Bankless - ROLLUP: Ethereum Merge Bellatrix Upgrade | Binance USDC Stablecoin Wars | Coinbase Treasury Tornado Lawsuit

Starting point is 00:00:00 This is the last weekly roll-up that will be under proof of work with Ethereum. Bankless Nation, it is the second Friday of Merge-Tember. What time is, David? Ryan, it's the Friday Bankless Weekly Roll-Up, where we cover it the entire weekly news in crypto, which is always an ambitious endeavor, especially this week because it's Merge Week. Ryan, this is the last weekly roll-up that will be under proof of work with Ethereum. I know. That blows my mind. The very last one.

Starting point is 00:00:29 In fact, you mentioned that this morning. I tweet something out about it. I know. You always take my ideas and put them into tweets. Not always, but 50% of the time I do that. And, you know, like, I started to get a little bit nostalgic about it. And I don't know why. Right.

Starting point is 00:00:44 Like, I don't have to be. Yeah, I was never a miner. I know you did some GPU mining in your history. I'd never done that. But it does feel like the end of an era. And like, we're crossing something. And this is the very last roll up where Ethereum is on proof of work. And I guess that counts for something.

Starting point is 00:01:01 So cross your fingers. Next time you guys hear this bankless nation, we will be post-merged. Be all proof of steak from there on out. Okay, I'm just going to make this joke once, and we're never going to speak of it again. But like, we're praying that this is not like the Hillary Clinton election party of 2016, where they were completely confident that they were totally going to win against Donald Trump and then Donald Trump won. Yeah, that's the last time we'll ever have to make this joke. What a day that would be.

Starting point is 00:01:30 Yeah. That's just a joke. He's joking, guys. All right? David is actually highly confident. I'm highly confident. But like, so we're all the Hillary. So was Hillary. Anyway, so is Hillary. But anyways, it is like this whole, I was around in Ethereum when it was proof of work. People are going to say that in the future. So if you were here listening to Bankless, paying attention to crypto before Ethereum went proof of stake, that's pretty cool. That's pretty cool. Your kids are going to think you're cool, hopefully. there's only two times to buy ETH before the merger after the merger. It's you're only two times. That's it. You're here. And we're glad you're here with us because we've got a lot to cover today. First, will we be merged next roll-up?

Starting point is 00:02:13 We just talked about that. But we're going to go through the schedule of what the roll-up week looks like next week. Because next week is roll-up week. We're looking at Thursday for the merge date. David, what else we're talking about? We are also talking about Binance, rugging all non-Binance U.S.D. stable coins on its platform.

Starting point is 00:02:29 but it's actually a good thing. What happened there? Binance swapping out other people's stable coins. We'll talk about that. Also, Coinbase going to bat for the crypto industry, putting a lawsuit down on the table in front of the Department of Treasury because of Tornado Cash. So, yeah, Coinbase footing the bill for a treasury against lawsuit

Starting point is 00:02:51 saying that what the Treasury has done with banning tornado cash is unconstitutional outside of their jurisdiction and just against innovation. So Coinbase, nice job with that. We'll go into all those details later in the show. Grab your popcorn, guys. And of course, grab your coffee, because this is going to be a good one today.

Starting point is 00:03:09 David, before we get in, got to share some special news from our friends and sponsors at Consensus because they are giving away a free NFT to commemorate, to celebrate the merch. To prove to your kids that you were here during the merge. That's right. So I'm definitely going to collect one of these.

Starting point is 00:03:27 and if you want to be first to know about it, as soon as it goes live, so that you can mint one of these merge NFTs, commemorative NFTs for free. You need to click the link in the show notes, click this button on the Coinbase website called Be the First to Know. It's got some merge information, type in your email address, and they will send you an email when it is ready to mint, and you can mint that for free. So that's the first thing we got going on. Also, David, there's a conference that you're attending at the end of September. You should tell folks about that and some discounts that are available. Yeah, of course, Converge 2022 in San Francisco. Your boy is going to become a West Coast boy for a half second.

Starting point is 00:04:02 The September 27th through the 30th. This is being put on by Circle. This is Circle's Converge event of which there will be many speakers who you might be familiar with, Jeremy Aller, of course, the CEO of Circle. But also Mike Anderson from Framework, Vitalik, of course, will also be giving a talk and to many, many others in the industry. So if you are in San Francisco, definitely get a ticket. around San Francisco, definitely get a ticket, because I will see you guys all there. There's a link

Starting point is 00:04:30 in the show notes to get a discounted ticket. Yeah, juicy discount, too. I think hundreds of dollars off, $250 off. And that, by the way, that discount expires on the 15th of September. Expires the day of merge. So you better pick that up before the merch. But by the time we tell you next four roll up, it'll be expired. So this is the time. David acting like he's an east coaster here. So he's going to be a West coaster for a hot sec. All right, East Coast, David, let's get to the markets today. What's Bitcoin looking like on the week? Are we above 20K? No, we are not. We started the week at $20,070. We are ending the week at $19,250 down about 4% on the week for Bitcoin. Oof. I don't like that being below the 2017 all-time high on Bitcoin. Overall, the Bitcoin chart looks not awesome.

Starting point is 00:05:19 No, that's not feeling good. How about Eath? Any better news for us here? ETH is up 3.5%. So started the week at $1,500, $1,570, ending the week at $1,630 up 3.5%. So Bitcoin down 4%. Ether up 3 and a half percent. Ryan, it feels like the merch. It feels like the merge trade. Yeah, some merge music. Feels pretty merge-y. Yeah, merge-tastic. Oh, God. Eat the Bitcoin ratio, that's got to be up on the week, obviously. I did that. Yeah, up 7.8% on the week. Up to 0.085. Ryan, do you know what that means?

Starting point is 00:06:00 I bet it is the highest we've been in a long time, maybe in a year's time or so. We are about there. I think we are matched at the highs of the 2021 bull market. It also means that one Ethereum is worth 53% of one Bitcoin. You don't say. I do say, sir. That's halfway to the flipping. That's over halfway to the.

Starting point is 00:06:20 Flippening. The ETH market cap is now greater than 50% of Bitcoins. Ah, what happens? Did we unlock an NFT when that happens? No, I just get really excited. Because after like white knuckling my ETH BTC down to like 0.05, it's nice to have it recovered and then be in the green up to 0.085. David, my friend, you still play, you're still trading ratios. I thought the DPI ETH would have like just destroyed you on ratios from now on. That was only once. This ratio is working out. This ratio is working out. And there's a reason why we'll talk about it later in the show.

Starting point is 00:06:55 Well, it probably has to do with the merge, but we'll get into more details. How about the total crypto market cap? We above or below a trillion? Yeah, we're above a trillion. Last week, we're at 1.01 trillion. We are now at 1.025 trillion. So small but healthy gain on the total crypto market cap. Okay. Which is interesting that the crypto market cap is up, yet Bitcoin is down. Yeah, that's divergent does not happen often. That doesn't happen often. That's really fascinating. actually. How about eith gas prices? So what we want to know is going in the merge is are we going to be deflationary post-merge? Are we burning more eth in the form of gas fees? Or are we inflationary? Is the money actually ultrasound, David? What are we looking like? Okay, so this is actually something that we have to correct basically all times we've ever

Starting point is 00:07:43 reported on gas because I've been using that total gas distribution chart, the chart further down, and just like looking at the peak and seeing... You've been looking at this median? Nope, nope. Keep going up. Up. You went right over it. There.

Starting point is 00:07:56 The green one on the top right, the weekly gas distribution. Let's measure the peak, and that's how I would report it. But the peak is not the average, and the peak is actually lower than the average. And so what we've actually been reporting is the median, the middle number, but we're not reporting the average. And so for the month, for the last 30 days, here are the new numbers. The new numbers are in. The last 30 days, the median has been 14 guay.

Starting point is 00:08:23 The net average of gas prices over the last 30 days has actually been 18 Guay, and that is the more accurate number when it comes to the ETH burn. And remember, that's the average. The average, the average, yes. So the average is 18 guay, and the ultrasound barrier is 15. So according to the last month, we will be ultrasound by the time we go into the merge. Wow, that's great. unless blocks space demand goes down,

Starting point is 00:08:50 but you can't imagine it going down too much. You can't go down too much more. Yeah. We're almost a zero. Will our very first blocks be ultrasound or not? It's looking like right now they will be. I think that. Well, I think they certainly will be

Starting point is 00:09:02 because there will be hella activity anyways because of the merge. It's really just like, are we going to sustain that ultrasound? And like it's close. We're hanging on by like our fingernails. But like it looks pretty ultrasound to me. All right.

Starting point is 00:09:13 For the last time. For the last time. We're going to look at the merge estimator date. I know we'll get into the schedule a little bit later, but what is the projected date of the merge, date and time of the merge right now for next week? Thursday, 8 a.m. Eastern time on Thursday. Thursday morning, Eastern time.

Starting point is 00:09:31 Sorry for the Pacific Coasters. You might still be asleep. You have to get up early to watch the live stream. Not too early, though. But yeah, 8 a.m. Eastern time. It feels perfectly reasonable. Now, totally. It could still move up.

Starting point is 00:09:42 It could still move back, but it could also still move up. But 8 a.m. Eastern, I have no complaints. I have no complaints. It's going to be good. Good morning. Sorry, Pacific Coasters. We'll get to the, we're doing a lot that week, of course. Bankless is doing a lot. The Ethereum community is doing a lot. So we'll give you the schedule a little bit later after we get to the market section. But we still got more market stuff to cover.

Starting point is 00:10:01 David, you unlocked this fantastic visualization of ETH price at staking deposit time. What are we looking at? And what is this telling us? Yeah, this came from a fantastic Twitter account data underscore always, which just some really fantastic data analysis of blockchain stuff. And there's always, there's been this argument that like the eth supply overhang and like, or the eth unlock when we finally unlock is like bearish because that means everyone's going to dump all their ether. And I just think that this argument is like totally overstated. Wait, recap real quick what happens there for people who have forgotten. So, okay, if you are staking ether on the beacon chain, there are no withdrawals. And so it's a one way street. Once you deposit and begin staking ether, that's the only thing you can do. You can't get your ether back. That is continues to be true post-merge. we merge, and that is still true. We need to do another hard fork to enable withdrawals

Starting point is 00:10:51 predicted something like six to 12 months out after the merge, and then people will unlock. And people will fear that there's just this pent-up demand to sell ether because there's been like this massive staking event where people can't get liquidity on their ether. And I think that this is overstated. And so, I mean, granted, it will, like there's a supply of ether. There's like 13, 14 million ether that has not been able to be sold. But, But you have to really ask your question, who are these people that are staking on the beacon chain? And especially the most credible fear is like this $500 to $700 range where people began staking their ether. In the very, very beginning, December of 2020 when the beacon chain launched or January 2021, when ether price was still cheap.

Starting point is 00:11:35 If you remember, Ryan, January 2021 was when ether went and broke like $1,100 and then started a cent basically up to $4,000 in May. So people staked in December and January when ether was still like cheap, you know, $500 to $700 and a lot of ether became staked. Who are those people that are going first through the door into an unknown technology with an unknown stake to lock up time just to get like six percent yield on your eth? It's permables. It's probably, and it's not like they deposited all of their ether. They probably deposited like less than 10 percent because they're, you know, ether permaboles that have been here through the presale. These people are not sellers. And also, for the remainder of, like, the eth deposits,

Starting point is 00:12:19 if you are somebody who's itching to get liquidity on your ether, you probably staked with Lido, which launched the same time as the beacon chain. And that's all of the blue bars you see here on the visualization. That's all Lido deposits. And so that ether is actually liquid. And so a majority of ether that's been deposited other than that first cohort that came in between $500 and $700,

Starting point is 00:12:38 is actually underwater. So they're actually, like, you know, underwater in terms of their ETH time of deposit. deposit, not necessarily when they bought it. And so, like, this whole, like, oh, there's going to be this mass unlocking event and, like, it's going to flood the marketplace, I think, has been totally overstated. And you're saying that because you're seeing a lot of this, uh, who are, like, below current prices.

Starting point is 00:12:58 They staked below current prices. A lot of the eth that's, um, and even that, I just don't think the people who are, like, willing to take the lockup time are people that are inherently itching to sell their ether. These aren't like flimsy paper handers. Well, you know, it's funny, though. So I agree with that, and I think that's, like, a valid take. You know, it's funny, though, is I know a number of ethibles who still haven't staked very much either.

Starting point is 00:13:21 In fact, I would count, like, probably yourself and myself among those. Like, you know, when we have, we have our stake with Rocket Pool, but, like, my personal stake, I'm, like, I have my ether, and then I have my D-Gen, and my D-Gen supply is trading the ratio right now. Right. I've got some steak stuff, but I haven't also been waiting for it to be de-risk, ironically, until, like, after the merge. We'll see how the merge goes, David. And then like, so yeah, it's, it's interesting. It's certainly complex. By the way, you were- The risk of Hillary Clinton risk. You are having a debate with Jordy on this. I think the episode for listeners will come out.

Starting point is 00:13:58 It'll be live tomorrow. It'll be today by the time you listen to this, right? Isn't that we're doing? Because it'd be Friday. Yes, correct. So David will debate Jordy on this very topic. And you can catch that on the bankless podcast. YouTube as always. What's this, David? Just one last amount of revenue for the miners. Ethereum miners made $756 million in revenue in August, a head of the merge. It's the last time we'll see that headline. This is the last amount of revenue for the miners. They get two weeks in September.

Starting point is 00:14:30 But all of that will be largely deleted. Good night, goodbye, Prince. That's it. That's it for the miners. They are now retired. Yeah, I mean, a lot of them have to retire. There is not sufficient proof of work chains that can support GPU miners to support that entire industry. I think some of the miners have been stacking their ETH in order to stake, but others haven't, and they'll just move on to greener pastures in other proof of work networks.

Starting point is 00:14:56 David, let's talk. Not very green, Ryan. Sorry, not very green. Not very green. Sorry, some red ones. Yeah. Let's talk about the general markets in the macro side of things. So first, let's start with the S&P.

Starting point is 00:15:09 this is a tweet from Charlie Charlie Bello Bellello This is a tweet from Charlie Bellello The S&P 500 is down 17.7% In the first 169 training days of 2022 The fourth worth start To any year in history

Starting point is 00:15:31 So S&P down on the year You think that justifies an oof Yeah definitely So that's what we're looking at But I think that the more broad thing in macro that we should probably be thinking about right now is European energy markets and its effect on monetary policy. This is a great tweet thread from our friend Jim Bianco that kind of explains this. You want to run us through this? Yeah, he goes, Jim Bianco says, the bottom line, Europe is in an intolerable position and the public is getting angry and it's not even cold yet because, of course, energy is how people stay warm during the winter.

Starting point is 00:16:05 And so Jim Bianco continues and says, natural gas is used for power generation and space heating and is highly seasonal. Storage of natural gas is filled in the summer and run down in the winter for space heating. Like they stock up their reserves during the summer when people don't need natural gas as much and then they consume that in the winter. Currently, storage facilities are at 81% full about the middle of what you would expect, an average. Like this is about a normal amount of being full at this point in the year. Jim continues and says, too many have pointed out to the chart above and proclaim that there is no problem, But this neglects the fact that it has cost a lot to fill these facilities.

Starting point is 00:16:41 And as this chart that we're showing here says, European natural gas prices are soaring even after this week's decline. And so, yes, the reserves are acceptably full, but it's costing way more this year like three, four, five X times what it would be last year. Consequently, the cost of filling the storage has already cost, yeah, 6.5 times the sill storage in any other full season. They have the storage, they have the supplies, but they paid bigly for it. And this cost has already happened will be borne by the European population because of soaring energy bills or through some form of taxation or bailouts.

Starting point is 00:17:20 And then he continues and says, also note the natural gas storage detail above only covers about 25 to 30 percent of winter natural gas needs, meaning they will have to sip their energy straight from the pipeline in addition to their storage. so it only solves up to like 30% of the actual problem. So Europe still needs flows from Russia this winter. And before the Ukraine war, Germany got about 55% of its gas needs from Russia. And this has certainly lowered somewhat during the recent month. But gas flows from Russia are down more than 75% from a normal flow. Note this is the largest part of the Nord Stream being constrained. According to Jim, the Nord Stream pipeline will continue to be constrained

Starting point is 00:18:00 because that's the whole strategy from Putin right. now. And Jim Bianco continues and says, make no mistake, Putin knows all this, which is why he is trolling Europe with leaks requiring a shutdown of Nord Stream for an unspecified period of time. So Putin is basically shutting down Nord Stream saying just on the play that that's is going to make things really painful for Europe. Of course, none of this should be a surprise. Putin gave a speech in June saying that he was going to do this. Now he's actually doing it. And so what does all this mean? Europe has all the gas it needs, as long as they're available to drain their bank accounts for it, says Jim Bianco. So, TLDR, there is adequate natural gas reserves. It was really expensive. It only solves 30% of the problem. And that remaining 70% of that problem is going to be

Starting point is 00:18:47 expensive even further. And so how are they going to pay for it? Some form of money printing, some form of bailouts, some form of taxation. But it's not going to be pretty either way is, I think, the summary of this thread. Yeah. And what's interesting about that as it affects monetary policy is, of course, energy bills, they're soaring for average business owners and average citizens. That means everything else gets more expensive. And so there have already been some government intervention. So the UK is deploying some price caps on energy contracts, but the bills across energy have been, utility bills have been soaring nonetheless. Italy is approving new aid packages. We've seen similar aid packages in Germany. And the one in Italy

Starting point is 00:19:27 is $12 billion in government funding to help shield firms and families from surging energy costs. And so I think what we're going to see across all of Europe is essentially the government has to deploy policies and deploy funds, stimulus funds, to help consumers and help businesses pay for these energy costs. And where is that going to come from? It's not from additional tax revenue very likely. It's mostly going to be in the form. of money printing, and they're doing this with the backdrop of inflation continues to heat up, too. Right. And so they are cutting checks to people to help them pay for their energy needs.

Starting point is 00:20:09 At the same time, the European Central Bank, just last week, raised rates by 75 basis points in order to tackle soaring inflation. So it's this like rock in a hard place that central banks and governments are trying to manage, and it's a very difficult place to be. Yeah, and like, I don't know if this is bullish or bearish. It's bullish because money printing means asset prices go up. It's bearish because people are like struggling and that's never good. That can result in many different things. People are burning their bills and like protesting, paying their energy bills. So it's just like, I don't know whether it's bullish or bearish, but it's definitely chaotic. And chaotic makes me scared. Markets don't like chaos. You know, speaking of chaos, so I read this great post this week and from Arthur Hayes, yet again, Arthur Hayes, writing it up. And we had Arthur on the podcast earlier this week, too. So, guys, if you haven't tuned into that episode, it's a fantastic episode.

Starting point is 00:21:03 He's talking all about the merge trade. But maybe I could just, because I know you haven't had a chance to read this, David, but let me just summarize it for you because I think it's super valuable. Basically, Arthur is saying we're in wartime right now. People don't know it, but we're actually in wartime. And it's not talking about the Russian-Ukraine conflict, although that is a source of kinetic war. He's talking about economic war between Russia and China and the U.S. and the EU. And so his central thesis for this article is like, we're in economic war. Wars could escalate in various ways, but at least acknowledge we're in economic war.

Starting point is 00:21:42 We were also previously in a war against a virus, in a COVID war. Right. And so we, and we saw all sorts of restrictions and money printing as a result of that. So the tale of the 2020s has, so far, has been kind of like war. It's economic wars, yeah. Right? Economic wars and wars against viruses and COVID. And what happens during war when you look at it historically? Well, two things happen. Inflation, which we've talked about a lot. But the second, which is somewhat interesting, is capital controls. And the reason nation states flags, as Arthur calls them, put capital controls in place is so that their citizens can't get out of the inflation so that we're all kind of in it together. If we are going into an economic war or total war mode,

Starting point is 00:22:29 then all of the citizens need to be united and spend whatever is necessary in order to help the government and help the people, help the nation win the war. And so the very first thing that nations do,

Starting point is 00:22:43 when wartime gets worse, is they impose capital controls and sanctions. And so we saw just glimmers of that, I think, during COVID. We're seeing a bit more with the Russian economic sanctions. But Arthur goes through history and talks about times where it's gotten a whole lot worse. And this, I think, is an interesting piece of history that I would personally like to study a little bit more.

Starting point is 00:23:10 And maybe we can do a bankless episode on this in the future. But let's take the U.S. in World War II. Did you know that before World War II, so it's during the Great Depression, FDR put in place an emergency banking act in 1933 that essentially meant a gold confiscation. So the problem was citizens at that time were trying to escape from inflation, from other economic wars, by taking their assets and putting it in coins, bars, gold certificates. and FDR basically made that illegal. You couldn't exit the existing Fiat system

Starting point is 00:23:53 through a store of value like gold anymore. And did you know that gold, private citizens, American citizens owning gold, was actually illegal until December 1974. So this was like a capital control that lingered. And this was in the U.S., which they came out of the Depression fairly strong, They actually won World War II.

Starting point is 00:24:17 If you look at other countries like Germany, for example, in Japan, the capital controls were far more severe. There was no way for the average citizen to actually escape. And so Arthur is kind of adding these things up. Like we're in kind of this early wartime period. Things could get worse. They may not, right? Like hopefully probabilistically, you know, things will end up okay, but they could get worse.

Starting point is 00:24:41 And when they do, expect inflation. and then also expect capital controls. And his overarching point toward the end of the article is basically this. The time to escape from the Fiat system is not after they put the capital controls in place. So it's basically the time to buy assets, non-inflationary assets, like Bitcoin, like Ether, in the digital mode, maybe like other things. Real estate. Yeah.

Starting point is 00:25:09 Maybe. Or like that can be capital controlled very. well by the nation state. Ideally, you want to kind of exit the system entirely, and so you're not dependent on the existing banking system. The time to do that is now, is this point. And yeah, I guess some dark thoughts this week, like, as I was thinking about all of these things, but I think he's absolutely right. And the basic calculus as to like what happens during fiat currencies during wartime, right? Like, war time is destruction. Like, capital gets destroyed. Like, we spend capital to build a tank, the tank goes to war, tank blows up, that capital gets destroyed.

Starting point is 00:25:43 Fiat money, which paid for that tank, becomes like printed and inflated to move atoms. And what is ultimately war is like it's a fight over the way that the physical world looks. And so people like governments are using their fiat currencies as like the ultimate power that that creates and supports and directs the resources of a world, an army. And when two armies are going at each other, like what happens is that ultimately the most downstream net effect of war is that inflation happens. And so, like, destruction creates inflation. And so, and why there's capital controls is, like, the nation state is like, yo, we are all in this together. Y'all can't sell your dollars because we need to sell the dollars to pay for war.

Starting point is 00:26:27 And so you guys can't sell dollars. Only we can sell dollars. And we sell dollars by minting dollars and then selling them. And so, like, you know, usually this works when the populace is behind the effort. This is like, you know, buy war bonds in World War II. And people like, okay, I'll buy war bonds. You know, like, my son is going to war. I feel really scared for his life.

Starting point is 00:26:45 How can I help? I'll buy war bonds. Ryan, I don't really think the populace of today is in that kind of sentiment to buy war bonds. Certainly not now. Like Arthur goes through the kind of the return on investment of war bonds, basically, even for the U.S. who actually won the war, and this is like negative 40 to 60 percent. If you actually bought the war bonds, you lost money in real terms. Some people lost lives.

Starting point is 00:27:09 Some people lost money. It was a group effort. Yeah. So anyway, very interesting, but I think that people have to start thinking, we have to start thinking about fiat currency and what it actually is, and it's actually just a form of short-term debt to the government. You're lending money to the government in exchange for your hard assets, like commodities, like energy, essentially.

Starting point is 00:27:29 We're starting to see that in Europe play out. Anyways, back to the merge. Back to lighter news. What's coming up next, David? Coming up next to the merge. Did you know it's happening next week? I hope you did, because we talked about it earlier in this episode and last week and the week before that. But it's actually next week. So we're going to talk about the merge schedule,

Starting point is 00:27:45 what you need to know, what you need to do, all that stuff. Binance, rugs, all non-USD stable coins. But it's a good thing. We'll figure out why. And lastly, Coinbase proposes something big to MakerDAO. This is unrelated to how Coinbase is also suing the treasury. We're talking about all of these things and more. But first, a moment to talk to some of these fantastic sponsors that make the show possible. Rocket Pool is your decentralized Ethereum staking protocol. You can stake your eth in Rocket Pool and get our ETH in return, allowing you to stake your ETH and use it in Defi at the same time. You can get 4% on your ETH by staking it with Rocket Pool, but you can get even more by running a node. Rocket Pool is the only staking provider that allows anyone

Starting point is 00:28:24 to permissionlessly join their network of validating Ethereum nodes. Setting up your Rocket Pool node is easier than running a node solo, and you only need 16Eth to get started. You get an extra 15% staking commission on the pooled ETH that uses your node to stake. You also get RPL token rewards on top. So if your bullish ETH stake, you're bullish ETH stake, you get E-staking, you can boost your yield by adding your node to the decentralized rocket pool network, which currently has over 1,000 independent node operators. It's yield farming, but with Ethereum notes. You can get started at rocket pool.net, and you can also join the rocket pool community in their Discord. You can find me hanging out there sometimes in the chat, so I'll see you there.

Starting point is 00:28:57 Maker Dow is the OG Defi Protocol. The first Defy Protocol to ever exist, even before we called it Defy. MakerDAO produces dye, the industry's most battle-tested and resilient stablecoin. Using Maker, you don't need to sell your collateral if you need liquidity. Instead, you can spin up a Maker vault and use your collateral to mint dye directly. With Maker, the power to mince new money is in your hands. And there's something new in the Maker Dow ecosystem. Every time a new MakerDAO is opened, the owner can claim a POAP, which contributes funds to one tree planted,

Starting point is 00:29:25 an organization with ongoing global reforestation efforts, creating a world where digital participation and the health of our environment can live side by side. Soon, Maker will be present on all chains and layer twos, bringing the biggest and best Defi credit facility to everywhere there is Defi. So follow Maker on Twitter at MakerDow and learn from the oldest and most resilient Dow in existence. Ryan, the last hard fork before the merge happened. It's called Beltricks.

Starting point is 00:29:49 Happened last week. It's activated. There are now zero more steps between where we are now and the Ethereum merge. The next thing to happen on Ethereum is the merge. And the merge is happening next week, September 15th, Thursday morning. Is that September 15th? Yes. September 15th, Thursday morning, 8 a.m. Eastern Time, 5 a.m. Pacific time later in European times.

Starting point is 00:30:14 But that's what's next. The merge. The merge is next. Okay, so Belatrix being the last hard fork before the merge. How did that go, David? Can you go over that with us? It went super, super well. Here is a tweet thread from Christine Kim, who's live tweeting as Belatrix happened. And then, so some quick stats that she put forth. Network participation rate, 97.8%. Active validators, 420,000.

Starting point is 00:30:41 Offline validators, 1,100. That number can be expected. And then also here is just like a quick cheat sheet of client diversity. Everything is below 51%. That's good. We could still get prism down, but it's not really going to stop us from doing anything. And then, Belatrix happens. And as the other side of Belatrix, every hard fork you'll lose people.

Starting point is 00:31:01 people that aren't ready. And 95% of people hard forked with the Belltricks update. And so like, you know, if we saw 95% with the actual merge, that would be fantastic. So 94.94%. And so a few, so the 11,000 validator, offline validators jumped up to 17,000. But you could imagine these people just like didn't update their nodes. All they have to go do is download more software, fix something, you know, unplug it, re-plug it in, something like that. Is this right? Number of active validators, 403,000? Correct. That is the beacon chain validators, yeah.

Starting point is 00:31:36 Not unique numbers of computers, but like 403,000 unique instances of 32 Ether, which is one validator, of course. And so 94.94% succeeded, and like all we need, Ryan, is 66%. All we need is 66% for it to be a flawless merge. And we had 94.94%. Well, in my school grown up,

Starting point is 00:31:58 94% was an A. Even if it was below 66%, all it needs is like 24 hours to get above 66%. So it's not like this one moment we need to be above 66%. We just need to get to 66% like soonish. Is this what the merge is going to look like? I'm looking at a meme here. It's just a guy staring at his computer and then he's got a serious face and then he's got a little celebratory thing.

Starting point is 00:32:20 It is like this naturally like anticlimactic thing of this like invisible software. It's not going to be. Not this time. We're going to make it fun on the social layer. But yeah, I mean like it's just co-examactic. I guess in the background, not a lot's happening. What's this tweet saying, David? Yeah, this is Adrian saying, Belatrix looking good so far.

Starting point is 00:32:37 Again, this is moments after the merge. Definitely some people who didn't update, probably around 5%. Turned out, that was right. But money at stake, we should see that get fixed up pretty quickly. So Belatrix, the update doesn't actually mean too much. Like, you go offline if something's bad, but you get the leakage response. Like, because there's money at stake with the merge, then there is money at stake with Belichicks because it was the beacon chain.

Starting point is 00:32:59 Yes. But like, this is why this has such a good success rate and why even if... It repairs fast. It heals fast. It repairs so fast because there's financial incentive. Unlike all previous test nets, which is like, yo, we're going to do a dry run. There are, like, you know, ticket paying audience members in the theater waiting to see the merge. And so, like, you don't mess up that because there's incentive.

Starting point is 00:33:18 You're losing ETH every few minutes, right? Yeah. This is getting some exposure in mainstream. I've seen a number of articles. This is an article from The Economist about the Merge. the title is, the future of crypto is at stake in Ethereum Switch. A lot of these articles, David, they're pretty surface level, but they're also pretty good. Yeah, and they're also about energy, obviously.

Starting point is 00:33:41 They're like, oh, yeah, look at that subtitle. Can decentralized networks reform themselves? As in, like, repent for their energy consumption. And look, there's always been like, they're not going to talk about ultrasound money. They're not going to talk about ether's deflation. They're talking about how Ethereum is going to go green. That's all right. They've got to leave some space for us to talk about it.

Starting point is 00:33:58 The Conters can't steal our content. Come on, guys. I think a lot of people are also wondering whether a proof of work chain will remain. And I think people are just curious. If I have some ETH, will I get a free fork? They've maybe received a fork funds in the past. And there is talk of Ethereum proof of work fork

Starting point is 00:34:20 that could be happening. What are we looking at right here on Coin Gecko? I think the chart we have pulled up is for an asset called the Ethereum, Proof-of-work fork IOU. What is this thing? Yeah, this is basically a tokenized future of the Ethereum Pau chain. Ryan, I want to say this extremely clearly. I've said it all the other times on the show. I think listeners should expect getting $0 from the ETH proof of work fork.

Starting point is 00:34:44 I think this is a game that's being played by traders who are trying to meme this thing into existence. I think people who are positioning themselves to capture that ETH proof of work token are going to find themselves receiving roughly $0 from this rate. Unless they're super fast, unless they're super fast and sophisticated in playing this game. You're talking about like just normal retail traders. Normal retail traders. I don't think there's going to be this brand new

Starting point is 00:35:06 proof of work chain that spawns off. And like you see extra ether show up in like a different wallet. Like it doesn't make any sense. I can go to the reasons why, but it would just be me ranting for like 10 minutes. I know here we're looking at kind of a futures market, right? So this is, you know, but it's about like two to three percent or so the price of ether. It's $31 for one proof of work ether, as opposed to the current price of ether, which is $1,132. And this is one hypothetical, right? It doesn't even exist yet. It's hypothetical.

Starting point is 00:35:37 But, you know, another way to look at this, of course, is to look at the liquidity on this. We're talking just such low liquidity, right? 24-hour volume of, you know, $350,000. It's not nothing. It's kind of a low-ish cap. You know, defy token would have something similar. So don't expect it. It could happen. There's a thing. We'll answer some questions. I think we had a lot of questions this week about what do you do in case you want to receive a hypothetical ETH proof of work coin?

Starting point is 00:36:05 Is there anything you have to do in case that happens? The good news is not too much. A hypothetical scenario that it happens. Yeah, we'll talk about it. David doesn't, do you not want this to happen? I just don't think it will. Like, okay, I'm going to speed run this. Like, how are these users going to access this chain?

Starting point is 00:36:21 Are they going to update their RPC endpoint and inferior? somebody inferior is going to have to accept it, which means they're going to have to run their own node that connects to the Ethereum non-proof of war chain, which means they're going to download old consensus software. There's going to have to be a client for this thing. People are going to have to...

Starting point is 00:36:39 Where is all the infrastructure? If they have their funds in like, you know, Coinbase and Exchange, Coinbase would have to obviously, like, release it to them. There's a lot of steps. Polonex is going to do that. But if just one exchange services this, like service for people, it's not anything. This does feel.

Starting point is 00:36:55 different than previous forks that we've seen, which actually had some traction, like Ethereum Classic for one, had some traction. But even in the Bitcoin world, Bitcoin Cash, it was like Roger Vair. It's like, yeah, we've got a mission. Yeah, we've got a, you know, a developer community, like, no community is rallying around the Heathproof. Other than the miners, and the only reason why the miners are rallying on it, because they want to dump on you because that's their business model. All right. Well, yeah, I totally see the point. So don't expect any free bucks. I wish I wish we had better news for you, but, you know, if you do see that token, maybe, like, you know, sell it real quick.

Starting point is 00:37:30 Yeah. Poor everyone else does. You know what's kind of bullish about this, though, David? And this is really good to see, is the at-home staking community. 100%. Shout out solo stakers. What are we looking at, David? I know we've got a bunch of images lined up.

Starting point is 00:37:44 Yeah, Super Fizz, who's just a fantastic community member of the Ethereum community, just really focused on proof of sake, the merge, and also just fundamentally bullish on stake from home. He started this whole steak from home meme. And I found all of these tweets because he retweeted it. So just shout out to Superfiz. And this is just like this hodge group of people who like live at home and they're staking at home. Like look at this mess.

Starting point is 00:38:06 Look at this absolute absence of cable management while this person. Where's the staking node? It's that little black square. It's a little black square right there. Connected to the router. Like with a tiny ass keyboard that doesn't even like. This does not look like a data center. This is not professional.

Starting point is 00:38:20 This is just like amateur at home staking. Here's somebody with a like. the panda sticker on their like Intel NUC, their tiny little computers running Rocket Pool. Here's another one. Like, again, a stake at home, smaller than a pen. Like, we're going to keep, we got like 15 of these. Smaller than a pen. Yeah.

Starting point is 00:38:36 So like here's another one connected to this battery. Oh, this guy's beefy. Yeah. Well, no, so that's the battery. It's the tiny little, it's the tiny little like, the Intel machine that's up or up in the shelf. But it's on the battery in case like the power goes out. Here's somebody having their tiny little can be a little stake computer on top of their

Starting point is 00:38:53 PS4 next to their family photos next to their baby like they're a grandkid or kid or something I don't know it's another child my validator is my child yeah here's one is it's a laptop just like you know sitting on some shelves laptop sitting in the basement right this one looks like yeah like here's here's a nice like professional looking one like it's very very clean yeah you can see this on our battle stations maybe uh here's one with like a stuffed to dog next to it like right next to like all their other server stuff uh here's one sitting under a shelf right next to somebody's modem with a fan on it to make it cool. Here's one with a post-it note that says don't touch. This is Daddy's.

Starting point is 00:39:30 Signed Daddy. Yeah, kids don't touch this. Next to like some home server. Because kids, if you do touch it, the family loses money, all right? Don't touch dad's validator, please. Here's like a custom made raspberry pie with like some ETH branding on it that somebody clearly just like put together in like a wood shop. You know, here's somebody like with their, again, like a very small box and Intel and you see thing.

Starting point is 00:39:53 with like the little temperature monitor. This is inside of a home entertainment system. Yeah, right next to their like home family TV and Xbox. Right, right next to your fire stick. Right, they got that little like monitor. Yeah, like this is great. Like here's like somebody is like cooler, bigger one. I think this might be actually superphys.

Starting point is 00:40:11 Here's one like baked into a shelf just like built in. Right. So like that's their hue light mode and like they have it like hooked up to their shelf. That is awesome. Yeah, it is great. Here's Austin Griffith. You know, pointing behind him. This is his setup, of course.

Starting point is 00:40:23 course. Here's one with like a Vitalik photo. Okay, so we're getting to the good ones here. This guy is staking in his mobile home. He has a full-size computer and he's in the force of Washington staking mobily via satellite. Like how are you? You're not even on the grid and you're sticking. He is off the grid. This is like solar powered or something staking. Uh-huh. How crazy is that? Not even connected in a campsite. Amazing. Amazing. And here's want to hit this guy has it in his kitchen up on top of his shelves and so like it's above his kitchen cabinets it's like i just love how this is in this dude's kitchen and there's that mixer is there's the cuisine art the kitchenate like quezon art that like somebody's making cookies with like i'm sorry

Starting point is 00:41:09 you're not seeing this kind of stuff with professional proof of work minors this is in my mind the reason why we can share all of these photos is because of what the purposes of proof of work Yeah, tell us. So why does this matter? Is this just like hardware porn? Like, why are we even? So it's a little bit hardware porn, but it's the point is, is that Ethereum becomes as decentralized as capital and hardware, which are very fundamentally decentralized. And that was my take that I put in here. It's like the reason why we can share these photos is because how like Ethereum exists in people's homes. This is, this is what decentralization for the people. Yes. This is what decentralization looks like. Right. Scroll through it. It's like, run this from. home. This is your check on the network where individuals have power over the network. This is you out a change that they don't like. You making just a little bit of money, four or five, six, seven percent on your eth for just doing the network thing, doing the

Starting point is 00:42:05 eth thing. I thought you couldn't run a validator from home. I was told this. I think a lot of listeners actually haven't heard that because the Bikorners who say that have just become more and more and more relevant these days. Yeah. What is this from Jonathan Mann, of course, put together a nice song. Should we play it for people? Yeah, Jonathan Mann is the song a day man. So, of course, he sang a song about staking from home. So here it is. All right, a lot to celebrate over Merge Week, of course, including solo stakers. But David, let's talk a little bit more about the stable coin wars, because Binance did a thing this week. Did a thing. They have stopped supporting USDC. This is, of course, one of the largest

Starting point is 00:44:00 stable coins in the world, second to tether. USDC. It's kind of a coin-based source. Circle American regulated bank stable coin type product, and Binance isn't having it anymore. Essentially, they have converted all of the USDA funds over to their own stable coin, which is called BUSD. This is the Binance Stablecoin. Similar product in a lot of respects, not as American regulated, certainly not a coin-based product or a circle product either. What's going on here, David?

Starting point is 00:44:28 Yeah, and it's actually not just USC. It's also Pax Dollar and True USD. these are much smaller stable coins, but all three of these stable coins are just being swapped on the back end to BUSC. So if you had USE or Pax or True U.S.C. deposit into Binance, congrats, you now own BUSC instead. A different stable coin.

Starting point is 00:44:47 A different stable coin. This is kind of like an analogy, I think, is if, you know, when you deposit funds into Wells Fargo, they're actually like dollar IOUs. They're Wells Fargo dollars. They're Wells Fargo dollar IOUs, right? And if you deposit it into Chase Bank, They're Chase dollar IOUs.

Starting point is 00:45:03 This is as if Chase Bank was holding Wells Fargo IOUs, and they said, no more Wells Fargo IOUs. They're just all Chase IOUs now. It's kind of what's happening here. Yeah. And like, no capital was lost because it's all one for one. It's all like kind assets. But just like, you know, the bankless take here is that bankless banks can do whatever

Starting point is 00:45:22 they want with your money. Other banks throughout history, like central banks have said like, you know, $20 bills, no longer valid, just like that. This kind of feels a little bit like that, but at least no users lost their money. And actually, there are some huge proponents of this saying it's actually a really good move, mainly because you can actually still withdraw USC. So if you have dollar, it's basically making all dollars on Binance homogenous, which is actually a good move. It's fully liquidity.

Starting point is 00:45:49 Right. So like, yeah, so like you just now have Binance dollars, which is literally what it's called. But if you want to withdraw USDC to Ethereum, they actually still give you that option. So like you deposit dollars into Binance. It gets turned to BUSC on the back end. Your finance account. So it's like, okay, you accredited this many dollars. And then you can withdraw those dollars and turn it into what do you want to turn it into?

Starting point is 00:46:09 USC on Ethereum, die on like optimism, like true U.S.D on avalanche. Like it still lets you do that. It's just homogenizing dollars in the deposit side. And this is actually very good for liquidity because like rather than having like Bitcoin trade against USD and BUSD and UST. It's just now it's just BUSC. So actually these order pairs actually. actually get more liquid.

Starting point is 00:46:30 Interestingly, they did not do this for Tether. And I think that's because of the manual redeemability of Tether. I think this is the case. And so the take here is that it's a good U.S. upgrade for depositing stable coins, except for Tether. Tether gets a little bit left out here. And so there's a prediction here that says that this moves leads to a gradual net share shift from U.S.T.T. Tether to Binance Dollar.

Starting point is 00:46:57 and USDA. And this is also echoed by Jeremy Aller, who is supported of this move by Binance. And so the argument here is that this actually cuts out steps for USDC users who want to trade on Binance. And so this is actually removing a step and still enabled everything that you could do before. FTX actually already had this and built into their exchange.

Starting point is 00:47:20 And so, but like this actually, this feature doesn't get embedded into US, into Tether, because Tether has this like Tethus, plus one settlement time. I'm a little bit hairy on the details, but that's the hot takes here. Yeah, Jeremy Lairr, of course, is the CEO of Circle, who would be very incentive to respond negatively to this if he felt it was negative to USDC. Yeah, I think there's an element of this is news, but it's also kind of non-news. There's also an element of like, rest assured, this is definitely, you'd say it's in Binance users' best interest, maybe, from a pooled liquidity perspective, but it's definitely in Binance's best interest, right? They want to propagate B-U-S-D.

Starting point is 00:48:00 And what's interesting about this, to me, is, like, we're fine with centralized stable coins. Like, the bankless position is, hey, they can provide some good U-X, right? U-S-D-C, B-U-S-D, whatever it is, but we should also recognize their limitations. And these are effectively bank coins, sometimes on crypto-rails, but they're issued by bankers. Both are fine. It's good U-X. but neither of them are decentralized. And I do think that each bank, over time, of course, they're going to be biased towards their own stable coin. The interesting juxtaposition, of course, is Ethereum is credibly neutral and biased towards

Starting point is 00:48:38 neither. It cannot favor USDC. It cannot favor BUSD in any stretch. It's interesting when you consider, you know, something like the Binance chain, for example, you can very easily see that maybe favoring a Binance-centric stable coin over. another type of stable coin. We're not going to get that on a truly decentralized system like Ethereum. So banks will be banks. They're going to play their bank games, and some of it will be good UX, and some of it will not be detrimental, but it's definitely not decentralized.

Starting point is 00:49:08 David, speaking of banks, playing bank games. Coinbase and MKR, there is Coinbase proposing some kind of agreement to the maker community? What is this? Yeah, Coinbase, the exchange, is making a proposal to MakerDAO the Dow. And so they make this proposal for MakerDA to take one-third of its U.S.DC, which is about 1.6 billion. 1.6 billion is one-third of it, so multiply that by three. And you get the total supply. Again, can't do math. Listeners do that in your head. But Coinbase is proposing that 1.6 billion U.S.DC in Maker's vaults be deposited into Coinbase to earn yield with Coinbase. And they are offering Maker 1.5 yield on their 1.6 billion USDC. And MakerDAO

Starting point is 00:49:54 currently getting 0% on that USC's. So this would net Maker Dow about $24 million in yearly revenue if they agree to do this. And so some of the parameters here is that Maker will pay zero custody fees on USC held by Coinbase Prime. So Coinbase is charging Maker for this. Maker governance will be able to freely mint, burn, withdraw, and settle almost instantaneously

Starting point is 00:50:16 in USC less than six minutes, consistent with Coinbase's Prime standard offering. One of the reason why this works is this highly automated. And then the rewards, from the USC account with Coinbase will be calculated based on the weighted average of assets on the platform each month and paid out on the fifth business day of the following month. And so some takes are like, well, you're taking collateral that's backing Dye and you're giving it to Coinbase. Does that offer any sort of security risk or centralization risk?

Starting point is 00:50:41 Rune responded to this criticism saying from a regulatory legal and seizure risk perspective, this proposal changes nothing because there was already centralization risk with the USDC anyways. And also like Circle and Coinbase are kind of in bed together. like formally they have a formal agreement and so like there's not additional risks here another community question came in like why not advocate to like ava or compound you would improve censorship resistance reduce centralization risk and it's likely less likely than a risk to a custodial service and I guess actually the answer to this is exactly what I just said USC is already a

Starting point is 00:51:15 it's already custodial right it's already custodial yeah but also it would nuke the yields inside of defy and so putting out USC in to defy sucks up defy yields and they actually want that defy yield to actually go work for

Starting point is 00:51:29 die. So they're using their USC for Coinbase to get external yields. So it's actually going out and getting external

Starting point is 00:51:35 yields into crypto rather than just like having this internal circular economy where we're just like lending each other are stable

Starting point is 00:51:42 coins. So that's that. I guess it's interesting. A few maybe hot takes for me on this are like number one, isn't it

Starting point is 00:51:50 cool that a company like Coinbase is proposing a proposal on the maker governance forums. That is cool. That's really cool. That's really neat. So I love that piece of it.

Starting point is 00:52:00 And I also think, I mean, Myther Hodd take is probably like, Coinbase is probably looking at some of the discussion around the USDA concentration in the MKR. Remember we talked about last week these factions of the maker community and Die. And, you know, one faction wants to completely eject all centralized stable coins from the backing of die.

Starting point is 00:52:21 And here's Coinbase coming in with a sweetener. 1.5% annual APY if you don't. And so that's interesting as well. So yeah, it's always fascinating, David, to see how all of this, you know, has evolved. And, you know, Maker's a relatively new project, like five years old.

Starting point is 00:52:38 Now here it's getting on the governance post. It's not new in crypto terms. It's new in global terms. It's a new kind of like operation, new type. It's new in the same way that crypto is early. Exactly. My hot take here is that this actually doesn't fit the protocol sync thesis. I always thought Coinbase would be depositing money into MakerDAO, not making proposals for MakerDAO to deposit money into it.

Starting point is 00:53:06 That actually seems inverted from what I would expect because this is like a protocol is on top of a centralized entity rather than a centralized entity being on top of a protocol. That's my hot take. That actually didn't really fit my model here. Yeah, I see that as well. It's interesting to ask what actually is Maker. Right. Like, it's not quite a bank. It's not fully a protocol.

Starting point is 00:53:29 What is it? It's some kind of new thing in the middle. It's a Dow. I got a new sort of bank Dow. David, what's coming up next, though? It's not the last time we're going to be hearing from Coinbase in this weekly roll-up because they are also suing the Treasury Department. So go pop your popcorn once you're done with your coffee.

Starting point is 00:53:45 And then also, the ENS August numbers are in, and they're hot because they're always been hot. So we're going to cover those numbers and more right after we talk to some of these fantastic sponsors that make the show possible. There is a brand new staking feature in the Ledger Live app today. We all like staking the assets that we're bullish on and now you can stake seven different coins inside the Ledger Live app.

Starting point is 00:54:06 Cosmos, Pocodot, Tron, Algarians, Tezos, Solana and of course Ethereum. With Ledger Live, you can take money from your bank account, buy your most bullish crypto asset and stake that asset to its network all inside the Ledger Live app. Through a partnership with Figment, Ledger also lets you choose

Starting point is 00:54:22 which validator you want to stake your assets with. And Ledger is running its own validating nodes, offering a convenient way to participate in network validation, and it even comes with slashing insurance. Ledger Live is truly becoming the battle station for the bankless world. So go download Ledger Live. If you have a ledger already, you probably already have it and get started securely staking your crypto assets.

Starting point is 00:54:41 The Brave Browser is the User First Browser for the Web3 Internet, with over 60 million monthly active users. And inside the brave browser, you'll find the brave wallet, the secure multi-chain crypto wallet built right into the browser. Web3 is freedom from big tech and wall street. More control and better privacy, but there's a weak point in Web3, your crypto wallet. And most crypto wallets are browser extensions, which can easily be spoofed. But the Brave wallet is different. No extensions are required, which gives Brave browser an extra level of security versus other wallets.

Starting point is 00:55:08 Brave wallet is your secure passport for the possibilities of Web3 and supports multiple chains, including Ethereum and Solana. You can even buy crypto directly inside the wallet with Ramp. And of course, you can store, send, and swap your crypto assets, manage your NFTs, and connect to other wallets in Defi apps. So whether you're new to crypto or you're a season pro, it's time to ditch those risky extensions and it's time to switch to the Brave wallet. Download Brave at brave.com slash bankless and click the wallet icon to get started. It's still air drop season, David. One inch users on optimism are receiving an air drop of 300,000 OP tokens. In order to receive this, you had to be a highly active one inch user on optimism.

Starting point is 00:55:46 and you get a little airdrop bonus incentive in the form of OP tokens. Any thoughts here? Yeah, this is just really the effort of distributing OP tokens to users of optimism. Again, using crypto rewards you, at least it tends to.

Starting point is 00:56:00 This one is unique, though, in the sense that one inch already had an airdrop with a one inch token, and they already had users on optimism. I'm not really sure if this is actually like moving the needle of just like incenting usage of optimism, but it is distributing OP tokens widely, which I guess is good.

Starting point is 00:56:23 I'm actually left with more question marks on than anything on this one. I think the new meta for airdrops is you've got to be doing stuff on layer two. That is maybe one of the learning lessons from this, which is in order to get your nextirdrop hit, you've got to be active in a layer two like optimism or Arbitrum or like later ZK Sync, StarCware and others. So take note, my friends. Let's flip over to NFTs, though. Do you know Reddit?

Starting point is 00:56:48 We talked about Reddit launching NFTs, except they're secretly not calling them NFTs for the Reddit community. And they are actually selling fairly well, David. Some of these NFTs are selling for over $2,000. And all of the ones that they've released so far have sold out, which is pretty fascinating, looking at some of the NFTs here. This is just good adoption of Reddit. I'm loving where this is going.

Starting point is 00:57:14 I want to see more. I want to see more. What's delivering more, though, Ryan, is the August numbers for ENS. So we got the August numbers. 301,000 new dot-eath registrations. So minting new Ns names is still hot. That's $4.7 million in protocol revenue, of course, all going to the Dow. And we got some unique new holders, of course, 34,000 new Ethereum wallets that are holding at least one new E&S name. And of course, like always, 99% of domains on OpenC are being sold as ENS because I don't even know what another like domain service provider is. So, you know, the four, the, the 10K club where like if you have an ENS number that is zero through nine nine nine nine nine has like a floor price of three, which is wow, pretty good.

Starting point is 00:58:03 Really? Yeah. That's maintained. It wasn't just a blip, huh? No, not just maintained for sure. That's funny to me that ENS names are like they're the bear market NFT. They really are. They've become like, like I saw them last week. Converge on fundamentals, right? Like these are non-speculative. These are totally going to be around for the future. Forget the JPEGs. You can actually use a domain.

Starting point is 00:58:20 Just text. Just text. No J-PEGs. Just text. But like useful. I mean, like, you can use it to like name your eth address or like, you know, direct an IPFS website or something like this. And you can't do as much with your JPEG.

Starting point is 00:58:33 So last week I saw they were actually exceeding the trading volume of board apes. Yeah. So the trading volume was 2,300 ether in the last month. board apes was at 2,120 ether. Oh, I'm the captain now. 9,000 ENS names have changed hands in the last seven days. So not only are the

Starting point is 00:58:53 ENS like registrations happening, new E&S domains are coming into the world, but like people are also just like trading them around too. It's crazy. bullish. I kept the ENS air drop too. David, I know if you did, but I wasn't able to claim mine. My mind got burnt. Oh, sad. You lost tokens?

Starting point is 00:59:09 I lost tokens. Yeah. them. But I don't have to pay taxes on them. That's what I'm claiming. If I can't, if I can't claim the tokens, I can't pay taxes. Somebody fact-checked that for us. I lost the private keys. If I don't have the private keys, I can't claim the tokens. Well, if you said it in a podcast, it's 100% true. So if any IRS agents are listening to this. The IRS rating is like, okay, deduct $500 of dues paid by David Hoffman. Like, okay. Yep, they're listening. That's how taxes work. One thing that remains bullish is NFTs for public goods. What is Trent doing here with the Protocol Guild in this NFT issuance?

Starting point is 00:59:46 Yeah, so the Protocol Guild is this guild that's really meant to provide things for the market, for the community that people might want, and then sell those things and then give that revenue to protocol devs. It's a bake sale. Yeah, it's like, yeah, lemonade sale, bake sale. But the protocol devs, you know, development, funding development has always been like a problem in open source world and also with Ethereum. And so the Protocol Guild has gone after that problem. And so they are making NFTs with like actually really just like big deal artists and those platforms.

Starting point is 01:00:18 And so there's this whole like network around like producing some really cool NFTs. So like while it seems like a bake sale like, oh, like buy a cookies. It's big. It's big. This is like these are coveted NFTs. And so I think people are going to play the speculation game on these things. Look at this. 120 Ethereum core devs that this goes to being funded.

Starting point is 01:00:34 Yeah. Being funded. And that's amazing because guess why. why next week is merch week, David. It's because of these people. Right. It's because the Ethereum Core devs. They made it happen.

Starting point is 01:00:45 And so now is a good time to celebrate them. You could do so by purchasing an NFT, and the proceeds go to the devs via the Protocol Guild. I've checked out some of the art on these things, both from, like, some of it's not released yet, but you can just check out. Because like some artists are on board. Other artists haven't been revealed yet.

Starting point is 01:01:02 But like this is not just like a casual thing. This is like a big deal thing. like artists are coming secret artist, blah, blah, blah. But like the art of what has been revealed is pretty damn cool. Pretty damn cool. Another way to commemorate the merge. I will be participating in this. Yes.

Starting point is 01:01:16 Okay. Ooh, yes, here we go. Okay, Victor, Victor Bunin out of Coinbase. He works at Coinbase Cloud, but definitely just like Cora deep in Coinbase says, today we announced that Coinbase is funding and supporting a lawsuit by six individuals against the Treasury Department sanctions of Tornado Cash Smart Contracts, an open-source piece of software. You can read more about the details here.

Starting point is 01:01:34 So six individuals are suing. the Treasury Department and Coinbase is footing the bill and basically coordinating everything. Here we go. Nice job, Coinbase. Let's do this. This is basically... Are you ready to rumble? This is basically... So you guys know, because you've been listening to the roll-up the last few weeks, Dave and I have talked a lot about Tornado Cash, the OFAC sanctioning of smart contracts. And the unconstitutionality of it, or the illegality of it, we've done a number of episodes about that with Jake Trevinsky. And the question is, okay, what is the crypto community going to do about it. And if you're an individual, right, with an eth

Starting point is 01:02:10 address, and your government has just told you, if you use tornado cash to try to keep your transactions private, you could go to jail for 30 years, what can an individual do about it? How can you fight back? Right. So now we have the infantry coming in. We have Coinbase stepping up and actually suing the Treasury Department on behalf of funding the funding the suing of the treasury funding the lawsuit of the treasury department on the behalf of six plaintiffs so six individual citizens

Starting point is 01:02:43 like you and I who are they are representing and they are funding they're paying the legal bills for these individuals it's badass man super chat of coinbase coin base to do this they don't have to do this

Starting point is 01:02:55 this is crypto native values above and beyond in my opinion pretty excited I don't know how much is it going to cost I imagine a decent amount but overall I actually do expect this to be like EV like expected value positive for Coinbase because from a brand perspective from from brand perspective but also ensuring that like coinbase can integrate with other

Starting point is 01:03:14 DeFi projects maybe they'll integrate directly with like tornado cash but if they stop the unwarranted regulation at tornado cash then they're like free to like do stuff that's you know not so like ridiculous like uh not so dubious as privacy stuff just like you know could compound a uniswap it really just stops the project of dubious regulation so they don't have to fight it later. So I think they're just thinking forward. You've got to draw a line in the sand somewhere. Yeah.

Starting point is 01:03:40 Is that what you're saying? Yes, exactly. I mean, and this is where Coinbase is drawing a line in the sand. It's great. This is a blog post from Brian Armstrong, the CEO of Coinbase. It's not legal. This is Brian Armstrong, the CEO and co-founder of Coinbase. I always think things are stronger when they come from a co-founder.

Starting point is 01:03:54 And the TLDR of this post is, Coinbase is funding a lawsuit brought by six people, challenging the U.S. Treasury Department's sanctions of the tornado cash smart contracts and asking the court to remove them from the U.S. sanctions list. The sanctions exceed Treasury's authority, harm innocent people, remove privacy and security options for crypto users, and stifle innovation. Well said. Coinbase is a legal officer told CNBC.

Starting point is 01:04:18 It sets a dangerous precedent if this code can be designated without any limits imposed by law, any technology, any tool, or system could be fair game for also being banned. So this is what I was saying is like, maybe Coinbase is cool with tornado cash being banned, but they know more than CoinBid than Tornado Cash. And so in order to protect their future business models, ones that might not be alive today, they are doing this. Thank you. Thank you, Coinbase. Well done. Did you know, David?

Starting point is 01:04:45 Alex.Eath is actually one of the plaintiffs here. Ah, Alex. Great guy. This is Alex.aith on Twitter. He says, today I joined five of their plaintiffs in challenging the U.S. Treasury's no-fax sanctions against tornado cash. A regular citizen, Ethereum, known for a while in the space just on Twitter in other places.

Starting point is 01:05:03 And he's saying, I did not take this decision lightly, being a plaintiff in the case. So this also required bold action by individual citizens, individual crypto natives and crypto citizens. But he said, code is speech,

Starting point is 01:05:18 and free speech is a constitutional right and worth protecting. Well done, Alex. I hope he gets a poet. You get the retweet, man. Good job, Alex. I'm proud of the community for doing this. David, what do we got for releases?

Starting point is 01:05:30 Releases. Today, CurveUSD was born. New decentralized stable coin on the scene from Curve, which is an interesting place for a stable coin to come out of because it is the source of stable coin liquidity in all of Defi. So I expect that to be highly competitive. Not much more to report, but that's kind of big. We just are going to have to wait and see as CurveUSD gets integrated into the rest of Defi. Binance.us is launching Ethereum staking with 6% APY ahead of the merge. Yeah, so this is... 6%. Yeah, Binance.com. So it's the US. You're trying to play catch-up, obviously, with Coinbase and others.

Starting point is 01:06:10 And staking with a 6% APY. David, that has to be juiced because I know you ain't getting 6% from the protocol right now, probably. You're getting 4%. Granted, they're only paying... It will be 6-ish% post-merge. So they're only juicing it for like two weeks ahead of the merge. So it's not that ridiculous.

Starting point is 01:06:30 Why they're juicing it in the first place? I don't know. Oh, promotion. It's just like a promotion. Why would I do Coinbase if Coinbase is 4% and, you know, Binance is 6%. If you're just not really looking carefully at it, you just choose the higher APY. Right.

Starting point is 01:06:44 But the yield should jump up to at least 5. something percent post-merge. So they're not juicing it by that much. This is kind of cool from Notional. Introducing Leveraged Voltz from Notional. what's going on here? Yeah, basically, you can, the way that this works is that a user, say, for example, brings 100,000 USDC into Notional. That gives them a line of credit of up to $700,000 USC from Notional for 6%, 4%.

Starting point is 01:07:10 And then you can combine those two things together to deposit this into this leverage yield vault. So it's a way to get like 8x on your yield is like the TLDR of this product. Probably some risk, but also pretty cool. Definitely some risk. Notional, of course, is a fixed rate lending and borrowing, which is really super cool to have a D5 primitive for that. But as always, with leverage, be careful out there, guys. Do not take leverage unless you absolutely know what you're doing. And a lot of you think you know what you're doing, myself at times. You find out that you don't.

Starting point is 01:07:40 You find out you don't the hard way. You get liquidated. David, on the raises side, one thing to cover. What are we looking at here? Mistin Labs is the creator of the SUI SUI blockchain, closes his 300 million. dollars raise led by FTX Ventures. A $300 million raise. That's not a valuation. Nope. That is a raise.

Starting point is 01:08:02 Two billion dollars. What? You know, there's been... We should start a layer one. What would be our price? $5 billion. $5 billion. So it's something higher, yeah.

Starting point is 01:08:13 By definitely. Do you know, this is kind of, I've seen like, this new crop of fast TPS block chains. Yeah. And you see these kind of every... every single cycle, right? It seems all the time now. This is just like, yeah. Well, the very first one, it was, you know, EOS was, you know, one of the main ones. And then later, I think in future, like it was Salana.

Starting point is 01:08:34 Now what's interesting is there seemed to be three. This one, Suey, if we're saying it, pronouncing it correctly. And there's another one called SEI, say, I think. Maybe how you say that. So there's Suey, say, and there's APTOS. And you're getting a lot of the FTXs and the multi-chain capitals and a lot of the VC firms. who are funding at these levels, like, you know, a $2 billion market cap types of levels. So it's just interesting to me because you got a weak question, of course, we question all the time,

Starting point is 01:09:07 what is the durable competitive advantage? Why is the token worth what it's worth as a layer one? And I guess it's the VC's taking on that risk right now. I always get worried about the retail dumpage that comes later without any, significant progress on many of these projects. And that is what can tend to happen. Although, David, I do feel like there probably could be a bankless episode where we explore these projects in some detail.

Starting point is 01:09:35 I just, I want to wait until there's some traction or something to actually talk about. I'm sure they would love that if we did that. Well, just the fundraise is kind of boring to me. It's like, what can we do? What have you built? That's the point at which we could get interested. But I don't even know the technology stack. I know Aptos is using like...

Starting point is 01:09:53 There's too many. Ryan, there's too many of these. Suey say aptos, like one of these things is going to zero at the very least, if not all three. So somebody's wasting their money. Yeah. Or am I just an ETH maxi or something. Maybe David's beneath Maxi. What do you think, bankless community?

Starting point is 01:10:09 Which of these projects should we be looking at? You tell us. Jobs. David. What time is it? Job time. Time to get a job. Last week to get a job before the merge.

Starting point is 01:10:18 I'm not sure that matters, but it's true either way. You think someone could turn around and get a job in like a week's time? It really hustled. Yeah. Hit apply. If they are a fitting candidate for one of these fantastic jobs, or we're about to read out, maybe perhaps. Well, I'll read them out then.

Starting point is 01:10:34 Economia is looking for a lead product and brand designer. What's that, David? Non-technical with Ryan. Silent protocol. Full-stack smart contract engineer. Superfoam, senior backend engineer, Big Green full-stack software developer, Masari needs those software engineers for market data and media.

Starting point is 01:10:50 D-Y-D-X needs a backend software engineer, steakfish, an HR business partner. A steakfish also needs a back-end software engineer and a front-end engineer, a DevOps engineer, and of course, Bankless is looking for someone to help with media operations. Go apply for these jobs. Go get a job before the merge, if you can. The merge is fine, too. Crypto is always hiring in the Bankless Jobboards. That's bankless.pallet.com slash jobs.

Starting point is 01:11:16 You can find out more. All right, David, what do we have coming up next? Got some questions for the nation. This is when we talk about some of the ETH POW questions, East State questions, overall merge-related questions. Because, Ryan, it's, of course, the last weekly roll-up before the merge. I don't know if you mentioned that yet. But we've got to answer all the merge questions.

Starting point is 01:11:33 So we'll talk about that. And also the hot and spicy takes from crypto-twitter coming up next. But first, let's talk to some of these fantastic sponsors that make the show possible. Arbitrum is an Ethereum layer-2 scaling solution that is going to completely change how we use DFI and NFTs. Some of the coolest new NFT collections have chosen Arbitrum as their home, while Defi protocols continue to see increased liquidity and usage. You can now bridge straight into Arbitrum for more than 10 different exchanges, including finance, FTX, Whoobie, and Crypto.com.

Starting point is 01:12:00 Once on Arbitrum, you'll enjoy fast transactions with cheap fees, allowing you to explore new frontiers of the crypto universe. New to Arbitrum, for a limited time, you can get Arbitrum NFTs designed by the famous artist Ratwell and Sugoy for joining the Arbitrum Odyssey. The Odyssey is an eight-week-long event, where you can play on-chain activities and receive a free NFT as a reward. Find out more by visiting the Discord at discord.g.g.g. slash Arbitrum.

Starting point is 01:12:22 You can also bridge your assets to Arbitrum at bridge.orghum.com. And access all of Arbitrum's apps at portal.arbitrum.com. In order to experience defy and NFTs, the way it was always meant to be, fast, cheap, secure, and fiction-free. The Layer 2 era is upon us. Ethereum's Layer 2 ecosystem is growing every day, and we need Layer 2 bridges to be fast and efficient in order to live a Layer 2 life.

Starting point is 01:12:44 A cross is the fastest, cheapest, and most secure cross-chain bridge. With a cross, you don't have to worry about high fees or long-weight times. Assets are bridged and available for use almost instantaneously. Across's bridges are powered by UMA's optimistic Oracle to securely transfer tokens between layer 2s and Ethereum. Across's critical ecosystem infrastructure and across V2 has just launched. Their new version focuses on higher capital efficiency, layer 2 to layer 2 transfers, and a brand new chain with Polygon, all while prioritizing high security and low fees. You can be a part of Across's story by joining their Discord and using Across for all of your

Starting point is 01:13:17 layer two transferring needs. So go to across.com to quickly and securely bridge your assets between Ethereum, Optimism, Polygon, arbitram, or boba networks. We are back with the questions from the nation. Of course, if you've got a question for the weekly roll-up, you can follow at Bankless HQ on Twitter, look for that question of the week, respond, and we may read your question out on the roll-up and answer it to the best of our ability. The first one is from Johnnycast.e.

Starting point is 01:13:43 Will I receive ETH proof of work for the staked ETH I have? What about if it's staked on a centralized exchange or in an ETH staking derivative? So this person wants to know, Johnny Cass wants to know, if he is getting a fork of the ETH POW token, should it come? He is asking if he's going to receive the ETH proof of work token if he has ether staked. And if you have ether stake, that answer is no. No, you are not. because that ether is in the deposit contract on the Ethereum side, which is where people deposit ether into the beacon chain.

Starting point is 01:14:18 The only reason why you deposit ether into that contract is to tell the beacon chain to meet you some ether on the proof of stake beacon chain. It's a one-way street. It only goes into that contract. There's no way to get it out of that contract. So all staked ether on the Ethereum chain when it goes into the proof of work chain will be irredeemable. The proof of work ether will be in that same.

Starting point is 01:14:40 contract on the proof of work side, but there's no way to get that out. So all staked ether is not redeemable for proof of work ether. It doesn't matter where you staked it on a centralized exchange or with Lido or rocket pool. That ether is gone. That proof of work ether is gone. But to our point earlier, guys, who cares? It's probably almost nothing. It's probably pennies. It does make sense for a proof of work fork to kind of punish those who staked, right? But that's not what it's a byproduct. It's a byproduct, but like it's kind of, it's kind of of also interesting what's happening. What about on centralized exchange then what happens there or in the staking driven? Any any stocked any supply of staked ether will be irredeemable so they can't give you

Starting point is 01:15:22 they won't be giving you anything because they don't have anything to give you. The keyword is there is staked it's the staked piece right if it is on a centralized exchange right and it's not staked then it's totally dependent on the exchange which then the exchange has to facilitate that yeah that could be months down the road or never So don't expect much. If the price moons because people are doing shenanigans, then they'll enable it because people will desire it. Yes.

Starting point is 01:15:51 Here's another question from Matt. In the first few hours after the merge, is ETH proof of work value will receive equal the value of our ETH proof of stake? So can we double our ETH holdings if we exchange the proof of work for the proof of stake as soon as possible? This is another question. I think there's been a lot of question about this new proof of work. hypothetical chain. What's the answer to Matt's question here? Well, so we saw the chart earlier that was doing a futures market for $30 for a proof of work ether. You will have the same

Starting point is 01:16:22 number of units, but the market prices on these things will be totally different. And so, like, after Armageddon on the roof of work chain happens because all ether positions in MakerDAO AVE compound will be liquidated, all tokens on uniswap like MKR, Avey will be worth zero. And so, like those people who have those will liquidate those. There's going to be like just like Y2K on the Ethereum beacon chain on the block one, two, and three. After the dust settles, then the proof of work ether will have some sort of value determined by the market that will be significantly meaningfully lower than the actual

Starting point is 01:16:58 ether, real ether, proof of stake ether. And then if you are sophisticated and you can set up the infrastructure, you can sell the proof of work ether. And you, yeah, on Polonex, because they say they're going to support it. Maybe if you could find an exchange that supports it. There's not going to be a uniswap, yo. Like, it's only going to be centralized exchanges that facilitate this marketplace. If someone decides to kind of pick that up and run, like, yeah, it's going to be really hard to escape from.

Starting point is 01:17:21 And what we're talking about here, even in the futures market, it's like $31. Dollars per ETH, basically. It's kind of what you'd get. I do not think anyone will be seeing a dime. Yeah. Excuse me. Very few people will see a dime. Few retail, like normal people.

Starting point is 01:17:36 Highly motivated retail people who are right. running both a consensus node on the beacon chain and well, no, actually just a pre, a pre look, the people asking these questions are probably getting nothing. Yeah, if you don't know how to do it, you're not getting it. I'm like, sorry. The best thing, okay, if you are retail and you are super bullish on trying to get that ETH proof of work token, the thing that I would do, even though I'm not recommending you to do this in the first place, is to deposit your ether into Polonex because Poloniacs, the exchange, even though it's run by a very shady individual of Justin's son, said that they are going to support the ether proof of work

Starting point is 01:18:13 chain. And so they will do all the service for you. So if you are somehow, after listening to this, magically still bullish on the eth proof of work chain and you don't know how to go do it yourself, deposit your ether into Polonex. They said that they will credit people their proof of work ether and then you can just use them to do it. I don't recommend you doing that. But that's how you would do it. But also don't do it. And also just just don't fucking do it. Sorry, for swearing. Here's a question from Henry, JK4. This may be based. But with the aeth I have when the merch happens, will I get new ETH or will my existing ETH convert to the proof of stake chain? Can you explain this for me? Thanks so much for all you guys I've been doing, been listening for about a year now. So what does the average person ignore the ETH proof of work proof of state? Ignore all of that. You're just holding ETH right now. What do you have to do on the other side? Is there anything that you have to do? What happens to your existing ETH that you're holding? Nothing. Nothing changes. Remember we saw that pie chart? There's a 95. percent of validators are ready. That's because 95% of people and it's going to approach 99%

Starting point is 01:19:15 are ready to do the hot swap. Your ether doesn't convert. It doesn't change form. It doesn't do anything. You actually won't even notice anything at all happening whatsoever. Maybe there will be a blip and ether scan or something ideally, just a blip. But just like your ether that you have today is proof of sake ether once we hit post merge. So if you're an eth holder, what do you have to do? Nothing. Nothing. If you're a defy user, what do you have to do? Nothing. Nothing.

Starting point is 01:19:44 Nothing. Maybe monitor your positions if you're on leverage or something like that. Sure. If you're levered up or doing something like that. Yeah, pay attention. Pay some attention. If you are running a node, Ethereum node, you got to update. Well, you will have already updated your nodes.

Starting point is 01:20:00 If you haven't updated your nodes, you've got to update your nodes. You're late. Yeah, you're late, but not too late. But if you're not running a node, if you're just an eth holder or a general defy users, not on leverage, nothing you have to do. It just transfers gracefully. You can tune into all of the live streams. That's what you can do. Many, many, many live streams the day of the merch. Next week. We're doing a lot of those. We went over the schedule earlier, didn't we? Yes, we did. Yeah. Cool.

Starting point is 01:20:23 All right. Takes the week, David. This is from Tim Beiko, who is an eth, I guess, core developer, core coordinator. Core developer, yeah. Works for the Ethereum foundations. Key person that made the merge happen. Yeah. Him and Danny Ryan are like the two people that made the merge happen. And Tim Beko, that's putting too much weight on their shoulders. Many people made the merge happen. Tim Baker says, I've said, we might have merged by then twice on the core dev meeting today. And it feels pretty surreal, to be honest. It's happening. Sparkly emoji. Really, it's a really cool take. Really cool take. We're taught, we're already talking about just like after the merge, the state of things after the merge. It's happening. So much work to get us here. And it's actually happening.

Starting point is 01:21:06 You know, the Ethereum community has been waiting for so long for this week to happen, and it's actually happening. In spite of so many doubters who said the merge would never happen. There's no way it'll transition to proof of stake. It's like replacing an airline engine in midair, too complicated, too difficult. Protocol deaths were like, challenge accepted. It's awesome. Again, knock on wood against the whole like Hillary Clinton thing. This is a tweet from me.

Starting point is 01:21:36 this week. You're old, but are you old enough to remember this? And this is, I'm showing an image. If you can't see it on the podcast side, you can catch it on YouTube. This is an image of the original Maker Dow interface. David, do you remember when Maker looked like this? I do remember. And I remember experiencing this interface being frustrated, but also optimistic. And then finally figuring out how to mint dye for the first time and seeing the die show up in my wallet. it. And I just, I didn't obviously have any like concrete predictions, but you could just feel the future. It's like, no, I did not know, no univap would be a thing. But I kind of figured there would be something like it. And like, yes, this is automated algorithmic finance by code.

Starting point is 01:22:18 And this was like my magic, like aha moments. Like I just minted money. And no one stopped me. I just, minted money. I just took out a loan. No bank, no bank account, no paperwork, just code and ETH transactions. It was incredible. This, this, gosh, could you imagine this, if all defy interfaces were like this level of just like clunkiness now? I just, what I'm, what we're looking at is an interface that looks like it was from, I guess, 2017 or so, 2017, 2018. But it looks like it's from the early 2000s. I mean, it is just terrible. It's bad. It's bad. It's did the job it needed

Starting point is 01:22:56 to do at the time. So this is like the old grandpa David and grandpa Ryan saying to you, youngsters. You got it good, kids. Yeah, your guys' interfaces are great. They're so good compared to the old days. They don't even know what Pth is. They don't even know what Pth is. P-Eth. Do you say P-th? P-Eth? I said P-th. P-Ath? We don't know it F. We didn't even have a consensus on whether it's P-th or

Starting point is 01:23:20 Oh, God. Do you remember when people would say F? Yeah, instead of Eth? I hated that. I hated that. Your interfaces have gotten much better, and the rate at which they are improving makes me so bullish on this space. You know, if I contrast that to my interface from my bank Wells Fargo, it's like the no change in the last five years. It's so bad. But it's basically the same as it was five years ago.

Starting point is 01:23:42 It's like equally kind of terrible. What's this take from Pallonia? Yeah, says a swap on Binance Smart Chain is five times more expensive than Arbitrum, yet Binance Smart Chain has 10 times the activity. BSC has established clear network effects, particularly in the Eastern markets, and roll-up teams have to do their marketing, after up their marketing game significantly to out-compete BSE their stiffest competition.

Starting point is 01:24:05 Interesting take. What do you think about this? The idea, Plenia goes on to say, today I learned, Binance Smart Chain are building ZK roll-ups. Can you imagine running a ZK roll-up layer two on top of Binance Smart Chain? And this is Plenia, who knows what they're talking about,

Starting point is 01:24:21 really not necessarily bullish on Binance, like the token behind Binance Smart Chain, but certainly it's establishing it as the one to beat for other layer twos. What do you think of this take? Yeah, I heard Anthony Susano on the Daily Gray talk about this. And I think a lot of this comes down to language, as in there might just be more like Chinese or English language support of the Binance chain ecosystem.

Starting point is 01:24:47 And so it's kind of accidentally become like the Ethereum of the East just based off the language barrier. I think that actually does account for a very decent amount and just like the raw power of Binance has that is also big in the East too. I think that's what I think that chalks up to more than more than 50% of the reasoning why Binance chain is so big. I think this is a good message for Layer 2. If you want to onboard the world, you have to have multi-regional multi-language support, right?

Starting point is 01:25:15 It's a key component of this. Anyway, I'd like to do a bit more on, you know, Binance smart chain. I'm not super interested in the technology, but like the adoption it's had and where it's coming from is somewhat interesting to me. Right. Here's another tweet from Ryan Sean Adams, who's been super focused on just like reserve currencies and war and all this stuff. And so we're going to hear his takes here in a hot sec. Ryan says reserve currency statuses rise and fall over the decades. I expect Ethereum to be one of the next ones to rise. Ryan, what are we looking at? We are looking at a pie chart over time. And the way this begins is at the beginning of the 1900s. We take you back to 1901 when the British pound was 60% of, of the reserve, the world's reserve currency. And do you know what's second, David?

Starting point is 01:26:00 The French franc. I don't remember that one. And then behind that, pound sterling, no, excuse me, behind that, Deutschemark, and there's also a category for others. So, you know, British pound, by far, the world's monetary, the world's of reserve currency. And then this kind of fast-forwards through time.

Starting point is 01:26:21 And you can see the British pound as a percentage of the world, it kind of ebbs and flows. through World War I, through World War II. And we fast forward all the way to, even after World War II in the 1950s, the British Pound still had like 45%. Oh, today I learned.

Starting point is 01:26:37 Right. But then the U.S. dollar, which wasn't even present in 1901, wasn't even on the map for a World Reserve currency, is now 46% of the world's currency. And then we fast forward to, of course, where we are today. Can you see the British Pound anymore on this start? Well, no.

Starting point is 01:26:56 It got folded into the euro. Got folded. Well, it's still present. It got folded. Oh, wait, no. Yeah, it's still present. It's 4.5%. It's tiny.

Starting point is 01:27:03 It's tiny. It's 4.5%. You got the euro that's 20%. And the U.S. dollar that is 61%. I think the take here is just when you see this chart over time, the fleeting nature of reserve currencies. Reserve currencies is something to hold on to. And this looks a lot like 1901, right? When the British pound was the dominant reserve currency, now we're in, you know,

Starting point is 01:27:25 2002 and the U.S. dollar is about 60%. All right, David, what do you bullish on this week? Ryan, I am bullish on the ETH-BTC ratio, as I have been. And DGEN Spartan put out a pretty cool tweet that talked about how much of ETHBTC people that are taking on this trade, such as myself, will be permanently unwound post-merge. He says, I expect a drop from the people that think it's an air-drop play, LMFAO, but I expect it to be one of the greatest paradigm shifts in hindsight as ETH goes from a zero to one as a hoarding asset and flows will be one directional. And then I follow up and I say, the point of the ETH BTC trade is to hold it. And like it's not just like a momentary thing because that's how press set on our show with him.

Starting point is 01:28:10 Once we go through the merge, time works with ether and against Bitcoin because with proof of work, the theoretical, it theoretically approaches 100% of all cell pressure from proof of work miners. And with proof of stake, it's the inverse. It's the theoretical 100% gets held by proof of stake stakers. So every single dime of proof of work miners gets sold. Every single penny of ether stakers gets held. Again, in principle, these things are probably more around like 90%. But it just goes to the contrast is time works with ether and it works against Bitcoin. And so if you are somebody like myself who short Bitcoin and long ether, the point of that trade is that it just works. So like people are like super focused on like the flippinging rounds.

Starting point is 01:28:56 Like ether is 53% the market cap of Bitcoin. At some point it'll flip Bitcoin. I have a hundred percent confidence in this eventually. But like the trade is not over there either. Like once you flip Bitcoin, you can flip it again. Like you can lap Bitcoin over and over and over again. Shilling his ETH Bitcoin ratio bags to you. Yes. Yes, I am. I'm chilling my trade. It's like I'll unwind my ether Bitcoin trade when Ether Ethereum is worth like three Bitcoin. coins. That's a whole that's a holes forever. Wow. Is there is there any like, are you mad at Bitcoin at all? Is there any vindictiveness in that trade? No, it's just that it's just the flows. It's just the factual flows. If proof of work is forced selling and proof of stake is incentivized hoarding. This is why this is

Starting point is 01:29:41 why D-Gen is saying ether goes from zero to one as a hoarding asset and flows will be run directional. It's just a fundamental part of the fundamentals. I'm not trading narratives. I'm just, I'm trading to fundamentals. I've been hoarding this thing for a while. I didn't just start hoarding, zero to one, Ben hoarding. Right. It's funny. You want to hoard ahead of the transition from zero to one.

Starting point is 01:30:04 Ideally, there's still time, of course. That's what I'm about, oh, you know what I'm also bullish on, Ryan? You know what I'm about to go do after this? No. You know this guy, Zach Weinberg? Yes. I saw a clip with him with Andresen, Mark Andresen, where he's kind of playing an Andresen clip and just like digging.

Starting point is 01:30:22 into how stupid it is. And Dresen's answer, I think, on what Web3 means. So this person is, Zach, is a Web3 Crypto-Critic, I believe. Yeah, right after this, I'm about to go into Manhattan and debate him on stage at some, like, VC Founders Conference. That'll be fun. Is this being recorded?

Starting point is 01:30:43 I don't think it is. I don't think it is. But if it is, I will definitely tweet it out. But, yeah, me and I was listening to him, I didn't listen to his Andresen clip, so I got to go listen to that, but I did listen to him going up against Pachy McCormick. Yes. And I'm like, dude,

Starting point is 01:30:56 Paci, you are missing some really low hanging fruit like points here. And so I don't think that Zach Weinberg has gone up against any sort of meaningful competition yet until two hours from now when I smear his face. Wow. I'm kidding. I'm kidding. I'm kidding. I'm kidding. Just pre-merged David is like just, you know, he's jacked. I've had an extra cup of coffee today.

Starting point is 01:31:16 He's got the adrenaline. Watch out, Zach. I think it'll be good. Actually, I think if that If that goes well, sorry, I'm coming an episode, if that debate goes well, we should host him on bank lists and have kind of a review of like another one of that because we need some more critics.

Starting point is 01:31:30 Round two. Ding, ding, ding. All right, Ryan, what are you bullish on? Who are you debating this week? I'm not debating anyone if I can help it, all right? I just want good vibes into the merge. I don't want, you know, no hassle, but you know what I am bullish on or what,

Starting point is 01:31:45 maybe this is kind of a thank you. This is a gratitude. The eat developers. All right, we saw earlier about 120 core developers. A lot of ETH developers made the merge happen. And we know some of them. We don't know all of them, all right? We don't know most of them.

Starting point is 01:32:00 We don't know most of them. And, you know, particularly kind of the silent people have been just coding in the background, making this happen. Like, sincerely, thank you. I think the entire Ethereum community has you to think. We can't build this. Dave and I are here working on the social layer. We users. We're building a different way.

Starting point is 01:32:16 But like, none of this would be possible without. the Ethereum developers, the core developers. And I remember a time when they, when everyone said, no one thought they could do it. Do you remember back in 2018, a lot of the talk was there's not enough protocol, there's not enough funding for the devs to actually do this. So it's actually, there's semi-serious propositions to actually add a protocol dev tax inside, and inside of the protocol to siphon off a portion of this and give it to devs to fund it. We, We did this without protocol funding. We did this with frustrating roadmap pivots.

Starting point is 01:32:56 Do you remember in 2020? It was 2018. We were supposed to get proof of stake. We were like months away from forking it in, an earlier version of it. And the roadmap completely changed. A better version was in sight, so we just pivoted towards the better version, right? What kind of patience does that require to keep along with the project? You know, it's like delayed for another, like five years.

Starting point is 01:33:19 They've been working on this stuff. And they did it all without a centralized corporation, all in this, like, decentralized, open-source way. And I don't think there's any precedent for what we are seeing, like launching a staking protocol like this, which is maximally decentralized at scale, and converting it in real time with a network that's worth hundreds of billions of dollars in real time. And that's what's happening next week. I think it's a historic event, and I am bullish and thankful for the Ethereum developers. And man, this protocol can ship. I didn't always know that was true. I didn't always believe that, but we're doing it now.

Starting point is 01:34:01 So that's what I'm bullish on. Yeah. Every single client team has 8, 10, 20 people on its team that have been working on this, and there's like six, seven client teams. That's not even to account for all the people at the EF also helping coordinate this thing. So like the image that came to mind while you're talking is just like that at the picture of like Atlas and they have all the core teams like holding up Ethereum. Yeah. Like everyone who's ever used Ethereum and is bullish on the merge has a core developer to think.

Starting point is 01:34:29 Have you thanked a core developer this week? Because if you haven't, please do. We should make that into a meme next week. Have you thanked a core dev yet? Thank you. Thank you. Ryan has. Ryan did just now.

Starting point is 01:34:39 That's what he was doing. He was first. I feel like there's other things I could be doing. But yeah, we appreciate the theorem. development community for sure. David, the meme of the week, what are we looking at this week? We were looking at the Patrick SpongeBob meme that is like, what if we take this and put it over there?

Starting point is 01:34:56 Ethereum miners, this was the headline from earlier on the roll-up. Ethereum miners made $756 million in revenue in August ahead of the merge. And Patrick, the meme, goes, what if we take the minor revenue and give it to the stakers? Basically what the Ethereum proof of stake mechanism is, although you do have to take note that we are doing a supply reduction of 90%, so actually, only 10% of the stakers get that. But also, stakers are holders of ETH.

Starting point is 01:35:21 And so since the miners aren't dumping the ETH, they do get the benefit of not having ether dumped on them by miners. So I will say they get the full value of that. That's true. It's what's happening. The stakers are the new security budget for Ethereum, essentially. And the ETH holders, yeah. Yeah.

Starting point is 01:35:36 So, right? I mean, this notion of ether as a tokenized ASIC, basically, I think is holding true. So that's what's happening next week. Of course, David and I will be with you all week. Make sure you tune in to Bankless Podcasts and on YouTube. And of course, on Twitter, we'll leave it there. None of this has been financial advice. Eath is risky.

Starting point is 01:35:57 Defy is risky. So is all of crypto. You can definitely lose what you put in. But we are headed west. This is the frontier. It's not for everyone. But we're glad you're with us on the Bankless journey. Thanks a lot.

Starting point is 01:36:07 Hey, we hope you enjoyed the video. If you did, head over to Bankless HQ right now to develop your crypto investing skills. and learn how to free yourself from banks and gain your financial independence. We recommend joining our daily newsletter, podcast, and community as a bankless premium subscriber to get the most out of your bankless experience. You'll get access to our market analysis, our alpha leaks, and exclusive content, and even the bankless token for airdrops, raffles, and unlocks. If you're interested in crypto, the bankless community is where you want to be.

Starting point is 01:36:40 Click the link in the description to become a bankless premium subscriber today. Also, don't forget to subscribe to the channel for in-depth interviews with industry leaders, Ask Me Anythings, and weekly roll-ups where we summarize the Week in Crypto and other fantastic content. Thanks everyone for watching and being on the journey as we build out the Bankless Nation.

Bankless - ROLLUP: Ethereum Merge Bellatrix Upgrade | Binance USDC Stablecoin Wars | Coinbase Treasury Tornado Lawsuit

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.