Bankless - ROLLUP: Kamala Crypto Pivot? | USDC iPhone Tap-to-Pay | WBTC Drama? | Superchain Soon?

Starting point is 00:00:00 David, I think there's two questions that people are really asking right now is, number one, can crypto get Kamala Harris to pivot? Can crypto advocacy be bipartisan? And number two, if she hasn't pivoted yet, is it too late? I mean, we are less than 90 days from the next election. Bankless Nations, the third week of August. It is time for the bankless weekly roll up. David, what do we have? The Kamala pivot to crypto or lack thereof could it happen?

Starting point is 00:00:29 Or is it too late? It might be a little bit more important these days. is Kamala has hit 10% likelihood of winning above Donald Trump, 55% to 45%. So the Kamal pivot becoming more important than ever. Are we getting any closer to it? We're going to talk about that. Also, sometime soon, could you be using tap to pay using stable coins, maybe USDC on your iPhone? Jeremy Aller says yes, we'll talk about that.

Starting point is 00:00:54 There's some drama going on too in the tokenized Bitcoin space. So BitGo has this wrapped Bitcoin product. It's called wrapped Bitcoin, wrapped BTC. and it's going through some growing phases, some transformation here. Actually, David, you've got to update me on this, but maybe it has opened the door for Coinbase. They are looking at rolling out a tokenized Bitcoin product. We'll talk about that.

Starting point is 00:01:14 Optimism is Super Chain is about to be real and not just a meme. Eric Trump's digital real estate project and crypto's growing list of political prisoners, the splattering of topics that we're going to get through all of this and more. But first, I want to talk about where I am, because I am back in Argentina. Yes, you are. There is a pop-up city here in Buenos Aires called Aleph, part of the Kresemmiento movement, which is Kresummiento is the Spanish word for growth, focusing on sponsoring, supporting, growing the crypto movement here in Buenos Aires. And so it's like this meeting point of crypto startups, Argentine crypto startups with Argentine crypto founders, regulators, government officials, many part of Miele's administration, perhaps Miele himself. and then a bunch of just like, you know, capitalists, venture capitalists,

Starting point is 00:02:02 trying to support the crypto movement. Who's putting that on? Like, who's organizing it? It's a large part of just like a grassroots bottom-up effort by the local Argentine community and then a lot of support from the Protocol Labs team, the FileCorn people. So, like, Juan Bene is leading this, just a few other, like, shakers and movers who are just like relentless at making things happen. And it was just like, so there's this co-working spot with a bunch of Argentine startup

Starting point is 00:02:29 where, like, if you were an Argentine startup, you would apply to join Aleph and become part of the community, get, like, some of the support, the network. It's kind of like an accelerator as well. This is you. This is you at the co-working place. Yeah, I'm just there, like, being an imposter, like, I'm not in a startup and just hanging out at the, uh, at the, the coworking spot. And just, like, talking to the Argentine founders and the problems that they're working on and the things that they are focusing on is such a breath of fresh air from what I'm, like, kind of previously surrounded by, which is like, you know, North America, United States, European crypto Twitter,

Starting point is 00:03:01 talking about like, you know, the 17th, like, re-stakes rolled up, alt VM that is, like, getting deployed or like the bigillionth meme coin. These, like, Argentine crypto founders, like, it's not, like, speculative fun and games for them. They have, like, Argentina has a very urgent and pressing need to, like, build real products in crypto. And you know what I've learned?

Starting point is 00:03:24 And while I like spending here, there's like three Argentine, there's probably more. There's three Argentine crypto projects that I'm going to talk to on a podcast. I'm going to bring them all on a podcast that each have millions of users, like millions of local Argentine users. That's awesome. And like we don't talk about them. So on my crypto Twitter. You're saying crypto users. They're actually using crypto to like do things.

Starting point is 00:03:45 Like do real world quote unquote things. They are like normal, well adjusted adults. go to a nine to five job and they are also users of like Lemon Pay, Bello, Bienbit, like some sort of like crypto startup in Argentina. I wouldn't even call it a startup now.

Starting point is 00:04:05 It's like a legitimate business. And they're just using crypto to like facilitate their daily lives. I for one, speaking as on behalf of a bankless listeners, I'm a bankless listener. I would love an episode on that. I would also love an episode if you can get them with Malay. Javier Malay. Yeah, do you think

Starting point is 00:04:21 that could happen on bankless? Okay, I think there is like somewhere around a 10 to 15% chance that I can get Javier Malay here on the episode on the show. Should we fire up a polymarket then? Make our own odds here? I would actually just rather people spend their effort like trying to help me on this because I'm like kind of close. And it's because like Javier's Malay's administration has a lot of crypto presence. So there is just literally some like logistics things. He's not in Argentina at this moment.

Starting point is 00:04:54 He is in, like, I think Korea for some reason. But he'll be back. And when he comes to Argentina, like, we like, there's people who are in his administration who are also here at Aleph who are like knocking on Malay's doors. Like, hey, by the way, like, there's like crypto things happening and you should pay attention. So we're like not far away from like there's also just a big regulatory day on the 22nd or 23rd of August that I'm pretty stoked for. That's like kind of the big day where like can we get Javier Malay here?

Starting point is 00:05:22 in like this crypto like startup incubator thing. My impression, this is a super vanilla. I know nothing impression, but that is he is expressed openness to crypto sentiment and even positive crypto sentiment, but has not yet had the time or like for whatever reason, it hasn't been the top priority list to here's what I'm doing in crypto and here's the policy. Is that about right?

Starting point is 00:05:42 That's right. His pro crypto policies are more about like removing restrictive regulation than instigating like positive crypto regulation. And that's one of the big goals here of, Aleph is to get like startups of the assurances like long 20 year long assurances that their crypto business is going to be like sound and stable and not like rugged away from like future administrations yeah he's a big libertarian so like crypto ideals are like part of him but you're right he just hasn't had like the time or energy to be able to like really narrow down on crypto

Starting point is 00:06:13 step one democrats take note the first step is to fire all your Gary Gensler's okay that comes first so he did do that he did do that's good Dude, before we get in, we got a message from our friends over at Puffer. They got something cool going on. What is it? Yeah, they are introducing Puffer Unify, which is a base roll up that addresses Ethereum's fragmentation issues and benefits user experience with 100 second pre-confirmation. So that's 100-second perceived transaction times, along with synchronous, composability,

Starting point is 00:06:40 and unified liquidity with the Ethereum layer one. Unify comes from being unified with the Ethereum layer one. They want you as a builder to fill out a form that is in the show notes. Or if you're just a user, you can also go. go check it out. There is also a link in the show notes for you as well. Let's talk about the numbers for the week. Bitcoin, where are we at, up or down? We are flat. Bitcoin started the week, 59,400 ending the week, 59,600 up like 0.3% on the week. Eath up 6% on the week. East. It doesn't do that. It's a sucking eggs this week. Yeah, like start of the week at $2,590, currently at $2,670.

Starting point is 00:07:17 Nice job, Eith. You didn't blow it this week. Well done. We just need another, you know, I guess 10 weeks of that, and we'll be back to something that feels more normal. We got one. Well, shall we check in on our ETF inflows? This is Bitcoin right now. Just I guess by way of recap, this is all a Dune Analytics point that we're looking at. There is now 4.7% of all Bitcoin supply contained in these things called Bitcoin ETFs. And that is since January.

Starting point is 00:07:47 All of that has happened. So it's been a supply sink for 4.7% of Bitcoin supply. Right now, for Theorem, if you're keeping track, you're looking at the two horses in the ETF race. Theorem ETFs have 2.3% of ETH supply. Yeah, what do you make of that? We got some catch up there too. Definitely.

Starting point is 00:08:08 The ETH outflows is currently in, like, its deepest trough. We are starting to climb out of the hole that the gray scale ETHE has put us in. like the very expected hole but like still like kind of big nonetheless uh there are like a total net outflows of something like 350 360 million dollars of east out of the gray sale ets out of all of the ets uh there's been plenty of inflows into like black rock fidelity um bit wise uh but we're still in the hole uh but the gray scale eth e flows have stopped uh they've been like basically flat uh or just overwhelmed by inflows to other ets for the last like three days we've had three days of positive flows. I would like 30 more, please. Yeah, we could do another 10 weeks of

Starting point is 00:08:50 that too, just positive flows. It's all we want. I mean, we're chipping away at that number. You're right. It's 366 net outflows. So we're still in the negative territory on that income statement. But chipping away at it, week by week. I mean, a couple weeks ago, David, this was closer to 400 million. And now we're at 366. So that's progress, right? I guess that's progress. Anthony Sassano calling out there was actually one day last week that the Ether E, the gray scale, had no outflows. So we're like maybe that's starting to slow down. That's something. Global crypto market cap.

Starting point is 00:09:27 Where are we? Total crypto market cap 2.2 trillion right on the dot. Slight incline from last week as we are pulling out of a hole that the yen trade unwind put us in. Lots of holes that we're climbing out of. Yeah. Yeah. Digging our way into holes and then trying to climb back out of them, I guess. let's talk about a hole that Jerome Powell has found himself in. That's this inflation hole.

Starting point is 00:09:48 He's been working his way out. He's been trying to dig out. That's why all the rate hikes were happening over the last couple of years. So we're above 5%. We're at 5.25 to 5.5%. Some good news. If you are a central banker named Jerome Powell, annual inflation has gone to three-year lows. So that's good news. Wow. Three-year lows. Three-year lows. It rose just, we got the numbers in, it rose just 0.2% from June to July. So that means year-over-year prices are 2.9% and that's down from 3%. So.

Starting point is 00:10:24 The year-over-year prices starts with a 2. Yeah. The target is 2.9. We're in the 2s. Exactly. So all of this may mean Jerome Powell gets to go make a victory lap. And the way that affects markets is, Jerome Powell can say, hey, I did the thing I said I would do, which is break the back of

Starting point is 00:10:47 inflation through these rate hikes. And now we're done that. That phase is over. That movie has concluded. And now I'm going to go be a hero in this other area. And I'm going to go hit the unemployment numbers because those spiked up a little bit. Remember the numbers in August that caused some of maybe the early August sell-off were due to recession fears and unemployment fears.

Starting point is 00:11:07 And so in September, likely this all tease up him. putting in another rate cut, whether it's a 0.5% rate cut or is something lower, we don't know yet. But I think that the market is basically saying that's what it's expecting is Powell to cut rates in September. My question, I think everyone, the right questions to ask are, is the Fed going to try and like front run the timing on this like they did not do during COVID where they hiked rates way too late and they had to do it really fast because they were so late? now are they going to try and like be a little bit more have a little bit more foresight and lower the rates ahead of any like you know overshooting of having too high rates for too long um i i think it would like that's a big question and also i'm guessing that they're not just going to like they're not going to send these rates to zero like overnight like they are slowly incrementally going to lower these rates over a very long period of time uh i think i think i think they learned their lesson from the whiplash of like going up 5.5 percent in some of of a year, they're not going to go down 5.5% in a year. I bet you like we have like positive interest rates. We're not going to zero. Maybe we go to zero. But if we do, it's going to take years to get there. Yeah. And I think Kamala Harris, if you're Kamala Harris, you'd certainly

Starting point is 00:12:24 appreciate a Jerome Powell rate cut in September, maybe a big juicy one going into the November election season. Dave, there's another thing we've been looking at. There's another hole that we've been in. This is a more recent hole. This is, crypto's not going up as much as stocks, man. You love the S&P, the NASDAQ, hitting all-time highs. In crypto, we're just kind of lagging behind. What's the take here? Yeah, this is Kelly Greer from Galaxy who put out a tweet analysis that I thoroughly enjoyed. And she's just calling out the four recent horsemen of just dumpage into the Bitcoin markets

Starting point is 00:12:59 and therefore the rest of crypto. Germany, Mount Gawks, Genesis, and the United States government. Wow, all four Gs. Wow. Germany sold almost 50,000 bitcoins between June 19th and July 30th, so like almost a straight month of dumpage. The Genesis bankruptcy put $33,000 of Bitcoin into the market. Mount Gox distribute 110,000 bitcoins in July into the market. And then the U.S. government has ongoing transfers into Coinbase.

Starting point is 00:13:27 We can only assume that that's actually currently hitting the market. 4K was transferred on June 26th. 10K, Bitcoins were transferred on August 16th. And so, like, we're just, like, having some, like, idiosyncratic, large G-named Bitcoin dumpers that all happened all at once. And so, like, while stocks, stocks had the big pullback of the Mount Cox of the Japanese carry trade, that's already over, like, climbing out of that hole. Like, they're almost done because, you know, it's stock season. But, like, crypto has this, like, idiosyncratic cell pressure that, like, hopefully people just, like, also bet on their being a reversion to the mean. and we actually are due for a pump.

Starting point is 00:14:08 Yeah. That's an analysis. That's a good quality analysis. I wouldn't dismiss this as cope because like many, most of these things are all just like one-time events, aren't they? And so you're right. They are idiosyncratic. Like they should, we won't get Germany selling more Bitcoin like later because they're all out. They sold it all.

Starting point is 00:14:24 It's all gone. David, there's another story in crypto, I think, which is meme coins. They've been a darling of the cycle. In fact, some have pointed to like they are the breakout crypto use. which kind of makes me sad. Yikes. Yikes. But what's the tip here?

Starting point is 00:14:41 Let's not call it a use case. Let's call it the most breakout crypto like casino. Casino, new casino game on the floor. Casino use case. So give me some meme coin metrics. How do these puppies perform? Yeah, so this is Adam who put out some numbers here. And just in the 24 hours that he put out this tweet, Adam Tech on Twitter, 16,357 tokens were

Starting point is 00:15:05 launched. in 24 hours. It's insane. That's crazy. 175 of these graduated, made it to radium, which is a different Salonadex. When a meme coin on Solana gets sufficient liquidity when they hit a market cap, this is all built into Pump. When it hits a market cap of $69,000, then some of that liquidity gets put on to Radium, which is like a more generalized Solana decks.

Starting point is 00:15:31 They call it graduating. Of the 175 that make it to Radium, 19 of those remain above the 69,000 market cap threshold to, like, stay there. And so from the 16,357 tokens that were launched. A $70,000 market cap? I mean, that's, that, this is penny tokens here. This is really small. Oh, for sure.

Starting point is 00:15:54 Well, that tells you how many, like, meme coins are like on the absolute floor. Just, like, never go anywhere. Okay. That's, so if you were curious, of the 24 hours in which Adam was taking these, metrics, these numbers, of the 16,357 tokens that were launched, 0.12% of them remain above the $69,000 market cap that allows it to be on radium. He calls it the pump. dot fun slaughterhouse is because it's so easy on pumped dot fund to launch one of these things.

Starting point is 00:16:23 Like you just, what do you need? What are the basics? You have an idea and you just like kind of have a crypto wallet. It's basically all you need. It's that simple. So no wonder people are doing it. And so below, if that's another pretty similar analysis from Rudy, who talks about like these five stages of a meme coin. One is getting launched on Pumpton up Fund.

Starting point is 00:16:44 One is the bonds. The liquidity goes over to radium. Another is makes it onto coin gecko and therefore is like relevant. The next one is maintains a $1 million market cap for multiple weeks. And then the next one is maintains a $10 million market cap for multiple weeks. $10 million is still very low. But if you are like the launcher or like the first through 10th buyer of a meme coin making it to $10 million means you you might have like up to a million dollars. So to get to even just get on to coin gecko of the 100 and of the 1.7 million tokens that are on the metrics that that Rudy put together only 0.008% which is 141 of them make it onto coin gecko.

Starting point is 00:17:27 Only 15 of them maintain a $10 million market cap. I think if you're in the meme coin trenches, you actually sell far before you get to like the $1 million market cap. You know the euthanasia roller coaster. Oh yeah. Like it used to be like, okay, like I only buy meme coins sub $100 million. And then it moved to like, okay, I only buy meme coins sub $10 million. I only buy meme coins sub $1 million.

Starting point is 00:17:50 And now when we have how many 16,000 meme coins being minted in 24 hours, People are like, okay, I just bought a meme coin that made it to like the $20,000 market cap level. I'm going back and finding another one. And so like meme coins can't like penetrate like this like very low market cap threshold because there's just so many, goddamn many of them. Yeah, yeah. It's a lot of ticket odds here. So do you have an explanation for all of this? So I put out a tweet asking that same question.

Starting point is 00:18:19 Like why is this the meta? If these odds are so terrible, how did this be, how did meme coins be? the meta. And the responses were overwhelmingly about like influencers who have large accounts, who set the meta and the narrative pump the coins. And they're actually the ones that just like have the just like structural advantage here. They are the ones making all the ones. Right. Yeah. And then Eric Connor says like everyone else who is stuck thinking that they are next are in fact the ones that are just next in the meat grinder. There's like this was the most common answer to this. I actually thought Kobe's answer to this was also pretty interesting, which is like, okay, he understands metas.

Starting point is 00:18:59 He's wrote this great blog post about metas. The answer as to why this is the meta is because any other meta has like zero percent odds of like gaining traction. Because we have, his answer is like there is no other meta. Like we're not doing defy yield farming. We're not doing NFT mids. We're not doing whatever. There are no other metas. So this is the meta that we're stuck with.

Starting point is 00:19:17 So as bad as these odds are, it's still better. than all of the other narrative investment odds that are out there. Yeah. That's what he's saying. That's what you're saying. Okay, so it's the best of the worst. I guess if you're a narrative metatrator, it's the best of the worst. I mean, like, the D-Gens of crypto are always playing some game.

Starting point is 00:19:38 And I think Kobe is saying this is the only game in town. I would like to play some new games in crypto. But, you know, meme coins aren't going anywhere. I just want other things. So. A different game. Yeah, yeah, yeah. We got more to talk about the politics game. That's another type of game. So we've got Kamala. She's now taking the lead. And the question is,

Starting point is 00:20:00 is she going to pivot to crypto? Do we have a shred of evidence that she might be considering it? Is there a chance? Is there a chance? And also, there's this group called Crypto for Harris that are trying to advocate for that. How's that going? We'll check in on that. All this and more. But before we get there, We want to thank the sponsors that made this episode possible, including our recommended exchange for 2024. That's Cracken. Go create an account. If you want a crypto trading experience backed by world-class security and award-winning support teams, then head over to Cracken, one of the longest standing and most secure crypto platforms in the world.

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Starting point is 00:23:15 is number one, can crypto get Kamala Harris to pivot? Can this, can crypto advocacy be bipartisan? And number two, if she hasn't pivoted yet, is it too late? I mean, we are less than 90 days from the next election. So I think we'll try, attempt to answer those questions, or at least present some evidence to let listeners decide on what's going on themselves. But before we get there, I think we need to check in on how the election is going. So what are we looking at here?

Starting point is 00:23:42 Yeah, the odds of Kamala, according to Polymark, So the odds of Kamala beating Donald Trump are up to 10%. This screenshot shows 9% and this screenshots is 24 hours old. We're actually at 10% where Kamala's at 55% and Donald Trump's at 45%. This is a very firm lead, I would say. I know these are odds. And so this technically isn't like meaningfully different from a coin flip. But I've always been used to just like, if somebody is predicted to win the election by 55%,

Starting point is 00:24:11 like I kind of consider that a very far lead. Yeah, I mean, we talked to, we had Nate Silver on the podcast, who was kind of the guru around elections. And he has indicated that Kamala does have a lead, but he still sort of with his margin of air considers it somewhat of a coin flip. I mean, that's his take. But I think the noticeable thing is these numbers have reversed on polymarket prediction markets. David, it was not like a month ago. It's just like shortly after the assassination attempt. And Trump was at 65.

Starting point is 00:24:40 Now it was Biden. I think he hit 73. He hit 73 right after the assassination. It's like I absolutely incredible and that was probably a temporary spike. I mean really hard to sustain those types of odds. But I think the big story here is how much this has changed. So it seems like the momentum has really shifted here. And it's it's it's the trend as well. Like Kamala has been in a straight line up ever since she took the candidacy and Donald Trump has been in a straight line down ever since his like assassination attempt. So like while we're at 10% like it's a 10% and trending even greater to Kamala. I've been listening to some. political podcasts, just because that's the season that we're in. One, Pirate Wires, the much more right-leaning pro-Donald Trump podcast. Was that with Mike Salana? Mike Salana, yeah.

Starting point is 00:25:25 Okay. Does he host that? And then also, he hosts that. Yeah, he's on that. And then the other one I listened to is Pod Save America, which is like very lib. So it's like a tale of two podcasts. Like, you're getting both perspectives. And like, the Mike Solana one, I hate it when people use this word applied to me.

Starting point is 00:25:40 So I apologize to Mike for using it on him. But just like the words that were. were in my head was just like this is cope. Like it's just like he was running through like all the reasons as to like why this like how this is so crazy that Kamala is the Democratic candidate. And to me I was like yeah, like this is like high Kalama percentage cope going on. And then I go over to like the Pod Save America one, which is like very pro Kamala anti-Trump. And they are just taking victory laps.

Starting point is 00:26:07 Yeah. And so like sentiment, this is a sentiment like across the political spectrum right now. Yeah. And you and I are Eath holders. We know what cope feels like and what it sounds like. I know what cope feels like. That's like coke to me. It's funny.

Starting point is 00:26:21 On the other hand, it was a few weeks ago, and it seemed like the Democrats on kind of like the Democrat side, there was immense amount of cope. It could not handle that Trump was taking the lead. And so, look, momentum shifts can happen. I'm sure this could happen back and forth a few more times. But it leads to a question that is still unanswered. There's this opportunity that people have,

Starting point is 00:26:43 have seen. Obviously, Biden, Biden White House, he let the anti-Crypto army kind of like run roughshod over his administration, administrative policy. But Kamala's trying to get elected. Is this a chance for her to reset? Is this a chance for the Democrats, the White House, Kamala Harris, to pivot on crypto? That was the question. So we've got a few data points on that. The first was this. This is in the block. This happened last Thursday. So August 8th, Crypto executives meet White House officials to discuss policy grievances during virtual roundtable. So they got on Zoom. What was this meeting?

Starting point is 00:27:18 Who are the participants? Set the landscape for us. Kind of who's who amongst like this topic. From the White House side, U.S. Deputy Secretary of the Treasury Wally, DMO, a very important character. National Economic Council Director Lael Braynard, White House Deputy Chief of Staff Bruce Reed, Directory of Legislative Affairs for Vice President Coloma Harris,

Starting point is 00:27:40 Christine Lucius, and then others. And then from the crypto side, some names that y'all are definitely going to recognize, Hayden Adams from Uniswob, David Ripley from Cracken, Jeremy Alleyer from Circle, Chris Dixon from A16Z, Paul Greywall from Coinbase.

Starting point is 00:27:56 Wow, these are all people that we've had on the podcast. Brad Carlinghouse and Chris Larson from Ripple haven't had them. Mark Cuban, and then also Anthony Scaramucci. So like, a pretty good, lineup of like force movers both in Capitol Hill and in crypto. How did the meeting go? How did it go? This went well, right? How would I wouldn't why wouldn't this go well? How did you ask? Let's talk about the bad side. I'm assuming this went totally fine. Well, this is a this is a article title from

Starting point is 00:28:23 Fox News. So it says crypto executives clash with Democrat leaders in heated Zoom meeting. He did Zoom meeting crypto executives clash. Again, so this is Fox News saying this, but their quote is executives didn't hold back on telling the administration reps how much damage they've done to the crypto industry and to the Democratic Party with their actions against digital assets. Apparently at one point, a White House official said that, hey, the banks and regulators, they're not really coming after the crypto industry. Like, this is kind of fake news. It's not what's happening.

Starting point is 00:28:55 And in response, an executive, so one of those names probably that you mentioned, a crypto executive, asked for a show of hands. Who among the crypto crowd here has ever been? denied banking services because of White House policy and nearly all of the industry represented, all of the crypto people raised their hands. Okay? So, yikes. Yikes. That's a big, that's a big row. Can you imagine this? Yeah, so this is Nick Carter, of course, weighing in. For the record, if we had been on that call, our hands would have also been raised. Bank of America. We have also been debanked. Thanks, Bank of America. We're at a little credit union who just like, you know,

Starting point is 00:29:35 we've squeaked by their complaints. I love our Virginia credit union, dude, they're cute. You never been there. You don't know Alan, the bank teller. I've never been. I've never been to face-to-face with Alan. I've gone and he's like, bankless? What? Bankless? Stuff? Anyway, so that's the bad side of it, which feels kind of bad. The good side of it, I suppose. This is a quote from the block saying that this is actually notable. This is a source in the block. The big difference compared to a previous meeting was who was attended. You had people like Wally.

Starting point is 00:30:08 You had Lyle, who are the most senior level representatives overseeing crypto policy in the Biden administration in terms of non-regulators. So this is very much seen as moving the ball forward, given those who attended. I'll note, Kamala Harris did not attend. But you had senior- The important person was not there. Yes. Rokana hosted the meeting, who's a notable Democrat who is in support of crypto.

Starting point is 00:30:30 And he's been running quarterback to try to rally the troops. amongst the Democrats to support crypto policy. We're actually having him on the podcast. And he said, it was a spirited conversation, positive dialogue. There's much frustration in the industry. So at least he acknowledged that. And he says, I'm hopeful that as a consequence of these meetings, the administration will issue a positive statement in the coming weeks.

Starting point is 00:30:51 So he's trying within his own party to apply some pressure, maybe some mild pressure. I'm not sure. He's doing great work, I think. It's just like, is there any evidence? So what do the crypto people say? in the aftermath of this. Scaramucci, who's actually somehow adjacently close to crypto, says,

Starting point is 00:31:09 it's encouraging that these high-level officials took the time to show up and listen. My colleagues in the critical space understandably won action now, but that's not how things work in Washington. I think we're making steady progress. Paul Graywall, the chief legal officer for Coinbase, says, any conversation on moving beyond this administration's unproductive record on crypto is positive. It's not too late, but time is running short. the White House should publicly back the Senate's efforts to pass a bipartisan market structure bill as the House has done and sign it in to law.

Starting point is 00:31:39 And so mixed reactions from that. It's very concerning to me that like the leading like advisor to the Harris campaign. Adam M.O is like denying the fact that they have been like operating choke point 2.0 on crypto. Like the fact that they don't think that that's real is like very concerning. It's a big bummer that Kamala Harris wasn't there. Like, you know, just show up, please. I know she's a busy lady, but just like, come on. Just the first meeting, but David.

Starting point is 00:32:07 Yeah. Just the first meeting. The meetings like this in the political sphere, you need like six of them. And like the optimistic case is that each one becomes like bigger and more important. And this is the first one. That's the optimistic case. I would echo Paul, though, time is running out. So the good news is, I suppose, they did have a second.

Starting point is 00:32:25 So there is this Twitter account that sprung up. It's sort of an initiative. I'm not sure who's behind it called Crypto for Harris. And they hosted another meeting. And this time, the big guns came out. Senator Chuck Schumer was actually there. So how did that meeting go? Better?

Starting point is 00:32:40 Better? Chuck Schumer, while at the, on the meeting, says, we all believe in the future of crypto, Congress has a responsibility to provide common sense and sound regulation on crypto. And we need your support to make sure that any proposal is bipartisan. And then, and so that was like Chuck Schumer, like beating the drum. Like, great, glad to have you on the team. Thanks, Chuck for being there.

Starting point is 00:33:01 Jake Bruchman, who was there, this is a crypto VC, definitely one of us, gave probably the most comprehensive, like, analysis of the meeting that I thought. And gave it, like, kind of a thumbs down of a review. So, like, in one way, kind of glad it happened. Thank you, Chuck. But overall, here's what kind of Jake said about it. I thought a town hall was for hearing people's opinions. Instead, we got a few lectures of the participants' views of crypto and where it should go politically. I didn't see anyone resembling crypto company founders.

Starting point is 00:33:31 investors and founders are the bread and butter of any industry. In short, it satisfied the Harris prong, but not the crypto prong in the Crypto4 Harris name. As far as I see it, no one really mentioned the SEC policy, the Biden's veto or the lack of clarity. It seems like we'll just move forward and happily make this a bipartisan issue, even though Harris-backed policies made it partisan in the first place. So I'm going to say that to summarize Jake's take as like a pretty firm thumbs down on the effort. behind this particular meeting. Yeah.

Starting point is 00:34:04 And someone that wasn't there, as you mentioned, was Kamala Harris yet. It's like missing action, not there. Not even her VP was there. So I think it's safe to conclude at this point, we have not seen a pivot from Kamala Harris. Like there's no evidence of anything like that happening. If you want some amount of hopium, because I've been listening to these political podcasts, the Harris administration is not giving out any policy indications about anything at all. They are like her strategy right now for the Harris administration, the Harris campaign, is to just have Harris be generic Democrat.

Starting point is 00:34:38 Yeah. Because because the generic Democrat is actually working in her favor. And like they're not giving Donald Trump's like campaign any sort of like surface area to latch onto. So like she's kind of just like being very defensive and being generic Democrat. So like no policy is coming out of the Harris camp. And now maybe that's the reason as to like why she hasn't decided to make a move on crypto. maybe that's opium. That's probably hopium. But like, you know, I think that's a valid line of reasoning.

Starting point is 00:35:07 Yeah, I think at this point, like, silence is basically an admission that there's going to be no real change in the White House. At least that's how I'm interpreting it. But some people think it's not too late for the Democrats to win crypto votes, including that account we mentioned this group that's trying to advocate for Harris called Crypto4 Harris on Twitter that's organizing some of this. I think the thing that's the thing. we have to look at to see if there's any evidence of any change on crypto policy in a Kamala Harris White House as opposed to the anti-crypto policy that Biden had is who she surrounds herself with. So let's talk about that. Who is she surrounding herself with? Who is the administrative state

Starting point is 00:35:51 that's kind of like helping her? I think the first place to look is her campaign. So let's talk about her VP, her vice president. So her nominee for vice president is Tim Walls. Is he pro-crypto is the question? Part of the answer is we don't know for sure, but I think most people are saying it's unlikely that he would be a friend of crypto. He hasn't spoken about crypto yet, but during his term of governor,

Starting point is 00:36:13 he supported legislation to bolster regulation of cryptocurrency kiosks. That's one of the main, like a issue, a crypto issue in Minnesota, and he came down on the anti-crypto policy side of it. You wanted to limit daily transactions to 2K. In general, it doesn't seem like it's going to be a core part of his campaign to be like for crypto or anti-crypto necessarily.

Starting point is 00:36:37 It's just kind of like generic, but certainly doesn't look like pro-crypto. How about her campaign advisors? Okay, so there's two people in her campaign advisors that are relevant here. And one is good, very good. One is very bad. Starting with a bad one, Brian Nelson, Treasury Department under Secretary for Terrorism and Financial Intelligence during his previous tenure, this was the tenure where the Treasury sanctioned

Starting point is 00:37:03 tornado cash and other on-chain privacy tools also brought an enforcement action against Binance. He was part of the Treasury organization, whether this was him or not undetermined, but he was part of that organization. So that's the bad one. The good one, David Plouffe, a former advisor to Barack Obama

Starting point is 00:37:22 and former member of the Binance Global Advisory Board. Oh, Binance. That's our Binance. And so Binance has an article saying that in September of 2022, Plouffe joined Binance's Global Advisory Board, chaired by former U.S. Senator and Ambassador to Trina, Max Baucus. And so there is a very firm overlap between advisor to Binance and advisor to the Harris campaign, which like kind of, I think that's like the best indicator that we have. It's not like a large one, but like it's something. Yeah, there's a little like something, some light peeking through the clouds.

Starting point is 00:37:58 there maybe but now i'm going to quash that light out you ready for this david so the bigger question is like also that's her campaign but what would her administration look like what would the the harris administration look like um the one thing that i feel like i've learned in just like politics and crypto over the years that i didn't know before we got the crash course in terms of how to influence things and how things get done in dc is basically the the cabinet selections the administration selections who you pick to surround yourself with matters most of all. Because that's like the entire executive branch. When we talk about the administrative state,

Starting point is 00:38:32 that's kind of what we're talking about. Right. The president will delegate to their executive leaders, and so it's really a matter of who they delegate to. Who they are, right? And it's not just the president who plays a hand in kind of like filling this position. I mean, quite infamously,

Starting point is 00:38:49 Senator Warren, Elizabeth Warren, had a huge hand in picking many of the, crypto touching positions in Biden's cabinet. So the question is who's going to lead Treasury in a Harris tenure? Wally Etayamo is one name. She's got two options, but Wally is one of them. This would be kind of bad news for crypto if he takes the helm. Now, he was someone on that call that we mentioned earlier,

Starting point is 00:39:14 but he supported Warren in warning that terrorist groups will increase their use of crypto unless Congress approves new regulatory tools. Remember that? It turned out to be kind of like fake news. They're not looking at the way banks use, you know, the banking system to fund terrorist groups like isolating and targeting crypto. And, you know, Warren was leading that. And then also her economic advisors. This is another set of positions in her administration. So there's rumor from Alex Thorne, he put this out, that some of those would be pretty negative. And there's two names here among potential Kamala Harris economic advisors. One is Brian Dees. And the other is, Barrett Ramamurdy.

Starting point is 00:39:56 Okay. And these are two anti-crypto officials from the Biden administration that rumor is they will carry over into the Harris administration. So just to get a sense of one of them, we'll talk about Barrett Rammermerty. Nick Carter says if Barrett Ramamurdy is part of the Harris administration, it's over because this was one of the guys, there he is here, one of the architects of choke point 2.0, at least according to Nick Carter. He is choke point 2.0.

Starting point is 00:40:24 Yeah, he played a key rule. He was anti-crypto. Let's see, Fortune describes him. This is not a crypto publication. Fortune described him as the White House's top crypto critic. He played a role in the White House's effort to block stable coin legislation. Remember that's something we tried to make happen? You're blocking that. Let's hear from Caitlin Long on the subject. So just some context. Caitlin Long, longtime crypto bull. Long. Sorry. I need to say that. So some context on Caitlin Long, she's been in the crypto space forever. You might say a long country. Background on Caitlin Long. She's been in crypto forever. And she was trying to get an application for a state chartered, fully reserved bank with the Fed. Okay.

Starting point is 00:41:13 And this was denied by none other than Barat, Romer Murdi. She has some context on how he plays the politics game in Washington. Let's hear the clip on Laura Shin's podcast. We were told by a whistleblower who approached me that weekend. after the custodia denial, who had done it at the White House, a guy named Barat Ramamerti. I'd never met Barat Ramamerti. How were we on his radar screen? Well, I looked him up. Lo and behold, he ran economic policy for Elizabeth Warren's presidential campaign in 2020. And it is now, there have been a lot written subsequently. It is now acknowledged that he,

Starting point is 00:41:47 Gary Gensler and Marty Greenberg and Michael Barr were locking arms and going to, after the banks in Operation Choke Point 2.0 as well as all the crypto companies through the SEC and going as aggressively as possible. And I asked... She goes on. I'll just cut it there, but she goes on. But that's kind of a taste of how he was likely involved in Operation Chokepoint, David. I mean, that's about as damning as it gets, right? Yeah. This is a... We can't... It's pretty incompatible to have him on your advisor board and also, like, have a pro-crypto campaign. Like, that... You can't have both of those things, right?

Starting point is 00:42:25 Yeah, exactly. This is Austin Campbell who says it this way. He's a Democrat, by the way. We've had Austin on the podcast before. If the Harris administration is going to continue Operation Chokepoint 2.0, it's impossible to support them from an ethical standpoint. And I say that as a Democrat is the take here. It might not, like this administration that's lining up seems like it could very possibly be more of the same,

Starting point is 00:42:51 which would be quite honestly a disaster for crypto policy in the U.S. So I put out a tweet this morning, Ryan, which is a screenshot of the plus 10% Kamala Harris polymarket odds. And I say, maybe we should reconsider our lobbying efforts. We have Donald Trump. He is the pro-crypto president. And now, like, I'm saying, I'm suggesting, let's focus all of our industry's attention and energy on the Harris campaign because those are the people that are getting out to get us.

Starting point is 00:43:20 And there is, anytime I tweet anything like this, which is like crypto is bipartisan. in, let's make sure we win both parties. I just get attacked by like all of the crypto right who are like, why are you supporting Kamala? Why are you trying to, why are you trying to throw your support to Kamala, which I am not trying to do. I am trying to throw my support behind the reform of Kamala's campaign. And like, I think it makes the most sense to go after and lobby the party who is attacking

Starting point is 00:43:51 you. And I would just like to say that that is like. like strategically the correct move to do. Like, we should invest in reforming the Democratic Party because they are the ones going after us. Yeah, I think, I think, so I agree with you in broad strokes. And yet there's also kind of the counter. Like, I think open door policy is valid,

Starting point is 00:44:12 but it gets in the details of how do you reconsider your lobbying efforts? Because, you know, we had David Bailey on the podcast. That episode goes public Monday, but if you're a bankless citizen, you already got it. He already got it. He makes the case that the way you actually reformed, the Democrat Party on crypto is you defeat them. You absolutely trounce Harris. You are super loud about it. You say you lost because of crypto and to like come around next time and that they will

Starting point is 00:44:37 only listen when they lose and when it hurts them and when it costs. And politics is a zero some game and somebody's got to win and somebody has got to lose. And so this is actually how you trigger reform in the Democratic Party. They're not going to come to you until they're licking their wounds and they're beat up and sore. is very correct and would be a lot stronger of an argument if Donald Trump was plus 10% rather than minus 10%. But right now, right now, the Kamala campaign is the likely winner according to $600 million on polymarket. Yeah.

Starting point is 00:45:12 And so like, like if we were just ready to like squash the Democratic Party's face into the ground, so hard because Donald Trump was the pro-crypto president, if we were like 50-50, we would have a much better case for that to be true, but all of a sudden, Kamala is like in the lead by 10%, which is not a small amount. And all of a sudden, like, betting the entire horse on Donald Trump's campaign doesn't seem to be like the positive EV move to make. Well, you know, like I see that case too. I think the bottom line, at least for me at this point in time, there's been no evidence of a Kamala pivot. And if Kamala Harris does populate her administration with anti-crypto people like Barra.

Starting point is 00:45:54 Ramamerti, then her administration is going to be anti-crypto, like full stop. It's kind of that simple. And that's super disappointing because we want crypto to be bipartisan, but it's not at this point. And so if you're a single-issue voter and your one issue was crypto, okay, I'm not advocating for single-issue voters out there. I think that, you know, there's pros and cons being a single-issue voter. But if you are a crypto-single-issue voter, Trump is the ticket for you. Like it is. It's not even close. It's not even close at this point. Yeah.

Starting point is 00:46:26 The question is, does crypto even matter to the Democrats? So some people are saying, yeah, it's just like, it doesn't even matter to the Democrats. Why are you crypto people even talking about this? Like, no one cares. It's not a national election issue. I think there's evidence countering that and pretty substantial evidence. It's not just Trump's reception in the crypto community and like the Bitcoin 24th conference and Roying crowds, whatever he talks about firing Gary Gensler.

Starting point is 00:46:52 Here's a survey that came out of paradigm last week. As of right now, there are between 1 and 2% of Democrats who might actually vote Trump because the Biden administration has let Elizabeth Warren run their crypto policy. So there's Democrats out there. This is a recent poll. This is like post-Komala Harris being elevated to nominee, 804 self-identified Democrats who said one to 2% of those might switch. And that margin can make a difference in a swing state.

Starting point is 00:47:22 This is going to be a close election, no matter how you cut it. And there are some wins for Democratic voters here. It's like they care about privacy, right? 80% of them, David, were worried that if Trump gets elected, that the Trump administration would somehow cut off their family's access to financial services, right? When my adversaries are in power, it's kind of like, you know, just some fear, right? If my adversaries are in power and they have the strings to control the financial system, what might they do if I decide to, like, you know, protest?

Starting point is 00:47:50 there's actually huge support for crypto among people of color. So more so even than among black Democrats, 22% own crypto, 25% of Hispanic Democrats own crypto, whereas 18% of all Democrats own crypto. So there's like votes to win here. It's pretty clear. So I don't buy the message that there's like no wins for Democrats in pivoting to pro-crypto.

Starting point is 00:48:18 They just don't seem to see it. Okay, so remember when you, right before the ETHETF got surprise approved and you gave the case, the Hail Mary case for the Ethereum getting approved, ETF getting approved and you said it was something like one to five percent odds. Yeah. I've got one of those. Okay. Okay. You got one of those. Okay.

Starting point is 00:48:38 You got your Hail Mary? So like I've said, the Kamala administration has strategically not released any sort of policy about anything because the strategy between her and Trump right now is Kamla is like the generic Democrat. they plan, the Kamala administration campaign plans to release either her whole policy or her economic policy policy at the Democratic National Convention on August 19th through the 22nd. I think Kamala is speaking on the last day, the 22nd. And so this is when we will hear some of her policy agendas. We will actually hear it for the first time. I do not think she will say anything about crypto.

Starting point is 00:49:13 I think it's much more likely that she will say things about tech because she is to San Francisco, tech adjacent prosecutor out of California. She is familiar with Silicon Valley. And if, in my opinion, if I was a political advisor of which I'm not, just being a normal centrist is going to win the campaign, like the presidency for either candidate. Whoever is the normal centrist, in my opinion, wins. And I think Kamala, if she positions herself as a normal centrist,

Starting point is 00:49:43 that's pro-tech, they can start to get back a lot of the Silicon Valley power. Like, you remember the Mark Andresen episode that A16Z did about being pro-Trump because the Biden administration was like all hammering their entire industry. If she can win back those votes by being a pro-tech centrist and that it gets announced at the Democratic National Convention, I think that is a bellwether canary for also being pro-crypto, is being the pro-tech centrist. So what's your Hail Mary there? Because that feels like that could definitely happen. She is the pro-tech centrist and then that opens the door. or like tech is also synonymous with crypto in this sense.

Starting point is 00:50:20 I don't think any of the Democrats want her to say crypto during this convention, but like tech and crypto were kind of the same thing. See, that last part, that last part is the part that is just so dumb. And I just can't understand is like, why is it the default, why is it not the default position in the Democrat party among the Democrats to just be like neutral to crypto or like pro-crypto?

Starting point is 00:50:43 And I just can't wrap my head around that. Like why she, like the center is, is basically that, or at least being neutral to crypto, right? You don't have to go invest in or put Bitcoin on the balance sheet. Anyway, it's hard to see. Let's get the Vec Ramoswami's take. I actually saw this clip on CNBC, and it was great. Let's hear what he has to say about the prospects of a Kamala pivot. There are those who argue, who think if you're a single voter on crypto, that this could lose her the election if she doesn't come out and embrace it. Like, Trump was all for the not taxing tips. Now she's all for. Do you think she will ultimately

Starting point is 00:51:18 embrace crypto as an industry? I predict her verbiage will. And I do think that part of the reason why is you see Trump's speech at the Bitcoin Conference. It's just a matter of competing for votes that she's going to adopt a thoughtful position. Now, speaking as an American, not from a partisan perspective, I think that's a good thing. I think we should want great debate in the marketplace of ideas. Even if she offers a thoughtful digital assets framework or policy, even if I don't agree with

Starting point is 00:51:42 all of it, I think that'll be a good thing for the country. But what I challenge Kamal Harris to do is not just cite the point. pieties in the words. Go into detail. Say what you actually believe about self-custody of assets. Say what you actually believe about whether you think Gary Gensler should continue as the leader of the SEC. So I think those specifics are going to matter a lot, Kelly. For sure, but what you're saying is just a general position of openness is probably all the industry really is looking for, this idea that it's not a partisan issue, that Republicans are for it and Democrats are against it. It should not be a partisan issue. Now, what I think you are seeing is this tendency

Starting point is 00:52:12 to really embrace whatever wins her the most votes. But when you're looking at your question, Andrew, how do you assess the seriousness of that? The metric to use is how specific she actually gets on those policy proposals. 100%. 100%. I think if she just, if Kamala Harris came out and said, and I like crypto, crypto is fun. Everyone in the crypto industry is going to just smell bullshit.

Starting point is 00:52:34 Our, like, our smell bullshit, like senses are, like, really high. We're really good at that. Like, she's going to have to say the words, like, self-custody and among other things. I'm firing Gary Gensler would be a great star. I'm firing Gary Gensler. Yeah. Yeah, yeah. All right, that's enough politics for this week.

Starting point is 00:52:48 We'll be back, I'm sure, next week with even more. But further on in this episode, Coinbase, rolling out their Bitcoin on base. As BitGo's, WBT takes a tumble. We're going to talk about that. Optimism, teasing the delivery of the super chain and all the details around that. Chronos, a layer one, becomes a ZK-Evm as a layer two on Ethereum, and maybe tap-to-pay with USDC coming straight out of your iPhone. USC and your iPhone, to the point of sale wherever you are.

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Starting point is 00:55:42 Two things I think caught our eye this week. First, Kronos, which was previously a Cosmos chain, has deployed its first ZK Layer 2 EVM using the ZK Sync stack. Kronos, if you're not familiar, is like the crypto.com chain.

Starting point is 00:55:57 Finance has B&B, Coinbase has base. Crypto.com has Kronos. And Kronos has now migrated to become a ZK Stack, ZK Sync chain, and has just launched their alpha main net.

Starting point is 00:56:08 Pretty cool, especially if you're a believer in the Ethereum, rolo-centric roadmap thesis. Just one more exchange chain coming into the fold. Pretty cool. Do you remember when crypto.com hired Matt Damon to talk about crypto.com? Right.

Starting point is 00:56:23 I remember like, I was watching a movie. I forget what movie this was with like just like my family. And then up pops Matt Damon and he's shilling like crypto.com. I want Matt Damon to start shilling ZK EVMs with layer twos. The ZK stack, Gronos. Yeah, that would great. All right. So that was one update.

Starting point is 00:56:40 The second is something called Niebuhr launched on MayNet. And I think this is interesting. It sounds super geeky, but it's actually kind of cool. This is a... It is also super geeky, but very bullish. Yeah, this is a proof aggregator, okay? So a ZK proof aggregators. So if you're a ZK EVM, like the Kronos chain via ZK Sync, you have to pay Ethereum,

Starting point is 00:57:02 layer one, some fees for ZK settlement proofs, basically. And there's a cost associated with this. So ZK EVMs... It's not low. They've paid ZK EVMs have paid to layer ones $60 million, David, through the course of this. And so what Nibra does is it basically aggregates all of these proofs together and makes them cheaper. It's kind of like a batch purchasing, batch processing, batch compression makes it cheaper. So Nibra. Wholesale.

Starting point is 00:57:28 Wholesale. Yeah, just selling it. Selling it wholesale. And they claim that they can make these proofs 90% cheaper. All of that's kind of cool because what that means is ZK layer proofs. two's, the transaction fees will continue to drop. And I think there's kind of a story here around ether the asset with respect to layer two transaction fees. David, not to spoil things too far in advance, but you and I had Kyle Samani on the podcast earlier this week. We did what? Yes. And we had

Starting point is 00:57:59 him. We were just like kind of, Kyle, tell us all the ways we went wrong. And he was very happy to do that, particularly with respect to Ethereum, because he thinks that layer two's ZK EVM, some of which we just mentioned, will be parasitic to the price of ether. And so we have a conversation. He thinks a bad business model for the layer one. Basically, you know, because he sees these things, the cost of settling to layer one to Ethereum is dropping to zero through innovation like Nebara. And he's not wrong about that.

Starting point is 00:58:27 I think there's a counter that ether is earning more credible neutrality, earning its moat for a place for layer two's to kind of settle and provide data availability, and will be a money inside of these ecosystems. systems and that's a bigger value proposition. He was having none of it, of course. So anyway, that episode is coming at you soon, but it's all associated. These types of innovations all factor into whether you're long ETH or long some other ecosystem and, you know, layer twos and the roadmap and how they're going. It's all kind of tied together. Yeah. Well, part of his big claim was that like the marginal cost of software approaches zero. And this is actually like

Starting point is 00:59:05 Nibra, this, what Nibra is bringing the table is exactly in line with that. We're just like, oh, do you have as a ZK layer 2 or other like proofs that you need to use Ethereum for and they're expensive? Well, like, we can aggregate them and we can get those 90% closer to zero than previously.

Starting point is 00:59:21 And so if you want that podcast episode, it's probably in your podcast player right now or its early access will be soon. We're going to put early access out soon, right? Early access, I think we'll come out like Tuesday of next week and then the actual episode will drop like a week or two later.

Starting point is 00:59:36 So how do people get that? There's a link in the show notes to sign up to become a bankless citizen, or if you already are a bankless citizen, I hope you have the premium feed. If you don't, there is a perks page on your, once you are logged into bankless.com, you can go get it.

Starting point is 00:59:48 David, tell me about wrapped Bitcoin and the drama that's going on. Okay, so Bitco, once upon a time, like 2018, 2019 launched wrapped Bitcoin, WBTC. Bikko is a custodian provider and among a consortium of other signers created this product wrapped Bitcoin so it could come onto Ethereum.

Starting point is 01:00:06 I think my memory is hazy on this, but just like overall this has turned into kind of just like a business model that hasn't generated too much cash and his overall has kind of turned into a burden on Bicco. That's, I think, the rumor on the rumor mail. I'm fuzzy on the details. But overall, they announced plans to transfer control over WBTC to a joint venture made up of itself, a Hong Kong-based investment manager Bit Global and the Tron ecosystem with Justin's son. Yeah. Yeah. It says it plans to diversify its custodial locations and jurisdictions for the underlying Bitcoin to include Hong Kong and Singapore.

Starting point is 01:00:46 Defi, the number one consumer of wrapped Bitcoin, which is going to be Maker Dow and Avey. Defi was not happy about it because of the lack of clarity on who these new signers are, perhaps especially with Justin Sun's involvement. Even though Justin Sun says, like, I'm not going to be the signer, like my ecosystem is not going to be the signer. like my ecosystem's not going to be the signer, but somehow Justin Sun is involved here. And no one trusts Justin Sun. Okay. So just to clarify the use case for like wrapped Bitcoin,

Starting point is 01:01:12 it's a tokenized version of Bitcoin on Ethereum, right? So you can sort of hold Bitcoin. It's an IOU. It's an IOU for Bitcoin. Yeah. And then you could use it in Ave. You could use it in Maker, that kind of thing. But it's all custodied by a third party.

Starting point is 01:01:25 So it's definitely not like trustless, bankless, decentralized. That's right. That's right. And like the two dominant like use cases of WPDC are, are using Bitcoin as collateral in Ave and MakerDAO and make both of these organizations like a pretty decent amount in fees. I don't know like what else people are using like wrapped Bitcoin for. It's mainly just to be a collateral asset in Defi.

Starting point is 01:01:45 As a result, MakerDAO has a forum post to suggest to offboard WBTC, which would mean freezing all any inbound wrapped Bitcoin vaults and sunsetting that as a project. So any current wrapped Bitcoin vault would be untouched. So if you're using wrapped Bitcoin, you'd be fine. But like no new wrapped Bitcoin vaults. And AVE's governor's forums, I think, kind of said something similar. Just because of the lack of transparency and clarity there is around who is signing this, like, who is these new signers on the wrapped Bitcoin thing. Added risk.

Starting point is 01:02:21 Some added risk. Exactly. And like these organizations are very sensitive to risk. So that's the drama. Like the BitGo, like founder, CEO. or some representative went into like the Maker Dow governance forums and it's like, you guys are like blowing this all too much. It's not that bad.

Starting point is 01:02:37 Don't panic. Don't panic. Blah, blah, blah. But nonetheless, Coinbase just tweets out CBBTC, implying that like, okay, Coinbase is going to step in into this market and provide like an alternative version for this backed by Coinbase, which is an interesting move. I think it makes sense. I'm kind of skeptical.

Starting point is 01:03:00 us how much demand there is for wrapped Bitcoin, generally speaking. I mean, we've seen how much demand there is for wrapped Bitcoin, and it's like kind of hit its limit two years ago. It's been just for like I said, Bitcoin, Cloudor and Ave and Maker. But nonetheless, Jesse Pollack is pretty excited. He says, to say it out loud, I love Bitcoin, and I'm so grateful for his role in kickstarting crypto, and we're going to build a massive Bitcoin economy on base. And so it kind of makes sense. Like, Coinbase has all of this Bitcoin. They have a chain that they want to, encourage defy to grow on so why they maybe just they're going to put their bitcoin on their chain you're already trusting coinbase you're trusting them a little bit less with base and you're trusting

Starting point is 01:03:41 them just as much with your bitcoins uh so maybe just have your bitcoins on base and like it's some yield the business model makes sense this is another release that's related to not quite a release but kind of an announcement of the future so base of course uh base of course uh runs on the optimism stack Right. And optimism has its own layer two. Many of the layer twos and kind of like the top layer twos are optimistic rollups and optimism framework layer twos. The question is, can we smush all these things together? There's like a fragmentation problem across all of these layer twos. And optimism has long talked about the super chain. And the holy grail there is can you at least have some level of composability between all of these chains? So if you go to base and you have assets on the, optimism mainnet, it all feels like one. It's one user experience. So they actually rolled out a plan to do this. What's the plan, David?

Starting point is 01:04:36 It's been in the works for a long time. This is what we call the super chain and the plan. Currently in DevNet, soon to be in TestNet, and therefore mainnet, is to meld all these things together. How the details, the technical details, I don't think are totally released yet. I think if you probably went searching on optimism forums and docs, you probably get a pretty clean sense. but it's some amount of like some common sequencer

Starting point is 01:04:58 between all of these 29 O-P stack chains, including Base Zora Mode Network, and they have 36% of all Ethereum Layer 2 activity. So 30% of all Layer 2s are about to become perceived to be the same chain by the users. That's awesome. That's very, very cool. I would like to see what kind of like emergent properties

Starting point is 01:05:21 come out of this when you do meld 36 change together into one. This doesn't perfectly solve Ethereum's composability problems because you still have, like, the arbitram ecosystem. And the arbitralem ecosystem is going to do the same strategy, except it's going to be over there. And then ZK Sync is actually already like this. And they already have their, like, big chains that they have spun up. But, like, it does take, like, what is, like, 80 or 90 chains and consolidate it down to, like, five ecosystems. And optimism is just the first to do this. They did also, once they do that, once they unite their own kind of chains across the super chain, the question is, how do you connect?

Starting point is 01:05:54 one super chain to, you know, ZKAsinks version of a super chain, let's say. And for that, they're looking to ERC-7683. That is an interoperability standard between superchains and the rest of Ethereum Layer 2s. I feel like I need a deep dive into that ERC and see how much of this, like, it really supports and how composable these assets need, will be in this type of a world. But I'm like, I'm pretty certain this is part of Vitalik's tweet when he's like, hey, we don't need full shared sequencing, like, based roll-ups. We don't need perfect synchronous composability. Yes, all we need is the adoption of a set of ERCs.

Starting point is 01:06:31 And I think this was maybe one of the ERC standards that he mentioned. For sure. Yeah, can't wait till that come out. Like, so the Super Chain is one of my most anticipated upgrades to the optimism ecosystem. Ryan, I know you have been just totally waiting in anticipation for Eric Trump's Defi project. Yes. Are you ready for what it is?

Starting point is 01:06:52 Yes. You're ready for it. I'm ready. Hold your breath. Digital real estate. That's all the details that we have. That's kind of all we got. And so in an interview with New York Post about this project.

Starting point is 01:07:09 Famous crypto publication. Famous crypto publication. He said, quote the line, it has something to do with digital real estate. And that's all I need to know. I'm not like. Where can I buy? No, Ryan and I, before we were going through and doing this recording, I was like, digital real estate, does he mean tokenized real estate?

Starting point is 01:07:31 Yeah. Because there is an allusion to having access to like borrowing and lending services for people who own real estate. You're talking about tokenized real world real estate. Like real estate tokenized on the blockchain. Sure, sure. It's one interpretation of what this is. It is.

Starting point is 01:07:45 That's digital. Or it's digital real estate as in like. Metaverse. Trump NFT cards. Yeah. That aren't actually real. It's fake real estate that's digitized as like tokens. It's real fake real estate.

Starting point is 01:07:59 Buy a Trump Tower in the Metaverse. It could be that too. And we just don't know. Or maybe David. Maybe it's both. Wouldn't that be perfect? I don't even know how that would work. Anyways, there was like its allusion to like providing equitable access to capital and

Starting point is 01:08:14 then some combination of digital real estate. We don't really know what's going on. Yeah, some interesting quotes from this article. We'll have to wait to hear more and to start getting our hands on that digital real estate. David, are stable coins coming to tap to pay on iPhones? This was the rumor this week. I think it's a little bit early to say that they are, but this rumor got sparked when Jeremy Aller,

Starting point is 01:08:33 a guy who would know a thing or two, says, tap to pay using USC on iPhones incoming soon. Wallet Devs, start your engines. And he is tweeting out an article from Bloomberg about how Apple has opened up the use of its NFC chips and its secure element to third-party app developers, which I didn't even know is closed. If you have ever used Tap to Pay on your iPhone, which I use as often as I possibly can, I love it.

Starting point is 01:08:58 It's great. If I forget my wallet, it doesn't matter because it's on my phone. Just like scan my face, tap it on the point of sale, and I've got my thingy. Apple is opening up that service, along with the secure element to third-party application developers, which means the secure element, which can securely hold a private key pretty damn well, can hold a private key, which is for a wallet, which could be, in theory, embedded in tap to pay. which could be a smart contract wallet that has USC in it, which is what Jeremy E. Lear is alluding to,

Starting point is 01:09:28 which I think is super sick, so you have a private key on your phone, natively on your iPhone, which scans your face if you use face ID, and then it's the USC that you have on your iPhone can pay for stuff. It's like cash. That is sick.

Starting point is 01:09:44 It's a bare instrument. It's a bare instrument. It's almost like a bare instrument like cash in your actual wallet. And what's also cool is this leads me to believe, I mean, Jeremy's talking about USTC, and that's certainly one use case. But if the vendor accepts Ether, if the vendor accepts, like, Dogwith Hat. Dog with hat. Like, whatever.

Starting point is 01:10:02 On any blockchain, it could be any blockchain. Yeah. And, you know, like, that's really cool to have the user experience of an, like, Apple iPhone. Because, I mean, just like, younger generations do not, like, want credit cards. I mean, just they want to pay with their phone and to have crypto be that accessible, I think is the future. So awesome stuff. This applies to just like tokens and payments as anyone would expect, but just like you can also apply it to any like a ticket. Like I also like go to concerts and I board airplanes with tickets that are in my Apple wallet.

Starting point is 01:10:34 Yep. And whenever the hell we figure out how to like do like NFT tickets, which has been talked about since the inception of blockchains. As soon as we disrupt ticket master, you can have that as a bare asset on your phone, which is like the future, which I think is pretty sick. That's very cool. All right, let's wrap this up. Me of the Week. What are we looking at? I think this is a new meme format that is just coming out now.

Starting point is 01:10:59 I don't know where this came from. It's going to be hard to describe. You have to see it. I'll do my best for explaining it. I don't know what the origins of this meme format is, so I'm just going to make it up what I think it is. And so I'm thinking that I am seeing a rom-com movie of a couple who's like falling in love for the first time. and I'm guessing this is a montage.

Starting point is 01:11:20 And they are on like, what do you call these things? Carousel. Like, carousel. Yeah, carousel with the horses. And they're having a good time and they're being cute. And the guy is labeled me and the girl is labeled the S&P 500. And they're having a fantastic time. And then in front of them is like the horse carousel ride that they are not on.

Starting point is 01:11:41 It's just like it's in the foreground. It just happens to be there. I'm assuming this is just like a cut frame. And this horse is just like. crypto. I don't know how to explain it, dude. I don't think we can. It's just, it's just, and this horse is in the foreground, and it just looks so dumb. Whatever. In the week, that's how I feel. And it's labeled crypto. Importantly, it's labeled crypto. Thank you. Well, you got that out. Wow. Oh, my God. Wow. Let's actually wrap this up. Okay. Let's switch to something more

Starting point is 01:12:12 serious, shall we? It's going to be hard after the crazy. Of course, we just saw that. Okay, instead of a moment of Zen, we have a, I guess a moment of responsibility for you, like a moment of burden. A moment of burden. It's how I've called it. Don't want to burden your conscience, you know, too much. But it is a fact that crypto now has a growing list of like political prisoners, actually. And I think the latest couple have been most egregious. And one of them, which was in the agenda, we'll go through the full story some other time.

Starting point is 01:12:45 David, no more crazy horse, dude. Tigran, jailed in Nigeria. No trial. He's a finance executive, no evidence of wrongdoing, literally being kept in conditions that might render him permanently handicapped. Okay, these are the reports coming out of this. If you haven't followed that story, there'll be a link in the show notes. Another one, though, Alexei Pertseth.

Starting point is 01:13:07 He was a tornado cash developer, open source privacy technology. We've talked about this many times. He was sentenced to jail in the Netherlands. like five and a half years, something like this. So he's now serving time in jail. We're about to play you a clip from jail where he is asking for funds to help him appeal this case and get out of jail. Of course, it's David and Mai's position that he was unrightfully jailed, that this is a failure of Western liberal democracies to actually put him in that place. There's someone else who's associated with Alexei Pritzv, his name's Roman Storm. He's actually has an upcoming

Starting point is 01:13:43 trial in the U.S. that will happen in the later part of this year. All eyes on that, it's an incredibly important trial for U.S. precedent. Anyway, some of these folks need our help, and they're raising legal defense funds to help them actually fight this in appeal. So Roman Storm has raised some funds before. He'll probably need more at some point in the future. Alexei Perzev right now is raising funds to help them appeal this. So we've supported this at Bankless. We're sending them some funds. We'll include a link. in the show notes where you can join that effort as well. Super important stuff. So that's what we will play in the moment of Zen for you in a second. David, do you want to say anything before I get to

Starting point is 01:14:24 risks? Nope. Moment of anti-Zen. Yeah. Anti-Zen. Not Zen. I misspoke there. All right, guys, crypto is risky. You know you could lose what you put in, but we are headed west. This is the frontier. It's not for everyone. But we're glad you're with us on the bankless journey. Thanks a lot. Hi. My name is Alex Berndt. Five years ago, I helped to invent a privacy solution for Ethereum blockchain called Tornada Cash. In August 2022, I was arrested in Amsterdam and put in jail for 8.5 months under suspicion of money longer. In May of this year, the Dutch court sentenced me to five years and four months jail. The judges ruled that Tadada Cash sees guises and conceals the origin of criminal proceeds,

Starting point is 01:15:10 And I am, as a developer, responsible for that. Even though it's somebody else who is using the tool, even though I could do nothing to prevent it, it's still me who has to pay back five years of my life. I disagree with this decision, and I will fight it in appeal. As a result of the court's verdict, I was pulled in jail again. That being stressful for me and for my family on its own, it limits me to contribute to my legal defense. While at the same time we are working against the whole Department of Financial Police and amendments,

Starting point is 01:15:51 there is no precedent for this case, and its outcome is crucial for blockchain industry. Even more broadly, it raises a question when the developers can be held responsible for their invention, if misused by third parties. where is that line that you cannot cross? I have extended my legal team and we are eager to disprove the verdict and provide clarity to this issue it will be of huge importance

Starting point is 01:16:22 the future of our industry. Dear listeners, I need your help. Please contribute to my legal defense. You can do so by a native through juice box and justice doubt. I am profoundly grateful for any contribution, small or large. Thank you.

Bankless - ROLLUP: Kamala Crypto Pivot? | USDC iPhone Tap-to-Pay | WBTC Drama? | Superchain Soon?

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