Bankless - ROLLUP: $EIGEN Token Launch | CZ Going to Jail | Stripe Crypto Support | Market Bottom In?

Starting point is 00:00:03 Bankless Nation, it is the first week of May, and it is time for the Bankless Weekly Rollup. David, where should we start this week, huh? Eigenlayer releases their token and everyone's mad. What happened? How did that happen? I thought everyone was stoked about the eigenlayer Air drop. After that, CZ gets sentenced to jail, and you won't believe for how many months he is going to jail for. Wow.

Starting point is 00:00:24 Yeah, there's a specific number that is very related to CZ. After this, Stripe broke up with crypto in 2022, but now it wants to get. back together. We also have got some updates on the war on crypto. David, it feels like a full frontal assault these days. We got to go through what's happening in that, in that war, all the battles that we're facing right now. And some market commentary, because markets are down these days. April was a bad month. Yeah. So we got to figure out, is this the end of the bull run? Or is there, like, is there some reason for this? So let's consult the oracle's and figure that out. When up? Yeah. Also, a salon season. Is it over? Is it coming back? Hey, before we get in, though,

Starting point is 00:01:02 I noticed, you know, bankless listeners that are looking at this on video may have noticed your left eye. No, it's your right eye. It looks a little bruised. It looks a little damaged. Yeah. Yeah. So you sent me a picture. I think this was on Friday, last Friday.

Starting point is 00:01:19 It was Thursday evening. Thursday evening. I knew it was after we recorded the roll-up. It was right after the roll-up. This should be like a viewer discretion is advised type segment. So, I mean, like maybe we should censor some of this out because, dude, that is great. gruesome. What happened to you? Yeah, so like right after the weekly roll up last week, I went straight to Muay Thai sparring. And on Thursdays is like the intense sparring. Tuesdays is technical easy sparring.

Starting point is 00:01:44 Thursdays is intense sparring. And I went up against this guy who's like 230 Samoan guy who was like a whole head taller than me. And like usually when you you suss out your sparring partner, you kind of get a vibe for how good they are and how intense you want to go. This guy did not do that. He just kicked me straight in the face. This was a kick to the face. How many seconds? into your spar did this kick to the face happened so so you do like three rounds of sparring and he kicks me like he like kicks me a bunch of times and I

Starting point is 00:02:09 a bunch of times I had to like stop and be just like collect myself and he like gave me some room but then like when we went back at it he was like just started kicking me again and then like the third time he kicked me I was like oh my god like I can either ask this guy to like calm down or I can just like take this and like learn to get beat up

Starting point is 00:02:25 I chose the latter and then he kicks me in the face and I like had a two inch gash, one inch gash, like right above my eye. All right. So, so what's protocol for it? So I have not actually got in a fight in my adult years. Like, it's been a long time since I've actually, like, since I've been in a fight, you

Starting point is 00:02:44 know, in the ring or anywhere else. So what's the protocol for this? Does somebody just, oh, I'm sorry. Like, do they apologize once they kick you in the face and cause you to bleed? Well, so like, we started like sparring again. And then he was like, oh, your eyeball. And I'm like, what do you mean my eyeball? And then I went to the bathroom to like go.

Starting point is 00:03:02 because like, you know, I get nosebleeds a lot of times, but that's totally normal. But then I go back and I see just like an open, like, flap of skin above my eye. I'm like, hmm, I think that's bad. And so then I went to talk to the people at like the front, the front of the whole like office, the front of the gym. And they were like, you should just glue it.

Starting point is 00:03:19 And I'm like, I'm going to get a second opinion on that. I'm going to go to the hospital and get some stitches. Wow. So nonchalant, just glue it, huh? Yeah. Okay, so the reason we're doing this at the top of the segment, I imagine is to put, fear in the heart of Nick Carter.

Starting point is 00:03:33 Nick Carter, that's right. Because we are less than 30 days out to the fight, all right? Is Nick Carter getting four stitches from big Samoan guy? I don't think so. What's the polymarket? What's the polymarket say? Polymarket's actually pretty even. Really?

Starting point is 00:03:46 Okay. Because I'm surprised. I would have expected the picture that you posted of yourself, like, bleeding from your eyeball, getting like stitches. I would have expected the markets. A rational market would have swung in your direction because that's hardcore. The current polymarket odds are 45% Nick, 47% me, and the 9% draw. So that's actually pretty even.

Starting point is 00:04:08 I actually know that there are two funds out there, either VC funds, liquid funds, whatever. Two actual real funds in crypto with liquid capital deployed into the polymarket between me and Nick Carter. Wait, there's... VCs are bidding on this? Yeah. There's only $68,000 in the market in total. So it's definitely just like not like petty chases. change but yeah well i just i just want to announce i know you're going to be busy uh so we're going to do

Starting point is 00:04:35 a bankless viewing party yeah on this yeah so i don't know if i am uh worthy to be an announcer on on this like i feel like i need someone who knows kick boxing or else it'll be a very dry like dry analysis oh david got punched oh like nick looks tired some kicks anyway stay tuned for that bankless nation for uh you know what's going to be the most hype event in crypto of this year. The biggest fight of all time. David, our friends over at Transporter got something to say. What's up with Transporter?

Starting point is 00:05:11 Transporter, a brand new bridging app on the scene to bridge between all the layer two's inside of the Ethereum ecosystem. And Transporter, super intuitive U.X. It uses Chain Links CCIP bridge in the background. And you can bridge ETHLink, USC, another asset between all of the locations that you can see on Transporter. dot i.o there is a link in the show notes to use the new transporter bridging app david can you do the history channel thing last time you did this blitz you did this you did the thing when you described

Starting point is 00:05:40 transporter bridging that was awesome actually had no idea that some for the listener somebody caught me in a frame doing the history meme aliens thing that's perfect uh that's my new mead template let's talk about prices bitcoin bitcoin 64000 is where we started down 7.7% 59000 is where we are ending. Ether doing something similar. 3150 at the start, down 5.2%. 2990. This month, or last month, the month of April, was the first monthly red candle since September of 2023, which is kind of an insane streak.

Starting point is 00:06:14 We had seven green monthly candles in a row from September up until March. And then finally, April broke that combo with the first red candle, monthly red candle, down 15% in April. Okay. Do you know the nerve of some people? are calling for under 50K Bitcoin at this point. Oh, down another $10,000? Yeah.

Starting point is 00:06:35 There's serious calls for this. Do you have any reason why? Like, what do you think is going on here? Well, first, seven green candles in a row is insane. And so just like at some point, the party has a sob. Okay. We also got jitters from like geopolitical tensions in the Middle East, but also like inflows into the Bitcoin ETFs have also slowed off, slowed down.

Starting point is 00:06:57 James Safer, he tweeted out this that I bit the BlackRock Bitcoin ETF had its first day ever of net outflows. So the Bitcoin ETF, BlackRock's Bitcoin ETF lost $36.9 million, which is like overall like pennies in the grand scheme of things,

Starting point is 00:07:14 but it had literally had a 100% track record of only inflows. But like in final equilibrium, ETFs have both inflows and outflows. And so like it generally like, you know, balance out. This is the first day we've had an outflow since only having inflows into the Black Rock ETF. So if I'm reading the Cracken charts, right? And by the way, thanks to Cracken for sponsoring this entire segment. We are back to February prices for March and Ethereum,

Starting point is 00:07:43 which doesn't sound bad when you say it like this. Are you ready for another explanation of like why down, David? Tell me. Okay. So here's a seasonality explanation. And it goes like this. This is apparently something they say in Tradfai, okay? Sell in May. and go away. I've heard this, yeah. People like to take their summers off. I suppose investors do. And so that's what happens in Tradfai markets, I guess, you know, like traditionally.

Starting point is 00:08:07 Markets are down during May, June, July, August, you know, the summer months. And then we come back. We come back, like, toward the fall. If you map the same principle to crypto, actually, look at this. Buying Bitcoin in October and selling in April had a 1,500 percent cumulative return. That's over the past five years. However, if you buy a. May and you sell in September, you are down 29%.

Starting point is 00:08:31 It looks like crypto likes to take the summer off. Look at this chart, man. This is, you know, if you just skip the summer and you sell in May, the nice green line here. And the other is if you're buying in April and, you know, like, you just kind of like... So it's aggregating seasons across years. That seems weird. That doesn't...

Starting point is 00:08:55 I'm not sure how I feel about it. that, but I'm not going to argue with the data. I mean, how can you argue with the data? I mean, like, do you take it easier during the summer in crypto? Do you have like, you know? No, bro, I am always on. You're always on? Well, then for you, for you, it's a fantastic buying opportunity, I suppose, in the summer. But what this could mean, if we're in the sell in May regime, then it means that prices won't bounce back immediately. We've got to get through kind of a slumpy summer. And you're, you're right about those Bitcoin ETFs, like just to put an aggregated perspective on this, there's been a steady outflow of

Starting point is 00:09:27 ETFs in the U.S. The past five days have seen net outflows. Net outflows of 632 million. So it's not just Black Rocks ETF. It's all of them that are bleeding. But I guess you'd expect this, right? We built a pipe. So that means capital can come in faster. It's a big pipe. And it did. And it did.

Starting point is 00:09:45 And they can also leave faster when people are selling in May. That's a good point. You can also leave faster. I never really thought about that. Yeah, the leaving part is new for us, I guess. I mean, we've been used to up only. David, how about the total crypto market cap? Total crypto market cap 2.32 trillion dollars slightly down on the week.

Starting point is 00:10:05 Also in ETF land, Bitcoin and ETH, ETFs launched in Hong Kong. The first day of trading volume had a whopping $12 million of spot, eth, and ETH volume. If that number seems low, it's because it is the average Bitcoin spot volume alone in the United States is $4.6 billion. For one day? For one day, yeah. So 12 million versus 4.6 billion? Yeah, on the first day.

Starting point is 00:10:31 Wow. On the first day of the ETF approval. I see. I see. So a very big deal when it was like a launch inside the United States. It's a baby. We've always known the Hong Kong markets are like just minuscule. It's more symbolic than anything. So it's not a surprise.

Starting point is 00:10:46 We've always known that the Hong Kong ETFs and overall the Hong Kong capital markets are just like minuscule in comparison. So it's more of a symbolic thing. that the Bitcoin and Ether ETFs are launched, but nonetheless, small. Yeah, when you look at it in absolute size, it's absolutely small. However, David, if you look at it just compared to other Hong Kong-based ETFs, it actually ranks as sixth of 82 ETFs that have launched in the past three years. So it's the top 20% overall, relative to other Hong Kong. Of a very small market.

Starting point is 00:11:13 Yeah, of a very small market. So there you go. Not totally unexpected. I wanted to get your take on Bitcoin miners. I'm hearing that they're starting to struggle, which doesn't really make sense to me because it seems like fees are at an all-time high with the launch of ruins lately.

Starting point is 00:11:29 Like there was one day, we talked about it on the last roll-up. It was like almost an $80 million day in terms of fees. I had expected that miners would just be raking it in, but they're not. That $80 million day, Ryan, was just that, just one day. Bitcoin minor revenue has been on, like, it's down only because margins always get compressing, compressing, compressed. And then the happening comes in and like cuts,

Starting point is 00:11:51 and a half, literally, because in half, the basal, like, income of Bitcoin into miners. And so, like, while there was, uh, there are spikes of revenue from like D-Gen, ordinal, ruin, uh, activity on Bitcoin is not sustainable. It's just like, it's actually just acute and anomaly, uh, rather than just like the actual basal level of Bitcoin inflows into miners. And so miners are this right after the happening, which miners are totally prepared for. They know this is coming. Uh, but it is the hardest time to be a minor, right? right after the happening. And this is really when the least efficient miners get washed out and the more efficient miners win, just based on overhead and capital costs and all this kind of thing.

Starting point is 00:12:33 So this is the culling of the herd of the miners. And so strong miners are going to get replaced by weak miners are going to get replaced by strong miners. And I'm not a minor. You formally were a a minor. A small time minor. I got washed out. You got washed out just like this. So that like purged you of any ideas that you create a larger mining entity. why should we care? If you're not a miner, why should we care? Because this ultimately impacts the security of Bitcoin. When less efficient miners get washed out and more efficient miners win, ultimately, I think the data represents this is that this is a centralization of Bitcoin miners to large-scale capital efficiencies, economies of scale. This has been like the long-standing

Starting point is 00:13:16 critique of proof-of-work-based security from the proof-of-state camp is that ultimately proof-of-work is just defined by economies of scale, which is a very strong centralization force. And so if your long tail can't be sustainable, then you actually just are left with only the fat tail. And so this impacts the security of the Bitcoin network. The theory around Bitcoin security, again, from the proof of stake camp, is eventually it runs out, simply because it literally does approach zero over time. And so every happening is like one step closer towards that. Mining is supposed to be super competitive as well from the, I guess, the Bitcoin mining perspective but you know what could really help the the miners at this point in time um fees yeah but also

Starting point is 00:13:57 kathy wood's prediction of 3.8 million for the price of bitcoin price bitcoin price by 2030 kathy wood of ark invest uh is predicting this this is a raise on her previous prediction which was 1.5 million so she's causing she's raising her price she's raising it she's raising it at a time That's typically a no-no. Now, Kathy's not afraid to do that, all right? So 3.8 million. Again, one Bitcoin right now is 60,000. We just went over this.

Starting point is 00:14:29 But by 2030, Kathy Wood says 3.8 million. That seems really high. But let me tell you... It seems very high. Let me tell you how she arrived at this number. It was a simple calculation. If institutional investors, you know, there's a lot of those and they have a lot of money, if they were to allocate just over 5% of their portfolios.

Starting point is 00:14:48 that's that's all it would take then that alone would send the you know the the Bitcoin price to 3.8 so that's what she's saying David 5% doesn't sound like a lot um of an entire portfolio

Starting point is 00:15:03 to dedicate to one asset it kind of does seem like a lot I feel like it's more 5% to crypto and that'll happen I don't think all of that gets allocated to Bitcoin that makes more sense to me that's my take by 2030 Bitcoin will not be the only ETF on the markets. But actually, here's a, I blank this out in, in the agenda, so you couldn't see.

Starting point is 00:15:23 So it's, yeah, I was wondering why parts of our agenda have been redacted from me. On my, on my agenda, big, big reveal. I still use paper for my agendas every week. That's going to turn into a screenshot on Twitter. Yeah, yeah, it makes fun of me for that. Okay, so how much do you think? So Bitcoin's at about $1.1 trillion in terms of total market cap. how much do you think that of that 1.1 trillion is held by countries and companies how much? Company, okay, so micro strategy is a company and micro strategy owns 1%. I know that. Oh, man, we're really getting it.

Starting point is 00:15:58 Countries El Salvador is much smaller than micro strategy. So I don't even think countries even is registering here. BlackRock and all of the others. Is that counting our ETFs companies? I think so, right? Swaget. Like it. You know?

Starting point is 00:16:15 No, no. An ETF, if it's owned by an individual, it's not. If it's owned by a company, it is. It's not just everything that's custodied. I'm going to go with 4% is held by countries and companies. A lot more. All right? So this is Van X estimate.

Starting point is 00:16:30 And maybe they're off by a factor of X amount, but it's probably in the ballpark. Van X says they own about $175 billion. That would be closer to like, you know, I guess the 17%. 17% or so, something like this, right? 16, 17%, 17%. About 14%. 14%. 14%?

Starting point is 00:16:49 What? Yeah, 14% is held by... Who is that? Actually, this does include ETFs in the headline. It looks like it's ETS. All right. Well, in that case.

Starting point is 00:17:00 Yeah, that's what I thought. That's still a lot. ETS are the big one. It's still a lot more than I thought, right? I mean, 14% already owned by companies. We know that crypto, like, Bitcoin has always been retail first. and it's still retail, you know, predominantly owned. But now...

Starting point is 00:17:16 If it's 14% companies, ETS, all these things, everything else is retail. Yeah, they're in training. Or I guess VC funds. Yeah. David, do you want to hear a quick, like Fed Watch, like maybe just a drive-by? Yeah, that's it.

Starting point is 00:17:27 So Chairman Powell made some statements this week. Just the summary is not unexpected. Number one, at rate hike, very unlikely. Not in the short term anyways. His base case is to cut rates later this year, but not a given. No promises. there's no sign of stagflation.

Starting point is 00:17:45 He wanted to make that explicit. And he still maintains that the 3% inflation that, like we're in right now, that's not acceptable. He said something, there was like a direct quote, 3% inflation and satisfied shouldn't even be in the same sentence is what he said. It's kind of entertaining. So did you expect, I mean, this is pretty much what I expected. I don't know if this is news to you, but it's what I expect. Yeah, so inflation is no longer out of my.

Starting point is 00:18:12 This is my take about the current state of the economy. Inflation is no longer out of control, but definitely still present. Yeah. So, like, I think he's just saying, like, you know, we're actually still in like middle of 2023 state of inflation. Yeah, I think what's most interesting about this is doubling down, tripling down, quadrupling down on saying 3% inflation is not acceptable. All right?

Starting point is 00:18:33 Because that kind of, I don't know if it paints him in a corner, right? But if it's harder for him to say, no, actually 3% is the new normal. Just kidding. when he keeps doubling and tripling down on this. So that should be interesting. He's definitely trying the Volker tactic of, I'm going to break the back of inflation. Sure, sure.

Starting point is 00:18:52 All right, back to crypto topics. Can we talk about Solana? Yeah, yeah. So Salonnas had a massive, absolutely massive run. I think a question on people's minds is, is that it? Is it over? And we've got some...

Starting point is 00:19:03 Where does the future of Solana lie? Yeah, so there's some usage metrics from X user Gumshue, Twitter, X user Gumshue. Solana season is said to be over. It can't pump more. Yet, it solidified itself as the best chain on a lot of relevant metrics. Let's talk data. What's the data that Gumshue is presenting here? Some actual pretty useful charts here. So chart number one, usage increasing. And this is just a matter of transaction fees inside the Solana ecosystem. And you can tell when exactly you can just point to where the GTO drop happened, right? As non-vote priority fees got.

Starting point is 00:19:42 kicked in. This is like Solana contention. And so that's been up only ever since the Gito drop, which happened in the 2020. Actions, right? Yeah. It's big. Well, yeah, users, bots, it's all kind of the same thing. Like, MEV bots, these are the same thing as on Ethereum. But net

Starting point is 00:19:57 aggregate user transactions are up. After that, table coin transactions, this is actually a new dashboard from Visa, which we're going to show in a second. The table coin transfer and transaction size on Solana is also just very, very healthily. up.

Starting point is 00:20:12 Salana is actually the, according to this chart, the largest bar by far followed by Binan smart chain, followed by Polygon, followed by, followed by Tron, followed by Arbitron, followed by base, also all in like a Pareto curve. So Salon, Salon, definitely the dominant total transaction size in stable coin transactions. And then there's Dex volumes, which is on an 18x increase between 2023 and 22. And then active addresses, hovering around 20 million, 20 million plus. in the Salana ecosystem. TVL definitely needs some work, but I mean, it makes sense for a transaction and high-speed

Starting point is 00:20:49 throughput blockchain. But nonetheless, the Solana TVL up from $210 million to $4 billion since August. So definitely, like, it was pretty hard to argue, like some pretty healthy charts and pretty healthy metrics in the Salana ecosystem. It's totally benefited from kind of the meme coin craze. It's kind of the place to go from meme coins. Also, the airdrops have been juicy on Solana so far this cycle. like some of the biggest that we've seen.

Starting point is 00:21:14 And the question is, will all of that continue? So I don't know if that's true. Like Jupiter was one big one, but like even that Gito drop, Gito actually only dropped like a hundred million or something. That's pretty small. Maybe it was more, I was thinking more like from a received by individuals perspective. Because Gito went to like 10,000 people or something, a very small number. But it was like a lot of money for each of those users.

Starting point is 00:21:38 Yeah. So it was an average of like $10,000 per user. It was like $130 million to 10,000 addresses. Yeah. And this was before the AirDrop meta really even, like, was a thing. And so one of the reasons why the Gito AirDrop was is as big a deal as it was, even though it only went to 10,000 addresses because no one expected it. Well, it feels so big if you're an individual and you get just like $15,000 or something,

Starting point is 00:22:02 10 to 50. That feels like generational wealth overnight. Like that's the crypto dream, right? Especially when comparison to Uniswap, which like actually created the AirDrop meta and uniswap was like $1,400 rather than $14,000 or whatever. So, David, do you have any conclusion? Do you think Solana season is over or do you think it pumps more? I mean, as Falana is approaching, in post-FTX, it was definitely under, oversold, right?

Starting point is 00:22:24 Like, under-indexed on by the industry. And since then it's reverted to the mean, right? And then maybe it's also, like, justifiably grown just by just the U.S. and all these kind of things. But, like, it's no longer totally disregarded by the market, right? It has approached a closer, like what your close number is, what your approximate fair value is for Solana, up to you. But it's closer there than it was six months ago, that's for sure. Yeah.

Starting point is 00:22:49 David, we got a lot coming up. Eigenlater introduced its token. They dropped it. But everyone's mad. We got to talk about that. Also, crypto hits a record for the richest person ever to go to jail. Because, of course, you know, CZ. Oh, my God.

Starting point is 00:23:02 That's the most classic crypto headline. The richest person ever who goes to jail is a crypto person. Yeah. So stay tuned for all that, guys. we'll be right back. But we want to shout out the sponsors that made this episode possible, including Cracken, our number one recommended crypto exchange for 2024. If you are a bankless listener, you have to have an account at Cracken.

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Starting point is 00:25:28 That's team at t-o-k-u.com. The much anticipated eigen restaking protocol, the token has dropped. They're calling it a stake drop. So what happened? Okay, so we're going to break this down into a number of sections here. We're going to go through the actual eigen token and the tokenomics and what the hell intersubjective means. Then we're going to get into the stake drop details, the distribution of the token, who got what, how people feel about that.

Starting point is 00:25:53 And then we're going to go through the list of grievances that the people, the nebulous people feel about eigen, the actual details of the drop, and then me and Ryan are going to reflect on all of these things and some other people's reflections in the space. So starting with the actual eigen token. It's called a universal intersubjective work token. Ryan, I'll write off the bat. Did you understand what universal intersubjective work token meant when you first read that paper? I had no idea. That sounds like a white paper, you know. Well, it was. It was a 40-page, very academic white paper, which is extremely on brand for the writer of that white paper Sri Ram, who is literally an academic who has written white papers before.

Starting point is 00:26:33 Okay, so let's go through this. Universal intersubjective work token. What is a work token? A work token is a token that gives its holders the right to contribute work to a network and earn rewards based on their contributions. This is a model that has been pioneered before. People who may remember the Auger platform, this auger was a work token. This has been a tried and true like token model.

Starting point is 00:26:56 Many tokens are actually work tokens. you just don't know about it. You just don't call them that. A holder of a token stakes their work token, which gives them their right to perform some work that is required by the protocol

Starting point is 00:27:06 and then is compensated as a result. This is actually in contrast to a governance token of which Igan is not. Igan is not a governance token. So it's a work token. It's not a governance token.

Starting point is 00:27:18 And the model, I used to always explain this is like, you know, taxis and taxi cab medallions. It used to be an old taxi network in order to be a taxi cab driver, you had to buy a medallion in whatever jurisdiction you're in. And that was essentially your work token to operate within the taxi cab network, right? And like, earn fees for providing work to

Starting point is 00:27:38 it. That's what you mean when you say work token. In case people aren't familiar with that term. It's, it's that. Yeah, that's right. We've seen this model of assets in Tradfai, right? Like, the taxi cab work token aspect, like medallions in New York used to go for like millions of dollars before Uber came in and like after all that up. NERF them. And to nerf them. And to nerf the, Yeah, but like it was actually kind of a sad story for like people who like, say that was, that was their business as they had. And you invested in that thing. You invest in a taxi medallion. Sometimes you took a loan against all sorts of things.

Starting point is 00:28:07 But anyway. Yeah. So like the idea is like the work token, like a taxi medallion is like a one million dollar asset. And then it nets you something like 1.5% APY because of the work that you get to do as like you get to loan out loan it out to your taxi cab drivers. Okay. Anyway, same thing. That's a work token. That's the work token piece.

Starting point is 00:28:25 Intersubjective. Okay. Blockchains are very good at penalizing objective faults. These are like double spends and ZK proof violations, fraud proof violations, all things that math can ascertain to be incorrect or correct. Intersubjective faults are things that blockchains cannot ascertain to be a fault or not, but are nonetheless completely objective to a rational observer. So two humans can agree 99.9% of the time whether something was a fault.

Starting point is 00:28:57 fault or not, but a blockchain simply does not have the knowledge or awareness or the data to be able to decide what's a fault or not. An example of this is a data withholding attack, which is why we need data availability, where some validator is holding data hostage, but the blockchain itself isn't actually aware of that fact because it's being withheld. So the blockchain can't do any slashing because it's not aware of the data being withheld. But to humans, two rational observing humans, can look at this and be like, oh, somebody's withholding data. So there's a fault at here somewhere. So that's what intersubjective means.

Starting point is 00:29:31 It's there are faults. And two rational humans, two or more rational humans can totally agree without reasonable doubt that like there's a fault here. And then universal, the last part. Like I said, we've seen this work token model before. We've also seen what I'm about to explain is this a forking contract before. Auger, like I said, built this forking contract prediction market back in 2018. but Auger's intersubjective fault system was application specific.

Starting point is 00:30:00 Auger was built to settle disputes between prediction market outcomes. That's what Auger was. Igen is universal because you could, in theory, build Auger as an AVS on eigen layer, and then you can use Igen as the work token for that application to use Igen to settle disputes. But you could also use the same eigen token to settle intersubjective faults for any other AVS that also needs to settle intersubjective faults. Okay, that was universal.

Starting point is 00:30:27 Part of this key component of the eigen system is this forking contract. So there's actually a two token model to the eigen token. So there is the fungible normal eigen token, which is like the typical token that people are familiar with. These are the token that goes in defy that will be on uniswap, that will be in AVE, etc. And then there is B eigen, which is backed eigen. And this is like a derivative form of eigen that creates this forking contract. and this is how the intersubjective faults are settled. And so if there is a fault that the eigenlayer community has determined as a fault,

Starting point is 00:31:05 it goes to court, and this is a court case. And so you can see in section two here, you have B. Eigen, number one, which will split into two universes, but one universe representing one outcome of the other, who it was in the correct or who was in the wrong. and these two universes split and people stake their eigen to one of these two different universes. And then in a typical scenario, like the vast majority will just all agree on which is the correct universe. Somebody was being a malicious attacker here. Everyone else was being honest.

Starting point is 00:31:38 People are going to stake their eigen tokens to the honest side. And then all of the eigen tokens stake to the dishonest side get burned. And so this would actually decrease the supply of eigen. And so this is how a two different universes, are birthed for the eigen token, and then all of the attacking malicious eigen gets burned, and then the eigen token goes off into this future universe. And this is how intersubjective faults are settled in the eigen ecosystem. It cannot do this with ether because you cannot fork the blockchain just to settle

Starting point is 00:32:09 disputes in the eigenlayer ecosystem. This is highly related to Vidalix posts about don't overload Ethereum consensus about eigenlayer. And so this is the answer to how you can have intersubjective faults in eigenlayer Aveses, without having to worry about forking the Ethereum blockchain, you actually just fork eigenlayer. Why there needs to be a two token model is because you also need to have the tokens just be working in Defi as everyone is familiar with and be totally unaware that all of this is going on. And this is also the why there's work in the eigenlayer ecosystem.

Starting point is 00:32:40 So all that makes sense? Yeah. Can I just say something about that, David? Sure. That's kind of a lot. So I think the question on people's minds who are excited about this, uh, token is like, but how much am I getting? Like, where's my air drop? I mean, you just, that's a whole bunch of vegetables that like are, you know, you have to digest. And I think there's a good percentage of the population who's just like never going to understand this or only understand

Starting point is 00:33:09 a small sliver of it, right? And I actually think this gets to, I know we're going to talk about the criticism. This actually gets to some of the criticism of the air drop from kind of like the person, average crypto native person on the street. which is like I kind of want to hear about my token and how much it's worth and how I can unlock it. And what I feel like I got any like was a, uh, Intersubjective work token. Yeah. And that's like an academic like 40 page type thing. And I think, by the way, I think this is why, um, I can had some, you know, like some of the comms problems around this drop in the first place. And it's like, the nerd in me is really excited about what

Starting point is 00:33:49 you just said. And also, I feel like I have to, like, digest that and understand what it means in the context. But, like, you know, the Dgen, the crypto. Like, I'm just like, but like, give me the details. How much did I get? So this is, yeah, this goes at the heart of like kind of the conflict between, well, Eigenlayer is producing this very sophisticated forking contract to increase the scope of what security and trust it can provide the universe. And then on the crypto side, I was like, uh, stop talking to me about intersubjective work. Like, I would like to know, I will give give me my tokens please. I think the average person got something from what you said, which is, oh, cool, it's a work token. It has utility. It's not just a futile governance token.

Starting point is 00:34:27 There's a purpose to it. So checkbox, right? I don't know how much more I need to understand about, like, or could understand about intersubjective forking at this point in time. Okay, so let's get to the details of the distribution. What did that look like? Okay, eigen distribution, 1.67 billion tokens. 5%. It was released in this initial season one steak drop. Claiming will go live in 10 days. We'll talk about the transferability in a second. Of the total supply, 5% is season one. There are multiple seasons.

Starting point is 00:34:59 15% of the total supply of eigen is allocated into the stake drops, which are just airdrops, but the only thing you can do is you can take your token. 5% is getting released now. You can see your allocation. We'll talk about that again in a second. And then, let's see, early contributors. This is the Agenlayer team, gets 25%. investors, 29% community initiatives and ecosystem are 15% each, and you put those together

Starting point is 00:35:26 and you basically have what I'm pretty sure is the foundation. So this is like community incentives, bootstrapping the decentralization, whatever a foundation does, which we, the typical model of a foundation that we've seen. So 15% total will be dropped to quote unquote the ecosystem or the community, right? Five percent announced in this first kind of drop. You can't actually claim the tokens at this point in time, but you can see if your address is eligible and you can claim them, what, it was like May 10th or something like that? That's when you can actually claim it. Okay. I'm with you so far. That's right. Okay. So like a lot of the feedback about eigenlayer is the nature of the distribution. People, some people do not like the linear-ish nature of the

Starting point is 00:36:12 eigen distribution. So it's linear-ish because of the point system. You put your ether into eigenlayer. you started accruing points, the more points that you get, the more eigen tokens that you got. Except with some small caveats, people who restakes their ether into eigenlayer in the very first phase who took on, like, who were very early, like the first depositors into eigenlayer, they took the extra risk because they were at first through the door. They got a small boost of eigenlayer rewards just for being early. Native restaking, as opposed to liquid staking tokens, resaking got a boost. So if you deposited ether or natively staked ether into eigenlayer, you got a boost.

Starting point is 00:36:48 boost. And then everyone got at least 10 eigen tokens. And so the long tail of addresses got a boost. So if your rewards were below a total of 10 eigen, then you just got bumped up to 10 eigen. So no one got less than 10 eigen. This actually impacted 130,000 addresses. So what would have been 400,000 tokens given to the bottom 130,000 addresses actually turned into 1.2 million eigen tokens, which were given to the bottom, 130,000 addresses. Overall, 260,000 addresses got eigen tokens in the season one allocation. Yeah, and so I guess, like, the question is how many addresses, evaluate an air drop, how many addresses got it, right?

Starting point is 00:37:32 So how wide was the distribution? I guess that's a proxy because some of these things can be civil attacked. And then, like, how much value was actually dropped, right? And so if you do an implied eigen valuation at about $18 billion, and by the way, there is some small illiquid perps markets that value eigen at $18 billion. Is it $5 billion? Is it $10 billion? Is it $50 billion? We don't actually know, but let's take $18 billion.

Starting point is 00:37:53 That would mean about $900 million was awarded to those $280,000 addresses at this point in time. And again, they can't claim it yet. They will be able to claim it. And by the way, once they claim it, it's locked. We'll talk about that in a second. But if you do some comps on that, and then, by the way, there's another $1.8 billion. So, again, that's 15% of supply that is set aside for our future drops to the ecosystem. to the community, right? So, I mean, how much is that in total? Are we talking about, like,

Starting point is 00:38:24 we're talking about north of three billion, I guess, in total that would be dropped at an 18 billion valuation? Yeah, just counting season one, which is five of 15% of the total amount of eigen tokens that's going eventually to the community, however you wanted to find that. Just counting the first five percent is $903 million, which puts eigen as number three of the total amount of value distributed to 260,000 addresses. So just for comparison purposes, Arbitrum dropped 1.5 billion to 625,000 addresses. ENS dropped 1.07 billion to 138,000 addresses.

Starting point is 00:39:01 DydX did a quarter billion to 64,000 addresses. So again, Eigenlayer, 903 million to 280,000 addresses. Oh, 280,000. Sorry, that's the right number. So, like, actually, just with season one, not counting the unknown season two and season three, we don't know where that's going. just season one and puts that number three in the airdrop terms.

Starting point is 00:39:19 Okay. One other fact here is eigen layers aren't transferable at this point in time. So you can check your eligibility. You can claim them on the 10th and you could stake them. But even once you claim them, you can't actually transfer them to another address. So you couldn't list them on, like you can sell them on uniswap or anything like that. The tokens are locked. Can you talk about that?

Starting point is 00:39:39 So it's stated that eigen will be non-transferable for some amount of time. The specific amount of time was not released. but they put some milestones in there. First, the whole intersubjective forking relies on like actual social consensus. People actually need to learn what intersubjective forking actually is because it's a work token. You have to know how to do the work. And so there is a phase of just people needing to learn what intersubjective forking is and what their role is. And then also there are additional components of the eigenlayer engine that also need to be turned on.

Starting point is 00:40:09 These are just like internal milestones that the team needs to hit, which is payments and slashing. So key payment and slashing features should be well established and understood as well as core elements of a sustainable marketplace. This is the eigenler team saying, hey, we got work to do once these things are live and once the community digest what a work token is, then we will unlock the token. I think it's safe to say. So those are all the facts. Now we get into like a lot of people were upset about this. Yeah. A lot of there was a lot of grievances.

Starting point is 00:40:39 And I think one of the things is based on what you just said is people were upset. that they were receiving a locked token and not a completely an unlocked token. And by the way, there was no actual date. It was kind of an estimate of, hey, we'll let you know later when these things happen as far as when Eigen itself gets unlocked. So there was a lot of upset around that. And that was, I think, one of the core grievances that I heard, but not the only one. Because this token was, or this was dropped, right, on Monday.

Starting point is 00:41:10 And David, Twitter, like, went absolutely wild. It was one of the... It was crazy. It's one of, like, I would say, the most attacked airdrops that I've ever seen, right? In terms of, like, Twitter sentiment. We could talk about, like, how real that is, how fake that is or what that is. But it wasn't just on Twitter. It was, like, from channels that we look to for actual signal.

Starting point is 00:41:30 So the bankless citizens in Discord, a lot of people were upset. They had different issues. So what were those issues? What were the primary grievances, would you say, of airdrop recipients? One of the biggest ones was the VPN restrictions, which were pretty aggressive. So there's two types of website restrictions out there. There's geo blocking saying, hey, if you're accessing this from any particular country like the United States, you can't access this website. And like we're pretty used to that. Like that's like half of defy. And it's simple. You just turn on your, you're starting somebody might just turn on their VPN and just get around it. But then there's also more sophisticated VPN restrictions. So like you actually can't access the eigenlayer claiming website using a VPN because VPNs are like tagable. They're logable. So any sort of consumer like business based VPN, like it's not going to work. And so the criticism was there was like no VPN blocking on the way in when you stake, you know, restake your tokens.

Starting point is 00:42:25 But there's VPN blocking when you go to claim was the basic criticism. Yeah. So like the criticism is that like why are you guys blocking our ability to claim the token, but you're not blocking our ability to deposit the Eath? Right. Like one is like you can you use the application and the other one is like a token securities conversation? but we'll talk about that later. The non-transferability is probably the next big a grievance. It's non-transferable until a later date and a date that actually wasn't stated.

Starting point is 00:42:53 And so, like, what's the point of having points if you're going to just release a token that's non-transferable? Like, that's just on-chain points. It's still, like, it's not real until it's transferable. And so that was another big grievance. The linear distribution people didn't like, even though it was, like, still linear-ish. It still kind of benefited the long term, but people wanted more. Like at the bottom tier, right? So rather than that 10 minimum, they wanted a higher amount minimum type of thing,

Starting point is 00:43:17 more linear at the bottom. They wanted large whales to not have such a strong, a linear return on capital. This is the classic, like Justin's son comes in, deposits 23 million ether for two weeks, and then he gets like a million dollar air drop just because he has so much capital. And so many people would like that not to be rewarded so strongly. that's why people don't like the linear distribution. Now, there's, of course, problems with sublinear distributions, but again, a topic for a different day.

Starting point is 00:43:47 There's also, I all agree, there was some sloppiness about the snapshot. So the snapshot for season one was taken March 15th, and then it was announced that the snapshot was taken on April 30th. So there was a 45-day period or anyone who deposited it during this window or anyone at all earning points during this window were actually excluded from this drop. So people didn't enjoy that.

Starting point is 00:44:09 And then there's like team investor distribution and lockup terms. So like the token is non-transferable, but teams and investors have started their vesting. So people didn't like that. But that's actually not actually the case. The vesting schedule of investors and teams starts when the token is transferable. Most people don't know that. But that is the case. Well, what's overall the summary of the vibe?

Starting point is 00:44:33 I think here's a take from a bankless citizen, which is not a random Twitter account. This is PM-Lebs says from the outside looking in, it looks like they accepted Eath from everywhere. They pump the TVL, raised cash, and then decided they couldn't give out rewards for challenging jurisdictions. Why not prevent the U.S. from participating up front? I don't know. It just seems greedy. There's like this feeling of like, I don't know. A lot of people. Individuals feel farmed by eigenlayer.

Starting point is 00:44:58 Yes. Individuals feel farmed by eigenlayer. That would be a summary of the vibe. So this is the caricature of like what people think is the typical like raised strategy for big teams these days is like hype up your token, hype up your points, issue a points farm, get TVL in, go to A16Z, raise a billion dollars, and then also release a locked token. Ha ha ha ha, ha. Got you.

Starting point is 00:45:21 Gotcha. And so like, I get the perspective. This is many people's conclusion who are viewing this thing as either as community members. And like there were like 10,000 X meme coins on Solana that people elected to not go and participate in because they had their capital inside of eigenlayer, right? There were other opportunity costs. There were other things that they could have done. And many people feel like they just got nothing.

Starting point is 00:45:46 They can't claim their tokens because they're geo-blocked. And even if they can claim their tokens, they can't transfer them. And so, like, what did they really get? They feel like they got nothing. I just want to double down on that, right? I get how it could feel like that if you're at sort of the bottom and you only deposit a very small amount. You're only eligible for 10.

Starting point is 00:46:02 Maybe didn't pay for your gas fee. At the same time, it's not clear to me that that's what the, the eigen drop was actually rewarding here, right? And so, like, when you look at the actual APY of, I put X amount and I got Y amount return, wasn't something like, it's like 60%, the base case APY. 18 billion dollar valuation, so that's an assumption.

Starting point is 00:46:26 But base case APY is for the amount that you put in to the token, you got about a 60% APY return, which is like it's not, going to turn you into like it's not life-changing money yeah but it's a pretty good APY i would would say pretty good return especially i guess considering that obviously the more uh eth that goes into eigen the fewer um like eigen the the rewards get spread around the wars get spread around more so like but but just a you know level set here apy was about 60 percent is that is that correct that APY at 60 percent is base case if you were in the bottom 130,000,

Starting point is 00:47:07 thousand addresses that got the bump up to 10 igan you you got more you got between 90 and 170 percent apy okay for just being there um but like people are still saying well if you do the calculation that that 10 eigen is 180 dollars okay uh and so like this just it's just not much so uh i don't think igen layer has like responded uh officially to um all of the clamoring that's going on but uh what do you think like an eigen if you're if you're a builder in eigen layer say you're Shri-Rom. What do you think their perspective is on this? Okay, so the perspective of people building the eigenlayer engine, they have a different focus. So, again, emphasizing that like eigenlayer engine that's being built, eigenlayer mainnet went live

Starting point is 00:47:52 a couple weeks ago. Igen-DA is now online. They are slow rolling out different components of the eigen layer engine, turning them on, hooking them into each other. So the whole entire ecosystem of incentives and participants in the eigenlayer world are all are all humming. And so the eigen token is actually just the next in-line component to complete the eigenlayer engine that the eigenlayer team needed to turn on. And so that the eigenlayer team is like, okay, we are slowly building out the engine. We are slowly releasing components one by one by one. Now it's the next in-line component is the eigen token. Let's get that out there. Our lawyers don't want it transferable, so we're going to lock it. But you can stake it to eigen-DA and then you can

Starting point is 00:48:34 provide economic security to eigenDA. Then we're going to turn on slashing and then we're going to have some systems and then everything is going to be like humming and then the engine is going to be complete and then we're going to unlock the token. Like that's the perspective of the eigenbuilder and that's their focus.

Starting point is 00:48:49 Yes. And so they're not exactly taking into account like the perception of this or the perception of everything. They are just focus on turning on the eigen layer engine. Yeah, because eigenlier has been a series of like releases and like you slow incremental releases. Slow incremental releases. Slow incremental releases.

Starting point is 00:49:04 So I could expect that this would be a next slow incremental release. But on the flip side, the community just some don't care. They don't perceiving that. They are just like, oh, I'm here for the token. I'm here for the rewards. It's a bull market. There's only so much time to reap the rewards of the bull market. I'm going to do the eigenlayer thing.

Starting point is 00:49:21 And like, oh, what? I got a wet dud of a token that doesn't have a market value associated with it because it's not transferable. And so these different time horizons. Different time horizons. Yeah. There's also Jake Trevinsky also put out, a very long tweet about this, basically summarizing that this was one of the most risk-off

Starting point is 00:49:41 token release events that you can do. He says, the eigen token kicked off a discussion about two particular design decisions. One, that the token can't be transferred, and two, it can't be claimed by United States eigen users. So what is a risk-averse lawyer to do? Enter non-transferability. He says, in general securities law only applies to assets that can be bought and sold, and then also geo-fencing. In general, securities law only applies to transactions that occur within the United States. Both of these options are on the conservative end of the regulatory risk spectrum for token distributions. But there are other points, he says, on the risk spectrum that are also defensible,

Starting point is 00:50:17 even when the SEC might not agree. For example, free airdrops aren't securities transactions. So the vibe of the thread is that Eigenlayer chose a very conservative regulatory cover for itself. And I think another perspective that the typical user doesn't have is, like, Athena, great air drop, very happy community, team based in Portugal, right? Sri Ram, Iganleier team, United States base team. Like Sri Ram lives in Seattle. He's a professor at University of Washington.

Starting point is 00:50:44 And so different teams and different projects have different levels of risk associated with them when they release a token. Yeah, I think that's an interesting point. And it adds some friction to the claiming experience. I will point out, though, no one has been able to claim yet. So you're just sort of geoblocked from assessing your eligibility. I guess at this point in time. It's hard not to imagine.

Starting point is 00:51:04 Which you can also check your eligibility on bankless cannibals. It's just, yeah, it's just hard not to imagine that there would be third party apps that would, like, allow you to kind of check eligibility and to like maybe even, you know, claim this elsewhere, right? If Eagens is in a position where they have to, they feel like the most, the least risky thing is for them to geoblock that, you know, like they do this. But, yeah, there was not very much tolerance for the geoblocking, in particular the VPN restriction, I would say. and that counts for something. I guess you could also take the flip side of this, which is basically like, hey, if you're in the game in crypto,

Starting point is 00:51:38 you're going to get sued anyway. Like, look at Metamask, you know, Unis, they're all sued, Coinbase, cracking, they're all sued. And so... Gary doesn't care about your VPN box. Yeah. And so I sort of, I get that take as well, but, you know, look, I'm not a lawyer.

Starting point is 00:51:51 Don't make these decisions. All right, so what is then your assessment on this? What do you think? I've kind of given bits of it throughout this, like, analysis. I think once the token is transferable in the future, like, everything is going to be fine. Like 60% ATY is very strong. That's a very good farm for a very long amount of time, especially for $13.5 billion that that

Starting point is 00:52:15 60% had to get spread around. Once the token is transferable, people are going to figure out how to get around the VPN. It's not that hard. People are going to make it easier for other people to get around the VPNs. Then token is going to be transferable. It's kind of common at some billion dollar market cap. And then everyone's going to be fine. People are going to forget about it.

Starting point is 00:52:32 That's kind of my base case. So just like super noisy and you think people are eventually going to be happy. Let me ask you because there's a lot of charge that if you think like that, you are basically an out of touch elite or like you are kind of a core investor in the project or you have some exposure or you have some upside. You're paid to think like that basically. And yeah, what do you say to that? Yeah.

Starting point is 00:52:55 That's kind of like the base opinion, I would say. It's like that's the opinion of the community is that like anyone affiliated with Allion Lair or associated with a team or like one degree removed is all of the opinion that like the things are good. You can't have an opinion. I think you can't have an opinion. All right. So you are a long time promoter. Like you're excited about the project. I'm a big believer.

Starting point is 00:53:17 I think that's genuine because I know you. And you've been like excited from the very beginning, particularly because of like ETH being restaked monetary asset. Like it checks all the boxes for what I know about David Hoffman. you're also an advisor for the project as well as well as i am so somebody's going to listen this whole segment and be like your opinion is invalid of course you think that you're a financially incentivized to think that all right and like so it's worthless the analysis is worthless yeah and i just want to say that because that's the actual mood that's the mood and that's the mood what i think my big takeaway here is there's actually like this uh in this new kind of like air drop meta 2024

Starting point is 00:53:54 there's like this uh dichotomy that has strengthened between kind of like like like what I'll call labor and capital. You know all the labor capital battles that like we've seen throughout history, right? Of, you know, labor's on one side. They're doing the work and like capital takes all of the proceeds. I think there's like you're almost forced into this dichotomy of you are on team labor, which means you are a user. You are trying to, you like be eligible for the air drop, trying to do the activities

Starting point is 00:54:20 that the protocol wants. That's labor or your capital. You're a developer. You're a project. You're an investor. You're a VC. And it kind of like behind the. scenes and you have to choose one or the other. And it's interesting because I think like bankless,

Starting point is 00:54:33 you and I have been placed between both, right? I mean, so yeah, but like because you're on the capital side, you know, and because you're giving an argument on the capital side, your opinion's just invalid here. So there. I think some people will listen to this and just come to that conclusion, just like turn it off. Yeah, there's somebody in my replies on Twitter who is like the the team and the Aginlearn team and the VCs got something like 60% of the total distribution of Agen. Meanwhile, the community only got 5% even though, again, 15%. But and they say like, hey, like you could just easily take away 5% from the teams and the VCs

Starting point is 00:55:13 and you could double the supply going the community. And that's just an easy thing to do and you could have a massive outsized increase to the community. And I remember thinking some of these very similar like sentiments back in like 2017. It's so lazy. When I was on labor side, yeah. And I was like, it's just so easy just to have an outsized benefit to the longtail, to the community. Yep. But I also just think that invalidates the risk that investors and the team have also put into eigenlayer.

Starting point is 00:55:41 That's a very capital opinion of you, David. There have been eigenlayer teams who have been working 40 to 80 days an hour a week since 2021. There have been eigenlayer investors who actually gave up capital. They put in their capital, just like to have the community. put in their capital into the airdrop farm. It's a capital argument to make. It's a capital arguing to make that basically without free ROM and the developers, it would be zero.

Starting point is 00:56:05 There would be no drop. And then the community is like, eigenlayer is nothing without like, without us, right? Igen layer is nothing without our community and our capital. And then on the flip side of things, well, like the investors are saying the same thing with their capital. And then the eigenlayer team is saying the same thing with their labor.

Starting point is 00:56:21 Yes. And so it's like this three way like standoff between investors, team and community. I agree. But the thing is like the community has like 80% of the people, 80% of the voices. Sure, they do. And I think that's what's happening. And at some level, like the give and take is kind of like good. I feel like it's good. I feel like this will equate to situations that everyone is more happy with. Or you know what I mean? I think there'll be some given take. I think there'll be some check and balance. I think it'll work out. But I actually think there's another force here at play. Okay. And I'm not sure how many people see it. which is like, I think there are genuine, not users, not people who are excited about this individual citizens. I think there are a whole bunch of people that are industrially farming aerops right now. And they are effing it up for everyone.

Starting point is 00:57:13 Well, but I actually think that there is like, it's really hard to perceive, but there is like an influence on a social media and like hiring. You can literally hire swarms of bots to like preach a narrative and like push it. And then so some of the people who are disappointed with the drop and our individual citizens get pushed into that mob attack. I mean, we've seen mob attacks at play so many times on Twitter. And it's almost impossible to know how much of that is at play. But it is a third party that is just civil attacking. The fourth party. Fourth party.

Starting point is 00:57:45 Sybil attacking. Well, there's labor capital. And I guess I don't know what these are extractors. V.C. investors, community. Three legitimate parties. I think most people see eigenlayer. devs and investors in the same their capital. But anyway, so there's this other party that's like, you know,

Starting point is 00:58:01 pushing their advantage to. The industrial farmers who are like bowling eigenlayer into giving many, many tokens to the long tail, but they are half the long tail. You have 100 addresses that you sible detect, right? Yeah. Well, 10 is fine. It's a fine return, but like, you know, what's better? You know, 20, 30, 40, 50, as far as that minimum eigendrop,

Starting point is 00:58:21 that's going on to. Totally. Yeah. And it's the most undetectable part of this whole thing. The last thing I want to say about this is I actually think that's at play. But the biggest thing at play to me is just the delta between expectations and reality. And when there's a delta between expectations and reality, there's going to be disappointment. And I actually think it was impossible.

Starting point is 00:58:42 No matter what thisirdrop did, I feel like the expectations were so hyped. I mean, eigen restaking, this whole thing has grown so fast and so big. that there were so many people expecting like something far beyond what was probably reasonable to expect because like just people are trying to retire off of air drops yes and it's just not going to happen this the space is too crowded and so that was never going to happen but because people had that expectation and the kind of the reality was like ah and I got something that was locked so I can't sell it and now you're talking about interjective uh intersjective forking and like I don't care about this and, you know, I wasn't in it for that. Like, I'm just, there's a lot of missed expectations.

Starting point is 00:59:29 There are a lot of parties around the eigenlayer ecosystem who are very incented to hype it up because like all of the LRTs are trying to hype up eigenlayer because that's how they get inflows, all the AVS is. Like, I'm, I like eigenlayer because it is a very like Ethereum centric piece of infrastructure that I think removes the need of like the long tail blockchains and puts it all into the same spot. Like, that's my interest in this. And like, I, I'm probably one of the main proponents of the whole like eigenlayer ecosystem. And I've been saying like, I think I can layer before this. I said I think I can layer could be the number one air drop of all time.

Starting point is 01:00:02 And if you look at the actual dollars of capital that's going to be, that is set aside for the community, it is by far the number one air drop by value sent to 280,000 addresses. And so like there's some disconnect going on and it's all just very weird. I was trying to convince David to not talk about this at all, by the way. Because I don't know that people ought to hear these opinions at this point in time. But there you go. There it is. We got a meme.

Starting point is 01:00:30 Oh, you got a meme? We got a meme. Yeah, yeah. Yeah, yeah. Oh, my God. This. Yes, I've seen this. What are you looking at?

Starting point is 01:00:36 Okay. So this is a caricature of the eigenlayer token presenting itself to like a crowd of community. And then the community just like start just absolutely beating the shit out of Igan layer. But then you see in the next stream, you see both layer zero and ZKSink just in absolute fear who are about to drop their tokens. They're just living in fear of getting beat up because the mob's going to come for them next.

Starting point is 01:00:57 Everyone learns from the last one, but I got to say, depending on the time and place you drop it, it's going to be a unique experience every single time. It's almost like you never know. All right, David, moving off Egan-Land-Land. Let's talk about CZ. Okay, so his sentence came this week. Tell us, what did he get?

Starting point is 01:01:13 How many months are years? Everyone listening, guess how many months CZ is going to jail for? because if you don't know, it's because you haven't been on Twitter. There's an ancient meme in CZ of him just flashing the four number, and it's his commitment. He spawned this from this tweet where he's always going to remember the fourth list in his tweet that he's going to say, and I can't even remember what one through three is, but four was always ignore the fud.

Starting point is 01:01:36 And so four, CZ flashing four has just turned into a meme. It's just like probably crypto's biggest meme. CZ got sentenced to four months in jail, which is just absolute proof that we live in a simulation. So Binance is ordered to pay a $4.3 billion fine and forfeiture. CZ has to pay a $50 million fine, and he is going to jail for a whopping four months. This is what he said. I would like to thank everyone for your care and support, writing letters, showing support on X.

Starting point is 01:02:05 They mean a lot to me and keep me strong. I will do my time, conclude this phase, and focus on the next chapter of my life, which is education. I will remain a passive investor and holder in crypto. Our industry has entered a new phase. Compliance is super important. and the answer says and funds are Seifu protect users he said

Starting point is 01:02:23 so that's how he's going out on crypto Twitter at least for this period of time if this is the end of the era of CZ he never lost a customer dime finance never got exploited I think that's true all funds have

Starting point is 01:02:39 been Safu since the beginning of time so like there there are people out there he kept his commitments to the crypto community he made he made his promises and he kept them. And that is extremely exceedingly rare. Yeah, I will say. I think that crypto is basically treating him as a going to jail as a hero. Yeah. Or at least he's not a villain. Certainly not a villain. CZ is going to come out as a martyr for sure. This is Eric Forhees with a related take. Do you know CZ, David, will be the wealthiest person to ever serve time in a U.S.

Starting point is 01:03:08 federal prison. Okay. So that's another record that crypto is setting. Number one. Maybe because no bank execs ever go to jail. Yeah. comment and that that is true i definitely it there's definitely a sense that they are making an example out of uh cz this is great binance gets a four billion dollar fine that was also four billion it was four point three it's four point three that one i reject this one he's trying all right he's trying oh okay this one's good though this is a meme from uh mike epilito this is a pretty i think i remember seeing this meme in high school the original meme is judge says to the victim or the the the person about to a sentence. I hereby sentence you to 68 months in jail. And then the person says

Starting point is 01:03:52 whispered to my lawyer. And the lawyer says, my client has requested that you add one more month. So it would be 69 months. But this is CZ saying, I request that you add one more month to my three month sentence so you can make it four months because crypto Twitter will think that's hilarious. And it did. Do you actually think that's what happened? No. No. You actually think the universe made it for. Like, you actually think that's what happened. I think that's a happenstance. Yeah. Man. Oh, I mean, like,

Starting point is 01:04:18 I do think that there was negotiation between CZ and his legal counsel and the judge ahead of time for like that $4.3 billion fine. Like, CZ could have just remained on his yacht wherever. So like maybe the four was negotiated ahead of time and CZ like it would be really funny if it was four months. I want to get CZ on the podcast.

Starting point is 01:04:37 See her about this after he's out. So maybe five months later. David, we got a lot coming up. Next, Stripe is coming back to crypto in a big way. And also, I want to update you on the tokenized Treasury Wars. It seems like they're starting, and it's a little bank-on-bank action for you. Roger Verr? Do people know who Roger Verr even is?

Starting point is 01:04:56 People do not know who Roger Verre is. We've got all that and more coming up, but before we do, we want to thank the sponsors that made this episode possible, including one of our favorite layer two is to recommend. That is Mantle. Go check them out. Mantle, formerly known as BitDow, is the first Dow-led Web3 ecosystem, all built on top of Mantle's first core product,

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Starting point is 01:08:48 It was rumored last week, but here we are Stripe, bringing back crypto payments this summer. They demoed a platform, their brand new platform, their interface for checking out using Stripe, and you have the normal Stripe interface, but there's this also pay with crypto button. Actually, links to Solana, so it's integrated with the Solana blockchain. John Collison, Stripe's president, says, at the future of payment, conference, transaction settlements are no longer comparable with Christopher Nolan film links, and transaction costs are no longer comparable with Christopher Nolan films for budget. Stripe is bringing back crypto payments this time with stable coins, which are a way

Starting point is 01:09:23 better experience. So, yeah, Stripe getting back together with crypto. Are you seen this on the screen? So what's super cool is in the Stripe checkout flow, right? It's connect your wallet. Connect your non-custodial wallet, right? And the example is Phantom. There's also like the option to, you know, rainbow, you know, MetaMas, coin-based wallet, all of this. And that statement that John was making,

Starting point is 01:09:46 so like for full context of this, Stripe has like entered and exited crypto multiple times over the years. Right. Like, oh, there's hype, let's go check it out.

Starting point is 01:09:54 And they go and they deploy it. And they find like, it's not good for the payments use case. So I remember they integrated the lightning. They like did all sorts of things. This time, it feels very much like Stripe is doing something that is sustainable and here to stay. Right.

Starting point is 01:10:07 Based on what John just said, which is these are super cheap now. and it can handle the transaction throughput. And I think this is absolutely massive. Do you know there are like over 130 million businesses that use Stripe today? Right. Well, I mean this means you can show up to wherever a strike. Like I use Stripe in New York all the time because like every single restaurant has it.

Starting point is 01:10:27 And that means I can have crypto on my phone. I can pay with crypto on my phone. So does all the web, most of the websites use. Like a bankless citizenship. Like you use Stripe. The internet just uses Stripe. The internet uses Stripe. And it is, I don't know this, like a 90 million.

Starting point is 01:10:40 dollar, sorry, a $90 billion private companies, one of the largest private companies in the world. So it's still, it's still private. Anyway, I just think it's absolutely massive. And it's a testament to how far we've come because they're trying crypto this time and they're actually going to stay for it. Pretty cool. Not just right, but also Visa. This is kind of a funny announcement, but Visa has a new dashboard for everyone. If you would like to look at stablecoin volume and metrics across blockchains and value, Visa actually has a very good dashboard. So this is Kai Shub. Phil tweeting this out saying we decided to partner with Illumium Labs to create the Visa-on-Chane analytics dashboard to create a closer look at stablecoin activity.

Starting point is 01:11:19 So it is just a dashboard, but it's also a very accurate and precise one. And it's done by Visa. Pretty cool. And you can actually see in this chart the absolute dominance that is tether. Like USC and tether were like almost 50-50 with a slight tether lead in the middle of 2022 last year. And now like tether is just completely just a gargantuan. And it's like three times larger than USDA.

Starting point is 01:11:43 You're talking, when you say large, you're talking in terms of supply. And that's one metric. But here's another interesting metric, actually, is their neck and neck. USDC actually briefly overtook Tether in terms of stable coin transactions. So number of transactions. I think UFTC might actually be transacting more than Tether. It is. It's a bit more than P.

Starting point is 01:12:01 Yeah. And then Tether's the store of value currency. Which is kind of cool. But I will tell you, David, Tether is absolutely printing money. Printing. Printing. Printing money. Okay, so this is one quarter of profits. 4.5 billion. 4.5 billion last quarter, Q1, 22.4 on that tether trade. Right? And you're just making it. And you just making it. Because the stable coin, like when you hold tether, right, you don't get any of the interest.

Starting point is 01:12:27 But tether holds T bills. They get 5% interest. When you got $100 billion of tether out there or more, I think it's about that. Then you get to capture that 5%. And it's a darn. good business. How many employees do they have? Like 20? 80 is what I was told from Apollo last time. Still. Yeah. It's pretty good. Pretty good margin on that business. David, speaking of this, look at this. You know, we thought securities, tokenized securities were going to be a big deal. They're almost at a billion dollars. Oh, wow. So they're climbing right up there. And Black Rock is I'm going to call this the on-chain boomer index. It's pretty cool, actually. So we got 800 million in tokenized treasuries out there. And I think there's going to be more. So can I give you some

Starting point is 01:13:12 alpha actually about this? Yeah, go. You know what is actually the surprising, interested marginal buyer of on-chain treasuries in the crypto ecosystem? Who's the marginal buyer of on-chain treasuries? Like who is it going to be like Dow's or crypto projects or something like this? Apparently, the demand for on-chain treasuries from Dow's is really, really strong. Yeah, because they want to last a couple cycles, right? They just don't want to see their treasuries go to, like, you know, negative 80% territory next bear market. Plus, their costs are in dollars. They pay their people in dollars, not ether. And so they have like Arbitrum has like Arbitrum Arb token.

Starting point is 01:13:47 They also have ether. But they also need some dollars, some working capital. And on chain like Buildle Fund, for example, is like a great tool for that. Yeah. And Biddle Fund, Scott, that's the Black Rock Fund, of course. They've gotten a lot of the like the growth here recently. But this is the bank on bank action I was talking about, right? So Franklin Templeton.

Starting point is 01:14:04 I really want to say that. I'll say it. Bank on Bank. Okay. So, Bank on Bank War. Get a little steamy over there? Franklin Templeton, they've been tokenized treasuries for a long time, but they actually have a little app where it looks like individuals. It's called Benji. So they just released this this week. They're offering. Benjamin's? Yep. Yeah. Again, Franklin Templeton, right? Benji tokens. Each maintain a stable $1 price. Each token represents a share of the token. tokenized treasury, okay? They have 380 million treasury fund and who can purchase it. You know

Starting point is 01:14:40 that this whole thing has been mostly the institutions like, you know, companies, Dow's, that kind of thing. Well, Benji provides apparently a way for individuals to purchase it. You get an app, you get your Benji as tokenized treasuries. Get your Benji. Get your Benji. Exciting stuff.

Starting point is 01:14:56 What dollar bill is the Benjamin Franklin Franklin on? A hundred. Okay. All right. As soon as I said that, those Benjvins. As soon as I'm like, Ryan totally knows that. Yeah. I mean, you said last, like, do you say this over the weekend that I don't listen to Eminem?

Starting point is 01:15:12 Yeah, I did say that. Come on. Come on. I'm real, David. All right. Back to crypto subjects. Are you done with on-chain treasuries? Can I talk to about crypto stuff?

Starting point is 01:15:23 That was a crypto subject. Where you been? Ave. Introduced Aveve-V-Native. Ave V-4. So there's a number of big updates in the Avee world coming online with Ave-V-4. A-V-4. liquidity layer, which is the big one.

Starting point is 01:15:35 This is the multi-chain part of like Ethereum. AVE is learning to contend with its many different AVE deployments on optimism, arbitram, Polygon, main net. It is building out using all of the different like cross-brishing, like messaging layers, like layer zero and socket and all these different like inter-op layers. A universal liquidity application. So the liquidity on optimism and Arbitrum and main net all ought to be the same. That is the vision for the AVE unified liquidity layer.

Starting point is 01:16:05 They also have some new features. Fuzzy controlled interest rates. I'm so glad you asked what that was. These are just interest rate curves that adjust both on the X and Y axis. So it's just a little bit more rigid. And so as demand for a particular asset in AVE increases, the interest rate curves moves higher on the Y axis, but the steepness of the curve becomes more shallow.

Starting point is 01:16:27 Basically, a much more dynamic interest rate curve in Avey protocol. and then also just with increased emphasis of go. So if you want to look more of the details of the AVEV4, there's a link in the show notes. Down, kinkpoint down. Kink point down. I wasn't going to say king point, but now you said it, so I feel like I have to explain.

Starting point is 01:16:47 No, you don't have to explain it. There is an inflection point in Avey interest rate curse where if you can't hit 100% utilization because then no one can withdraw. So basically the interest rates goes to infinity as it approaches 100%. But there's a kink point where the interest rates are marginal

Starting point is 01:17:05 and then kind of like at 90% and goes really, really steep. So the king point adjusts more dynamically. Intersubjective work token. More flexible kinking in AVE. Avey's tolerance of many types of kinks inside this interest rate curves. I'm not going to touch that one.

Starting point is 01:17:22 Do you want to hear a headline from 2018? Sure. Coinbase just added lightning to the Coinbase tag. I'm sorry, Lightning. I'm sorry. All right. So, and this is cool. I made me as the context of we just record an episode with Eric Wall, who's kind of a Bitcoin builder talking about L2s. And he basically said lightning's dead. I guess it's not dead. Maybe that's too mean, David. But anyway, Coinbase is dead. Okay. But Coinbase is now supporting lightning. You're still allowed to integrate with permissionless protocols even when they are dead. Wow. David, I got to give you an update on the war on crypto. You ready for this?

Starting point is 01:18:03 All right, so there's three things. The SEC apparently has been trying to make Ethereum and security this entire time. We didn't know it. So they were going to sue Coinbase over Metamask, and now Coinbase is fighting back. Also, there was this weird, ominous warning from the FBI this week, and I want to tell you about that. And the DOJ is attacking the Square and Cash app. these three things. The first is, so consensus versus the SEC, I don't need to get into all the details because we did an entire episode about this with Joe Lubin. And like, I think it's a

Starting point is 01:18:38 dynamite episode. I actually re-listened to it this morning. It was really good. It was fantastic. But Coinbase is taking the SEC to court to prove in a court system, U.S. core system, once and for all, that Ethereum is not a security. That is instead a commodity. And that that's really the headline. That's the thing that you need to know. And it seems like from their list of evidence and their court filings, well, Coinbase has dug up all of these things about the SEC actually coming after Ethereum developers themselves, like sending letters to companies that employ Ethereum developers and like sending letters apparently to individual Ethereum developers. Right. So this is all part of a broad narrative that Joe Lubin was painting of like they're trying

Starting point is 01:19:19 to cut off Ethereum. This is the U.S. government to U.S. citizens, right? that's how high he thinks the stakes are. And I got to say, after listening to that episode and seeing what else is going on, it kind of seems like that's what's going on here. Also, same week, just like, you know, last few days, the FBI put out this bizarre public service announcement, okay? And I'm going to just TLDR. You can read it yourself if you want to, but it's basically like, don't use unregistered cryptocurrency money transmitting services. and they reference a FinCEN database that shows you if the thing that you're using, the application you're using is registered, and if it's not unregistered, you shouldn't be using it.

Starting point is 01:20:04 And they're not real clear on whether wallets are money service businesses or code is, maybe, maybe not. We don't really know what they mean. They're just issuing a warning to all U.S. citizens to not use unregistered cryptocurrency money transmitting services. Why issue this warning? We don't know, David. We do know that two samurai wallet developers were arrested last week.

Starting point is 01:20:27 What for having a money transmitting services business, essentially? We do know that the DOJ has filed against Tornado Cash, the Tornado Cash developers, and called their code, their immutable code on chain, a money transmitter service. All right? So where does this leave us? With a really bizarre and ominous public service announcement from the FBI. basically our nation states police internal police organization to who to us crypto-native consumers i don't know but this is kind of creepy to me uh and i don't like it and the last

Starting point is 01:21:04 thing is uh the samurai wallet co-founder they pled not guilty so they're going to be released on a one million dollar bond but the indictment against samurai wallet those details were revealed as well and uh the justice so again this is the doj they claim that there's been $2 billion in illegal transactions, illegal, all of them illegal, because Samurai isn't a registered transmitter. So basically everything that went through Samurai was an illegal transaction, but actually only $100 million was kind of the criminal part. You know what I mean? So the remainder of that $2 billion was actually probably legitimate, like people using this service. For privacy, yeah. For privacy, but, you know, it doesn't seem like the DOJ cares. They're just bundling it all in here.

Starting point is 01:21:48 Well, of course, if you are seeking privacy, you are by definition a criminal, of course. We are in like weird times, like really bad times. It does feel like crypto is under this full frontal assault. The tornado cash is one, a case that we got to watch very carefully. There was more updates this week. We don't have time to get into it. But maybe, okay, so here's the last one, David, on the Crypto Wars. Oh, my God, there's more.

Starting point is 01:22:11 There's more. Last one, I promise. Square and Cash app are now being investigated for processing crypto transactions, linked to sanctioned companies, countries, and terrorist organizations. So this is Jack Dorsey, Square and Cash App. It's basically similar charges. We don't know the details to what they just busted CZ for, right? All right.

Starting point is 01:22:31 I mean, put all these things together. That's just one week. That's just one week. I'm reminded of my favorite tweet from Niraj from Coin Center, where he says, I'm sorry, your warrantless surveillance regime was based on the fact that you would always have intermediaries in your financial system. Yeah. And but like they're just finding the next most proximate intermediary.

Starting point is 01:22:51 That's not actually an intermediary, but they're finding someone. Yeah. It's such a chilling effect. David, do the kids know who Roger Vare is? The kids do not know who Bitcoin Jesus is. All right. Roger Vair is basically the Satoshi of Bitcoin Cash, as in he was the biggest proponent of Bitcoin Cash. Okay.

Starting point is 01:23:13 I see what you mean. Do you remember the, do you remember the whole crying babies mean? Oh no. Excuse me. Dying babies. Yeah. There was like a this like, this like, Raidreira went on saying like, there are babies dying because Bitcoin is not forking into Bitcoin cash and we're not accepting eight megabyte blocks into the Bitcoin blocks base. Big blocker. Big, big blocker. He was the OG big blocker. Yeah. It's like super hardcore libertarian, uh, indicted for tax fraud. He as accused of failing to file tax returns for the sale of his Bitcoin. He, he, Roger Verre has like, sub $10 Bitcoin and he has a lot of them. Um,

Starting point is 01:23:47 Also, or Bitcoin cash, actually, now that I think about it. Also, it's alleged in this, alleged in this across his companies as well, because he's invest in his companies. And it's like, so he, I guess, fun factor, maybe not so fun. I don't know, depending on your perspective, he actually renounced his U.S. citizenship. And when you do that, there's an exit tax. So all of your, it's all of your capital gains, unrealized capital gains. Well, basically, it's like, so you have a whole bunch of unrealized capital gains.

Starting point is 01:24:14 So you bought Bitcoin at 10, now it's appreciated a whole lot more. in exit tax taxes you as if you sold them all. Like when you leave the U.S. you have to pay that. And IRIS is saying he didn't pay that. They're like taking him. They're extraditing him.

Starting point is 01:24:30 Exrediting him from Spain to the United States. There you go. Roger Verre. That's just some like OG lore. Update on some OG lore. Ether scan. That's a partnership with us. So there's a news out of EtherScan

Starting point is 01:24:41 and bankless this week. You can now find all of your airdrops on your wallet directly through ether scan powered by bankless claimables pretty cool look this is a italics address you know um bankless told him this is on ether scan it's always been like by the way a bucket list item uh for me to have like some product something that we do be meaningful to ether scan because ether scan is really what made ethereum real to me and crypto real to me top tier infrastructure yeah yeah it's top tier infrastructure but the you can't understand ethereum without ether scan yeah the fact that you can

Starting point is 01:25:12 go to an ether scan address and see like all of your assets that was just like magic for me anyway So this is Vitalik Boutarin's address, and do you know, he's got $7,000 worth of air drops that he could claim. Should I go tell him that? I'm sure he knows. I'm sure it's not. Claim your drops. Hey, you have $1.9 million in your wallet, but you were missing $7,000 of air drops, bro. Well, you know, anyone can claim that.

Starting point is 01:25:38 The Bankless Claim Bulls app, of course. There's always a link in the show notes. David, meme of the week. Let's end this. What do we got? this is a this is a throwback of a meme uh this is how crypto feels this week and it is this is for all the ogs who watched lost way back in the day i can't remember this character's name but she's like the preppy girl and the the planes is has crashed and there's like debris and fire everywhere and she's

Starting point is 01:26:03 wearing her like pink like shirt and she's just like very sad and that's that's your first crypto cycle and then four years later you are sun tanning on a beach in the middle of all that debris and all that fire because you're just used to it. That's what working, that's what working in Crypto's like. Is that, is that the way you feel? Now this is your. Yeah, right? Like, you know, mob attack right, right before the gym. Yeah, it's like a normal, normal Tuesday, normal week in crypto. Yeah. Yeah, you know, another SEC lawsuit, another couple developers get arrested, just a normal week. Yeah, and then you go get drinks with friends and call out a day. Yeah. Oh my God. Crazy times we live in. What a crazy industry. I wouldn't be anywhere else. I don't know about you. Yeah. No, like you. I'm completely.

Starting point is 01:26:43 Absolutely ruined. Too much fun. Too much fun. He's not going back. All right, guys, we've got to end with this. Of course, risk and disclaimers. Crypto is risky. You could lose what you put in.

Starting point is 01:26:51 But we are headed west. This is the frontier. It's not for everyone. But we're glad you're with us on the bankless journey. Thanks a lot.

Bankless - ROLLUP: $EIGEN Token Launch | CZ Going to Jail | Stripe Crypto Support | Market Bottom In?

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