Bootstrapping a Career in Crypto w/ Nick Westlake

**Speaker A:** Hello and welcome back to the Strange Water Podcast. Thank you for joining us for today's conversation. In this industry, so often we jump straight to the technology and the rapidly shifting ecosystem that we often skip past the behind the scenes dynamic that underpins all industries. The careers of the folks that will their ideas into reality. Crypto is particularly interesting because we're not hooked into the traditional system that push people into their life's calling. Life's calling. There's no trade school or recruiting system to break into being a builder in these early days. Each one of us needs to find our own way to the blockchain. And then each one of us needs to figure out how to build a career centered around it. Today we will be speaking with Nick Westlake about his path to where he is today at Off Chain Labs. In this episode, you'll learn a lot about what it means to work your way from a random discord participant into one of the best and most well known connectors in Defi. Nick's story, although still very much in its opening chapters, is a reminder to all of us about what it takes to be successful. Passion in what you're building, the ability to think big based on real world experience, and above all, a fun, friendly and generous attitude. Before we begin, please do not take financial advice from this or any other podcast. Ethereum and decentralized finance will change the world one day, but you can easily lose all of your money in the process. All right, let's get started. Nick, thank you so much for joining me on the podcast. **Speaker B:** Hey, my pleasure, Rex. I'm glad to be here. **Speaker A:** Awesome, man. So before we kind of get into it, can you just give myself and the audience a little bit about your background and maybe not how you got to where you are today, but how you got to crypto. **Speaker B:** It's a great question, right? It's a unique question that almost everybody has almost a very different answer to. Because this is such a young, I. **Speaker A:** Guess the most boring question with the most interesting answers. **Speaker B:** Exactly. Right. I've heard the most wild things of all time, but mine's not wild in the least. Very straightforward. Mid 2010s. I was in college trying to, you know, surfing the Internet, et cetera. And I mean, to be the most frank as possible. Right. Like we were trying to order some stuff off the Internet that you just couldn't order with a credit card or a bank account, quite frankly. Right. And that led U.S. government treasury bonds. Right, Government treasury bonds. Correct. So that led. That led me and my acquaintances, if you will, to find alternative methods of payment and it ultimately led to a peer to peer Bitcoin network of trading and whatever you want to call it. And that was my first little introduction, right. And I didn't really understand, you know, being a stupid, dumb college kid I guess you could say, just didn't really understand the, what the potential was for a lot of this stuff, right. Like Ethereum had like just come out not really knowing what a smart contract was or you know, the programmable money aspect of it, if you will. Right. It was just like oh, Bitcoin just, it's Internet money and you could just transact with things on the Internet, right? I don't know. Fast forward. Out of college I worked very mundane, boring gig telecommunications. I was selling fiber connectivity like failover solutions for like mid sized firms, whatever business firms, etc. And then I, I got into like a, an on chain Tron project to be honest, so. Tron. Tron, yeah, Tron. Holy shit. **Speaker A:** You are actually the first person I've ever heard that organically use Tron. **Speaker B:** Not by choice, no, not, not to knock on Tron. It's got its use cases but. But yeah, I worked for, for a little project there for a while that was kind of my end and then it just kind of sprouted right from there. So to, to where I'm at today. **Speaker A:** So yeah. And again your journey from you know like putting your toe in the water and Tron to you know, off chain and like the man, like we're still all at the beginning of our careers, we're at the beginning of this industry. But exactly. Anyway, that, that, that's a story we need to get into. But like I guess while you are in college partaking in E commerce, like what were you studying and like, and you. I guess, I guess like it's interesting to me that you interact with this technology for a real use case and didn't see the vision and then came back to it later. So. Yeah. What were you studying? What were you thinking about at the time? **Speaker B:** That's a great question. College man. I went into college not knowing what I was going to do. Can I curse? I won't curse. I came out of college not knowing what I was going to do. I went for like, just like a, like a business degree. I literally graduated with a business admin degree. Like what do you do with that? I guess you go do random business things, right. And then after college again, I had no idea what I wanted to do. And it was that whole 2018, 2017, 2018 run where I Went, oh, okay, I think now this can actually go somewhere. I always had an interest in financial markets and things of that nature, but wasn't like privy to investment banking or you know, financial advisory, whatever you want to call it. Right. And this was kind of like the, the end for me, I guess you could say. And then as I got smarter and more mature, quite frankly, I was like, okay, there's actually some utility to this and different types of use cases and things of that nature. So. And that's when I, I know I started going online and venturing off into various different discord chats and telegram chats and kind of just not educating myself per se, but I guess you can call it that, but like immersing myself into the culture, quite frankly. Right. And that kind of pickled my interest to a certain extent where I decided I was like, okay, digital assets and cryptocurrency are what I'm, what I, I'm most interested in. I haven't been interested in something like this basically my entire life besides, I don't know, video games when I was 13 years old, right. And I just gravitated towards it, man. And it almost came natural. It felt natural to me in that sense. And, and it was, it's been basically game over since then if I haven't looked back. **Speaker A:** Yeah, yeah. And I can tell from your beard you are either, you're either a lumberjack and have never touched a video game or like you care deeply about them. And I just, I think that all of us who have like grown up gaming like this technology is like so much easier. And it's part of, it's part of the story of Ethereum, right. It's like 13 year old or whatever. Vitalik like getting mad that they took away in World of Warcraft. And you know, I just, I vividly remember when I was in college, my dad was friends with the, the dad of the guy who started Riot Games, which is like League of Legends. And so we, we went there, went to go visit and I'll never forget as we were walking out of Riot Games, who was already like $100 million company and like weeks later would be a multi billion dollar company. He looks to me and he goes, can you believe that they built a business selling things that aren't real, real tangible. **Speaker B:** Right. People have a hard time. **Speaker A:** In my head I was like, I mean, yeah, like what do you. But I do think that there's just something about like the way we grew up and what we're 100%. **Speaker B:** Well, one great example of this, honestly is I was a big RuneScape guy. **Speaker A:** Yeah. **Speaker B:** And the grand exchange was like this peer to peer marketplace that you could go and sell your in game items too. Right. And it was kind of like that, that forefront, if you will, of the new frontier kind of that we live now at this peer to peer network that you can, you know, talk on, transact on whatever you may be. But. But really those online marketplaces, if you will, really blossomed my a lot, I think a lot of people's interest in the types of these things because I can't tell you how many times or even co workers that I have and they're like, hey, did you ever play runescape? I'm like, yeah, of course. And like did. The grand exchange is kind of what piqued my interest in this crypto stuff. I'm like, oh man, that's like. It's a reoccurring them almost. **Speaker A:** No, for sure. I was just actually having a conversation last night with someone who's really deep in the Web3 gaming space. And the, you know, like where we kind of settled is like, okay, yes, there's things like Ronin and or sorry, like Axie and which is essentially just like okay, you have your inventory but we're going to put it on chain and call it a crypto game. And like okay, right. And then there's like some people that are doing somewhat interesting stuff by like doing things with smart contracts where the smart contracts compete and like, okay, like whatever, but I mean like for us people, I'm not even gonna call myself a gamer, but one who partakes in games. It's like just so obvious that we have real economies in games right now. Like whether it's World of Warcraft or whether it's like EVE Online or Everquest or whatever people pay real money for, for those things. And like, you know, my gigabrain thesis on where web game web3 gaming comes from is someone just builds the first bridge from a centralized game to blockchain. **Speaker B:** That's a very interesting idea. And just a small comment on that. I'm not sure if you're privy, but EVE Online just raised like 4. I think it was $40 million. I'm unsure who read the round, who led the round, but it was for their Web3 gaming initiative. So yeah, 40 Ms. And Eve Online is going to come on chain hopefully you know, sooner versus later. But that's like a huge step, right? That's a AAA, you know, game that's been around for what, 15 plus years at this point. Don't quote me on that. Might be less, but I know it's been around for a while. But that's like a first instance of, you know, large AAA gaming studio or game coming kind of making that, that first leap. So it's great to see. **Speaker A:** Yeah. And we'll stop the gaming conversation here. This is not, I'm not even. We're not gaming people. It's not a gaming podcast. But for anyone who that didn't follow and you don't know what EVE online is like, that is worth knowing your history and like that will show you what like Internet economies can be. And like if you understand what has happened in Eve online, Ethereum is just like such a no brainer. It's almost like I can't even believe we're this far behind compared to where we've already been. **Speaker B:** I would wholeheartedly agree. **Speaker A:** Yeah, definitely encourage doing more research on that. But let's get back to Nick. So where I met you was actually a couple months ago this year or sorry, a couple months ago last year. And it was in the Umami discord. And I think there's a lot, a lot of things to say about Umami, especially like over the year. But I want to start this part of the conversation is like, can you talk to me a little bit about broad strokes, how you get from this Tron project to finding yourself not only in like core Ethereum, but in the bleeding edge of like these scaling solutions. And you know, at the time like Umami was just a Treasury and like what, what, what brought you here? And I guess like the point of this question is to talk about like, what is the journey from like participating in a project to like really becoming like a career crypto person that's contributing to crypto projects? **Speaker B:** That's a, that's a great question. And where I start. So the Tron project was first. Right. And that kind of gave me my foothold, if you will, on kind of the culture, how, you know, blockchain companies operate, how they, how they function, things of that nature. Right. And then once I got that like experience, I worked there for about eight, nine months. But then I made a jump to a centralized exchange. But it's, it's geared towards more enterprise institutional investors called S Fox and it's a shop out of San Francisco and I actually worked there for the last two years before I made the jump here. But while I was doing so, right, like, you know, you work at a centralized exchange, you know, you get privy to the coins that are coming out. The type of different networks, things of that nature. Right. And so I never really left the, the ecosystem, if you will, from, from Tron to where I'm at today. And you know, while I was working there, you know, I've always been not a maxi per se, but I understand the Ethereum and how the back end technology works versus you know, some, some other EVM compatible chains, et cetera. Right. And it kind of just resonated with me because it's a very decentralized network in the sense that there's validators all over the world and there's not one single entity kind of operating the chain in itself. Right. And just kind of when that whole I guess rise in 2020, right after the pandemic started happening, right, we started kind of seeing this really large influx of on chain activity. I was just like, oh, okay, well this is, you know, this is, this is going to be something at that point, right? Like it was just after defi summer, you know, you had all these projects like yearn who, who were just like literally just a couple of months old and but you know, I saw the potential of that, right? And then, you know, operating on that chain, you know, eating shit coins if you will, meme coins, you know, you had some nice blue chip coins as well in your portfolio. But you know, along came summer of 2021 and I guess, let me preface like always the cool thing about crypto is that like, you know, if I want to go talk to the founders of Coca Cola, like I can't or they're dead, but like I can't go do that, right? Like I can't, I can't hop in a discord chat and at somebody that has founded, you know, a multimillion dollar or you know, mid nine figure protocol, whatever you want to call it. And that was another thing that kind of drew me in. But always, you know, throughout that whole year while I was, you know, operating on Ethereum, Mainnet was just immersing myself in various different kinds of tokens, various different types of communities, things of that nature, just getting like the overall vibe, if you will, and things like that. And then you know, August of 2021 came along and arbitrary launches mainnet. And I was like, okay, well this is cool. I wasn't very privy to what an L2 was at that point really. Right. Like on a very, very high level I was, but not immersed like, like I am today. But so I did my first bridge over there. Right. **Speaker A:** And sorry for those of us that weren't around during that time. Can you talk about like what was going on in the early days of Arbitrum, like what, why were you bridging your money over? **Speaker B:** Yeah, that's a great question, man. And so let me start. So I was bridging my money over because I was curious, quite frankly. Right. Number one, I was very curious, like what is this? They said it's a layer 2 scaling solution to Ethereum. Right. It rolls up to Ethereum, so apparently has the same type of security etc. So I was like, okay, well number one, I kind of feel safe to bridge my cash over here. And number two, again I'm very curious, right? And in the early days of Arbitrum it was the Wild West. People say, you know, permissionless networks are kind of the Wild west, right? Because you don't need somebody's permission to go and launch something on there. But it really was. Right, like you had the Nien cat, which was the first farm there, that rugged. I was, I was a victim of that, if you will. But and then just like these meme projects that kind of come when you know, new chain launches, obviously you had scams, grifters, etc, but what's really cool. **Speaker A:** Isn'T a piece of that history that it was like only extremely recently that the like daily usage on Arbitrum surpassed that like original like exuberance and like. **Speaker B:** Rugged of the, the tvl. Correct. Right. So the TVL skyrocketed, it dipped a little bit. Right. You had that grace period, if you will. Will. And now we're back up to all time highs at this point. Right. In terms of tvl. But, but really the early days were just, you know, I mean unlike on every chain, you had, you had, you had the, the grifters, of course, but then the, the cool thing about Arbitrum is that the technology is sound. It is an optimistic roll up with working fraud proofs. Right. And I think that attracted a lot of smart folks, a lot of smart engineers, a lot of smart builders. Right? And then you had kind of the OG protocols if you will start kind of coming like, like gmx, like Dopex, like the Jones dao, right, Like Treasure Dao, right. The gaming studio who's seen enormous success at this point. And I think that's a true testament really on the type of roll up that Arbitrum is. And I mean from, from, from, from that. Right. It just has really has just blossomed into this very vibrant ecosystem that has protocols in every vertical gaming, NFTs, DeFi, social FI, you know, you see some, you know, everything in between NFT5. Right. Like that didn't exist in, in kind of in 2021, where I can go take a loan out against my, my NFT if I wanted to. Right. So, and not to mention, right, it's a, it's very cheap to transact on Arbitrum. It's, it's very fast, unlike, you know, Ethereum, Mainnet, et cetera. So I also think that the UX of it as a, as a whole, if you will, is much smoother than operating or transacting on Ethereum maintenance. **Speaker A:** Yeah, I mean like objectively speaking, right. And whether that's on like on the timing or the cost and everything. And a quick plug for myself every morning myself and a couple of the like Defi Media crew do this daily news show called Leviathan News. Check us out. But this morning we are actually having a discussion on, you know, it's just like really interesting when you compare Arbitrum and optimism in terms of like, just like, I don't even want to say like tvl, but like true activity and like the English meaning of that word. Like today, like Arbitrum is this like vibrant thing where to your point, all of these like varied applications, whether it's like literal DJ and gambling on GMX or like trying to push the boundaries of gaming with magic, or we just deployed a Gnosis safe. I did it on Arbitrum. And then you look at what's going on on optimism and it's like, okay, that is basically a chain that supports a single Dex. And so I had some comments on why I think we got there, but I guess to skip ahead to the part where we're talking about Arbitrum, do you have any thoughts on how Arbitrum has been so successful in building a real ecosystem? **Speaker B:** Yeah, I mean, that's a really good question too. One that actually founders ask me quite frequently, to be honest, and, and the answer is really simple. Right. Arbitrum launched August of 2021. Well, it wasn't there. There was no token, right. So there was no monetary incentive, if you will, to come and build here. Right. So number one, the technology had to speak for itself. Right? And then on the really unlike the back end, if you will, the way that Off Chain Labs has and not anymore, Right. Because now the decentralized DAO foundation now operate Arbitram and Nova. But you know, in the past about that, in a moment it was off. It was off Chain Labs, right? And the way we just treat, and still do to this day, treat our protocols with, you know, obviously the utmost respect and then also provide them with the necessary resources that they need. Not necessary monetary resources, but resources such as marketing support, like technical support, business development support, service provider support, things of that nature. Right. And just being very hands on, if you will, with these, with these protocols. Number one, just, you know, the, the, the rapport that you develop with these types of folks by doing, you know, stuff like that really goes a long way. And I, and I think it shows. Right. Because very, you know, Arbitram is the talk of the town, if you will, right now. But again, it really was just how, you know, the pro. We, the resources that, you know, we provided to the, to the protocols itself. And again, that's a real testament to, I think, a lot of our success here, you know, specifically with GMX and some of the other larger protocols as well. **Speaker A:** Yeah, I mean from like the outsider's perspective, it's just like, okay, well why would I, like why would I have my capital on Arbitrum versus Optimism versus on mainnet? It's like, okay, well there's interesting stuff to do on Arbitrum. It's like, okay, well why is there interesting stuff to do on Arbitrum? It's like, well, because devs chose to build there and like when, when you just like look at this from the outside, it, it's just like very like, I don't know, it just like it is what it is and it's organic and like we go where the things are. But I think like what you're saying is absolutely right. Like that is not an accident. That is like a result of like, like, like real ground game being run. And like what ground game means in this context is like being able to like facilitate developers and make them want to work with you. **Speaker B:** Exactly, that's exactly right, man. And that's the sentiment that we, you know, we kind of get throughout the, you know, throughout the ecosystem when new folks approach us. That's the sentiment that, you know, they've heard and that's what kind of attracts them. And again, no, no plan on stopping any of that. That's what made us, you know, made us successful in the first place. So that's what's going to, you know, put us in a terminal velocity, as I like to call it, moving, moving forward for sure. **Speaker A:** And like there's nothing about like arbitrary, like there's nothing about Arbitrum, let alone all of crypto that's done yet, so. **Speaker B:** No, of course not. Right. And again, this isn't a, it's not a zero sum game. This is a, it's a multi chain world. There's going to be use cases for, for, for everybody involved and things like that. And so there's no, I'm not a maxi in that case. Right. Like I never have been, I likely never will be. And again, this isn't a zero sum game. **Speaker A:** Yeah, well, okay, so let's, let's put this on pause. Come back to like what Arbitrum is in a moment because I want to continue with your journey. So you are working at S Fox. You're realizing that there's all these tokens. Then you see this like new frontier of both like technology and maybe financial opportunity open up in front of you. You get in there, you lose a bunch of money to cryptokitties or whatever the, whatever they call it. Yeah. And so then what. **Speaker B:** Yeah, again, you know, so working out at SFOX for several years there. But I've always been like an on chain type of type of guy. I literally have never traded cryptocurrency on a centralized exchange. I've only ever used them as on and off ramps to get on chain. So it was basically just like kind of a natural progression for me in that sense. Right. I got on chain specifically, we're talking post 2021 August onto Arbitrum. Right. And then that was kind of during, right after they launched, probably two, three months. That's when the froth was really, really going on. Like Olympus, of course you had the, everybody else having multi billion dollar valuations. Basically it was all vapor if you will. But, but in that sense, right, like there was, I'll really play on the Olympus forks, right. They were, they were everywhere. They're on every single chain, right. And, and the first one on arbitrum was called 02ohm and which eventually turned into, you know, Umami Finance. And I took a real liking to the community there in that certain discord. And it was just because of the folks that were, I guess that were there that were, you know, talking with, et cetera, et cetera, that kind of shared the same ethos and values that you know, I kind of have myself. And so I just kind of gravitated toward that, toward that discord, right. And that community and that coin bag held it down about 90%. So that was fun. But the community was cool. So you know, I kept going. I mean, and then eventually, right, I mean to your point before Rex like got myself involved, started speaking out some of my ideas and things of that nature, right. And then like I guess the, the founder at the Time took, you know, took notice of that and kind of just invited me to say like, hey man, do you want to, you know, run some of our business development initiatives? Right. And I couldn't have been more stoked to do so. Right. It was a. On a chain that I thoroughly enjoy transacting on with a project that I thoroughly enjoyed working with. And so it was pretty much like a match made in heaven at that point or in that sense. Right. And then what that gave me was basically like not an in, but a purview, if you will, into the broader Arbitrum ecosystem and had me talking to various different protocols on the network and, you know, seeing the inner workings of them and their mechanics and how they're, you know, how the project works, etc. And from there it's been just, it just kind of blossomed into this whole, into this whole thing. Right. **Speaker A:** So I think there is like endless things we can say about Umami. I think for me the biggest takeaway of Umami and is like Umami is a. It's like kind of a microcosm of like the arbor trim story, which is kind of a microcosm of like the crypto story which is. And you kind of alighted over it. So like just to be clear for the audience, like during these, the zero to ohm days, like it was a straight up fork and there was like probably no purpose for it. Like I wasn't around at the time. I don't know. Like I've heard a lot of people say that like some maybe shady stuff was happening on or maybe like the, like I don't even know. Like a lot of the people don't even know who the original core devs were are. Like, it was madness. **Speaker B:** Right? And then as most Olympus forks were. **Speaker A:** So no, yeah, yeah. Again, not trying to throw a specific shade but like I showed up in like March of, of last year or was that last year? I'm losing sense of time. But anyway, I showed up like right after the transition to Umami finance. **Speaker B:** It was March. **Speaker A:** Yeah. And like during that time it was like I didn't even know about this. Honest to God, I didn't even know it was an own fork when I first started. I didn't know about any of the drama. Like what I saw was this like group of like obviously kids, obviously like not super professional people, but people trying to come together and like build something that like they at least intended to be real. And you know, like the Umami story specifically is like pretty tragic and like fun fact. For the listeners. I was Nick's replacement after he moved on to off chain, same job. So like, I don't know, small world but the, the. So Umami like itself has like some, some sad stuff and like not even worth talking about on this podcast if anybody's ever interested. Like Flywheel did the perfect article the day it was going down. Got quotes from everyone. Like I refer you to that to talk about Umami drama. But the reason I bring this up is like to participate in this space is to watch like technology mature from you know, like tools to take advantage to each other, to like hopefully like legitimate businesses and institutions. And so one, I just like if you have any words or anything you want to say about like kind of that process and like how you experienced it. But two. Yeah, I mean what. Yeah, I guess do you have any thoughts or you want to share about just like the transformation you've seen in Umami and in Arbitrum over the last like year that you've been involved? **Speaker B:** Yeah, no, that's a really good question as well. I guess I can start with many projects in the past and we've seen this shift probably over the last say eight to 12 months, maybe even six to eight months, the shift in the type of how protocols are run in that sense, right? Like in the past they've tended to give large amount of their native token emissions out as quote unquote yield, right. Making what we like to call Ponzi nomics in that sense. Right. So the, so your yield could be like, you know, oh my God, I'm getting 500% APR. But yeah, you're getting it in this, in this Ponzi token, quite frankly, right. That if everybody else is getting 500% APR, right. That means it's. The token's likely going to be down only unless we're talking about signs of froth. Right? But until typically it will be down only. Right. And one thing cool thing about Umami and specifically actually I'll give myself a little pat on the back some. I. Something I said back in February of might have been 202021 or 2022. I don't even remember everything together at. **Speaker A:** This point, but I'm pretty sure next month is going to be May 2020. **Speaker B:** Right? But, but, but I. We kind of coined this and you know, others were likely doing it at the same time. Right? But like, because like cavemen, right? Like no single person found the fire. There was likely people around the world having fire at the same time. But this, this, this, this term like real Yield. Like what is that, what does that mean? That means you're giving out or not giving out, but providing if you will, quote, unquote, real yield in the form of stable coins, blue chips, coins such as Ethereum or Bitcoin, whatever it may be, in the form of yield instead of your native token. Right? And in the past you never really saw that, right? Any, any money that the protocol made, they just kept, they put it into their treasury, they used it for, you know, various different purposes, etc. Etc. And people were getting wildly rich off of this and that's not, you know, that's not, that's not a secret. And then there were some, you know, again, just some shift that happened, maybe psychological shift, whatever it may be. And in, in that, that, that, that time, I guess you could say where, I'm not sure if it was like communities that said this or like, you know, retail, whatever it may be, but a lot of protocols started shifting to this real yield movement where they, they capped the, the, I guess percent of native protocol emissions that you had and then started redirecting some of the protocol revenue, if you will, to back to the token holders. Right? And, and Umami was one of the, the first to type of do this with their marinade product, right? They, they were fortunate enough to have a, you know, $5 million treasury from the, from the, from the Olympus bonds at one point, right? So they, they, they deployed that in different, you know, various different protocols to, to collect, you know, some sort of yield, if you will, and then they redirected that yield back to their, you know, their coin stakers in the form of Ethereum and they still do that to this day. And I think that catalyzed, if you will, you know, alongside a lot of other folks that were doing at the same time. But I think that catalyzed, you know, the, the type of protocols and the type of tokenomics and designs that you see coming out today and that is treating the token holders the right, the right way, redistributing the, the revenues to them in the form of again, stables, blue chip coins so that you have a sustainable token, you have a sustainable business model, right? A la GMX, right? They have their GOP token where you know, X percent and it's very high percent. I think it's like 70 or something like that, don't quote me, but you know, percent of the trading fees get, get routed to the GMX and GLP stakers, right? And that's a, that's a viable business model. It runs the exchange Feels like the users of the Exchange also feel like they're getting treated well while using the platform because they're like, okay, I'm paying these trading fees, but I'm also getting a cut of that on the back end by you know, using and you know, using the protocol for maybe providing liquidity in the form of glp. And really I think that it's birthed like a lot of new movements like protocols that are up and coming are all very focused on revenue and distributing some sort of value, you could say, to its token holders and not just pump and dump and give out 5000 million percent APR, native tokens, etc. Right. So yeah, I think that's really what, that's, what's the really cool shift, I guess you could say, over the last couple of years and how the DEFI market in itself has really has matured. And it's matured quite fast. Right. Because if you think about DeFi D5, summer 2020 was probably the kickstart of a lot of this kind of this stuff. And you look at Defi, it's like in the whole crypto space, it's very, very small subset and I think it has a lot of potential and the, the movement that's happened in the last couple of years is moving towards that maturity and that potential. You know, I do believe that DEFI is, could be a thousand X from here, you know, in the next 10 years. And you know, these distributed systems, if you will, decentralized marketplaces, peer to peer networks, etc. You know, I do think that it resonates with a lot of younger folks and maybe even you know, folks our age as well, if you kind of see the potential of it. But, but yeah, man, I do. I'll, I'll leave it at that. **Speaker A:** No, yeah, I mean, I think I, it's just like so funny when I hear you explaining this stuff. I'm a little bit like, you're explaining like, like super basic business principles, right? **Speaker B:** Exactly. Literally. Exactly. **Speaker A:** And it is like kind of funny just like to kind of take a step back and like really think about like how profound it is that we needed to go through the experience of like scamming each other, like in a good intention way before we went back to like, oh no, this is just like how business works. **Speaker B:** No, no, I agree with you wholeheartedly. **Speaker A:** Yeah. And then like my other kind of reaction to that is it's really cool. I totally agree. To hear, just to watch the industry evolve and mature into. I just said it in a condescending way, but into just like being real businesses. But also what's happening is like we're watching the technology evolve to like be like, you know, Umami is doing this thing where it's like essentially just like yield farming with its treasury and paying it out. And like that's one innovation into maturity. **Speaker B:** Right. **Speaker A:** But the other one is like this whole like ve system, what the Curve has implemented, that convex built on top of that. I don't know, there's a whole bunch. **Speaker B:** Of them now is building. **Speaker A:** Yeah. You know. Right. And like, then that really opens up like entirely new possibilities. That is like the point of this technology. So all it's to say is like that whole set of innovation probably needs to go through the same maturity as the first one, where like we need to actually provide real value and not be scamming each other. But it's just like really cool to watch and like it's so cool how fast it happens and we can just sit here and watch the world change in front of our eyes. **Speaker B:** Exactly. Well, I mean, iterations, right after iterations is what drives innovation in that sense. But the cool thing about crypto is we tend to speed run things versus like the broader markets which tend to play out over longer periods of time. So I guess in that sense it's, it's a bit better that you do speedrunning. You kind of get it over with, it's out of the system now you're moving on to that next iteration. **Speaker A:** It's not only that we speed run it, it's that it's sped, run out in the open. And maybe those are consequences of each other, but you know, it's just like I just read a really cool book called World for Sale and it's about how the commodities industry like happened in like basically from like post World War II on. And it's just like all these crazy stories and it's, it's like really cool to read as a history. But literally the entire point of the book is that until like the 2000s, even governments didn't realize that like they were being controlled by like eight different commodities brokers, like Jump, that were like controlling like who got what at what price. You know. **Speaker B:** That's a very fair point. Right. It's almost like I'm trying to say it without being crude. **Speaker A:** Whatever. Okay. All right. Yeah, so, okay, cool. You're Adumami. And I can, I can even speak. **Speaker B:** To some, some of that too. Right. Like we were developing these vaults, right. These delta neutral vaults, if you will. Right. **Speaker A:** And, and you're around for both of them, right? **Speaker B:** Of course. Yeah, yeah, of course. I, I drove, I drove, I drove like 8 figure TVL into the OR had commitments. The 8 figure TV on the first one before it like it just didn't work. Right. And, and I do give kudos to the team where they, they shut it down very quickly and that was the right thing to do. But you know, in turn in saying that there was some actual serious interest in those vaults and that in from both. Right. From a whale perspective, of course I got on chain whales like oh, if I can get some nice yield on chain, but also from off chain funds. And not just crypto funds either. Some, some, some prop shops that had some interest in it because obviously they don't have to play by regulatory rules or anything like that. They can just, just it's private money. They could do whatever they want. But there was, there was some serious interest in these types of things. And to say that, you know, I think it regressed a little bit after the tumultuous times you could say we've had in the last, the last several months. Right. But you know, just to, just to point out like there was interest and you know that type of interest I don't think goes away. Right. It maybe just subsides a little bit and then when things come back, you know, froth comes back, whatever it may be, those interests become interests again and even more so there'll be more instances of it, I guess you could say. **Speaker A:** So okay. In that like. So let me explain to you what the vaults are, right. You as they actually are as a defi. Person and like, because, because my point is like I explaining that to a person who's not already drinking the Kool Aid on all of this, it's like cuckoo town. Yeah. So like why don't I try to like just tell you what it is for the audience's sake and then like can you help translate that and like help me understand like how you would talk to someone who like doesn't already own a ledger about like why this is a compelling investment for them. **Speaker B:** Sure, yeah, absolutely. **Speaker A:** Cool. All right, so Umami vaults, right? They you deposit. Well, we start with glp which for the purposes of this is simply like a trading venue that pays out very large amount of fees. And basically you can deposit 5 assets into GLP stablecoins, ETH Bitcoin link and the Uni Token Uniswap. **Speaker B:** Correct. **Speaker A:** Yeah. And like that goes basically you deposit one asset, you get exposure to all the assets and gop and GMX is predefined percentages and then like you farm fees based on that. The problem with that is like while the fee farming is very good, maybe you're not like interested in holding exposure to like any of the volatile assets. You just want the single sided asset. **Speaker B:** Yeah. **Speaker A:** And so what Umami did in two different iterations because the technology needed fixing, but at a high level, what they did is create a vault that says, okay, we will give you, you deposit your single asset and we will go out and deposit that into GLP and then hedge out any of your other exposures. So the net benefit is you get all of the fees from GMX but without taking any price volatility. **Speaker B:** Correct. Price volatility. If you were to do stables, but obviously you could. Yeah, yeah, sure, sure, sure. **Speaker A:** Okay. Like that was not English, I guess. **Speaker B:** For the most part. Right. It's. Well, I mean, as straightforward as it comes. Is that the, any sort of vault product? 4, 6, I guess layman's terms, right? Any sort of, every sort of vault product you can think of as a structured product and in like in a traditional, traditional finance type term, right? Where it's, it's a very intricate type of investment vehicle. Whereas, you know, you yourself cannot craft out the back end strategy, if you will. However, you can give it to somebody else that can, you know, extrapolate that back end strategy and do it for you for a small fee. **Speaker A:** Okay. And then so you're like, okay, fine, fair enough. I understand how like structured product works. I even understand how like administrative, like administrated investing works. But like where, like what risks am I taking and what. **Speaker B:** Great, great question. **Speaker A:** Why and, and where is this money even coming from? **Speaker B:** So number one, to address the risk question. So defi in itself is very inherently risky, right? You're, you're operating on chain. There's no regulations for the most part. There's no, I can call my bank up and say, hey, I made a wrong deposit, can you please revert that transaction? Right. Once the transaction is complete, it's complete. There's no quote unquote reverting. I mean, unless you hard fork the chain. But that's out of the question, out of scope. So the risk really comes in the, in two ways. Right. One would be on a, on a, I'm trying to figure out on a human level, I guess you could say, where the, the creators of whatever vault or contract they're using could put malicious code within that, you know, within that contract or vault. So they could just pull your Funds, right? And that's like smart contract risk. So that's, that, that's definitely number one in terms of vault contracts, right? That smart contract risk or vault products, I should say the smart contract risk is, is heightened if you will, because not only do you have the vault products itself, their smart contracts like those may be at risk, but would also whatever venue that they're either they're depositing your money in to use the, to collect the yield from, you have that smart contract risk as well, right? So I really think like you know, in terms of like security risk, it's really inherently on the smart contract risk also you know, if there's a, some sort of multi sig that could, that could rug you very maliciously, etc. Right. And then also on your own level, right, if you drop your ledger in a bottle of water and you then you just never wrote down your seed phrase, then you can never recover your funds. Right. It's banking yourself is not only terrifying to in a sense, but it's also a little bit hard. Especially you know, you know, setting up a ledger and things or treasure whatever you want to use in that sense. But to answer your second question, Rex, where does the yield come from? I think that falls onto what we were talking about before in this real yield movement, right? Like you're going to go park your, your users funds in a protocol that provides quote unquote real yield, such as GMX who provides kicks backs with the trading fees, right? They don't collect that all themselves. They redistribute that out to the token holders, the GLP token owners and DMX token holders. Now there's a lot of protocols, especially on Arbitrum, but also on various different chains have really adopted this GMX esque tokenomics if you will, with this dual token model where it's the liquidity token and just a regular native token to the protocol itself. Right. And it is a very novel way of doing tokenomics and there's iterations on it from, from you know, various different types of folks. But in saying that, right, in the past there wasn't many venues where you can go quote unquote collect real yield. But now as, as new protocols come and this new iterations start happening there there is, you know, a plethora if you will, of venues that you can go to to collect quote unquote real yield. And you know, one of those could be not even a perpetual exchange, but like I'm not going to, there's a couple on, on Arbitrum there's again, on other chains it's like gambling sites where you can go gamble on sports. You could play a flip game which is literally just press one or two and then you flip a coin and. Right, but they still, you know, they still adopted this like really yield movement where you kick back the, you know, the protocol fees to the users, right? So there's, there's definitely a different ways where you can, you know, or I guess collect that sort of, that sort of yield. And just one thing on that as well, you know, native, native, native emissions, they're not, they're not bad in a sense. Right? They're not, right? You can, you could pair native emissions with, with quote, unquote, real yield emissions, right, to give you that boosted apr. But where it gets bad is what we talked about before, where you have like a million percent APR a la Olympus Fork force, giving out just major amounts of tokens with no utility or nothing to really do besides sell them, right? Or if you wanted to hold them, you're a hardcore community member, whatever it may be. But yeah, just to say that, first. **Speaker A:** Of all, good job, you should get a job in business development. But I guess it's so hard for me to stand on the uneducated side of this, you know, and just like wonder at like what level, like at what point do you stop asking questions, you know, like never. No, no, no, not, not you, but like as a fund, right? Like if, if, like if you nick, say, okay, then we hedge out the price of this using perps. And if you're not familiar with perps, they're just futures contracts with like no settlement date. Like, I wonder if I like, oh yeah, duh, you had like hedge, no big deal. Or is it, okay, well who's doing the hedging? How are they implementing their smart contract as like, is it a pool based model or you know, and like, you know, so my brain's broken. **Speaker B:** No, I know, that's a really fair point. Right, because when I was talking to a lot of these folks about these vaults, right, you had people that really dug into the nitty gritty, like what you just said, like who's, who's doing the hedging? Where are these venues at? Right? And then you had folks that would be like, oh, 15% APY. Okay, where are you going to do it? Oh, that's it. Oh, okay, perfect. Take my money. **Speaker A:** Yeah, only one place. **Speaker B:** Great, cool. Yeah, yeah, yeah. So it really varies, right? And the type of, I guess it varies on the type of investor, the type of risk tolerance that they may have the type of due diligence that they just do. Right. It's a, it's a wide spectrum, if you will. Right. Kind of like the bell curve. **Speaker A:** Yeah, yeah, yeah, for sure. Okay, so like, very cool, like, awesome. Thank you for like spending so much time on Umami. But let's like transition you to off chain. And so like, my question, as someone who's like still on, like on the side of the line, that's about like building individual products, projects and products as opposed to where you are, which is like more on the infrastructure side and like enabling people to build projects and products. Like, what about your position in off chain, like made you jump that gap and like get you just excited about like what you're doing now? **Speaker B:** Great question, man. So my job here at off chain, so I work on the partnerships team, right? So it's that client facing, if you will, position. No back office though. I do a little bit of back office stuff as everybody does, but where I got specifically hired for this role called success management. Now you can think of a lot of the other PMs, if you will, are out there headhunting in like a traditional, like maybe account executive role, if your audience would be familiar with that, courting different types of builders, founders, et cetera, to come and deploy on the network, right? So I do a little bit of that, right? Everybody's a salesman in their, in their company, right? If they're good, etc. But really I spend most of my time with right on that cusp of deployment or post deployment. And I do, I work with them on a number of different things. So I'm on the line with five, six, seven protocols a day, really providing them with the resources that they need to succeed on the arbitrum blockchain. And I do that with a number of different ways, right? Like any sort of marketing help that may need, right? I help setting up AMAs, amplification of socials, things of that nature. I act as a liaison between our engineering team in case a protocol has a technical question, right? And they needed to answer. Deploying some sort of blockchain, some error, you know, is getting thrown, right? Always, always help on that front. Any sort of BD help that they want, right? Instead of going in there and you know, creating a discord ticket or a cold DM on Twitter, right? They can always utilize my team and I on getting themselves like more intros to the, to the ecosystem and then also vice versa too, right? So I'm so immersed into this ecosystem that when I'm talking to various protocols, right? I could say like, hey, I think you actually, you could partner with, you know, XYZ protocol, right? So that business development relationship kind of goes both ways, right? And then something really cool that I like to harp on to as well is that something I like to call infrastructure relations. It's a stupid term that I literally made up myself. And when I say that word, when I say the word infrastructure, I mean it very generally. You could be APIs, RPCs, our oracles, right? In all companies, centralized exchanges, market makers. **Speaker A:** Basically everything that's not within the smart contract. **Speaker B:** Anybody that services like an on chain DAPP protocol, right? Is when I fall under that infrastructure umbrella. So, and I, I know I, I develop relationships with these folks because when a protocol, I'll give a very crude example. When a, when a protocol comes to me and they say, like, hey, Nick, I'm looking for a security audit, I go, okay, let's jump on the line. Like, I'll never ask to look at code like that's very proprietary to everybody, right? Of course. But I'll say like, you know, how many lines of code do you have? What's your budget look like on this? What's the time horizon look like on this, right? Sit down with them to really go over like the scope of what they're looking for. And on that way, since I'm very familiar with a lot of these security firms, I can make an educated decision, if you will, that X or Y security firm would really be the best to service this project here, right? And that goes from across the line, like anybody, again, selling centralized exchanges because they all offer various different things, Oracles, you know, maybe you want to centralize Oracle, maybe you want to chain link whatever it may be, right? Just so we could again, service or I guess provide our protocols with the resources that they, that they really need to succeed. And that's basically what, what I do around here, right? It's, and I'll say it's the best. I wake up every day with a smile on my face. I thoroughly enjoy the work that I do, which I think is, is something very important, if you will. You know, I've been in positions where I'm just, you know, there to collect the paycheck and, you know, go buy the time, I guess you could say, until, you know, you find something that you really like. And you know, to my point before, like, I went into college not knowing what I wanted to do. Came out of college not knowing what I was wanting to do. Like, I Sold Windows, Telecom, the whole nine yards. Like just being just the typical, you know, shitty salesman, if you will. But. But no, I feel like, you know, I found that the industry that I want to work in and definitely I don't see myself moving out of this, this whole crypto space, you know, defi. Whatever you want to call it, like, anytime soon. I want to help the industry grow as a whole, and I want to be, you know, an influential part of that. And, you know, I'm very excited to do it. **Speaker A:** I think that all of us who have, like, really dedicated our careers and like, really, like, realistically the ones that stick around for at least one bear cycle, but, like, probably a lot of people get shaken out of their second bear cycle as well. I mean, this is my first one. **Speaker B:** Just to be clear. **Speaker A:** But anyway, I just like, you have to. I do think it's a very common experience that, like, I never was excited about work before. **Speaker B:** Never. Same. **Speaker A:** Likewise, I wasn't really excited about the future. You know, it just kind of felt like the world, like, was falling apart around me and like, we're managing a decline and like, you know, like the. **Speaker B:** Existential dread, if you will. Right, yeah. **Speaker A:** And it's just like, best case scenario, where like, I guess, like, managing climate change in a world that is, like, just getting more and more, like, crowded and polluted and unequal, you know, And I don't really think that crypto addresses any of the things I just pointed out necessarily, actually at all. **Speaker B:** But. **Speaker A:** But I do think that, like, what crypto provides is this, like, vibrant space where you're like, seeing the future change in front of you and like, walk and seeing the world as it could be and then like, just feeling like, so driven to contribute to that. **Speaker B:** That's a. That's a very fair point. And just to build on that too, right? We live in the United States of America and a lot of our leaders, if you will, legislative leaders, only think about cryptocurrency from the lens of the United States of America. It's like, only in America, it's nowhere else. But again, that can be, you know, further from the truth. It is a worldwide industry and many, many people benefit from, from it, right? Like, you know, you can get an airdrop that, you know, if you're living in a third world country, it'll change your life, right? It's. That's the type of. Of cool shit, if you will, that I. That kind of keeps me driving, right? It is this worldwide cohort that everybody's kind of working towards the Same. Right. I hop on a call with somebody from France. I have on a call with somebody from Hong Kong. Everybody's very happy to, you know, be there to chat, kind of all, you know, talk the same, have the same type of, you know, ideas, things of that nature. So it's. It's. You know, they call Ethereum the world's computer, right? And it's. It's like. It really is, to be honest. **Speaker A:** Yeah, No, I. I mean, well, I think. I think that. **Speaker B:** You. **Speaker A:** You, in order to dedicate your life to this space, you need to have been betrayed by, like, the traditional system in some way. And, like, in some way that was pretty violent and, like, showed you that, like, what you were told is not how it works. **Speaker B:** Um, that was the 2008 financial crisis for me. **Speaker A:** Yeah. Yeah. And, you know, we. I. I was. I graduated in high school in 2009. So, like, honest to me, like, that, for me, it might as well not have happened. Like, fortunately, like, I come from a family that, like, was able to weather it without, like, making it known to me, you know, and then, like, I just went to college for the hard years, you know, but, you know, I, like, I have, like, a few things that. But, like, the one that's just, like, so clear to me is. So my fiance is Russia. Russian. Like, born in Russia, moved here when she was 15, not speaking English, and, like, her whole family still lives in Moscow. Like, and I've been experiencing, like, financial sanctions for the first time, you know, but, you know, I just. I think to be in this space is to be, like, betrayed and, like, definitely international pilled in a way that's, like, not typical in this country. And it's just so funny to hear you because I totally agree with you. I was talking to someone on this podcast a few episodes ago, and I made a comment they got interested in crypto because they. Their brother went and studied abroad and he found nano to make crypto transfers to him. And my comment was, that's so cool that you figure, like, you actually got into crypto for a real use and not just rampant speculation. And his comment was like, yeah, but, like, I think that's, like, a pretty American perspective because, like, it's only in America that this doesn't have real use, where everywhere else it's, like, kind of needed. And so, like, also on this podcast, the episode that came out today, which will be last week for when this comes out, but was with reserve protocol, which are, like, doing stuff on chain, which is cool, but, like, what's way cooler is they have like, I think hundreds of thousands of people in Latin America. America, like using their app to store their wealth in like Argentina and Colombia in reserve like rsv. It's like a stable coin that is farming curve dollars. Like that is crazy. **Speaker B:** That's cool, man. That's cool. **Speaker A:** I know. And so I just think it's so American to just, just feel like we have, we have any say in this. **Speaker B:** I know, right? And to my point before, like, it's not. There's not an American industry and there's like actual people use it for actual shit. Like in like I mentioned Tron before as one of my first, you know, first at my first job in the crypto industry. But you know, there's. There's Tron. The Tron network is cheap to transact on and I know a lot of, A lot of folks in other countries use it to send, to just send money to, across the, you know, whether to be. Or even to just like do regular commerce in their, in their town versus like a very extremely inflated, you know, I guess native currency, if you will. And so, yeah, I guess you're. In that sense, you're right. Like, we're a little pampered here in the, in the case of actual, like real use case because, you know, we have built out infrastructure and the dollar and things of that nature. But there are, you know, there are people around the world that are actually using this stuff for, for like real serious things. **Speaker A:** Yeah, yeah. And I just, I think, like, I really believe that we, we have passed the Rubicon. And I don't know if it was when at the merge or even before that. But like, Ethereum is now inevitable. And like the decision that the United States makes is like, to our like, benefit or our detriment. But like, the reality is, is like Ethereum is inevitable. And like, look, man, like, I hold it for utility reasons. Like I, in the. During the January 6th when I was, I was on the phone with Wells Fargo Wealth Advisors, happened to be on the phone with them to talk to about moving my wealth, like money over and the capital's under attack. And so the thought that goes in my head is like, I need to know that if I move over to you that within four years I can have at least 10% of my net worth in another country. I don't know if I need to buy an apartment in France. I don't know, like, whatever. But like, I, like, I need to know that if I need to leave here, it's gonna be okay, you know, of Jewish Heritage. Like it's scary here, you know? **Speaker B:** Yeah, no, it's a weird time here, man. It really is. **Speaker A:** And so like crypto is a real answer for that. Like, I don't worry about that anymore. Like if I need to go to Mexico tomorrow, like, I don't need anything. **Speaker B:** You know, And I say, I say that too, right? Like, I don't have a fiance or wife, but I have a very long time girlfriend who eventually. That's my plan. Yeah, but yeah, we've been going on for like 10 years now, so it's quite a while. But she's not, she's at work. But, but no, I have the same thought. Like if I, if, like if what? If they make it like, you know, it's illegal to work in crypto in the States, like where I'm not, no. **Speaker A:** Choice but Dubai or Singapore. That's my question. That's my only question. **Speaker B:** Singapore. **Speaker A:** Both. **Speaker B:** Honestly, El Salvador is not a bad one either. Or there's a couple different places that you can get like permanent residency, but you always got to pay the tax, man, man, no matter what. The only country that does. It's the most ridiculous, ludicrous thing of all time. **Speaker A:** Yeah, well, you know, I don't know. Pick one and then buy your yacht. **Speaker B:** Anyway, I was gonna say. **Speaker A:** All right, man, before we wrap up, you know, as we discussed, like, I really didn't want this to be a, like podcast about like the projects. I want this to be about like you and your story and, and you know, just about like the people that are here. But with the last couple of minutes, I definitely want to just like give you a platform to like show whatever you want to show about Arbitrum and like to like anyone that wants to build on it. And just like say anything that you want to say because, man, I know that you're passionate about it and I know that it's like genuine for you. **Speaker B:** So I appreciate that. I'm not going to shill anything. What I'm going to say is that if you want it and if you want to work in the crypto industry, man, there's plenty of different avenues that you can go do so in whether it's like you, Rex, starting, you know, a podcast or, you know, being a BD at a small protocol and working your way up. This is an industry with very low barrier to entry, if you will, versus, you know, being a financial advisor at Wells Fargo. Right. And truly though, and it's, it's. I'm not going to say it's easy because it's not. You're gonna have to work hard, for sure. However, if you want it, that the taking is there for. Or I guess that whatever that term is, I forgot, but it's there for the taking, if you will. And so, please, you know, if it is your passion, do pursue it. You know, I've never regretted it once in my life. I don't think I will. You know, I've been rugged a million times. You know, I still don't regret it. I. You know, I take it as it is, but again, you know, it's. The barrier to entry is low, and, you know, if you want it there, there's various different ways that you can go get it. And I'll leave that. **Speaker A:** Awesome, man. No, great message. And, yeah, I mean, I think. And I think, like, it's about wanting it, and it's about, like, believing in what we're doing. And, like, the people that, like, get rugged and, like, hate it and walk away are the ones that are here for the wrong reasons, so. **Speaker B:** Exactly. Exactly. So, yeah. **Speaker A:** Cool, man. Thank you so much. So where can we find you? Socials? **Speaker B:** Socials at Island Underscore Westlake. And that's literally it. **Speaker A:** Island Westlake. All right, man, thank you so much. Have a great rest of your day. And, yeah, just. Man, thanks for joining the pod. **Speaker B:** Cheers, Rex. I appreciate it, man.