 I am absolutely convinced that crypto is going to have a say in what the future of money looks like. What is the most exciting investment that you've made so far while being at Dragonfly? You know, if I had to choose one, I think I would probably choose Maker. If you believe that the core thing that makes crypto successful is that it's permissionless, then a lot less of what is working in crypto in mysterious. What's up everyone? My name is Jackson. I'm your host and journalist at Cointelegraph. Today I have the pleasure of talking to Hasib Qureshi, who is a managing partner at crypto investment firm Dragonfly Capital. How are you doing today, Hasib? I'm doing well. Thanks for having me. So a few fun facts that our audience might want to know about you. At the age of 19, you were a self-made millionaire and a professional poker player. So how does someone go from having that early illustrious career to getting involved in crypto? Could you just describe a little bit, you know, your life's journey and how you ended up at this point? Briefly, you know. Yeah, yeah, yeah. Particularly, you know, how you made your way eventually to crypto and blockchain. Yeah, so it's a long story. So I'll give you this super, super rich version. So I was a professional poker player from when I was 16 until I was 21. And I was quite successful. I was a high six poker player back then. One of the things that I think learned at a very young age was that, which is something I think it has taken people in crypto sometimes to learn themselves, is the really obvious disconnect between money and happiness. And that, you know, you can't help but notice crypto is a place where you see lots of, especially very young people who've made a lot of money very quickly. And you can't help but notice that it's not as though everybody in crypto is incredibly happy all the time. In fact, it's one of the places where you see people kind of the most angry and chowdy and kind of getting into fights. I mean, it's incredibly stressful as well. Right, right, exactly. And poker is the exact same way. Poker is an incredibly stressful lifestyle. And so after a quick poker, I eventually decided that I wanted to get into the tech industry because I'd always had a lot of interest in entrepreneurship and a lot of the big tech companies and all the innovation that happened out in Silicon Valley. I was born in Texas, so I ended up moving out here to Silicon Valley. I lived in San Francisco now about six years ago, learned how to code. And eventually I was working as a software engineer at Airbnb. And that was where I first caught the crypto bug. And that was early 2017 when I first got into crypto. So I'd known about Bitcoin for a very long time. I bought some Bitcoin back a couple of years before. But it never really clicked for me what the big idea was. It always seemed like kind of a technological curiosity, a thing that some of my friends were speculating on or using to buy drugs or whatever. And the thing that I think really clicked it into place was that when I was working at Airbnb, I was working on the payments fraud team. And Airbnb is a global business. We have banking requirements and payments requirements all over the world because of course travel is international. And one of the things you realize when you're working on a global payment system is just how it's held together by ducting. All these disparate systems that were not built to interoperate with each other. You have things like CSVs that get emailed every midnight and people manually going through individual transactions and reconciling them. And it became super obvious that like this system that we're using today to pay people around the world is not designed for the 21st century with global digital first businesses that are operating all around the world 24-7. And it occurred to me that like, okay, as an engineer, you see a system that's so broken. And your first instance is, oh, we should just we should check this out and we should start over. And that's what crypto is. Crypto is a bunch of engineers and economists and game theorists and philosophers who came together and said, knowing everything that we know today, how would you do money differently? How would you design the system from the ground up? And maybe you would make it decentralized and make it use cryptography and you make the monetary policy algorithm. All these ideas that have come together in all these different cryptocurrencies. And look, I'm not convinced and I wasn't convinced that we're all going to be paying each other with Bitcoin 50 years from now. But I am absolutely convinced that crypto is going to have a say in what the future of money looks like. You know, we're not we're not turning back the clock. We're not putting this back in the box. So the way that money works in the future is going to be different. And crypto is a part of how the world changes with respect to the technology behind money. And that's what got me on board to the crypto industry. But coming from a background as a poker player, I think gives me a lot of advantages in the crypto industry. So for one, it's, you know, poker trains you one to be very, very clear minded about making, you know, fundamentally sound decisions and to not get distracted by results as opposed to engaging in the right process. That is a huge boon in crypto because crypto, of course, is full of manias. It's full of, you know, hype cycles. It's full of tokens that pump for no reason and then eventually going to come back down. And if you can't, you know, sort of use your, your third eye to really see like what is really happening here? You know, ignore the noise, ignore the fanfare. What is really going on with this token or with this project or with this technology? You know, poker trains you day in and day out to like really see clearly the truth and not just what you want to see. And I think that that helps me a lot within crypto industry. And then there's things like thinking probabilistically, you know, being able to be able to make high stakes decisions effectively and to not not get too mired in your own emotions. When you're, you know, of course you have super volatile markets, things are going up going down. It trains you very, very well to think about how to, how to sort of calm your mind and your emotions so you can just make your decisions. And in crypto that turns out to be also tremendously valuable. Thank you for giving me those parallels. You know, I'm always, I'm always very curious to see how people's past life experience feed into their ability to work within crypto. It reminds me a bit, you know, of Steve Jobs's Stanford commencement speech, you know, connecting the dots to see how all those things that you ended up doing in the past. Somehow come together in the future or in the present, I guess, to make sense. So thanks, thanks for giving that parallel there. But now I like to talk about, I mean, you're a managing partner at Dragonfly Investment. So I like to talk a little bit about what you're doing there. So first off, you know, what is the most exciting investment that you've made so far while being at Dragonfly? Yes. Exciting is a broad word, you know. Exciting is a broad word. So let me start with the first part of your question of, you know, what I do at Dragonfly. So I'm one of the two managing partners and I lead our investment team. And I also lead the office in San Francisco. So we have an office in Beijing and offices in San Francisco. And, you know, most of my day is spent doing one of the few things. They're talking to entrepreneurs, talking to our portfolio companies and helping support them and, you know, helping them figure out, you know, what they're going to do with their project, go to market, marketing distribution, all that stuff. And then just, you know, doing simple things that I think all of us in the crypto industry do, just writing and reading and trying to understand what's going on in the world, which is if anybody who's in crypto needs to spend a lot of their time doing that, because the world is just moving out from under us so rapidly, you know. Anyone investing needs to do that. That's right. That's right. I mean, even someone like you, I imagine, spend a lot of your time just like keeping up for the firehose. It's your job. It's my job. We're all in this thing. That's right. That's right. It's all of our jobs. So, you know, my most exciting investment that's tough for me to say it's like asking me like, you know, who's your, who's your favorite child out of your children. You know, if I had to choose one, I think I would probably choose maker, which ironically is kind of a, it's been relatively quiet in this defy mania that's been going on for the last month or so. But it's, it's in the long run, I think the investment that I'm most excited about, because I think, you know, we've seen stablecoins or those are enough familiar maker down is a decentralized stablecoin. It's a decentralized credit facility that produces a stablecoin kind of as a side effect. And the stablecoin is called dye, you know, it's maybe the fourth largest stablecoin by issuance or something like that third or fourth. And it is, it is the largest decentralized stablecoin by issuance. And I'm convinced that the central stablecoins are going to become really, really important in the next three or five years. As an investor, one of the advantages that I have over other people who are investing in the space is that because we're venture capitalists, we can afford to invest over much longer time horizons than people who are trading in and out of these tokens and worried about things going up and down. So, you know, we're investors in combat, we're investors in number of the defied projects that have been doing really well in this mania that's been going on these last few days. But maker I think is one of these projects that like the story of stablecoins stablecoins have grown dramatically within the last year, you know, we now are, I think up to almost $10 billion stablecoins issue, and almost $1 trillion of transaction volume. And that trend is only going to grow. You know, it's already clear, I think that pound for pound, the most product market fit of anything in crypto is stablecoins. You know, one thing that we, when that we know we don't need to fool ourselves on is that there's enormous demand for dollars all around the world. And stablecoins give people a better way of getting access to those dollars. But I don't think that the regulated versions of the centralized versions of the stablecoins are going to be able to last forever. And when the, when the clock runs out on the centralized stablecoin plays, then I think it will be will eventually get to that moment where it becomes clear that, you know, everything that these decentralized stablecoins were doing was a dress rehearsal for the really, really, really big moment when, you know, eventually, Tether is going to have to go, I think these regulated stablecoins will have to significantly clamp down on the activity that they allow on top of them, because they're centralized and totally regulated. And then you'll see, like, look, the affordance that people have Tether, and you can just send it anywhere that it effectively is permissionless. It sort of just feels no different than Bitcoin. The only way you're going to get that in the long run is through a decentralized stablecoin. And I think that process might take a few years before, you know, the A to B to C to D plays out. But eventually we'll get to a place where the decentralized stablecoins become the only game in town. And for that reason, I'm very excited about what Maker is building is a very slow and steady path to being ready to pick up the baton when it finally shows up. I like that. And Maker is really interesting because it's essentially like a decentralized bank, which poses a very distinct threat to a lot of legacy financial institutions. So it's an interesting one to keep an eye on for sure. I also like to ask you, you know, you've been managing this portfolio at Dragonfly for, I think, three years now, right? No, no, no. So the fund was founded two years ago and I joined one year ago. Okay, one year. So what has been your biggest learning experience so far managing the portfolio at Dragonfly? I guess learning experience. It's a great question. I would say, you know, one of my biggest learning experiences is just getting smarter on China. So I, you know, I since I joined Dragonfly, I have massively increased my understanding of what's going on and the differences between the East and West when it comes to crypto. You know, so before I was at Dragonfly, I was at another firm called Metastable Capital, which is one of the largest Silicon Valley crypto funds. And, you know, at Metastable, we never really did any Asia deals. And the reason why we didn't do them is that we just knew there was a ton of adverse selection that we just didn't really know what we were doing. It was very difficult for us to diligence these deals. They look so different than the Silicon Valley, you know, sort of traditional Western deals that you see that they might not all come out of Silicon Valley, but they come out of, you know, Berlin or Tel Aviv or New York or Toronto or whatever. You know, the deals that you see coming out of China are incredibly different. You know, just the types of entrepreneurs, the type of businesses they're tackling, the dynamics behind the companies at scale, they're very, very different. And it took me a while to really understand that and kind of getting connected to with more of these entrepreneurs and coming to understand the way they think about the space. You know, the interesting thing is that most of the technological innovation thus far crypto has come from the West. It's come from those relatively few places that I mentioned. But most of the trading volume, most of the adoption, and most of the really large unicorns, right, if you think of mining companies and lending companies and so on, they come from Asia. And so you have this like this kind of import-export thing going on, right? This is sort of flow between the East and the West. And one of the things that I've come to realize, you know, that was, that was the extent of my understanding back when I was at Metastable. And I think since joining Dragonfly and spending more time in China and with some of these Chinese entrepreneurs is one realizing how quick they're catching up. So the, you know, especially since, if you guys remember in late 20, 2019 Xi Jinping announced this blockchain plus initiative in China. This big thing, you know, relatively unprecedented last time they did this with AI, saying that blockchain is strategic importance for China. And this basically turned blockchain in China overnight from being a taboo into being like a patriotic duty, right, to go and advance China's, you know, position and blockchain technology. And all of a sudden, you know, a generation of young people who saw a blockchain is like this weird thing, kind of like we were talking with, you know, earlier in the discussion about poker. It's like weird thing to bet their careers on that their, you know, their parents and their peers would kind of look at them odd, like, you know, you're getting into like marijuana sales or something. You know, it's like this, you know, kind of vaguely disreputable thing that you're up to. And suddenly now it's like, oh no, this is great, like, you know, all the top universities are like teaching blockchain classes. And suddenly it's cool to be doing crypto. And I've realized what a big shift it's been in just the, the, the status, the relationships and the quality of entrepreneurs that are going in China. That has been a huge learning for me is just kind of seeing how quickly something like that can change and watching that transformation happen in real time. Yeah, yeah, China, China has an immense amount of power. And given their recent product or their advancements with their CBDC, it'll be really interesting to see how that whole side of the world develops. And I think you're totally accurate there. China just works differently from the West. So it's really important to understand because, you know, at the end of the day, crypto is global, Bitcoin is global. And you got to understand all areas of the world if you want to be able to make sense of this thing as you were talking about before. Making sense of it all is really important. And you, you tweeted recently something that caught my eye. You said that people are increasingly convinced that the core thing about crypto is not that it's decentralized, but that it's permissionless. So what exactly is convincing you of this idea? So this, this is a, yes, so this goes to a much larger conversation that I've been having with myself. So I wrote, I wrote a piece that I shared on Laura Shin's podcast on change. And when I talked about basically how I think there's been this narrative within crypto that decentralization is the primary and most important thing about crypto and about what makes it so compelling and so interesting. And it is the buzzword. It's the buzzword that's at the center of crypto. And if there's one thing that somebody is coming new into this, you know, lack of better term, this, this culture of crypto. The one thing that they learned is that the prime value of crypto and crypto people and crypto culture is decentralization. And I think this is, I think this is wrong. I think decentralization is a means for an end. There's nothing intrinsically valuable about decentralization decentralization gives us more of other things that we want and that we care about. And so those, in another way of putting this is that there are terminal things that we actually want. Right. So some things that we actually want is we want censorship resistance. We want security. We want value. We want, you know, usability. We want, you know, low transactional fees. We want having to be cheap to use these systems. And decentralization sometimes making the system more decentralized is sometimes a way of giving us the properties that we care about. But, you know, sort of mindlessly worshiping decentralization as though it is in and of itself the primary thing is wrong. It's sort of getting lost within this, you know, sort of mistaking the, you know, an original instrumental goal for the final goal. So what is the final goal, right? There are a lot of final goals. There's not just one. There are a lot of different things that you want to optimize for and building a robust crypto network. But I think what I'm pointing to when I say that the primary thing is being permissionless, not decentralized is that, you know, look at Tether. Tether I think is an obvious example here because it's, you know, it's incredibly dominant in crypto. It is, it is, it does more trading volume than Bitcoin on those days. And Tether is not decentralized at all. But as I alluded to earlier, you could argue quite well that Tether is basically permissionless. You can go buy Tether from anywhere, you can transfer $30 million of a single transaction. You don't need to tell anybody who you are and what you're doing, right? Like, you never need to ask permission from Tether to acquire Tether to use Tether to sell Tether, whatever. The only thing that you need to acquire permission for is to participate in an on ramp or an off ramp. But for the most part, like that is not really what we need Tether for, right? Like most Tether is a standard for dollars, not a way to get dollars. So, and, you know, another, of course, we just saw WPGC go from almost nothing to now, you know, over $100 million in issuance. And I suspect that that's only going to grow as a way of bringing Bitcoin onto DeFi. And I remember having conversations with this about people or about this with with folks six months ago before any of this happened that I thought WPGC was going to grow like crazy. This is when it had like, you know, a million dollars in deposits. For the for the same reason that I think the core thing that people really care about is permissionlessness. They want the ability to do what they want to do at any given time. And, you know, I remember Naval made a very good point about this. That, you know, he said, if you remember back in 2018, you know, Dexas weren't really doing a whole lot. And it was very quiet time for Dexas compared to a centralized exchange. Dexas grew up from seemingly out of nowhere and started taking over the world. And, you know, one of all points that I thought was very prescient was that, you know, when people talk about Dexas, they sort of have this idea in their head that, you know, Dexas, it's, you know, it's like this, it's this exchange that anybody can use. You know, there's it's not totally unregulated. It lists any asset that you want. You can trade anything. And there's no KYC. There's nothing about it. There's none of that. It's just like this total Wild West, right? And that's what's so awesome about Dexas. Well, that's exactly what Binance wants. Like Binance was sort of everything that you wanted, that you said that you wanted from a Dex, but it's a centralized exchange. But it sort of doesn't matter to the extent that you trust Binance and you sort of expect them not to, not to exascam you, which, you know, sensibly a lot of people do. It gave people most of the properties that they said they wanted from a Dex and that is the extent to which it succeeded. Now, I think I thought to say that I don't think Dexas are valuable, but I think that it all sort of, if you, if you believe that the core thing that makes crypto successful is that it's permissionless, then a lot less of what is working in crypto is mysterious. Subscribe and hodl.