Bankless - ROLLUP: 3rd Week of March (Elon Musk NFT Song, Stimulus Checks, Canada ETF, Gemini & Aave)

Starting point is 00:00:00 Benglis Nation, it is the third week of March. We hope you're doing well. David, what are we doing this morning? We are rolling up the third week of March. Always an ambitious endeavor in the world of crypto to roll up a full entire week's worth of news into one single podcast. But we do that nonetheless. First, we are starting with markets.

Starting point is 00:00:31 What is the market saying? Then we are going into releases. What got released in the last week of crypto? Then we'll talk about what's been in the news cycle. And then we'll talk about what's been in the news cycle. And then we'll talk about interesting takes. Who had good opinions in the last week of crypto? We'll finish up with what David and Ryan are excited about.

Starting point is 00:00:47 And, of course, top things off with the meme of the week. My favorite part about the weekly roll-up. Come for the news. Stay for the memes, guys. We do this every Friday. So you can enjoy this episode with your morning coffee. This is the fastest way to get crypto, the week of crypto, downloaded into your brain. David, are you ready?

Starting point is 00:01:04 I'm ready. Right into markets. All right, man. Let's get to markets. What is Bitcoin telling us this week? What's the price now and what was it earlier in the week? Bitcoin hit a all-time high this week. It touched out at $61,800, something pretty close to that.

Starting point is 00:01:21 So congratulations, Bitcoin, another all-time high. Took a little tumble after that to the low-low price of $55,000, but then has since popped right back up, touched $60,000 this morning, but is currently hanging right below it at $58,100. $100. Bitcoin, all-time high the same week that US dollar or USS stimulus checks go out to most Americans. So is that a coincidence? Interesting correlation. It seemed like only a year ago, Bitcoin was hanging at the $4,000 mark. In fact, it was just a year ago. We're going to talk about that later. I can't believe how far we've come. But let's talk about the story behind Eith. Where are we hanging with Eith? Yeah, during Bitcoin's touch and breach above all-time high, Ether got to a 1900.

Starting point is 00:02:08 $230, not really having that same amount of strengths that Bitcoin has. And then, of course, after it got up to that $1,900 mark, it seems like it was going to go for 2000, but then it took a tumble back down to the low 1700s. But then has since recharged back to where we are today at $1,820. Kind of lagging behind. Ether's taking this time. Not going to go in too fast. Definitely.

Starting point is 00:02:33 We're going to talk about ETH versus DFI tokens as well, because I think that's an important metric we talk about so often. I can't wait to celebrate ETH 2K yet again. David, I think the price for us to get back to all-time high is to do what Bitcoin did last week is somewhere in the 2030 range or so. If we breach 2030, then Ether will be hitting its all-time high. I don't know. Any one of these weeks could be happening. Hopefully we get ETH 2K sometimes soon. I've always having a fun time watching Eath bounce through the 1900s because then it's like a walkthrough history. It's like, oh, the 1940s. This was World War II.

Starting point is 00:03:12 Oh, 1950s. The Roswell went to. Is that really what goes on in your mind? Yeah, exactly. I check the price. I'm like, oh, it's my mom's birth year. Like, oh, cool. That's awesome, man.

Starting point is 00:03:21 All right. Total locked in Defi. We are hanging close to all-time highs as well. Everything about this year, I feel like almost every roll-up is either we're hitting all-time highs or we're close to all-time highs. we are $44 billion locked in defy. That number has flattened over the last month or so, but is definitely up in a huge way on the year. And if we scroll out to all, you get a hockey stick

Starting point is 00:03:49 that is just like a straight up line, almost, a vertical line of the growth of dollars and value locked in defy, I should say. So what's this telling us, David? Yeah, again, it's always telling us. telling us that the assets deposited into defy are generally going up in price. There's more defy apps to deposit assets into, and there are more total assets being deposited into those defy apps. Next stop, $100 billion dollars locked in defy.

Starting point is 00:04:17 There you go. That'll be something to celebrate. DPI itself, which again is the top 10 defy tokens in the Defy Pulse Index is an indycy we like. That's hanging out of around 440 at the time of recording. That's kind of flat. on the week. Anything here we should be looking at? Yeah, flat on the week, but again, I don't even personally look at DPI versus the dollar. I always look at DPI versus ETH. Yeah, look at that. Even flat on the one-month time horizon. Started basically the 19th of February at 1440, which is exactly where we are today. So DPI, flat for a whole month. All right, David, let's jump over to what you were just talking about,

Starting point is 00:04:58 which is DPI versus Eith on the ratio. What's the ratio telling us? us this week. Yeah, DPI.24 DPI per ETH. On that lower band of that channel that I keep talking about, kind of touching the bottom. But, you know, still over 2021, DPI birthies, it's still pretty strong. So DFI season, yes, still going DFI season? Slowly but surely, it's a slow, it's a slow motion DPI DFI season. That's what's going. Okay. It's definitely NFT season. Yeah, that's for sure. You know, pretty soon. We'll get some metrics up here. around the price of NFTs and how that's tracking the market.

Starting point is 00:05:37 If last summer was Defi summer, this is sort of, I mean, it's NFT summer, only it's happening in winter. But let's talk about assets in general. Asset dash.com provides a really interesting view of the world's biggest assets. So at number one, the world's biggest asset, just FYI, is Apple. It's breached over $2 trillion in terms of market cap. But look at this guy. Look who's number six?

Starting point is 00:06:03 Bitcoin. Bitcoin number six. Bitcoin number six hovering between Google and Facebook. And if we scroll down, we see semiconductor companies, Berkshire Hathaway. We see fintech companies like Visa, Walmart. And we get all the way down. Let's see. Oh, there he is.

Starting point is 00:06:20 Hanging out at number 4. 44 is Ethereum ether at a price of $209 billion. That's the market cap. The 44th largest asset in the world. right now. And we'll pop up this chart from time to time because I think it shows a really interesting view of crypto and particularly its flagship assets versus the rest of the market here. Anything else we should talk about, David? Dude, Adobe at number 41 is worth more than Ethereum. That is insane. Adobe, a software company for like digital arts. Like digital arts are

Starting point is 00:06:57 important, but like, come on, Adobe versus Ethereum. Looking forward to watching Etherium. Well, march up this asset dash.com list of assets. We've got PayPal hanging out at number 26. So also above Ethereum. We've got Bank of America at number 21. MasterCard is up there. I mentioned Visa earlier. There's a number of banks that are hanging above the world's open financial system.

Starting point is 00:07:20 So we'll see how long that lasts. One by one. ETH is coming for you guys. All right. Let's talk about this. This is a really interesting graph from Anthony Sassano. He dug this up. We've shown this before, but this is the percent of ether that is locked in exchanges.

Starting point is 00:07:37 So actually, in green, what you're seeing is the percent of eth balance on exchanges. So these are what we would call crypto banks. These are centralized exchanges, Coinbase, Gemini, Binance. We love these as a bridge, but we don't necessarily think this is the place to park your self-sovereign money. We'd rather you go bankless. And the good news here, David, is that less ETH, a lot less ETH, is stored in those banks. That means more people are going bankless. And what this means to me, David, is this is really this ratio, this percentage of ETH that's not inside of custody crypto banks.

Starting point is 00:08:15 This is our best hope for a bankless world. So this number going down, this is going down from about a year ago, from 20% to 13%. It's just straight awesome news. It gives me a lot of hope and a lot of optimism that even in the bear market, people are continuing to go in the direction of becoming more bankless, becoming more self-sovereign with their funds. What's your take here? Yeah, there's a number of different stories being told on this graph. The first story that comes to my mind, well, is this is literally a bullish indicator because when there's less ether on exchanges, ether price is more sensitive to price movements, usually to the upside.

Starting point is 00:08:53 Usually when ether is flowing out of exchanges, it's because people aren't. buying that ether and then cold storaging them. And so when ether prices removed from exchanges, any further buy pressure has outsized influences on the price of ether, right? So people look at supply of assets on secondary exchanges to get a gauge for whether people are selling or buying. And if there's ether flowing out of secondary exchanges,

Starting point is 00:09:16 it's because people are buying it. The other story being told is this purple graph, or purple line, which is the supply of ether in smart contracts, which is going up seemingly inverse the relationship between ether outflowing from exchanges. Ether, inside of smart contracts, over the last years, went from 12% to 21%. And so, you know, money robots are gobbling up Heath and crypto banks and crypto exchanges are having eth outflows. This is what we want to see if we want to see a defy bankless version of self-sovereign money and finance. Money robots

Starting point is 00:09:52 eating the banks. That is a good sign. Absolutely. Here's another view of ETH supply held on exchanges again going down. This is showing the same thing in a different way. But that is all good news, David. Speaking of good news, a year ago at this time, as of March 13th, we had an event in crypto and in the wider markets known as Black Thursday. Do you remember Black Thursday, David? I remember Black Thursday, Ryan.

Starting point is 00:10:23 What do you remember about it? Yeah, I remember we recorded bankless episode number two. And I was very, for as good as that episode was, which was a fantastic episode, by the way, I was extremely distracted by like this plummeting ETH price. And then I went into work, back when I worked at realty, you know, no one was working. It was just only looking at just like the macro markets taking a huge, huge move to the downside. Same thing with crypto. It was just a very distracting day. And to me, that was the day that like COVID became real.

Starting point is 00:10:56 Because when the markets drop by like 20% in a day, like that makes things feel very real. And that's when we discussed as a company that we were actually going to start working from home. And it was actually kind of a market taking a big move to the downside. That was actually the thing that triggered that conversation, which was interesting to think about. Wow. That very much felt like a Black Swan event just in general in macro because equity markets took a dive. It was a scary week from that perspective. But crypto markets completely tanked.

Starting point is 00:11:23 And this was on the back of kind of a brutal. two-year bear market where it seemed like early in 2020, we were recovering. There were some people were bullish. Yeah, there were signs of life in crypto. We started, we had the D-Fi pulse index. We started seeing D-Fi really take off. And then, bam, price drops on Bitcoin, going down to like the, did it get to the 3,000 level?

Starting point is 00:11:47 I mean, it was low 4,000 for sure. I think it brought in that 4,200 or 4,500, something like that. That sounds right. So like Bitcoin had no volume. this was actually the low point for ether. 95% off. It's all-time highs, dude. 95%.

Starting point is 00:12:03 And it very much for many people felt like, like, where F, this thing is over. Like, it's gone. But a year later, here we are. Price of Bitcoin, as he said, hit 61K price of ether as of recording in the 1800 mark. Over $2,000. dollars if you had the uh if you had the cash and the wherewithal and the guts to bet on this kind of low uh you i mean you're doing like a 10x 20 20 x almost on marketing a 20x if you don't see yeah yeah that's what it's crazy these markets can turn around so quickly um i think

Starting point is 00:12:45 it's a good lesson for for all of us a lesson on holding a lesson on buying the dips uh and uh wow things have really changed in the last year yeah ever since the the bottom in march ether and crypto and bitcoin have just been it was up into the right for all of 2020 and you're totally right like sentiment in early 2020 was like turning optimistic and bullish and then we got like punched in the face by covid but once that pass once that punch like was received and taken it was again bullishness from then on out right it was up and to the right except for that one just massive blow to the gut i didn't know it would happen so quickly, David. I thought it was very possible that we could be another couple of years. Right. Yeah, at least another year into the bear market. Things move fast in crypto, as always.

Starting point is 00:13:33 Speaking of things moving fast, this is Spencer Noon talking about the decentralized exchange space. And I think this graph, I love that they always use in these graphs. Uniswap is pink, you know, kind of like unicorn, I guess, color pink. This is seven-day volume for decentralized exchange. and just shows how dominant uniswap is. 57% of the volume Uniswap is capturing. I remember when no one believed that AMM's automated market makers, kind of money robots that are super simple and provide permissionless trading pairs,

Starting point is 00:14:09 I remember when no one believed they could be a thing on Ethereum at all. And now here they are just completely trouncing orderbook exchanges. And Uniswap, the simplest of them all, beating all of the others. What do you think this tells us? Yeah, the uniswob dominance is absolutely insane. But then also just the simple AMM versus complex AMMs dominance is also insane.

Starting point is 00:14:36 So if we want to look at that category, that is both Uniswap plus sushi swap, which are just basic AMMs, one-to-one AMMs. And that is, what is that? That's like 70% of all volume on Dexes on Ethereum is just basic A&Swap. MMs in Sushi Swap and Uniswap. And everything else is longtail.

Starting point is 00:14:56 And so bullish on simplicity. Yeah, absolutely. And we'll see if that continues to persist, but definitely simplicity has one. This is why I've thought of Uniswap almost as like if this is the internet of value. Uniswap is almost like the Google. Because, you know, just the same way, you know, if assets are like webpages in the internet, Google is the crawler in the catalog and the index of all of these web pages. Uniswap is like the index of every ERC20 token that can be found, and it provides something

Starting point is 00:15:32 different, not the ability to go find the website, but the ability to trade the asset. This is kind of the internet of money. That's why I think Google is an interesting comparison to Uniswap, and it's definitely maximally simple. If a token has liquidity, you can probably find it on Uniswap. Yeah, absolutely. Absolutely. All right. Well, let's talk about DPI outperformance relative to other indices. I guess what we're seeing here in the Uniswap graph and this graph is almost like a network effect, kind of a power law dominance.

Starting point is 00:16:05 What are we looking at here, David? Yeah, so we're looking at the asset, the total value of all assets under management inside of DPI. And there are many different attempts to generate indices that are DFI focused. but it really seems to be that DPI has won out as the indy that is tracking DFI. There's other indices in this list as well that are tracking other things. But mainly the competition, at least so far, the story has been told that the competition to create a DFI index, natively on DFI infrastructure, has been won by DPI. Absolutely.

Starting point is 00:16:40 It is about 10x above all the others so far. And trending further. And trending further. All right, David, we're going to get to releases. a minute but first bankless listeners we want to thank the sponsors that made this episode possible jemini 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 jemini is available in all 50 states and in over 50 countries worldwide

Starting point is 00:17:09 and on gemini there are markets for over 30 various different crypto assets including many of the hot defi tokens and it's one of the few exchanges that has liquid dye marks 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, where 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 my money.

Starting point is 00:17:48 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. 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. AVE is a borrowing and lending protocol on Ethereum and just recently released AVE version 2, which has a ton of cool new features that makes using Ave even more powerful. With Ave, you can leverage the full power of Defy Money Legos,

Starting point is 00:18:25 yield, and Composability all in one application. On Ave, there are a ton of assets that you can deposit in order to gain yield, and all of those same assets can also be borrowed from the protocol if you have deposited collateral. Here you can see me getting a 200 USDC loan against my portfolio of a number of different Defy tokens and ETH. I'll choose a variable interest rate because it's a lower 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 00:18:55 One of AVE's V2 features is the ability to swap collateral without having to withdraw your assets, trade them on Uniswap and then deposit them back into AVE. AVE does all of this for you all in one seamless transaction, so you don't have to repay loans in order to change the collateral you have backing them. Check out the power of AVE at AVE.com. That's AAVEE.com. All right, bankless listeners. We are back.

Starting point is 00:19:21 David, let's get to releases. Let's talk about our first release. This is something that is vitally important, something I'm super excited about. I know you're excited about. It's called ZK Money. What are we looking at here? Yeah, ZK Money, otherwise known as Zero Knowledge Money.

Starting point is 00:19:36 This is privacy on Ethereum as an application. And so think of a very similar. intent as Zcash. Zcash is zero knowledge cash, but that's its own blockchain with his own asset. This is ZK Money, which is an application on Ethereum, which can provide ideally very comparable levels of privacy as what Zcash can offer, but as an app on Ethereum. So starting with ether and wrapped ether, but then also in the future, ERC20 tokens as well. And so using ZK Money, which is a roll-up, you can deposit your ether into the ZK Money roll-up, and then, that is its own internal payments and private payments ecosystem, right? And so,

Starting point is 00:20:17 similar to, like, registering an account on Coinbase or registering your ENS address, you need to register an account inside of the ZK Money Rollup. And then, like, I register David Hoffman.com or, no, just David Hoffman on the ZK rollup. And then so you can send me money in the ZK rollup to David Hoffman, but you can send me money in a shielded way where I can't go look at where that money came from. And I can do that for other people as well. You know, remember when we were talking about loop ring being like sort of a like a long pier and then you get to this whole, this whole universe? It's just like that. That's what that's what this roll up is.

Starting point is 00:20:50 Only you travel across this pier to this whole kind of carnival and this great experience and everything there is private on the other side. And of course, this is a roll up. So it's not a side chain. It is a layer two solution, which means it is secured by Ethereum. David, when you moved from your ETH from Ethereum mainnet to, to this ZK money roll-up, how much did that cost? I'm just curious. Yeah, I put one-eth in, and that cost me 0.0-1-Eath.

Starting point is 00:21:20 So 1% of an Eth. And then inside of that roll-up, what are gas fees like? They're probably close to nothing, right? Right. I haven't actually a transactory because I don't have any friends in there that need me to send them private money, but if somebody needs me to send them private money, we can try this out.

Starting point is 00:21:36 But the pitch is that both zero knowledge, technology is both privacy technology and also compression technology. And so in theory, you actually kind of get two birds with one stone because you get private money and you get cheap money. And so, again, I don't have the numbers at hand, but the promise of ZK. Roll-ups is both privacy and cheap transactions. And so I don't know what those fees are, but they are supposed to be cheap. I remember last bull cycle, there was much ado about privacy-related blockchain. So Minero and ZCAPE, The other thesis around that is that all of these privacy solutions wouldn't have their own blockchains, but they'd just be apps. And this is almost the manifestation of privacy as an app on top of and secured by ether rather than being its own chain.

Starting point is 00:22:25 We'll see how that plays out, but looks promising there. David, let's talk about this next one. Super fluid. This is a really cool concept, I think. This is the idea of streaming money. So rather than giving you a bucket of money. money, a one-time payment, being able to stream money. This is something that Andreas Antonopoulos, I remember him talking about this as an early use case of Bitcoin. Of course, Bitcoin went down a

Starting point is 00:22:50 different path and became more of a store of value digital gold, but it's always been part of the crypto cypherpunk vision, I think, from its early days. What are we looking at here with superfluid? What is this? Yeah, we are seeing the linkage between payments and time. And so if we, and that, of course, is what streaming payments means. And so the way that this system works is that you can make a transaction on Ethereum that has certain logic in it that allows people to receive money based on how many blocks after that initial transaction has been made. And so I can make a transaction that says every block Ryan is allowed to receive 0.001

Starting point is 00:23:28 ETH every single block. And I can be streaming him that amount. And the cool thing is, is it only takes one transaction in one block to establish that stream and then that stream just perpetuates until one of us cuts that stream off. And the other cool thing about superfluid is that once a link between two people are established, one of those two people can go and make a link, a streaming link between a third person and then fourth person, and all of a sudden this turns into a building of a mesh network of streamable money. And so there's the possibility of all of these monies being, like flowing between wallets based on this like kind of streaming standard,

Starting point is 00:24:06 this streaming logic. And so the options here are endless. And not only are we talking about money, but we're talking about literally any kind of token on Ethereum. So anything that can be tokenized into value can be also streamed. So that's pretty cool. It's also a different, a new money Lego unlock, I think. So we don't often think about streams of money, but what are the new use cases that they lock up? Of course, let's say your salary is $1,000 a month or you're getting paid as a contractor $1,000 a month. Well, rather than receiving one lump sum payment, maybe you get a certain amount of dollars in allocation of that a day. That's somewhat interesting, but what about the subscription that you pay to Netflix? Maybe streaming that rather than a one-time payment,

Starting point is 00:24:48 or we get into these micro-transactions where you're maybe watching a video, a YouTube video or something, and as you're watching it, it's charging you some sort of stream of fractions of a penny to watch that. This is a whole new unlock that's actually not possible. I'm sure to financial finance. There were some attempts to do this with a project called Stalblier on an Ethereum mainnet. What's interesting about Superfluid too is they've actually chosen to deploy first on not sort of layer two side chain world. So X-Di and also amatic network. So transactions are cheap to get this started. It's kind of fun to play around with. Yeah. And this was also kind of gas optimized to begin with where that streaming money, that stream updates every single block. But it only

Starting point is 00:25:33 makes one transaction on the blockchain. So the state is actually updated, but because it's baked into block time, the state is automatically updated by every single issuance of a block. And so you got kind of, it's kind of this cool little trick to make sure that we are updating the state as much as we want with these streaming payments, but without actually having to make any single transaction on Ethereum because it's baked into the logic of what block height are we at. So that's kind of cool. Dude, I always get blown away with how much of the cyphered punk fishing were actually achieving, right? So like stable coins. I remember 2013, that seemed like it was never going to happen. Now we have stable coins. Now we can stream microtransaction stable coins.

Starting point is 00:26:13 Super cool stuff. David, let's just do a drive-by on this. But the Argent wallets, one of our favorite smart contract wallets for beginners. The problem with it, though, is gas fees are high. The solution, though, is coming. They're actually rolling a layer two inside of the Argent wallet. Anything more to say on that? Yeah. Check out their blog post. It's pretty. informative of if you want to go and dive deeper into how Argent is using the L2, but they are using ZK Sync. If that was the answer you're looking for, they're using ZK Sync to scale out the Argent wallet. So congrats to the Argent team. Very cool. All right, Zeppelin. So these are one of the defenders of Ethereum Defi money robots. They audit smart contracts and they build security

Starting point is 00:26:56 tooling. They've just built something called Defender Sentinels. What is this from Open Zeppelin? Yeah, you guys might be familiar with the term watchtowers, at least when it comes to Bitcoin's Lightning Network. Some systems, some crypto-economic systems need to have people observing them for them to be game theoretically sound. If somebody is not observing the activity, then an attacker might get away with an attack undetected. And all that is required is somebody to detect it and report it. So it's actually a very simple service. And that is what Open Zeppelin is doing. And this is especially relevant for things like optimistic roll-ups withdrawal periods

Starting point is 00:27:37 where there's this one-week withdrawal period where people, if there is something that went against the rule, someone needs to report it. And if somebody doesn't report it by the end of that week, then that spells trouble. And Plasma also has this design constraint as well. But it looks like Open Zeppelin, true to the brand of making sure Defi is secure, is now observing Defi and what needs. needs to be observed to ensure that defy is safe. So thank you, Open Zeppelin. Security tools are always getting better. Speaking of tools getting better, the NOSISIS

Starting point is 00:28:08 multi-sig wallet, which is the most used multi-sig wallet, it's got billions worth of ETH and ERC-20s inside of it. It is integrating a suite that allows people to start managing Dowels directly from their NOSIS multi-sig wallace. So this is kind of an unlock, I think, for, Treasury management if you have funds inside of Nosis Multisig, which means you're generally sharing it as part of a team, you can now have direct access to Dow tools. So what are we what are we talking about here? They're calling this safe snap. What is safe snap? David. Safe snap is one-part governance tooling to help the governors of protocols make decisions, but it's also one-part Dow Treasury management,

Starting point is 00:28:56 and it's kind of the link between the two. And so it aggregates off- chain signatures by people that are authorized to be governors of the Dow. And then that off-chain signature aggregation can go into an on-chain transaction that has something to do with the treasury behind a Dow, at least one that's using the NOSIS safe, which again is actually perhaps the strongest smart contract on Ethereum ever as value by time value locked. And so we think it's going to be a very concrete tool for Dow's to, you know, securely store. their funds, but then now it's also an extension of Dow governance and Dow decision making, which is pretty cool. Look, did 20 billion in Noses safe? That's a crazy amount of money.

Starting point is 00:29:40 Not a short amount of time, too. So 20 billion times the amount of time is in there. It's pretty crazy. And I don't think we're going to talk a bit about treasuries in a little bit, but like Dow treasuries are getting absolutely massive. And Dow governance is getting much more sophisticated and it's getting much better. This is a image of snapshot, which is kind of a governance tool across all these platforms, all a whole bunch of Dow's.

Starting point is 00:30:06 It aggregates Dow's inside of kind of one user interface. 574. Yep, Dow Governance Explorer. Five hundred and 74 different Dow's here. Wow. You know, it's crazy. How many billions of dollars? Look, this is, this is decentralized coordination.

Starting point is 00:30:24 It's super cool stuff, man. These are internet, internet organization. That's what they are. Internet, native organizations. Internet institutions, if you will, digital institutions with on-chain governance. Wow, interesting. With a foot in the legacy world as well. And speaking of which, this is Tyler Winkle-Vos from Gemini.

Starting point is 00:30:45 With the laser eyes on. Nice job, Ty. He put out a tweet, I've just proposed a proposal, post-a-proposal rather, for GUSD. That's Gemini dollar, so it's similar to USDC. not quite as popular, but it is a stable coin that is crypto bank backed. Just put that in as a collateral option on AVE. You know, what's kind of cool is I like that Tyler and Cameron are like digging deep on this DFI space. Like here he is. He, you know, like owns an exchange, this billionaire, and he's posting on AVE governance forms, posting a proposal on AVE governance forms.

Starting point is 00:31:22 It's just in a transparent way. It's super cool to see how all of this. this works. What's your take here, David? Yeah, so it's pretty cool because we always want more assets inside of Ave. That's always a good thing. And naturally, I'm sure the Winklevoss twins, with their interest in expanding on the utility of GUSD also wants that to happen. But I think what really, if we want to really read between the lines, bankless listeners should ask themselves, what happens when GUSD turns into a yield-bearing instrument inside of Avey? And what can that, what can be done on the Gemini website, the Gemini front end to its users because the GUSE stable coin is now interest bearing because of AVEA. How are those two things going to be linked?

Starting point is 00:32:06 Is it something like the defy mullet with fintech in the front and defy in the back? Question mark? It's always the defy mullet, David. Always. That's always the answer. You know what's cool to see too is like crypto banks can be like defy friendly too. So I sort of, I see, I see crypto banks like finance trying to like consume defy. Not necessarily collaborate it, collaborate with it, but more consume it. So Binance launching the finance chain, we're going to give all of our liquidity to that. Binance deprioritizing ETH and trading its B&B pair, right? So like that's one tack a crypto bank can take.

Starting point is 00:32:42 Let's just eat it all. Maybe not, right? But definitely very profitable, at least in the short run. But there are other crypto banks that are taking a different tack. and they're collaborating more with DeFi protocols. And I mean, we definitely have a preference with which ones we like. But I think we're going to see both of these strategies play out on the crypto banking side. It's good to see some crypto banks collaborate with DeFi more than try to build against them.

Starting point is 00:33:09 And we have a Twitter conversation with Hester Pearson, who is the SEC Commissioner. I think that conversation is going to be relatively similar to what we're talking about here, where there's different ways to have alignment with defy protocols. And it seems to be that Gemini is choosing to align with defy protocols rather than being in opposition towards or trying to, like you say, consume. And so I think that's the appropriate stance that large-scale institutions should have. Do you know Hester Pierce, SEC Commissioner, as he said, she was familiar with the defy knowledge. She actually quoted it in a speech, apparently. Yeah.

Starting point is 00:33:45 Bankless Lister. Hey Hester, if you're listening, that's going to be an exciting episode. Looking forward to that one. David, let's talk about another defy index product. This is from index co-op. This is called the FLI. This looks like a leverage sort of token play. What are we looking at here?

Starting point is 00:34:05 Yeah, so it seems to be the FLI flexible leverage index is a kind of a token standard or a standard produced by the index co-op to produce leverage tokens. And so naturally, the most obvious leverage token that they're going to produce first is 2x eth. And so it's a single token that represents a 2x long position on ether. And so if ether doubles, you should get more than double of what you got. And if also if ether gets cut in half, you should get liquidated. That's probably how it's going to work. But the cool thing is, is that it's embodied into one single token.

Starting point is 00:34:36 So one single token represents 2x exposure to ETH price movements. So that's pretty cool. The other cool thing about this is this is generalizable. And so what do we think will come next? Perhaps a 2x BTC token, perhaps a 2X Uni token, perhaps a 2X AVE token, you know, long or short or whatever. I think this is going to be one of the next big things to come out of the index co-op. I know there's going to be massive demand for this product because folks in crypto are also degenerates, David. But like, what do you doing when you need 2X on volatile assets like eat the defy tokens?

Starting point is 00:35:11 Like, is there not, are you not getting enough adrenaline for the space? You want to take more risk and more reward? Some people, Ryan, are just got, have gotten used to the volatility, and so we need more volatility or else it's just the same, you know? Always more volatility. I get it. I know there's, there's going to be demand for sure. All right.

Starting point is 00:35:29 Let's talk about zero X protocol is going live multi-chain. They're going live to the Binance smart contract chain. This has been a theme we've talked about a lot where many of the, these D5 protocols are going cross-chain, whether that's a side chain, something like Binance or whether that's layer two, something like an optimistic roll-up. I think Xerox protocols basically, if you see this image here, you kind of see what their strategy is. We'll just deploy our protocol on all of the chains everywhere, as is kind of the shotgun approach, which we've seen before. Any takes here? Yeah, and so this actually makes a lot of

Starting point is 00:36:08 sense for what the 0x product is because 0x isn't actually hosted anywhere and I think this is correct but I might I might need to be double checked on this but zero X is just a protocol for making bids and asks on a secondary market but those they're an aggregator they're an aggregator and importantly it's just a it's a standard for passing messages between each other and so like you know I'll make an order on the zero X protocol on some Ethereum system and it says I'll be I'll take this token for this price, and then 0x standardizes that and broadcast that to all the other order book managers, but those people don't have to be on Ethereum. So 0X is actually technically very blockchain agnostic, and this is just also a smart business decision for those that are

Starting point is 00:36:51 trying to maximize, you know, return or maximize value to their token, right? So anytime X can facilitate trades, capture some fees. And with the other thing that this does, this allows the free market to express itself. And so I'm not going to put on my ETH maxi hat, be like, oh, well, You know, they're just doing it for the, you know, just for the be the cross train. Like, no, this gives the opportunity for the market to say to 0x, hey, you know, maybe there's a lot of volume on Pocodat, but not very much on Solana. Like, this will allow X X to discover that. Or maybe there's a lot on Solana, but not very much on optimism. Like, this is how 0X discovers what the market wants.

Starting point is 00:37:27 And so this is a good thing. It's just going to discover that it wants to be on Ethereum. That's just what it's going to discover in the long term. There it is. There's David Hoffman. He's come back. Welcome back, David. Yeah, you know, look, Xerox is an aggregator.

Starting point is 00:37:42 Like, fragmented liquidity is good for them, right? Of course, they're going to try to be everywhere. There's some sorts of liquidity. We saw one inch do the same thing. One inch is a D5 protocol aggregator as well. Of course, they made a big show of going to Binance Smart Chain, but they got to Binance Smart Chain in a hurry. So not surprising at all, as you say.

Starting point is 00:38:02 David, we got to talk about something with NFTs and releases, because NFTs are always releasing something new, but this is kind of a cool project, ether. Dot cards. It's been a long time in the making. What are we looking at? Are these just kind of NFT art cards? What's the coolness here?

Starting point is 00:38:18 I mean, like, I like the design, but this card is 55 eth here. I'm not sure that it's been my eth on it, but what are we looking at? Yeah, I actually don't know, but everyone else is talking about this. So that's why we're talking about it. These designs are super sick,

Starting point is 00:38:32 and so that's pretty cool. And so I wish I knew more about it, but we're putting it into the roll up because everyone else is talking about this. And so there's some deep Ethereum history going on here. So texture, okay, Anthony, he's got a feature here. There's just some like, I don't know how these designs came to be, but something's going on here. I don't know what, but the designs are dope. And so that's what's going on. It looks awesome.

Starting point is 00:38:57 And, you know, with NFTs, there's no rhyme or reason to which ones blow up or not. just kind of a pure meme at this point. So this seems to be catching on. Pretty cool stuff. All right, David, let's get to news. What is going on in the news? We've got to start with a macro. You mentioned the stimulus checks early on. The stimmies are here. What happened with the stimies? Biden administration, of course, Democrats in control of Congress approved a $1.9 trillion bill. You know what's crazy is a lot of this, of course, is this is different than some of the quantitative easing type monetary policy decisions. This is what Ray Dalio calls monetary policy three, MP3, which is like fiscal decisions.

Starting point is 00:39:47 Those are congressional decisions actually push out money to the people. They control the money printer. And that's what's going on. It's basically this is helicopter money directly to the people. So people are getting $1,400 checks. I know you said this before is last time we've seen this. Of course, this isn't the first time we've seen this in the COVID era. But the last time we saw this, we saw a big inflow into crypto, into Coinbase specifically.

Starting point is 00:40:15 And this is a headline here from MarketWatch. Americans are ready to pour $40 billion into Bitcoin and the stock market as stimulus checks arrive survey. So they're just asking people like, what are you going to do with your money? Yeah. Yeah. And they're like, what else? I'm going to ape into Bitcoin. That's what I'm going to do.

Starting point is 00:40:33 Let's just say there are a lot of people who need these stimulus checks. So we don't want to discount all of the people that are using this to actually like pay for things that they need in their lives. And do what they were supposed to be doing, which is boost the economy. Yes, totally. But there are also a lot of people that are getting these checks that don't. And what are they going to plug them into? I got the check. What are you doing?

Starting point is 00:40:56 Well, just tell us. what are you doing? Perhaps might be aping into ether. Perhaps. There's David again. Well, so like, I mean, what about friend groups, man? Like, so what are your friends doing? Do you have any sort of informal, I guess, surveys?

Starting point is 00:41:14 Yeah, no, in all seriousness, I'm trying to be a good citizen by consuming more restaurant food that is trying to innovate and serve takeout in a way that they weren't really supposed to. And so that's what I'm trying to do with my stimulus check. is going out and trying to patronize businesses that are having a tough time generating income, but are trying hard to do that. And so there's a lot of restaurants in my local neighborhood that have figured out how to make takeout work that weren't really a previously a takeout restaurant. And so I guess that's what I'm doing with my Stimmy checks, is I'm eating restaurant takeout food that's kind of more highly priced than what I typically

Starting point is 00:41:51 would pay for. Well, you know what's crazy here too is David. I'm sure there are a lot of Americans that are doing that. there are also a lot of Americans 40 billion worth or so that are just going to plug it into assets because they have nothing else to do with it. And this is like this is part one of two that's coming from the Biden administration. This is kind of the rescue phase. But there could be another $3 trillion bill that comes down the pipeline being sort of a yeah, sort of a recovery part. Right.

Starting point is 00:42:19 So this isn't necessarily the end of the money printing either. There's like a tsunami of treasury. issuance that we might see here in the near future. But you know, it's a disturbing thing is this graph, dude. So this is U.S. household net worth. We are at record levels of U.S. household net worth. And that sounds so weird because we've just gone through an economic downturn, like a year in COVID. So how could this be? We're at now to $130 trillion in U.S. household net worth. it's not being distributed. It's not evenly distributed across the people.

Starting point is 00:43:00 But Americans are on average richer than they ever have been, which is crazy. But what would happen if instead of using dollars to gauge the value of net worth, we use something a little bit more stable and perhaps less political, which would be gold, as a good metric? And I don't think that the average net worth of houses in gold terms would. actually be all that crazy. I think I can make an argument that what we're actually seeing here is the devaluation of the dollar. Yeah. And the only way to keep pace with the value of the dollar and ask, so again, we don't have necessarily CPI inflation as hard, but we do have asset price

Starting point is 00:43:40 inflation. The only way to avoid that was to buy stuff. You had to buy assets. You had to buy stocks. You had to buy crypto. You had to buy real estate. And that's how you've kept price with inflation. But what it does, David, is it creates this massive inequality that I think the world's going to have to reckon with. It's one of the major problems that we're facing here now. Yeah, absolutely. And this is why I'm always so on the fence about UBI, because UBI is great because it puts more hands into more people. And so it's using the money printer to get more money into more people's hands when previously it was just strictly a very tight contillion effect where only the rich would get access to the upside of the money printer.

Starting point is 00:44:22 Now we're giving access of the upside of the money printer to as many people as possible, $1,400 for all adults. But again, like the U.S. dollar is a global reserve currency, and the U.S. adults are only as very small fraction of the global population that uses the value in the dollar to transact. So it's still not being all that dispersed. Yeah, absolutely. And Ray Dahlia would say this is just the last part of the late stage.

Starting point is 00:44:50 debt cycle happening where where citizens are getting the funds directly through fiscal stimulus. David, let's move over to crypto stuff. Bitcoin first. Morgan Stanley is now the first big U.S. bank to offer its clients, particularly wealthy clients, access to Bitcoin funds. This is another bank capitulating on crypto and jumping aboard the crypto bus. I think this is actually kind of the the first big major bank to give direct on ramps to Bitcoin. And so the important thing is that Morgan Stanley is building out three funds that are all exposure to Bitcoin. And importantly, customers of Morgan Stanley, when they send money into this fund, what

Starting point is 00:45:33 happens is that Morgan Stanley goes and buys Bitcoin on spot with it, right? This isn't cash settled futures. This is direct Bitcoin exposure. And so any interest can get funneled through Morgan Stanley. and ends up being buy pressure for Bitcoin. And so that's pretty cool. That's very unique. And the thought, the bullish thesis behind this is that this is going to make many other banks,

Starting point is 00:45:56 Goldman Sachs, you know, all the other banks that can't rattle off right now, they're probably all thinking is like, well, Morgan Stanley's doing it. And now we got to do it because they did it too. And so if we want to be able to offer very similar services to our customers, we're also going to need to generate very quick, strong pipelines between our customers' money, and Bitcoin. Yeah, it's crazy. Here is this quote.

Starting point is 00:46:19 Morgan Stanley considers it suitable only for people with aggressive risk tolerance who have at least two million in assets held by the firm. It's too volatile otherwise is what they're saying. Yeah, there's some gatekeeping going on. But if that's what they needed to do to get compliance happy with this, to get this out the door, fine, whatever. Yep, absolutely. All right.

Starting point is 00:46:39 Michael Saylor bought some more Bitcoin. Another week goes by, another Michael Saylor by. he added 262 Bitcoin this time, 15 million. The weekly dollar cost average from Michael, Michael. Yeah, I guess we'll report on that every time. This is cool, though. This is breaking. Is this company called Me Too?

Starting point is 00:46:58 This is a Hong Kong listed company. I'm going to say Me Too. Me Too Incorporated. They purchased another 16,000 Eth and another 386 Bitcoin. That's almost 30 million Eth and just over 20 million Bitcoin. So more publicly traded companies adding crypto to their balance sheet, what's interesting about this is this company decided to buy more eth than Bitcoin. 57% in ether as part of this $50 million purchase and like 43% in Bitcoin. What's your take care?

Starting point is 00:47:33 And this is also the second time they've done this. They did this last week too. And so they're also just like micro strategy where they filled their bag and then they filled their bag again. And like now this begs the question, are they going to fill their bag the third time, right? And Anthony Sizzano, I think we're just repeating this exact same take. I'm going to do it again on this week. And Anthony Sizano had a really good take where, you know, there's one thing to have all the American S&P 500 companies, FOMO into Bitcoin because of micro strategy.

Starting point is 00:48:02 But what about the rest of the world? What about all the other companies who are trying to protect their treasuries? All the ones, all the companies in Japan, China, you know, Korea, like all the African companies. All companies everywhere are going to feel this fomo to get into crypto assets to protect their treasuries. And what this company Me Too is doing is, again, they filled up their bag. Interestingly, like you said, more ether than Bitcoin. And then they did it again.

Starting point is 00:48:27 And so this is a game of chicken that some people are really, really taking advantage of by moving really, really early. Hopefully it works out for them. David, not too long ago, we just had a conversation with Ryan Selkis from Masari. You know, great great folks at Masari. but Ryan was claiming that corporate treasuries of publicly traded companies wouldn't buy ether. It's just Bitcoin, Bitcoin, Bitcoin. And that's like we're like three months later and they're already buying ether. Right.

Starting point is 00:48:55 Like this is something that we've predicted is Bitcoin is the gateway to ether. So the way to front run this Bitcoin buying that Michael Saylor is doing is for publicly traded companies to go buy ether. I mean, I think that's going to catch some steam too. I'm not sure if it'll happen internationally first and then later come to the U.S., but it's starting to happen now. Yeah, that's exactly right. David, why earn V2? Why earn is sort of a defy money aggregator in itself.

Starting point is 00:49:30 Yield aggregator. They launched their V2 and now it's passed V1 in terms of value locked inside of the protocol. What does this mean for us? Yeah, and also interestingly, Uern V3. V1 also still has plenty of TVL locked up inside of it. So the aggregate is pretty fantastic. And so there's been some bearishness, I think, with urine lately due to like government's decisions that people felt unsure about. But then there's also this other side of people that are extremely bullish urine in the long term. And I think we are starting to shift from a consensus

Starting point is 00:50:05 of like kind of bearishness on urine to like, oh yeah, no, urine is, urine is going to be the gold standard for yield aggregation. I don't personally have an opinion on this. But I'm always happy to see TVL and Defi apps go up into the right. So nice job, YourN. Uni is rolling out its grants program. They funded 23 community projects this quarter as part of 2021. You know what's crazy about this is the absolutely massive balance sheets that some of these defy protocols have. So Uniswap alone has something like 14 billion in Uni tokens in their treasury under management, right?

Starting point is 00:50:42 like 14 billion dude billion billion I mean how fast do you have to give money away to grants to like to like get through that and by the way 14 billion but it's in unitokens right so and growing like that could easily be 30 billion right in a few weeks you know um it's good that they're they're they're doing this but what what's your take on what are these defy protocols going to do with these massive treasuries david they're infinite it's going to be infinite funding infinite funding infinite funding. And especially if the Federal Reserve keeps on printing dollars, they actually won't even really need to sell all much of those unitokens because they're going to go up in U.S. dollar denominated prices faster than they can spend those things. It's going to be crazy.

Starting point is 00:51:24 It's literally infinite funding for the rest of time for Uniswap. This is the other reason we keep harping on every single week, usually toward the end of these episodes that if you're interested in getting a job in crypto, like if you can add something to the space, go get a job. Uniswop has $14 billion for you. You can probably. get some of that. All you have to do is give something to the protocol that it wants. What does Uniswap want? I mean, Defi is definitely much better funded this cycle than any previous cycle. So if you're looking to get involved in the crypto economy, in the DeFi economy specifically, there has never been a better time. Uniswap has infinite cash. As a listener who likes cash,

Starting point is 00:52:07 You should understand that Uniswap has an infinite amount of cash. And if you want cash, maybe you should go talk to Uniswap. You know what? I think they're also figuring, I think all of these Dow's with massive treasuries are trying to figure out how to award them back to things that the protocol wants, how to manage that process. So they're not necessarily going to be able to turn it all up now. It's going to take some time. But this is the spiket that's starting to happen with this grants process. and I think it'll just expand moving forward.

Starting point is 00:52:39 David, let's talk about a kind of a hack, a hijacking, maybe is the better word. So pancake swap, which is on the Binance Smart contract chain, and also Cream Finance had a DNS hijacking. What happened here? Yeah, so they got their front pages hot swapped with a malicious one. And so this is just another monster in the dark force that users should be aware of. And so the cream finance and the Pancake swap front ends when you went to the website, they would show you a fake page that asked you to input your seed phrase or your private keys.

Starting point is 00:53:10 And naturally, educated bankless users will know to not ever, ever do that. You don't give up your private keys. That's the number one rule. And so if you, and this can be, this can happen to any defy app website. So this is something to take note of. Don't put your private keys into any website ever, unless you know what you're doing. Don't put it anywhere. Anywhere.

Starting point is 00:53:33 And so if you ever come across a defy app and it says, like input your private keys double check go to the team's discord like you know make sure you make sure you know what's going on this is also example don't get in by the monster this is also an example david of crypto does solve this like an ens domain cannot be hijacked in this way dns domains can dot coms can dot orgs can dot net can but not a dot eith address uh so that's something that can be improved on to nfti stuff google searches for nfts are booming david we showed this in the state of the nation. We should show it here again. This is interest over time on Google searches. In yellow is is ETH. In red is DFI. In blue is NFTs. Look at this. This looks like escape velocity to me.

Starting point is 00:54:17 This is this. By the way, if you can't see this, if you're listening on the podcast, NFTs are probably triple. They're triple Eith and they're probably quadruple or more 5X or so defy in terms of search terms. This is NFTs escaping outside. side of the crypto bubble that we're living in and reaching mainstream. I think that's what we're seeing here, David. Any thoughts? Yeah, exactly right. My mind just goes back to Andrew Steinwald, who said that NFTs are going to be orders of magnitude more than defy. And when he said that, back in September of 2020, I was like, no, it won't. And it turns out he got that one right. Yeah, for sure. Check our episode with Steinwald that came out earlier in this week for more info on that.

Starting point is 00:55:00 That was a great episode. Speaking of NFTs and memes, Bad luck Brian He sold this Good luck Brian maybe He just sold an NFT for 36K This is the famous bad luck Brian meme Yeah it's like it's like it's been everywhere

Starting point is 00:55:18 But so Early internet culture Did actual bad luck Brian Because anyone could create this Anyone could create this NFT right But did bad luck Brian actually create it and sell it Yeah bad luck Brian actually did create it and sell it and that's why it went for $36K. $36,000.

Starting point is 00:55:38 Yeah, Brian's name isn't actually Brian. I think if you scroll down and something else. But yeah, the internet just named him Brian for some reason. His name's Kyle. His name's Kyle. So Kyle, the guy in the yearbook photo sold that meme for $36,000. And again, this goes back to that same comment I made about the Nion cat that got sold for 300 Eath.

Starting point is 00:55:59 It was the original artist made a brand new gif. that was exactly the same, looked exactly the same, but it was brand new, and he NFTed that. And the reason why it went for 300 Eath was because the original artist has the credibility and the legitimacy to issue the NFT. And since Kyle, aka Bad Luck Brian, is the actual person in the photo, and he owned that photo, because that's his yearbook photo, he had the legitimacy to mint this NFT and sell it, and it got sold for $36,000. People think this is crazy, but it's not crazy. I mean, think of like a, the difference between an autograph signed by a celebrity, a real autograph versus a, like, a copy of that

Starting point is 00:56:38 autograph on a poster or something. And you provably only have one autograph ever signed ever. Right. I mean, we do this in the physical world all of the time. This is just porting that to the digital world. Authenticating an NFT from a private key is the new autograph. The hot take here is that this proves that you can capture the value of a meme with an NFT. That's what this proves.

Starting point is 00:57:02 There you go. That's what Elon Musk is trying to do. He's trying to sell a song about NFTs as an NFT. What is this? This is so meta. Oh my God. This tweet got almost 230K likes. This is his NFT I wonder why NFT search terms on Google are skyrocketing above and beyond defy. I wonder why that happened because the world's richest man tweeted out a which is a banger of a song. Ryan, can you play that audio because it's a banger of a song? Yeah, let me play it here. I haven't listened to this before. It's amazing. It's a banger, man.

Starting point is 00:57:41 This is actually a song. So would you buy this, David, for the right price? Absolutely not. Well, he's not selling it. Wow. Okay. That's, yeah, good song. Definitely worth something.

Starting point is 00:57:54 But then he says this right under it. This is probably like a day later. Actually, it doesn't quite feel right to sell this. We'll pass. Yeah, we got. controlling us a little time. I'm pretty sure that must have been crimes that made that beat for him, his wife. Yeah, nice, and she's definitely in the NFT scene.

Starting point is 00:58:12 So, look, it won't be long before he actually sells one. This is interesting while we're on Tesla news. What's Tesla? Are they renaming their executives? Yeah, Elon Musk, again, taking the meme to a full new level. Elon Musk is now, what is his title? Techno King of Tesla. and then also the CIO chief investment officer, I think.

Starting point is 00:58:34 No, CFO, chief financial officer, is now the master of coin, which perhaps is an allusion to Bitcoin. Yeah, that's hilarious. I mean, no one understands the meme game like Elon Musk, at least from the traditional world. He's really masterful. In fact, some people are arguing that like Tesla, the stock is a meme in and of itself, which, you know, we're in a meme world.

Starting point is 00:58:57 It's very bullish is what that is. It's bullish. That's what David says. All right, this is Scott Lewis on the NFTX protocol. He says, check out the power of the NFTX protocol. What are we looking at here, David? Yeah, we are looking at what very much seems similar to an AMM interface. And there is an interface here for buying basic cryptopunks with ETH, right?

Starting point is 00:59:20 And so what's happening here is Scott is going into this, I don't know where this is. Or this is NFTX, of course, is the NFTX protocol. And he's putting in a 21 ether to buy a basic cryptopunk. And what the point of here is that this is fungibilizing the non-fungible tokens of crypto-punks, right? And so he's just saying, I don't care what crypto-punk you give me, give me 21 ether worth. He just put 21 ether into the interface. And then NFTX says, okay, you want to give me 21 ether?

Starting point is 00:59:51 I will give you one crypto-punk. That's how much one crypto-punk is worth. So it's actually generating liquidity across these non-fungible tokens. making them more fungible. And this is kind of where I think NFTs can really mark as whether or not they've hit escape velocity or not is whether they are sufficiently liquid that something like this from NFTX can be established where you can just put in money and see like, don't care what you give me, just give me something. And outputs an NFT that is equally valued as the rest of the NFTs in that set.

Starting point is 01:00:22 So that's pretty cool. Yeah, it's like it's like saying like I want to buy modern art. And then you just like in a liquid way, you're able to get modern art. It seems kind of weird that we're taking non-fungible tokens and converting them back and making them fungible. But I think the reason is what you said is it's liquidity. We want liquidity on these things. We don't just want sort of an eBay like bidding auction process. We want insta cells.

Starting point is 01:00:47 We want liquidity for them. And Cryptopunks seem really well suited to this. I'm not sure that other NFTs are as well suited to this. Yeah. Do you have any takes there? Yeah, it's NFTs that are combined in sets, I think, is probably where the start. I'm sure more financial engineering can expand this out. But the point is, is this 21 ether, which is a lot of money, is only moving the price by 1.6%.

Starting point is 01:01:12 That's crazy. Oh, wow. I didn't even see that. That's crazy. Very cool. Cool stuff going on in the NFT space. Stuff that's not really possible in the traditional world. David, let's talk about this on the regulatory front, the CFTC.

Starting point is 01:01:26 This is the Commodities and Futures Exchange. They're coming after Binance for providing CFTC regulated products to Americans, particularly. Anything going on here? This is a report that investigation is going on. So not necessarily any kind of conviction. But what's happening here? Right. So Binance inherently is an illegally green.

Starting point is 01:01:56 gray area and that's why they operate. They are they don't they're not domiciled anywhere. They try as a company to try and exist as only on the internet as possible. And it's because they know that what they're doing is not complimentary with nation states. And finance specifically doesn't do a very forceful job of making sure U.S. citizens can access finance. Everyone knows that you can just go to the bind, the non-U.S. version of Binance under a VPN and you won't be asked for your KYC information, which is a big no-no because they are serving customers with financial products that are regulated by U.S. or three-letter organizations. That pisses Uncle Sam off. And so this is part of the story of whether or Binance can keep itself protected from the nation state.

Starting point is 01:02:41 This is going to be, I think, a very long, drawn-out story where they're not as egregious as Bitmex. They're a little bit more responsible than Bitmex, and they are offshore, and so they're protected. They're not domiciled in the U.S. and CZ, I don't think even goes to the U.S. anymore. But this is a story of, like, how close to the sun is Binance flying, and are they flying close enough to get caught by U.S. regulators? You know, it's interesting here is, like, I see some people in crypto kind of cheering the CFTC on, and then other people saying, like, why are you cheering on a regulator?

Starting point is 01:03:14 I thought this was about, like, free markets and sort of anti-nation states, anti-regulation. But do you know what? Like, all of that is almost not the point, right? With defy, you almost exist extra regulation outside of the regulation. I love when Uniswap marks down its jurisdiction. I saw a list of all of these exchanges, and their jurisdiction is the Internet. It's just code, right? Planet Earth.

Starting point is 01:03:42 You can't regulate open source code that just lives inside of a protocol. So whether you're pro-free markets or pro-regulation and consumer protection, none of that matters. I think that the question that matters is, is our crypto banks going to be able with physical presence in meat space jurisdictions, are they going to be able to exist outside of the nation state law? And the answer to that, David, is probably no, which brings us to our next point, finance hires former U.S. senator to help navigate regulations. I wonder why they're doing that. They know that this battle is coming, right? And so they know that they are doing things that are not aligned with the interests of the nation state. And so they are getting ahead of the issue.

Starting point is 01:04:28 That's what that says going on. Absolutely. And it's all back to kind of like crypto bank plus politics equals kind of the overlords of our existing system. Yeah, been there, man. Doesn't make me feel comfortable. Let's bring on defy. All right. Why recent developments in Canada suggest a Bitcoin ETF is coming soon to the U.S.

Starting point is 01:04:51 US, that's the headline. Canada's getting some Bitcoin and even Ether ETFs. I've heard some people in traditional finance say that Canada is like a great testing bed for US financial products. So like, there you go. America's attic. America's upstairs. America's hat. And maybe that's the case here. So like if Canada's doing it and Canadian citizens have access to these products, like does that not erode the argument that US and, Americans aren't sophisticated enough to be able to handle a crypto ETF? Well, every single day that there isn't a Bitcoin or Ether ETF starts to be, it moves, that issue moves closer and closer to the realm of a political decision about the value of

Starting point is 01:05:36 the U.S. dollar. The Canada doesn't have this disinterest behind listing a Bitcoin ETF because the Canadian dollar is not the global reserve currency of the world. If it was, that would be a different relationship between Canada and Bitcoin. So maybe that's why that's going first. But as we know, the Bitcoin ETF is long overdue. And every single day that it isn't delivered is another day that there's a political statement being made that the United States does not have the interest of Bitcoin and instead wants to protect the interests of the dollar.

Starting point is 01:06:06 That's interesting because the SEC specifically, which would give the stamp of approval on that, they're supposed to protect the interests of the retail investor, which is not even in the jurisdiction of U.S. monetary policy. I'm not sure why they're holding up. It's a good question for Hester Pierce, although I know if she could, she would have that approved. David, let's talk about this last news item. Bill Gates is worried about Bitcoin. Why is he worried? Yeah, this issue just does not seem to leave the Bitcoin news cycle.

Starting point is 01:06:36 So we've included it. It's about the climate. Proof of work is climate is economically expensive. And economically expensive things ultimately involve impacting the climate. Proof of work, as we know, doesn't do good things for the climate. It's extremely resource consumptive, and things that are resource consumptive, especially when things are strongly resource consumptive, ultimately impacts global warming and the climate. And so people that are very climate-focused won't like this. And while there are very strong arguments about why Bitcoin's energy consumption can in the long-term be green, you have to do a really strong job trying to make that argument for, the rest of the world because that argument is usually coming from Bitcoiners who want to see Bitcoin succeed, not from non-Bitcoiners who are still on the edge of things. Non-bitcoins who are still on the edge of things are going to see Bitcoin's energy consumption and say that that doesn't fit

Starting point is 01:07:32 in the world that we are trying to create in the future. And so I actually think that Bitcoin, the climate change conversation around Bitcoin is actually one of the biggest threats to Bitcoin that Bitcoin has ever faced. I actually think you're right, David. And you know the way to completely diffuse this threat? I have an idea. Proof of steak, my friend. Proof of steak. So if your engine doesn't consume any carbon whatsoever, any energy whatsoever, yet you can produce a sound money, maybe even an ultrasound money, as a result, why do you need proof of steak?

Starting point is 01:08:07 That's the question. It's a spicy take. We'll get there soon. Let's talk about other takes for the week. We're on the take section, my friend. So here's another spicy take. All right, here it is. Now, one of the interesting things about ETH, and I know you guys are kind of ETH is money,

Starting point is 01:08:24 ETH's store of value, the number of addresses with a couple hundred dollars worth of ETH is increasing at a faster rate right now, right? So we kind of, we believe that ETH is becoming kind of this store value for the people and Bitcoin is becoming this store value for institution. Cool. There it is. Background music and everything. Who is that speaking, David?

Starting point is 01:08:47 Yeah, that was Nick from the one confirmation guys. Nick and Richard, which we had on the podcast this Monday. What Nick is talking about is he's talking about the number of Ethereum addresses that have over $100 worth of ether is going up into the right. And specifically that number is increasing at a faster rate than Bitcoin. And so we are the, and if you go on and listen to that podcast, which everyone should listen to, it was a fantastic podcast. Nick talks about how he's seeing more and more individuals use ether as money inside of Ethereum and their own personal finance. and then institutions are using Bitcoin as their store value crypto asset, right? And so there's this discrepancy that Nick is describing behind individuals and people. The ether is money for the individuals and for the people, yet Bitcoin is money for the large-scale institutions, which I think is a pretty interesting dichotomy between what these two assets are trying to do. Yeah, absolutely. It's a great take.

Starting point is 01:09:40 And I think he's backing all of that up with data. And look, the NFT market is one example of that. So the currency for NFTs right now for creators and artists is Ether. It's not Bitcoin. And their fans. That is a money for the people. So we'll see if that continues. It's super interesting.

Starting point is 01:09:57 I do think Ether is also becoming institutionalized. So maybe it can be a little bit of both. But it's nice that it's coming to the people first. Yeah. Like I've been saying on the Bankrupt program from day one, money is a bottom up by the people chosen instrument. And so when I see more unique humans, choosing the same money, that makes me optimistic. I want to be where the other unique humans are.

Starting point is 01:10:21 Yeah, yeah, exactly. Well said. Ryan, this is your take. You want to hit me with it? Yeah, so I tweeted this out. There are three types of people in crypto. The first type is tourists. The second type is mercenaries. And the third type is settlers. So tourists, we see them every bull market, David. And then they go away in the bear markets. They just come and go into this space. Fair weather fans, that's it. Then we see this class of people who just do whatever makes the most money, right?

Starting point is 01:10:54 So they're mercenaries. Profit maximalists, these are traders. These are people who will just like don't really care necessarily to build things. And by the way, I don't blame them. There's always going to be mercenaries and they definitely play their part and so do the tourists. And then there's the settlers. And these are the people who are here to actually make up a home here. like homestead, basically settle and build new lasting economies, the digital land, this new

Starting point is 01:11:23 infinite white space is their home. I think it's just important that people know that there are all of these different actors inside of the crypto ecosystem with different time horizons. The tourists are just here to make a quick buck. They don't necessarily understand even what they're buying. Does number go up or not? If it does, I'm happy. If it's going down, I'm out of here. I'm back to the traditional system. The mercenaries, like, they're not necessarily here to build something lasting. So these are more short-term game players, not long-term game players. It's the settlers I get most excited about because we, you know, as we say so often here, David,

Starting point is 01:12:00 we're really creating this new parallel economy and this new digital land. And so we need people to not only come here, but actually stay and build things here and suffer through the, you know, the bad weather and the bare markets and, you know, and the pain and everything that that comes with crypto as well. And we need that in order to build something sustaining. I do think that we're building a little bit of that in bankless. And, you know, that's, those are the communities I most identify with. But it's important for folks to realize there are these three different actors and players inside of crypto. Yeah, this is a really good take. And I would say I would add on to this where like you actually, when you come into crypto, you progress

Starting point is 01:12:42 through these stages, right? You start as a tourist for like, oh, number goes up. I'm here for the money. And then you kind of understand that, you know, this is something real here. And then, so then, therefore you stay for the industry. But then there's the final stage where you are here for what I call the political movement or the social revolution, which is people that choose to settle here because it's better here. And this take also reminded me of this part in the sovereign individual, which is on the bankless reading list. Everyone should read that book. And it talked about how armies back in like the 14 to 1700s, armies would, you know, would fight each other. And there would be the mercenary armies that would be recruited by some king to go and invade the land of some

Starting point is 01:13:26 people that lived on the land. And while these invading mercenaries could theoretically be more well equipped, more funded, more powerful, the settlers often ended up winning no matter what, because they had something to lose that they valued. And so they fought harder and they fought with more intent rather than just being a brain-dead mercenary. And to me, that is the difference between proof of work and proof of stake, where stakers are the people that live by the protocol, die by the protocol.

Starting point is 01:13:54 They believe in the protocol. So you are rewarded in proof of stake. You are rewarded with the currency that you think is going to maintain itself for the rest of time. Mercenaries with proof of work, you are just recruiting hash power. And so there is some alignment between proof of work miners, but at the end of the day, proof of work miners believe in silicon, not in BTC the asset, and they are selling BTC assets. So I think this can be extrapolated into the differences between proof of work and proof of stake. Yeah, you're right. There's a lot of important models here, actually, and it's maybe deeper than I even,

Starting point is 01:14:26 you know, meant it in the tweet, but like this whole conversion from mercenaries, the mercenaries, the mercenaries securing the network to settlers securing the network. that actually happens with proof of stake. And we've never seen a large-scale monetary system secured by settlers. I know we're going to get to that when we get to what you're excited about. But before we do one last take here, David, this is back to what we were saying about this land of opportunity that is crypto right now and that is defy right now. Can you talk about this tweet from Anthony Sassano? Yeah, this is Anthony.

Starting point is 01:15:03 Yeah, tweet from Anthony Sizzano. He says, quitting my quote unquote safe corporate job to join a defy startup set protocol in mid-2019 was both the best and riskiest decision I've ever made. For those who are around in 2019, you'll know just how fringe and niche defy was at the time. And it was in no way a sure thing. And then he finishes up with no regrets, smiley face. No one, I've never heard of anyone like quit their job and move into defy and be like, yeah, fuck, I regret this decision.

Starting point is 01:15:30 No one regrets coming to work in crypto. So this is your weekly call to arms. Why aren't you finding a job in crypto yet? Since the last time that you listened to the weekly roll-up, I told you to get a job. And then the time before that, I also told you to get a job. So we're on three weeks in a row, David saying, get a job. Why haven't you gotten a job yet? Have you begun looking?

Starting point is 01:15:49 Why haven't you moved into the Discord channels? Why not get a job? Why haven't you quit your job yet? Figure out a way to work in Defi. You're weekly lashing from David Hoffman telling you to get a job in crypto, right? So like there's definitely we were talking about earlier, about all of this. There's infinite money here.

Starting point is 01:16:04 There's a ton. There's a ton here. And there's a lot we need to build. Like, we're just scratching the surface here. It is definitely an exciting time. I will say one thing, though. He said it's the best decision, right? But he also said it was the riskiest.

Starting point is 01:16:18 And there's an element of that to you. Because I have seen David people come to crypto during the bull run with the expectation of this infinite money. Good times forever. but not fully equipped to deal with the volatility of the bear market. And by the way, like, these things happen in fractal cycles. So we're in a bull run right now, but we are going to get a bear run at some point in time. And, like, you have to have the fortitude and the foundation in place to persist through that.

Starting point is 01:16:53 When everyone else says that crypto is dead, it's never going to recover, it's never coming back. and like you feel that in your psychology and you feel that that mentally that can be a hard place to be too especially if you have a lot of your own assets in crypto and they are dropping that like the floor is falling out on those too so it is also a risky decision in some way so you know I don't disagree with anything that you're saying here but there's an element to you that this is more exciting there's massive upside but it also as we always say, this is also the Wild West. It's risky. Yeah, everyone needs to calculate their own risk. Like, I don't have a wife or kids, right? So I'm a pretty lean individual. I can ape into a new industry without thinking about repercussions to anyone, so I don't have to calculate that. But I also

Starting point is 01:17:44 got into crypto in February or March of 2018, which is already on the other side of the bull market. And that actually ended up working out for me. I ended up being okay, even though I was very late into getting a job in crypto because the bull market was on the way out, it still ended up working out. And the bull market is nowhere near on the way out. And so you still have plenty of time. But don't sleep on it. Get it done.

Starting point is 01:18:08 Yeah. Yeah. And the other thing about Bear Runs is, man, they're great for forming communities and like making friends, right? And like figuring out your niche in the space. So there's definitely some value there. You just have to have the fortitude to persist through. David, we are going to get to what excites you,

Starting point is 01:18:25 what I'm excited about to you, but before we do, we want to thank the sponsors that made this roll up possible. Synthetics is Ethereum's decentralized derivatives liquidity protocol. What does that mean? Synthetics is a platform for creating and trading synthetic assets, which are assets that are priced via an Oracle rather than bids or asks. Traders can use the Quenta Exchange, which hosts and trades all of the synthetic assets created by synthetics.

Starting point is 01:18:53 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. 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.

Starting point is 01:19:32 If you're a trader and you're looking for a trading platform and 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. If you want to live a bankless life, you need to get a Monolith Defi Visa card. Monolith is both a one-two punch of an Ethereum smart contract wallet, as well as an accompanying Visa card that lets you spend the money that you have in your Ethereum wallet wherever Visa is accepted. It's really a fantastic tool that lets you use Ethereum for what it does best, which is

Starting point is 01:20:10 holding and managing your financial assets, but also keeps you connected to the rest of the world's payment rails. Monolith also offers on-ramp services for getting your Fiat money into the world of defy. So it's trivial to top up your monolith card if ever you need to, and your deposited money goes straight into your non-custodial wallet. So your money is never held by a centralized intermediary because your monolith wallet is native to Ethereum. Monolith helps you transcend both the legacy and the crypto worlds because the money that you

Starting point is 01:20:41 hold in your monolith wallet has the power of defy behind it. Swapping assets on uniswap or earning yield in defy is at your fingertips. But with Monolith, so are the groceries at your grocery store or the coffee at your coffee shop. Go to monolith.xyz to sign up and get your Monolith Visa card today. All right, David, let's get to it. What are you excited about this week, my friend? Oh, I'm just excited about the crypto's best meme ever, which is ETH is ultra-sound money, pass it on, tell a friend, tell you. your mom, Ethan's Ultrasound money.

Starting point is 01:21:17 Hell, your mom? It's the new, yeah. What's mom going to do about that? She's going to understand that eth is ultrasound money, Ryan. Well, what is, okay, so what is ultrasound money, David? Well, first maybe we should talk about what sound money is. And sound money is money that holds its value over time. And ultrasound money, theoretically, is one that does an even better job at that.

Starting point is 01:21:39 And what could that possibly mean? How could you get even better at holding your value? And Bitcoiners understand this as, you know, in a world of infinite printing where Michael Saylor is printing micro-strategy equity to sell dollars, which are also printed to buy Bitcoin, it's unprintable, making Bitcoin very sound money is a good reservoir of holding monetary value across time. Ether is ultra-sound money. And ultrasound money is what you get when you introduce a mechanism into the native money of an economy that makes that native money, of the economy scarce as that economy gets bigger and bigger. I'm, of course, talking about EIP-159. The magnitude of the Ethereum economy gets relayed into the scarcity of ether because of burning

Starting point is 01:22:25 transaction fees. Also, what's good about ultrasound money is ultrasound money that isn't issued more than it needs to be to secure the economy. And so under proof of stake, as we were talking, alluding to earlier, proof of stake it needs to issue the least amount of money possible to fund security because it's inherently going to eth bulls who are inherently long ether and are interested in accumulating as much eth as possible. And so these bowls will take the lowest amount of new ether issuance as adequate security for Ethereum. So both we have two mechanism which reduces the issuance of ether to the lowest possible

Starting point is 01:23:01 rate that also still funds adequate security for Ethereum. And then we have another mechanism, which makes ether more scarce as it tracks the size of the Ethereum economy. And what ultrassound money is, when you integrate these two things, which are fantastic mechanisms, you create a shelling point for a unit that can hold its value over time. The magic meme power that comes in because of these two mechanisms is the thing that makes eth ultrasound, which is the fact that everyone is going to realize

Starting point is 01:23:32 that ether is going to persistently grow in value alongside the growth of the Ethereum economy. And people are going to want a piece of that and start to use that as money, making eth ultrasound money. Stay tuned for the podcast episode, dropping on Monday with Justin Drake, ultrasound money.

Starting point is 01:23:49 Again, tell your friend, tell your mom, tell your grandma. Now do you understand mom after David explained that whole thing what ultrasound money is? I hope so. If not,

Starting point is 01:24:01 look, that podcast that we did, people ask sometimes why we talk about ETH so much. And I think it's because we believe ETH is vitally important for the bankless economy. Without ETH at some stage, without trustless economic security backing the bankless money system, we're not able to go bankless. We also think that ether is probably the most underrated asset out there in crypto, maybe one of the most important and perhaps certainly the most underrated. And I feel like, David, this ultrasound money episode that we did with

Starting point is 01:24:37 Justin Drake, which guys, David mentioned, comes out Monday. That is almost a culmination of a lot of work that we've done, but also a lot of the crypto economic work that Ethereum researchers have done over the past few years. I feel like at some level, if all we ever achieved in bankless was producing that episode, it will have been worth it. that's how strongly I feel about this episode. And I know you were super excited after we recorded and I was like, that's a great episode. And you're like, it's the best ever.

Starting point is 01:25:11 I listened to it a second time. And I think that I completely agree with you. It may be the best episode I've ever listened to in crypto. And I don't say that because bankless is awesome. I say that because Justin Drake is awesome. The analogy he went through to explain Ethereum, It's economy, its economic security, is straight fire. So listen to that episode.

Starting point is 01:25:38 Tell your friends, we are not overhyping it. It comes out when, if you're a bankless subscriber, you have it now on the early access feed. If you're not, wait until Monday and check that episode out. You will not regret it. I think it is the episode to understand ether the asset and also Bitcoin the asset as well. So yes, David, ETH is ultrasound money. You're totally right. Justin Drake is a one-of-a-kind human in the sense that he is a fantastic bleeding-edge crypto-economic

Starting point is 01:26:10 researcher that also can communicate, which is not found often with people that have deep cryptographic technology knowledge. Like generally those things don't go hand in hand. But Justin Drake, he's both a cryptographic researcher who can communicate and use metaphor as well, but also the fantastic extra large chance. on top is the guy understands memes and what the importance of memes are. So I was chatting with him on telegram about like, how do we spell ultrasound money? Is ultrasound one word or two words?

Starting point is 01:26:41 Do we hyphen it? Do we not hyphen it? How do we meme this into existence? So not only is he delivering us the metaphor of ultrasound money, but he's also helping us meme it into existence because money is a meme. It's a shelling point. If everyone understands ether to be ultrasound money, then it becomes ultrasound money. So tell your great grandma about it.

Starting point is 01:27:04 We're going back multiple generations here to spread the word. Yeah, absolutely. Great episode, man. Ryan, what are you excited about? You know what, David, yours was so good. I'm going to leave it at that. I am excited that ETH is becoming ultrasound money. I'm excited about this meme, which brings us to the meme of the week.

Starting point is 01:27:22 What are we looking at here? Heath is ultrasound money. It's an ultrasound of Eith. So for the podcast listeners, what you can't see is literally an image of an ultrasound. And there's a little ETH baby in the ultrasound. Because ETH is ultrasound money. This is amazing. And I'm blown away by the amount of likes.

Starting point is 01:27:41 It continues to go up that this is getting. So the meme is coming into existence. Well done. Justin Drake. We are becoming ultrasound money. ETH is becoming ultrasound money. David, I think that's it, man. That was our roll up.

Starting point is 01:27:55 Let's wrap it up. Last thing, people should give to their get coin grants. Yeah, that's right. That's exactly right. Gitcoin round nine is still going on. And so if you have not yet downloaded, paid money to or donated, it was the word I was originally looking for, donated to your favorite Gitcoin grant. Make sure to do so before the time runs out. Again, outsized funding from donators to public goods. This is a special time in Ethereum. This is when we donate to the things that we use because when we donate a dollar, perhaps they get $10 or $50, sometimes even $100. dollars. If you appreciate something in the Ethereum ecosystem, express that appreciation with at least a dollar donation on Gitcoin. Absolutely, guys. And do not forget to fund Ethereum's layer zero, the social layer. Risks and disclaimers, of course,

Starting point is 01:28:41 eth is risky. So is Bitcoin. So is Defi. You could lose what you put in. But we are headed west. And you should get a job on the frontier. This is not for everyone. But we're glad you're with us on the bankless journey. Thanks a lot.

Bankless - ROLLUP: 3rd Week of March (Elon Musk NFT Song, Stimulus Checks, Canada ETF, Gemini & Aave)

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.