Our latest and greatest Cryptonatives installment features none other than Luis Cuende, co-founder of Aragon and founder of Nation3.

Join us as we discuss Luis’ goals for building a community of like-minded people to create a cloud nation as well as exciting opportunities in motion between PWN and Nation3.

PWN: In your own words, what do you think defines a cryptonative?

LC: I think a cryptonative is a person who has a very open mind about what value is, how it's defined, and how it's controlled at the macro level. In general, I think true cryptonatives haven't “drank the Kool-Aid” in terms of the narratives pushed by nation states for decades (or even centuries). Because of this, cryptonatives have their own truth when it comes to the meaning of value. They think about how it travels and who gets to control it, which is obviously much more transparent and verifiable than within the traditional financial system.

PWN: As a cryptonative, what are some of the DeFi tools and strategies that you find yourself using? It would be especially to learn about your activities related to trading, lending, borrowing, staking, and so on.

LC: First off, something that I see as particularly interesting for cryptonatives who are here for the long term (in other words, people who have a 10- or 20-year outlook on assets like Bitcoin or Ethereum) is that actually, it’s not necessary for them to sell those assets. Instead, I believe that cryptonatives should be thinking about how to accumulate more of them over time. You can think about protocols like MakerDAO, PWN, and other alternatives across different chains that make it possible to take some collateral to pay for your expenses and then just keep accumulating over the years. I think it's more of a mindset change: Instead of needing to sell assets, you actually want more of them.

When it comes to actual tools that I use, there are certain tools that are interesting to choose and are often underutilized simply because they're not well understood, such as financial options. For example, there are multiple platforms that allow you to trade options for ETH or WBTC. In different market moments where the markets are quite neutral, it's a way to get quite good yield while having quite minimal risk if you buy the options on both sides.

PWN: What are some of the main issues facing cryptonatives in today's financial ecosystem? What issues have you faced and how are you mitigating these?

LC: I think one of the main issues takes place when interacting with DAOs. So when you work for a DAO, you don't have a payslip that’s issued by a company in a traditional nation state — this can make things difficult, as many logistical things revolve around that. This can result in issues faced in certain life situations; for example, when you’re looking to get into a mortgage.

I’ve seen that people work around this by creating a separate entity that is adjacent to the DAO through which they can receive their income, pay for taxes, and obtain more traditional bank statements that they can use. That being said, I believe that there's still a lot to do in terms of income stabilization in crypto. An increasing number of people are becoming contributors to multiple projects, and that’s great, but it also means that they don't really have much of a stable income (although expenses usually are stable).

I think there is something that needs to be built in the ecosystem — some sort of way to create an insurance circle with other contributors in the same DAO or across different DAOs and then be able to distribute incomes a little bit so that you can have a more stable income.

PWN: How can other DAOs similar to Aragon leverage protocols to survive the current market conditions?

LC: In the case of Aragon, it's fortunately very well capitalized, so it's doing completely fine. But for Nation3, for example, I thought of PWN during the process of trying to issue a bond (more on that below). This is significant, as I believe that Nation3 is the world’s first cloud nation to issue a bond. We were thinking about this for some time, but we found that we didn't really have the right tool to do it.

So when I encountered PWN for the first time, I instantly thought, “Wow, this is a great platform and we're going to use it for issuing our bond.” Then, I drafted a governance proposal. I sent it off, and it passed (!). We’re now working with PWN in order to move things forward.

Generally speaking, issuing a bond is quite big because it allows Nation3 to raise funds while not having to sell its token while it figures out how to increase liquidity of its own token, $NATION. (This is already underway because there was the governance proposal to have market makers work on this, so it's a matter of months away.)

Right now, with the terrible market conditions and the lack of liquidity available, we don't want to have to sell a bunch of $NATION. Instead, by using PWN, we can issue a bond and postpone the repayment of it for three months (until there’s deeper liquidity). Then, you're basically not selling your upside — you're going to keep your upside and will pay the loan with a fee. I think it's quite genius, and I think DAOs should use this more and more as a bootstrapping mechanism for their own tokens.

PWN: Could you tell us more about the Nation3 proposal and the opportunity that you saw between PWN and Nation3?

LC: Sure, it's quite straightforward. We have some fixed costs for some contributors that have been working for the project for a few months. They have some $NATION, but they have been postponing selling it because they don't want to touch the market until there is more liquidity. So this proposal basically allows us to be able to pay those contributors, so they cover their expenses and so forth without having them sell tokens.

It's quite an elegant solution to the issue, not only now but also potentially in the future. Even if the token is very liquid if you go into a bear market, you still might not want to sell it. If you have a proven track record as a DAO, you can repay these loans. Then, you open a loan on PWN and put your token as collateral.

The way I look at it is like this: You don't have to go knocking on MakerDAO’s door asking them to get $NATION as collateral. You can just use PWN, and then you can use anything as collateral. So as I said, I really do think that it's an elegant solution.

PWN: What are you most excited about in DeFi leading up to the next bull run?

LC: One thing that I'm really interested in is the commoditization of lending and borrowing markets. Now seeing how we’re progressing with Nation3, one of the things that we thought about is how we can make $NATION collateral for different protocols. It’s early on in the process because protocols like Compound or Aave have a lot of requirements, but we'll eventually get there.

I'm really interested in seeing how there are newcomers that have commoditized these services, making it possible for others not to go through the lengthy governance process in order to get your token as collateral. Instead, anything can be collateral. And based on that, you can calculate the borrowing rate. Perhaps if you’re a very emerging token, you can’t have a 1000% collateralization rate, which is outrageous, but it still gives you something to play with compared to not having test collateral. So, yeah, I'm very excited about that.

PWN: Is there anything else you’d like to tell the world about at this time?

LC: We’re in the process of doing this bond with Nation3, which as I mentioned before, is a world’s first! I’d like to call out to people that are interested in doing things for the very first time to join Nation3 and help build this cloud nation.

PWN’s Cryptonatives is a Q&A series with some of the brightest minds within the web3 and DeFi space who are building and making active use of the services that today’s crypto ecosystem has to offer. Through shedding light on their experiences and lessons learned throughout their careers, it’s our team’s goal to educate the masses and further spread our guests’ wealth of knowledge.

Have someone that you’d love to see featured in the series? Reach out to us on Twitter or Discord and let us know.

Our latest and greatest Cryptonatives installment features none other than Luis Cuende, co-founder of Aragon and founder of Nation3.

Join us as we discuss Luis’ goals for building a community of like-minded people to create a cloud nation as well as exciting opportunities in motion between PWN and Nation3.

PWN: In your own words, what do you think defines a cryptonative?

LC: I think a cryptonative is a person who has a very open mind about what value is, how it's defined, and how it's controlled at the macro level. In general, I think true cryptonatives haven't “drank the Kool-Aid” in terms of the narratives pushed by nation states for decades (or even centuries). Because of this, cryptonatives have their own truth when it comes to the meaning of value. They think about how it travels and who gets to control it, which is obviously much more transparent and verifiable than within the traditional financial system.

PWN: As a cryptonative, what are some of the DeFi tools and strategies that you find yourself using? It would be especially to learn about your activities related to trading, lending, borrowing, staking, and so on.

LC: First off, something that I see as particularly interesting for cryptonatives who are here for the long term (in other words, people who have a 10- or 20-year outlook on assets like Bitcoin or Ethereum) is that actually, it’s not necessary for them to sell those assets. Instead, I believe that cryptonatives should be thinking about how to accumulate more of them over time. You can think about protocols like MakerDAO, PWN, and other alternatives across different chains that make it possible to take some collateral to pay for your expenses and then just keep accumulating over the years. I think it's more of a mindset change: Instead of needing to sell assets, you actually want more of them.

When it comes to actual tools that I use, there are certain tools that are interesting to choose and are often underutilized simply because they're not well understood, such as financial options. For example, there are multiple platforms that allow you to trade options for ETH or WBTC. In different market moments where the markets are quite neutral, it's a way to get quite good yield while having quite minimal risk if you buy the options on both sides.

PWN: What are some of the main issues facing cryptonatives in today's financial ecosystem? What issues have you faced and how are you mitigating these?

LC: I think one of the main issues takes place when interacting with DAOs. So when you work for a DAO, you don't have a payslip that’s issued by a company in a traditional nation state — this can make things difficult, as many logistical things revolve around that. This can result in issues faced in certain life situations; for example, when you’re looking to get into a mortgage.

I’ve seen that people work around this by creating a separate entity that is adjacent to the DAO through which they can receive their income, pay for taxes, and obtain more traditional bank statements that they can use. That being said, I believe that there's still a lot to do in terms of income stabilization in crypto. An increasing number of people are becoming contributors to multiple projects, and that’s great, but it also means that they don't really have much of a stable income (although expenses usually are stable).

I think there is something that needs to be built in the ecosystem — some sort of way to create an insurance circle with other contributors in the same DAO or across different DAOs and then be able to distribute incomes a little bit so that you can have a more stable income.

PWN: How can other DAOs similar to Aragon leverage protocols to survive the current market conditions?

LC: In the case of Aragon, it's fortunately very well capitalized, so it's doing completely fine. But for Nation3, for example, I thought of PWN during the process of trying to issue a bond (more on that below). This is significant, as I believe that Nation3 is the world’s first cloud nation to issue a bond. We were thinking about this for some time, but we found that we didn't really have the right tool to do it.

So when I encountered PWN for the first time, I instantly thought, “Wow, this is a great platform and we're going to use it for issuing our bond.” Then, I drafted a governance proposal. I sent it off, and it passed (!). We’re now working with PWN in order to move things forward.

Generally speaking, issuing a bond is quite big because it allows Nation3 to raise funds while not having to sell its token while it figures out how to increase liquidity of its own token, $NATION. (This is already underway because there was the governance proposal to have market makers work on this, so it's a matter of months away.)

Right now, with the terrible market conditions and the lack of liquidity available, we don't want to have to sell a bunch of $NATION. Instead, by using PWN, we can issue a bond and postpone the repayment of it for three months (until there’s deeper liquidity). Then, you're basically not selling your upside — you're going to keep your upside and will pay the loan with a fee. I think it's quite genius, and I think DAOs should use this more and more as a bootstrapping mechanism for their own tokens.

PWN: Could you tell us more about the Nation3 proposal and the opportunity that you saw between PWN and Nation3?

LC: Sure, it's quite straightforward. We have some fixed costs for some contributors that have been working for the project for a few months. They have some $NATION, but they have been postponing selling it because they don't want to touch the market until there is more liquidity. So this proposal basically allows us to be able to pay those contributors, so they cover their expenses and so forth without having them sell tokens.

It's quite an elegant solution to the issue, not only now but also potentially in the future. Even if the token is very liquid if you go into a bear market, you still might not want to sell it. If you have a proven track record as a DAO, you can repay these loans. Then, you open a loan on PWN and put your token as collateral.

The way I look at it is like this: You don't have to go knocking on MakerDAO’s door asking them to get $NATION as collateral. You can just use PWN, and then you can use anything as collateral. So as I said, I really do think that it's an elegant solution.

PWN: What are you most excited about in DeFi leading up to the next bull run?

LC: One thing that I'm really interested in is the commoditization of lending and borrowing markets. Now seeing how we’re progressing with Nation3, one of the things that we thought about is how we can make $NATION collateral for different protocols. It’s early on in the process because protocols like Compound or Aave have a lot of requirements, but we'll eventually get there.

I'm really interested in seeing how there are newcomers that have commoditized these services, making it possible for others not to go through the lengthy governance process in order to get your token as collateral. Instead, anything can be collateral. And based on that, you can calculate the borrowing rate. Perhaps if you’re a very emerging token, you can’t have a 1000% collateralization rate, which is outrageous, but it still gives you something to play with compared to not having test collateral. So, yeah, I'm very excited about that.

PWN: Is there anything else you’d like to tell the world about at this time?

LC: We’re in the process of doing this bond with Nation3, which as I mentioned before, is a world’s first! I’d like to call out to people that are interested in doing things for the very first time to join Nation3 and help build this cloud nation.

PWN’s Cryptonatives is a Q&A series with some of the brightest minds within the web3 and DeFi space who are building and making active use of the services that today’s crypto ecosystem has to offer. Through shedding light on their experiences and lessons learned throughout their careers, it’s our team’s goal to educate the masses and further spread our guests’ wealth of knowledge.

Have someone that you’d love to see featured in the series? Reach out to us on Twitter or Discord and let us know.