 This time could be different. Where we do break all time highs before the halving, we have never had it happen this fast. Are you wondering what is fueling this incredible crypto bull run and how far it could go? Yes, everyone is talking about the Bitcoin ETF. These new funds attracted over 7 billion dollars of net inflows in less than two months. But there is one more factor that makes this bull market different from previous ones. That is Bitcoin DeFi. Some say decentralized finance applications built on the Bitcoin blockchain could unlock Bitcoin's true potential and spark the largest bull run in history. According to hedge fund Pantera Capital, this is a half trillion dollar opportunity. People are going to take their Bitcoin, lock it up, stake it to earn yield. There are massive, massive tailwinds here. But how can Bitcoin compete with established DeFi platforms such as Ethereum or Solana? And how could this emerging sector affect the price of Bitcoin in the long run? I try to find out in my conversation with Dan Held, Bitcoin OG and pioneer of Bitcoin DeFi. Before we dive in, I'm thrilled to announce the upcoming return of Blockshow, the leading event in the crypto and blockchain industry. This time it's steaming up with Blockdown, a pioneer in the web pre-conference scene. Get ready to join us in Hong Kong for this crypto celebration from May 8-9. Don't miss out. Check the link in the description to learn more about these events. And remember, early bird tickets are limited. And now let's get to the interview. We are seeing that this bull market is gaining steam. This year we have a lot of bullish catalysts. We have the ETF approval. We have the upcoming Bitcoin halving. And now we have this new narrative of DeFi on Bitcoin. What is your outlook for this bull market for Bitcoin? This is going to be a massive lever for growth and for price appreciation for Bitcoin. People are going to take their Bitcoin, lock it up, stake it to earn yield. They're going to borrow against it. This all reduces sell side pressure. You're going to have demand for Bitcoin as the underlying asset to unlock DeFi on top of it. For example, if you want to buy a Bitcoin ordinal, you can only buy it with Bitcoin. So all of these new assets are going to require the ownership and purchase of Bitcoin and able to access them in order to access them. So this will increase demand for Bitcoin as well. So it's a reduction in supply sell side pressure. It's an increase in demand when coupled with the halving, the ETF. If the Fed cuts rates later this year, there are massive, massive tailwinds here that should propel us to, I mean, what's nuts right now is we're at $57,000 of Bitcoin and we're not even to the halving yet. In terms of previous cycles, we have never had it happen this fast. And every time I say this, I'm wrong, but this time could be different where we do break all time highs before the halving and that leads to an incredible bull run. So we could see Bitcoin have a cycle similar to like 2017 maybe, but where it doesn't just like five acts, it might go back to the 20Xs or 30Xs. I would touch upon an interview that we did a long time ago, the summer of 2020. You were presenting yourself as a Bitcoin minimalist. Blockchain tech sucks. It's terrible. Do you think it's time to stop developing altcoins? I very much prefer the most minimal amount of architecture and the most minimal number of chains. Right now you are one of the most vocal supporters of DeFi on Bitcoin. So you are advocating for layer two blockchains to be built on top of Bitcoin. So you kind of changed your point of view radically. What have changed since then? I wouldn't say radically. It's been four years. I mean, that's an entire crypto cycle. So lots of things change in a crypto cycle. But yeah, when we saw the obvious success of DeFi over on Ethereum and Solana, and so I think the early version of Bitcoin maximalists back in the 2015 era, we always said, whatever is going to happen over there will allow the experimentation to happen on these other chains, whatever works will bring it back to Bitcoin. Well, that's what's happening is DeFi is coming back to Bitcoin. And in fact, it started on Bitcoin a long time ago, back with counterparting NFTs on top of Bitcoin. Rare Pepe's were actually the first NFTs before CryptoKitties. But now that the tech has been refined and now that there's been a lot more understanding of the game theoretic surface area where these things can break, I think it's time that that comes back to Bitcoin. So Ethereum has been the lead chain in the DeFi space. Most of the decentralized applications in the last few years were built on Ethereum. During that interview in 2020, you were accusing the Ethereum community of stealing the narrative of Bitcoin, and in particular, the narrative of hard money, because back then there was this movement within the Ethereum community, promoting Ethereum as hard money. But right now, don't you think that is Bitcoin stealing the narrative from Ethereum? Yeah, that's a great question. When it comes to sound money, what the Ethereum people completely misunderstand is that it's not about a rate of inflation or deflation. The US dollar is deflationary sometimes that doesn't make it sound money. It's about the credibility of the monetary policy, and there is no credibility with Ethereum's monetary policy that has changed constantly. We have no faith that it won't change into the future, whereas Bitcoin's monetary policy has never changed, ever. And that's where credibility comes from. Credibility is built through time and code, and that's the mistake that they make. So Ethereum will never be as much of a sound money as Bitcoin, which is never going to happen just due to the time and trust factor that's played in. So with Bitcoin, Bitcoin completely owns a sound money narrative. Now when you look at the smart contract narrative, there's a lot of different chains vying for that DeFi smart contract narrative. In fact, Ethereum has many, many competitors, including like Solana, which would be like the largest competitor. And I think in this cycle, what Ethereum is going to learn is that they traded off some decentralization to do DeFi on their base layer and other parameters that they selected, but there's other chains willing to sacrifice more of that to allow more cool things to happen, make it a more expressivity with their DeFi. That's where I think Solana is going to do really well in the cycle, where Solana against Ethereum is objectively a better smart contract platform. And for Bitcoin, Bitcoin is a better sound money in both Solana and Bitcoin are going to eat Ethereum's narrative from each end. Ethereum is neither the best smart contract platform nor the best sound money. It's OK at both, whereas Solana has been completely architected to be the best smart contract platform out there, and Bitcoin has been architected to be the best sound money. Now, when we look at DeFi, is this borrowing Ethereum's narrative or not? It depends on how you want to define it. I mean, I would say Ethereum definitely popularized DeFi. That's without a doubt. I think that's the objective reality. But something started on Bitcoin originally, like NFTs started on Bitcoin with counterparty and RIPepes. What's really interesting too is that DeFi and Bitcoin is quite different than Ethereum. In some ways, it's the same. In some ways, it's different. Bitcoin L2s, for example, allow you to do more things with your Bitcoin. It's not just cheaper or faster. Whereas on Ethereum, since it's an EVM chain, you can do all that cool stuff on layer one, just more expensive. Whereas I think their L2s add a little bit of struggle of pulling liquidity up to their L2s, because their L2s don't offer any additional functionality, whereas if you teleport your Bitcoin to the next layer, you can lend and borrow and do all sorts of cool things against it. Also, for example, Bitcoin has something called metaprotocols. Metaprotocols would be ordnals. Ordnals are a distinctly different flavor of DeFi than what has come before, where it's not an L1, it's not an L2. It's this colored coin sort of concept. So it's a different flavor of DeFi. Why do you think that developers would move from already established DeFi platforms like Ethereum and Solana onto Bitcoin? Well, two reasons. One is that Bitcoin has the most number of users, the most liquidity, and will be around the longest. So if you're going to build an app and you're going to build from longevity, this is the place you'd want to go. Right now, the tooling is very limited. So building on top of Bitcoin for these users is much more difficult than on Ethereum and Solana. Developers, I think, will have that fine line of being able to deal with that friction versus tapping into those users. And I certainly think that the users are worth it. It's a trillion dollars worth of assets locked over on Bitcoin. If you can deal with the user experience issues and come through and build new DeFi functionality, then the value is enormous. Again, I can't stress enough how big Bitcoin is. I think people forget this. It's bigger than everything else combined. So if you're going to go build a DAP and you want to tap into liquidity, Bitcoin's going to be where it's at. In terms of, like, is there a bunch of legacy stuff built on other chains where they're going to stay over there? These folks have zero loyalty to their native chain. They do not care what chain they're on. These DeFi participants don't care that it's on Solana or Ethereum or Avax or whatever. They're chasing liquidity. They're yield farming. They're eardrop farming. They're going to jump to whatever chain offers them those sort of features. These Bitcoin L2s will do airdrops. They're going to do all sorts of different classic DeFi incentive activities where they will have the fresh capital. They will be able to incentivize users to come over that we're formerly farming over on these other chains. A lot of people are concerned that if DeFi moves onto Bitcoin, we're going to see a proliferation of pump and dump schemes, camps, and all these aberrations that we saw in the DeFi space in the last few years. So these tokens that are being created just for pump and dump schemes, basically tokens that have no functionality or very little functionality, people are going to buy into them and then they're going to lose all their money. So how are we going to protect the Bitcoin ecosystem from these sort of aberrations? Yeah, that's a great question. And there's a couple of different aspects to touch on here. One, do I want people to be scammed? Absolutely not. Like I think when I've spent 12 years in this ecosystem and there's been all sorts of different flavors of scams and it's very disheartening. I think what held me back when I was more of a Bitcoin maxi was that I just looked at the failures. I was like, okay, there's a lot of failures here. There's a lot of scams. You know, people should be protected against these sort of things. And while I do agree that there's a free open market for folks to tell other people, hey, watch out for this. I think there's a responsibility of marketers to be upfront about the risks that people are taking with DeFi. For example, DeFi, you don't have counterparty risk but your protocol risk could be quite high. You know, and so that's where I think as a marketer, like there's a certain level of ethics so like describing exactly how something works to your best of your ability. But yeah, look, there's going to be bad things and good things that happen, but you have to take the bad and the good because if we don't allow the bad to happen, there won't be the experimentation of the good. I think the Bitcoin maxi's had it wrong where they're like, oh, there's a lot of scams. That's all scammy. That's not true. Yes, there are a lot of scams, but there's a lot of good stuff that came out of it. Yeah, that's very good, but I would like you to maybe draw some sort of lines, a guideline for our audience to understand which projects they should look at in terms of legitimacy, which other projects people should be a little bit more cautious about. So correct me if I'm wrong. Those tokens may be pump and dump schemes while if a layer two on Bitcoin doesn't have its own arbitrary token, that's a sort of good sign. What do you think about that distinction? So with the Bitcoin L2s, the ones that have a token versus not a token, we've clearly seen that some of the L2s without a token, for example, like liquid has extremely low usage, but I think that we can certainly look at more, like ecosystems more like stacks that has had a token, they've been able to plow that into ecosystem development. And so like I don't think that's the line to draw. I think that there is more or less like a transparent marketing that people can do around it. So no, I don't think that's a definitive line. I think tokens on top of Bitcoin are fine. It just depends on what you're trying to do. And by no means have I been telling people to go out and buy these sort of things. You should decide that for yourself. I think that investing for the long term where it stole my money very long term is gonna be Bitcoin, right? Like this is, my tone hasn't changed very much. When it comes to, I guess like lines in the sand that I would draw, if there's a yield, figure out where the hell that yield's coming from. Yield just doesn't appear for free. All yield is representative of a tail risk event that you are monetizing. What do I mean by that? There is some reason why you're receiving the yield and you should figure that out. So whatever you see yield, figure out where does this come from? Now this exists both in traditional markets and in crypto. This is a question you should always ask yourself. Another one, if it sounds too good to be true or the claims are pretty ridiculous, it probably is. If they're claiming that this will, this protocol is going to do this or that and it sounds incredible, I would take a critical look at it, take a cold shower and then look at it again.