Bankless - ROLLUP: 4th Week of April (Venmo Crypto, Canada ETH ETF, Dogecoin & Safemoon, Ampleforth Airdrop)

Starting point is 00:00:01 Good morning. It is the fourth week of April. This is your roll-up from Bankless. David, how are you doing today? Absolutely. Fantastic. It's a great day inside of a great week. And we are going to go through all of the details about why this week was so great here on the Bankless Weekly Roll-up. Absolutely. So we're going to hit you with the market releases news, some hot takes, and then end with what we're excited about. Actually, scratch that. We're going to end with the meme of the week, as we always do. Meme of the week. Got to stay to the end to make sure you get the meme of the week. Of course, this comes out every Friday morning. Enjoy it with your morning. A cup of coffee, the fastest way to download the week that was crypto inside of your brains.

Starting point is 00:00:52 We do this as quickly as possible. David, we're going to get in in one second. But we have to mention it's Badge Week on Bankless. What happens on Badge Week? Badge Week is where we give away a bunch of cool stuff to people that own bankless badges. So if you are a premium member to the Bankless newsletter, you could have the bankless badge, maybe you have one already, and if you don't have one already, you can go get yours. And so go into your email and look for an email from Lucas at banklesshq.com

Starting point is 00:01:21 talking about how to redeem a bankless badge and then go do that. If you want to get a bankless badge, but you are not yet a premium member, become a premium member. And then at the first of the month, the first of May, you will get an email to redeem your bankless badge, which then you can get the bankless badge because the bankless badge is something that you want to own. We're giving away BAPs, these t-shirts that you see either me or Ryan or sometimes both of us wearing every single weekly roll-up, as well as Ether. We are literally giving away ultra-sound money. I can't believe we're about to do that. Yeah, and that's just indicative of how badly we want you to get your bankless badge. Your badge is an NFT, of course, that is minted and settled on the Ethereum

Starting point is 00:01:57 blockchain. So check that out. We want everyone who is eligible to grab the badge. There'll be some links in the show notes to you. Okay, David, you ready to get into the markets. Let's do it. This is going to be the biggest market section I think we've ever done this week. All right. Let's do it. Markets, let's start with Bitcoin as we always do. How's Bitcoin doing this week? Dude, Bitcoin is having some trouble.

Starting point is 00:02:17 Bitcoin's having some trouble. In the last, let's see, in the last 20 hours, there have been two pretty large volatile spikes downwards, down below $52,000, and it just had one right before we started recording just now. Bitcoin is at $53,300, and it's been down below $52,000 twice in the last day or so. So really just kind of holding on to the bottom of the $50,000 level. Some performance anxiety for Bitcoin. I've even seen some newsletter headlines or like news headlines coming out. Like, oh, is Bitcoin going through sort of a mini bear market?

Starting point is 00:02:57 But that's part of the story. I think the other part of the story is actually the rest of the market in crypto. is doing okay. It's kind of hot. So what we're seeing here, what I'm looking at here is Bitcoin dominance as a percentage of total crypto market cap. Explain this one for us. Yeah. So Bitcoin dominance is if you take all of crypto assets and you get an aggregate market cap of, I think somewhere, where are we? If you scroll up, Ryan, we're saying trillions, my friend. Trillions. Trillions. Multiple trillions. Two trillion in total crypto market cap. And Bitcoin is only right now at 54% of that. It has been.

Starting point is 00:03:32 previously as high as almost 70% of all crypto market cap was just Bitcoin, and now we have gone from the recent local high of 70% down to 54% and falling. And what this means is that people are moving down the market cap stack, right? They're going risk on with crypto assets. And the Bitcoin dominance has not been this low since 2018. And so we are back at 2018 levels of Bitcoin dominance. And this is, this is traders like to refer to this as where an alt season indicator. I know we don't like the term alt season. It's not a very nuanced term, but it's kind of just a way to categorize everything is that when when Bitcoin dominance falls, it's because people are working their way down the market cap stack and speculating on lower cap tokens.

Starting point is 00:04:23 You know what? I think dominance is going to fall further from here. You know what? What I'm often amazed at is over the long term, how many things that actually, um, actually like people get right. I mean, Chris Berninski is basically predicted some of these macro cycles previously that every single cycle that we have, Bitcoin dominance is going to start at a lower high, and then it's going to fall to a lower low from the previous cycle. And if you look at this Bitcoin dominance, I mean, it looks kind of like a version, a fractal version of what happened in 2017, where Bitcoin dominance went all the way down to like 30. percent-ish. I wouldn't be surprised, David, if we see lower lows in this cycle. We'll have to see how

Starting point is 00:05:08 that plays out, but that's my anticipation that we're going to continue to see this trend. 2021 is 2017 all over again. Right. And Bitcoin dominance really, to me, is like the Bitcoin Maximilist Index. Do you believe that there's going to be one asset to rule them all? Or do you think there's going to be a flourishing of many assets? And part of my personal thesis about this base is that the ERC 20 token on Ethereum democratizes access to making an asset, just like the Gutenberg machine democratized access to printing newsletters. The ERC 20 token on Ethereum democratizes access to making assets happen. And then we are seeing this with Dow's. We're seeing this with defy apps. Everyone is issuing a governance token. Like, I think there's going to be a flourishing of

Starting point is 00:05:54 assets and that's going to really push down the Bitcoin dominance. David, do you know what a Bitcoin Maximus might say to this, though, is that this? This is like a scam indicator, basically. Yeah, so when the market gets too hypey, too hot, too scummy, Bitcoin dominance tends to fall. They're not wrong. They're not wrong. There's an element of that, too, as well. There definitely are some projects that are very much vaporware that are pumping these days.

Starting point is 00:06:21 We'll get to that in a little bit. But let's talk about ETH because it is doing something different directionally than Bitcoin in that it's going up. Yeah, whereas Bitcoin is testing local lows, Ether is in its all-time high season. And so we just recently, as of today, crossed over the $2,600 mark. We peaked out at roughly $2,650, took a little tumble in the last few hours down to $2,500, and now we are climbing back up to $2,564 at the time of recording. A nice performance by Ether, I expect continuation. our ether bull podcast that we recorded in like mid-December has been holding up pretty well.

Starting point is 00:07:06 And if you recall from that podcast, we had three ether bulls on. That was during more sober time. So I encourage you to go back in time and listen to those price predictions. The low price prediction from Eric Connor was 2,500. Now we've passed Eric's price prediction. Barrett. More like Barrick, Connor. We had some other bulls on there who gave ranges.

Starting point is 00:07:27 I'm trying to recall. I know Anthony Sassano said 10K and I think DC said 20K. So we're in that range now. Striking distance. Yeah, of what the bulls predicted. Not immediately striking distance. We are now above Eric Conner's price prediction. So one down, two to go.

Starting point is 00:07:45 I mean, Eric's pretty predictive. And he's definitely an Eve Bull and we're above his price predictions for the high. You worried about this? So this is the theme that I've noticed. So I have three people in my life that are multi-cyclers where I and me, me and Anthony are just like one cycle, one cycle people. Is that a unicycle? A unicyclers?

Starting point is 00:08:04 We're unicyclers. And one thing I've noticed is the longer you've been in the space, the more quickly you are to sell on the way up in this last cycle. And at some point, that makes more sense. You have more life-changing money sooner. And so you don't really need to wait for the top of the market, like how the unicyclers might want to do that. And so, like, it's interesting.

Starting point is 00:08:25 The longer you've been in the space, the more you are selling sooner with lower price targets. And Eric, Eric has been in Ethereum since day one and was in Bitcoin before that. And so that kind of makes sense. That trajectory makes sense. Got some Fiat goals. You hit them. You're going to sell.

Starting point is 00:08:40 Yeah, exactly. But $2,500 ether is just complete bearishness in my mind. All right. We're going up from here. So David says, this is a chart we don't usually talk about on the rollups. But I think it's worth talking about this time is the eth Bitcoin ratio. And maybe we should take a look at this on five years. Five years.

Starting point is 00:09:01 So first of all, the news here is that it's up on the one year, which means eth as a proportion of Bitcoin from a price perspective is going up. So ETH relative to Bitcoin is up on the one year. Two and a half X on the one year. Yeah. And this is, I don't often look at this ratio, but it's hanging out of 0.04 right now of Bitcoin. On the five year, though, it's pretty low because we hit almost like,

Starting point is 00:09:27 within flipping distance of Bitcoin's market cap back in 2017. We're still low from that, but it's the ratio is on a high, like a two year or so high. What do you make of this? Right. And so a lot of traders are looking at the ETH-BTC ratio because it has made new highs. And the same way that Bitcoin has made new lows and Bitcoin dominance since 2018, ether versus Bitcoin is up new highs since Bitcoin since 2018. And so those are completely correlated.

Starting point is 00:09:55 and a lot of traders, I know Raul Paul recently tweeted out a tweet about how, yeah, right, how he just thinks that he is, he stares at the ETH BTC chart and sees an enormous, rounded bottom with potentially huge breakout just above. And so what people are saying, what people are looking at is the 2017 ETH BTC ratio is where we might head to given an ether rally, right? In all, in, in, in, in, in, uh, bull markets, people want tokens and all tokens are on Ethereum and they need ether to do that. And so the narrative is that people need to buy ether to play with the tokens.

Starting point is 00:10:30 This time's also different. We also have the triple point asset thesis, the ultrasound money thesis, EIP-1559, the merge, proof of sake, all happening in the next like 12 months or so. And so there's definitely a growing amount of energy and momentum behind the ETH-BTC ratio. And right now, as we are speaking, the ETH-BTC ratio is pushing new highs, again, ever since 2018. We have not been this high since then. So this means ether may be catching up to Bitcoin's market cap. It could also mean Bitcoin going down as well while Ether goes up.

Starting point is 00:11:04 Which currently is happening right now, yeah. Yeah, which is currently happening right now. And we haven't seen that in a long time. So this does feel like it is a different season of the market. Okay, let's talk about what's locked in DFI. So total locked value in DFI. That dipped to around like 55 million, I believe, oh, excuse me, billion. Now it's more recently bounced close to all-time high as anything here to talk about.

Starting point is 00:11:29 Yeah, I think all-time high is now $62 billion. We're currently sitting right below that. So all-time high in DefyPulse. Something that's new this week in the DefyPulse Index that was really exploding on the scene is liquidity. No, excuse me, liquidity, which is a new stable coin project that offers 0% interest on your borrowed stable coins. And the way that they do this is pretty interesting. Instead of paying like a, like how Maker Dow charges a stability fee, which is a normal interest rate that gets charged over time, liquidity offers zero percent interest fees, but they charge you,

Starting point is 00:12:02 they charge you a percentage of your deposits upon deposit. And I believe also retrieval, I think, of your assets. I need to clear out my details on that way. Is this like collateral-backed? Collateral-backed L-U-S-D is the new stable coin. So a die competitor L-U-S-D, and there's already 10% of all the eath that is in locked in defy is in liquidity. And this is a brand new project, brand new protocol. This stuff is awesome. Like we talked about a ride before and now liquidity here. What's cool about this is this is very, very much fits the thesis that we've had for a while around ether being economic bandwidth for the rest of the ecosystem.

Starting point is 00:12:40 Once you have a store of value that's trustless like ether on a network, you can build other things on top of them like stable coins. And that is exactly what's happening here. So that thesis is playing out. All right, let's talk about defy because it seems like we're moving into ETH season. Maybe what's DFI pulse doing right now? The DPI is how we track that. That once again is some of the top 12, 13 or so defy tokens.

Starting point is 00:13:06 This is just tracking them generally. We're down a little bit. So ETH up, but actually on the week we're, yeah, no, on the week we're down too. Yeah, on the week we're down from a little over $550 per DPS. down to $480 per DPI. And I think that's because I think Ether's very strong performance over the last two weeks is really scaring people who are perhaps over exposed to the app layer and perhaps forgot about ultrasound money.

Starting point is 00:13:33 How dare you forget about ultrasound money? And that's what Ether is telling a DPI is like perhaps ultrasound money is a place to be. And you can definitely see this in the ETH DPI ratio as well. Okay, well, that's next. it looks like ether is maybe sucking some of the oxygen out of the rim. So this is the ratio that we look at on a weekly basis, and that ratio is down too, right? Yeah, it did have a valiant effort for the last 10 days

Starting point is 00:13:59 trying to hold that 0.2 ratio, 0.2-Eth per DPI, but it has fallen down below that at 0.191 ether per DPI. And perhaps it just continues to fall. I'm not, again, not a trader, not financial advice, but there will be a day where DPI versus ETH rockets off of a floor. It's just kind of a game of who wants to try and catch that knife, who wants to play a little game of chicken with a falling ETH DPI ratio. You know, it's funny is we're not looking at some of the other assets in these ratios too, right?

Starting point is 00:14:31 So if you look at some of the B&B pumps, the finance chain pumps, those are way up, I think even relative to defy tokens. And that's not taken into account here. but it definitely seems like Ether is taking some of the value auction out of the room for other defy assets. While we have some of these Binance pumps going on, we'll talk about that in a minute. But let's talk about some fundamentals of Ether, David, because not only are we hitting all-time highs from a price perspective, dude, ether is crushing it, the Ethereum network,

Starting point is 00:15:06 and if Ether as an asset is crushing it from a metrics perspective, I'm going to just zip through four of these. Let's do this. So settling more transactions in Q1, Ethereum has 1.5 trillion in transactions than all of 2020 combined. So 1.5 trillion transactions Ethereum has settled in the first quarter of this year. And that is like 3x on the quarter more than all of 2020 combined. A crazy amount of settlement going on. Before you move on to the next metric, Ryan, this right?

Starting point is 00:15:41 eerily reminds me of the Coinbase volumes that they've did, which is a very similar metric where all of Q1 was more than all of 2020. So that's pretty cool correlation between Ethereum, the network, and Coinbase the company. Absolutely. It all tends to rise together. Okay, so Ethereum Exchange Outflow. This is a metric I'm particularly excited about, but. The bankless metric. Yeah, it's coming out of exchanges. So when it goes out of exchanges, there's only one other place for it to go, and that is on the Ethereum network or on maybe a layer two that's secured by Ethereum. A lot of ether is going out of exchanges. That means people are using it in defy, maybe to back a stable coin.

Starting point is 00:16:21 People are using it as a collateral base for loans. People are just holding it inside of a bankless vault rather than a crypto bank, which I think is pretty awesome as well. This is another all-time high number of addresses holding at least one coin on Ethereum. hit an all-time high. Lastly, I'll go to this. Nothing can see here says the poster, only Ethereum active addresses. So every Ethereum address is kind of like a bank account, and Ethereum active addresses have just about breached all-time highs as well.

Starting point is 00:16:53 Pretty cool. Yeah, I see you bankless listeners stacking that ether being more active in Ethereum. Nice job. Nice job. Absolutely. It's important that we also use these money systems. We're not just stacking ether for the hell of it. We're actually using these defy money systems.

Starting point is 00:17:09 David, speaking of using ether for economic resources, this is ether being used to economically secure ETH too. Our friend Justin Drake just reported that there's 10 billion worth of ether being staked right now. That's 4 million ether worth in supply, which equates to 10 billion worth of stake. That is the economic security for the future of the future of the. Ethereum economy. What do you want to say about that? And that is also how much ether is receiving ETH rewards from the beacon chain. And so proof of stake alive and well for those who want to stake their ether. This is crazy too. I know we're going to talk about this a little bit, but this is

Starting point is 00:17:51 another tweet that Justin put out. And he actually linked a spreadsheet, which I'm going to pull up, where he is looking to estimate, I believe, what returns will be for those who stake in Ethereum post EIP 1559, which is one part of kind of the ultrasound money thesis, and then also post the proof of stake merge where we no longer need proof of work. Did you catch some of, did you catch some of these numbers here? Yeah, there are quite impressive. And when you link together the rewards earned by validators, which are both ether issuance from the protocol, but also tips. And tips could actually be pretty substantial because tips is where minor extractable value gets captured. And so the only people receiving MEV rewards are stakers. And so you're receiving both issued ether

Starting point is 00:18:42 and paid ether. At the meantime, ether is also being burned. And so what Justin Drake's best guess is is staking APR, which is the issuance plus fee rewards, which is MEV and transaction fees, gets you 25% APY on your ether. I mean, this has to get arbitrage down over time. But at Genesis, this is what Justin Drake thinks is going to be the staking rewards. which is pretty pretty phenomenal. Yeah, so that means if you stake, rather than receive the, what, six, seven, eight percent that you're receiving today, you're actually receiving 25 percent in ether as a reward, right? Effectively. When we also include what is being burned, yes.

Starting point is 00:19:22 And that's going to encourage more people to stake, which is going to, in turn, lock up more ether. And this doesn't even take into account the supply issuance reduction that is coming with the merge. So you get two things happen simultaneously. You get these massive staking returns, and then you get issuance slashed down from like 4.5% all the way to 1% or maybe below, maybe into the ultrasound territory where ether supplies being burnt. Like it's just this convergence,

Starting point is 00:19:52 almost like a perfect storm of all of these things happening at once. I don't think people like, so how many tweets, how many, this got about 640. like, I don't know how many people understand this, David. Like, even our ultrasound money on YouTube, I was looking at this early in the week. 16,000 people have viewed it. And that's great, right? It's a two and a half hour episode.

Starting point is 00:20:15 I know it's like movie length, right? Right. But at the same time, only 16,000 people have viewed it, right? How many people do you think understand what is about to happen to ether? I think of people that pay attention to this space and no Ethereum, one in 100 people really truly understand the ultrasound money thesis. And think about how many people out there in the world who is like, oh yeah, let's start thinking about crypto. All right, there's Bitcoin, there's this thing called Ethereum, there's light coin. These are all the same. Let's let's allocate all Dogecoin. Let's allocate to all these things. So many people do not even know what this ultrasound money thesis is

Starting point is 00:20:56 who are inside of Ethereum and infinitely more don't know what it is outside of Ethereum. that the ultrasound money thesis and what's being articulated by Justin Drake on his Twitter and in that podcast is in my opinion the world's biggest alpha I can think of it's so it massive it is it's available to you if you're listening right now if you're paying attention yep absolutely uh so early on this let's let's talk about another thing that's early for ether day one of ether ETFs at least in Canada there are ether ETFs in Canada three of them that's crazy nice job Canada three of them Go Canada. Three of them released on the same day. I think one of these is from our friends at

Starting point is 00:21:35 Ether Capital, whom we had on the show in December. But it's a pretty good volume on these ether ETFs, about one-fifth of the volume of what Bitcoin did. But now that there's an instrument, I think more institutional investors, at least Canadians will pile in. And of course, if Canada is doing it, the U.S. has got to follow along. Look, David, I don't think that the U.S., so let me ask you, if the U.S. approves a Bitcoin, ETF, why in the hell wouldn't they approve an ether ETF at the exact same time? Right.

Starting point is 00:22:06 Like, they're both commodities now. We've already got statements that they're both commodities. We've already gotten plenty of conversation about Ethereum-related topics in Congress and other regulatory bodies. If the Bitcoin ETF gets approved, the ether ETF comes within six months after it. Like, and that's slow, in my opinion. Maybe at the same time. Oh, that'd be crazy.

Starting point is 00:22:27 I don't know. That's fast. That's fast. That's a Hester Pierce question. All right. Last note here, David, before we leave markets, is actually this Bitcoin price plunge caused a lot of chaos in the market. It's at least short term. A lot of liquidations on some positions as well. 7.6 billion in long positions were liquidated in one hour when it plunged down to 52K. What's going on here? Yeah, this is also true for Ether as well, where Ether topped out at $25,000 a little bit above.

Starting point is 00:22:58 and then it fell to like almost below $2,000 in a very short amount of time. Bitcoin did something very similar. And people were just leverage. Probably perhaps people who are really bullish on the Coinbase news really thought that there was going to be a flood of capital into the space afterwards. So they took on a bunch of leverage. Funding rates were through the roof. It cost you like 40 to 50% APY to borrow USDC from Ave and compound.

Starting point is 00:23:24 And that's because DGens were going leverage long. And then there was a bunch of just like a drama and debate and perhaps like a fake news tweet that really triggered a bunch of fear. And as a result, there was a cascading set of liquidations that really brought the crypto prices down very, very quickly and liquidated the most amount of capital that has ever been liquidated ever in the crypto markets all in one hour. And the cool thing is, is that we bounce back from it pretty fast, which means that there is capital that is being deployed to catch bids. and those bids were caught. And then we resumed the being bullish. And so that's pretty cool. And if you want to sleep at night, of course, don't take on excessive margin.

Starting point is 00:24:06 You could be among those liquidations. Cryptos is incredibly volatile, of course. Crypto can always go faster and lower than you ever thought it could. And so you need to account for that if you ever take on leverage. That's right. Been through one of those cycles, haven't we, David? Yes, we have. We've done this before.

Starting point is 00:24:24 All right, guys. There's more to cover in releases. We didn't get a chance to mention what Doge and Safe Moon is doing, but stay tuned for the meme of the week at the end of this episode, and we will. For now, we want to thank the sponsors that made this episode possible. Balancer is Defi's most powerful automated market maker. Typical AMMs just have two tokens inside of one liquidity pool,

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Starting point is 00:27:05 that many people in the U.S. all over the world have on their phones now allows users to buy and sell crypto. I think Bitcoin, Ether, like coin, Bitcoin Cash, are all supported assets. 70 million customers, David. Yeah, that's huge. much surface area with so many people. And I even already got a message with one of my friends who I told to buy ether back at $200. He didn't listen to me. And then now he's like,

Starting point is 00:27:32 because it was hard, probably. Probably because it was hard. He didn't have an account, like, didn't believe in it. Like who, who, who, and this was before ether's pumped. So who are the hell am I to give financial advice to this guy? Turns out, it was right. But, but now he messaged me. And he was like, well, should I just buy ether through Venmo? And I was like, well, yeah, you could. I think you perhaps are going to make your way into the world of at one point in time. So that means you need a real exchange like PayPal or Gemini. But if you want, sure, why not? That's a great place to do it. And so Venmo now is competing with the likes of Robin Hood, which is kind of cool. Yeah, pretty cool. I don't think they allow transfers off of Venmo,

Starting point is 00:28:05 or am I incorrect about that? So you don't really get your private use. They custody at all. Right. And you can't, I don't think you can transfer it from account to account, but I'm sure that that is something that they are going to do because why wouldn't they? They're a payment app. What's crazy about this, though? I don't know anyone around me who doesn't have Venmo. Like, everybody has Venmo completely normalized. So now crypto is like this kind of a headline in 2017 once again, David, would have been absolutely insane. Now here we are living it. Crypto is being adopted. David, let's talk about this. This is a new feature from Block Explorer EtherScan. EtherScan is just so valuable, man. It's crazy how awesome it is. It's like a daily user of

Starting point is 00:28:44 Ether scan. It's just an amazing tool for seeing everything that happens on Ethereum. Now they are showing what's happening in the dark forest, the M.EV dark forest. What do I mean by dark forest, David? What are they shown here? Right. So M.EV is a very hot topic, and we are in the works of making a M.EV panel happen, kind of like an AMA. So stay tuned for that. We're trying to get Phil Diane on as well as Georgios and also perhaps Charlie Noyes, currently in the works, but maybe there's a panel and MEP panel coming your way in the bankless future. And what's going on is that miners who want to compete to mine a block and also order those transactions in a block, instead of having an on-chain gas war, it's actually beneficial for them to actually just, you know,

Starting point is 00:29:29 tuck some eth under the table and send it straight to the mining pool so the mining pool doesn't have to broadcast their transaction. And while that off-chain bidding war can be obfuscated, that tip that is paid directly to the mining pool to compensate the pool for mining the transaction without broadcasting it, that actually that part can be broadcast. And that is what Ether is showing us. They're showing you what happened. If there was a transaction that paid a spark pool or another Ethereum block mining pool, if there is a tip being paid to them, they will report that.

Starting point is 00:30:02 So you can know what is a MEV transaction versus what's not. I think there are a lot of challenges with MEV. It's also not all bad. But the best thing we can do with MEV is make it visible, is actually show it. And this is what EtherScan is a 10.000. to do with at least a portion of it, really cool stuff. Alpha Hamora, that is a really interesting DeFi protocol we've talked about in the past. They just did a V2 relaunch.

Starting point is 00:30:28 They've had some issues a couple months ago with kind of a security breach related to like something of the Iron Bank. I think we were, we covered it then. But this new V2 launch, what's that going to include, David? Yeah, a bunch of cool, cool upgrades. And so there are now LP tokens as collateral, Uniswap V2 LP tokens, perhaps also. So sushi LP tokens as well. Yeah, so Uniswap, the curve LP tokens, sushi swap LP tokens,

Starting point is 00:30:55 balancer LP tokens are now collateral inside of Alpha. And so that's fantastic. There's more interest-bearing tokens as well. And so there are other assets that are created their interest-bearing derivative of them. That's what the Alpha Protocol does. There's also protocol fees being paid to Alpha Stakers, which I'm always a big fan of. If we can get on-chain value flowing towards people that govern the protocols, I always like to see that real verifiable flow of value to people that govern.

Starting point is 00:31:26 And then also there's even more assets to borrow inside of the AVE, or not AVE, Alpha, alpha system. So congrats to Alpha for getting this out the door. Yeah, I wonder, have you looked at the, the I-Beth yields from Alpha lately? I mean, last time I looked at 8%. But I remember them being very, very high above and beyond what people were getting on the beacon chain. Yeah, and they had a large portion of ethel. locked up as well. So that's another sort of hungry, ETH money Lego that is just like consuming

Starting point is 00:31:53 economic bandwidth from Ethereum. I'm also an ETH hungry. I'm not a money Lego, but I'm pretty Heath hungry. You're a human Lego? That's also ETH hungry. All right. Let's talk about this one, David. So this is the fourth protocol from Ampleforth. And so Ampleforth sort of an elastic, a price elastic, not quite a stable coin, but I guess it's been trying to be a monetary asset of some sorts. Inventor of rebasing is where rebasing came from Ampleforth. Exactly, rebasing. It's a little complex. We don't have to get into all those details. But if you've ever used Ampleforth in the past, Ampleforth is releasing a fourth token. So this is a governance token on top of Ampleforth. You can connect your wallet. If you've used Ampleforth in the past, you've ever held it.

Starting point is 00:32:43 and receive some fourth token. It's a governance token. It has value in uniswap and secondary markets. Not to emphasize this, look, there's like air drops almost every week. And there's protocols spinning up governance protocols, governance tokens, almost like it's 2017 again. So, like, I think what's interesting here is, like, I've used Ampleforth in the past.

Starting point is 00:33:09 I know you have David, right? And so, like, what did you do with your Amplefurt? fourth claim. Like, what do you do when you receive anirdrop from a token of some sort and you have some governance token to claim? What's your process? Yeah. So the only air drop that I've kept is Uniswap because I'm interested in being a governor of Uniswap. And every other air drop I sold it for ether basically immediately. So this was no exception? No. It was the amount of fourth tokens was more than the gas that it would require to redeem and trade them. And so I did that. So there you go, right? So I think this is going to be, it's an interesting price catalyst for

Starting point is 00:33:51 ether too. It's like when these governance tokens are sold, what will they be sold for? Will they be sold for dollars? I think in some cases. In other cases, they might just be sold for Eith. I did the same with a portion of my fourth air drop. Thank you, Ampleforth. Let's talk about this. Real world assets in Maker Dow. We talked about this a little bit on the last roll-up where they were being proposed. Now they are actually here. What is this and what does it mean?

Starting point is 00:34:20 Yeah. So there is actually outstanding dye in the Ethereum ecosystem backed by real world collateral. And so that is just a groundbreaking achievement by the Ethereum protocol at large, but and also specifically MakerDAO and also with our partner centrifuge. And so the collateral itself is a real estate alone. And there's some clever engineering going into this. But basically, there's two ways to get collateral on chain. One is you mint a token that is redeemable for that collateral.

Starting point is 00:34:52 And another way is you make a trust in the nation state meat space. And that trust does one thing and one thing only, which is manage its own assets and then reports back to the protocol that it integrates with. And that's the way that Maker Dow has decided to go. And so Nick Kunkel, who works at oracles at MakerDAO wrote this tweet yesterday. Yesterday was a tectonic shift in finance. MakerDAO is on the bleeding edge of standardizing how Dow's in the legal system will interact to connect Defi to TradFi. That's traditional finance. Real world assets are here and a sign of the growing maturity of Defi. And so if you don't want, The Oracle problem or the real world assets or real world to digital world integration is a very hard problem.

Starting point is 00:35:38 Ethereum doesn't know what the outside world is. The outside world does know what Ethereum is, but Ethereum doesn't know what the state of things is outside of Ethereum. And so getting real world assets onto Ethereum requires trust. And this is a very hard problem that many teams have just decided to not bother with and say, you know, F it, we're only doing on-chain assets because doing off-chain. assets is really, really hard. Maker Dow from day one has been going after hard problems. They were the first one team to really tackle oracles, which is also off-chain data, and now they are tackling real-world assets. And so the fact there is real world assets

Starting point is 00:36:16 backing dye and die is outstanding in the Ethereum ecosystem based off of real-world assets is absolutely fantastic, absolutely phenomenal. And also, it just unlocks trillions and trillions of dollars of potential value that can be added to Ethereum. You used the term real world assets a number of times. What are we talking about real world assets? What assets? Real estate, loans, bonds, corporate debt, like your car, who knows? Like anything that has a real substantial value and a market for in the real world

Starting point is 00:36:50 could in theory become collateral inside of Ethereum. You know, what's interesting is the most successful real world asset right now is tether or USDA are these like stable coins. That's the first asset that's kind of leaked into the crypto space and blockchain. And now we're starting to see other things leak into it. So I mean, the real estate market alone is something like $200 trillion up there and like property value. Seeing that migrate to crypto would be super interesting. All right, David, let's get to the news.

Starting point is 00:37:24 I think those were all of our releases. Let's talk about some Ethereum stuff first. So this was a major event. We saw the first gas block on the Ethereum network that exceeded 13 million gas used. And for people who don't actually know what that means, David, can you give us a quick primer on what this means and why this was the first? Yeah, the size of a block denominated in gas is basically the size of a block denominated in data, right? And so, you know, Bitcoin has the one megabyte hard cap, and that's the size of a Bitcoin block.

Starting point is 00:37:58 Ethereum has 13 million gas, and that is the size of an Ethereum block. And so the reason why we call it gas instead of data is outside of the scope of a weekly roll-up. But basically, if you want more computation, you need more gas. And so the size of a block in Ethereum is really denoted by the gas used. One of the really elegant things about Ethereum is that miners can choose to vote. up or down the block size, the gas limit. And rather than having a rigid and fixed block size like Bitcoin, Ethereum has elected to have a consensus by validators

Starting point is 00:38:35 or consensus by miners mechanism, where if miners think that we should increase block size, then they will all collectively vote for that. And there is a game theory as to why you don't want two big blocks or too low blocks. If you have two big blocks, there is an increased chance that multiple miners, will make multiple blocks and one of them turns into Ethereum and one of them turns into an uncle with a reduced reward. And so there's an equilibrium behind how much or how high block size can

Starting point is 00:39:06 goes. But what the takeaway is is that Ethereum block size is allowed to increase up to a certain threshold so long that the network can handle that increased block size. And so what happened is we went from 12.5 million gas to 13 million gas, which means Ethereum got that much bigger in scale, half a million more gas in scale. And so we just increased the throughput of Ethereum by a decent amount. And the cool thing is that it can always increase as a function of the underlying computational and bandwidth efficiency of the Ethereum network at large. And so when we see a new higher gas limit, what we are seeing is we are seeing an Ethereum organically increase how much scale it has as a result of consensus by validators.

Starting point is 00:39:52 There you go, guys. On roll-ups, not only do you get the news, you get some tutorials sprinkled in there. That was a gas tutorial from our own David Hoffman as well. And, of course, the gas that David is talking about, like, if you've ever done a transaction on Ethereum, you've consumed some gas. So a transaction that takes a little gas example of that is if I send ETH to someone else, one, uh, ETH from one address to another address. That's the lowest amount of gas you could ever consume, which is 21,000.

Starting point is 00:40:17 lowest amount. So lowest amount of gas, lowest amount of compute, lowest amount of data, as David said, a little bit more is sending a token, a little bit more is doing a uniswap transaction. And you can get increasingly, you know, complex and sophisticated, you know, compute transactions that consume more and more gas. So gas went up. That means the amount of trustless compute of the Ethereum network went up. So people are wondering, I bet, at this point. So, okay, are gas prices going to fall then? We have more supply, right guys? Gas price go down? Well, that's not necessarily the case. Why is that not the case? Because people are just going to consume more of it, right? It's like, oh, we go. Well, price went down. I'll just execute my transaction. And then boom, price goes back

Starting point is 00:41:02 up. My takeaway here, though, is that we are consuming more gas per unit time, which under EIP-159 means more ether burned per unit time. So bullish. Ooh, bullish burn rate. Interesting. I didn't think about that. That's very fascinating. Increasing the burn rate. Okay. Let's talk about another really cool news item slash release. This is from Dharma, big fans of Dharma. Big fans of Dharma. These days, you know the problem they've solved, they've solved, David, is the problem of connecting your traditional bank, your Wells Fargo, your Bank of America, whatever. If you live, in the U.S. You've got this bank account and your multiple steps from getting it into the defy ecosystem. So say I want to take advantage of YFI today and get like 14% yield, right, which is what YRN offers on USC today. Well, I'm multiple hops away. First, I have to ACH

Starting point is 00:42:00 transfer to an exchange like Gemini. Three days. Then from Gemini, three days. Then from Gemini, I have to transfer that to Metamask. And then once it's on Metamask, I have to do a series of transactions to get myself into, to get myself into Wi-Fi. And by the way, I have to have ETH in my wallet in order to pay for those transactions. So it can't just be USDC or, you know, another stable coin asset. Anyway, multiple steps, just a complete pain. What, what Dharma solved is like this last mile problem. So one click of the app.

Starting point is 00:42:32 And you can do as much as 25K a week from your traditional bank account directly into a wire or an AVE and start earning yield. So not only is it cool for, I think, like, more advanced folks because there's a, you know, a ton of shortcuts here. This is like a go-to tool for newbies, for those in retail who haven't had a first taste of defy, but like they know that their savings accounts sucks because they're getting basically no interest on it. So it's really cool. Now they're in 50 states. Just big fan of what Dharma is doing over there. All these legacy platforms, like SOFI, which will help you just like, you know, get a high interest savings account of one to two percent. That's all gone, comparison to Dharma, right? Like, the one drawback about Dharma is that

Starting point is 00:43:20 they can't solve the gas fee issue. And so if you are, it costs like, I think, $200 because the Dharma's a smart contract wallet to make a trade on uniswap. But if you can convince your friends to get beyond that, you can show them like, yo, these yields, these like 20% USDC yields on Ethereum, just download the Dharma app. Just like, you download the SoFi app, like go, go liquidate all of your SoFi assets. Go send them into Dharma and get a much better yield and do it via Dharma, which is a place that they are familiar with, an app on their phone, legacy traditional finance people like apps on phones. Defi power users probably use metamask and desktop. Dharma is now building out defy and getting it into

Starting point is 00:44:00 people's hands where they're comfortable with it. So I expect a lot of cool things out of the Dharma ecosystem in the future. Look, man, you know the only thing stopping like more adoption of this at this point, David, in my opinion. News? Well, I think that it's just gas fees. Yeah, it's gas fees. Like you said, right? So imagine a Dharma, imagine an Argent wallet on layer two. Right. Right. Like we've solved these Fiat connectivity bank connectivity problems. Then the next thing we have to solve is layer two in gas fees. And then this is just going to go absolutely crazy. So I'm excited to see what they have in the store there. All right, let's talk NFT stuff. Pleaser Dow. Did you get in a Pleaser Dow?

Starting point is 00:44:39 I am a member of Pleaser Dow. I'm so pleased. What is Pleaser Dow? Yeah, I know you are. Pleaser Dow is the Dow that came together who wanted to buy people pleasers, the artist People Pleasers, X times Y equals K, Uniswap V3 announcement gift. It was or movie. It was about 45, 50 seconds long. And it ended up going for half a million dollars.

Starting point is 00:45:02 And I was invited to get into Pleaser Dow before bidding even started. and I just didn't take the invite, and then I hard fomote about that. I wrote an article about it, put on bank lists, did some interviews, put all that stuff up there, and just yelling at the pleaser dowels, let me in, I want in. And then pleaser dow let me in because they needed some more capital to purchase the Edwards-Snowden NFT. And once again, Pleaser Dow got into a bidding war and spooked the hell out of the person that they were in a bidding war with because as they ran out of money, more people sent money into the PleaserDAO, like me, because they needed the Capital Del.

Starting point is 00:45:42 And so PleaserDal literally ran out of money, and then people came and sent more money into the Dow. Was it like a capital call? They were like, hey, we want to do this thing, but we need X more. Yeah. And so people reached out to friends, and one very generous individual came in with a bunch of ETH and sent it into the Dow. And then they won the bidding war against whoever they were. competing with. And so now Edward Snowden has said the words, congratulations, pleaser Dow. So they

Starting point is 00:46:11 know about the Dow. We've been trying to get him on bankless because now I'm a member of Pleaser Dow. I am a fractional owner of the Edward Snowden NFT. So that's pretty cool. And I hope that he kind of wakes up to the world of permissionless censorship-resistant money in addition to just censorship-resistant press, which I know Edward Snowden is a big fan of. Well, that's, That's what's cool about the story, too, is the proceeds from this NFT, don't go to Edward Snowden, and they go to this Freedom of the Press organization, which is a nonprofit that defends transparency in journalism and defends freedom of speech, right? So we've got like two sides of the same fight for freedom, right? Like we've got this fight for speech, you know, the ability to say what you

Starting point is 00:46:57 want without censorship, and also this fight for financial sovereignty. And the, you know, the ability, ability to not be locked out of the economic system, to have self-sovereignty over that. And like it feels like it's two sides of the same coin, and that coin is freedom. So it does feel like there's a lot of common cause with folks that are fighting for speech, of which Edward Snowden is one. I hope he goes deeper down the rabbit hole. I've seen him talk about crypto before, but not necessarily defy in a knowledgeable way. Like I don't know that he's used a defy protocol.

Starting point is 00:47:32 this might be his first experience with Defi. Right. Yeah. And I think if he read the tweets, he should be clear that what a doubt is at this point, if he doesn't even have the deepest understanding, he should know that a collection of people bought his NFT rather than one individual people. And Edward Snowden, I believe, could be labeled a populist because he's like a buy-the-people for the people-type individual.

Starting point is 00:47:54 So perhaps that resonates with him. It was bound to happen sometime, David. But while we're on NFTs, of course, the adult industry has gotten into. NFTs as well. Looks like Brazers is selling NFTs at, you know, at this point. Only a matter of time, dude. Yeah. So NFTs are very democratizing

Starting point is 00:48:13 technology. And I actually do hope that Brazers is not the entity that capitalizes on the intersection. Because they're an aggregator. They're a middleman between adult entertainment and now perhaps NFTs, right? And so if there's any adult listening listeners or adult entertaining listeners or adult performers or sex workers, Just know that you can use this technology yourself.

Starting point is 00:48:35 You don't need Brazers to NFTU. You can just NFTU. But as we all know, the porn industry really likes new technology, and they tend to adopt it first, basically out of necessity. And so now, I mean, everyone's getting into NFTs these days, so maybe Brazers is even late. But I do expect the world of adult entertainment and sex work to become a very big, have a very large surface area integration with NFTs.

Starting point is 00:49:01 do you think nfts season is over david are some of these like the top markers in your opinion uh i mean the recent nfts season is over but the next nfts season is like really close so just season one just season one there are onto season two yeah all right let's talk bitcoin we're in the break between seasons yeah yeah interim um let's talk bitcoin bitcoin mining hash rate dropped right um this is something also and some people were linking this to the bitcoin price drop as well well. I'm like, you know, I don't know. Maybe you can make those links. Maybe not. But for sure, Bitcoin's mining hash rate dropped as blackouts were instituted in China. I haven't followed this super closely. But what like, where did the blackouts come from? Are these actions by the

Starting point is 00:49:47 government or is this kind of like, you know, natural causes or what, where did the blackouts come from and what happened to a Bitcoin hash rate here? Yeah, this was a top down choice by the Chinese government to implement a blackout. I don't know if we have. concrete details as to why there's speculation about a coal mining accident, so there's reduced ability to produce power. But either way, there was an elimination of electricity to a part of China. And as a result of this, 25% of Bitcoin hash power dropped off the network. And what this means is that 25% of Bitcoin hash power is located under one single energy grid, perhaps supplied by one single energy source.

Starting point is 00:50:31 That, to me, spells fragility, right? That's not awesome. The Bitcoin blockchain is still going. There's nothing wrong with it. It still produces blocks. It has the difficulty adjustment. It's just readjusted and now it keeps on going. Blah, blah, blah, blah.

Starting point is 00:50:43 It doesn't matter. 25% of Bitcoin's computational capacity lives under one energy grid. That, to me, is centralized fragility and that's not something that we want in our long-term blockchain. Now, did it bounce back after that outage, David? No, it's not back yet. I'm sure there are other ASICs that have turned on to help compensate, but imagine just how much supply of ASICs are in that one zone that are still under the blackout.

Starting point is 00:51:08 This is Nick Carter, who is very data-driven, also a big proponent of proof of work. Some people, he said, said it was more like a 40 to 50% drop. This is false. Based on five days of data, it looks like 25%. But oh my God, 25%. A quarter of your blockchain? That's a lot. Like if it was, 50% I would be freaking out. Right. Like, if it was 50% that would mean 50% of the Bitcoin hash power is located under one energy grid. Holy shit. This goes back to you part of the conversation from our ultrasound money podcast with Justin Drake. There's so many hidden things there. But one of them was the stealthiness of proof of stake compared to proof of work.

Starting point is 00:51:53 And it comes out kind of here, right? You can see the power footprint, the energy consumption footprint on any electrical grid that Bitcoin exists on. So it's not very stealthy. If there was a third party who wanted to take out some of the Bitcoin hash rate, there are some key electrical grids that person could attack and probably accomplish that. Whereas proof of stake provides the ability to hide, essentially. There's not any profile that's sitting out there on electricity grid. And so could be a bit harder to shut down. Much harder, it seems, than something like this,

Starting point is 00:52:29 if you have decentralized validators all across the world that just look like regular everyday consumer laptop-grade computers that are connecting to the internet. Right, and we just have to remember what this whole industry is. This is a digital finance revolution, right? And to me, like, there's no concrete connection here, but to me, something with a physical footprint in the world is not digital by definition.

Starting point is 00:52:51 What is digital is proof of stake where if your computer that's running your node explodes, your ether still exists and you can go get it and move it to a different computer. Your ether doesn't exist anywhere in the world. Therefore, Ethereum security doesn't actually exist anywhere in the physical world. It only exists in the digital world. And so there's no place of Ethereum security. There's no geographic place where Ethereum finds a security, unlike proof of work. David, I still want to have that bank. list debate podcast. That's like proof of work on this side from somebody who can articulate the

Starting point is 00:53:26 position and proof of stake on this side. We've got to have that. I feel like that conversation needs to be had. I don't know of any other Bitcoin or who could do that other than Nick Carter. Nick Carter, if you're listening, I'd love to hear more from you on that subject. Okay, let's talk about regulation. There are two things maybe to talk about here and they're related. The first is Gene Carlo, so the former Christian Carlo used to call him Crypto Dad, actually, because he worked at the CFTC and was very pro-crypto. It was kind of an advocate against what the SEC was doing. He has now joined the board of BlockFi,

Starting point is 00:54:02 which of course is a crypto bank that I've used in the past, you know, based in the U.S. They, you can lend your crypto and they will offer interest rate. Also, we have this news that Brian Brooks. So he was self-driving bank's guy. Self-driving banks guy. We've referenced that article in a number of podcasts. Office of the Comptroller of Currency under Trump.

Starting point is 00:54:26 He left that position several months ago. He's now going to become the CEO of Binance U.S. Okay, former regulator becoming on the board of a crypto bank. Another former regulator on the board of Binance U.S., both U.S.-based companies. David, it sounds like crypto banks are playing the regulatory capture, game. They're getting their lobbyists. They're getting their former regulators. They're playing the same game that traditional banks play as well and other industries play as well. This is regulatory capture. I'm not necessarily saying it's like a bad thing that they shouldn't be doing this. We definitely need some of

Starting point is 00:55:07 that firepower. But what does this say to you? Yeah. I mean, centralized crypto banks have are flushed with cash and they are ready to make moves like this. I'm kind of bummed that Brian Brooks, who coined the term self-driving banks ended up at not a self-driving bank, ended up at a crypto bank. But again, this is good for the industry because we have advocates for us now in the industry. Like we want these people, we want to integrate with these people who have influence with regulating bodies. It also makes a ton of sense that Binance as an entity, and like we can talk about the difference between Binance U.S. or non-Binance U.S. and global finance.

Starting point is 00:55:44 But at the end of the day, it's one finance, right? It's one company. and they really need regulatory protection because of all the nefarious things that they're doing that are extremely regulatory gray. And so it's probably a very good defensive move for them to bring on Brian Brooks onto their board because they need that sort of like extra defense. Absolutely. We're definitely seeing crypto sneak into the, you know, the areas of U.S. regulatory. I think that's a good thing for the industry. I just hope, David, that this is not where we end up with a bunch of crypto banks who have kind of, they have the regulatory support,

Starting point is 00:56:23 and they're basically just like the old banks that we used to have. Hopefully we get to this self-driving bank concept with defy and are less reliant on these centralized intermediaries, although they are a great bridge, as we said before, into the defy landscape. David, we're going to be back with some takes. I know we've got some hot ones this week, but first, we want to thank this sponsors that made this episode possible. Bankless is proud to be supported by Uniswap.

Starting point is 00:56:52 Uniswap is a new paradigm in asset exchange infrastructure. Instead of a cumbersome order book system where trades are matched with other humans, Uniswap is an autonomous piece of software on Ethereum, which is what Ryan and I call a money robot. No human counterparties or centralized intermediaries, just autonomous code on Ethereum. Input the token you want to sell and receive the token you want to buy. Something brand new in the Uniswop ecosystem is the Uniswap Grants program is now accepting applications for grants. We have been saying this for a while and we'll say it again.

Starting point is 00:57:24 Dow's have money and they are in need of labor. If you think that you have something to contribute to the Uniswop Dow, apply for a grant to Uniswap. Just look at the size of the Uniswap treasury. It's almost $3 billion. This mountain of capital is looking for labor. Do you have something of value to contribute to the Uniswap Dow? No matter how big we're doing it. or small your idea is, you can apply for a unigrant at unigrant.org and help steer Uniswap in the direction

Starting point is 00:57:51 that you think it should go. That's exactly what we did to get Uniswap to be a sponsor for Bankless, and you can do the same for your project. Thank you, Uniswap, for sponsoring Bankless. Gemini is the world's most trusted cryptocurrency exchange. I've been a customer of Gemini since I first got into crypto in 2017, and it's been my main exchange of choice to make my crypto buys and sells. Gemini is available in all 50 states. and in over 50 countries worldwide, and on Gemini there are markets for over 30 various different crypto assets, including many of the hot defi tokens, and it's one of the few exchanges that has liquid dye markets. Gemini just launched their Earn program where you can

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Starting point is 00:59:10 sign up, you'll be gifted a free $15 Bitcoin bonus. Check them out at gemini.com slash go bankless. All right, guys, we are back with the hottest takes in crypto on the week. The first is from Arthur Hayes. Is Arthur Hayes bullish on Eith, David? Yeah, super, super bullish, which is crazy, because if you know Arthur Hayes, Arthur Hayes is the CEO of Bitmex, who has been recently on the run for a while, not quite on the run, but just like not yet arrested by the authorities.

Starting point is 00:59:40 He was, I think he did surrender to the authorities, and now he is waiting trial or something. I don't know. Meanwhile, while he's awaiting trial, he wrote this extremely bullish piece on Ether and why he's so bullish on it, which is in stark contrast to what he was talking about Ether in 2017, where he called Ether the mother of all shit coins. A lot of people didn't believe in double-digit shit coin. Do you remember when we were dropping into the like the 90s and 80s, he just like threw up. Yeah. Arthur Hayes has been called one of the most savage people in crypto, and perhaps that's why he's under arrest or wherever awaiting trial. But he wrote this extremely bullish piece on ether. And I think there's perhaps some fun numbers in here. But really,

Starting point is 01:00:26 the takeaway is not necessarily the accuracy of the data, but the complete 180 by a very influential individual from being an ether bear to an ether bull. Yeah. What's interesting about Arthur is this persona is very much, I'm a profit maximilist. Like he will make money no matter what market condition you're in. And he'll support anything that maximizes profit. Liquidating his own customers, blah, blah, blah, blah. Yeah. Yeah.

Starting point is 01:00:53 I mean, at the time, trashing ether, like that was a profitable move, like short ether. And by the way, short ether on Bitmax because then I'll make money while you make money. It sounds great. So I'm going to push that narrative. Well, now he's flipping on that, which is super interesting. But he's always been what he's always been, which is. is kind of a trader, profit maximalist at heart. I actually read everything he writes

Starting point is 01:01:16 because he's actually a fantastic writer too. And it's a really interesting perspective. But I want to just show off like this in the article. Dude, so he was doing, he was trying to model the price, the fair market value of ether as an asset based on it being a capital asset, based on its ability to continue to create, like to produce transaction fees, right?

Starting point is 01:01:41 We've talked about in the triple point asset thesis, how ether is a store of value, how ether is a commodity for gas, how it's a capital asset. Throw those first two out. He's not even talking about ether as a store of value. He doesn't necessarily believe that. He's not talking about it as a commodity. Who cares? He's talking about its raw ability to be a capital asset to produce, you know, transaction fees and revenue on the platform. And he's getting to a market cap.

Starting point is 01:02:07 And this is based on the percent of the percent of. of traditional finance that defy actually captures right so it's a very rough proxy here um but he gets to an eth price david of not 20 000 that's only if it captures half a percent of the world's traditional finance but all the way of the top if it captures all of traditional finance a four million dollar price of eth right this is like this is under the conditions where Ethereum is the economy. So when we say like, oh, the economy, people are just talking about Ethereum. There's literally zero economic activity that is not on Ethereum, which we are not at all close to. Maybe one day when I'm at a boomer age, that is when that happens. But Arthur Hayes

Starting point is 01:02:55 decided to model this out. And he said, what happens if Ethereum is economy, then Ether should be worth $4 million, which is just absolutely insane. And he goes down. So if it's if it's 1% of the economy, then ether should be worth $40,000. Now that starts to be a little bit more reasonable. I can get behind that. It's just like I don't understand. I would have never thought that going into 2020, we would have seen an article on ether

Starting point is 01:03:17 that would be more bullish than anything we've ever published on bank lists. Like this is crazy to me, but it's interesting flippinging nonetheless. Yeah, Ryan, we got to get more bullish. We're getting outdone by Arthur Hayes. I can't do that, man. $4 million price of ether. What does that even mean?

Starting point is 01:03:31 That means like Fiat has gone down the toilet. That means something else. Let's talk about this. I love this one. This is Vance Spencer. Okay, so why don't you take this? This is Coinbase in five years. What does Coinbase in five years look like, hypothetically?

Starting point is 01:03:43 Yeah, so Van Spencer, before I get into his take, he is a Defi bull. He did one of our best performing podcasts ever, which is the Bull case for Defi. And so Vance is coming at what Coinbase could look like from a DeFi first perspective, perhaps not from a crypto bank perspective. And so here's his tape. Here's what Coinbase is in five years. Probably no order book. Trades are routed to open source liquidity,

Starting point is 01:04:05 where they LP, where they provide liquidity. And then they focus, Coinbase focuses on front end slash regulatory slash staking slash custody. And then they earn most of their income from LPing and staking the native tokens of dexes. And then Coinbase just primarily serves as a wallet for users. And then Vance characterizes this as an asset light version of Coinbase.

Starting point is 01:04:29 A light on assets, heavy on just interactions with customers. Kind of just like a defy mullet phenomenon where CoinBanc, Base just provides the custody and the interface, and then everyone else just you, and all it does is a one massive dex aggregator for all of Ethereum. I don't think, we asked our state of the nation guest, Jeff Dorman, if he thinks that this is the direction of Coinbase, and he gave a very different one. But I think it's a good thought experiment, a good mental model for what could be. This is almost a Defi Maximilist take on what Coinbase will evolve to in the future.

Starting point is 01:05:01 And I think, David, the truth might be somewhat in the middle here. But I do think that what Vance is talking about, a lot of this absolutely could come true, especially if DeFi itself at the protocol layer, if the protocol synch thesis pans out and defy protocols like uniswap and Ave and compound and all of these like trustless primitives at the base layer, if they attract the most liquidity, then, you know, crypto banks will have to essentially tap into these liquidity sources in order to maintain, you know, in order to be competitive. And in that world, they just serve as sort of a Fiat bridge. I don't know that we'll get there. I do think that there's a lot of juice to squeeze in just the custody side. And if you've seen like Coinbase's assets under management, it continues to increase. And I think a lot of people still want the easy button and will trust the custody of Coinbase. And like Coinbase will create a lot of other offerings that are independent and more competitive with Defi.

Starting point is 01:06:03 So maybe somewhat the truth in the middle, but I think that vision is super interesting. Yep, agreed. Binance is a short-term game. Let's talk about why Binance, at least Binance chain itself, not the exchange necessarily, is a short-term game. Here's some numbers to back it up. David, what are we looking at? Right. So this is actually really convenient that we are talking about this right after we gave our little lesson on gas earlier.

Starting point is 01:06:28 And so what we are looking at is BSC scan, which is already a fork of ether scan, just like, how Binance Smart Chain is a fork of the EVM and Geth, which is Ethereum's first client. Binance Scan is just a fork of Ether Scan, so really nothing original going on here. But we are looking at the gas limit for Binance Smart Chain, and we saw the gas limit for Ethereum at 13 million gas, which is its all-time high, took forever to get there. Binance Smart Chain just went from 30 million gas, where it's been, already insanely high, all the way up to 45 million gas. And that's, if you're wondering why the Binance smart chain is free,

Starting point is 01:07:08 almost free and cheap and instant, it's because they have so much more, so massive block sizes. And there's a reason why we can't just increase block sizes because of our block sizes get too big, then we have a more centralized network. We already have a super centralized network in Binance Smart Chain with only 21 nodes. But the thing is, is that if you increase the gas,

Starting point is 01:07:28 how much data that is, going it through the chain per time, you increase the total size of Binance smart chain really, really quickly. And so right now, Binance is putting on like terabytes every month or so, which is too big, too big to be centralized. We already know that they are willing to give up centralization, but at some point the blockchain actually collapses because there's no block propagation because no one can keep up with the chain. And so if you are thinking that Binance smart chain is a blockchain, it's not. At some point, this is, this blockchain is going to get too big.

Starting point is 01:08:02 And if they want it to continue, they're going to have to checkpoint it, which is basically like a save game, delete all of the history, and then move forward from that point if they want their blockchain to continue. And at that point, again, the whole inevitable question about Binance Smart Chain

Starting point is 01:08:17 is why don't, why just you just do it on the website? Just do it on your database. Just have one node. It's easier if you just have one node. Very well said, David. So much of this is like decentralized theater in Binance land. I've had people tweet at me when we talk about this sort of thing,

Starting point is 01:08:34 just saying things like, well, yes, finance chain is centralized now, but it's going to become more decentralized in the future. No, it's not, guys. I mean, this is like a pipe dream. We are going the opposite direction. There's no physical way it can become more decentralized because the hardware required to actually run the chain

Starting point is 01:08:53 and be a validator node is just increasing at an exponential rate. And to your point where this, maybe at some point this whole thing collapses in on itself. Oh, shit. It's already at 58 million. That chart was old. We said it topped out at 45 million. No, it's at 58 million.

Starting point is 01:09:08 Wow. Okay. This is a chart from two days ago. Wait, does it keep on going? Is there another one below it? Well, I don't know. Of course it's going to keep on going. You know, as people, no, people demand.

Starting point is 01:09:20 This is average gas limit chain. Okay, okay. Yeah, so two things. One, we've seen this play out already. It played out in 2017, 2018. with a chain called EOS. And pretty soon, no one could run it, aside from the largest validators,

Starting point is 01:09:34 multiple terabytes in size. Chain analytics companies like coin metrics could barely run the thing in order to extract the data. And that's their job. Mass of centralization. Yeah, that's their job. Okay, so that's one.

Starting point is 01:09:45 The second is, here's the developer, David, of Geth. The thing that Binance chain, like, forked and took, here's the guy that actually engineered it, Peter. He said, I don't want to wish ill on anyone, but Binance chain is pushing their chain harder than what he thinks Geth, the client that he helped build can handle. It's nice when the chain is empty, but once you pile enough data, Geith is going to reach its limits. The thing's going to collapse. The thing's going to explode. Right. So look, we don't say this type of thing, David, because we hate Binance chain.

Starting point is 01:10:17 Right. Or because we're like maximalists for any chain. Like if I'm a maximalist, David, if you're a maximalist, we are bankless maximus. We're about decentralization and truly self-solvered money systems. And what's happening on Binance chain, I'm just going to be honest with everyone. Like, it's not sustainable. It's not going to work. It's already running out. It's already running out. This is a classic short-term game. And the only beneficiary of the short-term game are people in the short run, probably a small percent, that own B&B token, right? So this is why I'm not a fan of finance chain. You're not a fan of finance chain. It's about long-term games. We're building something for the future, future generations. We're not building something that can only last

Starting point is 01:11:00 like months and years and pumps and then dumps and like retail is left picking up all the scraps. They rant over. We get a lot of flack sometimes because we talk a lot about Ethereum, because we both think Ethereum is really, really cool. And people are like, well, why don't you talk about Cardano? Why don't you talk about Binance Smart Chain? Ethereum's got high fees. It's, it's killing me on the fees, but Binance Smart Chain is serving our needs. The reason why we don't talk about those things that much is because we've seen this before. We've already seen this play out with Eos, right? And Cardano is seven years old or something and doesn't have an app player yet. And so like some of these things, like we have already seen come and go. And sometimes

Starting point is 01:11:37 you just need to be in crypto for a full cycle to really comprehend and understand it. And I feel like that's a big difference between listeners who have bank lists who are confused as to why we don't appreciate Binance Smart Chain and those who have been in Ethereum for more than one cycle. People who have been in crypto for more than one cycle, aren't confused about these things. It's complicated to learn. It takes a while. It took me a while. I was convinced by the EOS narrative back in 2017. I literally bought EOS as a hedge in case EOS was the thing that happened. And then in hindsight, I was like, oh, well, that was dumb. But it just took me a while to learn that. And I think that people are going, it's going to take perhaps not actually that long for people to learn that

Starting point is 01:12:16 about Binance Smart Chain because they are just growing their state way too large. But we'll see what clever engineering CZ cooks up to route around this. At the end of the day, it's an open secret that CZ made Binance smart chain because he knew DFI was going to come eat his lunch, which from a business profit maximum perspective is probably a good move. Yeah, absolutely. David, brace yourself, man, you're going to get a lot of reaction on Twitter for some of those takes. Did you see the reaction I got on Twitter when I said perhaps Cardano is a blatant scam on the Welf of Wall Street podcast? Because that's already happened. Yeah, I did. Look, I did. Right. So scam is an interesting word choice.

Starting point is 01:12:53 First of all, I'll say that. But I agree with, oh, okay. Well, then I'm fine with it. I mean, possibly. So, but here's the thing, where I saw a lot of that reaction. And like, I know both you and I are keen observers of crypto communities to see what's really there and there. It's like, there's so many bots in these community armies, right? There's bots.

Starting point is 01:13:15 And then there are like, I don't just call it, like retail moonboys, like people who are just about the price. and will not debate you on the merits of anything. They don't know why they bought. They just know they bought and then price went up. So they've doubled down on their conviction. A lot of these communities are fairly hollow. And Cardano proved me otherwise. But I'm not sure from a community perspective if there's a lot there.

Starting point is 01:13:40 But definitely I think we both keep an open mind on some of this. Oh, you're pulling up a tweet. This is a tweet I tweeted about the compilation of communities. when there's 20% moon kids, 79% boss, and 1% puppeteers getting rich, your community has a problem. And I think there's some communities like that out there. That's why, you know, we just try to call it like it is on bagless. All right, David, that's over. Let's talk about this one.

Starting point is 01:14:06 This was a good thread on R-Slas Ethereum. Give a man a steak, and he'll eat for a day, teach a man to steak, and he eats forever. What's the lesson here? Right. And so we all know the metaphor. teach a man to fish versus give a man a fish. And basically what my takeaway here is that if you give someone some eth, they'll spend it over time.

Starting point is 01:14:28 But if you give some man an eth and teach them how to stake it, they'll have stake for the rest of their life. And that's the whole promise of proof of stake. You put your eth principle up and then you can just live off the dividends. And this has been my game plan since getting into crypto from day one. I was like, oh man, jeez, proof of steak. If I buy enough ether, I can just live off of the dividends. That has been my plan since day one, still my plan, eyes on the prize.

Starting point is 01:14:52 I am trying to teach the world through bank lists. That's what we're trying to do to teach people how to stake so they can live off of their e-dividends and experience financial freedom and do the things that they enjoy and improve their lives and the lives of those around them if they teach people how to stake. And I love this. I love this takeaway. So thanks to George Eve on our Ethereum. Are you NeverSell Gang?

Starting point is 01:15:15 Are you part of the NeverSull Club? I'm definitely going to try and sell the top, but not with my whole stack. Absolutely not with my whole stack. And so I'll try and sell the top a little bit, but there's definitely a very healthy proportion of my stack, like two-thirds of it, that will be in the never-sell category for sure. If you don't need the money, why not stake? That's what a productive asset gives you. I think it's a fantastic point that, again, if you realize, let's talk about this.

Starting point is 01:15:41 Three-Havings Capital. This is from Z-ZU. Yeah, Zizu. what is what is three havings capital what's this a play on yeah it's a play on three arrows capital which is the very famous market moving capital firm between suzoo and kyle davies kind of known as three chads capital as well and so he's a retweeting a tweet from that everyone in the ethereum ecosystem really really liked and i think we should go through this tweet as well so let's start at the top this is from squish chaos interesting name and he

Starting point is 01:16:14 says, he or she says, net annual buying pressure, in quotes, doesn't make the point. In a halving event, BTC minor cell pressure drops 50%. It causes all hell to break loose amongst the Bitcoiners. And then he asked the question, what does that look like for ETH? And so what this is saying is that Bitcoiners rally around the having. It's like a four-year ceremony of a happening. And the reason why Bitcoiners rally around the happening is because that means that miners are receiving half as much ether, therefore, or Bitcoin, therefore they can only sell half as much Bitcoin, which makes Bitcoin more scarce. And the same phenomenon is happening under proof of stake, where instead of issuing 4.5% of ether supply per year, it drops down to perhaps

Starting point is 01:16:56 just 1%. And so this is where this triple halvening comes in, this three halving, because we are speed running Bitcoin halvings by proof of stake, where we are going from, we are cutting issuance down to roughly 12.5% of pre-a-half percent of pre-percinct. previous issuance. And so continuing the squish chaos thread, he says, or she says, post-merge, eth cell pressure will drop by 90%. For BTC cell pressure to reduce by that much, it takes three halvenings. I'll repeat, ether will undergo the equivalent of three halving events in the next 12 months. And so if Bitcoiners just get over the moon about every happening that comes, this is why Ethereum are so incredibly stoked about proof of stake and

Starting point is 01:17:44 the merge and that's not even including about ether burn because of how much supply reduction is going to happen as a result of staking. Awesome. This is all riffs on the same thing that we've been talking about, ETH as ultrasound money. These are all different ways to view it, all different ways to say it. And as we made in the comment earlier, I feel like the market does not appreciate this. Very few people understand this at this point. All right, David, let's get to you. excitement time. What are you excited about this week? Continuing on that same line of reasoning, I'm excited about the triple point asset finally being priced in. I think that's perhaps what we are seeing right now in its eath outperforming

Starting point is 01:18:26 basically most other assets except for Dogecoin. The triple point asset I think is becoming priced in. That's what people are understanding when they say a three halvings all at once. That's what people talk about when they say the ether burn rate makes ether. deflationary from EIP-1559. And we already touched on this, we touched on those two things. And we also touched on how staking rewards can be 25% APY denominated in ETH terms and genesis of the merge, which is the ether capital asset. People are finally understanding the ether, the triple point asset thesis. It took them a year and a half. It's been a year and a half since I did that presentation at Tel Aviv and then put out the article in Bankless. And so those who have been

Starting point is 01:19:11 paying attention to bank lists for the last year and a half. You've known this is coming. Congratulations. Hopefully you're among the early few. But finally, I think we're seeing the early days of the rotation into ether of the asset because the ether, the triple point asset is finally being understood and integrated by the rest of the market. Absolutely, man. Yeah, it, you know, my, the thing I'm excited about kind of does a riff off of yours. So let me just say that to kind of round out your thought there. Nice. Is it just, it just, it, It feels really great when a plan comes together, right? Like, I feel like when you put ideas out there and, like, we don't get everything right.

Starting point is 01:19:49 Let's just be completely clear. There are things that we miss. There are things that we get wrong. We don't get everything right. But some of the big ideas that we've put out there as part of the bankless platform are starting to work out. Like, it feels like they are more certain now, much more certain now than when we first published them and we didn't really know if they were going to happen or not. So triple point asset is one of the. those. So is the entire bankless thesis, this idea that we are on the brink of creating this new

Starting point is 01:20:17 parallel self-sovereign money stack. Like, Defy has worked out, David. Three years ago, it wasn't obvious that any of these things were going to work. And now here we are in the very start of product market fit for defy. And now it just has to hit the accelerator and scale. Another thing we've talked about idea we've talked about so much is the protocol sync thesis, with crypto banks and like traditional banks having to use the most trustless and permissionless protocols available to them, whether that's a settlement stack like Ethereum or whether that's a D5 protocol like Uniswap and AVE, that's starting to happen as well, protocol sync thesis. Like the fact that Uniswap has exceeded the volume of Coinbase sometime, multiple times in

Starting point is 01:21:04 the last 12 months, that is protocol sync thesis playing out. Defy Mullet is another idea that we've talked about. Ultrasound Money now is a more recent narrative that we've just used to describe what is happening with the three happenings that you were just talking about with Ether coming up. All of this is... And we've also talked about almost every single one of these inside of this weekly roll-up. If we wanted to, we could go back to the Van Spencer Coinbase take and say, that's the Defy Mollet.

Starting point is 01:21:29 Dharma, that's the DeFi Mollet. Yeah, and I don't want to, like, look, I don't think, I don't want to pat ourselves on the back because not just bankless, David does. But to be fair, there are many other people who have gotten this right. But it's just cool to see a plan working out. It's cool to see that directionally, this thing that we weren't too sure of, like we think this is how it's going to play out, is actually playing out.

Starting point is 01:21:54 Like for all of the things that we've gotten wrong, we have gotten some things wrong, the big things, I feel like we've gotten right. And this 2020 run so far and everything that's happened, whether it's price or whether it's news and other things have been evidence of that. So I'm just excited and more than that. Look, not just excited. I'm like, I'm like grateful.

Starting point is 01:22:12 I'm like grateful to be in crypto. Sense of relief. At this time. Well, yeah. Yeah. Could have been real wrong on this. Could have let a lot of people like down the wrong path. Could be four years into bankless and be like, you guys, the triple point asset.

Starting point is 01:22:27 I swear it's coming. It's coming one day. This ETH thing is going to be real big. Trust me. Anyway, I'm just grateful to be here. And that's the thing is the last thing I'll say on this is there's a tendency during bull runs to look around at the crypto portfolios around you and like compare to other people, right?

Starting point is 01:22:46 Like there's always somebody who has gotten in earlier than you have, right? But comparison is the thief of joy. That's absolutely true in crypto. Yep. You're here. You're early. You're among the first like 1% who knows this. You're among the first like, I don't know, fraction of 1%.

Starting point is 01:23:02 percent, some tiny fraction of 1 percent, the world who know about Ether as an asset. Like, be grateful for that. I'm grateful for that. It's awesome to be here. This community is great. Just really excited about the future and grateful. Yeah, and that's. Yeah, go ahead.

Starting point is 01:23:19 And perhaps the tie on bow on that, that's a good reminder that don't mess up a good thing. And on the bankless newsletter on Monday, we talked about traps that people fall into. And a lot of it had to do with people phomowing. because perhaps you, the listener, just got into the bankless podcast or crypto at large in the last few months, and you're like, oh my God, I am so behind on everything. Everyone knows more than me. And by definition, if you're just getting into crypto, you don't know anything. You have to come in with a blank slate and an open mind, and you feel like you're behind.

Starting point is 01:23:50 And I felt this in 2017. I'm like, oh, my God, there's so much technology. I don't know about like, oh, I'm not going to make it, blah, blah, blah. if you understand ether as ultrasound money, you are in the 0.1% of the people that know about Ethereum, well, maybe not, know about crypto that understand ether as ultrasound money. You don't have to play with leverage.

Starting point is 01:24:11 You don't have to get out over your bootstraps. You don't have to risk your rent money. You just need to be responsible, and the ether will do the rest. Responsible and then be patient, guys. Absolutely. Well said, David. All right, let's get to it, man.

Starting point is 01:24:25 The moment we've been waiting for, Meme in the week. The meme of the week. You want to explain this one? Let's do it. Well, so this is your, this is your, uh, your, uh, meme, but if you want me to explain it, I'll happily do that. This is a, uh, a favorite movie of mine. Uh, I think this is the first Spider-Man, Toby McGuire and, uh, Kirsten Dunst. Uh, um, and so it's three panels, here we go. Um, um, and Kristen Dunst is turning to Toby McGuire and goes, tell me the truth. I'm ready to hear it. Uh, and, oh, no, this is the third Spider-Man where Toby and McGuire tells Kristen Dunst that he's Spider-Man, I think.

Starting point is 01:24:56 Anyways, Kristen Dunst says to Toby McGuire, tell me the truth. I'm ready to hear it. And Toby McGuire says back to Kristen Dunst and says, it takes more than 15 seconds of a TikTok video to understand the crypto asset you just bought. And then the panel goes back to Kristen Dunst and she's just crying of tears of sadness. You made this meme, Ryan. And it's a fantastic meme. Nice job.

Starting point is 01:25:17 But what does it mean? I just feel like some people needed to hear that this week, especially with like all of these assets on TikTok pumping. And, you know, I almost feel like, I almost feel like an elite baby boomer has never heard of crypto. Because I don't even, what are some of these assets? Safe moon. Safe moon. What is safe moon?

Starting point is 01:25:37 It's clearly something that's going to moon safely. Of course, Ryan, it's in the title. I get texts and people asking questions about like safe moon and I have no idea what's happening. Like, here's the lesson here. And this is a lesson for everybody who, before they invest. You can't possibly learn about an asset class and have conviction in what you're buying in like a 15 second TikTok video. Right. So just because some influencer is shilling it, just because you like the memes, do you know actually what you're buying?

Starting point is 01:26:12 If you're new to crypto, my encouragement is you just you buy Bitcoin, you buy ether and nothing else until you understand what you just bought and why. Start there. Be patient. Like, we can't be a TikTok investing generation. I'm not saying, like, I love Twitter. I love TikTok for meme propagation, these sorts of things. But don't think you can possibly understand a trans, like something you just bought with, you know,

Starting point is 01:26:41 somebody sharing like a 15 second video. And there's a lot of that going on right now. And look, I know that's nobody listening to Bankless does that. So the message is not for the people listening. but it's happening and people need to stop doing it. If anyone knows a TikToker that can explain a crypto asset in 15 seconds, let us know because we want them on our team, but I'm highly skeptical that anyone can actually do that.

Starting point is 01:27:06 Again, TikTok is fun, but it's really just like you said, and there's a reason why people are explaining, my opinions, less quality assets all the way down to complete outright scams like Safe Moon because they don't want to explain the truth. They just want you to buy the token. And so, of course, they go to TikTok where memes are literally, it's the breeding grounds of memes, that there's a complete product market fit between pompamental tokens and TikTok. But do you know what throws people, David, is unless you spend the time, like, you and I meme all the time too.

Starting point is 01:27:38 Eth is money. Eth is ultrasound money is a meme, right? People who have no idea they hear that. And then they hear Doge's money. Doge is ultrasound money. Finance is Ethereum. Finance is the future of finance, all these things. and if you're only spending 15 seconds on it,

Starting point is 01:27:53 those things sound exactly alike. The thing that we just say with conviction, because we know why, because we have hours. Years of studies, yeah. Yep, and we have hours of podcasts and we have like all of this information and data backing it at a 15 second,

Starting point is 01:28:11 like tweet sized, TikTok sized format, it sounds exactly the same. So look, don't do anything in the space until you know what you're doing, until you know what you're buying. that's the meme that's the lesson there i remember earlier this week my uh my cousin was texting me about crypto assets that that he should get into and he was like well do you know chain link and i'm like yeah i know chain link it's like well what about doge should i get into doge i'm like

Starting point is 01:28:36 no just bitcoin and ether start there just those two and they're like so boring no and they're like what about cardano and i'm like just bitcoin and ether and i'm like well what about this bnb token I'm like, just Bitcoin and ether. And then they just kept on going. Like, at some point, people just like tokens. Like, tokens are product market fit. People like to play with tokens. And they don't want to hear this boomer advice of just like, just the top two assets and nothing else.

Starting point is 01:29:02 Because they don't understand. They don't understand. And because short term, you're probably wrong, David. That's true. That's true. I'm ready to take that one. Absolutely. All right, guys.

Starting point is 01:29:12 Well, I hope you've enjoyed the roll up. Hope this got you up to speed. Dave and I always have a fantastic time doing it. Of course, none of this is financial advice. Make your own decisions with respect to crypto, but this is the journey West. It's not for everyone. We're glad you're with us on the bankless journey. Thanks a lot.

Bankless - ROLLUP: 4th Week of April (Venmo Crypto, Canada ETH ETF, Dogecoin & Safemoon, Ampleforth Airdrop)

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