RIF Expert Panel Transcript: What is Defi and why is it important?

3 August, 2020

RIF recently hosted a panel discussion on the topic What is Defi and why is it important? Speakers include: Alejandro Narancio, PO RIF Payments; Manuel Ferrari, Co-Founder of Money on Chain; Brian Prillick, Founder and Managing Director CTF Capital; Mariano Di Pietrantonio, Senior Marketing Manager Maker DAO Latin America and Spain.

You can watch the video by visiting youtube.com/RSKsmart

Gabriel Kurman: Hello everyone. We’re very excited today as we have a very interesting panel on DeFi, the new decentralized finance universe that is opening right now. Many of us don’t quite understand it well so we have our experts today and hopefully we will have a wonderful conversation starting from the basics and covering the challenges and opportunities coming. Ale, if you would like to start with your introduction.

Alejandro Narancio: Hi guys, I’m Ale Narancio, the Product Owner of RIF Payments. In RIF we are trying to build the infrastructure for all the different projects, dApps and ecosystems to build the new DeFi system, from identity, payments, storage and so on. We are working very hard to help other projects in the ecosystem to grow and to create fantastic solutions.

Manuel Ferrari: I’m Manu Ferrari, co-founder of Money on Chain. We are working on building a protocol to enable Bitcoin to go mainstream. Enable regular people to use Bitcoin in a different way, for example, creating the first stablecoin that uses Bitcoin as collateral and enabling tokens like BitPRO that allows Bitcoin holders to earn more Bitcoins with a DeFi solution or doing leveraged operations with our token BTCX. Mainly it enables bitcoin to be used in different ways, that is what we are working on.

Brian Prillick: Hi thanks for letting me be here. I’m Brian Prillick, founder and Managing Director of CTF Capital. We are a crypto hedge fund focused exclusively in the blockchain industry. We’re active traders in the DeFi space. We’re currently working as market makers for decentralized exchanges such as UIDX, Kyber Network and Zero-x. Were also doing liquidity providing to different DeFi applications, we’re doing options for token sets on the rebalancing and doing some liquidations on DYDX and Compound currently. And also currently investigating other DeFi applications to work in the integrations.

Mariano Di Pietrantonio: Hi, thanks for the invite. I’m Marion Del Antonio. I’m the marketing manager for Maker Dao Foundation for Latin America and Spain. What I do in the Maker Dao Foundation, mostly is about partnerships communications and trying to find use cases for Dao in the region.

Gabriel: Diving right into the subject, I think it could be interesting for the audience, let’s keep in mind maybe part of the audience is learning about DeFi for the first time, in your own words what is DeFi and why is it important or relevant right now?

Alejandro: For me DeFi is, we have different tools, could be lending scoring, the idea of Defi is to create these tools using decentralized technology particularly blockchain is the one we’re focused on here. One question that always the people ask me for example, what is the difference with Fintech? For me fintech is like startups or companies that generally not always try to get a shiny very small part of the traditional financial system or layer of it, and try to make an improvement or make it better. DeFi is a very new financial system, a completely new financial system that is fairer, more transparent, more accessible and has a very big focus on reducing the costs of the intermediaries or improve mainly the security and privacy of the people using it. For me that is the whole big definition.

Gabriel: Thanks Ale, very interesting definition of the difference between fintech and DeFi.

Manuel: From my point of view, the first DeFi applications and solutions is as it says decentralized finance. The most important thing is not to have a central party in the middle. I initially started my work life in banks, you always have a central party in a bank. The first DeFi solution is clearly for me Bitcoin. It’s the first solution that enables peer-to-peer transfers of value. And what is coming now to the innovation now, first done in Ethereum, is to enable much more products, concepts that normally live in other worlds that I call the traditional finance world and fintech, bring them to crypto. Using blockchain tech and smart contracts that are much more flexible to program then Bitcoin that has its limitations to do innovation. Being able to replicate all these products that in Fintech or in traditional finance exists. The main point is not to require a counterparty in the middle and I would say decentralized finance is mainly that, that’s how I normally define it. If there is someone that can change the rules, that’s first maybe the question you want to ask to define if this is finance or not. If there’s not someone centralized that can change the rules and decide how you work, then it is more DeFi.

Brian: Adding to what Alejandro and Manuel said, I think DeFi is also known as open finance because everything is open source, transparent, anybody can audit, see how the code is. I think it’s basically is a way to reduce intermediaries, only interacting with smart contracts without any restrictions that traditional finance has in terms of minimum volumes you can work with certain countries restrictions. Basically the way to have a more direct, open, decentralized financial system. Obviously it’s got its current growing issues and other issues we will probably dive in to later but I would say that’s for me is why it’s so important in this ecosystem.

Gabriel: Mariano, having your perspective on this is super interesting because Maker Dao has been one of the pioneer projects in the space and it’s right in the center of the whole revolution.

Mariano: I beg your pardon if my answer sounds more poetic than technical but I think for example DeFi and much more linked to the side as Brian said open finance, right. Let’s imagine everyone in the world talks the same language, in a situation where you can get together with any person in the world to start working, to start creating things with a technology that is open source, verifiable, immutable, censorship resistance, and all the things that we know about cryptocurrencies. In that sense, I would like to make an exercise of imagination seeing all the things that we could do starting from that point. Because right now what DeFi is offering us, in five minutes any developer in the world can download an SDK and start developing financial services with value in it. We don’t have to depend on legacy financial institutions or some sort of regulation. Some regulations are good but we know others are not so good to foster technology. What DeFi is doing is putting a normal station as a starting point to build new things.

Gabriel: I love this poetic definition. And I think this is the underlying revolution we all see underneath these financial service tools that we are building. Now for the audience that are getting used to this, now there are new innovative DeFi projects we don’t know if they’re needed or not popping up every single day. For those of us that have been in the space for quite some time, we’ve seen these before, the hype and bust cycles. It happened two years ago with the ICOs. This seems very different but at the same time we can say they have some similar characteristics. Where do you think we are in terms of the DeFi revolution, are we in the early beginnings, beginning of a bubble, are we seeing mature solutions that are ready for mass adoption?

Alejandro: It’s an interesting comparison with the ICOs. I think ICOs were a very good thing that were used in a very bad way, so it has a bad reputation but actually it was a good idea. I think it’s a very different thing DeFi than ICOs and I think we are in the very early stages. I agree with what Mariano said about right now any developer can download all the tools and start to build all their applications but from my point of view, we were focused on building a very strong secure technology but all the applications that you can create right now, for the normal user it’s not that easy to use. I always make the comparison, if you go to the home page of amazon, I will not see the same page that you guys see because amazon made a custom home page for me. Behind the scenes there is a lot of very very strong and very difficult technology that is data analysis, AI, there are a lot of models that analyze how I use the mouse, how I type, how the people my same age buy ect. Ect. We are not at that stage right now. In order to use the defi applications you have to be a techy guy right now.

Right now at least in RIF we are trying to create the tools to allow developers to create secure applications but focusing on the user experience of the normal user, the ones that really need this new financial system. So they will not need to understand what is a metamask, what is a seed, what is a private key ect. Ect. So that should be something that the architect of the solution will take care of. “I have to use this and this to make it more secure. I need decentralized storage, I need decentralized identity, I need an option for payments or whatever, but the user should not have to deal with all these complexities, and we are far away from that, but we are working hard on that. I think we're in a very early stage, we focus on creating a very strong technology, very decentralized that is difficult to create technology, very secure, focused on privacy, that has a cost, but right now we are focused on how to make it mainstream. That’s my opinion.

Gabriel: I’m very excited to see the new generations coming to the stage Manu.

Manu: Yesterday my kid told me she needed to learn what is Bitcoin, because I’m always talking about Bitcoin. As our kids are digital natives, I think in the future new kids are going to be Bitcoin or crypto natives. My older kid already is using the Defiant wallet. I think regarding user adoption we are really very in the early years, I can tell you a story from a couple minutes ago I was lunching with my wife and she told me, we’re in lockdown and she’s paying a doctor for something and the doctor told her “I need to be paid in mercado pago” everybody here knows what is mercado pago and I told her more or less as a joke, more or less real, because mercado pago is expensive for the 800 pesos she needed to pay. I told her we can pay with dollar on chain and she started laughing, saying “I’d have to explain what is Bitcoin.” The user adoption is still very very small. We need one or two years until these tools are more well known even.

Gabriel: Are you in agreement with Ale that the infrastructure level is much more robust but the issue is now the user adoption?

Manu: If you try and you want to use it, you can use it. But it’s not for John Doe to go and use and is easy to use, it’s not like using Fintech applications that are doing amazing things. When I see services again in the fintech industry like mercado paga going down the bridges of people adopting new ways to use financial tools, it’s a reality. There's millions of people using for example mercado pago in LATM. Crypto adoption is not being used by Bitcoin and ethereum and cryptocurrencies, not to talk about DeFi which is the next step, it’s not millions it’s maybe thousands. Really we need to cover a lot of things to make user adoption easier.

Gabriel: Brian, you have a very interesting perspective because you are very much into the markets, market making, how the exchanges work, and I guess you can add that vision compared to the traditional financial system. And tools that traders could have when dealing with forex and traditional equities in this ecosystem.

Brian: Yes I totally agree. Regarding your first question, let’s remember that blockchain technology is less than ten years old it’s a very new technology. It has been and is mainly grown by speculators in the market playing with the potential this technology has. The last bubble we saw was in late 2017 with the ICO mania, people were raising funds without a project or product in place, nothing live. Just raising funds with the promise of eventually building something and that led to several bad actors to just raise funds and later never develop something. In the financial space, the financial is the first use case blockchain technology has and in DeFi you can see that projects are currently live and people are using it. It’s not just a cash grab “I’ll raise money just to have something here”, but I already have it I will reward users for using them. And that has been seen by certain metrics we’re currently looking at, that is the actual value locked in the smart contracts that has grown exponentially. I remember early this year defi reached the milestone of one billion dollars. After the march craze it took a little longer to regain it but it has consistently reached 2 billion, 3 billion and recently 4 billion in record time. That’s quite impressive because that’s people actually using these applications. Obviously it’s still very new but the potential and the initial use case and the initial growth is already there.

Regarding traditional finance with for example our market making activities our main challenge has been working with infrastructure. We depend on certain block times, perhaps for high frequency traders they are used to generating thousands of trades per second, here you have to use block time to confirm each of the transactions and the operations or trades. That takes me 12 to 13 seconds on average and not only that, to be efficient you have to have a decentralized infrastructure in place to validate your own transactions. So that has led to discovering and failing both, experimenting with all types of infrastructure of nodes distributed geographically to be validated more fast to also prevent from malicious actors trying to keep your own transactions. I think that coming from traditional finance to decentralized finance, it's very important to have quite important infrastructure in place.

Mariano: For this I would like to split it in two things: we have the economic side of things and the technological side of things. In terms of the economic side, I would say that this bubble is much more related to human nature so we will see these bubble things boom and bust like a million times as we know in the traditional economy. And a good thing about that is when the purge comes in the bust the good services and the good platform are the ones people use are the ones that survive, that is the concept of the economic side of things. From the technological side of things I would say we are very very early. As ale said, we are starting to develop all these standards, all the things that then the developers will use to communicate and make possible the abstraction of difficult to use tools.

Now what I do think in terms of how DeFi could relate to other technologies, I am the one that thinks it's not going to replace anything. In the technology world we are still using mainframe systems in the bank infrastructure, that’s very old technology. What we have to think in this case, is how defi could be one upper layer of the whole financial system, how defi will interact with the traditional financial system. I think that will be like the singularity moment in which banks, fintechs, any other service that’s interacting with some form of value, we’ll see DeFi. And I think that it will be like the explosion moment for what we are going to see as Manuel saya, John Do using some sort of I don’t know, maybe credit, an interest rate platform, something like that. But probably John Doe won’t know about it, I think that is the magic moment, when we have a lot of people using a technology that they don’t know of. For example my partner doesn’t know what is that IMA particle that you use everyday with the messenger. That kind of thing. We’re really immersed in this technology, it’s really common to talk about block times, particles and that kind of thing, but probably my kid won’t know about it and will be using 100% of that technology.

Ale: I agree with Mariano that we should create bridges with the traditional financial system. In general the people say we hate traditional finance, I don’t, I actually think we don’t. I think it’s necessary but I don’t see DeFi as an outer layer of the traditional financial system. I see at the end, it will be a much more complex system where there is something that is fully DeFi, traditional, and something in the middle. And some things in the outer layer will just expand the traditional financial system but other things will connect both financial systems. So I think it will be a more complex system at the end, or I hope it will be like that.

Manu: I think it is as Mariano said and we were talking about John Doe being able to use it, I feel exactly the same as when I was in the early early 90’s using the internet in my home and trying to explain to my father or my grandmother that there is an opportunity, a whole new world here to use it. I think the problem is exactly the same, there is a huge opportunity to use new things, infrastructure is not ready, user adoption tools are not ready, there is a lot of bad actors working here as in the early stages of the internet. The internet now is much more secure than 20 years ago, of course, you can browse and it’s much more secure. And with DeFi applications, there is no way to rank if it’s a sound solution or if it could be a scam and I feel it’s the same call to the gaps we have with the internet. I’m rephrasing Diegito “this is the internet of money” or replacing Andreas “the value of the internet of money.” Now we are dealing not with information, but with money. The challenge is to close the gap and a technological gap, put all this standard in place for people to use it without problems and feel secure that they can trust this, as happened with the internet.

Gabriel: Listening to you guys I am thinking two things. One, that actually what happened in the last four months has sped up completely the whole process. I was listening to Mariano saying that when traditional banks adopt or interact with this technology and a couple of days ago the US has allowed commercial banks to handle crypto. A year ago, that was something for the next decade. The other thing I was thinking the other day is that we are seeing the beginning of a new cold war between the US and China in the financial system so probably DeFi will be the bridge that will bundle these financial systems of the internet broken into two. Whether it’s going to be 5G, whether it’s going to be Facebook versus Wechat money, we know blockchain technology really works when people or entities don’t trust each other. A couple of years ago it was more cypherpunks not trusting the system and banks, now it’s the two major powers in the world not trusting each other. I think DeFi could play a role there in the future that maybe none of us were expecting.

Mariano: I totally agree with that. I think that blockchain technology and cryptocurrency has separated the states from money and that will not divide us but will unite us. Not just China and the US but everyone with everybody. Traditional finance today can’t connect what crypto is going to do, definitely. And I think that they are going to use the DeFi infrastructure to connect us.

Manuel: I agree. The relation, how we can compare at the moment cryptocurrency and Bitcoin as the revolution of church and state 400 years ago when there was a separation of the church and state. Now, there is a big revolution that will enable the separation of money from the state. That’s called DeFi. The first DeFi tool is Bitcoin and there are many new innovations that are enabling people to have ownership of their money and have freedom for using it. What we are building is tools for that kind of freedom and it’s a great moment and I’m very proud that we came together to build this because it’s something that’s going to change humanity. Religion was one of the things that have sculpted our culture and humanity. Money is something that, if you studied history, humans have been using money before they learned to read. What we are doing is a revolution with money and I think DeFi is enabling a technology which is the new money which is Bitcoin, to grow and expand and to be used in many many different ways. Sorry I am getting a bit emotional when talking about this.

Mariano: In line with what you said in regards to how you said the world is dividing I would say. The other day I tweeted that for me one of the most important things for the next 25 years would be like adversarial thinking sign and game theory because we will rely on those things if the world is eventually going to divide in terms of 5g internet, financial systems, let’s say with the money we are going to use to transact with exports and imports that kind of thing, understanding thinking would be one of the most important things we need to develop. And I think as you said when two parties don’t trust each other and we need to use trust, we will have to develop this right? And this field is fairly new for us. Let’s remember game theory is not very old in the place of mathematics and economics so we should push those developments to start making better tools and very obviously financial tools and platforms if this dividing thing is going to happen.

Gabriel: I was talking to a friend the other day, we’ve all seen black mirror. There are multiple scenarios that could come out of this current situation and many of them are not better than the one we are in now so one of the reasons why I’m so excited about blockchain technology and DeFi solution is I think they could lead us to something better but it’s not certain so we really need to work on it and need to make it right and make sure we invite good actors and build in the right way.

Mariano: That is the exact thing. We need to build this as a redundancy tool of the financial system too because right now, the financial system doesn’t have that redundancy. So, I work 10 years in informatics. Everytime I work on a new project and see one of the things you have to develop, ok how is the system redundancy, how resilient is the system? I think that we are working exactly on that.

Gabriel: Absolutely. Many Bitcoiners would completely agree with you, they feel more secure with what’s going on in the world because they see bitcoin as a fall back of a store of value if the dollar and the euro collapse.

Manuel: I agree completely. I wouldn’t think how I would feel if I didn’t learn about Bitcoin and cryptocurrencies a couple of years ago in actual context. I really can’t believe... we are all doing a huge teaching spreading the word about the importance of learning about bitcoin and these technologies because I think it’s something that is good for humanity. Especially in countries where you don’t have great institutions, there is a way to protect yourself from bad actors.

Gabriel: There are not many financial services panels in the world where you talk and people get so emotional and so philosophical, I think it’s deeply rooted into the code somehow. Probably people listening to this panel would say “ok, but I’m confused what role Bitcoin could have or ethereum could have on the future of DeFi and these financial systems” and I know all of us have worked really hard in the last couple of years trying to bring the communities together, trying to focus on changing the world and the life of millions of users. But there’s still an interesting analysis on which of the solutions or use cases you expect to be built on one blockchain or another or there is a scenario where one takes all or multiple different infrastructure layers working parallel. Ale, what do you think about that?

Alejandro: I think at the end multiple blockchains will co-exist, I think there is space. Right now there is space for multiple, not even just Bitcoin or ethereum but multiple more. At this point I think even though it's not perfect, bitcoin is the most secure, the most decentralized, the biggest one ect. But if we want to support complete financial systems we need to support different use cases and as Brian said for example, there is some limitations even in Bitcoin and ethereum for some particular use cases. So let’s say some examples, like in bitcoin we can say bitcoin supports around 8 to 10 transactions per second. You have peaks of 16, 18 but around 10transactiobs per second. And confirmation time, i.e the time I have to wait from when I send a transaction and that transaction cannot be reverted for sure, it’s immutable. Before that time, a transaction can be reverted. It’s not normal but someone can do it. We had to wait in the case of bitcoin to be sure we have to wait around four confirmations, that is around 30 to 40 minutes. So in Ethereum or RSK, it is similar. We have around 100 transactions per second and you have to wait a few minutes to have the confirmation written. What is the issue? If I want to send $100,000 to China I don’t have problems to wait one hour because in the traditional financial system it takes 2 days. There is a 3rd option I forgot to mention which is the cost of the transaction. In the case of Bitcoin and ethereum, in the public blockchains this cost varies based on the overhead of the network. So you can pay cents of dollars even 1 dollar or whatever. Again, to send $100,000 to China I don’t care to pay $10 because in the traditional financial system, it costs me 100’s of dollars. But, if I want to support microtransactions which are also in the DeFi ecosystem, in a traditional financial system like going to the grocery store and buying a cookie I don’t want to wait 30 minutes for that and I don’t want to pay more in fees then the cost of the item. For that reason we need, like what Brian said, a better infrastructure. For that all the different blockchains are created, like alt chain payment solutions. For example in bitcoin lightning network, in ethereum it’s raiden, in rsk it’s lumino which allows to have thousands of transactions per second with very very low fees, in some cases zero fees and confirmation times of milliseconds. How can we achieve this? We sacrifice the decentralization to some point.

To answer this question which will win, I think multiple blockchains will coexist. Right now the more secure and decentralized will be successful, and that is bitcoin. That’s why it’s so important for the DeFi ecosystem. Mariano, we have in ethereum a long conversation of ethereum 1 and ethereum 2, there are a lot of changes in the consensus. The consensus for those who don't know is the rules all the platforms should follow, how the blocks are created, how they are accepted or not. And in the case of ethereum 2 will change proof of work to proof of stake, also allow sharding ect ect. I want to know which is the position of Maker Dao about this transition, what is their opinion on Ethereum 2.0?

Mariano: First, I will answer Gaku’s question and I think I have a controversial opinion for some bitcoin maximalists about this. In which I think Bitcoin for me is the highest form of private property ever created. And to think of bitcoin as money is the most boring thing ever. Money is boring, cash is trash. So trying to peg bitcoin to some sort of money for me is completely useless. Why? Because bitcoin is the highest form of private property ever created. So taking that into consideration, and going on the other hand we have ethereum. And I think ethereum as a cryptocurrency and it’s network, is the highest form of coordination for people. We are talking about defi right now, it could be this and maybe other fields that may come up in several years on top of defi we don’t know. But I see that and, I know that it is kind of a cliche to say that bitcoin as gold and ethereum as oil, but for me it is totally in that way. Oil today allows for humans to coordinate. And I think that most people know that the best way to store value is Bitcoin. So if you want to create new services, if you want to create new files, if you want to create points on which people should coordinate, you should go with a network that probably is not bitcoin as a cryptocurrency. Probably what you will be doing is all the work you are coordinating in other networks and other chains, should end up going to bitcoin. This is not new, we’ve all seen in this boom bust cycle altcoins that most of the people say “ok I’m using altcoins to farm Bitcoin”. And that could be one of the cases, the thing is that we live in an environment where we have people with strong opinions and they want to make their opinions into a thing, and that’s another thing for me.

I’m trying to see all things as a spectrum and for me, I know yes Bitcoin is the all decentralized 100% pure asset but on the other hand I don’t see that ethereum could be such a bad thing because it is pre-mined, for example. I’m kind of in the middle and I think that probably we will see some blockchains that are specialised to do a kind of work, we will see other ones that may be for logistics with a mix of private and public and that’s the thing, what I really love is to be surprised at which end the new technology is being built. Let’s say RSK, let’s say Ethereum, Let’s say bitcoin, whatever, except Trump. Whatever. But that’s the thing, if we all know that bitcoin is the highest form of private property and we all know that right now ethereum is the most used network in terms of coordination but we don’t have to see that thing as a nemesis thing, because intelligent people are saying this “how can I sense this opportunity?” For example Brian, I know that he’s like “every blockchain participated in all this financial services.” For me that is the way to create new things.

Gabriel: Probably what makes bitcoin so strong is it’s lack of coordination because bitcoin governance is the impossible coordination and that makes it unstoppable.

Mariano: Totally! Bitcoin is a protodao. And to answer the other question about what the foundation thinks of the transition, we are pretty much blockchain agnostic. I mean, we are in fact pushing for bridges, we are thinking in terms of stability and not networks because the foundation and pretty much for the NKR token holders, the product is stability. It’s not a token, it’s not a technology, it’s not a layer one or layer 2 stability. If you go to the Maker Dao following where all the governance flow is happening it’s all about stability that’s the thing. We pretty much welcome all blockchain technologies.

Gabriel: In terms of the technological challenges of ethereum moving from proof of work to proof of stake how are you guys dealing with this? Is this a concern?

Mariano: The concern is there obviously. As most people say on Twitter, changing from v1 to v2 is like changing the engine of a plane in the middle of a flight. We don’t really know how all the transition is going to work because we can say something about how it’s going to be, but in the middle of the implementation we will say there are different things to be made, there are fixes and that kind of thing. And I mean yes, it’s kind of difficult to foresee what is going to happen but I think the good side of it is that there are a lot of developers and a big community to start working on that.

Gabriel: Your current strategy as a community is to be presenting as many blockchain as possible and have as many engines as possible so when you have to change the main one the thing keeps on going?

Mariano: Probably the other ones should adapt in that way right, and that is why every bridge needs to go under a heavy audit.That’s why we are building redundancy technology for the financial system.

Brian: Ethereum or Bitcoin? That’s a very interesting question I receive quite often actually. I actually love both. For both there are very good things, very negative things as well, or at least building blocks that have to be resolved but both communities are actually great and as Mariano just said recently, I talk with a lot of DeFi applications or decentralized applications that are currently working on the ethereum blockchain and they are blockchain agnostic, they are currently there because most of the users or transactions or infrastructure was built there but if it’s tomorrow Bitcoin, ethereum or whatever new blockchain, it would be pretty much the same. Also, what I’ve seen lately is with the rise of stablecoins, that is something working on different blockchains, brings the best of the world into crypto because you can interact with the rest of the world in crypto without working on the volatility we are used to having. Without having to pass through traditional financial markets and being able to operate in different other places.

And also, in terms of future, referring to what Manuel said, we’re in like the early 90’s in the internet boom. I think there’s going to be several blockchains and there actually has been several. But I think the interconnectivity and the interoperability between these blockchains is going to be very important. I don’t see that in the very short term but I’m already currently seeing use cases like Bitcoin on ethereum, maker dao accepts bitcoin, rsk with the bridge to ethereum and to other blockchains, and as before when the internet was starting, you can see with the internet we don’t have 30, 40 different versions, we have one internet now which is connected between several different types of networks. I think that something similar is going to happen in the long run. That’s my vision long term.

Manuel: I think regarding bitcoin and ethereum are two, firstly I’m not a tech guy so I’m going to talk a lot about something that I will not go deeply, but I understand that there are two different technologies completely built for different use cases. Bitcoin I understand for being built as digital gold to be a reserve of value, and as Mariano said I think most people think it’s the best cryptocurrency as a reserve of value. And I understand ethereum was built to initially to enable different things, especially to implement smart contracts, and I was not in the moment ethereum was money as people said it’s money, and it is money because it has value, but I don’t think in the long term it’s the best collateral, the best money to build financial products with it. That’s why for building financial products you use bitcoin, so ethereum was a tool, the money was bitcoin and when we built money on chain we found RSK. Luckily RSK has this tool that we understood was a better tool, much more secure, much less cost to operate, we understand it has many advantages and we have this which is the best collateral. That’s regarding bitcoin and ethereum, I also understand that ethereum has a huge advantage that is the first mover advantage. We can’t deny that all, or most, of the DeFi startups and new projects are built on ethereum because they were there before. But as Brian was saying and it's a reality, there are many other blockchains right now and it's something that many more are going to come as my partner Max always says, the end user could not care which blockchain it is, the important thing is going to be the financial model behind it. Of course there are some security concerns in the long term you will see that some blockchains fail so maybe it is going to be one or two or you will have adopters that are going to use several blockchains that are going to be interconnected.

I think regarding the smart contracts, there are several options. The store of value, the best option is bitcoin. It’s two different things. I have to say something regarding what Brian said about stablecoins, I think it’s the cornerstone of DeFi because people are not used to trade and to use finance applications with the volatility of Bitcoin or the volatility of whatever cryptocurrency you choose. I think the big innovation now being done initially by maker dao, having the first cryptocurrency collateralized stablecoin. I’m quite happy Maker Dao is using Bitcoin also as collateral, but having bitcoin as collateral will enable you to use some money to build a new financial system to enable the use of bitcoin to grow exponentially. Up to now the use cases for bitcoin have been store of value long term, high volatility so it’s mainly for speculators and maybe for people who as Diegito always says, are very lucky that we can store value for a couple of years and we see the profits. Or maybe you can use it but it's not efficient because of the volatility. The stablecoin piece for enabling the growth of DeFi is huge and now we are starting to see stablecoins using the best asset which is Bitcoin as collateral. I think it will enable bitcoin and deFi to grow exponentially.

Gabriel: We have one minute for final comments, let’s try and focus on the audience which is new to DeFi and to this, if they want to learn more any tips on where to go and search for this information.

Alejandro: I would recommend to learn all the things we are building go to the developer network there you can find how to start a node, how to set up a wallet, how to use Lumino for off chain payment solutions, how to use Identity solutions, you can start learning all the things that we are building. Go to the channels on Twitter, it’s very active in the ecosystem. You can tag us and we can answer and have discussions over there but just before you start to invest or play with these technologies, please invest a lot of time in learning at this stage so go to these sources.

Brain: For initial users, obviously it’s good to know about wallets, crypto, stablecoins, that’s the abc basics for DeFi. For a little bit more crypto users that already have a little more experience, I would definitely recommend to start looking out into different lending protocols, we have here Maker Dao and Money on Chain that are doing things better where you could just interact with your wallet to their smart contract and generate the passive investment, no minimum required just instead of having those crypto assets in your wallet. Just a recommendation, check out who you are going to interact with, that the smart contract has been audited in the past by respectable players and that would be my recommendation. In terms of what’s next, Mariano mentioned Daos, decentralized autonomous organisations, that’s something that is very interesting, we’re taking a very detailed look at it and when Daos meet DeFi a new financial structure is going to be met, I think that’s quite in the future as well.

Mariano: I would say that first of all, you have just what is your motivation to learn Because one of the things people told me when they get introduced is, they say “my god, there’s a lot of things to read to learn, I don’t know if I’ve lost count”, a million things. So probably the best thing is learn what motivates each of you to be here, and then you can set different directions. If you want to just learn about the technology of it I would recommend probably Medium is the best place to go because you have a lot of articles and posts there about different currencies and for real time learning, Twitter for me and Telegram groups are the best tools ever. If I want to check something quickly, I’m going to Telegram. A Telegram group is like a Twitter side chain, you can check whatever in real time.

Manuel: I would say to start, for people who are outside Bitcoin and cryptocurrency wherever, I would say for in English, the best teacher is Andreas Antonopoulos I would recommend everything from him. He’s not maximalist, really I thought I was not maximalist, I try not to be. Andrea is a very well known non maximalist, he has a very open mind. And I think the first thing that I learnt when I was getting into this world is I reviewed the concept of money, in that sense it’s better if you want to go into DeFi you first need to review what is money. For me the best source for understanding what is money is, several obviously, Nick Szabo, he has a blog, it’s amazing all the research and how he writes about the origin of money. Obviously we have a Telegram group, a webpage, we are building DeFi for Bitcoin, if you want to know what we are doing you can learn there. And Tech with Catalina, she has a channel there in Spanish but also in English, she is covering a lot of all the DeFi movement for Bitcoin in her channel. Especially for Spanish communities, but also in English is building a lot of content.

Gabriel: Thank you very much, I have learnt a lot, I hope the audience as well.

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