23 - Investing in DeFi | Joey Krug

Welcome to Bankless, where we explore the frontier of internet money and internet finance. This is how to get started, how to get better, and how to front run the opportunity. This is Ryan Sean Adams. I'm here with David Hoffman, and we're here to help you become more bankless. David, how are you doing today, sir?

Doing just fantastic, Ryan. We had Joey Krug on the Bankless podcast. For those that don't know, Joey is the founder of the Augur protocol. But even before that, Joey was a member of the bankless community before the bankless community was a community. And so it was really exciting to get him on the podcast because not only is he a builder in the DeFi space, but not only is he a DeFi builder, but he's just totally multidisciplinary. Since he's been so close to the action, he's been able to gather a bunch of different perspectives as to what it is, what it means to be part of the bankless world. And so getting him on to talk about these various things, talking about oracles, talking about DeFi, talking about tokens versus equity and what's going on with liquidity mining was a really valuable conversation. And we really hit just a wide variety of subjects from someone who's really close to all of the action.

To me, this was an incredibly concise conversation. Like we hit on so many different topics, and he had very concise mental models for each of them. It was just incredible from that perspective.

And we, of course, asked him about the triple point asset thesis, which we are two for two on guests giving the general thumbs up on the triple point asset thesis for Ether. So, you know, big fan of that. So thanks for the thumbs up, Joey.

Yeah, absolutely. He also talked about uh we we talked about Ampleforth too, which is something that uh Pantera, which is his investment firm, invested in. And he used this term um Hayek money,

which is super interesting. We got into a discussion about like what is money in crypto and whether Ampleforth can be a good collateral for DeFi. That was a very interesting threat of conversation that I think listeners will enjoy.

Yeah, the the Ampliforth uh world is getting a lot of traction and a lot of uh attention. Definitely also from the Bankless podcast, but from also the the greater crypto world. So I'm definitely excited to watch that story play out and see how unique and different a currency can be, can come into fruition or not. It's an experiment, so we will see.

By the way, do you know what he meant by Hayek money?

Uh something I'm assuming closer to uh Austrian money. Is that right?

Yeah, totally. And and Hayek has this great quote. Um, the bankless Twitter handle tweeted it out

uh the other day, which is

this is Hayek. He says, I don't believe we shall ever have a good money again before we take the thing out of the hands of government. We can't take it violently out of the hands of government.

All we can do is by some sly, roundabout way, introduce something they can't stop, something government can't stop.

Hayek was talking about a privately issued form of money

that's issued in a sly, roundabout way.

that governments can't stop. To me, that is what Bankless is is doing, what crypto is doing with Bitcoin, with Ether,

and even maybe, maybe with Ample Forth, I don't know. Uh I think listeners can

be the judge of that in in this conversation.

Yeah, I think that's a good metaphor for what's happening in DeFi at large, right? So we also talked about the YFI token, the the GIFI token. And uh it's it's one of these crazy things that's really complicated, even for my standards. Like you I usually get uh and understand what's going on in DeFi, but this this YFI token uh broke through that barrier. I no longer understand.

But I do know that there's a lot of real stuff happening there, there's real economic activity with real value being created.

And you know, if it's if it's blowing by me, who spends all of my time trying to follow this space, like it's absolutely going to blow by everyone inside of any sort of government or or you know authority. And so

all of this crazy DeFi yield farming stuff is just like way too chaotic and way too complicated for any like a party or authority to even like be able to comprehend or follow or do anything about.

Absolutely. And that's kind of what makes this the most exciting place to be.

Like in general, right? So we're we're in crypto, which I think is the most exciting uh, I guess, technology, uh, social experiment uh that's that's happening right now in the world. And then within that, within crypto, we are in kind of the bankless community, the DeFi community. And that's the the locus for everything. That's that's

you know the center, that's the epicenter of what's going on. So you are in the right place if you are tuning into Bankless on a weekly basis. And uh we're just excited to share this interview with Joey.

Yeah, and and that was a little bit of a tangent that touched on a number of different subjects, but that reflects what this conversation with Joey was like. We touched on a little bit of everything, you know, just trying to retain our grip on comprehension on what's going on in this space.

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All right, let's go ahead and get right into the interview with Joey Krug of Augur and Pantera.

Bankless Nation, we are incredibly excited to introduce you to Joey Krug. Joey is a DeFi OG. He was the one who tried to build a DeFi protocol on Bitcoin in the early days, ultimately switched to Ethereum. He's the a co founder of Augur, and he's currently an investor of Pantera. He's got his his hands in a lot of different things these days, a lot of irons in the fire.

And Joey, we are super excited to have you on Bankless, sir. Welcome.

Awesome. Thanks for having me.

So, Joey, I think in this conversation, we really want to talk to you about your model for things, kind of your mental model for crypto. You've been in the space for a while, you've seen a lot of transitions and transformations, you've seen some things play out, you've seen other things not play out. So we want to understand your model for how you think about investing in the space in particular and just how the space might.

Emerge, you know, uh token maximalist, are you a Web3 guy? You know, Fat Protocol, Fat Money, there's all of these different kinds of categories uh that uh we could fit you under. We want to see sort of what how you think about the world of crypto. So maybe could you start by telling us a little bit about I guess Pantera's specialty? So uh maybe give some background on the firm where you're working, the investment uh fund that you're working at, and some background on that specialty. And then we can dig into some of the other investment thesis areas that uh that you're looking at these days.

Yeah. So at Pantera, you know, of course, as you know, we focus just solely on the cryptocurrency and blockchain space.

And we're looking at mostly seed and series A stage companies. So we invest, you know, pretty early on.

Um

and

I guess there's a wide range of things that we help people with, but you know, the short version of it is

we help them with strategy if they need help with that. We help them with hiring.

Um, we help them with you know go to market and connections.

If they ever decide they want to sell the company, you know, we help them with that.

Really just helping the founders out with whatever they need help with.

Some people don't need a lot of help. Other need other companies, you know, need more help.

Um

and that's that's pretty much it. You know, it's a

it's a simple business, uh, but there's just always, you know, the the devils and the details.

So what's Pantera's ideal product, right? So when you guys receive a pitch, what are you guys really looking for? Because I know you guys aren't just investors in like just tokens, right? You guys uh Pantera also has invested in Wire, which is an infrastructure company.

But you guys also have plenty of tokens on your balance sheet, if I understand things correctly. So when you guys are receiving a pitch, like what are you really looking for? What's like the golden product that you want to invest in?

Yeah, I mean, I think I think the most important thing, you know, like the coolest thing that somebody could pitch me is some some idea that has some traction. You know, I think um

Any sort of signs of traction is always the best thing.

Um

and then, you know, a little less generic than that. I think we're looking at

anything that's sort of

in DeFi somehow

or

um helps make that vision possible. So if you look at a company like Wire,