Cold Open On Lore Building

DeFi Dave 0:00

the whole concept of lore building is it's not you creating the story and telling the community, it's actually the reverse. It's the community telling the story, and you're more of the shepherd.

Welcome And Guest Background

Joeri Billast 0:12

Hello, everyone, and welcome to the Web3 CMO Stories podcast. My name is Joeri Billast. I'm your podcast host, and today I'm excited to be joined by Defi Dave. Hey, Dave, how are you?

DeFi Dave 0:25

I'm good, Joeri. How are you? Thank you so much for having me here. I'm really excited to, deep dive into all the questions you prepared before. And I always appreciate a host that not only sends questions before, but they know the direction where they wanna take things. So thank you a lot, and I'm excited to get this going.

Joeri Billast 0:42

Thank you for that, Dave, for me it's important, to have a conversation that goes in a direction that makes sense, right? If you haven't heard about Defi Dave. Defi Dave is the head of growth of Cap, and that's an on-chain credit platform backed by Principal Protection, which is backed by Franklin Templeton, and he's one of the

DeFi Dave 1:02

Bien

Joeri Billast 1:04

educators and commentators in the space with a career contributing to multiple projects, including Frax, Gelato, and Dinero Redacted, and he's also podcaster, so the host of Defi Dave and The Cap Room. Welcome, Dave. As my listeners know, I always dive straight

Why Outsiders Misread Crypto

Joeri Billast 1:22

in. for people that know you, you've spent years explaining DeFi to people inside the ecosystem, but what do you think people outside crypto still fundamentally misunderstand about why this technology matters?

DeFi Dave 1:38

to begin, I think people outside of crypto have the tendency to lump everything as one thing together or into a few different categories. They basically see things as there's Bitcoin, and then there's everything else, and that everything else is Ether- everything from Ethereum to meme coins. People that are in the space know that isn't the case, but to the outside person, it is. And when you're talking to people outside of crypto that don't work in the space or are not involved in the space, they don't understand the nuance. So I think first and foremost, you have to start separating and siloing all the different categories of crypto. It's kinda like, I would compare it to a music genre, like electronic music. There's so many different types of electronic music. You have house, you have techno, you have dubstep, and even in those, you have different, like, subcategories. But to the untrained ear, they can't really tell the difference. It's all the same thing. crypto is the same way in that regard. So you have DeFi, you have, you know, infrastructure, you have privacy. so you have to make people aware that exists, and then you can go into DeFi and why DeFi matters and all that

Joeri Billast 2:46

Yeah. makes sense indeed. if you're it, everything sounds so logical, of course, but from the outside it can be a bit scary or a bit difficult to understand. you recently

DeFi’s Metamorphosis And Stock Tokens

Joeri Billast 2:58

described on-chain finance as being in the middle of a metamorphosis. What is changing now that feels, structurally different from the previous cycle of crypto adoption?

DeFi Dave 3:11

Yeah. So I think I said that a while ago, and I still believe that, but I also do believe that on-chain is back, DeFi is back. It feels like DeFi summer, is happening again, but in twenty twenty-six on the Robinhood chain. but that doesn't mean that DeFi isn't in a metamorphosis. It's like there's a fork, like things that go different directions. And so to answer your question about the metamorphosis, I said this on another podcast recently. Basically, with stable coins, like the ones I work in, like CAP and other ones, the stable coins in general are becoming more institutional. They're becoming more TradFi products. On the inverse, actually, you see all these stock tokens come out. You have like the Robinhood stock tokens, you have the Coinbase stock tokens, and if you see what's going on in Robinhood chain, well, the opposite is happening. They're becoming more crypto. They're becoming... You, you see the same energy and the same experiments that happened in twenty twenty and twenty twenty-one, that's... That happening again. But now because you have this new primitive of stock tokens, a lot of excitement, a lot of attention, a lot of liquidity surrounding that. You're seeing a lot of things that just were not happening a, a month ago, and It's really... It's, like, feels good to see

Joeri Billast 4:21

Yeah, indeed, stablecoins are increasingly becoming infrastructure for payments and treasury

DeFi Dave 4:27

Ja

Joeri Billast 4:27

than something, people consciously think of a cryp- as a crypto product, huh? Now,

Stablecoins As Public Money Rails

Joeri Billast 4:33

what changes when marketers and entrepreneurs start thinking of them as financial rails instead of assets?

DeFi Dave 4:41

So when it comes to stablecoins, I like to think, if I'm explaining to even a person outside of crypto, it's basically Venmo. It's basically PayPal. If you look at your balance on Venmo or PayPal, you see like, "Oh, I have like X amount of dollars." that is held on a private server. All stablecoins are, instead of being on a private server, it's on a public server, and instead of one entity keeping track, like the PayPal entity, you have multiple entities, multiple counterparties keeping track of your balance. and so when you think of it in that regard, stablecoins are really not that much different than other dollars. it's just a new way to represent dollars, And this has happened time and time again throughout history. I mean, the first banks, they issued receipts. Receipts were just like IOUs and stuff. your money in your bank account, your deposit, people are like, "Oh, I have dollars in there." well, that's actually, like, you're loaning to the bank. That's what it, like, technically is. You're loaning money to the bank. and so nothing is new really under the sun. it's just the technology's changed. The technology has evolved and updated, and now we are in the modern age, the blockchain age of dollars

Joeri Billast 5:47

I love that you use these comparisons with things that people know, I know that you've compared Op-Opportunity in credit to what Shopify did for commerce, and now you just mentioned Stripe, what it did for payments.

On-Chain Credit And CAP’s Model

DeFi Dave 6:00

Ja

Joeri Billast 6:00

if credit can eventually move at the speed of commerce, what new business models become possible that are now difficult to imagine today?

DeFi Dave 6:11

Yeah, so when it comes to credit, there's still a lot of friction and there's still, you know, a lot... things take time. for example If I'm-- if I wanna go get a loan from a bank or if a business wants to get a loan from the bank, you know, you have to apply, you have to, like, know somebody, it's a whole process, due diligence and this and that. And, that's all valid. You need to do that for sure. But if you do it once, like why do you have to like wait and like do it again and again and again? So the thing with credit on chain, especially with, platforms like Capp is you only real... Capp is-- I guess I can just go into Capp now. I call Capp a credit platform that's powered by this new innovation called funded underwriters, and it's these funded underwriters that put up these financial guarantees and principal protection that give loans to the borrowers and protect depositors and backs up the entire system. And so normally how things work is, especially in private credit, it's the borrower and the underwriter are basically the same thing. It's they're taking the money from the depositor, they're making the decision of where to allocate. but the issue is, the larger they grow in AUM, the harder it is to make a return. Like you have to beat the T-- you know, whatever the T-bill rate is, which is like three and a half. Well, You have to beat the market. You have to like have like a return, a, a respectful return, I mean. but your limit, y- like people are-- have limited knowledge in the market. The more risk you take, the higher you go, the faster your fall. And so we see this time and time again with, private credit where, they don't have redemptions, they delay them, private credit funds go bust. and it's because people are not aligned. there's a conflict of interest. You have this principal-agent problem. And so with Capp, what we've done in the structure of our system, in the structure of our market, is we took that underwriter part out of the borrower and brought it to be an independent entity, and we call this entity the funded underwriter. And the funded underwriter, they wanna be paid for their good judgment. and in order for them to do that, they post their own collateral and diligence a borrower in our system. And so based off that judgment, they either get rewarded, with a premium for that, for the borrower's activities, or they get penalized and they get slashed. And so in our system, to go all the way back to your question, once a borrower is diligenced by an underwriter and the underwriter posts their collateral on the borrower's behalf, then they don't have to do anything else. They can access the depositor capital. They can access it twenty-four seven, twenty-four seven markets, and that's what crypto is all about. If you need it, you can get it. You don't have to wait for anybody. You don't have to ask per-permission for anybody. and that is really the beauty of crypto, and that's what we're doing with credit at Capp

Joeri Billast 9:03

Yeah. I love that you explained that so clearly for my listeners.

DeFi Dave 9:08

Thank you

Joeri Billast 9:08

also see, yeah, we also see neobanks increasingly integrate stable coins and DeFi infrastructure. Do

Making Crypto Invisible For Users

Joeri Billast 9:16

you think that consumers will eventually know they are using crypto at all, or does mainstream adoption actually depend on making the technology disappear?

DeFi Dave 9:27

Oh, definitely the latter, making the technology disappear. I think a lot of times when the consumers hear crypto, let's go back to my first answer, what I'm saying, they either think Bitcoin or they think meme coins, and they view both as highly speculative and volatile. So the latter. Just same, same, same thing as the internet

Joeri Billast 9:43

Yeah, but I had to ask the question. Now,

Regulation Gaps For Lending Markets

Joeri Billast 9:47

institutions are clearly becoming more comfortable with on-chain finance, but regulation and politics are evolving at the same time. What do you think that policymakers still understand about stablecoins and DeFi, and where should regulation actually accelerate adoption rather

DeFi Dave 10:07

Yeah.

Joeri Billast 10:08

down?

DeFi Dave 10:09

I gotta give a lot of these policymakers credit. I think they understand more than the people realize. it's become a higher priority in this current administration's agenda. So, these legislators had to educate themselves, had to have their staffs educate themselves. And look, I know we didn't pass clarity, but hell, at least we got Genius Act over the line, and at least we have the SEC and CFTC that are figuring out, all the regulations and stuff and figuring out rules. and where would I like to see things going? Well, if I think, when it-- with stable coins, there are clear rules now with the Genius Act. the Clarity Act, it tried to address tokens. there isn't really anything for lending markets, like clear, clear rules for like what you can and can't do. So I think having stuff along those lines, this is something that, the CEO and founder of CAP, Benjamin, has mentioned on the Schwab network in his appearance, something along those lines that regulate these, decentralized lending markets, would go a long way because we've seen, more often than not, these lending markets just fucking blow up. Sorry, excuse my language. They just blow up. A lot of stable coins are just tokenized hedge funds. and they do blow up, and there should be more accountability for that to protect the end user and end consumer

Joeri Billast 11:19

Yeah.

Rates And Macro Versus Real Fit

Joeri Billast 11:21

Now, you have been looking, closely at, the relationship between treasury yields, liquidity, the cost of capital and crypto markets. What should founders, marketers understand about the macro conditions if they want to avoid mistaking a rising market for a genuine product market fit?

DeFi Dave 11:42

I think founders had to recognize that crypto in the wider global economy is still a small blip and still affected by rates and still affected by macro trends such as, what wars are going on, what instability there is. so just be aware of those things, especially with rates. it can go either direction. If rates go down, then, it's all systems go pedal to the metal. But if rates go up, it's like, all right, people are tightening their bands and tightening and everything. So just being aware of that and just knowing how much you need to spend as a founder. Like, you don't want to be too conservative. You're not running a mom-and-pop shop. You're running a high-growth startup. But don't, spend money too fast. just be like just right. There's a Goldilocks zone

Joeri Billast 12:27

Yeah.

Lore Building Versus Gamified Momentum

Joeri Billast 12:28

Now, you mentioned wars and also crypto has always been powered by narratives. but you've also discussed, I think some time ago, gamified metrics and the loss of, some cryptos cultural force.

DeFi Dave 12:44

Mhm

Joeri Billast 12:45

how can founders tell whether they are building genuine momentum or simply becoming very good at manufacturing signals of momentum?

DeFi Dave 12:55

Yeah. Genuine momentum you can't fake. you just know, in my opinion. Or you should know. If you don't know, then you shouldn't be a founder. I think, that what you took that from is my lore building series. and lore building is a concept I coined in the midst of Eat Denver in 2025 because I just thought it sucked. a friend told me like, "Hey, I think we need better storytellers." And so I'm just like, "All right." Like, and that kinda got my wheels turning. And the whole concept of lore building is it's not you creating the story and telling the community, it's actually the reverse. It's the community telling the story, and you're more of the shepherd. You're more just creating the field for like others to play and like, you know, create the shared story in. and so that is the most powerful, and it's just all A/B testing. You see like what hits and what doesn't hit. and so when it comes to gamified metrics, you're not really A/B testing, you're just... You already like decided like, "Hey, like this is the metric I'm gonna go for," and like, "Okay, the met- the A is what I'm going for," and then you just try to optimize A to its highest degree, to the point where it's just absolutely useless. and so you always have to be, as a founder, you always have to be aware, whether it's, you know, with story or with product market fit, like what is actually hitting and what doesn't. It's just like that simple

Joeri Billast 14:14

Yeah.

DeFi Dave 14:15

Ja

Attention Traps And AI Content Slop

Joeri Billast 14:16

You maybe, maybe you know or you don't, but I've written this book, "The Future CMO," and in that book I explore how marketing leadership increasingly connects customer value, business value, and trust, more important than ever these days. Now, in crypto, where do you think growth teams still optimize too heavily for attention instead of durable value?

DeFi Dave 14:40

So it's interesting now, operating in today's conditions, especially as things pick up, because you see a lot of AI slop. You see a ton of AI slop. You can tell when articles are written by ChatGPT or Claude. you can clearly tell when, like, a website is just vibe coded and stuff like that. So in today's world, the advantage is just having taste and having, a good eye to stand out and be unique and niche. You have to have your own personality. The whole thing with AI is not only does it synthesize information in, but the output is flat. Like, it just has the same output for everyone. That's why when you read, you can tell when something is a ChatGPT article or a Claude post. It's because it talks in that manner. And so all you have to do is just stand out and be different and just be you. And if, people want to follow and, if you resonate with people, they will follow. If not, then just go back to what I say in an A/B test and I say still be you, but be a different version of you, you know?

Joeri Billast 15:42

Yeah, exactly.

DeFi Dave 15:43

I'd say people are most attracted to people that are passionate. There's something magnetic about people that are genuinely passionate, and people just wanna follow that. so just find what you're passionate about and things should follow through. and if you're passionate about it and people don't follow, then screw them. Who cares? You're passionate about it

Joeri Billast 15:59

Exactly. that's what Gary Vee also would say. I love your passion, by the way, Dave.

DeFi Dave 16:04

Угу

Joeri Billast 16:04

really feel it here, on the podcast.

DeFi Dave 16:06

See? That's what I mean.

Joeri Billast 16:09

yeah,

DeFi Dave 16:09

Yeah

Joeri Billast 16:09

You know, you're talking about it and, I also spoke here in Lisbon during my TEDx talk about it. AI makes content research, distribution almost unlimited. So the question is how-- in this world, where AI makes content research and distribution almost unlimited, what becomes more valuable in how a crypto company educates the market and earns credibility?

DeFi Dave 16:34

Oh, I think you just gotta be creative and connect with people on a personal level, on a real level. That's why, for example, in real life events are coming back because that's something you can't AI a real life event. that's genuine, you know, one-on-one interaction. So, I'm always for in real life events. outside of that, I think it goes back to my last answer, just like be niche, be you, and find a way to genuinely connect with people, online. it is possible, and so that means like you just gotta stand out

Joeri Billast 17:05

Yeah, we are doing it right now, right? Connecting a podcast is one of those things for me,

DeFi Dave 17:10

Yep

Joeri Billast 17:10

you see people. it's, you know, it's not AI-generated, guys. This is a real-life podcast with DeFi Dave.

DeFi Dave 17:17

Ja

Growth Beliefs And Learning Fast

Joeri Billast 17:19

now Dave, you, you've worked across, Gelato, Dinero, Frax-related ecosystems, and now CAP,

DeFi Dave 17:26

Yeah.

Joeri Billast 17:26

almost

DeFi Dave 17:27

And also UFG. Yeah, also I just wanna plug UFG. It's a new thing. It's something I'm contributing to. Shout out my founders. UFG, @UFGDefi. Go...

Joeri Billast 17:38

know

DeFi Dave 17:39

Yeah. So yeah, I do a lot of things. I've done a lot of things,

Joeri Billast 17:42

a-and while you're doing those things, you are also spending time, a lot of years as an educator and a podcaster, What belief about growth in crypto have you changed your mind about most dramatically? I'm curious.

DeFi Dave 17:59

what has changed in my growth philosophy? That is a great question. I'm trying to think what I thought before. It's more-- I don't know, like, if change is the right answer, but how it's evolved. because I've been in crypto and startups for 10 years. and so I've been learning a lot. It's-- it feels like a permanent school in a way Like, I'm just, like, in the school of life, in the school of startups, in the of crypto. And I think the biggest thing is you have-- don't be afraid to be wrong and be willing to adjust. you know, you're gonna be wrong. We're all wrong. We're human. We're not perfect. And when you're wrong, don't be sad about-- don't beat yourself up about it. Just kind of observe, review, ask yourself why and how you can improve in the future. and then the biggest piece of advice is don't doubt yourself. and if there's an opportunity that you see that you believe, like, if you believe with your mind, heart, body, and soul, and everything aligns with it, go all in on it. And if you do go all in, no matter how it works out, it will work out because you're aligned in all those manners.

Joeri Billast 19:05

Exactly. You know, you just go for it and when you quit, you don't lose, right? And sometimes it's something you get rejected somewhere. But for me, it's not rejection, it's redirection. You just, choose another direction and at the end, it all makes sense. Like I organize a retreat here in Sintra. In the beginning it was

DeFi Dave 19:21

I love Sintra.

Joeri Billast 19:22

to

DeFi Dave 19:23

So beautiful.

Joeri Billast 19:24

Sintra. That's, that's

DeFi Dave 19:25

Yeah

Joeri Billast 19:26

It's, I-- two kilometers from here is the Pena Palace. yeah,

DeFi Dave 19:30

Mhm

Joeri Billast 19:30

place and, and I wanted to do something here, but it took some time. But now, you know, it's happening.

DeFi Dave 19:35

Mhm

Joeri Billast 19:36

So if you're not listening, send me a message if you want to do more. Dave, let's look a bit ahead.

Trust Storytelling And Distribution In Five Years

Joeri Billast 19:43

Let's say, let's look five years ahead, and on-chain finance has generally moved into the mainstream, What will the companies that have understood, what will the companies... Sorry, I will repeat. What will the companies that, have understood about trust, storytelling, and distribution that most founders are still missing today?

DeFi Dave 20:10

they would understand what I was talking about before with lore building. You have to give people the pieces, to create a story, and they will-- and from that, you will figure out a story that resonates with people. I'll give you an example of-- I always use for lore building is Satoshi is the first lore builder in crypto. He created Bitcoin. But what did he do? He wrote the white paper. He set up the forum, Bitcoin Talk. and then he set his seed, put his seed to the ground, and spread it to the world. And see, it's kind of like a frequency, and he saw who came back. and the people that came back are the people that made Bitcoin what it was in those early days. They're the people that came up with the HODL meme. They're the people that came up with not your keys, not your coins. they're the people that came up with 21 million Bitcoin is our one commandment. It can never go above that. Satoshi was able to... He didn't do any of those things. It was the community that did those things. and the story just kind of wrote itself. And so I think the winners five years from now, those stories from those companies will write themselves as well

Joeri Billast 21:14

amazing. I loved actually the word lore. so I think last year I was on a panel here in Lisbon at NFC Summit, because the main sponsor of the podcast, RYO, has a meme with value behind it, which most meme tokens don't have. And I was speaking about the lore that RYO, RYO-CHAN actually is protecting you against fraud.

DeFi Dave 21:33

Yeah

Joeri Billast 21:33

I've been,

DeFi Dave 21:34

yeah, it's funny. Somebody sent me the book Primal Branding, I think they're in Lisbon, where I have a friend in Lisbon, that, I forget who the author is, but the whole Primal Branding thesis is very similar to lore building and both came up with the same conclusions, in different ways independently

Joeri Billast 21:49

Amazing.

Where To Follow And Final Asks

Joeri Billast 21:51

um, Dave, we are at the end of the podcast episode. it was really a pleasure to have you, but what I always ask at the end is, where can people follow you? Where can people find you? Where can they know more about you, what you're doing?

DeFi Dave 22:05

So if you wanna follow me, my Twitter is @DeFiDave, Twitter, X, whatever you call it. my Instagram's @davedoingthings, I'm also on TikTok, @davedoingthings, and I have some funny videos of me eating food there, if you want something, some comic relief. you can find CAP, @capapp on X Twitter, and you can find UFG @u- ufgbfi on X Twitter. I... If you wanna learn more about Cap, go to cap.app, read our docs. never been easier to do a deposit in Cap, by the way, with Halliday. You can deposit with a bank account, with your cards, Apple Pay. no gas needed, no complications needed. So you can go ahead deposit today, earn a nice five percent. Thank you so much, Joeri

Joeri Billast 22:52

I will put the links in the show notes that you

DeFi Dave 22:55

Yeah

Joeri Billast 22:55

to Cap, all your, all your social, social

DeFi Dave 22:58

Yeah

Joeri Billast 22:59

There is a blog article too, you know, like I always create show notes, a blog article. There will be a lot of content out there where you will see the Defy Dave.

DeFi Dave 23:08

Mhm

Joeri Billast 23:09

check out the show notes. So Dave, again, thanks so much for sharing all of your wisdom

DeFi Dave 23:15

Thank you for having me. I hope to see you soon

Joeri Billast 23:18

Guys, what an interesting episode. I'm sure that you know people around you that would also love to listen to this episode, so be sure to share this episode with them. If you're not following the show or not yet subscribed to the show, well, this is a really good moment to do it, if you haven't given me a review yet, if you give me these five stars, this really goes a long way, and of course, we'd love to see you back next time. Take care.

DeFi Dave 23:43

Take care. Ciao