Bankless - ROLLUP: SBF Trial Underway | ETH ETFs Are Here | Ripple Wins Again

Episode Date: October 6, 2023

WRU 1st Week of October ----- 🏹 Airdrop Hunter is HERE, join your first HUNT todayhttps://bankless.cc/JoinYourFirstHUNT ------ 📚 a16z Startup School | Applications are now open! https://a16zcrypto.com/crypto-startup-school/?utm_source=bankless&utm_medium=podcast&utm_campaign=css_london&utm_id=css  ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE ⁠https://k.xyz/bankless-pod-q2 ⁠ 🦊METAMASK PORTFOLIO | MANAGE YOUR WEB3 EVERYTHING ⁠https://bankless.cc/MetaMask ⚖️ ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum ⁠  🗣️TOKU | CRYPTO EMPLOYMENT SOLUTION https://bankless.cc/Toku 🦄UNISWAP | ON-CHAIN MARKETPLACE ⁠https://bankless.cc/uniswap 🔗 CELO | CEL2 COMING SOON https://bankless.cc/Celo  ------ TIMESTAMPS & RESOURCES 0:00 Intro 4:57 MARKETS https://www.growthepie.xyz/  8:14 Uptober or Rektober? https://twitter.com/stackhodler/status/1708421490264166754  11:00 Arthurs Take https://twitter.com/cryptohayes/status/1709775837271388267?s=46&t=LKBC7Qtm18FnZ380xCF2pA  12:14 US Debt is Insane  https://x.com/zerohedge/status/1709321746673786896?s=20  13:40 China is Selling https://apolloacademy.com/wp-content/uploads/2023/10/China_Outlook_Oct3_2023.pdf  https://www.cfr.org/blog/how-hide-your-foreign-exchange-reserves-users-guide  18:43 SBF Trial Has Begun! https://www.cnn.com/2023/10/03/investing/sbf-trial-jury-selection/index.html  https://twitter.com/lex_node/status/1709318776078877071  25:24 Day 2 30:45 Michael Lewis Takes 36:24 Anthropic Plot Twist https://www.theblock.co/post/254667/anthropics-new-raise-could-mean-full-payout-for-ftx-creditors-lawyer  38:05 ETH Futures Derby https://x.com/EricBalchunas/status/1708841958020366838?s=20  https://x.com/EricBalchunas/status/1708953284495708559?s=20  https://x.com/vaneck_us/status/1708113739881337125?s=20  https://x.com/vaneck_us/status/1707888396171977036?s=20  41:30 ETF Takes https://x.com/EricBalchunas/status/1708865693481836849?s=20  https://x.com/EricBalchunas/status/1709187579352875039?s=20 https://x.com/vaneck_us/status/1709353826937889152?s=20  https://twitter.com/brianquintenz/status/1708966869284073929?s=46  https://twitter.com/NateGeraci/status/1708954390701236544  https://x.com/EricBalchunas/status/1709552867088924820?s=20  46:01 Grayscale Files For Spot ETF https://twitter.com/EricBalchunas/status/1708822647369273637  48:59 Celestia Launches Token https://twitter.com/CelestiaOrg/status/1706671239572676881  https://x.com/RyanSAdams/status/1706714159235142081?s=20  https://twitter.com/MessariCrypto/status/1707773950732771740?s=20  51:15 Su Zhu Arrested https://www.bloomberg.com/news/articles/2023-09-29/three-arrows-capital-co-founder-zhu-apprehended-liquidator-says    52:43 OP Fault Proofs https://twitter.com/OPLabsPBC/status/1709236296604930487  54:14 SEC Loses again to Ripple https://x.com/BillHughesDC/status/1709345748930748708?s=20  57:38 Questions From The Nation https://discord.com/channels/615592155481767941/1058053004705669211/1159165917045981245  1:01:21Takes Of The Week https://x.com/mdudas/status/1709350657918939557?s=20  https://x.com/TrustlessState/status/1709002107238432928?s=20  https://twitter.com/RyanSAdams/status/1709219774020899079?s=20  1:06:13 What Are We Bullish On https://x.com/TrustlessState/status/1709343459201499404?s=20  1:08:32 Meme Of The Week https://twitter.com/bulltrapper0/status/1707759825151561943?s=20  1:11:06 Disclosures ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures 

He said you have to understand that when it went in there, it was a rounding era, that I felt like we had infinity dollars in there and that I wasn't even thinking about it. That, that I think is very revealing. That is how SBF treated FTX. I have infinite money. I was like, where did I put that $5 million? Is it under my desk? And the reason why they had to send it to Alameda is because they knew FTX could not get bank accounts.

It's not less like, oopsies, we don't have bank accounts to send it to Alameda. Like, it's what's their biggest problem. Bankless Nation, it is the first Friday of October, I mean October. David, what time is it? Oh, it's time for the bank this Friday weekly roll-up for Ryan, where we covered the entire weekly news in crypto, which is always an ambitious endeavor, especially this week.

It's one of those weeks, yet we persevere into the frontier nonetheless. How are you? David, are you team, October? You think it's going to be a up-month, down-month? What do you think? I'm not ready to be hurt again, so I have no strong opinions. You've been hurt? Too many octobers?

previous? Just like, there's so many reasons to be bullish. And if I keep on saying, like, look at all these reasons to be bullish. And then we get like $1,200 ether. And we'd be like, it did it to me again. It's that time in the market. But okay, but let's contrast this with October last year. All right.

So October last year, it was just before the fall of SBF. Yeah, right. And we got through an absolutely grueling summer where we had like the collapse of Terra, Luna. We had three hours capital liquidation. We had triple-digit Eath. It was an absolute grueling summer, 2022. And here we were in October, and we're getting ready to take a breath and be like, oh, man, that was crazy.

We're on the other side of that. And yeah, I'm so glad all of that's over. Like, we're good, right? It's like, that wasn't so bad. Like, we're good. We made it. And then what happened? Meanwhile, CZ and SBF are just duking it out on Twitter.

Yeah, that was a year ago. That was a year ago. But we got some SBF news. Now, one year later, what's happening with SBF? this week. The SBF trial has begun. It began on Tuesday. So there's been the jury selection that has happened so we know who the jurors are. The opening statements have come out from each side, both the prosecution and the defense, so we know what their general strategies gist is. We've had the first witnesses. So the first witness has come on and then we have today,

Thursday, the second round of witnesses, some familiar names that you will be familiar with. All of that happened this week. It's going on. And it will go. on for the remaining six weeks of this whole thing. So we will recap it all and also tell you what's to come. But that's not all, Ryan. What else is going on? The ETH futures ETF, derby. Okay? Remember last week we said we might have ETH futures by Monday and boom, we got ETH futures. So we're going to talk about that. Who's in the arena? Who's ahead in the race? What all of this means for crypto? The SEC takes another L. Gary just can't stop losing, but to top it all off, Suzu of Three-Eos Capital arrested in Singapore while trying to leave the country.

And the order is out for Kyle Davies arrest as well. Kyle Davies on the run. Man, like that's just good stuff, man. But then, of course, the market's not necessarily doing following suit. So this is why I'm saying I'm not ready to get hurt again. Well, not ready to get hurt again. Not ready for October. Though there are some believers.

We'll talk about that in the market section. But before we get there, David, it's back to school time. And I'm not talking about regular school. I'm talking about crypto startup school, my friend. This is from A16Z. What is crypto startup school? A16Z crypto startup school is famous. It is an accelerator, a 12-week accelerator program with some of just the biggest

entrepreneurs and founders as your mentors in the industry, along with a lot of the partners at A16Z. And so you apply. You apply with your startup and you apply to the school. And then you get accepted, hopefully, to go and be a part of this accelerator. We at Bankless Ventures look at a lot of the startups that come out of accelerator programs like this, especially A16 Z's. And so being accepted to the A16 startup school, I would call that bullish. So like I said, 12-week program is in London from March 27th in London in Britain.

And so, I mean, it's just like some straight market experience. Don't get your MBA. Don't do that. Just go to A16C crypto startup school. Yeah, it's like a startup MBA. I can't recommend a program like this enough. Chris Dixon, of course, is a mentor there. Jing Wang from optimism, just absolutely world class.

I don't think anyone else does it better. And the call to action is if you are a crypto founder, Web3 founder, make sure you hit the deadline and apply to A16C crypto startup school. You've got to do this by October 20th, 2023. 15 days. 14 days. 14 days. 15 days. Get on it.

Let's do it. This is a build market. So let's get building. David, market section. Let's talk about it. What's Bitcoin price doing on the week? Bitcoin price. Happy, up 2%. 26,900, where we started. We are up 600 more dollars to 27,500, up 2% on the week. Nice job. Big. Ooh, we kind of erase a little bit of the gains. A little bit, just a little bit. Just a little bit. All right. Hopefully 2% by the time you're listening to it. Overall, how about ETH price? Starting the week at 16,060, down 2%. WTF at 6%. at 1620, Bitcoin up 2%, ether down 2%, what gives?

I don't know. Yeah, ETH got futures. Bitcoin, what did you get this week? Yeah, what the hell? You didn't get futures. You already had those. How come Eith is down? Stop all the good news.

It's bearish. Yeah, yeah. Okay, how about the Eith Bitcoin ratio? Below 0.06 at 0.059. Got to thank the crack in charge for this. These charts are glorious. Tell me exactly how bad I feel. High fidelity.

Uh-uh. This is October. Everything changes, David. How about crypto market cap? $1.1.2 trillion dollars. I feel like it's always that. Yeah, it really is, man. Does this ever change week to week?

It's pretty flat. Do you remember when prices used to change? No, look at all this flatness. It's about a year of flatness. It's a year of like slight incline up. Well, because, well, okay, a year ago, October, prices were maybe around where they are now, and then they dumped. Bitcoin said it's yearly low 11 months ago. Ether said it said it like 15 or 16 months ago. Yeah, what a year it's been, hon. How about layer two? This is a different chart than we

usually use. Grow the pie.xy z. This is actually somebody from the bankless nation. It's got some different analytics on it versus layer 2B. The layer 2 user base, David, you check in these numbers? This is the number of unique addresses interacting with layer 2 networks in a given week. And what are these numbers that we're looking at here? The shape of the chart, first and foremost, are shapes that I enjoy. That is an up and to the right chart. Yeah, what is that number? 2.1, 2.2 million unique addresses across all Ethereum Layer 2s in the last week.

Wow, that's great. That's great. ZK Sync era coming in at 1 million. Arbitrum coming in at almost a half a million. Opie Mainnet, almost 200,000 base, 170,000. Mutable X, $25,000. Okay, cool. Cool.

Yeah, I enjoy looking on it from this perspective. You can also see the transaction count, 3.11 million. You can see the stable coin market cap on layer two. That's just great signal. Yeah, whoever put these, whoever put these particular metrics together, love that. Oh, well, you can definitely tell that it's a bankless listener because they have rent paid to the layer one. Wow. Those are the words we use.

He's bags. What is that? 176 K. I guess that's on the, maybe the month. A daily. That's a 24 hour number. Oh, daily, daily. Oh, yeah, good, good, good. I like that on the daily fees paid users.

So some good signs, as usual, in the layer two markets. It doesn't look like a bare market in layer two land. David, let's get to some market news, okay? The question is, is this going to be October or is this Rectober? We've got two contrasting opinions here. Let's talk about the happy one, the October one. This is coming from Bitcoin land. Apparently, octobers historically, David, have been pretty good for Bitcoin.

Not all of them, but many of them have been. And that's the base case for Bitcoin October. What's this tweet telling us? It's saying eight out of the last 10 octobers were positive for Bitcoin. With an average gain of 22%. That's double digits. It's been a while since we've seen double digits. And then they also go through some looming bullish catalyst specifically for this October.

ETF approval coming soon. TM is what people are speculating. marketing pushes by, of course, you know, the big boys, Black Rock, Fidelity, Franklin, Templeton. There's bond markets are forcing central bank intervention. We did kind of a show, a macro show this week that was talking a little bit about that, just the inevitability of, of course, the money printer being turned back on. We don't know when, but it will be inevitable. That's kind of the theory. Awareness of U.S. debt starting to become more than what we can service. So we have more in interest payments than we make as money as a country. It's just healthy financials.

And then, of course, the happening in early 2024. Bitcoin gets its happening, I think, in March, late March. And so the issuance of Bitcoin will be cut in half, of course. This is traditionally being considered a ceremony of Bitcoiners. I don't think bankless has existed since we've had a Bitcoin happening. I think we started bankless right after the last happening. So this would be. Is that true?

Yeah, that's true. Yeah. When was the last happening? May 11th, 2020. So the podcast had started. The company had not. Yeah. We were probably four or five podcasts in by that time.

And we celebrated happening then. No, no. We were four to five months in. So multiply that by four. Wait, wait. When was it? What month? May of 2020.

May? Oh, we started in March, right? 2020? We started in, I thought we started in January, bro. No. No, no, no.

It was, I think our first episode was the beginning of March, 2020. Bankless listeners keep us honest. You're right. You're right. Because the second one we recorded while COVID was. decimating the markets. Yeah, that's right. I remember that.

That was absolutely brutal. That was extremely distracting. And I think here's the key point here. The weak hands have been brutally shaken out during the spare market, right? Brutely. Brutally. 76% that's Bitcoin or talk. 76% of supplies now in the hands of long-term holders.

And so with these bulk catalysts, I can't really go down much further because the high conviction diamond hands are the ones holding the Bitcoin at this point. So, you know, that's the bull case, I guess, for October. Now, whether that happens in October or it takes a little bit longer, I mean, who's to say, but it's a fun meme. Arthur Hayes, however, is taking the other side here. He's calling this rector. And he's not so much talking about crypto as he is. He's talking about the banking sector.

They say, he says, the banking crisis is contained. Nah, it's about to be rector. Thanks, Jay Powell and Grandma Yellen for the bear steepener that will bankrupt. up the banks. Grandma Yellen. Grandma Yellen, he calls her. Small bank index only 8% higher than April lows. Yatsi.

So he's saying, do you know when we were talking about the bank crisis last March, April? He's saying, well, we've been on a pause, but it's about to come back around. I didn't know this. Small bank index only 8% higher than April lows, right? So the small banks certainly haven't recovered from

those lows. And Arthur here, more than implying, explicitly saying that worse is coming for the banking sector. It might require some more bailouts here, David. There is one thing I've learned about Arthur in the last year or so. He's kind of a bombastic individual, I would say. You just learned that last year. I just learned that recently. Yeah. Yes. He's fairly bombastic.

Although the small bank index only being 8% higher is what was predicted, like universally across the board. So that's playing out. Yeah. We'll have to see. Here's one thing that is pretty easy to see, though. The U.S. adding 275 billion in debt. in what's the interval. One day, David. One day. 275 billion in debt. What's the crypto market cap right now?

1.1 trillion. And we added over a quarter of the, we added an Ethereum of market cap to our debt. An Ethereum per day. This is what the bull case for crypto is. We are an absolute dust spec into the size of the debt that we are accumulating. And the relationship between. these two things, that gap must close. That is the case for crypto. It's like the gap between the

size of the United States debt and the market cap of crypto closes over time. That is, that's the bull case. And remember, we are minuscule, absolutely minuscule to the size of debt. Yeah, look at this. Total U.S. debt is now 33 trillion. It hit 33 trillion two weeks ago. It's now 33 and a half trillion. and it's on pace to rise by $1 trillion in one month. So the totality of crypto market cap in one month is being added to U.S. That is absurd. Yeah, zero hedge what WTF is going on. That's a big question.

What are the implications of this when the U.S. is getting to wartime debt levels as a percentage of GDP? One interesting question on the minds of fintech this week is maybe yields are continuing to rise because China has stopped buying bonds, has stopped buying U.S. treasuries. And so this is a chart I found this week making the case that China's kind of done with treasuries. This is a chart showing the holdings of U.S. treasuries on China's central bank balance sheet going down all the way from 2012 up to 2023, going down by as much as $300 billion. Well, it was flat from 2012 to maybe. 2018, 2019, and 2020, and since 2020, it's been accelerating downwards.

Yes. So the bulk of this has happened in the last four years. This chart looks like China is kind of selling, right? And that's the thing. When the U.S. you know, increases its debt, it has to have buyers of that debt. And where are the buyers going to be? Are they going to be baby boomers, wealthier generations?

Are they going to be pension funds? Are they going to be foreign governments? I mean, historically, there's been a ton of demand. mostly in the form of central bank balance sheets. China has been buying a lot. Japan has been buying a lot. What happens if they reverse course? I guess there's also been some debate about this.

Some other people are saying, well, China's really not selling that much as far as treasuries. They're still continuing to buy. Apparently the data set here is pretty opaque. It's not very transparent. It's hard to tell exactly what China is doing. So there's some back and forth. But I don't know.

Like my DLDR is, if you're China, are you bullish on U.S. bonds? Are you bearish considering what's going on? Considering one trillion in debt is being added every single month at this point in time. And the U.S. is at, as relative to GDP, kind of World War II level of debt ratios, what would you do if you were a central banker? Yeah, it's, I mean, it's not like the fiscal situation in the United States is great, but it's also not like anywhere else is any better. Like a decent amount of significant amount of this kind of capital that we're talking about is going to stay in foreign asset currencies

or their foreign asset bond markets, right? It's not like China is saying, like, hey, we have decided that we are going to be short United States bonds and long equities or gold. Like that, we're talking apples or oranges here. And so, like, remember, like, as bad as the United States fiscal situation

is, it's more or less worse everywhere else. I mean, Argentine peso, for example, is inflating at 100, over 100% a year. And the Argentine peso doesn't have a large market cap. But we do have to kind of put these things in perspective, I will say. I think that's a good point. And maybe being the least bad fiat is going to be enough for the U.S. For some period of time.

Being the least bad fiat is pretty bullish in fiat terms. That said, is it bullish compared to other non-fiat assets, I ask you, all right? As ether is hovering at only $200 billion, the amount of debt the U.S. puts on its balance sheet in a single day. has a question to ponder, my friend. But we got a lot more coming up next, David. What do we talk about? Coming up next, the SBF trial begins everything that you need to know, along with the opening shot of the ETH, ETF Derby,

but of course, and also, Susu's arrested. So get your Shodinford hat on because that's where we're going. But first, a moment to talk about all these fantastic sponsors that make this show possible, especially Cracken, a preferred exchange for crypto in 2023. If you're not having an account with Cracken, consider clicking the link in the show notes to get signed up with Crackin today. Crackin Pro has easily become the best crypto trading platform in the industry,

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Twitter and visit cello.org to shape the future of Ethereum. The SBF trial has begun, David. This is getting mainstream attention to. It's not just crypto. I'm not trying to say this as big as the 90s OJ trial, okay, but it seems like it's a big deal here. And the stakes couldn't be higher for SBF, okay? On the one side, he could be acquitted of all of his criminal charges here. On the other side, he could be facing 110 years in prison. A lot of years. Okay? That's a lot of years. So give us the update. The trial, just started this week. What's going on? Yeah, specifically on Tuesday in Manhattan, federal court in Manhattan. So just to set the table here, SBF, he's pleaded not guilty to seven accounts

of wire fraud and securities fraud and other conspiracies. He's maintained his innocence since his arrest last December while also starting to try to shift to blame to others, including FTC's lawyers, as well as his former business partner and ex-girlfriend, Caroline Ellison, who headed up Alameda, of course. He's just blaming everyone else. He's just blaming everyone else. He just loves to blame. It's just not taken zero responsibility. Blame, blame, blame. Okay, so how long will this trial last?

It's expected to last up to six weeks. And so this is going to be a theme. We're going to probably have this in the next five weekly roll-ups. The expected defense, we started to get snapshots of things to come because we are three days into this whole thing. And so the defense of SBF, what is this, is that SBF is an inexperienced businessman, and was simply in too deep and never really actually knowingly committed fraud.

That's what he's going to say. Hey, I didn't know. I just got ahead of my skis here. And, you know, I was just trying to do this crypto thing. Crypto's hard everybody. But, you know, oopsies. TLDR, they're going for the Sam was just a kid argument. They're also going for the Sam acted in good faith argument throughout his time as SBF.

So they made a plea to the jurors. We're going to talk about who the jurors are in a second. They made a plea to the jurors of. as as FTCX was operated, as it was run, as Sam made choices, he was acting in good faith. So they're not, they're asking, they're pleading to the jurors to not judge SBF in hindsight. They're asking them to fill the position of Sam as he was put through very big decisions and asked for them, for their empathy to understand that some hard choices were made by Sam and that they were made in good faith. That is what is being requested. I think they're going to have some tweets to explain.

I'm pretty sure. During this crisis, some of the SBF tweets were not making a lot of sense if this person is acting in good faith. Yes. The opening statements from the prosecution actually cited tweets from Sam that Sam has since deleted, but you know, you can't really delete anything from the internet. Okay, so what would happen if he's convicted? And how about some of his cronies? Like you mentioned Caroline earlier.

Yeah, so you gave out the up to, 110 years in prison is potentially on the table for Sam. I'm sure he's not going to get all of those, but I mean, if you get... That would be the max. Yeah, it would be the theoretical max. Ellison, Wang, and one more sing, I don't know who sing is, also... He's executives, right? Yeah, all, yeah. Gary Wang is the CTO of FTX, Caroline Ellison of Alameda, one more executive. They all face potentially decades in prison, but they are likely to get a reduced sentence because they are cooperating against SBF. So when SBF is like, it was them, They are all like, it was him.

Of course. Classic prisoner's dilemma. Yeah. So we also got an artist rendition. If you want to go to the next tab, Brian. Oh, that's beautiful. This is great. Here's an artist rendition of Sam in court.

That is not accurate. But I don't know if this is much more flattering than the CNN photo that was used here. They gave him a haircut in his cartoon. Yeah. Okay, so ready for the jurors? The jury selection? Because that was day one. Yeah, yeah.

So jury selection, matters a lot. It actually is kind of like the bulk of it, right? Like most of it decided. It's 12 jurors that decide his fate. Where do these people come from? Are they defy users that were crypto users that were screwed over by SBF? Yeah, tell us about the jury selection, David.

So in the jury selection process, it was asked by the juror selectors, are you familiar with this case? And I'm guessing that if they jurors selected said yes, then. they were asked to not be jurors. They were like, okay, you get out. And so the jury is composed of a bunch of professions that are like pretty far away from crypto and finance. There is a train conductor. We have a nurse, a retired corrections officer, a social worker. A corrections officer? Yeah. A social worker, postal service worker, a stay-at-home mom, a high school librarian. One retired investment banker with a Stanford MBA, that would be the closest in relevance that any of the jurors are.

So like notably absent in the jurors are like people that work in tech, legal, and finance. Now like what's the significant? A lot of regular people though. Regular old people. Yeah. Like not crypto DGens, like normal, normal people. Okay. I don't, I'm, this is not, I'm understanding court dynamics is outside my real house.

I would, my gut take is that like if they were closer to tech and finance and legal, then Sam would have a worse situation than the current situation. but Martin Scareley, who is familiar with the dynamics, Martin Sreli, of course, the guy that went to jail for... Absolute terrible human being. Yeah, pretty... Pretty... Pretty not a great human. He went to jail for, like, jacking up EpiPen prices, but subject for a different day.

He's actually in crypto. He's actually in crypto. He was the guy that Pleaserdow bought the Wutang Clan album from, and that's why he is bitter about Pleaser Dow, if you remember, this is all aside. Anyways... I don't know. He just seems like a bitter person.

person, but he does know his jury selections, doesn't he from first-hand experience? What was his take on this? He generally summed it up as a disaster for SBF. So looking at who these people are, he's just saying, here's what the social worker will do based on like the meme of what a social worker is. They'll convict it. Yeah. Non-for-profit fundraiser will convict. The special education teacher will convict. The librarian will send SBF to hell. Now, Martin Screlly might be trying to to drum up some engagement on Twitter.

He might be doing that. Yes. I'm sure. Yes, he might be. So, but I mean, he's got probably one of the best perspectives out there. So take this with a grain of salt,

but I think it's useful. But his TLDR is that jury selection does not favor SBF. I don't think it does. And that was just day one was jury selection. Okay. Day two, which was yesterday,

I believe, that's where opening arguments began. Yesterday, Wednesday. Yesterday is Wednesday. Opening arguments were that, okay, so the prosecution opened with their arguments that were generally perceived to be cleaner and easier to follow than the defense. I mean, I think it's pretty easy to present the case that SBF was a fraud. So they used very simple words like SBF lied and SBF stole very repeatedly.

The line Sam Bankman-F freed used his company to commit fraud on a massive scale. was a quote, another quote. The money he was using to build his empire he stole from customers. And then this is when they cited previous SBF tweets that SBF has since deleted, but again, the internet never forgets. And contrast. They didn't use those fancy finance words, right? Like margin or collateral or liquidity or any of those scary words.

In fact, these are the words that the defense used. The defense gave a little bit more of a convoluted storyline that was a little bit harder to follow that McKenzie Sigelos from CNBC even said that for crypto people it was kind of hard to follow so not great. SBF's lawyer Mark Cohen instead gave the line

he was a math nerd who didn't like to drink or party and called him Sam a lot. So you know like trying to target the heartstrings like good old Sam he was acting in good faith. He didn't drink, dinner party. Don't mention the amphetamines though.

Don't mention the emphetamine. Okay so the defense asked the court hey, can we strike from the record all talk about recreational drug use? And the court was like, absolutely not. That is a very relevant factor. True story? Yeah, that is a part of this whole thing. Okay. But they had witnesses too. Who are the witnesses? We have, this is the next phase of this court. Yesterday, Wednesday, we had the first witness, Mark Antoine Giuliard, who is just a FTX customer, lost $150,000 with FDX. Mark, and it was asked to explain kind of his like,

due diligence on FDX and also his due diligence on why he kept his money inside of FTCS while FTX was imploding. So Mark explained that he perceived SBF as wanted to do good by the industry. He said that SBF's tweets in the days leading up to FDX's collapse assured Mark that his money was safe so that he decided to not withdraw his funds. Oh, Mark. Yeah. Mark. Not getting that back, huh? Right. So that was, witness number one. witness number two, Adam Yadidia was a close friend of SBF. He lived in the penthouse,

the $35 million Bahamian penthouse with like nine other roommates, software engineer at FTX, Trader at Alameda, said that he resigned immediately from FTX when he learned that SBF directed FTX to repay Alameda loans with customer deposits. So like pretty damning to say like SBF acted in good faith when one of the employees was like, yo, I am. out of here. And that was yesterday, those two witnesses. We have some interesting witnesses coming up that are actually on Thursday, as of today at the time of recording, which they will have already given testimony by the time you hear this. And who are those, David? Yeah, very interesting people. Matt Huang of Paradigm. So one of the two paradigm co-founders. Why Matt

Huang? Well, they were an investor in FTX. So they have some information that we would all like to know. Gary Wong, the CTO of FTX. And so, you know, this is the prisoner's dilemma and Gary Wong has chosen defect. So what does Gary Wong have to say? Sam Tribuko, who we have not heard from in a very long time. Who's he again? Remind me, who is he? The guy that Caroline Ellison eventually replaced Sam Tribuco yeeded himself out of Alameda forever ago. No one really knows why. Why did he do that? That's right. Yeah. I think we know why now. I think we might. Find out. But it's going to be the first that we've heard from Sam Tribuko since forever.

And so I think it's a safe assumption to say that he's also choosing defect on the prisoner's dilemma and he's chosen to cooperate with prosecution so that he doesn't go to jail. You know what's also interesting this week. Okay, so we've been waiting for this for a long time. But famed financial writer Michael Lewis. Author of the Big Short. Author of the Big Short. What else?

Money Ball had turned into a movie. Big Short turned into a movie. Flash Boys. Remember Flash Boys? Which is a fantastic book I read. The Blind Slide is also him? Yeah. So I think one of, one of, you know, finances, most influential writers, I would say, in telling stories, telling narratives, he was actually with SBF.

Well, all of this was going down because he was prepared to write a story about SBF, write a book, essentially, and all of this went down. And so he apparently went on 60 minutes last Sunday, David. I didn't see all of the interview, but we've got a few clips. And I got to say, he had a completely different portrait of SBF than the one you've probably heard and are used to from Bankless. So should we play some clips? Yeah, let's do it. These are the first time as I've heard these clips, so I'm kind of excited for this. Okay.

Let's take a look. Oh, by the way, his book is out. His book is out as of a couple days ago. I think he knowingly stole customers money, Sam. Put that way, no. So there's another side of this. In the very... No.

Michael Lewis says, no. He doesn't think SBF knowingly stole money. Let's hear why. Should we let him explain? Let's explain. Yeah. Money into so that it would go to FTX. But it was held in Alameda Research, Alameda Research bank accounts.

And $8 billion something dollars piles up inside of Alameda Research that belongs to FTC's customers that never gets moved. It never gets transferred. It never gets transferred. That sounds like a problem. It's a huge problem. What's the toughest question you think Sam's going to have to answer? How do you not know that $8 billion that's not yours is in your private fund?

I mean, really, how do you not know? Explain $8 billion is in your private fund that belongs to other people and you're saying you didn't know. Please explain how that's possible. Did you do that? Yeah, I did. What do you say? He said you have to understand that when it went in there, it was a rounding error that I felt like we had. Why does that mean that SPF didn't know that he stole Bucaster's money?

I don't know. That part is the logic there. It's because apparently FDX couldn't get bank accounts, and so this is why? I don't know. So here's Michael continuing here. That's the toughest question you think Sam's going to have to answer. How do you not know that $8 billion that's not yours is in your private fund? I mean, really, how do you not know?

Explain $8 billion is in your private fund that belongs. along as to other people, and you're saying you didn't know, please explain how that's possible. Did you do that? Yeah, I did. What do you say? He said, you have to understand that when it went in there, it was a rounding era, that I felt like we had infinity dollars in there and that I wasn't even thinking about it. I can see people watching this. That, that, I think, is very revealing.

That is how SBF treated FTX. I have infinite money. And I was like, where did I put that $5 billion? Is it under my desk? Like, who put that $5 billion somewhere? The thing here, though, is this is customer deposits. Yeah. Right?

And the reason why they had to send it to Alameda is because they knew FTX could not get bank accounts. It's not less like, oopsies, we don't have bank accounts to send it to Alameda. Like, it's their biggest problem. All right. Well, let's let Michael finish his statement here. Here you guys. Come on, guys. This is Elizabeth Holmes and cargo shorts.

And this is all a ruse. Don't fall for the shtick. This is a bad actor. It is a little different. supplying, you know, phony medical information to people that might kill them. And in this case, what you're doing is possibly losing some money that belonged to crypto speculators in the Bahamas. Whoa. This is not too excuse.

He should have done that. He should have done that. He should have done that. Really belittling what actually happened. Wow. Yeah. I think, I think so you could see Michael Lewis, right? Speaking on kind of both sides, but almost the sympathetic kind of clip for SBF.

It sounds like he just hung out with SBF for a long time while writing this book and got the SBF, I'm an innocent autistic kid charm. That's what it feels like, but you'd have to think that Michael Lewis, author of The Big Short, do you know, he's hung out with... You'd have to think that he's a journalist and would be able to figure this out. So here's where the interviewer, Flato asked him, was this a Ponzi scheme? Right. Fun story, and it's crypto in the Bahamas, but this is the...

oldest architecture of a financial collapse that's been going on for centuries. This isn't a Ponzi scheme. Like when you think of a Ponzi scheme, I don't know, Bernie Madoff, the problem is there's no real business there. The dollar coming in is being used to pay the dollar going out. And in this case, they actually had a great real business. If no one had ever cast aspersions on the business, if there hadn't been a run on customer deposit,

this still be sitting there making tons of money. No. Yeah. See, yeah, so it continues like this. So, of course, many people. Yeah, it continues like this. A lot of equivocation for SBF and the predicament he was in. It almost sounds a bit like a defense attorney might present this court in case.

So I'm not sure where Michael Lewis was coming from on this. But of course, you know, the Internet had a lot to say about this, in particular corners of crypto. This is Ram Al-Alawalia. What does he say, David? He says Michael Lewis is a great storyteller, but he delivers narratives rather than true understanding. FTCS was a money losing business that led to fraud. FTCS was getting arbed by their own clients. An exchange can withstand any run on the bank because its deposits are never re-hypothicated if it's a good exchange.

Basically, Rahm is saying FTCS was not a good business. They were not making money, and that's where the hole came from. I mean, he sums it up here. FTX raised $2 billion in venture capital, but it had $10 billion in losses. Raised $2 billion. You have $10 billion in losses. That's how bad of a business FtX was.

What was the difference between those two numbers? Customer funds, fraud. $8 billion worth of fraud. I mean, it's a pretty simple story, honestly. So I can do those numbers. Well, I will have to, I guess, read the book to get Michael Lewis's full take, but yeah, that's how it's going. But here's a plot twist, David. Big plot twist. So apparently FtX invested in a company, of course, it was investing in all sorts of things. One of the things

it invested in is equity in a company called Anthropic. What is Anthropic? And why is that a plot twist? Why is that relevant here? It's an AI startup. It's an AI startup that FTX invested in at a very early round. And Anthropic is currently looking to raise for another round that would boost its valuation to $30 billion, which would make FTC's ownership worth quite a lot. In fact, so much that it might actually be enough to plug the hole that FTX owes creditors if they can find liquidity on their deal. So if they can sell their anthropic ownership on the secondary market to interested buyers, they in theory have enough money to pay back creditors because they made a venture bet that somehow paid off.

That massively paid off. Wow. Like 10, 20, 30, 40, 50, something like this. And it's now the stake in Anthropic could be worth $3 to $4.5 billion if they can find liquidity for it. And with that,

they could help FDX creditors receive 100% recovery. Okay? So do you think FDX's defense is just going to be like, hey, no one got hurt. Look. These good investments. I think they'll be able to use that as part of the defense here?

Like Sam doesn't need to go to jail. He didn't lose any money. He just delayed. It's effective altruism, man. He just delayed the money. It doesn't like, ends justify the needs. Unreal, dude. It's going to be interesting.

But that could be a very good outcome for creditors, which of course is, you know, a happy state here. Wow. That was just week one of the FDX, SBF case saga. So I'm sure we'll have more to talk about in the weeks to come. But David, you want to get to the ETH Futures Derby? Yes. Yes, I do.

That's more exciting. Yeah. So the EF futures derby is now underway. The starting pistol went off on Monday morning at 9.30 in the morning. And so now there are a bunch of ETH futures ETF from a various number of issuers, Vannach, Pro shares, Bitwise, Valkyrie, Kelly, volatility shares. And so they're off. This is the SEC doing the thing of not kingmaking any one particular ETF.

And so they're allowing nine of them to all launch at once. And so this has created a competition between all of the ETF issuers who, in their first moments of inception, really need to clamor for market share and mind share, which has created some really awesome marketing efforts by some of these organizations. I'd like to highlight one, Van Eck with two big moves. First, their big move number one, some absolutely hilarious marketing. We don't have enough time to watch all of their video ads about their ETH Futures ETF. But, They are really good, I'd say. Should we watch this one? Should we watch this one? Just close your eyes to enter the ether. The ether is within you.

Prepare to harness the potential of Ethereum. Now finally in an ETF form. Coming soon. There's just a goat at the end that boss. I don't know why. There are, okay, if you go to the Vana, you want some entertainment, go to the Vanek Twitter account, just like scroll down.

Because like there's some just great memes. They're getting excited about ETFs right now. Yeah. Yeah. And like, not going to do it. The point is that they are actually advertising these to like TradFi. This is not for the crypto people.

This is for Tradify. Yeah. That's big move number one. Some of their most hilarious marketing. And again, I can't emphasize enough. Some great Zoomer meme videos that are worth watching. Big move number two out of Vanek.

Donating 10% of their ETH Futures ETF profits to the Protocol Guild. What's the Protocol Guild? The Protocol Guild is this organization. It's kind of like this Dow that is an effort to unbundle the EF. And so a lot of Ethereum core developers are a part of Protocol Guild who are building and maintaining the Ethereum code base, just like the ETH core devs and related people.

And so 10% of the Vannick ETH Futures, ETF profits, gets donated to the Protocol Guild. This tweet thread announcing this and talking about their decision behind this got 3,500 likes, which is a lot. We got Tim Bako retweeting it saying, very cool to see a tradfai company directly fund Ethereum core development out of its profits, hope that they can set an example for many of the businesses in this space that are building on top of open source protocols. I, everyone liked that. So here's a bunch of tweets that I just like put into a Photoshop. I got David.ev.ev from Polygon saying Vanek understood the assignment, talking

about, you know, giving back to open source protocols. We got light clients, Matt, saying, wow, thank you. We got Liam saying public goods are good. We got Crypto Texan saying this is pretty badass. We got No Sleep John saying, based whoever runs the Van Eyc Crypto stuff, death has a .eath alt, probably. Some great stuff. That's good stuff. I mean, who said Wall Street was just full of a bunch of gritty schmocks, huh? This is them giving back. Yeah. Good job Wall Street. We weren't the only one that released an ETF as well, right? That's why we called it a derby, because the horses were off to the race. So Bitwise as well was one of the others.

Their ticker is AETH. And there are a couple of others as well. Be outshone Matt Hogan, who we've had it on the podcast, wrote this thread about why ETFs are such a great opportunity. We're not going to read it because it's actually about why ether is such an opportunity because that's what is in an ether ETF and why ether is such a compelling asset. If we read this,

listeners would be like, guys, we've heard you guys say this 10,000 times. We know. The point is that Tradfai still doesn't, which is why Matt Wogan is writing this thread. And so, yeah, that's kind of the TLDR. Big question. Okay, now that Ether future ETFs are out in the market, how have they done? How did they do?

Ryan, how did they do? Not great, David. Pretty men, honestly. So Ether ETFs as a group, $2 million, that was their first day. And that's about normal for a new ETF. But if you compare that to the Bitcoin ETF, Future's ETF. That did the futures ETF. That did 200 million in the first 15 minutes. Yeah. At the top of a bull market in October 2021. So very different phases of crypto acceptance.

I don't know. Is that cope, David? Are you coping right now? I think Eric, actually, the ETF analyst, thinks this is still a pretty good sign, though. He says this. I think for the crypto world, it would be dumb to get bummed about this. He's talking about the low volumes for the first day. If you are a long-term investor, you should look at these ETFs as new business. bridges being built to a wider Tradfai audience that will facilitate traffic over time versus say a quick trade opportunity in my opinion. Do you agree with that? 100%. I think if the listeners listening to this and they are bummed about like Tradfai didn't like ether, they don't like us. That means that it's still early. Eventually they will like us. And if this was like an absolute bang out of the gate, it would be, it would mean that we are further along in the social maturation acceptance of ether. So, I mean, this is just like, you know, it's still early.

JPEG. Yeah. One thing we should specify, of course, this is a futures ETF. Bitcoin has already had a futures ETF for a while. This is the first Ether futures ETF in the U.S. to be listed. And that is not as good as and not the same as an Ether Spot ETF. That's what we're all kind of gunning for. Yeah, it's not futures when you're actually buying the ETF.

you're actually buying an IOU for ether on the other side. That would be a spot ETF. And Bitcoin is gunning for that as well, so it's a little bit different. And in good fashion, the Vanek Twitter account tweets out in all caps, low volume, just like your JPEGs. Bro, who's running this account? That one hurts, actually. There are some second order effects here, too, David. This is Brian Quintends. He says, by approving ETH ETFs based on ETH commodity futures contracts, the SEC has officially provided clarity on ETH status as a non-security. What is saying?

By approving an ETH futures ETF, now the SEC is capitulated. Yes. Now it's quite obviously a commodity or a non-security. Yes. This is an official statement implied that Ether is not a security by the SEC. Yeah, I think it's got to be. How else would this hold up in court? I take from Nate Jurassic says that this just,

makes the inevitability of the Bitcoin spot ETF approval come sooner than expected. Matt Hogan says this, that I expect we'll see a spot Bitcoin ETF this calendar year. Whoa, 2020. Wow. Vanek, Vennick CEO says it looks like in early 2024, we will probably see a spot product. So, I mean, just the likelihood of a spot Bitcoin ETF coming soon, TM is up. On that note, there are a ton of pending ETFs related to crypto stuff. So there's like Van Eck Bitcoin Trust, Bitwise, Bitcoin ETP trust, Ishares Bitcoin Trust, Franklin Bitcoin ETF,

Grayscale Ethereum Futures Trust. There's so many pending financial products, both spot and futures for Bitcoin and Ether, that are waiting to get approved or denied soon T. So the line to get access to get approval is large. And the claim here is that the SEC is running out of ways to say no. One of the big news is here is that Grayscale filed to convert their ETH-Trust, their E-Ether trust, into an ETH-E-TF. So again, this is just like the amount of pressure, the amount of like E-T-F approvals that are pushing on the door

of the SEC saying approve, approve, approve, is like large. Eventually that door is going to break. Yeah, absolutely. And that ETH-EEEEEE-E-E-E-E-E-E-A. price, I just looked at it a couple weeks ago. It was trading off like 30% ETH spot price. So 30% off NAV. I bet that's going to catch a lot of people off guard. That could correct. David, what do we got coming up next? Coming up next, the Celestia token, TIA, is out. We actually missed this last week, so we're covering it this week. Are you eligible? How valuable is Celestia? We'll talk about that. O-P stack, finally getting some fault proofs a day to think that layer two is on Ethereum, we're never getting

fraud proofs. SEC gets another L in the ripple case. How many Ls can carry take before he retires? He's going for all-time highs. We're going to get to all of that and more. But first, a moment to talk about some of this fantastic sponsor that make this show possible, especially MetaMask and MetaMask portfolio. As you are gearing up to be bullish, make sure that you know how to use MetaMas portfolio. If you already use MetaMask, you already have a MetaMas portfolio, so you go open it up there. It's a link in the show notes. Do you a MetaMask user? Well, you're listening to Bankless, so of course you are. The wallet you know and love just got a whole lot better.

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and optimism. On the Uniswap mobile wallet, you can store and display your beautiful NFTs, and you can also explore Web3 with the in-app search features, market leaderboards, and price charts, or use Wallet Connect to connect to any Web3 application. So you can now go directly to D5 with the Uniswop mobile wallet. Safe, simple custody from the most trusted team in Defyne. Download the Uniswap wallet today on iOS. There is a link in the show notes. Estia, which is a data availability network just initiated its Genesis drop. They're dropping a token. It's called TIA. David, give us the details here. 6% of the total supply is being airdropped. That's 60 million tokens. So 20 million tokens are

being aired up to developers and researchers, including contributors to public goods and key protocol infrastructure, ETH research, and early builders of the modular ecosystem. 20 million TIA tokens are being airdrop to 576,000 on chain addresses. Many of those are active users of Ethereum roll-ups, 20 million TIA to stakers and IBC relayers of the Cosmoses hub and osmosis. And so this is one of the more interesting airdrops in that it is a multi-chain air drop because CELESIA is a modular data availability chain. it's meant to be in the multi-chain ecosystem.

So tokens are getting- Serve all the chains. Right. So like if you're a Cosmos user, an Ethereum roll-up user, a core dev of Ethereum, like they're just spraying the tokens all over the place because that's what makes sense

in the modular world. Ryan, did you claim yours? No, I didn't, David, because Gary says I can't. Oh. If you live in the U.S., the Genesis drop is not available in your country.

No, no. It's been fully geo-blocked because Gary doesn't want you to have free money. So it's taking money. How much money would you? you have gotten. I'm actually not sure. It depends on the value of the token, but I will tell you, Celestia's implied valuation, this is a fully diluted valuation based on kind of the fully diluted market cap of TIA tokens, 2.75 billion. Woo! Woo! That's big, right? That's large. That's large.

Like, to justify it, this is what a Misari analyst says, Celessia would need roughly 2x the roll-up adoption of Ethereum. Can it get there? So, definitely. trading with some expectations on top of it. I also don't know. That would place Celestia at 28 market in market cap. 28 in market cap. Right behind Mantle network. We'll see how well that holds up over time, of course.

David, tell us about the three hours capital guys. We're talking about bad boys of crypto and justice meeting them. What happened to Suu this week? Yeah, so Suu was arrested in an airport in Singapore. where he's been, while trying to travel out of the country, interesting timing, the three-year-ehrer's capital liquidator, Tenno, received a committal order against Suu after he did not comply with the court order to cooperate with an investigation involving liquidation. The order has sentenced Sue to four months in prison and has also placed an order out against Kyle Davies, who has not

been arrested, which I can only presume means that he is on the run. He's been doing like CNBC interviews and such. Not in a while. Not in a while, but like three months ago he was. Quote from an article, As a result, Mr. Sue will be held in prison to serve his sentence of four months under the committal order, during which time the liquidators will seek to engage with him on matters relating to three errors capital, focusing on the recovery of assets that are either property of three hours capital or that have been acquired using three errors capital funds. The liquidators will pursue all opportunities to ensure Mr. Zhu complies infall with the court order made against him for provision of information,

and documents relating to Thero's Capital and his former investment manager during the course of his imprisonment. And thereafter, we may make applications for further court orders as required. So only four months in jail, but I think in my interpretation of this is that it just starts there and we will let this ball roll. Yeah, I'm pretty sure Singapore does not go lightly on this type of thing. David, OP stack has some fault proofs live on test net. What does that mean? Why is that a good thing? Yeah, the fault proofs, aka fraud proofs, these are the same things, they're synonymous, has been probably the OP stack's biggest void that needs to be filled.

They've been working on their OP stack. They were working on bedrock. And ever since, base was launched, their focus has been working on their fault proofs. Their fault proofs are now live on test net. So if everything goes according to plan, they don't need to rewrite anything, they can slot that in right into the OP stack. in any OP stack chain, which includes Optimism, Mainnet,

base, Zora, Goods Network, excuse me. The OPE stack chain will be able to insert the module of the fault proofs just like that. And then all of a sudden, every OPEC stack chain

will have fault proofs. On Layer 2B, that means they get their badge. Which of these badges is the state validation? They get that badge. Right now, it's orange, and that turns yellow or green?

One of those, too. That will go green. It'll go green. Yep. And it'll be amazing. Again, not just green for one chain, green for all the chains, which is pretty cool. All OP stack chains. That's a big move. Very excited.

Is there a call to action here about a security bounty too? Yeah, there's a bounty out there. To bring fault proofs into production ASAP OP. Optimism is calling all security experts to help them test the alpha system and find bugs. Bounties up to $2 million and $42. Can't forget that extra $42. 42 is important, I think. Gary G.

just eaten else yet again in the court system. So, you know the case he lost with Ripple, the SEC lost against Ripple? Well, SEC lawyers appealed that, and a judge just smacked him right down, said, nope, you can't appeal it. You already lost. That loss is now permanent. A federal judge rejected the SEC's bid to appeal its loss against Ripple. Sheathes. The SEC has failed to meet its burden under the law to show that there were controlling questions of law or that there are substantial grounds for differences of opinion. You could try again in April 2024, apparently. That's the next time they can appeal. So Gary just getting smacked down again. Bill Hughes says this is pretty satisfying. I tend to agree with him. What's his take here? His take is that the SEC's

position in this motion is directly inconsistent with their position about the Howie test, basically calling Gary Gensler out for being two-faced and, you know, taking one side when it is convenient. to him in a different side when it's also convenient to him. The court saying, hey, no take-backsees. Coming up next, David. Coming up next, we got some questions from the nation. Are we even ready for a bull market? Man, some time to have some self-reflection.

The bald alignment chart, you can't miss that. And what are we bullish on this week? Of course, the usual. Bankless Nation, we're going to get to all of this and more. But first, a moment to talk about these fantastic sponsors that make the show possible. Formerly known as BitDow is the first. Dow-led 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,

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user interfaces, security, count abstraction, roll up maturity, interoperability, privacy, on-off ramp capabilities, but also regulation our Democrats take is that we could very well use another 12 months before we open our arms to the next wave of normies. Do you know what, David? I can't say I disagree with our Democrat. And this is clearly a bankless listener is listening to a lot of episodes talking about the things that we still have to improve on. User interfaces, security, account abstraction, roll-up maturity. Feels like we could use some time in the other. The one thing I'll say before throwing it to you is, I don't know that we necessarily get to choose when a bull market happens. I was thinking the same thing.

I don't think it's up to us, brother. Unfortunately, but what do you think? Are we ready for a new bull market? Should the bold gods decide that it is time and a bull market has been bestowed upon us? You know, where will we feel some of the growing pains of that? I don't think we have ever been ready for a bull market. I don't think we ever will be ready for a bull market. what does being ready for a bull market mean?

It means that when people come into crypto for the first time that they stay in crypto for goodsies. Like we have... They like it. They don't get ripped off. They don't get ripped off. They have a one-to-one ratio of incomers to settlers. When...

So like that to me, it's like, when will we have a bull market where every single incommer stays as a crypto person? I don't think we're ever going to get there. We can always improve on that ratio. But like, we had a bull market in 2013. We had a bull market in 2017. We had a bull market in 2021. We always lose people because we're never actually ready.

I think our Democrat identified a bunch of things that could definitely use improvement on. Like, are we, is account abstraction ready? One out of 10 is account abstraction ready? Absolutely not. Interoperability, layer two's, layer two abstraction. That's a bit better. We are like three to four out of 10 on that. On an on ramp, often on ramp capability.

It's better. Definitely improving. I would say roll up maturity. Regulation. Four to five out of ten maybe. Security. Ooh, dog shit. Two out of ten.

But the thing is, it's just like, we get better because of bull markets. And so like it, we, the bull market will identify the weaknesses. They'll exploit the weaknesses. We will feel pain. And then we will solve those weaknesses. So are we ready for bull market? No. Will we get one anyways?

Yes. Will it provide valuable motivation and identify. identification of things we need to work on to be ready for the next bull market. Yes, it will. Another way to answer that is we are way more ready than last time. Always. Always. So, I mean, last time, the theory of main net, or is like 10 to 15 transactions per second, now we have a whole bunch of cheap block space. Right. So that's going to feel good. One of the things I think I'm most worried about for the next bull market in terms of like hacks is actually bridge risk, though, David. That's why it's really great to see, you know, the OP stack get fraud proofs kind of together

and iron that out. But I still worry a lot about the brittleness of our bridges, particularly in this multi-chain environment. Are you talking about the canonical bridges? Not the canonical bridges so much. That's like smart contract risk once we get fraud proofs down. I'm talking about just all of the bridges from, you know, Arbitrum to Optimism or Cosmos to somewhere. Oh, it's all the cross chain type stuff. That's a worry point for me. There are others, but we're more ready than last time is what I would say. In particular, our block space is going to be a lot cheaper.

So that at least is good. Some takes of the week. This first one is from Mike Dutis. Here's what he says. We're actually in the very beginning stages of the, and then you win phase, but you wouldn't believe it. I think that's perfect. Just mic drop.

It feels like we are winning. Other than the prices, it feels like we are winning. Where does it feel like we're winning? Financial markets, ETFs right now. ETFs, getting ETFs, getting more ETF soon. Gary taking the L's. We're getting regulatory clarity. Yeah, those are some big ones.

Yeah, I think later two adoption. It's been great. Yeah, patching up fault proofs before they break, which is the correct order of operations. Definitely some wins here. Take from David Hoffman this week, I'll read it out. In the last two weeks, I've heard the take, the SBF overhang of crypto is gone.

times, Kevin O'Waki after visiting Capitol Hill, Matt Hogan discussing Tradfai clients and interest, and the SBF trial begins this week too. Soon, we will be totally rid of SBF's curse. David, you think SBF has cursed this industry and we're getting ready to cast away that cursed? Yeah, yeah, I think that's right. It's taken a long time for us to get one year, actually, to get rid of the curse of SBF. Like, oh, crypto, it's the SBF thing. Like, we're getting rid of that. Awaki said when he was in Capitol Hill that the stank of SBF seems to has mostly lifted the opportunists who used

SBF and the FTX implosion to advance their agenda last year have played their hands already implying that like anyone who wants to use the FTX as like to gouge the knife into crypto they've already done that and they don't have any more juice to squeeze there. Matt Hogan says that as soon as BlackRock filed their Bitcoin ETF

clients stopped being concerned or like raising the topic of FTCS and SBF. And this is before we put SBF in jail for decades, right? So once that happens, then like, what do you mean SBF is crypto? We put him in jail. Like he's not crypto. That's gone. Unless he gets acquitted, David. Hey, FDX creditors are made whole.

And SBF returns to the throne. Yeah, right. Oh, no. Wouldn't that be a dark ending to this whole thing? No, I tend to agree with you. Here's my take. You should read mine. Okay.

I read yours. Roddham says people talk about crypto-friendly countries, but we should be asking what type of friendly? Because there's Wall Street friendly and then there's citizen-friendly. Wall Street-friendly gives economic freedoms to banks and institutions. Securities, Clarity, Stablecoins, and ETFs are all Wall Street freedoms. Citizen-friendly gives freedom to individual citizens right to. encryption, right to custody your own assets, right to peer to peer commerce. These are citizen freedoms. I expect most jurisdictions to grant Wall Street crypto freedoms eventually,

but citizen freedoms, citizen freedoms will be a fight. I love this dichotomy. I love this dichotomy. I mean, this came after our episode with Sandy when we're talking about Hong Kong and that episodes could be on your bankless listener, your feed here pretty soon. Wednesday. But yeah, it very much struck me that even some of these ETF wins and some of these security wins in court, these are still kind of the surface level Wall Street freedoms. And they're worth fighting for it and they're good for crypto. And I couldn't be more pleased. And I think we eventually win there. But what I'm more worried about is the actual citizen freedoms. So I'm, worried about us being able to go through kind of the full defy gauntlet and preserve that as an open,

permissionless, censorship-resistant protocol that anybody in the world with an internet connection can use without having to use a state ID, AMLKYC, without it being controlled by some sort of centralized gatekeeper or intermediary. Those are some of the freedoms, like the right to encryption, the right to privacy, the ability for me to pay you, David, without some eye of sauron kind of watching that transaction with the ability to kind of gatekeep it. That's what I worry about. And those are the things that I think bankless cares most about. And if we just get the banker freedoms, but we don't get these citizen freedoms, I'm not feeling great about what we've accomplished. I mean, it's maybe incrementally better, but it's more of the same. So it's

worth fighting for more ahead, I guess. Right. Is it fair to have this be the dichotomy between the West and the East, the Wild West and the Civilized East? I think so. I like that. I think you said that at the end of a recent podcast. You were like, hey, now, you know, we're going East a little bit. And that's great. Let's go East. The East is being developed. Yeah. This is being developed, but we can't let it, yeah, we can't let it shift the real frontier here, which is this is about open permissionless money system for the entire world for everybody. Those are our takes of the week. David, what do we got? What's on your mind for being bullish? What are you bullish on? One of the themes I've been noticing lately is this, like there's frustration with the crypto prices,

mainly from myself, but also from others, while there's so much good news. So like what is with that? juxtaposition, I thought good news means good crypto prices. There is a gap between all the good news that's happening. Gary taking the L's, getting the ETFs, but the prices are absolute dog shit. What's up with that? That is called opportunity, my friend. That is the difference between those two things is what you should be bullish about. If you have conviction and you're seeing good news happen and you are seeing prices get cheaper, that should be awesome for you. So that's what I'm bullish on. the gap between the positive news and the negative crypto prices. Yeah, it's a good buying opportunity.

Good buying opportunity. Yep. Yep. What do you both run, Ryan? I got to say the ETFs, the futures ETFs. I mean, I been in crypto for a while, you know, Bitcoin first and then Ether. And I remember Ether in the early days. I mean, just this new weird Internet money, crypto asset that was programmable.

and to see it seven years later, now it's an ETF form. ETF form is not just about the liquidity. To me, it's about kind of the legitimacy. This is like been adopted by financial markets, right? It has no banking, has no centralized company, it has no 10Ks, no SEC statements, doesn't register it anywhere, and it's worth $200 billion and you can get it in your Schwab account. And that took seven years, but that's relatively short.

compared to like where we've come from. I mean, it's a weird internet money. It's like a digital asset. And we've gotten this far in such a short period of time. And so when I look back on that, I'm pretty blown away at our progress, actually. And so that's what I'm bullish on. This increasing legitimacy of this asset class. And now we've leaked into Wall Street.

We've got got them in. This is kind of a Trojan horse. And it's pretty cool when you look back. how much we've accomplished over this time. Yeah, now they're on our side. That's right. That's right. David, we got a really good meme of the week, okay?

This is going to take some time. Okay, what are we looking at here? We're looking at one of the classic Dungeons and Dragons alignment charts. The chaotic neutral, chaotic good, lawful neutral, except chaotic and all that stuff is replaced by bald or receding or hairy. Yeah, it's a hair joke. We got bald good in the top left corner with Brian Armstrong. Of course, he's super bald.

And he's also good. We got bald neutral Jeremy Aller, the creator of USC. Is he good? Is he bad? Is he playing regulatory arbitrage? He's a stable coin maxi, that's for sure. So he gets bald neutral. And then there's bald evil coming in hot with Gary Gensler, of course.

Going into, I guess I'm explaining these one by one. I think it's keep going. I can't stop here. We got receding good, Vitalik at Buterin, with a very high hairline and clearly good. We got receding neutral with Hayden Adams. This is controversial. Is Hayden Madem neutral? He definitely got pushed out of receding good by Vitalik.

I'll say that. I would put Hayden Adams in receding good, but that place is taken by Vitalik. You could have been there too, right? I could have been there too. I know. What, Metallic, I mean. He's the best. No way.

We got receding evil with Suzu. Yeah, yeah, yeah. We got Harry Good with Jesse Powell from Cracken. Harry neutral. Yeah, very well praised. Harry neutral, which is got Jack Dorsey of Twitter. My God, that is a hard picture of Jack. That is a Gandalf beard that we are looking at.

Gandalf Dorsey right there. And then we just got Harry Evil with Sam. No way. That's a real picture. That is a real picture. He's tromping on a cucumber, bro. That is a real picture. A full cucumber?

That is a cucumber. It's not a jumbo pickle or anything. He's just going straight for the cucumber. Well, he's vegan. So, yeah. So Sam Binkman Free just sucking on a cucumber. Hairy. Wow.

I will say, out of the hairiest, Sam Binkman Free, just absolutely wild, wiry hair. Jack Dorsey, just like wild, wiry beard. Jesse Powell, flow. Just flow, locks. Just elegant, blonde locks. You got to love it. It's the best hair in crypto.

Yeah, that's right. That's right. Thank you, sponsor, Cracken. Oh, that's what this was all for, huh? Teeing up for that. All right, disclosures for you guys. David and I mentioned optimism, I believe, in the show today. David and I are both investors and advisors to optimism.

And, of course, you know, David and I hold ETH. I'm sure we talked about ETH a little bit with those ETS coming this week. Got to let you know, we are long-term investors. We're not journalists. We don't do paid content. There's always a link to the bankless disclosures in the show notes at bankless.com slash disclosures. I need to end with this. You know crypto is risky.

You could lose what you put in. It could recede your hair line. Make you go bald. But we are headed west. This is the frontier. It's not for everyone. But we're glad you're with us on the bankless journey. Thanks a lot.