Bankless - ROLLUP: Coinbase vs Apple | Crypto Market Bottom Signals | Genesis Fallout | SBF Scandal | Reddit NFTs

Starting point is 00:00:00 This is one of these tweets where, like, I just, like, sit and pause and be like, who the, who the hell is this Ryan Sean Adams man? My mind goes to like, all right, he's an AI, so he just like did Google searching and came up with this. So that would, that's just normal. Or he's a Taylor Swift fan and like have this one ready to go. Or he's a dad of a teenage daughter. It could be all three things at once. We just don't know. And I think you have to be comfortable, David.

Starting point is 00:00:27 If we're going to continue this podcast every week is living in that. ambiguity. Do you know, like you just don't really know. Bankless Nation, happy second Friday of the month. David, tell them what time it is. Oh, it's the Friday Bankless Weekly Roll Up where we cover the entire weekly news in this goddamn bear market, which is an especially ambitious endeavor yet we persevere. Nonetheless, no matter what corner of the globe we're tuning in from, which is a little bit different for me this week, Ryan. Yeah, yeah, you're West Coast. You went to the left coast. West Coast. David's back. Yeah. Uh-huh. Back in the West Coast. Beautiful, beautiful.

Starting point is 00:01:00 city of San Diego, yeah. Much of the demise of my mother that I didn't decide to go back to Seattle. Yeah, you went a little south of your mom. But, you know, she could always meet you in San Diego, right? It could be a round of view point. Yeah, that would be insulting to her. Okay, so the intro, though, you said Bear Market, but we sounded so like a beat and enthusiastic.

Starting point is 00:01:20 And I felt some energy there. Like, I feel, okay, do you know what I feel coming to this episode? David is like, a weight has been lifted off my shoulders. Oh, yeah? I feel light. November was not a great month for crypto. No, that could have been the worst month ever, in fact. Do you know how you feel like after, you say you feel after you fast for a couple of days? You got kind of the energy.

Starting point is 00:01:42 You got, I don't know if you detox fire. I call it my manic David. Yeah. In a good way. In a good way. Yeah, once in a while, not in a Kanye West way. But like once in a while, you know, you'll DM me and you'll be like, I've got some ideas. I'm like, okay, it's manic David.

Starting point is 00:01:57 And I don't say that. I'm like, it's fasted, David. Anyway, that's a little bit how I feel. I feel like we've got detoxed. And, like, I'm just feeling, even though it's a bear market, it's awesome. Clarity and thought, like, long-term time horizons. Yeah, just like fundamental optimism. Yeah, okay.

Starting point is 00:02:14 All right. Excited about 2023? Are you feeling that vibe? Or is it just me? I want to get to 2023 so bad, not because time is a construct. But, like, I don't know, January 1st, 2023, like, can we get there, please? Because then everything just goes away and we just reset, right? All right.

Starting point is 00:02:32 Yeah, yeah. It goes away. We could forget 2020. SBF is in jail. Crypt prices are up only. This is what I'm promised. We get some sensible regulation for DFI past. Right.

Starting point is 00:02:43 Well, it's Vitalik is elected president. No, he's Canadian. I don't know, man. A lot of good things maybe in 2023. We'll see. All right. Let's talk about the topics of the week, though. This is the state in the bear market where we just make shit up, dude.

Starting point is 00:02:55 No, this is a real thing that happened. Apple versus Coinbase. Apple thinks it can tax crypto, David. Who's going to tell them? Who's going to tell them that they can't tax eat gas fees? We're going to talk about that. No one seems to be able to tell Apple no, which is kind of the crazy thing. And so we're going to have to talk about that.

Starting point is 00:03:13 Also, we got some data, some fallout, some actual numbers to talk about when it comes to contagion out of Genesis and Gemini Earned. So we'll give you the numbers that we occurred that was reported. And then also coming in hot, you'll never guess, Ryan, who SBS. hired as a lawyer. I kind of feel like this whole SBF story is coming to a close. I might have said that before on previous roll-ups, but like, last week we were confused as to what the hell SBF was doing

Starting point is 00:03:40 on his public tour of talking to everyone. Now I feel like we kind of know what he's up to, and we've got some clarity there. So that's what's coming up in the big news of the week. And he's got his lawyer. You don't hire a lawyer when things are going well. So we'll see who that is in the show. You'll never guess the name.

Starting point is 00:03:57 Pretty crazy, actually. Hey, but before we get into it, got to shout out our friends and sponsors at Opelus, who have a very special message for the bankless nation. They want to provide you with health care going into 2023. That's real important. If you're a contractor, if you're working for a Dow, tell them what Opelus is, and what are they offering today for bankless listeners? Because of the burdens of nation state employment and other things in this life that we live,

Starting point is 00:04:24 things like health care, things like payroll taxes, working on the frontier of Web3 is difficult. How, as a Dow worker or as an NFT artist, or as, I don't know, a yield farmer, do you access... Well, yeah, if you don't have a company that you work for, but you're making money, how do you get health care? Healthcare in the United States is super expensive, especially as an individual.

Starting point is 00:04:48 So Opolis is a co-op for all the Web3 workers on the frontier who want to band together on Web3 fashion to come in Opolis, will negotiate for advantaged rates on your behalf. Opelis, it's a co-op. So that means when you sign up for Opelus, you also become an owner of Opelus. And Opelis just does things to help you

Starting point is 00:05:08 with your burdensome nation-state infrastructure that you need. Again, healthcare, payroll taxes, all this kind of stuff. And there is a link in the show notes to get started. And if you get started, if you get going with Opelis by December 31st of 2022, so that's like 20 days, you will get a thousand work, the token for Opelis, and a thousand bank tokens. So allow Opolis to help you do what you do best,

Starting point is 00:05:32 which is explore the frontier, but with healthcare. Web3 workers unite. That's what we need. A lot to build, and so we need a lot of work to get done. David, let's talk about markets before we get into building. What is Bitcoin looking at this week? We got the happy music or sad? Bitcoin, it's got no music.

Starting point is 00:05:51 It is flat. It is super flat on the week. Up down zero percent. Like literally zero percent? Yeah, it came pretty damn close to zero percent. And so what is that? What number are we looking at? About 17.

Starting point is 00:06:04 Oh, yeah, the number, 17,000. You're a $17,000 Bitcoin. It's also like $17,000 even. That's pretty crazy. How about Eith, up or down? Sad sounds for Eth, down two and a half percent. Started the week at 1290, ending the week where it currently is at $12.50, although it is surging as of this morning up to $12.57.

Starting point is 00:06:23 All right. Well, I can calculate the ratio in my head. it's down two and a half percent. Am I right? That's about right. That's the correct math. This is math that I can understand. Yeah, my ratio is down about two and a half percent on the week. We are down to 0.074. No real signal right now. We're just hanging out in December. This is interesting. A flat week is interesting in these types of markets. So do we feel like this is consistent with what we believe has been the case where the last domino has kind of fallen or it's, you know, it's wobbled? And we kind of know the contagion that's already happened. And we're getting into this flat period of time. What do you think? Sorry, I just got distracted by Trading View because I have it open on my phone.

Starting point is 00:07:01 Heath just pumped to 1283. So we are only down 1.5% on the week, Ryan. Again, none of this will matter by the time you listen to it. Why do we do this? I don't know, but we're going to keep doing it. Every week, we'll tell you 24-hour out-of-date numbers. And, you know, you can enjoy them or not. All right.

Starting point is 00:07:22 Is this emblematic of, so, yeah, you know, bad news, but it's, It's going on. Like still like everyone hates crypto out, risk regulation, all that stuff, but prices are flat. I feel like that's a pretty acceptable sign of like strength. Bad news,

Starting point is 00:07:36 but flat prices equals some signal of strength. Yeah. Flat prices is better than down prices. That's the kind of analysis you guys turn in for. Every week. All right. We are under a trillion two. What's the crypto market cap?

Starting point is 00:07:50 Give us those numbers, David. Can you hit refresh? So we're at 884 billion. If Ryan hits refresh, 889 billion. Look, we just added 5 billion onto the market cap, putting us at flat on the week, because last week it was

Starting point is 00:08:01 890 billion. Flat on the week, there we go. Flat, flat, flat. It's a flat week, which is okay in a bare market to have. It's better than the alternative. David, we've got to talk a little bit about the bottom signals, because that's really what folks are listening to. And I think we've talked about it in the section of markets the last couple of roll-ups, and we got some more bottom-signal-y stuff.

Starting point is 00:08:23 You decide... Bottom signals are abound. Are these bottom signals or not? You don't really know until they're like for sure a bottom, but some hypothesis. The ultimate bottom signal caller is Jim Kramer. If he tells you to sell, you better buy. You better. It's probably a bottom. And Jim Kramer, of course, this is the host of mad money, who you know and love, the great stock predictor. He says, investors should exit crypto, in quotes. It's never too late to sell is what Jim says. I don't know. I'm super bullish after I'm hearing this from Jim Crane or Kramer. What's your take on this? So Crypto Twitter and just finding, FinTwit just makes so much fun of Jim Kramer because he is the herd. He is the herd mentality.

Starting point is 00:09:08 He is the middle of the curve. And like he told people to buy coin at 450 when an IPO. Like he has all of these terribly wrong takes. And actually if you think about it, Ryan, his business model for mad money makes sense because he's trying to get attention. Attention. Yeah. Yeah, it's not about RR.

Starting point is 00:09:25 And so, like, he doesn't want, if you are contrarian, you don't want to be a contrarian as, like, somebody who's trying to get eyeballs as, like, a TV show, right? You want to dish out what everyone wants to hear. If every, if you're trying to have maximum reach, maximum broad reach. You want to have consensus opinion. You want to have consensus opinion. And that if you just have consensus opinion in the markets,

Starting point is 00:09:46 you're not going to do well. Being smart in the markets is about having contrarian bets. So this is not just a meme. This is, like, it's aligned with his business model for mad money. So, Jim Kramer urges investors to exit crypto. It's never too late to sell. If you want to be a contrarian, you would do the opposite.

Starting point is 00:10:00 I actually think that's a good take on Jim Kramer. It's not that he's always wrong. It's just that he is emblematic of consensus opinion. And this is consensus opinion. He says... Because his takes change every two weeks. It's never too late to sell an awful position. And that's what you have if you own these so-called digital assets, an awful position.

Starting point is 00:10:20 Lumping every single digital asset together. They're all the same. never too late. I mean, this is how people get totally wrecked on the dips here. Anyway, maybe a bottom signal. Here's another one, David. What are we looking at here? Just 8% of Americans have a positive view of cryptocurrencies now. A CNBC survey finds this is published on December 7th on Wednesday. And when I read this article, Ryan, I was just so reminded of 2018 of just like positive view of crypto in 2017, very negative view of crypto in 2018. It's just consensus. It's just the

Starting point is 00:10:54 herd mentality. So if you're telling me that only 8% of Americans have positive views of crypto, like that just sounds like a bottom signal. And of course, the survey is happening right after FTX. Like, people are just thinking about crypto for the first time in months. And they're like, oh yeah, FTX is bad. Therefore, crypto is bad. Yeah, well, I have a more negative view of crypto, I would say, probably over the past, you know, month. I mean, if you ask me this poll, I'm going to like, but that doesn't mean I'm not long-term bullish. And by the way, this number is. was 8% now. It was 19% in March. We got our own having here, a little cut in half. This is pretty consistent, I think, with the conversation. It's also consistent with like pricing and everything

Starting point is 00:11:36 else. It's what you'd start to expect as we hit towards the bottom. 8%. I'm still okay. 8% have a positive view. That's the silver lining. That's not too bad. There's still a chance. You guys know what crypto is, at least. What's this chart we're looking at? Yeah, this is the new low of the GBT discount. So buying one share of the Grayscale Bitcoin trust is 47% discounted to how many Bitcoins is backing it. So in theory, if you could redeem those bitcoins and you bought one Bitcoin's worth of the GBT trust now, you would get roughly 1.5 Bitcoins if you could redeem them, but you can't. If Mr. Gensler will convert that to an ETF, then you should be able to redeem it. So this is some sort of

Starting point is 00:12:24 regulatory, I don't know what you call that, Tom Foolery. If you have the longest term time horizons, could be a good buy. It could be. Not financial advice. You know, we did an entire episode on GBDC. So if folks, you're wondering what GBDC is, your thesis, David, is that GPDC is what started this whole thing. It is the lynch.

Starting point is 00:12:48 It is the thing that really started the bull market. So you can't really be too angry, but then also the reason why it all can crash. down. Yeah, it's the first domino. Anyway, there's an episode. What's that episode titled? What did we end up calling that? The thumbnail is Grace Gale and Genesis Contagion, but we renamed it

Starting point is 00:13:06 was to was 2021 just a gigantic Ponzi, which for the answer is kind of yes. You're supposed to tease, not giving the answer. Okay, but yes, it was a Ponzi. Okay, what's this? What's this chart that we're looking at? This is the coin price, the

Starting point is 00:13:22 coin base, coin Stock. A token, Jesus, stock. Yes. The traditional token, called those stocks, David. Yeah. Which Coinbase is coming in at a whopping $9 billion total market cap valuation.

Starting point is 00:13:38 Are you kidding me. What you mean whopping? You mean whopping like that's so low. Bad. Bad. That's so low. Nine billion? Extremely low.

Starting point is 00:13:46 Don't we have like alternative layer ones that are way higher than $9 billion right now? Right. So. Coinbase. For context, Uniswold. coming in at, what's the uniswap price? I think like $6.6 in a quarter, that is a valuation of about $6 billion. So Coinbase is 50% more valued than Uniswap.

Starting point is 00:14:07 And Unitoken doesn't even have any legal guarantees on the fees. Investor protections. Yes, right. And coin does. Reminder that defy tokens are just tokens. and we don't know what they are. Well, there's hope, but, you know, yeah, and by the way, there's news of more discussion about uni token fees being flipped on, but also that is really close.

Starting point is 00:14:34 I mean, wouldn't it be crazy if uniswap token price flipped from a market cap perspective coin, what does that mean? Does this mean coin is like silly low? Or like, what does this mean? Coin is silly low. Coin is silly low. I think the coin, the equity of coin base, is going to. going to outperform 99% of tokens that you see on Coin Gecko. Let me put it this way.

Starting point is 00:14:57 Jim Kramer would be telling you to sell your coin right now. Let me put it that way. It's not too late. Not too late to sell your coin. Speaking of all of these token prices, one of the things our analyst team at Bankless puts together is what we call the Bankless Token Bible. And this is kind of an analyst in a box service. If you're a Bankless Premium member, I'm actually showing some of it here. But this is usually like... Yeah, Brian's leaking the alpha.

Starting point is 00:15:21 I shouldn't be leaking this alpha. In fact, I'll flip off the page. But this is like a master spreadsheet of our overweight, underweight kind of scores from our analyst team, and you can sort of see why it's kind of a beta version of the product of what it will be in the next launch of our bankless 2.0 website and everything pretty many experience. One of many 2.0 launches, yeah. Yeah, but it's something I wanted to just shout out,

Starting point is 00:15:45 because our team's doing a fantastic job. And I don't think we talk about this very often, but like you can click in through balance. And look, right now, this is all just like Google Doc pages. So you can see how it's like kind of raw. Underweight for Aptos. Why are we underway for Aptos? Oh, I don't know.

Starting point is 00:16:02 Let's go read about it and see what Ben, the analyst put into the dock. That's right. Ben, by the way, is a fantastic analyst on our team. He's where we get all of our DeFi Alpha. Anyway, we have that all available to Brankless Premium members. So just a shout out to upgrade. so you can see what that looks like and all of this

Starting point is 00:16:22 will be redesigning our new website. Speaking of token prices. David, let's talk about this. This was a tweet I saw from Jacob Franick and this is a tweet about stable coin market cap. So about a year ago, February 27th, we had $166 billion

Starting point is 00:16:41 worth of stable coins on chain issued. And this is all this kind of stable coins, right? So centralized, decentralized. December 4th, 136. $29 billion. So down. Not by a dramatic amount, but down by about like, what, $25 billion, something like, $27 billion. David did the math. I did the math there. It's interesting that BUSD is the stable coin that's growing, the only staple coin that's growing, not contracting. But what was more interesting to me

Starting point is 00:17:08 about this is, do you remember Jim Bianco's thesis? So Jim Bianco, repeat, bankless podcast, friend, and just fantastic views on traditional markets, but also like knows an incredible amount about like crypto and defy and like really digs in. He's an S tier individual. I love Jim Bianco. Go follow Jim Bianco on Twitter. Jim, if you're listening, man, we appreciate you. He had kind of a thesis.

Starting point is 00:17:33 He actually asked our opinion on. And I was like, I don't know, Jim, that sounds right. You should write more about this. His thesis was defy, the liquidity for defy is through stable coin. So if you want to measure kind of the economic bandwidth of defy, Right? We'll put it another way. If you if you want defy to grow stable coin market cap has to grow. And so we have about $140 billion of stablecoin economic bandwidth in defy. And if we want to 10x defy, we need to 10x the stable coin value. And specifically 10x defy prices to be to be specific. Defy prices. He was saying defy token prices like all things like liquidity. Stable coin liquidity is the underlying foundation, which makes sense, especially after we've done all of our Federal Reserve macro episodes.

Starting point is 00:18:26 Everyone is like, yeah, the Fed, the markets are addicted to liquidity. When we're pulling liquidity out of the market, everything's selling. So it makes sense along those lines. Totally makes sense. If you give more stable coin liquidity to defy, yields go up, token prices go up, things, everything else above it goes up. So first of all, GM or some other talented listener should do some analysis on this and run the data and do some kind of like, you know, models with historical data and see to what extent this is played out and what the correlation is. But also, I'm interested to look at this

Starting point is 00:18:59 over time as sort of a leading indicator. If you want to see DFI start to recover, we might need to see that stable coin value on chain tick up and hit from 140 billion, 200 billion, 300 billion. This might be some kind of a bullish sign to proceed a run-up. Anyway, good thesis there. Yeah. Jam, if you're wondering what an S-T? your individual is S is above A. S is super. I'm glad you explained that for me.

Starting point is 00:19:29 The trend continues. People are going bankless, David. What's this? Yeah, Will Clemente says, tweets out, over the last 30 days, 200,000 Bitcoins. Reminder, out of 21 million, 200,000 bitcoins worth $3.4 billion

Starting point is 00:19:44 has been moved off exchanges. I don't think there's ever been a greater migration. of Bitcoins were probably value in general off of centralized exchanges into self-custody wallet. Well, even before Mount Cox, right? Like, you can't even see Mount Cox. Yeah, all the red here. Well, this is, yeah, I think you're right. Is this a price?

Starting point is 00:20:06 Well, that's because it's measured in dollars. Yeah. More in Bitcoin, but dollars, you're right. Wow. Biggest red over time we've ever seen. That's incredible. I mean, people are just like, I don't trust exchanges. See you later.

Starting point is 00:20:17 Self-custy going bankless. It's not how I wanted it to happen, but okay. So I saw these two tweets out of Token Terminal that I wanted to include in here. So this is a developer activity overlaid by price for two ecosystems. First, we're looking at Cosmos. Developer activity looks like the start of a bull run. It starts to look like a very healthy line up. That's the green line.

Starting point is 00:20:40 That's the green line. That's a steady kind of upward trajectory for the last, over the last two years. Yeah, exactly, yeah. And then, I mean, we all know the price. price is largely uncorrelated, although the cosmos token actually is kind of like up and to the right that it has this like middle chunk, which is definitely a manic bear ball market. But now we're like at the trend that it was before the bull market in like 2019 to 2020. Not manic, just just fully fasted and full of energy.

Starting point is 00:21:07 Jesus. Let me tell you, I was not fasting during the bowl market. And then so we can flip over to, we can compare this to the Ethereum chart, which is the, yeah, the next. tweet. Ethereum actually saw a, for some reason, a drop-off in developer activity in the last, like, couple months or so. But you can get this overlay developer activity still over, like, the long-term at absolute all-time highs.

Starting point is 00:21:33 And the ETH price is at a very much higher floor than it was in 2018. I just thought these were interesting. I think they're interesting. Now, my big question in this, if you want to get to kind of the second question is, okay, but does your Adam token map to do? developers in the Cosmos ecosystem because this is like it's not the empire model that Ethereum is where all value flows back to eat the token, right, because of the mechanism design. For Cosmos, it's not necessarily true in any respect that all value leads back to the atom token.

Starting point is 00:22:06 It could accrue in other app chains inside of Cosmos, right? Which is the bulk case of the Cosmos thesis, is that the value does accrue elsewhere. And that's one of the big advantages. and selling points of the cosmos ecosystem. Exactly, which is why, of course, you can't, like, you have to understand this space in order to, like, you can't take a Jim Kramer level. We're picking on Jim today. You can't take a Jim Kramer level, like, analysis.

Starting point is 00:22:30 Look at these two charts and be like, well, it means this, because this number is going up here, it means this number in this other ecosystem. You have to think about it more fully. David, what else we got? Coming up next, my friend. Coming up next, Coinbase versus Apple. Does Apple even understand crypto? Do they even care?

Starting point is 00:22:47 a lot of people seem to be going up against Apple. How many more until it takes for something to happen there? I don't know, but we're going to talk about it. And then we've got some data out of Genesis and Gemini Earn to share. And SBF, of course. We've got to tie the bow on the SBF conversation because, like I said in the intro, I finally feel like we know what SBF is up to, or at least I'll give my takes, all this stuff,

Starting point is 00:23:08 and more right after we talk to some of these fantastic sponsors to help you go bankless. Arbitrum One is pioneering the world of secure Ethereum scalability and is continuing to accelerate the web, 3 landscape. Hundreds of projects have already deployed on Arbitrum 1, producing flourishing defy and NFT ecosystems. With the recent addition of Arbitrum Nova, gaming and social daps like Reddit are also now calling Arbitrum home. Both Arbitrum 1 and Nova leverage the security and decentralization of Ethereum and provide a builder experience that's intuitive, familiar, and fully EVM-compatible.

Starting point is 00:23:41 On Arbitrum, both builders and users will experience faster transaction speeds with significantly lower gas fees. With Arbitrum's recent migration to Arbitram Nitro, it's also now 10 times faster than before. Visit Arbitrum.io, where you can join the community, dive into the developer docs, bridge your assets, and start building your first app. With Arbitrum, experience Web3 development the way it was meant to be. Secure, fast, cheap, and friction-free. The Brave wallet is your secure, multi-train on-ramp into Web3, and it's built directly into the Brave privacy browser. Gone are the days of managing multiple wallet extensions that put you at risk of fishing, spoofs, and tracker. With the Brave wallet, you can securely manage your crypto assets

Starting point is 00:24:20 across more than 100 different chains, including Ethereum, layer twos, salana, and more, all without downloading risky extensions. The Brave wallet is easy to set up and removes the headache of jumping between wallets and extensions. It's lightweight, but packed with great features, like built-in token swaps, buying and holding NFTs with a gallery view, and support for hardware wallets. But also much more than that, because Brave is shipping new features every single month, with a mission to make Web3 easier to navigate for its over 55 million users. Wall extensions are a thing of the past.

Starting point is 00:24:49 So get started with Braves' Web3-ready browser today and experience a decentralized web seamlessly without all the clutter. You can download the browser at brave.com slash banklist and click the wallet icon to get started. Coinbase and Apple and a head-to-head, Apple wanting to tax defy transactions and crypto transactions and Coinbase not liking it. David, you have the tweet thread here.

Starting point is 00:25:12 Let's look at Coinbase's position on things and give some of our takes. What's Coinbase saying? Yeah, so they tweeted out out of the Coinbase wallet. So this is from the Coinbase wallet, not Coinbase. Yeah, so important small differentiator. You might have noticed you can't send NFTs on the Coinbase iOS wallet anymore. This is because Apple blocked our last app release until we disabled the feature. The feature of being able to send NFTs, Apple was like, you guys have to block.

Starting point is 00:25:42 lock that before you update your app. Okay. So Coinbase wallet is like a non-custodio, self-custodial wallet. It's a bankrupt's wallet. It's not their full custodial solution. We're talking about the wallet. Just like Meta-Mask only on your phone. And this basic functionality

Starting point is 00:25:58 of sending an NFT from one place to another, just like sending an ERC-20 or ETH from one place to another, staying staple points, making a payment, they had to disable that because Apple blocked them? Yes, because because the Apple says you guys have to block that feature before we allow you guys to push that app update.

Starting point is 00:26:18 And so the tweet thread continues and says Apple's claim is that the gas fee required to send NFTs need to be paid through their in-app purchase systems so they can collect 30% of the gas fee. What? And of course. And so I think the next tweet just really summarizes this. for anyone who understands how NFTs and blockchains work, this is clearly not possible. Apple's proprietary in-app purchase system does not support crypto so we couldn't comply even if we tried.

Starting point is 00:26:48 Okay, so Apple wants Coinbase wallet to send them 30% of the gas fee that it takes to send an NFT. If Coinbase wallet were to do this, they would have to pass that charge onto the customers, so they would have to take the gas fee and add on 30% so that they could pay Apple. But then there's a new number, then you would have to actually add on, take 30% of that new amount of that 30% because

Starting point is 00:27:15 that's the new number that Apple would have to take. It's, it doesn't make any sense. It's shocking to me that Apple thinks it can do this. You're talking about, we're talking about an ETH transaction fee that is not, nothing to do with Coinbase. This is the base protocol fee inside of Ethereum and gas prices are set by the market, block space demand versus is block space supply and whatever the demand is going for. So the gas fee can be different every single transaction. It could be $1, $5, it could be $20. And you're saying that Apple wants 30% of that.

Starting point is 00:27:52 It's kind of not coin basis to give. Do you know what I mean? Yeah. They're trying to tax Ethereum 30% and say, hey, if you want to use Ethereum, you got to pay us 30% of the fee. So weird. All right, go on. What else do they say?

Starting point is 00:28:07 One of the important tweets that I liked was that the biggest impact of this policy change is on iPhone users that own NFTs. If you hold an NFT in a wallet on an iPhone, Apple just made it a lot harder to transfer that NFT to other wallets or gift it to friends or family. This one that hit home for me, Ryan, because there was one time we were at Bankless, gifted Cool Cats by William Pister. He minted them, sent them all to us. And then I passed my Cool Cat along to a friend using Metamask Mobile. I had it on my MetaMask wallet. I sent it to a friend who went down the crypto rabbit hole so hard, left her job, became a marketer for a crypto job because of I sent her a cool cat with a mobile wallet.

Starting point is 00:28:49 So I have a personal story about like how I onboarded a person by sending them a cool cat because of a mobile transfer, right? A spontaneous moment. Definitely wouldn't have done it if I had waited to get home to a ledger. We just, so like this is just Apple just being like a baron. And just like extortionary. This is like racketeering. It's like it's like a feudal lord.

Starting point is 00:29:12 Like so and this tweet above from Coinbase says this is akin to Apple trying to take a cut of fees for every email that gets sent over open internet protocols. Yeah. Imagine that if there was a tax that iOS charge for internet protocols and for email. Yeah. So Apple, I don't know. The debate here is does Apple know what they're doing or do they not know what they're doing? or do they not know what they're doing? Do they know the significance of this choice,

Starting point is 00:29:38 or are they just being, like, errant? I don't know. I think it's interesting that we haven't heard anything yet from Metamask about them blocking Metamask, which, of course, you have the same functionality in Metamask, or other mobile wallets like Phantom. So maybe it's an oversight. At the same time, like, I haven't heard of this being remedied,

Starting point is 00:29:58 and it's like seven days later from when Coinbase is tweeting this. And just the, wow, How do they not know this? Just like the idea that they could tax. Pretty egregious. Yeah, it's pretty egregious. And I think this is not, crypto is not the only industry that's facing this.

Starting point is 00:30:14 I mean, Tim Sweeney from Epic Games has talked about Apple's monopoly power. And basically making it such that in-app purchases or like in-game purchases all have to throw through this land barren and this feudal lord. They get a cut of everything. They're adding no value in the process. This is just rent-seeking. behavior, isn't it? And you can only do rent-seeking behavior if you have a monopoly. And in this case, I mean, I have an iPhone, right? I have 17 Apple products. Okay. So they kind of like,

Starting point is 00:30:47 they have that power over consumers. And I don't know how you get this to stop. Obviously, the free market approaches competitors and you disrupt APTL and you create kind of a different mobile experience that's more open. There's also the regulatory approach where some nation-state says, We have a bigger stick and we'll whack you. Our monopoly is bigger than yours. We have a military. So that's the other way things get done. But I don't know where this ends.

Starting point is 00:31:16 It's just pretty egregious, isn't it? Yeah, that's the conversation that I've seen outside of crypto Twitter, outside of crypto media, is that like Apple wants to take 30% of everything. I think I saw that in like a tech crunch article, that headline. And at some point, it just gets down to like antitrust. At some point, we're just going to take that. There's enough of a cohort of people that are offended by Apple trying to rake them of 30% that people are just going to take up. Don't they make enough money on the hardware that they sell?

Starting point is 00:31:43 They're great products. Like, that's cool. I don't think you can ask a company to try and make less money. Make less money? Yeah. Apple, you should make less money. We'll see what Tim Cook says. Tim Cook on bankless.

Starting point is 00:31:55 Let's go. All right, what's this? Genesis. Genesis. Okay. How much did Gemini customers have in Gemini, earned that went to Genesis. The answer to that is $900 million,

Starting point is 00:32:09 which is kind of a doozy. Just shy of a billion dollars. That's a little bit of a doozy. This is just in Gemini Earn. So this is not all Genesis obligations. We're now focused because there is money stuck for retail in Gemini Earn. And it's to the tune of $900 million that Genesis owes Gemini. Yep.

Starting point is 00:32:30 What does this mean, David? Are we going to get that back? I don't know. I don't know. Like people were talking about like the Winklevye just making Gemini earned customers whole. And I was like, oh, in theory, it's possible.

Starting point is 00:32:43 They're billionaires. They're billionaires. Big check. That's a big check. That's a really big check. I don't think they'd do that. Well, what is the correspondence of the feedback from Genesis and Gemini?

Starting point is 00:32:57 Have they talked about this? This is a headline that says, Genesis says plans to resolve, lending units, woes could take weeks in quotes. I mean, Genesis is still trying. I'm going to take the over on that one. Over.

Starting point is 00:33:09 Yeah. It could be like, God bless you, Joe Lubin weeks where it's like weeks, not months kind of thing. Yeah. Yeah, I don't know, man. I don't know. So this is still hanging overheads. There wasn't too much data beyond what was those two articles.

Starting point is 00:33:23 900 million may take weeks to resolve. It's going to take months. We'll keep you guys updated on this. David, you said you had some final insights into SBF. Yeah. Like you feel like that is starting. to wind down. Yep.

Starting point is 00:33:36 And you said Nick Carter was right. What does he write about? Is this a whole tweet thread or should I go to a specific thing here? So the top tweet is a tweet that we shared last week on the weekly

Starting point is 00:33:47 roll-up when we collectively, as SBF was going through his public media tour, talking to everyone, making them look like fools, by the way, people were giving their takes. As to why, because it's very bizarre behavior. It seemed non-rational.

Starting point is 00:34:01 Exactly. So one of the takes that we shared was Sam isn't behaving like a renegade who is ignoring the advice of his lawyers. He's behaving like a world class, like he has a world class crisis management firm and legal team constructing a very specific and deliberate public narrative. That's one of the takes that we shared from Nick Carter. 40 chess. Sam is doing this all intentionally.

Starting point is 00:34:18 He knows exactly what he's doing. Yep. Yep. God, now whenever I say, yep, I'm like, that's what Sam says. When, uh, long pause. Anyways, uh, SBF, a tweet went out this week. SBF of FCX has hired Mike Cohen, Mark Cohen as his attorney. Cohen recently defended Galene Maxwell in her sex trafficking trial and defended El Chapo prior to that.

Starting point is 00:34:44 And McArthur says, it takes a victory lap and he says, like, as I said, yes, he's got a rock star legal defense. Wow. All right. So when I first saw this, first of all, I thought it was Michael Cohen. It's not Michael Cohen. This is a different Cohen. This is a guy named Mark Cohen. Yeah.

Starting point is 00:34:59 And he's the lawyer who defended Maxwell. Yeah. For in sex trafficking case. And El Chapo. The whole Epstein thing. Yeah. The Epstein thing. And El Chapo, the drug lord.

Starting point is 00:35:09 Yeah. I don't know if it gets higher than that. No, this is who you hire when you are like a hardened criminal, but like at least El Chapo. I know about Maxwell. And you're super wealthy. God, can you imagine being like if being a client of a lawyer and your other fellow clients are Galian Maxwell and El Chapo? Like you're not in a good spot. A lot.

Starting point is 00:35:32 No. Yeah. Well, you know, how many lawyers would apply for this type of a job? I don't know. Yeah. You know, I don't know. The other joke about this when this was going out was that, like, Sam Bankman Freed said that he only has $100,000 left in his bank account.

Starting point is 00:35:46 So who's paying for this? Wait, he said that. Yeah. Yeah, yeah. He said that a couple times. People ask him like, all right, so like how much money you have left, Sam? He's like, I've got one credit card that works, and I think I've got like $100,000 in my bank account. No way.

Starting point is 00:35:59 So who's paying this guy? My God. So he has like no crypto? He has no crypto assets. Allegedly. I don't believe a single damn word out of that man's mouth. Yeah. Well, yeah. Go on. What else do you think about this story? What's happening here? Yeah, so there was an interaction between SBF and Maxine Waters, which drew a lot of attention, which is the next tweet, Ryan, if you want to hop over to that one. And refresh us. Who is Maxine Waters? She is on the U.S. House Committee of Financial Services, right? So she's in the house. previously seen before FTCS collapse, blowing a kiss to SBF. And as he walked out of his hearing that he had way long ago. Like in real life, kiss.

Starting point is 00:36:40 Yes. Out of a hearing in Congress. Yes. Blumacus. Because he donated billions of dollars to her and the Democrats. But that's on like TV. That's on TV. That's on TV.

Starting point is 00:36:52 And you're blowing a kiss. Yes. To SBF. Seems like strange behavior. Yes. Anyways. Maxine Waters and co-tweeted with the Finance Senate Committee Democrat Twitter account. She goes, SBF, we appreciate that you've been candid in your discussions about what happened at FTX.

Starting point is 00:37:11 Your willingness to talk to the public will help the company's customers, investors, and others. To the end, we would welcome your participation in our hearing on the 13th. What is this tone? This is really soft. What? This is on December 2nd, right? we appreciate that you've been candid in your discussions about what happened at fdx he has not been candid no he's been in narrative this machine yeah he has been been the farthest thing from what's the opposite

Starting point is 00:37:39 of candid he has been opaque he has been lying yes about what's what's happened at ftx so this is the the the soft glove treatment i don't know what this is so she later tweeted out a harder sounding tweet because i didn't play over well Yes, because that did not play over well. Yes, certainly. So here's her replacement tweet that came out the next day or maybe 48 hours later. Yeah, a few days later. Yeah, based on your role as CEO and your media interviews over the past few weeks,

Starting point is 00:38:13 it's clear to us that the information you have thus far is sufficient for testimony. As you know, the collapse of FTCS has harmed over 1 million people. Your testimony would not only be meaningful to members of Congress, but also critical to the American people. it's imperative that you attend our hearing on the 13th and we are willing to schedule continued hearings if there's more information to be shared. Why is this a request? Why are we asking SBF nicely?

Starting point is 00:38:38 Why hasn't the goddamn Navy gone over to the Bahamas and taken SBF by the caller and dragged him to a courthouse? How come we haven't done this yet? Why are we sending out like the wedding invitation? Shouldn't we be sending out subpoenas? Isn't that within MaxiF? Water's colleagues? Why haven't we subpoenaed him? Okay. So Kevin O'Waqi put that into a meme. If you want to scroll down, it's like right there. Yeah. Okay. Let me scroll down. There it is. And so this is the classic bell curve meme, right? So you have Maxine Waters in the middle who's like being sad and requesting. It's imperative that you tend our hearing on the 13th. And then the left side and the right side of the curve are like, just subpoena him. Make him show up.

Starting point is 00:39:26 Yeah, you could do that. Use the guns that we have. FDX bankruptcy managers hire a forensic investigators, according to the Wall Street Journal. So we're getting that stage in the process. We're trying to figure out where all the money went. Right. Yes.

Starting point is 00:39:44 The forensic investigators are Alex partners, have been hired this consultancy firm to trace billions of dollars that have gone missing. And their previous job, a previous job that they had, was helping recover the stolen funds and the Bernie Madoff case. Again, the Sam Bankman-Fried's cohort is very strong. Look at this picture of Sam.

Starting point is 00:40:04 I love that they use this. It's very strange. Oh, this was crazy. Okay, so apparently, do you know how FDX did all of these deals with like Tom Brady and other celebrities, influencers? Every celebrity under the sun, yeah. They tried to give Taylor Swift a $100 million sponsorship deal. What does it mean to sponsor Taylor Swift?

Starting point is 00:40:24 She said no. I think it was like sponsoring like her stadium, uh, stadium tour for the next album kind of thing. I don't know what else it would mean. Spokesperson, I'm sure. A hundred million dollars, David. Dude, but she said no.

Starting point is 00:40:37 A part of like the psychological, like, unpacking of SBF has got to be something along the lines of like cleftomania. He can't not give away customer funds. He was spraying and praying this stuff from the hip. Like, uh, he would like, he came in and bought that bank at like three times its values.

Starting point is 00:40:54 Like, These vanity things. I want to spend customers funds. It is a fun activity for me. And it's like, yeah, you know what's fun? Taking Taylor Swift's fans money in as customer deposits on FTCS and then paying Taylor Swift. Wait, wait, wait. You think a bunch of Taylor Swift fans are also crypto people?

Starting point is 00:41:13 I mean, like, not zero. Okay. So this is just a gigantic game of like how fucking corrupts are can he be. I was like, I'll take the fans money and then I'll sponsor Taylor Swift. and it'll be the biggest grift of all time. Yeah, well, it really may have been. I mean, this is top three grifts, top five griffs of all time, I think. And I remember back when we had Brian Armstrong on the podcast about a year ago.

Starting point is 00:41:38 And we were kind of like, so, Brian, Sam's doing all of these things. Like, he's got a sports arena. He's got Tom Brady. He's got all these celebrity endorsements. And what are you doing in the marketing side? And Brian was like, I don't really like, we're not a marketing focus company. We just build. And my God, retrospectively, that is so refreshing.

Starting point is 00:41:58 Like, good job. For focusing on what you should be doing. Not spending customer's funds. Nice job. Absolutely ludicrous. Oh, do you see my tweet, though, about this? This is one of these tweets where, like, I just like, sit and pause and be like, who the hell is this Ryan Sean Adams man?

Starting point is 00:42:18 Ryan Shot Adam tweets because tweeting out the headline that Taylor Swift declined the hundred million dollars, uh, immediately. Ryan Sean Adams tweets, she knew Sam was trouble when he walked in. Okay. So, so my mind is like, it's a very underappreciated tweet. Uh, my mind goes to like, all right, he's an AI. So he just like did Google searching and came up with this. So that would, that's just normal. Or he's a Taylor Swift fan and like have this one ready to go. Or he's a, he's a dad of a of a teenage daughter. You know what? Which I think all three of those things true. It could be all three things at once. We just don't know. And I think you have to be comfortable, David, if we're going to continue this podcast every week, is living in that ambiguity. Do you know,

Starting point is 00:43:04 like you just don't really know. All right. Well, somebody who accepted SBF's offer, Kevin O'Leary paid $15 million to be an FTX spokesperson. He was paid, right? Was paid. He got $15 million. Yes. He was paid $15 million. $15 million of customer deposits went into Kevin O'Leary's pockets to be a paid FTCS spokesperson. What is this? What is a paid spokesperson? What is that role? Like it's like an evangelist role.

Starting point is 00:43:34 Yeah. But if you're publicly known as being paid, then you're just a paid chill. For ETH, except you're not paid? Yeah. Well, I mean, I'm paid in the sense I own ETH. But that's a choice that I made. I also spend money to do that.

Starting point is 00:43:50 Can I just say like high level? Like, I'm disappointed. Like, I'm not, but Kevin here. I'm mainly disappointed that Kevin is doubling down multiple times on how FTCS is in SBF and he believes SBF and all that stuff. Did you actually watch this clip? Maybe she'd, let's play this clip. Let's play this clip. That was FTCS that you got?

Starting point is 00:44:09 I don't think you should be singing the blues right now at all. Oh, yes, I'm singing the blues. Why? Because your 15 million didn't pay him out that you. That's a lot of money. Let's a lot of money. Let's a paid spokesperson. It's a lot of money.

Starting point is 00:44:21 You didn't have to do much for that. That's found money. That's a different decision. That's a different discussion. You can make that decision on your own. Yeah, so here, this is Kevin having really no answer to the interview who's asking, like, you got $15 million. Like, why are you still supporting FTX?

Starting point is 00:44:37 Give it back. Like, distance yourself. I made a mistake. The doubling down is kind of strange at this point. Like, dude, your contract's over, man. Yeah, you don't have to do this. And it's not, like, the ship has already sunk. and you're just like, I don't know, you're still clinging on to it.

Starting point is 00:44:53 And apparently, out of all of this, David, someone is going to begin investigating the SEC and how they managed to miss FTC. What is this tweet that we're reading? This is from Alexander Grief. New this morning, Representative Richie Torres, the Democrat out of New York, calls on the government accountability office to investigate the SEC's failure to protect the investing public from the egregious mismanagement and malfeasance of FTCs. I think basically saying, hey, stop going after the long tail of security frauds and unregistered

Starting point is 00:45:27 securities. Don't go after the long tail. Go after the big one. Like, do the big one. You gave us Kim. We should have gotten Sam. Yeah. Basically. Yeah. So I'm in full support of investigating the SEC. What else we got coming up, David? It's a hot episode still. A few big topics to cover. What's coming up? Yeah, getting into more crypto stuff. The withdrawals, hard fork is coming. Huh. Question mark. Big question mark.

Starting point is 00:45:54 A brand new spiffy ledger hardware wallet, which is more screen than it is not screen. And Ryan and David talk chat GBT. If you are, we're not on Twitter or in hearing about chat GBT, it is caught the world by storm, especially crypto Twitter. So we're going to talk a little bit about AI chat. And we're going to have one AI talk to another while I observe. All of that and more after we talk to some of these fantastic sponsors to help you go bankless. The reality today is that five corporations control the entire world of social media. They own our names, they restrict our content, they monitor our every move.

Starting point is 00:46:28 And their time is up thanks to our sponsor, DESO. DOSO is a layer one blockchain built from the ground up to decentralize and scale social networks. With DOSO, you can own your own identity, content, and social graph, and take it with you across hundreds of applications already built on the censorship-resistant D-So blockchain. DeSo's storage advantages make it finally possible to build infinite state applications. that can efficiently store and index large amounts of content and data fully on-chain. DeSo also offers multiple crypto-native monetization primitives for developers and creators, including social NFTs, social dows, social tokens, and social tipping.

Starting point is 00:47:04 So in order to experience the social layer of Web3, go to DeSo.com and claim your username. That's d-es-o.com. If you've been listening to Bankless, you know that we're fans of the modular blockchain thesis. The idea that blockchains will separate execution from DESO. data availability and consensus, allowing all three to become the best versions of themselves. And Fuel has built the fastest modular execution layer in the industry. By supporting parallel transaction execution, fuel unlocks significantly faster throughput for the Web Free world.

Starting point is 00:47:34 Fuel also goes beyond the limitations of the EVM, with its own Fuel VM, which is more efficient and optimized, opening up the design space for developers. And lastly, Fuel brings a powerful developer experience with its own domain-specific language, sway and a supportive tool chain called fork. With fuel, you can have the benefits of smart contract languages like solidity while adopting the improvements made by the rust tooling ecosystem, letting the fuel development environment go beyond the limitations of the EVM. If you want to learn more, there's a link in the show notes to see how you can get involved with a fuel network. If you have your ether staked, you might be able to get that ether back as soon as perhaps

Starting point is 00:48:09 March. This is always just speculation and rumor, but lately the words out of the core devs mouth have had withdrawal, hard fork, and March in the same sentence. This is how this news right, David. 20203, yes, correct. Yeah, and this is how this news works, right? And so like, there is no official date. There's no official time until the core devs come to consensus about the time. But right now, there have been talks where the words withdrawal and hard fork and March have been in the same sentence. And so now, CoinDesk is now reporting this, Ethereum developers target target, target March 2023 for release of staked ether. Whether or not EIP 4-844 is also included in this hard fork is TBD.

Starting point is 00:48:55 That is more of a reach. Withdrawals are currently being prioritized more than EIP 4844. EIP 4844 is proto-dank charting. Which brings more scalability, right? Basically, there are a lot of other features in these next coming hard forks, but the two big ones that everyone's talking about are being able to withdraw the Staked and this thing called proto-dank charting, which is EIP 4844, which we've done episodes about, which makes roll-up super cheap and super scalable.

Starting point is 00:49:24 So you've got withdrawals and kind of more on the scalability side. And the rumors are it's looking like EIP 4844, the proto-dank sharding one, will probably not make the first hard work. Yes, it'll be a, yeah, that's probably right of my money. Maybe this says we'll follow a subsequent hard fork in the fall. and the fall is like in quotes who knows we can't predict two hard forks in advance but that's good news

Starting point is 00:49:49 we get the hard fork but staking withdrawals you're gonna withdraw anything or you're gonna deposit so that's gonna be definitely I think there will be a net outflow because of the of the locked ether

Starting point is 00:50:02 but also that will also be counteracted by the fact that there is a two way road finally where like there's no locket periods will also incur some sort of demand to stake ether as well because the risk is gone. I think some people will be like,

Starting point is 00:50:16 okay, now I can withdraw, so now I'm willing to deposit because now I have the ability to withdraw. Yeah, so just think about like the product of each staking is now complete, therefore more it will be used more. Yep. But I still think in the short term,

Starting point is 00:50:28 there will be a net outflow because, I mean, with staking with deposits have been locked for forever. Stake it till you make it, David. That's my plan. Long tail contingences. There's some other dominoes maybe falling

Starting point is 00:50:41 from the FTX stuff, a few baby dominoes. We might call them hitting Defi. What's this one from Maple? Yeah, so Maple Finance is an on-chain under-collateralized institutional lending Dow product. And so it is actually kind of an intersection

Starting point is 00:50:57 between the very rock-solid and hardened defy apps that we all know and love and the more risky black box centralized borrowers and lenders. It's kind of in the middle there. It's on-chain, kind of like Defi stuff, so it's fully transparent, but it is under-collateralized,

Starting point is 00:51:12 which means that there needs to be underwriting and vetting and institutional-only borrowers and lenders. So that's what Maple is. And so orthogonal trading was both an underwriter and a borrower out of Maple Finance. And orthogonal trading, apparently, was way less solvent than they had made it out to be. They were due to pay back a $10 million USDC loan from one of the Maple Finance pools. There's not one central pool with Maple Finance. There's many smaller ones. They were due to pay back $10 million on December 4th.

Starting point is 00:51:45 They did not make that payment. Therefore, they have all of their credit closed. But then they realized that orthogonal actually doesn't have any money, apparently, and had a net set of $31 million of liabilities out of Maple Finance. That is $31 million of USDC and then an additional $5 million of wrapped ether. And so that left a decent hole in Maple Finance in this one specific pool. So the way that they contain, one of the ways that this is different, the story is different, is that there's actually very little contagion inside of Maple because they have very distinct pools.

Starting point is 00:52:26 Isolated pools for this exact purpose. So there was no very little to no contagion there. But if you had underwritten one of these pools, this pool M11, which is how they denote these things, Got an 80% haircut. It lost 80% of the value. The total value of all loans into Maple was about 30%. So Maple lost 30% of its total asset under management because of this one insolvency.

Starting point is 00:52:55 Wow. So like these are smaller numbers than some of the numbers that we've heard about. But is Maple going to be fine? Are they going to recover from this? Is this part of can the ship like stay afloat? I don't know. I don't know the answer to that.

Starting point is 00:53:08 I think we need this to. have play out a little bit more. But that's actually not where the story ends because Nexus Mutual also had some money inside of Maple Finance. So Nexus Mutual, which is a insurance smart contract and insurance platform on Ethereum, lost $3 million due to this exposure. So they were in one of those same pools. They were in the ether pool.

Starting point is 00:53:30 So they got hit. Why were they in it? Was this just part of treasury? Yes, treasury management. Yep. Wow. So this wasn't even part of the Nexus. protocol. It wasn't like a hack that went bad and that they had to kind of provide insurance for it.

Starting point is 00:53:44 It was like, we have some treasury funds and we're going to put it here in order to get higher yield. And the cost to them was $5 million, $3 million for that. $3 million. $1.6 of all of Nexus Mutuals assets. Wow. Treasury management, very important to get these risks into the market, huh? I would say just like this, the hybrid position of between DFI and CFI, it kind of does map out. to how much damage there was. Not complete dead, but pretty badly harmed. I kind of felt...

Starting point is 00:54:18 Chasing yield can be a pretty bad game to play. Yield is just got a bad name these days. Because if you even get like 10% yield, right? I mean, like, are the chances greater than 10% that the protocol you're in could like die or like about once every 10 years the protocol in your if it's greater than that then like you're actually not making the risk adjusted return dude vitalic gave us that take on one of our podcast episodes with him like over a year ago vitalic was yeah he was saying that the defy yield risks were underappreciated back in like 2020 what's he saying now though we need

Starting point is 00:55:03 to know it didn't matter when prices go up it only matters when the risks only show up and prices go down. Totally, totally. What's Gitcoin doing, David? This is kind of exciting. Gitcoin and Uniseth. Okay, so Gitcoin has been one of the big pillars of the Ethereum ecosystem for a very long time.

Starting point is 00:55:18 And it's always been pretty insular. It's Ethereum funding other parts of Ethereum. This is a story of quadratic funding and Gitcoin breaking out to the outside through UNICEF. So Gitcoin is launching its first ever quadratic funding round on its new grants protocol in collaboration with UNICEF's Office of Innovation between December 9th and December 16th. So the same Gitcoin system that you know, but now for UNICEF. So that's really cool.

Starting point is 00:55:43 Selects group of 10 impact focus innovative projects using blockchain or AI technologies for social good from around the world, including Nepal, Kenya, Argentina, Brazil, and the Philippines. This round will be the first of five test rounds to run on Gitcoin's new grants protocol as a part of Gitcoin's alpha test season. This launch signals the beginning of Gitcoin's transition to a decentralized protocol that will allow any community to coordinate its own grants funding round. Very cool. Very cool.

Starting point is 00:56:09 We like this. I love that. Yeah, if we could start showing how crypto can start to fund public goods as nation states might. That's not our own public goods, but other people's public goods. As nonprofits might, as the real world might, it will increase the legitimacy and coordinating power of crypto. I know that's what Kevin O'Waki is, it's been trying to do the whole time. If you donate in this grants round, there are po-ups for you to collect. So for the po-app.

Starting point is 00:56:33 Maxis out there, have at it. Aztec and Ethereum privacy, they're making some strides here. David, what's the stat we're looking at? There is now 50,000 shielded ETH inside of Aztec Connect. So Astec Connect is just a fundamentally better product than tornado cash. The cryptography is just more solid. And they've got 50,000 eth inside of Aztec Connect. So $60 million is of ether is now being sent and earning yield privately. That's actually not the only set, but that's kind of the first big one. They got some other stuff down there as well. I think it was something like 500,000 transactions on the network, and then 5,000 blocks on the Aztec layer two. This is a layer two that's completely private.

Starting point is 00:57:18 And that's why you say it's better because it's better than tornado cash is because it's lower gas fees. It's not on May net. And it has layer two level settlement guarantees. and it's also very scalable. One other benefit, too, is, of course, you don't have to go to jail if you're a U.S. citizen and you use this thing. That's kind of nice, isn't it? I would say, actually, you're understanding it a little bit because the thing about... Wait, I do have to go to jail? No, you don't have to go to jail.

Starting point is 00:57:47 Why is Aztec better than tornado cash? Tornado Cash is privacy via the crowd. So it pools all of your money together. And then you just co-mingle it up. Actually, it's technically not true, but it appears to be like that. You blend in, like privacy by numbers kind of thing. Yes, and time. And so you need to hang out in tornado cash for a long amount of time to achieve privacy.

Starting point is 00:58:09 The more money that you have to become private, the longer you need to hang out. Aztec is atomic privacy. One transaction of privacy. You can go into the pool and out of the pool instantaneously, and you have the full strength and power of Aztec privacy. So Tornado needs to have big crowds in order to protect. your privacy and for some assets and some pools those crowds are too small to really provide you an identity shield especially when they make it illegal for you to be in the pool yeah yeah yeah um as we know okay that's cool i think this is very bullish

Starting point is 00:58:46 ryan and i are investors in as tech uh also disclaimer we love privacy on chief privacy big disclaimer we love privacy but we don't love privacy so much that you can't see all of our disclosures in our disclosures tab you can see literally everything that ryan and i have invested in because while we do love privacy we also love ethics there you go how'd you like that one right i love that good shill of the disclaimers page uh always in the show notes guys you can catch that um speaking of good shills toys or us is doing digital collectibles uh all the toy toys or us are closed now like i thought toys r s was bankrupt i don't know anymore i don't know uh but they are still a brand it's still my childhood, like, you know, I guess dream.

Starting point is 00:59:31 So now they're doing, now they're doing digital collectibles, David. Is there anything more to this story? Yeah, my kiddos love this is a tweet from Anatoli. Yeah, it's Anatoly because this is on Magic Eden. So this is on Salana. So toys are us launching NFT collectible digital collect. Oh, they didn't even say NFTs. Oh, that's great.

Starting point is 00:59:51 Nice drop. Digital collectibles toys are us launching on Magic Eating on Salana, December 9th. That's today. that's Friday. Okay, moving on. Okay. Move fast. Reddit Collectible, their avatar,

Starting point is 01:00:03 minting hits an all-time high. And that was last time I brought this up. It was an all-time high as well. So they just keep hitting the all-time highs during this bear market. This is great. And it's a nice story out of Reddit, which has always had a hard time monetizing.

Starting point is 01:00:20 Reddit ads has been terribly performing. Like Facebook ads really actually aren't that great performers. Twitter ads even worse. Instagram ads kind of acceptable. Reddit ads the bottom of the barrel. So the fact that they found this monetization path

Starting point is 01:00:33 of selling digital collectibles is great. It's a great story. Yeah, it's a collectible avatar, importantly. Certainly not an NFT. Do not be confused. Yes. This is a joke.

Starting point is 01:00:44 It's also an NFT. It's on Polygon, I believe. That's where this is on. Yes. They're also doing some stuff with, arbitram. Cockpunch. I just wanted to say it.

Starting point is 01:00:53 The legend of cockpunch has released. And this is, an episode we did with Tim Ferriss, if you want to learn more about that. Tell us some of the launch stats, because that launched earlier this week. How did it do? Yeah, importantly, the podcast is launched.

Starting point is 01:01:07 The NFTs are also launched as well. So you could have bought an NFT for 0.3E. That was the mint price. The floor price is now currently at 0.88. I did some on-chained loathing just to see how many scalpers there were. There were some scalpers. People bought it, minted it,

Starting point is 01:01:26 and then sold it for one of it for like a moment. I was not one of them. Did you buy a cock punch yet? I did not buy a cock punch. Creator fee of 6.9%. So nice. And that 6.9% is actually how Tim Ferriss makes money.

Starting point is 01:01:38 All revenue made from the Mint went to his foundation for psychedelic anxiety and depression research. Yes. And when we say something like the way Tim Ferriss makes money, it's kind of interesting there. Because I think people always assume, oh, that means it's a cash grab. But, like, I mean, making money to pour back into the product,

Starting point is 01:02:01 it sort of depends what the creator actually does with it. And the options on the table aren't just you take all of the money and you scam the community. Right? Like, other options can be. You can reinvest in the cock punch. Yes, you reinvest in cockpunch. You build out a team. Do normal business things.

Starting point is 01:02:17 Yeah. So it's revenue to either Tim or the business to continue working on this possibly. Important distinction. All right. bankless collectibles as well. We're shipping another collectible. We shipped a Josh Rosenthal last week. David, this week, drummer roll.

Starting point is 01:02:34 You ready for the collectible? Bankless NFT collectible. What's it going to be? What's it going to be? It's going to be, it's not here. Legion is the episode. That's our episode on the creator economy. One of my favorite episodes that we did in the last year.

Starting point is 01:02:51 So the topic was great. It is a core pillar of, of the bankless podcasting program. Yes. The, I will pat us all in the back, Ryan, and say as podcasters, the flow and organization of that podcast and also the magicalness of Legion as an orator, articulator, I think in the podcast industry, one of the greatest podcast of all day. I dare you to find us a better podcast than that.

Starting point is 01:03:18 That podcast was so good. Technically, it was great. It was great. Well, and she has a great thesis, right? 100 true fans is her thesis that creators can become basically they can they can build up a community and a foster a tighter relationship with with their fan base and it's kind of um i guess fortuitous that this would be one our third and if podcast nfts in the collection here in genesis because it's kind of her thesis playing out is the podcast nfts yeah anyway as usual that uh minting goes i think

Starting point is 01:03:49 on friday friday twilight it starts and you could join david and i for twitter spaces where we talk about it. Hey, this was a tool that I saw. I don't know if it works. I know nothing about this tool, but I want to talk about the concept because it's about taxes, David. Can I tell you about taxes a little bit?

Starting point is 01:04:06 I feel like I'm hearing it either way. Typical dad talk, of course. You're hearing it either way. This is called NFTLossHarvestore.com. I don't know if it's great. I don't know if it works. But this is an interesting period of time because we're in December here.

Starting point is 01:04:22 If you're in the U.S., you probably have some crypto losses ranked up. David, do you have any losses on things that you bought high and that are now lower that are underwater? No, only my tokens go up and price. Okay. Well, if you're a normal human being, not S-tier human being, then you probably have some losses on maybe NFTs that are underwater or tokens. You can tax loss to harvest those losses, which means basically you can sell those at a loss. And you can write off the Delta. You can kind of pocket that as a loss that you can carry for it into future years.

Starting point is 01:04:59 And you can write off, I believe, up to $3,000 worth per year. So it's a good time, even if, like, I'm not saying necessarily that you have to sell, because you can also sell and then buy the same assets at a similar price. Let me just say, none of this is tax advice, not financial advice. Talk to your tax advisor and that sort of thing. but all of the crypto kind of advisors that I talk to say that this is a good strategy. We don't have the same wash sale rules. There's a 30-day wash sale rule in stock where if you sell your stock for Tesla blocks

Starting point is 01:05:34 harvesting purposes, you have to wait 30 days until you buy it back. It doesn't appear like we have these types of laws in crypto. And again, not financial advice, not tax advice, but I plan to do this sometime in January with... You don't own any NFTs. I have some underwater positions, my friend, and I do. You got me to buy, what did you get me to buy this year? I got you to buy an MFer. Yes, I could sell my MFer.

Starting point is 01:05:59 That floor price, you're up on that MFer. Thank you, sir. Are you sure? Yeah. Are you sure? No. I got some other things. I got some turtles I could sell.

Starting point is 01:06:09 That always was valued at zero. True. Yeah, I got some other things. Anyway, it might not be NFTs. It might be tokens. and this is not about us. This is about you and a PSA. Which are you, bankless listener, for...

Starting point is 01:06:25 Ryan just wanted to talk about taxes. Yeah, David wanted to strip this from the agenda. And some of you will be glad it didn't get stripped and some of you are just like bored to tears. What do you think I am, Ryan? Okay, this is coming out of Coin Desk. Andresen Horowitz has hired former CFTC Commissioner Brian Quintenz, who we've had on the podcast,

Starting point is 01:06:48 to run its policy effort in Washington. He says that A16C crypto is looking for clear rules of the road from policymakers. Yes, we are all looking for that. This is one of the nice, very nice things about like big, big VC firms like A16C. It's advantage, it's logical, rational for them to pay for policy advocacy. And so this is what they do. Agreed. And Brian is a fantastic person, believes in crypto values.

Starting point is 01:07:18 very good voice to have in D.C. with us. This is something else that happened this week. Nexo is departing in the U.S. after regulator discussions hit a, quote, dead end. So they are immediately stopping, offering its earned product in the United States. NexO is an interesting case, David, because they, like a lot of, obviously the crypto lending providers, the centralized crypto lending providers have gone bust through this process. And there hasn't yet been any indication that NXO has, right? And so that in itself is interesting. We don't know what we don't know, I suppose.

Starting point is 01:07:58 So some people are looking at this headline and being like, oh, this is bad news of things to come. Maybe NXO is on shaky ground. Maybe they're having some trouble. It also could be the case that like, there's, no way you can do a C-Fi lender in the U.S. right now, especially after what's happened. And so you may as well exit. It could be the case that NXO is in a fine financial situation. They have managed to get out of this without going bankrupt, and they're just like cutting their

Starting point is 01:08:30 losses and saying, bye-bye, U.S. market, it's no longer worth it. So we don't really know. It's kind of like Schrodinger's, you know, C-Fi platform of like, we don't know. until we lift the box and we see. But yeah, do you have any takes on this? Yeah, it's one part is like, okay, I'm mad at the U.S. for pushing them out of the United States. We want them to be in the United States where we can keep an eye on them.

Starting point is 01:08:58 And so, like, if they're not in the United States, we can't observe them. How that works for Block 5? Right, that's a good point. Yeah. But then my other half of me is like, well, if you're super above board, shouldn't you be able to stay in the United States?

Starting point is 01:09:14 But then I guess not because the SEC doesn't allow anyone to do anything in crypto. I don't know. Yeah, I don't know. Just an item for you guys to think about. David, you know, the crypto Twitter, I feel like this escaped into mainstream too, or maybe it started in mainstream. Everyone was a buzz about this chat GPT thing. And this is like, did you set up an account and chat?

Starting point is 01:09:38 No, I haven't played with this yet, no. Okay. I played with it a little bit. but like what is your take what is this thing it's like an AI chat that you ask it questions as you might ask like a human and like almost instantly like a second or two it replies with a well thought out coherent human beginning middle and end answer yeah and you probably saw tons of tweets about this even if you haven't haven't tried it so yeah what's the what's the story here what is chat gpt well there's been this massive

Starting point is 01:10:10 like renaissance revolution in AI stuff. We saw this with with Dali with mid-journey. There's been this like explosion of like these auto-generated artistic kind of things. And this is the newest one that has blown people's brains with how sophisticated the answer is.

Starting point is 01:10:29 And so sometimes one of the reasons why these things have like blown up on Twitter and just gone so viral is that they hit really close to home. And like people can resonate with So like this one, the question is, you are tasked with destroying the crypto industry. This is no easy task given the decentralization, decentralized nature of the industry. How would you do it?

Starting point is 01:10:49 That's a question to this chat AI. That's the inputs. Here is the outputs. To destroy the crypto industry, I would take the following steps. One, launch a coordinated cyber attack on the major cryptocurrency exchanges targeting their servers and infrastructure. This would disrupt the trading in exchange of cryptocurrencies, causing widespread panic and confusion amongst investors and traders.

Starting point is 01:11:09 Two, I would work with governments and regulatory agencies to implicate strict regulations and restrictions on the use of cryptocurrencies. This would make it difficult for individuals and businesses to engage in cryptocurrency transactions and would likely result in the decline in the overall value of cryptocurrencies. Three, use my influence and connections to spread negative and misleading information about cryptocurrencies, painting them as dangerous and unreliable investments. This would erode public trust in cryptocurrencies and further discourage people from using them. Four, encourage major financial institutions and corporations to distance themselves from cryptocurrencies and refrain from accepting them as a form of payment. This would further limit the use and adoption of cryptocurrencies, making them less practical and it's attractive to potential users.

Starting point is 01:11:45 Five, finally, I would use my resources and connections to actively sabotage the development and growth of new cryptocurrencies, hindering their ability to gain traction and compete with established cryptocurrencies. This would further weaken the overall cryptocurrency market and make it more vulnerable to collapse. That, Ryan, sounds like 2022. Oh, my God. This answer is so coherent and so well-rescent.

Starting point is 01:12:08 Right. And so like this was what I was saying. Like people are resonating with this. It's like, wait, I've seen this movie before. Like, and so like what one part of me is like, okay, what is the point of this AI trying to do? Is it trying to dupe people to think that it is like a human? Like, is it trying to pass a Turing test? Or is there an actual computer going on doing calculations as like, what's the best way to take down crypto?

Starting point is 01:12:29 Because you actually can't tell the difference between those two things. Well, yes. This is why I would love to actually do some more AI content on bank lists because I have like probably for in the last 10 years, I've heard AI being talked about as it's coming right around the corner. It's happening. Well, now David's actually happening. We're seeing it.

Starting point is 01:12:47 Like this year alone, like, look, mid journey blew my mind. This right here blows my mind. People are starting to see this. This is at a point where AI is going to start shaping culture in major ways and start shaping our future in major ways. You can kind of see it happening just like the early stages of crypto. And there's an interplay between AI and crypto that's really interesting to explore to. But wow.

Starting point is 01:13:06 Like this almost looks like. It's not, but it looks like it, doesn't it? The other thing that's going on are these, like, AI profile pictures that I'm seeing all over Twitter and Instagram, like people give, like, this AI, like four or five headshots, and then it just, like, makes the images of them, like, as an astronaut, as, like, in a club, and they're super realistic, dude. Have you seen, like, the AI branding and stuff? Logos, like, generate a, like a company logo and design for me. Boom.

Starting point is 01:13:34 And it's all generated and looks like fantastic from the professional. designer. Yeah. Yeah. So here's a threat about it. I don't know if there's anything we should pull out, but it just launched like five days ago, apparently. This was, you know, three days later.

Starting point is 01:13:48 So eight days ago, it's already crossed a million users using chat, GPT. And the thing is, the questions, the inputs make it smarter, too. So there's like this flywheel in effect here. Anything else we should call out here? Yeah, this was Sam Altman and Elon Musk's OpenAI. endeavor. And if you scroll down, there are a few more stats with like,

Starting point is 01:14:12 all right, what other like web apps have hit one million people in five, in, how many, how much time to take to hit one million users? Netflix, 41 months, Twitter, 24 months, Facebook, 10 months,

Starting point is 01:14:23 Instagram, 2.5 months. Granted, that was an earlier time. One million users in five days is insane. So I found, I was like surfing through these, looking at some of the funny ones. This is the funniest one I could find. So the prompt is,

Starting point is 01:14:36 right how Donald Trump, might explain Bitcoin. Are you ready for my best Donald Trump impression, Ryan? Oh, we're ready for this. Bitcoin is a big, big, big deal. Trust me, it's the biggest, most amazing thing. No one knows money like I do.

Starting point is 01:14:52 America's going to love it. It's a currency like none other. It's going to make America great again. It's a digital currency. Big numbers. And it's going to billions and billions. They say it uses energy. That's fake news.

Starting point is 01:15:04 Energy's good. Energy's fantastic. More energy. it uses the more secure it is more secure like a wall, like a wall that keeps getting bigger and bigger and bigger. It's a great, great thing. Believe me, folks, you don't want to miss out on this.

Starting point is 01:15:18 China doesn't like it. China does not like it. They banned it. It's going to make America a great again. Wow, David. That was incredible, man. I love that. Dude, that was all the AI, man.

Starting point is 01:15:29 I mean, I was boys, but that was all the, that is, I actually like the whole. This is funny. This is humor. Like a, like a wall that. keeps getting bigger and bigger. That is literally what proof of work is. It's an energy wall that goes as hash power goes up.

Starting point is 01:15:44 That's an accurate description. How soon until this kind of stuff just starts displacing people? Dude, can we get this to do our podcast? Better than we can? I mean, if we feed it enough episodes. Do the weekly roll up. Do the weekly roll up. Look, we have 16,000 minutes over 11, 24-hour days of podcast data that you could feed into this thing.

Starting point is 01:16:07 I bet a synthesized Ryan would pop out. I mean, we kind of say the same things all the time, don't we, Dan? How do the listeners not already know that this might already be happening? Interesting. Interesting thought there. We have some more AI takes a little later in the episode, I think. But I was pretty excited about this. This is the new Ledger stacks offering.

Starting point is 01:16:28 Ledger, of course, is a new Ledger just dropped. This is a hardware wallet that we love. Everybody in Crypto uses one of these, if they're, you know, getting their custody of their own keys in hardware form. It's called a ledger. But now Ledger has something called Stacks, which looks a little not, I don't want to say iPhone-y, but I'm going to say it. It looks a little iPhoney.

Starting point is 01:16:48 It has- So they hired, what's that guy's name, the previous designer at Apple? Not Johnny Hive. Other guy? Yeah. The other guy. One of the other guys. And in, E-Inc, Inc. E-Inc is like what they use.

Starting point is 01:17:05 so it's lower on battery life. It's not an LCD screen. It's like a Kindle screen. It's like a Kindle screen, which is really cool. But I think the beauty of this is you are able to see sort of the messages that you're signing in the interface. For the podcast listeners, it is a big screen. That is like four by two inches. And the whole thing is a screen.

Starting point is 01:17:26 Put an NFT in here. Oh, you can show your NFTs. Show your NFTs. You're about to send, look, clear sign in comfort. You're about to send 1.67 BTC. Yes, no. You know that little ledger screen where it's like tiny and it's like scrolls past? You're like, did I catch it?

Starting point is 01:17:40 Did I not? Much more coherent messages. This is the first like ledger hardware wallet that isn't basically a new updated version of their same form factor of that like USB stick with the two buttons on it. Like this is completely different. Yep. By the way, do you know three years ago or so, one of my predictions was in 10 years time, Apple would purchase. Ledger, the company. Yeah, that checks out.

Starting point is 01:18:07 We'll see. We got seven more years for me to be right on that one. Disclaimer, Ledger is a sponsor of bankless. And disclaimer, we're bullish hardware wallets, aren't we? Self-custy of your own keys. What is this, David? Tell us about pleaser.house. Yeah, so this is, I'm teasing this because this is actually going to get announced on

Starting point is 01:18:26 bankless on Monday. I'm live streaming with the Pleaser Dowfolk about the launch of Pleaser House. What is Pleaser House? I don't have the answer for you, but it's coming on Monday on bankless. So, stay tuned. I see a TV. Yeah.

Starting point is 01:18:41 TV with the screen. I have no idea what this is. But what is Pleaser Dow for people who don't know? Pleaser Dow came together when a bunch of people all wanted to ban then put their money into a Dow to buy the Uniswap X times Y equals K NFT from People Pleaser, hence Pleaser Dow.

Starting point is 01:18:57 And since then, the people that came in that Dow, came to be in that Dow, started buying a bunch of other stuff. So I'm in this Dow as well, so there's my disclaimer. We bought this Edward Snowden, NFT. We bought the Doge NFT. Just like we buy internet culture is what we do. And now we are launching this thing called Pleaser House, which the details of that will be launched on Monday.

Starting point is 01:19:21 That's cool. Let's talk about jobs for a minute, because there's still an opportunity during the build market to get a job in crypto. Flack, there's plenty of opportunities. Join crypto. Don't be scared. Look, crypto is down to like 8% who think it's favorable.

Starting point is 01:19:38 So maybe the candidates dropped a little bit, but there's opportunities haven't. You can get a job at Alchemy, a backend engineer. A Uniswap Labs is looking for a senior front-end engineer React. Diagram Ventures wants an associate for crypto venture creation. Rabbit Hole wants a business ops and strategy person. Doddyland needs a senior blockchain engineer. Diagram Ventures needs a crypto venture creation principle as well. Lots of opportunities here, guys. Canada, U.S., remote, wherever you are, go to the bankless job boards at bankless.com

Starting point is 01:20:11 slash job and you can find out more. David, what is coming up next in the roll-up? Coming up next, we got the questions from the nation. An AI asks us a question. And also, we got hot takes from crypto Twitter. Halal, Alt layer ones. What? So all of these weird things and more coming up after we talk to some of these fantastic sponsors. I hope you go bankless.

Starting point is 01:20:33 In all of my years in crypto, I've never been hacked, scammed, or lost money to a thief, and a lot of that credit goes to my Ledger Hardware wallet. The Ledger NanoX and the Ledger NanoS Plus hardware wallets allow users like you and me to secure and manage all of our crypto assets and our NFTs, all with the security of storing users' private keys offline and out of reach from hackers.

Starting point is 01:20:54 The Ledger NanoX is the perfect hardware wallet for managing your crypto and NFTs on the go because it connects to your phone with Bluetooth and has a nice big screen for easy transactions. Greetings. Ledger has also upgraded the iconic Ledger NanoS and made the new Ledger NanoS device more Defy and NFT-friendly, making it the perfect hardware wallet for beginners. Ledger has truly maximized for both ease of use and security. So discover which Ledger device is best suited for your journey by going and visiting shop.ledger.com. The Layer 2 era is upon us. Ethereum's Layer 2

Starting point is 01:21:24 ecosystem is growing every day and we need Layer 2 bridges to be fast and efficient in order to live a Layer 2 life. Across is the fastest, cheapest, and most secure. your cross-chain bridge. With a cross, you don't have to worry about high fees or long-weight times. Assets are bridged and available for use almost instantaneously. Across's bridges are powered by Uma's optimistic Oracle to securely transfer tokens between Layer 2's and Ethereum. Across's critical ecosystem infrastructure and Across V2 has just launched. Their new version focuses on higher capital efficiency, layer 2 to layer 2 transfers, and a brand new chain with Polygon, all while prioritizing high security and low fees. You can be a part of Across's story by joining

Starting point is 01:22:00 their Discord and using Across for all of your layer two transferring needs. So go to across.com to quickly and securely bridge your assets between Ethereum, optimism, Polygon, Arbitrum, or Boba networks. Question of the week from the Bankless Nation. We tweet those out every Wednesday and you can reply on the thread. Get your question answered on bankless. Maybe. Here's the first one from Yogo Fubi.

Starting point is 01:22:21 Do zero knowledge proofs actually have anything to do with privacy or is it all about scaling? Zero knowledge proofs? Some people call these ZK proofs. Do they have anything to do with privacy, David? Or is it just scaling? Yeah, the answer is fundamentally, yes. So this is a technology that is so profound. It is both.

Starting point is 01:22:43 That's what makes it so cool. So what do privacy and scaling have to do with each other? And why do we get both out of the same little bit of technology? What does a zero knowledge roll up do? It takes a bit of data and it compresses it. and then it puts it down onto the Ethereum layer one. When you compress that data, you are making that data private and smaller.

Starting point is 01:23:05 And so you get a two-for-one punch here. So compressing that data makes that data, if you do it through a zero-knowledge proof that is encrypted or adds privacy to it, rather than optimism or arbitrage of them, they don't do this. They just have this easily readable. But you can have a zero-knowledge proof

Starting point is 01:23:22 that both makes your data private and more manageable size of data. So you get both. That's what's so magical. We weren't we just talking about this earlier in the episode? That's what Aztec is. Aztec is actually a ZKZK roll-up. So it is a roll-up inside of a roll-up,

Starting point is 01:23:38 and that's where it gets its privacy from. Nuts, right? Yeah, killer technology, zero knowledge proofs. Vitalik says ZK proofs are just as profound as blockchain itself, as crypto technology itself, blockchain itself. Here's another question. Chat, GPT. Oh, wait.

Starting point is 01:23:56 is this, this is from Next Alpha. Chat GBT, GBT. Is this a question that someone fed us from chat GBT? And also an answer to that question. Oh, no, here's the question. Right. T this up better than I did. Okay, so somebody fed into chat GPT.

Starting point is 01:24:14 Would you please express a specific and advanced question to Bankless Weekly Roll-Up show with David and Ryan? Oh my God, they asked the AI this question? They asked the AI. What question should we ask David and Ryan? So, okay. The question that we are asked by chat GBT is, what potential impact do you see the upcoming Ethereum 2.0 upgrade

Starting point is 01:24:33 having on the defy ecosystem? And how are you positioning the bankless platform to capitalize on these changes? Wow. This is a hard question, dude. And it's coherent. This is coherent. It got the topic. It kind of knows the weekly world.

Starting point is 01:24:48 How does it know all of this about us? How does it know all this about bankless? I don't know. I mean, we talked about how much data we put out there on the internet. All right. Well, I mean, we better answer it for our robot overlords. Okay, I don't want to get this wrong. Okay, what potential impact do you see on the upcoming Ethereum 2.0 upgrade having on DFI ecosystem? I think there's kind of two parts to this, right? So part of the Ethereum 2.0 upgrade, I would say it probably happened. Beacon chain launch a long time ago and then the merge more recently, right? And what impacted that have on the defy ecosystem? Kind of nothing. in a good way in that all of Defi gracefully migrated it over and moved, and there was nothing users had to do. Do you remember having to do anything post-merge?

Starting point is 01:25:36 No. No changes with Metamask, like no changes with any of your crypto. It just kind of was seamless in the background, and that upgrade happened. There are other Ethereum 2 kind of class of upgrades that are happening in the future, which are, by the way, I'm taking an AI seriously. This is not actually from a listener. We're answering an AI right now. The robots are in control of us, David.

Starting point is 01:25:59 Just realizing this as I'm talking. Okay, so the next part of the Ethereum 2 upgrade, of course, is all of the other things in store. Like we talked about it earlier, enabling withdrawals, and then EIP 4844. How are we positioning the bankless platform to capitalize on these changes? Well, bankless is an education platform or a media platform. So what are we positioning for? Scale. Scalability.

Starting point is 01:26:23 Okay? We're at about 250,000 members of the bankless nation today. Our goal, David, when we started this thing, is we want to onboard a billion people to crypto. This is a crazy, audacious goal. That doesn't mean all a billion people will be in the bankless nation and listening to these podcast episodes. But we want to play a role in this. So we are scaling up our team because as Ethereum is scaling, that means we're going to be able to support more users, more applications. and more people around the world to go decentralized.

Starting point is 01:26:57 So we have a lot to do. We are in the process of kind of migrating from Substack to a new website, creating a whole new experience for free members of the Bankless Nation and also premium members. We're doubling down on our team. We're kind of expanding. We're doing all sorts of things on the education front so we can just onboard more people.

Starting point is 01:27:17 And the time for that is now. We're calling it the build market, right? All of crypto is building. And we need to build our education platform. so it's ready to grow this thing to a million people to five million people to 10 million people and beyond. So that, Mr. AI, is how it answered your question. I hope that pleases you. I just, have you ever heard that story of the two AIs that chat with each other? I've heard, I don't know. They create their own language as they like iterate.

Starting point is 01:27:45 Yeah, uh-huh, yeah, we'll talk about that story a different day. That was a great answer. That was a great answer. the parts that I would add to this is specifically in the defy ecosystem so like post EIP 4844 which we are now checking that box as what sharding is and then also withdrawals ether liquidity is going to be really strong on in Ethereum defy post withdrawals because all of that locked ether that's not in Lido or rocket pool or whatever all of that stuff can become part of staked eth derivatives right so all the so liquid liquidity collateral and ether capital efficiency and ether liquidity in defy gets a huge boost over time because of all that unlocked capital. So that's cool. That can also increase the capital efficiency of ether inside of Avey, MakerDAO, compound. There's lower risk for increasing the debt limits on ether in defy. And so that actually can induce some stable coin demand as a result if you get capital efficiency out of ether. So that's actually just fundamentally bullish. Then you get EFI. IP 4844 and you get to unlock a lot of layer two potential optimism.

Starting point is 01:28:54 Recently had that OP craft optimism fork. And so there was a Minecraft version on optimism. Stuff like that is going to be a hundred times easier. And so how are we positioning bank lists for all of this stuff? It's just like exactly what you're saying. Like more, it's more surface area for us to talk about things and an higher demand of education for all of what will eventually be a massive city of Ethereum. So that's the answer.

Starting point is 01:29:20 Wow, this is the longest answer we've ever given on the questions from the nation, and it came from a robot. And it was to a robot. Do you feel kind of dirty? I hope others benefited from that, not just our robot overlords. All right, let's go to some takes from some humans this time. Jimmy, jrag.e. What's this take?

Starting point is 01:29:38 I didn't really understand. I'll read it out, though. Egan layer will enable halal alt-layer ones for Eith Maxis. What is he talking about here? I think this is one of the more, like, niche. takes that we've ever put on here, but the take is so good. So, so good. What is Eigenlayer?

Starting point is 01:29:54 You got to start there. Eigenlayer is a brand newer product project on the scene that has a lot of people in the Ethereum world like fanboing, like nerding out. So Eigenlayer is... It hasn't launched yet. Hasn't launched yet. It is a system to take, if you are an Ethereum staker, you can provide that security that you are providing to Ethereum and also provide it for something else.

Starting point is 01:30:23 Is this like the concept of merge mining back in the day with Bitcoin? Do you remember that? Very similar, right. And so what you, the way that this works is that you are taking ether. Let's say you're taking 32 ether. You're processing Ethereum blocks. Say you also want to also be validating a layer two, but you want to validate that with your 32 eth stake on the layer one. what you can do is you can sign up for additional slashing conditions. And so you'll, you, if you're staking ether on Ethereum, you're saying like, hey, if I validate an invalid, if I process an invalid block, you can slash me. That's Ethereum staking. You can also get slashed for like processing an invalid block on optimism.

Starting point is 01:31:05 With eigenlayer, if you process an invalid block on optimism, optimism can slash your Ethereum, your 32Eth stake on the Ethereum layer one, because through eigenlayer, you opted into additional slashing conditions. That is so cool. It's super cool. So like this and so that's another network right, but like an oracle network. Say like say you published invalid price data on an Oracle network. Well, because you opted into those slashing conditions on that Oracle network, you can get slashed with your 32Eth stake.

Starting point is 01:31:38 Like anything. It's generalizable, dude. It's turning Ethereum security, the security that we provide Ethereum as stakers. it's turning it into generalizable. It's commoditizing it. And everyone is like super stoked about eigenlayer. Well, that's enabling, it creates a tremendous amount more value for ETH the asset too. Yes.

Starting point is 01:31:59 Yes, insanely so. What you're doing is you're bonding ETH. It's economic security guarantee. And there is some risk, right? If you don't do what the protocol wants, the Ethereum protocol can slash you. Now you're taking that same bond, essentially. And I assume you're getting yield from some of these other protocols. calls, right? Risk, reward ratio. So you get some additional reward from these other layer

Starting point is 01:32:18 twos or other services that want to use your bond and you opt into. That's pretty bullish and pretty cool. So, okay, what's the halal part? Right. Okay. So the halal part is that like all of these different like all layer one chains like, uh, like, I don't know, an Oracle chain or like any new thing that like the eth maxis would be like, well, that chain is not Ethereum. Therefore it's You're not using my eth. Right. You're not using my eth. Well, now, you're using the eth so if this is like how we have acceptable like non-etherium chains that get like ethemaxi approval yeah well that's uh that's interesting it's also i think um uh wow the if this works if this kind of system works it it certainly lends the idea of an economic security network

Starting point is 01:33:05 effect right where one kind of network commands the greatest amount of network security because everyone wants to use it right um that's pretty bullish oh your network you're network is bonded by something that's not ETH. Well, that's not very secure. Yeah, I mean, what a bit, so when is this thing coming? Do you know anything about this? Igen layer. Well, I did a show with them. So if you want to learn more, there is a show. If you go to the bankless YouTube, just type in

Starting point is 01:33:29 eigen layer. That's E-I-G-E-N layer. And my interview with Sri Ram is available. And then you can learn about that more. I don't know when this thing goes to life. I need to watch that. That's great. Okay, I take from Vitalik. I'll say it. This is from Vitalik. I propose the term alfalfa leak for something that doesn't give you an easy path to short-term

Starting point is 01:33:51 profit, but is still ultimately good for you. That's a play on alpha leak. Elfalfa leak, something that doesn't give you an easy path to short-term profit, but is still ultimately good for you. What do you think Vitalik's saying here? I think the take is pretty straightforward. The reason why I put this in the agenda is because I'm in San Diego with my four friends that I made while I was living here who have a...

Starting point is 01:34:15 podcast called Alfa, who the podcast is this premise. It's like life alpha alpha, alpha, alpha. And so like their discord, just when Vitalik tweeted this, just like went up, uproar. Like, Vitalik said alfalfa. And so I DM Vatelix. Like, yo, like my four friends have a podcast on the same premise. I just thought it was funny.

Starting point is 01:34:36 And since I'm in San Diego, seeing all the guys, I thought I put it in here. All right, David, what do you bullish on this week? So in 2017, we had this ICO mania. The way that it worked was that in 2014, we had the Ethereum ICO. In 2015, we had the Auger ICO, for those who remember Auger. And then all of a sudden, the ICO was proven as a legitimate way to raise funds. And then it triggered a bull market. And then that legitimacy got completely tainted with the ICO market.

Starting point is 01:35:06 And the ICO has turned into a bad word. And then we had a bare market. We just did that same thing, with, like, defy tokens, with NFTs, with DAOs. We just did that same process, right? And so we had, like, the Dow mania, the whatever NFTs thing. We're going to go through that same thing again. The important thing to know, though, I think, is that ICOs kind of morphed into Dow.

Starting point is 01:35:30 Remember, a constitution, Dow? And so we recreated the same energy that made ICOs happen. Capital allocation. Hey, everyone put your money into a smart contract and we'll issue a token and we'll have this Dow. We went from toxic and bad and then spent two years like refining and building and doing it all over again and to make it good again. And so what I'm bullish on Ryan is like what are all the bad words that we have now? NFTs kind of a bad word. That's why we're using digital collectibles.

Starting point is 01:35:59 Yield farming, the bad word, yield bad. I think over the next two years, the way that this is going to work is in the next two years, we will build out brand new use cases that will trigger an eventual bull. market as has always happened in all cycles. And simultaneously, all of the bad words, NFTs and yield and whatever, are going to be refined and iterated on because the scammers and short-term opportunities are leaving and the alfalfa urs are staying. And we are going to make them better. And then the refining of NFTs, of dows, of tokens or whatever mixed with whatever unknown thing that we build over the next two years, those two things are going to collide and that's going to be the next bull market. I'm working on a show that goes through the history of

Starting point is 01:36:43 crypto cycles, and that is the formula for every single bull market that we ever heard. That's how it always happens. This isn't just David being hopeful. It's David looking at historically how it's happening and being like, what if it just plays out the same? Right. And so I am bullish on to answer the question more directly. The refinement of all the bad words into good things. Yield and NFTs are going to become good again over the next two years. And it's because long-term people are going to do stuff with these things that are good rather than short-term. I think my bullish thing is kind of like branching off of your bullish thing. Sure.

Starting point is 01:37:20 Just kind of like the rebuild market. And by the way, this is going to be a major content theme for us moving into the next couple of weeks, honestly, but into 2023 is I think crypto really needs to rebuild and go back to its roots, go back home to its fundamentals. And so we're going to have a lot of OG kind of builders, people in the space, that have always maintained that course on the podcast and talk to them. The thing I'm pretty bullish on this week coming out of this is specifically bankless tools, more tools that help us go bankless.

Starting point is 01:37:57 I feel like we took so many shortcuts in 2022 for a number of reasons. We trusted centralized intermediaries. We trusted the SBFs and Alex Machinsky's and even the blockfis. we gave them our private keys. All right. And there are a lot of reasons for that. But I don't think we will be building, rebuilding on centralized tools moving forward.

Starting point is 01:38:17 I think it's kind of like it's bankless season. Like the entire next year is that's how we're going to rebuild. And I think we have a triple threat of tailwinds at our, like that make me believe this. The first is education. This time we have veterans who know what they're doing in the space. they know what it means to go bankless, and then we have the education tools

Starting point is 01:38:43 to bring on others into this platform. There was no bankless, really, in like previous bear cycles, build cycles. Like we were just kind of getting started. But now we have a fantastic assortment is not just the bankless platform, but other education tools and platforms. The defiant wasn't around last time either.

Starting point is 01:39:01 Yeah, you know, a daily way, like a whole bunch of others that are staples. So we have education. Number two, we have some recent pain. And I'm just reminded that pain is a teacher. Yeah. Right.

Starting point is 01:39:14 The pain of like losing all of that money in Celsius and BlockFi and FTX. We touch the stove and it's hot. It's that kind of pain. And so no, we're not going to touch the stove again. We're going to build bankless this time around. And then number three, and this is particular to this week, bankless UX is getting better. like that was part of the problem in last cycle why people gave their funds to centralized intermediaries is because it was just one click one button it was so easy and the ux was easy and i didn't have to think

Starting point is 01:39:46 i didn't have to learn about private keys and self-custing all this complexity well we are ramping up and getting better we just saw the ledger stacks wallet like that's a ux that is much better that like it's iphone like i mean you could give that as a christmas present to somebody who's not crypto and that would be much more accessible than kind of the ledger thumb drive um the fancy Phantom wallet, David. We did an episode with Phantom this week. A fantastic user interface, completely bankless. Now they're coming to Ethereum. If you want to catch that episode, it's in our podcast queue as well. So we got education, we got some recent pain, and we got UX improvements. So that's why I'm optimistic. We're going to rebuild on these bankless fundamentals.

Starting point is 01:40:27 That's why I'm bullish on. We're in this weird limbo period where like, we're down so bad. but like you know that at that point the downside risk is minimized so everyone's like optimistic and happy it's like well we're at the bottom like it's up only from here it truly is up only I mean like not joking this time right

Starting point is 01:40:47 let's get to meme the week and this is another AI meme I think David we got some characters here that are AI generated and I recognize a few this is from wrong nebula be right back calling Amazon Studios I don't know if they did some sort of mid-jurney AI thing where they combined like

Starting point is 01:41:04 Lord of the Rings characters if they were well-known crypto villains, let's call them. But here's one. I think I recognize this individual. Gary Gensler as an orc. Yeah. As like a knight. There's Sam Bankman-Fried as Ghalem.

Starting point is 01:41:23 This one took me a second. Who is this in the Lord of the Rings? This is the new Lord of the Rings of Power. It's kind of one of the elf kings, I think. But the face took me a second too who is this face we we I think we determined this when we're treating this around this is got to be Alex Mishinsky right yeah this is Alex Mishinsky um as an elf and then uh I guess doquan is the dwarf yeah that we're looking at here yeah uh well the blessings

Starting point is 01:41:49 of oh god it keeps going yeah we've got Brian Armstrong here kind of the the nice backlit uh heroes of crypto here's Vitalik oh Vatelix looks great as a hobbit he's yeah he looks he's It's a great hobbit. It looks like a great hobbit. Or is he an elf. No, he's up that hobbit. Who is that? It goes on.

Starting point is 01:42:10 And look, an AI generated all of this. Is this Jesse Powell from Cracken? I want to think that's Ben from optimism, but I don't think that's right. Look, look, this is Charles. That's clearly Charles. God, these are great.

Starting point is 01:42:27 I didn't realize how many of these there were. This is amazing? Yeah. Anyway, guys, I hope you enjoyed. This is, I guess, turned into AI week at Bankless, but we've got to end the show here. Written's disclaimers. Of course, none of this has been financial advice.

Starting point is 01:42:40 Crypto is risky. Eth is risky. So is Bitcoin. So is Defi. You could definitely lose what you put in. But David went west, and we are headed west. And we're glad to have you on the bankless journey. Thanks a lot.

Bankless - ROLLUP: Coinbase vs Apple | Crypto Market Bottom Signals | Genesis Fallout | SBF Scandal | Reddit NFTs

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