Bankless - ROLLUP: Celsius CEO Arrested & ETH CC Conference Recap

Starting point is 00:00:00 And here we are. Not just, just over halfway through 2023. Kwan is in jail in Montenegro waiting to be extradited to the United States. Sam Bankman-Frit is under house arrest. Can only assume he's going to jail. Mishinsky's going to jail. Sousu and Kyle Davies are still on the run, but they're completely ostracized from the West. They can't step anywhere outside of Dubai or otherwise they would be arrested. So that box is not yet checked.

Starting point is 00:00:20 However, with all the other boxes checked and the complete fall from grace that is three-o capital, and probably the very likely cases and, efforts going into actually grabbing those guys that's probably going on behind the scenes that we don't know about. I say that we have permission to be bullish. Bankless Nation, it is the third Friday of July, and it is time for what, David? It's the Bankless Friday weekly roll-up, Brian, where we cover the entire weekly news in crypto, which is always an ambitious endeavor. Yet, we persevere, nonetheless, into the frontier, no matter where we are in the world. As you can tell, I'm in a You're kind of a cramped little.

Starting point is 00:01:01 This is the most cramped podcast recording setup I've ever had. It looks good, actually. So David's in Paris. And by the way, Bankless Nation, this is the first time we were actually doing an episode in three weeks. All right? This is Ryan and Ryan's first podcast in three weeks, which is the longest time that we've gone since starting this podcast. Yeah. So we've had David's been off climbing mountains.

Starting point is 00:01:22 And you've got some more mountains to climb, by the way. I've got one more. So we queued up some podcasts. We put those out for you for the last. And I've been doing some solo episodes. David's got one more mountain. How has it been so far? It's been pretty good.

Starting point is 00:01:36 Let me tell you, the whiplash between being on a mountain and then the next day flying to Paris to go to ECC. So like from mountain to crypto conference in under 24 hours was a lot. I was sitting on the plane. There was a few moments I had like halfway up the mountain. I was like climbing rainier and we were like 12,000 feet with 2,000, 4 feet more to go. and it's pretty exhausted, and I'm like, this is my first vacation. And then I'm like, and that's what you choose to do.

Starting point is 00:02:04 That's what I choose to do. Yeah. And then, and then just a day and a half later, I'm on a flight to go to Paris. And I'm like, 10 days behind on anything crypto related. Like, crypto's a new industry 10 days later. And I was like sitting around. I was like, man, I need to catch up on crypto. What do people do?

Starting point is 00:02:20 How do people consume crypto news? What do they do when they need to catch up on the week? Oh, I can listen to the roll up. I'm listening to the weekly roll-up with you and Anthony. And I was like, oh, this is so useful. Yeah. You know, it is really useful. I mean, bankless, I think for me and for you, David,

Starting point is 00:02:37 has just been about kind of a journey of creating content exploring subjects that we would have wanted to explore otherwise. So it's just kind of a chronicling of that journey. I'm glad you found that roll-up's so useful, David. That's great. That's great to hear no satisfied customer. I was very satisfied. Okay.

Starting point is 00:02:53 So remind people. Anthony did a great job. A huge shout out to Anthony Cizano for tapping in three times over the last like five weeks or so. I mean, he really is the third podcast co-host, even if he doesn't know it. Yeah, he's better than us. Okay, so what are you doing in Paris? You said a crypto conference. What conference is that?

Starting point is 00:03:13 ETHCC, so I'm at the Ethereum Community Conference. So actually, ECC is interesting because it was the super spreader event right before COVID. So it was the last Ethereum conference before we shut down conferences. And then it was also the first conference in 2021 that started things up again. So this is the third ECC since the conference season really got started. Conference season started after like in 2021 where crypto like was dead between 2018 to 2020 from the perception of the outside world to very, very much alive. And so this July, it's always in July. It's always in the same place.

Starting point is 00:03:49 It's always the same org running and programming this thing. And so it always feels like a, you know, one trip around the sun. It's like an arbitrary birthday for all the conference goers out there. It's like, oh, it's a nice landmark every single year. So this is ETHCC number six. This is my third. It was great. It's been great.

Starting point is 00:04:04 I always like to ask because, as you know, I don't go to these things. I only go to like one conference a year, and that is permissionless, which is coming up, by the way. When is that coming? That's the next one you're doing. That's in September. That is next. Permissionless is next. Yeah.

Starting point is 00:04:18 All right. So bankless nation, make sure you grab a ticket if you already haven't. But ETHC is different. My impression, it's very. it's kind of a technical type of track. My favorite question to ask people, and we'll get into some of the events, some of the announcements that were made at ETHCC. But the question right now is because we're still in a bear market.

Starting point is 00:04:37 It's like, what's the vibe among the builders? So how's everyone feeling? Like, what's your assessment? Because you've been to so many ETHC's, how does it compare to previous ones? Yeah, since it's at the same venue every single year, I walked up to the venue this year and there's always people like kind of just hanging out outside. If you don't, people come without tickets. And so they come and just hang out outside.

Starting point is 00:04:59 And then people take a break outside. So there's always people hanging out outside the venue. And I was walking up and I see like the massive people that's always there. And I could just tell us like, oh, thank God, it's a calm one this year. Because last year's was insane. And also it was 100 degrees last year. The year was only 80 in Paris. So I would say it's calm and relentless.

Starting point is 00:05:19 Like the building, the rate of building in Ethereum has always been like, redlining in a good way, like at the highest RPM's possible, whether you're in a bull market or in a bear market that hasn't changed. And specifically the building now, it really feels like people have always been building hard, but rubber is really meeting the pavement here. And I think we'll see that as we go through this weekly roll-up agenda. You can just kind of look around this space, like layer twos are shipping. Like the infrastructure around layer twos are shipping hard. Entire ecosystems are transitioning. everything is all the hard problems if they are not being currently solved they are on the cusp of being solved and that's that's kind of how I would share the sentiment of builders is like

Starting point is 00:06:04 it's real inside of it's been real in the last like six months and like the next six months like a lot of very real stuff hard problems are getting solved I like those words calm but relentless is a really interesting way to describe it and there was a bankless party event as well that we had for for bankless citizens this is a photo from from one of these. So what was the vibe there? Yeah, this is the bankless team. So this is at the end of the party.

Starting point is 00:06:28 We took a team photo. Party was great for all the bankless citizens. Shout out to all the bankless citizens that were out there. I talked to John Ice Cool from the Dow quite a lot there and just a number of other people. You know, while talking to all the bankless citizens, there's like certain archetypes of cross crypto, of course. We know this. The different tribes.

Starting point is 00:06:46 I would call the bankless citizens like the Athenians of crypto. Oh, really? They're like, yeah, they're like, there's a lot of dads. We have a lot of dads. So shout out to all the dads that listen to bank lists. But like, there are a lot of people who really care and really care deeply about crypto. And they're living like, they're like, it's a lawyer with two kids or like, and why I call this the Athenians is in the 300 movie. You have the Spartans and the Athenians talking to each other.

Starting point is 00:07:15 And the Spartan, the Spartan guy who's, I can't remember the name. The guy. The three. just like a warrior society, right? Yeah. And he's asking the Athenians who want to join the fight and is like, what's your profession? And one guy says like, oh, I'm a blacksmith.

Starting point is 00:07:28 And like, oh, what's your profession? It's like, oh, I'm a cobbler and like, oh, what's your profession? I'm a farmer. We're the Athenians. Like, it's this very diverse group of very like humble, focused people who live in a society, live in a collective. And so I just, it's like everyone's just really appreciative of course of like the podcast. But like the diversity, I think diversity is really the word I'm going for.

Starting point is 00:07:50 here is is pretty pretty cool to see i really love that description of bankless uh as the athenians i feel like an athenian myself so uh that's that's really cool to hear david i see a lot of plants at this venue was that intentional david yeah so i wish i could say i picked this place but rachel who is in the middle uh she picked she picked this place uh curator of vibes the the drinks were fantastic uh i had a number of had chinting cocktails so i got i got a little loose uh and because we had this uh beautiful event sponsored by Sega, all of the drinks for the bankless citizens were free. These are the rules.

Starting point is 00:08:22 If you're a bankless citizen, you come to the bankless meetup, you get free drinks. The founder of Sega was there, and we were talking a little bit. Ryan, do you know what an exotic option is? No, that sounds fun. Exotic? Is it fine? Yeah. So it's an option that it's, so you have normal options.

Starting point is 00:08:40 You have vanilla options and you have exotic options. I think the simplest way to explain an exotic option is if this, then that statement's for options. So like conditional. options. So he was like walking me through what like you can do with with exotic options. And so if you are interested in exotic options or you are interested in free drinks, Sega might be the place. So Sega.com. The free drink protocol is the link. Yeah. So thanks for Sega for providing defy exotic options and providing the bankless nation with our liquidity. And the next time the band gets back together, of course, is that permissionless and hope the Athenians, the bankless citizens

Starting point is 00:09:15 show up for that one. Anyone who's listening, of course, you can catch. You can catch that in Austin, Texas, September 11th through 13th, there's a link in the show notes to tap into this. David, do you still have some conference energy in you for the back half this year? Yeah, I actually signed up for one more here at ECC, but we'll talk about that later. So you called ECC a very technical conference and you're totally right. Like for people that like hear me and Ryan talking about conferences and hear the crypto industry is talking about conferences, ECC is like, it's like, you know, 301, 401 kind of hard mode.

Starting point is 00:09:48 like it's like professionals and teams and people coming to like get shit done and definitely that's also true for permissionless but I think if you're looking for a stepping stone into being a conference or and I can't recommend being a conference or enough Ryan. Permissionless is a great place to get started. It's like the vibes last year just like yeah, the Athenians like so many different people, a hodgepodge group of people coming to all coalesce under under permissionless and blockworks just a killer job just like facilitating and organizing and operational. a conference. And so we will have our next bank with meetup for citizens at permissionless.

Starting point is 00:10:22 That is September 13th, 11th through 13th in Austin, Texas. A ton of people. If you only go to one. If you only go to one, is permissionless. And this is me. I only go to one. This is one I go to. Right. See there. From your personal experience. We got a lot to cover this week, David. Man, we're talking about conferences. It's good to catch up with you. But there's so much going on in crypto. I'm glad you stayed up to date on the roll up. But topics of the week, Alex Mishinsky. Remember that guy?

Starting point is 00:10:47 Scammer from Celsius. He was just. charged by the SEC, the CFTC, and the FTC, finally, they are busing the scammers. We'll talk about that. What else we got going on? The ripple case. I know the ripple case happened right after you stopped recording with Anthony last week, and then you added that little bit, but we're going to get the reactions from the ripple case. I actually have a take.

Starting point is 00:11:05 I think ripple actually lost, but crypto still won. So that's my hot take about that. Yeah. And then also I interviewed Hayden Adams about this next announcement. Unswap X. I interviewed him right before ETHCC. So we're going to go into what is Uniswap X. It's a brand new protocol to pair with the Uniswop AMMs.

Starting point is 00:11:24 We also got an L1 that wants to become an L2. And we'll talk about all the ETHCC relevant things along the way as well. Before we get into it, guys, I want to give a shout out to our friends and sponsors over at Stater Protocol. This is a new ETH staking protocol. It is decentralized. One of my favorite things about this is that it is permissionless. So similar to some of the decentralized protocols out there like Rocket, pool. And second, this is, if you're ever looking to run an Ethereum node yourself, okay, this is the

Starting point is 00:11:53 lowest cost way to do that, lowest capital requirements, I should say, way to do that, only for ETH to spin up a stator node, which is really cool. And they also have a pledge to keep staking decentralized on Ethereum, including a self-cap on the amount of ETH that they'll accept in their protocol. So David, I'm going to tell you, I am now in the season where I'm thinking about staking my ETH, okay? I've staked some in the past, but now I'm kind of ratching that up. It feels like a lot of the risk has been boiled out of it. And it's so fantastic to see all of these new staking options. Right now, as far as launch incentives, Stater has a 1.5x staking boost this month that you can be eligible for. And they've got some LP rewards too. So go check them out. And in general,

Starting point is 00:12:38 look for options to stake your Eith. That is the bankless way. That 1.5X boost that then is as you are getting a little bit extra from the SD token paid as incentive. So token incentives is where that boosts come from. If you want that boost, there's a link in the show notes. So you can go and get started with the state. David, let's talk markets, man. It's been too long. Where are we at this week on Bitcoin? I'm not going to get out the words out of my head, but at the bankless meetup where everyone says they just chuckle when we do the prices. But we're doing them anyway. We're doing them anyway. Bitcoin last week, seven days ago, 30,900. It's currently down Thursday. afternoon, 4% to 29,700. So down 4%. Bitcoin down 4% on the week.

Starting point is 00:13:21 I think pricing in the crab market is difficult because it just doesn't change from week to week. It's kind of, I mean, this is basically flat. It's in single digits a lot. Yeah. How about ether? May as well. What's ether on the week? Down 3%. So 1930 to 1890. So down 3%. And then, of course, that I mean the ratio is up. It's up a little bit more than a percent. So you would call it, I would call it a negligible week. This feels like our crab market numbers, right?

Starting point is 00:13:47 You know, 30K and UK. This is big crab markets. Yeah, this is where we are. Crab, by the way, it just is a market that goes back and forth, back and forth. It continues. And that's sort of where we are. Left to right.

Starting point is 00:13:57 Before this influx of new money, which where's it going to come from? I think that's a major theme for us this year in 2023, 2024. But what's the ratio look like? Any change there? up a percent, a little percent and a half. 0.063.

Starting point is 00:14:11 Market cap, I think we're above a trillion. I'm not even going to put that chart up. 1.3 trillion. We're at 1.3. You said 1.3 trillion last week with Sazil. That was the first time we hit 1.3. I mean, that feels big, right? To be above a trillion.

Starting point is 00:14:23 That's another big number for me. Let's talk about tradfod. David, you remember stocks, those things that you could, they're like tokens. They're like ERC 20s, but honestly, like, I've completely forgotten about stocks. I only look at the charts that you. you have pulled up the NASDAQ and the SPY.

Starting point is 00:14:38 Well, look at them. It's a nice looking chart. I'm, I shouldn't have forgotten about stocks. Let me tell you that. They're almost at all time highs. Both in the NASDAQ and the SPY are almost at all time highs, which is around where crypto set it's all time highs. Cryptos set is all time highs at the end of 2021 and going into 2022.

Starting point is 00:14:58 The SPY and NASDAQ did the same. And they are almost back there. You know what gives? Yeah, what gives? Where's our bull market? Where's our all-time highs? You know, and it's funny because people in crypto are bragging about like how, you know, Bitcoin and ether are decoupled from stocks.

Starting point is 00:15:15 Now, great that is. I'm like, but it's decoupled in the wrong direction. That's not fun. That's bad. Yeah. So this is a take from Anthony Sizzano where he said, Max Payne for crypto investors is watching stocks hit all-time highs while Ethan BTC are range-bound, aka Acrab Market.

Starting point is 00:15:31 Ultra Payne is selling crypto for stocks just before crypto starts a new bull market. And like I comment below this and I say, the year is 2019. If you, this is exactly what 2019 was. The equities markets were ripping and crypto was just lagging so hard. And it gave us all so much FOMO. We were so bummed about that. And then, and then, you know, oh, no, it happens in 2020. But man, this, the 2019 to 20, 23 discrepancies, not the, you know what?

Starting point is 00:16:02 It's different for me. I'm feeling zero FOMO. Like, I just, I go ahead. rally stocks. Like, I don't care. Like, we are so well positioned right now in crypto. I'm just like, okay, that's great. Go do your thing. See you later. Now that the discrepancy is there between SPY and NASDAQ all-time highs and crypto is still flat, like that it would be dumb to chase that because the discrepancy is bullish for us for crypto assets. And it makes me- permission to be bullish. Is that the theme for the episode? Do we have permission to be bullish?

Starting point is 00:16:31 That's the theme for the episode. Yes, yes. I put this in the agenda a number of times. There's this is the first of many reasons in this roll-up. Why bankless listeners, I think you have permission to be bullish now. If you are a bullish person on crypto and your friends are saying, ha-ha, you're dumb for being in crypto, you're like, no, you should be buying crypto. You have permission to be bullish about that. Yeah. Like, there's enough evidence there.

Starting point is 00:16:54 I totally agree. I think I am, I've never, should I say, I've never been more confident about crypto. But like, I just feel like we are so well set up. It feels good. The spring is coiling right now. And like it resonates with what I'm seeing here at ECC and all the hard problems about like sequencers and layer twos and ZK stuff. All of that, all the hard problems coming into the fruition being solved. Man, okay.

Starting point is 00:17:19 Again, theme of the episode, it's a reoccurring theme. We'll keep going. Okay. Well, be patient. You have permission to be bullish now. That's what David Hoffman. My co-host says. I could have you back, man.

Starting point is 00:17:28 I like that bull energy. Okay. How about go the protocol? That's GHO. This is AVE. This is a stable coin. that launched on top of AVE. They've hit $4 million in market cap in two days and are probably larger by the time we're

Starting point is 00:17:40 recording this. So a pretty good entry, I would say, into this. Yeah, it's 4.56 right now. Remind us what Go is, David. Yeah, it's pretty similar to die from Maker Debt out, except this is Go from Avey. Pretty similar. If your mental model starts there, you're off to a great start. So Abe, you know, it has assets in its vaults and it has extra.

Starting point is 00:18:04 margin because, you know, people deposit more than they withdraw. And so you can mint go from your deposits into AVE, just like how you can borrow anything else. And so now AVE is a hybrid compound maker protocol, which is bullish, I would say. Yeah, I like it. That's cool. And then also similarly, this is, I would say another theme of what I've noticing is a lot of parallel development. Maker Dow, this is aside from the news of this week, but Maker Dow is doing its Spark protocol, which is Ave for MakerDAO. So AVE's got a stable coin and MakerDAO it's got a lending facility. So all these verticals are growing up.

Starting point is 00:18:40 Well, MakerDAO has always had a lending facility. What do you mean by this? It's different. It's being compartmentalized now. So the stable coin and the lending. Yeah. So it's got an Avey. So AVE is different than MakerDAO.

Starting point is 00:18:53 And now Maker Dow, the system as a vertical, has the credit facility, which is Dye and then the money market facility, which is Avey. There's definitely, this is a. meta pattern. There's definitely a lot of convergence here. Like one thing I'm so much convergence is like there's a ton of convergence on layer two's as a strategy for scaling. That's another big theme that's going on. This was completely unsettled two years ago. Anyway, let's keep going on. Do you do any whale watching, David? I'm talking about crypto whales. All right, well, I don't either. I don't, I feel too jealous of people who I see moving their funds after ICOs after eight years.

Starting point is 00:19:26 I'm like, man, you got to remember. There's still some one address out there. There's still some massive whales out there. This address awakened after eight years and just moved $116 million to Cracken. Oh, our friends and sponsors, Cracken. What other exchange would you use? Of course, it's got to be Cracken to sell your ETH ICO. Imagine investing in the Ethereum ICO and not making a single transaction. And the next thing you do is you send it to Cracken to sell it. I wonder if they lost their private keys and magically found it somehow, which is the best day ever for them. Or they just have the biggest diamond hands of all time. And they just don't even care about defy.

Starting point is 00:20:08 Maybe it's just patience. So you wrote that thing from, I mean, how much was this when they purchased it? 25 cents. 25 to 33 cents. Okay. Well, that was the price of ether, right? So it's 160. At the ICO price.

Starting point is 00:20:20 Yeah. Oh, no, it's 61K worth of ether times, you know, 25 cents, whatever that is. I don't know, $15,000, something like this. So $15,000, okay? You buy this thing, wait eight years, and then you send it to cash out, presumably, at $116 million. Wow, that is a patient investor right there. I can't, they must have had another address. Because they never got themselves like, I don't know, a house, a car.

Starting point is 00:20:54 They never glowed up their life in eight years when they had access to hundreds of millions of dollars multiple times. Patience, who knows? Wow. What are the chances that will listen to this? Listening to this right now and us talk about this individual and they're like, yep, that was me. They're bankless listener. Maybe. David, we got a lot more to talk about.

Starting point is 00:21:16 What else we got coming up next? Coming up next, we got Ms. Chinsky arrested on fraud. But I have a conversation starter that actually starts with a Nick Carter take, which leads into our second reason of the week as to why we're allowed to be bullish. Ripple put the SEC on its heels. And I also have a take as to why Ripple actually lost. But Crypto still won. ECC has brought plenty of announcements and base is open soon to builders.

Starting point is 00:21:39 We're going to talk about that. I interview Jesse Pollock here at ECC, Ryan. We're going to talk all about that and more as soon as we talk to some of these fantastic sponsors that make this show possible, especially Cracken. If you have a dormant ICU that you haven't touched in over eight years, consider using Cracken to get your liquidity. We're going to go hear from them right now. Cracken Pro has easily become the best crypto trading platform in the industry.

Starting point is 00:21:59 The place I use to check the charts and the crypto prices, even when I'm not looking to place a trade. On Cracken Pro, you'll have access to advanced charting tools, real-time market data, and lightning fast trade execution, all inside their spiffy new modular interface. Crackin's new customizable modular layout lets you tailor your trading experience to suit your needs. Pick and choose your favorite modules and place them anywhere you want in your screen.

Starting point is 00:22:20 With Cracken Pro, you have that power. Whether you are a season pro or just starting out, join thousands of traders who trust Cracken Pro for their crypto trading needs. Visit pro.crakken.com to get started today. Enter Mantle, an entire ecosystem dedicated to the adoption of decentralized token-governed technologies. Mantle, formerly known as BitDow, is the first Dow-led Web3 ecosystem, all built on top of Mantle's first core product, the Mantle Network, a brand-new high-performance Ethereum Layer 2 built differently from the other layer 2 that you may be used. familiar with. Mantle asks the question, how would you build a layer two if you had the technology of 2023? Mantle network is a modular layer two built using the OP stack, but uses eigenlayers data

Starting point is 00:23:02 availability solution instead of the expensive Ethereum layer one. Not only does this reduce Mantle network's gas fees by 80% compared to other layer twos, but it also reduces gas fee volatility, providing a more stable foundation for Mantle's applications. The Mantle treasury is one of the biggest Dow-owned treasuries in Defy, which is seeding an ecosystem of projects from all around the Web3 space for Mantle. Mantle already has sub-communities from around Web3 onboarded to help the growth of Mantle, like Game 7 for Web3 Gaming or Edu-Dow for in the world of D-Sai, and buy-bit for TBL and liquidity and on-rats.

Starting point is 00:23:34 So if you want to build on the Mantle network, Mantle is offering a grants program that provides milestone-based funding to promising projects that help expand, secure, and decentralize Mantle. If you want to get started working with the first Dow-led layer-2 ecosystem, check out Mantle at Mantle. XYZ and follow them on Twitter at zero X, X mantle. Alex Wichenski, one of the big, great scammers of 2020, has been arrested on fraud and a bunch of other charges.

Starting point is 00:23:58 Why are you fraud? We're going to talk about all the details of the way he's getting charged. But first, before we get into that conversation, I want to pull out this take from Nick Carter. I want to start this conversation here. Nick Carter, in November of 2022, right after FTX collapsed, he tweeted out, and I remember him talking about this on his podcast. He says, if we can't purge the three-euro's Capital Boys,

Starting point is 00:24:18 SBF and all of his cronies, Mishinsky and Kwan, we don't deserve to move on as an industry. Good people will continue to leave because they can't morally justify participating. I remember reading this take, and I was like, oh, that's bearish. That's going to take so long.

Starting point is 00:24:35 There's so many of them. They're all over the world. And today, Alex Mishinsky is arrested on fraud and all these other charges that we're about to go into. And so the details here, and we're going to come back to Nick Carter's take as the end. The details CEO of Celsius, of course, charged by the Department of Justice lawsuits from the SEC, CFTC, and FTC.

Starting point is 00:24:56 The Department of Justice accused Mishinsky and his cronies of orchestrating a years-long scheme to mislead customers on the market value of the company and interest in the sell token. The SEC has accused him of securities fraud and misleading investors. The CFTC has accused Mishinsky in engaging in a scheme to defraud customers by misrepresenting the safety and profitability of the platform. And the FTC has accused Mishinsky of violating the Federal Trade Commission Act in connection with the marketing and sale of cryptocurrency lending and custody services. The companies have agreed to a judgment of $4.7 billion, which will be suspended to

Starting point is 00:25:30 permit Celsius to return its remaining assets to consumers and bankruptcy proceedings. Basically, like, that is the comprehensive takedown of Alex Wichenski at all. That book is closed. And while we can go into the details of Alex Wichenski, I think we can really just summarize it there. And I kind of want to go back to the Nick Carter take. Three Eros Capital, Alex Michinsky, Doe Kwan, and SPF. And he goes, if you want to pick a bottom, it's when all of Kwan, Bankman, Maczynski,

Starting point is 00:25:59 Livingstone, and Suzu have reached their reckoning. Only then can we recover. And I remember being intimidated by this take. Like, I didn't want to admit that that's true, but because I thought that there was such a crazy hill to climb. And here we are. Not just, just over halfway through 2023. Kwan is in jail in Montenegro, waiting to be.

Starting point is 00:26:17 extradited to the United States. Sam Bankman Fried is under house arrest. I can only assume he's going to jail. Mishinsky's going to jail. Sousu and Kyle Davies are still on the run, but they're completely ostracized from the West. They can't step anywhere outside of Dubai or otherwise they would be arrested. So that box is not yet checked. However, with all the other boxes checked and the complete fall from grace that is three-o-capital and probably the very likely cases and efforts going into actually grabbing those guys as probably going on behind the scenes that we don't know about. I say that we have permission to be bullish. I say those boxes are checked.

Starting point is 00:26:55 Look, it's, it really, I think it showcases the value of the bear market as well. I mean, if prices didn't go down and we didn't see the collapse that we saw, if we just continued to go kind of straight up, then all of these frauds would still be here in this industry. And we'd have that toxic cancer inside of the body and not even know it. I mean, some people would know it. But like, it wouldn't be obvious. This is the value of the minority. They'd be the minority.

Starting point is 00:27:29 We saw the same thing in 2019, too. All of the ideas were tested. We had a whole bunch of ICOs that were just, like, raising ungodly amounts of money for what, like, slides, white papers. Remember it was the white paper season? You just create a white paper, raise $50 million in a token, and then just like exit scan, basically. All of that was lifted during the bear market of 2019, 2018, 2019. So we need these purges.

Starting point is 00:27:58 This is the reason for bear markets and why I'm glad that I've been thankful that we have them. David, Ripple case. We talked about this at the outset of last week's roll up. So of course, XRP, a judge ruled in the U.S. That XRP itself isn't a security, according to the court. We talked about this, including we had Mike Selleig on the episode. Maybe we should just recap this for folks because you weren't here. And then I'd love to get your takes on this in terms of catching up and what you think about it.

Starting point is 00:28:30 So what happened last week that was so momentous. Yeah, so last week, that's course case came out finally. We knew it was coming, but we didn't know the specific dates. And then it finally comes out. And the TLDR of the case is that it's both a win and a loss for both the SEC and Ripple, both sides won and loss, depending on which part of the case that we're talking about. So Mike Selleck says it's a massive win by the Ripple team against the SEC, where Judge Tories clearly affirms that the view that the same crypto asset may be sold

Starting point is 00:29:02 in an investment contract as a standalone good. So what he's saying is there's a line being drawn here. and it's a line that is so elegant to me and it actually really like it restores my faith in the court system to actually methodically and clearly and thoughtfully come to the correct conclusion. So we have sold as an investment contract and then later sold as a standalone good. And those are two different things. And this is why I think this is so elegant. The SEC is charging Ripple and Ripple's loss here is that they are being charged with selling an investment contract of SRP to certain large institutions. under the premise that later, because of the efforts of Ripple, they will be able to sell those

Starting point is 00:29:43 tokens to retail for after price appreciation. That was a security. That was a legal securities offering. That was an investment contract. The actual XRP that is sold later to retail is not a security. So retail did not buy a security. A security was not sold. It was a standalone good. So Ripple, who I think you and I would say is like, I do not agree with the strategy. and ethics, perhaps, of ripple as a product. And they got charged for what I think you and I would agree on is what they ought to have gotten charged for, which is, quote, unquote, dumping on retail. They just did it with these institutional security sales primarily, the primary sales of

Starting point is 00:30:25 XRP, which was an investment contract. But then it's a huge win for crypto because XRP is not a security when retail, the interested retail parties permissionlessly bought that. XRP token of their own volition of their own accord. So the bad guys got got for the right reasons and crypto got protected also for the right reasons. And the XRP and Ripple has to pay fines for all of their legal securities offerings and Gary Gensler has to put his tail between his legs. And we as an industry get to say that all of our crypto assets on secondary sales of programmatic, defy exchanges and also crypto exchanges are not securities. I think it's a three for three.

Starting point is 00:31:06 Ripple goes down and has to pay fees for the things that they did are bad and the sins that they've had. And Gary Gensler has to put his tail between his legs and be like, oh, I got beat by Ripple. And crypto gets to go free saying like none of our things are securities anymore. It's like three for three, dude. It's perfect. Yeah. I think that, I mean, some would argue that, well, you know, let's say, let's assume that ripple and XRP is actually selling vapor, of course, right? So they could continue selling those tokens to the public as long as it's not in an investment contract.

Starting point is 00:31:39 And in fact, they did do that. And that act in itself was not a security. And some people would look at that and say, well, that's a net bad, David, right? Because there's not much of a product here. It's overvalued. These assets aren't worth what people think that they're worth. And so they're selling it. I don't really have a strong comment on that.

Starting point is 00:32:00 What I'm most excited about is the refutation. that, you know, of Gary Gensler and the SEC regimes, their claim that all crypto assets, all tokens are securities. That's what they said. That quite plainly is not true and cannot hold, right? And so that's what was most strongly refuted in this particular case, that that very strong posture of all tokens are securities and therefore must be regulated by the SEC, this was a massive pushback against that.

Starting point is 00:32:30 So, yeah, it's super, I'm very, I'm very, pleased with the outcome of this particular case. There's some takes back and forth about this, but one of the takes was from Gary Gensler. He responded to the Ripple decision. His take was he's disappointed over the treatment of retail investors. Hey, look, guys, I was just trying to protect retail this whole time. I don't see that. I see most of retail being very excited, like the actual crypto investors being very excited about this particular ruling. So I'm not sure who Gary Gensler claims to represent on the retail crypto investing side, but he's just sad for retail, the true losers over this outcome. I don't think Gary Gensler knows a single retail investor. I think he's saying,

Starting point is 00:33:14 oh yeah, the retail investor whispered in my year that they're disappointed. I'm like, well, Gary, the retail investors whispered in my year that they're super happy. So actually, I think retail investors are celebrating. Yeah, I am. By the way, it's not my, like, it's not my opinion that we need no protection for retail investors in this whole, like to the extent there are centralized, you know, parties, then of course we need protection. I mean, we're just celebrating Alex Machinsky and SBF. It was a centralized service that regulators and enforcers of the law are actually prosecuting, and we want that. Like, go, go after the scammers. It's just that when the SEC is taking a posture to completely kill innovation in the space and basically take the

Starting point is 00:34:01 posture that all tokens are securities, that's just like unworkable. Of course they're not all securities, right? And so that's what I'm celebrating mostly here. Here's a comment from Jake Tervinsky that I thought was pretty good. Some financial journalists, I don't know if you've caught up on this, but Matt Levine, for instance, of Bloomberg, we're to post about this, you know, saying that there's still a lot of confusion. This is what Jake Trivinsky is replying to. Some folks read financial journalists are still confused about the Ripple decision. The key holding is that investment contract analysis must focus on transactions, not assets. Tocons are not securities. Transactions in tokens can be depending on the facts and circumstances. He goes on, this is a critical distinction that

Starting point is 00:34:47 the industry has made and the SEC has ignored for years. The fact that a federal district court has explicitly acknowledged its validity is a monumental shift in U.S. crypto regulation and a forceful rejection of the SEC's theory of law. It's particularly important for the SEC's ongoing cases against exchanges that list tokens for trading like Coinbase. Although the court didn't directly say trades on exchange order books aren't security transactions. It's extremely hard to read the decision any other way. Of course, we saw many of the exchanges, including Coinbase, reenable trading for XRP on the back of this. Right. How crazy is that? XRP is once again trading on Coinbase. It's been so long. It's been like two years. So you think this is all permission to be bullish.

Starting point is 00:35:30 I think this counts as two, actually. There's two reasons to be bullish here. Permission, reasons that you can have permission to be bullish. One is that all of the fud and negativity and fear out of all of our assets, our securities, is gone. And that was a decent amount of cell pressure over the last year or so. The regulatory oversight of Gary Gunther is going to label everything as a security. So that's gone. And then, This, that's the first of two. Here's the second one. So this is the take from Collins Belt, and he's a lawyer that we've had on the show before.

Starting point is 00:36:02 He goes, in the long term, absent rulemaking or new laws, there will be an explosion of token sales and distributions similar to what happened in 2019. He's referencing DFI summer after people's fear of the 2018 crackdown resided. Defy summer may look quaint in comparison. We've did that episode, Ryan, about the history of crypto bull markets and what was the common denominator of all crypto bull markets? is there were appetites for tokens. People were hungry for tokens.

Starting point is 00:36:31 Tokens were on the menu. And what Colin is saying is that because of this clarity that we have, we now have the room for an explosion of tokens or sales of distributions of such, similar to what happened in 2019, the precursor to DeFi Summer. After people's fear of the 2018 ICO crackdown resided, Defy Summer may look quaint in comparison.

Starting point is 00:36:52 There's two reasons why you have permission to be bullet. We're at three. Three total? Is that three so far? No, four with the, yes, four. We're at four. Okay. Well, let me ask you. So bullish prices, that kind of thing. I get that. All right. So when I hear where it's like a defy summer may look quaint in comparison, I'm worried that we're not ready for that. Obviously. I could use some more time personally. Okay, but obviously the posture of all tokens are securities. Like that's bad. I reject that. But are we ready? for an explosion of tokens, right? Like, are we smart enough as an industry? And like, will we put in kind of, I don't, I'm just worried about stupid FOMO season coming back. And I remember how much I hated it in 2021 when everything was going off the rails in the same way I hated it in 2017, when it was just animal spirits. Like, are we ready for this level of responsibility? It does feel a little bit too soon, but I don't,

Starting point is 00:37:55 think it might just be happening either way. It kind of felt like the bull market for me ended sooner than I expected it to. I kind of expected it to have six more months in it than it actually did. I think it's fair to say that crypto cycles are moving faster because information is moving faster and we understand cycles faster now. So the bear market ended before you thought it would, but maybe the bull market ended before you thought it would, but the bear market is maybe ending sooner than you thought it would. It might do the same. Yeah. I mean, again, the theme of this episode, is we have permission to be bullish. We're at four.

Starting point is 00:38:28 We have, there's more. There's more in here. We got more. I'm definitely seeing signs. I'm definitely seeing signs. Okay, here's another one. Uniswop Labs. They launched an aggregator for Dex liquidity.

Starting point is 00:38:37 It's called Uniswap X. I know you did an entire episode on this. What's the TLDR for the rollout? The TLDR, Uniswap X pairs with the Uniswap AMM. So you have Uniswap 1 vs 1 through 4. Uniswap X pairs with those. If you understand what CalSwap is, basically start there. Uniswap X is pretty similar to Cal.

Starting point is 00:38:55 swap. It is a order. Dutch auction is a house swap, right? Yes, it's a Dutch auction that allows for market competitiveness in order fulfillment. So you can come to Uniswap X and say, hey, I have this token. I want that token. And with this Dutch auction mechanism with off-chain order routing, so instead of making a transaction on Ethereum, you just sign a message and broadcast that freely, say, hey, whoever wants to fill this order can do that. So you actually don't pay for gas because you are not making a transaction, the cost of the transaction comes out of the trade. So you don't pay for

Starting point is 00:39:30 ether. So you can swap, you can just broadcast a transfer that says, hey, I have 500 USC. I would like to swap it for die. And then the market will give you the best offer. The free market will come and compete for the best offer to give you as much die as possible. And the gas will come out of that trade. So actually, you don't have to touch ether. There's a bunch of other benefits as well. In the long term, this is not what's happening today. But in the long term, you'll be able to say, hey, I have 500 USC. I would like as much die as possible on this particular layer two. I'd like it on optimism or Arbitrum or Polygon or ZK Sync.

Starting point is 00:40:03 And because it's off-chain order routing, whoever service provider wants to just deliver you your desired crypto assets on your desired chain so long as there is a bridge to provide a proof that the actual assets were delivered back to wherever the originating order came from. So long as that's there, it's, it's, it's bridge. minimalism because instead of sending assets over bridges you are only sending a proof over bridges and then off-chain third-party service providers just fulfill your order for you I think it's really cool it seems to be to me the yin to the yin to the yank of uniswap amm's to uniswop x so this is

Starting point is 00:40:40 another layer in the stack of uniswap that I think really completes the vision and there's a fee switch it's an additional fee there's a fee yes there's a there's a fee that goes Unitoken. For unitokens. Go see Unip Swap down. There's a fee switch inside of Uniswap X. So that's an interesting tidbit of information there. This Uniswap X is not generally available, but is open to an opt-in beta right now.

Starting point is 00:41:06 So I definitely plan on trying it. It's really interesting, David. So I love what you're saying about basically the UX is going to be much more seamless. I just sign a transaction. We're not talking about gas fees, really cheap trade. I can see this being incorporated in wallets everywhere. I can see it being really good for end users. That said, I'm a little bit worried about this function being pushed off chain.

Starting point is 00:41:30 This third party, does this introduce another kind of trusted intermediary into the system? And I want to listen to the episode that you did with Hayden Adams and explore this a little bit. But I haven't listened to that yet, David. But I did see this pushback on Twitter from Defi Guy. Very deep in Uniswop X-Dox, behind the public messaging of a permission. List Protocol is a completely centralized permission, opaque, off-chain, RFQ system. Let's take a look at how it works. A request for a quote.

Starting point is 00:42:00 Right. So don't have time to get into this entire thread, but basically the charges, we're pushing some things off-chain, and this is a centralization vector, and this is concerning, and people should be concerned because it's a departure from a permissionless protocol. I don't know what the response is to this kind of question or concern. it's something I want to look into in some more details. Do you have any hot takes on this? Yeah, if I understand Uniswf X correctly, again, I would need Hayden to really be able to drive this point home.

Starting point is 00:42:30 But the idea is that you broadcast, hey, I have this much of one token. Give me as many of the tokens that I want in the place that I want. And then the free market competes to service provide for that. So it's a third party service provider, but that being a third party service provider is permissionless. So anyone can be that. there's not one canonical third party service provider. It's the free market. And when the free market is competing, that is decentralization in my mind.

Starting point is 00:42:56 I would also have to go through this strategy. I understand what this guy's talking about. It feels like there's an analog to like builders and searchers in Ethereum. Very much so. And it's just kind of like brain breaking. Like it took me a while to sort of understand builders and searchers and to understand what the points of centralization would be in that new function. And whether that is sufficiently mitigated by.

Starting point is 00:43:17 the protocol to justify it or not. My conclusion for Ethereum was like, yes, but if you- For a while, if you- Formission-less. In the fullness of time, the answer is yes. If we stopped halfway short of the Proposer Builder Separation progress, it would become central- Well, I was very concerned about proposer-builder separation going in because

Starting point is 00:43:35 the idea of builders and searchers being sort of the decentralized groups. It's like, okay, but how are we maintaining centralization? And the key is, like, validators are still kind of in control of the network, right? and you still have fork choice. Anyway, it might be a similar dynamic working here. But the first thing you should do, bankless listeners, go check out the episode that David has already published with Hayden Adams on Uniswap X. The first of my three ETH-C interviews.

Starting point is 00:44:01 Those three podcasts while I was here out. What else you got? Who else you talked to? I might do it a fourth tomorrow. One is with Jesse Pollock from base. And the other is, oh, my God, it was so good, Ryan. You're going to nerd the F out when you listen to it. Justin Drake and Timbako, the sci-fi roadmap for Ethereum.

Starting point is 00:44:16 Oh, geez. Yeah. All right. See, I don't have to go to conference this because you do it. And you bring the best content back. Thank you. That's right. That's what I do, baby.

Starting point is 00:44:27 We got a lot more reasons to be bullish because you have permission to be bullish this week. David, what's coming up next? Polygon is about to upgrade the Matic token. We're finally converting the discrepancy between the Matic token and the Polygon network. Those are two different words. But that's actually the most insignificant part of the upgrade. It's just the part that I thought was funny. So we're going to talk about all the polygons

Starting point is 00:44:46 gone network upgrade token economic upgrades as well. In addition to that, a layer one is about to become a layer two. Is the bankless thesis finally coming true? I told you what do you mean finally? What do you mean finally? Come on. The bankless layer two thesis is finally playing out. Let me be more specific. ZK sinks got a brand new prover is pretty groundbreaking. We're going to talk about why and what that means, all of this and more. But first, a moment to talk about some of these fantastic sponsors that make this show possible. Since this theme is you have permission to to be bullish, make sure that your portfolio is ready for the bull market. MetaMas portfolio can help. There is a link in the show notes to get your Metamask portfolio opened up. We're going to go

Starting point is 00:45:25 hear from them right now. Metamask has something new. Introducing Metamask portfolio. Metamask portfolio is the best way to view your crypto portfolio from a holistic level. See everything across all the chains all at once. In your portfolio, Metamask will report the aggregate value of all the assets in your Metamask wallets and even the other wallets you import too. But MetaMask portfolio isn't just a passive portfolio viewer. It is a place to do all of the money verbs that make DeFi so powerful. You can buy, swap, bridge, and stake your crypto assets. So not only is Metamask the easiest place to see your wallets in aggregate,

Starting point is 00:46:00 but it's also a powerful battle station for all of your DeFi moves. So go check out your Metamask portfolio, because it's waiting for you to open it up. Check it out at portfolio.netmask.io. Arbitrum is accelerating the Web3 landscape with a suite of secure Ethereum scaling solutions. Hundreds of projects have already deployed onto Arbitrum 1, with a flourishing defy and NFT ecosystem. Arbitrum Nova is quickly becoming a Web3 gaming hub, and social apps like Reddit are also calling Arbitrum Home.

Starting point is 00:46:25 And now, Arbitrum orbit from secure scaling technology to build your own layer 3, giving you access to interoperable, customizable permissions with dedicated throughput. All of these technologies leverage the security and decentralization of Ethereum and provide a builder experience that's intuitive, familiar, and fully EVM compatible. Faster transaction speeds and significantly lower gas fees. Are you a dev but you don't know solidity? With Stilis, Arbitrum's upcoming proposal for a programming environment upgrade, developers can write smart contracts in Rust, C, C++, and many more coding languages.

Starting point is 00:46:57 Arbitrum empowers you to explore and build without compromise. Visit arbitram.io where you can join the community, dive into the developer docs, bridge your assets, and start building your first app on Arbitrum. A layer one wants to become an Ethereum layer two. This has been a long... Oh, yeah. I love those words. Can you say that again? A layer one wants to become an Ethereum layer two. This has been a long held, I think, bankless prediction, many roll-up bowls like Plenia have predicted this for a while, too. And here's the

Starting point is 00:47:26 first proposal of its kind that we've seen. A proposal for Sello to transition to an Ethereum layer two. David, what is Sello and what is this proposal call for? Yeah, Sello is, it's always been a layer one blockchain. Fun fact, it's actually the only layer non-Etherium layer one that we've accepted as a sponsor of bankless. Why did we do that? They are focused on public goods, regenerative finance, that whole movement, blockchain for good. And so they are working on adoption in third world countries. There's a lot of just making sure the long tail of the globe gets access to blockchain services. So I've always enjoyed what cell is done. And it's always seemed to me, Ryan, that they've used the blockchain

Starting point is 00:48:10 as a means to an end to provide public good services to the world. So this is why this makes so much sense for Sellow to become an Ethereum layer two. It's because they want to use crypto for the regenerative finance movement. And they've just been using a blockchain to get that done. Now they are saying, like, hey, we actually can achieve our mission better if we become an Ethereum layer two. So they have submitted a proposal. Zello has permitted a proposal to its own governance community to transition into an

Starting point is 00:48:40 Ethereum layer two. So they are proposing to become an OP stack to help Sello developers utilize all of the Ethereum tools and libraries out there because the OP stack is basically Ethereum. They want to use off-chain data availability using eigenlayer data availability. So eigenlayers got the supporting DA services for them. And then also end users of Sello. If you are transactor of Sello, you use the applications of Sello. If you're anywhere in the vast apps that Sello does really actually truly have, then you would not be affected. It would be a seamless upgrade for you. So I think this makes sense.

Starting point is 00:49:13 This is exactly what we've been predicting for a long while. I think this is the first of many. I was talking to one of my friends here at ECC. We were talking about Selo. I actually don't remember this, but apparently I told her that I think Sello will become a layer two eventually. I told her that about like six months ago. And she goes, she went up to me today, you know, six months later or yesterday.

Starting point is 00:49:32 And she goes, did you know something when you said that Sello's going to become a layer too? And I'm like, I don't even remember. were saying that in the first place. Did you know something? The bankless theses play out. The bankless theses always work. Not always.

Starting point is 00:49:46 We, you know, but like greater than 50% of the time. Which ones haven't worked? None of the big things, I don't think. And you know, the ones I haven't worked, we're just like, oh, just wait. Just wait a while, you know? The timing's not not right on for that, but we did get D-5 right. It'll eventually get the theorem right. Yeah.

Starting point is 00:50:02 Okay. So I guess one of my questions is, are we going to see this with other layer ones? Right? Is avalanche, is Solana? Are they going to become a layer two? And like my take on this is the reason that a layer one becomes a layer two is kind of for three reasons, right? It's tribe, its network, and it's economics. It's these three reasons. And there's various weighting, but let's roughly assign them a third, a third to third. One is there is some tribal affiliation, right? If you switch from one tribe and now you're a team Ethereum, right, you get some love and support for, say, the Ethereum tribe. That can be a motivating reason to do.

Starting point is 00:50:38 you this. It's kind of marketing, that sort of thing. We're talking about it on the roll-up. It's that sort of thing, right? The second is network. And that's the thing that has been lacking before, but is now present in sort of the super chain. You already have the network effect of the EVM. But when you become an optimism participant in kind of the optimism ecosystem as a part of all of the other layer two that are developing on top of Ethereum, you get plugged into a network and you get some beneficial network effects of interoperability, right? It's just connected. to this ecosystem. That I think is a driver for Selo and others. And the third I would say is economics, all right? Rather than issuing token, which is a cost to the Sello business to pay for security,

Starting point is 00:51:22 a layer two doesn't have to do that. All right? It's much cheaper to maintain your security as a layer two. The analog here is this is why the state of Tennessee doesn't have its own private military, right it gets that from the federal government all right and it's much more efficient to get that cost that security cost from the feds than it is to create like a state military force of course it just makes sense and so a seller doesn't have to pay that security budget so it's those three things it's tribe it's network and then it's economics and i don't know what other layer twos these three forces will come into play with but i don't think cello will be the last layer one that makes the switch yeah My next prediction, for my next trick, I think you're going to see cello and many cello apps participating in optimism's retroactive public goods funding. So you're going to see OP tokens being distributed to the cello ecosystem. And so it's what do networks do? They are basically the local governments for their domain and they need to provide services.

Starting point is 00:52:28 And one of the big polls of optimism is being part of the retroactive public goods funding. And so if a lot of the cello ecosystem can get funding from optimism, that is just a a huge service that optimism can provide silo all of these layer two ecosystems will be competing for chains won't they um speaking of which here's another layer two base this is from coinbase mainnet now open for builders david what's this announcement yeah so base main net is here this is mainnet it's open for builders so the going back to the theme park ride which is really to the cess of time the base theme park is open. The real estate is open for ride builders, for ride operators.

Starting point is 00:53:10 So if you would like to go build a ride on the base theme park for the inevitable flood of people going into the theme park, which is happening in August, then now is the time. So main net open for builders. One of the interviews, like I said, Jesse Pollock of base, I talked to him for 40 minutes all about this and all the other layer two manias that are coming, layer two season that we talked about. And also just his collaboration with optimism and all of this. So base main net open for builders. Mainnet, actual main net coming early August. I can't say the date. I actually don't know the date.

Starting point is 00:53:42 I do know the date, actually. But you can watch the interview that I do. It might be out by the time you listen to this episode. It will be out soon, TM. Guys, did we mention the base in base dance for Coinbase? This is Coinbase's layer two attempt in case you forgot. Oh, yes. This is another reason to have permission to be bullish.

Starting point is 00:54:01 Oh, Coinbase, the layer two mania, the layer two summer, like, you would be excused if you made bets that this would be coming. Base, Coinbase, flooding in users into the layer two ecosystem. We have public goods. I'm just going to, at this point, just listen to the episode with Jesse. We talk about this. But layer twos and providing public goods and onboarding users on to change and Coinbase leading that charge is going to be a huge legitimizing factor for the industry. base beerheading layer two summer layer two mania i think is permission to be bullish it's a big one we've got a what a hundred 110 million or so users on

Starting point is 00:54:41 coin base that could be converted over yeah it's absolutely massive zk sync announced its new prover it's called bojum what is this bojum it's zk synx era new high performance proof system so why do we love zk rollups because of proofs because of the zk you don't have to have that seven-day wait period for fraud proofs from optimistic roll-ups. You have just the proof that cryptography gets you. The problem and the vector that all these ZK layer two teams are competing on is the efficiency and of their ZK circuit. How manageable is actually producing that proof. This is the thing that Polygon, Scroll, ZK Sync are all competing on is how solid can you get your proof,

Starting point is 00:55:28 your ZK proof system. And so, Bujum is ZK thinks errors, new high performance proof system. It used to, the average prover, they are saying, needs about 500 gigabytes of hardware on a GPU, on a consumer great piece of hardware. 500 gigabytes, if it is a GPU, I think it is a GPU, to make a proof.

Starting point is 00:55:47 500 gigabytes is insane. My gaming computer, I've got a gaming computer. It's got 16 gigabytes on its GPU. The Bujum requires eight. Which is not so low. It's not so low. Like some GPUs are down to four, but they're kind of like the low-end ones that need to be upgraded. Modern GPUs, 8 to 16 gigabytes.

Starting point is 00:56:08 I really hope that this GPUs. I'm pretty sure that's true. But if Bujum can be proved with just 8 gigabytes of hardware, what does that mean? That means if you have a GPU with 8 gigabytes of memory in it, you can produce a Bajum proof for ZKSink era. You can run a ZKSink. You can produce a proof. Why do we like this? because it means you only need one

Starting point is 00:56:30 prover to work. Whereas Ethereum proof of sake needs two thirds. ZK rollups need one. You need one prover to produce a proof. That could be you if you have an 8 gigabyte GPU. And so that's why that's, and so this is, it's taking the ZK stack that I'm so excited about

Starting point is 00:56:45 and making it real small, real manageable so that it can permeate into the internet, which is again, when I say the ZK stack will inherit the internet. More layer two stuff going on. Polygon is upgrading its Matic token to something called pole. So there are some big changes in the polematic ecosystem.

Starting point is 00:57:05 This is like a token improvement, I would say, maybe an economic improvement. But the TLDR is this one pole token is now going to power all of the chains. So that's Polygon supernets, Polygon ZK, EVM, even the Polygon ZK EVM, of Lidium. Of course, it already powers the proof of stake change. And they're going through a rebrand of it. So no longer will it be called Matic. It will be called Paul, P-O-L. Is it Paul or pole?

Starting point is 00:57:31 I don't know. One of those two things. Why isn't it, Pauley, is the better question. I'm sure Polly's been taking it. Do you remember, wasn't there like a company or a project called PollyMath or something? Polymath, yeah, it was a security token issuance platform. Yeah, you remember this. Yeah, I was in that security tokens world back then.

Starting point is 00:57:50 They're totally relevant. Yeah, it's permission to take Pauley. You can't be Polly. They already have it. Well, it's Paul. unfortunately. I can't actually submit a governance proposal to change from pole to poly because I'm a U.S. citizen. I think that's true, actually.

Starting point is 00:58:05 Wait, really? But Paul, come on, Polly. Okay, yeah, no, I think I'm pretty sure that's true. Okay, but a more serious note, not semantics. One of the big critiques of Polygon is like, it's not a roll-up. It's just a proof of stake side chain. And there's no, like, it doesn't inherit the security of Ethereum, blah, blah, blah. I think the very important thing to emphasize is that you have the Matic token,

Starting point is 00:58:26 which is the proof of stake token for the current Polygon proof of stake network. Now you have the Pall token, which is the actual validating token for every single network. Actual fees, all the networks, the many networks of that is part of the whole Polygon ecosystem. They're calling this a third generation because first generation they're calling it Bitcoin. The second generation is ETH for the Ethereum network. And the third generation is Pohl for the Pauly number of networks. That's a good pun, I think. The Polly Networks of Polygon.

Starting point is 00:58:55 Oh, that's why they call it PolyGon. Oh, I get it. Holders can become validator. So if you own hold Paul, you can now become a validator, you can get the transaction fees. So all of the many, many networks that makes a polygon, one token, many networks. Yeah, I think I like what they're doing here. Somatic holders, this is a one-to-one upgrade. So Mattick to Paul is a one-to-one upgrade, right? Notice what they didn't do. So what they didn't do was make it like a different ratio. And 10 to one token split. Yeah. Inflate. Polygon is pretty cheap. It's like 50, 60, cents or something. They did. So, so, but yes, but they didn't kind of, I guess, kill or

Starting point is 00:59:33 Nerf existing Maddoch holders, which is good. They also didn't do a thing that they could have done, I suppose, which is create tokens for all of these chains, right? So I feel like this is a good move. It's a, a long-term game type of thing. So the initial supply will be $10 billion same as Madik. Now, I will say that there is some issuance that has been added. So there's a 2% yearly a mission of pull tokens on top of this, whereas Maddoch was fixed. So Matick was fixed at 10 billion. With poll, there's going to be some issuance. So there was some issuance added on the back of this. 1% goes to validated rewards, 1% to community treasury, which of course pays for protocol development. All in all, you know, I think this is a pretty good move for, and most Maddoers

Starting point is 01:00:18 that I've seen have been pretty excited about this. And of course, you can not only use Paul for staking inside of proof of stake in the future, but you'll also be able to use it in other roles that roll-ups present, say maybe sequencers, that kind of thing. And just as a reminder, before we move on, Ryan is an advisor to Polygon, and Ryan and I are both advisors to both ZKSink and optimism. Turns out we like layer twos.

Starting point is 01:00:45 David, you remember this guy from a show called the OC back in the 2000s? Not at all. Okay. Well, this guy was a pretty big deal. back in the day. Some bankless listeners. Teenage heartthrob type. Yeah, that's totally what he was. Ben McKinsey is his name, former star of the OC. So I woke up on Monday, and suddenly, here's Ben McKinsey,

Starting point is 01:01:05 and he's at war with crypto. All right? I did not expect this guy from the past. He hasn't done a lot of acting since his OCB. This is who they're sending, David. The context is, yes, Ben McKinsey, former OC stars, published a book this week on how all crypto is a scam. And that really is. is the conclusion of the book. So his story is he discovered crypto in 2021. He invested in quotes 250K in it. Don't know what he bought,

Starting point is 01:01:33 but he indicates that he lost almost all of it, if not all of it. Proceeded to talk to the crypto people, of course, which included Mishinsky, SBF, Justin Sunt, you know, the best representatives of the crypto industry. He was hanging out with them? That's who he was investigating, to them. He didn't talk to the italics of the world. He didn't, you know, talk to anybody.

Starting point is 01:01:57 He didn't talk to us. He didn't look up our guest lists and talk to, you know, Hester personnel. He didn't talk to any of those people. I bet you he doesn't even know what bankless is. Yeah. And so he drew a whole bunch of. Well, I don't know. Like, I think he does. It almost feels at this point like he's purposely ignoring that in order to, uh, to send a contrary message, which is all of crypto is a scam because they're scammers in the industry. Obviously all crypto is a scam. So here he is. He's doing the media circuit tour. I'm going to play this clip.

Starting point is 01:02:24 You dug in and yet you admit you still didn't get it. It's it. I don't get it either. It's not a thing. It's not like if you buy a stock, it represents a company. To buy a bond, you've got debt on somebody. Yeah, if you invest in grain futures, like there is a farm somewhere making grain. Like what is crypto actually rooted in or on?

Starting point is 01:02:45 Nothing. It's a story. I mean, these are bits of computer code that are uncorrelated with any real world asset, to your point, if they're an investment, that's so bullish. That's what I'm here for. The reason that I use the word Ponzi scheme in front of the Senate is that an investment scheme without value is a Ponzi scheme. I mean, that's the definition. And Ponzi schemes are regulated by the Securities Exchange Commission. So in my opinion, the cryptocurrency industry does represent the largest Ponzi scheme in history. There he is. I could play more, but that's about the summary.

Starting point is 01:03:17 So Bankless Nation, this is who you're up against when you're training. So bad. Well, you know, what to me why is this significant to me it just it kind of represents a bottom signal for me right it's just like now this person is coming out with a book on how all crypto is a scam and the conclusion and just this is on uh cbs morning like this um the show host is like i don't understand this crypto thing it's not backed by anything real it's not backed it's not like wheat it's not like uh you know a security it's not like equity or anything else i think that this is do we not live on the internet in this modern era like What do they think this is? I'm very excited to take the counter trade here.

Starting point is 01:03:57 So this makes me bullish. This is the type of. This is who I'm going to trade against. This is, okay, permission to be bullish. This clip, Bankless Nation, is your permission to be bullish right now. This is the bottom signal of bottom signals. They're just handing to this, handing this to us on a platter. They have Ben McKinsey and the whole like Fiat font at the top of the banner.

Starting point is 01:04:21 Oh my God, dude. Yes. Let's get this man's take and put him on on talk to the Senate cheat. I can't believe we talked to the Senate. Yeah. Yeah. Anyway, the OC actor is coming out hard against crypto and that is the ultimate bottom. I'm shaking in my boots.

Starting point is 01:04:37 I have full of fear. In politics, I don't know if you'd notice this, David, but Robert Kennedy Jr., Robert F.RFK, he's been taking some very pro-crypto stances. Last week, just earlier that. this week, David, he vowed to back the dollar with Bitcoin. All right. Not a lot. Just under 1% very, very small. He's had perhaps of 1% of issued T bills by Bitcoin and other hard currencies like gold,

Starting point is 01:05:03 silver, and platinum. He also... Okay. Not 1% is Bitcoin. 1% is hard currencies like gold silver, or Bitcoin. Yes. Very pro-Bitcoin stance.

Starting point is 01:05:14 He said it's a mistake for the U.S. government to help the industry and drive innovation elsewhere. Biden's 30% tax on. cryptocurrency mining is a bad idea. He also wants to remove capital gains from Bitcoin. I'm assuming in smaller amounts, right? So probably not large investments of millions of dollars. But like if I send Bitcoin, you know, to pay for something, pay for my Starbucks, that's a capital gain on my Bitcoin, potentially if it's gone up for paying for a cup of coffee. Other currencies aren't treated that way. So he brings a lot of points to bear and is definitely taking a crow cryptocurrency.

Starting point is 01:05:51 crypto posture, regardless what you think of any of his other politics, which, of course, many people have complaints about or different opinions on. Ron DeSantis as well, he is coming out hard against the central bank digital currency. He says this of CBDCs. He says this of CBDCs. They want to get rid of cash. They want no cryptocurrency. They want this to be the sole form of legal tender.

Starting point is 01:06:13 It will allow them to prohibit undesirable purchases like fuel and ammunition. So the minute you can empower to do this, they will impose a social credit system. on the country, CBDC is a massive threat to American liberty. What's interesting about this is politics aside, it seems like all politicians are now in this presidential race having to weigh in on crypto. And I haven't heard Biden weigh in on a big way. I haven't heard Trump weigh in recently on a big way. But this is elevated in 2023, 2024 to kind of national level of conversation.

Starting point is 01:06:47 And that is quite a departure from the previous crypto cycle. any takes on this? My take is that everyone's got to take about crypto. And I think that's really just the summary. It's now mainstream in politics. And so we have risen to that level. Like, you can't, everyone's going to be running for some office somewhere. And then one day you will be asked, hey, what's your take on crypto?

Starting point is 01:07:10 That's just, it's that, that's where we are. 100%. Another maybe permission to be bullish that it's elevated to the national conversation here. This is not permission to be bullish as all the others. I'd expect that one. This one is not strong at all. Binance cutting back employee benefits citing decline in profit. Apparently, Binance cut a thousand workers this week.

Starting point is 01:07:32 CZ had a response on this. Yeah, CZ said that was FUDD. He said that it was, there were layoffs, but it wasn't a thousand. Four? Is it one of the four FUD things? It's a four. I don't know what to think about all that, but, you know. CZ, as we continuously strive to increase talent density, there will be involuntary terminations.

Starting point is 01:07:49 This happens in every company. The numbers reported by the media are way off. It's just fun. Okay, it says. All right. There you go. A new update from Nosis safe. This is a Nosis pay.

Starting point is 01:07:59 See that little visa card that NOSIS pay visa card that you see on your screen? I see it. So I actually talked to some of the Nosis team at Zuzalo about how this works. When you run that credit card, the magnet induces enough of an impulse of electricity for that chip inside the card to make a private key transaction, signature. So there's a private key in that visa card and just scanning it makes a transaction happen. Wait, what? Yep, yep. There's a private key in that visa card. And it runs on top of Nosis chain. And so we have Nosis pay and Nosis card running on top of Nosis chain. The Nosis chain is like a side turning into this like bankless system and payment system along with your vault, Nosis safe. So like Nosis chain,

Starting point is 01:08:46 Nosis pay, NOSCard, NOSIS Safe. I think there's a few others as well. It's a pretty impressive vertical. But the news here is that Nosef pay is out. Nosis chain, that's like a side chain on Ethereum. Yes, preface-ex chain. Yes. I love NOSSAFE.

Starting point is 01:09:02 I will say that. Best multi-sig I've used. It's absolutely fantastic. Really cool to see this. It says an announcement out of ECCC-I-I-Spresso, announcing an ecosystem partnership with Eigenlayer, collaborating to bring resaking to the Espresso Sequencer Network. This is one of the things I was referencing earlier with the rubber hitting the pavement about very hard problems is everyone's getting real excited about espresso sequencing and shared sequencing and just overall the growing infrastructure.

Starting point is 01:09:27 Wait, what is this? One of the big problems about all these layer two networks and the fractal super chain, fractal scaling hyperchains and all of and then all the restaking eigenlayer chains is there's a lot of parallelization going on between all these chains. Like there's going to be 10,000 OP stack chains. how are we going to parallelize and then combine all of the transactions? We do that with sequencing. Espresso Systems is tackling this problem head on, and they're doing it alongside of eigenlayer. It sounds like this is a rabbit hole that I think we actually really haven't explored yet.

Starting point is 01:09:59 Yeah, we have it. I think we should probably do an episode on sequencing. So call to action for who is the best sequencer guest? Might be Torgle from scroll. Yeah, I should have him on. I feel like I need to school up because most sequencers right now are run by kind of internal teams like Arbitrum runs their sequencer, optimism runs its sequencer, but this can't be the state moving forward. So yeah, I would love an update on that. Very cool to see. David, we got more

Starting point is 01:10:24 coming up, including questions from the nation, some hot takes from crypto Twitter as well. Stay tuned. We'll be right back at you. But before we do, we want to thank the sponsors that made this episode possible. Introducing Polygon 2.0, the value layer for the internet. For too long, the limitations of blockchains have held back app development and stifled user adoption. The internet allows anyone to create and exchange information. What's missing is a value layer that lets anyone exchange, store, and program value. That's where Polygon 2.0 comes in. Polygon Labs has unveiled a series of innovations that will radically alter the Polygon ecosystem and Web3 as a whole. By leveraging groundbreaking ZK innovations such as Polygon ZK EVM, the next iteration of the best in class

Starting point is 01:11:06 Plonkey 2 proving system and a first of its kind, ZK-powered interoperability layer, 2.0 will give users and devs unlimited scalability and unified liquidity. Right now, there is a Polygon improvement proposal regarding a potential ZK-powered upgrade of Polygon proof of stake. If approved, Polygon proof of stake would become a layer-2, ZK-EVM, Villadium. So make your voice heard on this proposal by joining the Polygon Discord today. You have a chance to help the Polygon community give the Internet the value layer it deserves. Are you planning to launch a token? Is your token already live?

Starting point is 01:11:36 And are you granting your employees and contractors vesting token awards? And are you trying to figure out how to take care of taxable events for your team? Toku makes implementing a global token incentive award simple. With Toku, you will get unmatched legal and tax support to grant and administer your global team's tokens. Toku will help you navigate across the life cycle of your token from easy-to-use pre-launch token grant award templates to managing post-cliff taxable events with payroll. For legal, finance, and HR teams, it's a huge complex task to have to comply with labor

Starting point is 01:12:06 laws, payroll, and tax obligations, tax reporting, and crypto regulations in every country that you employ someone. It's difficult, time-consuming, manual, and costly, and it's drawing more attention from global regulators and governments. Toku makes it simple for leading companies in the space, Protocol Labs, Hedera, Gitcoin, and many more. So if you want some help in navigating the complex world of token compliance, go to Toku.com class bankless or click the link in the description below. Question from Bankless Citizen Kyle Kaplan this week. So if optimism switches from optimistic fraud proofs to ZK proofs and chooses the ZK sync prover. We're just talking about that.

Starting point is 01:12:40 Will it reduce the need to bridge between the networks? And would that make it a hyper super chain? I think this is a great question. It's kind of a question that I've had in my mind as well. All right. So part of my worry is we create all of these island ecosystems. We have the ZK era ecosystem. We have the optimism, the arbitram ecosystem,

Starting point is 01:12:57 Polygon. They're all kind of separate ecosystems. And it would be really nice if we had some standardization in a way to kind of easily bridge between. them or we shared some security assumptions or we shared some ux or something good could come of that i think that's what kyle is asking about in this question will it reduce the need to bridge between networks what's your what's your answer to that david i think k i think kxed into my fascination about stacks lately so we've had the op stack for a while the zk stack is brand new and i

Starting point is 01:13:26 when i was talking about the zk stack i just talked about what is the zk stack it is zk syncs zk circuit emphasis like concentrated, put into a small little package. And I think what Kyle is saying is, oh, a small little package, you mean like a module and how the OP stack is like a module for layer two chains? Can you take the ZK sync circuit and put it inside the OP stack? And the answer is yes and no. It is theoretically possible to do that and things are progressing in forward in that. Specifically, the ZK sync circuit is not EVM compatible.

Starting point is 01:14:00 So the puzzle piece does not fit. And this is coming from Ben Jones. I had to ask Ben Jones to make sure I was getting this right. He said it doesn't fit yet. Important point. Yet. So it is eventually possible to do that. You could put the ZK Sync circuit inside of the OPM stack.

Starting point is 01:14:19 It just needs to be made more EVM compatible. However, O1 Labs, we saw this announcement not too long ago. They are also building a ZK circuit for the OPM compatible. stack. So there is competition from the ZK world to build the ZK circuit for the OP stack, because then whichever one becomes standard is the one. And so there is a competition here. I like competition and also I want very much standardization, right? So one thing that's nice about it. But it's like competition and standardization is like anti, like you want a monopoly for standards, don't you? Like HTTP is it.

Starting point is 01:15:00 Monopoly, the protocol of the internet, right? And this idea of a hyper super chain that Kyle is tapping into, the questioner, that's what we all want. We don't want like all sorts of different stack chains here. We want one hyper super chain. The poly ZK OptiRB stack. Oh my God. I don't know if we can get that. No, right?

Starting point is 01:15:19 So, and by the way, I do think that if Ethereum doesn't figure this out with with layer two's, as bullish as I am about kind of the modular thesis, right? and I'm very bullish on this. I think this is the chink in its armor, where a monolithic chain, a Solana, for instance, has an approach, and they're like, UX is seamless. You get from here to here,

Starting point is 01:15:40 and it's easy. We don't make you change any wallets. You don't have to change your security posture or assumptions. The U.X is just seamless and it's easy. So it's really the modular, you know, a modular way to scale this. Really important that we figure out UX

Starting point is 01:15:53 and get some standardization here. Great question. David, we got some takes of the week. Here's a take from Antonio. from D-YD-X. What's he saying? Antonio from D-Y-D-X, D-Y-D-X, of course,

Starting point is 01:16:04 was once a Starkware-based, Stark-X-based layer two and then pivoted into being a Cosmos app chain. And he says, D-Y-D-X was early and right on D-Fi. Very true. E, early and right on Perps,

Starting point is 01:16:18 also very true. Early and right on Ethereum layer twos, and then he finishes in saying D-Y-D-X will be early and right on app chains too. I don't know about that take Why? I think he's totally right But my follow-up question was

Starting point is 01:16:35 Do you still like Cosmos app chains Over Layer 2 app chains? He's in his tweet He's talking about Cosmos app chains Okay, however, that's not clear in the tweet We have an independent layer one Becoming a roll-up on layer two And you can do App Chains as roll apps on Ethereum

Starting point is 01:16:51 And I'm pretty sure he's not talking about that But it's interesting, right? So I'm also very bullish on App Chains but I'm much less bullish on app chains without shared security. Independent app chains. Which means you're not bullish on Cosmos, which is what this is an amount of statement.

Starting point is 01:17:06 And why? It's because it kills kind of the economic. Remember, are we talking about tribe network and economics? It kills that last leg of the stool there. The economic argument is to have to pay for security, don't you? It also makes you weaker tribes because all of the Ethereum layer twos are anchored by ETH. Cosmos app chains are not anchored by Cosmos. Federation of City States.

Starting point is 01:17:25 That's what the Cosmos vision has always. been rather than kind of the empire type model of Ethereum. So yeah, he's taking a bet, big bet, big builder bet on the Cosmos app chain ecosystem. I think he paper handed layer twos. I think I think the IDX paper handed. Antonio's pretty smart, man. And he's a builder. I don't know.

Starting point is 01:17:44 Maybe he sees something that others don't. We'll have to see. That's my take is that Antonio paper handed layer two. Well, he's always been early. sometimes like he was he was doing app chains before app chains existed on ethereum let's let's let's say that right and then he stopped he was so early and he stopped uh we're rooting for you though Antonio and DIYDX is a great dynx is killer uh right right right this one's your take yeah it's just a lot of I've heard a lot of conversation about tokens being securities this week and I just

Starting point is 01:18:20 think that's the wrong framing like why are we even asking that question okay tokens aren't securities. Tokens are tokens, David. It's not that hard. Tocons can be money. They can be memes. They can be loyalty points. They can be NFTs. They can be coupons. They can be IOUs. They could be commodities. They be whatever you want. Because anything that represents ownership can be expressed as a token. What are we doing? What is Ethereum? A property rights system in which you can express ownership of a scarce unit on the internet. Ownership of anything that's scarce. Ownership, scarcity. That's what we're doing with tokens, right? So when the SEC or anybody analyzes tokens under the securities framework or that rubric, it's like, why are we even talking about this? It's so, like, we're not thinking about

Starting point is 01:19:11 first principles. And that's why I feel like our regulators and our lawmakers are doing this stupid thing where they're either pigeonholing crypto into securities into something it's not, that's limiting, right? Or they're nannying us into a list of thou shaltz, thou shalt nots with tokens. And it's really stupid. The one thing they could be doing that would actually be helpful for us is disclosures. Remember? That's what the SEC is set up to do. It's a disclosures based institution, not a merit-based. They don't get to decide what investors buy, right? That's beyond that they're not supposed to do that. They have to help with disclosures, right? So you can see what a company's financials are. So they're filed quarterly. They maintain a database called Edgar, which lists all of

Starting point is 01:19:58 this disclosure information about companies. They require the file. So what can regulators do? They can help the public know what it's buying. We have a lot of public data on chain. They can maximize. I would love the SEC or the CFTC to create dune boards. That would be a start. Wouldn't that be a prototype? Like, wouldn't that that means that's too productive of them? We got the disclosure information. And we can even, as a crypto industry, team up with them and help. We got builders. Like one thing that our regulators can do and our lawmakers can do is they can help with the coordination problem. They can help solve Moloch. And they can just be like, hey, here's a list of 15 things that we think should be encompassed in a protocol. And here's where we're going to organize everything on

Starting point is 01:20:45 this set of like dune boards, let's say, for instance. So I don't understand why this is so difficult. And the constant back and forth about tokens, are they securities or not, it's just totally missing the point. I just wish our governors, the people running things, our regulators, and our lawmakers would actually do their jobs and use their brains and govern because that's all, that's what we need here. Anyway, I think I got triggered because I was reading some other financial analysts opinion on whether tokens are securities or not. And I'm just like bubbling up to, that's not even the right question to ask. Of course they're not security. It's a lack of imagination. If you're trying to say tokens are security. Yes. It's because like you're trying to take this

Starting point is 01:21:27 new thing and categorize it and pigeonhole it into this old thing. It's the same conversation is like, is ether a capital asset? Is it a commodity asset? What is it? No, it's something net new. It's a new thing. It doesn't fit into the old things. It's kind of like the old things, but it's a new thing. The answer the question is almost like, we'll see. You know what I mean? Like, we just have to see where the use cases bring us. David, let's end with this. What do you bullish on this week? I am bullish on. This is the last of my ammo of you have permission to be bullish. Okay, does this graphic make sense? Do you see what I've done here? Let me get my bearings here. I'm looking at ETH over the dollar.

Starting point is 01:22:08 This is a chart. We're looking at a log ETH chart from halfway through 2020 to now. Okay. And I'm seeing some bars. And I'm seeing like kind of two sets here, some candles here,

Starting point is 01:22:20 two sets here. So, well, yeah, what am I looking at? Fliped? Okay. You just copied and paste and you flipped the, the bull market

Starting point is 01:22:28 and swapped that in for the bear market? Yes. Yes. So I cut the, the ball market is in the blue box. and I've copied and pasted that and I've flipped it. So the bull market is now upside down. And then I've shifted that over to the bear market.

Starting point is 01:22:45 I've lined it up over the bear market. And what am I doing here? The bull market of 2021, the bull market of old, had two tops. May of 2021, we had that blow off top. I can, oh, I can't point to it because I don't have the cursor. You can. So the 2020 may have, yeah, that was a top. And then we also had the November 2021, also that top is a double top.

Starting point is 01:23:08 Oh, yeah, yeah, yeah. The bear market had a double bottom. It had the three-o's capital liquidation right after the Terra Luna crash. About a year ago. And that was the bottom number one. And then we had the FTX insolvency, which was number two. And so I have loosely lined up the double top of the bull market with a double bottom of the bear market. And they kind of line up.

Starting point is 01:23:29 And what I'm saying is like, okay, if the, and I flipped it around, the reason why it's upside down. is that now the double top of the bear the bull market falls into the into the bear market. But the double bottom of the bull market, the point is it's about the same amount of time. We are here. And so you have permission to be bullish because the bull market and the bear market are about right now the same length. We could get a few more weeks or months under our belt to really be sure. Why do they have to be the same length, though? Just because of human psychology at some time, we're done being bearish.

Starting point is 01:24:04 And I think that people have bear fatigue and the bulls have room to take over. They have, there's enough evidence, there's enough permission for them to take over and be like, you know what, bears, get the F out of here. We're done with you. We're buying. We're not going to let the S&P rally so hard without. Yeah, right. I'm going to hit the buy button.

Starting point is 01:24:23 I'm going to do it. F you get out of here. And so I'm saying you have permission to be bullish for the last time of this. Wow. What's a good bankless episode without some, is this TA? Some TA at the end. This is the. craziest David Hoffman T.A. I have ever seen. This is pretty crazy. But you know what, David,

Starting point is 01:24:38 I want to believe. And all you're basically saying is, hey, human psychology plays out in the same way during a bull market. It's just the inverse in a bear market, right? Instead of hitting the sell button, we hit the buy button. That's all you're doing. And you're just extrapolating that for it. So we got two bottoms here, just like we had two tops. And now we can proceed into a glorious bull market future. Permission to be bullish. What I'm bullish on? I'm just bullish. I just am. That's great.

Starting point is 01:25:13 All right. What are you bullish on? This week I'm bullish on staking. That risk-free rate baby. I was just looking at, do you remember we did? Were you bullish? I don't care. I'm still bullish. Do you know, do you remember that episode we did a long time ago? And I've just been too busy to go look at these things again. Okay, sorry. the episode we did on how much ETH it takes to retire

Starting point is 01:25:37 Oh yeah When ETH was I don't know With Colin Myers Crab market between like 100 and 300 or something That's what it was And it was a fun exercise To figure out how much Like this is before the beacon chain launched

Starting point is 01:25:52 And we're trying to calibrate the rewards And interest before we even knew about kind of MEV execution layer rewards And how big that would be We're trying to figure out How much ETH How many validators you need to run to actually retire, that whole exercise.

Starting point is 01:26:07 Anyway, what's really fun is like staking. We have a risk-free rate of return. There is some amount of eth that you can acquire as a productive asset and stake it at a risk-free rate and then use the proceeds, pay your taxes, of course, sell those proceeds and retire on that. To me, this is like the fire for millennials, right? financial independence, that whole kind of like strategy. So what am I bullish on?

Starting point is 01:26:40 Staking and staking ETH has never, it's never gotten boring to me. That's still, in my opinion, ever since we started bankless, that is still like the end game. You know what I mean? You got defy tokens, you got layer two, so you got all sorts of things out there. But ultimately, the denominator there, the unit of account to me is still ether because it has this risk-free rate that serves as a

Starting point is 01:27:09 productive asset. So I'm staking on, or I'm staking. I'm bullish on staking this week, David. And I'm bullish on people listening to bankless getting to some amount of ETH where they can live off a portion of that semi-retire. Bankless is about like freedom too, right? And so it's a freedom technology. You don't have to have an intermediary when you stake. You can stake on your own. You can run your own node. And then also having a cash flow to fund the things that you want to do. That to me is pretty exciting. And what we've been about since we started this episode. So I'm just returning that and being like, hey, you know, a lot of the risk is boiled out of this. And I'm personally ready to stake. And yeah, it's exciting. We should go back to the episode and see what numbers we came up with

Starting point is 01:27:55 back then with that calculator to see how on track we were with all this data that we have. I think if I remember correctly, it was something like 3.2 or 3.7 validators get you $60,000 a year of passive income under a 10K-E paradigm. Do you want to do that? We should just do a redo of that episode. And now that we have staking, how much state does it take to require? I've got one more thing that I'm bullish on, Ryan. Go for it. If I'm allowed, if I'm allowed two things. This is something that I know that you don't get to experience nearly as much as I do because I go to all the conferences. but I am always just like insanely humbled by all the people that come by and just say, hey, David, I also tell Ryan this, thank you for what you do at bankless. And maybe this is me patting myself on the back, but I'll do it.

Starting point is 01:28:43 And I think you should too. But it's something that is always the theme of every conference that I go to is people like, I just find what you did so valuable, what you do so valuable. I've gotten to this, I got a Web3 job because of you guys. And because of the podcasts, I listen to it all the time. And so for anyone who takes a moment out of their day, the conference to tell me that. And I'll always pass it on to Ryan. I'm bullish on the bankless nation.

Starting point is 01:29:06 So just, it's always pretty cool to talk to these people at conferences. So I appreciate it. That's really cool. You don't get that kind of energy on the internet. It gets a little toxic sometimes. But in real life. Real life is not like that. Mem of the week, David, what are we looking at?

Starting point is 01:29:20 Oh, my God. Did you see this? This is Vitalik walking. He looks like he has a, a bunch of people following a mob of suits look like an entourage he's just calmly walking across a picture

Starting point is 01:29:33 skinny black t-shirt and blue shorts they look like blue Pokemon shorts you know the kid who's like I like shorts it feels like those are the shorts and then he's followed by what looks like a mob of people in suits and the tweet is my entire net worth is in this man's hands I just love that

Starting point is 01:29:53 the funny thing is when I was staying at This is at Zuzalu. The man that you can see in the center behind Vitalik is Mickey. He's the incoming prime minister of Montenegro. And the guy to his right, our left, is the president of Montenegro. The security is for them. Zuzal is like 200 feet ahead of them. It does not look like that.

Starting point is 01:30:14 So it looks like they're close. But the Vitalik is not security is not Vitalik. Also, the apartments that I stayed in is like two rows of houses behind the apartments that you can see there. That is funny. So the securities for the president of Montenegro, not kind of the found out of theory. That's amazing.

Starting point is 01:30:32 All right, guys, you're going to really enjoy the moment of Zen this week, so make sure you don't skip it. But David, you got to give people, I need some context for this. What is Pinky Doll? This is going to be the hardest thing you've ever asked me. Okay, so Pinky Doll is this TikToker who there are animations on screen that people can pay money to make an animation pop up.

Starting point is 01:30:53 And she's doing this thing. where she's like a human bop-it, you know, the bop-it game, like, bop it, yes. Slap it, spin it, like that thing, millennials will know. So, like, if you press one of the specific emojis and you have to pay money to do one emoji, she reacts in a particular way. This is not that. People pay for this.

Starting point is 01:31:16 People pay, yeah, people pay for her to react in this particular way. And apparently she does it for like five hours straight and she's raking in like hundreds of thousands of dollars. Anyways, this is not that. This is Gary Gensler superimposed upon her. So this is what you are about to experience. I'm so sorry, bankless name, and we are doing this to you. Thanks for explaining that.

Starting point is 01:31:36 Guys, I got to end with risks and disclaimers, of course. It's pretty risky to stay till the end of a bankless moment of Zen, of course. But also, got to let you know, crypto is risky. You could lose what you put in. But we are headed west. This is the frontier. It's not for everyone. But we're glad you're with us on the bankless journey.

Starting point is 01:31:51 Thanks a lot. Enjoy Pinky Doll. as Gary Kensler. I'm so sorry. Good. Hmm. Polygon's so good. Hmm.

Starting point is 01:32:00 Polygon so good. Balloon. Pop, pop, pop, pop, pop, pop, pop, pop, pop, pop, pop, pop, pop, give, gib, gib, gib, gib, give, give. Balloon. Pup, pop, pop, pop, pop, pop, pop, pop, gib. Slurp. Polygon, so good. Ooh, ooh, ooh, ooh.

Starting point is 01:32:19 Thank you, Salana. Got me feeling like a queen. Thank you, Cardano. Avax. Avax! Avax! Ooh! Gang gang gang! Slurp. Bim! Ripple's so good. Avax! Avax! Avax! Avax!

Starting point is 01:32:33 Thank you, Udi, Slay! Ah ha ha ha, meao, meow. M. That was so good. Salana pop, amazing.

Bankless - ROLLUP: Celsius CEO Arrested & ETH CC Conference Recap

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