Bankless - 10 Predictions for 2023 with Ryan & David

Episode Date: January 11, 2023

Tune in to hear Ryan and David share their 2023 crypto predictions on all major areas of crypto: Bitcoin, Ethereum, prices, Alt L1s, L2s, NFTs, regulation, and so much more. Also, major-major-major Bankless alpha leak towards the end of the show that you will not want to miss. Trust, anon. For the last time this year, Happy New Year. ------ Osmosis | Your Gateway into the Cosmos Ecosystem www.osmosis.zone/bankless  ------ JOIN BANKLESS PREMIUM: https://newsletter.banklesshq.com/subscribe  ------ BANKLESS SPONSOR TOOLS: KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://bankless.cc/kraken  UNISWAP | ON-CHAIN MARKETPLACE https://bankless.cc/uniswap  ️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum  EARNIFI | CLAIM YOUR UNCLAIMED AIRDROPS https://bankless.cc/earnifi  ------ Timestamps: 0:00 Intro 6:45 Bitcoin https://buybitcoinworldwide.com/halving/  https://nostr.com/  16:20 Ethereum https://twitter.com/protolambda/status/1608870249704861696  https://twitter.com/protolambda/status/1608870266582749191  https://twitter.com/protolambda/status/1608870312090955777  https://twitter.com/protolambda/status/1608870317430308865  https://ultrasound.money/  25:22 Prices https://www.kraken.com/prices/bitcoin?quote=usd&interval=1w  https://www.kraken.com/prices/ethereum?quote=usd&interval=1w  https://www.kraken.com/prices/ethereum?quote=btc&interval=1w  34:20 Alt L1s https://www.coingecko.com/en/categories/smart-contract-platform  40:10 L2s https://www.coingecko.com/en/coins/polygon  https://www.coingecko.com/en/coins/optimism  https://arbitrum.io/  https://www.coingecko.com/en/coins/starknet  https://l2beat.com/scaling/activity  https://twitter.com/ercwl/status/1609804900472619009  50:14 NFTs https://nftpricefloor.com/  58:24 CeFi 1:04:55 SEC + CFTC Standoff https://imgur.com/3ixtonT  https://www.cftc.gov/PressRoom/PressReleases/8590-22  https://www.coindesk.com/business/2022/12/13/us-judge-in-ooki-dao-trial-orders-cftc-to-serve-original-founders-with-lawsuit/  1:10:50 Bankless https://www.youtube.com/channel/UCCRxYlYOmLE2l5wxs3ckJtg  1:16:05 What Ryan and David are Bullish on 1:22:26 Closing & Disclaimers ------ Resources: Bankless 2023 Predictions https://newsletter.banklesshq.com/p/bankless-2023-predictions  ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://www.bankless.com/disclosures 

Welcome to another episode of State of the Nation. We've got our 10 predictions for 2023. David prepared this list. I'm just along for the ride. And just to give you some insights into kind of the world of live streaming, we just barely got this live stream up, David, right? You had a software update and it kind of wrecked your live stream setup. But down to the wire, we made it here for you guys.

Yeah, just a few minutes late. But yeah, made a software update to OBS. Absolutely broke everything and then fixed it right at the last minute. Yet here we are. stream must go on. And there's a lot of things to talk about for 2023, and that is what we are going to be covering today on the episode. We've got 10 subjects, 10 things we want to cover, the big categories that you all know and love, Bitcoin, Ethereum, Alt Layer 1s, Layer 2's, prices, NFTs, regulation. We've got 10 categories, a couple ones I haven't mentioned yet,

that we just want to give our predictions for what they look like moving forward into to 2023. Some of them will have more clear predictions than others, but I think we can look forward at the year ahead, pull back some lessons that Ryan and I experienced going through the 2018 to 2020 bear market and apply them to the current state of crypto as it stands today. So we're going to go and run through all of these major categories of crypto just to see what lies ahead for us in 2023. This is going to be raw thoughts, guys. It's going to come at you quick. So I hope you're ready. Before we get in, got to talk about our friends and sponsors over at. Ryan, we have so much to cover in this episode. We're going to start with Bitcoin. And I actually had to ask my Bitcoin

friends about what is ahead in the world of Bitcoin because I don't necessarily feel like I am equipped to answer that question. And so I've pulled in some extra help to talk about Bitcoin, but then we're going to go into the broader subjects that the Bankless Nation knows and loves, Alt Layer 1s, Ethereum, Layer 2s, etc. So all of that and more is coming up right after we talk to some of these fantastic sponsors that make the show possible. David, we've got the 10 predictions for 2023. I'm going to read out all of the categories we're going to cover really quick and then we'll hit them one by one. Number one, we're going to talk Bitcoin.

Number two, Ethereum, then prices. Number four, Alt layer ones, layer twos, of course, then NFTs, DOWs, C-5, that is centralized exchanges. Number nine, the CFTC and the SEC standoff. And number 10, some of our thematic predictions for 2023. Editor's Choice, Ryan's and David's thematic predictions. I'm going to have to think of mine before we get to the end here. I think, David.

And we are along for the ride, sir. Why don't you kick us off with, we got to start with old granddaddy Bitcoin, who started this whole crypto movement. Hats off to you, Bitcoin. Without you, we wouldn't be here. What are the predictions for Bitcoin in 2020? What's in store for us, David? And we're looking right now at a Bitcoin halving clock.

I'm going to read this out. 441 days, 22 hours, 51 minutes, and 50 seconds until the next Bitcoin. having. What does this mean? Well, okay, so people will notice that that is more than one year away, 441 days. But if we pay attention to the last time a Bitcoin happening happened, there is this chant that gets chanted and it starts to start slowly and then it starts to bubble up. And then it just becomes dominant throughout like crypto Twitter or at least Bitcoin Twitter at the time, which is the happening is not priced in.

And so my big prediction is around Q. Q4 of 2023 of this year, we are going to start to hear the happening is not priced in. The happening is not priced in because the 2024 happening date is scheduled around March. It's probably going to creep up earlier than March because that's kind of what happening is do. They tend to accelerate. People think it's every four years, but it's actually quicker than four years because the hash rate for Bitcoin is up only. But I think that is something to expect towards the end of this year. You are going to start to hear the words that having is not priced in. You remember this time in four years ago, Rand, when that was just dominant? I do. And I'm

curious. Okay. So how many havings have you been here for it? You remember the 2021? And that was certainly dominant. That was the chat leading a chant leading up to this. Do you remember the 2016 one? That was July. I was not here. I was not here for the 20, the 2016 having. I was part way here. I wasn't all the way here, but I was part way here. This was kind of early days of Ethereum. And then prior to that, David, it goes dark for me. I guess the one prior to that must have been in 2012 or something at that point in time. But for folks that aren't familiar, this is when the supply issuance of Bitcoin gets cut in half.

Hence the happening. And traditionally, David, as you've been saying, that has been very bullish Bitcoin price, at least the narrative of Bitcoin price. Because what is Bitcoin celebrated for? What is it known for? What is the one use case and thing that it does? It has 21 million Bitcoin.

That's it. Yes. Right. And that there will only ever be 21 million. And so that is at least the promise of the Bitcoin network. And that's what's coded in the algorithm. Of course, that is all at the end of the day. Bankless would say socially enforced at some level.

But we are approaching less and less issuance per year. It gets cut in half every four years. Now, in 2020, it felt like a lonely thing to say. But I know some of us were saying, okay, Bitcoin community, the happening is coming up. We're excited about that. Algorithmic supply issuance. Yay, not central bank back.

That's great. Take the humans out of the money. That's wonderful. But also keep in mind, Bitcoin community, that when you have in your issuance, you also have in your security budget. And the security budget happens to be a very important thing for your blockchain because that is how a blockchain actually defends itself

and provides settlement assurances. Security budget comes from primarily, issuance in Bitcoin. It's like 95% to 99% issuance. And a small fraction is transaction fees. That is how you pay the military to provide the defense service around Bitcoin. The military for Bitcoin, the analogy being minors, proof of work minors. So while you're excited about getting closer to $21 million and cutting off your issuance and less supply available in the market, now I start to wonder if the 2024 happening, the community starts to wake up and realize, our security budget is going down a lot and can we really afford this?

Do you think that'll be a new conversation and a new dynamic that we didn't see in the last decade? It's going to be interesting because that is where, you mean the last happening, that is where we saw some of these hardcore bit corners start to consider that angle. Hazu being one of the big ones that was previously a very hardcore bitcorner that started to come around to the idea of a security budget happening. I do not think that this happening is the last is the happening that triggers a weakness in Bitcoin security. I still see FOMO. I still think. Yeah. I still think like there's Bitcoin's lack of security is a number of happenings away.

And so I think that I mean, just to play it forward how it happened last time, Bitcoiners start changing the happening is not priced in. Ethereum people are like your guys' security budget is cut in half. I think it's fundamentally bullish either way. for the same reason that we are bullish on the supply of ether and ultrasound money, it's the same reason to be bullish about Bitcoin. But I don't want to hang on that happening too much because, again, like, this is actually in 2024. And so not happening this year.

It's just like you're going to start to see this rumbling. And so I asked my Bitcoin or friend, C.K. My podcast co-host before you, Ryan, what to watch out for in the world of my ex. My ex podcast co-host. Yeah. And what to watch out for in Bitcoin in 23. And his answers were Bitcoin mining and this thing called. Noster. We'll take those one by one. But I think the things to watch out for Bitcoin

when it comes to Bitcoin mining is the consolidation of Bitcoin miners into either more central large entities or into newer entities that are also energy production, energy producers. And so if you look around, actually, I was doing a little bit of research before the show. If you look around a lot of energy producers across various countries are also becoming Bitcoin miners. And now that could actually, if you believe the Bitcoin proof of work thesis, lead to integration of Bitcoin into the real world power supply and the decentralized power grid and actually lead to the decentralization of Bitcoin mining if that is the trend.

The other trend it could be is that a lot of these weaknesses in the current mining ecosystem, a lot of bankruptcies for the Bitcoin, the big, big Bitcoin miners lead to further consolidation centralization. That is something to watch out for. That is a theme to watch out for. The other thing to watch out for is Noster, which is something that Eric Wall is predicting just does not gain any traction. But this is the social media for the Bitcoin world, for Bitcoiners, social media by Bitcoiners for Bitcoiners. This is something I'm not very familiar with, but this is gaining a ton of attention in the Bitcoin world. And it is basically an implementation of sort of decentralized social media, but using

Bitcoin as the settlement layer for data. And so this is something that is gaining steam in the Bitcoin world. Really? Yeah. I wonder how this works. So they're actually, how are they doing that without Bitcoin being kind of an expressive base layer in the way? I don't know.

I don't know. I don't know. But this is got a bunch of apps and this is something to probably to explore if you are, look, chess, like settlement assurances with chess as in like I make my piece and I don't know why you want to put that data on the. blockchain, but this is something that is being pioneered out of the Bitcoin world. It's really interesting that mining is a thing that hardcore bitcoins are really excited about. To me, that's just not an area of interest for me, like personally.

And I just like, what I see is a lot of, you know, the consolidate, do you see as someone tweeted out, I think this was Evan Van Ness that just just before the end of the year, last year, over 50% of for the last week of blocks or something of all Bitcoin. blocks have been produced by one of two centralized miners. Mining pools? Or mining pools? Mining pools? Yeah, mining pools.

So this kind of centralization is, I'm not, you know, I don't know. I mean, I guess there's this utopia where all of the major energy companies, right, around the world become producers of Bitcoin miners. But we're not really seeing that. All we're seeing is kind of the shakeout of the bear market and just more consolidation in I don't know if I'm seeing that. And that is something and the kind of why I'm putting that as a conversation in this agenda is that is something to pay attention to in 2023 is where the diffusion of mining power lies. At the end of there's just some bankruptcies that needs to happen.

A6s are going to get distributed. But I will say that mining pools, I would say, are not a pretty weak form of centralization in the same way that I can take my, I can either write. run my Ethereum staking node through Rocket Pool if I choose to or run it solo. Like mining pools don't have ownership over the ASIC units. And so that's actually a weaker form of centralization. I get that distinction. Overall, what's your take on Bitcoin? So there's some excitement for the happening.

Are you bullish Bitcoin in 2023? Well, I had to ask my friend about what the 2023 has in store for Bitcoin because it's like, it's Bitcoin. Not on your radar? It's, well, it's not on my radar, but also it's like, There's no roadmap. That's the point. And so there's designed to be not much on the roadmap for Bitcoin. That's part, actually a feature that the Bitcoiners enjoy about Bitcoin. I do think it's down too much and is due to go up maybe in 2023. So we'll talk about that a little bit.

What do we got next? We've got Ethereum, I think we're talking about. So what's the prediction for Ethereum? Ethereum, yeah. And I got this fantastic thread out of Proto Lambda. And I've lost the particular tweet. but it's about how many hard forks will Ethereum see this year? And Proto Lambda says we may see three Ethereum hard forks this year. I checked this take with Timbako, and he was like, hmm, probably just two. And so, again, rough consensus out of the Ethereum land. But the two is a lot.

Two is a lot. Two is a lot. And what are those two hard forks? Shanghai and Cancun are the next two hard forks. These are the execution layer hard forks. Shanghai, of course, might as well be called the withdrawals hard fork that is slated for probably March of this year, pessimistically April.

And then Cancun would be EIP-4844 or Proto-Danksharding, also partly named after Proto Lambda here who's got this tweet. But that is what is in store with Ethereum hard forks this year. Probably almost certainly two hard forks, Shanghai to enable withdrawals in March, April of 2023 and then Cancun later in the year to enable 4844. And those are going to be the three, the two major Ethereum protocol upgrades for this year. I hear people are talking about Cancun in Q3 as a possibility. And if EIP 4844 it gets shipped in Q3, that would be hugely bullish.

It would be very accelerated, yeah. Can you remind people what 4844 is? Oh, so you said it's, you know, proto-dank charting. But what is the net effect of this for the, Ethereum ecosystem for crypto. Yeah, certainly. It gives roll-ups a first-class status on Ethereum. So it really is changing the way Ethereum architecture is to really enable layer

twos to take off the brakes and be unconstrained. And because what do roll-ups do? They post data down to the Ethereum layer one. 4844 gives a little sandbox of data on the beacon chain for roll-ups to post-data-2 and to really allow roll-ups to a use. use the beacon chain for data availability, which allows them to have orders of magnitude increase in speed and cheaper transaction. Don't you think then Cancun is like the Alt Layer 1 killer?

Yeah. That's always been the case. I guess what I'm just saying is right, like we expect another bull market to come and eth main net gas fees to increase. But now instead of the transaction volume going to alternative layer ones, it is so cheap for that transaction volume. It's almost like close to zero cost for that transaction volume to go to layer two's, and they will be much more mature by the next bull cycle comes around.

If I was an alternative layer one, I'd be a little bit worried about 4844 and Cancun, and I'd be looking at my strategy and maybe thinking about how I might become a roll-up and get my security from Ethereum because it's way cheaper. Certainly, certainly. Moving on in Proto's predictions, he, of course, predicts that, 404 Prototating Sharding will ship on Ethereum Mainnet. So we've covered this. But he also says, the line between chains will start to blur

due to eigenlayer, suave, and large layer 1 stakers offering different sequencing as a surface solutions. And so this is also, this is a pretty like 401 Ethereum level take. But eigenlayer is something that more and more people are clamoring about, a really quick TLDR on what eigen layer is. It's generalized security for, other computational resources using staked ether. So if you are staking your ether,

you can sign up for additional slashing assumptions, slashing conditions to secure something else, such as an Oracle. And so you say you're a solo staker with 32 ether, you're already signed up for the slashing conditions of validating incorrect blocks, but you can sign up for an additional slashing assumption for something else, as in an Oracle layer. or a data availability layer.

And this is something, eigenlayer has captured a bunch of nerds' attentions, and people are talking about this more and more and more. So one of my predictions for 2023 is eigenlayer starts to be talked about even more, probably throughout all of the entire year as we kind of reason about what this thing can do. Do you know a date for eigenlayer when that ships?

When that ships should maintain that? No, I do not. No, I do not. So this is not an Ethereum protocol. This is not like part of the all-core devs call. this won't be an EIP. This is a startup that is working on this problem that is separate from any sort of core development from Ethereum. Yeah, it's just leveraging the economic security of ETH the asset to economically secure more things. That's hugely bullish for ETH the asset, in my opinion.

It's also just, man, it adds another dimension to the whole game here and the economics behind it. And I'm both excited and simultaneously a little terrified of the downstream effects of this. but that's super cool. And, I mean, if I'm going to put on my ETH Maxi hat again, I would be even like any time, any reason you need to have a specialized chain that's not Ethereum, any other Alt Layer 1, eigenlayer kind of is like, well, I can turn that into a commodity

and I can just use ETH staking. This is, remember that take on the weekly roll-up that we gave a while ago. I can't remember who, I think Jimmy Rassua or something. He said, EganLayer will enable halal alt-Lar ones for ETH Maxis. Well, I get that. And what I'm kind of worried about is just the stacking risks that we don't realize that get hidden in some ETH that you, you know, stake somewhere.

And I'm worried about some big slashing events for people who don't anticipate the risk. They're looking at, like, what this means is there'll be all sorts of ways to earn yield on your ETH besides just staking. And hey, do you want this, you know, 5% for going over here and using the, yeah, I'll take that sign up for 5%. Sounds great. But you don't realize in the background that there's also the stacking risk. associated with that. And something bad happens, David. As you know, it will.

Give it enough time. And then boom. Have you ever played a Skyrim and like loaded up 20, 30 mods? And they all start to like conflict with each other. That feels like that. That feels like what Egonlayer could do. Yeah, exactly. What else we got here?

All right. Moving last in our predictions of in the Ethereum ecosystem. I think I just want to raise the question, Ryan. What do you think about the supply of ether throughout 2020? working so freaking good, isn't it? Look at this, man. Well, do you think it'll be deflationary or not deflationary? Because if you look at the chart right here, like, I don't really know.

By the way, we were at 3,000 ether earlier, just a few hours ago and we burned a bunch in the last, like, little bit. But like, what is this chart telling you? First of all, let me just say this. Let me just say this. This is kind of a vanity guess, right, whether you say it's inflationary or deflationary. First I'll say, who the F cares? Click that button there. Simulate P-O-W.

look at what it would have been had we had proof of work 1.4 million ether issued in the last 117 days if we were on proof of work versus how much is it unsimulated 2,900 see who cares over a million less eth issued oh a million 400 don't forget that extra 400 yeah 1.4 million

1.4 million was of eth that would have been issued was not issued. That is the bottom line here. Whether this thing is vanity metric, inflationary, or deflationary, doesn't even matter. That is $1.8 billion that we have not issued. It's so bullish. It's so stupid bullish. I don't even know. Like, this is, okay, here's another thing I feel like is going back to the happening. It's like, man, ultrasound. Dot money totally takes the happening's thunder, doesn't it? Yeah. I mean, like, I find it really hard to get excited about a happening when I have, when ultrasound money, not money exists. Anyway, I'll take that kind of the vanity metric.

I still kind of bet that we end the year, deflationary is my call. I think block space demand increases, even post-EIP 4844. I think we're still deflationary on the year if I had to call it. Yeah, I think that's right. And that's because I tweeted this out that ether, it's easier to burn ether than it is to issue it. As in when there's demand for Ethereum, we burn ether way. faster than we issue ether. There's a cap on how fast we can issue ether. There is absolutely no

cap on how fast we can burn ether. And so just because there's a gap, growth is constrained and contraction of supply is unconstrained, I think it's rational to say that we will burn ether. We will be deflationary as in 2023. And this is also what Proto Lambert says. So he agrees with us that will be net deflationary in the second half of 2023. Good. He's smart. He knows what he's talking about. That's great. All right. This is number two, Bitcoin, Eith. Number three is prices.

We do some price predictions, David? Price predictions. Price predictions. I don't know. I don't really want to make specific price predictions because you and I are not necessarily on our skill set, nor is it anyone's really skill set. No one really knows. But I do think we should take our time and reflect on what prices did during 2018 to 2020.

And so we've got our price service provider crack up on the screen here. And if we zoom all the way back out, let's see if I can drag. No, I cannot track. I might have to go to Trading View. But do you remember the Bitcoin price action between 2018 and 2020? Because it threw everyone for a tizzy. Bitcoin pricing action between 20, wait, what you say? 2018 and 2020. 2018 and 2020.

I mean, I remember a successive down. There was basically, yeah. Yeah, zoom in on this. This is exactly what I remember. Some chop. And you saw at kind of the bottom. this is in 2018. This happened, I don't know, three times it looks like from the charts,

something like this, is we had a big massive leg down. And like, you catch you breath and you're like, oh, my God, I'm glad that's over. Right. And then we rise up. There's some hope. We get some green candles for a couple of weeks, maybe a month, maybe two goes by. And then boom, you get hit with the next leg. Is that what you're talking about?

A little bit, yeah. So at the top of the 2018 market, Bitcoin is $20,000. And then it went down 83%, which, I mean, it was, about roughly where we are now. We're not down. Bitcoin's not down that much. But then it, from the bottom, it goes up three, it goes up three X. It goes from $3,000 to like $14,000 in the middle of 2019. And then what does it do after that? It goes down another 70%. Yeah. And so like me saying Bitcoin went from $3 to $14,000 down to $4,000. Like, think about that in today's terms. Like it's something like, where is it now, like 15,000 back up to $4,000?

$40,000 back down to $18,000. Yeah. And Ether did the same exact thing, right? Except more. Exactly. Yeah, except worse, right? And so here is the top of the 2017 market, down 94%. And so then it bottoms out at around like $80.

And then it goes up to $380. So people who bought those at that $80 Eath made like a three and a half X inside of a year. And then what does it do after that? it goes down 75 more percent again, right? And then that's when DeFi summer started. So, like, we don't really have any specific predictions. I'm going to go ahead and say, I don't think you have a specific price prediction,

Ryan, but I'm going to say people should be cognizant of how fast these markets can whip around or how much they can whip around inside of a year. So from a timeline perspective, we're kind of mid-2018 or so as far as, like, length of the bear market, aren't we? I was saying it's almost lining up pretty perfectly because the top of the 2018 bowl market was like January of 2017 to January excuse me December months off I guess yeah it's a few months off so like if we want to I just close the tab but if we want to like that's a rough analogy though right so 2022 is like 2018 yeah so then 2023 should be I think we're like right here's ether price I think we are like right here in 2018 terms I think what you're saying is I think you're trying to draw lessons from the previous runs and you're saying, hey, expect run-ups and then major dips, major crashes.

Yeah. It kind of test your conviction. This will probably happen in 2023 and partially into 2024. Are you just, but like, is it a fallacy to think that every, every bear market plays out the same way? What I remember going through the last bear market and everyone was like, oh, next cycle, next cycle, next cycle. And I was like, everyone's saying like the next cycle. Like, doesn't that mean if everyone's saying it's not going to come? and then it totally came.

And so I think that you just assume that it's going to play out exactly how people expect it to with another cycle. And then really I mean to say is like I think what people should watch out for is like Bitcoin might have a run up to $40,000. Ether might have a run up to $3,000. People are going to get really bullish. People say the bear market, the bull market's on and the bull market's not going to be on. And it's going to throw, it's going to buck people off.

And people are going to try and trade it and they're going to on net lose money as they can try and trade that thing. So this is why I was never a full believer in the super cycle, David, is just I am still a believer. I think this has proven out. Like if you if you kind of zoom out, right? Is crypto is just plays out, markets play out in fractals. So this is the next kind of fractal. We're just at higher numbers on the highs and higher numbers on the low, but it's just going to play out. And that's kind of repeated every cycle.

And now the cycles might lengthen. They might, you know, there might be kind of different timelines involved. I'm fully anticipating and I think the base guess is probably the right guess, which is just playing for another fractal. It's going to happen in the way it has in similar bear markets. Now, people always interject, but what about macro? Macro is completely different. I don't know if you have a take on that,

but I guess my take is I don't actually think macro is going to affect the crypto cycles in the way people think it will. I think just the fractal will play out how it's going to play out. maybe it could be kind of elongated or dampened or something like that by macro, but I just think we're kind of, it's all in the charts. It's already destined. It's already preplanned that it's going to play out this way. I think that's right.

I think macro, like if the Fed had this immaculate pivot, it would nudge crypto prices in a particular direction, as in like the Fed's like, all right, we're going to ease up on interest rate. Use your money again. Yeah. I think that'll be bullish. I think that'll be a plus 20% day, a plus 50% day. I don't think it will create a bull market.

Crypto needs to create a bull market under its own steam. And that takes time, that takes building, that takes innovation. And so, sure, we could be, like, nudged by macro in particular directions. But crypto is going to come out of this bare market under its own steam, not just because something else happened to us. So we think that's Bitcoin. Ether's the same thing. Now, you have a take where you think ETH is going to lead Bitcoin.

Always. And I guess maybe that's a play on kind of the ratio, too. Is that where you're showing? Bitcoin ratio. And I know you have said previously that ETH has led the last bull markets. I think I know what you mean by that, which is like ETH use cases, if not the asset price, but ETH use cases certainly have led the previous bull markets. And you think that will remain true?

Or do you think it's kind of true in a different way for the next bull cycle? What do you think happens to ETH? Yeah, I think ETHER, the price of ether has not led. bull markets. I think it's gone, perhaps it's followed Bitcoin, perhaps it's gone in tandem with Bitcoin. But every time there's a bull market, it's because of something on the Ethereum app layer. That's always, that's been true as long as Ethereum's been in existence. ICOs first. ICOs in 2017, DFI summer in 2020. Well, Bitcoin and Ether did absolutely nothing while we have this amazing bull market in the defy space, which ran into a bull market in

NFTs. And then Ether and Bitcoin rocketed. And so there was a bull market on the Ethereum app layer for a full year before Bitcoin and Ether prices reacted. I expect that to play out again. Yeah, I think I agree with you. Do you have any predictions on the ETH Bitcoin ratio? I think it is going to do something like that. Go up. Yeah, it's going to go up.

I am not a charter. I don't have a crystal ball, but I am positioned to benefit from an increased ratio in ETHBTC, which is why the current price action is exciting to me. And remind me, where's the flippinging? Where are we now and where's the flippinging? So right now we're at 0.07. 76, yes, 0.77. And then the flippinging is about here.

We need a game here. At 0.1.4. So it needs to double. ETH price just needs to double. So if Eith price hits, what, 3,000 or something, while Bitcoin stays stagnant at this price, then we flip in. Is that right? Yeah, we need to hit 0.159.

We need, if Bitcoin stays exactly the same price, we need Ether to be $2,700. And we will flip Bitcoin. That doesn't seem that far away. It doesn't seem that far. I'm still not calling it for 2023, but it feels like it approaches. It approaches. All right, Alt layer ones. That's the next category, David.

What are the predictions for alternative layer ones? Alt layer ones. And so I've got Coin Gecko pulled up with smart contracting platforms. We got BNB, Cardano, Salana, Pocodot, Tron, Avalanche, and then I think that's all of them. There are some other ones as well. But I think I just want to get your broad take, Ryan, on the landscape of what it's like to be an Alt Layer 1 right now.

Like, where do you think the Alt Layer 1 ecosystem is in its current form? Well, I think it's, it had a narrative run up on the use case, on the idea and on the entire narrative that eth gas fees, eith transaction fees were too damn high. And that was the value proposition of kind of eth killers. Very few of them, if any, developed their own independent set of tools. Many of them were EVM based.

And so they kind of just glommed on to the existing Ethereum tools. I think Salinas may be somewhat of an exception. They have a different developer community. They have some unique tools like Phantom. So there's some life there. Cosmos also a little bit different. Cardano really hasn't done anything. It's just been a lot of talk.

There's like nothing really, not much you can do on Cardano at this point. So I think the back to EIP 4844 being sort of the alternative layer one killer is if you, if you lose the value proposition of being a cheaper version of Ethereum, what then do you have? And I think they're in a precarious position. Though I do think many of them will come through this perhaps a little bit stronger. Many of them? Not many of them, some of them, a few of them. I think one or two will come through them.

It's like if you're talking about Cosmos as an entire ecosystem, right? There are many different app chains and count that as one. That might be one. I think Solana might pull through this. Nothing's really happened with Dot, David. Dude, I know, man. So, like, okay, so we have BNB. And so you say, like, what is the place of an Alt Layer 1 in the face of EIP 4844?

I think that's definitely something to consider. But also, like, what's the place of an Alt Layer 1 when Binance Smart Chain exists at the same time? I know. Which is a gargantuan of a chain. And I think it's, it's, you can't really call a BNB chain an Alt Layer 1. It's something else. But if you're going to compromise on decentralization, and security.

He may just use Binance Smart Chain. Yeah. I mean, I know. It's this place in the middle. It's kind of the idea that the middle cannot hold. And that's what some of these chains are doing and trying to do.

So I'm not bullish on them. So looking at some market caps, Binance Smart Chain is coming in at $45 billion. Cardano's coming in at $11 billion. Salon is at six. Sala is at six. Can you show that? Can you scroll to the red a little bit?

Yes. Yes. Oh, okay. Tron is at $5 billion, Avalanche at 3.8, Cosmos at 3.2. And I actually don't really, and there's actually, Ryan, you've been saying Cosmos while we were talking about Altlayer once. Coin Gecko doesn't actually put Cosmos in the smart contract platform category. No, I get it. It doesn't have smart contracts on Cosmos, the app chain.

You have to go to, like, osmosis. Yeah, well, like that. I, I, at Cosmos at 3.2 billion dollars where Binance smart chain is at 45 Cardanos at 11 and so long as that's at 6 makes me really bullish on Cosmos. It's different though, Dave. So here's why I'm bullish, because it's different. Oh, wait, here's why it's different in my opinion is just because, um, uh, you can, you can be bullish on the Cosmos ecosystem without necessarily being bullish on atoms, the asset of Cosmos. Yes. Which are two totally different things.

I'm bullish on. The ecosystem. You just, it's, if people get that confused, then they'll run into a bad time, I think, investing in Cosmos. That's a good point. It's very different than investing in even Binance, which if the Binance ecosystem grows or the B&B ecosystem grows, then value should occur to B&B because that is the kind of the unit of account. It is the, is the ether of BNB chain.

But Cosmos is just, I mean, that, that should scale with the amount of app chain. that are using the Cosmos Hub, and they don't even have to use the Cosmos Hub, David. They can use their own mesh security. They don't have to use Cosmos at all. And so it's kind of an apple, I think it's an apples to Orange's sort of comparison. Yeah, I think that's a pretty fair take.

We will see. I do not think there's a lot of Altlayer ones out there. Like, again, Cardano, Solana, poker dot, Tron, Avalanche, Cosmos, finance smart chain. How many can actually make it through this bear market? I think if you have a cult leader, you're much better situated.

That's why, like, it's ironically, it's like Cardano is not going to die. ADA is not going to die. Because it has a few to use cases. Yeah. I hate that that's probably right. Isn't that? Like, don't you think? I'm like actually relative to some of these others, I'm bullish on that.

On ADA, right? Just because of the cult of Charles? Yeah. And look, we said it before. We said this all the time in the last bear market is. If you have any doubts about which, like, if you're, if you're questioning, if you're wondering which chain you should invest in, try to use stuff on the chain. Right. Like, like, does it work?

Can you do defy things? Can you do cool things on it? Is it a step change from something that you might find an established ecosystem like Ethereum? If it is, that's bullish. Like, so many people watch the YouTube and they don't actually do the work to run the software and to actually use the application. It's as simple as that. Until there's applications on some of these changes that I can actively use, I'm just not bullish.

Activity, yeah. Yeah. How do you, I don't know how to measure Cardinal blocks based demand, and that's probably an indication. All right, should I move on to layer twos? Yeah, let's do it. All right, layer two's. Of course, layer two beat.

Right now, I declare that layer twos are in a bull market of activity. And one of the few areas of growth that's happened in the last year, which was a terrible year, was layer twos. Ryan, the best asset to hold last year was, if you didn't know, this token called GMX, which is an application on Arbitrope. And here's the price chart for GMX. Look at that. How does it go?

It's going up. It went up in 2022. That is the one of like three tokens that went up in 2020. Three defy tokens, right? No, three tokens, that's it. Oh, my God. That's it. Besides stable, stable coins stayed flat, hopefully.

Stable coins stay flat, yeah. So that was on Arbitrum. Arbitrum ecosystem is just running circles around almost everyone else. Arbitrum's got $2.3 trillion, or trillion, billion in total locked value. Like, this was a 2022 bear market, and total TVL on Arbitrum stayed about the same. Yeah. I love the Arbitrum optimism rivalry because I think they both make each other. Yeah, they make each other better.

And I just love that they're both there and they're both fully. I can honestly say I support them both. And, you know, great. Look at this. Look at this. Here is a half a million dollars on optimism in January of 2020, a year ago. And now we're at $1.27 billion. We had growth in layer two's in this last year.

Hit activity. Can we hit activity on some of these? Does that story? This is transactions, right? Transactions, yeah. Total locked value, which is a metric, an important metric, not the only metric, but it's kind of a vanity metric. And then you have activity. Activity is transactions.

And like transactions are just like up a whole bunch. If you go to the top, go to the top here of L2B and hit activity on the right and see aggregate activity. And I love that line there. That line in blue, I think, is Ethereum mainnet activity, isn't it? Correct. Yes. And we're above, where now we've been consistently above since October-ish, Ethereum Mainnet activity on, layer two is that has been a flippinging in the Ethereum ecosystem.

Yeah. And we're the scaling factor, 2.48. That's the highest I've ever seen it. Scaling factor is how many times layer twos on Ethereum are transacting one Ethereum's worth of transactions on the aggregate layer two. So there are 2.48 times the amount of transactions of the Ethereum layer one happening on layer two's. My prediction, Ryan, I put this in the newsletter, is that this number hits five.

And I think that's a pretty safe prediction for 2022. I think it's conservative. But what happens if, I guess these are used transactions, right? It's not total capacity, is it? It's not total available capacity. So capacity is way, capacity might be like 10 or something. The scaling capacity, we actually don't really know the upper bounds to layer 2's. The scaling capacity could be like a 10x.

And when we hit 4844, it's going to be something like 100x. So we've been bullish layer 2s relative to Alt Layer 1. for a long time. And for a good portion of 2021 and for a good portion of 2022, that has been the wrong bet. In 2021, that was the wrong bet for that one year. Yes. And then into like the first part, the first three months of 2022 is kind of the wrong bet.

But again, bankless thesis operates on longer term horizons, right? In crypto, you either invest in the trade level that is like kind of. a daily to weekly sort of thing, or you invest in the narrative level, the timeline there is like every, you know, a few weeks or months, or you invest in thesis and fundamentals. Your timeline there could be years. I think that we've been right on that call. I think so. It was the timeframe that was at odds with people. Right. We were stuck in kind of, people are stuck in a narrative timeline that lasts in months rather than the thesis timeline, which is like years. That's why, you know, people say this investors say this all the time, but a lot of arguments on

crypto Twitter are just time frame arguments. Timram arguments. Symantics, yeah. People arguing past each other because the timeframe is wrong. And we've consistently say bullish layer two is relative to alternative layer ones. And that was, you could be laughed at for saying that in 2021, couldn't you? Right. Well, now it is the inverse.

So I've got the optimism chart up on the screen. And this optimism, the OP token, launched in June. So we have seven months of data. But like, do you see the bear market in that? chart, like, no. Like, you don't, you don't really see the FTX contagion. You don't really see Thurus Capital getting liquidated. Like, this does not look like a bare market chart. And optimism just dropped their token with a $5.5 billion valuation fully diluted. Arbitrum hasn't even dropped their token yet. And so it still got that in the hopper. And like all these other

like layer two tokens are doing really, really well. So what's the prediction, bullish layer two's? I'm I'm I'm I'm I'm the bowl market will continue to be hosted by layer two as it has been for the past like six plus months these ecosystems are very very very very much alive yes the most alive thing in crypto in my opinion 100% 100% I'm trying to click these things oh that's because what else I have here oh starknet also doesn't have its token released right and so like there's still a bunch of hype and attention and finding attention in bull bear markets is really hard and we have Arbitrum and we have Starknet and these communities are extremely strong. There's not even a token out there for them yet. ZK Sync as well. ZK Sync as well. ZK. EVMs, scroll, making a significant progress working on a test net right now.

And so here's one of Eric Wall's predictions is that Ethereum layer two TVL reaches above $10 billion. Where are we right now? We are at... Five, four or five? No, less than that, I'm pretty sure. Three? $4.5. $4.5 billion. So he's expecting a little bit more than a doubling of TVL.

Conservative? Conservative? Yeah, I call for 25. 25 is extremely bullish. Yeah, and that may bleed into next year. Let me just say that. But definitely by the end of 2024, I would say that 25 is good. Yeah. Cool. All right. Bankless Nation, we got some other conversations that we're going to talk about. some opinions as to where NFTs are going in 2023. Ryan's going to have to ask me, but we also have to talk about what is the state of CFI in 2023? Because for better or for worse, CFi is a fundamental part of how crypto is going to be. And then also, we got to talk about regulation

because a lot of things are going to be happening in 20203 as it relates to this is SEC and the CFTC. There are some specific cases that we're going to call attention to that are cases to watch. And then Ryan, I had Dow's in the original agenda, but I actually replaced that with bankless. So what's coming for bankless in 2023? Because we've got some plans. And then what Ryan and David are bullish on. So all of this and more right after we talked to some of these fantastic sponsors, that makes this episode possible. Back with our 10 predictions, went through the first five. Number six, we've got to talk about

NFTs, David. All right. I am the student. You are the teacher. Tell me about NFTs. What's going to happen in this crazy world of overpriced JPEGs? It's just JPEGs? What are NFTs to be with and where are they going in 2020? Yeah, I think this is something that we can draw a lesson out of the 2018 to 2020 bear. We had 20 we had ICOs that just totally decimated the brand of crypto. Sadly, this bear market, we have two things tainting the brand of crypto, one of them being FTX. Other one of them being NFTs. If you go into like any like normal internet forum, non-crypto forum and you say the word like NFT, you just get bullied. Like you, you, this, Please leave.

We don't want to talk about your stupid entities. It's always a three-letter acronym. That's a problem. ICO, FTS, SBF, NFT, RSA. Yeah, we should. Okay, so, but what did we see? What lesson did we learn from 2018 to 2020? Like, ICOs, they really just turned into governance tokens.

They evolved. They got better. All of the fraudsters and the scammers and the short-termists left this space. and then what were we left with, capital allocation and tokens. And that turned into Dow's, that turned into governance tokens, that turned into airdrops, that turned into yield farming, which started good and did bad. I think NFTs will have a similar arc. And actually, I think NFTs in their current farm are in a much better spot than ICOs ever were.

Bored ape, Yacht Club, mutant apes, cool cats, pudgy penguins, azookis. These are like real efforts by real teams to produce real things. And so all of the short-term NFTs got just pushed out already. And now there's a flight to quality projects. And so this is what I see. I see NFT teams are going to really fight for their market cap. They're going to fight for, you know, raising the value of their NFT. That's kind of the purpose of these whole teams to begin with.

And they're going to do that through raw innovation and refinement as to whatever their product is. So you think that in the same way ICOs were a complete laughing stock, NFTs are a complete laughing stock now, but what we saw is the transformation of some ICO tokens. Let's say all the sketched teams and the scams, they just died. Those projects dried up and died. They left. They're gone. But the ones that remained like the, well, Uniswap didn't have a token, but I'm thinking

of like project like synthetics or Link. Rocket pool. These projects remained and they transformed their token into utility types of, of tokens, at least the utility is some governance participation with the potential promise of future cash flows, right? And that was a big pivot from a time we said all tokens are worthless to, hey, some of these are actually worthwhile. You think the same thing could happen with NFTs. This would imply that NFTs add some sort of utility. Is that the resurrection of NFTs, that they become more than just the JPEG? There's something else to it.

I think that's right. And this has been the trend that I've noticed in the crypto space. First we created Bitcoin. It was this static, collectible, no utility asset. And then after every single asset that's gotten adopted by the crypto space after that has had some form of productivity, some form of utility. What can you do with Ether? You can stake it. What can you do with Ether? You can put it in Defi. You can use it as gas to pay for stuff. So Ether has a lot more utility than Bitcoin. Bitcoin has this blessing of getting to be this static inert collectible asset. Same thing with NFTs. We created Cryptopunks. Cryptopunks have this blessing of being able to be this inert collectible. Every single other NFT, board apes, azookis, penguins, unlock some sort of access for their holders, some sort of privilege famously, you know, like nightclub parties in New York. If you're a board ape, that's kind of the brand or yacht potters or whatever.

But like each one is going to provide utility and reasons for its community to hold them and buy them and own them. And so my claim for 2023 within the world of NFTs is that NFTs are the closest prototypes to Belaghi's network state thesis that we have. And so I think we start to look like these NFTE like communities start to look like some sort of prototype network state idea in the metaverse. Yeah. Just what's the link to Belaghi's network state idea? These are just community. These are just communities that believe in something have a shared set of values and are passionate and are on the trajectory towards building out a universe so blagely's network state is really about getting people with like like minded people together and then physically instantiate in the world

somewhere i don't really think that we're going that far but one of his big um metaphors for the his network state was like with google or facebook if you worked at facebook you could be You would have access to any Facebook campus all over the world, and you would have this little badge. You could, like, get into the Facebook building, no matter where that Facebook building was. A corporate privilege. Corporate, exactly. And so he said that this is starting to look like a network state. I think that's going to be largely similar with NFTs, not necessarily in the real world, but also not that.

Like, there are Cool Cats meetup. I've been to a Cool Cat meetup in L.A. The Board Apes have parties all the time. But then there's also going to be similar vibes inside of virtual lands. Like the board apes are building out other deeds. The board apes aren't other Yuga Labs is they're building out virtual places for their token holders to be able to experience. And I think that is starting to look and feel like Belaghi's network state idea. I think that hits on the current survive, like the current cohort of NFT projects that we have.

But I also wonder about a new cohort of NFD projects that are kind of built during this market. So we're talking about NFTs in some existing communities, but we haven't yet touched, like, gaming NFTs. Are they going to be a thing this year? What are artists going to do? Like sound NFTs, music NFTs, that sort of thing. We're not even talking about that here, and I think that's a bunch of latent potential.

Here we are looking at a NANNFT folks tell me is this is an index of NFT projects where you can kind of track price over time. If you go to the top here, David, what are we looking at charts? This is across different sectors. Blue Chip is the orange line here. And so I guess maybe I'm asking from a price perspective, to be honest, it's not down that much.

I think this is all priced in ETH terms. This is a price in ETH, yeah, his price in ETH. Which is honestly, in my opinion, the right denominator for any sort of Metaverse item, like an NFTE, is you want this to appreciate relative to ETH. It's kind of the unit of account here. and I guess I'm wondering from your perspective, do you think the indices as a whole like art or Blue Chip, the top 10 NFT projects, or Metaverse, or gaming, or social, will they appreciate relative to ETH?

Do you think that's a way to think about this market? I think that that is the goal that NFT teams ought to have. Whether they actually do that or not, I don't know. But that is, in my mind, why do NFT teams, centralized coordinated teams exist? It's to increase the eth-denominated value of the NFTs that they represent. And I think this bear market, 2023, is going to be the time where teams get really scrappy and innovative to encourage an appreciation of NFTs in ether terms. That's what we're all trying to do, increase our value in terms. You've got to nominate each terms.

Okay. regulation David what do you think is going to happen? No regulation comes after CFI I don't really have anything to say or so I'm just going to stop sharing screen and we're just going to talk about CFi really quick because the Cfi landscape is being stressed right now. Coinbase as of today announced that they are doing a round of layoffs just because it's crypto winter. Another 20 percent and other 20 percent. Crackin did a round of layoffs Gemini did a big round of layoffs and so it's I mean layoff seasons I would say it's not behind us because we've already done it all.

But, I mean, FTCS really soured everything as it relates to centralized entities. Like, no one wants to touch, no one wants to, like, hear the word CFI these days. So I just kind of want to get your perspective as like, in moving into 2023, what's the state of CFI? And how do you think that's going to play out for the next year? I think one thing that's true is we can't throw out the baby with the bathwater, right? So, you know, crypto, it's just, just, it's so, they're just like a pendulum. They go to extremes on one side or the other. And so it was centralized exchanges can do no wrong.

Put all your money in these centralized exchanges. Centralized lending. It's glorious, amazing. Why use the blockchain? You have FDX. Like, why blockchain? Yes, all of these things. Let the centralized entities use the blockchains.

You just use the centralized entities. Exactly. And so we've swung from that side of the pendulum to this other side, which is a little unhealthy, and that we're like, oh, all centralized exchanges are bad and evil, and we don't need any of them ever,

and I hate them. And the reality is there are some good actors in the centralized exchange space, and I think the vast majority of bad actors have actually been washed out at this point. So the ones that survive, and there might be still some bad eggs in the bunch, but the ones that have survived

are largely the ones that have done things right and have begun with a long-term, perspective. So I think that's important context to this. But I think it'll be a long time before we trust centralized C-Fi lending providers again. I mean, Celsius, BlockFi, Voyager, even Terra, Luna, to some extent. I know that, you know, like had the anchor protocol, just these yields coming from nowhere, it'll be a long time until we trust those things again. And I think that's a good thing. So this means more in the DFI space. There's also, David, we've got a lot of things to just tie off from 2022.

So FTCS is not completely resolved. That's in bankruptcy court. So is Celsius digital currency group, remember? It's like we ended last year and that's the last domino default. It's still kind of wobbling. It's in this space of it hasn't quite fallen over yet. And it's still like up-ish. And something's going to happen.

The leaning tower of DCG? Yeah, I just want that thing to be over. Even this morning, there was kind of Winkle Voss twins tweeting at Barry Silbert and calling for DCG, the parent company of Genesis, to exit Barry Silbert. It said he was unfit, I think, was the letter from the Winkle Vosses at Gemini. So $900 million of retail funds stuck in Genesis. doesn't feel good. So that all has to, that all has to sort itself out too. I don't know. What's your, what's your, what's your take on the exchange world in 2023? I've got two, two C-Fi takes. One is that

2023 is going to be dominated by the court proceedings from washed out actors, right? We got FtX, we got three hours capital, we got Celsius. We're perhaps about to have DCG. So like, that's going to, what is the bankless weekly roll-up going to be? Like, there's probably going to be a section in every single weekly roll-up that's like, here is the most recent... An update on bankruptcy. Bankruptcy updates. That's going to be a huge C-Fi theme of 2023, which is just, hooray. That's awesome.

And I don't mean that in a serious way. That's lame. But that's just going to be the way that it is because, like, people have money in Gemini Earn. People have money in Celsius. So, like, these updates are actually important and they're kind of going to define the crypto, the centralized crypto industry moving forward. My other update is that B and CELSI.

C tier centralized exchanges are going to struggle and be kind of severely tested. And I think we're seeing that play out with Wobie, who I would call a B or C tier centralized exchange. And so, like, I think the call to action is like, you know, having centralized exchanges are going to be a part of the crypto world now and for forever. They're going to be around. We have to accept it. We should, if we are going to use centralized exchanges, probably should be using A tier

centralized exchanges, not B or C tiers. So if you are still having your money on a C-tier centralized exchange in this day and age in crypto, don't. I don't. Don't use an A-tier. Clearly you're using a centralized exchange. If you're going to continue to do that, use an A-tier one. Like don't be on the long tail of risk because that is a bad spot to be in a bear market or even any market, for that matter.

It's hard on centralized exchanges because we don't know everything about all of them. The way I feel right now at this point is if someone to ping me on telegram, and just be like, hey, what centralized exchanges do you recommend do you trust? Cracken would be top of the list. Yep. And not because they're sponsors. We picked them as sponsors

because they were on the top of our list. Coinbase as well would be on the top of the list. Take a big deep breath from there. I don't really know after that. I just, Binance, I hope, I think. I don't know, though. I would bet my money that finance would be, okay, but it would be a gamble.

I feel that way. And again, it could totally not be, but that's part of the challenge with centralized exchanges, as you don't know for sure. And that's why proof of reserves is so important. That's another big theme I think will be throughout 2023 is proof of reserves is going to get better.

This is where regulators should demand this. If they want to do something helpful, just help but demand proof of reserves and audits on liabilities. Yes. Just raise the bar there. Thank you. It's so simple.

It's so simple. It's still freaking simple. Yeah. Clarity for security. What's a security? And then just proof of reserves, please. Okay. What else we got, David?

All right. Now moving into the regulatory conversation. Speaking of regulators. Speaking of regulators, here's our favorite guy. Oh, hey. What's up, Gary? So this was an article written by Mike Selig, who I had on for a conversation. And he wrote this, 2023, the year of regulation versus decentralization.

And he's basically. saying that the world of regulation is going to push and squeeze crypto and as a result of that squeezing crypto will become more decentralized. Now, I remember being very, very into these conversations that almost felt exactly the same, Ryan, back in 2018, 2019. It's like, all right, ICOs just tainted the industry. The regulators are totally coming. What's going to happen? And it was- Risk lapse is what happened. Risk slaps. Well, some more than risk lapse.

But the ICO industry, it was an industry for a while, did grind to a halt probably under its own wake, but also because everyone realized they were issuing an unregistered security. And so this is where people actually started to like step back from their own projects and become more quote unquote decentralized. Sure. And so this is the opinion of Mike Selig and I totally agree with him is that in this year, the CFTC and the SEC are going to push the boundaries of their current existing authorities through novel enforcement actions and that as a result are is going to force crypto to become more decentralized

in response to that, which is good. That's a good thing. Even though it's going to be rough, it's still a net out positive outcome. For me, the jury is still out on whether it's net positive or not, but I will give the benefit to this. It's honestly, OFAC sanctions for TNOR to Cash have been one of the best things to ever happen to Ethereum. From a decentralization standpoint, sure. Yeah. And sorry, I said that probably a little too hyperbolicly. There have been a lot of great things to happen for Ethereum. But I just mean one of the things that seemed bad and very oppressive that has quickly turned into, I think, a victory for Ethereum, which is it's forced the Ethereum community to really focus on what censorship resistance means at the protocol

layer for block builders. And as a result, I think, I mean, we said this in our earlier predictions, MEV censored blocks or, you know, blocks with censorship have probably peaked. If you have that chart up. But I think you and I both believe that. And there are a lot of censorship solutions, like on their way. Yeah, Dave's going to pull up a OFAC censorship. Oh, you don't have the chart. Yeah, what is that website. I can't remember what that website is. I can't remember either. It's MEV something. M.EV. Watch. Yeah, it might be MEV watch. Let's try that. MEVWatch. Not.com. No, God. This is something else. This looks cool, though. This looks like a Dune Dashboards. Chat. You help us out. It doesn't matter. But like, I don't,

Anyway, that's an example of the thesis that this coin desk opinion piece is kind of playing out in that way. Yeah, this is it. MEV watch. It was for people that are listening, www.m.vwatch.infoam. And, you know, this I think will go down over time. I think this is peaked. And we're going to get some not-O-FAC compliant blocks. And anyway, the Ethereum community has been educated on it and has successfully defended against it.

and yeah i think it's going to be an improvement moving forward so that's an example and one thing i want to point people to is i asked mike what is the case to watch what are cases to watch and uh uki tao is the dao that is being charged by the cfTC it was going after a dow but then a court ruled that you they cfTC should actually just serve the two founders uh the two founders of oki dow and so really this court case really means is like okay what does this mean if a Dow violates CFTC regulation, what happens as a result of that? And this case is still ongoing, but because you can't really charge a Dow, they are instead going after the two founders of the Dow who have a bunch of the governance tokens. How this court case falls, however this lands,

is going to be important for other Dow's and other founders of... I hope this lands the right way. This could go very bad, in my opinion. I don't know what Mike thinks about that. If you talked about that. on the episode, but I'm worried about this case, David. Yeah. But the take that we gave, that we talked about is decentralization theater versus actual meaningful decentralization. And that was the point that he really wanted to hammer home on.

It's just like, well, if you have two founders and they just make a Dow, like, well, no, you need real decentralization, not fake decentralization. And so I know, like in this crypto space, we don't really, we want to protect our Dow's. But we also want to protect our DAOs against grifters who are not appropriately using DAOs in the appropriate sense. And if that's what the CFTC comes and charges these two people with is like, no, your DAW is not a real Dow. You two are just hiding behind a Dow mask. Like we have to accept that as a crypto industry, I think. Fingers crossed, we'll see.

The trust isn't there yet between these two groups. So hopefully with some mutual education that regulators and crypto natives can find good solutions. get sensible regulation. All right. So what else we got? We got two things left. We got what bankless has in store for 2023. And then also what David and Ryan are thematically bullish on for 2023. But we got some stuff planned in the bankless world. And so I put out a tweet not too long ago is that the best prediction to make about 2023 is one that you're in control of. And so I'm bullish on bankless going into 2023. Ryan, you want me to keep on elaborating? You want to take this? Yeah, no, you can, you can talk about it.

But maybe I'll tee you up for, we're launching a new website, guys, for bankless members, citizens of the bankless nation. That is going to be absolutely fantastic. I just, there's a cut of the beta right now in our inboxes, David, that we have to go test you and I. I hope we can find some time to do that. Then we're going to open this beta to members of the bankless community. And hopefully, this comes out pretty soon.

Yeah. You want to say more about that? Yeah. I mean, we have a Chad designer and a Chad website guy, and they are doing absolutely just moving mountains to make a brand new bankless website. And I really think it's a website that I think the crypto industry really deserves. It is a place that hosts much more than just these like podcasts and newsletters and articles that we're writing.

But just it's a hub of all raw educational resources. If you are paying attention to the bankless world, you've noticed us producing these super refined, very short videos that are on a different YouTube channel, which we'll link in the show notes, which you should subscribe to. But we're also doing stuff like, I'm working on videos like, what is decentralization? What is a blockchain? Like stuff like this. And so I'm trying, I'm hoping that we can make this the best, unequivocally the best place to send crypto curious people. And that is just, it's going to be the universal hub for people who are just starting their bankless journey, people who are very deep down the rabbit hole at 300 and 400 level content and like everything in between.

And so that's what I'm bullish on is that it becomes the best hub to send somebody who's new into crypto who's wanted to get into it. We call this the bankless nation all the time because that's the metaphor, the analogy that we're using for bankless. And I know you know this, David, but bankless, the nation, is actually larger in population size than about 40 other established United Nations recognized countries. There you all. Talk about Belaghi's network state idea. That's what we're slowly moving towards, right, with incremental progress. So population, quarter of a million. Now, how do we get to population a million?

How do we get to population 5 million? How do we get to population 10 million? That's what we're aimed at with bankless and what we're trying to do here. Another piece that's coming down the pipeline is an NFT project. Have we mentioned that on a podcast yet? I don't know. But I'm not going to mention any more detail than that because there'll be some things that we want to showcase. But think of this as kind of an idea.

of a bankless passport. What would that mean? Instantiated in NFT form? That's what we're working on. And again, the idea of the network state, I think, is burned into our minds. We also, you guys remember last quarter, we brought on Dawson Botsford as our CTO from a fantastic tool that we just love using called Earnify. And so bankless labs is where that lives. We're going to double down on our efforts to produce tools for the best. bankless nation as well, starting with Earnify, which is an air drop finder, has helped find people $150 million in opportunities. We talk about net good, public good for crypto natives and crypto travelers.

That's what we're trying to do. And then, of course, you and I, David, I think we've dedicated 2023 to kind of get back to some of the core basics. 2022 is such a frenetic, busy year. We're all over the place, just trying to keep up with various things. Now we have a chance to kind of breathe and get back to some of the basics content. Bringing it from the archive, freshing it up, and in talking about it in new terms. So we're going to revisit some of the OG educational theses that we've had from bankless from day one.

So I think it's going to be a tremendously bullish year for what we're doing in the bankless movement. And I'm super excited about that. Not to mention everything that the bankless Dow is pulling off, which I just can't even keep up with. It's so much going on over there. Yeah. It's hard to like give transparency to what's going on in the back end just because like we have this Discord server. We have like the bankless team in there. The bankless team's large.

And I don't think a lot. I don't think many people realize how much hiring we've done in the last like two quarters or so. We have like 17 people that show up to the Monday meetings. What are they all doing? Stuff we are. I'm super stoked to be able to present to you guys soon. TM. We've gone from something like seven or eight people at the start of 2022 to where we are now with something like 17 people going into 2023. And everyone's just been heads down working. And I think

a lot of that stuff is going to come to fruition pretty damn soon here. Ryan's already teased out a little bit. But yeah, I'm pretty bullish. You have to be sorry for bank this ever, do. All right. When you bullish on though? Tell me if you had to pick one thing in crypto for 2023. one theme that you're most excited about most bullish on yeah what's one theme that you point to uh i want to point in everyone to the concept of and project sign in with ethereum uh this is something that technically doesn't have a price tag associated with it uh but it is still something i'm i'm bullish on uh and it's something that i think is also going to be very very helpful with uh putting ethereum on the map when it comes to mainstream adoption because this is

is something that I think everyone can really get behind, which is like, you know, sign in with Facebook, sign in with Google, sign in with your Web 2 overlord, or sign in with your private keys, which you mentored yourself and you control and you operate your own identity. And I think, especially as society is getting more and more fed up with the Web 2 world, I think the sign in with Ethereum movement, which is, we are just at the very, very tip of the iceberg on this thing is going to see a lot of mainstream adoption because people of Ryan are getting exposed to NFTs via Instagram, NFTs via Twitter, and NFTs via Reddit. So like parts and corners of the Web 2 internet, big corners, like Instagram, it's not a tiny

little corner. They're already getting exposed to Ethereum. And so we're finding and also, you know, being able to log into a website without having do email and password and other identities, I think is going to be a big catalyst for, for just people accepting Ethereum into their lives. Honestly, it solves a massive problem here. And, you know, I'm going to plus one your bullcase for sign-in with Ethereum. Actually, there's a Vitalik tweet, too.

Turns out he's also bullish on sign-in with Ethereum. What's this tweet that we're looking at? Yeah, so this is Matt Huang from a paradigm who's asking Vitalik, what is his definition of a good crypto future? And Vitalik just gives a list, you know, fix scaling, fix privacy, fix UX, U.S. of course, user accounts more secure for average users than centralized services. That might be a nod to account abstraction. Payments and store value plus a D-Fi provide value to many people.

That sounds like banking the unbanked. Crypto-social takes off and an identity plus sign-in with Ethereum succeed. The cool thing is, is like, sign in with Ethereum, it isn't just you have a private key and you authenticate your identity to a website via signing with your private key. It starts there, and that's already a huge order of improvement in terms of user privacy and user sovereignty on the internet. But as identity layers and identity tooling and whatever it means to create identity, which is already a nebulous definition, as that becomes greater, signing in with Ethereum becomes more useful. As there's a higher fidelity relationship between your Ethereum address and your identity because of the poaps you collected or the attestations that you have, or the things that you have done,

that your website that you're logging into is interested in it. Your Ethereum address can represent more and more about you that you control that you have total access over. And so it's kind of like when defy grows, ether becomes more useful. As Ethereum identity grows, sign in with Ethereum also becomes more useful. And so that is something to be bullish on.

Yeah, imagine kind of the narrative coming out of this. Like, Eith gives you, you know, an Ethereum address gives you, a way to sign into any application across the internet in a decentralized way, right? And ETH is kind of an investment in a global identity management system. I even think some of these narratives, if they come to fruition, can turn into like bullcases that we don't really talk about. We talk about ETH's money, but what about ETH as identity? That's a super interesting thing to think about. But the reality is identity is broken, isn't it? In Web 2, it's broken. Just like the

Twitter bot problem. Like, wow, it's a failure of identity, identity systems. And it's even like we're talking about wins for mainstream, people who aren't into kind of the money, you know, number go up type use cases. Well, identity is also a national security problem. How do I know what's a Russian bot or, you know, an evil nation state actor that's trying to kind of prey upon my population if I don't have proof of identity, if I don't have proof of humanity, if I don't have proof of humanity. And I'm just thinking about how utterly, how utterly lacking nation state identities actually are for this. That's pretty embarrassing, yeah. No, I know. We were just talking about this in one of our debriefs for an episode we just did, which is I recently opened up some exchange

accounts and used a selfie, of course. This is how you validate your, you are who you say you are, authenticate it. And it was, you know, a selfie of myself and then my driver's license. Basically, three JPEGs, right? A JPEG of me and a selfie, a JPEG of the front of my driver's license, a JPEG in the back. And they just, they live on my computer somewhere. Why? Because I do this so often. All someone has to have is those three JPEGs. And then they know my social security number, which is publicly available, basically, and they know my birthday, and then they can authenticate themselves

in a banking application? Like, that is your state-of-the-art security? Nation state security sucks right now. Yeah, that's pretty bad. And for this to be a solution to that, well, just sign in you have a private key. Private keys really are a superpower for the 21st century,

and unleashing that for identity is kind of a really bullish use case. I don't know if all of this happens, in 2020, David, I feel like like 2023 will just be

the start of that at some level and it'll take a few years for that to fully play out but I'm also bullish on this.

Well, we are recording with the sign-in with Ethereum team tomorrow. And so we are going to turn this theory

into a full-length podcast. So we'll have more material on that soon. There you go, guys. Well,

that has been 10 predictions for 2023. We're excited about going to this year. I'll end with our typical

risks and disclaimers. Of course, Gotta let you know that all of crypto is risky. So is ETH. So is Bitcoin. You could definitely lose what you put in. But we are headed west. This is the frontier.

It's not for everyone. But we're glad you're with us on the bankless journey. Thanks a lot.