Bankless - ROLLUP: Arbitrum Layer 2 Launches | LOOT NFT | El Salvador BTC | FTX | ETH & EIP 1559 (Septemer 3rd)

Starting point is 00:00:07 Bankless Nation, it is roll up time. This is the first week of September. Wow, starting to feel like fall, starting to feel like time to get back to school. But I haven't taken the summer off, David. I don't know about you. No, no. The summer has only gotten more and more just like energetic and crazy. And like every week that has happened, it's just like, how are we going to do the weekly

Starting point is 00:00:29 roll up? Like, this is absolutely insane. Yeah. How are we going to fit this within, you know, a two to three hour, you know? How do I explain what's going on? Guys, we will keep this as short as possible. As always, we're going to cover markets, releases, news takes, what we're excited about, end with the meme of the week.

Starting point is 00:00:47 I think we have a moment of Zen for you too. Hey, before we do, we got to talk about our friends at So Rare. NFTs are going mainstream. It's happening this cycle. It's happening now. So Rare is a way to collect trade and do fantasy sports with soccer. Your favorite soccer players. Europeans will call this football, of course.

Starting point is 00:01:08 What's super cool from a tech side is this is NFTs on ZK rollups. So they got the tech figured out. It is fast and seamless. And there's utility along with these cards. So you can play with them in a fantasy sports type arena. Bankless wants you to play global fantasy football. That is the message here. For those that are into the world of fantasy sports, fantasy sports has now arrived on Ethereum.

Starting point is 00:01:34 I was actually just last weekend playing with hanging out with my friends while they were doing their fantasy football draft. So I kind of expect that to also follow along right after this. Fantasy football is here. And it's on Z-K-roll-ups on Ethereum. So check it out. Yeah, absolutely, guys. All right, collect and play. There will be a link in the show notes.

Starting point is 00:01:53 Or you could go to SoRare.com. That's S-O-R-A-R-E.com and check that out. David, also, we've got to talk about a conference. It's coming in 2022. next year in May, in Florida, it's called permissionless, we are helping to throw the biggest defy conference that's ever been had. I said conference, maybe I should say party, because I think it's going to be both.

Starting point is 00:02:17 And we are in the stages of planning that with our friends at Blockworks. I wish I could tell you there were tickets available, but the first tranches all sold out. That said, there will be new tranches that open every two weeks. So the first opportunity to get in on that is on the 15th of September. If you are a bankless premium member, so you are a member of our bankless newsletter, you get the premium podcasts, all that good stuff, then you got an additional 30% off discount. That's available for you.

Starting point is 00:02:48 I'm psyched about this conference. I wish people could get into it now. But as soon as we tweeted that out yesterday, it was like Insta sold out. But there will be lots of opportunities, hopefully, in the future. I forgot to mention this too, David. Every two weeks, the price goes up on this thing. So it's like crypto. You got to get in now or you have to FOMO in at a higher price later.

Starting point is 00:03:10 What do you think is going to go higher, faster? Ticket prices or ether? I don't know. They're both getting a 10x. I'm super looking forward to this. Like there hasn't really been a DeFi forward slash Metaverse Forward Conference yet. And so we're teaming up with the people at Blockworks to help coordinate this and get this done. like you said, it's maybe a conference, but more of a party.

Starting point is 00:03:33 I think they're in crypto, they're kind of the same. And so, I mean, it's not, it's pretty far out. It's May of 2022. So we got plenty of time before it actually happens. But it's going to be a blast. Ryan might actually meet you for the first time. Wow. We might actually host a podcast alive on stage in person.

Starting point is 00:03:52 That's kind of crazy to think about. But yeah, it's going to be an absolute blast. Yeah, check that out, guys. We'll have more info in the weeks to come. All right, David, let's get to the markets, man. Bitcoin, what's Bitcoin doing? Yeah, Bitcoin started the week at $48,000. It fell down to the low, low price of $46,700 and then has zoomed up to $49,970 at the time of recording.

Starting point is 00:04:16 It touched 50K earlier this week, but it has not been able to hold its head above water. Overall, up 2.3% on the week. Nice to see us above 50K. Even though it was brief. Let's talk about Eath. Wow. this looks like an assent. Yeah, absolutely.

Starting point is 00:04:31 Ether started the week at $3,000, which was also the low of the week, and it has zoomed all the way up to $3,840 currently at the, and that was the high, just set I think last night early this morning. We're currently at $3,810 up 16% on the week. It was absolutely Ether's week this week. What day did the Raoul Paul podcast come out, David? I wonder if we could see that on the charts. That was exactly on the 30th.

Starting point is 00:05:02 The 30th. Which is the low for the week. Correlation is not causation, but also I also wouldn't be surprised. That was a very bullish podcast we put out with Raoul Paul. And I think it's set up to be one of our most downloaded ever talking a lot about Ether. He talks about it as the greatest trade ever. And it's funny because we've been talking about Ether Fundamentals for like three years, right? a long time, but now it's very clear to even smart macro people like Raul Paul. So there you go.

Starting point is 00:05:34 All right. What's the ratio doing, David? This is the eat-to-bict coin ratio. I've got the three-month open. As you can tell, the ratio has done phenomenally this week. It started the week at 0.066, and it touched 0.0785 at the very top, and it's currently coming in at 0.076. So if we go to go to the year to date. We are almost breaking into new highs on the ether BTC ratio. There's been some murmurings on Twitter of what happens when ether breaks its all-time highs before Bitcoin does. That's kind of like the sentiment right now. David, speaking of sentiment, I saw Chris Berninski tweet. He said something to this effect. Bitcoin no longer has the stranglehold on crypto culture and in kind of the mainstream mind

Starting point is 00:06:21 that has transitioned. And I think that's true. NFTs are incredibly bullish for Ether. Now it's got this narrative, EIP 1559, burn. Yeah, it's hard not to agree with Raoul Paul that this is going to be an absolutely crazy year. He called for 20K end of year. I also call for that. Okay, David also calls for that. Like, on the one hand, I wouldn't be surprised, right?

Starting point is 00:06:48 On the other hand, that's a lot of territory to move. But this is crypto, and we'll see how the fall goes. I feel like we've been in the crab season long enough. It feels like everything's prime for breakout. Yeah, absolutely. And going back to the whole culture thing, I mean, it makes sense that a touring complete platform that has generalize ability

Starting point is 00:07:07 offers more and more surface area for culture because we can just do anything with it rather than whatever Bitcoin culture is around like sound money. It's just like one instantiation of culture. On Ethereum, you can have all cultures instantiated and then made economically viable. So there's communities, there's doubt, there's NFT orgs.

Starting point is 00:07:26 Like, there's everything on Ethereum. And, like, all of that is kind of coming to a head right now. Look, it just captures all these narratives, too, right? Like, even the narrative of the metaverse that's spinning up, we're going to talk about later. It has a key role to play. All right. Well, let's get to some more metrics. We're still in markets.

Starting point is 00:07:41 Oh, new high. Wow. I didn't notice that before. 96 billion locked in defy. That's a new all-time high. New all-time high. Wow. We didn't look at this going in.

Starting point is 00:07:49 No, not at all. We're almost at $100 billion. 100 billion almost. Wow. Wow. Wow, I can't believe I missed that. Can you zoom out today? Schedule your tweet. Yeah.

Starting point is 00:07:59 For tomorrow. I mean? Wow. Look at that. That is great. That's fantastic. Yeah, okay. So for people who can't see, this is basically a kind of a straight ascent up from October

Starting point is 00:08:12 2020 or so. Actually, I could go back before that from DFI summer all the way up to here. We had, I guess, a dip from May until now. And then we're out of that dip. and we are on our way to new all-time highs with total lock value in defy. Let's talk about this. DPI to ETH ratio. So is it ETH season? Is it D-Fi season? It ain't D-Fi season, Dave.

Starting point is 00:08:40 Well, not comparatively to ETH season. The D-Fi tokens had a fantastic week this week. It's just that ether absolutely crushed everything. And so the DPI is coming in at 0.112. which is meaningfully below my bottom call of 0.13. But I would like to say, on dollar turns, is doing great. He's just hanging to everything he can. There's like this tiny life raft that he's clinging to at this point.

Starting point is 00:09:05 You know, David's still smiling, though. He doesn't care because he's got his ETH position. So, you know, if it goes that way, it's fine to you for a time. Well, let's talk about the bed index. So this is a combination of one-third Bitcoin, one-third Eth, one-third D-Fi. When crypto is doing well, how does it not also go? up and of course that's what it did on the weekly where did we start where we end yeah we started at 143 dollars and are currently clocking at 164 dollars for one bed index we maxed out the week at 169

Starting point is 00:09:36 nice uh and again like bed index never gone down in the entire can you can you can you zoom out to the three months it is up only it has never ever gone down it is absolutely incredible uh so yeah the bed index, literally proving exactly what I say every single week, the best crypto index of all time. Excellent way to get crypto exposure. Hey, let's talk about L2B because new layer twos are launching. And we are at, I don't think this is quite an all-time high. It's not, but it's a 90-day, all-time high on value inside of layer twos. And I think this is all true layer twos, right? So it doesn't include side chains. But look at this new entrant to the mix here. Do that guy? we'll arbitral there.

Starting point is 00:10:20 Look at that. Plus 2,700 percent increase. I mean, that's just, I mean, they're at $21 million, so it's like relatively new. But like, we're going to see very large percentage increases on both optimism and arbitram over the next few weeks. And this is why we have started to get ahead of this narrative. But other other L2s are also doing fantastically. Look at Immutable X up 27% on the week.

Starting point is 00:10:45 We got DYDX up 11% in value locks. on the week, almost breaching $300 million locked. ZK Sync up 15% on the week, Aztec, plus 21% on the week. L2s are up only. Oh, yeah, so rare. So rare, look at that. Good for you guys. 11 million locked.

Starting point is 00:11:04 That's not a small number. Yeah, this, of course, is a ZK roll up as well. Really cool, man. I wonder if you can almost bet on what's going to go up, like, sort of horse race style. How to get synthetic gases on these things? Well, I feel like so Arbitrum is definitely going to be in the top like three before long. It just launched, right? I also, I'm pretty bullish on ZK Sync, not yet, but in the future when they roll up,

Starting point is 00:11:31 when they roll out an EVM compatible ZK roll up, that's going to be really cool to see. So there's some great immutable X, dude, that could be a dark horse as well as soon as they onboard some like large NFT projects. and you know everyone everyone loves nfts but gas is too high on main net the mutable x is kind of solving that so a lot of cool solutions being built out here also new to l2b dot com is that risk panel so they've actually added in some like you know ways to measure risk which is pretty cool nice patch yeah interesting very cool it's been more time looking at that okay um let's talk about eth issuance david this is in the context of ultrasound money this is the effect of eI

Starting point is 00:12:16 I saw coin metrics put out this chart. And it just, I mean, just shows you very visually. Tell me at what point EIP 1559 gets deployed, right? It's this point where you see ETH issuance, steady, it's above 4%. You know, 4.1%, EIP 1559 hits and bam, down annual issuance down to 3%, down another leg, annual issuance down to like 1.5%, down to 1%. annual issuance for ether on its proof of work chain was below Bitcoin for a period of time. And this is the thing to remember as NFT mania continues as basically, that means it's

Starting point is 00:13:00 block space demand mania for Ethereum. And what that means is eth issuance goes down. So no doubt in my mind that we will be in the ultrasound money territory post-merge, perhaps well under it. I mean, what would we be looking at, like, you know, negative two annual issuance, negative three annual issuance, something to that effect. But it's absolutely crazy how quickly ETH gets burnt when block space demand goes off the charts. Yeah. And this is just the symbiosis between all native economies on Ethereum and ether the asset. I mean, this is dependent on actual economic activity, right? So like if the NFT mania actually like cools off, then this would rise back back up. It's only been heating up and it's also just one sector of Ethereum. And so like

Starting point is 00:13:48 regardless of like the merge, which we, you didn't yet mention the triple halving, which is still on the menu, like there's just more and more generalized economic activity coming to Ethereum consuming block space. Absolutely. Let's talk more about EIP 1559 because now we're a month in or so just about a month in and we've got some actual visuals, some metrics on this. What do we looking at here, David? Yeah, so this first graph is kind of a model for what you would expect for the gas markets and EIP-1559. So those are two different things. There's the markets for actual blocks-based demand, and then there's the EIP-1559 mechanism. And there's this predicted overshooting because the gas markets, EIP-1559 is a lagging mechanism. It reacts to the

Starting point is 00:14:36 environment around it. It reacts to the gas markets. When an NFT drop comes, everyone eight. Everyone apes in and the base fee goes up and up and up because everyone consumes all of the block space. And so base fee rises 12.5% per block if the block space is maxed out. And so EIP-159 responds to the over-demand, over-consumption of block space by increasing. But first, there's this overshoot of the base fee's too low and the tips come in. And that's what raises the block space. And then we actually saw this model, we actually saw this model actually live in real time. with the next picture in this thread, which you can actually see it exists.

Starting point is 00:15:16 So, like, first we have this first hump right here with this gray, this gray tip amount. You also have the purple line, which is the moving average, so they're basically the same thing. And then that overshoots, and that tells Ethereum, that tells EIP-1559, like,

Starting point is 00:15:31 hey, you need to react to this. And then we see EIP-1559 take effect. The base fee goes up, and then it responds by reducing the tip amount, and then over time this also settles out as the NFT drop ends. So like the takeaway is that you are seeing EIP-1559 allow Ethereum to respond to the environment that it finds itself in. And this is what it takes to have an anti-fragile, maximally like adaptive protocol. Rather than something that's rigid and can't react, Ethereum has this EIP-1559 mechanism that reacts to the world around it

Starting point is 00:16:06 and allows it to maintain stable equilibrium. And this is what it means to have a monetary system operated by algorithms, operated by code. It kind of reminds me of buildings. They build in areas of the world that are earthquake prone, where they build, you know, an extra, a little bit more sway built into them. So there's an earthquake, the building can sway and doesn't immediately fall apart. Yeah, just vibes. That's what's happening. Ethereum is just viking.

Starting point is 00:16:33 What does this mean for the average ETH user? So if an eth user sees gas price spike, this generally means that just wait a little bit and they'll come down faster than in a pre-EIP 1559 world. Is that the correct interpretation? Yeah, I would also add that like this Ethereum mechanism that's reacting to the markets means that the users have to react less. As in this like Ethereum, this nebulous thing that we call Ethereum is doing its own internal computation. and that means the brains of humans have to do less computation because Ethereum did the thinking for it. So this is Ethereum working for us. Technology is a bicycle for the mind. Look, I don't want to get too weird on this, but here's the other thing I think this means

Starting point is 00:17:19 is there is this weird notion in Bitcoin that Sintoshi created the perfect mechanism and it was fully baked at the beginning. There was no possible improvement to the underlying mechanism, right? It just seems empirically false. False. Okay? This is not a huge tweak to Ethereum, but it is a slight mechanism change, and it's massively improved the system. I think some iteration on our mechanism designs is hugely important. This is not just, this is technology in addition to money. And technology can improve and it can change and can get better, the importance of being able to upgrade and change things when they make sense. Let's talk about some of these metrics coming out of Block Native, David. What are we seeing from EIP 1559?

Starting point is 00:18:09 What is Block Native showing us here? Yeah, this is just the story of EIP-1559 adoption. You can see the different transaction types, type 1 and type 0, which is like, you know, EIP-enabled, EIP-159 versus not enabled. There was a big jump in the middle of these graphs right here. I can't remember what wallet provider started implementing EIP-1559, but we are now well over 50% of EIP-159 type of transactions. And, I mean, again, we're just going to watch this approach 100% over time.

Starting point is 00:18:42 There we go. All right. Let's talk about OpenC. They've just had a killer month. Absolutely killer month. Three billion trading volume in August. Three billion in August. And it's just a straight lineup.

Starting point is 00:18:56 This just shows how quickly things can happen in crypto. In July, it looks like they're going to. was roughly like 300 million. Yeah. So we did a 10X. Nice 10X on the month there. Congrats to OpenC on that. And NFTs, of course, are just popping off.

Starting point is 00:19:11 So that explains a huge chunk of why that's happening. Congrats to all the investors that invested in OpenC's raise literally like two months ago. Exactly. This is, yeah, this is just such a crypto thing to happen. Talk me through this tweet. This is one from our friend, Richard Chen. He always digs into the analytics, the on-chain analytics behind these chains.

Starting point is 00:19:36 We did an episode with him where he's talking about his approach to Dune Analytics. Looks like he's got some analytics based on cross-chain bridging. What's going on here? I believe maybe it was last week or the week before, but one of my takes was that the whole phrase of cross-chain is going to move from layer ones to layer one cross-chains, like Bitcoin to Ethereum or Ethereum to like Tezos. And instead, cross-chain is going to start to increasingly, mean cross layer two's. And I think this is evidence of that. Richard Chen says hop protocol,

Starting point is 00:20:08 which is a protocol that lets you hop from layer two to layer two and then also back to Ethereum. He says, is doing the same amount of volume as Thorchain, which is a layer one to layer one like swap protocol, liquidity protocol, doing the same amount of volume of Thorchain before Thor chain got hacked, which was another point I made is cross chains that are really complicated and really dangerous, whereas layer two to layer twos all operate on the EVM, all use the same standards, and are much safer. And so this is exactly proving exactly what I was talking about. Layer 2 to layer 2 hopping is going to be 100 times easier, 100 times more safe,

Starting point is 00:20:40 and is ultimately going to become whatever it means to say cross-chain. Cross-chain is now L2 to L2. I think we've got to finish the rest of this tweet, too, because this is important. He said that about hop protocols doing the same amount of volume as Thorchain before the hack. And then he says, no token, there's no army of shills, just a missionary team, heads down, focused on building shot across the bow to Thor chain. I don't know what Thor chain is doing now in terms of market cap. It's like I saw at one point in time like six billion or so, David, you could probably look that up. But like it's kind of the difference between I think actually

Starting point is 00:21:18 like building and seeing the numbers on chain and investing in that versus investing in a potential narrative. And you can make both, you can make money both ways in crypto, right, from a fundamentals perspective or from a narrative perspective. And yes, these two things also blend. But when in doubt, man, always buy fundamentals, always invest in the on-chain data. That's at least how I think we approach things at bankless. Yeah, so what was Thorchain's market cap, David? Currently coming in at $2.7 billion. $2.7 billion. Really interesting to see how that evolves. Of course, Kinex is also doing some big things here. This is another hop-type protocol, this is another bridge between different layer twos, and this is an arbitrum to polygon

Starting point is 00:22:06 in 70 seconds transaction. The tweet says, you aren't excited enough. I do feel like that's true. I don't think the entire crypto space realizes how good bridging is going to be between these layer twos before long. The bridges are already being finished before people have even migrated onto layer twos. It's crazy. Absolutely. All right. Well, let's talk about this, David. Maybe we'll end markets with spot volume up in what that means. So apparently August, if you look at centralized exchanges, the spot exchange volume broke one trillion dollars. And this is the first time it's done so since May. So if you look at the numbers here, this is kind of what the chart looks like. This is the story. If we're to sum up the entire market section, it feels very much to me

Starting point is 00:22:55 like we've gotten through crab season. We're at the end of the summer. And bullet fall. That's what this is looking at. Like, Thanksgiving is going to be one of those thanksgivings where you might be sitting around with your family and everyone's asking you about crypto. And I don't know what they'll be asking, but be asking about NFTs or ether or like tokens or Bitcoin or what. But it feels like it's going to be one of those Thanksgiving, David. That's exactly right. And we'll talk about this later on the roll up. But like the cool thing about the last few months of Ethereum and of defying and of crypto is that like the things that we've created lately. While they're all kind of crazy, like we're selling like JPEGs for millions of

Starting point is 00:23:33 dollars, like JPEGs are still easier to understand than like Uniswap, right? Like, and so some of these conversations are going to be easier to have. Yeah, absolutely. You could show people. Yeah. You know, absolutely. All right, guys, we're going to show them your penguins. Show them your penguins. Why that's worth hundreds of thousands of dollars. Then try to explain that. We should do an article on that, David. All right, we are going to be back with releases. But before we do, we want to thank the sponsors that made this episode possible. Bankless is proud to be supported by Uniswap. Uniswap is a new paradigm in asset exchange infrastructure.

Starting point is 00:24:07 Instead of a cumbersome order book system where trades are matched with other humans, Uniswap is an autonomous piece of software on Ethereum, which is what Ryan and I call a money robot. No human counterparties or centralized intermediaries, just autonomous code on Ethereum. Input the token you want to sell and receive the token you want to buy. Something brand new in the Uniswop ecosystem is the Uniswap grants program is now accepting applications for grants. We have been saying this for a while and we'll say it again.

Starting point is 00:24:36 Dow's have money and they are in need of labor. If you think that you have something to contribute to the Uniswop Dow, apply for a grant to Uniswap. Just look at the size of the Uniswap treasury. It's almost $3 billion. This mountain of capital is looking for labor. Do you have something of value to contribute to the Uniswap Dow? No matter how big we're going to be. or small your idea is, you can apply for a UniGrant at Unigrantz.org and help steer Uniswap in the

Starting point is 00:25:02 direction that you think it should go. That's exactly what we did to get Uniswap to be a sponsor for Bankless, and you can do the same for your project. Thank you Uniswap for sponsoring bankless. Balancer is a powerful platform for flexible automated market makers. Typical AMMs just have two tokens inside of one liquidity pool, which can lead to fractured liquidity across the many pairs in Defi. With Balancer, you can access the full power of multiple tokens inside of one single AMM, which unlocks an entirely new playing field of possibility. This makes Balancer an awesome building block for so many different use cases. Balancer pools can make asset indices, but instead of paying fees to portfolio managers, Balancer lets you collect the fees

Starting point is 00:25:42 from traders who use your portfolio for liquidity. Additionally, Balancer smart pools can be programmed to have properties that change according to predetermined rules, such as changing the swap fee based on market conditions, or even liquidity bootstrapping pools, which can help you launch and distribute your token with day one liquidity. At Bankless, we use a liquidity bootstrapping pool to sell our BAPT T-shirts too much success. 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 using balancers' asset managers. Balancers' vault architecture lets you trade between balancer pools at a fraction of the cost versus trading on other platforms.

Starting point is 00:26:25 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 app. d balancer.fi. All right, guys, we are back with the releases, David. We've got to start here. Another layer two has shipped. We talked about it before.

Starting point is 00:26:46 Now it's actually happening. the tape is being cut, the theme park is open, Arbitrum is ready for business. What does this mean? Oh, God, it means that one of the Ethereum's most hype scaling solutions is that we can go into the theme park and go on all the rides. Not only is the theme park open, but the rides are also open. That's what's been going on for the past two months or so, is that all these dev teams have been building their rides. The rides have been under construction. Now most of them are finished. And so now we can go play in this new theme park that's called Arbitrum. And so the list of things that are already ready for you to go ride on is like pretty insane.

Starting point is 00:27:23 We're going to go through some of that list. But David, I haven't had an opportunity to actually use Arbichem, so we're recording this on Thursday. Just because this has been such a crazy week, but I intend to. My understanding is, like, what are the big, of course, you know, reasons to migrate to Arbitram is lower gas fees. So it's not eliminating gas fees completely, of course, because you're still ultimately securing things from Mainnet. But if you look at Arbitrum versus Mainnet, here's one comparison. The cost to send eth, $1, $1 on Arbitrum. Right now, gas prices being what they are, about $11 or $12 to send ether from one address to another. The cost to use a uniswap, $5 on Arbitrum. We're on. Maynett costs about 80.

Starting point is 00:28:10 And this is all with like the governor's on. So Arbitrum still hasn't let everything through their, they're throttling transaction throughput, and they are deploying this in a cautious way. So I anticipate these gas fees could go down over time, too. Of course, it's partially depending on what Mainet does. But not that bad, right? Like when we talk to Arbitrum, they were anticipating like 90 to 95% reduction in gas fees for typical transactions, and that's kind of what we're seeing right now, which is good. I know one concern I've heard people have is, hey, there's not liquidity yet. And I'm also like, look, we're on day one.

Starting point is 00:28:52 What is not liquidity? We have to put our money there at first. There was like $2 million in liquidity. And I think I've heard some complaints. I was like, hey, the theme park's great, but like we don't have the liquidity yet. You got to wait when the water park turns on, you got to wait for the water to flow all the way down the slide before you can run up. You can slide on it. That's what's happening. And now we're already at 40 million. And we saw that on there. two scans. So by the time you guys listed to this, I don't know, could be 60, could be 80 million. It's going to take some time for the water to get down the slide. But yeah, it's here, man. I just

Starting point is 00:29:26 copy you, David. Layer 2 is here. This is what we've been waiting for. This is different than optimism in that everything is kind of generally available out of the gate. They're not deploying things in application at a time. Yeah. What's your take here, David?

Starting point is 00:29:42 Oh, it's kind of going to be a wait and see type of thing. The cool thing about layer two is we can take all of our defy stuff and put it on the L2 and then yay, we save on gas fees. The cool thing that I think is really exciting is like, well, there's also defy things that couldn't happen on layer one that can only happen on layer two's. And that's going to be like this big zero to one moment. As soon as we figure out what those things are, you can't really ever predict them. But like that's kind of what I what I'm really, really excited about. And just overall, there's going to be a great migration to the Arbitrum layer two.

Starting point is 00:30:14 I'm pretty sure is what I say in the sponsor. Well, guys, you know, stay tuned for Tuesday. We're going to have Arbitrome back on the podcast doing a show with them to review their progress since the last time we talked to them. But maybe let's just scan a few things that have been deployed. So there's a block explorer by the people who made Ether scan. It's called Arbiscan, and that is up and ready. So we love ether scan.

Starting point is 00:30:39 Looks and feels like ether scan, which is great. God, how many times a day do I use this thing? Right. And now it's deployed on Arbishop. Also, our friends at Balancer, they have expanded to layer two. They're on Arbitrum live now. Sushi is on Arbitrum. And they've got some rewards.

Starting point is 00:30:57 It's rewards. I didn't realize that. So they're already doing yield farming on Arbitrum. Definitely something to check out. Uniswap also deployed on Arbitrum. So this is the first layer two where we've seen. at both of those solutions, both sushi swap and uniswap. So they get to battle it out in the new realm.

Starting point is 00:31:14 I'm kind of excited about that, honestly. Look at all this. All of them, everything. Hey, shout out to Tracer. Curve. Dodo, D-Dex, Avey, FutureSwap, M-C, Dex, MakerDAO, perpetual protocol, D-Force, whatever wee Piggy is.

Starting point is 00:31:31 So much. So much it's on Arbitrum. Love you, We-Pigie. Yeah, Tracer, knows this safe. Some of these are cool because they're actually new apps that haven't been deployed on Mainnet, too. So anyway, lots to go check out. We're going to be releasing a guide next week to Arbitrum next Thursday. So if you've read some of our previous guides, like we did a guide to Polygon, doing a whole comprehensive guide for Arbitrum.

Starting point is 00:31:56 So stay tuned to the newsletter to check that out. That's newsletter. Dot banklesshq.com. If you are not signed up, go do that now. Yeah. And shout out to Ben, literally the best guide writer in all of Defi. We got him. Great find, got him on the team,

Starting point is 00:32:10 and now he's going to be releasing an optimism guide as well. Yeah, we just seem to quit college and work for us. Just quit college, bro. Hey, it worked for Vitalik. That's what you say to your parents. Yeah, it's worth for Vitalik.

Starting point is 00:32:25 All right, man, the other point I want to make is there's just a thread from Anthony Sasano that goes through all of the other layer two solutions that are coming to Mainnet. So he goes through Starkware. He goes through ZK Sync. that's coming optimism, that's coming arbitram. If you want a collection of all of the layer two's,

Starting point is 00:32:43 we will include this link in the show notes, and you can go check that out because it still is layer two summer. I know we're almost out of summer. So it's like layer two summer fall edition is what I think's happening. In the next few months, this is definitely going to pick up some more. David, should we talk about this? This is interesting. I want you explain what's going on with Vincent Van Doe

Starting point is 00:33:06 and Three Arrow's Capital. All right. So Three Ars Capital famously kind of was one of the big reasons why this NFT mania got so much steam, so much, got picked up so much steam so quickly. They aped into a bunch of Cryptopunks, of Fidenza, some ringers. And now they look like they are just doubling down on NFTs as investments. And so they have brought on whoever Vincent Van Doe is on Twitter saying, excited to be working with Suzu and Kyle Davies from Three Arrow's Capital to launch Starry Knight Capital,

Starting point is 00:33:35 an NFT fund. I love the name. And he says, our thesis is simple. We believe the best way to gain exposure to the cultural paradigm shift being ushered in by NFTs is owning the top pieces from the most desired sets. So that's pretty cool. Investing in culture directly. And that's, I think that's just a fantastic option to the fact that you can even invest in culture is fantastic. And David, you said whoever Vincent Van Doe is, and that's because he's pseudo-anonymous, not because he's unknown on Twitter. He's a big deal in NFT circles as far as I understand it, like one of the top collectors in the space able to identify these things early. So this is the kind of talent acquisition for Three Arrow's Capital, too. They've got the capital. They need the talent through which to deploy it,

Starting point is 00:34:21 and they're matching those things together. Really cool to see an NFT-focused fund. That's what this is. And if you read my digital culture revolution, you might have seen this coming. You got to hit the buy button though, David. That's the hard part. Yeah, I forgot that part. All right, Merritt Circle, this is interesting. This is a fork of optimism. So optimistic roll-ups, we've talked about so much.

Starting point is 00:34:47 Optimism is a solution, similar to Arbitrum on optimistic roll-ups. Merit is apparently forking their code, tweaking it in some ways, doing sort of their own thing. I don't know all of the details. But I'm just kind of of the mindset, like let 1,000 roll-ups bloom. And we'll see which ones win. Very excited that this is our scalability path for defy and Ethereum. I don't know, David, if you have anything to add.

Starting point is 00:35:14 There's not going to be a few roll-ups or a few L-2s. There's going to be infinity numbers of them. And so this is just, you know, one more. Absolutely. Pleaser Dow. What's Pleaser Dow doing? And, you know, maybe give some folks some context for what Pleaser Dow even is. Yeah.

Starting point is 00:35:33 Pleaser Dow is a Dow that. got spun up in a just a hasty fashion in order to purchase people pleasers famous x times y equals k uniswap v3 nfti that got launched at the same time as uniswap v3 debuted and just a bunch of friends all pooled their money so they could buy this nfti and then the dow kind of took that and ran with that and so there's a bunch of more internet culture nfts that pleaser dow has purchased one of them was the original Doge, the Shibu Inu Doge meme, the actual picture from the actual owner of the Doge who actually took the photo. It's that one right there.

Starting point is 00:36:11 This is the original. And so the artist, the owner of the Doge, who is at Suko Sato, apparently she only speaks Japanese, but the Tao is actually in contact with her. She minted the photo as an entity, and Pleaser Dow bought it, I think, for $5.5 million, $169.669.Eath. Nice. And now this is on the balance sheet. Now what Pleaser Dow is doing is they're using Andy 8052's fractional platform,

Starting point is 00:36:38 which we did an AMA on if you want to learn more about that. They are putting the Doge NFT into fractional and fractionalizing 20% of it. They're trying to do more in the future, but they're starting off with 20% into 69.6969 billion units. Oh, excuse me, 16 billion 969696 units. There's a bunch of memes going on here. And so this sale is actually ending right now. And then all of a sudden, the Doge ER, excuse me, the Dogg, ERC-20 token is going to be a token on Ethereum, and it's going to represent a fractional share of the Doge NFT.

Starting point is 00:37:17 I would just like to show my own bags here and say that Doge, the blockchain, the Doge currency, is clocking in at $38 billion. And the dog token, which is the actual NFT, the actual meme itself, only clocking in at roughly 6 to 10 million. You know, there's a discrepancy there. So, okay, so let me get this straight. What's happened is there was a Dow that was created to purchase cultural artifacts called Pleaser Dow.

Starting point is 00:37:43 They purchased one of the biggest cultural artifacts, which is the doge coin dog, the picture from the artist, the actual original, the most legitimate one. Now they are fractionalizing that thing and releasing it as an ERC20 token that people can buy. So I think it's being auctioned off, but people can also buy. this token. And the meme is, this tokens now could compete against the original Dogecoin meme, which is Dogecoin, the blockchain plus the currency. That's what you're saying. I mean, they wouldn't say compete. That's my interpretation of this. It's a little bit of

Starting point is 00:38:19 a memetic competition. But also, like, we did a live stream with Andy and James from Pleaser Dow. And they talked about how like, well, this can become a community like operated organization. This can become like a Dow that's centered around the Doge meme now that the Doge NFT is in the hands of the people. So there actually could be collaboration between the Doge blockchain and the dog token holders on Ethereum. It's so weird. The numbers, the value we're talking about. Like if aliens like unearth civilization years from now after humanity destroys itself, they will have thought we worship dogs during the internet culture of time. Maybe they would understand. Maybe they have their own pet aliens that they worship.

Starting point is 00:39:00 Maybe. I think the potential for this is actually pretty crazy. So, like, there's Badger Dow on Ethereum, which is BTC infrastructure. I think there could be, like, dog Dow for, like, Doge infrastructure. And we all know that Elon Musk would absolutely join that Dow, that's for sure. Yeah, absolutely. It's getting some press, too. This is Pleaser Dow, Emily Yang on Bloomberg TV talking about this.

Starting point is 00:39:21 So very cool. Hey, let's burn through these other releases. Block Native, just released a gas estimator for your browser. So it's a great browser extension. Now you can just click a button and see how much you should be paying. This is all EIP 1559 ready. So great way to estimate and not overpay on your blocks. And that's meaningfully different from all the other gas estimators that you might already have installed

Starting point is 00:39:46 because the current gas estimators, they only look at like recent transaction history. Block Native goes very deep into the mempool. Into the mempool. So it has a lot more insights and a lot more clarity to give you better information. information. Let's talk about this too. We probably don't have time to cover it. Maybe it's a podcast in the future, but a new NFT derivative from the Brilliant Minds at Paradigm. What is this derivative? What's the TLDR? Right. So any NFT project that has a decent amount of liquidity, which then establishes a floor price. Paradigm has established floor perpetuals, which allows you to make a perpetual

Starting point is 00:40:20 contract upon the floors of an NFT project. So this is now a synthetic asset for any NFT projects. So like synthetic penguin tokens, synthetic punks, synthetic cool cats, synthetic whatever. The floor prices is just like the absolute lowest price that on the open market, say a punk has been listed, right? It's like the very minimum layer. So what would you do with this kind of synthetic? Would this be a way to speculate using an ERC 20 token on a given NFT market? Maybe create an index out of those eventually. Yeah, exactly. It's just financializing NFTs, which is fantastically cool. Right below the floor is where you find liquidity, which is why these perpetuals are pointed at the floor. And it's just like for people that

Starting point is 00:41:06 don't care for a particular punk but are still bullish on punks, they can buy these floor perpetuals. Sir, I wonder what a CFTC commissioner would, what their take would be on something like this, an instrument like this. Well, it's such a fantastic little coincidence that we actually interviewed a former CFTC commissioner coming out on the podcast on Monday. And we ask a question kind of like this. But I framed it a little bit differently. He's like, there are like 10,000 NFT projects and there's going to be 10,000 synthetic assets.

Starting point is 00:41:37 Like what's the CFTC going to do about that? His answer is pretty interesting. Yeah. Stay tuned to that for that podcast. It's Brian Quintes. He's a former CFTC commissioner. He just resigned this week. The day before we recorded.

Starting point is 00:41:50 The day before we recorded. So he's kind of has some more freedom license to speak. Anyway, hot episode coming up there. We missed this little raise, by the way, in all the talking about Arbitrum, they actually raised another $120 million in funding. I think their valuation is like $1.2 billion, I want to say. So they've got a war chest to keep building what they're building. But look at this, David.

Starting point is 00:42:15 Like a big raise in crypto. TechCrunch, our friends at TechCrunch, the Bloomberg of Technology, blogs, I don't know, but they had this crazy, they had this crazy headline. Offchain Labs, those are the people behind Arbitron, raises 120 million. Why? To fix Ethereum's shortcomings. That's why. Taking the perspective of somebody who's not in Ethereum, you can kind of see why, like a $70 univap trade, like I guess that's a shortcoming. But again, they aren't, it's not, it's more nuanced than that. Like, Ethereum's decentralization is not a shortcoming. And decentralization is expensive, yes.

Starting point is 00:42:55 Yeah, the thing that we're building is a very slow computer that does one thing, which is it's trustless. It's decentralized. Like, that is the entire point. It's just shocking to me that popular technology blogs, even like TechCrunch, still don't understand this, still don't get this. This is why we need crypto media publications to actually, crypto natives talking about their own industry in a way that makes way. more sense because TechCrunch is not getting it right. Speaking of the crypto industry, though, jobs. Get a job if you're in crypto. A goddamn job. Check out the bankless job boards. We have a senior front end web three developer at Tracer Dow. You got to check that position out.

Starting point is 00:43:39 There are a number of others. Make sure you look at that. You can also subscribe to the bankless jobs newsletter and get updates. We'll include a link in the show notes. All right, David. Should we get onto the news? Do you want to talk about the chain split first? Yeah, sure. So right after we recorded on last Thursday, Friday morning, there was a chain split to Ethereum. And what that means is there was a consensus failure,

Starting point is 00:44:05 consensus bug, and then we had the chain go in two different directions. This didn't really cause too much of an issue at the time because most of Ethereum all went in the same direction. Some parts of the guest client went in a different direction. People that hadn't updated their guest client. found a different chain to go off of. And basically what happened was there was a bug in Geth and the code that handles the static call op code.

Starting point is 00:44:31 It was found in fixed in an update and that new update to Geth was deployed. And all those nodes that updated didn't fork, but the ones that didn't update ran off with an unfortunate consensus failure, like I said. And because of this very specific smart contract that was deployed, somebody actually exploited this and all the non-updated Geth clients

Starting point is 00:44:52 because of this weird contract thing went off in a different direction. As soon as these clients downloaded the latest Geth client, although they pointed back to the original Ethereum chain and then we went on our merry way. But this is why Ethereum has multiple clients and also why you need to update your notes.

Starting point is 00:45:10 Yeah, absolutely. I do think it was a bullet that was maybe narrowly dodged, I think. So, you know, this definitely could have been worse, but this had already been an exploit that was patched. And so only affected older geth nodes, which is why we saw it's sort of a brief chain split and then everything kind of merged back and fixed.

Starting point is 00:45:31 Yeah, so I think points well taken, David. Let's talk about this Coinbase Layer 2. They are doing stuff on Layer 2. This is a whole blog post about that telling the crypto community what they intend to do. They said, we just announced support for Polygon Network for the Coinbase wallet. the Coinbase wallet extension with plans to integrate Polygon as our first scaling solution for

Starting point is 00:45:55 Coinbase, but they are not stopping there. Their goal, they say, is to explore scaling initiatives with L2, such as optimism, arbitrum, and Starkware over time. That is music to my ears, David. We've been talking about the protocol sync thesis, which is those protocols that have the highest levels of decentralization, credible neutrality, the highest levels of legitimacy, as we've talked about before, those will be at the bottom, form the bottom of all other settlement layers on top of them. And so this is essentially Coinbase doing that, recognizing that, executing that. I think this is the protocol sync thesis coming true. Pretty soon they'll have deposits to all of these layer twos. So there'll be a direct Fiat bridge from a Coinbase and all of the other

Starting point is 00:46:42 exchanges will also do this directly to layer twos. They will build products on top of these Slayer 2s, and I think this is very bullish for the future of bankless decentralized finance. If I remember reading this blog post correctly, I think there was also a call to action from Coinbase asking for people who want to, they're looking to hire people. And so if you know about this stuff and you think you can help Coinbase, they are looking for your attention and for your help. This is huge too, David. Metamask, our favorite browser extension wallet, just surpassed 10 million monthly active

Starting point is 00:47:17 users. Ten million monthly active users. Seems like we're just talking about the one million mark. That was maybe a few months ago, maybe six months ago. Insane growth here. It's got to be NFTs too. Like what else would it be? If you want to buy on OpenC, you got to use MetaMask. And you can also use Wallet Connect, but most people use Metamask. So, congratulations to Metamask for being the most bankless browser wallet ever, allowing so many people to actually take control of their own private keys. It's such an important concept, and MetaMask has made it easy. So they deserve all the success.

Starting point is 00:47:51 Yeah, absolutely. Huge growth story there. All right, let's get to some NFT stuff. We've got to lead with this story. 12-year-old kid. He just made $350,000 in ETH. How? By selling NFTs.

Starting point is 00:48:04 This was an article in CNBC that I saw last week. And I love this quote for him. They asked if he's going to sell. And he said, nope, I plan to keep all my ETH and not convert it to fiat money. I love that he said fiat money. That's so awesome. CNBC are like, fiat money? Do you mean like money? And he goes on to say, it might be early proof that maybe everyone doesn't need a bank, just has an eth wallet, just has an eth address and a wallet. I said the next generation is bankless. Look, this is a zoomer 12 years old. He's making his way,

Starting point is 00:48:36 making his first 350k in the crypto economy using ETH as his bank account. You think he's ever opening an account at Wells Fargo? Not if he can help it. If he does, it's only to pay like stupid bills. This kid is sold for life. And I think this is how the zoomer generation, Gen Z is growing up, right? They are like eating and breathing this stuff. Some of the innovators, like a 12-year-old kid, did this from his own home.

Starting point is 00:49:05 He was able to generate that kind of cash. I mean, he's telling all his friends. Like this is propagating on CNBC. Man, it's over. The world is going to be bankless and starting with the next generation. This also speaks to the power of actually using these things. We can talk about it and you guys can listen to podcasts and read articles, but it's a meaningfully different when you actually have an Ethereum wallet

Starting point is 00:49:30 and make your own transactions and actually use some of these infrastructure. That's when we had our podcast with Preston Pish about like Ethereum versus Bitcoin. And I asked him if he had ever used uniswap. And he's like, no, dude, I've never made like a transaction of Ethereum. I'm like, dude, what the hell? This 12-year-old kid can get it. And the difference between Preston Pish and this 12-year-old kid that this 12-year-old kid actually went and used Ethereum.

Starting point is 00:49:53 Yeah. It's just curiosity. Just use this stuff. We got a 12-year-old kid. We also have, in the bank's program, our favorite, Bill Ford, he is 77 years old. He gets it. And he's doing things with Meta-Mask. He's claiming tokens.

Starting point is 00:50:06 He's doing D-5, right? So that's a large span. So once again, 12-year-old kid, 77-year-old person. What's your running circles around everyone who hasn't touched Ethereum? Exactly. All right. Let's talk about this. Cryptopunks creator, Larva Labs, they just signed up with a major talent agency.

Starting point is 00:50:25 This agency is called UTA. I've not heard of them, but I'm not in the talent industry space. What did they do? Some kind of a business partnership. Vance Spencer explains it a little bit, David. But what's the summary here? Yeah, I'm also unfamiliar with this territory, but I think it's more just about allowing all the products from Larva

Starting point is 00:50:42 Labs, Cryptopunks, Mebits, Autoglyphs, to be part of, you know, like licensing agreements with like commercial like content licensing. So like maybe we see like just, you know, kids TV shows or the Cryptopunk in it. Toys? Toes? To crypto point toys. I don't know. I don't know how this works.

Starting point is 00:51:02 But I think this is kind of what we're diving into. I still have open questions about like what happens if somebody uses my Cryptopunk. Like do I get like royalty fees for that? or like, I feel like you should. I feel like I should. I bought it. I bought the damn thing.

Starting point is 00:51:17 Anyways, I'd still be happy to see my Cryptopunk on like Nickelodeon or something. That'd be awesome because you're the only owner of that legitimate Cryptopunk. So I guess you made this. The punk 1118, best Cryptopunk of all time. Even if you don't get a share of this,

Starting point is 00:51:31 then this also still kind of propagates the meme and benefits your crypto punk. At the very least, yeah. It's super interesting to see that play out. Let's talk about this. Board 8 Biot Club. They just sold 96. million of their mutant ape NFTs in an hour. And so this is a massive rage raise in and of itself.

Starting point is 00:51:51 We also have like major artists. This is the chain smokers. They just changed their profile picture on Twitter to a board ape. What's up with board apes? Are they, are they the new crypto punks? Yeah. I mean, they're the runner up. That's for sure. And this whole mutant crypto punks, if you can find some pictures of mutant cryptopunks, that'd be great because they're really, really creative. Yeah, the bankless editor Lucas put this well. I really like this. Somebody asked, like, yo, what happened to, like, the board apes?

Starting point is 00:52:18 And Lucas said, oh, they leveled up. So this kind of feels like an evolution of the board apes. Like, first they were just like, or normal board apes. And now they're mutant board apes. They had like a leveling up moment, an evolving moment. And so this kind of tells, like, the story of a particular set of, like, Ethereum objects is like they did something. They changed.

Starting point is 00:52:40 The story of the board eight meme has evolved with mutant apes. Mutant apes, I think, are actually way cooler than the originals. Okay, but can I ask you a question, right? So this is me just getting into NFTs, right? As you know, I've been on sort of like a mini quest over the last two weeks to just get up to speed on everything. Okay. Do you remember in the early days there was this criticism of Bitcoin, particularly from people outside of the space that just said, hey, Bitcoin's not valuable because you could just fork it. We create a Bitcoin diamond, create a Bitcoin gold, you know, create a light coin, create a Dogecoin, whatever.

Starting point is 00:53:15 And, you know, it will never be valuable because it's so inflatable. You could just create these new, you know, chains and in perpetuity, right? And so it's just going to inflate the value away. This was an early criticism of Bitcoin. What about that criticism for NFTs, right? So, like, if Bored Ape Yacht Club has now turned four to apes and created a whole new set, of, I don't know how many there are, but say 10,000 mutant apes, does that not dilute the value of the original board apes? And what's to stop somebody else from going and creating another

Starting point is 00:53:50 set of like 10,000 board apes that are, I don't know, robotic board apes or something like that? Does that not start to dilute things? What's your take there, David? Yeah, there's a lot to unpack there, actually. For one, like the mutant apes add up to the richness of the story of the original board apes. I don't know if this is completely true, but if you had a board ape, that doesn't mean you actually got a mutant ape. You'd also have to buy it with everything, everybody else. So there was no like original, like sometimes with Bitcoin, like when Bitcoin would fork like into Bitcoin cash, Bitcoin owners also got the Bitcoin cash, right? True. But Bitcoiners also say like every time that Bitcoin forks, it's just an

Starting point is 00:54:30 irdrop of free Bitcoin because you can sell that Bitcoin for the original Bitcoin. and that actually instantiase value back to the original Bitcoin. But there's also a difference to talk about, like, the punks are kind of considered like the Bitcoin of NFTs, like the original, it was valueless for such a long time. It's a shelling point. OG. But the difference between Bitcoin and Cryptopunks is that Bitcoin has a massive security expenditure budget.

Starting point is 00:54:54 And Cryptopunks or any other NFT, they don't because they're tokens on Ethereum, and they don't have consensus. They're just items on Ethereum. And so like that also kind of changes the conversation. Well, that would make me think they're more easily inflated then, right? Because Bitcoin at least has that moat where, hey, you're never going to achieve Bitcoin's level of security. If you're just kind of a fork or a new chain that's based on Bitcoin code. Whereas like every NFT has equal amount of security.

Starting point is 00:55:24 And it's all social consensus around these things. Yeah, but I would say it's also social consensus around what is the most valid Bitcoin chain. So it's all just social consensus. And that's why we have layer zero. All right. Well, turtles all the way down, David. God, Dave. That's it.

Starting point is 00:55:45 Walked right into that one. Well, let's talk Bitcoin stuff. What's El Salvador doing with Bitcoin? That seems to be the story for the last couple of months, but something new happened. They just approved a $150 million trust fund to support Bitcoin's ambitions. What is this? This is part of the original plan when El Salvador's. rolled this out, correct?

Starting point is 00:56:04 Right. So, yeah, this $150 million trust fund is committed to buying Bitcoin from El Salvadorian citizens who want to swap Bitcoins for dollars. El Salvador, before this whole Bitcoin thing, its national currency was the dollar. And now it's also Bitcoin. So now I have two national currencies. And this trust fund allows people to swap between Bitcoins and dollars for people that want dollars.

Starting point is 00:56:28 So that's what this is for. It's basically a $150 million. fund that will eventually turn into but only purchase Bitcoin over time. What do you make of all the protests that we're seeing? So we're starting to see these protests of El Salvadorians who are anti-Bitcoin, like no Bitcoin are holding up signs that say this in Spanish. Like what are they protesting and what do you make of this? Right.

Starting point is 00:56:52 So this is one of the big criticisms of this whole move is that Bitcoin is supposed to be free to money. It allows people to opt out. But then a nation state imposed Bitcoin upon. its citizens. Granted, it went from having one choice of currency to a dollar to having two choices, but now businesses are forced to accept Bitcoin. Now you can, there's our legal precedent for opting out of that, like forced coercion into accepting Bitcoin if you don't have the technology for it. But I think people are kind of just like, they don't really care and they just don't

Starting point is 00:57:24 want Bitcoin to be like a thing in their country and they're expressing that. That's really, it's really weird to see. It's kind of a juxtaposition I've not seen. So you'd see protests against Bitcoin or cryptocurrency for energy reasons, energy consumption reasons. But this is a protest from some citizens to their government saying, like, we don't want this thing as legal tender. We don't want to use this thing as money. And you're forcing us to. And that is like new territory. I'm not sure what the specific concerns are.

Starting point is 00:57:54 But that feels top down in a way that Bitcoin has never really been. It's always been this opt-in bottom-up movement. Now, I'm just wondering if this is like a backlash against kind of that approach. I don't know if it's a great look, to be honest. It's different than anything I've seen in crypto. That's why it's important to maximize choice. Let's talk about this. Jack Dorsey is still doing a lot with Bitcoin.

Starting point is 00:58:23 It looks like Twitter is adding the ability to tip using Bitcoin on Twitter. I don't know, man. This feels very like 2017-20-18 to me. Boss the plot. If you're Bitcoin or do you want to spend your Bitcoin? We talked about that. Like, probably not. Payments. Remember, payments. Payments using Bitcoin. Like, never has taken off. How not use stable coins? Like, it's just, yeah, any takes here? It's such like a, it's like, oh, Bitcoin's is innovating. We made tipping inside of Twitter. It's like, God damn it. Do something. Cool. The Bitcoin section in the weekly rolls are always famished, and I swear to God, we try and find

Starting point is 00:59:06 Bitcoin news every single time. And this is what we get. We get Twitter tipping with Bitcoin. God damn. That's all we have right now. It'll get better, though. Bitcoin's got a little story ahead, David. Never fear.

Starting point is 00:59:18 Not convinced. Okay. Let's talk regulation. I don't know about the growth story behind tether. So the province of Ontario has actually prohibited tether. Look at this list of prohibited crypto assets. A list of one. One bullet point.

Starting point is 00:59:33 Leather. It's interesting to me, though, that like nation states, I guess this is a province in this case, are starting to squeeze tether, maybe try to squeeze it out of existence. And maybe we'll see more of this for tether in the future. Probably not a good sign. Now, there are other more legitimate stable coins out there like USDC that seem to be taking steps to say, hey, we're not like tether. like look at the whole thing is backed by treasuries. You know, we have money in the bank account. We're

Starting point is 01:00:04 super transparent. So I think that USDC and other staple coins like it will probably win off of this move. David, do you have any takes on this? FTC acquired a crypto derivatives exchange Ledger X. I think Ledger X has some CME blessing or some CFTC blessing if I'm remembering correctly. Yes, they do. you make of this, this acquisition from SBF of FDX? I don't have too much of a take. I didn't even know what Ledger X was. I don't,

Starting point is 01:00:38 kind of like a small crypto CME, basically. Are we, our U.S. citizens are going to be allowed to use it? Yeah, well, they are allowed to use it. Oh, okay. Right now, it's kind of just like a mini CME features for crypto, I believe. It's my understanding of it.

Starting point is 01:00:53 I guess my take here is like, SBF is buying everything right now. Yeah. It's not Golden and Sacks, though. Not Golden and Sacks. Not, yeah, he's worked his way up to it. But, like, people have heard me say this before. That doesn't make me super comfortable.

Starting point is 01:01:08 I have this fear that what we might end up doing is just replace one set of bankers with a new set of bankers. And SBF is definitely a banker. It's in his name. Sam Bankman, Friedman. Yeah. And, you know, like nothing against him. He's a capitalist making capitalist plays. But like, I don't want to see that.

Starting point is 01:01:32 I want to see a more decentralized money system. So we'll keep monitoring this kind of activity. Do you see this, David? Speaking of centralized exchanges, crypto dad, John Carlo, he was the former head of the chair of the CFTC. He had joined BlockFi's board of advisors. And he just quit. So he just kind of quit. And we know BlockFi has been under increasing regulatory.

Starting point is 01:01:55 scrutiny for their interest products. So it's a little bit jarring to see somebody like Jen Carlo quit their advisor board. It seemed like in a sudden way. Do you have any takes on this? Yeah, it definitely feels like when Brian Brooks quit Binance just like months after becoming a finance US after like becoming its CEO, people just don't want to be part of companies that have like significant amounts of regulatory scrutiny. the BlockFi is going through like a securities issue. The SEC deemed their lending products to be

Starting point is 01:02:28 securities and they were currently fighting that fight. Meanwhile, also BlockFi was going through a raise. I don't know if the details of the fallout on that have come out, but it was a big question mark as to whether or not they would actually be able to pull funding as a result of after the SEC came and said that their products are securities. So that story is still unfolding. Yeah. And do you know if the SEC said this? My understanding is definitely New Jersey has raised some flags about it, maybe some other states. I don't know if the SEC has fully weighed in about it. I'm pretty sure that's true. Maybe a list needs to double check. Well, I do know it does look like here in the story, lead investor, third point LLC pulled out of their recent raise. So they were

Starting point is 01:03:08 partway through. They're getting some investors pulled out. There's some regulatory risk that's being raised in organizations like BlockFi. I do think they have a legitimate product and regulators needs to give them a path towards legitimacy. I mean, it's not a D-Fi product, but I don't know. I mean, do we live in a financial prison or what? I mean, block-fye interest account. I can't open one. Can't understand the risks.

Starting point is 01:03:32 We'll see how this turns out. All right. To wrap up this week in the news, we have to talk about this whole loot phenomenon. Ryan, have you been following this whole loot thing? I have a loot, David. All right, so there's this whole insane, insane loot phenomenon that has gone on. And it's really, really important, I think, as a concept. We don't know if this particular loop thing is going to be the thing that it promises to be,

Starting point is 01:03:54 but people have gotten really, really excited about it. And it's taken the NFT, Twitter sphere, defy people by absolute storm. And so... Can we explain what loot is first? Because what's so crazy is it's bizarre. It's just a list of text, right, David? Yeah. Maybe you should scroll down, you can find...

Starting point is 01:04:14 I'm going to go to OpenC and just like open... Type in loop. Yeah. Okay. So we all know NFTs. They are JPEGs. We're all trading JPEGs. And so these new NFTs came out.

Starting point is 01:04:25 And if you look on OpenC, it's just a black square with eight lines of text on them. And if you're familiar with, like, Diablo 2, a lot of these items came out of Diablo 2. Short Sword, ancient helm, mesh belt of reflection, the vine slippers of brilliance, necklace of skill, silver ring. These are all like loot items you would find in an RPG game. And so like what the hell is this like JPEG doing? with just a list of items. And it's important to differentiate what's actually going on here. When you buy these NFTs on OpenC or anywhere, you're not buying the JPEG. The JPEG is a reflection

Starting point is 01:05:00 of the properties of the token. And so there are properties inside of these tokens that have eight items inside of a loot bag. And these eight items, when you purchase the bag, you get all of the items. And so this has, this has like flip-flop to what an NFT is. Like previously, an NFD would be a JPEG. and it would tell you what it looks like. Now we have these loot bags, which are just a token with properties inside of them that are associated with items. And that allows whoever wants to manifest these properties to choose how to manifest them visually. Right. And so we have this great graphic by the Twitter account Tan Davos, who says a typical NFT is a top-down approach where the creator determines what it looks like.

Starting point is 01:05:47 and then the purchasers buy it. You know, the NFT just looks like that. But on the loot approach, we have this, like, bottom-up approach where the people around the NFT can build the game. They can create the avatar. They can write the lore, write the novels, and it's all bestowed upon one token. And so this is a complete, like, you know, paradigm shift

Starting point is 01:06:09 of what it means to have an NFT. And, I mean, there's so much energy that went into this in the last week that, like, God, it was exhausting trying to keep up. with it. It felt like defy summer. Okay, so let me make sure I'm tracking so far. So this is kind of like if anyone's played an MMO RPG, right, like a Diablo or a World Warcraft or something like this, this is almost as if that entire items list, including all of its rarity, was like exported, right?

Starting point is 01:06:37 And now it is, it's being exported and put on chain in these NFTs that individuals can buy. And each NFT might give you, you know, kind of like a certain set of. of items and armor and all of these things. But that's it. It's just like the bare bones export of this kind of scarce rarity system and list of items. And there's how many? Like, 7,500 or so of these loot drops? Yeah, yeah, I think there's, yeah, 7,500. But there's, but that's also just one component of it, right? Like, there could be more. It's, this is kind of like creating a community, creating a Tao in the sense that like all these people are participating. It's like, hey, I think we

Starting point is 01:07:14 should do this next. And some people, and like, not only do you, so, can you suggest it, but you can also just go and do it, and you can append on whatever you add onto these base, like, primitives, right? So why are people going and doing it, though? So I have two kind of questions for you on this. Like, one is, why are lutes so valuable right now? So, I mean, a few days ago, these things were like, what did they start? I mean, you could minted them for free.

Starting point is 01:07:38 Minted them for free. Like, you know, fair launch, right? Everyone likes fair launches. When I first looked, these things were trading at, like, half an eighth or something like that or one eath and I was probably later to the game right but now these things that you know that the floor rate is like 10 eath yeah we're losing is 12 12 last time I checked right before we recorded 30 40 50 e like so a why are they valuable right and like like be what like what like what do you do with these things why are they valuable the people are speculating that these items become like the epicenter

Starting point is 01:08:12 for the future metaverse right they are the first nfti tokens that don't impose what they actually look like upon their surrounding environment, and they allow the metaverse to come around them. And this is what I've wrote about my article this week, which is very much a part of the story. And I think, Ryan, if you actually go to that article, we can actually look at and illustrate what's actually kind of going on with this. And there's a few examples that we can talk about. First off, definitely read the article. It's relatively long, but it's, in my opinion, a pretty good definition for how the Metaverse is actually going to emerge.

Starting point is 01:08:46 And we, if you, if you scroll down Ryan to the, the loot section is going to be like most of the way through it. Right. Keep going. Keep going. Keep going. Right here. Okay.

Starting point is 01:08:55 Okay. So here's what the loot looks like on OpenC, but there are more specialized websites like 0x inventory. Dot app that actually illustrate the properties of these tokens better than OpenC does. And so you can actually see the colors of the rarity. of each of these tokens. If you want to scroll down around just a little bit more. And so think about this difference.

Starting point is 01:09:19 We have OpenC that is just like gives you eight lines of text and they're all white, but we have zerox.com, which gives you the same eight lines of text, but it also illustrates the properties of the tokens to a significantly more degree. It tells you the rarity of them. And so there's actually, this is a different layer upon these same tokens that express those tokens differently. And right now, like all of the, the, the different. difference between OpenC and this website is just that now the text is colored according to the

Starting point is 01:09:48 rarity of the object. But take that into like keep going with that logic, right? Like what happens when a website doesn't just like tell you the text of the objects but actually manifest the objects into a character's hand? Or what happens when you put on VR goggles and the token that you have in your VR wallet actually puts a heavy belt of rage on your on your character, right? Like this is where this is going. Okay. So that's would be insanely valuable. But like, now this kind of gets to the second part of my like two-part question, which is like, why are people actually building all of these universes and games on top of things? And like, what's the economic incentive for them to do that, right? So if I'm

Starting point is 01:10:31 building a massive multiplayer RPG of some sort, right? Of course I have to create like this scarce items engine internally. But that's because I'm building a game. And at the end of that game, I'm going to charge my customers for that, make money, and that's how the economic engine works. Why would somebody build on top of loot? Why not just, like, create their own? Right. So that's a really good question. And like, we're just going to have to watch this unfold in order to answer that. Some preliminary answers are that if you own a bunch of loot tokens, you kind of are incentivized to add on more rich parts of the universe on top of the loot tokens to give the tokens utility. Since you own the tokens, you want them to have.

Starting point is 01:11:12 utility because that makes them more valuable. So there's that. There's also you can build parts of the universe that you can charge for. So this is why my article, I think I super recommend if you want to dive deeper into the subject. And the point of the article is to illustrate how the metaverse will actually arrive. And the metaverse will arrive by a bunch of distinct, separate components becoming interoperable with each other. And so people who have, you know, all these loop bags have minted other things. And so, now we also have like ability scores that give you like a character strength nine dexterity seven constitution 13 and then there's characters which are actually literally illustrations of a character

Starting point is 01:11:52 uh Lucas of the editor I think actually I took out that photo but there's also realms and there's realms which are parts of literally maps like generative maps in the same way that art blocks are generative realms are also generative and I wasn't able to put it in my article because this came out this morning but now there's also gold and so there's a name now a fungible part of this like loot universe that is gold. And importantly, in order to mint gold, you had to give the creators 0.03 ether. And so they actually got paid for the creating that part of the metaverse, the gold part of the metaverse.

Starting point is 01:12:27 And so I think all of these are going to be stitched together. Like they're all kind of puzzle pieces, money Legos. In the same way that like Defi has money Legos for all the applications, like the Legos of Ethereum just, of NFTs just creates the Metaverse around the loot. And this concept is why so many people have gotten so excited about it. Because by not imposing a visual cosmetic layer upon these tokens, it allows the people around these things to impose their perceptions as to what these tokens are. And that, like, expressivity allows more things to be built.

Starting point is 01:13:00 It's like a writing prompt. Yes, yeah. The story's not written, but we've got this prompt. And I think you alluded to the economic incentive here. So, like, this is why this week has been so crazy for anyone who's gone down, this rabbit hole and purchase some loot is because it's not only purchasing loot and like speculating on on that entire market, but all of these derivatives that you generate, like the abilities and the characters and the realms that you're mentioning, even the adventure gold that you mentioned, you actually

Starting point is 01:13:29 have to own, you have to own loot in order to mint those things and participate in those other products. And also, like these things just keep spinning up on a daily basis, maybe multiple times a day, these new kind of like loot derivative products, it's kind of clunky. Like, in order to claim them, you have to go to ether scan and, you know, like, you know, you're interacting directly with the smart contract. There is no website. There's only ether scan. There's no website to do this, but everyone's speculating that this entire loot universe is going to be absolutely massive. And these are the economic incentives that essentially, like, inject energy into this entire system. It's because now you have this entire loot economy. And if you want to, you know, create a new

Starting point is 01:14:15 product on top of it, then you can charge a fee for that. Maybe like it's some fee when, when things are minted. And like, it's very organic and very weird. Very bottom up. Decentralized, right? Very bottom up. But also magical. Like, I think, I think skeptics will look at this and be like, but guys, you didn't actually do anything. Yeah. And it's so true. Like, there's no game. What are you talking about. All I see is, you know, a list of seven words and somebody's going to pay like $20,000 for that. This makes no sense, right? But I don't know. Something about it makes more sense when you put on the like the framing of the Metaverse and this collective building that we're doing to bring it about. So people are speculating that these like loot tokens are like

Starting point is 01:15:07 the Cryptopunks of the Metaverse, right? They're the very first ones, they're the zero to one moment, and they're going kind of in the same way, there's like the fat crypto punk thesis where all NFT value gets pushed down to crypto punks because they're the OGs. Like the people are speculating that these loot bags are kind of like the same thing for the metaverse. And so that energy behind that speculation can actually like manifest it into reality. Because if enough value goes into these tokens, like, well, there's enough incentive to actually build the damn thing because of all the speculation that's going into them. So weird.

Starting point is 01:15:39 also so cool. I can't wait to see this experiment unfold. There is an element, though, does this feel like a massive multiplayer game only for the rich, though? Like, you have to fork over some significant cash. Or you have to be early. You need to be wealthy or you can be early in order to get in on this. What's your take? Yeah, so the original 7,500 loot bags, like if the community wanted to mint more, like, and if we collectively decided that that was a legitimate choice, and I think that's possible. That's possible for the community to do. And so that might actually be a route for funding. Say like enough contributors, dedicated contributors rise to the top and maybe some team forms around this loot ecosystem. And maybe that team needs funding. Maybe they fund themselves by minting more loot bags so that instead of just having 7,500 bags, we have. enough for the whole entire planet to play in this whole RPG. Now, the cool thing about this loot thing is that, like, when we talk about RPGs or Diablo 2 or like my favorite RPG was Borderlands, like, we're talking about just items inside of

Starting point is 01:16:45 that one game. When it's on Ethereum, it's an RPG for the whole entire internet, right? And so we are increasing the scale as to what this, where and how this game can be played. So, like, and ultimately RPGs are just life. You go through life, you acquire items, you put them on your bookshelves, you acquire new skills, you level up, and now we're doing it on Ethereum, and that is what is creating the metaverse. So bring your item, bring your loot item into any game. Right. Basically, that supports it.

Starting point is 01:17:16 Right. And any game that answers to the properties of the tokens is a part of that tokens metaverse. And the loot community is economically incented to propagate loot everywhere. So we actually, like the Lute community actually wants to talk to you, you know, Blizzard or Epic games or all of these like game publishers and get them to support Lute, right? Yeah. Maybe like provide grants for new games to support Lute. Sure.

Starting point is 01:17:42 And like the interoperability nature of Lute incentivizes it kind of in the same way that like, Taco Bell allowed, like gave out free CrunchRap Supremes to Doge like coin holders, whatever. Right. We've got free marketing, free engagement, free customers. Composable community. Posable communities, right? And so, like, games can be like, hey, like, we included loot tokens. Like, now you can play our game with loot tokens.

Starting point is 01:18:07 And all the loot token holders, like, yay, we reward you with our engagement. And now we're actually going to play your game. As crazy as this sounds, like, I think this is why the crypto is feeling like this is a new unlock. It really does feel like that. It feels like a paradigm breaking moment, for sure. Yep. We unlock something new here. We're in uncharted territory, and it's going to be exciting to see where this goes.

Starting point is 01:18:28 Yeah, extremely speculative, extremely risky. Nothing is certain. This could just be the top of the NFT markets. Who knows? It could be that too. We could look back and be like, we were paying what for lists? For lists of tokens? What?

Starting point is 01:18:42 That was the bubble. We thought people were going to build it? Like, that's crazy. Why would you think that? You never know, guys. That's the fun of crypto. Guys, we will be right back with the takes for the week. and of course the meme of the week, but before we do, we want to thank the sponsors that made this

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Starting point is 01:19:39 for you. Another product I'm stoked to get my hands on is the Gemini crypto-back credit card, which gives you 3% cash back on all of your purchases, but paid to you in your preferred crypto asset. When I get my Gemini credit card, I'm going to make sure that I get my cash back in ETH. So whenever I buy something, I get a little bit of ETH bonus back to me at the same time. You can open up a free account in under three minutes at Gemini.com slash go bankless. And if you trade more than $100 within the first 30 days after sign up, you'll be gifted a free $15.5 Bitcoin bonus. Check them out at Gemini.com slash go bankless. The AVE protocol is a decentralized liquidity protocol on Ethereum, which allows users to supply

Starting point is 01:20:21 and borrow certain crypto assets. AVE version 2 has a ton of cool features that makes using the AVE protocol 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 supply to the protocol in order to gain yield, and all of those same assets can also be borrowed from the protocol if you have supplied collateral. Here you can see me borrowing 200 USDC against my port of a number of different defy tokens in ETH. I'll choose a variable interest rate because it's a lower rate than the stable interest rate option, but I could choose the stable interest rate option if I wanted to lock in that interest rate in permanently.

Starting point is 01:21:04 V2 also features the ability for users to swap collateral without having to withdraw their assets, trade them on un-swap, and then deposit them back into AVE. With AVEA, users can do this in one seamless transaction, saving you time and gas costs. check out the power of AVE at AVEA.com. That's A-A-A-V-E.com. All right, guys, here are the hot takes of the week. Let's start with this one from Alex. Defi brings the capital.

Starting point is 01:21:30 NFTs bring the people. Capital, people. Defi for capital. NFTs for people. What do you think, David? Short, sweet, to the point. These memes about how defy operates and how NFTs operates are getting more concise and more punchy.

Starting point is 01:21:44 I like it. I had this take. this week, David says Twitter should roll out a blue check mark for NFT profile picks. Just validate them against Ethereum. Every social network will be doing this soon. It's the most obvious feature ad ever. Dude, I feel like it's the most obvious feature ad ever. No, no, no, no, no, Bitcoin tipping.

Starting point is 01:22:04 Bitcoin tipping. That's why I was getting, like, meanwhile, we're doing that with Twitter. I mean, if social media is asleep at the job, new social networks will come up to actually use these valuable NFT items as profile pictures. as items in their universe, use their lore, and leapfrog them. So I think Twitter will be forced into doing this, but it just seems to be the most obvious feature ad ever. It's like, I know you've seen some people who are kind of plagiarizing, I guess,

Starting point is 01:22:34 your crypto punk. And anyone can do that. It's true. You can right click. But if you had a social network that was like enforcing the validity of that punk and like verifying that on Jane and putting kind of just a simple. checkmark, this is valid or not. I mean, it just seems so obvious you do that. And by the way, that would inject a tremendous amount of additional value in the NFT economy because if that becomes

Starting point is 01:23:01 a standard and all social networks do that, then like the whole right-click save thing becomes completely delegitimized. Like you can't right-click save because you have a fake Cryptopunk and anywhere you propagate that on the internet in the Metaverse, it's going to show up as a fake. NFTs are a social phenomenon and any, like, they are absolutely belong in any and all social media platforms. They are, they're people flexing, flexing their stuff and they do that on social media. So the profile picture avatar movement, I think has absolute staying power.

Starting point is 01:23:36 And also to the point, like, crypto is rampant with like scams. I see fake Ryan's all the time trying to DM me and get my ether from me. But if I was... It's actually me, David. I'm trying to get your ether. You're making your own account. But like imagine if like all these, you know, Vitalik impersonators or whoever impersonators had to put an NFT as their profile picture

Starting point is 01:23:59 and couldn't verify their ownership of that NFT. Like all of a sudden this becomes extremely easy to differentiate impersonators versus non-impersonators because NFTs are unique. Another part of my Metaverse article talks about how human identity, human identity of the human spirit can actually be captured by Ethereum addresses on Ethereum based on the NFTs that they interact with. Every NFT is its own object. And as an Ethereum address, you have your own story.

Starting point is 01:24:26 And the story that you write is of the NFT objects that you come to interact with. Yeah, you could be a turtle or you could be a cryptopunk in this new economy. Yeah, so cryptopunks are way better than turtles, by the way. Yeah, but you know what's cool too is we did this article with Brantley from ENS about single sign on for Ethereum, right? It's always like, oh, that would be cool if we had the ability to just sign on to every app using a private key, an ether private key, right? But the question is like, oh, how is that going to happen? Why would new platforms adopt it? Maybe it happens because NFTs are awesome, right?

Starting point is 01:25:01 Like, and your public private key pair owns an NFT and has to own an NFT. So that could be a way to propagate like a public-private key, single sign on Ethereum everywhere. Because if you have that NFTE functionality, you're already doing like 90% of the work to integrate that. Anyway, super cool. Let's do this take. Diamonds versus JPEGs. Which would you rather have, David? Yeah, Tasha says, carrying a rock around your finger is no less absurd than buying a rock JPEG on the internet.

Starting point is 01:25:31 If you can't appreciate the absurdity in all human rituals, you'll be a slave to past rituals, not a creator of future ones. Such a punchy take. It almost has 10,000 likes. That's crazy awesome. So this is why it's important to stop being skeptical on NFTs. You don't get to right-click, save them. And she hits this so hard at the end. You'll be a slave to past rituals rather than create future ones. That's so awesome. Get on board with the NFT train people. Look, it's memes all the way down. And Cryptos just exposing the fact that it is, and it always has been. I love that take. Let's see this, David. So Vitalik did this experiment on Twitter. So he follows 268 people, and there's a Twitter setting where you can only, you can set your replies to only the people

Starting point is 01:26:20 that follow you, basically. And so he did, and it didn't prompt to ask me anything on Twitter. A lot of interesting questions and answers arose. But this is one of my favorites, David. But someone asked him his biggest regrets in his Ethereum journey and had to be non-technical. And Vitalik said the whole eight co-founders thing in choosing them so quickly and non-discriminately was his biggest regret. Super interesting insight there. This is definitely like a hindsight 2020 thing, right? Like when you don't know how big Ethereum is about to become, you're trying to just

Starting point is 01:26:53 get this out the door. You choose to help you do that. And then you accidentally choose people like Gavin Wood. And co-founder of Cardano? Charles. Charles. Charles. Yeah.

Starting point is 01:27:05 Like, hmm. Of all the, of the Ethereum co-founders, Italic is the only one that's left. Except Joe Lubin is kind of on the periphery-ish. Oh, yeah. Was he a co-founder? Yeah. Was he one of the eight?

Starting point is 01:27:18 Oh, okay. Yeah. He's one of the eight. Okay. Joe Lubin definitely counts. Absolutely. Okay. Yeah. There's still, too many of them forked off and did their own thing.

Starting point is 01:27:26 Many of them, like, many of them forked off did their own thing. You know, didn't really help Ethereum. that much. Others just totally dropped out, like just didn't really develop the idea beyond the initial months. You've read The Infinite Machine by Camry Russo, right? It goes through that entire story, and you could see it. The thing that Vitalik said was good, though. It's three favorite podcast, Bankless. Number one. Top one he listed. Number one. I'm sure he put it in order. Wow. I'm sure he put it in order. Two other podcasts. One is called rationally speaking, which I've not listened to.

Starting point is 01:27:59 And his third favorite, hardcore history, which I absolutely love. So, man, huge honors there, David. I saw that tweet come out last night and I was just like, oh, my God. You know, this feels good. I was able to ask Vitalik my question because Vitalik follows me. And my question is, how do you define the Metaverse? And he gave in a single tweet the same definition that I gave in my like 20,000 word article, which is even more reason why you need to go read the Metaverse article.

Starting point is 01:28:27 that I put out on bank lists not too long ago. Yeah, absolutely. He also did this, David. I guess Elon Musk asked him a question, what is love? I don't even know how to pronounce this, but then Vitalik responds with Elon Musk's kids' name that he has with Grimes, which is like X, A-E-A-12, don't hurt me.

Starting point is 01:28:51 It was what Vitalik said. So Elon Musk says, what is love? And then Vitalik responds, child's name, don't hurt me. So like, you know, doing a little bit of a meme, which is, this is going to become important very soon. So I was not in pop culture. I was not plugged in enough to know that Elon actually named his kid this, like a series of symbols. I don't even know what this means, do you?

Starting point is 01:29:12 Yeah. Okay. The A12 is the SR 70-20, S-R-71 plane. The version that came before the SR-701 was called the A-12. And so they named it one part after a plane X. And each one of these things has reasons behind them. They're all stupid. Don't name your kid this.

Starting point is 01:29:30 You're not cool, Elon. It does have a correct pronunciation. I don't know what it is. Well, it's been done. So, you know, the child's there. Maybe he'll go by 812. Who knows? David, give me this last, take us home with this last take.

Starting point is 01:29:46 Yeah, I tweeted this out right before we did this roll up. I said, can we please just pause all Ethereum blocks this weekend? We can resume after Labor Day. I need a break. Brian, this week has been absolutely exhausting. Not only have we done like 17 shows this week, but we also had this fucking loot phenomenon, which takes forever to keep up with and moves.

Starting point is 01:30:08 It's almost a full-time job just to keep up with that. And like, God damn, dude. Like, I also, we also have three shows today and three shows tomorrow. I mean, did you call this Ethereum Brain? I called this Ethereum Brain. And Eric has a great take like right under me. He goes, have you ever seen the 1950s horror film? blob. It's basically Ethereum. It traps us and we can't get out. Apparently there's a movie

Starting point is 01:30:30 about like a blob that just like sucks everything in. This is this is what Ethereum does. It sucks you in and it doesn't let you leave. Mental energy, time, capital, every single asset. Like I can't be mad because this is so amazing and exciting in the future, but it's hard to do anything else in the real world. Guys, if you're feeling that Ethereum brain, that fatigue, what's the best advice you have, David? I mean, this is what, okay, so this is why, everyone should also listen to the Layer Zero podcast that I did with Eric that came out this week. We talked about strategies. And he talked about like, it's just like quitting cigarettes or like quitting drugs or like quitting alcohol or quitting whatever like you're addicted to. It's a skill.

Starting point is 01:31:10 You have to learn how to like take a step back and like do something else. Because if you don't, like Ethereum will suck up all of your time. It will give you, it will suck up as much time and energy as you give it. It totally will. So if you feel yourself going down that, that, track and have some Ethereum brain, like encourage you to take some time away from screens. Just take some time over the weekend, maybe this Labor Day, relax, enjoy some time with your family. Don't worry.

Starting point is 01:31:35 Bankless is holding it down. We will be releasing weekly roll-ups. We will take that energy off of your shoulders and put it on ours. I mean, some people, like, look, man, how many podcasts do we do every week, right? Like five of week plus the newsletter, plus everything, right? There's a lot.

Starting point is 01:31:50 Some people, you know, just listen to the weekly roll-ups. And that's kind of enough for them for some weeks, right? And then they go back and listen to other episodes later, right? So anyway, be careful. The space can do a number on you. Crypto addiction is a real addiction. And it can exhaust you. It can, you know, you can miss out on things in the real world.

Starting point is 01:32:11 Right. Yeah. Ethereum is redefining humanity, and it will also take your humanity from you if you let it. I feel like we're speaking to ourselves. Yeah, we got, we need some goddamn therapy. All right. Wait for new NFT. Somebody drop an NFT so I can get distracted.

Starting point is 01:32:31 All right. Let's get to this. What are you excited about this week, David? Oh, God. I'm just excited, man. Like, I don't have a single specific thing, but, like, there's so many things to be excited about. It really feels like the stars are aligning for Ethereum.

Starting point is 01:32:46 Like, there are so many things that are happening on Ethereum that are making it more and more useful for the outside world, also making more and more sense for the outside world. even though like million dollar rocks are kind of crazy, like at least you can talk about them. EIP-1559 is outperforming everyone's dreams. We get all these numbers and things to look at. So that's crazy. There's also this NFT mania going on, which is really letting time fly. And all of a sudden, like, proof of sake is just going to be here.

Starting point is 01:33:12 So that's really exciting. There's just so much to be bullish about. And like, you talked about it in the market section. Like we're kind of getting out of this like crab season and starting to get bullish again. Like it's super. It's the super cycle, man. Supercycles back on the menu. It's just going to be like so much crazy.

Starting point is 01:33:27 Wait, Supercycle and then crash, you think? No. We're going up, up, up, up. Up only. Up only. I mean, we'll have a bunch of little crashes, but they won't be as much as they are up. Yeah. We're never going to see a negative 95%?

Starting point is 01:33:39 No, never. Never. Never, never, never. Not financial advice. I mean, 50%, 50% crashes over and over and over again, along with like 300% runups. There you go. Supercycle. Anyways, that's what I'm excited about.

Starting point is 01:33:53 I'm excited about being excited. That's good, man. What are you excited about, Ryan? I think I'm excited about the metaverse this week, right? Did you read an article? I read that article. It's absolutely fantastic. We asked Rao Paul what his definition of the metaverse is.

Starting point is 01:34:11 He said digital fluidity, which is super interesting. But we've had the internet for a while, and people have, do you remember that came like second life? Yeah. I don't know when that came out. But I'm just like, oh, this is how humans are going. going to spend their time and we're all going to be in this virtual world. And you know what I think the thing that's been missing from all these experiments in the past is it's Ethereum, right? There's never been an organic economy on top of these systems. There's never been a property

Starting point is 01:34:40 right system. There's never been like a center of commerce. It's always been built more like the metaverse and virtual reality experience have always been built more like university campuses rather than like cities. You know, like a city is like organic and, you know, it's like there's different sectors and different groups and it's very chaotic. It's very bizarre rather than cathedral, right? The Metaverse hasn't risen up because it's basically been all, you know, cathedral based. And I think the Ethereum piece is going to accelerate the movement to the Metaverse.

Starting point is 01:35:17 And, you know, some people might not like that. Some people like the physical world, but I just feel like it's inevitable, right? So it's kind of like you may not like that JPEGs are so valuable, but like by resisting that movement, you're just going to disconnect yourself from the wider movement that is humanity. And I don't know, you're going to phomow in later. I don't know, you're going to realize it on the back end of this. I want to be pressing into the frontier of the metaverse. And that's the thing.

Starting point is 01:35:44 The experiments are going to get weirder. there's going to be massive opportunities for everyone who discovers this early. So I guess what I'm excited about is the Metaverse and the invitation of opportunity is like, plug in now. We are so, so early. This whole loop phenomenon is just like another unlock and we'll see where that goes. But it is so early to be here. But make sure you're here.

Starting point is 01:36:08 Make sure you're plugging in. Yeah, just think about how valuable the Metaverse is and how fortunate and lucky we are to be at the beginning of it. I think people all have the conviction that whatever the metaverse is, it's coming. And I think there's a very valid case that it is being built because of property management system of Ethereum actually instantiating objects into the metaverse, whatever the metaverse is. And you are watching that in real time and you get to tap into the value that is created.

Starting point is 01:36:36 And so like that's why there's so much like energy and excitement on this loot phenomenon. And that is just the beginning, right? Like, there's going to be so many more loot things that come out. And if you are paying attention and if you are on the ride, like, you will be able to take advantage of the creation of the metaverse. You are watching the metaverse being born. Make sure you have stories to tell your kids about how you were there. But also take breaks.

Starting point is 01:37:01 Also take breaks. Sometimes. Also take breaks. Not too much. All right, David, meme in the week time. Hey, this art piece is phenomenal. Explain this art piece and then we'll get to the meme. Yeah, so this is a famous Renaissance painting out of the romantic era.

Starting point is 01:37:16 And it's, I can't remember, it's like journeymen standing on frog over sea storm. Just a very just like romantic image of this guy, like looking over this vast, like foggy sea, ocean. Again, like it's a, it's a meme of the romantic era of the Renaissance paintings. And now we have this. And so this is the same image overlaid, but instead of the guy standing on the sea rocks, He's standing on an ether rock, which is going for like $400 million. And then there's just a sea of JPEGs in front of them. And also this guy is now an alien crypto punk with a beanie.

Starting point is 01:37:53 This is the new frontier. This is the new frontier. Yeah, absolutely. Great meme. Guys, thank you so much for hanging with us. Of course, none of this has been financial advice. Heath is risky. So is defy.

Starting point is 01:38:06 So is Bitcoin. So is everything in this space. but we are entering the Metaverse. This is the frontier, and we're glad you're with us on the bankless journey. Thanks a lot. And if you're on the YouTube, get ready for our moment of Zen. What is love? Oh, baby, don't hurt me.

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