8 - How to go Bankless

Episode: #8 April 20, 2020 Where the rubber meets the road... this episode is all about both the mental mindset and the actual tools needed to go Bankless. Bankless is a state of mind! It's a lifestyle centered around independence and freedom! This episode discusses the tools that you can use in your life to support that mindset and enable Bankless growth. How to go bankless: Start with why (“goals”) Set a weekly plan (“process”) Start doing things (“implement”) Measure outcomes (“measure”) ----- Tools from our sponsors to go bankless: Rocket Dollar https://www.jdoqocy.com/click-9261763-13920047 - tax shelter your crypto ($50 w/ "BANKLESS https://www.jdoqocy.com/click-9261763-13920047") Monolith https://monolith.xyz/ - holy grail of bankless Visa cards Aave https://aave.com/ - money lego for lending & borrowing Zerion https://zerion.io/ - portal to your DeFi portfolio ----- Episode Actions: Set goals & commit to level-up weekly Read articles: How to dollar cost average into crypto https://bankless.substack.com/p/how-to-dollar-cost-average-into-crypto The crypto money portfolio https://bankless.substack.com/p/eth-and-btc-are-the-only-crypto-money Bankless level up guide https://bankless.substack.com/p/bankless-level-up-guide Download Argent Wallet https://argent.link/bankless Set up your own ENS name https://bankless.substack.com/p/how-to-maximize-your-ens-domain Give Bankless 5 stars on iTunes ----- Subscribe to podcast on iTunes https://podcasts.apple.com/us/podcast/bankless/id1499409058 | Spotify https://open.spotify.com/show/41TNnXSv5ExcQSzEGLlGhy | YouTube https://www.youtube.com/c/bankless | RSS Feed http://podcast.banklesshq.com/ Leave a review on iTunes https://podcasts.apple.com/us/podcast/bankless/id1499409058 Share the episode with someone you know! ----- Don't stop at the podcast! Subscribe to the Bankless newsletter program http://bankless.substack.com/ Visit official Bankless website http://banklesshq.com/ for resources Follow Bankless on Twitter https://twitter.com/BanklessHQ | YouTube https://www.youtube.com/c/bankless Follow Ryan on Twitter https://twitter.com/ryansadams Follow David on Twitter https://twitter.com/TrustlessState

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

• 0:14Ryan Sean Adams?

  Welcome to Bankless, where we explore the frontier of internet money and internet finance. This is how to get started, how to get better, and how to front-run the opportunity. This is Ryan Sean Adams. I'm here with David Hoffman, and we are here to help you become more bankless. David, this is going to be an awesome episode. This is kind of the culmination of all of the groundwork that we've laid across the last seven episodes, because we're going to get into the actual practical tactics, the how-to-go-bankless today. So what are we going to cover, man?

• 0:48David Hoffman?

  Yeah, where all of our previous episodes were theory, this is applied banklessness. This is applied science. And so this is where the rubber meets the pavement. So we're going to talk about very specific things that you can do that make you a bankless person. And we're going to talk about why that is important, what that means for the individual, and then also very specific strategies that you can take. Crypto and especially Ethereum evolved very quickly, so we're going to do our best and make this a timeless episode. But there's always new things on Ethereum. There's always new money Legos. And so we're going to probably have some version of this episode, you know, over and over and over

• 1:32David Hoffman?

  again. But this is the first one. This is the big one. So I'm excited about it.

• 1:36Ryan Sean Adams?

  Absolutely. And it kind of tees up some, some other practical episodes, tactical episodes to come. I, you know, the next three episodes, we're actually going to talk about the three most important DeFi money protocols that we think bankless listeners should be aware of in their journey. And we're going to do a quick drive-by of some of those, those protocols. But this is going to be structured, we hope, in a way that helps you really embark on the journey in a way that makes sense. Because we're first going to start with the why, the goals. Then we're going to talk about making A weekly level up plan, a process to continue improving and becoming more bankless. We're going to talk about the things that you can do, actually implement.

• 2:19Ryan Sean Adams?

  And then we're going to talk about how you measure the outcomes. So really excited to have a practical episode today. But before we get into the practical, let's talk about a few big picture things that are going on. So one thing that I just became aware of, and when listeners hear this, we're recording a week before. So when listeners hear this, this will be the previous week. But it feels like the final boss has emerged again. And in crypto circles, when we talk about the final boss, we're usually talking about the government, a crackdown of some sorts, or murmurs of a crackdown. And this time it was a report that the, this ominously named Orwellian named Financial Stability Board, the FSB, it's a group of central bankers.

• 3:04Ryan Sean Adams?

  It's a report that they put out on tightening up the regulations of stablecoins like USD. And then maybe potentially prohibiting, those are their words, the decentralized ones, like possibly a DAI. Now, this is just a consultative report, of course. So it's a recommendation by central bank consultants to the central banks of the world. But it carries some weight. I mean, there are, there are the 20 G20 countries on the list that are advisors to this. These recommendations are going to be read by all of the central banking powers of the world. Bank of Japan, the Fed, of course, the Euro central banking system.

• 3:49Ryan Sean Adams?

  And this is a quote that, that I kind of picked out from one of their rules, recommendations about the governance of stablecoins. They recommend that central banks implement the ability to require an arrangement to be governed in a manner that facilitates effective regulation and supervision. Okay, so far, including by prohibiting fully decentralized systems. Prohibiting fully decentralized systems.

• 4:15Ryan Sean Adams?

  My translation of that is central bankers, at least this body, they want to roll their own centralized digital currency. They want to possibly prohibit other options, bankless options, decentralized options, so they can continue to control you and stay in power. Again, this is not necessarily being implemented. It's a recommendation, but it's definitely a disturbing possibility. I mean, how does that strike you, David? Like, what do we do if there's the final boss emerging again and there's some kind of a crackdown on the decentralized money systems that we're all using in our everyday lives?

• 4:59David Hoffman?

  There are some parts about this story that just stick out to me, mainly the name of this organization, the Financial Stability Board, which to me is pretty oxymoronic, as if you could have stability and finance together. You know, finance is a commitment to not having complete stability, right? Like, the way finance works is you commit to some sort of volatility. So like, the name itself just is oxymoronic. And then they follow through in that nature with prohibiting fully decentralized systems. Like, that's an oxymoronic statement. You also can't do that. And so I'm already skeptical

• 5:39David Hoffman?

  as to the people who are making these decisions on this board and how educated or informed they are about the advice they are giving. Now, when it comes to regulations, it's definitely, it's something we should all be remembering, that things like USDC, which we pin as, you know, totally centralized and permissioned, it's still far more free than any other alternative that we have found before crypto, right? So, I mean, Ryan, if maybe you can go to Coinbase and, you know, deposit your dollars and mint USDC and Circle and Coinbase know who you are because you've KYC'd, and so they know that

• 6:23David Hoffman?

  money. But then you can send me that USDC. And I don't necessarily have to have KYC'd with Coinbase or Circle or whoever. That is in stark contrast to something like PayPal, where you can't pay me through PayPal unless we are both KYC'd. And so this new structure is KYC at the fringes, but totally anonymity in the center. And that is probably one of the big issues that the FSB is concerned about. The lack of mapping on to the old system in terms of auditability, transparency and KYC information.

• 7:03Ryan Sean Adams?

  Yeah, it absolutely is. And you're right about the name. I mean, there's a lot you can get away with when you name your organization, the Financial Stability Board, and you talk about the threat of crypto-stable coins as a threat to the financial stability of the world. You know, governments tend to couch it in such a way so that they can get policies done that they want to get done, including surveillance policies like the ones you're talking about. The good news here is, of course, this is just a recommendation. So it's not something that's necessarily going to be rolled out. Of course, central bankers are going to keep it in the back of their mind.

• 7:45Ryan Sean Adams?

  And, you know, if they perceive crypto as a threat, they may pop it back up and roll it out in some way. But the good news is it's very difficult to take down these decentralized systems. They are structured in such a way that central bankers and central authorities cannot take them down without taking down the fabric of the Internet itself. That's certainly Bitcoin structure. That is also Ethereum structure. As long as there are individuals around the world who are independently running nodes, the network will continue to run. So I also think it's

• 8:28Ryan Sean Adams?

  You know, it's something that even though the government may want to take down crypto at some point in the future, if the final boss gets angry, they won't be able to, which is a nice property. And hopefully, what ends up happening is they throw up their hands and just let it be and think about how they can actually use it for some of their purposes and for the good of the world as governments have kind of adopted other open protocols like internet protocols, TCP IP, HTTP, that sort of thing. So that is the hope and that is upside. But it is something that we should keep in the back

• 9:10Ryan Sean Adams?

  of our minds, that the final boss could pop up and try to knock this thing down a peg or two at any point in time over the next decade. David, another thing that has kind of been on my mind, I was going to ask the blacklist community this week, but I'm curious your thoughts. What's something that you've changed your mind on in crypto?

• 9:29David Hoffman?

  Yeah, there's so many different things that my ideas have changed about. And that's kind of, it's kind of hard to say because there's never any one black and white moment where you have one opinion and then you have the other opinion. But over time, there's definitely been a trajectory of a change in thoughts. I definitely value proof of work more than I did previously. I definitely value a hard capped currency, or at least the potential of one like Bitcoin, in contrast to one that doesn't have a hard cap. Things like this, I've become more, more open to. As for one specific thing that I have very

• 10:11David Hoffman?

  vehemently swiveled on, changed my opinion on, is the nature of centralized assets inside of MakerDAO or permissioned assets in MakerDAO. I used to think that we should only have, you know, trustless, permissionless assets in MakerDAO. But I think I view MakerDAO now as a permissioned centralization risk filtering system. And so-

• 10:38David Hoffman?

  All of the assets that are inside of MakerDAO that are permissioned like, like, you know, tokenized real estate or, or USDC or, or bonds, anything that's going to be permissioned. I think MakerDAO, what we should view MakerDAO as is a, a risk filter for, you know, things like permissioned risk or centralization risk. And so that's okay to me.

• 10:59Ryan Sean Adams?

  Absolutely. Yeah, those, those are definitely, um, you know, good, good shifts in your mind. I think it's important that we as a bankless community, keep our minds open to new things that emerge and new evidence that emerges and don't become kind of close minded with the way that we are viewing these structures. Everybody in this space is constantly learning. It's really important to reevaluate assumptions, let new information in. And I think the best thing that folks can actually do to sort of test their assumptions and test their theses on things is to actually use these systems for themselves. A lot of crypto has been about speculation, you know, buying an asset

• 11:42Ryan Sean Adams?

  just because somebody tweets about it or a YouTuber told them so, or they think it's going, it's, it's gone up 30% in a, you know, a couple of days. So they think it's going to go up another 30%. Don't do that. Use the systems. That is the best way to be an informed investor in this space. If, you know, you haven't used it, like, why are you trusting someone else to tell you that it's such a great system? And that is definitely a focus of what we're doing in bankless, going on the, the journey is active, requires active participation. There are many other money verbs besides just hold. So go use those money verbs, use the systems that we're

• 12:22Ryan Sean Adams?

  talking about. That will make you a more informed investor and open your eyes to the possibilities here. So, uh, David, before we get in, man, we should talk about our sponsors. US listeners, I want to tell you about Rocket Dollar. Do you have a 401k or an IRA? Chances are it's jailed inside of your brokerage, inside of your Schwab account. You don't have good access to crypto. The crypto you do have access to. Charges a premium price. If you're buying ETH inside of a Schwab account, you're paying 5X the price of spot. Don't do that. It's a complete ripoff. You need to exit your crypto out of retirement account jail, out of brokerage jail.

• 13:02Ryan Sean Adams?

  Rocket Dollar can help you do that. So they can help you create what's called a self-directed IRA, self-directed 401K. They help you move the money from your brokerage to a designated account where you can actively invest in crypto assets like Ether and Bitcoin. Then you can also stake them in a tax-sheltered way. Break your retirement account out of jail. Use Rocket Dollar. Go to rocketdollar.com and grab the code BANKLIST to get $50 off a subscription to their service. RocketDollar.com with the code BANKLIST to get $50 off.

• 13:38David Hoffman?

  This episode is going to be all about financial independence using crypto tools on Ethereum. Go to zerion.io because a lot of the things that we're going to talk about in this episode, you can access from Zerion's interface. Zerion is the front page to the DeFi ecosystem. So all these different tools like Uniswap, ZeroX, Kyber, Compound, MakerDAO, they're all integrated into the Zerion front end. So instead of going to each and every individual DeFi protocol that we talk about on this podcast, instead, you can just go to Zerion. You can do all the different money verbs that Ryan talks about here.

• 14:21David Hoffman?

  You can hold your assets in your wallet and get a display of what you own inside of Zerion. But then you can also make choices like to lend or invest in Uniswap or Bancorp pools. You can lend out your DAI and Compound. You can go leverage with Fulcrum. All of the good DeFi applications on Ethereum, you can access inside of Zerion. So it's a really great bankless tool and it's going to be a really important component of strategies that we talk about in this episode. So check them out at zerion.io.

• 14:54Ryan Sean Adams?

  All right, guys, let's get to the goods. This is how to go bankless. This is the beginner's guide. This is the intermediate's guide. This also touches on some advanced concepts. But we want you to have a framework for approaching this. And I think it all starts with the why. It starts with defining why you're going bankless, why you're here, and then using that to create some goals. But let me ask you, David, why are you here? Why are you going bankless? Why are you into crypto, Ethereum, and Bitcoin?

• 15:27David Hoffman?

  I'm here in the crypto space for my independence. I believe that crypto offers me tools in order to become completely independent from the world around me. The way that, at least the US economy, and definitely the rest of the world to some extent as well, the way it's structured is to really, really take away your freedoms and your independence. So student debt, credit card debt, a mortgage, a car loan. Loans are a way, or debt is a way, to reduce your freedoms and reduce your independence. And banklessness and crypto economics are inherently debt-free phenomenons, right?

• 16:09David Hoffman?

  So like, if you have a vault with MakerDAO, it's fully collateralized. So even though you owe DAI, you're never in debt. And that kind of structure is found throughout crypto. And so crypto as a system is a very freeing system. Not only is it an anti-debt system, but it's just an internet-native system that owes no homage to any single nation, state, or economy. And so it's about being a sovereign individual. It's about being your own person. It's about personal finance and freedom. If you owe no money... If you owe no money to anyone else and if you hold your own assets in your own Ethereum

• 16:52David Hoffman?

  wallet rather than in a bank, you are a free person. And that is, it's a weight off of your chest. It's a weight off of your psyche. And this goes down to the heart of what it means to be alive, in my opinion. And so, you know, using these bankless tools, like Uniswap is this exchange, but it's this freedom tool. And so is Compound and so is Maker Dow. And all of these applications on Ethereum are freedom tools, where you get to opt out of whatever coercive system that you may find yourself in and use these bankless tools in order to, you know, claim your independence.

• 17:29Ryan Sean Adams?

  I mean, this is why our ancestors went off west. You know, on the East Coast, things were stagnant. There was already an upper, you know, class that sort of ruled things, but a group of individuals, in increasing numbers, decided that there was more opportunity for them out west. There was a gold rush going on. There was some payoff and there was this sense of adventure. And most importantly, there was this independence, this feeling of independence and freedom, the ability to kind of, you know, start from scratch with all sorts of new opportunities. There's also a lot of danger in going out west. You know, you ever play the game Oregon Trail where, you know, like people get dysentery and they break their legs and they die?

• 18:14Ryan Sean Adams?

  Going on the bankless journey is kind of like that, but the reward is freedom. It is independence. You know, there is another group, a personal finance group that I kind of identify with, and I know we have some of the bankless community who do as well. It's called FIRE. So you can look up FIRE, F-I-R-E. You know, there's subreddits about it and FIRE stands for Financially Independent, Retire Early. So the goal of FIRE is basically to break down those shackles. They recognize as well that if you're employed, you owe debt to somebody. If you have credit card debt or student debt, you are not a free individual.

• 18:57Ryan Sean Adams?

  So their objective is to pay off those debts as soon as possible. Create a little nest egg for themselves, be super savers, so have a long-term time horizon, and retire early. And their definition of retirement isn't going to like Florida and a golf course and you know, just doing nothing all day. It's actually getting the ability to do what they want, no longer being a wage slave. I think that's a reason that I'm in crypto. That's a reason that a lot of us are in crypto, for the upside, quite frankly, for this ability to achieve financial independence by seeing something that other people don't,

• 19:42Ryan Sean Adams?

  seeing this massive opportunity for returns, you know, being in a position to go out west and realize this opportunity.

• 19:51David Hoffman?

  And this is why staking on Ethereum excites me so much, because you know, I don't want to be a wage slave, but I will gladly provide my services for payment to Ethereum, because that doesn't make me a wage slave to Ethereum, right? Like, I still get a paycheck of source. I still get dividend payments. Staking is this alternative gig. It's this alternative job. And it's a very passive job, and all you have to do is provide your capital. But you get a paycheck for your services and your work towards Ethereum. And so as somebody that is looking for financial freedom, staking offers me an income source that is independent from any other employer or financial institution.

• 20:34Ryan Sean Adams?

  Absolutely. All right. So that's probably the first thing folks are looking for in terms of the why. The second thing is this, it's the ability to upgrade their skills. You know, I think of this a little bit like going bankless and learning these DeFi protocols, learning how to use an ETH address. It's obscure stuff. It's geek stuff, right? But it's a little bit like learning web design in 1997. Yeah, I was just a kid at the time, but you know, I picked up some skills. And some older guys I knew, they were getting jobs, you know, any kind of... Kind of job that they wanted, driving like nice cars and high salaries just because they knew some HTML.

• 21:19Ryan Sean Adams?

  And this was because there was this recognition that the entire world, all of the companies of the world, all of the projects of the world, all of the ideas of the world that would end up on the web. And there was a high skill set demand for people who knew the technology, knew how to build these websites, knew how to build this future. Going bankless is like learning web design in 1997. You're picking up all of these skills that will pay off, will be in high demand. If this crypto thing takes off in a big way, which we think it is, you're front running the opportunity in a way.

• 22:01Ryan Sean Adams?

  And by the way, it's incredibly engaging and interesting work while you're doing it. So it's mentally stimulating, stimulating and fascinating. At the same time, you're picking up skills that, you know, front run the, the job and career demand. So out of these two things, I think a lot of folks going bankless end up with, with two high level goals. Your goals might be different, your mileage might vary, but you know, the first goal is to really increase your crypto money. When we talk about crypto money, we're talking about ether and Bitcoin. We talked about that a bit in episode one. And then the second thing we're trying to do when we go bankless is get better at going bankless and becoming more bankless and leveling up on our skill set.

• 22:45Ryan Sean Adams?

  So those are the two goals. You might have sub goals under that, but you know, start with the why you're doing this. And then make sure you get some actionable, measurable goals out of those. Our goal, when we're talking about what we're trying to achieve in, in going bankless for the rest of this episode is increasing your crypto money and becoming more bankless. And in order to achieve that goal, you have to start with a process. You have to have some sort of weekly plan. This is almost like a workout regimen, right David?

• 23:16David Hoffman?

  Yeah, absolutely. Because this is not an easy thing. We're going to lay out a Potential path for people to go completely bankless and be independent. But that doesn't mean that that path is easy. Not like not trading, not leveraging, being responsible is it's it's not something to just scoff at. It's actually a hard skill and being consistent and doing following your plan every single day requires mental fortitude and and willpower. You know, there's going to be one day where you think that ether is about to moon. So you go Forex on DYDX and that's not bankless. That is not financial independence.

• 23:59David Hoffman?

  That is that is fun and games and that's a fun game to play. But when it comes to being self sovereign and financially independent, it takes responsibility and time. It takes it time and we're going to talk a lot about those subjects in this episode.

• 24:13Ryan Sean Adams?

  Yeah, absolutely. And for those of you don't know, DYDX is a place where you can like, you know, margin long. Some of your your assets like ETH. So it's basically you're betting your ETH. And if things don't go your way on the bet, then you end up losing it. So that's not something that is conducive to you to necessarily meeting your goals. You have to have discipline. You have to have a weekly plan and a process in order to meet those goals. And I think one of the things is that is most important. I you know, probably break them down into into two areas. The first is you set aside a portion of your wealth,

• 24:54Ryan Sean Adams?

  whether that wealth comes from a paycheck or whether you already have some investments. And you you put some skin in the game. You start buying crypto money assets. I'm not saying everything all at once. You of course have to allocate based on your your own personal position. But I think it's really important, you know, number one, to have some skin in the game. With that skin in the game, you'll start paying more in attention to this entire landscape. And you know, you'll have the crypto money assets that you need to actually leverage. This new financial system the way you should. So, you know, what's, when, when people ask, you know,

• 25:36Ryan Sean Adams?

  what should I buy and when to buy? Of course, none of this is, is financial advice. But, um, you know, it's, it's really important to buy assets that you think will accrue monetary status and monetary value. We think those assets are probably going to end up being Ether and Bitcoin. There might be others that come along, but you don't have to worry about them right now. And the second thing that you want to do is dollar cost average in. So if you have a paycheck, it's things like taking a portion of that paycheck and buying a little bit of crypto each and every week, each and every paycheck, each and every month, however you split it up.

• 26:17Ryan Sean Adams?

  You know, don't go all in at once. Uh, don't be reckless. Don't be crazy. Uh, there's, there's a lot of risk here, of course, but having an increasing amount of skin in the game, I think, is, uh, is, is super important. The second thing you need to do is start leveling up each week. So tap into the resources, um, that will improve your game. Um, learn about new protocols. Start using these crypto systems. We're going to get into that, I think, for the remainder of the episode, but you gotta have a plan going into this thing that, you know, is weekly and where you're constantly continuously leveling up.

• 26:57Ryan Sean Adams?

  Now, the world of crypto is a bit different than the world of fiat bank accounts because there's a storage aspect to crypto that's required. So when you buy your crypto on an exchange like Coinbase, um, they actually own it and you, you don't actually own the crypto yourself. You don't have physical possession. What you have is an IOU for the crypto until you take it off that exchange and start storing your own keys. So we should talk about that because I think that's an important, you know, um, area for folks who are going bankless to do some research on, which is how to custody their crypto assets, how to store their private keys.

• 27:42Ryan Sean Adams?

  You know, should they keep it on an exchange or should they, should they research something like a hardware wallet? What do you think, David?

• 27:50David Hoffman?

  Yeah, it's really compelling to keep your money on exchange because that's just what we are used to. But we have to remember that these exchanges are just crypto banks. They are just a new form of a banking institution. And you know, every new year brings these crypto banks closer to the traditional banks that we that we know, like Coinbase is now offering savings, a savings rate on your USDC that you hold with them. They offer like a 1.25% or something. And so you're not bankless until you pull your assets off of the exchange and you hold them yourself. This whole crypto revolution stands on the shoulders of seizure resistant assets.

• 28:32David Hoffman?

  When you hold Bitcoin in a private key, or you hold Ether in your private key, no one can take it away from you unless they figure out where your private key is. And your private key is something relatively easy to hide and control, which means that no one can take your crypto. And so if you hold it on an exchange, that is not true. And so, learning how to safely and responsibly store your crypto is really important for becoming bankless. It is the foundation of what it means to be bankless. And there's a number of different ways to store your crypto.

• 29:07Ryan Sean Adams?

  And we should be clear, we don't want you or expect you to do this overnight. So when someone asks, you know, how do I get into crypto? How do I start? Where I start my keys? And the answer is always buy crypto from an exchange, dollar cost average into, you know, money assets like Ether, like Bitcoin, and keep it on the exchange for a while, right? But don't stop there. Then level up. So you understand how to actually take custody of your crypto, you know? So level one is keeping it on an exchange, but don't stop at level one. Get to level two, where you are actually custoding your own crypto and, you know, maintaining your private key. And do it a little bit at a time. Make sure you know what

• 29:52Ryan Sean Adams?

  you're doing before you you trust your self custody process and holding your own private keys. Because the thing with with crypto is, of course, it's like, it's a bearer asset. So it's like cash, or it's like gold. If you lose it, It's gone forever. You can't get it back. So it's important that you level up sufficiently before you decide to self custody. But if you're going bankless, if you're on the journey, you've got to make that leap at some point. You know, and where should they leap? Where should folk, where would you direct folks if they're starting with an exchange? But they want to start self custing their assets and becoming more bankless. Where should they go, David?

• 30:33David Hoffman?

  It really depends on if you want to hold your assets on your computer or on your phone. And if you want to hold it on your phone, I highly recommend Argent Wallet. It's the wallet that I use on my phone. Argent has done just a fantastic job in making the UI and UX really easy to understand and follow through. And it gets the added benefit of being a non custodial wallet. And so Coinbase has their own wallet that you can use on your phone, but that's still a custodial wallet. Argent Wallet is non custodial, which means you are the only person holding your funds, which means you are being bankless.

• 31:14David Hoffman?

  And you get access to some of the cool financial services that we're going to talk about later in this episode, such as Uniswap, Compound and Maker, and it's all in the Argent Wallet. And it's a very easy, it's the wallet when I tell my friends and talk to my friends about crypto. It's the wallet I tell them to download. And it has relatively complex things that you can still do. So it's a great hybrid beginner and advanced wallet. If you want to store your funds on your computer, MetaMask is my personal wallet of choice. It's a little browser extension that you can put inside of Chrome or Brave or Safari. And it is the main way for interacting in DeFi.

• 31:54David Hoffman?

  I would say this is an intermediate level way of storing your crypto funds, but still relatively easy. And it is, if you are interested in doing financial activity on Ethereum with all these DeFi protocols, then the MetaMask might be the wallet for you.

• 32:09Ryan Sean Adams?

  Wallets like Argent, wallets like Metamask, they are great for doing things in the bankless money system, particularly with DeFi protocols. However, there might be a portion of your crypto and a larger portion of your crypto assets that you want to put in cold storage. So this is not attached to the internet at all. It's kind of the crypto assets that you're planning to buy and hold for the long run, and you want them as secure as possible. So this is a bit less like a wallet, if we're using it in old world paradigm, and more like a vault that you keep in a deep, dark place in the basement, right?

• 32:53Ryan Sean Adams?

  And to do that, to put assets in cold storage, you might want to take a look at hardware wallets. So there are two primary hardware wallets, crypto wallets on the market. There are a lot of others, but the main ones that are used are the Ledger crypto wallet and the Trezor crypto wallet. These plug into your computer, a bit like USB drives, but they stay detached from the internet and provide a more secure way to store your crypto for the long run. Now, before you get to that, that might be more advanced level. So we've moved from beginner to intermediate to advanced. Before you get to the hardware wallet phase, make sure you understand how to back up your hardware wallets

• 33:37Ryan Sean Adams?

  and how to restore those hardware wallets in the event that one gets lost. And also make sure that people in your life, somebody in your life, has the ability to access those wallets if something were to happen to you in some way. So there's more thought that needs to go into cold storage, but that would be another way to store your crypto assets.

• 34:04David Hoffman?

  Yeah, so a common way to do this is you just store your private keys in a fireproof safe. Maybe you store that safe in your house. Maybe you store that safe in, you know, your family's house somewhere else. But you can also do both. And so you can store your private keys both in your house and your family's house. So you have redundancy. So if your house burns down, then then you can still have access to your private keys. If you want to take this even one step further, and this is for people that are storing a lot of value, instead of having one cold storage wallet, what you can do is you can make what is called a multi SIG, a multi signature wallet. And that is simply doing

• 34:49David Hoffman?

  the same thing twice, where you have these two sets of private keys. And when you combine them, that actually opens up a different wallet. And so this one wallet is actually controlled by two private keys, or you could even have that number go, you know, as high as you want, three private keys, four private keys. It's up to you, your matter of security. And this is the most advanced level. This is the 401 level of security. It's it's really cumbersome. It's not for daily transactions. That would be really annoying. This is really for your crypto that you want to set and forget and just have in deep, dark, cold storage. And so the way that this works is that when you make a multi SIG wallet, you are creating, creating a private key and then splitting it into two different

• 35:34David Hoffman?

  private keys. And then only when you combine those private keys, are you able to access the funds that are on a multi SIG wallet. Gnosis is an Ethereum team that is working that has produced the big multi SIG wallet that everyone uses. And so that that would be for those bank listeners that are looking for that level of security. That is where I would recommend to go to set up your multi SIG. It's not what you recommend to your mom, but it is what you do if you want to have the maximum level of security for your funds.

• 36:07Ryan Sean Adams?

  Absolutely. And, you know, we will do entire episodes on each of these topics. As you said, this is kind of a drive by. Of all of the things that you want to start thinking about and putting on your your list of of level ups. All right, so we've talked about buying crypto, setting up an exchange, getting your first DeFi wallet, storing your keys. Now, once somebody is there, let's say they have a Argent and MetaMask all set up. What should they do first?

• 36:37David Hoffman?

  So the way I have my personal wallet set up is I have my cold storage wallet, and then I have my mobile Argent wallet. And, you know, sometimes I spend all my money in my mobile wallet. I pay people for dinner. I do whatever with it. And so I need to top that up. And so I'll, I'll open up my cold storage wallet, and I'll send some ETH to my Argent wallet. And I'll send that back and forth. And so that is something that you should really get comfortable with doing. You should have your spending wallet, your cash wallet, and then you should have your cold storage wallet, and you should be comfortable sending money between those two things. And not just Ether, but also tokens. And so Ether is something that you you will need in both wallets, because you need Ether to send tokens.

• 37:21David Hoffman?

  But you should also have some DAI in there, too, at least just a little bit, even if it's just a couple pennies. Just because it's good to to know how to send a token, and how that is different from Ether. And so I would say the first thing that you should do is you should put some ETH in both wallets, and you should put some DAI in both wallets, and send it back and forth, just so you get really comfortable with your system.

• 37:41Ryan Sean Adams?

  Yeah, absolutely. That's a great place to start. And then you want, once folks get more advanced, where can they go from there?

• 37:48David Hoffman?

  If you want to get a little bit more crazy, you can open up your first vault. And so this is starting to use Ethereum's financial applications, the the the tools that you need to go bankless. And so what a vault is, is a part of the Maker Dow system, where you deposit Ether. So you deposit $100 worth of Ether, and then you can mint new DAI based off of the value of that collateral. And you can, you can mint up to 66% of the value of your Ether as new DAI. Don't go all the way up to that number. That's very risky. You need to stay a little bit lower than that. And so It's a it's a nice way to learn how these crypto systems work and it's it's definitely one of these magical moments. I think we all remember the first moment where we minted

• 38:34David Hoffman?

  die from our ether and we were like, wow, I just made money. The the ability to mint new money based off of your collateral, based off of your ether is is a magical moment. And the fact that you can then send that die around and pay people for things from the money that you just minted is pretty crazy.

• 38:54Ryan Sean Adams?

  I mean, it was a magic moment for me. It's basically what you're doing is you're using some collateral, so some existing value, in this case, ETH, and you are creating a loan on top of that. You know, when I've done loans in the past, like a mortgage, for instance, right, that requires tons of paperwork, right, lots of different signatures, lots of different, you know, banking relationship, all of these things. What you're doing when you're opening a vault is you're actually creating a loan through a protocol, no bank required. I mean, that's why we call this whole thing bankless, is because we are replacing these very basic functions like paying, like borrowing, like lending, like earning interest with protocols

• 39:36Ryan Sean Adams?

  themselves. So you can do that, if I'm not mistaken, right inside of a wallet like Argent, right, David? Or you can also do that with the MetaMask extension in your browser.

• 39:46David Hoffman?

  Yeah, that's totally right. And that's the cool thing about Ethereum, because and specifically composability on Ethereum, is your wallet is always one transaction away from being able to access services like this. Now, not all wallets support all financial activity, but opening a vault is pretty core fundamental feature of Ethereum. And so it's typically integrated in most every wallet. And so, yeah, you, I have my own vault through MetaMask, but I also have one through Argent Wallet. And so you can choose what you do, how you see fit. Again, the more value you use, you might want to shy away from MetaMask

• 40:26David Hoffman?

  or or Argent Wallet, just because it's a little bit hairy to have your funds on your phone. But it's always up Your personal preference.

• 40:36Ryan Sean Adams?

  One thing we should mention is, of course, each of these protocols has a risk. So when we're talking about borrowing from a protocol or even using something like DAI. If you're just getting into this and don't fully understand the risks of what you're doing, just play with small amounts, just test out the open financial system before you kind of, start a $10,000 Maker Vault and start living off of that. Make sure that you know what you're getting into before going into it. So just start with test amounts if you don't know what the risks are and you don't fully know what you're doing. But another thing that folks can start doing, we've talked about paying, we've talked about borrowing,

• 41:17Ryan Sean Adams?

  is they can actually start to lend out their assets and earn interest. So this is almost like a money market savings account automated by protocol. One of the coolest things I think you can do with your DAI, for instance, or with your ETH, is to lend it to a protocol like Compound. Can you talk about Compound and maybe the DAI savings rate, which is sort of related to that?

• 41:43David Hoffman?

  Starting with the DAI savings rate, when you mint DAI, you are pulling out a loan. And there is an interest payments that you are committing to when you do this. And these interest payments can fluctuate up and down based off of market dynamics. Now, who do you pay that interest rate to? You pay it to the MakerDAO protocol and people that are not minting DAI, but they still own DAI, so they bought DAI off the secondary market rather than minted it. They can come and submit it to the DAI savings rate. And people that have minted DAI and owe DAI are paying fees to people that have bought that DAI and are supplying it into the DSR. And so if you, there's two sides, the two sides of the same coin.

• 42:27David Hoffman?

  It's people that owe DAI and people that have lent DAI to the MakerDAO protocol. And so if you are interested in generating a savings account, the DSR is something for you. And that's what Compound does as well. These are two different systems that offer you different. Returns on your die. Now with the DSR, you're lending your die to the protocol. And so this is what the MakerDAO team has called the trust-free rate. You aren't actually trusting anyone with your die. No one is on the other side borrowing that die. You're sticking it in a protocol and Compound, somebody else is borrowing that die. So there is a little bit more risk there. There is another human at the end of that system.

• 43:10David Hoffman?

  Compound offers you a higher interest rate to compensate for that increased risk. But there is risk at the end of the day. And so it's really up to you what you want. If you, and really the parameters to pay attention to is how much you are doing, how much you are lending. If you're lending just a couple hundred die, a couple thousand die, you probably do not have that much more risk in Compound than the DSR. But the big risk for Compound is for high liquidity individuals, people that need a lot of economic bandwidth, for example. If you are lending, you know, perhaps up to a million dollars through Compound, you might not be able to withdraw it all at once. It might take time to withdraw it.

• 43:53David Hoffman?

  And that's simply just because of the way that Compound is structured.

• 43:58Ryan Sean Adams?

  And one thing to realize about these interest rates, whether it's in the die savings rate or in Compound, is that they are variable interest rates. So they fluctuate over time. I think lending die to the die savings rate is a fairly close equivalent to a savings account, say, in your bank, because there's very little risk involved beyond the risk of holding die, which, which does of course have some risk, as David was saying. But these rates fluctuate. Right now, as we're recording, the rates are actually very low. I think the die savings rate is, you know, 0%. Compound might be a little bit higher. And that's because when ETH is in a bearish cycle, so when ETH price is dropping,

• 44:41Ryan Sean Adams?

  then these savings rates tend to drop too. We'll talk about this in future episodes. So, you know, don't worry about the mechanics of it for now. But when ETH is bullish, the die savings rate tends to go up. And on average, over the past, you know, many months, I think six months or so, since die savings rate has been active, it's actually yielded quite a bit of a higher interest rate. So 5%, 10%, that might be the more normal range, but it can vary on a week to week basis, just like a savings account does. So we've talked about earning and lending now.

• 45:21Ryan Sean Adams?

  What about investing, David? There are some cool protocols in the bankless world for that. What should we talk about here?

• 45:30David Hoffman?

  Yeah, so there's different ways you can deploy your capital on Ethereum to generate a return. And at the end of the day, this conversation will always start with staking, but right now, staking is not here yet. And so if you are trying to get a return off of your Ether and off of your die, there are different things that you can do. A very common one is you can add liquidity to the Uniswap ETH/die exchange. And what that means is that you take an equal amounts of value of die and ETH. So like if Ether is $100 and you have 10 Ether, so you have $1,000 of Ether, then you submit all of that Ether

• 46:11David Hoffman?

  plus 1,000 die into the Uniswap pool. So equal amounts of value. And what you are doing is you are allowing traders to come and buy your ETH and sell you die or vice versa. They take one and take one out and put in the other, an equal amount of the other. And then you get a little bit of exchange fee on top of that, which is 0.3%. And so this has been a very common way for people who want exposure to Ether, but also want to have a decent cash balance to get a return on both. And so in times of high volatility, high trading, there's the returns inside of Uniswap are pretty, pretty great.

• 46:50David Hoffman?

  And so it's a way for like, if Ether goes, you know, up to from $100 to $150 to $80 to $100, you will actually have more money than what you started with because you were collecting the exchange fees all along the way.

• 47:05Ryan Sean Adams?

  Yeah, and I definitely think Uniswap itself being a liquidity provider on it deserves an entire episode and we're going to get to that in the next couple of weeks. So stay tuned for that, guys. You know, another way you can invest, and this is quite popular in the bankless community, is to buy something called a set. So a set is, think of it like a, an ETF, say, in your, in your brokerage. It is a kind of composable asset that you can purchase, which underneath itself is a collection of other assets that are robo-traded according to some algorithm. So you can buy sets that, you know, will split your 100%

• 47:47Ryan Sean Adams?

  of your investment across 50% Ether and 50% Bitcoin, or you could buy a set that will trade based on various indicators. It's a way to essentially remove the emotion from your crypto trades and to accumulate more crypto money without actively trading yourself. And the, the performance on some of these sets has been really good over the past couple of years relative to just holding Bitcoin or holding ETH. So that's something to, to check out too, and probably deserves its own episode as well.

• 48:21David Hoffman?

  If you go to tokensets.com/explore, you can see this awesome matrix of all the different sets that you can, can purchase and then their performance across time. So it's pretty transparent. So you get a pretty nice report as to what sets have done well and what sets haven't. Now, there's, you know, every single day is its own little data point and that can change as time goes on. So don't just go to the set website and buy the set that has done the best previously because that does not mean that it's therefore going to do good moving forward. You have to understand that just being the leader now doesn't make that set therefore the leader tomorrow.

• 49:00Ryan Sean Adams?

  You know, something else that's fun. David, have you ever used the pull-together no-loss lottery?

• 49:05David Hoffman?

  Oh yeah, I love it. I think it's great. I always keep a few pull-together tokens in my wallet just in case I strike gold.

• 49:12Ryan Sean Adams?

  Yeah, I love it because if all All of the stuff that we've talked about sounds a bit too advanced or a bit too complicated for you at this point. I mean, Pool Together is is perfect for newbies and a perfect way to test a DeFi protocol without doing very much more than having a MetaMask account. So it's it's basically a way for you to deposit some crypto, so Ether or Dye, and be entered into a lottery system. The the tickets are drawn once a week, I believe. You can you can not you don't lose your funds, so it's a no loss lottery. So basically, they generate the prize money

• 49:53Ryan Sean Adams?

  based on the interest that they receive from investing these the the proceeds into various DeFi protocols. And so you don't lose your balance, but you have an opportunity to win some prize on a weekly basis. And in just a few clicks, you can deposit into Pool Together and then get set up to have an opportunity to win some money on a weekly basis. It's a really cool way to to start on DeFi protocols.

• 50:21David Hoffman?

  And it also just is a great example as to what crypto economics can do. A no loss lottery is very well supported by the way that crypto works. And so it's it's I think it's something that will onboard a lot of people that don't really call themselves crypto people because they are interested in a lottery that they can win, but they don't can't lose. And so I think that's a pretty interesting feature of the crypto ecosystem.

• 50:49Ryan Sean Adams?

  Yes, and when you graduate to intermediate level as well, one of the things on your list should be to get a ENS name. David, can you tell us what an ENS name is?

• 51:00David Hoffman?

  Yeah, so if you go to google.com, you're actually going to an IP address and there's a bunch of numbers and it's very hard to remember what those numbers are. But everyone remembers google.com. And so that's the DNS system, the domain name system. ENS is like DNS but for Ethereum. And so I have an Ethereum address. It's a long string of letters. I don't know what those letters are. But if you send me ETH or DAI to davidhoffman.eth, it'll go to that address. And that is something that everyone should set up because it just makes life so much more easy. It's if, if Ryan, I can just tell you, hey, you know, send me some DAI at davidhoffman.eth. And I just told you that right now. There's no way I would be able to communicate my Ethereum address.

• 51:44David Hoffman?

  I would have to copy and paste it and send it to you. And ENS is a really crucial piece of infrastructure that allows, you know, just Ethereum to become more usable. And it's, it's something that everyone can do. It's a permissionless system. And I highly recommend it to, to everyone. If you download Argent Wallet, you will get a free ENS name. You do have to pay for these things because, you know, there's a limited number of names. So we have to, the, the ENS team does have to charge to make sure that one person doesn't just use all of them. And if you download Argent, you'll get your, your own Argent ENS name. So my Argent ENS name is trustlessstate.argent.xyz.

• 52:27David Hoffman?

  And, and so you can get one of those there as well.

• 52:30Ryan Sean Adams?

  Yeah, it's basically like, so you know, your, your traditional bank account has an account number. This is a, a human readable name for your account number. It converts into a, a domain name. And you know, last episode, David, we were talking about all these scarcity mini games that exist in the Ethereum economy. Well, these ENS names, all of them end with a dot ETH. There are a scarce number of human readable names that are, that exist that are out there. It's very similar to domain names, like, you know, there's a scarce number of, of dot coms. So if you believe in, in Ethereum and you believe in the future, you want to snap up some of the good ones, particularly, you know, maybe your name or other short names that might be desirable in the future. Because there is a scarce, limited amount of ENS names to go around.

• 53:16Ryan Sean Adams?

  And if this turn, this thing turns into the internet, everybody's going to want one. Every company, every project, everybody's going to want an ENS name of some sort in order to name their bank account in this bankless money system. I snagged, I was fortunate enough to snag RSA.eth, which is my initial, which are my initials. So I was really excited about that. And as long as I pay the renewal fee, you know, you, you have access to it forever.

• 53:43David Hoffman?

  Yeah, I was really close to buying david.eth, but it was 13 ETH and I couldn't part with that amount of ETH. I couldn't do it. So somebody else has david.eth.

• 53:53Ryan Sean Adams?

  So while we're talking about money verbs in DeFi protocols, here's one you absolutely have to check out. This is a lending and borrowing protocol called Aave. What does it do? You can put dye into it. You can put ETH into it. It will take your dye, it will take your ETH, and it will transform that into an interest-bearing asset. This is a great way to level up in the bankless money system. You can also borrow from it. We were talking about borrowing from various protocols at a variable rate. But this allows you to, Aave allows you to borrow from it at a fixed rate. So you know exactly what you're going to pay from one day to the next and one month to the next. Developers, you've got to check out their flash loan protocols.

• 54:38Ryan Sean Adams?

  Groups like DeFi Saver have integrated these into their protocols, into their applications, and created a lot of value. Go to Aave.com and deposit crypto to start earning or borrowing. That's A-A-V-E dot com. Try it out.

• 54:55David Hoffman?

  On your bankless journey, you might find that your bankless account is storing more value than your bank account. But you still need to buy things at the grocery store. You still need to go out on Friday nights. And if all your money is in the crypto world, well, you're ahead of the times, but you still need to live your life. And that's where Monolith can help you out. The Monolith DeFi Card is a way to keep your funds in the bankless universe while still being able to buy things in the real world. The Monolith Visa Card is accepted wherever Visa is, which is like the whole world. And it lets you use your dye as it's supposed to be, as money, as a way to pay for things.

• 55:37David Hoffman?

  So go to monolith.xyz and check out their DeFi card. Check out their rates. The DeFi card is a smart contract wallet, which is something that we definitely have to get into as to what that is on bankless. But it's a really cool way to protect your funds and still be able to use them. So go to monolith.xyz and get your DeFi card today.

• 55:59Ryan Sean Adams?

  All right, so we've hit on a lot of things that people can start doing. Inside of the bankless money system, a lot of these money verbs, there's still so much to talk about. We haven't talked about how to preserve privacy. We haven't talked about how to do some of your favorite activities like buying margin on D Y D X, or getting a crypto Visa card, or doing all of this in a tax sheltered account. But stay tuned, bankless listeners. We will have episodes on each of these topics in the coming future. Maybe just to tie things out, let's talk about the last element of the bankless plan, the bankless journey, which is measuring the outcomes. So we talked about the two goals, which is increasing your crypto money and becoming more bankless. But how do you

• 56:44Ryan Sean Adams?

  measure those things? I think the crypto money goal is pretty simple. It's are you increasing your ETH-denominated wealth or your Bitcoin-denominated wealth every single month? Not your fiat-denominated wealth, because that will be very volatile, and that will go up and down.

• 57:01David Hoffman?

  Because money printer just went burr.

• 57:03Ryan Sean Adams?

  Exactly. So what's more important in the bankless lens on the world is that your alternative bankless money is going up in their denominations, not your fiat money. And this applies, of course, if you're like us and you are thinking about the system for the long run, for the three-year time horizon, for the five-year time horizon, for the 10-year time horizon. This is not advice for people who are trading on crypto narratives. This is advice for the long-term believers in this system. You've got to increase your crypto money, and that requires increasing your ETH-denominated and Bitcoin-denominated wealth. The second thing you need to do is check in and to see if every week you've

• 57:47Ryan Sean Adams?

  become more bankless than the last week. Have you learned a new skill? Do you have a new money verb that you can now do in this bankless money system? We actually have a level up guide that we've published on bankless that I'll include in the show notes. Those are some things you can take a look at to see how you're progressing, which new skills you've picked up.

• 58:08David Hoffman?

  A really good way to test your bankless knowledge is to try and explain it to a friend. Not all friends or family members are going to care about crypto. So that's a little bit of your own challenge that you'll have to figure out. But you really know something when you can answer your friends' questions. And you can do that in a way that satisfies them, that satisfies their knowledge. And so grab a bankless buddy, bring somebody along, do this with a friend. Friends don't let friends go about this alone. So find your nearest, most tech savvy friend, introduce them to bankless, get them an argent wallet, send them some dye, send them some ether, and then talk about why this is important.

• 58:50David Hoffman?

  Talk about why it's important to have and own ether and bitcoin right after money printer address went brr. Talk about fairness, talk about being your own sovereign individual and you know, grab a crypto buddy.

• 59:03Ryan Sean Adams?

  Absolutely. We level up as a community. That's the best way to go about doing it. So just to summarize, if you want to go bankless, you got to start with the why, you got to set some goals. You have to have a weekly plan. So create a process for this. You need to start doing things. That is important. This is not just about holding. This is actually about using the DeFi money system as it is developing. And you want to measure those outcomes as well. So let's talk about actions. It's really just to set up those goals and implement a plan, then plug into the resources that are available. We've got a list of articles that we can include in the show notes, that we will include in the show notes, talking about the bankless money portfolio, what that looks like, talking about how to dollar cost average into crypto.

• 59:48Ryan Sean Adams?

  The bankless level up guide will be included there as well. And then you want to create your weekly routine. We hope that includes subscribing to this podcast, subscribing to the bankless newsletter program, getting into a routine of learning about this new landscape and leveling up. Next three episodes, we're going to dive deeper on a few things. David, you want to give us a taste?

• 1:00:12David Hoffman?

  Yeah, so a lot of the DeFi protocols that we talked in this episode, we're going to give a whole entire episode to, and that's just because crypto economics is an endless rabbit hole for each and every protocol. And so in the next three episodes, we are going to bring on the experts for every single DeFi protocol, MakerDAO, Uniswap, Compound, the big three that we have today, and every other DeFi protocol that comes into the bankless world, we're going to bring on an expert to talk about that DeFi protocol and to really go deep and really get a very basal level understanding of what these things are.

• 1:00:52Ryan Sean Adams?

  Basil, I like that you use that word, David. Nice word. Let's talk about, let's finish this out. Risks and disclaimers, guys. Everything we've talked about today, all of these money verbs are risky. Make sure you're only playing with test amounts if you're just starting out and don't understand these risks. Eth is risky, DeFi is risky. You could lose what you put in, but we're headed west, where opportunity awaits, where there's bandits along the way, opportunities to win your money and lose your money. This is the frontier. It's not for everybody, but this has been episode eight. We're glad you're with us. This has been How to Go Bankless.