Bankless - ROLLUP: $ETH 3k! | TradFi Stonks ATHs | $STRK Now Live | Yuga Acquires PROOF

Starting point is 00:00:00 You can see the story of the AI bubble starting to form. Like, if you look left and right, like AI crypto tokens are up, NVIDIA is up, it's holding up the entire stock market. NVIDIA is now the seventh most valuable asset in the world, the fourth largest publicly traded company. And then how does that impact the crypto markets? Because it does. Bankless Nation, it is a bullish February roll-up.

Starting point is 00:00:26 Isn't it, David? How you doing, man? Oh, we still have to be quiet? Quiet. I thought that was last week. No, until all this. all-time highs. Well, I'm going to have a hard time being quiet because we've got 3K.

Starting point is 00:00:38 That's fair. That's fair. This week. All right. So we've got to get loud about that, at least on the roll-up. I think we got 3K like three times this week. We actually don't have it right now. We have $2,990 on the ETH program.

Starting point is 00:00:50 Oh, come on. That counts. That's 3K. Just round that one up. That is not 3K. This is the first time ETH hit 3K since April 22. So that's worth celebrating. David, what else we got?

Starting point is 00:01:01 The Starknet token is out. and live it is trading. So where did we end up with the ranks of the Starknet air drop in size and addresses and amount of value distributed to people? We're going to talk about that. And then some earnings, some earning reports, both Coinbase and Nvidia have kind of rocked the street, the Wall Street, that is. And we're going to talk about the implications around the broader market. Yeah, you call it the street, David. What do they call crypto? Like, what's the crypto equivalent of Wall Street? Do we have like a cool name? Like the street? The chain? the blockchain. On the chain? On the chain. I like that. We got the street in the chain. You're either on street or on chain. Yeah. We also have Pudgies with their second Walmart round. And this time they've got some more community participation. This is a big one. Pudgies has been raising up the ranks of NFTs. And David, are points about to become liquid? I want to check in with you because you're covering this today. We're talking about the eigen points maybe or what points are we talking about? Yeah, I put out a satirical tweet a while ago,

Starting point is 00:02:01 saying, hey guys, you know what we should do? We should tokenize points. And that is unironically what we are going to talk about later. That did happen. We have tokenized points. So we're going to get to all of this and more. But first we're going to talk about Suey in the Suey Base Camp, which is a in-person conference in Paris during Paris blockchain week, April 10th through 11th.

Starting point is 00:02:24 So if you are interested in a parallelized layer one delegated proof of stake chain, that is the sui base camp might be for you. There is a link in the show notes to get 20% off of your path to the sui base camp. This is the move ecosystem for all the devs out there who enjoy move. This is, sui is like the spiritual successor to the whole Libra project now turned into a layer one. And so especially if you're a dev who's interested in parallelized new VMs that are parallelized. There's a link in the show notes to get started.

Starting point is 00:02:54 Yeah. And that code is suey-bankless 20. You get 20% off the standard prices there. And thanks to Suey for sponsoring this message for the Bankless Nation. David, you know what? We always on the roll-ups, since the roll-ups have begun, we've always started with the number one asset by market cap. That is Bitcoin.

Starting point is 00:03:13 We started every single week with Bitcoin first, then we go to Ethereum, then we go to the rest of the markets. This week, I think we've got to do something different. I think we want to switch things up, just celebrate ETH price hitting 3K for the first time since 2022. We've got to start. You're really making a big deal out of this. This is a big deal.

Starting point is 00:03:32 I think it's a big deal. So, uh, tell us the price. You don't think, wait, you don't think 3K is a big deal? No, wake me up at 5K.

Starting point is 00:03:42 Are you serious? Yeah, you know, we like round numbers, but I mean, yeah, numbers going up. We're all happy.

Starting point is 00:03:48 I'm not making a big deal out of this. I'll make a big deal out of 5K. You, okay. Well, then I'll take this one. Happy 3K, everyone.

Starting point is 00:03:56 And, except for David. what's the except for David apparently because he he wants to wait um for his celebration i'm going to give you some a bull post here david since you're not going to do it for the bankless nation last time we hit 3k here's why i think this is a big deal last time we hit 3k was April 22 we sort of flirted with um 3k for the beginning part of um all of 22 and we were sitting on a whole bunch of time bombs at the time that the crypto community didn't know about a time bomb number one was the Terra collapse. It was right after April, we hit, the last time we hit 3K, Terra blew up

Starting point is 00:04:34 and took markets with it. And then we had the death of three hours capital. Then we had all of the block five Celsius C-5 failures. Then we had the Genesis fiasco. Then we had the $10 billion FTCSBF fraud. Okay? This time, the next time we hit 3K, which is now, hopefully it's we're above at the time you're listening to this, we are sitting on a, a completely different foundation. None of those things are problems right now. Now, we might have other time bombs that we can't foresee, but it's so early in the cycle.

Starting point is 00:05:05 But those will happen later. Those are later problems. Right now, we've got, we've got tailwinds. We've got L2 hyper-acceleration, like just so many L2 chains going on. We've got another episode about L2's coming out on Monday. Restaking yields, okay? That's actually a narrative that is hitting Ethereum

Starting point is 00:05:24 in a big way, ETH the Internet Bond. we've got the ETH ETF. So I'm calling 3K as the floor this cycle, David. I think that this is a lower bound. And I think like, of course, we'll bob around these numbers for a little bit, maybe in the weeks to come. But this is kind of the new floor. And it feels good.

Starting point is 00:05:43 That's why I'm celebrating 3K, David. I love that you're calling it the 3K floor when we are currently at $2,978. It's still a floor. It's still going to be a floor this cycle. Like, do you know what I mean? Like if we go up by, you know, to 10K to 12K to something else that we come back down, I don't think we're going to fall below 3K. You're saying the bare market lows of next bear market will be above 3K.

Starting point is 00:06:10 I think so. Yeah, I feel like that's a safe bet. Plus or minus whatever. Plus or minus 10%, 20%, something like that. But we're in range. So I don't know. I'm bullish. I'm sorry you didn't come in with the bullish vibes for Ethereum 3K.

Starting point is 00:06:24 I was not prepared for that, David. I'll come in, I'll do my service for this bullish podcast episode with the Bitcoin price, because I'll just like regurgitate some of the bullish Bitcoin observations from Nick Carter. First off, we're at 52, we started the week at $52,000 on the Bitcoin down 1%. So ETH went up 6% this week. Bitcoin went down 1%. Currently at $51,500. And then Nick Carter put out this tweet that I thought was, you know, pretty nice summary of the current state of the Bitcoin landscape.

Starting point is 00:06:51 It goes Bitcoin observations ranked by the most impactful to the $500,000. the least impactful. Number one, ETF flows or beyond the wildest dreams of even the most bullish analysts. Asset managers have barely activated their sales organizations, hottest ETF launch in history. I kind of talked about this last week, but just like this, the sales arm, the marketing arm of Bitcoin ETF salespeople hasn't even started. So we still have like a sales force behind the Bitcoin ETF incoming. The BitVM appears to be a fundamental step change in Bitcoin tech enabling optimistic roll-ups without a soft work.

Starting point is 00:07:28 Explosion of VC dollars being allocated to Bitcoin startups, and particularly layer twos. Ordinals and BRC 20 frenzies have created a hot ball of money with the Bitcoin meta, particularly in Asia. And then he has some like long-tail stuff finishing with the happening is also a thing, I guess, he says. So these are all the reasons why Nick Carter is bullish on Bitcoin. Yeah, I'll double down on the VC dollars flowing in.

Starting point is 00:07:51 I have never seen so many Bitcoin investors. projects like layer layer twos in particular it's an absolutely massive investment narrative right now we did an episode actually with the bitcoin dave so not you david but uh literal bitcoin dave who's very excited david seroy and he was talking about the bit vm project so we put that out this week if you guys want to get caught up on why people are excited about what's going on with bitcoin i think that's a great episode david let's talk about an episode with nick carter coming out sometimes I'm soon within 10 days. You guys talked about Bitcoin.

Starting point is 00:08:25 So I mentioned talked about Bitcoin a little bit. Well, we talked about actually about the Bitcoin Civil War that's going on because all of the hotball VC dollars that are going around Bitcoin are offending the other side of the Bitcoin cohort, which are the Bitcoin like they call them the fix the filter camp because there's a part of the Bitcoin camp that wants to filter out all Bitcoin transactions that have arbitrary data in them. Are you serious? If it's not, if it's beyond just a normal BTC transfer, they don't want to

Starting point is 00:08:52 want it in the men pool. I thought all camps had something in like alignment and harmony and that is number go up. And so like this innovation, this building on Bitcoin, doesn't that help number go up use case? Can't everyone get behind that? The fix-the-filter camp thinks that monetary maximalism is the best thing to have for Bitcoin. And if you put in arbitrary data into your Bitcoin transactions, you're diluting the monetariness of Bitcoin is their argument. It's a dumb argument. It's super dumb. That's very silly. Okay. Well, interesting. That fight's still going on.

Starting point is 00:09:25 Tell us about the ratio and then total crypto market cap. So, ETH Bitcoin ratio, what are we out in the week? 0.0577 on the up and up in the last week or so, but still low. Still low. I'll start celebrating around 0.075. Thanks to Cracken for all these charts. As always, you can go check that out at Cracken Pro. How about total crypto market cap?

Starting point is 00:09:46 2.07. So we are making some big leaps in market cap. we're blowing millions of dollars on a week upwards. So, you know, things are starting to accelerate. You know, we're almost, we hit the three trillion market cap at the peak of last cycle, and we're above two right now. So when are you going to celebrate the market cap? Are you going to wait for five trillion for that? Five. You're going to celebrate it three.

Starting point is 00:10:10 Five. Okay. Five. Five. Five is Stephen's celebrate. I'll note. I'll make a note at three, and I will celebrate at five. Okay. Layer two beat. Let's do a quick layer two update. while we're talking about the numbers here. This is Layer 2B.

Starting point is 00:10:24 This is brought to you by Mantle, a new and up-and-coming L2 that we enjoy very much. Thanks to Mantle for sponsoring this segment. David, what are some numbers to look at for Layer 2s this week? Yeah, we're pushing almost up to 10 million ether locked in Layer 2s. One part, you know, thanks to Mantle and many of the other newer Layer 2s on the scene. Almost $30 billion on Layer 2s. And there's a bunch of more Layer 2s that are going to,

Starting point is 00:10:51 to come on to mainnet sometime Q2, Q3, and they're going to be very different from the, from the layer twos that we already know. Starknet is like kind of an example of this, one that's like very technically differentiated. But then there's, there's others like Eclipse and Phoenix and like blast I'm starting to come around to and Skrull and Tico. Congrats to scroll. Shout out to Skrull for crossing $100 million. And when their main net was only a few months ago.

Starting point is 00:11:15 Congrats guys. That's pretty cool. And yeah, like all of these have tokens to drop. All these have like incentives that they haven't even started with points to issue, if you will. And so like I, there's like so much pent up energy in the layer two space, I think. Speaking of tokens, David, then pent up energy. Go to coin gecko and sort by seven days. The shit coins on the move this week are insane, bro.

Starting point is 00:11:40 Okay, so last week, SORA was released by chat, chat, GPT, and all the internet like exploded about these like very realistic AI chat to, um, video rendered. Can we show that? Like, these are awesome. This is a, this is a video of woolly mammoths. And this is, uh, yeah, I was going to say, obviously, it's not, um, woolly mammoths do not exist. This couldn't even be possible, but it looks realistic. You need to say that. Woli mammoths don't exist. This is a big video of this. This is another one. This is like a demo one, yeah. A city somewhere, uh, in Asia. I mean, it just looks so real. This is what Sora. And this is V1. So people, people were comparing the video of Will Smith eating spaghetti.

Starting point is 00:12:20 which was just like, did you see that by the way? It was like, yeah, it was chaotic. It was just, yeah, okay, here we go. Here's a comparison. And so these AI videos are just like blowing everyone's minds, now realizing that like, yo, if you're in like Hollywood, your job is threatened, if you're like a, like everyone's,

Starting point is 00:12:39 everyone's who's like job is threatened, like freaking out right now. Meanwhile, non-concidentally, Nvidia stock is like larger than the Chinese stock market. And then how does that impact the crypto markets? because it does. Worldcoin, talked about the movers of the week, Worldcoin, the AI associated

Starting point is 00:12:56 token that is associated with Sam Altman, up 180%, which is already a huge move. But the thing is, it is a fully diluted valuation of $86 billion. Okay, I didn't see this one coming, but could Worldcoin be the thing

Starting point is 00:13:10 that goes in Flippins like... Flipins Bitcoin by fully dilute market cap? Look, man, it's number, it's just behind Tether at the, this point. So it is the third largest chain in terms of fully diluted market cap right now. Okay. A lot of people say they fully diluted market cap is a meme and like it's it's a valid

Starting point is 00:13:31 perspective to have, but you also can't ignore it. The market cap of WorldCoin is 1.1 billion. The fully diluted valuation is 86 billion. That is the largest discrepancy between market cap and fully diluted valuation that the crypto markets have ever seen. There is so much selling pressure. coming to this thing. Why? Who's buying this? Why in the world would... Like, I guess you're not buying a holding.

Starting point is 00:13:54 You're just trading a narrative here. You're just trading them. This is turning into a meme coin. It's a Sam Altman meme coin, isn't it? It's a Sam Altman meme coin, yeah. And then the follow-ons on the other like movers of the week. Again, massive movers of the week. Singularity net, A-G-I-X, cracked the 100, top 100 tokens, up 120%.

Starting point is 00:14:15 $900 million market cap. Fetch AI, up 60%. The graph, which... I think somehow got categorized as like an AI token up 60% render up 50% Filecoin up 30% RWeave up 27% FileCron and RWeave are like data for AI. That's kind of the meme narrative here. And like I'm not cherry picking here. These are literally top one through nine movers of the week are all AI coins. It's it's dumb.

Starting point is 00:14:41 It's so dumb. Big narrative trade energy right there. That's what's going on. But what's not dumb is Sora. That is so cool. By the way, you know this Will Smith thing? I, uh, the second video is not a real video, by the way. I got to just point that out. Will Smith actually reenacted him doing the spaghetti thing. This is not AI generated. The second one is not.

Starting point is 00:15:01 Oh my God. Yeah. That's hilarious. That's really funny of him. It's awesome. Uh, anyway. Wow. He's trying to come back after the slap. You know, the slap incident. People haven't Yeah. He's got a lot of debts to pay on that one. Um, let's go to, people on live television, Biggs. Let's go to the Bitcoin ETF news on the week. Actually, before we get into that,

Starting point is 00:15:24 one correction we have to make for journalistic integrity, even though, David, you know, we're not journalists. I'm by this one on you. This is my fault. I got a little excited about the Fidelity News last week.

Starting point is 00:15:34 It is all true that Fidelity is including 1% of Bitcoin in some of its ETSs, upward to 3%. It's just only true for Canada. Okay, so this is when we were talking about, like the Fidelity 60, 40, fixed income equity,

Starting point is 00:15:51 ETF portfolio that you could just buy and forget about. And there's a bunch of these portfolios. And we were talking about like, oh, and they're putting Bitcoin in them, which is true in Canada. Yeah. We've got the fidelity.ca.

Starting point is 00:16:04 The Canadians got me there. So it's just Canada. Sometimes forgets that Canada is not the United States. It's a different place. Yeah. For me, it's just like one country, right? America's attic.

Starting point is 00:16:15 America's happy. Yeah. But let's check in on the Bitcoin ETFs in general. This is a chart from Hill Dobby. And did you know, David, right now, Bitcoin ETFs. You include gray scale because it's converted to ETF. 3.71% of Bitcoin supply. That's a lot.

Starting point is 00:16:32 At some point, I actually get a little bearish about that number. I don't know what double digits. You get to 25% like Bitcoin and ETFs. I don't know about that. I don't know how I feel about that. This was always a destination. of Bitcoin becoming a becoming wrapped inside of an ETF. And central banks.

Starting point is 00:16:52 Essential bank balance sheets, right? Yeah, this is what, what's his face? Who's our friend who called it Bitcoin Jazz Hands? Oh, yeah. Yeah, Ben, Ben Hunt, you're talking about. Ben Hunt, Ben Hunt. Yeah, yeah, yeah. It's like inside Bitcoin.

Starting point is 00:17:07 This is like in the internal demand of Wall Street, pulling 3.7% of Bitcoins from becoming outside money to inside money. It's now outside Bitcoins, which is most Bitcoin's. Now we have 3.71% of inside Bitcoins inside the regulated Wall Street. Wall Street wants Bitcoins. So this is always, without a strong defy system, this is the destination of where Bitcoin becomes the most capitally efficient is inside an ETF. You're more into Bitcoin culture than I am, like at that level.

Starting point is 00:17:35 Which is funny because I own zero Bitcoin and you own Bitcoin. Don't most sides of the Bitcoin spectrum, right? Like the spectrum you name the filters and the people who want to build on Bitcoin, They both see this as kind of a good thing, right? They want Bitcoin in the hands of central. Like central bank balance sheet, that is the path to big like hyper-bitcoinization. It's all good. Who cares how much they are on, right?

Starting point is 00:17:56 I think so. I think so. There's probably some nuances there, but yeah, I think they both agree with that. Well, anyway, it's going up. And this is absorbed Bitcoin supply. So if over the last 14 days, the amount of Bitcoin that ETFs have consumed, if that perpetuates for the entire year, for a year, a year later, we would have about 9.1% Bitcoin supply in ETF.

Starting point is 00:18:20 So Sailor's got a lot of catching up to do, David, if he's going to match these numbers. No, yeah, no, sailors getting left in the dust. I mean, people will, I think people's like gut reactions will be like, oh, the size of BTC ETF flows are only, it's like all going to happen at the very start, and then it's going to be down. I wouldn't be so sure about that.

Starting point is 00:18:38 I think we could sustain an equivalent, if not higher, level of flows, especially, I think it's going to be really interesting, post six months after approval, what these numbers kind of look like. So we got five months left before we get that. I think we could see some more tailwinds around six months. Especially as number goes up and marketing around Bitcoin also goes up and FOMO on retail also goes up. Here's what I kind of can't figure out is why in the world would you want to hold gold in an ETF when you can buy Bitcoin, right? Here's a tweet for Eric Belchian. Speaking of killing

Starting point is 00:19:09 the king in the store of value category, the upstart Bitcoin ETF is funny, Bitcoin ETF being an upstart. It is against gold. And the Bitcoin ETFs have gained 8.5 billion on gold ETFs in organic growth. So watch out gold. Is that what that means? I mean, 8.5 billion. Gold has lost $3.6 billion. Bitcoin has gained $8.5 billion. Like think about our like millennials, think about Gen Xers. You think they're buying gold relative to Bitcoin? Like from the The hell is buying gold. It's just like, it's just a dumb metal. It's a dumb yellow metal.

Starting point is 00:19:48 It's legitimately a pet rock. Anyway, we'll keep monitoring that. Coinbase had their earnings report last week. Some good news for the stock for sure. Do you want to give us the highlights? Yeah, totally. So Coinbase just had an absolute stellar performance on their last quarter. The profit, $273 million.

Starting point is 00:20:09 It turns out, so they did a lot of operational cutting. and they ended up saving a lot of money and they were still able to rake in a bunch of more profit than what people expected. I think like the earnings per share came in way higher than expected. And so yeah, they were able to reduce debt by $413 million,

Starting point is 00:20:28 which we thoroughly enjoy. And then, yeah, their expected earnings per share was like two cents and it ended up being like a dollar or something like that. It was like crazy good. And then coin, the asset price, searched by 15% and after, hours and coin is pushing up against it's like $170 right now it almost touched 200 but there's

Starting point is 00:20:49 definitely some momentum around coin for sure and when coinbase did something very very cool which is you could actually mint the earnings coinbase earnings as an nfts on base which i totally did because that's super cool uh did you mint this run i did yeah you told me about i so i just went and i did it in farcaster actually it was super easy i also did it in farcaster yeah uh-huh uh yeah it's It's very cool. What is the market cap of Coinbase now? Do you know that at the top of your head? Let me look.

Starting point is 00:21:18 In my Boomer Robin Hood app, the market cap of Coinbase is $40.1 billion. $40 billion. Okay. So I guess stack it is cheap. About half a world coin then. Half of a world's coin. All right. Well, let's talk about some more stocks that are up, speaking of like old school tokens here.

Starting point is 00:21:43 NVIDIA posts revenue of like they had a big quarter basically and Nvidia stock increased by how much. They also had very high expectations. Yeah and they exceeded those expectations. So there was 20.6 billion dollars in revenue was expected. That was what analysts were coming to consensus around and they actually reported $22 billion. So beating by one and a half billion dollars. So earnings per share, $4.6 expected. What they actually got is 5.16. Over all the stock price went from 670. Ryan's laughing because I'm talking about

Starting point is 00:22:17 boomer equity numbers. Stock price went from $675, so $740 after hours. Total market cap of $1.7 trillion. Reminder, total crypto market cap $2.06 billion. Nvidia is not much behind the entire crypto market cap.

Starting point is 00:22:33 Invidia is basically one crypto. It's one crypto. Pretty much the same. I was also laughing because of this meme. Do you see this? It's like Atlas holding this giant ball the world on his shoulders, the entire global economy, and Nvidia is propping it up right now. I think Nvidia has been a huge reason why S&P and all the stock indexes are up. Like, that is the stock story right now.

Starting point is 00:22:55 You can see the story of the AI bubble starting to form. Like if you look left and right, like what AI like AI crypto tokens are up, Nvidia is up. It's holding up the entire stock market. Nvidia is now the seventh most valuable asset in the world, the fourth largest publicly traded company. Gold, by the way, is the most valuable asset in the world. Bitcoin is 10th.

Starting point is 00:23:19 Ethereum 30th, behind Home Depot. Yeah, Home Depot. That's probably the most embarrassing one. Also, MasterCard, I feel like JP Morgan Chase, once we flip in one of those big banks, that'll feel really good on the Ethereum side of things. Ethereum ought to be higher than every single bank. Look at this. You think Nvidia's going to flip Apple and Microsoft?

Starting point is 00:23:40 Let's see. Microsoft. InVVVD is $1.9 trillion. Apple is $2.8 trillion. If the AI bubble continues, for sure. Microsoft has some of that tailwind, though, right? With open AI investment and everything that they're doing with AI, they get some of that too.

Starting point is 00:23:56 So we'll have to see. David, we're getting back to crypto when we come back. What do we got coming up? Coming up next, we're going to talk about the Starkwet token. Was it the largest air drop in history? We're going to unpack some of the numbers. Pudgy Penguins continue to not lose, just racking in the dubs.

Starting point is 00:24:09 And then Eigenlayer collects 100, million dollars from A16Z. We're going to talk about all of this and more. But first moment to talk about some of these fantastic sponsors that make the show possible, especially Cracken, where would we be without Cracken and their glorious charts guiding us through the weekly roll-up every single week? Thank you so much, Cracken. Let's go hear from them right now. If you want a crypto trading experience backed by world-class security and award-winning support teams, then head over to Cracken, one of the longest-standing and most secure crypto platforms in the world. Cracken is on a journey to build a more accessible, inclusive, and fair financial system, making it simple and secure for everyone, everywhere,

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Starting point is 00:27:13 We said it was common and here it is. The question in my mind, David, is how big was this? Was this one of the largest or the largest air drops in history? Let's get into it. Where should we start here, David? 728 million Starknet tokens out of 10 billion were airdropped to 1.3 million addresses. Over 400,000 wallets have already claimed. So we're going to see how many of those walls are dead, 400,000 wallets already breaks the number one spot in number of wallets claiming. Arbitrum used to be number one in that term, so when they were at 250,000 wallets, now the new high watermark is over 400,000 wallets.

Starting point is 00:27:52 Depending on how you count the actual value being dropped, depending on the price that you put Starknet token at, Starknet, I think, does come in first. So Arbitrom dropped $1.5 billion to 250,000 wallets. If you count the Starknet token at current prices, it is equaling $1.5 billion, but it came in, the price of Stark token started at $3. And if you've calculated that, then we're talking about like $2.5 billion. So I think Starknet now takes the number one, the high watermark for the largest air drop in history. Let's translate that into fully diluted valuation, kind of some market caps.

Starting point is 00:28:30 So it's like 10 billion total supply. So when you say $3, just multiply that by $10, but we get $30 billion, basically, when it dropped. And right now... At the moment of drop, but not very few people actually discovered liquidity sold their tokens at that valuation. So right now we are coming in at $18 billion fully diluted. And that would make our Starknet tied for first in value dropped to wallets. So it's somewhere between like the $2.5 to $1.5 million dropped to wallets.

Starting point is 00:28:58 Of course, not much in terms of circulating supply. What do we have? Like is it under 10%? Around 10%? It's like 7 to 8% of the total supply of... Starknet token is circulating, which is relatively low. Relatively low. But from a fully diluted valuation perspective, where does that stack up?

Starting point is 00:29:15 Let's take a quick look at that. So maybe comparing it, let's not compare it to WorldCoin. That would be sad. Let's compare it to some of the other layer twos. So Arbitrum is still a little bit ahead, at least at the time of recording, but they're kind of neck and neck. So Arbitrum is $18.5 billion. And then Starknet would be the second most valuable.

Starting point is 00:29:37 layer two out there at 18.3. After that, you have to scroll a little bit down and you see optimism at 15.7 and then keep scrolling. Am I missing anything? Matick. So that'd be polygonautic 9.7. Lacking the market so hard. It really is right now. So what do you, what do you think? Do you think that this is a rational evaluation or like what's your take on Starknet versus these other layer twos? In terms of valuation, I'm going to, like, people are like kind of poking fun at Starknet for having such a low amount of total locked value inside of Starknet, saying like the amount of total locked value in Starknet doesn't match the actual, um, fully diluted

Starting point is 00:30:23 valuation. There's something like $110 million in value on side of Starknet. Um, but like you're kind of like judge and you're like judging these things against like arbitram or optimism. Uh, but that's not like the best way to, compare these things because these are different roll-up constructions that are meant to do different things. Starknet is really about like a lot of compute, not necessarily a lot of defy. While they do want defy, they also want like things like fully on-chain games. And fully on-chain games aren't

Starting point is 00:30:48 really going to take in a lot of TVL. Anyways, it's like judging a fish how to climb a tree. But like at the same time, you still get to make that call. I will, I will like to check back in on the fully diluted valuation of StarkNet after there is this unlock period for investors, which is coming very soon. In April, 13% of the total supply, $2.6 billion at current prices, is going to be unlocked to team investors. An additional 13%. An additional 13%.

Starting point is 00:31:19 So we've got like 7% unlocked right now, at least according to token unlocks. So it's going to jump to like 20%. And the Starknet people will say like, oh, yeah, there's. these are long-term oriented investors. They definitely want to help the network. I'm like, yeah, you guys got to say that. Some people are up very, very bigly in paper gains. And when there's just responsible.

Starting point is 00:31:40 Up in paper gains, like, it's hard to not sell that. Yeah. And like for any VC, which is what these unlocks are coming from, primarily VCs and teams, right? They've got to sell some portion of that or else they're not being fiduciarily responsible to their LPs, I would say. So, yeah, you're right. We've got to get through that gauntlet. And when does that happen again, David? It starts in April.

Starting point is 00:32:01 Token. Dot unlocks. Dot app is a great place to check all token unlocks, especially as we progress through this bull market. And we are having a lot of high, fully diluted valuation, low float tokens come into the market. Definitely get into the practice of checking your unlock schedules. And there's a link in the show notes. Token.unlocks.

Starting point is 00:32:20 Dot, app in order to check your supply schedules. Yeah. Speaking of checking things, you got to go, if you are a bankless citizen, you got to be using the bankless apps. app for this. So we did some analytics on our side. You know, we have our AirDrop Hunter project that basically shows you the quests in order to be potentially, hopefully, eligible for AirDrops. David, we had citizens. Our best guess for becoming eligible. Yeah. About 8,000 users

Starting point is 00:32:45 of the bankless app using AirDrop Hunter and our Claimables product were eligible for this drop. And so our citizens in particular, they received an average of $1,400 per individual. This is the time to go check out those quests, add your address to the bankless claimables app. And actually, for our podcast listeners, David, to celebrate maybe the biggest air drop that we have seen yet in crypto, we've got a code. Podcast 24 gets you 10% off a bankless citizenship subscription forever. There's a link in the show notes. Man, now's the time to be doing things on chain and establishing your on chain profile. This thing is supposed to pay for itself. It's that we are designing this thing to pay for itself.

Starting point is 00:33:30 That's kind of working. Some people got $1,400 on this one token drop. You ready for the hard pivot, David? We're going to move from token drops to penguin drops. All right. Let's do it. Pudgy Penguins, round two. Walmart just did a massive reorder of Pudgy Penguin NFT toys.

Starting point is 00:33:47 What's going on here? Yeah, so of course, Pudgy, the plushies of Pudgies got put into Walmart like half a year ago, six months to go, which was just a massive, just landmark thing for the NFT industry. And Walmart is doubling down. They're doing again, they're putting in another order for more pudgies to go into more stores. 3,100 Walmart stores across the United States. And of course, these are the same plushies as before. Now there's just even more of them.

Starting point is 00:34:15 And a reminder, every single toy comes with access to pudgy world, which is their on-chain gaming experience that they are building. And so these are just like thousands and thousands of people are buying like these first items and their first access onto Pudgy World. There, which is built on ZKSink is one of their like their ZKC hypernet chains. And Walmart is saying like, oh yeah, we're ready to like double down on this relationship. We're going to sell more of these things. You know what's going to be wild, David? It's like you could actually justify like air drop questing, air drop hunting by buying one of these plush toys because.

Starting point is 00:34:50 So like people are one of the reasons I think why they're selling out is because. all these crypto DGens are going and filling up their shopping carts with all these plushy coins. Yes, because let's just, let's just connect the dots here, right? ZKSync has not released a token, have they. And when you, each toy comes with a Pudgy world, on-chain experience NFT, go do that, establish your on-chain profile for ZKSink using Pudgy, right? Will an airdrop happen as a result of this? I don't know, who knows, but go look at history, right?

Starting point is 00:35:19 Right. Like, you could just, and that you could imagine, I'm sure there's, I'm sure there are some crypto DGens sort of playing this game. I'm sure there's also a lot of kids who just see a cute penguin. They buy a penguin. And then they're going to get a big tax liability

Starting point is 00:35:33 at some point in time. Can you imagine? Buying a pudgy toy and you receive X amount of value in an air drop. I just love all of these like super young zoomers and then even the generation that's not even named yet, the kids like the elementary school, middle school kids who are like buying these plushies

Starting point is 00:35:51 because they just want the stuffed animal. and then they discover that there's this pudgy world thing, and of course they're going to go play it. And then they're just going to receive, I don't know, a couple thousand dollars from the Zika seamirdrop. And then they go to their parents, and their parents are going to be like, what the shit is happening on the internet?

Starting point is 00:36:07 What's going on? Well, that's just one possible future. Who knows? Maybe a lot of people are probably just buying it for the cuteness here. Here's Luca standing out of Walmart. We had him on the podcast. Did we release that last week? Luca Nest and stuff.

Starting point is 00:36:22 Yeah, that episode's out. Yeah, so there you go. You know what? Absolutely, geez. Yeah, he's doing pretty well with this project. Pudgy briefly flipped the apes this week. Oh, briefly. Is it not over it?

Starting point is 00:36:37 I don't know at the time of recording. This is, where should I go? NFT floor. Yeah, I got it. I'm looking at them. Oh, you're right. Yeah. Okay, so current price floor for board ab yacht club 22 ETH, Pudgy 19 and a half

Starting point is 00:36:49 eth. So, okay, you're right. Pudgies did briefly flip board ape, but they are not currently number three. I'm rooting for them. I'm rooting for them. Yeah, you prefer the, you prefer the penguins. I prefer the penguins, yeah. I owe neither and I prefer the penguins. Yeah, you think the penguins are coming for the crypto punts? Will you, will you be excited about that? Dude, the penguins say that they're coming for their crypto pumps. That's what they would want. So far unseeded. Well, actually, you know, uh, apes flipped punks last cycle, didn't they?

Starting point is 00:37:17 Apes were above punks for like a year straight. Yeah. Yeah. Punks are a bare market asset. You got a bunch of holders in the punts community. A high price floor. As soon as Ethereum becomes cool again, punks are going to moon. All right, what's next? Coming up next to the Athena mainnet drop, we're going to talk all about that. The SEC gets sued, circles going after tether, Yuga Labs acquires proof and eigenlayer points get tokenized, but not by eigenlayer. We're going to talk about all of this and more, but first, a moment, talk about some of these fantastic sponsors that make the show possible. Mantle, formerly known as BitDAO, is the first Dow-led web3 ecosystem, all built on top of Mantle's first core product,

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Starting point is 00:40:30 A16Z has invested $100 million into EigenLayer. I guess it was a new fundraising round for AgenLayer, which was a one-of-one by A-16-Z. Makes a ton of sense to me. And so undisclosed valuation as to what Eigen Labs raised at. But to me, this makes a lot of sense, Ryan. A16C's got a fantastic crypto research team. There's a lot of research left to be done about restaking and Aveses and what even all of the total products could be built on eigen layer. You know A16C is kind of in it for the long run. And then I thought this was kind of cute in the actual article announcing this race. The definition of, do you know what the definition of eigen is?

Starting point is 00:41:11 It's a German word. I actually don't. What does Igen? So Igen layer means your own layer, as in like build your own layer. build your own layer workshop. And so, you know, and own as in like, yeah, exactly. And then own as in read, write, own. So I thought that was cute.

Starting point is 00:41:30 Anyways, like A16Z has just fantastic connections into like Silicon Valley, into the software as a service sector, into like Capitol Hill and the political landscape and also Wall Street. There's extremely legitimizing in Wall Street. And so I think this is, there's A6. Z is like the perfect VC firm to take eigenlayers relationships and just like wait to the next level. I think this is like eigen layer is like swinging for the fences. I think they're going big. They're going in for as big as they can get, which makes sense because they are doing something.

Starting point is 00:42:02 They are exploring a frontier that is brand new to all of crypto and actually allows crypto to escape beyond some of its like internal insurers or stuff. How much eth is an eigenlayer right now? 8.something billion dollars? 8.something billion dollars. So what would that be like? Would that be like close to two to three million in terms of supply. It's just we were, uh, Eth supply. Oh,

Starting point is 00:42:23 E supply? I don't know. I mean, we're just looking at, um, layer two is layer twos have 10, uh, million, $7.8 billion in Egan layer. 7.8 billion and then what is that in these terms? Uh, approaching three. I mean, that, that could, that would be quite the flippening. If at some point in time, the amount of ether in terms of supply or, you know, like value, whatever, uh, dollar value, flip, flips the amount of ether in layer two.

Starting point is 00:42:48 that'd be very interesting. Not saying it could happen. Well, like, eigenlayer will be able to actually increase the productivity and the utility of layer twos. So there's going to be some symbiosis here. Because you're going to be able to take like eigenlayer LST tokens. Renzo actually announced this last week that you can mint easy eth, the Renzo liquid resaking ether token. You can mint it natively on layer twos.

Starting point is 00:43:16 And so that will actually count for both ether in eigenlayer. and on layer 2s. Well, people are going crazy for eigen points right now, including, I guess, A16Z through their purchase. But Kelp Dow is doing something interesting. They are issuing synthetic eigen points introducing KEP, which is kelp earned points. What is this?

Starting point is 00:43:37 Basically, it is a claim on an eigen point that KelpDow is earning from all of their eth deposited into eigenlayer. So basically, they have tokenized eigenlayer points that they have in their like quote unquote treasury. And so now like restakers will be able to transfer and trade their earned points as tokens on Ethereum. I cannot believe you just tokenized points. Well, but it's interesting because they are definitely not in control over like the minting of points or the supply of points or anything to do with points.

Starting point is 00:44:07 There's no settlement assurances. There's no property rights around points. So in theory, Eigenlayer would be like, we're yonk in your guys as points. Like there's technically nothing stopping EganLayer from doing that. Right. they could basically say, hey, anyone who, like anyone with CAP just doesn't get points, right, if they wanted to. Yeah, yeah. There's nothing.

Starting point is 00:44:26 I mean, yeah, points are not. If you're listening to our points episode, points are not a smart contract. There's no contract about points. They are a number in a database that can be changed at will by the issuing entity. So, Kelp is just like taking a gamble that Eigenlayer is not going to like mess with their points. A good old fashioned social contract. We'll see how that works out. Athena Maynett.

Starting point is 00:44:49 What is Athena, David, have not been following this. Athena is a new stable coin, a USDE stable coin that is created via this pretty novel mechanism. It is created via yield on two sides of a trade. One is the yield of staked eath. And then the other is the yield of funding rates from people who are paying to go short ether in a leverage fashion. So you slap these two yields together.

Starting point is 00:45:16 You can earn them at the same time. And then this trade kind of trades out. So it's a delta neutral hedging trade that produces yield as a result. If I was better at defy, I would have a better way to explain that. But basically, this is how this works. You should probably do a show on this. It's generating some hype for sure. And it's also generating some controversy just because there's a lot of yield that is being advertised here, like over 20%.

Starting point is 00:45:43 And that is like triggering people's PTSD from Terraluna. Yield on what? On like a dollar, right? So this is a, it's, what they're producing here is an ether based synthetic dollar that's offering like 27% APY, all right? Right. And when you see a dollar representation that's offering like close to 30% APY, you immediately go back to how is that possible?

Starting point is 00:46:06 Where is the yield coming from? Anger protocol on Terra Luna is like what people are like. Yeah. People get freaked out about this. but it's generating the yield in a different way. How would you describe it? Well, kind of what I said. So you have the yield of Staked ETH, from Lido Staked Eth,

Starting point is 00:46:22 and then you also have the yield from funding rates that people are paying to short ether, and you get both of these things. And the actual mechanism for how that flows into the dollar, I'm not totally sure I need to brush up on this. But like, it checks out. It does check out. There are plenty of risks in this system.

Starting point is 00:46:38 There's a bunch of dependencies. A lot of this capital is on centralized exchanges. And so that's a risk. This is not a decentralized stable coin. It is a stable coin. It's not decentralized. It's a pretty cool experiment. And this experiment just hit main net.

Starting point is 00:46:53 And now that's kind of like what the news is and everyone's kind of reacting to it. Yeah. I think we do not have time to explore all of the risks or get into that today, certainly. But there'll be some links in the show notes and then maybe expect an upcoming bankless podcast in this category. Oh, are we committing to that? I think we should. I like finding it. There's a new source of yield.

Starting point is 00:47:15 We got to find out where exactly is coming from. This is how we invite people onto the bankless podcast. We say we're going to do a podcast about them. This is Anthony Sassana who is backed this project. I assume as an angel investor. He said, I'm very glad to see lots of people questioning Athena's design, asking how they can offer the 20% plus yield and also exploring what all of the risks are. This is very different to last cycle where people questioning things were the minority.

Starting point is 00:47:40 So he's just making the point. that it's good that people are asking this question. It's healthy. It's healthy. Well done. If you were skeptical, well done. Good job. You did a good job.

Starting point is 00:47:51 Thank you. Thank you. We're all becoming more mature. This is great. Yeah. No one's encouraging you to ape into this. You definitely have to understand it first. David, this was big news in the NFT sphere.

Starting point is 00:48:01 So Yuga Labs acquired Kevin Rose's project proof in all of the owls that go with it. What happened here? So all of the IP, the proof collection. the moonbirds, the oddities, mythics, and grales, all of the things owned by proof is now owned by Yuga Labs. And so there's a handover period and Kevin Rose will now become an advisor to the proof company. And so basically handing over control of all of proof's assets over to Yuga Labs, which Yuga Labs has done this before. They acquired the MiBits and Cryptopunks IP and I think something else as well. But yeah, this is definitely inside of the Yuga Labs. Like, business model. How did the, how did the punks, um, like, was that a good thing for crypto punks overall, would you say? No change. No change in price. No change in price. No change in price. No change in price of culture or utility or did they do anything? No, there is no way to harness crypto punk culture. We are, we're a decentralized cohort of holders. I, uh, I think the price of moonbirds,

Starting point is 00:49:02 the price of moonbirds went up after this. Yeah, and then it went down. Then it went down. I think, I think it's overall unchanged. I actually, no, just kidding. I'm wrong. Uh, it went from one Eth to 2Eath. So Moonbirds doubled actually in valuation. But down from all time highs significantly, right? And I think... Turns out the mint price was 2.5Eath. So below the mint price. Below the mint price. And then Moonbirds absolutely skyrocketed. So there's been a lot of negative reaction in the NFT community and even in the Moonbirds community. Here's a tweet thread from Adam Hollander saying, I effing hate this saying that Moonbirds was mismanaged.

Starting point is 00:49:41 It was a mess and they didn't follow through on their promises. So a lot of... Wouldn't you be a fan of new management then? I don't know. It depends what moon management does with it. I think moonbirds as a cohort, moonbird holders as a cohort have been dissatisfied. I think maybe there's like very high expectations with how high moonbird's price went. But like the vibe is like people are dissatisfied.

Starting point is 00:50:04 But then we're getting new management. So like don't we want that? I don't know. I mean, it depends what the new management does with it. If they do what Luca did with the penguin. that would be incredible if they don't. I'd actually rather have Luca buy them. I think Lucas got his handful, handsful with his penguin community.

Starting point is 00:50:24 One last air drop to talk about optimism, the fourth optimism air drop. This one for $37 million. This was announced on February 21st. Optimism Collective recently announced his fourthirdrop, specifically targeting artists and creators in the optimism ecosystem, 2,23,000 addresses with eligibility criteria based on engagement and creativity of artists. Anyone who deployed NFT contracts on the Ethereum, Layer 1, base, OP Maine, and Zora before January 10th. And I think perhaps also interacted with the same NFT contracts.

Starting point is 00:50:58 And so this actually might be a sneaky one. We bank lists, because we have, we minted some NFTs and podcast NFTs. We got like, how much money to get? We got like $700 or maybe $1,200 from this. had no idea without our own claimables product. Yeah, that's right. Thank you bankless claimables for making sure that we actually know our own airdrops

Starting point is 00:51:18 and that goes for you as well. So make sure that you are plugging in your addresses just in case you got this Optimism AirDrop. You just want to get an alert. The fourth. These are like perpetual air drops, right? And I think many, many Layer 2s and many AirDrop like kind of communities

Starting point is 00:51:32 with tokens will continue to do this. And so sometimes you just don't know. You got a present, you know. you got something in your eth address. David, let's talk about the people versus the SEC. I love these words. The crypto lawyers were pretty excited about this last week. What happened?

Starting point is 00:51:51 So there is a crypto exchange called legit exchange, which is suing the SEC, I think, preemptively, trying to ensure that all future tokens that they list and trade on their exchange will not be sales of securities. So they intend to facilitate the sale of crypto assets, the exchange of crypto assets on their exchange. And they are making, they are asking a court to order that the secondary market sales of digital assets are not the sales of securities. And also declare that legit exchange does not need to register with the SEC as an exchange broker or clearinghouse. And will also thirdly prevent the SEC from bringing an enforcement action against legit exchange and similarly, similarly situated CFAT members. basically saying, hey, SEC, we saw what you've done to Coinbase.

Starting point is 00:52:39 We saw what you've done to Cracken. We are going to get a court to declare that what we are doing is Gucci and you guys cannot sue us. This is what you call it. This is a preemptive strike, right? We're going to sue you before you sue us, right? This is Amanda, it goes on. To be clear, this is the first time that a crypto market participant has proactively sued the SEC. We are now suing the SEC.

Starting point is 00:53:03 I love it. I love it. I mean the crypto community, not David and myself, although we would if we could. We would. Of their project. Give me a reason. And pre-anything anything by the SEC. Plaintiffs are not looking for money.

Starting point is 00:53:14 They're not looking for money, David, or any reward. They're looking for a statement. Legal clarity. Like, can we run this business? Because it seems like we should in the law. And so they're asking the court to give them clarity here. I actually, this is Jake Trevinsky's take on it. Crypto goes on the offensive in the courts.

Starting point is 00:53:32 That's why it's a big deal. This lawsuit proactively challenges the SEC's unlawful attempt to seize power over digital asset markets that has no authority to regulate. David, I had no idea we could just go sue the SEC. That's great news. And so I asked all the crypto lawyers on crypto Twitter, like, how about we just launch a class action lawsuit against the SEC on behalf of American citizens and retails for the millions of dollars in mistoken airdrops that we didn't get because we live in America? Billions. Billions. Billions. Did I say? I would have loved to have claimed my Celestia tokens, Gary, but I did not. I don't have any Celestia tokens because of Gary Gensler. Right. So I tweeted this out and I asked, hey, is that a dumb idea, crypto lawyers? Is this like possible? And a whole bunch of Twitter responses were like, yeah, I'd join that class action lawsuit. I would make money on DYDX. Yes. I missed Starkey. I missed DYX tokens, Celestial tokens. Tia. I missed all of these things. It probably cost me tens of thousands,

Starting point is 00:54:28 if not hundreds of thousands of dollars. I would jump in. Can we bankrupt the SEC? I would love to, right? I would love that. Okay. Well, apparently, Jake Trevinsky says, not your lawyer. Here's the thing. They have this thing called sovereign immunity, David, which is if you are a government

Starting point is 00:54:45 regulator, you have sovereign immunity. It's your Trump card. So we're not able to involve them in a civil case like this, unfortunately. Oh, wait, you've got my hopes up. What's the shit is this? He said, there's still. a chance, though, David. Jake Triminski, again, not your lawyer

Starting point is 00:55:05 is not legal advice. I'm sure he'd want us to say that. But you'd have to talk to your own lawyer to analyze whether this is possible. I'd like to think the legal system would find a way to deliver justice in a case like this, but the principles of equity only go so far TLDR probably don't. It's probably not

Starting point is 00:55:21 a good idea, unfortunately. Damn it. Damn it. I know. That was a fun little segment then. We tried, though. I got something else that's pretty fun. Yeah, go for it. Where in the world is Doquan? Do you remember? Last I checked, it was Montenegro, and then back to South Korea.

Starting point is 00:55:38 Am I remembering this correctly? Wasn't he in South Korea? No, no. So South Korea and the United States have been fighting over Doquan for extradition. Oh, they both want him. We both want it because he's a South Korean citizen, also an American, American citizen, maybe, but mainly her. I know he went to Berkeley, so he lived in America. I thought Stanford. I think he went to Stanford.

Starting point is 00:55:57 One of those. One of those. Yeah. Yeah. I have. Anyways, he is going to be extradited to the United States. It's about damn time. He has been in Montenegro since his arrest in March of 2023. And so he's coming home. Doe Kwan, coming home on shore. Wow. What's going to happen? I mean, will this be an SBF-style court case? Are we in for something like that?

Starting point is 00:56:24 It won't be as big a deal, I'm sure. They won't have the immediate fanfare. There's less like dirt to like dig up. And yeah, but like I would love to see some of the internal conversations inside of like the Tara Luna slack, for example, or whatever they used. You know, one of my reactions to this is if the U.S. wants you, like the U.S. is the boss of global finance. If they want you for financial crimes, they always get you. They get you. Right? Like people are extradited from all over the world.

Starting point is 00:56:54 Outside maybe if you live like Russia and China. Uh, there's no such thing as jurisdictions. It's just the U.S. Can I bring up something that's like, can I bring up something that's actually pretty adjacent to this, but still relevant? Yeah. I think this is worthwhile to know. This is, this is a very big deviation side quest.

Starting point is 00:57:12 Um, did you know that, um, China sold AI technology to Iran? And Iran has, uh, extradited a German Iranian citizen using AI facial recognition technology to find him. and they extradited him from Germany to Iran and is going to be executed in Iran. Wait, are you serious? Wait, so I lost the train here. So there's China, there's a German citizen and Iran. Right.

Starting point is 00:57:38 Okay. So China AI technology purchased by Iran. Okay. Iran uses that AI technology to identify a German-Iranian dual citizen living in Germany. That German citizen has been extradited to Iran and is set to be executed. Why? What are this German citizens?

Starting point is 00:57:57 and do what are the charges? Crimes against the Islamic Republic of Iran. Oh, wow. So are you? Who's liable for that? Why, why, why, yeah, what made you think of this? So, like, we're, like, AI, like, being talked about all over the place. We had Vitalik on to talk about, like, defensive accelerationism and how, like, AI can

Starting point is 00:58:18 be used in a very offensive capacity. And then we're just seeing, like, like, you know, AI is starting to become, like, an authoritarian tool. I thought, I thought this was far more theoretical. And I definitely appreciate Vitalik's foresight here, had no idea that this was actually already being done in practice. This is the reason that these power structures are kind of important. And like impress upon me is like the reason we are fighting so hard in the U.S. is because the U.S. is really important because they're like the mob boss of global finance.

Starting point is 00:58:49 All right? So like where do you where do you go? I'm not going to China. I'm not going to Russia. Do I go somewhere in Europe? Well, like, that's under the arm of the U.S. financial powers as well. Yeah. That's why it's so important to, like, fight it where we are.

Starting point is 00:59:06 There's also been, like, this balkanization going on inside of Web 3. Like, Circle is now no longer issuing U.S. E.C. on Tron. We're going to talk about Tether and Circle here in a second, but just, like, the spheres of influence are, like, becoming firmer, and they are permeating through Web 3 and AI is helping accelerate that. Let's get right to that story. So this actually surprised me this week. This is one of Circles VPs of Policy.

Starting point is 00:59:34 Caroline Hill, the caption from this tweet is really begging to Congress for the Treasury Department to go after Tether. And their banking partner, this is a U.S.-based banking partner, Cantor Fitzgerald. So this is Caroline Hill in front of Congress this week. Let's play the clip. This is Circle in front of Congress. I personally believe that no company should be allowed to reference the U.S. dollar without having those democratic values inside the company inside their U.S. dollar-backed stable coin. And so I think if Treasury thinks that it needs additional authorities to go over that, then I think this committee should consider that. So to those U.S. touchpoints, U.S. Financial Services Company Canter Fitzgerald reportedly manages Tethers, $72 billion portfolio of treasury bonds, giving him access to, U.S. dollars. Canter's enabling of terror and elicit activities across the globe is unacceptable.

Starting point is 01:00:30 Ms. Hill, given Tether's nexus to the U.S. financial system through Canter Fitzgerald, does Treasury already have the authority to take action? And what should we be doing about American regulated companies like Canter? I would think that the Treasury Department would have the authority to take action given this U.S. touchpoint, yes. And I hope that they were looking at this seriously given Tether's reputation as well as the data that we've seen that they're contributing to terrorist financing. Okay. So let's unpack that a little bit. So this is somebody who works for Circle, of course. So this is USDC and they're in front of Congress. There's somebody from Coinbase as well there.

Starting point is 01:01:11 I don't know what the Coinbase representative said, but sort of corroborated some of the things that Circle said. And they basically are advocating that Treasury, US Treasury, go after Cantor Fitzgerald, which is one of the brokerages that hold Tethers' Tee bills, essentially, because they are saying that Tether is not compliant with AML KYC, right? They're not compliant with kind of the regulations. Now, that is quite the charge because your Tether. That's quite the charge. David, you weren't on the episode because you were on a flight on your way to Heath Denver,

Starting point is 01:01:47 I believe. But I talked to Tether CEO, Pollo about this. And I brought up this commentary. And his perspective was, we are fully compliant. We freeze addresses all of the time. We, like, mint funds. Not only do they freeze addresses, but they freeze addresses quickly. There are more blacklisted tether addresses than there are circle addresses.

Starting point is 01:02:10 Right. He's like that we work directly with financial surveillance authorities, like, you know, the full posse of everybody's looking at this, like, chain alias. and also the FBI. And so he's like they are maligning us because they're trying to cut us out. This is, he says that this is a form of kind of regulatory capture, right? Tethers offshore.

Starting point is 01:02:33 This is 100% regulatory capture. This is the game that Circle has been playing like for better or for worse. They're compliant onshore circle, stable coin. And they're trying to like brand Tether as the uncompliant offshore. They are offshore.

Starting point is 01:02:48 They are offshore. are totally compliant by as far as I can tell. Two comments here below this video, one from Zach XPT saying, Treasury Department should investigate Circle for all the times they did not blacklist illicit funds when they had ample time instead of LARPing as the compliant centralized stable coin. And then also Bantag saying, disgraceful, she just mad Tetherblocks stolen funds within 10 minutes while her company replies a week after they've been laundered dry. Yow!

Starting point is 01:03:14 Some zingers coming in from crypto Twitter. this is 100% a narrative game that I'm not sure stands up. Yeah, I don't love regulatory capture attempts. And that's what this kind of seems like. I hope USDA and Tether kind of fight it out in, you know, like the free market way. But it looks like they're going here. You know, the stable coin wars are continuing for sure. Oh, related to that, by the way.

Starting point is 01:03:39 It does it. It's not clear that it's related. It seems related to me. Circle says we are discontinuing USDA support on Toronto. the Tron block chain. So, you know, there was about $300 million worth of USDC on Tron. So a very small amount compared to tether, $51 billion on Tron. So I asked Paulo about this and he said, yeah, they're leaving because they lost.

Starting point is 01:04:03 That was his take on it. This is more like a virtue signal than anything. So, yeah, there's not that much circle. And also they are saying they're implying that there's a bunch of nefarious activity on Tron so they can't be there. They're trying to make it up as a branding win. That's why it feels like it's kind of related because Tron is like and Tether are like in sort of the, you know, the evil axis, the sketchy.

Starting point is 01:04:24 And like maybe they are, maybe they're not. It's just like these are the kinds of games that are being played at this stage in the market. These are the kind of dirty games. I don't like it. All right. Well, let's get to raises on the week. This is a bankless ventures company that raised this week. So David and I, obviously, we think it's cool.

Starting point is 01:04:42 We're adding it to our disclosures page. It's called init capital. What is the knit capital, David? Yeah, and it is a money market on top of the mantle layer two. You know, Uniswap v4 hooks, where you have the base uninswap liquidity, and then you have hooks for expressiveness on top of that. Take that same pattern and think of In it as like compound or AVE with liquidity hooks on top of Init, so more expressiveness on top of capital.

Starting point is 01:05:08 So you have this base level of capital inside of the Init money market, and then people can build hooks to, add more, you know, apps on top of the In-It money market. And so, like, what could a hook do? You could do leverage-daking. You could do LST looping. You could do pair-trading, margin trading. And so think of just, like, you know, a base of a compound platform, money market,

Starting point is 01:05:29 and then just, like, apps, like maybe yearn strategies, for example, or just any kind of app that can be built on top of in it. Pretty cool innovation. We like the team. Congrats on the raise. David, last thing before we get to the meme of the week. I don't know if you saw this, the Reddit plan. Oh, this is dad time.

Starting point is 01:05:48 I'm getting ready. Oh, it was cool. Okay. So I, this is a dad segment? Not too dad. It's not too dad, but it's kind of, like, I thought it was interesting. So here's why. So Reddit is getting ready to IPO.

Starting point is 01:05:58 I know you're a Reddit user. I've been a ready user. Former Reddit user. Yeah, I used a lot less now. Now I'm more of a kind of a consumer. They're going public, okay? And this was big news in TradFi this week. So outside of crypto, basically, Reddit is planning.

Starting point is 01:06:13 to reserve a yet undetermined number of shares for 75,000 of its most prolific so-called Redditors. This is the content creators, the mods, you know, the people that really power Reddit, and they're going to reserve 75,000 shares. At first I thought, oh, well, that sounds like an airdrop. When you look into it, what they're actually reserving, it's more like an allow list, David. They're allowing the first, these 75,000, like, recipients of like Reddit.

Starting point is 01:06:43 points, let's call it maybe, they are allowed to purchase the IPO at the IPO price. That's basically it. And it's interesting to me, like, first of all, I guess good on Reddit for doing something, getting off zero. I mean, Facebook, like Twitter, none of these companies have actually rewarded the content creators in their network in any way. So at least some allowless participation. That's something. Of course, Reddit users, if they buy the IPO and stock price goes down, they could lose, these 75,000 could certainly lose. It's costing money. They could win if it goes up after the IPO price. But wow, imagine trying this in crypto, right? In crypto, like, users are demanding airdrops. If we are working inside of a network and the network does not provide

Starting point is 01:07:34 rewards for the work that we are doing, whether it's an Ethereum staker or whether you're contributing to like a network as a user or a content creator, we'll just leave. We'll just leave. we'll go to the network that does give us that. And so what I think is going to be interesting to observe over the next three to five years, let's say, is I think crypto is really going to move the social Overton window of requiring some of these established Web2 companies to give to their main users, their content creators, basically like the journalists, you know, and the curators who make it all possible, they'll have to move in that direction because I think those creators, those users will start to demand upside, and crypto will be a forcing function to that.

Starting point is 01:08:15 So sometimes I see the outstretched hand of Gimme AirDrop. We talked a little bit about that, and sometimes I see entitlement. And that's true. There are some entitled people who just want air drops for doing nothing. On the other hand, another way to reframe that is, at least we're pushing the Overton window towards forcing companies, like social network companies. Well, distribution towards the long tail. That's right.

Starting point is 01:08:36 That's right. So that was the take here. And like, kind of a crappy air drop. though. It's just a lot. I wonder how much of this is constraint by by just regulations. Can they actually just give away equity? Probably not. They probably can't do that. You're right, David. I'm sure you're right. This is not that I'm just like, oh, we'll allow like our Redditors to buy our bags. I don't think the SEC will allow them to do anything more creative than that. Yeah. And that's why we have to put you push on this on the technology side too and push on the regulatory side. David, we've got a meme of the week. What are we looking at this week?

Starting point is 01:09:10 This is our meme. And so I actually don't know. I think maybe a graphic designer at bankless me of this. Coming to a Walmart near you, we have two action figures, male crypto podcaster. This one's me. And here's Ryan, Ethereum podcaster. I got crypto podcast, you got Ethereum podcaster. Yeah.

Starting point is 01:09:28 Highly detailed. Highly detailed. Look at your jawline, bro. Yeah. That's a good looking jawline. That is not real life for sure. You're looking like Superman. Yeah.

Starting point is 01:09:36 I look like Ken. You look like Superman. Well, Walmart's a good place for these, David. So move aside, penguins. We're going to be there, too. You got to end with this. Of course, you can find all of our disclosures at bankless.com slash disclosures at any time.

Starting point is 01:09:50 And risks and disclaimers, you know, crypto is risky. You could lose what you put in, but we are headed west. This is the frontier. Not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.

Bankless - ROLLUP: $ETH 3k! | TradFi Stonks ATHs | $STRK Now Live | Yuga Acquires PROOF

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