Bankless - ROLLUP: 4th Week of May (Uniswap WSJ | Arbitrum Launch | Gamestop NFT)

Starting point is 00:00:00 Happy Friday morning bankless nation. David, what time is it? It is Friday morning weekly roll up time where we take a whole entire week in the crypto cycle and put it right into your brain as fast and densely as possible, which is an ambitious endeavor in this industry yet we try to do it every single week and we have fun doing it left and right. Markets for Lisa's news takes. We end with what we're excited about. No, we don't. We end with the meme of the week, of course, every single week. So stay tuned for that. Wow, a lot going in going on in the bankless nation, as always, a lot going in crypto. This is the last week of May. We are excited to get you downloaded. David, you ready to get started? Let's do it, Ryan. All right, man. We got to start

Starting point is 00:00:56 with the market. The markets have been crazy these days, David. Absolutely insane, crazy. Last week around this time, ish, did it feel like a bear market? To some people, it felt like a bear market suddenly. Are we out of the bear market? People got spooked last week. People got real spooked. Like on Twitter last weekend, David, a lot of anger, I would say, even, about this market, like the sudden drop. Anyway, we'll get into that. Let's start with Bitcoin. What happened? Yeah, from the start of this week at its lowest low, Bitcoin touched right below $32,500 and is currently trading just above $40,000. People seem to be kind of comfy with Bitcoin being at $40,000. People, I think, are sighing a breath of relief. But when Bitcoin got below $33,000, people were

Starting point is 00:01:50 freaking out. And there's a bunch of news to go along with this, which we will be getting into. But people are starting to get bullish and, you know, let's not say too bullish, but people are starting to, I think, believe that, oh, yeah, this bull market is not over. This is not the start of a bear market. And so there we are. Bitcoin, trading right above $40,000. If it can hold the $40,000 level, I think that's going to instill a lot of confidence in the people that got spooked last week. And yet, some people are still saying this is a dead cat bounce. Of course, we don't know for sure until the market plays out. But tell us what's going on in Ether price. Yeah, Ether got fucking wrecked coming down from $43,000 at the top all the way down to $1,333, which is a big drop off the top

Starting point is 00:02:40 over the 11 days between $4,300 and the bottom at $1733. Now trading at $2,810. So a huge rebound, over $1,000 off of the bottom. Just the fact that Ether is moving in $1,000 increments is absolutely insane. And I would say an ether has, it has a bigger bounce off the bottom than Bitcoin did. We'll get into looking at the ratio in a second, but the bounce off the bottom was definitely in Ether's favor, which is pretty interesting. I got to say on Sunday, people were freaking out, David, at these prices. Like, Ether price went 66% off all-time highs. Bitcoin was over 50% something like this. It's one of the biggest drops in crypto history. If you think that this is normal, this is not normal.

Starting point is 00:03:28 This is a huge drop. It is a huge drop, but also not unprecedented, at least on ether side. And again, last week we talked about 2017, right? So this dropped from 420 all the way to like the 130s or so. Again, this kind of feels like that. And it's even fitting the rhythm of that where there was a strong recovery, not back all the way to all-time highs, but a fairly quick recovery from those 130s lows.

Starting point is 00:03:55 Of course, some people are still thinking this is like dead cat bounce and, you know, we're going to go lower still. That might play out. That might be the case. What's your take on this? I mean, it would be just what would seem to be a really premature end to this bull market. But again, the listeners listening to two, like, critics would call it perma bulls. Critics were always bullish. But to some degree, there's always so many fundamentals, right? And this is going to be a theme for the rest of this market section. But like, there's still so much energy left in this, in this allocate, reallocation towards crypto assets. This is why some people were, some people were angry about this move on, on Twitter.

Starting point is 00:04:38 Because on Sunday, I said something to the, here's what I said. I said, some of you seem to feel entitled to crypto gains every week of the year. That's not how this works. And I wasn't trying, David, to downplays anyone's stress or suffering with a, 66% like lost and drop. That is a big deal, right? But like the reality is also, David, we just moved to prices of like 45 days earlier. Right. So if you bought more than 45 days ago, you were doing okay. And if you want to take the like 10x gains, you have to be comfortable with days or weeks where you're getting these kinds of dips, 66% dips or more. It just goes

Starting point is 00:05:22 with the territory. So at some level, like, if you're a unicycler, this is your first bull market, you're not used to these things, but also get used to them, right? Like the market doesn't owe us anything. We're all along for the ride. This is what volatility looks like. This is what you signed up for when you bought even good blue chip crypto assets like Bitcoin and Ether. This is what happens. It's a commitment to, like, this is world-changing technology. It will absolutely changed every single paradigm that we know and love. And that's why we're all super bullish on it. That's why there's a thousand X over the next like X number of years. And you're getting 60% drops every now and then. Like you don't get 1,000x upsides without like, you know, huge massive

Starting point is 00:06:04 pulldowns. Like you're going to have to take. You got to take it. You just got to take it. Also, David, we're going to have a bear market someday too. And I want these folks to be ready for that, right? Like we're just not going to go on a straight march to like, you know, a million dollar Bitcoin and like 100k, Eith. Like, there's going to be some, uh, some bumps in the road as well. Anyway, people have to get used to this. But let's talk about this, David. But no, before we move on, ether went from $730 at the end of January, almost straight up to $4,000 at the end of May. And so like people, I think people got really spoiled behind just number go up. It's like, oh, yeah, it literally was up into the right with very minimal dips. And everyone's

Starting point is 00:06:46 like, oh, making money left and right. And then all of a sudden, we dump 60%. If you are making money left and right for months and months and months, dips, dips coming. Like, it doesn't work like that. Like, you're going to get punched in the face. Yeah, just being real, of course. And you got to be in this game for the long term, for the long run. That's what, that's what we're about. That's what the bankless journey is all about. So anyway, guys, I know it's painful. You know, we'll get through it. Just zoom out, expand your time horizon. And don't panic sell. Like, don't give it to those, don't given to those immediate reactions. No euphoria without pain. All right, David, let's go to the ETH Bitcoin ratio. This is doing some stuff. What's it doing? Definitely doing, definitely doing some

Starting point is 00:07:25 stuff, that's for sure. There was some commentary about how well the ETH BTC ratio was holding up while BTC kind of led this downtrend. BTC started to dump off and like, you know, trade off, sell off sooner than everything else. And ETHBTC held up. And then the rest of the market started to sell off to. And then it went from its high of 0.08, which is really high in ETHBTC terms, all the way down to 0.057, which in the grand scheme of things, still pretty high. And it's still pretty high. And but, you know, ETHBTC does sell off when the market sells off. So, you know, if Ether's, if Bitcoin sneezes, you know, ether is sick in bed. I would say overall, though, it didn't really nuke as we've have seen it before. And it recovered pretty, pretty strongly. And so, that we hit the high earlier while we were super bullish while everyone was talking about the flipping and flippinging was in it was at 0.08 now we're at 0.07 um so i would say really strong recovery by the ebb tc ratio still feels like bull market stuff i don't think i don't know you never know could be a dead cat but still feels like bull market stuff lots of people saying dead cats but uh yeah

Starting point is 00:08:37 between you and me ryan it's just you yeah is it really i'm the only guy okay all right ryan Hopkins, ETH volumes have been exploding recently and surpass Bitcoin volumes. This might be some of the reason for that healthy ETH to Bitcoin ratio here. So this is actually spot volumes on centralized exchanges. And Bitcoin is always led from a volume perspective. Now ETH is taking the lead. That's something new we haven't seen in the past. I'm not sure if we've ever seen this, David.

Starting point is 00:09:10 What does that tell us? Yeah, this is a big narrative shift for Bitcoin, right? because Bitcoin talks about itself as one of the world's most liquid assets, right? You can make Bitcoin buy, large Bitcoin buys themselves from anywhere in the world, anywhere in the time. And one of the reasons why that's true is because the Bitcoin volume is insane. It's always been the largest in crypto. Ether has been taking the lead since, I would say, the last two weeks, I think,

Starting point is 00:09:33 is where I'm looking at on this chart, where Ether has surpassed Bitcoin in trading volumes. That doesn't necessarily mean that Ether is more liquid, but it definitely over the long term, if trading volumes are higher, then overall liquidity follows that. And so this is what it takes to become a money is significant liquidity globally. And that's what we're seeing out of ether in the last two weeks. It's also interesting maybe starting to position Ether as a reserve currency for crypto, which Bitcoin has still been king of. You could argue that Heath was the reserve asset of Defi, but Bitcoin has still led all of crypto. Maybe that's changing as well. Yeah, you have to wonder about how this

Starting point is 00:10:11 how this shakes out in the future. And this is what the flippinning looks like, by the way. The flippinging is one big flippinging, which is represented by like a thousand little flippinings, and this is one of them. Yeah, agreed. That's an important one. Okay, let's talk about D5 for a minute. So the first is total locked value down and then up as the market went down and then back up. We are sitting at 65 billion total value locked in DFI protocols at this moment. What does this mean? I mean, it basically looks like the ether price chart, which makes sense. because everything is super correlated right now. More Eith.

Starting point is 00:10:45 ETH just keeps going down, though, in DFI. I wonder if that's going to be a long-term trend that plays out here. It's like up to all. Only in the short-term. Yeah, we'll see how that plays out. Short-term noise. Okay, defy tokens. We measure that by the DPI,

Starting point is 00:11:02 which is many of the top most blue-chip DeFi tokens out there. How's that held up? I'm going to scroll to the weekly here. Except for that one brief moment in time Sunday night where like defy tokens got like cut by 60%. They've rebounded pretty well and they were doing pretty well, like kind of resisting the Bitcoin selloff pretty well and the ether sell off. And then the market just took everything for a ride, you know, Friday through Sunday. But rebounded down up to $420. Relatively, again, still relatively flat over, let's see, the one month period, I would say, download.

Starting point is 00:11:40 a little bit. How about the three-month period, Ryan? Yeah, flat over three months in the grand scheme of things, but if, you know, coming off of what was a pretty strong high at just like above $600. Yeah, year-to-date, we're still definitely up 421 year-to-date. That's up almost like a three or four X. So not doing too bad on the year. What about the DPI to ETH ratio? That's oh, God, here we are. And I haven't actually seen this chart since the last time we talked about it. but I called the bottom at ETH DPI at 0.13. And it's barely holding on. It barely held on,

Starting point is 00:12:17 but the bottom is still in on ETH DPI. And so I almost didn't call it. I almost got, became wrong, but so far so right. We'll see. There's some more weeks left in the year, David. Yeah, this is true. Yeah, I wonder what happens if we enter sort of another DFI summer type period.

Starting point is 00:12:36 But like we certainly haven't yet. ETH has been performing very well. Defy tokens have yet to follow. We'll see what happens in the future. All right. Let's jump to Raoul Paul. This is a really interesting take. You lead with his take, David, and I'll throw some comments in.

Starting point is 00:12:54 Yeah, I think we should put the frame of mind of 2008 into the listener as we read this thread. So 2008 was cascading liquidations that set off the global financial system to the point of just like, we need the, world's largest institutions to take action or else the world is going to explode. That was what two thousand. Bail out the bankers. Print money like fix it, fix it, fix it, fix it. Like things are broken. Things are, things are dried up. So let's use that for context. Granted, DFI is not the world world's largest like industry or an economy. So this is a microcosm. But let's use that as a frame of mind. Here's what Rawell says. Something to get your head around. Headline. A major asset class crashed 42% in 14 days wiping out a trillion.

Starting point is 00:13:38 in value in an orgy of liquidations of people up to 100x leverage with very low regulation. Many tokens fell up to 70%, including unregulated lending and borrowing businesses. Beneath the headline, that's... That headline, by the way, is what people freak out about, right? Mainstream media, I saw it. It's like, how can institutions buy such a volatile asset? This is not ready for mainstream. All of these headlines came out.

Starting point is 00:14:03 Right. Beneath the headlines, though. So this is what Raoul says. You know, here's the real through line that you. you should pay attention to. Crypto had a major, major VAR. Do you know what that is, Ryan? VAR.

Starting point is 00:14:14 VAR. VAR. VARANES, variance, I guess. Volatility, something? I don't know. Yeah. And nothing happened. It had a shock test and nothing happened. Leverage liquidations was offset by over collateralization. Overcollarization is fundamentally safe.

Starting point is 00:14:27 No one was left holding the baby. No firm went under. The Fed didn't need to step in. Defi didn't break and carried on near normal. The markets cleared. The markets. worked. Defi apps worked. Nothing broke. That is absolutely fantastic. And like nothing broke and it dropped 60% in 11 days. In 2008, it didn't drop 60%. It dropped like 40% over like two weeks or something.

Starting point is 00:14:53 I don't know. My memories, you know, I was like a kid during that. But the point is it's like it took a harder punch and it came out, you know, came out swinging. It did. It did. I think people overestimate the risk of defy sometimes. Not that there isn't smart contract risk and rugpole risk and theftless risk. But all of this lending, at least right now, none of it is credit based. All of it's over collateralized. So that is a very open, honest market. You could see all of the activity on chain as it happens. So yeah, I mean, good for defy, good for crypto for sustaining some of this. It shows that it is possible to do so in an open unregulated market. Maybe this is what open markets really look like if the Fed and regulators like peeled off the veneer and stop moving

Starting point is 00:15:42 all of the dials around. Maybe that's what we're seeing here. And he continues saying there was no daisy change of collateral losses. Stable coins remained stable. A few centralized exchanges went down for an hour or two. No exchange big losses occurred. No protocol failed mainly. No protocols went down. Overall, just like, people get spooked by the 60% and like a lot of people just aren't ready to see the value of their investments drop by 60%. And that's that's their thing. But things worked, right? And so to some degree, there is less risk in things that can take a 60% drop and rebound without completely dying. Like that's not something we've seen in the world before. Good acid test. Here's another take on this on defy. Decentralized exchanges had an

Starting point is 00:16:28 absolutely incredible set of days. This is actually from May 20th. So it was before the Sunday, the big sell off. But look at these volumes, decentralized exchanges, David. I mean, they held up. They supported the trading that needed to occur for this volatility. And they like crushed it in terms of volumes. Like super impressive. Over 10 billion in decentralized exchange volume on May 20th. I bet there was even more on May 23rd. The sushi swap plus uniswap dominance is. absolutely insane. And just the amount of straight up pink on this graph, and for the listeners, pink means uniswap is really, really strong. I wonder how much extra volume came into DFI because all these centralized exchanges were shut down. Agreed. That's super interesting.

Starting point is 00:17:13 Anyway, that's the story of the dip so far. I mean, we'll continue to cover it. See what happens next week. I don't know if we'll be lower or higher. No one knows this, of course, but we'll continue to keep you updated on the markets. This is an interesting take while we're talking about numbers David from Amin, tornado cash, maybe you can explain what that is, but tornado cash is within 10x of flipping Zcash in terms of total locked value of ETH versus market cap of Zcash. What does this mean to you? Yeah, so Zcash is a ETH tumbler. It's an ETH mixer.

Starting point is 00:17:49 And so you deposit Zcash, tornado cash, yeah? Oh, is that what I, yeah, I meant to say tornado cash. Tornado cash is a ETH mixer, right? And they also are working on dye and USDC mixers, but right now just eth. And so you deposit lots of one or 10 or 100 ether into tornado cash. And then you wait because you're waiting for other people to also do the same. And when you deposit it, you get this note, right? You get a note back, which is just a cryptographic hash.

Starting point is 00:18:17 And you kind of, you save that on your computer. You save that not on the Ethereum blockchain. You save that in meat space, right? Then you wait for other people to come in, put their, ether into the Tumblr. You allow entropy to happen. So you just are patient. Then you come back with your note at a later date and time. And then that note is a right to claim an equivalent amount of what you deposited into the Tumblr. And you can send that to a different address elsewhere. And so it's a privacy mechanism, right? So one of the biggest pain points about Ethereum and DeFi is

Starting point is 00:18:46 that like if you need to pay someone or transfer money to someone or just like if you need to do something, like you know, no privacy. There's no privacy. And you have that with cash, with cash money. You have privacy in the real world. Exactly. Right. And so like if I, if I pay you on on from my wallet, right, you can go and check out my wallet and see what else I've been doing in the world of crypto. Right. It's just like giving you complete inspection ability into my personal finances. And we don't like that. And so what tornado cash does is it lets you put Ethan and receive like a note. Like think, think of literally a piece of paper, but just like in digital form, like a note. And you can, I can pass that around and that just passes around in meat space. But then you can,

Starting point is 00:19:25 can come back to Tornado Cash and redeem that for actual Ether, send it to a different wallet, and you cut off that connection back to your OG wallet. Zcash does a similar thing, except Zcash is an L1. It's a native currency to the Zcash ecosystem, and they have similar transaction capacities. But the difference is Zcass is something non-native to Ethereum. And so really the through line here is, is privacy an L1 asset or is privacy an application in DFI? I've always been of the opinion, and I'm pretty sure Ryan you agree with me, that privacy is an app, not an asset. Privacy is something that you can bestow into assets, all assets, not just one specific asset.

Starting point is 00:20:07 And so what Amin is saying is that tornado cash has $200 million of eth deposited into it versus Zcash, which has a $2 billion market cap. And so what he's saying is he's keeping an eye on the TVL of tornado cash in ether terms versus the total. market cap of Zcash, which is an L1. And this is a really good comparison. And I expect TVL and Tornado Cash to pass Zcash over the long term. Yeah. I mean, for those who weren't here in like 2017, 2018, this was very much an open question, right? There was very much the idea that we would, if we wanted to have privacy in crypto, we would need privacy chains, essentially, completely separate L1s. And so the valuations of many of these privacy chains were based on this. And this looks like Ethereum is just kind of swallowing up the privacy use

Starting point is 00:21:01 case. And if there is a flippinging tornado cash to Zcash, I think there's like some conclusive evidence that privacy is better off as an app, not as a whole separate layer one. Nothing against Zcash. I mean, that team is fantastic. They're doing great work, putting out pioneers of research pioneers of cryptography. But like we're just putting on kind of an investor hat and sort of a thesis hat of how this space shapes up. And it looks like Ethereum is like swallowing up some of these apps. So we'll continue to monitor that.

Starting point is 00:21:32 The thing is in this also talk is a really awesome tailwinds behind ether the asset, right? Because not only is ether the asset ultra sound money, but if it can match or exceed Zcash in market cap inside of tornado cash, it's also ultra private money, right? Like literally ether gets all of the features. And that's why we're all bullish on ether is because every single app that DeFi comes to build benefits Ether the most. Yeah, absolutely. Okay. So let's look at this too.

Starting point is 00:21:59 This is an interesting tweet. I thought was worth pulling on. YFI trades at a price to earnings ratio, PE ratio used in stocks of 12 currently, 12 with analyzed, annualized earnings of 85 million based on May data. Price to earnings of 12. David, you don't see that anywhere. Anywhere. Like, in capital assets, nowhere. Even in the normal stock market, 12 is low.

Starting point is 00:22:24 What about a high growth industry like Ethereum and DeFi? I remember in 2017, we were all talking about how prices got so far ahead of, like, their PE ratios. People, PE ratios of like these stupid, like, 2017 tokens were like in the bagillions. And YFI, which is generating a ton of revenue, is sitting at 12. Like what? It's just a reminder that the. we have real capital assets this cycle that are producing like real revenues and profits that you can easily track on chain totally different than 2017 now some people will say yeah but

Starting point is 00:23:00 david um like these earnings are based on um you know token valuations elsewhere right and so like yields coming from all of this token farming incentivized farming and that is temporal that will dry up at some point in the future. And like that might be true, right? Like I certainly understand kind of that take. But yet we're still at 12. Like if you're going to compare this to, you know, something similar that happened in dot com or Yahoo had a crazy valuation.

Starting point is 00:23:30 It's based on advertising generated from all the other dot coms. It was all a big bubble anyway. At that time, Yahoo is not trading at 12 PE ratio. It's trading the hundreds, if not the thousands. So, I don't know. It doesn't feel like a bubble to me. These are real capital assets. These are undiscovered assets, if you ask me, pretty impressive.

Starting point is 00:23:51 And importantly, Yerne is putting on its balance sheet, both its own equity, right, the YFI token, but also ETH, right? So it's a P.E. ratio of 12 for ether, not for dollars, right? And so, like, that hits different, at least in my mind. Yeah, and we're going to get to that, and it takes a Wi-Fi governance proposal. that is going to do that. Let's take a look at this from David Mihal. This is money movers. Which blockchain is settling more value?

Starting point is 00:24:20 We've got Ethereum here now surpassing Bitcoin. And I think this is just stablecoins, David. So stable coin value on Ethereum has now passed Bitcoin value settled on Bitcoin for the first time since DFI. Oh, I see. I see. Right. Okay.

Starting point is 00:24:38 So what's going on here is not Bitcoin's true. stable coin settlements, because there used to be, and perhaps still is Omni on Bitcoin's transferring stablecoins. What this is saying is stable coins being transferred on Ethereum is equal to the volume of BTC being transferred on Bitcoin. Wow, that's crazy. Yeah, it's crazy and it's huge. This is very much Ethereum becoming kind of the settlement layer for the world, I will say. Although I will also say it's not quite an apples to apples comparison, because we make this distinction with Bitcoin on Bitcoin is a bare asset. It's completely trustless, right?

Starting point is 00:25:15 Stable coins on Ethereum, some of them are maybe, like Liquity, the protocol we talked to earlier, but some are USDC and Tether, and their settlement doesn't just happen on Ethereum. It also happens in Meetspace. So an interesting comparison, I think, also not quite apples to apples, but maybe yet another flippinging, interesting.

Starting point is 00:25:35 I kind of think that's beside the point. Beside the point of this particular take. particular take is that Ethereum is being used to settle value. We can talk about the nature of that value and like the banklessness of that value being settled. But I actually think that's a separate conversation. To some degree, it's just like dollar settled versus dollar settled. I actually think we'll get into some of that conversation when we talk about like some of the layer twos that are popping up because I see a lot of this transaction settlement activity for low trust stable coins or for less trustless stable coins might start to happen on layer two. Anyway, we'll get to

Starting point is 00:26:06 that. All right, guys, we're going to be back with the hot releases. next, but first, we want to thank the sponsors who made this episode possible. AVE is a borrowing and lending protocol on Ethereum and just recently released AVE version 2, which has a ton of cool new features that makes using AVE even more powerful. With AVE, you can leverage the full power of defy money Legos, yield, and composability all in one application. On AVE, there are a ton of assets that you can deposit in order to gain yield, and all of those same assets can also be borrowed from the protocol if you have deposited collateral. Here you can see me getting a 200 USDC loan against my portfolio of a number of different

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Starting point is 00:28:11 Balancer V2 brings powerful new features that makes your money work even harder for you. In V2, idle tokens are capable of generating yield in defy without sacrificing liquidity in the pool. To top things off, Balancer is reimbursing gas costs with BAL rewards, meaning that your gas fees are reimbursed up to the cost of the transaction with the Balancer governance. token. Balancer's mission is to become the primary source of liquidity in D5, by providing the most flexible and powerful platform for asset management and decentralized exchange. dive into the balancer pools at pools.balancer.combe. Here we go, guys. It is release time. David, we got to start by talking about layer two,

Starting point is 00:28:51 layer two summer. It feels like it is the night before layer two and all through the house. It feels like it feels like the time. Everyone is stirring and waiting for it. Everyone's talking about when's it coming, when's it coming? I feel like it's actually about to hit us like a title wave. And let's talk about why that might be the case. The first is Arbitrum, launching maybe today. Today. As you're listening to this.

Starting point is 00:29:17 Not the day of recording, the day of you listening to this. The day of you listening to it. May 28th was supposed to be the day. Of course, we have Arbitrum on State of the Nation on Tuesday. So we'll get the full update there. Make sure you tune into that. But why is Arbitrum interesting, David? Because it is one of the two big L2s that is really true to the values and ethos of Ethereum, right?

Starting point is 00:29:39 So we got optimism and we got our Arbitrum. There are other L2s as well. But those are really the two pioneers in the world of cryptography that are extending the base layer security of Ethereum into the L2s with uncompromising decentralization and security. And there's about to be, in my opinion, a just rush to grab new real estate, right? Like we've already seen applications deploy on Polygon, Avey Sushi Swap, really competing with each other to get like TVL and liquidity inside of Polygon. And Polygon isn't even really the complete version of L2s that we all have been talking about

Starting point is 00:30:17 for the past like six months. That's optimism and Arbitrum. And Arbitrum launches tomorrow for developers. And there's just going to be a race to get in and start deploying on Arbitrum. And the magnitude of how this is. is going to change the user experience for the general defi user can't be understated. Everything is about to change. Everything is about to change.

Starting point is 00:30:37 Yeah, I agree with that. So this take a new scaling project has entered this side chain chat. Arbitrum is not a side chain. Interestingly enough, so CoinDesk, not quite right. Arbitrum is what we would call a layer two. That means it is secured by the Ethereum mainnet, similar settlement guarantees, and economically secured by ETH the asset. first one of these to launch with an EVM.

Starting point is 00:31:01 So that means all of the D5 projects you know and love on Ethereum Mainnet can be fairly seamlessly ported over to Arbitrump. And I think they're not just launching like, hey, we're live. They're going to be launching with a whole bunch of projects. And we'll find out more, I guess, tomorrow or today, maybe for the listener. And then also on Tuesday when we talk to them. But this was interesting from Hayden Adams. The Uniswap community has spoken.

Starting point is 00:31:25 and with overwhelming support in favor of an arbitram deployment of Uniswap V3. Uniswap deploying an arbitral. David, it was not too long ago where we talked to Hayden about his layer two plans. And Uniswap was very much of the opinion that, like, hey, we want to maximize for decentralization. So roll up solution is the way to go. They were thinking optimism at the time. That is definitely still the path forward. But now it looks like the community is pushing them to explore arbitram as well.

Starting point is 00:31:53 And Uniswap is going to be there. Very exciting. What do you make of this? I mean, to some degree, you literally have no costs, few costs to deploy on every single viable L2. Why not? Plus, let the market decide. Like, deploy everywhere. Let the market choose, but you can't let the market choose without deploying to every single possible spot. And Arbitrum is a very viable spot to deploy.

Starting point is 00:32:15 You literally have no reason not to. And maybe they both work out. And it's only beneficial to uni token holders to have surface area on optimism and Arbitrum. and Polygon for that matter, wherever people are, just allow the market to express itself. And so I think Defy Apps are about to be deployed everywhere. It does seem Uniswop so far has opted to deploy

Starting point is 00:32:36 the most decentralized chains only, which means like roll up chains, optimism and Arbitron. But maybe Polygon at some point too, a little, like it's less. Polygon is, of course, more of a side chain, less of a layer too at this point. But they're moving in that direction as well. This kind of brought it home to me

Starting point is 00:32:55 that optimism is coming as well. Okay. So like optimism on ether scan. David, I know you've used Polygon, right? So like this is also why it's so exciting to see these roll-up solutions because like defy on Polygon with no gas fees is awesome. Like it's really fun and it's great. Like you can experiment it just works with Metamask, you know, the same defy tool used to. It's great. No cost for experimentation because transactions are basically free in instance. Like, oh, do I want to try this thing out? out, like, I don't even have to think twice because it's free. I'll do it. I'll do it.

Starting point is 00:33:28 If I don't like it, I'll a sudden do it. Like, no costs. So, yeah, the people who are priced out of Ethereum can use Polygon, but it makes some tradeoffs, of course. And, but like to me, Polygon is sort of a proof of concept. Like, will there be demand for an EVM roll-up chain? Yes, absolutely there will. Why?

Starting point is 00:33:47 Because we've seen Polygon. We've seen even Binance chain with the EVM, a massive amount of demand on both of those chains. So to me, we've got product market. fit. Anyway, this is about optimistic roll-ups on ether scan. So when you use Polygon, you don't have the EtherScan block Explorer, which I personally really. Really annoying. Yeah, but here it is, right? You can click here. And this is what the UI of this, of roll-ups are going to be, right? With your Meta-Mask, if you want to go and use Polygon, you go to Medi-Mask, and instead of using the Ethereum main chain, you take the drop-down bar and you hit Polygon. That's going to be the same

Starting point is 00:34:22 exact thing for both arbitram and optimism. You're just going to select a different network. And the fact that you can just fork ether scan and do like, oh yeah, the optimistic ether scan, which ether scan is like one of the great blessings just given to the world. And the fact that we can just have the same thing on optimism is so awesome. It's so exciting. This is why we're excited about layer two summer. This is why, David, I feel like this is coming like a title wave, because it's not, this stuff is not just going to launch. It's going to launch with actual D5 projects that we use today that already have product market fit. Let's go to the next take here.

Starting point is 00:34:57 Oh, here's a question that came up that I think we should address. And before we do, listeners, if you have questions that you want us to address and they're good questions, we will address them. So that's a through line here. Yeah, here's a question. Love what you guys do, a bank. What's my question, how can ETHs value benefit from layer twos? Wouldn't scalability decrease gas?

Starting point is 00:35:18 And therefore, also the coming deflationary burning of gas compared to current state. So that's the question, David. Is like, are these layer 2s actually competitive with Ethereum and with Ethereum block space? Why don't you take a first step at this question? Oh, yeah. This is a really awesome conversation. First off, there is this concept of induced demand, right? And so this is one of the big reasons why Bitcoin, with its scaling debate with Bitcoin versus Bitcoin cash and also Ethereum with like raising the block size too much is also relevant here.

Starting point is 00:35:49 if you just scale up the Ethereum blockchain, you actually don't, you don't actually relieve fees at the base layer because people just become to use it more. Like, the more scale you have, there's a basal level of what people will pay for and people are going to pay for that no matter what. And so if we scale the base layer,

Starting point is 00:36:05 people are just going to use that more. And so, like, moving volume activity off of the base chain onto L2s means that other people are free to use the base layer because there's more freedom there. And so there's just going to be this induced demand. and that's why we just don't like skyrocket the block size to infinity to allow for that transactional capacity. It's why we don't do that because we know the fees are just going to come regardless. Or the transactional demand is going to come regardless.

Starting point is 00:36:30 The other thing is that if you are on an Ethereum L2 like optimism or arbitram, you are still committed to the Ethereum base layer, right? Your transactional activity and optimism and arbitram and all these L2s, the volume of economic activity can be really, really hot, but it's still like locked into the Ethereum ecosystem, right? If you ever want to get off of the Arbitrum L2, you're going back to Ethereum. And so we talked about this with Nick Carter and he, on his block space cycle podcast slash article, which is really good article and podcast to understand the Ethereum gas markets.

Starting point is 00:37:05 He used this concept of a governor and how a governor, a governor is a mechanism, not like a governor of a city. Governor is like a tool. And a governor is how the steam engine began to. to work, where if the steam engine gets too hot, it puts a bunch of energy into these weighted spinning like metal balls that have a lot of mass, and they spin around really, really fast, and that's how a steam engine can self-regulate. And that's the metaphor I use for the Ethereum base layer, where like if the Ethereum base layer is getting too hot and fees are getting too high,

Starting point is 00:37:37 it expends energy by putting it into the L2s, right? And then the L2s suck up some of that demand to transact. Then if the... Ethereum base layer starts to cool off, those spinning, like the spinning governors, the spinning weighted balls, those are allowed to decrease in energy and put potential energy back into the main chain. And so once the fees on the main chain come down, people can come back from the L2s and because the fees are cheaper. And so they come back from arbitralum.

Starting point is 00:38:08 They come back from optimism. And they say, oh, the fees on Ethereum just went from like a bajillion gas to a much more reasonable amount of gas. let's go back to the main chain, right? And so it keeps economic activity on Ethereum really, really sticky, and it allows for a much broader set of economic use cases overall, right? And so, like Arbitrum and all these L2s where transactions are going to be free and instant, all of a sudden that opens up a brand new domain of economic activities that we have never been able to do before on the Ethereum base layer. And so it's creating new economic activity. And it's

Starting point is 00:38:43 it stuck on Ethereum. It's sticky to. Ethereum. And so overall, just more activity on Ethereum that is ultimately secured by ether the asset at the main chain is always good. Maybe there's some relief of gas fees and there is literally less gas fees being burnt. But the stickiness and the centrality of this economic activity to Ethereum is the through line. And that's what we should be focusing on. I'll note also that chains like arbitram and optimistic roll-ups, optimism, they literally require

Starting point is 00:39:16 ETH in order to, as a bonding mechanism, in order to have them operate and for some of their security guarantees. We'll talk with the Arbitrum team about that next Tuesday. But because of all you said, David, what tends to happen is there's an important concept of economic density, right?

Starting point is 00:39:32 Like, there was a time when really ridiculous transactions occurred on Bitcoin. When I say ridiculous, I just mean like, very low value, low value activities occurred on Bitcoin. Like, there's kind of like a Bitcoin pixel type game where you just like select a pixel and that would be a Bitcoin, you know, transaction. Satoshi's place. Yeah, Satoshi's place, right? Eric, did Eric Forhees, was he behind that? No, that's Satoshi's dice. That's, that's, uh, that's separate. Sochi's dice, right?

Starting point is 00:40:01 But same point, like kind of weird, weird, like low value transactions that are just real games. Lockspace was cheap. Why not? Now it's permanently on the Bitcoin ledger. We would never, imagine a Satoshi's dice game like today. Similarly, like it doesn't really make sense to have low value transactions on Ethereum today. Like the idea of breeding a crypto kitty, the way that we did in like 2017 and issuing that on Ethereum, like that would not work, does not fly today. So what tends to happen is what will tend to happen is higher economic density transactions will occur on Ethereum. These are the transactions that are high amounts, like high value, and also require high degrees of trustlessness in decentralization. And so the transactions will get like more and more and more dense over time

Starting point is 00:40:53 until you might be left with like entire like transactions that occur on Ethereum that are compilations of full-ups, entire chains, like academic activities of entire chains. I think of this kind of That's the suburbs versus cities analogy to David. It's like when New York City starts building other suburbs, right, it doesn't take away from New York City. It actually is additive to New York City and like the metropolitan inner city type area and economic activity of that. People are so committed to living in Manhattan even though they can't

Starting point is 00:41:27 that they just live next to it. Exactly. Exactly. So I think that all of these, even the side chains, David, like even Binet's smart chain. is actually additive to Ethereum, right? And because like it's using the EVM, it's like onboarding people into defy

Starting point is 00:41:45 and like they eventually graduate into Ethereum or another roll-up, it's like all additive. So great question. Hopefully that answers some of it. We'll see how it all plays out, but I'm excited. At the end of this conversation is the protocol sync thesis, right? Like the reason why finance smart chain is additive to Ethereum is because things settle down

Starting point is 00:42:03 to the most secure and strongly settled, strongly held settlement assurances in the planet. And that's where Ether and Ethereum is. And so the more things we could do that's proximate to that, the more things fall down the protocol sink. We haven't talked about the protocol sink in a while, Ryan. We should kick that up again. We definitely should, guys.

Starting point is 00:42:22 We'll try to include some resources on that in the show notes, too, talk about it another time. David, another thing is Polygon has released some really interesting news. They are announcing a Polygon SDK. And here's why I think this is interesting is because this SDK allows you to build other polygon side chains. So, David, we talked earlier about Ethereum kind of eating apps, like eating privacy as an app. One other interesting concept that was birthed in 2017-2018 was this idea of the cosmos, which is a separate chain. And it takes a different approach than Ethereum.

Starting point is 00:43:02 You have sort of all of these different side chains, essentially, that pay for their own security, right? And that essentially are transmitted through the cosmos hub. That was a really interesting project. I think remains an interesting project. There are some cool stuff being built on that. Essentially, what Polygon is doing here is giving you an SDK. So if you're a developer, you want to create your own app chain, you can create your own app chain as a side chain. So there might be the idea of Ethereum through Polygon kind of eating this whole app chain

Starting point is 00:43:40 Cosmos idea, except settlement occurs through Ethereum rather than a Cosmos hub. That's why I think this is an interesting move for Polygon. We'll see how it plays out. Yeah, there's a famous through line that was originally created by Bitcoiners, which is anything that's actually useful will ultimately become built on Bitcoin. Some Bitcoiners still say that. That's actually becoming true on Ethereum. We talked about Zcash. Zcash is being built on Ethereum in the form of tornado cache. Eos was was built on Ethereum as well with his Lume network, but neither of those things worked out. The thing is like if it is a good idea, the whole point of what

Starting point is 00:44:24 Vitalik calls like functionality escape velocity, if it can be built and it's useful, it will be built on Ethereum. And that's the power of the EVM. That's what the EVM can do. If it's useful, you can deploy it on the EVM. And if it is useful, you might as well deploy it onto Ethereum, because that's where everyone else is. Yeah, this kind of reminds me of the Cosmos model, except with the EBM, basically. And so you get some of that network effect. All right, David, let's move a bit faster here. So we get through the, we're still in releases. Gitcoin just released, a Gitcoin Dow, governance token. We've talked about that a ton on state of the nation. Go check that out. Any words on this release?

Starting point is 00:45:02 Yeah, Kevin Awaki is really pioneering what it means to Dow. And I think the cool thing about Gitcoin token, and maybe I'm biased here, but like Gitcoin Dow, in the sense that like Uniswap, Yern, sushi swap, those are on-chain Dow's. They have protocols that they operate with. Gitcoin, bank, bankless Dow, Meta Factory, these are off-chain DAOs. These are different kinds of Dow's where people collect in the meat, space world, usually on Discord, and they figure out what to do. And they figure out how to progress. And so these are really just digital organizations that don't necessarily have smart contracts on

Starting point is 00:45:40 Ethereum yet still operate as a distributed organization. And so I'm really optimistic about the future of Gitcoin Dow. There is a ton of reasons to be really, really excited. It's kind of like the Dow of Dow's in the sense that like Gitcoin as a platform funds other public goods and Dows are kind of like public goods. There's a whole incredible bullish thesis that will never ever come out of the Gitcoin team because of reasons. But I'll say it.

Starting point is 00:46:10 Yeah, absolutely. And by the way, a quick PSA, if you've ever given to a Gitcoin grant or open one yourself, you should go check out to see if you're eligible to receive GTC tokens as well. All right, last release here. Coinbase Institutional is announcing

Starting point is 00:46:26 the unveiling of some new offerings here. David, what's this about? Yeah, basically they are, I think this is kind of like, there's some real products here, but more this is just a rebrand of Coinbase's traditional products in like an institutional package. All of Coinbase's products are just being like kind of reord into a little like box and then presented to institutions

Starting point is 00:46:49 and like, oh, we have Coinbase institutional now. I think really the main feature is like this integration between deep cold storage with insurance, which gives institutions piece of, mind, but allowing that cold source to fluidly interact with Coinbase the exchange, right? And so it allows for like safe and secure and insured custody, but also liquidity when the time comes for it. And so this is now Coinbase institutions, like next to Coinbase Pro and Coinbase Custody and Coinbase earn. They want to be the crypto bank for institutions, right? So they want to

Starting point is 00:47:21 replicate Michael Saylor's. We're buying Bitcoin for our Treasury success over and over again with every single institution and company. Powered by Coinbase institution. Exactly. So it's a definitely a good play. We'll get more institutions into crypto. All right, David, that is it for releases. Let's switch over to news. Man, I think the leading news this week is two billionaires, Carl Ican, Ray Dalio, talking about crypto and also China. China, Fudd? Maybe not. Unrelated to the billionaires. It's going on China. Unrelated. Two separate topics. Let's talk about the billionaires first. This is Carl Ican. So he is a famous billionaire activist investor, corporate raider, someone call him. I just remember times where he is basically like invested a whole bunch of money into companies and totally shaking them up.

Starting point is 00:48:13 Like remove the CEO, install a new management team, write a letter to shareholders. Like he is an activist investor. Now he's talking about Ethereum and now he's talking about Bitcoin. And some of the quotes here are pretty phenomenal, pretty crazy. So he says, with Ethereum, it's the underlying blockchain. So Ethereum has two things. You can use it as a payment system and you can use it as a store of value. Payment system and store of value. Ethereum he's talking about, not Bitcoin.

Starting point is 00:48:41 So he says, so Ethereum and Bitcoin are different. Bitcoin to me is just a store of value. Wow. He's getting into the store of value versus like what's a blockchain. and, you know, can there be more? Basically, the through line that I'm hearing there is that Ethereum has an app layer and it's a store of value, right? That's what he's really saying.

Starting point is 00:49:04 The blockchain's like, oh, yeah, there's things to do there. And there's a native store of value. That's the through line that I think he's cluing into. He also says he wants to get into crypto in a relatively big way, right? So what does he say? I mean, a big way for us would be a billion dollars, a billion and a half dollars. I'm not going to say exactly, which least to the question, right? Carl, I can't. Operated in these markets for who knows how long, knows how to manipulate media,

Starting point is 00:49:33 knows how this game is played. If Carl has not already bought a billion dollars worth of Ethan Bitcoin, like already, why in the world is he announcing that he's about to do something big in crypto and maybe like hinting by a billion dollars worth of Ethan Bitcoin? Are you saying that this is like sciops and he's actually already done it? Or what are you saying, man? Like, the guy's not, yes, that's what I'm saying, David. Like, he's, if he's on media, TV doing this, I don't know for sure. Like, he's got to have positions in some of these assets.

Starting point is 00:50:06 Why is he saying this sort of thing? I mean, incentives would align with your thesis, right? Like, why, who has the incentive to chill before they filled their bag? Incentives, but also, like, this is what this guy does. It's his playbook. Right. Right. Like he's an activist investor. Implying that over a billion dollars of buying demand is going to be coming into these assets,

Starting point is 00:50:29 even though it maybe has already happened. Look, I'm just asking the question, you know? Who knows what Carl's done? Maybe Carl filled his bags during the Sunday drop whenever one got spooked and he bought their spooked bags. Some are predicting that he plans to manipulate it further. So like he's just saying that and then he's going to like, you know, push down and then like, whatever, you know. We've already seen a 66% drop.

Starting point is 00:50:53 He can't scare us, Carl. Let's talk about Dalia. This is a bit more of a long-term thinker, investor, a lot different, a different class of billionaire, I guess, than Carl I can. But he came out. I watched his presentation,

Starting point is 00:51:08 the coin desk on Monday, and he said this, I have some Bitcoin. He talked about crypto. He talked about Bitcoin. He talked about Bitcoin being a better buy than bonds. man, Dalia is one of my favorite thinkers in this space, right? Like, because he thinks historically about money and how macro currencies, right, like, have changed over history.

Starting point is 00:51:35 Right. So like he goes back to the British pound and before. And then he talks about fiat as like sort of a passing regime. All fiat monies have failed eventually. And so he thinks we're in a late credit. debt cycle, late debt cycle, basically, and that fiat and the U.S. as the World Reserve currency is on its way out, about to be replaced by something else. So his message is like, position yourself. Historically, the positioning has been all about commodities and gold.

Starting point is 00:52:06 But now he's getting crypto-friendly. He also talked about defy, being very excited about defy. And he also mentioned Ethereum in that conversation. And he was like asking to be educated further on defy and Ethereum. So he also said he wasn't convinced that Bitcoin could win. He said Bitcoin's could be a victim of its own success. So he was worried about Bitcoin and other crypto assets becoming large enough to start threatening nation states and the nation states reacting to them in a very negative way. Of course, the crypto response to that is like, yeah, when that's a problem,

Starting point is 00:52:43 crypto is going to be really big. Right. So maybe you should still buy now. Right. But anyway, really good conversation with Dalia. And it feels like he's definitely warming up. He owns crypto. That's pretty crazy. It sounds like Dahlia is ready to come on bankless. It sounds like it's time for us to finally talk to Ray Dahlio. I know he's been interested in to come on. I'm sure he has been. Yeah, I'm sure he's listening. I'm sure he's listening. Dalia, if you're listening, we'd love to have you on bankless. Love your thesis for the space. David, you should. I think he bought Bitcoin a while ago.

Starting point is 00:53:14 I think he bought Bitcoin before he accepted being a speaker at consensus, and that was like months ago. Yeah, I mean, got to be. Got to have. I don't know if his fund has, though. Just different. Oh, interesting. Bridgewater. I don't know if his fund has.

Starting point is 00:53:27 It's personal or what. All right. Let's talk China. So, David, you know more about this. You start. Right. Okay. So there is this meme of China bans Bitcoin.

Starting point is 00:53:37 It happens in bull markets. It happens once every two to three months. Happened like seven times. In 2017, it's already happened like two or three times. so far this cycle. This time apparently it's different. And not specifically not Bitcoin, but Bitcoin mining, I think. And so the rumors are, and if you really want to dive deeper into this, go follow Nick Carter and listen to what he's been saying. But Bitcoin miners are leaving China out of fear of fear, out of fear, I guess. And so Bitcoin mining hash rate has been noticed to have been

Starting point is 00:54:11 migrating out of certain areas in China elsewhere. And that's perhaps one of the big reasons as to why Bitcoin fell off and dumped off because Bitcoin miners needed to liquidate their positions to fund their cost of moving entire operations. So this is a big deal. It's not just like there's a lot of hash power in China. And so getting moving to hash power out of China is a costly endeavor just because of the magnitude of how many.

Starting point is 00:54:38 Where are they going, David? I don't know. I don't know. elsewhere, but the through line is elsewhere. And so Bitcoin miners are leaving, and this has really changed the narrative game. The Bitcoiners are trying to change a narrative game with this, and rightfully so. This is words out of Nick Carter, where, you know, hash power leaving China is really bullish for Bitcoin from the American, US, United States perspective, because hashpower gets cleaner because we are killing dirty hash power and it's migrating to cleaner sources.

Starting point is 00:55:09 And it's also influxing into the United States. And so Chinese mining hash power dominance is coming down and more decentralization, more decentralized hash power is rising up. And then it's also greener is the throughline narrative. And so this is a cause short-term pain, but long-term optimism for the world of Bitcoin mining and green mining. And that's the TLDR. So, okay, all right, here we go.

Starting point is 00:55:37 You know, what's interesting about this, of, you know, of course, I can see Bitcoiners wanting to get ahead of the narrative and, you know, saying this is dirty hash power going to clean. Of course, we've made the point that like, hey, you know, it's super clean is proof of stake. It's not, you know, 99.9% reduction in energy use. But that aside, what's interesting about this is it is a regime, a nation-state-led regime cracking down on block validation. through miners.

Starting point is 00:56:05 What would this look like in an E2 staking sort of world? Right. Right. Where you don't have these large servers, like, you know, mining facilities, consuming bundles of energy. You've got a staking rig maybe at your house, right? Like, does the nation state, does an authoritarian nation state crack down on that? That feels a lot different to me, right?

Starting point is 00:56:30 Rather than a handful of companies you can go target, like you're actively targeting your citizens? Crazy dystopian stuff to think about. But like... One thing to take away from this is that the footprint of Bitcoin mining is always a liability. It is never...

Starting point is 00:56:47 What's the opposite of liability? An asset. It's never an asset. It's a liability through and through. And not only is the physical footprint, but like the energy consumption, it doesn't matter if it's green or whatever or if it's like literally solar powered

Starting point is 00:57:02 coming from a Dyson sphere. it's a footprint either way. How many people are Googling Dyson sphere right now? Anyways, energy consumption, liability. That's why we like proof of stake because you can stake your Ethereum node through Tor. And I mean, if you're a computer science expert, you can stake inside of China and they'll never find out.

Starting point is 00:57:24 Not advice, though. This is not a big deal. Don't listen to me. I'm not an answer. Look, this is not a big deal, though, for Bitcoin. I don't think. Like miners leave from China. They go elsewhere.

Starting point is 00:57:37 Right. There's a hash drop. Maybe, but we get some more decentralization out of it. All good. All good. It seems like. Good trade, but like not an asymmetric trade. Just like positive linear trade.

Starting point is 00:57:51 But it's not moving the needle over the long term. There you go. All right. Let's talk about this. Ethereum stuff. Cuban is investing in Polygon. That's her friend Mark Cuban, who's been on the podcast before. was a Polygon user and I find myself using it more and more.

Starting point is 00:58:06 He said an email. So what does he do? He invests. It's a pretty big name to draw it into a side chain layer two type project. Kind of cool. Yeah. And again, once again, it's always really cool to see Mark Cuban using this stuff.

Starting point is 00:58:18 And I kind of feel like that's been the through line of Polygon over the last month is like, oh, people just find themselves on Polygon because of reasons. You know, cheaper gas fees. Like, you know, Alve on Polygon, Polygon, like Maddoin yield farming. and then all of a sudden like, oh, I guess I should just buy this because it's real estate. It's real estate. It's a suburb of Manhattan. And if people are there, people want the real estate.

Starting point is 00:58:39 And so that's why they're buying Maddoch token. That's definitely the narrative. Let's talk about this. Dave, do you see the wall street journal front page. I don't even think it's the headline. The headline is upstart peer-to-peer crypto exchange takes aim at Coinbase. Who are they talking about? Wall Street Journal finally talking about Uniswap, right?

Starting point is 00:58:56 But this picture, dude, is hilarious. Describe this picture for people. It's not the headline. That's the headline. It's the picture. That's the headline. And this headline, the head, the real headline is bankers, meet your worst fucking enemy. A nerdy looking white guy in a unicorn t-shirt. Hayden Adams is coming to destroy your fucking banks. Oh my God. Yes. Meet your worst enemy, a software developer on top of Ethereum. It's good. Didn't ask for permission. Just built this thing. You know, two years later, it's already. threatening the banks, making the Wall Street Journal, doing hundreds of millions in transaction revenue annualized. How many assets on there? 50,000 different assets? Like crazy stuff. I love it. I love these types of headlines. Hayden Adams is like, hey, banks, that's a nice TVL you got there. It would be a shame if somebody came and took it. Yeah. Hey, NASDAQ, nice volume, guys. Oops. Oops. It's all on Uniswap now.

Starting point is 00:59:57 Oh, too fun. All right, this is fun to you. NFT.gamstop.com. Dot gamestop.com is the URL GameStop is entering the NFT game, entering the blockchain game. They're doing so on Ethereum, it looks like. With Ethereum branding. What's this? Why?

Starting point is 01:00:18 What's happening here? Do we know? I copied that address and I put it into the Ether scan and it's got a GameStop token that people are trying to interact with a contract address, but nothing's happening. I don't know what that is. But importantly, this is just a landing page, NFT.com, and it says, we are building a team. We welcome exceptional engineers, solidity, React, Python, designers, gamers, marketers, and community leaders. If you want to join our team, send your profile or something you've built to NFT, NFT, NFT, okay, NFT E-A-M at GameStop.com. Just one T. Shout out to Matt Feinstone for

Starting point is 01:00:54 for leading this goddamn charge with GameStop. Congratulations for landing that gig. Matt Feinstone, formerly at Loopering, is the guy that is leading the NFT charge into GameStop. Fun fact, GME is the only asset that I own that's not a crypto asset. And the reason why I buy it was 100% a political reason. I bought it. I bought one share at like $330, which is like literally the top when it first pumped. And I was like, oh, I like clued into the story, right?

Starting point is 01:01:22 Like, you know, fuck the hedge funds. Is that when we talked about it after the hedge fund? Yeah, right. Literally bought it as I like, I'm doing my part. And then it dropped to like $130. And I bought two and I bought two more, bought double down. And now right in this moment it's high and the short squeeze is on again. And so the price of GameStop right now is at like $240 or something.

Starting point is 01:01:43 And the fact that it's happening during this NFT release is so fucking perfect. It's so awesome. Let's see what the actual current price is right now. $240. Oh, man. This is David getting a. addicted to the Wall Street bed stuff. Different show.

Starting point is 01:01:57 It's no longer going to be defied. GameStop. We're adding a GameStop section back into the weekly roll-ups. Anyways, Matthew Fine Stone, congratulations for leading this NFT team. If you like NFTs and you want to help out GameStop squeeze the shit out of some shorts, go sign up for them and help them build out NFTs in the world of gaming. You know, whatever it's going to be built on. If Matt's involved, it's going to be on a roll-up of some sort.

Starting point is 01:02:22 So we've got that to look forward to you. And maybe the GME community will start to wake up in Wall Street Betts community. We'll start to wake up and join a defy. I think there's a kindred spirit there that hasn't been tapped into. All right. Let's talk Bitcoin stuff. Michael Saylor. Did he buy Bitcoin this week?

Starting point is 01:02:38 No, that's not the headline. I mean, he probably did. But he probably did. But he is hosting with Elon Musk a Bitcoin miners in North America sort of council, I guess. Yeah. Mining council. Not cartel, sir. Not council.

Starting point is 01:02:55 Different. Different sea word. Okay. So what's this about? This is like a handshake with Elon Musk sort of thing from Michael Saylor. I get that. What is the mining council? Overall, I'm wary that Elon Musk is still talking about Bitcoin stuff and dabbling in the Bitcoin world, but I'll patiently wait to see this play out.

Starting point is 01:03:16 Elon Musk says spoke with North American Bitcoin miners. They committed to publish current and planned renewable usage to ask. Miners, WW, don't know what that is, to do so, potentially promising. Worldwide. Ask miners worldwide to be more green. So this is a rebranding exercise. Like, hey, Bitcoin miners, like, we're going to get effed by mainstream media and public opinion about the dirtiness of Bitcoin.

Starting point is 01:03:40 So we've got to do something about it. We've got to get green. And so then Michael Taylor retweets this and says, the miners have agreed to form the Bitcoin Mining Council to promote energy, usage, transparency, and accelerate sustainability. initiatives worldwide. This is in my mind a capitulation on the green energy narrative where we have people like green Nick Carter who is fighting and saying Bitcoin mining is way more green than you think it is and it's actually going to incentivize like completely renewable green energy. Really tall order for trying to get that narrative to stick and I can't really, even though

Starting point is 01:04:12 Nick Carter has been doing a valiant effort and like praise to Nick Carter like St. Nick Carter, it's not working. It's not working. And so Michael Saylor and Elon Musk are capitulating and say like, all right, we're going to have to take Bitcoin mining and not passively just say that the narrative is green, but like we're actually going to have to make this green. Okay, well, the council of Bitcoin miners is somewhat disturbing maybe as well. Yeah. Okay, here's another through line then. This is from Mariano.

Starting point is 01:04:38 So I think he's doing some satire here, but like maybe coming to a future near you is sort of the angle in quotes. After careful consideration, your address has been flagged as suspicious by the North American Bitcoin Miners Association. Unfortunately for you, our decision is final and cannot be appealed. Thank you for using Bitcoin trademark. Powered by Tesla, registered trademark. This is Mariano's take on a possible, like, future, right?

Starting point is 01:05:07 Like, you may not disagree with this, but the fact that a cabal is forming of Bitcoin miners that is like... Not a cabal, a council, a council, sir. Sorry. Where do Kibal start? Do they start its councils? I don't know. Blurry line.

Starting point is 01:05:27 They start. I mean, Star Wars has taught us. Isn't Star Wars? They're like a council that's evil? Yeah. Okay. All right. Anyway, this is not an evil council,

Starting point is 01:05:36 but Mariano is not sure where this is going. And it would be not a good thing if a set of miners could start censoring transactions or colluding in some way to make Bitcoin a whole. whole lot less decentralized. Right. Is that a possible future here? Or is that kind of, I guess, overplaying it? Absolutely.

Starting point is 01:05:56 This is exactly going back to the conversation of footprint is a liability, right? Because now minors are under the nation state purview because they are completely just like open and known to public entities by the nature of proof of work. Like you kind of have to join this council and be a part of it, right? And all of a sudden, that's a, all these like decentralized minors are coming to become part of one single council, like where's the decentralization there? That is just an attack factor. It's like, oh, the United States government, like, wants to interact more aggressively with the Bitcoin blockchain. It'll just go to the Bitcoin mining council and tell them to do

Starting point is 01:06:35 exactly what they want them to do. Look, man, the problem is because you can't run a miner in your house. It's just not profitable to do that. So like, like readers should know, the same thing could happen with Ethereum. If we were only staking through crypto banks, for instance, Coinbase and Cracken and Gemini and Binance. And there was no ability or appetite or interest in running, validating nodes like on a consumer laptop or maybe even the blockchain didn't have that capability be the same sort of attack vector. Same sort of attack vector.

Starting point is 01:07:08 That's why decentralization of these networks is so important. Anyways, good joke, Mariana. There you go, Mariana. We made it not funny, but it was funny. All right. It's not funny. It's a funny joke. It's not funny, though.

Starting point is 01:07:21 Like, it's an existential threat to our industry. Agreed. Yeah, agreed. All right. Let's talk regulatory, traditional finance. Businesses need to report crypto transfers. That's what the U.S. Treasury is saying. If you are an exchange or some sort of crypto business and there's a crypto transfer of

Starting point is 01:07:40 more than 10K, you have to report that to the IRS. A lot of tax news in the headlines, this tax season. but the IRS is definitely trying to crack down on people who are not reporting their gains or their crypto transactions. I think that's partially where this is coming from. This does not extend to individuals right now, but it definitely does to businesses, right? This is like, like this always says, like, pay your taxes, guys. Like, it's all in the blockchain. They're going to find out.

Starting point is 01:08:05 Don't fight that fight. Don't screw with it. Don't fight that fight. But, yeah, maybe a mark of things to come. IRS getting more serious about crypto, definitely getting, change transactions into the mix right the the i want to drop this important point it's just 10 000 in and out of reporting entities like businesses right so 10 000 to coin base to jemini to cash app whatever those entities have to report that 10 000 uh you to sending 10 000

Starting point is 01:08:33 to your buddy directly peer to peer, that's not what this is talking about. However, there is something to say about this $10,000 level. I think this is also true for banks, right? So if you come and deposit $10,000 into banks, they do a report as well saying like, hey, this person deposit $10,000. Wait, do you have a bank story this week? No. Do you want to tell that story?

Starting point is 01:08:57 Okay, never mind. Here's a story I do want to tell. And once again, it's another Nick Carter story. The $10,000 limit was set in the 70. where the real value of $10,000 in like the 60s or 70s or whenever this law was created was roughly $65,000 now, right? And so this is a story of inflation as a hidden oppressive force upon the people where privacy used to be up to $65,000 in real terms. Just the big transactions. Just the big transaction, $65,000.

Starting point is 01:09:27 And like $65,000, not a lot of people send $65,000. even people that like are you know the average citizen at some point will send a $10,000 transaction yeah that's a car man you buy a car right exactly yeah yeah yeah I bought I bought a car earlier and it was over $10,000 and so like that is now a reported transaction right because I bought a car it wouldn't have been in the 60s or 70s because I wouldn't have been buying a $65,000 car and so this is a hidden hidden oppressive anti-secrecy force by the nature of inflation because the threshold for what is getting reported is nominally the same $10,000, but meaningfully is getting lower and lower and lower. And again, we just printed like 29% of the outstanding

Starting point is 01:10:11 US dollar supply in the last year. So if inflation takes up again, like all of a sudden it's going to be like $500, not in real terms, $500 transfers, everything gets reported to like the all seeing eye of Siron, which is the, you know, the nation state. Well, let's see where this goes too, right? The Fed possibility of a central bank digital currency. I'm sure. showing some like breaking news as of May 20th from CNBC. They've been talking about a central bank digital currency for a while. But like David, what's different here is like this is coming directly from Jerome Powell. Like he issued a statement about this.

Starting point is 01:10:42 So it seems like the U.S. is getting serious about it. But even if you don't think the U.S. is getting serious about it, if you're like, yeah, sure, whatever, China is definitely serious about it. And like, I don't know, I feel like it comes down to this, David. there's only going to be two types of money in the world. Both are going to be digital. It's going to be central bank digital currency. It's going to be crypto. And one is going to be completely controlled, non-sovereign by the nation state. The other is going to be free and open. And like those are the only two monies that we're going to have. It feels like it's all inevitable. You have a different take?

Starting point is 01:11:21 I think the whole possibility of issuing is like, oh yeah. Okay. I'm going to continue to sit on my hands. We've talked about this the last time we talked about CBDCs on the weekly roll-up, which is like over a month ago. We haven't talked about it in a while. But like, again, like at some point, this is a meme. Like point taken that Jerome Powell is saying this. But again, possibility of issuing, whatever. I just think China makes the U.S. react in some way.

Starting point is 01:11:44 But there is a different take on this, which is the Brian Brooks take. And he said this even Coinbase earlier this week. He's like, hey, the U.S. approach is not going to be to develop a central bank digital currency. It's going to be let the private market do it. Or like his take is let USDC and consortiums and like crypto bank digital currencies thrive. And there shouldn't be a centralized like federal reserve back digital currency. So we'll have to see how it plays out. It's almost like de facto kind of happening with some of these stable coins.

Starting point is 01:12:14 Preferable to crypto dollars. Crypto dollars. Crypto dollars. Thank you. All right. This is interesting. Crypto fighting back. Banks coin base hires a former Goldman Sachs,

Starting point is 01:12:26 executive as chief policy officer. We've seen exchanges in crypto banks hiring people from Washington. Now we're seeing them hire literal bankers to run their policy offices. What is this, what's happening here? Old boss, same as the new boss, same as the old boss, right? Like, that's why the Hayden Adams on the front of Wall Street Journal is so deadly because that's the new thing. That's what's new. Thank you. Cryptobanks buying regulated, like bankers and regulating bankers whoever regulates bankers same thing same thing we've seen since the dawn of time like buying your way into into just like a positive regulations that's beneficial for your industry like same same same same as all banks cool i i don't trust it and i totally don't trust it um yeah that's definitely

Starting point is 01:13:17 the take i do think that crypto banks and exchanges are super useful now they they can serve as a bridge some some will benefit decentralization but others will actively take it away and try to centralize and we'll become a new boss if we don't fight back with this decentralized money system. Hayden Adams on the front page. Yeah. That's what we like to see. That's the new stuff. Protocols, not bankers.

Starting point is 01:13:39 Software developers, not regulators. Cipher punks, not nation states. Let's do some drive-bys here. PayPal is going to let people withdraw crypto. That's a big step. That's awesome. Hopefully we get Robin Hood on board next. Robin Hood.

Starting point is 01:13:56 Let's get with it. Yeah, they're not listening now. They don't listen to bank lists. They definitely don't. What's this one? Apple, looking for crypto experience in alternative payments job post. Apple Payments Unit looking for a crypto-savvy biz dev specialist to lead partnership efforts. I know Apple is really doubling down on their Apple Pay ecosystem.

Starting point is 01:14:18 And the problem with payments is lack of settlement assurances. The reason why there's like one to three percent on Visa's. and MasterCard is because they don't have settlement assurances. One of the reasons that one of the big benefits of Apple Pay and Google Pay is that you have some sort of assurances that the actual payer is who they say they are because they own the device. Positive settlement insurances as a feature of crypto assets is really, really awesome and beneficial towards all payment providers everywhere. So Apple doesn't need to depend on Visa.

Starting point is 01:14:51 They can use what like stable crypto dollars on Ethereum or more likely on Ethereum L2. That's my take. Maybe that's completely not what's happening here, but that is a logical conclusion of where this could go. They definitely will get here eventually. A VC firm, One Confirm, whom we've had on the podcast,

Starting point is 01:15:11 great folks, raised another $125 million for their third fund. They are now an $800 million asset manager. Super impressive. Best of luck to one confirmation. That's going straight into DFI. I know that. It's going straight to crypto.

Starting point is 01:15:26 I know that. And what's this next one, David? Goldman starts coin-based coverage with buy rating, sees more than 30% gain. Coin did not really do so well since it initially got listed. It's taken a beating. It's down in the 200 price range

Starting point is 01:15:40 where it started, opened up at like $350 or something. But Goldman Sachs says coin is a buy, and I would agree. There you go. All right, guys, we're going to be back with some hot takes and, of course, the meme of the week. But before we do, we want to thank the sponsors

Starting point is 01:15:55 that made this episode possible. Bankless is proud to be supported by Uniswap. Uniswap is a new paradigm in asset exchange infrastructure. Instead of a cumbersome order book system where trades are matched with other humans, Uniswap is an autonomous piece of software on Ethereum, which is what Ryan and I call a money robot. No human counterparties or centralized intermediaries, just autonomous code on Ethereum. Input the token you want to sell and receive the token you want to buy. Something brand new in the Uniswop ecosystem is the Uniswap grants program is now accepting applications for grants. We have been saying this for a while and we'll say it again. Dow's have money and they are in need of labor. If you think that you have

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Starting point is 01:18:15 And if you trade more than $100 within the first 30 days after sign up, you'll be gifted a free $15 Bitcoin bonus. Check them out at gemini.com slash go bankless. All right, guys, we are back on the recap with the takes of the week. Let's start with our friend Chris Berninski. He says this, the more vested interest in existing systems a person has, the more likely they are to be, in quotes, skeptical of crypto. Keep this in mind as you read expert opinions.

Starting point is 01:18:44 David, is Chris talking about bag bias here? That's like the cloquial crypto name for it, bag bias, right? Like you only care about your. bags and you only talk about those and it seems like he's saying that hey people in the traditional finance they have bag bias towards traditional assets what's your take right yeah so this is just cognitive dissonance uh classic uh if you in your industry is about to be disrupted by crypto you're going to hate it and you're going to shit talk it and you literally can't buy it you can't buy the thing that's going to disrupt you because you can't legitimize it right so you have to talk poorly

Starting point is 01:19:18 about it and i see the same sort of effect when people miss out on Bitcoin, like, going from, like, $100 to $60,000, and they say, it's a Ponzi scheme. It's, like, bad for the environment. I'm never going to buy Bitcoin because of these reasons. And, like, the real answer is, like, you're just upset that you missed the run, and you're refusing to buy into it now. And so now you're justifying why you're not buying it, right? Chris is talking about something more, like, institutionalized, right?

Starting point is 01:19:43 Like, so bankers, you know, all the, all the industries that crypto is about to disrupt. You literally can't listen to those people. like many of them. Elite boomers, right? They've paid all of their money in the stock market, like Warren Buffett, Charlie Munger, those types. Mm-hmm. You can't, you can't listen to the powers that be because literally crypto is about disrupting the powers

Starting point is 01:20:05 that be with new institutions. So you can't listen to the old institutions. Let me flip that on you, though, okay? Because somebody from outside would say, yeah, shut up, David, because you're talking your bags too. And that what you do every week on bankless? You're into crypto because it's a giant Ponzi. It's a giant ponzi game.

Starting point is 01:20:22 You just want people to buy. They have a point there? Totally. Totally. Bag bias through and through. You guys listen to bank lists. You're listening to two. Literally no one cannot talk their bags.

Starting point is 01:20:32 But to some degree, like the reason why I'm invested in ether is for reasons. And I think they are good reasons. And so to some degree, there's at least one person or like one realm of thought that is the correct thought. And there are bags to go with that thesis. There is a correct thesis out there, and there are assets that fall in line with that thesis. And that's why bankless is a thesis-first media company. Protocoling thesis, you know, legitimacy, money-legos.

Starting point is 01:21:05 We have theses. We believe these things. Why would we not hold ETH? Right. Like, we would be biased in the worst direction if every week we're talking about Bitcoin and Ethereum and DFI. And we didn't have any skin in the game in these assets. Right. Like that's bag bias working against you.

Starting point is 01:21:22 I think what you want to have is long-term bag bias here, not short-term games, not pump and dump, long-term bag bias. That's what's called for here. The other thing I'll say, David, is like people, like one thing I say is, you know, first buy some Bitcoin and Eath to spend the next six months figuring out why they're useful. And some people have said, well, like, why buy first? Shouldn't you figure out why they're useful first? Like, actually, no.

Starting point is 01:21:48 buy a little bit first because once you actually purchase some you become more interested in learning right right like so i'm not saying go all in right away these assets but you have to have some skin in the game you have to have the incentive to learn you have to have the incentive to learn and crypto economics price number go up number go down provides great incentive to do that right so you can also have bag bias work in your favor if you want to learn about something right and like spend the time actually make it worth your while, maybe you could buy a little first and figure out why it's why it's going up, why it's going down, like figure that out. Yeah, totally. The best way to get over your cognitive dissonance about crypto assets is just to like capitulate and buy some. I had a friend who was

Starting point is 01:22:30 giving me resistance as to getting into ether like when ether was pumping from $2,000 to $4,000. And so I sent him like 0.1 eth. And I'm like, okay, here's a small little gift. You can have this eth. And like loaded him up with metamass, like, put, Ethan's wallet and all of a sudden his resistance to buying more Heath just went out the window and so then he started dumping money into either I'm like okay fine like that that's a sacrifice the point one east sacrifice to the gods now we have converted an an Heath person it's just put money in it's not it's not a bad plan right like so even use this for

Starting point is 01:23:04 defy tokens right okay defy a defy protocol you like go use it see if it works oh cool it's useful it works now maybe I'll buy a little bit and then I'll learn about it. But like just a little bit, you don't go all in on something. But then that gives you an incentive to learn more about the protocol. I think that can work in your favor. But yeah, Chris is right on there. Don't believe the media that you hear. Yeah. So the TLDR is all the institutional experts that I know don't listen to bank lists. Just by a little bit. Just buy a little bit. There you go. Here's another take. Volatility. Volatility bad. Volatility good. Here's MIPO. Crypto might be volatile, but at least it does need $100,000.

Starting point is 01:23:44 $120 billion injected into it every month just to function. Of course, the Treasury of the Fed puts $120 billion these days into the U.S. dollar market into the Fiat, the banking system. Crypto doesn't need that. It functions anyway. And the reason why crypto functions is because no one can do that, and that's why it works. That's also why it's volatile. It's a feature.

Starting point is 01:24:09 Feature, not a bug. Except the volatility. Oh, here's an interesting take. So, okay, this is for me. But, like, I saw this from a proposal, somebody in the Wi-Fi community. And basically put forward, Ban tag, put a governance proposal forward in wire and Wi-Fi saying that, hey, guys, we should use our Wi-Fi treasury to buy some ETH because we want to own the land in which we operate. And I don't know if you read this proposal, David, this is really great.

Starting point is 01:24:37 Like, it goes through, if you're a restaurant, right you don't just want to own the restaurant necessarily you also want to own the land like around your restaurant right right that's like a developed only real estate own the property traffic surface area like first like optimum real estate for where your restaurant is it's the one thing to have good food but you want to be where all the people are exactly and so he's like hey since we're here we should actually invest in real estate too and what is that real estate for yfi well they're on ethereum so the real estate is eith so made the case for the YFI community to go buy some ETH, put that in their treasury. And my take

Starting point is 01:25:17 was on top of this is, my God, DFI protocols are going to be the Michael Sailors of Eith, David. We're going to like buy all of this real estate, right, successful DFI protocol on Ethereum, then on Ethereum's roll-up infrastructure. They want to own some ETH in their treasury, right? So this is almost like the reverse ICO. Remember the ICOs? They would raise an ETH and then like many of them would sell it. This is like these aren't ICOs. These are successful defy protocols. Now they're going back to ETH and they're like, oh, we want a piece of this Ethereum economy. We want this real estate too. And we're going to pack our treasury with Eith. Kind of cool. There are so many takes to talk about. First off, here's some recent crypto culture that many people might not be

Starting point is 01:26:01 familiar with. The whole few understand mean came from, I think it came from Pierre Richard. When Pierre Richard, who's a big bitcooner, was like, oh, owning BTC is owning a piece of internet real estate, few understand. And people were making fun of him because like how ridiculous of a comparison is owning BTC to owning internet real estate. Because, you know, in Bitcoin Maxiland, literally Bitcoin is the internet, right? It's the currency of the internet. So if you own a Bitcoin, you own a piece of the internet.

Starting point is 01:26:31 What Ethereum is is literally the decentralized internet. BTC is an asset on a proof of work network. Ethereum is the internet tech stack. in a decentralized fashion and is literally a piece of the internet. And so the whole so many things that that bitcoiners say about bitcoin are actually true about Ethereum. It's crazy. But like ether as an asset is a piece of internet of equity in the Ethereum network, which is literally the reconstruction of a decentralized internet, literally real estate. Yeah, I feel like that's true. Like what Bitcoiners say about Ethereum is like, but it's also true of Bitcoin too. It's just like more true of Ethereum. I think somebody

Starting point is 01:27:09 asked you recently, David, like, I saw this a tweet from you, asked about like, hey, David, because we're going to have somebody, Preston, Preston Pish, yeah, Preston Pish from the Bitcoin community. We're going to talk about Bitcoin and Ethereum and like differences and similarities between the networks. And somebody asked you like, hey, you've had your, your Bitcoin or hat on to you before. You have a podcast where you regularly talk to a Bitcoin. You're sort of the Ethereum, and he's kind of the Bitcoiners. Like, David, what are your takeaways from that? And you just said this. It was like one line. Like, Bitcoin is dope. Eith is doper. It's kind of a take. That's it. That's it. Bitcoin's great. Ethereum's just really cool and it's a little bit cooler.

Starting point is 01:27:54 It's fine. It's kind of how I feel too. Okay, takes on this take are not done because I want to show some, a piece of David's previous writing. And Ryan, do you have that pulled up next? Is that what I see? I can. Which one is it? Oh, money game landscape. Okay, set this up for us. Yeah, okay.

Starting point is 01:28:13 So I wrote this piece in 2019. This is not too long after DFI Pulse came out. And so I wrote this piece called the Money Game Landscape and talking about how DFI apps are all in heavy competition to put ETH on the balance sheet. Balance sheet, right? And did I have, is there a screenshot of DFI pulse? Yeah. Okay. So here's OGDFI pulse.

Starting point is 01:28:35 and I use this as a metaphor of like this is literally the leaderboard of Ethereum is like, you know, at the point in time, Maker had 1.9 million eth in it. So Maker at the lead of 1.9 million points. And what is money other than a point system of who is owed what value, right? Money is a point system and all the defy apps on Ethereum are competing to put Ether on the balance sheet because Ether is the most credibly neutral points in the Ethereum world. we now see yearn, which wasn't even an application when I wrote this piece saying like, hey, we want some of that Ethereum real estate. Like, we're going to put some eth on the balance sheet. And I'm like, yes, this is the money game landscape.

Starting point is 01:29:17 Every single application is in a competition to get high scores. And that high score is scored in ether. It scored in both total locked value of ether, but then also like purchasing it on their balance sheet. So like, yeah, both these places. That article's held up, by the way. 2019, David, you're thinking ahead, man. It's coming true.

Starting point is 01:29:38 All right. The other way that that held up is yield farming. Big game to collect TVL. Yes. Now we're seeing that game on layer two. Layer two summer. Layer two summer. It's happening.

Starting point is 01:29:50 All right. This is another take. Tyler Reynolds. ETH is circled on the left. Non-cash flow, alts circled on the right. For people who are listening on the podcast, you might need to describe this. What are we looking at, David?

Starting point is 01:30:00 Yeah, this is a pretty classic chart in the crypto space. It looks like it's the classic, Here's what a classic bubble looks like, right? And so we have like this stealth phase where, you know, things are, you know, only true believers are there. But then like things start to bubble up and then there's this awareness phase. And there's a mania and a blowoff top phase. And then there's the absolute crash. This is the 2017 bubble.

Starting point is 01:30:21 This is the 2013 bubble. This is the tech.com bubble. And so what was circled on the left is ether in its first sell-off slash a bear trap phase. But then on the right is like, you know, the non-capabreys. cash flow assets. I will also say these are like the doggie tokens, right? Doggy tokens are in their bull trap phases. As in like there's like this, you know, blow off top, small crash, a little bit of recovery, but those things are, those things are dying. Those things are not coming back. Non-cashel assets, meme coins. I mean, I'm not 100% convicted in this. But I do believe that

Starting point is 01:30:57 there's a different, there's a massive discrepancy between tokens with real underlying value and real cash flows versus, you know, doggie tokens. Doggy tokens could have just had their day and then they're never coming back. Ether is in a different phase of the cycle. And the reason why we say this is because there's a significantly different cohort of people that are putting money into crypto right now. Institutions and big money are not putting money into doggie tokens. They're putting money into BTC and ETH and defy assets. All the, all the meme coins like Cardanos, like, you know, Denta coins, like whatever's. Those things are not getting allocations right now. Or, or, or, or, ever. And so there's a completely massive fissure between the two cohorts of people that are buying

Starting point is 01:31:39 these two classes of assets. This reminds me kind of of the super cycle asset, the crypto super cycle thesis that the three arrow skies were talking about, which is like you might have bulls and bear markets for specific classes of assets, right? But crypto, their thesis anyway, or this idea, is crypto is never going to globally go into a massive. of bear zone where you've got like 80 to 90% off all-time highs. I don't know if I believe that, but it's kind of the idea, similar idea of what you're saying is like, yeah, some assets might be in crypto assets where the general market calls all of these, like all of this crypto might never come back after this most recent crash. Well, others, well, to other assets,

Starting point is 01:32:26 it might be just a temporary dip and then a recovery. So on different timelines is sort of the idea here. All right. Let's go to the next one. Rethinking work. Is this a job description? What is this job description? Yeah, I think this is originally pioneered by Amin Soleimani, who made a job posting Oh Forever Gopher's Bank Chain for a meme lord.

Starting point is 01:32:46 And get coined it's following in the suit. Meme artist slash shit poster plus community manager, remote full-time job, $80,000 to $120,000. And the Nat is retweeting this image and it goes, this is a six-figure meme-making job at a legit company. No matter how silly your kids' interest seems, don't ever tell them that they should give up, give them up for a real job. Rethink what work is. Work is different now. Like memory and memes, like CMO's chief marketing officers are now chief memeery officers, right? Like get your company with the times. Get yourself a meme lord on your company's marketing team and a community manager. That's rethink the future of work is being done at home, is being done from the comfort of

Starting point is 01:33:33 computer and is being done with memes and community management and just engagement with your with the people that pay attention to your company this is just it memes are powerful right it's like i remember when the job description of like um old enough to remember the social media manager came in vogue and people are like what paying to do facebook and paying to tweet like what is this this is not a real job well now meming is a real job apparently fun fact episode number five of the bankless podcast is all about memes one of the most underappreciated bankless podcast there is i think that is a fun fact a lot of fun all right this is ooty our friend what's he doing he's tweeting about ether light is this new york times billboard new york square yeah billboard a billboard for etherlight dot org don't go there don't go there

Starting point is 01:34:17 because this is this is the reason why we're talking about this is because this is a PSA of a there's a warning it's very scammy looking uh it's advertising basically what is an iCO this is like 2017 ICO nostalgia. If you want to go and look at what an old, like 2017 ICO kind of looks like, that's what this is. This is Udi calling them out, by the way, not advertising.

Starting point is 01:34:40 I'm just going to make clear. He's calling them out. Like, this is sketchy. This is sketchy as fuck. And they're advertising in Times Square, right? And so they're latching on to the tailwinds of Ethereum, and they're using a lot of Ethereum words, right? So Etherlite's network native token, ETL,

Starting point is 01:34:56 is used to run the network starting with the, adopted proof of stake consensus mechanism whereby ETL is necessary for one to become a public validator node. In addition, ETL is used for network governance and payment of fees. Very much in using similar terminology as Ethereum proof of stake, it's got ether light as the name. It's trying to get you to deposit your ether in order to get ETL. I'm willing to bet that it's actually an ERC20 token on Ethereum. Don't fall for scams like this. Scams like this are coming. They target new people who don't know what they're listening to. They think that they can get a thousand X gains. This is what an ICO looked like in 2017. That was scammy and terrible.

Starting point is 01:35:38 So PSA, there are monsters out there and they're trying to gobble up your ether. Be wary of people that are trying to convince you to part with your ether and your other monies. Well said, David. Be careful out there, guys. It's time for what we're excited about. David. Let's start with you. What are you excited about, man? What am I excited about? Oh, yeah. Uniswap v3. Uniswap V3 is sick as fuck. Okay, so we have Amin Soleimani who tweeted this week. We're not going to pull up the tweet, but we're going to talk about something else in a second. Where Amin Soleimani says, Uniswap V3 is lit AF earned $5,000 on a $350,000 concentrated position,

Starting point is 01:36:18 a $250,000 range between ETH and USC in 16 hours. So he made $5,000 off of $350,000 in 16 hours. earned about the same on 10x, the capital with ETH you would see on a wide 4K position over the same period. This is definitely the future. Robert Leshner is just talking also about how Uniswap V3 is cool a. F, I love Uniswap V3. He says, and here's what is really cool about Uniswap V3. Ryan, go to that liquidity page right next to it. This is what so many people, is it not letting you do that? There you go. This is why so many people are excited about. Uniswap v3. Yeah, let's zoom in on that.

Starting point is 01:37:01 This is the new order book. This is the new order back. Yeah. Like the CN Tower. Right. It's like, just one pinnacle up. Instead of order books looking like a V, this looks like an upside down V. And you can see where people are placing their liquidity at different price ranges.

Starting point is 01:37:19 And so, Ryan, if you press that plus on you, we can even like zoom in more and more and more. But this is the game that people are playing. So this is the new liquidity profile for ETHUSDC. in Uniswap v3 because each one of these, each people have different ranges that they add liquidity to. This like this kind of chart where there are specific liquidity across different ranges, get used to that chart. That's the new future.

Starting point is 01:37:41 This is a new paradigm, inverse order books based on concentrated liquidity positions inside of AMMs. That is the future of liquidity. It worked. V3 just surpassed V2. Uniswap V3 surpassed V2 this week in terms of trading volume. pretty impressive then. And I keep on using uniswap. I mean, I use uniswap almost every single day. And more often than not, I'm continuing seeing more and more times where the better price is on Uniswap v3. People are figuring it out and they're figuring it out quick. Yeah, absolutely. Ryan, what are you excited about? You know what I'm going to say. Layer two summer.

Starting point is 01:38:15 Layer two summer. That's what I'm excited about. I'm excited about summertime. I, you know, we said this a little bit in the last podcast, but I think it's absolutely true. So, Binance Chan Polygon showed the appetite and is showing the appetite for EVM scalability, enterprise virtual machine scalability, DFI scalability. Now we've got arbitram coming, optimism coming in July. This is summertime. All of these side chains, roll up chains, they're going to have liquidity incentive programs. The major DFI protocols will have liquidity incentive programs on top of that.

Starting point is 01:38:52 it feels very much to me like it could be a setup of the previous defy summer where i remember that in may uh we talked with uh dan elliser about this new thing what was it compound governance token oh interesting liquidity mine yield farming yeah and then explosion right um there there is a setup for layer two to absolutely explode and i think it's because this time it's not like a hypothetical how how should we scale Ethereum type of solution? Like, do you remember plasma in 2017? It's always like, plasma's coming. State channels are coming.

Starting point is 01:39:30 This is how we'll scale Ethereum. No, this time is different. These roll-ups are launching with partners, with DFI protocols, right? Like, it might take some time to get the kink sell. But I think some of these launches will happen this summer, and it's setting up for a pretty exciting summer, like a tidal wave tsunami type of summer. They're two protocols.

Starting point is 01:39:52 They're two solutions. And importantly, optimism and arbitram, they have tokens. They are going to have tokens that control over the system. And everybody's going to have tokens. And this is real estate, right? This is really important critical real estate that everyone's going to want a piece of. And it's important, both optimism and arbitram are very, very true to the nature of an ethos of Ethereum and decentralization and crypto at large. And so they need to figure out a way to get these tokens that are an extremely high demand out and proliferated and have high,

Starting point is 01:40:20 entropy and get that the ownership of the asset also decentralized you know that the way they do that ryan yield farming distribute yield farm exactly they distribute it so get you like bankless nation get your fucking farms ready because like it's coming yeah your farms will have farms this summer farms on farms on farms but here here here's the thing that also will happen okay guys before you get too overhyped is um if layer two summer happens defy summer happens defy summer it's going to like shoot way higher than it should like valuations and token prices will probably overextend like things always do in crypto and then maybe months later I'm not sure there will be a crash there will be a pullback as well right so like again you got to approach these things from a long-term

Starting point is 01:41:13 perspective as well but I think it makes sense to get started try these protocols out this is the next frontier, right? So like we have Bitcoin first frontier. We have Ethereum, second frontier. We have Defi, third frontier. Next frontier, fourth frontier is layer two. Go explore. Defi on layer two. Yeah. Defy on layer two. Go explore guys. That's the message. I'm excited about that. Get your farms ready. And I think the alpha that I think is true is that it's going to be much better to farm these tokens and it is going to be to purchase these tokens. Go farm them. Don't buy them. farm them. Except for taxes.

Starting point is 01:41:51 Except for tax. Is that true? Yeah. Oh, yeah, I guess so. Because you can tax on income, right. Mm-hmm. Yeah, not fun. Anyway, all right.

Starting point is 01:41:58 Memes. Means the week. David, which meme are looking at? We are looking at a four-panel meme. We have an angry pigeon being offered a cracker. And that pigeon is yelling at that cracker. And that pigeon is BTC Maxis, Bitcoin Maxis. And that cracker is defy.

Starting point is 01:42:14 And the pigeon is yelling, get that thing out of my face. And then, of course, because it's a pigeon, it eats the cracker. and so it noms on the cracker a little bit. And then it has this uh-oh moment, this awakening moment, these eyes go wide moment. And all of a sudden, it falls in love with the cracker. And you might think that this is a political meme,

Starting point is 01:42:33 as in we are telling Bitcoin Maxis that they need to love Defi. It's kind of true. But they can still be Bitcoin Maxis. You can still be a Bitcoin Maxi and use Defi. And in that same vein that we were talking about cognitive dissonance where like Bitcoin Maxis want to shit on on DFi, because it's a threat, they feel it as a threat to Bitcoin. You don't have to, you don't have to feel that.

Starting point is 01:42:55 You can use defy. I know that you're not the only asset that you own is Bitcoin. You also have cash in the bank. See what it's like to go lend out that cash and return an interest rate while also yield farming Madic tokens on Polygon or something, right? You can use defy and still be a Bitcoin maxi. It's not blasphemous. It's okay.

Starting point is 01:43:13 Also, look, guys, Bitcoin is the original defy. I, like, I believe that. I see that all the time, peer to peer, you know, no intermediary, transmission of value. That is defy, right? But like, don't just stop there. Go try out the full spectrum of defy.

Starting point is 01:43:31 And I think what this meme is saying is like, you might fall in love with it. Might fall in love with defy. Plus, you can use some versions of, I know it's compromised, WBTC, like rent BTC, whatever. You don't have to use all of your Bitcoin bags, but you can still have Bitcoin denominated yield farming on DFI. Go try it out.

Starting point is 01:43:46 Bitcoin could still be your store of value. All right, David, that is the meme of the week. I think we are going to end with this. A moment of Zen. A moment of Zen? Is that what we're calling this? That's what it is. It's hilarious.

Starting point is 01:43:58 Enjoy. We don't have any time, room for disclaimers, huh? Do we care? I should rewind that. Okay. Say we're going to lead out with a moment of Zen, so stick around for after the disclaimer, but here's the disclaimer.

Starting point is 01:44:14 Yeah. All right, guys, we are going to lead out with a moment of Zen clips to stick around for that especially if you're on youtube but first disclaimers none of this was financial advice eat is risky bitcoin is risky defy is risky you could lose what you put in but we are headed west this is the frontier it's not for everyone but we're glad you're with us on the bankless journey thanks a lot and now the moment of zen guys these scam coins are getting so out of hand someone just shield me this today 27 trillion in circulation unlimited supply cap There's only one node, so it's completely centralized.

Starting point is 01:44:56 25% of the supply has been minted in the past six months. And last but not least, the top 1% of holders own 30% of the supply. No, I'm just kidding. That's not a coin. That's the US dollar.

Bankless - ROLLUP: 4th Week of May (Uniswap WSJ | Arbitrum Launch | Gamestop NFT)

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