Bankless - ROLLUP: China's $500B Stimulus | Kamala's Pro-Crypto Pivot? | Gary Gets Grilled | EIGEN Unlock Incoming

Episode Date: September 27, 2024

This week we break down China’s massive new economic stimulus package, its biggest move since the pandemic and what it could mean for the global markets.  Gary Gensler faced intense bipartisan grilling in Congress, and Nic Carter dropped shocking new insights on ChokePoint 2.0’s legal implications. Plus, Eigenlayer’s token unlock is finally here after months of non-transferability. We’ll also dive into the key moments from Solana’s Breakpoint Conference. Buckle up. ------ 📈 INDEX COOP | LEVERAGE TOKENS  https://bankless.cc/IndexCoop  ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2    ⁠ 🦄UNISWAP | BROWSER EXTENSION https://bankless.cc/uniswap  🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle    ⚡️ CARTESI | LINUX-POWERED ROLLUPS https://bankless.cc/CartesiGovernance  🗣️TOKU | CRYPTO EMPLOYMENT  https://bankless.cc/toku     ------✨ Mint the episode on Zora ✨https://zora.co/collect/zora:0x0c294913a7596b427add7dcbd6d7bbfc7338d53f/69?referrer=0x077Fe9e96Aa9b20Bd36F1C6290f54F8717C5674E  ------ TIMESTAMPS & Resources 00:00:00 Kamala's Pivot? https://www.theblock.co/post/318216/kamala-harris-says-us-should-become-dominant-in-blockchain-reiterates-digital-assets-in-economic-plan  https://twitter.com/standwithcrypto/status/1838327263953326469  https://x.com/EleanorTerrett/status/1839041447007342919  https://www.theblock.co/post/317636/vp-harris-says-shell-encourage-crypto-business-while-protecting-consumers-at-wall-street-fundraiser-bloomberg  https://x.com/TrustlessState/status/1838578494462189990  https://x.com/mcuban/status/1838667484905578704?s=46  https://www.axios.com/2024/09/23/harris-embraces-crypto-overture-young-men  https://x.com/Zachary/status/1839260651614568845  00:14:17 Markets https://pro.kraken.com/app/trade/btc-usd  00:16:39 ETH Options Approved https://x.com/EricBalchunas/status/1837240128588169587  https://x.com/kellyjgreer/status/1824168136637288912  00:19:16 Movers Of The Week https://www.coingecko.com/en/coins/sei  https://x.com/VitalikButerin/status/1838809754002690403  00:22:10 The Beijing Bazooka https://x.com/JustDeauIt/status/1839152089718538572  https://finance.yahoo.com/news/what-chinas-biggest-stimulus-since-the-pandemic-means-for-us-investors-morning-brief-100039804.html  https://x.com/deitaone/status/1839235182294913315?s=43&t=2ZINVXJQKx6xO_6Wiiu_2g  00:29:55 The Roast Of Gary Gensler https://x.com/BanklessHQ/status/1838602362841374762  https://x.com/BanklessHQ/status/1838613533061230618  https://x.com/BanklessHQ/status/1838621580546425045  00:38:25 Jail Updates https://www.reuters.com/world/us/bankman-frieds-ex-girlfriend-ellison-be-sentenced-over-crypto-fraud-2024-09-24/  https://x.com/autismcapital/status/1838661563663945804  00:44:23 Crypto Bank Crackdown Exposed https://x.com/nic__carter/status/1836858969241100776  00:54:25 EIGEN Unlock https://x.com/eigenfoundation/status/1838270195246170553  https://x.com/JimmyRagosa/status/1839272870809076003  00:55:55 Solana Breakpoint Recap https://x.com/solana/status/1837035324587028567  https://x.com/solanamobile/status/1836614409613119632  https://x.com/solanafloor/status/1837038360101007577?s=46  00:59:05 Telegram Founder Updates https://www.bbc.com/news/articles/cvglp0xny3eo  01:00:32 Raises https://blog.celestia.org/celestia-foundation-raise/  https://x.com/infinex_app/status/1838730410710446144  01:03:57 David Fight Updates https://polymarket.com/event/hoffman-vs-warwick  01:08:26 Meme Of The Week https://x.com/spreekaway/status/1837128008169095172?s=46  ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures⁠ 

So I will recommit the nation to global leadership in the sectors that will define the next century. We will invest in biomanufacturing and aerospace, remain dominant in AI and quantum computing, blockchain and other emerging technologies. Was that it? Was that, was that a pivot? Does that count as a pivot? I don't know, David. I don't know. These are the first words out of Kamala Harris's mouth about, well, blockchain. It's not nothing. It may be barely more than nothing, but it is something.

It is something more than nothing. It is certainly something more than nothing. We'll talk about that. I think that's maybe the first thing we want to talk about. But we also have, on the weekly roll-up, the Beijing Bazooka. David, I want to tell you, this week, China might be dropping its biggest economic stimulus since the pandemic. Remember, Raul Paul's banana zone that we were promised?

Beijing Bazooka Banana Zone. It's all bees. We also got Gary getting grilled in front of Congress by both sides of the aisle and also our favorite Hester Perth and other SEC commissioners at his side, giving a little different kind of responses to some of this grilling. Also, Nick Carter has revealed some of his findings related to choke point 2.0. Turns out choke point 2.0 was even more illegal than we knew about. And also, Eigen layer, the eigen token finally getting unlocked after first getting released

back in April 30th with non-transferability status. iron eigenlayers token is now going to become transferable. And you've got to do the highlights of the Salon and Breakpoint conference. A lot of things coming out of there. And I want you to tell me about those things, David. As a big soul maxi, I know that you are, so I can't wait to hear it. But let's start with the clip that we played at the beginning of this. So Kamala Harris's words, this is, I think the second thing she's ever said about

crypto, blockchain, that sort of thing. because the first was actually... Two times in one week. Okay, okay. So can you give us the first? And then we'll give the context for the clip. So what is the first thing that she said earlier in the week about crypto? So two days earlier on Tuesday, I believe,

Kamala said that she would encourage innovative technologies like AI and digital assets while protecting our consumers and investors as precedent. And these are comments that she made at a Wall Street fundraiser reported by a Bloomberg reporter, also releasing her economic plan. 80 pages, digital assets were mentioned once. And so this was on Tuesday. And this kind of made the rounds on crypto Twitter, not because of what Kamala Harris said,

but because the stand-with-crypto Twitter account took this statement and gave Kamala Harris a rating of a B as being somewhat pro-crypto. Upgraded from, we don't know, basically. From nothing, from no statements. So it was the first statement that Kamala Harris says, ever said about crypto and Stan with Crypto gave her a B as in saying she has made a somewhat supportive statement about crypto which caused kind of an uproar because Donald Trump is given an A

for strongly supports crypto and this one single statement where Coma Sera says she would like to encourage innovative technologies like AI and digital assets while protecting our consumers and investors somehow earns her a beat and so crypto Twitter did not accept that that was like this doesn't feel right at all you got to say you got to say you got to say Donald Trump earned that A with respect to at least rhetoric. I mean, he's, it's going to be a crypto conferences. A plus. A plus. Got to be an A plus. Yes. There's something. This is like, you know, for all of the patting on the back,

Donald Trump gives to himself. I actually think he can pat himself on the back for his rhetoric and talk and the folks he's surrounding himself and commitment with respect to crypto. But Kamala Harris, a B? A B did not feel right. Okay. So that, she didn't maintain a B. because there was an uproar about this, yes. Yeah, so a bunch of people push back. Tommy from Delphi put out a statement saying that this just is not deserved. I put out a statement saying, like, hey, like, I want Democrats to be pro-crypto just like the next guy,

but like, come on, that's not what this is. Just because we have technically a statement that could be interpreted to be pro-crypto, does not earn her a B. And also, I think Jesse Echle put a thread together that I think really drives the point home. saying that we want to be supportive of digital assets while protecting investors is like the same thing that Gary Gensler says. And he puts on like just going through the receipts and saying all the times that Gary Gensler has said, I want to like serve digital assets and protect consumers. Like and so like this could be super veiled, super vague and actually means something totally negative. Okay. So for all of the folks that have been looking for the Democratic and specific, the Democrat and specifically the Kamala Harris.

pivot, right? We got, you got, Kamala Harris, part of this week, hasn't said a thing about crypto. And by the way, she still hasn't used the C word. It hasn't used a kind of a mantra of me. Like, like for me, is it, say crypto, all right? Say Bitcoin, say crypto, say Ethereum. Give us that signal. Yeah, we need to hear crypto. When you say things like digital assets with consumer protections, we don't know exactly what you're talking about. Regardless, the first time she has weighed in on this at all herself as a candidate was this week. And she did it in three ways the Wall Street fundraiser that you mentioned where she said she would encourage innovative technologies like AI and digital assets while protecting our consumers and investors. Who knows what

that means? And then she also said it in the clip where in the context of remaining dominant, we have to remain dominant in AI and quantum computing and blockchain, she said. And then it was also in the policy document. There was one phrase, digital assets in conjunction with AI in in her, you know, Democratic platform policy document that she mentioned. First time ever. Three times in one week. And I think this is the reason why I think you can be allowed to get excited. That first statement, ambiguous.

I'm not really giving any sort of credence to the legitimacy of the first statement on Tuesday. The statement that she gave on Wednesday, which was the one in the clip, to me, that is unequivocally a pro-crypto statement. Remain dominant in blockchain means, like, we have the industry. It is not a lot, Brian, but on the side of the fence about pro-crypto, neutral, or anti-crypto, it is pro-crypto. That is a pro-crypto statement. It is pro-something maybe. I don't know if it's pro-crypto. Again, this use of digital assets and pairing that with consumer protection, it's similar to statements.

She didn't, not in the second statement. In the second statement, she just said blockchain, which again, not our words, but it was. slightly better. Remain dominant in blockchain. That is a pro-industry stance. Okay. So I am not saying that it's nothing. Uh-huh.

But it is ever so slightly more than nothing. It is a couple of grains of sand. Yes. It is like in the journey of a thousand miles, she's maybe thinking of putting on her shoes to go out the door and start that journey. Okay. That's how small and insignificant it feels in the context of,

you know, the last two years of a Biden administration just coming after crypto with everything they got. I think people's interpretation of the significance of these statements really matters on what you think about how Biden has treated the crypto industry and whether or not you carry that forward into your interpretation of Kamala. My interpretation of a vice president is that they have no power. They are just along for the ride. We all completely forgot about the existence of Kamala Harris while Biden was president. She had, she was not on the steering wheel. And so, like, whether you not or not, you want to carry forward Biden's policy and apply them to Kamala's is like your choice.

I don't think that's completely intellectually honest to just say Biden is equivalent to Kamala. Like, this is a new slate once, if, if she gets elected, she will have nothing to, she owes nothing to the Biden administration. So it is a legitimate chance at like an actual reset. And the context, the data points that we have, it's not just, these three statements that have come out in this last week. It's also Mark Cuban, who, you know, Mark Cuban, very Democrat, wants Kamala to win, very biased. He says, I talk to the Harris team today, who told me in no uncertain terms that they are against regulation through litigation. And then he says, see you later, Gensler, you leaving is worth a point growth in GDP. Also, this Axios article has

this interesting title, Harris embracing crypto in overture to young men. I think the claim here, the claim here, I think, is that the Kamala administration is ceding the media with preparation to fully pivot, quote, pivot. If there was going to be a pivot, these, in my opinion, would be the signs. And not just that, Maxine Waters, also turning around and trying to get stable coin legislation. All of this is happening at once. And to me, this is positive signaling that the Democrats are now finally caving to the power of the crypto industry and need to do something, need to answer to something. Okay. So I will say it's gone beyond like they're a little bit farther than they're not trying at all. And now they're at their stage where they're like barely trying. I do think that a lot of Democrats in Congress have actually pivoted. The Maxine Water statement, we even heard her yesterday, I mean, or earlier this week, she was talking to the congressional hearing. Hey, I want to do a stable coin bill, right?

We got some dealmaking to do. Let's get a stable coin bill done. I think that is starting to thaw. I also totally know that the Harris campaign has seen the polls, and they need young male voters. And many of these young male voters are disproportionately crypto advocates, right? You know that 20 to 40 age demographic of males that she just doesn't have? So I can totally understand why she's like edging into it.

But when you start using the P word and pivot, we like that is a bridge too far to like maybe maybe this is pre-pivot it is a technical pivot as in like the democratic party has been hammering crypto them doing nothing is a huge change of direction already them like going from hammering crypto to doing nothing is a change of direction doing the most marginally positive statements is so incredibly different from what is currently happening which is we are being smothered by them but in order to earn the P word, I think. It's kind of like stand with crypto where you got to earn your B if you're supportive of crypto. I do not think that Kamler deserves a B right now.

Okay, but I don't think she deserves a pivot at all because in order to like, she said she wanted to remain dominant on blockchain. In order to do that, what you need to do, fire Gary Gensler, stop Operation Choke Point, unwind Sab 121, fix fit, sign that, rescind the SEC Wells notices to six of our U.S.-based crypto company, support stable coin legislation. reign in this anti-I-R-S-D-Fi rulemaking that's happening right now, draft pro-C crypto-DNC policy, and stop sanctioning smart contracts like Tornado Cash. Do you think she is prepared to take any of those actions?

Because that's what it requires to remain dominant in blockchain, as she said. I'm mostly focused on the change in trajectory, where first we had nothing. Now we've had three things out of the Kamala campaign in the last week. and then you also get this Maxine Waters pivot-ish and the change in trajectory is kind of like what I'm focused on. We definitely need more.

Like it can't just like stop here. But like, come on. Like that's three data points, four data points all in a very short amount of time. That is something. I do think that the Mark Cuban, by the way, there was another clip. I don't know if you saw him on CNBC,

but he was like, I want to be, I want the Gary Gensner's job. I want to be the SEC chair. I don't know if you saw that. That has to be cord. I know he's working, like, directly with kind of like Kamala Harris people. It's got to be coordinated in some way. So maybe there's some signal there.

Yeah. But bottom line for me is it's going to depend on who she surrounds herself in her administration. 100%. She can say pro-crypto words, but if she puts brat, I can't pronounce his last name. We're going to talk about it later. If she puts brat back in power, then like, I don't care about your pro-crypto words. Like, that's an anti-crypto action. All right.

Well, okay. Leave that as the line for like sort of what a, true pivot means because if she takes the Operation Chokepoint Biden administration and forklift and puts them in the same place and that's her new administration. So she takes Biden's choke point people and she's like, this is mine now and it's the exact same people running the show. You're going to get the exact same results. I agree with that. I agree with that. Getting into the markets this week, which are very, very green. And if you were using the products that we talked about last week from our friends and sponsors over at Index Co-op, they are even more

green for you, sir. Index co-op is producing these leveraged ETH tokens, this 2X ETH, so the 1.73% that ETH is up in the last 24 hours, it's up more on the week. You would have gotten 3% using the index co-op ETH-2X

token. This is a leverage token that just uses AVE and Uniswap in the background. It makes a leverage position in AVE. And you can buy that as basically a tokenized position. And so you can get some leverage East because, you know, it feels, we're feeling bottomy. Prices don't feel exuberant.

Prices feel low. This is my take. This is not anyone else's take. You shouldn't follow my take, but that's kind of how I feel. And so since this is a leverage OV position, the fees are lower generally than when you are using perps, but not always. And this is for non-U.S. citizens. Sorry.

You should emphasize because of the administrative state. Because of the Democrats. Because of the Democrats. Thank you. Because we are still in very much a pre-pivot. scenario with the administration that's in place right now. So Americans cannot use this tool. Unfortunately, David, tell me about the markets this week. Bitcoin. Yeah. Starting the week, 63,700 was where we started, up 3.5 percent, a solid 3.5 percent to 65,300. Yeah, that's right.

I'm sorry. Good week. Good week. Good week. Eath Price starting the week, 2,480 up. Ryan, are you ready? I'm ready. 8.2% Well done, Ether. Well done, Ether. I've been ready for months. Okay? We got one week.

8%. One week of really good gains on Ether. Currently clocking in at $2,650 US dollars. You think we get to 3K in October? It's coming up. I think 3K could come real fast. I think we could honestly see 3K by this weekend. That's like totally within the cards.

Do you know what? Especially, David, if we see these flows. You see that ETH, ETH, ETH. flows the last two days prior to recording this. Okay, so I was actually paying attention to this. This is really interesting shenanigans going on. And I think, I mean, we already kind of know that this is happening, but there's some parallels with both the Bitcoin and the ether flows.

On September the 23rd, we had net outflows of $79 million, which was basically all coming out of gray scale, bad day. The next day, we had $62 million of inflows into iBit, into BlackRock. And if you flip over to the Bitcoin, we're going to... coin ETFs, you see something very similar. You saw $40 million out of Grayscale on the 23rd and then $99 million into Black Rock on the 24th. This is like one dude, one institution, one organization. Wales moving their money. Wales moving just like yonking it out of Black Rock, yonking it out of Grayscale, paying their taxes. That's why there's a little bit less there because you don't think they're

just bearish. You don't think they sold? They paid taxes. That's what we'll say. I think they, I think they pay taxes. For selling. And then they put for selling and then they put it back into Black Rock. And so the last two days of the Bitcoin ETFs plus 136 million plus 105 million. And then with the ether ETFs plus 62 million, followed by plus 43 million. I think two of the biggest days of inflows into the ether ETFs. Ether ETFs still have a lot of catch-up to do coming in negative 581 million, even after the $100 million of inflows over the last two days.

but man, some really big days, real, real big days. Do you think this will help, David? So more news this week is a pretty big deal. The SEC approved options for BlackRock spot Bitcoin ETF. The first time ever has never happened, never had SEC approval of options for a Bitcoin ETF. So what is this? Why is it significant?

This is the first ever actual physical delivery of an options product for TreadFi. I think we already had options on CME, but. I don't know how popular those are, at least in comparison to just like whatever BlackRock is going to be able to service you in like the normal places that you get options. It's physically settled, which is the big differentiated from your options trading. And so this is this will all happen on regulated U.S. exchanges. And this will also just produce net demand for Ibit for BlackRock. And so this is part of when we said like, oh, these, you know, these ETFs are going to go live. and then they're going to like age like wine.

This is another just module. This is why the ETFs are the money Legos for TradFi. We just are climbing on the options money Lego onto the ETF money Lego. And now all of the demand for options, which is way larger than Spot, by the way. Oh, yeah. In volume terms. Right? Like derivatives are like 10 to 20x the size of underlying market caps in a lot of different

of these types of assets, right? Yeah. I don't know what that means for like TVL or in. boomer speak, AUM. Yeah. But still, it's more. Well, one thing we know that it means is when you have, when you have devices like this, you have a lot more liquidity, right?

So large institutions can now feel much more comfortable buying in size, which is sort of what large institutions like to do because they can buy in size and they can also exit in size at any time so they're not kind of hemmed in. So it's a pretty big deal. Keeping an eye on the ETH Bitcoin ratio these days, 0.04. is where it's at. So keeping it in the head above 0.04, which is also still very goddamn well.

Was this the bottom? Did we see it last week? Honestly, that looks like a fair bottom to me. I don't know, man. Can't go to zero. Are you keeping up with our friend Ben Cowan? Yeah, he put out a pretty long video about like... He's bottom calling, right?

He's basically bottom-kalling. He's saying, like, don't ever try and time the bottom. That never works, but like we're pretty goddamn close. So, again, 0.04. on the ratio, low as fuck. Total crypto market cap clocking in at $2.39, almost at $2.4 trillion. Very, very healthy.

And we also have some movers of the week. Say, congrats to all say holders, because you are up 45% in the last seven days. Wow, nice one. So say is part of like the say-sui, aptos kind of conglomerate of vibes. Super fast L-W. Super fast chains, yeah.

Aptos is up 25%. Sui is up 25%, say the big one up basically 50%. But 50% puts, say, at $4.8 billion market cap liquid. Aptos is at 9 and sui is at 17. So there's actually a pretty far gap between the valuations of these things.

Yeah, do you think so, are these the Salonah killers? Is that kind of... This is this set of the people that are now vying for fourth plus. If you believe that Solana has clinched third, these are all now going for four. A lot of tweets, right? Basically, like, okay, for everyone who missed the Salana trade, the sole trade, what do you do next? And people are saying, at least this week it was say.

That's the week to be in. Right. And then once one of these three projects clinches fourth, then it's like, all right, who's going to be the say killer? And then that person is going to clinch it and then like, all right, who's going to be the say killer killer? And then we've been doing this for so long. Euthanasia rollercoaster. Round we go. I can't wait.

That's what the bull market's all about. It's bullish, though. You start to see these alts going crazy. Something else that's bullish. Vitalik was bullish on this. He said, this is amazing to see. Improving worldwide access to basic payments and finance has always been a key. And it's great to see Sello getting traction.

Okay? So Sello, apparently, just passed Tron in daily active addresses for stable coin usage. So Tron has been a killer with respect to actual. real-world usage of stable coins, particularly in emerging markets. Strawn has just been crushing it. And this is Selo actually passing them. I don't know if it was a sustained pass, but at least for a few days in daily active addresses for stable coin usage.

So not total volume, but like small mini-transactions. They're saying a lot of this growth looks like it's coming out of Africa, places like Nigeria potentially, and Vitalik weighing in. Now, is Selo, David? Is this a fully-fledged layer two? yet? Like, are we at stage anything? No, not yet. It's currently an EVM compatible layer one. It's had this governance vote to turn itself into a layer two. But that's not like a trivial thing to do. So that is in process.

But it will eventually one day become an Ethereum layer two. Of course, thanks to Mantle for this nice layer two update. And I forgot to thank Cracken for the charts early in the episode, just beautiful charts, especially when, you know, each is up 8% on the week. Yeah. Keep them green. Keep them green. Cracken. Can Cracken just yoink the sell button? Yeah. Why don't they do that? Yeah, just for a little while. Just a week or so. Just a week or so.

Just a day, you know? Yeah, just see what happens. See what happens. Okay, you ready for the bazooka now? The Beijing Bazooka? Did you make that term? No, I stole this term. Okay, great artist's deal. That's what I'm doing here.

This is Mike Nato saying the Fed started its easing cycle. That's what we talked about last week. Was it last week that rates went up or the week before? Something like that. It was between those two things, yeah. Okay. Powell, you know, cranking up rates. So this has ripple effects all over the world. One of those ripple effects, it appears to be, is China. A lot of compounding factors going on that's giving us potentially this Beijing bazooka. So this is Michael Nato. The Fed started its easing cycle, which had given China the permission and runway to go into high gear with quantitative easing. China, quantitative easing? Hey, that was our term. We do QA, QE. in the U.S. It looks like they're going to do it as well.

So here's what's happening. The context is China is currently mired in deflation right now. Okay. So not inflation. Deflation. And growth is slowing at a standstill. Hard to get good data metrics out of China, but like everything that people can see.

Okay. So what do you do when you have deflation and when you have slow growth? Well, you start printing money, David. That's what you do. Generally, deflation comes from. from a lack of supply of monetary base. Easy solution. Yeah, you're like, oh, we can just add money to the economy and it grows more.

Like, why wouldn't you do that? So this is an article on Yahoo Finance Wednesday, September 25th, what China's biggest stimulus since the pandemic means for U.S. investors. The biggest stimulus since the pandemic, that's what they're calling this. And so let's talk about the monetary stimulus here. So on September the 24th, the People's Bank of China, that's their Fed, announced a few things. They were going to cut the reserve requirements for banks by 50 basis points. They were going to lower interest rates by 1.5 percent.

150 bips? I don't know. It's like maybe it's a different thing. But yes, 150 bips, David, if we want to convert that into bipage. Reducing interest rates on existing mortgages by an average of 0.5%. There's a few other 0.5%. There's a few other things, but it all amounts to basically injecting more monetary supply into the Chinese banking system. So that is full on QE. That is full on growing the treasury on the balance sheet of the People's Bank of China. And we call that money printing, David. And that's the Beijing bazooka. Are you ready? Because that's not all. But have you absorbed that? I have absorbed the bazooka, yes. Okay. So fiscal stimulus too might be coming. So everything we just talked about is on the monetary side.

So that's the central bank side. We also have the fiscal side to talk about, which is government dispense. Chinese government spends. So equivalent in the U.S. of like, you know, Congress approving some infra plan to just like inject a trillion dollars in the economy, whatever. So this is a message from Walter Bloomberg saying China to issue 284 of a billion of sovereign debt as part of fresh fiscal stimulus, according to sources. Some of the fiscal stimulus support measures could be unveiled as early as a billion. this week. So the QE is in process. The fiscal stimulus is still developing. We don't know all of the details, but it looks like we're not getting just one bazooka. We're getting two bazookas.

One on the monetary side. Dual wielding bazookas. Dual bazookas from China. So I mean, I don't, it sounds like, I feel like it feels weird to be excited about all of these, you know, this money printing. So I don't want to get listeners, you know, get them, confused by the tone of this conversation. But I mean, it's bullish for our crypto assets, David, because they are scarce. They are not sovereign instruments. And because it points to a new era of money printing. So, you know, like fiat's going to continue to inflate. This has been Michael Pilitos takes about like why the L1 trade will always be a thing. Because L1s are always like commodity monies. And even your most highly inflating layer one asset is inflated. Is inflated

much less than your respective fiat currency. And when the second biggest economy on the world is just doing, you know, quantitative easing, quantity, easy money, inflation, lowering interest rates, like, this is just good for crypto across the board. This is what our industry is supposed to protect against. Is it really this easy? Like, we just have to hold until they print money? You know what?

It's right on track with Rao Paul's Banana Zone conversation, right? Which is like, you know, money printing, money supply, global liquidity. is now on the uptrend, and now we're seeing China, you know, throw their hat in the ring. And so other economies may follow. Maybe this positions us perfectly for October and a strong crypto Q4. Wait, oh yeah, I thought September was supposed to be the worst month in crypto and then October was the best month in crypto. September wasn't that bad. It wasn't that bad. But maybe this was the worst month. And the next months will be glorious. Maybe it'll be the banana zone. What do we got next?

Coming up next, the SEC, the entire SEC, all five chair commissioners and the chair, Gensler, appeared at Congress. It was pretty good. I was thoroughly entertained. Hester, getting a voice was awesome. Richie Torres just hit it out of the park. We're going to play some clips so you can catch up on all that. And also some jail updates. Caroline Ellison, going to jail.

We got the number. She has to forfeit a bunch of money. So all of this and more. But first, we'll talk about some of these fantastic sponsors that make this. show it possible. Especially Cracken, our preferred crypto change in 2024. If you do not, have an account with Cracken, consider clicking links in the show notes getting started with Cracken today. If you want a crypto trading experience backed by world-class security and award-winning support teams, then head over to Cracken, one of the longest standing and most secure

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I think what's happening is that we're trying to be ambiguous because the legal precision carries with it real implications. And this is why people have been coming to us and saying we need clarity. Is the token itself a security or is it part of an investment contract? Is it being sold together with an investment contract? If it is, what is that? investment contract and how long does it track along with the token? By using imprecise language, we've been able to sort of suggest that the token itself is a security apart from that investment contract, which has implications for secondary sales. It has implications for who can list it. And I think this is absolutely, we've fallen down on our duty as a regulator not to be precise.

And so talking into a footnote that, yes, we admit that now actually the token itself is not a security. That's something that we should have admitted long ago and that's for the wrestling with the difficult questions. Dude, look at this smile on her face. Give her a mic to drop. Absolute boss. She just destroyed it.

The words that we have always wanted. Yeah, she has two seats down from Gary Gensler as she's saying this, right? Like, they're separated, I think, by two other commissioners, basically, and Gary's the side. And right in front of Congress, just like, yeah, we're doing a terrible job. Yeah, we're fucking up.

Sorry. And by the way, she kept going on. This was one of many fantastic clips of Hester Purse. And she kept just being like, like telling it like it is. Like we're falling on our duty. It's the chairman's fault, by the way. He has, they kept asking, is it Chairman Gensler? It's like the existing leadership that's bringing you down this path.

And she was like, yeah, that's what's happening. I loved it. And by the way, bankless listener, that was David and I live streaming this. That's why you heard us kind of laughing. the background. So we were watching this whole circus live, right? It was fantastic. And then I think our second favorite part, or maybe our actual most favorite part, was Richie Torres. After his first home run against Gary Gensler talking about the tokenized Pokemon card, is that a security? I think he went back and, you know, did some training, did some, did some imaginary sparring against Gary Gensler,

and came back even more prepared to ask the following question, which you're going to hear. right now. See, here's the danger I see with the Gensler theory of investment. It's actually the Supreme Court's theory. Well, your interoperative, your idiosyncratic interpretation of the Supreme Court's view, the expectation or promise that an object could appreciate in value or that an object could be sold at a profit in the secondary market, that expectation or profit could be retrospectively attributed to just about any collectible or any consumer good or any any piece of art or any piece of music. The trouble with the Gensler theory of investment contracts

is that it's so open-ended that it lacks anything resembling a limiting principle. It blurs the line between collectible and security, between art and security. Ms. Crenshaw does requiring artists and musicians to register art and music with the Securities and Exchange Commission raise a First Amendment concern? First Amendment expert, but I would think

The only thing that I have to be registered is what the Securities and Exchange Commission are securities. And so that's what I would look to determine whether they have to register. Dumb answer. Now in the Stoner Katz case, the SEC not only prohibited the creators from selling NFTs,

the SEC ordered the creators to destroy the NFTs. Does the instruction of artistic expression by government Fiat raise a First Amendment concern? Again, I- You're not a First Amendment expert? I'm not a first amendment. Do you think artistic expression is protected under the First Amendment?

Do you need to be a First Amendment expert to answer that question? I think the ins and outs of First Amendment law are actually very nuanced, so I would not want to open. Do you think the SEC has an obligation under the First Amendment to take care not to have a chilling effect on artistic expression on the blockchain?

I think we can work together to advance the interests of the industry. And I think our markets are the highlight of the world because of the laws that have been in place for 90 years. You're not answering my question. In a September 12th court filing, the SEC had to apologize for using a term it invented out of thin air digital asset security. The fictional term digital asset security perpetuates the false narrative that digital assets in themselves are securities. In the Howie case, as you know, Mr. Gensler, the Supreme Court never held that orange growth. in themselves were securities.

The Supreme Court held that Orange Groves can be part of investment contracts, which are securities. That's such a good point. The same logic applies to digital assets. In my view, using the term digital asset securities is as intellectually dishonest as using the term Orange Grove securities. Mr. Genza, would you ever use the term Orange Grove securities? I don't believe I have.

Oh, would, right, because it gives the impression that Orange Groves in themselves are securities. and that would be misleading. Damn. I was ex far. Ooh, God. That was good. Oh, no. I love that we are watching our own reaction video.

Yeah, there's something self-referential. But I believe in all of my reactions that I did when I gave live. I wanted to do them again. We emphasize it. That was great. That was so good. Orange Grove Securities. Yeah.

I mean, that's kind of the summary. That's what we were there for. You saw Richie Torres. actually asking Caroline Crenshaw these questions. There's another commissioner. Right. He's pretty much towing the Gary Gensler line around all of this. So anything Gary's support, she's like, yep, me too.

And it was so good to see someone else in the hot seat. Did not have a reply on whether NFTs are artistic expressions or how in the world a JPEG or a Yankees ticket could be a security in any form. And then just taking them to task for inventing terms like crypto asset securities don't even exist. And, like, just completely, like, hammering on that. He did it. He just did a fantastic job.

There were others to you, David. Tom Emmer just went absolutely. Oh, my God. Tom Emmer would just spit fire. Nailed them. Yeah. But there was no response, right? He was just like, I'm going to say this to you.

Yeah, I've received my time. Yeah, he's pro at rescinding his time. Yeah. It is a little bit frustrating that, like, when Richie Torres started, he started talking to Gary Gensler. and Gary Gensler said He did the whole The thing that you just heard basically

And then Gary Gensler was like I think I know where this is going Gary Gensler knows who he's going to be bullied by When he comes into this hearing He knows Tom Emmer is going to slam him He knows Patrick McHenry is going to slam him He knows Richie Torres is going to slam him And all he has to do is kind of just survive

And then he gets to go and walk home at the end of the day Oh yeah Which is a little bit frustrating Like he just has to make it through These like five minutes of break minutes from very good points. And this is why Caroline Crenshaw is like filibusterings. Like I'm not a First Amendment expert.

Like that's not, you're just saying words now. Yeah. Like it's a little bit frustrating. Things we're not playing, of course, but that we're also present, is there are some members of Congress, like the Brad Sherman's of the world who are completely high-fiving Gary Gensler on what a fantastic job he's doing cracking down on crypto. It's like, I just can't bear to listen to that again. It's so cringe, yeah.

So Gensler was there for the berating. but he was also there for like the high fives and the cheerleading from other members of Congress. Maxine Waters was just like the SEC has like done such a great job, recouping billions and dollars of fines from people. Yeah. It was good. It was my favorite congressional hearing that I've seen so far, mostly because of Hester Purse.

Top five congressional hearings. All right. Tell me, give me the jail updates, David. You promised some jail updates. Jail updates. Okay, so I know it's no Sam Bankman freed, but Caroline Ellison,

the lieutenants of sorts, also ex-girlfriend of San Bernard McFried has been sentenced. So she is getting two years for her role in the FTX case. She's also ordered to forfeit $11 billion, which she definitely does not... She doesn't have $11 billion.

There's no way she just has $11 billion. Yeah. The crimes which she pled guilty to carried a maximum sentence of a 110 years in prison. Her lawyers argued for no prison time due to her cooperation. Same judge.

as the SBF case, Judge Lewis Kaplan said at the sentencing hearing that he wasn't comfortable with remorse and cooperation being a get-out-of-jail-free card in one of the biggest financial frauds in history. Caroline said, not a day goes by when I don't think about all the people that I hurt my brain can't even truly comprehend the scale of the harms I've caused. This doesn't mean I don't try. Yeah, a lot of people were upset by this. Like, only two years versus SBF. And who was the other guy, Brian? I think, like, it's something got 10 years or something like this. And you know, like, I don't necessarily disagree with that, given the severity of her crimes. But I will say, this is basically plea bargain stuff. Do you know that whole, the game theoretical prisoner's dilemma, right, where there's that box outside of the, you know, when you're trying to calculate the Nash equilibrium of the defect box. Yeah. The defect is always bad, but not that bad. Yeah. And if you defect, you know, you only get two years, right? And it's literally what she got. So she defected. It was prisoner's dilemma. And, and, and, you defected, it was prisoner's dilemma. And, and, and, you defected. And, and, you know, And Sam Bagman-Fried was in the wrong quadrant.

Yeah, he was on the don't defect. Don't cooperate. Well, he had no choice. He's going to defect on himself. He had like no choice. But, um, yeah, that's true. Yeah. So he could have, like, he could have like pled guilty.

Uh, he could have not taken the stand. And then hopefully have just like, like, he just did not cooperate. He like did witness tampering and all that kind of stuff. Well, I think if Caroline didn't help his case. If Caroline didn't cooperate, they probably would have both gotten like 10 or 15 years. Yeah, she would be 10 plus years. Yeah.

So now, I would have defect, I would have defected so fast. Two years in jail versus, what do you think's going to happen, Sam? You know your game theory, buddy. Oh, by the way, do you hear this?

It wasn't even in the agenda. Sam Bankman, in a weird twist of fate in the universe. Sam Bankman Freed is now in the same jail cell as P. Diddy? I have intentionally not looked at any P. Diddy News. I don't care about P. Diddy News.

I don't know what party. he's gone at. Not my story. Don't care about it. Well, he is... Yes, SBF is in jail. I'm sure they're talking about, you know, crypto and what, you know, like, what assets to buy. Like, how do we all get in here?

Can you imagine that? All right. Okay. Third update. Third jail update. More jail. CZ is getting released from jail because it's been four months. So after four months in prison after pleading guilty, he will be out of jail.

This does not mean that he gets to return to Binance. He is forever gone from Binance. But he is in. getting out. I hope he continues up with that education startup. I was really excited about that. I would I would love to talk to him. CZ if you're, well, can you get podcasts? Someone on CZ's team, we'd love to have, you know, kind of your crypto exit interview. So come on, thanks. Let's talk about it. Also, how was jail? Yeah. Different jail experience. Different jail experience. Different video over there.

Coming up next, Nick Carter says the feds murdered, murdered. It wasn't suicide, some banks as part of choke point 2.0. David, you're going to have to give me the details on that one. And the Salana breakpoints announcements, what were the most interesting ones? We'll get to all that. But before we do, we want to thank the Layer 2 that made this episode possible. That is, our friends over at Mantle. They have yield-bearing, ETH tokens. Go check it out.

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And don't forget to claim your free uni.eath username directly in the mobile wall. Start swapping smarter with Uniswap. Launching a token? Don't let complex legal and tax issues slow you down. Toku provides specialized support to optimize your launch and ensure that you as a founder and your team and your investors get the most tax-efficient outcomes. The Toku team understands the crypto space inside and out and will ensure your token launch is fully compliant while maximizing.

tax efficiency. Toku can connect you with the best attorneys if you need them to make sure that you have the best advice and Toku can help to optimize your taxes so you pay the least possible amount of taxes while still maintaining legal compliance. With Toku's guidance, you can concentrate on building your company while Toku handles the logistics. Token launches don't have to be complicated. Talk to to Toku today to get a free initial token valuation. Ryan, we need to go back down into history, into Memory Lane, back into March of 2023 to the Silicon Valley banking crisis that also took down Silvergate and signature banks. The focus of this story is going to be Silvergate, but I think the other banks that also

shuttered during that time are also highly relevant here. What do you remember about March of 2023? What do you remember about that story? So there was a bank crisis, right, of sorts, and a lot of people, like the narrative was basically that it was the Silicon Valley bros and also the crypto bros, maybe disproportionately the crypto industry that was doing risky. nefarious things, you know, go look at Stembank Medfrey and FTCS. They're doing more of that only in our banking system. That's what Silvergate is doing, signature bank is doing, they're doing

all of these risky loans. And so withdraw your funds, there's a run on the bank. There's a fraud going on. Elizabeth Warren was saying things at the time about the, you know, these nefarious banks and how people should withdraw funds from them. Later, I believe there were actually charges by the SEC dropped against Silvergate Bank. So it's basically like these banks were, these crypto banks were engaging in risky behavior and fraud, and they needed to be shut down. And they did shut down in the aftermath of that. Yeah.

And notably, Silvergate, Silicon Valley Bank, Signature Bank, Silvergate especially, and also signature especially, were crypto banks. They had over 65, 70% of their depository base coming from crypto customers. And why was that? Because they were the only banks that was satisfied. crypto customers, like all of the big banks, Bank of America, which they wouldn't serve any. They don't serve us. They kicked bankless out. They, they kicked most people out. And so that opportunity of serving crypto customers was taken up by Silvergate, Signature,

and Silicon Valley. And again, primarily Silvergate. And that's, so at the time, it caused all sorts of chaos, like USC, even wobbles, right? Had to get different banking customers. It caused all sorts of chaos. But anyway, that's the official narrative, that these banks were engaging in shenanigans, but in particular, silver. Gaveit Bank was. Yeah. And also notably, FTX, Alameda Research, banked with Silvergate. And so there's a bunch of just, like, unfortunate proxy facts that don't put Silvergate

into, like, the best light. And so this narrative is, like, not hard to spin. Silvergate voluntarily liquidated their bank. And that actually raised a bunch of eyebrows because, like, voluntary liquidation implies that you actually don't need to liquidate. And so this is kind of the story that I think Nick Carter was. investigating, and this is the article that he published, he revealed in Pirate Wires, after some new statement, some new evidence came to light that this voluntary liquidation was perhaps due to

unconstitutional choke pointing by our regulators. New evidence suggests. He said that the regulators came in and murdered the bank. He said it didn't die from suicide. It died from murder. Okay, so let me run through some of the highlights of this article. So March 8th, 2023, Silvergate leadership announced intention to voluntary liquidate the bank. An unusual move. Normally failed or failing banks are sent into receivership, then sold off to larger, sounder banks. But given the risk of criminal liability from the FTS fiasco hanging over the banks,

maybe it just made sense to shut down completely. That was the thought of the time. Sources are saying that a newly imposed 15% crypto deposit limit rendered Silvergate's core business model unviable, contributing significantly to this demise. That's one of the new things that is, being unearthed that the regulators came in, all of them, FDIC, the SEC, the Federal Reserve, saying, hey, unofficially, if you guys have more than 15% of your deposit base coming from

crypto customers, you can't. You got to stop. You got to get it down below 15%. Having a 15% cap on crypto deposit limits would render Sen, S-E-N, CigNet, and C-B-I-T as products, which is render them useless. What are these things? Silvergate Exchange Network CEN is a crucial piece of infrastructure for crypto's institutional players for inter-exchange settlement. So imagine just like all these crypto exchanges being able to actually send banking dollars instantaneously beyond business hours. This was just infrastructure to allow all of their KYC'd customers to send money between each other. So signature had one of these things, Silvergate had one of these things, and also Customers Bank had one of these. These networks were like

the lifeblood between the traditional banking system and crypto basically. Exactly. It's the flow. So this newly 15% crypto deposit limit just renders that useless because you need to have a critical mass of crypto customers under the same banking roof. This is an internal banking infrastructure. It's an internal product. Additionally, following the liquidation, Silvergate faced regulatory actions, $20 million fine from the California Department of Financial Protection and Innovation, $43 million fine fine from the Federal Reserve, $50 million settlement with the SEC. All of these like fine settlements, enforcement actions coming in and being. Not a good look. But notably, after paying these fines, Silvergate had over $100 million remaining on its balance sheet.

And then also, it weathered the storm of the banking crisis. So post-banking crisis, Silvergate had paid fines and was also sound. They made it maybe by the skin of their teeth, but they were having inflows back into the bank as Bitcoin appreciated, crypto deposits appreciated. They had an incoming inflows into their bank. and that's when they decide to voluntarily liquidate. Critics argue that these regulatory actions and fines were attempts to establish a public narrative of mismanagement

rather than acknowledging the impact of the behind-the-scenes regulatory pressures. The situation raises questions about the true motivations behind the regulatory approach to crypto-friendly banks and the potential for regulation by bullying in the financial sector. So the claim here is that these fines and these enforcement actions are like just kind of painting silver, Signate Silvergate in a really bad light to cover up the fact that the real reason that they had to shudder was that a crypto bank who serves crypto customers, who gets their revenue and

profits from crypto customers cannot be a crypto bank if they are imposed upon a 15% limit on the depository base. The 15% thing kills the banks. It's like going to smoothie king and saying you guys can only, smoothies can only be 15% of your revenue moving forward. It's freaking smoothie king. That's what they do. They sell smoothies.

If you do that and you impose that. You don't have a smoothie king? I've never heard of smoothie king. What kids love it. They sell smoothies. That's all they do, right? I figured. And you destroy the entire revenue source.

So that's why they shuddered. Now, in all of this, Silvergate may not have been perfect through all of this. I don't think that's what Nick is necessarily implying. He is implying, though, that when Silvergate got through this crisis, so the skin of their teeth, the regulators came in and gave them a beat down, an absolute beat down to the extent that they just like could no longer survive. It was no longer worth it for them to survive. So they basically murdered the bank. They caused it to cease to exist.

And regulators can't do that to private companies, can they? It's unofficial guidance of like, hey, you're 15 percent, stay below 15 percent or else. And so like coming out of this banking crisis, which a part of the story is the inciting of that. banking crisis by senators Warren's comments and also potential collusion with infamous shortseller Mark Cohodes who created this fake but convenient story and also apparently sent it around Congress and the Senate to be like hey look at look at this like look at all the fraud that's going on over there like these people should go and then also doing the short selling and so like Elizabeth Warren and her comments are being incited as like part of the reason why there was a bank run in the first place

but Silvergate made it through all of that. It was maimed. It was harmed. It had fines to pay. It had a diminished depository base, but it was alive. But it was so weak that the regulators just were able to take it out back and shoot it. And I was like, oh, everyone was like, well, that thing was going to die anyway. So it makes sense that it's dead.

I get it. It's a compelling story. There's some facts and evidence on the Nick Carter take here and then the counter narrative take that I think should be invented. What I think we need, David, is what I would support is a. congressional hearing on this. It's what you should be doing. If the government does something that is constitutional, it's like not totally proven, the facts aren't out there, then do a congressional hearing. I think that's where this should go. Nick's final notes in his article, killer article, not just because of just the evidence and the analysis, but the prose is also,

he's such a good writer. Yeah. So his final notes, even when I was initially investigating Silvergate and signature, a number of bankers sympathetic to my cause, told me it wasn't worth publicly support. Silvergate, muttering ominously that the bank may have indeed done some reprehensible things. But this ended up not being the case. Silvergate was a victim of a scathing and unconstitutional regulatory crackdown, an imperfect victim, but a victim nonetheless. Ultimately, it's precisely these marginal cases, the ones that no one wants to stick up for, where we have to draw the line. What happens to Silvergate was a travesty and the public deserves to know the truth. Sympathetic members of Congress should hold a hearing and give executives at affected banks the chance to testify

with a waiver on criminal liability for sharing confidential supervisory, supervisory information. Let's get a hearing. Let's do it. Let's get a hearing. There are members of Congress. There are senators who listen to this podcast. Let's get a hearing. Let's get Richie Torres to ask some questions there.

Let's get some richie Torres asked some question. That's right. David, Eigen layer, the airdrop. Well, no, not the airdrop. The tokens become transferable. When does that happen? Very, very soon. The transfer restrictions on the Eigen token will be removed on the 30th.

That is in three days. So if you are staking your eigen, that there is a seven-day withdrawal cooling period. So if you want to get liquidity on your eigen tokens, you actually need to go press that button because you won't get the tokens unstaked for seven days. the current valuation of Eginlayer on perps, treating at $6.5 billion valuation, which I think is a lot lower than I think people once upon a time hypothesized about Egan layer. Were you in the double-digit Billy Club? There was a lot of double-digit Billy calls for Egan-Layer. I think 6.5 is much obviously much more closer to Earth.

I thought this, you want to explain this meme? No, I have never seen this meme. And this is Jimmy, Jimmy Rag, JRAG on Twitter has like become one of my favorite Ethereum. It's not just memes. It's just like really good takes. But he's got this Jesus take the wheel meme, but it's not Jesus. It's Sri Ram. And he says, because of the seven day withdrawal period, I'm strapped in on the roller coaster

for the first few days of eigen trading, Sri Ram take the wheel. And then the quote is like, I'm not riding eigen to zero Sri Ram. And then Street Rahman is saying, ha ha, do it. It'll be fun, law. There's no way Agin's going to zero. But, you know, give me.

Tell me what happened at breakpoint, David. You tell me. You want me to tell you? I want me to tell you. I want you to tell me. You're right, because you are the sole bull. So it would be more neutral coming from me, right?

It's like, I'm going to temperate a little bit. You're the Bitcoin Bowl or a soul bowl? I don't know. Why do I get the non-eath bowl labels? Okay, so three things I think are worthy of highlighting. The first is this. This is a client. upgrade and a client that the Salana community has been very excited about Fire Dancer.

So the early version of a new Solana client called Fire Dancers now live on Maynet. They're calling this Franken Dancer. I think it's not, it's fully formed. So there's some Frankenstein elements to it, it appears. So this is going to be an incredibly fast Solana client and really crank up. This is the merge for Solana. Yeah, it's, yes. It's a big deal for like if you're from, you try to be.

if the Ethereum merge was a big deal. This is a thing that the Salana community has been excited about for a very long time because it's fulfilling the social contract was just like you just jack up, max up. Transactions per second on Solana. All other things are secondary. Just do that. Just do that.

So the key benefits are improved performance. The idea and test net results achieve one million transactions per second in synthetic tests on the 100 nodes. That's what they showed. So Frank Fier, FireDancer. Synthetic tests. I love that. Fire dancer now running on test net. They don't know when it's going to hit the main net. So the Salana community hopes next year. I think this will be pretty competitive with some of the other really fast layer ones like Monad, for instance, that are going to be coming online. And also the layer two community like Mega-Eath, the, you know, etc. Sui and Say are also doing this. The gas movement. Yeah. All right. Why don't you take the second? So that was the first. What's the second?

Solana Mobile has introduced Seeker, a new version of the phone, a new phone. So lighter, more affordable, better camera and battery, of course. Does it come with air drops? That's what I want to know. Yeah, because that was the whole reason by buying the first one, right? It was a great investment for people who bought the original. Yeah. Okay, so there's a seed vault wallet.

So I'm assuming there's some relationship between the security of the hardware and the seed phrase that comes out of the phone. Just optimizing for security. That's pretty cool. Some other things. Dap store improvement, ZK compression on the phone. and then integrated deep in apps like Helium Mobile so you can get free four months of internet from helium.

And then also lastly, Franklin Templeton plans to launch a mutual fund on Solana. Cool. It could be anything. I actually don't know. I haven't looked in the details. It could be like bonds, equities, you know, your mutual funds. So that's, you know, Tradfai coming to Solana. Overall, I would say breakpoints sounded fantastic.

There was a lot of buzz coming from there. Aside from the actual specific announcements, I think just the big news, It was just like, apparently there's just a fuck ton of people there. It was alive and well, and they timed the announcements. They had tradfied there. PayPal representation talking about PayPal stable coin. So well-executed conference. And I think the Salon of community came back incredibly excited about the future there.

A quick follow up on the Pavel Deroff story that we started. I guess that was, you know, weeks ago now at this point, where Pavel Durov, the founder of Telegram, was arrested by authorities in, in, France. And we went through those charges there. The update this week is Telegram has said it will hand over users IP addresses and phone numbers to authorities who have search warrants or other valid legal requests. Pavald Derev said this. To further deter criminals from abusing Telegram search, we have updated our terms and privacy policy. We've made it clear that the IP address and phone numbers who violate our rules can be disclosed to relevant authorities in response to valid

legal requests. So basically, he wasn't cooperating as much as authorities wanted him in terms of revealing IP addresses and phone numbers. So Pavel Derov and Telegram, rather than being arrested, rather than being, you know, banned from various nation states, he's just going to hand over the data to the authorities. This is kind of the conclusion I expected, to be honest. If they are centralized, if they do collect this data and the authorities say, give us this data, or else we'll throw you in jail, if you're a large tech company, you will give them the data because you don't want to go to jail. So kind of an expected outcome here from my perspective. Yeah.

If it can be regulated, it will be regulated. Kind of reemphasizes the point of a signal, I think, in this day and age. All right, moving on to two raises of the week. Celestia raised $100 million in a new round led by Bain Crypto Capital, along with 1KX robot ventures and placeholder. And so this was a token sale from the foundation at some discount, I think some undisclosed discount for the actual current liquidity of the token because the idea here is if they just sell it on the open market, then they'll suppress the price and Celestius is not

sufficiently liquid. So selling $100 million of Celestia token to all of these crypto venture firms at some sort of discount. I kind of say I think Celestia is a pretty interesting project overall and they're kind of like executing something similar to the Ethereum roadmap, which is like, I saw a tweet this week on this news that was just basically like, Solana actually isn't Ethereum's number one competitor. It's not even close. Celestia actually is.

Yeah, I tweeted that same tweet out forever ago. Celeste is the only other layer one blockchain that is explicitly on the roll-up centric roadmap. Yeah, it's a module chain thesis and they're going all in on data availability, which is basically Ethereum strategy right now. So that's going to be something. We'll have to see how that all. that plays out. There's another raise on the week that was pretty exciting. Infinix. So this is Kane Warwick. Are you sure you want to talk about Kane Warwick's project when you are like days from getting into a little literal physical like punching match with the founder of this app? Choose your words carefully, my friend. They just raised $64 million. Why is this interesting? So this is a call it an ICO. They're calling it a patron sale because you are buying these NFTs. There's actually no like

explicit connection to these NFTs and like ownership of Infinex. I think it's kind of just like a big. Gary Gensler cover his ears right now. Like are we saying? Yeah, Gary Gensler, don't listen to this. Okay. But yeah, so you, the, the patron sale has been opened up to people who have been like users of Infinex, some of the yield farmers of Infinex.

There's been things to do on Infinex. And so, and there's also been kind of a white list. It hasn't been completely open to the public. But if you wanted to get in, if you were motivated to get in, there were ways to get in. You could play this one game on the website. That's the sale. But what is it? is this? What is Infinex?

So Infinex is basically trying to go after basically, you know, Coinbase, Crackin, Binance, all the centralized exchanges that also run their own infrastructure. But Infinex instead just uses Defi in the back end. So it's taking, the claim here is that Defi is feature complete with centralized exchanges, except it's just fragmented and it's got a shitty U.S. So Infinex is this thin, centralized front end that you can use to do all of the things that you're familiar with on Coinbase Crack and Finance, but it just uses the best offerings that Defi has in the back end, and it takes care of that gap. So it's not chaney. Like you're not approving transactions. You're not using a wallet. When you sign in, you don't

use a wallet. You use a pass key. So I use my password manager to manage that. It's pretty cool, right? It's very cool. It's very cool. Yeah. And we should do a disclosure too. Bankless Ventures is going to be an investor in this. So we're bullish on this. But we are bearish. Kane Warwick's potential in the David Hoffman versus Kane Warwick fight. Barish that, but bullish this. It's really good that there's this very competent man named Igor who is leading this Infinex thing because when I destroy Kane, there won't be a cane left over to lead this infinitex project.

All right. Well, now I got to go check on Polymarket. So what are the polymark ads between the David Hoffman, Kane Warwick fight? We are looking at, wow, the markets, David, they're giving you a 35% Chant. Underpriced. Underpriced. This is what I'm reading this right. Hoffman wins at a 35% chance. So Kane wins at a 65% chance. Yeah, that's how math works. That's that's underpriced. You should buy that. I was actually lower. So there's opportunity to buy. I got down to 23%, which is just stupid. Give us the case. Why should why should we be net buyers of these odds here? Well, they're okay. I typed in a full analysis because the bankless employee is like how do you think about your? You know, how do you think about? your odds here. Do you also want to give you the full analysis of this whole thing? All right. So give me the full download. I made my decision in my heart, David. Let me just say that. Okay. I know who's going to win in my heart. You already have a fuck ton of Hoffman exposure.

But I have not invested in this market yet. So give me the, give me the bull case for Hoffman, a Hoffman win here. Oh, I'm not giving you my fair calculus. I'm not giving you the bulls. I'm giving you my fair calculus. You can do with the analysis that you see fit. Okay. So Kane Warwick has allegedly not had any fighting experience. True. And so, like, he's coming from the same blank slate that I came from when I started training versus Nick back in, like, March or April. And so I've got two months of pretty hardcore five to six days a week of training during

my lead up to my fight with Nick. And so that was like sparring twice a week and coach time twice a week and then also a boxing coach twice a week. I didn't tell Nick how much, how fucking serious I was taking. that because I kept that like under the radar. Right before, when I broke my rib, I was doing a mock fight of six rounds of three minutes with two, the two like very competitive fighters who were my size at the gym. They were, they were definitely like kind of like going easy on me because if it was a true

fight, I'm sure they were going. They were probably going at like 80, 85 percent. And I was going at like 90, 95 percent, six rounds of three minutes, whereas my fight with Kane is two rounds of two minutes, which with an optional. third tie breaker round of one minute. So already like the gas tank is like way bigger than that. And that's also when I, that's also when I broke my rib when I was doing that.

Kane has had two months to prepare because I, I challenged him like two months ago. And I also did, it made a gentleman's agreement with him of just like, hey, only two days a week of either one-on-one coach time or or actual sparring time. Just because I didn't want it to take over my life. By the end of my time with Nick, I was like,

my affect was very bad because I was, doing one thing. After bankless, I was doing one thing, which was training, training and eating. And so I didn't want to, like, repeat that. I wanted to have a life. If he's honoring that, okay? If he's not, whatever. I didn't train for the first month. So I, so Kane started training two months ago, because that's when I challenged him. I started training one month ago because I was in Argentina for a whole month. And there's like, points to Kane on that. Points to Kane. Points to Kane. I was doing some cardio stuff, but not like a whole lot. Cane has to come down 15 pounds. I have to go up 15 pounds and that always benefits the person going up and weight.

Really? Yeah, because like you just don't have the same gas tank. You can't maintain strength and cardio while going down. That's a harder thing to do than going up and weight. So I'm clocking in at 173 right now, which is like, I'm going to come in at like 175, 175, 176 for the way in, and that's going to be the heaviest I've ever been. Thick boy. And let's see, Kane has a massive ego and is extremely competitive, so he's highly

motivated to win. Got to take that into account. points to Kane. And even before I challenged him, Kane said that he was in the best shape of his life, but inside of the context of free diving, so like swimming deep into the ocean, like, really good at like holding your breath and oxygen efficiency. Unure how well that carries over into fighting. There's no real like comparable level of fitness to like being fight ready. Being fight ready is like you are the most possible version of fit possible. And so that's kind of my analysis. It's a tough one. It's a tough one. I think it definitely made the bull case. That was actually

very objective, though. We saw some bull bear case there, you know, like on both sides of it. So I guess bankless listeners can do what they will with that information. The markets on polymarket are always open. 35% is so low. So low. I definitely have edge. I definitely have edge. All right. Let's end with this. This is a meme of the week. David, what are we looking at? The myth of the consensual air drop. Two people, the issuer and the receiver are consenting to air. but is there's somebody you forgot to ask because Gary Gensler did not approve of you getting that air drop? He certainly did not consent to your airdrop. You got to remember to ask Gary Gensler if you can claim that air drop. Got to end with this, of course. You know, crypto's risky. You could

lose what you put in, but we are headed west. This is the frontier. Not for everybody. Certainly not for Gary Gensler, but we're glad you're with us on the bankless journey. Thanks a lot.