Crypto: A look at the DeFi environment for 2022

YouTuber Daniel Ramon joins Yahoo Finance Live to discuss the rise of decentralized finance as cryptocurrency trading and blockchain discussions have reached mainstream audiences in 2021, and the trend's outlook for 2022.

Video Transcript

- One YouTuber who I've enjoyed some of the videos from-- very happy to welcome him into the program here, to spotlight some of these biggest exploders in 2021 and some things to look forward to in 2022 on his channel, Danku_R. Daniel Ramon joins us right now to chat more about DeFi.

Appreciate you coming on, man. Happy New Year's Eve. Thanks for being here with us. You know, like I said, really good explainers and hands-on details that we can't really do here. But when you look back on the DeFi explosion in 2021, talk to me about what you saw. Because it's been so much so that you quit your job to be doing this full time now.

DANIEL RAMON: Yeah. First of all, thank you very much for the invitation. And as you said, right, every day, something new is happening. We often say, also, in this environment, in this community, is that one week feels like a year. Because if you just look away, new protocols are coming, new concepts are coming out there.

And it was, for me, just also a crazy journey this year, as you said, right? I started my content creator journey this year, focusing on the topics of crypto and DeFi, and I now also decided to quit my job. And I think what is important, what I uncovered myself, is that often it seems very complex, what's happening there, but the logic behind is very straightforward, in terms of that there are clear processes. We can really look on the blockchain and see what's happening there, and that is so fascinating for me. And, well, people asked me, because I did a flowchart on Twitter and tried to explain stuff, would you like to do a video about that? Maybe you can explain more. And I said, well, I can try. And now I'm here, right, after six months of really doing YouTube explainer videos about crypto and DeFi.

- Yeah, you and me both, man. I mean, it's been a lot of explaining to do this year. And I guess both of us really latched onto a project earlier in the year, which is, of course, Terra, and digging into what they're trying to solve-- a decentralized stablecoin. But much more being built on that network. And we look at Do Kwon, the founder of Terraform Labs-- he's been tweeting about some things to watch for in 2022. I'd be curious to get your take on maybe some of the themes he's been highlighting, when it comes to what Web 3, decentralized-- you know, all these protocols might unlock, when we look ahead. What are you keeping your eye on, I guess, for what to watch for next year?

DANIEL RAMON: So, specifically about the Terra Luna ecosystem, I think there are a few protocols that are coming live. We've just seen one of the biggest, probably, DEX launches just a few days ago, Astroport. But next year, there are more protocols coming that really try to kind of get DeFi to the next level. I can maybe mention PRISM protocol, which is a protocol that tries to defract assets. Like, when we talk about a coin like Luna, but also Ethereum, there is a yield part to this, but also a principal part. And a protocol like PRISM tries to then break it up, and then you can probably trade, already, with the future yield of this coin. And this is wild stuff that I'm really looking forward to uncover.

Then we have topics like Levana protocol. That is basically an acronym for "Leverage Any Asset." So they're creating tokens that have leverage in themselves. So instead of buying, then, Luna, we can buy a token which is called 2x Luna, which has leverage in it. And that's what's fascinating for me, really, for DeFi-- kind of this next level of what we can really do with the technology of crypto and blockchain.

- Hey, it's Brian here. I wanted to ask about just kind of the semantics here. Because I think the Jack Dorsey beef with Andreessen kind of highlighted the nuances around the term Web 3. I mean, when it comes to crypto, DeFi, Web 3, is it interchangeable between those languages, or are you seeing kind of moral lines being drawn between what is one distinguishable from the other?

DANIEL RAMON: Yeah, good question. I think it's a very, very difficult topic, which we're all trying to still uncover, right? I can tell you that myself, I'm trying to not say crypto that much anymore, and really focus on DeFi and Web 3.0. Why? Because I see that crypto has often this narrative of speculative asset, right, that people can trade about. But crypto is way more, in terms of DeFi, right? You can provide your assets. You can enable utility out there.

And for me, Web 3.0 is now-- if you take a look why it's called 3.0, right? So Web 1 was we can read in the Internet. 2.0 is we can create, be it on social networks or so forth. And now, the 3.0 comes from owning stuff. And that's where, also, NFT come in, there. And it's sometimes for me, also, hard to understand why people really focus on maximalism of Bitcoin or so forth. I think we're really here seeing something new. This ownership in the Internet is really something that will be, probably, really new to understand, also, in 2022, and for me, I think the biggest trend to also understand what can really bring to the table.

- Yeah, I think you're hitting on a lot of key points, too, because there's a lot of people who might have crypto-- you know, Coinbase is very popular-- and they might just own it and then let it sit there. But as we've kind of seen this year, there are a lot of things you can do to earn yields on a lot of what you might be holding in that wallet. In fact, Coinbase is earning the yield out there for you, basically, if you're just letting it sit there. But some of these things are complicated. So I would tell our viewers, look, if all this is flying over your head, you can follow him on YouTube and get more of the nitty-gritty.

But I guess, you know, what are you expecting to see? Are you expecting to see mainstream-- I guess, people who never dipped a toe into crypto-- doing that down the road, or do you think there's going to be something along the lines of a centralized institution that can maybe help walk them through some of these steps? Because it's not necessarily easy right now, for mainstream.

DANIEL RAMON: Yeah, great question. I think we will see that there will be more applications trying to simplify that, taking the benefit really of DeFi and bringing it to the people. But they don't really need to use it.

So that's also how I basically found Terra Luna as an ecosystem, right? Their whole purpose is that they're able to mint different stablecoins, be it now, of course, the biggest one, the dollar, called UST-- but then you have, already, the euro out there. So what it makes, basically-- it enables the mainstream to use, in the day to day, crypto, right? Because, let's be honest, if I want to buy something in a grocery store here in Europe, I still need to use the euro, right? So I think that there will be more apps simplifying the usage, then, of these kind of stablecoins or what it might be, to also bring the yield opportunity to my mom, right? That's what I say to my parents-- that they can use it. But I don't think that they will truly use it themselves, because, as you said, it's so much to uncover. I love it, right? So I think there's a lot to learn about finance, but I don't think that we can expect that everybody now sits down for hours trying to really understand this.

I'm looking forward to apps like PayPal on the blockchain, where, for example, with the power of Anchor protocol on the Terra blockchain, you automatically, on your dollars, earn 20% for sitting around. You go to the grocery store, and then you just, I don't know, want a hot dog. You pay for it. But the rest of the dollars that is sitting in your account is earning yield. I think that's the future that, really, crypto and DeFi can bring as a benefit to all of us.

- All right. And again, you can check out Daniel's videos on YouTube under the channel name Danku_R. Thanks again, and happy New Year to you.

DANIEL RAMON: Thank you very much. Happy New Year.