Bankless - 156 - Investing in Waves with Chris Burniske

Episode Date: January 30, 2023

✨ DEBRIEF | Unpacking the episode: https://shows.banklesshq.com/p/debrief-chris-burniske  ------ ✨ COLLECTIBLES | Collect this episode: https://collectibles.bankless.com/mint  ------ Chris Burniske is Co-Founder of Placeholder VC, author of “Crypto-Assets,” and mentor to both David and Ryan. This is Chris’s third appearance on Bankless. He was first on three years ago for episode #20! Investing in waves. Are we talking about surfing? Are we talking about capital deployment? The answer is yes. In today’s episode, Chris unpacks why he uses the term “trashy” to describe many 2022 projects (and their founders), why crypto is like surfing and how you catch a good wave, his rules for staying sober during bull and bear markets (hint: don’t fall in love with your coconuts), and finally his bull case for Solana. ------ 📣 Crypto Tax Calculator | Free Crypto Tax Calculator https://bankless.cc/CTCpodcast  ------ 🚀 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  ------ Topics Covered 0:00 Intro 6:46 Crypto Assets 12:43 Right 2 Years Later 16:00 Wrong 2 Years Later 19:35 What Makes a Project Trashy 22:12 Psychological Perspective 26:33 Thesis Driven 30:00 Super Cycle Narratives 37:20 Market Timing & Advice (NFA) 47:25 Bull Market Indicators 54:30 Is the Bottom In? 57:53 What Ends the Bear Market? 1:01:17 The Crypto Repeat Story 1:08:00 BTC vs. ETH vs. SOL 1:18:54 The Solana Pitch 1:29:34 How to Approach Solana 1:36:51 Predicting SOL Value Accruel 1:41:35 The Solana Opportunity 1:46:18 Is Crypto a Net Good? 1:52:22 Action Items & Disclaimers ------ Resources: Chris Burniske https://twitter.com/cburniske  The Ethereum Opportunity https://youtu.be/oG3CUT9kziE  Electric Capital Developer Report https://github.com/electric-capital/developer-reports/blob/master/dev_report_2022.pdf  ----- 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 

When I'm looking for a spot to surf on any given day, I'm always looking for the best spot that has the fewest number of people. Because I'm not going out there to compete with other people. I'm going out there to ride a wave. And I think that you can draw a parallel to how I invest and how placeholder invests in that we're not so much in competition with other funds. We're not so much in competition with the leaders of these ecosystems. We want to be intellectually drawn to certain projects and certain value sets. and we want to ride that wave with that ecosystem. Welcome to bankless, where we explore the frontier of internet money and internet finance.

This is how to get started, how to get better, how to front run the opportunity. This is Ryan Sean Adams. I'm here with David Hoffman, and we're here to help you become more bankless. Guys, the episode title, investing in waves. Are we talking about surfing? We're talking capital deployment? The answer to that question is yes. David and I are chatting today with one of our favorite crypto investors of all time

Chris Berniske. A few takeaways from this episode. Keep track of them. Number one, Chris uses the term trashy to describe many 2022 projects. Why did he use this word? And he means it. He also uses that word to describe their founders. Number two, why crypto is like surfing and how you catch the best waves. Number three, we talk about the advanced warnings in 2021 that we should have all seen that crypto was in a massive bubble. Number four, Chris's rules for staying sober. Don't fall in love with your nuts. You have no idea what that means. That's why you should listen to this episode. Number five, the current crypto market cycle, why Chris has suddenly flipped bullish. He's bullish now in 2023. And finally, we discuss Chris's bull case for Solana. We end with that and a few other things.

This is a fantastic episode, David. What should folks pay attention to? A while ago on a weekly roll-up, Brian, I gave the take that polymaths really understand crypto better than anyone stuck inside of one vertical. Like economists don't understand crypto, but people who understand economics and computer science and psychology, understand crypto. And Chris is really the embodiment of that. He understands so many different ways to evaluate crypto and he applies them. And that's really, I think, the magic behind Chris Berniske. In this episode in particular, we really carry through psychology, individual psychology, market psychology, group think, and how it changes throughout the cycles, how group think is different during the bear market

versus the bull market and how you can understand group think, ride the waves of group think, but not fall victim to group think. And so thinking about this episode through the lens of individual psyche, it's individual psychology, is going to be very useful to just making it through the bear market and also not falling victim to the virus of the bull market. Some housekeeping for you before we get in. This episode will be released as an NFT collectible. It's the second of the year that we're doing. So stay tuned for that. That is coming on Monday. So the day this episode releases to the public, you can pick that episode up as an NFT, collectible NFT.

Also, of course, stay tuned for the debrief where David and I will give our thoughts on the show after the show. In order to access the debrief, which you can do now, you can upgrade your membership to become a bankless citizen. We used to call that bankless premium. We're now calling it a bankless citizen. So you can upgrade... Citizens of the Nation.

You can upgrade and access that episode right now. Guys, we're going to get right to our episode with Chris. But before we do, we want to thank the sponsors that made this episode possible, in particular, Cracken, which is our recommended crypto exchange for 2023. Go check them out. Cracken has been a leader in the crypto industry for the last 12 years. Dedicated to accelerating the global adoption of crypto, Cracken puts an emphasis on security, transparency, and client support, which is why over 9 million clients have come to love

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NFT trading experience possible. Rarity rankings, no gas fees, and the ability to buy an NFT straight with cash. Does your crypto exchange prioritize its customers the way that Cracken does? And if not, sign up with Cracken at Cracken.com slash bankless. Hey, Bankless Nation, if you're listening to this, it's because you're on the free Bankless RSS feed. Did you know that there's an ad-free version of Bankless that comes with the Bankless Premium subscription? No ads, just straight to the content. But that's just one of many things that a premium subscription gets you. There's also the token report, a monthly bullish, bearish, neutral report on the hottest tokens of the month. And the regular updates from the token report go into the token Bible.

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Bankless 2.0 Soon TM. So if you want extra help exploring the frontier, subscribe to Bankless Premium. It's under 50 cents a day and provides a wealth of knowledge and support, on your journey west. I'll see you in the Discord. Bankless Nation, excited to introduce you to Chris Berninski. Once again, this is our second full episode with Chris. The last one we had with Chris was actually over two years ago,

two and a half years ago. So this one's been a long time coming. Now, we had Chris on with Kathy Wood from Ark Invest in the meanwhile, but we've been wanting to pick Chris's brain for a while. He is, of course, the co-founder of Placeholder VC. He's the author of Crypto assets. David and I consider him as one of our mentors in this space. In fact, I would credit Chris as one of the three people most form out into getting me into crypto, and particularly after I read his crypto assets book back in 2017, I believe. Chris, it's great to have you back on bankless. How are you doing? Thanks, Ryan, and thanks for the warm intro. Good to see you both. You know what? I just wanted to glow you up there because thanks. I'm really happy to be in crypto. And, you know, I first started getting interested in

Bitcoin in 2014, but there wasn't very much else there in crypto for me. And I think that changed partially after I started getting involved in Ethereum and then I started to understand the asset space after the book crypto assets. So thank you, my friend. I probably didn't say enough good things about you. I'm glad to be in crypto and it's in no small part because of you. Well, that warms my heart to hear. And, you know, the reason Jack and I wrote crypto assets at the time was because there were really only Bitcoin books. And the space was growing to be much larger than Bitcoin. And of course, writing a book, we started writing that book December of 2016 and we finished the first draft March of 17. And March of 17 was actually right when everything started going crazy. Like I remember

through March, we're like watching the prices like 2x, 3x, 5x, like I think ripple went crazy, all this kind of stuff. And we're like, oh my God, like how do we, how do we cover this in a book, right? Because things were moving so fast. But we just proceeded, you know, with the core things that we thought were important to investigate. And I think in time, it will just be viewed as a history book, right? It's a point in time. It's kind of between 16 and 17. Lots of people ask for an update. I think we could write a killer crypto assets v2. It's just finding the time. I think the decision to not chase what was currently happening in crypto in that present moment, stick to your guns about writing for the original tent, the book crypto assets and not adapting it

to whatever there was the present moment of crypto at the time is very on brand for you. And something I appreciate about you, Chris, is that no matter what's going on in the machinations of the crypto cycles, you always seem to be able to keep a level head on your shoulders and kind of see through the short-term noise and the crypto-twitter conversation of the moment and keep yourself focus on the long term. So I guess we weren't done glowing you up enough in the intro of this podcast. I would kind of echo that because it just didn't,

I mean, it wasn't just that it interested me in crypto after kind of reading that book more, but it also informed how I view the space, which is I think, you know, we're of a similar viewpoint

in that crypto assets was very much a kind of a thesis-driven investment type book. As David said, it wasn't about kind of the narrative at the time of, you know, XRP is going to be the new Swift

or whatever it was back in 2017. You really laid out a framework for how you actually evaluate the value of these things. And I think that thesis-driven investment is really what we've tried to instill in bankless, is this is about long-term perspectives, you know, three to five to 10 to 20-year perspectives, not the current narrative in the moment. We're not traders. We're not narrative investors and traders. Rotators, yeah. Rotators. We are fundamentals investors. And that kind of framework, I think, still applies very well. Definitely. And I mean, you know, society is a string of generations

that I'll learn from each other. And I learned a lot of that from Kathy Wood, you know, working at Ark and Vest. In the time that I was writing that book, I was getting to know my two partners at Placeholder, Joel Menegrow and Brad Burnham, who are both very strong thesis thinkers or thesis crafters. And then also around when I was finishing crypto assets, Joel and I were completing our thesis summary for Placeholder itself. And so there were a lot of people around me as well. no book is written by an author just sitting on an island. And I learned a lot from all of those

folks that bolstered, you know, my own conviction, added pieces to it. And, you know, all those people remain in my life and continue to ground me, you know, as we proceed through crypto. And then I'm sure we'll get into crypto Twitter and how I use that. I think that can be destabilizing if you're not careful. Yeah, I felt destabilized at times to put it my mind. To put it my wildly on crypto Twitter. Well, let's start here, though, because I want to provide some continuity. So, the last time we had you just solo on an episode was over two years ago. In fact, almost three years ago. Can you believe it? I think that's the record for the longest gap between repeat guests. Yeah, and this was episode number 20 when we're just getting started. Okay, now we're in the

hundreds. One fifties. Probably drawing closer to the thousands. Congrats, guys. You've built a huge brand, you know, my head off to you. Like, I watched you guys rise all through the last bear market and become stars in the bowl. you know, here we are back in the bear. Well, thank you for taking a risk on us by coming on this obscure podcast back in 2020. But I want to ask you now, so reflecting on like the last two and a half years or so, I remember the episode we did at the time where you described kind of this bullishness on crypto, bullishness on Ethereum. You described crypto as this infinite white space was a line you used. And I want to ask you about the last two and a half years. So what do you feel like

you got the most right over the last two and a half years? Sure. I'd say the most important thing I got right, which was not easy to get right at the time, and that was right around when we spoke as well, was just Ethereum. In 2018, 2019, around when I started noticing you guys, and I'm sure you recollect this as well, ETH was crashing, right? It was going through an ICO de-leveraging event. Bitcoin dominance was rising rapidly to the upside. Bitcoin Maxis were out with the pitchforks. The narrative was that ETH was dying, ETH was irrelevant. Even if you talked with a lot of VCs, you know, say traditional VCs were just like, you know, crypto's doing that thing again.

It's, you know, falling 80, 90 percent. Just forget about it and move on to the next thing. And then even crypto-specific or crypto-savvy VCs were losing conviction in Ethereum. And they're like, you know, it's taking too long to process network upgrades. You know, is the transition of proof of stake ever going to happen? You have all these next generation L1s coming about that are going to eat Ethereum's lunch. And you guys remember this, right? You remember it?

Oh, yeah. Well, this is where I was born. How hard 18 and 19 was. And so, Eith fell sub 100, you know, that was pretty shocking. Like, the first day that Eith fell sub 100, I, like, I just didn't even want to look at trading few. You know, it was, like, so painful. And, you know, that's actually part of my own journey, right? is like getting better and better on those horrible days at just being able to withstand it

and actually just keep buying as opposed to being so disgusted that you can't handle it. So that, you know, hardening process, say, of having conviction and bolstering conviction in Ethereum while most people were running in the other direction was really important for myself, really important for a placeholder. And it allowed us to, you know, have a very large ETH position itself. but then also do a ton of venture investing around Ethereum, seating teams like we seeded ZK Sync, we seeded Balancer, we seeded UMA, and a number of other core Ethereum names.

And the valuations were amazing, the teams were top-notch, there wasn't really that much competition for it because most VCs were looking in other places. So, you know, directionally, that was, I think, the most correct thing, you know, from a financial perspective, but more importantly, you know, from a values-based perspective and what it brought to the crypto space. And how about the flip side of that? So I got to ask the other question of over the last two and a half years. What did you miss?

What did you get wrong? Well, I'm always surprised by how much the trashiest project can pump. Trashy. Yeah. Trashy. You know, I think an easy one to just say would be Luna. and I remember speaking with the Luna team. It was the DevCon that was held in Japan.

I forget when that was. But it was in that time frame, the last bear. And Luna was sub a dollar. And I remember specifically, I just wanted one question answered, and that was, did the price of Luna have to keep going up for the system to remain stable? And it was danced around a lot. But ultimately, the answer was yes. Luna has to go up in price forever.

And that's so clearly a broken system. Right. Like nothing goes up forever. And nonetheless, the price of Luna seemingly went up forever. And, you know, like if I'd been a trader, I could have minted, I don't know, 100, 200 X, like something like that. And so that's one place where like temporally for a period I was wrong as a trader or like financial gain maximizer I was wrong. and then ultimately I was right, but it takes time. And you kind of just have to, you know, stick to what you believe.

I would say something where I remain wrong, because I guess you could say with Luna, I was ultimately vindicated, but something where I remain wrong is we expected NFTs to be a big thing. I mean, NFTs is just the non-fungible side of the universe, from the fungible side of the universe. That's clearly going to be huge in a digital context. But what I didn't expect is for the vector to be, you know,

PFP profile picture NFTs of monkeys worth hundreds of thousands of dollars. That was surprising. And now I've accepted it. And I would say one thing that 2021 taught me is if I have a really allergic reaction to something, I need to look closer at that thing. An allergic reaction is not an excuse to look away, but it's actually a reason to look closer because it's like that intensity that I feel in a say negative direction probably to a very different person, you know, incurs intensity in a positive direction.

And, you know, this is I think part of the practice as an investor of stripping your emotions out of the process. I mean, you can use your emotions, you can observe your emotions, but you shouldn't let them shape the intellectual process. So they can be indicators to you that feed into the intellectual process. but the intellectual process should remain, you know, objective and rooted in study and reasoning. That's a fascinating lesson. I hope bankless listeners heard that. If you have an allergic reaction to something, it doesn't necessarily mean stay away. It means Chris is saying, investigate it further. Ask why. Yeah, ask why. Figure that one out because there might be something to it.

I want to go back really quickly before we continue moving to the word that you used, which piqued my interest when you're describing Luna. Trashy. Very interesting way to describe a project. And I think I'm taking that to mean, as I read between the lines, a trashy project would be one that Chris thinks is focused on short-termism, short-term price pumps, for example, shortcuts in general. That would make a project in your eyes more trashy than another. And you're saying that was very much exemplified in Luna at the time. Is that what makes a project trashy? It's just this short-termist type of thinking in your mind? Yeah.

And it's a strong word for me to use, I guess. So it's definitely that short-termism. It's definitely that focus on, you know, the pumps and the announcements and the announcements of the announcements. And that's also even just the way that the leader or the leadership comports themselves. And if you observed Do Kwan's behavior online, he was not interested in rigorous intellectual debate. Like you look at how Battalic, you know, behaves. or you look at Mustafa from Celestia or Toli from Solana. I think those people, whether you agree with them or not, you will see them sometimes go very deep in debate. And like there will be different types of snark that they'll inject because they're all human. And that's fine. But the overwhelming response is not one of like snark or, you know, derogatory responses or whatever. and what I saw in Doquan's behavior was basically someone who's high in their own supply, power tripping, and the responses are not one of substance, but they're trashy.

And they're geared to, like, rile up a large group of the population, right, and be like, rah, rah, like speak to those emotions we were talking about, which clouds reasoning, right? And so, like, it's a manipulative process in my mind. if the followers of this individual aren't aware of it. Because they feel like they're going to battle. They're all charged up. They're all in. They're making money.

But it really shuts down, say, the more important thinking parts of the brain. Call it the prefrontal cortex or whatever. And that almost always leads to bad outcomes in crypto. Chris, I think this is really tapping into one of the things that I think makes you stand out as a navigator of the crypto world is you have this inherent focus on individual psychology. being self-aware, but also the wear of the biases of others and the way that psychology changes as a result of the crypto cycle. Everyone's psyche does change depending on where we are in the market. And honestly, the market is, of course, our collective psyches. And so maybe another way to identify what a trashy project is, is a project that creates a certain amount of just

psychological response in people that is only sustainable during high activity, high fervor, bowl market type psychological environments. Does that track with you? And then how do you, if listeners don't know, you are a surfer? And I think this ties in, that kind of behavior ties into surfing where you have to be patient, you have to know your limits. Just like, how do you think about these things and how do you navigate them from a psychological perspective? Because I think everything that you say is always rooted in some sort of admission of bias or psychological understanding. Can you just elaborate on all of this? Well, gosh, there's a lot in there. Well, so I'd say first you're correcting. your further defining of trashy.

And it's like another thing that happens is there's this like bubble psychology that's created around a project like that where because the leader does it, it justifies everyone else to just like respond in this screaming way to any criticism. Right. So that's something that happens. But actually what that creates, if you observe that is like it's a monoculture. Right. And like from my science background, and anyone can really know this, a monoculture is weaker, right?

You want biodiversity in an ecosystem. Biodiversity creates a lot of resilience. And so like you look at the theory ecosystem, there's a lot of debate. I would argue same within cosmos, same within Solana. And we can come to Solana. But like at the depths of the bottom last year for Solana, there was a lot of good conversation about how to make Solana better. like people acknowledging say that, you know, the things done around FTCS and Alameda needed to be

learned from. It wasn't people like screaming and being like, leave us alone or like, you know, and so the substance of the conversation is really important to me and what ecosystems are trying to improve upon or learn upon. Relating it to surfing, I'm the type of surfer. So I love a bunch of different kinds of waves. And I come to know the waves very well. And for people, who don't know surfing, like at least surfing on a reef is deterministic. So the pathometry or the underwater topography will determine the shape of a wave and then swell direction and a bunch of local conditions will further define how good the wave's going to be. But I am always, when I'm looking for a spot to surf on any given day, I'm always looking for the best spot that

has the fewest number of people. Because I'm not going out there to compete with other people. I'm going out there to ride a wave, right? And I think that you could draw a pair of to how I invest and how placeholder invests in that, you know, we're not so much in competition with other funds. We're not so much, you know, in competition with the leaders of these ecosystems. We want to be intellectually drawn to certain projects and certain value sets, and we want to ride that wave with that ecosystem. Hopefully it's a growing wave. And we're not so much distracted or perturbed or even drawn to a wave that has a wave that has a growing wave. hundreds of thousands of people on it because all those people are there. It's more like,

oh, that's a really nice looking wave and there's actually not that many people over there. I should probably go ride that wave. I love this illustration. I think it should be pretty clear for listeners. That is an investing metaphor. And it also just works so well with surfing. And Ron and I, of course, opened up this podcast talking about, like, hey, we really respect you as a thinker and as a thesis-driven investor. And a lot of that has been imbued in bankless, right? Like, ride the D.C.s over the long term, not the short-term narratives. And something I guess I'm kind of proud of is during 2022, January 4th of 2022, a little bit over a year ago, I got in a fight with Daniel Sesta, and then he sent his frog army after us. And then two or three weeks later, the Wonderland

system blew up. A few weeks later, we got into a fight with Doe Kwan. And while Doe Kwan and his army was at the height of cresting, cresting at its wave, and then a few weeks later, Terraluna blew up. And same thing kind of followed with three errors capital and then same thing followed with SBF when we had him on. There seems to be this moment where these waves crest. And because bankless, we are a media company, we talk about things that are cresting. There seems to be this pattern of people, especially in the second half of a bull market where they're cresting. And that is their last gas for air before they go under. And I think the alignment that we have is bankless as a thesis-driven media company and placeholder as a thesis-driven venture capital firm is we're approaching

these things in the same way, where, like, there's a big wave, and we'll talk about it on bankless, but man, does it rub us the wrong way? I'm sure that's how you react as an investor as well. Well, yeah, I mean, I think the podcast you guys did with Eric Forhees and SBF was, you know, a seminal moment in crypto. And I think it was the moment when a lot of people realized Sam had no close, you know, Emperor had no close. Yeah, it's a tricky position you guys are in. I mean, we're all put in tricky positions, but like, how do you remain, you know, how do you behave in such a way where you're not going to push away, say, all of these guests? Because you want to get them on your show, right? But then you want to ask them tough questions. And you want to, in that question

asking, reveal who they actually are. But if you irritate them too much while they're at the crest of their wave, you know, they're probably not going to join or they might rage quit or, you know, there's a balance there. I think one thing we've learned is just like ask a lot of questions. And I think that maybe not over the short run, but over the long run, just wait it out. People are smart. We have faith in the people who listen to the bankless podcast. And if you can allow an individual to kind of articulate themselves, ask lots of questions, tell their story, then listeners can kind of decide for themselves. That was very much the case in the Vorhees and SBF debate that you were just mentioning, Chris,

where basically we were just like, okay, you guys talk. And through the process of talking, that's when Sam really revealed that, indeed, he was wearing no clothes. Eric barely even talked. And, you know, Voorhees took that approach too. He was just like asking quick questions, you know, firing something back, letting SBF respond. Yeah, that was the model. You know, I want to get to kind of the market and your sentiment as well because I think I recall on Twitter because I follow you.

I encourage everybody to go follow Chris Berniske's Twitter account. We'll include a link to the show notes. But you were somewhat bearish on crypto in 2021 and 2022. And I should specify, not long-term bearish, I don't think. And again, this is just my perception. So you correct me if I'm wrong. But this was a time when a lot of people believed in this idea, popularized by by three house capital called the super cycle, which is crypto will never go down in the way that it's

gone down in previous cycles. Like, there'll be no more 70% plus drawdowns in this asset class. We've reached mass adoption now, and we're in the super cycle phase. I distinctly recall you on Twitter during this time period where everyone's bullish, pushing back against that. I guess I'm curious as to why you had the conviction to push against that in that time. That was not as popular. What indicators did you see? How did you? know that we were not in a super cycle at the time. You can put us back in your shoes in 2021 and maybe early 2022. Sure. Well, I think the first thing to recognize is that a super cycle narrative is a symptom of euphoria. So it's actually something that I would look for as confirmation for me

that actually strengthens my conviction that something's not right. It doesn't actually actually make it harder for me to be bearish, it makes it easier. And I think that's an important unlock that a lot of people have to go through is not feeling the tug of really strong momentum at extreme moments of the market, either, you know, bowl or bear. But instead, seeing how strong that momentum or that tug is and it's, you know, euphoria at the top, it's hysteria at the bottom, and using that as the marker or the confirmation that something's not right and it's not to last forever in the direction that everyone is saying it's going to last. So that would be kind of lesson number one from that point in time. As I recall, I think I got pretty publicly bearish in Q4

of 2021. I actually got faked out in May of 2021. You know, I don't get everything right. One thing I'm worried about is people are starting to be like, you know, Chris is always going to be right. So just listen to Chris. Okay, we glowed him up too much, David. We got to some put down. the last second half this episode. I'm definitely wrong. I'm definitely wrong, you know, many times. And May of 2021, I was wrong in that I got blindsided. I don't know if you guys remember May of 2021, but that was basically the blow-off top of Defy Summer 2020. Everything was going crazy. I think that's the first time that Eith got into the 4,000s. Quickly, very quickly. Yeah, very quickly. A bunch of DeFi names hit their highs, actually, in May of

2021 and never got back to those highs. And then like June, July, I think even in August, I'm not looking at the charts right now, but there were a few months where like, I think BTC retraced to the high 20s, low 30s, and you know, a bunch of names got walloped. And by walloped, I mean, you know, over 50% declines, if not more. And I didn't expect that to happen in May. So I was kind of blindsided. But then June, July, August, it didn't feel like we were done yet. And then I would say what started to unnerve me into October, but it was really like November, December, was the parabolic rise of a number of new names, right? So like Luna, avalanche, Solana. And then the behavior that accompanied those parabolic rises, right? So like, first there's a super cycle. That's the symptom of euphoria. Then you look at the charts. They're parabolic on the new names. And people are saying, well, BTC and ETH aren't quite parabolic. But like, the thing is, and this is where it helps to have been in crypto for a long time, as you understand the maturity of these assets, you know that as they get bigger, as they get more liquid,

you know, they're going to move a little less. So like BTC will move the least than ETH, then, you know, probably next cycle, Seoul. And so like you kind of start to understand the risk spectrum in that way. But we're seeing parabolic prices. something I was seeing on the venture side was actually innovation was slowing while deal pace was increasing and like basically frantic deal pace where people are like, you know, we're nice to meet you, we closed yesterday kind of thing. And then also even just the ways that entrepreneurs treat VCs changes bear to bowl. So like in a bowl, you'll have a lot more entitled behavior from entrepreneurs.

And then I think the important thing for a VC in a bear is to not then pay it back by being entitled, you know, like, because the balance of power swings in a bowl, the entrepreneur has all the power. In a bear, a VC has a lot of the power. And so just observing, say, more bad entrepreneur behavior or just uncouth, I guess, entrepreneur behavior, that was happening a lot into late 2021. So there were a ton of markers. You could also see it, I think, in like a number of like, and we'll get into some on-chain stuff. But like look into Bitcoin, I think is a great resource, public resource for a lot of people to track Bitcoin on-chain metrics and ratios. And you could see it getting pretty topy. So when you have a crazy convergence of things like that, it's a very strong indicator.

So I'm never using one indicator. And the last thing I would say is like growth equities have been in decline for a while. Like inflation was starting to peak up. like the writing was starting to be on the wall that, you know, the tides were going to change from a monetary perspective. And I'm not as much an expert in that round, but I talked with Kathy Wood a fair amount, you know, and I have other people that I subscribe to in terms of newsletters. And that's a benefit of being an institution that were like giving me some warning signs of the tides turning. Chris, I want to ask, you said you flipped bearish in the Q4 of 2021. And I remember

you were the first crypto-tweater person that I remember who was like, okay, I am now bearish and I'm tweeting about my bearishness. And for me and many others, it's like, man, that's really early. Like, there's got to be so much left in this, in this bull market. And I mean, I mean, and you were a little bit early in terms of, it was a little bit early in time, it was a little bit early in price. It ultimately came to be right because we went down so bad. But I think you went throughout 2021 being bearish, sticking to your guns, while a bunch of crazy stuff happened, and then only to be proven right well into 2022. And I remember, like, my personal relationship with 2021 was hearing the words, oh, that's a top signal. Oh, that's a top signal. Oh, that's a top signal.

Oh, that's a top signal every single month of 2021. I remember the top signals of 2017, which was my first real exposure into a crypto cycle, even investing in the first place. like Katie Perry's digital asset painted fingernails. Like, yeah, that was a really good top signal and it was also the top. Throughout 2021, you couldn't go a week without getting a top signal. Halfway into 2021, I was like, what's the point of listening to these top signals? We had a top signal yesterday and we all have a top signal tomorrow. Like, I'm getting top signal fatigue.

So how did you maintain, how did you like stick to your guns? Because I started writing off every single top signal that I had in 2021 because it didn't matter. Like, there are top signals left and right. But you stuck to your guns the whole way through and through. You never fell victim to the super cycle like bug that everyone caught, including myself. How did you just grit your teeth and go all the way through 2021 without having to capitulate? Yeah. Well, actually, it's funny.

A moment in crypto Twitter that I remember is you responded to one of my tweets in Q4 being like, shut up, Chris. I'm busy collecting free money. Of like a toy car, like doing donuts with like dollar bills falling. And I was like, thanks, David. Somewhere David knew that this was, oh, yeah, that this was the top signal, yeah. I'll add to the top signals out there. I mean, I want to be clear about, like, the fact that I'm always making tons of mistakes in entries and exits.

And maybe I shouldn't frame them as mistakes such as, like, I'm not trying to optimize, like, buying everything right at the bottom. and selling everything right at the top. Because it's actually impossible. And anyone who aspires to do it is just going to end up getting whiplashed. Because when prices are really low, they're going to just keep waiting and waiting and waiting and be like, oh, well, you know, BTC's at 15K, I'll buy it at 10K. And then BTC's at 10K. And they're like, well, I'll buy it at 5K.

Right. Or, you know, the flip happens to the upside. And so what I do is, you know, kind of an easy way. and I always have to be careful because placeholders are registered investment advisor, but like a mental heuristic or like a framework to use would be, okay, if you have an investment, right, and you put your cost into it, so that's your one X. So like you put $100 in, you've got $100 of that investment. So you're at 1x.

If that investment goes 10x, right? So now you have 10x your cost. You should consider taking, in my opinion, at least 2x out. You just guaranteed doubled your money, and you have 8x of that investment riding. That investment doubles again. You now have 16x of your original investment, you know, still in the market. If you take something like 4x out, you're now sitting at a 6x realized, and you still have 12x of your initial investment. Wait, you could do that?

You could take money off the table. can. Is that allowed? It's possible. That 12x doubles. It's that 24x. You take another 4x. You just 10x. You guarantee 10x your money. And you still have 20x of what you originally put it. And now there's only so long that you can play this game. But I encourage people to, you know, look at their cost in different investments they've made, set up now, like in the bare market, you know, prices where they would be. really happy, you know, if it hit this price and what amount, what multiple of their costs would they take off the table at certain prices? And this is called tranching out or legging out. And you can do the same thing, legging in, you know, where you buy at certain prices and you just keep buying and buying and buying. Because if you don't do it and if you don't have a plan, you won't exit and you'll get lost in the bubble psychology or you'll get lost in the bearer's psychology. So like, if you don't have a plan, then like, you know, let's say you put in a thousand dollars and it's now at

$10,000. You're going to be like, well, I'm going to wait until this is $100,000 before I, you know, take any money off. And then once that $100,000, you're like, well, I'm not that far from a million. So I'll wait for a million. And then, you know, you get caught in that as opposed to, you know, taking money off the table. It doesn't mean that you're not a believer in the ecosystem or ecosystems that you're supporting. And in some ways, I would say selling when everyone is buying and buying when everyone is selling is actually helpful to the volatility of that asset, right? Because you're like, you're dampening the upside and you're dampening the downside because you're doing the countertrend behavior. So not too euphoric, not too depressed. Yeah. And then like the thing that people will

struggle with in both situations is like, you know, let's say like, I don't know, You started in the last cycle, you started taking profits when ETH was at 3K, you know, well, then by the time it's at 4,500 or whatever, you're like, oh, it just ran another 50%. I could have made 50% more. But then, like, when ETH's at, you know, 800 or 1,000 or 1,200, you're like, well, I definitely should have sold it at 3K. What was I doing? And so the important thing is to, like, not kick yourself, not aim for perfection,

have a plan that's good enough that you're satisfied with. and chances are you'll do well if you stick to that plan. Getting a two to three to four X is unheard of in almost any other asset class. And then on the downside, when things are dropping, you know, similarly, if you have price targets and you buy there and it falls another 50%, so long as you keep buying and you don't shy up, the thing that people do in bear markets is they make their trade sizes smaller and smaller. And that's actually the wrong thing to do. You want to either keep your trade sizes equal or go bigger because the units you will buy at the bottom with an equal trade size or a greater

trade size will blow you away later. And then you can end up with a really good average price, even if you started buying a little high. I think this is like an evergreen insight, right? And it's basically the idea is like, next bull market, you're going to be drunk. Okay. And the time to make your plan of how to get home from the party is not after you're drunk. Correct. All right. You got to make those plans in advance when you're sober and when you can think it through, not when you're like drunk and partying with everybody else because that's what a bull market is.

And it felt this way at the end of 2021, didn't it? Definitely. People getting tattoos. I mean, like with their favorite crypto assets. Like the market was crazy. Yeah. Everyone was drunk. And if you didn't have your plan, you're done.

You weren't going to actually ever sell. Yeah. Another thing that happened. and this, I've kind of developed the analogy more animalistically, but it's like, if you think of us, you know, I live in a tropical place, so I'll use coconuts. And these crypto assets are these magical coconuts when they're going up. And it's like they grow brighter and brighter green, the more they go up. And we become more and more attached to them. We get the tattoos, you know, we go to parties, we really identify with them, we tell everyone about them. So the more they go up,

the more there are these magical green coconuts that we just can't possibly part with. Precious. Yes. So if you don't set a plan to part with them, then you're so emotionally attached that you can't possibly sell them. And then it's super painful if you part with some of them. And then they multiply even more. And you're like, oh, my God. You know, if I hadn't have sold those 10 coconuts, they'd be worth 20 coconuts now. Right. And so you kind of drive yourself crazy with the magic coconuts. To the downside, they become these withered, nasty, red decaying coconuts, and you're like, oh my God, I had so many beautiful green coconuts, and now they're all withered, and, you know, how do I only have two coconuts when I once had a hundred coconuts, right? And then, like, that pain, and it truly is pain that it causes in your brain, then causes you to act irrationally, and sometimes that will cause people to capitulate cell at the bottom, because they just can't take it anymore. They're rotting. They smell bad. You want to throw in the trash. Yeah. They've turned from loving them to hating them. It's very

emotional thing. I think this is the first time the word coconut has ever been uttered on the bank because we got it like 10 times just then. Chris, not too long ago, last November, we did Twitter spaces together and we talked about a number of different indicators that the market had bottomed. And this is to save myself from tweeting at you during the bull market, when I noticed that you flipped bullish, I was like, oh, Chris Berniske's flipped bullish, the seasons have changed. And that was around in November of this last year. I was after FTX. Right after FTX. That was a really good time. So I'm wondering if we could kind of run through some of the things that made the changing of the seasons happen for you.

There was a number of different things we talked about. There are some on-chain indicators. There's some crypto-tweater sentiment that you were looking at. Also, some macro inflation. What triggered the changing of the seasons for you, Chris? Sure. Well, first off, I'd say, you know, that was well done by you and that you, you know, moved on a dime. And intro week, we set up that space.

And FTCS was in the midst of melting down, I think, that week. Yeah. It was the week after. Or the week after, yeah. Funny week to flip a bullet. Well, that's the right time, right? That is the time. That is the time.

I think what had happened is I was waiting for one last big capitulation. And when I saw the- After Terra Luna, you mean? Yeah. Or three-ro's capital, one of the two? Yeah, correct. After Terra, 3-AC, if you just looked at like what was going on in the markets, in the macro data, and by markets, I mean equities and crypto, but it was particularly

apparently apparent in crypto. We just, like, we were kind of weekly rallying, but we couldn't really get off the floor. It was kind of clear. We're just limping along. And that reminded me quite a bit of the back half of 18, where we just kind of limped along. And we're like limping, limping, limping, limping, no strength, no strength. And in an environment like that, when there's so much fear, you get one more big catalyst. And, like, prices were already pretty low. But you get one more big downside catalyst and you get like a major capitulation flush right because like you're limping along because there's not that many buyers people are like a little like they're like well I don't I don't want to sell here but they don't have a bunch of conviction to hold and then you get that event where it's like

FTX and it's like I'm out you know and then it's just a capitulation flush so that definitely happened in the price charts we got capitulation sentiment wise you also see saw basically everyone go into hysteria. I shouldn't say everyone, but the majority go into hysteria. And, you know, there were a lot of previously credible well-reasoned people that were running around spreading rumors on sparse information and, you know, with flawed reasoning. And, you know, basically everyone in their brother and sister was going to be insolvent next. Right. And like, once you start to see enough of those claims go viral that you know to not be true, then it's like, okay, this is like peak irrationality to the downside.

One thing I want to pull out right there is you just said enough of these claims go viral. It's one part where people are making the claims, but the sentiment of people also need to enable those claims to go viral. And that's the other half of the equation. There's two players. There's the people seating the takes, and then there's the market accepting them. And that is going viral. And so both factors have to be true.

That's actually a really good point because it's a way that I use my Twitter handle or that I observe other Twitter handles. Like, bullish takes will be max virality at the top, right? And bearish takes will be minimum virality at the top. And then at the bottom, bearish takes will be max virality. And bullish takes will be like, you know, people just don't want to hear it. Or there's like hundreds of responses as to like why you're incorrect. So we can use Twitter to generate alpha. We just have to do the opposite.

it. Basically. Whatever. Okay. So it's only for you. You don't get to share it. It doesn't get shared. And know that if you share your opinion, people will hate you until like three months

later. So that was like crypto-specific stuff. And then we also spent some time talking about macro and, you know, the rates of change. And we're seeing some early signs of, you know, inflation tapering. Also, there were whispers because that was November, that in December was going to be a 50 BIPS hike from the Fed as opposed to 75. That ultimately came to be true. And so there were a number of things within the macro data that were pointing to slowing rates of change. And I remember spending some time talking about that. And it's worth reiterating because this was a key lesson that Kathy taught me,

which is, you know, markets are always forward looking. And so they're always taking rates of change and projecting them. And so markets don't bottom on the absolute best or worst numbers, they tend to bottom or top on the absolute highest or lowest rates of change. And that's a really key thing to drill into the rate of change. And since we're talking about psych, just to add one more quick, because since this episode is really about psyche and how the brain works in relation to the markets, your brain doesn't release dopamine when it receives a reward. It releases dopamine on the anticipation of receiving a reward. So it's always front-running. So the rate of change is...

Maxed dopamine. Built into markets and also your brain too. Yeah, that's awesome. I like that. And so at the margin, if you have like a really bad rate of change, which is what we're going through for a lot of 22, and that rate of change is starting to get less bad, those first signs of less bad are really important to pay attention to. Now people, a lot of like more uninformed people will be like, but inflation is still so high, but that's the absolute number. And, And what's more important is that the rate of change is starting to falter or get less bad. And that is the setup for more optimism. Right.

Because then people can start to project, okay, by this time, you know, inflation will have gotten better. And, you know, we can buy risk assets again and rates will be at XYC or whatever it might be. So this is why you flipped bullish then, Chris. So is it true that, of course, none of this is financial advice? None of us have a crystal ball. But do you think we've seen the worst of kind of the dip? Have we already seen the bottom for at least assets like Bitcoin and E? I think that Eith and Seoul have seen their bottoms.

I think there's a small chance BTC could revisit its bottom. And that's, you know, maybe a little counter consensus. But it's only because like, I mean, Sol's 3x off its bottom. And Eth is 2x off its bottom. And BTC's like 50% off its bottom. and BTC is the first to be like majorly influenced by, you know, a bad situation in macroland. And so even though I expect things to continue to ameliorate here, it wouldn't surprise me in the second half this year to have some major shock, you know, or something that sets us aback. And I can more easily see BTC falling 33%, you know, back to, you know, that level, presuming it stays here.

which I actually also don't think it stays here. So there's a chance that that happens, right, that BTC would go back to its bottom. And that's just specifically answering your question. What I anticipate to happen is everything puts in higher lows. So like I could see 50K is like an important number for BTC. So I could see a reach for that and not quite getting it. I could see, you know, ETH reaching for, you know, call it. between 3 and 4K, I could see soul reaching for 80 to 100 kind of thing.

But then, like, there's really strong support for BTC at 20K for East right around where it is now to 1,200 for Soul at 30. So I'm prepared for a whiplash scenario like that. I think that, like, if we get another big move up here, which I kind of expect, that's going to really cause people to fomo. And that's going to start to get mainstream attention. And there'll be like this mini bubble. I think where people would be like, oh, I got to allocate or like people who've been on the sidelines be like, I can't take this anymore. Right. And then then you're setting up for like just a max pain scenario, like max whiplash. People get like overly enthusiastic, but you know, rates aren't

out of place that we can sustain huge moves and risk assets. I also think there's a lot more work to do on the innovation side of crypto to really have fundamentals driven rally, like sustained rally. And so that's where, you know, I think we'll get whiplashed at some point this year. Uniswap is the largest on-chain marketplace for self-custody digital assets. Uniswap is, of course, a decentralized exchange. But you know this because you've been listening to bankless. But did you know that the Uniswap web app has a shiny new Fiat on ramp? Now you could go directly from Fiat in your bank to tokens in DFI inside of Uniswap. Not only that, but Polygon, Arbitrum, and Optimism, layer 2s are supported right out of the game.

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Yeah, certainly I think people will make the mistake of not resetting what normal prices are in their head as they go through this bear market where perhaps we've set the bottoms. but people would probably forget that like going up to like maybe two-thirds up to our previous all-time highs is now kind of the normal and now it's considered inside of a particular range. This is exactly what happened during last bear market, 2018 to 2020, where ether bottomed at $80 and then went all the way up to the high, high price of $360 before going back down to $100. And people just weren't expecting a three, three and a half X in prices without triggering a

bowl market. Like, how could you go up three and a half X without that being a bull market? And it was exactly the moment that people fomowed into that went on for like a year and a half or so before we actually broke out as a result of defy summer and actually did begin to set new highs. And I actually remember that moment in 2020 where ether ranged between like $300 and $100, like three different times. And then when it broke up and hit like something like $425, me and many other people ran here too was like, oh yeah, it's on. Like we all believe it. It was pretty easy to identify. It was. in that one moment. But for a lot of newcomers, that's a novel experience for them. So Chris, when you, after we go through this perhaps 12 to 18 months of chop that we are perhaps expecting,

what are you really looking for it to say like, all right, we're done here. Like the bear market's over, a new bull market's on. Like what needs to be true for that to be your reaction? I think the main thing that needs to be true is we need to see new applications and new uses of crypto that are blowing all our minds. And that's what 2020 was with Defi Summer. People were like, whoa, like this is crazy. You know, this is a whole financial system. And yeah, like, it's rough at the edges, but like it works. And I can do all the stuff that I can do in a traditional financial system. And I couldn't do that in 2017. Couldn't do it in 18, couldn't do it in 19. But I could do it in 20 pretty seamlessly with the full suite of services.

And this is where I would kind of segment a future expansion into like a conviction or fundamentals-based rally first that kind of exhausts itself, then followed by like the copycat scammer euphoria rally, which will take certain things higher, but will actually like really divorce itself from fundamentals. And that conviction fundamentals-based rally just requires new things to be built. And even actually for the different layer ones, you know, very much including ETH, all those new things being built drives a lot of underlying demand by pressure for the underlying layer one assets. Right. And then like everyone starts being like, wow, all this new stuff is happening. No way am I selling ETH or Seoul or AVAX or whatever. Right. And so then like you have all this demand by people being really excited by what's happening.

and that's what tends to set off these kind of like step ladder moves upwards. Do you know what though, Chris, all that seems too simple in some ways. That's fair. And here's what I'm like asking about. It's like isn't this how, you know, 2014 through 2017 kind of the dull drums and then something new happened. Oh, that new thing was smart contracts and this thing called Ethereum. And then 2017, we had ICOs and, you know, make a bit. And the exact same thing happened, 2018 to 2020.

all the way to DeFi Summer. It's like, is our base case then just to anticipate the same thing playing out once again? And even on like a similar time scale. Like, okay, yeah, this is the point in time where you have like two years or so of building and we wait for cool stuff to happen. And then after that, you know, we get kind of the fundamentals rally. And then after that we get kind of the, you know, the fake scam rally or whatever, you know, people want to call it.

And it's roughly on like the same, you know, four to five year cycle. Is that just the base case? Is that how crypto works? Because if so, it feels like this is so predictable, man, because we've seen this story at least twice, maybe three times. Well, so this is a really great question and makes me, there's a lot of ways to approach answering it. On one hand, so I've bounced around in my mind about this. And where I've ultimately settled is assume humans don't change because they don't that much. Right. And so like that is the starting assumption. and then if you were to deviate from the pattern, you have to have really good reasons why you're going to deviate versus just saying, oh, this is too easy, too predictable. Because like, I went through the, this is too easy, too predictable into 2021, you know,

and that bowl and then the bear of last year into this year. So I've kind of bent through that of like, how is this happening again? Like, like, ridiculous. But despite me feeling that, it didn't prevent it from happening, right? So that would be my starting place is what are the reasons for this being different? I would say the number one biggest reason, or maybe there's, well, I feel more strongly about there being one. And that's just where rates go.

Like if a risk-free rate of return is 4 to 5% for a sustained period, that sucks so much energy out of risk assets like equities like crypto, because all of a sudden, your base rate of return is, you know, 5%. So in order to like take more risk than a treasury, you know, you got to be getting 10, 15, 20, 30%, you know, or more out of something like crypto. And so that just ends up discounting all risk assets more. So that I could see clamp things. And you have some like some heavyweights of traditional finance, you know, Drucken Miller or Howard Marks from Oak Tree saying that like we have a regime change. Like this is going to be a fundamentally different period going forward.

Like these guys are predicting like a flat decade for like risk on assets, aren't they? They are. Now, where I start to question maybe these guys are too old and too out of touch or to actually like behold into their own patterns is when I look at, and this is where you would put me more in the Kathy Woodcamp, where I don't. look at the rate of change and the rate of innovation and like the massive amount of like GDP growth occurring within crypto it's insane right it's like triple digit caggers every year and those guys marks and whoever they're not paying attention to that or like i mean drunken miller is favorable to

btc but they're not like in the weeds being like oh my god look at how much this is growing and if they could believe that an economy was growing, you know, at a triple-digit cagger, they might be like, well, that could probably, you know, overwhelm a stricter money environment. And so this is where I guess I have some conflict in my own head. The way that I deal with it is I actually don't really care whatever happens because, like, I have a plan. I have, you know, price targets, which are meaningful to me and placeholder. And if we hit those price targets in 2025, I'll take action. If we hit them in 2027 because things are more delayed,

then it'll just take me more time. And I'm not in a rush, right? I believe that we will have multiple crypto networks in the trillion plus range, right? And so that's where my head is. No one can say exactly how long it'll take. The starting case would be, if we just repeat the past cycles, 2024 is a big year.

Next year's like a rising expansion. 2025 is the crazy year, right? If we're starting to see the patterns, then it's like, okay, pay attention, guys. Like, it's happening again, whether you like it or not. The other thing I'd point out is we're all crypto nerds. We live, breathe, and eat this.

But for most of the population, crypto kind of comes and goes, right? And it's like, oh, like this cool thing is back. Like, I'm just going to like yolo into this. it's not like, oh, we're doing this again and like, look at where Eth is and BTC is and like I shouldn't use this app or buy this monkey PFP. It's like, wow, I just really want that thing because everyone wants that thing. And then that's kind of the herd psychology that'll fuel a lot of stuff. So even though we're maybe going through this meta experience of how is this happening in mass to all of us,

I think that a lot of people are not going through that meta experience and just, you know, going for it. and the bad memories of crypto from a few years past have faded for them. I guess that's true, David. Not everyone in the world subscribed to the bankless podcast yet. And so some people, some percentage of the population will miss this episode with Chris and not realize what's happening here. Chris, I want to open up the conversation to, you gave me the line, people don't change. And another topic of conversation, and I'll premise this with the episode coming out on

the bankless podcast after this one is with Anatoly from Salon. Nice. And one of the conversations that you and I have had is that ETH versus Alana is the new Bitcoin versus ETH. Whereas like in 2018 to 2020, the small, small young Ethereum community was getting absolutely hazed by the Bitcoiners. We were just, we could not break out in discourse. We were just getting punched down. Like none of what we said like really like stuck with, but we believed it. And so we stuck through. And I would like to say that history has definitely vindicated us, definitely been on the right side of like, yes, you can run an Ethereum node. It is actually easy to do that, no matter what they say. And you've said that, well,

the hazing of the Solana community by the Ethereum community is similar. Now, I'd like to throw a flag at that, but I'd like to first hear from you as like how you see the similarities between these two phases of the crypto cycles here. Well, one line that I remember from the last podcast with you guys that I liked was the strategy of an underdog is unbecoming once you become a king. And I think that that progression you see also, like if you personify a community. And so it's like when I joined the Bitcoin space, Bitcoin was like largely an underdog. Everyone got along. Everyone was running in a boat together. It's really when Ethereum got, you know, circulated as an idea and then launched as a network that it caused this reaction within Bitcoiners

who felt like they were better than or whatever. And especially following 17 into the of 18 and 19 and BTC held up much better than Eath did. And then like what would become the Bitcoin Maxis, you know, they felt king and queen like. And they punched down at Ethereum. And instead of supporting Ethereum in a time when it could use the support and a lot of people were working to, you know, address the things that needed to be addressed, be they like, you know, the structuring side of ICOs or, you know, scaling Ethereum or developer tooling or whatever. And if you were really paying attention to Ethereum, you saw all this things happening. But then, like, the Bitcoin Maxi attack was relatively uninformed and kind of fixated on the

same handful of tropes. And I think that's also revealing when people have, like, a fixed set of tropes that they just keep going back to. And it's actually not, like, it's not that compelling. It goes back to that idea of like it's emotional. It'll get people to be like, rah, rah, ha ha, like we got that guy. But like, it's not, you know, intellectually compelling. So that was the Bitcoin maxi against Ethereum folks in 1819.

I would say that Ethereum is, you know, more innovation focused than Bitcoin. Bitcoin's very conservative and it has innovated at a social contract level. But some of that innovation at the social contract level requires conservatism in the technology and certainly the supply. And so that's important. Like, I think of the Bitcoin community is more conservative and the Ethereum community is more progressive. I'm sure there's some Bitcoin Maxis that would hate that framing. There's some Bitcoin Maxis that hate a lot of things. Yeah, that's true.

They're going to hate anything I say. So because of that, I think that, like, Ethereum Maxis or Ethereum supporters, by and large, are a little, there's less vitriol. I think the arguments are a little better against Solana. Like, I think that it's a better attack, say, on Solana. And I think some of it is justified. Like, something that, you know, placeholder only, so we studied Solana from the white paper in 2017 onwards, but really only got involved later in 2022. And, you know, one of the sticking points for us was, you know, what is the concentration of the? this project. You know, how distributed his ownership? How open access is this network and this

asset to as many people as possible and basically lifting as many boats as possible? And I would argue that like what Solana went through in late last year and especially Q4 after the FTX collapse was like hugely decentralizing and like gave a lot of opportunity to people that hated on Solana for different reasons to support Solana. And then, like, if you approach it purely from a price perspective, you had Salana at 250, 260 at the end of 2021. All of a sudden, you had Salana at $8 to $10. And so, like, the opportunity is very different for someone at $8 to $10, and that's open access.

The other thing is, like, if you hated Solana for the FTX support, then you can't hate Solana more because FTX goes down. It's actually like one of the things you hated about Solana was the FTX and Alameda support and the structurings. And I agree the Alameda structurings were gross. But now that is, you know, a cancer that has been removed. And so something that I see too is like when someone is like just emotionally committed to hating an ecosystem, it doesn't matter what the ecosystem does to address the problem.

They're just going to find a different angle to hate it. And we see this with Bitcoin Maxi still against Ethereum. They're just like on to the next thing to hate. Big time. And like, they're never changing. Withdrawals will never be unlocked is the new thing. Yeah, right. And there's always going to be the next thing.

And I see some of that behavior. And I certainly saw it in Q4 of 2022 against Solana, where, like, Salana was getting its teeth kicked in. You know, it was down on the floor. A bunch of the things that people claimed to hate were getting ripped out of that ecosystem very quickly. And so then the opportunity was there and, you know, place all their chose to move in and support it.

And then other people chose to kick it while it was down. And, you know, it's up to you as a person, what you want to do. And I can get into more of the substance of like the work that led us to move in and support Solana. But just from like, you know, this maxi kind of phenomenon and what happens when the community is down. That's what I saw happening against Salana. I think there's an interesting failure mode that I saw with a lot of the kind of and still see with a lot of the Bitcoin attacks on Ethereum, Bitcoin maxi attacks, let's called them. in that whenever they were talking about Ethereum, they were trying to do sort of an apples-to-apples type of comparison

in that you'd ask like, oh, why aren't you bullish on Ethereum? Well, it doesn't have a 21 million supply cap, right? Yeah. And you're like, okay, but the root of that is you want a ossified monetary policy, right? And look, how Ethereum is evolving towards that, XYZ, you'd respond. Yeah, but it's not fixed cap. And you're like, why does it have to be fixed cap, right? Isn't the principle of Bitcoin that it should be algorithmic

and not up to the discretion of, you know, sort of a set of individuals. And here's how Ethereum is getting that. So what they would constantly try to do is they would try to map. They would try to say, well, this is different than Bitcoin, therefore it's bad. And I very much agree that it's important for open-minded people in the Ethereum community to not do that exact same thing to Salada. To be basically like, this is different than Ethereum, therefore it's bad.

right? You have to go back further to kind of like the base principles of the thing. And I think you have to recognize that Bitcoin is different from Ethereum and that Ethereum is also different from Solana. And you can't say because it's not exactly like Ethereum, it is not worthwhile. They can be different things in the same place. And that said, Chris, I want you to give kind of the take to an open-minded Ethereum advocate right now because I think there are a lot that actually listen to bankless. And I think an open-minded Ethereum advocate might be like, okay, Chris, give me the pitch then for Solana from an Ethereum perspective, right? Recognizing that as maybe different. But keep in mind, we've seen the rise and falls of many alternative layer

ones that have promised things, that have promised things in terms of transactions per second, in terms of kind of like architecture, promised to be better than Ethereum because of XYZ, and they haven't made it back the next cycle. Where's EOS, for instance? I mean, there's a slew. could kind of mention if you went back in time to the darling Heath Killers of 2017 to now. For sure. So what is the case to an open-minded Ethereum, let's say, for Solana? What would you say? Well, I'll approach it first architecturally, which is that Solana's sole focus is consensus

at the speed of light. And that speed, and it's more seconds per transaction, so like the speed or the latency at which transaction is clear, opens up a lot of new use cases that I don't think that Ethereum necessarily needs to solve or is super focused on solving. And that differentiation is a benefit, I think, to having soul in your portfolio alongside ETH rather than a detriment. So the more different ecosystems are, the better, for my opinion, because the less overlap they'll have actually in what the builders are doing, even if there's like

muckraking and confusion on crypto Twitter. And so that north star of consensus at the speed of light, and I would say the focus with which Tolly pursues that reminds me of, you know, the focus with which Vitalik pursued, you know, expanding the programmability of a blockchain network with a VM, which at the time a lot of people said is silly and won't happen, and there will be the attack vectors are too vast and all these things. And then, you know, but Vitalik and the team that he gathered around him had the singular focus on it and they did it. I would say that Tolly has a similar singular focus. Another founder that I would see having a singular focus in this way would be Mustafa at Celestia, which is almost on the total opposite side of Salana, but on the data availability and modular stack.

And what's important for me is like when I come across these founders who have like a singular first principles focus on things, they can debate that thing from a whole bunch of different angles. And you'll see interesting conversation occasionally between even the three that I just mentioned. And they'll all like entertain the others approach and understand it, but have the reasons and the principles for why they have chosen their own approach. And I would say they all recognize that these different approaches have tradeoffs. And it's not like a, this thing is best for all things. It's more like the system I am designing is optimized in its set of tradeoffs for use cases that I care about.

And like Tully's originating inspiration, I think aside from just nerding out on blockchains and being great engineer was, you know, as a daytime trader, you know, feeling like he didn't have equal access to the same latency that everyone else had. And so, like, totally in a way wants to give everyone equal access to latency of computation and transaction processing. And that's his goal. And I would say if you gave everyone equal access to latency, then, you know, that's the substrate for a much fairer financial field. Now, you can make arguments why Ethereum will do that too. And I think that Ethereum is building towards a future like that as well. the Ethereum future is more layered, right, L1s, L2s, now we're talking about L3s. And I would say that like, and this is where I'm going to step into the developer personality of the different ecosystems.

So like, if I look at Ethereum, it's like a much more like rainbows, unicorns, optimistic. Like, let's explore, you know, the vast world of what's possible. A lot of it won't work. some of it will be amazing, you know, step change progress. And it's also like a kind of like cypherpunky meets cosplay environment that speaks to a crypto native, right? Solana, and this started to get my attention as I was taking Solana deal flow through 2021. Solana is a lot of web two folks, a lot of traditional finance folks that wander into Ethereum land and they're like, I don't know what to do with the unicorns and rainbows. and like who do I talk to and like you know this just doesn't make sense to me and then they wander

into salonaland and they're like ah this is very familiar like I know how to build in this environment I know who to talk to and I would say even within myself I originally had an allergic reaction to Solana in that I was like no no you're doing this wrong this isn't like grassroots or organic enough like you know Ethereum is the way to do it but the thing that I started to notice Solana was able to onboard a lot of these very high caliber people very quickly and they found the environment welcoming right and then they became attached to it they wanted to build in it and that was super interesting to me because it was like these are high caliber people who want to work within the blockchain landscape but they actually don't feel at home in ethereum land and they're finding

their home in salana and then they're sticking like they're staying they're not like migrating home to home to home. So that started to get my attention. And then I also started to see some people within the Ethereum community that wanted some components of what Solana had deciding to build on Solana instead of Ethereum. And that also got my attention. There wasn't tons of that, but a good example would be the Orca team. And Orca is, I think, one of the best user experiences in all of crypto. It's an AMM on Solana. I think it's every bit as good as Uniswap. And And that team, one of the founders was Uttaro, who worked as a researcher at the Ethereum Foundation, was on the core team at Uma, and then decided to build something on Solana. And it's not like he was an Ethereum hater that wanted to prove everyone by working on Solana.

He had strong roots with an Ethereum and ultimately chose as an engineer who valued some of the things that Salana gave to build on Solana. Solen team I'm not as close with. It's a public markets position that we've built, but they also have Ethereum Roots. Another Solana team that I work with is Vault, and Vault is the founders of Fanduel. So Fandul has as much market share as Draft Kings. They've built a massive success consumer app. They know how to do it. They have, say, the blueprint for success. And they're choosing to build a dynamic, music and FT experience on Solana. And like, I talked a lot with Nigel, the CEO there at Vault, who was also the CEO at Fandul. And that's where this really started to unlock for me of like, he feels welcome and at home within the Salana ecosystem. So you're seeing a lot of that. And then, you know, I would encourage everyone to look at Electric Capital's Developer Report from 2022.

And, you know, I think that like one of the headlines there is this is setting aside. aside Ethereum and Bitcoin. But ecosystems with 1,000 plus total developers, and this year of year, Solana grew 83%, Polygram grew 40%, Cosmos grew 25%, and PolkaDat grew 2%. And so my takeaway from that is of the ecosystems after Bitcoin and Ethereum, Salana is the biggest, fastest growing ecosystem of developers. And then one thing I've learned as an investor in crypto over time, and we're touching upon this earlier, is I need to sometimes divorce what speaks to me most directly personally from like what will speak to a large group of people so long as it's still a net positive for the world. So like a younger, more riled up, more like cypherpunkey Bitcoin Ethereum me would be, you know, allergic and aggressive towards Solana, right? And say like they violated, you know, these key tenants of what you're supposed to do to launch a blockchain network.

but having gotten to know Toli and Raj and the team and the people working towards things, my belief is they're working to bring net positive change to the world, and they attract a lot of developers who don't have a home elsewhere within crypto. And if they continue to do that, then the economy that they create or the systems of production of goods and services are only going to continue to grow. And we've seen that, for example, in their NFT ecosystem, which is second only to Ethereum, and which has continued with really great activity through the bare market.

It hasn't, it's not like all those people have left and, you know, the opportunists are all gone. And so it's not even just on the developer base, it's on the user base. There's a fair amount of stickiness. Chris, throughout my history inside of the Ethereum land, once upon a time, I think around, maybe around 2019 to 2020, I was doing my old POV crypto podcast with my Bitcoiner co-host. And in the Ethereum world, I was the Bitcoiner, if you will. I was the one that was taking in a lot of the Bitcoin values and taking it back to the Ethereum community being like, hey guys, there's something real here.

We should pay attention to that. And I got teased. I was like jokingly, warmly teased as like the Bitcoin mole inside of the Ethereum camp. And maybe bankless listeners are like, that doesn't make any sense. David's the biggest ETH maxi of all time. Well, I would just like to say is like, yo, like there's a lot of valuable things about Bitcoin that I've always wanted to try and instill inside of the Ethereum world. because there's value there. And lately, it's been a little bit of the opposite where some other eth-maxis are like, David, why are you giving Solana the time of day? Like, why are you doing this?

And to me, it's, I'm not as convinced as you are, Chris, but to me it's that if we as Ethereum supporters do have the conviction that Ethereum is what it is, we should be able to understand why people feel compelled by Solana and still make our arguments. And so, like, my argument, would be like all of that was great, Chris. The Ethereum layer two, layer three ecosystem can still do consensus at the speed of light. Eventually, the network effects of Ethereum will trump over the cultural fit that Solana is happening. Yet I also appreciate and understand that that is a very real corner of the crypto universe. And my convictions as an Ethereum person need to not be blinded by what you called like my initial toxic reaction towards anything that's not Bitcoin or

Ethereum. And so, like, that's really been my motivation for exploring the Salana ecosystem to make sure that my biases are in check. And I am actually able to make strong, coherent, sober arguments that aren't just, like, tribal regurgitations. I am worried about tribalism on the Salana side as well, because when any Salana listener just now is like, oh, David, the L2 ecosystem is a failure on Ethereum because they're all multi-sigs. That kind of take is vibes similarly to me as the Bitcoiners saying, you can't run an Ethereum full node. Like, okay, like, like, let's not bet against the arguments or the roadmap of Ethereum because Ethereum has been able to prove that, you know, it does execute on its roadmap given enough time. But what would you say, Chris, to the close-minded Eith Maxi, who's like, Solana will never work?

Like, if we're, again, going back to what has become the theme of this podcast, which is personality, psychology, and psychological biases, what would you say to the Ethereum crowd about how to approach Solana and other topics like it? Well, I think, you know, modeling your approach would be perfectly valid. and it's a mature thing to do. And it doesn't mean that you have to like go and support Solana wholeheartedly, even if you make the investigation. I guess I want to drill into like L2 and then Solana. And I think that my expectation is like, I expect a lot of L2s to be a success.

You know, we were the first money into ZK Sync. I love the ZK Sync team. We don't invest competitively at the venture stage. And so we didn't make the other L2s. two investments, but I think that there's high-quality L-2 teams out there outside of ZKSync. And I mean, clearly already in the numbers, they're getting traction. And I agree that, like, it's grading to see Solana folks try and tear down the L2, you know, progress, just as it's grading to see the Ethereum Maxis try and tear down the Salana progress.

And there's hypocrisy everywhere, right? And so then it's just kind of like, okay, we just got to accept that, you know, we're flawed humans. but on the idea that, you know, L2s will achieve consensus at the speed of light, I think you're correct that it will eventually happen. One thing I've grown to appreciate more is there is a real advantage to being able to provide it months or even years earlier. And if Solana provides consensus at the speed of light years earlier than L2s reliably do, then that that's, that's going to get all the people that want the low latency applications to be building there.

Or if not all, a majority or enough to make it really sticky. And then the other thing is like, because Solana is SVM based and not EVM based, it's not easy to migrate something you've built on Solana to something on Ethereum, right? And unless we have SVM, so Solana Virtual Machine, L2s that settle into Ethereum, which we will get actually. Like I expect to see the Solana virtual machine proliferate as an execution environment with different settlement and data availability layers. So that's going to happen.

Somebody would say, well, that's going to obviate the need for Seoul. I don't think so because I think that Solana will remain the canonical chain for SVMs and where a lot of the assets are originated. Just as we've seen with Ethereum, right, like we'll see Ethereum teams go multi-chain, but the canonical asset stays within the Ethereum contract. And so what I think you'll end up seeing is like a lot of loyalty and stickiness at the asset level to Solana as the canonical implementation, but then migration of the execution environment to SVMs that sells different settlement and data availability layers. And one thing that placeholders played around with as an idea is like the thing that's stickiest for the developer is actually like the virtual machine and the developer

that go around it. And I think there you basically have EVM, SVM, and Cosmwasum as like, you know, key environments that you could build towards. Maybe within Cosmwasum, I should throw in tendermint. And that ends up being like, if you think from a developer perspective, the things that they have to learn and what take them time, right? And it's not just like an easy port. Those can be very sticky. So I guess in conclusion, I expect Ethereum and Solana and Cosmos for that matter to coexist and to grow together. And I don't think that one has to win, you know, to the detriment of another. Chris, one other just piece on Soul Token. So there's a difference between value creation, of course, and value capture. And so you could see a world where Solana,

the blockchain is used quite a lot. But why does it necessarily mean that sold a token will capture value? I know that Ethereum went through this exact same thing. Exact same thing. And this is a process, by the way, in 2018, 2019. And just to give, you know, folks, basically people are saying, hey, ETH can be used, but ETH doesn't have to be valuable. And then there was a chance of kind of a layer zero sort of the social community, gave myself, many others in Ethereum were saying, no, ETH is money. And you should value in the same way that Ethereum is, yes, there needs to be some hardening of the monetary policy, but, you know, it's going to harden. Anyway, eventually did harden. But now we get to a place. It's the triple point

asset. Triple point asset, right? And by the way, a lot of the triple point asset idea is inspired by something that you brought to crypto's attention, this idea of three asset superclasses, right? I mean, you remember this, right? Commodity. I do. And, you know, a commodity, capital asset. Consumer will transform a little. Exactly. Exactly. So, come on, Ryan. Are you, I need to go listen to make this podcast. again to get my story straight here. Chris, are you basically predicting that soul, the token, will follow the exact same path as ether, or as your view shifted on this, that like, yeah, why does soul the token need to accrue value? Because right now, it's basically, if you look

at the economics of it, it's bleeding money, in that they pay a lot more for block space subsidy than they are generating in terms of block space sales, which is kind of net negative from a profitability perspective. Are you just anticipating that that will change in the same way it has for ether? Yes. In a single word, yes. I expect there to be an evolution. To elaborate, when I look at Sol's inflation, and Placeholder has like an internal tracker of a bunch of metrics, but Souls inflation, I think is 6% annually right now, which is quite low, like from a yielding perspective for the people who are putting up that capital. The reason that's relevant to me is the, yeah, current annual supply inflation, east like zero to one percent, Saya is like three percent, Salana is six percent,

and then like a bunch of like near and flow or more like 20 percent and avalanche to 22 percent. And that data can always be, you know, a little bit off. But I think that's directionally correct. The reason that's super relevant is like, I think one way that valuations for proof of stake assets are going to find their footing is going to be around these yield rates. And I'm denying that Eath has the best setup, right? And it's the most mature. But like, the lower yield it is, that basically implies to me the lower risk, the validator set views the asset is having. And so they will tolerate lower amounts of inflation, but continue securing the network. And so that's really key as like an indicator of where this is going.

if other networks, say, need to inflate twice or three times as much to keep their validator set engaged, and Solana is inflating way less. So that would be a starting place. In terms of fees, again, this is just like the latest. I have 24-hour transaction fees for Salana at about 50K, which is, you know, double avalanche, triple file coin, like 6-7X Cosmos Hub, 25X, Polka. Yeah, but like one one hundredth of Ethereum. One percent of Ethereum. No, no. And this is where I'm not debating that Ethereum is like a much harder asset at this point in time.

I'm more at that place of like the indicators or the rates of change are that Solana is going to continue. Salana already is on a path to harden its asset and will continue to do so. That makes sense. So you're not saying that there's a different science that you're basically applying to Solana. You're saying it's just earlier in the process is your thesis. Definitely. Way earlier. So speaking of that, our 2020 episode with you was entitled to Ethereum opportunity,

and you said over the last two and a half years, that was your biggest win. Is this like the Solana opportunity to you? Is it like equivalent to Ethereum in 2022? Similar, yeah. I think if I had to pick an ecosystem that's contentious and that you should pay attention to, and in its contentiousness, it's undervalued, it would be Solana. Placeholder, each bare market tends to pick. a ecosystem or two and build an aircraft carry strategy around that ecosystem. And so the last bear

it was ETH and Bitcoin because those were really the only things at scale and liquid enough to justify. And then what I mean by aircraft carry, if you take Ethereum, buy a bunch of the core eth asset, but then venture invest around it and really get to know that ecosystem and who all the people are that are, you know, working on, say at that point in time lending or Dexas or asset management or whatever. And then you can pick the best teams of the teams that most speak to you from a venture perspective. We're doing that exact same aircraft carrier strategy around Cosmos and Solana right now. And like, I would say that the three most exciting innovation environments for me that I also see materializing in, you know, user adoption and growth

are Ethereum, Cosmos, Solana. And I think that if you talk with a lot, like, it depends on who you talk with, but like generally objective analyzers of the ecosystem, I would say would largely agree with that assessment. The difference, though, is salon evaluations are, at least at the venture stage, much lower than Ethereum and Cosmos. So, like, right now, Ethereum deals, venture deals, are 5 to 10x, what I underwrote things in 2018 and 19, in terms of the, like, starting seed or Series A evaluation. And, you know, what that means is if something goes 30x total for a, a VC, but it's marked 10x higher, I get a 3x instead of a 30x. And so it starts to actually just not even fit my return profile or like what I'm aspiring for. But Solana valuations at the venture

stage basically exactly where Ethereum valuations were in 18 and 19. And it's one of those like deja vu repeat things where I'm like, this is priced at what? And there's no competition for this deal. And, you know, the team is this high caliber. It just, kind of blows my mind. And so, like, one that your users could check out would be tensor. That's an NFT platform, pro-trading platform, probably the closest analog would be blur within Ethereum. This is built by two guys. They've built the whole thing. They've never raised money. They're Salana nerds. They, you know, love the network. You can follow them. It's Richard and Ilya. They're, like, so about, like, optimizing the front end to match, like, the speed of the Salana back end.

and it reminds me of like the type of grit and passion that I ran into with Ethereum teams in 1819 who just no one was paying attention. And there weren't like, you know, dozens of VCs all around, you know, clambering for around or, you know, touting a bunch of, you know, over promises, let's say. And so from the venture perspective, Salana's fruitful ground for me, I'm also doing a lot of work within Cosmos. I would say that Cosmos is a more consensus. investment ecosystem at this point, though. And so valuations for Cosmos are somewhere between

Salana and Ethereum at the private stage. Well, Chris, I think in addition to being the bankless podcast with the most words coconut in it, it's also the bankless podcast with most words Salana in it as well. Well, you're speaking with Tolly soon. Yeah. No, we already have. I think we just said Salana more times. All right. Well, yeah. I think I said earlier this call, I had like a slip. I said like, Sol salana, solana. Yeah. I definitely perk to my brain too.

Soling. You would say souling instead of selling. Soling. Soling. Soling. So Chris, this has been a lot of fun. You know, thanks for spending so much time with us today. I guess question as we're kind of closing this is for you to zoom out and look at

crypto because I know in addition to price appreciation and investment over the years because I've heard you speak so many times. I just know a little bit about your value set. it's important to you that crypto is a net good for the world as well. Not just that we all make a lot of money. I mean, that's cool. Everyone wants to do that. But I think you're here as well because you actually think crypto is going to bring about a positive force in the world. My question to you is, have we achieved that yet? Is crypto a net good? And are we on track to achieve that if not? I would say that the blockchains as an open data substrate that, allow for verifiable computation inevitably make it such that this will be a net good for the world. And then it's up to the builders and the investors and the early participants to kind of dial the knob to maximum impact versus minimum impact within this net good substrate. And what I mean by that is like, and this goes back to a lot of placeholders original thesis summary,

which people can find online. But if you look at how Web 2 is currently architected, that's proprietary code and proprietary data. And we basically, it's the new digital fiefdom. And, you know, we all labor for King Zuck, and King Zuck makes all the rules, and, you know, we just take it, and we have no control or governance rights against King Zuck.

And, you know, you either toil on his land or, you know, go elsewhere, don't exist. And we spend so much time in digital worlds that we can't exist on all these monarchies. We've gone through this from a social evolution standpoint already. And blockchains as this open data substrate also allow for governance forms that are much more democratic, that are of the people, by the people, for the people. And so all the promise and tooling is there to allow us to do that. Now, it was a very messy process to go from monarchies to democracies, right?

Like lots of revolutions, lots of turmoil, lots of, you know, dictators that were way worse than the old monarchs. And, you know, really just took advantage of the system or, like, took that period of disruption and used it to their own personal advantage. And so we're going to get that. We're going to get more lunas. We'll get more three aces. You know, we'll get those things that make me not. want to associate and distance myself from crypto in the next, you know, scam rally, let's call it in a few years time, following the conviction rally. But the substrate will remain. You know,

Bitcoin will continue producing blocks and issuing supply according to its social contract, as will Ethereum, as will Solana, as will Cosmos. And what's great is each bare market, we get to reset, by and large, the opportunists leave, and we can reassess, you know, the current state of things. And I love crypto most, each bear market, because I look around and I'm like, wow, there's way more cool people here and neat things being built. And we're having all the conversations I wish we had been having in the bull market, but at least we're having them. Right. And like even if you look at Solana, you know, it was having a lot of conversation at the depths of Q4 2022 about like ownership, right? And like how to structure communities.

union tokens so that they weren't predatory like Alameda. Those were things that Ethereum folks were rightfully calling out Solana folks on in 2021, but that the Solana folks didn't want to hear it then, but a year later it was being addressed. And so I take heart in the fact that those things are being addressed. I weirdly am most optimistic about crypto in bear markets and most pessimistic about in bull markets, which is because of like the social dynamics that we've discussed at length here. But this will inevitably be for greater good, and it's incumbent upon each of us to turn the dial towards maximum impact as opposed, maximum societal impact, as opposed to maximum personal impact. Well, Chris, I definitely was going through my 2018, 2020 bear market, my first real bear market,

thinking the entire time is like, man, if only the bull market would arrive, if only the bull market would arrive. And then the bull market arrived and that good feeling of like, yes, the bull market's here lasted for about three months. And then I realized, oh, no, what am I getting myself into? What have we done? What have we done? Oh, and like, now I look back on the last bull market and it's like that one like meme with the Chihuahua looking at the Vietnam like helicopters like flying overhead. I'm like, oh, that was awful. I'm so glad I'm back in a bear market. And so I'm definitely a cycle behind you. And I appreciate all of your mentorship and leadership as we're exploring the frontier of crypto. For sure. I appreciate you guys putting out good

information on a widening variety of networks. I think it's good growth for Bankless itself. We can't stop, won't stop, always talking about things that are decentralized and the good that crypto can bring people. And Chris, thank you so much for joining us to talk about that today. Thanks for having me. Action items for you, Bankless Nation. One, go back in the archives. Dig deep. Go listen to that episode, the Ethereum Opportunity with Chris all the way back in 2020. include a link in the show notes for you. Also, was mentioned, we have a developer report you check out from Lecter Capital. Chris mentioned that. We'll include a link in the show notes. And guys, this is actually the second episode of the year that we were releasing as an NFT

collectible. Chris has agreed to put 10% of the proceeds to Shielded Labs, which is a Swiss nonprofit that's spinning up to further support the decentralization of Zcash. So that's a good cause as well. The auction for that NFT episode happens at 3pm on Eastern. So we'll see you there. Risks and disclaimers. Got to end with this. None of this has been financial advice. Crypto is risky. You could lose what you put in, but we're 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.