Episode 55: MakerDAO and DeFi Today in Crypto with Mariano

Ben Lakoff, CFA
August 23, 2021
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Today’s interview is with Mariano of Maker Growth, with MakerDAO.

MakerDAO is one of the oldest and arguably most important protocols built on Ethereum. Where you are able to take your Digital Asset collateral and generate DAI – a stable coin. Don’t sell your crypto, take out a loan in a completely trustless manner – oh, ya it’s only a few % per year in interest too.

Enjoy this episode with Mariano on MakerDAO and DeFi.

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Show Notes

0:00:00   Welcome and context

0:02:27   What is your background and what is MakerDAO?

0:08:10   What’s the history of Maker?

0:13:45   What collateral options are on the roadmap for MakerDAO?

0:22:50   Is there a limit on how much DAI can be in circulation?

0:27:21   At what point do you see Maker posing a threat to the US economy?

0:32:14   What does the DeFi scene looks like at the moment?

0:38:35   Do CBDCs pose a risks to DAI?

0:42:00   What needs to happen to allow easier access to DeFi?

0:46:30   What’s the most interesting segment of DeFi at the moment?

0:50:15   What’s the most over hyped aspect in DeFi?

0:51:41   Where can people find out more about you?

Show Links


Maker on Twitter

Mariano on Twitter

Episode Transcript

Ben: [00:00:00] Welcome to the alt asset allocation podcast, exploring alternative investment opportunities available to the everyday investor. Here’s your host Ben Lakoff.

Hello and welcome to the alt asset allocation podcast. Today’s interview is with Mariano of maker growth. Make her down anchor dowel is one of the oldest and arguably most important protocols built on Ethereum.

It is. Pawn shop where you are able to take your digital asset collateral and generate di a stable coin. So you don’t have to sell your crypto. Instead, you can take out a loan using that as collateral in a completely decentralized trustless manner. Oh yeah. It’s only a few percent. Per year in interest to very, very well Mariano is from Buenos Aires and has a pretty unique view on how defy is growing and where, where it needs to go to get to the next level.

And I think you’re really going to enjoy it before we jump into the episode. I wanted to take a second to thank you for all of the great questions and feedback I’ve been getting. You guys really rock. If you’re getting some value from this, please drop me a line, send me a message or leave a review or give it a thumbs up on YouTube.

These things really help. All right. Enjoy this episode with Mariano on maker Dao and all things. Defy.

Mariano, excited to have you on. Thanks for coming on today.

Mariano: [00:01:24] Thank you very much for having me.

Ben: [00:01:26] Yeah. And your audio sounds great too, by the way. I didn’t say that, but all, we always appreciate a good audio,

Mariano: [00:01:31] so yeah.

Now audio, let’s say your file. Kinda. I had my, my equipment, my equipment, my microphone, my sound interface. I have pretty much.

Ben: [00:01:44] Well, you can tell, so it sounds great. So it’s always kind of intimidating when the guest has a better audio sounding than I do. We’ll have to put this one up to vote for the fans or something, but yeah, , I’m excited to have you on and maker Dao is one of those products that when I tell people.

Hey, you should see what’s happening in defy. I just say, go to maker, Dao, take out, like put your Ethan a vault, take out a loan. It’s a few clicks with a smart contract and it’s literally magic and it’s been around forever. It’s a dye is such an integral part of the system and we’ll. Into all of that. But for my audience who perhaps don’t know who you are or what maker is, can you briefly introduce yourself and then go a little bit into maker and what it is and why it’s important?

Mariano: [00:02:32] Yeah, sure. I’m Mariana I’ve been working on three years at the maker foundation doing let’s say head of marketing for Latin America, and we’ve been doing Not very, I would say, like, not only like I wouldn’t talk, but social, like a pretty hard job, right. To, to bring that into all of these countries that they really, really need a stable currency.

Right. And when maker does, it’s pretty simple. Right. And anything that is worse than the Mashiach lies. Pretty much, it acts as a, let’s say last as a pawn shop. Right. And let’s explain a bit what, it’s a fun shop and then we can make the analogy, right. Bounce shop, you go to the pawn shop and you say, you have a watch, right.

Then you say, okay, sir, I have this watch and I would like to point it. So then the owner of the store. Watch and says, okay, for me, this watch worth, I don’t know, a hundred dollars. Right. And you feel really good that this person will give you a hundred dollars and then you walk away with a hundred dollars to spend it on anything that you may need in the may one, whatever.

Right. And then when you give back to the, to the owner of the store, this $100 plus an interest, right. And you will get back to your, your watch, right? So that exact same operation or exact same concept is what maker. Right, but in a decentralized fashion. Right. So instead of giving a watch, you’re giving crypto collateral, let’s say for example, theory.

Right? So according to the total amount of material that you are giving to the, to the smart contract, that you are the positive into the smart contracts, you are able to take a loan. Right. So you can use your dime and whatever you need wherever you want. And then when you get back your diet, plus the stability fee, you are able to recover your, your crypto collateral.

That is like, I find this like the easiest way to explain what maker does. And I think that this is. A really powerful thing. Right. Because one of the things that I get a lot in, in, in past years says, why do I want, why do I need maker? Right. W w why, what is like the whole purpose of this? And for me, the answer is pretty simple, right.

Is saying. You are able to use the value of your assets. We don’t need it to sell those assets. Right? This is for me, it’s like pretty, it’s a pretty important concept, mostly because for where I come from, I come from Argentina and country that average in the last. 100 years, we have an 80% inflation. So we pretty much, yeah, we pretty much, we born with this thing.

Right. And we are craft by this thing. And one of them, the most common separations here in Argentina. This is almost like a cultural thing is when you get your salary at the beginning of the month, what you will be doing is you will purchase dollars, right. And to cover right. Then the value of the things that you are working to, to cover the time.

Let’s say that you’re going to not be in diluted. Right? So as soon as you are getting some expenses, Mont this running and busing buying you’re selling those orders right. In order to pay for those expenses. So we feel, think that it’s like a pretty much like a Alto credit, right? Like a self credit concept.

Right. Well, maker is that, I mean, yeah, you don’t have to sell your assets. You don’t have to sell your Ethereum. If you’re in love with film that say that to you. I dunno, you think that it’s going to go up in price. You don’t want to be exposed to the volatility of the market. Don’t sell it, give it and deposit it into them.

Into the smart contract and you’re able to get dye and use the, the value of that material for whatever you want

Ben: [00:06:47] of the pawn shop analogy. For me, in the U S I always use a home equity line of credit. You can access that value without selling your house and pull out a loan. Collateralized by by that asset.

But I mean, a pawn shops way better because presumably the types of assets that you can support and add as collateral will continue to expand. But I think that’s really powerful for a place like Argentina. I always kind of presumed that. That’s what happened. You get the local currencies, that peso, right.

That’s Argentine pesos. You get the pesos and then convert them instantly to dollars to something more stable. And perhaps like the rhetoric is that you’re converting to crypto or something, but if you convert it to crypto, then you can take a loan in dollars, which is much more stable. Although arguable.

How much inflation there actually is, but that’s a whole nother conversation less than the pay. That’s for sure. And not sell your crypto. Fascinating. Can you, can you talk briefly about, cause maker is one of the, one of the ones. DApps on Ethereum. Can you talk about a little bit about the history where you are now and where you guys are going in terms of collateral supported and, and whatever else is relevant?

Mariano: [00:08:03] Yes. I mean, right now to make a protocol is facing let’s say like a transition, right? In a way. As well, it’s publicly known that the maker foundation is going to this all right. Probably at the end of the year. I don’t, I don’t, I don’t know the exact date, but this is such a huge milestone right. In there.

Decentralization of the protocol we’ve been seeing the, I think it was two months ago that Mika foundation get back to the protocol, all the makers that they have in their wallets. Right. And I think it was. 800,000. Yeah. 84,000 MKR that the foundation gives back to the protocol and to, without basically, and, and yeah, I mean, the interesting thing about this is that right now, there are a lot of, let’s say task that the foundation was doing right.

That it needs to be taking, taken care of. The community. Right. And that is why we are seeing right now. And what is called core unit proposal. Right. In which people from the community can propose and to form a core unit, what is a core unit accordion? It’s, let’s say a group of people, right? That has a mandate and a, has a mission with the protocol.

Right? For example, I work for them growth, core unit, and our mandate is to, well, grow the makeup particle, right. What we are doing. Kind of like business development plus business to business marketing, right. To start bringing more collaterals, more partnerships, more implementations, and just start seeing growth in the protocol.

Right. So we have, for example, right now, also the smart contract core unit that obviously. We’ll do all the development of this smart contract for the protocol. Then we have also the article core unit and so on, right. 1 0 1 and another one that’s been interesting is a real world finance core unit. And yeah.

The idea behind this is that if you have an idea, if you want to contribute to the, to the protocol, if you want to contribute to the Dow, just make a proposal, talk to the community and you will, hopefully you will get to their own chamber vote and that vote is positive. And then talking holders and makers on the holders, things that this core unit may bring value to, to the Dao, they will vote you.

Right? And then you will start working right away. I think that. Something really, really cool. Because as you said, make it like one of the oldest project in, in Ethereum, and it’s pretty funny because there’s still a lot of conversations around in Reddit. I think they are around two south to Southern 15, I think where Ron Christensen that was the founder of make allow, one of the founders will make a last, was writing a post.

Where he lays on my vias about a dollar or something like that, and be delicate that moment. He was also in, in Reddit adding some value to a conversation, asking some questions, getting some feedback, and it was really cool how that turned into what it was at that time maker coin that I think if you look for maker coin on Google, you’ll ended up on a Bitcoin talk, Paul.

And that way a long, long time ago, every time a new coin was on, on any blockchain has their own Bitcoin dock boss. Right. And yeah, I mean, maker coin was there. It is there still, and you can see all the initial features that they can just have an in at that time, because for those who are listening, Meeker did not a nice CEO.

And that time, what the founders were doing well, they were, they were selling MKR through the forum as soon as they were needing to to hire some developers, to hire community, to hire like anyone. Right. So in that way is how the protocol, eh, start to get built. Right? I mean, it was very, very little by little, little by little and with pretty much all the participation from the committee.

Ben: [00:12:33] Yeah, that’s awesome. From community roots to community future which I really love. And like on the website it says as always planned to make her foundation began recently reached the milestone to perfectly begin dissolving in an effort to. Achieve a new degree of decentralization. I love it.

It literally started grassroots built up into a foundation to really like accelerate the mission and move a lot more quickly because a, a mob of community is very tough to manage which is why, it sounds like you’re doing these like core units, which are, you know, basically a Guild with a specific mandate, which makes a lot of sense.

Maker Dao is built on this concept of overcollateralization from my standpoint, at least. I give a thousand dollars worth of ether and I take a hundred dollars of loan and that’s totally fine because ether can go down to $150 before I’m at risk of losing this. And with that, it issues this a hundred dollars of dye, which is a stable coin.

That is the way that this thing works. Originally, it was only eith as collateral. And now you’ve added a number of different types of collateral. What what’s on the roadmap for adding cause you, you mentioned something about traditional finance potentially as collateral for that.

What can you share here? Presumably that somebody could find out the forums and figure out what’s going on obviously. But we have the inside guy. Share with us what you can about other types of collateral and vision roadmap going forward.

Mariano: [00:14:06] Yeah. Very interesting question. Because right now we are discussing in the community like the whole role of the collaterals, right?

Because there are some collaterals that are approved on the system. Not there are not being. You as much really, and having a collateral in the system, it’s kind of expensive, right? Because you have, you need to have a set of articles and let’s say an infrastructure and transactions and keepers, and like a lot of things in order to have a collateral running on the system.

So what we are discussing right now is saying, okay, where are those collateral? That first of all, that they are being used. Right. Eh, what are the collaterals that they are not yet approved, but may seem a very good options to, to vote in. Right. And in what form of yeah. Let’s say type of collaterals that are not correlated to, to the crypto world can be implemented into the system.

Right. So, yeah, we have a, at least of the Prague of them collaterals that are not being used right now in the system, but are implemented and we are actively contacting and the teams behind those coins, what they want to do. Right. Because I mean If they have the, the possibility to, to mean diet, they should be using, right.

It’s a pretty good form of credit. Right. And if there’s something that is not useful or, or some of the conditions are not well enough for them to meet diet, let’s talk to the community. What are. Conditions that you need right. To, to midnight. So that is one of the things that we are doing and maker growth.

We are actively trying to push the protocol and to contact different Entities or collaterals teams that have this and it’s called address approval and yeah, I mean, there’s right now it’s lovable is that we are seeing a lot of the discussion in the, in the forums and that brings so many different.

Points of view, right? Because you have one side people that say, no, we will need to have like the, all the collateral as possible in the system, because it will be the best form of risk diversification that we could have. Right. Then you will have other over a group of talking holder said, they say, no, we only should.

Collaterals that are being widely used. Just the ones that are really widely used. Other ones it’s not so much because we go in cost, blah, blah, blah. And one of the things that we were in discussing recently in is for me, one of the most interesting thing is for example, the possibility of institutions.

Waltz. Right. I think that we, this will run. We are seeing a lot of institutions coming in. Right. And they are really, they have a credit appetite. Way better than we can think. Right. And for them make it out could be a very, very good option, two financing themselves with their assets. Right. So we start also this conversation in the community where we are approaching different, really big players and institutions to see how they can use to make her protocol.

Right. But I mean, yes, it’s, it’s, it’s all like Like a long-term game, right. In which we will have to see what are the certain regulations that are played with different institutions that are from different countries. And then we have to bring that into the community, to this classroom. And then if there’s some form of modification that we’ll need to do and needs to pass through through the boaters right through, through the bolting face.

So yeah. Right now it’s one of the nicest things is to see community participation related to that. And, and I think that relate also related to that, the cool thing is that we sort of pass the 5 billion di circulation and that it means that the collateral choice that we are having in the last couple of years is the right one.

Right. Obviously, I think that those who are listening, they will say, Hey, well, you know, that USBC is pretty big part of the day collateral right now, blah, blah, blah. Yeah. But three months ago, 75% of the whole collaterally in diverse, pretty much inferior. And no one was complaining about. Right. So what I think is, or to, to explain here, One of the best things of maker would say is that he has disability.

Let’s say like a balloon, right. In which it can convert or it can move according to the market needs. Right? If the market needs says that you need to have more centralized collateral as could be USBC, that maker system can totally do that. Right. That’s what we are seeing right now. But if the market dynamics tells you that you need to have the centralized color.

As we saw in their previous months make a Canterbury, do it in a blink of an eye as we were speaking, like in, in the, in the past drop off of the price. Right. And I think that is one of the most important thing is the ability to move from centralized to decentralized from centralized to decentralized, according to them, to the market dynamics.

Right. And the cool thing about it is that maker is earning money. Right. For, for that operation is it’s not like all protocols that they are paying you in some form of token or w yeah, I mean, or an incentive to use that this is the other way around to make a protocol is getting paid for meaning that, and this is.

If you think for a moment, and this is how like out sustainable thing works, right? And then if you start to buy lap, all the features, like a really cool thing, a dynamic system that can behave exactly as the market needs and it’s earning money all through collaterals. Right. So I think. Many people sometimes say that yeah, maker is a kind of an old system is not so new related to Sam DS.

And I totally accept all those that take that feedback, but I will really. I will really tell them that. Yeah. I mean, just take Luke to the other particles, take a deep dive in what maker is doing, and you will see the difference in advantages, right?

Ben: [00:21:13] Yeah, 5 billion die and circulation congrats by the way.

That is just, just a tremendous milestone. And I mean, for the longest time, wasn’t there a cap of like a hundred million or so that’s

Mariano: [00:21:25] kind of, is that it. I mean for the

Ben: [00:21:27] longest time. And then, and that’s back when the DSR was like 15% or something, right. Like these were, these were different days that’s for sure.

And but you brought up great points about And for the listeners, you know, die as this censorship resistant, stable coin, that’s not it’s backed by this plethora of collaterals. It’s not like USBC, which is sensor wearable. But USBC is a collateral type. One of the many types you use to generate dies.

It gets a little hazy, but $5 billion of die is a lot at this point. I’m curious, is there a. At this point to how much dye can actually be generated by the major maker protocol.

Mariano: [00:22:10] Yeah. Each collateral has something called debt ceiling, right. As in which how much they can be mean to each type of collateral.

Right. So, yeah, right now, if varium and USBC are the ones with the biggest. Let’s say that ceiling. But at the end of the day, the debt ceiling and the stability fees are pretty much the levers that you have to control the risks. Of those collaterals. Right. And yeah. Then what that means is if you have a high stability fee and allow them sealing, it means that that collateral is like really risky, right.

Because maybe it’s not that liquid, maybe it has, I don’t know. Certain things that the risk profile team, that, that is a core unit. We have a core unit for, for risk.

Ben: [00:23:04] I might add all of are already important, but that one,

Mariano: [00:23:08] the other one is yeah. Specially important. That’s correct. And they set up all the parameters right.

For, for each collateral. And in that way you can. You can control like the, the whole system as if it was like different portfolios with different risks in it.

Ben: [00:23:27] But with all of these types of collateral, if the debt ceiling was reached with all of them at this point, like how many die would be in circulation?

Like double 10 billion.

Mariano: [00:23:37] I’m not so sure about it, because for example, right now we have a module called the PSMs price stability module. That is something that, that was a nice tool that in maker community implemented in order to ring. The two are hard. One, let’s say one daughter, because in the past, before the price stability module, they was always like holding between 1.01.

Yeah, two, three, right. And the community come up with a very cool idea, then they’d say, okay, the thing is. Dye is over $1, right. When there’s a lot of dire demand. Right. So why don’t we create some form of arbitrage mechanic with a smart contract that if people. Are seeing that diet is worth, let’s say 1.1, right.

You can send, for example, USB-C to this a smart contract, and this is my contract with mint tight. So you are having right now a token that it was more than the talking that you previously able to see that it was the USCC. Right? So in that way is why, for example, He was DC also grew a lot in our system as collateral because you send it the USB-C to the PSM.

And if the day is 1.01 and you send the USCC, you get the dye and then you sell the day and you’re making 1 cent per each dollar. Right. And the other way around and also works, right? I mean, it’s, for example, is 0.99. You can purchase die on the market and send it to the PSM and get one use that, you know, it’s real for $1, right?

So this is like a, let’s say an arbitrage, the smart contract that it really works to keep the bag really, really stable and also helps too. To grow the product, right? Because all the UCC that is in there, PSM it’s right now in the hands of the Dao, the team. And we are right now, in fact, we are discussing what to do with this USBC, right?

Do we have to invested, do we have to live it? There it’s like a interest in this case.

Ben: [00:26:03] That’s amazing. I’m curious with it’s something like maker, Dell, $5 billion die in circulation. Now that the foundation has been dissolved, you can add a tons of different collateral and increase each with its own debt ceiling.

The ability for this thing to meant die, stable coin backed by this plethora of assets. I mean, at what point does make her Dow and die. Pose a threat to the actual us dollar and the unite us financial system. And so is the goal here that you’re a completely decentralized organization at this point.

There’s nobody to kind of point the finger to, and it’s just integrated into so many things that we’re doing that it is what it is.

Mariano: [00:26:49] That’s a, that’s a very good question. I don’t know the answer, but. If I were someone that it’s, let’s say that I come to the earth right now, I’m an alien, right. I have to analyze all the things that are happening in the world.

And I see this case and what I want to say that is a threat to the us financial system, but it’s totally the other way. I think. Oh, we are helping the dollar to be taking as a unit of account all around the world. Right. I’ve been seeing many essays related to the locations in different parts of the world, Argentina, Venezuela other countries.

And, and and I been seen also, I mean A huge, I don’t know this follower, but I’ve been really interested in the dollar milkshake theory. I don’t know if you’re aware of that. It’s really interesting what they say. Right. And I think that we will face the legislation in the whole world. Right?

Not so much for the volar paper. Cash dollar that I station. But in terms of a unit of account, right? Probably, I mean, right now money is a form of language, right? I mean, if I have to talk with a Japanese guy that he doesn’t speak Spanish or English, We can’t communicate. Right. But let’s say that I say $100,000.

He knows pretty well what he can do with that money. And I know what I can do with that money. So we have a form of understanding with that thing. So I do believe that regardless of that, right? I mean, let’s say any stable coin that is back to the dollar is helping right now to this world. Right? Right.

Mostly because these technologies have all the listing LT doesn’t care if you win is in Australia and United States in Spain or inertia Dina. Right. And I’ve been, for example, working and be close to a lot of people in this past three years that they do. For example, a lot of international remittances, right.

And if you think about a four minute international remittances, it’s, it’s like an industry it’s like a vertical because you have a lot of intermediaries in the middle, a lot love them. But in the most simple form is just me sending money to you. And this technology enables that. Right? So if you think for a moment, the powerful thing of that.

Simple operation. Right? I do believe that die use the CEO or whatever, or the stable coin. It’s not posing a threat to the financial assistance. The other way around for me, it’s like really helping them because the demand for the dollar around the world. It’s still quite big, although it was printed a lot, a lot, a lot in this months is still big.

Right. This is too big. And then I think that in that way, it’s it helps them have it with that.

Ben: [00:30:30] Yeah. That’s, that’s definitely an interesting take for sure. I’m curious the. Okay. You’ve had tremendous growth over these last call it a year. Presumably a lot of this has been driven by defy summer last year.

It suddenly clicked to people that you don’t have to sell your ether or whatever type of collateral. You can take a low or a low interest loan and then do something with that money. Whether it be spend or invest in something else I think for my audience let’s ordain. And for me let’s take a step back now that we understand maker where you’re going, where, what you’re focused on and how important it is.

Let’s talk about the defy landscape overall. Like this is being recorded in July of 2021. What is the defy landscape look like right now?

Mariano: [00:31:21] Well, defy for me. Well, it’s not, you know, there’s one of the most exciting things ever for me, but yeah, I mean, we are seeing right now a huge growth of USB-C as the stable coin for the, for the defy world and being well, I still remember.

We have this dye centric era of the fight when we really started, let’s say, was he at the beginning of 2018? When you were able to take a loan of that at that moment, it was called CDP instead of vault because well,

Ben: [00:32:04] CDPs positions, volts is way

Mariano: [00:32:07] easier. That’s correct. This is still,

Ben: [00:32:10] I could never remember which one’s, which, so I told somebody the other day to take out a CDP and they were like, On there, like I’m on Oasis.

I don’t see the CTP crap. All this has changed.

Mariano: [00:32:22] I’m all. I’m all. Yeah. Yeah. It was called CDP at the time, but yeah, I mean, it, it grows from diet to UCC and all these forums. Of different stable coins that we have now from the ones that are algorithmic that are really dangerous. In my opinion, eh, from the ones that are total experiments, I saw the other day one it’s like under collateralized.

Stable anything. And yeah,

Ben: [00:32:54] I just had Sam come to crypto Mondays. It was the Titan thing. The literate, well, it didn’t go to zero, but it went to point to is there’s there’s there’s there’s there’s just a one. Yeah.

Mariano: [00:33:04] Yeah. It’s brutal. It’s brutal that I do think that any form of experiments in the defy world has value, right.

Because at least we are saying, okay, Not the way that we should take right. If it fails. So yeah, I mean, what I see in that if I will, right now, I, although hacks and explodes and those things are often horrible, it makes the system a bit more anti-fragile. Right. And I think that it’s interesting because the way, and the fast pace of development that we have in this, in this industry, I haven’t seen anything like that before in my life.

Right. The other day I was talking with a friend and he was telling me about like the traditional markets and that kind of things, right. In ISA to get more of the traditional market. This is no why. And we’ve been discussing, I mean, for example, if you think for a moment, right. Traditional market operates.

From Monday to Friday at most, right. Let’s say eight to 10 or maybe 12 hours a day, the most. And you have defy that operates 24 7 365. Right? So let’s, let’s start thinking from first principles here. Okay. So if you take the traditional market and you see that the tests are software development, Each week it’s, let’s say that each week is any duration and improvement, right?

So we have one week from Monday to Friday, then you have to wait 48 hours. Then we have another iteration from Monday to Friday and so on and so on and so on. But if you take the fight, it’s something that never stops, never stops, never stops, never stops. And each week I think that. I did S I think it was something like each week, the fight it’s having 140 more hours of operations and iterations and improvement that the traditional market is.

Right. So again, if you think that from the first principle you say, yeah, I mean, at the end of the day, defined at some point, will. Traditional markets. So the way I think is like, let’s say like traditional markets are like, like silos, different information liquidity. And if I hold it out, like punch a hole in each one of these silos, and they’re really little by little, all the liquidity are starting to ode to these pool of defy.

Right. So, yeah. I mean, it’s kind of crazy. I don’t know, in which time. Or, I don’t know if, if they’re 55 will be bigger than traditional Microsoft. I don’t know, but certainly we are facing right now. A very interesting, very interesting time. Right. And which we will have to see how institutions will adapt to this, how regulators.

We led up to this because according to the, let’s say the last year that I’ve been telling him, but with this tradition, so relaters, they really want to be in this, in this industry in defy. Right. But you know, they, they move much more slower than then the retail can move. Right. But yeah, I mean, very, very interesting times are nice ahead.

Ben: [00:36:48] Oh indeed. And I think these, this experimentation and this boom bust cycle and this, all of these things are very, very important and you kind of like shake it out and like the good ones fall to the bottom and we pick up those and we do the same thing and shake it out. And you end up so far. Away from like where you started, but I think there’s this, this mentality.

Yeah. The 24 7 365, like is terrible for all of our sleep scores. That’s for sure. But that’s what I think this like underdog dog mentality, this shared prosperity. If we, if we succeed in the shared misery, when, you know, eat the price goes to zero, all of these things, like I’ll also add so much fodder to this file, this fire It as well.

You talked a bit about you mentioned under collateralized stable coins, which could be the holy grail, but something I also forgot to mention or ask you about were CBD seas and how those fit into this whole picture as a potential risk to die in crypto. Do they work together as this? I’d be curious to hear your thoughts on CBD CS.

Mariano: [00:37:56] Well, yeah, I mean, CVD. Yes. I think that they could be it could have a deeper political impact than an economic one, because I mean, this is a difficult thing because we don’t know. How are they going to be right? Or what are the rails of this central bank? Digital currency? I mean, are they going to be managed only by that?

Are people going to be able to hold and transact central bondage currencies. We still don’t have like all these specifications related to that. Because if you think for a moment, if, if retail of the average person is able to hold in Transat central bank, digital currency, commercial banks don’t have much thing to do.

Operations or whatever, because that sends people can have an account directly with the central bank. Right. So we’ll still have to, we need to see all the specifications that are central bank, digital currency, but either thing, as I said, that it’s a moral. Political weapon rather than economical one.

I haven’t seen, for example, in, in, in Argentina, a lot of, not of different agreements between different central banks from other countries. Argentina is saying, Hey, you know, we are giving this amount of money in which you can only spend with us and you give you an, you need to give us this X amount of natural resources.

Right? So let’s think for a moment, the same thing, but instead of money with a central bank, digital currency, it’s much easier. It’s much easier to do that. Right. So I think that. Yeah, for me, the, the, the impact it’s much more political than economical one, but once we see like the whole specification of the central bank, digital currency, we should start to get a sense of the economical impact.

Ben: [00:40:07] Yeah, well, it’s coming. at some point, what’s, it’s a tale. We’ll see. It definitely is going to shake things up. That’s for sure. We talked a bit about defy, like where it is what’s happening, why it’s interesting, but you talked a bit about talking to a number of institutions. They really want to get involved, but they haven’t, or they’re, they’re dipping their toes in perhaps What needs to happen to get more people, let you know, I hate to say mainstream adoption, but easier access to defy.

And what’s going on right now

Mariano: [00:40:41] for institutions. Yeah. Yeah. This shows how this thing, most of all, related to KYC that is like their first concern and anti money laundering. Right. And I totally agree with them and that’s sometime. It’s pretty difficult to KYC as smart contract. Right? So let’s say for example, that we have an institution that wants to take care or they along with their assets, right.

They need to sign a bill saying who is going to give them the day, but it’s no one because it’s the smart contract. Right? So that is one of the difficult things. The second one is the times that the. Accustomed to have for their operations, right. In defy. It’s pretty much everything in real time. Right?

So for example, we’ve been talking with our institution and we were explaining how and make a dial works and saying that you have, for example, if you’re positioning their scene liquidation phase, do you have one hour to recollect, realize your boat right. And. That is a feature that really, that works really well, really, really well, you know, in our system.

Right? And they say, no, well, for our, for us, one hour is very little dime. We need at least 24 hours, because if we need to re collateral as our position, it means that we have to sign papers that we have to call people. We have to do a lot of things. We are, we are not going to make it on time. Right. So I think that at least in my eyes, that is like the, the, the difficult thing for them or or I will say like the challenge for them, try to, to understand the, the time.

And in defy, right. And the fights, everything everything’s real time, mostly, right. At least at a, at a base of 14 seconds block in inferior. Right. But I think that they are starting to discover how they can improve their internal process. While staying compliant with all the relations and they are starting to try some of the things related to, to the framing.

We are seeing a lot of companies right now that are giving, let’s say loans with assets. You can give them BDC or if human, they will own any going that you wanted. That that is like a form of bald. Right. But it’s not on chain. It’s something that you’re saying a wheel you will send, you have to centralize centrally.

That’s correct.

Ben: [00:43:26] You send me something and I’ll give you a loan on that, right?

Mariano: [00:43:29] That’s correct. That’s correct. Centralized. Right? So you have to put trust on them. And now that we are talking about trust, one of the things that they really, really want it. Understand, and they don’t know how is that their whole life they were operating under credit score things.

Right. I mean, they see you being you as a person or as institution, according to your credit score. Right. And in the fight, we don’t have credit score. Right. We don’t, we don’t have that kind of things. We have collaterals. I mean the whole credit score is collateral. If you have collateral. Yeah. Credit score.

Right. And they still need to understand more of it that, right, because there’s a low, there are some projects related to credit score. Aye. Aye. For me, it’s like pretty difficult to have one single entity you’re in credit score for the defy world, because it will have way too much power if that happens.

Ben: [00:44:36] Yeah, that makes sense. But I’m curious. As somebody who is plugged in with defy and everything of maker’s diet, all of these things, what’s, what’s the most interesting segment within defy right now. And why for you?

Mariano: [00:44:51] Well, for me, I think that what we are going to see in terms of governance, politics in Dallas, It will be really, really, really interesting.

And what do I mean with this? I mean, looking on some dolls, right. Start to see how discussions are taking place, where are the conflicts inside of thous? And I’ve seen very interesting behaviors, right? So for example, sock puppet accounts in the forums that they say things. I would say like the original owner, having some reputation can say, right.

They, eh, they can have also different identities in, in forums and where each identity may be. One two or X amount of persons that represents like a political side of the protocol. So yeah, I’m starting to see these kind of things that all the moderators on different Dow firms are getting a bit crazy because at the end of the day, you cannot stop.

For example, sock, puppet account. Route. Right. And they bring a lot of hits into the discussion and they are saying things that maybe other members of the Dow that are well-known inside out, they can say. So it’s starting to, to, to, to convert in, in a really interesting discussion in which we are seeing right now, like the woman’s of politics.

And all the financial things that we are saying, but also in politics and discussions. And, and I think that is one of the most interesting thing, because it’s a much less explore side of things and we need bigger dowels, better Dallas to start seeing more of those weird behaviors inside the forums that I think.

We will have a lot of that in the future.

Ben: [00:47:05] Fast moving. I mean, if anybody has caught that from this conversation, it’s very fast moving. I think that’s part of the like intimate intimidation factor is like, you know, you pay attention, then you look away for a little bit and you come back and everything seems to have changed.

Mariano: [00:47:21] Yeah. And for example, how, how did this in mind A chat room in which you may form like a consortium of different token holders that only those who have more than let’s say, I don’t know, 45 X and can enter. And you sign the transaction checks that you have 45 X doggin and you are able to enter and to form this secret political faction inside the.

This is where we’re going, right.

Ben: [00:47:52] And the tools are there with collab, land and mitigate, like, I mean, it’s, and you can have these like tiered structure that it’s like, if you have five tokens, you get into this one. If you have 10 tokens, plus this NFT, you can get into this life. It’s

Mariano: [00:48:08] exactly, exactly. And social.

If you think about it for a moment in the social life. Of that thing. It’s really, really interesting what it, what it can have in the future out of that. Right.

Ben: [00:48:24] Okay. That is the most interesting, what is the most over-hyped spot within  that you look at it and you’re just like this, this is not, not as interesting as people think that it is.

Mariano: [00:48:36] I think that is interesting, but it’s really over-hyped for me right now. Our NFT. For me, an FTC is really, really interesting, but I think that we reach like an exertion point right now in the weeds. If you go to open C or rival, anyone is maintaining any carbon, call it in

Ben: [00:49:00] FTS. You should, you should specify art and

tokens and nonrefundable tokens. We are, we are. Vastly under where we should

Mariano: [00:49:13] be. Yes, that’s correct. Are the nifty, I think the yard, the NSDs at some point for me at this right now, it’s way, way over here. And I mean, I have a lot of art NFTs I’m in and I fall in on that. Right. But yeah, for, for the state of the market by now, I think that we have an association.

Ben: [00:49:39] Yeah. Makes sense. Awesome. Marianna, this was, this was fascinating. I think what you guys are doing at maker and everything, I just massive fan of the project. So really, really appreciate you coming on and taking the time to go through these things for my listeners that want to find out more, where can they find out more about you or make her growth?

Where do you wanna.

Mariano: [00:50:00] Yeah, you can search us on Twitter at maker growth to have the latest info about the maker protocol and what we are doing or, and my tutor profile at Mariani better.

Ben: [00:50:14] And I’ll link both of those, but really appreciate it, Mariano. Thanks so much for coming on.

Mariano: [00:50:19] Thanks Ben.

Ben: [00:50:20] There you have it.

Thank you for listening. I really appreciate you. Show notes, transcript links, and more can be found on our [email protected]. If you’d be so kind, please share this with anyone you think might be interested or get some value from this conversation. If you have any questions or comments, please reach out.

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Happy investing

Ben Lakoff is an entrepreneur and finance professional. He has developed strong global finance experience through 10 years of international assignments in the US, Brazil, Afghanistan, Southeast Asia, Czech Republic and through the award of his Chartered Financial Analyst (CFA) certification.