Bankless - ROLLUP: 1st Week of June (Miami Bitcoin Conference, Arbitrum Layer 2 DeFi Summer, Coinbase Apple)

Starting point is 00:00:00 Bankless Nation, it is the first week of June. David, what time is it? It is a roll-up time where we condense an entire week of crypto news, good tweets and interesting opinions all into one single episode, which we are trying to condense a little bit more this week because last week is an hour and 45 minutes. We're trying to keep it under an hour and 15 minutes this week. We will see how well we do. Happy Friday morning to you.

Starting point is 00:00:36 We get this to you every Friday, either on YouTube. You can watch it there or on the podcast. go through markets, releases, news takes what we're both excited about, and we end with the meme of the week. David, before we get into this program, we got to talk about Khyber, dynamic automated market maker. That means if you're a liquidity provider or want to be a liquidity provider, you can deposit into Kiber's new automated market maker and receive more fees. Tell us a little bit about that. Yeah, Khyber is one of the OG's automated market makers in this space. They were in an AMM before we called them AMMs. And one of Khyber's really competitive advantage is expressivity.

Starting point is 00:01:14 And so they have a bunch of optionality with how fees are collected, how liquidity is provided. And they are opening up their yield farm. KNC rewards for liquidity providers are coming soon. So you can go ahead and front run that opportunity by learning how to be an LP inside of Kiber today and start accruing those KNC fees when those fee rewards get unlocked. So you can go to bankless.cc slash kiber and start LP. Check that out. Front run that opportunity, guys. All right, David, you ready to get into the markets? Let's do it.

Starting point is 00:01:49 All right, let's start with Bitcoin. We've got to start with Bitcoin because Bitcoin is still number one market cap. Who knows? Look, if that changes, I guess we start with a different asset, huh? But for now it's Bitcoin. No, we don't start with Bitcoin. We start with whatever's number one. That's the rule.

Starting point is 00:02:01 There you go. That's the rule. Bitcoin is number one. All right, what's Bitcoin doing? Price-wise, tell us. Bitcoin, $38,500 at the time of record. There is a theme throughout all crypto markets, all crypto assets, where we had that low on the 30th, the 30th of May, and we have been in a six-day up trend ever since then. So six days of green, which is starting to get people pretty excited.

Starting point is 00:02:24 But Bitcoin is still kind of lagging behind the rest of the crypto assets, really trying to claim that $40,000 level. Because the $30,000 range just I don't think is satisfying anyone right now. People are really looking for 40,000 and above. And so we'll see if Bitcoin can get back up there. David, I don't do much, T.A. But I got this email this morning from somebody, a newsletter I like called Rec Capital. And they talked about this thing called the Death Cross. And they said that Bitcoin might be going through the Death Cross if it just hangs out at its current price as early as June.

Starting point is 00:02:58 So I'm not into TA. I think a lot of it is horoscopes. But this was sort of interesting to me because this has happened multiple times before. in November 2013, in December 2017, in June 2019. And the death cross is bad, apparently, because once it happens, so to get to a death cross, there's usually like a 50 to 70% off all time high. But once the death cross happens, you lose an additional 50 to 70%. So if this happens in June, right?

Starting point is 00:03:31 And it plays out the way it has historically, then we could see another 50% off. of Bitcoin back down to 20K prices. Anyway, explain what a death cross even is for folks, because I'm not sure I totally understand what's going on here. Yeah, so a golden cross is when the 50-week exponential moving average, and a moving average for those that aren't deep into charts is a way to kind of take out the local noise in price actions and kind of do a lagging indicator over time. And so it's kind of easier. It's a number, a lagging number that follows Bitcoin price at various levels of resolution, right? And so the 50-week moving average is, you know, lags behind Bitcoin by just, you know, an average over the last 50 weeks, 200-week moving average

Starting point is 00:04:14 lags behind Bitcoin or any or any asset by 200 weeks. And a bullish golden cross happens when the 50-week, the short-term price action, crosses the 200-week, the long-term price action. That's a golden cross. A death cross is the opposite, where the 50-week crosses below the 200-week, which means that the short-term price action has been bearish versus the long-term price action. And so historically in crypto markets, the Death Cross has predicted, as you said, a very strong, just like deletion of market cap. And what Rex Capital is saying is that the 50-week exponential moving average is on a collision course with the 200-week moving average.

Starting point is 00:04:54 And so if it crosses below it, if history repeats itself, then we lose this pretty decent amount of market cap over the next weeks and months, following that. Yeah. So what's your take on this? Is this like certain that it plays out? Because as I said, I think sometimes TA is horoscopes. But again, I'm not a trader.

Starting point is 00:05:10 I'm like I'm thinking about long term fundamentals of these crypto assets and long term, of course, the right position has been bullish. I think that's the right position now. But could this mean something bad in the short term for Bitcoin, particularly if that death cross happens? Yeah, it's hard to ignore precedent, right? And everyone has different opinions as to detect. technical analysis and how legitimate it is, how much it actually works. To some degree, like,

Starting point is 00:05:34 I don't really believe in technical analysis. Ryan, I know you don't really believe in technical analysis. And a lot of other people that I talk to also don't believe in technical analysis. Yet, we are all looking at the charts doing technical analysis regardless because we're talking about it right now. We're talking about it right now, right? And like, I have my charts up and I like to draw lines on it, even though I don't know what I'm doing. But to some degree, like, if everyone's drawing the same lines and coming to the same conclusions, it can turn into a self-fulfilling prophecy, right? Like, that's kind of, that's kind of the gut take for, you know, does. So then it does work. Yeah. If math psychology, you know, the layer zero, if everyone

Starting point is 00:06:07 believes it works, it kind of works. We are bringing on Ledger from the Ledger cast podcast and the up only podcast on the state of the nation on Tuesday, who is much more informed about these things, both with technical analysis and also fundamentals of this space. And so I'm really excited to get his opinion on it. Ledger has been just growing it more and more into an Ethereum bro. And so I'm super happy to bring him on the state of the nation for I think our first ever like charting and TA themed episode. We've never done one of those on a bankless state of the nation. And so we are going to ask ledger all of these questions in a much more informed capacity next Tuesday starting two hours earlier than normal. So 9 a.m. Pacific time 12 p.m. Eastern time

Starting point is 00:06:49 on Tuesday for that week that week state of the nation. So stay tuned for that. David, I think I'm going to ask him the exact same question like about the death cross. You're probably going to get a much better answer. Yeah, we'll see. All right, let's go to ETH really quick. So that's Bitcoin story. What's ETH doing to us? For us.

Starting point is 00:07:06 Heath is right below $2,800. Spent a decent amount of time above $2,800 yesterday, dipped right below it as of the time of recording. We are hovering at $2,796. And just like Bitcoin, ever since last the 24th of May, like six plus days of pretty decent uptrend ever since then. and there is a decent level with which we established on like the 20th and 21st at 2,800. Then we hit 2,850 again on like the 27th.

Starting point is 00:07:36 And now we are right below 2,850-ish again. But there's this triangle that's forming. Again, here's me doing here. It's trying. It's trying. We got a triangle. We got a triangle and it's trying to break out of it. So we'll see if it breaks out of the triangle and see, you know, triangles.

Starting point is 00:07:49 Yay. But like the sentiment on crypto Twitter and especially Ethereum Twitter has really picked up steam again. I tweeted earlier this week, it turns out the cat wasn't even dead. I think if there was a dead cat bounce, it would have dumped again by now, but we are almost on our seventh day of green greenness. And so I'm putting, as if I ever took it off, but I'm putting my bullish cap back on. Short-term bull cap back on. What is, what are we looking at here? This is a lot of interesting bars. Some are red. Many recently are green. What are we looking at, David? Yeah, this is the monthly So every candle in this chart is one month.

Starting point is 00:08:25 This is the ETHUSD monthly candle chart going all the way back until like February of 2017. This is linear. Sometimes when you look at these timeframes, it's actually kind of best to look in log terms. But really the story here is the monthly candle that is the ether just printed. It's called a Doji candle, which has a massive wick to the top, a massive wick to the bottom. But it closed opened and closed roughly at the same price. right and so the body of the candle is very small the wicks are huge uh and so basically it's just telling you there's a lot of volatility but it's just a funny looking candle and we're going to be looking at this

Starting point is 00:09:01 candle for basically the rest of time right because monthly candles are a big deal that uh there's only like uh you know five times 12 of so 60 monthly candles and so one of them is this massive dogy candle which went from like four thousand three hundred dollars down to seven hundred dollars and then back up to its close at right around two thousand seven hundred dollars You know, it's funny as I look at this and I go back in time. If you like zoom in, there's like a couple places in 2017, 2018 where this happened. One is, you know, a July, June, July, 2017, right? And like, if you zoomed in on that, it would probably look similar-ish.

Starting point is 00:09:38 But also, 2018 February, where kind of the market just fell off. That looks like a similar candle, like the highs and sort of the low. So that's sort of the question, right? Is like, are we just at the midway point of the bull market about to spring forward higher? Or is this the end? No, no. We're halfway point. Halfway point.

Starting point is 00:10:00 We know they answer to that. We think we know the answer to that. Look, here's a chart that I'm really excited about from a fundamentals perspective to David. And this is the percent of ETH supply on exchanges. It's getting lower. That means there's less ETH on crypto banks, as we call them, on exchanges. more ETH in DFI, more ETH serving its purpose as a self-sovereign money, store of value, collateral asset.

Starting point is 00:10:26 This is the bankless chart, my friend. This means that the world is going more bankless as this ratio goes down. So super exciting to see that. It means defy is thriving. It means ETH is not custodied in third parties. So it's super exciting. I hope we continue to see it hover around there. or maybe go lower.

Starting point is 00:10:49 I'm wondering what custodial staking solutions might do to this ratio. There might be a period of time where staking in places like Coinbase or Binance becomes very attractive before we have decentralized staking solutions in place. But we're going to be monitoring this. It's hugely bullish for me to see. And I think hugely gratifying to see that as part of the bankless movement. Right. If we were seeing this thing go up into the right, especially which it would be bad because

Starting point is 00:11:17 that means there's more ether on exchanges. And if we saw that during a bull market, that would be like really bearishness for like banklessness as a concept, right? But we had this massive choppy like last two weeks, right? And you can see that chop in both the inflows and outflows. There's just a lot of volatility with people putting ether into exchanges, pulling ether out of exchanges. But one of the reasons why I'm pretty convicted that we are just in the second half, we have just entered the second half of the bull market is because that downtrend is still following the trend that it was following before the big sell off. Right. And so, ether largely price action and price discovery of crypto assets largely happens on centralized

Starting point is 00:11:51 exchanges because that's just the way that it goes ether is unique because it can also come to price discovery on on on defy but defy kind of has been following cfi like um in centralized exchange uh you know price discovery because like when institutions come in they're not buying uniswath ether on uniswap right they're not buying it on sushi swap or any of the dexes they go to coinbase they go to gemini like they buy and discover and ether comes to price discovery from new buyers on centralized exchanges. And so when we are only at 11% of ether supply on exchanges and falling, that means ether price can move really, really quickly when there are big buyers coming in. And DFI tends to follow D-C-Fi valuations. And so what this

Starting point is 00:12:33 really, the TLDR is that ether is primed for price discovery. As soon as any meaningful buyer steps in, it's going up into the right. There you go. Up into the right. Let's talk about ETH to Bitcoin, Speaking of other things that's going up and to the right. Not quite up into the right. You know, but like going up, right, since recent. So talk to us about this because this is not quite a local high, but it's certainly recovered from its lows a couple of weeks ago. So again, the ETH Bitcoin ratio is a determiner of the strength of ETH

Starting point is 00:13:07 versus the price strength of Bitcoin. What's happening here? Yeah. So when there was like basically Ethereum flippinging week or weeks where everyone was talking about the flippinging, we hit that high just above 0.08, eith per BTC. We had three euros on. Three euros capital, right.

Starting point is 00:13:24 Like all the Ethereum people were gloating, like, guilty. And then we had that big, that big sell-off and ether fell all the way back down to like 0.057-ish per BTC. And ever since then, we have kind of resumed the trend that has been established since like April, which is, you know, we kind of went up too fast. We corrected a little bit. we are resuming the trend. And that's why it's not a dead cat bounce.

Starting point is 00:13:49 That's why we are in the second half of a very long bull market. And that's why, your boy, it's bullish. Some strength on that ratio. Absolutely. It's actually really good to see that. Let's talk about the strength of defy. That's our next section. Total locked value in defy is recovered some.

Starting point is 00:14:06 It's high as we're around 88 billion total locked in defy. That's in US dollar terms, of course. Now it's back up to 70 billion, not doing too. bad. Sixty-nine billion. Nice. Locked in Defi. And it kind of looks like the same chart as both the ETH-Eth-USD chart, the ETH-BTC chart, and now the TVL and DFI chart. It went up, long, long trend up into the right, went really, really fast in May, corrected in late May, early June, and now is resuming an up-into-the-right trend. All these charts kind of look the same. Let's talk about the DPI index. So this is a good indicy measure of how well DFI tokens

Starting point is 00:14:45 are doing, this is looking kind of, I've got the three-month pulled up. It's sort of flat on the three-month, but if you look at it on the weekly, it's also flat on the weekly. What's this showing us? Yeah, defy tokens have really lagged behind the bigger crypto assets like Bitcoin and Ether. They have also recovered from their capitulation lows during the sell-off and then the almost again sell-off that happened on the 30th of May. 30th of May had dropped all the way down to 320, but now we are up to $407 per DPI token. And recovering, but not recovering as fast as Ether or Bitcoin. You know what?

Starting point is 00:15:23 I really think that DFI tokens are in sort of the buy zone. Like there's some deals out there. I mean, we talked last week about the YFI token. Its price earnings ratio for May was like 12. You know, like, defy tokens are not getting the love, maybe that they should be. And I'm wondering what layer two actually unlocks for them as far as. as fees, transaction volume, revenue. Remember, these are capital assets. So if they were priced based on fundamentals, they would respond quite strongly to that. Of course, the market is all about

Starting point is 00:15:53 crypto market is all about narratives, though. And right now, defy tokens are not the dominant narrative. But that might mean there's some buying opportunities out there. Yeah. And if we think, we'll talk about this later in the roll of, but if we think that we are on the cusp of a defy summer layer two edition, you want defy assets because you're people going to be needing to buy assets to farm with them as they did in DeFi summer round one. And so, like, if you think that yield farming on layer two is around the corner, you need to start allocating to defy tokens because that's how you're going to farm. And you want to allocate to the right ones, too.

Starting point is 00:16:29 Like, which ones have great layer two strategies? Oh, I have opinions on that. I have opinions on that. Oh, we should talk about that later. Let's talk about it later. All right. First, let's get to this, because inflows have been really interesting into the DPI. DPI, of course, is an index of itself of many of the top DFI token assets led by the index co-op, which is a Dow.

Starting point is 00:16:49 But this is Lemonade Alpha saying DPI inflows are going crazy, mostly led by whales. He's got some charts here. What are we looking at? Yeah, we are looking at the increased unit supply of DPI, right? And so DPI price goes up if the underlying assets go up in price. But DPI supply goes up when people have demand for DPI, right? And so people buying DPI doesn't make the DPI price go up. It makes the unit supply go up.

Starting point is 00:17:16 And the unit supply going up, it's having it's one of its largest growth periods in its history right now. And what he's saying is what Lemonade Alpha is saying, who's part of the index co-op team, is that it's primarily led by people that are buying more than 250 DPI units, right? And so if DPI is at $417 and they're buying more than 250 units, that people are allocating $100,000 loss at a time, and that's more than 50% of the people who are buying DPI.

Starting point is 00:17:44 David just did that math in his head. I know, I didn't. I literally took the out of the calculator. No, I was on the calculator. Oh, come on. Did you not see that? People don't know that. That made it to the camera.

Starting point is 00:17:52 Yeah, no, that was a calculator. No, this is for the podcast, people. I was, you know, I was going to, you know. I'll cut it out of a podcast. But yeah, 50% and above are people buying $100,000 units of DPI. And so whales are accumulating. defy tokens. There you go. That's the story here. All right, but what's the story with the DPI to ETH index? That's another one we've been tracking. This is sort of an indicator of how hot DFI

Starting point is 00:18:18 tokens are relative to ETH, and that's staying flat. It's staying flat. It's right above the line that I called the low at, which was 0.13. That's where I call the bottom of the DPI versus ETH chart. We are still above it. We are still above it, but not by a healthy margin. And so we are currently at 0.146, DPI per, ETH per DPI. Yes, ETH per DPI. And it's still in like this kind of long term downtrend channel-ish since April has not yet broken out of a very long steep like downtrend. It's going to at some point. It feels like it's going. Yeah. By summer is the end of DFI summer. Right. How much higher it was. Right. And and that's the bull case for DFI tokens is a returning to DFI summer.

Starting point is 00:19:07 levels, which is basically a 2 to 3x versus Ether, not versus dollars, but versus Ether. And like, I think it's, there's a ticking time bomb until that happens, in my opinion. Versus Ether is interesting. I mean, if they both go up together, David, then this ratio doesn't move. So we'll have to see how that plays out. Well, let's talk about something that is playing out in a big way. That is this is Defy Exchange volume, Dex Volume, just shooting right up, like absolutely massive. If you include things like pancake swap, then the volume was over 300 billion last month.

Starting point is 00:19:43 I don't know if I would include pancake swap. I'll put an asterisk next to it. There's an asterisk there. But Defy exchange volume is growing. Of course, during the recent downtrend, defy exchanges were the only ones left standing for a brief period of time. They consumed all of the volume. They performed pretty spectacularly, I would say, with a 60 to 70. drop and just like seeing some super impressive volumes that are absolutely dwarfing anything we saw

Starting point is 00:20:12 in 2020. And he takes here. Yeah, liquidity providers during the last two weeks got absolutely paid. And so if you have been learning about Uniswap V3, congrats. I bet you got a decent amount of fees in the last couple weeks since March. So for the last two months or three months, we have two X dex volumes consistently. So March was just below 100 billion. April was just below 200 billion and now we are just above 300 billion monthly Dex volume. Crazy. Crazy. Yeah, this is another cool way to look at Dex volume, which is the dominance of Dex volume for ETH or ERC 20 pairs. And this is particularly Uniswap volume versus Coinbase volume. Look at this, David. Uniswap is absolutely killing Coinbase in terms of USDC to Eith. 784 million

Starting point is 00:21:04 volume on uniswap versus 59 million volume on coin space like absolutely what is that i mean like 15x or something something something close to that eth to bitcoin uniswap's doing more volume than coinbase on eith to bitcoin this is of course wrapped bitcoin but same same eth to usdt uniswap is even even beating coin base on that it's like these numbers blow me away dude like i would not have imagined this is possible in 2020 for uniswap to just like start dominating coinbase in terms of exchange volume. And we're in the middle of a bull run, right? Like so how does this happen? What's going on? It's the protocol synchristy is just playing out. Uniswap is easier to use. Defi is easier to use than CFi. And if you're a newcomer,

Starting point is 00:21:53 that statement might seem foreign to you. But as you become more and more use, like to use to how defy works, all of a sudden, like these defy apps are just like the shelling point as to where to go. Liquidity straight up better in Defi and usability straight up better. And so like, yeah, the protocol sync thesis predicted this. And guess who wins when that happens? Hayden Adams with another tweet here. Hyper-efficient staple coin trading on uniswob v3 has already resulted in one. Coinbase Pro reducing their fees by 100% their maker fees and their taker fees by 98% and curve increasing the efficiency amplification across its pools as well. So when a new better, more capital efficient, D-5 protocol machine, we talked about these things being like money robots,

Starting point is 00:22:42 like everyone's, all of these money robots are at war with each other for liquidity, who benefits? Defi users benefit. It's fantastic. Cryptonatist benefit. Like keep these wars going, man, because we're just getting better, more capital-efficient markets. And this is why, by the way, David, these markets are going to eat the rest of the traditional financial world because they're in this like, yeah, like they're in this like kind of Darwinian jungle here. And they're like, leveling up and getting better and it's complete survival of the fittest. Traditional finance is outside of the jungle somewhere else. But once these organisms adapt, right, and once they break out of the jungle that they're in, they will start eating NASDAQ. eating your stock exchange, eating the rest of the traditional financial world, and the banks won't

Starting point is 00:23:33 know what hits them. Right. That's the DeFi bookcase. Yeah, the takeaway that I have from this is that like Coinbase and another defy protocol had to forego capturing fees because of the competition that Uniswap v3 put on the table, right? It's like, oh, like their only reason why Coinbase was able to capture those fees was because there wasn't really a viable alternative. Therefore, they had the best product and they would charge fees for it. They no longer have the best product. And now they had to basically eliminate their stable coin trading fees because of what Uniswap V3 brought to the table. You know what's kind of cool? A byproduct of this, David, is now that Coinbase is a publicly traded company.

Starting point is 00:24:10 The Wall Street analysts are going to be looking into Coinbase's revenue and be like, oh, why did we have to reduce maker fees by 100%. Oh, it's because a D5 protocol, Uniswap? Like, what is this thing? Which has a token that we can buy? Oh, my God. Wow. That's how they learn about Uniswap and DFi. the token. It's all going to play out that way, I think.

Starting point is 00:24:32 Totally. All right, let's talk about flippinging metrics. Here are a few. Should we just read these out? Wanting to start? Let's burn through these. There's eight total metrics with graphs to go on the screen. Heath flipped BTC and several metrics in May. Many metrics are now measured in the trillions or are close to it. First metric is total adjusted on-chain volume increased by 35% to a new all-time high of one trillion dollars combined with Bitcoin and Ether. And Ether is the majority of that volume. Like 60-40-ish. Not other staple coins.

Starting point is 00:25:03 It's ether, huh? It's not other year. C-20s. All right, this is the second. Adjusted on-chain volume of stable coins increased by 52% to a new all-time high of 766 billion. Pretty impressive. Very impressive. What will get next?

Starting point is 00:25:19 Next up, while BTC minor revenue continued to decrease by 15% to 1.5 billion ether minor revenue increased by 42% to a new all-time high of 2.3.3% of 2.3% of,000. $35 billion. This is the first time since June 2017 that Ether minor revenue exceeded Bitcoin minor revenue. And mining revenue is blockchain security. And security is basically the fundamental reason why this whole industry works. And so Ethereum miners are being compensated better than Bitcoin miners in this current month. David, Ethereum, the more economically secure network now? Mm-hmm. Mm-hmm. For this month. For this month. Yeah, month of May. legitimate centralized exchange spot volume increased by 38% to a new all-time high pretty impressive making it the fourth time this has ever happened wait like oh this is uh on-chain volume of

Starting point is 00:26:11 eath as an asset is that what we're talking about here uh no legitimate centralized exchange spot volume increased by 40% um and so this is just a this is just all the exchanges out there are experiencing more volume so kind of just a bull market indicator. It's just the volume on centralized exchange is going up into the right. Ah, that's not related to you, Flippin. No. These are flippings in general. General. I see. Okay, so it's not ETH to Bitcoin flipping. It's just flippings in general. Okay, daily average volume of GBTC stabilized at 419 million. That's really good because the GBT lack of premium, the was dying. It has been dying, but now it hit a floor so far and starting to resume parity, which

Starting point is 00:26:55 is kind of like people are breathing a sigh of relief on that one. Thought that would happen. I'm glad it is. What's this next one? Bitcoin future volumes increased by 30% to a new all-time high of $2.5 trillion dollars in the month of May. Binance alone traded a trillion dollars in Bitcoin futures. Geez, I mean, these crypto banks are just crushing it in terms of fees.

Starting point is 00:27:16 As for ETH futures, volume increased sharply by 100%, almost 100%, 94%, to a new all-time high of $1.7 trillion, Ether as well, becoming financialized as a reserve crypto asset. What's the last one? However, the real story is on the derivatives front continues to be eth options. The trade volume of Bitcoin and Ethereum options in a monthly has increased up to 60%. And so Ether futures volume going really strong up into the right and is now is 60% as large as Bitcoin volume, future volume trading. So pretty cool.

Starting point is 00:27:55 Yeah, David, I saw that ether went from like basically nothing relative to Bitcoin in futures volume on Deribit in 2019, 2020 to now getting closer to parity and maybe actually flipping Deribut if the trend continues flipping on Deribut volume. Anyway, lots of good stuff going on. David, we're going to get to releases in just a minute. But before we do, we want to thank the sponsors that made this roll up possible. Synthetics is Ethereum's decentralized derivatives liquidity protocol. What does that mean? Synthetics is a platform for creating and trading synthetic assets, which are assets that are priced via an Oracle rather than bids or asks.

Starting point is 00:28:37 Traders can use the Quenta Exchange, which hosts and trades all of the synthetic assets created by synthetics. Traders on Quenta can trade synthetic tokens like SBTC, S.OIL or S-DFI. Because Quenta is powered by synthetics, traders experience zero slippage on their trades. No, I didn't mean low slippage. I meant no slippage because that is the power of the synthetics platform. No slippage on your trades. You can also easily short assets with iSynths, which are synthetic assets that move inversely to their target asset.

Starting point is 00:29:09 Synthetics isn't just for traders. Developers can build on synthetics to access the infinite liquidity offered by synthetic assets. Or investors can stake collateral. to the protocol and earn fees that the protocol collects. If you're a trader and you're looking for a trading platform not found in the legacy world, check out quenta.io. If you're a developer or you just want to earn yield on your collateral, go to www.synthetics.io, where you can stake your SNX or ETH

Starting point is 00:29:36 and earn fees from synthetics. AVE is a borrowing and lending protocol on Ethereum and just recently released AVEA version 2, which has a ton of cool new features that makes, using Ave even more powerful. With Ave, you can leverage the full power of Defy Money Legos, yield, and Composability all in one application. On Ave, there are a ton of assets that you can deposit in order to gain yield, and all of those same assets can also be borrowed from the protocol if you have deposited collateral. Here you can see me getting a 200 USDC loan against my portfolio of a number of different defy tokens and eth. I'll choose a variable interest rate because it's a lower

Starting point is 00:30:18 rate than the stable interest rate option, but I could choose the stable interest rate option if I wanted to lock that interest rate in permanently. One of AVE's V2 features is the ability to swap collateral without having to withdraw your assets, trade them on uniswap, and then deposit them back into AVE. AVE does all of this for you all in one seamless transaction, so you don't have to repay loans in order to change the collateral you have backing them. Check out the power of AVE at AVE.com. That's AAAVE.com. we are back with the hot releases. David, we got to start here. Arbitrum. Man, Arbitrum is everything I thought it would be. After our conversation with them on City of the Nation on Tuesday, I'm super excited about

Starting point is 00:31:01 this project, about roll-ups in general. They just launched their developer mainnet beta. Can you describe what's included in that launch? Right. So Arbitrum has like, you know, cut the red tape and allowed the developers to enter this new land, the new Arbitrum real estate, the new suburb of Ethereum. And on this suburb of Ethereum, things go really, really fast for really, really, really cheap. And as far as a user experience goes, we haven't experienced this ourselves, because right now it's developers only. But basically, this is like if you've used a Polygon bridge, much like that, but I think even faster as a bridge, but you just go into Metamask and then when your money is over on Arbitrum, you just go and pick the Arbitrum network, and then

Starting point is 00:31:41 all of a sudden you're in like the super fast highway that is arbitram. And so arbitram has already had like a number of projects. I think they said over 250 projects express interest in building on arbitram. There are some projects that have already released the fact that they have finished building and now are already almost ready to open up to users. Sushi swap, Uniswap, Dodo Dex, Alchemy, MC decks. All of these teams are building on Arbitrum, building out the rides for all the users to come on, right? And so right now it's developers only because developers have to go build the things for the users to use. But users are coming, like, I think to Arbitrum maybe as early as next week. I bet you the first thing is going to happen is sushi swap is going to get in release

Starting point is 00:32:24 because they are just known for moving really, really fast. Ryan, we were talking earlier about which particular defy tokens are going to be well suited to a DeFi Summer Layer 2 edition. And I think Sushi Swap is at the top of that list just because they are known to just pound out integrations and new products. And I, so I kind of think that sushi swap is going to be the first thing that is available on Arbitrum. But so many other projects are coming right on the heels of Sushi Swap. And so congrats to Arbitrum.

Starting point is 00:32:51 Congrats to all the teams building on Arbitrum. And congrats to all the users who really have just felt sidelined by high gas fees on Ethereum. Congratulations. Arbitrum may be your new home. Yeah. And this is happening fast. Like David said the builders are building out the rides.

Starting point is 00:33:06 But the reality is what they can actually do is just. port the rides that they had from another era of the theme park into arbitram. When we asked the arbitram folks, how long it takes to move smart contracts from Maynet into Arbitrum, they're like, a few hours. Yeah, like a couple days. Like you've got to test it, of course. But this is EVM compatible, which means you can sort of hot swap some of these contracts. And there are some small changes, but not a lot.

Starting point is 00:33:31 So super optimistic that this is coming soon. David said next week, maybe, might take a little bit longer. but this is definitely a summertime thing. This is definitely a June, July thing. So super exciting. Anyway, this is great. Great stuff. We're going to talk more about that toward the end.

Starting point is 00:33:48 I said this last week, but this changes everything about Ethereum. Like L2s and specifically this type of construction of L2s has been like anticipated since even before the first block of Ethereum was mined. And so like this is a big deal. Yeah, well, we just talked to Vance. Spencer. That's coming out on Monday, guys. Monday podcast. Tune into that. Ben Spencer is a VC at Framework Ventures. We talked extensively about Layer 2 and what it means. It is a major step change. So make sure you tune into that episode too for more. Okay, Coinbase links its Visa debit card with Apple Pay and Google Pay.

Starting point is 00:34:28 So now I'm just questioning like why we need traditional banks. Like I mean like if I could if I could just use Coinbase and Defy or Gemini, and defy, that's all I need, man. Sure. I don't need Wells Fargo. I can pay my bills. Like, I don't think the banks realize what is coming for them. Right. They don't think of Coinbase as a bank.

Starting point is 00:34:48 They think of it as a crypto exchange, and that's their fault. That's going to be their downfall. I would much rather have my, like, gusto direct deposit go straight to Coinbase. That would be fine. I can choose, at Coinbase, I can choose, like, do I send it out to, like, the real world to buy my coffee or do I send it out to Ethereum to live for them? Let me ask you. What's stopping you?

Starting point is 00:35:07 you legit have a Wells Fargo account. Okay. So do I. Don't docks me like that. Sorry, I dox you, bro. Okay, so I know you have one. What's stopping you from? Is that a threat? Yeah, I know. I know it exists. I've seen you at Wells Fargo. I know where those checks go. Those paper checks. Um, okay, but like, what's stopping you from shutting that thing down, man? I know it's not the savings rates. That's very true. It's because I got to pay, I got to pay rent and I got to pay my credit cards. But after that, like nothing stays in my bank account. There you go.

Starting point is 00:35:41 It's over. It's over, guys. They don't know it yet, but it's over. Anyway, rip banks. Let's go. NOSUS. What's NOSUS doing? NOSIS partnering with the open Ethereum client to make a new Ethereum 1 client called

Starting point is 00:35:53 Aragon, spelled E-R-I-G-O-N. And so this has kind of been an evolution of a long-standing Ethereum client. a fork of Geth turned into TurboGeth, turned into Open Ethereum, which is now Aragon. And so we have a brand new Ethereum 1 client that is being maintained by Nosis. And we have heard some really rave reviews from some developers in this space. Here's band tag out of the urine teams. And Aragon is so with Rios, good. Can you imagine scanning traces from the entire history of Ethereum in under five seconds?

Starting point is 00:36:26 It can do that. And so even Ethereum 1 innovation still pretty. still moving forward at a solid tick rate. Yeah, I'm glad. And this actually means, so, NOSIS is sort of an ecosystem contributor, the public good, which is the Ethereum Protocol. They took over the old parity client. They're shutting that code base down in favor of this TurboGeth code base because I think

Starting point is 00:36:48 it's just better. So I'm really excited about that. Let's talk about what Argent is doing. Argent, one of our favorite smart contract wallets, now has a more secure and convenient way to provide liquidity to Uniswap V3, one button. Argent user interface is just immaculate. I feel like, David, the thing that has held Argent back to this point is not being on layer two. But like, once they're on layer two, they have integrations like this, where it's one click into uniswap.

Starting point is 00:37:18 It's over. It's going to be a really exciting user experience in Defi. And he takes here. Yeah, the other innovation is that there's actually multiple transactions being bundled all into one. And so that's also really the through line here. So you have when you LP for Uniswap, you have to approve two tokens and then deposit, right? So one approval, second approval, and then a depositing transaction. Argent has this bundled all into one single transaction.

Starting point is 00:37:43 And this is also a story of Ethereum block space being consumed more efficiently. Rather than three separate transactions, we're bundling it into one. It's less time for the user. It's less block space demand by the consumers. And so, you know, people often forget that a very, very real way to scale Ethereum is to do the same things while finding innovative ways to consume less block space. And that's what's going on here. Do you know, like, cussing your private keys, that sort of thing with Ledger of MetaMask, it's still clunky today, right? People are asking about, like, when's that Venmo experience coming?

Starting point is 00:38:15 Argent, any sort of smart contract wallet like Argent plus layer two, plus these D5 protocols, right? Give it a year. It's going to be better than Venmo. Yep. It's going to be way better than give it two years. It's going to be 5x better, 10x better. This is happening so fast. I'm super excited about it.

Starting point is 00:38:34 Vitalik predicted this too when we had them on the podcast in December. Smart contract, layer two native wallets. Okay, let's talk about this. This is Maker's multi-chain strategy. This is directly from their governance forms. I think it's interesting because Maker, of course, is one of the oldest D5 protocols. They've stayed primarily on Ethereum to date, but now they're looking at a multi-chain future.

Starting point is 00:38:59 The question for them is, how will Defi grow and where will the liquidity go? That's how Defi protocols make these decisions. What's the story here? Yeah, Maker is actually newly a completely a Dow because the foundation has basically sunsetted. There are a few people working for the foundation left, really just to wrap things up. But Maker is now completely a non-centralized entity that is Dow only. Dow is saying, hey, let's capture more fees. And so Maker has started to have conversations about putting MakerDAO on different chains,

Starting point is 00:39:33 putting dye on different chains, right? So not only Ethereum and not only Ethereum L2 is like Polygon and X die, but also non-Etherium chains like Pocodot, Cosmos, and Solana. And so this is just a good business first move. If there are fees out there to capture, you should go capture it. Because if you don't, someone's going to capture them for you with their clone of your project. So you better just get there first. And so MakerDAO, I don't know to what degree are they actually putting the MakerDAO facility on Solana or on Polygon or on Pocod. But at the very least,

Starting point is 00:40:07 they are putting dye there. And die demand on Polygon, die demand on Solana ultimately feeds back to MKR value capture on Ethereum. And so MakerDAO really pushing the fold. Yeah, it's funny because their preferences for EVM compatibility, right, because they've invested. so much. And also for permissionless decentralized change, that's kind of their preference, but they're open to other layer ones at all. And what I would say is if you want to truly understand where this industry is going, look where the builders are going, right? Like that's your map. I mean, at some level, like what David and I say or what some other, like what a venture capitalist who's pitching the Solana layer one, they really want you to buy sole tokens,

Starting point is 00:40:50 what they say doesn't really matter. It's about. what where the builders go and what they believe because like builders are making a huge investment like where are we going to spend our precious developer resources next is it on an ethereum layer two is it on another you know competing layer one we'll see so read this post he'll give you great insight i think there's some alpha leaks there if you're paying attention david let's get directly to the news my friend uniswap just made cc tv that's china uh chinese tv china central television talking about uniswap that's what that is okay so they're talking about it in the context of how to avoid scams right but here's what's so hilarious to me is actually they're showing you how to use uniswap on tv broadcast to

Starting point is 00:41:41 like i'm not sure how many millions of people in china um and Hayden's tweet is kind of funny on this. Step one, China blocks Uniswop interface. I guess maybe they have already. Step two, China demos uniswap interface on CCTV. Step three, question mark. What happens? I mean, like, isn't this just playing into,

Starting point is 00:42:01 isn't this the nation state? Somebody fucked up. Excuse me. You think so? I think somebody had an oopsies. Somebody did not think about, because like the uniswap, the uniswap, if you look on the screen,

Starting point is 00:42:15 it says the decentralized exchange. What is more antithetical to China than something that is decentralized? And so I don't think somebody wasn't informed enough to put two and two together about how this technology is extremely subverses to the state. And specifically China,

Starting point is 00:42:30 which wants to have total totalitarian control, something like Uniswap is exactly what they don't want and they are accidentally like broadcasting this on their internal like closed circuit television channels. It's hilarious. It's like the more they say, don't look at this, don't talk about this, don't use this, the more people are going to get interested in it. So they are propagating the narrative.

Starting point is 00:42:48 That is the value of decentralization. But there is a little bit of like, I guess, double speak going on in China, I feel like, because here is a story that broke about China's digital one effort. And this is a spokesperson for the central bank digital currency that China is building and talking about it potentially being available on Ethereum too. And I totally understand that because if you're a central bank digital currency, you want to invade all of the other economies of the world. And by invade, I just mean like you want your currency to be represented and to accrue value and to be used as a unit of exchange, medium, unit of account, medium of exchange store value in those economies.

Starting point is 00:43:30 And what is Ethereum? Theorem is just another economy. But this story is interesting because I do see that's an inevitability of central bank digital currencies. They will absolutely want to be on smart contract networks. like Ethereum. And it looks like the nation state is paying attention to these developments. They see the power of smart contracts and defy and programmable money. And they're looking to kind of marshal that as well. Yeah, China definitely wants its yuan to be as close to the world's reserve currency as possible. They were very jealous that that's what the dollar is. And so naturally,

Starting point is 00:44:03 they want to claim defy real estate as like the future of economies, right? If the future economic activity of the world is on defy, then the digital yuan needs to be. there. I'm reminded of our Josh Rosenthal episode where to some degree, like it's a lose-lose for China either way, right? Because like, are they really going to become the world's reserve currency by invading defy? Not really. The only people, like, not even the Chinese want the digital yuan. It's forced upon them. And so if they want to claim that real estate, they have to put the digital yuan there. But then that means that they give on ramps and off-ramps to people who are using the digital yuan who want something else, like dollars or ether or Bitcoin, right? And so

Starting point is 00:44:40 they are giving an exit opportunity to people that use the yuan it's damned if you do damned if you don't yeah you know what long term i think the authoritarian states uh play is whatever state it is whether the u.s goes in that direction or whether it's uh china continues it's like i feel like it's a it's a state controlled finance chain essentially so you get the program of money but you also have the state surveillance and the control over the entire economic system right um they're not there yet that might but like that is the threat for how I don't think at this point nation states ever turn off cryptocurrency because they can't and they know they can't and they know to your point just plays right into their hands but they will try to co-opt it and I feel like the finance chain gives like sort of

Starting point is 00:45:25 early roadmap indication of how that might be co-op you just make it super useful right easy for everybody like integrated in your life but oops we have all of the buttons to stop transactions censor transactions, cut you out of the world's economic system. Make you disappear on-chain and then off-chain. Scary. Okay. Ether has a high chance of eclipsing Bitcoin as crypto's dominant store of value. Wow, it sounds like something bankless might say, but it's not bankless.

Starting point is 00:45:55 This is banked. Max saying it. Look, man, I don't know. Let's not provide any legitimacy to Goldman Sachs in their opinions as to what they say about crypto. It cares what they think about crypto. But it must have a position, though. headline that a lot of people are reading. That's the through line here. It's like Goldman Sacks, a lot of people listen to Goldman Sachs, even though we don't listen to Goldman Sachs, they are

Starting point is 00:46:15 making this headline available to the world. So that's like the takeaway here. They must have a position, too, in order to say that. That's usually what Goldman Sacks is up to. All right. Here's something interesting to happen bitwise. So this is sort of an institutionally friendly way to get access to all sorts of crypto assets, but in particular in this case, defy tokens, bitwise. Actually, no, this is not their defy. This is a, this is, their large cap crypto index. Okay, excuse me. I don't think that counts as a defy token just because it's on Ethereum too. Right on. So Bitwise has a whole bunch of more centralized, institutionally friendly indices where you can get exposure to crypto assets. I've long hated kind of their large cap

Starting point is 00:46:55 crypto index, not because it's a bad index. It's a good index. No fault of their own. They just don't have good selection. Just so much garbage in there. And there's been garbage from the get-go, like things like, you know, XRP, things that don't have a chance to succeed as a store of value. But anyway, Polygon has entered the Bitwise 10 large cap crypto index for the first time. And I think that's super interesting. This is the first, number one, I guess it's the first of two things. Number one, it's the first layer, layer two, or side chain, I should say, from Ethereum to be, like, ported into the top 10. The other thing is the interesting part of this is the asset that it kicked out is from Cosmos.

Starting point is 00:47:41 Their asset atom. And Cosmos talked for a very long time about becoming the Internet of Chains by creating sort of a parallel universe to Ethereum. So there's some irony here, which is like Maddoch is taking a similar playbook and design. It's the same value prop. Same value prop, but it's making sort of Ethereum as a settlement layer. It's internet of chains. And there's some irony in it just booted Adam from the top 10 slot. And he takes here.

Starting point is 00:48:10 Yeah. My take here is that this is something that we've talked about. Interesting in the Ethereum ecosystem for years now. There is a bunch of absolute crap in the top 10 of crypto assets. You know, I don't think like coin or Bitcoin Cash is there anymore, but they used to be in the top 10. And then there were very legitimate, very real defy tokens that just were in like 50 and below. And so a big narrative in 2018 and 2019, and even 2020, was that, like, eventually there's going to be a repricening. A repricing between just the crap like EOS and light coin with actual real defy tokens with cash flows.

Starting point is 00:48:47 And this is what we are seeing here is we are seeing Ethereum native infrastructure being repriced into large-cap top 10 defy tokens. To be honest, I kind of wish it hadn't pushed out Cosmos because of all the things in the top 10, Cosmos isn't, is actually kind of a nice asset in comparison. Cosmos has some traction. Right. Yeah. I wish it had pushed out things like Lightcoin and Bitcoin Cash. But like the comparison between Cosmos getting pushed out by something that is basically

Starting point is 00:49:13 the same value prop, but Ethereum specific is interesting. Yeah, it's very interesting. David, NFT world. There's always stuff going on in an NFT space, but I picked this one out. This was an article written by our own William Pister in Metaversal, which if you're not subscribed to Metaversal, this is a great place to get updates. what's going on in the NFT space, but he wrote an article about how to get virtual land on Ethereum, right? Like in the Metaverse, actually buying digital property, buying digital

Starting point is 00:49:41 real estate, right? So I've long thought about this, like, okay, own cryptocurrencies. When is the right time to start buying digital parcels of land? And like you can do that on something called Sandbox, Decentraland, which has been a long time VR-type project on Ethereum, Cryptovoxels, which listeners may be familiar with. I've not heard much about... Somnium. Somnium. Somnium space. Anyway, I started thinking about when...

Starting point is 00:50:11 There will come a point in time when it is the right time to buy virtual land, right? I haven't fallen in love with a VR digital environment yet, where I'm like, oh, this is so awesome. I can't not have property here. but like there will come a time when I anticipate jumping in to the space here. What's your take on this? Do you own any virtual land? Yeah, I do not own any virtual land. I feel like it's the same kind of game as to just NFT speculation, right?

Starting point is 00:50:40 Like to some degree, like if you own a crypto punk, that kind of feels similar as to owning like a little bit of like internet real estate because of the way that crypto puns are kind of treated as defy users, right? It's like I have a claim on a crypto punk kind of feels the same. It's very, very speculative because we don't know if any. of these virtual land real estates comes the canonical real estate. Like the reason why real estate in the real world is so such an easy investment is because like there's not seven versions of real estate, like different dimensions of real estate. There's just actual real estate.

Starting point is 00:51:11 And it can't just be like forked or created like this. Right. So like virtual real estate, which we virtual estate, virtual estate is there isn't one, there isn't one virtual estate. There are many, many, many virtual estate. So if you buy virtual estate, then you are a speculative. that that virtual estate becomes like the kind of shelling point of virtual estate. So I'm not ready to start speculating in that world yet.

Starting point is 00:51:36 But it's definitely going to be a thing. Virtual estate will absolutely be a real thing for sure. It's going to be ready player one, right? Like it's totally, we're moving to that world. So I'm waiting. I'm looking at this. I think there are some pioneers who are much earlier. Maybe these are good deals.

Starting point is 00:51:52 Maybe they're not. I have no idea. But I'm sort of waiting myself, David, for that like, I enter this world and like I immediately fall in love with it. Like oh this is it. I would use this. I want to come back here. I want to set up shop here.

Starting point is 00:52:03 I can see myself retiring here. Oh my God. This is so weird. Dystopian future though is something where somebody like some big company like you know, Facebook or Steam or Valve makes virtual real estate. And that becomes like you know, it's theirs. Like that I could see that happening as well. Yeah.

Starting point is 00:52:25 exactly well I'm not buying in those worlds so good luck guys I don't think they'll sell them to you as the thing well let's talk about this this is the bitcoin news I think we're kind of struggling to find something on bitcoin this week actually there's you generally a lot but this week was kind of a quiet week on bitcoin but the bitcoin car is making headlines what's happening here what is the bitcoin car yeah like a bunch of bitcoiners crowdfunded sponsorship of like an indy 500 car and and funny funnily enough NBC sports Twitter account reported that the 500 averaged a, I don't know what TAD is, but 5.5 million viewers making it the most watch Indy 500 in five years because there was a goddamn Bitcoin car. Like all the bitcoins all of a sudden start caring about Indy 500 because there's a Bitcoin car. And then Jack Mallors, who was on

Starting point is 00:53:13 the defy panel with me at Coin desk consensus event, I don't know why he was there. He represents a little crypto bank. He goes, hmm, I wonder why. The most popular car at the most watch Indy 500, in the last five years arrives at the Bitcoin conference tomorrow in Miami to donate to Bitcoin Open source development open networks wins Bitcoin's wins. And so like I guess congratulations to Bitcoiners. Here's like the coolest news that's happened in Bitcoin in the last seven days is a Bitcoin car in Indy 500 and it'll be at Miami. Like, uh, congrats, I guess.

Starting point is 00:53:44 Yeah. Well, like so this feels like just, um, a poor man's version of Gitcoin, to be honest. Because like I'm really excited like I'm really excited that this goes to open source. development, right? And that the community is coming around and like doing something good for a public good, which is Bitcoin protocol development, which is a public good, absolutely. But like, I don't know. It feels so weak sauce after you, after you know about like get coin and quadratic like funding and what's going on in that economy to create self sustainable public goods. It just feels weak sauce. Right. This is why we say it feels like Bitcoin, at least Bitcoin Maxis have kind of

Starting point is 00:54:24 lost the plot, right? Because why are you so incredibly excited about a Bitcoin sponsored Indy 500 car when there is everything going on in Defi like happening next door and you are purposely not paying attention to that? Like you know what I would have been excited about that? Yeah. Like it's from 2015 dude like that would have been exciting in 2050. That's what Doge coin did it in 2014 like those already did this. Oh Bitcoin. They're behind Doge. We're having Preston Sean on Wednesday. Oh, that's going to be fun. So it's going to be a good, it's going to be a good episode.

Starting point is 00:54:59 I think that hopefully it's going to be open-minded and we'll talk about these types of things. I won't mention the Bitcoin car, though, if you don't. I might. Make sure you don't. Okay. No promises for me. All right, regulation. BitConnect.

Starting point is 00:55:15 Remember BitConnet. Bitcoin. Nice. Hey, hey, hey. All right. The SEC charged the promoters of Bitcoin. which includes a YouTuber, a few YouTubers. I was not watching crypto scams in YouTube in 2017,

Starting point is 00:55:31 but there were a lot of promoters of BitConnect. I guess the interesting thing here is they're finally being charged by the SEC. And David did start it later. Like January 2017, that's four years ago. It was more than four years ago. I think that they take here is that regulators move slow. Yeah. I'm glad that they're targeting.

Starting point is 00:55:54 targeting a complete scam in this case. This is actually protecting consumers. This is within the SEC's mandate. Good job, SEC. Like, seriously. I legitimately mean that. But like four years. Right.

Starting point is 00:56:09 Right. Takes regulators a long time to react to what's going on. Yeah. And like should have gone to jail. Should have gone to jail. Two million dollars that is beside the point. They wrecked people's lives. They should have gone to jail.

Starting point is 00:56:21 Yeah. But we got some memes out of it. we did get some good memes. Public good. All right. Some good news from Valaji, our friend. So there have been some disturbing news going on in India about kind of central bank government crackdown on cryptocurrency.

Starting point is 00:56:36 But this is some good news. The Reserve Bank of India is directing Indian banks to stop deplatforming crypto customers. That's what was happening. So if you're in India and you're using your bank account to do something in crypto, they would just de-platform you. Sorry, send you a dear John letter. Like, sorry, you have no account here. anymore you've been disbanded um here's a letter where like the royal bank of india is saying we need to

Starting point is 00:57:02 the reserve bank of india excuse me is saying we need to stop doing that so some good news there and people predicted this i think nick harder really predicted this is like oh yeah you can you ban bitcoin you're just going to roll that back in a couple couple weeks or a month or so and that's exactly what happened when you when you ban bitcoin you actually just ban your citizens from engaging with bitcoin you don't actually ban bitcoin also there's money to be made for these banks right? Like, are they reading the Coinbase SEC filings? I hope so. All right, some quick drive-bys. As of today, this is from Anthony Sassano. The ETHU Beacon Chain has been live for six months. Cool.

Starting point is 00:57:35 That'd be six months. Cool. Six months of Lindy under the belt and getting closer and closer to the merge, maybe in five or six months later. Wow. No major events there. It's gone fairly smoothly. All right, let's talk about this. So stable coin company earning record levels of investment. This is circle. What's happening? happening here. Yeah, Circle raised $440 million from investors, private investments from an array of private equity institutional and strategic investors. That's a big, that's a large number. And this is just indicative of the tailwinds behind crypto dollars in Defi. Why? Why is crypto dollars in defy such an awesome opportunity? It's because you're getting yields, consistent yields, above like

Starting point is 00:58:18 8% and like I'm getting yields as high as 20% on my crypto dollars thanks to like Alchemics and and yearn, right? And so where are you getting 20% yields in dollar terms in the legacy world? Like, you aren't. And so this is a massive opportunity for people who don't really care or want to own crypto assets, but they want to have dollar denominated yields, which is a large part of the world. This is what circles capturing right now. USCC is a great product, fantastic product. It's still banked, but it's a great product. All right, Justin Drake has a call out for us. He needs some help. Does he need help with David? Yeah. He says that all, of these different ether logos, ether characters that people use on Twitter, the Greek symbol

Starting point is 00:58:59 Z, the diamonds, he said they're all hacks. He goes, ETH deserves a Unicode character. In 2015, I helped get the Bitcoin Unicode character for BTC. Justin Drake asks you, the listener, I need help for a leader to take up the reins and follow the template. He already has the template. He wants you to fill it out and make your argument as to why Ether needs a Unicode character. If you want to take the reins on this and do something for Ethereum, which I really, Maybe it's just a Unicode character, but like we would all use it. That can be you. So if you are interested in taking up those reins, go to this tweet in the show notes and file that form.

Starting point is 00:59:34 David, Justin Drake helped get Bitcoin the Bitcoin Unicode character. That's a shocking news to me. Yeah, fun fact. Go Justin. Write that down for trivia. He doesn't get thanked for that. All right. We're going to get back.

Starting point is 00:59:47 We're going to be back with the takes in just a moment. But before we do, we want to tell you about the sponsors that made this episode possible. Bankless is proud to be supported by Uniswap. Uniswap is a new paradigm in asset exchange infrastructure. Instead of a cumbersome order book system where trades are matched with other humans, Uniswap is an autonomous piece of software on Ethereum, which is what Ryan and I call a money robot. No human counterparties or centralized intermediaries, just autonomous code on Ethereum. Input the token you want to sell and receive the token you want to buy. Something brand new in the Uniswop ecosystem is the Uniswap grants program,

Starting point is 01:00:24 is now accepting applications for grants. We have been saying this for a while and we'll say it again. Dow's have money and they are in need of labor. If you think that you have something to contribute to the Uniswop Dow, apply for a grant to Uniswap. Just look at the size of the Uniswap Treasury. It's almost $3 billion. This mountain of capital is looking for labor.

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Starting point is 01:02:25 Let's start with this one from Kupitrupa. He says this, crypto literally pays to always be online, literally getting paid to be online. What does he mean, David? Yeah, so the world of crypto and the world of defy has really turned the Web 2 model of extraction on its head, right? And so the way that DeFi apps compete is by rewarding users. And so to some degree, the more you have used Defy apps, the more you have been rewarded. the average defy participant who came in at least in 2020 got at least three air drops currently worth at least like $40,000 in uniswap one inch tornado cash ample

Starting point is 01:03:02 forth like the list goes on and so and that's not the only thing like there are a more instantiated versions of getting rewards basically the more you use defy the more you get rewarded that's the new paradigm we are in web 2 apps they take from you defy apps they give to you you just have to use them. And I actually used this tweet in the banquet's article that came out yesterday, Thursday, because I talked about the Dow's and the future of work. And one of the missions of Dow's is to lower the threshold for what viable good participation and contributions into Dow's are.

Starting point is 01:03:38 Good Dow's will make that really, really easy for workers to contribute. And the bulk case for Dow is that you just stumble into rewards. You just stumble into work and labor. And that is the future of Web3 work. And Kupa has this summed up in a tweet nicely. Crypto literally pays you to always be online. The more you are in crypto, the more you get paid. There you go.

Starting point is 01:04:00 Good takes there. All right, let's see this next one. Long or short civilization. That's the take. Long-Eath is long civilization. Long Bitcoin is short civilization. Let me try to parse that out. I think what this is saying is...

Starting point is 01:04:13 That's spicy. That's a spicy take line. It's kind of spicy, right? So, like, if you are optimistic about the future of humanity, your asset is eth. Progress. Like, coordination, civilization, societal growth, a community improvement. If you are long Bitcoin, it's like being short civilization. Right.

Starting point is 01:04:35 Short collaboration. Doomsday, you know, dollar disappears, nation states die. we go back to an era of less coordination collaboration where we need this gold-like asset. What do you think of that take? That's exactly right. Yeah. So people who coming from the legacy world will feel weird saying this, but we're hearing this. But Bitcoin is the risk-off asset.

Starting point is 01:05:04 Bitcoin is specifically risk-off. Like gold. Yeah, like gold, exactly, right? Like no one can take it away from you. you are completely independent, completely self-sovereign. You don't need to trust anyone. You don't have dependencies on anyone else. And that's also true for Defi, but Defi is much more.

Starting point is 01:05:20 It's much more collaborative. It's like when we come together, even though we have self-sovereign money and I have my private keys, my private keys are mine and no one can take it away from me, we can still create more via collaboration, right? I mean, Soleimani has this quote that stuck with me where he goes, Bitcoin in times of war, but Ethereum in times of peace, right? in peace times we can collaborate and build but like if people are in a deflationary spiral or just like times of mistrust that's where bitcoin is an asset the narratives and political alignment behind

Starting point is 01:05:50 bitcoin really really shines bitcoin is the i don't need you asset and ether and defy is that let's collaborate ecosystem i think that last part resonated with me probably the most of anything that was said and even this tweet because i also i also do feel like um ethereum is like network that developers, researchers have said is designed to try to survive World War 3. It is designed to be a collaboration tool set and a money system when all of the other money systems fail, when the nation state fails even. So it does have elements of like an Ethereum kind of like Citadel that's built apart from the requirements of the nation state, does live outside of it. And yet, what you said is also super true, which is like the theme of Ethereum

Starting point is 01:06:38 is all about coordination. How can we pool capital together and do more together? Yes, there's lots of competition, but it's not as individualistic, which is interesting to me. So I guess I see both sides of it. I also think that Bitcoin is in a weird way also a bet on technology, because it's certainly a bet on cryptography. So maybe not entirely short civilization. Bitcoin is like Bitcoin is a coordination system, but it's a coordination system so you don't have to coordinate with anyone else. It coordinates for you. Ethereum is a coordination system that allows and propagates further coordination. And that's really the big difference. It's like the long tail of Bitcoin after it coordinates for you is that you are done coordinating because Bitcoin did it for you. Ethereum is like, let me create platforms and software and applications that allow for further coordination, right?

Starting point is 01:07:30 the coordination extends out into the nth degree. Yeah, I think it's a really interesting take for sure. Here's another one. Justin Drake, again, making the roll-up twice. Price affects security, he says. I think that's the thrust of the argument. Now, he's got a flow chart. I would have died for a flow chart like this in 2018, 2019.

Starting point is 01:07:50 We're making the argument that price of ETH is so fundamental to the economic security of the Ethereum network, and that was falling on deaf ears. But what is this flow chart showing us? Yeah, it's showing us all the different ways that if ether price goes up, Ethereum benefits, right? And so he has, you know, there's four main factors that he has. One of the, the, oh, I'll get to that part later. Legitimacy by performance, as in if ether goes up and it continues to go up,

Starting point is 01:08:17 there's some amount of legitimacy about that, which attracts builders, which attracts on-chain activity, which attracts more fee burn and more staking rewards, which makes ether money more sound, which makes, you know, staking inflows even better, which increased the cost of attack, which increases security, Ethereum security. Then there's more economic bandwidth, same path. Like, then there's, you know, ETH stake appreciation and also the EF treasury. Like, if, if the, just go look at the chart. I'm not going to try and explain all of it, but go look at the chart. And it's a very concise way, very developer-focused way of like illustrating the connection between ETH price go-up and

Starting point is 01:08:54 bullishness on humanity, which is, you know, Ethereum security. You know, the level two analysis here is, again, I strongly believe that the winning, the most economically secure money system, it's the core asset of that system has to be a store of value reserve asset because you get so much of this for free. If your asset is priced in that Justin Drake episode, we called it like the magic meme property where it gets some of this reserve currency monetary premium premium. for free. So we're starting to see that with Eith. We've definitely seen it with Bitcoin. Let's do the Scott Lewis tweet. What's this saying? Yeah. So Scott Lewis is illustrating the connection between the security of a consensus layer and how much you should cost pay for transactions, right? So he kind of makes up some numbers, but he goes, Ethereum may net $50 for a transaction. Ethereum roll up $2 for a transaction. That's like something like

Starting point is 01:09:51 arbitrament or optimism. And then he goes Ethereum side chain, a 2.0.0.0.000. $0.02 per, so 2.2 pennies for one transaction if you're on a side chain, that's like Maddick, right? And he goes, different price points for different levels of security. And that's really what you're paying. When you pay your transaction fees, you are paying for security. And it's a good rule of thumb to understand that when you are paying a transaction fee on Madik versus arbitram versus wherever, that is the amount of fee you are paying is functionally an extrapolation as to the security of how secure that transaction is. And so the actual, the real take here that he finished off with is that, you know, different price points for different levels of security.

Starting point is 01:10:35 But he says, complementary options will make all of Ethereum work better. And so he's alluding to the symbiosis between all of these things offering different options for the markets. Like maybe a $2 transaction on roll-up is actually too expensive for your, you know, super high throughput micro-transaction app. And so therefore, you need to go to a side chain. but more economic activity bestows more economic activity, right? And so having optionality with security levels allows people to choose what they want

Starting point is 01:11:06 and what it works best for them, both as users and as defy apps. Yeah, it's all great. And that's the thing. It's not roll-ups versus side chains. It's like, or it's not MayNet versus roll-ups. We're doing them all. And they're all going to not compete against one another,

Starting point is 01:11:24 but they're all going to be synergistic, right? I'm starting to think of Ethereum less as just like one main chain and more of like this ecosystem of chains, like an entire economy. Zazano calls it a nexus. Yes, he calls it an economic nexus. And that's exactly what it is. But when you say what is Ethereum, now what is Ethereum has to extend to all of the ERC20s on crypto exchanges, has to extend to arbitram and optimism and all of the roll-ups that they create,

Starting point is 01:11:50 has to extend to all of the side chains. Maybe at some level it also extends into like things. like finance chain, though that is less economically linked, it still uses the EVM. So what is Ethereum? All of these things. It's like this internet of chains. I guess we're stealing another cosmos meme, but there you go. All right, what's this, what's this take from Suzu? Yeah, Suzu talking about the nature of decoupling. He writes, those who doubt decoupling needs to read more history. 99.5% of coins from the previous era are worthless. And the 0.5% of the 0.5% that are worth something are up 10,000 X since then.

Starting point is 01:12:30 Turns out decoupling, it actually has an investopedia page. That's news to me. And so what Suu is saying is that, you know, decoupling, not a crypto term. I thought that was like a decoupling. What does it mean to you? So like Ether and Bitcoin have largely had similar price action throughout its history and to this day. But we are seeing some decoupling. And that's why we were paying attention to the ETHBTC ratio, right?

Starting point is 01:12:52 Like ETHBTC hovered between like 0.18 and 0.3. for years. And now we're up to 0.72, 0.072, right? That's a decoupling. It's when one asset takes off and the other either stay stagnant or like dies. Uncorrelated, right? Uncorrelated assets. From a price perspective.

Starting point is 01:13:09 Right. And Suzu is saying that the fundamentals is why things decouple. And perhaps that's what's happening. I think that's such a good take and it's something to remember because this doesn't happen overnight. It doesn't even happen in like the month's timeline. This happens over years. It almost happens every kind of narrative cycle.

Starting point is 01:13:26 But when we see things that have survived, like Bitcoin, Satoshi's vision and something, like, how is that still around? Or like, even like light coin to some extent, how is that still around, right? I think what it is is it's survivorship bias because we forget the thousands of other cryptocurrencies. Pure coin, that feathered coin. Yeah, like, exactly. All of these colored coins, like all of these things died in the last cycle.

Starting point is 01:13:55 We don't even remember them, but they were a thing. They had their moment, right? But they died. They were part of that 99.5% of coins that did not survive. You had the previous era. Do you remember Dragon Chain? I put out this tweet last week, 2017, like, what's the most embarrassing thing you invested in? I got all these answers.

Starting point is 01:14:14 Archane, Dragon Chain. There's this theme of like, oh, my God. Did you really? Somebody said Disney was about it. And I was like, oh, I'm in. Dragon Chain. gang. Yeah, so like, anyway, these are all the coins that died last cycle and these fundamentals do matter. They do matter. This is what Suu is saying. So make sure you're tracking fundamentals,

Starting point is 01:14:35 not just the trade. All right, let's move. What are you excited about? Okay, David, you are getting ready to board a flight. What are you excited about, man? Going to Miami for the world's largest Ethereum meetup event ever thrown by Bitcoin Conference 2021. Are you wearing that shirt? Oh, yeah. Shalom. This is the shirt I got when I did my easy. triple point asset talk in Tel Aviv, unrelated. But I got my BAP shirt in the bag, so the BF shirt's coming out. Oh, man. Yeah. And so it's really funny. I got these, I think I got the right numbers from CK, who works at Bitcoin, BTC Media, which is throwing the Bitcoin 21, 20, 21 conference. He said that there are 8,000 people attending the conference and 30,000 people going to Miami. And so there are, if you extrapolate and

Starting point is 01:15:22 kind of think that, like, maybe there's more Ethereum going to Miami. who aren't actually going to the conference, they're just going to the Miami as a shelling point because everyone else is going to Miami. You're going to go to the conference, though, right? I, if it's convenient. What are you going to be doing the whole time? Well, I'm hanging out with my friends.

Starting point is 01:15:41 Like, it's a, we're all, everyone's going to Miami, so I'm going there too. Like, that's, that's what happened here. So there is like the D-YAT party, which is thrown by a bunch of D-Fi teams, like slingshot, upshot, like a bunch of other teams, have a yacht party. So I'm going to that, going to the Diplo concert with a bunch of, like, I'm going to meet

Starting point is 01:15:59 Kupa for the first time. Luke is going to meet Lucas for the first time? And so, and Luke. And so there's actually going to be three bankless LLC employees at Miami. And Ryan, we won't see you there, though. No, no, no. No, I do not like to travel as much. I'm the team calls me the bankless boomer.

Starting point is 01:16:17 It's like I'm just, you know, happy at home. Like, you guys have fun. Screen share me in or something. Let me know how it goes. But like I'm okay, so I had heard that you cannot actually talk about other chains while you're attending the conference. Yeah. So is that true? Like can you wear apparel from other chains?

Starting point is 01:16:39 I'll let you know. So yeah, BTC media put out this email that said, please, if you are attending the conference, please keep your conversations on Bitcoin themed conversations because this is a Bitcoin only conference. And so it's one thing to like make a Bitcoin only conference. That's great. Yes. Requesting your the attendees to keep their conversations focused to Bitcoin, a little bit controversial, a little bit controversial. Well, we'll see what happens to you, David, when you wear that shirt. Yeah, so that's the other experiment.

Starting point is 01:17:11 So like Bitcoiners like while they're kind of nasty on Twitter, they're a very loving like group of people. But it's kind of amongst themselves, right? Bitcoiners love other Bitcoiners. And like I've been, I've been, I've been. You are a Bitcoin. though, aren't you? Sure.

Starting point is 01:17:24 Yeah. Well, it depends on who you ask, right? And I've definitely worn my Ethereum shirt inside of a bunch of, inside of a Bitcoiner event where there was like literally 50 Bitcoiners around and I was the one Ethereum people. And people knew who I was. Like Bankless was pretty big at that time. But that was when the ETH Bitcoin ratio was like at 0.02.

Starting point is 01:17:43 Now it's at 0.07. And so like I'm going to test the waters to see like, are they all that loving as they say that they are? Like we'll find out. Hey, you know what? Van Spencer said in the podcast. Guys, listen to that one Monday. It's great.

Starting point is 01:17:57 The flippinging of ETH over Bitcoin is actually good for Bitcoin. Yeah, I'm going to bring that one out. I'll let you know how that goes. Oh, really? You're going to try that. Let me know how it goes. Yeah, social experiments. Left and right.

Starting point is 01:18:11 Yeah, very fun. All right, Ryan, what are you excited about? I'm excited about Arbishop, man. I'm excited about roll-ups in general. Like, layer two is finally here. I was worried that when we had Arbishop on on on Tuesday, that they were going to say something like, yeah, we released to main net, but it's going to be another six months before the defy apps are up

Starting point is 01:18:30 and like some complexity here. We've just been disappointed so many times with layer two and throwups. No longer. No longer. It's like really here. And I'm excited about that. The second thing I'm excited about, I sort of picked up in that conversation too is Arbitrim's launching with just one chain right now.

Starting point is 01:18:50 But they could launch with a. dozen chains. Like, they could launch with 30 chains, 40 chains. You could have a defy chain and NFT chain. You could have so many chains, as many chains as you want, and all at the same time. So, and we talked about this with the Polygon SDK. They can produce a whole bunch of different versions of side chains, right? So, like, now we have all of this additional real estate.

Starting point is 01:19:15 We have all of this block space. And I've, you know, we talked about layer two hitting crypto like a title wave. Like, I literally, this is going to be a wave of new apps that weren't previously possible on main chain. That's going to be part of the tidal wave. And a wave of new users. We're going to start talking about monthly active users a lot more rather than total locked value. And that's going to be exciting. So more people onboarded through layer two.

Starting point is 01:19:43 This is really important for crypto. And I couldn't be more excited. We'll have to have optimism on too. I think they're launching in July. but I'm just really excited about layer two summer baby so excited about it and this is what fatale called expressivity escape velocity right like just make the base chain a little bit more expressive and all of a sudden you have an infinite number of options that you can build on top of it and that's what we are hopefully on the cusp of a Cambrian explosion of available trustless block space and new

Starting point is 01:20:15 possible economic activities like I said earlier like all of a sudden like microtransactions are back on the table. Like, microtransactions used to be a thing. Like realty, when I used to work at realty, we used to send daily rent out every single day at base layer Ethereum, right? Back when, back when Gway was one, gas was one Gway, that got immediately pushed out. But like, now we can kind of return to some of those crazy use cases that we hypothesize about, but never actually got to.

Starting point is 01:20:41 Ryan, earlier in the show, I talked about the tokens that I think are particularly well suited towards a layer two, a DFI- Oh, yeah, let's follow up on that. What you got? I talked about sushi swap, right? A team that integrates really, really fast and aggressively and moves really, really quickly was also born in DFI summer itself. And so is a DFI summer like asset, you know, born and bred in DFI summer. The other thing that I have my eye on is AVE.

Starting point is 01:21:07 Again, moves really fast, integrates really, really quickly. It's already integrated on Polygon. So already knows what's up with at layer two. And so I've got my sights on AVEI, if there is a bunch of yield to be had on Ethereum, urn is supposed to be able to capture it. Again, a multi-chain yield, baby. Another defy summer token. So like sushi, sushi, Ave, and YFI.

Starting point is 01:21:29 That's kind of where I have my eyes on as for tokens that are going to be particularly well suited to capture a defy summer layer two edition. So the theme here is blue chips going to layer two, right? Blue chip defy projects with great teams, the good layer two strategies, right? I'm also curious to see what new things we will see that are actually born in layer two. right like new creations new protocols will be born not on the main chain but inside of these layer twos that kind of brings me to the meme of the week david talking about birth let's do it we want to get to the meeting of the week are we ready yeah i think we're ready for the meme of the week

Starting point is 01:22:02 all right i'm sharing screen here's the meme of the week by our friend mariano conti what are we looking at for for a panel comic uh first is a like a a cgi render of a pregnant lady with a baby inside of her and the baby is crossing his fingers saying, God, please Ethereum, please Ethereum, please Ethereum. And then next picture is a baby. It looks like it just got born. And the baby says, hello, sir, where am I? And then the next panel is Binance Smart Chain. And then the fourth panel is the baby just like, just the look of just like death, just like, oh no. Oh, no. Oh, no, I'm born in Binance Smart Chain. Oh, no. But look, a lot of these new applications, new protocols, probably in the next gen.

Starting point is 01:22:44 ones will actually be born into layer twos. So hopefully they get a good layer two. Not a bad one. That's the mean in the week, folks. David, enjoy Miami. I will. I'll fun. I will.

Starting point is 01:22:57 Shilling bankless. Bankless listeners. Dave's going to be in Miami. We're still going to do the recordings, so regular schedule next week, maybe some different scenery. Thanks for hanging with us. This has been another roll-up. I've got to end with the disclaimers, as usual.

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Bankless - ROLLUP: 1st Week of June (Miami Bitcoin Conference, Arbitrum Layer 2 DeFi Summer, Coinbase Apple)

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