SOTN #12: Positioning! w/ Mariano Conti (yEARN deep dive, ETH Golden Age, ETH P/E, Sushi!)

Summary

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Bankless SOTN #12: Positioning! w/ Mariano Conti

Main Topics: yEARN Deep Dive, ETH “Golden Age,” ETH P/E, Sushi
Date: September 2, 2020
Host(s): Ryan Sean Adams & David Hoffman
Guest: Mariano Conti (Former Maker Foundation, now "Simple Farmer")

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Overview

This episode of State of the Nation delves into the pivotal theme of "positioning" during a transformative period in DeFi. Ryan and David are joined by Mariano Conti, formerly Head of Oracles at Maker, to explore the explosive growth, cultural shifts, and technical innovations around Yearn Finance ("yEARN"), Ethereum, and the evolving landscape of decentralized finance protocols. The conversation serves as a masterclass in understanding Yearn’s architecture, community, and the macro context shaping DeFi opportunities—including yield hunting, composable ecosystems, and the incentives driving the next wave of crypto finance.

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Key Discussion Points & Insights

1. The State of the DeFi Nation: “Positioning”

• Theme: Many in crypto (founders, builders, investors) are repositioning both careers and capital, anticipating an extended DeFi bull market.
• Quote ([03:54]):

  “We are positioning and that's why we brought on Mariano Conti ... There's been a ton of seed investments being thrown around ... people are repositioning themselves in order to prepare for what seems to be a coming bull market.” — David

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2. What Makes yEARN/Wyvern Unique?

• Yearn as the DeFi Money Robot:
  • A protocol that automates yield farming and optimizes returns for depositors.
  • “Since day one, [yEARN] generates money for users ... The WI FI token has an immaculate conception story not seen since the days of Bitcoin.” — Mariano ([16:03])
  • Andre Cronje as a legendary solo builder, now joined by an increasingly decentralized community.
• Immaculate Conception/Meme Energy:
  • Yearn’s launch embraced full decentralization and fair distribution—fueling both economic alignment and strong social memes.
  • The community’s role—“The Immaculate Conception was the biggest community birthing story ever.” — David ([19:09])
• Price Impact Story:
  • YFI’s meteoric price rise (from ~$3 to $40,000 in weeks) is an indicator of both product-market fit and meme-driven momentum.
  • “We went from $3 to $3,000, a 1,000% gain ... then from $3,000 to over, you know, over 30K.” — Ryan ([17:43])
• Governance & Community Stewardship:
  • Yearn is now far bigger than Andre—new strategies, protocols, and features are continuously emerging via broad community participation.

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3. How Yearn “Vaults” Work: The yETH Vault (Triforce of DeFi)

• How the yETH Vault Works:
  • Users deposit ETH, which is collateralized in MakerDAO to mint DAI.
  • DAI is then deposited in Curve (yCRV), which is further deployed into yield strategies.
  • This process compounds yields while retaining ETH exposure.
• The DeFi Triforce (ETH - MakerDAO - YFI):
  • “...it's Eth, Mkr, WI Fi and that is the collateral, the protocol, the money robot. It's probably the best three way symbiosis I've ever seen in Defi.” — Mariano ([25:39])
• Market and Protocol Effects:
  • The vault strengthens ETH as a collateral asset, supports DAI’s peg, and amplifies Yearn’s value accrual.
  • “This is going to drive the price up ... get it locked up into defi a lot more … It's going to generate millions, if not tens or hundreds of millions of new Dai.” — Mariano ([24:27])
• Vault Safety Mechanisms:
  • Maintains 200% collateralization to avoid liquidation.
  • Integrated with Maker oracles for price feeds and incentivizes keepers to rebalance.
  • “I call it unliquidatable ... but people are incentivized not to let it happen.” — Mariano ([29:16])
• Fees, Gas Optimization, and User Incentives:
  • Pooling users cuts gas costs.
  • Incentivizes users to write new vault strategies—creators earn a percentage of profits.
  • “Every time somebody uses ... the Wyeth vault, they will get 5% for being the writer of the strategy.” — Mariano ([38:00])

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4. Expanding Yearn’s Reach: New Integrations & Governance

• Aave Integration:
  • YFI token can now be used as collateral on AAVE, expanding its utility and “farming premium.”
  • “You can borrow against [YFI], and you don't have to sell it. You can borrow against it ... I'm borrowing against my wifi to farm sushi.” — Mariano ([42:08])
• Sushiswap & Yield Farming Craze:
  • YFI/WiFI’s role as a farming asset and the rise of “vampire” protocols like Sushi.
• DAO Treasury, Voting Rewards, and Incentives:
  • Governance participants are rewarded—treasury overflows ($500k+) are paid out to stakers who vote.
  • “You can get the rewards, but you can only withdraw them if you vote ... you have to lock up your WI fi for three days.” — Mariano ([46:23])
• Yearn Smart Contract Insurance:
  • Yearn launched a UI for simplified DeFi insurance using Nexus Mutual on the backend.
  • “It didn't get the reception that it should have ... but I know that it's still revolutionary.” — Mariano ([49:00])

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5. Macro Context: Careers, Seed Investments, and the “DeFi Golden Age”

• Wave of Builders Going Full-Time DeFi:
  • Guests and hosts noted the exodus from “Web2” and prior jobs toward DeFi protocol building and investing.
  • “You can just go on Twitter and like every time there's a new yield farm, like somebody quits their job.” — Ryan ([59:25])
• Silicon Valley Analogy:
  • Current moment likened to the birth of Silicon Valley—builders and capital recycling through cycles to create new world-class products.
  • “That's how this place becomes like the capital Silicon Valley, the programmable money Silicon Valley ... which is super exciting to me.” — Ryan ([60:41])
• Bull Market Thesis & Network Effects:
  • Bull market believed to be “long and drawn out,” driven by network effects, fair launches, and composable experimentation.
  • “I think this is the golden age of Ethereum, the golden age of defi.” — David ([62:05])

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6. Price to Earnings (P/E) Ratio & ETH Valuation

• Comparing ETH’s P/E to Tech Stocks:
  • ETH’s P/E ratio (transaction fee-based) is below most tech stocks.
  • “The PE ratio for ETH is $38. So that's 2% of Zoom. Right. So this is the next global money system ... and it's valued at 2% [P/E] of a video conferencing app.” — Ryan ([75:17])
• Triple Point Asset Thesis:
  • ETH’s value is multi-faceted: store of value, commodity for gas, and productive capital (staking).
  • “It is absolutely insane to value ETH just as a capital asset ... You need to value it as a monetary asset, as economic bandwidth.” — Ryan ([78:32])
• Protocols Outpacing Bitcoin in Fee Revenue:
  • ETH, Uniswap, and Balancer surpassing Bitcoin in weekly revenues—signaling Ethereum’s growing dominance as protocol-of-protocols.

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7. Uniswap, Sushi, & the Free Market Protocol Wars

• Uniswap Outpaces Coinbase Trading Volume:
  • “Uniswap’s volume surpassed coinbase and it's $426 million.” — Ryan ([66:14])
• Fair Launch, Forks, & Composable Communities:
  • SushiSwap, Yam, and other “fork and fair launch” projects are seen as positive experimentation, with ultimate market selection by communities.
  • “Every single protocol on Ethereum, there's incentives baked in to try and fork and fair launch it ... And I think that's also going to be good.” — David ([70:48])
• Protocol Sync Thesis:
  • Not “maximalism,” but protocols competing at the base layer with the best communities and incentives winning and composability rising.

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Notable Quotes & Memorable Moments

• “The WI FI token has an immaculate conception story not seen since the days of Bitcoin. A Chad founder itest in Prod Android [Andre] ... it's been incredible. It has changed so many people's lives in a month, a month and a half.”
  — Mariano Conti ([16:03])

• “Every time somebody uses ... the Wyeth vault, they will get 5% for being the writer of the strategy. And that is ... incredible. I've never seen a better alignment of incentives, truly.”
  — Mariano Conti ([38:00])

• “This is probably the best three way symbiosis I've ever seen in Defi.... [ETH, Maker, yEarn].”
  — Mariano Conti ([25:39])

• “I think this is the golden age of Ethereum, the golden age of defi ... I think that this is going to be a bull market for the ages.”
  — David ([62:05])

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Important Timestamps

• 02:48 – 04:33: State of the Nation: Positioning theme
• 11:38 – 16:03: Mariano on yEARN’s uniqueness and “immaculate conception” origins
• 17:43 – 18:10: YFI price action and community impact
• 24:27 – 26:43: yETH Vault, DeFi Triforce, and protocol effects
• 29:16: yETH Vault collateralization and liquidation mechanics
• 38:00 – 40:10: Writer incentives for yEarn vault strategies
• 41:34 – 42:21: Using YFI as collateral on Aave, and new farming strategies
• 46:23: Governance incentives for voting on Yearn
• 49:00: Yearn launches insurance powered by Nexus Mutual
• 59:25 – 61:02: Career shifts to DeFi and industry-wide implications
• 75:17 – 79:57: ETH Price-to-Earnings, triple point asset thesis

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Podcast Tone & Style

The hosts and guest maintain a highly enthusiastic, slightly irreverent but deeply insightful style—mixing memes and humor with advanced DeFi analysis. They encourage experimentation, celebrate composable communities, and frequently tie technical innovation to larger social and economic trends.

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For Listeners New & Seasoned

• If you’re new to DeFi: This episode is a roadmap to why DeFi is the “Wild West” frontier—full of opportunity, community-driven product launches, and rapid innovation. Understand the big “why” behind the hype.
• If you’re a DeFi native: Dive deep into the weeds of the yEARN protocol mechanics, governance games, and the next-level incentive design pushing the ecosystem forward.

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Bottom Line:
yEARN isn’t just a protocol—it represents the cutting edge of compositional finance, incentive-aligned DAOs, and a seismic shift to on-chain, community-first innovation. ETH provides the bandwidth, Maker the economic machinery, and YFI the automated, incentivized spider at the heart of this new DeFi web. The DeFi “Golden Age” is here—and positioning matters.

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Transcript

[A]

All right, welcome everyone to another episode of State of the Nation. This is episode 12 and we have a fantastic show today. We're going to talk about wire and we're going to do a deep dive. We brought a special guest as well, Mariano Conti, who's going to help us with that deep dive. We're also going to touch some other topics such as what everyone is doing in the crypto space, everyone who's changing, leaving, moving to new opportunities. And we're going to hit a few. Let's try to drop some insights and action items. Just as a reminder, this stream's live on Tuesday mornings. We're doing it a little bit early today, but we usually stream at about 10am Eastern time. So you can pick up the stream, you can ask us questions live. We try to get some questions answered as well. We release this on YouTube and then we release it in audio format on the podcast feed as well. I always start with this question to David and then we'll get to some quick announcements and get to the rest of the show. But David, what is the state of the nation this week?

[B]

My friend, the state of the nation is positioning. We are positioning and that's why we brought on Mario Nakanti, who will be here in a quick second. But a lot of cool things have happened. A bunch of people have left their long standing careers to go off and do new ventures in the space. There's been a ton of seed investments being thrown around into different projects that are just now getting started. There's a lot of things, things that people are repositioning themselves in order to prepare for what seems to be a coming bull market, which is everyone's talking about it. And because everyone's talking about it, it therefore exists. And so people are positioning themselves.

[A]

I feel like they're not only positioning themselves from a career perspective, but they're also positioning their capital, which is certainly something that you have to do in the bull run. You have to be in the, in the right place at, at the right time. You have to start early. That's the number one rule for crypto investing is start early. Can't wait to talk about it. All right, a few quick announcements as well. David, we had an incredible podcast that released yesterday with Vance Spencer from Framework that's on track to be our most downloaded episode. It is just going absolutely crazy. David,

[B]

can.

[A]

Can you give folks who haven't gotten a chance to catch up just a quick taste of that episode?

[B]

Yeah, it's hard because it was so good. It was so dense. And I think every time we have a state of the nation Van Spencer ran through and Framework Ventures ran through that state like months ago. They positioned themselves a long time ago. And one of his lines that I really liked in that episode was that he has more conviction in his fingernail than most VC firms or hedge funds have in their whole entire body. And that has been absolutely true and it's absolutely paid off for him. Vance kind of gave us like the dissected recipe of like the bull Run so far and like where he thinks it's going. And it's really just an all encompassing story as to how he got here and to where. Like this liquidity, mining, yield, farming, vegetable, vegetable fields thing is how this came to be and like where it fits in the grand scheme of things, which is a really important conversation to understand. So you gotta listen to it like according to its download charts, like all of DEF listened to it. So if you haven't listened to it, like you're behind.

[A]

Yeah, definitely listen that episode. To catch up, we also launched the Merch store. So finally. So you can, you can hit [e-mail] HQ.com Pretty simple items right now. We're going to be expanding later, but you can at least buy one of these shirts that David and I are wearing that has been popularly demanded for quite some time. So pick one up. We also have hoodies also last thing, we have a great deal that we've been working on with Ledger. So if you don't have a hardware wallet or maybe you have a ledger, but you want to position yourself for the Bull run, you can go to the Ledger store. So Ledger is a hardware wallet and pick one up at 20% off. So just type in bankless, you get your 20% off. It's a week only deal. Just wanted to mention that because if you're in the market for ledgers, I am from time to time. 20% off is probably the best deal you're going to get. David, before we get into the episode, we should talk about our mainline sponsors. Do you want to start?

[B]

Yeah. Yeah. So one of the cool new products that I've been using that is also one of the companies that has received seed investment lately is Zapper. And Zapper is this awesome tool. So I don't know, Ryan, if you use blockfolio, but like every time I do anything on Uniswap, I have to go open up my blockfolio to make a change, right? And I'm a terrible bookkeeper, which means like my block folio is Always off. And so I've actually started to use Zapper now because Zapper is like, it's like a, it's like a portfolio aggregator but it does it with using actual truth of Ethereum. Like Blockfolio doesn't know what Ethereum had the data on Ethereum Zapper does. And so I go and I put in my multiple wallets into Zapper and it gives me a nice little report as to like where all my capital is, where all my assets are and like I don't know when the last time no one really has cash anymore. But like I put on a pair of pants the other day and I found $20. And like when I put in my wallet since Zapper I was like, oh, I still have that like liquidity.

[A]

You found money?

[B]

I found like in your digital pocket. My digital pockets? Yeah, because, because Zapper told me because it knows where my money is better than I do. So you can go to zapper.com and you can input your Ethereum wallets and it will tell you a nice report as to like where all your money is. And then also it has a cool little tax tool and the automated tax tools are getting really, really good which again, as a terrible bookkeeper is really useful for me. So check them out.

[A]

Dapper's the best. All right. Also want to talk about crypto.com? so super excited to have crypto.com as a sponsor. They are one of the best ways, one of the first steps in that you could do to bridge your fiat to crypto. We've talked about this so many times on Bankless where you have sort of your fiat money on one side and you have this crypto world on the other. First thing you need to do is bridge it across. Crypto.com has one of the most cost efficient ways to purchase crypto out there. You can buy it with the credit card and they waive the 3.5% fee for all crypto purchases. They also, and this is really cool, I've been using it for a while. They also have a Visa card. So it's a crypto enabled Visa card in the US it's actually hard to get a good crypto Visa card, particularly if you want to spend cool DeFi assets like ETH and DAI. I don't spend my ETH but I do spend my DAI. So if you want to spend DAI on a credit card, buy your Starbucks coffee with it. Crypto.com in the US is a great way to do that and they will give you 10% off things like food and groceries, gift cards, 20% back. It actually works. So I have a crypto.com card right now in my pocket and I use it from time to time to spend my dai in the real world. You can download the crypto.com app and get some of the offers that I mentioned, including the 10% off things like food and groceries until the end of December. Bankless listeners, you'll get $50 in their CRO token, which is like their loyalty token. If you sign up with the code Bankless, we'll include a link in the show notes. Awesome sponsors. This is going to be a fantastic episode. David. Let's bring in our special guest, Bankless Nation. Want to welcome Mariano Conti to the Bankless state of the nation. He's been on the podcast before. Mariano, how are you doing, sir?

[C]

Hey, how's it going? Thank you for having me. And thank you for doing this at an earlier time to accommodate.

[B]

Absolutely, Mariano.

[A]

You know, I'm east coast so it's like this is the perfect time for me. But David did wake up early, so, you know, cheers David. We'll see the sunrise behind him as we watch the sun.

[B]

I'm just going to get brighter and brighter as time goes on.

[A]

Well, we all get brighter when Mariano's around. Mariano. All right, so let's talk about. I almost introduced you as the Maker guy. I wanted to almost introduce you as the head of Oracles there for a second, but I refrained. So what is your official title now, sir? Are you Ambassador for Defi? Are you just a simple Yield farmer?

[B]

King Midas?

[A]

What's the title now?

[B]

King Midas.

[C]

Until yesterday I was still employed by the Maker foundation, but today it's either retired or Simple Farmer. So yeah, anyone else will do.

[A]

I think Simple Farmer is good because you know, retired is definitely not something you can do these days when you are farming. It's like all of the time you've got to be checking on what's going on in the farming space and keeping up with these protocols. David and I really wanted to talk about and share with the Bankless Nation a bit about the why Earn protocol, the Yearn protocol. So we had Andre on the podcast a couple of weeks ago. Folks can check out that episode and get kind of a download and intro to what WIREN is. And it's basically sort of like a robo yield optimizing protocol. Right? That's the quickest one sentence version of what it is. But keeping up with everything that Wyron is doing is almost like a full time job. David and I have joked about, like, we could just fork the bankless, like, media podcast everything we do and just have a Wyron Bankless version and have enough content to do a weekly podcast and to do a daily newsletter maybe like multiple times a day. So what we thought we would do is maybe just do a quick, I guess, brush up on things that are going on in Wyern just in the past, like, week or two maybe, since we talked to Andre and talk about five things. So talk about AAVE and Wyern, talk about insurance, talk a little bit about staking and wifi governance, talk about funding the dao, and then finally talk about something that I know is close to your heart, which is the wire and eth vault that is coming about soon. So does that sound good, Mariano?

[C]

Yeah, that sounds perfect.

[B]

I think the first topic is actually the topic of the multisig signers. Mario, can you start with the multisig signers?

[C]

Yes. And let me stress that that is right now the only thing that I am for the wire protocol there is a multisig. It is six out of nine, I believe, that controls the treasury of the Wym protoc. And I proposed myself when they were looking for new members just because I'm online pretty much most of the time. And they voted me in because I voted community for a while.

[B]

I voted for you.

[A]

And how did you guys vote? Did you vote with wifey tokens?

[B]

Absolutely. The one and only.

[C]

Yes.

[A]

Very good. Mm.

[B]

You voted for yourself. Of course you did.

[C]

I voted for myself and for a few others.

[B]

Nice. Nice.

[C]

This was. This was encouraged. I was told that I should vote for myself. And so, yeah, for the past few days, I've been a member of the multisig, but really, probably out of the nine people in the multisig, I am the one who. Who's done the least amount of work. Literally all I've done is sign a few transactions, look at a little bit of code, but that is pretty much all my engagement so far.

[B]

So why did that interest you in

[C]

the first place, just as a fan? Well, because Wyern yfoos the WI fi token, Andre, that is probably the most interesting things that have happened to Defi since Defi started. And it revitalized my love for this space and I felt like I needed to be close to it one way or another. And being a multisig signer and just following a telegram and having to click confirm on my ledger every once in a while felt like the least amount of work for the best benefit of Being closest to that.

[A]

So, Mariano, why. Why is Wyern so unique? Why did it kind of reignite your excitement about Defi all over again?

[C]

There are so many things. First off, the protocol itself generates money for users since day one. That is one of the main reasons it's useful since day one. Easy to use. The WI Fi token has an immaculate conception story not seen since the days of Bitcoin. A Chad founder itest in Prod Android figure, which let me say that is not the case anymore. He does test in production. He just deploys and gives us mainnet addresses to review. But there are so many people looking at the code now that it has become mostly a myth that he tests in prod. There's a lot of people looking at what he writes.

[B]

Yeah.

[C]

And yeah, just the fact that this story took everybody by surprise. Of course. The price of the WI Fi token, let's not forget that. It's been incredible. It has changed so many people's lives in a month, a month and a half.

[A]

So, yeah, can we talk about the price?

[C]

Among the things.

[A]

Can we talk about the price real quick? Just because that's kind of fun. David, do you remember when we had Darrell on the podcast?

[B]

Yeah. Do you remember the nation a month ago?

[A]

All right, a month ago, it was

[B]

roughly $3,000, give or take.

[A]

We're at the 3,000 mark then. And I remember commenting with Daryl, who's another multisig holder, I believe. Right. That. Wow, isn't this amazing? Like, we went from $3 to $3,000, a 1,000% gain. Isn't that incredible?

[B]

Like, that was already the story of the time. That was already the story. Yeah.

[A]

Okay, so a month ago and now here we are. Mariano, your comment about price. We hit close to 40k, right? Or did we hit 40k? Didn't click in a month? In another month, we went from 3,000 to over, you know, over 30K. Right. So, like, when is this thing stopping? What's the market cap right now? So the market cap is 708.

[B]

Oh, no, that's the trading volume.

[A]

Trading volume. So the market cap is over a billion. So it's a unicorn now. Like, was it the case that this thing was just undervalued, or are we getting into a full hype cycle now? Does anyone know?

[C]

I still think that it is seriously undervalued.

[B]

Wow.

[C]

This is a token that gives money to its holders. We're probably going to talk about it. But if you lock up your WI Fi token, you start earning money instantly.

[B]

So one of the big Themes that we came out of with Vance Spencer in the most recent podcast was that community is almost everything, right? Like you have start every single protocol lives on top of its community. And that's why I think the, the why Earn protocol is so strong in addition to like, what it actually is on a technical level. The. The Immaculate Conception was the biggest community birthing story ever. And like, and Mariano, you said like, you've been in into crypto before Ethereum was a thing. And so like you and Makerdao, you know, arguably kicked off what we know as Defi. Right. So no one has a better perspective as to like, what Defi and community is all about. And so when you tell me that like Yearn rekindled your love for Defi and I see like this, this massive, just community involvement and community governors of the protocol, stewards of the protocol, that's what gets really, gets me really excited. We've never really had a community rally around this protocol ever before. Ever.

[C]

Yeah, you're totally right. And there are probably many reasons for that. You know, you have the, you have the meme of the 30,000 supply. You have blue curvies all around, you know, pumping, doing memes, but also explaining, like out of the blue, starting to explain how everything works. Friendly community mixed with a bull market. I know that there are probably many things that went right by accident, but many more were products of hard work by the people involved.

[B]

Yeah, and that's another really fascinating subject is because Andre spun this thing out all by himself. But then if you go to the Yearn governance forums, you see so many proposals with so many strategies that there's no way that one single man could. Could ever do this anymore. So like, we are now well beyond Andre and, and the amount of just shipping of code coming out of this community is absolutely insane. And that's kind of like again, part of the fundamentals of this whole entire project. So I think that kind of turns us to the why Eth faults. Because as somebody who is straddling the world of Maker and the world of Yearn, I feel like no one is better suited to be able to comment about the why E fault. So. So Mariano, could you just kind of explain to us what the why E faults will do?

[C]

Do you want me to start with that one or should we save that one for last?

[B]

Do you. Do you have another one in mind?

[A]

Well, we could talk about. Let's talk about the Wyeth first. That sounds cool.

[C]

Let's do is live today. It is live right now. There is no ui, Let me tell you what it is. The most popular vault right now for the YM protocol is one where you deposit Y curve YCRV tokens and they earn you very high percent in APY. I believe it's around 100% a year. What is this token? So Curb Finance has, has a token that represents a liquidity pool of four different stablecoins. These are dai, usdc, USDT and True USD. And you can deposit any of these four and you get an LP token, a liquidity provider token called YCRV or ycrp. And then anybody who transacts in that pool between those stablecoins, you earn a fee. So that is the YCRB or YCRP token. The most popular Y vault. It's what was called the YY CRB or yusdc. What did you do? You put in that LP token in, you deposit that and it would try to farm, it would try to find you the best yield. And this is also where yield farming comes from. From you were already earning yield just from this LP token. And then this vault will find a way to earn you even more on top. It used to be it was farming yfi, which is the first clone of the WI FI token. Then for the past couple of weeks it's been farming CRV token from the curb DAO token. And it's all very interesting, but it's all using stablecoins, right? To go in, you need to have one of the four, this new vault, the Y eth vault, I call it the Triforce of Defi. What it does is it takes ether. Ether. I think we all agree in this group, ether is the perfect lateral in decentralized finance. It's the native token of ethereum. It is the one that everybody has or needs to have to transact. And yeah, it is the highest quality collateral. So what happens here is people with ether are going to be able to deposit into wire and vault. And behind the scenes what happens is this. The vault grabs your ether, it locks it up in the Makerdao protocol, it generates dai, it puts that DAI into curve, into this Y curve token and then it farms yield using the strategy that fits best or the one that is the highest performing. So you're earning in the end a lot of money on top of your ether without losing exposure to your ether. And this is, I call it the Triforce because it is good for ether, because it's gonna drive the price up. It's gonna, it's gonna get it locked up into defi a lot more. It's gonna be good for Maker Protocol because it's gonna drive the price, the peg down for dai. So it's going to get it back to one, it's going to generate millions, if not tens or hundreds of millions of new dai. Therefore the stability fee can be raised and MKR can be burned and the Maker Protocol can generate money. And of course it's going to be good for the WI Fi token because it is the money robot that is executing this whole strategy. So that's why I say it's Eth Nkr, WI Fi and that is the collateral, the protocol, the money robot. It's probably the best three way symbiosis I've ever seen in Defi.

[B]

Absolutely. And so DAI has actually had like a pretty hard time getting that peg. Right. And for the last like six months it's been pennies over a dollar, which is a meaningful amount. Oh, you're drinking more, mate. I'm so jealous. So, and part of that is just because like there's been so much demand for crypto dollars inside of Defi. Right. And so what you're saying is that because now Ether is now involved in the Yearn protocol via the Y eth vaults which comes from Maker, there's now like a, a super strong vehicle for leveraging your Ether collateral and inside of Defi using Maker as a bridge into yearn. Right. And so you're expecting that people that are interested in receiving Ether denominated returns will submit their Ether to the yearn, which will then send it to Makerdao and then Makerdao will draw dai. And so then you owe a debt and then that DAI submitted to yearn and then the yearn goes in farms in order to pay back that debt. And so as a mental model, this is like getting a mortgage to purchase a house and then you're putting a renter in that house and you're using that rent money to pay off the mortgage. Right. And so you add some time in here and then you have a whole entire house. Right. So that's kind of like the mental model here. I'm, I'm stoked and I'm really excited to see, see what happens here because the Triforce model I think is very, very elegant. And this is also something that we were talking about in the Vance Spencer episode where we can talk about composable communities where this is integrating like the Ether bag holders, Ether stakeholders who love Ether is integrating the Maker Dao community and is integrating the yearn community all in one to generate this really powerful Primitive that I think will carry us off into the future.

[C]

Yes, I agree. And there's a lot of things that I didn't mention. I'll just say quickly one, which is of course, since it is using maker vaults behind the scenes and it is locking up ether. Of course, ether is a volatile asset. It can go up in price, it could go down, and depending on the amount of debt that the vault has, it could be susceptible to liquidation. It needs to maintain 150% collateralization. In the case of this vault, it always tries to maintain 200% collateral collateralization just to be safe. Above. And the other thing that it can do, it is natively integrated with maker Oracles, so it can read from the Oracle security module, so it can know the future. It can always know what the price of ether is going to be for the maker protocol the following hour. And if it knows that it needs to rebalance, people are incentivized to call the rebalance function on the Y fault and earn a commission for doing that. So it is, I call it unliquidatable. Of course that is not the case. It could happen, but people are incentivized not to let it happen.

[A]

So it acts as, you know, you talked about keepers who essentially serve as a liquidating force. It acts as like a super keeper and pulls all this capital together and is smarter maybe than the typical keeper. It also saves on gas fees. So if I'm trying to do that sort of strategy and I'm doing it solo, on my own, without wire, I'm going to be paying a lot in gas. Whereas with Wyern it's just kind of aggregating all of the transactions and the capital in this one kind of gas fee.

[B]

Also gas at an all time high today, so.

[A]

Oh God, what is it three? Is it 300? Geez, man. Yeah. So like, even, even wifey as a, like a gas savings mechanism is incredibly powerful. Just that alone. Let's talk about some of the effects that you were, that you were mentioning. So I want to share Mariano's tweet here because you know, you made reference to it, Mariano, but this to me was like tweet of the month, my friend. So this is eth maker wifi, the collateral, the protocol and the money robot. That's the trifecta that we were talking about. And Anthony put together this fantastic meme, I think, of what it might look like visually when Wyvern starts to deploy that vault and implement the strategy where it essentially becomes another eth eater. I also saw you tweet this, Mariana, recently that I think reflects your point. This is Defi Pulse. And again, you got to watch this on YouTube, guys, to get all these fantastic visuals. So. But let's sort by eth, right? So look at how much eth is getting locked up economic bandwidth, as we're fond of saying, a massive amount. Just in the last month, we've locked another 2% or so of eth inside of defi protocols. And this is a really fascinating screen. So when I clicked eth, I'm now sorting by the eth eaters, the biggest eth eaters on the Defi Pulse board. You see Maker, as you were saying, Mariano is a massive eth eater. It is locking up 2.6 million eth. It's just very hungry for eth. So is Uniswap. Now what we're going to see is Wyern start to rise up those charts.

[B]

So wire or will it be under maker?

[A]

I guess it will be under maker. You tell me, Mariana. So wyon right now is locking up a lot. Where is it?

[B]

I don't know.

[A]

I can't find it Here.

[B]

Yeah.

[A]

Oh, okay. Because I'm sorting. There it is, number six. It's. It's locking up over close to 800 million, but not very much eth. What will be the case when it starts to deploy its vaults?

[C]

I. We need to ask Scott Lewis, but I think that the eth should be under Maker, because that is.

[A]

Wow. Yeah. Right.

[C]

For the. For the lateral, it's going to be the Maker protocol.

[A]

So what's going to happen is Maker is going to start locking up a whole bunch more eth, Right. And then Dai, there's going to be a whole bunch more DAI minted right now. How much dye is there?

[B]

The dye is going into the urine protocol. The ether is going into the Maker protocol. Is that right?

[C]

Yes. I don't. If you go back to. To TVL USD and hover over the wiring protocol. Yeah. Can you see under where it says 777? It should say it had a pop up. That said,

[A]

I just clicked into the details calculating it.

[C]

Yeah, well, yeah, I don't know if that is attributed to Wyern. Yeah, there it is. So Wyvern Finance is built on top of Curve. Its TBL is credited to Wyorn Finance and Curve, but not double count for aggregate stats. I believe in this case, yes, DAI will be counted on Wym Finance and Eth on the Maker protocol. And right now there's like 150 million Dai minted probably 350 of those are backed by ether, so the bulk of it. And yes, the Maker protocol has historically been the number one holder of Dai in DeFi. We've now seen, thanks to Sushiswap, big increase in ether locked in Uniswap. But even then it's still no match for the amount of ETH locked in maker.

[A]

And that's exactly why you're bullish on those three assets, right? You're bullish on Maker because total locked value increases its potential to extract, make or burn fees. You're bullish on YFI because it's just eating all of these assets and charging fees for every additional asset that's locked up inside of it. And you're bullish ETH because it's being used as mega super collateral economic bandwidth, as we would say. And a whole bunch is about to be locked up inside of Defi even more. It's at 6% now, so maybe we get to 7, 8, 9%, 10%. And this is all pre staking, by the way. We haven't even talked about how much staking is going to lock up. That could be another 5%. Yeah, that's the bull case, guys, right? I mean for those three assets, it's not any. It's not complicated. You could see it playing out if you're paying attention to defi right now. Mariano, maybe just to quickly go back. So we've been talking about this why ETH vault and how big that is. But maybe just to finish that conversation off and then we'll take a step back. When is the Y ETH vault coming? So I saw a contract deployed yesterday, I think, but I haven't seen a user interface or any sort of detailed instructions. Is it close?

[C]

It is very close. I believe that there's already a version on Mainnet that people are testing. It may or may not have

[A]

around

[C]

10 or 15 Ethereum when we started our call. I have not seen how much it has now.

[B]

That slight smile on your face, Mariano, tells me everything I need to know.

[C]

IUI is coming maybe tomorrow. No promises there. Like I said, I am not involved, save for being on a telegram and posting funny memes and commenting, signing transactions every now and again. But it is so really very close to being released into the world.

[B]

Fantastic.

[A]

That is awesome. We are very excited about that. All right, so maybe now let's just take a quick step back and talk about some other things going on in Y earn because. Yeah, go ahead.

[C]

Before we start, can I say the last thing about the Y vault? It was mainly not written by Andrew, it was contributed by a third party. I don't know if I should mention who, but maybe they will come forward later. But it was a strategy that was written by somebody else. The best thing, and also such a cool thing about the Wym Protocol is the person who wrote this strategy, every time somebody uses or interacts with or makes money from the wire from the Wyeth vault, they will get 5% for being the writer of the strategy.

[A]

Wow.

[C]

And that is, to me, it is like incredible. So it also incentivizes people to write code for the protocol and earn. I've never seen a better alignment of incentives, truly.

[B]

So I put out this graphic yesterday which I had my. My ultra vile.eth Twitter friend produced for me. And it's of this like Cthulhu space, like, octopus thing. And it has all of the different protocols, like in its grasp and like the brain is wire in itself. And like, that's because it. This thing is a like extra dimensional virus that is just latching on to like every single protocol because of the incentives that every single protocol has. Like every single protocol has reason to be stitched into the Y earn system. Right? And not only are the natural incentives there, but like the individual incentives for some individual to take it, take it upon themselves to make that bridge, to build that bridge are also there because they can also pay themselves, you know, a little bit of money. 5%, though. 5% is kind of, kind of a lot like. Or is it maybe my mental model of like, how, like what that actually means is wrong? Oh yeah, there it is.

[A]

But it's your octopus, David.

[B]

Five percent of what? Mariano, can you kind of go into details as to how that'll work?

[C]

Yeah, I need to double check the code and maybe I'm messing up the number, but if I'm not mistaken, it is 5% of the profit. Okay, so it can be quite a big amount.

[B]

So. Yeah, so 95% of what the Yearn protocol earns for the Y eth ether depositors goes to ether depositors and 5% of what is made goes to the writer. And I'm assuming at some point in time, like governance, like maybe this doesn't go on for like, you know, forever, but like this guy, whoever, whoever wrote this, like gets it for the next like six months, 12 months, like whatever, some, some initial like bump of funds and.

[A]

Or I mean, somebody else writes a strategy with a, with a lower fee or something, right?

[B]

Yeah, or a better strategy and then better strategy, something like that. So.

[A]

But the genius thing about this is that it's incenting itself to like this is, you know, the dow vision of 2016, where all of the Ethereum community was going to come together and create this venture firm essentially to contribute funds into and go fund itself and go fund Ethereum, go fund cool projects and make profit on it. That's what YFI and WYEARN is becoming. Only it's like using the substrate of all of the different lending and borrowing protocols and all of the money protocols and defi protocols that are getting built on top.

[B]

One thing about this little graphic is I just love how smiley that little ghost is. He's just so stoked to be like part of the year in Octopus.

[A]

That's the AAVE goes. All right, so aave, David, I think you mentioned to me that you're messing around with this, but part of WI fi's growth this week may have been as a result of aave. So aave. AAVE added it. AAVE Ghost added it to its interface. Right. So I can see if I could see it here. So that just happened, I think, last week. So what happens if you deposit wifi into aave?

[C]

Yes. Well, there is not that much that happens. You can borrow again if you deposit WI FI in aave. I think the APY for depositing is zero. Yeah, it is zero right now. So you're earning anything for. For borrowing it, but sorry for supplying it. But you can borrow against it and

[A]

you don't have to sell it. You don't have to sell it. You can borrow against it.

[C]

You don't have to sell it. Yes, I'm not going to say what I'm borrowing, but I'm borrowing against my wifi to farm sushi.

[B]

Which goes back to the episode with Vance where we talk about the farming premium that all these tokens have. Because like yearn synthetics, they, the aave, they all produce a capital asset, but they're all collateral or more potential like capital or valuable assets that you can leverage inside of farms. And so like the value of YFI token is now a function of how much return you can get outside of. Outside of the wifi token. Just farming, which is just insane. This is why you guys have to go listen to the episode.

[C]

And also, yeah, and on sushi, I could farm directly with WI fi eth LP pair, but that is the only asset that I don't like getting any impermanent loss. It's like even though with the apys on sushi, I'm probably making money. This is like a 2000% even then it's like, no, no, no. Automatic market makers. Get your hands on off of my wifey. So I don't farm with it.

[A]

This is the sushi user interface, Mariana, that you're talking about, right? So this is a user interface where you could deposit wifi in addition to some other DeFi tokens and ETH, of course. And these aren't just straight tokens, these are actually. You first have to deposit them as liquidity into Uniswap and then you can deposit them here. And sushi is trying to be sort of a, like people call it a vampire protocol, but it's trying to suck liquidity out of Uniswap and be the next Uniswap. That's the attempt and just fired up over the past four days. So that's what you're talking about with sushi, right? Yes, guys, it's a ton to keep up with here, like even going back to Wyre in itself. So we touched on aave. We could talk about. Another thing they added last week was delegated funding dao vaults. Right. So this again is the. Like they were inspired by Fair Launch capital, which is providing no strings attached, seed funding for getting audits done prior to the release of like a token or protocol, like a yam, for instance. And wifey said, good idea, governance. Like we'll do that too. And so now you can actually get capital from WiFi as if it was a dao. Right. To build something really cool. So that was just added. You can also, the entire time you've been able to add, you've been able to vote on these things through governance. Right. And this is another the genius about WI fi is they seem to incent everybody to do things. Like they incent the behavior that they want. So one of the things they want is an engaged governance community to vote WI fi holders to vote on things. So what do they do? They reward you for voting. So if you deposit, if you stake your wifi, then you can now vote on things on chain and through voting you get some sort of return. I don't know if you guys. Have you guys voted on things yet?

[B]

I got paid $12 for voting for Mariano to become a multi 600.

[A]

So it wasn't just out of the goodness of your heart.

[B]

You're getting paid? Yeah, I owe Mariano some lunch.

[A]

Okay, so how does that work? I've not done it yet. So are you get like while you're staking, do you get some sort of. Yeah, for apr.

[B]

So you stake it in the governance contract and Then. And then you go and make a vote, which is just signing a message. And the thing is like gas prices are kind of expensive. So like voting for Mariano cost me like $4. And so like it's good that the wire and protocol is paying its voters because without it there might be like selfish, selfishness and people like, well, I'll let other people vote because I don't want to pay for the gas fees. Well, people that do vote get compensated and the people that vote more get. Get profited. Right. So like so long as you are continuously voting, you will continuously receiving compensation for both your attention and your energy and your gas.

[C]

Yeah, exactly. So you stake the WI FI token and then you're earning on top of. So the protocol earns a lot of money that people who use the protocol earn a lot of money. And some of that goes to the protocol. And I think this is by. It's either by consensus or it's actually in the smart contracts. Anything above $500,000 that's in the treasury goes to people staking in governance. And that treasury got filled in three days. Probably the 500,000 got filled in three days. And any extras spills over to the people who are staking. But you can get the rewards, but you can only withdraw them if you vote. So if you don't vote, you still see the number go up, but you can only grab them if you vote and then you have to lock up your WI fi for three days.

[A]

Again, back to incentives, genius.

[B]

So is this the only. So the prospect or the bull case for Wyern is that it has that treasury that you mentioned and then it pay out that treasury to the wifey holders. It sounds like what you just said is that it does do that, but only if you vote. So if you just buy and hold wifey, are you, Are you leaving money on the table? Like, are you. Is there no prospect of you receiving any of those dividends?

[C]

I believe that at this point, yes, you're not receiving any of those dividends. But I may. This is, this is probably stretching my knowledge of the protocol and I may already have said a couple of things that are incorrect.

[B]

So I don't think anyone actually maybe except for Andre himself, I don't think anyone can really tell you the complete, all encompassing state of the wire and protocol, which is also something to be crazy.

[C]

There is so much.

[A]

One other thing so that we could talk about. I don't know if you know how familiar you are, but I saw the wire insurance piece of things come through. So this Is WI fi again deploying something that looks to be kind of revolutionary. So this, this appears to be some sort of smart contract defi protocol insurance that maybe stacks on top of Nexus Mutual in some way. I'm actually, I haven't. I haven't done much due diligence here. I just haven't had time. Mariano, what do you know about it?

[C]

I know very little as well. I know that it launched recently. I know that it didn't get the reception that it should have. I haven't seen a lot written about it, but I know that it's still revolutionary. It's a couple of clicks and you have insurance either I think in ether or in Daisy over, I would say your deposits in different protocols. You have like most of the big ones, aave, balancer, compound curve, synthetics and even wire and some protocol. And the backend is Nexis Mutual.

[A]

That's fantastic. So it looks like through the Y insurance interface, the wire interface, I could get some cover available and there's almost one hundred and ten thousand, ten thousand worth of ETH in cover available. And I could say I want to cover, get insurance. That means for the amount that I've staked inside of Balancer as a liquidity provider for between 30 and 365 days, it looks like I can just generate a quote and get that covered here. Just crazy. The pace that wiring is developing, I think it's very clear that it is not just one person anymore. It's an Ethereum dao.

[B]

Basically, it is the version of the DAO that we originally thought of when we thought of the DAO in 2016, except now there's just more of everything. More other protocols, more tools, more. More developers, more community members, more capital. There's just more of everything.

[A]

It's fantastic. All right, so Mariano, I know we're up on time and you've got to run. We've got a couple other things to cover on State of the Nation for you guys. If you are looking to get started with wire and we will include a tactic that we read up on Bankless, I believe we published that last week. To get started with some of these vaults, you could see. To get started with a vault, these are the strategies that we're talking about. You can just kind of go here, scroll through it. You can see the various APRs that you can earn through each of these vaults. And it seems like we expect to see a Y eth vault here on this page sometime maybe this week, which would be quite exciting. So there's ways to get started with wire. And of course, this is incredibly risky. I test in prod. Remember that all of Defi is tested in prod, so be careful about what you deposit. You could lose it if there's a smart contract hack, if there's some unforeseen event. But for those of you guys willing to live on the edge a little bit and risk it, this is a very compelling way to do automated yield farming. All of the money, robot sorts of things you could do. And Mariano, we so much appreciate you coming on. Thank you specifically for sharing about your trifecta asset thesis. I think that's going to be. Yeah, I think that's. That's one to. To watch, certainly.

[B]

And might become a genius on bankless in the future.

[A]

Yes, I think it should. So thanks for joining us

[C]

now to you both. Thank you so much for the invitation, especially to David. Congratulations on going bankless full time. I think we mentioned that we didn't have time to touch up on this, but yeah, there's a lot of people going defi full time.

[B]

A lot of churn.

[C]

And it also coincided with the meteoric rise of WI Fi. So I think it's going to empower a generation of builders.

[B]

I hope so too. I hope so too. And Mariano, same congratulations to you. You saw Makerdao from the very beginning to its maturity. So, like, you know, tip of the hat for being such a pioneer in the space. You were Bankless before, before any of us here. So congrats on that.

[C]

Thank you. Thank you. And yeah, I want to say that even though I'm not in the foundation anymore, I'm still very much involved with the protocol.

[B]

You're part of the dao.

[C]

I think that I can. Yeah, I can help Makerdao a lot more now from outside than from within, so.

[B]

Very cool.

[C]

I'm gonna become its biggest shiller.

[A]

Very good, Mariana. Thank you.

[C]

Thank you for having me.

[B]

Cheers.

[A]

Absolutely. It's been a pleasure.

[B]

All right, Bye, Mariana.

[A]

Bye, David. That was just fantastic. You know, I hope that was a deep dive on wiring for some folks who are trying to get caught up on everything that's going on. Before we get to a few other topics I'm super excited to talk about. We should talk about our sponsors again. David, do you want to start with Ampleforth, my friend?

[B]

Ampleforth. I keep calling them the king of modern rebasing. So a bunch of protocols have integrated this rebasing mechanism lately. And Ampleforth was the whole entire concept of invented the whole entire concept of rebasing. So ample forth. It's a pretty simple protocol with a lot of significant implications. It's very much like Bitcoin in the sense that it is a non dilutive asset. So there is a fixed fixed. It's not even a fixed supply. There is a fixed value of Ampleforth but the price of the token, unlike Bitcoin stays the same over time. But the supply of Ampleforth fluctuates wildly, just like Bitcoin price fluctuates wildly. So while the price of Ampleforth is pegged to 2019, that doesn't mean it's a stable coin. Because if you buy an Ampleforth token, you will see the value of how many ampleforce tokens you have in your wallet fluctuate up and down. Right. And so if, and what a rebase mechanism is every 24 hours, Ampleforth will mint or burn tokens from your wallet in order to make sure that the token tracks $2019. So it's like Bitcoin but like inversed. Right. So it's pretty crazy. They have this liquidity mining incentive program where if you add ether and ample fourth tokens to the Uniswap pool, you'll get an extra little bonus of, of amples. So very much in line with this the yield farming narrative that, that we are have seen. And so you can check them [e-mail] there's a lot to unpack with with Ampleforth. It's. There's a lot more to what meets the eye. So you can check them out at Ampleforth.

[A]

All right. Also want to tell you a little bit about our sponsor Monolith. So Monolith is an incredibly exciting, I think set of tools. This is primarily for our European listeners because it is mainly available in Europe though they are looking to expand it and I do hope they come to the US very soon. Monolith is a crypto Visa card, but it is a bankless crypto Visa card so they never take custody of your funds. This is one of the revolutions that can only happen happen on Ethereum. It essentially wraps your entire Ethereum address inside of a Visa card so you can deposit things into it, like DAI for instance, or even they recently added the AAVE version of USD so ADAI or ausd. So it acts as a savings account basically. Anyway, that's all in a smart contract. But the output is you get this monolith Visa card where you can spend all of that crypto in the real world you could go to Amazon, you could type in your Visa card number and you could buy something that is really the most bankless way to use crypto that I know of today. It's sort of the vision and the dream that we've been talking about in crypto since 2011, 2012. Using this stuff in the real world. It's starting to happen. It is a one to one replacement for HSBC or a Revolut if you're in Europe. And what you need to do is get started with it at Monolith XYZ and get your Bankless Visa card highly recommended on your journey to going bankless. All right, David, we talked to Ayan, Big topic. We've got a few other things that was a big topic and this episode's going a little bit long. Do you want to maybe just finish off that? Because I know you've wanted to talk about this and My bad, dude. We should have announced this at the very beginning. So David is joining Bankless Full Time media. I've been doing this close to full time for a while, but David is joining me and going full time. David, it's going to be awesome and I'm super psyched about that. That should have been in the announcements, but hopefully folks that are with us are now catching that.

[B]

Yeah. So no, this is part of the state of the nation, right? So like, I am not the only person to leave their previous career to go off onto a new venture. Right. And so through the bear market, like I've been working with Realty to get tokenized real estate up and running. Realty is about to release their balancer system which produces the Realty asset, which puts Realty in the game. Right. Like Realty then has the token. And so like, I feel good about where I brought Realty. And to be honest, like, my skills as CEO of Realty were great for that time period. But Realty, just like every other defi protocol, is like getting bigger and bigger and bigger. And so they need somebody who has stronger and stronger skills. And you know, as we all know, I'm much more suited to be like a content producer and evangelizer, you know, a flag bearer of sorts. And so I'm really excited to be able to just like max out my like, content production skills.

[A]

And David promised that he would deliver even more content than he's doing today. So I have no idea how a human being is actually capable of doing that.

[B]

But we're going to see there's going to be a lot of content coming churning out of the bankless nation. So I'm really excited about that. But, but yeah, like, like I said, like I'm just one of like six, six, seven, eight people that have announced that they're, they're leaving their job that got them through the last two years in order to do something that more aligns with what they want to do. Mariano just said like, you know, he, he was working with the Maker foundation for like the past four years. You know, you can just go on Twitter and like every, every time there's a new yield farm, like somebody quits their job.

[A]

So yeah, you know what, it's just like, all right, so this is how, this is how sectors are built. This is how Silicon Valley was built, right? You know, why is Facebook, why are Instagram, why are these web two companies based in Silicon Valley? Well, it started with like intel back in the 1960s and 70s, right? So intel built Silicon, Silicon Valley, Silicon ships, right. Turned that area into a computer manufacturing zone, which birthed the next generation, which was Microsoft and Apple in the 1980s, which what birth the next generation, which was like Hotmail, which got like bought by and then turned into YouTube and Facebook.

[B]

The PayPal mafia.

[A]

This is what happens, right? It's like, it's like in physics, you know, supernova of a star, right. It's not just a one time explosion. All of that material out of a supernova then goes and creates a second generation of stars and then a third generation is born. That's exactly what's happening though I would argue at an accelerated pace in crypto and defi. Right. His first wave maker is successful, right? Maker successful. Now it's in a place where Mariano's like, look, I can contribute to the dao, but I can leave it in good hands. Now I'm going to my next. Is he leaving crypto? Hell no.

[B]

No one is leaving crypto.

[A]

No one's leaving crypto. He's taking his money and he is reinvesting in the space. He's taking his talent and his skills and he is reinvesting those in this space. That's how this place becomes like the capital Silicon Valley, the programmable money. Silicon Valley installing the Ethereum economy, which is super exciting to me.

[B]

Yeah. So Mariano, he's pretty public about his most recent seed investment in Dapper, our bankless sponsor. And so, and he's not the only.

[A]

So he paid for this episode.

[B]

Yeah. So yeah, that's why we got him.

[A]

Thanks, Mariana.

[B]

Well, your checks in the mail, Mariano. And so, and like he's not the only one. Like, like, like I said, like 6, 7, 8 people have quit their jobs. Like I've seen like A bunch of, a bunch of the people I know contribute seed investments. And the thing is like seed investments are for products that are going to come out. Like Zapper is already a live product so you can go check them out. But like for the, for the other seed investments that I've seen that, that you know, may might not be like so well known in this space. Like these products are going to be come live in like six months to three years. Like very, very long window, right? But like this bull market, the last bull market lasted two years. But there's this also this idea of, you know, the lengthening cycles theory. Like every time Bitcoin has gone through a bull market and a bear market, each one has lasted longer. And I, that's just kind of just makes sense. As things just get older they just like take, they move slower. And so I think this bull market is going to be long and drawn out because like as the energy of, of yield farming and liquidity mining and fair launches like that, that, I don't know how long that can sustain us. It probably can't sustain us for three years. It'll probably sustain us for a year or something. And then maybe there's like this NFT revolution that's really hot. We're definitely, definitely hot on that. But the thing is like people are shifting and positioning. That's why the state of the nation right now is positioning themselves in order to like build something that will like also sustain ourselves into the future. And so I think that this is the golden age of Ethereum, the golden age of defi. Because as one thing dies off and its energy kind of dissipates, like you said, it will reform itself into new energy and sustain ourselves. I think that this is going to be a bull market for the ages.

[A]

Well if you, if you, if you think about a little bit like the Internet after the collapse, right? So like.com collapse 2000, 2001Amazon by the way lost 96% of its value, its peak market cap value. It's interesting, Ethereum lost 95% of its peak market cap value. But then if you started getting into the Internet when everyone thought everything was dead in 2001, 2002, it wasn't just another cycle, right? That's been a good investment for the past 20 years to have Internet skills, right? And look at Amazon. I mean it hit its market cap in 2008 and then blew right past it. Now is it the most valuable company in the world competing with maybe Apple to be that like the last 20 years were owned by the Internet. It wasn't just a boom, bust cycle. Boom, bust cycle. That's why I think it is important to be in the nation now in these early phases. Because not only the capital, right. But also the skills that you're developing now are going to pay dividends and also the network, the community. Right. Like you know who, you know at this point in time, they're going to move on to do great things because they're simply front running everyone. They're simply early. So it's a great time to be early. It's a great time to go bankless. Yeah, I couldn't be more excited and I do think that, you know, it could be a multi year bull run.

[B]

Absolutely. David, one last note on that. One of my favorite lines from Eric Voorhees is that bitcoin doesn't go through bull markets and then bear markets. It's just, it's been in this like decade long bull market, right? And we knew about this in Ethereum too, where like the 2017 bull market and then the 201819 bear market. I don't know about you, but like in 2018 and 2019, so much more was built in those two years. So much more than like all previous years combined. So like price prices aside, the bull market is in the development, right? And now the bull market is also in the development, like just talking. We just spent like an hour talking about just one protocol and all of one protocol and one week in one week. And so like that, that developmental bull market continues and now also the prices are following, right? And so again, bull market for the ages.

[A]

Yeah, yeah, super excited. Dave and I are bullish if you couldn't tell a little bit. But here's why. Look, let's talk about our next thing real quick and then I want to get to eth. This is Uniswap protocol. Okay? So we've been talking about Uniswap for a while, been waiting for this moment for a while. It finally happened over the past one 24 hour period of time. Uniswap, the decentralized exchange, the little money robot that was founded with less than $100,000. And Hayden Adams has another Adams represent is his first not crypto project, his first coding project like ever.

[B]

He learned to code.

[A]

He learned to code and this happened what, November 2018. You talk about things getting built in that time period. Well, its volume now surpassed Coinbase. Uniswap's volume surpassed coinbase and it's 426 million.

[B]

Its first bull market, its first try.

[A]

It's first trade. Okay, so I put out a tweet a while ago that basically said, I think Uniswap will be the largest market in the world. We're talking like tens of trillions of dollars, potentially in volumes in the next 10 years. Right. This is how it happens exponentially. Right.

[B]

I bet people thought you were crazy when you said that.

[A]

They did another shill fest hype tweet from Ryan. That's what we've come to expect. Expect. Right. I'm just saying it's happening, guys. It is freaking happening. Like protocol sync thesis. It's happening. Like Uniswap being used by other defi banks, crypto banks, it's happening. All of this stuff is kind of playing out. So that's crazy. That's exciting. I don't know, David, you want to say anything about that? Anything more about that? Or is that just.

[B]

That's kind of it. It's just like bitcoin maximalists are like hyper. Bitcoinization is happening around us. And like, we are like the protocol sync thesis is happening around us. I like our.

[A]

And by the way. And by the way, bitcoin is part of the protocol sync thesis.

[B]

Absolutely.

[A]

It kind of fits. But the problem with maximalism is it's just like there's only one thing. There's only one.

[B]

There's only one room for. There's only room for one protocol in the protocol sync thesis. But there's a lot more.

[A]

All right, so real quick then. So sushi is like cloning. Uniswap.

[B]

Yeah.

[A]

What do you think about sushi? Have you been doing sushi?

[B]

No, I haven't been able to follow this one.

[A]

So it's like yams. The mining mechanism is like yams. We talked about that, right? And it even looks like yams, except you have a sushi chef at the top rather than a simple farmer.

[B]

Composable communities.

[A]

Composable, composable communities. So they're composing together all of these communities and they're trying to vampire suck liquidity out of you. Uniswap. It does seem to be a legit project, whether they're just juicing it for the returns and then everything's going to collapse. Like it's over a billion in market

[B]

cap, which is already insane. It's not even a week old.

[A]

And we haven't seen Uniswap V3 fight back, which is going to be pretty exciting. I have a feeling that that's going to be something to watch. But I don't know. What do you think? Do you think, is this good for Defi or is this basically just hype machine? Like people farming this stuff are getting carried away with fleeting memes and, you know, Uniswap is the one to watch.

[B]

Yeah. So I think as time goes on, it's going to become much, much more of the latter and much less of the former. Right. As time goes on, we should start to be more skeptical. As time goes on, we should be more wary because, you know, there's just like in the ICO world and I wrote a market Monday piece in Bankless about this where like the initially the ICO was good, right? Ethereum killed it with its ico. Augur killed it with its ico. The ICO for those things were really beneficial in doing what they were supposed to do, which is spreading out the tokens to a large amount of people. And that's exactly what these things are doing. And so like wifey and yearn good. Like nailed it, nailed it out of the park. Yams so good. Nailed it, nailed it out of the park. Sushi I think is also good. Like Sushi, I think is, is a very viable product and is. And the, the whole thesis about the market Monday post that I, that I put out yesterday was every single protocol on Ethereum, there's incentives baked in to try and fork and fair launch it. And so like, I think over the next like six months we're going to see a bunch of fork and fair launches because the incentives are there. And I think that's also going to be good because like that they, that every single protocol deserves to have its fair shot. Right? Like, and so like, if we can fork and fair launch something, let's try it out. Like, that's by no means means that Sushi is going to be the next Uniswap. It doesn't not mean that like things are, are yet to be determined. And the thing is, it's up to the community, because all things rest on community. All things in Ethereum and D5 rest on community. Community. And so it's up to community to determine whether this thing is worth it or not. And a large part of the community's perception is to how fair the the launch is. Right. And how good the product is. And so ultimately the free market will decide because and the free market will decide based on how dense if the thing is in the protocol sync because the fairer and more equitable the launch is, the stronger the community it will generate and the deeper down in the protocol sync it will be. And so right now I'm all for it. Like, I've seen some, some shady clones of, you know. You know, some of the wifey clones weren't so hot. But like right now, you know, we're on a pretty solid track record of like, good things. Wifey yams, sushiswap. I think those are the big ones.

[A]

Yeah, I agree. I'm pro experimentation and the market will figure it out in time. Look, no. No one is forcing you to buy sushi. Right. If you want to risk your capital. And keep in mind, guys, this is a risk. When you put stuff into a farm you don't know about, hasn't been audited from a team that, who knows, anything can happen, you could lose it all. But if you're willing to risk that capital, the way to do it is to farm it. You don't have to buy sushis. You can just farm it and see what happens. See if you like the community, see if the product is any better. I'm definitely pro experimentation too, but I'm also pro uniswap fighting back. To be honest, I hope they do

[B]

chalk it up in experimentation.

[A]

Look, Dodo came out, which was. Remember Haseeb talked about that. That came out this week. They're doing liquidity mining, right? So that's a different curve. It's another automated market maker you guys can take a look at. But when these liquidity robots fight, we as users, defi users, we as the Ethereum economy, we benefit because they just get better and better. They level each other up.

[B]

Absolutely. Yeah.

[A]

I'm very excited. Let the wars begin. Fight, guys.

[B]

Nick Carter talks about this fight as in the crypto banks world, like the bitcoin banks, because he thought that the era of free banking, when gold was the standard, was the best for consumers. And I love Nick Carter, but for some reason he likes bitcoin. But this same free banking competition is happening, but it's in defi with the protocol. The protocols are totally free banks.

[A]

It's free banks.

[B]

They are. They are fighting and fighting tooth and nail for computer, for community acceptance. They are like, please community, accept us. And the way that they do that is by doing things right. Right. There's no other way to do it.

[A]

It's the freest market in the world right now.

[B]

It's freest market in the world like Ethereum.

[A]

It's just. It's the freest market for experimentation in the world. And it's beautiful. Anyway. All right, last thing. Let's last topic. Let me share my screen. This is something on the price again of Ether. So all this stuff is happening in the Ethereum economy. But something I've noticed, something we've been tracking for a while, is this. If you take a different lens for eth, we've talked about this many times. I tweeted this out last week sometime. The price to earnings ratio. So what's the price to earnings ratio in stocks? It's how we assess capital assets like stocks. So if you're buying Netflix $1, one share of Netflix, right. For its market price, right now you are essentially paying $88 for every $1 in profit that the Netflix share generates. Does that make sense? That's what the PE ratio is. It's the price to earnings.

[B]

So you purchase it and then in 88 years you'll get the value that you put in back and then you'll also. And then you'll also have the Netflix stock.

[A]

Exactly. And this is all hypothetically because most of the time what these companies do is they don't pay out dividends. They retain their earnings and they reinvest it back in the business. And shareholders like that. They prefer that they vote for that because ideally the executive team can generate a higher return than you can. It's better for taxes, all these things. So when you're buying one share of Netflix, you're paying $88 for profit. When you're buying one share of Amazon, you're paying $130 for $1 of profit. You make your money back in 130 years. Okay, if you buy Zoom today, you're paying $1,777 for $1 in the previous 12 months profit. So what tends to happen is you can kind of see it here is the market is expecting Zoom to grow faster than Amazon to grow faster than Netflix in terms of its profit. That's why the PE ratio is. Is higher for these companies. Do the same thing for eth. Like do it right. And they've done that on token terminal, which you can do the pe ratio for ETH ether, the asset is 38 right now. Okay, all right, so this.

[B]

Wait, I thought crypto was ridiculous. I thought. I thought crypto was the weird one.

[A]

These stocks are like trading at very high flying, like money printer. Go Burr. PE ratios now. They are, they just are. But the PE ratio for ETH is $38. So that's 2% of Zoom. Right. So this is the next global money system that is growing at the rates we've been talking about for the past year. And it's valued at 2%. The price earnings of a video conferencing app. Good on Zoom. We're using them right now. I like Zoom, but it's not Ethereum. I could easily substitute to something else, man. We could go to WebEx or whatever. So it's just, I think Eth is stupidly underpriced. Not financial advice, but it is. It's hilarious.

[B]

It is. It is.

[A]

No, it's not financial advice, but it is hilarious.

[B]

It is hilarious. Yes.

[A]

Okay. And then, so this is a token terminal and we can see this. So token terminal has done a great job of doing. They call it not price to earnings, price to sales. That's a bit more accurate. It's more like revenue. Right.

[B]

Same metric though, right?

[A]

Very similar. Right. It's just earnings is like after all of your expenses. And some of these protocols have expenses, et cetera. So if you were to look at ETH as a capital asset, one of the expenses might be running a validator potentially. Right. So you'd have to take that out. But look at eth 39 here. It was 37 the other day. 39. Right. If you sort by pe for all of the other defi protocols or certified price to only bancor has a better pe. Everything else is higher. Why is that? So what is? When we talk about price to sales, the price is what you pay for eth, right? The sales is the transaction revenue. So that's all of the fees. And by the way, this is just transaction fees, not issuance. All of the issuance fees earned by miners. Okay, so here it is. If you chart it out, this is revenue. This is what is earning in transaction fees. Market cap is not following suit.

[B]

Why?

[A]

Why? Maybe. Maybe because it's hilarious.

[B]

Is that an option to front run the opportunity, Ryan? Is that what that is?

[A]

I don't know.

[B]

Maybe.

[A]

Tell me. Right. It's like I'm just throwing the data out here. Okay, so you have the price earnings, and then people are like, okay, but it's not apples to apples. Right? Comparison with stocks. I agree. It's not apples to apps. And then people say you can't compare. Well, you can compare because even if it's apples to oranges, both are fruits. And you can compare fruits. Right.

[B]

I'd also like to compare the stocks, which has money printer go burr behind it, and Ether and Bitcoin, which don't. So that's also something to take a note.

[A]

Exactly. So back to ETH is a triple point asset. Right. So what is price to earnings? Actually, taking a look at only one pillar of the triple Point asset thesis, only one pillar. So remember, triple point asset thesis. There are three pillars that make ether valuable. Three things. One, it's used as a money store of value. Two, it's used as a commodity, denominated money, so you use it to pay for gas. And then three, it becomes a productive capital asset in staking. This is just the third one. This is just productive capital asset in staking. And it's got a PE of like 37 to 39 right now. So what happens in staking is when eth2 comes around, that eth that you hypothetically own becomes a capital asset that you can use to stake. And you get two things. One, if you're a validator, you get a share of transaction fees and then you also get issuance. By the way, issuance is not included in this PE ratio. It's not included, just transaction fees. And then if you just hold ETH in ETH 2.0, all of those transaction fees, you don't even have to validate all of those transaction fees or at least a portion of them that go to EIP 1559 burn. You get those essentially in burnt supply, not as a dividend, but actually as burnt supply, roundabout dividend, dividend. So a more tax efficient dividend. So the PE right now is a bit more hypothetical. Okay. But when Eth2 comes around, it becomes real. And it's only one pillar, one leg of the triple point asset stool. It's just valuing eth as a capital asset. And it is, by the way, absolutely insane to value ETH just as a capital asset. Absolutely crazy to do that. You need to value it as a monetary asset, as economic bandwidth. Because 6% is locked up in defi. Right? And maybe that increases to 10% growing. Just grew 2 more percent in the past three weeks. Why?

[B]

Youth falls, technically deployed. Haven't seen. Haven't seen the UI yet. We'll see what happens when a UI

[A]

is there and then as a commodity as well. So all of these transactions you need, you better hold some eth, right, to pay for all of the transactions. So I don't know. That's all I want to say.

[B]

Do you know that website that compares food protocol fees, Bitcoin, ether Uniswap. Do you know that one off the top of your head?

[A]

Ah, yeah. What is that? Yeah, I know what you're talking about.

[B]

We've shown that one before. Anyways.

[A]

Well, you could look at. So on that website, both Uniswap and Balancer now are ahead of Bitcoin in terms of Fees, right? So Bitcoin is like number four. So it's like Ether is generating more fees, Uniswap and Balance are generating more fees. And then bitcoin is number four for the first time.

[B]

Bitcoin is number four, huh?

[A]

If you looked at bitcoin's pe, it is 561. And again, this is purely hypothetical for Bitcoin because it actually is not A staking asset does not turn into a capital asset. It's just hypothetical. But if you compared it, that's what you'd see right now with Ether.

[B]

If somebody's watching in the YouTube who knows that website that we're talking about, please drop it in there. I would to like to get that up, but the point is, is that like there are protocols on Ethereum that, I mean, we've, we've said this before, protocols on Ethereum are making more fees than Bitcoin itself. Right? And that's, that's bullish in of itself. Ethereum is a protocol of protocols and no one really knows how to evaluate it yet. But like we do know it's undervalued, that's for sure.

[A]

It seems that way.

[B]

It quite seems that way, that's for sure.

[A]

I mean, I don't know, but. So yeah. Why, why hasn't it fallen? Why hasn't it followed suit? Defi going crazy? Why hasn't it followed suit? Do you have an explanation for that?

[B]

Yeah, it's, it's a one of a kind asset that no one understands. Except I mean, I think, I think I understand it to a decent degree, but like, I don't think I currently understand it to the degree that I will understand it in 2, 5, 10 years. Just no one understands. No, it's an information asymmetry, right? And, and somebody, somebody's informational asymmetry is, is your opportunity.

[A]

There you go. I was looking for that. I was looking for it, but I couldn't find it. Twitter feedback is pretty packed. But David, I think, I think that's all we have time for, my friend.

[B]

That is all we have time for down here. I start, we started this state of the nation and the sun was down and now the sun is up. The sun never sets on the bankless nation. That is for sure.

[A]

It truly doesn't. I mean, we're global, right?

[B]

Global. Global revolution.

[A]

Revolution can use it anywhere. All right guys, this has been State of the Nation episode number 12. So you can catch this on YouTube like right now as you're watching. It comes out Tuesdays and then if you prefer podcast audio. It comes out tomorrow. As always, guys, this is not financial advice. We have our own opinions, we have our own thoughts, but we are not providing financial advice on this episode. We're also not providing tax advice. Keep in mind everything we talked about. Wire and eth, you know, other defi assets, wifey, they're all super risky. You could lose what you put in. But this is the journey. We are going west, guys, and we are glad that you are with us on the bankless journey. Thanks a lot.

[B]

So, hey, Ryan, when I hit the stop streaming button, it truncated the video last time, so I'm just going to kill time by talking about it. And so I also want to bring up.

[A]

Are we live still?

[B]

We're still live. Um, we're about to not be nugget news in the YouTube comments, which I'm pretty sure is Alex. What up, Alex? Yeah.

[A]

Oh, hey, Alex. Shut up.

[B]

He said that I didn't calculate this. I didn't run the numbers myself. So Pierre is going to come in and fire me. But the wifey price to earnings is 10. 10. 10. All right.