Bankless - ROLLUP: ETH DENVER | SEC Fines BlockFi | Canada Freezes Protester Funds | Geopolitical Chess

Starting point is 00:00:00 Bankless never ever misses a roll-up, but then I'm going off to Eat, Denver. That's awesome, man. Yeah, so, guys, David is live. He is our Heath Denver correspondent right now. Hey, Bankless Nation, happy third week of February. It's roll-up time. David Hoffman, how you doing? Oh, my God, Ryan, it's the best week ever.

Starting point is 00:00:20 Not only is it the third week of February, but it is Heath Denver Week, which is what you can see going on behind me just a little bit. Vitalik just finished up his talk, and there's so many more talks later today that I'm really, really excited for. ETH Denver, as I've said before, holds a special place in my heart. So I'm excited to blast through this roll-up because bankless never ever misses a roll-up, but then I'm going off to Eath Denver. That's awesome, man. Yeah. So, guys, David is live. He is our Eth Denver correspondent right now. Before we get into kind of the headlines, what we're going to run down in the roll-up, give us a high level of like what's happening at Eith Denver over the next couple of days

Starting point is 00:00:56 and why it's important. Yeah, so today is Shelling Point, which is Kevin O'Walky and a few others. Day before Yth Denver event. The actual East Denver opening ceremony happens tonight at 5 p.m.,

Starting point is 00:01:08 which I am the opening MC for, along with Jonathan Mann, who's got some songs to sing, the song a day man. Oh, man, he's awesome. Yeah, apparently he just had,

Starting point is 00:01:17 I missed it, but he had a song about Vitalik, which was very catchy, so I'm going to have to watch that on YouTube later. But all of today is a bunch of really powerful talks, all in the theme of regenerative crypto-economics,

Starting point is 00:01:31 which is what Kevin O'Waki's favorite subject is. And that's all of today. I have my talk later today. And then ETH Denver kicks off tomorrow. People have been here for the last 10 days or so. Hackers have been hacking away. And just for just a little bit of context, the first ETH Denver I went to was 2018.

Starting point is 00:01:49 I think there was an ETH Denver 2017 before that. ETHMBER 2018 had something like 3 to 4,000 people. And that's when ETH price was like 600 coming out of the ICO mania. and then ETH Denver 2019, ETH price was like $100, except the energy and vibrancy of ETH Denver 2019 was like 50% bigger and stronger than it was during the ICO mania, East Denver. And there was like, I think another 8,000 people there.

Starting point is 00:02:16 And then ETH Denver 2020 was like even like right before the COVID crash, right, before like the liquidation came about 80. A bunch of people got COVID, right, in, at ETH Denver 2020. Not too many, not too many. that was ETHCC, but like, it was definitely there. And the energy at that ETH Denver was even higher, even, even like more vibrant. And then boom, ETH Denver, 2022, because we didn't have 2021 because of COVID. Heath Denver, 22, 15,000 people have tickets.

Starting point is 00:02:45 That blows my mind. 15,000 people. And so I'm assuming the vibrancy is about to be off the charts. I just got here and into the podcast room to record this rollout, but I'm about to go experience it for myself. I'm expecting, there's a lot of newcomers. And so, like, wow, all the previous East Denver's were a lot of, like, you know, the bear market, East Denver's, this is a bull market, East Denver, and so it's about to, it's going to be a little bit different. There's a lot of newcomers here. I'm excited to meet all the people, all the newcomers, and kind of see people where I was back in East Denver, 2018. And hopefully, so many new awesome projects get spun out of the inspiration that comes out of this.

Starting point is 00:03:22 Well, guys, if you see David at Heath Denver, make sure you print out your medium article and hand him a copy of your article. because that's what you did, your first eat Denver. You were like passing out pamphlets of your writing as a really cool story. Also, I also have my own POAP. There's people that have their own POAPs. You met me POAPs. And so if you meet me, I'll have a POAP for you that I met David. I met David.

Starting point is 00:03:45 Yeah. Well, I don't hold that POAP right now. You do not hold that POAP. Tons of people will hold that POAP without me. So hopefully I'll get issued that POAP at some point this year, David. And bankless listeners, we're going to probably follow up with some other content, other episodes on Eat, Denver. So you feel like you are getting in on the conference, even if you couldn't attend in person. We'll do that sometime next week.

Starting point is 00:04:12 But let's get to the roll-up subjects. Saturday night, live podcast on stage with me, Eric Voorhees and Kevin O'Waqi. The subject is transcending individualism with collectivism. So that's going to be a fun show. And that's just one piece. I mean, we'll have some other content coming out at ETH Denver for you, try to offer the highlights. But anyway, let's get to the roll-ups this week.

Starting point is 00:04:32 Because we have to. We can't not. We're going to talk about a few things. Number one, we've got to do a ranking of the top Super Bowl ads, David. A little game happened last Sunday. Crypto was all over. Maybe it was a crypto bull. And advertisers came out and forced.

Starting point is 00:04:46 We're going to rank those ads for you as well. The SEC is also finding BlockFi, $100 million. Is that bearish? sounds like it or is it bullish maybe it is maybe there's a bright spot around this also crypto prices are going up maybe tensions are easing in the ukraine with the russia situation we're going to talk a bit about that canada is freezing protester funds without a court order what does that mean what does that mean for crypto and then twitter just rolled out eith tips david wow jack is gone twitter's doing that we're going to talk about that too so those are some of the highlights that we'll get into in the

Starting point is 00:05:22 roll up. David, before we get into the roll up, we should talk about notional finance, all right, because what they are doing is super cool. It's a new D5 primitive that wasn't available a couple of years ago and now is in full force. Fixed rate lending. Okay, that means you can earn interest on your USDC, earn interest on your die, earn interest on your ETH, and your Bitcoin using this protocol. And it's not volatile. So you actually get to lock in a rate for up to a year point in time. David, what else you want to say about Notional? I mean, this is just putting banks to shame, isn't it? Like, effectively zero interest rates versus over 8% APY that you can get locked in for a year.

Starting point is 00:06:05 Like, this is just, it's just so easy these days to talk about how silly and unnecessary banks are. So this is the highest stable APIY rate that I've ever seen before, 8.4% borrowing, or you can also borrow and you can also lend. you can also lend stable in a stable fashion. So notional. Dot finance is a link in the show notes if you want to get started. Go check that out too, especially with the news of like BlockFi, getting fined and freezing interest rate accounts.

Starting point is 00:06:34 You can still do these things in Defi today. So this is a way to do that. You can check that out at Notional.finance. We'll also have a link in the show notes so you can see that. All right, David, let's get to the markets, man. What is Bitcoin doing for us this week? Bitcoin started the week at 44,000. It is currently at the lower price of $41,900.

Starting point is 00:06:56 Hit a high of almost $45,000. Some chop this week, but overall down 4%. Down 4% on the week. And did ether follow suit? What's that looking like on the week? Yeah, followed even more. So start of the week at $3,100 hit a low of $2,950. Its high was $3,200, and we are currently clocking in at $2,970.

Starting point is 00:07:18 Has dipped since I've woked up this morning. been a down morning so far overall down 7% no 3.5% on the week 3.5% on the week. Playing with that 3K number as well. It's like whenever it's above 3K, I'm feeling okay. When it's below 3K, I'm not feeling so great about the bull market. And it's just hovering around that. Like, you know, 3K is maybe the new 300 a couple of years ago when we were crab marketing around 300. It's funny though. You see the same trends in these markets. It's just like, 10x higher the next go around, right? Well, the ether at 300 meme only actually lasted for three months,

Starting point is 00:07:59 but I guess we've actually only been around 3K for a similar amount of time. The reference is that in 2017, ether was at like $300 for a really long time while the market just moved around it. Anyways, we're seeing it again. Fractals, fractals, that's what we always see in crypto. How about the ETH Bitcoin chart? What's that hanging out at on the ratio, the ETH Bitcoin ratio? Yeah, not too much of a story here.

Starting point is 00:08:19 You're currently clocking in at 0.071, so relatively flat on the week hasn't really done too much. Grab it out. Just crabbing out. How about the bed product? So that is one-third Bitcoin, one-third Eth, and one-third D-Fi. It looks like that's down on the week, as you would expect. No, it's flat on the week. Flat on the week. Started at 115. Ended at 115. Oh, wow. So exactly flat, huh? Yeah. That's funny. Okay. Let's talk about why the market is doing what it was doing. So I believe it was maybe last Friday, there was some breaking news about increased tension between Russia and Ukraine. We don't have to, we don't have time to get into all of the geopolitics of that. But earlier this week, crypto saw a price rise. And that was on the back of Putin

Starting point is 00:09:08 pledging to partially pull back troops from the borders of Ukraine. So a lot of geopolitical macro tension that's happening that is affecting markets. And of course, of prices as a result, seems like maybe some of that tension is easing. What do you think about this? Yeah, there was a statement that Putin made about how, like, genocide is currently happening in Ukraine, and it's like everyone was making fun of him. And it's like, everyone knew you were going to say that. Like, we already knew what the script was.

Starting point is 00:09:38 And now, like, we're at that part in the show. And so, like, this just seems like a bunch of, except for the fact that there's actual, like, armies and tanks, like, it's almost just a bad. joke. And so like his statements are like rocking in the markets, but also rocking the world, while people's like people's lives do hang in the balance while like Putin just flexes trying to get what he wants. And so it's really kind of like Putin's show at the moment. Like what's Putin going to do? I feel like it totally is. And for me, David, this meme sums it up. Okay. So this is, I think this is like from family guy. And for people who can't see it's like like

Starting point is 00:10:15 Putin pulling out some sort of weapon, like a gun or something that looks very, very harmful, and then being like, psych, nope, it's just, you know, it's just a hanger. It's something else. Yeah, right. Yeah, it's something else. That about sums it up for me. But you know what was interesting on the back of this, and I wonder if this is related. So this just was breaking, like as of 10 minutes ago as we're recording. Ukraine is legalizing Bitcoin and other cryptocurrencies. Very interesting, unprecedented. So they are on the borders of potentially being invaded by a foreign aggressor and what's an action that they take, not to outlaw Bitcoin and crypto, but to legalize it, something that most Western

Starting point is 00:10:58 countries and most countries around the world haven't been ready to do. I wonder if that is somehow related, right? It's like if Russia is going to invade their banking system, may as well have a credible, you know, neutral public money system to be. To be. sort of a backstop to all of that. What do you think? Yeah, if you're about to be invaded by an oppressor, you might want to lean into the financial system that sets you free. Like, the contrast there is, it's pretty obvious in my mind. Or, I mean, maybe this is just a coincidence, but like, I mean, no, they're kind of, Ukraine's kind of busy at the moment, and then they decide to pass a legalizing cryptocurrency law. So I feel like it kind of tells you their priorities.

Starting point is 00:11:39 And it's, I guess it's kind of cool. It's kind of cool. And of course, as we said before, right, when you adopt crypto protocols, you adopt crypto values. So this is Ukraine adopting a value of freedom for their country. Excited to see. David, let's talk about some ETH numbers because we can't not. And this is another fantastic analytics screen that David Mihal came up with. This is layer two fees. Currently my roommate at E. Denver.

Starting point is 00:12:05 Well, can you get him to throw in some other metrics that Bankless has wanted for a while? I'll drop in a request. Yeah. All right. So this is really cool. cool dashboard, it's layer two fees. How much are roll-ups paying for Ethereum security? Have you ever wondered about that? One day security costs. Arbitrum is paying 100K to get the security of Ethereum. What's so interesting about this, of course, these numbers will go up over time.

Starting point is 00:12:29 We expect, we expect, you know, chains like roll-ups to be the big users, the big consumers of Ethereum block space overall. But look at what they're getting for 100K in one-day fees. A massive amount of security. They're getting Ethereum. level sovereign nation state protection for their chain, and they don't have to issue tokens in order to do that. So if you contrast that with what many of the Alt Layer 1s who are going their own way are trying to do, they are issuing a lot of tokens in order to get security, right? Billions of dollars of tokens per year, high inflation, high token issuance. Most people don't look at those numbers, but of course, David Mihal has another chart for that where you could see it. So the

Starting point is 00:13:14 that's what's fascinating to me about this L2 fees tracker. And I'm glad we can we can see that data very clearly now. Any other takes from you, David? Yeah, something I've learned recently is it's hard to scale caring about decentralization. There's a core part of the crypto world that really cares about decentralization. But if we want crypto to scale to the world, more people are going to care about low fees. We've learned this in 2021. More people care about low fees. So do you care about low fees? Well, then you can go use Arbitrom, Optimism, D.DX, etc. But you know what those chains that give you low fees care about, those chains care about decentralization. So they give you high, low fees, and then they care about decentralization on your behalf in the background

Starting point is 00:13:53 where it's supposed to be. But do you know what's also cool is those chains actually care about low fees, all right? And rather than issuing their tokens and paying billions of dollars in token issuance to validators, they just have to pay $100,000 a day for Arbitrum to get Ethereum-level security. So I totally agree. It's like not. not the decentralization argument that will win over the masses. It's actually the economic argument, which says it's cheaper to run a layer two backed by the security of a main chain like Ethereum than to go your own way and create a new alternative layer one. At least that's the bull case for L2s, which we are bullish on. This is my take that was related. People say users don't care about

Starting point is 00:14:35 decentralization. I think it's such a myopic take, okay, because the future blockchain users, there aren't people, they're chains. To win in the smart contract wars, you have to sell a lot of block space to a lot of chains. Chains are the new users, and these users care about decentralization, similar to what you just said, David. This is another interesting stat. Number of Ethereum addresses holding 0.1Eath just hit an all-time high. I think this is a good marker for distribution. It's something that Bitcoin has promoted about the distribution of Bitcoins is a very good metric to see go up. Any thoughts on this? Yeah, I was wondering if this is including people that are holding 0.1-Eth on layer 2s as well as the Ethereum mainchain, because 0.1Eth on the

Starting point is 00:15:19 Ethereum mainchain is going to cost a lot to move to the L2s. So I hope those people are accumulating more because disproportionately that the transfer to an L2 costs like I think like 0.03 or 0.04. But like we do like the distribution. The dust gets expensive. The dust gets expensive, yeah. But we do like the distribution. Distribution is very good. Let's talk about this last metric. So somebody actually did the market cap of the Ethereum ecosystem. And I've never seen these numbers before. It just takes a little finangling to get to them.

Starting point is 00:15:51 We've seen, we of course know the market cap of ETH, right? Which is all ETH outstanding. I don't know what that is now, David. Something like, are we in the 250? No, it's like 300 billion, I think. It's 300 billion, something like this, okay? And then, but that's not the total market. $350 billion. So that's not the total of the Ethereum economy because you also have to add all of the ERC20s,

Starting point is 00:16:16 all of the synthetics on top of it. This chart doesn't even add the NFTs, which would be another layer on top of it. But when you add both Ethereum, the market cap of Ethereum and then all of the tokens built on top, you get to something close to $600 billion. So $585 billion at the time these numbers were computed. And that is the total value of all of the assets within the Ethereum economy, which is quite stunning. I mean, this gets to like nation-state levels. And I think this is going way higher, right? So I think there's going to be a time where Ethereum absorbed so much. We're in the, you know, double-digit trillions. In the next 10 years, I can easily see how we get to $100 trillion with when you combine eth and then all of the

Starting point is 00:17:05 tokens, all of the digital assets built on top of it. Any takes on this? Yeah, two comments here. It's actually a very, I think it's going to be a very interesting scientific question, process, analytics process to actually figure out the correct way to calculate this, the market, the value of all assets and tokens on Ethereum that aren't ETH. It's not an easy calculation. It's not just going up to coin gecko and summing the totals because not all valuations of all tokens are the same, right? Some tokens have significant outstanding supplies with low liquidity, and so their market cap is super inflated. So adding up all the tokens is not a trivial process. And that is going to be an ongoing scientific endeavor, I think,

Starting point is 00:17:47 for the rest of Ethereum. And then the other comment I have is this really shows the importance of the security of ether, the asset. We have ether, the asset, market cap, roughly matching the value of all tokens outstanding on it. Now, I think that means we have plenty of room for more value of tokens. I think something like 20% market cap of ether versus 80% supply market cap of the value of the tokens on top of Ethereum is about the right ratio. But you can't have something like 99 to 1 because that 1% of the value of ether is securing the rest of the 99% of the value of the token. So there needs to be a balance there. Yeah, you know, my take on that last one is it also depends on what sort of ERC20 token it is. So some ERC20 token it is. So some ERC

Starting point is 00:18:34 ERC20 tokens are super crypto-native, and they settle completely on top of Ethereum. There's no outside corollary. Whereas other ERC20 tokens, right, they are actually just representatives of dollars in a bank account somewhere, say, or, you know, stock certificates somewhere else. Not secured by Ethereum. Not secured by Ethereum. So it's a different settlement, right? Like, USDC is not completely settled on Ethereum. It's actually settled in a bank account somewhere. And Ethereum is just kind of. kind of the tokenized representation of that. So there's even more complexity there. But to your other point, too, imagine doing all of this, but then also trying to add up all of the tokens on various layer twos, which this doesn't even get into, right? It's going to be quite the task to put

Starting point is 00:19:20 all of this data together and to size the economy. But proportionally, you can see, if you just take ETH right now and all of the ERC20s, it's about the market cap of Bitcoin. Like, the economy size is the market cap of Bitcoin, right? Anyway, It's super interesting. This is why we think these things are more than just money systems. They're economic systems. They're like they have GDP. They have taxes.

Starting point is 00:19:43 They're like digital nation states, decentralized digital nation states. And it's really cool to see the data coming out about that. Economies in the cloud. Economies in the cloud. This is cool, David. I just think I know we routinely go over kind of like why buying and holding is the best and low time preference, paying your future. but like holding is such a skill in crypto that people really need to develop. And why don't you read out this tweet?

Starting point is 00:20:09 Because I think it proves that point. Yeah. So this is a rug pulling the dollar as a frame of reference. And instead using iPhones and ether to measure value. And so this is iPhone launch date costs in E. So we go like iPhone 6, iPhone 7, iPhone 8, and then how much ether it costs to buy those things at the day of the iPhone launch. So the iPhone 6, it costs you 690 ether to buy an iPhone 6 when it costs.

Starting point is 00:20:34 got released. iPhone 7, it only costs you 52, Ether. iPhone 8, it only costs you two and a half. An iPhone 10, 3.3, and an iPhone 11, 3.7. To where we are today at iPhone 13, which is 0.0, 0.2 for ether. So like, it kind of shows ether deflating. This is a deflationary asset. Granted, it only started actually deflating with EIP-1559 recently, but the demand for ether

Starting point is 00:20:58 and also the generalized promise of deflation in the future has made Ether a highly deflationary asset. this is that instantiated in a tweet. It's also kind of sad because now I'm regretting my iPhone 6th purchase. I should just bought Eith. Like, what the hell, man? Look at this. A really expensive iPhone eye, Ryan.

Starting point is 00:21:16 But this is really the way to look at it. It's all opportunity cost when you denominate in something like Eith. And I think it's another lesson for us. Like, you don't have to be a brilliant trader in crypto in order to do well. All right. The verbs you need to know, the two verbs, the only two verbs you need to know, buy. and hold. Two verbs you need to know, okay?

Starting point is 00:21:37 Never sell. Leave the trading for later. Never sell. Maybe the third might be steak, okay? So once you buy, once you hold, learn how to steak. And if you get real fancy, you could do stuff with like notional and you can start to lend and earn interest that way. But like, trade?

Starting point is 00:21:52 That's the advanced stuff. Like, you don't even need to do that. That's a hobby. Trading is a hobby that you don't have to partake in. Stop buying iPhones. Buy more E. That's what I learned for it. Pretty soon, they'll be denominated in just Guay.

Starting point is 00:22:06 You know, if you're way, you'll be able to buy the iPhone 20. All right, David, we've got some more stuff to cover on the releases side of things. Of course, we're going to get to the hot news items. But before we do, we want to thank the sponsors that made this episode possible. If you're going bankless, you need Metamask. This is your tool to unlock the world of Defi without giving up custody over your private keys. Metamask is both a secure in-browser wallet and also a secure bridge for your hardware wallet. You can now trade tokens on any decks or aggregator.

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Starting point is 00:23:58 Bankless is proud to be sponsored by Uniswap. Uniswap is a new paradigm in asset exchange infrastructure. Instead of a cumbersome order book system where trades are matched with other humans, Uniswap is an autonomous piece of software on Ethereum that lets you trade any token at the current market price. No human counterparties or centralized intermediaries, just autonomous code on Ethereum. Input the token you want to sell and receive the token you want to buy. The Uniswap Grants program is accepting applications for grants. Do you have something of value that you think you want to contribute to the Uniswap ecosystem?

Starting point is 00:24:30 No matter how big or small your idea is, you can apply for a unique grant at uniswapgrant.org and help steer uniswap in the direction that you think it should go. Thank you, Uniswap, for sponsoring Bankless. All right, guys, we are back with the heart releases of the week, David. We have to start here because Bankless just released a new podcast on Bankless Podcast. It's my favorite thing. It's my favorite thing. Bankless release another podcast. What is this one, David?

Starting point is 00:24:55 This is Green Pill. This Green Pill coming out of Kevin O'Walky. And so Green Pill is all of the... about regenerative crypto-economics. Regenerative crypto-economics comes out of degenerative crypto-economics, and so Kevin O'Waqui is obsessed with public goods and how we can make people's externalities in the world regenerative rather than, you know, their externalities be positive

Starting point is 00:25:17 rather than negative. Negative externalities are like when factories spew, like, carbon into the air or dump sewage in the water. That's a negative externality. How can we make social structures and social systems that have positive externalities, as in when we use them, the world actually gets better. It's like an upward spiral of economics. And so Kevin O'Walky is exploring this subject with his brand, brand new podcast, Green Pill, which we are

Starting point is 00:25:41 helping him produce out of the bankless ecosystem. Oh, who's this guy right here. Vitalik Boutyrin, who just, this is his image of the talk that he just gave here at a shilling point. Nice. Level 99 warlock. Yeah, exactly. So that's the first podcast, first podcast with Vitalik Buterin, the warlock himself. and he's also got like eight other podcasts already lined up. There's Carl Floresh. She's also got Glenn Weil. And so I'm really excited for this podcast. It's really just true to the core of what it means to be crypto.

Starting point is 00:26:11 And Kevin is also just a fantastic speaker. And I think he's going to become a fantastic podcast co-podcast host. And I'm excited to listen to it. I think this is a good podcast to send to like your more collectivist-minded friends, right? Maybe people more on the kind of the traditional. left, anti-authoritarian left. People who think crypto's hyper-capitalists and don't want anything to do with it. Yes. And this is very, you know, it gets out of the fixed pie mindset that some people fall into in crypto, where it's just like, let's just grab as much crypto as we can and hide in our bunkers

Starting point is 00:26:47 and let the world screw itself over, right? This is no. How do we enter the world and how do we improve it? So I think it's a good message for people who need to hear that. And Kevin gets really practical. I mean, there are projects right now that are helping reduce climate change, and there are mechanisms that we can employ to make the world a better place. So Kevin's going to be covering all of that. What's the action item, David? Should people subscribe? How do they subscribe?

Starting point is 00:27:12 Is that like RSS? Yeah, it's an RSS feed. You can type it into, you can type Green Pill into Spotify or Apple, wherever you get your podcast. Ryan, I just sent you a link in Zoom. You can actually pull up a QR code so people watching on YouTube can just say, yeah, in Zoom. So you can actually just scan this QR code and it'll take you right to the podcast

Starting point is 00:27:32 wherever you want to subscribe to that. Fancy magic right there. Oh man, this is, remind me of a Super Bowl ad, David. Yeah, that's exactly right. That's exactly right. So yeah, subscribe to Green Pill. Also, if you want to do us a favor

Starting point is 00:27:44 and give it a five star rating and review so we can get this thing bootstrapped, that'd be fantastic. That's Green Pill of the World, guys. That's awesome. That's what Crypto can do. All right, oh. I almost disclosed my meat of the week.

Starting point is 00:27:58 Ignore that, ignore that. All right, so let's get back to you the next item on the list, which is Erbit, a layer two roll-up. Let me find the link here, David. What is Erbit, though, while I'm looking for that? Erbit is a self-sovereign server. It's something like you can take a hard drive and pop it out of your computer, and then you can pop it into a different computer, and your same computer is, like, ready to go right out of the box.

Starting point is 00:28:25 And there's much more to it than that. It's actually a very complicated subject. But it's a self-sovereign corner of the internet. It's a self-sovereign operating system that you can make for yourself. And so kind of like a MySpace page for the self-sovereign cryptographic age, where your MySpace page is actually like a hard drive and it's also your computer at the same time. It's a crazy subject, actually. It's a crazy subject.

Starting point is 00:28:49 It's super complicated as well. But like the net of it is it's trying to reduce reliance on AWS and all. of the centralized servers and like redesign the internet. It's almost a new operating system for decentralized internet, if you will. And what I remember from this project is Bitcoiners have historically been super excited about it, as they should be. And I think any decentralization maximalists has been pretty excited about it. I haven't seen much practical use of it yet, but maybe that's because the technology is still super early. But none of that's the news. The news here is that they are launching on a layer two roll up on top of a theory.

Starting point is 00:29:25 So Erbit on a layer two roll up, David. What's the tweet say? Yeah, it says it's a technical triumph and it cuts gas costs by almost 200x, making planets more affordable and transaction fees nearly trivial. Planets is a Erbit technical term. They use the solar system terminology to describe the ecosystem. Like your, I think your server is a planet, for example. And so they are now integrating their ecosystem with a layer two roller. that's really cool to see. Also, launching this week is Lobby 3. So we had Andrew Yang on the podcast,

Starting point is 00:30:02 who was really advocating for crypto in Washington, and he said he was going to do something in the space. He said, you know, basically that classic line, if you're not at the table, then you're on the menu, right? And referring to the crypto industry, how they needed to participate in Washington lobby groups, or not crypto would die, but like innovation in the U.S. would have a much harder time. And so he has launched a lobby group to actually bring the voice of Web 3 to Washington is what it says. And you can join as a member of this group. What's super cool here is, David, they've got membership levels. And of course, the proceeds go to the lobby three lobby effort, which is pro crypto pro pro web three making some actionable differences. And the membership levels,

Starting point is 00:30:48 they're all denominated in Eath. Okay? So you become a level one member at 0.0.0.0.0.0. ETH right now. And that gets you access to all sorts of various things, Discord access, status updates, AMAs with Andrew Yang, events and merch, voting, and all of the proceeds go to a lobby group. It's really cool to see actually politicians and lobbyists raising using crypto-native tools right now, using ETH's money. When Andrew Yang came on our podcast and he said that he wanted to be the politician that represented the crypto industry and represented.

Starting point is 00:31:24 the Web 3 industry. A lot of people said, yeah, he's just saying that for votes. Are you sure about that now? Yeah, are you sure? Because, like, look at this. Andrew Yang's also coming to East Denver. He's going to be here on Friday. So I'm going to take Andrew Yang to a party. It's going to be great. Okay, wait, even people who complain about, he's just saying that for votes. Okay. What do politicians do? Are you upset? We're going to give crypto-friendly politicians more votes. Right. Like, that's what's going to happen. So be a skeptic about what.

Starting point is 00:31:54 what his true motivations are, is you have to evaluate what he's doing and what this, what organizations like this are doing on, on their merits. Are they pushing a pro-Crypto, pro-Web3 agenda for it or not? And if they are, again, they adopt crypto protocols. They dropped crypto values. But you're going to party with Andrew Yang tonight. Is that what's happening? No, on Friday. Tonight is Thursday night. So Friday, yeah. Yeah, he's coming to Denver and he's going to be just walking around with the rest of the Web3 people. I was talking to Carly Riley, host of Overpriced JPEGs, and Andrew Yang gets a lot of resistance from other people in the political spheres.

Starting point is 00:32:31 Tribes. Tribes. Like, oh, he's not Democrat enough or, oh, he's not this enough. But apparently, Andrew Yang just really vibes with the crypto folk, and the cryptovoke really vibe with Andrew Yang. Something about being, like, some sort of futurist with shared values about, like, we all know the future's coming, and crypto people know that, and Andrew Yang knows that.

Starting point is 00:32:49 And so I'm just very happy to have Andrew Yang on Team Web 3. Look, man, I mean, what politician without speaking at an event actually comes as a kind of a hobbyist to an esoteric, like, conference like this? You know, Heath Denver, that's pretty cool to see. I don't even think most of the people here know he's coming. I just know that because Carly told me. He just signed up. Yeah. Hey, guys.

Starting point is 00:33:14 Wait, is that Andrew Yang? What the hell? That's exactly what's going to go. That's awesome. All right, what's RAC doing? This is really cool. Okay, RAC. Andre, we read out his tweet thread about why NFT skeptics need to reconsider last week.

Starting point is 00:33:28 He's been in crypto for a very long time. He's released the RAC social token over a year ago. And now he is introducing RICOS as an operating system, version 0.1 at website rAC. RAC.m, a Web3 enabled portal for all RAC token holders. And so this is RAC, I think, really giving a huge upgrade to his social token and the concept of social tokens at large. This is a portal. If you have his social token, you can go here and do things if you have the social token. And so he's giving utility to his social token.

Starting point is 00:34:01 And I think he's pioneering the way into what it means to issue a social token. That's really, really cool. Really, really cool. Super smart guy. Grammy award-winning artist. He'd probably listen to a bunch of his music. He's like a collaborator on, you know, tons of fantastic things. over the years. And yeah, this is, look, this is the birth of social tokens. It comes from creators

Starting point is 00:34:20 creating new experiences like this and experiments like this. It's super cool to see. If you want to learn more, we did to meet the nation with RAC a little bit, like almost a year ago, it feels like. So that is on the bankless YouTube. Well, it feels like we should have them back on to explain some of this to you. Another experiment that's going on in the bankless Dow world, I saw this launch last week, is the Bankless Academy. All right? So this is the ability to start your bankless journey. Bankless Academy is on a mission to introduce 1 billion people to the exciting possibilities of cryptocurrency. So basically, it's a way to connect your wallet, go through various tutorials like wallet basics,

Starting point is 00:34:56 for example, intro to defy, all of these various lessons, and earn things at the end of them. So whether you're earning a badge at first or maybe in the future like tokens or specialized NFTs, again, this is an example of crypto pays you to learn about crypto. And this literally is what is happening at the Bankless Academy. just launched, but a great concept to see coming out of bankless Dow. This website is sick. It looks super sick. Right? This is the very kernels of how we disrupt universities. Universities, in my opinion, have devolved into just fake credentialism, and, you know,

Starting point is 00:35:31 if you want to get really on the end to things, extortion out of students. The new universities of the Web3 Digital Age are online courses that establish legitimacy with employers and, you know, employers. and then you can go and show it's like, yo, I've done every single lesson in the Bankless Academy, look at the tokens that I have on chain to prove that credential that I have. And so this is a new type. This is literally decentralizing the concept of a university. Bankless Academy is like pioneering this path.

Starting point is 00:36:00 They're not going to be the only ones to do this. Any sort of domain of knowledge can have some sort of on-chain Web3 credentialism based on some sort of course. And if that course is good, the builders of that course is good, their tokens will be more desirable to have in your wallets to prove that you know what the course offers. So really cool stuff. It's funny. I mean, what else is a university diploma, right? It's like pretokenized. It's a credential. It's something you're given in real life. And those are traditional credentials. Maybe the diploma of the future is a collection of badges and something like this. Yeah, really cool to see how that develops. David, let's get on the raises section. This is another group that is doing something similar,

Starting point is 00:36:40 rabbit hole. They are paving the path to web three contributors. as well. They've got sort of an academy where you can earn things by taking lessons. And they just raise $18 million from a set of VCs. Really cool to see that get funded the series A. Rabbit Hole is another. We've done a lot of articles on Rabbit Hole in the past at Bankless. And I encourage folks that are trying to learn, trying to level up in the space to go check out what they are up to. Any else, any other thoughts on that, David? Exactly what I was just saying. This is this is a new thing, well, not a new thing. This is a new path of Web 3 getting explored by both bankless Dow and Rabbit Hole. And look, $18 million raise. People are taking this seriously.

Starting point is 00:37:24 Congrats to Rabbit Hole. Another big raise is the Rainbow Wallet, which we've talked about in the past, NFT-focused wallet. It raised, let's see, what are the numbers here? Big numbers, I think. Some are in the article. 18 million dollars. Another $18 million. Yeah. led by Reddit co-founder Alexis O'Hanian and his venture firms 776. We are actually having Alexis on the podcast sometime in March and record with him. I'm going to talk about this and the other thing he's up to in the space.

Starting point is 00:37:57 Wallace is getting funded as well. And what's this, David? OpenC with a venture arm. That's what's next. What's this about? Yeah, OpenC Ventures. So, like, apparently when you raise hundreds and hundreds and hundreds of millions of dollars, you actually can't figure out what to do with it other than reencers.

Starting point is 00:38:13 invest it into the ecosystem. So an NFT grant, uh, grants, uh, grants program coming out of open C. So it's, it's actually just genius. Like they built, they built open C in order to inspire a, a bull market in NFTs because of OpenC basically. And now they have all this money because of all their success. And now they are just sending that money back into the ecosystem. And or because they need to, you know, bootstrap more products. So it's, it's so circular. It's just such a great move. Nice flywheel. Nice flywheel. And it does seem like OpenC. I mean, Coinbase has had venture set up for a long time, many years. It does seem like OpenC is trying to be sort of the coin base of NFTs

Starting point is 00:38:52 and expanding into the space to take that market share. This is Circle, the creators of USDC and other things. They just had a valuation and a SPAC deal of $9 billion. Pretty impressive valuation. So many unicorns in crypto. I don't know, we have dozens at least by now. Any other thoughts on this? Yeah, I don't know too much about SPACs, so I probably shouldn't comment.

Starting point is 00:39:17 But $9 billion is a lot, so congrass the circle. Yeah, big valuation. Guys, as soon as we conclude the raise section, we have to ask the question, what are these companies going to do with all of their money? The question you just asked, David. Yeah? What comes next? Get a job.

Starting point is 00:39:36 Get a job in crypto. It's time to get a job. Get a job in crypto. Get a job in crypto. All that money. It has to go somewhere. And it's looking for talent, right? Crypto is building itself out.

Starting point is 00:39:46 This is the early internet. The skills you develop in crypto now will be used by these companies, and they will pay you for those skills, both salary rolls, jobs and dows, all sorts of things. A great way to get plugged in is at the bankless job board. That's at bankless.pallet.com slash jobs. I'm going to read out a few, David. Don't have time to read them all out.

Starting point is 00:40:05 But senior product engineer, moment ranks. Community manager, DYDX, a governance growth lead at DYDX, business operations and finance associate, DYDX, marketing associate, DYDX, an accountant, smart defy, a Web3 engineer, Goldfinch, a senior go Rust engineer,

Starting point is 00:40:22 syndica, smart contract lead, StarX. There's even more. If you want to just passively explore these opportunities, you can submit your profile to the bankless talent collective and talent seekers will go find you. Ryan,

Starting point is 00:40:38 I actually want you to go back to the to the jobs board and go down to the Maker jobs because... You want to keep dancing? I want to keep... Well, no, I want to read these out, actually. Well, there's actually only two of them. Operations Manager at Maker Dow and lead financialist analyst at MakerDAO.

Starting point is 00:40:52 MakerDAO was just out of MakerDAO party last night. Maker Dow is making some moves in this space. There's going to be a bunch more jobs coming, I believe, onto this job board. So those who are interested in Maker and want to lead Maker into this version of the sub-dows and working for the sub-dows, stay tuned for all those jobs coming out of

Starting point is 00:41:09 or Dow coming soon. Meanwhile, people behind you are like, who's this crazy guy and why is he dancing? On webcam. Yeah, what the hell? Well, we do have an only fans update, but this is not that. It's not that. Maybe that joke gets cut. No, no, no, no, it doesn't. Let's move to news, guys. Top Super Bowl ads. David, let's give our rundown of the top Super Bowl ads because crypto had a bunch of ads. People are calling this the Crypto Bowl. That's what we predicted. I think we predicted like seven-ish or so, and that's a the number that had crypto in it, mentioned crypto, but I want to get your ranking on the top crypto ads. I know you saw some of these live, others you didn't, but you watched afterwards.

Starting point is 00:41:50 Give us the ranking, man. What were the best ads? Yeah, so in my opinion, coming in at number one is FTX with their Don't Miss Out featuring Larry David. And it's basically just a speed run through history of all the technologies that have changed humanity, the wheel, the light bulb, indoor plumbing, more stuff than that I can remember. And every single time it's Larry David into different outfits going to like, eh, that's not going to work. And it's a very entertaining out.

Starting point is 00:42:18 It was easy to watch. The production was fantastic. And, you know, there were so many probably groups of people, families, friends where, like, there was a mix of maybe the kids were pro-crypto and the adults were anti-crypto. And, like, all the family were watching this ad. And, like, all the anti-crypto people

Starting point is 00:42:34 had to watch this ad and be like, oh, I'm Larry David. I'm the one. that thinks that it's not going to work. And so this was not only a very entertaining advertisement, but it was just putting to shame all the naysayers about crypto saying, like, you're the person that's holding us back

Starting point is 00:42:50 about this brand new technology. The positive PR that we got out of this advertisement, I think was super, super good. Yeah, I totally agree. I totally agree. Somebody's going in there and saying, oh, Dad, that's you. That's you.

Starting point is 00:43:03 Yeah, that's you. You're Larry David in this commercial. Number two, let's, what's, your pick for number two, David? Number two is the Coinbase QR code, which is like, I've had this idea of this, uh, advertisement for a while. It's just like, what happens if you just put a link or a QR code on screen? Wait, they stole your idea, David? Yeah, that was, I had this idea first. And so, you know, the, the rainbow DVD, like, screensaver where the DVD moves around the screen? Classic. That's what they did, but with a QR code. And it was so successful that it crashed

Starting point is 00:43:32 the app within minutes. And they got so many signups. And, and, and, and, so like, ballsy. Pretty ballsy, but also, it's just like, thinking, like they paid $14 million for this advertisement, but they had to pay zero to actually produce it, whereas FTX probably had to pay something like tens to $20 million to dollars to produce the actual, yeah, right? And so, like, Coinbase, this is like a $10 advertisement. All they had to do is pay for the time.

Starting point is 00:43:58 And I think it might be coming up next, Ryan, but if you wait, the QR code actually does go up to the corner. It's going to go, yeah, it's going to happen. Yeah, it's going to happen. Please, please, please, please, please, please. Yeah. Of course they do it at the very end. Yeah.

Starting point is 00:44:12 So that's why Coinbase came in at number two. And those were, in my opinion, like, the number one and number two advertisements were, like, very far in the lead. And the three and four were kind of met. I didn't know. So I saw this live, and I was like, QR code. Should I do it? Should I do it? And I did it.

Starting point is 00:44:27 And I was like, oh, Coinbase. And what it does, it prompts you to set up a Coinbase account and it gave you like $15 worth of Bitcoin or something. So it's just like an immediate account sign up for them. Some people weren't fans, right? Some of the non-crypto people felt it was a little weird or scammy. But you'll get to maybe those takes later. The third was what, David? What's coming in clocking in number three?

Starting point is 00:44:51 E. Toro, which is emphasizing it's social trading. And so it was a bunch of people all floating off into the sky, grabbing other people to go with them because we're all going to the moon together. I kind of liked it because it had, we all going to make it vibes. Also, there was a tip of the hat to abort ape. There was a tip of the hat to Doge. Frank Sinatra's Fly Me to the Moon was playing in the background. It wasn't specifically about crypto, but it just had like good crypto references with big wagmi culture built into it.

Starting point is 00:45:16 So, you know, coming in at number three. Nice vibes. Good metaverse vibes as well. Number four was this from crypto. Oh, I spoil it. Who is this from? Number four, crypto.com featuring LeBron James. And basically, I didn't really get this one.

Starting point is 00:45:29 Like, it was basically LeBron James and somebody else. I actually don't know. Talking about how like, should I do it, should I not do it? and LeBron James is like, you got to do it because fortune favors the bold, and then boom, crypto.com. And so, like, yeah, crypto, like, fortune favors the bold. You got to take risks. But, like, the advertisement had nothing to do with crypto.

Starting point is 00:45:46 Is this about LeBron James? I think maybe he might be talking to a kid version of himself? I don't really know. Whatever. Yeah, but, you know, the cool part is it's LeBron James. And so anything that he endorses, he's got a fan base that's going to go check it out. So you get some brand association. Crypto.com is doing Matt Damon earlier as well.

Starting point is 00:46:03 So they're pulling in the celebs here. A ton of honorable mentions as well, like Bud Lights had nouns in them. Meta, what was this? It was meta. Facebook, yeah. It wasn't a crypto ad. It was just advertising the Oculus Quest, but you all know. We all know that at the end of meta is a bunch of crypto stuff once they finally get there.

Starting point is 00:46:25 Yeah, it's really cool to see. What were some of the reactions you heard? Because here's one I heard from like non-crypto people. Crypto people were, of course, very excited about this. But I read a tweet like the morning after saying, oh my God, crypto is thirsty at the Super Bowl. Like these takes like if crypto was so great and there's so much money to be made in crypto, why does the industry need to run Super Bowl ads? Why does it need to even advertise itself?

Starting point is 00:46:51 And what's funny to me is I feel like Larry David answered that same question in the FTX advertisement, which is like an answer to all of the skeptics. some people are seriously going to be skeptical of crypto all the way to $100 trillion, David. Like, they're just going to not believe it. And it's going to cost them like money. Like we have more traction and crypto is so much more de-risk than it was like three years ago and five years ago. And there's a certain segment of the population. They're just, I don't know, born to be late adopters.

Starting point is 00:47:27 I don't know. Can't get past some of their objections to actually dig into the space and ask the question of of why, you know, 60, 70 million Americans now hold crypto, what it's doing in the space? It's always going to be skeptics, I suppose. Any other thoughts on that? I mean, the big takeaway I have is crypto is about money. Like, it's an industry about money. So, of course, we have the money to pay for Super Bowl ads. And also, when all of these big gargantuan companies run Super Bowl ads, it does a favor to the entire industry. And eventually, it gets more people to buy more crypto assets, which makes the crypto assets go up in price,

Starting point is 00:48:02 which funds our ability to make more Super Bowl ads. Yeah, well, that's the criticism, though, David. That's just they're trying to get you into their pyramid scheme. You know, the Ponzi game. And that's why they're advertising. If you squint hard enough, everything's a Ponzi scheme at the end of the day. Or a Ponzi game. Anyways.

Starting point is 00:48:19 Thank you. Most people don't squint is the problem. Look, here's another big thing after the Super Bowl ads. I think this is the other big thing of the week. So the SEC just find BlockFi for our. $100 million. And this is a combination. Some goes to the Fed, like 50 million, some goes to the States. Just some context. So BlockFi is a centralized crypto lending provider. So you can lend money to BlockFi. You can lend your crypto to BlockFi. And you can also earn interest on BlockFi.

Starting point is 00:48:51 And if you do it through USC, the rates are something like 8 to 9 percent, like very high. You can't get these types of interest returns in a traditional bank account, of course. Now, last summer, the SEC famously blocked Coinbase from issuing their Coinbase lend product, which was a similar product. And Coinbase said, hey, hold on, BlockFi is doing it. Everyone else is doing it. Why are you telling us we can't do it? And they eventually decided to withdraw that product entirely.

Starting point is 00:49:24 So now the SEC is coming after BlockFi in a heavy-handed way, a $50 million fine to them, a $100 million total to the states. And so when I first saw this, like the question in my mind is, oh, my God, what does this settlement mean? Is this the end of centralized crypto lending? It's not, and we're going to get into that. But anything else we should include in this story at the high level before we get into some of the details? No, I think you covered it pretty well. but anything else to say? Well, so here's, I guess, the take that I was questioning is, is this BlockFi settlement on Friday the end of centralized crypto lending in the U.S.,

Starting point is 00:50:03 interested in your thoughts? A bunch of people reached out to me, crypto lawyers and such, and BlockFi gave their take, and they actually spun this as a big win. A big win for BlockFi. They called this a landmark resolution with federal and state regulators. So $100 million seems like a massive fine for this sort of thing. But the flip side, says BlockFi is we are getting clarity on a pathway for crypto interest securities. So what BlockFi has done, I believe, is anyone who had a crypto interest account still gets to keep their crypto interest account. Right now, they are not allowing new signups on the crypto interest account. So they've disbanded all new signups in the U.S., but they will transition

Starting point is 00:50:46 those crypto interest accounts to a SEC approved version of the same. account. And I don't think this is quite an ETF. It's something, something different. But on the other side of this, what it will allow them to do is offer an SEC approved interest earning product to all Americans. And what the SEC gets out of this, what they wanted out of it, was more investor transparency, which I actually think is a great thing, particularly for centralized lending providers. Like, what is BlockFi actually doing with the funds in order to generate that return? It's not defy so we can't see it on chain, so it should be transparent. So there's actually more than a silver lining, I actually do think that this is good news for crypto. I 100% agree that the net outcome of

Starting point is 00:51:34 this will be positive. My big qualms with this is that there's always with crypto, there's always like the first through the door phenomenon where if you're the first one through the door, you are the one that gets shot. And so BlockFi got fined with $100 million. A hundred million dollars, we as an industry, thanks to BlockFi, so thank you BlockFi. We, We just finally just paid off the SEC $100 million to get clarity. That's how much clarity costs, $100 million. And so this is why people, the more radical takes of the world, think that the SEC is just this extortionary agency out of the government,

Starting point is 00:52:09 who's like, oh, you want clarity before, if we don't send you to jail, pay us $100 million, and then we'll give you clarity. I mean, BlockFi ate the fine, and now we have clarity, and so we get to progress forward and take the W. But for that W, it costs us $100 million. Yeah, absolutely. I think that is a good take. So net net, this is good news for crypto.

Starting point is 00:52:33 I think it's good news for U.S. investors. But there is some downside with it, right? So one is what you said. Like if you're trying to compete against a block file, look, the SEC just made the startup cost even higher, right? So it's kind of creating this incumbent industry. The other lesson I think- regulation does. That's what the SEC does. They just create incumbents.

Starting point is 00:52:53 You know, on the flip side of this, like, investors in these products and purchasers of these products could use some additional transparency. So that, I guess, is the good side, maybe the counterbalance. But one lesson it teaches crypto is, like, never ask for permission. Yeah. You can't. We learned that from Uber. Uber taught us that lesson. Don't ask for permission. You have to go do it, and then you have to blitz scale, so you're large enough to pay these exorbitant fees or you're never going to make it. The other question to me is, and this is maybe the more concerning bit, so we'll see, what does the SEC do with defy now? All right? Because we got defy lending, right, which is trustless, we would say. It's

Starting point is 00:53:36 on chain. It's verifiable. So you could see the assets. You could see the risk profile. But is the SEC coming for defy next? And what's their action going to be in the territory of The other concern I have is, of course, the U.S. now has completely different rules. So BlockFi can operate in all of these other countries, like, as they had been before, but now the U.S. has this very specific carve-out regulatory apparatus. And, of course, it wasn't Congress that passed the law. It was like the SEC kind of passing a law. So, I mean, we had our conversation with the congressman, yeah, Tom Emmer earlier this week.

Starting point is 00:54:14 and it's just a little bit like, Congress, come get your boy. You know, like, they shouldn't be the ones creating these, essentially, you know, pseudo laws. They shouldn't be creating rules. They don't create rules. Right. So, like, legislative branch, get it together. Right. Okay.

Starting point is 00:54:33 Regulators should not be legislating this and taking bribes, right, in order to, like, move these things forward. That's not the way this industry should work. and it's up to Congress to take some action to rein some of these regulators in. And that's what Tom Emmer was saying in our conversation with him earlier this week. Yeah, no, these are all the right takes. And I think this is going to be something that's unpacked for the next few weeks. So anyways, once again, thank you to Block V for taking the bullet through the door. Yeah.

Starting point is 00:55:02 And let's move on to some other nation state actions while we're on it. So Trudeau and Canada, they're having some problems with protesters these days. There is a convoy COVID protests going on in Ottawa going on in Canada. What caught my attention is not necessarily that protest, but on the back of this, there is now a mandate from Trudeau and those in power in Canada to freeze protesters' bank accounts. Absolutely ridiculous. This is qualming freedom of speech. Whatever you want a speech about, whatever you want to talk about, you have that freedom of speech

Starting point is 00:55:41 because we value freedom of speech. They are freezing bank accounts to people that are expressing speech. That's crazy. It has a lot of downstream effects. So regardless of your opinion on the protest, and bankless isn't here to take one side or the other on the protest, I think, like, here's the quote, with no need for a court order,

Starting point is 00:56:00 this is from the BBC reporting, banks will be able to freeze personal accounts of anyone linked with the protest. Anyone linked with the protest, freeze your personal bank account, okay? And the take is this time it's their protest. Maybe you're not protesting. Maybe we don't care about this.

Starting point is 00:56:15 Next time it's yours. What if it was a crypto protest, David? They started freezing bank accounts. What if it was a free speech protest? Well, actually, those people would be okay. Right? But, like, I mean, what if it was something that you care deeply about? What if next time it's about, like, runaway inflation?

Starting point is 00:56:34 Right. And, like, the labor market and, like, energy costs soaring. And, you know, something else. The price of food. government shouldn't be able to freeze people's bank accounts without a court order without due process yeah governments and politics should not be intervening in finance and money those are separate concepts and the government is using the banking system to silence political dissent that should not be happening ever it should not be happening ever and you know people will say well the protesters

Starting point is 00:57:03 did this and they did that like let's just talk about the precedent zoom out zoom out let's talk about the precedent this sets. And you know what? What's interesting to me, David, is crypto is not impervious here. So the finance ministers and the financial regulators in Canada are actually, it's being reported, blockading certain crypto wallets. So they are coming up with, there was a fundraise going on in Bitcoin. Thirty-four different crypto addresses that contributed to this fund raise are now being blacklisted by FinTrack, which is Canada, FinCENCEN financial authorities. And so what that basically means, David, is like,

Starting point is 00:57:44 if you're a crypto bank, your exchange or something operated in Canada, and you receive a notice from FinTrack, hey, don't receive deposits from any of these accounts, don't let any of these accounts withdraw anything. They're being blacklisted. Then you have to abide by that, or it's illegal. Right.

Starting point is 00:58:01 They're treating you as if you exploited some contract for billions of dollars. Like, that's the same treatment. So, okay, that's, That's a big problem. And of course is the reason, I think, David, for the bankless movement. This is the reason for defy. This is also the reason that Bitcoin can't solve all of our problems. If it's just Bitcoin and the only thing you can do on Bitcoin is just move money from one place to another and you can't trade, you can't actually convert to other assets, you can't lend,

Starting point is 00:58:30 you can't borrow. And the entire banking system is built on top of centralized custodian banking, we got a real problem. And that's why we need defy. That's why we need uniswap. It's unstoppable protocol for trading. That's why we need lending and borrowing protocols. That's why we need layer two so we can transact with low gas fees. Like that's why we need defy. I've always felt like, and I think this is continued proof that just having a non-sovereign store of value without scalability at the base layer and without decentralized finance doesn't actually produce a new financial system. it's like just more of the same because there's all of these choke points. And the existing bankers and the existing government structures will squeeze the necks of these choke points

Starting point is 00:59:16 until it starts to resemble the exact same system we came away with. That's my takeaway. That's exactly right. I think this next story highlights what some of the government regulator response is going to be to this sort of thing. Treasury officials says stable coin issuers must be banks to ensure security, to ensure financial stability. Some representatives, however, said the move would crowd crypto-native stablecoin issues, issuers out of the market.

Starting point is 00:59:43 Yes, it would. But that is Treasury's answer. Just everyone become a bank. Let's go back to the old system. Same story here. This is what we're seeing with regulation. Regulation is pulling as much of crypto as they can into their fold. But also at the same time, what makes me optimistic is that at the same time,

Starting point is 01:00:01 crypto is getting better at more stuff. We have so many more products, and that's allowing us to be more crypto-native while also appeasing regulators at the same time. They're never going to get the wonderland stuff of the world under their fold, the anon developers of the world. That's strictly going to be crypto-native. But they're going to put like circle and, you know, tether, and they're going to bring those under the fold. And maybe that's enough. Maybe that's enough. Yeah.

Starting point is 01:00:24 And I do think that the big story here is that the world governments have moved beyond ignore crypto. That was the first decade in crypto. It's just like ignore. It's not going to have happened. Too volatile. You know, it's stupid. It'll never work. Now they're in the camp of getting educated and actually starting to do things in crypto. And that'll be a double-edged sword. Sometimes it will be good. Sometimes it will be bad. An influential policy body just warned this is the FSB. They are compiled, I believe, of the IMF. It's sort of a nation-state regulator body. They just warned that Defi may shake the stability of the global financial system. They put together a report. I read some of it. Their section on defy is kind of interesting. You can see them getting super educated on defy. They talk about the privacy, which could be sort of a threat and concern from a state

Starting point is 01:01:14 surveillance perspective. They talk about the permissionless nature of defy protocols. They very much don't want defy to exist. Like they would rather it not exist. But now that it's here, they all have to grapple with what they're going to do about it. And they're still in the phase of infancy where they're going to be. They're moving from Ignore, and now they're getting educated on it. And we'll see what comes next.

Starting point is 01:01:37 I feel like much of this, though, David, is incumbent protection. That's maybe what the FSB and IMF are primarily concerned with. It's not world financial stability. It's stability of the incumbents, the existing control system that they most care about. And this is just a meeting in the middle. Like, crypto is making nation states move closer to crypto stuff. by making them compromise. We saw that with the SEC.

Starting point is 01:02:04 And then also, the nation state is using their powers to make crypto compromise to nation state regulation. So there's a meeting in the middle. But also, we still get our crypto-native stuff. That's right. And meanwhile, we're getting some big adoption as well. So Twitter just added Ethereum wallet support

Starting point is 01:02:21 to its tipping feature. I never thought I see the day. Well, Jack leaving Twitter, do you think that's related as all? Of course, absolutely. Yeah. Yeah, so as soon as Jack, the CEO of Twitter, left, all of a sudden Twitter started rolling out all of these NFT features. Now there's a feature for Ethereum tipping.

Starting point is 01:02:39 Some people are like, well, it's stupid because eith gas prices are too high. But of course, you could implement this with any eth address across any EVM compatible chain, whether that's a side chain with lower gas fees or a layer two, which is obviously the future. And it's cool to see Twitter adding this now, not just being kind of ETH maximalist blinders. about this entire space. I'm still kind of skeptical as the whole tipping use case. Like, tipping in Twitter, like, does that really go hand in hand? It could be a building block.

Starting point is 01:03:11 It could be a building block for something better. It's something, but, like, people don't even tip in U.S. dollars on Twitter. Right. Like, why would they do so in crypto? It's probably just, you know, bad product market fit. It's kind of like, you know, buying Starbucks with your cryptos. Like, that's the last thing that'll come. right. David, let's get to some NFT stuff. Why don't we leave with this? What's this? Oh gosh. Only

Starting point is 01:03:35 Fan launches verified NFT profile pictures. My take on this is that this is coming off of the heels of Irene Dow. The Dow that the Irene made. Kicked off the Simp-Fi season. And then also OnlyFans was like, oh, Twitter verified NFTs, Irene Dow, there's something here for us. And so now OnlyFans is just generating like, bagillions in revenue, is using NFTs probably to help their customers, their clients, get more money from their viewers, from their users. Like, OnlyFans is about taking money from customers who want to see stuff, and then NFTs just make that even more expressive, I guess? Like, we'll see where this goes.

Starting point is 01:04:20 Look, OnlyFans are creators after a fashion, so that's the creator economy. Once again. David, what's happening in the Cryptopunk world? Cryptopunk, the biggest crypto punk sale ever for 8,000 ether, $23.7 million. Silly. An alien crypto punk, the owner of this crypto punk owned this, but I think bought this crypto punk in something like 2018 for like a couple ether so. So like we can verify that on chain.

Starting point is 01:04:46 I don't know if those numbers are right, but I think bought it in like 2018 for like two or three or four ether or something. So, you know, a very casual like 4,000 X in ETH terms while Ether went from $100,000. to $4,000 or $3,000, where it is now. So GG to the seller, Gigi. Most impressive trade I've seen this year. I can safely say that. Exactly what Ryan said.

Starting point is 01:05:07 The best thing you can do in crypto is hold. Well, it's also another thing, which is like, are NFTs a good way to generate eat denominated returns? If you buy the right NFTs, that could be a strategy. Am efforts, huh? Yeah. How about them MFERS? I don't know.

Starting point is 01:05:22 What's the next crypto punk, David? Tell me. Oh, God. Well, don't make me. Don't make me say that, but I mean, I've got my money where my mouth is. Size of the NFT market, though, okay, is only 1% of crypto's $2 trillion industry. This is a really cool board with, it's called NFT Go, which shows you the NFT market cap, which I've never seen before, is about $16 billion.

Starting point is 01:05:46 I'm not sure what this all this includes, but still a tiny fraction of crypto's market cap size. And a lot of room for growth here in collectibles. And it just goes to show how loud NFTs are. NFTs have completely changed the entire conversation about what crypto is and has generated so much love and so much hate, and it's just $17 billion. Defi, like the ERC20 market cap that we were looking at earlier, is like $400 billion, and no one talks about defy. It's the loudness of NFTs off $16 billion of market cap is insane.

Starting point is 01:06:20 Yeah, punching way above their weight class from a cultural presence perspective, way above their market cap and weight costs, but also like so much room to grow here if it's only 1%. Let's move to some Bitcoin stuff. Fidelity is launching a Bitcoin ETP. I believe this is in Europe, and this is kind of like an ETF equivalent

Starting point is 01:06:39 for those in the U.S. That's what an ETP essentially is. And it's going to be the cheapest crypto ETP in the world at fees of 75 BIPs, so less than 1%, which compares quite nicely to GBTC, which is in the U.S. over here, 2% management fees if you're getting into that product. Any thoughts? No thoughts. No thoughts. No thoughts. We still need our Bitcoin native ETF and then our ether

Starting point is 01:07:06 ETF. And it would be nice if the SEC wait in on that sometime soon, but I feel like I've been waiting for that forever. David, in Altcoin stuff or Alt Layer 2 things, Tara just signed a $40 million deal with the MLB for the Washington. This is a sponsorship deal, getting crypto into the sports scene yet again. Any thoughts? I mean, this is, we've seen this before. We've seen it again. Like, there's only so many sports teams in MLB leagues and sports leagues that, like, crypto can buy. And so far, we're doing all of them. It's kind of funny to me, though, there's an element of, like, is it weird for, like, layer ones to advertise? Is it weird for protocols to advertise a little bit? Like, TCPIP never had to advertise. Yeah. If you're a decentralization maxi, then yes, yes, it is weird that layer ones to advertise. ones are buying sports teams and advertising deals. I do think it's normal for layer twos. I do think

Starting point is 01:08:01 it's normal for execution layers. So I expect the arbitrams of the world and the starkwears of the world to follow suit at some point in the future. There was also a big vulnerability this week in Coinbase and a near-miss, near disaster, near catastrophe. Update us on that, David. Yeah, so this tweet went out from Tree of Alpha who said, anyone, can anyone here get me a direct line with someone at Coinbase, preferably management team or possibly blind? Armstrong himself. I'm submitting a Hacker 1 report, but I'm afraid this can't wait. Can't say anymore either. This is potentially market-nooking. Asking for Brian Armstrong's attention on Twitter, it's like everyone wants Brian Armstrong's

Starting point is 01:08:37 attention on Twitter. And no one really knew why. But this tweet circle around is like, and everyone in Discord and Telegrams, you got to take it seriously. You got to take it seriously. And so this is a little bit outside of my technical capacity. But what I think happened was that After this tweet happened, Coinbase paused advanced trading. So they had the advanced trading features. And so they paused all trading on that. And they said technical problems. And then moments later, it had been resolved.

Starting point is 01:09:07 So it didn't take that long. What I think happened was that a technical glitch in the Coinbase system, servers, I don't know, was allowing people to enter trades that shouldn't have been or just make trades with fake prices. and maybe Coinbase had this exploit where these trades would go through. And so what that means is the market-nooking aspect of this is a lot of oracles and Defi use Coinbase as their price feed. And when you can submit fake trades with fake prices into the system, like it's not, you're not, they're not being able to buy like Ether or Bitcoin for not at the right prices. You might have just, Coinbase might be reporting bad prices to the rest of Defi.

Starting point is 01:09:47 And that's what it could have caused cascading liquidations. this hacker, not hacker, like white hat hacker, I guess, found it and raised the alarm, and Coinbase answered the call and fixed it in a moment of minutes and apparently saved us all from a Black Swan event. So thank you, I guess. Wow. Collective sigh of release. Important to note that this wasn't like a hack of Coinbase's custody solutions, right? It's cold storage or even it's hot storage. It's their order book. It's their order book. Yes, which could have been bad too. Binance, in another Crypto Bank News. Binance is removing its name from the blockchain ecosystem formerly called

Starting point is 01:10:24 Binance chain. It's now being called B&B chain, which is a little branding exercise, I think, to sort of separate Binance the exchange from the, I guess, like the control or the perception of control that they are the ones behind. Yeah. Even though it probably doesn't change anything fundamentally, I mean, finance still runs B&B chain, don't they? Yeah. The last like three things we've talked about Binance on the last three roll-ups have all been like PR and branding things. So that's interesting. Yes. We are maybe some point having CZ on the podcast be a good question for him. Like what's real? What's decentralization theater? That's probably not an alluring question for him to bring him on, but that's a question that I have in my head. David, another thing

Starting point is 01:11:09 is interesting is all of the banks that are now investing in crypto blockchain companies. That's why at some level, I feel like it's too late for the IMF. It's too late for regulators. Like even their banks are capitulating. It's like, guys, you're supposed to be our friends. You're supposed to be the insiders. And you guys are offering crypto products and buying up equity in crypto companies too. This is a list.

Starting point is 01:11:33 Look at this massive list of all of these banks that are now in crypto in blockchain. They now have investment offerings. ING, UBS, BBVA, MUFG, whatever that is. Citibank, Barclays, JPM, JPM, JPM, JPM, BlackRock, all of them, the banks are here. Right. My take here is this is a reverse Moloch or Moloch for good, where like because one of these banks is getting into crypto and generating revenue and making money from all the

Starting point is 01:11:58 crypto offerings, all of the banks have to offer crypto. And when all of the banks have to offer crypto, then everyone is easily onboarded to crypto. And then when everyone's easily onboarded to crypto, we no longer need banks anymore. And so like Moloch is forcing all the banks to, like, accepting the offer. for crypto products, just legitimizing this bankless industry. If you don't understand Molok or don't know what it is, listen to Slang Molok episode. It's a very foundational concept. It's about coordination.

Starting point is 01:12:24 But this is Molok for good. This is game theory at play, right? It's basically what you're saying, too. A game theory forces them all into crypto. Something we predicted last week, David, just happened. What just happened? Yeah, so the insane lunatics who hacked the 2016 Bitfinex hack and then tried to become like internet rappers.

Starting point is 01:12:47 Netflix has already greenlit a series on this. And so the article says... It's a Tiger King type movie. Yeah. Netflix is giving the Bitcoin-heighted couple of the Tiger King treatment, which is I guess some sort of like

Starting point is 01:13:01 crazy people doing crazy stuff, and we're going to make a movie about it. So BitFinex hackers, getting a movie. Yeah, I don't know if it's a movie or maybe it's a show. A series. It's going to be like a Tiger King style series. I can't wait.

Starting point is 01:13:15 Like now we get like our, it's going to be so cringe. I can't wait to watch all of it. I can't wait to not be in it at all. I want to distance myself very far from whatever this series outputs. Guys, we will be back with the takes of the week and what we're excited about. Of course, the meme and moment of Zen. But before we do, we want to thank the sponsors that made this episode possible. Living a bankless life requires taking control of your own private keys.

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Starting point is 01:14:34 the Polygon ecosystem has turned into a blossoming metropolis of defy activity. Transactions on Polygon are quick and cheap, allowing users the freedom to achieve their defy goals, all while being economically anchored to Ethereum. But Polygon isn't just the proof of stake side chain. The Polygon team is building a suite of scaling solutions, including Polygon Hermes, Midin, Nightfall, and Zero, all with different design choices in order to be optimized for all possible crypto use cases. If you're a developer who wants to build on the Polygon ecosystem, go to the link in the show notes to check out their fantastic documentation.

Starting point is 01:15:06 And if you're a user who just wants to experience fast and cheap defy, you can bridge over your ETH or other tokens and start playing around with any of the thousands of applications that are available on Polygon. Alchemix is a Defy app that offers self-repaying loans that lets you spend money and save money at the same time. Alchemix allows you to deposit the Dye stable coin into its vaults, which earns some of the highest yields that DeFi has to offer. You can then take a loan from Alchemics of up to 50% of the deposited die, and that loan automatically pays itself back from the yield that is generated from your deposit. It's a savings account that the bank's don't want you to know about. Alchamix also has ETH balls available so you can get a self-repaying

Starting point is 01:15:46 loan that's denominated in ETH. Coming up in Alchimix V2 is a bunch of cool new features such as credit delegation, multi-chain expansion, and Dow revenue sharing and vote boosting. Alchemix lets you get your interest payments on your deposits paid to you up front. Check out the power of Alchemics at alchemics.comx. And make sure to join their extremely vibrant discord if you want to participate in governance or have any questions about the project. Guys, we are back with the fresh takes for the week. I'm going to keep it short because David's got to go somewhere for Eith Denver. But why don't we start with this one?

Starting point is 01:16:17 What's the take, David? People aren't mad that NFTs are scams. They're mad that they did everything society told them to, and yet they're still unemployed and drowning in debt. While college drop out to make 10x their annual income by flipping memes, NFTs are a violation of people's perception of fairness. This is why we tell people to get a job in crypto. This is where the shenanigans happen.

Starting point is 01:16:38 And I get it. Like people, it's exactly right. There's this cognitive dissonance. There's like, God damn it, I've been grinding for so hard for so long. And these monkey pictures are going for millions. What the actual F is going on in the world right now. And at some point, like, I understand the cognitive dissonance. Maybe this is an exercise in meditation and accepting and mindfulness.

Starting point is 01:16:58 Lean into it. I know it's crazy. But like, you can stop grinding and just get into crypto. Not a guarantee. Like, you also have to grind in crypto. You don't just magically win in crypto. crypto, but like good things happen, the more you get into crypto. So this is great.

Starting point is 01:17:14 I think this take is 100% right off, right on, and worth reading again. They're mad that they did everything society told them to, yet they're still unemployed and drowning in debt. Get a mortgage. Go to college. Get some debt. Get your degree. Yep.

Starting point is 01:17:29 Try the path. Like, even become a teacher, teacher salaries, all of these things. Like, the traditional system has really failed a lot of people. And so they're mad and they're taking it out on people who are flashing their NFT. and their crypto wealth around. And I get that. Like, I totally understand that. It's like, it's kind of part of the populist movement that undergirds crypto, quite

Starting point is 01:17:47 honestly. But yeah, at the same time, I think this is a lesson for a lot of people that just think they can do everything that society tells them to and, like, not question. That worked in the 50s. In the 50s and 60s, that worked. Mm-hmm. And it no longer. It no longer works.

Starting point is 01:18:07 you have to continuously reinvent yourself. You have to continuously level up and learn and educate yourself on what's next, what's happening. You can't just take what they tell you as the way the system works and the way the world works. You have to constantly and continuously learn and level up. And that's very much what the bankless program is about, what the journey is about, right? It's like a bunch of people collectively going on a journey to try to figure out this industry together and become self-taught. All of the people in crypto are two things. Number one, curious. Number two, self-taught. They learn it themselves because they go, they seek out this information. And I understand a lot of people don't have the time to do this. They're just so stuck in the

Starting point is 01:18:49 grind that they can't even surface their head above water to actually start to understand this space. And my empathy, right, I have a lot of empathy for people in that position. And yet, if you are listening, this is the way to do it, right? You've got to get out of the prescribed recipes for success and actually figure out how this stuff works. It's an important lesson for us. All right, David, take us into this take. What is it? Yeah, this is from Chris Berniske. Bitcoin is like a mirror. It's hottest narrative reflecting what society needs the most.

Starting point is 01:19:22 And this is coming off of the heels of Canada, freezing the bank accounts of people doing, offering political dissent. And so he's retweeting a tweet that says, Bitcoin in 2020 to 2021, inflation hedge narrative while we had rampant inflation. Bitcoin in 2022, censorship-resistant narrative while we have government's freezing bank accounts. So pick your narrative because we got them all. And the crypto is coming to take over the world, and it's because it's got an answer to everything. And so in 2020 to 2021, our problem was inflation. Boom, we have a 21 million supply.

Starting point is 01:19:57 2022, we have freezing bank accounts. boom, we have censorship-resistant money. Bitcoin is what you need it to be. Yeah, and I think that's definitely true of all of crypto. Look, man, light on the takes this week. That's because you're busy, we're busy, but I got to ask you before we sign off. I'm about to sign off. Well, okay, that leads into what are you excited about this week, David?

Starting point is 01:20:19 Oh, Ryan, I'm about to go talk at East Denver. I'm about to be on stage. It's a dream come true to actually being able to talk at East Denver. I've been working on this talk for a month now. I'm going to finish off my slides in the next like five minutes. So that's what I'm excited about, Ryan. What is it talking about? You can't leave us hanging.

Starting point is 01:20:35 Oh, crypto is here to set you free. And it's all about how cryptography puts power in the hands of the individual. Web 2 and TradFi concentrate wealth towards the center. But Web 3 and Defi pushes wealth out towards the periphery. What happens when we have social structures that enable us rather than extract from us? So that talk will be available on, probably on the bankless YouTube, definitely on the Eath Denver YouTube, and we'll figure out how to put that on on podcast feed somewhere or another. That's awesome, man.

Starting point is 01:21:05 Are there any other talks that you're really excited about over the next couple of days at Eath Denver? Well, I sadly miss Vitalik's talk, but I'm definitely going to go and rewatch that one. But the whole rest of today's Shelling Point talks are really, really stacked. I'm just so excited for all of them, Ryan. Awesome, man. What are you excited about? You know, it's going to be weird, but I'm at a lot. actually excited about this block five thing that happened with the SEC. And I think some people see this as a compromise. It's like not a good thing to crypto. Some people see it as a loss. And I get that perspective. But I also feel like the broader perspective is this is a concession from governments. So the big picture here is crypto is playing this multi-decade game of chess with nation states. A multi-decade game of chess. And some people will look at the chess moves in the

Starting point is 01:21:55 and be like, yeah, that was a bad move that puts your piece at a disadvantage. So people see it different ways. But when we zoom out, this was more of a win for crypto than the SEC. Because if you go back in time five years ago, for instance, the SEC, a nation state regulators, nation states as a whole, did not want this type of product to even exist. If you ask them, hey, can we go make this thing? it's going to help consumers get lower interest rates, they would say, no. Our traditional financial system does that perfectly fine. Thank you very much. Please leave us alone. They didn't even want

Starting point is 01:22:34 to do this sort of thing. And crypto forced their hand. How did it force their hand? By onboarding a whole bunch of users who actually wanted the product. By building something useful. Winning hearts and minds. Winning hearts and minds, delivering some utility. And now the SEC's like, oh, shit. Well, I guess we got to try to salvage this thing and get some control out of it. And so maybe from the SEC's vantage point, they won a battle here, but I don't think they're winning the war. Like if you ask them, if they want this product to exist, they probably would have said no. And now they're forced into providing a way to onboard more people to crypto. So in the game of chess, this is yet another move that puts the nation state in the defensive posture and pushes crypto forward. And like,

Starting point is 01:23:18 this is going to play out. It's just not a year thing. It's not like we're going to be done with it this year and this is the final answer. It's going to play out in all sorts of ways. It's central banks, all sorts of regulators, all sorts of nation states in a multi-decade game of chess. That's what's happening here. You know I'm a sucker for chess metaphors. This is BlockFi retreating a piece, retreating a horse a knight, into a more defensive position so it can attack later. So we're giving up on one angle of attack. We're going into defense mode. and we're going to be able to attack from a stronger position later. Yeah, I totally agree.

Starting point is 01:23:53 Totally agree. All right, Dave, let's get to the meme of the week. We'll talk this week. Let's do it. All right. Oh, I just killed it. Oh, no, oh, no. Hold on.

Starting point is 01:24:01 Shift command T. All right. Okay. This is the meme of the week, and this is the guy telling the girl who doesn't want to hear it. No, it's called a blockchain, and it means the monkey is actually mine. And that's the meme of the week. That's awesome. That girl's like, what the, what's going on here?

Starting point is 01:24:24 Guys, this has been our roll-up, ETH Denver, special edition. Thanks for logging on, David. We're going to get you the moment of Zen in just a minute, so stay tuned for that. But before we do, I got to tell you about this disclaimers. Of course, Bitcoin is risky, ETH is risky. None of this was financial advice. You can lose what you put in, but we are headed west. This is the frontier.

Starting point is 01:24:45 It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot. he was just a kid and that's not even the coolest thing that the talent you don't did. That's it, that's a whole song. Thank you much. Hey, we hope you enjoyed the video.

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Bankless - ROLLUP: ETH DENVER | SEC Fines BlockFi | Canada Freezes Protester Funds | Geopolitical Chess

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