Bankless - ROLLUP: Binance Commingling User Funds | Ledger Recover Postponed

Starting point is 00:00:00 Binance, accused of commingling customer funds. I'm sure CZ would call this FUD. Bankless Nation, it is the fourth Friday of May, the last Friday of May. David, what time is it? It's the Bankless Friday Weekly Rollup where we covered the entire weekly news in crypto, which is actually not that ambitious this week. I would actually call this a slow week, which I don't think I've ever said that before. Slow Week and News. Slow Week and News. Yeah. That's why we have some weird takes in the take section. Yeah, that's why the takes take kind of weird. Yeah. It's just a sleepy market maybe. I mean, we called this the bore market before. Is that what we're in for, more of the bore market?

Starting point is 00:00:39 It's going to be a boring roll-up, David. Is that weird? No, it's going to be extremely exciting. Stay tuned for every single second of it and don't go away. Well, let's talk about the topics of the week. So continuation of ledger, ledger recover. They're actually capitulating on that. They're postponing it.

Starting point is 00:00:57 So we'll talk about that. What else we got? DCG has missed its payment deadline. to its own subsidiary genesis. So we'll talk about what that means. They're not paying themselves. Yeah, they're not paying themselves. They failed to pay themselves $630 million. So what is the fallout of that? We will cover that as well. Tornado Cash, did you hear about this, right? Tornado Cash got hijacked. I did. A governance attack over tornado cash. It's kind of funny just because like it's tornado cash. So like it's gotten hijacked from the nation state and now I've only

Starting point is 00:01:30 Two people are hijacking it. And then what else we're going to talk about? We got this Fed report that came out. Okay, the Federal Reserve. Did you know one in ten Americans use cryptocurrency? Who's telling us that? The Fed! We got to get into this report.

Starting point is 00:01:45 There's a ton of really cool stats coming out of that. And also, Binance was accused this week of co-mingling customer funds and company revenue. Got some more info on Doe Kwan as well. Some of the bad boys of crypto finishing that up. So look, man, it's still a good roll up. It's still a week. It'll also be my last roll-up here in Montenegro, right?

Starting point is 00:02:05 It'll be the very last one. Are you going to miss it? So long, Montenegro. So long, Montenegro, yeah. Will I miss it? I have, well, my experience here has been great. I want to go home. You've been away from your home for like months now, right?

Starting point is 00:02:20 Eight weeks. Eight weeks. That's the longest I've been away from home since college. I only miss your time in roll-ups. There's 52 roll-ups a year. David's been gone in Montenegro. for eight roll-ups. You're coming home.

Starting point is 00:02:33 The next roll-up in New York City, that's very exciting. I'm going to be some good old brick in the background. Anyways, got to talk to our friends and sponsors at Consensus who want to let you know that there is this new tool out on the market called diligence fuzzling to level up your smart contract security. So this is a tool in addition to your regular security audits. Fizzing is a tool that developers who this ad is targeted towards would probably already know about. You throw a bunch of numbers at your parameters, and if any number comes back and it's a bad number,

Starting point is 00:03:06 diligence fuzzing from Consentis will figure that out for you. So there is a link in the show notes to go get your contracts fuzzed. David, I'm sure all the devs really enjoyed that super technical description of what fuzzing is. Because they totally need it. But do you know what? It was not inaccurate. I think that's exactly what fuzzing actually is. And this is a free tool from Consensus.

Starting point is 00:03:27 I hope more solidity devs take fuzzing seriously because we can have... It's a very serious subject. Yeah, we can't have more smart contract hacks, okay? Not in 2023. Defi can't take another hit like this. We've been down bad, guys. Let's fuzz all our contracts so this doesn't happen. All right, get to the market, shall we?

Starting point is 00:03:46 Okay, Bitcoin price on the week. What are we looking at? We can count it as not a flat week if we really want to. I want that. I want that. Down 1%. Better than flat. Start of the week.

Starting point is 00:03:57 at 26,600, ending the week at 26,300. 26,000, okay, below 30K still feels bearish to me, just like below 2K, ETH still feels bearish season. And this was, Bitcoin Miami was last week. Was it, wait, was it last week or did it just finish this week? It was last weekend, yeah. This is a time to really rally the troops, isn't it? I mean, haven't we seen previously Bitcoin Miami Weeks a little bit of a push-up,

Starting point is 00:04:23 a little bit of a spike? Or is that just all chart noise? am I making things up? I think last year it dumped. Yeah. Conferences tend to dump. East conferences, Bitcoin conferences. It's a pattern.

Starting point is 00:04:38 People get together and they get like, they're like, oh, man, this is who I'm surrounded. No, no, we just throw super dumb, exorbitant parties and we have to sell our assets to pay for them. Oh, you think that's it? I don't know. Yeah. All of these events that all the VCs throw, yeah. Well, it's interesting, Bitcoin, Miami. me. I didn't hear much about it. The only thing I heard was kind of the contention and the conflict between the ordinals, the Taproot wizards, or something in the laser eyes, which is sort of the subtribes of this if you're in Bitcoin or circles. We had some of the-

Starting point is 00:05:10 But I think that's also mostly online, too. Yeah, I think that's totally online. The actual conference, yeah. It was, there was no, the things I heard from the Bitcoin conference was that Eric Wall and Udi Wertheimer is going up against the Cyber Hornets, which was mostly in an online phenomenon. And then all the things. Also Ron DeSantis's. No, wait. No, not Ron DeSantis. Who's the Kennedy, Robert Kennedy speech. Robert Kennedy. Yeah. Those are the two things. Yeah. Okay. And yeah, we're going to talk about Ron DeSantis a little bit later. It seems like there's a little bit of red versus blue on the crypto thing. It's becoming more partisan. But that's not in the market section. Yeah, we've got to do some more numbers. All right. Eith.

Starting point is 00:05:48 Heath price. Sadly, I would count this as flat. We started the week at 18 and 10, 1810, ending the week at 1750. We're down 0.8%. Sorry, Ryan. It's flat. Ratio time. Ratio time. Is that flat too? It's up a little bit. Up a time a little bit. You know what? Any flat week, I'm going to be sad from now on because I just like, so boring. Would you prefer down? Apathy. Yes. Make up your mind, Market. We're going up or down. Stop with this tepid. Do something. I'm bored. I can't stand it. Spue it out of my mouth.

Starting point is 00:06:23 Thanks to the crack and charge. Okay, something that is still up only is ethestaking. Oh. So Lido had, now that Lido, the largest decentralized take answer service protocol, has withdrawn, enabled withdrawals. We are able to see the final org of Eastaking open up its gate to withdrawals. And so now this is like complete. There's no one left to enable withdrawals.

Starting point is 00:06:48 Yep. We are at all-time high of staked ETH. 21 million. We crossed 20 million of stake to ETH this last week. So the acceleration of further ETH stake into the beacon chain continues. Has continued to accelerate. There's two million ether, not two million dollars of. There are two million ether units waiting to get into the beacon chain in the validation queue. It would take you, Ryan, if you deposited 32 ether to get to be a stake, it would take you almost 1,000 hours. I don't even know how many days that is. 967 hours to get into the beacon chain.

Starting point is 00:07:28 How many roll-ups is that? 967. About four roll-ups. Because these things are forever, because we keep on doing these rants. 40 days. It would take you 40 days to get into the beacon chain. That's a long time.

Starting point is 00:07:42 I mean, 40 days. That's a lifetime almost. Yeah. It would take you two minutes to exit. So how are people? getting in. They just wait, I guess. I have to be patient. Or you could just buy steak teeth. I bet you there's a premium on steak teeth right now. When does it stop, David? We're going to go from 20 to 22 to 25 to 30 million to that's what it stops.

Starting point is 00:08:04 Isn't this what Justin Drake said recently? He's like, I think it'll probably be like 30 million-ish. Or we stop, you know, plus or minus 15 percent, something like that. The momentum is very strong. The fact that we are like doubling the rate of growth post-witralls is awesome. It's going to stop. This is not an up-only chart, though. There is some equilibrium. This is some equilibrium that will be reached. And, yeah, I mean, we don't want to see this chart go up only.

Starting point is 00:08:30 But for now, it's good. Good news for now. You know, we skipped a number, David. Crypto market cap. 1.15 trillion. There, I said it, for completeness. What chart are we looking at with Lido? Yeah, so this is Lido withdrawals after one week.

Starting point is 00:08:44 Okay, so a whopping 450,000. in ether got withdrawn from Lido. And I'm saying whopping jokingly because do you know how much ether is actually in Lido, Ryan? Of 20 million? Yeah. 21 million, ether? I'm going to say,

Starting point is 00:09:03 what's Lido have like 30% of that? Something close. You're on target. $6,7 million, something like this. Wow, nice job. 6.7 million is how much ether is deposited in to Lido. So 530, excuse me, 470. thousand ether got withdrawn.

Starting point is 00:09:21 430,000 of that was Celsius. 40,000 ether was withdrawn just by like general users. Oh, Celsius. I remember those guys. What are they doing with it? Paying down some debts there? I think, yeah, I think they're selling. Refunding some depositors? Uh-huh. Yeah, they're

Starting point is 00:09:36 liquidating it. Yeah. So Lido, I would say has held up in terms of the snow globe effect. I mean, they lost half a million ether of their 6.6 million and most of that was Celsius. Yeah. Rocket pool took the largest share of 7,700 ether, not that much.

Starting point is 00:09:55 Yeah, not that much. So what is happening with all the this light out? It's not being restaked. It's just going back to kind of Celsius debt holders, I don't know. I'm assuming whoever is doing the Celsius bankruptcy is liquidating the ether. They're selling it for dollars, right? Yeah, I don't know. I would assume. I'm, by the way, some of this eath is probably mine.

Starting point is 00:10:16 Tiny fraction. Remember that's money in Celsius? I love banks. I love banks. Looking forward to never getting that back. They're going to sell your ether for you and give you back USC. I mean, to be fair, though, to Celsius, this is probably the best, the most rational place they actually stored their eth. Because they put it in all sorts of other.

Starting point is 00:10:40 Yeah, they bought a Bitcoin mining operation. It's the stupidest thing to do with customer. funds. Oh, man. Those are the days. I hope we never do that again. Like crypto in general. Knock on wood, please. Okay. Let's talk about the bigger picture markets, all right? Because the R word, that is, recession, was bandied about this week in Germany. A German economy entered recession as inflation hurts consumers. That is the title here. So the German economy is officially in recession under the economist definition of that word, which is multiple quarters of negative GDP.

Starting point is 00:11:23 So we're there yet, we're there already in Germany. Is this only a matter of time before recession sweeps through other areas of Europe, comes to the United States? Do you have any takes on that, David? Well, I think the people paying attention to macro all understood that recession is coming globally. It's as a matter of how fast and how hard and for how long. the idea of being announced that we are entering a recession kind of just seems illogical.

Starting point is 00:11:51 It's like to mark it downturn. We need an arbitrary definition of whatever recession is in order to be able to announce that we are in one. But yes, we are entering a phase of slower growth. Well, there we are. Slower growth. And this is not just slower growth. It's negative growth.

Starting point is 00:12:06 That is the economist definition of recession. Meanwhile, this to me was the chart of the week. This is from Genevieve, a chart on buying versus renting in America. And there's two lines on this chart, all the way from the 1970s. This yellow line is the cost to buy in terms of monthly fees. How much does it cost if you are in a house, let's say, or in an apartment, and you own that piece of property versus the cost to rent. That is this blue, I guess, turquoise type line here.

Starting point is 00:12:37 And it's interesting how they're kind of the lines are sort of correlated, in that they go off together. But there are these periods of time where the cost to buy far outstrips the cost to rent. And I think these periods of time sort of resemble bubbles, housing price bubbles, for example.

Starting point is 00:12:56 So we see this one in 2006. That's where the yellow line shoots far above the blue line. So the cost to buy is much more expensive than the cost to rent. Now look at things today, David. And this happens. it's COVID, we've got a yellow line that has far outstripped the blue line. That means the cost

Starting point is 00:13:17 to buy right now, $2,700 per month is the average cost per month for a mortgage versus the cost to rent is $1,850. Why is this happening? I mean, to me, this just looks like asset price inflation, particularly in the housing market, particularly in the property market. And I know this is hitting younger people disproportionately. People are in their 20s in their early 30s, never purchased any property, never bought a home. And they're like, I never will be able to do this thing. And you're asking for 10% down, 20% down in order for me to also buy this property, I can't afford it. I'm just going to be renting for the rest of my life. That's how it seems to many people in the economy. And I think this has a psychological impact, too. Do you have any

Starting point is 00:14:05 thoughts on this chart? Yeah, it's hard for podcast listeners, so I think really appreciate appreciate this visual. So like the cost to buy line deviated away from the cost of rent line like three times in this chart. Once in the 1980s during the mortgage rate inflation of the early 1980s, then a second time in the housing bubble of 2006. And now a third time, and this third time, the most recent time where we are now, is like three times higher than the other two bubbles. The other two bubbles are about the same size. This one's like three times higher. The other thing that's important to know is that even though this cost to buy is accelerating way beyond the cost to rent. The cost of rent is also at an accelerating rate, too. Both are up. And so it just is a

Starting point is 00:14:43 graph of like, man, the cost of living sucks right now. It is hard to be alive. Being alive is expensive. It's getting more and more expensive. And wages aren't rising commensurate as well. Also this week, David, one of the most interesting reports I've seen in a while came out and you actually put this to the agenda. So why don't you introduce this? Did you know, bankless listener, that one in 10 Americans uses cryptocurrency, either holds or transacts in cryptocurrency. Was that report put out by Coinbase, by Cracken, by, I don't know, the Ethereum Foundation?

Starting point is 00:15:18 No, the Federal Reserve. This is a report from the Federal Reserve. David, what are we looking at here? So we're looking at a graph of just different metrics and stats about the American population and their relationship with crypto. So here are some important stats. In 2021, this use of,

Starting point is 00:15:34 to be 12%. 12% of people use crypto in any single way. In 20, in 2023, now we are down, or 22, we're down to 10%. So we lost 2% of all Americans, which actually is not so bad. Like, in the bear market, like we got, most people are sticking around. And then there was another poll, why are people using crypto? 21% both said to send money faster and also because the business or person preferred it. 20% of people said because of privacy. Some other interesting stats, white U.S. citizens actually are the least likely to be crypto users. So black, Hispanic, Asian, all coming in with much stronger numbers than white people, which is interesting. Males use crypto twice as much as females. No, that's not a surprise whatsoever. But I think the

Starting point is 00:16:21 punchline is really what you said. One in ten. One in ten Americans. That's actually huge. And by the way, when they track usage, this is surprising to me. So as you would expect, the predominant use case is bought or held as an investment. And that was 11% in 2021. It's 8% now. So that's decreased. But the other use case is used to buy something or make a payment. That's 2%. Not insignificant. 2% of Americans are using this to buy or make a payment or sending money to friends or family. And that has not decreased in 2022, which is very interesting. But if you're the Fed and you're looking at these numbers, David, and you're like, oh, interesting. By the way, this report, was not a report on crypto. The report is economic well-being of U.S. households in 2022.

Starting point is 00:17:08 And they have to include crypto now. Why? Because it's tied into economic well-being. It's tied into payments. It's tied into assets. And if you're the Fed and you're looking at this report, you're looking at the numbers, you're like, oh, wow, 10% one in 10 Americans are using crypto. This is no longer an insignificant portion of the population that is using an alternative to the banking, that you set up and propagate. No wonder this is starting to enter national discourse and political discourse. Like, it's an important issue. When you have 10% of Americans using something other than the U.S. banking system, I think the banks of which the most prominent is the Fed,

Starting point is 00:17:51 the central banker of central bankers, have to take notice. And that's what they're doing here. And there's also important to note the investment use case is outstripping the utility use case. and that's natural, right? The reason why there's more investors is because investors try and predict the future. And so actual utility of these things is going to lag investors. Here in Montenegro in this like crypto community that I've been living with in the last two years, there's people from Africa, crypto people from Africa. And the users of crypto in Africa, like 2% in America, no, no, no, no, like 20, 30% in Africa. Are you kidding me? Yeah. Yeah, yeah, yeah. And so it makes

Starting point is 00:18:27 sense like in crypto where we're well financialized and well banked that like, oh yeah, only 2%. but like entire continents where we don't really consider like talk about like we don't talk about utility in Africa because it's not like in in the moment of crypto Twitter like crypto Twitter doesn't really care about that but like utility is off the charts and usage is off the charts and so only in America I think do you see investors actually like tripling the rate of actual users and you can actually see this in the stats set and by the way David did you know that bankless is the number one podcast in Tunisia right now. I just saw that in our house,

Starting point is 00:19:04 number one podcast, number one podcast, number one podcast. Number one business and investing, it might be across all categories to, now it's probably not across all categories. It's probably too much, but like number one in business and investing. I mean, bankless has a pretty, pretty cool African community right now.

Starting point is 00:19:22 And there's, you know, some, there's like a bankless Africa that's really like taking this over. So that is amazing to see. I mean, that is at the end of the day why we're here. It'd be really interesting to see a similar economic well-being report in other emerging market areas as well and what the percentages look like there. I haven't seen that yet. Brian Armstrong had a take about this report.

Starting point is 00:19:43 And this report is, this report is coming in during the lack of scalability in the crypto ecosystem. And so he tweets out early days. Once layer two really gets going, it will be going like from dial-up to broadband. So imagine how much utility we can get when we can. can get people onto a low-fee environment. That's a great take. Great take. Something else that I feel like is bullish for crypto is this whole AI thing. But before we get to that story, can you tell us about Nvidia?

Starting point is 00:20:13 Share spike 26% on huge forecast beat driven by AI chip demand. Why did you pull this into the market section today, David? Well, mainly because it's a slow week in crypto, Ryan. But also I thought this was particularly interesting anyways. Okay, so Nvidia reports 4.3 billion in sales versus expected 3.9. Where did that come from? It come from demand for its GPU chips from cloud vendors as well as a very large consumer internet companies, which like to use NVIDIA trips to chain and deploy generative AI applications like OpenAIs chat GPT. So, okay, so AI is starting to impact equities, the demand for AI, growth of AI, specifically in Vidia.

Starting point is 00:20:54 The other important thing, Ryan, I think that was useful in the kind of the punchline of this thing. The market cap of Nvidia as a company went from $755 billion to $9753 billion in just in one day. This last, yesterday. It's almost a trillion. Basically a trillion dollar market cap. It grew one Ethereum in market cap. That's incredible. One Ethereum in market cap is about $220 billion or something like that.

Starting point is 00:21:19 That's what Ethereum is right now. Yeah. And it's, which is so dumb because, like, like all of these AI things that like Nvidia is going to help train and all the open in chat, UPT, like what money do you think these companies, these AI bots are going to use?

Starting point is 00:21:33 They're going to, it's going to use ether. I think, I think that's what the opportunity is here, right? So like, um, Nvidia sells GPUs and of course,

Starting point is 00:21:41 uh, AI models are massive consumers of GPUs. By the way, is the gamer community upset about this? I know they were mad at crypto mining for a while because we're, like, oh God, the poor gamers versus like all the Ethereum.

Starting point is 00:21:54 miners suck up all their chips. Finally, Ethereum went to proof of stake. It's been eight years since I've been able to get a GPU. And then all of a sudden we have this AI revolution. It's like, oh, no, this is going to be way more profitable than you're getting. Oh, poor gamers. Well, I think the tie-in here with crypto is block space really hasn't had its AI demand moment. Yeah.

Starting point is 00:22:15 All right? GPUs have. We're starting to see it here. And look at this, a 26% increase in Ethereum, a $200 billion increase in a $200 billion increase in a real world stock price as a result. I think what's the AI start to demand block space? We're going to see something similar. And we're still ways ahead of that.

Starting point is 00:22:33 I feel like we're maybe a couple years ahead of that. But I think that is coming as well and it will mirror what we're seeing in GPUs. David, what do we have coming up next? Coming up next, Ledger Postpones, it's recover product. Ooh, why, how did that happen? We'll talk about that. And also, base coming to main net, tornado cash,

Starting point is 00:22:50 hijacked Binance accused of commingling funds, Apple being friendly, lots of more news to talk about in this weekly level, but first, a moment to talk about these fantastic sponsors that make this show possible, especially Cracken. Our preferred exchange for 2023, if you're not having an account with Cracken, consider signing up for one. Cracken Pro has easily become the best crypto trading platform in the industry. The place I used to check the charts and the crypto prices, even when I'm not looking to place a trade.

Starting point is 00:23:14 On Cracken Pro, you'll have access to advanced charting tools, real-time market data, and lightning fast trade execution. all inside their spiffy new modular interface. Cracken's new customizable modular layout lets you tailor your trading experience to suit your needs. Pick and choose your favorite modules and place them anywhere you want in your screen. With Cracken Pro, you have that power.

Starting point is 00:23:32 Whether you are a seasoned pro or just starting out, join thousands of traders who trust Cracken Pro for their crypto trading needs. Visit pro.craten.com to get started today. Introducing ETHX from Stater. EthX is a liquid staking token designed to maximize rewards all while securing Ethereum. With Stater, you can run an Ethereum node with just 4E, which is 85% lower capital and 35% higher rewards versus solo staking.

Starting point is 00:23:57 Stater has a multi-pool architecture with permissionless and permission node operators to enable decentralization and scalability. Stater has extensive experience in building liquid staking protocols on six proof-of-stake blockchains and is trusted by over 70,000 stakers. Stater has partnered with over 40 leading protocols to bring defy utility to their liquid staking tokens. Stater is actively building integrations across the Ethereum ecosystem to bring the same great defy utility to the EtherX token with a million dollars of SD token rewards in Defi force Ethx users. All of Stater smart contracts are audited by at least two independent cyber security auditors and have multi-million dollar bug bounties currently live. So go to Stater Labs.com slash eth to sign up and get access to the Stater staking protocol. Arbitrum 1 is pioneering the world of secure Ethereum scalability and is continuing to accelerate the weather. 3 landscape. Hundreds of projects have already deployed on Arbitrum 1, producing flourishing

Starting point is 00:24:52 defy and NFT ecosystems. With the recent addition of Arbitrum Nova, gaming and social daps like Reddit are also now calling Arbitrum home. Both Arbitrum 1 and Nova leverage the security and decentralization of Ethereum and provide a builder experience that's intuitive, familiar, and fully EVM-compatible. On Arbitrum, both builders and users will experience faster transaction speeds with significantly lower gas fees. With Arbitrum's recent migration to Arbitram Nitro, it's also now 10 times faster than before. Visit Arbitrum.io, where you can join the community, dive into the developer docs, bridge your assets, and start building your first app. With Arbitrum, experience Web3 development the way it was meant to be. Secure, fast, cheap, and friction-free. So after all of the Ledger

Starting point is 00:25:36 controversy, Ledger has decided to delay the release of its recover products. So why did they do this? They heard all the community backlash. They say in this announcement will release ledger recover product as soon as this firmware part of the code will be published. So this is a way for people to actually verify the firmware before people install it onto the ledger to make sure that it only does the things that it will say that it does when people install it. Interesting take. Interesting response. Ryan, what do you think about this? I mean, my question is happy ending? Is this kind of a happy ending?

Starting point is 00:26:12 So if you guys missed the last two weeks of this, there's been this massive controversy over this product that Ledger added called Ledger Recovery that essentially enables with your permission. You have to click some buttons on your ledger. But it enables the firmware with a ledger software update and an opt-in service called Recovery. It allows them to basically take out your seed phrase, send it to multiple parties and store it there so that Recover users, ledger recover users, which again is an opt-in service. but it still can be activated allows quicker recovery. And so, of course, like, hardcore crypto users, anyone who cares very deeply about self-sovereignty and keeping their private keys.

Starting point is 00:26:57 And the thing that they were sold in the hardware wallet was very concerned about that. It's like what this company can actually extract the seed phrase, my private keys, outside of the hardware wallet. Like, isn't this the purpose of the hardware wallet? And now so here's Ledger. There was massive controversy last week, and it spilled certainly over into this week. Now here's Ledger coming out and saying, hey, we're just going to delay that feature, like we got it wrong.

Starting point is 00:27:22 And they're also saying that they're going to open source most of their operating system, starting with Ledger Recovery to make it fully auditable. I hope they open source the firmware as well, or as much of that as possible. I think this pressure, the reason I said happy ending, question mark, is because it seems like this is actually increasing the motivation for Ledger to open source elements of its tech stack. And I think that additional transparency and accountability is only a good thing for crypto and for this space. Without this controversy, would that have happened? I mean, probably not.

Starting point is 00:28:03 So maybe this is turning into a happy ending here. What do you think about that take? Yeah. What I learned from having Charles, the TTO of Ledger on the podcast is that really there is no other way to have maximum, the assurances that the crypto industry wants from his hardware wallets, you can't have that unless all of the updates and all of the software part of the hardware wallet are open source and verifiable by the public. Without that, there's always going to be some trust. And the ledger has stated that this has always been a part of their roadmap. So this

Starting point is 00:28:33 actually technically isn't new. The new thing is that they are saying that they are accelerating this and they are also not releasing their recovered product until they have completed some open source milestones as well. So that's the news. I think that's good. All right, David, we got DCG missing a payment to themselves, I think. Digital currency group, of course. What is going on?

Starting point is 00:28:56 What happened this week? And why is this subject relevant? So this goes back to the Genesis, Gemini Earn, Grayscale, and DCG, like, mess. And so Genesis, had a hole in its balance sheet because it had a bunch of money lent out to three hours capital who got liquidated and then that's led to the insolvency or the inability for Gemini earned customers to get their money back. DCG filled the hole in Genesis's balance sheet by just writing them a loan. And so DCG, but DCG needed to make a payment to Genesis, a $630 million loan to Genesis to fill the hole in the balance sheet. DCG did not pay that.

Starting point is 00:29:38 when that came due last week. And so what does this mean? This is ultimately going to, would be the money to go and pay back Gemini earned customers and anyone else who is a creditor of Genesis. And so Gemini, this is why this is a post on Gemini's website, is because this would also otherwise be their money. There's a handful of groups, the unsecured creditors committee, the ad hoc group of creditors, and Gemini are considering whether to provide forbearance to DCG to avoid a DCG default. Forebearance, I don't know. looked this up, special agreement between a lender and a borrower to delay a foreclosure. And so that is kind of the news this week.

Starting point is 00:30:17 Overall, I kind of was going through this news, Ryan. I was like, okay, other than like Gemini-earned customers who are waiting to get their money back, what does this have to do with, like, how is this going to impact the crypto markets? And I'm kind of like, me? Yeah. I mean, I feel like all of this is known. Like we know that DCG is not in good shape.

Starting point is 00:30:38 We already know there's not really new information here. Is this like some kind of slow motion bankruptcy of DCG? It's a slow motion insolvency. That's going on. That was kind of my base prediction though, right? Like I think that's what people expected would happen. Guess what, David? I had some money in Gem and I earn as well.

Starting point is 00:31:00 Because you love banks. That's why you had money there. Again, not very much bankless listeners, but I tried all of the things at one point in time. And I think that's the big question is there's something like $800 million, $900 million was in Gemini Earn. And this is retail money primarily. And the folks who have that money, had that money in Gemini Earn are just wondering whether they're going to get it back. And I don't think that this story provides any closure to them. It's certainly not comforting to know that DCG didn't pay.

Starting point is 00:31:34 another $630 million on the scheduled time. So not great news from that perspective. Yeah, so if you guys want to dive down into this detail a bit more, ROM, former Bankless podcast, guys we've had it on recently twice now. Put a great Twitter thread together. I'll summarize it pretty quickly. Basically, he says DCG needs forbearance. They miss the $630 million in payments.

Starting point is 00:31:55 DCG does have great assets, but they have a financing problem. Bills are due today, but the cash flow that they have comes over the next few years. Also, there's this additional pressure coming from the inevitability of a Bitcoin ETF. A Bitcoin ETF will come, whether Gary Gensler approves one, maybe not, but the next chair will, at some point in time, there will be a Bitcoin ETF. And that will really reduce all of Grayscale's, the main cash cow of DCG, their ability to take fees because they, Grayscale is charging 200 Bips, where an effective ETF from some market competitive thing would more likely be 30 bibs. And so fees going into Grayscale would basically go to zero.

Starting point is 00:32:38 And so that's Grayscale or that's DCG's last remaining big asset. And the Romm said he's done a bit of the math. There's just not enough time for Grayscale to generate cash to pay off the $1.7 billion of debt that DCG has. 1.7 billion? Yes. It's a lot, David. Yes. Yeah. And so the idea here is If Grayscale is a cash cow, that time is running short. As soon as there's a Bitcoin ETF, then the fees are just not going to cut it. And so DCG is like time is not on DCG side here. I feel like everyone's just hoping for another crypto bull market to just paper these things over the mistakes, right?

Starting point is 00:33:16 If Bitcoin goes to 100K, then like, you know, probably DCG can afford this. All right, what do we got? Tornado cash was hacked. What does that even mean? Okay, so a malicious Tao, tornado Dow governance proposal was proposed, and then that malicious proposal actually got 700,000 votes because there was a sneaky part of that proposal that was not, no one sought, no one saw the potential exploit, a potential bug. And so this proposer got this proposal to go through, which ultimately allowed a malicious exploiter through governance

Starting point is 00:33:54 control allowed the attacker to basically take over the Dow. Wait, what's the proposer of this governance proposal? Was that the hacker? That was the hacker? Okay. I would imagine so. Yes. Yes. The malicious governance proposal, I'm assuming. Yeah. So the governance proposal allowed the attacker to grant themselves 1.2 million fake votes after it got 0.7 million legit votes. So what does that mean? Recap on tornado cash. Okay. So it is a a privacy protocol, of course, that U.S. citizens cannot use. Thank you, OFAC. But it's a privacy protocol, kind of a mixer. You put your Ethan if you want to sort of anonymize it and you can get

Starting point is 00:34:35 it out. And of course, we've talked about this a lot. But there's a governance component to this protocol. And there's a token called TORN, T-O-R-N, that is the governance token behind this protocol. Is that the part that was hacked, the governance protocol itself, not the smart contracts with all of the mixed ethernet. Am I correct about this? That is correct, yes. So the actual pools are not affected because they are completely like cut off from exploitation by the governance. Tornado cash governance has no governance over the pools. They are their own like self-sovereign smart contracts on Ethereum. And so the individual pools are intact. So what the attacker can do is with draw all the locked votes and drain all the tokens in the governance contracts. So there's some

Starting point is 00:35:21 funds, treasury funds, and then also some torn tokens. And so those got exploited. Now basically the torn token is going to zero. And that's basically the story. I mean... I mean, does this kill tornado cash? Yes. Well, so one of the functions of tornado cash governance was the relayers, which is how people actually achieved privacy. So like when you withdrew your ether from tornado cash, you need to process that as a transaction.

Starting point is 00:35:51 Who pays for the gas fees? If you pay for the gas fees, then you actually just docks yourself again. So it makes it pointless. So a relayer would process that transaction for you. And that was up to governance. I think, yeah. Anyways, governance over tornado cash is dead. Pools are still intact.

Starting point is 00:36:07 TBD on really what happens next. I mean, it's not. And who was the attacker? It's like the CIA attacking it? I mean, there's reports that this was the North Korean group. What are they called again? Lazarus. Why would they attack tornado cash, though?

Starting point is 00:36:20 because they love tornado cash. I don't know. Who knows what's going on? Sciops. It's an interesting case study in exploitative governance attacks, which is a thing that we've known about. Which is a security hole, isn't it?

Starting point is 00:36:34 Right. Right. But I mean, it's also why like, but we did know that tornado cash privacy pools are, were cut off from this. And so that's been the way that they've been designed. Other systems like this are designed. Like uniswap governance,

Starting point is 00:36:47 if uniswap governance got exploited, the funds in Uniswop would be completely safe because of the same principle. Yeah. But it does some funky things. Like it's sort of, I don't know, you can't govern the thing anymore,

Starting point is 00:36:59 you can't upgrade it. All sorts of bad things happened. I mean, it's especially weird when, like, tornado cash governance philosophy was supposed to be very, and it's very, very separate from the actual product.

Starting point is 00:37:08 Same thing with Unoswaps. It's like, oh, governance got exploited. Oh, no. Oh, no. We can't govern tornado cash anymore. All the Tor and tokens went to zero. I think what's really fascinating about this is that's a story that's like who is the attacker, the identity of the attacker, what the motivations are there. This is one of the most interesting set of smart contracts on Ethereum, given kind of the geopolitical confrontation about it. So only set of smart contracts in the OFAC sanction list. All right, Binance, accused of co-mingling customer funds. So mixing customer funds and company revenue together. That's a story that came out of Royale.

Starting point is 00:37:48 this week, a special report. I'm sure CZ would call this FUD, David, but what are the details of this story? So the accusation, the details are that Binance commingled customer funds and also profits and company money into the same accounts. Interestingly, at Silvergate Bank, I did not know Binance had an account at Silvergate. This is before it collapsed, of course. So customer dollars flowed into Silvergate, and then also profits and also customer company money also floated into the same account at Silvergate. So big accounting

Starting point is 00:38:22 no-no. Best case scenario is that is just a big accounting no-no. I mean, I think one of the reasons why this is news is like the last time that we saw commingled customer funds, it was FTX because everything was coming-led. And the last founder-CEO said,

Starting point is 00:38:38 oh, that's just FUD as well. Remember that guy? His name is SBF. Yeah. So if you look into the story, you'll see like customer funds, customer funds flowed into Silvergate and then that went into a firm in the skelliesh called Key Vision, which was controlled by

Starting point is 00:38:51 Binance by CZ. But basically this is the story. Comingville customer funds they found no evidence that client money was taken. But the idea is like in the FTX story is like yeah, customers money wasn't like taken or stolen. They was just

Starting point is 00:39:08 liquidated because they were trading. So no one really knows. Now it's a black box. And so it doesn't really do anything to help the narrative of Binance as a big black box. It certainly doesn't. It's more of a black box. I hate that we're in the position of like we have to actually kind of trust CZ. And of course, CZ is saying four to this, right? It's more fud. And if you don't know what four means, we actually recorded an episode with CZ where he kind of explains that. That's coming out Monday. And you can get his takes on this and some other

Starting point is 00:39:37 things. But I guess what do we know? Binance is still standing after the 2020. and 2023 bank runs. All right. So they didn't go under. They processed $17 billion of withdrawals in the week that people tried to do the run on finance. Right. So they may be doing something.

Starting point is 00:40:00 We have no idea. I have no idea. They weren't doing it to the extent that Sandbank bin freed was and FDX was, right? I do wish we had better proof of reserves in place. And that's a question we asked CZ. He kind of said that wasn't the full answer, but like we need better proof of reserves for the crypto exchanges. We need better audits.

Starting point is 00:40:25 We need better records. I don't know how much you can trust a finance. I mean, my answer to this is you got to use multiple crypto exchanges. That's always the way. And you don't keep your funds on a crypto exchange, guys. Public bathroom, go into your business, get out. That's what you should be doing. And so you're not put in this place of having to trust a crypto bank, at least at an individual

Starting point is 00:40:51 level. At the same time, David, I don't know if all of the critics are right on Binance. There is this notion that Binance and CZ are just as corrupt as another SBF. Certainly that's a popular notion in the U.S. But then we have Operation Chokepoint. How difficult is it to actually get a bank account in the United States? maybe there are some reasons, not necessarily for co-mingling funds, it's probably always unjustifiable, but maybe there are some reasons that the back end looks messy. It's because it's very difficult to come into the light and actually get a regulated bank account in the United States. So I don't really know who to trust in this situation, and I hate that we are

Starting point is 00:41:35 in this position in crypto. And there's certainly some blame on the CZ side, the Binance side of things to go around. But there's some. absolutely some blame on the U.S. regulatory apparatus side. And they haven't made this easy. They've just pushed more into the dark. I mean, we have Wells notices going to Coinbase, who has been domiciled in the U.S. from the very beginning and has been kind of the student in the front of the class, straight A student, always saying, yes, teacher, I'll do whatever you need, like being very regulatory compliant. And they are having trouble with the current administration, the current regulatory apparatus in the U.S.

Starting point is 00:42:15 If they can't do it, I mean, we got a real problem. So that's my take. It's not necessarily satisfying right now because I don't know who to trust and who not. There's not sort of a very clear binary about this. But that's all I got. What do you think? Yeah. We talked about this in the podcast.

Starting point is 00:42:34 Like, finance and Tether are these two very large, systemic components of the crypto industry that are just FUDMAC. knits. Everyone wants to fud them. And like anytime I see like the next tether fud, scroll across my like Twitter feed, I just keep on scrolling because like it's been that way ever since I've gotten to crypto. There's always been tether fud. And now it's starting to be like, oh, now there's is binaance fud. Binance fud. Binance fud. And like the only reason why I know to scroll past tetherfud is because like it's always happened and nothing's ever come to pass. And it's starting to be that way with finance too. But it's only the only reason why that's, I

Starting point is 00:43:11 keep on scrolling is because every other time it's always passed. That's the only reason I've got. Not that I know anything. It's just like, oh, the only other fudge never came to be. Do you trust Tether enough to store your staple coins in Tether, or do you choose a different staple coin? I don't. I've never held Tether for like more than a day or whatever. And why is that? Is it because you don't trust them to the extent you trust other stable coins? And there's better options. Yeah. That's how, that's the way I've always felt. That's also the way I feel about centralized exchange choices. I think there's still where we are in this industry, in this stage is to be a crypto user,

Starting point is 00:43:50 you are in the Wild West, in the journey west. You can't trust anybody. You have to be educated about this stuff and you have to make discerning choices. So if it smells bad, even if it's not entirely bad, you don't know. Just don't put your eggs in that basket or just only put a few eggs in that basket. speaking as a former Celsius user, you know? And I had like very little in that, right? And it was just kind of the test, and very intentionally so,

Starting point is 00:44:22 because bad stuff can happen in crypto. I mean, it's fun week. All right, moving on. Coming up next in the rest of the news, base on main net soon TM, pudgy penguins on Amazon, got toys, NFT toys on Amazon, actually following through with this roadmap,

Starting point is 00:44:42 That's pretty cool. And then also, could restaking mess up Ethereum? New Vitalik article just drops about his concerns about restaking, which Ryan and I will unpack. So all of that news and more. But first, I'm going to talk about these fantastic sponsors that make the show possible, especially Metamask. If we have used any weird jargon that is esoteric and niche and needs explaining, and we forgot to explain it, then Metamask Learn is for you. Let's go hear from them. Learning about crypto is hard. Until now, introducing Metamask Learn, an open-education. platform about crypto, Web3, self-custity, wallet management, and all the other topics needed

Starting point is 00:45:17 to onboard people into this crazy world of crypto. Metamask Learn is an interactive platform, with each lesson offering a simulation for the task at hand, giving you actual practical experience for navigating Web3. The purpose of Metamask Learn is to teach people the basics of self-custody and wallet security in a safe environment. And while Metamask Learn always takes the time to define web-3 specific vocabulary, it is still a jargon-free experience for the the crypto-curious user. Friendly, not scary. Metamask Learn is available in 10 languages with more to be added soon, and it's meant to cater to a global Web3 audience. So, are you tired of having to explain crypto concepts to your friends? Go to learn.menomask.io and add Metamask learn

Starting point is 00:45:58 to your guides to get onboarded into the world of Web3. Mantle is a brand new, high-performance Ethereum Layer 2 network, built differently from the other Layer 2 you may be familiar with. Mantle is a modular layer 2 built on the OP stack, but uses eigenlayers data availability solution instead of the expensive Ethereum layer 1. Not only does this reduce Mantle's gas fees by 80% compared to other layer 2s, but it also reduces gas fee volatility. Mantle has a decentralized sequencer set, eliminating the risk of downtime and censorship on the network. And because Mantle implements multi-party computation nodes, layer 1 settlement execution is shortened from 7 days to as low as just 1 or 2. Mantle is the first layer two built by a Dow and is backed by one of the biggest Dow treasuries in the world. Bit Dow.

Starting point is 00:46:43 Mantle already has subcommunities from around Web3 onboarded to help the growth of Mantle, like Game 7 for Web3 gaming or Edu Dow for the world of D-Side and buybit for TVL, liquidity, and onramps. Check out Mantle at mantle. And follow them on Twitter at ZeroX Mantle. Apple, the Web2 Mafia, starting to actually give some green lights to some crypto apps. So we got two reports out of, but one out of Stepin and one out of Axi Infinity that they're in-app

Starting point is 00:47:12 crypto features that involve trading or buying or selling of crypto assets got approved and are not paying the 30% fee. What? Pretty cool. I wonder if they had to kiss the ring to the mob boss. I don't know. So Stepan announced the integration of Apple Pay

Starting point is 00:47:29 as the first blockchain game users can buy, sell, and trade. Stepin NFT sneakers in the app and pay for them with debit and credit cards linked to Apple Pay. And so you can purchase Spark credits,

Starting point is 00:47:42 which I think is an internal currency to step in. And then Spark Credits is one USDC. And so USC is in this app that is approved by Apple. And then also similarly, Axi Infinity has also gotten

Starting point is 00:47:53 its app approved. Finally, after years of them trying this, Axi Infinity game launches on the Apple App Store in key markets. I guess maybe there's a going on in the Cold War between Crypto Web 3 and Apple, at least hints of this. I hope it continues. Apple has been a massive gatekeeper. I mean, Uniswap, the wallet, couldn't

Starting point is 00:48:15 even get approved for the longest of times. This seems like good news to me. Yeah. I mean, that Apple's got a lot of users. It would, it makes absolutely zero sense for them to charge 30% on every single blockchain integration. And so it was either no blockchain at all in the app, in the Apple iOS store ever, or they let loose. And so finally, maybe there's a turning other ties. Maybe. I'd like to see more of that before we can say it's a trend, but it's good signs. Base mainnet, coinbase's base layer two built on the OP stack is coming to mainnet soon. T.M. There is a set of criteria that will unlock the mainnet launch, a successful hard fork of their test net, another successful infrastructure review with OP Labs. Opie Mainnet,

Starting point is 00:49:04 must upgrade to Bedrock, which is also soon TM, we talked about that last week, and then completion of audits with no critical issues and some testesability. Once all these things happen, then we're going to see the base main net launch. And the test net's been up and running. And so all of these applications that have been building on the test net are just going to be ready to go.

Starting point is 00:49:22 So the theme park that is being built is going to have rides on day one. So that's a time. Let's just remind bankless listeners as well, this is the first time a major centralized exchange has launched a layer two the very first time. History being made here, I think.

Starting point is 00:49:39 We even asked CZ about that. Hey, CZ, you're going to turn the B&B chain into a roll-up? You remember what he said? Well, no, no, no, we should tease it. The answer, guys, is coming on Monday when we release the podcast. I'm going to tease it.

Starting point is 00:49:54 He did say, the B&B team has thought about layer two's on finance chain. I'm like, that's not what I asked, CZ. Well, you can hear that answer coming up on Monday. David, some cool stuff in the NFT world, at least. I think so. Pudgy Penguins smashes their Amazon debut.

Starting point is 00:50:16 Are we looking at a commercial here for Pudgy Penguin toys? Yeah, Pudgy P penguin stuffed animals. Is this worth playing? Should I play this? Teddy Bears, but Teddy Penguins. It's kind of weird. Julie, it's time to go. Oh, that's them on the floor.

Starting point is 00:50:31 It's a big toy story looking commercial right now. Oh, it is. Oh, they're waking up. They come alive. So cute. All right, pangers. Coast is clear. My back was starting to...

Starting point is 00:50:49 Okay, this is a toy story ripoff. We don't have to watch more, David. Dude, do you have a hang on? I'm curious. The kid's coming back. Oh, she only took one of the NFTs. Well, clearly she's got a favorite. Coaster's clear.

Starting point is 00:51:13 It's the highest market value. Wow. Okay. All right. Well, here's, here are the stats. $500,000 of Puggy Penguin stuffed animals were sold in the first week, in the first two days. That seems good. That seems like, yeah, that's because like NFT market caps aren't that high.

Starting point is 00:51:35 They're in the tens of millions of dollars. Maybe Pudgy Penguins are over 100. I don't know. 20,000 individual stuffed animal, pedgy, penguins were sold. Dominated the charts of Amazon sales, beating brands like Disney Transformers, Pokemon, Barbie, and Legos. Pretty crazy.

Starting point is 00:51:51 Who's buying all these things? Is it kids? Are we turning kids? Are it is it kids or is it us? Uh-oh. I don't know what's more concerning. I guess stuffed animals, nothing around with stuffed animals. If you're a grown adult.

Starting point is 00:52:08 20,000 individual toy sold. Well, there's only 10,000 pudgies. So even if every single NFT owner bought two, that's how that would come out to be. All right. Congrats to the Pudgy team for executing on the road mom. That's job. Yeah. It'd be pretty crazy to see like a new toy enter the children's world.

Starting point is 00:52:25 And it actually started as like a degenerate NFT project in the bull market. Crazy but not like that wouldn't surprise me at all. Yeah. I mean there's something that would. Okay. Yeah. That's seems about right. I could totally see that happening.

Starting point is 00:52:39 Okay, all right, moving on. Doe Kwan, our favorite person who's just down the street from me in Montenegro, is back in jail. His bail got revoked. He was on, he was freed on bail for her, like, a really low number, like $450,000. And then a judge has revoked that, and now he's back in Montenegro in jail. That's the story. Okay. Sorry, no.

Starting point is 00:53:02 No interview on bankless. No interview, you know. David, did you read this article? It's entitled, Don't Overload. Ethereum's consensus from Vitalik Buterin, and he was really talking about restaking here, which has been a theme we've been talking about a lot on bank lists. And I think the subtext of this theme, these are not the words Vitalik used, but it's basically could restaking hurt Ethereum? Could it kill Ethereum? Could it really damage the protocol? And what's kind of your TLDR of his post?

Starting point is 00:53:31 Of course, Vitalik does a great job putting it in his own words. But if you were to kind of synthesize this for us. What would you say he's trying to communicate in this post? So just to briefly explain restaking. Resaking is when you take your eth stake. You have staked your eth to the Ethereum main chain. Restaking allows you to take that same eth that's already staked to Ethereum and then also sign up for additional slashing conditions for a separate and new network. And so say there is an Oracle network that would also like your collateral as a bond to make sure that you correctly report the price, you can re-stake your ether to that new Oracle network,

Starting point is 00:54:09 and then you can get fees from that Oracle network. And then if you lie to that Oracle network, your ether that's also saked to the Ethereum beacon chain will also be slashed. In theory. So what's the problem? In theory, you could actually layer this restaking on over and over and over again for juiced appeals.

Starting point is 00:54:23 And then people are like, oh, wait, that's a lot of slashing conditions. Is that harming the security of Ethereum? And Vitalik is like, no, that doesn't necessarily, harm Ethereum unless whatever these new networks are, if one of them starts to be systemically important at the social layer. And so at the hardware layer and the objectivity layer, there is no, it's like the restaking and restaking and restaking, the layering on of new networks, that doesn't intrinsically threaten Ethereum consensus.

Starting point is 00:54:56 What it would do is something like the 2016 Dow Hack, where if one of these networks has a lot of restake and something bad happens on that network that's separate from Ethereum, then because that one network got so large and it had so much restaked eth to it, that it became systemically important at the cultural level. And then that restaking chain that got exploited would then ask for a rollback of or a hard fork of Ethereum. That is where it's dangerous. 2016 is a perfect analog to this, right? So is 2008 banking crisis.

Starting point is 00:55:32 I mean, the intrinsic problem is too big to fail. When something becomes too big to fail, and so the stakeholders at the social layer all agree, well, this has become too big to fail. And if it fails, there'll be such social costs to a particular set of stakeholders that we politically care about, that we need to bail them out. And then they go about that bailout process. That's when things have this really negative externality in being too big to fail. And Vitalik is saying, I am concerned, unless we kind of guard at the social layer around this, that that could happen with restaking. And so you designers of restaking, make sure you're doing it correctly. Make sure you're doing it well.

Starting point is 00:56:19 Make sure you're doing it without introducing this hazard into the social layer of Ethereum. and if it becomes too big to fail and there's the prospect dimension of some sort of a bailout, that's when things move from like, you know, yellow to orange to closer to red. I think that's what he was communicating in the post, at least to me. And you could see all sorts of possible designs. And it's not just, you know what, it's not just staking that could do this. I could also see if you had a layer two that got kind of too big to fail or something. Let's say layer two, too big to fail, I had, I don't know,

Starting point is 00:56:58 layer two percent, a bridge broke or something. Yeah, 20 percent of ether on it. If Arbitrum bridge broke and all of the ether that's deposited to Arbitrum somehow was not able to be withdrawn from Arbitrum in some weird way that we didn't expect, would we roll back the chain? It would really hurt to not roll back the chain, and I don't think the Ethereum community would do it. You think they wouldn't do it? They would not do it, and it would hurt.

Starting point is 00:57:23 It would hurt to do it. to not do it. I agree. And we would take that to the face. And also, because of for choice rules, there would be a significant faction that actually want to fork ETH in that situation. I would expect. I think it would be a contentious thing. I think there'd be a battle. I think it could be somewhat like the Dow in that you'd have a group who says, yeah, no rollbacks, never. And then if it was big enough, and if you don't think that would qualify arbitrar and bridge, just imagine something bigger than David, like more, more ETH, more substantial to the ETH validators or whoever's kind of making

Starting point is 00:57:59 the political decisions of Ethereum, you could see a world where that could happen. What's interesting, though, about it is let's say there was some event like that, and it did happen, and there was a fork, right? It's always interesting with a fork is ETH holders always end up with double the assets, don't they? I guess unless there's some sort of a fork. Hold on. I mean, you can, and I think that's great.

Starting point is 00:58:23 Have you collected your ether proof of work tokens, Ryan? No, I mean, but that's just not a serious, legitimate fork, right? I certainly collected my Ethereum Classic, and then I had the choice whether I wanted to continue Ethereum Classic or whether I wanted to sell it. And I think I, along with the majority of the Ethereum community, sold Ethereum Classic and doubled down on regular old Ethereum. And anyway, what I'm saying is that's actually like the ultimate remedy for governance is if things got too contentious, if there was some sort of too big to fail type event and there was a fork, then all the stakeholders have to decide. Like it's very messy.

Starting point is 00:59:04 That's not like what we want to happen. But I'm just pushing it that to the logical conclusion. And it's still not the end of the world, I guess is what I'm saying. Speaking of forks, there seems to be a bipartisan fork here. recently. This is Ron DeSantis. He announced his candidacy as a Republican presidential candidate. And he says this, you've got every right to do Bitcoin. To do Bitcoin. I love that. The only reason these people in Washington don't like it is because they don't control it. Let them do Bitcoin, says Ron DeSantis. That's interesting how there's been a growing set of

Starting point is 00:59:42 Republicans that have taken the posture of being anti-CDBC. pro-crypto. Meanwhile, it seems like the Democratic establishment, not all of them, of course. In fact, we've had Democratic members of Congress on bank lists in the last couple of weeks. But there is a contingent of establishment, I think Democrats, maybe Elizabeth Warren, and her ilk who are pushing hard against crypto. I would say the Biden administration is one of them. This is Joe Biden. When he speaks about crypto, he says things like this, and this is him last week. I'm not going to agree to a deal that protects wealthy tax cheats and crypto traders while putting food assistance at risk.

Starting point is 01:00:21 Of course, I personally don't want to put food assistance at risk, but incorporating crypto traders with wealthy tax cheats is some political grouping that I don't appreciate and I don't like. So I'm wondering if this partisan divide will kind of increase. it does seem like if one party doubles down on an issue and Ron DeSantis is kind of making this part of his presidential announcement, you've got every right to do Bitcoin, he says. Then the other party has to just be like, oh, they're doing this. So we're going to do the exact opposite. I just worry about that. I don't even know if they've thought about this from a fundamentals, like, you know, base principles perspective. I don't even know if Ron DeSantis does. I don't even know if he cares. He's just like, oh, here's a crypto cohort. They have some money. they have some influence. I can get behind this issue, maybe.

Starting point is 01:01:15 And so I'm going to be pro-crypto. And then Democrats see the pro-crypto-Republican, and they're like, they're pro-crypto, we're going to be anti-crypto. And no one actually has a conversation about this and looks at the base principles of, like, you know, the things that we all care about are all have in common.

Starting point is 01:01:33 That's my bare case for this, David. I don't know if you see that, but... Yeah, your bare case is that political theater. It's just political theater. Yes. The idea, one of the cool things about crypto is that when you deeply understand crypto, you go down the crypto rebel hole, you go navigate the dark force of crypto and you come out the other side, understanding how so much more of the world works. And then you see the politics be like, oh, there's this new important thing. And then the left and the right, the red and the blue, people just like squabble over it now.

Starting point is 01:02:01 Regardless of the fundamentals, they don't give a kid about our industry. There's like, oh, now we fight over this thing. Like, who wants that? Oh, my God. Yeah. I do like the idea of Ron DeSantis saying let them do Bitcoin using Bitcoin as an idea, not an actual noun. Like, let them do Bitcoin using like... How intentional do you think that was?

Starting point is 01:02:22 I don't think very intentional. Okay. I don't think very intentional. Wow. Well, crypto is still continuing to build, David. We've got some releases this week. The first from Macha. Let's just show the interface.

Starting point is 01:02:34 This is really cool. And of course, I can log in with Metamask, as I already have. But Macha, of course, is a decentralized exchange aggregation service. And in the background, do you know, like, decentralized exchange market share? David, we haven't shown this on the roll-up in a while, but market share of Dex volume to centralized exchange volume. Centralized exchanges are losing market share to decentralized exchanges recently. And that's been huge. But like, look at this.

Starting point is 01:03:00 This is Macha, the new user interface. The really cool thing about it is this search, token search functionality. I have never seen a well-functioning token search in a UI before. What do you want? What do you want to buy? Some ARB? Boom, it's there. And Macha, of course, is a decentralized exchange aggregator,

Starting point is 01:03:20 so it's going to find you the best liquidity across all of it. Anyway, all I'm saying is the user experience. Here's what I'm saying. We have 10% of Americans that hold crypto are using crypto today, and the U.X has been historically kind of bad. What happens when the UX gets 5X better and 10x better? Cool things are going to happen. And we're on the cusp of that.

Starting point is 01:03:43 And you can see that when you see releases like MACHA that are happening pretty quietly in the background. Yeah. This isn't just a front 10 UI upgrade, though. They also have some protocol upgrades. Faster trade confirmations. They say they've reduced failed trades by 85%. They are still playing your gas fees, although you are still paying it in a roundabout way. But yeah, at least you don't have to pay Eath, which is nice.

Starting point is 01:04:03 and then they've indexed 3.7 million tokens to enable that. 3.7 million? We have that many? Yeah. Coming up on releases, Connects has released chain abstraction. So we've talked about account abstraction, but Connects is doing this thing called chain abstraction. And so if you want to, say you have like USDC on Arbitrope, and you want to send that USC to Polygon to deploy it in AVE. And that takes you like six transactions.

Starting point is 01:04:29 And then if you get over to Polygon and you don't have anymatic in your wallet, then you're USC is stuck until you get somatic in your wallet. Chain abstraction does the same thing as account instruction does for smart contract wallets, but now we have like smart bridges. So you can bundle up all of these transactions all at once and then have that bridge and transfer and action on both chains done in one single transaction through Connects, which is a bridge, by the way. Connects is a bridge.

Starting point is 01:04:53 And, but now they are doing this thing called account abstraction. So fewer steps to get what you want done across the chain. Really, this fits into the theme of like Ethereum and its layer two strategy, all the, Salana people are like, oh, you guys are breaking composability. It's breaking UX, blah, blah, blah. Well, the Ethereum people and like the layer two, layer three, super chain people are like, yeah, but eventually all of that will be abstracted, and it'll just be one unified super chain.

Starting point is 01:05:16 And this is part of that journey, chain abstraction. There you go. Chain abstraction, builders you're building. That's what I get from this. Last one here is Astria. Astra. Austria.xYZ is a NFT backed lending protocol, so NFT in, borrow USDC, or some other token out. This is from Joseph

Starting point is 01:05:34 DeLong of former sushi swap fame. And so if you are into the world of NFT, Phi, Astaria is for you. Yeah, I think I said Astridans. Weath. Astaria. Astaria. Astria. Astria. Astaria. Astaria. It's definitely Astoria.

Starting point is 01:05:50 There we go. Got some jobs of the week here. Jobs. What are we looking at? David? Otter space. Web 3 front end and cheer. Bankless ventures needs an investment analyst, intern, staff blockchain engineer, staff smart contract engineer,

Starting point is 01:06:05 Phantom a software engineer for mobile, and for front end, uniswap labs, a senior back end engineer. We got all the jobs for you on the banklist. dot pallet.com job site. David, what do we have coming up next? Coming up next, we got questions from the nation. Somebody asked in the Discord,

Starting point is 01:06:21 what are settlement insurances? And man, I'm so glad they asked that question. I love that. And then also, what's the difference between the 2019 bear and the 2023 bear, as well as some hot takes from crypto Twitter and what David and Ryan are bullish on? So we're going to get to all of that and more.

Starting point is 01:06:34 But first, a moment to talk to some of these fantastic sponsors that makes the show possible. Immutable is at the forefront of Web3 gaming, on a mission to bring digital ownership to every player, offering the world's best games and game development platform. Immutable lets game builders and players focus on great gaming experiences. So, build your next Web3 game on Easy Mode with Immutable's leading full-stack Web3 gaming platform.

Starting point is 01:06:56 It's built-in U.X features, like the Immutable Passport, are designed for games to scale to the next billion players coming to Web3. With Immutable, players can sign up with an email, pay with a credit card, and experience a frictionless purchase flow inside of games. So, discover your next favorite game and explore a network of 150 games building on Immutable, including such titles as GauzenChains, guilds of guardians, Illuvium, Embersword, and Metalcore. So join Web3's largest ecosystem of games and players. Build, play, and connect at immutable.com. Hiring people worldwide, paying them in crypto, providing them access to benefits, it all so complex. But it does

Starting point is 01:07:32 It doesn't have to be. Complying with labor laws, payroll rules, tax obligations, and crypto regulations in every country that you employ someone is difficult, time-consuming, manual, and costly. And it's drawing more and more attention from regulators and governments. But there is good news. Toku is here. Toku is the first employment and compensation platform for the crypto industry that makes this easy. Toku helps you hire employees or contractors and pay them in fiat or crypto legally, compliantly, and with all the taxes handled in over a hundred different jurisdictions. So whether you're an early stage company with just a team of two, or you're an enterprise with 200, Toku has a solution that meets your needs. Toku is already working with the leading

Starting point is 01:08:11 companies in the space. Protocol Labs, Hedera, Gitcoin, and many more. So transform your employment and token payroll operations with Toku. You can reach out to Toku at Toku.com slash banklists or click the link in the show notes. Question this week from Tadzu. In your episode about finality issues of the beacon chain last week, use the term settlement assurance. multiple times. Can you please explain this term further? Thank you. David, is this your alt account that asked this question? It feels like it's teeing you up just to talk about settlement assurances, which I know it's something you're passionate about. So tell us, now's your chance. Tell us what are settlement assurances. Yeah, so this is actually very deep

Starting point is 01:08:50 in bankless lore, I'd say. There was a time where we really focus on this thing called settlement assurances and also public goods. I wrote an article called settlement assurances and the global public goods thesis, all of these things kind of tying together. So this is actually a really deep part of bankless philosophy, I'd say, the importance of settlement assurances. And back in like 2017 when I was getting into crypto, like people were still getting confused about like like coin versus Bitcoin. Like like coin, it's Bitcoin, but faster and better. Like yeah, like coined blocks are four times faster. But is the important thing about crypto is that when you make a transaction, it is final. It is in the blockchain. And so like, yeah, you,

Starting point is 01:09:30 could make a Bitcoin and you could spin up so it has 10 trillion transactions a minute. Is that what makes blockchain faster, though? Can you just have faster blocks to make transactions more final? In the concept in the world of settlement insurance, the answer is no. And so because Bitcoin's proof of work, its hash rate is like hundreds of times faster than light coin, technically, even though Bitcoin is a slow blockchain, its transaction finality is the fastest that it's out of any blockchain that exists. At least that's when I wrote it back. in 2017. Ethereum proof of stake and finality is actually now the new fastest because it takes six minutes to have billions of dollars of settlement assurances. So you know that your transaction

Starting point is 01:10:12 is in the chain or else there will be tens of billions of dollars of ether burned if your transaction gets unwound. So light coin can't hold a candle to Bitcoin's finality just because it has faster blocks. Now, settlement insurances also goes back to the trad payment rails, right? Except in the Trad payment rails, you get settlement assurances from the court system. So to undo a transaction in the trad world, like you can go and undo an ACH transfer at any arbitrary time. There is no finality in the trad world. There's finality in the crypto world because we operate by crypto economics. So the idea of settlement assurances allows you to have property rights assurances.

Starting point is 01:10:52 This goes back to the idea of property rights. The assurance is that your property is yours and is not going to be taken from you because of settlement assurances. I've written an article about this. I gave a talk at Ethereum about this in 2019. And then we did an episode on this. It's like episode five or episode seven of the bankless podcast. And so actually I just went into the Discord just now and just wrote this answer out to Tad's you because I was so excited that they asked it, which is how you know that I didn't actually ask it myself. And I just dumped all that stuff in there into the Discord because it's such an important part of like how we think.

Starting point is 01:11:29 It really is. really gets to the base layer of why we're here and the entire thesis for crypto, I think. Like settlement assurances is really the economic weight that is cementing your particular transaction on chain, right? It's all about, property. Yeah, it's all about economic weight. And what's interesting, too, is what you can compare it across different chains, of course, but the comparison that you did with nation states and you say, like, a transaction

Starting point is 01:11:55 is kind of settled by the court system, can be undone by the court system. there's even a layer under that, right? If your court system is functioning and democratic and there's a set of rules, yeah, that makes sense. What happens if your government becomes corrupt? What happens if you're a political dissident against an authoritarian government leadership? Well, not very difficult for them to unsettle your settlement transaction.

Starting point is 01:12:21 There's no finality, really. And so what are the settlement assurances of a nation state? It comes down to, like, who's in power? Who's in control? Who's got the guns? Yeah, hopefully there's a constitution that kind of prohibits the people with guns from being able to do certain things and the society's governed that way. But what if that fractures?

Starting point is 01:12:41 What if that decays? Cool thing about crypto is it's all kind of economic weight. We don't need to have guns. And so it provides a different, I might say better. For the digital realm, it is a better settlement assurance. It's also worldwide. Anyone with an internet system can access it. one of the books, I can't think of the name.

Starting point is 01:13:02 Name escapes me right now, but it's an economic book around the growth of economies. And it talks about how property rights are the best predictor. Like the certainty and the stability of your property rights system is actually the predictor of a nation-state success. What did America get really right? Hernandez-Dissotos' Mr. Capital. Yeah, yeah. That's it. What did America really get right in the early days?

Starting point is 01:13:27 By the way, it took a long time for them to get here is, property rights, settlement assurances, and once they got that right, man, the economy was humming. People wanted to bring their businesses here. Entrepreneurs wanted to open up shop. People wanted to bring their capital to the country, the economic network with better settlement assurances. My God, I feel like we have another podcast in us, David. Was it, wait, it was you then asked the question. Ah, yeah, caught me. There we go. We should go on to the next. But maybe we need to dig deep in the archives and pull back some bankless content for kind of the new generation. Yeah, bankless

Starting point is 01:14:04 lore. But let's get to this next question from zero X nadir. This was not me asking the question. What are some of the biggest differences between this bear market in 2019? What would you say to that? Yeah. So in 2018 or 19, we were creating D5 for the very first time. In fact, we were coming up with a word for it. Uniswap was created, compound was created, Maker Dow was growing. That was what was going. And like it was a zero to one moment. It was like we actually going into the last bear market, we really didn't know what Ethereum was good for. Like we had to defend smart contracts. Just scam ICOs. That's all it was. Yes. And like, and like, we also had smart contracts that blew up, right? So like we had to defend Ethereum, even though we had nothing to stand on as a

Starting point is 01:14:46 foundation, we had just an idea to protect. That idea was correct because the next bull market happened was a defy bull market, defy summer, NFTs, blah, blah, blah, blah, blah. So here we are in this bare market. What are we building now? Much more sophisticated financial infrastructure. Layer two bridges for reduced stuff. Layer two's and bridges. And then USC is huge. The market cap of ether is massive. I say what is being built now. There's direction and purpose and we know what needs to get built. Like the main difference in this bear market is we know what we're doing. Last time we did not know what we're doing. Investment in this ecosystem is much more directional and with intent and purpose with a vision with a North Star rather than just

Starting point is 01:15:31 like wandering around in the dark. So in addition to that, we also have 10 to 100 times the amount of capital. Like we almost ran out of money last time. And so those are the main differences. The crypto's big. Gone are like the most frustrating thing about, and I picked up on this, I think really early in my crypto career. There's like, oh, Bitcoin, Ether, it could go to zero. You could lose. You can lose everything that you put in. And people were saying that back in 2017 about Bitcoin. And I was like, it can't actually go to zero. That's the point. And we stopped saying that last bear market. Or you could say, if you say that Bitcoin or Ether could go to zero, then you could also say that about any other asset on the planet. The dollar could go to zero. And it actually

Starting point is 01:16:14 will go to zero. Right. Sure, it's all possible. We're just talking about probabilities here. Right. And so this bear market, like no one's, no one's saying these words. And so everyone now, and this is what it means to be priced in, right? Ether was $80 to $300, and now it's $1,000 to $2,000. No one's pricing in like going to zero anymore for Bitcoin and Ether. And that's producing a more stable foundation for people. What was you saying? 2018 was existential.

Starting point is 01:16:44 I think of it as kind of a startup. Like Bitcoin did have product market fit for some things, but Ethereum smart contract, defy, no, didn't have product market fit. Dude, you were doing Twitter on the layer one. Could you imagine? It was a zero to one moment. It was existential. It's like you were a company pre-product market fit,

Starting point is 01:17:02 and that is the hardest thing to do in an early-stage company, and most companies fail right there. Like most companies die, most things die, most networks, most ideas die because they don't actually achieve product market fit. Now I have complete certainty that Ethereum smart contracts have product market fit. We've already done the zero-to-one. The only question is, how big is it going to get? now we're just assessing what the total adjustable market for this thing is.

Starting point is 01:17:28 Is it a 10x from here or 100x from here? How many zeros we got left is the bigger question? How many zeros we got left? How much of the financial pie are these crypto networks going to be able to eat? I happen to think it's going to be a lot of them. I happen to think it's going to be kind of dominant. I think we end with, I don't know, man, I haven't given out numbers in a long time, but we're going to be tens of trillions of dollars in total crypto market cap.

Starting point is 01:17:54 Remember at the intro, we say that every week. We're at $1 trillion right now. 30 to $50 trillion. I mean, that seems within sight to me. Now, where do you distribute that? There's a lot of questions. How much goes to Ethan Bitcoin? How much go to kind of the app layer?

Starting point is 01:18:08 Don't have all the answers to that. But I do think that this entire new financial system will be denominated in the base money systems of their respective dominant blockchains. So that's pretty bullish for assets like ether. Anyway, totally different world in 2019. I wasn't sure if we're going to make it. Now it's just a waiting game while we build.

Starting point is 01:18:30 There we go. Got some takes of the week, David. Here is the first take. I don't know if you saw this. I'm just going to play this for you. This is from Fred Wilson. You remember Fred? Unsquare Ventures.

Starting point is 01:18:40 All right, this is what he says. The context here is, I think he was taken in front of some sort of government body. There's Barry Silbert in the picture here. And asking about crypto. And here's what he says. The lesson from the internet. is anything that China bans invest in. And that's a joke, but the U.S. allows Google to operate here,

Starting point is 01:19:03 allows Twitter to operate here, allows Bitcoin to operate here, allows Facebook to operate here. Chinese government doesn't allow any of those companies to operate the way they operate in this country or at all. It's about freedom, ultimately. I just love that take. The lesson from the Internet is anything that China bans, invest in. Of course, China has banned crypto in the past. I would broaden this, though, beyond China, anything that the establishment is worried about or wants to ban, invest in that thing. This is part of a post where Fred Wilson recently responded in one of his quarterly calls

Starting point is 01:19:43 at Unisquare Ventures, which is a VC fund that he operates. If they were going to respond to the regulatory pressure on Web 3 by divesting, basically, cutting back their investments in Web 3. And this is what he said, when they want to shut it down, I say double down. So to Fred Wilson, it is bullish that the authoritarians and the institutions that are threatened by this asset class want to shut it down.

Starting point is 01:20:14 What do you think about that? I love the line. Yeah. I mean, buy blood. It's the same thing saying, buy when there's blood in the streets. It's like, yeah, so like we're getting choked out, starting to bleed. You should probably buy. Choke me harder.

Starting point is 01:20:29 Choke me harder, daddy. Okay, Ryan, I got a take for you. So this is something I learned this last week here at Zuzalu. Okay. Have you heard of the millennial pause? I didn't know this was a thing until I watched these videos. But why don't you explain this? Okay, so the millennial pause.

Starting point is 01:20:48 is like when you're on Instagram or TikTok and you're recording yourself because you're about to post a TikTok or a story or something. The millennial pause is this very brief moment right when they hit the record button and they wait for it to start recording and then they take a breath and say,

Starting point is 01:21:04 hey guys, it's me, I'm on this TikTok video, blah, blah, blah. And then it's called the millennial pause because the zoomers are also on TikTok, also on Instagram because they're of age now and they're like, why the fuck do you guys do that? Wait, wait, wait, can we see an example of this? Yeah, okay, like, yeah, open up the link.

Starting point is 01:21:20 We got Taylor Swift doing the millennial pause. Okay, so it's very, very subtle and very, very brief. So you have to pay attention to the very, very first moments of this video. And this is every time a millennial basically records themselves doing something. Yeah, doing a selfie video. Yeah, talking to the camera. All right, here's Taylor Swift. Let me see if you can spot it.

Starting point is 01:21:40 It's that pause right there. It's just a hesitation. Hey, guys. When the video starts, they're not already talking. They're waiting for the video to start. So when I first did that, when I first watched this, I was like, yeah, that's how you do videos. Like, is there another way to do video? Apparently there is.

Starting point is 01:21:56 So what is the contrast with Gen Z? So there's the Gen Z got the Gen Z shake, which is the equivalent to the millennial Plas. So what is the Gen Z shake? It's like when they hit record, they put their phone down and they continue to talk to the camera because it's like candid. And the important thing about this, why I thought this was cool, is that this comes from when millennials watch this camera and phone and internet technology arise and go from shit to good,

Starting point is 01:22:24 when we hit record previously you would wait for the software to kick in for the recording to start. There was a pause. And you need to wait for it to happen. Now with modern iPhones and like Android phones, it's instantaneous. But we still wait. So we're getting old. And so the zoomers are calling millennials boomers because of this millennial pause thing. We're waiting for our antiquated old technology.

Starting point is 01:22:46 to like start recording. But okay, so the Gen Z shake is that they hit record and then they set their phone down and then they start talking. And so they're talking as they sets a phone down, but the phone is shaking because they're setting it down. And so they don't wait for hey guys, they don't wait for the breath.

Starting point is 01:23:03 They don't say filler words. They just go right into the conversation. So they hit record and simultaneously start talking and saying, hey, you know when that thing happens, blah, blah, blah, blah. This is the difference. I think you have to see it. You'll have seen this if you've ever watched something you know, on TikTok or, okay, so this is the Gen Z shake.

Starting point is 01:23:19 Right. That was it. Do you see it? Yeah. Uh-huh. I mean, that was very exaggerated. She was doing it on purpose. But yeah. Yeah.

Starting point is 01:23:33 I just think it's so cool how like both hardware and software that improves over time impacts the people that use it. Right. I thought that was like a very fun phenomenon that like zoomers are calling millennials. Like yeah, you just did the millennial pause. And we're like, what do you mean the millennial pause? What am I doing? I think it is so fascinating to see how technology impacts culture and behavior. Are you going to stop doing the millennial pause?

Starting point is 01:23:57 Or now you're just going to notice it. Do you think I'm this type of person to record selfies and post them to TikTok? Do you think I do this? You guys should see a bankless TikTok channel. It is nothing. There's nothing going on there because David and I suck at this. All right, man. Well, thank you for bringing that to our attention.

Starting point is 01:24:14 Now I know. Tell me, what do you bullish on this week? Okay, so I was on the Salonadah podcast. Right? Yeah. So it's called The Validated Podcasts hosted by Austin Fedra. I've actually hung out with him a couple times in real life. So we talked about the differences between Ethereum and Solana. And so I thought that it was a really cool and enjoyable podcast. What were the takeaways? I made a big call to action. I talked about how bankless came to be. A lot of it is about bankless, right? And how like we are kind of the voice of Ethereum. And I was like, yeah. So like the Salana people, the Salana community came in. And it's a lot of it's about bankless came in. And I was like, yeah. So like the Salana people, the Salana community came in. to the world of crypto in 2021. They didn't go through the same, like, upbringing that the Ethereum people had in the last bear market, where we were just harassed by Bitcoiners, and we had to prove our legitimacy and prove why we were here.

Starting point is 01:25:03 It's a generational difference. And they, so, like, they skipped that in my mind. And so they skipped over the idea of settlement assurances, which Ethereum and Bitcoiners are aligned by. They skipped over the conversations of, like, what makes a full note and why do you need to have a full node that's easy to manage and easy to run? We skip the, they skip the conversation of what is money. And so, like, they're coming in.

Starting point is 01:25:24 And then, like, the Ethereum people are like, hey, like, don't use centralized chains. You pay the gas fees and you'll like it. And, like, understanding that that's not, like, a way to onboard new users. And we just went back and forth on, like, the philosophical differences and, like, the upbringing of these communities. I thought it was a really good podcast. It's actually going to come out on the Bankless RSS feed soon, TM, maybe this weekend.

Starting point is 01:25:45 And so it will be in your inbox player as well. I asked Austin if we could release it here on Bankless. he said yes and sent me the file. So that'll come soon to this podcast player. I think one thing that I think is true that I'm not sure a lot of people agree with, but I think it's true anyway, is I believe very much that Solana is good for Ethereum. I think the Solana community would probably say Ethereum is good for Solana. You know, it sort of came first.

Starting point is 01:26:10 Bitcoin and say Ethereum is good for Bitcoin, blah, blah, blah. I actually think Solana is good for Ethereum. It's really kept Ethereum on its toes from a user experience perspective, right? even like developing while it's like Phantom, which are now coming back to, coming to Ethereum, right? But this is the prioritization of user onboarding. I mean,

Starting point is 01:26:33 Ethereum hasn't had that. It's been a little bit of what you've said of like you will pay high gas fees and you'll like it and you'll deal with our shitty UX and you'll like it. And Salana's a bit more like, hey, like we need to onboard people quickly. And Ethereum, sometimes Ethereum will be like,

Starting point is 01:26:50 but you're cutting cold. corners, right? And, but I think there's probably a healthy balance of how can you improve your UX without cutting those corners. Anyway, I just think that community has made Ethereum sharper as well. I don't know if everyone agrees with that, but there's a take. That's what we do on bankless. It takes all the time. All right, Ryan. What do you bullish on? I'm bullish on this. This is a tweet from Ryan Berkman's on tokenized treasuries. I didn't know this before I actually read this tweet. Here's a fact sheet.

Starting point is 01:27:21 Total value locked from $0 to $200 million in three and a half months, half a dozen good competitors, the yield on tokenized treasuries, the future of tokenized treasuries right now because interest rates are so high is 4.75%. You can see this in a Dune Analytics, a dashboard. But the idea, David, of tokenized T-bills, actually gets me kind of excited.

Starting point is 01:27:46 And I'm not the type to be excited by, like, on-chain real-world assets. But, like, we don't find this type of yield in D-Fi these days. 4.75%. So I think if we can onboard more T-bills on-chain to Ethereum, this is an area of growth for us. I mean, the amount of real-world assets that we have on chain is pretty low, and T-bills are, like, pretty simple.

Starting point is 01:28:11 They should be very simple to actually deploy and put on-chain. And even the idea of this, this is in Ryan's tweet here, personally, I hope we'll see a tokenized T-bill with whitelist minting, permissionless trading, secondary one unit equals $1 with rebasing yield. This would be a USDC competitor that passes its yield onto customers, whereas USDC has 100% take rate. So imagine there was a version of USDC, in quotes, that was, instead of dollars, tokenized T-bills, gives you that additional 4.75% juice. You actually can't access that as a fungible token in the real world, can you?

Starting point is 01:28:53 You can't go spend tea bills at a store. You have to have dollars. But you should be able to, shouldn't you? And a tokenized T bill would make that happen. So I didn't expect to be bullish this week on real world assets, let alone T bills. But I'm kind of weirdly bullish on the marrying of the two things. And that is why. I mean,

Starting point is 01:29:17 crypto people love their yield, right? So it makes sense. And all capital wants to converge. And so capital will find its way naturally to Ethereum as the epicenter, the logical conclusion of where capital will go. Makes sense to me. Have I made you bullish on it?

Starting point is 01:29:32 I'm always bullish on real world assets. You're never not bullish on that. I was always bullish in real assets. Maybe in the week, what do we got? Before it was cool. So it was EdCon this last week. is the Ethereum Educational Convention

Starting point is 01:29:47 Conference. And last year, so in this photo, this is how it started, how it's going kind of meme. This is an Instagram account of this man named Mickey, who is probably going to be

Starting point is 01:29:59 the Prime Minister of Montenegro. Elections are in two weeks. Last year, Vital got a Montenegrin passport. And this year, Edcon, he also got this, like, traditional Montenegrin, like, garb. I'm not.

Starting point is 01:30:13 even going to be able to try and explain this for the podcast listeners, but the guy is looking, how would you even describe that? I don't know. Without misplacing my cultures here, I actually don't know what this looks like. Yeah. Anyways, so Mickey, this is actually a story about Mickey, the incoming potential prime minister of Montenegro. I don't have time to explain it in this one meme because this is just the meme of the week, but it's bullish. He's bullish crypto. It sounds like crypto and making Montenegro like natively a crypto country.

Starting point is 01:30:46 So kind of like El Salvador, like official Bitcoin is like the official currency of El Salvador. That except it makes sense in Montenegro. Let me say that again. Kind of like that, but with plans that actually make sense. Yeah. Well,

Starting point is 01:31:02 that would be bullish if we could get something like that. Very good. Well, guys, thank you for being with us on the roll-up again this week. Risk and disclaimers, of course, none of this has been financial advice. What do we say every week? Crypto is risky. So is Bitcoin.

Starting point is 01:31:16 So is Ether. So is Defi. You could lose what you put in. But we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.

Bankless - ROLLUP: Binance Commingling User Funds | Ledger Recover Postponed

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.