Bankless - ROLLUP: Fed Pivot | Ledger Scare | New Warren Bill | Airdrop Szn

Episode Date: December 15, 2023

Bankless Weekly Rollup 2nd Week of December 2023 ----- 🏹 Airdrop Hunter is HERE, join your first HUNT today https://bankless.cc/JoinYourFirstHUNT   ----- 🌐 Layer Zero V2 Launch https://bankless.cc/LayerZeroLabs   ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE ⁠https://k.xyz/bankless-pod-q2   ⁠ 🦊METAMASK PORTFOLIO | MANAGE YOUR WEB3 EVERYTHING ⁠https://bankless.cc/MetaMask   ⚖️ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum  ⁠  🔗CELO | CEL2 COMING SOON https://bankless.cc/Celo   🗣️TOKU | CRYPTO EMPLOYMENT SOLUTION https://bankless.cc/Toku   ------ TIMESTAMPS & Resources 0:00 Intro 3:55  Markets https://blockworks.co/news/satoshi-nakamoto-last-online   https://ultrasound.money/   https://www.coingecko.com/en/global-charts   https://l2beat.com/scaling/summary   https://www.coingecko.com/   11:55 The Fed Pivots & Predictions  https://www.nytimes.com/2023/12/13/business/economy/federal-reserve-interest-rates.html   https://www.bloomberg.com/news/newsletters/2023-12-13/fed-s-powell-leans-into-rate-cuts-stok  https://x.com/BloombergTV/status/1735029792511082982      https://imgur.com/UR6UhrA  https://imgur.com/gJeKA0J  https://twitter.com/twobitidiot/status/1733315999615574391  https://twitter.com/RasterlyRock/status/1734956139580936658  22:53 Airdrop Szn https://x.com/StarknetFndn/status/1733101666357100992  https://x.com/LayerZero_Labs/status/1732862812710449466  https://x.com/TrustlessState/status/1730623451323322383  https://www.coingecko.com/en/coins/celestia  https://x.com/wronguser000/status/1734894958497181939  https://x.com/RyanSAdams/status/1733244396303163462  27:52 Ledger Scare https://x.com/bantg/status/1735279127752540465   https://x.com/hudsonjameson/status/1735283602340843757  https://twitter.com/Mudit__Gupta/status/1735301007188406681   32:00 Elizabeth Warren Bill https://x.com/BitcoinMagazine/status/1732844381143539725  https://twitter.com/NeerajKA/status/1734305528187109584  41:09 Pudgy World https://twitter.com/pudgypenguins/status/1733672528453705819 https://www.pudgyworld.com/  https://twitter.com/icebergy_/status/1733682163692769491  42:54 Coinbase’s Project Diamond https://www.coinbase.com/blog/coinbase-and-coinbase-asset-management-announce-project-diamond-a-smart   https://blockworks.co/news/coinbase-responsible-defi-development   45:00 VanEck $HODL BTC ETF  https://x.com/EricBalchunas/status/1733126301622435881  46:42 Cheap L2s https://twitter.com/EclipseFND/status/1734966671457329478  https://x.com/Immutable/status/173505808602364326  49:00 The IRS wants $24B from FTX… BEFORE the creditors https://www.theblock.co/post/267102/ftx-says-irs-demand-for-24-billion-in-unpaid-taxes-is-delaying-recovery-of-user-funds  https://twitter.com/mdudas/status/1734323699187155171  https://x.com/GaryGensler/status/1733231711725527217  55:23 Meme of The Week https://imgur.com/GE7iZOL  https://twitter.com/route2fi/status/1733250454560141455  57:29 Closing & Disclaimers https://bankless.com/disclosures  ------ Not financial or tax advice. See our investment disclosures here: https://bankless.com/disclosures 

I do enjoy, Ryan, the timing of the Fed Pivot that's happening that we're calling it. That is right before the Bitcoin happening, right before the Bitcoin ETF approval. The stars are in lining in a very big way. The money printer is getting ready to fire back up. Bankless Nation, it is the third Friday of December. It's Friday morning. That means it's time for your weekly roll-up. David, what do we have in store for him?

We got the Fed Pivot. What does that mean for risked assets? I think we know. We'll talk about the details. Did we really get the Fed Pivot? We'll understand why. We'll unpack why we think that. And also, air drops.

It's air drop season. Some hotly anticipated airdrops have been confirmed. Some more than confirmed with plenty of details. So we'll go into that as well. Ryan, what do we got after that? Liz Warren wants to ban crypto in the U.S. And she doesn't care who knows at this point, David. So we're going to talk about that.

And Pudgy Penguins, they're doing some things on layer 2s and in the Metaverse, including some things around number go up. So we'll talk about that. And that's not the only layer two stuff. What else, David? Coinbase turning its base chain into a real world asset chain two. We're going to get some new types of assets going on to base chain with some of the efforts out of Coinbase.

All of this and more. And it's very, very bullish, Ryan. We got the Fed pivot, this very, very bullish weekly roll up. But first we're going to talk to our friends over at Layer Zero, who just announced Layer Zero v2 as of this morning, this morning of recording Thursday. and there are details for you awaiting. With Unified Semantics, which if you're a developer,

you probably know what that is. I don't. But developers can build applications on any supported chain and can retain complete control over security. There is a brand new 14-minute video that I watched, Ryan, of Brian, the co-founder of Layer Zero, that is on their pinned tweet at their Twitter,

Layer Zero underscore Labs. There is a link in the show notes. If you want to just learn something about Bridges, it's a super educational video. And so, I mean, I know a DC. a decent amount about bridges, but yeah, even I learned a thing or two watching this. And so that is the call to action. Go click the link in the show notes to go learn about bridges from Brian Pellegrino himself.

Well, actually, this gets a big endorsement. I saw this this week from Eric Voorhees because they're talking here about a censorship resistant, permissionless, and immutable omni chain interoperability protocol. That's what Layer Zero is purporting to be. And, you know, Eric Voorhe's given the standing clap around that. So, yeah, go check out that video, guys. All right, David, before we get into markets, I got to say, I saw these videos and images on crypto Twitter this week. And this is what, so David is not recording from his regular location in New York City, in Brooklyn.

You are actually recording probably, I think this is from your house in Seattle. Back home in Seattle. Yeah. So I took a little detour up in BAMF to before coming here. So me and Hart Lamber from across. Is crypto not risky enough for you, David? What are you doing climbing ice shut? You got to up the ante, brother.

On your third cycle, like the volatility just doesn't do it for you anymore. Okay, so you got to tell us, what is it like to climb up a sheet wall of ice? This is a video here. Is this you? Yeah, this one's me. It's nice because, like, with rock climbing, you have to put your hands in specific places. But with ice climbing, you can stick your toes or your ice tools wherever you want. So like the whole thing is climable.

It's pretty cool. It's pretty fun. It's the only thing you got to worry about is like when you, when you hit your tool into the ice, like ice shrapnel can like come back at you. So you got to be careful. This is not like free solo. Like you are totally like wired in. That is a rope. That is a rope connecting me.

Yes. If I fall, I didn't I did not fall one time. But if I had, I would have fallen onto a rope. Oh my God. Well, good to have you back in. It's great. All right. Well, while you were gone.

Where do you think the Fed Pivot came? Fed dividend. What do you think I was doing? I don't know. Is this more back to the Horstress? As soon as I get down, the Fed is like, we're going to lower interest rates. So you got a Powell Horacrocks up. Well, let's talk about Bitcoin on the week. So are we up? Are we down? Did you help us there in your ice climbing journeys, David? We were going to be down, but then we ended up flat. So Bitcoin flat on the week, the crypto market is kind of flat on the week. We retraced a bigly amount after a lot of the, just the frothiness that was accumulating for the last I don't know, a month of straight up only, I would say. And then we saw kind of like a negative

15% across the market day across the board. But then the Fed pivoted. And so we ended up flat on this week. So Bitcoin up 1% call it flat. We are ending the week at $42,700. Ether started the week at $2,3,000 down $1.2,000. New supply lows, though. We got new supply lows in Ether. So we are down to the low low supply of $120.2 million. Going to bring up to $1,000, $2,000. breakthrough that 0.2 million probably in this episode level. And then Bitcoin, the ether Bitcoin ratio also flat on the week. Okay. So it could have been a bearish week, but we got a flat week. Yeah. So, and you mentioned there, I just, I just want to embellish this a little bit. So ether supply at all time lows. So we're burning some ETHs. No, post-merge lows.

Post-merge lows. Of course. We can't go back to the. But yeah, but time started. Come on. Yeah. The clock started 455 days ago. And also, did you know this while we were talking about Bitcoin? 13 years ago to the day this week, as of December 13th, we just celebrated the anniversary of Satoshi disappearing. He just went away.

His last message on the internet. His last or their last message. This group of people, whoever Satoshi actually is vanished 12 years ago. No, 13 years ago. 13 years ago. Never came back. You got to really like tip the hat to him. Being anonymous on the internet and retaining an anonymity after you make billions and billions of dollars in this network, that's hard.

That's a hard thing to do. He covered his tracks extremely well. Somebody knows who he is, do you think? CIA, NSA. Some three-letter agency knows who this is. I don't know, man. I don't know. I mean, I think the industry has, it's Hal Finney.

I think everyone would place their bets and say it was Hal Finney. But no one really knows. No one really knows. I can tell you who it's not. It's not Craig Wright. I know that. I'll tell you, it's not me either, David. I'll go on record and tell you that.

I'm not Satoshi. Let's take a look at the crypto market cap. What are we at on the week? We just poked through $1.7 trillion coming up to $1.7.1 trillion. Some really healthy numbers in the total crypto market cap. I haven't seen 1.7 in a long time since the last market. a long time. Remember when we did like a year and a half of bank list,

weekly roll-offs, and you were asking what is the crypto market cap? And the answer was $1.1.1. It was just, it was grabbing around. I hated that question. It's 1.1. I mean, we had about 12 months around like the $1 trillion market, and it would go a little bit below, a little bit above, and

we're just crabbing up. And now we're getting close to $2 trillion, David. So pretty soon you can say $2 trillion. Speaking of numbers going up, Oh, that is a great chart. It's layer twos. We are at all time highs for total value locked in layer twos. That is $16 billion worth of value locked.

And let's see, activity as well on layer twos at all time highs. This was an interesting chart from grow the pie. X, Y, Z, which is another fantastic website for tracking layer twos. In terms of transaction fees, David, earlier this week, we hit one day that marked all-time highs in terms of fees paid by layer 2s to Ethereum, 1.25 million. That is part of the reason for the ETH burn. Part of the reason ETH supply is at all time lows, at least since the merge, is because we are burning more transaction fees and layer twos are actually consuming block space on Ethereum layer ones. I mean, Ethereum economics, if you will, looking quite

healthy going to this bull season. I mean, there's a lot of talk about. layer 2's or layer 1s and kind of like ethth transaction fees being high and that being bearish. It's not bearish to me. Let me tell you that. And you know, layer 2's on the uptick is looking pretty nice as well. If you tallied all of the assets deposit onto layer 2's, aka like aggregate layer 2 TVL, it would be number 10 in market cap behind Lido-staked ether head of Avalanche. Wow. Wow. So the climbing, climbing on the charts. David, tell us about some tokens of the week. So now that we're in the bull market, we've got to keep an eye on the tokens that are pumping. You got two. What's the first one? First one is injective coming in at

plus 80% on the week. Wow. It is a layer one. I don't know much more than that other than a lot of the crypto, Twitter influencer trader people are all talking about it. I mean, that's what happens when a token goes up 80% of the week. A bonk still coming in at number two on the week at plus 70%. But the other thing that I have listed here is an NFT, Ryan. Pudgies definitely deserve a shout out. If you look at the market cap, from December to now, they are at from like a 5th floor to where they are now at 11th floor. This is all-time highs.

An NFT doubling. Is that all-time highs? Yeah. Wow. Good for Pudges. Previous all-time highs was a floor of about six. Is this right? Does this go back far enough?

I don't know if it goes back far enough. But 11 seems, it definitely could be a pudgy all-time high. All-time high, at least, Yves denominated. I fumbled my pudgies at 1.25 Eath. Oh, you sold? You sold your Pudgeys? You kept your Cryptopunk. Yeah, it's like,

I'm not Cryptopunk. That one was like. So Pudges are now number four, the number four, PFP collection? Yep. Just number four. Behind board ape and mutant apes. Man, doing quite well.

And what accounts for the turnaround? They never thought I would have seen the day. Cryptopunks, board apes, mutant ape. pudgy penguins. Why did they turn around so hard? You have a take on that? New management. Yeah, Luca and the people that bought the pudgy penguin IP,

just are absolute Chad executors who turned the IP around and started actually building stuff. Like, they're the reasons why pudgy penguin stuffed animals are in Walmart. And later on in the show, we're going to talk about the pudgy penguin metaverse world. The thing that the board apes that other world was promised to be, I think pudgy penguin It's going to beat them to the punch. Oh, wow. Just a good old fashion execution.

That's why they're pumping it at least at their own stages here. Here's a take from Mike Ippolito. NFTs are under owned by crypto Twitter, but everyone believes in them long term. The setup for an absolutely biblical fomo rotation is here. NFTs remain the fat pitch in crypto right now. And this is after Mike put out a poll of saying how much of crypto Twitter has at least 10% of their wealth in NFTs.

And everyone gave the smallest answer of 5% to 10%. So Mike is saying everyone is under-experature. Bose to NFTs. You think it's going to be PFBs again this time? I'm getting into speculation territory. It's like my product like NFTs. It can't just be the same thing over again.

Right. That's what I mean. I just like, I'm bullish NFTs. I just don't know what particular NFTs. So maybe you could help me with that, David.

Maybe we'll do an episode on that. I've been telling you. I want a different answer though. I want an answer to you see it in the back of my podcast studio every single time in Brooklyn. It's a gigantic crypto punk. Nah.

That's, you know, that's like old news, David. I'm looking for the new meta, the cheap one. All right. You want the new crypto punks? Well, let's talk about the big news in markets. This is in trad markets, but it affects basically everything. And that is the long-awaited Fed pivot. Did we just get the Fed pivot this week, David?

You know, we can only interpret if we are getting the Fed pivot. It's not like the Fed is going to come and say. It's not like Jay Powell. They don't use those words. Like, yo, we're pivoting. But here's what happened. we got the third instance in a row in which they did not raise rates. Rates stayed unchanged.

And then previously, they were going to signal that in 2024, they were perhaps going to cut rates once. That was the status quo going into this meeting that happened yesterday. They continued. They're not raising rates. So third time in a row. And then now they are signaling that there are three cuts coming next year. So currently interest rates are at between 5.25 to 5.5%. And they said that they're going to get to 4.6% by the end of 2024.

So they are accelerating in their interest in lowering interest rates. And the markets responded as if it was the Fed pivot. Like the NASDAQ and SPY are in LFG mode. Yeah, I think NASDAQ is like poking into all-time highs. Yeah, it's about to hit. The SPY is about to hit all-time high. coin stock, which I think it's a pretty good barometer of just like risk appetite because like what happened when we had low interest rates last time like, you know, crypto assets just

moaned. So people perhaps are using coin stock as an exposure to assets to an asset that is exposed to low interest rates. So coin is breaking out through like a high is not seen since May of 2022. Is that $150 a share? So, yeah, the markets are responding as if we got the pivot. Yeah, I love this Bloomberg headline, David. Powell brings tequila to the Wall Street rate cut party. So Powell's pouring drinks here. And there's a clip here of his comments on the recession.

You want to hear what he says about the recession? I think you can say that there's little basis for thinking that the economy is in a recession now. Basically, little basis for thinking the economy is in a recession now. So we're kind of getting close to mission accomplished. He followed that up by saying, like, who knows what will happen in 2024, but like, we're cutting. So what does that tell you? I think one of the unspoken things about this, you know, other than, you know, Powell not using the P word for pivot, of course, is the debt, the underlying U.S. debt and the interest payment on that debt. I was just looking at this this morning.

U.S. interest payment on an annualized basis is about $700 trillion, David, right now on top of the U. of its colossal amount of debt. So it has to pay that every single year. That's more than the U.S. pays for defense, pays for its military. Okay? Wow. You don't usually hear anything being higher than that. Right.

The higher the Fed rate, of course, the greater the interest payments. And so that's some other unspoken pressure that is pushing these rates, I think, down. It's something, of course, Powell can't say. I don't know if Yellen will comment on that. But this interest payment is increasing. And if it went beyond 5%, if interest rates went to 6, 7, 8%, I mean, this just ratchets up until it's a massive portion of US GDP every year. And then how is that sustainable?

So there's always going to be this downward pressure. And I think that's something unspoken that is starting to apply. So Powell may not like it, but he kind of has to pivot at some point. And this might be the opportunity. This is what we've been saying. Ever since they turned on the interest rates in like early 2022, everyone has been saying, well, they're going to pivot at some point. Well, they're going to pivot at some point.

Well, they're going to pivot at some point. And why is because you know that the Fed can't bankrupt the government by keeping interest rates high. So we always knew that the Fed pivot was coming. We just didn't know when or where. We always knew it was on the horizon. I do enjoy, Ryan, the timing of the Fed pivot that's happening that we're calling it. That is right before the Bitcoin happening, right before the Bitcoin ETF approval. Like, the stars are in lining.

in a very big way. The money printer is getting ready to fire back up. David, do you want to get some predictions? I know we did a couple of episodes on predictions, but one that didn't make a full episode because we just didn't have time this year was bitwise predictions. They had 10 of them, and you pulled a few of them out.

And this is from another Ryan. How do you pronounce Ryan's last name? You went to college with this guy, right? So you know who Ryan is. Yeah, his last name's Rasminson, but you can go ahead and call him Rattelson because the little secret of Ryan is he gets rattled really easily.

Oh, dude. You could say that because you're friends, I guess. Yeah. Uh-huh. Okay. Okay. Sorry, Ryan. I'll apologize on David's behalf.

Okay, so what were the predictions that you pulled out? Because you only pulled out Ryan's good ones, right? Only the good ones. Yeah, one, three, four, six, seven, and ten. So half of them, more than half of them are pretty damn good. If you want to read the rest, there is a link in the show notes. Actually, this tweet thread did absolute numbers. So congrats, Radelson.

Bitcoin, number one. trading above $80,000 from the two catalysts of the Bitcoin ETF and the happening. Feels pretty safe, but bullish but safe prediction. $80,000 with Bitcoin in 2024. How do you feel about that one, Ron? I feel like it's too safe. I'm like not okay. Too safe?

Yeah, way too safe. Yeah, well, I mean, I'm sure he's trying to get as many, like, you know, points on the board as possible. Safe predictions. Prediction number three, Coinbase's revenue will double beating Wall Street's expectations by 10x, because Coinbase trading volume surges in bull markets, of course, and they have launched a bunch of new products. And so basically, Coinbase is going to just blow people's, blow expectations out of the water.

You want to do the next one? I also think that's kind of safe, but also good, right? And beating Wall Street's expectations by 10x. Well, Wall Street obviously had bad expectations. Then I think prediction number four, more money will settle using stable coins than using Visa. You could see this chart where we're kind of like, not quite neck and neck in 2023. It was just stable coin settlement was about half that

a visa. And so this is a significant increase in stable coin settlement. The next one, number six, is Ethereum revenue will more than 2x to 5 billion as users flock to crypto applications. What do you think about that one, David? I think that's about right, especially as layer two's and layer two activity demand goes up only. And value and assets on layer two's also go up only. you know, when there's more money on layer two is there's more economic energy on layer twos, which means we're burning more ether in layer twos, which means Ethereum's revenues going up.

All right, the most bold prediction of the bunch, Taylor Swift will launch NFTs. Man, that is bold. And I am absolutely here for it. I can't really, really call myself a Swifty, although I do enjoy my fair share of Taylor Swift songs. Yeah. Was Ryan Swifty in college, David?

I know his girlfriend is. Yeah. Anyway, so last prediction. Ethereum will drive the average transaction cost to below one penny. And he is, of course, talking about Ethereum and his layer twos, because that's where you are going to get. 0.01 cent transaction fees. And that is going to be spurred by Dengkun, aka Proto Dengcharting.

That's the EIP for it, 4-4, which is probably going to come in 2024. Early 2024. I'm very confident of that. David, what do we have coming up next? Coming up next, airdrops, air drops, air drops. We're getting all the air drops. We've had an airdrop meta already arrive on the scene here in December and holiday season. And you just know that there's a bunch of layer twos and others that are going to launch their air drop in January or at least Q1.

And we're going to get the details to you as well as Liz Warren has some notifications for us. It is a bill called the anti-digital asset money laundering bill. Something extremely disconnected from reality. We're going to talk to you guys all about that anymore. But first, a moment to talk about some of these fantastic sponsors that make this show possible, especially Cracken, our preferred exchange for buying crypto, all of that cheap, cheap Bitcoin. That's not going to be cheap later. If you do not have an account with Cracken, consider clicking the links in the show notes

are getting started with Cracken today. Cracken knows crypto. Cracken's been in the crypto game for over a decade. And as one is the largest and most trusted exchanges in the industry, Cracken is on the journey with all of us to see what crypto can be. Human history is a story of progress. It's part of us, hardwired. We're designed to seek change.

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How are you managing the legal and tax for providing token awards for your team? Toku simplifies everything about managing token grant compensation and you can get started with them for free. You'll have access to top-notch legal and tax support to handle the distribution and management of tokens for your team. Toku caters to every step in the process from user-friendly legal templates for granting tokens to tracking investing periods and calculating withholding taxes. Toku understands every grant structure, token purchase agreements, restricted token awards, restricted token units, token options, and all the other ones.

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They have to do a token. And now they are giving away details about that air drop. So they start out this tweet announcing some of the details that says, Darknet is about each of you. Every user, builder, and member of our community existing and future is a critical piece to building our network into the future of decentralization for generations to come. The success of StarkNet depends on this. We love the crypto ethos.

TLDR, we plan to allocate over 1.8 billion Stark tokens out of a total supply of 10 billion across multiple initiatives to drive adoption and growth of the Starknet blockchain. So here are some of the first wave of details that we've gotten. 900 million Stark tokens for the fair, decentralized, and transparent distribution of Stark over multiple programs and phases. This would be the airdrop and perhaps a second round of air drops. and perhaps more targeted air draws, but generally retroactive distribution for reasons into the community.

Second, network rebates in Stark, 900 million Stark tokens as well, another 9%. If you have spent money on gas or transaction fees in Stark where you will be given a Stark kickback to compensate you for your gas fees. And then also 50 million, pretty small but definitely meaningful. 50 million Stark tokens to boost defy activity. This is liquidity mining or incentives.

etc. And then more. This is what they said. 1.8 billion. That was a lot. So 1.8 billion. 18% of tokens. Yeah, I'm just going off of like you just napkin math here, but like what arbitrams and these other layer

two is about $10 billion market cap, let's say. So let's say Starknet is similar than each token would be worth a dollar, let's say. So that would be $1.8 billion worth of airdrop that they are pushing out of the community. So that's a pretty big one.

I mean, there have been larger air drops, but this has got to be one of the top five, I would say, of all time, if that happens. And who knows, it could be worth less. It could be worth more. The market will tell us as soon as it's released what the Starknet tokens are worth. It's going to be worth more.

I'm sorry. It's going to be worth more than both. We don't have to be sorry. That sounds great. I'll take more. That's not the only one. I'm taking the over on that one. You promised to you.

Yeah, Layer Zero. Layer Zero Labs. one of the, again, very, very bot-farmed airdrop, so we're going to have to see how they overcome that challenge. But layer zero, they tweet out, has always been built with the ability to have a native token within the protocol. As can be seen in the immutable code launch on day one. Basically, TLDR, we'll state now in no uncertain terms that there will be a layer zero token. Its distribution is something we're committed to getting right and expect it to happen within the first half.

Oh, wow. In certain terms, yeah. It's how you know. And they say it's going to be distributed in the first half of 2024. So Stark, Stark, they also didn't give a date or a time, but, you know, they just told about details. So I'm going to go ahead and guess earlier in 2024. So Starknet first, probably layer zero after that. You know at that point, the ball is rolling at that point.

Like I remember my take way back when where I said like, yo, as soon as the markets heat heats up and some big air drop happens. it's going to cue to all the other unreleased air drops, like, yeah, it was air drop season. Yeah. And I think with the Gito drop last week or last week, yeah, last week, and like hundreds of millions of dollars going into the pockets of people, that was like, okay, this is the green light. Everyone release your token.

Well, you also had, it's airdroft season. Not only Gita, Gito is the Slesia token, TIA. That was probably like three, four weeks ago, I believe. And fully diluted valuation, $14 billion. That is nice. Go look at that chart. dude scroll down and look at that chart it doesn't go down it goes only up some of these things are getting little silly i got to be honest david it does not feel like that early stages of the bull market

it's a little silly somebody who was talking about commented under my like ice climbing in canada picture and i was like yeah he's just trying to get out of the u.s so you can go claim his so that's actually not a not a bad take not another not bad take is uh don't miss it because you didn't do your homework okay so um all of these airdrops are chronicled in the bankless airdrop hunter. David, I missed out on a 17K Gito AirDrop because I didn't do my homework, my friend. Wow, the minimum amount for a Gito AirDrop recipient was $17,000. That's pretty good. The Uniswap AirDrop was $1,200. We're up to $17,000 now. I know. This is the part of the cycle where it pays to really be in crypto and to be doing your

homework and to use all of these. Well, so this is harvest season. It's very much harvest season. So make sure you do your homework, another PSA for you. David, there was a big scare, actually this morning, the time of recording. I woke up on Thursday morning and all over Crypto Twitter, a whole bunch of people were saying, stop using your DAPs. Just stop. Just don't use any more Daps because there's like a fishing attack. And like when you read into the details of this, it seemed like there was some mysterious attack where if you were using your ledger hardware wallet

paired with some sort of either crypto wallet, like a meta mask or just on a website using Ledger Connect, there was a way for an attacker to drain your funds. Okay? So this was circulating around crypto Twitter. Can you tell us some details on what was happening and like whether it's resolved or not? So I think it is now resolved. We now know the details. But the TLDR, a, this is some coding developer language, I'm going to do my best here.

A library that is used by many DAPs maintained by ledger was compromised and then a wallet drainer was replaced. So think about a little snippet of code. That snippet of code that's maintained by ledger was compromised and a wallet drainer snippet of code was replaced. And so sometimes when you use your ledger and it connects to Madamask and then it connects to a front end, somewhere in the middle of that process is this ledger library that this exploiter got their hands on and was able to insert a drainer. I don't think it was true for all front ends. So not all front ends were having this ledger connect to library as part of their stack, but some of them were. And I bet you, Ryan and me and bankless listeners are like, I don't know which uses it and which doesn't.

And so everyone is like, just stop using it, stop pause. Yeah. And what it would do is, pause all trading. It would do a man on the middle attack where it would just insert this rogue transaction into your device. You know, you wouldn't really know. So you'd look at the transaction on the screen. You'd click through and you click accept and you ended up sending your funds to this third party, this fisher, this hacker. So your ledger hardware wallet is totally fine. It is software that's on the internet that is compromised, that takes a transaction from your ledger hardware wallet

and sends it out into the world. There is now a fix for this. You basically just need to clear your cash. Munit Gupta, who I think is from Polygon, put out this tweet that tells you how to do this. So there is a link in the show notes. And you, Ryan, go ahead and click that, go and click that link. And then if you ensure that the version is 1.1.8, you will be good.

Yeah, so you're good. Okay, so you see that original file slash NPM at the very, very top, Connect Kit, 1.1.8. You're Gucci. There is a link in the show notes. You can go click that link. You can follow suit and make sure that is 1.1.8. And that's just a double check.

If it's not, go clear your cache. Well, and that's just to double check. Now I think the fix has kind of propagated through all of the CDN content delivery networks. And I think it's pretty much safe. But there was this narrow window of time where it was not safe. to actually use your ledger connecting to a wallet. And I got to say here, David, like, I guess my reflection on this is,

we still got some work to do, my friend. Like, I love crypto, but no one you could just wake up one morning, whip out your bankless wallet. And like, you get this random message saying, hey, if you use your wallet today, you could be drained of all of your funds. That is bad user experience, my friend. That is not, we are not quite ready for Normies

when we have that level of user experience. So, I mean, just surfacing that, we have to leave some work to do. Also, it's just like this software that helps Normies manage stuff. Like, without this library in the middle, it gets more complicated. And so there's like this big problem, I'd say, we're like, as much as Ledger is doing fantastic work, like, we're still dependent on them. And there's no way, there's, I don't know. I'm sure there's some ways. But just like, it's a scary amount of dependency.

And like, if it wasn't Ledger, it would be someone else, right? I've just like this year, David. hardware wallet. The last three to six months have, I don't know how many fishing stories I've heard from like crypto-OGs. From like this could have gotten me. This could have gotten you. This could have gotten many people listening if they had used their wallet during this period of time. Right. And as you say, too many. We still have work to do here. Speaking of work to do, David, we still have some work to do in the U.S. I think when we have senators saying things like this. You want to hear it? You know, we have something called the Bank Secrecy Act, which is how banks are required

to monitor certain kinds of transactions that go through the system. It was written in the 1970s, following 9-11, the law enforcement folks went back, looked at what had happened, figured out how the financing had made it through the system, and that's the last time that Congress updated the Bank Secrecy Act. What we need to do is we need to update it again because there's a new threat out there. It's crypto. And it is being used for terrorist financing. She goes on, David, a new threat out there.

It's crypto. That was Elizabeth Warren, of course, Senator from Massachusetts two weeks ago on CNBC. So she was on the press circuit for some reason railing against crypto. I think we found out more of the reason why she was on this press circuit. And that is she was planning to launch a bill. and she has now launched a bill called the Digital Asset Anti-Money Laundering Act. And it is absolutely terrible. It basically, David, kills Defi in the United States, some details.

It kills crypto. It kills like any peer-to-peer money system in the U.S. So a few details. Of course, you can go and read the bill yourself, but a few details from Coin Center. It requires if you have a public blockchain infrastructure, So if you're EtherScan, if you run a validator, if you host D5 frontends, say you host a Uniswop front end, it requires that you register as a financial institution. And as a financial institution, so David, you have an at-home eith validator?

Well, guess what, my friend, you would be a financial institution. So you'd have to identify and record the personal information of every user who used your validator software, basically do a full AML KYC risk compliance program because you would be culpable. You would be liable as a financial institution if some like bad actor actually push through a transaction through some of the blocks that you validate. You file reports about users when they like breach their requirements at government requests. So this basically would kill like tornado cash. Zcash, Manero, all privacy.

It is bad, bad. And this is what Naraj from Coin Center says. Make no mistake. While proposed as a solution to potential money laundering terrorist financing, the bill is, in fact, a repudiation of liberal values, and a move towards the types of surveillance and control prized by authoritarianes like Vladimir Putin, Xi Jinping, and Kim Jong-un. So there you go, David.

An absolutely atrocious bill. It has bipartisan support, by the way. So it's not just Liz Boren. Warren, she has a Republican senator who signed on and the support of five other senators. So incredibly disturbing. And like my take on this is it just unmasks what, like, do you hear Elizabeth Warren in that clip? She's talking about like how great the Bank Secrecy Act was, how great the Patriot Act was. Like, I mean, she wants to append the financial surveillance system to our peer-to-peer monetary systems.

delete and kill the idea of cash, delete the idea of like me giving money to you without the government kind of like knowing who I am and who you are. She wants to delete that idea entirely. And it's, wow, I, you know, I guess I'm at a loss for words as to why she is so forcefully trying to push this kind of thing through. Yeah, that's the same kind of question I have about like Gary Gensler's motivations. Like why is Gary, why does Gary Gensler hate crypto so much? Why us and why does Elizabeth Warren in the face of fantastic, real, hard evidence that is way more comprehensive than that meager Wall Street Journal or Bloomberg article, which one was the one that she was cited in Congress? Way more comprehensive and complete evidence to suggest the complete opposite of what she is saying. Yet she just doesn't care.

She doesn't care about actual real facts that are presented in very clear and coherent manner by industry experts who are aligned with government. which is chain analysis. She doesn't care about them. It's just like she doesn't want to talk to us, doesn't want to hear about the facts, just wants to ban crypto. And so my question is, where's the motivation?

Why is the motivation? Where is the incentive for Elizabeth Warren does come after crypto so hard? Well, Ryan Selkis actually, I asked him that question. He has a take on that, that is an episode that's coming out next week. So I'll leave that take.

But the summary is control. He really thinks that Elizabeth Warren's end state aim is to create a central bank digital currency. It's just kind of like a government, like we know best type of thing and to control rather than let the people have a peer-to-peer money system. There's some good news here, David, and the good news is there's a low chance that this will pass. Okay. So not only is it unconstitutional, you have the ability to contest it in the court system that takes years. Warren seems to write a whole bunch of bills that actually don't pass. So during her 11-year-long

career. She's written over 330 bills, and only one was enacted. So I don't know. That's not a great track record. That's not a great track record. Wait, so then is it just for the show? I don't, maybe, David, maybe. But like, we have to take these kinds of things seriously, obviously, and the fact that she has other senators signing on means we have to just impose it in its entirety. So there you go. What do we have coming up next? Coming up next, we got pudgy world, perhaps the most successful NFT project to rise out of the bear fulfilling its metaverse promise. and Elizabeth probably wants to make it illegal. Coinbase, Layer 2, the base chain,

going to be the home of real world assets, is Coinbase going to take the real world asset thrown? And we got some other updates from two other layer 2s. Talking about cheap fees right after the cheap fees narrative sweeps through Twitter, all of this and more. But first, we'll talk about some of these fantastic sponsors that make this show possible, especially MetaMass portfolio.

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Sello Layer 2 on the Selo Forum, so has Ben Jones from optimism. But why? The Sello Layer 2 will bring huge advantages, like a decentralized sequencer, off-chain data availability, and one block finality. What does all that mean? Rock solid security, a trustless bridge to Ethereum, and more real-world use cases for Ethereum without compromise. And real-world adoption is happening. Active addresses on Sello have grown over 500% in the last six months. With the Sello layer two, gas fees will stay low and you can even pay for gas using ERC20 tokens. But Sello is a community governed protocol. This means that Sello needs you to weigh in and make your

voice heard. Join the conversation in the Sello Forum. Follow at Selloorg on Twitter and visit cello.org to shape the future of Ethereum. Pudgy World Alpha from Pudgy Penguins is announced. Also going to be releasing in Q1 of 2024. Q1 Ryan is going to be a

hot quarter powered by ZKSink and they're hyperchains. Pudgy Penguins tweets out the beginning of a new era of blockchain-backed experiences with the goal of onboarding millions brought to you by pudgy penguins. And there is this cute little animation. It's really good.

It's like a really good animation. Yeah. Yeah. The storytelling could use some help. There's just like a penguin stuff in an iceberg and the icebergs falling apart. But no, it's good. The animation's great. There's no words, sadly, just some penguin sounds.

What was that one, a penguin based video game for kids? It's probably before your time, Ryan. I don't remember. It was before my time. I barely played it. Anyways, there was this penguin, like, Club penguin. Thank you, Dave.

Club penguin. Yeah, so it feels like Club Penguin, but in the Metaverse now. Okay, so if you buy a pudgy toy in Walmart, wherever they're sold, you can scan a QR code, which will make your account and you can redeem your traits and customize your forever Pudgy Penguin. And so, you know, the real world, digital physical metaverse, it's coming back, man. It's coming back. We're trying to get kids hooked on crypto, aren't we? It's starting me on.

Yeah, we got to get them early, man. Twice. Somebody's got a buyer bag. What is this? Icebergy. Pudgy World means pudgy token? Oh, they're doing a token?

Yeah. Is that what this means? Well, no, no, they're not doing a token, but Icebergi is saying that they are doing a token. So Luca and the Puggy Penguin team and said, we're not doing a token. But I don't know.

Pudgy World means might mean Pudgy token. All right. Well, let's get out of the Metaverse for a second. Tell me about Coinbase's Project Diamond. This is a new project name. code name that they rolled out and has some implications here. Maybe Coinbase's base layer two is trying to be the real world asset chain. That's what some of this indicates to me. But give us the update here. Yeah, so Project Diamond is being pitched to help institutions create, buy and sell

their own native digital assets. So that means asset minting and asset trading, obviously on base, because where else are they going to put it? This is from the effort of the exchange's asset management arm that recently debuted this Project Diamond for a platform for mirroring debt instruments used in traditional finance by tokenizing them on base. So this actually had an in-production transfer of value between two firms. So on November 10th, the first digital debt instrument on Project Diamond was successfully issued, distributed, and matured on the platform as a technical demonstration of feasibility to the Financial Services Regulatory Authority as it prepares to join the ADGM, the Abu Dhabi Global Market Regulatory Laboratory Sandbox. So many parts of the world

outside of the U.S. are really leaning into blockchain-based financial services and Project Diamond from Coinbase. I guess it's a dark horse of a project that's coming in to try and take some of the real-world asset tokenization narrative. Yeah, I mean, well, one thing to keep in mind is as Coinbase kind of manages one of the largest real-world assets that there is, which is USDC. There's their stable coin, right? And so there's already been lots of speculation that they make base the layer two, the chain, the home chain for USDC. And of course, hopefully we get to the point where we see tokenized treasuries after that as well. Those are two massive real world assets. I think they can continue to expand. The one nice thing that Coinbase has is it has all of the

infrastructure for institutions already, right? You just take like Coinbase Prime and then they have a Web 3 crypto wallet, and now they have a chain, and they can kind of connect all of the pieces and start to deploy real-world assets on chain. So I'm excited to see how that evolves, and I feel like this is a flag being planted here. David, speaking of planting flags, Van Eck has just rolled out the name of their ETF. What is this? The Hodle Bitcoin ETF, HODL, which is a decent departure from like the more boomer, choices from Black Rock, which you would expect from Black Rock. What's Black Rock's called? Do you know?

It's got to be like BTCE or BTC something. Something straightforward and not creative and inspired, which again is totally appropriate for Black Rock. But Van Eck, if you remember, their East Futures, ETF ads were like a little surreal and like definitely Zoomer with that like goat. No, they're trying to appeal to crypto natives. Remember like Vanek also? A little bit. Yeah. They also, I believe, sent some of their ETH futures fees to like the protocol guilt. They are very much trying to win the favor of crypto natives. And the ticker symbol, Hoddle, is another way to do that.

It's a really cool strategy. Apparently, the ticker symbol actually really matters because, like, people are talking about this a lot. A comment from Nate Garagezi says, I like this play. Retail who knows crypto will love the ticker. Boomers will have no idea what it means, so it won't attract any negative attention. plus a lot of advisors preach Hoddle, not with Hoddle, but like, you know, just hold in other asset classes anyway. So it is a good straddle. I don't want to hear that. Like, there's smart money in Tradify. If we are making our fundamental analysis on Bitcoin ETFs, it's on the

different name. Hey, but it is all brand at the end of the day, right? And one of these ETS will be a power law winner is what we keep being told here. Moving into where crypto natives like to reside on layer two, who's eclipse. Testnet is live. if you're not familiar with Eclipse, that is the Solana virtual machine as an Ethereum layer two, using Celestia for data availability, gas denominated in ETH.

It is a platypus of a layer two. That test net, Eclipse is pretty hotly anticipated and that test net is now live, so supposedly ETH can be bridged over and you can deploy contracts there as well. But not just Eclipse. Immutable, the ZKEVM powered by Polygon,

is now gas-free. So what does that mean? It means users, gamers who are using immutable's anti-cibel mechanism, their passport is what they call it. It's like their anti-sible mechanism to play games. And so you can take your passport from game to game to game. It's like your player card, if you're a gamer tag, if you will.

If you have one of these on immutable, you don't pay for gas. Immutable pays your gas for you. And this is a take that I had a while, Ryan, where like the entire business model of layer twos and also app chains, which is kind of what immutable is, is that their fees are going to become so cheap that the operator of these layer 2s or just applications on layer 2s are just like, well, we're just going to pay for the transaction fees of our users because that's good UX and it's

going to attract users. And we saw this out also, Ryan, with base chain when they say, hey, if you verify your Coinbase account, we pay your gas fees on base. And so more and more of layer 2s are becoming a no fee environment. So they're all going gas free, which I'm going to call going electric for layer 2. Going electric. Well, I think that's great because there's a narrative right now that's very popular about low gas fee layer once, right? But you know what's better than low gas fees, David?

No gas fees. No gas fees. Right? So don't even worry. You don't even have to know the concept of gas. And I think that is possible with the economics of layer two to your point. So if you go on immutable. And we are doing this before EIP 4844.

We are doing this in a pre-optimized environment. Can you imagine when we get bank sharding? I think very much that mainstream will on board to crypto without having to worry about all of the economics of gas or gas transaction fees or any of that stuff. And so this is a point in that direction for sure. David, this caught my attention this week. Did you know the IRS is saying FTX, all of the people that are now creditors of FTX, that means they lost, they had funds, deposit on the issue. They lost all their funds, went to zero because Sam Begmanfried stole it all.

The IRS is saying that those people, FTX in its bankruptcy, owes them $24 billion in unpaid taxes. Okay? They're saying like, hey, before the creditors, all you depositors who put your money in this apparatus before you get your money, we want our cut. And our cut is $24 billion. As far more, the FDX actually has the audacity of this thing. So if you are an FTCS creditor, the IRS is like, well, you know, the company owes us a bunch of taxes so you don't get any of that money. $24 billion is like meaningfully more than FTCS is ever going to be able to recover, even though they are doing a great job recovering. So initially the IRS wanted FTCS to pay $44 billion, but then lowered the number to $24 billion.

Why? That is so arbitrary. Yeah. So the FTCS lawyers are trying to get the IRS to show like how they got to. the $24 billion. And the IRS is like, we, we, we just calculated that. It's actually on you to prove that it's not that. So like, my take here is that like, the IRS is just like, they just come up with a number and they're like, doer, dur, pay us $24 billion. Also, that's the number.

No, no, no. Come complaining. First they can't, the first they came and they said, it's $44 billion. And they're like, no, no, right. It's actually, it's only $24 billion. We're giving you, you know, the 50% discount here. And the FDX lawyers are like, oh, we're just. disagree, you have to prove that you're wrong.

Yeah. But this is a microcosm of how like taxes work. Broke in the taxis. Yeah. Right? Like it's just they give you, they tell you what you own. You have to try to guess at the number. That's very much what it is with crypto taxes.

So Mike Dutas has a comment here, you know, spicy comment, which I don't blame them. This IRS request is so blatantly insulting to creditors, Americans in anyone. The arrogance of the U.S. government that flies in the face of any law is staggering. Their demands literally are trying to supersede the recovery of user funds at the same time, the SEC sues exchanges to protect customers. That's the wider context here. It's like a whole bunch of people that lost their money. And the IRS is charging them a tax bill. SBF doesn't have to pay this.

Hopefully it gets resolved, David. But absolutely ludicrous that they're coming in trying to collect here. Well, Jesse Powell was using the word extortion when the, the SEC came after a crack in the second time inside of a year for another bunch of millions of dollars. And I will put on my extremely libertarian hat, which doesn't come on very often. And Ryan, you want to know what the difference is between extortion and the IRS and the SEC? The IRS has military behind it. These groups of people have the monopoly on violence. And if you were charged with extortion,

you just didn't have the army. Sorry about it. Sorry about it. Can't say no. I'm not someone who's against taxes. in general. Taxes are necessary. The big believer in public infrastructure, public goods. But these taxes are dumb. You actually have to have a reasonable justification for it as well. Anyway, speaking of dumb things, silly things,

look at this guy. Gary Gensler. He tweets out, thank you, Coin Desk, I guess. What is this, David? Actually, should I just play the clip? Sure. All right, let me play the clip. We all love Gary Gensler. He's the Taylor. He's the Taylor's swift of regulation. When I walk in the room, I can still make the whole place.

What? I'm assuming this coin desk talking head was being sarcastic. To call Gary Gensler the most influential of 2023. Like, we're just using influential in like this neutral term. It's like, yeah, he influenced people to go abroad and shut down their startups and not issue tokens and overall not be... File of court cases. Bile court cases, yeah.

So, like, he moved a lot of people's time and energy. Yeah. Is it a positive influence? Absolutely not. Anyways, so Gary Gensler himself retweets this video of CoinDest saying he's the most influential of 2023. And he goes, thank you, CoinDesk, I guess, question mark. David.

Which also is a farce. Not only did he retweet it with Thank you, CoinDesk, I guess. He paid someone, I assume, at the SEC is somebody's job to edit this video. and add the T. Swift. Oh, that's a Gary Gensler. Edd? Yes, this is a Gary. This is Gary Gensler influence.

He put the cute, like, you know, T. Swift has, you know, cats and stuff. So that's a meme. So he puts a cat in his shoulder. And he scratched out rather than Times most influential coin. He's trolling us, man. He is trolling us. With our tax money.

Remember April Fool's he put on the deal with it sunglasses on his Twitter profile picture? And crypto Twitter was like, ha ha, Gary Gensler is like trolling us. And I'm like, He is admitting that he is just trolling us and that I know that he's not taking this. It's an admission of guilt. He's not taking his job seriously. It's an admission of guilt that he's just trolling us.

And now he's doing it again. This isn't Gary Gensler just knowing that he's not saying totally enough to get himself into trouble. But he's admitting to being a fucking troll. Excuse me. It's absolutely maddening. And, you know, there's nothing we can do about it right now, I guess. Just keep taking those Ls in court, Gary. because they're coming for you.

If you had enough in 2023, you got some more coming in 2024. He leaves office in 2025, right? It depends. It depends who wins elections. Like, that's another self-kist take that we'll have to get to you next Tuesday. I think that episode's coming back.

Thank you for doing that episode. He could definitely be back for a long time depending on the election outcomes. Or he could morph into a different, David, it's a revolving, like he could morph into some other. other place in the cabinet, right? Yeah, can't AI have some bubble and they can just take Gary Gensler? Imagine Gary Gensler is Secretary of Treasury if you want to have some nightmares.

Think about that. I don't. I don't want to think about that. All right. Let's end with the meme of the week, David. What are we looking at? We got two memes of the week this one. This is the classic bell curve meme.

We've seen these 10,000 times. And you have the middle, the teary-eyed complainer guy who's in the middle of the curve. And he goes, it's fundamentals, fundamentals, fundamentals, which might be me and Ryan. And then on the outside, on the left curve and the right curve, it's flows. It's all about flows. It's who's buying and who's buying more in comparison to who is buying last time. So flows. This one hurts me actually.

But you know what? I've got a meme on top of this. You know that that sniper meme with like you got the sniper and then behind the sniper is another sniper behind another sniper? Okay. Okay. So behind this meme is another sniper and it's actually fundamentals. Because over the long run, fundamentals equals flows.

You can't have flows. Flows follow fundamentals. Yes. Is that recursive enough for you? Yeah, that's for somebody in the bankless nation, please make that. Do you got to second me? It's like flows shooting fundamentals, shooting flows, shooting fundamentals. Exactly.

Forever. What's this? This is just, this is a meme, but it's also a warning. This is the man pointing at himself in the mirror and looking at himself. And he goes, it's not the bull market. You really are a genius. I believe all of our crypto asset portfolios are. up bigly over the last month or so, unless you've been shorting, which is you're an idiot then.

Because it's not because we're geniuses, Ryan. It's because it's a bull market. And that is something that everyone needs to remember as they go into a bull market and they continue to drink that bull market Kool-Aid. You're not actually a genius. You are a genius for sticking around in the bear market. That is what you are smart for. You put in the work, you stick around, you put in the research, you allocated correctly. Now it's harvest season, but you're not a genius. It's just harvest season. You already, you already were a genius, but you're not any more a bit of genius. Oh, yeah. Inject that humility into my brain, my bloodstream, David.

I'm not going to need it until ETH is over 10K. Then I'm going to feel super smart. But right now I'm just like I'm still relatively sober, honestly, at this early stage of the bull market. But check yourself. That's because ETH is lagging behind the market. So we are the designated drivers of crypto right now. I got to let you know, of course, David and I hold lots of different crypto assets.

We are long-term investors. We're not journalists. There's always a link to our disclosures in the show notes. And, of course, crypto is risky if you use your ledger wallet you will know that from earlier this week you could lose what you put in but we're headed west is the frontier it's not for everyone but we're glad you're with us on the bankless journey thanks a lot oh i want to remind you i'm sorry i thought they would be making cute sounds and it's just like uh yeah no there well yeah we'll have to

cut that out