DeFi Based Crypto Investments With Emily Stork

Emily Stork is a Co-Founder and CFO of Worth The Fight Fitness, also a Principal at Crypto Fun QuoinVault. She is passionate about corporate law, business, finance, entrepreneurship, and crypto, especially smart contracts and DeFi.

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DeFi Based Crypto Investments With Emily Stork

Brett:

I’m excited about our next guest. She’s out of the great state of Colorado. She is going to be discussing things that I’m still learning about and ways to invest in a cryptocurrency that we haven’t thought about. She’s a Co-Founder and CFO of Worth The Fight Fitness. It’s WTFBoxing.com also a Principal at Crypto Fun QuoinVault. Coin spelled Q U O I N please welcome to the show with me, Emily Stork. Emily, how are you doing?

Emily:

Good. I’m excited to be here. Thanks.

Brett:

Thanks for joining us excited to get to know you a little bit more and learn a little bit more about, DeFi-based crypto investments, and what’s happening in that space. But before we get into those details, would you ever listeners a little bit more about your story and your current focus?

Emily:

It’s a little bit all over the place. But I actually started out in corporate law, which I practice for about seven years, and while I was doing that, I just started becoming an investor in cryptocurrency just because it was an interest of mine and especially kind of smart contracts and decentralized finance on the Ethereum blockchain. But I, my wife, and I decided or we decided I decided I wanted to launch a boxing Fitness Studio, and I left my job in corporate law was continuing while I was working on my boxing Fitness Studio to kind of invest on a personal level in cryptocurrency and just get more involved in that space generally, I’m and I sort of realized that like, there was a lot of really good unexploited opportunities, particularly in DeFi and decentralized finance and smart contracts.

I thought, even though I’m already working on opening one business, that, um that this would just be a really good investment for people who wanted to have it kind of almost alternative to a savings account. Because it’s very simple, you really just turn your dollars into US dollar-paid cryptocurrency, and then you become a liquidity provider on decentralized finance platforms, and you can earn fees, and the return is pretty good. I mean, it can be anywhere from, like, 20% to almost like 80%, depending on which, stable coin you’re using. I thought why would anybody even invest in these sort of more volatile cryptocurrencies when you could use a strategy where your principal is much less at risk? Of course, there are so many risks, but that was kind of how I came to decide that I was going to start working on a second venture.

Brett:

We’re gonna dive into that here in a minute, and I love the workout box, he would even call it fitness. How would you classify what is it that you have there?

Emily:

Isn’t like boxing Fitness Studio. it’s like not boxing as a sport, but like boxing for the purpose of the exercise, like everybody on their own bags. Like, we think it’s more fun than running on a treadmill or something like that.

Brett:

I love the fitness aspect. But before we dive into the best-kept secrets in DeFi base investments and be becoming, being able to, I guess, learn to be a provider for liquidity in the crypto space. I want to take one other step back, Emily, I want you to take us back maybe to the earlier days in high school days, maybe the university days, maybe the law school days. You’ve all been given certain gifts in this life and these gifts that are given to us to be a blessing and help to others. People call them superpowers and people call them strengths. I’m curious, what are those one or two gifts or strengths that you believe you are given, and how does that help how you help and bless people today?

Emily:

I would say that like when I get passionate about something, I just spend a lot of time really digging into it on a deep level and investigating it and I think that’s kind of how I came to discover the strategy that I did even though I’m not like technical in any way. I don’t like to know how to program my own smart contracts or anything like that. It’s just me and I guess the other thing would be that I just like to, once I dive into a project, I like to do it at a really, really high level and optimize everything which is very important. business, obviously, but a lot of people don’t do it.

Brett:

I know exactly the fundamentals of certain things. I love that passion, your passion creates a deep level of knowledge and curiosity and then a deep dive into expertise. It feels that and then, also kind of making it as perfect as it can be. Is that a fair summary?

Emily:

Yes, that was better put that in mind.

Brett:

Now let’s dive into exactly using those gifts to help people with DeFi based crypto investments. What’s the number one secret or even step one to understanding how to be a liquid provider of crypto in that space?

Emily:

Well, I think actually what really helps people to understand, you have to take a little bit of a step back and think first about like how centralized exchanges work, basically, like if you want to go and sell an asset, on a centralized exchange, there’s a market maker who will make a market for you and basically sell or buy that asset for you. But on a decentralized platform, the whole idea is there are no third-party intermediaries. As a result of that, what they have kind of as a solution, they have made it they’ve incentivized people to essentially lend out their own cryptocurrency to make a market in different cryptocurrency assets, and the way they incentivize that is by paying you fees, and so that’s where like this return comes from because a lot of people hear, you can make a 20% return on like, basically, what’s the US dollar and there’s got to be some kind of weird scam to it or something like that. But it notes, you’re really just providing your own cryptocurrencies to enable, as liquidity to enable people to make exchanges, and that’s kind of like having that’s sort of the understanding of where the actual return comes from.

Brett:

Let’s pull this out a little bit. I have 25,000 or so and a couple of coins, personally. I show up, Emily, I’ve got like 25,000, it’s been doing pretty good, it’s making some money. But I’d like to put the stuff to work for me and start making some cash flow, some interest. What steps one, two, and three?

Emily:

There are a few steps. First of all, most people’s cryptocurrency is something like Bitcoin or Ethereum, you can actually do this strategy with those coins. But since we’re talking about using stable coins, what you would need to do first is obtain some actual stable coins, those are things like USDC, USDT, DIA, there’s many of them. You can find a list of them and you can obtain those on centralized exchanges like Coinbase, and then after you have your stable coins. What you would do is go to a platform like AAVE, CURV, YEARN like these are big DeFi platforms where and you would put your di USDC, USDT, whatever it is into their smart contract, and then you would begin to earn fees on it and you would be able to withdraw it whenever you want. If you want to withdraw it the next day you can I mean? Probably YEARN is the best one that I would recommend because they kind of have automated it so that you can kind of get the highest return without you having to go in there constantly and harvesting the fuse yourself.

Brett:

Excellent. How do you spell that last one to make sure I have that.

Emily:

Yearn? It’s Y E A R N I guess that’s why.

Brett:

Again, so 25,000 and I transferred into some stable coins is called USDC, and I traded my Bitcoin my Ethereum whatever right now it’s a USDC. Now I move it over to Yearn, and I put it on Yearn and I click automate, I click lend.

Emily:

You click deposit, I believe.

Brett:

Yes. As far as getting the returns going, what does that look like?

Emily:

That’s all you do. I mean, that’s it’ll just start generating after that, and then whenever you want to withdraw it, you’ll be able to withdraw whenever you put in plus whatever you’ve earned.

Brett:

Got it, and that’d be taxed as ordinary income tax. On interest, they earned probably.

Emily:

I actually, I would assume.

Brett:

It’s probably so but I’m thinking that like an interest-bearing account. Were you talking to a bank and like, I got a bunch of money. Here you go pay me my interest. They take the money and they go loan up someone on they make a bigger interest. Is that basically what’s happening but we’re cutting out a lot of the middlemen there. The middle man and women, because women are making the money to over there at the banks. We can’t leave them out, and then we’re able to get that higher return. Is that a fair summary so far?

Emily:

That’s basically all it is. Because what you’re in does is it takes these deposits from a whole bunch of people and makes like one big deposit onto another like DeFi platform and, and then they harvest the fees every day, and then invest them. It’s kind of like the most efficient strategy, if you were to do that yourself, you would get eaten alive by Ethereum fees, because you do have to pay fees to do these transactions, and when you’re doing them, you really need to take into account like how much those fees are. Because if you only have $100 $500, that you’re doing this with, it may not make sense, because it’s going to take so long to earn those fees back. I mean, there are other platforms that you can use like polygon is, is, it’s a good one. There is a planet, there’s honestly, I won’t list them off, there’s a lot but and a lot of them do have lower fees. If that’s like something that’s important too.

Brett:

Personally, the 25,000 cryptos that I had, it’s been sitting in the count it’s fluctuated from 12 to 40 to 30, 20 to 20, and I but what you’re saying is Brett, you could have put that into urine or polygon, and have been earning some percent over time, regardless of the highs and the lows. I guess if I’m in USDC, I’m no longer in like, Bitcoin. I’m technically in that new stable coin.

Emily:

You can if you want to make this strategy a little bit more complicated, you can use a decentralized lending platform, put your Bitcoin on to something like on the day, borrow the USDC, and then take that USDC and put it into Yearn. then you still have your exposure to Bitcoin, but you also can kind of Yearn or there’s also Bitcoin volts on urine and other similar platforms. If you just want to put your Bitcoin in and earn on Bitcoin, but sort of the reason why like at least I intend for my fund to focus on stable coins because I wanted to get kind of get rid of that volatility that you have with like the Bitcoin exposure. I was like if I can earn like 20% or more on stable coins, why would I? That’s not pretty guaranteed. I mean, yes, there are can be hacked, there can be even possibly losing its peg, maybe. I mean, those are risks. But like, overall, to me, it just seems like Bitcoin is so volatile like these stable coins are fairly stable, and you cannot return.it just seems to make sense. Especially if you’re a high-net-worth individual, you don’t really need to take these massive risks. You can fall prey very well.

Brett:

Let’s see, we take the reverse, you have 100 grand is sitting at the bank, making next to zero and like, all right, let me buy some USDC. Let’s put it on Yearn, and let’s start making 20%. Is that pretty conservative right now?

Emily:

I guess I haven’t checked the Yearn vaults like recently. I mean, it depends on which stable coin you’re using. Some of them are a lot higher than 20%. But it probably is because the underlying stable coin might be a little riskier. I mean, definitely, like 10 20 30.

Brett:

What’s the risk. I guess that’s the other thing. Give me like your experience with that, and like, besides people not even knowing about this, knowing how to do it, which is a big percentage of, let’s say, 95% of people. Let’s assume they know it, and what’s the risk for the money if you put your 10 grand or 20 Grand 100 grand in?

DeFi Based Crypto Investments: “If you don’t own a home, buy one. If you own a home, buy another one. If you own two homes, buy a third.” – John Paulson

Emily:

Well, there’s a couple of things number one is hacked or even like. Even what they call rug pulled, which is like an inside job where your coins were really stolen by the person who makes the decentralized finance platform, but something like Yearn is extremely it’s like one of the biggest platforms there is it’s very reliable as far as DeFi goes. From that perspective, they’ve also the times when they have been hacked, which I think is one time, maybe two, they’ve always paid, paid it back using insurance. Like if you go and put your coins onto some more sketchy DeFi platform, then your risk is higher, but I don’t consider the rest of you very high with Yearn. The other risk is with the stable coin itself losing its peg-like all these stable coins have different ways of being pegged. Like you may have heard of stuff around US dollar tether, that’s kind of the one that like they said they were like every tether was secured by $1 but then like it would kind of came out that wasn’t exactly true.

They’re they have different ways of maintaining it there’s like collateral in some cases, there’s like weird algorithms, but like those things you know, can go wrong potentially. But again, with these stable coins like US dollar coin that is actually there’s a very big company in the crypto space called Circle and US dollar coin is their coin and it is centralized so that you know has its positives and negatives but it’s a pretty reliable as far as the price goes, I don’t have too much concern that it’s gonna get there but the stable coins have come off there, but it does happen, especially during like big swings in the market, especially if they’re secured by collateral. It suddenly was the top of you. That is the other possible risk, and I honestly think the reason most people haven’t done this is not those things, though I own it, I think it’s more just the kind of it’s a little bit of a pain to learn how to do it, it’s not the most intuitive thing, and that’s in a way, why think that this fun that I’m making quit actually be something of interest to people. I mean, I’ve already gotten people coming to me asking about it, but they don’t have to learn all those things, they just let somebody else do it, and they can still get the return.

The one other thing, I would say it’s not exactly a risk, but its sort of related is just fees, with the fees to use Ethereum. Because they can be pretty expensive, and it’s very easy to kind of just like you don’t want to be burning so much on fees, that you’re not really like earning your returns, like what $25,000 that’s a pretty substantial amount. The fees shouldn’t be overwhelming, but even with $25,000, you have to pay a fee to like, move the 25,000 to the proper wallet, and then another feed to like, approve it to be put on to urine, and then another fee to deposit it, and then another fee to withdraw it. This kind of add up overtime at times those fees have been like over $100, you do have some control, like you can set it lower if you want, but your transaction might not be confirmed. It’s a little bit. That’s another reason why it’s sort of like if I can get, a lot of money together, and then make the deposit all at one time, save a lot in fees.

Brett:

Starts to scale, and if you have enough time to hold and wait and obviously get that return back on your investment like you don’t need the money right away, and that’s like anything else time horizon is the number one factor when it comes to investing. Emily and by the way, QuoinVault.com spelled Q U O I N. I want to dive into that now in your service to make sure we’re connecting the dots here. Again, why was it started? What does it do and if someone wants to get started with you, what are the steps?

Emily:

I’m really it was just one, I realized that I could make pretty much a very reliable return on what is essentially a US dollar using platforms like Yearn and Curv, and I was like, why would people want to be exposed necessarily to the volatility of something like Bitcoin or Ethereum, when they could just have something that’s essentially like a savings account, as you put it, you just take your dollars, swap them into cryptocurrency as it’s pegged to the US dollar, and then put them on these platforms, but I think there’s still a reason to have the fun that I’m working on. Because, as you just mentioned, it scales, you take $10 million, or whatever it is, and you put it to turn it all into stable coins, put it all on Yearn, and now you’re saving all of those people a lot of money on fees, versus if they did that themselves, and I think that the other thing that’s great about it is unlike a lot of investments, you can withdraw at any time. It’s pretty liquid, which is nice, especially since if you want to compare it to a savings account, you kind of want that ability. Of course, you may have to incur a little bit more fees if you withdraw at a weird time.

Brett:

I got 10,000 that I put in real fast, Emily, is that subject to volatility? I guess the USDC could go up or down or do I get that upside, and my search to that, and I’m also lending an hour walk us through that? Or is only when I actually sell it? Can I even though the value is higher, low and peg or how does that work?

Emily:

There’s really not too much fluctuation, I mean, maybe it’ll be at 101 or 99, but it really doesn’t move too much. From that perspective, you can’t really count on, earning anything.

Brett:

I’m with you. It just is the learning of it. if I bought Ethereum for 14 $100 and then selling I sell it for 30 $300, and I cash out and I move that into the stable coin. Now, let’s say that’s a million bucks worth of Ethereum right. Now I can start to do that. Is that making sense? Am I doing that right or what?

Emily:

I’m sorry, I didn’t understand.

Brett:

I’m trying to figure out basically what I sell to get there. When I sell to get there or I guess I bought buy I buy to get there, they use USDC is going to be pretty limited to movement. It’s not so much the volatility of the Bitcoin or the Ethereum and then from that, I’m able to lend out and make the return I guess.

Emily:

You’re basically lending out your coins as liquidity on and I mean, that does you are like, getting that smart contract exposure from that. That’s how you earn your fees.

Brett:

Up to you says, I don’t understand as much I trust Emily and her team to do it QuoinVault. I like to do it in scale and try to get like maybe like the Costco effect. We all go to Costco and we get a lower price because we all have members. We’re all members of QuoinVault. We’re all coming together to do this. Is Is that a fair summary? Then you’re able to negotiate a better deal?

Emily:

You got a way better deal, and you don’t have to worry about the kind of dealing with any of the aspects of it yourself. I mean, it’s not like people could certainly learn how to do this. But like, there’s better already that if you do it yourself.

Brett:

The minimum I’m ready to go. I mean, what’s the minimum?

Emily:

I haven’t set a minimum yet. But I would say it’s probably gonna be like, $25,000. I’m sure. I’m really just starting to work on this. I want to do this.

Brett:

By the way, you can learn more at quoinvault.com. That’s quoinvault.com. Any last thoughts on that? Before we shift into like some? Are we’re gonna geek out on some Capital Gains Tax stuff with crypto in a minute?

Emily:

That would be actually great. I would loosen up some of that stuff because I’m dealing with my crypto taxes. I don’t know. I think that’s it.

Brett:

Let’s shift into that, and so and it starts with this question. Like, what’s the biggest frustration when it comes to Capital Gains Tax Deferral options on the sale of highly appreciated cryptocurrency?

Emily:

I have not. I don’t know if I can answer that. I’m sorry. But I won’t say that it is very frustrating like it is. There is not good guidance from the federal government about how to treat crypto transactions, especially in DeFi because you are technically like swapping, like when you go and put your US dollar combing into yarn, you’re getting a different token back that kind of represents your US dollar coin plus your, and they and some people have argued that that should count as like swapping assets like that’s sort of a moment where you’re, I guess bickering, it’s like, do you count the tax at that point? Or like when you get back out of it.

Brett:

Actually, get the cash in your hands? Versus just trading it?

Emily:

It seems like, um, I think they just need to clarify it like it, I find, I’m not sure how to treat it, and you do a lot of transactions, and that makes it even more. Like I also don’t I don’t know, I don’t think when you switch from one crypto to another unnecessarily that you should incur tax. I know, that’s what works. But it seems like what it should be when you move back into the US dollar. That’s the point where you should be taxed. But that is not how it works. But I can kind of use that to your advantage by purposely selling at a loss and then and immediately buying back to the kind of like register losses, I guess to like offset gains. I haven’t been doing it.

Brett:

Some different ways that people have done it. But I think they’re cleaning up some of those laws to make it where you have to hold for a certain period of time. Folks, kind of maybe they look at it as gaming the system but that being said, we do have a solution for those who are selling highly appreciated cryptocurrency Ethereum Bitcoin to defer Capital Gains Tax is called a Deferred Sales Trust. In fact, I’m really curious to see what you think about this I met with a couple about six months ago, and this is a couple that bought a theory for about 100 grand over the last five years, and in 2017, it shot up to 6 million. They’re looking for a reason to sell looking for a way to sell, but they ran out of time, and because they wanted to defer the tax, but they couldn’t figure out a way it crashes from about 1400 at that point down to like, I think it’s like 90 bucks. It crashed, and then it went all the way back up to like 4000, and then it crashed again. 1800. But anyway, as of about two weeks ago, we sold the first deferred sales trust, they had about 13 million worth and now it went down to about 5 million, they sold 5 million of that deferred all the tax. They’re able to put it into cash flow producing real estate, put in some diversified liquid investment-grade securities, they’re able to get a lot of cash flow and just you know, get a little just get take some chips off the table. I’m curious, do you think that might be a value to some folks who have bought low and are wanting to sell high?

Emily:

Definitely. I mean, it sounds like I haven’t heard of that before, but it does sound like a great thing. I mean yeah, I would definitely don’t get into it. I haven’t done a lot of selling out myself either. I’ve been just been buying over time. I’m just like, I don’t know I guess I just realized after a while that it was better to just buy and hold so that’s what I’ve done. But eventually, I’m you know, everybody wants the whole idea is to get back into dollars.

Brett:

To get some cash flow, some diversification and just sell high and buy low again, without paying the tax bill to defer the tax. By the way, you can learn more about that at capitalgainstaxsolutions.com it’s called a Deferred Sales Trust. That particular $5 million deal, was about a deferral of about one and a half or so million extra, and they have some dark target prices for the future as well. Again, that’s capitalgainstaxsolutions.com. That being said. Emily, are you ready for the lightning round?

Emily:

Yes.

Brett:

Knowing what you know, if you go back to your 20 or 25-year-old self, what’s the one Golden Nugget you’d make sure to tell yourself to do?

Emily:

I would say just always ask, like, don’t be afraid to go after what you want, and just like approach people who too, for whatever it may be for a job or a partnership. Like when I was that age, I was always, like, timid about those things.

Brett:

I love asking you shall receive if you don’t ask the chances are no. I mean, it’s already known. Because you didn’t and asked, it’s like Michael Jordan said you miss 100% of the shots you don’t take right, take a shot. Second question number one book you’ve recommended or gifted the most in the past year.

Emily:

I really enjoyed the book, Dark Pools, which talked about it actually, I read it before all this crazy Game Stop stuff happened, but it just kind of talks about, like kind of the development of the modern exchange. The ways that it’s populated by financial institutions, or just the market and liquidity, and so I just found that very interesting and very relevant these days, so much stuff is coming out about payment for order flow, and all sorts of other machinations that big financial institutions engaging, and I think if that’s something I tell me, people are becoming interested in it which is great.

Brett:

Favorite MMA fighter?

Emily:

I’m gonna have to say, Ronda Rousey, because she’s the only one I know. You’re actually probably not my favorite.

Brett:

We’re sure for sure. Next question, what do you most curious about right now?

Emily:

I guess I’m gonna have to say still smart contracts and Defi relevant doing I mean, I do know a lot about it. But there’s so much more to show, and I mean, I definitely like to learn how to program them myself, but I don’t have that technical background. But I might. It’s awesome.

Brett:

Last question. We always wrap it up with this one, after all your success, being an attorney multiple, starting the business, and now with coin vault comm launching that getting that going? How do you stay centered in your values, and how do you stay encouraged to charge forward to reach new heights?

Emily:

My thing, always making sure to plan breaks. Like it’s just really, easy, especially if you’re very passionate about a project to just be working on it constantly. I mean, that’s kind of how it was with us in the business, or be like 12 hours pretty much every single day, but it’s just really easy to get burned out. If you don’t have like plan to breaks and also especially like time with your family and your wife husband, I think it’s good to just kind of like get burnt out. That’s what I would recommend

Brett:

I want to thank you so much Emily Stork for being on the show sharing wisdom, helping us understand how to invest.