🎙 DC Investor | Layer Zero

welcome to layer zero layer zero is a podcast of unscripted conversations with the people that make up the ethereum community crypto is built by code but it's composed by people and each individual member of the crypto community has their own story to tell cypherpunks understood that the code they write impacts the people that use it and layer zero focuses on the people behind the code because crypto is people all the way down and it always has been today i'm talking with dc investor who lives up to his name as a guy who has

been in the investing world and also lives in dc so we go through that history of what it was like to learn how to be an investor while also being a w-2 employee and i think we a lot of people in the ethereum community in the crypto world can definitely understand what it's like to go to work for their nine-to-five and then really think hardly about how to make their money work for them and how to make sure that their money is working as dc said as hard for them as they worked for their money i really enjoyed their

framing we talked about dc's early exploration into using the internet before the internet is what it was today while we we as a society were still trying to figure out what the internet is and how those behaviors and skills that he learned while navigating the early internet was able to be translated into the world of crypto uh we also of course go into dc's first entrance into crypto which involved buying bitcoin at the top selling it at the bottom and what lessons he was able to learn from that expensive mistake which has kind of

turned into a rite of passage for almost everyone in the world of crypto we also of course talk about dc's background uh as it relates to nfts and if dc famously has one of the most stellar nft portfolios that is out there and we also get into the world of crypto gaming and what dc likes to do in his free time so i hope you enjoy this conversation with dc investor but before we get into it we have to talk for a moment about one of these fantastic sponsors that make the show possible bankless is proud to be supported by uniswap uniswap is a new paradigm in

asset exchange infrastructure instead of a cumbersome order book system where trades are matched with other humans uniswap is an autonomous piece of software on ethereum which is what ryan and i call a money robot no human counterparties or centralized intermediaries just autonomous code on ethereum input the token you want to sell and receive the token you want to buy something brand new in the uni-swap ecosystem is the uniswap grants program is now accepting applications for grants we have been saying this for a while and we'll say it again dows have money and

they are in need of labor if you think that you have something to contribute to the uniswap dao apply for a grant to uniswap just look at the size of the uniswap treasury it's almost three billion dollars this mountain of capital is looking for labor do you have something of value to contribute to the uniswap dow no matter how big or small your idea is you can apply for a uni grant at unigrants.org and help steer unit swap in the direction that you think it should go that's exactly what we did to get uniswop to be a sponsor for bankless and you can do the same for

your project thank you uniswap for sponsoring bankless the era of proof of stake is upon us proof of stake systems like ethereum terra and solana allow the industry to move away from the hot loud and wasteful proof of work systems and return back to a cottage industry of individual stakers and individual validators and that is what we need to make this industry stay decentralized individuals must play their part in crypto network validation and that is what lido is here to do lido makes sticking accessible to everyone at the

click of a button by delegating your stake to lydo's network of nodes you can access the yield offered by proof of sake systems and claim your share of the network transaction rewards do you have 32 eth and want to stake it to ethereum but running a node sounds intimidating or maybe you have less than 32 eth and you need to pool your eat with others so you can access baking yields lido offers a solution for both simply go to lido.fi choose which assets you want to stake and deposit them to the lido validating network lido is working to make sure

proof of stake stays as decentralized as possible and is committed to decentralizing its own validating network to eventually become a completely permissionless protocol so if you want to stake your eth terra or soul and get liquidity on your steak go to lydo.fi to get started hey dc how's it going hey david how's it going man doing well pretty good pretty good i'm over here at nft nyc but bummed the end of the nft guy wasn't actually able to see you this weekend i know i wasn't able to make it this

week but i definitely hope to be able to make it to to some events in 2022. yeah man uh i want to start with uh dc investor where'd that name come from so it was just a handle that i created back in the day because a lot of the forums i'd been participating in were kind of financially oriented i was on forums like the bogle heads which is like a financial investment site using like vanguard funds so i've always been interested in this idea of investing and

my philosophy behind that has been pretty simple as someone who is a w-2 wage earner for most of my life for 15 plus years my philosophy was always if i'm going to work hard for my money which i worked very hard for my money i wanted my money to work hard for me so i always kind of had my mindset of i want to be able to invest and grow my earnings beyond just the work that i'm putting in directly and then what about the dc side of things so the dc i'm actually based in dc and um based in the dc area and i've lived

up here for about 15 years now so it's pretty much my home i grew up in southeast virginia so been in this area kind of my whole life i'm about four and a half hours away from where i grew up but i love the dc area it's a great metropolitan area i'm sure a lot of your listeners might even live there but it's great because we've got kind of the hustle and bustle of a bigger city and the culture and arts that you expect from a city like dc but it's also like a lot more laid back and chill than a city like nyc which i love nyc i love new

york it's a great city but every time i visit there when i come home i'm like oh it's nice to be back at home too so oh my gosh everyone that i've been talking to here in nyc is saying the same same exact things this is the first week of nyc i've been learning to like pace myself and i was also learning like one week in dc in in new york is more than enough like it's more of a five-day thing for me but it's fun while you're there there's no other city that has that feeling so that's that's very true yeah it's very much a play hard work hard environment

uh okay so speaking of play hard work hard if you are and you say you you worked very hard being a wt employee working hard for your money and then obviously you want your money to work hard for you uh has this been uh something like a work ethic that you've had like your entire entire life as in like you've always been focused on like you know going to work doing your w-2 and then funneling that into you know actually investments has this been you know who you are for like uh the last 15 years that you would say pretty much i mean when i first started

out working and i'm sure a lot of your uh listeners can probably relate to this i didn't have like a ton of money you know you don't have a lot of disposable income when you're coming out of college and i i came out of college i had actually started off as a chemistry and comp sci double major then september 11th happened and i was a senior and as a junior in college and i switched my major on the spot to government just because i wanted to do something more involved with that so i changed my focus completely did the whole government major in three semesters and then got my

master's in public policy so i was kind of like destined for this track of working on public policy related issues here in the dc area but when i first came out of school it's not like i had a ton of disposable income but i did kind of prioritize saving a little bit and one of one of the pieces of advice that i try to give people who are younger just getting into this and might have like professional jobs is try to save some of that money into your 401k i know this is the opposite of what a lot of crypto people will say but it's like save a little bit in that because as you build up that lower risk um asset pie it

allows you as you grow older to take bigger risks that's kind of the philosophy that i approached um investing with crypto investing and just stock investing i wanted to build up that nest egg so i can take on bigger risks as i got older yeah famously people will always say hey if you're young take risks right because why not like you have you have very little to lose and everything to gain but but what you're saying is well if you keep that steady 401k you get to continue with that strategy for longer and into your life

yeah and also like i mean i think a lot of people don't really understand compound interest and how powerful it really is like everyone will say they get it but like until you like look at the numbers and how like saving a little bit when you're younger how much more valuable that is compounded over time um so i think that's one piece of it but i wouldn't say like it doesn't mean like don't take risks while you're young it means don't put everything into risky endeavors like make sure that if you like invest in something that's more speculative or risky you still got something to fall back on and i think that's what that's kind of been my

philosophy is i always wanted to create that security because that's what's given me the confidence actually to hold on to these crypto assets because i don't really care about the volatility as much if that makes sense absolutely one thing that comes to mind is like everyone in crypto is and even this is also true for the legacy stock market now with this whole like the gme ape culture that you know has gone outside of crypto is like no no one has enough patience for compound interest like i know you say like you know compound interest is very very like you know powerful but also at

the same time people are trying to like get it rich everywhere not just crypto did you have you thought about like the implications of like what happens when like the culture around investing goes from you know steady reliable long-term compound interest to like trying to catch that moon bag so i definitely have and i think a lot of this has become a lot of finances become gamified and it was happening even before crypto and it really started i mean and by the way the phenomenon that we're seeing they're not necessarily new i mean if you go back to

the 30s and the roaring 20s right and a lot of that was fueled actually by a overheated speculative stock market which which all of a sudden allowed retail participation and retail was buying in and they were buying into very high valuations which kept going higher because there were always new entrants coming in right but once the new entrance and the new money and now it fueled one of the most lavish decades in like modern history basically um you know that whole period and so but when you look back at that time period

and you look at the parallels of today and you see the same kind of like gambling mindset a lot of it is fueled by like the apps i mean even if you look like the way that the robin hood app is structured for logging your trades versus like the schwab app they're they're different right they're get they're aiming at different experiences and robin hood is almost like trying to provide you like entertainment through investing is how i would put it and crypto does that too so and i and i there is a market for that but i do think if you have too many people with like the get rich quick mindset like a lot of them are going to get burned

badly at some point most likely i mean just the law of market dynamics says that like not everyone can make that kind of money over time and it might happen you know definitely crypto has been cyclical in the past we've seen bear markets evan flow and i think we'll probably continue to see that to some degree even if the bearish periods aren't quite as stark for some assets they will still be very harsh on some assets so i think that overall that whole gambling mindset all investing is a form of gambling but i think it's just about how you manage the risk which is what

differentiates it there's a book that our mutual friend eric connor got me to to read uh called the devil take the hindmost i don't know if you've read yeah okay sounds like you've read it yeah i haven't read that but i read a similar book which is reminisces of a stock market operator so but the eric's book is on my list as well and yeah that whole both of those are just about that whole period and how evaluations just went crazy right double take the hindmost is about like financial bubbles at large like going back to i think as early as like the 1200s or 1400s and it

was the biggest takeaway i had is that like financial bubbles that happen are like they're bit they are barely basically guaranteed to happen because they're based in like human dna right like the tulip mania like there was nothing about tulips that created the financial bubble it was all in the brains of the humans right and so like it's kind of like programmed into our like our greed right our greed factors and like i think it's like when enough people start to have that sort of like ape culture that get rich quick

culture it starts to actually become part of the fundamentals of the market right like well because you're aping and i'll apen and then because they're raping in i'll ape in but eventually like somebody is the last person to ape in right and then they mark the top uh and like but there's like this some some somehow like something about the rubber meets the pavement and all of a sudden it changes the culture around the people that are investing in it as it's just logically rational because everyone else is doing it to also do it and it just creates like a self-fulfilling prophecy yeah and there is a rationality there

because the number keeps going up you're like well i want to be on board this train rather than off it but the problem is that you know it's not sustainable as you pointed out i actually wrote a tweet kind of along touching on some of these topics earlier today and i i'll read it here because i said more than anything else being deep in crypto has taught me basically four things one all valuations are a meme and some of those memes are more durable than others two there's a difference between a marketable product versus a true product market fit and we have a lot of marketable products

in crypto we have a very few products with dream product market fit um the third is everything takes either much less time or much more time than you thought to happen in the world of crypto like there have been some things i'm like oh this will happen this year and it takes like three years there's some stuff that i was like oh this will take 10 years it takes like three months you know i mean literally that's how crypto works and then finally the cyclical nature of human greed which is we we inevitably as humans get into these boom and bust cycles we're chasing the run up and then we're chasing the run down and

you know you just have to acknowledge that that's how your own mind works perhaps and that's how others minds are working and you just have to adapt to that kind of environment so dc when you were investing way back before crypto uh again back when you were a w-2 employee uh and being an investor when you're a double wt employee is very much different than when like i would say like anything else right because you're not paying attention to the markets you're going to work right and then you come back and like it has to be

in on your own time as you learned how to invest in that world how much of that knowledge were you able to actually carry over into the crypto world or when you came into the crypto world was it like a brand new game that you had to relearn from scratch i think there are a lot of parallels it is a different game in some respects so traditionally those other types of investment markets that we're talking about we're only talking about equities right and a lot of what i was investing in and still hold are diversified index funds however i would buy individual equities here and

there i would actually say that the public information asymmetry around those types of corporations actually much bigger because there are insiders who have a lot more knowledge and crypto actually it's more of an even playing field because more of the information is out there in the public so that others can see it but i think looking back on that time um you know i a big lesson that i learned in participating in those kinds of markets is just appropriate risk management and i've really carried that forward with me into crypto and my philosophy with putting money into

crypto has never put in money that is more than i could afford to lose so i don't want to be economically bankrupt or put into like a really dire situation because i invested too much in crypto that said i put a lot in crypto i mean i've and it's grown bigger obviously over time but even my initial investments were extremely large as a percentage of my net worth and i kind of just accepted i was like okay i had i had gotten to that point in my life where i was like well i have enough saved where i can afford to take a couple of big swings here for these

higher conviction assets and i think another big lesson that i learned from those kinds of markets is you really there's value in playing the long game um and i think in crypto probably what i didn't adapt to as well is how much money can be extracted in the short term to be honest and not necessarily that i want to get into that game because it's a little too it's not the type of i don't enjoy that kind of stimulation that much like it's not that exciting to me to like buy into something that's like oh a 2x overnight i'm gonna sell it now like that's just not that interesting i would

rather buy something and it goes like 10x or 100x over a few years like that's just a more interesting and feels more sustainable to me but i think like i was not prepared for how much just pure untethered mimetics kind of drives value it happens in financial markets but those memes are kind of pushed on us by wall street they tell us stuff like oh yeah price earnings matters that's what you should be paying attention to or growth matters or or or value matters and the narratives kind of shift over time shifting into a crypto mindset it's

like okay even assets with really strong fundamental value like ether when it was like under 200. you were buying i was buying no not many people were buying them but like not many people really saw the fundamentals so i've always been like that was that to me was probably the biggest asymmetric bet of my life was going big on ethereum when it was under 200 during the bear market just because i knew it was undervalued for the fundamentals and it kind of ties back to that way of thinking that i just articulated with uh you said that the crypto markets

are inherently more like fair because all the information is out there do you think that's like a fundamental truth about how crypto works or do you think that's maybe just true just because we're early in the history of crypto and everyone's still learning how to figure out what the hell all this stuff is i think part of it is fundamentally true and maybe more of it than people realize because even as we scale up i think a lot of activity is going to be done in the open it's done on the public internet and people can kind of see and browse that information i don't but i but i do think we run the

risk of having more actors playing more centralizing roles in some of this and i think that over time and we already see that a little bit sometimes you see like vcs getting better deals and are they really bringing any value to the table in some cases not really they're just like they're putting their logo the project is putting their logo on their website and saying oh look who's backing us what they don't tell you is they're literally like in everything right and for those funds they actually make a lot of their money on the upfront buy where they get preferential terms there

and i think like unfortunately the way that the icf mania kind of imploded in 2017 2018 and the sec action that resulted from that actually moved the industry more towards relying on vc funding i think the pendulum is starting to swing back a little bit but actually like icos like in their premise are a very egalitarian way of like raising funds not necessarily in practice in terms of what we saw but the idea of anyone being able to invest in anything anywhere without any barrier like if you're a project and you need to

raise 10 million dollars and maybe you want to raise it actually from users versus some vc that's gonna like you know pay you favors and stuff like that you know maybe you're better off actually raising the money from 10 000 people and giving more people the opportunity to participate so i do i do hope that we swing back more towards those models but we're gonna have to fight that kind of centralization risk like any industry in my opinion you said um the whole like buy something watch it two three x sell it in a day later daily or two a day or two later

it's not it's not interesting to you and i think what you you may mean by that is that well if you're making those trades uh you don't care about the asset you just want to you care about the candle right whereas if you buy something and you're holding it for a year maybe you actually are are like intrinsically curious about the nature of that asset like there's something to read about there's like things to unpack and explore was there an ever an asset first off is that would you say that that's true and then uh was before crypto when you were still investing in the legacy

stock market was there an asset like that that you like had a true deep conviction in or was that something that you more recently discovered in crypto um you know just going back i think that if you look at crypto assets as a whole they're more speculative in their nature than a lot of fundamental investments right so when i think about like why why i'm interested in crypto i am still looking for that fundamental value personally as someone with that kind of mindset going back to my stock training

um and and other investments um but a lot of the value is falls into that speculative bucket right and i don't fault anybody necessarily for like seeking that i get it i mean the money is out there but in order but like it's hard it's harder for a lot of people to have an edge in that kind of activity because a lot of these traders are very sophisticated and actually a lot of the traders that you see on crypto twitter i'm convinced they're not making money so you also need to like be aware of like the larping that goes on which is quite

there are some traders who are very successful i mean there are some traders who are very successful a lot of them are not like super active trading daily candles either they'll trade like shorter time frames than what i'm trading but they're still like you know focused on more market movements that are based on reflexive price action than anything else i didn't really get involved in that kind of investing in the stock market because in the stock market i feel like it was even harder to have an edge there and you have to use more exotic instruments and i wasn't really doing that as a personal investor

there were some specular sectors that i got into kind of early on that were very exciting like 3d printing like i got into that when it was like hitting like the hype narrative and i was up a lot in that and then i watched it all decline a lot i mean i still i still i still made out more than i put in but it was kind of one of those things where i look back and it's like you know what i probably should have taken some profit off the table because it's like even though the fundamentals were strong uh or like the ideas actually i should say the ideas were good the fundamentals were not necessarily there i think we have that

challenge in crypto sometimes too however over the past like 10 plus years that that cryptos kind of existed i feel like fundamentals have been increasing and it makes sense now to actually look at crypto from a more fundamental basis in my opinion well one of the things that i really like about this crypto thing and i only started getting in into investing maybe like 18 months before i went from like investing in the stock market to investing in crypto so my stock market investing like um knowledge base is very

very limited um but the big difference that i noticed with crypto is that with crypto assets there's communities around these things uh and the one asset that i really actually cared about was uh amd which also actually had like a community there was like a subreddit based around it uh and one of the cool phenomenons and you and i we we share some discord channels we share some telegrams and a lot of them are our eth-based uh like communities right and that's like a for me i'm pretty sure that's a big first in the world and like this also started

with bitcoin of course um where like all of a sudden it's not just the fundamentals it's also like the community and so many communities in this uh in the crypto world like it's weird that so many communities are based around financial assets how have you uh going from the the world of you know stock market investing to crypto investing how how has the fact that communities are around these things like you know change your mental models about how to evaluate these things so i and i do think communities have existed in like the traditional markets like even some of the communities that i was

like involved with mostly as a lurker like the bogo heads that i mentioned earlier they're based off like they're like acolytes of jack bogle who founded vanguard and they're just people who are like talking about how to allocate among index funds and there's a community that's sprung up around that and a lot of people you know you can get a lot of value just by reading and following those communities i think in crypto it definitely becomes or runs the risk of becoming more cult-like or tribal like than even with equities and there are various reasons for that but i think fundamentally because a lot of the value

of crypto assets is socially driven i think a lot of i think a lot of people especially a lot of developers might not actually appreciate that they're like more just focused on the technology and they're like oh this does this but it's like at the end of the day the value that we're creating in the space is ultimately about social legitimacy and being able to disintermediate activity trustlessly in a way that is reliable and i think that different people have different views of what that trust means and different

people are going to prioritize different elements that value proposition and you know i obviously have my own point of view which i think is right and but there's somewhat there's someone else on the other side of the fence that has an equally strong view that also thinks that they are right i mean the market is going to decide these things in the long term but i do think that it's important to kind of look at the market through that lens and understand that different people i mean just because someone likes some other token that might be different from me doesn't necessarily make them like a bad person i think in crypto a lot of the times people kind of turn

that into like a personal argument and it's honestly not as bad during like nice bullish periods like we're having right now david you know where everything's going up so it's not like the end of the world but like during more bearish periods as you will remember from the last beer market it gets it can get unpleasant and i i think that is unfortunate i mean especially like i i basically created my twitter account because i got tired of like the misinformation that was being propagated about ethereum i know that was a big reason why you and ryan really like pushed bankless forward as well because the amount of disinformation not not

just misinformation just pure disinformation was staggering and people just didn't understand what was happening in ethereum for a fundamental basis so that's where i felt like actually being in that tribe a little bit helped me because i was able to see through all that bs i was able to see the true fundamentals i was able to like filter out the random crypto trader who knows absolutely nothing about the technology saying ethereum's going to zero and i was able to hone in on what i felt was like a valuable long-term value proposition and it turns out i was i was

right or have been right so far with the community aspect aside like removing the investment and and you know number go upside of of assets how has the community side of things and changed your life the community has been huge and the ethereum community has been in particular and i think the crypto community overall because even though we have things that separate us there is a lot that unites us right and a lot of us have common views of the type of world we want to see from crypto not universal

but somewhat common for me being involved in the ethereum community has just been a huge positive and i started off actually mostly participating on reddit and back in the days of eath trader and then on eath finance i would write up more longer form pieces there and i would just kind of share my investment thesis on why i was interested in ether and beyond that why i thought it was like a world changing technology and a lot of this we can talk about this if you're interested but like a lot of that goes back to just my experience of growing up during the rise of the consumer internet and i saw just

so many parallels of what was happening with ethereum and most of it like 90 of it was organic it didn't feel forced it didn't feel like it felt like this open free collaboration trust layer and i didn't see anything else that was doing that and the community being involved with the community helped me understand that better it helped me make more connections to learn more about what was actually happening with ethereum and it helped me kind of refine those theses and share them with more people and then i kind of shifted my emphasis more to sharing that

information on twitter just because the reach is a little bit bigger than just you know the the 100 or so people who might stumble upon one of my comments on reddit on twitter it's it's a much bigger impression base and for me it was really not about like establishing a personality it was just i want to get this information out for people because i believe in kind of what ethereum is trying to achieve yeah talk about the uh your transition into the world of of crypto so you spent a number of years uh you know uh uh sharpening your teeth by investing in

the normal stock market at some point you stumble into the world of crypto maybe that's where you started to get to comparisons of crypto and uh you know the rise of the consumer internet can you talk talk about just your crypto moment absolutely so it was back in 2013 and prior to that by the way i was aware of bitcoin you know i had heard about it and i was like okay this doesn't really the idea of digital scarcity did not make sense to a lot of us and it still doesn't make sense to a lot of us but especially for someone who grew up with like the 90s consumer internet literally

you could copy paste anything and now we're in this world where you're telling me that you can have like a digitally scarce asset on this decentralized ledger which supposedly nobody controls it's a huge mental leap right and so i dismissed it for a long time and then it was around november 2013 bitcoin hit like a thousand dollars and that's when i really started paying attention i was like wow i remember when this was trading for like a couple of bucks and i was like of course i wish i had bought them i didn't but like but i was just like well you know i let

me try to learn a little bit more about this i didn't go like super deep but i went deep enough to be like okay i'm gonna start putting some money into this so i bought a bunch like close to the top back then okay it happens to all of us and of course in my mindset and and being a w-2 wage earner back then and you know i so i was earning my income i was like well i'm just going to dollar cost average and do this i don't care about the volatility that was what i told myself right and then so i kept buying from from that point and it kept going lower and lower and i was like

okay what's going on now and then eventually at some point i decided a couple years later i decided i wanted to buy a house or buy a condo and i was like well i might as well just sell this bitcoin it's never going back up so i sold it for between 400 and 200 something dollars okay so let's say average average sale price was around 300. and i had lost money on that so i've got the tax write off i was like that's cool and then so fast forward of course now bitcoin's worth over 60 000 and that was a huge like wake up moment