Decentralized Finance & Cryptocurrency, Ft. Felix Mago

In This Episode of Frontier3

Ray is joined by Felix Mago, Co-Founder of Dash NEXT & Futerio. Felix and Ray discuss decentralized finance and cryptocurrency payments. Plus, Felix talks about his experience building DAOs and other out-of-the-box innovations for the new internet (Web3).

Episode Highlights

• When someone comes up with ways to make the UX, UI, and security more user-friendly we will see a tipping point in this space.
• With companies looking to move more to DTC, Web3 just helps accelerate their plans.
• Once you get your salary through a DAO and get paid in crypto and pay for things in crypto your point of reference really changes.
• Felix believes Web3 will be the biggest job market in a few years because the advantages are massive.

Episode Transcript

Ray Chohan: So Felix, welcome to Frontier3. Really looking forward to our conversation today. Would love to kick off with just your story and how you ended up in the wonderful world of Web3 and blockchain and, your kind of art into this awesome space.

Felix Mago: Thanks so much for inviting me. I’m super thrilled to be here. Looking at the other previous speakers, very, very good to be here. So thank you for the invitation. I’m Felix, my name is Felix Mago. I’m in the blockchain space for a very long time, I have to say. So, it started off 2014. When I was writing for a tech blog, I was working as a consultant in the financial industry, PR media finance. And, I was blogging for, basically as a hobby. And we were seeing this thing called Bitcoin coming up and like, “Oh, it’s $1. It must be a scam. It’s $10. It must be a scam. And we were looking at each other back with my editor in chief and say like, “How can we get this thing?” Like, “What is it even like, how do you buy Bitcoin?”

And that was a challenge back in the day, because there were only very untrustworthy sites. Mt. Gox being one of them where you think like, “Do I really want to make a bank transfer there? Do I want to give my credit card details to any of these weird websites?” So, we started looking into it and there goes the rabbit hole, I think this is the story everybody knows. You open one door and everything becomes so fascinating, you just cannot stop looking into things. And then one thing came to another, I more and more moved into blockchain on my career. We opened the blockchain academy in Germany in 2017. And then, I was making a move to Thailand I found a great team there. We opened a company called FUTERIO, that does a lot of partnerships, business development, marketing activities in the last year, also a lot of events.

And we founded all the Dash operations in Asia. That was one of the greatest thing that we did in the last year. So we came to Asia when basically, there was no crypto payments, no nothing. Everybody was talking about this one use case of Bitcoin and blockchain that was payment, but it didn’t really exist. It was more people dreaming of it than anybody went to the shops, really taught the people how to use these systems to set up these systems, and especially teach them how to convert the crypto that is coming in to fiat money. So that’s what we did for last years. And man, so many things have happened. That was really just in a nutshell and I’m already talking forever.

Ray: And, it’s interesting. Well, thanks for that context. That’s really helpful. And over the Christmas vacation, it’s interesting, we saw quite an inflammatory post by Jack Dorsey, talking about how Web3 will only be meaningful to VCs and investors, and retail will get the small drops in terms of value. And that sparked a lot of interesting conversation over Twitter, and some of the mainstream, and stroke crypto media. Also, on a broader sense, obviously Jack views it a certain way. And then there’s so many different definitions or narratives around Web3. What does Web3 mean to you, Felix?

Felix: That’s a good question. I would say one of the key elements is turning around how everything, the architecture of things. So, you could argue that the whole internet is amazing and it has led to amazing things. It’s like we started off with the internet being that much because you didn’t know what to do. I remember when I was the first time in the internet, I made myself an email and then like, “Who do I write to?” I didn’t know. So since then, a lot of things happened. We see Uber, we see Airbnb, all these amazing things. But, there is a fundamental flaw in all these things because, my contact data, all my information is basically what? On 500 to 1,000 different servers, everywhere always, or I ever set up my profiles.

Everything’s basically stored on the server side, meaning my data is with the corporation. So, Web3 is turning really that principle around by saying, ‘Okay, there is a public private key architecture in the background and I’m logging into things. I’m logging into these platforms with my wallet.’ And this is a fundamental difference. That means, I’m in control of a lot of things that, all that evolve around that. So what does that mean and why is that so important? It’s important because I can start to automate all kinds of things without asking for permission from other people. And that is not only great because I am the master of my passwords and I have much less chances to… That a company is hacked and they still my see my passwords without me knowing this is one element. This is for me and for everybody kind of a key element. But the either side of things, and this is very hard to understand and to grasp in my opinion. Is that, the whole principles basically enables you to automate all kinds of things.

So, it doesn’t matter what you look into in the world. All companies have set up big processes and it always requires breaks in the flow of process because you cannot automate things. Take, for example, a loan process, or opening a bank account, or finding the best way to move your money around to get yields. Now you can build machines that just do that based on this principle, I just explained. So, and this is for me, really the most amazing element about all this Web3. It has many, many more aspects, but this is a key thing that really keeps me fascinating. And that in my opinion, started all this move to DeFi [Decentralized Finance], and to Game-Fi, and to play to earn, and all kinds of things. Because with this principle, you can essentially set up completely automated corporations that were just not… You couldn’t do that before. And this is really massive and revolutionary.

Ray: Cool. And in terms of the life cycle where we’re at, you have many people use the analogy, we’re kind of in 1998 of Web2. And where we are with Web3 now, some people say 2001, 2002. Spinning into 2022, where do you think we are in terms of the adoption curve within the wider context of digital assets and Web3?

Felix: I mean, obviously we are still very much at the beginning. If you take the big scale of things, because just most people didn’t get it. I mean, how many people do have a crypto wallet? And, how many people from these people who have a crypto wallet, how many people really use DeFi? And from these people use DeFi, how many people use DeFi 2.0? And, the more crazier you get, the fewer people it will be. But, at these edges is exactly where the innovation is happening. And the people who understand that are so deep inside that they’re really building.

So you could argue on the other side of this big picture, there’s a small group of people that are really building a lot of things that is capturing enormous value right now. And this is for me, really the fascinating thing. So in some ways, I sometimes feel like either you’re in the bubble and then there’s nothing else, or you are outside the bubble and you really don’t get it. And this gap is a bit hard. So, I would say we are still at the beginning, but we have built already things that have huge impact and that you cannot just get them away anymore.

Ray: I like your analogy. It seems like the folks in the bubble are building all the picks and shovels to enable hopefully, that mass adoption. What do you think are the big elephants in the room in terms of enabling that unwrap to away? For example, my sister, who knows nothing about Web3, probably doesn’t even care to think what Metamask actually is, or the Dharma wallet, for example. What do you think needs to be done in the next year or two years to enable that mass adoption? Because, it seems like we’re still stuck in the mud when it comes to that element of this journey.

Yeah, absolutely. And, I’m sorry for replying to your questions already. And I realize that again, in a very abstract way. And I think this is what many, many blockchain people always tend to. Because, it’s like, you get an abstract question and you try to answer it in a very general, general sense. And I think what is really missing is to break it down is like, why is it… Why does it matter? What can it do for you? And I can tell you, I was telling you at the beginning of my journey, we started to build crypto payment ecosystems. And I can tell we went to a lot of normal restaurants, MAMA noodles shops in the Bangkok street corner and talk to these people and say, “Hey, do you want to accept cryptocurrency? It’s amazing. It’s without the banks, it’s without government and censorships.”

And people look at you and it’s like, “What do you want from me?” It’s like, “I don’t even understand what you’re talking about.” But the moment you tell them, “Hey, listen, I have this payment system. It works the same, all these QR code things that you are used to, it works like WeChat, like Alipay, you know that stuff, you have it already on your door. You don’t have to pay any installation fee you because I’m coming here, I’m making it for free. And not only that, I have these telegram groups with Dash and they have hundred thousands of people in there. Even millions of people. And, I’m shooting your restaurant over there. I will make photos. And I will show these people that you exist. It’ll bring you customers, you don’t have to pay anything. And last but not least I will get that crypto money that you get, I will convert it Thai Baht and get it to your bank account. So basically I offer you a free end-to-end solution. You have nothing to lose.”

What do you think the people say, of course they say, Yeah, sure. I try it.” And once you realize, “Hey, I get new customers.” And once you realize, “Wow, this is my first crypto payment.” Things start to matter, and you have an emotional relation to these things. And, from what I realized is the moment people start to do their first crypto transaction, start to do their first transaction with Metamask, into a DeFi account and see, “Wow, I get interest rate for US dollars where I didn’t get interest rate on my bank account anymore.”

This is where it starts clicking. And these are the catalysts that I think are inevitable that this is scaling more and more. And, the moment you have something, the moment you see, “Hey, it makes sense.” You will tell your friends about it. And that is exactly what we are seeing. So, I don’t worry that it’ll happen. Is it one year, two years, five years? I don’t think it’ll be that long. And maybe one other topic that we can touch on is all this new move to… With the play to earn. So basically, playing computer games for money, you can see already that there are millions of people for… Just makes so much sense.

Ray: Yeah, obviously you had Axie Infinity in the Philippines. I mean, there’s kids in Argentina, Brazil, playing that game. It’s been one of the big standout stories in particular of last year. So it’s interesting, unpacking your journey with Dash then. So you described that story of being in Thailand, trying to win the hearts and minds of mom and pop shops, at restaurants, general groceries. And, just getting them on that payment rail and getting access to that type of customer. How has that journey been? I mean, it looks like a lot of what you do there Felix is, the real frontline business development, and marketing, and partnerships, to win those hearts and minds. Through various partnerships that you connect. I know what that is like when you’re building say a Web2 software business in the early years, no one knows who you are.

No one cares about what your software really does. No one knows your brand in a B2B context. So the first one or two years is demonstrating value, but also very much winning hearts and minds. It is very much selling. What are you finding? You’re on the front line? What are the common objections you are hearing from folks who from a distance know a little bit about Bitcoin and digital payments, but don’t really get it? What are some of the big hurdles that you’ve experienced with your journey at Dash, on the business development side of things?

Felix: The way we kicked off because, as I mentioned, when we started in 2017 to bring Dash to Asia, there was not much of crypto payment basically anywhere in the world and especially not in Asia. When we started there, a few people have put the bitcoin sticker on their door claiming that they accept bitcoin. We tried every single one of them in Bangkok, there was about 50 shops, just to realize none of them really accepted bitcoin because it was just a sticker on the door. After somebody put it there, it was just forgotten because nobody ever came and paid with Bitcoin. Of course, it’s like a constant process of training people and of making people aware of what it is, because at the end of the day, if you don’t use it and if you don’t speculate, you have no connection with it. Obviously, a lot of people are very skeptical because they have a hearsay about bitcoin. It’s like, it’s drug money, it’s a scam, it’s not real, it’s extremely volatile, and the government doesn’t like it. These are the things you really have to deal with, but then again, as I mentioned before, the moment you can present an end-to-end solution saying, “Hey, I give you the QR code. You get money on your bank account.” It’s actually the same, like Alipay, then people start to think, oh, okay, let’s try it out and shortly after realize it’s not so different. I would say, really, you have to sit down and try things and I think this is not only with bitcoin payment, but it’s also with DeFi, with DeFi 2.0, with NFTs, with play-to-earn, all that stuff, and frankly, everything in the world. I mean, learning a language is not so different and building muscles in the gym. You will not build your muscles tomorrow, but you will do it in one year when you constantly do it. If you really sit down and after three hours, you manage to do your first transaction and after two hours you set up your wallet, you do your first transaction, you learn two days more and you’re able to have a Metamask wallet and do your first DeFi move. Really it’s a matter of sitting down and learn it, I think, and once you do it you will realize it has very positive effects for you and for your life.

Ray: This is interesting. You’ve done a lot of great work in Thailand. What is the lay of the land, Felix, in that part of the world? I mean, where are they on the curve? Are they using stablecoins? Are mom and pop shops transacting in Satoshis for day-to-day items? Is it like El Salvador with what they do with the Lightning Network? What’s actually happened in Thailand in terms of the actual detail of what’s going on?

Felix: Mm-hmm (affirmative). It’s a very complex question, I have to say. I am German. I moved here from Germany, was working for a long time in the European blockchain space, especially the German one, Berlin being like a Mecca in the European ecosystem. But business is different all over, many things are different. Let’s, for one second, stick with the example really of the payment. The first obvious difference that if you’re in Asian countries, there is no unified currency like the Euro or a huge area that is covered by the US dollar. No, there is a lot of different countries with different currencies, completely different regulations, and really completely different consumer behavior or speculation behavior. This definitely was a big challenge when we started here in Asia because it meant for us we could not just scale all over Asia with the one that fits all solution like you would have in the US or in Europe. When you fulfill one regulation in Europe, you are kind easy to go to the other countries, but that’s not at all the case in Asia so that was a big struggle and obviously led to a lot of conversations with regulators, with banks, with different payment service providers, like all the backend infrastructure that enables payment.

But hey, I can say after a couple of years we figured out a lot of things and we extended our initially Dash Thailand project basically to become a global Asia focused partnership project. We found partnerships in Singapore, Vietnam, Indonesia, Korea, Japan, all over the place, basically. We had activities in different scales, but this is one side and this is the payment side of things, a lot of differences. But at the end of the day, like I mentioned before, more and more people are starting to use it and I would say still so far it’s rather exotic all over the world than it’s super standard to pay with cryptocurrency. At the same time, there’s more and more people earning cryptocurrency, so they have, I would say, a need to spend it because what you’re going to do? Either you speculate more or you do something nice for life. You spend it, you get a good restaurant, you get a good travel or something. There is more and more options to spend it.

But there’s much more in terms of cultural differences and one thing I always find funny being here in Asia or being in Asia and doing business here is that if you are Western grown up and educated, you often tend to forget that there’s a huge part of the world that is completely different with completely different cultures and completely different people. There’s like a huge hype in gaming, for example, we just mentioned it with the Axie Infinity hype. I mean, just if you look at the monitors of people, you will see even the games are different. It’s so colorful and for me, I mean, it’s making me crazy because it’s too colorful, I cannot stand it. But there seems to be a cultural vibe that likes different things and appreciates different things. I think that’s very important to consider and even scaling businesses, running businesses here in Asia might be different on many details, I would say. It’s very important to be here and learn about that.

Ray: Brilliant and obviously your experience, I mean, you are one of the trailblazers, early believers in this space. You’ve been doing BD [Business Development], marketing in the blockchain space, what, since 2017, initially in Germany, on the enterprise side, now in Thailand with Dash where it’s B2C stroke B2B. It’s a mixture of everything. Now, we’re going into 2022 and we’ve seen organizations, like Chainlink, do a hell of a job in terms of number of node operators, partnerships with really big names. I think they’re one of the lighthouse companies for the enterprise blockchain and getting the B2B world activated, but in a broader sense, where do you think it’s going to head in the next year or so? Do you think the big auto players in Germany, Austria, the big B2B brands in the US, in Asia will start deploying DLT technology, some form of tokenization, some form of fractionalized payments? Where are we on that journey, in your opinion, from a business development standpoint? Because you’ve got a great pulse of the market because you’re getting responses and feedback from economic decision makers and buyers every day. Where we are at on that journey, Felix?

Felix: Yeah. Thank you, Ray. Thank you for all the props here. We just had a quick pre-conversation and figuring out we both coming from this innovation side of things to help the good old traditional corporations become more digital and now become more blockchain, which is even a bigger challenge than just making them digital. It has different elements, again. There’s like all this traditional world and like I said before, frankly, I’m happy for everybody who’s using blockchain, but are kind of a bit over to convince you why you have to use blockchain and to be fair, it’s not easy to just do something different as a corporation that also, to be fair, is earning a lot of money without blockchain. Changing your running systems is very risky, it’s very expensive, and if you don’t understand the business case before, it’s very unlikely to happen. What I know in blockchain is that I don’t know what is happening next month and I know for sure that I don’t know any industry that is coming up with new stuff so fast and where people also, like everybody’s working 24/7, so people are pushing it just to the limit until they cannot work more physically. This is the environment and not because you have to, but just because everybody’s so super hyped to do these things.

Just to summarize before I go to what is happening in 2020, let’s just recap one second what actually happened in 2021. I remember being having Christmas time in 2020 going into ’21, there was a moment when the bull market started and we were like, yeah, finally we are out of the valley of tears, like the long lasting bear market is over finally. Just before DeFi started on Ethereum and extended to other blockchains, so it was the time when Binance Smart Chain was suddenly popular, but then a lot of things happened. Suddenly DeFi happened not only on Ethereum and on Binance Smart Chain, but it happened on 25 other blockchains and you see history repeating in the DeFi space with decentralized taxes, lending protocols, yield farmers, yield maximizers, leveraged yield farming, leveraged trading, all that kind of stuff, perpetuals coming out, and like I said, not only on one, but on different blockchains. Then we had the NFT hype with all the art stuff that is going on.

We discovered, hey, we can actually do DeFi with NFTs. We can use that stuff as a collateral to, again, build money making machines. We can make whole game economies that are based on a balanced economy that rewards players by playing and that enables secondary market for everything that is in the game. We saw the launch pads coming up because we seeing so much interest and so much money coming into the market that everybody wants to have a piece of that pie. There’s already so many things happening that are completely beyond what you just asked me in the initial questions like, is how do corporates moving in? Maybe it’s not even interesting that corporates move in as long as there’s people who get what it’s happening and that there’s people who want to be involved, there’re people who want to invest.

What I find really funny is that there’s not a lack of capital at all. As a matter of fact, everybody wants these early allocations, private allocations, early rounds and you can see that just on the plane numbers of the launch pads. I mean, I just saw, I think, on CoinList, I believe it was around 450,000 people registered for a token sale recently where I think 25,000 got an allocation of, what, like 200 bucks or something. People are lining up to get these allocations and it’s just insane what is happening there. In that sense, my prediction for 2022 is that it will only accelerate because more money is coming in, more people are coming in, and the ideas are not only evolving, but there’s building blocks that you can just use to put stuff together.

You mentioned Chainlink as kind of the Oracle and price feeds and everything, yeah, it’s a great company. There’s also a lot more, I would say. I mean, to have price feeds as one building block, but now you cannot only have price feeds, you can say, I take the decks from here. I take a decentralized lending protocol and now I find a way to make my NFTs as a collateral. We are just developing a project called Space, a Metaverse, with like a whole concept of NFTs inside. My idea is there to say, “Hey, let’s get a cool partner on board.” Swatch for example. Let’s sell watches, but let’s sell not only physical watches, let’s sell also digital watches and let’s make a collectors edition of them and find a way that we can either sell them together, sell them separated, create an own complete secondary market for the digital watch and in the long run, make a partnership with a lending protocol that enables me to use that watch as a collateral for the house I buy in, I don’t know, at the Thailand beach. So it’s like the things get more crazy as we go, and I think it’s getting easier and easier to pluck this stuff together once you understand what you want and what is the business case.

Ray: I couldn’t agree with you more, this kind of unlimited composability element of Web3. I think Chris Dixon and calls it Lego blocks. You can just build on top of someone else’s previous work and it’s the ultimate innovation flywheel. Probably the best digital innovation flywheel in human history we’re potentially embarking on, so it’s only left to the imagination and ingenuity of the community to see what can be built. Obviously, 2022 continued acceleration on the momentum we’ve had from last year, but when it comes to more of that mass adoption of wallet users, so you can see with Metamask, I think the monthly active users is around about, I think, 12 to 14 million. It’s absolutely tiny. What specifically needs to be done to make sure there’s a wallet on everyone’s phone? Because for example, I still don’t really use a wallet day to day, nor do any of my friends or family. It’s still a very niche capability but it seems like that would be one of the big moments to make it more of a mass technology. What needs to be done at ground level to enable that, in your professional opinion?

Felix: That’s a good question. One comment to what you just said before, I think bankers and lawyers are already extremely good in making these machines and putting the of stuff together and now, there’s kind of a new group of people with is the nerds and the people who can build technology, who are also able to build stuff together. I mean, just look at the variety of banking products that we are now rebuilding with all this decentralized technology. This is already kind of a massive thing and it’s a massive value driver, and just to put it in perspective, I mean, how many people are building these products, these traditional finance products, versus how many people are using them? So the core of the banker people is just the same niche, like it’s going to be in blockchain. So the question is does everybody need to know all these details about how to use Metamask, how to secure your passports?

I actually believe in order more … As long as it is the case, we will not reach that tipping point. I mean, how many people can explain the iPhone? How many people can explain how TCP/IP works to use your internet browser? Nobody, and if that would be the requirement, probably we wouldn’t sit here and do this interview. So in a sense, we will see it sooner or later. There’s going to be a tipping point of somebody who solves that UI, UX challenge on the one side and all the security and headache free using of blockchain solutions challenge that for now, it’s sadly, it’s just painful to do it right now. I agree. I mean, I’m using Metamask daily, I’m doing a lot of DeFi stuff so the more you use it, the easier it gets as well but as I said before, you have to sit down and learn it because stuff will go wrong.

Everything, something goes wrong, it will take more and more time but the moment you solve it, you can be happier about yourself, so I don’t know. I think it’s really UX, UI challenge on the one side and a challenge of what is actually the thing that you use. Will it be a computer game? I believe the moment some company or product will start to use it, that is really wanted by a lot of people. That’s kind of the tipping points we need and the more we have of them, the better, so just to give you some example, it’s like if GTA or Rockstar kind of a game in this size and usage is starting to use blockchain, that’s going to be very good for the whole industry. And frankly, that’s exactly what we are seeing right now with Sandbox, Decentraland, the Metaverse we are building right now with space so there’s a lot of promising things happening.

Ray: Yeah. It seems like Sandbox, they’re all in and then you’ve got, I think, Atlas. Star Atlas seems really interesting as a AAA rated game and obviously then Axie, I agree with you. I can’t look at Axie more than the minute. It drives me nuts, the too much going on. It’s popular in Asia, but I completely understand where you’re coming from, but it seems like the current incumbents, Microsoft, Epic Games, they actually don’t have much of an incentive at the moment to adopt Web3 capability because if they have this kind of war garden, it’s more profitable that way so do you see the big incumbents coming across? Because at the moment, it looks like they’re being very standoffish and they’ve pulled out, really. You even saw with Discord, they enabled Eth capability then backed out so I’m finding some of the incumbents who still are kind of modern incumbents and fast growing ones still sitting on the fence. So do you think you’ll see some big announcements this year where they actually come on board?

Felix: It’s funny that you say that because exactly the point that I was trying to make before. If you’re a big corporation, you have a running business and afraid, you’re not too much into blockchain, you won’t get that stuff but Star Atlas and GTA are amazing examples. What does GTA do and how do they earn money? They sell copies of their game and sometimes, they sell a copy to the end customer directly or there’s middlemen in between but at the end of the day, they sell their game and maybe they get a little bit from the subscription you make to play GTA Online.

Star Atlas took it to an extreme to say, “We are building an MMORPG, an open world game where everything in this game is sold by the company as an NFT.” So every star ship I use, every star ship that is flying around in this game, somebody bought it on the market and initially, the company was selling it to the market and not only did they sell the star ship, they also sell you the pilot license to fly the star ship because otherwise, ha ha, you cannot fly your star ship. They sell you a pet, they sell you a skin if you want to have a pink instead of a black star ship, they sell you a satellite that is flying around the star ship so just, I mean, just look at this business model.

My argument is that I would say these big companies, they just didn’t get it yet. The moment they would start understanding what is happening, there is no other way around because the business model is just so much better for them if they use it and not only for them, but also for all these people that are using secondary markets that have an incentive to trade these items, to arbitrage these items, to use these items, to earn money as a job, so I believe it’s inevitable. In hindsight, it was inevitable, is what I hear often in blockchain and it’s kind of a funny saying, but probably you need a bit to understand and digest it because it’s so big and so complex, what is happening there.

Ray: Yeah. I can agree. Essentially, what you described it earlier with the big guys, “Why change now?” But when they start seeing, and it does just take time. You’ve got to win hearts and minds. There is politics and career risk in large companies to make that type of decision because it’s people who will pull the trigger, and those people worry about career risk. Are they at that age where they don’t really give a shit? They’re going to be hiring soon so why take on that extra burden? There’s all these things going on. It’s people, but I couldn’t agree with you more because once they realize digital GDP is exponential and we can’t even fathom how big that value unlock will be, I see them slowly coming on board because I think no one really understands digital GDP and the fact that it’s going to be probably four or five times in the order of magnitude of analog GDP, GDP that we see every day to day and when we’re walking around at the shop, so I think that penny hasn’t dropped at the moment from what I can see.

Felix: Yeah, and I mean, just stick with the innovation narrative for a second. I mean, if you do innovation professionally and you help companies to become innovative, it’s not, how you say, you don’t change one thing and everything is suddenly more innovative. It’s a matter of culture, it’s a matter of process, it’s a matter of legal, of business model, of technology, of people. And obviously, and I think this is what we have seen before in the times where the internet suddenly came and suddenly, there were these young, fast moving internet companies, and Amazon came up and now, look at Amazon. Look at Uber. Look at Airbnb and how massive they are and how much they brought old industries into trouble. So if you look at that dynamics, I think it’s just so much more unlikely that a company that is established, that has already 300 or 500 people, we say they don’t understand this business model.

But even if five people off the 300, or let’s say 100 of the 300 just suddenly understand, “Hey wow, we should do completely different business model,” it’s not like this is changing the whole organization. On the other hand is if you are a new company that is just coming up, you start with three people, you grow to five, to 10, to 50, slowly you become more and more like that as well. I think that’s kind of an inevitable structural drift of becoming bigger and more established in the market, and I guess this is also a big factor that is really beyond blockchain, to be fair, and this is kind of just repeating and accelerating the more that tech becomes and evolves faster. So I think blockchain is just another making the thing that we have seen with digital and internet, is just making things more faster and even more crazy in terms of how much money you can earn.

Ray: Yeah. It looks like history always repeats itself, Felix, and it just rhymes different this time round so I would probably share your sentiment. It’s really going to be the native Web3 folks who are the next Airbnb, Uber of this space just by design and people. I would bet with you, I’m in your camp for that. However, there is existing incumbents who are doing interesting stuff. What I think is interesting is this, but it’s actually interesting, but actually quite easy to do. Let’s look at, say, Nike right now. You see what Adidas are doing. They’re obviously now deploying NFT capability and slowly tip toeing into the world of Web3 via NFTs but if you really look at it, it’s not much risk for them because they’re already trying to move their business to DTC.

Direct to consumer is the future for all of the big apparel brands so really, NFTs is just a potential accelerant of that DTC shift that they’ve been working on since 2014 anyway, so that’s why we are seeing interesting moves on the NFT side within the clothing and fashion market. However, I actually don’t think it’s that much of a big deal internally for them because selling it internally is probably a lot more easier because you just go to your board and say, “Look, we’ve got a DTC strategy. This is just a nice bolt on to accelerate our original fucking goal anyway,” so that’s why that’s interesting, but I don’t give it so much credit and eyeballs because it’s just building on a business plan they have in place already with direct to consumer.

Felix: Yeah, you’re right. You’re right, and even the same, I would even go a step further. It’s even more extreme if you compare that to governments. I mean, it’s not only blockchain but how to governments, right? I mean, it’s not only in blockchain, but look at how fast technology is developing and how fast we can do things and how fast governments are lagging behind. I mean, obviously crypto is more and more regulated. But now we’re at a point where we finally talk about is, can we tax Bitcoin, if we do a payment with it, or how can we use stable coins? It’s like, “Okay, we’re talking about stable coins, its 2022 in crypto. Right? We were just talking about DeFi 2.0 and what play to earn stuff for millions of people already have their income in cryptos.

So the gap is widening, and I would argue the gap between crypto development and regulations even bigger than the gap between corporate business models or moving into the blockchain space versus the native blockchain companies. But I totally share share your sentiment. It’s like probably the same people who were born after 2008 or were born in a world that just has the iPhone. Right? Whereas the people who were born in 1990 were still born in a world without the internet more or less, right? So I guess that’s a very important factor, too.

Ray: Yeah. I think demographics and timing always plays a big role in the cycle. It’s interesting, you mentioned regulation and you got to get the government on board. Right? There’s actually a great book. I highly recommend it, Felix. It's by a chap called Azeem Azhar. It's called the Exponential Age. That’s the title of the book, and he’s got a whole chapter on the exponential gap, and it’s a whole kind of part of the book, which is focused around how government always slow to catch up. Right? Because you’ve got corporate innovation, early stage entrepreneurship moving quick, but then regulatory frameworks stuck.

I mean, you look at the securities law in the US. It was composed in 1933. It’s crazy. Right? It doesn’t even have a framework to get its arms around digital assets and tokens. Right? It’s saying everything’s so security, but potentially it isn’t. But what I am bullish on and I’m curious to get your more say European and maybe Asia context, obviously there was a hearing the US, right just before Christmas where I think it was Mr. Brooks, Sam Bankman-Fried from FTX and a couple of other folks, I think the CEO from Celsius. I think it was a five hour hearing. I don’t know if you watched it. I was actually really impressed with the questions.

Felix: Yeah.

Ray: 80% of folks from Congress, we’re trying to meet folks halfway and trying to learn and actually had good questions, and then there were those 20% who just asked shit questions and they’re just there to try to catch people out, but 80% of it was really good. So that was a good signal. Where do you think we are in Europe and obviously your time spent in Thailand on the government side of things, starting off with Germany first and the dark region, where are we out on that front from a government standpoint?

Felix: Like I just said, in my opinion, we are so far behind, but it is what it is. We have to deal with stuff. It really depends on the perspective, right? It’s where we are at really depends what you want to do. So it’s a different story if you’re somebody who wants to accept Bitcoin as your restaurant and put that in your official tax papers, I think we are still in Germany and Asia and frankly in the US, in a situation where neither the guy who makes your taxes really knows what’s going on. It just has a cost-benefit ratio, that is not viable for you. Right? This is one thing I think, as a trader and investor, you’re way better of being a German than being an American. I mean, I’m not there. There is a good reason why all these platforms don’t want you if you are an American and as a German or European, you most likely have zero problems. Asia is kind of in the middle.

In that, I guess, on the other hand, there’s the crypto adoption. Just use it to have your daily life. That’s what we said before. I strongly believe that this will be the biggest job market in a couple of years from now because the advantages are just so massive, right? If you’re building a DAO, you’re building kind of this machine-like organization that has clear rules of inclusion that are way more straightforward and can get you your daily salary. You just have a big advantage. What I mean with that? I mean, I’m probably one of the few hundred people in the world that are working in the DAO, that get their salary from a DAO for many years now.

I can tell you it’s massive. It really changed your relationship to things. I mean, once you get paid in crypto, suddenly your whole points of reference in live are in crypto, right? You ask yourself, “Is a cheeseburger for 0.1 Dash expensive or not, or it’s the same for a $10 cheeseburger?” You wouldn’t buy that, right? So this is an emotional reference, but there’s other elements compared to who you are, where you are. So let’s say, you’re an African, or even me as a German, trying to get a job at a US-based corporation. I’m going to have a hard time because there’s so much paperwork to do, so much things that just make me less interesting than any other candidate that already has the green card or already has an American passport.

So I think these things are, at the end of the day, kind of the catalysts that will change a lot of things. I mean, for me, pretty obvious that there’s a lot of loss globally, and there’s a lot of people who are just disadvantaged by who they are, where they are from, what is their passport, what is their background? I would say, we are leveling the playing field with these styles and with these stuff, with these ways to pay and to get a job, to get hired, to contribute to something that you really like and enjoy. That’s beyond regulation, what is really amazing. I think the more you are off these first world countries, the more you will feel a need for it.

Ray: So unpacking DAOs. Again, there’s so many folks on LinkedIn, and that will be the big community, which is our audience with Frontier 3. They’ve got no clue what a DAO is, a Decentralized Autonomous Organization. What that form factor of an LLC will be in the future. So it’s interesting. You have frontline experience of this, as you mentioned. You’re probably a tiny, tiny 0.000001% minority in the world who actually generate their income for a DAO. Is Dash currently working in a DAO structure, and if so, in the most simplest format for our audience, how does that work and what are some of the benefits? Because the way you described it is like, “Right now, I’ve seen a DAO. I can never go back to working for a normal company.” It’s like, when you see the iPhone, you’re like, “Holy shit, I’m never going to go back to a Nokia 3310.” Right? So firstly, what is a DAO and just some nitty-gritty day-to-day detail of why you think DAOs have been so amazing to be a part of?

Felix: Mm-hmm (affirmative). Okay. That will open another hours of conversation. You start opening the door. So let me try to keep it short and simple, a DAO in a sense, it’s a completely automated organization that has predefined and completely automated their processes. It’s basically what many corporations try to do, but then you will see there’s always checkpoints where you cannot do kind of a completely, fully automated digital process, where you need people in between, where you have breaks in systems, where you need to put data from one to another point and you cannot automate it. So a DAO, in a way, is a way to automate an organization in all of its processes. So there’s different organizations where this is more or less complex.

What Dash is doing is basically like Bitcoin. They are creating new Dash with every block and miners who contribute, or usually in Bitcoin, there is a process where the miners are validating these blocks and therefore they’re getting incentivized by getting the rewards that are produced block by block. Dash says, “This is a very important element to have in a blockchain, because this is a one feature of the security.” But it’s not all, because at the end of the day, you also need people that make this project successful. So what they said is, “Hey, let’s divide these block rewards, essentially the money we print, we don’t only give it to the minors. We also give it to people who work for this system.”

How can you work for this system? We set up a forum looking like a internet page where you can say, “Hey, I have an idea. I want to do something for Dash.” So in our case, it was saying, “Hey, we want to build up payment ecosystem in Thailand. We want that merchants accept Dash in Thailand. Our goal is to…” I don’t know, “… to reach 50 or 100, or 150 merchants. This is the budget we need. This is the steps we take in order to execute that. Are you willing to fund us?” Then there is a community of people who have voting rights. Also, this is a predefined process, and they can say, “Yes, I trust you guys that you will do it. Here’s the money. Go out and do it.”

Felix: Once we have started, yeah, it’s it became a self-fulfilling prophecy that we were able to get more and more success there and reached our goals, reached our KPIs and built trust within this community.

Ray: Wow.

Felix: That was not too abstract, but-

Ray: No, no.

Felix: In a sense, it’s actually a set of rules that you have to go into and learn about these set of rules. What are the requirements? What is the process and how is the money distributed? At the end day, these are core elements of any DAO.

Ray: To sub DAO in Thailand, you’re compensated then in Dash or in Bitcoin?

Felix: Yes, in Dash. Mm-hmm (affirmative), of course.

Ray: Wow. You can imagine how companies could build a salesforce that way. Right? You could have people in region selling for you, but they’re part of more of a DAO rather than a company. So that’s fascinating, but I’ve really enjoyed the exchange with you today, Felix. I mean, we’ve covered a whole number of different rabbit hole. It’ll be awesome to do maybe part two, some point in the summer to get a sense of the lay pf the land. Just for our audience, where can people best find you in terms of getting in touch with you and the team at Dash?

Felix: Thanks so much for having me. You can find me on LinkedIn, Felix, M-A-G-O, or on Twitter @FelixMagoCrypto. There, you will find me.

Ray: Nice one, Felix.

Felix: Exactly.

Ray: Thank you.

Felix: Of course. You can also reach me at [email protected].

Ray: Brilliant. Excellent. I look forward to part two, and you have an awesome start to the year. Thank you.

Felix: Thank you very much, Ray.