Fintechs and banking apps won't ever be able to match the user experience of decentralized finance, he says.
|Nov 22|| 3||2|
Hello defiers and happy Friday! Sharing with you an interview with Pascal Tallarida, CEO and cofounder of Jarvis exchange, who is two months away from going one full year living without a bank and relying almost exclusively on cryptocurrency and DeFi platforms. He’s minted Dai at a bar to pay for drinks and DeFi lending interests allow him to pay for all of his groceries in Bulgaria. Pascal says the main feature that will bring in users in the developed world won’t be high interest rates; it will be DeFi’s better user experience, which he thinks traditional banking apps will never be able to match.
The interview has been edited for brevity and clarity and I’ve bolded my favorite quotes.
Pascal Tallarida: I was traveling across Europe trying to move from one country to another every year and I really liked Bulgaria so I decided to settle there five years ago. My background is in the financial industry. I'm a senior or Forex trader. I spent the past 12 or 13 years on the financial markets. I have launched two companies in France, one which is an educational company that teaches and coaches people in trading, investment. In parallel we have developed a prop trading company, where we hire traders, give them capital, manage their risks and share the profits.
Then we wanted to develop a trading platform and launched it. Back then someone came and said, look into cryptocurrencies. So we started to look at it and we started to develop a trading platform for centralized exchanges. This was in the beginning of 2017 and pretty much that's how I arrived in crypto. When then the ICO craze arrived I started to be way more interested by the underlying technology of blockchain, especially applied to finance. We gave up on the idea of making a basic trading platform and went all-in on the crypto sphere.
In the beginning of this year I was interested in everything related to decentralized finance. I started to lend my Dai using centralized applications, like Celsius network, and also decentralized applications, like Compound.
I made a video to educate my French community about it. And while I was making the video, I was like, “You know what guys, I will make a test for the next three months. I'll replace my cash with stablecoin, and my bank saving accounts with lending applications and protocols, to use them as crypto saving account, and I will give you my point of view in three months.” And during the the three month experience, I enjoyed it as helped me to put more energy and most time into DeFi. And actually I totally fell in love with this idea and I decided to continue this experience. So I decided try to hold the experiments into January so that it will make a complete 12 months.
Camila Russo: Can you tell me more about how you manage to do this? Like how do you pay for rent? How do you pay for everyday things?
PT: Yeah, so the first thing that is very helpful is that living in Bulgaria, the cost of life is pretty low. Interests that I generate every month with my capital were enough to cover at least the food expenses. For rent, I'm using Wirex, as the fiat gateway, so I receive my salary in Dai, covert it into euro, then I go to the ATM and withdraw it and I pay the rent, or eventually I can wire it, using Wirex too. And it's the same way, for all the interests, that I accrue. So when I want to pay for food or whatever, I am only using my Wirex card, which is not a perfect system. When you use the Wirex card, if you wants to pay in a currency, which is not supported, and in Bulgaria we have lev, we don't have euro, you are charged with an additional three percent fee. That’s in addition to the 1 percent fee you pay to change Dai to euro. Actually I didn't make that much money this year because of all the fees and rate price. Also when you convert Dai to euro you lose on the price. But it was more to show to my community that it's possible, maybe not for everyone, but in theory it's possible. And so I wanted to show them what the future could look like as soon as everything is more scalable and cheaper.
CR: So how were you able to receive your salary in Dai?
PT: In Bulgaria you have the right to be paid in cryptocurrency as soon as you declare it. I'm paid in Dai basically most of the time. Sometimes ether but most of the time in Dai.
CR: What does Jarvis do?
PT: We are doing two things, a contract-wallet and set of trading protocols. The protocols give to anyone the ability to trade or invest in any financial assets and markets, either through synthetic assets or through margin trading. Our first protocol give a margin economic exposure to the price of any assets, whether it's a forex pair, stocks, commodities or cryptocurrencies, by depositing a collateral in Dai. We launched it on the testnet this summer and we hope to launch on the mainnet at the end of the year; next year we will spend all our time and energy to try to decentralize it as much as possible, and to make it one of the building block of DeFi. Right now it has still a lot of centralized components.
The second thing we are doing is a gateway for DeFi ot easily onboard anyone into it, even non-crypto people, and then help them to leverage from all the DeFi services, products and protocols. We work hard hiding the underlying technology to make it look like a normal fiat wallet.We are partnering with UniversalLogin, to develop a smartcontract wallet, with ENS login, meta-transaction, multi-signature features, DeFi protocols natively integrated and a web3 provider to connect to non-integrated protocols.
CR: Which application have you tested so far?
PT: All of them. Literally. I have started in Celsius in the beginning of the year and then on Compound. And then I started staking my Dai everywhere; Nuo, dYdX and Fulcrum, and most recently DDEX. I tried to do some arbitrage, even across centralized and decentralized solutions; as example I borrow or mint Dai, sell it on Bitfinex for USD and lend USD there (which has a high rate).CR: Which one is your favorite or can you tell me a little bit on kind of the pros and cons that you've found across them?
PT: My favorite is Compound just because historically it's the one that they have used the most among all the other DeFi projects. I also like Fulcrum because it allows, like Compond, to tokenize your balance. This, for me was awesome because it opened up a lot of different possibilities, as example using cDai or iDai in our trading protocol instead of Dai. I also like Nuo a lot even though the liquidation process is a bit more risky, but the rates there were incredible last summer. I think the highest rate I had was close to 33 percent on my Dai.
CR: You mentioned something about tokenizing your balance on Fulcrum, how does it work and how did he use it?
PT: Well, the same way that you have cToken with Compound, you have iToken with Fulcrum. When depositing Dai there, you mint Dai (iUSDC for USDc, etc.) which helps you remaining liquid. Just like cTokens, it becomes a primitive that you can use in a number of other things like, you use them as collateral for loans, margin trading, or even build things on the top of it, like rDai.
CR: Oh, that's interesting.
PT: I have to mention, I still have Revolut. I was topping-up my Revolut account with my Wirex card numerous time. As I told you, every time I used my Wirex card in Bulgaria I have to pay 3% of additional fees, but two months ago, someone showed me that you can use the Wirex card to top-upyour Revolut account. And that's how I can use my Revolut card, which doesn’t charge any fees.
CR: Okay. Got it, let me see if I got the process right. You receive Dai salary from your company Jarvis, then you deposit that Dai across different decentralized and centralized solutions to get an interest rate return that kind of has varied during the year between, from 4% to as high as over 30%. From the crypto you get from your salary and the amount of money you make from interest, you convert that to euros into using Wirex. And Wirex also gives you a card, which allows you to pay for different things for your daily expenses. But the problem with that is that it charges you 3% when you're not using euros (or any other supported fiat currency). So in Bulgaria, you transfer the euros from your Wirex card to Revolut and use Revolut card to pay for your daily expenses because you don't get charged an interest rate. And then you mentioned something about withdrawing cash euro with Wirex. That was to pay your rent?
PT: Yeah. Bulgaria has a pretty low level of card acceptance so you always need to have cash with you. Also I am using Wirex, because another project I follow, Monolith, was only available for iOS users. Recently Monolith has launched their application on Android, so now I'm going through the KYC to see if it would be better to use Monolith rather than Wirex.
CR: Okay. And Monolith is also a card, right? It's like a debit card.
PT: Yeah. Monolith is a non-custodial wallet, unlike Wirex, whose is fully custodial; the good point for Wirex is that since it is a centralized application you can hold Bitcoin, ether, XRP and Dai while Monolith is a contract wallet on Ethereum, so it’s only supporting Ethereum tokens and Ether. Whenever you want to use your Monolith cards, you just convert your tokens into euro in their app and load your visa card. I'm doing the KYC right now hoping to receive the card soon. I would feel maybe more comfortable to use Monolith because it's a way more decentralized than Wirex. But again, I’ll have to see with the fees and so on what's better.
CR: So far, what are the pros and cons of living a full crypto life and not having a bank?
PT: It takes a lot of time actually to monitor the rates, to go through everything, and to make all these transfer. It's also risky because I really moved all my assets from my bank account to crypto. So if there's a crash, a problem with the Dai peg, or if I loose all my device and seed phrase, whatever, you know, it’s risky. I have kept a bit of cash money just in case something happens, but now most of my wealth is actually in crypto.It is actually useful because I have a skin in the game, so it helps to design and think better crypto product. And as I said, until recently because now the rate has really dropped, I was able to gain more interest than what I have to spend to eat. But again, Bulgaria doesn't cost that much money compared to France or others places. The biggest challenge actually is to monitor everything everyday and to move your money across different platforms.
Also, it is anecdotic, but everytime I want to use my Wire card, I have to check if there is money in there. Sometimes I forgot that my wallet is empty, so in front of the casher, I have to take my Dai from Compound, pay network fees, transfer them to Wirex, pay network fee, exchange them for Euro, pay commission fee and a spread, and then do not forget to load the card. This is quite a heavy process. But it's not that hard. I didn't make a lot of money because I paid a lot of fees everywhere. But it's cool.
CR: What’s the coolest thing you’ve done with DeFi?
PT: The coolest thing I have done? Of course, all my friend know what I'm doing. So one day we're in a bar and I wanted to show them how cool it was to mint Dai and then to pay with it. So I put some Ether into a CDP, borrowed something like 20 Dai, sent them to Wirex, converted them to euro, loaded the card and asked the waiter to come so I could pay the bill with the card. My friends were like, whoa, you created money just like that, out of thin air.
CR: Amazing. So how long does the process take?
PT: Every time I want to do the whole process, I have to block something like one hour of my time to withdraw from here, to exchange here from here, because you know, I'm not using only Compound. I'm also using Nuo, dYdX and so on, so I have to pick a bit from everywhere, and seomtimes the network is congested
CR: So what would make your life easier? If somebody could develop a product that would have made your processes what do you think is missing to go full crypto?
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