Bankless - ROLLUP: 4th Week of December

Starting point is 00:00:00 If you are looking for the front page of Defi, look no further than zirion.io. Zirion is your home base for managing your defy portfolios. Zirion offers a central place for you to engage with all of the defy protocols and assets that you engage with on a daily basis, but all in one central spot. Here you can see I've loaded up a wallet and Zirion is giving me the portfolio performance of all the assets in this wallet over time, as well as a breakdown of all the assets that I own. as well as all of my transaction history that I've ever done in an easy to view fashion. Zirion also lets you invest right into DFI's best yielding financial opportunities right from

Starting point is 00:00:40 their homepage. Zerion also makes it super easy to access interest in DFI using applications like Compound and Avey in the background. And you can also exchange your assets using the Zirion app, using an exchange aggregator in the background to make sure that you always get the best rates. You can even use the Zirion mobile wallet to, add your Metamask or Argent or another Ethereum address right into your mobile wallet so you can

Starting point is 00:01:05 see your portfolio and engage in Defi on the go. Here I just loaded up my Argent wallet and now I'm going to load up my Metamask as well. And Xerion will do the same thing. It will add all of my assets and wallets together all in one space and give me a portfolio summary of what's going on. Adding wallets is trivially easy. If you already have a metamask, you can get it right into the Xirion app and it can sync with your desktop app as well. And the best part is you can also buy ether right into the app itself. Use the invest tab to look at all the things that you have invested in as well as other opportunities and coming soon to the Zirion app is the ability to buy and sell your assets

Starting point is 00:01:42 straight from your mobile device as well. So download the app. It works on iOS and Android. Go to zirion.io. Plug in your wallets and get a historical report of your portfolio over time as well as a comprehensive breakdown of all the assets that you own and how much yield they're generating for you. We're also brought to you by Monolith.

Starting point is 00:02:02 Monolith is your cool new DeFi account, your Defi savings account, your Defi checking account, except the cool thing about the Monolith Defi account is that it gets software updates, right? You actually get to increase the usefulness of this over time. So here are some of the features. Monolith is a smart contract wallet with a lot of the features that you would expect. If you've come to know Defi and what it is, you can add money to it. You can put that money to work in compound and accessing yield. But you can also swap through uniswap.

Starting point is 00:02:31 What was cool with Monolith is that they will send you a very sexily Monolith Visa card that connects to your Monolith smart contract wallet on Ethereum. So it's a really awesome tool to live a bankless life with a savings account that gets software updates. So this is something that you're never going to find out in the real world, but you can still do real world things with real money, like buy your groceries. So that's just fantastic. Coming soon to Monolith, actually already here to Monolith, is now you can buy, die, and get it sent to your wallet directly, right? So it's also being an on-ramp.

Starting point is 00:03:06 So you don't have to go through your centralized exchange, like Coinbase or Gemini or wherever. You can just go straight from your bank account right into your Monolith checking account smart contract wallet. So check them out at Monolith.xY. It's good. Bankless Station, welcome to a special holiday episode of your weekly roll-up. This is the fourth week of December. David, what are we doing today? We are rolling it up. We are rolling up the week of news into a short little snippet that gets injected right into your brain. The crypto industry, the Ethereum world, the Bitcoin world moves super fast.

Starting point is 00:03:45 And so therefore we need to roll up the week and get it injected into your brain so you can keep up with what's going on in the crazy industry of crypto. Because this is a holiday week, guys. We're releasing it to you a day early, a day before Christmas. So this is going to come out on Thursday for your Thursday morning coffee. So whatever you're doing this holiday season, we hope you are enjoying some downtime with your family, but we wanted to get this roll up to you. David, we're going to attempt to do this in about 25 minutes. And we hit market, we hit releases, we're going to hit news, some hot takes,

Starting point is 00:04:16 and finally end with what we are excited about. So as usual, you can view this on the bankless YouTube channel, check it out there or the podcast. David, are you ready, 25 minutes? Let's roll it up. Let's roll it up. All right. Let's start. We're actually starting with something new.

Starting point is 00:04:33 So let's highlight a bankless citizen this week, David. So who is this guy? Yeah. So like we say, when we usually do our roll-ups, to bring your coffee and drink it with you because this is a very high-energy show. But the bankless citizen, Mattias, I think. Yeah, Mathias, he does handstands while he listens to the roll-ups. So, Matthias, I hope you're doing a handstand right now.

Starting point is 00:04:54 And thanks for the shout-out on Twitter. and if anybody else has some crazy rituals that they do while they listen to the weekly roll-ups, let us know and add us at the bankless Twitter. Dude, two things at the same time, getting fit while you are getting crypto injected in your brain. There's nothing better. That is awesome, man. Okay, let's talk with, let's talk about the market date.

Starting point is 00:05:13 Let's start there. What is the market telling us Bitcoin continues to to hover up above its all-time high? It's previous all-time high anyway. What are we looking at this week? Yeah, this is the second phase it looks like of very. very high BTC consolidation. The last time we had a weekly roll-up, it was right before the Bitcoin broke into the 20K range. And it had been consolidating in the very high, 17,000, low 19,000 range. And then it jumped up to 23,000-ish. And now it is doing that same thing consolidating between

Starting point is 00:05:44 $24,000 and $23,000, extremely high prices in reference to historical Bitcoin prices. is yet the dumps seem to be a bot. There doesn't really seem to be significant dumpage here. Like, Bitcoin is at all-time highs, and it doesn't really want to go down from that. We'll see if that holds, but again, like super high consolidation levels from Bitcoin right now. Pretty bullish way to end December. Also, Bitcoin dominance is doing, like, really well. Are we close to 70% now?

Starting point is 00:06:14 Yeah, we are basically touching 70%. Bitcoin dominance was already doing really, really hot. And then the XRP news broke, XRP the third largest cryptocurrency, dumped 25% on the news, which just propelled Bitcoin dominance to be even higher. So Bitcoin Dominance is doing really, really well right now. And guys, if you're not familiar with what Bitcoin dominance is, of course, it's Bitcoin's percentage of the total crypto market cap. So Bitcoin now, in terms of value, represents 70% of the total crypto market cap.

Starting point is 00:06:46 That fluctuates up and down over time. It's close to its all-time high on dominance as well. At least the highest had spent in a while. Also, like corporations continue to buy, especially Michael Saylor and Microstrategie. They talked about buying more Bitcoin. It looks like they have now, indeed, bought some more Bitcoin for their balance sheet. What's going on here? Right.

Starting point is 00:07:09 So this was the announcement of Micro Strategy doing an offering, a bond offering, a convertible note. So if the price of the micro strategy share price gets above a certain number, the loan that Microstrategy took out converts into shares in the company. But this was what was announced last week. Last week they announced that they were going to do this, which implied that they were going to be purchasing $650 million worth of Bitcoin. And what they are announcing today is that they did it. Right? Like they told us they would and then they did. I'm actually surprised that it happened so quickly. To move $650 million in seven days is no small feat.

Starting point is 00:07:46 And what's interesting to me is that the Bitcoin price, it's hard to pin where micro strategy made the purchase, right? It obviously wasn't one big market buy. It was spread over time. But it's, it's hit because Bitcoin is so liquid, it's been hidden in the market frothiness that we've seen. So we actually don't see a Bitcoin price increase specifically because of this $650 million. purchase, which illustrates how liquid Bitcoin is.

Starting point is 00:08:13 Guys, this is why we always say liquidity begets liquidity. This kind of a purchase, a $650 million purchase, would have been impossible to make like five years ago, right? Like there just wasn't the liquidity to support it now. Or even in the bear market, because price creates liquidity too. Absolutely. And so as the market cap for these cryptocurrencies get bigger, then larger entities, institutions can begin purchasing them in larger quantities.

Starting point is 00:08:39 liquidity begets liquidity. Let's talk about ETH price too. So we're kind of flat from last week or so up just 3% in the last seven days. It really feels like David, Bitcoin dominance is just sucking the air out of the room here. Well, last week was the week that Bitcoin broke its all-time high. So that's, to me, that's no surprise. Like the week following Bitcoin's breaking of all-time high is a Bitcoin-themed week. You know, Bitcoin was up 21% in the last seven days. Ether up just 3%. It's just a Bitcoin week. And we'll see what happens again moving forward. You are right. Ether is struggling to keep itself up above the $600 mark. It recently touched 670. Now it's floating right above 600. So yeah, it's definitely got some room above it in comparison to Bitcoin.

Starting point is 00:09:27 The interesting thing about this is you mentioned it was the Bitcoin week. When Bitcoin dominance starts to get at these heights, people start talking about like, well, is 2021 going to be a Bitcoin-dominated year, right? It always, the conversation always swings in that direction until there is some type of reversal. So TBD on 2021, whether that is Bitcoin-dominated or whether a reversal really, like, swings the conversation, the other direction. So we will see. Let's look at total locked value in D-Fi. So that is down a little bit from about 16 and a half billion to 14 billion.

Starting point is 00:10:07 what's happening there and what's happening with the defy pulse index, David? Yeah, this is most likely just the depreciation of the value of assets inside of Defi bringing that total value locked down. DPI, the defy index token is down from where it was last week at $150 down to $111. So like still pretty flat. Things kind of are waiting for the Ethereum markets to heat up again. So it's been a quiet week. However, like you are showing right now on the screen,

Starting point is 00:10:37 the ETH number locked in DFI continues to march upwards. And that is one of the core fundamentals of the Ethereum economy. What percentage of ether is in DFI? That number continues to march up to new all-time highs. So we've got 7.3 million ETH locked in DFI and add in the ETH two staking contract, there's another almost two million. We're at the cusp of hitting two million. So that's almost 10 million locked.

Starting point is 00:11:03 So that's a good close to 10%, getting close to 10% between staking. and ETH locked in DFI. I love the new charts that DFIPulse put out this Bitcoin at Work chart too, which shows a breakdown of all of the Bitcoin assets that are tokenized on Ethereum to date. And so it shows right now there's 142,000 Bitcoin that represents about $3.3 billion tokenized on Ethereum today. This number was like zero at the beginning of last year. Like crazy, man.

Starting point is 00:11:40 Look at this growth chart, dude. Like this is just like Mount Everest, where it's just like straight up. And I love this because they actually break down the different types of wrapped Bitcoin, tokenized Bitcoin. WBTC, of course, has an 80% dominance. That is a custodial crypto banked type solution. So really interesting chart here. Do you have anything to add, David? Yeah, I'm happy to see.

Starting point is 00:12:05 Bitcoin on Ethereum infrastructure and data available, like just having data about that available to us, I think that's really important to growing that sort of conversation. The Bitcoin on Ethereum conversation is really, really hard because Bitcoiners like their Bitcoin on Bitcoin. And we are going to see over, I think the next year, we are really going to see whether the Bitcoin blockchain as an entity embraces Ethereum and embraces Ethereum as an L2 solution for Bitcoin. Or do they, or does Bitcoin kind of just stay reclusive and stay self-sovereign, stay, keep itself like in Bitcoin on a Bitcoin and kind of keep to itself? We're going to see whether the narratives and the ecosystems make that choice or not.

Starting point is 00:12:52 Yeah, absolutely. Two other things in the market section. We're just going to skim over them quickly because we got to get to releases. The first is, gray scale is like printing money, my friend, with their GPDC and their ETHE products, 25 million a month in December, annualized. That's like, what, 300 million annualized? What a great product for Grayscale, not so great for retail. Like the SEC blocking ETFs is really hurting retail. They're paying a premium for these products. But Grayscale is cleaning up there, of course. Also, we're going to get to this a little bit later, David,

Starting point is 00:13:27 but it's worth highlighting a little bit in the market section. XRP, some news came out that the SEC is going after XRP in a big way, ripple in a big way. And some of the crypto trust indexes, namely bitwise already, have just sold, liquidated all of their XRP. Grayscale is probably going to follow suit. So some interesting developments on the XRP front. I generally ignore XRP, David, but it's worth talking about it a little bit, I think, today. Do you have anything to add to that? I know we're going to hit it later, too. Yeah, we are going to hit it. later. I think it's just worth to note that like, what happened was that XRP is going, is getting pointed at by the SEC saying this is a security and then all the related infrastructure around

Starting point is 00:14:15 XRP that legally cannot provide infrastructure to securities needs to change their path. And so that's what we're seeing. The bit wise is dumping all of their XRP to remove it from their their index. Grayscale is likely going to be dumping XRP because they can't be offering a security product in the way that they're offering. Exchanges can't list XRP because it is a security. Overall, a bad day to have infrastructure for XRP because you need to exit in that environment in order to be compliant, according to the SEC. I think a lot of people saw this coming. So it's tough to be surprised, but it's, you know, that is actually happening now, I guess, is somewhat surprising. All right, let's get to releases, the graph network, which is sort of an API for all of D5 built on top of

Starting point is 00:15:02 Ethereum, some other protocols. They, they, their token, GRT has just gone like absolutely bonkers nuts this week. I was kind of looking at it in the background. But what's the story here? I see this GRT token is now a 4.6 billion fully diluted valuation. What the heck is going on? Very high. Very high.

Starting point is 00:15:23 Yeah, brand new token on the block. It immediately started pumping, which is where so much attention got thrown into it. The graph is straight up a great. project, a great team, and really a needed service for Defi. It is one of the important cornerstones that allows Defi to work while also maintaining decentralization. So very useful and valuable product. I do not think that the token is currently reflective of the value that the graph currently is adding to the ecosystem. I think there's a lot of speculation here. And the token made big headlines by like doing a like of 10x on the first day like

Starting point is 00:16:00 three times over again. I would not recommend getting into this token at this present moment. This is extremely bubbly. This is extremely frothy. However, congratulations to the graph for getting the token out the door and getting the graph network up and running. Of course, guys, this is not financial advice. We are also going to be publishing some information about the token economics of GRT and the Graph Project pretty soon on the bankless newsletter. So make sure you are subscribed to that. Speaking of tokens, David, Tornado Cash, they released a a governance token? What's going on here? Yeah, a retrospective air drop very much like Uniswap did. If you have ever used tornado cash, you might have gotten some T-O-R-N tokens.

Starting point is 00:16:42 I've seen some criticisms about the design of this token saying that it doesn't actually do much. There's not much about the tornado cash protocol that needs to be governed. It's a pretty static system. So I have heard that criticism that like what's the point of the token. However, everyone likes retroactive airdrops to anyone that's used tornado cash. So if you, you have used tornado cash in the past, go check out to see if you've got any torn tokens. Dude, we've got to do an article on a bank list about a retrospective airdrops because here's the reality, guys, if you are using D-5 protocols, chances are you're going to be rewarded with air drops in the future. So there's a list of some protocols that don't yet have tokens that

Starting point is 00:17:20 are candidates for rewards. Zapper comes to mind. Zerion comes to mind. D-Y-D-E-X. We should do a full post on this, David. Tornado just went in that direction. So, Get rewarded for using Defi early. It's a pretty compelling reason to start using these tools as well. I think it's safe to assume that your tokenless product and project that you use probably will have a token in the future. Probably. All right.

Starting point is 00:17:47 Compound Labs. Some interesting information here. So they, this is the compound protocol. Of course, they released a white paper for a new, I don't know if to call this a side chain, and proof of authority side chain on Ethereum that they are building. And it's supposed to serve as a bridge from Ethereum to maybe central bank digital currencies to other chains. What's your take on this new compound chain?

Starting point is 00:18:16 Yeah, this was met with a little bit of controversy. However, I'm sitting on my hands and waiting for this to play out. Compound is building, like you said, a unique and its own independent blockchain that does one thing, which is serve the compound protocol on that blockchain. There are definitely some advantages to this, such as low gas fees, like you're not, since you're not on the Ethereum main net, there's also some centralization going on because proof of authority chains are inherently centralized. And I think that might be like the angle.

Starting point is 00:18:44 I don't know what compound is up to. However, I do understand that they are some of the smartest and most on the frontier of many of the DFI protocols that we talk about. So I trust that they're doing makes sense for compound. Maybe the centralization element that they're adding to compound is something that allows for off-chain real-world assets. AVE has done something similar to this by creating a centralized, like, derivative version of Avey that can host off-chain assets. Maybe this is what compound is doing. What's also interesting is the cash token.

Starting point is 00:19:16 So compound has their own native stable coin, which is like the ether of their own chain. So some interesting plays. The criticism comes from compound is no longer. explicitly and only built on Ethereum is now its own self-sovereign thing. And so some Ethereum Maxis are hesitant about that. However, I'm cautiously optimistic and waiting for whatever the benefits of this thing are to play out. So I will be watching this. I agree with that, take. I think it's important to just kind of let things play out. This is definitely not a competitive threat to the credible neutrality of Ethereum. Maybe it'll amount to nothing. Maybe it'll

Starting point is 00:19:57 be useful for compound. I think it'll be useful for defy. Let's let's see what happens and figure it out. It's definitely different though than the roll up approach. Yes, very different. So the question of why they didn't go with kind of a roll up like the way synthetics is doing, you know, I still have that question in my mind. I am happy to see a more, a new stable coin enter the arena though. The cash stable coin, I think I have high hopes for that. Interesting. Okay, we'll be monitoring that for sure. Also, So another protocol just mentioned a raise. This is the union finance protocol. Tell us about this, David. Yeah, this is new to me as well. I haven't heard too much about this, but this is a project going straight after straight up credit on Ethereum. And that's credit in a very different way,

Starting point is 00:20:44 in the more traditional way, which is unsecured loans. We in the DeFi world are very used to over collateralize loans. This is going after no collateralized loans or maybe collateralized by something alternative, like your reputation, which in the legacy world would be your credit score. And so they are working on building a system that allows for unsecured loans in DFI. And so that is something that definitely could really be useful in DFI. We love our loans. And why not add unsecured, uncollateralized loans if union can figure out how to provide this? So good luck to union and congrats on the raise.

Starting point is 00:21:20 Yeah, I've seen an early demo, pretty excited about it. We will see how it goes once it hits main net. this perpetual protocol as well, they just launched Mainnet as well. This is a ETH and Bitcoin perpetual contracts protocol. David, what is this and what's different about this versus something like a DYDX that is doing perpetuels right now? Yeah, perpetual protocol is the first team that issued their PURP token, their native token, using the balancer smart contract or smart pool, which is the same pool that we distributed

Starting point is 00:21:54 the BAP tokens with. So some combination of an AMN slash Dutch auction mechanism, which I'm really bullish on as a token distribution mechanism. And with regards to the actual architecture behind the perpetual swaps, I don't know what the difference is between perpetual protocol and DYDX, that it's a little bit outside of my area of expertise, but do know that there are options out there, new options out there to go leverage long on Bitcoin or Ether. I do know that DYDX caps out at 4x and perpetual protocols offering 12x. So if you are feeling three times more degenerate than whatever you were doing on DYDX,

Starting point is 00:22:33 perpetual protocol might be for you. Tist the season to be degenerate. Is that what you're saying, David? No, just full yolo, man. Full yolo, all right. Well, let's talk about speaking of yolos. Gig coin, actually, like people during the holiday season, or in fact, all year have been Yolo giving and funding,

Starting point is 00:22:53 public goods on the Ethereum ecosystem and in general in open source software. So Ginkoin just passed 10 million in funding to open source software over their history. The vast majority of that occurred this year. This is super bullish for public goods. Yeah, my take on this one is that this is just a symptom of Ethereum building the tools that solves its own problems. Ethereum has historically had terrible funding problems. How do we fund development? And Gitcoin is the platform that really tackles that problem head on. And seeing Gitcoin have all the success that it has had makes me really, really optimistic because it just shows that like Ethereum has a new problem,

Starting point is 00:23:38 Gitcoin has a way to fund solutions to that problem. So bullish on Ethereum solving its own problems. I just want to add to that to you, David, it's like bullish Ethereum solving its own problems without taking shortcuts. Because a couple of years ago, the shortcut that everyone was taking, in vogue is basically, okay, your protocol should start issuing money to developers, basically, to public goods, to infrastructure, right? And so a lot of chains like decred, Tezos, they started doing that. Of course, the tradeoff to that is that starts to affect the credible neutrality

Starting point is 00:24:13 of your monetary policy, right? Because then there's a group of people who own the coins, who are voting, like a plutocracy, and saying, yes, these developers, this group, get some of the new senior age coinage that we are minting, and these other folks don't. That is definitely bad for the credible neutrality of the monetary system. Ethereum could have done that. In fact, there were proposals, were segments, small segments of the Ethereum community wanted to do something like that, but it didn't. And, you know, the net effect is we have maintained a credibly neutral monetary policy in Ethereum. And we are also solving our own problems the harder way. So very bullish.

Starting point is 00:24:55 And I think bullish on Ethereum I'm not taking shortcuts to this solution as well. Yeah. And I would also add on to that. It's like Gitcoin is something that is really resonant with some of the core values of Ethereum. Funding public goods is one of the world's hardest unsolved problems. It's not just an Ethereum problem.

Starting point is 00:25:13 It's a world problem. How do we add and direct money to things that aren't going to profit anyone yet still create a better world for ourselves? So when I see Gitcoin pushing out $10 million in public goods funding, I see that not only is really optimistic for the ecosystem that that's benefiting from, but as a proof of concept of other ways to solve bigger and bigger problems that aren't just Ethereum related. It reminds me of that slaying Moloch episode, guys, you have to look that up. So one of our most popular ones of the year, one of my favorites of the year podcast episode.

Starting point is 00:25:45 All right, David, we talked about releases. We talked about market. Let's get to some of the news. let's start with the news again about Ripple and XRP. Well, what's worth repeating? I mean, I guess what's happening with the SEC versus Ripple thing? Right. So it's been long speculated that XRP is a security that is under the purview of the SEC.

Starting point is 00:26:09 The SEC hasn't done anything yet up until today or yesterday, and that was the day. People have been speculating about this happening for years, and now it's finally here. this entire industry has always hated XRP. As soon as you get into the world of crypto and start to begin to understand how to evaluate and understand Bitcoin and Ethereum and what makes these things so awesome, you then see a complete opposite ethos or values coming out of the XRP Ripple project. And so the XRP or at the SEC is going after Ripple for generating this, you know, quote unquote shit coin and then marketing it and then dumping it and doing all of these extremely

Starting point is 00:26:48 unethical things to prop up the valuation of the token so that they can continue to sell it to continue to fund themselves. Brad Garlinghouse, the CEO of Ripple, took in $600 million in personal revenue. That's revenue into his pocket from just Ripple from being the CEO of Ripple. So what's interesting here is like this is not only just a retail scam trying to pump the XRP token, but it's also a regulatory heist because Ripple has also trying, been trying to get cozy with regulators by donating to the Biden administration, just being really cozy with people in D.C. And so it's one part scam, one part heist, and I'm glad this over. Yeah, yeah, absolutely. Even Vitalik got a little spicy, I think,

Starting point is 00:27:35 on Twitter. This is a little off brand for Vitalik, but it's interesting that he called SRP a shit coin on Twitter. And this is some shade that XRP lawyers were throwing at Bitcoin and Ethereum, and I think part of the reason why you've just taken kind of the hardline stance against XRP that you just took is because XRP and Ripples really specialized in decentralization theater, right? So because retail is not as plugged into the credible neutrality and the decentralization that make Bitcoin special and make Ethereum special, XRP very much tries to disguise themselves as if they are just as decentralized, have the same value set as Bitcoin and Ethereum and sell their token to retail.

Starting point is 00:28:21 And like many who are new to crypto, can't really tell the difference. I don't know how many texts I've gotten from people over the years saying, yeah, I'm going to buy Bitcoin, Ethereum, and XRP. And I'm like, guys, like one of those things is not like the other two, right? Like, you should make sure you know what makes Bitcoin and Ethereum special before you go start buying other cryptocurrencies that, like, you have no idea where their value comes from. Not only is XRP to me, in quite possibly a security in a scam, but it's also a bad investment, right? It suffers from the like the MV equals PQ velocity problem of 2017. It's just not

Starting point is 00:28:59 a good money. So lots of problems with it. It looks like the ship might finally be at least under attack. But part of me, David, is wondering if they don't just get off with a slap on the wrist, a multi-million dollar fine, maybe a large fine, maybe $100 million, but they can kind of afford it and go on their merry way. I'm not sure what's going to happen. Do you have any thoughts there? Yeah, it's definitely a very strong worry of mine as well. We saw this happen with the EOS case, which EOS also had a dubious token sale, arguably much less dubious than XRP, but EOS, they raised like something like something crazy in the multiples of billions of dollars. And then they got like some $60 million fine, which at the end of the day, like, is that even a fine if you've raised

Starting point is 00:29:44 billions of dollars? I'm optimistic that the SEC will not go that same route simply due to how much money that XRP raised specifically from dumping XRP tokens into retail and also some of the back office communications that the SEC seems to have stumbled upon, which are extremely damning about the intentions of Brad Garlinghouse and other members of the ripple board. Yeah, very interesting. Another development has been this week, the ledger breach. So if you have a ledger wallet, hardware wallet, which we love, like, it's a great, great product. David's showing a few fizzed. Wow. This week, some hackers actually published the full list. So I believe in June of this year, there was a breach. So anyone who had ever purchased a letter,

Starting point is 00:30:39 up to June through ledger specifically, their information, like their name, their email address, their home address, wherever the ledger product was shipped to, was hacked and taken. And that was published online through dark markets sold in that way. Now some hackers actually publish them for downloads very publicly. So you don't even have to purchase the list of all ledger customers. This is pretty bad because, of course, crypto is a bearer. asset and Ledger absolutely should have been more careful. I think they're on a little bit of an apology tour at this point in time. What's your take on this, David? Yeah, it's quite unfortunate.

Starting point is 00:31:22 There's nothing worse than just a list of people that are known to be bare asset holders along with their email address, phone number and physical address. That's like just a bad thing to come into the world. Ledger, I guess, could be blamed for just being careless. Like, we all know that centralized databases of personal information are honeypots. And Ledger specifically was like one of the hottest lists of information specifically because of the bare asset nature. Again, this isn't a problem specifically to crypto. This is just a privacy and data problem that we've known about. Like, this is nothing new or specific to crypto. It's just the fact that it's happening inside of our industry, which makes it so bad.

Starting point is 00:32:04 Kind of feel bad for Ledger because, like, it's the same, like, almost most companies have this problem, you know, like most companies have been hacked and had their data breached at some point in time, and that's always bad. It's just in the crypto world, it's just 10 times as bad due to the bare asset nature. So, yeah, Ledger messed up here. Kind of feel bad for them because it's like a problem that everyone messes up with at some point in time. Overall, just like an unfortunate reality.

Starting point is 00:32:31 Well, I feel bad for them, but I also like more feel bad for their customers, right? There's a lot of people that are now getting like scam emails. They're getting scam text messages. I don't think there's like serious threat for most people of somebody showing up at your house. But the fact that this information is out in the wild and as accessible as it is is not good. So here's what you need to do to protect yourself. I recommend actually Argent just put out this fantastic website. at Argent.xyz slash ledger hack, you can put in your email address and actually see if you are on the

Starting point is 00:33:08 list. They'll email you and show you essentially what information may have been disclosed. What you need to do is completely ignore any text messages that you receive from ledger, any like fishing email addresses from somebody representing ledger. Make sure you triple check that, never share your ledger private keys. Of course, hopefully, this kind of like like fades away but in the meanwhile got to got to protect yourself and don't do anything stupid because hackers have your data now if you purchased a ledger unfortunately meanwhile we'd love to welcome on the quarter million new subscribers to the bankless newsletter somebody made that joke right like we just signed up everybody for like our favorite newsletters um all right david let's get

Starting point is 00:33:56 to the next one the finsen proposed rule maybe we don't have to dwell on this because guys we we had a great conversation with Jake Trevensky, and we summarized that in our Market Monday report on the newsletter. So you go check that out if you want it. But like, what's the TLDR here, David? Yeah, the TLDR is that FinC is asking for newer and much more strict regulations with regards to KYC. They are just constricting the bottleneck that KYC imposes on off-ramps. You now have to make a report if you make a transaction greater than $3,000 outbound out of your Coinbase or custodian service. If it goes to a wallet, you need to say who that wallet is owned by, whether it's you or your friend or family member. You need to give them their name and their physical address as well.

Starting point is 00:34:42 So you need to report who and who lives where, which is pretty, pretty ridiculous. That is the strongest KYC requirements we've ever seen ever from any sort of industry. And it's, there's a lot of second and third order consequences that it's pretty obvious that the drafters of this potential rule. Do not understand. So like Brian said, we go through all of those details with our episode with Jake Schrovinsky. It's in your podcast player. It's also on the YouTube. So check that out for more information. There's a chance we can overturn this. It is a proposed rule now. So there's an opportunity for us, too, that we'll be publishing more information about how you can comment, how you can get involved. So we can shoot this down before it becomes a reality.

Starting point is 00:35:24 Not the end of the world, but not great news. Speaking of like, I guess news, in general. This is really interesting. So everything that you've heard if you've been in the U.S. about Congress issuing a $600 check to all Americans, of course, they issued a $1,200 check back in, what, like April, May of this year. Another stimulus check was supposed to go out. Congress went through the arduous process of like getting to a compromise where they're like, yep, $600 check. And then last night, Trump shoots it down. And he's like, and he's like, no, I don't think 600 is a good idea. I want everyone to have 2,000. So now they're kind of back to the drawing board, I guess. And this is just more of the 2020 theme that we've seen of money printer go

Starting point is 00:36:10 burr. Individuals are getting money. So our businesses, so are corporations, right? Why shouldn't individual Americans? But it might have a very interesting effect on the monetary policy in the U.S. Yeah, what's interesting to me is about how this $600 check proposal news got absorbed by the people. And as soon as the $600, you're getting a $600 check when the last time you got $1,200 check and it's also been like six, seven months since that last check. As soon as that news broke, I started seeing guillotine memes. And that is something to pay attention to. If the populace of a country is making guillotine means about not receiving enough, aid from a central government while the rich are getting like roughly 10 times more than what the

Starting point is 00:36:58 poor are getting. That's something to pay attention to. What's also worth while paying attention to is how quickly the Democrats rally behind trying to up that number to $2,000. And then what's even more interesting is that Trump just went right with it. So now it's the Democrats and Trump versus Mitch McConnell and the Republican Party, which is just one of the most interesting things that I think has happened in this month with regards to politics. muted. We've made the point that perhaps this kind of, this kind of activity starts to shake the illusion and the meme of money, right?

Starting point is 00:37:33 So people think of money as this, they don't think about money all the time, but they just use it as a tool. But this, this causes individuals to stop and think about where the money comes from. And if it can just be printed, well, then it's not scarce. And is it really the money I want to store my, wealth in. Very interesting psychological effect, I think these air drops will have on the American public and on the world as we sort of come to social consensus on what the money of the

Starting point is 00:38:02 21st century should be. I think there's a bull case for crypto there. People getting these $2,000, $2,000 checks potentially, where if they have excess beyond kind of the groceries and living expenses, where they're going to store this cash, David? Well, we saw Brian Armstrong tweet out the number of specifically $1,200 deposits into Coinbase weeks after $1,200. No way. I didn't see that. Oh, you didn't see that? Yeah. Yeah. So the number of $1, specifically $1,200 deposits to Coinbase spiked right after the $1,200 check that got distributed back in like April or whatever. I don't see why this would be any different this time. Wow, very interesting. All right. A couple other things we could talk about, of course, is a switch

Starting point is 00:38:48 is doing a central bank digital currency. Seems like every week there's a new country experimenting with that. We will include a link in the show notes here. Also, Hudson Jameson, he has been the Ethereum Core Dev facilitator. He is stepping down after a fantastic run. And Tim Beko, who is running the EIP 1559 project, is taking his place to kind of lead coordination on ETH One. Look, man, this is super exciting because Hudson's been great.

Starting point is 00:39:18 really exciting to get Tim in there, get some fresh blood looking at it. I'm very bullish Tim Baker in this role. I think he's going to do well. And I think ETH one will ship faster as a result of this sort of changing coordination leadership. What's your take here? Yeah, Hudson, Jameson, just one of the friendliest people that you will ever meet has done a fantastic job, like just cohering the Ethereum community. I call people like Eric Connor and Anthony Sizzano and D.C. as like Ethereum's unofficial community managers. Well, Hudson is actually the official community manager of the Ethereum Foundation. He's been in Ethereum since day one. He's helped, quote unquote, heard the cats, they heard all the developers and get them coordinated. So Hudson,

Starting point is 00:40:00 congratulations on finishing this roll out with a bang. And yeah, I'll echo what you said, Ryan, about Tim Beko. Tim Beko has done a fantastic job with EIP-1559 in leading the charge there. I have full faith that he'll be able to continue that charge with all the other things that are useful about Ethereum that I know many people don't really know about in comparison to EIP 155559, but that is still extremely useful. And that is things like account abstraction. I don't actually understand account abstraction all that well. However, all the people that I do listen to, such as Mariano Conti and Vitalik himself,

Starting point is 00:40:34 are really, really bullish on account abstraction. And so getting features like that finished off and polished and included into ETH1 is going to be really, really useful in the long term. and Tim Baker is absolutely the man for the job. If you want to live a bankless life, you need to get a hardware wallet. There is no alternative for storing your crypto in a self-sovereign fashion. That's why I have four ledgers that I use to manage my different crypto assets using the Ledger Live account as well. Ledger Live is like your home base for managing your Ethereum, Defi, and crypto accounts.

Starting point is 00:41:09 It does a really good job of aggregating all of your different Ethereum wallets if you are the type of person that uses more than one, but you can also add other cryptocurrencies like Bitcoin or Cosmos or whatever your preferred blockchain is. And then it will display an aggregate portfolio of all your accounts at the main page. One thing that Ledger is doing a really good job of is enabling all the money verbs that me and Ryan talk about with the Bankless Gilcube enabled in the Ledger Live app. So right now in the Ledger Live app, you can buy, sell, lend, swap, and stake your crypto assets, which is doing a really good job of fulfilling all of the money verbs in the bankless skill cube.

Starting point is 00:41:45 Something that's new to Ledger Live is Ledger Swap, where you can swap assets one for another directly inside the Ledger Live application, ensuring trustlessness in your financial activity on Ethereum and on Bitcoin. If you want to learn more about what you can do with the ledger, go to the blog post, The Power of Ledger Live on the Ledger website, where they share some of the more advanced things that you can do with your ledger that you might not have known about. There's a link in the show notes that will take you to the Ledger Shop where you can get your preferred ledger hardware wallets. I personally like the ledger NanoX, but I also have

Starting point is 00:42:19 both. They're both great options. When you own a ledger, you own your own assets in the way that they have been designed to be held by the user and the user alone. So go get your ledger today to make sure that you are as self-sovereign as possible. The bankless state and the nations are brought to you by WIRE. WIREN is DFI's first self-building community-run project, which I just get really, really excited about. Yern is a system that seeks out yield in DFI and it does that in a number of different ways. A very aggressive way is with the vaults where you can deposit your preferred asset of choice and different DFI experts will come in and generate a strategy for what to do with your deposited token, right? And so it'll go find ways to get yield in that deposited token in DFI.

Starting point is 00:43:07 For those who want to just earn yield on their stable coins, the earn system is for you where you can deposit your preferred stable coin, and YERN will go and figure out which money market on Defi, and DFI is producing the best interest rate, whether it's DYDX, it's compound or AVE. It looks around DFI to see where the yield is coming from, and it direct stable coins automatically so you don't have to. Check them out at y'earn.finance to get started, and also check out the stats page to see what other people are doing. David, we've hit the news items. Let's go into some take. So do you want to start with this one from Hayden Adams?

Starting point is 00:43:42 Yeah, so in the Missouri exchange list, it lists the country that every single exchange is domiciled in, right? So like Coinbase is in America, finances in the Caymans. But Uniswap just doesn't have one. And Hayden gives out this tweet where he says, can you go back to the tweet? Hayden says, you joke, but legit, the coolest thing about this page is not Uniswap competing with centralized exchanges. It's Uniswap being the only one without a country section. that is filled in a blank country section. Ethereum is the closest thing to a country that UNISWAP has.

Starting point is 00:44:18 This tweet resonates with a lot of the themes that we've been speaking about on the bankless program. I want to send this tweet to our friend Rowan Gray. And so he can talk about protocols that can exist outside of the nation state and actually facilitate human coordination. It's something we, of course, are bullish on. He thinks that the nation state is kind of the sole coordination vehicle and the legal structure as well.

Starting point is 00:44:40 It's something that is proving to be the case that like, hey, human-less systems can actually facilitate massive amounts of commerce and coordination activity. Very cool. I do hope that Missouri adds Ethereum as the country. I do feel that in there. Or how would the bank was station, David? That would be too cool. That'd be too cool. All right. What's our next take here? Next take is from you, Ryan. You want to take it? Oh, sure. Yeah. So this maybe goes off of the conversation. with Roan Gray to you, but this is part of the stimulus package we're just talking about in news.

Starting point is 00:45:17 Congress actually stuck in some additional language in there that has nothing to do with helping individuals or fiscal stimulus. They actually put in some copyright language. So language that's in favor of copyright laws and restrictions to the point where you can actually get fined for streaming videos. You can actually get fined for taking copyrighted materials, creating memes of them and uploading them to the internet. The fine could be as high as 30K for sharing something like a meme. There's some information about this. We'll include in the show notes.

Starting point is 00:45:49 But this kind of like stuff kills me, dude, because it's like Congress is supposed to be there for the people and promote legislation that helps the people. And we've got a stimulus package that is meant to help heal the wounds from coronavirus. And they're putting in this kind of pork. And it's not like self-serving pork. it's like clearly lobbyist injected special interest injected crap that nobody wants and that nobody needs and not even relevant to stimulus or not even relevant and it erodes some of our some more of our digital freedoms and digital rights right so like boomer congress strikes again

Starting point is 00:46:26 and quite frankly david it pisses me off dude it just pisses me off every time this happens and this is the reason in our conversation with rowan gray we made the point hey rowan you want to do this m mt stuff right that's all great but like The government right now is not working for the people and you want to put all our eggs in that governance basket. It's just going to become corrupted and even more corrupted as you continue to do that and give them more monetary power. That's, I think, what crypto is doing to providing a lifeboat, an alternative, right? We don't necessarily want to give this broken governance system more monetary and economic power. We want to diversify out of it.

Starting point is 00:47:07 that's what the crypto movement is all about. So that's my hot take. Boomer Congress continues to screw over our digital rights when they have the opportunity. We always have to be vigilant to try to stop it. But crypto is an alternative approach that has neutrality baked into its core. Yeah. And it's just all too obvious as to why people are being distrustful in institutions. When institutions or the government tries to give the people money for COVID relief,

Starting point is 00:47:36 I guess thank you, but then also when you try and like include like a bunch of like different like restrictions on what you are able to do with your life and then like dangle the COVID relief carrot in front of you at the same time saying like, hey, we're going to you get free money, but we're also going to restrict your rights. Like fuck you. Like no, like how do you, how do you as an institution ask for trust in a situation like that? Like you don't. Like there is no trust in institutions these days and this is why. Definitely part of the trust erosion story for sure. Our day, we did take, what are you excited about this week, my friend? I'm excited about cultural spillover.

Starting point is 00:48:12 And here's what I mean by that. In the Ethereum world, in the crypto world, in the Bitcoin world, we have a lot of culture. We have like a lot of shared memes that people don't get from the outside. Like we all have like the same way of speaking. We all, we all value the same memes. We all laugh at the same jokes. We have really strong culture in the crypto world. And what I think the world really, really is thirsty for right now is new form.

Starting point is 00:48:36 of culture, and especially digital communication and social media, people love having digital culture. And that is what we have cultivated in the world of crypto. And specifically, the culture we've generated is like the culture and jokes and memes around making money and growing wealth. And especially in hard times like this, where people are looking for like online communities, social communities, and also looking to make money, I think that is culturally product, fit. I think the world of social media is going to be compelled by like some of the Dgen jokes that we make on crypto Twitter. And that's kind of what I'm excited to see happen in 2021 is exporting crypto culture to the rest of the world that is interested in it. I think that actually this is

Starting point is 00:49:25 something that the rest of the world is more or less ready for. We see people like DGen and aping into Robin Hood investments back when back in the bearer, the crash, in March and April, that same energy is super relevant to crypto. And I think the cultural spillover from crypto to just general millennial type communities, you know, the group DMs, I think that's going to happen really, really strongly in 2021. And that's something I'm really, really interested in. That's super cool, David. I do think actually the spillover could happen the other way, too, where some of the other culture that hasn't historically been crypto-native will become a bit more crypto native. I'm thinking of the the Beeple sale. So a digital artist and people is kind of this

Starting point is 00:50:11 following outside of crypto completely, just sold $3.5 million of his art collection, right? That is, you know, elements of digital culture that haven't historically been crypto becoming tokenized and becoming crypto-native. And so it's like this, this fusion, this melting pot with with other cultures. That's really exciting, I think, in 2021, too. I'll echo that. Yeah, and if you want to get in on the crypto culture, the bankless Instagram is heating up. We have a guy that is managing the bankless Instagram. So if you are on Instagram and you want crypto memes in your Instagram feed, follow Bankless HQ on Instagram. We are trying to spread the frontier, spread the message on Instagram.

Starting point is 00:50:52 So give us a follow there. Shout out Michael Wong, who is helping us with that activity. Yeah, very cool. Ryan, what are you excited about? You know, I'm excited about all-time highs, my friend. So Bitcoin hit its all-time highs. But Lucas from our team, from the bankless team, put together a post about Ethereum. So Ether, while Bitcoin hit all-time highs, interestingly enough, ether is still 50% down from all-time highs from a price perspective.

Starting point is 00:51:19 And yet, this is what's exciting. Yet the Ethereum economy is hitting all-time high on almost all of its other metrics besides price. So Lucas just published like 10 of those metrics. The first is like network utilization rate. So the Ethereum network is being used more than it's ever been used before. That hit all time highs in 2020. A hash rate. So this is the compute power that secures the Ethereum network.

Starting point is 00:51:45 That's at all time highs, never been higher than 2020. Ethereum open interest, ether open interest. So ether as kind of an options market, the liquidity in the Ethereum Ether options market has hit all time highs as well. This provides a more price-efficient market and more liquid market, which, again, liquidity begets liquidity. We've got defy users hitting all-time highs this year. So that's number four. We started the year with 100,000.

Starting point is 00:52:15 Now we have over a million defi users. So we are the size of a small American city at this point. And it's a 10x growth, right? Total locked in defy. That hit 15 billion this year. Blue previous all-time highs out of the water. We were like very less than a billion at the start of this year. So that's incredible as well.

Starting point is 00:52:37 And then he goes through five other all-time highs too. So Dex volumes, all-time high. Bitcoin on Ethereum, we talk about that every week on the weekly roll-ups. That's all-time high. Heath in grayscale. Eith is now becoming institutionalized as well. So 2.3% of all Ethereum supply is in grayscale. that is all-time high.

Starting point is 00:52:59 Stable coins on Ethereum, 20 billion circulating in the Ethereum economy. That's number nine. That's another all-time high. And of course, there's now 2 million. That's about 2% of all ether in the ETH deposit contract. That didn't even exist at the beginning of this year.

Starting point is 00:53:15 Didn't even exist at like last month in November. And that is now all-time high. So the Ethereum economy is flourishing. It is hitting its all-time high. And the question in my mind is, how long will it take Eith Price to catch up? Nick Carter put out a post similar to this with Bitcoin metrics. And he put that out about a month ago. It was basically like Bitcoin's at all time high, transaction volume, all of these things.

Starting point is 00:53:41 But price isn't yet. And within a month, price breached all time high and caught up. We will see what happens in 2021 if price catches up with all of these Ethereum economy metrics all time high. So I'm excited about that, David. And you know what? I'm just excited we had a good year in general in crypto. So ether price is up 265%. Bitcoin price is up 218%. The NASDAQ in comparison, that's a 40%, a gold was up 20% S&P 14%. So crypto outperformed this year, my friend. When we're starting the year, like we weren't sure which way it would go. We were bullish on this industry long term. and it's nice to have some feedback from the market that like directionally,

Starting point is 00:54:29 crypto has been right. And like, you know, the bankless thesis has shown itself strong this year. That's what I'm excited about. Listeners will know that we are generally permables on ether on the bankless podcast. However, I still believe that the onus is on you if you don't think that ether will cross all-time highs in Q1, 2021, if not even sooner than that. Yeah, absolutely. All right, guys, this was a little long, but hopefully it gets you through the holiday season.

Starting point is 00:54:58 On behalf of David and myself, everybody in the Bankless Nation, have a Merry Christmas. Have a Happy New Year. We will see you next week.

Bankless - ROLLUP: 4th Week of December

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