Yonatan Ben Shimon joins us to discuss how YBS Capital is helping companies get into defi and exit to the community.
Yonatan Ben Shimon is a serial entrepreneur with a passion for discovering how digital assets can unlock new avenues of wealth creation. He started his career as a securities analyst, but in 2013 he became interested in cryptocurrencies as an emerging asset class and never looked back.
Yonatan has been involved with projects including privacy coin Beam, art marketplace Collectorshub, virtual accelerator Celocamp, and Unipool, a union for Uniswap liquidity providers. Over the years he’s been operating in the cryptocurrency space, he’s come to believe that the most compelling uses for blockchain applications and tokens lie in the value that they can generate for their communities.
In 2020, he decided to launch YBS Capital as a firm dedicated to furthering the idea of community-based business models, with a focus on Exit to Community strategies.
Yonatan is a drop out from Nanotechnology degree in Bar-Ilan University. He has been recognized as one of Forbes 30 Under 30 in his home country of Israel.
*Disclaimer. None of this information is financial advice.
The following transcript was created using artificial intelligence. There will be some grammatical errors below.
00:00:03:12 – 00:00:14:05
Richard Carthon: Hello, everyone. Welcome to another episode of Crypto Current, your host, Richard Carthon, and today I got a really special guest working on a really interesting project, we have Yonatan with YBS Capital. How are you doing today?
00:00:15:21 – 00:00:16:10
Yonatan Ben Shimon: Good, good. Perfect, how are you? Thank you for having me.
00:00:16:12 – 00:00:51:15
Richard Carthon: Oh of course, man. I’m great. Crypto’s booming, so that’s always a fun time to be in the space. A lot of good things are going on. I’ve had a lot of family and friends finally hit me up and be like, hey, how do I get involved? Blah, blah, blah. So, that excitement is always a good thing. It’s interesting to see conversations that I’ve had with previous guests a year ago kind of come into fruition in early 2021. I’m sure you’ve experienced a lot of that as well. Before we dive into our conversation, tell us a little bit about yourself.
00:00:53:01 – 00:01:30:20
Yonatan Ben Shimon: Yeah, sure. So, I got into Crypto in 2012. Initially I just found Bitcoin in the Israeli newspaper, while I used to work at the Israeli hedge fund and do some like investing and stuff like that. I discovered Bitcoin, which was a new asset class. I didn’t know what the meaning of a world currency was, so I dived right into Google and try to find more information. I wanted to buy from Anticocks, which was the only exchange back then.
00:01:31:00 – 00:01:31:15
Richard Carthon: Right.
00:01:31:17 – 00:01:37:07
Yonatan Ben Shimon: But I didn’t have a utility bill, so then they got me in. I ended up not buying there, luckily.
00:01:37:18 – 00:01:38:03
Richard Carthon: Yeah.
00:01:38:05 – 00:02:45:18
Yonatan Ben Shimon: And instead buying from an Israeli broker. And so, after I bought my first Bitcoins, I was hooked because after you have something, after you invest your money into something, it’s much easier to learn about it. I was just a participant of the Israeli community in 2014, until 2016, 17, I started investing for other people in all of the coins that went out starting from the field in pre-sale and all other stuff. It was like a hedge fund, but not like in a general sense a hedge fund. And all the time I was thinking about how a social value can become a financial value. And I noticed that as a community as a coin, having more community members, Dogecoin is a great example for that.
00:02:47:27 – 00:02:48:12
Richard Carthon: Yeah.
00:02:48:14 – 00:03:59:17
Yonatan Ben Shimon: And 2016 until now, more or less, I helped start a couple of projects, while also investing in other projects. So, I helped to start Metropol, which is like a way to monetize communities, Beam, like the privacy coin based on the mimble wimble algorithm, Collectors Tab, which is a way for collectors to showcase their art and sell their art, Meerfos, Seelow, Camp, and all other projects. What I noticed is that I’m very good at helping projects or helping communities, which are the same for me, to monetize themselves. The business model depends on which project, like that, has different needs. But that’s what I’m doing now with YBS Capital.
00:04:00:10 – 00:04:53:18
Richard Carthon: That’s really interesting that you were able to, back when you first got in, you missed Mt. Gox train and lucky for you, but were still able to find a way to get into the space. And I also want to say that once you put your money into something, just like you said, once you got that first Bitcoin, it was easier for you to start learning more and get a little bit more invested because you are invested and you want to know and understand what it is that you put your money in. And on that, for everyone that’s listening, especially if you’re a newbie and you’re still not involved in this space, you do not have to buy an entire Bitcoin, an entire Ethereum, an entire coin to get involved. You can put in $5, $10. So like, if you’re listening right now and you have nothing in Crypto, go set up an account with something. If you’re in the U.S., Coinbase is probably going to be your quickest route to get in there. Put in $5, put in $10. You don’t have to put in a lot, but just do it so you can at least get involved and have a way to keep learning and have that vested interest to keep learning in this space.
00:04:58:03 – 00:05:05:20
Yonatan Ben Shimon: It’s different. Once you have even $10, your mind is there, your learning curve is much, much faster.
00:05:06:16 – 00:05:34:15
Richard Carthon: Yeah, for sure. And on that, just like you said, with YBS capital, which we’re going to dive into a little bit more now, you have various types of projects that you’re looking into. I mean, you drop a name like Seelow, which has been doing extremely well, also talking about different ways that people are able to you know, do art on Blockchain and some various other projects that you have going. So, tell us a little bit more now about you know, YBS Capital and all the various ways that, you know, you are getting more and more involved in the Crypto and Blockchain space.
00:05:35:25 – 00:07:03:11
Yonatan Ben Shimon: There are two aspects that I want to mention that I think when you put them together they’re magical: the business model of any Crypto project and community engagement. They used to be separate things, only this year, 2020, they became one. And what I mean by that, in 2015, 14, 17, the only use case was digital gold. And people used to copy and paste the Bitcoin code and it was a community, only a community. And the asset of this community or the value of this community, used to be you know, just a coin. So, nothing special, no business model there. And in 2017, there was a lot of trial and error in business models, the 2017 craze with the app coin. Like, people thought that putting an app for payment method is a good idea to present value, but it’s not a good idea. Again, it’s an attempt of community to find the business model and use Blockchain.
00:07:03:13 – 00:07:51:09
Yonatan Ben Shimon: And in 2020, we find a good business model, which is DeFi, basically like lending, exchanging, derivatives, synthetic assets, all these kind of things that really people are using and having a business and revenue streams that reflects value to the token. And right now, what I’m trying to do is basically to take a community that doesn’t have a business model and help them to develop a DeFi product or just invest in such communities that I think are promising or invest in DeFi products that I think are promising. But when you are connecting those two together, I think it’s very powerful.
00:07:52:08 – 00:08:32:03
Richard Carthon: Definitely, and I want to spend some time there. One of our focuses for 2021 is continuing to grow our community and making sure that we’re giving all the tools and essentials, so, that our community can have the resources they need to act and feel educated and empowered to take action. There is so much value, just like you said, with companies who have really good ideas and are making some really, really cool product, but don’t have that community. They don’t have these strong advocates or these people who understand what they’re building and can passionately go out and then explain it in such an easy to understand way that they can get someone else to become a little bit more on fire and keep it growing that way.
00:08:32:05 – 00:09:08:19
Richard Carthon: So, can you just kind of talk a little bit more? And you kind of spoke to it with Dogecoin. I’m not going to speculate on Dogecoin, anything like that personally about the project, but the community is so strong. Even with Ripple and everything that’s happening with the SCC and all that, the Ripple Army is so strong. And like, there’s just so many projects that have such strong communities that even if in the long run their projects might not be the greatest or maybe they’ll eventually become or whatever it is, but when you have such a strong community, they keep finding ways to be relevant and to keep growing in liquidity, in the market price and everything else. So, can kind of speak a little bit more to that?
00:09:10:11 – 00:10:22:22
Yonatan Ben Shimon: Yeah, sure. So, Dogecoin was an example for a community that it’s so strong that even without any business model, you see amazing stickiness, but you can also see the leading DeFi coins. And the leading DeFi coins have something really special, each of them have their own army. Synthetix, Aave, Uniswap, each of them have their own army. And normally, the army is becoming an ally because they are making money out of this thing. And if someone is making a lot of money out of something, he becomes very, very loyal to this thing. And I think the same. I mean, not only money of course, but I think it’s very important for someone to make money from something, it helps. And, but also in general, you see the whole NFT space.
00:10:22:24 – 00:10:23:09
Richard Carthon: Yeah.
00:10:23:11 – 00:11:36:26
Yonatan Ben Shimon: And the personal token space that has amazing communities with trying out different business models. But what I’m really excited about is really to connect communities into DeFi products. And I’ll give an example, if you have a YouTuber who is very like who has a very big group of investors, he can create like, an index, like index group or DPI index and take two percent fee of this index everlong and invest in this index of this community. And if you do a token for this index, I mean, this could be great because you have a lot of partners for this. And it’s especially appearing in DeFi products. So for example, today I was talking with my friends and built something called B Protocol. And B Protocol is like one inch for money markets, so it’s a platform on top of Maker, on top of Aave, on top of Compound.
00:11:36:28 – 00:11:37:13
Richard Carthon: Yeah.
00:11:37:15 – 00:12:33:07
Yonatan Ben Shimon: That helps you manage this thing easily. So, when do you do a token? I don’t know when, but if they would do a token, when they would do a token, that will help incentivize much more the community because it makes the community like to become partners in this thing. So, I’m looking to find things like that and help them to become better, so, investing in them and helping the design and bringing the partners on board. And if there is a project that’s really, really cool, I become part of the team for a few months. And then when they’re becoming, like I see that they are like, pretty much okay, I get into the back seat. But that’s it, basically.
00:12:34:07 – 00:13:16:25
Richard Carthon: Got it. I mean, and that’s a really interesting model. I want to kind of stay on the DeFi space because that was kind of the buzzword of 2020. And not only has it kind of found some foundational legs, but of course, I like to call it “The Circle. So, I would say back in 2020, we got to about 60 to 70 percent of the circle actually being complete of what they need to happen to have the entire circulation of what makes DeFi as great as it’s going to be. I think that 2021, we’re on track to get a little bit closer to getting 100 percent of closing that loop. What do you think’s in store for the DeFI space as 2021 is starting to come into fruition and even into the future? Let’s call it the next couple of years.
00:13:19:07 – 00:13:54:12
Yonatan Ben Shimon: So, I think the main use case of everything is to buy Ether, Bitcoin and other big tokens in new ways and to be more aggressive. So, I’ll give an example, you know, there are stages to DeFi, but I think everything use case is this. I mean, this is the main use case. And why I’m saying that, it started from lending. What are people using lending for? To buy more coins.
00:13:54:14 – 00:13:54:29
Richard Carthon: Right.
00:13:55:01 – 00:15:11:06
Yonatan Ben Shimon: And to use more money that they have. If they have a hundred dollars worth of Bitcoin, they want to put this back alone and buy some other coins or buy more Bitcoin or buy more Ether. So, in the beginning, it was only a lending platform and then exchanges, decentralized exchanges, basically the same like, complementary to the lending and synthetic assets. Use your Bitcoin, your Ethereum, and have some Eth on your assets and other types of derivatives like options, like perpetual swaps, stuff like that. And why do you have vaults like Badger, like Alpha, like Wyre? Because people want to get more, to make more on their assets. And so, I think we will find more creative ways of doing the same things. We start from lending, exchanges. And 2021 will be mostly, I think, derivatives, but also you will see those lending in exchanges grow a lot.
00:15:11:09 – 00:15:11:24
Richard Carthon: Yeah.
00:15:11:26 – 00:16:09:21
Yonatan Ben Shimon: Because the Ethereum and Bitcoin economy will grow a lot, so, there will be a lot of demand to even be more leveraged. And so, I think those will be the leading, I mean use cases or applications in 2021. And I guess, also Blockchain will be very, very strong. And I hope we will see some interesting ways of monetizing communities in new ways. Like, for example, an existing community that opens an exchange, an existing community that opens a fund, an existing community that opens a lending platform and some kind of a collaboration between communities. And we already see it with Wyre Acquisitions, so what Andre recently did a couple of times.
00:16:10:05 – 00:17:09:23
Yonatan Ben Shimon: So, yeah, I’m really, but what I’m really excited about is to see interesting combinations between communities and DeFi. Like if we’ll see, like, for example, something that I’m exploring, but I don’t know how it will look like is Crypto Sparks. In the financial markets, there is something called Sparks, is a public company to raise money, going public and then buying another company to make it public. And what they did is bring this company to the community. And the same thing can happen with Crypto. Imagine someone has an amazing app and if you do a collaboration between a couple of other big communities, you can automatically generate a community form scratch. But they don’t really know what that will look like, but it is interesting to see if something similar will happen in Crypto.
00:17:10:24 – 00:18:17:13
Richard Carthon: So, it’s interesting that and thank you for that response, a lot of things that you seem to be very bullish on is kind of the and the recurring theme of this conversation has been community mixed with a DeFi play. But even if it’s not a DeFi play, it more than anything is that there are a lot of reasons to be bullish on building community. And there’s a lot of great reasons on why people with good communities in the Crypto space or whether it’s not necessarily Crypto or Blockchain affiliated, but just a group that wants to find a way to now dive into the Crypto, Blockchain space, here’s a great path to revenue in a faster way. And it sounds like what YBS Capital helps to do is to help you bridge that gap and make that a clear path to creating that business model, that business plan to monetize the community that you’ve been able to build. So, that sounds very promising and very cool. So, I mean, really awesome that you were able to come up with this structure and idea, it’s pretty neat.
00:18:18:25 – 00:18:20:06
Yonatan Ben Shimon: Yeah, thank you.
00:18:20:08 – 00:19:17:27
Richard Carthon: Yeah, no problem. And another thing I kind of want to address and speak on this is, we’re at the beginning of this year, and what we saw at the end of 2020 was this path to institutional money entering the space. So, now that more and more institutions are starting to look at Crypto as a potential hedge with everything going on in the world. I mean, hey, COVID’s still here. Apparently there’s a new strain that is more contagious and what not. And who knows what’s going to happen with that. Yes, we now have some antidotes that we can give some people to try to, like, get them healthy, but hopefully that continues to level off and we can get back to, quote unquote, being normal again, our normalcy sooner than later. But with all of the various conditions that are going on, what are you anticipating and looking forward to in the Crypto, Blockchain space for the next year or two?
00:19:19:25 – 00:19:56:19
Yonatan Ben Shimon: I think the whole thing will just continue, because what COVID makes the world of governments to do is to just keep printing money and they are going crazy with the amount of debt that the country can have. And we see an unprecedented amount of debt that country’s politicians are folding themselves to issue. So, in the United States, until the year of 2000, there was less than 10 trillion dollar debt. And right now it’s like 30 trillion.
00:19:56:28 – 00:19:57:13
Richard Carthon: Yeah.
00:19:57:15 – 00:21:03:17
Yonatan Ben Shimon: The same thing with Europe. And where does this money go? To financial assets. And so, each person that has assets becomes richer, the person who doesn’t have financial assets becomes poor. And there is an inflation of financial assets, these financial assets worth more than the dollar worth less. And I don’t see it stops because it’s already detached from the economy and Crypto is just a small thing inside of this big picture of more money in the system. And this money has to flow, so, not to lose its value. And some of this money is flowing to Crypto. And so, I think if this will continue, it’s I mean, there is no reason to believe Crypto will not go 10 times or 15 times or 20 times or 30 times than the current levels because it’s only about the amount of money in the system.
00:21:05:01 – 00:21:05:16
Richard Carthon: Right.
00:21:05:18 – 00:21:38:21
Yonatan Ben Shimon: If there would be another 10 trillion dollars in the system, Crypto has to get some of it. The whole market of Crypto is one trillion, then Crypto is not very liquid. So, if one trillion is going into Crypto, it will go 10 times. It will not go only in one trillion, so I’m very bullish on Crypto. The only thing that can make Crypto not continue going is if the world would collapse. But if the world collapses, that will not be our only problem, we have other problems. So, yeah.
00:21:41:00 – 00:21:48:02
Richard Carthon: Yeah. I think we have a lot more to deal with if the entire global economy collapses.
00:21:48:15 – 00:21:49:00
Yonatan Ben Shimon: Absolutely.
00:21:49:02 – 00:22:34:04
Richard Carthon: But one of the things you brought up there, I think it’s important to mention again, is scarcity. And the reason why, again, why Crypto’s so very important and I think valuable and undervalued at this current level is that you can’t print more of it. You can’t go print more Bitcoin, you can’t go print more Ethereum, like it’s scarce. And with that, one of the reasons why various prices in the market right now have been skyrocketing is because there’s more demand than there is actual supply. And so because of that, inherently, it has to go up. And also, even though institutional money’s starting to enter the market, we’re not seeing, like, a large portion of all institutional money across the globe starting to enter, but they’re looking for opportunities to enter now, which I think is exciting.
00:22:34:06 – 00:23:20:17
Richard Carthon: So, I think we’re just at the beginning of something massive that could happen this year. Of course, only time will tell, but I’m very bullish on the year and I think it’s an exciting time to be in this space. And just to echo one more time, community. I think if you can continue to build community, build education and any project that you have or you want to learn more about, if you can speak to something and you know that person that doesn’t know a lot about Crypto, but you can speak to a thing and explain to them why doing something might be a good idea, you’re in a powerful position. So, I definitely want to echo that one more time. But Yonatan, I really do appreciate you spending some time with us today. Thank you for dropping all the knowledge and giving our listeners something to think about. What is a final thought that you want to leave with everyone listening here today?
00:23:22:15 – 00:24:52:18
Yonatan Ben Shimon: A final thought. I guess, I have one thought, but just learn. I guess, learn and participate. Participate in communities, you don’t need money for that. If someone is wanting to get involved, just get into the community and start participating in the conversation and educate yourself. And I guess Crypto is the best way for people to become more wealthy and create initial wealth for themselves, especially, if they know how to build something, to build software and stuff. But even if not, participating in communities is a very valuable thing to do, especially in Crypto. And it’s amazing how wealth’s getting distributed between people that are contributing energy, which is not possible in the regular world. No one can make money by participating in just a company chat. But if you are participating in the Crypto chat and have some Crypto, you get some airdrome for participating. So, just participating.
00:24:53:09 – 00:25:17:23
Richard Carthon: Yeah. Final great thought. Education, participation, great way to let that be a chant that you recite to yourself on the year. There’s a lot that you’re going to be able to learn and if you just find ways to participate, it might just be something that changes your life ultimately. So, Yonatan, really do appreciate that final thought. What are some ways that people can connect with you and what are some ways that people can learn more about everything that you have going on?
00:25:18:27 – 00:25:43:12
Yonatan Ben Shimon: So, Twitter, I need to be more active. Telegram, so Twitter is Yonatan Ben Shimon without an n in the end. I know it’s not very comfortable. And Telegram is Yone9091. And maybe Medium, I’m writing a bit, but not too much. Those are the ways.
00:25:46:09 – 00:25:50:02
Richard Carthon: Good deal. Well, again, Yonatan, thank you for joining us today and for everyone listening, stay Crypto Current.
Crypto Current will be guiding all of you who are new to the cryptocurrency world to becoming a cryptocurrency and blockchain expert. Crypto Current was founded to give access to information to everyone on current events occurring in cryptocurrency and blockchain in a digestible way. Since its creation, we have created content that impacted thousands of people through its podcast, blog, and social media.