Bankless - ROLLUP: OpenSea Arrest | Optimism OP Airdrop | Kanye West NFTs | OpenSea Arrest | Solana Halted | ETH 2.0 Merge | Velodrome

Starting point is 00:00:00 Yet we persevere nonetheless through the beer, the, no. The beer market? Bankless Nation, it is the last week of May. David, what time is it? It's the Friday, Bankless weekly roll-up time, Ryan, where we cover the entire news in crypto, which is always an ambitious endeavor, yet we persevere, nonetheless, through the beer, the, no.

Starting point is 00:00:22 The beer market? No, I was going to say bear market, but then I remember that it's actually a build market, and it always will be a build market. And so, yeah, we're persevering, Ryan. What a great intro, David. Guys, we come out with these every Friday. This is the fastest way to get your fix in crypto, get your ingestion on what's going

Starting point is 00:00:44 on in the markets, the releases, the news, the price action. We covered all here. Remember, grab your morning coffee. Enjoy this with us because it comes out every Friday morning. David, we got some hot topics this week. What are we going to cover? Yeah, some stuff happened this week, Ryan, and we're going to talk about it because that's what we do every Friday.

Starting point is 00:01:00 the optimism token is live and trading and that's what gets everyone super excited so of course is what we're going to talk about did you get your op tokens did you get your op tokens friend i did as many as i could find i'm still scouring wallets i still have a couple extra wallace to check yeah so we got the metrics comparable to the uni airdrop in size so we're going to compare the optimism airdrop to previous air drops as well as some other air drops that have come hot on the heels of optimism So there's not only the optimism token eardrop to check. There's another one which we're going to talk about. After that, after we get done riding the highs of the optimism token, we're going to ride some lows of a former OpenC employee who got arrested for insider trading.

Starting point is 00:01:44 This is the same story that came out like months and months and months ago, but this individual actually got rested and faces up to a maximum of 20 years in jail, which is ridiculous. Yeah, what's your quick take on that one, Ryan? Well, you know what? I'm going to tease my take, okay? So you'll have to listen to my take midway through the roll-up to hear what I think about this issue. So I'm not, no spoilers.

Starting point is 00:02:10 All right, David. We're also going to talk about the merge update. Are we there yet? Is everyone in the backseat of the car that Justin Drake and Vitalik are driving, asking, are we there yet, guys? When are we going to get the merge? Is it coming in August?

Starting point is 00:02:22 Is it coming in September? We're going to talk about that to also Kanye West doing some trademark stuff with NFTs. Kanye West has entered the chat. Yeah, he's coming. As always, make sure you like or subscribe to this. Of course, if you're watching on YouTube, make sure you subscribe, hit that like button.

Starting point is 00:02:39 If you're listening on the podcast, thank you for doing that as well. Rate and review. Don't forget to do that, whether it's Spotify, Apple, wherever you listen to your podcast, leave those ratings and reviews. Ideally, like five stars, you know, as high as you want to get bankless,

Starting point is 00:02:53 but I feel like, you know, we put these on every Friday, so we deserve something. We deserve at least above four. At least above four. There's only one option in above four. There you go. All right, guys, before we get in,

Starting point is 00:03:06 wanted to tell you a little bit about our friends at MetaMask. Of course, everybody uses the MetaMask wallet. I use this on a daily basis, right? Just used it to claim my OP AirDrop tokens. But did you know, David, this is a button I hadn't seen very often

Starting point is 00:03:22 in MetaMask just because I'm doing other things. But there is a big blue buy button in the middle of MetaMask. where you can actually refill your wallet with ETH, with any crypto asset you so desire. It's a much faster way to get crypto directly into your Metamask wallet because you don't have to do the thing where you've got to connect your bank account to an exchange like Coinbase and then transfer all of that back to Metamask. That's like a three, four step process.

Starting point is 00:03:50 And it gets really costly. Once you go to the ACH transfer, it takes days. and then you like do the coin-based exchange and then by the time you're in Meta-Mask you didn't even know why you wanted the ETH in the wallet in the first place. So this is a handy buy button. I'm going to click this here.

Starting point is 00:04:06 You can use Transact, you can use Moon Pay, you can use wire. I'm told this also works in mobile. I have not used it. Look at this, David. Put in your credit card, putting your Apple Pay, putting your Google Pay,

Starting point is 00:04:18 and just get your ETH, right? Embedded in MedMask. And I actually use this a lot when I just need some get. especially for like claiming airdrops on old wallets that I haven't touched in years, but like I got to claim an air drop and I need to get gas into that wallet, but I don't want to docks my wallet. So this is actually when I use this. Also use Apple Pay to get that 2% cash back on your ETH buy, which is nice.

Starting point is 00:04:38 You know what's crazy, David, is I haven't even noticed that button, which is probably why MetaMask wants us to spread awareness that the buy button exists. Super handy for wallets. Old wallets are you claiming air drops. You don't have any ETH and yet you need like, you know, $20 worth of ETH in order to make that claim. So one click buy in Metamask. Of course, you can navigate to Metamask at banklist.c slash buy. Download the Metamask app and use that buy button next time you need some ETH in your wallet.

Starting point is 00:05:08 David, let's get to markets, man. What's Bitcoin price telling us? Bitcoin up just a smidge, up 2% on the week, started the week just below 30,000 and is ending the week just above 30,000. So 29,500 ending at 30,200 and 70. Sweet. Okay. Anything above 30K, I'm feeling okay, I guess. ETH price.

Starting point is 00:05:30 Last time we said that was 40K. I know. Is it going to hold? And the last time I said it about ETH, it was above 3K. I'm feeling good. I'm still not. I'm not feeling good under 3K. It's definitely a B market, right?

Starting point is 00:05:41 Build market below. But what are we hitting on ETH this week? We up or down? Heath took a little bit of a hit this week. Started the week at 1950, ended the week at 1820. So sad, eth noises this week. So down 6% versus Bitcoin's up 2% on the week. Some kind of funny counting just on the timing of these things.

Starting point is 00:06:03 If it was like a one day shifted, it would be a different number. So that's how I'm coping this week. Well, how are you coping with this ratio? What are we looking at on the week? Yeah, so like we got the 30,000 line for Bitcoin. We got the 2,000 line for ETH, and we got the 0.06 line for the ETHBTC ratio, which is where we are at right now. 0.06033 keeping its head above water allegedly this is look this is a great bear market

Starting point is 00:06:30 predictor I feel like are we in a bull are we in a bear if if the indicator is if the ratio is down if it's low we're more likely to be in a bear market if it's if it's high we're more likely to be in a bull market and look this is off of may we've certainly dropped quite a bit from 0.076 range all the way down to 0.06. So I guess that tells us everything we need to know about the current market conditions, David. Sad ethnoises. Total crypto market cap is flat at 1.3 trillion last week to 1.3 trillion this week. So overall, the market did nothing. Nothing. I'll take it. I mean, flat week is better than a down week, right? Don't take it. Did you know this? FDX just surpassed Coinbase as the second biggest centralized crypto exchange, that just happened last month. FtX was always gunning for number two. Binance,

Starting point is 00:07:26 of course, in first place. But now it's Binance, FTX, and Coinbase, and third. What are your thoughts on this? You think this will last? Yeah, yeah. I mean, FTCS's trajectory has always been gaining more and more and more market share. And to be honest, I kind of don't really count finance. Maybe that's just like my Western United States citizen bias. But like Binance is not going to like play nice with regulators in the long term. And so I kind of have discounted the value of finance in my head. That's definitely probably biased. But for all of all the regulated onshore exchanges that are the US regulator approved, now FTCS is number one. And so that's kind of how I count things in my head. Yeah, you really got to hand it to SBF, right? I mean, he's built this

Starting point is 00:08:10 business like over the past three years. I mean, it's not very old. FTCS is not very old at all. And here it's taking the number two slot from coin. I mean, look at that. Look at that chart, like going from July 2019, that blue line just going up, up, up, up, up, up. That's crazy. Yeah, look at this. Market share of legitimate volume spot exchange, so. I'm not the only one with this stuff. Yeah, right.

Starting point is 00:08:34 How about this next thing? Wait, also, yeah, for the record, they did not have Binance. They only had Binance U.S. in there. They did not have actual Binance in there. And so it looks like the block shares my opinion as to the illegitimacy of finance. Let's see. The dominant player in the market. is still Binance by far, which is 64%, followed by FTX, 10% and Coinbase 9%.

Starting point is 00:08:56 Look at how dominant Binance is compared to the other. That has got to be watch trading, right? I don't, look, man, Binance is a juggernaut outside of the U.S. It is absolutely massive. And so, I mean, I discount some of this as maybe watch trade or something different, but like not all of it. Binance is definitely a juggernaut in the space and expanding everywhere, too. Um, coin, uh, excuse me, Gemini, another exchange. I guess they would come in number, like,

Starting point is 00:09:25 would they come in number four, number five, something to that effect. Gemini light blue. Uh, that is, yeah, I think that's third. The Winklevoss twins, Gemini, they are laying off 10% of staff right now. And the headline is to prepare for crypto winter. Here's the quote on Gemini's blog. The crypto revolution is well underway and its impact will continue to be profound, the Winklevoss brothers wrote. but its trajectory has been anything but gradual or predictable. These are seasoned vets who've been through a few bare markets in crypto,

Starting point is 00:09:57 and they're getting ahead of this by actually cutting some of their staff now. What do you make of this, David? Yeah, so Gemini is a very, like, saturated company, right? It's been around, and so it's not like any of these, like, newer projects that I still have a ton of growth potential. So it makes more sense for its staffing to, like, follow the whims of the market, right? Just because, like, it's already hit, like, its saturation. point. So when the bear market does come, there does have to be cutbacks. I mean, there should be

Starting point is 00:10:23 cutbacks all the time. Like, we've got to cut out the fluff of all companies. So, I mean, only 10% in comparison to 2018 is a big improvement. Yeah, I do think we are seeing some belt tightening in specific areas in crypto. Certainly, there's a ton of hiring still happening, but in other locations, we're starting to see belt tightening. Newer stuff. Hiring and newer stuff. layoffs of other stuff. We've got a lot more to cover, guys. Coming up next, we're going to talk about that optimism air drop. It feels like that air drop is kicking off air drop summer, which is happening now.

Starting point is 00:10:57 Also, the OpenC insider trading story. I want to cover that. Does the crime fit the punishment? It's the big question in our mind. We're going to get to both of those stories. But before we do, we want to talk about the sponsors that made this episode possible. Rocket Pool is your friendly, decentralized Ethereum's day. You can stake your eth with Rocket Pool and get our

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Starting point is 00:11:44 extra tokens by adding your note to the decentralized rocket pool network, which currently has over a thousand independent validators. It's yield farming, but with Ethereum nodes. You can get started at rocket pool.net and also join the rocket pool community in their Discord. You can find me hanging out there sometimes in the chat, so I'll see you there. The layer two era is upon us. Ethereum's layer two ecosystem is growing every day, and we need bridges to be fast and efficient in order to live a layer two life. Across is the fastest, cheapest, and most secure cross-chain bridge. With a cross, you don't have to worry about the long wait times or high fees to get your assets to the chain of your choice. Assets are bridged and available for use almost instantaneously.

Starting point is 00:12:19 Across bridges are powered by Uma's optimistic Oracle to securely transfer tokens from layer two back to Ethereum. A token proposal is being deliberated as we speak in the Across Forum where community members will decide on the token distribution. You can have your part of Across's story by joining the Discord and becoming a co-founder and helping to design the fair, fair launch of Across. If you want to bridge your assets quickly and securely, go to across.t.to bridge your assets between Ethereum, Optimism, Arbitrum, or Boba networks. And we're back. And also diving into Optimism Airdrop Summer.

Starting point is 00:12:53 People got their tokens. Ryan, you're showing an address. Banked.eath got 827 optimism tokens for being a donator to Gitcoin grants on Layer 1 and also a Dow voter. So good job, Ryan. Congrats on your tokens. So the Optimism token is launched

Starting point is 00:13:07 with a total supply of 4.3 billion tokens inflating at 2% a year. and the airdrop of 215 total million tokens went to almost a quarter million addresses, 248,699 addresses. For comparison, Ryan, Uniswap was just 2,000 more addresses larger, eligible addresses larger than optimism coming in at 251,500. That is fantastic. That's great distribution, right?

Starting point is 00:13:35 To get half a million eath addresses in this thing. It's just like, you know, second in size to uniswap in from a distribution perspective. Yeah. And so people who checked their addresses a couple weeks ago might notice that they actually got more than they were previously quoted because optimism went through the whole air drop or excuse me, theirdrop farming. They scalped the farmers. So like, oh, they identified all the farmers just like Hot Protocol did. They pruned them. And so then they redistributed what was going to be given to the farmers to the rest of the community, which just makes sense.

Starting point is 00:14:06 You got to reward the actual true humans, not the farmers. And so as of right now, 62% of all OP tokens have been claimed with 120,000 addresses having claimed. Okay, this happened in the last day, right? The last 24 hours from the time of recording, 120,000 addresses, not necessarily people, but like probably 100,000 people, give or take. These are bank accounts, yeah, definitely. They've claimed tokens.

Starting point is 00:14:33 So, like, the participation rate is crazy. And so if we wanted to compare the claiming, of optimism versus uniswap. Uniswap has had 90% of all addresses that were eligible claimed the Uniswap airdrop. So 10% were like lost to history, probably. And so if optimism were to reach 90%, that would be 223,000 air drop claimers. Right now we're at 120,000, so we have a lot to go. But where Uniswap beat optimism by 200 or 2,000 eligible addresses, optimism still has room to be the largest air drop by how many actual people claimed the token. So that's a good number I'm going to be watching moving forward. Do you know what's awesome about this? It's not only claiming the

Starting point is 00:15:16 token, you're also like claiming it on optimism. You're also claiming it on a layer two. And this reminds me, you know how we always talk about like, you know, going out west and settling and finding new lands and new opportunity. You know, like in the west, in some of the new horizons in the U.S., they used to just give out parcels of land to individuals to settle there. It's like it's the frontier. No one wants to live here. It's going to be a rough life. But here's some land to make it worth your while. Here's why you should move from the East Coast and settle into this new land. And that's what's happening with these layer too. Essentially, you're getting free property if you settle. If you move from the Ethereum Mainnet, Manhattan, and you cross the bridge and you settle on the other

Starting point is 00:16:01 side, they're giving you free voting rights, responsibility tokens in the form of O.P., in order to settle here. And the OP tokens have some value. We should note that. What is OP trading at right now? And what is the fully diluted market cap? Yeah, at the time of recording is at $1.57. Yesterday, it peaked at $2.20 at the height of the mania,

Starting point is 00:16:23 also dumped down below 60 cents. So we're still in price discovery mode, ranging somewhere between 60 cents and $200, or $2.20, currently at $1.57. Fully diluted valuation, if you multiply the price, by the total number of four point something billion tokens. The total supply of optimism tokens, here's a trivia fact for you,

Starting point is 00:16:42 is two to the power of 32. That's the total supply. And I guess I can actually just read that out since it's on the screen. The total supply is 4.294 billion tokens. Coming in at a fully diluted valuation of $6.7 billion. So $6.7 billion just created out of thin hair.

Starting point is 00:17:03 And comparing that to, Maddick, I think Maddox is somewhere in the same ballpark. I think Madik was like, actually, can you look up the Madik tokens? Yeah, well we're here. Why not? Yeah. Madic market cap, $6.8 billion. Right.

Starting point is 00:17:18 Oh, excuse me, that's total luck value. $6.1 billion. So optimism is higher than Polygon, which is nuts. Wow. Which is nuts. Because like, okay, Polygons credit, they have done an insane amount of just like adoption and onboarding and like business development. So, like, people are pricing in a lot of optimism.

Starting point is 00:17:35 into the optimism market cap. That is true. Now, I will say there's a lot more supply, circulating supply, out in the market for Madik and Collegon versus optimism. The circulating supply is still very small at this point.

Starting point is 00:17:49 Right. And part of that story is because there are many, many more air drops for optimism coming. That's a part of this conversation. But yeah, this is just airdrop number one. Airdrops 2 and 3 and N are on the horizon.

Starting point is 00:18:03 That's super exciting, man. The claim process, by the way, was so easy. I did this with a couple of wallets. You're only saying it's an easy claiming process because you didn't try and claim it literally at the same exact time as everyone else. There was an actual, a bunch of drama with the clogging of not the optimism network,

Starting point is 00:18:18 but the RPC endpoint, which is a new place to get clogged. We'll talk about that a little bit. But optimism released an airdraft recap thread, which we'll go through because it's got some cool stats and some cool metrics. They say yesterday was an absolute world world world. It wasn't without the hiccups. That's reference to the RPC thing.

Starting point is 00:18:33 But to much excitement, OP was born. We'll have an extensive retro on the drop day next week, meaning, meanwhile, we want to share some stats coming out of the launch with over 50% of drop one now claimed let's dive in. Optimism hit a couple of major high water marks yesterday. In terms of transaction count, hourly rate peaked at 12 transactions per second, averaging about 10 transactions per second, matching Ethereum, while consuming less than 5% of Ethereum's gas. So Ethereum's level of scale, which wasn't like, it didn't even come close to completely congesting optimism, while consuming less than 5% of Ethereum.

Starting point is 00:19:13 Hourly rate peaked at 12 transactions per second, but spiked to 22 transactions per second. So people were claiming optimism tokens at a rate of 22 transactions per second, plus doing other things like basic unisop trades. Okay, here's where they like the drama came in, Ryan. Remote procedure calls, RPCs hit an all-time high of 20,000 pings per second. And so they write, simply put, these are requests to read network data, and this chart shows our free community

Starting point is 00:19:39 endpoint. This includes not just the claims, but Uniswap, reeds, bridging on hop. Basically, any time, if you've ever loaded up, like, the optimism RPC endpoint into your metamask, and then use the actual official, like, optimism link, which you probably did. It's in there by default. You're using, like, the optimism sponsor, like, supported RPC endpoint. You can... And that just means a whole bunch of servers out there, whether it's hosted by Infura infrastructure are provided or hosted by alchemy. These are servers that are for reading kind of the archival data, the history of the optimism.

Starting point is 00:20:12 So that's what powers all of the user interfaces, right? And so you can set that up in Metamask. And you're saying the default, the optimist optimism default RPC endpoint, the one that they sponsor was having some trouble keeping up, right? Right. Exactly. And so they just like, they run their own server or endpoint to alchemy. and people were trying to,

Starting point is 00:20:33 so whenever you load up your metamask into a website that is connected to the optimism, like, data, and it needs to collect optimism data to feed you, some of that data would be like, do you have an airdrop to claim, is like some of the data that is relevant here, or just like a pinging un-swap on optimism for what is the price of something, like all these things read the optimism chain.

Starting point is 00:20:54 That's what got clogged. And that is Web 2, Ryan, which is crazy. And so all the D-Gens who wanted to claim their optimism tokens broke web two. And so, like, we're talking to Jing about the details on this so we could get this right for the roll-up. And Gene gives us this funny story. She would, where, where she was working at the time where the optimism team was

Starting point is 00:21:12 working happens to be like in the same building as alchemy. And so she like, she ran downstairs to the alchemy offices and like knocked out, like hammered on the door. And it's like, hi, I'm from optimism. We're releasing a token today. And we need 10,000 F cups. And then apparently the alchemy team was like, F cups. What the hell are F cups? And then she was what she was saying was actually FCPUs. CPUs, yeah.

Starting point is 00:21:38 But Carl Floresh is apparently dyslexic. And so he told Jing, we need 10,000 F cups. So Gene goes running to the Alchemy like offices and like knocks on the door. It's like, we need 10,000, 100,000 F cups. You need 100,000 F cups. And Alchemy, it's like, what the hell is going on? Anyways, as soon as Alchemy figured it out, they spun up the nodes and that was all fixed. And so like people cause a bunch of drama. Be like, oh, I can't and my tokens, like all the token claimers were clamoring as they do. But once the extra servers from Alchemy were spun up, everything was fine and everyone could claim their tokens. Yeah, it's important to note, like obviously optimism did not go down. None of the smart contracts actually

Starting point is 00:22:15 went down. There was the ability to claim tokens. If you knew how to do it, outside of the user interfaces, it was just the kind of the Web 2 infrastructure dependency of like serving the data up, the archival historical data up. That's the piece that needed some additional juice and some additional servers. And if you knew a different RPC end point, you could still claim as well, it sounds like. Well, that's cool. I mean, I got, as I said, a few of these, but I'm still on the hunt for more. Did you do your claiming yet, David? I did my claiming. Yes, I did. Nice. And also my delegating. I delegated one. I have two addresses that I claimed optimism. One I delegated to David Mihal, the other one I delegated to Paulinaia. Here's an Anthony

Starting point is 00:22:57 Sizano tweet saying, pretty cool to see optimism coming in fifth place for the amount of eth burned on layer one today. So this is what happens when you get a token. All of a sudden, you just get a bunch of economic activity. Optimism yesterday burned 102 ether. And so putting it ahead of USDC and uniswap v2, not ahead of uniswap v3.

Starting point is 00:23:17 So it goes open C, basic eth transfers, uniswap v3, tether, and then optimism. The optimism layer two, burning the fifth place for the amount of eth burned. And then in seventh place is thick friends. My favorite NFT. And so I went to some Dune Analytics dashboards just to see some of the activity that was going on on optimism. And so I put that into a tweet. When you pull this up, Ryan, find the airdrop.

Starting point is 00:23:47 Point to it on the screen where you think the airdrop happened. Oh, my God. This is transactions per day for people on the podcast absolutely spiking on May 31st. All time highs. Yeah, like tripling, quix. quadrupling, something like this from normal and definitely all-time highs. And addresses per day. Look at that rocket up all the way up. This is transacting addresses per day or active addresses per day. That is the token effect on layer two. Yeah. And the number of first, I think if you

Starting point is 00:24:18 scroll down, I put some numbers on the first time addresses that we're transacting. Yeah, 45,000 first-time optimism users yesterday. And this graph is really, really cool, where the black line is the orders of magnitude times cheaper optimism is. And then the transactions is the number of transactions there are. And so, yeah. So you did see like a little bit of congestion in optimism, but like not to like it didn't actually like saturate the whole entire blockchain.

Starting point is 00:24:49 What happens is it's just like as it gets heavily heavily used, it becomes lesser orders of magnitude more scaled than Ethereum. But again, that is before EIP for. 844, that is before more like optimism, optimizations come to optimism, but pretty cool. Yeah, people don't know. They still have the throttle on, basically. They still have the governors. So it's not going as fast as it will be going, as efficiently as it will be going.

Starting point is 00:25:14 This is a tweet from Sassel, too. What's he saying here? Yeah, it goes, friendly reminder. The OP AirDrop is going to generate a lot of fee revenue on the optimism network, with the proceeds from this fee revenue later being donated to retroactive public goods funding, turning DGens into regens. This is the crypto economic future that we're all here, where we take our externalities and we funnel them into public goods.

Starting point is 00:25:37 And so this is optimism, retroactive public goods funding innovation. We did a show on this called the trillion dollar layer two opportunity, part two, although part one is definitely worth listening to. Something else people always talk about with layer two is this thought of it being parasitic to layer ones. So will all of the transaction fees kind of evaporate from layer one? will that migrate to layer two? So layer two is essentially steal the economic activity and the chain revenue for layer one.

Starting point is 00:26:05 This is David Mihel kind of responding to that criticism. Optimism was responsible for 1.6% of all fee revenue paid on Ethereum yesterday. That's hundreds of thousands of dollars of Heathburned in just a couple hours. AirDrop didn't start until late in the day. Who says layer twos are parasitic to layer ones? Who says that indeed? I've never understood that argument. it's like saying the state of Texas or the state of California is parasitic to the United States.

Starting point is 00:26:33 Of course it's not. These are taxpaying states. They're contributing to the GDP of the Ethereum economy. That's what a layer to essentially is. It's part of the United Roll-ups of Ethereum. So it's definitely not parasitic. We're starting to see that reflected with optimism, as you said, being number five on the burn leaderboard, the taxpayer leaderboard, if you will, happening just this. week. And speaking of network effects, this is a token effect, excuse me, this is a Coinbase announcing

Starting point is 00:27:03 that Coinbase will add support for optimism on the optimism network only. And so OP is trading on Coinbase. But in order to, if you want to trade your OP on Coinbase, you have to send your optimism tokens on the Optimism network to Coinbase, meaning Coinbase now supports the optimism network. So I think we can see further integrations with optimism over time, especially now that the tokens there and all the economic activity there, I expect USDC, die, other asset, deposit straight onto the Optimism Network. So we've been clamoring that for that for a while. Coinbase finally delivered. And a part of this whole saga, part of this whole story comes with this very controversial governance post that's titled, the Optimism Governance Post,

Starting point is 00:27:45 titled Users Who Sold the Initial O Beach Air Drop should become ineligible for all future air drops. And so the zero ex-ed-john on the optimism forum post saying, I've seen a lot of wallets claim the opi-airdrop and then swap it straight to uniswap. These accounts are not playing a constructive role in optimism governance. And so he makes the claim that people that just claimed and then dumped their opi token should be ineligible for future op tokens. Controversial post, there was a bunch of replies. He actually named some addresses here. None of these are your addresses, are they, David? I did not. I did not claim 32,000 opi aerop tokens. I also did not sell. I mean, there's some

Starting point is 00:28:25 air drops that I sell like automatically. This to me was, uh, it is definitely a keeper. I mean, optimism has a bright future ahead of itself. But why is this so controversial? So what was the back and forth? It's a conversation about like, uh, how do people get rewarded? Because we're rewarding people, uh, for their behavior and their activity and their, uh, engagement on the optimism layer two. And so like if you reward people, but you also restrict them from selling, are you really rewarding them? Because like, you know, if you report people, like they need to put food on the table at some point, right? They got to pay rent. But they're not, they're not restricting from selling. They're just saying next time around, you shouldn't, like, it's, you could sell,

Starting point is 00:29:05 but like next time around you'll get the reward. It says you can't sell because then we won't reward you in the future. I kind of, I don't hate it, honestly. It's like, what do you, what are you trying to incent towards? You're trying to incent towards the settlers. of the community, those that will stick around and actually govern and actually contribute, you're not trying to incent to the people who are, like, just dumping. And so, you know, I don't know. I definitely see the argument for this as well. But what if they are taking the optimism token, selling it for USC, and then they keep the USC on optimism? Like, then we're still having USC liquidity on optimism, so that's still useful. I think that's something, but it's

Starting point is 00:29:43 less useful than, like, holding the OP token actually contributing towards governance. And so, like there are degrees of utility to the network and what you want to reward. And I'm not saying like maybe this is advocating a complete like blacklisting of these accounts or something like that. I don't know that I'd go that far. But it is interesting thought process to say, hey, if you did sell versus if you if you cap, the people who kept, the people who are actually settling in this land should be rewarded more next time.

Starting point is 00:30:13 And there should be some disincentive towards just trying to flip your tax. tokens on day one. I understand both sides of the argument, I guess, but I'm probably more in favor of, like, let's try and send the network towards governors and towards settlers and away from the traders and liquidity locusts and that sort of thing. So I can definitely understand this governance post. Our friend Kobe did not, or at least I don't think he did. He responded with a governance post of his own.

Starting point is 00:30:41 I think this is like a satire, maybe some tongue-in-cheek. This is definitely satire. Okay, what was he saying here? Kobe goes, I recently saw this proposal on the optimism forum that we should be restricting air drops to people that sell. And so he goes and takes it even further, right? He goes, however, I'm unable to support this proposal in its current form. My lack of support for this proposal is not because I disagreed it with the sentiment. On the contrary, it's because this proposal does not go too far enough. So he has created some extensions to the proposal. He goes, in addition

Starting point is 00:31:12 to canceling the airdrofts of OP sellers, we should also consider a wider net of eligibility for airdrop slashing. And so he talks about the ways to do that. I propose that we, the optimism collective, cancel the future air drops for anyone that has sold any token in the last six months. These people have a pattern of undesirable behavior and we can consider them potential future sellers.

Starting point is 00:31:35 I think I speak for everyone when I say, do we really want people that might one day sell in the governance group? No, we don't. So he says, increase the severity of the punishment. Is canceling a futureirdrop good enough? I propose that the punishment for disrespecting optimism's governance price should be significantly harsher in order to detway future bad actors. Two ideas we have is we issue a debt token to the sellers and instruct local debt

Starting point is 00:31:58 collecting agencies to collect the debt from these people. Bonus is added revenue to optimism. And part B, we consider physical violence against the sellers. Nobody will take us seriously unless we are willing to fight for what we believe in. There's precedent here. Most governance groups have an active army, for example, the U.S. government. I think this is a good area to get creative. So I request my fellow optimism collective governance groups, colleagues,

Starting point is 00:32:20 to also suggest preferred punishment ideas. Also cancel the airdrops of everyone that bought O.P. since the airdrop, everyone that has bought the airdrop has also sinned because they have interacted with the sellers. This is bad enough. The O.P. tokens they hold are tainted, sold tokens. Basically, Kobe is just making a farce out of the governance post saying, you know, people are allowed to sell their tokens and not get punished for selling. Yeah. And then I also think the governance community is allowed to, like, respond to that and be like, but we want to incentive, incentive holders and settlers. And so I, I kind of see both sides of it. I do think Kobe's point is taken, though, right? Like, there's obviously a way to take this way too far and be super punitive on people who are just like, I mean, it's worth $6.8 billion, guys. Like, that's a lot of money. And maybe you want to cash out some amount of that. Um, I, um, I,

Starting point is 00:33:15 I see both sides. I don't know how this has progressed in the community, but it's definitely turned up some interesting debate back and forth on all of the future air drops, because that's really what governance is determining. Now the existing token holders get to figure out what criteria future air drops should be, you know, how they should be awarded and who should get them. Yeah. I think the interesting thing here is like, this is how Kobe actually engages in governance.

Starting point is 00:33:41 Like I know it's satire, but this is a legitimate governance. Post that Kobe is making a very legitimate point on. Right. And it's creating a lot of discussions. So like the way that Kobe chooses to engage in governance is like pretty interesting. It's pretty clever. It's pretty cool. Well, I mean, what's exciting about this though, David, is this is the kickoff to maybe

Starting point is 00:34:00 airdrop summer, layer two summer, right? It's like I think there's going to be a ton of these sorts of air drops in the future. And it's not just layer two's. It's also applications on top of the layer twos. Is that where we're going next, Ryan? I think that's where we're going next. I want you to actually tell me about this, David, because you put it in our agenda to discuss.

Starting point is 00:34:21 VeloDrome Finance. Velo AirDrop is live. What is VeloDrome Finance? What is that airdrom? Should I actually claim it? And where can I do that, sir? Yeah, so Vellodrome is a liquidity protocol native to optimism that airdropped their token in following of the optimism token.

Starting point is 00:34:40 And so they literally start their post saying, it's optimism air drop season, baby. this time Vellodrome Finance, an AMM inspired by Solidly Finance, is launching his protocol with an air drop of Velo tokens. So what is VeloDrome Finance? It is actually a project that got spawned on Phantom. This is an old Andre-inspired project. It had like a bad start on Phantom, but the team has like fix their problems and then

Starting point is 00:35:04 taken the project to optimism. It's basically like a curve, except it's not fixed to like for like assets. And so you can, it's more like Uniswap where you can. and trade ether for USC or volatile pairs. Curve is also working on this, I think, in Curve V3. And so it's like curve in the sense that it has that custom curve, AMM curve. And then, but it also has like VE tokens. So there is VE VLO.

Starting point is 00:35:31 And so they gave out their VEVLO tokens to a bunch of people that did various different things. One of them being people that are repeat optimism users, people that have curve, curve wallets that have staked curve for the. maximum amount of time, 1450 days, convex protocol lockers, VL, CVX, treasured Dow Genesis,

Starting point is 00:35:51 mine magic stakers, platypus protocol stakers, redacted cartel participants, and eminence finance wallets and who got affected with EMN that does a backstory there. Anyways, the whole point is that

Starting point is 00:36:05 right on the hot of the heels of the optimism air drop is the fellow air drop for this application, brand new application, coming to optimism. And so this is, This is like the takeaway is that it's airdrop season. So like stop being depressed about the market.

Starting point is 00:36:19 Like pick your head up and go start exploring because like there's so many air drops left. Not only optimism air drop number two, number three, number N, but there's also the application tokens. And so if you want some of these air drops, you got to go be on the optimism land because that's where the surface area is for all the air drops. Guys, crypto pays you to learn about crypto. Crypto is literally paying you to go bankless.

Starting point is 00:36:42 All right. is what's happening. That first criteria for the Velo AirDrop you listed, address is qualified as repeat optimism users. Are you a repeat optimism user that has some criteria? That's how you qualify for these air drops. Really cool to see. And I think this is a great way to kick off June, David, is to have thisirdrop happening. David Mehal also rolled out a really interesting site where we can start to see all of the taxes paid by the layer two community. This is layer two fees.info. And the question he poses.

Starting point is 00:37:18 Not IRS taxes. Exactly. L1 security payments. L1 security taxes. I should clarify. I'm talking bankless speak here. How much are roll-ups paying for Ethereum security? And this goes through the one-day security costs in one day.

Starting point is 00:37:34 So I guess that would be the last 24-hour time period at the time of recording. Optimism paid almost $200,000 for Ethereum security costs. Arbitrism paid 80,000 ZK Sync 11,000. A total of 313,000 was paid for Ethereum security. Again, what do blockchains like Ethereum sell? They sell Blockspace. The new purchasers of Blockspace are not actually going to be users on the Ethereum mainchain.

Starting point is 00:38:02 They're going to be Layer 2s. Here they are ramping up their Blockspace purchasing. And that is how we are scaling the Ethereum economy. It's really exciting to see all this come together. Yeah, and if you scroll down, Ryan, you can see the chart. And if you go to percent of total L1 fees, you can see that we just recently hit an all-time high. That's L2-ish percent of a total L-1 fees. Bam, right at the very end, 3.2 percent, 3.1 percent at the peak.

Starting point is 00:38:29 That is an all-time high for layer two's consuming layer one block space. And that number is up only, just like layer one gas is up only. because you're going to be competing. If you're still on layer one, you're competing with layer twos for block space, and you're going to lose that fight. So you might as well just capitulate and migrate to a layer two.

Starting point is 00:38:48 The other thing is, you know, the alternative layer ones are actually competing against these layer twos as well. And the killer advantage that layer twos have in addition to security is they don't actually have to mint their token to pay these fees. They essentially get Ethereum's defense budget for free as part of it.

Starting point is 00:39:07 And so if you want to go dip into the economic case for layer twos and the significance, the impact that has on ether and the Ethereum economy, go listen to that episode. David referenced early, that's the trillion dollar case for layer twos. Is that what it's called, David? Something close to that. Trillion dollar case, trillion dollar opportunity on layer two. There you go. Something like that.

Starting point is 00:39:30 It's got trillion in the name. David, let's talk about this next thing. what is going on with this former OpenC employee? I know we mentioned it in a roll-up. This was months ago, and the employee at the time got fired. OpenC. put out a statement. It was some sort of an employee by the name of Nate Chastain, who I believe was a senior product manager at OpenC.

Starting point is 00:39:53 He was caught front-running. He was caught front-running. This was a Twitter post, and now this has made all its way to the U.S. Attorney's Office in the Southern District of New York. And they've put out, I guess you call this a press release. It's labeled under press releases, but it's an indictment announcement that this Nate Chastain has been indicted and he is facing charges. What do you make of this, David?

Starting point is 00:40:19 Yeah, so just to recap the story, Nate Chastain, he had information about which NFTs were about to be featured on the front page of OpenC. And so he would go buy these NFTs before they were featured on the front page of OpenC. and then the price would like jump 2x, 4x, 5x, and then he would sell them. So he used that insider information to know which and if he's are about to be displayed on the front page. And then he would front run retail that would just like buy the shiny thing on the front page. He collected $67,000 for this activity. Wow.

Starting point is 00:40:51 And people found out because like they just found, like just saw him to be on his wallet. Well, and he was kind of dumb about it and sent it to a wallet that owned his own Cryptopunk. Like, it might as well be called like Nate Chastain.eath. And so like people found out just by like watching the blockchain. So like kind of a dumb move. But also what he is being charged with is I would call egregious in relation to a $67,000 of like insider trading. And so for he hasn't been charged with this. He hasn't been sentenced to this. But the one count of wire fraud and one count of money laundering, each of which carries a maximum sentence of 20 years in prison. If he gets the worst of it, it's like 40 years in prison.

Starting point is 00:41:35 If he, if he, the worst possible, I can't imagine that he would get the worst of it. And so, but this is what like crypto Twitter and just everyone has really been alarmed about. It's serious. It's a super serious. Yeah. Like the guy has to actually like hire a lawyer to not go to jail for $67,000 of like front running retail. And like, again, it's, he shouldn't have done that. That was a stupid thing to do.

Starting point is 00:41:57 Also, definitely dishonorable and super guilty. of 40 years of jail time, though? It seems like, I don't know. I mean, definitely a crime, but like now you have to ask yourself, does the crime fit the punishment? Of course, we don't know what the final punishment will be, but just the fact that like the maximum sentence is 40 years potentially in prison for doing this,

Starting point is 00:42:20 I mean, like all sorts of people in crypto, front run other people all of the time based on insider information. It just happened then Nate was actually caught doing it. from a Twitter thread. That's how bizarre this is. This just feels like he's getting Ross Ulbricht. Again, he hasn't been charged. And so he might just like not,

Starting point is 00:42:38 this might actually turn into a nothing burger, but everyone's being very alarmist is what this could turn into where they could make an example out of Nate Chastain and say like... That's what they're trying to do, right? Make an example. Perhaps.

Starting point is 00:42:48 What they're trying to say is, is hopefully which is good, which is insider trading is not okay in crypto. Right. Right. The fact that he was put into handcuffs and arrested for $60,000 of front running is a little egregious. There's a way better ways to, like, solve this grievance.

Starting point is 00:43:07 And so, like, what I'm worried about is that he actually does go to jail for, like, a really long time, kind of like how Charlie Shrem did. Charlie Shrem, he's, like, he was faced with, like, a lifetime in prison, so he took, like, a plea deal and spent, like, three years in jail or something. Ross Ulbricht was not able to get out of, like, a double life sentence, so he is still in jail. And so, like, this is, like, the red flag that people are worried about is, like, do they just make a case out of this individual?

Starting point is 00:43:29 as a warning shot to the rest of the crypto industry to like, you know, tough, like get your shit in order. Do you think everyone at centralized exchanges right now is just like sweating bullets? Probably. Like they're just like, I mean, they're going to have to button things up for sure. Bigly.

Starting point is 00:43:45 And, you know, compliance is going to be a big issue. The thing I love about defy, at least when you get into kind of the permissionless levers of defy, is because no one decides, no one is a gatekeeper on what, asset gets listed on something like uniswap. Anyone can list an asset at any time. There's actually no such thing as front run information about which asset is going to be listed because anyone at any time has the ability to spin up an asset. That to me is the world that we are trying to get to, a completely permissionless world where there is no insider information. Everyone knows at the

Starting point is 00:44:23 exact same time because there are no gatekeepers. OpenC is not that, of course, because there's kind of a, call them a web 2.5 type of company in between. A centralized front end with a decentralized back end. Exactly. And so there is actually insider information as far as what NFTs might hit the front page with a Coinbase or an FTX. It's also which assets are we going to list. That's information that can be traded on.

Starting point is 00:44:50 And in those cases, David, it does make sense to have regulators, you know, take a peek and enforce this sort of thing. Now, again, here, 40 years is absolutely crazy for this kind of event. But we'll have to see and we'll be following the case on bankless. Here's a hilarious meme, though, that I think sums things up. What is this, David? Yeah, Doge Toshi tweets out, crypto-Twitter VCs right now, excuse me, crypto vCs right now. And this is a scene from Kevin from the office.

Starting point is 00:45:19 I actually don't remember the scene. But Kevin is saying, I had Nate explained to me three times what he got arrested for because it sounds an awful lot like what I do here every day. So pretty big knock on VCs in crypto. And of course, not all VCs are bad. Some VCs are very bad. But yeah, using privileged information that the rest of the market doesn't have to front-run opportunity.

Starting point is 00:45:44 Well, isn't that the line we say at the beginning of bankups? But we're talking about, like, buying ether before the trad-fi does. So that's not insider information. This is, this, I think this meme, though, does sum up, like, what is actual front running? What is actual, like, insider training? What does that actually mean in crypto? And I think a lot of that has to be defined. But certainly, where there are centralized vectors, where there's, like, where there are permission

Starting point is 00:46:14 gatekeeping, that sort of thing has the potential to expose front running, as we've seen in kind of equities market. But, like, the more diffuse we can make this. information, the more transparent, the more on chain, the less ability anyone has to kind of front run or do insider trading because we can all be there. No one has informational advantage. There's no informational arbitrage. Everyone gets access to it at the same time if you are like watching the chain. So that is the world we are looking to get to. But it does call on the question what front running actually is and what insider trading actually is. Yeah. Yeah, that's right. Wish the best for Nate Chastain,

Starting point is 00:46:52 even though he did commit a crime. I hope he doesn't go to jail. I hope he just has to pay a fine. The thing is, like, on the blockchain, he could literally just pay the people back. Like, there is, he could, there is verifiable people as, like,

Starting point is 00:47:04 who he sold those NFTs to at the marked up price, and he can just pay them money. That makes much more sense than going to jail. Anyways, that wraps up that. Guys, we got so much more left to talk about. We've already gone on for so long.

Starting point is 00:47:17 Coming up next in the second half of the show, Nate, Kanye West enters the chat. So we'll talk about what Kanye is doing with Yeezist.eith. And also the fight over the apes, Ethereum layer two is going head to head with alternative layer ones as to where the apes need to migrate to because they've determined

Starting point is 00:47:32 that they need to migrate off of the Ethereum layer one. As we've said, migrate off of the Ethereum layer one. All of that stuff and more coming up right after we get to some of these fantastic sponsors that make the show possible. Arbitrum is an Ethereum layer two scaling solution that's going to completely change how we use DFI and NFTs. Over 300 projects

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Starting point is 00:48:52 collateral types, and also efficiency mode, which allows for a higher loan to value ratios, and of course, portals, allowing users to port their AVE position across all of the networks that AVE operates on, like Polygon, Phantom, Avalanche, Arbitrum, optimism, and harmony. The beautiful thing about AVE is that it's completely open source, decentralized, and governed by its community, enabling a truly bankless future for us all. To get your first crypto collateralized loan, get started at AVE.com, that's AAVE.com, and also check out the AVE protocol governance forums to see what more than 100,000 Dow members are all robbing about at governance.aVe.com. All right, guys, we're back. I want to start with some merge updates.

Starting point is 00:49:32 This, of course, is the Ethereum merge, the biggest event we expect of this year. Robston was just announced. David, what are we looking at here? What is the announcement? This is an Ethereum merged test net, and it looks like that is moving along. What was the milestone that was hit this week? Yeah, so we have a bunch of test nets around the, Ethereum ecosystem. There's Robson, there's Goorley, there's a few others whose name escaped me at the moment. And each one of those is going to go from proof of work to proof of stake as Ethereum in the

Starting point is 00:50:00 future will. And each one of those is going to have its own like merge, its own like practice merge. So Robson is getting merged the 8th of June. Then there's going to be like, if everything goes well, two to three weeks for the next one, which is going to be goarly, I believe. And then two to three maybe more weeks for the next one, which is Sepolo. Yeah, I didn't even know that that was a test net. Coven's also coming up and so yeah so June 8th the first major Ethereum test net

Starting point is 00:50:27 merges and then we have a few more testes nights after that and then we actually merge it's in a race right now to beat out the Ice Age coming in late August and so there is conversation about how if we do get to late August we are going to have to a hard fork without the merge to cover to get the transaction fees

Starting point is 00:50:44 from the Ice Age back down to 12 seconds because 20 seconds might become untenable it's actually like almost having the total block space supply of Ethereum at that point. And so, we're chiming still up in the air. Are we still going to do? I think the big question is, are we still going to do August? Is that still in the cards? And I'm going to say from like last week to this week, I think the probability of hitting

Starting point is 00:51:07 August has decreased, at least in my mind. Maybe like last week I was thinking, okay, 80% ish. Now it's probably down to like 50%. And I'm thinking more of a September, November. like September, October, November kind of time horizon because there's still having some issues with Shadow Forks. We'd hope that that would be done right by now, but there's still some additional testing that needs to be done. So I wouldn't be surprised if it slipped into September, October, maybe November. What's your take here, David? Yeah, that sounds about right.

Starting point is 00:51:41 Each merge represents a variable. And so it's, yeah, the variable stacked on variables. variables. Still feeling good, about September, at least. But we keep on kicking it out now, don't we? Are we there yet? Are we there yet, Vitalik? Are we there ahead of Vitalik? Vitalik, please. Anyways, that's that. Not too much more details than that. As each test night gets merged, we'll have more and more details as things go along. All right. Pooley update. Pooley, yeah, this is the, the latent Q-Sack is getting sued because of the whole like $5 into pool together, turning into a quarter billion dollar loss. lawsuit. Chris Dixon from A16C

Starting point is 00:52:20 goes, we just bought a 75 Eth Pooley judge to support Layton Cusack and pooled together. Again, this is an attack on pool together, but it's actually an attack on DFI, which means this attack on you personally. If you have not minted a pool together to a Pooley to help support pool together

Starting point is 00:52:35 against their egregious, frivolous lawsuit, please do that. There's a link in the show notes. You know, A16Z is the only crypto VC to have minted a Pooley. Look, man, I think they deserve a hand hand clap for that. And they do. I'm so sorry, Chris, I don't have my soundboard. I trigger the applause button, but here's the applause.

Starting point is 00:52:51 Just a manual. Well done, Chris. Good job A16 Z. I hope some of their VCs step up and do this. This is definitely how we support this industry and support Defi. And so far, David, it looks like they've pulled together NFTs have raised close to 500 ETH. Yes, that number's actually old. They've raised like

Starting point is 00:53:08 580 ETH, I believe. Fantastic. So they said the goal was to raise about $1.5 million of Eath, and it looks like they're doing that. Well, no, they still got a lot more to go. They have raised $515 at $937,000. They're looking for $140,000.

Starting point is 00:53:28 So they have like almost $500,000 left to go. So we still need help. We still need to help. You're thinking that Eith is still going to be below 2,000. So I'm calculating that Eith is going to be $3,000. I'm not. And you just make the difference. That's all we have to do.

Starting point is 00:53:44 We've already raised it, guys. All right. Kanye West getting into NFTs At least he's filing trademarks for NFTs You know and I think this is kind of interesting Because the last I heard from Kanye West and NFTs He was actually like pretty cold on it I think he put out a Instagram message

Starting point is 00:54:04 Just like a handwritten message saying something knocking NFTs My focus is on building real world products in the real world And about NFTs he said ask me later So he's previously been pretty pretty good cold on NFTs, although he deleted this Instagram post. And now it looks like... I saw that earlier this morning. Click on that link.

Starting point is 00:54:24 Yeah, it's deleted. Oh, yeah, he did delete that. That's weird. Yeah, he deleted it. So a little cold on NFTs saying, hey, no, I'm going to focus easy stuff on the real world. But now filing a whole bunch of trademarks, it looks like. Not only that, but he also bought yeezist.eath. Ryan, he bought yeas.

Starting point is 00:54:41 Dot Eath for four Eith. Wow. For four Eath? Yeah, right? Well, four-Eath. That's a lot of Eath, dude. I mean, but it's Yeezys.e's-Eat. I mean, what's it worth to Kanye? It's got to be worth more than four the Eith to this guy. Well, yeah, but the guy who, oh, excuse me, five-Eath.

Starting point is 00:54:57 I mean, the seller probably didn't know he was selling it to Kanye West. Actually, undetermined as to whether this is Kanye West. Oh, yeah. Okay. We actually don't know that. So, Yeez-Sys.eat got purchased for five Eath. Okay, we don't know. We don't know whether Kanye West has it or not. Maybe he doesn't. when Zachary Das makes a funny, funny tweet, retweeting this news, he goes, Web3s this. Look, man, I think NFTs are just prime for somebody like Kanye West.

Starting point is 00:55:26 It's very much all about kind of the brand. And so I fully expect Kanye to enter the Metaverse, as with all of the other luxury brands out there. So only a matter of time. So, David, update me on this. There's a lot of talk these days about liquid staking derivatives, LSD, I guess. And this is coming from some concern, some fear that Lido actually has a large distribution of all of ETH stake. It's over 30%, I believe, at this point in time.

Starting point is 00:55:55 And so this is Danny Ryan writing an entire post on why liquid staking derivatives cannot safely exceed consensus thresholds. What is the discussion going on in the Ethereum sphere about this? Basically, if a staking derivative token, which we assume all future staked Eats, will likely be a part of a stake-to-eath derivative token. That's Lido's staked-Eath, that's Lockerpool's R-Eath and all the future ones that are coming. If there is just too much centralization inside of one single token, and the way that that can emerge is like instead of you, maybe you have dollars and you go, but you want to have upside to staked Eth. Instead of buying those dollars to buy ETH

Starting point is 00:56:35 to go stake-that-Eth, you can just go to Uniswap and buy R-Eth on Uniswap or Staked Eth on Uniswap. And you're probably going to buy the most liquid one, because that's what you want, the with the most integrations in Ave, you want to, like, have financialization around your steak teeth. And so you just buy the most liquid one. And that has, like, positive feedback. Yeah, positive feedback loops.

Starting point is 00:56:54 Like, it can just, like, the M.EV, if the more and more stake you have, the more and more MEV you can get. And so the yields will be higher on the one with a monopoly. And so Danny Ryan writes his post, risks of LSD, liquid staking derivatives. And he just makes a claim that

Starting point is 00:57:09 if a liquid staking derivative protocol exceeds critical consensus thresholds, which are at one-third, one-half, and two-thirds, crossing each threshold enables powers to that organization, be it Lido or Rocket Pool, or whichever organization gets too successful, it kind of gives them control over Ethereum. And so he makes a post illustrating all the risks here.

Starting point is 00:57:32 And basically, we cannot allow any liquid-staking derivative token to get larger than one-third, and Lido right now is at, like, 32%. I did an episode with Superfiz from the Rocket Pool slash our ETH finance community. It's coming out on Tuesday if you want to hear more about this. I'm not necessarily worried in the long term. There's yet to be a problem that Ethereum,

Starting point is 00:57:52 the Ethereum community hasn't solved, although it does need direct attention. So I wrote a tweet right before we did this. Lots of clamoring about Lido, state eat dominance lately. Staking as a service apps, there's a few staking as a service apps that are yet to come to market. Swell Network, Oble, Alluvial, which announced that permissionless, plus Rocket Pool,

Starting point is 00:58:11 I think is about to see a lot of inbound ETH, still very early in the competition landscape forsaking derivatives. However, we do mean to ensure that a monopoly of staked ETH derivative tokens does not emerge. Yeah, I agree with that. I think there's a lot of more competitors that are about to enter the game for sure. Also, like, once withdrawals happen, that'll totally describe it as like shake up the snow globe and things will settle down after that. I do think the answer to you, Lido having too much stake is actually for competitive.

Starting point is 00:58:41 competitors to emerge. And also, I think there's some interesting answers in the form of things like OBLE network that allow some, you know, the sharing of staked private keys and can add some additional resilience and additional decentralization a bit like earlier in the stack, more like closer to the client level, closer to the protocol level. And that cryptography has not yet emerged. But I think David will probably be doing some stuff with Oble in the future where we talk about this technology called shared secret validator technology SSV, which is super important and yet to really emerge. I think it'll help some of this. So it's still very early. There's lots of clamoring. I am concerned about it, but I'm not at the stage where I think this is a long-term

Starting point is 00:59:27 existential risk. I do think as a community technology is a cryptography that's going to emerge. And like we'll have to just let these things settle before we hit the panic button too hard on this. Yeah, I definitely agree. There's the Ethereum auto, the Ethereum immune system is definitely showing up to like tackle this problem head on. SSV also, I think it's been rebranded as DVT distributed validator technology. He's definitely very, very promising to help democratize some of the monopoly power that a monopoly state to each derivative token might, might have. Anyways, moving on to the fight over the apes. So we have two competing blockchain submitting proposals to the ape coin Dow to have the ape the ape ecosystem be onboarded to a particular

Starting point is 01:00:14 blockchain. This is the board apes you're talking about. This is the board apes. Yeah. So the other side mint of the virtual land clogged Ethereum. They also had a very unoptimized like NFT contract, a bunch of failed transactions. So on the heels of that, Avalanche comes to the ape coin Dow and submits their proposal for the other side metaverse to become an Avalanche subnet.

Starting point is 01:00:35 And so they make the proposal, do all their incentives. Here's like all the things that we can give you. An avalanche subnet is kind of like an avalanche side chain, as I understand it. Yeah, yeah. The abelanch ecosystem says these are competitors to layer two's, but that triggers the Ethereum community because like they're just fundamentally different constructions with weaker split security. And so like where Ethereum layer two's share Ethereum security, avalanche subnet split,

Starting point is 01:01:01 avalanche security. and for the security maximus and decentralization maximus out there, we don't really like that. And so, but Avalanche anyways, they come and say, hey, make your Ape ecosystem, your ApeDal, an Avalch subnet. And so that's one blockchain competing for the Ape ecosystem. And the other is Immutable. Immutable X has also submitted a proposal to ApeCoin's Dow trusted layer two scaling partner. And so we've got two blockchains fighting for the ape coin. And the links in the show notes are going to the, will be in the forum posts.

Starting point is 01:01:32 So if you want to see this firsthand about the reactions to this, you can go into the comments and scroll down. The brief time I scroll down and read the comments, the immutable proposals were very, very overwhelmingly positive, and then the Avalanche were extremely constricted and controversial. Kind of what you would expect if you're a decentralization maxi. So I like what I see, because again, immutable is a DK roll-up on top of Ethereum, doesn't compromise on security. avalanche kind of compromise on security ecosystem.

Starting point is 01:02:02 It's why I kind of resist that ecosystem. What's kind of cool to you is like Ethereum has never done marketing well or like business development very well. Like you can. It's a protocol. Like how does TCPIP do marketing or business development, right? And Ethereum is much more in the vein of TCPIP versus like a company. It's something that alternative layer ones have done very well.

Starting point is 01:02:21 Like they do good outreach, good partnerships, good business development. And so that's that's why. you're seeing avalanche in these governance forms like fighting for market share. But it's funny because layer twos do not have that restriction. So many of these layer twos are becoming Ethereum's marketing and business development arm and onboarding arm essentially. So it is back to something we were saying that people didn't believe so much last year is that many of the alternative layer ones are going to find themselves not competing with Ethereum directly. They're going to find themselves competing with layer twos. And here's an example of that. Avalanche. And

Starting point is 01:02:57 and immutable competing for the board apes in these governance forum posts. And you can see in the forum post, like Avalanche has like, hey, we have this $290 million incentive program. Immutable is like, yeah, we raised $200 million. We also have our incentive program. And so, like, you know, this is the Ethereum application layer fighting for the best interests of the Ethereum protocol, which I think is just fantastic. Hal Press, he tweets out, both Avax.

Starting point is 01:03:27 and Avalanche and Immutable have made proposals to move Apecoin to their chain. Community response could not have been more different. This is the comments I was talking about strongly against the avalanche and pro the Ethereum Layer 2. Interesting that users would rather have assets backed on Ethereum Layer 2 than an Alt EVM chain. Again, if you are curious to see the response for yourself, you can go to the link in the show notes and review the comments. We got more, David. What are we looking at here?

Starting point is 01:03:53 More Alt Layer 1 things. This is the Twitter account Solana status. Block production on the Solana mainnet beta has halted. Validator operations should prepare for a restart in MB validators on Discord. So Solana down once again closed for business hours. Take from Frog Monkey goes, Validators check Discord is the most janky-ass Web3 shit I've read all day. What happens when Discord goes down to Loll?

Starting point is 01:04:19 And so, yeah, it's consensus by Discord channel, not the best version of consensus. And so I tweeted this out as like, if people are starting to make memes about Solana being down, it's starting to get pretty bad. And so here's the Solana is down starter pack. Salana made net beta intermittent issues. Validators, please come to the Discord.

Starting point is 01:04:38 It was a simple software bug that in no way reflects badly on our design choices, not down, blocks just delayed indefinitely. Engineers are investigating, update your nodes now, Nakamoto Co-o-o-officient. If you're not following the Solana leaders on crypto Twitter, you might not get some of these jokes.

Starting point is 01:04:54 But yeah, memes about Salana being down is not exactly what you want to see. Yeah, and look, I think that there's some necessary accountability. I mean, Salana is saying it's a layer one. It's also saying it's in beta, but it's like a multi, like many billions of dollar beta, right? Most expensive data, I've ever heard. And like the one thing that layer one chains are supposed to do

Starting point is 01:05:18 is stay up, maintain censorship resistance. and maintain uptime. And if it's not doing these things, then I do think the crypto community is right to sort of call it out and raise attention, raise awareness. I mean, a lot of people didn't do that with the Terra ecosystem

Starting point is 01:05:35 and kind of look what happened, right? It really costs the space over the long run. So we're going to continue to talk about these things because we think they're important. But David, another thing we're going to continue to talk about every single week is a job. Get a job. We want you to get a job.

Starting point is 01:05:51 in crypto. Absolutely, there's companies that are hiring, even at a faster clip, there has been no decrease in the amount of jobs on our job boards. I'm going to read a few out to you. A tech lead at Swell Network. David, is that one of those... That's a staking as a service company. That's what I thought. A tech need at Swell Network. Solidity developer at Unlocked, Senior Product Designer at Streams, a business development lead, Goldfinch, marketing manager, Wanderverse. So many of these positions were non-technical already, David. An associate business operations. Chainlink Labs, a developer evangelist at Argent, there's so many more. Go sign up to receive these jobs in your inbox, the banklist.pallet.com slash jobs. Also, if you haven't done this,

Starting point is 01:06:33 do this. Go submit your resume. Make these projects come to you for the talent. We have a talent collective where you can go do that. A lot of energy in the bankless talent community these days, David. I think there was like a Twitter spaces earlier this week about this. Yeah. Do you know how many people went to the talent collective team at Bankless? Joni and Michael hosted a Twitter space to that with some other companies in the space all about just like kind of a job workshop like how to get a job in Web 3, how to stand out as a campus. Yeah,

Starting point is 01:07:01 employers. It's part of the panel. Yeah, it's part of the Twitter spaces. And so you know how many people came up to that Twitter space, Ryan? Like how many people showed up? How many? Tell me. 1,500 showed up on Twitter space.

Starting point is 01:07:12 I shit you not, dude. Like 1,500 people. That's fantastic. So there are 1,500 people who showed up for basically what is like a virtual career day. A Twitter job. Fair. A Twitter job fair. Yeah. And so again, the job market is hot. Like that tech lead out of Swell Network, $100,000 to $200,000 a year. That's a nice paycheck. And so like, yeah, I know Gemini is laying off people, but like, again, the newer people, the newer projects are hiring

Starting point is 01:07:38 and they're hiring bigly. Absolutely. So make sure you get in on this if you're interested in working in Web 3. And why wouldn't you be? David, a few releases we got to cover. Number one, Did you see this? The bankless Dow, good old bankless Dow. They just released the global tax guide. All right? I love that they did this. This is a global tax dies.

Starting point is 01:07:58 Do you hear the enthusiasm in Rockiesport? I'm so excited. Man, is this the most, why don't we lead with this in the roll-up? I'm sure. Big news of the week. Triple views. Yeah, big news of the week. Right ahead of the optimism air drop.

Starting point is 01:08:08 Yeah, forget about the air drop. All right. The global tax guide from Bankless Dow is here. This is the most up-to-date information from the U.S., the UK, Portugal, Spain, Australia, Poland, Russia, Brazil, Germany, a whole bunch of other jurisdictions. So it's international. Again, something that bankless HQ could have never written. Do you see this?

Starting point is 01:08:26 Do you know how to get this guide? Yeah, you mint it. That's awesome. You minted an FD. Dude, the Dow is kicking ass right now. Look at this, man. Yeah, of course, they also have some art to go with it. IRS filings that, like, scribbled over.

Starting point is 01:08:39 Man, I want to make this bigger and actually see this. You're going to have to click on one, I think. Some of these are hilarious. Anyway, go check out. The global tax guide, if you are, I don't know, thinking about taxes. Wondering where you should go next. Actually, if you're thinking about taxes, you might not need to mint a tax guide. If you are not thinking about taxes, you might need to go mint the tax guide.

Starting point is 01:09:03 That's so true. You probably need this, or at least get your CPA on this or something. Give it a present for your CPA. Another, man, every single week, we've had more wallets to announce. And this is a wallet from Zirion. Zirion, of course, is a fantastic defy aggregator. It's kind of like a mission control center for all of your defy wallets. And they've just released a mobile wallet.

Starting point is 01:09:26 I don't know all the details, but I think this thing is... Oh, I've got the details, Ryan. It's non-custodial, right? So that's good. So it's still bankless. But what else does this puppy do? Oh, God. Here it goes.

Starting point is 01:09:37 I'm going to run through this. Smart trade routing through every major decentralized exchange. Multi-chain support for 10 networks, including Solana, when it's up. Polygon. ranch, arbitram, buying a smart chain, optimism, nosis chain, others, DAF compatibility with wallet connect, you'll love to see it, sign transactions on any Web3 app with your phone, Fiat OnRamps, we love Fiat onRamps,

Starting point is 01:09:56 multi-seed phrase management, so you can have multiple seed phrases. And so we also love that. And also Zerian DNA, which is an NFT, generative NFT that evolves with you as you use Web3. So I'm getting something like a Tomogachi pet or something, a Tomicotin FIT that like grows up with you as your as your defy as you do like degen activity across your wallets it kind of adapts and molds you and of course that like ryan said at the beginning non-custodial aka bankless do you think we can

Starting point is 01:10:26 just like stop getting people to use the word non-custodian and start using the word bankless do you think we'll yeah it's just we released a bankless wallet that'd be amazing i think you guys should do this around the other thing is this is all mobile first which is fantastic because we need some more mobile wallets uh rather than just uh browser extensions here's a another release this week Voltz Protocol. What are these guys doing? Yeah, Voltz Protocol, interest rate swap mechanism, which is apparently like a a bajillion dollar total addressable market. Bajillions of bajillions. It's so big.

Starting point is 01:10:57 Yeah. And we're not joking. 300, the actual number is $372 trillion in the world, is interest rate swaps because this has to do with bond markets, right? Bond market yields and people can like control and hedge their interest rates, blah, blah, law. Anyways, Volz Protocol, live on Mainnet, Alpha launch, a cap of $1 million per pool, so it might actually already be full, but you can trade rates with leverage, so you can trade interest rate deviations with leverage and earn market neutral yield and also build the future finance they tweet. And so this is also the Dow that lobbied Uniswap governance to allow

Starting point is 01:11:38 them to use Uniswap V3, the Uniswap V3 license. Uniswop V3 license is. is controlled by the uniswap Dow for like three years or something. So Volz gave the Uniswap Dow something like 1% of tokens to be able to use the Uniswap V3 code inside of the Dow. So pretty cool. This kind of stuff is going to be great for something we talked about last week, which was like determining what the ETH staking yield curve is going to be in the future, right? I mean, that's why interest rate swaps are such a large market in the traditional space,

Starting point is 01:12:08 like $370 trillion. dollars, just the most massive derivatives market in existence. And now, as we've said so many times, David, we are speed running the history of finance. Now, I don't know, we're the 1950s, 1960s, at least getting these interest rate swap derivative markets up and going on defy. I think this is going to be an absolutely massive sector, and it's just getting started. The part of the story is the financialization of ether, the asset, and all the other yield on Ethereum, but the one we really like is ether of the asset.

Starting point is 01:12:37 So that is becoming more and more financialized Foltz Protocol. is doing it. I'm talking with Simon, the founder of Voltz Protocol, to come on an alpha-league episode so we can explain this thing in depth, because this is like beyond my brain for comprehension. So that episode will come out sometime soon. D-Fi Saver as well. They've just announced they are live on arbitram and optimism. So they are alive on both the optimistic roll-ups. If you haven't used D-Fi-Saver, it's just a way not to get liquidated. It's kind of like it wraps up your loan, whether it's an Avey loan or whether it's a maker loan, and it makes sure that you you don't get liquidated.

Starting point is 01:13:12 And, you know, the Defy Saver team was really key. Do you remember in March 2020 and all of those CDPs when ETH dropped to like $80, so many people were getting liquidated? Defy Saver has saved countless millions of dollars, countless liquidations from many of its community. And they've just been continuing to build. So I really love what this team is doing. It's a really useful product.

Starting point is 01:13:35 If you haven't checked it out, go to Defy Saver and see what they're up to. or just with those new optimism tokens and the new exploration they're you doing on layer twos, you can go see it on optimism and arbitram as well. David, what else we got, man? We got protocol fees from Immutable. So protocol fees are live. Of course, every single blockchain needs to charge fees. If they don't, something is up. So as a mutable has announced that their protocol fees are live and they tweet out, this is the final step before launching IMX taking and will allow the next generation of Web3 games to reach Planet Scale with cheap,

Starting point is 01:14:11 reliable, and incentive-aligned pricing. Link in the show notes. But if you're into the whole immutable ecosystem, the IMX staking is what you're excited about. And so with protocol fees, when you actually stake your IMX, you actually get the fees. That is the idea there.

Starting point is 01:14:27 That's awesome. On the regulatory front, there's some things happening. So Senator Cynthia Lummis, she has just released a full draft, a very early preliminary draft of a landmark crypto bill. And of course, she in the past has been, she's a senator who's been very crypto-friendly.

Starting point is 01:14:46 So it's good that this is coming from her. An early draft was sort of leaked, and the block did a report on that, and you can look at the 70-page draft if you want. Lumas has said, yeah, but Lumas has said, it's not the full draft, right? It's just something preliminary. It's changing a lot.

Starting point is 01:15:05 And so the real announcement is going to come, on June 7th, so it's coming right up. But I think one of the things that it, I hope it does, and it seems like it's going to do, I've not read all 70 pages, David, is add some clarity as to where the CFTC starts and stops and what jurisdiction the SEC has. And that's really what we've wanted from our legislators all along in the U.S. and in other jurisdictions is just give us some clarity, okay? Like, we don't actually know what the laws in the country are pertaining to crypto, whether it's

Starting point is 01:15:39 tax clarity or whether it's, you know, commodities and securities clarity. That's what we're looking for. So hopefully this injects some of that. And hopefully it's not something that would squelch, but it's something that would foster innovation in the U.S. If this sort of thing passes. So TBD, wait for the seventh, wait until after, until this gains some more steam. And then, of course, it has to actually get through the Senate,

Starting point is 01:16:02 which is maybe the hard part in the Senate in the House before it actually becomes a law and, you know, Biden's signature and all of these things. So we're a long ways out. But something is happening. Yeah, we are fighting the fight. And so thank you, Cynthia Lemmas, for making sure that fight gets fought in Capitol Hill.

Starting point is 01:16:18 All right, one big raise of the week, and it is indeed a big one. Binance Labs closes $500 million fund to focus on Web3 and blockchain adoption. Pretty run-of-the-mill headline, $500 million. that is a large number. So Binance Labs funding more shenanigans. I love to see it. Cool. Guys, there's a lot more we want to cover. First of all, questions from the nation, our new favorite segment that we end with. There's at least two questions that we've heard from the bankless

Starting point is 01:16:44 community that David and I will attempt to answer. And then some hot takes from crypto, Twitter, as usual, including this take. No one actually understands the Ethereum merge. I kind of agree with that, but we'll dig into all of that when we get back. Before we do, we want to thank the sponsors that made this episode possible. Maker Dow is the OG Defi protocol. The Maker Dow produces dye, the industry's most battle-tested and resilient stable coin. Using Maker, you don't need to sell your collateral if you need liquidity. Instead, you can spin up a Maker vault and use your collateral to mint dye directly.

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Starting point is 01:18:09 Brave Wallet is built natively inside the Brave browser, no extension required, which gives the Brave Wallet an extra level of security versus other wallets. With the Brave Wallet, you can buy, store, send, and swap your crypto assets, and it can even manage your NFTs and connect to other wallets and defy apps, all from the security of the best privacy browser on the market. Whether you're new to crypto or a season pro, it's time to switch to the Brave wallet. Download Brave at brave.com slash bankless and click the wallet icon to get started. And we're back. Questions of the week.

Starting point is 01:18:39 If you want to get your question into the questions of the week, every Wednesday, a tweet goes out of bankless asking, do you want to get your question of the week into the question of the week? So that is what you respond to. We prioritize questions with the most likes, also the slightly ones that are also the most interesting. And so this is that segment. Questions from the nation. Frog Monkey asks, well, and eventually L2-L3 world reduced demand for main net block space. What does this mean for demand for ETH and supply? And also EIP-159. And so I've answered this question in the form of

Starting point is 01:19:11 another tweet that I found. And this actually came out of the Bitcoin block size debate in 2016. And so this is a tweet of like, I think Texas highways or maybe China or something. And there is like, It's like a 20 lane highway going in both directions. There's lanes on lanes on lanes. And they are all congested. And the concept here is something called induced demand, where if you increase the size of lanes, you will increase just the usage of those lanes.

Starting point is 01:19:38 So you don't actually scale anything. You're not solving traffic by making more lanes. You're just making more usage of those lanes. So people will just like have, we'll drive more cars. And so this concept of induced demand was at the very center of the block size debates of Bitcoin in 2016. before Bitcoin, the Bitcoin block size wars forked Bitcoin into Bitcoin with small block sizes,

Starting point is 01:20:00 aka small lanes, and Bitcoin Cash with big block sizes, aka many, many, many lanes. We all know what happened to the Bitcoin Cash versus Bitcoin. It was like been down only ever since. And so this is also at the heart of Ethereum scaling strategy. Rather than a scaling Ethereum at the layer one, we're going to make, instead of more lanes, more highways, more highways going in different directions to route demand elsewhere around the layer one. So instead of inducing more demand at the layer one, we just create layer two's, which keeps the layer one safe and secure. And so, Frog, to answer your question, what does

Starting point is 01:20:38 Ethereum like burning rate do in a layer two slash layer three world and demand for eth? I expect, and especially as we're talking about earlier, as layer twos become bigger and bigger bigger, they're actually going to bully people out of the layer one because they're going to price them out of the layer one. So it's the layer twos that are going to be these big, massive buses, these convoys of buses on the very, very low lane highway of the Ethereum layer one. But it's going to be transporting a lot of people because it's like buses or trains rather than individual cars. And so in the adoption of layer two is going to, in the same way that we saw Immutable X fighting for like the Borde Hape ecosystem, like all these layer twos will create demand that Ethereum

Starting point is 01:21:22 layer one will never have been able to do, like highways going into new cities that Ethereum layer one wouldn't have been able to build and attract more demand. And so I see layer two slash layer threes as Ethereum increasing its surface area for the ultimate demand of that very small constrained block space at the layer one. And so they are not parasitic. They actually are net generative because they enable new economic activity, new places to go for the Ethereum layer one via routing to layer twos and layer threes. Anything you want to add to that, Ryan? Yeah, I would just say we're never going to have enough block space is the thing. In the same way, you know, your computer will never have enough storage, enough memory, enough processing power

Starting point is 01:22:04 because as soon as you get more storage, more memory, more processing power, you will have applications that start to consume more of those things. Chrome. It's very much like, yeah, like Chrome, like Chrome tabs. I got a new laptop. And all it means is, you know, so I could have more Chrome tabs. And all it means is like the apps on my laptop in the future are going to like continue to consume more system resources. Very similar to bandwidth too, right?

Starting point is 01:22:29 Think of layer two is like adding bandwidth to trustless transaction space, trustless block space. It's really what we're doing. Will the world ever have enough bandwidth? No, because we'll just create more. applications that use more bandwidth, and we'll continue to use it all. I think that's similar to what's going on here. All right, here's the next question, David. What do you think is one of the most useful use cases of Ethereum that we have not yet deeply discovered, but that will be very big in the next 10 years? So most useful use case of Ethereum, not discovered, that will be very big within 10 years. What do you think, David? Yeah, the funny thing is while we were prepping this gender, Ryan and I came up with our answers in independent.

Starting point is 01:23:13 and they were the same answer, which is how you know that we're onto something. Identity, verifiable credentials, off-chain identity, decentralized identity. How do we get, like, this is like non-financial use cases of Ethereum. How do we get like a self-solverine identity system built into our crypto systems that can attest to who we are and what we do as humans in ways that is also private and secure? Tomorrow, I'm actually recording with Vitalik Boutrin and Evan McMullen because we have a debate on our hands. And this is actually right in the first time I've actually disagreed with Fitalic about something and I actually feel like I have the evidence to back it up. We're going to

Starting point is 01:23:51 see how well I do. I don't know how that's going to go for you, David. I'm not the one debating, however. I'm bleak for you. I also don't know if this is going to be a debate where I literally going to just figure out what you do with a sole bound NFT versus an off-chain verifiable credential. And so to answer the question, identity and decentralized verifiable credentials, rather than just like Harvard giving you your, your credential of you graduated as a piece of paper, we can have, like, Vitalik says, a soul-bound NFT, or Evan McMullen says,

Starting point is 01:24:24 an off-chain verifiable credential. How this emerges is TBD, but there's consensus on this is the next big thing in Ethereum, is decentralized identity, credible attestations as to who you are, kind of like your D-Gen score. Just like, yeah, you have done the things, and therefore you have this, like, DGEN score is like a new Web 3 version of like a credit score, right?

Starting point is 01:24:44 Like you did all the DGEN stuff on Ethereum. Like people have hired other people, like funds have hired people based on their DGN score because it's an attestation of their experiences and who they are and like how well informed they are. And so like bankless Dow is issuing a credential as then you have been an active governance voter. Like compound saying you've kept your Ethan here for like over two years. Here's that credential. So we can have a more illustrative expression of our identity with these types of credentials that can unlock use cases that we can't even dream of at the moment.

Starting point is 01:25:18 Yeah, I think like if you zoom out and think about what crypto does, these are just basically trust computers, trust machines, right? And so what sort of applications require trust? Well, number one, we did the money thing. That's super important, right? Money requires some level of decentralization and a trust computer in order to create on the internet. So we've done that. We've also done banking and kind of finance. We've also done property. The next major thing that requires a trust machine, a trust computer, is identity. And that's

Starting point is 01:25:52 the thing that we have yet to solve. Has not been a breakout use case at all for crypto yet, but we're starting to see that germinate. And that is going to be massively impactful, probably as the poster asks, a very big thing within the next 10 years. years that is not yet deeply discovered. I definitely put a lot of money on identity being a breakout transformational use case. I don't know where the investment opportunities are in that, by the way. I think they're going to emerge. But as far as like transformational application that blockchain is is uniquely positioned to give us, that's like a thing that is going to be absolutely huge. And if you think about it, it's like, where do we get our identity today? Is passports the

Starting point is 01:26:38 nation-state issues, right? We are giving it by the government to us. Exactly. They tell us what our identity is. Exactly. So we have to change that. And this is going to be very important for our digital freedom going into as we continue in the 21st century.

Starting point is 01:26:51 Also, I will say that there are going to be like, if defy yield farming, for example, was a blowout use case in 2020, no one saw that coming. So in addition to our identity, there's going to be like 17 other massive use cases that no one's going to see coming to. We just don't know what those are. Yeah, exactly. TBD. All right, let's get to some takes for the week.

Starting point is 01:27:10 This is a take from Food Bar. Food Bar, you want to read this? Yeah, Food Bar says, quote, the merge has already priced in. The market must be discounting execution risk. And then he more seriously follows up with, my friend, the market doesn't even know the difference between Robson,

Starting point is 01:27:25 which is an Ethereum TestNet and Mainnet. And so that got a bunch of likes. This is after this market meditation's Twitter account goes, breaking, Ethereum Merge scheduled for June 8th. No, that's the Robston TestNet. Net Merge. Market Meditations. I subscribe to that.

Starting point is 01:27:40 What are they doing? Mark Baylon follows up and says, laughed at this for a solid minute at the tweet and kept scrolling, but holy crap, you're actually right. This bear market is going to be a lot of fun. Yeah, the degree that people don't know what the actual true details of the merge are

Starting point is 01:27:54 are as like, I hope bankless listeners know because look, we've been hounding it for a very long time now. People that listen to Anthony Sizzano on the Daily Way, they definitely know. Beyond that, Ryan, I'm not yet convinced that many people,

Starting point is 01:28:06 people know and understand what the magnitude of the merge actually is. I agree. Well, it's bullish. If you're front-running the opportunity, aren't you? Not in the Natchez-a-in-a- the good way, the way you won't get arrested. The way where you're not going to get arrested, this is what investors should be doing is front-running this informational arbitrage that they have by educating themselves. David, here's a tweet from Kevin O'Walki. I feel like he's laying out a new mental model for us. This is the Dow Human Actor Trilemma. And what we're we're seeing is, of course, like, one of these famous triangles with a trilemic here. And I want you to explain this to us, but you have to choose two of three, either shared action,

Starting point is 01:28:49 shared context, or shared consent. So all of these things are shared, but I can either choose shared action, shared context, or shared consent, and I only get to pick two of these three. What is he talking about? Right. He's talking about dows and their difficulty. of scale. And this is really the big Dow problem. Kevin O'Waki, big Dow thinker, kind of knows what he's talking about, definitely from experience as well. And so if you have shared consent, as in everyone in the community agrees that this is the right thing to do, and you also have shared context as to why you are doing it, you are likely going to be missing shared action, which is going to be what he calls legitimate inaction, as in the choices that are being made are legitimate, but the direction that

Starting point is 01:29:35 they're going in are illegitimate, as in like we got that wrong. And then you can combine shared action as in like all the DAO is working towards a shared goal and also shared context as the reasoning why we are working towards that goal. So if you have those things, you have illegitimate action because you forgot to have shared consent, as in people made choices without the rest of the DAO. So then the risks for that are like what he calls consent debt as in some parts of the DAO don't feel heard. People will fork off the DAO and make their own DAO. And then you can combine shared consent with shared action. And so everyone in the Dow agrees, everyone in the Dow agrees where to go, but they are missing shared context. And so you have misdirected action, as in the

Starting point is 01:30:17 Tao is, it agrees that they need to go somewhere, but they forgot to figure out the right direction to go towards. So share, and he goes, shared context takes time, full context, harder, and complex systems. And so this is like the trilemma of Tao. It's like, it's really hard to get all three. It's not impossible, but getting all of these is very, very difficult. Yeah, this seems like a problem because we either get misdirected action, which is kind of bad in our decision making, or we get legitimate inaction, which is bad because you're not actually doing anything. Or you get illegitimate action, which is bad because a whole bunch of the community doesn't actually agree. Yeah, you are doing something, but people forgot to agree on it.

Starting point is 01:30:55 Okay. Well, I always hate presenting a problem without a solution. Does this thing have a solution right now? I think the solution is to follow Kevin O'Walky on Twitter and wait for him to figure it out. We're experimenting with DALS, right? We're trying to figure out how to solve the trilemas as we're solving other trilemma's in crypto. But I bet you solve it with technology. Yeah.

Starting point is 01:31:18 Well, I don't know. I mean, can you solve governance with technology? Yeah. Hmm. Yeah. You can share information better with technology. Yeah, these are, this is like the crypto way. It's like if we have a problem, we'll just write code.

Starting point is 01:31:30 until we fix it. I do think, you know, the point that we made on the Mark and Dracin Chris Dixon podcast of like crypto's speed running, not only finance, but it's also speed running human governance, right? I think some of the things I've been doing is like looking back in history. It's like, that book, that book recommendation list that Mark Andreessen recommended, I've been starting to go through that. And like one of the books on his list is a conflict of visions. And it like goes through the history of like all of these great philosophers and political thinkers in the past, like the Godwins of the world and the Hobbes and the Rousseau's. And I've been probably under-exposed to many of these thinkers,

Starting point is 01:32:11 but it's so striking to hear them articulate like they're contemplating the best structure for a free nation state, right? And at the very early stage of the nation state, now here we are at the very early stages of the crypto-digital nation and wrestling with many of these same problems only with a slightly different context. So sometimes it's, it's helpful to actually go backward in time and, you know, hear the original form posts. It looks at the original form post and arguments of the philosophers. Yeah, there can be some answers there as well, and I wonder if we might find some. Yeah. We've all, we've been here before. Humanity has done this before. Totally. All right. Last tweet of the week, Anthony says on and goes,

Starting point is 01:32:55 Ethereum, EVM, EVM, EVM, EVM, EVM, and he is tweeting out. And he is tweeting out. the daily transaction fees on one of David Mihal's crypto fee site. And it goes, Ethereum, actually Ethereum, Binance, Smart Chain, Optimism, Arbitram 1, Avalanche, Polygon, which correlates to actually Ethereum, then EVM chain, EVM chain. It's all EVM. It's all the way down. So I know people might call me an Ethereum maxi, but if you're going to do that, get it right and call me an EVM maxi, because that's the actual epicenter of the crypto world. Oh, really? You're an EVM maxi. Yeah. Is that what you are? I'm neither sure.

Starting point is 01:33:29 Neither. Yeah, you're a decentralization, Max. Yeah, that's me. What do you bullish on, David? Same, same, same. I am bullish. Well, first off, I'm very, very bullish on Brooklyn, because I'm going there. I'm in the space between apartments, hence why there's a space background this week.

Starting point is 01:33:41 But this is someday I go out to Brooklyn. But overall, what I'm bullish on is just, like, the sheer amount of surface area that is coming on to Ethereum. We got the optimism layer two plus is token now. So, like, now it's real. We have, like, connects and hop bridging between arbitram and optimism. and all the other layer twos. We have the ZK roll-ups of Immutable, which have as a layer two,

Starting point is 01:34:02 but then there's layer threes on top of that. And so like GameStop is getting built on like a layer three on immutable. And so all these things are going to create an insane amount of surface area, which is perfect for what we need in a bit in a build market, which is surface area to build on. And kind of like we were talking about like avalanche versus immutable, just surface area is on boarding area, surface area. So there's, and so like, also at the same time, we have so many protocols going live.

Starting point is 01:34:30 We had volts go live this week. We have like all these other applications go live this week. The amount of things that are going live over the next like 12 months is absolutely insane. And I know these because I'm talking to some of these founders. And so like the reason what I'm bullish on what I'm bullish on Ryan. Are you saying it's the build market again? It's the build market. But no, like the beautiful thing about like all these protocols going live is like we have shit to talk about.

Starting point is 01:34:54 Oh, yeah. So I'm bullish on like bankless podcast because there's so much left to talk about over the next year. I kind of, weren't we always talking about like, hey, when the next bull market, a bear market comes, we'll go take a vacation. I don't think that's going to be possible. Because it's not like a bear market where it's quiet, like, you know, in 2018 when people are just debating back and forth and there was some buildings. It's like there's so much to talk about because so much it's getting built. It's really a, yeah, it's different this time. This time is different.

Starting point is 01:35:22 This time is different. Thank you. There was a tweet that did make it. to the takes. I think it was from Van Spencer where like you're not supposed to count your net worth from like so like my net worth from the peak of the 2017 bubble to the peak of the 2022 bubble was one number. But he's he tweeted out the actual thing that you should count is like your net worth from the bottom of the bear market to the bottom of this bear market. Oh cool. Yeah, right? Like interesting interesting perception right. And when my net worth hit zero, so I'm up an infinity amount of percentages

Starting point is 01:35:52 since the 2017. Anyway, some perspective there. But yeah, like this bear market, different this time. I think that's a good take. Definitely. Yeah. Yeah. Ryan, what do you bullish on?

Starting point is 01:36:03 I got to say optimism. What a fantastic air drop, right? It's like the second largest in history in terms of, like, almost the first largest in history. Potentially first largest, yeah. Potentially. And this does something that Uniswob didn't do, which is it incents the migration to you later to, which means it's incenting more building, incenting more public goods. in sending less congestion on Ethereum main nets,

Starting point is 01:36:26 like actually solving the scalability problem that we've all wanted solved for a long time. And it's here and it's working. And man, I've just been using optimism and Arbitram 2 and other layer 2s. And they just work really well. It's just like I'm blown away by how well all of this stuff works at this point in time.

Starting point is 01:36:46 And again, back to the this time it's different. Last time during the B market, all we had were vague promises of scalability. Okay, like there's this thing called state channels and the radio network and like plasma and like loom and all of the and then sharding might be on the horizon. But it was so distant. It was a lot of vapor, to be honest.

Starting point is 01:37:10 This time we actually have it. So I'm excited about that, David. And I'm excited about air drop opportunities because I would far rather communities start to give away this land, right now during the bear market when it's a bunch of settlers, not a bunch of liquidity locus that are jumping from chain to chain, like when it's relatively quiet and when the true community has stuck behind to actually start building on these things and settling on these layer two. So I'm actually glad that all of these airdrops are happening now because it's happening to,

Starting point is 01:37:45 I guess I would say the true community and not the speculators. and the traders of the world. So optimism is here. Air drops are here. Layer 2 summer, even though it's happening during a bear market, it's better that way. It's still summertime. That's what I'm excited about.

Starting point is 01:38:03 It is still summertime. That's right. That's right. So that's it, man. You want to hop to the meme of the week? Meme of the week. Let's do it. All right, what are we looking at here? This is your meme. I thought this was hilarious, but maybe for different reasons than you did.

Starting point is 01:38:16 Yeah. This is like a CNBC poll like on Twitter and it goes, is inflation infecting your family? So Americans were pulled. And 100, yeah, is inflation affecting your family? And 122% of Americans said no. And 195% of Americans said yes. I thought that was pretty funny.

Starting point is 01:38:35 This is on CNBC? I mean, no, this is, I'm pretty sure this is Photoshop. I'm pretty sure this is edited. Okay, so this wasn't actually, didn't actually happen. All right, the reason I think this is so funny is because it's just like, hasn't the world gotten so asinine where you like look at this and you can actually like this could be a poll that somebody runs. I don't know. The 2020s just feel. This was like, oh, like you actually didn't realize it was fake because the 2020s are just surreal. I don't know.

Starting point is 01:39:00 Or it could be fake. Like the question of the 2020s is like whether it's fake or not, does it matter? Does it even matter? It's like this, there's just such an absurdist undertone to the like the 2020s and all of our existing, you know, structures and institutions are kind of eroding and becoming untrustworthy. So this question almost like, they answer this question almost makes sense in the 2020. Maybe I'm over analyzing the meme, David, but like that's the way it hit me. Yeah, yeah. No, that's right. That's all we got, man.

Starting point is 01:39:32 Hey, next time, are you going to be in your new place when we do this roll-up? Maybe. I need to figure out, I won't have a desk there yet, but I could go buy a desk and then put it there. So, TBD, TBD. If there's a nice big brick background. Oh, so if you don't have a desk, though, you'd like do it in a studio somewhere? Did you find that place?

Starting point is 01:39:50 Yeah, I'm subletting a friend's room. So I'm subletting an apartment. And so, because that's where a bed is. Still won't have a bed. But like I still have my apartment. So I'm going to put my shit in the apartment and we'll go from there. So TBD. All right.

Starting point is 01:40:01 So next week, guys, the first roll up, David broadcast from New York City from Brooklyn. That'll be hitting you next week. Of course, as always, guys, none of this has been financial advice. ETH is risky. Crypto is risky. You could definitely lose what you put in. But we are headed west. This is the frontier.

Starting point is 01:40:17 It's not for everyone. but we're glad you're with us on the bankless journey. Thanks a lot.

Bankless - ROLLUP: OpenSea Arrest | Optimism OP Airdrop | Kanye West NFTs | OpenSea Arrest | Solana Halted | ETH 2.0 Merge | Velodrome

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