Let’s Talk Crypto | CoinPicks Live

What is going on, family? Hope you guys are having a great day. Again, back 3 to 4 p.m. Eastern Standard Time. Put it on your calendar. We're going to be breaking down crypto. I'm deviating from the course that's on our website a little bit because I want to get into some really interesting topics that really make people money right now. If you're new here, every single day, Monday through Friday, we do a 3 to 4 p.m. livestream and then we try to blast it to all social medias. And the reason we're doing this, like I said yesterday, is because we are trying to get as many people into crypto. As possible at the exact bottom so that a lot of you can get rich over the next 2 years depending on how serious you take it, depending on how much money you put in the market, etc., etc. Okay, so we're going to be dissecting the entirety of crypto. If you have any questions, go ahead and put it in the chat box. Share this with as many people as possible. Put it into your friend groups. I say the same thing every time. The point is, let's share this with as many people as possible. I'm actually going to get straight into the lesson today, and before we get started, we actually have a a whole autonomous trader for free. So if you guys go to our website, it's called coinpicks.app. In coinpicks.app, you can click the button, it takes you through a little form, and we actually give you a fully free autonomous trader that buys, sells, and does the research. There's sometimes issues because AIs go rogue. Like, if you set up the same setup on 100 different computers, you're going to get 100 different kind of working flows depending on what, you know, AI you're using. And honestly, they're just rogue. Like, they don't— there's no deterministic path on AIs. That's like a concept that came from coding. Deterministic basically means that they just work the same way every time. They don't because they're all different AIs. And so if you have issues or problems, we have communities to solve that. We have 3 different levels and you'll see that on the forum. You can reach out to one of our people, give them a call. They'll have a conversation with you, talk to your bot and show you what solutions we have. But it is free. And if you can fix it yourself, have fun. So go to the website coinpicks.app. That's where we have the entire learning course. and we give you the free autonomous bot. Today we're going to be getting into another subject called how crypto generates yield. So the first question is, what is yield? So there's different types of yield, all different types of opportunities, but it's income or rewards generated by an asset or financial activity. So essentially, if you hold an asset, it doesn't matter what asset it is, In crypto, there's opportunities to generate yield, and the mechanics behind it will actually even show you how crypto works in general. There's all different types of yields. So for example, one of my favorite forms of yield is stablecoin yield because of how safe it is. So stablecoin yield is basically just holding cash, but right now, I can't say— I don't know if I can say the word safe. I don't know what safe means, but I'm pretty confident I would like Recommend it, not financial advice for myself, right? So safer, you can get 12% APY right now on Coinbase. All you have to do is put it into a specific liquidity pool, and if you want even safer than that, it would be a 6%. So 6 and 12% is crazy. That's really, really, really, really crazy. Somebody, can you pull out your calculator? Let's try to figure out how crazy that is. So what I this is like doesn't exist in the world, right? So if you go to a bank. You're probably getting less than 1%. Let's do $100,000 times 0.12 divided by 12. So that's $1,000 on— so if you have $100 grand, it's equivalent to like the safety of a bank. I can't say it exactly, but if I were— it's pretty much a bank account safety, right? So you put $100 grand into a bank account, like a savings account, you'd be getting $1,000 a month of passive income. It's the only— it's one of the only real passive incomes that exists in the world. It's through basically the fees of Coinbase loaning out your money, and then the 12%, it's just— it's the way that the liquidity pools work. There's different types of yield, but like, the beauty of this is that your money is always working for you no matter what, even if it's in a safe place. So if you're not ready to buy Ethereum, you think it's too expensive, what you could do is you could put that cash into— it's like more than a high-yield savings account. Can someone claw real quick? My dot is not up. of what a high-yield savings account is. But basically, I think they offer, what, like 8% a year? It's even more than that, right? So this doesn't exist. So especially with people with like $1 million, they're getting $10K a month passive income, right? And it's just sitting there and it's liquid, which other investments are not liquid. What's a high-yield savings account APY? I know, like, what are like the tips?

It's a big savings account that pays a higher interest rather than a traditional—

Give me like the average percentage yield of a high-yield savings account. Like, what is the average percentage yield? So, and it's not just with stablecoins, it's like my favorite, it could actually be with assets as well. So for example, it'll be equivalent to like stock dividends. So when you buy a stock, you get the stock, it goes up in value, you make money. But also when they have like these liquid— I don't— it depends on the stock, but like these events where they'll pay you dividends, you'll get actually a monthly cash flow. From the stock itself as well. This is similar to that. So go ahead, what is a typical high—

About 3.4 to 3.5.

So this would be equivalent to a high-yield savings account. So it's 3.4 to what?

3.5.

So 3.5% is in a high-yield savings account. In Coinbase, you can get up to 12%, fairly safe. That's absurd. That's 4 times more than traditional banking, okay? So if you just did, like, for example, one switch, which is you told your employer to deposit your checks in Coinbase. If you just tell your employer— everyone can do this. Currently at the company too, I think Jesse does it. I should do it too. I don't know why I haven't done it yet. But if you just tell your employer to deposit, like, they'll give you a route. How does it work, Jesse? They give you a banking account number or something? Direct deposit number. They give you a direct deposit number. You tell your employer, oh, deposit directly in your Coinbase. Coinbase gives you a card so you can swipe just like any other bank card. And all of that money sitting there will be getting 6% by default. If you click one button, you'll be getting 12%. Does that make sense? Yeah. And it's just free money for doing nothing, basically. And I'm not going to go into like the security part, but again, I'm telling you, it's like one small microscopic step below what a bank account would be. But I can argue that it could be above because you can't really If a stablecoin got killed right now, that means that the greatest buyback of debt in American history, or at least the trend of growth, would be killed, which I doubt will be killed. What I mean by that is right now, stablecoins are buying back debt from the government. They're not the number one in the world, but the growth that they've had, the trajectory they have, they're going to be the number one in the world. So the government does not want that to break. So they would provide essentially liquidity if the stablecoin broke. There's no way the stablecoin's breaking. It's not breaking. So I'm telling you, like, if a stablecoin— we've had situations where we've seen stablecoins break. If that stablecoin broke, it would be Armageddon to the American economy. It will not happen. I don't believe it will happen. So, and through that argument, I would say it's probably safer than a bank deposit. It's probably easier to have a run on banks than it is for a stablecoin to die. Maybe that's a hard statement, but we've had a lot of run-on banks. Like, if you look at the history, maybe you could look it up real quick. Sorry, you're my dot for today. If you can look it up real quick, ask throughout history how many run-on banks we've had. And then you could also ask, like, for example, how many times a stablecoin, or at least a significant liquidity stablecoin, has been wrecked. And I would bet you 10 times out of 10 that there's more run-on banks than stablecoins going bye-bye. If that makes sense. So yeah, long story short, the crypto investment has 2 ways to make money. Number one is the price growth. Now, in the case of stablecoins, there is no price growth. It stays stable to $1, right? But if you bought Ethereum, you can get yield on it as well. So Ethereum will increase in price, but also give you interest, fees, or rewards. So it's like the increase of the price going up, you get a percentage back, and then it's also like you get a monthly cash flow. So it's cash flow and investing in one. Does that make sense? Go ahead. What's the—

It's loading.

Yeah, it's loading. It's probably a lot. There's been a lot of run on banks, or a lot of banks collapses and things like that. All right, so APR versus APY. So there's APR and there's APY. Okay, so APR is annual percentage rate without compounding. APY is annual percentage yield including compounding. Here's another thing. This is really, really crazy. So I don't know how they pay it out in banking because they pay so little. I don't use it and I don't care. But I know they don't pay out daily, and in crypto they pay out daily. So you have a daily compound. What that means is if you put like $10K into one of these 12% pools, so you're getting 12% a year, they're paying that 12% daily, but the payout is daily. So what happens is, I don't know, I'm gonna make up numbers. This is not exact math, but let's say they're paying out daily. So like That, let's say you got a dollar. Now you have one extra dollar. That dollar is now getting 12% daily. So if you do it again, every day, you're getting like these small little things. And maybe like all the traditional, what did they say on the bank runs real quick?

Between 1863 and 1934, 3,984 bank runs.

There's been 3,984 bank runs. In crypto, USDC has only had one scare of going down. from the history. Are you catching it? Yeah. So I could argue that stablecoins are probably safer, and they're the new thing that they want to secure and guarantee, because it's going to be the way that America is paying off their debt and many other things. It's going to be the way that they all make— that's like their new cash flow system to the banking elite is stablecoins. They're not going to let it break. They're actually going to get as many people to adopt it to it not break. But back to the original subject, I actually want you to look up with the high-yield savings account, What is the— is it daily payout or is it monthly payout? Because with traditional payouts with APY, usually from my understanding, it's monthly. And if it's monthly, that means that that whole compounding thing, you do not get that. So you get it— go ahead. Oh, when you look it up, let me know. But you get a daily payout, which I don't believe exists. And the only reason it exists is because of the blockchain technology automates the process of the payout. So it's an automated payout and that compounds, and the compound effect is absurd. Go ahead.

It usually builds up daily and gets paid into your account monthly depending on your bank.

So it builds up daily, but it gets paid to your account monthly. So when it actually hits your account, that monthly payout now can get the 12%. In our case, the daily accrual, and it sounds small, but it adds, it goes crazy. The compound effect. One day we'll do a training on the compound effect and how the compound effect works, but that doesn't exist. And I've seen other crazy things. I don't know if it's on Coinbase, Because this is where we're going into a very specific world. But I've seen crazy things to where sometimes they'll pay out hourly. So it pays out like according to the actual yield that's generated in the pool. So the pool generates fees, the fees get rewarded in proportion to the people that provide the liquidity. I know I'm giving high-level talk, but I'll explain. So like those fees get sometimes paid out hourly, I've seen. And so we have a compound effect of hourly interest that's never— that doesn't exist in traditional finance. That's not a thing. Go ahead.

Is it always 12%?

No. So yeah, that's a good question. So let's get into it. So one of the main types of yields on stablecoins, we're gonna get back to this, but one of the main types of yields on stablecoins, remember we talked about automated market makers? So there's something called liquidity pools. This is a liquidity pool, right? Remember we talked about this? There's a whole bunch of pools. And one of the pools you can get involved with is like, for example, a swap from USDT which is Tether to USDC. Yeah, that's a swap. Like one stablecoin to another stablecoin is a swap. So both sides of the pool are stable, they don't go up and down. And if they do, it's very small amounts, but it's like less than a penny small amounts, like very small amounts. So if there's like, how it basically works is there's shares, like shares of a company kind of, that people get allocated. I can take my $100,000 shoot it into the pool to provide the liquidity so the pool has more liquidity to swap. And let's say 100,000 people start swapping from USDC, which is very common, by the way, which is much— like, there's so much transaction volume with stablecoin swaps. It's one of the biggest right now. Like, I think stablecoins are like the biggest adoption of crypto ever besides Bitcoin. Like, it's the most use case in the world, like, basically right now. I could be wrong about that exact statement, but I'm pretty confident. It's like true. So that means like, for example, like it sounds insignificant, but like there's people in other countries that have hyperinflation, they're holding USDT, and then they want to buy something with USDC, they're just swapping it. To them, it's like life. It's like life because the currency in their country, it doesn't hold value. So they have to hold stablecoins. So it's like this whole economy of stablecoin, you know, trading back and forth and being sent and things like this. And so that generates fees. Right? Because when you guys swap from something on the exchange, the exchange gets a little cut. That small fee, you can actually get a portion of that if you provide liquidity. If you take your $100 grand, you put it into liquidity pool, you get paid in proportion to the entire pool. So if the entire pool was $100 of liquidity and you put in $10, you will get 1/10 of all of the fees of the pool. Does that make sense? Does that make sense? Why? Because you have 1/10 of the entire liquidity share of the pool. So if it generates $50 of fees, let's say every hour making it up, right? So you'll get 1/10 of that, you'll get $5 paid out to your wallet every hour. Does that make sense? Mm-hmm. That's obviously exaggerated numbers, but you get the point, right? And so if the Claypool is $10, $20 million, So obviously what you want to do is you want to find kind of a balance of— you want a smaller pool because you have a smaller pool, your money would mean more. But if it's too small, it won't generate fees because nobody would trust the transaction. You need more liquidity to get bigger transactions. Like people with $10 million, they're not going to trust a liquidity pool with like, you know, $25,000 because they can't even swap. It's too small. Does that make sense? So you want to find the balance. And that's where you get like the 12% APY, because you're finding the smaller pools that are still getting significant volume. But obviously, if they're smaller, they're less safe. The bigger the liquidity, the more safety. There's many other background things to that. I'm not going to go into it, it's way too complicated. But in general, the bigger the liquidity, the bigger the safety. And if it's more safe, then it's less yield. Does that make sense? Okay, this is a lot of information. Let's slow it down a little bit. Do you guys have any questions? All right, it's the same thing not only with stablecoin swaps, even from the last lesson when we were talking about ETH/USDC, that's the same thing. You can actually get fees from those pools. This hasn't existed before. So before in traditional finance, basically this is equivalent to going to an exchange like Robinhood and being like, hey Robinhood, I'm gonna give you $100,000, you go use that to provide liquidity to your traders, Go use that, provide liquidity to your traders, and just give me a cut of it. You had to be an accredited investor, which is meaning you had to have a net worth of $1 million or had $300,000 in annual income. Not only do you have to be an accredited investor, but you have to be a sophisticated investor most likely. I ain't just gonna take your money, I promise. It was very difficult to be that guy. It's extremely difficult to be that guy that could provide liquidity to the back end of exchanges. They usually never— they don't go to regular people. They would have one guy that's a billionaire that would provide the liquidity, and that's it. Nobody has access at all. That's it. With cryptocurrency, you could have $10 and be 12 years old and provide liquidity to that pool and get the same yield and the same fees. That's the decentralization power. That's the power of cryptocurrency. It is a world crowdfunding vehicle that everybody has access to the financial tooling that previously only the elite had access Does that make sense? Mm-hmm. And there's many other tools, but this is one of the biggest ones for sure. So I can provide liquidity to the ETH/USDC pool and get a yield. Now, this is a hard concept, but what's the problem with that? It's not really a problem, but like there's extra risk. What's the risk with this? Who could tell me? Someone that doesn't already know that might be able to pull it together. What is the difference between providing liquidity to this pool and this pool? Is it based off Ethereum? That's— we're getting somewhere. Go ahead.

Oh, isn't it the fees will be higher to transmit?

It could be, but that's not the main— that's not the main thing. It could be though. It could. What's the main reason? No, no, you could just click the same button. Go ahead.

The liquidity pools fluctuate, like, like the cost of Ethereum goes up and down.

Bingo, he got it. So this is a stable pool, meaning that you always know for a fact that your money is going to stay a dollar and you get a yield. But in this case, the price of Ethereum can drop and your original principal, the first money you put in, will drop with it. You'll still get the yield, but it will drop with it. Does that make sense? So that's like the main difference. That's why I said I like this. as my favorite form of yield because I don't have to think about it. I don't got to think about it at all. I just put the money in. It's like a bank account. And it just like, it's just like a savings bank account. And now there's obviously, again, there's risk, right? So the pool can get hacked. Has that happened before? Yes, it has happened before many times. But again, usually the hacks go to like these brand new weird projects with extremely low liquidity. And like, it sucks. But if you like go to the main platforms with the highest liquidity, That's actually like the best now. Okay, not always the case. That's why I'm here. That's why you learning is good. But that's actually how FTX exchange went down. So there was Terra Luna. This is where like you got to remember these. There's like specific financial principles that you never forget, and one of them is the word fixed. Okay, the word fixed. I want if you're going to write something down, write down fixed. Okay, when someone offers you a fixed Fixed return, you need to be skeptical as heck. Like I'm talking about skeptical to like the. I don't know how else to exaggerate this, but do not believe them. Does that make sense? What does fixed mean? Yes, meaning they're offering guaranteed. Now it's fixed over a certain amount. So like once we start getting above the ten percent territory. Right? Once we— people start offering, oh, they got 10, 12%. Yes, but when you read the terms and conditions of it, it can fluctuate to 8. They can put like— but when they say fixed above 10 and they're saying guarantee, you need to be like, you are running probably a Ponzi scheme. And so USD Terra— what is it? USD— what was it before the Terra Luna ticker? I don't know what it was. Terra Luna, they offered— they had their own USD. And they were like of the most legitimate organizations. They were offering 20% fixed. Fixed. That means that it was guaranteed every month you're getting 20%. That it was low-key a Ponzi scheme, right? You cannot offer— there's nothing in like human world of— this is like maybe a natural law. I can't really produce— I don't know. But like on a consistent basis, there's like nothing in the world that produces 20% fixed guaranteed no matter what. That doesn't exist. There's nothing. It doesn't exist. Even like, even my trading, we're in the fund, we're kind of like close to like 40 to 50% year over year. And I'm like, that's not guaranteed. Does that make sense? It could be in a— I could, I could lose 100% or 60% next year. Like, that's not guaranteed. Well, when you say the word fixed, that's where you got to be careful. So there's one way you can actually identify if somebody's like a liar. It's based off their perception of how much they think they can return in a year. Does that make sense? Because they're just— they're not— it's not, uh, in tune with reality. It's like, no, like, there's outliers. There is outliers, like, of situations. But when you get the word fixed involved, it's like, no, now you're just lying. You're running a Ponzi scheme. Does that make sense? Mm-hmm. Okay, so Terra Luna was offering 20% fixed yield, and then somebody pulled a whole bunch of money from the liquidity pool, billions of dollars, and everybody got wrecked. And then just the Ponzi scheme started falling. And then it really wasn't 20% fixed. Really, there was some like background hoopla going on. They got exposed because they didn't have the cash, and then they couldn't feed the liquidity back. Does that make sense? Okay, where we're at? So I think that answered your question. That answers your question. What was your main question? It was the fees in the pool and how it worked. Okay, all right, any other questions or where we're at? So realistically, like, there's no number I could put on it, but I would say anywhere from like 1% to 15% non-fixed, you should probably be good. When you're getting over 12%, you should be skeptical. Does that make sense?

Probably more, that's riskier.

Yeah, so what I would do, what I recommend, like, if you're doing this strategy, which I, I, it's one of the main It's one of the only yield strategies I recommend because of the passivity of it. Like, uh, when you get into like other crazy, like you're trying to do ETH and USDC, when you get into that world, the reason I don't recommend it is because it doesn't make as much money as our strategy. Not because it's not good, but our strategy is actually better because it's significantly more lucrative, like significantly more lucrative. So at that point, what I recommend is that you just focus your energy on our strategy and you'll make more money than the yields. You don't need to worry about the yield, it gets too much. But this one's passive. You don't need to really learn too much. It's actually passive. Does that make sense? Yeah. So you can run that with my strategy, and it's actually the best answer. Does that make sense? All right, so without— just to kind of— let's, let's give some real money-making things here. So this is kind of my official recommendation with stablecoin yield. This is what I recommend. Perfect safe scenario. First off, you diversify the platform. So you do a couple on DEXs, Or in this case, it would be like, it wouldn't be called a DEX, it would be called a loaning platform, or like, what is it, Aave? Just call it Aave. Aave. Now this is where it's like high level. Aave will give you a lot of yield, it's decentralized, but this is what I would do. So it's Aave, Coinbase. So in this case, I diversified the platform. So if Aave goes down, I still got my money in Coinbase. It's diversifying it, right? Now what I would do is I would probably put like, I'd probably split up my pile of $100K into like 3 piles, 1, 2, 3. And then I would put like, let's say hypothetically this one offered 5%, this one offered 12%, and this one offered 8%. I would split it according to the yield that I'm getting back. So I'd probably put most of the money here. And least of the money here. Does that make sense? You understand why? Because it's offering more yield, there's more risk somehow. That is the beauty of the market. You don't have to sit there and assess all the risk. You can know by the yield. Because if it's high yield, there's a reason why people are not putting money in it. Does that make sense? Mm-hmm. All of it goes down to that. Like, that's not like the way world works, right? You get more money, there's more risk. All right? So that's what I would do. And then the combination of it will produce an average yield, blah, blah, blah, which I don't know. But that, and it would be really safe because like if an exchange goes down, you have your money somewhere else. Does that make sense? Which I doubt, like the exchanges do not go down. I'm just giving you like super safe stuff. Does that make sense?

Yep.

All right, that's kind of the official recommendation on that. Now that's one type of yield, which is liquidity pool yield. All right, let's talk about staking. So staking is a different type of yield. So staking is a different— this is liquidity pool yield. So this is like if you want to be an LP, which is a liquidity provider, and you'll see how important liquidity providers are. But in this case, I'm talking about something different, which is called a staking yield, getting paid to secure a blockchain. Okay, remember we talked about the blockchains and how you can get paid a little bit of Bitcoin? by pointing your computer at it, you could do the same thing by pointing your money at it. So in proof of stake, the consensus mechanism— what is a consensus mechanism? One of the most important. Who can define a consensus mechanism? Most important concept in crypto. Come on, Gabby, go ahead.

It's like an agreement that they make on the white paper?

Yes, it's a type of agreement vehicle that they make that allows consensus to happen on the blockchain. So proof of stake is one of the most important consensus mechanisms in existence, right? And so how proof of stake works is you could become a validator and you could point your— so let's say you have a cash— this is not how— this is such an overly simplified example, but I like to keep it simple so you guys understand. So let's say you have $10K, you can point your $10K at the blockchain. and verify transactions automatically on your computer. And you could also do it on Coinbase. Coinbase makes it easy for you. There's easy ways. There's really sophisticated ways where you're going to the core of the blockchain and becoming like an actual validator. But then there's also quick, easy ways. You could just go on Coinbase and click a button. And then Coinbase will take a little fee for handling it for you, basically. But you can point your $10K, and this provides yields for security. So the first one was LP off of fees, remember? You know, see, you could stack these, by the way. You can stack them. So one of them is LPs off of fees. This one is rewards of the mechanism itself rewarding to secure it, and you get paid in ETH in this case because you're securing ETH. Does that make sense? Yeah. So the Ethereum blockchain itself will pay you to secure it. Does that make sense? Now that definitely does not exist. in the traditional world for a fact, right? So basically it goes like this, your ETH validates or secures the network, and the network rewards you for participating in the validation. Does that make sense? Mm-hmm. And what you could do if you get like to the bare bones, and this is what we talked about before, if you go bare bones mode and you try to do it on your own computer, there is ways to do it, you can like download the software, set it up yourself, do the entire thing, put it in a wallet, meet all the specifications that they say to be your own validator. And then you can input a virus code to basically try to switch the blockchain transaction. It's not a virus, you're just trying to switch it. And then if it finds out that you're malicious, they slash your $10K to like $5K. It's called slashing. They're like, you're malicious, you're trying to take us out. We're slashing your stake. Does that make sense? All right, that's another one right there. That's another form of yield. And you can— again, I'm gonna show you how you can stack it, and I'll show you some yield arbitrage strategies. What— probably I probably shouldn't show you. Yeah, go ahead.

So with the LP farming, that's pretty much everything you explained with the liquidity pool. Yeah, you do that with multiple— you can just start throwing your money into multiple Yeah, yeah.

So you could do this.

Increase the percentage of your return.

So you could do this. It gets really weird. I'm just going to give you a hypothetical example. Okay, it gets really weird, but it's kind of cool. So like, for example, there's this thing called Lido, right? So Lido is basically a group that got together. They ask for your ETH. They do the validation for you, but they give you something called stake. What is it? stETH? Jesse, you know? It's like stETH, right? Yes. They give you stETH. So you give it— so for example, I don't know how— like, I don't remember the exact sophistication, but there's a way you can input your ETH. They give you stETH. So, but for allowing to do that, they give you, let's say, 3% yield. So let's say you put in $100K, $100K of your ETH. So you take $100K ETH, you put it into Lido, they give you stETH. But not only do they give you this stETH to represent your position in it, But they're giving you 3% yield on it, right? Then you take your stETH and you swap it right back for ETH. Because you can swap, there's liquidity pools that are literally stETH, ETH, or S3, ETH, right? There's liquidity pools out there. That's a great E, by the way. It is. There's liquidity, you could just swap it. So I could be like, oh, I got my stETH and I'm getting my 3% yield, great. Let's swap it right back to ETH. Now I got ETH again. Then I can take the ETH, yes, and I'm still getting the 3% yield.

But that's just in that specific— I mean, it's going to my organization.

Yeah, this organization is going to the stETH, so the 3% is stacking in there, but I still have now the $100K ETH right here. It's not exactly like this, there's obviously a little nuanced details, right? Right. And so it's continuously getting this 3%. And then you take this, and then you can put it in a liquidity pool. The liquidity pool is what? ETH/USD. D. Wow. So this pool is giving me another 3% yield. Again, these are not exacts. These are not exacts.

So you take the $100K ETH, you throw it into the ETH/USD pool, get another 3%.

You're getting 6% on your stack. This gives you— every time you put it in a pool, they give you a token representation. of your stake, so that token is valuable. That token, so let's say they give you, I don't know, like in this pool, it's usually like a weird token name, but in this pool, let's call it like pool token. They give you a pool token that represents your $100K in here. And then there's another exchange, because they have these weird little exchanges that do this, that offers liquidity to the pool token, and you can swap the pool token for ETH. it right back. There's weird little— they call it yield farming. So you can keep doing that according to the pools that exist. And you can keep— I used to do this. You can just keep going into different pools. But the problem is every single time you go into a new pool, you're stacking risk. Because if one of these pools hit, your whole stack is gone.

Mm.

So you're increasing your risk absurdly. Like, each time it's like compounding the risk. Does that make sense?

But also compounding the interest.

Correct, correct.

So do we— do you teach this in, um, we don't obviously— do we teach this?

No, I do not, because it's not more lucrative than liquidity displacement. So I purposely do not teach it because what happens is they turn into yield farmers. And I'm telling you right now, yield farmers do not make more than our strategy. I know that for a fact.

Why?

Because we just— what we do is so good. Liquidity displacement is—

Give me like a short answer.

Because like, think about it, what's the end game of this? The end game of this is you're taking your money, you're putting it across like hundreds and hundreds of different pools, and you're trying to monitor it. And what you're doing is essentially— this is— you'll start to come to find out that the gist of this is you want a pool that gets a lot of demand. Why do you want a pool that gets a lot of demand?

Because it's less risky.

Nope. Why do you want a pool with a lot of demand? Who knows? Why do you want a pool with a lot of demand?

Because you get the higher, what's it called, percentage.

Correct. You get more yield. So what is that?

It's more riskier as well.

No, no, but what is that? If you look at the foundation— oh, so you're telling me I have to find a pool that gets a lot of buyers? Isn't that what we do?

Yep.

That's what I do. I do the same thing. The end result of their yield hoopla, I do the same exact thing. But in my case, I just take cash collected, less risk, less surface area of risk. I don't need to go into 17 different things. You'll come to find out that the best liquidity providers are basically trying to do exactly what we do. It's the same thing. In one case, the LP is providing LP. They're buying into the token and the USD. So their risk— so they actually make money on yield, but they actually make more money if this token goes up. So instead of me doing all that, I just buy the token.

You just find the smaller coin.

I find the smaller coin that has less liquidity that gets all the demand. I don't need the yield, and boom. So it adds like increased sophistication for no reason. I'd rather keep it tight and just do the thing that works the best. Because that's what they all want. Like, if you go to any LP, they're like, oh yeah, basically, and they say exactly what they want. They start fundamental analyzing the project to make sure it's a good project, and they look into all the variables and how much fees it's going to generate. That's exactly what we do, but I do it in a different perspective. I get in and I get out. They have— they— for them to get in and out, it's like a crazy thing. It's just increased risk for no reason. That's why I stick to stablecoins. Because I don't want the increased risk, because if you're doing that, then you're basically just getting into my strategy. Does that make sense?

With more risk.

With significantly more risk and less reward. Because remember, they have to help half of it in USD. I don't. I'm just buying a token. Does that make sense? So if they put in $100K, $50K is in USD. So if it goes up 100%, you really only went up 50%. I went up 100%. Does that make sense? Shiny object syndrome. But it's, you know, you know what liquidity providers are good for? People with an extreme amount of cash, like $500 million. Like people that, like, like they just, they don't need all the percentages. They just want to do nothing and money work, basically. That's what it's good for. Go ahead.

During a bull market, that would be beneficial, but during a bearish market, you can get wrecked very easily.

Just like liquidity. Okay, so in Everything works in the bull market, everything doesn't work in the bear market. Everything. Every strategy goes out the window. I mean, our strategy is a little different. We have like workarounds, but yeah, basically. If that makes sense. And I'm being honest, like we do actually have workarounds. All right, any other questions? Where was I going with this?

Liquidity, what is the P-creation? What is the P-sample?

Liquidity provider. All right. So we went into stablecoin, or we went into liquidity pool yields.

Yeah,

I got it right here. And we went into—

this is mechanism of fees.

We went to the staking, so you get staking yields. The other one is lending yield. We kind of talked about it already. So like AAVE, so you can right now go to AAVE and remember the ETH loan I tell you guys about. So for example, you could put $100K into AAVE And you can take out, and let's say it's ETH, you can take out $30K in cash and still have the $100K work for you, right? But to get your $100K back, you gotta pay back Aave the $30K. The question is, where did that $30K come from? The $30K came from liquidity providers. So you know how you gotta pay like interest on your loan? That interest, let's say it's 5% interest, you got to pay that on the $30K back to Aave. The person that was an LP that let you do this, they get the interest. So it's a loan. Does that make sense? That's the other type of yield. So we have— that's kind of a liquidity pool, but this is a loan version of liquidity pool, not fees. So you have fees that get paid, this is loan interest that gets paid as yield. And then the other one was staking yield. So

for example, you take $100K in Ethereum, right? And let's say it goes up $60,000, you'll still get that $30,000 profit plus pay back the $30K loan, right?

Correct. So if this $100K goes up to $200K, you could just probably— I don't know exactly, depending on the platform— you could just press a button and your $30K of debt will get wiped, and then you can pull out $170K. Does that make sense? But the opposite can happen as well. If the $100K, if ETH drops, and it drops all the way to $30K, you'll get liquidated. You'll get hit to where, because your debt is $30K and your current stack is worth $30K, and they do a little buffer, this is where you lose. You don't really lose on that because you're holding Ethereum anyways, but they'll do like 10% above, and they'll take this as a liquidation fee. So they eat off of your liquidation. Does that make sense? It's crazy. So you could just keep— you could fix that by just keep— and if it drops, you just keep putting cash in. Just keep putting cash in, and then it fix— it makes your debt lower, and it makes the health of your pool— it's easy. It's not hard. It's not crazy. I promise.

You basically just, um, they take the $30K, and then you took a loss on whatever. Correct.

You take that 10% loss And they take your, your ETH.

Hmm? You have the whole $100K.

Well, the $100K is not worth $100K anymore. So if it dropped, the $100K is now worth $30K. They take the $30K plus 10% on whatever on top. I think it's on Aave, I think it's like an 8 to 12, 8 to 10% fee or something like that. I think on Coinbase they liquidate you at 70, 77, 77% down, I believe, and they take a small fee as well. All right, any questions? So that's the third type of yield, which is this debt system that we have on crypto that's way better than the American debt system because nobody is providing liquidity. Well, actually, I guess you could say the Federal Reserve is providing liquidity via IOUs. So there's no one, like, there's no one backing American debt. This is actually backed by real cash in a blockchain that you can verify. You can literally see, okay, great, that guy has $30K worth of debt, but there's an LP that's providing the liquidity. You can see that. It's right there, and it's all verified and even. In the American economy, it's just a big number on a screen that it keeps pumping up, and nobody knows how they're gonna pay it back. Go

ahead. So really, if it goes up $30K, for example, right, does it automatically take back the loan? Like, let's say it goes up $30K, but then it drops the next week again.

No, you actually have to click the sell or buy.

Oh, okay.

If it goes up, like, you have to do something, like, until you do a decision. That's what locks in the profit. I think you can set limit orders maybe on some loans. I don't know, I've never done that. A limit order would be like it triggers when it goes up to a certain point. All right, that's lending. Liquidity pools we already talked about. All right, now there's kind of another weird thing, which is sometimes the coin project itself will give an extra incentive. So because, like, let's say I launch Alex Coin. Okay, let me just use a different name. Okay, let's use different. Let's say I launch, uh, I don't know, Shoe Coin, right? What do I want? My coin's valueless. What do I want? Yes, how did you know that? That's really good. Yes, I wanted an LP to put money in there. so that my coin has value. So what I could do is I can offer an incentive of like, let's say hypothetically, my pool is not pulling that much demand, it's pulling like a little bit of demand, and my yield is only 1%. So I could be like, all right, LP, if you provide liquidity, we'll give a percentage of the supply, we'll give like, I don't know, an extra 10% boost. And so now it's 11% yield because they need the liquidity, they want people to inject money into the LP. That's Does that make sense? That's where the yield farming stuff comes into play. It gets really crazy. 'Cause you're just stacking and stacking and stacking. You know what I mean? Mm-hmm. All right. There's other things. There's so many different things, right? So there's an automated vault or real-world yield, okay? Here's kind of another thing. Smart contracts that manage one or more yield strategies may lend, provide. It gets really weird. It gets really weird. But imagine every strategy I just explained to you, right? All of them is in an automated vault, right? So the vault is doing all of the strategies simultaneously, generating yield for the entire pool, and then you could provide liquidity to that. So imagine like one big vault, right? And it's doing LP, it's doing staking, it's doing lending. What was the other one? It's doing like the supply yield. It's doing all of them, right? But it needs money to do it. So let's say it provides an incentive. Okay guys, if you provide to this, let's say inside of here they're making 10% yield. will give you 5% for providing liquidity to that itself. That's like a vault. It's like a— it's a hedge fund thing that's doing it for you, and then you could just provide liquidity to them and you kind of trust in their strategies. Does that make sense? Yeah, it's a whole world. It's like— yeah. All right. It's 3:47. Now the reason why this is really cool is because, again, this This is like the only mechanism in crypto besides building a business or working for a job that gives you addition. You have multiplication, you have addition. If you look at the richest people in the world, they're always talking about CDs, they're always talking about government, they're buying government debt. Because when you start getting a certain amount of money, your time becomes more valuable than the percentage return of the money itself. So they want to make money that's extremely safe that they can put in for 40, 50 years. But that will give them a consistent return, and they don't have to do anything at all. Does that make sense? But that's what people with a lot of money—their time is actually that valuable—and so crypto is giving that option. And as you can imagine, all of these little things—what does that do for us? If there's yield to be played on that, what does that do for us? Who can pull it together? Come on.

Say the question again.

It's, it's, it's a game of incentives, right? It's a game of incentives. So money goes to where money is— can make more money. People are trying to invest nonstop. So what does this do to people? And what I mean by us, we're— you guys are part of a crypto company, and you're probably going to invest in crypto if you haven't already. So if you're a crypto person, what does this do?

It increases the retail traders actually go there and buy the coins, and we follow It makes profit.

Correct. It siphons liquidity away from traditional finance into us. It's literally an incentive to, hey, if you come over here and take the risk, I can offer you better percentages than which you would get in traditional finance. It is literally like a leech trying to pull as much liquidity away from traditional finance as possible. Does that make sense? And so let's kind of pull it together. Why does that leech work? Why can't anyone do that? Why can't I Why can't I just start a company that just offers crazy yield and then people come to me? Come on, explain it. Because you don't have liquidity in your company. No? Let's go through it. It's going to blow your mind, all right? You have 2 worlds, crypto, and then you have traditional finance. Why is crypto going to win?

Because of the percentage of returns.

But who cares? Because there's so many high percentages everywhere in the world. You can go into a Ponzi scheme that offers you many percentages. Where does the percentages come from? Why is it so effective to pull the people from over here to over here? Location? No. I'm gonna take a drink of water while you guys do that.

Cost of transaction? Asset appreciation?

Not asset appreciation. That's kind of part of it. Let's go big, broad. Think. Think, go big, broad, big brain. Technology. That's part of it. More faster. That's part of technology.

It's faster compared to traditional finance.

That's kind of part of it, but it's not superior technology that wins the game, because if that's the case, then we should be operating off of Tesla's model of power. Which is like what, AC? I think we operate off of DC. It's an inferior technology that we use currently right now. Um, so why do we use inferior tech? If it's technology, then that means all the best tech should be the thing that's adopted. That's not true. It's not even close to true.

Traditional finances is only for like the elites? No,

kinda, not really.

Defragmentation?

Nope, come on. As I've been teaching you Alex economics for like two weeks now, you should know where it all boils down to. Not make more money.

The

mark of the beast. The mark of the beast. Kind of, but not really. Kind of. Come on. What generates the yield? What generates the yield? Starts with a D. What generates the Demand generates the yield. How do you get demand? Come on, huh? Nope.

Scarcity.

Nope. How do you get demand? How do you get demand, Jesse? How do you get people to buy your stuff? Yes. Why would it? Why? You can't offer a high yield if you don't have people generating the yield. So you have to convince the people. To come to the thing.

So you have to make a perception to make a

demand. The perception is like basically marketing and perception to make the demand. The demand generates the buys, the liquidity provision, pretty much everything.

Perception equals demand.

You need people. You need people. The rich keep getting richer and the poor keep getting poorer. How does that happen? If you have $1 billion, how do you double $1 billion? Correct. You need more people. You need more people to get— they— if you have a million people losing, what is it, $100 or $1,000, you got your billion. So the biggest elite people, they're trying to siphon the wealth from the general public in general, always. Crypto is a product. They're going to sell crypto. Why? Because it offers a better percentage. People use it. Well, it's the greatest crowdfunding source In the world that has ever existed. A decentralized where anyone can provide LP. Sounds like a great thing, doesn't it? Mm-hmm. It is. Just because it's a great thing doesn't mean it's inherently like evil. Like, it's a great thing, and it also happens to be the way that the elite make money. Does that make sense? It's a great product. Who made it? Right? Who made it? The elite, huh? The elites did. You think that these the guys in a basement created these crypto sophisticated products? Heck, it started like that, and then they took over. That's how everything happens. Innovation gets birthed, and then the guy with a lot of money and the resources and that understand the world the real way, they take over, take over the perception, and just dominate it. That's what's happening right now. That's why I keep telling y'all that they're gonna pump the crypto market if you're watching this on the internet because the They have a product to sell. The guys have a product to sell. If they didn't sell this, they would just be sitting on their hands with a whole bunch of money and nothing to do with it. They've bought and built infrastructure for crypto. It's like highways. Like, you know, you know how you know a town's about to be built? They start building roads to it. Does that make sense? They start building towns. Go ahead.

Also, there's only like $3 trillion in all of crypto. And there's not that much liquidity in crypto, so they have to get more liquidity to come in to even capitalize on

the money. Correct.

Yeah, it's a bar. You know how I know they're about to make a town?

Yeah, yes, correct. They're building roads. Look at the tokenized stocks. We'll talk about it. I'm making a video on this. They're building the roads, they're building the infrastructure, they're trying to build the plumbing to, to the crypto. And so at a certain point, they're gonna be like, okay, we're ready, our hands are already in it. We got it on lockdown, like we're about to make money. And then they just start running the campaigns. They just start running it. They start just dropping, like trying to sell their product. They start selling their product and then boom, all the people that don't know, that got in late, they come and they feed the elite again.

Because they'll be just buying high.

They're buying high.

So like the aspects of like them using celebrities to promote. Yeah, crypto, that's going to come back 100%, even

10 times. They're going to do it in crazy ways. Does that make sense? So do you guys see when you're slow to move how it can affect your existence? No, you move slow in certain things, but in certain things when you know you got to move, it's not haste to move fast sometimes. Does that make sense? All right, any thoughts, questions, or concerns?

That's crazy.

So what I think probably happened, if I had to sum it up— how much time do we have left? So to sum it up, basically these guys understand crypto better than we can on a 10 times level because they understand money itself, right? And they also build the technologies. Because they understand it better than everybody else, they have adopted crypto before everybody else and started building infrastructure and controlling the entire thing. Right? And so at a certain point, they're going to try to convince the world to switch from traditional finance to here. Now, mark my words, what emotion are they going to use to get people to switch?

Fear.

Correct. That is the mark of all finance. They're not going to use joy, happiness, not going to be— so we might have a great bull run. I don't think the whole world's going to shift in peak euphoria. It's not going to happen. What's going to happen is there's going to probably, I would guess, be a mayhem chaos event. I'm talking about some type of super collapse, maybe the banking collapse. I don't know how they'll do it, but this will be the savior of that collapse. And they will be like, hey, your money's dying because— and they'll blame some other country or something. They're gonna be like, hey, this freaking war thing, blah blah blah, big explosion over here. Yeah, it's happening over here. Oh, we're going to save you, don't worry about it, just come over here, we're good, we got it over here.

So it's like a Matrix moment.

Yeah. I bet you it's going to be some catastrophe event. I bet you it's going to be similar to what happened with COVID I mean, I don't want to go into conspiracies, but I bet you COVID got started because they wanted a reason to print. I don't want to get into conspiracies. I can kind of prove that too. He's like, no, not anymore. We're done.

He's

like,

stop.

No, this is the truth. This is the truth. This is the truth. They want to print. The world revolves around money. All right? They needed a fear event. I'm telling you, bro. This is too much sauce. There's other stuff.

It's way too much sauce.

It's way too much sauce. He's like protective. No, but for real. They use big.

Look at those.

Nah, but see why would it? Why would it? Okay.

Get him out of here.

Yo, you gotta get this guy out of here. Why wouldn't they kill me?

Because they're already in it.

No.

Because you're supporting it.

Correct. I literally tell them openly, hey, I know your schemes and I'm with you. Like, let's do it. Joseph, I got you.

Pharaoh, come.

But I'm going to make a whole bunch of money in the process as well.

Bro, this is—

That makes sense? And I don't believe in the mark of the beast. I do not believe in the mark of the beast at all. At that point, I will leave you. Does that make sense?

All right.

Any thoughts, questions, or concerns? We're getting into another world. This is fun though. I like this way better than teaching. What are the comments saying, Victor? Give me some comments real quick. You got a minute.

Too much sauce.

David's like, what are these people talking about now? Free money fees, the topic of discussion. Too much sauce. Those major events will give you a choice.

They're just playing along. They're just gonna act like nothing's happening.

All right, guys, thank you guys for watching the live stream. It was a little bit too much, but it was fun. I had a great time. Thank you guys. I'll see you tomorrow at 3 to 4 PM Eastern Standard Time. Tune in. If you don't get with it, you will get left behind over here. All right, guys, see you later.