Bankless - ROLLUP: Bitcoin NFTs | Canto | FOMC Interest Rates | Blur OpenSea Royalties

Starting point is 00:00:00 Bitcoin gets NFTs, but the community wants to censor it. Bankless Nation, it is the first Friday of February, and it's time for the what, David? The Friday weekly roll up where we cover the entire weekly news in crypto, which is always an ambitious endeavor. Yet, we persevere. Nonetheless, Ryan, I've drank about two times the amount of coffee that I usually do. So that is a fair warning to the bankless listeners out there. Your boy is caffeinated. Yeah, I could tell. I could tell from some of your Twitter activity. I had to like literally pull you away. in order to do this show. Slow down there, my boy.

Starting point is 00:00:34 All right? We got, this month, though, for you, you're doing a lot of travel, right? You got some conferences coming up? I called it in the conference month, but you're like, it's not conference. I'm like, two conferences, man. That's a lot. For me, that would be like two years worth of conferences.

Starting point is 00:00:49 They bookend the month. So tomorrow I leave for Tel Aviv to go to the Starkware sessions. I'm very excited for that. And then at the end of the month. In Israel. In Israel, yeah. Are you ready for those big brains? I mean, you are a big brain.

Starting point is 00:01:01 in your element, but this is like cryptography big brain. Yeah, it's cryptography big brain. And no, I'm not ready for that. Like account abstraction, ZK roll-ups, like it really stretches what I, my brain is able to comprehend. We'll see if I come back broken or or not. We'll see. Or full of new ideas. Yeah, hopefully the latter, but you know, we'll see. So you got that. And then what else? Denver? East Denver at the end of the month, which is where bankless, the bankless nation is going to have its first ever in real life meetup, which we will talk about later in the show. That's awesome. All right. So what are we going to get into this week, David? First, we've got to talk about the markets, Ryan, because the markets are hot.

Starting point is 00:01:38 Token appetite is absolutely in. We're going to talk about the layer two tokens that are up. We're going to talk about the layer two app tokens that are up and some other layer ones as well. So that's coming in first. Caffeinated and bullish today. Caffeinated and bullish. It's the best combination. It's the best combination. After this, the FTX story continues. We're going to find out who exactly is paying for SBF's legal fees. And also, SBF, trying to engage in witness tampering, seriously? We'll talk about that. And also, third, but also so much more after this, Bitcoin has NFTs.

Starting point is 00:02:12 Oh, cool. Yeah, did you hear about this? Yeah, I heard about this. So I'm sure everyone in the Bitcoin community is super excited about it, right? Hey, everyone, everyone loves it. Everyone loves NFTs on Bitcoin. Not only NFTs on Bitcoin, Ryan, but right before we were recording, I was actually playing Doom on Bitcoin. You know, Doom? Yeah. Doom.

Starting point is 00:02:32 I remember, I could play that in my T-I-83 calculator. Oh, really? Yeah. It's in order to D-Map. Bitcoin is... I'm not saying, by the way, that Bitcoin is a calculator and Ethereum is more like a smartphone. Not drawing that analogy at all, but that's pretty cool.

Starting point is 00:02:47 Doom on Bitcoin. I will absolutely draw that analogy. Bitcoin is at least as powerful as a T-84 calculator. So that and like so much more is going to come in this weekly roll-up. So make sure that you like and subscribe, rate and review. wherever you are. These YouTube videos come out every Friday and podcast as well. So make sure that you're subscribed. So you don't miss a weekly roll-up. Oh, only rate it though. If you're given a five-star. If not, just forget it.

Starting point is 00:03:12 Just you can pass. Yeah, five stars only. I think our rating is like 4.9. So if you give us a four-star, you're actually bringing us down. Don't do that. Oh, wow. A bunch of haters just waiting give us one-star. It's going to be 4.8 tomorrow next week. Sorry about that, guys. Hey, one thing before we get in, got to tell them about this really cool new It is called Metamask Learn. You want to learn some crypto? You can start here. David, what are we looking at on screen?

Starting point is 00:03:38 We are looking at a brand new educational platform from Metamask. And so not only is Metamask going to give you a self-custodial wallet, they will also teach you how to use it. But also, if your friends or family or ever like, hey, can you teach me how to do crypto things, you can send them to... Is that the voice they use? Is that what your family sounds like? That's exactly all of every single members.

Starting point is 00:04:00 Kind of a whiny voice. you can send them to Metamask Learn. And so that's learn.metamask.io and it will walk you through some very basic crypto web3 concepts. It will also teach you how to manage a wallet, but also teach you so much more. What is digital identity? Why self-custody is amazing. NFTs and creators. What is Defi?

Starting point is 00:04:19 And so it's this immersive platform, immersive and engaging platform for you to educate yourself or pass along the responsibility of educating others so you don't have to do that. heavy lift onto Metamask. Learn. There's a link in the show notes. Learn. Metamask. I This is really cool. You can actually simulate using Metamask wallet. It's like a course type structure optimized for learning. So thanks to our friends and sponsors at Metamask for teeing us up with that. All right, David, let's get to the good stuff, caffeinated and bullish. You told us about the caffeine. Now tell us about the bullishness. What does Bitcoin doing on the week? Bitcoin starting the week at 22,750. And it is now up 5% to 20,000.

Starting point is 00:05:00 3,880, at least at the time of recording. Actually, no, it's that 24,000 because my numbers are already out of date. So 6%. 24K. That feels good. I'm happy about that. How about ETH price? East Price starting the week at 1566.

Starting point is 00:05:16 Ending the week, oh, we are just, oh, we just broke 1,700. Oh, that's great. Hey, Poppy,700. We're back. When was the last time we hit 1700? By the way, I'm zooming out. Look at this chart, charting on Cracken Pro. Wow.

Starting point is 00:05:30 Yeah, the Cracken Pro UX is awesome. I've been tinkering around. So you have Bitcoin US dollars, you have ether US dollars, you have also the BTC ratio. Those are actually modular and you can drag them around and have multiple window views in the same screen. I mean, I'm not sure if you'll be able to, Ryan, because you're not a charter.

Starting point is 00:05:47 But other people would be able to figure this out. Normal people can. Normal people can figure this out. It's not Ryan. Not Ryan, though. Well, this is great, man. We're up and we're doing well. I mean, this has been a killer month.

Starting point is 00:05:58 Where do we start at the beginning of January? Oh, God, it was bad. Something like 1,200? 1,200? 1,200 at the start of the month, we are at $1,7003 at the time of recording. We just added 500 Eth in the month of January and the first day of February? Yeah, that 1,700 number is definitely some strong resistance. We are just poking through it at the time of 1.40 p.m. Eastern time on Thursday the 2nd.

Starting point is 00:06:21 If we can poke through this resistance and hold that, that is a big deal. That's a big deal. 1,700 resistance is hard. Back to 4,500K? 4,500, I mean? 4,500, K would be a large number. Yeah, sorry, sorry. So, like, we have to actually break through it and then sustain it.

Starting point is 00:06:37 Like, we could hit the ceiling and bounce back down, and that's also a possibility. But the fact that we have our eyes above 1,700 is pretty damn good. So it was up 7% when we were at the price of 1677, but now we're at 1702. So what is that, 8 or 9%? Yeah. I mean, people getting bullish again, and the question is bare market dead is the question? But I got to pause and say, it feels like it's been way too easy to kill the bear market like this. I mean, it's, like, it's all in one month, right?

Starting point is 00:07:08 So it's been, it's moved fast. Things have moved fast. It's moved fast. It doesn't feel sustainable, at least to me. But what do I know? Let's look at the eat the Bitcoin ratio. What's that telling us? 0.07, almost up to 0.071, starting the week at 0.069, almost up to 0.071.

Starting point is 00:07:26 So definitely a good week for the ratio up a few percent. We've got to be above a trillion. 1.1 trillion? Total crypto market? Yes. That's only 2 trillion off, our all-time highs. We're only casual 2 trillion. It's not that far.

Starting point is 00:07:41 We've been much further away. We're above the 2017 highs. At least there's that. This is crazy. I think this is a gigab bullish, if you're an ultrasound money fan like David and myself. We are the most deflationary since the merge. I think we've ever been. That's correct.

Starting point is 00:07:57 All-time lows in terms of. ETH supply since the merge. Am I right about this? That is correct. ETH price is at all time high since the merge. ETH supply is at all time low since the merge. That is what I would call nice. So ETH is selling blocks. That's what this means. Because every time it sells a block, there's a little bit of a burnt ETH. And if that outstrips the amount of ETH issued, then you get the net issuance burn. And that's what we're saying is burned. So the product is hot. The product is selling. ETH blocks are being sold

Starting point is 00:08:29 and ETH the asset is net deflationary since the merge. This is pretty crazy. Can we just run that calculation again? So supply chain since the merge that is in September. September what? Was that September 14th?

Starting point is 00:08:42 When did the merch happened? Yeah, I feel like I should know that date. I feel like I should know that. 140 days since the merge. So 140 days ago and we are negative 7,000 ETH. Let's just simulate if the merge hadn't happened. Let me press this button.

Starting point is 00:08:55 Whoa. 1.638 million. Wow. Big difference. Hold on. I'm doing the math. I'm doing the math with my calculator. What are you doing? At 1700. That is, oh, I have to turn it. I have to turn my iPhone sideways to get the number because it's too big. 2.7 billion dollars of ether has not been issued since the merge because of proof of stake. 2.7, oh, actually 2.8, 2.8 billion dollars has not been minted and sold to miners.

Starting point is 00:09:26 That means $2.7 billion of selling pressure removed from the market. We would have had to sell that ethin to the market, and ether price would be a lot, it would be lower than $1,700 if the market had to absorb all of that selling pressure through buys. So instead of issuing $2.8 billion, ether has reclaimed $12 million. And in a way... $12 million is not a large number compared to $2.8 billion, but the fact that we are reclaiming $12 million of economic energy,

Starting point is 00:09:56 instead of losing $2.8 billion of economic energy is massive. I could watch this chart all day. I could talk about this all day. We know. This is like a dividend back to all ETH holders too, right? Because that burn gets evenly distributed, I suppose, in terms of upside to everyone that owns ETH. So this is not a validator feature. This is a, you're just an average ETH holder feature.

Starting point is 00:10:19 Yes. So good. All right. Well, we got more markets to cover. Let's talk a little bit about some of the news in the markets. got to talk about the Fed Watch. So the FMOC meeting happened this week. Did we go higher or lower?

Starting point is 00:10:32 Or did we say the same on the interest rate, David? The interest rates, Ryan, went up. They went up by 25 basis points, a.k.a. 0.25%. I hate the word basis points. It's so dumb. You hate that word? I hate it.

Starting point is 00:10:45 25 basis points? Yeah. I think it makes people sound cool. Yeah, it sounds like you, I feel like you have to wear a tie, a suit and a tie to say those words. I think that most people don't understand what a basis point is

Starting point is 00:10:57 out there in the real world and so saying it automatically makes yourself like makes you a fin like a finance bro or something yeah yeah it's like quantitative easing do you mean

Starting point is 00:11:09 do you mean money printing is that what you mean? Yeah yeah I get it I'm not a huge fan but I do feel a little cool when I say it sometimes so I'm not gonna promise to never say it on bankless

Starting point is 00:11:19 don't call me a hypocrite anyway we're off subject But that is 0.25, 25 basis points, is less than usual, right? Because usually it's about 0.5 or 0.75. Is that what it's been historically for the last few raises? I think that's right. I think this is the smallest rate hike that we've had since we've started hiking. I think that's correct.

Starting point is 00:11:39 Well, Powell says policy is going to remain restrictive for some time. He says this. We have to complete the job. That's what we're here for. Have to complete the job. That's what you're here for. Staying steady. Staying restrictive.

Starting point is 00:11:52 a lot of people say kind of the worst is over. This was some of the sentiment reflected on our podcast with not only Chris Berninski. That episode came out earlier this week, but also Eric Peters, which he has One River Capital Management, very large crypto hedge fund. David and I caught up with him and talked to him. That episode is coming out not next week, but the week after. He said the same thing. Basically, the worst is over.

Starting point is 00:12:19 and so we might still get some more raises, of course, in the future, but the rate of change has slowed. Like we're beginning the dissent, I suppose, you might say. And I think that's what the market is reacting to. Is that why we're up this week, David? As soon as the 25 basis points news broke, markets across the board, both crypto and trad markets all pumped, bigly. The S&P 500 jumped to 1%, which is a...

Starting point is 00:12:49 huge move for the S&P. Big move. Big moves. Yeah, that's a 1% move. Yeah, everyone's excited about that. The federal reserve raised rates, Chair Powell says it's premature to declare victory against inflation. So we may have topped on inflation, but premature to declare victory.

Starting point is 00:13:07 Yeah, the S&P up 1%. I would just like to point out that Genesis Capital was announced going to bankruptcy. The markets did not respond negatively. In fact, they started pumping afterwards. the lower interest rate hike was announced, and markets did respond very positively to that. So markets are not being negative to bad news, and they are being positive to good news. So those are signals to pay attention to. I think the next big thing is the February-January CPI print, which will come out in like a week or so.

Starting point is 00:13:42 And if that is negative, that will be the fourth month in a row of negative inflation reporting. and I would expect if that does happen, that markets would respond positively to that if it does happen. Happy music again, but it doesn't feel like it's over. I feel like all of this has been too easy, David. There's something like that in the pit of my stomach. D-Y-D- or D-X-Y, so that is the dollar index, down four months in a row. This is a chart that you put up.

Starting point is 00:14:07 Why do we care about the dollar strength? The dollar strength is falling four months in a row, which is just indicating that there is appetite to go out of dollars. to sell, sell dollars for other things. Yeah. Yeah, that's interesting. We like a continuation. In the Eurozone, meanwhile, in Europe, inflation is more than anticipated. And there's some debate, I guess, being had over the European Central Bank rate policy.

Starting point is 00:14:34 What should they do in the future? Should they begin hitting the brakes or what? So similar sentiment happening in Europe at this point in time. I have no further comments. I would like to talk about tokens now. Can we talk about tokens? Yes. David has no further comments on the ECB. I don't have any opinions on European info. I would like to talk about the tokens, Ryan. Tokens are up. Tocons are up. Caffinated and bullish. I told you it was going to happen. What are we looking at? Is this monthly price for O.P. Immutable, IMX and Maddo. These are no. These are actually 24 hour prices. However, monthly prices are also. Yeah, I can't make Coin Gecko report monthly prices. These are the prices in the last 24 hours. Optimism. I bet I could. do that screaming to brand new all-time highs optimism coming in at $2.82. That's up 25% in the last 24 hours.

Starting point is 00:15:25 Immutable up 19% in the last 24 hours. Maddick up 13% in the last 24 hours. But monthly price movements are pretty, like they're green. They're very, very green. Like optimism has been hitting all time highs all month. Matick is coming back very strongly. L2 tokens are in right now. Big in. Dude, you know what's crazy? The optimism fully. diluted valuation is basically on par with the Polygon fully diluted valuation. What? Yeah. Yeah, 12.1 billion for optimism and 12.4 billion for Polygon. Wow. Now one big difference

Starting point is 00:15:59 is, of course, optimism has a lot more tokens locked up. Yes. To look at that market cap in terms of liquid supply. It's a lot lower on optimism side versus the netics side. That's definitely something to point out. Yeah, so 600 million is the market cap for optimism. So that's how many tokens are actually liquid in trading. But the

Starting point is 00:16:17 market cap for Polygon is 11 billion. So Polygon has gone through much more price discovery than optimism has. Did you say IMX too? That's an immutable X token that's up 20% yeah almost in the last 24 hours pretty crazy. Oh, we got some more tokens here more tokens more tokens are bullish. Magic GMX and velodrome. They are also doing things. Yeah so these are just three tokens just because that's the space that we have on screen, three tokens that I picked out. Arbitrum tokens, all kind of just, the charts just all look so good. GMX, $68 up 20%. That was the one, that was the token that was the only token that actually went up in 2022, and it's continuing to go up in 2023 so far. Magic is a token that I have exposure to, so the disclaimer is, it's just printing new Altum Heinz Velodrome, which is a token

Starting point is 00:17:07 on optimism, also hitting local highs. Just the, the, the, the, the, the, the, the, the, the, the, the, L2 trade is on right now. Big time. L2 trade that is carrying over not only to the layer two asset itself, but also to some the app layer, yeah. The app layer on top of them. How about Kanto? So this is another, I think a layer one story.

Starting point is 00:17:29 And we brought this chart in here for a reason. This is the 24 hour view, but I want to look at the 30 freaking day view. Look at this. Wow. From, I'll view it in Market Cap. How's that? So we went from a $35,000, $35 million market cap, beginning of January, all the way to $230 million market cap at this point in time. A little 10x in January.

Starting point is 00:17:53 Wow. Should tokens be doing that? Are we sure about this one? What's happening over in Canto world? So Varian put out a blog post about their position in Canto and then also kind of talked about what their deal is with it and why they believe in. it. So they call it a layer one incentive experiment. So Canto, they use a bunch of just like, they use a bunch of wild going west metaphors, which you know, you know, gets me going. And they talk about like nationalizing a lot of the infrastructure that gets built and gets it

Starting point is 00:18:25 built into the chain. So Canto has a decentralized exchange, a lending market, and a stable coin, all quote unquote, nationalized public goods built into the chain itself. And so after they release this blog post, it just kind of created attention, sufficient attention on Canto. When you say nationalized, are you talking about, like, in the similar way, I almost think, you know, Tara and Luna,

Starting point is 00:18:49 like, Terra kind of nationalized an algorithmic stable coin, right? Because it had USCT that was backed by Luna. And it was sort of part of the same, the entire ecosystem. Is that kind of what Canto's doing with some of these protocols? I think so, but then I, like,

Starting point is 00:19:06 communicated that point is like yeah like canto is taking like infrastructure and nationalizing and trying into the base lane base chain and then scott the founder was like that's not right and so i'm kind of confused about i thought that that's right and that's what this article says uh is how we've been getting on twitter fights overall morning a little bit yeah uh-huh well you know what we're going to have them on i think next week right to um understand what is happening with canto and how this chain is structured it is not a layer two though no this is a layer one we are talking about a layer one right now Yeah, a different layer one. What is this built on?

Starting point is 00:19:40 Is this built on Tenderman? Is this like Cosmos app chain thing? It's an EVM compatible chain. So EVM fork with a bridge to Ethereum. I don't know how the bridge works. So bridge at your own risk. Yeah, but we have in Zach Cole. For those that remember, Zach Cole,

Starting point is 00:19:54 super hilarious guy. Used to be at White Blocks, just been in the space for a very long time. Very funny guy. Zach Cole's coming on to talk about Kanto. Interesting. Well, beware of this. I think when a token pumps 10x, you know, beware, but also it's something to investigate.

Starting point is 00:20:12 So we're going to continue the investigation of that next week. There's some other things that we've got to talk about in sort of pump news. One was DYDX. We talked about that a little bit last week, David. DYDX was pumping because they changed the vesting schedule. I guess more information has come out about that vesting schedule. It seems like maybe mistakes were made. Some of this wasn't smart contract secured.

Starting point is 00:20:36 Tell us the story about DYDX's pump and subsequent vesting controversy. Yeah, so when DYDX kicked out their vesting unlock like six months, and then it created the DYDX pump that we've seen recently, at least that's how people are analyzing it. And as a result of that, that put attention onto the vesting schedule. So this one on-chain sleuth, if you will, on-chain investigator, went to go check out what the vesting contracts actually looked like and they end up their tweet, their first tweet on this thread saying, it's not pretty.

Starting point is 00:21:08 And then so that triggered me to read this thread to go investigate. And I'm reminded of, here's a fun little side quest of a story, Ryan. There was this lawyer back in the ICO days that went and actually investigated the claimed smart contracts of the token lockup schedules for teams. And so teams would say, like, hey, here's the team allocation. We're vested for this long. and we have this much supply. And then the lawyer went and actually investigated the smart contracts

Starting point is 00:21:35 to see if the smart contracts of the tokens actually resembled what was stated by the public literature of the ICOs. And he said he discovered something like 85% of ICOs did not actually have their stated vesting schedules codified in the smart contract. It was just like trust me, bro. So it was just a pinky promise then. Pinky promise, yeah. Exactly.

Starting point is 00:21:57 When you could have put it into a smart contract, you just didn't and said like, oh, we were, we'll just abide by it, you know. Yeah. Guess what, what the name of this professor was? I don't know. What was the name? Dave Hoffman.

Starting point is 00:22:11 No way. Yeah. We follow each other on Twitter. He doesn't really care about the crypto world. He doesn't really care about the crypto world, but when the ICO mania was going, he decided right out. That's right, Dave Hoff. There can only be one, David Hoffman, all right?

Starting point is 00:22:24 He's on bank, yeah. Go flee to another industry. Anyways, I think you can see where we're, Anyways, I think you can see where we're going with this. D-Y-D-X did not enforce investing schedules in their smart contract. A little sloppy. Oops, yeah, come on, guys. Like, this is what a smart contract does.

Starting point is 00:22:42 It does this work for you. And so this spreek, this account went and investigated all of the investor allocations and notice that people were selling. And then later buying back the tokens that they sold. And it's impossible to tell, what is an oopsie versus what is actually being malicious. Brian Armstrong actually is in this list. And I think it's pretty easy to identify that Brian Armstrong made a whoopsie.

Starting point is 00:23:09 He's got a lot to lose. He's got a lot to lose. Yeah, sold his D-Y-D-X allocations and then went and bought it back like pretty damn quickly afterwards because they didn't enforce it in the smart contract level. Other investors have very clearly sold their tokens and not bought back their tokens. But I think the conclusion, the speculative conclusion of this tweet thread person, says that like it's clearly someone at DYDX in the DYDX comms or compliance are like reaching out to people who sold their DYDX tokens and then say, hey, dude, you're still

Starting point is 00:23:39 vested. You have to buy back your tokens. Look, look, a little bit of sloppiness. That's really sloppy. They're trying to unwind it. I guess what I'm excited about is we can see all of this on Shane. We can see you guys. We get to see it on Shane.

Starting point is 00:23:55 You know, we, we had to take that in 2022. the reason DeFi held up and C-Fi didn't was because D-Fi was regulated and C-Fi wasn't. D-Fi was regulated and C-Fi wasn't. You know how it was regulated, David? Smart contract. By code. By code.

Starting point is 00:24:12 You mean the reason why we're here? Yeah. It was like we had the regulation on chain so you could see what was backing an asset like AVE. What was backing an asset like compound? We didn't need the regulators, quote, unquote, because that regulation was enforced by a code. code on chain where anyone can audit it.

Starting point is 00:24:31 But when CFI was involved, it actually needed some regulators to step in and make sure that people were respecting the pinky promise. We're actually doing what they said they were going to do and that there were penalties if they didn't. So I guess the takeaway here is like, hey, defy, let's make sure when we have vesting contracts, let's make sure we are enforcing them via smart contracts because that's why we have this super power. rules. Yeah, let's not, let's not be dumb about it. Anyway, what else we got here? This is

Starting point is 00:25:04 Coinbase. It is also up. Coin, yes, the token, I almost said. It's not a token, is it? God, I wish it was a token. Yeah, so this is this thing called equity. The equity, equity, ticker symbol is called coin. It is the equity of Coinbase, the exchange. I'm by it on Unisquist. It's traded on the NASDAQ, and it's also up 150% from the bottom. There you go. Well, you know, it was ridiculously low before, so we'll see if you can sustain that. But also some good news of maybe out of the bare market. This was a funny headline. Cell token, the Celsius token, rallies 150% after Judge Martin Glenn ordered that Celsius assets put under custody by OpenAI's chat GBT. Depositors need a capable, strong decision maker at the helm, said Glenn, which is

Starting point is 00:25:52 why the court has decided to turn full control over Celsius's asset management over to chat GBT. Celsius token pumps 150%. David, you actually got me this time. Oh, wait, really? You actually got me. I can't believe that. Okay, this is, this is the rug. We said that we would do this last week. So I guess this means we'll be keeping this. Yeah, so this is a rug. So this is the onion of crypto. This is not, this did not actually happen. Celsius didn't even rally, did it? No, I don't even know. I'm sure it's on the floor, but Ryan got rugged. So congratulations to the team at the rug. You guys rubbed Ryan.

Starting point is 00:26:30 So yes, what is the rug? If you'd miss it last week, the rug is the onion of crypto. It's a product out of the bankless Dow. You can go to the rug. org.mere.xyZ. If you would like to collect this rug, collect the rug that rugged successfully rugged Ryan. Ryan got rugged. I can't believe it.

Starting point is 00:26:45 Never happened again. That's one of one. All right. All right, that's market, David. We got a lot more to cover, though. Big news stuff. What's happening coming up next? The list of FTCS creditors full of famous names.

Starting point is 00:26:56 so we're going to read out famous names that FTX owes some money to. Bitcoin gets NFTs, but the community wants to censor it. And there's also some other stuff as well. There's the blur versus Open Sea Wars. Cardano, Ryan, gets a stable coin. And Bedrock goes to governance vote as well as so much more. But first, a moment to talk about these sponsors that make this episode possible, especially Cracken, which is our preferred exchange for 2023, because Cracken's been around for 11 years and definitely plans to be around for the long term as well. Here we go. Cracken has been a leader in the crypto industry for the last 12 years. Dedicated to accelerating the global adoption of crypto,

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Starting point is 00:27:58 Krakken has a 24-7-365 client support team that is globally recognized. Krakken support is available wherever, whenever you need them by phone, chat, or email. And for all of you NFTs out there, the brand new Krakken NFT beta platform gives you the best NFT trading experience possible. Rarity rankings, no gas fees, and the ability to buy an NFT straight with cash. Does your crypto exchange prioritize its customers the way that Krakken does? And if not, sign up with Cracken at Cracken.com slash bankless. How many total airdrops have you gotten?

Starting point is 00:28:28 This last bull market had a ton of them. Did you get them all? Maybe you missed one. So here's what you should do. Go to Earnify and plug in your Ethereum wallet, and Earnify will tell you if you have any unclaimed airdrops that you can get. And it also does poaps and mintable NFTs. Any kind of money that your wallet can claim Earnify will tell you about it.

Starting point is 00:28:45 And you should probably do it now because some air drops expire. And if you sign up for Earnify, they'll email you anytime one of your wallets has a new airdrop for it to make sure that you never lose an airdrop ever again. You can also upgrade to Earnify premium to unlock access to air drops that are beyond the basics and are able to set reminders for more wallets. And for just under $21 a month, it probably pays for itself with just one air drop. So plug in your wallets at Earnify and see what you get. That's eA-R-N-I.fI. And make sure you never lose another air drop. Bitcoin has NFTs, but Bitcoin Maxis don't actually want this to happen. David, this is an interesting story. I've been following a little bit on

Starting point is 00:29:22 crypto Twitter, nudging here and there in the debate circle as well. But tell us what's happening. How is Bitcoin getting NFTs? I didn't know this was possible. Yeah. So there's this new protocol called Ordinals, which is a protocol that converts individual Satoshi, so one Satoshi into a non-fundable digital artifact, aka NFT. And this has caused a bunch of controversy. So this actually... What do you mean by a Satoshi, David? That's like the unit of Bitcoin, right? The smallest unit of Bitcoin, the equivalent would be a Gwe. A way? Away is a thousand way. Away is the smallest unit. God, Ryan, get your ETHMAXY hat on. Sorry. And so, yeah, so Ordinals, so there's this, when Taproot came into Bitcoin, it created what is kind of like blob space on Bitcoin, an extra way to put data into the blockchain. Bitcoin.

Starting point is 00:30:14 To data availability layer for Bitcoin. Kind of. It's not a one-to-one, but it's the correct mental model to understand this. And so the way that this works is that because there's this extra way to add data to Bitcoin, you can add more kinds of data than what would otherwise be a compliant transaction. And so Ordinals allows you to mint and store data on the Bitcoin blockchain with no external dependencies, no IPFS. And so when you put data like this on the blockchain, the full kind of data is there. So these NFTs are on the Bitcoin blockchain forever. So the NFTs I'm looking at right now.

Starting point is 00:30:53 And by the way, this looks like almost like a sound NFT. Yeah, it's it's data. Dude, you can put data on Bitcoin now through orders. Wow. So guys, if you're not seeing this on screen, if you're listening to the podcast, what I'm looking at is Bitcoin NFTs that are actually on Bitcoin, a little slow to load. You know, the TI 83 is takes a little bit to boot up. Here it is. Different apes, I see.

Starting point is 00:31:16 Yeah. These are not board apes. Well, kind of resemble them. They look like pixel. I saw some sound files here, some weird stuff, but like they look like NFTs. My understanding these things, David, is like, these are fully on chain. Yes. So it's not like in IPFS somewhere or RWeave.

Starting point is 00:31:34 This is actually on the Bitcoin blockchain. And you have to pay fees, like Bitcoin fees in order to store this data on Bitcoin blockchain. Right. Because you have to consume Bitcoin sells blocks. They do too? Bitcoin also, just like Ethereum, Bitcoin also sells blocks. And so if you like to put your data on Bitcoin, you have to buy that block space. Well, this sounds great.

Starting point is 00:31:59 How exciting. Bitcoin is now entering NFTs. I'm sure everyone was really excited about this. If people want to consume Bitcoin block space and to put data there, they are free to do so. Not everyone was excited about this. This is a nice visualization. So this on the left side, we have a, what's, this website is projecting as a projected block. And so these are all transactions.

Starting point is 00:32:20 The squares are the size of the data. So the big squares are like bundles of transactions where the smaller squares are individual transactions. And then on the right, you have an ordinal, which you can see why. It takes the whole block. It takes the whole, because you can. You can take up. As long as you pay for it.

Starting point is 00:32:38 Bitcoin is supposed to go up to like is one megabyte of normal transaction fees. But because of the way taproot works, it can, or Segwit or something, you can go all the way up to four megabytes. And so through ordinals, you can squeeze. in four megabytes of data onto the block. Wait, just so I understand what I'm looking at. So is all, what are the significance of, this is a Bitcoin, a block, right? Right.

Starting point is 00:33:00 These are transactions on the left. Is the purple basically used block space and the green kind of unused block space? I don't know, no, I don't know the difference between the colors. The size is the size of data. And the idea is that like more, like you can bundle up multiple transactions into one transactions. So like a big block on the left side would be like Coinbase sending 50 Bitcoin transactions at once or 100 Bitcoin transactions at once. A batch, a batch, a batch transfer, yes. Okay. But then this actual block, what we're seeing is a little thing. This blue block is an

Starting point is 00:33:30 NFT. That's an NFT on Bitcoin. Wow. Yeah. So they're selling block space. That's a good thing. It's big, big block revenue. Big block revenue. So this is Katie, Casey, excuse me, Rodhamor, who is the creator of ordinals. And there has been a bunch of from the Bitcoin world about this and how some have said it is an illegitimate use of Bitcoin. Illigitimate transactions are the words that they used. Before we get to Casey's take, can we talk about some of the like the pushback against this? Show that show the revenue chart. Go up, scroll up and show the revenue chart. Okay. That one. This? Yeah. Or excuse me, that's not, that's not revenue, but that's block size, but it's kind of the same thing. So ordinals are inflating

Starting point is 00:34:12 block sizes and weights also generating fees for for minors. And so block size. And so block sizes up, block fees are up, and miners are making more money. All right, David. So what's the controversy? There's selling blocks. Why are people upset? Well, when you take all of that block space and you allow it to be for an NFT, you're pushing out, you know, what Bitcoin maxis are calling legitimate Bitcoin transactions, as in BTC transfers, which is the narrative of what the point of Bitcoin is. What does Bitcoin do? It transfers bitcoins from account to account. When you fill up all that space with a JPEG, you get reactions like this, who is, uh, this is Dr. Nick, which I'm going to guess is a Bitcoin

Starting point is 00:34:52 maxi. Evil JPEGs are invading the sacred Bitcoin block space. This also could be satire. This also could be satire. But, but the point is is that that is people's takes. Like people, that is a, that is a Bitcoin take that we've seen or, or, and with takes like it, right? So here's Adam back, uh, saying it's fair game for miners to censor this crap as a form of discouragement saying like, yeah, okay, we don't have to allow this crap into our blockchain like, to just like not allow these transactions to make it into the chain, which is a take. That's a take. Yeah, he's saying we can recognize, add them back again.

Starting point is 00:35:27 We can recognize we can't really stop them. And it's a free world with anonymous miners. But we can also educate and encourage developers who care about Bitcoin's use case to either not do that or to do it in a prunable, space efficient, e.g. timestamp way. They're trying to enforce this on the social layer, I suppose, because they don't have any other recourse. And including in the social layers also minors, maybe, if you could convince them. minors not to process these sorts of blocks, then maybe you've got something. But aren't minors

Starting point is 00:35:53 just rational interested, rationally interested actors? And so they'll just mine whatever block them. They'll take the largest fee. Yeah. They want as much as much as much as possible. So they take the highest fee as possible. And the highest fee is going to be paid by NFTs. What's Eric Wall's take on the Bitcoin takes here? So this is a response to how like Bitcoiners are like talking about how Ethereum is quote unquote, you know, censored because of OFAC, even though the that's completely not true. So Eric, Eric is saying Bitcoin Maxi's Rofelcopter at Ethereum validators, censoring O-Fact transactions.

Starting point is 00:36:27 When's the last time you heard the word Rafflecopter? Middle school. Yeah. And now themselves are deliberating ways of censoring Bitcoin NFTs. And so the irony is not lost on Eric Wall nor myself. Okay. Nor me. This is the crater of this protocol.

Starting point is 00:36:43 What's a protocol called again? Ordinals. Ordinals. Okay. This is the crater of ordinals. And what is he saying here? I understand the argument that NFTs are lame and stupid, but I don't understand the argument that NFTs are somehow illegitimate.

Starting point is 00:36:55 Bitcoin has transcended its original creator and purpose. Bitcoin is not for some things and not for other things. Bitcoin just is. Which is just to say that there is no such thing as a legitimate or illegitimate use of Bitcoin Blockspace. If you pay for the block space, it's a legitimate transaction, is my attitude. And that's what Casey is saying as well. How come this guy sounds more Bitcoiner than Adam?

Starting point is 00:37:18 back does right now. I don't know. Because some Bitcoiners have lost the plot. What are these? What's this? This is a, it looks like ether rocks were transposed to the Bitcoin blockchain. Etherox and NFT. So now there's a bunch of Ethereum ether rocks on Bitcoin. Yeah. Is this the Doom that you were talking about? Inscription 466? So this was that I was tinkering around with. I couldn't figure out how to turn, but you can probably play that right. And you can probably play that right now. It's hit W-A-S-D on your keyboard. Yeah, yeah. Yeah, you're playing, you're playing Doom. Shoot those guys. Shoot them. With Spacebar?

Starting point is 00:37:49 I don't know, actually. People are trying to figure out how to control this thing. I've really figured out how to move. I can go forward backward. I'm down. But Ryan is currently playing Doom on Bitcoin right now. Wow. What a magical experience. Who said Bitcoin is useless. Do you know what? Here's what I feel about this debate, though. Like, transaction fees are real down. Oh, I just got shot. Dude, I'm escaping out of this game. Let's go to crypto fees for these guys kill me. Go to Cryptofees. Info. Let's look at the transaction fees.

Starting point is 00:38:18 So Ethereum is selling 4.2 million. You haven't seen Bitcoin this high in such a long time. Bitcoin is selling, this is the average daily fees, 4.2 million for Ethereum. Average daily fees are 328K for Bitcoin. That's really high. I remember time when Bitcoin was way bigger than Ethereum in terms of transaction fees. And I remember people like Nick Carter would actually talk about this and say how good this was for Bitcoin, showed the strength of Bitcoin. Now it's way down.

Starting point is 00:38:45 If you are a Bitcoiner, don't you want to increase Bitcoin block space sales? Because over time, your issuance goes to zero. It's going to go to zero. And then the only way you can actually secure your network is through block space fee sales. So you want these to be as high as possible. Don't you? What am I missing here? Well, so the Bitcoiner philosophy is that this removes the moneyiness of Bitcoin.

Starting point is 00:39:12 So the comparison here is that gold, the value of gold is like 99.99% monetary premium and like 0.001% use in industry, like gold wires, gold teeth, gold plating on stuff like that. And Bitcoin of philosophy is that it's bullish that to have only monetary premium and no utility because you're just a money. And that is that like immaculate conception story. It's all about, you know, premium premium premium. I get that. But in order to do that, you actually have to. make, you actually have to win that narrative battle and make Bitcoin enough money so that the Bitcoin transactions crowd out all of the other use of Bitcoin blocks base.

Starting point is 00:39:56 You have to earn that. You can't just, this is the way we want it. Bitcoin has to earn those blocks, doesn't it? Sure. Yes. So what's happening here is that Bitcoin is actually growing in utility as in, hey, we can use the Bitcoin Blockspace to store data and do things. with those data. Now, fun fact, this is actually the same philosophy as Bitcoin Satoshi's vision,

Starting point is 00:40:18 which is definitely not, I don't claim to understand. The scam project by Craig Wright? Yes, that's right. Yeah. Whether it's definitely not Satoshi's vision, not that I know what Satoshi's vision was, but no one knows what Satoshi's vision was. But the idea of Satoshi's vision is like, they had something like gigabyte size blocks or something, like 256 megabyte size blocks, something crazy. And they would put like, they would just like have a, The weather. Like weather. Like, just log the state of the world.

Starting point is 00:40:46 Like, and they started with weather data. But the idea was that you would just be able to put all the data on Bitcoin, Bitcoin SV. And so this is a little bit on that spectrum, right? Like enough, like four megabytes for NFTs on Bitcoin so that you can host data on Bitcoin and generate block space demand for that. So like, that's kind of what's happening here. And then Bitcoiners are like, no, Bitcoin is for money and money alone.

Starting point is 00:41:10 We should say some Bitcoiners. Some Bitcoin. Some Bitcoin's. Sorry. I don't mean to blanket all Bitcoiners. It's interesting. It's very interesting to see how this kind of evolves over time, David. And in order to facilitate these conversations, because that's what Bankless says.

Starting point is 00:41:25 We like to facilitate conversation. I'm hosting Eric Wall and Casey Rotimer. We're recording tonight. We might be live streaming or, and if we're not live streaming, and then we'll release it later. But the creator of Ordinals plus Eric Wall, who's my Bitcoiner substitute co-host. on bank lists to come in and talk about this. So we're recording that tonight. That show will be out soon.

Starting point is 00:41:46 That will be fascinating. All right. Let's talk about FTX. So FTCS creditor list, it was released, and it includes a whole bunch of star athletes, crypto firms, and state governments. David, who does FTX owe money at this point? What are some of the names? Give us the juicy details.

Starting point is 00:42:06 I think I can do this all in one breath. You ready? Yeah, go. Okay, a list of creditors are Apple. Amazon Web Services, Meta, LinkedIn, Twitter, Netflix, Adobe, Coinbase, Binance Capital Management, Chainalysis, Yuga Labs, Doodles, BlockFi, Silvergate Bank, Wall Street Journal, Coin Desk, Ben Zinga, Tom Brady, David Ortiz from the Red Sox, the Prime Minister of Bahamas, other government officials for other island nations, as well as U.S. State Tax, Consumer Affairs, and Attorney General Offices. That was just the names that we decided to say. There are other names as well. Nice job. You need your breath. This just in as well. A judge rules the identities of two people who helped secure SBF's $250 million bail can be made public.

Starting point is 00:42:49 So outstanding question is, how did SBF get the money for bail? Because I thought his account was down to kind of zero at this point and everything else was frozen. 100,000. He has $100,000. So he says. So he says. But we're about to find out who posted $250 million dollars of bail and probably also where that money came from. But no, we do not know yet.

Starting point is 00:43:10 Who do you think about us? Any guesses? CZ. The least likely person to do it would be CZ. Got to have some friends with a lot of money. I guess somewhere. Who still is, who still is SBF's friend with a lot of money at this point?

Starting point is 00:43:27 I hope it's a Democrat. A lot of the friends. Why do you hope this? Because of peak drama. Okay. David is optimizing for peak drama right now? I'm optimizing for drama right now. Do you know, so like, because he's lost.

Starting point is 00:43:40 his friends, a lot of money, it's hard to imagine any friend who would have this kind of resource. So let's see. Yeah, that's a good point. There's zero people who have to consider themselves as we have friends anymore. I don't know. Maybe he's still got some friends for some reason. There's also some maybe evidence. It's hard to know.

Starting point is 00:43:58 A witness tampering here. This is a tweet from Tier 10K, the account. I should mention, we haven't checked this as a source. So I'm not sure 100%. But this is allegedly an email from. from Sam Bankman-Fried to possibly a witness in the entire FDX case. And this is SBF saying, hey, Blank, I know it's been a while since we've talked, and I know things have ended up in the wrong foot.

Starting point is 00:44:23 I would really love to reconnect and see if there's a way for us to have a constructive relationship, use each other's as resources when possible, or at least vet things with each other. I mean, what do you think is the implication of this type of an email, assuming it's true, David? I mean, it's easier to tell an email when the through line is, hey, I have a request of you. That's basically what this email is. He's saying, let's get our story straight before we go in there. Yeah. Also, can you please help me spin my narrative?

Starting point is 00:44:56 What's interesting is... Apparently, there was multiple emails like this. So that was just, this is just one email. There's other emails. Like here, here's another one. Almost the same copy pasta. So here's a different email to a different person. Hey, Ray.

Starting point is 00:45:06 Hey, Mr. Ray, who is this? Ray, John Ray. I know things haven't gotten off on the right foot, but I do want to be helpful whether on the funds or on anything else. Hopefully, it's just you guys moving the funds. I don't know what that means, but it's not good. As I'm guessing you heard, I'm in New York City for the next day. I'd love to meet up while I'm here, or even if just to say hi. Why does SPF have enough time on his hands to just say hi to people?

Starting point is 00:45:31 In case you're available, I'm free before noon, Eastern, or from roughly four to six tomorrow, Tuesday in the city. Why is he writing all of this? He's in New York. Yo, SBF, come over to my place. You want SBF to come over to your house? Yeah, well, I've got, I've got a studio here in the back. I'll sit right there and SBF will sit right there and we'll do a podcast.

Starting point is 00:45:52 SBF, come on, send me an email. See, send me an email like this. Yeah. Dear Mr. Hoffman, I know the last conversation he had was somewhat contentious. I'm here to make amends. First, I wanted to say, I'm sorry. I'd be happy to swing by your place. Don't do it, David.

Starting point is 00:46:09 Well, you know what? This is what's happening. Of course, some things like that, rumors like that. Maybe these are real emails and correspondences. So a federal judge just barred SBAF from contacting any of these people, any of the people at FDX and any of the people at Alameda via signal. Apparently he was doing this via signal as well. So to try to put a stop to that.

Starting point is 00:46:31 To add on to that, in addition to he is now banned from contacting FDX at Alameda employees, he has also banned from using Signal at all to contact anyone because of the yes. Yes, yeah. He's not allowed to use Signal, yes. Dad says no more Signal. Sorry, SBF. So allegedly he reached out to FTX U.S.'s general counsel, Ryan Miller via Signal. And I'm guessing Ryan Miller went straight to the authorities, which is probably why we know that. Yeah, I think you'd probably want to do that at this point. By the way, David, if you do get DM by SBF, you should probably like, I don't know. Would I get in trouble for not reporting that to the authorities?

Starting point is 00:47:08 If SBF, I'd be on Signal and he was like, let's do a podcast. Do I have to report that to the authorities? What else he said after that sentence, I think. SBF, hit me up, bro. SBF's mother and brother are not cooperating with the financial probe, apparently. It's very weird how his family is tied up into this. And I'm sure we'll see some more unfolding there. As soon as the documentary comes up, produced by Mark Wahlberg.

Starting point is 00:47:33 This is not, this is not, this is not, a rug. This should be your rug like news article. Marky Mark. It is so, that's a difficult ask, Ryan, to make the rug produce the most ridiculous headlines in this space. That is a hard ask. So I've heard there are many different documentaries. So Marky Mark's going to have his work cut out for him if he's going to produce the canonical documentary. This one's about FTX and finance, though. Some sort of rivalry. Wow. How weird is this? Mark Wahlberg making a documentary about FTX, this is a great timeline.

Starting point is 00:48:05 I just wish he starred in it. We deserve, we deserve this. We deserve this. Crypto deserves this? In a good way. Yeah, like we've got through so much pain. We need Marky Mark to, Marky Marks.

Starting point is 00:48:17 He's only producing it, David. I need him to be in it. No, he's not in it. Fine, fine, fine. That's fine. I mean, he would make a great, let me see, Marky Mark, who's he the most like in crypto? He can be,

Starting point is 00:48:29 hmm, there's no one like Marky Mark in crypto. Yeah. Analog? I don't. I'm not very good at it. Brian Armstrong? No.

Starting point is 00:48:37 I can close. Yeah. I don't know. Yeah. I don't know. Anyway, Marky Mark's only producing and he's not acting in it. So that's the news this week. Those are the big news item.

Starting point is 00:48:48 David, what do we got coming up next? Why should people stick around? You should stick around because this is apparently a very giggly episode. Ethereum OFAC compliance. Is it up or down? Place your bets. Also, after that, which communities are willing to self, limit their staking percentage for the sake of the, for the sake of the Ethereum economy.

Starting point is 00:49:07 We also got talks about optimism bedrock, staking withdrawals, test net, immutable X, harmony mismanaging funds and bowling workers. We're going to talk about that. It doesn't look good. The blur in open sea wars, Cardano Stablecoin. We are able to look inside of WorldCoin orb. There's so many reasons to stick around, so don't go anywhere. But first, a moment to talk about some of these fantastic sponsors that make this episode possible.

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Starting point is 00:51:21 Secure, fast, cheap, and friction-free. Let's start this off with some good news. Did you know, David, OFAC compliant blocks are now down? They're less than 60%. that is down from something like 80 to 85% at their peak. First of all, refresh people. What are we talking about when we say OFAC compliant blocks? We're talking the context of Ethereum.

Starting point is 00:51:40 And why is that being down a good thing? Why are we saying that's a good thing? Yeah, so there are certain sets of block relays. There's not that many of them. And some of them have stated, hey, we are an OFAC compliant relayer, as in we will not process any tornado cast transactions in our blocks. And so the percentage of blocks going through these relays is what we're looking at here. and so over time more and more these relayers were processing more and more of the Ethereum blocks being OFAC compliant.

Starting point is 00:52:06 That hit 85% at the peak, I think is what you said. It's worth noting that it only takes one relayer to process non-O-Fat-compliant blocks. So Ethereum doesn't, like your tornado cast transaction if you're outside of the U.S. doesn't get censored unless one-h... It can never really be censored. It can never really be slowed down. Yes, exactly. And so even at 99.9.9% of OFFat-compliant,

Starting point is 00:52:29 you are still able to get your transaction in, you just have to wait longer. Like you said, peaked out at 85%. We are now down to 60% and this number is falling because there are more and more non-OFAC compliant relays coming up and online.

Starting point is 00:52:45 Ultrasound money, the ultrasound website that we love so much, has a relayer. There's agnostic boost, which has a relayer. And this is just going to trend towards zero over time. Not totally towards zero.

Starting point is 00:52:56 It'll never be completely zero. People will want to maintain compliance with their nation state, like shocker. But the fear and fud around this thing was always totally misguided. And like Ryan and I said, like it's, it was going to inevitably fix itself. And we are currently watching that play out. The lowest it's been since October 2022. Why do we care so much about this is because the credible neutrality and censorship resistance of a layer one blockchain matters. Yeah. All right? If it's not OFAC, it's somebody else trying to censure you. And that's a bad thing for a credibly neutral settlement layer for the

Starting point is 00:53:28 world. David, Ethereum news as well. The staking withdrawal test net has just gone live. That means it's coming, right? We said that last week, but still on track. It looks like the upgrade to Ethereum that will enable withdrawals, withdrawals of stake is coming pretty fast. Yeah, users will be able to try out with various withdrawals and deposit features six days after the test net launches when it will be implemented in the Shanghai and Capella test nets. And so users will try to out depositing two validators, get a sense for how the user interface will behave, et cetera, et cetera, et cetera, on track for withdrawals in late March. But that late March timeline is a timeline that is my speculation. That is not any official timeline.

Starting point is 00:54:12 Yeah. I'm sure we'll have a lot of content about what's going to happen to Eith Price around that. Could it go up? Could it go down? We will see. Some news from optimism. Bedrock is to be deployed. What is bedrock? Bedrock is the new optimism main net. And so it is the first application of the OP stack, which I am super bullish on. And so, oh, the optimism's bedrock is their flavor of the OP stack. OPE stack is like this, uh, uniform skeleton for producing any sort of optimism chain. And so optimism bedrock is the proposal to have the optimism layer to upgrade to bedrock is now being put forth to the token house. So this is the optimism dual house governance model. You have the citizens house and the token house. The token house is, of course, the OP

Starting point is 00:54:56 token holders. The citizen house is the whole. holders of a soulbound NFT that makes you a part of the optimism collective. It's basically like non-fundurable governance plus fungible governance. So not just token vote, but also known citizens of the citizen house making proposals and then the OP token house voting and to approve or not approve. So this is, Bedrock is the next crucial upgrade to a modular simplified and performant multi-chain future. And like I said, it is, implements the modular architecture that separates the OPSack into its three components, consensus, execution, and settlement. Yeah, pretty cool.

Starting point is 00:55:34 It turns, the way I think of it very simply is it turns optimism into sort of an app chain ecosystem where anybody can spin up an optimistic roll-up chain. Yes, it sets the foundation for that, yes. This is some interesting culture wars between RPL, the Rockapult Community, and Lido. This is the tweet from Nixo saying, absolutely wild, how different two protocol votes can look. when one community is active, invested in long-term health of the chain, and the other is there for dominance and short-term gains.

Starting point is 00:56:03 That might be a rocket pool-sided tweet there, but what is actually happening? What is the neutral way to interpret what's happened? Some on-chain vote, what were they voting about? Yeah, so Lido voted as to whether or not they should self-limit. And what this means is that if you are above a certain threshold of the percentage of Ethereum stake, that threshold being 33%, you have more powers than you would have if you had less than 33%. So things are more decentralized

Starting point is 00:56:30 if something like Lido were to have 33% of all Ethereum stake. So Lido once upon a time voted, do we self-limit ourselves to preserve the credible neutrality of Ethereum? And 99.8% of

Starting point is 00:56:43 Lido voters said, no, don't self-limit. That was back in June, by the way. This was a long time ago, yes. But what's news is that Rocket Pool just did the vote for the same vote, saying, should Rocket Pool self-limit ourselves,

Starting point is 00:56:57 and not go above that 33% threshold. And 100% of Rocket Pool votes said yes. And so this is just the difference of culture here. And so the Anthony Cizano take is that it shouldn't need to be said, but that Lido is a for-profit company while Rocket Pool is a protocol that attempts to establish credible neutrality. So Culture Wars. Yeah, culture wars.

Starting point is 00:57:21 I mean, both approaches will be tried, certainly. What is the meaningful taskwork? It's also worth noting. And just to check our biases here, Ryan and I, and bankless are part of the ODOW for Rocket Pool. So we do own a supply of Rocket Pool. We do own a supply of RPL. We also stake with Rocket Pool.

Starting point is 00:57:36 So we have exposure to the Rocket Pool side of things. The reason why we do that is because Rocket Pool tends to be more aligned with Ethereum. So Bankless tends to be more aligned with Rocket Pool. I think that's a fair take. Is that a fair take? That's a fair take. But we also have some Lido tokens too, David. And Lido has been a sponsor in the past.

Starting point is 00:57:50 Yeah. I did not know that. The more you know. I did not know that we own Lido tokens. We're bullish staking. Generally bullish taking, yes. A mutable X, they rolled out a passport. This is instant wallet onboarding.

Starting point is 00:58:04 It says the mutable passport is a non-custodial wallet and authentication solution that streamlines user onboarding through passwordless sign-on. Okay, here's a problem. You're trying to onboard a whole bunch of gamers, David. You have to make them create private keys and remember a 12 word seed phrase or 24-word seed phrase.

Starting point is 00:58:22 That's pretty hard for gamers. I just want to play my game. What do you give me? I mean, the words for it. If I lose and they're gone. Well, this is instant onboarding. Takes care of that through Immutable X, and it creates an authentication solution.

Starting point is 00:58:35 I also reminded, you know, of our news last week where Doodles was like, hey, we're moving blockchain. We're moving from Ethereum to Flow. Why? Because we want people to be able to sign in with their Gmail account, just an email account. Flow gives us that out of the box. And also a bunch of money.

Starting point is 00:58:48 Well, maybe. That's the cynical take. Maybe the accurate take. It's also the cynical take. But Immutable X is graduating to that as well. obviously a core requirement to onboard the world is we have to make private key management a lot easier. So that's what they're doing. David, Harmony execs mismanaged funds and bullied workers. X staff claim. That is the headline. What is going on in Harmony? By the way, what is

Starting point is 00:59:11 another layer one, ETH killer from the previous cycle? Harmony is one of those many EVM clones out there that tried to fight for relevancy in the Alt Layer 1 mania. They were at East Denver. they flew in some DJ, some famous DJ for like half a million dollars at Heath Denver. And the DJ, this is a story that I've heard from previous Harmony employees. The DJ was like, you have to buy me a complete DJ set for this one set. And they did. Cool. Anyways, mismanagement of funds, no surprise.

Starting point is 00:59:42 So some quotes from the article. Former contractors accused Harmony co-founders of misconduct and mismanagement. There's one of the founders of Harmony, I don't know how to pronounce this name, TSE. say, say, had this like kind of Adam Newman type cult mentality around him. So he exhibited some particular behavior, which I would consider extremely toxic. Shutting staffers' laptop in the middle of work to command attention. Employees were forced to play over an hour of basketball every single day, despite how busy or productive you're trying to be.

Starting point is 01:00:14 Wait, that's not normal? No. Then there was multiple stories about how, say, TSE, I don't know how to pronounce the name, would grab staff by the arm and move them around like chess pieces at company events, talk behind their backs and belittle them in front of colleagues and associates. And also, quote, would often stand up in front of us and say, I want to cry, make me cry. And he would ask us to tell a story to try and make him cry, which was very weird.

Starting point is 01:00:38 They were hiring full-time employees and paying them as contractors, and the contractors didn't get time off or other benefits. Again, from the article, say, was physically assaulted in Harmony's Paulo Alto office It's by one wallet co-founder. I don't know how to pronounce that name. Sorry. There was a fight. He was physically assaulted?

Starting point is 01:00:56 Man, the amount of documentaries you can make in crypto, you just got to find the right one to do. That's not the end of this. One wallet was a application, I think that was given a bunch of money. Yes, was promised $1 million grants to build a social wallet, say ignored messages from one wallet

Starting point is 01:01:12 about this funding promise. And so promised funding didn't pay them. And then, Yeah, it's pretty bad. There's more. The other story I have, which is a story from a friend of mine, is that they, the employees or contractors of Harmony were paid in the token. And so they were given a token at a certain price to compensate them for their salary as a contractor. So the token was marked at a certain price and then was sent to the contractors a few weeks later.

Starting point is 01:01:43 And over the course of 2022, that token price was down only. And so they were never actually receiving the amount of money that they were given in their contract because they didn't pay them in USC or stable coins. They paid them in the L1 token. The issue that is going that this particular person who used to be a contractor for Harmony is having is that they are now two days before the deadline having to, they were given some like W2, some like IRS statement saying like, okay, here's how much we paid you. you have to pay this much in taxes. But the Harmony incentive is to inflate how much compensation they had so they can write it off for tax benefits, which means that all of their statements, their claimed amount of compensation paid to contractors is overinflated because they're trying to overinflate.

Starting point is 01:02:32 They have to pay tax on the overinflated money. Exactly, right. And they never actually got the money out. And so the story of Harmony is like you have this like cult leader L1 founder and the token price went way too high. They mismanaged money. They paid for DJs. They're throwing their contractors under the bus.

Starting point is 01:02:48 And the reason why I really wanted to pay attention to this is this is some of the stuff that as an industry, we have to make sure does not exist in our industry and we need to self-regulate against it. And it's such a hard task. Let's not be so dumb last cycle. Like last cycle, people were so dumb. I mean, in harmony, even specifically. People are like, why does bankless not have harmony on the podcast? Were you guys Eith maximalists?

Starting point is 01:03:07 Why do you cover other L1 ecosystems? I'm like, we don't have to cover every L1 ecosystem. I don't know anything about this. The way it's presenting is, it seems a little strange, seems a little anti-crypto values. Now you find out all of this. This is why we're not like bringing everybody on bankless and advocating for their projects. There's a lot of toxicity here. What a poorly named project, though, Harmony?

Starting point is 01:03:33 Like everything you described is a little bit of the opposite of Harmony, I'd say. And yeah, it's a shame. Yeah, big cringe. So like the idea is like Harmony is like Harmony is trying to get. compliant with the U.S. government because they know the eye is on them. Meanwhile, they're just throwing all of their previous workers under the bus in order to do so. Harmony, be better. I'm just happy to kind of move on and leave projects like that, founders like that in the dustbin of history here. NFT stuff, though, there is a war going on. Did you know, David, between Blur versus

Starting point is 01:04:03 OpenC. Tell us about it. This is a tweet from Panda Jackson giving us the TLDR. What is it? Yeah, so this is a really good tweet thread. So I'm going to try and speed run this, but I'm going to read the whole thing. OpenC and Blur are the top two NFT marketplaces. Three months ago, OpenC defended against Blur by requiring new collections to block Blur in order to get enforced royalties. This was not necessarily like, hey, don't use our competitor. This is OpenC's enforcing royalty philosophy, and Blur does not enforce royalties. And so these are intact. Royalties for the creators. I mean basically, I'm a creator. I have an NFT. Every time that gets sold, there's a 5% royalty. I get that money. And OpenC.'s, like.

Starting point is 01:04:42 But we want to enforce that for the creators, right? At the smart contract level. Yes, got it. At the smart contract level. And so OpenC trying to enforce that at the smart contract level is asynchronous with what Blur is trying to do, which is trying to have the best NFT trading experience for the lowest prices, which means they don't enforce royalties. Blur tried to get itself removed from OpenC's block list, but it failed three days ago from this tweet thread, which was two days ago. So five days ago, six days ago since the time of listening, sorry.

Starting point is 01:05:09 Blur took a free ride on OpenCC port protocol to bypass OpenC's block list. I'll explain what that means. So now all collections are now accessible for trading on Blur. And so the idea is that like NFT collections would have to pick one or the other, OpenC or Blur. Do you want to incentivize trading? And then you go to Blur. Do you want to incentivize and enforce royalties? You go to OpenC.

Starting point is 01:05:34 Blur found this clever way to embed itself into OpenC and open up the doors once again. collections can go back to Blur. So in November of 2022, OpenC implemented a new policy. Collections seeking enforce royalties must block marketplaces that don't fully honor them. Since Blur didn't honor royalties, they are on the block list. After Blur's launch in 10 of 2022, October, it was on the rise and even surpass OpenC's daily volume for some time, becoming a threat to OpenC's dominance. OpenC's new policy effectively created a defense line to defend its dominant position from

Starting point is 01:06:07 emerging competitors like Blur. In the short term, OpenC's defense line has been proven effective as new collections like Leuka's sewer pass chose to align with OpenC and they blocked Blur. Blur responded by promising to enforce royalties for new collections and then they made a request claiming that Blur met OpenC's criteria so that they'd be removed from the block list. OpenC, however, replied that his policy required enforcing royalties for all collections, not just new collections. As a result, Blur could not defeat its defenses and still existed on OpenC's block list.

Starting point is 01:06:36 So Blur finds a loophole by leveraging OpenC's C port to create a new exchange system. As C port, which is a product out of OpenC as a smart contract, is not on OpenC's block list. It makes sense. Collections blocking Blur become tradable on it through the new system and with Enforced royalties. As a result, Blur now has two systems to execute two different kinds of trades on this marketplace. The old one continues to handle collections that do not block it. While the new one manages to manage its collections previously blocked, user experience is smooth as Blur chooses the system automatically. So basically, Blur has two systems, one that is OpenC compliant,

Starting point is 01:07:11 and the OpenC-uncompliant one uses the Seaport smart contracts, which makes it OpenC compliant. So, like, Blur basically snuck into OpenC and can still do, like, no royalty trading. Why does any of this matter, David? I think the answer to that is really just summed up by Legion's tweet here. She says, it looks like we're converging on zero creator royalties. This likely leads to higher initial mint prices and more frequent mints. creators reserve or withhold more of their collections to capture ongoing value, and they also

Starting point is 01:07:39 incentivize carrots to incentivize optional royalties with more perks slash utilities. This is really about the conversation of can we enforce royalties and does the market want that? Yeah, I think it's really interesting, right? Because there's an element where I could see some creators wanting royalties, right? It's almost like, it's almost like copyright in the kind of the nation state world. If you're an author, maybe you want copyright laws to protect your work so you can make the most money out of it. There's an element I could see creators would want to enforce that royalty, but assets, liquidity, markets want to be free, don't they? And so if they can bypass royalties, they absolutely will. And so that's why Legion is saying, well, when you have blur,

Starting point is 01:08:22 fighting against open sea, the one that bypasses the royalties ultimately going to win, because these royalties are not really enforced deeply at the protocol level. And so they can be, they can be bypassed, which is interesting. And that just means the market will respond differently. Creators will be like, okay, I'm not getting royalties. So what am I going to do? Maybe I mint a collection, but I reserve a bunch of that for my treasury because I know I'm not getting royalties in the future.

Starting point is 01:08:48 Maybe I do smaller, more frequent mints. That's sort of the creator response to this. But in general, I'm not concerned about this. I just think the market will figure it out. And these are good things to have be figured out in the market. Cardano has a brand new stable coin over collateralized stable coin called D-JD-JED, D-JED, D-JED, pegged to US dollar backed by ADA with Shen as its reserve coin. Congrats Cardano, you've made it to 2018 Ethereum.

Starting point is 01:09:20 Sorry. Moving on, WorldCoin is opening up the hardware powering the orb. So if you want to take a peek under the or under the hood of the orb, you can see how the orb works. this is something that has been kept secret, the secret sauce behind how WorldCoin works, which is why I've never stuck my eyeball in there. You stick your eye socket in this and they give you coins. Are you going to do it? Yes. Absolutely not. No. That is way too dystopian. Yeah. You would never do this. Real world identity? I don't even care if like, I'll just put my bias on the table here. I don't even care if they come out on the table and be like, yo, we don't collect any data. We don't use your data. Here's we can prove

Starting point is 01:10:01 that to you. Don't make sci-fi dystopian toys. Don't do that. This image alone, right? Just stick your eye in here. I don't know. That's going to be an uphill battle, I think, for them. People don't even like to go to the optometrist. You ever been an optometrist, David? It's been on behalf of all the

Starting point is 01:10:16 glasses wears. You know that thing that where they test your eye pressure makes you like a burst of air into your eye? I don't know that. I hate that thing. I bet that sounds like something you should hate. You have to hold your eye open. and you don't know what it's coming, and then just like a burst of air right in your eye.

Starting point is 01:10:34 That's what this reminds me. Sorry, WorldCoyne. Maybe it's way better that we're saying. Who knows? I'm sorry, you made a dystopian-looking orb thing that I'm supposed to stick my eye into. That's your guys' problem.

Starting point is 01:10:48 Wow, Dave's not even willing to embrace the tech. It's hard to go mainstream that way. All right. Celsius just listed the names of people eligible to withdraw. What did we learn here? Celsius has published the names of users who are allowed to withdraw 94% of their assets locked on the platform. Ryan, have you tried to get your money back?

Starting point is 01:11:06 No, they haven't contacted me. Where do I go? I don't know, dude. It's only users under a certain criteria. Transfers had to be less than some amount, $7,500. What else? And only specific, I don't know, some subset were able to get some money out. Let us know.

Starting point is 01:11:24 Congrats. Hey, 94% recovery. If that is what it is, that's great. For 10 dudes got this, David. probably it. Who knows? I'm not very happy about, like, I'm sure Celsius users are not happy about what's going on in Celsius for sure. The money ain't there is the big problem. This is something I saw, which was interesting, but I didn't get a chance to dive in, maybe no more. Elon Musk wants Twitter's payment system to be built with crypto in mind. Yeah, so he is alleged to wanting to make

Starting point is 01:11:52 Twitter into an everything app. Sounds like the China app, like the WeChat, and includes having money in there. Not necessarily crypto, but not not crypto, and that's the news. What else do you use besides crypto? Use a stable coin or something. Everything else is so hard to... You can do like Venmo stuff. You can do like Nation State Payment Rails. I know, but that's all connecting into like the banking system and like, you know, plaids. He's not a crypto person, right? He's Elon Musk. Come on, Elon. I don't understand why it doesn't get on board. David, what do we got here? Amazon, NFT initiative coming soon. The exclusive from Blockworks, what do they, What is Amazon doing with the NFTs?

Starting point is 01:12:29 No one knows. They just said that they're doing an NFT initiative. It's coming in the spring. That's the news. Really exciting. We'll see what that is. David, what have we got coming up next?

Starting point is 01:12:40 Incoming is questions from the nation. If we have privacy and crypto, will the bad guys be able to get away with it? And also open NFT mints. Are they an open thing? And then also, Ryan is going to talk to us exactly what Max Payne is. It has to do with taxes.

Starting point is 01:12:55 So stay tuned for all of that. and more, but first a moment to talk about these fantastic sponsors that make the show possible. The Phantom wallet is coming to Ethereum. The number one wallet on Solana is bringing its millions of users and beloved UX to Ethereum and Polygon. If you haven't used Phantom before, you've been missing out. Phantom was one of the first wallets to pioneer Solana staking inside the wallet, and will be offering similar staking features for Ethereum and Polygon. But that's just staking.

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Starting point is 01:13:41 Phantom has already saved over 20,000 users from getting scammed or hacked. So, get on the Phantom waitlist and be one of the first to access the multi-chain beta. There's a link in the show notes, or you can go to phantom.com slash waitlist to get access in late February. Hey, Bankless Nation. If you're listening to this, it's because you're on the free Bankless RSS feed. Did you know that there's an ad-free version of Bankless that comes with the Bankless Premium subscription? No ads, just straight to the content. But that's just one of many things that a premium subscription gets you.

Starting point is 01:14:11 There's also the token report, a monthly, bullish, bearish, neutral report on the hottest tokens of the month. And the regular updates from the token report go into the token Bible. Your first stop shop for every token worth investigating in crypto. Bankless Premium also gets you. a 30% discount to the Permission List Conference, which means it basically just pays for itself. There's also the Airdrop Guide to make sure you don't miss a drop in 2023.

Starting point is 01:14:34 But really, the best part about Bankless Premium is hanging out with me, Ryan, and the rest of the Bankless team in the Inner Circle Discord only for Premium members. Want the Alpha? Check out Ben the Analyst's Digen Pit, where you can ask him questions

Starting point is 01:14:47 about the token report. Got a question? I've got my own Q&A room for any questions that you might have. At Bankless, we have huge things planned for 2023, including a new website with login with your Ethereum address capabilities, and we're super excited to ship what we are calling Bankless 2.0 soon TM.

Starting point is 01:15:03 So if you want extra help exploring the frontier, subscribe to Bankless Premium. It's under 50 cents a day and provides a wealth of knowledge and support on your journey West. I'll see you in the Discord. Guys, we're back with the questions from the nation. This is a question from Abraham CR. They say, I listen to the news on the Wormhole Hacker activity during last week's roll-up.

Starting point is 01:15:23 What will happen when we have fully deployed ZK. rollups, where we lose track of how the hackers behaving? Do you have an hourglass to catch these people before ZK check? ZK is fully implemented. So what happens, David, when we get privacy on chain? Do the hackers just get away with everything? Is that a bad outcome or a good outcome? First, I want to make sure that we're not mixing up something.

Starting point is 01:15:42 ZK rollups are not private by default. Necessarily, yes. Necessarily. They can be. Aztec is a ZKZK rollup, and ASSEC is private, but anything like the Polygon or ZK Sync or any other ZK roll-up isn't necessarily, it's not privacy technology, but you can do privacy technology on a ZK roll-up. So I just want to make sure that is true. AsTech is really the only one that we're aware of that is farthest beyond that is privacy on a ZK roll-up. Yeah. You know how actually

Starting point is 01:16:12 this tornado cash smart contract on the Ethereum layer one is banned by OFAC, but can't you just deploy tornado cash on a layer two and then use that because it's a different contract address? I don't know. I don't know what happens if you do that. It's going to happen. I don't know. Did you? I don't know. What's legal in this country?

Starting point is 01:16:30 I don't know. I think the in spirit of this question is in the future, we're probably going to have a bunch of privacy tools, correct? And the answer to that is 100%. Yeah. If that is the case, will we just lose track of the hackers? The answer to that is probably, but it's also going to be a cat and mouse game.

Starting point is 01:16:52 It's going to be just like an arms race like everything else. so privacy tools will get better and then tracing tools will get better. And then privacy tools will get better and tracing tools will get better. I will say that cryptography always tilts power to the hands of the individual. And so I would say individuals over institutions have the advantage here. But that does not mean that institutions can't brute force this and figure out where that stolen money went. They can figure it out. Honestly, I'm fine with an internal cat and mouse game.

Starting point is 01:17:22 I feel like that balance of power where a little bit individual side, a little bit the state, and they come back and forth, back and forth. I mean, a lot of things about crypto and blockchain make things more easily traceable. A lot of things about the internet make things more easily traceable. But if you remove crypto and you've removed privacy on chain, right, then oh my God, it is complete surveillance. The individual has no protection against this. And then it's just like there is, I mean, there's, there is no mouse. just cats, kind of controlling everything, right? And so I sort of like the back and forth of

Starting point is 01:17:57 the surveillance tools get smarter, crypto gets a little better, invent solutions. Like, I think that's important for a society like this. And let's also remind folks listening to this is think about cash. We've had the existence of cash money, which is not digitally traceable for hundreds of years. And before that, we had other non-traceable analog forms of money for thousands of years. The world didn't end. It was okay. Like, we're all fine. I mean, of course, there was some illicit activity, but authorities found ways to go find with that illicit activity was in real life and bust the bad guys. That'll be the same. What we're talking about in the absence of on-chain privacy solutions is a complete surveillance of every single transaction that every person in the

Starting point is 01:18:45 world ever does. That does not feel like a good balance of power. That feels very scary to me. So this is why bankless, we are advocates of on-chain privacy, even acknowledging that there is some trade-off there and some bad guys make it away with some things some of the time. And we know that nation states are going to make it harder for individuals to access privacy, but as an industry, we will fight back about this. And eventually, I have very strong confidence that individuals will be able to fully access total and complete privacy tools, because that is our constitutional, right? We just have to have this phase of time where we fight, where we fight them. Yeah, let's fight for the social norms. I mean, like, imagine if the

Starting point is 01:19:28 nation state said all communication should be unencrypted. Right. Let's ban signal. Sorry. We need a copy via our prison database of all electronic communication that all of our, why, to make sure we don't have domestic terrorism, right? Or international terrorism, right? I mean, I'm not an advocate for that. And what does it mean? It means that some bad people will communicate bad things and organize using these communication technology. But yeah, that's just the tradeoff that we have to live with if we're going to have a free society. It's my take on it anyway.

Starting point is 01:19:59 Here's a second question from ZeroX Redden. Hey guys, curious to get your thoughts around the open edition meta that is happening in the NFT space. Feels like creators are moving away from the traditional NFT, 721s and 1155s. Do you feel like open additions make NFTs more accessible to the mainstream? What's your take on this? What's an open edition, David? Yeah, an Open Edition is an NFT mint that doesn't have a cap.

Starting point is 01:20:23 So anyone can come and mint it. Sometimes they close it in time. So like you have 24 hours to mint this, but there's no like supply cap. There's in the world of NFTE Twitter right now, people are talking about like, do they like open mints? And I've heard a lot of collectors say they don't really like open mints. It kind of like takes the magic out of it. But I think creators do like open mints. Why that is true, I think is, uh, is, uh, is, uh, is, uh, is,

Starting point is 01:20:49 is interesting to unpack. The question, do you think open editions will make NFTs more accessible to mainstream? I don't really think that's the secret sauce. I think there are reasons to do open mince. I think there are reasons to do closed mints. I think we will ultimately settle on whatever the market will figure this out. And it's kind of up to the creator, right? Because they're the one who gets to do this choice.

Starting point is 01:21:10 And they're probably going to pick the one, the mechanism of NFT minting that puts the most amount of money into their pockets. Yeah, it's just a new experiment to try, right? So this is a NFT, I believe this is a producer and an artist on the music side of things who tried an open mint experiment. And this is a threat I ran across David, you know, I was thinking of when I read this question. He did a open mint for an open edition drop of some music, I believe. He said with just under two hours left and 200 editions sold, here are a few of his takeaways. His takeaway was, the pace of an open edition felt overall healthier. He had his OG collectors waiting.

Starting point is 01:21:49 the doors eager to collect, but he was surprised with the trickle effect he got through the rest of the day. He sold close to 75 additional NFTs after the first hour. He said it was way less stress for the collector because as a collector, you can take the time to buy the NFT. You don't have to go to the store being bummed that everything is on back order. And he said there was less pressure on the artist as well. He said the price and quantity dynamic goes out of the window, making the decision for the artist's way easier. So there were some benefits. And he summarizes the this thread in his experience saying open editions aren't necessarily the end-all be-all model, but the overall steps forward for both the artist and collector feel like a net positive for most

Starting point is 01:22:28 cases. So this particular artist liked the experiment will probably try it again. And that's what's going to happen. There's a lot of experimentation around open editions. And that's kind of bullish, kind of healthy. I think that's a good perspective. You and I both missed the Chris, Chris Berniske bankless mint because it was closed. Our podcast mint. Our podcast mint. The bankless NFT. podcast collectible and we were recording another podcast, which bummed me out because I really wanted to collect that one. If it had been an open mint, I wouldn't have felt, I wouldn't have felt rushed. All of the bankless NFT collectibles have sold out inside of five blocks. So if you are not there ready to mint, then you're probably not going to get it. And then it's also like kind of a problem for

Starting point is 01:23:09 collectors on the other side of the world. So sorry people in Asia who want to collect the bankless podcast. We do it in Eastern Times. Perhaps an open mint fixes this. Yeah, maybe. and maybe it's something we try in the future. David, let's get some takes of the week. McDonald's saying, we're all going to make it? Oh, no. Why, you know. This is Binance.

Starting point is 01:23:31 God, I hate it when corporate Twitter accounts talk to each other. I don't know why McDonald's tweeted this, but in January 26th, they tweeted out, what did I miss? I don't really know the context behind that tweet. Binance, the Twitter account behind Binance responds, a lot of green candles. And then McDonald's response to Biden, finance saying, wagamy, we're all going to make it. I was like, oh, come on, guys. That's cringe. That's cringe for the good. Yeah, especially when markets are pumping. They're going to cost

Starting point is 01:24:00 the top. Well, that's, that's your take. All right. All right, guys, Ryan's talking about taxes. All right. You ready for this? Tax time. Do you what? I got, so people know I had some fun stuck in Gemini earn account. Lots of fun. They sent me this email. And it says, we are writing to inform me that Gemini has requested a 30-day extension from the IRS to provide forms 1099 MSK, MISC to Gemini Exchange account holders to the tax year 2022. I was like, oh, what is that? Oh, it turns out, of course, because of taxes, the interest you earn in Gemini Earn is all taxable at the time you receive that interest, okay? So it's taxable. You receive income. So if you receive $100 in the month of May last year in your Gemini Earn account,

Starting point is 01:24:47 then you owe the taxes on the $100 that you receive, right? This is how most accountants would kind of interpret these tax rules. Well, the pain of all of this, David, is you're a Gemini-earned customer. You lost all of your money, probably Gemini-I-earned. Maybe you get some of it back later. Who knows when? Perhaps years. For all intents and purposes, you lost it all.

Starting point is 01:25:05 Guess what, David? You still have to pay IRS taxes on your interest. That, to me, is the definition of max pain. It's this WoJack right here, tears crying, coming out and like, And this applies for Celsius or BlockFi, Gemini Earn, any of the C5 lenders. You can't, you can't, you have to pay taxes on money that was stolen from you. And that to me is like peak pain. And I don't know.

Starting point is 01:25:34 It's back to like, if you don't laugh about it, you're going to cry. Or maybe do a bit of both. But that is my definition of max pain, my friends. See, this is why I have to get other somebody else to do my taxes because I would be like, oh, I'm not paying that. I didn't actually receive any of the money. Oh, because you're going by rules of fairness. Yeah, common sense.

Starting point is 01:25:52 Oh, rules of fairness and common sense. Sorry, that's not what the IRS does. They have their own set of rules. Because the IRS doesn't go by rules and common sense, I have to pay someone an accountant to care on my behalf or else I'll go to jail because I know I won't do it right. Yeah, this is, this is, anyway, that's, I'm sorry for anyone listening who's in that position. I'm somewhat in that position to you.

Starting point is 01:26:14 And it kind of sucks. It's Max Payne, my friend. Okay, this is the favorite tweet I saw of the week. This was not added to the agenda by Ryan. This was added to the agenda by me. But this was Ryan's tweet. So congrats Ryan, favorite tweet of the week. Ryan Sean Adams tweets out,

Starting point is 01:26:27 money and government will exist in greater purity the less they are mixed together. I got shivers when I read this one. You like this? Oh, I loved it so much, yeah. What if I told you this was a stolen tweet? No. Yes.

Starting point is 01:26:41 This is a stolen tweet. I was supposed to comments like, man, this is not very AI of you, but it is pretty AI of you to steal it from someone. This is a James Madison quote. Who's that? Okay. Framer the Constitution. Founding father, James Madison, way back in the 1700s. You know, like one of the originators of the Constitution, you know, Madison, Jefferson,

Starting point is 01:27:00 did it say church in government will exist in great? Is that where he from? Wow. He said, his quote was, church in government will exist in greater purity the less they are mixed together. And I just subbed that out for money because I think the same is true. I was going to say, like this is uncharacteristically human of you, but then you gave me that expression.

Starting point is 01:27:17 I said, no, that's the most AI thing I can think of. It's such a good take, though. It's such a good take. The thing about like the framers, the Constitution is money was already separated from state at the time they wrote this. Their big thing was trying to get religion separated from state, which turned out to be a really good idea and a very strong protocol design for a democracy, for a republic governed by the people. Well, now we've got money injected into the state. And I bet if some of the framers were around today,

Starting point is 01:27:49 people who really think about power dynamics and government, they would be advocates for this position too. It's like, we'll have money and government in greater purity if we don't mix them together as much, if we can separate them. And that is definitely the take of crypto. But like money in politics, isn't that such a terrible combination? Money in state, isn't that such a corrupting, force. It's just like these things should be separated, shouldn't they? And yeah, that's why I'm

Starting point is 01:28:18 bullish crypto, David. Yeah. For any bankless listener that wants some light weekend reading, read the article A Most Peaceful Revolution by Nick Carter. And all talks about when, and this also fits with the sovereign individual thesis is like crypto is going to unbundle money from the state and it's going to force the state to be market competitive with the services that they provide. When they can no longer issue money and print money out of thin air, they have to be market competitive with social, the safety net, infrastructure, stuff like this. And so it takes away the privilege of them being able to just print money to pay for their mistakes and forces them into being at the whim of the market. The market makes them good, which I think that when the market, when you don't have to adhere to

Starting point is 01:29:06 the rules of the market, you become corrupt and stagnant and you rest on your laurels. You know, you're making me want to have Rowan Gray back on the podcast and argue with him a little bit about this. Bring on a statist, yeah. Yeah, well, he would take the exact opposite position. He'd be like, no, shit brain. He'd probably say that too. It's actually, it's like having money tied into the state actually makes money accountable in a democracy to the people. That's the way you should actually do things.

Starting point is 01:29:34 Get your capitalist ideas out of here. Get your free market kind of ideas out of here. You know, I actually don't really think Rowan Gray and us, like, disagree. We just have a roundabout way of coming to the same conclusion, but we're like... I think the one thing we disagree on, he's way too optimistic on, like, the incorruptible power of the nation state. And I'm like in, like, I think we are much... Anyway, that's a good debate. If you want to go back in the bankless archives, look up Rowan Gray and bankless.

Starting point is 01:30:00 David, here's another take. What's this? This is from Lido. And just because this is so aligned with what we say, Lido's doing the all caps, lower caps, caps, caps, lower caps, like making a farce of a statement. And he's saying, I don't understand the tokenomics of layer two tokens. And he continues, mate, they have better business models than Alt Layer 1s like Solana. The business model is easy. They sell Blockspace on Layer 2 and they buy blocks space on layer 1 and pocket some nice spreads on the difference while still offering end users 10 times cheaper transactions.

Starting point is 01:30:29 I thought that was a great way of summarizing the Layer 2 business model. They buy Block space on the layer 1. They sell Block space on the layer 2. And with compression technology, they can pocket a difference. Yep. They are value-added resellers in the supply chain of block space. Layer 2 is value-added resales. The last take of the week, who wrote this, who wrote this report? Fortune.

Starting point is 01:30:51 Oh, this is, let's see, this is from the financial news of London. Financial News of London. Meet the 20 most influential people in crypto. I'd love to. Who are they? Who are these people? I have no clue. These are also like stock image headshots of people I have no clue who they are.

Starting point is 01:31:12 These are real people right here. These are some LinkedIn ass photos, Diana Biggs, Ombray. I've never seen any of these people around crypto. But they are the 20 most influential people in crypto. But they are the movers and shakers in the digital asset sector. They've never even heard it. They haven't been on bankless. We should get them on.

Starting point is 01:31:31 I think we've been missing a whole lot of community out there. How can they all have these same uniform headshots? These are all fed plants, bro. I don't know. I'm excited to you. I don't know what this full list includes, but this is a joke around crypto Twitter about the 20 most influential people in crypto that no one's ever heard of. These people were on crypto Twitter. We would eat them alive. Really? Yeah. Anyone with that kind of like curated headshot? Get the hell out of. Don't judge a book by its cover. What do you have against curated headshots? You ever seen my Twitter profile picture? Let me show you this. Yours is okay because it's kind of meta because yours is You getting a picture of that the lighting

Starting point is 01:32:07 Yeah this is you put your MFer as a profile picture for a while and then you took it away and I'm most disappointed You're mad about that this is why a bitboy called me a suit is because of this photo You know what? He was right He's right Bitboy had a point He has glasses dude What do you bullish on David? I'm speaking of MFers I'm a bullish on MFers I'm a bullish on MFers I'm a bullish on MF

Starting point is 01:32:31 MFers. And so this was a bracelet that I'm now wearing. I'll put it up on the screen. It's kind of hidden behind my watch. But it's my MFer bracelet. I was looking for a nice bracelet. So now I've got this MFer bracelet. Where'd you get that? So an MFer made it for me. So this is me, an MFer, buying MFer swag from a MFer who made it for me. So you can go link, there's a link to this in the show notes. This is a like an online store from Idanco. So if you're an MFer, You can buy an MFER bracelet. You can also upload your specific MFer, and he'll make you a silver MFER figurine that is your MFER

Starting point is 01:33:08 and you can get a nice little bracelet. Right. And so, like, we had that take a while ago that the Nike swish of Web 3 will be a decentralized like meme. And so this is an MFer who's made a business side hustle making MFER swag for MFers who want to wear MFR stuff. And this is how this meme propagates.

Starting point is 01:33:26 And the cool thing is like this isn't owned by MFR Inc. This is just a little side hustle. brand to headless brand yeah and I think I think it's super cool also can you go back to the picture of my watch yeah can you zoom in on that I don't know I don't have the power to can you read it oh it is this Hoffman on your watch yeah dude Hoffman watch wait is this a brand name yeah is it I saw it on an Instagram and it's like Hoffman watches I'm like wait my name's Hoffman and it was a hundred dollars and so there can only be one David Hoffman in every every industry so this is the watch your boy wears a Hoffman watch

Starting point is 01:34:01 Yeah, greatest Instagram purchase of all time. Yeah, no, that's, I'm really happy for your watch. And see this, guys, so you know, just so you know, whoever you are, the financial news, this is the wrist of a real crypto influencer right here. Sporting Hoffman Watch, Sporting and MFers, yeah. That's how you know. That's how you know you're dealing with the influential crypto person. Yeah.

Starting point is 01:34:24 So that's what I'm bullish on, MFERS and I guess my last name. Also, I'm going to StarCware sessions tomorrow. So I'm also bullish on stockware sessions. So shout out to all the people who are going out there. Cool. I'm glad you gave that a trip, man. Yeah, me too. Going to learn as much as possible.

Starting point is 01:34:39 I'm going to like literally I have like eight interviews lined up. I'm going to bring them all back for the bankless nation. I'm going to turn them into content because that's what we do. Yeah. So I guess I'm also bullish on content out there as well. So I got three things. Ryan, what are you bullish on? I'm going to say it this week, Bitcoin Blockspace, David.

Starting point is 01:34:56 Unironically. I'm going to say that. Look, honestly, I mean, you're selling block space, more use cases. Some of these NFTs on Bitcoin could actually be something. What else could you put in these blobs? I mean, you're not doing DFI, but you can store some interesting things in it. You mentioned going to the Starkware conference. That is actually something that Starkware wants to do, is it wants to bring layer 2's

Starting point is 01:35:21 Starkware tech to Bitcoin. You still have this look of shock. But like, maybe you should be bullish on Bitcoin Blockspace. I'm more bullish on Bitcoin block space than I was previously. I will tell you that. That's it, man. I'll just leave it right there. And that takes us to the meme of the week this week. What are we looking at, David? So this is utility in an airplane just chasing down Peter Griffin from family guy. Utility in the airplane, like, you know, bim, me, me, trying to gun down Bitcoin and Bitcoin being Peter Griffin. Utilities coming from Bitcoin and Bitcoin just wants running away from it. Running away from utility. Yeah.

Starting point is 01:35:56 Yeah, it's block. So that's the negative take. is the positive take, which is you have the cringe crying guy, and the cringe crying guy is ETH, Ethereum, the cringe crying guy is like, we have a roadmap. And then you have like the Vitalik roadmap piece. And then there's the Bitcoin Chad. And Bitcoin says, looks like we've accidentally fixed the security budget. That's a great take on it. I'm getting a kick out of this whole debate is Bitcoin blocks based sales going up and people mad about it. I don't know. It seems like it's helping to me. My favorite thing about it is that like Bitcoin's a permissionless protocol. Now you can put NFTs on Bitcoin. It's just going to play out like the way that

Starting point is 01:36:36 organic nature is going to allow it to play out. And we're just going to watch it every step of the way. There you go. And I'm going to be busy, busy playing a doom on the TTI-83 while everyone watches. Risk and disclaimers, guys, we've got to tell you, none of this has been financial advice. We don't know the use cases of Bitcoin block space in the future, but we hope to find out soon. Crypto is risky. You could lose what you put in, but we're 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: Bitcoin NFTs | Canto | FOMC Interest Rates | Blur OpenSea Royalties

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