Bankless - ROLLUP: 2nd Week of February (Elon buys BTC, Crypto on Mastercard, Celebrity NFTs)

Starting point is 00:00:00 Bankless Nation, welcome to the second week of February. David, what are we doing today? We are rolling up the second week of February. We go through five different sections to make sure that you can stay up to date with the crazy world of crypto. We start with the markets. We talk about what's going on in the markets. What are the markets saying? Then we go into releases, what got released, who released, what products in the crypto world.

Starting point is 00:00:37 Then we go into news, what happened in the news cycle. then we finish up with some ecosystem takes. Who had interesting opinions this week? And then we finish up with what David and Ryan are excited about. And of course, our new section, which just takes a little bit of time at the very end, which I'm in love with this new section, the meme of the week. The meme of the week. To finish it off.

Starting point is 00:00:57 It's hard to pick the meme of the week every week. And it's hard to condense all of this crypto information into a hour, 45-minute segment. How long does it take us these days, David? I don't know. We're getting it down. But it depends. We initially committed to trying to get this to be 25 minutes. And we gave up on that like roughly three episodes in.

Starting point is 00:01:16 So now we do this in about 45 minutes. All right. The week of crypto in 45 minutes. The Bull Run edition of roll-ups is going to be a bit longer, guys. But we're going to cram this into your brains as quickly as possible. David, you ready to start? Yeah, let's do it. All right.

Starting point is 00:01:29 Let's roll them up. The markets. Let's start with Bitcoin price. David, what is happening in Bitcoin land? Oh, you know, just a few things. Bitcoin had reached an all-time high. new all-time high of $48,000 after Elon Musk and Tesla announced that they bought $1.5 billion worth of Bitcoin. It's the largest single announcement of a Bitcoin purchase ever.

Starting point is 00:01:53 And so not only did that, the actual purchase itself probably pumped the price, but the announcement also pumped the price. And that's where we are now. So now Bitcoin is consolidating between $48,000 and $45,000 at the time of recording. we're at $47.7,000. Really expensive Bitcoin. We're flirting with 50K there. And the question is, will Bitcoin hit 50K or will ETH hit 2K sooner?

Starting point is 00:02:20 Which one happens first? Let's talk ETH price, David. What's ETH doing this week? Heath also following Bitcoin's footsteps, breaking us all-time high, a new all-time high set of $1,140. At the time of recording, we are at 1795. either still kind of doing its,

Starting point is 00:02:37 it's kind of slow breakout on a pause, because when Bitcoin rampages, everything else takes a pause. But after Bitcoin kind of capped out at $48,000, we saw the defy tokens start to like really start to try and climb out of that pause that they took. Defy tokens don't move when Bitcoin does move, but like they are ready to go.

Starting point is 00:02:57 It seems like they're ready to go. And that's kind of where I have my eyes on right now. We pass some really interesting metrics to hear Here's one on Ethereum. More than a trillion transactions on Ethereum. That's trillion with a T since its inception. Pretty incredible, David. Yeah, yeah.

Starting point is 00:03:15 This is a pretty cool landmark to pass. I don't personally count the number of transactions. I never really realize that this was a metric. But, you know, one trillion was one trillion. One trillion transactions on Ethereum. That's pretty cool. Yeah, big number. All right.

Starting point is 00:03:28 Let's talk about D5 for a second. Start us off with total locked value. Where are we this week? Yeah, we are above 40 billion locked in defy. Ryan, it was it under a year ago that we like passed one billion in defy or we must be coming around the one year anniversary. Now we're at 40 billion and like these landmarks are just like flying by us. 50 billion dollars is in the sites. I guess a hundred billion. Maybe we stop to appreciate that a bit more. I guess that's the next milestone. And then what? A trillion. Are we going to hit a trillion this market cycle? I mean,

Starting point is 00:03:59 TBD, right? I think we could hit a trillion this market cycle. A trillion dollars locked in defy this market cycle i think it's totally happening let's talk the defy pulse index too david what what's that heading this week four hundred and fifty one dollars again on all time high all time highs across the board you know just everything everything is up into the right so that's that's pretty cool uh and of course i'm also always paying to dpi slash eth that is my defy season indicator and again it continues to march upwards in this low motion trend dia you know formerly known as alt season, now known as DFI season, is typically characterized by like really violent upwards moves. And we aren't seeing those violent upward moves, but we are seeing slow motion upwards moves.

Starting point is 00:04:44 And the DPI is outperforming ether slowly but surely every single week. It's a little bit higher. And this week is no different. We've got some numbers by sector this time that is interesting. We don't always cover in the market section, but I think we should this time because there is now one billion assets under management in these things called Dowell. decentralized, autonomous organizations. How important is that?

Starting point is 00:05:09 And what are Dow's, David? Yeah, DOWs don't have a completely defined definition. But basically, it's like a protocol on Ethereum that has a treasury that it manages, right? So Uniswap has a unitoken treasury. Wynne has a treasury. Yams have a treasury. All these protocols have treasuries. And Deep Dow, this Twitter account, is reporting that there is over $1 billion.

Starting point is 00:05:34 dollars of value in DAOs. And so that's $1 billion worth of funding for these DAOs to get done what they want to get done, right? This is capital yet to be deployed. If you're interested in working in this base, you should be looking at that $1 billion treasury mark from all these different Dow's as potential income for you, the worker. If you can provide value to some of these Dow's, they will pay you. That's what it's for. Yeah, and I wonder if this stat is actually under reporting because I know for a fact, like there are some protocols like Uniswap, for instance, who have maybe billions in their treasury, like lots in their treasury from the Unitokin. So I wonder if this is underreporting at some level.

Starting point is 00:06:17 But what's interesting is what I was saying about the loosenness of the definition of what it is. There's subjectivity and inclusion here. But what these things are is they're basically capital pools, aren't they? So, you know, one of the most common capital pools in the traditional world is the company, the corporation. And it, of course, keeps its assets in bank accounts in various, you know, dollars or currencies or bonds or this sort of thing. This is just that. It's capital coordination only it's happening on chain in these token vote Dow type structures.

Starting point is 00:06:49 It's almost like it's almost like the modern corporation in this defy landscape, which is super exciting to see it hit that one billion mark. Let's talk about another sector, David. This is crypto art sales. Crypto art sales on Ethereum have reached a record $80 million. That's pretty crazy. Yeah, that's pretty insane. NFT sales are up into the right. And this $80 million, I mean, comparison to DeFi, it's actually kind of a small number.

Starting point is 00:07:18 But with NFTs, NFTs is like this massively growing industry. There's another link, cryptoart. dot I.O slash data that has some nice bar charts. If you want to look at NFT data over time, and this is transactional data. This is like volume of NFT sales. And it's also heavily up and to the right. Type in slash or hit that data button, Ryan, right there. And you'll see the massive bar that was last week's, what was it, the hash hash max, masks activity. Lots of volume there. And so that's a little bit of an outlier right there. But the current weekly bar chart for this week is also much higher than all

Starting point is 00:07:59 historical bars except for last weeks. So that's pretty cool. NFT volume up and to the right. David, this is this is 80 million crypto art. I think that this is going to do an 100x this year. And the reason why is we're going to get into the news, right? Like celebrities. It's just like the celebrities are just scratching the surface. People with brands, people with communities are just scratching the surface. We're going to talk about a few in the news section, but pay attention to the space because NFTs are going to have an absolutely massive year as they start to see mainstream adoption. Here is another set of metrics, which is automated market maker metrics. This is from token terminal, which is one of the best places to actually look at defy data. They put together

Starting point is 00:08:45 some fantastic analytics and metrics for various defy tokens. This is them reporting out automated market maker revenue. And David, I was struck by this when I saw it. Revenue since launch, $300 million uniswap has generated in terms of revenue. Now, the vast majority of this went to its liquidity providers. But that is a crazy amount of top line revenue for a protocol to develop. And uniswap's what, like two years old, just a bit over two years old. These numbers are staggering already. I mean, look at that sushi swap number. Sushi swap is almost at a 100 million and it was born in September. And so like it's already like planted its flag in revenue. 73.9 million in revenue that sushi swap has generated for its LPs. And let it let it be

Starting point is 00:09:33 known. Like this is why governance tokens are valuable. Like yes, these fee, the revenues went to the liquidity providers, right, those providing the value to the protocol. Yet it's the tokens that govern over the direction of this cash flow. And so uni token holders are able to point 300 million dollars worth of revenue as they see fit. And that's just a power behind the Unitoken. And that's why the Unitoken has a market value. You know, it's crazy to me is like sites like Token Terminal can show you insight, visibility into all of this.

Starting point is 00:10:03 We talk so often about Defi and its killer, killer feature is that it's completely transparent. Completely transparent. So this kind of information, if you wanted this information about a traditional exchange or like even a, you know, some sort of bank, you'd have to wait for. Yeah, you have to wait for their quarterly reports, basically. They'd have to be audited. You get that on a quarterly basis.

Starting point is 00:10:27 This is all real time and trustlessly verifiable on-chain information. So the quarterly report is kind of, it's kind of dead when it goes up against on-chain protocols in this way. All right, David, let's talk about this last. And it also makes it really, really easy to produce content about because it's always something to produce content every week. Good for content producers. Absolutely.

Starting point is 00:10:48 All right. Let's talk about this last stat. So, ETH is now powering over 30 billion in stable coins. When we talked to Jeremy Aller about stable coins a couple weeks ago, I feel like that number was maybe 20 billion or so. So we just added a cool 10 billion. I think this number is going to absolutely skyrocket too. David, what's your take here?

Starting point is 00:11:09 Yeah, I think this is worthy of a comparison. The Ethereum market cap, Ether market cap, is just slightly over $200 billion. And there is $30 billion of stable coins, largely. on it, all on Ethereum, right? So that's a pretty decent percentage, right? Like 200 over 30 or 30 over 200 or whatever. And just think about all of the transactional demand that 30 billion dollars worth of stable coins creates on Ethereum. Like, well, no shit gas prices are high. Like there's a lot of economic activity to be done. Yeah, absolutely. We're going to talk about gas prices in a little bit, I think. David, that is the market. Guys, we've entered a bull market. Now is the time to start

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Starting point is 00:12:38 $15 after you trade $100 or more within the first 30 days. That's jemini.com slash go bankless. If you want to live a bankless life, you need to get a Monolith Defi Visa card. Monolith is both a one-two punch of an Ethereum smart contract wallet, as well as an accompanying Visa card that lets you spend the money that you have in your Ethereum wallet wherever Visa is accepted. It's really a fantastic tool that lets you use Ethereum for what it does best, which is holding and managing your financial assets, but also keeps you connected to the rest of the world's payment rails.

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Starting point is 00:14:14 Yeah, Madik is this, it's one of the Sanne and Monica peer metaphors. It's an L2 with a bunch of activities on it. So it's a scaling platform with, you know, stuff like AMMs, borrowing and lending, a more expressive and composable type of L2 than other L2s. And it's doing this rebrand to Polygon, which is kind of a cool name. There are many, many layers behind that name. Not enough time to go in it on the weekly roll-ups. But it's actually comparable to Pocon.

Starting point is 00:14:44 dot is the branding. This is what I'm hearing. I'm not an expert on polygon or consensus design or L2 design. So take that with a grain of salt. But this is a polka dot alternative as an L2 on Ethereum. And so this is kind of part of Ethereum's power. Like if you can build it, you could build it on Ethereum. And since all the ready, all the activities on Ethereum, you might as well just build it on Ethereum. And so I think the Pocodot v. Polygon conversation is one that will be had for a long time. Absolutely. And it's Pocod, it's Cosmos, it's many of these alternative layer ones who have the vision to be an internet of blockchains. The question is, can amatic, can some of Ethereum's layer twos deliver that only have it secured by Ethereum and how does that compete against these other competing layer ones? We've said before, David, that oftentimes it seems like many of the alternative ETH killers or layer ones are actually competing against Ethereum's layer ones. or two, right? And I guess we'll see how that plays out. Let's jump to the next hash masks. David, we talked about this last week and this came up when we were talking about markets, how big art

Starting point is 00:15:55 is growing on crypto in the blockchain, on NFTs in particular. Hashmas had an absolutely incredible week. You want to talk about this? Yeah. So we report when we record weekly roll-ups, we record it on Thursday. And so we talked about hash masks. Yeah, it had not yet finished up its first week of sales. And so if we take the second half of Thursday, Friday, and Saturday sales for hash masks, we run into a number that is $13.4 million worth of sales in one week. So congratulations to hash masks for being absolutely successful. Yeah, it's a crazy amount of growth. David, let's turn to this on releases. So Ledger is now providing access to Wallet Connect. What is wallet connect and why is this important?

Starting point is 00:16:43 Yeah, wallet connect is like a middleware type communication system for connecting your wallet to your application, right? I use a wallet connect when I want to use my Argent with some sort of protocol. If I want to trade on Uniswap, I can go and open up my Argent wallet and then I can scan the Wallet Connect integration into Uniswap, and that will link my Argent wallet with the Uniswap application. And so people who use their ledger to connect to Metamac, to connect to Uniswap or to connect to compound.

Starting point is 00:17:15 This is a similar thing where Metamask is offering that bridge. But now Wallet Connect is offering that bridge for things that are Wallet Connect integrated. And so now we can go straight from your ledger to an application on Ethereum like Uniswap or compound using Wallet Connect. And so it's an alternative to Metamask. And so it's a new way to connect the app. And I think that's actually kind of nice because we have as an industry complete dependency on MetaMask. And so having alternatives to connect to applications that aren't centered around

Starting point is 00:17:44 MetaMask is nice. Agreed. And particularly from a hardware wallet, which offers a tremendous amount of security for your crypto if you are custodying it. Let's move to this release. Pool Together has built a prize pool builder. So does this mean, David, you can essentially create your own Pool Together lottery? Is that what this release is about? Yeah. Yeah. Layton Cusack, he's the CEO of Pool Together. And for those that don't know, Pool Together is a no-loss lottery, where you pool your funds and then instead of putting your funds at risk in the lottery, you actually only put your interests into the lottery. And then the winner gets the interest. And so it looks like this is a build-a-pool mechanism out of Pull Together,

Starting point is 00:18:28 which means that there's more composability and more options. And so what they are doing here is they're just making their surface area for building larger. And so people can build on top of them. So that's pretty cool. Nice job, Blayden. Yeah, very cool. Pulled together has been doing a lot. Do you know how big they are these days? Like, I'm not sure how that's... I do not have the numbers off the top of my head. Interesting. We'll have to look that up. All right. UMA protocol. They are creating some novel community incentivization mechanisms. What is this latest that they've created? This is one of the D5 protocols for synthetics and options. Yeah. So UMA is a synthetic asset platform. And so what they are doing

Starting point is 00:19:07 is they are making what they are calling KPI options. KPI's for those not in the marketing world is key performance indicators. And so it's really the numbers that you want to go after when you are trying to measure your skills at marketing. But what they're doing with KPI is not talking about marketing, but more talking about the protocol. There are a couple metrics about the protocol that they are turning into synthetic assets, right? And so the way that this works is that the synthetic asset that they are making is based off of a metric or an indicator. about the protocol that they want to grow. And so if you hold the asset that tracks that indicator or that measure,

Starting point is 00:19:45 you are then incentivized to make that indicator or measure go up, right? Because then the value of your asset goes up. So it's actually a really clever incentivization mechanism. And also the other through line is that these are now new native assets on top of Ethereum, right? No bank dependencies. These are trustless assets if you trust the protocol. And similar to synthetics, the protocol, call for synthetic assets, UMAs just able to be a factory for types of assets that track types

Starting point is 00:20:13 of measures. If you can codify it, you can create an asset out of it. And that's what UMA is done here. So interesting. So they're creating new ways to incent their community to do and to do what they want, essentially. So they're using tokenization and tokens as an incentive. And they're giving away two million UMA tokens for this purpose. David, it strikes me. There are just so many ways to earn tokens by using D5 protocols these days. And this is, this is yet another one. And I'm wondering if this kind of token incentivization will catch on across other protocols if it becomes popular. Totally. Totally agree. All right. Let's go to the next, David. So, Coinbase custody is now supporting deposits and withdrawals of sushi. So that is always a precursor

Starting point is 00:20:59 of things to come. So if it goes into their coin base custody, then generally it ends up on their exchange. I'm just blown away at how fast this is happening. Like sushi is a relatively new token. And already we're getting to the stage where it's about to be on Coinbase. In 2017, there were layers and layers and months and months you had to kind of go through to get a coin to get a token listed on something like Coinbase. Now it seems like anybody is going on Coinbase. Like what's your take on this? Yeah, you beat me to the punch Ryan. So like with the coin Coinbase custody, Coinbase custody is actually not indicative of it making it to the exchange, not all the time.

Starting point is 00:21:41 There are plenty of tokens that go into Coinbase custody that don't make it onto the Coinbase Exchange. However, the reason why we're including it in this week is, I think this is totally the exception. I think sushi is getting included on Coinbase custody because they are gearing up for the Coinbase listing. That is my speculation. I have no more information other than that. But I think we can definitely be preparing for a sushi listing on Coinbase.

Starting point is 00:22:03 All right, David, that has been releases. Let's get to the news, my friend. We've got to start with some of the biggest news of the year for sure. What is it? Yeah, it's the Tesla, which is a company that everyone knows, put $1.5 billion of Bitcoin on its balance sheet. And, you know, Elon Musk, the world's richest man, the man with some of the world's greatest meme power behind him and some of the biggest audiences behind him, now is publicly a Bitcoin holder. basically by proxy of also being the largest Tesla shareholder. So Elon Musk has a bunch of Bitcoin on his personal balance sheet technically. And Tesla has Bitcoin on its balance sheet. Everyone loves Tesla. Everyone loves Elon Musk. And that's what caused them the Bitcoin's the largest one day candle.

Starting point is 00:22:49 We missed this topic in the markets. But Bitcoin had its largest one day candle ever of over $8,000 increase in one day. And we can definitely thank Elon Musk and Tesla for getting that done. That's pretty cool. The after effects and shock waves out of this are going to be massive and last for a really long time. And I always try and say this, like moving up price targets and being bullish just because other people are bullish is always a bad idea. But I can't help and not think this as like, dude, the world's richest man and one of the

Starting point is 00:23:20 world's most beloved companies is now like publicly known to own a $1.5 billion worth of Bitcoin. And then also Bitcoin went up, by the way. So now it's more like $1.8 billion worth of Bitcoin. And I think that this could just, if this is, this is one of the biggest catalysts of a bull market that I could think of. And so like, maybe the bull market is going to be even bigger than I thought it was. Who knows? Yeah, this is absolutely, this is massive news. So what they did was they took 11% of their cash position. And rather than hold it in cash, that's huge. I know, 11% is, is huge. And rather than hold it in cash, they, they're holding it now in crypto money in Bitcoin specifically. And you're absolutely right, David. It's one thing for.

Starting point is 00:24:01 a company like micro strategy that, you know, some have said, well, micro strategy didn't really have anything else to do with the money. You know, their product was kind of a little older, perhaps. It's in the business intelligence space. They were just sitting on this front. What else were they going to do with it? Tesla has a lot of things it could do with its money. It is trying to grow into the world's largest, like, you know, battery provider, basically.

Starting point is 00:24:27 Right. It has endless ambitious, Silicon Valley level ambitious. and it is deciding to put its funds into crypto money. So this is not a micro strategy. This is one of the top companies in the world. And you have to wonder, who's going to be next, David? Is this just going to cause a cascading effect of like tons of Fortune 500 companies making this same move? Or did Elon kind of front run them and they're just going to let it play out?

Starting point is 00:24:56 I'm not sure. Yeah. Yeah. There's a take that we're going to get to in the take. that is about this that I will save for later. So I'm going to tease that. But it's all about the economics and incentives behind putting Bitcoin on public companies balance sheets.

Starting point is 00:25:10 So stay tuned for this takes section. So that was huge. That happened this week. And then we also had Joe Lubin on where we talked about ETH CME futures. That was almost overshadowed. I feel like whenever Eith has a big day, some big news, like Bitcoin comes in with big brother and he's like, no, step aside. I've got something bigger I'm announcing and sort of overshadows it.

Starting point is 00:25:29 And that's totally what happened on Monday. ETH futures launched on Monday. At the same time, Elon Musk, you know, kind of not announced, but it was revealed that Tesla had purchased the Bitcoin. But this is still massive news. And the CME, this is the headline, saw nearly 400 ETH futures contracts traded on the first full market day. Refresh me, David, I know you wrote a post this week.

Starting point is 00:25:53 400 ETH futures, about how much ETH is that? Yeah. So one ETH contract is worth 50 ether. So 400. ETH futures contracts is 20,000 ether. So on the first day, 20,000 ether was traded. Looks like it was actually 19.4,000, close enough. And the interesting comparison I saw was that I think this was roughly 2.5 times larger,

Starting point is 00:26:18 the amount of volume that Bitcoin got on its first day when CME opened up Bitcoin futures back in 2017. This is partly true just because of, you know, the whole entire space is more mature. and people are more hungry to get into ether and other crypto assets. And so the fact that we are seeing a much larger first day volume than we saw three years ago is with the second largest crypto asset rather than the first largest crypto asset is just really healthy, really good, strong signs. So the manager of this product from the CME had this quote.

Starting point is 00:26:54 The response to ether has been overwhelming. Quite the quote there, David. Do you think that, so we had this discussion, and the community is somewhat divided. There are some who think that CME futures kind of mark maybe the end of the ether bull run, right? And the reason for this is somewhat historical. They're taking a data point from the launch of Bitcoin futures in December 2017 or late 2017. And then after that, not long after, kind of the bubble burst and, we saw the end of the 2017 run.

Starting point is 00:27:31 And they're projecting that. They're saying that, well, that caused the end of the last bull run. So maybe it could cause the end of this bull run or at least the end of the bull run specific to Ether. What's your take on that? I think that's a stupidest goddamn take I could ever think of. Like, first off, let's just go with statistics here. You can't extrapolate from one data point. So like when Bitcoin futures opened up, Bitcoin had gone from $250.

Starting point is 00:27:58 to $20,000 and then Bitcoin futures opened up. Like what, like no shit Bitcoin is going to go down after that. First, you give the option to short the asset to people with large amounts of money who play on CME futures. And Bitcoin just went up like a thousand X. Like that's not good data. That's confounding data. You know, Ether is only, it's only $200 above its previous all-time high.

Starting point is 00:28:23 Not 200 times above its all-time high. Like, no, no. this is bullish. Like everyone who's giving out that opinion needs to stop because it's wrong. Well, it's interesting because it's sort of amplified, amplified the popping of the last bull run. But it could have the same amplification effect here, but in the other direction.

Starting point is 00:28:45 Yeah. This could swell up the balloon. And it's interesting to see how that'll play out. But yeah, I think you're right, especially when we have news like this MasterCard. We like to defer to the bullish. inside of things on the next program. Oh, yeah.

Starting point is 00:29:02 Well, it's been right so far. So we'll see how it goes. Let's talk about MasterCard. MasterCard is bringing crypto onto its network. This is a press release from MasterCard. And here's the money quote. We are preparing right now for the future of crypto and payments, announcing that this year MasterCard will start supporting cryptocurrencies directly on our network.

Starting point is 00:29:23 We've seen Visa say something to the same effect. it seems like FinTech and traditional payment processors are moving big on crypto, particularly in stable coins. What's the take here? Yeah, things like MasterCard and Visa, all they are are networks. They're not denominations. Like there's nothing intrinsic about MasterCard or Visa that is U.S. dollar based or like you could in theory put Bitcoin on the Visa network. That is something that's possible to happen. And so all we have to do is we've got to swap out whatever payment rails masterCard is using with crypto payment rails.

Starting point is 00:29:57 And not even swap out. Keep the old ones. Add on new ones. And you can now integrate like a MasterC USDC underlying on some likely an L2 because L1 is slower and more congested than what MasterCard would need. But like the fight behind being the payments for crypto assets,

Starting point is 00:30:15 the payments network for crypto assets, it's massive, right? And it's not just Visa and MasterCard that's playing in this game. It's also PayPal. It's also it's also DFI protocols. like loopering, they are also playing in this arena. And of course, MasterCard is also now getting in with a big bold step into the world of crypto payments.

Starting point is 00:30:38 I always think when I read headlines like this, why MasterCard is bringing crypto onto this network. These are headlines you would have never seen in 2017. That's why this time it is different, right? Like we're seeing another level of adoption, something that we didn't see in the previous bull run and it's super exciting. Speaking of which, we're talking about celebrities endorsing and getting into the art and NFT game. Let's talk about this one. A major soccer player in the EU has just launched his NFT. Who is this? And what what's going on here? Yeah, Masut Ozil,

Starting point is 00:31:17 I think is how you pronounce his name, a famous football player for all of the European and non-American listeners. I don't watch televised sports. And so I don't really know who this guy is. But apparently he's a really big deal. He's got like 38 million Twitter followers, which is just a few more Twitter followers than I have. And he's minting an NFT, right?

Starting point is 00:31:38 And this is just the future of the bull market, or at least when it comes to NFTs, is the incentive for celebrities or people with fans or just creators in general to mint NFTs to figure out how to commercialize themselves is absolutely massive, right? And so the NFTs are just going to gain massive tailwinds for every single celebrity that wants to try and monetize themselves, which is every single celebrity, by the way. It was interesting.

Starting point is 00:32:05 We didn't have NFTs in 2017. And so what we saw toward the end of the bull market was all of these celebrities, you know, talking about launching coins, right? And the trouble with that was the SEC came down on them and said, look, you know, you can't do that. These are securities. You can't go in that direction. We've got a comment from the SEC.

Starting point is 00:32:25 This is Crypto Mom, Hester Pierce from the SEC. And she, we love her. She's fantastic. And she is still one of the commissioners, the SEC, even though there's a new chairperson in the Biden administration. Anyway, her comment is, the market is ready for a Bitcoin ETF. Yes, it is. We're ready for a Bitcoin ETF, aren't we, David? Yeah.

Starting point is 00:32:47 So what she's saying is that the market is structured in ways. that could, that an ETF could get approved. In this article, we're saying an ETP, I think that means an exchange traded product. I'm pretty sure what she means is an ETF. And like, so all of the boxes, according to Hester Pierce, all of the boxes that are needed to be checked for Bitcoin to get an ETF are checked. And so Hester's saying, let's get this ETF underway. And like, I totally agree. All the, the lack of there being an ETF for Bitcoin and other crypto assets means it's a, it's a, failure on the SEC to protect consumers because then they have to go into Grayscale. And again, this is not Grayscale's fault, but the fact that there's so much demand for Bitcoin,

Starting point is 00:33:29 it means people are buying the Grayscale Trust version of Bitcoin, which has a premium associated with it. Same thing with Ether. And this is something that the ETF version of Bitcoin is supposed to fix. So like, let's start protecting these consumers, SEC. Like, let's get the show on the road. Let's get this ETF out the door. Could you imagine what would happen to crypto prices if the news of

Starting point is 00:33:51 an ETF was released. Like, is that, is that just the catalyst for the rest of the bull run? Or does that, in some weird way, mark the end of the bull run? I put out a tweet earlier this week after Elon Musk announced putting Bitcoin on this balance sheet. And I said, you know what? At this point, a bear market is impossible. I'm increasing the price targets to infinity.

Starting point is 00:34:12 I put a little infinity sign. It was a joke because obviously it's a joke about how people move up their price targets when they get more bullish. And that's a fallacy. And you shouldn't do that. But Bitcoin put or Bitcoin is on Tesla balance sheets and we're probably going to get a Bitcoin ETF. If we also get a Bitcoin ETF, like I don't know how how will this bull market actually end? Like where does it actually stop? Like there's too much good news. There's too much good news

Starting point is 00:34:35 into the future that just hasn't clicked in yet. And then a lot of unexpected good news that has already hit to fuel the early stage of this bull market. So we'll see how that plays out. Speaking of good news that may be yet to come, Twitter is considering Bitcoin. putting it on its balance sheet. Twitter, of course, is partially controlled by Jack Dorsey. But this is, who's the CEO, this is their CFO talking about this. Like, there are a relatively small number of corporate executives and CEOs and CFOs in corporate America, right? And they all talk to one another. That's why last week, David, when we were talking about Michael Saylor, and he put on this kind of seminar for other, uh,

Starting point is 00:35:19 corporate executives and CEOs who talk about Bitcoin. He was like guiding them through the process of what it takes to actually put it on your balance sheet, right? They're all super networked. And they like, they move as one. They get FOMO too. So like, uh, Bezos, he sees what Elon's doing. He's like, oh, God, man, he front run ran me, but I got to get in before Zuck did.

Starting point is 00:35:42 And he goes and he puts like, it's just such a small group of people, right? Like making these decisions. And it does feel like something's building and about to cascade here. What's your take? Yeah. So I'm going to bring up a take from the take section and talk about it right here. I already hinted at it earlier in this recording. This actually came from Pierre Richard, who was like a Bitcoin maxi of Bitcoin Maxis.

Starting point is 00:36:04 And he made this prediction that over 50% of S&P 500 companies will have Bitcoin on its balance sheet by the end of 2021. And his rationale was this. Company X announces that Bitcoin, that they put X number of, Bitcoin's on the balance sheet. They make the announcement, the Bitcoin price goes up, and the stock price of the company goes up at the same time. Like, the incentives are too strong. And so we've already had three examples of this where some company put Bitcoin on its balance sheet, made the announcement, Bitcoin pumped, and then the company's share price pumped at the same time. We're just going to get that repeated over and over until it stops working.

Starting point is 00:36:43 They're going to just do it until it stops working. Until it stops working. That's exactly right. And at that point in time, Bitcoin's going to be worth like $10 million of Bitcoin. Crazy. And like the bull market is going to like blow up half the world or something. Yeah. I think that there's an element of truth there for sure, that that will continue to happen. And then maybe when Bitcoin stops working as much, maybe then they go downstream and start doing other assets.

Starting point is 00:37:06 So what's the first publicly traded company that's going to put ETH on its balance sheet now that it has CME futures? Absolutely. That's how bull markets tend to go. They certainly go in hers. and they try the same things until they stop working. David, let's talk. Let's not give institutions too much credit, though,

Starting point is 00:37:24 because they can put Bitcoin on their balance sheet, but that doesn't mean that they have diamond hands. Institutions can also be paper hands too. So while there can be a massive, massive winding up, institutions can fomo out of Bitcoin just as fast as they can fomow into Bitcoin. So those diamond hands can turn into institutional paper hands real quick. Honestly, the longer I'm in this space, David, the less, I believe that there is such a thing as smart money.

Starting point is 00:37:45 It's all psychology, like all the way down, whether it's institutional or whether it's retail. It's all psychology. Let's jump to this, which is the amount of gas that Coinbase is using. So Coinbase, of course, in exchange, we call them crypto banks. Did you know, David, it uses 25% of all ETH block space, one fourth of all ETH block space with one crypto bank. This is Will Price on Twitter. He's saying with different architecture, it could use 20 to 40%? less gas. What's your take here? Why isn't Coinbase optimizing its gas usage? And were you surprised

Starting point is 00:38:22 by that number, one-fourth of all, ETH gas? Yeah. So I knew that Coinbase uses an insane amount of ETH block space. I did not know that it is using 25% of ETH block space and is doing that when there's no, the most amount of block space for demand on Ethereum ever. So like they must be absolutely burning cash. And actually, I kind of know what it's like to work in a central company that needs to make transactions on Ethereum as part of its day-to-day operations. And so you have to make those transactions no matter what the gas fee is. It hurts. It hurts.

Starting point is 00:38:56 The thing is, Coinbase is a massive company that is extremely well funded. And so they're just paying the bill. They're just saying like, oh, like how much are we paying for, you know, the last 24 hours worth of block space? Oh, three million dollars. Okay. Nothing. Not a big deal for them.

Starting point is 00:39:10 Whatever. And so like, and to be honest, like, Coinbase is a little bit too big. Like they grew really fast, really, really fast. And now they're kind of hard to get that ship turned. And I think this is kind of just a signal of a stress, of a startup being stress tested. They can't really figure out how to pivot fast enough to start to not pay ridiculous gas prices.

Starting point is 00:39:33 But Coinbase, it would be really nice on all of our budgets. If you could figure out how to optimize your gas usage, like, come on, guys. Let's do this. Well, this is interesting, David. And I want to get back to this when we get to the take section. but this is an example of economic density, right? So like the more economically dense transactions on Ethereum will persist because of the way ETH gas is auctioned up.

Starting point is 00:39:57 It's basically highest bidder wins. And if you're Coinbase and you're making millions a day, these gas fees are nothing to you. You're making way more. But if you're, say, issuing NFT, right, you're a small-time artist and you're trying to pay gas fees to like trade exchange your NFT, right? Well, that transaction is much less economically dense than all the coin-based transactions settling, you know, millions of stable coin dollars in value. So let's get back to that soon when we talk about EF gas. But David, a few other things we got to hit in the news. This one, the Federal Reserve put out a research paper about what?

Starting point is 00:40:39 about defy the federal reserve st louis and they they put together this fantastic diagram david i've seen this diagram before i feel like i've seen it in early edition of bankless articles but it's a fantastic diagram to describe the layers of defy the settlement layer at the bottom is um is ethereum we've got an asset layer protocol layer application layer if you're on youtube you can see this with us what is your take on this article and about the fact that the st louis fed published it. Yeah. So I actually talked to the author behind this, behind this article, Fabian, perhaps a bankless podcast in the future, question mark. Is it in the works? Maybe it is. He's a really smart guy. And he's a professor. He's a professor that specifically teaches

Starting point is 00:41:25 crypto networks, defy. And so he can speak at a level of like 301, 401 type of, of, you know, at that kind of level with regards to defy. And so he's been reading bankless for the last year half so that helps. Yeah. Yeah, exactly. Yeah, exactly right. Like he uses bankless as a as a place to site, which is pretty cool. So bankless made it into the, uh, the research arm of the federal bank, which is the Federal Reserve of St. Louis. Yeah, it's, it's cool. And, um, I think that would that would make a great podcast, David. We should, I think it would make a podcast. He should come on bankless. Very good. All right. Um, a few other things, be in B&Y, Melon, I'm just going to actually read this headline. Bitcoin to come to America's oldest bank, America's oldest bank, B&Y, Mellon. So this is

Starting point is 00:42:12 another traditional bank who's capitulating and opening up a way for its customers to do custody, digital currency custody. More and more banks. I feel like this is going to be a regular thing on these roll-ups too, David. Let's get to a couple more. You're in finance, had an exploit last week or so, right before I think the last roll-up. It was an 11 million-dollar loss. And this is what we say. We say at the end of every bankless podcast, like this is the frontier. You could lose what you put in. Folks who were using one of the wire and vaults, I think it was a die-specific vault, they lost money.

Starting point is 00:42:49 They lost $11 million. I actually had a friend who texted me and it was like, oh, shoot, I had funds in this. I was like, I'm sorry. But I also said, I bet wire and governance will issue these funds and make vault holders hold. vault holders whole, and that is exactly what they did as well. So what's your comment on this, both the hack itself and then the restoration to make why earn vault holders whole? Yeah. So I actually made this prediction in the issue, the 2021 bankless predictions. I predicted that there was going to be a loss of funds from a faulty vault out of wire. And that came true in February.

Starting point is 00:43:33 that happened pretty frequently. The thesis behind this is that there's just a lot of surface area with hacking or exploits when it comes to urine. They touch so many different protocols. And so every time you touch a new protocol, you're adding in another layer of complexity and another way for an exploit to happen. And so sorry to any of the Y-Dye holders that got their fund snagged. But conveniently, Yerne had just voted to mint 6,600,000.

Starting point is 00:44:03 I think that's the right number. Listeners should double check that. But Mint 6,000-ish YFI tokens, which is a lot of money. And so that was more than enough compensate people who lost funds. And protocols are supposed to be protocols. But also, at the end of the day, we can be like pragmatic and say, you know, a protocol that can compensate its, use its centralized coordination abilities behind the urine team to compensate people that lost funds.

Starting point is 00:44:33 Like people are going to feel better about that. Like people that lost money in urine and then if they didn't get compensated, probably will never go back. But people that did lose money in urine, but then did get compensated for that will like say, thanks. Thanks for compensating for me. And I'll stay with a protocol. Like it's a trust growing mechanism.

Starting point is 00:44:50 So nice job for compensating people, urine. It's super interesting because what's the lesson here, right? The first lesson is, here's another example. Defi is risky. Be careful. you put your funds in smart contracts. They can be hacked. They can be exploited. But the second lesson is also that, oh my God, some of these defy protocols are flush with cash. And they do have this social coordination mechanism, this token governance feature, which allows them to make

Starting point is 00:45:20 those who are exploited whole. And we've seen this happen time and time again. So it's almost like a mixed message here, right? One is like, be careful, risk off. The other is like, yeah, but there's also some built-in insurance in DFI. And yeah, it's, it's interesting to see how that, how that happens. David, let's talk about the last thing before we move on to some takes for the week. This is the avalanche blockchain. What happened with avalanche this week? It's not a chain that we talk about too much, but there was some news. It broke. Okay. The avalanche blockchain broke. It stopped going. And if anyone remembers my tirade against the frogs, it actually started off. with me talking about avalanche and the genesis of the conversation was that avalanche was given

Starting point is 00:46:08 praise for being this blockchain that moves fast and breaks things. Maybe that wasn't the word. I think the wording was they shipped really, really fast. And I said in the comments, you know, well, when it comes to L1 things, like you actually don't want a blockchain that ships really, really fast. You want a blockchain that's really careful and moves really slowly and methodically. And that's how I would characterize Ethereum development, even though Bitcoiners would characterize the theory in development is too fast. I guess everything is subjective and by a comparison at the end of the day. But I think when your avalanche blockchain breaks and stops going,

Starting point is 00:46:40 that's an indication that you have moved too fast and you should have slowed down. But also what happened when you said that? Did you get like, did you get an angry mob on? Oh, yeah. I got a huge angry mob. And that's kind of what triggered the whole my fight against the green frogs. But that's a topic for a different day. Hard to know who is real and who is a bot on things like Twitter, especially now in the

Starting point is 00:47:02 Bull Run. David, let's get to the takes. This is the first. We're nowhere near the top is kind of the take. And here is a graph that is showing in blue ICO searches on Google, I believe. And it shows it from 2017 up till now. And you see this chart where it goes from like zero to 100. and 100 is really peak ICO, peak 2017, peak mania of the last bubble.

Starting point is 00:47:32 You know what chart that looks like, Ryan? What? The ETH price chart. Right? Totally does. Okay, so it looks like the ETH price chart. And then it's just this mountain. And then you see this other line, which is DFI.

Starting point is 00:47:46 And DFI is a search term. And it's much lower. It's hanging out at like between one, one and 10 for all of 2017, all of 2018, all of of 2019. and it's only just gone up a little bit, still under, you know, 20 or so. It's just hit 20. So nowhere near the level of 2017. This is basically comparing the search term mania of ICOs versus Defi.

Starting point is 00:48:08 And what it's saying is defy hasn't even started to enter into the public consciousness. People aren't even searching it at this stage. You're talking about like, well, is defy in a bubble? Is it not in this in this most recent defy season? We're nowhere close to what we were for ICOs in 2017. I don't think anybody is talking about defy on CNBC at this point. So if this plays out like 2017, it feels like we've got a long way to go in this. Is this what this is saying to us?

Starting point is 00:48:43 Yeah. So the defy matching the ICO search terms back in 2017 is, in my opinion, the floor. Because I think this bull market is going to be bigger than the last bull market is. So once defy matches the ICO search terms back in 2017, that I think is the minimum it's going to get to. I think it's going to go well beyond that. And if you look at this chart, you can definitely see defy starting to tick upwards. It's definitely growing. But like you were saying, in comparison to what ICOs were back in 2017, it's still a blip.

Starting point is 00:49:14 Like there's still so much left to go in this market. Absolutely. And it does seem like defy tokens are going to be the ICOs of the previous run. is that that's what this is implying as well. Yeah, and hopefully it is just capturing the energy and not the scamminess. From what we've seen so far in Defi, I'm actually pretty proud of the lack of scamminess in comparison to what we saw in 2017 ICOs. Cross my fingers and knock on wood that that stays the same.

Starting point is 00:49:43 I definitely do expect scaminess and bad behavior to come into the space, but so far, so good. So far, everything about Defi that I've seen I really, really like. and all the stuff I don't like is staying small and kind of under the radar, which is good. And that might be an indication of the early stage of this bull run. I bet we'll tend to see some scammer and worse projects as time goes on as the bull run really kicks off. David, let's talk about gas fees because that actually could be an impediment to this vision.

Starting point is 00:50:12 So gas fees are high and it sucks. If you're a defy user, it sucks. I'll tell you one thing that really sucks. This is like getting, have you ever been gas jailed? So maybe you have some stable coins in an eth account, right? So let's say you had $100 worth of dye inside of one of your eth accounts and eth address. And it takes like $30 to move that die from one ether address to somewhere else, right?

Starting point is 00:50:38 So that's $30 out of your $100. And what can happen is if you have small enough amounts, this is not even worth the cost to actually do anything with your assets in the ether dress. this is a problem, isn't it? Like what is the problem of gas fees, I guess your take on that first? And then what does it say about the Ethereum network? Yeah. So the whole point of Ethereum is to be maximally inclusive.

Starting point is 00:51:04 And right now it's not fulfilling that vision. And that's why Ethereum 2.0 is the whole effort behind Ethereum 2.0. Ethereum 2.0 is supposed to scale so we can have more people and transact on the base layer. and it's also supposed to scale its consensus and let everyone be a part of that. That's part of the vision of Ethereum, maximum inclusivity. If you have been priced out of that, that's Ethereum failing in its vision. But it's also on its way to achieving that. Again, that's the whole point of Ethereum 2.0.

Starting point is 00:51:34 So, like, we are in this unfortunate, like, uncanny valley between, like, defy is really awesome. It's the future. Like, there's tons of value and speculative upside to be gained here. So you need to be playing in it. yet also, sorry, we also haven't solved the gas fee issues. We're in this very painful time where we're between these two things. And I think that that's where scaling solutions like loopering, Polygon, which we talked about earlier,

Starting point is 00:52:03 ZK rollups, optimistic rollups, synthetics is on optimism. Uniswops, L2 is coming out. And so I think that's really going to be the stopgap between that's going to help ethereum scale before sharding comes out. But again, we're actually not there yet either. Lupring, you can actually start to do some trading on some eth to die or ETH to USC trades. And so if you are trading ether on uniswap, maybe try out loopering. You can do faster trades with pennies rather than dollars.

Starting point is 00:52:31 But yeah, I just think this is going to be an unfortunate period of pain, but that's just the precursor to growth, in my opinion. I agree. I think this is the process of DFI has to kind of re-architect itself on layer two and off of layer one. But what happens to layer one is we've used this analogy when we talk to Hasib in a podcast of like, the Ethereum Mainnet, that's Manhattan. And Manhattan property like prices are just going to go up and up and up. Like the value of Manhattan is very high because Manhattan has everything. It has network effect.

Starting point is 00:53:03 There's better jobs. There's better opportunity. Lots of people want to live in Manhattan. And so as much as this is kind of painful for smaller defy users, it's also a marker of product market fit of Ethereum, right? So like it's, it's very striking that all of these other ETH killers have basically like empty blocks. They're basically like zombie coin, like chains, right? There's nothing going on. Their gas fees are very low because no one's actually filling them up. No one's actually using them. Everybody would rather pay super high gas fees on Ethereum rather than go

Starting point is 00:53:38 onto this, this Eith killer chain. So that is also interesting. I would characterize like the story of high gas fees as well. It's just being like two words. It's insane demand. That's why gas fees are so high. And I do think, David, that the reality is we talk about Ethereum as a credibly neutral settlement layer. That's worth a lot. So block space in a credibly neutral settlement layer is worth a lot more than block space on, you know, Binance smart chain, right? Which is controlled by 21 different validators all associated with with Binance. that is less credibly neutral and how much are people going to pay for that block space a lot less. So there's something interesting about this and it goes back to our conversation earlier.

Starting point is 00:54:26 Coinbase settling on Ethereum consuming 25% of its block space, paying these massive fees. What's going to happen on Mainnet is the transaction fees are going to become more and more compact, more and more economically dense. So pretty soon a transaction on Ethereum, main chain is going to contain all of the economic value of a roll-up chain, like loop ring, or all of the economic value that's going on inside of a coin base. And these transactions are going to become more and more dense. So some people talk about Ethereum solving its gas fees.

Starting point is 00:55:04 And what they think that means is it's going to go back to like 2018 when gas fees were really low. I don't think that's going to be the case. Like the reality is gas fees are probably, like they'll have. They'll have ebbs and flows. They'll go down a little, but they're probably never going to go down to 2018 level. What is going to happen is we're going to start to be able to fit more economic value, more trustless economic value in every transaction, in every unit of block space in Ethereum.

Starting point is 00:55:31 I think that's how it's going to play out. Haseeb's model of Manhattan, I think, is really, really helpful here. So, like, what's going on is the Ethereum L1 blockchain is a city. It's Manhattan. Everyone wants to live there. and we don't have any other suburbs. There's nothing else other than Manhattan in the Ethereum universe.

Starting point is 00:55:49 And so there's two ways to create more land. We shard or we create L2s. And sharding's not here yet. And so L2s are creating, we keep using the Santa Monica Pier, but like the really, the Santa Monica Pier is really, really big. And so like there's this place where you can go to

Starting point is 00:56:04 now that loopering is here, now that Polygon is here, now that, you know, insert your L2 is here. There's, what we are doing is we are building land. We are creating new. land to absorb some of the overflow that is people's demand for trying to live in Manhattan.

Starting point is 00:56:20 So it's a matter of creating new land for people to live on. And so that's why people are bullish on Polygon. People are bullish on loopering because it's new real estate, it's new real estate to leverage, right? And so I think you're totally right. I don't think L1 gas fees are going to go down ever. I think where they are now is probably actually going to be where they are going to stay for a really long time. It's just that there's going to be overflow options. And that's going to be how we solve gas. There's going to be places to go to overflow that demand and capture that

Starting point is 00:56:51 overflow. That's the goal of all L2s is to capture the overflow for people that don't want to transact on the L1. So what do you do if you're a defy user? I guess some gas tips. One thing I think you can do is buy ETH. Like generally earlier is better when price was lower. Like buying ETH two years ago would have hedged you against all of the USD price increases of gas. So that's one thing that you can do is because, you know, gas fees and the price of ether are somewhat correlated. And you can kind of like minimize the cost that way with ETH price appreciation. Another thing you've got to do is have fewer accounts, to be honest.

Starting point is 00:57:31 You can't have your funds spread out across like 20 or 30 different ETH addresses because like it, it's hard when you start doing that to you split your funds up into smaller and smaller pieces and it's not like worth it to move $30 out of a specific eth account. Do you have any other gas tips, David, for defy users? Yeah, I would say like, and especially during bull markets and especially if this is your first bull market, I know what it's like. You see a token that some that your friend just mentioned or you see a token that's pumping and you're like, hmm, I got to get some.

Starting point is 00:58:08 First off, no, no, no you don't. And second off, when you look at that uniswop trade and you're saying like, okay, I'm going to buy $200 worth of this token and it's going to cost me $30 in gas. It's $30 in gas denominated in ether, right? So if you ape into that token that you might sell later tomorrow, depending on how you're feeling when you wake up in the morning, you've paid $30 worth of ether to make that trade. And that's not $1, that's ether. And so if ether goes to $10k, that $30 is going to like $300. Right. So remember. remember, when you are paying gas, it's not dollar denominated. It's ether denominated. And you are giving up your fees in ether to pay for that. So like, think slower. Don't make, do make intentional slower trade. You don't have to buy every single token. And if you don't, if you don't buy every single token, you get to keep more ether. And that's good for you. Anyways, there you go, David, we got to put an article together with all of these gas saving tips. We'll do that sometime on bankless. Is just buying Ether a good tip? I mean, it worked a bit better when you were buying it in 2018 than now, but, like, yes, buy and hold can head you against that a little bit. Well, here's a take that's kind of related to that from Ashley on Twitter. How do you pronounce Ashley's last name? Oh, Shapp.

Starting point is 00:59:26 I think, I think it's Shapp. Okay, Ashley Shapp on Twitter. So she says the first cell phone came out in 1983 and picture it. It was 11 inches long, two and a half pounds and cost $4,000. Early adoption is expensive and clunky. I think that says it all right there. We are early adopters in DFI and on Ethereum, and transactions are expensive, and they're clunky at this stage in the game. We're early.

Starting point is 00:59:54 We're at the frontier. Like with that is some UX pain, some risk, some challenge. But there's also a reward because when else are you going to? to buy ETH at these prices and crypto at these prices. So there's a tremendous amount of upside. But keep in mind how early we are. This is like cell phones in the 1980s. This is like the internet in the early 1990s.

Starting point is 01:00:18 This is like, give me another one, David. What is this like? Oh, gosh. Oh, put me on the spot. This is like your pre-I-Pod, like, you know, hold your disc in your Walkman. What was it called the Microsoft Zoom? Did you ever see people with a Zoom? Zunes were relatively late. That was an iPod competitor. I'm talking about the thing where the Walkman where you actually have a C. And if you take too large of a step, it skips. That's where we are. Yeah, that's where we are in crypto, in Defi in particular. So it's still super early. David, anything to add to that? Nothing. All right, man. Let's get to the last take, which is yours. So maybe you should talk about this.

Starting point is 01:01:02 Yeah, so I put a lot of on my Instagram stories just of like Ethereum content just to tell all of my friends from college, from high school that like, hey, you should be paying attention to this Ethereum thing. So one of them mentioned to me, it hits me up in my DMs and goes, so why do you think Ethan's going to 10K? And like I took a pause and I said, well, there's a number of reasons why. Like what's what is the best reason? You didn't want to bust out the triple point asset thesis?

Starting point is 01:01:26 No, I didn't. He wasn't ready for the triple asset. He'll get ready for that one. And so my response to him was, well, there's lots of reasons. And I go, well, the main reason is memes, right? And memes will take, you know, Ethereum to 10K. And already the 10K-Eth is already a meme formulated by our friend Anthony Sizzano here, who you can actually see on the screen at the bottom.

Starting point is 01:01:50 Are like digestible little nuggets of information, right? Triple point asset is one of those things. It's, that one's a little bit hard to digest. but like memes and culture and just sharing memes and talking about like, you know, all the little like snippets of information about how Ethereum is the thing that it is that helps people understand what it is in short little bits. I think it's going to be the reason why Ethereum ether goes to 10K. Ah, okay.

Starting point is 01:02:19 So you were saying memes in general and by that you meant narratives. You weren't saying specifically and only the the eth to 10K meme, right? We'll take it to 10K. Although that's probably part of it. The more people who believe in ETH to 10K will socially coordinate around that number, get it to 10K. But you were talking about memes in general. And by memes, you meant like narratives to help simple people understand complex concepts like crypto. That's what's going to take.

Starting point is 01:02:51 It's basically another way of saying what we say. I feel like almost every week that the most bullish thing for crypto is to be understood. and memes help in that understanding. Not only do they help, they propagate it. Ryan, I think you saw that website that came out not too long ago. And it was, I can't remember what the URL is, but it will be in the show notes. I know where it is in my DMs. But you go to this website and it's a black screen.

Starting point is 01:03:15 And you slowly see this 10K, ETH slowly appear into the website. And it's got this very, like, mysterious vibe around it. And you start hearing the voice of Eric Connor talking about, defy on the bulk case for Ethereum podcast that we did. And then every bullish sentence that Eric Connor ever said is like cut into this like a very interesting website. You're you guys got to watch it. And then Anthony Sizano cuts in and then DC investor cuts in all the bullish things. And it's like the whole entire website is one big beam. But like you can send that to someone and it's like, A, there's the 10K Eith meme just like baked in there as this thing is like slowly making its way to

Starting point is 01:03:53 the forefront of the website. And then you are listening to the voices of Eric Connor, Anthony Sizano, DC investor talking about all the bullish case cases for Eith. That whole website is a meme in my mind. That website is a meme. Yet it's also conveying really good information. Yeah, it really is. This is how internet culture propagates units of information as well. And increasingly, this is how people are investing. Right. Just look at GameStop. Just look at GME. Just look at AMC. These are all community meme-driven investments as well. And crypto is definitely that's reflective on the way up as well as the way down. David, those are our takes for the week.

Starting point is 01:04:29 And we just ended up. 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. 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, Est oil, or SD,

Starting point is 01:04:58 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 synthics 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. Synthetics isn't just for traders. Developers can build on synthetics to access the infinite liquidity offered by synthetic assets. 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 and not found in the legacy world,

Starting point is 01:05:35 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 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.

Starting point is 01:06:17 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 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 Avey AVE.com. That's Aavee.com. All right, David, now we've got to get to you what you're excited about.

Starting point is 01:07:01 What are you excited about this week? Yeah. So last week I was excited about loopering and I'm still excited about loopering. But this week, I'm excited about the concept or idea behind Fiat onramps into L2s. And so I think that we all, we just talked about how much Coinbase is spending on gas. A lot of what they're spending on gas is fulfilling customers request for withdrawals, right? Like you go to Coinbase, you have 10ith in your Coinbase account, your 100 USC or whatever, and you want to get that into your Ethereum wallet. So you hit the withdrawal button, and then Coinbase makes a transaction.

Starting point is 01:07:33 That transaction cost them like $5 per user per transaction, right? So they pay that, you don't pay that. And maybe instead of sending Bunny to peoples on the L1, they could send to users accounts on L2s like loop ring, right? And so imagine this, right? You take your Fiat money from your bank account, send it to Coinbase, send it to Gemini, buy ETH with it, trade it for ETH, and have that ETH or USC. And you just get those assets sent to an L2 directly, right? And so the way that this would work is that Coinbase or Gemini, they would take one large sum of money, right?

Starting point is 01:08:11 So a pool. They would put like, I don't know, half a million dollars into loopering of ETH or USC. And then they could give their users the option to withdraw, directly onto loop ring for free. And it would be free for them. So they're obviously incentivized. They're the ones, the companies, the exchanges are the ones saving that money. But if they withdraw to loop ring, they only have to take that like, you know, one million, half a million dollars worth of USD or stable coin or ether, put that on looping. And that's one transaction, right? So if 10, if like 100 users all want to get onto loopering, every single 100 user has to, every single user has to pay like $15. But if Gemini or Coinbase wants to get their assets onto looping, they all. also just pay $15 once, right? And so if they move a million dollars onto loopering, then they can start paying out users' requests for withdrawals on loopering using ether or the supply of money that they put there. And they only paid one $15 transaction fee. And now that they can distribute those fiat or ether settlements on loopering for free, right? Less gas base.

Starting point is 01:09:13 And many people who are trading on Coinbase like to trade on Coinbase or Gemini because they're centralized, which means they get instant trade. you know, there's no gas fees. And that's what looping offers. And so I think the future of Fiat on ramps to L2s is ahead of us. I'm excited for that to come. I want to see which, which are the major exchanges are going to integrate that first. But injecting cash straight into L2s, I think is going to be really, really powerful, especially for people who just hate gas fees. Yeah, look, the first exchange that starts doing that gets our business automatically. So Tyler, Cameron, Winklevoss, you guys are listening.

Starting point is 01:09:50 We know you're listening. We know you listen to these. We want Gemini to build the Fiat Bridge directly to Ethereum layer two, directly to these layer twos. Look, they're still early, but you could do that right now with a loop ring, for sure. And over the next six months, all the new layer twos that are starting up,

Starting point is 01:10:10 I mean, that's where defy users can start their crypto journey, essentially. They don't even have to go on high gas fee mainnet. They can start directly in a layer two that's still, secured and just as trustless as Ethereum. Absolutely, David, that is the future. And all we need is kind of those fiat bridges. So we'll see who builds them.

Starting point is 01:10:30 Ryan, what are you excited about? All right. I'm excited about a new crop of stable coins that I think is just starting to peek its head up and just coming above the horizon. So there's so many difference. Like, it's actually pretty easy to create a stable coin. You know, USDC is a stable coin that is backed by dollars in a bank account somewhere. That part's easy. What's really hard is making a trustless stable coin. And that's the difference. Because of course, with the USDC, who are you trusting? You're trusting the issuer. You're trusting the whitelist blacklist on USC. Ultimately, you're trusting settlement in the traditional financial system in a traditional bank account somewhere. That's not bankless or it's kind of bankless. It's kind of bankless. It's using crypto rails. But it's not really crypto-natively, completely trustless bankless bearer instrument that ETH or Bitcoin are. So what's the

Starting point is 01:11:20 the Holy Grail. The Holy Grail is to create a trustless stable coin, something with the characteristics of ether or Bitcoin, but also with some stability characteristics. And it turns out that's really hard to do. But there are two ways you could do it. One, we had a conversation with Dan Ellitzer, and this is the approach that many of these algorithmic coins are taking, is you can basically back it by faith, back it by faith in the future demand of the algorithmic stable coin. You kind of take a bet on that, future demand. So empty set dollar, do I think that's going to increase in demand or decrease? If I think it's going to increase in demand and that demand will be sustained, well, there's a reasonable chance. Empty set dollar might be able to hold its peg over the long run. So it's backed by

Starting point is 01:12:06 faith, essentially, in the demand characteristics of empty set dollar. This is like the senior shares sort of model. But the second way that you can do it is you can back it by Eith. Rather than faith, You can back it by a crypto money that people already have some faith in that already has some value. So what I think we're going to see is this the second type of stable coin. Basically, an eth-backed, purely eth-backed, low governance stable coin. So almost like a die before it was die and it was just a single collateral die, but without the governance layer. And so we're seeing the advent of some of these. I think you talk to liquidity on Meet the Nation, which is going to come out on.

Starting point is 01:12:52 Liquity. Liquity. Okay. Liquity. Meet the nation. I'm looking forward to watching that and actually learning about that. So that's one. There's also Rye that's coming out. I've been made aware of a few others. I think these are coming in the next six months.

Starting point is 01:13:06 And these are basically stability coins, not quite pegged one to one with the dollar, though some are pretty close, that are all backed by trustless collateral ETH. that don't have the messy human governance layer that a maker has. So I'm super excited because I think there's going to be a massive wave of stablecoin innovation here. And I'm also excited because it's bullish for banklessness, right? You know, bare instruments, stable coins that are completely trustless. And it's also, quite frankly, it's bullish for ETH, you know, ETH being the collateral

Starting point is 01:13:45 that backs all of these, this new wave of asset. So I'm excited about that, David. I just, it's going to be cool to see. I think it's coming in the next couple of months and into the, you know, six to 12 month time horizon. I bet we'll see tons of these projects

Starting point is 01:14:01 and some of them will be in some traction. Yeah, and of course, the things that you get excited about also get me excited. What I get excited about is some of these trustless stable coins have options to not, use the dollar as the rest of the point. And so the conversation here, and this is kind of one of my

Starting point is 01:14:20 early, what really got me excited about Maker Dow in the early days is understanding that DAI is just a price feed, right? We just choose to peg to the dollar because that's what people want. If the dollar loses its dominance, all these stable coins don't have to point to the dollar anymore. And so that's something to also consider in the very long term is that, you know, the dollar is temporary. Yet some of these things have the ability to pivot, unlike the dollar. The dollar can't pivot. The dollar is like grasping for straws if you, if you listen to Bitcoiners, which I tend to agree with. The other thing that gets me excited about is each one of these stable coin projects tinkers with incentives. So each one has their own incentive mechanisms, yield incentivizations, different

Starting point is 01:15:02 ways to participate. And each one is going to tinker with all of them. They're going to be great for all of the defy power users that want to really get their hands on them. At least one of them's going to get it right because everything that can be tried will be tried on on ethereum and in d5 so i've heard this one before yeah well you know what we we uh we see these themes playing out everywhere david let's get to the meme of the week what is the meme of the week this week yeah the meme of the week this week is a bankless listener who who has made a couple of of memes about us lately and so we we had to we had to keep with the bankless themed content but j z wearing a bankless shirt doing the triangle sign. I don't even know what that's called. I don't really listen to Jay Z anymore.

Starting point is 01:15:43 But what he's showing in this meme is the triple point asset, right? Doing the triple points with the hand, store value on the top, commodity on the right, capital on the left. JZ is woke to the triple point asset, folks. Oh my God, dude. Who's the biggest celebrity we can get in a bankless shirt? Who would be your dream celebrity getting a bankless shirt one? It's Jay Z. He's wearing one. Oh, yeah. That's already been done. Jay Z. Did you not? Yeah. Okay. Okay. I didn't know what's real. Jay-Z. I didn't know it was a real picture. Okay. Yeah. That's awesome. Real picture. I'm sure you're listening right now. Thanks for listening to Bankless. And thanks for believing the triple point asset thesis for us. All right, man. Risk and disclaimers, Eith is risky. Crypto is risky. So is D-Fi. You could lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you joined us on this Friday morning. This has been our weekly roll-up.

Bankless - ROLLUP: 2nd Week of February (Elon buys BTC, Crypto on Mastercard, Celebrity NFTs)

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