Crypto Stories: A Primer On Open Financial Primitives

Joining Erik for this episode are Felix Feng (‪@felix2feng)‬, founder of Set Protocol and Nadav Hollander (@NadavAHollander), founder of Dharma Protocol.Felix and Nadav explain their respective companies and what they are looking to do for the open financial system. They talk about how the coming wave of decentralization in financial services will bring the same accessibility and ease of use that individuals are accustomed to with Web 2.0 services to financial services as well.They discuss the opportunities for blockchain and cryptocurrency to scale given that as big as it has gotten over the past few years, they still account for only a minuscule portion of the value of the entire financial system. A lot of attention is focused on venture capital and how that could be disrupted by blockchain, but they talk about how debt financing is many orders of magnitude larger than VC.Felix and Nadav explore what the implications of everything being tokenized might be and Erik also asks about what they are excited about in terms of products and protocols in the space as well as what they would love to see built in the future.Quotable lines from this episode:“If the cost of issuing an asset goes to zero, what happens when everything is traded? Then things get really interesting when you add derivatives and loans on top of that.”“Imagine you’re in a virtual reality world and you’ve made a virtual piece of art that’s hanging in a digital museum and you get revenue from people visiting it every so often. Now imagine you tokenize it or draw a loan against it, and pay off your mortgage in the real world.”“If you look back on this podcast in 20 years, it’s probably not going to age well because everything [that will be tokenized] is going to be even weirder because we have had no idea what these things are going to look like.”“I think that blockchain is going to create new asset classes that will be tremendously more valuable and will look like almost nothing we’ve seen in the traditional world.”“If there are going to be monoliths that emerge from this in some capacity, they’re going to have to capitalize on some irredeemably scarce resource that can’t be traded or commoditized, and I think it’s likely that resource will be trust.”“The high end estimate for the value of all derivative contracts is 1.2 quadrillion. I didn’t even know that was the number after a trillion.”-Thanks for listening — if you like what you hear, please review us on your favorite podcast platform. Check us out on the web at villageglobal.vc or get in touch with us on Twitter @villageglobal.Venture Stories is brought to you by Village Global and is hosted by co-founder and partner, Erik Torenberg. Shawn Xu is our researcher, Colin Campbell is our audio engineer, and the show is produced by Brett Bolkowy.