Bankless - ROLLUP: Ledger Recovery Concerns | Ethereum Finality Issues

Starting point is 00:00:00 Is your ledger safe or should you throw it down the toilet? Ethereum, it's got a finality outage. Is it safe or should you also throw it down the toilet? We don't know. Bankless Nation, it is the third Friday in May and it's morning time on Friday or afternoon time. Actually, it's not. It is 4.40 p.m. All right.

Starting point is 00:00:22 Well, it's warning for me, David. I can't wait to have you on the East Coast, but you're still in Montenegra. But, okay, this intro is going long. We got something to tell them. It's time for the what? Friday weekly roll-up where we cover the entire weekly news in crypto, which is always an ambitious endeavor. Yet we persevere nonetheless into the frontier. It's going to be a long one today, so I'm speaking fast. All right. That's good. Let's keep up that pace, David. Topics of the week.

Starting point is 00:00:44 Did we just get rugged by ledger, the hardware wallet? Or is this just mob season on Twitter? Is this ledger getting canceled? That's number one. What else we're covering this week? Ethereum's non-finality event? Is non-finality an event? Did Ethereum break or is it working as intended. We'll talk about that and more. And Gary Gensler continues to be in the hot seat. Nice. Bedrock, world coin, doge coin, plenty of things to talk about there. But bigly, most bigly, Nike's dot swoosh program, a program that no one is paying attention to, which might be the coolest web three metaverse thingy thingy that got released that everyone else is just ignoring because we're busy canceling each other on Twitter. That was it was cancel week for sure. Maybe

Starting point is 00:01:28 some of it justified, though. We'll get into, we'll get into the story. Definitely the bankless cancel ship was, was justified a little bit. Yeah, fuck those guys. All right. Let's, before we get in, let's talk about fuzzing. Do you want to spend a minute talking about our friends and sponsors over at Consensus? Because they want you to know you should be fuzzing right now if you are not fuzzing. David, what does this mean? What am I talking about? So Consensus has a new diligence tool for all the people who writes code. So it's an audit grade security tool that serves as an way to find code vulnerabilities. If you know what fuzzing is, then this is for you. If you don't know what fuzzling is, then this isn't for you. And so if you are working to write code without having

Starting point is 00:02:10 to host your own infrastructure, no writing of complex tests, blah, blah, blah, blah, diligence fuzzing is a system to test your code that is built by consensus. So you can layer on additional security. In addition to your regular audit, you can also use consensus's diligence fusing. So this is consensus's message to you. Go fuzz yourself. Do you just come up with that on the fly? Are you kidding me? So in order to go fuzz yourself and your code, there's a link in the show notes. You could fuzz for free, too. It's free fuzzing on Vanquist this week. Fusing all by yourself. Fusing all by yourself for free. Can you beat that? Well, let's get to the markets. Enough with this fuzzing talk, David. What are the markets telling us this week, starting with Bitcoin?

Starting point is 00:02:58 It's flat. 27,300. Start of the week, end of the week. It's flat. You put the same number twice. I'm looking at the agenda here, which I print out, by the way, every week. I print out so I can look down on paper. 27,300 is the start.

Starting point is 00:03:15 And you have the current 27,300. Those are the same numbers. It can't be. I know those are the same, but like, really? I mean, give or take a few dollars. But you just rounded it, huh? You just, like, it's flat. How do you know?

Starting point is 00:03:29 It's that season. You go check my math. I don't know. I'm just trusting you. Every week, I don't even look at it. I barely look at this. Even though the charts are beautiful. Thank you, crack and pro for these charts.

Starting point is 00:03:37 I barely look at this. I just hear you tell me numbers each week. What is the ETH price? 1820. It was 1827 days ago. It's 1820 today. It's a flat week. You know what?

Starting point is 00:03:47 Something suspicious about these numbers. You're just copy tasting, I think. Heath Bitcoin, the ratio. Flat. Flat. Are you serious? Why don't we even do markets anymore? Oh, no.

Starting point is 00:03:59 Okay. Whatever. And Bankless Nation, please open up your price checker apps, open up your cracking app on your phone, and check the price currently because it might not be flat. Who knows? Yeah, verify this for me with David. Don't trust.

Starting point is 00:04:12 I'm sure this is for most bankless listeners. This is the first time they'll be checking prices this week, by the way. They just wait until we prompt them to check prices. People actually listen to the bankless podcast in order to hear about the crypto prices. They don't know the prices until we tell them. It's a global source of truth for that. We'll tell them the market cap of crypto then while we're at it. Coming in at a whopping $1.18 trillion.

Starting point is 00:04:35 So I think we are up $60 billion from last week, marginally up. So some shitcoins got pumped. If Bitcoin is flat, Ether and flat, but the total crypto market cap is up. David, you can't call the rest. You can't call everything non-Ether and non-Bitcoin shitcoins, David. I think I just did. I know. And I feel like I should cancel you for that for saying that.

Starting point is 00:04:59 Oh, God. Beacon chain, eth supply. It's up. All time highs. Up. It's up. The same flat. We're continuing to go up.

Starting point is 00:05:09 Okay. So this chart is all time highs. How much ETH do we have deposited? 18.5 million ether. Yeah. So if you zoom in real close. I think this is one of those charts where you can click and drag and it'll automatically zoom in.

Starting point is 00:05:21 And we can get real close. I can get you the month when you sell for that. Yeah, 18.5 million ether is deposited onto the beacon chain. It is going up faster than it has ever gone up before. Man,

Starting point is 00:05:35 which is pretty cool. A lot of people were wrong about this. They said post withdrawals, it would be going down and it's not going down. It's going down for not even two weeks. It went down for like 10 days. So here's a cool new website.

Starting point is 00:05:48 I mean, actually it's really boring. It's actually a very boring website. Yeah, it's not. The information is cool. There are five lines of text here. The most boring website I've ever seen. Yeah, so this is Ethereum 2.0 validator Q. Validator, hyphen Q, hyphen monitoring.

Starting point is 00:06:01 God, I'm not even going to read that. There's a link in the Toronto. It basically tells you two things. The website sucks, honestly. I'm sorry to whoever made this website. It's supremely useful. It is basically a tug-of-war between the depositors and the validators, and it tells you who is winning that tug-of-war.

Starting point is 00:06:17 So pending validators on the entry queue is at 55,000. Pending validators 55,000 pending validators if you want to make a new validator It will take you 731 hours to get through that line if you are a validator who would like to exit and stop being a validator It will take you drum roll four minutes Four minutes four minutes to exit if I want to leave it only takes four minutes but if I want to get in It's like the best like nightclub ever man yes it's just a line just keeps getting a long 731 hours to get into the nightclub and four minutes to exit. Man, people really want to be on the beacon chain.

Starting point is 00:06:57 They totally do. Wow. Well, congrats Ethereum for that. All right, let's talk about some other market news. David, I think the big question this week in the markets is, where are we in the cycle? You just kept talking about flat. And I feel like that's a pretty good description. But let's start at the highest level.

Starting point is 00:07:16 What is the Fed doing this week? and can the Fed actually declare victory on their interest rate rises? And are we going to stop doing that? This is Paul Tudor Jones, who is a billionaire investor, manages the hedge fund, is someone the traditional finance markets respect on that question. Here he is on CNBC. I want to know what you think about this, David. Here, I'm going to play it.

Starting point is 00:07:39 I actually want you to react a little bit to this Austin Goolsby interview in some of his comments. I'm curious where you think interest rates, will go, should be, what do you think? I think they've done hiking. I'm so glad I don't have his job because listening to these guys try to not say what they really want to say

Starting point is 00:08:01 and what they really think. What do you think he really wants to say? Oh, he wants to say, we're done, we've gone too far and enough's enough. That's what he wants to say. He just can't say that because he's new on the board and he has to follow the chairman,

Starting point is 00:08:15 but that's what he wants to say. And what do you want to say? I think he's right. I think they're done. You think they are done? Definitely, I think they're done. I mean, they could probably declare victory now, because if you look at CPI, it's been declining 12 straight months. 12 straight months.

Starting point is 00:08:35 That's never happened before in history. So there's a strong downward arc to inflation at the moment. Two-year break-evens are under 2%. Clearly, they have to be governed by trailing 12%. 12-month inflation. But if we get to the here and now, you can see that inflation to a great extent has been wrung out of the market. Now, does that mean that we're getting ready to imminently cut? No. But you've got to think of interest rates a bit like chemo. So chemotherapy, chemo is poison. Interest rates with the kind of amount of sector-wide debt that we have

Starting point is 00:09:15 between private's consumer and the government. We're probably at levels where we've typically hit a recession in the past because of the interest tax on the economy. So we're at a level that historically has really slowed the economy and historically has kicked off a recession. I think it's just a question of waiting for more. And then he talks about equity markets and he says this on equity prices. I think they're going to continue to go up this year, but I'm not rampantly bullish because I think it'll be a slow grind.

Starting point is 00:09:50 But he thinks equities end the year higher than they began the year. So what's your take on all of this? Is can the Fed declare victory? Are they done? What do you think about Paul Tudor Jones and his takes on this market? Well, first and foremost, Paul Tudor Jones is way smarter than me and way more informed. So take that, take all of my further words with that. He said CPI is down for 12 months in a row.

Starting point is 00:10:17 Yes. And core CPI's not. And that is the bigger deal and the more important one. And that is such an obvious fact that I'm sure Paul Lee Tudor drones has something to say about that response. However, to say that like, oh yeah, inflation, 12 months in a row is down. Like that's not the whole story. It was also up a lot. Yeah.

Starting point is 00:10:37 Right? And so the last time I checked, which was not too long ago. It was six weeks ago. core CPI has not had not reversed and that is the bigger story that I've thought and so in order to have a more informed take I would need to go back to the core CPI numbers and compare that to what paul tudor Jones is saying but paul tudor Jones is like smarter than me about this interest to high interest rates as as chemo and I guess that means like debt is like cancer or like uh I don't know mean stock markets are like malinformed investment poor capital allocation is in is cancer yeah that is the

Starting point is 00:11:12 cancer you have to cut out of the system anyway the Fed is done raising rates now is the message. I think you might be right on that core message. But that brings us to the crypto markets. And this is something we talked about last week, David. And maybe we want to put more flesh on this because last week, a theme was liquidity is drying. It's a desert out there because liquidity is drying out in crypto markets. This is ROM, who's been a previous guest on the bankless podcast now a couple of times, who has some great insight on this on liquidity in crypto. What's he telling us? So I believe Rom is actually following up with what we were saying last week in the market section

Starting point is 00:11:47 because in our telegram channel with him he was like, hey, really good points about liquidity, which I usually don't have good takes about market macro markets. Except that one, I was like, okay, I think I'm right about this one. And then he comes in and follows up. And so here's what he says. Crypto markets liquidity has dried up significantly. These are the consequences of a lack of a crypto bank settlement layer, Silvergate and signature. market makers need a way to settle instantly with counterparties.

Starting point is 00:12:13 So here's the part that we missed last week. Silvergate and Signature had S-E-N, Sen, and Signet, their interbank instant settlement layer between banks that market makers would use. And so in crypto, the problem was seemingly solved with Sen and Signet. A market maker can enjoy instant settlement. One benefit is not having to type capital on many exchanges or waiting several days or funds to clear.

Starting point is 00:12:35 Lack of instant settlement hurts capital efficiency. The banks intermediate these transactions. they confirm tractions and validate sufficient funds, just like the blockchain. And so what he's saying is that, yes, all the reasons that we talked about last week are reasons why there's liquidity leaving the market. And also the specific products that these crypto banks made in order to satisfy crypto market makers called CigNet and CENT and CENT Transfers. And so these specific products are missing now from the market because ChokePoint choked them. Yeah, absolutely. I mean, the settlement infrastructure for crypto was operating behind the scenes, almost like a private side chain or private blockchain and it was settling all these transactions. Private landing at the case. Yeah. We had ROM on the podcast to talk more about this. And I would encourage folks to go listen to that if you already haven't about the U.S. banking system and the crisis that we've seen recently. So this is the part of the market, David. We've been calling the apathy market. We've gone from bear market.

Starting point is 00:13:38 where that was obvious to bore market, right? From bear to bore market. And this is how Anthony Sasano puts it. I love how the entire market has been bleeding nonstop for like a week now. And crypto Twitter is pretty much dead silent about it. Clear a sign I've seen so far that we're now firmly in the time-based capitulation

Starting point is 00:13:56 part of the bear market. Time-based capitulation. That's the part of the bear market we're in, says Anthony. What does he mean by that? He means that now it's boring. And so time-based capitulation. So the excitement is over.

Starting point is 00:14:11 Even when like prices are going down and like there's blood on the streets, at least it's still exciting. So what Anthony is saying is like, well now like all, we've bled all of our blood. Like we got nothing left to bleed. All the excitement has left the market. Now we just have to wait this one out. That term capitulation though,

Starting point is 00:14:28 he means like people give up in the board market, don't they? They capitulate. They're like, ah, it's not moving. Like it's not going up. not going, it's going to go down forever. The number's not, the number's not even going down. If it was going down, it'd be exciting. Now it's just flat. They sell. And so they sell. They capitulate in this type of market. That's the market phase that we're in right now. As if on cue, David, I just saw this this morning from The Economist. Here's the headline. I read the whole story,

Starting point is 00:14:53 but it's kind of summarized in the headline. The promise of crypto has not lived up to its initial excitement. A crypto finance revolution looks further off than ever from the economist. These are the bearish sentiment headline. This is the apathy market headline. You're going to see a lot of these in the weeks and the months to come. And it's up to you if you want to do the time-based capitulation part or you want to hold through this to the other side. But I got to tell you, man, there's nothing new under the sun. We've done this a few times now in crypto. Like I've seen these headlines before. So you know what this means to me? What? The bear market is half over. I totally agree with you. Yeah. I totally agree with you. We are now in,

Starting point is 00:15:35 2019. 2018 is over. 2019 has started. The true convicted people will watch the innovation happen and learn to be excited about that, even if it doesn't mean the prices are going to do anything. And they will learn to be excited about that.

Starting point is 00:15:48 And then the prices will return. And then the bear market or bull market will start. And then you actually won't, if you were like me, you won't know what you're really in for with a full bear market starting from the low, low prices that we're currently at. Anyways, that's how it happened last time.

Starting point is 00:16:01 Happy 2019, everyone. Happy 2019. It's just 2019, but it's just 2019, but it's 10x, right? I remember, like, 2019, Heath was saying it in the 100 to like 250 range forever. Over and over and over and over. Well, what are we right now?

Starting point is 00:16:15 What is the equivalent, right? Like just, you know, 10x that. A thousand to 2,000? That's like 100 to 200. Like, it's so crazy, dude. It's like... The crypto gods are giving us yet another opportunity, my friend.

Starting point is 00:16:29 If you're here, you probably see it. This is a chart that I do like looking at, though, total locked value in layer 2s. This is on layer 2B, of course. This hasn't changed a ton. Of course, we've got Arbitrum number one, 5.87 billion in optimism coming in. But look at this activity chart. So this is the number of transactions. Yo, look at that. ZK. Sink era. All right? Amutable X. Wow. That's actually the first time we've seen chains be equivalent to Ethereum throughput. That's pretty cool. Yeah, immutable X for people who can't see this on screen, Immutable X number one, with a seven-day increase of 250% and transaction throughput

Starting point is 00:17:12 higher than Ethereum Mainnet, ZKSync up almost 200% as well over the last seven days, getting to equivalency of Ethereum mainnet transactions per second. And if people are like, I thought layer two is supposed to be faster than Ethereum, Ethereum layer one is clogged. It is as fast as it's ever going to go. Immutable X, ZK sync, these are ZK rollups. These are not clogged. People just aren't using them enough. Yeah.

Starting point is 00:17:40 But we have equivalent amount of usage of these things as Ethereum. So it's cool. And then like if you aggregate it altogether, which is this red graph, an aggregate, man, we have not been reporting on this. Like I think the last time we talked about this, a scaling factor of combined layer twos was like 2.4. We're up to 3.7. So layer 2s are doing 3.7 times.

Starting point is 00:18:03 as much economic activity. It's an all-time high in economic activity on layer two's. Economic activity and transactions per second, not total value nuances, but still. Yes. Economic activity of transactions. Yes. Transaction.

Starting point is 00:18:19 Yeah, transaction volume. And what was interesting to me is these are both ZK. This is both ZK technology, not optimistic technology, immutable and ZK era. So good news. All right. We had a lot more to talk about, David. What's coming up?

Starting point is 00:18:31 Coming up, we've got to talk about the big news of the week. week. Is your ledger safe or should you throw it down the toilet? Ethereum. It's got a finality outage. Is it safe or should you also throw it down the toilet? We don't know. Bedrock on optimisms coming to main net. Say hello to DRC20. Do you know what the DRC 20 is, Ryan? Dr. 20? Okay, I don't know what this is. No. I don't know. Yeah. Well, I'm about to tell you. So we're going to get to all of this and more as soon as we talk to some of these fantastic sponsors that make the show possible, especially Cracken, our preferred exchange for 2023. If you do not have an

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Starting point is 00:21:16 Defi Force EthX users. All of Stater smart contracts are audited by at least two independent cybersecurity auditors and have multi-million dollar bug bounties currently live. So go to Staterlabs.com slash eth to sign up and get access to. to the stater staking protocol. What happened to Ethereum last week? David, after we recorded last week's roll-up, there was a hiccup,

Starting point is 00:21:36 and then there was a second one on the Ethereum network. What happened to Ethereum? Can you give us the details? Yeah, so Ethereum blocks stopped finalizing for about 25 minutes, and then the second non-finality event lasted for about over an hour. And so what does finality mean?

Starting point is 00:21:55 Blocks are still processed. Transactions go into blocks, blocks are still sent around, but they are not being finalized, as in they are not having the last line of security locking those blocks into the chain. So blocks are still being added to the chain, but they are not being permanently embedded under the full weight of proof of stake yet. And so this is an interesting nuance. And so we did a show with Preston Van Loon and Terrence from Prismatics that will be able to explain this deeper, but just at a high level, every single validator does attestations. And so there was a large amount of attestations due to the increased

Starting point is 00:22:33 number of validators because so many newsakers are coming online. There is increased requirements between bandwidth and also computation. And so a bunch of attestations are being sent around and that overloaded a number of validators. And excuse me, a number of clients. And so Takeu and Prism released software updates pretty quickly that strengthened and fixed this part. And then all of a sudden we were able to return to finality. And then we had a unique lesson learned about how Ethereum works and a contingency patched. And so that's the TLDR. How would you add to that? I think that's a great. So Ethereum didn't go down. This wasn't an outage, as we've seen with other networks like Solana, which was a straight outage. Transactions

Starting point is 00:23:16 couldn't move forward for like hours at a time in some cases. This was a temporary halting of finality, which is different. I wouldn't even use the word halt. if we wanted to be super precise. We did not achieve finality, but nothing is halted. Right. And so some people were saying that like Ethereum broke in this case, including... And some people. Can you believe it?

Starting point is 00:23:43 Can you believe it? Some people even tweeted that out as a headline and then explained it in the details of the body. But we're not precise about that. But Ethereum didn't break in that sense. In fact, this is kind of a demonstration of a demonstration of a... It's resilience. If you want all the details, go to the episode that we just did with Preston and Terrence. But I think this showcases the value of a multi-client architecture for one.

Starting point is 00:24:08 100%. Exactly. Okay. So Prism and Teiku had this problem. Lighthouse. Yes. No problems whatsoever. So Lighthouse, like, I don't know.

Starting point is 00:24:16 Ethereum's working fine for me and I'm doing my thing. And so Ethereum's just going to keep on going because I'm going to put Ethereum on my shoulders. It's also, it also demonstrates kind of the blend of proof of stake that Ethereum is, which is kind of the priority of liveliness. So Ethereum doesn't go down. It can be delayed, but it does not go down in the same way that other chains

Starting point is 00:24:37 go down when they prioritize safety with proof of the stake. So David, let's take a peek at client, I didn't know there's an entire page about this, but client diversity. There's an entire page about everything Ethereum. All right, so what are we looking at here? This looks like some charts on distribution of two types of

Starting point is 00:24:53 clients, consensus clients and execution clients. How would you explain this? Yeah, okay, So two kinds of clients. One is consensus clients, aka beacon chain clients, and then execution, which is the actual processing of transactions. Nuance there, but also really important. Consensus clients is the beacon chain. So we got Lighthouse, Prism, Teku, Nimbus, Lodestar. These are what we previously called ETH2 clients. And so Lighthouse and Prism equally have about 38% followed by Tecku with 16% followed by Nimbus. And so is Prism and Tecu that had the shared bug. And so that's actually what are the unique properties about a non-fighter

Starting point is 00:25:26 a non-finality event. When a non-finality event happens, you actually know that it is a bug that is shared by multiple clients, which is a serious thing. And that is why this is an event. It's because there is one bug that multiple clients had. So it showed up in Ethereum.

Starting point is 00:25:41 If this was just one client, and say if it was like Nimbus at 6.5%, and Nimbus had a catastrophic client that just broke every single note. You wouldn't notice it. Not only would you not notice it, you would still actually get finality because Nimbus is only at 6.5%.

Starting point is 00:25:55 at Lighthouse, if Lighthouse, if all Lighthouse clients went down, you would not achieve finality because it would get to below 66%. And so because Lighthouse has 38.2% of all nodes, Lighthouse has enough clients that we would get below that 30, that two-thirds threshold. And so Prism at 37 and Takeu had this bug, but Lighthouse and the other clients held the system up. And so this is the importance of client diversity. And also, again, why when there's one bug in multiple clients, that is when client teams wake up and start fixing the problem immediately, which is what Preston and Terrence and other people across the client teams did. Thank you for your service.

Starting point is 00:26:37 And so this is just a quick lesson in client diversity. And while multiple clients had the bug, call it a bug, the rest of the clients kept Ethereum up. So like think of it like Atlas holding up the world, right? And every single. client is an arm and the strength of the arm is related to the share of nodes that they have. How's that for an explanation? Multiple armed Atlas. Yeah, totally. And the cool thing is, building a new arm is permissionless. So you can always build a new arm because it's... You want to build a new arm?

Starting point is 00:27:09 No, I'd rather talk about people who build arms. Yeah, it seems way harder to actually build arm. This is a take from David Hoffman. Ethereum, in quotes, is a composition of diverse and distributed components, none of which are individually critical to Ethereum. Components can and will fail, but the chain will continue. This downtime non-event illustrates this perfectly. Single client systems are weak and fragile. Fast systems cannot hold a distributed set of components, since more components require slower systems to maintain consensus, fast chains minimize components, and therefore maximize fragility.

Starting point is 00:27:43 I think you are saying here, David, that this event showcases the design decisions that Ethereum has made, which is to maximize liveleness, to maximize resilience, to not go down at the sacrifice of some other things. Ethereum is not the fastest layer one from a transactions per second perspective. It is a slow chain. Tell me more about this. Yeah, so the slowness of Ethereum, the decentralized nature of Ethereum allows for more components, more clients to be a part of the network. And the idea here is that Ethereum is designed. intentionally designed so that components will fail and Ethereum will continue because Ethereum is not one thing. What is Ethereum is a question, not an answer. And so if you go back to the client,

Starting point is 00:28:34 the client diversity page, like what is Ethereum? Well, it's 38% Lighthouse. It's 37% Prism. It's 16% Teku. And those numbers are in flux. And there can be other nodes that come online or other valid clients that come online. And so Ethereum as a system just needs a majority of these things to work. And even if a majority of these things don't work, that actually doesn't take down Ethereum because it only takes down one component of Ethereum, which is finality. That's only the cherry on top of what makes a blockchain a blockchain. And so like these considerations have been deeply considered by the eth researchers out there. And so the actual fact that this happened and Ethereum didn't stop. and then also naturally recovered quickly,

Starting point is 00:29:17 along with the help of some superstar client teams. It just shows the resiliency of the system at large. This is a question from the bankless Discord from AlexRoe.Eth that I think is relevant here. In light of Ethereum recently, in quotes, breaking, is this too soon? Can you explain block reorgs? It sounds like a reorg could cause chaos,

Starting point is 00:29:37 but each block produces susceptible to it for two epochs, I believe. Is this not a huge risk? Can you explain block reorgs in the context of the? this. Yeah, so blockchains are a chain of blocks and go one by one by one. And sometimes, due to the construction of a blockchain, we pick a new header. And so maybe two or three blocks are added to the chain. And then actually, because of the mechanics of the chain, it goes backwards like three blocks for whatever reason. This happens in Bitcoin every now and then, like not too long ago. There's like, I think like a 10 Bitcoin block reorg, if I'm not

Starting point is 00:30:07 mistaken, maybe not that much. But the idea is it's possible. And so the joke here is that like everyone was freaking out about Ethereum not having finality for like over a little bit over an hour. Do you know when the last time Bitcoin has had finality, Ryan? No, I don't. 13 years ago. Because Bitcoin doesn't get finality. Yeah, yeah. It doesn't get like deterministic.

Starting point is 00:30:31 It doesn't get deterministic finality. It's like economic weight probabilistic finality, of course. Right. So like rolling back the Bitcoin blockchain back to this block zero is technically possible. and within the rules of the Bitcoin system, it just costs a lot. Ethereum, because of the innovations of proof of stake, achieves finality in six minutes. And then if you want to go back words in time more than six minutes, it takes, you are provably going to slash two-thirds of all-staked ether.

Starting point is 00:31:00 In the event of non-finality, this is when there is susceptibility to block reorgs. And so that is the risk here. That is why this is important because we are no longer having our massive wall. of capital slashing to protect a reorg event. And so while there are other penalties, there's not like the big penalty. So it is a risk. And this is why like when Preston and others saw

Starting point is 00:31:25 the Ethereum main net wasn't having finality that like they didn't just say, oh, okay, well just wait. Like no, they got up and fixed the problem. But that's because Ethereum has a culture of maximum security. And so yeah, the risk for a reorg doesn't just, There's more and more nuances there.

Starting point is 00:31:42 I think one other thing I would say is it can sound like without Terrence and Preston waking up or client teams wake up and fixing the problem that Ethereum would never have finalized. It still would have finalized. Like that's the point. What would have happened is

Starting point is 00:32:00 this client distribution would have changed. A bunch of like client validators would have switched over to Lighthouse and the network would have rolled on. So this is not a case where this was reliant on the client devs to like pop up in the middle of their day and like wake up from their like naps. Preston was literally almost going like for a nap at the time and like fix it. It would have resolved itself as well. They just restored the resilience back to the network.

Starting point is 00:32:26 They did it faster. So in parts of Ethereum are not doing their job, they get penalized. There's like producing an invalid block and then you get slashed and that's the big one. But if you're not also doing your job, you get penalized in a minor way. way. And the idea is like as soon as, and this is actually did start to happen, when there's not, when there isn't finality for enough amount of time, the sources of non-finality start to get penalized marginally and then a little bit more and then a little bit more. And then eventually they get penalized so much that the actual, the network starts to return to consensus because

Starting point is 00:32:58 the people that are producing helping produce finality are not getting penalized. And so the, the system is naturally finding an equilibrium because that is what a good crypto-economic system does. There's a much better explanation if you just listen to the podcast There it is. It's right here. It's right here, guys. If you want to use this apathy market to level up on your theory of knowledge, is a good time to do that.

Starting point is 00:33:18 David, speaking of level ups, Ledger recover, all right? Was this a level up for Ledger? Or was this a big mistake? The question on people's minds is, is Ledger Safe this week? That is the hardware device that we're talking about. And give us the context for this,

Starting point is 00:33:36 because it all started when Ledger decided to announce a new product called Ledger Recovery. Take us there. So Ledger introduced a new product called Ledger Recovery, which lets you recover your seed phrase using your ID, which for the normies of the world, it was probably they're like, nice, great. Love that. That's what I'm used to. If I'm, if my bank account, like, I can't access it, I'll just show them my ID and they let me in. That's, that's normal.

Starting point is 00:34:02 For the crypto hardliners out there, you understand the risks associated. with that. That has new risk assumptions that triggered a lot of the crypto and the shivers up your spine when you see this. Yes. Right. Like we don't want nation state IDs to be our recovery process. So the way that this works is that you subscribe to this ledger recover through the ledger live app. You go in through the and make an account and then go through the ID verification process. On your device, after pin verification, you will ask for it initiate a recover backup process. So you ask your own device, like your device asks you, hey, do you want to do this thing? and you're like, yes.

Starting point is 00:34:36 So after you consent to that, the ledger takes your seed phrase, that's inside of the ledger, shards it into three, encrypts it, and then sends it outbound to these three custodians of your sharded private key. One is ledger to our alternative custodians in different parts of the world. And then these are the people that you go show your ID to in order to get your seed phrase back. So it is a way to, if you lose your seed phrase, use your ledger, your nation state ID can get you your seed phrase back. Again, make sense to a lot of people.

Starting point is 00:35:09 And so that is kind of this new product that I think will make sense to a lot of people who are not in crypto. I think prescient bankless listeners can understand where people started to get concerned. The idea here is that people, including myself, were always assumed that your private key cannot leave your hardware wallet because that's the point. And so I'll never mind the fact that it's sharded and then encrypted and then sent into three different spots, which is probably a very secure way to do this. The fact that it can do it at all is new information for a lot of people. That's the idea. That's the idea.

Starting point is 00:35:49 The idea of software being able to pull out your seed phrase, pull out your private keys is just like very concerning. Because that is the point of a hardware wallet you don't want. anyone to be able to pull out those private keys without, without you knowing about it. And so the idea is like, okay, well, if you can do it securely, what's stopping you from doing it insecurely? And so this is like, okay, you can chart it, encrypt it, but you can also just do it in plain text, and that is theoretically possible. The fact that it's theoretically possible is like the new information. So people on Twitter got very upset because this is like a perceived rug by ledger. And then also, I'm going to add on that ledger comms was not the most,

Starting point is 00:36:38 not the greatest about this. So here's a tweet that people really didn't like, which was, technically speaking, it is and always has been possible to write firmware that facilitates key extraction. You have always trusted ledger not to deploy firmware, whether you knew it or not. Technically the truth. But oof, as a PR statement, oof. Well, you say oof, but this is the, this is the actual truth. So just describing, like, you have to opt into the ledger recover service. Yeah. Like, of course, right? And so, but, and you also have to opt into a new upgrade of the ledger firmware. Which if you have ledger, a ledger device of any kind, you probably have already done not only once, but multiple times in the past to get security updates, to get new feature unlocks,

Starting point is 00:37:26 that sort of thing. So you have to do that. And lastly, you actually have to click a button on your ledger device give like in-person consent anytime a seed phrase of the private keys are actually leaving the hardware wallet so there's kind of like three steps here right and most people will not do the recover service right that's kind of a total trust ledger thing most people will also want to continue to upgrade their firmware all right but there is this like fallback of unless you physically put in your pin number in the ledger in interface and click the checkmark button, it will not send your seed phrase externally from the wallet. I think that's an important consideration year in this whole kind of mess. And yet still

Starting point is 00:38:15 people are uncomfortable with the idea that a firmware upgrade can maybe put in an errant message or something or could somehow... Well, the idea is that we are now, people are now realizing that we are one firmware upgrade away from a key extraction type of firmware. That's right. In the worst case scenario, you just approve any transaction. And because it was a malicious firmware upgrade from who knows where, that... A fake transaction. The next time you press the checkmark button that you send your private keys outbound.

Starting point is 00:38:49 So that's... People thought that that was not possible, but it turns out to be possible. And now, because we are in mob season on Twitter, Ledger has been absolutely mobbed by this. So this is now just talking about like the social drama. Should we go to this tweet, David? This is a video. And I actually, this, this Twitter user has to be blocked. So I have to open it in another process.

Starting point is 00:39:09 Which is hilarious. Hold on. Ooh, oh, that is a ledger being hit with a hammer. Ooh. Oh, it's broken. Wow, that's what it looks like inside. Oh, oh, it's in a fire pit now. It's going in a fire pit.

Starting point is 00:39:24 Oh, we got a blow torch. Oh, we got a guy blow torching a ledger. Oh, that thing is, that ledger is, uh. It's toasty. Oh, that ledger's dead. Why, buy seed phrase? Wow. Yeah.

Starting point is 00:39:39 Well done on the toast job, though. Yeah. Okay. I get it, Ryan. We can stop. I hope that guy backed up his seed phrase. Are people, you know, doing other things with this? This is the only one I saw about it.

Starting point is 00:39:53 And actually, I saw it LinkedIn, Discord or someone. Like, are people, like, putting it in blenders and running over it with their cars and, you know, the typical thing that people do that people do. about this at the end. Let's go to the next. We have to go through the Twitter mob part of this agenda, and then we'll go. All right. All right. So here's another tweet from Fubbar. Let's, uh, let's read this. Stop using ledger hardware wallets. Migrate away from them immediately. They've shown nothing but gross incompetence and wild misunderstanding of their own purpose and now they've publicly admitted intentionally backdoring their own proprietary hardware stop using ledger. Ooh, big words. Intentionally backdoring their proprietary hardware. That's interesting. Okay. Okay. Okay. So these,

Starting point is 00:40:30 these tweets. are in order from most extreme to more reasonable. So now we're starting to get into the more reasonable side. Here's Mooney Gupta, who said, Ledger just released a new update for NanoX that allows social recovery of your seed phrase. It encrypts your seed into three charts, sends it to different entities,

Starting point is 00:40:47 and there it can reconstruct your seed from your post ID verification. It's a horrendous idea. Do not enable this feature. Now that is a take that is talking about how you actually have the option to not do this, which, again, understand is only half the issue. But you can opt out of this. Let's go to the last take of this whole series,

Starting point is 00:41:06 which I think is the most reasonable take, which is Haseeb, which of all the people drawing a big hubbub on Twitter was actually helpful here. And so he goes, Yesterday I freaked out about the revelation that Ledger could spit out your private key with a firmware update. Yet I noticed the smartest people were not freaking out. Was I missing something?

Starting point is 00:41:22 I spent the evening educating myself, and now I'm in the Nevermindus Fine Camp. So then he continues and goes, my initial mental model is I thought Ledger Secure Enclave was like Apple Secure Enclave, box that has private key lines in which I can only sign things, but the keys can never leave the device. But it's not. Firmware can exfiltrate the private key. Oh God. And then he finishes and says, this take is actually nonsensical. This cannot be how it works because ledgers upgrade. Most

Starting point is 00:41:47 people's instincts are like, wait, why even, I don't want my hardware to wallet to ever upgrade, but ledgers upgrade to support evolving blockchains. Ethereum now requires BLS signatures. There's Salonah, near Aptos, all this new stuff, new signing algorithms, new key derivations, all this fanciness. Aside from Bitcoin, every single blockchain evolves. And so the point here is that the secure enclave in your ledger has always actually been software. It is a hardware wallet, but there is software inside that secure enclave. And the point that you said earlier, that everything actually doesn't necessarily fall back to the ledger hardware wallet, but it does fall back to you pressing approve. That is the actual remaining part of the ledger.

Starting point is 00:42:27 That is the hardware of you hitting that approve button, the secure enclave itself. And so this is the new reality that, by the way, has always been the reality. And if we as an industry were more informed about this, there wouldn't be this mob attack, I would say. That's the security posture you've always accepted when you've purchased a ledger device to hold your private keys. And some people are just now aware of that.

Starting point is 00:42:52 Right. Yes. And so, is this where we get into our takes? Okay. Are we ready for, so this has been like us doing it, trying to, do an objective job of reporting it. I'm ready to give me. Yeah, and I will say we talk to you, Charles, the chief security officer on bankless. I think if you're interested in hearing from at least the ledger side how this works and what went on, you can listen to that episode. We tried to be as

Starting point is 00:43:18 objective as possible. But I think people come to the roll-up for some takes too. And I would be interested in hearing your takes. What are your takes on this episode, David? My takes are Ledger did nothing wrong. It was the crypto industry's collective misunderstanding as to how a hardware wallet works. Here's all of the blame that I will place on Ledger. There is the narrative and the marketing that your private key cannot leave your hardware wallet. And there's two different ways to interpret that. It can't leave the hardware wallet because the firmware up to this point has not allowed it.

Starting point is 00:43:51 And then there's the it can't leave the hardware wallet because the hardware doesn't allow it. Maybe Ledger benefited by that gray area. and meant the software version but got the benefits of the hardware version. Maybe that's the risk, and that has been their comms mishap for years now of advertising, maybe being able to double dip and say like the hardware wallet will not allow your private keys to leave the wallet, but not saying that that's because of the software, the firmware that we upgrade. And so maybe that is their, that is their, that's their, that's their bad. But Ledger is frustrated because they've been here in cryptoplasty.

Starting point is 00:44:28 though, helping people go bankless this entire time, and now ledger is being canceled from what appears for them to be like no good reason. Like, you guys install firmware updates. The trust model is completely the same as it's always been. And y'all are just like learning about this for the first time. And so I think that coming to that conclusion has actually not been that hard. And so now my final take, Ryan, is I am actually disappointed in the people have taken the opportunity to jump into law mentality about this and cancel culture. quickly and make viral videos of them smashing their ledgers with a hammer and a blowtorch just because they know they're going to get a bunch of likes because it is currently in vogue

Starting point is 00:45:05 to cancel ledger so that is my set of takes geez that take is going to be pretty damn unpopular this week david i think i think the mob mentality is coming after me next come at me that's what i believe ledger did nothing wrong i think that um you say nothing wrong is your summary and yet you also said they did something wrong in their problems. They could have done something better, but I understand the error. This is where I come down on things. And I think I largely agree with what you said, but I want to put a fine point on what you said. So this is also from Fupbar. This is a tweet from Ledger from November 15th, 2022. Hi, from Ledger, the Ledger account. Your private keys never leave the Secure Element ship, which has never been hacked. The secure element is third party certified.

Starting point is 00:45:56 and is the same technology as used in passports and credit cards, a firmware update cannot extract the private keys from the secure element. A firmware update cannot extract the private keys from the secure element. Okay, here's what I'm saying, David. I think that is technically true, from what I understand, unless you hit the approve button. Okay? Yes.

Starting point is 00:46:18 So you could read this tweet and be like, yes. However, by not making it emphatically clear that you are still a nefarious firmware update from ledger away from ledger you're trusting them to not snatch your private keys i think that there's a little bit of an omission there or at least a little bit of a communication mishap so that's what i'll say the other thing i'll say david is i actually think um this could have happened no matter what they did from the calm side of things right It was just the time in the universe where we decided to take a week and completely torch a ledger. It's like, I get that.

Starting point is 00:47:00 Now, what they can do in terms of moving the industry forward is they can choose to open source their firmware, elements of their firmware. So let's take this. Yes, the reaction was probably extreme. Yes, there's a lot of people who didn't know. Yes, this was ledger's misunderstanding in their target market. and like, well, you just pissed off your core, like group through this comms. Yes, all of those things. And now how do we move forward?

Starting point is 00:47:28 I would be supportive and call on ledger to open source as much of their firmware as possible or to explain if there's pieces why they can't open source it, explain why. I think that could be the path forward because that's the best that we can really do. So what do I plan to do here? I'm not like going and torching my, you know, any ledger device I own. I plan to continue to use it, but I've also always had redundancy, different setups. Like, don't just depend on one provider, have ledger, get a treasurer if you want. Grid Plus is a fantastic hardware wallet.

Starting point is 00:48:04 We've had them on the podcast before. And I think they do a fantastic job on this. Still, even with grid, David, you're still one firmware update from being screwed by Grid Plus, all right? But if we have redundancy here, one thing that Grid Plus, I believe, is doing is, open sourcing, moving to open source more of their firmware in Q3. I think that's a positive step. It's good pressure in the industry to do it. I also think, let's zoom out, big picture, okay? Seed phrases do kind of suck. They kind of suck. And Ledger was trying to make that less sucky for Normies. That is a noble effort. We want more people on the bankless journey. We don't just

Starting point is 00:48:42 want to be like the crypto gold bugs here. And so we got smart contract wallets. We have MPC technology. That to me is the way for it. So I also think that Ledger made some mistakes, but I agree with you. It's not, I don't know why we're choosing this week to cancel Ledger. So hard. Like, just learn from it. And then use whatever security posture you prefer for your private keys. I've got to take for you, Ryan, and it actually ties these two stories together. These two stories being Ethereum's client, client, client design philosophy, and NOS is safe. And so Martin Coppulman says, whatever wallet you are using that actually holds your keys, it's never a bad idea to use at least two different ones and combine them into a safe. And so I retweet this and I say, this is the same philosophy as Ethereum's multi-client design strategy. If one client fails, you have redundancy with orthogonal alternatives. The overlapping risk space of multiple strategies becomes minuscule. Okay, so you got a ledger, you got a lattice, a grid plus lattice, until you also have a metamask. And you do a two of three. And if ledger rugs you, you it doesn't matter because you need grid plus and metamask to access your nosis safe.

Starting point is 00:49:52 Say metamask rugs. Well, you got your grid plus like two of three. And so this is the same security philosophy that is how Ethereum multi-client design works. But since we have smart contracts and multi-sigs, which is a completely different realm, we actually can completely mitigate any risk whatsoever. So once again, solved by smart contracts. I agree. And that's just a very sensible reaction.

Starting point is 00:50:17 in security posture. I will say, though. Oh, wait. I shouldn't burn my ledgers. No, you shouldn't. But, but even in that, David, like, smart contract risk on the safe wallet. Do you know what I mean? Like, you're not going to get out of risk in the space. And we're going west and crypto is risky. And we're on the frontier at this point. Like, come on. Yep. Yep. I think that the moment I'll start to get concerned about this is if I hear of a firmware update that's been pushed and someone gets maliciously hacked, right? Yes.

Starting point is 00:50:49 So far all of this has been hypothetical. I never install firmware updates first. I always let other people go first. That's a great security trick. Let others go first. Yeah, let others go first, right? All right, enough of that. So let's get to the SEC this week and more grilling of Gary Gensler, I guess.

Starting point is 00:51:06 This is big, though. Absolutely massive. This happened late last week. The U.S. Chamber of Commerce has just filed a brief in the Coinbase versus SEC case calling out the SEC for acting unlawfully in the digital asset space. This is the U.S. Chamber of Commerce, not the Chamber of Digital Commerce. The U.S. Chamber of Commerce represents all U.S. businesses in the United States. They have a massive presence in D.C.

Starting point is 00:51:33 Meta Lawman says, this is a big deal. He says the U.S. chamber is highly influential, and they represent companies across all industries, not just the U.S. and the brief opens with this. As it stands today, nobody knows for certain which digital assets, if any, are securities

Starting point is 00:51:51 under federal law. Could not have put it better ourselves on a weekly roll-up. I think this is a big vote of confidence for Coinbase in what they're asking for from the SEC. It continues and makes three big points.

Starting point is 00:52:06 Regulatory uncertainty is killing innovation in the U.S. The SEC is destabilizing the DECD, digital assets regulatory environment and the SEC is violating constitutional due process and fair notice rights. Basically, the Chamber is declaring the SEC actions are not just harmful policy. They are unlawful. They're not just bad. They're illegal, which is great. The court will give these arguments advanced by the U.S. Chamber of Commons serious attention. And like Ryan said, this is the

Starting point is 00:52:35 largest, most influential business organization in the U.S. has just declared that it stands with crypto represents the interest of more than three million businesses and organizations throughout the country from small businesses to global corporations. Dope. I love that. These are great words. Did you see, so David, this same week, the SEC just responded to Coinbase's petition. And you could call that petition we were talking about a week or two ago, where Coinbase was asking the court to require the SEC to respond just yes or no. A simple yes or no to whether it will undertake rulemaking for our industry. That's all they had to do was respond yes or no.

Starting point is 00:53:13 You know what they responded with, David? Oh, boy. You were going to tell me. 36 pages of legalese. I skim this. It just amounts to we don't have to if we don't want to. That is my non-legal summary of this thing. This is what Paul Graywall, Chief of Legal at Coinbase said.

Starting point is 00:53:32 Today, the SEC responded to Coinbase's petition, asking the court to require SEC to respond just yes or no. the SEC's answer, a resounding maybe. Resounding, go, fuck yourself. Basically. Sorry for the language. So, David, maybe that was why Gary Gensler was so defensive this week when asked at a financial conference whether the SEC has provided sufficient clarity to crypto. Here's what he said.

Starting point is 00:54:01 Okay, can you comment it all on the dispute with Coinbase about rules on crypto? And why doesn't the SEC want to publish rules for that market? Because, Tom, the rules have already been published. And to make it quite direct, this is a field that is been operating largely noncompliant. Our agency has put out rules about what it is to be in exchange, what it means to be a broker dealer, what it is means to be an advisor or custody assets, and how to register a security. is offering. Those rules are in existence and there's nothing about a new technology that makes it non- He goes on. I'm sick of hearing this, but basically Gary's saying rules are already clear. And again, on the back of this, he's doubling down on that. Well, the Chamber of Commerce

Starting point is 00:54:57 said that he's being illegal by doing that. I like that he's in the situation right now, David. Yeah, so here's Miles Jennings from A16C, lawyer at A16CZ. SACC, come in and register. Coinbase, we'd like to register. SEC, you're not allowed. Coinbase, why not? SEC, the rules are clear. Coinbase, the rules don't make sense. SEC, the rules are the rules.

Starting point is 00:55:16 Can they be adapted? Yes, but we don't like your industry. But you've adapted rules before. No, we haven't. You approved our IPO. No, we didn't. Yes, you did. We're going to sue you.

Starting point is 00:55:25 For what? Wouldn't you like to know? Yes. Too bad. You should have registered. But we would like to register. I bet you do. Can you tell us how?

Starting point is 00:55:33 No. That is exactly what happened. Wow. That's a really long tweet. Good for him. Yeah, that's very good, though. All right, David, what do we have coming up next? Meanwhile, while crypto's eating itself and Gary Gensler's hot seat gets even hotter,

Starting point is 00:55:48 Nike has built the most legit Web3 Metaverse platform ever. WorldCoin is coming to optimism. Sam Altman testified before Congress and urge a lot of makers to regulate AI. Bitcoin or Dogecoin is the same picture. So much to talk about. But first, I want me to talk about these fantastic sponsors that make this show possible, especially MetaMask, who's helping you learn about all the jargon that Ryan and I don't have time to explain on the podcast. Sorry about it. But if you want to go learn all that jargon, there's a link in

Starting point is 00:56:13 the show notes. So go check out Metamask Learn. Learning about crypto is hard. Until now, introducing Metamask Learn, an open educational platform about crypto, Web3, self-custody, wallet management, and all the other topics needed to onboard people into this crazy world of crypto. Metamask Learn is an interactive platform with each lesson offering a simulation for the task at hand, giving you actual practical experience for navigating Web3. The purpose of MetaMask Learn, is to teach people the basics of self-custody and wallet security in a safe environment. And while Metamask Learn always takes the time to define Web3 specific vocabulary, it is still a jargon-free experience for the Crypto-Curious user. Friendly, not scary.

Starting point is 00:56:53 Metamask Learn is available in 10 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 Metamasklearn to your guides to get onboarded into the world of Web 3. Mantle is a brand new high-performance Ethereum Layer 2 network, built differently from the

Starting point is 00:57:15 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.

Starting point is 00:57:25 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

Starting point is 00:57:36 and censorship on the network. And because Mantle implement multi-party computation nodes. Layer 1 settlement execution is shortened from seven days to as low as just one or two. Mantle is the first layer two built by a Dow and is backed by one of the biggest Dow treasuries in the world. Bit Dow. Mantle already has subcommunities from around Web3 onboarded to help the growth of Mantle like Game 7 for Web3 gaming or Edu Dow for the world of D-Side and by bit for TVL, liquidity, and onramps. Check out Mantle at mantel.com. Nike's dot swoosh platform is a brand new platform that Nike is rolling out to consumers.

Starting point is 00:58:16 Not for us. This is not for us. So don't judge it because it's not for us. And if you're not a Nike, if you're not a sneakerhead, this might not be for you. But it's a dot swoosh platform. Kind of, I think it's an allusion to dot-eath, but dot swoosh is the home of Nike virtual creations and community hub for dot swoosh members. So they are creating like kind of like loot boxes.

Starting point is 00:58:38 boxes of merch, virtual merch. So they have their OF1, Our Force, instead of Air Force, you know, Air Force Ones, but our Force, also OF1, collection of Nike virtual creations inside of an OF1 box. So OF1 collection starts with each OF1 box, comes in two forms,

Starting point is 00:58:56 classic remix or new wave. Classic Remix Mix boxes contains an Air Force One inspired by Air Force One collections from 1982 to 2006. Again, these are NFTs? Or are the real physical products?

Starting point is 00:59:08 These are, well, I mean, these are digital collectibles, actually. Yes. Virtual, though. Virtual, yes. Not sending a box with sneakers from my house. But I think if you are a sneakerhead who's collecting Air Force Ons from 1982 to 2006, you know exactly what they're talking about. The new wave box features a brand new next generation reaching Air Force One that takes inspiration

Starting point is 00:59:27 from 2007 to the present and even into the future. Scattered across both boxes are co-created Air Force One's from our year, your Force One winners. These are all, so this is like a digital scavenger hunt. collection for sneakerheads who like to collect. And not only that, but they have a swoosh ID, which secures your place in the dot swoosh community where you can meet members, collect virtual collections, get exclusive access to physical and virtual collections. And then you can also co-create with Nike.

Starting point is 00:59:59 And so what are collections, they are sneakers, apparel, accessories, other collectibles that you can use in games or other immersive experiences. Some Nike virtual creations will unlock benefits for you in the first. physical world, such as in real life products and exclusive events. Wow. Okay. So no mention of an NFD though. Yeah. Which is, which is kind of cool. And so you get a wallet, you will get a wallet. They won't call it a wallet. You will have your wallet custody by BitGo, which is fine for this use case. Don't cancel Nike. Jesus. And the thing is like you will buy these things with a credit card and you will buy digital assets with a credit card. Guess on what blockchain, Ryan?

Starting point is 01:00:38 It's not going to be on Ethereum. I know this gas rates are too high for this use case. Tell me. Polygon. On the Polygon blockchain. Where else would it be? I mean, they were getting the big ones here. It could have been flow.

Starting point is 01:00:52 It could have been flow. When I was looking at this, I was like, oh, is this going to be flow? Well, there you go. And the good news about Polygon is, of course, it has a future direction to become an Ethereum layer, too, as well. And you can take that asset and put it back on Ethereum if you want to. Speaking of layer 2s, David, what's happening in the optimism ecosystem? Optomism is getting its bedrock update.

Starting point is 01:01:15 So Bedrock is coming down on June 6th. Ooh, that's D-Day. Never mind. An upgrade that will require two to four hours of downtime for O.P. May net once upon the time I was a World War II history buff. Okay, so Bedrock will bring a 50% reduction in protocol fees. So optimism fees are getting cut in half. It's also going to make it easier to contribute to clients.

Starting point is 01:01:38 diversity, so the OP stack get in an upgrade, improve the security and resilience of the OME-OP-Mainet bridge, will increase the minimum diff between OPE-Magnet and Ethereum, that Ethereum equivalents that we know and love, and also sets the stage for the super chain to enable more and more O-P chains. So that world, that super chain, all those O.P chains, every time you hear the world, hey, this is an O-P chain or built on the O-P stack, it helps that thing become a little bit more composed. So this is the first major protocol to optimism to be voted on and approved by optimism's token house. Interestingly, this will require two to four hours of downtime for OP main net, which is actually, I think I haven't seen that before for a layer two, actually going down

Starting point is 01:02:21 to start back up again. I'm sure that's going to cause some drama when that day comes. And zooming out, this is Plenia speaking about, I think Ethereum's modular scalability strategy, A standard chain, one like Ethereum that's 1x, a fast chain, I would assume that's a monolithic chain like a Salana, 10x. Fractal scaling, 10,000x. This is why fast chains have only offered variations on the apps described nine years ago in the Ethereum white paper. To explore the next frontier at scale, on-chain games, we need fractal scaling with thousands of chains. This is kind of alluding to what optimism is doing with Bedrock and the idea of layer three types of chains. Yeah. Yeah, I think the whole idea of like, hey, we're going to scale by juicing up our monolithic chain.

Starting point is 01:03:07 In the future, that will just be an anachronism. As in it'll just be like, hey, remember when like the crypto industry tried to scale with layer one chains that were juiced? Like eventually, we're watching layer two's get faster. We're watching the super chain gets composed. And so the super chain, fractal scaling, hyper scaling, these are all the same terms and the same thing. Yeah. And so like we're going to watch and it's just going to blow people's minds about how fast these things can actually get. It's just going to take some more time to get there. David, how come we've never talked about this? I didn't know you were a World War II buff man. Oh, yeah. Oh, yeah, yeah, yeah.

Starting point is 01:03:38 So am I. Yeah, oh, I know. I have read so many freaking books about World War II. What's your favorite World War II book? There's a book called D-Day. Yeah, I remember that one. It's been a while. It's been like 10 years since I've been sort of like deep into it.

Starting point is 01:03:54 Would you compare our collections? Mine is Band of Brothers. History podcast? You down? You do like a World War II history podcast. You do a history podcast. Forget the food thing. I'll do a food podcast.

Starting point is 01:04:06 It'll be great. All right. Tell me about WorldCoin. What are they doing? It's coming to Optimism Mainnet. So actually not an OP stack. Although I think they have expressed plans to make an OP sack in the future.

Starting point is 01:04:18 For now, WorldCoy. What do you mean by that? They're using optimism. Optimism code. World Coin. Yes. And so they will use the OP mainnet for WorldCoin, the coin.

Starting point is 01:04:29 I think they're, also might use it for World ID. Eventually, we did a podcast. I did a podcast. Actually, you weren't there with Sam Altman and Alex Blania from WorldCoin about the WorldCoin Vision. I'm seeing a lot of WorldCoin chatter start to heat up. So I think this is going to be a reoccurring conversation throughout the Twitter sphere.

Starting point is 01:04:46 Eventually, they will have their own OP stack chain. For now, they are putting their infrastructure on OP mainnet. More Sam Altman in this agenda, too. Before we get there, though, Lido, they just released withdrawals, I believe. That's right. Lido v2 enabled withdrawals, a bunch of other upgrades as well, along with a router. I couldn't find very many stats. I think there were some big withdrawals from Lido, but that's what you would expect.

Starting point is 01:05:09 And they were very temporary and very short-lived. The tug-of-war in the side of the smaller microcosm of Lido is TBD. I think Lido's going to be doing just fine. You know what's really cool, too, is the increasing amount of PayPal and Venmo support, at least in the U.S. for crypto. This is integration of PayPal and Metamask where you can just buy in Metamask in your Metamask wallet, you can just buy crypto using PayPal. So you select PayPal, you choose the amounts, you tap it, and you've just purchased some

Starting point is 01:05:42 eth. And this is also cool. You can also buy and send crypto from PayPal. So you buy your crypto and PayPal and then send it to Metamask. This is very big. This goes into the DeFi Mullet thesis that we've been talking about so long, which is like, man, millions, hundreds of millions of users of Venmo and PayPal across the world, and all of them now have a way to onboard directly to a bankless wallet in something like

Starting point is 01:06:09 MetaMask. I just think that is absolutely massive and worth celebrating. By the way, I think we're in touch with their team. Yeah, we're talking to them today about a future podcast episode. Yeah, we want to see what they're up to. The podcast episode is going to be so easy. Like, hey, what's your guys' is defy myel it look like? Do you think they're going to understand that question?

Starting point is 01:06:28 Well, that'll be the screener. They don't come on the podcast and let's understand that question. Okay, so here's something that happened pretty cool. This is a tweet from Zach XPT. He tweeted out, wow, both pump and dump mean coins, Nyan meme coin and grumping cat coin were sent cease and desist letters on chain. So a cease and desist letter was turned into a JPEG, an NFT, and sent them to the deployer.

Starting point is 01:06:53 address for these pump and dump coins from law firms. Does that work? Does that work? Does that count as a cease and desist letter? I don't know. Have you received that letter if it's on chain and posted publicly? I don't. It's on the blockchain, bro.

Starting point is 01:07:09 They do call it a wallet. I mean, I send it to your wallet. I send it to your, like, address. I send it to your vault. Is this legally valid? It's in your custody. Well, yeah, but I get spam tokens sent to me all the time. Doesn't mean I look at those.

Starting point is 01:07:23 There's a difference when like no one tweets at me about my spam tokens. They definitely got tweeted about this because this is what this tweet is. If I put a cease and desist in your mailbox and I leave in your mailbox, but you never open your mailbox, have you received it or not? That's a big matter of question. I think it's equivalent. So the cease and desist letter starts with May 17th, 2023, Kia Carmen, attorney at law to the persons with wallet addresses listed below and all collectors.

Starting point is 01:07:49 attention 0x d ae 2d95 blah blah blah blah blah blah so like attention wallet owner that's funny that's funny okay are you ready for this one ryan i'm going to carry you through this yeah what's this say hello to drc20s tokens on dogecoin so dogecoin daily transaction volume climbed to a lifetime peak after the launch of drc 20 token standard a new mechanism that allows the issuance of tokens on the dogecoin blockchain six 150,000 transaction on Dogecoin on Sunday, briefly causing both Bitcoin and light coin transactions before following back down. And so, Ryan, this is hilarious because the next part of this story is a bunch of Doge fundamentalists not being happy about that. Yes. There are Doge maximalists

Starting point is 01:08:36 out there? Yeah. So not, despite this increased uses of Dogecoin, people in the Dogecoin community have said that this has led to network congestion that moves away Dogecoin's aim of being used is an everyday currency. The DRC20 Dogecoin community should stop this shameless hype, Rope one Dogecoin community member on Twitter. Everyone should probably focus on the transactional currency use case at another. High fees and network congestion are valid concerns for any blockchain that may lead the network to becoming expensive, slow and for everyday users,

Starting point is 01:09:06 dampening adoption plans. Does this sound familiar, Ryan? Oh my God, that's amazing. Are these people serious, though? I thought Dogecoin was always a parody. Is this actually a serious crypto-tri? I don't know how to answer that question. And why DRC 20s?

Starting point is 01:09:25 I mean, maybe the better question is why not? Of course, there were going to be DRC 20s. So we have an ordinal's on top of Doge, and now we have two camps inside of Doge. Get your stupid pumping dump tokens out of my extremely serious and legitimate global currency. That's the Will Smith slap to the face right there. Okay, in more serious news,

Starting point is 01:09:48 Micah out of the EU has passed. Excuse me. They say Mika. Mika has passed. We saw that's coming, right? Yeah. My summary of this is we did an episode on it with a bunch of panelists who knew a lot more about it than you and I do. It's a B-minus, they say. And here's a take from one of the panelists that I'll quote. The EU never knows when to stop. This is the big but part. It's like we got some good B-minus legislation. That's good. But the EU never knows when to stop. Micah may be a B-minus, but But the AMLR and Data Act and DAC8 is with the council, all are bad for crypto, and there's even more coming after that. So before anyone throws it, we're moving to Europe party. They need to consider that things never get better in the EU. The regulation only gets heavier. So that is the fear on the back of this. And before you start celebrating, let's all move to Europe because it's better than the U.S.

Starting point is 01:10:42 It is right now. The U.S. doesn't have any clarity on crypto. just look in the pipeline of other things that might be coming down because I don't think the EU is done. That's the, what's the opposite of a silver lining? It's the opposite of a silver lining, all right? Lead lining. Yeah, lead lining. Speaking of lead linings, Doe Kwan is set to be released after Montenegro Court accepts a 436K bail in local press.

Starting point is 01:11:09 Doe Kwan's getting out, David. Yeah. You guys going to hang? Yeah, so I'm not too far away from, from, from, So the capital of Montenegro, Podgorica, God, that's taking me forever to learn how to pronounce, is where he is. That is about an hour away from where I am.

Starting point is 01:11:24 So under conditions of Bail Kwan and Terra, Executive Han, John, John will be under surveillance and prohibited from leaving their apartment. Yeah. You setting up the interview? Would you interview him? Yeah, sure, I'd interview him. Just be like, why'd you do this? Like, how has it been?

Starting point is 01:11:41 Is that the question I would lead with? is like, I think my first question is, do you feel guilt? Do you feel guilt? Yeah, are you sorry? Yeah, are you sorry? But maybe that's, maybe that's too moralistic. Maybe she's just like, in order to get him to open up, you have to like have the question of like, reflect on the last year and just leave it so open ended. Right. Yeah. So he can sort of, what do you want people to? What do you want people to hear? Yeah. Because you can't corner him. He's already cornered. Yeah.

Starting point is 01:12:13 Anyway, that's not going to happen. But let's talk about regulation of a different type that we don't usually talk about. But while they're talking about crypto regulation in the U.S., really AI regulation is heating up. So what happened this week? So Sam Altman had to testify before Congress. And so we've seen this before. We've seen Web 2 employees. We've seen Zuckerberg.

Starting point is 01:12:33 We've seen SBF testify before Congress. Sam Altman's turn. And so he actually urged lawmakers to regulate AI in specific ways. So he testified before the Senate Judiciary Subcommittee on Privacy, Technology, and the Law. The hearing touched on the risks that generative AI could pose to society, how it could affect the jobs markets, and why regulations from governments might be needed. There's a useful clip, I think, that we should play. And last, I don't know if I'm allowed to do this, but I will note that Sam's worst fear, I do not think is employment. And he never told us what his worst fear actually is.

Starting point is 01:13:06 And I think it's germane to find out. My worst fears are that we cause significant. we, the field, the technology, the industry caused significant harm to the world. I think that could happen in a lot of different ways. It's why we started the company. It's a big part of why I'm here today and why we've been here in the past

Starting point is 01:13:23 and we've been able to spend some time with you. I think if this technology goes wrong, it can go quite wrong, and we want to be vocal about that. We want to work with the government to prevent that from happening, but we try to be very clear-eyed about what the downside case is

Starting point is 01:13:39 and the work that we have to do to mitigate that. Interesting response. Sam Malman, of course, he is the CEO of OpenAAI, the creators of ChatGBT, GBT. What's your take on that response? So I did a podcast with him on last Sunday, so six days ago about WorldCoin, so different subject. Prior to this, I really, I think I had an internal bias.

Starting point is 01:14:01 I'm very aware of my biases, I'd like to say. I had an internal bias if I really wanted to not like Sam Altman. Why? Just like kind of reptile, tech bro reptiles. A little bit of that. A little bit of, we came out of the L. Easer podcast being like, oh man, this is going to take us over the world. And then it's irresponsible for other CEOs of AI companies who are falling victim to the Moloch trap, who are accelerating this thing. So they are being irresponsible. And so, and then like I listened to him answer Lex Friedman's question about AI alignment. And I thought that he just, man, he just deflected the hell out of that one. He asked questions in return. It was like, well, what do you think?

Starting point is 01:14:42 And so I'm like, man, Sam, bro, look what's about to happen here? And lately, I have seen him, in addition to the podcast and kind of seeing the human there, I think I've seen him to tackle this alignment problem head on. And I think the CEO leaders of these AI companies are also going to be the very likely solvers of AI alignment, if anyone. And so I think I'm cautiously optimistic that Sam Altman is not just a good guy, but a potential, God, I hate to say this word, hero in the fight of AI alignment. That is my optimistic rosy colored glasses scenario. Plenty of other scenarios can play out, but I am hoping the best in Sam Altman, and I'm starting to be okay with depositing some trust there.

Starting point is 01:15:33 I think his name will be front and center, but will become a household name. If it hasn't already, that's how important this is. It always makes me uncomfortable, David, to be put in the situation of having to trust heroes and having to trust people. I will say that. And I think it's probably the case

Starting point is 01:15:52 that we may never know what Sam Altman's intentions actually are. We'll have to judge it by his actions. I mean, there is a more nefarious case you could make, which is just, yeah, I'm going to, put on this face in front of Congress and regulators say come in and regulate me in order to like establish and entrench my own sort of power so I can help shape the regulations like um there's like remember SBF was doing a little bit of this do you know what I mean you just don't really know is the thing and I and he could be an incredible person I have no idea he could also be

Starting point is 01:16:26 an SBF we also have no idea and it's just I hate that we have to trust but I don't think we do I think we need to find ways to sort of verify and find other ways rather than relying on the human beings in this ecosystem, kind of put AI in the right direction. But interesting nonetheless, more to come, I'm sure, on that. David, what do we got coming up next? Coming up next, we got questions from the nation. We've got three of them this week. I think there's some great questions. And then some pictures. We're going to look at some pictures because that is going to be both some takes of the weeks and what Brian and I are excited about. And there is also a moment of Zen for the YouTube people. It is a video only moment. moment of Zen. It is the most impressive of AI artificial generation of image video. Oh my God, it's so cool. You got to go watch it because it's actually really related to what Sam Altwin was

Starting point is 01:17:12 testifying about. Anyways, all of that's coming up and more as soon as we talk to some of these fantastic sponsors that make this show possible. Hiring people worldwide, paying them in crypto, providing them access to benefits. It all is so complex. But it doesn't have to be. Complying with labor laws, payroll rules, tax obligations and crypto regulations in every country that you employ someone is difficult. consuming manual and costly, and it's drawing more and more attention from regulators and governments. But there is good news. Toku is here. Toku is the first employment and compensation platform for the crypto industry that makes this easy. Toku helps you hire employees or contractors and pay them in

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Starting point is 01:19:19 Would that be possible, David? So not only is that possible, but that is an explicit strategy that a number of startups are going after right now. Actually, this is one of the benefits that I think the bankless ventures has because we actually get to learn more about what's going on in the frontier and be educated about the frontier and be able to relay that information here on the podcast. There is a very decently saturated market of people that are trying to connect the circuit between transaction origination and MEV back to transaction origination. So like transaction from the wallet, if you do a defy thing, it picks up by an MEV searcher bot, which makes another transaction which goes into a bundler bot, which goes into a block builder, which goes into a block proposer, Eath validator who ultimately connects the MEV, but then there's a possible way where wallets

Starting point is 01:20:05 who ultimately are the originators of transactions, aka the source of MEV, can be paid for their deal order flow, which we generally think of as toxic. But if that deal order payment for deal order flow goes back to the transactors for transacting in the wallet, there is a way where we can connect MEV to people who are making transactions as, yes, a gas refund. So if you're transaction produces MEV, your wallet might pay for that in some particular way. And so that is a thing that is being built by a handful of startups in this world. You know how when you use a credit card, you get like points, hotel points or gas points or discounts back. It's same same, except this could be even better. Yeah. I bet that it could be all sort, it could be Eith,

Starting point is 01:20:51 but there, yes, there could be all sorts of different models on top of this that wallet's built. And the, the cool thing is, crypto can pay you to. spend and to transfer to use crypto transactions? I think that's definitely coming. All right, here's a second question here about Bitcoin. Bitcoin has a history of legitimate and illegitimate hard forks. The most important being Bitcoin Cash. Whoa, we remember that. Whose central point was the network's block size. Bitcoin won that fight versus Bitcoin Cash based on choosing decentralization's North Star keeping one megabyte block size. The question is, if a hard fork is on the menu and thinking that Bitcoin's North Star is decentralization, which option is

Starting point is 01:21:31 objectively more decentralized, a chain with or without ordnals? So I guess this is the idea, David, a questioning of whether Bitcoin might fork into two different options, one chain with ordinals and one chain without ordnals, and the questioner is asking which is objectively more decentralized. Can you imagine this future and help us make sense of this question from Abram C.R. Yeah. So my podcast with Eric Wall, who actually is coming on next week with Nick Carter, actually, so we're actually going to talk about some of these things. Eric Wall and Nick Carter next week, I'm excited about that one.

Starting point is 01:22:04 He made the very strong argument, which I'm on board with, that the Ordinals blockchain is the more decentralized blockchain. But I kind of want to answer a slightly different question, which is, is Bitcoin going to fork? Because there is going, there's a growing civil war happening, a growing division in the tribes of Bitcoin. You have the non-ordinals and ordinalers and then the ordinalers. And so that is a new tribe.

Starting point is 01:22:32 The new internal tribes of Bitcoin and now they are fighting for power. And the last time this happened was the Bitcoin Cash versus Bitcoin camp. And so does this create a division strong enough to fight over a fork of Bitcoin? And my answer to that is I don't think so. I think this is fighting over social power. Who is at the helm of this ship? Can't really steal the ship because it's Bitcoin. but is who is the bigger bitcoiner and who are the bigger bitconers who are the bigger better

Starting point is 01:22:57 bitcoins and right now like um bitcoin media which runs the bitcoin 2023 conference which is going on right now that that company that's actually it's actually more or less the bankless of of or yeah the bankless of bitcoin they are similar in vibe uh very very thesis driven perhaps very bias i would call them very biased they are the bitcoin fundamentalists of the bitcoin camp and they are starting to make ordinal's content in the same way that you and I enjoy smart contracts and tokens because they are interesting

Starting point is 01:23:28 and they're good to make content about and therefore benefits the bankless business model because our business model's content. Bitcoin Media is also finding ordinals as a way to produce content because it's interesting and gets reads and clicks and likes and all that kind of stuff.

Starting point is 01:23:43 And also all of the people that I know and trust like Eric Wall and Nick Carter are also like Ordinals, good. And so I think, think that's going to win, David. That's going to win in the social areas, my prediction. 100%. It's more like people like Ponzi's. We saw this in Bitcoin last week. And so I think the power, the pendulum power has shifted towards the ordinal of people. Yeah, but you know what they're going to want, David? They're really going to want those Ponzi's to prop up their bags. Because

Starting point is 01:24:07 anything a Bitcoiners like is like number go up for Bitcoin. That's funny. It's because that's a mechanism that Ethereum has that Bitcoin just doesn't, which is like, okay, you have a Ponzi. That's sort of annoying because it's making my transaction fees high. But then we go and we look at ultrasound dot money and we're like, oh, look at all the that was burnt. And then eth holders are happy again. Well, Bitcoin ordinalers, maybe call them rather than small blockers. Maybe they're just useful blockers. Maybe that's the tried. Smart blockers. Smart blockers there. We got small blockers versus smart blockers. The smart blockers of the Bitcoin community don't get that benefit. It's just not as fulfilling, I guess.

Starting point is 01:24:49 if you want number to go up on big money. But it does pay for security, which is, I mean, marginally, but not zero. The public good. Yeah. Okay. Yeah. All right. Let's get to some takes, David.

Starting point is 01:24:59 Here's the first one from you. This looks like a picture. And I think you're wearing the T-shirt. Tell me about this. Oh, yeah. Oh, I haven't talked about this yet. Look at the T-shirt. I got a T-shirt.

Starting point is 01:25:08 David's shirt. T-Dor-Cash symbol. I helped violate international sanctions and all I got was this lousy T-shirt. Okay. So this T-shirt is nothing new under the sun for the people that are inside of the conference circuit, but I haven't gotten one yet. And I would like to say, not only have I violated international sanctions by receiving 0.1 ether from the dusting attack, I also sued the Department of Treasury over it. And so this, this t-shirt fits extra well. Yeah.

Starting point is 01:25:32 You're going to be wearing that to the congressional hearing, or I guess in the Supreme Court case. Yeah. And so like Amin Soleimani, who like made this t-shirt, gave me this t-shirt. And so I thought, I thought, like, oh, of course I'm going to take a picture with Amin. But then I was reflecting on this picture. And some people have probably mentioned me, mentioned Amin Slamani. I mentioned him on a handful of podcasts. But I wrote this longer tweet, which I think I kind of solidifies what this picture means to me. And so I say, this might look like a picture, but to me it's so much more. Amin has been a personal hero and mentor to me throughout my Ethereum journey. Without Amin, Ethereum would be all rainbows and unicorns, but no claws or teeth.

Starting point is 01:26:11 Amin taught me the importance of thinking adversarially, what's that stake? and what's at sake if we do not think that way? He was also my first big guest on my podcast before bankless, P.O.B. Crypto, back when I was absolutely no one. And I follow up and say, I would not have the balls to sue the Department of Treasury without the knowledge and leadership that, I mean, has shown this industry. So thank you, I mean, for the lousy t-shirt.

Starting point is 01:26:33 I appreciate that. That's really cool, David. Yeah, it's heroes in real life here. Here's a take from ZeroX designer. onboarding the next billion users with words, how the term wallet is psychologically limiting Web3's growth potential, the case for abandoning it. Killing the idea of wallet, David,

Starting point is 01:26:54 rather than connect wallet, just connect. I don't know if I totally agree with it, but Xerox designer bringing up some interesting points that maybe the thing we should be calling this thing, the mental model we should be using, is more like an account. Because short's a wallet in some cases, but usually when we're talking about finance, right?

Starting point is 01:27:13 Sometimes, if you go to the social case, it's a profile or it's an identity. If you go on the art case, not really stuffing an art piece in your wallet, are you? It's more like adding it to your collection. If you're in the gaming world, this account is actually like inventory. If your music, it's library. And so maybe we should start reframing this away from wallet and making it more generic, calling this connect, calling this an account instead. An interesting point, I think at least. Yeah, I think that makes sense.

Starting point is 01:27:42 because we always talk about like, oh, the future of the internet is like sign in with Ethereum. So like Facebook account, Spotify account, all of these things that there's a sign in button. It's just an account. And the idea is that Web 3 just replaces Web 2. So that makes sense to me. David, what do you bullish on this week, my friend? I got another picture. Ryan, it's us.

Starting point is 01:28:02 This is a picture of us at Permissionless. Do you know when? This was the night we had our party, right? Yeah, the Bankless party at Permissionless. Also, one year ago as of today. No way. That was a year ago as of today. Wow. The first time we met was at this conference. And the only time I will add. Haven't seen you since. It's been a year since I've seen you. Were you that like when when we did that, we're like, oh, I might not like this guy in real life. What if he's just like, what if, I don't know, he smells bad? What if the vibes are off?

Starting point is 01:28:33 This sounds like this. And so there, so we, you came up to when we met for the first time at the Airbnb. It was like five minutes until we had our company meeting. And then we, open up the door, gave you a hug. And then I was like, uh, now what? Now what? Do we continue the podcast? Yeah. Yeah. And I was like, oh, thank God we had the meeting to like kind of get the ball rolling.

Starting point is 01:28:59 Talk outside of this format, outside of the screen format. Yeah. That's funny. I think the first meeting, too, we had, I had like the laptop in front of me too. And I feel like I was like talking to you through the laptop as well. well. But you were also like right next to me as well. Yeah, you couldn't look away from the laptop.

Starting point is 01:29:17 So I guess I'm bullish on another year. Yeah. I'll see you in September. I'll see you in September, man. September at permissionless. But the other thing I'm bullish on, slightly related, is we're actually going to have this Twitter space with the Blockworks guys, the other dads, by the way, for the bankless listeners out there for who don't know.

Starting point is 01:29:35 Internally to Bankless, the employees call me and Ryan dads. And so the Blockworks founders, Jason and Mike. are also called dads, apparently. And so we're having a dads and dads chat ahead of permission list, just media company and Web3 to Media Company and Web 3. That is a Twitter space that's happening on May 31st, I think at, when is that, 12 p.m. Eastern time. And so if you want to see just two groups of founders talk about media companies in Web 3,

Starting point is 01:30:01 we are bringing questions for Jason and Mike, and they are bringing questions for us. No way. I didn't know we were doing that. Yeah, we're doing that. Yeah, yeah, yeah. So that's going to be a fun time. It's going to be an hour of just like banter and stuff. like that. I like the blockwork team. Yeah. All right. Ryan, where do you both?

Starting point is 01:30:15 So before I answer that question, let me just say, this week felt really exhausting. Like, I guess it may be emotionally draining. So bankless HQ, our Twitter account, put out a tweet headline saying Ethereum broke again and then went through a thread. And the thread actually had some really good content. Like, I think it was largely accurate. The headline was off. The headline was a bit of hyperbole, I think. I think when our editors published it, they were thinking like, oh, yes, maybe it's satirical, maybe it's just kind of capturing attention so people will read the rest of the thread. An innocent mistake in my mind, right? And this happened on a Friday afternoon, and I was kind of logged off. I was enjoying Mother's Day, my parents

Starting point is 01:31:05 were in town, that sort of thing. And David, when I locked back on on like Sunday, My God, it felt like the entire, like, we're used to getting attacked in all sorts of ways. But this was a little bit different because it felt like in tribe. A lot of people we thought were like part of the, you know, the bankless community that we've contributed a lot to. We're just lighting us up and torching bankless for doing this, saying that we've transformed into like click-click bait media. And yeah, it just got really negative. And I've been through these negative things before, as I know you have. I don't know why.

Starting point is 01:31:41 This one just hit me. Maybe it was kind of like apathy market, board market, kind of hit me at the wrong time, like last straw type of thing. I don't know what it was. We tried to apologize, but when you're being like sort of mob attacked like this,

Starting point is 01:31:56 you know, sometimes there's nothing you can do. There's nothing you can do. Anyway, so I posted this and I said, maybe it's the bird app talking, but I'm feeling sad right now. I described this as a low point. I was just feeling that way when I posted this.

Starting point is 01:32:10 And this is a totally self-indulgent, like, venter type of tweet. You're allowed. These are valid. The takeaway was, like, is that a valid use of Twitter? The takeaway for me was, like, why I was sad was because a bear market

Starting point is 01:32:23 needs to be time where the crypto community bands together and fights common enemies. Like, we got them. Gary Gensler and crew. Like, we got all these common enemies. We build up. We support each other. So why are we so determined to eat our own?

Starting point is 01:32:35 And I said, guys, I don't know how we can expect to solve this coordination thing if our friend enemy barometer stays max dial to mercurial and unforgiving. This isn't about bankless. This is about all the good ones who've been burnt out by the negativity and pitchforking in crypto. Anyway, I tweeted this, a total vent tweet. And David, the reaction from, I think, like, the silent majority community of bankless listeners was just so powerful.

Starting point is 01:32:59 Like, okay, so I know the reason you do this, because it's the same reason I do this. the way my kind of energy gets filled up is when I hear from the community, like when I know that we put out a piece of content that really helps someone, learn something that means something to them, that kind of like educates them, that benefits the world. That's why I do this, right? If it starts to feel like the content we put out is just not doing that, it's totally energy depleting.

Starting point is 01:33:32 Or if it starts to feel like that the content, that we put out is like harming people or like causing negative value to people, that's when I'm just like, why am I doing this in the first place? Anyway, the reaction on the back of this was just stuff like this. This is d'artinian.eath. You guys changed my life. Thank you. Don't listen to the haters. You gents have been inspiring me since November 2020 to be bankless. I've been traveling the world for over a year because of y'all. The world needs you and your channel. You guys represent passion, honesty, intellect, and honor with the Web3 space. You're the cornerstone to this foundation, and we need y'all to know it.

Starting point is 01:34:08 And then you post this picture of himself. In Machu Picchu. We're in a bankless shirt. This is so awesome. Anyway, it's just like, I feel like even the segment is somewhat self-indulgent, but let me just say, as a content creator, like, this is the type of stuff that gets me excited about creating more content and doing more. you know, like this kind of stuff.

Starting point is 01:34:33 And it wasn't just this response. There's a ton of responses. My DMs, tweets, all sorts of things. And I guess maybe more broadly, I want people to know if you're in crypto, you're probably engaging in social media, right? Like, it maximizes for toxicity sometimes. It maximizes for outrage. And they say this all the time, but like Twitter's not real life.

Starting point is 01:34:55 Right. And yeah, and I guess I just felt that this week. And it's so easy to get caught in these bubbles of, of social media kind of silos where you lose sight of that. But, yeah, Twitter's not real life. So what am I bullish on? I'm bullish on the bankless community. I'm bullish that people continue to listen to this episode.

Starting point is 01:35:14 I think we're doing an okay job. And I appreciate everyone who's tuned in to this point. I think this last line that he wrote, d'artagnan.a, you've inspired me to be a builder, and I humbly have been grinding in the background as a pioneer. like y'all helping to create the foundation of our new digital economy. I think the main reason why I do this, Ryan, is that Ethereum, the idea of Ethereum, the idea of permissionless technology, sovereign individual technology came to me in a time

Starting point is 01:35:48 where I kind of needed it most in my life. I found Ethereum when I was in a dark spot. And it allowed me to distract myself. And then it allowed me to build a platform for myself. and then it allowed me to see the world of self-actualization and agency. And I think the subtext of bankless has always been something like this. And when I see the silent majority of builders out there who listen to bankless and follow us along on this journey, who have used bankless to see in Ethereum, the thing that I saw and that we see in Ethereum, as scaffolding for self-actualization in the world, this is like, oh, yeah, I'll take the hate every single day of the world.

Starting point is 01:36:29 it. It's worth it. 100%. That's cool. I think you said it even better than me. Guys, so we appreciate you. Thank you all bankless listeners. The silent ones. We appreciate you guys. David, meme of the week. What are we looking at this week? So this is the, I prefer the real blank, meme for an app. Mean foreignat. And it's the first one, Doge. And then the guy says, I prefer the real shit coin. And then it's Pepe. And then he goes, I prefer the real shit coin. And then it's the dollar. And then the guy goes, perfection. I've manually added one more layer, which is the real actual shit coin is this one trillion dollar coin. So if the dollar's a shit coin, the one trillion dollar coin is a trillion times more shitty.

Starting point is 01:37:12 That hasn't been minted yet, but the moment it is. Wait for it. Yeah. Wow. All right. Kristen disclaimers, of course, as weird as the internet is, crypto is always weirder. And it's more risky. You could lose what you put in, but we are headed west.

Starting point is 01:37:24 This is the frontier. It's not for everyone. But we're glad you're with us on the bankless journey. Thanks a lot.

Bankless - ROLLUP: Ledger Recovery Concerns | Ethereum Finality Issues

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