Long before David Hoffman helped create the popular podcast Bankless in early 2020 he was one of those lucky kids who had Internet in his bedroom. Granted, he ran it on one of the few Apple eMac computers in existence, but his love of psychology and how governance work can be seen in his easy and natural interview style. Bankless has the lofty ambition of getting 1 billion into crypto and created its own decentralized autonomous organization to further those ends earlier this year. He caught the Ethereum bug in 2017 and hasn’t looked back.

Matt Leising: You're based in San Diego, is that where you're from originally?

David Hoffman: I was born and raised in Seattle and spent most of my life in Seattle. Other than the four years I went to college in Orange County [California]. I got a taste of Southern California but after college – I had an undergrad in psychology – I went back home to Seattle to kind of pursue that whole side of things. Some combination of mental health plus nutrition plus physical movement. So my first jobs out of college, one was working in social work as a counselor for a kid's mental health agency. I was thinking I was going to be some sort of clinical psychologist doing therapy. And then at the same time I was super into health sciences and learning about how physical movement impacts mental health. If I want to improve people's mental health you can't not talk about exercise. And so we were like integrating that. And then at the same time, I was learning about nutrition and how optimal nutrition also impacts your mood and your ability to be a positive person. So it was really like a trifecta intersection of mental health, physical movement and nutrition about literally how to be better, how to feel better when you wake up every single day.

ML: Were you guys in Seattle proper or outside of the city?

DH: The city. I was born in Queen Anne, which is like five minutes away walking distance away from the Space Needle. And then my family moved further out from the core of Seattle.

ML: What did your parents do?

DH: My mom is also a psychologist and my dad was an urban planner.

Good movie, even better soundtrack

ML: That reminds me of Singles, the movie, have you seen that? There's a character in there, I can't remember his name, but he just goes around and asks people, “do you ever think about traffic?” That's all set in Seattle. Do you have, do you have brothers and sisters?

DH: An older sister, five years older than me. Yeah. She works in politics, works in government.

ML: That was the post grunge era or, where are we when you were growing up in the Seattle with the kind of music scene?

DH: I was born in 1992, so I was in first grade when9/11 happened just for reference. That was not the grunge scene necessarily. I kind of grew up with boomer music. Bruce Springsteen, Tom Petty were kind of like my vibe. So yeah, I was a little bit definitely listening to my parents' music more than I was into like my own.

ML: What were you into as a kid?

DH: Lots of sports, baseball, soccer but I had a computer in my room and I was always very drawn to that. Definitely one of the frictions of child-parent friction that was getting me off of my computer. I was like, I had computer time as in like my mom had to bottleneck how much time I would spend on the computer. If she let me, I'd be there all day. So definitely drawn to that. Never ended up actually learning how to code though. Kind of just as a user, more than a builder using applications. And interestingly enough, a lot of the applications that I mastered, just tinkering around as a kid with Photoshop or Garage Band – photo editing, music editing, video editing. I’ve turned all those into skills that I now use at Bankless. All of a sudden, I started Bankless and these fields that I developed like almost 15 years earlier came back to the surface.

ML: Do you think it was that you had a first love, but then you went in a different direction and then realized that's not kind of where you wanted to go and you came back to your first love.

DH: I think everything that I've done has been a puzzle piece for where I am now including being drawn to the computer, but also understanding psychology. I think you can bake in the nutrition and physical movement things and something like anthropology. So I kind of see my career path as kind of the building blocks of everything I've been interested in the past. But also definitely being computer knowledgeable, just having computer skills, like learning how to surf and manage the internet. Social media is like, has turned me into a computer-driven person. And where else do you find computer-driven people these days, other than crypto?

ML: When we talk about you on the computer as a kid you're like on AOL dial up stuff, is that right?

DH: I'm not sure. I don't really remember dial up at my place that I grew up. My grandparents definitely had it. My memory doesn't go so far back to dial up when I was a kid. But I do remember having the internet wired into my room at some point in middle school. And I thought that was super cool.

ML: So the Netscape moment had happened for the web. basically.

DH: Yeah. I remember using Netscape on my mom's laptop, not in my room. By the time I had internet, it was Safari. There's a very young photo of me standing up on a stool using an old black and white Macintosh. And then I had saved up a bunch of money at the time. I think it was like $400 as a kid to get an eMac. There was this one model of a Mac called an eMac and that was the computer that I got internet on.

ML: Wow. I don't think I've ever heard of that version of a Mac.

DH: There was only one.

Try explaining this to your kids

ML: So obviously computers were a natural for you. You mentioned some other things like psychology, sociology, were there other strands that you pulled together going through high school and college to, like you said, puzzle pieces that you think fit into where you are today?

DH: Yeah. I was part of a fraternity in college and that wasn't really anything like unique other than for what it is, except it did teach me about organizational vibes in a group of people, right? Like kind of watching this nebulously defined group of people, because some people drifted in and out of the fraternity, some people were more members than others. It was just a very fluid environment. And it was interesting watching that fluid vibe rise up – it was a very bottoms up organization where leaders would emerge – social leaders, organizational leaders, like this group of people determining what was okay and what wasn’t okay in this very non rules-based fashion. It reminds me a lot of DAOs these days, like the same kinds of rules about social organizations. And so my time in a fraternity was the same as anyone else's, it was me, I just wanted to be in this group of people that I vibed with. But also while inside of it I also viewed it externally as kind of a very interesting social experiment, like watching a bunch of like young men learn how to engage with each other and their surroundings. And that's what I'm seeing happen with DAOs, all learning to like self regulate and self promote themselves.

ML: I would say DAOs have fewer keg parties though.

DH: [laughs] That’s starting to happen. There are more and more DAOs throwing parties, mostly in New York, these days, but overall all over the world. I wouldn't say that DAOs aren't throwing parties.

ML: Alright, we should start Keg DAO.

DH: [laughs] I'm not sure that the culture of Keg DAO is something I would align with.

I joke that I kind of filled that void in my life with the people that I discovered in Ethereum, and it’s actually not a joke, it’s completely true

ML: I've heard you say on other podcasts and in other places that you were kind of heading towards psychology after school, after college. But crypto kept kind of nagging at you. Can you tell me a little bit more about that?

DH: I mean, I knew Bitcoin existed, but I didn't really deeply discover crypto until 2017. So there was no nagging. There was like the moment that I discovered what the hell this thing was and there was almost no looking back. There was a three-to-four-month period where I went down the crypto rabbit hole and before I realized that I am not doing anything else with my life as a cognitive choice. Once I was down the rabbit hole, it was a one-way street for me. I started mining Ethereum back in 2017 as passive income to pay for physical therapy school. Then I doubled down on mining because I thought it was the coolest thing ever. And I was actually making a decent amount of money at the time for what I had. But then in the process of like, okay, I've just like allocated $5,000 of my capital to mining rigs. What the hell am I actually mining? And in the process of answering that question, I just got totally crypto pilled. So it actually happened pretty quickly, I would say.

ML: And that was basically Ethereum that did that for you, right? Bitcoin didn't ever hold much interest for you.

DH: It piqued me but didn't grab me. So, like I said, I knew what Bitcoin was and I remembered kind of diving in in 2016 a little bit to kind of understand the basics. Bitcoin at the time had just crossed a thousand dollars, so it came on my radar and I thought the value proposition was cool. It was like, cool. I can hold my money outside the banks. I don't like banks. But then my attention went off to the next thing and then it was another year before I discovered Ethereum.

ML: As is often said, Bitcoin is great for value transfer and Ethereum is great for everything else.

ML: Okay so Bitcoin was at a thousand dollars, that's early 2017. We're just about to run up to $20,000 in Bitcoin and a little over $1,400 for Ethereum that year and into early 2018. That must've been exciting for you, but then the big crash came after that. Take me through that period.

“It was a dark time.”

DH: Oh yeah. I was buying all the way down. I remember Ether going from $1,400 down to $600. I was like, oh my God, I'm all in. And then, you know, $600 to $400, I was like, all right, paycheck in! $400 down to 300, paycheck all in! And it definitely wasn't fun, but at the same time I went from a social services, mental health minimum wage job you know, government paid. And then being a personal trainer, also minimum wage and then I got my first job in crypto in February, 2018. And I went from like $25,000 to $30,000 a year, all the way up to $60,000 a year. So like comparatively, I was ecstatic. I was over the moon. So while my portfolio was just getting slammed my income was going up.

DH: And I kept on going. First, the ICO advisory company [I worked for] blew up. Then I went into security tokens that blew up. Then I went into tokenized real estate. And along the way, my income was actually going up. By the time I got to tokenize real estate, I had a $85,000 salary, which I was 26 at the time. And that was absolutely mind-blowing.

DH: At the same time, as the crypto markets consolidated and contracted and all the excitement left, all the cool – cool is in my subjective term – cool people stayed behind. The people who actually weren't there for the price. They were there for the actual technology, they were there for the future, because they knew that there was something real.

DH: And also at the same time in my life just a bunch of unfortunate relationships [came to an end]. A lot of my old friends, my friend group, kind of died off, I had a bad breakup that had me down in the dumps. And I was discovering newfound friendships in the bear market. And so like while the bear market hurt my portfolio, I've made some of the best friends during 2018 and 2019. And it's really the litmus test of like, are you here in the bear market? Really made it easy to make friends because everyone was like, yeah, I'm here for the right reasons.

ML: That's really interesting. Were you in San Diego by this time?

DH: No, I came to San Diego post COVID.

ML: So where were you in this period?

DH: Seattle.

ML: I remember trying to get my book out, trying to get a book contract in late 2018. And then it happened in 2019 and things were like, you know, really down. I had been covering crypto since 2015 and saw the run-up and then this was the first kind of winter I'd seen. And I remember having some buyers’ remorse, like, Jesus. I just signed onto to write a book about Ethereum and it might be dead by the time this thing is published.

DH: It was a dark time.

ML: It was. I remember Ethereum being down around a hundred bucks for awhile. And then it took me a couple of weeks, but I realized like, no, this is a great story. And this history happened and no matter what, you know, that that's worth writing about. For people who didn't go through it, it seemed like everything kind of had just come to a complete stop. But as you know, that wasn't the case, people still had their heads down and were still just doing what they wanted to do.

DH: A lot of people didn't allow 2017, the mania, to impact them. They were heads down building and then similarly, they didn't allow 2018 and 2019 bear markets to hurt them. Everyone was worried about, ‘can we actually pay our developers?’ That was a concern, we literally might as an ecosystem run out of money.

DH: I think the biggest concern was, were we going to get co-opted before we could get the markets to turn around. Facebook came around and built its own Ethereum killer. Were the values that we uphold in Ethereum going to get rug pulled by somebody else coming in with Ethereum's value proposition, but some big company like Facebook or Google that are just stealing the limelight.

ML: What was the first defi project that really piqued your interest? And then you had mentioned that you don't like banks. I'm just curious if you had bad experiences or if it's more of a fiat-based criticism of monetary theory and inflation and things like that.

DH: I was always very politically motivated and idealistic as a kid. And like also went through the naive phase of wearing like a Che Guevara t shirt in middle school, right? Like I was kind of that guy. But I also was a big Bernie bro and I use the housing market and how the 2008 crisis impacted me like every other millennial who was actually paying attention.

ML: There's a bit of a put on the banking system too, that the government is always going to be there to bail them out.

DH: Sure. Yeah. And the corruption through and through which you know, is nicely juxtaposed by the first defi app that I used, which I think was the first defi app, which was Maker DAO. And before I started writing about Ethereum and thinking about Ethereum, because I was still learning about the Ethereum protocol. Something like Maker DAO as a DFI application was easier. It felt like a tutorial for a video game. It's actually easy to comprehend.

ML: Explain it for readers who are unfamiliar with it.

DH: It's simply a version of a bank that is now a piece of software on Ethereum. And so maybe not a commercial bank that people are used to, but a bank as in a place that you deposit collateral and then you can borrow funds. Asset liabilities, two columns and this was the first thing that had some real correlate that allowed people to think in defi terms. It's like, okay, we have our real world financial primitives. We're building them in defi and they look and feel different, but they are actually the same primitive. And this was the first mental exercise where people wrapped their heads around what it meant to have decentralized finance because decentralized finance wasn't even a term back then.

A recent Maker DAO blog post

ML: Another fascinating aspect here is the decentralized part. Anybody can walk into a bank and ask for a loan and the bank can say, no, but here, as long as you meet the protocol or you have the assets or the collateral, and you deposit it into a smart contract, you're going to get your loan. There's no censorship here.

DH: And during this phase, Maker DAO launched in December of 2017 and then got a lot of adoption throughout 2018. And during 2018 there was a ton of just like, I mean, there was a lot of FUD [as in, fear, uncertainty, doubt, a common crypto put down] about everything about crypto, right? Like it's fake. It's not real. There's nothing real there. It's all hot air. Ethereum is fake.

DH: Bitcoin maximalist who defined the Ethereum native narratives said nothing about Ethereum is useful. Actually using Maker DAO allowed me to grapple on to ‘I know this is real.’ I was able to deposit my Ether into Maker DAO, mint Dai (a stablecoin) based on those deposits, and send the value of the Dai to my bank account, right?

DH: At that point, I was like, this is real. How can you not say this is real when there's money, actual money in my bank account, which everyone else deems is real. It was something for me to latch onto. And so a lot of my early content production, my early writing all centered around understanding Maker DAO, understanding this new primitive and how it fits into the world.

ML: I would suggest even that taking one step back to the ICO craze, the initial coin offering craze. While it was full of scams it also was a decentralized way of raising capital, which had never been done before. So now you've got a peer-to-peer network that’s basically you’re tapping into your future users for the capital to build out your startup. That's one of the main functions of finance. How do I get capital? Who can help me get capital to start my business? Then you move on to collateralized lending, which is another huge aspect of the global financial world, like a trillion dollar market, overnight repos and everything like that. And then you take it another step forward and you can look like decentralized exchanges now that are kind of upending the idea of the New York Stock Exchange, that you need some big building in downtown Manhattan to trade your stocks. And so it's been fascinating to me as a financial reporter to watch all these pillars of finance get re-imagined in a decentralized kind of peer-to-peer way.

How can you not say this is real when there's money, actual money in my bank account?

ML: Okay, so we're in 2018 and you're pumping your bank account by putting ether into Maker DAO. How had your outlook on things changed? What do you remember feeling about the potential here? And did you feel like you were shouting into a void?

DH: No, not at all. There were more and more defi apps that came along. There was a growing amount of things to do. Uniswap came online. Shortly thereafter Maker DOA, Compound came online. And so it was fun diving into each one of these things and learning about each one in intimate detail.

DH: At the same time, there were a lot of people like me that were really thirsty for knowledge and thirsty for trying new things. And this is where a lot of people in the Ethereum community went from Reddit to Twitter. A lot of people came onto Twitter for the first time, including me and the Ethereum community started to really learn how to have a voice.

DH: It didn't feel like I was shouting into a void. It felt like I had found a community, which I was sharing knowledge with. And we collectively were shouting into a void. Like it was all of us shouting. No one was listening to us, but at least all of us, we were all watching and seeing the same thing. It was so nice that we all found each other because everyone else validates, like, no, I'm not crazy. And so, yeah, I know it was a community of people that were frustrated that no one was paying attention but finding that community was really important.

ML: Especially when it sounds like you were previously going through some tough personal times, it must have been nice to have that come back around.

DH: Totally. I joke that I kind of filled that void in my life with the people that I discovered in Ethereum, and it’s actually not a joke, it’s completely true. I used Ethereum and Ethereum content to distract myself and then I also used the Ethereum community to make friends who are the friends that I have now.

ML: I think we've both found over the years there are a lot of weird people, a lot of amazing people, a lot of really great people, really sincere good people, and that's what we're both out here trying to highlight.

ML: What did you think about NFTs when they first came around? Maybe was it Crypto Kitties that sort of first like tipped you off to this idea?

DH: Yeah. Crypto Kitties were the first NFT concepts that I remember running into. I never actually participated in Crypto Kitties

DH: I was really mostly focused on grabbing as much Ether as possible because I felt that it was very, very cheap. And so anything else was kind of a distraction.

source: Coindesk

ML: I think it was hard to get through to people that the thing that was a breakthrough here was digital scarcity. I think people just think it's a JPEG and it's still hard to this day to get that through to some people. So defi summer of 2020, like, was that like your Valhalla?

DH: It was when I started being very, very loud about crypto to all my normie friends. I kind of have my two lives, very cleanly divided. And you can categorize these things as my Twitter friends, which are my crypto friends, and my Instagram friends that are my college and young childhood friends. None of my Instagram friends are into crypto.

ML: You're probably most well-known for Bankless, the podcast. Can you tell me just a little bit about how that came about and, and what you hope to achieve through it?

DH: Bankless was actually my second podcast. POV Crypto came first and POV Crypto was me and an old college friend who was a big Bitcoiner and I was Ethereum. And so throughout the bear market, it was actually like one of the hotter podcasts throughout, throughout the 2018 bear market. And we were just having debates, friendly debates because we went to college, we could yell at each other and still be friends. So that was nice. And about like coming to terms with, like, why do people fall into these tribes? What are the different visions for each of these things? Just having the discussion about Bitcoin versus Ethereum. Cause that's really all that was left in the bear market just Bitcoin and just Ethereum. And then over time I was getting closer and closer to Ryan [Sean Adams,, the Bankless founder]. Just because we figured out that we actually had just shared a lot of ideas started engaging with each other on Twitter engaging with each other, more sharing DMs.

Crypto has made it impossible to ever be bored

— RYAN SΞAN ADAMS - rsa.eth 🦇🔊 (@RyanSAdams) October 27, 2021

DH: He would read my articles. I would read his articles at some point in time we just hopped into a zoom and tried it for an hour. Then he started, the Bankless newsletter. And after that got a decent amount of traction, I started DM-ing him. I was saying, ‘Ryan, you need to start the Bankless podcast.’ And I wasn't saying we should start or I should start. I was like, Ryan, you start it. You’re missing out on the whole podcast side of Bankless. And he was like, nah, I don't want to do it. He didn't really give me a reason. He's like, I'm not really interested. And at some point in time, like maybe the third or fourth time I DMed him, I was like, all right, Ryan, we'll do the Bankless podcast. You just show up, I'll edit and get it out. And that's what hooked him not having to do all of the lifting.

ML: I'm going to put you on the spot for a second. Who's been your favorite guest that you've had on the podcast?

DH: Ah, ha. Who’s been my favorite guest? My favorite podcast episode has been the crypto Renaissance with Josh Rosenthal. He was a fantastic guest, but I will reframe it in saying that that was my favorite episode.

ML: You guys then took the next step, I think, and created the Bankless DAO. Do you think that stems back to your interest in politics when you were younger and governance and engaging with a community and how decision-making kind of comes about?

DH: No, not necessarily. Before moving over to Bankless I was at this tokenized real estate company called Realty. And it was a startup with like grand visions of wanting to grow the company, the Silicon valley type stuff. And I was the COO for that. And just being in startup life and working with the founders, it just like turned me off towards that kind of like grinding, trying to build as big company as possible, like that kind of attitude. And Ryan shared that as well. We had this conversation about ‘what do we want?’ And both of us came to terms with like, well, neither of us are CEOs.

Tokens are like lenses. They allow people to focus their energies and attention

DH: We're not trying to take Bankless public. Instead we kind of just enjoy it as like this lifestyle business that has cash flows. At the same time people kept on DM-ing us. ‘Hey, I love what you guys do with Bankless, how can I help?’ Like, ‘let me know what I can do. I'll do it for free.’ And we were just getting swarmed with these requests. And so we had this movement, this brand, this ideology that really resonated with people yet we had these two founders who didn't really want to expand on it. So we thought that the DAO would be a very fitting way to grow like a corporation-size entity without making a corporation that Ryan and I had to be the CEOs of.

ML: You were really lucky you had your community already. That's one of the biggest challenges in a DAO is how to get the community either from the ground up or how to bring them into it.

ML: And then you've gone the route of giving tokens to people, right?. There's no sale involved, and there's not a monetary value ascribed. It seems like that's a smart way to go right now in the regulatory landscape.

DH: The whole goal was to form the community. Tokens are like lenses. They allow people to focus their energies and attention because the goals are set by the community and the visions of people are funneled through the token and the token points the attention by the desires of the community. And so a community without a token is like a chicken with its head cut off. It doesn't have its ability to focus. Selling the token would like creating a very foggy, unclear lens that wouldn’t work very well. If you want the vision to happen, you have to give it to them. You have to just like, all right, guys, here's the lens. You get it for free. Everyone gets it, like go focus on stuff.

ML: And then is the implication there, if a secondary market develops for that token, that's fine. But we really have nothing to do with it.

DH: The secondary market can be a focus of attention of the token holders if they want it to be right. It's one of those things. Secondary markets arise for almost anything in crypto these days. But, again, if a secondary market arises it's because that's what the token holders wanted.

ML: I find it fascinating that all of this stuff is being created and tried right in front of us, you know? So as I do at the end of these interviews, I ask my guests to recommend somebody that you admire in crypto can be anybody big or small that, that I should go try to talk to you next.

DH: Have you talked to Ameen Soleimani?

ML: I have not.

DH: So he was one of the guys, if not the main guy, that I credit two major things in Ethereum for. One, making DAOs cool again after the DAO (2016). He was the guy that was like, ‘well, I know that the DAO blew up and now the word DAO is tainted, but guys, DAOs are still cool.’ And so he made Moloch DAO, which really kick-started this revolution.

DH: And then he also really memed into existence this concept of Moloch, of human coordination failure. He did a great job illustrating what Ethereum does: Ethereum allows people to coordinate, and it allows people to coordinate hopefully in the most grand and large scale mechanisms possible. It's like, okay, there are problems out there that are bigger than nation states. Climate change, like nuclear Armageddon, like nation states can't solve this problem. They’ve proved that, so we need a coordination system that coordinates larger than the scales of nation states.

ML: David, thank you so much. It's been fascinating. I really appreciate it.