Vance Spencer: The FAANG of DeFi (S.M.E.L.L)

Thankless Nation, super excited to introduce you to another state of the nation. David, uh I smell the bull market. That's what I smell. Yeah. We're gonna be talking about some bull market narratives today with Vance from Framework. What's on the agenda?

We're just going to talk about smell. There's a reason why Ryan just said he smells a bear market. Uh, do we have the Fang of DeFi? Fang, Facebook, Apple, Netflix, Google.

Oh God, what's the other one? Uh I don't know, but I don't own equities anymore. Uh but Fang, it's like the uh all of the the staples of TradFi, the staples of Silicon Valley.

Vance thinks that there might be the fang.

Uh a foot in DeFi, uh, the tokens that are going to brew the staples of a DeFi portfolio. SMEL would be the acronym. We're going to get into what is comprised in this SMEL. But also there's some other bull market narratives that we want to touch on. Uh, Friends is sweeping through Crypto Twitter, is the app of the moment. Is that a sustainable narrative or is that a fad? Um, and then there's some other narratives that we're gonna talk about as well, such as ETFs and gaming and staking and on chain casinos. And so this is uh gonna be the topic of the show.

On chain casinos, eh. Guys, before we begin, we want to uh give you a message from our friends and sponsors over at David. As we get in this episode with Vance, I know he's one of our um you know one of our favorite market commentaries, has a really sharp sense of um you know when the cycles begin, when they end. And so I really want to get a sense of what he's uh looking at right now, what some of the narratives he's looking at are. I know uh we've talked in the roll-up a little bit about you and uh preparing your your your bull market battle battle station, yeah. That's I think what you call it. I think this for me will be an episode to start exploring kind of what the bull market narratives might be. And that is uh an important component, I would imagine, of the of the bull market battle station. What what do you think listeners should should know going into this episode and then coming out of it?

Yeah, I think that's right. I think generally the sentiment on crypto is that there is a bull market afoot. It's not here yet. And we're, but we're getting whiffs of it on in the air. We're smelling it. So

That was easy.

like, but there's a bunch of narratives as to what it could be. We're starting to get a direction, but we still haven't found the source, the source of the smell, the source of the bull market. Uh and so I think this is kind of the state of crypto twitters. Like, there's all these different narratives. Some of them, multiple narratives, might also be correct. Some of them might be wrong. Uh, and since we are, you know, preparing ourselves for this potential bull market, we need to try and figure out where the source of all the smell is. And so that is what we're doing here today on the show.

We're just gonna be smelling our way through this episode. Uh guys, we'll be we'll be right back in just a moment, but before we do, we want to thank the sponsors who made this episode possible.

Vance and Framework rode some legendary assets out of the grave of the 2018 to 2020 bear markets to their all-time highs in 2020 and beyond. Link, Ave, Synthetics, these uh tokens might ring a bell. These tokens were generally massive contrarian bets after the ICO mania of 2017 turned everyone off of tokens. Today we're bringing Vance back onto the show because of smell, S M E L L, not an odor, but instead five different assets. The Fang of crypto is the question we are asking. We're gonna run through each one of these, talk about the merits of each, and also some other bull market narratives that is running around the current crypto meta. Vance, welcome back to Bankless.

Thanks for having me. Good to be back.

Yeah, so let's start with the current narrative that's running around which is s which is uh social fi.

Uh, because we got to get this one out of the way before we get into smell. Socify, uh, friend tech is now sweeping through crypto, starting to poke through to mainstream, maybe. Overall, like what even if I don't think anyone really thinks that friend specifically is the app that's going to take crypto mainstream. Maybe you disagree. But overall, like, what are your learning lessons, your big takeaways from this whole friend phenomenon that's going on?

Yeah, I mean, first of all, you never know.

These things are uh

like the stuff that looks like a toy oftentimes ends up being really powerful. And

I was on Instagram this morning, and this influencer that I follow was like all about their friend tech shares. And this is someone who hasn't been involved really

in crypto since the last bull run.

And let's just pause because what that entails is they actually have to do some fairly sophisticated crypto native stuff to get their their ETH assets on the other side, right? They have to like

Their shares are, I guess, keys are trading now. So they've they've done it.

Wow.

Yep.

And uh

I actually, you know, we we invested in Bit cloud and it,

you know, I don't I don't think it worked. I think it's okay to say that. Um, but I I I thought it was an interesting idea in terms of,

you know, how do you kind of unify the creator economy with a lot of the fungible token action that we saw on chain? And

um

I I don't think the question is like, can and I said this before, it's like it's not like can you build it, it's like can you kind of

can you find a legal framework that you can fit it into where

you know you don't get

Taken to the cleaners by regulators immediately.

And I don't think changing

shares to keys is is probably enough.

But

For context for the bankless listeners, friends.tech used to call

them shares because you're buying shares in your friends. Uh this last weekend, they rebranded to keys.

Oh my god, I totally missed that.

Uh we can only imagine why. Yeah, they're called keys now, no longer called shares.

um keys.

But

like I I I really am a fan of the dev team racer and and I forget the other uh woman's name, but I think they're you know in crypto for the right reasons. I like them a lot.

Um, and if people remember, they they built Steel Cam, which was a consumer app that was around, I think, earlier this year.

Um, so maybe they weren't expecting this to catch fire like it has, but it certainly did. And I think now the question is like.

How do you ex post facto kind of stick handle your way around the obstacles that exist? So

you can make this interesting. But I think there's a path. Like, you know, this influencer on Instagram that I saw,

you know, they were telling their friends and like one thing leads to another.

But so what what's the concern here from a regulatory? Am I just stating the obvious by saying that Gary Gensler would would maybe think of all of these um these humans trading shares and everything's a security? I mean, it it's hard for me to um say that because like Gary just seems to think everything's a security.

So of course I mean I it's not even clear to me whether like he knows if Pokemon cards, if they're like instantiated as an ERC20, are uh a security or not. Is this the main concern that this is going to run afoul of sort of uh SEC as a regulatory body? Is that what you're inferring here, Vance?

I think that's the question. I'm not a lawyer, so I don't know the answer. But um,

you know, there used to be a uh uh a a market for the secondary or or take to trade shares and athletes. So like you get it like a percentage of their contract, and that was like highly regulated and existed on a a traditional exchange.

Um, and so there's like precedent here, but I'm I'm I'm just

they obviously think that they have a workable framework. I think people on Twitter, you know, there's opposing views. I think the question is who's right? And, you know, doesn't matter.

I think this conversation as to whether or not these things are like should be considered and categorized as financial assets that need to be regulated. It's part and parcel with this other half of crypto Twitter that's

kind of taking a more resentment stance towards friends, saying, like, great, our the breakout consumer application that we have is a Ponzi game that allows us to, you know, financialize our friends and speculate on them. And great, this is clearly our breakout apps are all Ponzies, Ponzi Ponzi games, not Ponzi schemes. And so like there's this growing resentment out of you know, a decent portion of of the crypto landscape is that we can't actually make any application that's not about.

Speculation and financialization and uh something that kind of resembles gambling. Gambling. Yeah. Well what's your take about that?

Speculation and financialization are okay. They're not evil in and of themselves. Um, I think if you think about the definition of a Ponzi scheme,

it's literally something that is financially unsustainable by design. These are not.

Ponzi schemes. These are just tokenizing shares of a person. And if they go up, down, or sideways, there's no perpetual motion machine that someone's trying to create.

And, you know, if if we could live in a