Joey Krug Talks Crypto – Augur and Pantera Capital

welcome to the show my name is Matt your host and today I am very lucky to be joined by Joey Krug Joey is the co chief investment officer at Pantera capital and the co-founder of auger and beam he is someone that I look up to in the space and I'm really excited to get his insight so thank you so much for joining us today Joey yeah thanks for having me awesome so I just want to start off with you know easy question here but for any of our audience members who don't know who you are if you keep explaining who you are and your background that would be awesome sure yes my background is primarily in in the cryptocurrency space the way I first got involved was just with mining Bitcoin in 2011 just did it at home on my desktop and I'm actually quite after a few weeks because it got too hot but then I generally do a lot with cryptocurrency again until you know late 2013 2014 when I kind of just got frustrated with the idea of digital gold you know Bitcoin was originally a payments to strengthen financial system and none of that really happened so so I looked at you know how you could actually disrupt that and then ended up you know helping start this project called augur which is a platform for prediction markets on a theory and so the idea there is you can create any sort of generalized derivative contract on anything anything from you know the outcome of sports match to you know the price of a stock at some future date very cool yeah we love auger and have obviously done a lot of work with auger and I think our audience is pretty receptive to auger so pretty innovative idea so my first question for you is is what industry is blockchain likely to disintermediate first and why yes I think don't I mean the obvious one to me I think is the financial system right so I look at the internet there's a better way of sending information around and so okay well the logical thing about disintermediate is things like encyclopedias things like you know newspapers things like that and that's essentially what happened if you look at you know blockchain tech it's a way to send value around so a way to send money around and so the kind of logical just like stupid obvious thing as well if you're gonna send money around you're obviously gonna have to disrupt finance to do that if I think that's some of the the first area I also like finance is an area because it's one of the few areas in society where if you have a better solution you know cheaper and more efficient people will use it because finance is so driven by you know kind of you know giving every last dollar sort of thing that it actually makes it conducive to disruption more than say an industry like healthcare where you can have you know something that actually does work but you know getting the doctor to use it is an entirely different matter interesting so finance first and I saw that you're working on a new payment focused cryptocurrency called theme can you tell us about what beam is trying to do to solve the shortcomings of cryptocurrency as a payment method yeah so I think if you look at you know cryptocurrency in terms of payments you know right now no one's to have a full payment system you might be basically media to have a solid education system a solid identity system you need the ability for merchants to or for certain merchants you have the ability to you know reverse transactions usually you don't want that if you're doing something purely clear to peer you probably don't want that but if you're doing something with a traditional merchant that might be you know a feature that you want so sort of opt-in features that you know aren't aren't even adoption on stuff like their client and then the other thing you need is you know for using currencies for payments you need currencies that aren't you know aren't really trying to be gold or aren't trying to be a digital commodity you really need something that's trying to be you know money and they give you like a Bitcoin I don't think it's it's you know finite supply but it's not very dynamic and so I think well you know a lot of people who originally got into crypto our very libertarian and taking of the goal is the best one monetary form that's ever existed I think there are lots of things that actually do work in the regular world in terms of monetary supply things like having dynamic monetary supply where you adjust the supply you know up or down you have these neighbors and you can pull and I think the reason why people don't like those is because they're kind of inherently undemocratic but they doesn't mean that the leavers don't work or that they're terrible ideas there's kind of people kind of convoluted to things but if you had a system where how you pulled those sleepers in kind of what decisions you made was actually more democratic you know I think like you had like a democratic version of the Fed it would be a lot more interesting the other thing you don't like about you know regular currencies is when inflation happens you get two based so if you had a hundred dollars before your money's not with 98 dollars anyone's cryptosystems you have the ability to basically make it so there is inflation but you don't necessarily get debased by what you know because inflation could actually go that the users as opposed to benefiting the banks who you know is to create money in their Canora economy so there's a bunch of different like things you can give them play around with there that kimmel haven't really explored primarily out of ideological reasons but they do seem to work recently well making the world I grew that and I'm actually really passionate about all of the levers and everything related to the Fed so plays into the next question very well which is you know as a hedge fund with you know with Pantera's as a hedge phone with equities you might be concerned with debt cycles the actions of the Fed a looming recession for example does any of that stuff matter to you when you're investing in blockchain and crypto currencies and do you think that crypto would increase in price or decrease in price during a u.s. recession yes I think it I think it depends on how bad the recession is you know if you look if you look past over the past you know couple decades bubbles have gotten more and more drastic than they were in the past I think the the kind of logic behind Medicine case you look like the dot-com bubble or to look at 2008 those sort of you know collapses in the stock market we're much more severe than what you saw in previous absent flows because because everything in the economy these days is just at higher stakes there's more leverage in the economy people are doing more things on margin and so every sort of cyclist is amplified and so I think that if you look at you know how does that apply to crypto well right now I think Kryptos early enough that you know if we had like a kind of traditional recession where you know yeah we saw a few quarters negative GDP growth and you know stock market was down 15% I don't think that would really affect crypto if we saw you know sort of 2008 scale recession where the markets down 40 50 percent and you have a year or two of of negative GDP growth I actually do you think at that point people would sell off officer crypto maybe you would see some volume of something like Bitcoin as kind of a hedge against existing financial system but I don't think you see you know buying it seems like a period where assets on top of this area where all these sorts of things there I think you'll become feel is kind of two baskets right this look the monetary hedge basket which is basically Bitcoin and then the new technology basket that's gonna like you know democratize finance maybe in the second basket during the recession that's probably gonna go down cuz people are just gonna try to buy a safer safer assets I agree with you I think that a recession would probably cause people to sell off crypto as they would view it as a speculative asset to try to pay off their their current liability so I agree with you there and it would be interesting to see if Bitcoin would would hold its value as it's a short time period of being digital gold here would really be put to the test mm-hmm cool so I wanted to ask you about the next crypto bull run we hear from people like Mike Novogratz saying that that there's a lot of institutional investors waiting to get into the market do you believe that institutional investors are getting ready to invest and if they do where do you think the money will go yes I think if you look at the institutional side I think institutions are like any other market participant in some regards particularly on the behavioral regard so I think if you look at institutions right now get on bottom to crypto a ton because of you know lack of lack of good qualified custodians – no there's no state street that's custody cooker right now that stuff's gonna change you know over the next few months I'm looking at the sort of stuff fidelity is talking about sort of stuff back is talking about all that sort of stuff is gonna make it so you have really reputable players custody and cryptocurrencies institutions will no longer be able to use that as a reason why they're not by but I don't think it means all of a sudden these institutions are gonna go out and buy a ton of crypto currencies I think what's much more likely is that you know maybe a small handful of institutions that kind of behavior can turn to behavioral biases will buy to their currencies but the majority won't and the reason that's right now we're in kind of like a range-bound you know bearish market and so even institutions you know who showed you know theoretically know better don't buy assets when they're dead on they'd like to buy assets from there running up and so I think you'll see this they kind of a hate like retail in that sense where you probably won't see a huge institutional influx until we start to see a rally driven primarily by the retail first in my opinion so like if you have a custody solutions plus or retail rally then I think institutions can add a lot of fire to it but I don't think you'll see like a institutional first rally I saw that Pantera actually invested in backed so what impact do you think back is going to have overall on the ecosystem yes I think if you look at the cryptocurrency ecosystem right now you have lots of you know centralized exchanges that you know the people have never operated an exchange before not only have they never operated one before whether you're not even willing to listen to people on Wall Street you have operated centralized exchanges for decades in know a thing or two about it you know not every single wheel should be reinvented so to speak like even over there there are parts of the regulatory system that work really well like things like price time priority that honor tries to you know maintain as well as it can and so if you look at exchanges right now lots of them have really high fees so they haven't figured out that the way you make money is in exchange is charging you know really low fees and trying to boost the volume to the roof as opposed to charging high fees on on takers of orders whereas the people running back I think understand that they also plan to offer custody and so the thing they really understand well is that okay if you have an exchange and you also have a custodial solution and people deposit the funds in your solution you can do things like lend those funds out while they're not using them and when you do that you can get any little funds and so you're not even charging them fees directly but because of the fact that they deposited your their funds with you you can still make money and that's the model that most regular currency changes aren't really doing and so I think long story short if you have a model like that you'll see a huge increase in crypto currency trading volume because anytime you drop trading fees you see pieces and falling to interesting isn't that in a way sort of counterintuitive to the crypto movement to have kind of a centralized party lending out these crypto assets yes I think you know you can always lend your own assets out if you want like there are there are margin lending platforms that are margin margin lending protocols but it's a sort of thing where like if if you want to try on exchange you have you know two options you can pay be exchanged directly in the trading and pay them per trade you know or you can um use a system this kind of subsidy subsidized by them lending out your assets and not actually pay X feet and so I think it's basically kind of giving people the option to do I think is what's interesting about it you know some users will never want to do that because they don't want somebody else custody in their funds and in Monday them to other people and that's perfectly fine I think other users will want to do that and so it should be an option I think that's a good point I didn't think of it that way so Pantera obviously manages a lot of money what's it like to manage a significant amount of money in a market with low liquidity are there advantages to that or disadvantages to that yeah I say there's more more disadvantages to that than advantages I mean if you look at you know market with with local quiddity it makes it hard to buy large quantities of the things that you do fundamentally believe in because there's not a huge amount of authority and it also makes it you know hard to take static positions things like that I do think one benefit of Louisville clarity is you know right now you have a market environment due to lack of liquidity due to the lack of you know folk there's some people looking at it where you have assets that are really kind of severely mispriced then you know you look at you have like coin market cap right now a lot of the top assets on there are primarily up there because they have good marketing or or you know the symbol looks nice or people like the name you know it's kind of like this market it reminds me a lot of the horse racing market a decade ago where you can make you could make a lot of money betting on horses that were actually fundamentally undervalued but people didn't buy them they didn't like to names then that market has since been taken over by institutional traders or rather institutional pop shops and it's super efficient now and then right now it goes kind of like in that early stage where you can still buy assets preaching flea you know something like major where you see a getting real adoption now the crisis is turning upward oxidations you think but you could have seen the adoption numbers way before a 16 G bot it and anybody could have bought that asset and realized that it was better than this you know even even better than something even you know 20 ranks above the nomicon market cap because it actually has you know fundamental usage in fundamental utility so I think those are kind of things there are benefits of you look better view I agree with that and that's what we focus on we're always trying to actually find fundamental value in projects and it's a passion of ours to kind of go through all those projects and try to find the ones that are mispriced like you said so definitely agree with you there you know in the same wine as the as the low liquidity do you witness a lot of market manipulation because of that yeah I think you know some exchanges have more market manipulation than others particularly exchanges to have you know zero trading fees because people tend to do things like you know manipulate volumes or do you watch trading and the exchanges in the crypto could go space don't really have good controls for detecting that sort of thing whereas you know they're people who detect that kind of stuff on Wall Street all the time if you do that behavior when one eye behavior is illegal so to even even ignoring the legal legality ramifications of it if you exchange will just kind of close your account and say hey you can't trade here in reims lighting the markets whereas in crypto you know you could manipulate a market and the exchange probably want to do anything now maybe the record will want you know like GG apps or Gemini or you know a handful of others they would like if it's like an overseas you know after the crypto exchange like very low chance they're actually you know monitoring the markets and catching people who are actually kind of closing their accounts down so you see that I don't think it actually affects prices that much you know the market it does look like something liquid assets looks like things you can say the top you know five or whatever it's hard to kind of affect the price long term with manipulation there because it the cost of manipulating the market gets to be pretty expensive but if you have a low order liquidity asset yeah there's there's kind of examples where you can look at you know Grant Clinton inflation um a good example of this is like you know if she's going on the West monthly market cap as you see an asset where the volume has just spiked you know ten to a hundred X normal daily trade volume and it's like that for a period a day or two or maybe you just a period of hours isn't the volume you know skyrockets back down that's typically marked market manipulation as opposed to you know all of a sudden the hundred next increase in interest in the asset right so how much training do you guys do are you focused more on the long term it sounds like by the way you're talking about it that you guys are focused more on the long term but do you do do it yeah we're focus more on the long term and we do have a multi-strategy fund list which can do some trading but right now it's mostly focused on you know long-term fundamentals kind of stuff very interesting I mean when you do trade if you do trade it out are the taxes discouraging for that because I know that that could be considered a taxable event yeah so you know where we're invested in our own funds and so were since we're US citizens you know we do kind of think about taxes when we're trading right because if you like yeah there's intelligence that goes into that right like it's like if you if you sell position that's up to X you're gonna pay taxes on that and so if it's up to X that's kind of like taking you know like a 25% haircut on the position so if you think that position is like over value by 10% then logically actually you shouldn't sell because you're gonna lose one money from that due to the tax impact you can also do things like you know you know tax loss harvesting where you have a position that's down position that's up and you want to edger the decision that's up you can sell some of the position that's down as well to reduce the tax burden and so yeah I think that that's not as relevant because you know you you want to pay taxes that you have to but you don't want to you know kill yourself and fees are from you know like for instance there are people who you know traded in and out of crypto a bunch and gotten a really tight high tax you know tax burden do that do that and then didn't keep save any money aside to pay their taxes and then now their positions are down 80% and then they don't have any money to pay the tax so be being cognizant of that is really important so that that doesn't happen that's I'll have to use the strategy of selling some that are down and some that are up that's a good idea so security tokens are we see as a really hot topic right now is this pantera excited about any specific security token platforms and how long do you think it's going to take before security tokens or reality yeah so we we invested in Harbor Park VC fund you know they're doing a lot of stuff on making it easy for people to do the compliance associated with issuing the security token um I think that area will be yeah a big area and the teacher I think it's kind of more of a you know nine to ten style improvement as opposed to zero to one either way I think if security tokens is if you think of you know stock exchanges today you know take Nasdaq as an example you can trade on the Nasdaq from everywhere in the world cuz the compliance burdens too hot for the exchange to do do compliance globally but if you have a you know smart contract operating operating the trading infrastructure then it kind of pushes compliance to the edges and so you could have different companies spun off in different jurisdictions they handle compliance for accessing the exchange from those individual jurisdictions and so it's almost kind of like a financial you need to feel fine about you know you know financials all about bundling or unbundling assets with crypto we're kind of unbundling compliance and so instead of one entity having complying on other countries you could have you know separate entities focus on what they're good at makes sense how did how do you guys how have you changed your strategy in this bear market have you changed your strategy or you guys just kind of staying the course with with the long plays yeah I think you know it's mostly to stay in the course you know I think with you know something like a bear market if you you know if you catch it early right if you can somehow time the market and catch it early that's that's great but if you don't it's probably better to just buying a quality assets that you think have really strong fundamentals in the long run and kind of hold those throughout it word originally looking at like some sort of quantitative strategies for for our more liquid fund but it really ended up just thinking now sticking with the sort of fundamental stuff because that's really what no monk most of our our backgrounds are is you know been in these markets since 2011 and I've seen kind of all the the peaks and troughs and generally I think the sort of the best way to make money in them is to buy things that are fundamentally sell out assets and you know when the market goes down trying to add to position if you have any excess capital you know if not just sort of stay the course okay so you're buying things with fundamental value is our private blockchains in any way a threat to public law chains like moving forward do you see businesses adopting private blockchains I'm sure you guys are invested in both but for the for the average for the layperson like is a private blockchain a threat to their portfolio when they're holding something they fundamentally believe that I don't actually I'm actively so no um you know the way I think about it is you have your private private blockchains are really kind of almost an entirely separate thing from everything else that's happening in cryptocurrency and blockchain tech there's a private blockchain and it's a lot easier to solve kind of all the problems that you might run into so if you look at the public side you know scalability challenges you have at least Fiat on app challenges you have all these sorts of problems that they have seen a really hard game theory problem so you have to solve and in the przemek watch-chain world it's a lot easy easier because you say well we just trust you know these twelve people or these twenty people these three carry and so all the problems kind of fade away initially just a marketing and you know business business development challenge to get this tech adopted on the private blockchain side it so IV those much more just regular kind of enterprise softwares and service companies as opposed to really even be in the the blockchain space and so I think if you have a portfolio of public assets in this market yeah you're really kind of buying more into the view that there will be this parallel financial system that exists where people can go to trade stuff they can't trade other places you know it's it's kind of like you know ready player one where you put on the headset and you're in this parallel universe now well that's kind of the same thing for for getting access to a public blotchiness you're in this parallel universe no and you can't read nothing so you can't trade on before and just like you know how in a video game you can easily get a really nice car so you might not have in real life you know you can get a million dollar sports car and grand theft auto or whatever you can create you know a huge beautiful nice sort of market on something like auger donna or dy/dx or whatever and you can do that really cheeky and it's in this kind of parallel side world i think if you have a public portfolio that's assets in this market that's essentially what you're betting on unless you primarily owned Bitcoin in which case you're betting on digital gold so I think that's one thing that people could could stand to to realize more is you know if you look at this market you have basically three areas to play you can play in the digital gold space you can play in like to enterprise software service space or you can play on you know we ain't just new financial systems gonna be like the next greatest thing since sliced bread I'm more in the third category I think that's a lot a lot more interesting than the other two I like the analogy for ready player one I just saw the movie Anna plane it was pretty good so auger is a part of this new financial and you know auger is awesome as it is but how are you going to acquire more users like is what's the strategy for getting people to realize that this this awesome DAP is available mm-hmm yes I think longer has you know three problems right now maybe for the first one is that you have to download this application and it takes you know hours for the thing to download and sync so you can't access it as a regular Internet today really or at least not easily so there's a 16 s you know one of the first problems the second problem is auger causing you is designed you know really focused on traders but consumers are not traitors and so if you want to have a larger market you need also have these interfaces to focus on getting so I think that's another another thing because you need to say you I wanted that you know $100 that Cavanagh you know is confirmed with the Supreme Court or I want to bet $100 that you know Elon Musk says something about the SEC on Twitter within the next three months you know the average person doesn't know what I want to buy 10 shares at 55 cents of share means but they do know I want about $100 on you want saying that really that means so the second thing is making like a betting interface and then the third and fourth things which are the most important is augers not you know scalable right now so if you try to use it you can't really do lots of trades pretty frequently which means that market makers can't show up and provide the quiddity even if they wanted to or if they can they can do it but Haslam has to have really wide spreads and that's just it as slow so that they're evident costs associated with Syria so there's still ability problem has to be solved and then the last problem is you know fiat on-ramps it currently costs you know a couple hundred basis points to get into crypto and i think a lot of the benefit of tech like augers is the fact that you can you know trade on something or bet on something in the cost is you know really really cheap cheaper than anywhere else is kind of the goal and so getting cheesy on ramps is kind of the last piece of that puzzle and so I think it's one of those things where you I don't really expect any product to get a doctrine until something is truly 10x better than everything else out there and you know augers has gotten to the first milestone which is that it works now the next milestones are going to be all about making it actually 10x better than regular world well I think the betting interface is a genius idea I mean there was a Cavanaugh market we just made a video on that and I think that way more people would be interested if they could treat it like a bet so that's that's definitely a really good idea I read your paper on fees I'm wondering to you since you see fees you know obviously the fees aren't actually big compared to other other creating other markets but since you you the fees is being too high what makes aetherium more desirable than something like gos exempt for example for auger yeah so II OS has two problems with it um you know the first problem is there's only pulling 21 you know nodes that are elected to kind of run the system and so they can do things like sensor transactions they can do things like you with each other they've already done those two things it's not like a conspiracy you can google it and find write anymore about it it's I think that's you know a big issue something like augured censorship resistance is really important the second thing I think is on the fie side of things you know the way vos works is users don't directly pay fees instead the creator or the smart contract developer posts a large amount of money kind of as a stake on EOS and then that kind of determines how many how much through but can go through it if you want more to go through it you have to stake more capital and so for that you gotta grand the numbers and I think it would be prohibitively expensive to run you know something like augur on on EOS today I've really did it the capital locked up costs and also didn't the fact that you know I don't you know if you know it would be like you know millions of dollars of capital locked up right so it you said that there's 21 delegates and they've colluded and it's sort of a centralized system do you feel that way about delegated proof of stake in general or are you kind of more more in line with proof of work like where do you think these mechanisms are gonna end up shape playing out yeah so I think um you know delegated for the stake so I don't think I don't think most watching to use proof of work you know a decade from now the only dust case I do think you know that most of them will use some formal through the stake in ideal a former crew mistake would be more kind of direct democracy where anyone can cite that and you know stakes their own capital in terms of delegated from mistake I think I think it is possible to do that in a way that's not you know centralized and kind of you know full of censorship and things like that I just think that the way he owes kind of set up their network I'm almost encouraged it and so what I mean by that is you know to all the delegate errs they kind of ran almost it's like a very political process like do you more like oh we have a delegator for us and you ever on website you know delegate your stake to us you know so get it's like a politician nonprofit the US government yeah and so you know and I think like a better way to do it would would be almost like you can even be like weird stuff where you have like you know a delegator you have the users to our back peanut delegator and the users you know run a piece of software that off change signs message instead of seeing like what they how they want to delegate or to vote you know we Gator does that and so I thought about this section for the u.s. democracy it's a way to kind of hack a representative democracy or a delegate of democracy into a direct one and basically way it would work is you know if the delegator does something that you don't agree with you know say like 60% of its users voted that you shouldn't have sense for that transaction during the first week of us anything below that was in they did it anyway what happened is those users would say okay goodbye and remove their stage from that you know delegate and delegate to someone else right now vos is kind of like the I think it's part of its cultural code tool you have to fit up the culture really well if you want to get something like delegate from state to work like it has to have like these sorts of checks and balances and you got to get a really kind of engrained in people's mindsets of like you shouldn't just blindly delegate your stake to people and trust them you should really kind of you know if they do something that you don't agree with you should really immediately stop backing them whereas now it's kind of evolved into this network where people this kind of back to delegate errs and they say okay you know you can kind of do whatever you want find it's not too offensive you know well we'll just kind of steps you know in Stefan and hide in the background so the thing just kind of very similar to having less democracy works today okay it's an ideal no I agree I think it's a really good idea I have my doubts that that human nature will allow that system to flourish but I hope that people you know take personal responsibility in a system like you propose would actually work because I would definitely be excited to participate in something like that but I'm not sure if if people like to do their due diligence in that way but so I want to ask you how is augur gonna be different in two years like what do you think it's gonna look like so I think in two years you know you definitely have you know everyone wants every trade inaugural take place using stable clients I think you know using something like die and fionna cost of onboarding will be very low you know think you know tens of basis points opposed to hundreds I think market crater fees on alcohol will trend down a lot either tens of basis points or reading zero you think I'd have competitive the kids and any people have you know a few contracts launched on top of lager that though their own you eyes kind of focus on specific use cases sir or niche markets on top of lager where you know people may trade through them and you know not even know until later on but they were using talker to use that system those will be some cool things I think you know hopefully we have some scalability solutions by them my time horizon on that is is kind of anywhere from you know six months for some lower hanging fruit stuff two to three years for more complicated stuff like sharding I think on scalability you have you know you do have products like thunder which are watching you know early next year that'll be about 100 X one scalable and etherium the problem is is you have to get you know you have to get other gaps to kind of migrate over well he's from parallel versions on thunder as well because we're starting to get this critical mass on that stream where you have things interacting that actually worked pretty well the other it's like right now for comic quarter one author and maker will interact pretty closely you know one kind of needs the other and then you know you look past that you'll see stuff like Dharma and dy/dx and those sorts of things become relevant Frogger as well they enable margin trading and you and your regular financial systems knows what your fundamental personal beliefs are about margin person gets a bit reckless to trade on margin but people want to do it and so and so you know having that as part of a functioning some instances in this kind of necessarily even you also have stuff like a public protocol which is a dark pool built on that area so I meant on all these things will interact with each other so it gets it gets difficult on the scalability things you're kind of forced to pick between if something like thunder does launch it works you're forced to pick between you know scalability and interoperability of cool stuff on etherium so it starts to become it starts become challenging I'm not sure how how that will play all play out we might see things like you know parallel systems of augur launched on other chains and then people kind of just like using both of them for a period of time until eventually you know sort of winces my contract race I don't know it'll be interesting to see what happens yeah III think it's interesting that he brought up thunder I didn't I mean I saw that project it's very interesting I I'm not sure exactly what the idea is but it basically defaults to proof of work if something goes wrong in the proof isn't there like a two layer system where it kind of goes back to proof of work if there's an issue yes I mean I think their fallback is actually mistake but uh but basically yeah the fast you know default speedy version is kind of similar like what ripple does and if that goes wrong then it falls back to its previous state that's yeah that's pretty cool so we're almost done here but I just wanted to ask you like why did you build auger um yeah base personally yeah basically I think like I really think there's only kind of one financial category of assets that's really gonna matter a whole lot in the long run and lease on block chains and I think that category is derivatives and the reason for that is they don't touch the real world a whole lot so it may be the case that there may never be you know the way a way to issue a security to open this compliant in every jurisdiction or anyone in the world can trade on you that's the dream that may not be possible but I'm very confident is is possible that we will have people are trading on fear that is anywhere in the world on whatever they want in a few years once once auger is scalable it's the best that's one reason why I wanted the surfing to exist in the world is I think if you have the ability to have rivets on anything you should have more efficient markets because you can hedge more risks you can also specially up another other list that may not have markets in other places and the cool part about that is you get lots of information as a by-product of it but you get a different kind of information so the world today has an information overload this is so much stuff out there the prediction markets are really nice because it's really concise form of information it's just a price and if you disagree with it you can you know bet against it and so you can take something it's like you know you could read a dozen articles about Cavanaugh hearings and and you know read tons of commentary on it discussing whether or not he's gonna get confirmed you could do all that that's a lot of time or you can just look at the market and see you all the markets has the other 75% chance getting confirmed he's probably gonna get confirmed you know making decisions based off that quarter now you have another thing you probably not gonna make too many decisions off that unless like you know who who being elected in Supreme Court is actually all talk to you which for most people it's not always not correctly but there are various you know no all offense where the consequence is very relevant like you could even imagine like markets on like how much damage like a certain types we will do or you know if you're a farmer on the hedge against crop risk or flood risk all these sorts of things it's hard to think of it you know everything kind of because the system like auger is designed to be very generic but we're already seeing people start to create things that there are no real world and a lots for like somebody created I'm working on you know indices for celebrities how what they'll do like you know you can buy like a Selena Gomez index or nothing like that and go long or short essentially her career and prior to that market the only way to do that would be to like you know try to sign her as a record label or something which which is very small a lot of people who have the ability to do that and so but now you can effectively you know that long on an individual person which is really weird and interesting and there's gonna be hundreds of other use cases that are just as weird as that one I think that you haven't seen yet I think we found one with with our Agra video which somebody actually paid to promote our video because we made a market will our video hit 5,000 views someone bet on yes and then they paid to promote our video because so there was a marketing use case a little marketing use case for order there that definitely gave our channel a little bump one thing I didn't hear about in your answer and I completely expected you not to say money but my question is like how many Joey grooves is it gonna take for for all of these apps to be developed like clearly you're driven by you know making an impact on the world but are there enough incentives for DAP developers to make more money or are they going to be leaning towards centralized apps because there's such a straightforward monetization path yeah I think I could depend yeah I mean it kind of depends like you know it's it's it's entirely possible that that you know stuff like augur and maker kind of you know one offs where it's really difficult to create a token model where all the incentives add up and things actually work smoothly really well everything just kind of falls falls out of the package together and becomes this you know cohesive painting whatever it may be that's you know really rare but I imagine we'll see more stuff you know like that where the incentives do work out or people can you know make money off of these things I think it's just early and so we haven't we haven't seen a lot of the stuff tested or collide yet but I'll change over the next few years as far as regular companies I think you know you could definitely make a lot of money creating a company on top of something like augur you know creating a company where you made markers on specific stuff or were you basically created like a prop trading firm where you took risk on either side of the market all those sorts of things are things that can be very profitable ways of profiting off of an underlying protocol and we will see people in the future realize that their base protocols are not monetizable invest they'll create businesses on top of their based protocols example this is something like Dharma you know they don't have a token associated with their protocol it's free to use but you know it'll probably someday build a business on top of it where they can you know you know going to right that's a good analogy okay awesome I got one last question for you which is what excites you about the space that we didn't talk about um answer a question night yeah I think me talking about most most of it I need it I think and I really think it just comes down to you know what letting people letting people access markets that they they haven't previously been able to and letting more importantly letting people create those markets so I think the most important thing is if you look at Wall Street the information revolution only touched it really only touched it unlike the you know you getting access to data side the trading side but it never touched creation of new financial instruments so when I say the one thing we get a touch on as much is you know what's cool about this tech is it revolutionized the creation of new financial assets instead look at the internet not only did it revolutionized accessing information but it also revolutionized creation of information before the internet you have to get on the radio you'd have to somehow get on TV or you have to publish a book or a magazine or a newspaper each of those things is relatively prohibitive I've never written a book I've never color magazine or newspaper maybe I've been on TV once I only heard of it on the radio but I've got only publish stuff on the internet and so you can see from that a very basic example how much it's lowered the barrier to entry creating new information and so I think the most important thing about this tech you know if people just remember one thing is it'll enable you to create new financial markets as well yeah and I think that's gonna be wanted to you know biggest most radical shifts of the coming decade awesome well thank you so much for talking to me Joey I really appreciated it most of these questions were things that I actually personally wanted to hear about so thank you so much for answering them thanks Adam all right

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