RIF Expert Panel Transcript: Open Finance vs. DeFi

12 November, 2020

RIF recently hosted an expert panel discussion on the topic Open Finance vs. DeFi. Below is the transcript of the event, you can find the video at youtube.com/rsksmart.

Panelists: Alex Bertomeu-Gilles, Risk Manager at Aave, Nadia Alverez, BD at MakerDAO, Josh Goodbody, Growth and Institutional Business at Binance, Maximiliano del Hoyo, Head of DeFi at IOV Labs, Carel de Jager, Consultant at Blockchain Academy Cape Town.

Moderator: Gabriel Kurman, IOV Labs Spokesperson.

Gabriel: Hello everyone, welcome to this expert panel on Defi and open finance, welcome to our participants, thank you so much for taking the time and sharing with all of us what you are doing, and why you think this space is so exciting. So, I will go around the table, the virtual table and ask you to introduce yourselves and tell us a little bit who you are. Um Max, do you want to start?

Max: Yeah of course first of all thank you for the invitation, my name is Maximilian del Hoyo, I coordinate all the open finance efforts in IOV labs. IOV labs manages 3 projects, the first is RSK, the smart contract platform on Bitcoin, the second, RIF, is a framework of services on the top of RSK and the other one is Taringa, that is the Hispanic social network, one of the biggest ones. From my side, I’m trying to create an ecosystem on DeFi for bitcoiners you know and that’s my job, and both of you I have talked previously, so it’s great to be here talking with you.

Gabriel: Thanks Max. Nadia.

Nadia: Hey everyone, well I’m Nadia, I work for the maker foundation, and my work is to create an ecosystem in Latin America for the maker- the solutions of the maker protocol, specially Dais. So I do like a lot of stuff like a lot of things like – I do new partnerships, I help them to create new use cases for Dai inside their business, we think about new integrations and new business models with the help of Dai and all the financial solutions that the Maker Protocol provides because the Maker protocol is also a lending and savings system so yeah, our main objective is to educate more people and explain what a stablecoin is, what DeFi or decentralized finance can offer to regular people, not just the people who are into crypto but everyone… and yeah I have been doing that for almost 3 years, the last 3 years.

Gabriel: Wow, well done, thank you so much. Carel.

Carel: Yeah good day my name is Carol de Jager im from the Blockchain academy which is a company in South Africa. We provide training in blockchain technology, from the very basic to the advanced and everything in between, we have quite a few set courses and my job, I try to study this technology on the lowest level that I possibly can, my background is also in engineering and then I digest the information and I try to present it to people who attend our courses on a much higher level. Mostly to corporates so that they can make informed decisions on whether or not to use this technology within their own organizations and I’m a big advocate for open public blockchain.

Gabriel: Thank you so much Carol and congratulations for everything you are doing, it's great and it's extremely important in Africa in the same way that Max and Nadia are doing in Latin America, these are the parts of the world that need this technology the most so… congratulations for everything you guys are doing…. Alex.

Alex: Hi everyone! Im Alex, the risk manager of Aave, and so part of my job is actually to bring some of the risk expertise I have as a qualified actuary to DeFi States and make it a bit more secure and find ways to better assess the risks to make sure that it's safe to use this product.

Gabriel: Extremely important we're gonna be talking about security in a while. Very important subject. Josh?

Josh: Thanks Gabriel great to be here, my name is Josh Goodbody, I'm the director of Growth for the Binance group, I'm actually originally a Lawyer by training, financial markets lawyer, got fascinated in the blockchain space a couple of years ago, I've had a number of different roles across mainly crypto exchanges, and Binance as you know is very active in the DeFi space. We of course started the Binance smart chain protocol on the 31st of August this year so it's been a real focus for the company, we are really pushing adoption of the Binance Smart Chain and wider DeFi Ecosystem, so very happy to be here, unpack some of those concepts and talk a little bit more about all things Defi.

Gabriel: Thank you so much Josh and Binance for being part of this panel, let me start, now with you Josh, and with the first question. So a big part of our audience is just getting across Defi and open finance for the first time, so how would you explain to someone what is Defi, what is open finance, why is this important?

Josh: Yah I think without trying to come out without a bunch of buzz words and jargon, really try to distill it down to its basics, so when we talk about things that are related to open finance what we're really talking about is disrupting the status quo of all things related to finance, it’s the disintermediation of the financial ecosystem stripping out all the layers of middle men, and the layers of institutions that sit within you the consumer and the various service providers that you use in your day to day life. Open finance is a concept that is completely different from country to country, but traditionally we saw open finance emerge out of open banking. Countries slowly started de-regulating their financial markets infrastructure and allowing different service providers to provide elements of the traditional banking world. Now in Europe, via various open banking initiatives you’re able to provide banking-like services out of non-banks right? So you’re able to provide the same banking experience you would have with your traditional bank, but actually doing it out of a non-bank institution. That’s kinda the inception of open banking which has led us into this kinda wider world of open finance and this is where blockchain comes in and really disintermediates this as much as it possibly can, DeFi is like I would say the “purest shade” on the spectrum of open finance. It really disintermediates all elements of the financial ecosystem and allows you as the end user to retain control of your assets but interact with other people and other service providers whilst retaining control of those, so you end up being in the driving seat of interacting with a wider financial ecosystem.

Gabriel: Awesome, thank you, thank you so much, I think very comprehensive explanation, very clear. Alex, anything to add? What's DeFi for you and from any perspective that you want to add.

Alex: Yah I agree with what Josh was saying, that in a way for me open finance is kinda the dream state so, that’s where we want to go, that’s where the permissionless financial system where anyone can access financial services and so DeFi is the execution of this dream on the blockchain and so actually where we can find hurdles of reality that come and we are finding ways to adapt and to make the dream as real as possible.

Gabriel: Cool, thank you so much. Carel?

Carel: Yah I think in general people around the world seem to start to get comfortable with the idea of bitcoin, and what bitcoin is. But you know, if you think about it and if you talk to people about what bitcoin is and how it embeds trust within a protocol, that kinda can understand how it can disrupt the retail functions of banking, and perhaps the store values aside of it and you know everything that comes with retail as well including remittances and cost for finance and those kind of things. But that’s kinda where it stops, for many people. We know that you guys work on RSK and all those kinda things but I think it's still a little bit vague to most, but you know when you talk about DeFi it basically disrupts all the remaining functions that a bank can supply us yah know. All of the trading instruments, things that would generally not be accessible too, let me say “Normal” people or the middle class people, if you talk about taking for instance high leverage positions in trading, and those kind of things are only available to the elite, let's call them the accredited investors, so I think it levels the playing field with regards to banking and financial products in total. And I hope- were probably going to talk a little bit more about this in a little bit but I listened to a bank less podcast the other day and if I can quote them, they used DeFi, they used Dai to pay a graphics designer from America from the United States to Niagara, they got a graphics designer in Niagara to design them a template for the report and they were able to pay this person regardless of whether this person has an identity or a proof of residence which there is a big chance this person did not have, so it completely levels the playing field in terms of the labor market, in terms of education, in terms of the financial market, and I think that’s the great potential that we have here, in the past developed companies had a massive advantage in terms of that because they could transact and deal with each other because they all complied the global KYC regulations that we’ve become so used too. But that kind of pushed the developed companies or the third world companies to side and they could not compete on the same playing field. So now it's all changed, I mean with the birth of the internet it kind of gave us the first step into that direction, but now we can actually transact and send money across borders as if they don’t exist and that’s a game changer.

Gabriel: Yah, absolutely. Thank you so much Carol, its interesting because you know since the creation of Bitcoin, when we started talking about an open financial system and decentralized finance we were thinking about bringing basic financial services to the billions that are currently excluded from the system, and you’re adding something interesting which is that is in the same way that basic financial services could be brought to a blockchain technology to billions of new users, complex derivatives that were only used by Elites can now be made accessible to the more general public. Which is kind of the same flow with the higher levels of complexity so yah very interesting. Nadia, what’s DeFi for you? How do you explain it to someone that doesn’t know what it is?

Nadia: Well uh, for me it’s an option. And I like to see it like an option, I'm not at all a maximalist, I like to see it as an option when you want to save the value of your money and you don’t trust in your local currency, you don’t trust in fiat, I see it as an option when you want to send money abroad, or you want to receive a payment, as Carol said and your working for someone in another country. I also see it as an option of investment, I don’t want to put my money in the bank because I think, I have to pay a lot to the third parties for fees so it’s a distributed financial world where I can choose whatever I want with my money and like verify where is my money, so like I see it as more transparent and open option for everyone in the world, that’s how I see this Defi Tech system.

Gabriel: Thank you so much, very interesting. Max.

Max: Yah I’m really with all of you know, from my side when I try to- sometimes when I try to explain to a non-crypto user about Defi, open finance… I try to say… just to try to understand it as a traditional financial service but no need of asking permission to someone, no need of KYC, no need to trust in someone else, just if you want to do remittances or want to use you know, financial services it’s an alternative, and I think when you offer an alternative you are offering Freedom you know? Cus now you have only the traditional financial system but with the best of them and the worst of them but the just opportunity to offer an alternative yah know is just we are adding value to the millions of users... that’s what I think.

Gabriel: I love and now that you mention freedom, I will go back to Josh here, and circle again. I’m sure guys, it happens to you all the time that when you have two friends that work in a different industry, I won’t mention any other industry but they see the way… how passionate we are about this and how and how excited we are and that is sometimes difficult to understand from someone that is not into this ecosystem seeing the future being built every day. So I would like to hear in your own words, we can start by you Josh: Why is this revolutionary? If you have to explain to someone who is developing websites or doing any other kind of thing, why is this revolutionary? And what excites you the most about this industry and what it can accomplish?

Josh: Yah I mean, where do we start? In terms of, you know, why is this revolutionary? There is so many angles of attack you could take here… applying this to where I came from, I used to be a commodities lawyer, in fact I started my career as a commodities lawyer just after the 2008 crash and we saw boom and bust across various elements of the financial market space and I was specifically focused on commodities then and just stepping back now and looking back at this ecosystem that we built to facilitate the trading of commodities and commodity derivatives, the massive massive cost associated with simple things like providing margin and providing essentially trade finance, providing settlement, providing trade reconciliation, and all the associated regulatory obligations that to be fair in many cases are necessary…. But all of the associated layers upon layers upon layers of complexity and bureaucracy that have been built atop of these financial systems, and you compare that system to trading off I don’t know, coffee beans on an exchange, the cost associated with that and then you look at what you can achieve by decentralized finance where you can provide the leverage, you can provide the liquidity, you can provide the means of settlement, you can provide the trade transparency and reconciliation at a fraction of the cost, at literally a fraction of the cost and so when I sit down with my friends to distill slogging away in a traditional finance sector and they say “what on earth are you-? What is this thing that you’re talking about DeFi and yah know and how does this thing work? What’s Sushi? What’s UniSwap? What’s all of this nonsense?” And then you break it down to them, and then they go “hold on so I can move tens of millions of dollars to finance a trade and the cost to me would be a couple of dollars vs what I’m paying now which is 50,000 dollars of legal fees on top of all of the associated infrastructure costs.” And when you boil things down to the actual practical costs, and you do a cost comparison in certain scenarios of financial space, you really see quite clearly how the decentralized finance space across the spectrum of Defi right? Because we’ve got different shades of Defi, from pure pure Defi where people are completely disintermediated to other shades of Defi that may look and feel a bit more centralized, across that spectrum you see a really powerful example of cost savings, transparency, and speed. So if I look at the traditional financial markets and I try to abstract some of the core efficiencies and benefits that blockchain technology can bring to those markets and then try and further disintermediate that by applying the decentralized finance methodologies to them, not centralized finance, decentralized finance, you start to see pretty revolutionary things that can be achieved. Where right at the beginning stage of this, this is all experimental stuff being built, all of the various automated market making technology, decentralized exchanges, it's all very very early stage and on its nascent level, but non the less it shows-

Gabriel: Josh so what you’re saying is, the revolutionary part would be the automation and programmability that translates into driving costs down?

Josh: Yeah that’s a great way to boil it down, absolutely, driving costs down through automation, disintermediation and frankly having an open financial ecosystem that people can build on top of in a permissionless way.

Gabriel: Cool, thank you so much. Alex, why do you think DeFi and open finance are revolutionary, why are we so passionate about it do you think?

Alex: Well you know actually what brought me into DeFi in the first place was seeing all the inefficiencies of the legacy system when I was working in the insurance industry and seeing all these inefficiencies that could be solved with the shared data base that is the blockchain and that is really good at maintaining information up to date and now I have been working in this space for the last 3 years and for me the revolution is really that anyone can access the most complex financial products so today there is a blocker that you need to know how to program so there is still a lot of skills needed to access those products, but for me the revolution will arrive once there is user interfaces that really allow anyone to do it but to give you an idea of what’s possible for example, so at Aave we have this product called a flash loan, it’s a loan where you can borrow all the exact liquidity of the product, that means that right now there is about 1 billion dollars that can be borrowed within one single transaction by anyone even if you don’t have it, like you have very little money you can access these kind of products to create complex operations and you know in the financial system as it is today very very few people have that kind of means, so yah it’s a real revolution.

Gabriel: yes well.. Sounds very scary as well no? But I guess we need to get used to these new tools, what I like about what you said Alex is that- well this technology is revolutionary but also the bar was very low before, no? When we see the financial system it had like 100 years with very little innovations, so uh there is a big part of it that is added technologies that have moved forward in the last couple of decades and just back in the day what it was. Carel? What do you think Defi and open finance are revolutionary?

Carel: Well I think in general, self sovereignty is a very beautiful thing. Where you were born is just basically the luck of the draw, if I think about it I see in South Africa and you guys in Latin America we didn’t really win the geographical lottery in that sense you know? Haha, and um it’s just sheer luck about where you were born. And it makes such a big difference in the opportunities and ways in what you can achieve in life, like even if you have an ambition it’s like this block, this barrier that you can’t get over, and Defi completely breaks down those barriers and that’s really what’s beautiful if I can repeat what I said earlier, it levels the playing field and like Josh also mentioned traditional finance, in traditional finance especially in the digital era trust has become a commodity. All these massive financial institutions whether they are insurance or banking or whatever institution that they might be within finance, they sell us trust in products. Even if you are a lawyer who transfers assets you sell trust, that is your product, and the margins that you make on those trust, that trust, that product is infinite, because it doesn’t cost you anything to produce that trust if you think about it from a philosophical point of view, so it's like when you do a transaction, the bank will charge you a percentage fee and although they have a fixed cost more or less the cost of sending an email to clear that transaction, although you pay a percentage fee as part off- dependent on how big the size of your transaction is. So you know it’s a very very unfair system, these barriers have been bolt up purposefully so too exclude people that cannot bring substantial revenue to these institutions and the beautiful thing about Defi is that it brings power to the people, it makes you self-sovereign, and I think that Gabriel is why we are so passionate about it. Is because we really see the possibilities and I wish everyone could see the possibilities, the massive change that will probably be bigger than what the internet brought us that we will see in this world.

Gabriel: Cool, thank you so much Carel. Nadia?

Nadia: Well I guess what excites me the most about Defi is the speed of the community in general, of the ecosystem, I find amazing how in two years all the Defi ecosystem has evolved and you can like see new projects every one or two weeks and creating new features and offering new services a month, Alex knows it, I'm a super fan of Aave and all these new financial services that they are bringing to the ecosystem, I love it. And this is because of the composability of the services that we created because everything is open, so you don’t have to create services from scratch, you just have to reuse what is already working. And I think that’s amazing, and also I like we are breaking the established rules of the system thinking in a decentralized world, so we are creating new services based on transparency and based on- sorry im having the internet… my connection of the internet like

Gabriel: Yah yah, happens. If you want to turn on your camera, we can get your audio… Nadia. Let’s move to Max. Why do you think this is revolutionary Max? What’s your passion about this?

Max: Yah you know, I'm from Argentina. Argentina suffered a big economic crisis for 20 years, a terrible crisis. And the trust you gave to the governments or the companies, and they lack of trust is terrible you know? Because you give them your money, all your efforts and in 20 years you lose that, so now I'm excited about building an alternative you know? Building a different economic circuit where you own your value, you do not depend on third parties. This a first one, but also I'm really thrilled about the momentum, where we are now, we are alright because we are at the beginning of this and this is really exciting and I really enjoy bringing non-crypto users in this type of financial services and I think that is very interesting.

Gabriel: Yah I think you guys have summarized it beautifully and why this is so revolutionary because we discussed about how this can disintermediate, reduce cost, lower barriers of entry as Carel said, let us build revolutionary new technologies and let it combine we each other so we have, Dai working with Aave, and also Dai integrated in Ethereum with RSK and taking it to the masses as Max was saying no? I think we all agree that this is not built for a very small amount of savvy tech users or wealthy individuals in the world, this is only going to become revolutionary if it can reach the masses, especially those who are not being properly served by the current system that has all the problems that Alex was saying. So now I would like to go around the table very quickly, what's your favorite use case? If you need to pick one, and I know its super difficult, it might exist or it might be something that no one has ever done yet and maybe someone in the audience wants to give it a try. So anything that you really like or you think is special for any reason or something that you would like to see in the space. Nadia, do you want to start?

Nadia: Yah well I’m a super fan of Dai of course, I love Dai because we have a decentralized stable coin, like we are creating something new, transparent and also is a basket of collaterals, we are bringing the community to propose new collaterals, deciding with the community the risk parameters of those collaterals and like working all together on the building of this stablecoin, so I love it not just because of what it represents that is well, a stable coin tied to the dollar but also because the dauh, the dauh part, where the community helps us to build the solution, so I really love it and also my experience with Dai as I said I have been working with the foundation for the last 3 years is that I have seen how different new projects started using Dai as a base, because maybe in the past it was harder to think about new DeFi products or services if you had a crypto currency, a black crypto currency, so one of my favorite projects that started with Dai was Pull Together like this non-lose losers, just winners lottery I found this project very disruptive and creative and now they are like evolving to a way to save your money in the future because you just like buy a ticket with Dai for example and if you are lucky you are going to win maybe I don’t know, 10000 Dai, but if not they will give your money back so its like a way to save money for the future, I really like it… yah and yeah I'm amazed about all this new Defi project stuff we are all seeing every week.

Gabriel: Thank you, what is the name of this project again? The one you just mentioned?

Nadia: “Pull together”.

Gabriel: “Pull together”, cool. Josh? Any use case or application you like?

Josh: Yah to Nadia’s point about Dais, I think philosophically, it’s a fantastic innovation and it showcases the kind of community, that spirit, that many of us kinda entered the blockchain space to be a part off, you know being able to have a skin in the game and being able to really influence the outcome and the dauh I think is super exciting. And the concept evolution of the dauh, project after project evolving how dauh are managed, but picking up on another area, the development of AMM, so automated market makers is an area I think really driving forward a massive amount of innovation in the Defi space and the AMM functionality can power different use cases, it can power token swaps, it can power yield generation, it’s kind of like the engine of growth for many different DeFi projects, so I think the AMM is area that lots of people don’t fully understand underpins a lot the Defi space and the reason I find it so impressive and the different iterations on AMM is because it allows people to use their crypto assets in a constructive way and generate passive income, or yield on their assets in different risk adjusted ways, so you can choose to stake your assets in a super risky protocol and you’ll get high rewards for it, it might be un-audited, it might be initiated by a team that haven’t revealed themselves publicly, I know publicly named founders down to slightly more, shall we say not riskless but less risky protocols were you can participate in yield farming in some kind. So the AMM for me is a really exciting tool that I think we’re going to see iterations off and people are slowly working out ways to really de-risk some of the systemic things that come with AMMs whether its making sure that there is more of a focus on getting the code reviewed by third party auditors, simple things like that that de-risk the entire framework. So for me, pointing at AMMs is a clear kind of area of fascinating development and growth.

Gabriel: Interesting, thank you so much and I think we should tell our audience that the best investment you can do is in education, so don’t put any of your money in any product or solution that you do not understand in depth, so be very careful. By far the most exciting thing is the technology that is being developed in these protocols I guess… you all agree with this. Alex? Any use case on top of Aave which everyone loves that you personally say you know “this is something that I really like”.

Alex: On of the use case- I mean I’m an expert in credit days of the blockchain so its again linked to credit but in our modern economy that’s actually a credit skilled country, company and now credit states on the blockchain have been growing really fast so that’s what we’re starting to see now is a lot of real world assets that get synchronized on the block chain and so currently most of the credit number blockchains is collateral like credit where you can use an asset to save guard your loans and so that also exists in the financial industry but usually it’s similar to a mortgage and more sophisticated product or only accessible to a very few individuals or high network families and-

Gabriel: Have we lost Alex?… I think so. So let’s move to Carel and then we are going to continue with Alex. Any use case Carol that you find super exciting?

Carel: Well I think the whole space is super exciting but for me the most exciting part, the coolest part of Defi is where we start moving into this space where we build applications were never possible within traditional finance, that we could have never even imagined, and the one that stands out for me in terms of that is uncollateralized loans in an adversarial environment where you don’t have a reputation as well. I mean could you have ever imagined that something like that is possible? And we see that with Flash loans of course so yeah definitely flash loans is by far for me the most exciting use case of this and I would like to see that progress even further like Alex also mentioned that using different kinds of collateral but also I can’t wait to see other ways that were going to figure out to get loans without any collateral I mean that is really remarkable for me.

Gabriel: Thanks Carel, let’s go back to Alex now that she is back, so you were saying that the credit space is super exciting?

Alex: yah sorry I got cut out but ok I'll continue on the same idea so yah Carel you'll be happy to learn about the credit delegations that are already starting to take place in Aave and so this means basically that if you have a trusted network that trusts you to a certain point where they are willing to lend you their credit facility you can borrow without any collateral and so this is really interesting because it has a strong potential to bridge traditional finance which has reestablished trust networks with block chain and so leverage kind of real world assets and financial institutions and link them to the block chain and let them use all their assets and create new types of relationships and new types of financial products around that.

Gabriel: Yah the implications of lending a reputation to someone that doesn’t have any credit rating… I mean the impact that it could have in the world no? It's amazing. Thanks Alex. Max what drives you crazy, what use case do you like right now.

Max: At this moment I think that Crypto backed stable coins is a building block for new financial products and also just to get new users just to work on another option…. At this moment. On the other hand as Josh said I’m very fond on AMMs, I love Uniswapyou know, I think it's an amazing product, the engine how they thought of the product, I think it's marvelous so I would choose those use cases.

Gabriel: Thank you so much. Yeah, I'm really looking forward to start seeing stable coins from emerging market fiat currencies. We were talking about the South African Rand, and the Argentine Peso, the Brazilian Real so people can start using them for everyday use and to buy stuff on the street no? Not only as a hedge for financial markets and more complex use cases. So now let’s go onto the other side, which are the major hurdles for Defi and open finance to get massive options, if there are any, I think we all believe that in the long term this is the path going forward and sooner or later we can get there, but if you need to identify the few areas where we could have more innovation or more power, more lobby, more back, this could accelerate massive options, what do you think Josh that these areas could be?

Josh: Yah great question, usability is a hurdle we constantly see in DeFi. When we build as a company, we try and make things as easily usable as possible and we’ve had challenges building for example our decks in a way that mimics from a usability perspective, from a look and feel perspective our centralized exchange. And the closer they are, the more usable they are in the eyes of our consumers and our users so we really focus on usability as a core area when we build our products and services. Now if we zoom out and look at the wider ecosystem, why have we seen this massive boom this year in DeFi? There is lots of diverging views but in my personal view its because of the yields that we have seen across the space, some of which have been wild and some of which have been unsustainable, but that doesn’t matter, that’s got people’s interests in the space, its peaked their interest, they’ve started dabbling in the Defi space and they are experimenting with different products and services that are out there, so the yield has got people in the door and now people are starting to understand all of the kind of downstream-upstream use cases that can be built using this technology, but one of the core things that stops people from using it is they almost have to be technologists to use some of these things, so one example is you look at the usability in th UX of uniswap and then you compare that with the usability and UX of maybe curb-finance or some of the other copy cats that came out after that. And they are night and day, one is easy to use another isn’t easy to use, and some of the user experience is a little bit touch and go, its difficult linking a wallet to it, so if were already taking users that for example are just entering the crypto space, understanding what crypto assets are, how to hold their own keys or perhaps not, as the case may be hold them on exchanges, if were dealing with that being the majority of the customer segment were trying to get involved in the space. If we’re not making Defi products and services easily accessible and usable we're going to have a real challenge getting people to adopt them in their day to day lives. So I think the concept of holding your own keys for a lot of people sounds great but in practice can be quite intimidating, so usability, UX being as simple and intuitive as possible is the key thing I believe will unlock the Defi space to a wider audience.

Gabriel: Completely agree. Nadia, what do you think?

Nadia: Yah I completely agree with Josh, I think the same actually. We have been very focused on educating about Defi and Dai, but that’s not the solution. The solution is to create awesome products that have awesome people like product owners thinking about the service people need and not thinking about the technology of it. So yeah we have too- like we have a long way on that since, and also what I have seen at least in Latin America is regulators are other important thing for crypto to become mainstream or Defi like being used massively because at least in latin America every country has its own government with its own currency, its own regulation and it’s difficult to think like in a global financial service solution with a global currencies, and also we have explain to these regulators how crypto works and create like laws that are logic and can be applied to the solutions that we are building. So I think we have these 2 big problems in our hands, regulators and usability.

Gabriel: I completely agree and also it drives me crazy… as Carel said before, especially in Latin America and Africa where we are clearly not the winners of the traditional financial system, where we have nothing to lose, our regulators should be the ones promoting this. Yah knows its like lets make sure that companies and entrepreneurs and projects in our region build the future of the internal value, let's be a key players in this, but it seems that sometimes the central authorities in the US or Europe or Japan or Australia are way more proactive to disrupt the financial system than we in Latin America and Africa, which is crazy. So completely agree with what you were saying Nadia. Alex what do you think about the major hurdles for massive adoption of this technology, and please say something about security.

Alex: Yah well I agree with Nadia in the sense that the lack of regulation impacts strongly the perception, the mainstream perception of crypto and actually when you are working with it- I mean where all excited, we see all the complex products, all these new tools that for a mainstream user or non-user, what do they see? In the news they see “Oh the news of the hack”, all those negative tools, and so that creates quite a negative perception so I think there is a lot of work to be done around trust and brand-trust where we have to find a way to show all the positives which is you know “Yes there are security concerns but actually when people put hundreds of millions of dollars in a few hours in an un-audited contract that’s- that’s not just a security- that means that they don’t care about security yah know like some users are taking really really high risks and its not all users yah know I think its important to distinguish this because actually there is a large amount of risks in smart contracts that cannot be fully managed because no matter how many audited there will always be a risk but with tools, with projects such as MakerDAO or Aave which have been running for months and years actually the risk- the contract is very battle tested and so that reduces the risk significantly and so I think it's really important to communicate more on that as well.

Gabriel: Yes I agree, but also I think as an ecosystem we need to keep in mind that when we say about reaching massive options is reaching a new layer of users that probably cannot afford losing any money no? So maybe for them the benefit of having very complex financial services is lower than the cost of losing a little bit of it so… it’s a big subject to discuss whether we should adjust security vs complexity of the solutions based on the different audiences that we reach when the ecosystem keeps on growing. Uh Carel what do you think are the main obstacles or hurdles?

Carel: I'll have to agree with Josh and Nadia and Alex I think that uh you know the technology is just running away, it's running away from everyone, definitely running away from what we consider the boring stuff like the U-X and so on. If you think about it we still to date don’t even have a proper UX for multi-signature, for bitcoin multi-signature and I mean that’s been around forever. But you know it's just moving at such a pace that you know the moment it's launched a couple months later it's old news and there is something better. And imagine now on-boarding someone new to this technology, imagine having to start off with explaining how bitcoin works and then moving over to etherium and how trust is now- it takes on a new form and now how you have to try and explain to them how consensus works and then finally you get to DeFi. That takes days. I mean it used to be a couple of hours maybe that discussion, now it literally takes days. So for someone to fully understand I think it seems to me at least as if the people who understand this technology just gets fewer and fewer because we are just completely running away, and that’s the problem with the regulators as well, I mean they have to start of right from the beginning now and try to understand this technology and then try to build laws around it, but you know that’s just a product of permissionless innovation, it's actually incredible as well because anyone can innovate, but remember if you want to regulate, you have to have a master’s degree. You can’t be a regulator if your not- don’t have a formal education, but if you want to innovate and build something then the world is yours, you can build whatever you want… that’s incredible actually, so you know I think it’s just this problem is just going to get bigger and bigger and bigger, the technology is gonna run away from those who are not on board it yet and it's gonna run away even faster from the regulators, so yeah it's definitely an issue that we should start taking care of I think.

Gabriel: Thanks Carel and that’s why it's so important to have more and more education, companies and products such as yours, because the technology is getting so complex that we need big professors teaching us about it. Max?

Max: I agree with all you, I think- uhh of course the usability and UX is very important, but I think it will be solved. Another hurdle is the scalability you know not only the speed but also the transaction cost, it lived outside this financial services traditional users you know? And we need to consider that. Thirdly of course the regulation, the innovation as Nadia told you is every 5 days you see a different amazing product so its moving faster than the regulations so it's something we need to be patient and explain and to work on that.

Gabriel: Yah I completely agree, so now I want to do an experiment, I want to- because I have a couple of questions that I want to ask you before we finish the panel that we have only a few minutes left, so I will ask you to summarize your question as much as you can, no more than 30 seconds. So a big part of DeFi is decentralization, and we haven’t spoken much about it, so I would like to start by you Max, why do you think decentralization is important in DeFi and open finance?

Max: First of all I think that decentralization is a process you know? Now you don’t find a project that is 100% decentralized and its ok you know, it's part of time but if you go on that process you know you reduce the risk yah know of just maybe the government or just shut– to shut down your product or too control the value that your product holds you know from users so I think that it's crucial to go on that direction but I think that the ecosystem, all the blockchain organizations are- have cleared that. It’s necessary and it's crucial.

Gabriel: Thank you, Carel, why decentralization is so important?

Carel: Decentralization is everything, uhh sorry max- haha

Max: Noo yeah I agree with you.

Carel: You know to me I think it's everything, it's what started this, if you have a single point of failure, it will fail, it will be shut down, uhhh I mean there are no two ways about it. What we are doing here, what we are creating is not in favor of the powers that be, and the only way that we can survive is by being decentralized.

Gabriel: Thank you. Alex?

Alex: Yah exactly as Carel put it, the only way to be unstoppable is to be decentralized, I mean it doesn’t have to be- I think its an iterative process so you can’t be fully decentralized at once because then that also carries its own share off risks that you have no control to adapt, to calibrate to the market or too the way the product is used but uh yah once you achieve decentralization and we've just released the keys of the Aave Protocol so you know this was a eleven month long process were we felt comfortable that everything was parameterized solidly and working, but yah once you are there you are unstoppable, now it's just ongoing forever the protocol so…

Gabriel: Yah congratulations, it’s a major milestone so well done. Nadia, what do you think about decentralization? Why is it so important?

Nadia: uh well like I said at the beginning I think it's important to have options so I love that in the space there are decentralized projects and like others like MakerDAO projects that are like depending on the blockchain, but I think it's also important like centralized products because there are people who need like uh more help and maybe they are not comfortable with all the responsibility that decentralization comes with. So I'm a big supporter of decentralization but I like different options, I think we are creating options and we have to have decentralized protocols, like centralized protocols like C-Fi and also a mix between both worlds and then people can choose whatever they want.

Gabriel: Thank you so much. Josh?

Josh: Yah I can recur that in the choices is one of the beautiful things that blockchain brings us. Of course with block chain technology you can decentralize as much as you possibly can technologically, but that isn’t going to meet the use cases and the preferences of some people who simply want a service that is managed by other people that is- the security element of it is in the hands of experts and of course there will always be points of failure that will always be weaknesses that people will exploit, but I think we have to realize that there are different customer segments that want different things, so decentralization is massively important and as a firm- as a company were really trying to push that in as many ways possible to the point where philosophically were completely happy if our decks outperforms our centralized exchange. Will it happen? Not in the near future because of the way that our centralized exchange functions and performs vs our decentralized exchange, but philosophically it would be a wonderful thing to happen. Now I think that the battle to decentralize more and more will happen fiercely over the course of the next few months in the year to come as well as people continue to build disintermediated decentralized products and that is very much in line with the core philosophy of blockchain so it’s great to see.

Gabriel: Thank you so much, well it's been an amazing panel. I think we all learned so much from all of you, thank you so much for sharing your time. Before we finish, I would like to go one more time around the clock, starting by you Josh, with some final words, tips to entrepreneurs around the world watching this and where they can contact you in case they want to learn more about your project or get in touch with yourselves.

Josh: Yah absolutely so I think the first message that we always say is be your own research, so if you’re looking into DeFi and you’re interested in investing and participating in some way, shape or form, do your own research, be an informed user. And if your comfortable there is a lot that you can learn from the Binance academy where we have a wealth of resources and articles about all things related to DeFi, we have a pretty diverse products weeks from tokens swap functionality for our what it called- binance bridge, we of course have our binance smart chain which has a number of products built on top of it, that are of course all listed on Binance as well. So were very much encourage people to come in and have a play, we have a test net as well that you can build on top off and actually really importantly we have a- as off a couple of weeks ago released a hundred million dollar fund, to fund development on the Binance smart chain so if you're new project, you’re an existing project and your looking to leverage the benefits that come with building on a relatively frictionless and cheap from a transaction perspective block chain we are a natural home for you and we will help incubate you and will of course help fund you, so that scenario that were really trying to stimulate developer participation, so if you’re interested, do it chat you can get in contact with me on twitter at @joshgoodbody im more or less on 24 hours a day unfortunately so do reach out, do ping us a message and were always always happy to have a conversation about ways that we can build together and work together.

Gabriel: Thank you so much Josh. Nadia? I think Nadia is frozen, so let’s go to Alex.

Alex: Yah so I want to tell everyone who is interested about blockchain and Defi now in the UK we just entered a lockdown so this is the perfect time you have hours to study, read about it, there is infinite amount of content so just make sure you find good curated resources because otherwise you can kind of get lost in it and yeah create a twitter account, look at what’s going on because a lot of information is shared on twitter so you can follow Aave on twitter for example to have all the updates, and when you feel ready join a hackathon because hackathons are where all the minds come together, and whichever your profile is gif lover, graphic designer, business you’ll find a team with different skills and you’ll learn in a weekend more than you have learned in months.

Gabriel: Absolutely, absolutely. Thank you Alex. Nadia, final words and where people can contact you if they want to learn more about Maker and Dai?

Nadia: Yah well what I have seen being in- working in Latin America is that any DeFi project around the world can find users in LATAM so I'm inviting all you DeFi projects all around the world to come to LATAM and think about a use case for Latin America people because you will find users that are not just the small crypto twitter audience but a more brother audience because, we need these kind of products here and also what I'm seeing is DeFi, because of this usability thing that we talk before, DeFi is like a vacuum to me, so im inviting like startups or tech companies here in Latam who understand the audience and understand the needs of we in latin America to create this new interfaces that can connect and integrate with this awesome Defi world in the back, and create new great products and services. And how to contact me well you can find us on twitter in the maker account and also you can write me Nadia@MakerDAO.com I’m always welcome to help you come into this Defi ecosystem.

Gabriel: Thank you so much, Nadia. Carel?

Carel: Yah you know if you google blockchain and crypto related terms you’ll find that there is a lot of miss-information out there and a lot of scams, and- so its difficult to find good quality information if you want to educate yourself, of course we know that everyone on this panel, and I know the binance academy is doing excellent work and so on… but um you know that also where we come in and we provide that education more in person than online so- we do it online of course but in person and um yah so please if you want to know more about this- well the best way to learn first of all is to actually use it. If you want to learn about Defi go get some ether, go stake it, get yourself some Dai on the other side and go on uni-swap and swap, swap your assets for another and actually use it and if you are technically- if you are a techy- and um programme a flash learn, and actually use- that’s the best way to learn. Then the second best way is to actually attend a class and get yourself educated so yah I do encourage everyone to do it, be part of the future, take the power in your hands and take this ride along with us. I will post the contact details now, it’s the blockchain academy in south Africa, there is one in America as well, but um we are the blockchainacademy.co.za/, that’s our url and we’re on all the social media as well.

Gabriel: Thank you so much Carel. Max?

Max: Yah I like the comment from Carel the best way to learn is use products, try them, if you have some satoshis and you want to try different bitcoin the best way is to use it and we are ready to support you, you can contact us, I share our contacts, our twitter accounts, we are ready to help you and on the other hand if you have a product and want to build DeFi solution, same thing we help developers and projects in every step, from the idea, to helping with the marketing, connecting with different projects to integrate with them and also with funding. So you have our twitter accounts, you can reach us and we are happy to help you.

Gabriel: Thank you so much Max and I think this final point about interoperability that you were saying I think is very important for the Defi open finance as a whole, the more the projects get connected, the more the blockchains are intertwined, the more secure and antifragile the whole ecosystem builds- I'm a big fan of all your projects, big fan of Maker integrating on RSK Dai as well so thank you so much Nadia and the whole team and really looking forward to seeing also Aave on RSK soon hopefully. So thank you so much all of you, for teaching us so much about Defi and thank you for your time.

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