Bankless - ROLLUP: 2nd Week of June (El Salvador, Elizabeth Warren, Bitcoin FBI Ransom, Polygon & Arbitrum)

Starting point is 00:00:01 Bankless Nation, it is Friday morning, the second week of June. Roll up time. David, you ready for roll up time? Ryan, I'm always ready for roll up time. It's honestly my favorite piece of content that we produce here on the bankless program. It's the most fun. Just so consistent. Every week we bring you, markets, releases, news takes, what we're excited about. It causes David and I to go in depth on the week, too.

Starting point is 00:00:37 Make sure we absorb all of the headlines. So super exciting. This comes at you every Friday morning. so you can enjoy it with your morning cup of coffee. YouTube, I think, is the best way to view this because we've got lots of visuals. But if you are podcast only, enjoy it on the podcast feed to, David, before we get to the first section, we've got to announce something that's kind of exciting. This is a partnership between the bankless Dow and Pi Dow, which is an index, a defy index organization.

Starting point is 00:01:08 And they are also a Dow, and they've created a way to earn a company. liquidity. Do you want to talk about this for a bit? Yeah, this is something I think that where the through line is really about Dow to Dow partnerships, right? Pai Dow wants liquidity and asset deposits, and it is incentivizing the bankless Dow to both submit liquidity, which is what the PiedaO wants, but also use a referral link to generate referral fees for bankless Dow. And like I said in the Future of Work article that came out on bankless last week, the future of work. is like Dow to Dow relationships. We can bootstrap these things ourselves. So if you go to the link in the show notes

Starting point is 00:01:48 and you deposit liquidity and stake your LP tokens, you get a pretty healthy yield, at least at current dough prices. Right now, you are getting 375% APY at current liquidity and current dough prices, so big asterisk. On the play to dough LP, and then on the dough to ETH LP, you're getting 290% again at current liquidity prices and current dough prices,

Starting point is 00:02:11 which are pretty awesome yields. If that is something that you are interested, click the link in the show notes and bankless Dow gets the referral fees. There you go. There's a whole how-to guide. If none of that made sense to you, read the how-to guide and you will learn more. All right, David, you ready to get into this. Let's do it, Ryan.

Starting point is 00:02:25 There's so much you're talking about this week per usual. I know. I know. All right, market. Let's start there. Bitcoin's still number one last I checked. How's Bitcoin price hanging this week? Yeah, Bitcoin touched a low of right below $32,000, which, again, was really, really spooking

Starting point is 00:02:42 people. But then the El Salvador news came and Bitcoin pumped from $32,000 all the way up to $3,700 and now we are at the current price of $36,800 with the Bitcoin price. We had our state of the nation with ledger status and he kind of schooled us on TA and an analysis and he kind of pointed out how broken the Bitcoin chart looked and how scary it looked. It doesn't look awesome. It doesn't look awesome. But my take is that this El Salvador news could be the news to help repair the Bitcoin chart. It's very plausible. It seems to be an easy take to say that this El Salvador news is going to what paints the floor of the Bitcoin price possibly.

Starting point is 00:03:32 Interesting. We'll definitely see. The charts don't lie is what I learned from Ledger. But there's still a lot of fear in the markets, David. This is the fear and greed index from an organization that monitors sentiment for Bitcoin. We're still in the extreme fear zone. And I think this is on the back of just a lot of downward price action, but also energy, fear, uncertainty, and doubt going on in the market, even some regulatory clampdown talk.

Starting point is 00:04:05 So that extreme fear sentiment is still pretty active for Bitcoin. Any thoughts there? Yeah, Bitcoin has had an insane amount of headwinds, especially coming, yeah, from the regulatory environment. We've got the energy crisis for Bitcoin, which they are still fighting. Now we have these ransomware attacks. Bitcoin is having some PR troubles. And for me, that's where I get a little bit of my fear.

Starting point is 00:04:29 Is like, can Bitcoin overcome these PR issues? Because there's a decent amount of the people, the people of the world that are, you know, going after Bitcoin right now that don't care about. realities and are just going for narratives. We're going to be talking about this in the weekly roll-ups. But like the anti-Bitcoin narrative is growing from people who don't care or know about Bitcoin. Yeah, absolutely.

Starting point is 00:04:52 And we'll see if that El Salvador news, which is going to be a big topic this week, is enough to combat that. Okay, let's talk about ETH price. So we're hanging at 2,500 at the time of recording. So we are down on the week. Yeah, what's going on here? Down on the week. the weekly high is just above $2,800.

Starting point is 00:05:11 The weekly low is just below $2,400. And we are at the current price of $2,506. Flat on the week. So that means that liquidity providers are probably pretty happy because they're generating the liquidity fees. But people long-eath are probably, you know, again, like kind of antsy. If you're long-eath, you want it to be higher than where it is right now. Kind of in the same vein as Bitcoin.

Starting point is 00:05:34 Like we are really looking to have some like support and catalyst to really make sure that, you know, this doesn't, this whole entire, like, weekly or two weeks of price action just doesn't break down. Let's look at the greed and fear index again for ETH. So we're not an extreme fear for ETH according to market sentiment. So again, this analyzes social media channels, all sorts of sentiment indicators. But we are squarely in the fear zone. That feels about right to me.

Starting point is 00:06:01 I think ETH holders are still doing okay, still feeling good about the gains on the year, but also a bit fearful. I think the big question comes out. It's like the question we asked Ledger, hey, what's going to happen next? What do the charts tell us? Are we going back into a bear market? Like, is the bull run over?

Starting point is 00:06:21 Or, you know, will Bitcoin drag ETH down? What's going to happen in the future? That remains kind of the question. One of the possibilities Ledger laid out, which I don't think has been clearly articulated on bankless before by a guess is just that hey what if we're just flat through the entire rest of the year the whole year the entirety of 2021 and that's definitely a possibility too and what he said is that if we are flat for the year that hurts because everyone is expecting up when everyone is expecting up and you get flat that is

Starting point is 00:06:56 down from expectations right so that's bearish versus expectations and so um it seems like it's in the cards and like that being flat is actually causing fear and that's kind of that's kind of what happens when like you get kind of get used to up and to the right only uh all of a sudden flat is bearish yeah me personally david uh i'm not in that fear zone like i'm not concerned at all i'm probably closer to the to the yellow green zone um i just think even a flat year actually feels uh feels really good to me at this point in time because it clears out a lot of the the folks who are just here for short-term gains but it would be a break the cycle. Like, crypto hasn't traditionally, you know, had such a short bull run and then gone back

Starting point is 00:07:42 to flat zone before a steady rise up in the way that Ledger was describing. So we'll have to see how this plays out. If you are long term on the journey, of course, this doesn't factor in as much to you. The weekly ups and downs don't matter. But let's look at the ratio, ETH to Bitcoin ratio. So what's going on here? Yeah, Ryan, if you want to zoom out maybe to the three months chart, the The ratio peaked out. It was climbing really, really steadily up until right before this El Salvador news, topped out at 0.077 when the ETH-BTC ratio high was just a little bit above 0.08. So almost touched the highs that we set a couple months ago. Then the El Salvador news came and people in Bitcoin had a pump off of its floor. Now we are down to 0.067-Eth BTC, which is still a really healthy number. And I think this indicates the same thing that Ledger was saying. It looks like it's going to range for a while. It looks like it's going to range between 0.055 and 0.08 for a decent amount of time.

Starting point is 00:08:47 And depending on how much you want to believe me, it looks like it could range for, like Ledger said, the whole rest of the year. But again, I don't know anything. Well, we keep referring to you that El Salvador news. I promise, guys, we are going to explain that in the news. section what's going on there let's talk about defy though really quick while we're on the numbers so kind of flat again on the total locked value metric in defy flat at about 60 billion or so anything anything to talk about yeah 61 billion locked in defy i think the cool thing to talk about is ave dominant ave has taken the number one spot on locked at assets locked in defy 13.2 billion yeah

Starting point is 00:09:30 used to be maker as a very recently but avie has really really sucked in a lot of liquidity and assets. And some of that is definitely due to their Polygon integration. Assets locked in Ave on Polygon is going up a lot. Yeah, I remember a time, David, when DFI was concerned that Maker had too much power and influence and was too, almost like getting too big to fail. It used to have 80%. Yeah, 80%.

Starting point is 00:09:58 Remember there's like a Maker dominance sort of indexed for a period of time. and now it's hanging out in number two. It's still got that silver medal. But wow, the Ascent of Ave has been quite a story. I think we'll talk a bit more about that. But let's talk about the Defi Pulse Index. So once again, this is an index of the top blue chip, I'd call them, defy tokens. And we're down on the week.

Starting point is 00:10:24 Buy a decent bit. What's going on here? Yeah, started the week at just above $400. Now we're at $336. pretty decent dip. Yes, defy tokens taking, taken a beating. It's not recovering as well as ether recovered. And this is, I think, where a decent amount of this fear comes from. Like if people, or a result of the fear, one of the two, when people get fearful, they go risk off and they go up the market cap stack into the more secure assets like Bitcoin and Ether. That's why Ether has

Starting point is 00:10:57 you know, dipped versus Bitcoin. That's why Defy tokens have dipped versus Ether. When people get fearful, they go risk off and they go into more safe haven assets. Well, let's see how this is working out for you, David. You made a bottom prediction on the DPI to ETH ratio. And oh my God, I don't know if that's held. What was your absolute bottom prediction? The absolute bottom that I'm calling is 0.13. and we are currently at 0.134, except the thing is, like, look at that downtrend. Just like look at that just straight down and to the right. And it almost tried to break out of it, but no. And right now this downtrend is very much intact. And so your boy might be invalidated pretty soon here. We'll see. But it was fun while it lasted. Yeah, well, I guess what this

Starting point is 00:11:48 means is maybe we get layer two summer, but we might not have a defy token summer repeat, right? We're entering into defy summertime last time. Defy tokens were just starting there as in June of this time last year. We may not see that repeat in this summer. It could be a chilly summer. Honestly, I don't think anyone knows what the hell happens next. True. We'll have to see.

Starting point is 00:12:15 Okay. But let's talk about this. The story I think in the markets really is a story of cooldown. This is Joel John who gives some takes on this. Maybe we'll go back and forth on a few. Not read them all. But number one is he said, I was intrigued. because the seven-day moving average for volume had begun declining substantially over the past

Starting point is 00:12:37 two weeks. It peaked at 90 billion for daily volume. It's currently 44 billion. So he's saying daily exchange daily volume has peaked and definitely started to cool off. That's his first take where we're seeing this cool down. It is cooling off from 90 billion, but also if we go back just to two months, the $44 billion, like one month, two months ago was actually like the new peak, right? And to some degree, like Bitcoin. We're back to March. Yeah, ether moved really, really fast and also ether had the most volume out of any asset in the last like two months. And so like, again, like from the peak, it dropped off. But right, like its current level is still really high. And honestly, I'll say the same thing about ether price. The peak, $4,300, really high.

Starting point is 00:13:24 Current price of $2,500, comparatively low, but if you go back two months, still kind of flat, right? Like, still good. Yeah, and still definitely above 2017, all-time highs. Let's see the second one, David. You want to...

Starting point is 00:13:38 Yeah, Coinbase slipped from the ranking of number two in the app store to a number 121, implying that there's a lot less downloads of Coinbase, which there's just intrinsically means that there's a lot less retail demand. So that very much falls in line with the draw. dropping in volume. It's kind of cool for a brief period of time. Coinbase, the app was bigger than the cash app from Square. That's pretty cool. Now that's back down. A similar cool off in the number of portfolio apps. So blockfolio is one. It's surged the last few weeks, but Cracken Pro,

Starting point is 00:14:15 Itorio Crypto, Blockfolio, from an app's perspective, all sort of trending down, except Blockfolio is somewhat up. So that's another interesting. marker of what's happening. Yeah, and another big marker that I remember being very big in 2017 was daily active follows of exchange accounts, Twitter, Twitter exchange accounts. The new number of Twitter followers following exchanges has declined from the height of 546 people joining every single week right now to where it is at 200,000 people following Twitter account, crypto exchange, Twitter accounts every single week, again, indicating a declining interest. I kind of like these social metrics because we don't look at them often, David, so it's worth.

Starting point is 00:14:54 looking at. Oh, here's one. This is the number of prominent YouTube influencers, crypto influencers, does not include us. Yeah. What? It includes people like Ivan on Tech, data, data dash, box mining, the moon, Andreas, legit, and two others. I don't think we are any of those two others. But anyway, it's gone from a peak of Newfollow's 130k a week to just 36K. users each week. So it's definitely declined. The YouTube influencer traffic has declined as well. Our numbers are doing okay. If we were there, we would be the outlier, Ryan. We don't hit these major numbers that some of these other so-called influencers. They've been around from 2017, so they have that one up on us. Yeah, yeah. And look, it's different kind of content. Ours is sort of less, I don't want to

Starting point is 00:15:47 slam other, I don't want to slam other influencers, but we're definitely like long-term oriented. We don't have charts up all the time. charts up all the time. Okay, let's talk about this, though. The NFT market bubble has popped. We've got the charts to prove it. So it was sort of like a, this, these charts are saying a near 90% collapse in NFT sales. And I think it was saying that, look, the NFT bubble is three to four months long and now it's crashed. What do you think about this take? Well, we do know that there were a bunch of terrible NFTs that were getting sold. And so to some degree, like, we kind of need some quality to some quality to... Wait, you didn't buy any of the Lindsay Lohan? No, I did not. No, I

Starting point is 00:16:36 did not. No, I did not. And, like, you know, crypto punks, which are still, like, I would consider quality NFTs, were going for an insane, exorbitant amount of money. But I would like to say that the take here is, while volume is coming down, perhaps, perhaps, again, a return to a new means setting a new floor. But I was talking to Jamis from Pleaser Dow, who is very big in NFTs and very focused. And he's very connected with all the NFT issuing platforms and all the, just very much into the details of what's going on behind the scenes and NFTs. And he says that the amount of innovation and development and competition between

Starting point is 00:17:14 NFT issuing platforms is absolutely insane. And so this is very much a, if you look at the charts, it's an NFT bear market. But if you look at the development, It's an development bull market with NFTs. And that's kind of the story of crypto. Like development doesn't happen when there's retail mania. Yeah, I think it's great. Look, unquestioning NFTs are here to stay.

Starting point is 00:17:36 I also think it's healthy. Like, this is sort of a sector bubble in crypto that peaked retail mania and then collapsed, but didn't take the rest of crypto with it, right? So maybe this is evidence for sort of that super cycle theory, where different sectors in crypto sort of go up and down and have their own manias and collapse, but we obviously haven't seen a secular bear market

Starting point is 00:18:01 90% sell-off in other crypto assets. And yeah, as you said, the bare time is when builders build. It's kind of the best time to be involved. So if you were intrigued by NFTs, I would say now is the time to actually go start, maybe buying them, maybe seeing what's going on,

Starting point is 00:18:20 maybe starting to build things, definitely build your network in the space because the mania has left and now is the time to do it. Bear markets are where wealth is created. You find your right, you're the correct position in bear markets, and then you eat your ramen, and then when it finally comes your turn, like you're well positioned. Position yourself during the bear markets. Absolutely, David. All right, this is kind of cool.

Starting point is 00:18:47 ETH had the highest trading volume of any crypto assets across all the major, not decentralized exchanges, but centralized exchanges in the month of May. Reserve asset for crypto? Question mark. This is Coinbase, number one, overtook Bitcoin. Binance, same story, just barely over Bitcoin, but still. Hwabi trading volume, ETH was number one. FTX, ETH was number one.

Starting point is 00:19:15 Actually, pretty impressive to see. the strength of ETH volume on centralized exchanges. And so sort of calls into question, like there was sort of a maximalist take that Bitcoin would always be the reserve asset for crypto and always be the dominant most liquid trading pair. And we're just not seeing that. Now, whether ETH can kind of hold that into the future is sort of a question, right? So I will say there was a period of time where Doge was actually crushing Bitcoin on some

Starting point is 00:19:46 of this, right? So one month doesn't really change the situation very much. It does point to some strengths. But we'll see from a long-term perspective how this trading volume plays out. It's important for Ether to be on the board. So, like, you know, one month is what Ether's got under its belt as the leader in trading volumes. And, you know, it didn't have that before. Next up, one year.

Starting point is 00:20:10 How many months will it take until one year of Ether trading dominance over Bitcoin? We'll find out. Right. Okay, this is really cool, David. Let me blow this up. This is from our friend's a token terminal. This is a visualization of daily borrowing volumes from the leading lending protocols last year. Do you see this?

Starting point is 00:20:29 It's kind of a horse race between compound maker, Avey, and a few other centrifuge and others. Look at compound. Compounds just taken off. Crushing it, right? This is after DFI summer. Wait, Avae's coming up. There's Ave. Oh, wow.

Starting point is 00:20:43 Look at that volume. Right? That's crazy. No, I don't, what happened near the end there? Like, what happened the last two months to cause that? Yeah, what was the, what month was that? Let's see, that was like April and May of 2021. Market volatility, man.

Starting point is 00:20:59 Market volatility, man. Avi's doing something different. Avey integrated on Polygon. This is layered. Avey B2 came, Ame, AIMM markets. I do think back to a theme we've been talking about, David, is, as you're a value as people are evaluating defy5 protocols i'm doing this myself it's like you have to evaluate what their layer two strategy is right now because that's where a lot of the the growth is

Starting point is 00:21:27 going to be in the future um and avae has just been i think has a very solid layer two strategy compound is doing their own independent chain right which is interesting um i'm not sure what their plans are to expand into like we haven't heard much about that haven't heard much about it. The other thing that differentiates AVE from compound, and I think why Avey just jumped at the very end is like, Avey's got all the tokens. And tokens did very, very well in April and May. Right. True. All right, guys, we're going to be back with the releases. But before we do, we want to thank the sponsors that made this episode possible. Bankless is proud to be supported by Uniswap. Uniswap is a new paradigm in asset exchange infrastructure. Instead of a cumbersome

Starting point is 00:22:11 order book system where trades are matched with other humans, Uniswap is an autonomous piece of software on Ethereum, which is what Ryan and I call a money robot. No human counterparties or centralized intermediaries, just autonomous code on Ethereum. Input the token you want to sell and receive the token you want to buy. Something brand new in the Uniswop ecosystem is the Uniswap Grants program is now accepting applications for grants. We have been saying this for a while and we'll say it again. Dows have money and they are in need of labor. If you think that you have something to contribute to the uniswap Dow, apply for a grant to uniswap. Just look at the size of the uniswap treasury. It's almost $3 billion. This mountain of

Starting point is 00:22:53 capital is looking for labor. Do you have something of value to contribute to the uniswap Dow? No matter how big or small your idea is, you can apply for a uni grant at unigrants.org and help steer uniswap in the direction that you think it should go. That's exactly what we did to get Uniswap to be a sponsor for Bankless and you can do the same for your project. Thank you Uniswap for sponsoring bankless. Gemini is the world's most trusted cryptocurrency exchange. I've been a customer of Gemini since I first got into crypto in 2017 and it's been my main exchange of choice to make my crypto buys and sells. Gemini is available in all 50 states and in over 50 countries worldwide. And on Gemini there are markets for over 30 various different crypto assets, including many of the

Starting point is 00:23:36 hot defy tokens. And it's one of the few exchanges that has liquid. markets. Gemini just launched their Earn program where you can earn up to 7.4% interest on 26 various crypto assets. If you're tired of paying fees in Defi or you don't want to worry about defy exploits, but you still want to earn interest on your crypto assets, Gemini Earn is the product for you. Another product I'm stoked to get my hands on is the Gemini crypto back credit card, which gives you 3% cash back on all of your purchases, but paid to you in your preferred crypto asset. When I get my Gemini credit card, I'm going to make sure that I get my cash back in ETH. So whenever I buy something, I get a little bit of ETH bonus back to me at the same time.

Starting point is 00:24:16 You can open up a free account in under three minutes at Gemini.com slash go bankless. And if you trade more than $100 within the first 30 days after sign up, you'll be gifted a free $15 Bitcoin bonus. Check them out at Gemini.com slash go bankless. All right, guys. We are back with the releases in crypto last week. The first one, we want to talk about is Arbitrum stuff, Layer 2 summer stuff, Uniswap, now deployed on Arbitrum. Wow, that was fast. Community voted for it. They deployed it a few days. Arbitrum, of course, not open. They haven't cut the red ticker tape and opened it to their theme park to guess, but Uniswap is deployed and apparently works on Arbitrum. Kind of cool. Wait, so is it Arbitrum that is preventing users from coming,

Starting point is 00:25:02 or is it Uniswap that's preventing users from coming? I think it's Uniswap. So I thought it was arbitram. I thought that arbitram wanted to wait until they had some rides in their theme park that wouldn't chop people's heads off. And they said it was more social coordination rather than like, so like the infrastructure of getting a block explorer up and going and getting Metamask integrated and getting chain link on so that you could power whatever feeds that a defy-critical needs.

Starting point is 00:25:33 I think they were waiting for some of that to come to play. and then they were going to open it. And not all the rides would be open at that point in time, but at least it would be, there would be enough there for users to start. So I think that was kind of the dependency, but I could be wrong. No, I think that makes sense because Uniswap is talking about,

Starting point is 00:25:50 you know, how developers with white listed addresses can use it. Oh, here you go. Yeah. Yep. Okay. I guess it doesn't say, it doesn't really specify. But I think if we're talking about white listed addresses, like who's in control of that, arbitrams in control of that.

Starting point is 00:26:02 So that makes sense. And also it also makes sense because, you know, they want to establish some sort of credible neutrality. And so I think white or like allowing white listed addresses only, which are developers, like basically developers only. Yeah. I think everyone gets to like have their here you have your slotted amount of time to build your stuff. So you don't have to have to have to be, you don't like sushi would just win that race because they just integrate crazy. Right. And so I think they must be giving some sort of like grace peers like, all right, you have this amount of time to like build your apps.

Starting point is 00:26:33 and then we're going to literally cut the red tape. I'm so bullish. Look, I think this is cool because uniswob v3 is awesome. It's really great. And they haven't yet expanded to a roll-up yet. So they've let automated market makers like quick, is it quick swap? Quick swap on Polygon kind of dominate right now. And it's because Uniswap has decided not to enter Polygon.

Starting point is 00:26:57 Why? Because Polygon does not have the same economic assurances as a roll-up like Arbitrum. But now they're in the ring and they're going into layer two. And so I'm super curious to see how the automated market make your money robots all fight for liquidity and like fight each other. And we're the beneficiaries, of course. But it's going to be cool to watch. And Uniswap V3 is a very high touch AMM, right? Like concentrated liquidity makes you like you need to like be on the on the ball with like how you how you choose to LP.

Starting point is 00:27:28 And having that on the main chain with gas fees and like long block times really. hinders that. And I expect the uniswap v3, which is already, look, it's supposed to be a very fierce competition. That competition just gets more fierce when you have like almost instant block times and almost free transactions. Yeah. And it's, it's great to be able to play with it without like having to worry about really high gas fees. Anyway, so Arbitrum humming along. Um, they, Arbitrum is hiring. That's in their, their Twitter header. But I think they're also excited to announce a graph protocol is now offering hosted services on Arbitram 1. We did a great episode. episode of the graph. They provide a lot of the sort of the data indexing infrastructure to all of

Starting point is 00:28:09 these chain link for the inside. Yeah, it's kind of basically that. So the graph protocol is there now to set up in the theme park. David, we should talk about as long as we were talking about uniswap v3, a fantastic uniswap v3 calculator came out. And I've looked at this. I haven't spent enough time with it, but it seems super useful. I think we should just spend a few minutes like like walking through what this is. This is from flipside crypto. But if you were curious about how much money you can expect to make, like a model for how much you can expect to make as a liquidity provider in Uniswap V3,

Starting point is 00:28:47 how this works. Because as you said, David, it is more complicated. This calculator is a great way to model it. So what dial should I set here? What would be a good demo of this? Yeah, so we are looking at the USDC to Ether pool at specifically, the 0.05% fee. There's also the same pool, but with 0.3%

Starting point is 00:29:08 and that liquidity is different. But it looks to be that the dominant pool for ether to USDC is the 0.05% fee. So let's keep us there, Ryan. Let's go ahead and put $1,000. I don't know why it starts at 777. Let's put $1,000 in. And I think that this liquidity positions graph

Starting point is 00:29:26 right on the right here, that is, I think, something that we, as an industry and as a globe will look at until the end of time because this graph tells you where the liquidity is. And also this dash line is where the price is. All of the green is where the liquidity is. And this is where we are playing. This is the game. People that have their liquidity positioned under the line are winning. And look at all the people that have that spike of liquidity, it's kind of hard to eyeball this price, but I think it's like at $2,500 to $200, ish, right now. That's ETH price. Yeah, that's ETH price. Right now, Ether is dipping $2,482.

Starting point is 00:30:12 There's a lot of people who position their liquidity at above this price. And so the people that are positioning the liquidity at below that big range where everyone else is are getting out sort, like an outsized amount of fees because they are where the liquidity is inside of the bands. And so, Ryan, on the left here, you have a, according to this website, you have a band, a liquidity providing band of concentrated liquidity between $2,255 and $2,918. So that means that if you deposit your liquidity here, you think that there's going to be a large amount of time that ether is going to spend between these bands. But if you had a conviction that the ether price was going to stay at an even narrower band,

Starting point is 00:30:54 you could drop that 2,900 price. Let's say we're bearish. I think we had just the most bearish weekly roll-up market section that we ever had. So let's drop that top price down. Let's go down to $2,500. We're right above where it is right now. And just to be clear, David, what we're talking about with this liquidity ban is the $1,000 that we have in the top here, we're only providing that $1,000 worth of liquidity,

Starting point is 00:31:21 and this is USDC, for that band beneath the price. So if it goes outside of that band, if ETH goes above $2,515, which is the top of the band that I have right now, if it's $2,600, for instance, as a liquidity provider with my $1,000 is not making anything. No transaction fees for that. And you have it all in Ether. And I have it all in Ether. Right, because the Ether price is north of your band, and so you have sold all of your dollars for Ether.

Starting point is 00:31:52 You have bought the deal. Ah, that's interesting. if it kind of forces you to buy the dip if it goes outside of your band. Yeah. Mm-hmm. Mm-hmm. And so, and so let's say, I don't think ether price is going down below $2,300. So let's raise that ban from $2,250 up to $2,300. Okay.

Starting point is 00:32:09 Mm-hmm. And the other cool thing is look at that prices the last five days. And so according to the band that we have, you can see that green highlighted zone. And you can see, like, retroactively what ETH price has done in the last five days. And you can see how much, how much of your. band, ether has been in historically in the last five days. Now, Ether Price has largely been north of this band the last five days. So if we have a band right now between 2,300 and 2,500, that means that we are bearish ether in comparatively to the last five days. And also going

Starting point is 00:32:41 back to that liquidity positions in the top right, you can see that highlight and lighted band of where everyone else has put their liquidity. And that's also where you have put your liquidity. and that dash line is inside of that band. And so using these parameters that we have put in, we have a price assumption of $2,490. This website defaults to the current ETH price. And then we've also selected a band of between $2,300 and $2,500. With an investment of $1,000,

Starting point is 00:33:11 we are making roughly $10 every 24 hours while Ether is inside of this band. And so annualized, that is $336. percent annualized. And so if Ether spends its entire one year time between these two prices, $2,300 to $2,500, $1,000 will net you 360% over one year. And that's just the takeaway here. Like, I don't expect Ether to stay within this band for the whole entire time. That would be, like, as an LP, that would be just like a complete W, like massive win for you, unlikely. But this is just a very fun website to tinker with Uniswap LP.

Starting point is 00:33:51 positions and really just get a grip on what it means to LP and Uniswap v3. And so if you are still trying to wrap your head around Uniswap V3, I would recommend just come to this website and just play around. It's good practice. It's good modeling. It's a good way to comprehend what's going on here. Totally. It has the other pairs too. So if the impermanent loss, USC to ETH kind of scares you, is this another factor to consider? Do something like die to USDC, right, with a 5% and see what $100,000 would do there with a band. Yeah, I'm not sure I fully understood kind of how to model this and how to enter into uniswap positions before this website and this tool. So super handy, guys. Definitely check that out. David, let's talk about another automated market

Starting point is 00:34:41 maker with the release this week. This is Curve Finance. So they just put together a volatility algorithm. And they deployed on both Ethereum and Polygon, interestingly enough. What is going on here? Yeah. So this is Curve's response to Uniswap v3. And so if you go into the white paper, the white paper is only like three pages long, but it's got some like crazy math algorithms in it that make my head explode. But what I've tried to gather is that this is a similar thing to concentrated liquidity in Uniswap. but with Curve, it's a variable curve according to an algorithm. And so Curve is stepping into the concentrated liquidity game with their own specific strategies. And kind of the TLDR I've got is that this is really good when prices range,

Starting point is 00:35:34 but this curve is not less optimized for price discovery. That's like the TLDR that I heard. However, that's also the same TLDR as Uniswap V3 and concentrated liquidity at large. And so basically the TLDR here is that, you know, there are multiple strategies to try and create concentrated liquidity. And when everyone understood and got their heads wrapped around Uniswap v3, they were like, oh, it's the Curve killer. Well, you know, don't discount Defi. Don't discount Defy innovation, right? Like Curves got some cards up its sleeve.

Starting point is 00:36:06 This is why I go back to Robot Wars, David, like, you know, the Uniswap robot just added a buzzsaw. and now Curve is getting its own buzz saw so you can get all. Like, I love it. Battle bots. Battle bots. Yeah, it's like that's what's happening in real time here. And again, what do we get out of it? More efficient capital markets.

Starting point is 00:36:26 Like, and this is what we always say. It's like this ecosystem in Defi is so Darwinian. It's so brutal. Crucible. From a liquidity perspective. It's a crucible, right? And it's all adapting and evolving these organisms exist. in a different planet versus traditional finance.

Starting point is 00:36:45 But once these two civilizations meet, oh my God. Right. We have these highly adapted like robot organisms meeting traditional finance. And the old traditional finance civilization does not have a chance against these sci-fi weapons. And that's what's being built here. Dude, battlebots. That's such a great meme. It is battle lots.

Starting point is 00:37:07 All right, let's talk Polygon. So Polygon is kind of cool, I think, because it shows, it's almost like a cookie cutter of what we think is going to play out with all of these other layer twos like arbitram and optimism. You can kind of see how it's evolving, how all of the defy tools are being added. So what's this first one? What's polyscan, David? Yeah, polyscan is just the polygone version of ether scan.

Starting point is 00:37:32 Everyone loves ether scan. It's, God, it's straight up God's gift to the earth. Oh, he's there. Uh-oh. Well, that's just the blog. Yeah. Yeah, it's a blog. So yeah, polyscan.com, if you want an ether scan fork, I guess, of four Polygon.

Starting point is 00:37:47 And so if you've been having trouble, like, interpreting your transactions with the Polygon block explorer, now there's something much more similar to Ether scan. But, wait, is this from the Ether scan people? I mean, it looks like it. I don't like, I mean, we also had Binance smart chain scan, right? And I'm definitely, that was definitely like made by. Yeah. Binance.

Starting point is 00:38:09 So I actually don't know. Either way, very happy about it, except for the fact that they didn't call it polyscan. Polyscan's better than Polygon scan. Yeah, Polyscan. Come on, guys. They probably couldn't get the dot-com. That's why. Let's talk about this. Another polygon ecosystem thing, hop protocol has deployed.

Starting point is 00:38:27 Well, they already were deployed on Polygon, but what's this? Polygon to Ethereum withdrawal in a minute and 30 seconds instead of three hours. So this is a different bridge. We're talking to Arbitram guys about all of the different bridges to, side chains and layer twos and that sort of thing. This is kind of a hop is providing an alternate way to access polygon. It's faster. Yeah. So this is all about LPing on both sides of the L2. It takes you maybe sometimes as much as an hour or even longer to get off of polygon. Getting onto polygons pretty quick, it takes about 10 minutes. But hop protocol is boasting 1.5 minute transfer times. And the way that they do

Starting point is 00:39:10 that is they have LPs, liquidity providers, providing you the assets that you have and the assets that you want on both sides of the chain. And so you basically sell your assets to the Hop LPR on the Ethereum side, and then the Hop Protocol LPR sells you the same assets on the polygon side minus a small fee. Not only that, not only is it an L2, L1, you know, ramp, but it's also L2 to L2, right? So Polygon to Arbitrum, Arbitrum to optimism, optimism to polygon. And this is kind of where a lot of like the user UX issues gets really, it gets solved by kind of like this mesh network of, you know, L2s to L1s to other L2s.

Starting point is 00:39:55 Fun fact, Connects is also tinkering in this space with their payment channels. And they set up a bridge and they just take a toll on that bridge. So there's a small cost. Not too bad here. It looks like, you know, for $50, about 50 cents in transaction fees, so not too bad. And hopefully it gets more competitive. Another bridge that's being built to Polygon, which, again, we expect to play out in Layer 2 summer to all of the other layer 2s, is chain, is exchanges, rather crypto banks providing a Fiat on ramp, another bridge, a Fiat ramp directly into these ecosystems. This is OKX.

Starting point is 00:40:34 a decent sized exchange, not a nobody, has introduced a way to deposit assets directly from their centralized exchange to Polygon. You could withdraw 23 assets, no wait time. So that's super cool. Not just stable coins, but 23 assets. And this is awesome for a number of reasons. This just goes to illustrate that you are probably moving, everyone listening probably is moving to an L2. We're all packing our bags. We're moving out of Manhattan. It's too congested. We're moving to an L2.

Starting point is 00:41:09 And some people aren't even starting in Manhattan. They're coming and living in the Manhattan suburb, which is an L2, from the get-go. Right? And so OKX is building a highway straight to a suburb on Ethereum, an L2, and you don't even have to go through Manhattan to do it. And I think OKX is doing a great job pioneering this. Other exchanges. Let's get this ball rolling. Come on, guys.

Starting point is 00:41:31 Like, people want to be in the suburbs. Suburbs are hot right now. I think they're absolutely going to, David. Only a matter of time. I felt this layer two stuff going on. I find it, I don't care what's happening with price. I find it so difficult to be bearish. Right. By the way, we've got a layer two.

Starting point is 00:41:47 We've got EIP 1559. We've got ETH staking in full effect and the merge. It's so hard to be bearish. That's exactly right. Let's talk about macho. We're not even done. We're not even done talking about L2s. Macha users can now trade

Starting point is 00:42:01 tokens on Polygon. I use Macha as kind of my main exchange of choice. It's an aggregator. It's an aggregator. Great. Uses a zero X protocol. And now it's on Macha or excuse me, now it's on Polygon. And so, you know, an app now also moving to Polygon, specifically a zero, zero X app. And so this is the zero X, if you, I guess you can call it a Dow, is now also on Polygon. Yeah, super cool. So once again, guys, we've got a block explorer. We've got chain to chain bridges. We've got Fiat to layer two and side chain bridges, and we've got aggregators all active inside of networks. And what's going to happen is the same thing that just happened with Polygon is this ecosystem is building thriving. That's going to play out in these other layer twos as well.

Starting point is 00:42:49 That's what's so exciting. We're going to have a lot of additional real estate for Ethereum transactions. And Machra wasn't even the first aggregator on Polygon. Slinghot was. Dude, it's all happening so fast. All right, let's get to the news, David. We've got to start with a big news item, which is we talked about it in markets. El Salvador. El Salvador is recognizing, and this law just passed through their legislative system,

Starting point is 00:43:17 recognizing Bitcoin as legal tender inside of their country. Here's the actual law that I've got pulled up. This is a translation into English. What's happening here? Is this a big deal? So a quick history lesson of El Salvador. El Salvador had its own money from 1892 all the way to 2001, and then it decided to dollarize, and it accepted the U.S. dollar as the negative currency of El Salvador. And now El Salvador is also adding Bitcoin as the native currency of El Salvador, the officially accepted legal tender. And so that means that businesses have to accept Bitcoin as a currency.

Starting point is 00:43:59 in El Salvador. And for businesses that don't necessarily want to accept Bitcoin and kind of just want dollars, El Salvador claims that they are offering just like an instant swap feature using the Lightning Network. And so the merchants are paid with the Lightning Network and then it goes to an automatic dollar exchange that is government run. And so this is a huge win for Bitcoiners. Nick Carter called this using Bitcoin in its intended way.

Starting point is 00:44:28 and Bitcoiners are just up in arms about this. They are so incredibly stoked. It's extreme validation. A whole entire country has Bitcoin as its native currency with lightning network adoption. And so I think this is going to be the time where like Bitcoin makes or breaks it, right? Like does Bitcoin work as a native currency for an entire country? Can it execute on that? Will that work?

Starting point is 00:44:53 And we're about to find out. Yeah, I think there's a lot of takes here. So like I'm bullish on this, but I also have some reservations, I would say. But like even with the reservations, I think no matter how you feel about this, no one can discount the fact that this is an absolutely historical moment. Like if we're talking about the history of monies, every historical timeline in the textbooks is going to include June 2021, the date that the first country recognized a cryptocurrency as legal tender.

Starting point is 00:45:28 So whatever you think about this, whether you think like, well, maybe this is kind of coercive or whether you're super bullish and excited and this is Bitcoin's intended purpose, you have to recognize that this is legitimacy of cryptocurrency on the world stage

Starting point is 00:45:44 at a whole other level. I know El Salvador is a small country, but this could also be a leader for Central American countries. You know, Mexico is talking about incorporating this. you know, they're Brazil even. There's rumors like Central America, South American countries might follow their lead.

Starting point is 00:46:03 And for a country to stand up and say this and a major politician to get behind it, I think it's pretty historic. Can we talk a little bit about more about this? So what is actually happening here? Caitlin Long had sort of a thread of what this would mean if El Salvador adopts Bitcoin as legal, tender and she said this is a this is a really big deal for a few reasons um one is it would make bitcoin likely get a status as money so treated on par with foreign currency by banks and i'm not sure if this extends into sort of international recognition david um but she said it could possibly

Starting point is 00:46:47 get cash accounting treatment under and she names a treaty that i don't know much about um but i think this kind of enters Bitcoin into the world stage cryptocurrency discussion. That's one of the reasons Bitcoiners are excited about it. What are some other reasons here? Yeah, so having Bitcoin as a currency status, a legal tender, what that does for people living in El Salvador, you don't have to pay capital gains tax on your Bitcoin because it's money. It's like no one pays capital gains tax on the dollar because the dollar's money inside the United States. Or euros. Or euros, right? Yeah. You don't pay capital gains on money. That's nonsensical. All of a sudden, Bitcoin gets that same treatment inside of El Salvador. And so El Salvadorian citizens, if Bitcoin goes to

Starting point is 00:47:35 $300,000, then they don't pay any taxes on that as a capital gains. And so that's really attractive to a lot of bitcoins. The El Salvadorian president said, you know, no capital gains tax on bitcoins, permanent residence for crypto entrepreneurs. And so this is also a strategy to attract Bitcoinsers. And a lot of Bitcoiners have Max Kaiser, who's that crazy bitconer that was like, you know, we're not selling F. Elon Musk, that guy, purchased real estate in Ellis Alvdor. Turns out that was actually a mistake. He got the address wrong and it was actually in a different country, but that's a separate story. Yeah, he really effed that one up. But the point is that Bitcoiners are now interested in moving to El Salvador as like a safe haven for their Bitcoin. And Bitcoiners,

Starting point is 00:48:21 who tend to hold Bitcoin and hold it for the long term. term, probably have a lot of capital gains tax that they probably want to not have to worry about in the future. And so it's really enticing to go live in a place that accepts Bitcoin as currency. And so there's a big push in the same way that like Malta and Gibraltar and all these other like Singapore, all these other crypto safe havens. Like Salvador is raising their hands like, yo, crypto safe haven over here. Yeah, I think like the big win for Bitcoin is, is legitimacy. because it's not the case that El Salvador has launched a plan to purchase a massive amount of Bitcoin for its central bank reserves, right, correct?

Starting point is 00:49:01 Like they haven't done that at this point in time. It's really just saying like, hey, we've got the dollar. And now we also have Bitcoin as legal tender. The language, though, of legal tender is somewhat interesting, David, because this goes into kind of maybe some of the pushback here, right, from the crypto community. And I think it's, which number is it here? I think number seven is the one you want. Number seven, Article 7.

Starting point is 00:49:27 So Article 7 in the actual Bitcoin law that would go into effect, this is a translation from Spanish. Every economic agent must accept Bitcoin as payment when offered to him by whomever acquires a good or a service. So this is sort of coercion by the state. Well, this is a normal legal tender law. This is which is coercion by the state. state, right? Which is coercion by the state, right? You have to. You have no choice. Right. And, and, you know, the president of El Salvador has Bitcoin laser eyes. And if you listen to, we have to talk about the Twitter spaces that happened. But the guy's a straight up Bitcoiner, right? He's a straight

Starting point is 00:50:06 up Bitcoiner. He looks like a Bitcoin bro. I mean, quacks like a Bitcoiner, walks like a Bitcoiner. And, and like the bearish take, the critical take is that this is a Bitcoiner who happens to also be the president of El Salvador, who's imposing Bitcoin upon an entire country. To pump his own bags, maybe? Yeah, well, that's the critical take. That's the critical take. And, you know, Bitcoiners are very happy about this, about, you know, legal tender laws of a nation state. To me, and Ethereum and tokens on Ethereum, it's about maximizing choice. And citizens of El Salvador now have a choice between the U.S. dollar and Bitcoin.

Starting point is 00:50:43 So they get one more choice. but still it's not in the complete ethos of cryptocurrency to say like congrats like i was listening to a guys guys take which is the bitcoin audible uh podcast and he's reading an article and he goes and the first like literally the first 15 to 30 seconds of the article is all about how nation states impose their fiat currencies on you and that's evil and now we're doing it but now we're doing it with bitcoin and now it's okay because it's bitcoin because it pumps our bags well and and and to be fair, not all Bitcoiners are pro this particular article in the laws. Like, so Eric Voorhees has spoken up against it. He's like, hey, this is not the values of Bitcoin. This is not

Starting point is 00:51:25 the values of opt-in anti-coercion. This is not why we're here. But overall, I'd say the Bitcoin community is pretty excited about it. And I actually don't know much about the El Salvador as president. it seems like he is definitely a populist. Some might call him, he has massive support, but some might call him like veering the direction of sort of populist authoritarian as well, which is like,

Starting point is 00:51:54 I don't know. I mean, is that what we want for Bitcoin adoption? Yet this is very much the formula from the Bitcoin standard. Like if you read that book, David and I know you have, Safedin Amuse is just like, this is kind of what Bitcoiners want to happen in order to get to a state of hyper-bitcoinization.

Starting point is 00:52:18 And I think that they would argue that, hey, at least if you have two choices in El Salvador for your people, you've got the dollar, which can be inflated by basically elite baby boomers in the US at a whim, money printed. And then you've got Bitcoin, which is resistant to that level of inflation, then it's better for Bitcoin to be sort of the standard in that country. And that leads to a better, more free world. I'm not sure I'm sold on that vision, though, I've got to say. And then there's also like the implementation of it, which you talked about like Lightning Network.

Starting point is 00:52:59 Wow. Lightning Network just. Asset test. Just hasn't worked. Like largely, its adoption has been. And state channels haven't worked in Ethereum to be fair. the same tech. And so that's going to be a test. And part of me wonders, it's just like, you know, if you wanted, if you wanted to give the El Salvadorian people a financial system in a box,

Starting point is 00:53:21 why don't just do stable coins? U.S. dollars are already part of your legal tender laws. Why don't just do like roll up or side chain with U.S. dollar stable coins and give everyone access to that. You could totally bypass and like upgrade your banking system. just like that. But no, it's Bitcoin instead. Well, it'll be an interesting exploration as to whether like, hey, what about WBT on an arbitram roll-up, right? Like, is that Bitcoin?

Starting point is 00:53:52 It is, right? I think it's Bitcoin. You know, count it. Like, why wouldn't we count that? And so maybe that is, if that conversation happens, I will be tuning into that. I do want to cross some T's and dot some eyes. Ryan, if you go to the next page, just to be accurate reporters.

Starting point is 00:54:11 Let's see. Are we reporters? Right now we are. Article 12, those who, by evident and notorious fact, do not have access to the technologies that allow them to carry out transactions in Bitcoin are excluded from the obligation express in Article 7, right? So if you are an individual in El Salvador and you don't have the means to accept Bitcoin, you don't, you aren't forced to accept Bitcoin.

Starting point is 00:54:32 So that's a nice clause. If I was just super nitpicky, I would say, like, like don't write a coercion law and then write an exception. Just don't write the coercion law. Yeah, in the first place. In the first place. But again, the argument is that's what legal tender laws are. That's what else is the state going to do.

Starting point is 00:54:51 That's also true. Is the state going to put out a press release that just says, hey, please everyone adopt Bitcoin? No, they're going to be like, hey, this is now legal tender and you have to if you can. There's an article that is called, I'm not going to, I'm going to butcher his name, But Nieb-Bukle's power grab in El Salvador, if you look into the history of this man, he's not necessarily the best representative of a leader. This picture doesn't look great. It is, yeah, that, yeah, right.

Starting point is 00:55:19 And so apparently he, readers need to fact check me on this, but there was, there was a bill that was going through Congress and it was he wanted it and it was losing and he threw in the military and forced Congress to vote for this bill. I'm just coming to like get into what El Salvador history is. I think we should be cautious and we should all as a community and as an industry research who this person is. And that's basically me telling me this because I need to read more to fully understand this. I just want people to kind of pump the brakes before we put our full weight and steam behind El Salvador. Well, this is the thing, David. It's just like this is where I get a little worried, I would say, about where we're going with things. Is it the case?

Starting point is 00:56:15 Sometimes it feels the case that the crypto community, and I'll narrow in on the Bitcoin community for a minute, they're happy to accept anybody that pumps their bags and gets them to the end state of hyper-bitcoinization. Right? So, like, part of me wonders if, like, despots like Kim Jong-un adopted Bitcoin, if they, like, wouldn't be celebrating that or if factions wouldn't be celebrating that, right? Like, I think that there are principles that are in values that are much deeper, right? And this goes back to maybe our next conversation about the Bitcoin conference and kind of your experience there and what you saw there. But there were panels.

Starting point is 00:57:00 about toxic Bitcoin maximalism. And how it's good. The argument was that it was good. There was the clip that I saw where somebody said, if you're against toxic Bitcoin maximalism, you're against freedom, followed by cheers from the audience. First, if you're against toxic maximalism, you're against Bitcoin. And if you're against Bitcoin, therefore you're against freedom.

Starting point is 00:57:20 Ah, it's that link. It's that bridge, right? So this is what... Bitcoin is fundamentally good, and it doesn't matter who accepts it because the means to an end. It's so incredibly good that it doesn't matter how it gets adopted. See, that is so concerning to me, right? Because, like, there's another layer beneath Bitcoin, which is the values layer.

Starting point is 00:57:42 Right. And that is the thing that if you're going to be maximalist about something, you should be maximalist about values that you really care about. To the extent they're instantiated in Bitcoin, okay. But to the extent that they're not, don't be a Bitcoin supporter. Right? Isn't that why we're here? I feel like there's some loss of plot going on here.

Starting point is 00:58:02 I'm not saying, again, this is like, this is good news for crypto legitimacy. It's absolutely historic, but this is also the reason personally I feel cautious and not super excited. I'm not completely ready to throw my weight behind this. Again, I think the legacy of this story will be a massive acid test for Bitcoin. Is the Lightning Network real? Can it be used? Do people of a third world country actually want Bitcoin? We're about to get some really important answers to really important questions. There was a, wasn't there like a meeting, a chat? Where was the chat with like the actual president of El Salvador? On Twitter Spelippus? Yeah. It was on Twitter Spaces. Yeah. So Nick Carter just spun up at Twitter Spaces as he does, normal times. And the L.Selvarez.

Starting point is 00:58:55 Salvadorian president showed up, the guy promoting this bill, the guy with the Bitcoin laser rise. And so the other through line here, this is such, this, the story has so many layers, is ultimately it got out that the El Salvadorian president was in there. And he was in there because he was in Congress at the time that the bill was being voted on. And when it came time for the bill to get, it was approved almost overwhelmingly. I don't know the numbers, but it was like three or four to one yeses versus knows. And he put the, he put his, he put his, phone up to the audience applause of the applause of the bill getting passed, which is really cool.

Starting point is 00:59:32 And you know how many- This is on Twitter spaces? This is on Twitter spaces. And you know how many people were in Twitter spaces at the peak? No. Over 20,000. And NLW had a really good take about this, is that this event, this monumental event was broadcasted on Twitter spaces directly.

Starting point is 00:59:47 I was listening in on this. I was there. I was a part of the 20,000 people listening to history. and the reporters that were also in there reported on it the next day. But the people that were already in Twitter spaces, they already knew everything that the reporters were reporting on because they were there. It's a huge democratizing news event because it happened in Twitter spaces.

Starting point is 01:00:06 Well, that's cool. It's really cool. Another layer to that, though, which is interesting, is like there's no nation state diplomats that are negotiating this, right? So, like, you'd expect the dollarization of El Salvador or it might have representatives from the U.S. that are cheering this on or negotiating with El Salvador and its government. But here you've got like Bitcoin or Twitter influencers who are almost like the ambassadors. Right. Diplomats. Of Bitcoin interacting with the leader of a nation state,

Starting point is 01:00:43 that's bizarre and wild too. And there's so many more things to talk about, right? Anthony Pompliano reached out when he had his time in the Twitter space and said, hey, Mr. El Salvadorian president, how can the Bitcoin community help you? Right? Like, how can we help you? We want to help you. Obviously, Bitcoiners want to help you. And the other topic of conversation is volcano mining inside of El Salvador.

Starting point is 01:01:06 They have a volcano that spits out heat. And so they use that for steam energy. And so now we can, you can press command minus a few times, Ryan. I think that will help scale out that video. So yeah, there you go. And so El Salvador could potentially mine Bitcoin with free energy from the volcano mine, which is really going to the conversation of like not only is Bitcoin green, but it actually allows for more energy extraction.

Starting point is 01:01:31 This is exactly the Bitcoin or narrative that they've been talking about. David, I feel like I want to let this one settle before I figure out how I feel about it. But we're going to have Nick Carter on State of the Nation next Tuesday and get a digest from him. And I think that's going to be a really interesting conversation. So that's next Tuesday. I think is it regular state of the nation time? 11 a.m. PST, 2 p.m. ESD. We're going to live stream that.

Starting point is 01:01:59 So if you're interested in this story, and Nick's take, who's been on the ground from Bay 1. He started the Twitter space. He started the Twitter space. The Bitcoiners take on this and probably the bullish case for this, then listen into that conversation too. Wow, a lot. But look, El Salvador is huge news.

Starting point is 01:02:15 It's historic, guys. This is Bitcoin's biggest opportunity ever, and if it doesn't fuck it up, a lot of, sorry, sorry for the effort, if it doesn't F it up, it could, this could be the moment where Bitcoin really breaks out and fulfills what Bitcoiners, like, illustrate as its manifest destiny. Absolutely. All right. In other news. Back to NFTs.

Starting point is 01:02:39 Now NFTs. NFTs are coming to Ave. This is kind of cool. This is from Metaversal. William Pister from Metaversal this week. week. All lies on AVE. Why? Because Stani said this, NFT as collateral is coming to AVE. Why is this super important? I think it's less important for the people art and more important because every uniswap pool that we are talking about, David, not actually in ERC20. It's an NFT. And the reason for that

Starting point is 01:03:09 is these pools can be kind of unique and these pools can be sort of different. So if you're going to make that NFT and those liquidity pools composable and super fluid, as we did previously in U-Swap v2, you have to have in your protocol some support for NFTs as collateral. It looks like Avey is working on that right now. It's coming. Stani didn't mention a date, didn't mention the how-to, but like this team delivers, so it's coming. I do want to nitpick here about that Stani tweet that we see on screen where he says

Starting point is 01:03:41 NFT as collateral coming to Avey. If you read that, you're thinking like wearable art or super rare art, not uniswop NFTs. Because Uniswap NFTs are actually just a wrapper around ERC 20 tokens like Ether or W Ether and like dye and stuff like that. But it's also infrastructure for future NFTs. These are the low-hanging fruit NFTs, the safe NFTs. But once you get these NFTs in there, we can now start to talk about like more complex, more like illiquid NFTs. Yeah, and everyone's hungry for those uniswob LP NFTs for sure. All right.

Starting point is 01:04:19 Well, let's talk about another story, which is just a weird, like strange story, kind of Bitcoin related, certainly crypto related and also regulatory related. And that is the ransomware attacks. Now, the media's been calling these Bitcoin ransomware attacks. But like, the only reason they're calling them Bitcoin ransomware attacks is because the attackers are asking for Bitcoin as payment. So it's kind of fair, but it does put Bitcoin in a very negative light from a media perspective. And I think there's probably two that we should talk about.

Starting point is 01:04:52 Like the first was the big pipeline hack that happened. This affected a lot of people on the East Coast. So like I know people in the East Coast, like locally for me, I couldn't actually get gas for a few days, David. You're telling me that the crypto world impacted your real world life? Well, kind of. I mean, the hackers, they hacked the. pipeline, right? And they were like, I guess if somebody paid them in Bitcoin earlier, then I could have gasoline quicker. I'm not sure. But maybe it affected my real, like, so

Starting point is 01:05:20 anyway, this was a big thing, a big event that happened in the US. And apparently the FBI has recovered some of that Bitcoin as of this week from the hack. So the pipeline people actually paid the hackers, the hackers received the Bitcoin, then they exited the system, the pipeline was restored, and now the FBI has somehow tracked down the Bitcoin has actually gotten the proceeds of the payment back. How did they do that? What's the story here? Yeah, so the TLDR that I've heard, and I didn't look too close into the story, is that the hackers were competent hackers, but were Bitcoin novices. And apparently they just used an exchange address to put their Bitcoin's in. And so the exchange was like, oh, thank you. We're going to confiscate these.

Starting point is 01:06:11 They forgot about the whole not your keys, not your crypto thing. So weird, though, right? So like the other, I guess, weird part of the story is how can ransomware hackers be so competent, like hacking into a major U.S. pipeline, yet forget about their private keys and give that to a third-party custodian? Whoops. Whoops. Whoops. Like, does it seem It does seem weird to me. It does seem weird. It does seem weird. This is one of those stories that is really complex, and I'm just going to wait for, like, the truth to come out over time. Me too.

Starting point is 01:06:45 But the conspiracy theory is that, well, maybe some of this was done to make cryptocurrency look bad, question mark. The U.S. would never do such a thing. We don't do, like, behind-the-scenes siops like this. No, the CIA, super clean agency. Meat Company was hacked, too. Bitcoin ransomware attacks. I don't know much about this story, but this was last week too. They paid $11 million in Bitcoin to get them to exit their system.

Starting point is 01:07:15 JBS Holdings Meat Company. Basically, the TLDR is that there's been two Bitcoin ransomware attacks in the last two weeks, and that's bad in of itself. And the attackers are actually getting away with it. They're being sent Bitcoin, and it's a PR disaster for Bitcoin. It is, and we'll get to that. And our industry, not just Bitcoin, our entire industry. Another week that Microstrategy, Michael Saylor, is buying Bitcoin.

Starting point is 01:07:40 This one's a special week, though. This one's a special week. Okay. Why? The numbers are big? $500 million junk bond offering, not just dollar cost averaging into Bitcoin, a big buy. And so apparently, I'm confused on the numbers, but Microsstrategy has reportedly attracted more than $1.6 billion worth of orders for its latest deal to purchase Bitcoin.

Starting point is 01:08:03 but then in the firm, you know, up to the raise from their 400 million advertisement, initial, like, you know, seeking of investment up to 500 million. I'm not sure which is the right number. Anyways, micro strategy, again, doing a bond offering to buy Bitcoin. But micro strategy, Michael Saylor, is just taking every bond it can get and plugging that into Bitcoin purchases. Which really goes to Ray Dalio's conversation. It's like, why are people buying bonds instead of Bitcoin?

Starting point is 01:08:30 Why are they going through micro strategy to do that? There is an answer to this question, and I got that answer from listening to the Castle Island podcast a couple months ago. And so that answer is out there. Apparently is complex, and I'm not prepared to this. Say why. All right. Michael Saylor buying Bitcoin is the headline, though. We talked a little bit about the 2020 Bitcoin conference that you're at.

Starting point is 01:08:55 David, anything to add on that? Yeah. It was the world's biggest event since the story. Super Bowl, which is crazy, largely because COVID, you know, killed all the events. 12,000 people went to the Bitcoin 2021 conference. 30,000 people went to Miami. And this was very much like a tale of two communities because if you were a Bitcoiner and you went to the Bitcoin conference, you were like immensely satisfied

Starting point is 01:09:20 with what happened, right? Like it was a straight up, like first and foremost, we call it a conference. No, it's a festival. It's a festival of a Bitcoin culture. Like Burning Man is. Like a little bit, right? Like, I mean, there were talks and panels and stuff like that, very conferencing. But like, it was more of a festival.

Starting point is 01:09:38 It was a celebration of Bitcoin culture. The Bitcoin art there was awesome. I saw it myself. I was there. It's my favorite part about the Bitcoin conference. The Bitcoin art is deep. It has layers. It's complex.

Starting point is 01:09:51 And so, like, I don't want to, you know, we're kind of known in the world, in the bankless world, that's kind of waiting towards Ethereum. But Bitcoin art is winning hands down. Like it's complex, it's nuanced, it's delicate. Oh my God, it's so cool. And all the Bitcoiners were very happy with what happened at the conference. Now, the Ethereum people saw the same thing, the same reality, and came up with a different story.

Starting point is 01:10:16 They saw toxic maximalism. They saw, you know, bag, you know, pumping the Bitcoin bags. You know, and, you know, Anthony Sizano's tweeting out the real winner of Bitcoin, 2021 was Ethereum. All the Ethereum people agreed with it. It's interesting to see this one shared reality having two completely different interpretations by like depending on what community you're in. Yeah, and I really enjoyed your opening note, David, this week on bank lists on Monday, which kind of went through your on the ground experience with it. Yeah, just super interesting. I guess, you know, Ethereum conferences, I feel so much different. Or,

Starting point is 01:10:57 look so much different. And like maybe part of this is the difference between a like Ethereum conferences are much more geeky and technical and like building focus. There is some culture, but it's like not as much. And I wonder some of the differences. It's a project that's still building versus like what really do you talk about Bitcoin from a technical perspective? Like Taproot and Lightning. But like the project's mostly done. So but with Ethereum, you're talking about like roll-ups and sharding and like what's you know the next advance in cryptography and all of these things so i wonder if part of this is the uh the life cycle of the project is just after a project is ossified maybe it just turns into like a a festival type of environment

Starting point is 01:11:42 and cultural type environment rather than a builder's environment so i went through the the section of the bitcoin conference that had all like the booths right like you know conferences they sell booths to vendors and all the vendors are like custodial wallets, Bitcoin banks, you know, uh, all, all the things that like are centralized and just don't really intrinsically interest interest me. So I was walking around. It's like, oh yeah, you're, you're, you're a centralized exchange. You're a centralized custodial wallet, you know, blah, blah, blah, blah. And like, where, like, for me, I just felt like where, where the, where are the, defy app guys? Where's the DFI swap? Where's the unicorn? Like the, the, the,

Starting point is 01:12:18 the cultures is extremely different. Um, but at the end of the day, 12,000 Bitcoiners went to the Bitcoin Conference, biggest event in the world in the last year since the Super Bowl. And like the other takeaway is that now that COVID's over, people want to have fun. People want to have fun, especially since asset prices, like pumped. And Bitcoiners also, the other takeaway is that Bitcoiners are also like very, very like anti-COVID, as in like they're just ready to shed the whole COVID laws. And so it's no surprise that Bitcoin had the first big event in the world since the start, lockdown of COVID. Christian Corolla's, my POV crypto podcast co-hosts,

Starting point is 01:12:56 says Bitcoiners are on the forefront of freedom, and you got to hand it to them. If you are frustrated by COVID laws, the Bitcoin community was the first one to put their foot down and saying, we're having a 12,000 person event in Miami. And I was there. It felt like COVID wasn't a thing. And I have my vaccine, so it's chill. But like very much felt like, oh, yeah, I completely forgot about COVID. And now that I've come back from that and I'm in Seattle, I'm like still in that mindset. It's like, I've got my vaccine two weeks out. Like, why are we still doing this mask thing?

Starting point is 01:13:28 Granted, I'm going to be patient, wear my mask when I'm asked, but still, that's my other take. Well, there's some culture clash here. And I think that maybe comes in with what's going on in regulatory, which we should talk about. So this is a super interesting clip. This is just from, I guess, Wednesday. And I think I want to play this. So this is Senator Elizabeth Warren, who I think is obviously read for president. is kind of a big deal in the Democratic Party.

Starting point is 01:13:53 And I want to play what she says. She's commenting on Bitcoin here. It's about we've talked a lot today about the dangers that cryptocurrencies posed to our economy. We've talked about the rip-offs, the instability, the extent to which they're used to help criminals with cyber attacks like the attack on colonial pipeline and JBS. But there's another piece to the adverse environmental impact. of the computing activity used to mint many of these digital currencies in the first place. I'm going to pause it there, David.

Starting point is 01:14:30 But she goes on. So you heard about that. So she mentioned the volatility. She mentioned the hacks. She mentioned the scam. She mentioned ransomware. And she also mentioned the energy issue with Bitcoin. The rest of this clip is all about the energy issue, energy consumption issue with Bitcoin.

Starting point is 01:14:49 This is the first time I've seen a high-profile senator go on the offensive in this way against cryptocurrency. Now, it is, I think, mostly constrained to environmentally wasteful cryptocurrencies. But I mean, Bitcoin and proof of work and Ethereum is still on proof of work. That is the bulk of the money layer of this industry right now. So this is almost all active cryptocurrencies. And there wasn't a lot of nuance when I went through the rest of this video. Like there wasn't a lot of like, yes, there's volatility. Yes, there are rug pulls and scams.

Starting point is 01:15:28 Yes, there are, you know, crazy prices. But like, let's talk about the freedom this brings to a population. Let's talk about decentralized finance. Let's talk about all the good thing, Elizabeth. Say one good thing. Right? But it wasn't. So what's interesting here is kind of the observation that,

Starting point is 01:15:47 You have a large group that is both on the right and the left in the U.S., I think, that are kind of the group that wants more authority, more control, more governmental control over crypto in general. And this spans both sides of the aisle, I think. Then you also have a group that is kind of demonizing the energy consumption of cryptocurrencies right now. And I'm somewhat worried, David, that these two groups come together, create a wedge issue. of this thing, form a coalition, and like start to attack the industry. Right. We've always talked about the final boss. It's always been out on the horizon.

Starting point is 01:16:26 Now we've got a country adopting cryptocurrency. Are things about to go a little faster from here on out? What are your thoughts? Yeah, I'm really worried about like the woke cancel culture coming after crypto, right? Because they'll go, the whole theory about cancel culture is they'll try and cancel anything for clout. and there's always kind of this like jostling for clout and it's like all right who can cancel what and for what reasons and if you can justify your cancellation of something then you get clout in woke culture and cancel culture and so like oh yeah environmentally wasteful NFTs are you know their NFTs are killing the environment right like they consume all this consumption bitcoin is killing the environment the thing is like Elizabeth Warren got all of it wrong like and I'm not saying that bitcoin isn't wasteful but she was saying

Starting point is 01:17:16 that one Bitcoin transaction uses as much energy as 54 house or one household uses in 54 days, which is just abjectly the wrong way to think about it. Yes, you can, you can critique Bitcoin on its energy consumption, but it's not on a per transactional basis. So you're just showing that you don't know what you're talking about. Nick Carter had a really good tweet where he just went through all of the things that Elizabeth Warren was just criticizing, right? He called it Knives out.

Starting point is 01:17:44 Knives out, right? Yeah. Bitcoin energy use is a disaster for our planet. Bitcoin is disproportionately used for illicit purposes, even though we know that that is absolutely not true. I'm pretty sure it's less than 1%. Bitcoin is unproductive and has no utility. The only people that think that Bitcoin is unproductive and has no utility are people

Starting point is 01:18:03 that don't like Bitcoin. If you like Bitcoin, then you think it has productivity and utility. And like this is my problem with, I like Elizabeth Warren. She's generally a good senator. I'm a left-leaning individual. this is an example of why Bitcoinsers and Libertarians at large get pissed off by governments because they're coming into this industry without any knowledge about it and saying what this industry needs to do from their like bird's eye like you know, throne room.

Starting point is 01:18:30 Because David, I think that they're not looking to actually understand the industry. They're looking for like, you called it clout, but like their political wins is what they're looking for. And the commentary, they had a common, I can't remember the individual's name, but he was like, Yeah, you know what would be great is if we ban with other world countries and we make Bitcoin to Fiat transactions illegal, just like across the board. And that way, all the people who are doing illegal activity have no way to convert it to dollars. Like just the assumption that everyone who holds Bitcoin or cryptocurrency is doing illegal activity.

Starting point is 01:19:08 And like in that video too, Elizabeth Warren pitched it as like legislation against energy consuming cryptocurrencies is a way we can have a win for the green. Got to protect the children. But we have a win for the green agenda, but she said it costs us nothing. Why? It's because it's a whole bunch of criminals using in this industry. It's like, it's like they see it as a win for green and political clout and agenda. Right.

Starting point is 01:19:40 And there's no cost to it because it's not affecting any of. if they're constituent, like any of the interest groups or constituents that they care about, right? Yeah. And again, like, we could play the same clip. It could be a different issue and it could come from the internet. Like, yeah, exactly. Terrorist financing. Like, it could come from another place.

Starting point is 01:20:04 But what's interesting, I think, is following the uninformed takes on crypto. And I tweeted this out yesterday, David. It's like, is there just one individual in the House, in either, you know, the Senate or the House, one representative who has ever used Defi? Like, can we just find one? Right? I'm going to talk to that person. Closest person is Andrew Yang. He's not, and he's, what is he?

Starting point is 01:20:35 He's running for mayor of New York. Running for mayor of New York. But also previously ran for president. So a little bit worried, David, in the short run, crypto doesn't have a lot of allies. we'll have to see how this plays out. If we ever get Andrew Yang on the podcast, we're going to make him make a transaction on you to swap. It has to be something.

Starting point is 01:20:54 He has to buy something worthwhile, though. It'd be something stupid. Andrew Yang, if you're listening to this. Yeah. All right. Knives out. We'll see what happens. Not great news.

Starting point is 01:21:06 Ryan, let's do a very quick drive-by on the rest of the news because we are taking a lot of time. How about this one? Oh, my God. Okay. IRS seeks millions. in fresh funding to expand crypto tax enforcement and hire outside experts. The IRS knows that there is an absolute mountain of money waiting for them in the crypto world,

Starting point is 01:21:26 like capital gains tax, especially in the short term, all in crypto. And so IRS is making some moves to make sure that they get their paycheck. The next one. CFT Commissioner criticizes defyed, decries, lack of intermediaries. The last CFTC Commissioner was our friend. This one may not be such a crypto advocate, so we'll see what happens there. Consumer U.S. inflation rates hits 5% for the last 12 months, 5% inflation for the last 12 months ending in May, which is a high number. Meanwhile, Amazon doing okay, and they are looking for defy experience in job postings for a head of blockchain.

Starting point is 01:22:11 Big tech entering blockchain entering crypto is probably a theme. BlockFi raising $500 million in a Series E funding round at a pre-valuation, pre-money valuation of $4.75 billion. That's a big number. Cryptobanks crushing it. As is Ledger, the hardware wallet, they landed an additional $380 million in a Series C round. Solana Labs raises $314 million in a new funding round led by A16Z and Polychain Capital. Solana's got some attention lately.

Starting point is 01:22:43 A decent amount of attention. It definitely has a decent treasury as well. So if you can buy your way into legitimacy, Solana is definitely able to do that with its treasury. I think buying your way into legitimacy's an oxymoron. Didn't work for Eos. We'll see. Coinbase partnering with a 401k advisor to offer crypto investments for retirement accounts. This is a much needed gap. You can do this for the self-directed IRA 401K. We've talked about this on bankless. Coinbase looks like they're trying to come up with the easy button, probably a good move. That is it for our news. We're going to get to the sponsors and we'll be back with some takes. Synthetics is Ethereum's decentralized derivatives liquidity

Starting point is 01:23:25 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, S Oil, or S-DFI. Because Quinta 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.

Starting point is 01:24:08 Synthetics isn't just for traders. Developers can build on synthetics to access the infinite liquidity offered by synthetic assets. Or investors can stake collateral to the protocol and earn fees that the protocol collects. If you're a trader and you're looking for a trading platform not found in the legacy world, check out quenta.io. If you're a developer or you just want to earn yield on your collateral, go to www.synthetics.io, where you can stake your SNX or ETH and earn fees from synthetics. AVE is a borrowing and lending protocol on Ethereum and just recently released AVE version 2,

Starting point is 01:24:45 which has a ton of cool new features that makes using AVE even more powerful. With AVE, you can leverage the full power of defy money Legos, yield, and composability all in one application. On AVE, there are a ton of assets that you can deposit in order to gain yield, and all of those same assets can also be borrowed from the protocol if you have deposited collateral. Here you can see me getting a 200 USDC loan against my portfolio of a number of different Defi 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.

Starting point is 01:25:24 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 Avey. Avey does all of this for you all in one seamless transaction, So you don't have to repay loans in order to change the collateral you have backing them. Check out the power of AVE at AVE.com. That's AAVE.com. All right, guys, we are back with some hot takes. Then we're going to get to the meme of the week.

Starting point is 01:25:51 The first one is from Joe Wisenthall. This is based on an article, and you really enjoyed this article. What's Joe saying in this tweet and in the article, David? Yeah, the article is titled, There's a hot new vision for crypto, and it's wildly different than Bitcoin. Joe Weisandthel, host of Oddlots podcast, very popular podcast in the Tradfai space, and he's also on TV all of the time. Bloomberg. Sorry?

Starting point is 01:26:14 Bloomberg, primarily. Yes, yeah, importantly, Bloomberg. Yeah, not just TV. But this article is all about defy. Joe Weisandthel playing around in defy and accurately, I think, reporting on what makes defy cool, unique and special, and importantly, different from Bitcoin. And so I really just want to reread the headline because it's really important. There's a hot new vision for crypto and it's wildly different than Bitcoin from Bitcoin, right? And this is kind of what the hammer we've been trying to be on bank lists.

Starting point is 01:26:45 It's like defy a decentralized app layer is a brand new banking layer and does all the cool new things that Bitcoin doesn't really get to talk about or do. And Joe Wisenthal reporting on this, a very like prominent thought leader on Bloomberg with his own podcast. writing a very, very in-depth article talking positively about defy. He said it's why it's time to stop talking about this space as a monolith. I'm glad he said that too. And he's used terms in his tweets before like traditional finance being eth-pilled, which is super interesting. I think what he's talking about is mainstreaming defy to traditional finance.

Starting point is 01:27:22 And if you have been paying attention to Joe Wisenthal on Twitter, like he's been engaging with defy folks talking to Hayden Adams, talking to defy dad. I've had some back and forth messages with him. I requested him to come on the podcast and he punted, but he also said he was interested. So he said maybe later. Yeah, very cool.

Starting point is 01:27:42 This is another take. This is one from me. I'll just read it. It's easier for a 14-year-old to learn Medamask than it is to open up a bank account. Gen Z will be the bankless generation. This really just hit me. It's kind of, I guess, a shower thought. I was just thinking about like,

Starting point is 01:28:00 kids, young kids in like their adoption of crypto. I mean, they've grown up in this digital world. And if you're talking to someone who's like 18 or under, Metamask is so much more, I guess, intuitive to them versus going to a bank branch, presenting your information and registering to get a bank account. And I think this is really going to be the case. It's like bank accounts become obsolete for these newer, you know,

Starting point is 01:28:30 know, digital generations, right? It's like, yeah, but if I open up a bank account, can I put my game items in them? Right? Like, can I put my loot in it? Like, well, okay, can I put this awesome art, right? Like all of the clout, the NFT clout, and I can't put that in the bank account. Like, most of their value is going to be external to the traditional financial system. And things like Metamask are just going to be super intuitive. to them. So, yeah, I do think, like, at some level, um, millennials, Gen X and others, we're, like, we're kind of building this system, but sometime we're going to pass the torch. And Gen Z is just going to, it's going to be party time. They're going to go wild with it.

Starting point is 01:29:16 They're going to, like, finish the entire experiment and, like, be born into it in a way that I think the millennial generation was born into the internet. So that was the take. I'm excited about that. That's a really good take. It's worldwide, too, man. I just realized, like, what does Wells Fargo do other than hold dollars for me. Can I even hold a different currency in there? Right? I don't even know. Yeah. I mean, it's not doing much. I can hold a big trillion currencies in my Ethereum account. It's not too much. This is a really good take from Brantley Milligan of ENS. Brandy a while ago had this thread about one of the coolest things that crypto and Ethereum has done is put a private key in the hands of so many people. And so he follows up that

Starting point is 01:29:53 thread with this thread where he goes, the Ethereum community has accidentally solved a major problem of the internet. Single sign on. Quote, sign on with Ethereum, quote, is the future login for every app on the internet, crypto-related or not? What he's saying is that instead of using your email and password, you can use your private key to sign into a website because all website needs to do is to log who you are as a unique identifiable user, and that is the purpose of a private key. And so in the same way that you sign a message to log into a defy app or you log into Metamass with your ledger, all you have to have to.

Starting point is 01:30:29 have to do is sign a message and to prove that you have a specific public address and all of a sudden the website can log you as a unique identifiable user and you don't have to give up your email or your password or your date of birth or anything. And so this has always been a terrible part of the web two world is you got to use an email and an email is extremely identifiable. Private keys are a much better way to sign on to websites. And again, this is not even, you are not broadcasting a transaction to Ethereum. This is just signing a message. So it's using public private key cryptography as a tool that's independent from cryptocurrency or blockchains or whatever. And think about like all of our password management tools. Like how many username and passwords

Starting point is 01:31:11 do you have? Infinite. Like God, it's just getting unmanageable. I might have hundreds at this point, David. Like just because you don't ever disconnect them either. You don't ever discontinue them. So this is all of those compact into one login. All right, David, you had a take here too. I'm going to read it out. Bitcoin is physical. Ethereum is digital. Bitcoin, physical, Ethereum, digital.

Starting point is 01:31:36 What do you mean by this? Yeah, so this is something I've been showing on for a while and definitely came about with this whole El Salvadorian. Bitcoin is legal tender for our country conversation. Bitcoin has a strong interest in being very, very instantiated in the physical world. It loves sucking energy. out of the world because it wants to be a part of the world itself. It wants to be part of the physical world. It needs physical energy to power this physical Bitcoin proof of work mining operation.

Starting point is 01:32:05 It also wants to be the legal tender for physical meat space countries, right? Bitcoin wants to be a part of the physical world. And that's one of the big cultural divides between Bitcoiners and Ethereums. Bitcoiners celebrate a nation state, a meat space nation state, adopting Bitcoin as a currency. Ethereum and Ethereum, we want everything to be. digital. Proof of stake is the most digital form of security consensus. We don't want ether to be the national currency for any country. We want people to be able to choose their preferred digital token or ether as a result of their own choice. And so to me, like Ethereum will never go after some sort of nation state national currency. It's the currency of the internet. It's the currency of

Starting point is 01:32:48 the digital world. It allows the bankless nation to choose their own currency and max maximizing choice. And Bitcoiners always all talk about like freedom from oppression, freedom from coercion. We talked about this earlier in the conversation. But to me, the Ethereum app player is the manifestation of the most choice possible. And what Defi is. We talk about Defi as a crucible of competition that is always best for the user. And this online virtual network, this this defy native, this internet native network is the most, you know, this most digital money system possible. And these differences in communities, I think, are really, really interesting. And personally, I think the digital world is going to 10x in growth than the physical world, right?

Starting point is 01:33:33 We were talking to, Ryan, you and I were having a private conversation with someone who said something on the lines when they were an internet entrepreneur. And they said in the 90s that the physical world is really, really big and the internet world is really, really small. And so I want to be where people are going to flow to. People are going to flow into the digital world. And same thing with Ethereum. The physical world is already really big. And people are going to flow into digital assets and digital money. And Ethereum is the instantiation of digital first money.

Starting point is 01:34:06 Yeah, I do think that's a good take. I think could add to that, like Bitcoin is about the existing institutions, right? Like that's what you mean by sort of physical. Whereas Ethereum is more about building these new institutions. I think that's another great way to look at it. Totally. Yeah, super cool. David, we've got to get to this listener question.

Starting point is 01:34:26 I'm just going to read it out. So this is a comment on the debriefs that we do at the end of each of our podcast for premium subscribers. Appreciate the debrief. One thing my friend was telling me is that it could be a big sell-off when ETH staking of 32-Eth. People get all their ETH back. Do you think that will be a thing or will most hold on since it's a triple point asset? David, what do you think about that? Yeah, right.

Starting point is 01:34:51 So he's asking Amal Amal FI-22. Thanks for the question. He's saying that like when people started putting their money in their ether into the deposit contract, ether was like $4 to $700. Now it's $2,500. And it's a one-way bridge. It's one-way bridge, right? Like you're stuck there until like the merge happens. So he's asking, he or she is asking, well, when this merge happens and people get all their eth back, do you think there's going to be a big sell off because all these people made all these gains and they haven't been able to sell because it's been locked? And so the way proof of stake works is that people that are the most bullish on ether are always the first to stake. People that are intrinsically long ether, the asset, always want to be staking. So yes, it's very plausible that people want to take some gains off the table, you know, make their personal lives for better and for the people around them. But also, they're already the people that are the most bullish on ether, the asset. That's why they're staking. and also when the merge does happen, staking yields go from like 8 to 9% where it is right now, and it goes up to 20 to 25% depending on gas fees because you get the transaction fees and the MEV fees.

Starting point is 01:36:05 And so yields are actually going to go up when the merge happens. And so we have the most bullish people who have staked all the ETH, and they're going to be able to get even more yields than they're already getting. And so there's definitely some very significant arguments as to why there will not be a big sell-off when the merge happens. I think I pretty much buy those arguments. I don't have anything to add. I think that's how it's probably going to play out. Guys, if you have a question, find a way to get it to us, either Twitter or on one of the bankless newsletters.

Starting point is 01:36:36 We will include some more of these in roll-ups moving forward. David, let's get to what we are excited about. What are you excited about this week? I'm really excited about this article that came out on the bankless newsletter by a brand new bankless contributor, Ben, Giov, Ben, I don't know how to pronounce your last name. Sorry. And he's somebody I connected with because he's actually the president of Chapman University Crypto Club, which is my former college. And he wrote this fantastic piece earlier about all about Polygon and it was great. And so I challenged him to do a write up on Vitalik's proposal that the UniT token becomes an Oracle token. In addition to being a governance token over the Uniswap. exchange, Vitalik did this write-up about how Uni could be a token to make an off-chain price Oracle for price fees into Defi. And that resembles an entirely new value capture mechanism for the Uni-token if the Uniswop governance decides to go down this path. And so Ben did a very fantastic job tackling a very hard subject and talked about what this Oracle could do, how it's

Starting point is 01:37:38 different or the same versus chain link, how it helps Uni capture value and what are the similar and differences with other defy protocols such as UMA. So Ben, excited to have you on the Bankless Riders Squad. Nice drop on the article. Ryan, the other thing I'm excited about is the Nick Carter State of the Nation. We're going to ask all of the questions about El Salvador. And so Bankless listeners, if you want those questions, let us know.

Starting point is 01:37:59 And then for the third thing, Ryan, I'm triple dipping is tomorrow morning. I pack up all my stuff and I leave to San Diego. I'm going to be a San Diego by this time next week. All right, guys. Okay, so everyone say bye-bye to David's background because we will never see this again. You should take a screenshot or something so we could do a green screen.

Starting point is 01:38:18 It's very, very different than what you're used to. But here it is. I think some of them have to stay. I was sad to hear that. I think they're all coming, but we'll stay. Stay tuned for that. We're looking forward to seeing what you have set up in San Diego, man. That's going to be cool.

Starting point is 01:38:33 If you are our bankless Dow member, let's meet up in San Diego. Ryan, what are you excited about? Look, man, I guess it's all bankless content this week because I was super. excited about this panel that we did on Wednesday with three the biggest like defy brains in the space. I feel like one was Van Spencer, Spencer Noon and Santiago Santos. And that panel is just super cool. You guys should watch it from beginning to end. But the last question really resonated with me.

Starting point is 01:39:02 And we actually didn't have that question on the notes of the agenda. So you kind of like popped it up and surprised me with it. But it was like the question was how has defy changed your life? And the answers that these panelists gave were super cool. I think one of them said, first of all, it's an unbelievable investment opportunity that I would have never had access to. Why?

Starting point is 01:39:24 Because I'm not plugged into those VC circles, kind of the Silicon Valley circles, the Wall Street circles that you need to be. And I kind of discovered this for myself. But all of them were united in these two things, too. That's like, number one, the mission of DFI excited them. creating a bankless money system for the world. So it's great to see investors who are mission inspired.

Starting point is 01:39:47 They also reflected on what a privilege it is to work in DFI. Like, DFI doesn't discriminate. Santiago talked about hiring a 18-year-old at Carfine. An 18-year-old Anon. Completely anonymous. And it's because just this person was the best at what they did. And again, didn't care. This person's age didn't care what degree this person had.

Starting point is 01:40:18 I love this about defy that is completely open and accessible to the world. If you have a hunger, you are talented, you want to learn this stuff, you can get involved, and you can rise pretty quickly. So there's just so much opportunity at this early stage in the industry. Defi's is such a cool mission. And man, this piece of content was really awesome. So check that out, bankless YouTube. Check it out on the podcast.

Starting point is 01:40:45 I think we called it the current state of Defi a panel with those three gentlemen. And the future of panels out of the bankless YouTube is going to be hot. We already are planning our next one. Yeah, with Cooper Turley. And it's going to be all about the creator economy. And so stay tuned for that one. I think that will come at the end of this month. David, it's time for meme of the week.

Starting point is 01:41:08 Favorite time. Finally. The whole point of the weekly roll up. Finally, we're here. What is this? This is it looks like a tweet from Chase. This is a real tweet from Chase Bank. And it's a hypothetical conversation between you and your bank account.

Starting point is 01:41:21 And you, you say, why is my balance so low? And the bank account says, make coffee at home. Bank account says, eat the food that's already in the fridge. Bank account says, you don't need a cab. It's only three blocks. You, you say, I guess we'll never know why my balance is so low. And the bank account says, seriously? Question mark?

Starting point is 01:41:38 Hashtag Monday motivation. And then strong juxtaposition with another tweet from public citizen, the whistleblower community, the whistleblower organization says, Bank that pays its CEO $31 million and received a $12 billion bailout after crashing our economy tells poor people to stop being so irresponsible with their money. But F you! Maybe I wanted to take a cab to three blocks. Maybe my foot hurt. Don't tell me what to do with my money. Stop bailing out banks with golden parachutes. F yourself. Yeah, I, look, what's the motivation after I read something like this? Like, my motivation is to shut down my Chase account.

Starting point is 01:42:20 Yeah, motivation to go bankless. Yeah, it's a motivation to go bankless, absolutely. That's the meme of the week, guys. We've got one more moment of Zen, so stay tuned for that. It's been great to be with you on the weekly roll-ups. Thanks a lot. Hey, what's up, what's up? What's up?

Starting point is 01:42:35 Bitcoin, Nick!

Bankless - ROLLUP: 2nd Week of June (El Salvador, Elizabeth Warren, Bitcoin FBI Ransom, Polygon & Arbitrum)

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