Bankless - ROLLUP: Ethereum Foundation Sells $100M? | Telegram Founder Arrested | SEC Targets Opensea

Starting point is 00:00:03 Bankless Station, it is the last week of August. It's time for the bankless weekly roll-up. Telegram founder Pavl Dorov was arrested in France. Why? What are the charges? What happened? And what does it mean for the future of privacy with encrypted messaging apps? Also, does the Ethereum Foundation need to be a little bit more transparent when they send $100 million of ETH to Cracken? And why does Vitalik hate Defi?

Starting point is 00:00:24 Or does he maybe not? We'll shed some light on all of this drama. Also, another week, another nasty gram from our friend at the SEC, Gary Gennel. What lucky company is joining the ranks of companies that are in the targets of Gary Gensler and the SEC? Somebody got a Wells notice. Place your bets. Consider which awesome, compliant U.S.-based company is now receiving a well's notice. Place your bets.

Starting point is 00:00:50 Think about it. We'll come back to this later on the show. Also, consider Gary Gensler's feelings on Pokemon cards and NFTs. Does he think there's securities? And speaking of NFTs, you know, Trump's got a new NFT program. He's rolling out. It's like the fourth edition of the Trump. We'll talk about that.

Starting point is 00:01:04 And the Maker Dow rebrand into Sky is underway, so we will give our takes and all the information about the change from Dai to USDS and MKR to Sky. Also, Sony introducing their Ethereum layer two built on the OP stack. Where did this come from? Why does Sony need a layer two? And also really bad news for men in the crypto dating department. Yikes, you guys aren't doing so hot. But before we get you into all of it.

Starting point is 00:01:33 You guys. I'm married, okay? Are you talking to? I don't want to talk about it. I don't want to talk about it. Okay. You don't want to be included in that department. All right, we got before we begin in,

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Starting point is 00:02:23 All right. Shall we get into prices around? Heck yeah. So Bitcoin price in the week. What are we looking at? Bitcoin price is $60,700, up a half a percent. So call that flat. currently at 61,000 at the end of the week.

Starting point is 00:02:35 East Price started the week, 2,600, down 1% to 2,590. We lost $10. Flat. Call it whatever. So flat. Pancake flat. And on the ETF inflows or outflows,

Starting point is 00:02:49 we are actually on inflows as of the last yesterday. So for the first day in two weeks. You're celebrating one day of inflows, net inflows for a period. We are on a one day street. week. Okay. Could be also two at the end of today. Could be two. The day of recording on Thursday. So yesterday the 28th, we had $5.9 million of net inflows, 8.4 million into BlackRock, 3.8 million out of gray scale. Fidelity got 1.3 and everyone else is basically still. I mean, there's no way to sugarcoat this. No way to sugarcoat this. The eth inflows haven't been great. ETH ETF inflows have not been great yet. So we're still at negative. I'm still holding up hope. It's still early. It's still under a month. It's still under a month.

Starting point is 00:03:34 Did you check out Bitcoin this week, too? It had some pretty red days. Like the 28th and 27 this week. Oh, wow. Bitcoin is at a zero day streak. Yeah. Well, okay, so the last four days, the 23rd, 250 in, 26, 200 in, 27, 127 out. The 28th, 105 million out.

Starting point is 00:03:52 Yeah, so some rough days. Maybe those diamond hand institutional buyers aren't so diamond hand, David. They're getting a little bit. It turns out all the ETF buyers are just us in our retirement accounts. Turns out that's just our money. Well, thanks to Cracken for those charts. Obviously, we use Cracken Pro and the Cracken Exchange for all of our crypto trading, don't we? And thanks to Cracken for sponsoring bank lists for as long as they have.

Starting point is 00:04:16 Let's turn it to Layer 2s for a quick update. Base is absolutely running away with Layer 2s from this metric, which is monthly active user addresses. So this blue line is base and it is just climbing. The only one that's going up. Yeah, hockey stick growth. What are some of the stats here? Let me see. 13.4 monthly million active addresses up 20% month over month, up 1,300% year over year.

Starting point is 00:04:47 That's 13.4 million monthly active is compared to Arbitrum's 3.5. Linnaeus 1.3 in Optimism's 1. There was a question of how much of this is like Sybil. so Travis Kling asked in this chart, isn't this skewed by civil farming, industrial grade, civil farming, air drop farming, what if I told you 10 entities controlled more than half the wallets?

Starting point is 00:05:08 And token terminal replies. That has been the entire paradigm of all address-based metrics. Sure. It's always been like that since I've ever gotten into crypto. We've known this. Yes, yes. And also, the data that we just quoted is from token terminal that tries to screen some that noise out.

Starting point is 00:05:23 So the reply here is the above. I did not know that they did that. Yeah. Good old token terminal. They're building behind the scenes. The above chart takes into account unique fee-paying addresses. It does not consider whether those addresses are controlled by one or many IRA entities. So they do unique fee-paying addresses, but I guess they don't always know.

Starting point is 00:05:42 Oh, but they do say, please share a list of the 10 entities and we'll disclude them. So they find out. Well, they're calling Travis out. So he's like, oh, so you know those 10 addresses? Yeah, yeah, yeah. That's monthly user addresses, which is one. metric. Another, though, is total value locked. And here, Arbitrum still reigns supreme. They are crushing it. Gargantuan. Yeah. 15 billion dollars in Arbitrum, followed by Bases 6, followed by Optimism's 5 and a half, followed by Blass 1.5.

Starting point is 00:06:13 Yeah. So, you know, another metric to look at, of course. Where's our friends are? There are five layer twos with a billion dollars. Mantles could the next one at $1.1 billion. Let's talk about trad markets for a second. Jerome Powell is signaling that rate cuts are all but inevitable. This is kind of what we expected, but he made a speech this week. And he noted a few things that inflation has dropped from a peak of 9.1% in mid-2020. Do you remember it was at 9.1%? That was crazy to 2.9% last month. And both are edging close to the 2% target, of course. And he adds this, we will do everything we can to support a strong labor market. So notice that, the strong labor market, I think that indicates that they're shifting their focus from inflation to

Starting point is 00:06:59 jobs reports and jobs numbers. The labor market, he also said this. This is a direct quote. With an appropriate dialing back of policy restraint, there is good reason to think that the economy will go back to 2% inflation while maintaining a strong labor market. It's basically saying, I'm going to dial things back. Inflation's going to be fine, and also jobs will be fine. So that's next. That's going to happen in September. It's all but inevitable. I think a lot of macro folks are saying inflation is no longer the thing that you should be looking at with respect to Fed policy decisions. You know, everyone's trying to prognosticate and try to predict what Powell and the Fed are going to do next. But really, the numbers we should be looking at are coming out of the jobs reports.

Starting point is 00:07:39 So jobs numbers are now the new inflation, like more important in determining the Fed's next move. So I feel like we might need to incorporate some jobs numbers into this, you know, Tradify Update macro section moving forward. So I asked, like, what are the best job numbers to track? So maybe we'll include some of that moving forward. So that's what's happening on the Fed side. It looks like easy money is back on the menu. Also, this happened towards the beginning of this week,

Starting point is 00:08:04 which is where we saw some price increases across the board. Each got almost up to $2,800. Bitcoin got up to like $65,000. So we saw the price action respond here, both inequities and in crypto markets. But I think people are like my suspicion is that they are going to cut slowly. It's going to be a slow move, not whiplash because they learned their lesson last time. It's going to be a slow cut. So people got really excited, but then they realized that, you know, okay, it's going to be the easy rate cut cycle era, but it's going to not happen all at once. That's my indication of the market. Anyways, more into the crypto side of markets. Cable coin. Supply is almost, almost at all time high. It almost grew a whole 1% over the past week to $169 billion, almost there.

Starting point is 00:08:52 USDT Tether has grown 28% this last year from 91.5 billion to 117 billion. USDC grew 44% this last year from 23.8 to 34.4.4. Stable coin supply, to me, paints the floor for fundamentals and valuation for all our other crypto assets. As this number goes up in price, to me, the floor price of crypto assets also goes up in price. So just really strong growth out of the stable coins. Yeah, it's good for DeFi. David, you want to hear a fun fact? Always.

Starting point is 00:09:28 So, okay, Warren Buffett, he just, you know, he's been selling his stocks and stacking, you know, dollars, basically. He sold more B of A stock, Bank of America stock yesterday. He has now, now he has about two stable coin market caps worth of cash sitting on the Warren Buffett. That is not a fun fact. That is not a fun fact. That is not a fun fact. Like almost $300 billion, Warren Buffett has. has. I thought you were going to tell me he was going to say he had just started buying stable

Starting point is 00:09:55 coins for some reason. I was like that is a fun fact. He could. He could convert all of that to stable coins and like and tokenized treasuries and biddle fund. He could corner the stable coin market. Okay. Here's what an actual fun fact is. Okay. PayPal's PYUSD hit one billion dollars in market cap. Congratulations to PayPal's PYUSD. Well done. What if people don't know what PYUSD is? That's a stable coin, right, from PayPal? Yeah, PayPal, yeah, PayPal stablecoin. It has doubled its supply since June. Monthly active wallet addresses of PYUSC was at $25,000 in July,

Starting point is 00:10:31 and that has been up from 9,400 May. So getting some traction, actually mostly on Solana. It went from zero to $650 million of stablecoin supply on Salana in the last three months, which is closing on tether supply on Salana. Mostly, apparently allegedly caused by incentives, Camano drift and margin fi introduced boosted rewards for PYUSD. So when you incentivize things, it happens. But yeah, PayPal, PYUSD cornering part of the stablecoin salon in market.

Starting point is 00:11:04 David, I've heard Nick Carter say this. Why are you laughing? Oh, just because you said when you incentivize things, they happen. And I just thought, you know, that's brilliant. Also, I was going to bring up the fact. So Nick Carter has told us. to Austin Campbell when we had him on the podcast. By the way, that episode's going to come out later with Austin Campbell's. A great episode. Super good episode. More than stable coins. It was just like about

Starting point is 00:11:30 going back to the roots. Yeah, how to talk to sort of like the normie on the street in the U.S. and you know, like explain why crypto is actually good. Anyway, that aside, they both have said things like PYUSD, PayPal's stable coin is actually better in some ways than USDC. Certainly not from a liquidity profile. Better from like an investor protections, consumer protection. point of view. Yeah, and they can explain this better, but it's because it's like segmented in a trust. And so like it's it's it has the settlement guarantees almost like cash in your pocket. It's like a true bare instrument. And if PayPal goes bankrupt or anything else going like bankrupt, unless the U.S. government literally goes bankrupt and then we're all screwed, uh, it's redeemable. Right. So,

Starting point is 00:12:14 which is maybe it's not as clear what would happen in the case of like a circle bankruptcy or something crazy of what would happen to USDC. I think that's some of the additional settlement guarantees that you get with PayPal stable coin. Yeah. To further illustrate that point, like your dollars in your Wells Fargo or your dollars in FinTech PayPal are

Starting point is 00:12:33 an IOU. This is how banking works. We know this. Stable coins are better than those banking, in terms of a bankless life, using bankless tools, it's pure like USC tether. Stable coins are better because they're one-to-one backed, right? Like there's not risky lending going on in the back.

Starting point is 00:12:49 background, but PYUSD is even better than the typical stable coin because of an additional legal protection wrapper in how it becomes tokenized in the first place. Yeah. It's even better, according to them, than FDIC insured dollar in your bank account. It's like the most bank minimized stable coin on existence other than die, which died this week actually became a little bit less bankless. We'll talk about that later. Yeah.

Starting point is 00:13:15 All right. So people are getting at this point in the episode and they're like another flat week. you know, another bankless roll up. When, pomp, David. Okay. Another bankless roll up. Here's some optimism for you. Hunt for Green October. So, historically, I guess we've got to skip all the bankless roll-ups in September.

Starting point is 00:13:33 But historically, you come back in October? We're going to be up, all right? We're going up in October because historically the most bullish month for Bitcoin has been October. Average price performance, second half of the year, 20% for October. It's negative 6% in September and then plus 6% in November and then plus 10% in December. So really where you want to be is the back quarter of the year. The last three months of the year is going to be good for crypto.

Starting point is 00:14:03 You believe this? I mean, I think so. This isn't like my kind of like charting, but like I'm not going to disagree with the facts here. Why don't you ever disagree with something bullish, right? Yeah. I'm just looking. I'm looking back at 2017, dude, when I got into crypto. I got into crypto in June July of 2017.

Starting point is 00:14:23 In June July, it was 9% and 15%. So pretty green months. That's where I like got into it. In October, October, it was of 50%, 53%. In November, it was up 51%. And in December, it was up 45%. 53, 50% months in a row. I just remember that time.

Starting point is 00:14:40 And I was like so euphoric and just like high on crypto, learning about crypto, like smart contracts and blockchain. I remember the very distinct time. my life. You think you'll ever feel that euphoria again? No, that's a one. That's like, you only get to do college ones. You only get to play Dark Souls for the first time once and you only get to get in crypto for the first time. Oh, yeah. There's only, for me, it's only one view, the first viewing of Lord of the Rings, you know, and then after that, it's just second and third viewing. Annually, of course, in my case. David, we got a lot more coming up. So France has accused the

Starting point is 00:15:14 telegram founder of helping with organized crimes and arrested Pavel Duroff. So what does this mean for digital privacy? What does this mean for digital rights? Also, there's some drama around the EF Foundation selling 100 million ether. You were talking about it in the intro. And there's this rumor. There's this idea that suddenly Vitalik hates Defi. We'll get in all that and more.

Starting point is 00:15:35 Suddenly. Yeah. It just happened out of nowhere. All that and more. But before we do, we want to thank the sponsors that made this episode possible, including our recommended exchange and the place to get prepared for a Q4, of 2024, that's going to be absolutely explosive. That is Cracken.

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Starting point is 00:18:18 more chain switching or token importing, all your assets are right where you need them to be. The Uniswap extension is designed to level up your swapping experience with other Uniswap Labs products as well. Easily on board to the extension using the Uniswap mobile wallet to begin managing your assets across platforms and take advantage of smooth, seamless synergies with the Uniswap web app. So go and download the Uniswap extension today by clicking the link in the show notes. Just another way Uniswap is helping you swap smarter. Telegram founder Pavel Derov arrested in France this week, Monday this week. Pavel was placed in custody by agents of National Anti-Fraud Office.

Starting point is 00:18:51 According to French news, this TF-1, he was arrested at the airport and was subject of a search warrant for an OFM-I-N. Sounds like some France alphabet agency. It's an investigative agency which combats child exploitation in France. Okay, so what are the charges? The French judge put Dharov under formal investigation in a probe into his, into organized crime on the messaging app, Telegram. he was granted bail, which he used on the condition that he pays $5 million, reports twice a week to police, and does not leave French territory. The charges are out of jail on bail right now.

Starting point is 00:19:27 I'm showing that on screen. It looks like he's being asked him. He can totally afford $5 million. That is not a concern for him. It's like $15 billion net worth? Anyway, go on. Yeah. Yeah, he's doing great.

Starting point is 00:19:39 The charges. Complicity in selling child sex abuse material, drug trafficking, fraud abetting organized crime transactions, refusing to share information or documents with investigators when required to by law. The French judge said in the statement that Telegram has been used in various criminal cases but almost entirely ignored judicial requisitions, other French investigation services and public prosecutor offices like the Belgian ones shared a very similar observation. This prompted the Paris Prosecutor's Organized Crime Office to open a probe into possible criminal liability of the managers of this messaging service. in the commission of these offenses. This probe began in February.

Starting point is 00:20:18 Okay, so what does it mean for Dirov now? He is being placed under formal investigation in France. It does not imply guilt, or does it necessarily lead to a trial? The only thing that we know is that the judge has considered that there is enough evidence to proceed with a probe, so the probe shall go on. This investigation could perhaps last years or sent to trial or shelved, but that's kind of where we are. this this really surprised me i was shocked i think a lot of people were shocked by this um we actually had reached out and tried to get paville on the on the podcast not too long ago um yeah you know apparently he's a very difficult person to to contact i think because he has these types of security

Starting point is 00:20:58 perhaps yeah when you're getting probed yeah you don't want to go on a podcast uh did you read so this is the um uh english translation of the actual uh letter for for the prosecution of pavill so i don't know how many there's like, I don't know, 13 or so charges here, at least complicity charges, like complicity and fraud, an organized group. But some of these last ones, like, you know, you mentioned the child sex trafficking, child pornography type things, illegal drugs, all of the sales, complicity in those things, not him actively doing it, but because Telegram hosts rooms where people were allegedly doing these things, then he is culpable according to these charges. And also just generic things like this, David, providing cryptographic services designed to ensure confidentiality

Starting point is 00:21:44 functions without proper declaration in accordance with the laws? What the hell does that mean? You just providing encryption? They're trying to regulate math is what that sounds like. It sounds like a Gary Gensler just come in and like register your encryption service. What does this mean? Sir, do you have a license for that math? Seriously, providing cryptographic services ensuring only authentication functions or integrity control functions without prior declaration in accordance with the law to use encryption? What is this? Another charge. Importing cryptographic services ensuring only authentication functions or integrity control functions without prior declaration in accordance with the law? I mean, this seems like it's more than just like, you know, drugs and like money laundering charges of people,

Starting point is 00:22:31 people, by the way, not Pavel, but people using his app doing these things. And the charge is basically that telegram should be present and monitoring all of the telegram users or cost a billion different users and all of the groups and making sure that this stuff doesn't happen. It's also, it seems like some of these charges are specifically about telegram using some encryption type services. And it should be told that telegram does not use end-to-end encryption on all of its chat rooms, right? It's not perfect secrecy. It's not perfect encryption. Yes. And this has been a criticism of Telegram, I think is like pretty valid and like pretty warranted. Like Signal, for instance, does provide end-to-end encryption. So this means that if there was a-

Starting point is 00:23:12 signal does not know what you're saying inside of Signal. They don't know. Right. So this is a criticism. But yet, but yet when I read those generic charges, right, the concern here is that this seems to be a throw everything at them, see what sticks. And these same charges could be applied to like any messenger app. Like a signal, for instance. Anything, anything with encryption. Yeah. I mean, did Signal come in and like register, provide cryptographic services designed to ensure confidentiality? Like, did they do that in France? Providing cryptographic assurances to, uh, services to provide confidentiality. If that was like listed in like this iOS app like feature button, I'd be like, oh, sick, download. You like use it. It's, it's scary. It's, I think it's scary. I think that this is a like a major sort of war on encryption prong. And a lot of people, um, to such. Just a little bit more about the architecture of telegram. For those that don't use it, much of the crypto industry runs on telegram. Like, I have so many telegram groups. I use it every single day. It allows for one-to-one conversations. It also allows for group chats that let's,

Starting point is 00:24:19 and also allows for chats that have channels for one to many broadcasting, up to 200,000 people compared to the maximum of 1,000 for WhatsApp. And so there have been some concerns that you can spread misinformation this way. And to end-to-ending, encryption is not available for group chats and channels, end-to-end encryption. There is a privacy mode in Telegram where you can start an encrypted chat, a private chat with you and whoever's on the receiving end. Just private DMs. That's.

Starting point is 00:24:44 Me and you, we could do that, right? Private DMs. Yeah. Not end-to-end encrypted. But it is possible. But then the default mode of Telegram is, I think, the way I think this works is like, default mode is actually, like, they aren't able to see the contents. Like they can review.

Starting point is 00:25:03 So Telegram the company can or any government agency that's spying on Telegram and like requesting their data set and Telegram submits it to them can like see all of the chats in Telegram basically. That's not, you know, like encrypted. So generally my rule of thumb when it comes to subjects like this is that if it can be regulated or controlled, then it should be regulated or controlled. And this is what differs from Signal in my mind where Signal has built a structure where they literally cannot see what is going on there. on the inside of the conversation. And so in my mind, Signal and Signal founders are not beholden to the activity of the people using their tech platform.

Starting point is 00:25:41 If you as a organization can see conversations and see image files being sent around and then it's child porn, like that's, to me, that's a different story. How do you feel about that take? Okay, so I think part of that take is reasonable and part of it's not, all right? So here's the part that's not reasonable

Starting point is 00:25:58 from my perspective is like, okay, so the answer is just the, they yoink the guy and just like go directly to jail and here's all of these charges yeah like that's a piece like how about and how about and now they're also saying like he hasn't been cooperative and all of these things so it's just like I don't know maybe that this is the last escalation so you could kind of defend that but also look look at the charges David look some of these are just some of these charges could be directly applicable to what you just said which is the use case of signal right and also there's there's sort of the broader there's the broader context of this

Starting point is 00:26:31 if you like, you know, step back and look at like the components of a free society, right? We need some sort of chat function between citizens that allows us to share information. There's all sorts of like ignoring the illegal activity. There's all sorts of information that's being shared. Frontlines of the war, for instance, things that get censored in other places, things that maybe the state doesn't want you to say. I mean, in any free society, you need cloisters that are. like hidden from the eyes of the government.

Starting point is 00:27:07 Like I think that that's an important function. And so I don't know. If not telegram, then where? I mean, a billion, basically, the inverse of this. Basically the government saying, no, Pabell should have had a watcher, spies, inside of every private telegram group inside of its app reporting a legal activity to us. that's kind of the inverse of that. When you say it like that, I mean, that doesn't sound like a good equilibrium either, does it? So I hear what you're saying and I hear that argument. And also, I don't like where this is going is what I would say. Yeah, the trend is not healthy for sure.

Starting point is 00:27:47 Let's get to some comments. So this is the president of France, Macron. He says, I have seen false information regarding France following the rest of Pavel Derov. So there's a lot of bad press. He says, in a state governed by the rule of law, freedoms are upheld within a legal framework, both on social media and real life to protect citizens or respect their fundamental rights. He says, basically, this is the judiciary, fully independent. This is not political. This is not driven by France for some sort of, you know, political means to arrest him. Here's a funny tweet that we read, imagine you own a large apartment complex. France says, is a legal requirement for you to put microphones in every room and let us listen. And you say,

Starting point is 00:28:27 no, people should be able to have private conversations, and then you become arrested. That is the digital equivalent to what just happened to Pavel Dirov. Vitalik, who says, I've criticized Telegram before for not being serious about encryption, but given the info available so far, the charge seems to be just being unmoderated and not giving up people's data. This looks very bad and worrying for the future software and comms freedom in Europe. This is Gary Kasparov with an alternative take. he says, there's much to learn about Dorov's arrest, but my first thought is not dependent on

Starting point is 00:29:01 supposition or motivations. As admitted by Kremlin propagandists, telegrams is widely used by the Russian bureaucracy and military, so it has been used for acts of war and war crimes in Ukraine. He goes on and says a full thread, but it's basically Derov is not the person you think he is, don't hold him up as a martyr or a hero. And by the way, we don't know. Maybe he was working with like the Russians. Maybe he's a KGB agent, right? There's some of that that's being injected here as well in the conversation.

Starting point is 00:29:30 Like, who knows at this point? An interesting tweet from Noel Acheson says, this is not about telegram censorship. It's worse. It's about privacy. Deraav's arrest is the latest and perhaps most blatant example today of the role of layers and narrative misdirection. And she makes a couple points here.

Starting point is 00:29:45 Authorities want to suppress certain channels and contributors, but reports suggest that the investigation was focused on the lack of moderators. This suggests that the issue is not about censorship, but responsibility. and also second, authorities insist on having access to chats of political activists and military groups so that their intentions can be known ahead of time and their actions diverted. What's more, it's starting to feel blatant. The authorities don't seem bothered by how this looks. They're counting on the majority not caring as much as long as they feel safe.

Starting point is 00:30:12 So kind of calling out the French leadership saying like, this is, like, this is bullshit. You guys are doing this for your own political, like, motives. Yeah, and before, by the way, we throw France to under the bus. There was also speculation that some of this could be motivated by the U.S. The U.S. basically saying, hey, like, go, like, go do this. Like, who knows what goes on behind closed doors. But the broader point here is, like, sometimes when you hear moderation, right, that can just be state speak for censorship.

Starting point is 00:30:42 And it's like some of these things are, like, used one and the same. Telegram has a blockchain. They have a layer one blockchain called Ton. What was the telegram chain's reaction to this? What happened? So the TAN community rallied, of course. There is a TAN society Twitter account, which is like, call it the Telegram blockchain community. We've updated the TAN coins logo and profile picture across the TAN community channels to the global symbol of the digital resistance.

Starting point is 00:31:09 The resistance dog. Why a dog? In 2011, Pabal was ordered to eradicate the posts of liberal thinkers and dissidents at his previous company, which was a social media platform in Russia. I can't pronounce the name. It's basically the Facebook of Russia. In response to this, Pavel posted a picture of his dog, refusing to silence anyone on his platform.

Starting point is 00:31:33 The Taun Society announced an open letter mini app. They issued an open letter to French authorities requesting the immediate release of Pavel Dharov. Anyone can sign it on the Telegram app. It has accrued 1.48 million signatures so far. So that's kind of cool when you have the distribution to do that. I mean, that's a good point earlier. like Pavell's history, my impression was always that the Russians were kind of out to get him.

Starting point is 00:31:56 I mean, that's why he had to sort of like free Russia. He became a citizen of France. He made a social media platform in Russia. He made a social media platform. Had to leave Russia in 2011 because if you get too much power in Russia and you're not part of like the inner circle. Yeah. If you're not censoring things, like that's a problem for the Russian oligarchy. Yeah.

Starting point is 00:32:19 Like to capture power in Russia, you need to have that like a, approved by the oligarchs. And so I think he was like more or less an outsider, not kind of playing by these rules. And so he had to leave. He now is based in Dubai. Part of the story was that he was traveling to France with this like model that was like,

Starting point is 00:32:37 babe was a catfish posting location kind of thing. I saw this. Well, that's the conspiracy was that she was posting like, and you know, pictures of them and it had all the geolocation data. And so like she was just like allowing him to be traced all around France. He was arrested at the airport, so, like, they were going to get him there anyways. But, yeah, the joke is, like, he just fell in love with his, like, model who was like, babe, let's go to France, and then he gets arrested in France.

Starting point is 00:33:01 And there's also conspiracies wrapped in the conspiracy, like maybe he intended to get arrested for some reason. Oh, I have not heard of those. Oh, you'd not heard that? Okay, like, you got to go deeper, David. There's always a level deeper. So we don't know yet. But we do know, back to the Ton community and the Ton Chain, unfortunately, the Taun Network stopped producing blocks a couple of times this week.

Starting point is 00:33:21 Probably completely unrelated. I'm pretty sure this is completely unrelated. Yeah, this was result, well, maybe it was related in a way. This was the result of network overload caused by high number of dog transactions. Maybe the dog transactions were related to the new, like dog insignia. A meme point launched on Tong called dogs as a result of the founder getting arrested. The ton of validators were overloaded, causing them to allude consensus, took the chain down. So I guess it is related.

Starting point is 00:33:47 It is not coming from like, this is not a state sponsor attack of telegram. this is just a brand new brand new blockchain with you know like not perfect consensus are you sure about that doesn't have much lindy we could go deeper in the conspiracy because i i'm the conspiracy one i lead us i lead us down the holes you don't lead me down the conspiracy holes i lead you down the conspiracy holes i think macron uh like decided to launch this meme coin at just this time to take down the ton network stop at producing blocks i one learning lesson from this is like hey layer ones are hard. Keeping them up is very difficult, right? I mean, so, you know, like, especially if you don't have a spec or a single, or you're a single client blockchain.

Starting point is 00:34:28 Hey, now's not the time, David. I'll say that for another week. Let's talk about the time. The importance of multi-client blockchains is always the time to talk about multi-client designs. Well, don't kick them all the day to talk about that. Tahn price is down as well on the week as you'd expect. I mean, like not a massive cut. I mean, we're back to 25%. Yeah, okay. I mean, that's just like one, it's one bad day, you know? I've seen worse. What's one bad day? We're back to April. That's where we're back to from a price perspective. I think something that's related to this is the question of like, who's next.

Starting point is 00:35:00 So I tweeted this out when it just, it was on my mind. Resting Pavel is just a step or two removed from arresting Elon Musk or Mark Zuckerberg or Sam Altman or Italic Buteran. I said a step or two removed before you think I'm going to hyperbole because there are still some steps that need to be completed there. but I were getting closer. We're getting into that vicinity. And you can you can Elon on X is like belatently pro like pro right, pro maga, pro Trump, anti-Kamala, anti-Democrats. And then like something like this happens and like, oh, I, that makes sense.

Starting point is 00:35:36 Look at the charges, right? So like you could say, I'm sure there's somebody in some dark corner of Twitter. He probably wouldn't take long to find that is doing like quote unquote illegal stuff. right maybe sharing like images they shouldn't maybe doing like drug deals i'm sure there are plenty of porn on twitter right okay but like there could be stuff that Elon's not monitoring right and if it just takes this i mean you have a bologi made this point he's like uh manual mccron has a you know like population of france of what i don't know population of france we could look this up i'm going to say 70 million people something like this does he know what's going on in the dark

Starting point is 00:36:13 corners of like paris streets is he monitoring that Or is there a legal activity going on? You know, it's kind of like a network state thing of, is it unreasonable to expect the monitoring, the continuous monitoring of every single chat, every single tweet that's going on inside the platform? I think that's a question for like that all open societies need to go, like think about and consider.

Starting point is 00:36:35 Anyway, related but unrelated to this, maybe. Mark Zuckerberg sent a zinger to the Biden-Harris administration. Oh my God. This was so good. Okay, so did you read this letter? This is to Jim Jordan, the chairman. Yeah, why don't you summarize this for us? This is from Mark Zuckerberg. Yeah, so he was talking, he was reflecting on some decisions that he made in 2020 and 2021 about Facebook and the pandemic and COVID, like well into the pandemic after it had started to become very politicized. He said in 2021, senior officials from the Biden administration, including the White House, repeatedly pressured our teams for months. to censor certain COVID-19 content, including humor and satire, and express a lot of frustration with our teams when we didn't agree. Ultimately, it was our decision whether or not to take content down, and we own our decisions, including COVID-19 related changes. We made to our enforcement in the wake of the pressure. I believe the government pressure was wrong, and I regret that we were

Starting point is 00:37:34 not more outspoken about it. Wow. I also think that we made some choices that with the benefit of hindsight and new information we wouldn't make today. Like I said to our teams at the time, I strongly feel that we should not compromise our content standards due to pressure from any administration in either direction. We are ready to push back if something like this ever happens again. And then he also cited in a separate situation, the FBI warned us about a potential Russian disinformation operation about the Biden family in the lead up to the 2020 elections. That fall when we saw a New York Post story reporting on corruption allegations involving then Democratic presidential nominee Joe Biden's family, we sent that story to fact checkers for review and temporarily

Starting point is 00:38:13 demoted it while waiting for a reply. It has since been made clear that the reporting was not Russian disinformation. And in retrospect, we should not have demoted the story. We've changed our policies and processes to make sure that this doesn't happen again. For instance, we are no longer temporarily demoting things in the United States while we wait for fact checkers. Wow. I mean, this is hard. It's basically like that word that you used earlier, like misinformation, right? That's another like state speak type word, which is like if they don't, don't like something, it could be misinformation, basically. Right.

Starting point is 00:38:47 Yeah. And so when you start having the nation state and White House officials telling social media companies what should be censored or like demoted and like and and what shouldn't be, I mean, that's a. Yikes, bro. And it's one thing for the United States to have that happen inside of the United States because I believe in our court system eventually to slowly come to. like agreement with truth and the constitution but i have no such assurances for like france i don't

Starting point is 00:39:20 have any assurances that france will do that he's also this is also shot across the bow i think for mark zuckerberg where he's um basically he's i think this is i'm done with yeah i'm done with you guys i don't want i'm done with a democratic party maybe this is what you can interpret this to believe like i'm not willing to play ball anymore so like come at me bro uh maybe he's saying that as well as partners. Now he wears a chain and has like sick jujitsu. So you believe it. So you want to believe it. Look, this is the fight that's going on. It's a big one. It's an important one in the digital rights sphere. We've got our own Pavel that's happening right now in the United States. This is a court case we've talked about on bankless for a while and I just wanted to bring

Starting point is 00:40:06 both David and I wanted to bring your attention to it. This is Roman Storm. So you recall, Tornado Cash developer was arrested out of his home last year by the FBI for deploying open source privacy code tornado cash, lots of people in the crypto ecosystem used to protect their cryptocurrency transactions and to make them private. Of course, some bad actors also use this tool. As with any tool, it could be used by the good guys and it can be used by the bad guys. This is fundamental to encryption. If encryption is an open source technology that's available to everyone, good people will use it and to protect themselves and also bad people will use it. That seems obvious. Anyway, you've heard us mention his court case. That's coming up.

Starting point is 00:40:50 It's on December, I put the tweet wrong, it's December the 2nd. And Roman- That's going to come real soon. It's going to come real fast. And unfortunately, I just learned this this week because I knew there's ongoing fundraising for Roman Storm's case. He's basically, it's out of money. He's $2 million short. It costs a lot of money. There's a full budget, attached this. It costs a lot of money to get the S-tier legal team to protect him. Okay? Like, we're talking millions of dollars and he's two million dollars short. He's raised like 500K. He still needs two million dollars in order to get the S-tier legal team on this. This court case, the U.S. versus Storm, will be a defining historic court case for digital property rights

Starting point is 00:41:30 in the United States. It's like going to determine, David, if we have the right to private cash in any form, it's going to determine, like even if... It's going to determine whether or not smart contracts can be made illegal by our government. This is the court case that says that tornado cash is allowed or not allowed. Is the notion of a smart contract able to be made illegal? This is that court case. It just so happens there's this one guy that is either going to go to jail or not based on the outcome of this. But the precedent is perhaps the most critical, crucial precedent that this industry has ever had.

Starting point is 00:42:07 fuck Gary Gensler, fuck the SEC's insecurities, we'll fight those court cases too But this is the final boss This is probably the most high leverage court case That is going to exist, has ever existed As it relates to the crypto case Yeah, and if we don't fund it as a community Like hugely disappointed, right?

Starting point is 00:42:27 We're just going to bend over backwards And be like, okay, we'll just have the illegal smart contracts But you know what he gets? If we don't fund this fully is a private attorney, defense attorney. Just randomly assigned by whoever's available, right? Instead of the S tier, like, we need to have the, we need to have the A team on this in order to actually have a shot at winning this case.

Starting point is 00:42:49 Anyway, we'll include a donate link in the show notes. David and I, Bankless, has donated to this in the past. We're prepared to in the future. We're going to up it. We're going to up it. Yep. And we'll have more information about this in the weeks to come because, like, we can't leave this deficit out there.

Starting point is 00:43:05 This is the most important thing. This is, this is, it's, it's, I don't want the legal smart contracts. That is antithetical to why I am here. And I know. And we have like, we have the biggest super pack ever apparently, like $130 million in the fair shake or however large that is. Let's get $2 million into Roman Storm's defense so that we can have permanently legal smart contracts. I, that's how I see this. I agree.

Starting point is 00:43:30 All right. We have more to talk about, David. What's next? Sony introduced a brand new Ethereum layer 2 called Sonium. Yes, that's Sony, perhaps the maker of the TV that you might have in your living room. Walkman. That Sony. Yeah, Walkman.

Starting point is 00:43:43 Yeah. Trump launched another NFT collection, so we're going to go listen to that. And Gary Gensler, Gary Gensler does his job and takes down another scammer in crypto. Yes, wait. No, just kidding. It's a very legitimate, compliant United States-based company that employs 100. of United States-based employees, and they just got issued a well-as-knownst.

Starting point is 00:44:07 Gary. Last time to place your bets about what that company is, try to imagine it, think who it is. We'll see if you get it right. We're going to go ahead and talk to some of these fantastic sponsors that make this show possible, and then we'll be right back. New projects are coming online to the Mantle Layer 2 every single week.

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Starting point is 00:46:31 today to get a free initial token valuation. Some backlash to the Ethereum Foundation this week after somebody identified on chain a $100 million coming from an EF wallet to Cracken, our lovely exchange and sponsor. And people were like, is the EF about to dump 100 million eth on us? Like, is that about to happen? Like, what's going on? Where are they getting this like money? What's it going to? All of these things. So what's the story? Where are the concerns here? So this, first off, is a semi-regular activity. The Ethereum Foundation has Ether all the way back from Genesis. They fund things, and they semi-regularly sent Ether to Cracken, and then they sell

Starting point is 00:47:12 Ether. Not all at once. They sell it on an as-needed basis so they can distribute funds to a bunch of different things that they have, like, committed to funding. And we're going to go through, like, what those things are in a second. But sometimes... This happens every now and then. But sometimes they batch send it all, right?

Starting point is 00:47:24 It doesn't mean necessarily, according to what they said, that 100 million is being market sold. Yeah, the last time they sent 35,000 ether to crack in was however long ago. And then they have been trickling selling that until now. And then like, oh, we ran out of ether. We need to pay more people. So let's send another 35,000 ether. And then we'll slowly sell that.

Starting point is 00:47:43 This is just what foundations do. This is why we have foundations. They pay for support. And I think it has always been since my time in crypto, like a cry of the Ethereum community. Not that this is happening. I think we're all in support of some of the things that they're funding. It's the lack of transparency of like when or how and where this is going. It just happens randomly.

Starting point is 00:48:04 And then all of a sudden everyone wakes up and like, oh, we're 35,000 eth just got sent to a point. There's like a little bit of a sticker shock phenomenon. And I'm like, yo, whoa. It's that. And there's also a cry for transparency. It's just like, where's all this money going to? Yep. Yep.

Starting point is 00:48:18 Yep. So I, Maya Gucci, who's the director at the Ethereum Foundation, she tweeted out. This is part of our treasury management activities. The EF has a budget of a $100 million a year. largely made up of grants salaries and many of those recipients are only able to accept fiat. This year, this lately this year, we were advised to not do any treasury activities due to regulatory complications. And so we were not able to share the plan in advance. Also, this transaction is not equal to a sale.

Starting point is 00:48:46 They always planned in gradual sales from here on out, like I said. So here's Eric Connor, who's been one of the ones who's always asked for ETH transparency. He says, the lack of transparency from the Ethereum Foundation, 10 years in is both shocking and extremely frustrating. It's really not a lot to ask for simple financial reports or clarity around fund movements and usage. Anthony Sedano says, I understand that people want more transparency

Starting point is 00:49:09 around where the money goes, but it is not just being spent on bullshit. It is being used to further steward the development of the Ethereum ecosystem and fund many critical projects that otherwise would not get any funding. Let's keep on pushing for more transparency from the Ethereum Foundation,

Starting point is 00:49:24 but let's also do it in a constructive way that benefits the ecosystem. him trashing the EF for spending $100 million a year, which is absolutely relatively tiny to the Ethereum's $320 billion market cap is not constructive. Okay, so Josh Stark, who is a member at the EF, actually put out a fantastic threat about some of the fundings that the Ethereum Foundation does. And so he says in 2023, out of the total cost of 2023, layer one research and development was 25% of the total cost. This includes grants to external client teams, which is 62% of that 25%. And internal Ethereum Foundation researchers, salaries, that's 38% of that 25%. This is teams working on cryptography and zero knowledge proofs, execution layer and developer

Starting point is 00:50:08 tooling like Geth, privacy and scaling explorations, solidity, and more. And there's also a new institution section, which is 35, 37% of that total amount. This is including the NOMIC Foundation, the DEMIC Foundation, the D. decentralized research center, the decentralization research center. Layer 2 beat, who we all love, ZeroX Park, who's doing, in my opinion, some of the sickest work in cryptography and smart contracts that we have. Shout out to the episode that we did on Autonomous Worlds, not too long ago. And there's some other things as well. Layer two research and development applied zero knowledge cryptography, community development, developer platform, internal operations. And so that's

Starting point is 00:50:48 all of it. There is a link in the show notes if you would like to get some of this report. and then he said that also there's going to be another report that comes out for at the end of November to update all of this. I thought this was a solid answer to kind of more transparency. Like here it is. And I think this is called a lot of the concerns

Starting point is 00:51:07 that folks had. I think zooming out... To be clear, a lot of the concerns that folks had was like, meh, somebody selling $100 million. I think so. But like also transparency is valid, but now...

Starting point is 00:51:21 Transparency. So, you know, call off the dogs a little bit. Yeah. This is a, you know, a wider scope take on the Ethereum Foundation. So the EF holds 845 million in ETH, which sounds like a lot. But realize that represents only 0.25%. So quarter of 1% of the total ETH supply. Now I see that amount.

Starting point is 00:51:42 I'm like kind of worried about the sustainability. If they're spending, you know, 100 million a year, I'm a little more worried on the other side of it. left. This is just a tiny sliver of ETH supply as compared to like other foundations and other ecosystems. I mean, like we have to get, we're not comparing all the details of like the Salana Foundation, the Tezos foundation, the New Year Foundation, all these things,

Starting point is 00:52:02 which have a much chunkier percentage of supply. I don't know. My take is the F does like, could improve some transparency, but like does a pretty reasonable job in this whole ecosystem. They funded things like Uniswap, David, in the very early days from grants, which wouldn't have been possible. With a $10,000 grant. Like, come on.

Starting point is 00:52:24 Anyway, so that's the part part of the market. People are a little bit mad. And that's not the only thing that people got mad about this week. There was also a talk of Vitalik, not liking Defi, kind of a chant of Vitalik hates Defi. Where did this come from? I was having trouble, like actually finding the source of why this became a, like what was like patient zero or tweet zero of this. I think maybe it was Kane Warwick mentioning on Steadylads, which is a podcast from Jordy Alexander and company that says that Vitalik discourages and doesn't like Defi. And that doesn't really support it.

Starting point is 00:53:03 Yeah. Doesn't support Defy. And in Kane's position, because Defi is such a critical component of blockchains, which I agree with, like the number one thing to come out of a blockchain is primarily Defi. I also agree with the most use. Yeah. And so his position is that like if you don't support.

Starting point is 00:53:18 defy, then you're actually against defy. And Vitalik has in the past, like, been critical of, like, and the way I read these tweets or statements is that he is in his personal opinion, he's personally critical of some of the structures of defy that we have seen. Very similar to, like, his, but do we deserve it tweet about ICOs in 2017, which is like, what the hell is going on on Ethereum? This ICOs aren't, like, aren't doing anything. And he's like similarly saying that, like, the loans from Maker Abe, synthetic. aren't like real loans, they're capitalized collateral-based loans to help people speculate and gamble. These are not helping, like, low-income, like developing countries gain access

Starting point is 00:53:59 to capital, and therefore it's only part of this like circular economy, and he's not interested in it. He used the word, I've always always, I've always always, I've always, I've always, I've always, I've always, I've always, I've always, I've always, I've always, I've always, I've always, people were ascribing this as like the stance of the of the eF as a whole and maybe there's no like way to parse vitalica away from the EF maybe that's fair um but that's been like kind of the stance here yeah I think in particular that that sort of a term or a boris was triggering to people because they're like yeah that's that's crypto that's money that's you know like the entire you know purpose that's how we bootstrap things this this was quaint's original tweet that we were referencing he said if the only thing propping up your chain for the last five years is defy and the best you can

Starting point is 00:54:46 muster is begrudgingly tolerating it, you are anti-Defi. So he wants just more than like, defy is good and I'd prefer better use cases. He wants, I think, Vitalik in the EF, like his expectations to have them be overwhelmingly positive towards defy and just being like it's the greatest thing ever, which like, I don't know. I don't think that's entirely unfair. But there's also like, it's not a crazy take. I mean, for us for bankless, the reason we actually started this podcast in this entire movement was to put the focus on defy. We think that is the killer. Going bankless is the killer use case of crypto,

Starting point is 00:55:24 but it's not the only use case. And I get, that's fair game, I think, to have Vitalik be interested in other things. Anyway, here's another take on the Oroboros thing. This is a ret ship. In my opinion, you could just as easily say eth is downstream of defy. It accounts for the majority of usage and gas fees on the chain. Usage is the primary value driver of ether. Ether is used heavily and Defy as colloquy.

Starting point is 00:55:46 There's also a major value driver for ETH. This is sort of what Justin Drake has said in the past, which is like ETH is pristine collateral. It's where the whole ultrasound money meme came. I feel like for someone like Drake, who also works at the EF, he is probably more bullish than Vitalik on some of the ETH is money and ETHI's defy use cases, though I don't want to put words in his mouth.

Starting point is 00:56:10 Anyway, this RET is making the point that if you remove DFI from ETH, its value would be 80% less. I also think that's true. Hayden's take is Vitalik is driven by his interest in values. Personally, I think Defi is the most important and impactful area of Krodo by far. I am not in the least bit upset that he wants to see use cases beyond DFI, where he asks where the yields come from. It's not his job to pump your backs.

Starting point is 00:56:34 DC investor. He also said, Vitalik and many core devs will literally never talk about eth as a sore value or as a meaningful programmable money. This has been true since inception. and I think it's tied to public comments on defy, yet it is super obvious that ETH must be a desirable sore value in order for Ethereum to operate securely and proof of stake. To which Vitalc responded, if I did not believe in ETH has a sore value, I would not hold 90% of my net worth in it, which makes I think both you and me, Ryan, more bullish on ether as a portion of our bags than Vitalik. But that statement from Vitalik makes me also very happy because I think the DC investors had a long history as long as you and I.

Starting point is 00:57:13 have in Ethereum and crypto. And he's kind of right. The Ethes Money Camp. Yeah, the Ethist Money Camp, right? And I remember, David, it was like four years ago when Ether, you know, like 2019, maybe, 2020, 2020, 2019, when Ethereum was still kind of finding itself. And everyone was saying ether had no value, it was just a stupid gas token. It was like worthless. And there was this growing chant in the Ethereum community. No, Ether is a monetary unit. Eth is money, right? And I remember you at a conference in Israel. I don't even remember what the conference was, but you were actually... There's an ethereal from consensus.

Starting point is 00:57:48 Yeah. You actually, this is recorded somewhere in the internet archives, probably. You asked Vitalik, you were like, hey, is Eeth money? And his answer, this is kind of the first indication, right? His answer was, if the Ethereum community wants it to be money, then it is money, right? And... And then I heard that. I was like, great, therefore it is.

Starting point is 00:58:08 So that's been like a history of... of what he said about this. I don't think he started Ethereum to create Ether as a monetary asset. But I think he also recognizes its role. So this is why I was so pleased to hear this, why I retweeted it is this is the clearest I've ever heard him say,

Starting point is 00:58:26 ether is a store of value asset. And by the way, his bags back his belief here, which is 90% of his net worth is in Ether right now. I like this tweet. Yeah. Also, I think the broader conversation here is what is the, role of the foundation and Vitalik and their relationship with the application layer.

Starting point is 00:58:47 Because to me, Ethereum has always been trying to build in this kind of like intellectually pure, true north direction, regardless of what happens on the application layer. So like people like Kane and maybe like Greater Ethereum are asking for a little bit more of like BD and growth out of the things built on the app layer, things like Avey, things like synthetics. Or support in general. It's more just support whatever with that unspecified word means that I don't really think there's any specifics offered of like what they're really looking for here. Maybe just better public statements about defy. But it's always been Vitalik in the EF's stance to be neutral about what happens on the app layer and not bias any one application over another or any sector over another. And that has that's always been how I've thought that they would take a stance towards the app layer. And I think people these days are kind of just like we know defy is useful.

Starting point is 00:59:40 like we know this is this is benefiting your chain like why wouldn't you support this? And like I think Solana actually does this well when we had Kyle on. This is what he talked about. It was just like Mark Zeller from Ave said that like the EF has never really talked to anyone from Avey. Like what's up with that? And I think the Solana like growth marketing, BD like go go go mentality would be one that would like, yeah, let's let's talk to people. Let's talk to the builders and let's help them build what they want.

Starting point is 01:00:07 And I think that's valuable because that's not what Ethereum is doing. But I prefer what Ethereum is doing, which is building the most credibly neutral open Centresistance of Resistance Protocol possible because that's how you get the massive massive scalability and social support as possible. Like what if we like what if we started benefiting app layer behavior at the wrong time? Like what if we started incentivizing like the ICO mania when that was happening? Like that would be wrong. And so I've always believed in the stance.

Starting point is 01:00:37 that the Ethereum protocol should be as credibly neutral as possible. And it's also not like all of these like projects, Synthetics, MakerDAO, AVE, have like insanely valuable market caps with VC investors. Like they have support. They have support. I mean, like my take on this is Ethereum's awesome. Vitalik's done a fantastic job. The EF has done a great job as well.

Starting point is 01:01:03 Everyone is saying these things because we're kind of in a mood, you know, if there's some kind of like, ETH price is low, specifically on the ratios, and there's kind of a vibe session going on. And so we're all kind of like, eh, at each other,

Starting point is 01:01:17 particularly on social media. So some of this to me is noise. By the way, bankless faced some of this week as well for that Kyle Somani episode that you mentioned. But, you know, like,

Starting point is 01:01:29 I guess spread some of the angst around to the EF and Vitalik. David. This is so funny. We were talking about the hate of the, of the community on like Vitalik and the EF. And I think you put out a tweet that was like, usually it's directed at Bankless. Yeah.

Starting point is 01:01:43 And then three days later, we released the Kyle episode. And then it was like it was directed as Bankless. Yeah. All right. We got some more stuff to talk about. This is cool. Sony has a layer two now.

Starting point is 01:01:56 Sony is deploying a layer two and it's gone to TestNet. So when PS5 on Ethereum, David, is that what's going on? What is this? Okay. Sony Sonium, a public layer. or two that aims to connect Web3 with everyday internet services. And so this is backed by Sony, the Sony Block Solutions Lab.

Starting point is 01:02:16 That's the company. Along with this merger aqua hire of this Astor network, which is built with the Polygon CDK on Pocod. I don't know where that came from. But apparently, like, this Astor network is going to roll into Sonium, which is going to be built on the OP stack and eventually will join the super chain. and phase two, or phase, there's two phases here, phase one, onboard crypto people,

Starting point is 01:02:43 normal layer two stuff, but then phase two is onboard Sony products, such as Sony Bank, Sony music, Sony Pictures, and so on. Quote, we would like to integrate Web3 and blockchain technology into Sony's product, and in three years, we would like to onboard not only Sony, but also all enterprises and general apps on top of it. Interesting.

Starting point is 01:03:04 I don't think this is just another layer two, just trying to split the current user base into another chain, but I think they have like an enterprise plans. Sounds like an enterprise IP chain almost.

Starting point is 01:03:14 You know what we were talking about the story? The second in two weeks. Did you see that right after Story released an IP restaking protocol on story got announced? No.

Starting point is 01:03:26 So you can restake your IP? Yeah, that came out like yesterday. I can't wait to restake our podcast. Our restake our program. Okay. Sky. This is the Maker Dow rebrand. So this has always been a part of the MakerDAO end game. The rebrand is finally here.

Starting point is 01:03:41 The rebrand is called Sky. At Sky ecosystem on Twitter. Sky, the best and easiest place to get rewarded for savings without giving up control. And so, die and MKR is now turning into USDS and Sky. So Sky is now USDA. This is happening on September 18th. It's voluntary. So both Maker and Die in his current form will remain in existence as legacy tokens. This is where the stock split of MKR is getting, one MKR is getting split into 24,000 Sky tokens. So MKR is going to go from like $2,000 to like $0.20 or something, if I did my math right. I probably didn't. And then MakerDAO sub-Dow is like the Spark Protocol will become Sky Stars.

Starting point is 01:04:27 So independent decentralized projects will connect to the Sky ecosystem. Each Sky Star Sub-Dal will have its own governance token, manager's treasury, governance community, one of them is Spark, like I said. I'm going to miss. I'm going to miss Maker. I'm a miss Maker. It got my start in D-Fi. Back when it was called actually not Die, it was Cy, single collateral die, right?

Starting point is 01:04:48 Single-clateral die. Now, Die is going. Now Maker is going. I guess, you know, this guy's cool, but I'll miss Maker. But, you know. What's wrong with Maker and Die, bro? I thought that brand was fine. Their Twitter account got like taken over, right?

Starting point is 01:05:03 The Maker Twitter account released it. And some. So they changed. If you were once following MakerDAO on Twitter, you are now following Sky ecosystem. They just swapped their handle. But then some guy just picked up the empty MakerDAO handle. So some guy is just his name is not MakerDAO and it's at MakerDAO on Twitter. There is one important difference that I would like to highlight.

Starting point is 01:05:26 Dye does not have a freeze function, which has been one of the best properties about the MakerDAO system that I've enjoyed and espouse. It's the most bankless stable coin that exists. because there's no freeze function. USDS has a freeze function. Does it really? Which is, yes. Yes. All right.

Starting point is 01:05:46 It's why I don't enjoy it. All right. Well, you know, speaking of disappointment, David. Politics. Trump and Harris have agreed to debate on ABC News. So they got the date. It's September 10th. That's going to happen.

Starting point is 01:06:01 My question to you is, what do you think the probability that crypto comes up? Either in the full. of a question or Trump somehow injects it. It's like zero. Zero percent? I ask this on Twitter. Less than five percent. I asked this on Twitter. Same question on Twitter. Again, my followers, crypto natives. My followers say 46 percent yes. Basically 50-50. Yeah. Yeah, I voted no on that poll. I'm voting yes on this poll. I think it's going to, I think Trump's going to bring it up. Didn't we already do this? Yeah, the Biden debate and I lost that one, remember? But so did. Biden also lost that in the

Starting point is 01:06:34 in a big way. And so I'm hoping to be right on this. If there's a polymarket spun up, David, maybe I'll bet against you. Also in political news, RFK Jr. You guys know this. It was national media news here. He suspended his presidential campaign and endorsed Trump. Of course, RFK Jr.

Starting point is 01:06:54 We had him on bank lists. Very pro-crypto candidate. Maybe even more pro-crypto than Trump. I think he was more pro-crypto first. Yeah. And I think it came from a place of deeper place in his heart. Yeah, a deeper place in his heart. If that makes sense.

Starting point is 01:07:09 So I was kind of wondering, I mean, this is sort of in exchange for becoming probably like a cabinet member in Trump's administration, were he to get elected. Like what cabinet, would he be a crypto czar? Would he be pro-crypto? I don't know. I think he's really gunning for health and human services. Yeah, something in his cabinet position. But it would still be a good thing, obviously, to have another pro-crypto member of the executive

Starting point is 01:07:33 branch if if Trump gains power. And speaking of Trump, David, you want to, you're going to make us, watch this? Should we watch this? I don't know how long, how much of it I can watch, but let's play a little bit of it. This is your favorite president, Donald J. Trump, with some very exciting news. By popular demand, I'm doing a new series of Trump digital trading cards. You all know what they are. We've had a lot of fun with them. It's called the America First Collection. 50 all new stunning digital trading cards. It's really something. These cards show me dancing and even me holding some bitcoins. Here's the best part. I'm doing great things for my Trump digital card collectors. First, there's the real physical Trump cards. Purchase 15 or more of my Trump digital trading

Starting point is 01:08:20 cards and will mail you a beautiful physical trading card. It's really, I think, quite something. Each physical trading card has an authentic piece of my suit that I wore for the press. presidential debate. And people are calling it the knockout suit. I don't know about that, but that's what they're calling it. All right. So, David, people calling it the knockout suit. This is Trump's latest release of the Trump NFTs. That's what's happening. So that was, that was real. That was not AI generated. That is Trump talking about his fourth NFT collection here. Everyone rushed to go get them. Do you know how much they cost? He says it, $99. But if you spend, he's adding some utility for one?

Starting point is 01:09:01 Yeah, $99 for one card. Yes. But let me tell you, if you spend $25,000 in the cards, you get utility, you get Trump utility. You get access to Trump sneakers, Trump cocktail dinner at Trump National Golf Course in Jupiter, Florida with Trump. It's kind of the Gary V play, you know, like I got these NFTs and if you buy certain NFTs of a certain amount, then like you can meet me in person and we'll do things together. It's utility. Utility to the NFTs.

Starting point is 01:09:29 Okay, right. We are getting towards the end of this episode. Every listener who has placed their bets about which United States company. Not everyone. Not everyone. Like what? 20, 30, 40,000 people listen to these things. Not everyone is on Twitter. Like, at least have them. Tell us. What's Gary doing? Okay, sorry. Okay, so which United States domiciled crypto company that's extremely compliant and legitimate has received a Wells notice from the SEC? You have your last five seconds to think about this. It is. OpenC. Okay, so Devin Fincer, the CEO of OpenC, has tweeted out. OpenC has received a Wells notice from the SEC threatening to sue us because they believe NFTs are on our platform, our securities. Yeah. We are shocked the SEC would make such a sweeping move against creators and artists, but we're

Starting point is 01:10:14 ready to stand up and fight. Cryptocurrencies have long been in the crosshairs of the SECs and companies like Coinbase, Uniswap, Robin Hood app, Crackin, and Consensus. Wow, that list keeps on growing longer. Has been fighting against the SEC's single-track approach of regulation by enforcement. So, well done. Congratulations on joining the ranks of some of the best and most legitimate companies, United States companies in crypto.

Starting point is 01:10:36 Honestly, you guys deserve to be there for some reason. You've done well. You've done well, OPC. You're really making an impact, and you can tell because you've got a nastygram about Gary Gens are trying to see you. Let's remember what NFTs are. Art, collectibles, video games, trump cards, domain names, event tickets, all of these are NFTs. Dude, Trump is selling illegal securities. Well, by the way, do you think there's something to that?

Starting point is 01:11:03 Is that why the executive branch and Gary Gunz are prosecuting it? There's another conspiracy for you if you want to go down there. It's certainly interesting timing and a terrible look for the Democrats, not that they needed any more terrible looks. Look at this. DC investor goes, holy shit, they're selling illegal securities on eBay. And he's tweeting a picture of eBay of a Magic the Gathering card on eBay. If you want to get on this now. $2 million dollar magic the gathering card.

Starting point is 01:11:28 Yeah, that's more than Cryptopunks right now. That's a nice, that's a nice card right there. Oh, wow, don't remind me, bro. You remember when Richie Torres asked Gary Gensler, whether he's like, what happens if I take a Pokemon card? Is that a security? And then he's like, what if I tokenize that Pokemon card? He asked Gary Gensler this.

Starting point is 01:11:47 Is that a security? And Gary was like, oh, well, no, facts and circumstances. We don't know. How we test, blah, blah, blah. I guess he does think that Pokemon cards, when tokenized, suddenly become. securities. This is what this means. Jake Trevinsky, the SEC has fully lost the plot. The idea that a financial markets regulator established in the 1930s would have jurisdiction over digital art defies

Starting point is 01:12:09 common sense. And also, the SEC's actual authority to do this, Hayden Adams, saying what you said, David, which is like, hey, OpenC, welcome to fight. You're one of us now. Devin Fisner is planning to fight this, which is fantastic. So more legal bills that we as taxpayers, are paying for Gary's, you know, senseless crusades to stop you from buying digital art on the internet. That, like, that's where we are in 2024. All right. One bankless ventures raise on the week.

Starting point is 01:12:40 Chainbound raised $4.6 million in a seed round with participation from us over at Bankless Ventures. What is chain bound? They are working on software to issue pre-confirmations from staking pools. This is a staking pool like Lido, Rockpool, anything else. Led by Cyberfund, who's the kind of the Lido, H.A. recent venture capital firm. The idea of this is like you can issue pre-confirmations for layer two to have faster settlement times to the layer one. Also very beneficial for base

Starting point is 01:13:08 roll-ups. The big vision here is to allow proposers to do sequencing. So it's a pretty interesting infrastructure that kind of ties layer one and layer two's together much more intimately, I would say. So congratulations to chainbound for the race. And unfortunately, as we end this episode, David, I got some bad news for you, man. As a single dude in crypto, What could this possibly be? Some bad data just came out. This is Nick Carter tweeting out a chart of a data around the unattractiveness of male nerd hobbies. So it's basically plotting which male nerd hobbies are the least attractive to women.

Starting point is 01:13:46 We've got a lot on here. We've got video games. We've got comic books. We've got cosplay. We've got Magic the Gathering. We've got Dungeons and Dragons. Unfortunately, crypto ranks. as the second most unattractive male nerd hobby out there.

Starting point is 01:14:04 And it only loses to one, which is funco. What is Funko? Funko pops, the little Funkopop collectibles things. Dude, I don't even know what that is. Well, second place. Very unattractive, apparently. You said this is bad news for me, but actually this is just not related to me because this is for nerd hobbies.

Starting point is 01:14:25 Crypto is a lifestyle. and so just not relevant. It's not a hobby. Yeah, it's not a hobby. It's more than a hobby. It's not a hobby. It's not a hobby. it's more than a hobby. It's not a hobby. I can't believe, though, that it's worse than cosplay. That hurts. Yeah. Boys just aren't allowed to have fun, you know? Your hobbies are unattractive. I guess you got a date in crypto if you want to get something to happen. David, we got a moment of Zen. This is Song a Day guy.

Starting point is 01:14:55 Song of Day, man. Yeah, Song of Day Man. You have some context here because you did an episode while I was out with him. He has a lawsuit against the SEC right now, too, right? What's a lawsuit about that? Highly related to the SEC's Wells Nose versus OpenC. They are pursuing the SEC for setting the precedent that NFTs are securities, basically. Song of Day Man releases an NFT every single day of his songs that you could buy it. And because of this stoner cat's legal case where Milo Kuhniz and Asin Kutcher release their Stoner Cats,

Starting point is 01:15:26 thing, they had to settle with the SEC. That precedent determines that artistic, you know, creations in the form of NFT are therefore security. So he's suing Gary Gensler and he's suing the SEC to break down that precedent. And so, of course, since the SEC is now going after the NFT marketplace OpenC, he makes a song about it. And you can go by that illegal security that he may or may not be issuing with the link in the show notes if you are so interested. So Gary Gensler, this is who you're up against. A moment is in just a minute. But risk and disclaimers first.

Starting point is 01:15:58 When you serve a wealth notice, this is who you're serving. Gryfto is risky. You could lose what you put in, but we are headed west. This is the frontier. It's certainly not for Gary Gensler. But we're glad you're with us on the bankless journey. Thanks a lot.

Bankless - ROLLUP: Ethereum Foundation Sells $100M? | Telegram Founder Arrested | SEC Targets Opensea

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