Bankless - ROLLUP: SBF 25 Years | Coinbase vs. SEC | Blobs Demand | Blast Controversy

Starting point is 00:00:00 I'm glad it's over. It's done. We don't have to talk about it anymore. Is this the last weekly roll-up for Sam Bankman-Fried? I hope so. It could be. It very well could be. Bankless Nation, it is your Friday weekly roll-up end, the last one of March 24. What do we got for him, David? Blabbs trying to take down the Ethereum layer one. Why? Why are they doing this to us? We also got base fees moving up. That's base the chain, not base fees. I thought layer two's were cheap now. What the hell is going on? Over $100 transaction fees were just seen on base in this last week. Also, North Korea is back. A $62 million exploit on a blast app leads to an existential crisis about whether or not blast is centralized. Ryan, what else we got?

Starting point is 00:00:45 You said they're back, but I don't think North Korea ever left, David. That's the problem we have here. No, it's a ball market's that back. And now North Korea is back with us. You know who else is here, though? This time, Larry Fink is here, okay? And he racked up some more wins this week. We're going to talk about that. Also, he weighed in on the Ethereum ETF. I want to tell you what he said, David. And Coinbase is moving more of their stuff from their private ledger to on-chain. So we'll talk about that. Athena announces their token, one of the most hyped token drops recently. Also, probably the biggest news of the week, SBF gets sentenced. So we actually know how many years SBF is going to be sentenced in jail. How many will let you know?

Starting point is 00:01:23 Years or decades, David? Decades. Decades. Decades. Okay. Yeah. That's a tease. Yikes. And then probably the most hilarious moment of Zen that you all have ever heard on the bankless weekly roll-up or ever in crypto. Probably the funniest skit is at the end of this podcast. So thanks for joining us here. We're going to cover the entire weekly news in crypto. But first, we're going to talk to our friends and sponsors over at NFT5, one of the most battle-tested and secure lending protocols for your NFTs.

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Starting point is 00:02:04 There's no auto liquidation risk. So as long as you repay, you get your asset back there are points available to you. NFTIFI wants to know that they want to give you some points. So you can click the link in the show notes to go to NFTFI and discover some of the points that they want you to get. David, it's like a pawn shop for your NFTs. A whole digital pawn shop, you know, you dig it in. I would do this, except I don't have any NFTs that have any valuable value to actually pawn and take a loan against.

Starting point is 00:02:31 Yeah, no one wants to give you a loan against your turtles, bro. Yeah, unlike you who have excellent taste, let me say. It is known. Everyone knows that. Everyone, everyone says that. Everyone I ask says that. Everyone I ask says that. What do people say about the Bitcoin price?

Starting point is 00:02:46 Well, they're saying that it's up on the week, I think. I don't know. You do prices. I tell you this is the first time I've looked at it. Here are the Bitcoin charts. for listeners here. What are we at on the week? Bitcoin started the week at 65,200, up 8,500 up 8.5% to where it is right now. Oh, yeah. Nailed it. $70,700 at the current time of recording. Almost back up to the all-time

Starting point is 00:03:11 highs. That whole like dump week that everyone thought we were going into a bear market last week is gone now. What happened to it? We went back up. So all the bears are wrong. Once again, bears go back to hibernation we don't want you here yeah they're gonna be so weak they are the bears are so weak this entire bull market man yes look at them like they were getting mouthy when we had like they didn't even have seven days man they had like five days of victory and then they're gone now and we're almost up to all-time high so what is the official all-time high it's 73 something 73 8 i will tell you it's 74000 dollars okay um can we look at flows because that's the driver right and uh we had some last time we were talking

Starting point is 00:03:52 about Bitcoin on the last weekly roll up, we had negative flows. For the first time, that felt bad. I'm talking Bitcoin ETF flows. Where are we this week? Actually, still negative, but kind of just like marginally so. Fidelity actually had the biggest inflows this week. It's about flat. Last week, it was very red.

Starting point is 00:04:13 It was very weighted towards the flows out. This week, it's about flat or, you know, hanging just right where exactly where we were. You can only assume that this is going to resume up only, you know, just like seven days, not that much time. You know who's been a big winner of these flows all along? It's this guy right here. This guy. I'm showing Larry. Somehow is our ally?

Starting point is 00:04:34 Yeah. Ally question mark. Okay, here he is on Fox News. I'm very bullish on the long-term viability of Bitcoin. I was going to say, did that surprise you? That surprised me how much that's gone up. I mean, look at it's it is. We're creating now a market that has more liquidity.

Starting point is 00:04:51 more transparency. And I'm pleasantly surprised and it would never have predicted it before we filed it that we were going to see this type of retail demand. So you thought you'd do good but not this good. I thought yes. I bid is your ETIF over at I shares. It's about to overtake gray scale, which was in the business certainly a lot longer. You look at the gains since January 11th when it first came about. Yes. Have you ever seen this much inflow this quickly into? I bet it is the fastest growing ETF in the history of ETS.

Starting point is 00:05:31 The fastest growing ETF in the history of ETF. Look at this guy's face right here. Larry Fink, let's enlarge this face. That is a happy man. That is a happy, happy man. He is very happy. This overperformed his expectations. He didn't think it would be such a big deal.

Starting point is 00:05:46 And I think he's pretty much crypto-pilled. and crypto bold. He tastes profit, David. That's what's going on in this clip. There's a chart that we're looking at here, which shows the Bitcoin price in log overlaid the actual Bitcoin going into institutions. And it starts last bull market.

Starting point is 00:06:04 Because if you remember, Ryan, last bull market, it was like it was the bull market of the cycle where all the institutions are going to put Bitcoin on the balance sheet. It turns out it was just micro strategy. Yeah, it was just micro strategy. It was just Michael Saylor. Who did a fantastic job, actually, just like being the sole.

Starting point is 00:06:19 institution putting Bitcoin on the balance sheet. It was one guy. It was one guy. Yeah, but now BlackRock's here. And the size of the hockey stick that once the actual real institutions come in to put Bitcoin on the balance sheet, it's hard to, it's hard to express how big it is. Yeah, I guess that's a hockey stick on. That is a rocket launch. That is a rocket launch. Yeah, it goes from 200 units to 80,000 units of Bitcoin, like really, really fast. This is the year. This is the cycle where the institutions actually came. I remember in 2017, Ryan, everyone was talking about, oh, the institutions are coming. You got to buy these ICO tokens now because the institutions are totally going to come and buy our bags. And then turns out they didn't come.

Starting point is 00:06:57 And then in 2021, it's like you got to buy all these NFTs because the institutions are coming. Turns out that didn't happen. It is actually happening for the first time in my crypto career. The institutions are actually here. Hotline from Matt Hogan this week. You know how the institutions used to say like the thing was get off zero. Seriously like 1%, allocate 1%. He said 3% is the new 1%.

Starting point is 00:07:18 Right. Not enough for large asset managers. You just have 1% in crypto. You've got to have 3%. 1% is bearish. Yeah, 1% is bearish. Let's talk about the ether price. Is that bearish or bullish on the week?

Starting point is 00:07:31 It's bullish on the week. Start of the week, $30,440, up 3.5% to $3,5.000 to $3,580 where we are right now at the time of recording. I'm sure it'll be sometime, something different by the time you listen to this, though. It's not. It's only 3% though. Only 3%, David. 3%'s flat. Yeah, that feels.

Starting point is 00:07:48 flat to me now. When you look at Bitcoin, it's like 8.5%. I think the big question is, are we going to get some of that institutional ETF magic inside of Ethereum? And David, I don't know if you saw this, but Fidelity filed officially an S1 form for their spot Ethereum ETF with staking included. So I saw this and I wondered, I asked, is this a big, does this improve our chances of getting an Ethereum ETF done by May? Let's answer to that. Definitely not. And I've got another conspiracy for you this week. Are you ready for the second conspiracy about ETS in two weeks?

Starting point is 00:08:25 Yeah, sure. Okay, so this one is that why are all of these, like almost every single ETH ETH ETF has a staking component included in it? And people like, why are you doing that? That's like risky, not conservative. Like we don't even have the ETHETF approved. Why are you guys trying to get staking in the ETS? That's like hard mode. Why aren't you going for easy mode?

Starting point is 00:08:44 The conspiracy is that everyone is assuming that we're going to get a denial in May, a May denial. But then what happens is that we are, we, like, Grayscale, whoever, Coinbase is going to sue the SEC for denying the ETH ETF and for the SEC for being arbitrary and capricious.

Starting point is 00:09:03 And then the SEC is going to be forced to approve the ETH ETF later. And they're going to have to approve them in whatever form they are filed with staking. With staking, yes. And so they are, they are... I don't know. You think so?

Starting point is 00:09:17 Staking is a bridge too far, David. I don't think so. I don't think so. I don't. Okay, bear. Don't call me a bear, but I don't know about that. But here's somebody who's on your side, at least with respect to the conspiracy theory you threw out of this last week. Last week's conspiracy theory. Last week, David's conspiracy theory was, you know why there's no activity? You know why it's all quiet between the SEC and these ETF issuers? It's because they've already done the work. They have no questions. They just approved a Bitcoin ETF. So you just swap out those BTC letters for ETH and you just hit you know like stamp approve and so we're good to go.

Starting point is 00:09:50 That's why there's no questions. We already did the engagement. You only engage once. The chief legal, I think this is the chief legal officer at Grayscale. He seems to agree with you, David. Hell yeah. Yeah. Conspiracy taking that tin oil twin foil hat right off my head.

Starting point is 00:10:04 Yeah. Craig says this basically. There's not a lot of difference between Bitcoin and Ethereum. He says the only difference is rather than the ETF holding Bitcoin and holds ether. So in many ways, the SEC has all. already engage and issuers simply have to engage less this time. So he's answering the question, why has there been no engagement between the SEC and issuers? He's like, they've already done the work. All you have to do is just, you know, like kind of swap it out. So he totally agrees with you. Yeah, I don't know how actually how to square this whole about their staking inside of the ETH

Starting point is 00:10:32 ETFs, but they're also carbon copies of the Bitcoin ETF. Those are like, I don't know how to square those two things. I think the staking component of these ETFs is like, it's optional to stake. We need more experts to comment on this. So we should probably talk to the ETF boys sometime soon. Speaking of the EATF boys, Eric Balachunis, who's one of the two ETF boys, he goes, re the ETH-EATF approval. We are holding the line at 25% odds, although, to be honest, it's a very pessimistic, 25%. So despite this is in response to the Grayscale Chief Legal Officers analysis on like,

Starting point is 00:11:04 we don't need engagement, they've already engaged. He says, like, sure, good point, point taken. We're not changing our odds. We remain pessimistic at 25%. 25% is not zero. 25% is not zero. So one other voice in this that I think might be relevant and important

Starting point is 00:11:20 is the voice of Larry Fink of BlackRock, who certainly has a horse in the race, let's just say, and is feeling awfully bullish on crypto lately. In that same interview that we played a clip from earlier, they actually asked him if an ether ETF would still be in the cards in the event that the SEC somehow called ether

Starting point is 00:11:39 and declared it a security. And Larry Fink said, Yes, I think so. Huh. Yeah. Slightly unexpected. Even if it's a security. A little bit unexpected.

Starting point is 00:11:49 I don't know what to do with all of this. What the hell do I know? I'm not a lawyer. One other big Black Rock thing, as I said, it's a, you know, a Black Rock week, I suppose. Do you know their new Biddle Fund that we were talking about with tokenized treasuries on Ethereum? It is now $250 million. Started at $100 million, jumped up to $250 million. So $150 million of demand came.

Starting point is 00:12:11 So that means we now have $1.5 million. billion in tokenized treasuries in crypto on chain. Yeah, that number's going up. How long do you think it's going to take to get to 10 billion on that number? Oh, not before this half of this year. Right. On this half of this year. Right. Yeah. Which even seems pretty slow. Like it could, it could be like April. Yeah. So not only are the institutions here from the perspective of ETFs, but they're also here from perspective of tokenization. And they're starting with the most logical thing to tokenize, which is treasuries. Yeah. That's what's happening. The closest things to actual dollars. Total crypto market cap, David. Where are we at?

Starting point is 00:12:47 Where are we at? We are at $2.8 trillion, almost above three. We're going to break all-time highs, both in Bitcoin and all-time market cap inside of 10 days. Well, let's get to the all-time highs of layer two as well. I mean, we are right there. And this layer two update is brought to you by Mantle, which is a new and up-and-coming layer two that we enjoy. They're sponsors of this podcast episode. Also, their token hit all-time highs. We're talking about all-time highs. We're talking about all-time high. That's right. To the mantle ecosystem. That's right. Four billion, I think, in value this week. So pretty impressive. So tell me about total value locked in layer two's. We are just under $40 billion, as we have been for the last three weeks. We have just been teasing

Starting point is 00:13:27 that $40 billion number. As soon as we break 40, you know what happens next? What happens, Steve? That's how numbers work. Scaling factor 10.4X. Wow. Wow. As soon as as blobs come online, just layer twos have just taken all of the breaks off. There seems to be no limit. odds to the scaling factor for layer two's. Base found a limit, but then they just raised the limit. We're going to talk about that later in the show. Active addresses are at all-time highs. TVL at all-time highs.

Starting point is 00:13:53 It's really good time to be a layer two. Base, TVL in base, 257 days ago, it hit $1 billion. 25 days ago, it hit $2 billion. Five days ago, it hit $3 billion. So there are some parabolas going on inside of the layer two ecosystem, especially on base. David, you see this chart right here. This is layer two gas fees, right?

Starting point is 00:14:15 And you see after Blobs came, after EIP 4844, they absolutely fell off a cliff. So this was around March 13th or so in the days afterwards. They hit the floor. And then do you see this line here? This little blue line's been creeping up. That's base. So after hitting the floor, base has suddenly gotten more expensive. I saw some tweets this week of people surprised that it costs like, you know, 30 cents to do

Starting point is 00:14:37 transaction on base, up to a dollar. I thought a $100 transaction on base. That had to be a mistake. I can't believe it's something to be $100. Okay, well, what is going on? So all the other layer twos are still cheap. I understand that base is getting a ton of demand. And so that accounts for some of this.

Starting point is 00:14:54 But I thought blobs fixed this. Are blobs going up in fees or like what's going on? Basically, we are trading bottlenecks right now. And so blobs for the base chain were extremely cheap just like they were for all of the other chains. And so base was paying very, very little. settle on Ethereum. Base itself was congested. Like what is base, it is literally a layer two that is Ethereum as a layer two on Ethereum. All OP stack force are like this. They are basically a carbon copy of Ethereum settling on Ethereum. You can congest a layer too. And that's what happened with

Starting point is 00:15:26 base. And so the execution layer, which is base itself, actually got congested. There were more transactions that could go inside of the base EVM than it could process. So it was a, it was literally a compute bottleneck, it was not a settlement bottleneck. And so as a result of like MEV bots, you know, meme coin traders, a lot of it was meme coin activity, mean coin trading. People were just like trying to squeeze themselves into base. And the execution side of base was just too constrained to let them all in. And so that's what happened.

Starting point is 00:15:56 Fees go up. Okay. So I want to make sure I understand that because I didn't understand that at beginning this week of where the bottleneck was. I just assumed the bottleneck has always been Ethereum. I was like, oh, it's Ethereum's fault. Blobs got really expensive. anticipated this and we're going to talk more about blobs a little bit later and so they they must have

Starting point is 00:16:11 gotten more expensive. But it turns out the fees on base are more expensive and it's not Ethereum Layer 1's fault. Right. It's base. There is a constraint in kind of execution and there is this metric that I learned gas per second. Okay. GPS gas per second. And that is a measure of what how much gas there is in a base block, like in how much execution throughput and how much compute throughput you actually have. And again, this is something that base can kind of scale out and control on its own, but apparently can't happen overnight. Can you talk a little bit about that? What is gas per second and how does base intend to actually scale that? Gas is basically Ethereum's version of compute. It is a Ethereum way of measure and compute.

Starting point is 00:17:00 And so like different functions inside of the EVM have different weights for how much gas they are. Like multiplying, it has some amount of gas costs. Dividing has some amount of gas costs. Different compute functions have different gas costs. Really expressive, complicated ones have high gas costs, very simple ones, just like adding or subtracting of low gas costs. So basically it's a function of compute. Like how much compute demand is this going to put on somebody's CPU? So gas per second, which we are in like the mill.

Starting point is 00:17:30 milly gas per second, as in millions of gas per second, is how much throughput base has. And this is the bottleneck. This is the execution bottleneck of base that we are currently hitting. We weren't hitting it before because previously it was called data layer one settlement that was the bottleneck. That bottleneck's gone. Now the bottleneck has moved to layer two compute. So why don't they just widen that pipe, David?

Starting point is 00:17:52 That's what we did, Ryan. Okay. So on base this week, they've increased the size of the bottleneck around base compute. So it's gone up 50% to 3.75 milligas. And then they are going to, after they observe and make sure the chain is still stable, they're going to raise it again to 5 milagas targeting early next week. So Monday, Tuesday, Wednesday of next week, we will go up to 5 milagas. Already since increasing the scale of the base layer 2, gas fees have gone down.

Starting point is 00:18:22 So we are now enjoying like 1, 2, 3 cent transactions again. But yeah, all of that happened inside of one week. For now, though, right? What if there's another, so there's a 5x increase in demand that caused this because gas fees are so cheap. So we like increase our gas per second and demand's just going to fill that up too, right? How do we get to something that is far higher than millig gas? How do we get to giga gas per second? Is there a roadmap to that?

Starting point is 00:18:46 Yeah, well, there's a bunch of things to optimize, right? There's like state bloat. There's just like the execution bottleneck. There are a variety of different things that still have like juice left to squeeze in them. and Jesse's just saying, hey, like, we're going to do all of them. There are layer one optimizations like Pyridass and Dangsharding, plenty of layer two optimizations. Reth from, Georgios from Paradigm, is working on Reth, which is Rust Ethereum, rather than Geth, which is Go Ethereum. Rust is just more performance so we can get just a better execution client to have some of this.

Starting point is 00:19:21 There's just like, actually, like, five or six or seven different ways to squeeze this juice here. there's just a lot left to do here. All right. So my favorite thing about this is the bullish thing is now the bottleneck is somewhere else. And the place that it is on the execution layer with teams that can execute far faster and without kind of the constraints of like let's plan multiple years for like an Ethereum hard for it. There's no all core dev calls here.

Starting point is 00:19:42 It's just Jesse. And it's all of the layer two is competing. I mean, they're all going to parallelize, you know, their compute. They're all going to make this hyper-efficient. And eventually, I don't know when this is going to be, but eventually the constraint will move back to the DA layer. and it'll be blobs. We don't have enough blobs on Ethereum again.

Starting point is 00:19:58 And indeed. But then we're going to get more blobs. Then we're going to get more blobs. Okay? So we're just like kind of like moving constraints. And this is what progress actually looks like. This is what scaling kind of looks like, right? We are globally increasing the trustless bandwidth throughput of our chains.

Starting point is 00:20:14 And this is just like the engineering work that's happening. So from my perspective, now we're in kind of this territory of like it's incremental. Like we're just making these gradual, quick incremental changes to, to scale up our fees now that we have this new blob space primitive. Yeah, Vitalik said it really well in his most recent article. We've gone from zero to one with scaling, one being the introduction of 4844, and now we are going from one to n, as in exactly what you're saying, like incremental. Now it's like up to like 17 different ways to get more scale out of Ethereum.

Starting point is 00:20:45 There's something I want to highlight about this movement towards like the whole Ethereum roll-up-centric roadmap. ZeroX Al3 tweeted out, in the past 24 hours, base users have paid 670 eth in fees. 570 of that went to Coinbase, the operators of base, of course, 100th of that went to optimism as part of the OP collective, and then 0.3eth went to Ethereum to pay for blob space. So out of 670th, the base layer 2 only paid the Ethereum layer 1, 0.3Eth to settle to Ethereum. So this is how cheap settlement is now for layer 2s onto Ethereum.

Starting point is 00:21:23 this is the cost of security. To me, like, people are interpreting this as like, oh, this is super bearish for ETH. Like, how is this any sort of value accrual for ETHI asset? Layer twos are parasitic to Ethereum, like all this kind of stuff. My perspective on this is that this is the tradeoff that the Ethereum network is making with the roll-up-centric roadmap. Layer twos are being charged the minimum amount of rent necessary to maximally secure layer

Starting point is 00:21:50 two's and as a result of that tradeoff and for reducing the burn, ETH becomes a unit of account, the monetary asset in layer two's. Layer twos right now are the most profitable business model I have ever seen because settlement costs are almost nothing and sequencer costs, layer twos are getting all the sequencer costs. And so layer twos as a business right now are absolutely printing in profitability and their cost of the Ethereum network is almost at zero. the way that Ethereum benefits, Ethereum the network benefits,

Starting point is 00:22:21 is that ETH becomes money in all of these networks. And so there's a reason why we've launched like 1,000 layer twos over the last year, and there's a reason why over the next year we're going to launch 10,000 more. And it's because ETH becomes the most cheap, secure settlement layer, while ETH becomes money in all of these networks. I think what you're saying is the value proposition of Ethereum, at least like if you think of ether, the asset, moves from discounted cash flows and receiving cash flows based on these chains by charging chains

Starting point is 00:22:51 rent extraction to like monetary premium because it is getting its liquidity is getting bootstrapped is being used as money by all of these chains. My take on that is it's such a 4D chess move because like it makes it incredibly hard for any other chain to kind of compete. Why compete directly against Ethereum if you can just settle on Ethereum? Like it's just kind of like join the pirates, basically, right? Join the Peloton. Yeah, like, you just, why would you do anything else? we've seen outflows of ETH from centralized exchanges. ETH supply on centralized exchanges are like hitting like one of the deepest lows that they've been in some time. But actually ETH on the Ethereum layer one is staying like flat.

Starting point is 00:23:34 Where is all of that ETH going? All to layer twos. Like layer twos are sucking up so much ETH. They have so much demand and reservation demand for ETH. Like that's where all the demand is coming. David, a quick check in on Tradfy, Marcus. You know the S&P is all time high. this chart. The only

Starting point is 00:23:51 S&P, I don't even know if it's in the S&P, the only equity that I pay attention to is coin, and let me tell you, the coin chart is looking real good. Yeah, well, so are, so are everyone else's stocks, just so you know, we're at all-time highs, it's looking like a very green territory. Bummer. It is probably

Starting point is 00:24:08 exceptional. I mean, I don't think the S&P is moving like that particular asset, but pretty bullish. One add to the whole strategy around layer two is that I think we're going to see repeated again and again and again. This a tweet from someone at Coinbase. Coinbase is going to be storing more corporate and customer.

Starting point is 00:24:24 USDC balances on base. This enables us to manage and secure customer funds with lower fees and faster settlement times with no impact to the Coinbase user experience. So they're basically saying, base is going to be our home chain for USDC moving forward. This is Coinbase saying that. What I see, David, is this is an evolution of an exchange becoming a chain. And like one meta take of this is if you, if you zoom all the way, out. Every single asset is going to become a token. Every single bank is going to become a chain.

Starting point is 00:24:57 And Coinbase kind of dabbles in that world, just like other exchanges like Cracken, they're all going to launch their own chains and put more and more on chain rather than their private databases. They'll still have private databases, but it'll gradually become kind of an empty shell of like AMLKYC and just kind of the regulatory checkmark. I think we'll see more and more activity migrating on chain. We're starting to see that. with USC. This is Coinbase carving a path to showing how financial institutions can be on-chain financial institutions. And they're not doing this now. They're moving their own internal business logic on-chain. But what I think they will do is just become a like user-verifiable on-chain financial

Starting point is 00:25:39 institution. They're not like, they're not like spilling their guts. They're not like opening the doors. I'm like, hey, here's everything. But like this is the first step to that. It's like user-verifiable financial institutions, which we're like, there's a lot to talk about like meme coins and like, what are we really doing here? What's our purpose in crypto? Are we doing any good? This is like literally 2008 armor, on-chain financial institutions that are secured and verifiable by their users. That's where we're going. That's extremely bullish. So let's summarize where we are. This is from brantley.com. We're not even done Q1. And yet we already have this year in 2024 nine Bitcoin ETFs, BlackRock launching its first fund on Ethereum, Larry Fink, pushing crypto talking points

Starting point is 00:26:20 on CNBC, Google integrating ENS into search, we'll talk about that later, GoDaddy, adding a crypto wallet tab that lets you connect your DNS name to ENS, seven ether ETFs filed. The London Stock Exchange announces Bitcoin and Ethereum ETNs that happened this week. We don't have a chance to talk about it. And to top it all off, the SEC is not only losing in court against crypto, but is actually rebuked by the court for lying. Gotta say, it's been a good start of the year. Feels good.

Starting point is 00:26:47 Yeah, this is what a bull market feels like. All right, coming up next, we got our first big hack of the bull market. We're going to talk about that and all the consequences. SBF, jail time, how much? But first, blob demand is trying to take down Ethereum. I'm trying to take down the network. I'm going to talk to you all about this and more.

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Starting point is 00:29:19 your wallet, pulling in all your transactions, and following the automated suggestions to quickly and accurately calculate your tax obligations. Plus, for all the airdrop farmers out there, crypto tax calculator has your back, as they are consistently adding support for new and upcoming layer 1s, layer 2s, and all the airdrops that you're currently farming. 2024 is the year when the DGens do their crypto taxes with speed and confidence. Make taxes this your easy and affordable with crypto tax calculator. Sign up at cryptotaxcalculator.io and get a 30% discount with code bank 30. Click the link in the show notes for more information. Blob demand is skyrocketing. But David, is this too much for Ethereum to handle? Where do we

Starting point is 00:29:55 start this story? Two weeks into blobs being live, we are finally seeing a blob fee market emerge. The EIP-159 mechanism also works for blob space as well. And over the last week, we have seen 100-Eth being burnt due to blob space. consumption. And this was happening, Ryan, all of yesterday. Wednesday, the 27th for people listening, we actually went a little bit above that demand. First, let's look at Tony's tweet here who's showing a graph of blob space. And so all of that yellow is the blobs. And you can actually see the effect of blobs and blob space. All of the yellow's blobs, that's layer twos and what's about to be blob descriptions. We're going to get to that. Saturating blob space. And so Ethereum in the short term is

Starting point is 00:30:36 actually a bigger beast in terms of like data. But then we actually have the execution layer and the consensus layer size of the blockchain. So think about like the size of the blockchain. Those two things, which are permanent Ethereum, actually got smaller. Blobs, which are temporary 14 days of state, those are temporary. So temporary state has gone up, but permanent state of Ethereum has actually gone down. So this is part of Ethereum's long-term sustainability plan. Like Ethereum itself is becoming more lightweight. So let me back up there. So we were waiting for a time where all of this demand would essentially exceed the supply of blobs and cause there to be a competitive fee market, like burning of the eth and that sort of thing.

Starting point is 00:31:18 And two weeks after we've launched blobs, you're telling me basically we've crossed that threshold. And it's not that we don't have enough blobs, but we have so much demand that a fee market is emerging and it's starting to become competitive and cost. are going up? Is that is that what's going on? Our blobs are full? That's exactly. That's exactly what's going on. Yeah. So the average over the last 24 hours, the average Gway price for blobs is 30. That's 30 way. But this is being bought by layer two's not by users. And so like amortized 30 over like a thousand users on a layer two. So that's actually like really low on a per user basis. I mean, so that happened really fast, right? Like we knew this would happen, but like we're only two weeks in and we're already out

Starting point is 00:32:04 a blob space? Well, I wouldn't call it out of blob space. Layer 2s, I think, are actually being relatively efficient with blob space. The thing that's happened in the last week are these things called blob subscriptions. So actually, there's actually no reason, like, layer 2s are not the sole consumers of blobs. Anyone can consume a blob. And so now we have inscriptions going into our blobs.

Starting point is 00:32:28 So like instead of layer 2s, people are just writing JPEGs straight into the blobs, which I totally saw coming. Everyone saw this coming like a mile away. And now layer twos are competing with people putting in dick butts into BlobSpice. That's what's going on. Yeah. So here's what blob space actually is. So it doesn't get processed.

Starting point is 00:32:49 Like blob space, you described it last week as like a high occupancy vehicle lane. It's like the fast lane. And so it doesn't go through kind of the layer one EVM and require all of that processing. It's like a side lane. And the primary consumers for this. are like supposed to be the layer twos. And indeed, they have been the layer twos. Are they intended to be layer twos?

Starting point is 00:33:09 But because this is a permissionless commodity that anyone can take advantage of, anyone can jump in that HOV lane. All you have to do is just like buy it, right? And it's expensive relatively, but if you want to buy it, you can, anybody could do that. I could go do it, you could go do it. We're not layer twos, David.

Starting point is 00:33:27 And so you're saying that's what's happening, except a lot of this demand, that's the demand that's spiking fees upward, not from layer twos, it's from what? You said, eth-scriptions? What are these? Inscriptions, yeah, inscriptions. Whatever you want to call them.

Starting point is 00:33:41 We call now, maybe we call them blob subscriptions because they're specifically in Ethereum blob space. But yeah, about like two to a one ratio of demand of blobs was made by inscriptions over the last like 48 hours. And so, like, to continue the metaphor, like imagine your base chain settlement blob or your optimism chain settlement blob, you're extremely refined high occupancy vehicle there's like so many transactions so many riders

Starting point is 00:34:05 crammed into this like you know spaceship bus thing but then some Dgen pays $20 to ride their crypto dick butt blob through the HOV lane clogging clogging it all up that's what's going on like there people are just putting j-packed clown car scooters right exactly exactly and people are just like taking being super fat like taking up all the space in the HOV lane because they can pay to do it and they think it's funny and they're putting JPEGs into the chain. And now that actually, like, encouraged costs upon the layer two's. And that, this is completely within the rules of the road, right? You can put any data in blobs that you want.

Starting point is 00:34:42 Yeah, it's completely permissionless so anybody could do it. And it's expensive, though. So. It is expensive, which is why this is currently not happening anymore because, like, a lot of DGens were paying a lot of ETH to make jokes. And now the jokes are over because people, you know, don't want to actually be doing that. Okay. Well, the thing that concerned me, of course, maybe,

Starting point is 00:34:59 Maybe some of this is funny, I mean, but like their money is going to run out if there's not enough kind of demand for this. So eventually they're going to run out of gas, I would imagine. But it stops being funny when you start to see the network wobble a little bit. So here's a tweet from data always. I'm pretty confident that this is the worst network performance we've seen without a client outage. And what are we looking at?

Starting point is 00:35:21 Slot utilization on Ethereum, kind of like a spike downwards. What is this? Yeah, so slot utilization is basically people who are missing blocks. A slot is an opportunity for one block. And yeah, and so we were 13% of the network was missing blocks in the worst moment of this period of instability yesterday. And why was this happening? Well, because now there's so much more data in blob space. Like the size of Ethereum in the 14-day temporary window, the blob window, got like twice as big.

Starting point is 00:35:51 It gets pruned. But like in that moment of time, like we are like adding more data to hardware. And so about 14% of Ethereum nodes weren't able to handle. list and they fell off and they dropped off the network. Actually, not totally true what happened here. People were freaking out about like, oh, is this a protocol issue? Blah, blah, blah. Like, what's going on?

Starting point is 00:36:11 Like, where 13% is a lot. Like, if you drop down below 66%, that's when you, like, lose finality. And in a weakened state, like, Ethereum becomes like, we're in an adversarial environment. People would love to try and take down Ethereum if they could. And so you don't want to be, like, broadcasting your weakened state. and we had like 13% of the network offline. So I assumed when this happened, okay, I guess the network wasn't ready for blobs

Starting point is 00:36:35 and something to do with the client software and like, oh, we should have load tested this a little bit more, you know, something like that, and it's probably the clients. But it turns out it's not the clients. Where was the actual fault here? Okay, so the actual fault was in the blob and block relay service from Blocks Route,

Starting point is 00:36:52 which is a block builder on Ethereum. They just had a bug in their relay service that was relaying like two, proposers, aka validators, what blobs or blocks that they should include. Once blocks route disabled their service for debugging, we haven't seen the issue since. So the network came back totally online. It's been totally fine. It was always totally fine. There was just a bug in a relay in a third party off-chain relay service that people were using that caused people to be late for their slots and miss their slots. So people, for a moment, people were like, oh my God, the network's about

Starting point is 00:37:24 to topple over. And then we realized, oh, no, it's just like a third-party relay or service. Yeah. So at the end of the day, network's totally fine, just another day in Ethereum, I guess. We'll have to see where this blob space demand goes. Are we going to do more clown scooters or is it going to be more spaceship buses, David? So this is what Peter from Geth was saying, actually, is that like, if there is cheap enough blob space, you will let the DGens put their stupid JPEGs in the space. Hey, hey, stupid is subjective, okay. Stupid is totally subjective. Or customers. So this is what he's saying with his tweet on here on the screen. He says, in my opinion, first, we need capacity, which we just got, then we need apps, then we need capacity, then we need apps.

Starting point is 00:38:03 I actually thought this was a relatively brilliant take where he's saying like, yo, if people are putting stupid JPEGs into blob space, it means, it doesn't mean that we need more capacity because they're driving up fees. It means we need more apps to drive out the dick butts out of the blob space. Yeah, more higher utility, greater economic value apps, basically. That's the take. Yeah, yeah. Yeah, we need to put the Mona Lisa's in the blob space.

Starting point is 00:38:24 Meanwhile, while that was going on, there was this controversy around, the layer two blast. And we just had Pac-Man on the podcast, who's the founder of Blast that came out on Monday. And there was talk this week of rolling back the layer two, the blast chain. Huge controversy in the space. Where did it start, David? It started on this blast app called Munchables. The irony of this, Ryan, is I was at dinner with some friends. Literally the night before this happened, and the friend was shilling me on this game, this app on Blast that he was playing. And it's called Munchables. And there's these shnobiles. and there's these shnibbles and like you farm the yield on the toke, the sea,

Starting point is 00:39:01 you plant the seas and you farm it sounded like a Farmville Ponzi game. So I was being chilled that like the night before. And then the next day it was exploited for $62 million by a North Korea exploiter, as it turns out. Allegedly, possibly linked to North Korea. So Zach XBT indicated that the culprit, who went by a variety of pseudonyms, got their way onto this team to, build this Munchables like game.

Starting point is 00:39:28 And then that new team member hired four other Munchables team members. And it turns out that they were actually just hiring themselves four different times. Wow. To give them enough authority inside of this like new game that was very quickly being spun up. And then they somehow got access to the private keys that controlled this game. They just let a renegade dev into their GitHub basically. Yeah. Like the Discord handles are like Bold Dragon 172.4.

Starting point is 00:39:55 Like the stupid generic Discord names that you get and you don't change them. Yeah. Okay. So the scammer pushed an upgrade that no one could have seen because they had the private keys. And it essentially gave this the scammer, the three wallets that had unlimited access to withdraw the funds. So they had the keys to the upgrader and the main deployer wallets. And then this also affected some other applications on blasts that were connected, Jews finance. So that's pretty that's bad.

Starting point is 00:40:22 So $62 million got exploited from this one app. This triggered, Ryan, a conversation amongst crypto-Twitter as to what to do with this, because Zach XPT, like, we don't 100% know this, but determined that there's a likely association with North Korea and this North Korean Lazarus group, we can only assume, now has $62 million on blast. Should blast, freeze the chain, roll back the chain, do a top-down, centralized,

Starting point is 00:40:52 action and revoke the $62 million, or should they remain decentralized and not do anything and allow this North Korean hacker to run away the $62 million? What should they do? It's funny that you say remain decentralized because the fact that they have the ability to do that, like push an update to roll back the chain or doing a regular state change and yonk the funds means that they're not decentralized in the first place. So it's more like an optics type of question. It's an optics question. Do they want to pretend they're decentralized or do they do they want to take some action and actually roll back the chain. And there's like, I guess Pac-Man and the devs at blast are stuck between two pretty bad situations. A lot of people were pointing

Starting point is 00:41:33 out, though, there's no way that if they are centralized in their current form, they certainly are, right? They have the ability to kind of like freeze funds or do an irregular state change. There's no way that they shouldn't do that or like that they wouldn't be held legally responsible if they don't take an action, right? Like if they have the ability, if they have the power, and they don't do it, it's probably negligence, isn't it? And this was the point that crypto Twitter made. Yeah, and that's kind of the point that I agree with, right? And so, like, the dichotomy here is that, you know, they could upgrade the bridge.

Starting point is 00:42:05 This is what Quit says. They could upgrade the bridge, prevent the hacker from moving the $62 million, but ruin all perception of decentralization. Or they could just let it rock, they say, and then users could eat a $62 million loss within the first month of launching blast. The thing is, I don't think, Anyone on Blast is, like, there because they believe that Blast is decentralized. They're there to, like, play games and earn yield.

Starting point is 00:42:31 And I don't know if anyone, like, there's no, like, veil of decentralization here. I don't think, like, I was, in my opinion, I think the Blast could have taken a very easy mulligan. You guys have just launched, $62 million by North Korea. Clearly there's a good outcome here. This is what Eric Wall says, quote, you're seriously considering lying about the decentralization in a blast so you can let a North Korean hacker group get away for $62 million for the purposes of funding North Korea's missile programs in the spirit of maintaining decentralization.

Starting point is 00:43:02 So this was the debate that people went around. Like, what do they do? Turns out we actually don't know what they did. But what did happen was that the money was secured in a multisig by the blast core contributors. This is Pac-Man tweeting. It says it took an incredible lift in the background, but I'm grateful to the ex-Munchables dev who opted to return all the funds in the end without any ransom required. So the dev gave the money back, all of it, without any ransom. And no one completely knows why,

Starting point is 00:43:35 except I'm sure the blast team does, but no one really knows why. There are some theories, though. So here's one theory. My thesis is Pacman froze his address. That's what my buddy and I concluded. Don't quote me on this. Who really knows? But it would make the most sense. by froze his address there there are different vectors of centralization one of course they could like roll back the chain roll back everyone's transactions that's the that's the most aggressive and that's nuclear another is they can surgically do an irregular state change have all of the kind of blast clients update their clients push push some software and like kind of like remove this transaction or like freeze it or do it that way right that that that as well is

Starting point is 00:44:12 is something that is pretty substantial i mean that yeah that was the Dow hack that's what that is is the doubt what. Exactly. Or they could just threaten some of these things. Recall that blast runs its own sequencer, right? So they could just like, you know, censor transactions, really kind of box this hacker into a corner and not let them escape. And maybe there was some negotiated side deal for something like that, right?

Starting point is 00:44:34 Basically, you can't escape anyway. So why don't you just give us the funds back? Who knows what happened behind the scenes? But there's definitely some speculation on these things. The picture that this Twitter account is tweeting out says, I don't know. He is refunding them. He can't he being the exploiter.

Starting point is 00:44:51 Can't do anything with the funds. Pac-Man has done something so he can't send. Occam's Razor, the most simple answer here is that this is a sequencer censorship. So the sequencer at blast is just saying, hey, that address can't do anything. And then because there's only one sequencer and no other, it's not permissionless, so no other sequencer can come online. The hacker, the exploiter is just like, you know, S-O-L. Like, you can't do anything with the money. Like, why he would give the money back if it's North Korea, I'm not sure.

Starting point is 00:45:21 Because, like, what's North Korea have to gain by giving the money back? I don't really know. Yeah, that's weird. That's weird. But, like, the hacker was like, oh, I can't actually touch this. So I might as well just give the money back. I think it also puts a spotlight, David, on the current state of layer twos, which is they're progressing towards decentralization, but they're not there yet, right?

Starting point is 00:45:39 And so to go to, kind of layer two beat, you can basically see that today. A lot of the layer twos are still at stage zero, which is like black. is. So there's some training wheels, some centralization vectors. Only one of our layer two so far have achieved stage one. And we want them all to get to stage two and be basically fully decentralized. Once they're in stage two, they won't even have the ability to make the type of tough decisions that Pac-Man and the team probably had to make. And I think that will take a weight off of everyone's shoulders. Moving into other subjects, SBF sentence happened today, the day of recording Thursday the 28th. SPF, he was sentenced to 25 years in prison, which was just about right in between the two ends of the

Starting point is 00:46:23 spectrum that was guessed. The defense was asking for six and a half years. The prosecution was asking for somewhere between 30 and 40 years. He ended up getting 25 years. How do you feel about this ruling, Ryan? That feels reasonable. I mean, to me, like, I don't know. I don't have a strong take on this.

Starting point is 00:46:41 I feel like if it was in the single digits, that would be absolutely ridiculous. Just subjectively compared to other things. But like lifetime sentence, I don't know. So it's a fine outcome from my perspective. Yeah, so there are some tweets that we can read out from a person in inner city press who always goes to the SBF things and live tweets. So some highlights here. Judge Kaplan, this is the judge, of course.

Starting point is 00:47:07 A fortuitous run-up of some of the value of cryptosferences bears no relation to the gravity of the crimes that were committed. A thief who takes his loot to Las Vegas and successfully back. is not entitled to a sentencing reduction, even if payback is complete. Judge Kaplan also said, I find that Mr. Bankman-Fried gave perjured testimony at trial. He falsely testified that until the fall of 2022, he had no knowledge that Alameda had spent FTX customer funds.

Starting point is 00:47:33 He falsely testified that he had first learnt of the $8 billion hole in October of 2022. Finally, he falsely testified that the repayment of third-party loans by Alameda would require Alameda to borrow more funds from customers in FTA. Now, does counsel want to address these points to which counsel did not want to address these points? One other big highlight in the proceedings today, Judge Kaplan asked if there were victims that wished to address the court. A victim, Sunil Kavuri, said, I flew in from London so that you could hear from victims. I wanted to speak to you in person, Judge Kaplan. You did a fantastic job in the trial. Many creditors feel the same. I followed the trial live. I'd like to address the

Starting point is 00:48:15 argument that the loss was zero. This is the argument coming from the defense. They continue to claim this in the media. It is false. I have suffered for two years. The bankruptcy estate is assuming or mischaracterizing us as unsecured creditors. We had property rights. Sullivan and Cromwell has trampled over our property rights. They have liquidated billions of dollars of crypto assets. There's a token that these liquidators sold at 11 cents. It's now trading at $2. FTX had $10 billion in Solana tokens. They sold it at a 70% discount. They're selling it to their own clients, Galaxy. It is destroying customer value. This is our property. And then there's Anthropic. Our assets were used to buy the stake.

Starting point is 00:48:56 It's our property. I objected. And there's thousands of customers who support me. At least three people have committed suicide because of this FTX fraud. So when this FTX bankruptcy, I guess, what I feel, how it relates to Sam, it has hurt me. Other co-conspirators, aiders and abettors, also need to be held accountable. Then there was this pretty insane defense by SBS's lawyer, when it was SBS's lawyer's term to come on the stand. He said that Sam is misunderstood. It's easy to slot people into an old fashion story of a greedy swindler.

Starting point is 00:49:29 Sam never scurried away with the money. He stayed until the very end. He'll tell you how much more it means to him that people get repaid. He is an awkward math nerd. He's into veganism. He has off-the-charts intellect. He is a beautiful, puzzle. He can parse words better than a Talmudic scholar. He was a billionaire, unconcerned about

Starting point is 00:49:49 material possessions. In middle school, he was thinking about his ethical obligations to the global population. In college, he spent time helping animals. On Wall Street, he gave away his earnings of charity. That's through age 21. Sam's devotion to others predated FTX. He never sought out to be the king of crypto. He just wanted to have the largest possible impact on the world. But it was not ends justify the means that would harm the altruistic movement. Who is standing by him now, not Tom Brady or Katie Perry? That defense. How do you feel about that defense, Ryan?

Starting point is 00:50:22 He's not a criminal. He's a vegan. He's a vegan. A rubber peony tweet. Yeah. I'm glad it's over. It's done. We don't have to talk about it anymore.

Starting point is 00:50:33 Is this the last weekly roll-up for Sam Begman-Fried? I hope so. It could be. It very well could be. Coming up next, Athena launches their very hyped token. an update on the Coinbase versus SEC case. Did Coinbase lose? Google integrating Ethereum addresses Rutrow and the CFTC dunks super hard on the SEC, all of this and more. But first, I'm going to talk about some of these fantastic sponsors that make this show possible, like Mantle,

Starting point is 00:50:56 a preferred layer two for capturing all the yield. If you haven't tried out Mantle yet, maybe try it out today. Let's go hear from them right now. Mantle, formerly known as BitDAO, is the first Dowled Web3 ecosystem, all built on top of Mantle's first core product, the Mantle Network, A brand new, high-performance Ethereum Layer 2 built using the OP stack, but uses Eichenlayer's data availability solution instead of the expensive Ethereum Layer 1. Not only does this reduce Mantle network's gas fees by 80%, but it also reduces gas fee volatility, providing a more stable foundation for Mantle's applications. The Mantle treasury is one of the biggest Dow-owned treasuries, which is seeding an ecosystem

Starting point is 00:51:30 of projects from all around the Web3 space for Mantle. Mantle already has sub-communities from around Web3 onboarded, like Game 7 for Web3 gaming, and buy bit for TVL and liquidity and on-ramps. So if you want to build on the Mantle network, Mantle is offering a grants program that provides milestone-based funding to promising projects that help expand, secure, and decentralize Mantle.

Starting point is 00:51:50 If you want to get started working with the first Dow-ledd layer-2 ecosystem, check out Mantle at mantle. And follow them on Twitter at ZeroX Mantle. Selo is the mobile-first EVM-compatible carbon-negative blockchain built for the real world, driving real-world use cases like mobile payments and mobile defy and with Opera MiniPay as one of the fastest growing Web3 wallets, cello is seeing a meteoric rise with over 300 million transactions

Starting point is 00:52:14 and 1.5 million monthly active addresses. And now, Selo is looking to come home to Ethereum as a layer two. Optimism, Polygon, Matter Labs, and Arbitrum have all thrown their hats in the ring for the cello layer two to build upon their stacks. Why the competition? The cello layer two will bring huge advantages like a decentralized sequencer, off-chain data availability secured by Ethereum validators, and one-block finality.

Starting point is 00:52:36 What does that all mean for you? With Cello layer 2, gas fees will stay low and you can even pay for gas natively using ERC20 tokens, sending crypto to phone numbers across wallets using Social Connect. But Sello is a community governed protocol. This means that Sello needs you to weigh in and make your voice hurt. Join the conversation in the cello forums. Follow Sello on Twitter and visit cello.org to shape the future of Ethereum. Uniswap is revolutionizing the defy space, not just by enabling swaps, but by empowering you to swap smarter

Starting point is 00:53:03 with a comprehensive suite of products for faster, safer, and more informed swapping. Say goodbye to pop-up wallet extensions. The Uniswap extension is coming soon, and this extension is not a pop-up. It is a sidebar in your browser that persists no matter where you are on the web. This means you can swap, sign, or send, and receive crypto anytime, anywhere, without obstructing your browser window. But that's not all. The Uniswap web app now features limit orders, so you can buy and sell any token at your price on your terms without having to watch the market. And the best part, limit orders are built on Uniswhip.

Starting point is 00:53:33 X, which means no gas fees. Also new to the web app is the data and insights pages with real-time candlestick charts, price data, transaction logs, and detailed pool data, all integrated into the Uniswap web app. All of these new releases come together to create one platform to help you swap smarter every time, no matter where you are, on web, mobile, or on the extension. Click the link in the show notes to sign up for the extension waitlist and download the mobile app. Start swapping smarter with Uniswap. Ethena, the synthetic dollar, has launched their ENA token.

Starting point is 00:54:02 they will launch it. It's on April 2nd. Total supply, 15 billion tokens. Total initial circulating supply, 1.425 billion tokens, so like 9, almost 10%. How the airdrop will work. 750 million Athena tokens, 5% will be airdropped to users. The snapshot was on the 26th of March. Any user who unstakes or sells USDA before this date will not be eligible for the air drop, law. The largest 2,000 wallets will be subject to a 50% linear pro rata vesting over the next six months. Interesting that we're getting some vesting into large airdrops. There is a shard campaign that Athena is doing for earning this air drop. It's not over. It'll end on the first, one of the shortest pre-token points campaigns to date. Currently,

Starting point is 00:54:48 the Athena USCE supply, that's their stable coin, stands at $1.35 billion. Congrats. That's pretty damn good. A second campaign starting on April 2nd. And for those who still want to get some of the ethino token, you still have an opportunity. So it will run for five months until September of 2024 or when the USDA supply reaches five billion. And that was the ethino drop. If you don't have a lot of capital, the bull market, like, air drops are the best way to, like, make money in this market. So participate. We've got the AirDrop Hunter.

Starting point is 00:55:20 There's always a link in the show notes. Go check that out. So Google added a new feature where if you type in an address, so an Ethereum address into, Google itself, it will pull up the balances directly from ether scan for that address, not just on Ethereum, but across all of the chains. And so this is Anthony Sassano showing an address and, you know, like assets that he holds across multiple chains. It's the first search result after you type in, well, copy and paste around, type this in an ether address. So to me, this is like a double-edged sword because on the one hand, it's fantastic for adoption, right? Hey, Google's supporting

Starting point is 00:55:52 our chains, right? It's gathering and daguerre in all of our on-chain data. I imagine the great functionality is going to provide us. On the other hand, let's think about Google's core business model. They already know everything you do online. Now they can know with crypto, everything you own. It's all open. It's all queryable. It's just like Web 1.

Starting point is 00:56:10 It's just like the original internet. And imagine the ads that they could create. If they know your net worth, if they know all of the property you hold in crypto, combine that with everything they know from ads. And like, wow, this could be a very powerful business model for them. and is not necessarily a great thing in terms of our financial privacy, let me say. So, like, one takeaway from this is, my God, we need on-chain privacy at the base level, don't we?

Starting point is 00:56:36 Like, we need that fast. And I guess the other take is I wouldn't be surprised to see the Googles of the world, the big web to add companies, further integrating this type of functionality. In fact, the only surprise in my mind is why they've taken so long to get here in the first place. Yeah. We've got a lot of data. And let me tell you, Google knows what to do with. that data. They'll figure it out. So a super scary tweet went out this week. Court rules against Coinbase in anticipated judgment. I think everyone got a heart attack by this. Then we realized that this

Starting point is 00:57:06 was Coinbase's request for the court to throw out the SEC's case against Coinbase. Coinbase, of course, for its staking program, also for its wallet being a brokerage, ended up this being a partial victory for Coinbase. So the court did indeed throw out the SEC's case against Coinbase for its wallet saying that the wallet is not a brokerage or broker dealer or anything like that. But some other parts of the case will proceed mainly Coinbase's staking program. So we are going to see the SEC and the Coinbase lawyers go toe to toe mainly over Coinbase's staking program, whether that was an investment contract or a security or like whatever.

Starting point is 00:57:48 And so sadly, this is going to take like years for us to actually see these court cases like play out. So we're not going to get clarity anytime soon. Gary Gensler might even be gone. So he might just drop this bomb and dip. Yeah. Good news, but like sad is going to take so long. Yeah, and I will say, well, what are the expectations here?

Starting point is 00:58:06 This is kind of a Hail Mary from Coinbase to just basically before the case goes to trial to just motion for dismissal. Like, this case is so stupid, Judge. You should just dismiss it all, right? And the fact that they got part of that is a partial win. But overall, Jake Turingki says, this is probably a. at least on this dismissal, this is a win for the SEC. There are some positives, he says, it's great for defy that wallet is not a broker.

Starting point is 00:58:32 There's good language on other issuers like Howie's investment of money prong, but the court sided with the SEC incorrectly, in his opinion, on several key issues, particularly whether staking could be a security or not. And that is worth going to court in the eyes of this judge. We will see the fallout from that. Also, somewhere in the same realm,

Starting point is 00:58:54 a CFTC versus Q-Coyne. Q-Coin, of course, the exchange, got a regular old slap on the wrist stuff we've seen before. Ku-coin, 30-million customers, did not implement K-YC. They had future exchanges, and they didn't register with his CFTC. They facilitated

Starting point is 00:59:08 money laundering. They accepted money from addresses that touched tornado cash. So, they are getting bonked by the CFTC. That's the news with that. But, Ryan, there is a hidden gem. The CFTC inside of the complaint to Ku-coin explicitly labeled Bitcoin, Ether, and Lightcoin

Starting point is 00:59:23 mainly ether, as commodities in the complaint. Jake Chavinsky, his comment says, usually the SEC and the CFTC pretend they aren't in a turf war over crypto. Today, the CFTC is openly attacking the SEC's supposed investigation of ETH. This may seem minor, but it's actually a pretty savage interagency drama by DC's standards. Let's go. I love drama. Me too.

Starting point is 00:59:50 Lastly, on regulatory updates, Krakken. is launching their own state chartered full reserve bank. I guess, David, if you can't beat them, join them. All right. They keep shutting out crypto from the banking system. So Cracken's like, how about we just make a bank? And that's what they're doing. We'll just be there on the inside.

Starting point is 01:00:09 This, I think, only works in certain states. Wyoming is very crypto-friendly. So they have registered this full reserve bank in Wyoming. And that's going to be Cracken's institutional play. Cracken Institution take custody of all of these various assets under a full reserve bank charter license. No fractional lending. Full reserve bank. I wonder what the Fed thinks of this, right?

Starting point is 01:00:33 It's like, you know, states right. States have the ability to do this. And I don't know how the Fed's going to take it. Two bankless ventures raises this week. We do this segment whenever a bankless ventures port coat announces a raise. We have two this week. A Bob that is a build on Bitcoin. That is a Bitcoin layer two.

Starting point is 01:00:50 using the EVM to make a layer two on Bitcoin. A really cool project. We love the Bitcoin Renaissance. It turns out Ryan and I love the Bitcoin Renaissance. You know what's crazy about this? I love their approach. They're basically using the OP stack, right? And it's EVM.

Starting point is 01:01:04 And they're going to start by actually settling on Ethereum. And I'm going to swap that out at some point to settle on Bitcoin. And then they're going to have the ability to settle on Bitcoin or Ethereum. It's like a layer two that is kind of like amidextrous. It's like one of these platypus layer two is that confuses everybody because Bitcoiners are like, hey, I kind of like that. And Ethereum people are like, hey, I kind of like that too. I love it.

Starting point is 01:01:26 I'm very, very bullish on the whole Bitcoin layer two space, mainly just because like Bitcoin's got a monetary asset that's worth $1.5 trillion. That asset would like to, you know, play, play games. And things like Bob are going to do that. This deal was led by Castle Island Ventures. So like us and this has Nick Carter, you know, it's like slap in hands. Next up, Sucinct. Sucinct is a Prover network.

Starting point is 01:01:48 It is basically commoditizing access towards ZK proofs for developers. Different ZK circuits can all be put into the succinct platform. It's a general ZK platform to helping the devs integrate ZK into their application, either in Web 2 or in Web 3, it doesn't matter. And so basically scaling out ZK for the world. ZK proving is pretty expensive right now, and this is going to make this a lot cheaper. So it's going to make ZK EVMs a lot cheaper over time.

Starting point is 01:02:18 but then it's also going to give us the ability to like chains are just one type of ZK app, right? What other types of apps can we build? I think this is a frontier that we're going to explore. Not right now, but it's probably like 12 to 18 months out and is super exciting. Yeah, but very cool. Yeah, so this was led by paradigm with participation from Robot Ventures, Geometry, ZKV, and Us, Bankless Ventures. Me of the Week, David. What do we look at? This is a tweet I saw from Liam Horn, who is talking about why stable coins,

Starting point is 01:02:48 are just totally going to win, it is an email to Liam saying, hey, Liam, we have processed the wire transfer today, and let's hope for the best. Wire's stuck compared to stable coins, man. Wires suck. Man, it's like going back to the fax machine. Ryan, are you ready for the most funny moment of Zen

Starting point is 01:03:06 that I think has ever been on the video podcast? I love this. Just stay tuned, maybe a little tease. It's about meme coins. It's about meme coins. And telling your financial advisor about meme coins and their reaction to it. This definitely works better on YouTube if you're watching, but it'll work just the same if you listen.

Starting point is 01:03:23 Guys, got to end with this. Risk and Disclaimers. Crypto is risky. You could lose what you put in, but we're headed west. This is the frontier. It's not for everyone. But we're glad you're with us on the bankless journey. Thanks a lot. These are coins. I'm assuming that I'm looking at this. All of your investments are in coins. Yeah. What do they call these? What are they shit coins? Shit coins. Yeah. So you're comfortable having all of your money in shit coins. Well, I'm very comfortable.

Starting point is 01:03:54 I'm very comfortable So we're going to start We got Joe Bowden Yeah Yeah It's not that funny It's pretty good It's like Biden

Starting point is 01:04:06 Right? Yeah they just switch the letter Yeah and it's fucking crushing It's not creative at all And really not that funny I'm not judging it by the creativity I don't really want to get hung up on Joe Bowden We'll move on

Starting point is 01:04:17 We got dog whiff hat That's dog with hat Yeah all the whiff coins are Just on a rocket ship Like to the move. That's what they're calling them with coins? With coins. Is there other examples of that or just dog with that?

Starting point is 01:04:29 There's a couple of them. I'd prefer not to say. But let me just tell you, if you got an option to buy with coin, buy. I'm not going to buy with coin, but I appreciate the advice. So we'll move on from that. And we got you suck. Is that like you suck? No, no.

Starting point is 01:04:45 Actually, that's a long-term investment. You suck. That one we're keeping forever. That long-term. That's you sell you gay. I kind of back myself with Duke Horn on that one. I will admit that I didn't really think it through. So if it wasn't you sell you gay,

Starting point is 01:04:58 is it something that you would have sold? Yeah, fast. That's doing terrible. All right, so we're going to sell that. No, we're not going to sell that. I'm going to sell that one definitely. Dude, you seem like you want to sell that, like a little too bad. Do you want to sell it?

Starting point is 01:05:13 Take the glasses off. I can't see you with the glasses on. They don't off completely. I don't want to take them all the way off. This is a meeting. And there's a meeting in church. We're selling you Sugg. We're not holding on to that.

Starting point is 01:05:26 Why do you want to sell you Sugg so bad? Because you said it was losing you money. So what? But if you sell your gay, it seems like you want to sell it really bad. I'm telling it for you. I don't care about this. I'm selling it. I'm really excited to sell that.

Starting point is 01:05:38 This next one I can't even say. Which one is? You know exactly which one it is. I can't say it. End word of this cage. That one is also doing great. So I'm going to keep it. All right.

Starting point is 01:05:47 I guess we'll hold on to that one. Yeah. Whatever makes money. Like when other people come in here with their investment, Are you breaking down the more? No, I've never, but people don't come in with, these people come in with Apple. Yeah, dude, Apple's got suicide nets out there.

Starting point is 01:06:00 You're not like, oh, this is just the word. No one's ever coming to my office with the N-wordless cage. The next one, this next one we got, black people don't recycle. Is that even a real thing? I don't know, man. So that's just, you're just making up new racial stereotypes. I'm not making them up.

Starting point is 01:06:16 I'm investing in new racial stereotypes. Is that real? Is that a real thing? Black people don't recycle? Because I know black people and they recycle. I don't know if black people recycle or not. It's just a coin. It's just let's make fun of the black people. It's making fun of the black people who don't recycle? Well, hold it if it's making you're making a lot of money on black people don't recycle? Making a ton of money. All right, well, hold it. I'm guessing you flip the page. See, this is troublesome. Why don't you go ahead and break down Jew coin for them? Nothing funny about that. It's nothing offensive about it either. It's just a coin that mentions Jews. Okay, then what about, let's go about, let's go down. Let's go down. Let's go down. down to the one next to it. What about the one that is, it's just a swastika? That's all it is, is just a swastika. You got a better argument there. I'll give you that one.

Starting point is 01:07:09 How did you even enter that in? Because that's not on my keyboard. I don't have a swastika on my keyboard. Would you have to go buy a separate keyboard somewhere that had a swastika key on it? I didn't make it, dude. I didn't, I didn't. You had to type it in. You had to type it to find it. I just typed in swastika and it popped up. I'm going to give you two options right now, okay? Because now you crossed the line. See, I was fine with everything else. Now you crossed the line. So I'm going to give you two options. One, you leave right now.

Starting point is 01:07:34 You keep all your coins. You walk out of my office. Well, I'm not losing USUG. So fine. I'll leave. And the second option is you stay. I sell everything. No, that's...

Starting point is 01:07:43 I sell USUG. I sell Swastika. I sell M. Wordilus Cage. I don't give a shit. No. We're all set. We're done.

Starting point is 01:07:49 I'll go somewhere else. I'll get the fuck out of it. I'll sell everything. If you're not out of my office in 10 seconds, I'm selling everything. I'm selling Usog first. Usog is going first. No, it's not. Get the hell out of my office now.

Starting point is 01:08:01 But do you know anyone who works with money who isn't yours? No, get out of my office now. My God. Hey, what's up, buddy? It's Uncle Jake. Did you do me a favor and just put everything in black people don't recycle? Yeah, no, I don't even know if it's true, but apparently it's skyrocketing right now. So there's everything on that.

Starting point is 01:08:38 All right, thanks.

Bankless - ROLLUP: SBF 25 Years | Coinbase vs. SEC | Blobs Demand | Blast Controversy

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