Bankless - ROLLUP: Bull Market Over? | BTC 50W Breakdown | Balancer Hack | Stream Finance Collapse | Brian Armstrong’s Prediction Market Drama

Episode Date: November 7, 2025

Is the crypto bull market really over, or just pausing while AI takes the spotlight? On this week’s Weekly Rollup, Ryan and guest co-host Haseeb break down Bitcoin’s 10/10 crash, hidden leverage, and the “Bitcoin silent IPO” thesis. They also cover the $128M Balancer hack, DeFi’s decentralization debate, L2 vanity metrics, Brian Armstrong’s prediction market stunt, and why Peter Thiel says Bitcoin’s becoming a BlackRock coin. ------ 📣UNISWAP UNO DECK GIVEAWAY | COMPLETE THE SURVEY TO ENTER https://www.bankless.com/survey ------ BANKLESS SPONSOR TOOLS: 🪙FRAXNET | MINT, REDEEM, EARN  https://bankless.cc/fraxnet 🦄UNISWAP | SWAP ON UNICHAIN https://bankless.cc/unichain 🛞MANTLE | MODULAR L2 NETWORK https://bankless.cc/Mantle 💤EIGHT SLEEP | IMPROVE YOUR SLEEP https://bankless.cc/eight-sleep 💠BIT DIGITAL ($BTBT) | ETH TREASURY  https://bankless.cc/bit-digital We’re being compensated by Bit Digital (NASDAQ BTBT) for this segment promoting their company and BTBT. The compensation is paid in cash as a one time payment. You can find additional information about Bit Digital and BTBT on their Investor page at https://bit-digital.com/investors ------ TIMESTAMPS & RESOURCES 0:00 Intro 2:14 Markets https://x.com/intocryptoverse/status/1985771197460558099 https://x.com/ColinTCrypto/status/1985781111713390894 https://www.cnbc.com/2025/11/03/stock-market-today-live-updates.html https://edition.cnn.com/2025/11/05/business/nvidia-palantir-michael-burry-stock https://www.nbcnews.com/politics/politics-news/35-days-government-shutdown-record-longest-history-election-day-rcna241576 https://polymarket.com/event/when-will-the-government-shutdown-end-545?tid=1762452064029 https://x.com/KobeissiLetter/status/1985791658689024101 https://visserlabs.substack.com/p/bitcoins-silent-ipo-why-this-consolidation https://x.com/StreamDefi/status/1985556360507822093 https://x.com/AzFlin/status/1985496697255170279 https://x.com/deepcryptodive/status/1985693763121889722 https://x.com/deepcryptodive/status/1986047552135835855 https://x.com/DefiIgnas/status/1984947279942611123 https://x.com/seanlippel/status/1984013993111888013 https://x.com/DTAPCAP/status/1985733571097567457 30:46 Balancer hacked for $128M - biggest DeFi hack all year, OG protocol https://x.com/Balancer/status/1985390307245244573 https://x.com/Balancer/status/1986104426667401241 https://x.com/hasufl/status/1985284234064408997 https://x.com/suhailkakar/status/1985331523646615664 https://x.com/peckshieldalert/status/1985281156259201044 https://x.com/berachain/status/1985288599152042101 https://x.com/hosseeb/status/1985394967712510295 https://x.com/RyanSAdams/status/1985707754636345619 44:57 Did Brian Armston manipulate a CFTC regulated market? https://x.com/0xTyrael/status/1984023540111437882 https://x.com/brian_armstrong/status/1984048706220609998 https://x.com/hasufl/status/1984253822898962867 https://x.com/adamscochran/status/1984077017738801420 https://x.com/kylascan/status/1984304278882877849 https://x.com/jdorman81/status/1984284538210779428 https://x.com/VitalikButerin/status/1984254951141593470 https://x.com/probaaron/status/1984039423412203558 https://x.com/hosseeb/status/1986496773737881907 53:22 Ethereum L2s scaling & RWAs https://www.growthepie.com/ethereum-ecosystem/metrics https://x.com/RyanSAdams/status/1986440364014620943 https://stokes.io/blob-scaling-fyi/ https://x.com/tomwanhh/status/1983657507940893158 https://app.rwa.xyz/ 57:24 Is BlackRock bullish or bearish for crypto? https://x.com/WhaleInsider/status/1983924685382295782  https://x.com/0xMert_/status/1985071565042749663 1:05:33 Closing & Disclaimers ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures

Bankless Nation is the first week of November. I've got Haseeb Qureshi filling in for David Hoffman. David is up climbing a mountain. I think he's somewhere in the Patagonia right now. Hopefully he's doing some work for us, Haseeb. Hopefully he's like slaying some ballrogs. He's fighting some demons. And he's going to save us from this bear market.

Yeah. I don't know if I could rely on David to do that right now. It kind of feels like his bear market's coming for us whether David's out there or not. Oh, my God. Well, we got to talk about that. It feels like we are. So one topic, of course.

course, we were just hanging above crucial price levels for Bitcoin, the 50-week moving average, is the bull market over. I want your perspective on that. Also, there was a major setback in Defi this week. A four-year-old protocol was hacked. Actually, it's even longer than that. The Balancer Protocol, what's the fallout? Also, October 10th, maybe we're starting to get some dead bodies rising to the surface after that major liquidation event. We've got Steam Finance, which is like this quasi-D-Fi stable coin hedge fund thing that has imploded. Are there more dead bodies out there? And I want to get your perspective on this to see Brian Armstrong.

He had some fun with prediction markets on the Coinbase earnings call. Some people didn't like that he was having fun about this. So what does this say about prediction markets? All that and more. We'll get to that. I do want to call your attention, Bankless Nation, to a Uniswap survey and an opportunity for you to win some Uniswap Uno Swap deck. So this has got to be a deck of cards. I haven't seen it yet. It's like a uniswap-themed Uno deck of cards. All we need you to do is complete a survey that's going to be in a link in the show notes and you can get a chance to win. They just want some information from the bankless community. So go do that. You could win an Uno deck. Haseeb, did you ever get the UNisox back in the day from Uniswap?

I did not have any Unisox, but I know several people who did and who flex them on me. Very jealous of the Uniswokers. Yeah, so are they still valuable or have they gone to zero with the rest of the NFTs? I don't know. Because it was like a physical item attached to a token, right? Yeah, that's right. That's right. Okay. Yeah, I don't know.

Well, maybe there's a future for these Uno swap cards in your portfolio as well. Let's start here, though. Bitcoin prices on the week. They are down at the time of recording $101,400. So that's down about 6.5% on the week. we got as low as 99,600 on Bitcoin, and we're just floating above that ether price on the week, 3,300, so down about 12.5% on the week. That's double digit. We got to the 3,100 range. And all this feels bad because we've lost about a trillion dollars in total crypto market cap has ceased.

who are $3.5 trillion. So the question, of course, we have to discuss is the bull market over. And I want to ask you with this context. So some of the charters out there, you know, the cycle charters like Ben Cowan and others, right, they go through and they're like, okay, how does this cycle match previous cycles

that we've seen in crypto? And all of these have tended to be boom-bust four-year cycles. and people like Ben are saying there is a indicator that we're going to bear zone. Anytime Bitcoin drops below the 50-week moving average, that confirms that the top of the cycle is in. That's always previously been the case. And we're back into bear market territory for another 12 months. So that number right now is something like $102,000 for Bitcoin. So if Bitcoin closes multiple weeks, so at least,

two weeks below 102,000, keep in mind that number's ebbing up as well, then previously the bull market would be over. And so I want to ask you maybe this question. Do you think that's still a good indicator? Is 102,000 for Bitcoin still our number? If we drop below that on the two-week period of time, it's over and we can call it quits. Or what's your take on this? I mean, look, I have no idea. I'm in general skeptical of people drawing shapes on charge and telling you that this will definitely happen if this thing happens. I think the track record of people doing that

is very bad. If you remember, Bitcoin spent quite a while under 90K, you know, it came down to 88 during the tariff crisis and when markets were throwing a tantrum over all the stuff that Trump was doing. Now markets, they seem to be defending the 100K level. Obviously, it's psychologically important.

So I can, I can, there's definitely a real thing going on there with that when, markets dip below 100K, it's like, you know, damn, where are they going? My view on all these things is that I don't think anybody really knows. Yeah, you think this is like just horoscopes for crypto bros, looking at the charts and watching channels like this. Pretty much. Pretty much.

I mean, like, on some level, it's obviously true that if prices keep going down, that's a bear market. That's what a fair market means. So just, you know, like some of these things are almost tautologically true is that, oh, if this is like going below the last 50-week average level, then that means prices are going down. Sure. Yes, it does.

It does mean that. Yes, correct. Yeah. But it's like, is this predictive of anything? I don't know that that's true. I mean, again, it's pretty clearly like macros in the driver's seat right now and flows are in the driver's seat. And flows are, like this is an output, not an input into what is actually driving the market.

Right now, almost all the money is chasing AI stocks. Yes. Right? If you just look at the S&P 500, the, there's like 40 stocks that are responsible for almost all the gains in the S&P and they're all AI stocks. And everything else is flat on the year, besides those 41 stocks in the S&P 500. So what that tells you is that like this, this bid that has seemingly dried up for everything besides AI is just everywhere. It's kind of metastasized to the entire market.

So, you know, gold is down massively, crypto is down massively. The only thing that's not down is AI. So I don't know that this, like, drawing a chart and putting some sign waves over like, okay, Bitcoin goes up and down. What are you learning from that other than like, yeah, you know, if Bitcoin keeps going down, it'll probably keep going down. So Haseeb does not believe in a magic number. But let's talk a little bit more about kind of equities and the AI trade that's on right now. So it seems like, and maybe you have an explainer for this, I've got a few ideas here. But it seems like every time equity sneeze, crypto catches a cold.

Okay. So like some of this big drop in crypto happened on Monday and Tuesday of this week. On Tuesday of this week, stocks went lower by about the. 2%. The NASDAQ dropped 2%. And then crypto goes and does like a negative 10% that day. And like in higher in some cases. And, you know, so some people, of course, this is AI stock market jitters. You know, people talking about an AI bubble. You know, we got bulls and bears on both sides of that. Michael Burry is actually, you know, he's the big short guy. He's shorting some AI stocks at this point in time. I don't know if that's signal. Others are warning about an overvalued.

equity market, Goldman Sachs. You know, still, there's a ton of cap-backs going on in AI, of course. You also have the U.S. government shutdown, which is now the longest in history. So we're at above 35 days, and we're at 38 days now in the government shutdown.

And so there's just some jitters in the market around that. But how come any time risk-on assets, AI stocks, catch like a little sniffle, crypto gets walloped? Is that just,

just like we're fragile? Like what's going on? I mean, it's a good question. I don't think I have a clean answer to that. I mean, one thing again is that whatever you're seeing in the AI stocks is happening worse in non-AI stocks because the AI stocks are outperforming. Like they're pulling up the S&P massively. Everything else that's not AI is flat on the year, right? So remember that. So what that's telling you is that, you know, crypto is just outside of the bullseye right now in terms of what this kind of secular trend that markets are following tends to be. You also have this tale of two cities is that all of the bid,

even over the last six months, was mostly concentrated in crypto equities and not in crypto tokens, right? So we were not seeing Bitcoin do crazy rallies. We were seeing Dats do crazy rallies. We were seeing Circle do a crazy rally, but we weren't seeing it happening on the crypto native side quite as much. So, now, look, I think it's pretty hard to come up with a theory for this. It's more of a description of reality

than it is a prediction of reality. I suspect that at some point that is going to change, but it may not change until after we see some air let out of the AI bubble. So, you know, is it a bubble? Is it not very clearly, like historical earnings are overstretched, right? Like the fact that everything else is flat, that's non-AI and AI companies are trading at massive multiples. Like the revenue growth is happening.

You can see it in Open AI. You can see it in Anthropic. They're making money. there's a lot of demand for this stuff. These are the fastest growing consumer apps in history. Those things are all definitely true. So in that sense, is it a bubble, is it not? It's a bubble in the sense that clearly people think

that more people are going to come in to buy, right? People think that these numbers are going to keep going up, and a lot of things are trading on optimism. That doesn't mean that optimism is unearned. That optimism is very warranted. I think it's pretty clear to everybody that AI is the most transformative technology of this decade. But if you see risk off happening in the stock market,

yeah, people are going to risk off even more in crypto. And the thing to remember, 1010, why did 1010 happen? 1010 happened also because crypto trades 24-7, 365, right? So when Trump was announcing that he's going to tariff China 100% or whatever it was on a Friday evening, and there's nothing you can sell, markets are closed, there's absolutely no liquidity you can raise, the only place for markets to express their panic is in crypto.

So oftentimes what I think you see here is that markets in crypto are selling off because they're the only thing that you can get liquidity on at the time when the market wants to ingest some fear. So, you know, what does this tell you for the future? I don't know. I do think that probably it's going to remain pretty rocky for a while. But all market, like every bull market you've ever seen in crypto had a lot of pit stops along the way If you remember the 2021 cycle, it was kind of this dual peak cycle where Bitcoin went up to 60,

drew down really, really aggressively, and then about nine months later, it came back and Bitcoin hit 60 again. So it's not uncommon in these longer cycles that you're going to get peaks and troughs of sentiment, peaks and troughs of confidence. And you kind of got to shake people out. So this whole, you know, what happened on 1010 and also what happened over this week has really been a shakeout of leverage. And usually those are healthy. That's how markets can find a bottom and then have a spot-driven rebound. We maybe are starting to see that spot-driven rebound a little bit. Bitcoin bottomed at like it was like 98K. Ethereum hit even lower prices. It might not be the bottom. You don't know. But from a secular perspective, it was fine. Like fundamentals are good.

You know, if you rewind back the clock to what 2021 was like, 2022, when everything was overstretched, everything was insanely leveraged, right? There was so much hubris and stupidity and nonsense in the market that was just getting walloped. It's actually not what the market today looks like, even the de-leveraging that happened on 10-10. It was like, okay, well, nobody really did anything wrong.

It's not like, wow, the industry was so foolish. I can't believe that we were bullish on Ethereum and Bitcoin and stablecoins and DeFi and Perp-Exes. No, actually, all this stuff is correct. You know, hyperliquid is still a huge exchange, making a lot of money. stable coins are still growing like crazy there's still huge volumes.

Everything fundamentally about crypto is correct is just the bid's not there. Yeah, that's the thing. This cycle can't be over because we haven't gotten our super villains yet. There's no SBF or Alex Machinsky screwing us over. There are a few other reasons

I want to run by you for why every time equity sell off, crypto sells off harder. One is just the basic idea that there's much more leverage in the system with crypto, at least kind of on the surface layer. So this is a Kobesi letter saying, what is happening in crypto right now, even though

the fundamentals are strong, what's going on? And the answer here is leverage, basically. Crypto adoption is at record highs. Deregulation is in full swing. Technology is advancing rapidly. Those are all those strong fundamentals. However, leverage is at unprecedented levels, which is amplifying moves in the market, such as the October 10th, the 10-10 move. So this is just making the case that crypto has more leverage in it. You mentioned the success of purpose exchanges like hyperliquid. Well, that's a leverage-based exchange, of course. Do you think we're just like we have a higher amplitude of moves directionally just because crypto has more leverage, trades 24-7, that sort of thing versus stocks?

Possibly. I mean, look, it's not obviously to me that crypto is more leverage than any equivalent market, but it's very leverage for being so volatile, right? And that's that like really the risk of that leverage is higher than it would be for in stock market, obviously, because it's just way higher of all. It is true that open interest in crypto has dramatically grown over the last few years. Even though trading volumes are not as high as they were at all-time highs, the open interest is higher than it was during previous market booms. So that's nominally true in terms of the amount of leverage.

But, you know, is it enough to be able to attribute this to just saying, well, you know, things are more leverage. That's why things are down so much. I don't know. Again, this feels like too simplistic of an explanation because things can go up when they're leveraged. They can go down with their leverage. Leverage amplifies moves, but it doesn't explain the sign.

Let me give you another, I guess, narrative explanation for why crypto has moved like this and why maybe it's been somewhat stagnant on the air, right? So you mentioned a gold run up, you know, gold's up 50%, 60%. What about Bitcoin? What about our debasement? trade. I thought that should be up too, right? So this is Jordi Vassir. He wrote an article called Bitcoin's Silent IPO. I don't know if you had a chance to read this. Let me give you the

TLDR summary. Okay, you didn't read it. Okay. So basically, he makes the analog. He says, I used to work in kind of the IPO market. I've seen how equity IPOs kind of work. And we're seeing Bitcoin's silent IPO here. And he's basically making the case that the early Bitcoin believers, you know, the cypherpunks that invested in Bitcoin in the first decade. They're rich, you know. And so this is kind of now that Bitcoin has its ETF moment, BlackRock, et cetera, they are not in a panicked way, but they are slowly diversifying out of Bitcoin. It's kind of Bitcoin's IPO moment, right? So their dollar cost averaging out. You saw it was a month or two ago, Galaxy Digital announced a $9 billion

dollar Bitcoin sale. This is for a single customer. Some Bitcoin whale out there for $9 billion is selling Bitcoin. Imagine that they still have more Bitcoin behind that, but they're just kind of diversifying out. And he says, this is not a bear market because we are getting the institutional buyers in retail. They're slowly and steadily stepping in, just not aggressively, just not emotionally.

And this is the exact pattern you might see after a major IPO, right? So a major IPO, all the early believers, all the employees in an equity IPO, they're exchanging their shares, the public. They're selling, maybe not all, but a portion when the lockup periods expire. And the stock really doesn't crash in those scenarios. It just kind of consolidates into this accumulation mode. This is just a changing of the guard, he says. What do you think of that as the explainer for why Bitcoin is flat in 2025?

I think that's a really strong thesis. I think that resonates quite a bit. Like, yeah, an IPO is a way to change, like to turnover ownership of something, right? It goes from private hands into public hands. And I think that's a good analogy for what's happening with all of crypto is that there is a broader set of institutional buyers who are now coming in

or buying the Bitcoin ETF, or buying the E3TF, who are adopting the story. And so, like, the thing that does need to happen at some point is like that turnover needs to be complete. Is the people who got in crypto early, they made their money, they were right, they were vindicated, and they, and the process of turning over those coins, putting them in the hands of Black Rock out of the hands of the early OGs, it takes some time, takes some time to get absorbed. But eventually those orgies are done.

They're done diversifying. They're still going to own some Bitcoin, but they're not going to be balls along Bitcoin and have it the only thing in their portfolio, basically, or have it dwarf everything else that they own. And once they're done, the market can keep on the march of, like, you know, we have to realize BlackRock is an early adopter on Wall Street, right? All these people we're talking about right now, like Bitcoin, it just got cool to own Bitcoin 10 minutes ago.

There's so much more capital that is still not ready to put their toes into the water. There's still so many people who are, I mean, look, I talked to a lot of LPs, a lot of investor, like institutional investors into crypto. You know, what Dragonfly our fund represents is one of those ways in which those kinds of people can dip their toes into crypto. And still so many of those institutions, you know, there's like old crumudgeonly people on the boards or on the investment committees or just like, I don't know about this crypto thing.

You know, isn't this just a sad? Is this really safe enough for us to invest in? Maybe in five years, right? Which means like in five years, those people are going to retire, they're going to get off the board. Or they're just going to say, okay, fine. I guess we can finally buy some crypto. there's so much stuff like that out in the world

that for at least Bitcoin, like I sleep very soundly at night that Bitcoin is going to be worth a lot more in the future just because it's kind of an inevitable march of people just saying like, all right, fuck it. Like that's kind of what happened to BlackRock. They eventually were like, all right, fuck it, let's just make a product and see what happens.

And every single one of these groups, like it's not like they were chomping at the bit to buy Bitcoin, it's that they gave up in saying no, no, no, no, no. And then eventually it's like, all right, fine. We'll buy some Bitcoin. A see, but let me give you a darker theory as to why we might be week right now.

You ready for this? And that is actually what you called 10-10. So that was that liquidation, major liquidation event on October 10th of this year, like $20 to $30 billion in liquidation in one single day, largest we've ever seen in crypto, that there are still some dead bodies out there that we don't know about that are waiting to float to the surface. And one, I guess, kind of scare maybe for some under this theory is we saw a quote unquote

defy protocol. We'll explain exactly what that means called stream finance. It collapsed this week. Okay. So they announced this on Twitter yesterday. An external fund manager overseeing stream finance funds disclosed the loss of approximately 93 million in streamed fund assets. So what is stream exactly?

Well, they are a recursive looping yield focus defy platform. my take on what stream actually is is it's kind of like a hedge fund almost posing as defy so they got their stable coin type thing called xUSD this collapsed by the way down to like i don't know 50 cents or below on the back of this but it reminds me a little bit in terms of mechanics at celsius back in the day which is you you basically put some funds whether it's a stable coin or something into a black box you give them your money they give you juiced yield in returns. I think it's like 10 to 15% yield in return.

We all pretended to defy because it's, you know, this says defy on the website and they are deploying these funds into yield strategies into some risky shit, to be honest, right? Into God knows what. They don't tell you what they're doing.

They don't, and you don't know it. And it seems like a stable coin, but it's really like kind of a, they're trying to be a delta neutral fund, but they're not doing the Athena thing like the way they should be. And so it's kind of janky and it's out on the risk curve.

Anyway, that blew up, okay? And there were some downstream effects in the rest of DFIs. You had some morpho volts that were temporarily kind of frozen. They were illiquid. I think that's since been somewhat resolved. But this was like $100 million or so

in that range. But this is a body that floated to the surface. And some of the sell-off this week, I got to say, has not felt organic. And that's maybe just a vibe from my side. But I'm just like looking at these massive moves. And it's just like, is somebody getting margin called right now? Is some under collateralized hedge fund borrower that we don't know about somebody that's out there just in the process of getting blown up?

That's a bit conspiracy theory. And I don't want to name names as to who this might be, right? Because you want to cause a run on anything. But what do you think? Like, could this be a possibility here that there's a three hours capital somewhere out there that's really in trouble? So I will say, I think the truth is always a little bit of something in the middle in that it's almost certainly true that probably most the big market makers face losses on 1010 because it was just a brutal day, tons of dislocations, you know, shorts blowing out or getting ADLs or whatever. So obviously people lost money on 1010. It's very hard to make money on 1010.

Now that being said, and there's definitely people who died. And we know people who died. You know, so obviously this group, stream finance or whatever, I'd literally never even heard of them until hearing that they went under. So there's a lot of small fry doing random.

You don't want to know the name of the thing that blows up because if you know the name, it's probably really big. So there's a lot of things that you've never heard of that have blown up. There's a lot of market makers on hyperliquid that people were, like you can actually see their accounts on hyperliquid. And so there were a lot of hyperliquid market makers that people knew blew up had, you know,

double digit million dollar losses. But probably the big guys, my guess is that almost all the big guys lost money, but they're fine, right? Like the amount of credit and the amount of leverage that you can take on in this industry is a lot less than what it was in 2021, 2022. to. And people forget that, that there was a huge credit crunch that happened after the collapse of BlockFi and Celsius and Genesis and FTCS, and it never fully recovered. We do not have as much credit in this industry as we used to. And it is harder to take on

leverage or like just, just debt to the same degree. So now that does mean that there's, you know, like when you get liquidated on an exchange, you have the collateral. When Three Arrows was borrowing, they didn't have the collateral. That's a different story. It's a different kind of borrowing. So like the amount of credit, like actual credit that's been extended in this industry has decreased a lot since 2022. So it's one of the reasons I don't worry as much. Now, that being said, you are absolutely right that when you have losses across the industry, people are going to raise their hand and say, I'm okay, no matter how okay they are. Right. So there's a lot of people who are trying to paper over the loss. We'll try to hope they can make it back.

We'll try to like gracefully unwind their loans. We'll try to, you know, slowly get out of their positions and they don't want to draw attention to themselves and say, hey, we blew a gigantic hole in size of the ship, FYI, everybody, it was us. Oh, yeah. So you should expect that you're not going to hear about what actually happened for quite a while,

if ever. And to be clear, that also happens in traditional finance. It's not like a crypto-only thing. So my guess is that people got hurt. A lot of people got hurt. Some people died. Probably it's not the big guys because it's just hard for big guys to die.

That's why they're big. And the system is not as fragile as it was in 2022 because of the fact that there's not as much credit in the industry as there used to be. That's comforting. So where does this leave you with respect to the cycle then? So that question is, is the cycle over? We've talked about maybe some reasons it is,

some reasons it's not. But what's your personal take on this? Yeah. Look, if you're in exotic strategies, like, you know, these are exotic strategies. When you have a volatility blow up, exotic strategies get hit because most exotic strategies are short volatility. If you're leveraged looping, doing some, like,

what that means is that if the asset price moves against you, you will get blown out, you will get liquidated, you will lose a lot of money. So that's what happened to all these levered looping strategies. So it's very unsurprising that the people you are hearing about are people who are doing some kind of levered looping thing. You know, that's why it's risky. because if the underlying moves a lot, the thing explodes.

What about for the average, you know, ETH Bitcoin holder, kind of, you know, top 10 crypto asset holder? You know, like, how should they be thinking about this? Look, if you're sitting in spot, like, remember 1010? Bitcoin started at, I think it was like 107K and then ended at 103, 102 by the end of, by the time 1010 was over. Yeah.

So if you're sitting in spot, you might not even notice. anything that big of a deal happened, right? Like, Bitcoin's down 3% at the other day. Now, all different story. And clearly that's a result of force selling and margin calls. But my view, by and large, is that this stuff is, de-levergings are ugly. They happen in the course of a cycle. So again, rewind the clock, go back to 2021. There was a lot of deal. There were many moments of force-selling and de-leverging that happened over the course of the entire cycle. even before that second peak. So does this mean that crypto's cooked?

Does this mean the cycle's over? Not necessarily. It could be. I have no idea. But I think it has a lot more to do with macro than it has to do with, oh, there was force selling and therefore, okay, the skeleton. You know, look, we could always get surprised by something

and crypto's full of surprises. But the reality is if you look at like the big things, look at Athena. Athena is the big thing, right? So USGX or whatever was tiny. It's a little, little baby within defy compared to all the other stuff that could go wrong. If Athena is going wrong, you should be terrified if Athena goes wrong. But Athena was fine.

Fina chucked along as usual. And the fact, you know, you talk about is this thing really defy? The advantage of Athena is that everything is transparent. Everything is public. All these dashboards 24-7. You can see the custody. You can see the assets. You can see the P&L.

Whereas with a lot of these things that are, quote, unquote, decentralized, stable, coins, you know, they're not decentralized. They're not stable coins. They're basically someone running Celsius back. I think I'm with you, Haseep. I'm like 50-50 on whether it's over or not. So, but if it is over, then I guess I would say I totally miss the euphoria face that we're supposed to get. Because I didn't feel that at all. We had it for about a month and a half. Yeah, basically like December until mid-January. It was the euphoria. Then it was pulled from us. All right. Well, we'll have to see what the rest of the year, Coming up next, we've got to talk about the Balancer Defi hack, a 120 million exploit, you know, carnage across

Defi. So if Balancer isn't safe, is anything safe? And also, Brian Armstrong, his prediction market fund, all this and more. But before we get there, I want to thank the sponsors that made this possible. Ethereum's Layer 2 universe is exploding with choices. But if you're looking for the best place to park and move your tokens, make your next stop Unichain. First, liquidity. Unichain hosts the most liquid Uniswap V4 deployment on any layer two, giving you deeper pools for flat. ship pairs like ETHUSDC. More liquidity means better prices, less slippage, and smoother swaps, exactly what traders crave.

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You can find out more information by clicking the link in the show notes. All right, Haseep. Let's talk about the balancer hack, $128 million, the biggest defy hack all year. This one felt significant. I think Hasu put it well. Balancer V2, that's the version that was hacked. It was launched in 2021. It's one of the most looked at and old,

forked smart contracts. It's very scary. Every time such an old contract can be exploited, sets Defy adoption back by six to 12 months. That's his take. You could just see, I mean, Balancer V2 was audited by about 10 different auditing firms. It's deployed across, I don't know,

dozens of chains out there, spent an existence for a while. And I thought we had the thing that DeFi protocols are supposed to have, which is Lindy, right? It's been out in the wild for a while. It's been hardened. And yet, this was how.

hacked, we can get into maybe how it was hacked in just a moment, but how significant do you think this hack is? You think Hasu and this account here are overstating it when they say it's setting DFI back six to 12 months? It's definitely setting DFI back. It's a big blow. That being said, it's important to contextualize. So this was Balancer. Balancer is one of the OG Defi protocols. Balancer is not the biggest AMM. You know to swap way, way, way bigger than Balancer. Thank God, right? Yes, yes. And the other thing, of course, is that this is Balancer. V2, the current version of balancers is V3. So most of the TVL

imbalancer is in V3, not in V2. And in V2, the only pool that was vulnerable was the ETH pool. So if you have your native asset in there, and of course this is multi-chain, so any other chain that also deployed the same code, they were also vulnerable. But if you had three assets that were not the native asset of the chain,

that was not vulnerable to this accounting bug. The accounting bug was only in that particular subset of the contract. So I actually didn't realize. Before you get a sensor scale. Yeah. Yeah. It's important to get a sense of scale, right?

Is that this was really bad, but could have been way, way, way, way worse in multiple different ways in terms of being balancer v3 or in terms of being uniswap or other balancer. Now, that being said, with all of that is a big caveat and a sense of framing of the scale of the hack, 100 million dollar hack is terrible.

A lot of people lost a lot of money on these hacks. And of course, it was also cross-chain. So it wasn't just on Ethereum. The other thing, like you see, said, this is a very highly audited contract. Now, that being said, it's an old contract. It's not the one that people recommend that you keep money in, but it's an OG. It's been around for a long time. It's had a lot of eyeballs on it. And that's a big part of the reason why people were so surprised to see this kind of vulnerability in a contract like this. So now, that being said,

if you look at traditional software, if you remember Spectre and Meltdown from, you know, four or five years ago, that was some of the most basic code that exists in all of computing that turned out to have a bug in it, right? That was speculative execution, or speculative decoding that existed in Intel chips, microcode. We saw similar things in JavaScript, right, that had huge vulnerabilities from the same spectrum meltdown bugs. Similar things that we saw with the OpenScel, you know,

and heartworm and all these other bugs. So these things happen. Software is never done. There are always vulnerabilities that show up in any of these things. So I think this is part of the difficulty of defy. Now, if you look at the balancer remediation, I actually felt pretty good about the way in which they approached fixing these bugs.

So one, they did have some white hats, some white hat hackers who went in and were able to secure some of the funds. And some of the chains that were vulnerable, that were vulnerable, they did get freezes of the contracts. And so, for example, bear chain, they froze the chain

and brought it back online after remediating the hack. Same thing happened with Sonic and Nosis. So I think Nosis actually froze all the bridges in and out of Nosis chain in order to remediate the hack. So we did see some recovery of some of the damage here. But the majority of the funds are drawn Ethereum, about 70 million, that stuff is going to be very difficult to recover.

So very unfortunate for the people who had assets exposed there. It just does feel like a setback. This is a moment where we're saying, you know, defy is ready, institutionally ready, basically, and you have even some of the DATs deploying into some of these DFI protocols, not Balancer thankfully, but they're deploying in search of yield

into other DFI protocols. You had Vitalik about two months ago who hasn't said very much about DFI over the years, and he came out with a post talking about low-risk D-Fi and tracking the hacks going down over time. And we're starting to get a sense in 2025 that, hey, defy is now ready

for funds. Because unlike OpenSSL or some debugs you might see in the wild with other code bases, when something goes wrong in a smart contract, right? I mean, there can be hundreds of millions, if not billions of dollars at risk. So it did feel like a setback from that perspective. If not, you know, yeah, you just don't know what else is out there, right? And you've really got a sense of that this week. But let's talk a little bit more about the chain responses, because this is somewhat interesting and caused some back and forth in the community.

So Ethereum, of course, like didn't do anything. That's sort of decentralization. that's the social contract of Ethereum. It kind of like the validators can't intervene and stop transactions. Some of these alternative layer ones like bear chain, they actually had their valid validators halt the network, as you said, right? And I don't know if they did a rollback.

I believe they might have Polygon validators did something similar. So Polygon had 100K stolen from the Balancer V2 hack, and their network validators not only censored the hacks transactions, but they effectively froze the stolen assets in place, right? And you mentioned Sonic and some others. So you can look at this and you can be like,

this is not, these other chains are not decentralized if the validators can sort of freeze things. Or you can look at this and say, no, this is a good rational response for alternative layer ones. This is a feature. The fact that they can, if something really bad happens like a hack, they can freeze funds and restore those to users. And I can imagine if you had money stolen on the chain, you really want that. You really want that feature in place. However, does it not completely undermine the entire immutability, decentralization that's the entire basis for the crypto space?

I know you have some takes on this, but like, what are they? Yeah, so you and I were debating this in the comments on the day that all this came down. So my view is that if you are a young emerging ecosystem, then probably the right answer is just, stop the hack, right? Especially if it's a large hack. I mean, so for different ecosystems, it was a different scale.

Barretain was probably the biggest, especially because for Barretain, they have Balancer built into the protocol itself as a core protocol primitive. So for them, it was the highest stakes, but for Sonic, it was also reasonably significant. I think for the most part, you just want to get to the right answer

and the right answer is that protect your users. I actually agree with you on that, though, Haseeb, I agree with you. If you're a small chain and you can, so if you can restore the funds, then you should. But there's the underlying question of like, you shouldn't be able to restore the funds once you get into like, you know,

if you're fully decentralized, if you're a real layer one. Depends on what the attacker's doing. Depends on how the attacker does it, right? So for a lot of these chains, the attacker was just kind of hanging out. So the attacker, you know, did the balancer hack and then they just had the funds sitting there, right?

If they already bridged out and got out to some other chain, then it's like, it's over. There's obviously nothing you can do, even a rollback is going to be just kind of irrelevant because they bridged out, they've got some other asset. So you've got a double spend issue, right? But if the attacker is just sitting there, they've got their funds there,

and the fund is the native asset. You know, they've stolen, because in all these cases, it was kind of a perfect candidate for this because the fact that the pools that were vulnerable were pools that had the native assets and they had the equivalent of ETH on that particular chain. So it is the one thing that the chain has total authority over.

it's also for whatever reason that the attacker was kind of moving pretty slow I guess on a lot of these chains so if the attacker

had already moved too much or already swapped or already done all the stuff that it's too difficult for you to really track the flow of funds but much like the Dow hack

the Dow hack could only have been reversed on Ethereum back in whatever it was 2016 or whatever it happened because of the fact that the funds were idle the funds were stuck there

for a while and the community could pause and decide what to do with it and of course it caused a fork in all of these things. You had Ethereum classic. That's right.

That's right. Yes. And many people see this as the original sin of Ethereum. You know, I made the point is that every chain has a threshold at which the hack or the attack is so big and so disruptive that it's worth breaking the glass and having a conversation about a hard fork. Like even Bitcoin. If there was some sort of supply overflow thing where you had $100 million rather than $21 million,

like what's going to happen there? 100%. Yes. Instantly. And for Bitcoin, it's actually relatively easy because it's such a, the state of Bitcoin is so simple compared to Ethereum. But even for Ethereum, I think there would be that conversation. If there was inflation bug on Ethereum, then obviously people would move to do a hard fork. But even, let's say that Eiger-Layer got hacked and 5% of all the ETH all of a sudden was stolen and held by one party,

I think there would be a conversation about hard-forking Ethereum. Not even Eiger-Lair. I mean, obviously, the staking layer, if the staking layer of Ethereum, not Eugenlair itself, but like the staking contracts themselves on the beacon chain had a bug and got hacked. Definitely there would be a conversation about a hard fork. And so every chain, the way I put it, like sort of every chain has a price, right? There's a famous old story, I think, by George Bernard Shaw, where he purchased some woman in a hotel and says, excuse me, you seem like maybe a woman at the night.

Would you be willing to sleep with me? And I can't remember what it was. But there's something like, you know, would you be willing to do it for, for, you know, $100,000? And she says, oh, I don't know, maybe. And she says, okay, we'll be willing to do it for $10. And she says, what kind of woman do you take me for? And I said, well, we've already established that. That we're just haggling overpric.

And the same thing is kind of true of blockch is that, like, there is no blockchain that's not willing to fork under any circumstances. Question is, what is the threshold at which you're willing to fork? When you're Ethereum and you are the global commons, you are the global financial layer, you've got tens of billions of dollars, you cannot fork over a $70 million. Heck, it's just totally inappropriate. The sense of scale is wrong.

The amount of disruption you would create by forking would be much more than the value that you would end up protecting. I agree with you, I think, largely on this. I guess, you know, one subtlety I'd add, it does seem like we might be bifurcating into sort of cypherpunk chains that are supposed to be sort of the global value layer

essentially, and they won't fork unless it's existential for their chain. So a Bitcoin and Ethereum are kind of more in that direction. And then everything else. And I worry about the Everything Else category that they just get outcompeted by some of the Tradfai chains that are out there, you know, the tempos of the world that are basically like, hell, they'll for it. If North Korea was on tempo in Stripe, right?

I completely, they would freeze accounts. They would shut things. I'm projecting the chain is not launched yet. But I'm just imagining a world that is more Tradfai and they're just going to lock it down. And then I also see like regulators. I mean, last time you're on, we're talking about Roman Storm, tornado cash, and in his court case, there was like, did Roman Storm have the ability to block North Korea or not? And of course, it's smart contract, is on Ethereum. He doesn't have the ability to decide who he uses it.

Well, won't there be facts and circumstances where regulators will look at this, and they'll take notice of which chains freeze different things or censor transactions, and start holding them accountable for that, or start questioning the level of decentralization, putting them in different categories based on that. Like, I could see this coming up in court cases in the future, and any future Gary Gensler that's out there. I can imagine he's looking at this or could look at this and say, ha ha, they're not truly decentralized. They're in control of the validators to begin with. I think it's, so this is also one of the points of contention that you and I had, which is that I don't think being able to freeze transactions in and of itself is indicative of whether or not

you're decentralized, right? Decentralization means that there are many parties that are working together to run a blockchain. But if those many parties all agree on something, it's obviously possible for many parties to agree. Just because you have many parties doesn't mean that they all disagree with each other. Most of the time they do, but some of the times they do all agree.

And they do all say, you know what, screw this attacker, this was a bug, this is catastrophic for the chain. We all agree. There's thousands of us, and we all agree, we are going to freeze this attacker in place. That is in principle possible. and I think for a system that has, you know, 50 validators, 100 validators,

doesn't sound crazy to me at all, that you could say that ecosystem is decentralized. There's no single actor and no single party that could force them to do something that they don't want to do. But if they do want to do it, then they will, right? So if a regulator comes in and says, okay, there are these 100 validators, you all agreed to go unfreeze this hack and reverse it. Well, I now want you to go and freeze Russia's assets

because I don't like Russia and I want to sanction them, right? I think it's quite plausible that the same ecosystem that said, yes, we're going to freeze the hacker, is going to say, no, screw you. You want us to enforce a sanction against Russia. I don't care. I have no ill will against Russia, right? So the ability for this ecosystem to coordinate

is not the same thing as this ability for this ecosystem to be coerced. Those are two very different things. And I think the decentralization, what you really want from decentralization is not that this ecosystem cannot make decisions. It's that this ecosystem cannot be coerced. Interesting. Yeah, I guess we have to acid test this in the real world,

and this is one of those tests, but there will be others and see how these social contracts and various systems respond to it. Let's talk about another acid test that's happening, which is prediction markets and the Overton window. I think Haseeb you just tweeted before this episode that Polly Market was actually being added to Google, which is amazing of itself. But the news this week was actually,

Brian Armstrong got himself in a little bit of hot water. At least some would say that, at the end of a Coinbase earnings call. So I'm going to just play the clip. This is what Brian Armstrong said. Question on that. I was a little distracted because I was tracking the prediction market about what Coinbase will say on their next earnings call. And I just want to add here the words Bitcoin, Ethereum,

blockchain, staking, and Web 3 to make sure we get those in before the end of the call. All right. So he's just adding the words Bitcoin, Ethereum, blockchain staking in order, I suppose, to satisfy some prediction market that was out there. There's about $90,000 in wagers on polymarket and Kulshi that he would say that at some point during the earnings call. And so he said it at the end of the earnings call. Obviously not organic. The market resolved in favor of those who bet this. And Brian Armstrong tweeted later, this was fun. It happened spontaneously. When someone on our team dropped a link in the chat.

I felt, there seemed to be two camps responding to this. There was a negative camp, so this is a take from Hasu. Not sure if Brian thought he was helping anyone here, but the opposite feels true. The subjects of our bet are becoming self-aware and actively changing their behavior. That's ironically a failure of prediction markets. So he's basically saying, like, you know, if a subject that is involved in a prediction market is influencing the outcome, it kind of breaks the market. And so maybe Brian shouldn't have done this.

This is Adam Cochran. He says, if I were the CEO of an exchange with a CFTC regulated product, let's remember these polymarket prediction markets seem to be under the purview of the CFTC, I would simply not purposefully manipulate the outcome states of a prediction market on other CFTC regulated exchanges during the earnings call and then post it to Twitter. Okay, this is Kyla Scanlon. She's sort of outside of crypto, but observes it. He knowingly influenced a market outcome with insider control.

which is inconsistent with fair and orderly markets under the law. If we still have those, the CFTC could go after him for attempted market manipulation. This is Jeff Dorman. I'm tired of dumping on clown base. Wow, that's a lot. But you need your head exam, and if you think it's cute or clever or savvy, that the CEO of the biggest company in this industry openly manipulated a market. So people saying he openly manipulated a CFTC regulated market.

Vitalik on the other side weighed in and says, I think Brian was just having fun and I want to be part of a fun-loving society. Others have said this was bound to happen sooner or later. Glad Coinbase made the move. Also, there was a take basically like, if the market could be manipulated this easily with someone saying a few words,

then obviously the market itself was broken, no harm, no foul. It's not like Brian was in the market with insider information betting on it. What's your take on this? So I'm not an expert on CFTC regulations or any of this stuff. I thought it was funny. I thought it was a viral moment.

It clearly brought a lot of attention to these mentioned markets, which I think is in a way like kind of the best marketing for these kinds of products is just, unless people don't even know that this exists, that there's like a whole, you know, a bunch of people in the corner, like, you know, sort of throwing dice and gambling on what CEO is going to say or what a politician is going to say during their speeches. So I think that alone was tremendous marketing for polymarket,

regardless of how the individual betters in that market ended up faring. I think this is fair game. Like, I think it's one thing to be betting in the market yourself. I think that would be much more of the failure mode of markets. So say Brian Armstrong personally had some sort of bet in that exact market that he was going to say to his words. If he bet yes on every market and then said yes, all those words, that is the actual failure mode. The market becoming quote unquote self-aware

and or affecting the underlying market, that is actually not a failure mode of prediction markets. That's how they're supposed to work. Doesn't that just get priced in as well? People are just like... Yeah, exactly. It doesn't actually affect liquidity. It affects odds, right? Because now you have to take probability that,

okay, what's the odds that these markets are so low that this guy is just going to say, oh, well, great, I'll say all these things. Exactly. Or the odds get too high, and this person looks at the market and says, oh, everyone thinks I'm going to say X, I will play the game of not saying X in order to fuck over these guys in the market.

So if a market becomes too strong one way or another, then it sort of equilibriates and says, okay, now it's too high, this person is going to troll us. But if a market's like 70%, then this person is not going to troll you, right? Nothing about this is incompatible with markets being able to price risks. Totally you can price risk based on that.

So it's in the same way, like, look, if you bid up the price of a stock too much, then the incentive from the company is going to be to sell stock into you and to just hit the ATM and start dumping stock, which is why a stock can never run up too much relative to fundamentals, right? Is this market manipulation? No.

That's markets working and pricing things the way that they're supposed to. So I think this is, you know, obviously you could scream and say, oh my God, how could he do this? This is terrible. Isn't not what the market is meant to capture human behavior? But the market is meant to capture human behavior. That's what the market is.

It's a human behavior market. and the human changing their behavior in response to the market is no different from a stock changing its behavior in response to you buying it. I think I agree with this. And my big hope is that society does shift the Overton window to just see that this is not market manipulation. If somebody says a few words,

it's just the market can self-correct. It's obviously a stupid market. I don't think this CFBC cares that much about protecting the integrity of stupid markets. Yeah, exactly. All right, we got a few more things to cover coming up. Ethereum layer two is they are scaling 20,000, transactions per second. I want to check in with Haseeb, and if he thinks that's real. Also,

maybe it's a vanity metric, real world assets. So there's been $1.5 billion of BlackRock's Biddle Fund that has moved from Ethereum to other chains. What's going on here? We'll talk about all that and more. But before we do, want to thank the sponsors that made this episode possible. Introducing Frax USD, the genius aligned digital dollar from Frax. It's secure, stable, and fully backed by institutional grade real world assets, custody by BlackRock, Superstate, and Fidelity. It's always redeemable one-to-one, transparently audited, and built for payments, defy, and banking. The best of all worlds. At the core is FraxNet, an on-chain fintech platform built to align with emerging U.S. regulatory frameworks,

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This is the Ethereum ecosystem's transactions per second. Something historically Ethereum has been weak on for L2s in particular. You can see this number. It's like oscillating doing 7,000 and 8,000 right now. 24-hour peak, 16,000 transactions per second. Okay, how did this happen? That wasn't happening a couple of weeks ago. Much of this has been the lighter chain,

which is this perps exchange that is an app-specific layer-to product market-fit. We should be clear. Almost all of it is later. Almost all of it. Yeah, 95% let's say of this, you know, throughput. And so, Heath Bulls are saying, yeah, it's a ZK roll-up, right? Somebody's finally done the thing that's hard and put this on Ethereum. Others are saying, well, that's not an apples-to-apples comparison with EVMs.

In fact, you shouldn't even aggregate the Ethereum ecosystem, transactions per second together because it's not synchronous, it's not composable, it's not the same as being on the Ethereum L1, L2 guarantees are not as strong. What's your take on all of this around? The message I think Eith Bulls want to send is ETH is scaling. The L2 roadmap seems to be working. Now we're in this period where it's about to go exponential with ZK roll-ups and such. And I think Eith Bears want to say, look, guys, these are just a whole bunch of different chains.

lighters doing most of the work here, like, chill? I don't even... I just genuinely don't care about this debate. This feels like kind of stupid, like, playground. Why, you don't care about transactions per second anymore? Is that not a... It's a vanity stuff? Yeah, it is kind of a vanity metric,

especially if you're aggregating, like, lighter trades. Yeah. As, like, next to base transactions, like, they're obviously very different in kind. But then second, like, you know, I mean, it's good to see that this number is going up, but like, it's not really something you can compare directly with another chain, right? Like, aggregating all of the Ethereum transactions and comparing them to Salinas transactions, it's just kind of, they're two

different things, you know, and it's good that they're both going up, but like you want to sort of look at one in isolation and that it's been going up and like, that's good. But saying like, oh, well, ours is bigger than yours. It's just kind of like. But hasn't that been the whole thing with, you know, why do things outside? of Ethereum. Why have layer 2s? It's because it's not scaling. Why have Salana? Why have something like Monad? Yeah, so the LTs are scaling. It's

great. It's great that the L2s are scaling. I'm just like, you know, I don't even know how to describe my problem with this. It's just like a pissing contest problem? Is that you to think? It's like, it's like not even the right pissing contest to be doing.

Like, this is such a not useful metric for anything. like, you know, adding together all the TPS across all the L2s, it's like, okay, did we solve the problem? Did we build a better blockchain? Did we actually give people financial freedom? Did we create better applications? Did we get more stable coins?

Did we onboard more users? Like those are the things that actually matter. If you are comparing TPS like between two chains with respect to their max throughput, then, okay, that's a useful. technological comparison. But just adding, like, look, if you add all these, you know, 45 chains, we have this number and you have that number and ours is better than yours, it's just like, what does that map onto in any way that matters?

What do you think of the lighter construction, though? That seems to be somewhat of a breakthrough, right? Weirdness is a lighter. I think lighter is great. Lighter is awesome. Very bullish lighter. I think it has nothing to do with this conversation. It is completely orthogonal from whether or not Ethereum is doing a good job.

Well, let's talk about another metric. and I want to get your take on this. So one thing people have been following is real world assets this year, okay, in particular. We got BlackRock on chain, BlackRock, the Biddle Fund, it's a money market fund, they're putting treasuries on chain. Isn't this amazing? The bulk of that has been on Ethereum so far, about, you know, $2 billion or so, two to three billion or so.

What we've seen in the last, I don't know, week or two has been actually the migration of about 1.5 billion of that Biddle fund onto Aptos, Polygon, and Avalanche. And so people are asking the question, like are the RWA stats, right? The amount of tokenized treasuries, let's say, that I have on chain, or even for that matter, stable coins or other things. Is that all vanity metric? Like, why isn't this sticky? It seems to be the capital is flowing to other chains, maybe part of BD deals.

We don't really know. But like, it's not sticky on Ethereum right now. Do you have a take on this? So I didn't know that in the last month and a half, so much of Biddle has moved to these other chains. I mean, the story makes sense that there's not a lot of interaction going on with these assets right now. I mean, you know, you have to be KYC to hold Biddle.

It's not really deeply integrated into D-FI the same way that something like Athena is. So, well, in this case, actually, this was kind of, I believe it's, you know, Athena uses Biddle as collateral for its staple. Yeah, the USG-T-B, right, right, right. Yeah, so this is actually Athena part of the, you know, driving force behind moving this. I believe. Oh, this is Athena's collateral. So does that mean that Athena's collateral

has moved from Ethereum to Aptos Polygon Avalanche? Some of it, at least. Maybe not all of it. I'm not clear, but, you know, I think much of this move was driven by Athena. It is still Biddle, but Athena is kind of... Oh, I see, I see.

Okay, now I understand. Got it. So U.S.D.T.B, which is the Athena asset that is backed by these block rock treasuries, that is still mostly circulating on Ethereum. But the collateral backing it has moved to Aptos Polygon Avalanche, et cetera. Okay, I see. Got it.

So, I mean, my assumption here is that, like, the main thing that matters is the claim. USTB is a claim on these treasuries. The treasuries themselves, like, that's just an accounting record, right? Right. It's kind of like the DTCC. If I told you the DTCC moved its servers to, you know, Atlanta or to, you know, I don't know, to Russia or something, it mostly doesn't matter. What matters is, you know, where is the New York Stock Exchange?

That's what really matters, right? The New York Stock Exchange is in New York. That's why it's called the New York Stock Exchange. Like where all the companies that are coming and going and actually getting traded and where all the traders live, the answer is they live where the money is and the money's in New York. So I think that feels to me like more of a detail if the USDTB is still sitting mostly on Ethereum. But it's a question because, like, maybe a lot of the,

these real world asset metrics than in terms of the amount of TVL and RWA's and Biddlefund or whatever I have on my chain, maybe that's all just a vanity metric because it's not like it's tied into the rest of the network effects of the underlying chain, right? So, I mean, should we even be using it? It's a decent point. I think it both is and isn't. Like, it clearly maps onto something real, right? If you see RWAs go from $2 billion to $10 billion to $30 billion to $50,000, something real is

happening there, something important that you should be paying attention to a happening there. So in that sense, it's not just a vanity metric. That being said, you know, if you are, if it's sort of like the front end is USTTB and the back end is the Biddle Fund, and the Biddle Fund is moving to this change of this chain, this chain, because like, you know, the treasuries themselves, they don't move. They don't need to get touched. So, like, they just sit there as the backing collateral for this thing, basically forever that's getting shoved around. It's a little bit like, you know, the treasuries that circle holds. Where does it hold the treasuries? The answer is, okay, it holds them with, you know, black,

Rock and with B.N.Y. Melon and with, you know, these people and those people, it doesn't really matter that much as long as their treasuries, right? I think that's largely true. So I think the direction of travel is, is relevant and important. But, you know, if it moves from Ethereum to this to that, probably doesn't make a huge difference. As Sieb, as we close out this week, I want to get your perspective on one more thing. So this is definitely, it's felt like recently this has been sort of an institutional cycle, right? And the first decade was very much not that. Larry Think has changed his mind on crypto.

Now this week, I'll actually play the clip, we have Jamie Diamond admitting he was wrong and that crypto is real. This is him. He was skeptical of crypto at one point. I've gotten away with no damage so far. Crypto is real. It can mean blockchain, stable coins. You have a JPMorgan deposit coin.

You can move stuff. Smart contracts are real. All that stuff is real. It will be used by all of us to facilitate, you know, better transactions and customers. I agree with them. It's all real. Okay, so that's Jamie Diamond, right? But I feel like inside of crypto is kind of two wolves here, okay?

Because we've been wanting... We've been wanting Jamie Diamond's approval for a very long time. And now we have it. But something about that is making some people bearish. So this is actually a clip from Peter Thiel this week. And he was talking to Andrew Ross Sorkin. I'm not going to play the clip. I'll give you some of the quotes.

Andrew asked him, Teal, have you sold any of your Bitcoin? He said, I still hold some. I didn't buy as much as I should have, but I'm not sure it's going to go up dramatically from here. We got the ETF edition, and I don't know who else buys it quickly from here. I have a small position. It probably can still go up some, but it's going to be a volatile, bumpy ride. He says he has two reasons for this, dual reasons. One, the ideological decentralized future of computing that I really do believe would be better,

and it seemed like the perfect vehicle for that for such a long time. but he's much less convinced of that now, that ideological future. Maybe Larry Fink, with the BlackRock ETF, surrendered to the ESG forces, or maybe Bitcoin's been co-opted by them, and I worry more, it's the latter. It's the idea that we've wanted institutional adoption, but we don't necessarily want institutional control. And now Peter Thiel is saying, this is like a BlackRock coin, and he's pointing to Bitcoin and saying it's being co-opted.

What's your take on this? So, I mean, it's a little vague of like what exactly is BlackRock co-opting here. What are they doing to Bitcoin to corrupt it or make it more ESG? Yeah, it's a little, it's a little vibey. I think also Peter Thiel, you can tell he's got a little bit off the deep end. He's like ranting about Antichrist and, you know, at the end of the world and that AI, you know, it's just, it's just like if you look at what they do and not what they say, right? You look at Founders Fund. Founders Fund is dumping tons of money into crypto projects.

They are full porting into tons and tons of deals, investing a ton of this industry. So I think, now, Peter is not at the helm of that. He's not the one making the decisions at Founders Fund on a day-to-day basis. Most of those decisions are being made by people who are deeper in the industry than Peter is. I'd say, look, it's like what we talked about at the opening of the show. As crypto matures, the early adopters give way to the middle adopters and the late adopters. Peter Thiel was very much an early adopter, right? A lot of the people who believed in Bitcoin early

and a lot of the quote unquote institutional capital that came in in the early days was Silicon Valley Capital. Silicon Valley Capital is small relative to Wall Street Capital. And that is this changing of the guard that is happening now, that it's going from Peter Thiel

to Larry Fink and Jamie Diamond. Now, that is part of maturing. You were not going to keep Peter Thiel the entire time. Peter Thiel, you know, originally he was on the board of Facebook. Now he talks about how Facebook is a force for evil, right? He was one of the very first checks into Facebook. In the same way, he was early Bitcoin adopter, believe he was in the cyphepunk mission.

Now he says, oh, Black Rock is the enemy and they're co-opting Bitcoin or whatever. I think you're going to see this. This is part of growing up. This is part of winning. Is that the crazies who once embraced you are now saying you're not crazy enough. So I don't think this is anything to be alarmed about.

I don't think it's really indicative of anything besides the fact that Bitcoin is now graduated. Well said. I think that's the theme of the cycle. Haseeb, thank you so much for filling in for David. Backed by popular demand. Everyone loves you. Appreciate you coming on. Got to end with this. Of course, you guys know, crypto is risky. You could lose what you put in. None of this has been financial advice. Neither Hasib nor I know what's happening with the cycle. But we are headed west.

This is the frontier. It's not for everyone. But we're glad you're with us on the bankless journey. Thanks a lot.