Bankless - ROLLUP: Bull Market? | Inflation Cools, War Heats | Robinhood Flips Base | ETH’s Fee Problem

Episode Date: July 17, 2026

Inflation cooled, war intensified, and crypto climbed anyway. Ryan and David ask if the bottom is in, unpack Robinhood Chain’s surge past Base, and debate who benefits from Ethereum’s L2 boom. --- 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24 https://bankless.cc/spotify-premium --- BANKLESS SPONSOR TOOLS: 📊BITGET | TOKENIZED STOCKS 2.0 https://bankless.cc/bitget-stocks  🧭OKX | TRADE, EARN, PAY to OKX | 120M+ USERS WORLDWIDE https://app.okx.com/join/USBANKLESS  🎯THE DEFI REPORT | ONCHAIN INSIGHTS https://thedefireport.io/bankless  👑BANKLESS PREMIUM | AD-FREE & BONUS EPISODES https://bankless.cc/spotify-premium --- TIMESTAMPS 0:00 Intro 0:29 Cycle Bottom Watch https://x.com/TrustlessState/status/2077774313726304659 https://x.com/goodalexander/status/2077031311664197738 https://x.com/brian_armstrong/status/2076857638059720736 5:24 Inflation Cools, War Heats https://x.com/kobeissiletter/status/2077008212994253025 https://x.com/geiger_capital/status/2077011477580451983 14:56 Crypto Outperforms Stocks https://x.com/saylor/status/2076638696053276748 https://x.com/TrustlessState/status/2076647130572235017 https://x.com/TrustlessState/status/2077197119207756098 22:34 Robinhood Chain Breaks Out https://x.com/donnoh_eth/status/2075890751834071189 https://dune.com/entropy_advisors/robinhood-chain-network-overview https://www.coindesk.com/business/2026/07/15/the-launchpad-that-fueled-robinhood-chain-s-memecoin-boom-just-gave-away-all-its-revenue https://dune.com/adam_tehc/the-robinhood-trenches 29:31 Base Pivots to Trading https://x.com/jessepollak/status/2077427261586997745 https://x.com/jessepollak/status/2077550728416256489 https://x.com/austincampbell/status/2077545305789067398 36:15 Does ETH Earn Enough? https://x.com/vladtenev/status/2076666114801877310 https://x.com/LorenzoARK/status/2076792007184298076 https://x.com/apolynya/status/2077301418860466487 https://x.com/TrustlessState/status/2077400104458154428 https://x.com/ethereumJoseph/status/2076838398510211122 47:29 L2s and Rent Sharing https://x.com/sgoldfed/status/2077082053330272454 https://x.com/l2beat/status/2077764769436553272 https://l2beat.com/native-rollups 56:20 Ethereum Spinoffs Multiply https://x.com/eth_systems/status/2077000602320805918 https://x.com/fradamt/status/2077739531520921621 58:49 DeFi Hacks May Be Peaking https://x.com/hosseeb/status/2076682247168827849 https://x.com/maraoz/status/2059413451265441990 1:01:44 Buy-and-Burn Wins https://x.com/TrustlessState/status/2077186630566224208 https://x.com/blknoiz06/status/2077773554033037509 1:06:29 Closing & Disclaimers --- Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures

Bankless Nation is the third week of July. And for the third week in a row, me and Ryan go over the question. Have we bottomed yet? We got some extra data to talk about inflation is coming in cold, but the Iran War is coming in hot. And also we've got some drama over in the Robin Hood base Ethereum complex ecosystem. I think that's the big news of the week is that Robin Hood chain has passed base in activity. And as a result of that, things are just changing. Time's changing.

It's a new bull market, so it's time for some changes. Yeah. Well, I don't know if I'm ready to call a bull market, David, but there are some changes that I feel are downstream of Robin Hood chain. One, it might be actually, and this is somewhat bullish for Heath Maxis listening right now, is some movement, positive movement for Eith on the ratio. There's a question of whether that is Robin Hood chain induced? Maybe.

Well, we'll explore in today's episode. How about that? There's also Jesse from Base. founder of base, saying all first quarter, he's had to eat shit. Creator of base, I think is his preferred title. Okay, creator of base has been eating shit. Those are his words.

Not mine. Talk about what he means, but this is a base pivot. We'll talk about that. And also, there's a new resurging question again in the Ethereum ecosystem, which is, are the L2s paying enough rent to ETH holders? Wait, I've never heard of this question before. Have we ever talked about this before?

It's kind of like the perennial question of have we bottomed yet. We're going to talk about that today. There's new stuff to talk about that. There's new stuff to talk. Yeah, including Plenia is back. Do you remember Plenia? Plenia, yeah. The famous L2 Bull back, they are back.

Mythological creature in Ethereum lore. Yeah, with a hot take. So we'll talk about all that and more. But why don't we start by looking at this chart? When you look at this chart, Ryan, what do you feel? What do you feel? How does this chart make this chart make you feel? For the listeners,

we are looking at the four bull markets of old in Bitcoin, 2014, 2018, 2020, 22, 22, 26. It's sectioned off into four sections of each of those things. You have the bear, the pre-bowl, first bowl, and second bowl. And it all lines up pretty well. Again, this is just the cycles playing out. And if you believe in this chart, what this implies, we're basically towards the end of the bear. We're not at the end. there is a chunk of time left

in this aligning of the seasons, the lining of the cycles, for some shenanigans to happen. And so I think that's the question to be asked is like in this remaining two quarters of time, the rest of this year, perhaps, what do we think happens? And it's like, I think the big question is,

is it a slow grind to the right? It's just a flat grind or is there a final capitulation leg? We've just been asking this question every single week on the roll-up. I'm in the camp of, It's a grind to the right. Well, I mean, I think, like,

you asked how this chart makes me feel, and this chart makes me feel the thing I have been feeling for the last 12 months is that, like, I need to get this tattooed somewhere on my body. Never fade the cycle. Never fade in the cycle. Every time you want to fade the cycle in crypto,

the cycle repeats. And this is just a fourth instance of the cycle repeating. That's what this chart is saying. So the clearest indication of what, what's going to happen is what happened the last three times. And that means we're close to a bottom, but have not yet bottomed. And so I think the answer to the question is, have we bottomed yet? Almost.

That would be my answer to the question. But not yet, but not yet. But not yet. And it just follows exactly like this, this, I believe in this start. I believe very much in this chart. And I think it's going to play out the exact same way. So we're talking about a bottom in probably two, three months. And then sideways for the next year, sideways up.

And then we rebuild the base. And then we have a okay, 2027, a fantastic 2028. And then it just repeats again. Yeah. It would be poetic for there to be a bottom in October. Like one year after 1010 is like the actual pico bottom. I guess I'm trying to be a, I'm trying to negotiate my way into the cycles not being a thing.

And the way that I do that now is that I do. I say that instead of there being a final capitulation wick in October, we're just, we're already there. We're just grinding flat for the remainder of the year. Why? I don't know. Because it's too magical for the cycles to keep on repeating. That's too much magic.

I mean, there's, it's okay for magic. to exist in the world, you know? That's why I'm seeing the Christopher Nolan movie this week because he is a magical director. He brings magic to his movies. And that's okay. I know every single movie I see from him is going to be pretty solid.

Magic can exist in the world. We were talking about the Odyssey right before we started recording. That's right. I'm going to see it this Friday. I just wanted to inject that somewhere in the world today. You're seeing an IMAX? Of course.

That's the only way to see it. Got to do it. All right. Well, Ryan believes in magic. That's the takeaway so far. And I believe in four-year cycles. How about Brian Armstrong? So he put out, I think, a poll on this.

We're looking at it right here. 31,000 votes. 44% said, yes, the bottom is in. 55% said, no, the bottom is not in. Now, of course, Twitter is just a sentiment check. Pretty split, though. Pretty split. I like the suite from good Alexander, where he goes,

Bitcoin can't go down with a war and Michael Sailor selling. Z-Cash can't go down with a day zero, privacy bug discovered by AI. Eith books Robin Hood after Vitalik disavows gambling as a use case. The night is darkest before dawn. Biches. He's basically saying like,

what's going to send us lower? We've got nothing to send us any lower. Like it can't be done. You might as well go up. But that's how cycles kind of end with seller exhaustion, right? So this is just saying there's cellar exhaustion.

What's the worst that could happen? I do think some worse things could happen though. probably not an unwind, but if you had a major stock sell-off, I mean, we're seeing a little bit of a sell-off today, but that's a tiny micro-sell-off. If we saw a 10-20% NASDAQ sell-off from here, things could still get uglier. I mean, that could be a final capitulation bottom.

Yeah, you can see, okay, so here's the, we're looking at the charts right now, so you can see here's the Iran War conflict, and then the absolute monster rally, and then we've just been kind of ranging at the highs. You can see if we went down, I don't know, a modest 8% from here, there's no way Bitcoin would be above $50,000.

You're talking about the NASDAQ? So if we went down to what, like, you know, 26K, something like that? Below 27K. So we're at 29K right now. If you've been below 27K, which would bring us, you know, down 7%. Yeah. Like, yeah, Bitcoin is hitting an all-time low, or not an all-time low, a cycle low for sure.

But not that much. Yeah. I guess we'll check in on the bottom again next week. I mean, part of the reason we're asking this question is because crypto was up a little bit. And was it up partly due to inflation news? So we had some positive numbers on inflation, which means inflation was a little lower than analysts expected on the monthly rate. I would say it's a decent chunk lower. So here's the summary from the Kobesi letter.

June CPI inflation falls to 3.5% below. expectations of 3.8% core CPI inflation fell to 2.6, below expectations of 2.8, month over month, inflation fell 0.4%. Biggest monthly drop since May 2020. So we started this week.

We knew we were getting these numbers this week. After last month, it was a little bit higher than expected, and there had been discussions about near-term rate hikes happening this year, which really spooked the market. And then these numbers came in, It's like significantly below expectations with inflation.

So inflation is coming in real cold. And I think everyone in the market who is positioned with risk, like myself and basically probably most of the listeners, I'll just breathe a sigh of relief. I can hold on to my risk on position. Well, it's interesting, though, like, of course, this is annualized inflation. It's somewhat of a lagging indicator because on the other side, we have cold inflation numbers. We have hot Iran news, it seems like. And since the beginning of July, oil is up 20% in July.

That's going to be reflected at some point in future increases in energy prices, right? And that will be reflected in CPI, at least in some measure. So it's sort of interesting. We got lower CPI numbers, but energy prices increasing on the week. And certainly the war has continued to intensify. I think last week we played a clip of Trump saying, like, it's over, I'm not talking to these guys anymore. What is his exact?

They're cooks or something. Yeah. Pretty aggressive words. Yeah. So what's the update on the Iran war? Yeah. Okay. So today, the time of recording Thursday,

fifth straight day of U.S. strikes on Iran, targeting Iranian command centers, air defense, lights, missile, and drone capabilities in coastal surveillance facilities. All kind of the same words that we were using last time we were doing this. All of the goal is to attempt to reduce Iran's ability to disrupt shipping through the straight of Hormuz. So we're just trying to brute force Hormuz open. There's a quote from Trump that I thought was worth reading. The memorandum of an understanding with your dealing with sleaze bags doesn't mean much.

And so he is positioning the MOU that they had with Iran as like kind of a test of Iran's commitment to the memorandum of understanding. Do we have a memorandum of understanding? Now, there's a quote out there that Iran's never won. want a lore, but they never won a war, but they never lost a negotiation. Everyone's very good at negotiating. They've negotiated the hell out of their very terrible position that they're in with all the previous presidents. And now we kind of know that, and Trump knows that explicitly.

And so because they were trying to overextend themselves in the negotiation phase, based off of their very little leverage that they had, Trump was like, you guys have no position, so I'm going to send more bombs because I'm not listening to you. And so that's kind of where we are. Donald Trump informed Congress that we are resuming military action in Iran. So that was a part of the War Powers Act that mandates the president informs lawmakers within 48 hours of launching a military attack. So according to Trump, he has now 60 more days of a free reign to have a conflict in Iran

because he's not counting the last conflict in Iran is the same conflict. So now we have a new second conflict in Iran. The first one is a different one. And so we'll see how that stands up. But as far as things go, that's just where it is. How does this stop? Will this ever stop? Like, so.

Like, it's a, it's two, it's an unstoppable force meets an immovable object because Iran is up against the ropes. And so, like, and again, the nuclear effort by Iran is existential. It feels existential to Iranian sovereignty, the regime sovereignty. So they cannot give that up. Sure. But then Donald Trump is like, well, I'm not allowing you guys to have anything. And so it seems to be that we're in between Iraq and a hard place of Iran needs to keep constricted the Strait of Hormuz, because that's their one defensive maneuver that they have is to increase energy prices across the world.

And you said they didn't have leverage, but they do have leverage there with the straight of Hormuz, right? I mean, they get central. We're doing our, we're doing our best to like disrupt whatever control that they have. It's so the U.S. Central Command announced on Monday that it would resume the naval blockade. of traffic entering and exiting Iranian ports. So oil was flowing out of Iran and into, and money was shipping into Iran since this peace deal had been signed. That was lifted on June 18th with the peace deal,

but now it's reinstated. I mean, it feels like we're pretty much where we were a month ago then, before the memorandum of understanding. Yeah, yeah. The situation, the economic situation in Iran is decaying. They don't have much economic view. They're on the road. economically. And now there are, once again, protests. There are small incremental protests

emerging in Iran. You know, TBD if they grow into anything. But you could imagine that if you have the U.S. military on one side and then another wave of domestic protests on the other, like Iran's in a worse and worse position. It's just not moving quickly in any direction. But economically, they just don't have much of a lifeline. Difficult to see, though, with like these actions and end inside. Like, it just feels like it could go back and forth, back and forth for some time for weeks to come, for months to come. The words Forever War have been uttered frequently, more and more frequently this week, specifically. You talked about the oil prices.

So the oil prices came down from, the middle of the Iran War oil price range. I'll call it $95. It's kind of picking a middle of the curve. It fell down 28%, almost 30%, to $66 at the very start of this month. And now since resuming conflict, we have gone up from $66. to $78. $78 oil is still the cheapest oil during this Iran war conflict in total.

And so we're below all previous oil prices for the entirety of this like conflict. And a part of that is just because the market has had time to route around the Strait of Hormuz. And so, you know, buyers are buying oil elsewhere. United States is pumping more oil than ever. The Gulf countries are shipping oil away from the strait so they can just ship it outbound elsewhere.

swear. And so the market has been, has been given time to rebalance itself. And so I don't think we're ever going up to like high, high oil prices ever again just because like the, the time is on the United States side here. So we are recording on a Thursday. This episode comes out on a Friday. So listeners will have already heard this, but Trump plans to address the nation tonight. So that news will already be in. And there's question, what's it going to be about? Is it going to be about the, the war? Is it something else? Election fraud, assassination of, Lindsey Graham are in the notes. Like, I have no idea what all this is, but it's Trump, so it'll be something. David, can we check in on some of the other prices? So I know we're down a little bit at the time of

recording, but other than that, I mean, Bitcoin, Ether, they have had pretty good weeks. I would say we had a very good week on the crypto side of things. I think people were noticing this on Twitter this week. There was unique strengths in crypto assets this week because there was there was not strength in the stock market, not comparatively. There was definitely not strength in the memory stocks, which is like the other big speculative bubble that's happening. But there was strength in crypto. So Bitcoin was up 2.5% this week.

ETH was up 8% this week. So not only did we have unique strength of crypto, but we had unique strength in ETH as well. The ratio, the Bitcoin Ether ratio is up 16% since the start of June. Wow. I'm going to call the ratio, the ratio is edging at this present moment. Did the ratio bottomed? I mean, the ratio was way lower right before Tom Lee bought it.

So it was at 0.018 back in April of 2025 in the absolute depths. And then Tom Lee added 130% to the ETHBTC ratio. And then we have retraced that 130% by 30%, so we're 30% lower from the Tom Lee top. But since the bottom, we were up 18%. We're still kind of trending post. We're trending down from the, the Tom Lee top.

But like, hey, I'm watching it. You think a part of this was Robin Hood Chain and some attraction? I know we'll discuss that a little bit later in the episode, but there's some energy coming from that sector of crypto, and that is in the Ethereum expanded universe. Yeah, yeah. The UniToken was up 11% because Uniswap V3 and V4 are seeing very high volumes. The Athena token is up 12% because Athena is intercourse.

created into Robin Hood chain, Morpho, is also up in double digits. And so the Ethereum ecosystem defy tokens are definitely up. So I think I don't know how else to explain the unique ETH price this week other than Robin Hood chain. So I think that's fair. I think that's right. Well, let's check in on Michael Saylor. And you also mentioned Tom Lease and maybe we should check on him too. So Sailor on the week has purchased more cash.

He has more cash reserves. Last week we reported... He's purchased cash. Yes. He's purchased cash with... What did he sell? He sold his... He inflated some micro-strategy.

So this is at the market sales. He turned on the money printer. He turned on the MSTR money printer and bought it, which is different from last week. So last week he was building his reserves. How much Bitcoin did he sell last week? We reported a few million, right? $300,400 million, something like that? Yeah.

Yeah. single digit thousands of Bitcoin he sold. Yeah, and this week... Maybe double digits. Yeah. This week... What? Zero. Zero?

Zero. Zero Bitcoin. He sold zero Bitcoin this week. This week. This week he sold zero Bitcoin. This week. But he managed to raise 466 million by inflating some MSCR, which is impressive. I didn't know he could still do that.

We thought he was kind of out of bullets, but... And he's never out of bullets, is he? Well, he gets to do whatever he wants. So, yeah, $466 million of MSCR. They now have $3 billion of cash. So have a $3 billion cash position that will give them 30 months of dividend coverage in just cash.

Excuse me, do I say 30? Yeah. 20 months. And so I think if we go back to this chart, Ryan, this chart, 20 months gets him into the pre-bowl section. That's early 2020. Not even. Not even.

It gets us to 2028. That gets us into the bull market fully. That's all he needs. So he has until the pre-bowl to first bowl section shift. You're looking at this picture. Yeah. Byes in plenty of time. So who's bigger?

Michael Siler or the cycles? Cycle is always bigger. Yeah. Don't fade the cycle. Look at the tattoo, man. Don't fade the cycle. Okay. So he's fine for the cycle.

We're just assumed that. Now, there's, of course, a bear take on this. This Peter Schiff loves giving the bear take on anything Sailor does. by selling MSCR at a huge discount to Bitcoin value per share, you needlessly destroyed shareholder value just to avoid selling Bitcoin. Well, yeah, that's the point. That's MSTR folders. That's a bare case for MSTR, not for Bitcoin.

Of course. He's not talking about it. That's actually bullish for Bitcoin. And in a way, it's not maybe, as long as you increase your Bitcoin per share, I'm not sure what it looks like on the week, but that that's the end goal that MSTR holders should actually want. The bold take on this from Dylan LeClair is stronger credit, stronger equity, more Bitcoin by not selling it. So it chores up the balance sheet.

On the other side of things, I feel like Tom Lee is making miracles happen. I have no idea where he's getting this cash because it's not from preferred shares right now. It's not from kind of debt-based instruments. But he has increased. He made a big buy this week. You said, every single day I get this notification. I don't know what you subscribe to, but you get Tom Lee notifications when he's buying.

Yeah, this is a telegram notification from looking at chain. It's just like a, it's a really good, like, kind of just feed of stuff that's happening on chain. Yeah. And like every single day, it's like in the notification, I see Tom Lee's face. Like I haven't clicked on the notification yet, but the bubble is up on my phone. And I see Tom Lee's face just staring at me. So through all of these. He bought more, Heath.

Through all of these purchases, Tom, Tom Lee is making every single day or, you know, like all the days that David is waking up. and looking at it. He now has 4.8% of all ETH supply. That's 5.77 million ETH supply. That is 96% of the way to what he said he was trying to do was reach 5% of all ETH supply. He did this in a year and he's doing it during a bear market. And this is a quite a

bare market for ETH holders in particular, right? Because there's the feeling that you kind of skipped last cycle. And Tom Lee is doing this, and he's somehow raising the cash in order to get to his 5%. Pretty incredible. Yeah, pretty incredible. Pretty incredible.

He needs to retract his 5% target. What do you mean? He needs to raise that? He has to blow right past it. You want him to get to what? 7%, 8%. As much as he can. As much, well, unfortunately, if he gets past like 33%, that's a huge problem.

Oh, he's not 33%. That's insane. He did 5%. That is insane. We said 5% was insane. I thought it was insane and he's done this, but I think it would start to be diminishing returns and into negative return territory if he starts acquiring into the double-digit mode. But you do think he should raise his target from 5% to something higher.

It's just bearish for him to be like, okay, I'm done. I'm not buying anymore. Yeah. I mean, this could be an incredible investment for him, an incredible position to take if Heath does resume its assent, which is to be determined at this point. But Tom Lee is... I mean, I don't even know if it needs to do that. I think Heath just needs to track the crypto market and Tom Lee will do decently well.

He'll do pretty well. Yeah, he'll do pretty well. But Tom Lee, of course, is also a fan of Robin Hood chain, which we're going to discuss next He said this about Robin Hood chain. One of the biggest crypto success stories of this year is the breakaway success of the Robin Hood L2. Dollar volumes have exceeded $1 billion in Robin Hood chain has now more trading volume than any other decks. I don't know about that last part. I think you did some math on that, but we'll talk about that.

I want to dive into the Robin Hood chain, the waves it is making. Talk about Jesse's quote of base eating shit. talk about maybe ETH tokenomics if ETH holders actually benefit from the success of Robin Hood chain and a lot more but before we do we want to thank the sponsors that made this episode possible. Trading is changing. Not gradually right now.

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117 user operations per second on Robin Hood Chain, where just 93 on base. And Robin Hood Chain just, of course, launched just a couple weeks ago. So very quick assent by Robin Hood Chain. There's just actually way more metrics that we should go into. What's the number one activity on Robin Hood Chain? Obviously, memes, we know this. The Protocol TVL, the number one protocol TVL,

is Morpho at $152 million. That's because inside of the Robin Hood app, you can get 7% on your dollars. And in the background, it's the D5Mullet, it's Morpho on Robin Hood chain. Is that the Robin Hood app, the app, or is it their wallet app? It's the app. The app.

That's the only thing about Robin Hood chain that I know of so far that is integrated in the Robin Hood app is the 7% USDG deposited into Morpho. And there's $152 million of that. Athena, $110 million, uniswap, $40 million, and Maple Finance, $30 million, TVL. And so pretty cool, pretty cool. And naturally, all of the activity, all the user operations is very dominantly going to be meme coin trading.

There is currently, Ryan, a pretty fierce competition to become the leader of a token launchpad on Robin Hood chain. There was this one token launch pad that had dominance. They were the kings. They had won all the market share. called Knoxa, and they were printing like $3 million a day, but they stopped because the team had political issues and they couldn't figure out how to split the pie fairly or something.

So they just shut it down. Oh, my God. And so crypto. Now, like, the second places are fighting. So now it's between pawns and flap and hood. fun are three contenders for number one. but the throne of who is the number one token launch pad on Robin Hood. That's the current meta of who's trying to figure that out.

Does it surprise you that just like an established incumbent from Salon or something like Pump doesn't just enter and kind of dominate this? Like why is this spawning new token launch pads? I mean, that's tech that we have already had. Yeah. You can buy Robin Hood tokens on Pump Fund, but Pump Fund is an SVM logic, so it doesn't port to the EVM. But there are, there have been other token launchpads like Zora,

and a flair that I'm kind of like, where was the readiness to deploy? Where were you guys? But also I do kind of find that like the fact that this completely organic and unprepared is for some reason bullish. Like it feels very Darwinian survival of the fittest. And somewhat equitable, I guess, in that sense.

And so we have two barometers now because we have two very big meme coins that are about the same size that launched in different ecosystems. So we have, We have Anselm's mean coin. Did I tell you about Anselm's mean coin? Yeah, we talked about it.

Yeah. Okay. We have Anson's mean coin, and we have Cash Cat. And so Cash Cat is, like, has been crowned the meme coin of Robin Hood chain. Cash Cat was what Robin Hood was going to be named or was named before it rebranded to Robin Hood back in like the early, early lore of Robin Hood. So now we have Cash Cat and it's the market cap right now. fully diluted valuation of $104 million.

And what's the Ensign coin? That's at $190 million. So in the same ballpark as each other, one's a Solana meme coin, one's a Robin Hood meme coin. And in addition to that, is like kind of a fight between two different ecosystems. But overall, we have two meme coins

about the same size that launched around the same time at the market bottom globally. And so I'm kind of using this as a barometer of like, A, ecosystems, but B, risk. And so in my mind, if these meme coins do well, it's a barometer of just like, people are on. People are playing the games. But it's also a fight, isn't it?

Between who's going to have the meme coin empire? Is it going to be Robin Hood right now? Or is it, is Solana going to retain its throne? Yeah, I would say that's right. Yeah, like if Robin Hood dominates Solana in meme coins, you would buy Cash Cat. But if you think Solana is going to dominate meme coins, you buy Ansem. But the Anson's a little bit different because like, A, you have the one dude. who's responsible on promoting it,

where Cash Cat's a little bit more organic. But that's kind of like the activity and just like, litmus says it's going on. Downstream of this, I think related downstream, this is also a long time coming. Base, which is Coinbase's L2, and a competitor comparative point to Robin Hood Chain has been on a path towards pivot

for at least the last six months, let's say. This tweet from Jesse Pollock, who's the creator of base, as you called him, lays it out very starkly. And this is the quote I was alluding to earlier in the episode. He said, The collateral damage talking about this year, how things have gone,

has been an exercise in eating shit. He has a whole post about this. He describes the first quarter of 2026 as a punch to the face. What I got out of this episode was Jesse admitting that the social coin, creator coin direction, that base was going

going in and promoting both, I guess on the platform, the infrastructure level, though that was a bit more neutral, mainly up the app stack in terms of what the base app prioritized, what he as a leader of the base ecosystem prioritized, this whole creator coin direction. He's saying that was wrong. It was wrong because. Web3 social. Yes. Either it was wrong because it was too early or maybe it's like wrong because it just like

won't work. But it was the wrong direction for the base app. and ecosystem. So the Farcaster Zora base thing that was very popular last summer that Jesse was spearheading and that looked like it would be the next thing. He's saying that was the wrong direction. What we should have done instead was focused on internet of finance basically. The money types of things, the defy, the

perps, the trading, these sorts of money primitives instead. And so he's admitting that he was wrong. Also, stepping back from the base app. And And Kobe is now running the base app team. So Jesse is going to be still involved in the base chain itself and the engineering development of that. But now Kobe is taking the lead on the app side of base and is clearly going to be prioritizing perps, trading, making this a very friendly environment for that sort of class of person.

What did you make of this? Yeah. I mean, the timing of this is absolutely downstream of Robin Hood chain. obviously, and Robin Hood wallet. And so the context of this is just because, well, why did Robin Hood do so well so quickly? No, Robin Hood is a gargant in of itself. And so they were always wanted to have some amount of success on their chain.

But like the timing of this seems to be just because it's downstream of Robin Hood success, which feels like Coinbase is like this should have been our success. And why wasn't it our success? Jesse, when everyone was like yelling at him to stop doing the creator coin stuff, Jesse was like, I'm going to do the creator coin stuff. He was like, it's conviction. It's conviction. Yeah.

And like, I don't know, man, you got to respect that to some degree. Yeah. He took a swing. It was a big swing. He took a very big swing and he didn't listen to anyone. He was like disagreeable founder, which is bullish. And so you got to tip the hat to that level of conviction. In hindsight, now that we have hindsight, 2020, hindsight bias, hindsight privilege.

Just like, dude, that was so schemorphic. Like, social was web two. crypto is web three and crypto is not social, crypto is trading. Maybe, I mean, Jesse would still say, hey, the future's not written. You were just talking about a thing called, what is a cash cat and ansome coin?

What is ansome coin? Well, it's a creator coin. Like, it's in the vicinity. It could re-manifest, but I think your point is taking. This was a highly risk, like, conviction-type move. And maybe it would have been better in a startup, to be honest, rather than kind of Coinbase.

Maybe the argument would be like Coinbase should have done the safer play, which has continued to develop the financial use cases for which it was known. In fact, a friend of the show, Austin Campbell, has a pretty harsh critique on this. He said that base has been an outright failure. And he gives reasons why. I don't know about that one. Yeah, a strong take. He gives reasons why it's a long post.

He said base was a distraction that harmed Coinbase itself. Coinbase is not fixing what matters. Can point base understand? Yeah. He was basically saying that it's a different matter when you're competing against like Robin Hood and Charles Schwab and Tradfai, right? These are bigger boys than kind of like

the former exchanges, you know, Gemini and Cracken. So you have to compete in different league and just like asking the question, is Coinbase up to the task? And so far he's saying that base has been an outright failure. I don't, I think that's going far too far. I mean... That's too far.

The tech works. This is not... Base is still like the third largest chain in crypto. Yes. And this is not... Well, that's fourth. It is a pivot away, but it's kind of like a pivot

of the application layer. You can still use the exact same infrastructure. I mean, and keep in mind, Robin Hood has only been out for like, what, three weeks, and we're already calling like, oh, Robin Hood won and Bass has felt like that's way too soon.

Like, we're getting way over our skis on that one. So that's a take that's going around as well. I will say that when base was launching, everyone was very stoked about base the chain. And why? Because base was going to get distribution from Coinbase, which is not something that any chain had ever had before ever was a centralized exchange or a big, large retail-oriented platform.

Well, there was finance. There's B&B chain. True, yeah, true, which was also bullish, which was also bullish. And so, yeah, that's when we got, base is just B&B chain for white people in North America. And so, like, Robin Hood saw that as like a free lesson. It's like, oh, well, if you have distribution, your chain is automatically bullish and people will come build on your chain because of the distribution that you're going to put on it.

And so really it ended up being a competition between Coinbase.com and the Robin Hood app. And Coinbase.com has, as an app, has lagged Robin Hood. Like, they were always, between crypto and TradFi, you know, crypto lost energy in 2022. And so this was a race for Coinbase to put. stocks inside of Coinbase before Robin Hood put crypto inside of Robin Hood. And Coinbase has been somewhat slow. And so maybe to Austin's point, like base was maybe a distraction. But I don't know, the company's big enough.

You can chew gum and walk at the same time. I don't know if one was really competing for oxygen versus the other. They'll figure it out and the chain strategy is there. I mean, compare it to like ink from Cracken, right? It's doing far better than that. So I think there's a strong base, shall we say, to build on top of. There's another question, though, that was brought to the. ecosystem as a result of Robin Hood's success. And that is the question of like, okay, like,

ETH price is going up. But the question is why. This was a tweet I saw fired around from an analyst at ARC invest, who of course owns a whole bunch of crypto assets, including a pretty large share of ETH assets, maybe through Bitmines, some other mechanisms as well. But he says this, this is Lorenzo. The Robin Hood chain is the cleanest case study of what happened to ETH's economics over time. And then he goes through some stats. Since inception, Robin Hood chain, Jane did 816K in revenue, 1,000 in revenue. Arbitrum, the tech provider, middleware, takes 10%. That's 80K of that 816K. And then Arbitrum then pays Ethereum for settlement. And so far they've paid $1,538 to Ethereum. So if you look at the margins here of like, who wins, Robin Hood gets 90% margins, Arbitrum gets 10%. And Ethereum gets 0.15% for data

availability. And so he goes on. He says, if your thesis is ETH is money, then Robin Hood building here is ultra bullish, more activity, more ETH collateral, more Lindiness. He's talking about, look, a lot of ETH is being used in these use cases, being bridged across, ETH is being used as money. ETH is the trading pair with all the meme coins. Exactly. Good for ETH, or at least net marginally better for ETH than not having Robin Hood chain. However, he says, if your thesis is, ETH is a revenue generating asset, this is the ultra bear case, because there's an uncomfortable truth. Robin Hood was already going to build on Ethereum the whole time, so you haven't actually won anything. He's basically making the case that, you could look at it, this, you could say

Heath is not collecting enough benefit for hosting a layer two. He said a healthier split would be at least Ethereum captures 15% of this margin. So this is a long time question. Should Ellis L2s be paying more to Ethereum. And that's where we got Pellenia coming out of retirement. This is a famous L2 bull and poster from, I mean, started five or six years ago, famously bullish on layer twos. The layer two model, yeah. And it just kind of has gone quiet, jaded from lack of quality applications being built in the

crypto ecosystem and has fallen silent for a couple of years. And Plenia just came out. with a, I guess, an updated take on where the crypto market is. What is Plenia saying here? The way I read Plenia's take was that there was, there is a tension between the scalability of supply, block space supply that exploded. Blockspace supply exploded while demand for crypto kind of collapsed at the same time.

And that made it very hard for the ethos money like model to, come to fruition. And mainly because, what did you say? Demand growth for applications has been negligible relative to the increase in supply for the last four to five years. Further, the demand curve has proven to be highly inelastic. And so he kind of stays with his original concepts and ideas. I don't think he really updates them, but he kind of gives an account of just like, well,

we did expand supply, but just demand hasn't really kept up. And that's led to the economics that your ether is at. Well, I was glad to see this. Plenia did admit that he was wrong about something. He said, my expectations for growth in application demand from 2021 and 23 posts have proven to be wrong. So he was wrong on the demand side. The entire industry felt that, yeah.

The entire industry felt that. But the core of his post is there are two paths for Ethereum right now. and ETH value accrual, which is you could either subsidize transaction fees and simulate application demand to better compete in the trillion dollar alternative store of value market. So ETH as a store of value asset, in which case you don't care about fee revenue from L2s at all. You just care about ETH being used as money somewhere else. Or you could reduce the capacity drastically.

So capacity of L2 block space, capacity of block space in general, to hike transaction fees and you play in the shrinking billion dollar transaction fee market and accept a $100 ETH as the end game. Those are the two paths. Do you agree that those are the two paths, David, do you think that's somewhat of a false dichotomy here? False dichotomy. Why? Why? Because the whole premise and structure and pattern of the Ethereum system is always about synergies and synthesizing and collapsing paths down to the same path. ETH is money because of the the fees. And the fees, if you value ETH on the revenue model, then yes, ETH is worth $100. But that doesn't mean that that's what's going to happen. In my mind,

you want to maximize fees because ETH is monetized through the fees. And so it's a little bit of like take the two binary directions that you think are we are pointing in and put them in the same path and go down both and do both. That's my attitude. I think, though, there's some truth in that you have to pick one or the other, right? So, like, you have to pick one or the other to optimize for, don't you? Yeah. And so, like, the way you put it here is you said, eventually at the end game for max, um, eth value, fees won't and can't matter.

I agree with you there. And you said, eth is money implies a market cap far higher than revenue could support. That's what Plenty was saying. I also agree with you there. and then you say, but the bootstrapping process is different than the terminal environment for ETH, different than that end state you're saying. And the bootstrapping process requires fees, that line.

The bootstrapping process requires fees. Okay, I'm not sure that it does anymore. Or I'll throw this out at you. Like, the last 10 years have been the bootstrapping process. And now, Eith no longer requires fees. So I'd be more on the side of, like, I question that assumption. I don't think we actually need to care about fees anymore,

and certainly we shouldn't be optimizing it. We should be optimizing for scaling Ethereum and scaling ETH as a crops store of value asset. And if Blockspace is super cheap to do that, go do Blockspace. Who cares about fee revenue? Bitcoin doesn't care about fee revenue. Gold doesn't care about fee revenue.

A store value asset shouldn't care about fee revenue. shouldn't care about fee revenue or 10 years into the project, now ETH can afford to not care about fee revenue. That would be my case, but I think you still believe that fee revenue is important, and there are others like you. I think Donkrad has said this, you know, previously.

It's been part of his case. It's like, no, actually fee revenue does matter, and he should be prioritizing it. But I just see a $100 asset at the end of that path. And it's like I've already seen the bootstrapping being done, and I'm like, now it's time to be a, store a value asset and not worry about fee revenue at all. This week, the ETH-BTC ratio, as we said earlier, is edging upwards.

And it is not because of any of the fees that were collected with Robin Hood chain, either on the Robin Hood chain or on the layer one. And so if the reason why ETH is edging this week and it's up 8%, 9%, to Bitcoin's 2.5%. If that is because of Robin Hood chain and the positive sentiment and momentum of Robin Hood chain, that is a huge point for the Ethes money crowd, the no-fee crowd. I don't know.

I think I would describe more than 50% probability that that is why Eith moved to this week, but not 100% because Tom Lee also bought this week. And it's also just one week. It's pretty, it's kind of noisy. It could be a random walk. Of course. I take the point.

the destination of like $100 eth because you value it on the DCA doesn't strike true to me because like when I see like a dollar of revenue is given some sort of like 2000 like DCF analysis. It's like so like for some reason

like an Ethereum dollar of revenue is weighted so much higher than like Microsoft or Amazon when I see that I'm like yeah, yeah, we should make more dollars then because we get a 2000 X premium on the dollars that we make. And so we should optimize for revenue like that. But let me throw another take that you may resonate with and might actually be true.

So it's the idea that the human brain can't contain and the scalability of a store of value can't contain multiple things at the same time. And if you're saying on the one hand, it's a store of value in the other, but it's also valued from fee revenue. it's hard to memetically

treat the thing as a store of value asset if you're running it on DCF calculations. So it's better to do the Bitcoin thing which is just like, fees don't matter. Tough shit. Fees don't matter.

And then you get cemented socially and memetically in the store of value camp. And so, Ethereum is actually shooting itself in the foot on the social layer by talking about fees at all. Fees are not the point of ether.

And I think if you push that understanding of what ether the asset is, which is it's a store of value asset. It has all of the properties of Bitcoin and it also has D5 smart contracts. And you ignore fee revenue. You'll be doing a much better service to kind of the narrative. And this is a memetic asset. Store of value assets are that by nature. So don't talk about fee revenue is what I would say. Yeah.

I think the Bitcoiner archetype would agree with you because there was like an early process of like trying to get utility out of the Bitcoin blockchain by like time stamping startups and that's right. I remember that tried to like make the Bitcoin blockchain useful. And all the Bitcoiners are like, we need to drive that out of the blockchain

because we need to remove any sort of value capture mechanism at all. And we need to trim away everything from Bitcoin other than BTC the asset. So I find that argument to be highly congruous. And so, yeah, I do take that point. I do take that point. Joseph Lubin weighed in here. He said, Ethereum L1 revenue fees should stay low to foster growth.

That's his reason for it. And he basically says, Heath will make it up on becoming a store value asset. But we want to keep the fees low and supply humming in order to attract more market share. So that's another take. we could get into some more on Ethereum L2 roadmaps. I don't know if we want to do that or just keep moving on.

I do want to talk about Stephen Goldfetter's. Did you call it Steve and Goldfetter radicalism in the notes? Yeah, yeah. This is the founder of Arbitrum, right, who had an interesting proposal to this dilemma. What was his take? Okay, so his proposal, this was on Twitter, is this is downstream of this exact conversation from the arc analysis. He says, Ethereum should adopt its largest roll-ups

in the sense that a critical bug in Arbitrum, Base, or Robin Hood chain should be treated as an Ethereum vulnerability and trigger an L1 fork just like an L1 bug would. Do you remember during the eigenlayer days, Ryan, when Vatelag wrote that article, Don't overload Ethereum consists? Yeah. So Stephen Goldfeather is proposing to overload Ethereum consensus.

No, he's not. He's just saying just Arbitrum. It's not overloading it, just at arbitrage. And base and Robin Hood chain. Or I think what he's saying is like any layer two ecosystem that is of sufficient critical mass, they get to do the regulatory capture game or regulatory arbitrage game. And like, we get the protection of Ethereum, the Ethereum layer one, because we are big enough. Yeah, I think that is what he's saying.

And he's saying, in exchange for that, we as L2s, would, be willing to pay more rent to eth holders. We'd be, instead of the 0.15% that you're getting today, maybe we'll do 10%, maybe we'll do 20% because the service is worth more to us because we no longer need a security council. We accept the sovereignty of Ethereum L1, and that's a fair exchange for us. Big government instead of state power. Less federalism and a bigger federal government, let's say. And so we'll give you more taxes because you're giving us a higher level.

of service. You know, like, the analogy that we've often used is right now, it feels like many the L2s, like Arbitrum, are in kind of this, you know, like almost like a NATO security alliance, but they have their own sovereignty. It's kind of opt in. They don't pay that much. This would bring them closer to like a state in the union of chains, right? Under the sovereignty of the L1, in exchange, they'd pay higher taxes. This is closer to the United Chains of Ethereum vision. But it does have the trade-off of, wow, you are really overloading the consensus and being dependent on this third party. Do you want this chain in the union? Or do you just add all of that capacity into the L-1 where you have kind of like full control and full ability to make it crops the way

you want it to? So something that Lorenzo said, the original tweet that spawned all of this conversation, he's talking about the dichotomy between eth is money and eth is a revenue-generating asset. He goes, this is the uncomfortable truth. Robin Hood was never going to build on Solana, Sui, or any monolithic layer one, which what you said is like, well, what if we just put the capacity on the Ethereum layer one? Robin Hood chain was never going to build on any other chain. So like the $1,538 that Ethereum layer one burned in blob space fees from Robin Hood, it was never going to get in any other way be other than the L-Therian. models. You do have to take that point that, like, there was never going to be Robin Hood organic adoption of, like, the Ethereum layer one. And so I do take that point. What do you think

about Stephen, Stephen's proposal? I think that it's interesting. I think it's part of a negotiation of moving into a tighter, more coordinated, united format of L2s. I don't know if this is the proposal Ethereum should do. Right? There's lots of all. is out there, one of which is just native roll-ups. Right. Right. Stephen would say, native roll-ups,

but you have to start from scratch. It doesn't have any state. There's no Robin Hood chain. There's no distribution. It'll just be a nothing chain and what's a native roll-up. But a native roll-up is exactly what Stephen said, which is it will fork if Ethereum L1 forks.

It's the block space of a native roll-up is Ethereum in a way that on an arbitram L2, it's not quite the same, has different guarantees. So that's a competing direction. So I guess I'm not opposed to it. I just think that it'll have to develop. We'll have to, it'll take years maybe to develop a different sort of contract relationship with L2s.

And I'm not sure that what Steve, like, what if there was a fork in like arbitram land? You're telling me you're going to fork. Like you lose the store of valueness of Eith if things can be changed. If the L1 is forking a bunch. lose something really important here. I'm not totally sure about that. One of Ethereum's greatest skill sets is decentralized governance and decentralized coordination.

And with Stevens' proposal, I'm kind of seeing that skill set and product that Ethereum has to offer the world being monetized because no other ecosystem has the level of decentralized coordination that Ethereum has. And like, Steven's like, will you guys do this thing? that's really valuable for us and would solve our problems and allow us to remove our security council and we would pay you a bunch of money for it

and so you guys can monetize decentralized coordination but it's also the game that Ethereum is an ecosystem never wanted to get into I do you think Preston Van Loon and like the Prismatic team and like all the other client teams of Ethereum are we like yeah I would like to govern whether we do state changes on the Ethereum layer one

so that ETH can be monetized more. I have another point before we move on. Before we move on, I have one more point. Can you pull up open the Lorenzo chart that showed the value flows of like Robin Hood getting 90% arbitratum, yeah. It's say Ethereum got a much larger number than the $1,538. So of the total paying users of $816,000, what if Ethereum got $100,000 of that rather than $1,500 of that?

Would that be bullish or bearish for ether the asset? Barish as hell. You're talking about $100, $1.00,000, price. Fees don't matter. This is why I don't really... Dude, the market would send ETH up. If Robin Hood was paying Ethereum Layer 1, $150,000 in the first week, that would send ETH upwards.

Yeah, it would send it up on the week and on the two week. But in the five year and the 10 year, it would just cap the top. It would cap the top at, you know, an asset that's worth a few hundred billion dollars max, max rather than multi-trillion dollar store value assets. I don't know if that's true. I don't know if that's true. I don't know. That's true.

I mean, I think you do have to choose, really. And I think that maximizing for fees would be a huge mistake for Ethereum is not the way formed. But the community is somewhat divided on that. And you could tell the narrative somewhat divided on that. David, we've got more to discuss. We got another spinoff from the Ethereum Foundation.

Also, the DTCC is tokenizing things. Are they doing it on our public chains or not? We'll talk about all that and more. but before we do, we want to thank the sponsors that made this possible. Some exciting news. We are launching a new podcast to help people figure out the crypto cycle, how to navigate it. The best crypto cycle investor I know, his name is Michael Nato. He runs the Defi Report.

This is the guy that sent me a sell alert before the 10-10 price drop happened. His cycle analysis has been absolutely on point. I've been following him for years. And this year, we started recording weekly podcast episodes. Each one, we get into his portfolio, what he's holding, the market structure, entry targets, fair market value of Bitcoin and Ether, and where we are in the cycle, there's new episodes that are released every Wednesday. They're 30 minutes. They're short. They're punchy. I think this crypto cycle is harder to navigate than most. So let's do it together.

Go subscribe to this podcast. Search the DeFi report wherever you get your podcast, YouTube, Apple, Spotify, or find a link of the show notes. There's a new episode waiting for you now. Hey, Bankless Nation. It's David. If you're hearing this, that's because you are listening to the free bankless podcast feed. Did you know that there is a premium bankless RSS feed? The premium feed has extra interviews that I do for my own personal research and just deeper questions that I want answered about the crypto industry, questions that I want to answer so I can be more informed as an investor, both at Bankless Ventures and also just in my own personal portfolio too. Also, there are no ads, which means if you listen to the premium feed instead of the free feed,

you'll get about 20 hours of your life back every year because you choose to support Bankless directly. So if you're interested in getting extra content all while skipping the ads, or you just appreciate what we do here and want us to keep doing it, we'd appreciate it. If you signed up for bankless premium. And there is a link in the show notes to get started. Cheers to a good 2026. Another week, another Ethereum Foundation spin off. This is now ETH Systems.

This was the Ethereum Foundation's institutional privacy task force. Now is ETH Systems. This is a for-profit. So the other two previous ones, ETH Labs and Ethereum institutional were non-profits. This is a for-profit. This is a for-profit financed by the same investors. So BitMine, Sharpling, Joe Lubin,

these Heath Treasury companies that are funding this, and this is trying to provide institutional privacy tools to build on Ethereum while giving enterprises the privacy that they need to do so. So former EF talent now in ETH systems. So I think we go four for four? I think it's got to be that's got to be it. That's got to be all of them.

So we have ETH Labs, which is protocol development, nonprofit. We have Ethereum institutional, which is commercializing ETH for institutions also a non-profit. Then we have ETH systems, which is institutional, confidential, private transactions.

And this is a for-profit company, probably more tools and consulting type base. There was also this, David, I don't know if you saw this. Another member of the EF is leaving the EF to go join ETH Labs. So Francesco, after five years... Yeah, Francesco. Okay, do you know him?

Yep. I'm pretty sure. A handful of times. He's five years of EF research and now he's going to ETH Labs. It's just interesting that there is now a repository, almost like a refugee camp for like EF people that want to leave because they're just kind of like done with it. EF no longer fits their mission. There's places now that can receive them.

And it'll be interesting to see whether ETH Labs grows in that way or shrinks over time or stays even or what happens. happens there. But it's another outlet for people who are passionate and excited about contributing to the Ethereum ecosystem other than the EF. I think that's healthy. A lot of people are talking a lot of shit about that's, Ryan, like that's are just terrible, terrible innovation, fake innovation. At least for one thing with Ethereum, they financed Alt EFs, which I think is phenomenal. Agreed. And by the way, I'm not one of those people. I think that's have been fantastic for Ethereum in particular.

For Ethereum, yes. For Ethereum. Then there's a bunch of other dads and you're like, I don't know about you. I don't know about you. David, this is a Haseeb take that I know you wanted to get into, but we had been talking earlier in the year

about all of these defy hacks. It seemed like every week, every month, hacks kept getting bigger and AI was partially to blame. Haseeb has a counter take on here and it's based on some data. So what's the take? Yeah, the take was,

the month of terrible hacks, which was April of this year, was the top. And in fact, hacks have gotten fewer and less significant ever since then. And so he's calling

the Defy Hackpocalypse as a false alarm. He goes, it's more than halfway through the year and annualized dollars of hacks in Defi in 20206 is lower than in 2025, even though that includes April,

which was a Gargantuan month and Kelp Dow. So the number of hacks, maybe I've been spoke, the number of hacks is up, but the size of hacks fell even more than the number going up, which means those hackers are picking off smaller and smaller protocols and abandonware, as you call it. Actually, I like that word.

Like the existential threat that AI imposed upon defy was kind of like for me, like the last draw that motivated me to sell my ethic because like, well, dude, if AI is just going to hack all these damn protocols and these protocols aren't actually growing in TVL, then like, that's, what am I doing? What was my E4? But Haseeb is saying is like, well, the worst is actually behind us.

What do you think? Do you think he's right? He's pretty smart. I mean, he's just saying, like, there's, you know, when you talk about the hacks, there's something causal there, right? And so the attackers get this AI advantage. But so then the defenders. So the defenders, yeah.

We harden our protocols and then, you know. The thing about this is, though, this could be somewhat lumpy in that it could happen every time there's a major AI breakthrough. That's one possibility. Or he's right. I mean, this just could have been the top. And the defy hackpocalypse was overstated, maybe. Yeah, maybe.

Hopefully. Now it's about vault permutation risk. Do you listen to the premium feed episode that I do with my friend Andrew who does vault risk? Oh, dude, there's just a growing number of spaghetti permutations. of vaults depositing into other vaults, depositing into other vaults. That sounds like trash, I'm in.

What you think, exactly. What you think is like, oh, I'm going to get like a 6% yield on my USC and I'm only going to deposit into this one vault. Well, that vault deposits into four volts, which deposits into four volts, which deposits into four volts. And one of them is just an EOA.

And it just gets so messy so quickly. And so that has nothing to do with AI exploits and like security and just everything to do with risk management, which as you were saying, is just trad-fi stuff. Yeah, it very much is and somewhere where we could level up for sure. David, let's end the episode

on a take that you had that I wanted to ask you about. You said the buy and burn token model is undefeated and you point to a few popular tokens that are doing well this cycle, Hyperliquid, VV, and Lit. Yeah. All talk big games about burning their token.

The point of a token is to be burnt. Maker had it right from the beginning all along. Maker had it right. Who knew? Make her Dow. Make her down. What about this model works for you and is working right now, do you think?

Buy and burn. Well, it's more about the fact that in 2026, our leading projects with the most energy and attention and growth are doing the buy and burn model. And so, like, hype is unequivocally very successful at it. VVV still new. Like, there's still a lot of VVB to be burned. But Venice, the project, Venice the company, is like, yeah, we want to. They said it on my podcast. We want to burn every last VVV token.

Lit, the Ethereum Layer 2, Perp Dex, wants to burn all of its tokens. If you scroll down, you'll see I add JTO from GTO. JTO. They just launched a JTX this week. It's a prosumer trading interface that basically wraps up Solonda liquidity and assets and gives you a trading experience. And they burn 80% of the fees that they receive with JTO. So it's just like, dude, like we've been debating the buying burn model in crypto for forever,

but just we keep doing it, all the hot new projects that are on the frontier are like, yeah, and we're going to burn our token. And so I'm just like, dude, I have a hundred and burn model. This seems like, number one, all of these tokens are generating revenue. It's fee revenue. So in order to burn things, you actually have to generate fee revenues. That's number one. That's kind of the entry criteria.

And then number two, what they're doing with the fee revenue is they're actually prioritizing token holder interests and fiduciary responsibilities to return the, the proceeds of that capital back to token holders, and they're taking that job seriously. Yeah, it's something that previous teams have not. Yeah. Ansem actually had to take on this. I will say on all of those tokens, Gito, VVV, hype, lit,

all of those have equity structures. Yeah, and that's not preventing them from doing this. Nope. Nope. And they just like, the way that we're aligned is we're going to burn the token. This was a tweet that's, it's somewhat of an, iteration on your take, but I think it's worth talking about. This is from Anselm.

He says, I have a thesis that buybacks don't actually work. Hyperliquid makes 800 million annualized revenue. Pump fund makes 440 annualized revenue, but hype trades at 65 billion, whereas pump trades at $1.4 billion. Why the discrepancy? They're both buy and burn. You know, like pump is just half hyperliquid. Shouldn't it be half the valuation?

And he goes on, yes, some more detail. But what he's saying is the difference is not in actual revenue generation by the business, but instead of the trust premium ascribed to the team. So he's making the point that a pump makes tons of revenue, but they've done other things. They raised a billion dollars in the ICO. They promised an airdrop to users that were never delivered. Yeah. Even though they have a consistent business model, they haven't shown social alignment with their holders.

Whereas hyperliquid is like no VCs from the beginning. you know, reward insiders. Didn't promise anything. Yeah. And so what he's saying is in addition to just a buy and burn mechanic and cash flows going back to token holders, there's something to do with like, there's some kind of a trust premium that's happening

with some of these assets. Like are they going to in the future care about and prioritize token holder interests above all of their other competing interests? And he's making the case that hype has that and pump right now does not. And that's why it has such a premium. Mm-hmm.

I'm reminded of Vitalik's legitimacy article, never talked about? Like hyperliquid just feels very legitimate and they've won hearts and minds about legitimacy. And so that's kind of like the squishy, squishy social thing. But like one part of Anselm's article is just like, yeah, you're talking about revenue quality, revenue durability. I think people are not saying,

they're saying that pumps revenue is just not as durable as hyperliquids revenue. because meme coin trading is not as durable as the perpetual. Yeah. And so a little bit of this is like the squissy social thing and then a little bit of just like, okay, what's the quality of the actual dollar being produced because did the market will ascribe a premium for dollars

based on the nature of the business. Yeah, a lot of token holders are voting with their feet, though. That's going to lead to better outcomes and higher quality tokens, I think. So it's all a good thing. Bankless nation, we'll be back in a week. But until then, crypto is risky. You can lose what you put in, but unless this frontier, it's not for everyone, but we're glad you're with us on the bankless journey.

Thanks a lot.