Bankless - ROLLUP: 4th Week of February (BIG DIP, NFT Culture, Coinbase IPO, Ethereum Jobs)

Starting point is 00:00:00 All right, everyone, welcome to the weekly roll-up. This is the last week of February, the fourth week of February. David, what do we do on these weekly roll-ups? We roll up the full week of crypto, which is always an ambitious endeavor. First, we start with the markets. What are the markets saying? Then we go into releases, what got released in the last week of crypto. Then we go into the news, what happened in the news cycle.

Starting point is 00:00:37 Then we get into some ecosystem takes, who had some interesting, opinions over the last week. And then lastly, we get into what David and Ryan are excited about. And then we top things off with the meme of the week. I like how you fit that in, David. Are you ready to start? Let's get going with markets. You ready? Absolutely. So again, so much happened in markets. Let's get into it. All right. Let's roll them up. Markets. Let's start with Bitcoin. What is going on with Bitcoin? It was up. And now it's down. What's happening? Bitcoin topped out at $58,300, and now it is at the low, low price of $49,100. I feel like this is our biggest correction in the crypto markets, this entire quote-unquote,

Starting point is 00:01:23 bull run ever since like the end of DeFi summer. Right. So DeFi summer happened. And then that was a pretty big correction. We had like a quote-unquote like two-month bear market. This is mostly a facetious joke. But that was like kind of the last time we ever had any big correction ever since then. It's been basically there's a linear up into the right trend.

Starting point is 00:01:45 And but finally we got this big correction both in Bitcoin and in ether prices. But the trend is still your friend. The trend is still here. We're still looking good over the long term. David, we've been told to respect the pump. I think we've got to respect the dip, my friends. Sometimes these dips happen. This is perfectly normal during a bull market.

Starting point is 00:02:03 You're going to see 30%. You're going to see 40% dips. sometimes a little bit higher in previous bull markets that happened three or four times before the end of it. This does not necessarily mark the end of the bull market. And I'm still bullish. Heath went over 2K as well this week. But now it's back down. Where did we go and where are we now? Yeah, Eith broke 2K and it hit $2,040. So just got a little bit over 2K. Decided it wasn't really it's the right. It wasn't the right time. you know, we're saving it for later. We're back down to $1,572, almost $500 off of the ETH top, which again, it's a big correction.

Starting point is 00:02:47 Legacy market participants don't understand like the magnitudes of these moves. But in crypto, this is just a normal correction. This is just how it goes. David, I'm just glad we got a chance to celebrate ETH 2K, my friend. Like, you know, that felt good. Just hitting that milestone, even though we're under now, I'm confident that we'll get back there again. What happened to total locked value in defy? That's down a bit too. Yeah, we peaked out at $43 billion locked in defy. The last weekly roll up, we've reported it at 42. And today we are at

Starting point is 00:03:20 $37.5 billion locked in defy. It actually takes a little bit more of effort and energy to figure out, like, well, what is just asset price appreciation versus depreciation when it comes to locked in defy or what is actually like deposits and or withdrawals from the ecosystem. So there's a little bit of noise here in this metric, but still like $37.5 billion, still a large number, just a little bit, you know, shaved off the top. Next big milestone seems to be $50 billion. We'll see how long it takes us to get there. Let's talk about DPI. So this is the the defy pulse index tracking the top 10 defy tokens. You know what's interesting about this. If I look on the weekly view, David, It's about flat.

Starting point is 00:04:04 So it didn't take quite the hit that. It definitely went up with ETH, but it didn't take quite the hit, at least from indications. Where are we hanging out right now? Yeah, we are just below $400, $394 for one DPI. Yeah. And let's take a look at the DPI-Eth ratio to see sort of that effect. So it's up a little bit.

Starting point is 00:04:32 from last week. Right. This is definitely where you can see the strength that DPI and DFI at large had against Ether. The last weekly roll-up, it was also the first major correction of DPI versus Ether, but now we are back up to the week before that, right? And so DPI, once again, outperforming Ether. Do you know, I have a reason for this. So it's always, it's always a mistake. It's often a mistake, I would say, to attribute kind of like the noise of markets to specific fundamental reasons. But I think this might be due to the Binance chain narrative, David. So Binance chain has been gaining some steam and volume and usage, some real, some not so real. But that aside, has been gaining some usage while ether, Ethereum fees, gas fees, have been going kind of off

Starting point is 00:05:25 the charts. And I think the defy token index move up, while eth price move down. And, or at least this ratio moving up a bit might be as a result of that, might be as a result of people seeing that narrative or hearing that narrative and being a bit less bullish eth relative to defy tokens. Do you think I'm jumping the gun on that take, or do you think that's a live narrative that is affecting these prices over the last week? Yeah, yeah, we definitely saw the finance chain BNB token absolutely skyrocket last week to I think, yeah, it became number three in market cap behind Bitcoin and Ether that is Binance

Starting point is 00:06:06 Chain next. I think it even passed Tether, which is pretty crazy. So Binance Chain definitely riding in the same tailwinds that Ether is riding in. And if you are bullish finance chain, you might even say that Binance BNB token kind of took the wind out of Ether's sales. I'm skeptical as to how long that lasts. But last week was definitely a win for Binance chain believers and B&B holders. Yeah. Are you a BNB token? finance chain believer, David? I don't know. Not at all. Not at all. Okay. Why? CZ doesn't pay my salary. He doesn't pay my paycheck. Why would I believe in his product? No, I believe in protocols. I think we'll have time to get into that. Hopefully during the take section, I'm sure one of us

Starting point is 00:06:47 have some hot takes on that. Let's go to the next though. I'm the market side of things. While this happens, again, anytime there's buys or anytime there's sales, so, you know, in a bull run or in a bear run with these market moves. Dexes tend to do well, or at least exchanges tend to do well. And lately, decentralized exchanges have been just crushing it in terms of volume. They had their biggest day ever, over $4 billion in daily dex volume now. I mean, these numbers would have blown our minds back in 2017. And now we're hitting them on the regular.

Starting point is 00:07:23 And they feel like they're only going to go up. this bull cycle. What do you think about this? Yeah. So volume is goes hand in hand with volatility, right? And so when there are big moves and especially big moves down because big downward moves tend to happen much faster than upward moves. And so there's a lot of volume that's compressed into a short amount of time. And I think that blow off top from $22,000 down to even the low low price of $1,400 where ether was. That's a big move. And that means that there's going to be a lot of on-chain liquidations. There's going to be a lot of people selling off their positions. There's going to be a lot of people taking positions. There's just overall going to be a lot of

Starting point is 00:08:04 volume. And we're seeing that in DFI. We're seeing that with DECs's, just all-time highs with Dex volume, on the upside and on the downside. This is just how volume works. Last I checked, Dex volume was like something like, you know, five to seven percent or so of centralized exchange volume. I'm looking for that ratio to go up. I'm looking for decentralized exchange volume to start consuming more and more of the centralized exchange traffic. And we'll see how that turns out. David, this is a really, like we refer to D5Pulse all the time. That's D5Pulse.com. They just came out with a crypto dollars chart, which I think is super cool. This is all time, David. So, dude, look at this. It's like, it's like Climb and Everest. We got a mountain of crypto dollars being

Starting point is 00:08:49 printed. Each of these crypto dollars generally is backed by some collateral. So this is not fractional reserve banking, which is interesting, right? Each of these crypto dollars actually represents a dollar of value in collateral or a dollar in the bank. But we're at over 35 billion now in terms of crypto dollars that are active and live on Ethereum. And I think this probably includes maybe some that are on, or is this just Ethereum? I'm actually not sure. David, do you know? I believe this is just Ethereum. Yeah, I don't think there's a single other. chain that they have listed here. The interesting thing about this metric, and you can see a similar chart with a BTC on Ethereum, charts tend to go up and down, but not these charts.

Starting point is 00:09:36 This chart is only up, which really is really indicative of crypto dollars when deployed to Ethereum, don't leave. They only stay. And Bitcoin, when it's deployed to Ethereum, it leaves a little bit more than crypto dollars, but generally it stays there. And so this is one of the fundamental theses that we have about Ethereum. as like the nexus of internet economic activity, as the global permissionless settlement layer, once assets come to Ethereum, they don't leave because they're more useful on Ethereum. And so like we see corrections in crypto prices. We see corrections in other realms.

Starting point is 00:10:08 But with crypto dollars up and to the right, never ever down. Yeah. Like just I guess ask yourself, if you have a sell plan, David, right? I'm sure you have some sort of sell plan. You know, I'm sure like most of us in the bankless year and you're not going to sell all of your crypto assets, but you might sell some when the market heats up too much during this bull cycle. Aside from money, you need to pay bills, rents, living expenses, that kind of thing. Like when you sell, are you going to bring your money back into your Wells Fargo account?

Starting point is 00:10:39 Or what are you going to do with it? Why would I do that? Like my Wells Fargo account, that's their account that they let me use. I would rather use my own account on Ethereum. I was having this interesting conversation in the RETH finance subreddit. Shout out to all the R.Eath finance bros, underappreciated subreddit out there. And I was saying like, you know, when I do myself, which I do plan on doing, towards the end of this, towards the end of this cycle, I plan on holding crypto dollars

Starting point is 00:11:08 in my ETH wallet just because that's my account, like self-sovereignty, self-custody. What's also interesting as I also added into this conversation, and this is kind of where the conversation led is, I actually also plan on having a decent number of my crypto dollars that I will sell into, not inside of smart contracts, right? So not only am I selling into dollars, which are stable and, you know, while we shit on the dollar at the end of the day, it is the dollar. Can't really hate on it.

Starting point is 00:11:34 But I'm also going to keep it out of contracts or at least make sure that when I do put them into contracts, they are insured because one part I want to lock in my profits, but then I also want to reduce risk. And right, and so buying into the dollars, having a position, in dollars is a reduction of risk position. But if I put those dollars into contracts, then I'm taking more risk, right? And so I actually plan on selling into dollars and also keeping them out of contracts, just to be able to hold for the long term. Yeah, I totally agree. The same plan, right? So my money is not going to touch my traditional bank account, Wells Fargo

Starting point is 00:12:08 account where I'm earning like 0.01% almost near zero. Just call it zero. Zero percent when there's crypto dollar stable coin interest earning opportunities like spanning from three to five to 10 percent, right? And some of these are relatively low risk. Some of them are more risky than others. So it's exactly what you said, David. The money, once it goes into crypto, it's like a black hole. It ain't coming out. Even if you're selling reserve assets because they're overheated like Bitcoin or Eith on the cycle, they're staying in crypto dollars. All right. Before you move on, Ryan, I really like that metric on the left that they have is custodial dominance. Oh yeah. So I was going to say it's a really cool metric. All right. So what does this mean? What does custodial dominance mean? Yeah, it means what

Starting point is 00:12:54 percentage of crypto dollars are trusted, right? USDC tether. What has like a custodian managing a dollar at the real world, right? So this wouldn't include die. And so that's going to be an interesting metric to watch over time. And it's at 93%, which is a little bit sad. It's a little bit sad face. Like the trustless dollars have not succeeded against traditional crypto dollars yet. Yeah, but they have such strong tailwinds because there's so many dollars out there and there's much, they're easier to get out the gate. There's less risk with them. They don't have to worry about solidity and code.

Starting point is 00:13:30 They can just put dollars in a bank account and then make this claim that say, hey, we'll give you one of these if you give us a crypto dollar, blah, blah, blah. I totally agree. And guys, if you want to check out crypto dollars what they are in more long form content, check out our Jeremy Aller conversation. That was a few podcasts ago. Just looked that one up. Okay, this is probably the biggest news.

Starting point is 00:13:51 We're going to touch on it in the news. But let me just touch on the market piece. So here's the thing. Coinbase just dropped their S1 report. This is sort of the filing with the SEC that's public that they need to drop before they IPO before they go public. We'll get into that in a second because that's in the news section. But I just wanted to highlight this stat that came from it, David, which is probably the most bullish thing I've seen this month, maybe.

Starting point is 00:14:18 Maybe this year. So, well, this week anyway, I'll get at that. At least this week. And that's the Coinbase's volume, okay? And they segmented it in their S1 report. There's a fantastic graph here that shows you what it looks like. And the bottom line is right now in Q4, 2020, Coinbase estimated, that 36% of their volume was from retail.

Starting point is 00:14:45 So only 36% from retail. That means the rest is more from kind of institutions. That was totally different during the last bull run. In Q1 of 2018, the last bull cycle, it was 80% retail. Okay, now it's 36% retail. Before it was 80% retail. You can interpret this a few different ways. One interpretation is, oh my God, we're already here.

Starting point is 00:15:09 And retail hasn't even come yet. That's one interpretation. What do you make of this, David? Yeah, I'm reminded of in 2017, 2018, like the memes that were going around to convince people to not sell was like, quote unquote, the institutions are coming. And back in 2017, 2018, we were right. They were coming just three years later, right? Much further down the line.

Starting point is 00:15:31 But now the institutions are here, right? Like, this is clearly indicative of bigger, well-capitalized entities coming and just dominating exchange volume over retail. Yeah, I think retail beat institutions the first bull run. It feels like institutions have beat retail a little bit this bull run, at least for some of these assets, maybe not for defy type assets. But it also feels like we've got a lot of way to run from retail, like coming into this space. I'm sure we'll see some sort of retail frenzy before this is all over. David, you ready to get into the releases?

Starting point is 00:16:07 Yes, we absolutely. Let's get into releases. But first, we're going to take a moment to talk about some of these. fantastic sponsors that make this show possible. If you are looking for a product that connects your Fiat bank account with defy tokens and products, you need to download the Dharma mobile app. Dharma is a non-custodial smart contract wallet and comes with a bridge that connects you right into your bank account.

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Starting point is 00:18:21 Go to monolith.xyz now and sign up to get your monolith card. That's monolith. comyz. All right, guys, we are back getting to the releases on this last week of February rollup. David, we got to start here. Optimism. Tell us what optimism is and what they're doing. why this is a big deal. Yeah, optimism is favorable beliefs about the future, right? That's what

Starting point is 00:18:47 it means to be optimistic. But optimism is also a scaling platform on Ethereum using some sort of we call them optimistic roll-ups, right, and where you settle optimistically. And there's some nuances behind that. But this post is about, and the point is that everyone is really, really bullish on the optimistic roll-ups and how they're how they are constructed and everyone is optimistic about optimistic roll-ups. And what makes me optimistic about optimism is the crazy team that they are putting together. So they just put out this blog post called dope hires and more main net in March. So they go through just a number of just really strong players that they hired onto the optimistic team. And I also love the way that this article was written. You can feel the ethos just

Starting point is 00:19:36 exude out of the optimistic team. The optimism exuding out of the optimistic team. Some really strong players here. And really what this means is that optimism has really done, is really ready to take it to the next level, right, and really get this thing out the gate. Business developers are on the team, more coders and more more integration specialists. A lot of really cool things to come. I'm optimistic about optimism. I can tell, David. All right. So like the big takeaway from this, apart from their their new hires is that they are launching on mainnet in March. Now, originally they were planning to launch on Maynett and March in sort of a limited way

Starting point is 00:20:14 with just a few pilot projects. Now it looks like they're going to launch, like generally, be open to everyone. And what roll-ups, if you've been tuning into bankless so far, what roll-ups allow you to do is essentially copy all of the D-5 protocols we know in love on another chain. So these are fully Ethereum virtual. machine compatible. So if uniswap was to join this, synthetics is already on it. If uniswap was to join this, if YFI was to join this, if curve was to join this, we'd create a whole other roll-up chain

Starting point is 00:20:49 with all of our defy protocols, basically like a defy roll-up chain. So this is very timely given gas fees, very timely given the narratives in the space. And I think it's absolutely going to be a massive launch event and then story going into 2021 as all of these D5 money protocols kind of pick their various scaling solution. I think optimism is poised very well here. David, they also announced some additional investing. We had Chris Dixon on the podcast not too long ago. And Chris Dixon and his firm, Andresen Horowitz, so he sort of runs the crypto investing area at Adreason Horowitz. They are investing. They just announced that they are investing in the optimism team to how much money are we talking about here? Wow, part of a 25 million Series A investment in optimism.

Starting point is 00:21:43 So definitely some runway for that team and super excited about what's going to happen next. Yeah, yeah. And I think the other VC fund that doubled down already had a share of optimism was paradigm and they bought more. So paradigm, doubling down on their bags. Smart move. All right. We also have layer two coming from one of my favorite exchanges, decentralized exchanges, DYDX. Now, they're doing this with not optimistic roll-ups, but ZK roll-ups. But the net effect is similar in that they're going to be able to scale D-Y-D-X to new levels without using Ethereum mainnet block space. But it will be just as secure as the Ethereum main net. David, any takes on this news?

Starting point is 00:22:28 Yeah, I think this is going to be a theme in coming roll-ups is Project X, D-5 Protocol Y scales, goes on to L-2, optimistic roll-ups or Z-K roll-ups or something. So get used to it, I guess, is my takeaway. D-Y-D-X, one of the first. I expect, here's a prediction for you, Ryan. I'm just making this up right now. At least three projects will be on next week's weekly roll-ups on some sort of L-2. Wow. Okay. We'll see. I'll try to remember that, David. You know, one other thing I think that's important to realize is that there are different dimensions to scaling. Transactions per second is certainly one of them. But another one is how do we scale oracles? In our conversation this week with Hart from the UMA protocol, really impressed that upon me, David. It's like, so oracles, of course, are useful for everything in Ethereum that requires a price. And

Starting point is 00:23:25 assets all require a price. So the scalability of oracles is really essential for kind of the different assets and money primitives that we can create on Ethereum. Well, Chainlink has been one of the predominant Oracle type solutions. One challenge with Chainlink is it costs a whole lot in terms of gas. These are validators on Chainlink that are paying this gas, but it costs them a lot in block space, in gas, in fees to push these prices on chain. Well, ChainLink just released a new upgrade that is going to drastically reduce the cost, 10 times more efficient to put pricing on chain than it previously was. This is another dimension of scalability that I think is underreported, David,

Starting point is 00:24:17 but is just as important to what we're trying to do in Defi. Right. There's two ways to scale. We can produce more block space and we can do that with ZK rollups and other L2s. L2s is generally building out new places to have block space. And then they bundle that up and then put that on the main chain. That's one way to scale. The other way to scale is to just simply optimize and be more efficient with what we put onto the chain.

Starting point is 00:24:43 Right. And so Maker Dow, when they run their oracles, specifically Maker Dow's oracles cost $20,000 to $30,000 a day in gas alone. just to put prices on the chain so that the app can operate. There are optimizations that we could be doing here. And one of the strategies that Maker Dow is doing, and is exactly the same kind of pattern that the Chainlink is doing here, is they do a lot of their computation off-chain in a trustless manner, in a cryptographic manner,

Starting point is 00:25:12 and then they only publish the bare minimum on-chain, right? And so simply just doing less on the L-1 and optimizing what you do with the L-1 block space is going to be huge, especially for oracles, right? Oracle optimization is really, really important. And there's other like vectors as well aside from Oracle's like Coinbase uses like 20 to 30% of Ethereum block space simply because they're not well optimized. And so block space will become more available when heavy computation teams like Chainlink, MakerDAO, Coinbase, etc., figure out how to optimize and put more of that computation on, not on the L1. Yeah, David, I think every team is working for

Starting point is 00:25:49 toward optimization, we were talking to the Nifty Gateway co-founders. They said in their next release, they're going to reduce the minting cost of an NFT on chain by 99%. So it's awesome to see this sort of innovation and efficiency that these teams are bringing due in part to high gas prices. David, talk about this one. So Avey and Balancer are partnering in some way. What are they doing here? So if you guys are listening to this weekly roll up on Friday morning when this comes out, we are doing a live stream with Stani from Ave and Fernando of Balancer, moderated by Dan Elliser.

Starting point is 00:26:28 So something pretty unique on the bankless YouTube, it's going to be live streaming at 12 Pacific time. Definitely tune into that if you want to learn more about this. But basically what Ava is doing is using Balancer as its back end as its asset management platform to produce yield for its deposited assets, right? So balancer is kind of like uniswap, but instead of two tokens, it's many tokens. And so balancer and Ave are working together to make a balancer pool to generate liquidity for assets that are in AVE, but also generate yields. And so it'll actually be more lucrative to deposit assets into Avey because they're using balancer in their backend for liquidity and for yield. Pretty pretty cool. So tune into that live stream if you want to learn more. Yeah. The way I understood this is if you are a liquidity provider in a balancer pool, right?

Starting point is 00:27:14 you're not necessarily earning interest on those assets that are inside of the pool. And what this is going to do is essentially allow a portion of those assets inside of the pool to be earning interest in the AVE protocol. So super cool to see this kind of collaboration coming out. David, this is also awesome. We've been tracking this for a while. We've got all of these great NFTs, but how do you display them? This is Zapper coming out with a user interface enhancement.

Starting point is 00:27:43 Zapper is just a fantastic tool along with Zerion to see kind of your crypto assets, your crypto portfolio, and now Zapper is extending that to NFTs. So you could see your super rare art that you purchased, your NFT art inside of the Zapper platform, inside of that wallet. David, what's your take here? Yeah, there's so much to unpack here, right? So we got to start off with the conversation that NFTs are status tools, right? So crypto dollars, ether, Bitcoin, these are wealth.

Starting point is 00:28:13 tools, NFTs or status tools like the Mona Lisa is a status thing. Whoever owns the Mona Lisa, it's a big deal, right? Art is a status thing. It's a way to signal status. And one of the problems that NFTs has is that typically, if you buy an NFT, you can only view it on the one, the issuing platform, right? So if you bought it on Rarable, you've got to go to Raleable. If you bought it on Nifty Gateway, you got to go to Nifty Gateway. There are aggregators like OpenC that are helping with this, but this is exactly the same type of innovation that we're seeing out of Zapper, where you can see your assets, see the actual visual visual representations of your NFTs displayed here, along with the market value, right? And so not only can you include the value in your portfolio,

Starting point is 00:28:52 you can actually make it display, right? And so I kind of expect some sort of specialization when it comes to people's crypto wallets that, you know, maybe they hold their funds in one wallet, but their art in another wallet so that they can flash their art, right? Like show people what I, what I own, like all the NFT, all the cool NFTs that I bought without having to dox all their funds. I think innovation like that is definitely coming. And it's really cool to see Zapper being able to innovate on like both, both the value of NFT size and the display of NFT sides because what are NFTs if they don't have a visual

Starting point is 00:29:25 display of the art. Yeah, I can't wait to see all the social signaling type wallets that come out of, come out of crypto given the NFT, the NFT bull market here. David, let's talk about this. Alchemix is releasing something. Can you tell us what Alchemics is? Yeah, Alchimics is a new defy money Lego, right? Attempting to be relatively governance minimized, attempting to be protocolized. But the way that this works is that you deposit your crypto dollars. Right now, it starts starting off with dye, and then the die gets deposited into yearn to generate

Starting point is 00:30:00 yield and then Alchemics will mint you ALUSD or ALA stable coins. So you deposit stable coins and then you borrow stable coins. But the thing is, is that you don't actually, if you are patient, you don't actually have to pay back your debt. So typically with DefyP protocols, when you borrow, you have to pay an interest rate. But because Alchemics has yearn in the background, yearn, the interest that you get from depositing to yearn automatically pays back. the debt that you took when you borrowed ALUSD. And so if you are, if you are patient, you just get free money, be it from the interest rate. So you deposit $100 of die. You get to like withdraw 70 ALUSD, but you don't actually ever have to pay that back. And eventually you can

Starting point is 00:30:47 just go back to Alchmix and withdraw your die or mint more ALUSD. It's a, it's a system that auto repays your loan for you because it's generating yield in the background. So it's pretty cool. That's super cool. I think what the macro story here is, is this is now we're seeing like, I don't know, third, fourth, fifth layer money legos. Because this whole thing, Alchemics is built on top of wiren, which is built on top of all sorts of other lending and borrowing protocols, which is built off, you know, on top of stable coins, which is built on top of Ethereum. So we've got like, this is why we call it money logos, because we have these sort of stacking type effects. And you can, you can create things on top of other things now.

Starting point is 00:31:31 Now we're seeing things being created on top of a yield aggregator itself on top of Yerrne. So that's pretty wild. Yeah. I said that the Alchemics protocol was governance minimized. I actually got that confused with something else. It's not, it's not intempting to be a governance minimized platform,

Starting point is 00:31:45 but everything else I said was true. Okay. Thanks for clarifying, David. David, lattice is doing some cool things. You just did an unboxing. They've got some lattices back in stock. You want to give us a sneak peek of this? Yeah, yeah. So I did my first unboxing video. I'm not good at that, by the way. I realized somebody made in the comments like it took me, it took them like four or five minutes to figure out what I was actually unboxing. I kind of forgot to tell them that it was a hardware wallet. Yeah. So I did an unboxing for a lattice one from Grid Plus. So if you want to know and get more intimate details as to what that's all about, go check that out. I do, I go through the whole setup process. So you can see what that's like. And then I kind of give my thoughts that's like what the, who the product is.

Starting point is 00:32:28 is for if it's really into into you or if it's really a good product for you or not the metaphor that I came out with while I was making that video Ryan is this a landline hardware wallet kind of is this the metaphor I'm working with because it needs to be connected to Wi-Fi so it needs to be in your home right and so you must somebody if you want to make a transaction somebody must be local to the unit right by definition and that unit is in your own home and so the lattice one adopts the security of your home, which is pretty cool. Pretty cool. Well, guys, this is worth it just to see David peel off this look of glee as he peels

Starting point is 00:33:06 off the plastic from his lattice display. It's just worth it just for that. David, let's end on this on releases. This is actually like a future release. Tim Beko put together a GitHub proposal for EIP 1559, the much-awaited EIP, maybe the most weighted EIP in Ethereum's history. And he proposed that it be included in the London ETH hard fork. So if I'm not mistaken, we have a date now for the next ETH Hard Fork, Ethereum Hard Fork, which is in April, and that's going to be called Berlin. And EIP 1559 would not be

Starting point is 00:33:43 in that April hard fork. It would be in the one after, which is estimated to be sometime in the summer, like June, July, August, that time, that kind of time frame. And if all of this happens and if this proposal is accepted, that would mean we would get EIP 1559 this summer. Yeah, I remember earlier predictions. And I think even on the Bullcase for Ethereum podcast with D.C. Eric and Anthony that we actually perhaps didn't even think about EIP 1559 coming into Q4 or even Q1 of 2022. The fact that Tim, Tim Beko, who, by the way, has the most information about EIP-1559, period, he knows the most, he knows, he runs the whole show. Like, he's, he's the organizer behind it.

Starting point is 00:34:30 He's making a proposal to get it included into the London hard fork. So this is a proposal for inclusion is what you would need to see to get EIP-1559 included. This is the first step. So this proposal will be reviewed. and then the ETH1 core developers will analyze whether this is ready for inclusion or not. And if there is consensus among core developers, it shall be included in the London update, which again, theoretically slated for it this summer. So we're on the way.

Starting point is 00:35:00 We're on the way. Absolutely. I mean, it could take longer than this summer. Sometimes hard forks have a tendency to be delayed. But this is overall good news. It means Tim thinks this EIP is in a place where it can be proposed and included. huge. All right, David, let's get to the news. Fedwire went down. Here it never goes down, but Fedwire did. What is Fed Wire and what chaos did this bring with it? Right. So Fedwire is how

Starting point is 00:35:29 the Fed transfers balances between banks, right? The U.S. dollar asset transfer mechanism between commercial banks and other banks, right? And it broke, apparently. So centralized systems are fragile. can go down because they're not redundant. And I kind of forgot that the Fedwire could even go down. Like it's not really something you think about. Yeah. Like your money system isn't supposed to break, right? It's supposed to just work. But, you know, at the end of the day, centralized systems are fragile. Centralized systems go down like whoopsie daisies. And actually, I think that's even got reported by the Gemini twins when they had to make an announcement or some sort of release saying like, hey, like, deposits in and out of our exchange, like are being paused because this.

Starting point is 00:36:13 Fedwire thing is broken. So sorry about that. Not our fault. It's the Fed's fault. Crazy. Absolutely crazy that like the dollar just has downtime. Like that's nuts. Yeah. I mean, this paralyzed a whole bunch of banks for a few hours. And it makes you think about like cyber security attacks. What would that be like? It makes you think about like, you know, somebody somewhere has a button they can press and power this whole thing down. A lot of centralization underlying the traditional banking systems of today. David, let's get back to what I think is probably the biggest news item. We teased it a little bit when we were talking about the market,

Starting point is 00:36:50 and that is Coinbase's S-1 filing. It's notes, basically, the things it's publicly disclosing before it's about to IPO. I've got a few gleanings from this. Maybe you could add yours too. The first is 43 million verified. users. That is like, that's massive, right? 43 million, 2.8 million monthly transacting users. They are just crushing it in terms of revenue. 2020 revenue was a 2x from 2019 revenue. There's a lot more here. But what were some of your takeaways? Yeah, it's just really cool to

Starting point is 00:37:32 be able to access this information. I know a lot of data geeks like Nick Carter were really waiting for Coinbase to file this so that they could poke around. And so we are getting some early digestion from people like Larry Sirmak, who works at the block. It's his job job to digest information. So I think this is just the first of many big takeaways that we're going to get out of this Coinbase filing. And really what this is indicative is that, you know, Coinbase is not really a well-optimized company, kind of burning a lot of money, but they're making so much money. It doesn't even matter. And I think this is just going to indicate to the rest of the financial world that there is so much money to be made in crypto selling shovels. You don't even

Starting point is 00:38:10 have to believe in Bitcoin. You don't even have to believe in crypto or the bankless vision. You just have to know that there's money to be made selling shovels here. And a lot of people are going to want to get in on that. Coinbase has 90 billion in assets on their platform, David. And they're getting ready to IPO at a market cap of 100 billion in valuation. Like if I'm a traditional bank at this point, right, I'm starting to get worried. I'm starting to sweat because it's it's not just like maybe defy is not on my radar at all, but like Coinbase is on my radar. You know how we were just saying that, you know, the any of the assets that many people

Starting point is 00:38:50 in crypto sell will actually stay in crypto dollars this cycle. Well, who really owns crypto dollars? It's these crypto banks like Coinbase and Gemini. Like they totally own that. They like my Gemini account, my, my, Coinbase account is so much more useful to me even than my Wells Fargo account because it has this bridge into the world of defy and it's also just very useful on its own. So if I'm a traditional bank, I'm starting to sweat a little bit. These guys are coming and they're about to eat my lunch.

Starting point is 00:39:23 And I wonder what some of the meetings are like on these executive teams if they're kind of seeing it. If JP Morgan is seeing it, if Bank of America is seeing it, if they're worried at all about what's happening here. Ryan, earlier in this episode, we talked about what we're going to do when we decide that this bull market is close to being over and we sell into crypto dollars. Well, if we do ever want to get our, because we are bankless natives, like we live with our financial monies in Ethereum, like in our own wallets, but if we ever do want to bring that cash back into the world where kind of the rest of people are, like if we ever want

Starting point is 00:40:00 to improve our local environment, if I want to buy a really expensive plant, I'm going to have to go through the crypto banks. And that's not Wells Fargo. That's not, you know, Bank of America. That's Coinbase and Gemini. And if Gemini is rolling out a credit card. Well, yeah, let me ask you this. And so what financial products are left for people like you and me from the legacy banks. This is what I mean. This is what I mean. So, David, you have your Ethereum account, which is like your bankless bank account basically and all of the Ethereum addresses that you have, right? What would it take for you just to deliver? basically on your Ethereum accounts and then also a Gemini account and completely shut down

Starting point is 00:40:39 your traditional Wells Fargo account or whatever bank that you use. Like what would it take? Wouldn't it just take, my God, Gemini has a credit card and then like you can pay all of your bills and then why do you need your Wells Fargo account? Right, right. Like only to receive payments from other people that are not bankless. And then I can transfer it over to crypto anyways. Exactly. And even then, you know, it seems to me that somebody, could build a very easy bridge so that you could receive funds in Gemini or Coinbase. I don't think these banks know that the writing is on the wall for them, but it is on, the writing is on the wall for them for sure. All right, tell me about Nyan Cat. I was embarrassed.

Starting point is 00:41:20 When we went over the notes, dude, like I've seen this all over the place, like this meme, this cat with a rainbow, but I didn't know what it was. What is it and what's happening here? Yeah, Nyingcat is like embedded into the internet. It's. at this point. It's like one of the OG viral internet memes that turned boomers in for a tizzy about like, what the hell is this thing? Like, why do people care? It's just this animated pop-tart looking cat with rainbow coming out. It's like going through space. Like it just went through the internet like back years ago. I don't even know what one in no way. It's probably, it could have been like early 2000s, right? Grand meme before crypto was even a thing.

Starting point is 00:42:01 And the original artist sold it, sold an N&T version of it for 300, ETH, which is almost half a million dollars. And I think what's really interesting about this, Ryan, is that the original artist remastered the GIF as in he probably just started over from scratch, right? He probably just made it again and just made a brand new gift and then sold that GIF that he made fresh new for 300 Eath, right? But the, and the point is there is that it wasn't the original GIF, Because at this point, where is the original gift?

Starting point is 00:42:32 He probably lost it because it's on the internet. It's just like on the internet. The point is that the original artist made a new gift that was the same as the old gift, but the original artist sold it for 300 ETH. It's not about the gift. It's about the legitimacy of the original artist being able to make that NFT. If I went and made a NionCat NFT, I hope people would slap me around and be like, no, you don't have the right. Well, you could.

Starting point is 00:42:59 And you could. And you could, David, right? You could just take that gift from anywhere and listed on rarable or nifty gateway or somewhere else. But like that doesn't give it the value is what you're saying. Exactly. The value lies in the hands of the artist. And the artist himself was the mentor of this NFT, which means that the artist himself has the rights to sell this NFT. Is it not about the art?

Starting point is 00:43:21 It's about the legitimacy. That's so interesting, right? Because what people are buying at the end of the day is authenticity. And without that authenticity, they don't get the social status, the signal boost that they're really looking for from these NFTs. You know, I wouldn't have always believed this was the case. I think, like, even as recent as six months ago, you and I were trying to figure out NFTs and, like, is anybody really going to pay for a JPEG or a GIF? And now it makes so much. The answer is yes, because they're not just paying for the digital imprint.

Starting point is 00:43:56 they're paying for the authenticity. And you can't disagree with the market. The market is saying that people want NFTs and they pay a lot for them. 300, ETH, man. That's crazy. Super crazy. All right. South Korea banning privacy coins from crypto banks.

Starting point is 00:44:13 I guess my quick question to you here, David, is, is this just the beginning of more of these bans? So they're banning privacy coins like Zcash and Monero. Do you think that's going to be like the future? future, one of the final bosses we have to deal with? Yeah, privacy coins are going to be a much more difficult subject than Bitcoin and Ethereum, simply because of their nature. I kind of think it's not that big of a deal just because privacy coins don't have that

Starting point is 00:44:45 large of a market cap. And really, the story is store of value, right? Not privacy. We know from chain link that less than 1% of crypto activity is crime. And so the value of privacy coins just aren't that big of a deal. And I think nation states just see the promise of the narrative behind privacy coins. And then they get scared. But they don't look at the fundamentals.

Starting point is 00:45:07 They don't really look at are people really using these things? And they also don't understand that, at least my theory, is that privacy is an application, not an asset, which means that there should be applications on Ethereum that let you make your die private or make your ETH private. That seems to be where I think the long term trends toward privacy will go. It's interesting to watch nation states try and control things, though. I think that is really the through line of this story. Do you know what's interesting is the question of if Bitcoin or Ethereum had privacy on its base layer, just like baked in.

Starting point is 00:45:43 And we had the technology to make every transaction private from the get-go. Because you know the people behind this movement would have if they could. But the technology just wasn't there. of pseudo-anonymous addresses rather than completely anonymous addresses. But if we had done that, if it was baked in, do you think that nation states would have been much more hostile to these assets and these networks from the very beginning? I think it's very possible. Like, I think it's possible that not having privacy baked into the base layer was actually a blessing because it meant that the nation-scape states weren't afraid of these these crypto networks from the

Starting point is 00:46:28 beginning and didn't try to strangle them in the crib, as it were. What do you think of that take? Yeah, I think it's possible. I think privacy at the base layer is a problem for other reasons, though, because privacy at the base layer reduces the auditability of these systems, right? And so it's easier to audit Bitcoin and it is Minero. It's possible to audit the supply of Minero. That's a myth that people thinking that like you can't actually audit the supply man arrow.

Starting point is 00:46:53 That's actually a myth. You totally can. But the point is of the ease of said activity and the ease of auditing the supply of ether. Transparency, again, like transparency, in my opinion, is an app, not an asset. David, we mentioned this last week, but Alpha Hamora had a hack. Alpha Hamora and Cream. There was an exploit, massive amount of funds were stolen. One of the larger defy hacks.

Starting point is 00:47:18 What's interesting. Was it that big? I thought it was $11 million. No, I think it was like, it was closer to $40 million as if I'm recall correctly. So, you know, pretty large one. But what's interesting about this is this week, they just announced a fund repayment program. So they are going to make anyone who lost assets in that exploit, they're going to make them whole. And the way they're going to be doing this is partially through the value of their tokens, which is interesting. to me, David, because as we've seen in exploits in the past in Defi, what inevitably ends up

Starting point is 00:47:54 happening is token governance votes and decides to make any of those users who lost funds whole. We saw it in the BZX hack. We've seen it in other hacks. And I feel like at some level, what we've just reinvented is kind of equity, right? So if there is some major event, an issue in a publicly traded company, like shareholders take the brunt of it. They get diluted rather than sort of debt holders or users of the platform. And that seems to be the case here, which also implies that the value of a token underlying a protocol can act as a sort of insurance or as a backstop against these exploits. All of these things are

Starting point is 00:48:36 very interesting to me. Do you have any takes? Yeah, the alpha token has not, it's got taken a hit as you would expect any sort of protocol to do if they got hacks. People get scared. People flee. People sell. And so you're totally right. And this is actually much more formalized in the MakerDAO system where MKR is not a theoretical backstop.

Starting point is 00:48:57 It is the backstop. And it's in the protocol that it will get minted in case the system becomes insolvent. And so it's interesting to see newer D5 systems to kind of take a more informal approach to that. But I do, I think it's relieving to see that DFI protocol. find ways to make people whole again if something goes wrong. It's kind of the benefit of some of these defy protocols not being actually defy, quote unquote, is they're not actually decentralized.

Starting point is 00:49:26 They're nice money Legos, but the team is centralized. And in the young genesis of these systems, like human control over these systems is kind of nice, right? And like we can actually repair holes as they come about. Right. Repair holes via governance vote. David, let's take these two news items. as one. So Michael Saylor, Microsstrategy, just bought another $1 billion in Bitcoin. So that's big

Starting point is 00:49:50 in and of itself. But Square released some information. So Square, the payments company, that they also have $170 million worth of Bitcoin on their balance sheet. What is these two stories, these two headlines signaling to us? You know, I'm not actually 100% convinced that the Michael Saylor buys $1 billion of Bitcoin is actually different from the last story. that we reported on the weekly roll-up. They're all starting to blur together. I just in the habit. I think he bought another billion dollars.

Starting point is 00:50:21 They're all blurring together. But then also Square, which already had $50 billion, billion? Yeah. No, $50 million of Bitcoin purchased on the balance sheet. They bought another $170 million. And this was released in their quarterly report.

Starting point is 00:50:37 And then also very strong revenue numbers out of square from their cash apps, which is how a lot of people, but make their Bitcoin purchases. So in the same vein as like Coinbase signaling to the rest of the world, but Bitcoin and Bitcoin services are extremely lucrative. Square is following up on that just as strongly. Yeah, absolutely.

Starting point is 00:50:56 All right, David, there was some Tether news this week with the New York Attorney General. If people remember that, New York Attorney General was taking Tether and Bitfinex to task for the, I guess, the backing of their stable coin. What happened here? Yeah, so there has been this apparently two year long probe into Tether to just understand what is real and what's not real behind Tether. And so they discovered that there was just some inconsistencies with their banking and what they reported and their public facing statements, right? And so I actually haven't really gotten to the bottom of this story. I haven't figured I may have been able to measure the severity of this.

Starting point is 00:51:38 But like my biggest takeaway is that banking for Tether is a huge. issue because they're kind of legally gray, legally dubious. They're offshore. And so like, Tether really has to kind of make do with what it's got and kind of get creative with his banking layer so that it can facilitate its Tether printing and redeeming. Right. And so what that means is that there's different funds and different bank accounts. Some are totally controlled by Tether. Some are controlled by Tether's lawyers. Some aren't. There's just kind of this hodgepodge patchwork solutions that Tether has made. And because of their nature, because they're kind of dubious. And so, and then there's also Tether trying to make very strong PR moves to make sure that

Starting point is 00:52:19 people that use Tether feel secure about using Tether. So there's a discrepancy between their alignment of their banks and the minting of Tether. And so they got hit with an $18.5 million fine. And like I don't know how malicious or irresponsible Tether was being. But the market seems to be relatively okay with it. Like perhaps. Perhaps this was one of the reasons why Bitcoin dumped, but I kind of think Bitcoin is going to dump anyways. I'm not totally on top of this story. There's a number of different threads to go on. Yeah, it's interesting. I do believe in the report. It was evident that Tether was not always backed one to one in dollars in a bank account somewhere. And Tether will tell you that's because,

Starting point is 00:53:01 hey, we couldn't get a bank account. And the prosecution would say, well, no, it's because, you know, you were making money in other ways on on the, those dollars and you're benefiting from not having them fully one-to-one backed. Regardless, the problem with all of this, of course, is that it kind of breaks the crypto mantra of like, it's not don't be evil, it can't be evil, right? If on chain with die, for instance, we see all of the assets that are backing the die stable coin. We don't see that with tether.

Starting point is 00:53:33 It's kind of in these dark bank accounts somewhere. But the other takeaway for me, David, was that $20 million fine. You know what that is? it's a slap on the wrist. Like, it's nothing. It reminds me of EOS. They print that every day. They print, like, who cares?

Starting point is 00:53:47 Yeah, 20 million. I mean, like, with EOS, when the SEC found that they had listed and sold an unregistered security, it was a similar slap on the wrist, like $30 million. What's interesting about all of this is it seems to be the case. If you have enough money, you don't have to worry about regulation. Anyway, you're just going to get kind of a slap on the wrist out of this. So I'm not sure what lessons are being taken away from the crypto industry, writ large, if any. But the lesson I'm getting is, man, open, transparent, decentralized protocols is the way we need to build this space.

Starting point is 00:54:23 So we're not building on rotten foundation. David, Brave Wallet, which is a browser that I use. Actually, Brave the browser, they are releasing a crypto wallet, maybe sort of a MetaMass type competitor. And also a Dex aggregator. what this really signals to me is that they are doubling down in crypto. It's interesting to me because they have about 25 million monthly active users now. So it's no longer a small niche browser. They're kind of getting up there into the millions in terms of users. What do you make of this? Yeah. So crypto is internet native finance and you access the internet through the browser.

Starting point is 00:55:02 So this kind of just makes sense. Like Brave already had their native Brave browser wallet. and now they are integrating the native brave browser decks aggregator. We also saw MetaMask do this. MetaMask also has a Dex aggregator built in as well. So just more innovation being pushed out in every single corner of the internet. I love MetaMask, but I would definitely love to see some browser competition to Metamask, to push Metamask into building the best version of itself. So hopefully that comes to pass.

Starting point is 00:55:35 David, that has been the news. Should we get to takes? Let's get to takes. Absolutely. Wait, no. So rare. Click that. Click that link.

Starting point is 00:55:44 Yeah, that one. So this is NBA Topshop, but for soccer or what the international listeners might call football. So this is really big. This is, I think, officially, yeah, officially licensed. Yeah. So football clubs of Europe and around the world are on board with this. And football, soccer, is a lot bigger than literally every other sport.

Starting point is 00:56:07 And so NFTs into the mainstream in another way. Here we go. These guys have been out for a little while, but they just announced a pretty massive raise again. So pretty impressive. These are getting funded. Of course, that comes on top of top shots,

Starting point is 00:56:21 which raised an evaluation of multiple billions, I believe. Yeah, two and a million. Man. So NFTs aren't just heating up in terms of sales and interest. They're definitely heating up in terms of investment as well. Okay, now let's get to the takes. Now, can we start with your friend?

Starting point is 00:56:37 Michael, Michael Burry. My BFF. Yeah, your friend. So you've talked about him before when we had that GameStop rant. Who is Michael Burry? And what is he talking about these days? Yeah, Michael Burry is the character depicted in that movie, The Big Short. He's the hedge fund manager who shorts the market before anyone else does,

Starting point is 00:56:57 perhaps arguably a little bit too early, but you never really know. And then he was also the guy that publicized that he was long GameStop before GameStop blew up. And so now Michael Burry is saying that inflation is coming. And this has been the Bitcoin or thesis. This is the dollar is trash thesis. He thinks that inflation is coming. And I think that's totally, I've been dabbling in this thought process myself for a while. And if Michael Burry says it, more and more people will believe it to be true,

Starting point is 00:57:26 which actually kind of in the way money works, might actually cause the inflation itself. It's kind of a meme. But then also, we also saw this is not on this page. We also saw Michael Burry publicly tweet about NFTs. He deleted that tweet, which is kind of sad. But Michael Burry, paying attention to the macro world and protocols and Bitcoin and stuff of this nature. It's interesting because he's got some narrative steam behind him.

Starting point is 00:57:49 I mean, he was right in 2008 in the biggest way. And because of the big short movie, everyone knows he was right. And then more recently, he was right during the GameStop stock. He was right on kind of the price of that. and the hedge fund manager shenanigans. So the question is, does he have the narrative power to make this sort of reflexive? And, you know, that's definitely interesting. But he's also says that governments might squash Bitcoin and gold in an effort to protect

Starting point is 00:58:20 their currency. So he's just mapping this out. And he's saying, hey, if fiat currencies do start to hyperinflate, then world governments are going to start taking an aggressive posture on them. That was a take that Ben Hunt had as well. What do you think of that? Yeah, yeah, this is definitely something to keep an eye on. He drew a connection between hyperinflation in 1920s in Germany to where we are today.

Starting point is 00:58:47 And hyperinflation or a very inflating currency goes hand in hand with very strong authoritarian governments. So the connection is there to be made. Yeah. We will see. Okay, David, can we talk about this tweet? So this was from, or maybe let's just talk about this story. What this is a room. What I'm looking at is a room in Clubhouse, right?

Starting point is 00:59:12 Clubhouse room. So what's going, maybe people need to understand what Clubhouse is. Explain that and then why this is relevant. Yeah, Clubhouse is a new socialization app. They brand it as I drop in chat rooms. So there are permissionless chat rooms. anyone can join them. And then in each room, there will be a certain set of moderators who can elevate people to

Starting point is 00:59:34 like the speaking side. And so there's listeners and there's speakers. And this, this clubhouse club, which is called the culture club. And they have apparently a number of these sessions. And importantly, it's specifically artists and creators, not crypto people. But a lot of artists and creators are getting into crypto. And so this particular meeting of this culture. club, clubhouse room, was talking about NFTs and it's titled legitimating

Starting point is 01:00:03 legitimizing NFTs in the art world. And in this clubhouse club, in the meeting, this was last night, Wednesday night when I was listening to this and a bunch of other crypto people were in this room as well. There was Beeple there. There was Bobby, I don't know his last name, but Bobby the creator of the hundreds brand. There was also Grimes, the artist Grimes, also Elon Musk's wife, if people aren't familiar with her music. And she's releasing some NFTs this week. And she's releasing some NFTs. Right. And there were four and a half thousand people in this room. And when I got, I got into this room a couple of minutes after it started. And I wanted to talk because I can talk about NFTs and kind of a public

Starting point is 01:00:45 figure in the crypto space. And I raised my hand so they could perhaps invite me into the room. They didn't because they don't know who I am because they're not crypto people. This is the point. I'm a no one to them because they are not crypto people. They are, artists. And this was a room full of artists, a huge artists, Beeple Grimes, etc. Then they weren't, they weren't there to shill their eath bags like I was. They weren't there to chill NFTs. They were there talking about what they called a pivotal inflection point in history. And this is the quote that Jake Berman, who is a crypto person, put on his tweet. And this is what they said in this room. We are at a pivotal inflection point in history, specifically artist's

Starting point is 01:01:25 history. They don't care about Ethereum. They don't care about DFI. They care about being able to culturally and creatively express themselves and they are seeing NFTs as the vehicle to do that. And this is so cool because like when I shill NFTs or Ryan, when you show NFTs, kind of comes with the bias that we are also by in proxy shilling Ethereum, something that we believe in. These people don't have that bias. They are just here for the art. Yet they are shilling NFTs because they see it as the next big thing. Wow. So cool. Man, what this says to me is, that NFTs have really hit escape philosophy because it's expanded way outside of the original crypto culture and now it's kind of invaded other cultures and these other communities and cultures

Starting point is 01:02:09 are building on top without even knowing that we exist without even knowing that like kind of crypto culture and bank lists and all of these things exist that is pretty powerful. What about this? I think this is a quote that you tweeted out too and did that this come maybe from Clubhouse? He said we are recapturing the emotional value. that platforms have robbed from us over the last decade. It sounds like a quote from one of those creators in that clubhouse meeting. Is that where you got this? Yeah, that's exactly right.

Starting point is 01:02:37 Somebody was talking about what has been robbed from them, the emotional energy that has been robbed from them from these Web2 platforms, Instagram, Google, Facebook, all of these platforms that there are creators on. They say that these Web2 platforms have robbed them of their creative energy because they are intermediaries, because they are extractive. And so these creators are identifying the fact that these NFTs are a direct cultural expression vehicle and a fan connection medium. They're identifying that really early in an NFT history.

Starting point is 01:03:11 It's almost like self-sovereign creation. You know how we talk about self-sovereign money? Well, these creators, they want to be sovereign over the creation that they make. And right now in Web2.0, they're going through intermediaries at every stage. They're going through an art gallery in the physical world or they're going through something like Spotify where they get sense on a song. And now they've got this new canvas, this new space to play, this new kind of economy where they can go directly to their fan base. That's what they're seeing here. That's exactly right.

Starting point is 01:03:45 And it's so awesome. It's very validating that non-Etherian people are spinning the same narrative that we have in their respective camps. I love that. Super cool. All right, let's talk about this. This is Chris Berninski. One of our favorites, he just goes through the math. Here's what an 80% drawdown looks like. So if ETH hit all-time high, of 10K this cycle and there was an 80% drawdown, what would that be? 2K. If Bitcoin hits 300k this cycle and retraces down to 60K after an 80% drawdown. And his takeaway is, there's a chance that what you're buying at these current prices you're buying is actually the bottom

Starting point is 01:04:26 of the next bear. So Chris has just thrown out some math and he's just extrapolating what's happened three times in the past. This is now the fourth time. It might be happening. He's just extrapolating the math and in talking about how young we are in this in this bull market cycle. Yeah. And this is some basic napkin math, but I honestly think kind of crypto does better with napkin math rather than any sort of like more robust calculations. Let's just do some like Occam's Razor calculations and that's what Chris is doing. I believe it. Perhaps 10K is not the top for ether though, question mark.

Starting point is 01:05:05 Maybe I'm going to have bull market goggles on. I don't know. Well, in December, right, we had that bull market podcast and it was interesting the range. We had Eric Connor who predicted top of the bull run might be $2,500. And then we had DC investor who came in at 20K. at his top prediction. And then Anthony Sassano is right in the middle at 10K. I feel like that's the range.

Starting point is 01:05:27 And 3500 is definitely on the low side here. But we could well pass 10K if this bull run gets really heated hot. We all, we made those predictions back in December when things were a bit more sober. So I tend to trust them more, David. That's a good point. It's important to remember to not become more bullish just because prices are going up. That's not a reason to be bullish. Exactly. All right. We'll talk about this reason to be bullish. This is you on Twitter. Ethereum will produce more jobs over the next decade than the top 10 companies in the S&P 500 combined. Do you know what this says to me more jobs, right? When you say more jobs, you start talking about a new economy that's being created. Is that what you're talking about, this new economy that's actually going to employ people like creators, like those, yeah, the creators making those NFTs in Clubhouse.

Starting point is 01:06:20 That's what you're talking about, right? Yeah, and not only that, but defy protocol treasuries have millions and millions, hundreds of millions of dollars. I know for a fact, sushi has like $200 million in their treasury, and that's just one protocol, right? Every single defy protocol has a treasury, and they need laborers and workers to work for them. And so that's one like employment vehicle.

Starting point is 01:06:45 The other employment vehicle is exactly what you said, where NFTs offer creators a way to monetize, their own labor, which is also huge, which means that they don't need bosses, right? And one of the cool things about the jobs that I expect Ethereum to create are jobs without bosses, are jobs without strict organizational hierarchies, right? They're just paying you, you put in $10 a labor, here's $10, right? Maybe you have to do health benefits on the side, insurance, whatever, but the point is, like, Ethereum is this massively employing structure that isn't just allowing people to generate a livelihood for themselves over and over.

Starting point is 01:07:20 and over again in so many different ways. We talk about how much surface area Ethereum has. That's also employment surface area. That's also job creation service area. It's going to be massive. You know, it kind of reminds me of the gig economy, where we all became gig economy workers for, you know, driving Uber cars and, you know, delivering food and all of these things.

Starting point is 01:07:42 But the problem of the gig economy is still centrally controlled, centralized. And, you know, Uber is always going to take its cut, right? This is like gig economy, only it's self-sovereign gig economy, where you're working for yourself, you're also working for these protocols, and you're creating. But it's not structured like a nine to five job. I think that's a huge takeaway for people. One of the benefits, I think, of going bankless is you start to discover how the new economy is going to work, and it's not going to work with nine to five jobs, and here's your paycheck,

Starting point is 01:08:19 and here's your health benefits. The new economy is going to work in these digital cultural ecosystems, and there's tremendous opportunities there, but you have to figure out how it works, right? You can't just go down the path that society has laid out for you, which is like, yeah, you go to school, you get to high school, and then you go to college, and then you expect that nine to five job, and you could buy a house, right?

Starting point is 01:08:43 That hasn't worked for so many millennials. I don't think it's going to work for us now, and like we have to be smarter, and we have to discover this new country, this new economy in the early stages so we can maximize the opportunity. Yeah, that's exactly right. And if people don't think that they can find a job in Ethereum, I think you're being a pessimist.

Starting point is 01:09:05 The way I got started in crypto is I was working at a physical therapy. I was working as a physical therapy aid. And then I would go back home and I would, this is in the middle of the 2017-2018 mania. And then I would go home and just learn. And at some point, instead of going home and learning, I started going home and writing, right? I just started producing. And I didn't do it because anyone paid me. Why would they have paid me?

Starting point is 01:09:29 I hadn't created anything yet. But I just started writing. And like my first blog post got included in like the week in Ethereum from Evan Van Ness. And I was over the moon. I was like, wow, this is so awesome. I got included in the week in Ethereum. And it's just snowballed from there. I just kept on writing.

Starting point is 01:09:43 And then one day like medium de-platformed me, quote unquote, I think, think I just triggered like their bots or something. But then I made this tweet that was like, Medium deplatform of me, like decentralization. It turns out it was just a glitch. But then Ryan, that's when you said that, you know, David's writing is really valuable to me. Like, what the fuck medium?

Starting point is 01:10:02 Like, why did you do that? I ended up getting my medium back. It didn't really matter. But the point is, like, that's when I discovered that people actually cared about what I wrote. And then that turned into a job at this, this ICO agency back in 2017 and then a security token agency and then realty and then bankless, right? it's all just rolled into jobs and jobs and jobs because I just started producing.

Starting point is 01:10:22 And if you don't think that that can happen to you, think again, like people are looking to pay people in crypto for their labor. And if you want to get a job, all you have to do is try. Like, it can be done. I totally agree. Yeah. You know, the thing, the thing about that story, too, is David, is you're not a developer. You're not a coder. This is a technical space.

Starting point is 01:10:43 Zero coding skills. and like you've done so well to kind of create your opportunity here. There's so much more than coding that needs to be done here. Community management, media, these are all areas you can tap into. The thing to do is start getting plugged into these communities and figure out where your niche is. I mean, your niche was fantastic. It was like writing, expressing these ideas and creating these mental models. And it turns out that's super valuable for people.

Starting point is 01:11:10 Really cool story. Thanks, ma'am. So, hey, social, there are plenty of, actually, I would say, I mean, I mean, developers are extremely highly paid, but like people that work on the social layer are also, people don't know they need those people, but those people are really, really important. Do you know what? I'm not going to say they're more important. They're equally important.

Starting point is 01:11:29 Like, the social layer is so important in crypto. It's so important. And it's equally as important as what we write in code. Yep, 100%. David, you know what? I have another take here, but I don't think we have time for it because it's kind of a longer take. Maybe we'll just refer to it in the show notes. Well, it was a take that you had in the bank list Discord.

Starting point is 01:11:48 So premium bank list of members definitely saw that take. Yeah, it's just like we just heard your story, David, which is cool. I have kind of a personal story about I used to be in the validator business. I used to run a validator in the Cosmos ecosystem and some other delegated proof of stake ecosystems. And this is kind of a story of why I exited that essentially. And the TLDR was my experience as a Cosmos validator left me. more jaded on these delegated proof of stake systems, of which Binance chain is one, which is why I was making this contrast.

Starting point is 01:12:23 And it made me more bullish on Ethereum. Anyway, my full take is, we'll include it as a link in the show notes. I tweet this out, and it's also in the bankless discord. David, before we get to what we're excited about, we should take a minute to tell the listeners about our fantastic sponsors who made this episode possible. Alve is a borrowing and lending protocol on Ethereum. and just recently released AVE version 2, which has a ton of cool new features that makes using AVE even more powerful. With AVE, you can leverage the full power of defy money Legos, yield, and composability all in one application.

Starting point is 01:13:00 On Avey, there are a ton of assets that you can deposit in order to gain yield, and all of those same assets can also be borrowed from the protocol if you have deposited collateral. Here you can see me getting a 200 USDC loan against my portfolio, of a number of different defy tokens and ETH. I'll choose a variable interest rate because it's a lower rate than the stable interest rate option, but I could choose the stable interest rate option if I wanted to lock that interest rate in permanently. One of AVE's V2 features is the ability to swap collateral without having to withdraw your assets, trade them on Uniswap and then deposit them back into Avey.

Starting point is 01:13:36 Avey does all of this for you all in one seamless transaction, so you don't have to repay loans in order to change the collateral you have backing them. Check out the power of AVE at AVE.com. That's A-A-A-V-E.com. Guys, we've entered a bull market. Now is the time to start building your crypto empire, and you should do it on Gemini. You already know Gemini is the world's most trusted crypto exchange, but now you can do even more than trade. You can earn.

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Starting point is 01:14:25 It gives you rewards and hard money crypto assets, not something inflationary like airline miles or hotel points, gives you up to 3% cash back in crypto. The card is coming in Q2, but you should get on the waiting list right now and we'll include a link. See what I mean? This is more than just trading.

Starting point is 01:14:42 Gemini is your bridge to crypto for the bull market. Open a free account in less than three minutes at jemini.com slash go bankless. Get $15 in Bitcoin after you trade your first $100. That's jemini.com slash go bankless. All right, guys, we are back. David, let's start here. What are you excited about? Yeah, keeping the conversation going about Ethereum, the employer, and NFTs expressing creativity.

Starting point is 01:15:08 What I'm really excited about, and maybe this isn't excited, but this is more about what's on my mind. I recently watched this movie called Nomad Land, which was the, it was a story that followed this lady after the 08 crisis as she was kind of just a nomad living in a van, just hopping from state to state trying to find work. And it was a sad movie. It was a depressing movie. It wasn't a feel-good movie. It was about the struggles of people's lives after they lost their jobs and their homes. They were forced to live in a van and travel around America trying to find work. We're very, very reminiscent of the Great Depression, right? traveling trying to find work. And it hit me like a ton of bricks, dude. And I became like very,

Starting point is 01:15:49 very kind of sobered up about like, hey, what are we trying to do here in Ethereum? Because I'm a hundred percent of believer that if we had Ethereum, we wouldn't have had the financial crisis. The financial crisis is the perfect example of something that would have not happened under a financial paradigm under the Ethereum protocol. And so what I'm, what I'm excited for in the long term is about Ethereum's ability to prevent and reduce suffering in the world. And that starts by employing people in a self-sovereign way, giving people job opportunities that don't depend on financialization, that don't depend on just like just massive, massive conglomerates of companies and like Amazon and all these other just big centralized companies that just are the outsourcers of jobs.

Starting point is 01:16:37 What I'm really excited for is to be able to create self-sovereign money and finance. financial tools for people to have a job that doesn't get rug pulled from them because we don't have a financial system that rug pulls the whole entire world. And so I was reminded about how important this whole Ethereum thing is. And it's really important that we get it right because if we don't get it right, if the values and ethos behind these crypto systems, Bitcoin and Ethereum, don't actually align with the people that they govern over, then down the road, that is systemic suffering and systemic badness, right? And I want Ethereum to be good. Oh, yeah, sorry, go ahead. It's striking, David, I think that how systemic problems cost individuals. Like, the casualties

Starting point is 01:17:28 are people who are generally on kind of the lower rungs of society, right? Like the weak and the vulnerable, right? So there is such a responsibility for those who are early, those who are designing the system. And we as users of these decentralized finance systems and honestly as partially part of designing the social layer of these systems have to make sure we design them in the right way. Or else like what you just said is there's a tremendous amount of responsibility on those who are in the ecosystem now because we're saying, hey, here's this new financial system. It's better than the old get on the lifeboat. But like if our lifeboat has holes in it, If it, I mean, we're going to, if it's just the same as the boat that they just left,

Starting point is 01:18:14 it'll cost people. So you're right. There's a tremendous amount of responsibility in, in what we're doing here to get it right. And the honest truth is there are some problems that aren't solved yet, right? Like, we have to make the base layer in general and trustless blocks scalable right now. I think of like high gas fees. That's a problem. We don't want Ethereum to end up as a whale chain.

Starting point is 01:18:39 right that's a problem user experience is uh is a problem and we have to make this accessible to to everyone to be able to manage their their private keys also the m evi problem we've talked about in the past that keeps bubbling up and surfacing its head we don't want to create a whole bunch of you know insiders who who can uh front run everyone else so um i'm gonna have to check out that movie so what's it called again uh nomad land yeah nomad land it came out in 2021 and it was an indie film uh most people in the film weren't actors, which were pretty cool. They were just real people. Again, like, hit me like a ton of bricks, dude. That's cool. All right. I'm checking that out. Ryan, what are you excited about? Hopefully something a little bit messed out. It's less heavy anyway. We had Mark Cuban

Starting point is 01:19:24 on the podcast this week, my friend. We did? Okay, David, bankless the podcast is not even a year old. Actually, we celebrate our first year birthday. It's like March 2nd or something, March 1st or second. So this next week. Not even a year old. And we had Mark Cuban on the podcast. That is a testament, I think, to the bankless community. The reason we got on Mark Cuban's radar is because everybody kept hitting Mark up and saying, hey, bankless, get on the podcast. You're talking NFTs. You know, you should talk to them. You're talking Defi. You should talk to them. But that is absolutely huge and exciting. A few lines from that conversation. You guys, you can check it out. If you haven't already, it will be on the podcast on Monday. It's up live on YouTube.

Starting point is 01:20:06 now. Mark Cuban said he's learning solidity. Like, I can't believe that's a statement I'm making in 2021. He schooled us in some ERC 20, ERC standards. What was the ERC? I'm going to forget it at. Yeah, it was 1155, which is an NFT standard, but also has some extra features built into it, which Mark knows plenty about, apparently. Crazy, right? He knew what Euler Beats were. This is an NFT that we talked about on the last, like an audio and it's, that we talked about on the last roll up. He is totally plugged in. You know, one of the things that I think stuck with me in the conversation,

Starting point is 01:20:45 first, for one thing, he said, get long, then get loud, right? It was a takeaway for me about, you know, once you're in an asset position, this is what everyone does, start talking about that. Talking to your, I feel like we do a lot of that when we're talking about Eith and the values that underpin it. But the other thing that he got right was this statement. He said community creates value. Community creates value.

Starting point is 01:21:12 So three words. He was using that to describe NFTs, but it's also true of a money asset, monetary asset like Bitcoin and also of ether. So I was just blown away with the depth of his knowledge in kind of crypto and the takeaways there. So, man, it feels like we're going mainstream this year. Yeah, when we bring on big names like that into the bank list podcasts and and other people who I wouldn't call Mark Cuban like a crypto native, right?

Starting point is 01:21:42 And we also brought on Demetri Kofenis and Ben Hunt and Raul Paul. All these people, I wouldn't call them crypto native. And when you and I make these agendas for these conversations, I have this tendency to try and be like, try and teach. And I don't, and I'm trying to not do that. And Mark Cuban was definitely somebody that didn't need any teaching. No, he didn't. was on par with us and even past us in some technical knowledge in some realms, right? He kind of still went down that like blockchain everything, healthcare blockchain. I think I think he's going to

Starting point is 01:22:12 drift away from that in the long term, just like I just like I did. But other than that, man, like his knowledge supersedes most people in this space. Yeah, it was awesome. He really did his homework. If 90% of the VCs did that level of homework, they would be doing quite well on their investments in crypto. You got to put in the hard work. David, let's get to our next section, meme of the week. This is the last and final section. Do we have two memes again this week? Yeah, we do have two memes. Well, they're really good. One of them is a little self-serving because one of them's about me. But this first one, this first one is coming out of our podcast from this Monday. L2 Avengers Assemble. We got Robbie from Immutable. We got Justin from Synthetics. And then we got Matt from loopering. Matt is Iron Man, who Justin is. is Captain America and then Robbie is Thor. Is that, is that who Robbie is? Yeah. So we got we got the L2 defy implementers assembling in this meeting. It's pretty good. This is just awesome. Crypto wife, Twitter handle needs to crypto needs to NFT this for sure. For sure. Here's another one dude. I laughed

Starting point is 01:23:21 out loud when I saw this. This is David. Yeah, this is David's background, right? And it starts, if you can't see it on YouTube, it starts in January and he's got some plants behind him. It goes to February and he's got more plants and then March. And then in April, he turns into Groot. And he's got like an entire jungle behind him at this point. And I think the comment is the state of the nation is sprouting. This is probably a comment on the growth of crypto and everything in the bull market. It was just hilarious, dude.

Starting point is 01:23:56 At one time, I thought I could out out to plant you. Like I tried, made some people attempts. And then I was just like, dude, he's, I mean, it's not going to happen. It's not going to happen. So I've just given up on that pursuit. You are definitely the king of plants, my friend. Yeah, I will say that the plant population behind me actually tracks the price of ether. So this is actually what we're seeing.

Starting point is 01:24:21 This is just a proxy for ether price. So when we see 10K ether, like, damn, is it going to be planty in here? Wow. That sounds like a commitment that you just made, David. we'll look for that. The greener it gets on ETH price, the greener David's background gets. That's what's going to happen. Guys, I did, this is a complete side note, but I did read this book one time about human connection and psychology to planet Earth. And apparently humans that see the color green more often are less depressed. And I connected that to plants, but I think you just

Starting point is 01:24:54 connected it to the green candles, which I think, you know, green candles make me less depressed, too. Green candles do make me happy. And, uh, We've seen a lot of them. So a lot to be happy about these days. We're definitely in a, I guess, I'm feeling really good about the time in crypto we're in. There's a lot of building, a lot of good stuff happening. If you're here along the journey, you're still early. And it's just a good time to be in crypto.

Starting point is 01:25:19 Absolutely. So David, we should cut off right there. Let me do risk and disclaimers. ETH is risky. Bitcoin is risky. So is defy. You could lose what you put in. But we are headed west.

Starting point is 01:25:30 This is the bankless journey. Thanks so much for joining us. This has been another weekly roll-up. Take care.

Bankless - ROLLUP: 4th Week of February (BIG DIP, NFT Culture, Coinbase IPO, Ethereum Jobs)

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