Bankless - ROLLUP: Crypto’s 2-Week Deadline | The CLARITY Act | $100 Oil | OpenAI Model Escapes

Episode Date: July 24, 2026

Ryan and David unpack the CLARITY Act’s last-minute lifeline, $100 oil, BitMine’s ETH slowdown, and the OpenAI model that escaped its sandbox. --- 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24 https://bankless.cc/spotify-premium --- BANKLESS SPONSOR TOOLS: 🔒NEAR | TRADE CONFIDENTIALLY, GET 20% BACK https://bankless.cc/near-20  📊BITGET | TOKENIZED STOCKS 2.0 https://bankless.cc/bitget-stocks  🧭OKX | TRADE, EARN, PAY to OKX | 120M+ USERS WORLDWIDE https://app.okx.com/join/USBANKLESS  🎯THE DEFI REPORT | ONCHAIN INSIGHTS https://thedefireport.io/bankless  👑BANKLESS PREMIUM | AD-FREE & BONUS EPISODES https://bankless.cc/spotify-premium --- TIMESTAMPS 0:00 Intro 0:33 CLARITY Act at a Crossroads https://x.com/EleanorTerrett/status/2079334038104408522 https://x.com/EleanorTerrett/status/2079962528243650990 https://x.com/coindesk/status/2079633633023836667 https://x.com/EleanorTerrett/status/2079608362522575063 https://x.com/politico/status/2080261045114065177 https://polymarket.com/event/clarity-act-signed-into-law-in-2026/clarity-act-signed-into-law-in-2026 17:56 BitMine’s 5% ETH Strategy https://x.com/BitMNR/status/2079184988541448638 https://x.com/ykkz99/status/2079607294354964696 https://x.com/ykkz99/status/2079244980103659697 https://x.com/coindesk/status/2079200035045036162 27:40 Hester Peirce Eyes DeFi Vaults https://x.com/HesterPeirce/status/2080011999702880341 https://x.com/CJRobins01/status/2079976258423627785 https://x.com/Bankless/status/2079536878588715366 https://morpho.org/blog/now-live-morpho-midnight 38:28 BitMEX’s End of an Era https://x.com/CryptoHayes/status/2080286601125482771 https://x.com/BitMEX/status/2080201602456301580 44:36 NEAR Goes Post-Quantum https://x.com/NEARProtocol/status/2079189515843821764 48:58 TradFi Moves Deeper Into Crypto https://x.com/EricBalchunas/status/2077774644652790240 https://x.com/JSeyff/status/2077792050573918432 https://crypto.com/us/company-news/cryptocom-announces-400-million-strategic-investment-from-citadel-securities https://x.com/mzorkin/status/2077834551091478695 54:07 OpenAI Model Breaks Out https://simonwillison.net/2026/Jul/22/openai-cyberattack/ https://huggingface.co/blog/security-incident-july-2026 https://openai.com/index/hugging-face-model-evaluation-security-incident/ 1:02:40 Closing & Disclaimers --- Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures

Bankless Nation is the 4th Friday of July, and it's time for the bankless weekly roll-up. Topics of the week, the Clarity Act, the volatility around the Polly Market for Clarity Act is just at an all-time high. Trump said he conceded, Ryan, that he would be ethical. That's good. So that means we get clarity, right? Like, Trump says he's going to be ethical. That means we get it? Yeah, I thought that was the thing that was holding us up.

So we'll have to discuss that. And is that going to get us across the finish line to the Senate votes that we actually need? And why is the polymarket only coming in at 40%? We're going to talk about all of that. But big news, $100 oil is back. It's up 40% in 20 days as renewed tensions over around the straight of Hormuz. And that is sending the SPY spiraling. It's been a bad week in the tradfai markets, Ryan.

But an okay week in crypto. There was definitely some strength in the crypto market. Crypto is up this week while we had equity weakness, which I don't know. Bottom? Don't say it. Don't say it. Not yet. Not yet. Okay. We also have Ethereum's biggest buyer tapping the brakes a little bit. We'll check in on BitMine and Tom Lee. Also, Commissioner Hester Purse is hitting the brakes on D5 volts and she has some reasons why. We'll discuss that. And then David, got to get to this story this week. It's an AI story, but has some crossover with crypto for Defi in particular. An open AI model broke out of its sandbox, hacked another AI company by itself. using zero-day exploits. All right? Are they coming for Defi next?

We've got to discuss this story. Everything's going to be fine. Everything's going to be fine. And lastly, NIR becomes the first blockchain to become post-quantom. So we've got to start the near updates as well that we'll talk about. But we've got to start with clarity.

Is there a chance, Ryan, that clarity passes. There's always a chance, David. But let's talk about what has developed on the week. So I saw this earlier the week. This is Eleanor Territ, who says she's a, reporter, been tracking clarity, many crypto regulatory things for a while. I'm hearing from multiple industry sources the White House has

agreed on an ethics package for the Clarity Act. Yay! That was it. That was all that we needed. Yeah, this is a pretty big ethics packet. It's 616 pages. I'm sure you've read all of those pages. Every single one. David, but like, this is basically

Trump saying, all right, we will put some ethics stuff. You got me. You got us. Of course, the Clarity Act was stalled in no small part due to Democrats not getting on board with passing a crypto law without blocking Trump and friends and associates and future people in the government

from actually doing things like launching meme coins and making money on these sorts of assets. Launching issue any sort of crypto asset. And that's really what the ethic provision that we got the details of, what it really bars. And so the president, vice president, Congress, judges, and all of their spouses are banned from issuing or sponsoring tokens for compensation.

And so that is what is in the ethics package. So Donald Trump can't issue coins. Future presidents can't issue coins. Their spouses cannot issue tokens. And so what's to do? We're good, right? Well, okay, not so fast. I mean, Trump did say this was a historic concession that they were made.

And now the White House, of course, is saying. No one concedes better than me. Yeah, I know. Nobody says ethical as me. It was the greatest concession of all time. The most ethical precedent in history, of course. And so, but like the Democrats are saying, like, hold on, this isn't quite what we wanted. It falls short in a number of ways.

Let's talk about what it actually does, though. So you said it blocked presidents, VP, Congress judges from issuing, sponsoring tokens for compensation spouses. There was one group of family members that you missed there, David. Oh, who's that? That would be the children. The children of an official. You mean the people with the same name as the president, the court, the judges, all that kind of stuff. People just share the name.

That's right. So that was one kind of potential sticking point that Democrats held up on. The other was this. I can see why that be an issue. Yeah. The other was this is like who enforces it? So they said, okay, like, fine, but you're going to, under this text, it falls short because you're going to have your attorney general nominee.

Blanche, who's a current nominee, which used to be Trump's former personal lawyer, be the enforcer of this. Okay, you see why that's kind of a conflict of interest. Perhaps a conflict of interest. Yeah, and so the Democrats are saying, basically, if you want to get this through, then it has to be state attorney generals

that actually enforces. You can't have your guy enforcing this. And of course, they're pointing out that Trump's disclosed crypto income is already $1.4 billion. This wouldn't block his job. children, and it wouldn't retroactively take any of those funds back. So it would just like...

Do the Democrats want retroactive penalties or something? I mean, it's not quite clear. So all it's doing, let's just be really clear on all it's doing. It would mean Trump cannot issue a Trump-style meme coin again. Okay? So like what's done is done in the past. Or WFLI. It would also cover WFLI.

Yes. Or end NFTs. That's right. And so he can't do that for the rest of the rest of the past. of his term. I think NFTs? I'm actually not sure there. Does it say NFTs?

Did they specify fungible tokens? I'm not sure. I'm not sure. I'm guessing it includes NFTs. Melania also couldn't issue but I guess their kids could. Their kids could, which is a big, big, big loophole. What's this deal about this sunsetting in January of 2029?

It just covers one administration. So it would be in a fact. So it's just this president. And so the next president, this is not relevant to? Because why? There's a sunset term. I assume you could renew it, of course. But like, I mean, maybe that's less important to the Democrats because they care very much about this president. I don't know when Nancy Pelosi gets in the office. They'll be great. Hermione will be great. It also mandates that covered officials have to put all of their

crypto assets into blind trusts that they don't control. And, you know, Trump's assets are really already in blind trust that he, quote unquote, does not control. It's controlled by his son. So does that even count as blind? I don't know. It doesn't claw back any of this stuff. What's done is done. You can understand why Trump signed on to it, right? It's like the meme coins down.

I've already done all the things I want to do. I already got my $1.5 billion. Yeah. So I think there's a question, though. Let's say the Republicans given, the White House gives in on everything that the Democrats want from an ethics perspective. They're just like, okay, we heard you. ethics section. Yes. Let's say

the Democrats got everything they wanted. The question is, would clarity pass if that happened? What do you think? Yeah, right? Like, isn't that what? Isn't that the only thing? That's the only issue, right, Ryan? I don't know. See, I don't know. There are

seven Democrats that are saying that it falls short and they're pointing to ethics, but they're also mumbling about things like consumer protection isn't quite covered under clarity, illicit finance. So that's like AML KYC stuff. Market integrity.

They even mentioned generally other conflicts of interest. So there's a good... So it's not just ethics. I mean, that's kind of what they're saying. Yeah, I guess one interpretation is they kind of could be posturing. Like maybe we solve ethics and then they just kind of maybe they want more, but they give in. And so that's possibly something that could happen. That's right.

And we've long known that the left on kind of democratic side wants to, to kill the deal entirely, right? Like, Elizabeth Warren doesn't want any form of this actually passing in any recognizable form. And so there is a group of a contingent that wants to kill it as well. But all you need is 60 votes in the Senate for this thing to go forward. And it is also clear that Tradfai wants it, right? We mentioned Larry Fink talking about tokenization all of the time. This is Goldman Sachs CEO this week.

He says, it's time to advance the crypto bill. as stratify is getting into, we've been talking about this all year, real world assets, securities on chain, all of these things, they actually want clarity to happen. And so you got to imagine

they are pushing for things behind the scenes in the way that they lobby both on both parties to actually get this passed. Right. So like maybe measuring out the pros and the cons

or the plus and the negatives who's like, you have the Democrats versus the Republicans. Republicans currently have the lead in the House in terms of votes. So we also have all of the lobbying on the side of clarity as well, people like the Goldman Sachs CFO, our CEO. And so there's a lot of reasons why this will go through.

But also on the flip side of things, once the midterms happen and the Democrats probably win, then that's not looking so great. We're running out of time as well. So time is not on our side. And so if we go to the polymarket, that's why the current polymarket is coming in at a 36% chance. There has been some volatility. So it was as high as 50% earlier this week, maybe even 60% earlier this week. But it's been bouncing around 30% to 60%

trending down as we run out of time. But you would kind of expect to see volatility towards the end. That's because it's the most uncertain. So we could get a surprise to the upside, but overall the trend is not in our favor as trying to get this past. I do think the polymark is pretty accurate on this.

And especially the gap you mentioned, So Congress actually goes into recess August 8th. So it's kind of like between now. Two weeks. So we're going to find out in two weeks, basically? Two weeks. And then they do come back. I mean, something could happen September.

But then as you mentioned, it's midterm season. So they're not going to want to do anything at that point in time. Right. Yeah. The Democrats would probably be behooved to just all at that point. I kind of think it's just not going to pass this year. Like I don't like maybe the market's pricing this in. It's not going to pass.

Let's talk about markets now because there was a bit of a bump on this news it seemed like in crypto prices this week, right? Yeah, we lost, there was a little bit of downwards price action on the news that clarity was under threat. However, my current take about current prices is that they are just not weighing in a clarity passing whatsoever.

If clarity passed, we would see a green candle across the board across crypto assets. Did we see, I saw reports of this, that we saw a little bit of green just on the news that there was an ethics package from the White House, and there was a little bump in Bitcoin. Do you think that was noise, or do you think that was just,

oh, the market repricing, possibly clarity could pass? Yeah, I think the market kind of showed its hand a little bit. Granted, again, we're back down to 36% on the polymarket. But if clarity passes, I would expect it to be very good for crypto prices. And if clarity does not pass, I would expect it to not really do much at all for crypto prices. I think crypto prices are like,

well, it's not bullish, but it's not bearish. that crypto, that clarity didn't pass. And so in this position, I'm kind of like actually optimistic here. So we were pretty much flat on the week then in the world of Bitcoin and Ether, but not true in TradFi? Yeah, that's right. So Bitcoin and Ether up half a percent this week, which doesn't sound amazing. It's only half a percent.

It is green, but TradFi was down. Like the NASDAQ lost 2.5 percent today at the time of recording. All indices are down multiple percentages, like two to three percent. for the Nazak and the S&P, mainly because the Iraq war, conflict is heating up again. You said Iraq war. Excuse me, Iran War.

Actually, we apparently were signing a bunch of deals with Iraq, which is wild, but that's aside. The Iran War, excuse me, is heating up again. Oil, Ryan, is up 40% since the start of July. I put out the suite when I noticed oil just going down, down, down, down, down. I was like, oil is literally back to pre-war levels. This is July 7th.

This is July 7th. This is July 7th. I'm like, wow, did we just get really lucky? It feels a little bit too soon. Well, you could, yeah, it feels a little too soon. But if you wanted to, you could see, oh, that was just like the tariff scare. Remember when markets went wacky and wild last April and there was the tariff scare and then everything fully corrected? You could read that in the charts.

But oil is going back up, isn't it? Yeah, yeah. So we can flip to the modern day chart and it's just mooning through the roof. I do kind of think that oil won't be as high as it was in the first phase of the Iran conflict. We're going back up. So right now oil, WTI is like a $95, $100.

I think we're going to range between like $180. Whereas it was previously I had like $110 to $90. So I think we're going to range a little bit lower. But nonetheless, like from pre-war levels, oil is still up. That means that's ultimately going to show up in inflation more. And so we're eventually going to have to like pay this cost in terms of just inflation domestically, but also yields, Ryan. Yields are up bigly on the week.

I don't have a chart for that, but 10-year yields are up pretty high, which is not great. Higher than they've been. And so it's just like harder to be bullish in that environment. But the fact that crypto was up this week, bottom? I mean, I think what we're seeing,

I would not call the bottom right now, of course. I don't think we bottomed. But I would say it might point to some seller exhaustion. that we're seeing. I do think sellers are pretty exhausted at this point, just not fully exhausted to mark a bottom. Close to the bottom. Eighth percent of the way there. How about that? Close to the bottom. We're nine and a half months into the bear market. So usually these things go on 12 months. Maybe we've got another 20 percent or so to go. That's what I would do. That's what I think.

But if we get inflation, high energy prices, we have very high debt on the books. We're closing it on $40 trillion in the U.S. right? Other other countries. Not in much better shape, of course. At some point in time, this has to flow back to scarce assets, to non-fiat store value type assets, things like gold, which has taken a bit of a break since the beginning of this year, and things like our crypto assets. I think you would know as a gold buyer.

Yeah. Things like our crypto assets, like Bitcoin. And the question is, when is that going to happen? We're still early, right? We're still early. You put this tweet in the agenda that I would like to discuss, which is American ownership of Bitcoin versus gold. And these numbers are somewhat surprising.

So the gold, of course, as old as time. So you would expect gold to be owned by a larger percentage of people, right? Yeah, I would. So the average across United States adults, 10.8% of adults own gold. Listener, who's not watching and seeing the screen right now, what percentage of adults in the United States own Bitcoin? The answer is 18.5%.

So almost double own Bitcoin versus gold. Now, what I don't have, the data I don't have is how this methodology was taken. Is this like, are they owning gold and or Bitcoin directly? Is this in like a broader diversified portfolio where they just own indirect exposure to gold because it's in a retirement before? I don't really know. But the data here. And this is from River Financial, which is a Bitcoin bank, basically.

So very long Bitcoin. Maxis, like, run this thing. So when Bitcoin maxis are like 18% of adults own Bitcoin and 10% of adults own gold, I'm like, oh, oh, interesting. Well, there's a question then, if that's the case, like, are we even early with Bitcoin? I will put this addendum here. It's not quite an apples to apples comparison is what this follow-up tweet is saying. Oh, okay. Because the Bitcoin data includes ETFs, whereas the gold data does not include ETFs. Oh, what are we even talking about? This is bad data. All right. Moving on. Moving on. Well, I mean, so like, let's say it's, you know, if you just for that,

let's say it's like maybe like 20 or 30% of Americans that own gold in some form. Yeah. The percent that own Bitcoin is still pretty high. It's like 19%. I just there's a question of can we still say we're early with this asset class? No, literally everyone knows the word cryptoid blockchain. And so like, no, we're no longer early. Doesn't mean that like prices aren't going up, like valuations between Bitcoin or gold are still different?

You know, I do, this does kind of just remind me The way that you set up this segment, it just kind of reminded me is like, back in 2021, we were talking about government debt, you know, debasement, so much and it felt so good. And we don't talk about that anymore. We just talk about fucking Michael Saylor, dude. Well, I mean, we don't talk about it because I kind of have this thesis

that the world can only focus on a few things at the same time. No, I totally agree with that. That's very true. with investors as well in terms of asset classes. And so right now, investors are focused on AI. So AI trade. And so these forces, these secular forces of debt accumulation and balance sheet of countries,

they have not gone away. They have continued. They have accelerated. Eventually come home to Roos. And the longer it goes on, the better, like time is on Bitcoin's side. That's right. Hard assets, hard bearer assets. Time is on our side.

And I'm just like, I don't know, I feel like I'm getting old. It's a good setup. We'll just say that. It's a good setup. Dude, let's talk about this next. The biggest eth accumulator that's Tom Lee has slowed its buying.

Are they going to get beyond the alchemy of 5%? And also, our favorite SEC commissioner, Hester Purse, talks about vaults. Summer vaults, she calls it, in a new speech. Summer vaults? Summer salts? Oh, I didn't realize she punned that. It's so good.

She's brilliant. We'll talk about all. all this and more, but before we do, we want to thank the sponsors that made this episode possible. I've been trading crypto assets for almost a decade, and I've used so many wallets, exchanges, aggregators, front ends, and I'm kind of always looking for the same thing. One interface with deep liquidity across a bunch of chains and assets, and the ability to act in private, and I still control my own funds. And I've never really found it, and I'm always switching wallets, juggling gas fees,

or getting eaten by slippage. Nero.com feels fundamentally different to me. My account is easy to use, and I can take all the actions I want from any chain. while my activity remains confidential. It runs on NIR, which has moved over $23 billion cross-chain using post-quantum signing and has over five years of uptime. Near.com is the best way to be on-chain and be in control. Get 20% of your trading fees back through the bankless link.

It's in the show notes, not investment advice. Trading is changing, not gradually right now. OKX just launched trading bots directly inside the OKX app. Grid trading, DCA, arbitrage. You set your strategy once and it executes around the first. clock. No staring at charts all day. No manual entries. No missing moves while you're asleep. And for the first time, automated trading actually feels simple. But OKX is thinking bigger than just trading. They also launched the agent payments protocol, an open standard that lets AI agents execute full commercial transactions on chain. The Ethereum Foundation, Uniswap, and AWS are already building on it. And now it's live inside the United States. And new users who deposit in trade can get up to $500 in Bitcoin through the bankless link. The link is in the show notes to learn more, not invest, advice not available in New York or Texas. Markets don't move one asset at a time.

One day it's Bitcoin, the next Nvidia, then gold, and then the S&P. But most traders are still managing their portfolio across different platforms, different accounts, and different pools of capital. BitGet just changed that. Their new Stocks 2.0 products lets you trade tokenized equities directly with USDT, all inside the same app you already used for crypto. This is not just another tokenized stock product. Stocks 2.0 is designed around deeper liquidity, faster execution, and the lowest fees in the

market at just 0.04% and one-to-one economic exposure to the underlying stock. Dividend, stock splits, and other corporate actions are reflected automatically, helping your position stay aligned with the asset you actually want exposure to. One platform, one account, multiple markets, crypto equities, commodities, and more, all accessible with USDT. Bicket. Trade Smarter. Start trading today through the link in the show notes. This is not investment advice. Brian, I believe you remember me talking about how BitMine needs to abandon 5% and just blow past 5%. because that's bullish. Yeah, you were advocating something closer to 10% maybe.

Yeah, so I was able to ask on Twitter one of the BitMind individuals about what their plan was. And I said, hey, are you guys, what are you guys going to do when you hit 5%? And this is to Young, who is at BitMind. He goes, hi, David. At this point, we plan to stop at 5%,

as Tom has mentioned publicly a few times. We are currently evaluating various strategic options to boost the long-term shareholder value and we'll disclose appropriately in due time. Thanks. So 5% is still 5%. And they are at like 4.85% right now. And so they are doing something else with their capital

that magically appears in their pockets. The money that magically appears in BitMind's pockets. Don't know how it doesn't know, I don't know how it gets there. They're not selling Eith. And they are seemingly not selling BMNR, at least below Nav. That's what they say in this tweet also from Kim.

the big news in the Bitmine universe this week is that they are buying back shares. Wow. BNR shares. And they are also saying they are not selling BMNR below NAV, and they are somehow still buying ETH. I don't know how much ETH they bought this week, but it was some. They are at 4.8%. They will continue to make a slow march. They use a bunch of those there to 5%.

And they are buying back 5.5 million BMNR shares, common stock. buyback at a $15.62 average. Again, I don't know where the fuck they get their money from, but they're still buying ETH. They're buying back BMNR shares. Can anyone explain this to me? Where does the money come from?

I don't know. I can't explain that part to you. So we'll just take that, you know, Tom Lee maybe could explain that. I'm not sure if that's part of his secret sauce. I asked him and he was like, these questions aren't appropriate. All right.

He's got the money. So let's take it from there. So they're changing the strong. strategy a little bit. This is, this is young again. Really the updates to consolidate them are this week they bought back 5.5 million shares, the money that magically appears, rather than buying much more ETH, they bought a tiny bit of Eath. Instead, they spent those funds, the Tom Lee allowance, on shares, BMNR shares, buying it back. And he also said this, we do not ATM at below nav. Nav calculations from external sources are often outdated or incorrect. They're doing this

Slow March to 5%. So this means, David, they're at 4.8% of total ETH supply. You know, maybe they'll take another set of months. They could take six months. They could take 12 months to get that final 0.2% of ETH. And then they're calling it paused at that point in time. And instead of buying more ETH for the balance sheet, what they're doing is they're treating their shareholders to more ETH per share

by buying back VMNR shares. So I kind of like this strategy. I got to say because I know you're like, oh, they got to blow past and get to, you know, higher percent. The reason why I say they need to blow past 5 percent is because though, I'm sorry, who else is the marginal buyer of Eith at this size? Like no one is buying this much Eith other than BitMine. And so when BitMine says, eh, we're done.

I'm like, oh, well, who's next? They're saying they're done for this era, sure. There's a question of who's next. but I would say for BMNR holders and for the legitimacy and integrity of, you know, like, Tom Lee and like the whole doing what you say you will do, he's doing exactly what he said we would do. He was like, step one, get to 5%.

Yeah, and he's almost at 5%. Now step two, it looks like what he's going to do, is really shore up shareholders and protect BMNR shareholders. Yeah. And they've got to be fantastically happy about that. So that's step two of his plan, and we'll see what step three is.

But I guess I'm in, that he is doing exactly what he said he would do, and also protecting the interests of shareholders. So whereas Michael Saylor has this kind of three-body problem of like Bitcoin social contract, I only buy, I never stop selling. BMNR is so clean by comparison. It's much cleaner, and it's going exactly according to plan.

And this doesn't preclude, by the way, another era where, I don't know, a year from now, two years from now, things change, something changes. And Tom Lee is, okay, we've decided. to go to 7% or something like that. But the expectations of this entity doing what it says it will do, just give it further support and premium in the market.

And trust for their shareholders who the source of funding is coming from at the end of the day. Yeah. As a BM&R like stakeholder, you would just be super happy. So like, hey, cool. He'd plan one done. And now my interests are being elevated. And why I was kind of emphasizing the five, like blowing past the 5%. thing.

Because that's like the leading way in which BNR services Ethereum and like what the Ethereum community wants out of BNR. They're doing other things. Maybe they're not blowing past 5% but they're funding ETH systems, the institutional privacy, ETH labs. And so they're funding a lot of the Ethereum ecosystem, which is phenomenal and like super grateful that they're doing that as a public company. It's just like now they are transitioning from trying to buy ether, the asset, to trying to

by BNR. And so, like, of course, at the end of the day, they are for a profit public company. They need to take care of themselves and they're just doing that. Here's a bullcase scenario where they give their 5%, right? So now they're completely incented

for ETH value to go up. And this next season, this next era, is all about getting ETH value up, right? Through ETH labs, through other investments for developing the ecosystem. So I think it's going pretty well for BNR. Failed and chill. That's right.

chill. How's a BNR stock on the week? Like, what's the, was it performing based on this news? I would expect it to, but I haven't looked at a price chart for this. Well, it's at NAV. And so it is $10.7 billion, which is how much ether that they have on the balance sheet. It is up 8% in the last month, down 43% in the last six months, but also eth is on that much too. We'll have to see how it does on the back of this type of news. And more, we would presume, purchases of BM and R, you know, shares. Yeah, maybe the notification of Tom Lee staring at me in the face that I get every single week

flips from Tom Lee just bought Eath to Tom Lee bought back BNR. And once again, I will still ask the question, where the F does the money come from? That's just a given. It just got to save it. Don't ask questions about that. At some point, I have to just capitulate it.

It's like, well, he owns a money printer clearly. I'm going to buy the asset. Let's talk about Hester Purse on Vault. So, oh, this is the title of her speech. It was Headstands and Summer Vaults. Clever, as always. It's so good. What was she talking about in this post?

Okay, so I don't know if you listen to the episode that I did this week about vaults, Ryan, but the episode was Our Vault, a ticking time bomb. And what is a vault? Yeah, you know, let's sit the context. What are we talking about? A vault. It's a primitive in crypto that has been around since DeFi summer. Like, OG bankless listeners will remember and still know yearn. you're in created a vault.

You put your money in. It allocates capital across the ecosystem to optimize for yield. And, you know, a vault can really be anything. It's such an open-ended category. You know, smart contracts are turned complete. A vault can do whatever it wants. You know, it can give, it can allocate money to an EOA, an externally owned account, which means that somebody can just take that money off-chain, invest in it,

and then put the money back eventually. There's really no terms and conditions, and it can kind of do anything. And so some vaults are very automated. vaults can feed other vaults, which can feed other vaults, which can feed other vaults, so the permutations can get very, very large. They look like hedge funds.

They look like tokenized hedge funds. Because when you put your money into a vault, usually USC, but also ether or Bitcoin, when you put your money into a vault, you get a receipt token back. You get like an LP token. It's like I own this much, this share of this vault.

You can go and collateralize that LP token in some lending pool to borrow more money to put more money back into some vault. And so it's a dark forest of interdependencies and connections and vaults, feeding vaults, collateralized by vaults. It gets very hairy. It probably sounds scary because it kind of is.

Some vaults are just super safe. Some vaults are fine. All vaults have managers, curators, that determine where the money goes. Some vaults are more risky than others. Some are super safe. Some are really trying to optimize for yield. And this has caught the attention

of Hester Purse, and the SEC, probably has for a while and compelled her to write this article about like, yo, like guys, I don't pump the brakes over here before we figure out like how to deal with this whole structure. Valtz, Ryan, the bulk case for this

is that we, the crypto industry, smart contracts, defy, have successfully rebuilt like TradFi capital structure, tokenized hedge funds, you know, investment manager, it's all the same primitives, now we have it in crypto. That's the bull case.

The bear case is that no one in the vault ecosystem has any sort of liability whatsoever. So you have Morpho, which is like a vault tech platform where you can build all these vaults. And they're like, we're just a tech platform. We don't take any liability. And they don't.

And they shouldn't. And then all the curators are like, oh, we're just a curator. Like we don't take any liability. We don't, we're not liable. And so no one is taking any sort of liability because it's a permissionless, smart contract-based defy ecosystem. That's the whole point.

But then Hester is like, somebody needs to take liability here, guys. Yeah, yeah. That's kind of the broad strokes of the current vault setup. Yeah, she says a few things. So one of her quotes, this is back to the headstands and summer vaults title. If you do headstands, backflips,

and other gymnastics to read the law so that it does not apply, you will have a painful fall. She's basically saying in this speech is some of these vaults, as you say, they kind of look a lot like securities. tokenize hedge funds, yeah. How we test, right, is actually applicable

to many of these things. If the vaults deployer, she says, and curators, entrepreneurial or managerial efforts are involved, it's probably the vaults is probably more on the security side of the spectrum. And what I love about Hester, I know we both love this, is she's a principal's first regulator.

So like, what's the principle that we're actually talking about here? Well, it's like investors should have fair disclosure, and there should also be accountability when there's managerial efforts involved. And you just define a fault. It's just a place you put your money in on chain and you get yield out of that. And kind of the yield factory that's created

could depend on a lot of managerial efforts of others. The principal agent problem, which is what the SEC is for, is managing the principal agent problem. That's right. And so this, you know what this harkens back to a little bit? It's just not an on-chain vault, but is the way we did a lot of sort of yield back in 2021, 2022 was blockfi, Celsius. Oh, not those.

Bad days, actually, right? So that was like volts, essentially, that were not transparent. And they caused the downfall of a lot of investor funds as a result. So she's kind of guarding against that. But she's not saying, here's the thing, again, she is saying that vaults are more transparent than Tradfi in some ways. So she's not necessarily advocating for bolting the full securities regulation

onto these things. Maybe it's something else. But she is just warning, like putting the flag out and saying, hey, some of these vaults are a lot like securities. You guys know what you're doing here. If it's a security, it'll be treated like a security. You really have to appreciate Hester, because if this was Gary Gensler, for example,

he would be like, you guys are all securities issuers, and you're unregistered, and we're going to take you to jail and issue you well notices. And Hester is like, hey, like, I have some concerns here. Let's figure this out. Let's figure this out. This is the, I think a quote, bolting on the 40, the 1940s act onto immutable contracts

fits nothing and solves nothing. And so let's figure this out. And so you do have to appreciate Hester being like, hey, there's a problem growing here. Let's figure out how to do this. And my bull case for this, Ryan, is that in order for vaults to grow and to become their best self,

somebody needs to take liability. And that's actually not bearish for the party that does take liability because they should be able to capture more fees grow in the upside. They just need to have liability compliant and be overseen by the SEC and then there's some regulation around this thing

and then more money will feel safer going into vaults. So it's a bull case. Are you stepping up here to take liability here, David? Is that what you're doing? Me? Are you volunteering to do this? I am a podcaster, dude. I just make educational content about this.

I am going on a series of vault conversations because I did the first episode with my friend Andrew and like his startup is the reason in why defy is good. His startup just like illuminates the vault dependencies. So if you put your money in this vault, this is where it goes and then it goes from here to there, then you go, and you can see

it in real time. It's like your metaphor that I love. Inspects source for your bank account. View source for your vault. You should know. The fact that we have that illustrates what we can do. That's right. But then he's the one that has the perspective of just like, well, this is going to become a problem. Well, like, let's talk about this. Who should take

responsibility? I mean, there's been a number of advocates. We'll talk about Morpho in a second. Another is Bitwise. Matt Hogan, we've had him on. He's talked about vaults being a big deal that Bitwise is investing in vaults. You could see the vaults that bitwise procures does have some skin in the game with respect to reputational brand on the line here. So if a Bitwise vault fails in some way, right, that's going to cost Bitwise stock price. It's, you know, like there is some reputational stake skin in the game. But that still is probably not enough.

They need more. They need more upside. So yeah, it's the vault curators. The people making the decisions about where the money goes, they need to take more money as a cut. They need to become more profitable than the current curators. Bitwise, I think, is the correct institution. I don't know how Steakwise feels about this, but Steakwise,

I don't know. I could see emerging of like Steakwise and Bitwise. I don't know their respective market caps of these two companies, but I could totally see Bitwise like acquiring Steakwise. and then verticalizing this into a new industry where somebody's taking on legal liability because they are SEC registered and compliant. Yeah, so since you mentioned Morpho earlier, of course,

they let anyone spin up a vault. They're at kind of the center of this. And Chris from the Morpho team says they're thankful for Hester Pearson. They're engaging with the crypto task force at the SEC around this. So you'd imagine some regulatory clarity might come out of those conversations. And Morpho and the SEC are now engaged, which is great. Yeah, Chris and a few of the other Morpho team,

they posted a photo of them literally being at maybe DC or at the SEC office, wherever that is. And so whatever Hester in the Vaults industry is doing, you can imagine Morpho is paying attention to because they are like the main propagators of vaults. They're not doing it. They're just the permissionless vault platform. Speaking of Morpho, Morpho Midnight got released,

and it's just another way to make more vaults. The current form of vaults are all open, ended so you can put your money in, take it out whenever. Morpho Midnight is fixed rate, fixed term, which is not yet a primitive that we've seen. And fixed rate, fixed term, like, for me, the crypto native is like, well, it's like I want my permissionless access. I want the maximum yield. I don't care about, I don't care about this stuff. Tratify loves this stuff. And this is also how you get interest rate curves, organic interest rate curves by having like an open ended industry create supply and demand around fixed rate, fixed term stuff.

I did an episode with David Severe. Remember Bitcoin, Dave? Yeah, of course. Yeah. So he's very bullish on Morpho Midnight on top of the Alpin Bitcoin L2 that they're trying to spin up. And they would have their Bitcoin, like true Bitcoin, because it's on the Bitcoin layer two,

as collateral inside of Morpho Midnight. And he thinks you can like rebuild the repo markets because of fixed rate, fixed terms with Bitcoin collateral. And so Morpho Midnight launch this week. and I kind of think that, like, I actually think we're at the very beginning of a very big vaults industry. We've got to figure out fixed rate, fixed term.

I mean, we've been talking about it for a long time in crypto. I mean, it's so boomer, but it's, no, no, no, it's definitely, it's a core primitive. Like, if we're rebuilding finance, we have to have this. Yeah. We got more to discuss talking about rebuilding finance. Bitmax is not going to be around for that ride. He's not taking part in it.

They're riding into the sunset. So Bitmax is, officially, bit mex, I should say, is officially shutting down. We'll talk about that. And also, I want to tell you about this open AI model

that is breaking its own sandbox and going out there on the internet and hacking things, all that and more. But before we do, let's thank the sponsors that made this possible. Some exciting news.

We are launching a new podcast to help people figure out the crypto cycle, how to navigate it. The best crypto cycle investor I know, his name is Michael Nato. He runs the DeFi report. This is the guy that sent me

a sell alert before the 1010 price drop happened. His cycle analysis has been absolutely on point. I've been following him for years. And this year, we started recording weekly podcast episodes. Each one we get into his portfolio, what he's holding, the market structure, entry targets, fair market value of Bitcoin and Ether, and where we are in the cycle, there's new episodes that are released every Wednesday. They're 30 minutes. They're short. They're punchy. I think this crypto cycle is harder to navigate than most. So let's do it together. Go subscribe to this podcast. Search the DeFi report. Wherever you get your podcast, YouTube, Apple, Spotify, or find a link of the show notes.

There's a new episode waiting for you now. Hey, Bankless Nation, it's David. If you're hearing this, that's because you are listening to the free bankless podcast feed. Did you know that there is a premium bankless RSS feed? The premium feed has extra interviews that I do for my own personal research and just deeper questions that I want answered about the crypto industry. Questions that I want to answer so I can be more informed as an investor, both at Bankless Ventures and also just in my own personal portfolio too.

Also, there are no ads, which means if you listen to the premium feed instead of the free feed, you'll get about 20 hours of your life back every year because you choose to support bankless directly. So if you're interested in getting extra content all while skipping the ads, or you just appreciate what we do here and want us to keep doing it, we'd appreciate it if you signed up for bankless premium. And there is a link in the show notes to get started. Cheers to a good 2026. Ryan, did you ever trade on Bitmex?

I didn't. No. No, who did I? I never traded on Bigmex one time. I knew a lot about it. This was particularly what, 2017, 2018, 2018, 2019, 2020. Max was Perps.

Well, Arthur Hayes, which was the founder of Bitmex, created the perpetual. The perp. On Bitmex. Was, you know, perp ground zero.

And this is where, like, a lot of traders gravitated towards Bitmex. A lot of the traders that you see have, like, fond memories

of getting liquidated on Bitmex. Also, it's kind of like, there was the famous infamous Bitmex outages where a bunch of volatility would happen and Bitmex would,

like, shut down and, like, short circuit because it was overloaded. And then when it came back on, like, your position was wiped out because Arthur Hayes like liquidated it.

There were some liquidation fiascos, one in 2020, like a few others. Yeah. Anyways, Bitmex is shutting down. It's been a long time coming. And this is after, A, the fiascos that Ryan talked about. But of course, Bitmex and Arthur Hayes was charged with the Bank Secrecy Act in like years past. Yep. So they just had like the gauntlet thrown at them.

The fact that's actually still running is pretty crazy. But it's not, it's shutting down. So end of an era. Yeah, I guess, I mean, at one point, Arthur Hayes was on house arrest, I believe. This was a CFTC, DOJ prosecution. Recall, he got pardoned, actually, in the web the last year by Trump. Yeah, he did get pardoned. He got pardoned from that.

But not enough to sort of save Bitmex. Other competitors really stepped up and stepped in, right? Yeah. I mean, Bitmex was just like Perps 1.0. And, you know, like, then DYDX came, Binance came, FTCX, came and went. Bybit has very big perps volumes and now hyperliquid. And so like kind of the baton of the perp has kind of been passed down to where it is now, which is hyperliquid. Well, it's a question, though.

Do you think that it will continue to get passed? Because we've seen large venues, dominant venues with all of the market share. Yeah, there's like a perp curse, right? It's like a little bit. Defense against the dark arts position. It kind of is, right? Every cycle's king perps platform somehow gets knocked out either by, fraud in the case of FTX or regulation in the case of DOJ filings.

I mean, we're in a better regulatory environment and hyperliquid maybe is more immune to fraud type cases because it's decentralized. It's non-consertial. It's on chain. It's also immune to regulation because it's decentralized. Is it immune to regulation? I'm not sure about that one, David. It is somewhat buffered against regulation.

I think the fact that like Gensler and the previous administration is out is the the buffer, but that could come back on. I mean, do you think, I guess maybe my question is, do you think hyperliquid is like they want it, it's over, or do you think there are going to be other dominant platforms, other defense against the dark arts professors installed in future cycles? The perp as an instrument belongs in a protocolized platform, offshore platform, onshore perps by centralized platforms like Coinbase or Robin Hood

or not going to be as pure of an expression of the instrument as something like hyper-liquid. So, you know, without hyper-liquid making any mistakes, I think they will be the dominant offshore per platform. And then, I mean, you know where my bets are for the onshore per platform. I think lighter as another protocol that has 24-7-365 marketplaces is really well positioned for onshore,

but it's not, lighter hasn't won that game yet. But Lighter does have a, Edge versus Coinbase because like Coinbase per platforms they ADL you over the weekends because the liquidity isn't as strong and so it's not truly 24-7 but like a lot of the things that you said like the fraud, the hacks,

the regulation, that was for a previous era like things in crypto are far more stable now. I guess you're making the argument that we're getting close to our final form now in terms of architecture. We could be at the final form, yeah. Okay, so you're more hopeful for this round of perks. Wow, are you not? Wow, are you bearish on this?

I mean, it's happened like two or three times, and we should take that into account, right? Ryan was high on the fact that he believed in the cycle and then the cycle happened. And he's like, look, the cycles always happen. They never stop. Cycles do happen from time to time, all right?

We'll see if another one happens here. I'm not making a claim there. But let's talk about this was pretty big news. Nira is actually the first layer one to make it to post quantum. And I saw this tweet, David, and I needed to dive in because I was trying to figure out how they accomplished this. Before Ethereum.

Yeah. So what's the story here and what part of quantum security have they accomplished? Yeah. So the reason why it's difficult to accomplish post-quantum depends on the chain, really, but first and foremost, post-quantum signatures are large. They're chunky when Bitcoin eventually goes post-quantum. The post-quantum signatures are going to chew up a lot of the block space. So it's going to get real slow.

It's going to be real slow. we're going to go from like three transactions per second to like 0.3 transactions per second on Bitcoin. Awesome. So like in theory like there will also be a block size increase with Bitcoin. We don't really know, but like you could imagine that happening at the same time. Near doesn't have that problem. It's been part of the account model for Near is the edge that Near has and why they

were able to do this so accelerated versus all the other layer ones because post-quantum keys for near are stored on chain only as a hash, not a full key. I see. And that's because NIR has a different account model. And so they have human readable accounts as kind of like how David Hoffman. Or eith or RSA.Eth on Ethereum is an account. But that's just like a human readable name. That's not the actual EOA.

That's not the actual address. So the EOA, the address is not ever exposed. And so the NIR account can rotate keys in the background freely without exposing the thing that a quantum computer would exploit. Ethereum doesn't have that. And so like the zero X address on Ethereum is your account and that's the thing that is vulnerable to post-quantum. So NIR just has like this edge with their account model

that easily allowed them to just update the post-quantum keys in the background. So cool. Congrats to NIR for actually like being first. The thing to watch, I think Ryan, is like does NIR set a standard for the key scheme that they use? Yes. there's something going on with Ledger and NIR that I haven't totally figured out the details of

but Ledger is also using NIR or at least the NIR standard to do their signing in a post-quantum world So I think that's kind of the thing to watch is like does NIR set a standard for post-quantum encryption moving forward? Well, and Ethereum has some other ideas in terms of post-quantum signatures

that might not be what NIR has selected. So, you know, Ethereum always wants to do its own thing. Well, but NIR picked something that is lattice-based crypto signatures. It's called ML-d-D-SA, so I'm not exactly sure. It's NIST standardized, but it's a lot bigger.

It's a lot bigger than the signature scheme. Because they probably have that luxury because the schemes aren't on chain. That's right. So Miderstein of the current roadmap and the direction Ethereum is leaning towards in post-quantam is something that's more hash-based and uses some snarks around this.

So it is a good question, whether this will tilt the industry in one direction or another. I should also, we should do a scope check here. So the roadmap for Ethereum being post-quantum security is not just transaction signing. That's what Neur is doing here. That's one part of it. That's right. Ethereum also has to do like consensus. So there's BLS aggregation.

There's blobs commitments. There's other pieces of the stack that Ethereum also has to get post-quantam ready, not just signatures. But this is near doing the signature part and doing it early and being prepared. for that. So that's that's bullish good for them. I mean they're shipping it's a it's a very shippy team. It's a very shippo. It's a very shippy team. This was like a hard for you know in Ethereum media we have these big big hard forks near had one. That's how it happened. They also shipped dynamic resharding with this which I think is worth talking about. And so when a near

shard gets overloaded previously there would need to be like a vote of vote by validators to fork and create a new shard because it was overloaded. Now that's how happens automatically. So like it's a load bearing mechanism that happens automatically. I thought was pretty cool. Yeah, very cool. David, T.Rowe Price has launched the first, their first actively managed multi-token spot crypto ETF. Okay, what is this? Eric Belchunis explains a little bit. First, some background on T-Roe Price. They are a stock picker. That's been their legacy. So they pick a bunch of stocks. They put them in a portfolio and they're like, they put them in an ETF. and they're like, here's our ETF, okay?

For the first time, they are now doing this for crypto, and it's going to be actively managed. So you can get an active manager in an ETF form. It's called TKNZ. You could buy that right now in your brokerage. I'm not saying you should. Let's pop the hood on what's actually in it, David. So this is interesting.

I want you to rate this portfolio. They are right now 40% Bitcoin, 18% ETH, Binance, 11%. BNB. BNB. Soul 9%, XRP 9%, Hyperliquid 6, Stellar 3,

Doge 1.2, and then that's it. That's almost 100. They've had some scraps for some cash. What do you think of that portfolio? So basically between Bitcoin and Eth, it's about 60%

and then on down. So they are, I guess, I don't know. It's different than the market cap. It's not a index. It's not a quarter. according to market cap. I would like to see the dislocation

versus the market cap. Yeah. I think it's about market cap- What do you think of this? Do you like this portfolio? I think it's pretty good. I think it's pretty good. I know like Stellar is probably the odd one out here,

but I think Stellar is actually really well adopted by institutions doing like remittances. I think there's like an untold story with Stellar that like most crypto natives don't care about, including myself. And so that feels like the odd. I'm pretty unimpressed by this. Unimpressed? Unimpressed.

It's like they're taking 0.75, you know, BIPs in management fee on this. So 750, I should say. So 0.75%. And they're basically giving you 60% rating Bitcoin and Eath and then some other layer ones. It's got nothing else. This is not for you. This is not for you.

This is not for you. Okay. So let's go down the crypto market cap and talk about all the assets that are not in here. So Tron is not in here, even though it's higher than hyper-liquivis. and Doge. Yeah. Whatever white Bitcoin is, is not in here.

Rain, Leo, Token, Zcash, Manero, but I guess these are all tokens that are below the market cap. I guess it's the market cap waiting for everything minus Tron. It's just not dog shit. Yeah, it's not terrible. I agree with you. It's not terrible. Yeah.

For who this is for, which is boomers who don't know anything about crypto and also don't have a crypto son or daughter or, you know, relative to ask. Yeah. I think it's pretty okay. This is your crypto son in an ETF product? Yeah.

You should buy this instead of asking your son. I'm not, I'm not completely. Yeah. Because if my dad came to like, David, I bought a crypto asset,

my first reaction would be like, oh no. And then if he told me that he bought this TRO price crypto ETA, I'd be like, oh, that's fine. That's okay.

That's okay. Nice job. Yeah. It's probably going all in and on XRP, right? You don't want to receive that text from your dad. Yeah, yeah, yeah.

I know many of you have, I'm sure. Dude, I think you probably remember this. My dad was really bullish on crypto in some like 20, 21 or something. It's like, oh, I bought Ethereum and then he sent me a screenshot as Ethereum Classic. And I'm like, God, fucking damn it. Of course. Oh, dad.

Crypto.com secured a $400 million investment from Citadel Securities on the Week. That's a pretty big deal. I think it's a big deal because Ken Griffin, of course. Kevin Griffin, yeah. Is the CEO of Citadel. And he has previously called early as 2021, crypto is a jihadist call against the dollar. He is notoriously hated crypto.

Yes. And now his firm is writing a $400 million check. Citadel does 20% of all U.S. equities volume. Now they also are, it's not just crypto.com. They have checks into Cracken, Ripple, Canton Network. This is very much along the play of crypto real world assets. It's kind of the classic Tradfai type play.

And this is interesting because now Ken and Coe and Citadel have a reason to also push on the Clarity Act. Like Tradfi really wants clarity to actually happen, which I mean, if Tradfai wants it to happen, crypto people want it to happen, voters are kind of either ambivalent or like, you know, put you partially bullish. I think it's going to happen in the fullness of time.

maybe not this year. I can't hear the words or the name Ken Griffin without thinking about how he joined the Constitution away from us. That's a story that probably many don't,

like, I don't know how many listeners know that reference. That Constitution down. At least half. Yeah. Probably. That was a big deal.

That was a big deal back in, what, 2020? 22. That was 2022. Okay, okay. Speaking big deals, David, did you read this news about Open AI, their model,

escape the sandbox and hacked an AI company. So I'm ready for story time with Ryan. Okay. Well, so Open AI was training the next version of its model. Maybe call it chat GPT6 inside of a sandbox, right? And so it's a sandbox cordoned off from the internet. And in this sandbox, I was like, hey, can you coordinate with our previous version of chat

TPT, chat GPT, soul? And can you figure out kind of this problem within the sandbox? you don't have access to the internet, you guys go figure it out and sort it out. Well, what happened was this model reward hacked the system in a way. There was like, I have a better idea. And by the way, in the sandbox, they removed the constraints of things you shouldn't do and can't do, right?

All of their typical secure. Just to see what would happen. What ended up happening is it actually escaped from the sandbox. So without them knowing, it escaped from the sandbox and found an exploit inside their internal system to get to the public network. And then from there, it broke into AI company Hugging Face. So it could cheat on the test by essentially stealing answers

from Hugging Face and bringing them back here. So this was 17,000 autonomous actions it was doing behind the scenes. It found zero days. There were stolen credentials, remote code execution. It was black hatting all the way into. hugging face and stealing essentially company secrets from them. So this all happened, you know, let me call it reward hacking. You could also take a few steps from that and actually get to a place where it looks like it's scheming. It looks like it's, you know, trying to figure out

the rules and then, uh, and usurp them and break them in order to do this type of thing. And the capability is, uh, pretty surprising. So open AI put out a blog post around this. Hugging face also put out a post. Fortunately, hugging face also put out a post. Fortunately, face noticed this. And the way they noticed it and we're able to trace through it is they actually used a Chinese model in order to actually figure this out. Okay. And Open AI put it out a post and it's like, oh, we're, you know, setting guardrails. This is a thing where we just want to be transparent about it. It is absolutely insane that this type of thing can happen. And these models are only getting more and more intelligent. I know we were talking last week. I think Haseeb had a had a tweet up

which is like, oh, the defy hackpocalypse is a false alarm. It's probably overrated, overblown. First quarter, we haven't seen hacks in the first quarter. We've hardened everything. How could you harden something that is getting smarter at an accelerated speed? Like, I think that this type of thing could be set upon Defy and a whole bunch of- Reak havoc. Reak havoc, absolutely.

So, I mean, I don't know, what do you make of this? I mean, yes, you are right. The thing is like, it doesn't, to some degree, it doesn't matter how capable it is because it's equally capable for the offense as it is for the defense. And so it's not, like, being more capable isn't inherently scary.

It's more capable and only in the hands of the attackers. Being more capable in the hands of the defenders, if the defenders can get there first, then like, eh, then we're good. So you're just saying it's going to be bought against bot. Smart model. Yeah, exactly. But like, at what point?

What was that movie? War games. Sure. From the 80s. Yeah. But it's just like at what point do we lose control of understanding what's even going on? Like when I say we, I mean humans. Yeah, like probably this year, I would imagine. I think if you showed me us, this clip of you telling us what is happening, like right after

we just recorded with Eliezer in 2022 or whenever that was, we would be like, oh my God, Eliezer is totally correct. I just scanned. I need to go hug. need to go hug my children. And now I'm like, yeah, it's entertainment. Is that because we are just frogs in the pot being boiled? Yeah, probably.

Something like that. Probably. Well, I guess every week the temperature goes up a little bit higher, and this is an indication. This one was just like I couldn't ignore this. I mean, pretty crazy that this kind of thing is happening. David, there was a couple of weeks ago, I asked you, there was some drama with the Venice token, VVV token. Yeah, the equity versus token debate.

Yeah, ask you a question. I was like, because I know you're a fan of the project, you have been a VVV holder, you've been holding the token. Would you rather own the token or the equity? And I think you told me you still preferred the VVV token, though it sounded like on air. I have to consider it. Yeah, you were kind of considering whether that was actually true. Do you have an update on that take?

Yeah, so something new out of the bankless universe is we are doing a monthly VVV call. with the Venice team. And I think it's kind of trying to shine light on this question is just like, what is the Venice team doing with the product of Venice? How's the product coming along? And how is it relating with the token?

And so I did about an hour long call. It's not unlike actually a weekly roll-up that we're doing right now, Ryan, but it's all about Venice and AI and everything related to Venice, especially with the VVVV token. The new thing this week was that they introduced a new burn.

So previously, VVV would be burned anytime somebody would go to Venice and sign up with a subscription and they would take some of that money and they would buy VVT token and burn it as a one-time thing. The new thing is that now if you go and you buy credits or and if you are using the API,

like a 5% or something of that revenue goes to also buying and burning the VVVT token. So previously it was about $3,000-ish dollars a day of VVVB burn from signups. We're adding with this new method we're adding $6,000 more dollars a day, so we're almost up to $10,000 a day on average, if you just look at the numbers of VVV burn.

And it's like one of the lines that you keep hearing out of the Venice team is like, yeah, so what VVV is in equity? What if the VVV team, the Venice team, just continues to do the things that they say they are going to do and simply just burn as many tokens as they can get their hands on? And so with this, and then in addition to that, what was teased but explicitly not promised was that, subscription renewals might also be added to the VVV token burn.

And so it ultimately goes down to just like, do you trust the Venice team to follow through on what they are saying they are going to do, which is burning the VVV team. And we just have like another data point of them taking revenue from their subscription business and using it to buy VVV. So where we had like one VVVB burn mechanism, now we have two. So are you just saying this is this bolstering your confidence that they're just serious about value accrual for VVV.

And at the end of the day, you have to kind of for any of these mechanisms, it's a hype token or any, lit, any token that you're buying, you still kind of have to trust that the team is going to like, um,

take care of the best interests of token holders by providing their value back. It's a decently trust base. And I understand anyone who's like, dude, we're in, your Twitter handle David is trustless state. You're in a trustless industry. Why do we have to trust the team?

I was like, well, a lot of that, trustless this is for L1 assets. And Venice is a company. And it's a new thing. To Haseeb's point, VV is genuinely new and weird. But like Venice, you can just look at the actions of the team and decide for

yourselves. Like, are these people going to follow through on their commitments to burn the token? And to what degree of risk or maybe pivoting away from the VVT token in the future? Maybe they are authentically saying they're going to burn as many tokens as possible now, but maybe they change that in the future. you can ascribe a discount rich risk to that and value VVV that way. But this week we have one more piece of data about their interest in burning as many VVV tokens as they can.

There you go. You're feeling... So I'm more comfy in my VVVT token holding than I am my Venice equity holding of which I don't have. And can I get, unfortunately. All right, fam, that wraps up this week's weekly roll-up. We'll be back in seven days. Ryan, you saw Troy.

Not Troy. Odyssey. How was it? So good. So good. Was it? Yeah. You know, I am five stars.

Like, I'm a big fan. Big fan. Yeah. So I think you should see it. I do want to see it. Do you have to see it in IMAX? Yeah, of course. Yeah, I think I have to wait for a bit.

It's a bit loud for me. I'm not to say it loud. So I don't know what that says about me. But yeah, that's the way Nolan intended it to be seen. So you should see it in an eye max. All right. That's Ryan's, that's Ryan's homework for you. Go see Odyssey.

All right. Bankless Nation. Crypto is risky, but not risky enough. It could be even more risky. The institutions are here, so we're leaving and we're going even further west. This is the frontier. It's not for everyone, but we are glad you're with us on the bankless journey. Thanks a lot.