Call me Captain Obvious, but listening to builders and creators talk about what they are building and creating paints a much different picture of crypto than what you get from the snark on Twitter and the squiggly lines CoinMarketCap.
— Alex Mashinsky, Celsius, on stage at Permissionless
Permissionless Day 3
I’ve spent about three minutes on Twitter this week. (But you should give me a follow anyway.)
I’ve read zero emails. (But you should keep reading this one.)
And it’s been great. Call me Captain Obvious, but listening to builders and creators talk about what they are building and creating paints a much different picture of crypto than what you get from the snark on Twitter and the squiggly lines CoinMarketCap.
There’s been no snark at Permissionless (OK, maybe a little, all directed towards TradFi) and hardly any mentions of price. If anything, there’s a sense of relief that things are getting less frothy and more build-y.
Day 3 of Permissionless was entirely froth-free, so let’s get into some of the substance.
Brands in the Metaverse
I’ve been a little hazy on what the metaverse actually is, but it makes more sense to me now: Madeline Lieber of Crypto Chicks described it as the “experientially anchored” next iteration of the internet. And Carly Reilly of Bankless managed to dumb that all the way down to my level: If two friends are shopping on Amazon, it’s just clicks on a website — in Web3 they can shop together.
I hate shopping, Web3 or otherwise, but Zach Hungate of Everyrealm Ventures thinks there’s a big audience for it: “We’re invested across 27 different Metaverses.”
George Yang of Cult&Rain is even more bullish, noting simply that “the metaverse is the future.” Unfortunately for me, that future may involve twice as much shopping: Once for your real self and once for your avatar self. Some things, however, will be “phigidal,” which he defined as a real world luxury good that is paired 1-for-1 with a “badass” NFT.
I can’t say I’m looking forward to that myself, but if I can make money on a metaverse REIT ETF, I will.
DeFi 2.0: The Next Generation of Financial Primitives
The DeFi version of “phigidal” is bringing real-world assets on-chain.
Alan Chiu makes a convincing case that the Boba Network L2 scaling solution is well-placed to be the bridge between Web2 and Web3 — a bridge that is mission-crucial to the future of crypto. For the space to really grow, he explained, we’re going to have to interoperate with centralized, real world systems. Building those integration points is what’s required to catalyze the next phase of exponential growth, Chiu says.
Vance Spencer of Framework Ventures has a theory of what will get users to cross over from Web2 to Web3 en masse. Right now, DeFi is both the use case and the reason people join. In the future, Spencer thinks it will be gaming. Most bravely, he even made the bull case for play-to-earn: There are 1.5 billion people with an internet connection that make less than $5 a day, many of whom will be able to make a better living in Web3 games.
Ray Mogg of Tracer DAO offered a more speculative real-world use case for connecting Web2 and Web3 by floating the possibility that retail investors could hedge their gasoline or other energy costs via a DeFi platform.
Coffee Break
To mix things up, I met with VCs Rico Mallozzi and Iladro Sauls of Sapphire Ventures, who were holding office hours at a scenic Starbucks. VCs can sometimes be depicted as adversarial to the crypto space on Twitter, so it was great to find out that the real-life ones are genuinely committed to the space. Hearing how deeply they are thinking about DeFi, Web3 and NFTs reassures me that the developers and creators speaking at Permissionless will have access to the capital they need to build us out of this bear market.
DeFi in the Macro Landscape
VC money will help the builders keep building, but Dan Tapiero of 10T Holdings thinks DeFi is, and will remain, short of cash: “There isn’t enough capital to fund all the growth that’s coming — that’s why the yields are so high.”
He doesn’t think traditional finance will be providing that growth capital, mostly because they don’t get it. He dismissed JPMorgan as “just a big bank” and even questioned bankers’ ability: “If they had the skill,” he said, “they would leave” TradFi and join DeFi.
Bill Barhydt of Abra agreed: “The biggest market cap banks in the world will be DeFi within the next 15 years.”
Fireside Chat: Celsius
Alex Mashinsky of Celsius brought a college-basketball game vibe to Permissionless by tossing t-shirts into the crowd. (As with every basketball game I’ve ever attended, I didn’t get one.)
And, like Tapiero, he also came out swinging: “We all have one enemy: TradFi.”
Regarding the LUNA/UST collapse, he quipped, “a shark from TradFi managed to get into our waters.”
Comparing Terra to Lehman, he asked how many people went to jail for the Great Financial Crisis (zero), and predicted DeFi crashes will have more consequences: “I guarantee you people will go to jail for Terra Luna. The system is not fair.”
TradFi was also found wanting for its toothless audits: Celsius, in contrast, verifies it has the collateral it says it has “every second” (via Chainlink) — “TradFi cannot build this. They cannot do real-time proof-of-reserves.”
Crypto did not come away unscathed, however: “DAOs don’t have real governance. We think they have governance, but go ask a DAO to make a decision and see what happens.”
Day 3 Hot Takes
As ever, there was much, much more. But I’ve got a performance by 3LAU to attend (that’s a DJ, ya boomer!). So let’s do some quick hitters to close things out:
Madeline Lieber, Crypto Chicks, on working in Web3: When you talk to people in this space you never hear, “I feel great, my health has never been better.”
Zach, Hungate, Everyrealm Ventures, on NFTs: One-time drops are over.
Matt Cutler, Blocknative Corporation: Web3 is a full-contact sport.
Alan Chiu Boba Network: Yield farming is Farmville with real money.
Ray Mogg Tracer DAO: People are finally starting to realize that decentralization matters.
Carson Cook, Tokemak: The web3 economy is going to absolutely dwarf our current economy.
Vance Spencer, Framework Ventures: Perps are a perfect product. There isn’t anything like that in TradFi.
Jeff ‘Jihoz’ Zirlin, Axie Infinity: We have players in every country in the world except North Korea.
Chris Aruliah, BCB Group: Today’s five-year-olds won’t call it crypto, they’ll just call it money.
Christine Moy, Apollo, to crypto builders: “Holler at me if you’ve got something good.”
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