The only USD you own is cash (Market Monday)

Moving to an open money system anyone can audit at any time
Ryan Sean Adams Ryan Sean Adams Oct 7, 20197 min read
The only USD you own is cash (Market Monday)

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Dear Crypto Natives,

When you deposit your cash into WellsFargo you no longer own USD. You own WellsFargo USD—a credit note for USD backed by the balance sheet of WellsFargo. And a promise from the federal government that your money will be returned if WellsFargo becomes insolvent—up to a certain amount of course.

When you deposit your BTC into Coinbase you no longer own your BTC. You own Coinbase BTC—a credit note for BTC. No promises from the federal government here. Your Coinbase BTC is backed solely by Coinbase’s balance sheet and security procedures.

How do you know these banks actually have your money?

You have to trust auditors. You have to trust institutional brands.

Can we do better?

Every year the crypto community organizes a proof-of-keys event where users are encouraged to mass withdraw their crypto money from banks to prove that they have the crypto they say they have. A useful exercise. Keeps the crypto banks on their toes.

But can we do even better?

The Maker system is an open bank. A money protocol. That means all activity in Maker is transparent—publicly available on the blockchain for any to see. A perfect, immutable record. You can audit it yourself—as of right now Maker has 3.2x the reserves to back its outstanding debt.

This is the ultimate destination. A world where every day is proof-of-keys.

We want open money yes.

But we also want open banking.

A money system where any individual has the power to audit both the supply of their money and the reserves of their banks. That’s the goal.


I gave 4 x 🔥’s for this video on ETH value by David Hoffman—while everyone’s preoccupied about Libra & SEC stuff the real internet of value is quietly getting built


Scan this section and dig into anything interesting

Market numbers

  • ETH mostly flat at $176 from $174 last Monday
  • BTC mostly flat at $8,144 from $8,132 last Monday
  • Maker stability still 10.5%—but vote in to decrease to 8.5%

Market opportunities

New stuff

What’s hot

Money reads

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Check out a few opportunities I’m capturing right now with my crypto money

Explored a DeFi credit card. Update: Explored BlockCard last week. I like that they support stablecoins like DAI. Setup was easy. Two things I couldn’t get past though. First, they custody the assets themselves—I only trust a handful of providers for custody and BlockCard is not one. Second, they convert assets to TERN token upon deposit—this creates a tax event and the token seems needless, probably an artifact of ICO raise. (Btw TERN token is Stellar not ERC20). I’ll be looking at other options.

Tried Floatify. This app wraps a fiat on-ramp with Compound DAI lending to make it more user friendly. Floatify, like many money protocol aggregators, uses Wyre for fiat on-boarding—unfortunately Wrye is not supported in my state so I could not proceed past signup. Fiat on-ramp continues to be the biggest growth drag for open finance.

Tried Outlet. Similar to Floatify but with a nice mobile app experience. Unfortunately I couldn’t get past the Wyre on-boarding once again. Nothing against Wyre—they’ve made AML/KYC 10x easier for money protocol aggregators and I love them for it. But the jurisdiction by jurisdiction requirements of legacy finance really slow us down.

USDC on Coinbase. Converted some USD I had sitting on Coinbase to USDC to get the 1.25% APY in interest rewards. I can’t help but wonder though—is it worth it? Effectively, I’m giving up the FDIC insurance on my funds in exchange for 1.25%.


Make time to complete this assignment before next week

Stake test ETH in RocketPool. (30 mins) ETH staking is coming soon—I want you to be ready to stake when the time comes. This week we’re going to get ready by trying the RocketPool Beta.

RocketPool is an ETH staking pool allowing you to stake with as little as 4 ETH. It also features smart-contract custody and decentralized node operation—crypto exchanges won’t have this. Also, given staked ETH is locked in the Beacon chain until dev is finished RocketPool provides a nice liquidity option through rETH—a token note redeemable for staked ETH. You’ll be able to sell rETH on exchanges.

The best way to understand ETH staking is to give the RocketPool testnet a whirl:
(Requirements: MetaMask)

  1. Go to
  2. Follow the instructions for regular RocketPool user
  3. Get test faucet ETH
  4. Stake your test ETH

You can also test withdrawals to receive rETH.

I still expect ETH staking to be available in Q1 of next year. RocketPool will be one of several staking options by then. And I also expect RocketPool to be one of the most bankless options available, aside from running your own staking node of course.

More on staking:

Extra Credit Learning


Read my takes but draw your own conclusions

  • Rune from Maker comments on KYC collateral in MKR. This debate isn’t going away—it’s good that Maker is considering a Pure-ETH DAI in addition to a multi-collateral DAI so both experiments can play out. Ultimately, I think Rune and Maker holders will optimize for growth which means being open to both options. The question remains: where will Maker fall on the spectrum of crypto bank vs money protocol?
  • Good analogy for ETH 2.0 roadmap from Ben Edgington: “My mental picture is of building a house…at the beginning, it seems to go very slowly as holes are dug and foundations laid (this is Phase 0). Then the walls go up and the roof goes on very swiftly (Phase 1 and Phase 2). Finally, things seem to slow right down again as the plumbing, wiring, fittings and decoration are done (making it habitable/usable).” The launch of staking is Phase 0.
  • Bitcoin Fee Market will require Bitcoin to make a choice. Pick two: Fixed money supply, proof of work, or adequate security. Bitcoin will need to address this trilemma at some point in the next decade.



Tweet me your question—I reply to one per week

Question from anonymous:
Are you shifting your entire thinking to start calculating your net worth outside of Fiat?

My answer:
Yes. I encourage those in the program to calculate their net worth in three denominations: USD, ETH, and BTC. The goal is to increase all three in the long-run primarily by increasing the last two.


Some recent tweets…


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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.

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