Bankless - ROLLUP: 2nd Week of December

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Starting point is 00:01:27 making sure that your money doesn't ever do anything that you don't explicitly approve. In order to see the Argent wallet in action, go to try to the agent. to Argent.link slash bankless and download the app. We're also brought to you by Monolith. Monolith is your cool new Defi account, your Defi savings account, your Defy checking account, except the cool thing about the Monolith Defi account is that it gets software updates, right? You actually get to increase the usefulness of this over time. So here are some of the features. Monolith is a smart contract wallet with a lot of the features that you would expect if you've come to know Defi and what it is,

Starting point is 00:02:03 You can add money to it. You can put that money to work in compound and accessing yield. But you can also swap through Uniswap. What was cool with Monolith is that they will send you a very sexily monolith visa card that connects to your Monolith smart contract wallet on Ethereum. So it's a really awesome tool to live a bankless life with a savings account that gets software updates. So this is something that you're never going to find out in the real world, but you can still do real world things with, you know, real money like buy your groceries.

Starting point is 00:02:37 So that's just fantastic. Coming soon to Monolith, actually already here to Monolith is now you can buy, die and get it sent to your wallet directly, right? So it's also being an on-ramp. So you don't have to go through your centralized exchange like Coinbase or Gemini or wherever. You can just go straight from your bank account right into your Monolith checking account smart contract wallet. So check them out at Monolith.xy-Z. David Hoffman, second week of December. What are we doing today? We are rolling it up, Ryan. We are

Starting point is 00:03:10 compressing a whole entire week's worth of information into a 25-minute video. We are going to give five minutes to a bunch of different topics. First, the market. What is the market telling us? Then five minutes for what got released. Then we go into what's in the news. And then we get into what is on our minds. And lastly, we finish with what we are excited about. We are rolling up the week and injecting it right into your brain. So we're not going to say anything about that weird intro. We just did, David. We're just going to act like it's normal and ignore it.

Starting point is 00:03:42 Okay. The podcasters won't have seen it. Awesome. Guys, this comes at you every Friday morning. So you can drink your Friday morning coffee and you can enjoy the week in crypto. Of course, it's released on YouTube, which is the best way to view it if you want all the visuals and also on the podcast. David, let's get ready to roll it up, roll it up, my friend.

Starting point is 00:04:03 We're rolling them up. We're rolling them up. Okay. Let's, okay, market. Let's start with market. What is Bitcoin doing? I'm sharing my screen. We're looking at some price data. We're down. We're down, David Hoffman. Down all the way to the low, low price of $18,380. This is so low. So incredibly low. Bitcoin has been above 18,000 for nine days in a row, which is pretty crazy when you think about the last time in 2017. We were at 18,000. I'm pretty, sure we weren't above 18,000 for nine hours. Now we're consolidating above 18,000 for nine days in a row. Taking a little bit of a tumble, we were pushing up on all-time highs, but we took a drawback, both in Bitcoin price and in ether price. Ether price has fallen all the way down to $560, you know, these low, cheap eth prices. But, you know, still consolidating relatively high to where we have been historically in the near term. Okay, so my rate of the tea leaves, at least this is the conversation is going. There's maybe a bit of a chill, like a regulatory chill in the U.S.

Starting point is 00:05:09 and maybe some other Western countries. We talked to the Coin Center folks on Tuesday, and it wasn't anything conclusive. It's just like these vague rumors of things brewing. Is that why the market has chilled a little bit over the past week after all of the momentum we've had coming into December? You know, news and price action does tend to line up. I don't know if there's anything proven about, like, like people got scared out of their positions because of this perhaps regulatory fund.

Starting point is 00:05:37 I think this is within the realm of just like normal crypto chop. Like still prices are relatively high. And so I perhaps you could link those two. I think they're relatively disconnected. The market always wants a reason, particularly human beings, always want a reason for this type. Back to the regulatory stuff in a minute. But we should look at some other metrics while we're talking market.

Starting point is 00:06:01 Bitcoin on Ethereum has gone. or down a little bit, down a little bit. Down a little bit, down 2,000 BTC from 147,000 BTC on Ethereum to 145,000 BTC on Ethereum. Okay, how about defy's? The locked in DFI is down a little bit, which makes sense given the price decrease in ETH and some defy tokens. We're down from about 14.7 billion to about 14 billion. So we're still hanging in the 14 billion's. And then DPI, the index for all of DFI, go, fell down from $116, down to $103, actually did kind of take a bigger tumble. Yeah, I guess that's, you know, basically that that's been sort of a consistent thing, right?

Starting point is 00:06:43 Bitcoin takes a hit. Ether takes a larger hit, right? And then Defi kind of follows. That's been a general trend that we've seen in these patterns. Heath hash rate, you know, that's something that's actually gone up, even in the midst of some of this, some of this more recent down in Heath price. Like why? So why? What is, actually, what is ETH hash rate? Why do we care? And why is it going up? Right. The ETH hash rate is the amount of guesses that people are making about blocks, trying to mine a block. How many people are trying to put forth how many guesses per unit of time to guess a block? Because

Starting point is 00:07:19 then they get the ether, right? And they higher the ETH price, the more economical it is, the more willing you are to burn more electricity to hopefully get that ether reward in the block. The all-time high, or the hash rate generally follows price because that's just how much that's the security budget and the hash rate follows the security budget. But it also integrates investors' confidence into the future about the asset. Interestingly, miners have historically been like the best traders if you do a retrospective analysis of when they sell their assets because they have the most skin in the game. So when miners are bullish, I am leveraged bullish because of the signal that they are offering. And so higher hash rate, stronger confidence.

Starting point is 00:08:01 and the network overall better fundamentals. We don't usually look at hash rate, but what's interesting about it, I think, this week, is this is post-Eth 2.0 launching. So this is post-Eth staking, and yet hash rate is still continuing to go up. I guess that's just for the reasons you stated because ETH price continues to go up.

Starting point is 00:08:22 So the miners are still kind of collecting their ETH. Maybe some of these miners will become stakers as well. We talked to Hudson-Jampson about that during the ETH launch. So that is a definite possibility that they're still mining in order to acquire that ETH so that they can be validators in the future. Absolutely. Absolutely. Totally.

Starting point is 00:08:41 Well, let's talk about ETH too because we've got some metrics in right now. ETH two has been running for over a week now. One week birthday. All right. Happy birthday, ETH two. It's gone okay so far. Wow. Like off the launch pad into outer space, heading towards the moon.

Starting point is 00:08:59 we've got 27,000 active validators now. A very decentralized network from a validator perspective. We've had some slashing events, actually, which is super interesting. Some double signs, which are the slashing events that you most want to avoid. It's interesting. These have been custody staking providers that have been slashed, not the at-home hobbyist folks. So that's been interesting. But there's a lot of staked Ethan here now.

Starting point is 00:09:26 I think there's over over 1.2. million, this might be a day or so old, this is probably more now, over 1.2 million deposited ETH in the contract and the participation rate, this is what I am most excited about, the participation rate is 99%. So that was a number that we, like, we didn't know how high it would be because in test nets, it was a whole lot lower because people would stop mining their validators, their machines would go off. Well, when real economics are at stake, they are not doing that they are participating in the validation process because there are funds at stake. It's at 99%. Pretty amazing after five years of work, David.

Starting point is 00:10:09 Yeah, and you're right. That tweet is a day old and it says there's a 1.2 million. And if going to the launch pad, there is 1.37 million in the deposit contract. So we are all, we're still climbing those numbers. That participation, right, the 99% uptime is really, really strong. And overall, just the success of the ETH2 launch, I think couldn't have been any better. The interesting thing, too, is this ETH2 deposit contract is consuming like 40K ETH a day.

Starting point is 00:10:39 So, and that's like three times more than the amount of ETH that is being issued. Right? So all that new issuance, a large portion of that, if you want to look at the network like this, it's just getting locked up in ETH2. And it can't be touched for the next year and a half,

Starting point is 00:10:54 two years at least. Yep. So fascinating. Okay, one other thing to talk about and then we'll get to you the releases this week. This is USDA versus tether supply growth. What do you want to say here, David? Yeah, it's interesting to see at USDC, the bank-friendly regulated stable coin outgrow tether in recent terms. Now, you know, tether's already so big.

Starting point is 00:11:16 So I guess it's kind of not really fair to say like it's hard for tether to maintain that growth when it's already so big. but in the realm of, you know, bank-friendly, government-friendly stable coins versus, you know, more off-the-cuff offshore stable coins, it's interesting to see the bank-friendly one be growing. That's something definitely to pay attention to. It's actually, I think, a good thing because I prefer USDC to tether. From the fact of, like, we have some assurances that every USDA is backed by a real US dollar, we don't have those assurances with tether.

Starting point is 00:11:51 So it is interesting to see the market start to maybe select for USDC over Tether. All right, that's the market. Let's talk releases. What got released last week? I think we'll start with Massari. Yeah, a really cool thing is Masari's new website. Missouri data analytics company putting a bunch of just data in front of you, kind of like Bloomberg, right?

Starting point is 00:12:11 It's seemed they're trying to get themselves to be like the Bloomberg of crypto. Really nice UI, plenty of places to, if you have a data-minded friend, this is the place to send them. That's missari.io. We've talked a bit about their Ethereum report that they just put out to, which you can find here. But we didn't have a Bloomberg sort of analyst-friendly financial interface back in 2017. We had nothing like it. We had some janky coin market cap website, right?

Starting point is 00:12:38 Now we do. This is just spotting the evolution of crypto as an asset. Speaking of that, we should talk about this. This is the yearn finance quarterly report. I had no idea this is coming. but can you describe what this is, David? Yeah, so a bunch of the urine community members banded together and put a quarterly financial report together to recap

Starting point is 00:13:00 what has gone on in the urine ecosystem, which I think is really, really cool. They are doing a very good job producing content that legacy individuals, legacy people that read over financial reports, are familiar with and can consume and kind of use old mental models to understand what's going on in urine.

Starting point is 00:13:19 So I think the most bullish thing about this is that YERN as a community are putting forth the resources they need to in order to make YFI extremely investable. So if you are trying to find Alpha and you are coming from the legacy world and you stumble upon yearn, that becomes really interesting to you. Yeah, absolutely. This is almost a format that's used by publicly traded companies. And of course, publicly traded companies have to issue quarterly reports on a quarterly basis, along with annual. reports. And I think some people forget that some of these defy token assets are actually throwing off cash right now. So right in the first page of this report, they talk about the three months ending from ending on October, in October 2021, there was 3.8 million in net income, right?

Starting point is 00:14:10 This is like a capital asset. So I think once traditional financial folks start to understand, wow, these are real assets throwing off real cash. And there's, reports, and this is generated in a decentralized community type manner, that's really going to shake up the space and get some attention on the defy space. All right, let's talk again about EVE 2 deposits because we've got some early takeaways. Maybe we'll highlight a couple of them. One that's interesting we've talked about before, David, is that 80% of all the deposits to kickstart EF2 actually came in the final two days.

Starting point is 00:14:44 I guess that's just human nature. I guess that makes sense. That was predicted, yeah. This is something that's interesting to you is the top, this is sort of a distribution of addresses. The top 20 addresses in ETH2 make up less than 50% of deposits. And a good way to look at that is you can look at, you know, kind of the concentration of a validator power in ETH2. And compare that to the concentration in staking in mining pools in ETH one. and what you find is they are mining pools are much more concentrated in eth one versus eith

Starting point is 00:15:22 two so the top five mining pools did 70% of the eith one blocks right like that's happening today whereas the top 20 addresses only make up 42% of the total eith two validators and blocks mind so already we're seeing a more decentralized network emerge from proof of mistake. Do you have any other takes here? Yeah, I think what we are seeing here is like, A, some of the strongest decentralization in the space. And importantly, this is kind of a nice benefit of having like a six year long proof of work phase that has been a massive distribution mechanism for more ether. Ether as an asset is extremely decentralized. And that is making validation of ETH too extremely decentralized, which was the whole point in the first place.

Starting point is 00:16:13 absolutely all right you talk about this news david because it's pretty cool yeah circle is launching a payments platform right with us dc getting into the realm of square and cash app using usdc at the backbone famously cash app has you know you can send dollars on on cash app you can also send bitcoin on cash app but you can't send stable coins and you can't send ether right and so what circle is getting into is a payments platform, very much like the square that you, I top my Apple pay on payment providers, point of sales services, like wherever you use like have Square. And I guarantee you, if you've swiped a credit card at a normal store in Europe or America, you've used Square, definitely. And this is where Circle is integrating themselves in that market with USDC, getting into the

Starting point is 00:17:00 realm of payments. Pretty cool. Absolutely. Yeah, more and more crypto banks broaching up upon the FinTech landscape, except they're doing it, of course, built on crypto rails versus fintech, which is traditionally built on bank rails. I think more on that in a bit. But let's talk about this. Maker governance has added a few new assets. What assets? What does this mean? Well, we all love AVE. Everyone loves Avey. So that's getting added. So that's absolutely fantastic. Aave has a very strong market cap. So that means more die. But also, interestingly, they are adding uniswap liquidity provider tokens, which is really cool. This is a first of MakerDAO. The Uniswap die-Eath LP tokens and the USDC-Eth LP tokens are now collateral

Starting point is 00:17:45 inside of Uniswap, which means that you can put your ether and your dye into Uniswap to produce the LP token, get fees paid on that. And then you can put that into MakerDAO and get a loan from your capital asset that's accruing passive fees, which is just pretty cool. That's just money Legos at work. I was about to say money Legos at work. And then you ended with that. So well done, sir. I guess we're connected in the mind. News. What's in the news right now? Do you want to start with this stat? We're talking about the decentralization of ETH2. Let's talk about the number of nodes, David. What's this mean? Yeah, especially during a week when regulatory concerns have been top of mind. There has been an explosion of nodes in the

Starting point is 00:18:30 Ethereum network. And if we cut out all of the United States, if somehow the United States went ultra-authoritarian, and told us that we couldn't run our Ethereum nodes, there are still 8,000 nodes in the rest of the world, which is importantly more than the total number of eth nodes that there were just a few months ago. So the total number of eth nodes is just going through the charts. That's pretty cool. Yeah, and the reason eth nodes go up is basically because

Starting point is 00:18:59 ethos incentivizing more node participation, so the protocol itself is starting to incent greater, decentralization of the network, which is quite a powerful force here. Speaking of regulatory, we had the folks from CoinCenter on, really smart folks, Jerry and Peter, talking about the Stable Act. For folks that missed that conversation, which is State of the Nation, on the podcast on Wednesday, YouTube on Tuesday, can you give a TLDR of the Stable Act, why that was important this week? Yeah, the point of the Stable Act is to bring people that are issuing stable coins or people that are just managing stable coins in general into the fold of

Starting point is 00:19:42 the banking system and forcing them to be to be a banking get a federal banking charter right so basically to be just an extension of the federal reserve and the federal government right and we don't want that and it goes so far to include something like maker dow or die to getting a banking charter which is just never going to happen right and then the conversation has even turned to like if our nodes are processing like die transactions or USC transactions, if you are all culpable in a USDC or non-bank chartered stable coin transaction, then you are involved with this legislation. So it's just an example of bad legislation.

Starting point is 00:20:23 However, we are getting Rohan Gray, who is one of the leaders behind the StableCact onto the bankless, bankless YouTube to discuss this and get his perspective directly. I'm interested to see what he's so passionate about. and why he thinks this is so important, just so I can get, you know, know thy enemy, you know, know thy enemy. Yeah, important to note, this is a bill in front of Congress. Like experts in Washington say it doesn't really have a chance of passing, but it's kind of a shot

Starting point is 00:20:52 across the bow of what could come in the future. We always have to be on our guard against this type of legislation. There's even folks in Congress who have shot it down to, which we'll get into a little bit later. But we should return. I feel like the last four weeks, David, we talked about micro strategy every single week. And it's because micro strategy continues to buy Bitcoin. What are they doing now? This is the fourth time that micro strategy has made an announcement to buy Bitcoin. First, they announced that they bought a bunch of Bitcoin and then they did it again. And then they did it again. And then they are now most recently announcing that they are issuing debt to buy more Bitcoin,

Starting point is 00:21:32 right? And what's interesting to me is that they are issuing debt in convertible notes. And so if the share price of micro strategy goes up, then that debt gets converted back into equity back into shares of the company. So they're minting micro strategy shares to pay for this debt in order to buy Bitcoin. And what's interesting is the whole reason why micro strategy is bullish on Bitcoin is they think that the money printer is going burr. Right. And so because the Federal Reserve is printing money, they are putting Bitcoin on the balance

Starting point is 00:22:01 sheets. But then micro strategy said, oh, we can print our own equity to. and then put Bitcoin on the balance sheet with that, right? And so let's not forget that Bitcoin isn't just a rally against soft money like the U.S. dollar, but it's something that's anti-printing in general. And if you are able to print something in order to buy something that can't be printed and put it on your balance sheet, that's really interesting. And that seems to be the path that micro strategy is going down.

Starting point is 00:22:30 It's almost like a weird form of arbitrage because like companies over the past years, Well, while the money printer has been going, have been printing their own stock or actually printing, printing kind of their own equity and doing these share buybacks, right? Well, now instead of doing a share buyback, they're actually buying Bitcoin, putting on the balance sheet and getting this sort of arbitrage because they can print their own equity. Very interesting. And the truth of the matter is there aren't a lot of ways that traditional investors who are

Starting point is 00:23:01 locked into their brokerage accounts can gain access to Bitcoin. So this is potentially one of them, very interesting development. A few more takes on this actually. They did this for 400 million, but they were oversubscribed and ended up raising 550 million. So like it's crazy demand. And also one last take on this is Pierre Richard calls this a speculative attack on the dollar where if more and more companies do this, they are borrowing dollars to purchase Bitcoin, effectively going short on the dollar long on Bitcoin.

Starting point is 00:23:35 And if more and more and more people start to do this, well, then the dollar just devalues because everyone is selling the dollar and buying Bitcoin, right? And so like he calls us a speculative attack, which is interesting. It's fascinating. The last thing for bankless listeners, look, if you're looking for crypto exposure, don't go buy micro strategy stock, okay? Like go buy some real crypto on exchange. This is for people that don't know how to do that. Who don't listen to bankless. Who don't listen to bankless. Don't you go make that mistake. following in the footsteps of micro strategy though, and to the point you just made, this was huge

Starting point is 00:24:11 news that just came out today. Mass Mutual, a mega Massachusetts-based insurance firm has also bought $100 million worth of Bitcoin. And what's interesting about this is they don't have a majority share like champion founder like Michael Saylor at the helm. This is a fairly sober insurance company that is taking a portion of their balance sheet assets and going and buying Bitcoin, almost front running, maybe the market, front running other insurance companies at this, front running other publicly traded companies. This is almost bigger news than the micro strategy news in my mind. What's your take? Yeah, Michael Saylor is a bitcoiner, right? And so he puts bitcoins on his balance sheet. That's what Bitcoiners do. Mass Mutual is not a Bitcoiner.

Starting point is 00:25:00 They don't, they aren't run by like this one rogue individual who gets to dictate, what the company does, which is micro strategy. Mass Mutual is doing this, like you said, in a very independent and well thought out vote, which they voted on. A bunch of people voted on a board, whoever the board of directors of this company is, voted to do this, right? And so it's not just one guy. There's a consensus among a bunch of people to put Bitcoin on the balance sheet.

Starting point is 00:25:26 And to me, this really indicates that, like, what we thought was going to be like a gold rush triggered by micro strategy and Michael Saylor. Like we didn't know if that was going to happen or not. But with this happening, I think the gold rush is on. Like this is the firing gun for people to put Bitcoin on the balance sheet because now it's, now it's normal people, right? It's not Michael Saylor. It's normal people.

Starting point is 00:25:50 Hurry up. You got to get in the pyramid in the pyramid game. Poins a game. Everyone else does. Musical chairs is on. Absolutely. All right. Speaking of musical chairs being on, Ray Dalai,

Starting point is 00:26:02 I didn't read this full AMA thread. It's in my queue, but give us a takeaway. So he did an AMA on Reddit, which are quite famous where the community gets to ask people like this questions. And what a question was about Bitcoin? Dahlio has historically been pretty bearish Bitcoin, but bullish gold and bullish gold for reasons of modern monetary theory. He, like, is a full believer that we have entered a third level

Starting point is 00:26:32 of U.S. government's printing money and kind of the final level before they inflate away all of their currency. But he says, go buy gold as a result. He hasn't been warm to Bitcoin. Something a little bit different in this thread. What does he say? And what's your takeaway here, David? Yeah, well, he recently posted on Twitter, like, I might be missing something about Bitcoin. And a lot of Bitcoiners thought, we're like, yes, we knew we'd get you, like, warm up to Bitcoin. And this seems to be like the follow through to that. Like, this is the second public comment. that Ray Dalio has had saying warm things about Bitcoin. He doesn't seem to be completely converted,

Starting point is 00:27:08 but he is starting to integrate Bitcoin as like a non-sovereign, anti-MMT type of asset that could perhaps fulfill some of the worries that he has about the future of fiat currency. And this is the first time he says, I want to highlight the quote. So he's talking about Bitcoin here. So it Bitcoin could serve as diversifier to gold

Starting point is 00:27:29 and other such storehold of wealth assets. He's saying it's a store of value, basically, and an alternative to gold. Very interesting development there. We'll see if we see some more developments. We've also got some interesting news. We talked to the folks at Ether Capital this week for the bankless podcast. That show is going to be coming out soon. But this is another like gray scale of Canada, basically.

Starting point is 00:27:55 So if you're familiar with Grayscale and their GPDC and ETHE products in the market, there is a Canadian-based equivalent that just released an ether fund on the Toronto Stock Exchange. They already put 75 million into this eth. It's actually getting released as you hear this, like this morning, sometime today. This is just more ETH being locked up. And you know what I think this means, David, is like, ether is benefiting from all of the institutional bridges of Bitcoin. Yeah. And so Ether has the venture style upside of Defi.

Starting point is 00:28:34 It's like this one two punch that I think it's going to be pretty interesting going into 2020. And Heath is definitely an asset that's benefiting from this institutional side as well. What's your take? Yeah, Ether is definitely drafting behind Bitcoin. It took Bitcoin 12 years to this point where like public companies are putting Bitcoin on their balance sheet. But now they're doing it in droves, right? Like millions upon millions and millions of dollars are going of big. are going on to balance sheet.

Starting point is 00:29:00 Ether is doing the same in a lesser fashion, but at a faster pace, right? So Ethereum as a network is only six years old. It's like roughly half the age of Bitcoin, but it itself is also going on to the balance sheets of both public and private companies. And it's doing it roughly, I would say maybe one quarter, maybe less than that, the amount that Bitcoin is, but still doing it in half the time. And so definitely benefiting from the wake of Bitcoin and also overall throughout its lifespan moving faster than Bitcoin has.

Starting point is 00:29:32 David, I want to link these next two stories together in the news. The first is this. France is on the verge of imposing some mandatory KYC. That's no-your-customer rules for all crypto transactions. So that's one headline, keeping your mind. Another headline that we've seen is that actually Steve Mnuchin, who is the Treasury Secretary in the U.S., is also there's like this. rumor in D.C. that he is considering some burdensome regulations on self-hosted wallets in

Starting point is 00:30:07 particular, but certainly some enhancements on K.Y.C. rules. So first, let's talk about France and what that does. And then let's talk about the U.S. and Manusian and some of these rumors. So first, France. What is happening in France? Yeah, so they are simply extending how far they want to go with KYC. In the United States, right now, you KYC and then, you're, you. you can get a coin-based account. Now in Switzerland, you K-Y-C and get a coin or a digital currency exchange account, but then you also have to K-Y-C an external wallet if you ever want to send it outside of the garden. France, it looks like it's going to extend that to the specific details of what it's extending it to. I'm not familiar with, but it sounds like it's going to be even more

Starting point is 00:30:50 strict than Switzerland, which is a little crazy. And I would like to remind everyone that the no K-YC is the default and the additional to the addition of KYC is the top down regulation. So let's stick with the default guys. Come on. Yeah. And there are kind of like three levels that they could go to with this. So one is possibly France is just saying, hey, when there's a crypto to crypto exchange type transaction, that has to be KYC'd, right? And you know, we saw that that was coming. That was probably inevitable. But the second step that Switzerland has taken, which is you can't withdraw to an eth address, let's say, or a Bitcoin address, unless that addresses KYC'd. That is not currently the situation in France, but might be as a result of this bill.

Starting point is 00:31:32 But what does this mean for the U.S.? Like, Manusian might be going down that route too. And this is a letter that I'm showing you from a congressman from Ohio, which is actually a pro-crypto letter. This is Congressman Warren Davidson, who is saying in this letter to Manusian, hey, don't enact these strict regulatory burdens. If the rumor is true, we want digital self-hosted wallets. We don't want them AML KYC. You'll set the industry back. Don't do this. First of all, do we know if this rumor is true or not? And let's say it is true. What, like, what happens? Yeah, I think we should assume that there's definitely something real going on there because a lot of people that we respect both from Coin Center and also Jake Chrivensky are saying that there's

Starting point is 00:32:24 something there. The details of this are yet to come out, like how strict they're actually going to be. It is interesting that Steve Mnuchin is trying to get something done while he's, while him and the administration he's a part of is on the way out. However, Steve Mnuchin, friend of the banks, right? Therefore, not a friend of bankless. And whatever Steve Mnuchin is doing, I don't like it. And I'm one thing I'm worried about in, this is a conspiracy theorist in me is like the banks are putting pressure on Steve Mnuchin to like, you know, break some stuff on his way out so that they can get a little bit more protection because they know that crypto is coming and it's not necessarily a good thing for

Starting point is 00:33:02 the incumbent banking system. Okay, let's say that's the case. Something bad does come in this lame duck presidential situation here. Is that is that the end of crypto? Just crypto price, you know, tanked? Is it the end of crypto in the U.S. at least, what happens? I'm still running my node. You can see it right over there. So unless somebody's coming to my house and stopping me from doing that, I think the crypto shall continue.

Starting point is 00:33:30 Yeah, absolutely. We'll have to see what happens. I think we might see some market turbulence if news like that emerges, but we will talk about it as it does. Some other things going on. Paxos becoming the latest crypto bank to actually become a file, to become a real bank that is happening. more and more.

Starting point is 00:33:50 We also have no big surprise. We also have a J.P. Morgan report, which is kind of echoing maybe some of the sentiments of Dahlia. Some analysts from J.P. Morgan saying that gold will suffer for years because of cryptocurrencies, because of Bitcoin in particular here. That's just a demographic preference change. It's the cool new toy. Gold is dumb.

Starting point is 00:34:12 Gold is a boring toy. Bitcoin is a cool new toy. We talked about the demographic change, right? And like, I think we even mentioned this last, last pot. Like, there's nobody that we know under 35 who's excited about gold relative to crypto right now. Right. Bitcoin number goes up. Gold number doesn't go up very much.

Starting point is 00:34:30 All you have to do is wait, my friends. All right. David, let's do some hot takes. If you want to live a bankless life, you need to get a hardware wallet. There is no alternative for storing your crypto in a self-sovereign fashion. That's why I have four ledgers that I use. to manage my different crypto assets using the Ledger Live account as well. Ledger Live is like your home base for managing your Ethereum, Defi, and crypto accounts.

Starting point is 00:34:58 It does a really good job of aggregating all of your different Ethereum wallets if you are the type of person that uses more than one, but you can also add other cryptocurrencies like Bitcoin or Cosmos or whatever your preferred blockchain is. And then it will display an aggregate portfolio of all your accounts at the main page. One thing that Ledger is doing a really good job of is enabling all the money verbs that me and Ryan talk about with the Bankless SkillCube enabled in the Ledger Live app. So right now in the Ledger Live app, you can buy, sell, lend, swap, and stake your crypto assets, which is doing a really good job of fulfilling all of the money verbs in the bankless skill cube. Something that's new to Ledger Live is Ledger Swap, where you can swap assets one for another directly inside the Ledger Live application, ensuring trustlessness in your finance. activity on Ethereum and on Bitcoin.

Starting point is 00:35:48 If you want to learn more about what you can do with a ledger, go to the blog post The Power of Ledger Live on the Ledger website, where they share some of the more advanced things that you can do with your ledger that you might not have known about. There's a link in the show notes that will take you to the Ledger Shop where you can get your preferred Ledger Hardware Wallets. I personally like the Ledger NanoX, but I also have both. They're both great options.

Starting point is 00:36:10 When you own a ledger, you own your own assets in the way that they have been designed to be held by the user and the user alone. So go get your ledger today to make sure that you are as self-sovereign as possible. The bankless state and the nations are brought to by WIREN. Wynne is DFI's first self-building community-run project, which I just get really, really excited about. Wynne is a system that seeks out yield in DFI, and it does that in a number of different ways. A very aggressive way is with the vaults where you can deposit your preferred asset of choice and different defy experts will come in and generate a strategy for what to do with your deposited token, right? And so it'll go find ways to get yield in that deposited token in defy.

Starting point is 00:36:56 For those who want to just earn yield on their stable coins, the earn system is for you, where you can deposit your preferred stable coin, and Wiron will go and figure out which money market on DFI and DFI is producing the best interest rate, whether it's DYDX, it's compound or AVE. it looks around defy to see where the yield is coming from and it direct stable coins automatically so you don't have to check them out at y-earn.finance to get started and also check out the stats page to see what other people are doing. David, let's do some hot takes. What? Or actually before hot takes, no, these are hot takes. What's on your mind? Give me a hot take. Yeah, so here's what's on my mind is that it's becoming clear. And I think the majority of the cryptocurrency ecosystem is now

Starting point is 00:37:40 understanding that. Maybe this is my Ethereum bias, but I think the cryptocurrency ecosystem has now integrated ether as an non-sovereign store value asset that's alternative from Bitcoin, right? Like now the cryptocurrency industry has produced two non-sovereign store value assets, right? Both Bitcoin and Ethereum fill this niche. And I think that the rest of the world, that's effort that we tried to hammer for the last two years. And it took two years to get the cryptocurrency industry to accept ether as an alternative to Bitcoin as a non-sovereign store of value. And I think we did it. Nice job.

Starting point is 00:38:16 Now moving two years into the future, I think that's when the rest of the world starts to integrate this information as well. It's like, oh, there's Bitcoin. It's the 21 million hard cap currency. And then there's also ether, which is backed by the Ethereum economy, which is like this economy that's built on the internet, also a non-sovereign store of value. I think that is what I'm, that's what's on my mind is like thinking about how the rest of the world is going to include ether.

Starting point is 00:38:39 in the category of non-sovereign store value assets. So you think the train has left the station that's just going to happen at some point that we're maybe a bit ahead of the curve. Bankless listeners are probably a bit ahead of the curve. But trains left the station, it's inevitable at this point that ether becomes a recognized store value.

Starting point is 00:38:57 Yeah, absolutely. And I think people that are looking into this space are going to look in. It's like, yeah, we know Bitcoin, but like what else is there? Like, what happens when you go beyond Bitcoin? Like, what's behind the scenes there? And I think they're going,

Starting point is 00:39:09 to discover Ethereum and fall in love. Or maybe again, it's just my bias. So if that's the case, though, just as Bitcoin is in kind of a price discovery mode for the next decade, so too as Eith and possibly even more so, given some of the attributes that we've been talking about, we'll be interesting to see if more folks bite off on that narrative. Ryan, you've been chewing on this idea all week, so I'm excited for you to share what's on your mind. It's just mullets. Mullets are on my mind, David Hoffman. You know, I've wanted to start with this. It's a little bit like to start doing a movet mullet, right?

Starting point is 00:39:45 I was surprised. Coronavirus mullet. But, you know, it's not me that's growing the mullet. So the inside here, the hot take here, is that it's fintech that is actually growing out the defy mullet. This is basically, you know, fintech in the front, defy in the back. That's where the party is happening. And I think that we're seeing essentially fintech.

Starting point is 00:40:09 swap out slowly, it's banking, traditional banking infrastructure and those rails, as we've called it in the past, for crypto infrastructure. So I'll just drop, like, I put together an opening note on bankless about this on Monday, but like five points, cash app, here to a one billion, they're doing one billion per quarter in Bitcoin sales right now. Okay. So FinTech, right? And what's, what's in the back? It's Bitcoin. They're buying Bitcoin. PayPal is now allowing users to purchase any crypto and they're connecting that to 26 million merchants, right? This is just the start. Next, it's going to be stable coins, another defy type product. Crypto support is going to come to Venmo next quarter. Robin Hood's been doing crypto for a long time. I just looked at their education

Starting point is 00:40:54 material. This is kind of like where millennials go and trade stocks, essentially. All their education material, it's like it's about crypto. They're onboarding millennials into the world of cryptocurrency. Coinbase is becoming even more fintech every day. So they're going the other direction. They're issuing a credit card, a visa card, actually. Now, when we're talking about visa, this is probably the biggest news at all. We talked about this last week, but Visa actually announced an integration with USDC. So this is the first time a business actually take out a visa card instead of using U.S. dollars represented in Wells Fargo or Bank of America or wherever else.

Starting point is 00:41:35 They're actually using USDC. This is it. This is the mullet, David. This is FinTech in the front. And now instead of this nice trimmed haircut banking infrastructure in the back, they're growing up to defy mullet. It's just all defy. It's the party in the back. Right.

Starting point is 00:41:51 So that's a hot take. I think it's going to happen more and more. This was the circle announcement that we were just talking about like 20 minutes ago. This was the same thing. It's a square alternative that runs on USDC. So point of sale in the front and then USDC. in the back, yeah, running on Ethereum. So that's pretty dope. The bullet's getting longer. It's getting longer. But here's where it links into the regulatory discussion we're just

Starting point is 00:42:16 happening is. I think a munition or some, you know, stable act is going to have a very difficult time banning crypto in having very strict regulatory apparatus around crypto when they've got large fintech fortune 500 companies that are building out this crypto infrastructure because then it's not just the crazies like us who are crypto-native saying hey don't do that our freedoms right it's it's wall street it's PayPal it's square going to u.s regulators and saying hey if you do this you force innovation out of our companies and you force it outside of the u.s and they have a much bigger stick in Congress than we do. So once Wall Street gets on board,

Starting point is 00:43:04 once FinTech gets on board, they start building on Ethereum, munition's not going to have the ability. No one in Congress is going to have the ability or the political will to start taking really strict regulatory actions against crypto. That's my take.

Starting point is 00:43:18 That's how I think that links to maybe there'll be some negative regulatory action in the near term, but in the mediums to long run. Like the battle's over. Yeah, not at first. It'll be popular. All right, well, let's get to the next one. David, what are you excited about at this point in time?

Starting point is 00:43:39 Dude, Ryan, I'm excited for all the bullish Ethereum content that we are in the middle of producing and have scheduled to produce as well. We just recorded with the Ether Capital Boys. I was editing it yesterday and it's ready to go. We're going to put that out, I believe on the 28th. We're recording with Eric Connor, Anthony Sizzano and D.C. investor. top and all about the bull case for Ethereum. And that's going to be just a fucking awesome.

Starting point is 00:44:07 And so there's going to be a bunch of just bullish content coming out of bankless in the future. And I'm excited to start beating some of those drums. David, you put out this gif, I think, as you were editing of this like orchestra conductor, doing this like in passion. Is that really how you feel when you're editing these podcasts? You feel like the orchestra conductor and just like making magic? Yeah.

Starting point is 00:44:27 Sometimes when I, like, you know, three people like you, the two guests, me and are all conversing and we're all just hitting point after point after point. I'm like, yes, like next point, next point, next point. Keep bringing them. And yeah, that's what that podcast was like. That is awesome, man. Yep, lots of good content coming at you guys for sure. What are you excited about? I'm excited about 2021. I'm ready for 2020 to be over. Like, I'm done with it. I'm done with 2020. You know, something else I'm done with, I'm done with a two and a half three year barrel. I'm ready. I'm ready for 2020. I'm done with something else I'm done with a two and a half three year bar. market. Like, I'm done with it. And I think we're going to leave it behind in 2020. I think 2021, we've got all of the, like, I've never seen, I've never been so bullish about crypto, given all of the tailwinds that we have at this point in time. Like, Bitcoin has never been stronger. Maybe there's some regulatory uncertainty in there in December, but like, that's going to fade away, I think, in 2021. Heath went through the fires of its first massive bull market, down 95%, 95%. Now it's back down like 60% or so, but it's recovered. Now it's on the road recovery. It's on the road to all-time high. Some of the thesis we've been

Starting point is 00:45:40 talking about and weren't too sure of in 2018 sounded crazy, 2018, 2019, even the D-Fi thesis that Ethereum could actually support a D-Fi economy. Well, D-Fi is grown to $14 billion in assets under management. That thesis has proven out. Yes, in a small way, but now it's just a matter of scaling those tailwinds. Triple point asset, well, we talked about ethos and triple point asset.

Starting point is 00:46:06 Staking just launched. Protocol sync thesis. That's another term, a fancy term for the defy mullet. Like the starting to happen. Yeah, K1-559 is moving really, really quickly. Like that seems like it could be sooner, way faster than we thought.

Starting point is 00:46:23 Absolutely. So it's all of these things that I think are really bullish. We've got a lot of tailwinds. You know, get through December. I think 2021 is still going to be like 2017. It's going to be face melting. Maybe it comes in the latter half. I'm not sure. Maybe it comes a little bit into 2022. I'm not sure. But I feel like the worst is behind us. And crypto is on a really good trajectory at this point. Yeah, I totally agree. I think 2021 is going to be 12 straight months of number go up. So that'll be fun to look forward to. All right, David. That's been it.

Starting point is 00:46:58 I think we rolled it up successfully. Hopefully you guys enjoyed this. As always, this is not financial advice. Eiff Bitcoin, D-Fi. They're all risky, but this is the frontier. It's not for everyone. David, my lighting is off. My face has been glowing in this weird way the entire time,

Starting point is 00:47:14 but we got through this. Awesome to be with you guys on the bankless journey. Thanks for joining us.

Bankless - ROLLUP: 2nd Week of December

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