERATION OF HARDWARE WALLETS https://bankless.cc/gridplus​ https://bankless.cc/gridplus%E2%80%8B ------ Don't stop at the video! Subscribe to the Bankless newsletter program http://bankless.substack.com/ Visit the official Bankless website http://banklesshq.com/ Follow Bankless on Twitter https://twitter.com/BanklessHQ Follow Ryan on Twitter https://twitter.com/ryansadams Follow David on Twitter https://twitter.com/TrustlessState ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Ryan Sean Adams?

  All right, Bankless Nation, we are super excited about this extra special episode with Mark Cuban. I'm going to introduce Mark in just a minute. Just some quick logistics, we are live streaming this special episode for you. So catch it live on YouTube. Hopefully you're watching now, the podcast will come out next Monday of this. And then after the show, David and I are going to do something different. We're going to jump into Clubhouse and have an after-party where we do a debrief on the episode. So catch that as well, there's some instructions in the show notes for that. Last thing, shout out to the sponsors that made this possible. You'll see some of their rotating logos, Gemini, Ave, Monolith, Dharma. Guys, these are the tools to help you go bankless and they have helped make this episode possible. Use their stuff.

• 0:45Ryan Sean Adams?

  Mark Cuban, you need no introduction to the bankless community, or really any community. You are Mark Cuban, the DeFi Bull, I think now, at least that's how crypto Twitter is seeing you these days. How are you doing, sir?

• 0:58Speaker 01

  I'm doing great, how y'all doing?

• 1:00Ryan Sean Adams?

  Good, man, it is awesome to have you on Bankless. Like David and I are so psyched about this. Your time is super valuable, we want to get right to the goods. Can we start with this question? You weren't bullish on DeFi before, at least that's our general sense. Why are you now bullish on, on, you weren't bullish on Bitcoin before, rather? But why are you so bullish on DeFi now? What's kind of changed for you?

• 1:22Speaker 01

  So let's, let's go through it. So when Bitcoin first started really becoming popular in the early days, let's put aside 2009, 10, 11, 12, right? You know, I was, I was very familiar with it, very familiar with blockchain. But the original presentation or narrative, if you will, was that it was a currency, right? That it was going to be used as a currency by normal people in normal circumstances. And I just never saw that happening. To this day, I don't see it as being a replacement currency for the US dollar or for any sovereign nation for that matter. Is it a better way to transfer money? Yeah, of course, right? Is that, are there significant benefits to, to Bitcoin? Yeah, of course, but it's really evolved to being a store of value.

• 2:06Speaker 01

  For the longest time, store of value was not the, you know, was not the key to Bitcoin, right? There was going to be lightning and that was going to allow all these transactions to take place and yada, yada. And so that to me never got me excited because I still don't think that'll happen. But I've always thought it could be a store of value. I've always compared it to gold and you know, it's what people will pay for. But what really changed is over the last year, as I started getting more into smart contracts in particular and really understanding more about their capability and seeing the enhancements that had been made, that was the first thing that got me excited. What made me really blow up on it and really get fired up about it is

• 2:51Speaker 01

  when I went to mintable.app and minted my first NFT. And it wasn't so much just minting the process, but when I saw the royalties, right, that was the game changer. Because the challenge for all intellectual property, whether it's art, whether it's music, whether it's photography, whether it's a textbook, whether it's anything, is the rule of first sale, right? Once you sell it, everybody else has got the right to sell it and you don't get a nickel from it. And this changes all of that. And the implications there and the applications are enormous. So that was the first thing that got me started with NFTs. Then I started digging in more on the DeFi stuff

• 3:32Speaker 01

  because you can't miss, you know, from the summer, right? I mean, DeFi was everywhere and all anybody talked about it seemed like. And so I started digging in and there's a lot of hype, you know, a lot of BS going around and a lot of, you know, the yield farming thing and APY and token binging and all this kind of stuff. But what got me excited is really understanding that DeFi turned Bitcoin or Ethereum or even several other tokens into personal banking, right? And friction-free personal banking. You know, with the money I have in some of my bank accounts, right, I still got to go to a banker and I still have to fill out paperwork and it's

• 4:14Speaker 01

  still a multi-day process. And that's ridiculous, right? Even, you know, even though I'm over collateralized and I have a big NBL in my personal accounts, right? And so, you know, then I started looking at it and realized that, okay, put aside the over collateralization, that's not really a limiting factor. But I can borrow, or anybody can borrow regardless of size, in seconds. And it's the decentralization really working to turn crypto into a personal banking platform. And that, to me, is the most exciting aspect of DeFi. And then you start applying that to corporations, and then you start extending NFTs and smart contracts in particular.

• 4:57Speaker 01

  And so you can mint anything, anything that's digital becomes a digital tokenizable asset that can be resold. All those things together, and it really is something to get excited about. Because not only can it change how people deal with their own personal assets and their own, you know, borrowing and lending money, but also for companies, it can really allow them to monetize things they'd never been able to monetize before.

• 5:22Ryan Sean Adams?

  So Mark, this sounds like you have fallen down the bankless rabbit hole, really decentralized, right? Like, this is what, you are speaking our language, sir. And you're talking about the potential of these programmable assets, whether it's an NFT or whether it's some sort of programmable interest account. But a lot of the people listening here don't remember the birth of the original internet, right? Like, we've got like more generations in front of us. For the kids listening, I want to know if you're feeling like internet vibes here, early internet vibes here. Is this like an internet of money, an internet of value? Is this like an internet 2.0 to you, or is it something different?

• 6:04Speaker 01

  It's different, but there's a lot of similarities, right? So back in the day, people, you know, so everything was analog, right? It was physical in a lot of respects. And so people looked at the internet as a way to simplify things and centralize things and make them available to everybody, right? That was the whole value of the net. And then you started to see unique applications. It's like my company, AudioNet. You know, we took sporting events, we took radio stations back in late 94, early 1995, when people didn't even know what the internet was. And we said, you know what, just like we're doing now, literally, you know, when we started streaming, starting with audio and doing live audio. Like this in nineteen ninety five, people were like, what's the point?

• 6:49Speaker 01

  You know, I'll just turn on my radio. I'll just turn on my TV, right? I'll just listen to, you know, I'll put in a CD in the CD player. It was like, why are you even doing this? I'm like, no, you don't get it. Bits are bits, right? They don't care where you put them or how, they just want to be used effectively, efficiently. And now we can send audio where people want, how people want, when they want them, right? And so, but there were limiting factors, like bandwidth was a huge limiting factor. Fast forward to today, right? You know, back then, everybody tried to digitize and internetize everything. Now, with smart contracts, people and crypto and blockchain in particular, people are looking for new applications everywhere.

• 7:30Speaker 01

  And it's hard to know what's right and what's wrong, what's going to work and what's not going to work. So we were able to make things work. There were a lot of applications that ended up working, eBay, Amazon, etc. There were a lot that failed. And so we're in the same place right now. And back then, companies went public and everybody wanted to own stock in an internet company, even though they didn't understand it. Now, you know, there's tokens and applications and layer one, two, three, four, and people don't fully understand it, but they go hype and they go for the narratives and that's what makes it similar. But underneath it all, there are solid applications that impact the world. And that's the important part. I can't tell you who all the winners are going to be yet, or who all the losers are going to be, whether it's the NFT space,

• 8:15Speaker 01

  whether it's DeFi, whether it's smart, whether it's blockchain and smart contract applications. So there's a lot of spray and prey when it comes to buying tokens and dealing with this stuff. And that's what makes it really similar. People didn't fully understand then. We didn't know who all the winners were going to be then. There was a lot of, okay, I'll try a little bit of everything to see what works and see what sticks. And that's very similar to today.

• 8:39David Hoffman?

  So Mark, there's a frequent conversation in the bankless world and the Ethereum world that all these DeFi financial tools, as soon as you get over this learning curve, the experience of using these tools, is this an absolute treat? Like you said, we don't have to go into a bank. We can use these personal financial tools in the comfort of our own homes. And they're straight up more powerful tools. And so on a personal note, these are all advantageous for us as individuals. Yet you, and notably you are on this Shark Tank green screen right now, like to invest in things.

• 9:12Speaker 01

  I'm probably on ABC, let me just add.

• 9:14David Hoffman?

  Yeah, absolutely. And so notably, there's one half where these are personal tools that can better our lives. But also, how are you thinking on this from the investor side? You said that it was really the ability for the resale ability of these NFTs to that offer commissions baked in via smart contracts. Where does your investor hat turn when you think about this space?

• 9:38Speaker 01

  Yeah, so there's a lot of battles going on right now. And there's a lot of people striving for the crown, if you will, wondering what's going to happen with Ethereum and E2.0 and transactions per second. And there's a lot of hype around that. And so I'm trying to get my arms around what companies are going to be the survivors and what's going to happen with the industry for that matter. Is 2.0 really going to happen? Is it going to be, is it going to work? What type of TPS is it going to hit? You see what's happening with Binance, how much of that is narrative and hype and what's real? You see a lot of liquidity chasing to try to create a story that this company's got all this NBL and they must be strong.

• 10:23Speaker 01

  And then people talk about the market cap of the tokens. And so that's really not relevant to anything. That's just all narrative, just like there's narrative like price earnings ratio, price to earnings growth ratio. Those are narratives that analysts use to sell stocks. And so there's a lot of narratives right now. So from an investing perspective, I try to take my same Shark Tank principles and normal Investing principles, what are the good companies? Who are the smart people? You know, what are the applications that are going to change the game? And like I said, personal banking is, you know, really a big change. You know, decentralizing what was centralized. Governance is a big game changer, but those are macro themes, right?

• 11:08Speaker 01

  And so you've still got to determine which companies are going to be the ones that actually create the technology that really makes it work. And when I say technology, you know, it could be a competitive blockchain. It could be a layer two add on. It could be, you know, layer four, it could be whatever, you know? And now you see all the arguments, is it, is, you know, is this next really centralized or is it decentralized? Right? Is this yield farming sustainable or is it not sustainable? Well, a lot of the shit is not sustainable. You know, when, when everybody is just liquidity chasing to, to try to, you know, build up their N V L and, and paying these astronomical rates and paying to be listed, or at least hedging to be listed on, on an exchange.

• 11:48Speaker 01

  And there's so many games being played because everybody is chasing the same money, trying to find narratives to bring in new money. And that happens with new industries. That's not unusual, but from my investing perspective, to answer your question, I've got to separate the bullshit from what's real.

• 12:03Ryan Sean Adams?

  Totally, and very similar to the late 1990s and kind of the, to the internet.com kind of bubble and bust. We want to get back to talking about some of the, the areas in crypto that you're most interested in, putting on your investment hat. But before we do, staying with kind of the macro picture here. So we've got crypto as an internet 2.0, but you also said something super interesting in a podcast I was listening to recently, Mark, which is DeFi is America 2.0, right? So, I mean, famously, America made some fantastic strides in the early internet, laid out some massive infrastructure, created a home for Silicon Valley and has really led the way on the internet revolution up to this point.

• 12:49Ryan Sean Adams?

  Do you think that DeFi and crypto could be like an America 2.0? How important is it for politicians and Main Street to get their arms wrapped around how important this could be for, for the U S as a country?

• 13:04Speaker 01

  You know Ryan, that's a really interesting question because the reality is, you know, the strongest plays and players are not American, right? We talk a lot about it, but the biggest money doesn't come from here, you know? And the biggest, you know, day-to-day usage from everyday people is not happening here, right? It's happening elsewhere around the world. But a lot of the development, not most, not even the biggest, is happening here, right? A lot of the biggest and the original stuff that's been going on for a while is happening in Asia. And, and so, you know, we have the opportunity to really have an impact, but we're not, we can't think, Americans like to think that we're always the biggest and best at everything,

• 13:49Speaker 01

  but we're not really in this particular case. And that can be concerning because if we don't, it's just like, look, most of the internet's in English, right? In terms of the governance, DNS, etc. And so, we've got to really hopefully be a leader in this. Now, you know, there's a lot of ways to discuss that. Does that mean selling half the gold in Fort Knox and buying a basket of, you know, Bitcoin, Ethereum, and maybe some others? I would be all for that because I think gold is useless, right? You know? Gold bugs will tell you that, well, it has intrinsic value. It has this much intrinsic value for manufacturing applications and all that jewelry usage.

• 14:32Speaker 01

  There's no law, there's, there's no law of physics that says gold jewelry is more valuable than any other metal being, you know, created in jewelry or for plastics and jewelry for that matter, right? That's just a narrative that we've all accepted, hey, gold is better, gold band, gold jewelry, whatever. You know, and so, every store of value has a story, whether it's Bitcoin, Ethereum, or gold. And so, if we're gonna have a store of value that at least is more, more useful, I'd rather have Bitcoin and Ethereum in Fort Knox than I would gold.

• 15:04Speaker 01

  But a lot of that is just, you know, we need as a country to start recognizing that crypto is real. And two, it makes better business sense as a country than it does for a lot of, lot of other applications. I'll give you an example. You know, you, if we created our own USDC, right, issued by the treasury. We lose money on every penny minted. We lose money on every nickel, dime, and maybe even quarter minted. We lose money on dollars and having to recycle them, right? Um, it's bad business. And now with the pandemic where, um, if you, if you have to go into a store, if you still go into a store

• 15:45Speaker 01

  and you have to use cash and you get change back or you get dollars back, your first thought is, should I even touch that thing, right? You know, and, and so with trying to get to a touchless society for, for economics, USDC issued by the treasury makes perfect sense. And so being a leader there, and I think hopefully we'll, we'll have conversations with politicians and leaders in government to, to convey to them that 99% of transactions are already digital, right? We, we already have a USDC. It just doesn't get down to the consumer or retail level. We just don't call it that, right? When I, when I do a wire transfer, it's in dollars, but it's all digital.

• 16:29Speaker 01

  No one's, you know, printing anything out, you know, hopefully to confirm it until after the transaction. And then that therein lies the rub because all the centralized interests, government, but even more so the big banks, um, they have a vested interest in not seeing this happen, at least the way things are set up right now. And so that's going to be the battle.

• 16:50Ryan Sean Adams?

  Yeah, it's, it's exactly what you said, right? So, and we didn't have these types of battles in the early nineties with the internet. So here, here's part of my worry, Mark, is that.

• 16:58Speaker 01

  We did, we did.

• 16:58Ryan Sean Adams?

  Okay, well, tell us about that because my worry right now is, is the politicians don't get this, right? There's a few people in Congress who sort of are starting to wrap their heads around crypto. There's maybe Andrew Yang, who's, who's talking about it a little bit, like in little pockets, but it felt like in the nineties.

• 17:14Speaker 01

  Are you kidding me? I went to see senators and tried to explain it to them.

• 17:19Ryan Sean Adams?

  Yeah, what did they say?

• 17:20Speaker 01

  No clue whatsoever. Um, you know, are we doing anything to stop it? Kinda, you know, whether it was copyright laws, you know, whether it was dealing with bandwidth and dealing with, I mean, because remember, back in the 90s, you had a 56K modem. And the biggest inhibitor to the internet was bandwidth. And so there were a lot of laws put in place in terms of being able for cable and telcos and satellites in order to how and where and when they could build the restrictions. Communities set their own restrictions. So you had multiple layers of problems in terms of just creating bandwidth. And then you had people investing in fiber because you needed to connect all these things.

• 18:06Speaker 01

  And so there were inhibitors there, but it was easier, literally, to install fiber underneath the ocean than it was fiber to the home, right, or fiber to a business. Trying to get a DS3, 45 megabits, was expensive and it was a hassle and there were all these taxes associated with it. And so, I mean, it was a clusterfuck back then, too. And people didn't understand it.

• 18:34Speaker 01

  You know, we used to have this thing on broadcast.com called the CD jukebox. And I remember, and basically, prior to 1996, we could put up any CD. There was no copyright laws preventing it. Then the music industry got these copyright laws passed, the Digital Copyright Act. And so we'd have to go get permission. And I remember explaining this to Orrin Hatch, Senator Orrin Hatch from Utah, who was on the Judiciary Committee, trying to tell him that you had to be careful with copyright laws because it could really slow down the internet. And all he can think about was, he had a CD of hymns or something. He wanted to know if he could sell my CD, you know, and how to sell his CD. I'm like, no, it's not CDs. I just had no clue. And so it was very similar then, but, you know, people find, where there's opportunity,

• 19:20Speaker 01

  smart people find workarounds and companies find workarounds and capital finds workarounds. And the same thing will happen here, you know, as Gen Z start voting more, younger millennials start, you know, becoming more aware, because they're not even as aware, you know. And so as they become more aware, then they'll make sure their politicians are more aware and smart capital will find ways to invest. And that's what's happening now.

• 19:42Ryan Sean Adams?

  So you're optimistic that we'll be able to get over this regulatory education hurdle?

• 19:47Speaker 01

  Yeah, because, you know, there's no choice because you can work around them because it's decentralized.

• 19:55Speaker 01

  Look, if there's no USDC, that's not going to stop DeFi. The only thing that's going to screw up DeFi is liquidity chase and the yield farming, because, you know, somebody in the government is going to step up and say it's too good to be true, and let me just tell you why, and show all the problems. You know, and like I say to people who yield chase, you know, the risk doesn't leave the system. You just don't know, it's like a game of musical chairs. You just don't know when the music's going to stop. And so you've got to be really careful there in terms of yield farming. But, you know, now if you're sitting at home, you're getting a stimulus check, I don't blame people from yield farming, because it's actually smart as long as you can be agile. But it's not a long term, it's not going to be valid long term.

• 20:35Ryan Sean Adams?

  So Mark, one thing we've been super impressed with is your ability to go deep in DeFi. Like, so our biggest criticism on Bankless is that many of the investors, you know, VCs, institutional investors, they don't actually use DeFi, right? So they're not informed investors. Imagine going and buying, like investing in Apple stock in, you know, 2008 without ever having used an iPhone.

• 21:01Speaker 01

  Let me give you a better example. So we'll go back to the 90s. So Broadcast.com was going public in July of 1998. And we go on this thing called a roadshow. And a roadshow is where you make a presentation to investors. And we go, I mean, we even got to take the Concorde to go to London and come back. It was unbelievable. But we would go into these presentations, and we could see their eyes just glossing over. And there were never, rarely any questions. And the questions just showed that they had no clue what they were investing in. And then we go public. It's the biggest one day jump in the history of the stock market at that time. Everybody placed their maximum order, and the price just skyrocketed. But none of those people had a clue or understood the technology of what we were doing.

• 21:46Speaker 01

  None. And so it's no different here. I mean, that's just the way it is. People are momentum investors in a lot of respects.

• 21:53Ryan Sean Adams?

  That's what we say. It's like, your edge can just be actually using DeFi protocols. Have you gone and deposited something in AVE and are earning some interest? You have an edge, because 95% of The other investors haven't even gone that far.

• 22:06Speaker 01

  No, no clue whatsoever, right? Because, okay, so, you know, investing and working with some of these companies, I'm like, you got, you gotta do me a favor. If I'm gonna invest, here's what you gotta do. You have, before you hit confirm, right, for that swap or whatever, deposit, whatever it may be, you need to put up the transaction fee versus the APY and how long it'll take you to earn back your transaction fee, right? Because people will see an API of 60% or 70% and invest $100 or $1,000 and have a gas fee, because they do it the wrong time, of 100 bucks, right? And that's 10% immediately right off the top and don't realize, even if it's a 50% APY,

• 22:48Speaker 01

  that's an annual ye- yield, right? And you gotta hold it long enough to cover just to break even before you even think about it, right? And they don't do the math. And so I'm like, you gotta save the little guy, because otherwise, you know, if you don't take care of the little guy like that, it's gonna backfire on the whole industry. And, you know, whether it's AVE or others, you, you don't see that, right? And that's gonna create problems because, you know, there's a lot of people, you're farming on a small level, trying to figure it out and losing money, including me. I was, you know, because when I, when I first learned it and I first did my first deposit and then did, did some yield farming, where I deposited and I saw the high APY and I wanted to see what happened. And

• 23:31Speaker 01

  then I was like, yeah. And then I swapped it back out, losing money, thinking I'm getting this high yield, right?

• 23:38Ryan Sean Adams?

  Well, but that, this is exactly right. Like, you have to have skin in the game and you have to be willing to experiment. And you have to have a few transactions where you're like, oh, that didn't go well. And like, here's why, in order to level up and understand this stuff. So, what, is, is that generally how you approach investing? And is that how you approach DeFi? Like, tell us how you learned DeFi and how you approach investing?

• 24:01Speaker 01

  Yeah, I just do it, right? I mean, I'm teaching myself solidity right now. I'm taking solidity tutorials, so I understand smart contracts better. Because it's important for me to be able to say, okay, this is what you can do with a smart. Contract. It's almost like artificial intelligence, right? So everything AI is included in almost every investment. Crypto doesn't really talk about it, but you know, every traditional regular business company does. And so I'm taking you tutorials and AI, I'm learning the difference between GANs, you know, CNNs, reinforcement, all this stuff. I'm, you know, doing machine learning tutorials, you know, reading books, whatever, watching the videos. So I can learn because I gotta know what's real and what's bullshit.

• 24:41Speaker 01

  And 99% of the deals that say they have AI or computer vision are bullshit. You know, they have one guy or one person who is there, you know, that went to MIT or Harvard that took a class in data science and has done, you know, a three-layer neural network like I have. And that's it, right? And they're going to try to figure it out. AI is hard. Crypto is easy, relatively speaking, but you've got to learn. You've got to learn what it is in order to be able to make legitimate decisions. You know, VR, I've got a patent pending with a medical application for VR. I got, you know, a patent that was issued for computer vision for counting things from, uh, from the air on the ground. I mean, you know, I had help, but these are things, you know, over the years, just diving in.

• 25:26Speaker 01

  And what you learn very quickly about technology generally is once you get these fundamentals in place, it's not hard to add new things, right? You know, DeFi is really straightforward. If you just try it and you understand the principles behind it. But, you know, you've got to understand finance to a certain extent. You've got to understand why people are chasing liquidity or why the DEXs are chasing liquidity and trying to offer these yields. And why it's a game of musical chairs, but that just takes time and experience to do it.

• 26:00David Hoffman?

  Mark, so you've been playing in these DeFi apps yourself, which is absolutely fantastic. Like Ryan said, you're already like leagues beyond the typical VC who doesn't actually play. And the fact that you're learning solidity is insanely cool. We talked about gas fees and gas fees are, they're pretty prohibitively expensive for a large part of the population. It's an unfortunate place that we find ourselves in where Ethereum has so much demand that everyone wants to use it. We haven't actually learned how to how to scale it, right? There are L2 solutions on the way. They're just very nascent, not very mature. We do believe they're coming. There's been a ton of content that we've produced on L2s. But one of my opinion, one of my questions that I have for you is like, do you think the average person, like assuming that Ethereum scales, assuming that L2 does work,

• 26:45David Hoffman?

  do you think that the average person, like just you, me, just like the listeners here, are actually making these individual transactions, managing their own money, playing when they are owned DeFi apps, putting their own money into Abbe, putting their own money into Maker Dow? Or do you think there's going to be some sort of like service provider, some sort of like centralized entities? Like, how do you think, how do you think about the long term?

• 27:08Speaker 01

  For every business ever, whether it's a little company coming on Shark Tank or the biggest companies. Customers take the path of least resistance. Period, end of story. We don't, you know, we don't want to have to think about it. We put our money in a bank because we don't want to have to think about it. And we know FDIC ensures it and we feel it's safe, right? Better than under a mattress, hopefully. And so whichever company creates, look at Top Shots, right? Look, look what Flow has done with Top Shots. Their biggest thing wasn't, you know, creating the videos. The video moments aren't anything special. Their biggest thing wasn't a deal with the NBA. That helps, makes me some money, I'm glad, right? The biggest thing was, there's no wallet. You just put in your credit card. Everybody's been trained for decades.

• 27:52Speaker 01

  You just put in your credit card, you buy what you want. That is the key. You can talk about Flow Blockchain all you want, right? And, you know, you can talk about whether it's better or worse and, you know, who's going to develop on it or why? That's not the secret sauce. The secret sauce is the FinCEN side where there's no know your customer. There's no, yeah, any of this other stuff. You just put in your credit card and you buy. And if the prices go up, you're happy. There's a two and a half percent, no, it's more than that now. It's, well, depending on the size of the transaction. But, you know, it's going to be a seven to $10 transaction fee. That's cool too, because people are used to that because of shipping and credit card fees. And you know, and that's a thought, right?

• 28:33Speaker 01

  There's no shipping fees, you know, on NFTs and all that stuff. But you get my point, right? It's the path of least resistance to dealing with things. Look, you can't take your money off of Top Shots right now. You know, you can have something that just skyrockets in value and, okay, you know, it looks good, you know, on your collection, but it, you know, you can't really take it anywhere. You know, so there's a lot of limitations and it just goes shows, even despite those limitations, the site being down, it's hard to buy a pack, you know, they're still working on getting out bots, all that kind of stuff. People still do it because it's exciting to collect and it's easy. And so DeFi right now is not super easy. It's not easy at all, right?

• 29:16Speaker 01

  Understanding pooling and swaps or exchanges, different people use different naming conventions, right? Yield farming and what's really profitable. People see APY and they're, they're used to, you know, the concept of APY or APR because of their credit cards, right? And so the advanced users or people that just learn their way through it can get to it, right? But you don't see NVLs into the billions because of everyday people, right? There are big old players, and I know some of them now, that are just moving money around and you can do it now because, you know, the, the exchanges of the world are able to hedge still and, you know, there's still the liquidity chases because it's a zero sum game.

• 30:00Speaker 01

  You know, you, you talk about similarities to the internet. I used to do deals with companies because they wanted traffic. And with broadcast.com, we got a ton of traffic and we invented these things called guaranteed click-throughs, right? So just like NVL is the, the metric for how successful you are because that leads to market cap, right? So traffic was the currency back in the day. And so we would charge, you know, obscene amounts for sending people traffic because they in turn use that as a metric, either go public, stay public, their stock price, whatever. It was legitimate traffic. Wasn't bot traffic or anything like that. It was legit, but we would charge the shit out of it.

• 30:40Speaker 01

  You know, and it's the same thing now. People are paying, overpaying for the metrics, the N V Ls and everything. They're paying influencers who don't know shit about crypto to say, you know, come, you know, you know, just to jack up their T P S or jack whatever the metric is. That they're using their N V L, whatever it may be, their user numbers. And so you're seeing a lot of people gaming the system right now and you've got to really be careful of that. And that hurts the ordinary user who doesn't see that bigger picture because it truly is a game of musical chairs. You know, if your yield that you're earning that you've committed to be locked in, whether it's, you know, 11 days on A V or whatever, you know, or whatever it may be for whatever your lock is, um, I don't think that's a risk people fully understand.

• 31:25Speaker 01

  And you don't have the leverage to yank yourself out like other people do.

• 31:29Ryan Sean Adams?

  Mark, I think David's going to get back to N F Ts in a second, but I want to jump on something you said where it hurts the user. Cause I think it hurts the user in two ways, right? So it, it, it hurts the user, obviously, when they're buying into something like a speculative type bubble. It hurts the users that way, but it also hurts, I think, the mainstream users who look at this whole crypto space and dismiss it as a bunch of speculation and nonsense and shenanigans and games and they dismiss. Yeah. Because they're partially right, aren't they?

• 31:59Speaker 01

  Yeah.

• 31:59Ryan Sean Adams?

  So it hurts them too, because it shuts them out and they don't see the potential like, like I, you know, I, I do remember. I would, you know, old enough to, to sort of remember this, uh, the, the dot com bubble. And everyone said that like the internet is dead at that time after the bubble popped. Like it would never come back and they dismissed the technology because of the speculative bubble. So it hurts in two ways. This, this kind of speculative nature of things.

• 32:22Speaker 01

  But you know what? That kind of takes care of itself over time, right?

• 32:24Ryan Sean Adams?

  Yeah.

• 32:25Speaker 01

  Because the people who are just buying traffic, um, and don't have something sustainable underneath it. They're gonna be gone. It's just a question of when. You know, you just hope enough individual players, you know, buyers, I don't want to necessarily call them investors. If you're looking for a 50% APY, you're not investing. You gotta know that there's risk there, right? You know, and there should be a disclaimer that, you know, every DEX has to list, right? Every front end has to list saying that, you know, your yield is being paid in the tokens of the people that you're locking with. And most likely, it's going to take X number of days for you just to break even. You know, because if there

• 33:07Speaker 01

  was a break even metric, you know, for, you know, your yield versus your transaction versus the risk associated with the token you're getting, people are gonna think twice and might not dive in.

• 33:20David Hoffman?

  Mark, I want to, I want to go back to the conversation of people using these things themselves rather than using somebody else to be their proxy, right? Because there are some services in DeFi, some services on Ethereum that are very easy to obfuscate using a centralized service provider, but then there are other services, other things you can do in DeFi where it's really wouldn't make sense. And specifically where I think this is true would be NFTs, right? Like, you, people like NFTs because they like them, right? You can't, you can't outsource your own taste, right? So, there are some things in this world where you actually do need to be the person, you know, with making the transaction by like choosing the specific asset. And like, one of the reasons why, why we call bankless bankless is because there are all of these platforms that can remove

• 34:04David Hoffman?

  these intermediaries from, from choices in a bankless world, right? The bankless thesis. And so I kind of want to get, get your take on that because I know you love NFTs and I'm assuming you wouldn't trust anyone else other than yourself to make your NFT selections for you. So when you go and you look at NFTs and you are making those choices for yourself, like, how do you look at NFTs? Like, how do you evaluate these things, especially when they're so subjective?

• 34:31Speaker 01

  Yeah, so that's a great question. So there's a couple of things there. If you analogize it to the art world, right? There are advisories, like I'm not an art guy. There's no art in this house, you know, that I've bought. And there are advisors that come to me every now and then, "Oh, you know, I'm a consultant. I help, you know, wealthy people buy art." And I'm like, "Okay, good luck," you know? And so there are intermediaries that try to fill that role, that understand the marketplace. You know, I know some people that know that this artist is really hot, right? This artist has got a following. And really, what it comes down to is, and the exact same thing applies to NFTs. It's not so much the subjective aspect of the art itself.

• 35:16Speaker 01

  It's more what kind of following does that artist have? Because that following is what creates the demand. Because you're right, there's, it's almost impossible to think that, that if you put up a picture, that everybody's going to feel the same way about it. Like you look at the Mona Lisa and you go, "Okay, somebody thinks that's special." Not me, right? But it's the Mona Lisa. Okay, so everybody, you know, so you're not going to get that commonality. You're right, it's very, very subjective, but what's not subjective and it's quantitative is the size of the following. And so, so when you look at CryptoPunks, when you look at some of the things that Hashmarks is doing, and you look at Beeple, right?

• 36:00Speaker 01

  They have huge followings. And that's what creates the value more, because it becomes a community. It becomes something that creates a commonality. It's like being a fan of the Dallas Mavericks. You know, there's some people who are just, "Okay, you know, I hope the Mavs win." And then there are others, like, "We lose a game," like me, right? And it's the end of the world. It feels like, you know, the world just came to an end with every loss. And I can't sleep that night. And, you know, that's community. And community creates value. And people in the NFT world, you always have to remember that. Community creates value for NFTs. And when you're evaluating them, you have to evaluate the size and the strength and the intensity of the community.

• 36:44Speaker 01

  And so, I don't, the only time I've bought NFTs as an investment per se, where I'm just going to let them sit there, was Bitcoin Origins, because I thought it was cool. And I know those guys and I'm going to do some stuff with them. I did it when, oh my god.

• 37:01Speaker 01

  Eeler, um.

• 37:03David Hoffman?

  Euler Beats, the music one?

• 37:04Speaker 01

  Euler Beats, yeah, Euler Beats, right? About two of those, because to me, it was the most genius idea ever. And that since I've talked, I've talked to those guys since at Triumph. But what was genius about it was it was generative and they did the bond curve and they did a 90% reserve, which means they created a floor for every item, right? So if you took a chance on it, then you know, as long as the prices are going up, you're not, you're going to make money no matter what. And if the prices are going to go down, well, because the reserve is so high, at least it's not going to zero, right? There's some value there. And for them as a company being, you know, a shark, I'm like, it costs them nothing to, the cost of mint, their marginal cost is zero.

• 37:47Speaker 01

  And so, you know, their only mistake was setting a 90% reserve, you know, even though that made me buy more, you know? And so, you know, the, the business side is interesting to me, but again, the community side is most important. But sometimes like the Euler Beats, when you just come up with an idea that I thought was just really differentiated and unique, that's cool, right? That is really cool to me and that's why I invested in them.

• 38:14David Hoffman?

  Yeah, man, there's so many directions I want to go in. I think the topic of audio NFTs is, is hu- a huge one that we are just now scratching the surface, but I want to go back to something you said where the community creates the value. And this is, this is a drum that we've been beating on the Bankless program for a while now, where one of the cool things about all these DeFi apps and all these DeFi tools on Ethereum, their money tools, their value tools, what they do is they allow for cultural expression, right? And one of the reasons why I'm particularly so bullish on NFTs is that there can be one or many sets of NFTs for every single community out there, right? Like the NBA Topshop is the, the NFTs for the NBA community, right?

• 38:55David Hoffman?

  Like there's a, one of my favorite artists, musicians, RAC, he's got his own token and it's like the community token for every sort of culture.

• 39:02Speaker 01

  What do you think about, so are you talking about on, on Audius or on Zora or?

• 39:08David Hoffman?

  I think, I think his specific token is his, is its own native ERC 20 token on the base chain of Ethereum, but the important thing about that is that he made, he made a token and his community loves it. And it's a way for him, the artist, to engage directly with his community, right? There's no intermediaries. He didn't have to ask permission to anyone. He made the token and then the community is like, "I like RAC, I like his music." And it's a way for them to engage. So what's your, how, how does that land with you? Like the, the one community, one NFT, like connection?

• 39:39Speaker 01

  Yeah, I mean, look, there's, there's two things there, right? Just doing an NFT doesn't necessarily mean you want to create a token, right? Because a token carries with it a different set of responsibilities, particularly if you try to do original sale to make money, or to raise money. That, that creates a set of obligations. Like I say on Shark Tank, raising money is not an accomplishment, it's an obligation. The people that gave you that money want something back for it. Now, you may give them back an NFT and that's fine, that's, that's a sale, that's not necessarily a money raise. But building community is everything to every company everywhere. I don't care what company you are, or what you sell, you know, if your customers aren't, don't feel like a community, you're going to suffer

• 40:21Speaker 01

  at some level. And if you're an artist, creating community and using Telegram and Discord and Twitter and wherever your customers want to be is great. The challenge in all of that is only the token. That's it. You know, because, again, that creates a different level of responsibility. Because if people come, if you're RAC and people come to you for your music, just love your music, love everything that you do as an artist, everything. But because they love you, they put their life savings in your RAC token. That's a different responsibility, you know, and it's, you know, I get, I've gotten asked so many times over the years, "Why don't I start a hedge fund? Why don't I start a fund?" You

• 41:03Speaker 01

  know, "Why don't I do a SPAC?" Which is a really hot money raising thing right now, right? Because people are going to put their life savings in based on my name. And that's a huge motherfucking responsibility that I don't want, right? Because, like I said, You know, broadcast.com had the biggest IPO jump in in stock market history at the time, and we ended up closing that day at like $63. But there was somebody who top ticked it at $72.50. And I was like, oh, shit, how am I going to have that person make sure they make money? And that kept me up at night, and that kept me working hard. But you got to have that attitude. Otherwise, people are going to lose. And it's like all these

• 41:46Speaker 01

  DEXs and all these liquidity chases and yield farming. Somebody saying, you know what, some of my customers might lose out on this, but fuck it. I can't do business like that. And that's the challenge.

• 41:57Ryan Sean Adams?

  Yeah, totally agree. Like, so this is what tends to happen during during bull runs is you start to get a bunch of short termers who enter the space, right? So like, but the long term projects that are playing long term games, they're not going to screw over their community. I want to get back to the NFTs, because I think you have a unique, I guess, I take on this, Mark, is like, it feels like we are in the very first stages of NFTs, right? Like, Disney hasn't discovered NFTs. My God, like, the biggest marketing company in the world with massive communities hasn't discovered NFTs. Athletes have barely discovered it, right? Celebrities haven't discovered it. There are all of these communities outside of crypto. And what crypto provides, and Ethereum provides, is this blank canvas,

• 42:40Ryan Sean Adams?

  essentially. So it's like the internet, you know, anybody could spin up a website. Well, now anybody can create an NFC. How big could this get? And what, what do you think we're going to be seeing next?

• 42:51Speaker 01

  It's $100 billion industry, but probably not for 15, 20 years. Right? No, no doubt about it. Because, and put aside the art side of it, the music side of it, look at it from a business side of it. Let's talk college textbooks, right? Literally, I'm checking the market caps of the biggest companies that create college textbooks, and asking, you know, if they were severely undervalued, and like all companies now, they're overvalued to a certain extent, because interest rates are so, you know, relative to interest rates are not overvalued, but relative to history, they are. Just looking to see, should we be looking at? Buying these college textbook companies because there's no good reason at all to have a physical college textbook.

• 43:35Speaker 01

  The only way, reason they do it is because that's the way they've always done it. But the new style college textbook company is going to use, you know, the equivalent of an NFT, whatever they decide to call it. Because now with college textbooks, they lose the resale value. That's why they're overpriced so much, right? You know, kids buy, so many kids buy, you know, used textbooks like I did when I was in college. Um, because that's just smarter way to do it. Maybe you get some good notes in there too. And, and so, but now because you can get your royalties ongoing, right? Why won't you do every college textbook as the equivalent of an NFT, whether you call it that or not?

• 44:13Speaker 01

  And then just issue it, you can charge less knowing you're going to get twenty-five or thirty percent of the resale value and make a shitload more money. You know, those are the things that are going to drive this NFT to a hundred billion dollar industry. It's not going to be artists because you're, you know,

• 44:32Speaker 01

  you're going to start getting into long tail that's too long, right? It's like publishing a book. It's anybody can publish a book. You can get it on Amazon. You can get it in bookstores if you work hard enough. That's not going to mean that there's a market for it and people are going to buy it. Anybody could publish music. It used to be really hard and expensive to publish a song that was, you know, well mixed and, and produced. Not anymore, you know, it takes nothing to produce a song. That doesn't mean anybody's going to buy it or listen to it. And so you're starting, you, you know, we're already starting to see that with NFTs, right? If you go on Minable or Rarible or OpenSea, you see a lot of stuff, even a lot of it that looks good, right? That is really interesting, but has no bits.

• 45:13Speaker 01

  And so the, the real jump is, I mean, we really haven't hit with music yet, so that'll jump. We really haven't hit with professional photographers, so that'll jump and grow the market. But like you mentioned.

• 45:25Ryan Sean Adams?

  How about sports? Yeah. How about sports?

• 45:27Speaker 01

  Yeah, we'll do everything from tickets to pictures, to moments, to everything and anything. Well, you know, I've got a company, MBA Me, um, that I'm part owner in. And all these memes, we're going, you know, once we get the rights, we're going to make an NFTs of them. And so that will bring in more users, but the holy grail of all this are the business applications. You know, if you think about the removing the friction of bankers, because every bank has got to touch it, you know, and you've got multiple layers of people who have got to approve. Businesses work that way in general. Think of payroll, think of college transcripts, high school transcripts. Think of, you know, borrowing against receivables. Um, there's just so many applications.

• 46:10Speaker 01

  And so, and they apply not just to DeFi, but to NFT technology as well. You know, so if I write, if I do a presentation, or if I give a speech, um, and you guys are talking about going on Clubhouse, well, Clubhouse to me is the anti NFT because it's ephemeral, right? There's nothing there to remove. To me, that's a mistake, right? I'm working with a company called Fireside Chat. And, you know, so if rather than having that after party on, um, on Clubhouse where it's just gone, right? You do it on Fireside and you're going to turn it into an NFT and you're going to price it at the equivalent of five bucks or 10 bucks, right? And when someone's done using it, you're going to have a 50% royalty and they can trade it.

• 46:52Speaker 01

  Maybe no one will buy it, maybe no one will trade it, but it'll be there, right? That's the long tail that in aggregate for business applications, that makes this a hundred billion dollar marketplace.

• 47:04David Hoffman?

  I listened to this fantastic Frank Zappa clip last night where he talked about the uniqueness of specifically live performances. And the reason why bootlegged video recordings of performances still go for like extremely large sums of money is because the live performances only happened once, right? There was only one of them, right?

• 47:24Speaker 01

  Look at the Grateful Dead, right?

• 47:25David Hoffman?

  Yeah. Yeah, I've been listening to the Grateful Dead for like weeks now. It's been, it's been, it's been a fun time. And so I want to go back to the, the question of like musical NFTs, music NFTs where, you know, we talked, we talked about Euler Beats, which is like, kind of like the first big music NFT and it's, it's programmatic, computer generated. Less, less art, more computer, right? Like more algorithms. Um, but the, the thesis is that's kind of just the start of the.

• 47:50Speaker 01

  Music is just secondary. It's really the first mass NFT, right?

• 47:54David Hoffman?

  Hmm.

• 47:55Speaker 01

  That's what it is. It's the first math NFT. And there'll be other things that are math-generated that are unique. Maybe it's not visual, maybe it's something else, right? Maybe it's a calming pattern. I don't know, right? It could be like, there's one NFT that I'm thinking of putting up. So I have, long story short, I ended up creating this application in VR that just has these squares that float by, which allows your, if you're dizzy, it recalibrates your brain, your vestibular system and your eyes. And so it helps some people deal with dizziness, and it's patent pending and all this. But it's all generative, right? And so I'm thinking about putting it up as an NFT because it's just math, effectively, and it's calming based off the math.

• 48:40Speaker 01

  There's going to be a whole industry of math-based, you know, NFTs that just have an impact in their own way.

• 48:48Speaker 01

  And so it, you know, Euler Bees was just the first. This can go in any direction.

• 48:53David Hoffman?

  Right, so like, there seems to be a fork in the road, right? There's the math-based NFTs, and then there's like the music auditory NFTs that maybe a musician could be more resonant with. Where do you see, what do you see happening first? Because I'm particularly bullish on like, audio and music and tracks, like, specific songs based like tokens, where you know, you buy the NFT, you get the rights to the audio. Where does your head go when you extrapolate audio-based NFTs into the future?

• 49:22Speaker 01

  Really depends on, what is the standard, 1155 for Ethereum for royalties?

• 49:27David Hoffman?

  1155 and 721s are the two NFT standards.

• 49:32Speaker 01

  Yeah, so the 1155 is the royalty side of it, right?

• 49:35David Hoffman?

  I believe so. I think they can both be programmed, but I think-

• 49:38Ryan Sean Adams?

  Look at Mark Cuban spitting out EIPs, dude. This is crazy.

• 49:43David Hoffman?

  He's asking questions I can't answer.

• 49:46Ryan Sean Adams?

  He knows more than us.

• 49:48Speaker 01

  The 721 is already in place, so that's a given, right? So that's basic royalties. And if I read it right, it's 1155, because I'm also reading the stuff, I think it's whatever, about burning Ethereum and the miners are arguing and all that kind of shit, right? And so, but on the royalties, that'll drive the music implications, right? Because being able to allocate royalties to the whole publishing litany, right? The songwriter, the performer, the people who do the music, the musicians, all that kind of stuff. That's the hard part. It's the same with the movie, right? The executive producer, the producer, the actors, the writers, the this, the that. Like, you know, all the little cameos and acting shit that I've done,

• 50:29Speaker 01

  I'll get a royalty check from this episode of Entourage from, you know, a free screening in Korea, and the royalty will be for $1.15. And they'll send me a check. I literally have a stack of checks that big from Entourage that are $2 or less, and I'm just saving them to auction them off on eBay for charity, right? Where I autograph them.

• 50:56Speaker 01

  So you've got to solve the business side of the problem first. And smart contracts are a better way. And when the standard really becomes usable for the distribution of royalties, then you'll see the explosion, because it's a better business solution. That's always the key. You always have to ask yourself, on one side, you think about the demand, and that's always important, right? More music, more people, more demand, right? But you've got to think of the business side, and is this a better way? And fuck, yes, it's a better way. It's not even close. But there's got to be standards, because Ethereum right now has, you know, got this scaling issues that hopefully go away with 2.0. And then there's all these other competitive blockchains, and you, you know, do they go there where you kind of control it?

• 51:40Speaker 01

  Will it be acceptable? All the normal questions, right? But those have to be solved first.

• 51:46Ryan Sean Adams?

  So what's exciting about all of this? And I don't think yet mainstream sees it, but we see it because we're here is this is Mark. This is like the birth of a new economy here, right? Like we're talking about all of these products, all of these cool things in the digital world that you can't get in the in the physical, in the analog world. Right? So this is the birth of a whole new decentralized finance Ethereum crypto economy here. What I want to find out, and I think what what people listening want to find out too, is how you think about this space, more specifically back to putting on your investor hat. Right? So like your skin in the game.

• 52:21Speaker 01

  It's really, really, really simple.

• 52:23Ryan Sean Adams?

  Go.

• 52:24Speaker 01

  For individuals, is it the path to least resistance? Does it make your life better? Yes or no? That's it. On the business side, does it make you more productive, more competitive and more profitable? That's it. And the answer is yes, across the board.

• 52:39Ryan Sean Adams?

  Yeah. Okay. So let, let, can we talk about basically where you have skin in the game, what you're kind of betting on, right? And we don't have to get into specific projects, but I want to know like what layers like Bitcoin, for instance, is that is that we talked about that earlier? Is that something you like?

• 52:53Speaker 01

  Yeah, I've owned a bunch of Bitcoin for a long time, right? Despite what people think, right? People would send it to me when it wasn't worth much trying to convince me and I kept it. You know, I bought some along the way and I've kept it. I've never sold one Bitcoin or a fraction of a Bitcoin.

• 53:05Ryan Sean Adams?

  It's extremely rare that people keep their Bitcoins that people send them to them. So so congratulations for doing that.

• 53:12Speaker 01

  Yeah, I did. I mean, I didn't need the money. So, you know, um, you know, same with Ethereum. And I got a bunch of shit coins, to some of which I thought were shit coins that now are turning into real value because everything's trading up. And I bought some more along the way. Um, and so on the token side, you know, that's not as big a play for me right now, even though in absolute terms, it's a fair amount of money even for me, right? Because I've accumulated over the years. Um, so, you know, I lose when the price goes up, I make a lot of money. When the price goes down, I'll lose a lot of money relatively speaking. Um, but I'm not, I'm not selling it, not changing it.

• 53:52Speaker 01

  Sometimes it's fun to trade in and out of some of the smaller tokens just to try to be right, but that's not really investing. That's just that speculating. Now, in terms of investing, um,

• 54:04Speaker 01

  You know, there's a difference as an investor, I don't look at tokens as an investment other than, you know, you can look at Maker because you get a percentage back, right? You can look at, you know, others where I've done things on Rarible and they've given me Rari, right? You know, and maybe that's earning it, so that's an investment. But I look to make more equity investments, like traditional type investments, as opposed to looking as a token as a traditional investment. It's not, unless it pays you a dividend of some sort. And so there, I'm investing in the minting side, right? Because I think, you know, simplifying minting and integrating the different EIPs that come along, you've got to be able to do that. All these things that we're talking about with music start with minting, right?

• 54:48Speaker 01

  If the minting's not easy and it's not usable and it doesn't carry over into as many marketplaces to get in front of as many users as possible, if that part doesn't work with minting, it doesn't work at all. I'm investing some in marketplaces. There's so many marketplaces popping up. But there's one, you know, Bitcoin Origin, right? I like those guys simply because they talk about the narrative. They create stories, right? So their marketplace isn't about just accumulating as many NFTs as they can, but about working with artists that generate stories and generate narratives because that builds community, right? And having that community, as we said, is important. I'm working with Injective, right? So, you know, because I like that their order book decentralized,

• 55:31Speaker 01

  meaning that they're using traditional market makers and bringing them over and you'll be able to trade in stocks and crypto and whatever else, right? I haven't invested, but I worked a lot with Ave, right? Because even though they need a lot of help with their user interface, that's where I got started and they're fair, they work, right?

• 55:52Speaker 01

  What else have I done? But I'm looking at those types of things where there is literally a business there and I'm investing in the business and the technology and the entrepreneurs and hoping that they're the survivors and the thrivers, right? And so that's what I look for right now.

• 56:11Ryan Sean Adams?

  Crypto has always had this question of where is value going to accrue in crypto, right? We're building this whole new economy and you know Bitcoiners will tell you Bitcoin, you know Bitcoin is the value accrual for this stuff.

• 56:23Speaker 01

  We're not building a whole new economy.

• 56:25Ryan Sean Adams?

  Okay.

• 56:26Speaker 01

  What we're doing is trying to make the existing economy more efficient and more productive. And you know, if you're a business, more profitable. And if you're an individual, more usable. Right? It's not a new economy. It's any more than the internet created, the internet economy. Right? We're still transaction. We just moved where we transacted. We saw that with the pandemic. You know, there's still people who preferred going to stores and you know, my wife used to love grocery shopping, right? Not anymore, right? So now you know, it's all Amazon all the time for me. And so the economy is the same. We're just trying to make it better.

• 57:01Ryan Sean Adams?

  Yeah. So this is, this is moving across from, from analog to digital, maybe same economy in some respects. We're making it better. But like, tell us where value is going to accrue here because there's kind of two layers we're talking about. One is like the money layer, the store of value layer. We might put Bitcoin there. We might put Ether there, although Ether also has some utility value, right? You have to use it to pay for transactions. Talk about that layer. And then let's talk about the layer up, which is the application layer and where we've got all of these DeFi tokens. Where's value going to accrue here?

• 57:30Speaker 01

  So it really depends on what happens with 2.0, right? Because there's a lot of bets for and against. The companies I work with, I try to make them blockchain agnostic. You know, because everybody's trying to do their best to come up with an alternative to Ether or to complement it at some level. But it, you know, if you're creating your own blockchain, you've got to have an application that's already driving it. So it's just like Flow with Topshots. They've got an application that's driving it and that's what's making it work. And so I look for combinations there, right? Now, you know, right now, you can't bet against Ether 2.0, you know, but I can see why a lot of people are trying to preempt it and trying to, you know, hype it in every way they can. You know, you see

• 58:15Speaker 01

  Binance doing what they're doing. You see Flow doing what they're doing. And you know, it's different, but in their own way, they're trying To be that the gravity that brings in users. Um, because that's the traffic and that's what's going to make their business work. On layer two, um, it's really just depends on the application. And what I look for are business world applications, not just crypto, uh, crypto world application. But what changes how businesses do business? You know, smart contracts, that's why I'm learning solidity so I can visualize. Okay, here's how you would program it. This is why it works. This is why it's better than what a company is doing right now. For payroll, for human resources, for accounting. I mean, imagine accounting system, you would never have an Enron or a fraudulent accounting if you had, um.

• 59:01Speaker 01

  If you had, and I'm gonna get all these wrong with proof of work, right? Distributed proof of work where you've got hundreds of, hundreds of accountants who decided to make their money staking or, you know, confirming blocks for general ledger entries. And I know I'm getting the terminology wrong, I'm still learning it, but you know, you get my point, right? If I, if I have a whole group of accountants that are, you know, are, are validators. Um, and they're confirming, look at, look what happens in healthcare, right? This is the best example. So, right now, if you go to your doctor and, and they say you need this or that. And then you go to your insurance company and you hope they don't deny it, right? Or, you know, and it's a battle, or in the hospital itself, once you get it done, you hope they don't upcode it so it costs you more.

• 59:47Speaker 01

  Um, well, if all that was done by independent validators who have been trained and are rewarded by doing a good job and confirm each other, right? For accuracy, now all of a sudden, it's not just in a hospital and you, you, you eliminate fraud. Right? And you humanize the whole process. And those are the types of things that I look for. So to me, like I mentioned earlier, the grand slams aren't the crypto community. Those are proof of concepts. And it's interesting and exciting and fun, you know, there's a lot of great things. But if you could change healthcare. Because you have validators that have all been trained and they're all independent of each other across the country, across the world, whatever. Right? And they're confirming whether or not a, um.

• 1:00:33Speaker 01

  Um, a claim is payable or not. You know, or whether it's accurate or not, or whatever it may be, and same for, you know, accounting applications.

• 1:00:45Speaker 01

  That's enormous, enormous. All the healthcare fraud and shit and pain and agony that people go through. You know, when you get sick and you just hope to God that you can pay for it and not go broke. And so when you talk Medicare for all, that's, you know, you can argue whether that's right or wrong. But when you talk, you know, validating independent decentralized validation of claims. That's healthcare for all, right? That's sanity and reduced anxiety for all. And that's what I look for when I look at these things. And that's why when you look at this, you know, Bitcoin, everything has a store of value. That's great. That's fun. That's exciting. It's an investment, you know, if you really understand it.

• 1:01:30Speaker 01

  The NFTs, starting with music, that's great, right? Um, it can change industries there as well. Um, textbook, we talk music, et cetera. Just blockchain itself and layer two, you know, all we have to layer four, applications. Apply to traditional business and making them fair, decentralized and more efficient. Which in turn leads to lower cost and more profitability, hopefully. And imagine, you know, a company built around blockchain that does have their own tokens or your partner, you know, uses someone else's tokens even. And you're able to give to all your employees, not only shares of equity, if you're a public company or even private, right? But also those tokens so that every one of your employees have an appreciable asset. Hopefully appreciates, right?

• 1:02:13Speaker 01

  Because that's part of, you know, income inequality. And that's part of the decentralized nature of crypto, right? If you can get, you know, any, any coin token with algorithmic scarcity built into it. And you get, you know, one Satoshi into 330 million Americans' hands into a, you know, a wallet that's automatically set up at birth. And every time they, you know, they graduate from, from first grade, second grade, third grade, you know, they, they get. You know, they're fed, right? They get a Satoshi, right? And they're building up things for basic, you know, and it's, you know, even if it's one tenth of a penny, you know, in valuation, and I'm not trying to do the math in my head, but whatever it is, right?

• 1:02:55Speaker 01

  You know, and they're just accruing this and accruing this and aren't allowed to sell it till they're thirty years old, or whatever it may be, or have to hold it for ten years. Now, you're seeing how this decentralized nature and the fractionalized nature of this, and the value of a USDC. So put aside Satoshis, just to say it's one, you know, of a fiat equivalent, you know, stablecoin, one dollar, and you're giving somebody a penny every time they do something right, but from the day they're born. You know, and they're able to accumulate this asset that can appreciate.

• 1:03:27Speaker 01

  That's huge.

• 1:03:28David Hoffman?

  So, so Mark, this is a conversation that we also have on the Bankless Program quite a lot, which is where crypto, where blockchain, where Ethereum and some of the biggest issues that we see in society intersect, right? And I know that you had a tweet that went pretty viral with the whole like GameStop debacle and comparing and contrasting it to DeFi. And one of the big things that I think that Ethereum can bring to the world are solutions that are helping, that can help mitigate some of the social unrest, the wealth inequality in this world, right? Like, we saw like the deplatforming of people that were wanting to trade on GameStop, right? Or wanting to trade on Robinhood, excuse me. And there's exactly what you were talking about, these broader conversations of wealth inequality,

• 1:04:13David Hoffman?

  where in the legacy financial system, the non-crypto financial system, there's very well-capitalized entrenched players. And like the younger millennials, the Zoomers, there's this sense of like kind of despair, that like climbing the ladder and making a name for yourself is just like too hard in this calcified system. And like one of the value propositions of DeFi and Ethereum is like, there is no ladder. Like, everything is so new, it's so flat, it's easy to climb that ladder. And one of the narratives that we're trying to harp on is that like this new world is unsaturated, and young entrepreneurs can do something cool in this world, and it can help solve some of the biggest social issues of the day. How do you think about this?

• 1:04:56Speaker 01

  I agree. I mean, it's like the early days of the internet again, the early days of the PC industry, right?

• 1:05:02Speaker 01

  You know, there were the tech dinosaurs, you know, that never believed, oh, I'll never use a PC. Who the hell needs that? I got Betty and Suzie and Sam over there. They do my PC work. They're gonna die eventually, right? But it was opportunity when I was your age, right? And when everybody else was shitting on it, I was like, fuck y'all. This is gonna change everything, right? And I'm gonna connect these things together. And then it was the internet. It was the same thing for, we're super young millennials back then, right? It was like, okay, let's go, right? You know, this is changing everything. And crypto is the same thing. But the underpinning, and I'll keep on repeating this, the underpinning

• 1:05:41Speaker 01

  of it is, there's got to be value created from the applications. And there are. And that's why I'm excited. Because I can see, you know, and I mentioned some of them, just like I saw with PCs and software, and that's why I taught myself how to program, and local area and wide area networks, and then mobile, and then Hi-Dev, and now with crypto, and teaching myself, and AI for that matter, don't want to leave that out, right? AI is also a world changer. And now crypto, right? So each of them has had their own dramatic impact on applications and business, right? And people's lives. And in hindsight, it's really easy and it makes perfect sense. Of course you're gonna stream. Of course you're

• 1:06:26Speaker 01

  gonna use a PC or a phone. Who the fuck would think otherwise? Well, back when it's happening, everybody doubts it. Every single idea that I've ever had that's made me big fucking money, everybody thought I was crazy. Everybody. And if you don't think I'm crazy when I come up with it, then it's not the right idea. Because there's, you know, and that's the same thing with this. You know, people don't know what the blockchains are. They don't know what smart contracts are. They don't know about layer one through three, four, right? They, you know, it's all foreign to them. So they're not gonna understand it. But if you or I or any kid out there can see that application, and figure out, and then do it, and then implement it, bam. Right? It's like, there were plenty of search engines before Google.

• 1:07:13Ryan Sean Adams?

  So Mark, at this stage, like, how do you, I want to know how you explain it to people? So you got, you got somebody who sees your tweets, you know, a friend of yours, maybe knows you're into crypto, knows like you, you're into tech, you got in on the internet. How do you explain it to the, to the average person on the street? What's going on?

• 1:07:30Speaker 01

  Don't, right? I don't try.

• 1:07:34Speaker 01

  You know, so trying to get into DeFi right now, it's too early. It's just like, you know, when we were starting streaming, I didn't try to explain streaming. And I just said, do you want to listen to the Cubs game while you're in the office?

• 1:07:48Speaker 01

  And then we did research to say, you know, the PC was the dominant media device on 97% of corporate desktops. And only 3% of them had radios or TVs. So we were the only way for someone sitting at their desk in the office to be able to listen and then watch something. I'm like, do you get that? You know? And so what you do is you think of a basic application. How would you like to borrow money? So you cover your overdrafts in 10 seconds or 30 seconds or less and not need permission from anybody. How am I going to do that? Well, you got to have more than you're borrowing. That's the first problem, you know, for right now, you're going to be over collateralized. But if you're able to save that money, right?

• 1:08:30Speaker 01

  And you just don't want to, you want to leave it in your bank account and you want to borrow it to pay a bill, knowing you're going to get paid next week. Great, you got to save up that first, you know, tranche to be over collateralized. But after that, you never have to talk to a bank again. Does that work? Well, I can't really save the money, but if I could, it would. But then slowly but surely, hopefully in your life, you're able to save some of that money, right?

• 1:08:53Speaker 01

  And then you start seeing. And so it's the application, I don't try to explain the crypto. I try to explain the value. And when people start seeing the value, then it works.

• 1:09:03Ryan Sean Adams?

  That is such a good point that like I think people who are deep in crypto, maybe sometimes the listeners on our, maybe ourselves, David, that we sometimes miss is we, oh, you want to learn about blockchain? Let me tell you about how blockchain works, but really it's like they don't want, they want problems solved. How do I'm making like close to 0% in my Wells Fargo bank account? How can I make 5% right in a relatively risk-free way? That's a, that's a problem you solve. I, I just got disconnected from Robinhood because they stopped me from trading GameStop. Well, there's a synthetics version of the S and P 500 and stocks on Ethereum that they can't shut down. That's what you're talking about.

• 1:09:38Speaker 01

  Right, right. So like injective, why do I invest in injective, right? So one, the whole stop out, right? Because of the capital requirements, Robinhood didn't do it on purpose to hurt them. They just didn't have enough equity, right? They didn't have enough capital and so they had no choice. They would have gone bankrupt because they had too many customers. But doing it in a decentralized manner, but because it's transparent, that's the thing. Because it's all in the blockchain, every investor gets to see exactly how much injective has of all this, right? There's no, you know, it's not, it's all decentralized, so there's no hiding it at all. And so that creates one opportunity. But the, the second part of that is the governance aspect of it.

• 1:10:18Speaker 01

  You know, if you created a Wall Street Bets governance token and everybody got to vote every hour, right? Or assign somebody which stocks they're going to buy or sell. Or for each stock that they own, have a governance of whether they hold it or sell it. And it's voted on every minute, hour, or whatever they set. That's Wall Street Bets and it's going to work.

• 1:10:39Ryan Sean Adams?

  It's so crazy because what we're talking about is, all, all we're talking about is adding a, a capital coordination layer to the community that's, that's already happening, Wall Street Bets community. It's just giving them an outlet.

• 1:10:50Speaker 01

  Yeah, that's the application. That's the way I think. What are the, that's the programmer, business programmer side of me, that when I was first getting started, here's what you're doing manually. Here's how I'm going to automate it. How do, what's, what's the logic to get me from point A to point B? This is no different. Here are the, that's why I'm, I'm trying to learn solidity. That's why I'm learning as much as I can about blockchain and smart contracts. Because that allows me to visualize how I get from how they're doing business today to where they should be using these new tools and whether or not it can be done. Same with AI. It's one thing to talk about it. Look, my investment thesis, you didn't ask me on, on traditional stocks, is who does AI the best?

• 1:11:31Speaker 01

  If you look at the biggest market cap companies without fail, they are the ones that have been doing AI the longest and do it the best. And they continue to take market share from people and make more money at times when their competitors are not because they're that good at AI. And the same thing will apply to crypto and companies as well. The companies that are best able to apply blockchain and smart contract technology and whatever else comes along to layer on top of that will be the ones that have the biggest market caps and the most profits because they'll be more efficient and will have happier customers. That's the way I look at it.

• 1:12:07David Hoffman?

  Mark, I want to ask your perception about narratives because the crypto world runs on narratives. Everything is a narrative. Like, we can talk about the fundamentals of certain DeFi tokens, but I will promise you that that won't be the reason why that token goes up or down in price. It's because of narrative.

• 1:12:23Speaker 01

  Of course.

• 1:12:23David Hoffman?

  It sounds like you already know where to go.

• 1:12:27David Hoffman?

  A comment that I heard you talk on a different podcast was something along the lines of like you slapped like a baseball card down on the table and then there was some stock and you were saying, which one's going to go up more? I don't know. And so talk about that because like the legacy, a big criticism from the crypto space to the legacy stock market is that we think it's based on fundamentals, but it's actually based on narratives. Like, talk about that and talk about how crypto is different.

• 1:12:52Speaker 01

  I wrote about that shit 15 years ago, right? So if you go to blogmaverick.com and put in the word stock, you know, for a search term, you'll see the stuff I wrote. You know, what is buy and hold? Buy and hold is just a narrative from, you know, stockbrokers so that you hold on to your stocks, right? And, you know, think about Wolf of Wall Street and all the shit that, you know, when they were pitching these shitty ass stocks. It was all narrative, right? Creating the story and, and, you know, they would, they would talk about, got to create the story. You got to let them see that wealth in their mind and all this. And, you know, price earnings ratio, what does that really mean? Look at Apple, right?

• 1:13:30Speaker 01

  For the longest time, Apple was considered a cyclical stock, which meant it traded in the 10 to 15 price earnings ratio range. Then all of a sudden, everybody decided it was a growth stock. And so now it could trade as a multiple of everything else, right? It's all narrative. My broker taught me that. So when I first sold my first company when I was 29, 30 years old, and I made a few million dollars, I told him I wanted him to invest like I'm 60 years old, right? Because this, I wanted this to last me a long time because I just wanted to party like a rock star. But a lifetime passed in American Airlines, just went out to get, party with as many people as I could. Um, and he told me something, he goes, look, he goes, you have a platform, you know, back then it was much smaller, but you have a little platform.

• 1:14:14Speaker 01

  And the thing that makes stocks move is when you get long a stock, you get loud the stock. And I learned it, and it's the same thing. When you buy a token, get long, get loud, and that's what people do. You see CZ at Binance, he's superstar at that, right? He knows how to play that game. You saw Tron, um, you know, talking, you know, paying people to pump up their, their, um, their tokens. And you're seeing in other places as well. People don't know anything. And perception is reality when it comes to valuation. Why, why is the stock market where it's at? The stock market has been down the last five or six days. What really changed? Nothing. Nothing. You know, maybe interest rates went up a tiny bit, maybe there's some fear and you watch CNBC,

• 1:14:58Speaker 01

  and they get people coming on all the time. And I remember going on CNBC, you know, a while back, and it was fun because I would tell people, yeah, I'm going to talk about this stock. I don't own it, but I'm going to talk about it because you own it. And you'd see the stock go, be, be, be, be, be, be, be, be, be, be. It's no different. It is absolutely no different whatsoever. So now it's just streaming shows like this where if I say, you know, I'm buying this token, chances are the price is going to go up.

• 1:15:26David Hoffman?

  So what are you buying, Mark?

• 1:15:28Speaker 01

  I told you, actually, what? Yeah, I'm not, what am I buying? What did I last buy? No, I'm not going to do it.

• 1:15:35David Hoffman?

  I was like, no, no way is he actually about to say that, no way.

• 1:15:38Speaker 01

  But actually, one of my wallets, one of my wallets is public. I got a bunch of them. Um, one of my wallets is public, you know, because of the minting I did on, um, on the NFTs.

• 1:15:47David Hoffman?

  Did you know that you were going to make that wallet public when you did that?

• 1:15:50Speaker 01

  No, I did not. I did not know.

• 1:15:54David Hoffman?

  That's really funny. So I want to take to put this into a takeaway lesson for any of the listeners here. So for for the for anyone who's new to DeFi, anyone who's listening in the stream like do know that like DeFi and Ethereum and crypto. And basically that runs on narratives. So so Mark, you've been on both sides. You've been on the legacy world, legacy finance, and now you're playing in the in the crypto world. Understanding that everything runs on narratives, what should new players understand? Like how what are the lessons that that we can teach them right here on this live stream?

• 1:16:22Speaker 01

  I tell everybody about a stock, do your homework, right? No one sells you a token thinking the price is going to go up.

• 1:16:34Speaker 01

  Everybody sell unless they just need the money, right? Or for some other external reason, like because particularly in crypto, because you could borrow against it. Now, maybe they're selling it because they got called in a margin or whatever, because the stock, the the price is going down. But you got to do your homework. You got to do your homework. You got to know why you're buying it, because if you don't know why you're buying it, you don't know why you'll sell it. Right? So if I buy a stock, I'll hold it. And I learned this expensively, right? Because I used to try to time the market. I used to think, oh, I've got a great feel for the market. You know, um, no. But what I learned and what's paid me a lot of money since is why am I learning why I'm buying a stock? And until that changes, just hold on to the stock. And if it falls back and it still stayed the same, buy more.

• 1:17:18Speaker 01

  So if it's injective and you know, they're they're not live, they're still on testnet. So you know, it's all just fun and games right now. But if I like what they're doing, right? And they keep on progressing the way I like it. If it follows, I'll buy more, you know? And if something changes where they set a goal, they're going to do A, B, or C, and they weren't able to do it. Or they were only able to do A and B, and they failed miserably at C, then I'll sell. So if you're new into this, whether it's NFTs, whether it's tokens, whatever it is, know why you're buying. And if you're just buying because somebody on Twitter told you like Doja Coin, Doggy Coin, like I tell myself.

• 1:17:58Speaker 01

  Literally, like my 11 year old son, I have an account I set up for him, my account for him on Robinhood. And my daughter as well, my 14 year old daughter, my 14 year old daughter doesn't get as fired up as he does. And I'm like, why are you buying this Doggy Coin? He goes, because it's Doja Coin. I'm like, I know, but it's still a doggy, you know? And let me just say. Buy Doja Coin all you want if you know it's fun and it's like a lottery ticket, right? And you're just playing a game. Otherwise, think twice. And I said to him, you know, why, why are you even into, how did you even hear about this? TikTok? Right? So there's all kinds of people blasting shit out on TikTok that kids are getting into. And, you know, it's just the whole get long, get loud principle.

• 1:18:43Speaker 01

  And you've got to ask yourself, why are you buying this? What do you understand about this company and what they're doing? You know, um, so when you see BNB or Matic or, you know, who else is Layer One? Near or Solana? Is that right, Solana? Um, so, you know, the, the Layer One guys, the blockchain guys, that you read their white papers, they're all great stories or flow for that matter, right? They're all great stories. No one puts out shitty white papers for the most part, right? But at least, you know, be very critical of them and understand and know why you're doing it. So in the event they don't deliver, that's when you sell. And so that's what you really have got to do if you're getting involved in this. If you're just winging it, then that's fine.

• 1:19:27Speaker 01

  Like in stock, stocks, you know, they have technical people who buy based off of technicals, right? They just buy or sell based off of what the charts tell them. That's okay too, you know, and you're seeing more and more of that. And I think if anything, that's probably one of the biggest problems crypto has is that it's not a truly efficient marketplace. And you're getting more and more quantitative sellers, I mean, traders involved trying to arb all the variances across the board in, in real time and their own version of high frequency trading. And that in one respect, it helps balance the market. But in another respect, there's a lot of front running going on. There's a lot of people that, you know, are getting, you know, getting ahead of retail investors. So you've, you've got, you've got to be careful.

• 1:20:12Speaker 01

  Um, this is not like buying or selling stocks just because it's not regulated.

• 1:20:17Ryan Sean Adams?

  Good advice, Mark. This is great. Okay, so I said this in the intro. It feels like you have fallen down the crypto DeFi rabbit hole in a big way. I feel that even more so at the end of this conversation. So my question to you is, what are you gonna do next, man? Is crypto gonna be like one of the areas you play in for the next like five to 10 years? What do you do?

• 1:20:38Speaker 01

  It's really what I talked about. How can you disrupt? So the way I look at it, how can I use blockchain in particular? And smart change in particular? And come up with applications that just disrupt shit? You know, I mentioned medical, you know, insurance, textbooks. We talked about music, but everybody's looking at music, right? You know, there's business applications. Exactly, you know, back in the day when I was first getting started with PCs. How can I fuck things up, right? How can I change the way a company does business? Then I got to local area networks. How can it change? Wide area networks, how can it change? And along the way, I taught myself how to program, because that was the only way these applications are going to get done.

• 1:21:20Speaker 01

  I wrote the first purchase order system that integrated with Walmart, you know, back in the day. You know, I wrote an application that took pictures of jewelry at Zale so that they didn't have to store physical watches and everything in the vaults for buyers to go look to make sure it's the same way. How do you change those games, right? And then same with streaming. You know, even though you could watch the Cubs game or listen to the Cubs games in the office, we did that as proof of concept. Back then, in order to have an all-hands meeting for a company that was in multiple cities, they would literally rent satellite time and go to theaters during the day when they were empty and send their employees there and beam it down. And that's how they would have all-hands meetings. And we made most of our money doing corporate applications like that. We called it our business services.

• 1:22:05Speaker 01

  That's the exact same thing I'm looking to do here. How do you take things that are done in a non-blockchain, smart chain world, a smart contract world? And apply it to the way things have always been done? And say, how do you disrupt it? How do you change the game so that the world is just a different place?

• 1:22:28David Hoffman?

  Hey David, you're muted buddy.

• 1:22:30Speaker 01

  Muted.

• 1:22:31David Hoffman?

  Oh, there we go. Mark, I want to present a scenario to you, which I think is going to happen in the future, right? So you're on Shark Tank, like doing your thing.

• 1:22:39Speaker 01

  Shark Tank's on ABC.

• 1:22:41David Hoffman?

  Yeah, that's the one. That's the one. That's the one I mean. And so then someone comes in and pitches you and it's something Bitcoin, Ethereum, DeFi related. And I'm assuming this hasn't happened yet. What gets you out of your seat? What gets the checkbook and out and like gets that check signed right then and there?

• 1:22:58Speaker 01

  They know their shit, right? They gotta know what they're talking about because I don't want buzzword, you know, you know, promotions or buzzword pitches. That is of no value to me whatsoever. It's just like AI. People will mention AI or they'll know that I like sensor based applications, right? So they'll mention sensors and then I'm going to quiz them. Is it off the shelf? Or is it something you created? You know, who, you know, for AI, are you using open source libraries? Or is this something unique? Is this a unique data set? How are you creating it? How are you scaling it? Yada, yada. Cost. People don't realize how expensive AI is. Same with blockchain. It's not so much that it's expensive, but you know, who are you competing with? Why are you better?

• 1:23:40Speaker 01

  What's unique? What's differentiated? What's, you know, what's going to make people want to do business with you? Or what impact are you going to have on the business world that allows businesses to become more profitable, productive and competitive and, you know, change the game?

• 1:23:58David Hoffman?

  Mark, you got any predictions for us as we close out for 2021? What's in store here, man? For, I guess, you know, let's talk crypto, DeFi, NFTs, anything you want to throw out and then, you know, maybe more broadly?

• 1:24:11Speaker 01

  First of all, Shark Tank's going to be a great show this season. Second, Mavs play tonight. So that's all I'm thinking about. Third.

• 1:24:21Speaker 01

  You know, it's going to be business driven. As much as, you know, it's like, again, like the early days of the internet where people who are passionate about the net, you know, I would go on to CompuServe, long gone, right? Prodigy, long gone. AOL, the old walled garden AOL, long gone. And have these conversations about the internet and how they're going to screw up, you know, those businesses, right? The chat rooms. Um, and, but the people there were really passionate. And then you get on UUNet and the people there were really passionate about the internet and those chat forums. Um, and so now it's the early adopters that are really excited about it. There's ways to make money.

• 1:25:01Speaker 01

  There's better places for individuals to earn some yield as long as they're careful and know what they're getting into. Right? So that's all good, but that's kind of just basic stuff. The big money, you know, and so we're talking about trillion dollar Bitcoin. Amazon's worth one point, whatever. Apple's worth one point ever. That's just a singular company, you know? Um, and I think gold, I mean, I think Bitcoin is going to take away from gold, but macro basis, you know, there's still a game being trade played for NBL and market cap valuation for tokens. So what? You know, that, you know, that's just ego more than anything else.

• 1:25:44Speaker 01

  The market cap of a token really doesn't mean anything. The NBL of a site, it's a great metric. I mean, I guess it's the best metric we can come up with so far, but it really doesn't mean anything. What does it really mean?

• 1:25:59Ryan Sean Adams?

  There's definitely a lot of, you know, vanity type stuff going on. As you talked about earlier, there's, there's ways to sort of, uh, you know, hack those metrics and bend it in, in any area. This is definitely going to be a proving time for crypto, I think, in a big way. Um, it also.

• 1:26:14Speaker 01

  The way you'll know, you put aside what Tesla did and talking about the valuation of Bitcoin. The proving ground for crypto is in the applications where you see companies all of a sudden using blockchain and using crypto in a unique way to disrupt incumbents. That's when the game changes. So when you see some zoomer come in that's, you know, 20 years old and came up with a new payroll system that disrupts all the SaaS and all the, you know, the new payroll programs that are out there, right? When you see one coming up that displaces Twilio, right? You know, that displaces Plaid, right? Plaid should be, you know, first in line

• 1:26:56Speaker 01

  for to be disrupted, right? They're a great company, but it, you know, they're what they do basically is arbitrage the hassle factor for traditional finance. And so when you see people coming up with applications that just totally mess them up, that's when you know it's here to stay and it's going to grow. That's really the key to the future of crypto. And if I'm wrong and those applications don't exist, then it'll just be a sideline and it'll be a store of value and that's it. And there'll be some specialty applications.

• 1:27:32Ryan Sean Adams?

  Well said, sir. Yeah. And we on the Bankless Program think that the banking and finance layer will be one of those first layers to be disrupted.

• 1:27:40Speaker 01

  But you make it easy. Right now, it's too hard to deal with the wallet and understand it. You know, it's too hard to yield farm for most people. It's hard to understand the macro basis. Maybe you can make some money off of it. I bet half the people that do yield farming are losing money. You're, you know, if the whole thing in this is decentralization so that anybody can make some money from it, between transaction fees, even if you're on some other blockchain, right? You know, it's hard to, to really, because you don't only have the risk, you have the slippage, you have, you know, beyond, that's just on the time of the transaction, you have the movement of the token, the volatility of it all. And so unless you time it right, you know, it's hard.

• 1:28:24Speaker 01

  And so I would bet half the people and are losing money on yield farming, the small people, right? And the big ones, you know, they get to call their own game because they create the liquidity that that's needed. And so it's not the The fairness that people want it to be today, right? But as these applications get easier to use and the tutorials are better and the friction is reduced significantly, then you're right, like I said, you know, owning any Ethereum or Bitcoin in particular is like owning your own private bank. You just have, but the hard part is figuring out where to deposit it and how. And once that is simplified so that, you know,

• 1:29:10Speaker 01

  you know, the thought that you have to get it from your bank account is dismissive in the first place, right? To get it from fiat to Bitcoin, that's got to be easier. But once it is, and I'm getting paid in USDC and it goes right into my wallet slash bank account, and I convert it to whatever I want to, whether it's algorithmically or I get to choose. And now, you know, I'm incented to save, right? Because of the collateral basis, right? So I'm incented to save because now I can pay my bills from there, I can borrow from there, and it all happens simply and at the lowest cost ever. And so when those things start to happen, that's when the game really changes.

• 1:29:54Ryan Sean Adams?

  That's a message to the builders. There is lots to build out in this space. And I think Mark Cuban, he wants to hear from you. If you've got some good ideas, I'm sure you'd love to hear from you. Guys, as we say so often, this is the frontier. It's not for everyone. It's risky out there in DeFi world, but we're glad you're with us. We want to do a last shout out to Gemini, Ave, Monolith, and Dharma. These are the sponsors that made this show possible. We want to also thank Mark Cuban. Dude, it is awesome to have you on the Bankless Journey with us. Like, we need advocates and supporters who understand this stuff, who have used MetaMask and deposited into DeFi protocols to help spread the word. And it's awesome that you're doing this here, so we appreciate it.

• 1:30:35Speaker 01

  Thank you guys for having me on. It was enjoyable and I always learn something from this, and so that's what's important to me.

• 1:30:40Ryan Sean Adams?

  Awesome, fantastic. Well, lastly, guys, we went over risks and disclaimers, but David, you and I are jumping into Clubhouse for a bit of the after-party. What's going on there, man?

• 1:30:50David Hoffman?

  Yeah, so this is going to where me and Ryan are going to do our after-episode debriefs, right? So this is something new that we're doing on the Bankless program. I'm going to open up that room here in just a second. There's a link in the YouTube description. If you want to join the Clubhouse after-party where we talk about the episode, that's where it's going to happen.

• 1:31:07Ryan Sean Adams?

  All right, Mark, you're of course welcome to join us, but I'm sure you've got other things. Mav games, a Mavs game on tonight. All right, we'll take care. See you later.

• 1:31:16Speaker 01

  Thanks, take care.

• 1:31:17Ryan Sean Adams?

  Bye. See you in clubhouse, everyone. Bye.