DeFi Deep Dive: Understanding How Tokens Actually Work

Foreign.

Daniel Moran, welcome back to the podcast where today we're going to dive a little bit deeper down the crypto defi rabbit hole. The reason why we are doing this today is because it's my opinion that a lot of business is going to be run in this manner. They're going to be run on chain, they're going to be run as community projects with their own COIN in the future and probably not very far off. When I first realized that, it really freaked me out. It really scared me and I decided that I had two options. I could either be my parents who said that social media thing is just a fad and ignore it, or I could swallow the humble pill and realize that I knew nothing about this world and I needed to understand it. The reason I've been talking about this so frequently on the podcast and again today is because I want to bring you up to speed for those of you who are feeling a little bit left behind by this world. So today I interview Adam Bertram. Adam is a 20 year veteran of it. He's a crypto geek and also a content creator. But he's also one of the developers on this tiny little project called Koch Coin, slash KOJ Farm. You'll understand the difference as we go through, but this is not an interview or a podcast specifically about KOJ or DOGE or any other obscure token that you should buy. In fact, I want to be explicit that this is not an endorsement of this project or any crypto project at all. My only intent in this podcast is to understand how someone who is behind the scenes of one of these very obscure businesses is thinking about creating this business. And the best way that I knew how to do this was to just interview somebody who was working on a project that I found interesting. I became interested in this tiny little crypto project called kogecoin a few months ago when a friend of mine turned me onto it. And I initially wrote it off because it sounded like Dogecoin and I think Dogecoin is a scam. So I thought the same about this thing. But as I dove under the hood a little bit, I started to see that this project had a lot of really interesting utility to it. And the basics of it are it creates passive income that then gets reinvested into other interesting assets. And this platform, that is Koge Coin, makes it really easy for you to turn crypto projects into recurring income streams and then reinvest that into other interesting cryptos. That is a very, very oversimplification of this. But that's what got me interested in this project, and as I watched it develop, I realized that it was being run by a business in a very early way. It's in an early space, and a few projects are going to win in.

This space, and I thought it would.

Be interesting to understand one of them so that it could give me more context into how this world is evolving. Because if I like it or not, this is where the world is heading. And part of our job as entrepreneurs is to stay aware of what's changing and keep seeking out new opportunities. Look, I started podcasting almost a decade ago. That's crazy to me. But my intention when I started podcasting was to document my journey towards financial freedom, not as the guy with all the answers or to be a guru. I was just a kid from Ohio at the time, and now I've got the financial freedom, but I'm seeing this whole world change, and I want to stay ahead of everything that's happening, and I want you to be ahead of it as well. This defi world, this crypto world, is a very deep rabbit hole, and it takes some time to wrap your head around it. I'm still wrapping my head around it. I asked some friends of mine this week, how do you all stay ahead of this world? I feel like time I turn around, it's completely different than it was a week ago. It can be really overwhelming. But it's important for us to at least see where things are going so that we can make adjustments as entrepreneurs. Now, this conversation gets very technical, so I'm doing a little bit of a different format in today's episode. Throughout this conversation, I'm going to pause and interject and add some context and give some explanation for some of the terms that we gloss over so that you can understand what the heck we're talking about. So, again, this is not an endorsement for this specific project, although I do currently have quite a bit of money invested in this platform. But I am very fascinated by the overall thesis of this project and the mindset behind the developers and the members of this community. And it can serve as a guide for what might be coming down the pike as this entire landscape evolves. All right, let's dive down this rabbit hole. Get ready. Let's go.

Hi, Adam. Welcome to capitalism.com, it's great to have you on today.

Hello. Thanks for having me.

So I just want to kick this off right away by saying, nothing that you hear today is financial advice. I'm an idiot on the Internet that you found somewhere and you shouldn't do anything that I tell you to do. In fact, I'm the student today. I am learning about this stuff, so just don't do anything with that. You learn on this podcast today. This is for entertainment purposes only. Adam, I'm so excited to chat with you because this is a world I want to understand. And you've got, like, you're working on a project right now, KOJ Coin, which I immediately wrote off because it sounds like Dogecoin, and I hate dogecoin. So first, why don't I ask you this? Like, why the heck would you call it something that sounds so much like the worst crypto in the world?

Well, I'm not. I'm actually not the founder. I'm one of. On the team, so I take. I. I don't take the blame for the name.

So. But yeah, actually it was. It actually was named after Dogecoin. It was just kind of a thought of. Thought of originally as a meme coin, but then we actually started actually building an app around it and producing actual value, and now it's just kind of grown from that.

Okay, so that. That's an interesting way to start this. It's like, oh, this started as a joke, started as a meme, and now it's. We're attempting to develop utility which, like, as an investor or a speculator, it makes me pause. So, but.

But before we kind of poke holes.

Into that, I want to understand. Most people will see cryptos or altcoins as speculative investments or speculative plays. It's very rare that we talk about the projects behind some of these unknown coins. Would you explain to me how you would describe this project from a utility standpoint? What does this project exist to do?

Yeah, so there's two facets of what I call kind of the Coach ecosystem. So you have the Koge coin, which is the token, Tom, that you can buy and sell and trade. And then you also have Code Farm, which is the kind of the brother project besides coachcoin. It is a yield. People call it differently. People call it a yield aggravator, a yield optimizer. But essentially it is a service that allows people to invest their liquidity pool tokens that they get from different farms and liquidity pools out there, invest and put those in our vaults, which then auto compound every five minutes. That's kind of the. The utility of it, of the actual project. But then you also have the governance component of it, where if you, you know, you have so many code coins, you. You provide, you know, you get X amount of votes for Whatever big thing we have coming up. And then also we. It was actually designed from the start to provide utility in a form of profit sharing. So eventually, if we're hoping that if Coach Farm takes off, that CoachCoin will essentially be your ticket to percentage of all the profits that Coach Farm gets. So that's kind of the big takeaway.

Okay, so what I really heard from that is there's essentially two utilities or uses to this project. I'm going to try to avoid calling it a coin, because Coin is just a project. It's how people participate in a project.

And there's two parts of this project, one being that you basically have all these opportunities for yield, like almost dividends from other projects. And Koji's unique utility is that it will auto compound, so it will just reinvest, almost like reinvesting a dividend. We'll reinvest those automatically back into the platform. And then the second that it's basically has profit sharing utility. So when this project spits off profit that it will be distributed among. Among the token holders. Is that a fair summary so far?

Yeah. So essentially three governance, the votes, auto compounding, and yes, and the profit sharing.

Okay, this is a very important distinction that we need to break down here.

When you think about some of the.

Popular cryptocurrencies like Bitcoin or Ripple, those are coins. But, and I know this is confusing, Koge Coin is a token that is purchased through the Polygon network. And the difference between those two is kind of like understanding the difference between a currency and a share of a company that you would buy on the stock market. So it's kind of like if you buy Bitcoin, you're really betting on Bitcoin being worth more in comparison to US dollars. Kind of like you would buy pesos or the Japanese yen or Euros and hoping that they go up in value relative to the US dollar. But when you buy a token, you're more buying a share of a very small privately held company. So when I buy Koge Coin, I'm buying something that is a finite amount of shares in that specific project. And my value of Koge Coin is not tied to how much inflation there is in the US economy or around the world or what dumb thing a government does. It's actually tied to the success of this project. And because I own a certain amount of share shares, tokens in this project, as this project becomes profitable, I share in the profits of this coin. So with Koge Coin, their financial model is as they become profitable, their profits get distributed directly out to the holders of that coin. That's very different than owning Ripple or Bitcoin. You're really hoping that the adoption of that. That currency goes up relative to US Dollars. And that's why people think that it's an inflation hedge. Whereas something like a token like Koch Coin is more betting on the success of that specific project and hoping that it will pay me dividends, it will pay me profits as that platform succeeds and gets more market share. Got it. All right, stick with me.

Okay, so that makes sense. Now, let me poke some holes in this, because you did not say exactly how this as a project or a business would turn profit, and you didn't really describe how this as a yield aggregator would be different from any of the other projects that kind of do the same thing. So how would you respond to that?

Yeah, so essentially it's different than other projects because we started this out being for the community and not necessarily, you know, generating enormous amounts of profit. So what do I mean by that is that we charge one of the lowest rates of fees for any yield optimizer on Polygon at the moment. We're talking about other chains, but essentially it's all in Polygon at the moment. So we charge the lowest fees, and because we charge the lowest fees and auto compound every five minutes, which is extremely fast for others in the space, we essentially can almost. I don't want to say guarantee, but 99.9% of the time, we can always provide more yield than all the competitors that I'm aware of right now. So that's kind of the immediate advantage of us.

Adam.

I just want to clean that up a little bit for anybody who's getting caught up to speed on how this world works. You are built almost exclusively right now on the Polygon network, which is an extension of Ethereum. And their Polygon network is mainly used for decentralized finance transactions. And COS Works as an application or a project to allow the participants to get the best yield possible among all the different Polygon projects. So if you're not familiar with this world, that's kind of the chain of command. Polygon is an extension of Ethereum. Defi is the main use of the Polygon network. Koji is one of the projects, and it, from what Adam is saying, strives to have the highest yield by auto compounding and have the lowest fees. Please continue, Adam.

Yep. Yep, that. That is correct. So you got another question, didn't you? I can't remember what your.

Well, I want to. I want to know why?

Why? And how this project would turn a profit that would ultimately be shared with token holders.

Yep, exactly. Okay, so how it generates a profit now we. There are a lot of. Let me take a step back. So it generates a profit now from 1% of called performance fees, which is essentially every time we auto compound the. Well, it's kind of hard to explain, but let me take one other step back. So how we work, how the whole process works is whenever you have a farm, whenever you invest whatever you want to do, invest in a farm or some kind of other liquidity pool that we provide, that liquidity pool gives an LP token. And that LP token represents a share of your percentage of the trading fees that you get. That's the whole yield and investing thing. And then the majority of the time, the platform that provides those yield farms or those liquidity pools, the yield farms will kick off, will emit a reward token. That reward token is typically the token of that particular platform. And nine times out of 10, that token is generally, I don't want to say worthless, but it doesn't hold its value because it's essentially constantly generate minting and minting more and more. And it's an inflationary token. And we provide a service that automatically receives that reward token, puts it automatically back into our vault, and then just converts that back to what you want is your original LP token. So that's kind of the gist of it. Now, how we generate profits is that whenever we grab that reward token, that reward token has a little bit of value every five minutes. It's small, but it has a small amount of value. Depending on what the value is at time, we will automatically convert that to.

A stablecoin in the smart contract. And then we take 1% of that, kind of put it aside as our profits, and then we put the rest back into. Into the farm.

I see.

That's how we generate the profits.

I see. So for anyone who is thoroughly confused after that, I'll try and clean this up a little bit. What Koji is essentially doing is it's almost like they're getting fractional dividends from all of the transactions that are happening and then are going back to token holders once there is a profit. Now, Adam, it seems to me that in order for those tokens to be worth anything, that the KOJ token needs to have some additional utility. There needs to be some additional demand for it for people to want to buy and sell it. So what, if anything, would give the Koj token its own unique value in the marketplace?

Yeah. So the vaults are separate of the coach coin itself. They kind of intermix quite a bit, but they're separate. So how the coach coin you can provide get coach coin value from the coach coin itself is through. We have a specific vault, the coach coin vault which what you put money or if you put tokens in, you automatically will generate yield on that, which generates more coach tokens. So that is one thing you consistently get more and more if you stake your coach tokens in this particular farm. Now the utility for that right now comes in the form of governance. So we're talking about other utilities because we get this question a lot like well, what is the difference between you and Doge? And we realize that the utility of the coin at this point, before we get to around middle of the middle of 2022, whenever we finally get all of the tokens.

From the airdrop, the unclaimed tokens dispersed, then the profit sharing starts. I actually had this conversation today with the team of trying to figure out where else can we provide some further utility at this point it is governance and essentially just we're in the accumulation phase where you recommend, you know, just accumulate as much as you can as we go and then you know, the, the final mission is to provide profit sharing to everyone.

So Adam, that's, I mean I get the end game then like if there's lots of people using the platform to auto compound and maximize yield, then it would make sense that of course there's going to be some profit from this and you would want to hold it for distributions and dividends. But it also seems just backwards from a business perspective. It sounds like there's not like a clear thesis of what the value of the token is. I almost feel like I'm investing in a spac. I'm not sure how it's going to be used. There's just a promise that the money will be deployed in some way. So how would you respond to that?

Yeah, I mean you definitely have very good point. And I think what is really carrying us until we get to the final point of profit sharing is essentially how we are different than.

Almost every other essentially all the Polygon networks, at least on the network, is that it's more of.

A following, I guess, if you will, of like how Dogecoin is. Dogecoin has no real utility whatsoever and look what that has done. So it's essentially of, you know, we are, we are continue to, to grow. I don't know how much we've only 5 or 10x or something over the last Few months. But essentially we were the first ones on Polygon to start and that, that because we're kind of the OG on Polygon for yield farming, we, we essentially kind of gathered a group of people because of.

The authenticity of us. The, the transparency that we have, the, you know, essentially the non scamminess that so many other projects have in the defi world. I mean, we try to show every day that, you know, we really care about making our users money. And so we are completely transparent. That's one of the biggest things that I. Biggest things that I see that people really like is essentially the community around it. You know, if you have a piece of that community, you feel like, hey, I have a piece of the ownership of this and have a stake in it and see how it goes. And I really appreciate what these guys are doing. So that's kind of what we're. Our big value add is right now.

I want to ask you about the price because as we're recording this this past week, there was a wild week when it comes to Koji. So we went from, I think like a week and a half ago, Koji was trading for $0.12 and it rose over a period of about 10 days to $1.50 at its peak. So it 10x and then over the last two or three days has come all the way back down to between 50 and 60 cents. So we had this roller coaster, this rocket ship up and then this fast fall down. And I want to know from a developer and an owner's perspective, is that a stressful time for you and does it change the overall thesis of the project when you see swings like that?

I mean, if you're in the defi world, that's what you would expect. That is extremely common to do, especially with our market cap. Now as we continue to grow, the volatility will get less. But we're what in May, May, June, July. A few months old now. The project is so. And because we, we minted all of the coins, we have a 50 million, 50 million total token supply. And we were just slowly kind of giving that out to all code stakers until, until the middle of May. So we have a pretty low market cap at this point. So that allows, you know, whales to come in and essentially you can manipulate the market with just less than $50,000. You can really make it swing. And what happens is in that instance, in this week, well, was we had a few, one or two. The bigger whales would come in, make a big buy, and then everyone, all the retail investors got all excited and we're going to the moon. And the moon boys came out, which we try to prevent, but we couldn't prevent in this time. And it kept going up. It just compounding on itself. And then finally once it got up to, I don't know what was that $1.50 or something around there? One of the, as soon as the way one of the whales dropped, then they started drop and it just compounds up on itself. It's extremely common in the defi world. But what, what I really saw for what this has happened, that hasn't happened quite this drastic in the past with the coin. But what, what I really saw with this is you'll see that it will come back. It will come down like nearly all the defi tokens will at some point, but you'll see that it slowly starts to kind of come back over time. I just was looking at a, A, an investor report. Somebody was doing some forecasting. And if you kind of stick a step back and like on the week view, not the 10 minute or the even the day view, if you look back on the week view, you can see a slow and steady, you know, rise. And I think that's what we really try to focus on is not the, I mean we hate, we hate the pumps and we hate the dumps the same way because it's so volatile. It's not long term. We really want to, really want to stress like we are here for the long term. We would much rather see a, you know, a slow and steady increase than one of these big jumps like we just had.

What is long term to you in the defi world? It seems like a month is long term to some people.

Yeah, it's. We're actually long term. We are, we're old, old school in the defi world. That's what three. We started in May, May, June, July was like four or five months. Long term is probably the next year or so. So in the next year or so we are going to, we will be expanding the auto compounding service to other chains. So we hopefully in the next, within the next year. It's our roadmap. We are trying to really kind of scale out the auto compounding service because that's what everybody comes to Coach Farm for.

When you say the other chains, what are those other chains?

We haven't decided on what chain yet, but we have talked many. We've talked the Binance Smart chain. We've talked Solana before. We've talked. I really don't want to say what chain. It Is but we've talked various different chains and figuring out which one would be the best to go to. So that's our next plan.

So let me see if I can kind of summarize this. It sounds like at its core the utility or the functionality of this project is to be an auto compounding service, which is rare or doesn't exist in the defi world. I don't know of any other services.

That there are some. There are a handful of them, yeah.

Okay, but that is your differentiating factor in most of the defi world and.

Your differentiate factor is yes, yield, aggregation and low fees.

And your expectation is that as the platform expands there will be profits from the fees taken which will then be distributed to token holders.

Correct.

But until then you're in the accumulation phase, which means that people are buying KOJ and getting dividends in the form of KOJ when they stake it and they're getting more KOJ which have a value based on. Actually that's a good question. What does give it value?

I mean what gives doge value at this point? It's more. What I have seen is what gives it value at this point in time is essentially our backers are just simple belief in the project at this point.

Other people. Is it other people buying it that will determine the price at this point?

Yeah, I mean, yeah, that's with any token, the more people that buy it, the higher the price will go. So that's what. Essentially that's what it is now. It's just people that, I mean for our long term holders you got the die hard people that will hold forever and then you got a small section of people that just want to use Koji to make a quick buck a day trade on it almost. But yeah, at this point as we, as we continue the accumulation phase, we can continue building out the auto compounding service. Other chains, talking about NFTs and really just trying to expand the.

Community. We really trying to focus on just that sort of thing like building the community, building out and just being there for people while we're actually accumulating.

Okay, so this requires a bit more explanation. In the crypto world, when a new project gets launched, they will often incentivize other people to put their other currencies onto their platform and they pay them a return in the form of additional tokens. And remember those are like shares in the project. So when a new project gets launched, if you put your Ethereum onto their platform, they call that staking. If you stake your Ethereum to this person, project that project will use that as liquidity to keep the project going, and they reward people in the form of more tokens. Now, those tokens might go up in value or they might be worth nothing. So it can be a risky play to give your Ethereum to this platform and get passive income that could actually be worthless. Now, in most cases your Ethereum is still protected, but the return that you're getting could be going to zero because you're just getting this worthless community token. What KOJ does is it automatically sells that native token. It sells your rewards and reinvests it back into the underlying currency. So if you take your Ethereum and you lend it to this project and you're getting 20% in passive income, Koj will sell that 20% and put it back into Ethereum. So if Ethereum price stays flat and you get 20% for the year, you're just getting 20% more Ethereum by the end of the year. Does that make sense? I hope so, because it's about to get even more confusing. The way that KOJ makes its money is it takes a very small fee. I think at the time of this recording, it's 1%. So 1% of the price profits that you make on this platform go to koj and some of it goes to the developers and a good amount of it goes to the token holders. So as somebody who has invested in Koge Coin, and please remember, this is not an endorsement of Koge Coin. Please don't buy things that you just hear random dudes on the Internet say that they invested in. I may have sold all of my tokens by the time you hear this. I don't know what's going to happen with the project, but one of the things that was compelling to me was knowing, hey, this is actually a really cool platform. I can see why people would value having this feature where it sells the reward token and puts it back into the native token. And there are some farms, some opportunities on Kosh Farm that are providing 40, 50, 60% returns in tokens that I want to hold hold anyway. In fact, I just looked last night and there was a farm on Kosh Farm where I could stake two coins that I wanted to hold long term. I think they were Ethereum and Matic, which is the Polygon token. And if I stake Those two, those two coins on this one project, I'll get an estimated 46% return that just gets reinvested into more Ethereum and into more Matic. Now, those percentages can change from day to day, but it's a very interesting play to know that KOJ is going to take care of de risking it for me. And as a holder, I'm going to get a part of the profits that they take. That's what makes a project like this so interesting. Now the other thing that is really fascinating about this is because there are so many holders of the Koge coin, all of those individuals are sort of like mini ambassadors for people to come use the KOJ farm platform.

Right?

I'm talking about it right now. I wouldn't have become interested in it if I didn't have money invested in the success of that project. And since it's so easy for people to buy the coin and use the platform, it makes sense that there'd be a lot of people who would want to be recruiting their friends to bring their money onto this platform. Now that doesn't make it a Ponzi scheme. This is a legitimate project and this has legitimate returns when used appropriately. But I find it so interesting that each little holder of the project is like part of the marketing team and these entire communities are being built because they're financially insane, incentivized to see the success of this project. I find this fascinating from a marketing perspective because if you have your customers with aligned incentives behind the success of this project. Oh my goodness, what a fascinating world. For example, I used to own a lot of AT&T stock. I sold when they did their buyout of Time Warner or whatever it was. When they divided up the asset and they had a dividend of 8% inside my E Trade account, I had it set to have a dividend reinvestment plan turned on. So every time I got a dividend, I didn't take it in US dollars, I just bought more ATT stock. And that's what I do with Verizon and IBM and the other dividend paying stocks that I have. Well, KOJ does the exact same thing, but with crypto and then they take their 1% fee. So it makes total sense to me that I would just put my crypto on a platform like Koji and let KOJ reinvest those profits back into the assets that I want to hold long term. And now I'm a mini ambassador because I own some Koch coin myself. And as more people use that platform and it becomes profitable, I'll share in the profits of that platform. All right. Are you seeing how this works? Works? Are you seeing how this is a completely new way to structure a business? In fact, I don't even know if Adam is on payroll at this company or if he is just making his money in the form of coins being distributed him? I don't know. I didn't ask. But I find it so fascinating that these projects are completely being built around a community. They're not going out and doing raises or doing a ton of marketing, although I think they should. Instead, they're just relying completely on the community, getting value from the platform, and participating in the upside of the project.

So, Adam, is this a race to acquire users at this point in this space? I mean, is this like, if you look, I mean, Apple iOS releases, you could have nine apps that do exactly the same thing. He who acquires the most users wins. Is that what we're looking at right now in this space?

Yes, for the most part, that is in the. The space that we're in, the auto compounding yield farming space. The race is for total TVL total value locked of all of our vaults. The more value that we have in our vaults, the more performance fees that we can accumulate, which then the bigger that we can get, then we can share. So that is the biggest metric of success in our space.

Okay, TVL so I'm being really honest with you right now. That was the first time that I went, okay, now. Now I can actually see where this is going, like, in a business perspective, because, like, it gives me pause and a little bit of heebie jeebies when you say things like, what gives doge value? Like, nothing gives doge value. So, like, why should, why should I buy?

Koj doesn't have an auto, doesn't have a kosh farm, doesn't have nothing but.

A really famous promoter. That's all it has, a famous promoter. People are buying it, hoping that it goes higher. So when you said that it was the first time, I'm like, okay, I can now see the thesis a little bit to where what I would be thinking of, if I'm you or somebody on the development team, then is, okay, our job is to go create really attractive farms and yields on the platform to attract other capital, thus, thus attracting people who want to put capital there, which gives liquidity to the entire marketplace. That, that to me would be my perspective. Am I summarizing you or am I putting words in your mouth?

No, yeah, that's right. I mean, if you think of the. Our. I mean, if you boil it down, the whole goal is to increase TVL total value, lock for all the vaults. We're doing that lots of different ways through, you know, community, through all of the, you know, the soft Stuff where people just want to feel like an owner in the ventral profit sharing. But we're now we're revamping our development environment and processes to actually get out vaults faster. Because what we've seen is that whenever we if you're first to market when it comes to, you know, a vault or an auto compounding service for a popular farm, people are going to flock to that. You'll see people defi is so it's so fast, you'll see people jump in, jump out, jump in, jump out. I mean that's what yield farming is. They farm yield from all these different places and the first to market is always win. So what we're trying to do is on another side of that. Improving the product is actually building out an automation process where we can just quickly just spin up all these vaults and smart contracts like crazy as much as possible. So we can always be on the forefront of that and have the, you know, the first to market advantage.

So one of the things I teach my E commerce students is something I call the owner's model, which is where you know, you have, you develop the product, you partner with an audience and you raise the capital in order to have the advantage of speed to market and as much awareness as possible. And you can be selling the exact same thing as somebody else. But if you're selling it to a specific group with a certain audience, you can charge a premium and you can carve out your space in the marketplace. What you just said is if you get like your goal here is to kind of run that same model of try to get distribution to the investors, lock up capital so that there's liquidity and be the best product in that space so that you carve out that section of the community is that if it was okay, perfect. So I'm starting to understand now, now as if I read correctly, it sounds like based on the speed at which tokens are being minted, that will be at full supply. Kozwell have issued all its 50 million tokens by about May of 2022, if that timeline is correct. Can you tell me what happens after that?

Well, let me make a quick correction there. We unlike many other tokens, we don't have a. We can't mint anymore. We minted all the 50 million supply all at once. So that's a big difference than what a lot of coins are, where they're just, you know, they'll just mint like crazy more value. And those are the inflationary tokens. The big difference between codes is that we've already minted our 50 million. That's a pretty small supply already. And then we are distributing the remaining tokens. So we did a fair launch airdrop to where we would give provide free tokens to anybody that wanted to claim them. And we had a bunch of unclaimed tokens left over and we are using those in our staking vault to then provide give those tokens out to more people that stake. So that's how we are giving up. And based on the the codes per block that we're distributing, that will be done around May of next year.

Okay, so what happens once, Basically what you're saying is the tokens exist, they're just not in the hands of anyone because they were unclaimed and now they're being distributed on the platform as the reward system. But what happens when they are all in circulation? When all 50 million are now in people's wallets? What happens then? Why are people using the platform?

Yeah, that's going to happen in May 2020 at the current emit rate. And that's when profit sharing starts. People can do whatever they want with their Koge coins, but whoever holds them will get those percentage of profits that we provide.

How are those profits distributed if all the KOJ is in circulation?

We have a certain amount kind of set aside for that. So we have kind of a, I guess you want to call it a buffer of, of some codes that we're going to have. But for the most part that's just. That's. We're not planning on ever using a small buffer. But essentially we are as people, you our TVL increases in all of our vaults. We are going to use the stable coins that we would eventually get from there and send though we don't know the specifics of it yet. We don't know if they're going to be more code or stable coins or whatever. But essentially we're going to keep a little bit of a buffer.

In case who knows what happens in the DeFi world six months from now. But for the most part those rewards are going to come from actually other people that have locked their funds in our vaults.

When you say you're going to keep a buffer, do you mean a buffer of KOJ tokens or of a stablecoin or something else?

No, that's going to be usdc. That's going to be a. I see.

Okay, so when you say that there's going to be profit sharing, the profit sharing is distributed as USDC as well.

I don't want to say yes or no. To that yet. Okay, that. Those are, those are plans that, you know, in the defi world, that's the plan is. We've talked off and on about that, but we are probably, it's probably going to be a stable coin like usdc, but we don't want to commit to. It's not going to be, you know, some inflationary. It's not going to, it's just early.

You haven't made that decision yet, correct?

Yes.

Okay, tell me about the burning process. I've seen some of the communication within the community of people talking about when KOJ tokens are going to be burned. And I know nothing about this, so I don't even know like where burning events happen. And I'm, I'm still learning about this a little bit. So would you explain that to me?

Yeah, that's something else that differentiates us from a lot of the other coins out there is that we are known as a deflationary token. Instead of minting more and more, we don't even have a mint function in our smart contract to actually do that. So instead of minting more, we will be burning more. And burning essentially makes a deflationary token where if the price would go up, keeps going up, we're just going to keep burning. So we have different burn events which are essentially just destroying the coge tokens. That's what burning is. You just send it off into the ether and it goes away. And when the supply goes down, the demand is theoretically supposed to go up. And that's, that's the, that's the goal. So as of, as of now, the profits that we are, that we are generating, they aren't going anywhere. They're not even going to us. We have a certain set of, for the developers and for the other people on the team, we have a certain wall set aside for that. But all the profits that we're making now are going, are being, they will be being burned as of next week after we get our. All of our audit stuff taken care of. But those will start a continuous burn.

So what is the burning event? What triggers something to be a coin to be burnt?

Whenever we get profits, there's different burning events. So like if you have a. Some people announce when they're going to burn their tokens, some people don't. Some people have specific times, but you'll see people do burn front running. So if they know a burn is going to happen, they buy up all the coins and think it's going to, you know, think it's going to rise when the burn happens. So to prevent that, we are going to do what's called a continuous burn, which is essentially as soon as we get the profits in, they're just going to be burned. They're just going to be constantly burned.

So do you mean any time that the developers take a profit that is just burn tokens? Is that what you mean?

No. The developers are paid from a different wallet that's already been set aside for the development purposes. All the profits that we pull from it will.

I'm still not quite understanding that. The profits that are pulled from what?

From all the 1% of the reward tokens that we are accumulating through all of our vaults.

Okay. So it was my understanding that that's also the pool that is being distributed to token holders. Are you saying that when.

Not right now.

Okay, not right now. But once there is at full supply.

Correct. The burns will stop when it gets to full supply. So from now until. Until profit sharing, we're just going to burn all the tokens to preferably increase the value of koj. And then once profit sharing starts, then we're going to stop the burns and then start profit sharing, which with people.

Okay. Okay. So when a profit is made from the farms, those. Those tokens get burned?

Yes. Not as of today, but as of probably next week, as soon as we get our audit done.

Okay. What a world.

It's defi, man. This.

This rabbit hole goes deep. Deep.

You're talking to. You're probably in the deepest part of defi that you can get right now.

That's good even, because I've been catching up. I have been catching even.

To get to kosherom, you have to go through like two or three layers of DeFi to get to where you are right now.

Okay, so this is about where my brain was done trying to learn new things, but it feels like we're starting to get down to the bottom of the rabbit hole. But basically what Adam is saying here is, is that KOJ has a maximum supply of 50 million tokens. That means that when the project was started, there's only ever 50 million tokens.

That are going to be made available.

Now, at the time of this recording, there are about 17 million tokens that are actually in circulation. That means that they're in people's wallets. Some of that is in my wallet. And at the same time, about a quarter quarter million tokens have been burned. That means they're gone. And it sounds like they're planning on burning a lot more. Now this is very different than buying a currency in which the government can always print more. That's called inflation. And it's also different from buying into a company where they could dilute shares. In this case, the board, the managers of the project are actually incentivized to destroy shares as there are profits that are generated by the platform. Those profits are buying coins on the open market and they're burning them. Why would they do that? Because it makes the coins that are left more valuable. It decreases the total supply that is available, thus making it more financially rewarding for people to hold the coin. And so the tokenomics of this are actually incentivizing people to buy and hold the asset in two ways. One, because they're going to be dividends paid to those holders from the profits of the project. And second, because the project is written in a way where excess supply will be burned and so the value of yours would naturally go up. This is of course dependent on people actually using the platform in the way that it's designed. And that is to take your Ethereum or your Matic or your Sushi or whatever coin you're holding and putting it on KOJ and getting the passive income from staking it to other projects. If your brain hurts at this point, don't worry. Mine did too for a long time while trying to understand this world. But I'm extremely bullish and curious about this technology because it opens up an entire new way to do business.

What does success look like in a project like this? This seems so down the rabbit hole. Like what does it mean to win on a project like this?

What it means to win is have the most TVL of all of our competitors and thus providing the most profits to all of our coast coin holders.

That TVL meaning that the total value locked, meaning the amount of capital that people have put into the system that is now generating fractional profits for the holders of the token. Is that what you mean?

Correct. Yes.

So you're winning to you, does it mean being the most successful yield aggregator on Polygon, or does it mean something else.

Long term, which I mean next year? Again, this is defi. You never know what it's going to be. But the founder and I have talked about this quite a bit. There's lots of different ways that we could go. But.

If I were to say where is Coach Farm going to be in six months from now? Definitely multi chain provides scale the service to other chains. I mean that's not a big surprise anyone, but more of a.

Probably going to be a mainstream focus. You have Services like AAVE and Compound, which are similar to in the same vein, at least of what we do. But you see their TVL it's just insane. But you don't have all the crazy degen interest rates and yield potential that you can with a lot of vaults that we have. So let's say maybe six months, eight months from now, it's probably going to be more. We don't want to lose our roots of all the insane high yield potential that you can get, but we want to kind of focus more on the mainstream audience, more people that beginners, people that would focus more on AAVE or Compound and go from there.

Adam, is this your full time thing?

No. Pretty much. Well, since I have a business and I'm a freelancer, but I have a team behind that, so I've dove in headfirst in this. I'm pretty much spending the majority of my time on this project at the moment, which probably spend a little bit.

Too much time because I love it. I think you have a background at Microsoft, you're very well respected in your field and it's kind of curious to me like why someone of your caliber would yell cannonball into the pool of this very small project deep in the defi space.

I'm genuinely curious. Look, I'm an investor at this point, but I'm an investor from an edge. I'm doing this because I'm trying to learn this space because it's moving so fast and so there has to be something that compels you to this project or this world. And I want to understand what that is.

Yeah, I'm the type of. I'm an entrepreneur by heart. I've been for years. And whenever I come across.

An industry like crypto that I believe it's going to be exploding in the next few years, I think it's the future of, of currency. So I wanted to get into a project that was in that space somehow. And since I really like working and building with startups I don't like, I would never join Coinbase or AAVE or even the Compound or even the larger ones. But I really like starting from scratch and helping a scrappy community in a startup and really helping them build from nothing. That's why I started with koj. I originally started with Koji because of the community. I was kind of browsing around various telegram channels and Discord chats and I could see the difference. I could see the difference how the developers are just really transparent. It would help everyone immediately. And it was clear that this was different than a lot of other projects because they just essentially cared about the people that they were actually servicing. That's probably one of the best reasons I started. And that's when I started, you know, like, this is a tiny project. I really want to build it. I want to get, I want to do more in the crypto space. And I thought this was a very good opportunity to do.

So is this in your mind, is this an opportunity to learn more about the space or is this a significant financial opportunity for you personally?

Well, I'm glad you asked that because I started in with just a learning opportunity because I just wanted to get more like you were kind of yourself, just to get more into the space and just learn how crypto works. Because I think it's going to be the future. And when I originally got it in, I just went in because I wanted to build something. It had nothing to do with financial because, you know, I already have a successful business. I, you know, I'm not financially struggling by any means. I don't need the, I don't need the extra money. But when I started, that's when I started. When I started, like, okay, I'm just going to buy a lot of Koge Coin because I believe in this product I want to build. Whenever I go In, I go 100% all into something you could ask my wife, 100% or nothing. So it was 100%. I'm going to just drop lots of my own capital into this and into this Koge Coin and eventually maybe it will, maybe it won't. I will see how it goes. But this most recent run up, it kind of made me think, like, wow, I may actually make some money on this. I didn't even know it was possible. This most recent run up is I had the most money that I ever have in my entire life in my trading portfolio at the time. And what really made me think of this as the project for me was because I didn't sell. I'd scraped off a little bit of the profits, but I could have dumped and could have made enough money to last me for years to come, but I didn't. And that's what really solidified my belief in what we're doing in the project. Because I had all this opportunity, like, here's all this money for you. There's this big bag of cash and I didn't just immediately dump it and go away because it kind of gave me a deeper feeling of like, holy shit, I'm really care about this project. I want to see how it goes. And that's where I am right now.

I'm really glad to hear you say that. I'm really glad to hear you say that because I had the same experience this week where I like, I learned best by taking my licks. So I put quite a bit, like I put a decent amount into this project and then watched it 10x and had a great couple days, but didn't sell any. Right. I just, I, I kept it in the platform and continued to compound. I then had a rough week when it started to come back down. Right. Because it fell, it went up 10x and then it fell 2/3. So it's still up like 3 or 4x from what it was before. But it does seem like the people with the biggest amounts actually believe in this, which gives me greater conviction too, because there has to be like a collective conviction around it in order for something like this to ever be profitable. Right now we're playing with fake money. We're playing with tokens that don't have inherent value at this point. And so as a participant, you could.

Convert them to fiat if you really wanted to.

So tell me exactly what you mean by that. Like when I say they don't have any value, I mean, like, they don't. People aren't using them for anything bought and sold.

Yeah, you would have to convert them to fiat. So to use them. Yeah. Just for example, whenever, you know, this recent, most recent run up, I shaved off a little bit of the profits when we were just way up there and you know, I'm going to buy a deck full of tr.

But yeah, I mean, so. But yeah, when value, you can actually, you know, take codes. We're actually been talking to some people about figuring out a way to do that, but not even. That's another conversation. But yeah, you can't take codes and buy a deck or buy something else from it. You have to go through the painful process of doing the bridge and finding a exchange that will, you know, let you convert to fiat and all that good stuff.

Adam, is there anything that I didn't ask you that I should have?

Hmm, that is a very, very good question. I think you've pretty much taken care of everything that was on our. Everything that was on our roadmap. Then I can. That can publicly share.

Okay. What.

I'm so down the rabbit hole right now. I don't even know how to come out of this. So I'll just say this, Adam. I am kind of documenting this experience as a, as a learning experience for myself. So when you are like, I'm just like learning this as like a sideline participant, as somebody who is really in it and then thick of it and is like making their life about it. What are your stress levels like when you see the community and this industry changing and the price fluctuations?

What is your stress level during that time?

To be honest with you, I don't much pay attention to the. When I started in crypto, I was all over the place. When I start down the rabbit hole in anything, I will go far and wide. I have accounts on probably 10 exchanges now and I've traded on 10 central exchanges and I've got I don't know how many wallets of just. I try everything there is under the sun. But now since I found a focus and something, a project that I believe in and I want to succeed, it consumes pretty much everything, everything that I think about in crypto. And you know, I have a few things, you know, I dabble in, you know, some, some stuff in the anchor protocol and something that some an avalanche here and there. But for the most part, really my focus is on just building the product regardless of the price. It will go up, it will go down. You know, it doesn't affect the only thing that we, that the team really cares about. Of course we want Coach Coin to, you know, stay stable and to go up as much as possible, but for the most part it's all about just grinding and grinding and getting more, attracting more people to Kosh Farm so then we can build something sustainable, unlike the fly by night projects that you see so much in Defi.

Adam, we'll be watching. Thanks so much for sharing with us today. Thanks for hanging out with capitalism dot com.

Thank you.

Okay, capitalists, that may have been a brain workout for you. It certainly was for me. And I definitely want to restate again that I'm not recommending that you put your money into a speculative project like KOJ or anything that you hear me talk about. At the time of this recording, the value of Koge Coin is pretty erratic. It's gone from $0.07 to $1.50 back down to $0.38 and everywhere in between. It's been kind of a roller coaster ride. But I am learning so much just by participating, participating in a project like this. And so it's been a very interesting and profitable education for me thus far. In fact, there are some farms on Koch Coin that have paid me 1% per day, sometimes more. And then there's really what I might call conservative pools on Kosh Coin that are providing 30%, 50%, 60% returns per year. And those percentages can fluctuate based on the value of each coin that is on the platform. But it's a very, very interesting space. There is a reason why Gary Vee can't stop talking about NFTs, or why Mark Cuban is so bullish on crypto and defi. And there's a reason why my 2021 keynote from Capcom this year was mostly about the future of finance, capitalism, and the amount of abundance that is about to come. It's because that's where the world is going. I am not the most educated guy in this space. There are gurus out there who live and read this stuff. I'm just a regular dude who made money in affiliate marketing and e commerce and building and selling brands. But I can see what the next chapter of capitalism looks like and I can see where most of the world is going economically and it's in this direction. And it is fascinating to see all of the different options and opportunities that are opening up. Hey, if you made it to this far in the podcast and you're liking this stuff, would you let me know? Drop a review on Apple Podcasts and let me know what you thought. You can also drop me a line directly on Instagram. I'm ryandaniel Moran. I'd love to hear from you. How about Brain still hurts from all this token talk? I'm gonna go take a nap. See you guys later.

If you found value in this podcast and you're ready to go deeper, here are three resources where we can help you. 1. You can grab my book 12 months to 1 million on Audible or Amazon. It has over a thousand reviews and it's the playbook to building a seven figure business. Second, you can join our community of entrepreneurs who are following a plan to build a 1% net worth by building businesses and investing the profits you can get plugged in@capitalism.com 1 and third, if you're looking to go deeper and build a seven figure business that you can sell, you can work closely with us inside the Capitalism incubator and you can get on the waiting list and find out what we do over at capitalism.com Inc. That's capitalism.com Inc.