On-Chain Inflation Index

Full Conversation

Narrator: Welcome to the new season of the Digital Gold Podcast.

JP Barrick: This is season two, and I'm sitting here today with Stefan Bruss, the founder of Laguna Labs. Stefan, welcome to the show.

Stefan Rust: It's super excited to be here.

JP Barrick: I'm excited to launch it again, especially with you, man. It's a great story you have, and I'm excited to dive into it for everyone. So tell me more about Laguna Labs. How did you, when did you have the idea that we needed the products that you guys set out to build?

Stefan Rust: So it started off a while back, right? When COVID hit, government shut everything down, what are we going to do? How are we going to live with that? We'll print a lot of money, but it's not going to have any impact on anybody. No impact, no impact whatsoever. We can shut down all the economy. It's not going to have any impact, and we'll just print money anyway. And I just felt something's got to give, right? And ultimately it was inflation, right? And so I was also intrigued by Terra, the stablecoin that they launched. And so how can we build an inflation-protected stablecoin? And then ultimately provide more governance on chain as it relates to quantitative easing, quantitative tightening, and that there's a transparent, not curated, but immutable, visible, participatory, sort of way of supporting the economy and opportunities. And so you mentioned a way that couldn't be obstructed or manipulated, so you had to build your own data source, right? So we looked at how the data source is being aggregated. We noticed that it was more than 100 years old, right? So they built this back in 1920s. Wow. So it was like paper and pencil. Paper and pencil. And now they do the same surveys and they do it with iPads. That's the innovation. And so we just felt, let's take a developer mindset to do this. How do we aggregate some, I think we've sourced from 50 million different sources, 50 different sources. 18 million items that we track on a daily basis. 18 million items that you guys track all via programmatic, all programmatic, all on chain, visible for free to anybody that wants to go look at a dashboard. And you can see across 12 indexes at the moment, but we'll have about 50 in about a week's time. Wow. So these indexes, what are they? What everyday household goods? Household goods, rent, you know, is it rent that you're paying? Is it a mortgage you're paying? The prices of housing? Is it food? Is it food that you eat in at home and you cook, grocery store food? Or is it food you eat out at a restaurant, your utility bills, your, the cost of electricity, because ultimately that's influencing the amount you transport, right, your transportation costs. It's the cost of everything. The cost of everything, right? Electricity. I mean, we got these two building blocks of our lives and we don't realize how much the cost affects. Exactly, everyone. And that's, that's really just, we've just been focused on that and tried to identify all new sources. So just before I kind of, we started this podcast, I had a call with a entity out of Switzerland that are aggregating environmental data. Okay. And so they've hashed it all on the blockchain. And so we're working with them to put that and make that available to smart contract developers. So that smart contract developers then can build products, financial instruments that allow anybody to hedge themselves and protect their purchasing power. So what kind of environmental data you're talking about? Like is this temperature, is this humidity, or is this? So it's less climate data. So we have another partner that we're working with and we're not in that next week as well, where we're actually bringing to market climate data. So all temperature, about hyperbaric pressure, we're bringing historical weather data, floods, warnings, et cetera. So when you start bringing this data to the protocols, that means people can build markets on top of this data that then they can make synthetic purchases or decisions or bets effectively. Exactly. Okay. Exactly. And so if you look at the derivatives market worldwide, it's a quadrillion dollar size industry. You look at the commodities industry. It's another trillion, a couple of trillion dollars. I mean, we can't even fathom those numbers because they're so many different. But I mean, I think realistically, it's just, yeah, everybody's gonna be building off the back of this and we want to allow that creativity to flourish. To flourish. And I think that's one of the important things is you need to have the right data set to understand how you're being impacted by these decisions that are so far out, that are so abstract for most people. Like what does a quarter basis point rate increase look like? What does a one basis point rate mean to you? You have no way to correlate that to your data day life. So you guys are helping bridge the gap. Exactly. And we're not really doing that. So we're also allowing, we're building a personal calculator. Okay. So what is inflation to you? Because your spending might be different to my spending. Might be different to anybody else's spending, like mail spending or whatever, right? And so as a result, how do we deal with that, right? And how do we calculate inflation to me because I'm driving a lot of car, you know, oh man, I have a high cost of transportation. So the inflation to me is 12%, right? But somebody in the UK that's staying at home, working from home has to use air con during the day because it's so hot, heating in the winter at night, they're suffering 88% inflation on utility costs. So for them, inflation is going to be slightly higher. How do you aggregate that number? Do I stay, do I put that into my own spreadsheet? I can upload a CSV file. Do I use Mint to be able to track all my expenditure and my budget? I can import from Mint. Can I have it on MasterCard? I see all my MasterCard expenditure and import that and it then calculates my personal inflation. And that's also going to be for free, is anybody can... That's an amazing tool. Because that's one of the things I think is in part of inflation. How does it affect me versus how does it affect you? As you mentioned, electricity in the UK is going crazy. So that is, that's such a cool tool. So what are the numbers you guys are seeing at your inflation versus the numbers that are being reported or the numbers that have been reported? Is it a small difference? Is it magnitudes of a difference or is it pretty similar? No, I mean, we had a magnitude, a much bigger difference earlier on and it seems to be plateauing at sort of a level of eight to nine percent. We're reporting nine percent on true inflation for the US and the government's reporting eight point two percent. And so there is a bit of a discrepancy about by one percent but it was greater earlier on. We were in double digit, we had recorded double digit inflation at the peak. Wow, up to 13 percent. We were just shy of 13 percent inflation. And so when you're calculating the number and also the government is like a six months of like lagging data, is there like a, is there a string to it or is it just today the present moment? Like how does that work?

Stefan Rust: Yeah, so we, we do it on a daily basis. We can't get it right now to have it real time. We want to get it to real time. But in order to do real time, we need to have more predictive capabilities in terms of taking into account future pricing of specific commodities. And that will then ultimately also then have an impact on today's prices that we experience. Yeah. But we do it on a daily basis. In contrast, the government is about 30 days late. So we're 30 times faster than the existing reporting mechanism. And do you guys only do an US dollar inflation or is there other currencies or jobs? Yeah. So people have asked us. So we listen to the community and what they ask us. So they asked us to then go to the UK. So we launched inflation calculator for the UK. Okay. And we let it's the same architecture that we have. And so that was very easy. We're now getting asked to have it in different denominations. So we at the past or so far today, still only do US dollar denomination. And we're looking to sort of see what other, we've been actually been asked, can you put it in BTC and ETH terms, right? Ooh. So I can then see how it rags against that. And so we want to then have a widget that we can then add that you can have it's compare versus Bitcoin versus ETH. And then you can then actually US dollar and see what inflation looks like. I think this idea that we changed the base denominator currency is completely new over the next, it has 20 years like, okay, you know, first year the fourth currency is dollar, sterling, euro. But now it's like, oh, wait, you can add any asset. I mean, they're really, or any type of currency in the Bitcoin, Ethereum. So that's huge for the future. Let's see. So we mentioned, you talked about personalizing inflation data. What type of actions can someone take when they have that personalized information? Let's hear about that. Yeah, so how do I hedge myself, right? If I know I'm experiencing a 10% inflation, how do I hedge myself against that? What do I do? And those are questions that we're now trying to identify products associated with that. And that's what we do at Laguna Labs. We're building and we specialize in tools and protocols that enable inflation protection, inflation-proof economic opportunities, right? And so what do they look like? Now that we know what inflation is, or trueflation, then how do we now build these products? One of the products that we first launched was is a flat coin. Okay. And a flat coin is a stable coin pegged to inflation. Okay. So it actually moves US dollar plus minus inflation, minus when we have deflation, plus when we have inflation. So it sways both ways and it's just that it stays flat to a basket of items that you purchase on a regular basis. So it could some, is it the dollar, like is it a basket of items for the whole world, with the whole US or is it for the stable coin, I guess? Or is it a basket of items per individual? At the moment, it's a basket of items for the US. For the US. So we've just got it for the US. We don't have it for individual yet. So what we're doing is, I mean, we've been on this journey, we've launched the product about maybe five months ago in the level of maturity. We had an MPP, which was people could play around with, we were getting market feedback, and giving independent developers the ability to practice and tell us how to improve it, so that they could get a bit of an advantage of build products ahead of others. We have 40 companies and developers building on top of the trueflation data today. We're able to talk further about what these companies are building on top of your platform, any really cool use cases that you're like, holy crap. Yeah, super cool use cases. I mean, you can always expect, right? So they're building prediction markets, right? So people can gamble on what the inflation is gonna be. So like you could gamble on what their coffee's gonna cost in the future? Yes, yes. So they've taken all the stuff. We don't have coffee right now. We will have the coffee index up there, but you have already, you know, they built out, you know, the cost of food. What's food index? How's that gonna change? And then there's a company in Latin America, they built a lottery ticket. So you're buying lottery, and in the form of an NFT, a dynamic NFT, you're buying a lottery that then shifts based on trueflation data. And at a cutoff time, that data counts, and then you win or you lose, right? So interesting. So they're actually the lottery prize. Yes. It's worth more or less because of inflation. This is opening up a whole nother world, before you weren't able to speculate on inflation. It was like, this is what it is. You can't really stockpile a bunch of food and gas and hold it for five years from now. But you've effectively opened up these financial markets, which are tools we have, you know, derivative markets to hedge coin production for farmers. And you're saying, why don't we hedge the product, our consumption of anything? And when that realization or on that journey, how is that shift, how is that change? Like as you join in, or you jump in this inflation kind of like conversation more, what are you learning about this massive force on people that, you know, we really don't know the full implications. So it has an impact to everybody, right? And now that we're actually aggregating all these different components that all add up to the CBI, and are leading indicators to the CBI, we get a feel for what the sentiment is, but also we get the feel for what the price of oil is today. And if I can create a flat coin based on the price of oil, can we, based on the CPI basket, can I create a flat coin to oil, corn, to sugar, to coffee? So I can buy today a coffee at coffee's price. And I know in a year's time when I really want that coffee, I can actually buy that coffee at today's price, at the same price. I know I'll always get a basket or a bushel of wheat, or I don't know what the terms are, the measurement, but I will always be able to buy that same amount today. So it's ultimately the hedge for anybody, and it's available to everybody, right? Not only airlines that can hedge against oil and have huge treasuries for that. All of a sudden, we've democratized that and made that available to every farmer, every coffee drinker, you know, that we want to find individual. And so the process is that you believe that the price of, let's say, coffee is going to go up in the future or food, your food basket. So you're going to put dollars into a stable coin today to protect against that basket from degrading. Can you use those dollars in any way while they're in the protocol, or do they have to sit there as the liquidity? How is that? Are you guys working on features for that? Yeah, we'll be working on features for that. We don't have those yet today, but I mean, ultimately, you'll be able to trade off that. Okay. We want to get to a point where you can then actually go and spend that in a payment network somehow. Okay. So, I mean, ultimately, this is a journey where we're in the marathon, right? Yes. But I mean, if you think about it, we came, we got into Bitcoin really early. We're very lucky to do that. And if you look at it, you know, what's it now in 12, 13 years? Yes. You know, and we now have, you know, the Federal Reserve Chairman go up there and saying that cryptocurrencies are influencing their decision-making policies, right? That's huge. And that's huge in the kind of course of 10 years, right? So that goal of separating state money is something that is still, I believe, core, an objective of what we should be achieving. I 100% agree. We got to, that's the biggest invention that Bitcoin came and brought to the world. So the question I have to do is electrification. Electricity is what backs Bitcoin in my mind. How does that compare to the advancements in Web3 and what you're seeing there? How are those similar? So... Or they just two massive forces that have been introduced to the world that are going to change everything we know. So my view, Web3 is just a marketing ploy, right? It's a new cool name to shrink-rack all of this stuff that's going on in the blockchain, from cryptocurrencies to blockchain, to the technology, the coins, and to smart contracts. It's just we call it blanket Web3. Blanket Web3, I like it. And it's a new name, right? So it's fresh and people are, it's politically correct to talk about Web3, but if you talk about cryptocurrencies, ooh, one of the regulations or something like that. I'm sure. It's like a Bitcoin energy usage. It's like, chill, it's okay. And I think what a lot of people don't understand is that from the energy, I mean, electricity is the core of what drives the economy. Every economy needs electricity. And if you look, I mean, there's even a book that came out, somebody wrote about it about the right, when the rising tigers in Asia grew, they had air economics. It wasn't economics, it was air economics. Why? Because they built enough electricity supply to maintain cooling in all of their office buildings across Singapore, Hong Kong, et cetera. So that people could work in dire heat and humidity whilst and be productive still, without being able to see us done so hard, I can't work anymore. And in Austin, same thing, right? We've got enough air con to be able to work in an environment that we don't need to be out in the dry heat versus the humid heat. And these problems, effectively, mean, these solutions are gonna make humans way more valuable, but productive. Productive, exactly. And like, better off overall. So Web3, how is it gonna make us better? And I think proof of work has a bad, you know, I mean, the institutions have created a bad reputation for something that is hyper-efficient. And what people don't realize is that every builder in the proof of work industry has to bring down their electricity costs. All they want is. It's all about efficiency. And it's how can I bring that down? And you're tapping in, it's actually an electro-dollar, right? I mean, it's really... It's what they call it, exactly. It's really bad. And then the shift to proof of work, I mean, we just, from proof of work to proof of state, that, for example, Ethereum had just done. Yeah. You know, they claim that it brought down worldwide energy supply by 0.2%. Which is a huge number. I don't know what energy supply is worldwide, but I'm sure you go to that. That's Cambridge has a cool website, where you can go and see how much worldwide supply is. And so they brought that down. But then, you know, the same people that complained about the electricity consumption in a proof of work network, you know, complain about, oh, now it's security. Now you can't have that, right? So yeah. And as you see, it was like, because their Ethereum nodes are all in the US now, we're secure. So we're going, well, the security. Why is it a security? Because all of a sudden, it's supposedly deflationary. And because they're supposed to be burning more coins than they are minting new coins. Yep. And if you actually go, there's a website called ultrastable.money. Yep. And you can actually see how much they're burning and how much they're minting. And in fact, they're not burning. And it's not deflationary. It's still inflationary. Just at a much lower rate than if it were a proof of work network. No, I think thinking the proof of work networks are, like you said, the electrode dollar is what Bitcoin gives it its value. Definitely. And it's interesting, because we're seeing that these energy companies, they don't actually want to mind Bitcoin. And then when you think about it, they don't want to use their own energy companies. They don't want to use their own energy on my Bitcoin because of the potential PR, the bad press of using energy to mind Bitcoin. And like you're multinational conglomerates, but you don't see the value of this energy dollar yet. And so it's going to take more years for that trend. It's a change in education. Yeah. But they have a lot of wastage throughout the production, the transmission. Yep. The extraction, sorry. And then the transmission and then the generation. Well, then that's the problem. There's this one group came in and they said, hey, we have a coal plant. We can't meet demand at the grid. So we can't get the coal plant started fast enough. So we can actually be that last reserved to make sure the grid doesn't go in the blackout or brown, because the coal plant's not running to full capacity. But if they had a Bitcoin miner, it already got running to full capacity, then they could automatically put the power on the grid. But that right there might even be two conf, you know, not a confine to a commercial. And controversial. Exactly. So it's like little things like that. Like even utilizing the energy resources. And is that because they have institutional investors? Are they publicly listed companies? They're publicly listed, but it might be institutional investors. It could be the public about, oh, you're mining Bitcoin. Like that's used as energy. We have this false assumption of society. I think it probably plays into the true inflation next. Well, is that there's not enough energy in the world. There's not enough goods in the world. And we were talking about how earlier, how someone could, you know, how we could use the tools that you guys are building to really extend the, let's say the ability for the world to grow above 70 billion people. What is like, what do you see, what is holding us back from like economic growth, economic prosperity for all? Is it just massive policies? I mean, that's a hard question to answer. It's like, what do you see holding us back the most? Incumbents. Incumbents. Incumbents. These are the incumbents today. And then coming back, one of the ideas that I have is to why they're so reluctant to use and run up in capacity using Bitcoin mining, is because if they did that, that would not comply with ESG criteria under which all these big institutional funds, these legacy incumbent funds, can invest into their stock. And so as a result, they're worried that their stock will go down. They won't have that many shareholders interested in their stock because they've done something that does not comply to this checklist that was put in place by these incumbents. And that's been a big push over the past six, seven years. Like ESG was in a thing in 2010. No. No. As much as it is today, right? It's taken everything, you know, by, by, and the funny thing is Tesla doesn't fit into the ESG criteria. But Shell, BP, you know, all these big Exxon, you know, all of these big oil companies, they're OK. They comply. Yeah. So I don't understand that checklist. It just doesn't compute. It doesn't make any sense. The biggest electric car maker. So we talked about, we're talking about Winfrey. How did you get into Winfrey? Like, in your Bitcoin or? Do you just hear the long, the whole journey? Or was there a Ha-Moulin for you? No, I mean, smart contracts was the Ha-Moulin, right? The fact that I could put more governance on chain and have the chain provide a consensus for smart contracts, to me, for that governance, that was awesome. That was really the aha moment. The real estate. Yeah, the real estate. I mean, I really got into Bitcoin because I loved the peer-to-peer electronic cash system. That's what I loved about it. I could pay. I could send money around the world to anybody I wanted to that had a Bitcoin wallet. And if they didn't have one, I got them to get one. Yeah. Here's everyone. And yeah, and the fact that you could do that seamlessly, instantaneously, at no fees, just that, to me, was just awe-inspiring, right? And it changed how we do commerce. It changed how we think about the world. And so now, Web3 is changing how we move, how we get consensus, and how we run programs on chain. So trueflation, how much of that is what is the data all on chain? Like, how do you guys collect, making these data pools for data sources? So we're not fully decentralized yet, but we're putting it all on chain. And every, it's all hash. Every day, the numbers are all hash, so everybody can go and check it, and it can't get it all to rate it and change. And that's huge. That's the first step, right? We know how the CPI is. We know it's calculated. We know it's weights, right? But we don't know the data behind the weight, or if they're cherry-picking data. You don't even know the weights. You don't know the allocations. Specifically, they really, and it's all curated, right? You don't see, transparently, how they come to those calculations. And so we've tried to make it extremely visible for anybody to see. Visualization is really important. I think a lot of people look with their eyes versus reading in spreadsheets. And so that was just a big set of feedback that we got. And the fact that we're actually aggregating 18 million price items and tracking that versus the 60,000 that other institutions, so there's a million that has to be seen. So one of the things I've heard about. We have multiple price points for a lot of those 18 million items. And what do you mean, like different types of price points? So like one item of one vendors this much, this vendor might be this much. Exactly. So one of the things I've heard is that inflation historically has been low because technology is advancing and the price of televisions are going down. How is that affecting your index? Or how did you guys take that into consideration? Is that, what does that mean for people looking at inflation? If you're waiting a TV, then you only buy one every five years. If you're waiting that, oh, if we buy a TV every year, or a new laptop every year, obviously it's getting cheaper. Like how do you deal with that? So, I mean, we built that into the equation. We then have a data team that go and look at the waiting. And where we're getting to is within the next three to six months, will that be exposing all of that waiting and allowing token holders to then allocate and vote and help us structure the waiting. At the moment, we're working with bigger institutions. We're working with Penn States to help us with the real estate allocation and how we wait with property and how come how we get to a better algorithm that then computes what is the price change across the US for residential, commercial, and estate, things like that. So that is huge. You guys are working with multiple partners to get all this data. I mean, how do you keep up with it? You've got a stable point, you've got a true place. I'm like, come on. We're about 50 people across the Google Labs at the moment. So the true place in teams, about 12 people, the new on team, the flatcoin is also about the same. And then we've got people working on other projects as well that will be coming out soon. But I mean, I found that the other thing actually is the bigger an organization, the less effective it becomes. Because if you're more than eight people at a table, at a conference, or at a diner, didn't dictate that, you can then just be silent or not contribute. Or if you're at one of the action items at this meeting, if your eight people is still pretty productive, if you don't come with a result at the next meeting, I couldn't deliver that. And that impacts me. And we know each other personally because we're still eight people around a table. And that then has a bigger impact. And so how do we deal with that? And so how do you build scalable teams? And to me, it's clusters of teams. Unique clusters. Because if you get too big, you get ineffective. You don't move fast anymore. And people can be like, ah, it's not worth my time. And not worth it. Oh, jack will do it. I won't do it. I'll do it. It's like somebody else will opt sick. I'll just won't tell anybody. And I can push it out another week or something. Whereas in the startup world, you can't afford to do that. Or in rapidly innovating economies, you can't do that anymore. And the event, I mean, a couple of things, right? You mentioned technology. Technology is the savior of inflation. If we would have had technology, so if we don't have innovation, we would have much higher inflation. Yep. Cost of everything. Cost of everything would be much higher. The other thing that brought down inflation is the global economy, right? Globalization has helped bring down cost. Because ultimately, we can leverage more efficient manufacturing of one spot, more distribution of another spot, the sourcing of raw materials from another area. And we could leverage that bringing up economies of scale that allowed us to produce 100,000 TVs at a much slower unit cost so that we could all have better TVs. And I increased the rate of how many TVs we buy and ultimately lead in more trash. But we're recycling those TVs now, too, right? So there's a lot of raw materials inside the television, inside a mobile phone that are being recycled. And we use. And we reuse, right? The life scene, the supply chain is coming. I think when you said the globalization is key. I mean, that's what has led us on this 20-year journey of lower prices, lower costs. And now we've hit the wall of QE. And now it's showing us the poison to that pill effectively and cheap money for everyone. So this dollar-based coin, I want to go back to the stable coin you guys working on. What's the name of it? No one. No one. It's a nuanced stable coin. And I'm talking to me more about use cases of the stable coin today. And then also any type of regulation that might be affecting you guys in the future, what you're seeing. Because it's allowed space right now.

Stefan Rust: Yeah, I mean, so look at how money has been distributed. It's always centralized. You have a centralized institution that prints the money and distributes the money through large, centralized, incumbent organizations, private institutions, that then try to redistribute it to other smaller institutions that then are supposedly going to give incentive structures to drive adoption of this money into the marketplace. And they're making investments. And that's like the funds. And they're supposed to hire people, or even seeing with Goodwill, they got $20 million for a senior citizen working program and skill program. It's like, so the government's getting Goodwill money to hire senior citizens. Why don't you get the money straight to them and how they can enjoy their lives. And I guess how many people along the stages keep a portion of it, right? So everybody gets, and the month goes from trillions of dollars to the first layer, then get a percentage of that. Then it goes to billions, and then it goes to millions, and then it goes to 1,000, 100,000, 10,000. So every time there's a percentage that goes along the way. But of course, the defined institutions that get the trillions are much smaller community and are ultimately a key thing and have. That's why, if you go to every city center, you look at what all the logos on top of the buildings in any downtown city center. They're all banks. They're all accountants, or they're all lawyers. And the accountants are working for the banks. Yeah, the lawyers are also working for the banks. And so these are all downtown in every location. Those are the prime real estate owners. So it's a bit funny how that happens. I don't know. The closer you are, the more money you get, the easier it is. And you set them, the more work you have. If you're a lawyer, you'll link $600 an hour. I got a new, it's a great example. This is the IRA. It comes out, makes renewables way more worth way more. That means every renewable law firm's going to make money, more money. Every accounting firm is working on doing the most good new, more money. All the new companies have all these new projects that no one needed the energy before. It's not lowering any minimum cup, but it's now it's like, hey, here's another $800 million. It's like on a taxpayer. It's just $800 million out of the QE rate. What happened? How much of that $800 billion is going into building solar panels, building wind farms, building water, general hydro plants, or whatever it is that we need to meet the demand of energy requirements in a population, or nuclear power plants is now accepted as energy renewables as well. So it should be. It's the best energy we have. But then if we don't build that infrastructure, we're not going to be able to make a system. It's a system. It's going to be lawyers and accountants, and institutions, and consultants, and analysts that are going to tell us, oh, we should build one. We should. We should. We should have a nuclear power plant. You can pay me. Oh, we can't get the regulations. So one of the things that I've seen with financial education is that most people that are in the lower, like poorer, in the lower middle class is because of the they don't understand the forces that are at play. Like they are able to make buy with a salary of, let's say, $50,000, $60,000, which is a great salary even today. How do you educate this group of individuals about the true wealth destruction that inflation has? Because when you think about 8%, it's like, oh, that's a pretty low number. What we don't realize is humans may have really or hard understand. 8% compounding is huge. So what are you seeing with education from? I mean, truthfully, is, I feel like the core product will answer that. And that's why we wanted to do the personal calculator. Will people spend the time to track all of their expenses? How many people actually track their expenditure, number one? How many people? So OK, let's say we now have tools to do that, right? The credit card company provides a breakdown, mints provides a breakdown. How many people that use those tools as well, right? So how can we make it easier and easier to visualize what it actually means to you, and what inflation, how inflation impacts you personally, and what you can do against that? I mean, that's ultimately one of the dashboards we wanted to create. It does require efforts. So people need to invest the time to do so. And if you've got two or three jobs at the same time, it gets really difficult, right? Yeah. Well, it's also, you don't prioritize it, because you don't realize either how it's affecting you or how you could do anything about it. But one thing I found was, I also think there's a role that our educational institutions need to take on. Educate at a much earlier level how if I show a visa card, should I go to a bank and borrow or get a credit to buy a card? Or do I use it on my credit card? Or do I buy a card off my credit card? What is, and how do I calculate? Well, how do I compare? How do I build? What tools are available to do that comparison? I think that would be super helpful. I mean, mortgage. How do you get the best mortgage? How do you count one of the different types of mortgages that you have? Things like that, then a streamline versus going to a loan chart, paying 20% a month, or having an hourly credit card, having 20% 30% a month, right? And who has your best interest in mind? The reality is, is that you don't know as a consumer, you're just, OK, I have my credit card. I might not be able to pay it off this month. Well, I get hit 15% interest. Well, there's another guy down the street, the offer you 10% of this guy know who he is and talk to. Exactly. That's sort of critical mindset. Or I don't know, that we need to educate at high school levels, right? I mean, that can't come at a college level. I mean, you have just earlier that we could, in real world practical examples versus, you know, how does that impact work? So maths, you learn maths around examples. What would it take? That's the mathematics you need to do. Yeah, the real world examples. When you're a math class, you should be figuring out how to use this math to determine your cost of goods or how to get a mortgage. That's all things you can determine. It's all math. It's all math. It's like, what's the price per square foot in this world? Why not correlated to real world purchase decisions? Exactly. So with Lugon Lab, you guys raised money. Let's talk about that journey. Can you explain to me when you started, like how a process was, how many pitches you had to do, people thinking you're crazy, or people were like, I love this idea. Talk through that, because I think it's something that, when we're talking about financial freedom, financial education, raising capital to build a business is one of the, I think, the best things you can do to build wealth. So how is that process for you? It's not easy, well, that's for sure. Nobody believes in the beginning. Everybody's super skeptical, and you need to overcome that. I mean, I had the advantage that for Lugona Labs, when we launched that we had a good team, I had a track record, and I had a lot of experience in being able to prove that I have executions capability. What investors generally look for is they all invest in the team. So it's the people that matter, you matter, if you're going out and raising money. So how do you bring across the energy you have, the passion you have, to sustain and hold through really tough times that you will go through. The 50,000 knows you'll get before you get a yes, right? The skepticism. Everybody's got advice. They tell, oh, everybody tells you how to do this better and that better. But when you're actually, you're the person in the arena, you're the one finding the bull. The bull's going to come out at you, and they might have some other change move to the left. It's like, the bull's coming at me. If I move to the left, there's a big stone there. You need to be the one in charge of restoring it. Exactly. And because people, like you said, they'll say, no, no, no, no. But it's like, you believe this so strongly. So I guess, what is that belief for you in Lugona Labs? That's your inflation. Why do you do what you do? Because I just want to protect people's purchasing power. That's my mission. I believe global economic trade is going to create a happier planet. Because with exchange of goods and services for a certain value drives interaction. Interaction creates communication. Communication creates a better understanding for both parties. A better understanding of the both parties creates a much more consensus-driven environment versus a conflict-oriented environment. And that's what I want to get back to. And I believe the blockchain and what we're doing in Lugona Labs, putting more governance as it relates to economic benefits to everybody, is the way to go about it. Oh, 100%. It's the granular approach, but also has the macro in it. Exactly. And it's what, like you said, these forces that affect us that we don't really know yet. Blockchain is going to help us quantify that. Exactly. I will put so much more. It's going to go onto the blockchain. We have no idea today. I mean, I wrote a white paper way, right? I think it 20, 23 years ago about how we can tokenize the planet. OK. Tell me what that is. So can we tokenize the carbon credits? Can we tokenize the carbon? If you plant a mangrove tree, mangrove trees have been verifying scientifically proven to be a great absorption of carbon dioxide. And so, OK. If you plant one, should you get over the life cycle of that carbon tree? Should you get the life cycle of that mangrove tree? Should you get how do you quantify that? What are some examples? How could you build a marketplace around that? And so build a whole ecosystem around that. Anyway. So the thought process here is that, why do we let the big guys get the carbon credits and build their carbon separation plants? Why doesn't everyone have the same ability to, you know, when they keep, that's their job. They're going to find mango trees. And the reason why you wouldn't do that for a job, per se, is because you don't have the credits, the government credits, or the system in place. But the reality is, it's in place at the financial institution level, but it's not in place at the individual level. So they're forced to go work for another massive institution. And so you look at that industry. There are four or five companies that really matter. And the only ones allowed to verify and certify that you have planted that mangrove tree. And that mangrove tree is doing 10 carbon credits a day, or a year, or whatever it is. And of course, they're big consultants. They're approved by the big institutions, or governments, if you will. And ultimately, you need to pay them gazillions of dollars to come and verify you and I can't afford. Yeah, for that tree tree that we have at home, that we planted to do goods, right? It's not worth it. It doesn't work. So how can you democratize that or consumerize that and make that available to anybody? My bring all this data on chain that were allowed to be authenticated, validated at any moment. And then allow people to take action in incentives. Incentive structures are huge. And that's, I think, what is doing this change in the web three and with crypto is we now have the ability to control incentives. At the very, we all wake up in the morning and we have this plan of action all because we set these incentives up for us of what we're wanting to do and how we're going to spend our time. Actually, in a good example of I've directed two consumers are things like, you know, you call them city, but they are a very clear, experiential manifestation of the incentive program. It's like sweat coin or a second, right? Where I walk, I walk to work, I earn coins because it's my step, my step, my step, I do. So there are all these new ideas that all of a sudden with the phone, you can now earn money without doing anything, right? And yeah, by doing your day to day, by just doing your day to day, how can we gamify more of what we do on a day to day basis? And then it comes down to what is society value, like value creation and then how do we incentivize them? Like we value planning, anger and truth, versus walking. Walking, walking. So this is a beautiful market. So what are the problems with this case, like holding it back? We have three in general or a lagoon allows what constraints you guys see in the marketplace. So it's the resistance to new resistance to innovation. I think full stop, if I would summarize it, that would be it. And the reason I see that is we have today people running the world that have been in their roles for decades and decades and decades and decades, right? So five, six decades run, they're still in charge. They have not been entrepreneurs themselves. They have, you know, not really, you know, by attrition, they've worked their way to get to where they're at, just because they stood around and hung around while longest. And they're the ones deciding on how, and of course they don't want change because they're not a professional one. And they all went to the same schools, by the way. They all went and worked at the same departments or the same offices and the same industries. So they're all together. And so they don't want change. Because it's changed to them doesn't bring any immediate. What's the benefit? And if it's changed, that means I have to work more, I have to understand something new. I don't like lose my job. I think myself also needs. And so that to me is something we really drastically need to change quick. Because we can't become complacent. We need to innovate because otherwise somebody else on the planet will do so. We'll do so. We'll bring more jobs and scaling. When it comes to developers, how are the, how is that availability and all the developers in the world will have three developers? I mean, they're hard to come by. So what can we, what are you seeing like in programs to make more web-free developers? What are you guys doing or seeing in the development world? So a couple of things. One is there are about 26 million developers worldwide. About 18,000 of them are active on a monthly basis in web-free. So that's less than a percent. So there's a big portion. And we're really building out the Guna Labs to attract developers and come up with economic models that incentivize developers to provide value to a blockchain instead of just building, building on the blockchain and getting a grant and running away and doing something else. So how do we do that? And so how do we incentivize developers? And where do we go to find developers that are interested in writing programming, right? So development, software development is complex, right? A lot of people think, no one's just easy. Just build that, right? It's like, yeah, I see no one's just works. I mean, it just works, right? What programming language do I need? What tool sets do I use? Does it have a database? What's the load that I need to manage and maintain the input output associated with that app, the process? So all of those things you need to make decisions on as a software engineer. And there's a reason why they're called engineers, meaning that's why. It's like you build a building. I need to know how many water pipes do I need? What's the toilet ratio to capital? What's the aircon air ducts I need to manage the flow of air? They're solving really technical problems that if you don't solve in the application, it makes it unusable, that space. Those are infrastructural problems, right? And that needs to be solved. And so anyway, where do you go for those? And how do you attract them into the Web3? And the advantage that we have in Web3 is there's innovation happening, and there's creative freedom that these developers can exercise without the framework of legal restrictions, regulatory impediments, right? Lawyers, product managers, marketing guys that are shouting down their neck to get this down going and build this and to build this widget and only incrementally improve it. I don't want to change anything, just improve it incrementally, right? Now, don't change my business model, yeah. They have always developed, perhaps 70,000 need to ask people, they hire them not because they need to do products they're working on cool things, because hey, your job as developers you just always make little changes. And what that means is that you're incentivized to make new changes, to minimize to optimize old systems or to maintain all systems. And I think that's a lot of what happens in the developer, but it's like, how do we build core systems that we can affect people's lives? And

Stefan Rust: I think the software is coming, that point in truth relation is one of those tools where it's like, this can really affect the lives of millions of people, because it's fundamentally different than one else, whatever, everything else that's out there and it's verifiable and trustable. And I think you go, I mean, the innovator's dilemma, a book comes to mind, right? So you look at that and I think every tech company or every company that starts up is the innovator. And then you grow to a certain size and then you run the dilemma. If I change too much now, I change my business model, right? And if I change my business model, then ooh, that could impact my investors who are gonna be worried about going back into a new business, right? And so it's definitely a dilemma. And tech companies have been going through that all the time, right? I mean, we've seen a huge transition between all the tech companies. And if you don't innovate, you die, right? You experience that. There's no government bailouts. There's no, you know, you die, you crash and burn and that's the way it goes, right? And that's how it seems to be for everyone in the market, whose small business, you know, when it comes to larger guys, it's almost like the two big to fail. Exactly. And they're the ones that get the bail out. But then, either way, we progress on that. But I think one thing that to me is that, as an innovator, you have to get distribution faster than the incumbents get innovation. Distribution faster than the incumbents get innovation. Exactly. Because the incumbents already have the distribution. Yep. And if they understand how to innovate and then get the distribution, so the incumbents are gonna do everything in their power to slow down any kind of innovation that might threaten their distribution mechanism. Or versus adopt it. And I've been involved in a lot of different, I mean, I've got involved very early on in the mobile industry. And I remember mobile app developers were the disruptors, right? It was like trying to build apps on the phone, right? This was when Nokia was trying to sell, you know, phones that could have play music and have your credit cards and your phone. Really? Nokia had all of that. But then they lost that ability to convert that into reality, right? Because they weren't able to build the user experience that we now use today, which is a full screen. And so everyone was like, yeah, this is cool, but it's not connected. Because they started shifting from an engineering based organization into a more structured financial, analytically driven marketing orientation, organization. And so as a result, what's the spreadsheet? What's the ROI of that innovation of building a flat screen? Yeah. And I'm gonna base the ROI based on the historic, based on the pattern of our traditional phone. I can then calculate that if you're doing a flat screen for, oh, we launched that two years ago and nothing worked. And so if we take the trajectory that we've got now versus actually taking a fresh look and let's try and get something new into market. And I think that's the innovator's dilemma that really happened. So again, it also comes down to how big are you? How do you stay nimble? How do you stay focused? How do you have customer feedback and incorporate that into the product development cycle? And your product used to be amazing. Yes. And I think as it comes into your product is the status quo, what's the de facto? It's not the best, it's not in this world. Someone has a new product, the tech guy, they have to be 10 times better. Or 30 times faster than the government collecting the state up for truthless check. But nobody appreciates tech companies that deal with this all the time. And so how do they go about doing it? They generally do acquisitions. So they let small, innovative companies blossom. Google bought YouTube for a billion dollars. I mean, think of that. I mean, everybody thought they were crazy, right? And they had all these lawsuits that's cleaned it up and they made it now today. But they saw something at the time that nobody else saw. Facebook, bought Instagram. They bought WhatsApp. 2018 billion dollars they paid for WhatsApp. 50 employees, everybody thought they were crazy. But look at WhatsApp now, it's the worldwide messaging platform for everybody, right? And it's mobile. But at the time, everybody on Facebook was crazy. But they saw something that nobody else saw. Instagram is just a picture, you know, it's just a place that's share pictures. And now it's part of their feed, it's part of their product. And then everybody criticized them, oh, now they're too powerful, right? Adobe just bought Figma. Yeah, why are they buying Figma? Because everybody's moving away from that Photoshop framework and nobody's using their cloud service. So everybody's using Figma though. Why are they using Figma? Because we need it in websites. Websites are more important than PowerPoint presentations. Exactly. That's what the real developers are. Exactly. So making the tool set that the future is using. How do you guys look, Blue Knob Labs, you're building two tools for people. How do you view that experience being 10 hours better? Like what, I guess, how do you think about making the experience? It hasn't been 10x better, right? And so we felt that with Truflation, we can already do it 30 times faster. We're already doing it, you know, a million times better because we've got 18 million data point items that we track versus the 60,000 that other institutions track. And so we felt that that's definitely a 10x improvement. And we felt that not many people have tackled that problem. Right. And so we looked at that angle, right? And we had a lot of difficulty coming back to the investor story, convincing investors that this was a more, what you've looked, how are you going to charge people? Right. Still people ask us that question all the time. Yeah. It's like our mode is the big, you know, how did Google build a mode? They started off, you know, with aggregating more websites and crawling more and more websites. And anyone else said anyone else. And so our view was, how do we make a great user experience with the data that we're aggregating? And we had to convince a lot of investors, right? This is core tech. I need core tech, right? What do you mean by core tech though? So they mean sort of, okay, what's the core underlying algorithms that you're going to be building that's going to be unique to your service if you don't open source that? Yeah. What is the infrastructure that you're going to be building in terms of hardware aggregation, software components that are going to plug into those hardware and build a new database on the blockchain, for example, right? But then you know, at least that this investor is not the right investor for you. So you then go and find who and which investor suits you. But if you have a clear vision, you're not going to know some investors will like what you're doing. And it's latching onto that because those people that you can then brainstorm with evolve your product, they'll give you constructive feedback. They'll have faith in you as you go down this path. I think that's the most important thing. Is that clear vision as an entrepreneur, as if someone raising money, anyone, if you don't want to clear a story and vision, I was like, well, you don't know what you're doing either. We're out of Israel, our emperors with no clothes on, and we don't know what we're doing. But you have to be able to have that understanding of, I'm going to wake up every day. I'm going to leave my team to this success, and I'm going to execute. And I have that before, I'm going to continue doing the future. Exactly. That's why you should give me capital. Exactly. And it's all about the guys that give you the money, they're capital allocators. Yep. And so they look for where they can get a return on their capital. Adventure is high risk. So they know that I'm going to make some bets, but they're risking and they're betting on the people. You think when they're making a bet, they're more betting on the people. And they are the technology or the idea, or I guess, you know, it still goes together. I think they go together, yeah. But I mean, it's can the people execute on the idea and the technology, I think? Because actually, I think more of the people, I'd say it's maybe a 60 to 70 cent waiting to the people, and then a 40, 30, 40 percent to the technology. Because the people are the ones who end up building the store around the idea and also declaring around the idea. So they know what the target is. And so it's like the people paying the target, do they think you can hit the target? But if you don't have a target, you don't have the people on your way. Like you may shift, right? The market's shift. All of a sudden, can you pivot? Can you pivot? Can your story grow? Can you grow? And can you grow off the same theme? You know, the other thing is, well, at the time, everybody thought inflation was only going to be transitory when we launched inflation. Oh, more than three months, inflation's going to be gone. So how are you going to be relevant, right? And we heard that a lot too, right? So how many nos did you get? If you had to estimate before you got all your yeses, to fill out the round? Are we talking 10 nos, 100 nos, 1000 nos? No, it's definitely more than 10, less than 100. I mean, it was definitely in the 10s, 20s, 30s, maybe 30 nos. Thanks. But I was very lucky to get a yes very early on, and a super committed yes. So Matt, you think that's a key for me. It just gives you momentum. You have the support, the backing, and the credibility. So was that a yes or a check? We're just a yes. I'm going to commit a term sheet, maybe sign a document. Or how did that yes come about if you don't mind sharing? So the yes came, there were two yeses, right? So the yes for trueflation came about with a term sheet and a commitment and network, right? And so we're opening a lot of doors and helping. And that got us going. And we still got all the nos, but at least we got a lot of doors to the right people really quickly. And that helps. And then with the good of labs, we originally found a investor that had committed a significant check size too, because we just had an extra spreadsheet. And this concept of a flat point, and that was, I said, okay, we'll back you based on your background. We'll back you. And so we got that. And we then had to come up with a story. And we walked them through our every sort of weekly monthly updates. And so we would just update how far we come this month. And this is what we're thinking, this is where we're going. And they saw that progress. And we executed fast, right? And so that's what they liked a lot. That's I think that's a very key portion of your own entrepreneurship. You don't saw a talk. It's not a lot of execution. We ought to use it better to not have any meetings for a week, show what you can do and then have that meeting and know what you want. And the investor is like, hell yeah, let's do it. And it's yeah, so I have a statement that I stole from a really close friend that I worked with in the mobile ecosystem a lot. But code beats, you know, code beats PowerPoint. Code beats PowerPoint. I love it. So if you have code and you can show a demo, it that's much stronger than a business plan on PowerPoint. Exactly. Because the code is like, oh, this is actually the future set. Yeah. It's tangible and media. And I can see you build something. You've invested your ideas to try and conceptualize, take your concept and put it onto. So it's easy to connect the dots. It doesn't specialize, but it's hard to execute and make better experiences. And that's why the incumbents don't do it. Yeah. That's why it's like, give me a plan, show me the exo spreadsheet. What's the ROI? What's the investment going to be? What's the cycle? And so you have to go through this whole rigor reward. Rigoror. I don't know what that word happened. That's not right. But you have to go through this whole process to get to an outcome before you can even start. Right. So it's like so burdensome. You just finished the marathon and now you're actually going to start. You're an ultra-major. But it's also safe, right? There's no pressure on you. If you're in a bigger organization, because you're still earning your salary all this time. And if you're sick tomorrow and you don't turn up, look, he's really going to notice. I mean, if you do it very regularly, people get a bit upset. I don't notice. But ultimately, you're under this sort of safe umbrella of a bubble. Of the corporate. Most of all, what else do you want to share with the community and on the podcast? Well, good. Check out www.Tecautruthlation.com and check out the Goona LAGU.NA. And check out our products. And if you're interested, your developer build will provide you with all the support we can to make your product a success around what we're trying to do. And what can we connect with you personally? What's the best social media? So, Twitter, S-R-S-R-S-99, S-R-U-S-T-99. And then on Telegram, same handle. Hell yeah. Well, thanks again, guys, for listening in to the Digital Goa podcast. This is episode one of season two and we're excited to be back. I'm glad to be pilot.