Bankless - ROLLUP: Rate Cuts! | ZK Breakthroughs | Farcaster’s Pivot | SEC Onchain | NYT’s Stablecoin FUD

Episode Date: December 12, 2025

The final Fed meeting of 2025 delivered a surprise rate cut, but the real story is how the market is reacting. In this week’s Weekly Rollup, Ryan and David unpack what the new policy shift means for crypto liquidity, why regulators across the SEC, CFTC, and OCC are suddenly embracing onchain markets, and how Tom Lee’s massive ETH accumulation is reshaping sentiment. We also get into Ethereum’s growing momentum from ZK advancements and blob upgrades, the ZKsync Atlas rollout, Base’s bridge drama with Solana, and Farcaster’s pivot away from social. Plus, the rise of tokenization, new prediction market rails, and whether this week marks the first real cycle turn for Ethereum. ------ 📣REYA | ETHEREUM FOR TRADERS https://bankless.cc/reya    ------ BANKLESS SPONSOR TOOLS: 🔵COINBASE | ETH & BTC BACKED LOANS https://bankless.cc/coinbase-borrow 🪙FRAXNET | MINT, REDEEM, & EARN  https://bankless.cc/fraxnet 🦄UNISWAP LABS | SWAP NOW https://bankless.cc/uniswap-labs 🛞MANTLE | GLOBAL HACKATHON 2025 https://bankless.cc/mantle-hackathon 💤EIGHT SLEEP | IMPROVE YOUR SLEEP https://bankless.cc/eight-sleep ------ TIMESTAMPS & RESOURCES 0:00 Intro 5:01 Markets https://x.com/EricBalchunas/status/1998424357232922883 https://www.theblock.co/post/381737/bitmine-13-2-billion-holdings-eth-treasury-expands-november-slowdown https://x.com/RyanWatkins_/status/1998529576331522334 https://x.com/MikeIppolito_/status/1998495400869900626 https://www.cnbc.com/2025/12/10/fed-interest-rate-decision-december-2025-.html https://x.com/jameslavish/status/1998835306800505140 https://x.com/KobeissiLetter/status/1998407015756964343 https://x.com/JustDeauIt/status/1998905919577452765 24:52 Farcaster is pivoting to a wallet https://farcaster.xyz/dwr/0xd29fe760 https://x.com/DefiIgnas/status/1997915182073626802 https://x.com/eth_call/status/1998406182092906534 http://x.com/nic_carter/status/1998813611997745386 https://x.com/TrustlessState/status/1999134280757235767 37:11 ZK … early stage of unleashing Ethereum’s vision https://x.com/zksync/status/1996678308214264145 https://x.com/zksync/status/1996678311997853752 https://x.com/StaniKulechov/status/1996990055043223659 https://x.com/zksync/status/1998405700637356056 https://x.com/Celo/status/1998780366988128562 47:06 Did Base launch a vampire attack on Solana’s liquidity? https://x.com/jessepollak/status/1996750308933091359 https://x.com/vibhu/status/1996698682545107247 https://x.com/0xyoussea/status/1997763313909092415 https://x.com/solana/status/1999035191323759024 52:30 Ethereum's first Blob Parameter Only (BPO) fork is now live on the network https://x.com/i/status/1998936032314523977 https://dune.com/hildobby/blobs 56:17 Regulators are doing a complete 180 https://x.com/OndoFinance/status/1998015670278148283 https://x.com/coinbureau/status/1997128653650657338 https://www.coindesk.com/policy/2025/12/08/cftc-launches-digital-assets-pilot-allowing-bitcoin-ether-usdc-as-collateral https://x.com/joechalom/status/1998421401049710686 https://x.com/WatcherGuru/status/1998379541132402987 https://www.fdic.gov/news/inactive-financial-institution-letters/2023/fil23001.html https://x.com/USComptroller/status/1998793576663187561 https://www.whitehouse.gov/presidential-actions/2025/08/guaranteeing-fair-banking-for-all-americans/ https://occ.gov/news-issuances/news-releases/2025/nr-occ-2025-123a.pdf https://www.bankless.com/read/news/occ-calls-out-americas-largest-banks-for-politicized-and-unlawful-debanking-behaviors https://www.theblock.co/post/381815/sen-moreno-calls-crypto-bill-talks-decently-frustrating-as-senate-races-toward-year-end-goal-posts  1:05:03 The New York Times put out an anti-stablecoin explainer piece https://x.com/0xDeployer/status/1997754736158900440 https://x.com/nic_carter/status/1997866686439928004 1:06:50 Gemini can now offer prediction markets in the US - Stock Surges Nearly 14% https://x.com/gemini/status/1998880024401973615 https://x.com/gondorfi/status/1998754620416344483 https://gondor.fi/ 1:07:49 Meme of the Week https://x.com/Bankless/status/1998064876892442788 1:09:36 Closing & Disclaimers ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures

Bankless Nation is the second week of December's time for the bankless weekly roll-up. We got the latest Fed meeting in the last one of 2025 is now behind us. We got a rate cut. Okay, rates went down. So can we be bullish now? I don't know, maybe. Depends what the prices are telling us on the week. Actually, I don't know, David, are we, like, I don't know if we're flat or if we're down on the week or we're up.

I just like, I have no, I have no sense of this. This is the information that people really tune in to the podcast to really get. I know. If you want to be bullish, you can be bullish, Ryan. Okay. That's okay. That's okay. I'll give you some things to be bullish about.

We're going to talk about ZK technology really maturing to the point of actually unlocking synchronous liquidity across the Ethereum roll-up design space. This is a ZK sync innovation. It's going live. It is live fixing some of the fragmentation problems that we all know Ethereum has had, which is pretty cool. You said that S-word, though. You said synchronous. I'm not sure if it's synchronous. It might be async, David.

As I understand it. Layer 2s get to tap into layer 1 liquidity on their layer 2, which means we don't... Is it atomically composable in a transaction? I don't think. Not quite. It's async. Not quite. It's happening at some...

But layer 2s don't need their own liquidity anymore. Okay, so yes, maybe it's not synchronous, but it is one... There's one liquidity pool downstream of this innovation. I'm sorry if you're getting into the details. Let's just be bullish. It's bullish. Yeah, I got some things for you to not be bullish about. Crypto-social.

We got some news around far. far castor quitting social and focusing onto wallets as it turns out crypto has always been about assets and trading assets as we're going to talk about that and what that means and then also Ryan's going to take us down perhaps memory lane about all of the three and four letter agencies that have done a 180 pivot when it comes to the regulation around crypto and so I'm excited for that part of this roll up yeah especially this okay this week SEC chair Paul Atkins the anti-Gunzler said this this is a direct question quote I'm going to give you. You ready for this? All U.S. markets will be on chain within two years.

Wow. He used the term on chain. He doesn't mean 100% of the markets, but there will be an instantiation of all U.S. markets on chain within two years. Which is a very short amount of time. I don't know, David. All means all. He's saying all. We've got to take it all. Also, it's pretty funny. The OCC, remember they were debanking people last cycle? Well, this is a lot. Well, this time. They're getting angry at the banks for debanking people. They're doing some finger wagging I to tell you about that story. And a New York Times article writes about stablecoins. It was a stable coin explainer piece, except for the fact they explained how stable coins are bad and dumb and we shouldn't have them. Wait, I thought the world loved stable coins. Not the New York Times.

David, before we get in, we got a shout out our friends and sponsors over at Raya. This is a perps trading platform. Tell us about it. Yeah. So there's a just a, oh, overall a problem in the perps trading space. You either get the speed of a centralized exchange, which traders don't just love, but kind of need, in order to be competitive. Or you can get the security and property rights of a decentralized exchange, but that's often way too slow for any amount of meaningful activity in the perp space.

Raya is closing that gap. They have built a base roll-up with ZK proofs, sub one millisecond trading. That seems like light speed. Zero trading fees while also inheriting 100% of Ethereum. uptime and security. No sequencer risk and no tradeoff between speed and decentralization. That's Raya.

Now I topped six perpdex driving over $1.5 billion in daily volume. And for all the ethmaxis out there, 20% of Raya's fees burn ether. Burn ether. That's pretty cool. And so there is more information in the show notes, banklist. com.c.c.c. slash Raya, R-E-Y-A to learn more. You know, they're also doing the thing that I know you're a fan of because we

recording an episode that you researched this week is they're doing the ICA. No. Oh. So they're on Korn. They're doing an ICA thing? Yeah. Since we published that episode, I have discovered four more token sales. I think it's on.

I think the meta is on. Or did they announce post the, they list for an episode and they were like, whoa, we got an ICO. Stumbled. Maybe. No, there's four more ICOs since researching that article, token sales that are out in the public. So a little teaser to the bankless. We're going to put some effort into aggregating all of the information, standardizing a lot of the information that ICOs are putting out.

So informed investors can be informed about I guess. You just kind of tell me which ones I should buy and which ones I should. I'm not going to do that. Yeah, it wouldn't be financial advice on a bank list. But give me some pricing advice. I'll give it to you in the DMs. I'll give you financial advice in the DMs. And I will screenshot those and tweet them out as a separate product for bankless citizens.

Bitcoin price on the week. Don't keep us guessing. Why are we? No one knows. No one knows until this moment on the weekly roll up. Bitcoin is down 3% on the week to basically exactly $90,000. Yeah, down $2. It was up.

It was up yesterday. Well, it's down today. It's down today. People are pissed off about it. I saw a tweet of the Bart. Do you remember the Bart formations of 2018 through 2020? Are we getting those back? Can you describe that?

Use your fingers to describe what it is. So the Barthead is. Like, it's going flat, and then it goes vertically up, and then it chops around, and then it goes vertically down. Yeah. And basically, this is indication of just some pretty low liquidity market. It's the most annoying graph, I would say. Like chart. Like, chart and pattern.

First you're bullish, then you're bearish, then you're bullish, then you're bullish. Hate barts. Yeah, we hate barts. Are we in barts season? Is that what we're doing? For the last 10 days, we've been in bart season. Yeah, we're just grinding around. Yeah.

It's ever since 10-10, Bart season has been around. All right. Well, I've got something maybe a little bullish for you if you're a trader, but you don't like to trade, which is a product that is called Bitcoin After Dark. Okay. This is not a new podcast. Sounds like a TV show or something. This is an ETF. A Bitcoin After Dark ETF.

It sounds like a Bitcoin themed lingerie brand. Okay. So what does this thing do? This is real. Okay. Bitcoin After Dark is a newly proposed. post-ETF concept that would give investors exposure only to Bitcoin's overnight moves. So you know how the market closes, at least the U.S. equities?

Market closes at what, 4 p.m. every day? Is it 4.4.30. I can't remember. 430. 430, we'll say. 4. I don't know, actually. Bitcoin still trades after that. Did you know? Like how God intended. Yeah. So what if there was an ETF fund that only held Bitcoin during the nighttime when

U.S. markets were not trading. And then it sold it the next morning. That's what you get in the Bitcoin after dark products. It buys and sells Bitcoin every day. It's just a nighttime product. It only holds at night after hours. You're paying trading fees twice a day on a huge amount of size. Look, man, it's innovative. Okay. Who says TradFi doesn't innovate? This is the type of ETF product. I think a lot of people have been waiting for is just after dark Bitcoin. What do you use this for? What kind of position are you trying to express by only only Bitcoin during after-hour moves? I don't know, but Eric Belchunis is bullish on it. He said, I'm glad they're innovating, basically.

What does he say? Is that innovation? Yeah, you know, this is something you'd find in like a defy product, I think. Some sort of algorithmic trading thing. And now we're getting them packaged in ETS, which is just hilarious to me. I'm only bullish on Bitcoin when the sun's down. Want to recommend your family at overrun. Christmas. All right. ETH price, I got to imagine, also down?

No. Flat. Flat. Okay. Zero. Zero percent. Move on the week. Yeah. So ether doing, okay. Yeah, we're going to talk about this later. But I think because everything else was down and ether was flat, there was a moment where it was up. Like, people are bullish. Ether, bullish Eater on the timeline this week. Well, I'll tell you why. Like, one person who's been consistent, relentlessly consistent, relentlessly bullish is Tom Lee. He's been the Ethereum hero of the cycle of 2025, he now owns 3.2% of all ETH supply. Remember? I didn't think he was

serious when he came on bankless and told us, I'm going to buy 5% of all Eith. And now it's less than six months later and he has 3.2%. Tom Lee, how do you do it? Who do you think is more responsible for Eth's market cap? Tom Lee or bankless? I think this cycle, you've got to give it to Tom Lee. You got to give it to Tom Lee. All right. right. Tom Lee, you can have the crown. Heavy lies the crown though. You will give you the crown, Tom Lee.

He earned it. All right. You know, all the percentages of Eiff that Bankless has bought over the years, I'm sure. Okay. Anyway, so he bought about $300, no, $420 million worth of Eave last week. Yeah, same. The Bear Marquis. Same.

Same. Yeah, so he's still doing his part and continues to stack. I don't know where he's getting all the money. But let's talk about the same. sentiment shift you were saying. Now, this is, you know, our world is kind of the crypto-native world, and that's dominated still by crypto-Twitter. And so when you're talking about sentiment change, you're talking about on crypto-Twitter. And there was some of that this week. Former skeptics, Theorem Skeptics, became bullish, became supporters. This was a tweet that kind of encapsulated

it for me. This is venture capitalist and investor Ryan Watkins, who has previously notably very bullish on ether, very bought into the whole triple point asset thing. Back in the day he was? Back in the day, back in 2021, 2022. Four or five years ago? Yeah. Then his funds backed up the truck, as I understand it, on Solana in 2023 and got very bullish Salana, very bearish ether.

Okay. And now, but now what's happened, he says, the more time that passes, the more I believe crypto natives have completely lost the plot on ETH, and it's becoming impossible to replicate the product that Ethereum has been. built. He goes on and he talks about product market fit for Ethereum. He talks about network effect. He talks about entrenchment. He says Ethereum is like Bitcoin. It's got this kind of immaculate conception type of story. And he also says now that Ethereum has really gotten its shit together from a shipping roadmap perspective, I guess he's talking about sort of the future prospects of

the roadmap and also the fact that Ethereum shipped to hard forks this year, he's like, now it's Ethereum's game to lose, and I've changed my mind on that. And that was just one of the, I guess, tweets that I read this week that it embodies this sentiment shift. Yeah, the other one comes from Mike Abolito, who just puts it very succinctly. Ethereum is in the best-looking place that it's been in four years to me. So this is kind of, this take, the sentiment is going around. I saw another tweet. I saw it in the agenda, but it was something to the effect of, you know, Ethereum last cycle,

of this most recent cycle, 23 to the 25-ish era of crypto, which I think we're calling a cycle now, is where Bitcoin was in 2021, the 2021 cycle, where like, you know, Bitcoin did pretty well in 2021, but it was Ethereum cycle.

It was kind of a miss. It was kind of a miss cycle. It did pretty well. It definitely led the market, so it's hard to call it a miss for Bitcoin, but it was really Ethereum cycle. And a lot of Bitcoiners felt that. They felt that just like,

they had to just, a negative attitude about that cycle because it was Ethereum's show. And I think you can play that forward where Ethereum got skipped this last cycle. It was Solana that really stole the show. And actually, Bitcoin resurged because of what it was very, very good at, just being a 21 million hard-cap asset. I guess they decided in 2021 to just double down, triple down on narrative and institutional adoption. And that was really what gave them such a successful cycle this time around. Yeah. Now, I think is that this is. is the stars could be aligning for a very similar thing to happen to Ethereum,

where just like all of Wall Street, as Tom Lee says, Wall Street has picked Ethereum to do all of its stuff, mainly tokenization being the very big narrative. So clarity, very good for Ethereum. The Genius Act, very good for Ethereum. Clarity's not yet through you. But like I think the stars could be aligning for some of Ethereum's properties that really held it back last cycle to really shine through this next coming cycle. I remember you and I had a meeting with just a call with Chris Berninski like two years ago.

Yeah. And he said something that both you and I like didn't really like, which is like this cycle could just skip ether. Yeah. And that's what, that's what happened. Yeah. You know what, Ryan? Like, cycles over. Oh, is it?

Wait, I thought you told me there was no cycles. Last week you told me there was no cycles. Cycles over, Ryan. And now we're on to the next one. We're on to the next cycle. So like the whole cycle that skipped Ethereum is in the Revere View mirror now. Like we're looking forward to like the next phase of crypto. I, I...

And to me, the next phase of crypto is tokenization on Ethereum. Okay. So, but what accounts for some of the sentiment shift? And the reason we highlighted the tweets that we highlighted is because previously, these have been more Ethereum skeptics, certainly Ryan Watkins has. Like I belito, I think he's been pretty, he's basically like Bitcoin is a special snowflake Ethereum, ain't nothing special. Show me how it produces revenue.

And then I'll believe you, basically. So kind of a doubting Thomas on, on E. from a monetary perspective. Some of that sentiment is shifting and it's happening all of the sudden. Do you have an explanation for that? Well, I know Mike Abolito definitely agree with Ryan Watkins' concept or idea

that you can't really replace Ethereum. And in a very world of very saturated smart contract layer ones, the only one that truly is differentiated is Ethereum. But that was true a few months ago. That was true like three months ago, four months ago. Yeah. I think the market and the attitude

is reorienting Ethereum from being comp to Salana to comp to Bitcoin because of that whole like immaculate ICO, decentralization, censorship resistance, like Ethereum, the properties of Ethereum are finally starting to show through. And this is always going to be what was happened. Like Ethereum is in it for the long game. And it is the tortoise, whereas Solana was the hair.

And now the hair is like doing the whole end of story like nap. And there's Ethereum, just chugging along. Not to over explain it, but I think it could be like three factors. Factor 1 is Tom Lee. Yeah, you can't. Just institutional purchasing, the message going out there, like buying it because it's a store of value. You can't replace Tom Lee, and that's markedly different, okay?

He is stacking up to 5%. The second thing, I do think that Ryan is right, in that we have seen much more builder momentum and clarity around the Ethereum roadmap, and that is a change. Yes, yes. I haven't seen this much momentum in building and Ethereum. So much of a sense that, okay,

it's getting it shut together since like 2022. Yeah. And the third thing I think is people are seeing the L2 roadmap start to come together. It's not quite there. There's still the problems exist. But we had this week, Lighter overtook hyperliquid in terms of it. Lighter is a perps L2 in terms of volume, Perks volume. And so people are seeing ZK, people are seeing the L2 roadmap start to work.

Some of the fragmentation issues have a power. to resolution and they're just getting more bullish on the roadmap too. I think that stuff might account for it. Some skeptics might say, well, it's just because ETH price outperformed on the week. But I don't think there's some fundamental changes here too. I do think it was a decent amount of Eith price. Okay. I do think that that has something to do with it.

But why did it outperform on the week? Like, what was some of the reason? Well, because Tom Lee bought a billion dollars of Eath. Thanks, Tom. Thanks, Tom. total crypto market cap 3.15 trillion dollars so still pretty low

I don't know about you Ryan but I've been buying I've been buying crypto assets and other assets over the last like two weeks not financial advice on let's talk about it I was saying what I was doing I know I know and I'm getting ready

to package everything that you're doing and selling that as a product you want to talk about what the Fed is doing so this was the FMC last FOMC meeting of the year and there was a rate cut. Yay. We got 25 bips.

Yay? You think, okay. So David's in favor of rate cuts. He likes easy money policy. Yeah, I like easy money. He's got crypto bags. Who doesn't like easy money? I don't know.

I think, well, maybe it's not good for us. How about that? Maybe it's not good for the U.S. to have easy money all the time. Yeah, but it's only, you know, 25 bibs. 25 bips. Never hurt anyone? Yeah, 25 bips all the way to zero. I don't know where we're going, but we're at between three, three,

3.5 to 3.75% and the framing of this, because it's always you got to justify your bips, whether up or down with a story. And the story was because there were slower job gains, slight rise in unemployment, and inflation, that's somewhat elevated, but like not so bad. So we can cut the rates here. The vote was 6 to 3. Of course, one governor, this is maybe Trump's favorite. Stephen Moran, he wanted a larger cut. He wanted, to go to 50 bibs. Isn't it Stephen Mirren? Miran, yeah, thank you.

That's probably right. So that happened. And also a little bit of, I'm not going to call it QE because it's not, but a little bit of Fed balance sheet adjustment up is happening. Not QE though. Not QE. It's actually kind of not QE because it's more on the T-Dill side of things.

No one knows what QE is anymore. Well, Powell stressed that these, bill purchases, oh, let me tell you what he did. So the Fed is going to buy $40 billion. So this line is going to go up about $40 billion in the next 30 days. So that's not in the trillions. Like you see this is measured in the trillions, right? Pretty billion. Just a little bit just a little bit. Just QE when it was going full steam ahead. You know, it's like 800 billion. Yeah. Yeah. So we're talking 40. And it's all treasuries. So these are short duration bonds. True QE would be a bit more on the long duration side where you really get to kind of adjust

rates around this and so a little bit of that is happening and Powell emphasized that this is just temporary basically we're just how do you say it we're just trying to balance what's the word he used it's policy

neutral I don't know he's not a big deal it's not QE 40 billion dollars seems like such a small number I'm just kind of like why why bother? Yeah why bother well Powell will not be the Fed chair for much longer. His tenure does expire, and Trump was actually asked about this in an interview.

I'm so glad he was asked. Let's play it. I want to ask about interest rates because a lot of Americans agree with you that they're too high. You're going to pick a new Fed chair soon. Is it a litmus test that the new chair lower interest rates immediately? Yes. Oh my God, the timing on that. I don't even, maybe that was edited, but just like the speed at which the yes comes out of that man's mouth is just He just says what's on his like he just he's a he is an open ledger totally which I appreciate Yeah, I mean this would be you know most politicians would be like well I don't want to seem like I'm Influencing you know independent monetary policy he's like I want easier money I'm totally So what are the markets to? S&P went up crypto closed red on the day the

two-year and the 10-year Treasury went down. Dollar went down a little bit, 0.3%. The big question here is like easy money, right? It seems like this is easy money, rates going down. It seems like that dove-ish monetary policy should also be good for risk-on assets. Michael Nato, always with kind of the contrary take around this lately, says that doesn't necessarily mean it's doveish for risk assets. So first of all, it's only $4.4.4.5. It's only $4.4.5.5.5. billion dollars. This was short duration. So this is not the type of QE that we've seen before with long duration bonds. So there's not a suppression of the long-ended yield. And broadly, financial conditions are easing. So he said, if this was risk on the way we would want it,

the way you wanted, David, that you're excited about, I would expect to see long bonds dropping and more of an impulse from Bitcoin. So he would have expected Bitcoin to kind of react. to this. Although I do think I haven't looked at gold prices. I think maybe they were up a little bit. I don't know. I'd have to go check on that. To reiterate, I am a fan of the slow long-term rate cutting without any sort of like material changing, of course, which I actually would consider like Donald Trump coming in with Edward Sissor hands. And I don't want him to do that because I don't want him to just, like I've said before, we've got a good thing going. Like if you look back historically over the last two years, prices are up.

And I want them to stay on that slow grind up. And I don't want anyone to disturb anything. So you just want the president to be cool, calm, collected, and highly rational. Yes. No problem. That's easy. Don't shock the system. Like, we got a good thing going.

That's going to go great. We'll see who he nominates. David, what else are you talking about? Coming up next, we're going to talk about crypto-social forecaster pivoting to just crypto. Pivoting to a full wallet. We're going to talk is crypto-social. over and were we naive to even think it was a thing in the first place. And then also did the ZKSync upgrade fix Ethereum's layer two fragmentation problem. We're going to talk about all of this anymore.

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Coinbase will not treat borrow transactions as taxable events. Manage loans directly in the Coinbase app with ease. It's currently available to U.S. customers, except New York. And additional collateral types and increased loan limits are coming soon. Want to learn more, click the link in the show notes or visit coinbase.com slash borrow. Dan Romero, the founder of Warpcast and Farcaster, on Farcaster, announced a major strategic pivot to the platform about how Farcasser is shifting from a social app with an optional wallet to an on-chain identity and trading platform centered around the wallet.

So rather the social being the center of Farcaster, the wallet, will be the center of Farcaster. and all these social elements will be focused around the wallet. So a lot of the same products that Farcasters already is built, but really reorienting what is first class in the Farcasser ecosystem. And really the message that on-chain social or decentralized social is a service to add onto a wallet is kind of the big takeaway here. It's like you can't really do, according to Dan, they've tried. They've tried to make on-chain social, decentralized social,

like the first class citizen of their ecosystem? And he said, no, it's the wallet. The wallet is actually the center of the ecosystem. And all of Farcassar's engagement and uptake has really come from people doing trading or token stuff. And so he thinks it's his decision to reorient the Farcasser ecosystem around the wallet. Yeah, I mean, wallet first approach rather than social approach,

whereas previously they would have been a reverse. They were a social network with a wallet. They had pretty big ambitions around this. and they've been doing it for five years, and they've built through multiple bear markets. I don't think it's a good take to say that they haven't tried. This is, this is Dan. He said the goal has always been to build an ad-scale,

decentralized social networking protocol with one billion people using it every day. They were trying to get to Twitter-level usage and saturation. How are they doing that? Well, it's Twitter, but it's decentralized, what's the take? You own, as a user, you own your own property. any client can build on top of it. We were protocol first.

That was the pitch, and it didn't take off. And I'm curious your thoughts on why it didn't take off, because I do think they genuinely tried. And they aren't the only team that has tried. And there's been, like, you know, Lens Protocol. There's been a number of crypto-social networks have tried. This is one of the most legitimate, buildiest teams actually working on it, and they couldn't make it work.

My take is it just wasn't ever It's so it wasn't ever 5 to 10x better than Twitter In order to get kind of the network And like the network effects in social networks Are surprisingly strong Yeah I mean you and I have tried out Farcasser I've gone on to Farcasser four times over the last two years And does it ever is it ever sicky?

Not really And why not? Like I went in series where I'd be like okay like I'm gonna use Farcaster this work It's kind of like a fitness regime Yeah I'm gonna do it I'm going to do it. I'm going to build here. And I just kept getting pulled back to Twitter. And that's, and despite the fact that X is kind of shitty. Yeah, X is pretty shit. It's bought, it's bought farmed. But like, that's still where things happen. News breaks.

Conversation is happening. The people I know are that, like, it's the center point even for crypto conversation. Why do you think this didn't work? Partly because of what you just said, X network effects are very large. But you could also just look kind of a graveyard around Crypto Social with other Web 3 subjects. Like there's a lot of Web 3 subjects that are just tombstones.

On chain gaming, for example, is one of them. Just like, generally speaking, Web 3 hasn't done well as a concept. I know Chris Dixon's whole like read-write own thing, which that's what he'll equate to Web 3 is. It's like, yeah, you get to own stuff. Like, yeah, that's true. That's totally what crypto is.

But like there was a on-chain maximalist position where I was like on-chain gaming and on-chain social and you know pick your thing

and you're going to move it on chain that never really has happened and they kind of coincides with one of those articles that went around crypto Twitter of this one guy

founder of Ribbon Finance wrote an article saying like I've dedicated eight years of my life to building out this casino and now I have ragrets I know you read Nick Carter

counter to this. And I think that's a clue. So Nick Carter wrote an article entitled, I do not regret spending eight years of my life in crypto. And he actually talks about the five kind of canonical use cases or like reasons. To Loi. He's throwing some line in there. He's such a, was a classicist.

Yeah. Anyway, so he said there's really, there's like five. reasons or like moral virtues or goods that like crypto is providing the world. Number one, the sound money thing, the hyper-bitcoinsization of the world, or if you're an ethmax see, the hyper-etherization of the world. Number two, make everything smart contracts. You take existing business logic, you turn this into smart contracts. You know, maybe D5 fits in here. Number three was what you just said with Chris Dixon. That would be making digital property real. And that's where we get NFTs and Web3 social. That kind of fits there. Number four,

is you take Trad 5, but you make it more efficient, making capital markets more efficient. That's something that crypto can do. Connected to number two. Cobal mainframes, and we're upgrading that. And then number five is broadening financial access. So giving everyone basically a bankless bank account and you can come on the world's greatest financial system. Of course, all of these are tied together. So it's sort of a van diagram of interlinking circles here.

But number three, making digital property real. We had NFTs. You mentioned Web 3 gaming, the whole Web 3 concept even of what social is wrapped up in there. Are we giving up on all that? Are we like growing up and just realizing that

maybe crypto can't do all of the things we hoped, but it does do some of these things? Are we giving up on the Web 3 thing? I'm not. I think there is a more suitable, suited order of operations on some of this stuff. like sound money obviously comes first.

And Bitcoin obviously comes first. And after that comes something along the lines of defy and smart contracts and putting Wall Street on chain. And some of the big aspirational, kind of grandiose ideas that I think we all got starstruck by both in 2017 and 2021, on-chain gaming and on-chain social being two fantastic examples. Like I think we'll kind of get there and we'll get there last. We'll get there at the end. We'll kind of like go full circle in like 20.

40. We'll look at some of the stuff going on and be like, oh, that's on chain gaming and that's on chain social. And actually it kind of just like showed up. It kind of just sneaked its way into the ecosystem without actually anyone really building it in particular. We're kind of just like end up there to kind of realize that a lot of the original ideas actually did end up playing out. Not in ways that we thought we didn't get there directly, but we did kind of get there in a roundabout way. And I think we kind of have to just do a few things first. We have to legitimize. crypto, get stable coins into people's wallets, give people wallets in the first place, you know, get people using the finance side of crypto. And then all of a sudden when like literally everyone is using a wallet on a day-to-day basis in one way or another, whether it's through,

I don't know, like Robin Hood or Coinbase or everyone's got a wallet somehow, then all of a sudden, like, it's going to be a lot easier to do on-chain gaming and on-chain social than it was prior. But first we have to kind of go through the correct order. or reparations. And I think we just were too early on a lot of stuff that we labeled Web 3 in 2021 and 2022. I think part of Web 3 that made sense to me was the part that was around property and property rights and the part closer to kind of like money and ownership and everything tied in with kind of like finance fits that. The part that made a lot less sense and never had heat around it was like the we're going to take the internet thing but we're going to make it

decentralized and acting as if decentralization was like a feature and it's not decentralization is just anti-corruption technology and it's not it it is not a feature right if you take that and you build sound money on top of it because you need anti-corruption technology well then you have a feature but the feature is like the sound money yeah it's not decent decentralization just gets in the way for a lot of things. Yeah, yeah. It's actually inappropriate in most circumstances. Yeah, and I think we went, some aspects of crypto went in the wrong direction.

But I also agree with you. Like, I think in the fullness of time, a lot more will be in covering. So, like, part of maybe there is a version of Web3 social that works, and it's probably around kind of like more like property rights-y type stuff. But also it could be the case that the time is not now and the time will be later. But one thing you said about this article was that you said you strongly resonate. You came into crypto as a starry-eyed dreamer, and seeing the good future that crypto could bring. But you said, I see much less of that in me now.

I was also dumb and naive back then. You were dumb and naive back then. So are you smart and wise now? Like, what do you think is different? Oh, incredibly. I mean, in 2017 when I got into crypto, I didn't know shit, dude. I fully believed every single ICO.

Every narrative? Did you invest in a DAG? I did invest in a DAG. You know what I also invested in? Substratum. Do you remember that one? Yeah. It's something to do with decentralizing web pages or something like that.

I can't remember you. I bet you invested in the interoperability networks too. Probably. Yeah. Yeah. Yeah. Yeah. No, I didn't know shit, dude.

And, yeah. And yeah, I mean, that was me growing up. And I feel like that's probably how everyone gets into crypto is like, this is going to revolutionize everything. Not only is it going to revolutionize everything, it's going to revolutionize everything tomorrow. And I need to buy it right now and tell all my friends about it. And then like you realize, you know, I know you know this, Tyler Cowan's main argument about why AI is just not that revolutionary.

Yeah. Is that it just takes a while for new revolutionary technology to get to, you know, to the rest of society. It takes a while. Well, it's because the rest of society, things move a lot slower than the tech, right? It's like regulatory is an example of this, right? The existing regulatory systems have to adapt

to see smart contracts as some sort of law type of thing that can be respecting a court system, right? All that, the human stuff takes so long. That's his point around AI. Yeah. And like, I live in New York City, which is a very fast-paced city. I worked in crypto, which is a very fast-paced city.

industry. Most crypto people use AI, which is also pretty fast-paced. Have you ever talked to somebody who, I don't know, lives in like Oklahoma? Doesn't change very much. They, their life is mostly the same year and year out. Yeah. And like the rest of society, like we're in a very, we go fast here. We go fast in crypto and we have very fast. We're in a bubble. It's a bubble, yeah. The rest of society doesn't go that fast. And it takes time. No, it takes time. I see that's true. But you also said this, crypto will still do the things I dreamed it would when I first entered just much slower and more quietly than I originally thought. I kind of resonate with this too. I feel like simultaneously, crypto is doing less of what I thought it would do and also more. So less in terms

of total expressivity of all the use cases that I thought it might do at one point in time. But the things that is doing is to a deeper level and like in a way that seems so full steam ahead And it's accomplishing more. Like the speed at which it's actually revolutionizing Wall Street and saturating that, like getting the genius bill signed, these are huge things, milestone moments. And so at the same time, it's come farther than I thought it would when I started in crypto, but also just in a more limited. In a different direction.

Yeah. Anyway. Let's talk about ZK, David. So part of maybe why people are bullish Ethereum, as we talked about earlier, is, is ZK technology. So tell us about this. This is ZK Sync. They're deploying ZK technology

in a layer two and unlocking some pretty cool things with, they call it the Atlas. That's their name for this network. Yeah. Okay, that's an upgrade. Tell us about this. Yeah, it's kind of,

it'll probably be ZKSing's biggest upgrade ever, maybe. Mainly because it's just like kind of fulfilling one of the early visions of ZK and ZK Sing, generally speaking. So they went through the Atlas upgrade to transition ZKSync from a single layer to into the elastic network in order to visualize the elastic network.

I want to you to imagine lightning or tree and tree branches, things branching off of each other and new chains are spinning up with an elastic amount of scale. So elastic scale with like permissionless addition of new chains. But the whole cool thing about this

is that whole meta network that whole network of networks all has unified liquidity to Ethereum. Okay, so earlier when we started the episode I said Secretus, I probably should have said unified. Yeah. So the ZK Elastic Network has direct access to layer one liquidity in layer one smart contracts.

And so if you got Ether on the ZK Elastic Chain, layer two meta network, you make a layer one transaction that accesses the business logic of layer one smart contracts as if they were on the layer two. this is a demo so this is a demo so this is a demo of i believe what they're trying to do is they're taking out alone they're on a zk sync l2 and they're taking out alone on l1 ave so

interacting directly with l1 avey in a seamless loop way without having to bridge over correct and you could see in this kind of this is a test environment but this is essentially what the atlas upgrade does is this all feels very seamless. You don't have to move assets anywhere. You don't have to wait. You don't have to bridge. You're in your same wallet if you're in a ZK Sync L2. And you can just get access to all of the defy and all of the liquidity on top of Ethereum. So it feels much less fragmented. And they can do this because ZK proofs essentially, right? Rather than optimistic fraud proofs with long withdrawal windows. And they do some magic with bundling transactions, integrate that in the wallet and it all feels nice and seamless

if you're in a ZK Sync L2, which is a big step. This is a pretty big deal. One of the ways to illustrate why this is a big deal is you've got to know that AVE just loves this just because imagine like ZK Sync not being able to do this. I mean like AVE, please build

and maintain an AVE deployment on our chain for the users. Deploy another thing of AVE. Yeah. Whereas we're now ZK Singh is like, oh, no, we're just going to use a layer one AVE. Like the layer 1 AVE is the ZKSync layer 2 AVE. So that's pretty sick for AVE. Pretty sick for ZKSink users who get to access to Ethereum's layer one AVE implementation, which is the most liquid implementation. It's exciting to me when the builders say it, right? Because like we've got all the infrastructure stuff. But here's Stani. He said from Avey, of course, this is a game changer.

L2 is tapping into L1 liquidity. No need to replicate the same defy ecosystems on L2's and fractionalized liquidity. Well baked. He's a big fan of this model. Exactly the reasons you said. The thing to pay attention to is like this was always going to happen with ZK. There's kind of a race to get here with ZK. Now that ZK Sync has layer 2 users accessing layer 1 liquidity with their ZK implementation, that kind of sets a standard, a ZK standard, that other layer 2s might also want to use that same sort of infrastructure.

This is also going to speed up, by the way, as the ZK proving gets faster and faster and faster, so that we can get cross-chain synchronous composability, This is like the first step to get there. And as more people use ZK Synx technology, and then all of a sudden that technology gets more robust and might become the standard for the ecosystem. That's right.

And maybe we can, on bankless coin another phrase here, like the defy mullet, you remember that? What about the L2 mullet, okay? Where it's a bank in the front, but it's an L2 in the back. And some of that seems to be happening because this is appealing in particular for institutions.

That's who ZK Sync is going after. And these are institutions, I'm like, oh my God, you're doing something in crypto? I can't believe it. And it's hard for me to know how serious they are about it. But look at this. This is the ADI chain that just went live. I'd never heard of this.

Went live with ZK Sync Atlas. This is actually the United Arab Emirates. It's a chain backed by their central bank. Okay. What? Yeah, so a bunch of regional banks in the UAE, a sovereign country, got together and launched this chain, and they have a stable coin that's regulated by the UAE central bank on top of it. So it's all sanctioned. And the idea is that UAE residents can use a digital currency, basically a stable coin, as a bank account, essentially.

They don't even know necessarily they're using crypto. Of course, all of this is private. So part of ZK Sync is it can be. private as well, but then it's all connected to the L1 ecosystem. So if anybody or even some of these regional banks on this ADI chain want to go take out a $100 million money market loan against ABE, they can do that seamlessly without having to bridge. Or provide any user the yield that Avey provides. That's right. What? L2Mullet, baby. That's crazy. That's crazy. Kind of cool. Kind of cool. All right, all right.

Not just ZK Sync building stuff in the ZK world. Cello is also the first Ethereum layer two to use OPZK fault proofs. God, if any new listener of bankers has listened to this. We lost them all. It's going on. OPZK fault proofs using on an Ethereum layer two. Simplify it. What do they actually do?

Okay, so this is the Jello hard fork out of the cello ecosystem. Sello was an OP stack chain. Let me make this as complicated as possible. It was an OP stack chain, which is naturally an optimistic roll-up. So you have the optimistic seven-day settlement windows of non-interoperability, fraud-proofs. But they just did their hard for it, brings in using succinct, O.P. Sucinct, which we've covered before, they're calling it the light version of that, a light configuration of an O.P. Power system by succinct proving network to give the O.P.

Stack roll-up Z-K fault-proofs without turning them into full Z-K roll-ups that prove every transaction dude. Oh my God. Why isn't crypto mainstream? Why isn't crypto? It's really cool. It's cool, though, right? It is basically the story is all of these fault-proof, optimistic roll-up chains with seven-day withdrawals.

They're all going to get upgraded the way cello is upgrading Jello to ZK. We're just not ever going to have to use fraud proofs ever again, and they're just going to be Z-K-proofs. And when there's just one implementation, we don't even have to talk to them at all. Jesus. All right. Let's go. let's go to our next section. We got, this would be a more accessible.

Base built a bridge to Solana, and Solana totally loved it. Three major regulators continue their complete 180 on crypto regulation, and also the New York Times runs a piece on how much they love stable coins. So we're going to hear about all of this and more, but first a moment to talk about some of these fantastic sponsors that make the show possible. Mantle has launched a global hackathon until the end of 2025. The focus is on building the future of real-world assets. From now until December 31, Mantle is inviting developers, founders, and innovators around the world

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Join that community and help shape FRAX nation's future by going to frax.com slash r slash bankless. Frax, designed for the future of compliant digital finance. Base is a layer two chain from Coinbase, of course, and they launched a bridge to Solana. But was this a hidden vampire attack against Solana? Or was this an act of love? They're just trying to get more people on chain, as Jesse always says.

Answer is yes. Answer is yes. So it's a pretty simple, like proprietary Coinbase Base Bridge so you'll just lock up assets on a base controlled contract on Solana, and then base will mint those same assets on base. In theory, you can go the other way, but there's definitely a clear emphasis on the directionality of the bridge. Jesse commented saying,

we built a bridge from Base of Salana because we think the global economy should be connected, and that base builders and creators should be able to access the capital markets on Solana. And so some of the early integrations here include Zora Aerodrome Virtual's Flaunch and relay, these are all base applications that you can now put Salana assets into the base applications. The Salana tokens, they live in a different world pretty much, right? Yeah.

It's all in the Salana ecosystem. There's tons of them, lots of meme coins and such, but it's not ERC20 standard. So none of that exists inside a base. Yeah, so you need some sort of like central operator to coordinate assets across these ecosystems that don't talk to each other because naturally Solana is on the Solana virtual machine

and base is on the Ethereum virtual machine. These things can't communicate. And so the base bridge does, that work of communicating assets across chains. Makes sense. Makes sense. The important thing is, is you can just do this. Base can just do this.

They are both our permissionless ecosystems, and so base did a thing to put Solana assets on side of the base chain. That is not really how the Solana ecosystem community received it. They took more of the vampire attack position here. The founder of a Solana platform tweeted out, these are not partners talking about base. If they had it their way, Solana would not exist.

Jesse, the founder of Base, replies to this on Twitter, saying, what? We just built a bridge to Solana because we think Solana assets deserved to have access to the base economy, and that base asset should have access to Salada. That same person replies saying, you didn't set up a single Solana partner for launch, didn't talk to Solana Foundation for marketing or ops, you just dropped a repo.

And then Jesse replies, which I actually think, there's a bunch of extra context that I'll have to say to help with this. He replies, just for everything, everyone following along here, there was some communication breakdown here that we are digging into and solving, but it's not true that we didn't talk to Salana folks or work with Salana partners. We spent the last nine months building this, including publicly announcing it five months ago. At many point during that time, we tried to get engagement from people across Salana, but folks weren't really interested.

But we did end up with a bunch of great memes like Trencher and Chill House collaborating with us on it. Now, Ryan, I know you don't know what those two things are. Chill House is this Salana meme that ported, as I understand it, poured it ported over to base when base announced this like a number of months ago. And so there was this drama about the Chill House Salana meme now migrating, moving, doing something with base, like taking up this opportunity to move to base. Oh, no. And Jesse supported this. And that caused a bunch of drama. So like this has been, the base Salana Bridge, that was announced for ever go. We talked about that on a week of row. I remember talking about it. That's why I'm wondering why

people are surprised. Yeah. And so the fact that somebody said, uh, you didn't talk to the Salada Foundation, marketing or ops. I didn't know you needed to do that. This all feels really silly to me. And I don't know if this is just like actual drama or it was just stupid Twitter drama. Um, the net of this is Salana, they're doing their breakpoint conference right now, I believe, right? So it's mid-breakpoint. And Base went on stage, or at least Coinbase did. Somebody went on stage. And they announced, this should keep the Salana folks happy,

a way to trade all Solana tokens through Coinbase, through kind of their Dex UI, the Coinbase wallet app. Yeah, similar to how you can trade any token on Aerodrome, which is a Dex on base on the Coinbase front end. They are now just enabling that with a Salana Dex. Don't know which one. But you can now do that. through the

Coinbase front end. I guess they're all friends again, huh? Or maybe that was, I, they'll always be frenemies a little bit, just like everything in crypto, I think. But it is interesting to see Base versus Solanas in these head-to-head fights and competition.

I love the line. You didn't talk to the Salana Foundation. Totally. Okay, Anatoly, just has the last comment on this whole thing. Yeah. He did tweet out that the bridge is bi-directional in code but not in economic gravity. if the bridge just lets base app import Salana assets while keeping all execution and fee revenue on base,

it extracts value from Salada without reciprocating. Is there an alignment notion of alignment coded in here? Yeah, I think so. Is this alignment? That sounds like alignment to me. Economic alignment is another version of alignment. Yeah. And pretty important to Anatolia, I imagine.

Let's talk about some Ethereum news. I'm having too much fun. Yeah, I mean, I barely paid attention to that. So thanks for explaining you all. Ethereum Fusaka upgrade shipped last week. We talked about it. Maybe one of the things to emphasize and underline was BPO's blob parameter-only upgrades. Here we fucking go.

All right. So you think this is a big deal. It was actually activated on Tuesday. So this didn't happen at the hard fork last week. It happened Tuesday. So there's a bit of a delay. and by the way, BPOs are going to go up again. There's going to be another blob increase, I believe, in January.

Have we said what a BPO is? No, we haven't. A blob parameter only is now live on the network. And that gives us basically L layer twos, so chains that settle on Ethereum, will have more transaction throughput as a result. Because blobs are there fast lane for transaction throughput. So they get a lot more,

which means transactions on L2s get cheaper and become much more scalable. Yes, correct. Blob parameter only, we don't really need to know that. What we do know, what we do need to know is that this was bundled in Fusaka. This was an intentionally delayed activation. So however many days after Fusaka,

it got activated like five or a week or something. And really, I'm pretty sure the purpose of that is just to like not change too many things at once, kind of have siloing of concerns. That's right. And so the blob target, so Ethereum blobs, increase from 6 to 10. And then the maximum blob limit increased from 9 to 15.

And so roughly like a 40% increase of blob size. And the one in January, what's that going to do? 10 to 14 with a maximum of 15 to 21. So another 40%... We just went from 6 to 14, basically. Yes. No, no. Sorry.

In January, we will have gone from 6 to 14 with a Frusaka Fork. Yes, which is quite a big deal. So much blob space. This is a dashboard, Dunanalyst dashboard from Haldabi of average blob count per block. And you could see we were just about reaching the ceiling of demand starting to exceed supply,

and then we just got another boost upgrade, another blob stimulus upgrade. And we're going to get another one. It's going to be a while before L2s probably hit those things. Well, it depends on how fast they grow. Yes. I mean, we could see between the period of October of 2024 until April of 2025,

blobs were at saturation, and layer twos were consuming as many blobs as Ethereum was able to supply to the market. And so layer twos had to go look elsewhere. We had to go to Celessia or eigen-D-A. And then Ethereum increased its blob count from three to six. And then as we just upgraded just now, like Ryan said,

blob's consumption basically was approaching six. Hadn't quite got there, which is good, because what that means is Ethereum, is upgrading its supply of blob space faster than the market can consume it, which means Ethereum is scaling. Transaction fees continue to be extremely cheap on layer twos. And again, like Brian said, we are going to increase this even more in January, which means there is a significant amount of slack in the blob system for layer twos.

And the fact that Ethereum is delivering this ahead of actual saturation and not six months of saturation after, I think is very, very bullish, because that means it, it's a theorem is scaling. And there's a path to continue delivering on this, right, at a very frequent cadence. This is kind of a Daven's paradox type thing of like, you know, the more the cheaper, the cost. The cheaper the resource, the more that will be consumed. And I think that's exactly what's happening here. Saturated Blobs is a legitimate argument as to why a chain would launch as a layer one instead of a layer two. And so if blobs aren't saturated, then that argument doesn't exist. David, I want to tell you about the different world we are in from a regulatory perspective. And I know we've covered this so much, but

every time I look at it and zoom out, I'm just like, we need it. Yeah, okay, so regulators doing a complete 180 on crypto this year. And it really feels to me like, do you know, like, in the Disney movies, when the spell is broken and the villain get, or like take Lord of the Rings, you know, Soron, the ring gets cast in the fire and Soron's tower collapses and all of the darkness fades away. That's what's happening right now. It's all of the darkness. is receding from... Is Gary Gensorsar-on in this example? Yes, pretty much.

Anyway, let's talk about three agencies here and what they're doing. So the first is the SEC. The SEC is ending a two-year investigation into Ando Finance, a tokenization platform. I want to zoom out and remind you that the SEC had enforcement actions in close to 20 different crypto companies,

many of these notable. A dozen inquiries in lawsuits have now ended with no enforcement. Ando being the latest. And we had Corey Freyer on, who was actually Gary Gensler's lieutenant, and he didn't like this at all. I mean, he was orchestrating a lot of this.

But he basically said, this is unprecedented. It's never been the case that... It was. They were unprecedented first, and now we're undoing the unprecedentedness of all of these enforcement missions. We were so kind to him, though.

I do appreciate him coming on. Let's talk about the new SEC chair. He had a quote this week. I'm just going to play. This is Paul Atkins. There were really only two countries in the world here in the last few years that were working to make cryptocurrencies illegal. And that was communist China and the U.S. through the SEC. So that's changed. It's a new day now. And so we want to embrace this new technology. I love how he just compared the Gensler SEC to communist China, David. That's the SEC chair doing that.

And he's saying, we're completely changing. Now we're going to embrace it. So that's the SEC. They could not be more pro-cpto, more bullish on crypto. Also, the CFTC launched a digital asset pilot allowing Bitcoin, ETH, and USDC to be used as collateral. Okay, so this effectively recognizes both Bitcoin and ETH as well as USDC as money for margin collateral. This is a legitimization process of Bitcoin, ETH as commodity monies and for use in derivatives and other CFTC regulated collateral.

So that's a big deal too. Joseph Shalom from the CEO of the co-CEO of Sharplink says this is further recognition of ETH as the pristine collateral bridging tradfi and defy. So more legitimacy on that side. You could also see this with Bitcoin. U.S. banks are now able to issue credit against Bitcoin. Okay, so Bitcoin being used as a unit of debt is kind of important and interesting here. This is City, J.P. Morgan, Wells Fargo, B&Y Mellon, all of these.

Michael Saylor said this, are now issuing credit against Bitcoin. So it's not just the crypto companies doing this. This is major banks allowing you to take loans against your crypto money collateral. That's kind of huge. I think that's a very big deal. I know. Going back to Nick Harder's article of like the five things that Crypto is really good for, number one, the restoration of sound money.

This is that. Banks issuing credit against Bitcoin. Banks are saying, yeah, we'll give you a loan against your Bitcoin. It gets your magic internet money. Isn't that insane? We'll give you dollars backed by your magic internet money. That is a monument. Yeah, I know.

Sometimes we don't zoom out and reflect about. how far we've come. Last thing I want to tell you about on the regulatory front is the OCC. So that's another three-letter agency. And do you remember this is the office of the currency comptroller? Yeah. Comptroller is such a weird word. Comptroller, like a super finance accountant guy.

Anyway, the OCC, they regulate a lot of things, including, I believe, the FDIC or they're involved in the FDIC. They were the people that back in the Operation Trokepoint 2.0 days would send messages to banks saying that they are like... What you're doing is risky. What you're doing is risky. And like... Raising eyebrows.

Between the lines, it's like if they have to send you a letter saying what you're doing is risky, that basically says stop doing it or we're going to yoink your license. That's right. They were one of the implementers of Operation Chokepoint, which is debanking a bunch of crypto companies and crypto investors. They signed in 2023 a joint crypto statement, a joint statement with the Fed and the FDIC, explicitly warning of the risks of crypto. in public blockchains and all of these things.

Which is funny, because now they're using it as collateral for loans. Right, okay? And not only that, this week from the new comptroller of the OCC, so the guy in charge of all of this, they came out with a report that was basically finger-wagging, David. So they said the OCC called out America's top banks for unlawful debanking behavior. And they said that these banks targeted industries,

among them the cryptocurrency industry and they shouldn't have gone and debanked everybody and they wrote an entire report about it which is hilarious to me because the OCC was one of the groups telling them to go debank crypto customers.

Anyway, part of the reason this is being unwound is because of an executive order. Donald Trump, this is an executive order from August guaranteeing fair banking for all Americans where he specifically asked the executive branch in the OCC to go investigate this. And so they

did and they came back saying the bank shouldn't have debanked anybody. Yeah, why did you guys do that? You guys don't have to do that anymore. Anyway, this is the theme of the cycle. All of the winter, the winter is thawing. The evil witch is dead. That's right. That's right.

The snow witch is dead, yeah. Shenanagan's like this just kind of makes me things like, oh, China's going to kick our ass, dude. I don't think so. I think their dairy gensersers are like 100 times worse, and they actually have guns and can't get voted out of office. So I don't think they'll ever be embracing a free and open Internet technologies. My point is like at least they're not flip-flopping on themselves every four years. Yes, that's true.

They are very, Gensler reigns for a thousand years there, I guess. How about the Clarity Act, though, David? This is actual hard-coded legislation we need in order to get some clarity on crypto. People have called this the market structure bill. What's happening there? Okay, so maybe just a level set about the Clarity Act. The Clarity Act is uniquely a bullish Ethereum and tokenization. Why Ethereum is because it really is like effectively the legalization of anything Wall Street might ever want to do with a smart contract.

Is that a fair assessment? I think so. Yeah, it's definitely tokenization, right? tokenization is the big one. So if we want tokenization to grow, we need Clarity Act to pass. And so I think specifically as an Ethereum believer and supporter and holder, I'm watching Clarity Act very closely hoping that it does pass. There's no guarantee that it passes.

I think it could be like 50-50. It seems kind of stalled out at the time of recording, right? This is a senator calling the crypto bill talks decently frustrating. It seems like it's kind of stalled in the Senate and unlikely anything's going to happen over the holidays. And I don't know, 50-50 sounds about right to me too. Yeah. Yeah. Yeah. A key jurisdictional and policy issues remain unsolved. According to Senator Moreno, he is signaling that he would rather let the process slip

than accept a compromise he views as structurally bad for the industry or for Republican priorities. Democrats are flagging corruption stuff with Trump. Yeah, they don't want Trump to get a win there. Yeah, they want the president to be barred from doing any sort of crypto. stuff like issuing tokens or crypto businesses. That'd be fine with me but Trump's never going to sign that. Give that to them.

He's never going to sign it. Oh, God, damn it. I know. But come on. He's like, he's already started like four or five businesses. He gets to keep them. He just can't start anymore. Yeah. Yeah. Tell that to Trump. I don't know. I will. Lastly, let's talk about the New York Times. So they had an education article around stable coins, and this was from their article. You could see on the left,

we've got bank deposits being compared against a stable coin wallet. They say, in a bank deposit, your deposit is insured up to 250k by the federal government, but with a stable coin wallet, your money is not insured by the federal government. Number two, the bank lends out your deposit for mortgages, business loans, and other types of borrowing, whereas with stable coin wallet, the coin issuer invest the money in financial markets, often buying bonds. The bank shares a portion of the proceeds with your interest, whereas with stable coins, in most cases, the coin issuer keeps all the proceeds. That one is completely inverted.

That one is the most wrong. It was basically the whole thing was kind of like a fud about stable coins, and there's a whole list of things. Like, first of all, the idea that your money is not insured by the federal government, it's T bills, bro. It is the federal government. And not only that. that the bank, your FDIC insurance for $250,000, the only reason that exists is because the banks are fractional, fractional reserve, whereas your stable coin is not.

That's right. That's right. It doesn't need insurance. That's a better product. How about this? In most cases, the coin issuer keeps all the proceeds, whereas the bank shares a portion of your proceeds with you with interest. No, it does it. Zero point one five percent in my Wells Fargo account.

That's for us. That's for us. 4%. And that's low. This is a really bad article, but this is a really bad article. It's a terrible article. But it's, you know, it just seems like a hit piece. I mean, a poorly researched hit piece.

Of course, it does come out of the New York Times. So at least that's the appropriate venue. Yeah, we're still dealing with that in mainstream media. Coming up last, we got to sneak some prediction market news in here. Gemini, the Winklevite Twins Exchange, is now offering, can offer a prediction market in the United States. And also Gemini, which is a publicly traded company. We actually, I don't think we covered that IPO. Stock surge 14% on the news.

So kind of just an indication of. how hot prediction markets are. So Gemini's affiliate Gemini Titan received a CFTC license, allowing it to launch fully regulated prediction markets for U.S. customers. This is the same registration category that the CME has for derivative contracts. And so Gemini can list a clear standardized event contracts on Gemini. So pretty cool. That's our second.

So Gemini will join Kalshi as a CFTC regulated prediction market operator inside the United States. So just growth, growth in that sector. It's their own thing too. They're not integrating polymarket or Kalshi. It's Gemini's own prediction market that they're growing from home. Yeah. So pretty cool. Congrats to the Winkle by Twins.

Ryan, I've got a meme for you. I've seen this meme. I saw this around. I can't believe you got so much clout for this meme, David. It's incredible, actually. So your tweet is up to how many, how many, like, views? 32,000 likes or something.

Is that your most successful tweet ever? By far. I mean, it would have been better if I had actually gone to. This isn't in Times Square. It's like right next to Times Square and actually taking a selfie with it. That would have probably gotten even more likes. He's joking.

I didn't have a time. This is not real. This is not real. My most successful tweet of all time quoted this tweet saying real. Your most successful tweet of all time quoted this tweet of a AI-generated, not real tweet. I don't know what you're talking about. This is a real ad. This is a real ad.

Okay, what are we looking at here? This is a real ad on a big LCD screen out of Times Square. This might be right next to the NASDAQ or something. It's not real. And it's a pen. This is Ryan Sean Adams OG meme. You know how you go to the bank and you have to write down your little request to withdrawal or something? And then you have a little pen and it's on the little ball chain thing because they don't want you to steal the pen.

Yeah. And so the line, there's a picture of the pen with this is how much the banks trust you. go bankless instead. We got so much trash it on this very real ad. 1.8 million views and that's just a bankless one. Mine also had like 1.2 or 1.3 million. Listeners can decide. I think it's great though.

Yeah, go bankless instead. Fantastic. Why don't we leave it there? Wriston disclaimers. None of this has been financial advice. That ad was not real. Okay, just so you know. Crypto is risky.

You could lose what you put in. But we're headed west. It's the frontier. It's not for everyone. But we're glad you're with us in the bankless journey. Thanks a lot. I can blow my nose. I'd blow my nose.