Bankless - ROLLUP: Gary And The SEC Will Not Defeat Crypto

Starting point is 00:00:00 I mean, it kind of feels like that because it's so bad that, I mean, maybe the only way up is up from here. So, yeah, maybe it really, it's like $80, right? It literally cannot be worse. Bankless Nation, it is Friday, which means it is time for the bankless Friday weekly roll-up. So grab your coffee because we're going to cover all of the weekly news in crypto. With a little extra help today coming in from Australia, we got Anthony Sazano substitute teaching for Ryan, Sean Adams today. Anthony, thank you for tapping in once again. Again, I appreciate you. How are you doing, sir?

Starting point is 00:00:35 I'm doing well and always happy to tap in when Ryan's getting a well-needed service and recharge. Yeah, some software updates, some tinkering. You know, you know the deal. All right, it was a very big week in crypto this week. Anthony, as I'm sure you know, Gary Gensler declares war on crypto. A promising draft of a crypto bill. Optimism Bedrock comes in. Arbitrum runs out of gas. And a cohort of interesting Ethereum proposals.

Starting point is 00:01:03 So I think we're going to get into all of the news and more. And let's go and get started right into the prices this week. So Anthony, in the week that Gary Gensler declares war on crypto, we dumped a little bit, but then we recovered. Bitcoin down 1.8% on the week. Ether down just 1% on the week. What would you make of the price action this week? Because look at this big dip where everything dumps, but then like the Coinbase suit comes out and everything just recover.

Starting point is 00:01:29 So what's your take on the markets this week? Yeah, so it's actually quite. interesting to see this because this confirms a lot of kind of, I guess, talking points that I've been bringing up on my own show lately. And that's this concept of a time-based capitulation in the market where essentially we already had the price-based capitulation last year where things kind of bottomed out. Everything blew up. You know, everyone's leverage blew up. We had the mass de-leveraging event. All the tourists kind of went away and haven't come back. and what we see now is literally just these opportunistic short-term moves where day traders

Starting point is 00:02:04 take advantage of any volatility that they can have because they're starved for it right now and obviously big news events like the SEC suing two of the biggest crypto exchanges is going to cause some volatility but it really didn't cause much uh it really kind of as you said it went down a bit and then it went straight back up really because i think the market is definitely um exhausted right now. And no long-term investors are going to be selling for this. And anyone who sold was just a trader. And the traders are obviously selling, shorting,

Starting point is 00:02:34 then they're going to close their positions, and it comes back up. So I really think this is just the clearest signal that I've seen yet, that we're firmly in that time-based capitulation, where essentially the things just go sideways for a while until interest just slowly, slowly comes back, and we start going up again eventually start a new bull market. So, yeah, it's actually quite.

Starting point is 00:02:55 quite interesting the signal that descends that I think may have escaped a lot of people, especially people who maybe this is their first crypto cycle, but these are the best signals to be paying attention to because this is the market literally telling you, hey, like, I don't want to go down because I've already priced all of this in and like literally it's just traders trying to mess with the chart, basically. Yeah, usually when events like this happen, people ascribe price movements retroactively. But I think what you're saying and what I totally agree with is that the headline, SEC sues coinbase and SEC sues finance is such a big, scary, high signal to the market's headline. And so we can actually look at the price movements and say, like, this happened because of that.

Starting point is 00:03:37 And we can look at the price movements and see, like, well, it didn't go anywhere. It didn't, it went down a little bit. But what you're saying is it was just the traders. Like, everyone who's buying and taking exposure to crypto is unfazed by this. And since the market didn't really go down, you're saying that, man, we are in a place where anyone who's was going to sell has already sold and anyone who's left is just in it for the long haul so we're in that phase between like we're not we don't have a bull market we have nothing to be excited about but we have no further reasons to be bearish and so we're

Starting point is 00:04:08 just crabbing we're just neutral yeah yeah and i would wager most if not pretty much all the the people that are in this still right now and a long-term investors they're probably not going to change their mind here. They're probably not going to stop buying crypto. They're probably not going to sell what they have. You know, there are certain people, I would assume, that would be maybe selling some if they need to take some risk off the table or maybe kind of changing their thesis because of this. But at the same time, we've known for a very long time now that the regulators don't like crypto at the moment. The SEC especially in Gary Gensler don't like crypto. So I think the fact that they actually made a move is a relief because markets generally hate uncertainty. And Gary Gensler

Starting point is 00:04:50 making his move and basically putting it all out in the open and airing it out, basically removes that uncertainty from the market. And I actually think that people believe that this is going to either be settled and there won't be any kind of, I guess, material impact in the long run, or will actually get a positive impact from this where we actually get legislation written and passed, and we actually get proper regulations put in place, because I don't know how Gary Genslow is going to go to a court of law and argue that he has actually done. what he's supposed to do to quote unquote protect investors, while there's all this evidence to the

Starting point is 00:05:25 contrary, especially going up against, as I said, like two of the biggest exchanges who have a lot of money and a lot of will to fight this. I think at Coinbase especially, Brian Armstrong and definitely his chief legal officer, Paul Grebel, who you interviewed yesterday all the day before, I think they're very ideologically involved in this. And it's really it for them about making sure that they can ensure that the SEC can't just get away with doing whatever they want, which I think is just based, I guess, at the end of the day. Yeah, and we're definitely, we obviously have more to talk about with the SEC and Coinbase and Binance, but to me, the fact that Coinbase has a date with Gary Gensler and the

Starting point is 00:06:07 SEC in court is bullish. That is a good thing. That is something to be excited about. Just one last thing on this whole, like, time-based capitulation thing. Because I remember when we went through this, Anthony, back in the last bare market, right, between 2017 and 2018 and 2020. We were in that 2019, I'm not sure of crack and charts. Oh, there they too. Lovely. So, like, right now it kind of feels like we're right here. And I'm pointing to the era where Ether went up to, like, almost $400 in the middle of 2019 before it went back down to 120 before the COVID dump, then back down to 80.

Starting point is 00:06:43 And so, like, to me, this was like, here is what we just went through from 2018 to 2019. And then 2019 to 2020 was the time-based capitulation part of the market. And I'm kind of worried if we, like, play this forward. We're at this, like, local high over the last year or so. And it kind of feels like 2019. We're like, yeah, we bottomed. And then we doubled. And then we went back down to the bottom again before we had a bull market.

Starting point is 00:07:11 And so I'm kind of worried about, yeah, we are. in a one-year era-long high that's going to find, like, go back down just out of boredom, not for any particular reason, but out of boredom, it'll go back down. How do you feel about that? So there are definitely a lot of similarities between, I guess, the last maybe six to 12 months and 2019. I think on the non-priced side of things, so like the social sentiment and stuff like that, definitely feels very similar.

Starting point is 00:07:37 But I would caveat the price action of 2019, especially on, on, on ETH with the fact that during 2019, especially during the time when ETH and BTC went up a lot and was a few months, about mid-20, oh, I guess like early mid-2019, there was a massive Ponzi being run out of, I believe, China called Plus token. And this Ponzi took in a lot of Ethan BTC, like many billions worth. And it was a huge source of buy pressure. Now, I believe that is the main reason why the price retreated so much. And I struggle to see. how ETH is going to do the same kind of price reduction, because I believe it went to 360 and then down to like 100. So whatever percentage decrease that is, I think it's like 60% down

Starting point is 00:08:22 or something. I struggle to see ETH going down 60% from where did it go to like 2,100 or something, 2,200, the last local top we had. So it could go down from here, I'm not sure, but at the same time, we don't have that same kind of artificial kind of buy pressure that brought us back up here. and also, ETH is much bigger as an asset than it was in 2019, so the volatility is definitely going to be less. So, yeah, as I said, we could definitely go back down. We could go back down to like 1,400, which seems to be a place where people like to test levels because it's the old all-time high, right? It's the 2017-18 all-time high. But at the same time, yeah, the market's been extremely resilient in the face of everything over the last, I guess, six months especially.

Starting point is 00:09:07 Yeah, man, it has been a while since I have heard the word. plus token. So yeah, maybe the claim is that the high of 2019 was artificially pumped and perhaps even the low of 2023, 2022 was artificially low because of the FTX and all of the leverage of three hours capital, et cetera. Okay, cool. All right, moving on to something I know that it's both you and me. This validator queue is up only. If we want to look at charts that are up into the right, the validator queue is the one to look at. There are now 700. thousand validators coming, 600,000 active and 100,000 waiting to come into the network. That is a wait time of 44 days, 20 hours, which is, I mean, it was at all time highs last

Starting point is 00:09:55 week. It was at all time highs the week before. It's all time highs this week. And of course, the exit queue is just zero. So you are free to leave, eat staking, but to get in 44 hours, 20 days. What do you get, what do you make of this, Anthony? Yeah, I mean, I honestly, as bullish as I am on eat staking, I didn't expect there to be this big of a queue so quickly. I mean, we are not that far from Chappellea or staking withdrawals being live. It's almost been two months now since they went live and wow, those two months have gone by very quickly. But the fact that we're already at like 95,000 pending validators with, you know, 44 days waiting around here to clear that queue. And it's just been up only. only with basically besides Cracken Withdrawing and a few other withdrawers here and there after Chappello went live, we haven't really seen any withdrawals. And it has definitely surprised me in a very good way, obviously. And I think that it's kind of a bit frustrating for me because I want to spin up some more validators. And I'm like, I still do it, but then I'm like, I remember the days of

Starting point is 00:10:58 not having to wait even like a day to spin it up. Like in the Q's just in limbo for 45 days. Yeah, yeah. So basically, but there are other ways to obviously get into staking as well. I believe some of the LSDs like front the yield for you anyway before they kind of activate the validator. But there are different ways to do this. But I think that seeing it being up only like this just really validates a lot of people's thesis around withdrawals being a massy risking event and being incredibly bullish instead of bearish. And it's just funny to see how wrong the bears were about that kind of withdrawal upgrade. God, Ethereum, Ethereum bears, always wrong. Always wrong. It is a trend. It reminds me, I was saying this last week with Ryan. Like, we were all bullish on the burn pre-EIP-1559, and then EIP 1559 came in, and it was burning way more than we all thought that it would. And now the same thing is happening with staking.

Starting point is 00:11:53 It's like, we knew that we thought, the Ethereum bull thought that it would be a derisking event. We didn't realize to what degree it would just open up the floodgates for so much ether to come in. And I think like once it became slightly bigger than expected, that started to become a medic. It's like, oh, everyone's staking. Look at, look how many people are taking. Maybe I should stake. And it was big enough to the point where it turned into a meme. And now everyone's like, oh, everyone else is staking.

Starting point is 00:12:20 I guess I'll just follow the herd. And now everyone is staking, which I think is like of all memes to get behind. That's a great one. Definitely. Yeah. And it's just great marketing because everyone's talking about it's staking now. And people are understanding that you can get. that really nice real yield on each staking because obviously there is the issuance part of the

Starting point is 00:12:40 rewards but there's also the execution layer rewards which are fees and MEV that's actual real money that's being spent by network participants that go to validators so yeah I think people finally woke up to eat staking moving on to some stats here I thought this was pretty interesting since we are in June halfway through the year I wanted to pull out some centralized exchange volume stats. So starting the week, Coinbase was at 47% of United States trading volume, 47.5%. Now it's actually down to 38%. So Coinbase has actually lost 20% of United States market share. Krakken is at 14.8% to start the year and is actually up to 22%. So it's up 50% on the year. And Anthony, question to you, but number three, United States volume crypto exchange, LMAX Digital. What the hell is LMMAS?

Starting point is 00:13:30 AX Digital. I have never heard of this. The only time I ever hear about them is on the block because they're their headline sponsor. You can actually see on the left-hand side of your screen there, it's got Al Max as their logo. They're all over the block as a sponsor. I've never used the exchange. I don't really know anyone that uses it, but yeah, I mean, it seems that their volumes are pretty big. Yeah. Yeah. Okay. All right, I never, never heard of it. You can see up here's this FTX is going to zero. FDX, geez. It just goes to zero.

Starting point is 00:14:02 Obviously, of course. Yeah. Pop quiz. What percentage do you think Gemini is at? It can't be that much. I know you can see it on the screen, but it's pretty small. It's way smaller than I thought it would be. It is at 1% of United States trading volume.

Starting point is 00:14:18 I did not realize it was going to be that little. Yeah, I mean, I feel like Gemini has always been the just the very small kind of not really talked about that much, exchange or US based exchange. They do make a lot of ways, I think, because of the fact that the Winkle Voss twins are the founders of it and they're pretty famous and they had their GUSD stable coin, but that didn't really go anywhere. So I'm not surprised by the lack of volumes there, especially given that they, I believe, were affected a lot by the stuff that happened with Barry Silbert and his different companies like DCG and stuff like that. So yeah, I do feel like that's not surprising, But it might be surprising to people generally, though.

Starting point is 00:14:59 Yeah. Finance US volume started the year at just about 9% United States market share, currently coming in at just 7%. And I expect that to approach zero next month because of the SEC's approved request to freeze all of finance assets, which is actually where we are going to get to next. We're going to talk about SEC suing finance and Coinbase. We're going to talk about the promising new crypto bill inside of the United States.

Starting point is 00:15:23 And also this cool proposal that put always... was put out on the ETH Research Forum to increase the maximum balance of ETH per validator allowing us to go above 32. I know Anthony's probably got his finger on the pulse of that, so we're going to talk about all of that and more. But first, I'm going to talk about these fantastic sponsors that make this show possible, especially Cracken, our preferred exchange for crypto in 2020, which is increasing its market share in the United States volume. So maybe you should join the herd. Let's go here from Cracken. Cracken Pro has easily become the best crypto trading platform in the industry.

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Starting point is 00:16:58 into to increase the utility of ETHX. Stater allows for both permissioned and permissionless nodes to join the network, maximizing its potential scalability for ETHX, while preserving the values of decentralization and openness behind its liquid staking token. Go to Staterlabs.com and sign up to get access to the Stater staking protocol. Bankless Nation, we are back with our favorite person ever. Gary Gensler. Anthony, you ready, hear from Gary Gensler? Here we go. We don't need more digital currency. We already have digital currency. It's called the US dollar.

Starting point is 00:17:30 It's called the euro. It's called the yen. They're all digital right now. We already have digital investments. And you have digital, you have entrepreneurs representing digital investments on this program all day long. And it's whether it's the big tech companies, the automobile companies, you name it. It's all digital right now, the investing world. What do you think about that, Anthony?

Starting point is 00:17:54 Oh man, he just really revealed his true intentions, huh? It seems like his true intentions for crypto is to basically effectively ban it in the US because he seems to personally not like crypto, which, oh, man, which is just ridiculous because a bureaucrat like this shouldn't have the power to do that, let alone be able to just openly say that and basically try to impart his own views on an entire industry. It's ridiculous. And honestly, I believe at this point he should resign, given not only what he said here, but a lot of the stuff that he's been doing.

Starting point is 00:18:32 But unfortunately, due to politics, I don't think that's going to happen because the Democrats don't want to have their chair, the SEC chair that they appointed resign because it would look really bad on them. But generally, yeah, him saying this is literally just him being like, oh, well, I'm going to drop the facade now and I'm basically going to tell the world what I really think. Yeah, that's exactly what Jake Chavinsky. take was, is like, he has been operating by like a veil of obfuscation and uncertainty and clarity. And now with suing Coinbase and Binance after doing the whole thing, like, Coinbase,

Starting point is 00:19:07 you're totally allowed to go public. You're totally fine. And then suing them later after the fact. That's exactly what Jake said, too, is like he's just now revealing his true intention is his true colors. Even though like we all, we all kind of knew it, it was still just like a gut feeling that we knew it. And now I feel like everyone has like the strong assurance. It's like, no, this, this is Gary and he's being a rogue tyrant. So just to recap the news, Bankless has done four shows on this this last week. So we'll just recap this really quickly. SEC has sued Binance and CZ on allegations of violating federal securities law, failure to register as a clearing agency, failure to register as a broker and failure to register as an exchange,

Starting point is 00:19:44 staking securities and staking as a service or also implicated. So the, the, um, uh, the, uh, the, The staking service provided by Binance US was deemed a security tokens, including Solana, Cardanom, Matick, COT, Algo, Filecoin, Adam, Sand, Axi Infinity, and Manna were deemed as securities. Interestingly and unique to the Binance case was that CZ and Binance were charged with commingling funds. So customers' assets were put through an illegal entity that CZ owned and controlled called Sigma-Chic. chain. And so that is unique to the Binance case that is just not something that is in the coin-based case that we're going to get to specifically. Interestingly, also B-USD was named as a security, B-USD, the stable coin. And using the customer funds that was funneled without customer's permission, apparently over $20 billion went through this entity that CZ owned

Starting point is 00:20:45 Merit Peak that was associated. I don't know if all $20 billion was buying B-U-S- but some amount of money going through this legal entity that CZ controlled called Merit Peak purchased BUSD the stable coin and some of that money was it was users funds so not great not great interestingly the day after the SEC has seek emergency relief to ensure Binance US customers are protected in that is just implementing a restraining order a freeze on all Binance US assets and so if there is any concerns learn that Binance, US at least, is insolvent. We're about, we're about to find out.

Starting point is 00:21:25 I don't think there's any indication that there is, but either way, we will learn. Anthony, what's your take? Yeah, I mean, the Binance case, I guess, like outside of the securities, kind of unregistered securities that the SEC claims that both them and Coinbase have been trading in is generally, I guess, pretty strong, to be honest, because, I mean, it's been an open secret for a while that Binance has been pretty shady, right? Especially in the early days of Binance, it's not like, it really has been an open secret. It's not something that I think that most people would disagree with, given that they've

Starting point is 00:22:01 been operating basically on this notion of regulatory arbitrage where they move around different jurisdictions, they don't really have a permanent office, and they do a lot of things that are quite, quite dodgy. And there is a lot of evidence that the SEC has and has put out there that, I mean, it doesn't prove anything yet. Obviously, they have to prove it, but it makes Binance. look pretty bad. And the Coinbase case really doesn't have any of that because I don't think any of that went on. And they're really just going after Coinbase for trading things that they allege are unregistered

Starting point is 00:22:30 securities. So I think Binance, look, I want Binance to win just based on the fact that the SEC doesn't deserve to win any of these cases, given just how fragrant they have been and how they're trying to stuff like the unregistered security stuff. But at the same time, I'm not going to sit here and defend Binance and say that they're totally innocent in this and they haven't done anything wrong given that the evidence that I've seen so far, but also given what I know about Binance since I've known about them since they basically became a company and all their practices over the years. But yeah, I mean, it's going to be interesting to see what comes out of this because we've already seen a bunch of dirty laundry aired by Binance lawyers themselves. I don't know if we're going to talk

Starting point is 00:23:08 about this, about how Gensler tried to become an advisor to Binance in 2019. So, yeah, you've got it up there. So if we're getting that this early, what else are we going to be getting from, from Binance's lawyers? Are they just going to take the gloves off and start airing all this stuff. I don't know. It's going to be interesting time to see what happens here. Yeah, the Binance case is, it's interesting due to its mixed bag nature. There are things that are not about Binance that Binance is charged with. Like staking as a service platforms are deemed to be a security. Binance is caught up in that. BUSES stable coin as security. Binance is caught up in that. Like Solana, Matick, all these tokens trading on

Starting point is 00:23:47 finance exchange or securities, finance is caught up in that. And then there's the commingling of user funds from offshore entities that CZ controls. And to Gary Gensler's benefit, he's able to wrap all of these things up together and say, look at what these crypto exchanges are doing. They are operating an unregulated Wild West fashion with no rules outside of the rule of law. And he gets to wrap everything together and put the bad things next to what the crypto industry thinks are just like the normal and good things. So that it's, I mean, it's a pretty smart strategy from Gary Gensler, but like still illegitimate nonetheless.

Starting point is 00:24:25 Yeah, so the headline, of course, finance lawyers alleged that SEC chair, Gensler offered to serve as advisor to the crypto company in 2019. It's just, it's been amazing. You could not write a better script. Really. I mean, it's amazing to see how Gensler has changed his tunes over the years because, over the years, because he used to teach courses on Bitcoin and, blockchain at MIT. He used to promote other kind of blockchains like Algorand, right? Of all

Starting point is 00:24:52 blockchains, he was promoting Algorand. And then, you know, two, yeah, exactly. Two, three years later, he's just completely changed his tune to effectively wanting to ban crypto in the US. So I don't know exactly what has changed. I don't really have evidence to what has changed. I have my own speculations. One of them being that it seems like he cares more about his own personal power and political power and he wants to advance his own career other than anything else. And he sees crypto as like a joke. It doesn't deserve to live. And it's just his way to, I guess, get more power by going after crypto. Because right now it's very popular to go after crypto. But also, I feel like he's trying to get a lot of the egg off his face from basically cozying up

Starting point is 00:25:31 to SBF and not going after FTX, but now going after Binance for pretty much similar things that he should have gone after FTX for. There's a lot of things, a lot of moving parts here. But yeah, It doesn't seem like Gary Gensler is acting in the best interest of the American people at all. It seems like he's acting in the best interest of himself and himself only. Yeah, that was Jake Chrivinsky and Amanda's take when we did the show yesterday. Gary Gensler is using crypto as a means to an end to elevate his political status for some sort of political aspiration. So he's just one of those figures, one of those people that plays a political game that would like a bigger and bigger chair. And so he's using crypto as a way to do this.

Starting point is 00:26:13 Okay, turning into the Coinbase side of news, SEC charges Coinbase for operating in unregistered securities exchange brokerage and clearing agency, more or less the same exact suit that they took to Binance. The big things here, the unique thing that is unique to the Coinbase suit is that they emphasize the Coinbase wallet. And they said that Coinbase is offering brokerage's services via Coinbase wallet. And so they, and this is what was actually said in the Squawk box that interview that Gary Gensler was on is like, Coinbase lets you trade 16,000 tokens using their software. He was basically just saying, yeah, with Coinbase wallet, you can trade on Uniswap and you can access all the tokens there.

Starting point is 00:26:55 It's basically what he's saying. But they, in this suit, the wallet is being mentioned as part of Coinbase's exchange infrastructure, which is kind of positioning the SEC to, go after generalized defy non-custodial wallets on custodial apps anything that allows a token to be traded so that is a foot in the door that sets a precedent that is that is unique to this case of course the the big components about this thing is is unlike the finance case the only thing about the ccv coinbase is that coinbase is being charged with elisting securities and doing security things like the staking as a service with CBEath, Solanamatic, like many of the other tokens were deemed securities. And so there's nothing that Coinbase did like commingling funds or sending users

Starting point is 00:27:45 money offshore or etc. Anything like that. It's just about, hey, Coinbase is doing things with securities. And so that's really all they are claiming about Coinbase. And of course, interestingly, the SEC used Coinbase's risks disclosures from their own S1, which, which an S1 is what you file before you go public as a company. They used, the SEC used Coinbase's S1 as evidence against Coinbase because Coinbase said, hey, some of the SEC might deem some of the assets that we have on our exchanges to be securities. And the SEC goes, ha-ha, so you knew, which is insane because it's actually self-referential argument. Anyways, about Coinbase specifically, Anthony, what's your take here?

Starting point is 00:28:30 Yeah, I mean, I feel like there's a lot of, a shotgun approach here from the SEC, basically trying to go after everything at once and maybe try and overload Coinbase's resources because they know that Coinbase will fight this and fight this basically till its end. They're not going to give up, it seems like. So maybe they're just trying to go after them with everything they've got and water them down or kind of make it harder for them. But at the same time, yeah, there is all this evidence of the SEC doing things that don't make any sense, right? They basically let Coinbase go public and they're now, alleging that they're trading securities or trading unregistered securities that they were trading

Starting point is 00:29:06 at the time that they went public. So when you kind of look at that from that lens, it looks very weird. And it seems like the SEC has a bone to pick with Coinbase specifically as well. I think because Coinbase is fighting so hard, they're like, well, if you're going to fight us on this, then we're literally going to come after you with everything we've got, which is what I feel is happening because this isn't the first time the SEC has gone after Coinbase and given them grief. obviously with Crackham, you know, they went after Cracken for their staking product and then Cracken closed their staking product down and the SEC hasn't gone after them for anything else. Like, why isn't the SEC going after Cracken for trading the same assets that Coinbase is trading?

Starting point is 00:29:43 Maybe they will. Like, maybe this is going to age poorly and they're actually going to sue them as well. But if they don't, then it clearly seems like they are only going to go after the people that say they're going to fight because they want to make sure that no one else gets the idea of fighting them. Because if you try to fight us, we're going to come up. after you with everything we've got. Now, that's just pure speculation on my part. Maybe I'm wrong. Maybe they will sue Cracken. But yeah, it seems like they're definitely trying to go off the Coinbase as hard as they can. And with Binance, it's limited in scope, just as a related point here,

Starting point is 00:30:13 because it's only Binance US. They can maybe have some jurisdiction over Binance Global if they can prove that CZ was commingling funds and all that sorts of stuff. But it's probably going to be limited to Binance US. And I think that what's going to happen is Binance US will probably just shut down. I don't think Binance cares enough about Binance. N's US to keep it alive in the midst of this. And then, yeah, once it shuts down, I don't think they're going to cry over it. But the SAC pretty much gets what it wants as well. In a extremely chad move, Brian Armstrong says that he will not be shutting down the staking service. So Coinbase will continue to run the CBE staking as a service program. They were ready to prove this in court that what

Starting point is 00:30:53 they are doing is not a security. And so they appear to be so confident that is not a security, that they're not even going to bother to shut it down. Senator Bill Haggerty says the SEC is weaponizing their role to kill an industry, allowing a company to list publicly and then stonewalling their attempts to register is indefensible. Gary Gensler expect to hear from Congress. So it's stuff like this that is like, man, Gary, what you're doing, bro? Because you're going up as Icarus flying right into the sun.

Starting point is 00:31:23 At least that's what it appears to me. and he's getting pushback from not just all of the crypto industry, but many, many regulators and legislators in government. For some reason, Gary thinks that he can just do this and get away with it. Anthony, do you have a take here? Yeah, I mean, you can see that this is a Republican, right? So I don't think Gensler actually cares about what they say. I think Gensler cares about what high-ranking Democrats think and what they say.

Starting point is 00:31:53 And unfortunately, they're on his side, right? you have Elizabeth Warren that's on his side. You have, by proxy, really Biden that's on his side because he listens to Elizabeth Warren on a lot of this stuff. You have Maxine Waters, I think, as well, Brad Sherman. There's just these names you see pop up time and time again that take the side of the SEC and say that the SEC is doing a great job, blah, blah, blah. And the Democrats, at least in the Senate, in that the presidential level are in power right now. So I think Gensler doesn't necessarily care what these people think. He only cares what those people think.

Starting point is 00:32:24 And I've been thinking about this recently. This might be a bit of a crude analogy, but I'm thinking of as like the human centipede of the high-ranking Democrats where you basically have these three high-ranking. I think it's like, you know, Biden, Elizabeth Warren and Gary Gensler, and they all seem to be working on the same wavelength of, you know, screw crypto, the SEC needs to be able to regulate this industry. It's bad for everything. Warren's trying to go out and say that crypto is responsible for the fentanyl crisis in the US.

Starting point is 00:32:53 And I'm like, this is just insane. They're literally making shit up now because I think that they're getting so much pushback from the crypto industry and they're getting so much push back from other angles. They're just like, you know what? We're just going to make stuff up. Now we're just going to say whatever to get what we want because maybe they're even getting frustrated at this point because crypto is putting up such a fight as well. But yeah, it's very weird when you look at it and very weird what they're doing.

Starting point is 00:33:18 But then when you kind of come to the, I guess, conclusion that a lot of them are just in it for power. want as much power as they can assume for themselves. Maybe at the end of the day, they don't actually care how this all resolves. They just want to make headlines. They just want to market themselves, and that's really it. Because Gensler may not be the SEC chair when the Coinbase and Binance cases are resolved, because it could take two, three years for it to resolve,

Starting point is 00:33:41 and Gensler may have moved on already to Treasury or something like that. So I think really it's all just a power play for them at the end of the day, and I haven't seen anything really to suggest otherwise. Moving on to a different part of this conversation. I know this one triggered you, Anthony. This is a Jack, Jack Dorsey, Jack on Twitter retweeting a question saying, Is Eith a security? And Jack Dorsey, former CEO of Twitter, just says yes.

Starting point is 00:34:09 And I'm going to also bring up this tweet from Udi Wertheimer, who goes, Coinbase onboarded millions to Bitcoin, minted many multi-millionaires by giving them trusted access to Bitcoin early on, helped onboard institutions such as micro strategy, and he says, seeing laser-eyed Maxi's cheering as the SEC tries to take down Coinbase makes me stick to my stomach. Anthony, I know you've got some hot takes about this. Yeah, I mean, like, there's no secret that Jack is a Bitcoin Maximus, right? And it's just very sad that these people fall into this camp of, oh, we're cyphalunks,

Starting point is 00:34:45 oh, we're anti-Nation state, we're anti-government. Oh, wait, no, SEC, please call it. label ether security, please police all the other crypto assets out there, and please just bless Bitcoin and make sure that Bitcoin is the one to holy asset in crypto. And it's just really embarrassing and disgusting. And then Jack says this, and then he's challenged on this, and he doesn't reply to any of the challenges, because people actually explain to him, hey, you know, he is not a security because of this, this, and this reason. And yeah, there's no logic here. There's no reasoning behind it. All it is is tribalism and fanaticism and these people just wanting

Starting point is 00:35:20 the competition to be killed by the state, which is just the grand irony of it all coming from Bitcoiners. But don't forget that today, this week, the SEC is officially 89 years old. So Gary Gensler saying, happy birthday to the SEC. Thank you to the Securities Exchange Act of 1934. And then he breaks it down with a thread. It's unreal, man. It's so bad, man.

Starting point is 00:35:47 If you scroll down a bit, you might see my reply to this. I don't know, maybe show more applies. I don't know if that's going to, yeah, there you go. I said like 89 years old. You're zeroing in a ratio on him. Yeah, explains why there doesn't seem to be any signs of cognitive function left. I thought that was pretty funny. Oh, my God.

Starting point is 00:36:05 It's what world does this live in? And then to finally tie off this conversation, we just have Gary Gensler kind of doing like the aliens pose and goes, Earth is a security because everything is a security according to Gary Gensler. Okay, that was all of that conversation. Coming up next, we got a bunch of Ethereum news. We got both optimism and Arbitrum experienced downtime this week. One was planned ahead of time. One was not.

Starting point is 00:36:30 An ETH research proposal to change the 32 ETH stake number, along with a bunch of other pretty cool, exciting things. Nick Johnson's got an ENS update, Pool Together's got an update, Rocket Pool, and ZK Sync Era has an update. We're going to get to all these conversations and more. But first, a moment to talk about these fantastic sponsors that make the show possible. Learning about crypto is hard. Until now, introducing Metamask.

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Starting point is 00:37:25 languages with more to be added soon, and it's meant to cater to a global Web3 audience. So, are you tired of having to explain crypto concepts to your friends? Go to learn.menomask.io and add Metamask Learn to your guides to get onboarded into the world of Web3. Mantle is a brand new, high-performance Ethereum Layer 2 network, built differently from the other layer 2 you may be familiar with. Mantle is a modular layer 2 built on the OP stack, but uses eigenlayers data availability solution instead of the expensive Ethereum layer 1. Not only does this reduce Mantle's gas fees by 80% compared to other layer 2s, but it also reduces gas fee volatility. Mantle has a decentralized sequencer set, eliminating the risk of downtime and censorship on the network. And because

Starting point is 00:38:09 Mantle implements multi-party computation nodes, layer 1 settlement execution is shortened from 7 days to as low as just 1 or 2. Mantle is the first layer 2 built. by a Dow and is backed by one of the biggest Dow treasuries in the world. Bit Dow. Mantle already has sub-communities from around Web3 onboarded to help the growth of Mantle, like Game 7 for Web3 Gaming or Edu-Dau for the world of D-Side and by bit for TVL, liquidity, and onramps. Check out mantle at mantle.xy-Z and follow them on Twitter at ZeroX Mantle. And we are back with Bedrock. Bedrock is now installed. Is that the right word? Into the OP Mainnet. So the OPEMany. So the mainnet went down for a few hours while they upgraded the network into its bedrock update.

Starting point is 00:38:54 And so that is now concluded and the bedrock sequencer is now up and running. Roto's bedrock due, it reduces transaction fees. It sets up the OP mainnet to have this coherent super chain ecosystem. It does a bunch of other things, everything to be excited about. It just lays the foundation for a bunch of future steps. And it also improved the security by implementing a two-step with three-step. withdrawal process for bridge access assets, assets, which helps the security of the chain itself.

Starting point is 00:39:22 Loading up a layer two fees. Info, you can now see the optimism. A swap on optimism is coming in at nine cents, which I believe makes it the cheapest optimistic roll-up that there is. Of course, there's a ton of variables that goes into this thing. So that is not just a simple way to view these things. But still, coming in at nine cents on a unoswap swap, that's pretty good. Anthony, what's your take about optimism bedrock?

Starting point is 00:39:46 Yeah, I mean, it's been a simple way. a long time coming. It's basically their version of Arbitrum Nitro. So Nitro went live on Arbitrum a few months ago and now Optimism has with Bedrock and it's got it's basically upgraded the whole OP stack. So anyone that's using the OP stack such as base, the the Coinbase layer two will be able to take a benefit of this as well. And I think one of the major things and you've got it up here on your screen that Jesse Pollack talks about is that with the bedrock upgrade, optimistic roll-ups built using the OP stack will actually be able to use validity proofs. and not just fraud proofs.

Starting point is 00:40:19 And a validity proof, essentially, if you use that instead of a fraud proof, you make your chain, what I guess is known as a zero knowledge roll-up instead of an optimistic roll-up. And you can build hybrid constructions as well and things like that. And this is something that I've talked about for a long time saying exactly what Jesse says, yeah, it's not zero-knowledge or optimistic roll-up, it's both. It doesn't have to be either-or-you-or-you-n't have to choose. You can literally do both, and the best technology can win in the long run. And optimism and arbitrums networks can be.

Starting point is 00:40:47 upgraded to be, you know, ZK Roll-Ups, essentially. So they're not stuck being optimistic roles, which I always found bizarre that people thought that they were stuck and they couldn't upgrade when literally it's just technology, it's just software. Of course, you can upgrade it right. And neither of these chains right now are trying to be like super decentralized or they have to go through a long-ass process to get upgrades into the network. They're upgrading and moving at a pretty rapid pace.

Starting point is 00:41:11 So, so yeah, but, but yeah, Jesse's tweet here, I think addresses that nicely as well. Yeah, and it's important to note that. a validity prover, a ZK validity prover is a very important step to enable what the optimism ecosystem calls the super chain, right? The cross-chain composability of OP stack chains. ZK tech from just a high level just allows for composability and synchronous synchronicity across chains. So this is just a step in that direction. So congrats to the optimism team for shipping bedrock. They've been having their sites on that update for a very long time now. also in the layer two world. Arbitrum ran out of gas. So it stopped deploying its transactions,

Starting point is 00:41:54 its checkpoints to the layer one because it ran out of gas to do so. That happened for about an hour before someone sent 1.4th back to the sequencer so that it could continue to checkpoint to the layer one. But the arbitram actual chain still continued as normal. It still was a blockchain, a layer to adding arbitram blocks onto the arbitralbloc chain, it just wasn't checkpointing to the layer one for a little bit over an hour until we filled it up with gas. It's one of the more unexpected reasons as to why a layer two will stop checkpointing. How would you classify this, Anthony? Because it's this isn't downtime. It's just like non-finality of a layer two. How would you, would you explain what this meant? Yeah, definitely, you know, downtime is probably the wrong term for it. But

Starting point is 00:42:44 Also, there's some added nuance here that the reason why the, I guess, like, the address that's used to batch ran out of ETH for gas was because there is an automated process that actually refills that address with ETH. But there was a bug. You can actually see it's detailed here. There was a bug that occurred on the sequencer that led to its batches reverting on chain. So when the batches revert, the sequence always not refunded the gas cost for sending the batch from the contract that refunds them. So this isn't like a human sitting there having to re-up the ETH that's in the account. This is an automated process, but because there was a very specific bug, it made it so that automated process didn't happen because if it did happen, it would have actually drained all

Starting point is 00:43:25 of the Eth for no reason. It wouldn't have worked properly. So this bug happened. They fixed it, and it wasn't just someone forgetting to send Eth to the contract. And in saying that as well, anyone can send ETH to this contract. So anyone could have started this up again if they wanted to, which is, I think, actually pretty cool. Okay, moving on to this ETH research proposal, increase the max effective balance, a modest proposal.

Starting point is 00:43:49 So this is coming from Mike Nuter. Basically, this idea is to reduce the rigidity around the 32Eth minimum to become a validator. Now, it's not proposing a lower number, but it's proposing that 32 doesn't have to actually be the maximum number. So right now, like validators are in increments of 32, 32 or 64 or, oh gosh, 96, 96. is how that math works. And so he's saying, like, we don't actually have to have that rigid upper bounds. So it could be 32, it could be 33, it could be 32 and a half. And so as a result of this 32-Eth rigidity, we have a very large set validator set

Starting point is 00:44:27 because every increment of 32, instead of 320-Eth becoming one validator, it becomes 10 validators. And so what does this do? This has just overhead, it increases the overhead about the whole networking layer. And so this proposal to increase the 32-Eth max-effective balance, what this actually does is actually, in my mind, I think it's really bullish for solo stakers because as they get ether from staking, they have to wait to accumulate 32-ether in order to redeposit it. But with the increase of the max-effective balance, they can stake 33-Ether, 33.1 ether, 33.2 ether.

Starting point is 00:45:04 And so they get to auto-compound their stake and have faster compound interest. there's a bunch of other benefits but Anthony I'll leave it to Hugh to explain those because those are more technical and I know you're more technical than I am. Yeah, well, so the way this basically would work is that right now, I mean, the way it works today is that you're right. 32-Eath is the minimum it's required to spin up a validator, but it is also the maximum in that if you add more than 32-Eath to one validator, you are not going to earn more rewards. You are only going to earn rewards on that 32-Eth. And if you were to spin up a second validator with another 32-Eth, that's when you start. start earning additional rewards because you've now spun up another validator. And with this proposal, what would happen is that, as you said, you could stake a maximum of,

Starting point is 00:45:48 I don't know what the exact number is. I don't know if that's been ironed out yet, but let's say the maximum is like 96th, right? So it's a three validators worth. Well, you could stake like 70th or 80th in one validator and you would earn the rewards based on that. So proportional to your eth stake. Now, why this is really cool is that it, look, it doesn't mean that you, like as a solar stakeer, as you said, you don't actually have to save up to spin up another 32-eath. So say you have 32-Eath and you've staked it, and then you have another 10-Eth, well, to stake that into another validator, you would need to acquire another 22-Eth. But with this proposal, you could just add that to your existing validator.

Starting point is 00:46:23 And then also with your rewards that you get, you can also add them to your validator. And the advantage that LSDs have right now over solar-staking is that they can actually compound their rewards because they have a huge amount of rewards coming in and they, they, can compound it for the whole share of the LSD network, whereas solo steak is actually have to wait until they have 32th again to compound their reward. So this would basically allow them to do this. And now, because of this, what this also does on the technical side of things is it basically allows for a reduction in the amount of, I guess, like actual validators there are, but it's not a reduction in security. There would still be the same amount of each state. There would still be the same amount

Starting point is 00:47:02 of full nodes. And it's just that the validators, like instead of someone running 10 validators, because they have 320th, they would run one validator that gives them 320th as well. So that has 320th then, and the rewards would be the same. So, and then, as I said, the compounding rewards would also factor into this, which is really exciting. And what this does by reducing the validator account is it takes the load of the peer-to-peer layer. So it makes it easier to run validators and full nodes. It's already really easy to do this, but it takes the load off, takes the load off the network, makes the network generally more stable, resilient and secure.

Starting point is 00:47:37 And then it also enables other things. So if you scroll up to the top of this post, Mike actually says what this does. It actually unblocks something called single slot finality and enshrined PBS and reduces unnecessary strain on the P2PLA. So single slot finality and enshrined PBS are two of the biggest upgrades coming, I believe, to the beacon chain over the next few years. And I'll quickly just explain both of those.

Starting point is 00:47:59 Single slot finality basically reduces the finality time from the current around 13 minutes, so two epochs, to 12 seconds, because a slot is a block on the Ethereum Beacon Chain, or, I mean, it's not literally a block, but people think of it like that. It's 12 seconds. You would have finality within 12 seconds, and then enshrined PBS is basically taking what MEV boost does today with the relays and the MEV ecosystem there, and basically enshrining it in the Ethereum protocol itself. So it's not a piece of separate software you run. It's actually part of the core protocol, and this would allow for those things to go live there. And I think just one last thing, I know I'm ranting a little bit here, but one last thing,

Starting point is 00:48:36 there is potentially a downside to this that people have brought up in that it would unfairly reward those who basically had, I guess, like more ether to compound than those that didn't because of the share of rewards. But I haven't looked too much into that. I haven't done the math on that, so I can't give too much of an opinion on that. But I believe that would be something that needs to be researched and kind of ironed out before we could do something like this. But overall, this is a very promising proposal and something that I believe in one way or another, one shape or another will actually get implemented into the protocol.

Starting point is 00:49:08 Yeah. This was just proposed two days ago on the ETH Research Forum. So it is in its pre-EIP phase. I don't even know if it has an EIP number. No. Very, very early in the process. But I think many, many of us are very excited about it. Moving on to ENS update.

Starting point is 00:49:25 So this is Nick.Eath, Nick Johnson from the EMS organization. excited to show that this is now public my dot box dot box will be the first blockchain native dns routable tld and it's enabled via ens all registrations and transfers will be on chain and the owner of the n nt nfts will own both the dns and ns names uh i think what this means check uh check me if i'm wrong but there's these new domains called dot boxes and owning which is a dns domain and so you can own you can make like anthony dot box which is a dns domain which is a dns domain not just an ENS names, you would go like www. Anthony.com.

Starting point is 00:50:02 Dot box. But owning that domain is as an NFT on Ethereum and it routes and it plugs into the ENS ecosystem. Did I explain this right? Yeah, I mean, it's kind of hard to explain this like I'm five because if people aren't familiar with the way DNS works, it can be quite hard to explain that. So I'm not going to get into how DNS works. I mean, I probably don't remember all the details there either. But yeah, the cool thing about this is that there is currently like, you know,

Starting point is 00:50:28 sassal.eath, right, where I could host a website on sassal. It's not just my Ethereum address, but I could host a website on there, and it resolves. I could host it on IPFS, but it's not part of DNS. It's not DNS routable from what I know, unless you're using a service that does this, like dot limo, I believe is one of the services out there. Whereas dot box, from what I can tell here, it would be routable on DNS. You could just visit it on any browser, and it would be fine. and it would also obviously be enabled as integrated with ENS and an NFT on Ethereum 2.

Starting point is 00:51:02 So there were some concerns around this in the comments. I don't know, just to bring up the concerns that it's not as censorship resistant and it doesn't really, it can be like seized by the FBI, like they can seize domains. It's a valid concern, but at the same time, I don't think everything needs to be totally censorship resistant and decentralized. They can be these solutions that kind of people can use and they can use other ones if they want as well. So I guess just another solution that plugs into the ANS ecosystem. And then the other cool exciting announcement that came out, Rocket Pool coming to ZK Sync Era.

Starting point is 00:51:33 So you'll be able to liquid stake your eth on ZK Sync Era by just holding REth in your wallet. Just like OnMayana and other Layer 2s, REath will continue to accrue staking rewards automatically. Can you, I didn't have time to fully unpack what this announcement is. But how does, it's not just REth on ZKSync era, correct? it is actually a more formal integration? I mean, it is, and I guess, like, it's done so that people can obviously buy Arreith without having to buy it on main net, right? So you would buy it on a layer two, and it would be a lot cheaper to buy it on there.

Starting point is 00:52:09 And that R-Ath is actually part of the canonical Rockapool chain, so it actually still, a Rockaple network, I should say, and it actually still accrues the same values as you would on layer one. So, yeah, it really is effectively just buying kind of R-Eath on, there. You're not able, as far as I can tell, I don't think so you're able to do this. You can't stake your ETH and spin up a mini pool on ZK Sync Era and anything like that. It's really just to be able to acquire REath and then be able to accrue the rewards the same way you would on L1 Ethereum. And I think these partnerships and integrations are announced like this because of the liquidity. Obviously, you can't just say, oh, go buy R8 on this layer two if there's no one providing liquidity

Starting point is 00:52:49 for it. So I think that's what they try to do. They bootstrap it with the L2 themselves, with rockapult community and then it allows people to buy arreith on on these l2s and then something that i saw that made me really very excited this is uh latent cusack from pool together the whole poolie movement uh the the blue uh birds that people have on their on their profile pictures this came from a lawsuit that was going against pool together forever ago frivolous lawsuit from uh some some lawyers i think in new york uh that case has been dismissed so the pooly saga is now fully closed so I know Layton has had to have been dealing with this for over a year now. I'm sure that is a huge weight off of his back.

Starting point is 00:53:30 It put together a huge community of puffers, poolers. I don't know what these. Poolers? I think they're poolers. But just like, congrats to Layton to having this case dismissed because it was a frivolous lawsuit, frivolous class action lawsuit by some lawyers that are known to be doing that. And so it's a big congrats to Layton here. Yeah, yeah, I saw this just before.

Starting point is 00:53:51 Yeah, I mean, the lawsuit itself. was garbage. It felt like it was literally just done to try and attack defy in some way. And the fact that this case was dismissed, yeah, a huge, huge win for Leighton and the entire defy ecosystem, really. I'm just really happy that this was the outcome. Coming up next, Bankless Nation, we got some questions from the nation as well, some hot takes from the week. We're going to talk about Cosmos. We're going to talk about this layer two definition conversation. I don't know if you were tapped into that one, Anthony, but that was funny. Anyways, all that and more. I see it. I see it. All of that and more. But for some

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Starting point is 00:56:22 and then we ask them. This first question comes from Simon, Bruce, 1974. I'm guessing you were born in 1974, Bruce, or Simon. After listening to the episode on Eigenlayer, I would like to understand where the actual yield comes from. If the yield for ETH staking is capped at roughly around 4%, how is it that by restaking you are able to earn 7% or more? If the underlying asset yield is capped,

Starting point is 00:56:44 and Eigenlayer doesn't have a token, where is that coming from? And that's the first question. Next question is, isn't this the kind of thing that blew up the global economy in 2000? and eight. Anthony, what's your answer? So my answer is, I mean, first all, good question, because you always want to ask where the yield's going to come from, right? But my answer is that with eigenlayer, there are a number of different ways the yield can actually be paid out by whatever project is using eigenlayer as the backbone of whatever they're building. So for example, let's say that someone

Starting point is 00:57:14 uses eigenlayer to spin up a new Oracle network. Well, maybe that Oracle network has a token, and maybe people are paying that Oracle network to use their oracles. So they could, one, pay out token, right? Token, I guess like tokens as liquidity mining to get that yield number right. And two, those fees could also be going to the people that are restaking, which would be as the yield. So one of them would be, I guess, like a inflated kind of imaginary yield if you, you know, if you take that view when it comes to token incentives, and the other one would be a real yield from real users paying to use the network. And to use another. example, not just an Oracle network, but like a data availability network where people are paying to

Starting point is 00:57:54 use this network paying to post their data there. And then those fees would go to the E3 stakers that are, I guess, using EGon layer. And then on top of that, I mean, you say I can't have a token. I mean, my kind of number one talking point within crypto is that like if it doesn't have a token right now, it's probably going to have a token in the future. Yeah, yeah. So they could also be doing token incentives, I can layer themselves, for this sort of stuff. good question asking where the yield's coming from. But yeah, I mean, if it's coming from like new tokens that are being printed just infinitely and some kind of like weird terror-like thing, then yeah, I mean, it would obviously be something

Starting point is 00:58:33 that should be called out and people should be saying, you know, this looks like a Ponzi. But at the same time, there is a real yield there. If users are paying to use it, right? They're paying fees to use it. Then that would go to the restakers, which would reflect as a percentage yield. I haven't watched the episode yet, so I don't know. you know, the full context, yeah, but that's basically where the yield would come from. And then the other thing I'll just say is just like, eigenlayer is meant to spawn many, many,

Starting point is 00:58:59 many, many networks. But the economics of all of these networks are more or less the tried and true science that we know about crypto economics, as in you need security. You pay for security with fees and token emissions until your network is sufficiently bootstrapped. The only difference is that, you know, with new networks, it's like, hey, new native token that is the staking token. And then with eigenlayers, like, hey, Ether is a staking token. The NICToran token does something else, but Ether is a staking token. And so you ether get some of the yield of the network. And so that is simply the pattern where the yield comes from.

Starting point is 00:59:31 The next question, which is, isn't this the kind of thing that blew up the global economy in 2008? I mean, there's a lot left to be learned about eigenlayer. I think the simple answer is no, because, like, credit default swaps and black market, who owns what, is not really, I would say, relevant to the eigen layer system. system. There are risks to eigenlayer and like restaking. It definitely sounds like re-hypothification, but I would actually say that there's a pretty big difference between what these things are. Not to say that there are no risks and those risks might be significant, but they are at least different from the risks that we saw in 2008. Next question coming in from

Starting point is 01:00:09 Euda mania. How do I ensure my Normie wife has access to my ETH if I die? My biggest hesitance in furthering my investment is to make sure that she has access to it. Anthony, do you have any advice for Utamania here? So there are services popping up that are, I guess, like trying to make a solution here and how this actually gets handled and how estates get handled. But the problem with something like this is that there is a lot of real world legal kind of work and stuff around this that exists already for handling estates of deceased

Starting point is 01:00:43 people, that these solutions that are coming online for crypto, assets need to work within those frameworks. And obviously within different parts of the world, there's different frameworks, different legal processes. So yes, there are solutions coming online for this. If you do self-custody, your ETH, and then for some reason you pass away, and then you want to pass that on in a way where your kind of like normie wife in this context can actually access it, you can use those kinds of services. But if you want to maintain like full self-sovereignty, full self-custodial over your own funds, then I guess the simplest way would be to just write her a guide and then make sure that she can actually follow it and know how to access it

Starting point is 01:01:21 on her own so basically test her say hey i want you to do this all on your own and if she can access it and she knows what to do then then that's it really i mean there's not much else you can do other than that it's like teaching them how to access it and in which way while keeping your own funds still secure but yeah it is definitely a big problem i think right now for for people it's not saying enough people talk about but there are definitely solutions being worked on i don't know the names of top of my head right now. I'm sure you could Google for them. But yeah, I think the best way right now would probably just be to make sure that you write them a guide and they can follow the guide and get access to it, you know, like a trial run. It's not that hard really. I mean, depending on how you

Starting point is 01:01:59 secure your funds, of course, but I guess if you're doing things like staking it all or putting it somewhere else, how is your wife going to know how to like unwind a un-swap liquidity position, right, or things like that. So that's where things get complex. And I think that's where these third-party services may be of much more help than just trying to write a guide for her. But yeah, unfortunately, I don't have many better solutions than that right now. It's tough to give advice for it because every case is unique and of itself, right? I think another kind of catch-all advice is like if you have a trusted crypto friend who you know knows how to operate a wallet and do all these things, maybe the thing you tell your wife or your normie relative that needs to recover your funds is that,

Starting point is 01:02:42 hey, go talk to this person. And if it's a trusted friend, then they can help help them out. And if you're worried about that, that person just steals the funds, well, then you get to go to like nation state legal systems because you have one person who is responsible and clearly did the theft. And so that you just can fall back there. Okay, last question from Let's Go Ride Bikes. Will Ryan ever read the ads?

Starting point is 01:03:07 That answer is no, because I am the one with the teleprompter. All right, moving on for takes of the week. This is coming from Zaki Manning and out of the Cosmos ecosystem. Interesting take here. I think Cosmos, he says, social capital has about 12 months to do something unique and differentiated. Otherwise, we will get swallowed by E. Flavored variants of Cosmos, originated ideas like roll apps and eigenlayer. I feel intense urgency. The hour is late.

Starting point is 01:03:34 Interesting tweet out of Zach. Did you see this tweet, Anthony? What was your take? I think I did say it. I think my initial reaction to this was that Zaki is like at least 12 months late on this take. I'm sorry, but I have been going on about this personally and about Cosmos just not being able to find product market fit for a long time now. Probably as early as 2020, I believe. I just never got the value prop. And yeah, I think he's right.

Starting point is 01:04:02 I think that the ideas that they've been pushing on, such as kind of like the app chain stuff and like roll apps, things like that. The Ethereum ecosystem is just much better position to take those ideas and run with them because it has all the economic kind of like weight there. It has all the money. It has all the social capital. It has all the attention. Whereas Cosmos, no one really knows kind of like what Cosmos is trying to do and what the central hub is because they have this like hub and spoke model. But then Cosmos was kind of like not the hub for a little bit. There was another thing that was like acting as the hub.

Starting point is 01:04:35 And then people were fighting. There's a lot of infighting in the community. So they don't really seem to have like a shelling point. that people can actually like go to and be in the cosmos ecosystem. Not to say there aren't people good people working on it and there aren't stuff, there aren't interesting things happening there. But yeah, I do think that their time is pretty much out.

Starting point is 01:04:52 The L2s are already big. The eigen layer has so much hype behind it that I'm very confident it's going to accrue a lot of attention, a lot of economic capital behind it very quickly. So yeah, I feel like he's potentially late on this by at least 12 months. Yeah. I mean, he's basically making a big call to action.

Starting point is 01:05:11 He's like, yo, cosmic ecosystem. It's time to get our shit together. Otherwise, we will get routed around. This next take coming in from Dankrad Feist. He goes, blockchain researcher discovers that value is social. Mind exploding emoji, comma, blames roll-ups. And this is coming out of John Charbonneau's article that he drops who was like, hey, y'all don't know what a roll-up is.

Starting point is 01:05:34 Here's what it actually is. And Dancrat says, it continues and says, a few people saying this analogy made them more sympathetic to John's argument. I wonder what their model of value was before. You think that maths or cryptography somehow store value, you're wrong. They only help a community coordinate. Oh, I thought that was a great take. Like, cryptography, you can't store value in cryptography.

Starting point is 01:05:58 Value is inherently perceived. And so this whole like blockchain roll-up debate is like, basically the TLDR is like, from a roll-ups perspective, it's, it's a layer one. Or like, optimism, from the optimism perspective, is a layer one. It just happens to use Ethereum for data. And then, like, and then it turned into just like this ontology debate about, like, what's a roll-up and what is provenance and all of this stuff. Anthony, what's your take on Dinkrest take?

Starting point is 01:06:24 Yeah, so this was a take that was basically, I mean, the whole debate stemmed from this, this blog post that John put out around, you know, social consensus, basically. and telling people that you don't know how roll-ups work, you know, you've been lied to, blah, blah, blah. It was very bombastic. It was very, I guess, click-baity. But the essence of his post was that, yeah, it's all social consensus. Now, for people who have been around for a while in this ecosystem understand that it's all social consensus, no matter what it is. Doesn't matter if it's a roll-up or an L-1 or an asset.

Starting point is 01:06:57 It doesn't even matter if it's the ERC 20 token standard, right? Someone used this. I believe Dankrad used this analogy. but ultimately it is all social consensus at the end of the day. We value things, we use the standards. Like, there's no reason why a token has to be an ERC 20. It can be another standard. Like, you can literally fork ERC 20, copy the whole thing, call it ERC 50 or whatever you

Starting point is 01:07:18 want to call it, and it'll be the same thing. But the thing is, it relies on people actually giving it value. It relies on the social consensus. Same with, like, if there's a fork of an L1, for example, the reason why Bitcoin isn't the real Bitcoin, and Bitcoin is because that social consensus. consensus. No one believes Bitcoin cash is the real Bitcoin except a small minority of people, whereas the majority believes Bitcoin is the real Bitcoin. So it's the same is true for L2s. If someone wanted to fork optimism and say, okay, well, this is the real optimism now,

Starting point is 01:07:47 and this is the thing. Well, I mean, no, because the bridge, the optimism bridge is what holds all the value, right? And you can't fork that bridge. You can't fork the value of that bridge. You would have to convince people to use your kind of bridge and for you to be the real optimist. So at the end of the day, it is all social consensus, but I think people took issue with John putting this out because they're like, dude, like we know this. Like, this isn't a revelation. But at the same time, I can see from John's perspective how he's like, I don't think enough people know this because it is kind of like, like if there's 10 levels of crypto, understanding that everything in a social consensus is like level 10. And I don't think most people are at level 10, right? That's when you're like

Starting point is 01:08:26 seeing the matrix. Yeah, exactly. So I think John's whole point of this post was to just outline it for people who may not think like this, which I can, I can resonate with because I'd like, would like more people to understand this. But at the same time, yeah, I think it annoyed a lot of the level 10 people, that's for sure. The only participation I had in this whole, like, Twitter debate was noticing that all these people were debating about the ontology of Roloft and like, man, that is some deep bear market shit if ever I saw it. Yeah, this is what we do in bear markets, right? We just debate, like, the meanings of words.

Starting point is 01:09:01 Arisims take Apple's and this is coming off of the hype of the new Apple Vision Pro launch. Apple's optic ID authentication in the Vision Pro is WorldCoin Orb built into a mainstream device. So Fred is just saying like, hey, that WorldCoin orb that everyone thinks is super dystopian, well now Apple's doing it and everyone's cool with it because it's a mainstream advice. What's your overall take on the whole WorldCoin vibe and whether or not is like dystopian? I mean, it's all about the marketing at the end of the day. The orb is dystopian. The goggles, they're not dystopian, right? The goggles, people are used to goggles.

Starting point is 01:09:35 They're used to glasses. You know, it's Apple as well. So Apple gets to swing their weight around there. But the orb, I mean, come on. Like, how many times have we seen, like, sci-fi movies and stuff like that? With this, the orbs are always bad. Whatever the orb is, it's evil.

Starting point is 01:09:52 Exactly. Orbs are always evil. Goggles and glasses, they're, you know, goofy at worst, right? So I think that's the difference here. It's all in the marketing. and I think WorldCoin really kind of screwed up their marketing because I think they thought the orb would be something that was good marketing for them, which maybe it was, but maybe it was like that there was too much negativity as well. Not to say that WorldCoin isn't, you know, doing well in their own right. I think they're doing a lot of great things.

Starting point is 01:10:17 I don't have a strong opinion on the orb or whatever. But yeah, I think naturally people just say the orb is dystopian, goggles are just goofy. That's a great take. All right, Anthony, as we come down to the end of it, the last few questions for you. is what's your bullish on? What gets you excited these days? Geez. If you tell me, ETHs, dude.

Starting point is 01:10:37 I'm not going to tell you, ETH, because that's like table stakes at this point. I think what I'm still most bullish on is the fact that we are executing on the Ethereum Roe Map at layer one faster than we ever have been. If you had told me that we were going to get 40, AAP 4844 so soon after the, you know, withdrawal was going live and the merge, I probably wouldn't have believed you. would have been like, nah, that's way too soon. Because it's slated for the end of this year, right, as part of the Dengoon upgrade. And the fact that that is not a minor upgrade, it is a major upgrade, and that will actually

Starting point is 01:11:11 be felt by end users. Because typically on layer one, we like to do upgrades that don't really get felt by end users, because, I mean, the whole point of the theorem, layer one roadmap is really just to enhance layer two, which is where the end users sit and also make the layer one just more secure. But that's not something end users see. But this is a very big major end user-facing upgrade. and the fact that it's coming so quickly is extremely bullish.

Starting point is 01:11:33 And it's coming so quickly because there are so many awesome people working on it, not just from the traditional core devs and researchers, but also from other organizations like optimism, like Coinbase has been contributing to it, like Arbitrum and all these other teams, they're contributing to it in a really positive way, and they're working in harmony together. And it just, yeah, it gets me really bullish,

Starting point is 01:11:52 just knowing that we can actually ship Ethereum L1 upgrades in a much faster cadence than we have in the past. Yeah, that's always been the thing that has, I've noticed over the last like four or five years is the acceleration of protocol development. Even like inside of bull markets, inside of bear markets, it doesn't matter. Like the ETH developers and developing ecosystem, whether they're core developers or just client teams or EIP proposers or layer two teams, everything just seems to be accelerating perpetually. And like just like you said with base, now we have a big, big company. entering the fray. And so yeah, there's, there's, yeah. And especially when like protocol development actually turns into optionality for apps and bridges and change, like everything

Starting point is 01:12:39 that's going to cohere very, very well next bull market. You're going to ask me what I'm bullish on, Anthony? Oh, is that what I have to do? Yeah, that's what you're doing is now. Okay. Okay. What are you bullish on, David? Oh, thanks for asking me, Anthony. I'm just bullish on like this being the bottom of the United States. Um, Gary Gensler, I think, is at his peak. He has a court date with Coinbase. Coinbase is not delisting any of the tokens that Gary Gensler said are securities. They're not ending their CBEath program.

Starting point is 01:13:11 They're looking forward to their day in court. And I think everyone in crypto is like, yeah, that's going to be good for us. So I'm calling the bottom of the United States. There's been a big migration eastwards to Asia. There's a lot of focus on Asia right now because all of these founders and developers are scared shit list to issue a token inside of the United States. I'm calling a bottom on that. So I am no patriot. I do not care to wear an American flag, but I'm saying don't paperhand the United States right now because I think it is up only from here. And that is what I'm bullish on. Yeah. Yeah,

Starting point is 01:13:45 I mean, it kind of feels like that because it's, it's so bad that I mean, maybe the only way up is up from here. So yeah, maybe it really, it's like $80 Eath, right? It literally cannot be worse. Yeah, right. All right, coming in to close out this episode, and Anthony, thank you so much. Oh yeah, before we do the meme of the week, Anthony, you just gave us an hour and 12 minutes of content, so we appreciate your time. But if listeners want two and a half, three hours of content every single week from you, where can they go?

Starting point is 01:14:15 Just the daily way. and you can find the links to that at my Twitter profile, Sassel S-A-S-S-S-A-L-Z-0-X. Yeah, all the links are there for that. And yeah, as you mentioned, I do about, yeah, three hours of content, you know, half an hour video every weekday of Ethereum updates. I've been doing that for quite a while. Actually, just today recorded the 600th episode of the refuel. So that's a lot of content, right?

Starting point is 01:14:39 Yeah, yeah. So it's fun. You know, as I said, it's about Ethereum, all about Ethereum. I give a lot of my takes, a lot of my hot takes on. it and there's a really great community. People should join as well. Our Daily Gray Discord community, very active in there, lots of people in there. They answer all your questions. But yeah. Yeah, bankless listeners, a long-time bankless listeners will know. But if there was a concentric circles of crypto media, I would put the core devs and all of the blog posts and

Starting point is 01:15:07 announcements and progress that they make. And then I would wrap the Daily Grey around that. And then I would wrap the bankless around that. A lot of what Anthony puts out on the Daily way ultimately just ends up in the bankless weekly roll-up content, which is why it's so easy to bring him into the weekly roll-up whenever Anthony's down for me, excuse me, whenever Ryan is down for maintenance. So Anthony, we always appreciate it. You ready for the meme of the week, Anthony? Yeah, let's do it. This one came from a pseudo-theos. I'm sure you saw this one, but this is once again about the roll-up debate. The roll-up debate in one image, which is the the astronaut shooting the other astronaut. Wait, it's all social consensus. And then the other astronaut says

Starting point is 01:15:43 it always has been. It's always social consensus all the way down and always has been. Any comments on this last meme? I mean, it always will be until our AI overlords take over, right? But then it's the social consensus of the AI overlords. So yeah, it's always social consensus. Someone's social consensus. Bankless Nation, thank you for sticking with us through the crypto news of the week. It was a big one this week.

Starting point is 01:16:06 And of course, Anthony, thank you once again for helping me go through the news. Risk and disclaimers, Bankless Nation. Crypto is risky. Bitcoin Ether is risky. Crypto, they might be crypto securities. You don't know, but you could lose what you put in. We are headed west. This is the frontier. It's not for everyone, but we are glad you are with us on the bankless journey. Thanks a lot.

Bankless - ROLLUP: Gary And The SEC Will Not Defeat Crypto

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