# Why is DeFi still a sandbox, and how do we integrate it into TradFi - Anton Mozghovoi | Mover

- Channel: [ETH Belgrade Community](https://streameth.org/eth-belgrade-community)
- Date: 2023-10-07
- Duration: 32:31
- Watch: https://streameth.org/watch/yt-YYwALhZxEaE
- YouTube: https://www.youtube.com/watch?v=YYwALhZxEaE

## Transcript

thank you sir hello guys um it's the first day end of the day I guess everybody is very excited to have some very deep conversation about how smart contracts work and everything but uh that's not that type of a you know speech so what I wanted to talk about is how many of you guys get your salaries on chain how many of you guys are paid on chain okay and how many guys of you off-ramp sometimes yeah no wonder it's the same amount of people obviously but but here's the thing I have a thesis that D5 is still a Sandbox in the past couple of years um we as an industry and we as a community we were able to recreate and rebuild all of the major traditional Finance Primitives from the ground up we started creating New Primitives that have not existed before and while we were all expecting for this you know aha moment where all right so where's that next billion of people coming up where are all these people uh you know who are all these normies and how do we turn everyone into normies that you just use the tech and it just works and um I would correct my thesis you know defies mostly a Sandbox and here's the reason have you ever considered or thinking about well why you know on and off ramps are like garbage it's just complicated it's very dumb you can go and change you can take a loan in 15 seconds you can collateralize your assets you can have yield and yielding assets that you can also use as collaterals you can stream your money in the real time you can you know basically assign value to your value as gpegs and you know get something out of it but when it comes to paying for things in the real world all of a sudden all of that utility that we have created it somehow doesn't make sense all your valueless and you know invaluable gpags out there you know somehow your landlord doesn't accept them so what you do is well you have the off-ramp and well let's take a look into how on ramping and off-ramping works right now so what do you do first you have to have well you have to be banked right you have to have a bank account you have to have a card card in in Europe in Northern America that's the most popular means of using your money as The Last Mile connectivity so you can have your money in your bank account but if you want to spend it if you want to buy that coffee what happens is you actually tap your card right so cards is the most popular means of using your money now when you want to off-ramp or on-ramp in this case what do you do so you have your bank account the next thing you do is while you have to open an account in exchange what do you do well you have to wire your crypto and I specifically use this term as wire because it's exactly the same things you're wiring you know money to your landlord you know by sepa by Swift what happens then well what you have to do is uh well that depends on Exchange what kind of tokens they support what networks they support so what you have to do is you have to make sure that the token that you're wiring to exchange is supported there and they have the liquidity and they have the pool and they can actually exchange it and swap it to something that you know you can exit from um if you are on ramping in this case well what you have to do is well you have to not forget about the gas on the native token so if you want to withdraw your money to your eoa wallet you have to have that gas because otherwise if you have some usdc's in your empty wallet the transaction is somehow you know it's not going to go through and you know calling italic just not going to help it then what you need to do right is you need to send that gas as well as well as all of the tokens to your well to your eoa wallet the wallet that you custom so self-custody wallets from that exchange wallet and I hope you guys do you guys do you even care about the custody non-custody how many of you guys care about that okay majority of people so there's a big difference right between who owns the keys how the key Zone how the key is generated how they're stored but let's say you somehow you know want to participate in our little sandbox and Define so you send that money you send the tokens you send the gas token for that Network where you want to execute your transactions on you send them to the wallet then what do you do well then you have some magic dab that done that does some magic things because well you still need the interface how many of you guys on a daily basis are just like you know somehow interact directly with contracts whether you know say other scan or actually directly Unchained how many of you guys one person that's two three okay that four that that looks like a bit of bidding um but not many people right so we normal people well we use interfaces and we ask developers to build those interfaces so that we can conveniently use whatever the magic thing that I've built so then you need to somehow connect your wallet to that Dev so that the dab can prepare and bundle that transaction and send it you know basically for your wallet to execute and for you to sign it and all of that is just it's just complicated it's just annoying we get used to it if you guys have been in the space for a little while you get used to this shitty experience and it's shitty for off-ramping as well it's exactly the same thing but you know in the reverse order you have to connect your wallet you go to this dab you click withdraw you get your money in your wallet and then you send it to an exchange and then you do something and then somehow then you can actually spend it in the real world the whole point of All of Me ranting about all of this is what if we cut all of that process what if we just say why cannot I connect my wallet to transact both on chain and to transact off chain and that's the whole point and that's the whole thing that I'm trying to say is that what I believe until we are able to do that our D5 little sandbox is still and will still remain as the sandbox and in order to cut it and in order for people to transact easily and to have all of these amazing opportunities imagine getting okay I did something wrong imagine getting your salary paid to your account in real time where you sit on them well you sit somewhere at home or you sit in the coffee shop or somewhere in the you know in the workspace so you work there for two hours you had some business calls there and then all of a sudden you know you have some Fiat that you can spend now how many of you guys have been in the industry since Maybe 2016-17 same people right do you remember this narrative is that we are going to make crypto globally available so all of the merchants are going to accept my crypto and we're just gonna you know tap our wallets and everything is going to go smoothly now how many of you guys have actually cut you know even seldomly used that option so how many Merchants do you actually accept your Bitcoins or your eth or even some other you know magic intern money how many of you guys actually paid in crypto or how often do you do that one person right how a couple of people how many how many Merchants actually have that capacity and what do you think happens there right so when you execute the transaction when you scan that QR code you're sending your money to that Merchant the merchant doesn't care about crypto the merchant doesn't get crypto there is a company sitting there that settles that crypto for Fiat for the merchant so that the merchant gets you know money Fiat into their bank account and that's how they reconcile why because until the every single step in that supply chain of that let's say coffee shop until that very moment they all reconcile in crypto the merchant will always want Fiat so what if we don't take the approach where we try to bring crypto the world what if we say that we just create the bridge from crypto to the real world where I can easily access all of the utility and tools that D5 is giving me and connected to the traditional finance and that's exactly the conversation about that what if we cut all of that and we just say that I connect my wallet I execute my transactions on both on-chain dapps I do whatever the stupid I do every day but I also can pay for things offline and what kind of opportunities right does it give us that's the show time for you know just a few of the amazing protocols what if we say that we can have the self-repained loans so what if I have my assets I want to keep an exposure in that asset is it possible for me to use that as a collateral take the loan spend the loan in the real world and then still have the full control of the position so if I want to repay I can or in this case for example as alchemics as introduced you know back in the days it will eventually repay itself um what if you what if there's what if your money earns you yield and that pays for your everyday expenses that Spotify subscription Netflix subscription um Google subscription I mean use a company you can have um I don't know Google bills um email will uh anything any type of bills what if that's covered by your own chain yield can you connect that logic what if um well what if you want to what if you don't want to pay interest on that loan you can have something like zero interest loans you want exposure in that if so what do you do well you you basically mint LUSD and that's just a few examples of what could happen because you can create infinitely more of those Primitives all combined together because what you do is that you're not focusing on merging the two infrastructures which will never be able what I believe to merge or integrate natively but what you do is you create those bridges and it opens up this opportunity of pretty much anything that you have ever tried on chain or anything that touches money because well let's put it this way um correct me if I want to you know put the hand up if you believe that's true and you know just don't put it up if you think that's not true the majority of protocols in crypto if you take a strap aside that middle thing with the magic that they do it's all down to two things deposit and withdraw so anything like even swapping right you're depositing one token withdrawing another token you collateralize one thing you know you receive another thing you buy one thing you sell another thing so basically all coming down to this two things like deposit and withdrawal and all of that revolves around the money and then everything else it sort of well it serves that infrastructure so that you are able to do that so in this question or in this case the idea is is that we tap into that moment of you depositing or into you withdrawing so after all of this I guess the main question and the big question is well how does that work right is it even possible can you do that what about oracles what about bridges what about you know connecting off chain systems to on-chain systems how you know is it even possible how secure is that how decentralized is that there's a lot of important questions um I'll get a moment into this but ultimately I think we um we have to realize that the ultimate vision of everything to be decentralized and money that has to be decentralized and that your bank has to be decentralized and that your card has to be decentralized and that you know anything that touches you has to be decentralized were not there yet right it's and and with every day that we're going forward um regulations governments institutions um so everybody who is in favor of having the status quo they're making you harder to achieve that goal can you really claim that some protocol is truly decentralized what is that level of decentralization I guess we can use the very very recent example is let's say well multi-chain how many of you guys have ever used multi-chain Bridge a lot of people right um so then okay you see this tweet that's coming up and says well we can reach our CEO that has keys to some servers so you know sorry your money is lost is that decentralized or is that you know immutable is that how do you how do you say right so this it's an edge right it's like a gray area between well truly centralized and truly decentralized so it's always somewhere in the Spectrum and what we suggest and what we say is that well you have to decentralize what you can and then you don't try to decentralize or recreate the will of something that is already regulated and something that cannot be changed or questioned and that's that's our idea is our idea is that we combine two things together so we combine web three and we leave those Primitives to you know to us as the community um I think that we as a community have one of the smartest and brightest Minds in the industry that are working in their basements you know in their you know moms preparing their meals but you know recreating you all remember this meme right are you winning son and I think we are and you know we are those people you know in front of the computer is actually changing the world but then there's the other side which is the off chain part which is you know very regulated um you have specific rules and you know this meme right the dev is dead it's bullish well it's not really the case right in the off chain world but what we are saying is that um we have an opportunity we have an option to combine those two things and here's how yeah that's it I'm joking all we can do is we can say is this there's infinite amount of layers and blockchains and networks now how many um but you know before we jump into that how many how many networks do you guys use on a daily basis like how many you can name but how many you actually use I'd say it's probably like one of the two like is any anyone here yeah you're you're different sir um how many of you guys have used I don't know more than three chains in the past two weeks okay that's a lot right that's good okay my question here is then how many of you guys use those chains to do what was it that to to make more money is it okay was that to do something that would help you you know besides from the money aspect like in the real world I don't know something to control your data something to control your information something to help you do something else probably not so what uh what approach that we have tried and the approach that we are following is this we're saying that we can deploy our infrastructure in every Network that you know that we can support and we'll dive that uh dive that into a bit deeper we have adapt and the DAP works exactly like every other web 3D app you have the web3 connector the DAP creates and you know bundles and basically prepares the transaction for your wallet design so you can sign the wallet but what it also does is that it creates the rug bridge to the often world and that's your you know acquirer bank that's your payment systems and that's basically everything else that's required for you to legally interact within that space that's as I mentioned you know multiple times now throughout the speech it's very regulating it's very clear what kind of rules are there but with this kind of approach what happens is that you can create the on-chain infrastructure that is modular enough for you to abstract all of those Primitives all of those complicated things like lending like yields um you know like money streaming all of that and formulate and granulate it into one specific thing how much money and at what case and when do you want to send to the specific user and I specifically use the word send because in other case again everything that happens with money eventually is just transferring money from one place to another place so what we've built is we've built the set of tools and the set of things that allow us to work with you guys who are building all of these things that change the world to allow us eventually all together so people who use web3 in one capacity or another capacity is to use our money in a more efficient way and what I mean by that is very specifically so I'm bullish on eth so what happens is that I want to make sure that I can maximize my efficiency so I tell my company well I want to get paid in if the company says well we we have to then have what Ethan the balance sheet how do we do that so what if the company can pay me in Euro and then that euro is automatically converted into if and that if is then immediately deployed or it's you know using as the collateral and liquidity and it's mincing LUSD well okay how do I use LUSD I you know as we already said um I cannot send LUSD to my um you know to my bank account so what if that LUSD goes and does the trip around and goes back to Euro but in that case it allows me to control that position and to control the way that my money works out for me and uh actually actually because it's already getting closer to the end of the day what I wanted to say and what I wanted to add just this one little thing out there is um there's one guy you know one very smart one that wasn't me who said that you need to build future proof things and in that case the whole reason why I'm relaying and telling you all of this is that what we still have now as an industry and D5 is still a Sandbox and we need it's critical we need to make sure that we create ways for that complexity to be abstracted and presented in a very simple way to the masses so that people can use it without having to understand well okay well how to even connect to this network to use that protocol that will allow me to do something we have to have things like this that will allow you to use your money yes in a non-custodial way but two in a compliant way it already works for the real world so we're not trying to waste our time to recreate the infrastructure that's already there but we emphasize our time on building something that well is just not integrated yet it just doesn't exist yet so if you are building something on chain if you believe that what you're building will allow people to use their money more efficiently or to access their money more efficiently feel free to chat thank you [Applause] I guess yeah if you if you guys have any questions uh yeah sure please go ahead hello thank you for the talk yeah I support your idea and your efforts but for instance yeah I worked for some time as an auditor of some ethereum smart contracts and actually there were exactly two companies who tried to like Bridge C5 and D5 like real finance and and what they did actually uh uh that they left a lot of like room for possible like contract upgrades like how to seize tokens etc etc so because they know that they are like real world companies like off-chain companies they have regulations and like at any time this regulations come and say okay so these like persons from Florida can't own this like assets and they just have to do like and leave this back doors and their contracts to allow them like to satisfy these requirements so either yeah I don't know idea how to like uh like mitigate it I don't know yeah mitigate this so to allow this developers because of course yeah so Tech chain allows to do that but how like allow user like absolutely real developers that's that's a very good question and um that's probably the problem of as you mentioned um traditional or centralized Services why because if you have an exposure or if you have an ability to do something there can be the regulator that comes back to you and tells you well you need to do this right and that's why banks are obligated if the regulator comes and tell well we want you to freeze assets of this guy they must do that and in this case the only way to get out of this for you is that um I would say the critical or the most sensitive part right on ramping and off-ramping are the most vulnerable pieces of this entire infrastructure why because they're very easy to control so if you can create new rules for on-ramps and off-ramps you know to do something um that basically affects the entire flow right money and money out what we are doing and what we um engage in an approach we we are going a step forward saying that we want to ensure that we cannot have access to your money that's one part so for example how can you freeze assets that you do not own that comes to the question of regulatory perspective is well you have your obligations from you know security ml risk perspective but what you can do is you can tell the customer we cannot serve you in the moment and there are many maybe multiple reasons for that and you may freeze their Fiat assets but if you have no way no control to their non-custodial wallet you cannot freeze assets that are there so if we just change the perspective of and I think a lot of you guys in crypto are doing this way you have your money in in crypto when you need to spend it you off ramp it you spend that and then you do it again so it's like a Reload cycle so you're not saying that okay I'm gonna off-ramp hundred thousand dollars and then I'm just gonna spend it over 12 months use off-ramp what you need in that time and then you do it again so the model here and that's how it works from the regular perspective is that what we're saying is when you want to off-ramp you're bound to this real world rules terms and conditions what you can do but then if we cannot serve you we should just not service so we cannot take your money so if for any reason you cannot be served then what happens is that the money is not just accepted so for example there's no way for an exchange to turn off that deposit address they give you the deposit address you send the money there and then they tell you if it's okay or not right then they can tell you if they can serve you or not but what happens if you shift that moment of we can serve you or we cannot to the on-chain part and tell you that in that moment where you execute the transaction okay can you be served or not because if you can't the transaction will revert so yes you know you can be the best guy in the world or you can be the worst guy in the world but that's your money that's not our job to police that our job is to police only what's required by rules because again as we said you know the the mean right devs dead you know bullish right that's not the case so what I'm saying here is that if we just shift the moment of where and what you custody and what you have the exposure to saying that we can only serve this specific case or we're allowed to serve it and then if we're not we cannot take the money from you and there's no way what if I'll give it one example allowance how many of you guys care about allowance so when you know when the DAP tells you you know screw that whatever just give me infinite allowance how many of you guys actually check and see for that and try to correct it okay what happens if on a smart contract level the contract itself tells you no you cannot give me more allowance that you want to off-ramp because if you give me more I'll revert because at the end of the transaction at the end of this cycle I want you to have zero exposure to my contracts and what happens that if you if you do all the things that you're required by law at the moment of that transaction traction so when you when you try to you know off-ramp that transaction fails for you know numerous reasons but then the money can never be seized because if if it if it you know if the transaction fails the money comes back to you so the worst case in this case what you can what hack what can happen to you you can be unserved by one service but what happens if there's many more like this then you have optionality but what happens is you don't get into the situation like you do now is well I mean how many of you guys seen this on Twitter like I send money to this exchange it doesn't let me to withdraw and there could be again it's very hard to speculate what happens in that specific cases it could be the good guy it could be the bad guy how do we know what we can see is that someone's having those withdrawal issues what if you never withdraw or deposit what if you actually spend what you need to spend and and you're just shifting that small narrative so hopefully that that helps basically the idea is from the moment you take custody of things so the moment you interact with the service and bow into the terms and conditions you shift The Narrative from what is seasonable what is controllable to what is not uh hi Anton thanks for the lovely presentation uh I have more question around the Aesthetics so from that perspective I know that you guys have already the plastic card so I'm just wondering do you guys have any plans for metal cars in the future or something like that thank you uh thank you very much kind sir uh thank you for framing it so politely without when um yes we obviously do have plans for metal and yes but I heard that the devs love that you send in the support um just yeah if you send them the message when metal for every message that's sent uh the time you know for shipping this it decreases I think it's like even you know it's not even the linear proportion so make sure to send more messages like that but no it's coming so it is indeed that um we we will have the metal card so if you are guys are from um well EA region so unfortunately we're not available yet in survey and that's the sad part about the the regulations in the real world but if you are from the EA region yes you can go ahead and you know order the card now and uh the beauty of this is again that's the Fiat world that's controlled straight from your non-custodial wallet so whatever you use metamask whatever you trust and that's another uh I hope you guys get the point is that we're just like another depth right so we're not a wallet we you know there's no way for you to import your seed phrase you cannot generate the seed phrase with us you already use what you trust the wallet the hot one the cold one whatever um whatever access or whatever level of exposure you want to provide it's exactly the same way so think about this as a Dap that just allows you and gives you this little window and this little bridge to paint for things like offline as you do normally and hopefully with this approach what we're trying to do is we're just trying trying to change the narrative is that well crypto is bad right only bad people interact with crypto or the way Banks see you because that's a risk for them they do not understand the risk exposure and it's expensive and it's hard for them to estimate well are you the good guy or not but if we come from this perspective of well on chain is actually the worst way to try to you know launder money or do bad things it's actually very complicated to do that um but that's actually something that can help you or can help us to clear that out and you know to make things very easy sorry that was a very long answer to when mental soon yeah thank you for speech Antonio my name is vasili and when you asked who is getting salary in crypto I answer yes and I doing that for a reason and I was excited to listen uh how your application and your solution is improving user experience and doing less friction for the user and my question is a little bit connected to previous question because I just tried to scan your QR code went to your website get this link download your application click it and Google app save me say it this item is not available in your country so the question is how much your app is permissionless and how much you're improving user experience and doing less friction for user uh I think I think you touch based on an important part is what I said there's very different things about permissionless and decentralized and it's very few protocols on chain that can claim that are truly permissionless and decentralized there's nothing permissionless and decentralized when it comes to traditional banking it's just none and the moment you try and say you know what we're just going to create our new bank that doesn't follow the traditional rules you get shut down and why because well one thing is protecting the status quo and two is well nobody wants you to do that so what what we are doing is we're saying is that look we don't have resources and we don't have money as an industry not just us to fight the traditional finance and this it's very hard for you to shift or change the rules like how we want and how we like so what we are doing is we're saying is that look you still have to play by these rules today the only non-custodial fear that's out there is cash in your pocket and it's still Bound to You Know That central bank that issue that money if it's worth anything or not right but what we are saying is that look if you are okay to play in real and live with reality that your landlord will only accept wire it will not accept your you know Peppa tokens that's just the reality of it you can try to fight that or you can try to make it a very convenient easy way for you to use that assets that you have and to use that defy Primitives that are built there to you know exit into the traditional world and in the exactly insane way you can say well what about Apple Store what about Google store are they permissionless or are they no other totally not and they police everything that they seek you can see and they can police and tell you do you have licenses to issue this app on our store and you know you have to be you know you have to accept those rules and in this case what we're saying is that look there's nothing permissionless when it comes to Fiat and it's impossible to create permissionless Fiat system or even integrate permissionlessly crypto so it's to the same point as you mentioned can we shift this the question there was can we shift this policing you know to the earlier stage so that the user can always control their funds and decide if they want to use them or not but it's not the way around when you have money in your bank account you have the contract with the bank so if the bank doesn't like something the bank will tell you we're not allowing you to use your money but in this case it has to be the other way around you have to say I allow you to use my money to help me do what I want so it's Shifting the narratives and it's just shifting the points of failure as to how far you can push to be permissionless or decentralized and you know how far not thank you guys I think my time is up yes so thank you very much for that [Applause] awesome thank you