Bankless - ROLLUP: 3rd Week of December

Starting point is 00:00:00 David. Ryan. What are we about to do? We're about to roll it up. Let's roll it up. It's the third week of December. Happy Friday morning. This comes out every Friday morning so you can drink a cup of coffee and catch up on crypto in about 25 minutes. David, what do we do? Give us the topic list. We take five different topics and we roll it up into five different minutes each. We talk about the market. What is the market saying? We talk about releases, what got released. Then we we talk about the news, then Ryan and I share some of our takes. And finally, we finish off with what we are excited about. There is a ton of news to roll up in this week. So much happens. And so we are going to roll up a whole entire week's worth of information, inject it straight

Starting point is 00:00:59 into your brain so you can keep up the two, so you can keep up with the crazy world of crypto. Ryan, are you ready? I'm ready, man. Let's do it. Okay, let's start with the market. The question is, what is the market saying? I feel like it's saying, price go up. I think it says number go up. What a week, man. Let's start with Bitcoin. All time highs after flirting with it for, I don't know how many weeks.

Starting point is 00:01:24 It feels like four weeks. Yeah. Yep. It hit it. Tell us about it. Yeah. Interestingly enough, three years to the date that Bitcoin painted the almost 20K all time high in 2017, we broke it on December 16th three years later, cruising through the 20K mark,

Starting point is 00:01:43 all the way up to almost $24,000. In the last two days, Bitcoin has painted two, almost two candles at $2,000 each. That is crazy. The volatility's back, baby. Do you know what this means? David, I was thinking about this.

Starting point is 00:02:01 It means every single person who told you that Bitcoin would never reach all-time high again is wrong. Anyone who ever doubted Bitcoin is fundamentally proven wrong. They're wrong. Like they've been wrong. And it kills me that people give advice without any skin in the game. Naseeb Tel-Leb talks about this. And it happens all of the time. These analysts and these experts and these economists give advice without any skin in the game. And it costs them nothing when they're wrong.

Starting point is 00:02:30 Well, they were all wrong. Bitcoin came back, hit all-time highs again, and no signs of slowing down. Should we get to Ether Price? Right before we do. This feels like the starting pistol for the game. where like if all the whole like 2018, 2019 slow ramp and even the 2020 slow ramp, like the game didn't start until all time high was passed. And so like the game starts now. Like congratulations. Like we all have been talking about like, yo, the bull market's here, but we never really felt too confident about it. Now that like Bitcoin is at all time highs, you know, blasting through its previous levels, officially the bull market is on. There's no there's no other way to have a bowl market. Bull market's here. You can't interpret this.

Starting point is 00:03:13 any other way. What have we been saying? We've been saying this is 2016. Next year is 2017. We'll see how it works out. Let's talk about Eith price. Heath price go up too. Yeah, Eith number go up all the way. Eith painted a $100 day yesterday going from just under $600. I think it was like $590. And then it reached, I guess it didn't do a full $100. But then it reached a peak of like roughly $680 earlier today. And then it's taking a bit of a tumble back down to 630, a little bit off the all-time highs, but still, you know, really, really strong. Crazy.

Starting point is 00:03:51 Seems like only yesterday, David, when, in fact, it was in March of this year when ETH price was under $100. Right. It just went up $100 in a day. But within recent memory, in the last nine or 10 months, it was actually under $100. Right. Pretty crazy. ETH is actually up 370% on the year, which is super impressive.

Starting point is 00:04:12 of Bitcoin up 180% both having very good years, phenomenal years, breaking the back of the bull market, I would say. We should also talk about total locked value in Ethereum because that is up to all-time high as it looks like. Yeah, it was even higher, much higher earlier today. Earlier today, it was at $16.5 billion. It's down to $15.9 billion, but that's still much higher than the 14 billion it was at last week. Same thing with the DPI. Defi Pulse Index. Last week, it was at $101. Now it's at $1.12. Actually, as far as as as as number go up goes, that number didn't go up very much. DPI kind of lagged behind. Defi has not made the big moves that Bitcoin or Ether have. Defi, the DPI that David was talking about,

Starting point is 00:05:03 of course, if you're new, that is an index of the top defy tokens on Ethereum. Pretty insane weeks for both Bitcoin and Ether as an asset. There's also been some insane premiums in the Grayscale markets. So look at these. Of course, Grayscale, you could catch our episode of Michael Sun and Shine from Grayscale. This is a way to buy trust-type products, get some Eth exposure, get some Bitcoin exposure in your retirement account if you want to do it that way. Wow, that ETH premium. Premium is insane. 200%. So versus spot price, if you're buying ETHE in your retirement, account, you're paying over 200% more than somebody who's buying it on the Coinbase Exchange. That just shows you how much like institutional locked up demand there is for these assets.

Starting point is 00:05:51 Well, it also shows retail demand, right? Because ETHE is just like, okay, what's this Ethereum thing? How do I like access it? Where do I go to get exposure? Let me go to where I always go, which is my broker. Oh, there's this East E like trust thing that gives me exposure to the ether. I'll buy it. And then they just hit the buy button. They don't really understand what they're what they're buying. It doesn't matter, but that's where that premium comes from. The fact that people are willing to pay, basically what's going on is people are paying almost double for the price of ether for convenience, right? And so there's a lot of people that really want ether quite a lot, apparently. Yeah, absolutely. I thought Anthony Sassano had a really interesting comparison.

Starting point is 00:06:32 The last time ether price was above 500%. He goes through some numbers. $500. $500, excuse me. was, so last time it was at $500, November 29, 2017 versus today, of course, it's above $500. And unique addresses, so the increase in basically Ethereum bank accounts, these are eth addresses, 900% increase from five years ago, or from, excuse me, from three years ago when the price was $500. So he goes through some other stats. Active addresses are up 60%, 24-hour transaction count, up 80%. The fees, the revenue, on a 24-hour period of time, the demand for block space up 1,470%. Defi is up like infinite amounts from 10 million to like 15 billion.

Starting point is 00:07:24 Defi is basically invented, right? So like this paints the picture to me, David, of like an ether price of 500 November 29, 2017. It was based on unfulfilled dreams like potential. The Ethereum of today has brought a lot of these dreams to life. And it's a massive amount of, I guess, like, real world traction that we've seen, yet the same similar price point. Pretty crazy.

Starting point is 00:07:50 What's your take on that? Yeah, it's also good to remind ourselves that, like, ether is still roughly 50% off of its all-time high. Now, like, I don't really ascribe too much weight to all-time, previous, all-time high prices because of how incredibly fleeting they were. Like, Bitcoin was at, like, 19,700 for like 10 minutes before, it dropped and ether was at like the all-time high price of like $1,300 and $1,370 for just like moments, right? So it didn't really put too much, you know, history or meaning into those numbers.

Starting point is 00:08:20 But at the end of the day, like ether price is 50% of its previous all-time high. Meanwhile, the network has like improved by multiple orders of magnitude. Some things like defy exist now that just didn't exist last time ether was at this price. And, you know, that that discrepancy between those two things looks like opportunity to me. You know, another thing that didn't exist for Ethereum, David? Staking. Staking, my friend, there's now one billion worth of ETH in the ETH2 deposit contract. So this internet bond we've been talking about, this digital internet bond is now worth

Starting point is 00:08:53 over a billion dollars, which is pretty incredible. Some other Ethereum stats we should talk about. The number of Ethereum addresses passed a milestone of over 50. Ethereum addresses with ether in it. Oh, excuse me. with ether in it passed over 50 million. Actually, I'm not sure if I have this chart up, but that's incredible.

Starting point is 00:09:14 That's like an all-time high for any crypto network. The number of Ethereum addresses with the asset, ether in it over 50 million. Right. And importantly, that's a number that can go down where like a total number of Ethereum addresses that have had a transaction with them only ever goes up. This is closer to like actual usage, right?

Starting point is 00:09:34 Like strictly the number of wallets that actually hold a balance of ether, just, you know, breaching all-time highs every single day, it looks like. Pretty crazy. We've got USDC that now hit over $3 billion, of course, all settled on Ethereum. ETH option open interest, that's at $1 billion, too. So ETH options. We'll talk about some really interesting news around ETH options in just a moment.

Starting point is 00:09:58 But even on crypto exchanges like Deribit and OKX, that's at all-time highs to 50x increase this year. The options market for ether this year has come a long way. Pretty crazy as well. Yeah. And I'm not totally familiar with the options world, but I'm pretty sure at least with things like Deribit or perhaps even all options. I'm not an expert. But like you need ether collateral in your account to like play with these options. Right. And so while these things are centralized, people are the volume, the open interest volume requires ether collateral to make that work. let's talk about some other big options news let's get to the new releases david this has been something that's been i guess foretold for um weeks not months the cmee group this is the

Starting point is 00:10:50 chicago mercantile exchange the biggest financial derivatives exchange in the world for traditional markets for anything they finally announced that they're going to release an Ether futures product. So Bitcoin, of course, has an Ether Futures product in the CME has had that since 2017. Ether is only... Literally a week, a week three years ago to the week, Bitcoin Futures was offered by CME. Really weird, like three-year anniversary is going on right now. It's very strange timing.

Starting point is 00:11:21 I'm not sure if they just do stuff in December or what, but three years later, now this is the second crypto asset to be added, which means if they are successfully added, Ether really has the green light to be considered a commodity by U.S. regulatory authorities, which is pretty incredible. That has to be decentralized enough to be a commodity. And this is just going to open up the institutional floodgates for ether as an asset, as it has with Bitcoin. I wouldn't be surprised.

Starting point is 00:11:48 We've talked about this before, David, but all of the fund managers and institutions who are saying, we love Bitcoin, like we're buying Bitcoin announcing it. And part of the reason is because now they can get their hands on it. Right. So like they don't announce until after they've bought the thing. Like they're not going to tell you that they own Bitcoin until like they have tons of Bitcoin. They just moved into a position. I think the same thing's going to happen increasingly with ether. These large institutions are going to go buy some ether. Then they're going to

Starting point is 00:12:15 tell you about it maybe a few weeks or months later because this has opened up the gates. And he takes here. Yeah. The main takeaway here is is in addition to just opening up the options for big money to have exposure to ether. This is all. also something that needs to happen if there is ever going to be an ether ETF, which I totally think there will be. The Bitcoin ETF's probably going to come first. But the thing is, like, Big Brother Bitcoin fights the hard fight with the regulators. And then Ether just like slips right through. I'm a younger child. I have an older sister, a much older sister. She fought with my parents to get a cell phone. And when I had to fight for my cell phone, I didn't have to fight so hard. That's like

Starting point is 00:12:54 Ether and Bitcoin. That's not fair, Mom. She said that a lot. Exactly right. Well, it might not be fair, but that is indeed what is happening. Bitcoin is leading the way for ether, the asset. This is interesting in releases as well. Swivel Finance is an interest rate derivative protocol. It's built on Ave and Compound. They just released.

Starting point is 00:13:16 We're seeing like new D5 protocols emerge every week. What's interesting or special about this one, David? Yeah, there's two ways to make a money Lego on Ethereum. You build one from scratch or you connect to it. other money Legos with your third money Lego. And that's what this swivel finance is. It's an interest rate derivatives platform, which is just increasing the financialization of the defy world. This is a product that legacy people would find themselves familiar with, but now it is in a defy context, you know, just inevitable before something like this comes out.

Starting point is 00:13:47 So cool, glad it's finally here. Dope. Circle is a crypto bank. They are releasing a new earnings account. It's basically a high yield USDC business account for businesses. Again, we think that yield is going to be a big driver of DFI products in a world of decreasing yield to 0% below 0%. That's what you find in traditional finance. When defy can start to offer these things, even crypto banks can start to offer these things, that's going to bring on mainstream. Any hot takes here, David.

Starting point is 00:14:18 Yeah, once again, Ethereum proving to be the last bastion of yield in this financial world and being proven out by like the way if people on the podcast who aren't seeing the screen what circle is offering is 8.5% interest on your USDC deposits and some and depending on the on the product that you choose if even if it's a fixed term they're advertising as high as 10.75 that is high if you go out and tell businesses that they can get almost 11% yield on their cash it's a no-brainer it's like yes please give that to me that is something that the world absolutely wants these days and just can't be found anywhere outside of Ethereum. Yeah. And by the way, with the news that we announced three weeks ago about Visa,

Starting point is 00:15:04 essentially enabling a payment rails for USDC, this pairs so nicely with that. Now you've got a like business bank account where you're receiving high yields, and then you've got a way to pay for things with USDC using the Visa crypto rails. Pretty incredible. Crackin is launching. Lightning integration in 2021. It feels about time, right? Like a lot of Bitcoiners and crypto exchange has been talking about Lightning for a while. Like I'm glad they're doing this.

Starting point is 00:15:38 This feels like a long time coming. Any takes here? Yeah, it's good to see Lightning finally coming into the world, right? Like exchanges would be the logical first people to implement Lightning for payments. There's a bunch of skepticism, especially out of the Ethereum world, as to whether lightning is even legit or not. I think this is going to be a really great litmus test to see, do people actually want to use lightning?

Starting point is 00:16:00 Is it a real solution to a real problem? Or is it just kind of this hypothetical tinkerers environment? Lightning is about to, quote unquote, go mainstream and be put against the free market. So let's see if the free market wants it. Something else we've been tracking has been the emergence of digital currencies in places like China. And I don't have the link open.

Starting point is 00:16:20 But David, I looked at an article that actually showed somebody paying with a digital one using touch pay on their phones. So basically one smartphone to the other, and they used China's new central bank digital currency, made a payment. Like, I think people don't realize, particularly maybe in Europe and North America, that digital currency, central bank digital currencies in Asia, at least in China, Like, they're here. They're being in the process of being rolled out right now. In a year, a year and a half, like, or two years' time, it's going to be everywhere. And other central banks are going to need to compete with that level of infrastructure. Like, it's happened.

Starting point is 00:17:05 It's here. And it's going to cause everything to accelerate and become more digital. Yeah, Asia moves faster than we do. And, yeah, let's not, let's not to be like, like, flippant about it. they are way ahead of the West when it comes to central bank digital currencies. And the West is going to, if they are not already, going to feel extremely threatened by that. Yeah.

Starting point is 00:17:28 Space race is an interesting analogy for what is about to happen. I think, wow. We talk about these releases, but they seem to fit kind of a common mold of institutional adoption. Someone every week is building something new in a money protocol on DFI. The crypto banks are becoming more like FinTech, Central Bank digital currencies. They always seem to fit a similar mold, David.

Starting point is 00:17:52 So I hope listeners are seeing the trends here and extrapolating those trends. Let's move on to news. The big news, I think, of the week. Other than all-time highs. Other than all-time highs, other than Ether being listed on the CME, maybe number three is Coinbase is announcing the confidential submission of a draft registration statement. What does that mean? it means they are likely gearing up for an IPO in 2021, the first large crypto initial public

Starting point is 00:18:26 offering, I think that we've probably ever seen. That's got to be maybe in the double-digit billions by the times they list pretty massive, David. What's your take here? Yeah, this is, Coinbase is, I'm pretty sure, crypto's largest company, right? And definitely crypto's largest company in America. So a Coinbase going public is an extremely big deal in so many different ways. It's extremely legitimizing to our industry. It's a way to people like Coinbase quote unquote sells shovels, right? And traditional investors who maybe don't want, don't care to purchase Bitcoin and ether,

Starting point is 00:18:58 but are definitely interested in selling people shovels would definitely purchase Coinbase. Also, interestingly, they announced this the day after Bitcoin all time high day. I think that that was a very strategic move. I think that they had this ready to go in their back pocket to announce the day after Bitcoin, Bitcoin broke is all time high. And they are very strategically positioning their IPO to come during a mania period, right? During a hype cycle. While everyone, while the premiums for Bitcoin on Grayscale are super high, while there is just incredible interest in Bitcoin, Coinbase is going to IPO. And the timing couldn't be perfect. And it's just going to be so, it's also just another thing to propel the bull market. This is a super bullish development. I totally agree. And the timing is around. and well played on Coinbase's part. They've been talking about this for years and now it's here right in time for the bull market,

Starting point is 00:19:53 as David you mentioned. This was pretty big news as well. It feels like another theme on these roll-ups is every week we announce some institutions, some billionaire, some hedge fund who has just purchased more crypto assets, Bitcoin primarily. But this one caught my interest as well. This is one river asset management. the CIA CEO, Eric Peters, just put another 600 million into two things, Bitcoin and Ether.

Starting point is 00:20:27 It's interesting because we had that conversation just this week, David with Ryan Selkis, talking about how Bitcoin was the only asset that's really getting put on institutions balance sheets. But very clearly, in the Bloomberg terminal, you have the purchase of almost 600 million and adding to you about a billion dollars of Bitcoin and Ether, both of those assets together are being institutionalized. What's your take here? Yeah, dude, like there is no such thing as tribalism outside of the crypto world. The legacy investors, they don't care about tribalism. They see Bitcoin and they see Ether and they want exposure to this world. When they just purchased Bitcoin, they don't have anti-Non Bitcoin assets opinions like many Bitcoiners do. So, you know,

Starting point is 00:21:13 the diversification is like the name of the game when it comes to the legacy investors. And so they look at all the possible investments to make in the space in addition to Bitcoin and Ether is a close second. Right. And the market cap of Ether is like one fifth or one seventh, the market cap of Bitcoin, which means that $1 into Ethereum, $1 into purchasing Ether, means so much more when it comes to moving the price simply because of Ether's lower market cap. Yeah, that's an excellent point. That last bit. And the interesting thing about this is it's really a two-horse race.

Starting point is 00:21:47 It's Bitcoin and Ether and nothing else. It's like both of those assets. They are not going to put something like XRP on their balance sheet. No, it's not real cryptocurrency. Okay. Let's talk about this too. So our friend, Hugh Karp, who we've had on the podcast before. Go check out that episode.

Starting point is 00:22:03 He's the CEO of Nexus Mutual. It's a defy insurer, Defy Protocol. He just got hacked for about 8 million. in NXM tokens. And the way he was hacked, David, was super scary. It was actually the hacker had remote control over the computer he was using. And Hugh is an experienced defy operator, of course. Like he covers his tracks, his good obsec, was using a ledger with Metamask.

Starting point is 00:22:34 And the attacker somehow, like rewired Metamask. So it would display some different output and channel a transaction that Hugh made from his ledger, his hardware wallet, to a different destination than Hugh intended. So that's a story that's kind of still developing. But what's your take on that? Yeah. I always knew that something like this attack vector existed, but I never heard anyone making any noise about it.

Starting point is 00:23:02 So I just never really bothered to protect myself from it. What happened was that some hacker got access to Hughes laptop and did a hot swap of metamass, right? Installed a malicious version of metamask that looks exactly the same. And there's like, I don't know how many transactions you make where you just don't really verify the data because, I mean, it always works. And so like, you know, I never do that. I never do that anymore. Now, something I've also haven't done since this is make a transaction on my ledger via metamass because I'm a little bit scared, right? Like you and I are both very public people.

Starting point is 00:23:34 Like so is Hugh. And like that's kind of worrisome. We are having, we are going to have Hugh on the show once this, once this whole ordeal gets settled because there is a little bit of a police chase going on right now. Interestingly enough, the hacker, the only way that the hacker knew or something to do with the fact that the hacker was a customer of Nexus Mutual, which means that that customer is KYC'd, which is really. interesting. And that's not a really a great position to be in as the hacker. And so there is a police

Starting point is 00:24:08 chase going on right now. The Nexus and Hugh are working with authorities to get back his money. So that'll be an interesting development. And once the silence is lifted from that whole story, we're going to tell it on the bankless YouTube. Yeah, absolutely. Make sure you stay tuned into that just for your own opposite purposes, right? So we can kind of figure out how like individuals who are going bankless can protect themselves. against this sort of thing. That'll be part of the story as well. David, let's talk about the Office of Comptroller,

Starting point is 00:24:39 who has been pretty bullish lately on ether and on crypto assets, is making some statements. This is in the US, wanting to more formally integrate stable coin issuers into the existing banking system. I think this is Brian Brooks, who is doing this. Does it seem inevitable, David, that stable coin issuers are going to be regulated in some way. We just had a conversation with Rowan Gray,

Starting point is 00:25:08 who of course is the proponent of the Stable Act. He definitely wants to regulate all of the issuers. But it feels like it's going to come in one form or another. And some of the issuers, the centralized issuers, anyway, are sort of like proponents of some light regulation as well. What's your take on this news? Yeah, Rohan Gray's argument is that like if it walks and talks like money, it needs to be regulated like money.

Starting point is 00:25:33 And to some degree, like something like USDA, I kind of do support that, right? Because they are in the meat space world. They are connected to the legacy banking system. And so there should be some amount of regulation, I guess. Like regulation isn't evil by nature. So I think this is kind of just a natural evolution of the industry. Like the parts of Ethereum that connect to the United States banking system, they're going to get regulated.

Starting point is 00:26:00 Like I'm not interested in fighting that too hard. I don't even see what would be beneficial about it. Another interesting, I guess, news development is somebody created a way to stream long-term incentives on Ethereum. This is a developer by the name of James Fickle. Can you talk a little bit about this Open Grant project, David? Yeah. So this is just trying to solve the principal Asian problem, in my opinion, where a lot of Ethereum development should be incentivized, like, financially. And it is.

Starting point is 00:26:30 But what this project is trying to go after is trying to incentivize in ethnominated returns, right? And so people that are working on the Ethereum ecosystem are by proxy increasing the value of ether, the asset, right? And so this is a way to reward developers working on Ethereum with ether denominated returns, rather than US dollar denominator returns, meaning that if they do a good job, then Ethereum will be better and ether will be more valuable and they'll be able to access that upside that they created for the network. So just a really good incentive alignment system.

Starting point is 00:27:02 And that's really what Ethereum is all about, is offering tools for you to tinker with incentives so that we can produce the outcomes that we want. Yeah, it's really great to see between things like this and of course, Gitcoin, the community is really solving the public goods problem of how to fund this sort of infrastructure, which has always been part of the bare case, I think, for cryptocurrencies.

Starting point is 00:27:26 It's like, great, you're rewarding miners, you're rewarding validators. But how do you reward like the equivalent of the hospitals and roads and the public infrastructure that needs to be developed for these systems? And the community is coming up with really creative ways to harness the money protocols that we have to do this. And that's super exciting, super bullish. David, have you kept up with the whole NFT art scene at all?

Starting point is 00:27:52 Because there are some artists that are having some massive success. And this really feels like to me, like this is going to be something really big is going to come out of the art scene, the crypto art scene and the NFT scene in 2021. And maybe it's already starting. So this artist Beeple just made $3.5 million in an NFT auction. Dude, that's crazy. $3.5 million for digital art. Right. Yeah. I first came across Beeple because Joe Rogan tweeted about him saying that he thinks that his art is really cool. And his art is really cool. very unique. It's kind of also odd. I would say it's odd art. Definitely worth checking it out. Beeple-crap.com where you can go check out some of his work. But yeah, he auctioned off Devin NFTs for $3.5 million. So first off, congratulations to this guy. Second off, this is just going to open up the floodgates towards digital art, right? This is how a digital art mania gets started. I expect this to be kind of like Bitcoin Crossing the all-time high

Starting point is 00:28:56 I expect this to kind of be a starting pistol for digital art, an artist coming to, because if somebody's making $3.5 million by selling digital art, a lot of people are going to take notice and be like, I can also get a chunk of that. Dude, this is some weird stuff. I don't know if you read this. Yeah, it's really weird. This is like Donald Trump running through fire, but apparently this art piece is programmable. And it was like, if Trump wins, the art itself changes to a video of a sexy boy king Trump.

Starting point is 00:29:22 Like, what is this? Well, this is part of the art. right? Like the Beeple guy is like a really creative kind of off-brand guy. That's part of his brand that you're buying into when you buy one of the NFTs. Wow. Super creative, super interesting. David, that is, we've gone through market releases news. It's time for some takes. What is your hot take this week? My hot take is about this bull market and it is different this time, TM. This bull market is different this time. And there's just a number of different reasons why it's different this time. First and foremost, obviously, money, we are in times of money printer go,

Starting point is 00:29:57 Burr. We are in the middle of an economic contraction while we are also simultaneously having monetary base growth and inflation, right? And so while the economy might be down, there's so much more money in the world. And so that's already, quote unquote, it's different this time. What's also different in this time is as a result of that, the investors coming into this base are different. They are funds. They are, you know, boards of people making governance decisions about treasuries. They are like long-term holders, not the fickle retail who were like, you know, the price of Bitcoin drops by like 5%, and then they get scared out of their positions. These people don't get scared out of their positions. They are here for the long haul, right? They are not trading Bitcoin.

Starting point is 00:30:41 They are taking it and removing it from the market. And there's a lot of them. Meanwhile, we have like three and a half million dollars being purchased on NFTs. That's also something that's totally different. It's also different like we've talked about previously on previous roll-ups and basically across every bankless channel. Defi didn't exist last time. Like there's different surface areas for investments, gaming. Like it's all happening all at once. Like this bull market is not the same thing as previous bull markets because of how much optionality there is to express bullish opinions in different investments and also just the different players. In 2017 and the mania of 2017, crypto was like a household name.

Starting point is 00:31:20 Everyone knew that this crypto mania was going on. I think people are going to understand that a lot sooner. And I think the crypto is about to become just a very common talking conversation point from everyone, not just the crypto folk. Wow. Like, I agree. You know, so can I make my hot take sort of a riff off of your hot take? Is that allowed? I feel like that's how this podcast goes.

Starting point is 00:31:44 Oh, okay. So the like it's different this time, TM, right? So just building off what you said. Another way it's different is this time we actually have defy capital assets. We have tokens that are capital assets. And here's what I mean by that. So like 2017, all of the token mania had no substance behind it. These tokens didn't have cash flows associated with them. They didn't even really have value accrual mechanisms. It was just some nebulous thesis that yeah, I buy a token, bick, Bitcoin went up, Ether went up, so therefore this token should go up, right? The era of utility or futility tokens, as we call them, that is not the era that we're living in right now. So what I think's going to happen is mainstream finance. First, they're getting their arms wrapped around Bitcoin and digital scarcity. Okay, done. Checkmark, right? Next, they move into ether and this whole Ethereum economy and ether the asset. And they start to understand digital bonds. The internet bond, productive asset, the ability of ether as an asset to generate revenue from the economy that's building. Okay, check mark. In progress, right? Like, that's happening right now. They're also going to understand this cycle.

Starting point is 00:32:57 Defi tokens, capital assets, things like YFI, which just released a quarterly report last week. It was generating something like $3 million in like quarterly revenue, right? Like, this is real revenue. These are real financial assets. and they are producing returns for investors. And I haven't heard anyone in financial mainstream talk about that yet. Like they're not even aware that this world exists.

Starting point is 00:33:25 They understand Bitcoin, maybe they've heard of Ethereum, but they don't understand that there is a future S&P 500 that is in the process of being built, but they will this cycle. We've got some really interesting analysis tools this cycle too. So we just put out a how to use token terminal to calculate. like price to sales ratios and price to earnings ratios and it's like financial like kind of stuff we can start to do that now we're understanding these assets more than ever so you know what david you're right this time it is different it's different at m tm when the investors of the

Starting point is 00:34:00 world with the investor class of the world the funds whatever and they come to ethereum and they see that there is a open sea of impossible investable assets that are worthy of their research and attention. They're going to get really excited because they thought that they knew about all the assets of the world, but turns out there's a bunch of new assets they didn't even know existed. And you know what they're going to do when they discover all of those new assets? What are they going to do, David? Probably subscribe to bankless. Probably. You know what? Bankless Q3 token report. That was a great token report. They should. But like, I'm excited for them to come, David. But you know what I'm more excited about is the bankless

Starting point is 00:34:36 community front running them? Like we've been talking about this for the last. our bags. Front run. Like this is this is part of it. They're going to slowly wake up to this, but because we're using these systems every day, like we know what's about to happen. So guys, subscribe to bankless, continue to front run the Wall Street investors who are about to jump in here. All right. That was takes, but I felt like that was a bit of what we're excited about, too. Is there something else you're excited about? What else are you excited about, David? I'm actually excited about an article that is coming out on the bankless newsletter that I'm writing called Ethereum is a trust plant. I like plants, as you guys can tell. I have the plants behind me.

Starting point is 00:35:14 But I wrote an article about how Ethereum is similar to a plant. And I think if you really want to understand how these systems work, the right perspective is actually one of biology. And that's kind of what I make the case in the article. One of the things that, and this gets to what I'm, the thing that I'm excited about, it's not only to release that article and for everyone to read it and tell me what their feedback is, but also the way a good, the way a good thing, healthy, vibrant plant works and lives is through redundancy, right? And we are seeing coming out of Defy a bunch of redundant systems, right? There's a lot of dependency on die right now. Dye's not all that redundant, but actually we're getting new projects like MTCET dollar and a few other

Starting point is 00:35:57 decentralized table coins as redundant systems. Like we've now we also, we have in addition to compound, now we also have Avey and now we have like redundant money markets. And the best thing about defy into the room for redundant systems right if ave goes down compounds there to replace it right hopefully with maker goes down there's a new alternative you know decentralized table coin to replace that uh and so what what really gets me excited about is is the anti fragility i'm seeing growing out of the defy space if something breaks something else in defy can take up that and bear that weight and the collapse and the structure just won't collapse because of how we have redundant structures Guys, you knew it was only a matter of time before David combines both of his passions, botany and crypto into a single article. I'm excited to read that to you, my friend.

Starting point is 00:36:45 Yeah, no, it's almost on coming out, I think, the 30th of December, so pretty soon. David does these reads, too, on the YouTube. Another reason to subscribe where he'll actually, like, walk through and read the article to you. So you can get in your brain that way, too. Really cool. Yeah, I put some voice and emphasis into it, too, so it's fun to listen to it. All right, Ryan, what are you excited about? You know, okay, so the CME news is so big with Ether. So we're having this debate with Ryan Selkis earlier this week, right? Kind of a is-Eath money debate? And it turned out that that wasn't even the debate because we actually both agreed that if you use the definition of money that I use and you use, that Ether is money.

Starting point is 00:37:23 And he said, yep, I agree. But what I don't agree about, this is Ryan Selkis, who runs cryptoanalyst for Masari. He's what I don't think is going to happen is that Ether is never going to be a monetary. asset in the way that that Bitcoin is. And if I'm to paraphrase them, the main reason he said is because institutions like micro strategy, like large hedge funds, Paul Turo Jones of the world, they are not currently putting ether on their balance sheet and they won't in the future. So one of his points was the institutional of ether is a myth, right? So we debated that back and forth. And then two days later, David, two days later, Ether, like CME announces that ether is going to be listed.

Starting point is 00:38:10 They're going to have like futures on Ether in the same way that they have futures on Bitcoin. Like the only other asset besides Bitcoin to be listed on the Chicago Mercantile Exchange, the world's largest derivatives market. Nothing else is even close to that, right? same day, this asset management company, one river asset management, we just talked about earlier, release press that they bought 600 million of not just Bitcoin, Bitcoin and Ether. Right. So love Ryan Selkis. I feel like forwarding those links to him and like telling him like, buddy, just get ready. Let's have this conversation again in 2021 because it's already happening. Right. Even the conversation two weeks later would be different. Right. So I think it's important, guys, that you like catch these trends early. Crypto is very much about trying to see the future, but also like catching trends and things that are happening very early before they become like consensus crypto ideas. The institutional of Bitcoin, institutionalization of Bitcoin is now a consensus crypto idea. Like everyone sees it. They don't yet see.

Starting point is 00:39:24 I think the institutionalization of ETH and that these same funds and asset managers who bought Bitcoin are about to buy ether. And I think there's alpha there. We've said it before. I think alpha, there's going to be massive amounts of alpha in ether, the asset this cycle. But of course, you guys know, we skew ether bullish all the time. Just a little bit, just a little bit. I put out a tweet, I put out a tweet forever ago that was like this is right after like micro strategy, I think, bought their first bunch of Bitcoin. And I said, like, you know, by the end of 2021, more companies will have ether on their balance sheets than Bitcoin. And the reason why that's true is because they're going to need to purchase ether in order to transact on Ethereum. I'm not saying that

Starting point is 00:40:08 they are going to put their treasury into ether. I'm saying that companies will need ether to pay for transactions. So maybe they're not putting millions and millions of dollars. Maybe they're just buying $100 worth of ether to put it to so that they can use Ethereum, the network, to do whatever they want to do on Ethereum the network. And to me, if, you know, every, like 10 times as many companies are purchasing Ether to pay for access to Ethereum versus purchasing Bitcoin to put on their balance sheet and it's just a little bit of ether, that sounds like money to me. That sounds like what money is. Absolutely. Well, we will see what happens. The next year is going to be big. David, we've got a little bit of overtime, but it was an overtime week in terms of the

Starting point is 00:40:49 news and releases. It always is. It always is. Guys, This has been the weekly roll-up from bankless. As always, this is not financial advice. Both Bitcoin and Ether and Defi are risky. You could lose what you put in. But this is the frontier. We're headed west. Thanks for joining us on another episode of Bankless.

Bankless - ROLLUP: 3rd Week of December

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