Bankless - ROLLUP: 5th Week of December

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

Starting point is 00:00:51 assets using the Zirion app, using an exchange aggregator in the background to make sure that you always get the best rates. You can even use the Xerion mobile wallet to add your Metamask or Argent or another Ethereum address right into your mobile wallet so you can see your portfolio and engage in Defi on the go. Here I just loaded up my Argent wallet and now I'm going to load up my Metamask as well. And Zirion will do the same thing. It will add all of my assets and wallets together all in one space and give me a portfolio summary of what's going on. Adding wallets is trivially easy. If you already have a metamask, you can get it right into the Zirion app and it can sync with your desktop app as well. And the best part is you can also

Starting point is 00:01:30 buy ether right into the app itself. Use the Invest tab to look at all the things that you have invested in as well as other opportunities and coming soon to the Zirion app is the ability to buy and sell your assets straight from your mobile device as well. So download the app. It works on iOS and Android. Go to zirion.io. Plug in your wallets and get a historical report of your portfolio over time, as well as a comprehensive breakdown of all the assets that you own and how much yield they're generating for you. We're also brought to you by Monolith. Monolith is your cool new defy account, your defy checking account, except the cool thing about the monolith defy account is that it gets software updates, right? You actually get to increase the usefulness of this

Starting point is 00:02:15 over time. So here are some of the features. Monolith is a smart contract wallet with a lot of the features that you would expect if you've come to know defy and what it is, You can add money to it. You can put that money to work in compound and accessing yield. But you can also swap through Uniswap. What was cool with Monolith is that they will send you a very sexily monolith visa card that connects to your Monolith smart contract wallet on Ethereum. So it's a really awesome tool to live a bankless life with a savings account that gets software updates.

Starting point is 00:02:49 So this is something that you're never going to find out in the real world, but you can still do real world things with real money and buy your groceries. So that's just fantastic. Coming soon to Monolith, actually already here to Monolith, is now you can buy, die and get it sent to your wallet directly, right? So it's also being an on-ramp. So you don't have to go through your centralized exchange like Coinbase or Gemini or wherever. You can just go straight from your bank account right into your Monolith checking account smart contract wallet.

Starting point is 00:03:18 So check them out at Monolith. thought XYZ. David, it's the fifth week of December. What are we doing today? We are rolling it up. The crypto industry moves so fast. So we are rolling up the last week of December, the last week of the year and injecting it right into your brain so you can stay up to speed with this crazy world of crypto. Happy Thursday morning, everyone. This usually comes at you on Friday, but we are releasing Thursday due to the holidays. We release it on both YouTube and the podcast. So catch it in both places. David, how's your Christmas, man? Absolutely, fantastic.

Starting point is 00:03:51 Well complimented by the number go up of crypto prices, which is definitely going to be a topic of today's roll-up as well. Did you see what I'm drinking from? Oh, I did not. Show it to me. Show it to me. This is my wife's gift to me. Nice.

Starting point is 00:04:04 This is a coffee cup gift. All right. For the listeners on the podcast, it is two tokens, one's Bitcoin and one's Ethereum, and Ethereum is running saying keep up, old man, and Bitcoin's got a cane. I love it. She thinks this crypto stuff is weird, but she got me. an Ethereum Maximilist coffee cup and that cracks me up, dude. All right, Markets, let's get right to it. You alluded to it, David, but Bitcoin price go up. Let's take a look at the charts.

Starting point is 00:04:30 Yeah, Bitcoin is flirting with $29,000 at the time of recording. That is obviously an all-time high for Bitcoin. I would not be surprised if by the time this is getting into your ears, Bitcoin has pierced $29,000. Ether is moving above $750.50 is currently at $754 at the time of recording. That is really, really just very high prices, very high prices. Ether at $750 is just above the 50% mark from its previous all-time high. So it feels like it's gone up so much, David. So Bitcoin is obviously well past its all-time high.

Starting point is 00:05:10 It's only 10% or more past its all-time high. But ether is still down 50% from its all-time high is what you're telling me. Yeah, and I don't really ascribe too much weight to all-time high prices because these cryptos didn't spend much time there previously. But yeah, like we still have a long way to go to breach the all-time high for ether price. That is hilarious. But both are going up, not quite in locked step. I think Bitcoin is a little bit ahead, but ether has had some very good days over the past week as well. What's happening in defy land with total locked value?

Starting point is 00:05:43 Yeah, we are up from $14 billion to $14.1.4.1. $104 billion still ranging in that $14 to $15 billion range. The DPI token, the index token for DFI, is up from $108 to $116.5. Do you think we are in for a blow off the top at some point here? It just can't keep going week over week with these like 20%, 30% gains. Yeah, yeah. And I mean, that is the symptom of a bull market. I feel like the bull market happens when, uh,

Starting point is 00:06:17 don't happen and number continues to go up. However, I'm not a trader, but I do listen to traders and traders are very, very focused on the 20-week moving average, especially with Bitcoin. Because in bull markets, even with bullish attitudes, we always retest the 20-week moving average. I don't have those figures off the top of my head, but I do know that if we had a retracement back to the 20-week moving average, which happens all the time in bull markets, that would be a very, very steep drop. That would be like ether going down to a I think like $450 and Bitcoin going down to like almost like $15,000. Like less almost half of what Bitcoin's price is.

Starting point is 00:06:56 Okay. So what you're saying is like we could we could be in for a really steep drop, right, David, yet still be in the bull market. Yes, yes. That's exactly right. What I'm saying is we are really, really overextended. And I'm still bullish. I'm not selling.

Starting point is 00:07:12 I'm not usually a seller. But I'm, I'm precariously noticing how far away we are. from the 20-week moving average. Things have moved really far, really fast. I'm still bullish, but I'm really cautious. Also, the market did have a lot of catch-up to do from 2018, 2019, particularly the price of ETH. So it's not surprising that we're seeing these numbers, but we will see what happens in the weeks ahead. I'm pretty confident we're going to end 2021 up, though. We will see what happens. There's also, David, 2.2 million ETH now locked in the staking contract in ETH too. That's like 1.6.

Starting point is 00:07:47 $5 billion, something close to that. How crazy is that? Yeah, that's pretty cool. And people are bullish on ETH2. And this is just really good. People are becoming woke to the yield on ETH returns. People love Bitcoin for their constrained asset, supply asset. And ether is that same thing, but with yield. And so constrained supply, but yield is something that is really interesting to investors. And that's why we are seeing the ETH two deposit contract receiving a bunch of ETH. While we're talking about the market, we should talk about the future Coinbase IPO. The FTX futures options market has a coin base sort of derivative synthetic going. And it's trading it over, it's like value in the Coinbase at over $50 billion.

Starting point is 00:08:35 If Coinbase gets listed, not IPO, in the $50 billion range, how bullish is that for crypto in 2021? Yeah, this is going to be a really awesome story to follow. Coinbase will be the first vehicle on public exchanges that offers you like pure exposure to the cryptocurrency industry, right? Like micro strategy with it's like backdoor Bitcoin ETF still has like this software business in the front, right? It's still something else. Coinbase is actually selling shovels to the crypto industry, investors like that. I think that $50 billion valuation is only going to go up as crypto prices go up as well. As the Cryptomania works into the mainstream, works into legacy markets, I think a lot of that is going to be reflected in the Coinbase IPO price. I think it'll be really

Starting point is 00:09:23 well time for Brian Armstrong. And you mentioned sort of, you know, FinTech in the front, but defy in the back. That's the crypto mallet, as we call it, the Defy mullet. Coinbase is definitely in that space. It looks institutional on the front side of things, but it is playing around these crypto and D5 protocols, which is good and bullish for the space, I think. All right, that's market. David, let's talk about releases. I think the big release this week was the one inch token. So everyone got airdropped who used one inch. I think you had to use it like four times in the in the past three months or at least one time before September 15. They got air dropped one inch tokens. Tell us about this. Yeah. So this is just like uni, except one inch is a little bit more niche.

Starting point is 00:10:07 it's a little bit harder to use. It's a little bit clunkier UI because that is because it's a Dex aggregator, right? So it's a centralized service aggregating a bunch of different prices from a bunch of different exchanges and then giving you the best price in return, right? And so they eardroped you a token. I'm not too privy on the details of the token. It is some sort of governance token. But if you qualified for the token, you got something like 1,0801-inch tokens,

Starting point is 00:10:34 which was worth roughly $2,500. So roughly double the uniswap air drop. And I think the reason why it was it was so much more in dollar terms was because so many fewer people had used one inch versus uniswap. Yeah, it's it's a pretty phenomenal air drop though. But like one thing it tends to incent, I think, is for defy users to create all sorts of different wallets. Like people see anirdrop like that and they're going to go out for, you know, get ready for the next ones, create all of these different wallets so that they can look like they are a separate user and get more, more totally. So it's a strange incentive as far as that goes. Although.

Starting point is 00:11:11 So that's actually why one inch did differential rewards if you used it before September 15th. September 15th was the date that Uniswap token was released. And so if you wanted to game that, you wouldn't have known that that was a game to play before September 15th. So that's why they did that differential reward. Did you get any one inch tokens, David? I got some one inch tokens, yes.

Starting point is 00:11:32 What did you do with your? Which is funny because I literally made, I have literally made one trade on one. I was the minimum for entry, right? Uh-huh. I dumped it for Eth. You dumped it for Eth? Okay. Well, you know, I got some one-inch tokens to you.

Starting point is 00:11:46 I did the same thing. Part of the reason why it's like fully diluted valuation of one inch at the time when it was AirDrop was like something of $4 billion. $5 billion. Yeah. Right. Doesn't make sense from a, from a valuation perspective to me. So, of course, I think a lot of those one-inch tokens ended up in the reserve currency of D-5,

Starting point is 00:12:04 which is Eith. Not a big surprise. David, let's talk about this. Haseeb, our friend Haseeb, had a fantastic, he's venture capital, spent on the bankless podcast before. He had a really good take on stable coins and regulations. I think this image maybe sums it up. Did you read this article?

Starting point is 00:12:19 I have not read it. It is in my queue. Okay. Well, it's a really interesting article. And Haseeb really talks about an evolution of stable coins. But he talks about the first pure crypto era before stable coins where you just had Bitcoin and Ether. And then he talks about the second stage, which is roughly, you know,

Starting point is 00:12:37 2017 or so, the age of tether, and that's kind of the age that we're in right now, he predicts that regulators are going to crack down on these tether type coins. And what we'll get is sort of a regulatory age of stable coins, where we might get things like Libra and USDA, and these things take control. But eventually, he thinks regulators will clamp down even hard on the regulated stable coins. And eventually, we will enter a reign of the DC. centralized stable coins. So, you know, protocols like die will make a comeback and maybe new decentralized algorithmic type stable coins will take shape and form that are outside of the grasp of regulators. Super interesting set of predictions. I think very timely, given all of the stable

Starting point is 00:13:24 coin type murmurings and regulation, we have heard about recently. Any takes there? Yeah, it's interesting to see all of the coming regulation around crypto dollars stable coins coming. And also these experiments going on. If you've been paying attention to this world of decentralized table coins, you know about the dynamic set dollar, empty set dollar rye, and a few other ones. There's another, a few other ones I'm missing as well. But there are a bunch of experiments going on with how to generate a new form of decentralized, trustless stable coins. People are pointing at die and saying that there's a lot of USDA backing die. And if the prediction that USC is going to become heavily regulated, that impacts die, which means we need more options in our trustless stable

Starting point is 00:14:09 coins than just die. And there are many, many experiments coming to fill that void. I think that will be a very cool story to follow in 2021. Yeah, totally agree. I think this is a good model for how stable coins could evolve. So keep your eyes on that. That's Haseeb's thesis. We'll include a link to that in the show notes. The block put together a timeline of defy events that happened this year. Anything pop out for you, David, like anything worth highlighting? Man, this year's been such a blur for me. Like so much happened. But why don't you pick out a few of the highlights here?

Starting point is 00:14:43 Yeah, this is just like, as somebody who's been living and breathing crypto, especially in 2020, this was just like a trip through the pass of 2020, which both seems to have flown by and also taken forever somehow at the same time. I don't really have any special takes here. It's worth just going and checking out the graphic. This has a graphic to view if you guys like visuals rather than text. And so it definitely worth to check out. It will also be in the show notes. Just a recap of last year, really. It talks about the uniswap drop. It talks about DFi

Starting point is 00:15:10 summer. It talks about AVE, all of these things that happened that were sort of a blur from the year that was crypto in 2020. David, another protocol launched Open, which is a DFI options protocol. They just launched their V2. Any takes on this? Yeah, I think another important story of 2021. is trustless decentralized, protocolized options on Ethereum. We're seeing a race for this as we speak right now. The race is already hot.

Starting point is 00:15:40 Open is not the only team going after it. There's also Hedgic. Andre also released something as well. We'll see if that turns into anything real. 2021 decentralized trustless options on Ethereum. It's totally going to happen. Here's another one that launched just last week called Primitive. I haven't had a chance to explore that,

Starting point is 00:15:58 but that's yet another that we're talking about. going back to maybe a story from from 2020 as well. Yam, the original food token, the food token that started it all, started of course, with an ample fourth type rebasing mechanism. People are familiar with what that is, you know, it's a little bit of a gimmick, but it's kind of a way to, I guess, make the appearance of a token like Yam to, like, to make it appear like it tracks a dollar. It doesn't really supply fluctuates.

Starting point is 00:16:28 but they just turned their rebasing feature off. So Yam, of course, became a food token, which became a Dow. I don't know. If you don't know what I'm talking about, David, maybe you could explain this a little bit better. So there's a lot of history here. Yeah, so Ampleforth created rebasing, and then Yam took that rebasing mechanism and turned it into a way to add value to the treasury. And then Yam turned into a Dow.

Starting point is 00:16:55 Yam is a governance token with a rebasing mechanism built in. I think the governors of Yam just decided that they just had it with the whole rebasing thing. They were tired of like the supply of yams that they own keep on changing, right? And like that was annoying. And it's difficult to operate with. And at the end of the day, I think like they thought that the rebasing mechanism wasn't really adding much value back to the yam ecosystem. So they just decided to ax it.

Starting point is 00:17:18 And I think what's really cool about this is the collective governance decisions around something like yams to make a coherent decision with each other saying, yeah, we don't want this anymore. Let's like, let's do something new. And so like, Yam started as this rebasing mechanism that generated a treasury. And now it's turning into something else, which means that like what yams really is is completely decided in the social layer, right? It's completely a governed protocol. And it's up to the governors to figure out how to make Yam more valuable. And they're clearly ready to cut off anything or add anything to make that happen. Yeah, it's kind of a cool story. I think. We'll be excited to see how this

Starting point is 00:17:57 evolves because now that they have this capital pool, you talked about the YAM ecosystem. They're actually launching products on the YAM ecosystem. So these are like DFI products. One is called degenerative finance. They also have like an insurance product called the umbrella. I've been monitoring this a little bit. They're also taking a part of their treasury and like investing it. So they've they invested in the, the DPI index as well. So they're they're taking this treasury. They're making it more valuable. This is kind of what any capital pool will do. any kind of like, I guess, corporation in the real world might do. And it's a very interesting, I think, model for what a decentralized autonomous organization capital pool on Ethereum might

Starting point is 00:18:39 do in the future. David, I think that's what we have time for as far as releases. We should jump to the news. I think one big news item of the week is in, I guess, the good gov section. We've got a new SEC chairman who has been appointed. So bye-bye. Jay Clayton. Bye, Jay Clayton. He's been around for most of my tenure in crypto. Always kind of like the face of the SEC about to pounce on crypto. Now there is a, according to reports, I don't know much about this, the gentleman,

Starting point is 00:19:13 the new SEC chair, but apparently he is very pro crypto. And he takes here. Yeah, nothing, no takes here. It's interesting to see a new SEC chairman. Getting people that are pro crypto in regulatory bodies is really. really important and really, really good. And this is a really important regulatory body to have a pro-crypto person inside. We say pro-crypto. And it's interesting, the SEC at the same time is, of course, launching a pretty massive lawsuit investigation, et cetera, against Ripple, against

Starting point is 00:19:42 X-RP. Hey, that's pro-crypto. XRP isn't crypto. That's what I would say, right? Yeah. So they're going to be pro-cropto, hopefully, but, you know, maybe not pro-all-all-all-all- the centralized shenanigans that happen in the crypto space. Keep crypto crypto. In the badgov category, though, we've got Manusian. And Jake Trevinsky published this. This was kind of over the holidays. I was looking at a little bit.

Starting point is 00:20:11 But apparently FinC, the working group under Minition, has issued another statement this time calling for on-chain KYC, basically to any crypto wallet, any eth wallet, any unhosted wallet as they they would call it that have stable coins in them. So of course, on-chain K-Y-C at the Ethereum address level is not possible. It's not part of the Ethereum protocol. But Manusian wants it to be. They could submit an EIP if you really wanted to. I would invite Minution to submit an EIP to add that and maybe we will consider it. Well, what's very interesting here is not only the lack of feasibility and technical feasibility, right? They seem to think that Ethereum accounts,

Starting point is 00:20:57 Ethereum addresses are similar to banks. And that because the banking layer has an AML KYC function, that a protocol like Ethereum would have a KYC function. But of course, that is not built into the underlying protocol of Ethereum. And never will be because the social layer will reject it. This is, I think partially concerning because this is what many of the kind of big bankers like Manusian really want for this space. At the same time, Jake says it's not enforceable at this point in time, but it just shows where their head is on this. Yeah, if you get down to it and

Starting point is 00:21:36 you can go into the nth degree, what Manusian is asking for is to have private keys, have KYC data embedded in them somehow. Not possible, not possible. And what's concerning to me is that they are trying to get rules passed, which again, aren't possible because they're using frameworks from the legacy world to try and make rules about a new world that they don't understand. So they're not even bothering to like ask, is this even possible before they write a rule? It's fucking crazy. Yeah, it is. And here's what you need to do, guys. So we had this conversation with again, Jake Trevinsky last week on State of the Nation. But there is a FinC proposed rule out there that is not quite as severe as what we just said, but requires, requires exchanges essentially to

Starting point is 00:22:22 implement AML KYC type function for any unhosted address. If you're withdrawing from a Coinbase or something like that, they would have to identify you. There's this comment period that has just opened up. We talked about it with Jake. And what we need you to do, what you should do, is submit your comment. You don't even have to be a U.S. citizen to do this. Jake has a great threat on how to construct a good comment. It shouldn't be insulting. It should be fact-based. I submitted mine on Monday. It was very, very much basically framing the issue as the U.S. would be left behind if it didn't embrace defy on behalf of kind of a crypto investor, crypto entrepreneur. This is kind of my take. So submit your comment. This is how we use our voice to take action

Starting point is 00:23:08 in the traditional, trusty old legacy nation state. It still is important that we do that so that we don't get regulatory requirements that are bad and set the space back and try to stymie the space. Yep, agreed. All right, ETO, IPO rumors. So do you know much about ETO, David? Yeah, they're in an exchange like Coinbase. They have it a couple extra features, like a social trader feature that they have pioneered. I think the big story is, is that Coinbase is not going to be the only crypto IPO of 2021 if this rumor is true. And that makes me, ask the question, what other IPOs are going on behind the scenes? Yeah, exactly. So Ito is rumored to possibly IPO. There's probably a list similar of other similar, like BitGo might be one, for instance,

Starting point is 00:23:57 other similar size companies that might follow Coinbase's lead and IPO. Could be an interesting year in the public markets from that perspective. Well, we're talking about Coinbase. Coinbase was among the first to delist XRP, followed by Binance, followed by Bitrex, followed by trading desks everywhere. What's going on here, David? Yeah, so this is bad for XRP. As a currency, XRP is designed to be extremely liquid and extremely available. And having it delisted from, you know, the biggest exchange in the United States and then from

Starting point is 00:24:34 Binance, U.S. and also from Bitrex and then also from trading desks. I don't know how you achieve the goals of being an extremely liquid crypto assets without having any exchanges. That doesn't seem to make much sense. Also, the XRP asset price is like plummeting. It lost like 25% or something in the last week. So you also don't get liquidity when you're, when number go down. So not a good week for XRP.

Starting point is 00:24:58 And so why are they all delisting, David, for folks that have kind of not followed things up to this point? So the SEC last week came out and said that they are going after Ripple, the company, because XRP is an unregistered security. and there's also a bunch of extremely damning statements coming out of Ripple leadership, talking about just how to pump and dump the coin, basically. It has been basically the explicit strategy of Ripple to pump the coin, which I guess if you're trying to make an extremely liquid currency, that makes sense because you need a number to go up to be liquid,

Starting point is 00:25:32 but it's the way that they did it. And also, there being a centralized issuer makes that, you know, not good, right? information asymmetries between the buyers and sellers and just a bunch of whole host of just like nefarious activity that you just don't want to see happen and yet they did it anyways. I've got a hot take here that we'll get to in a little bit. But remember this, mass de-listings of XRP are happening and it seems like they're accelerating as well. There's also another sort of defy protocol hack.

Starting point is 00:26:01 This is the cover protocol, which as I understand it, David, is like an insurance defy protocol that's supposed to be protecting some of the defy critical assets. What was the attack? What happened for those that missed it? Yeah. So this was an exploit in the cover token. There is a token that goes with cover. And the attacker managed to do an inflation bug mint. Right. And so he, the or he or she just minted something like four quadrillion or quintillion tokens. Right. And so basically infinite and basically infinite. And so when you have basically in, numbers of tokens, you can take those tokens to any AMM and then drain the AMMs. And so what the attacker did is they minted basically an infinite number of tokens,

Starting point is 00:26:46 took them to Uniswap, took them to balancer, sold them into the AMMs to drain all of the other tokens on the other side, which would be ether and then I think also some stable coins. And then what's really interesting as the tweet that you're showing, the attacker was able to drain 4,350 ETH. and then in a transaction, he sent it back to the covered deployer address. So he gave it back. So let it be known, he still did damage because the token price dropped, but he gave what he quote unquote stole.

Starting point is 00:27:17 He gave that back. So people still have lost because the trust in the cover token, the value of the cover token dropped, but at least that he gave the ether back. Interestingly, if you hit that click to see more button, Ryan, on the bottom left, you'll see a note from the attacker that says, oh, maybe, maybe I can't see it. Maybe it was in a different tweet.

Starting point is 00:27:39 The attacker wrote, next time, like, fix your stuff yourself, idiots or something like that. It was like a kind of a funny, funny, but pretty mean note from the attacker saying, you know, fix your shit next time. So that's pretty funny. Sorry to anyone that got burned by this. But hey, at least he sent the ether back cover right now is figuring out how to redistribute the ether back to the people that lost money. It's, Defi truly is the Wild West. This kind of stuff happens and it's, uh, it's so bizarre. So the hacker

Starting point is 00:28:09 gave back $3.2 million. What thief do you know steals millions of dollars and same day turnaround anonymously like gives it back? This space is so strange from that perspective. Like the unexpected tends to happen almost all of the time. I think if you have these sorts of skills where you can, you can know how to do this. you probably have a decent amount of money in the space. Those are very specialized skills. I bet you he didn't really need the money. And maybe at the end of the day, what kind of hack this was? It was a black hat, but was it a gray hat?

Starting point is 00:28:45 Because he gave the money back. I don't really know. He's willing to do some harm, but not all of the harm. Very interesting. Some people just have a fun time playing with real people's money, and I guess they enjoy that. That's why we call this guy the frontier. There are risks out there. Be careful.

Starting point is 00:29:00 this was a relatively newer D5 protocol, and this kind of thing can happen to, especially to newer protocols, but also even to more established protocols from time to time. So be careful out there, of course. If you want to live a bankless life, you need to get a hardware wallet. There is no alternative for storing your crypto in a self-sovereign fashion. That's why I have four ledgers that I use to manage my different crypto assets using the Ledger Live account as well. Ledger Live is like your home base for managing your Ethereum, Defy, and crypto accounts. It does a really good job of aggregating all of your different Ethereum wallets if you are the type of person that uses more than one, but you can also add other cryptocurrencies like Bitcoin or Cosmos or whatever your preferred

Starting point is 00:29:45 blockchain is, and then it will display an aggregate portfolio of all your accounts at the main page. One thing that Ledger is doing a really good job of is enabling all the money verbs that me and Ryan talk about with the Bankless Gilcube enabled in the Ledger Live app. So right now in the Ledger Live app, you can buy, sell, lend, swap, and stake your crypto assets, which is doing a really good job of fulfilling all of the money verbs in the Bankless SkillCube. Something that's new to Ledger Live is Ledger Swap, where you can swap assets one for another directly inside the Ledger Live application, ensuring trustlessness in your financial activity on Ethereum and on Bitcoin.

Starting point is 00:30:23 If you want to learn more about what you can do with the ledger, go to the blog post The Power of Ledger on the ledger website, where they share some of the more advanced things that you can do with your ledger that you might not have known about. There's a link in the show notes that will take you to the ledger shop where you can get your preferred ledger hardware wallets. I personally like the Ledger NanoX, but I also have both. They're both great options. When you own a ledger, you own your own assets in the way that they have been designed to be held by the user and the user alone. So go get your ledger today to make sure that you are as self-sovereign as possible. The bankless state of the nations are brought to by WIREN.

Starting point is 00:31:03 WIREN is DFI's first self-building community-run project, which I just get really, really excited about. Wynne is a system that seeks out yield in DFI, and it does that in a number of different ways. A very aggressive way is with the vaults where you can deposit your preferred asset of choice, and different DFI experts will come in and generate a strategy for what to do with your deposited token, right? and so it'll go find ways to get yield in that deposited token in Defy. For those who want to just earn yield on their stable coins, the Earn system is for you, where you can deposit your preferred stable coin,

Starting point is 00:31:39 and Y-Earn will go and figure out which money market on D-Fi, and D-Fi is producing the best interest rate, whether it's D-Y-D-X, it's compound or AVE. It looks around D-Fi to see where the yield is coming from, and it directs stable coins automatically so you don't have to. Check them out at y-earn. to get started. And also check out the stats page to see what other people are doing as well. David, let's get to some takes. And I want to start with DC investors' 20-21 predictions.

Starting point is 00:32:06 Since we are beginning 2021, this is the time where everyone takes out their crystal ball and starts making predictions. I enjoyed DC investors' predictions on ETH. Should we go through some of these? Let's do it. All right. So what's the first, David? Number one, institutions are coming and many will start to buy Eath. Why, D.C. asks. Liquidity. plus CME futures, plus reflexivity as the number two asset. And then also the narrative, all the apps being built on Ethereum, therefore you might as well invest in ETH, and then also the building of Fiat on ramps

Starting point is 00:32:39 and also flailing competitors, a bunch of different variables that are all contributing to why D.C. thinks that institutions will come and buy ETH in 2021. What do you think? Agree, disagree. Oh, do I even need to answer that question? Absolutely agree. That makes complete sense to me.

Starting point is 00:32:58 I do think eth is an asset that has like two engines of growth, which is pretty unique. It can go the institutional engine of growth the same way Bitcoin is growing with CME futures, right? It's not a commodity or it is a commodity in the U.S. And it can also, it also has the DFI engine of growth. So I totally agree too. D.C. is right on there. Having optionality is really important. And that's what makes you, Heath compelling.

Starting point is 00:33:23 Exactly. What's his second here? Defi will explode again, starting with a big surge in Q1 and again in Q3. So that's a very specific prediction from D.C. here. He says the emphasis will shift from food tokens to synthetic assets, financial contracts, and collateralized lending. Financial contracts, maybe he's alluding to the growth of options as we were talking about earlier in this podcast.

Starting point is 00:33:48 And I guess with synthetic assets, he's talking about things like synthetics and UMA, collateralized lending. We all know what that is. He says, this will be fueled by centralized exchanges, pooling customer funds to allow for small participants. Interesting. Interesting. That is a take I have not yet heard before.

Starting point is 00:34:06 Well, is that a little bit of Protocol Sync thesis, basically, where, you know, crypto banks start building on top of these protocols and they'd become a user onboarding source for DFI protocols. And I guess D.C is saying that this, this is going to happen yet again. again in Q1, that's pretty soon, and also potentially in Q3. So, yeah, DFI is going to have its day. Another DFI summer, I suppose, is what he's saying here. I'm down. All right. Let's talk about this third one here. What is it? L2 will take the main net by storm heating up in earnest during Q3. DC getting really specific with the timeframes here. These will be based on roll-up

Starting point is 00:34:47 technologies and will help Ethereum not only scale to more users, but also create far better U.S. and allow for new services altogether. I do agree with DC here. I think that the growth of quote-unquote money Legos that we've seen in Ethereum so far is going to extend out to roll-ups. People are going to get really creative with how to make roll-ups interoperable and fluid and liquid with the main chain and other roll-ups. I think the creativity that we see in Defi is going to get extended into the L2 ecosystem,

Starting point is 00:35:15 and that's definitely going to happen in 2021. To me, David, this has got to be the year roll-ups and Layer 2, Ethereum Layer 2, really delivers, right? Because like it seems like every year, it's not only Ethereum, but also Bitcoin, there's some bullishness on layer two, something, right? Like every year for Bitcoin, it's like, this is the year of lightning. Oh, next year. This is the year of lightning. Oh, next year. But Ethereum, to be fair, has had some of the same things, right? Stage channels. You know, do you remember when Raiden was kind of all the rage? You just go to scale Ethereum. Then there was plasma. And now the Zykeyes is roll-ups. It feels like roll-ups have the most

Starting point is 00:35:52 substance. We're seeing real world solutions start to be deployed, but we're not seeing the killer use the killer app, the killer roll up, the killer layer two at this point in time. Do you think this is a do or die year for if you're in layer two? Well, we all got, we all felt the pain of super high gas prices towards the end of D-Fi, DeFi summer 2020. And that was definitely what incurred this rage into L-2s and roll-ups as well. And I think the difference between like, you know, oh, it's different this time. This is the year of, you know, this scaling tech. Well, we never have had like prolonged demand for, for L2s as we've had recently. And we actually kind of lost it, right? Defy summer ended and gas prices aren't, aren't, you know, low, but they're

Starting point is 00:36:39 definitely not high. If the, if 2021 is like 2017, gas prices on Ethereum are going to absolutely dwarf what we saw back in Defi summer 2020. And once again, that will generate the impetus for getting people onto L2. And so I do think that this time is different. All right. We will see if that prediction proves to be the case. Let's get to number four, David. What's this one?

Starting point is 00:37:02 Eath will establish its brand as a programmable store of value, reinforced by defy's deposits and staking in ETH too. This will propel ETH on its inevitable journey to become the world's first programmable macro asset. And over five to 10 years, the implications will be staggering. Yeah, this is the same drum. been beating on the bank list program for a long time. D.C. is right there with us. People are going to come to understand ether as a macro asset alongside Bitcoin. That's going to get people really excited.

Starting point is 00:37:33 Very good. All right. The last but not least, can you read out this one? EIP-1559 will launch onto Ethereum 1X, introducing the world to what truly could be deflationary ether. This reinforces ether as a store of value, ending discussions around ETH as endless supply and start to have conversations around why proof of work hardcaps are unworkable. Ooh, that last part is spicy. Interesting. So EIP 1559, there's almost like two parts to this. Like the first is that the feature will actually be delivered in 2021.

Starting point is 00:38:08 And at some level, that depends on sort of Ethereum development and ETH1 development. And Tim Beko, hope you're listening, Tim. It's dependent on you partially. So that's the first prediction. you think that that's going to happen yeah yeah no i think that's totally going to happen um people have been murmuring about accelerating eip 1559 i'm not a core dev so don't cite me on that i don't have any support any like authority in the matter so that's just my speculation but i do think it's coming in 2021 the people who are close to it who i've talked to seem to think there's a good case for it happening

Starting point is 00:38:43 2021 too. And the second part of DC's prediction here is that once that happens, that will reinforce this narrative around ETH as a store value asset and contrast it, you know, between something like Bitcoin and other proof of work, you know, fixed cap issuant schedules as well. What's your take there? Yeah, I wrote an article in the bankless newsletter a while ago called Bitcoin and its musical chairs, is it scarcity game. Well, EIP-1559 and burning ether really is a very salient, similar game for ether because ether's being deleted. Therefore, chairs are being pulled away from the circle actively rather than passively, right? And so that becomes like very understandable. Over time, ether is burnt. So if you buy ether now, you will have a greater percentage of

Starting point is 00:39:35 the overall ether because of burning ether. That's an easy thing to understand. All right. Those are DC's five predictions for 2021. I think pretty good. There's lots of predictions going around, but we picked DCs because they were particularly good and very concise. David, some other takes going around. Can I get to this XRP take? Yeah, let's do it. All right. So here's the thing. All the XRP delistings, right? This is really what happens when your liquidity, your tokens liquidity is dependent on centralized crypto banks, as we say. This is this is, this is a, this is, this is, a hot take that I've talked about for a while, but I think because of this, ETH is more censorship resistant than Bitcoin, at least on this dimension, because all of Bitcoin's liquidity is very much based on crypto banks. It's based on essentially the side chains, like a Coinbase or a Binance. It does not have a uniswap on chain, on Bitcoin. ETH does have uniswap. That is what makes it more censorship resistant, at least on that dimension. I think very much Bitcoiners discount the rule that Defi can play in making their monetary system more censorship resistant,

Starting point is 00:40:51 and that is definitely a strength of Ethereum's. That's my hot take, Dave. What do you say to that? Yeah, so when you consider liquidity, you can divide liquidity into trustless liquidity or trusted liquidity, right? And that's where Ethereum really excel. Ethereum offers trustless liquidity for its assets. Bitcoin, because it doesn't have smart contracts and because it gains scale and accessibility through the banking layer, also has zero trustless liquidity. And that's kind of why we are really excited about Ethereum is because if you are in Uniswap, if you are on AMMs, if you're in balancer, you have trustless liquidity. No one can rug pull that liquidity from you. If you are in an unregistered security on a crypto exchange,

Starting point is 00:41:33 it is really easy to get delisted. And I'm totally with you there. Well, so let's play this out, David, just to talk about this. Let's say the government, for whatever reason, went to war with Bitcoin and sent letters to Coinbase and everyone they could, every centralized exchange operative they could, to delist Bitcoin immediately. What would happen? I mean, I think what would happen is the same thing that's happening to XRP right now.

Starting point is 00:42:02 It would be like we would run out of sources for liquidity for Bitcoin. Now, they could do the same thing with ETH, but you can't delist something from a trustless protocol like Uniswap. So on Ethereum, they'll always be exchanges without an off button that can't be censored and are outside of the arm of regulators. That's kind of the scenario, like, in my mind, when I think about this take. Yeah, the internal defy ecosystem offers like the strongest backstop for ether and other trustless assets on Ethereum.

Starting point is 00:42:41 I think that hopefully that future does not come out. And ether in that same future where, you know, the nation state goes, goes hard after Bitcoin and probably ether too in that same vein. That would still be bad because then we don't have on and off ramps. And so we're kind of stuck in the defy world. But at least we still have liquidity. Exactly. Yep, exactly. That's not going to happen, but anytime soon, I hope, but it is nice to have that

Starting point is 00:43:05 feature here. Here's another take by Jacob Franik. Yeah, from coin metrics, yeah. From coin metrics. This is one of my favorite takes that I've heard lately. A global value settlement layer needs no total addressable market. It is the total addressable market. I think that's an interesting perspective. What he's really saying is Ethereum as a global settlement layer, there is no total addressable market for ether, right, for Ethereum, right? It doesn't, it's not going after one specific market. It is the market, right? It is the host of economic activity. I think that's pretty cool. Yeah, absolutely. And okay, here's another take from Eva Baylon. Every time a payment company marginalizes more people, I buy Eith. What she mean by this? Yeah, Ava works at the graph.

Starting point is 00:43:52 What she's just saying is that if somebody gets like cut off from payments infrastructure, in that same way we were just talking about how you can't list de-list assets on uniswop or whatever. You also can't stop people from sending you money on Ethereum, right? Stable coins, ether, whatever. And so anytime a payment company cuts off access to an industry or services, Ava is saying that she buys ETH because she's bullish on the need for trustless, permissionless payments. Quick take.

Starting point is 00:44:22 Just super simple sentence. I love it, Ava. Nice job. Kevin Awaki as well from Gitcoin wrote this editorial in CoinDesk. And I love the headline here, how defy DGens are funding the next wave of open source development. David, how are DGens helping the public goods thesis here? Yeah, Kevin Awake extends this out of DFI summer 2020 when people would like ape into some random tokens or like just do something degenerate, as he would say, like ill-advised perhaps trying to get rich.

Starting point is 00:44:55 quick. And what he's saying is that as a result of Defy Summer, a number of protocols, Lyern, Yams, a few other ones, synthetics, they ended up donating and committing long-term funding for Ethereum development using Gitcoin, right? And so if you ever YOLO'd into like Wi-Fi, or if you ever yolode into yams or something, you, by proxy, helped fund public goods on Ethereum. So cool, really good job for Kevin O'Walki for first off building Gitcoin and allowing that capture to happen. And then also nice job writing this article and putting it in CoinDesk. Check that out. There will be a link in the notes. David, you had a really good take here. Maybe this will be our last take. So you said that yield is drying up in legacy markets with 30-year treasuries below 0.9%. AAA corporate bonds aren't much better. But you said on Ethereum, almost every single protocol offers yield in some way.

Starting point is 00:45:49 So Ethereum and Defy, according to you, almost becomes the last bastion of yield. And investors will want this. Do you think that they will want this in 2021? Absolutely. Yield is drying up in the legacy world, yet it is flourishing on Ethereum. I actually have a short piece coming out in CoinDest following O'Waki's piece in their 2020 year in review about this. People are waking up to Bitcoin and the idea of protocol constrained monetary policy.

Starting point is 00:46:18 And I think when that, when you open up that door and you say yes to Bitcoin, you see behind Bitcoin a very yield rich fields in Ethereum. And I think that's going to get people very excited when in treasuries, when 30 year treasuries drop below 1% in yield, people are going to take that capital and put it elsewhere. And some people are putting that in Bitcoin, even though Bitcoin doesn't offer yield. But then also some people could start to, you know, put their USDC into Avey, you know, maybe. Maybe they provide liquidity into a uniswap position. People that provided liquidity to uniswap within the ETH-USDC pair in 2020 earned a staggering 35% APY on a hybrid ether US dollar position. So if you are cool with exposing yourself to ether,

Starting point is 00:47:07 which I think people, if you're interested in exposing yourself to Bitcoin, then therefore you're probably pretty interested in exposing yourself to ether. But you can also get yield in partially U.S. dollar denominated terms by providing liquidity to uniswap. Yield in Ethereum is abundant and investors want that. Absolutely. We always use this image of we've got the traditional finance system and that's kind of one world. And then we have like this bridge, right, connecting it. That's kind of kind of coin basis and exchanges and the other side of this bridge. Once you upload your money into the bankless financial system, you pop out into this magical world of yields of like 5%, 10%, 20% potentially,

Starting point is 00:47:48 right? And so like the the pipe is relatively small because it takes a lot, like it takes a decent amount to cross that chasm, to understand what it takes to convert your fiat, upload your US dollars into some sort of stable coin or some sort of reserve asset like Bitcoin and it. But once you pop out on the other side, you're in this land of magical yields, right? And I think more and more people will be attracted by that and take that journey across the bridge to the other side. It's a good take. David, let's end here. What are you excited about going into 2021? I'm pretty excited about this new car that I just bought, but I'm particularly excited about how I financed it. And so I applied for a loan, except they didn't really like

Starting point is 00:48:38 my four-month-long work history as a self-employed content producer in the crypto space. That didn't really sit well with them. I did not get that loan approved. And so I just went to Ave and got a loan from Ave and they didn't care about what job or profession I was because I had collateral in there. I'll be it. That is apples to oranges. One is unsecured credit. One is an over collateralized loan. And I think I thought they had the experience of financing a car using a loan from Defi where I didn't have to fill out any paperwork was a treat.

Starting point is 00:49:09 The yield, the interest payments I'm paying from Ave are pretty steep, I think, for the average car loan. But I'm in it for the experience. You know, I'll pay yield, extra yield on Ethereum. just to have the experience of having financed a car using AVE. That is a really cool story. Now, you've got to watch, of course, say your liquidation price on there. So if there's a massive price drop,

Starting point is 00:49:31 you could be liquidated. David, are you concerned about that? Yeah, well, no, my liquidation price is very, very low. I'm keeping that nicely under control and always keeping an eye on it as you should. But at the same time, I needed a new car because for those that didn't know, I was driving a 1972 Volvo in Seattle, which it rains quite a lot. And in that car, when it rains,

Starting point is 00:49:51 I would feel the rain at my ankles. And so I definitely needed a new car. Oh, congrats, man. And the benefit there is, of course, you don't have to sell your precious Eath, right? This does not require that when you take out a collateralized loan. I would not have gotten a car if I would have to have to sell my E's. Not worth it. Not worth it. All right, Ryan, what are you excited about? Dude, I just think Bankless had a crazy awesome year. So we published 150 years. articles on the newsletter plus 53 how to tactics and how to do something cool in D5 plus David we just recently surpassed 100 podcasts that's that's a lot of time that we spent together like between kind of weekly roll-ups between our Monday podcast to the nation's 100 podcasts my

Starting point is 00:50:35 friend our getting started guide getting started how to get started go bank lists has been viewed over 1.2 million times and somehow even though we suck at YouTube. People watch this on YouTube and we have close to 14,000 subscribers. So it's been a really exciting year, I think, for bankless and this movement is global now. We've got Chinese translations. We've got Russian translations. We've got French translations, the community there. So I'm really excited about the reason we started this whole thing, David, which is to onboard the world, like a massive goal of getting a billion people into. the bankless ecosystem into open finance. That's kind of why we started. And we're not necessarily

Starting point is 00:51:21 going to do all of that. You know, kind of our media efforts are just one drop in in the bucket. But the bankless meme, lowercase B, people choosing to take back financial sovereignty and go bankless. That is, I think, the narrative and the meme that can get us to a billion people in open finance, a billion people in crypto. And David, this is my prediction. I don't have a prediction for 2021 at this point, but I do have the prediction for end of decade. There will be over a billion people in crypto. They're owning crypto, using crypto systems in some way by the end of this decade. I believe that. And I want to keep doing what we're doing to help make that possible. So thanks to everyone who has supported bankless over the past year, whether you're subscribing the newsletter,

Starting point is 00:52:08 whether you're watching this, whether you are telling your friends, you have made this possible. and we appreciate it. We're honored and humbled to be part of this movement. One billion bankless citizens by the end of the decade. I definitely hope that that comes true. And if that does come true, it's definitely not going to be because we did a bunch of podcasts or wrote a bunch of podcasts.

Starting point is 00:52:30 It's going to be because our listeners and everyone else in the crypto world helped spread the message. And so if you want this industry to survive, you need to pull in people into order to make that happen. We do believe that the value that the crypto industry is creating is not understood by the rest of the world. And it actually is ready for the rest of the world to come and use it. And so at this point, we just need to get into more ears. And that is where you, the listener, comes into play.

Starting point is 00:53:01 I hope you enjoyed all the podcasts. I didn't know that we had a past 100 podcasts in 2020. That's pretty crazy. I hope you guys have enjoyed listening to our voices all of that time. I hope that's true. they better have better have been trained but thanks for bearing with us all this step of the way and look forward to a very content rich 2021 absolutely guys happy new year from bankless of course risk and disclaimers none of this has been financial advice this is the frontier it's not for

Starting point is 00:53:28 everyone but we are glad that you are with us this has been weekly roll-ups from bankless

Bankless - ROLLUP: 5th Week of December

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