Bankless - ROLLUP: The Bull Market Test | Clarity Dies | SEC Opens the Door | Hyperliquid Comes Onshore

Episode Date: September 18, 2026

Crypto just shrugged off a Fed hike and the death of the Clarity Act. Ryan and David break down the early-bull signal, the SEC’s tokenized-stock breakthrough, the coming options race, and Hyperliquid’s path into the U.S. --- 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24 https://bankless.cc/spotify-premium --- BANKLESS SPONSOR TOOLS: 🔓 NEAR | TRADE CONFIDENTIALLY, GET 20% BACK https://bankless.cc/near2026 🎯 THE DEFI REPORT | ONCHAIN INSIGHTS https://thedefireport.io/bankless 👑 BANKLESS CONTENT MCP https://www.bankless.com/premium --- TIMESTAMPS & RESOURCES 0:00 Intro 0:26 Bull Market Signals: BTC, Zcash & Altcoins https://x.com/econoar/status/2099874713539604734 https://x.com/TrustlessState/status/2100286172253815281 https://x.com/AviFelman/status/2100288435474825301 https://x.com/NEARProtocol/status/2099968050405495246 https://x.com/NEARProtocol/status/2099883498848784778 8:39 Macro: Tom Lee, Bonds & the Fed Hike https://x.com/StockMKTNewz/status/2100267546683543913 https://x.com/geiger_capital/status/2099503989364609340 https://x.com/CNBC/status/2100284014221295770 https://www.bloomberg.com/news/videos/2026-09-16/fed-chairman-warsh-calls-rate-hike-a-sober-decision-video https://www.cnbc.com/2026/09/16/trump-fed-interest-rate-warsh.html 23:43 Clarity Act Falls Apart https://x.com/CoinDesk/status/2099429197034766830 https://x.com/tradfi/status/2099319531168731528 https://x.com/Polymarket/status/2099529644596731950 https://x.com/EleanorTerrett/status/2100389230874689650 26:27 Regulators Fill the Gap: SEC & Tokenized Stocks https://x.com/chairmanselig/status/2100232064259735589 https://x.com/SECPaulSAtkins/status/2100256253645668860 https://x.com/hosseeb/status/2100274788170162522 https://x.com/SECPaulSAtkins/status/2100572313334821271 https://x.com/Bankless/status/2100582318335275190 https://x.com/NateGeraci/status/2100581006004691453 42:31 The Crypto Options Race https://thedefireport.io/research/the-watch-list-derive-drv https://www.bankless.com/podcast/crypto-is-ready-for-onchain-options-nick-forster-ceo-of-derive https://x.com/TrustlessState/status/2100297485147406766 45:46 Hyperliquid Comes Onshore https://x.com/Payward/status/2100178016617869710 https://www.payward.com/press-release/payward-hyperliquid-onchain-perpetual-futures 48:38 Arc Chain Launches https://x.com/arc/status/2100170550857404852 50:50 OpenZeppelin Joins S&P Global https://x.com/OpenZeppelin/status/2100557026438848568 --- Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures

Bankless Nation, it is the third week of September. It is bullish. Once again, Clarity died, but all the crypto prices are higher. Just 21 hours later, after Clarity dies, the SEC ships the innovation exemption, a legal lane for tokenized stocks effective immediately. So crypto lost, but we're winning. We still are winning. The tokens are up.

We're getting what we wanted. It is a bullish season in crypto. It was actually double bearish news last week for crypto, and yet prices are up-ish. The Fed also hiked. This is the first time since 2022. Fed, Chair Warsh, moved the rates up. My question coming to this week was, how mad was Trump about this? We'll talk about that.

Also, David, you think options might be the next big thing in defy? I want you to tell us why. Potentially, yes. And then Cracken is bringing hyper-liquid to America. via a compliant front end for hyperliquid onshore. Basically, hyperliquid with a CFTC license in front of it. Is this how perps make it onshore in the United States? That and so much more to talk about.

But I think, Ryan, I think the way to summarize the last week in crypto is just very strong confirmation of a bull market. And the reason why is that good news is making prices go up and bad news is not mattering. And then we saw this, and the two things we talked about, we had the rate hike, we had the clarity failing. Prices are either flat or higher than both of those events prior. And so this is just a telltale sign of the bull market is that we are, the market is sensitive to good news and it is insensitive to bad news. And I think that that is just even further confirmation that we

are in the earliest innings of a bull market. Well, Eric Connor, crypto investor agrees with you, David, this was his tweet. Kind of nice to flush the double bad news of no clarity and rate hike in the same day, to be honest. Yeah, I think I see that, especially clarity. Although one might argue to push on that a little bit, both were kind of priced in.

I mean, who in crypto actually thought clarity would pass? And then as to rate hikes, I mean, there was good, there was, the market was expecting rate hikes to actually increase. And so maybe no surprise there's, not like QQQ or SMP took a nose dive on the back of this news. There is a price band that TDR, Michael Nato, is watching for confirmation of the early bull market.

And he's got two numbers here. Basically, if we stay trading in these two numbers, he feels like we are pretty close to confirming the crypto bull market. And this is Bitcoin price numbers. So the number, you don't like this, David, 69.9K. All right. Nice. So if we stay from 69.9K to 80.4K, we stay in that band, we should be good to go.

Both those numbers represent moving averages. So 69.9K, that's the 200-day moving average. And the 80K number, that's the 50 week. We stay in that band. We're still undecided. It's not breaking bearish. if we go up higher and we start breaking the 50 week in a decisive direction, and we sustain that over multiple weeks,

he thinks from a price momentum perspective, that's kind of early bull market confirmed. So we're in this middle period of like, we don't know yet. Oh, interesting. Okay, so he is saying that so long as we don't go down, we are allowed to be bullish. and then he's waiting and patiently waiting for us to break through $80.4,000 on Bitcoin to confirm a bull market.

But he's saying that if we hold, it's still bullish? He's saying if we hold and we don't break down, then the probability points that the low was in on June 30th of this year and we're not going to lower lows. I see. I did invite Ben Cowen on the podcast for when he gets back from New Zealand because I want to ask him this exact same question. It's like we bounced off the 200 week.

Bitcoin bounced off the 200 week. It does that all the time in bare markets. Sometimes it does it twice. And if it does it a second time, that means we are going down to, you know, the high 60s, I believe, 65, 66,000, which I think at least the participants on crypto Twitter are not positioned for that move.

One thing you observed to me is that blue chips on the week, there were somewhat flats. They're not down on this double dose of bad news. But actually, we've had some non-blue chip coins massively outperform lately, particularly on the week. So Zcash all-time highs, am I correct in that? Yeah, Zcash all-time highs broke $1,500. And it was just $1,200 last week. So the momentum behind Zcash is just absolutely astounding.

And what is absolutely, there's like no reason why? Was there something about the clarity vote that was bullish Zcash? No clarity vote. We're going to buy Zcash. There's two different takes. My initial first reaction was that this is Zcash moving higher on no news whatsoever. It's just momentum. Like Zcash earned momentum because it's an insurance on Bitcoin, like the fundamental reasons why you would buy Zcash.

You know, it's an insurance on privacy on Bitcoin. Like Naval likes it. Like all this kind of stuff. then there's another take, which is that actually the crypto market participants are doing the normal thing of like the Fed hike was actually bullish. It's actually good for crypto. And Zcash is the way that the crypto market is expressing that trade because it's a faster horse than Bitcoin. So one, if you are particularly bullish on Zcash, you would say that Zcatch is actually stealing Bitcoin's thunder. This is a bit abnormal behavior because Bitcoin's supposed to go first and then all coins follow.

in most early bull phases. And the fact that Zcash outperform during the bear market and continues to outperform is somewhat abnormal from previous cycles that we've seen. It's not the only one, right? I think Hyperliquid you mentioned hit all-time highs. NIR is at $3? I'm not sure if that's an all-time high yet.

That's doing well too. Neer has been around for forever, so they have the 2021 god candles that they have to recover, which was like at $30. 20-1, those times. Those times of rational bull market behavior in crypto, right? Yeah, but as far as New Year goes, like $3 is the highest it's seen in quite a while. And it's had like a lot of momentum.

I think like last week or two weeks ago, it was at $2. And so you probably remember me six months ago, 12 months ago. I was just talking about like the middle of the market is drying out. We have meme coins and the blue chip barbells. Blue chips are doing well. Meme coins are doing well. But the middle of the market, which is people. jobs, that's the startups, that's people doing BD efforts, that has just been drying up.

It seems to be that we are having a middle of the market recovery in this era of crypto. Not globally, like not every middle of the market token, but the tokens that have deserved to do well are living under their own weight, are growing, are doing well. So it is really nice and optimistic to see the middle of the market recover. Neer specifically is just seeing adoption of their confidential intense products. So $30 billion crossed by NIR in their confidential intents, which is I kind of put it shoulder to shoulder with Zcash in the privacy angle of things. Like this is $30 billion of confidential private cross-chain transactions facilitated by NIR. And they also have $70 million in NIRTBL.

So these are the numbers that like NIR has pushed recently that are doing well, that show adoption. And it's also along in like the whole privacy trade, privacy tailwinds. Yeah, the pivot to privacy and the pivot to perps has been a major theme during this bear market. And I guess it's worth maybe doubling down on the winners for the bull market. At least that's what investors seem to think on this week. Speaking of doubling down, not one to ever not double down is Tom Lee. And he had some predictions for trad markets for the S&S.

S&P 500 plus year what he has to say. Yeah, I think post-mid terms, because this year has been very challenging, and I know it's not been fun for a lot of viewers, I think the fourth quarter could be one of the biggest rallies. And I think it continues to next year to one of the biggest rallies of our lifetime. What's a real number do you think that we're at 75, 85, 85 on the S&P as we have this conversation? There's not that much of the year left. Yeah. What seems reasonable to you between now and then? I think we could easily be above 8200 by the end of the year.

And that's because tech is going to be doing a lot of heavy lifting. The Mag 7, as you mentioned earlier today, are starting to come back to life. And the software names, which have been important names to be held, are doing better. So as long as the AI trade isn't extinguished to which we don't expect, I think it's going to come out of this correction. We've got a big rally into your end. So if anyone else, David, had said, the biggest rallies of our lifetime, in a quote,

I wouldn't feel great about it. I'd feel like, but like, it's just the way he says it. Tom Lee has this like calm demeanor. And when he says bullish stuff, I'm just like, oh, yeah, I could see that, Tom. Sounds like that could happen. It's something about the tone of his voice. Maybe he's not like emotionally invested. My parasympathetic nervous system just loves Tom Lee.

It's like, Tom Lee is just like reaching around my portfolio and just giving it the most comforting hug. I was like, hey, man, that's a great seat here. 8,200 by the end of the year. Well, thanks for the hug, Tom. Maybe Tom could go hug the bond market, okay? Because yields are going up, whereas Besson, of course, he's been a war on bonds. He wants yields to go down. This is the tweet, the U.S. 10-year treasury yield breaks 5%.

First time it's done that in a while. I mean, not in forever, to be fair, but in a while. And it keeps ratcheting up. My life times. No, no, not the 10 year. The 10 year was like just a few years. Look, here's a chart of the 10 year. Uh, well.

2008. 2007. Okay. Yeah. It's been a while. I was playing Vruinscape back then. I was not playing attention to broad markets. This is really the 10 year.

Okay. And the 30 year as well, a little down on the week. 5.4%. Yeah. It touched 5.40. It's been trending up in a very dampening up in a very dainting. way. So, you know, the scoreboard, I guess this week is, I don't know if Bessent won or Bons won, but it feels like bonds are continuing to win, whereas Bessent is, you know, he did $6 billion last

week in buying the long end there and not really quelling bond market yields at all. Yeah, I think for a moment, people were like, oh, Scott Besson, he's the house. He's going to come, he said he was the house. And then people realize, oh, this Kai is tiny is a tiny man going up against the gargantuan barn market he's not the house I don't know he's kind of the house he does he is kind of the house he could be the house if he wanted to be the house no you not if he's like trickling in four billion dollars he needs to like a hundred X that to actually have durable impacts on the bar market David you never know he could do it okay all right if we could do it then the debasement trade my god Bitcoin will be

two million dollars He's threatening to do it. I think there's a question that I've had every week of this bond market war is, is this more debasement? Or is this more just a hot economy and cost of capital going up because of investment in infrastructure and AI data centers and all of these things? And I'm not sure I'm fully resolved on that. Of course, the debasement narrative has been pretty hot the past four to five weeks. And they've seen, obviously, crypto had that repricing event.

Gold was up a bit. and people are like, oh, it's debasement once again. But I'm not sure that's the real reason for the yield rising. I think the real reason might just be back to the 1980s. We are in a hot economy. GDP is humming, at least from a nominal perspective. Yes, inflation is still high. We'll talk more about that in a second.

But the economy's doing pretty well, at least in the U.S. as well. and I don't think people are used to that type of investing environment, right? Because they haven't seen it in their investing career very often and certainly not within the last 15 years. I'm trying to get a grasp on, is it all of the economy? Is it like all of America is doing well? Or is it just like the capitalist side? Like investment is doing well. If you're an investor, you are trying to get your hands on capital to invest it.

maybe that's trickling down to Main Street, but is, like, globally all U.S. citizens doing well? Because inflation is also still hot. And so we have a hot economy and hot inflation and a hot bond market. All of these things, I don't know how to interpret all three of these things, like, coming together. This is why, by the way, David,

I think you should have Michael Howell on the podcast and the main feed because he has takes on all of these things. And largely, he does think that what he calls Treasury QE, the regime we're entering, is going to be more bullish for Main Street than it will be for Wall Street asset prices. Okay, so he sees a real shift towards the real economy and Main Street with the shift from Fed QE to Treasury QE. And I think you should get him to explain why to the bankless audience.

He's got lots of reasons for it and interesting takes. I'm not used to the Main Street winning. Like usually always Main Street gets like the short. end of the stick. It's like, it can good things happen because of downstream of the stock market? Yeah. That is still a question in, uh, in this era. So it's an unresolved question. Um, the Fed funds rate also went up. This is for the first time since 2023. So Warsh, we thought, David, we were speculating that the new Fed share Trump appointed would be, I think in your words, Cuddy McCutface. Well, he is not Cuddy McCutface, okay? He, he, he, he, he, he,

was cutting McCutface while he was presenting to Donald Trump. He was presenting as cutting McCut face. Oh, wait, wait, wait. Did he trick Trump? Was this a bait and switch? Yeah. Well, the thought is that he did not want to explicitly bait and switch Trump. So he did the thing by removing forward guidance and not having all the Fed governors fall in line so that there could be a diffuse set of people who think that we should cut, think we should hold.

So he's passed on the buck. So it's like, don't look at me. I'm just one of the Fed governors also were a democratic institution. It's a decentralizing of the Fed while Donald Trump comes in and demands cut him a cut face. You know what's hilarious is. Trump might be buying that, actually. The narrative that you just spun up, he might be buying it. So I should say the target rate is now 3.75% to 4%.

And it was a open FOMC committee vote, of course. That's who decides these things. to zero. It wasn't even one dissenter in order to raise rates. So 12 to zero. And yeah, I was kind of expecting Trump to just be like, I was tricked. It's the new pal, Warsh, like, you know, bring those rates down. What are you doing? But Trump kind of covered for him. He was like, yeah, the vote does even matter. It's a 12 person, you know, vote. So Warsh may as well have voted. He does think, though. He said this on truth social, I believe. What's the quote?

You might as well vote with the board because it's not going to matter. The board is very hostile. He's talking about the FOMC board. But he did say interest rates in the U.S. should be 1% or less because we are the best credit in the world by far. So I guess he still thinks that, but he seemed fine with Worf raising rates. Should he screen him out? Is this just noise from Trump? I don't know.

there was a prediction market about whether Trump would call Kevin Warsh a name, like a bad name. And like, you just use that, you know, on truth social, Trump throws Kevin Warsh under the bus like he did with Fed Chair Drumpell. He did not. He did not call Kevin Warsh a bad name. Wow. What explains this? I have no idea. I have no idea.

I wonder if Trump can actually rationalize why it no longer matters if Warsh is making the decision. This is Warsh. Maybe he, because like, Warsh and Trump and Scott Besson are taking meetings. Yeah. They, they are talking to each other seemingly collaboratively. And so maybe Warsh isn't like bending the knee, but it seems to be that they're up to something. So you think maybe there's a bit of coordination behind the scenes where Besson's like, yeah, you know, Warsh has got to do this, Trump, we got it covered, we're all kind of synchronized. Whereas Powell was a bit more independent.

Because, yeah. That's one interpretation of things that they're all kind of coordinating. That's why Trump is fine with it. Another interpretation is just if you just kind of read the letter of what's happening, oh, no, this is Saseeb's take. This proves Fed independence. They're not just going to do whatever the president says. This proves that the Fed and FOMC works because it's not going to bend to the politics of the day.

It's going to optimize for its own goals. So you could interpret it that way too. Yeah. Yeah. If we're going back to the conversation of like, is this a hot economy or is this a debasement trade? You have to take the bit of evidence out that this is a corrupt Fed out of the debasement trade. The Fed is legitimate. It's not bending to the fiscal policy of Congress and what the president wants. It is remaining sovereign. And that it should be good for the soundness of the dollar. And so if you take that variable out of the wire bonds going up, you would, it would. would actually point further to it's a hot economy. Well, it does lend evidence to the fact that the Fed is serious about fighting inflation, because this is totally the reason Warsh said he was doing it. He said that this was a sober decision, a serious decision, a responsible decision, and that the plain fact is that inflation is too high and has been for too long.

So this is the U.S. fighting inflation. Now, what do you think? is this good or bad for crypto? I think in previous eras, whenever, like, the kind of the generic investor take is if Fed funds rate is going up, that bleeds risk on capital out of markets,

and so risk on assets go down, and yeah, crypto is somewhat of the debasement trade partially, but it's also a risk on asset class as well. And so risk on goes down. If Fed fund rate, is going up. Do you think that simple explanation is valid moving forward? I mean, if we go back to the fundamental, like, simple bulkcase for Bitcoin,

it's that we print more money than we take in as revenue. So, like, there's always debasement, there's always inflation. And if you cut yields to zero, then people move just down the risk spectrum because there's more capital out there. But if you raise rates, then the government can't pay its debts. And so there's going to be disbasement. So like Bitcoin wins either way. And so if you ask the question, it's like, okay, we raise rates.

Is this bullish or bearers for Bitcoin? To your point, it makes risk capital harder to access. But the government's debt comes due faster. I don't really know. I'm not sure I care. All I know is that we raise rates and crypto prices went up. And so I've been saying this on Twitter, I'll say it here again. Good news is good and bad news doesn't matter.

That's just the phase of the market. we're in. Well, we are in the heads I win, tails you lose regime, I guess. David, speaking of losing, we got to talk about the Clarity Act next. So it failed, but before it failed, it seemed like some good news. What happened there? And I know you've had some conversations with representatives at the SEC about, what is it? Did they drop some? Innovation exemption that was dropped this morning. The innovation exemption. So I'm wondering, does Paul Atkins love crypto more than Gary Gensler hated it? What's he going to give us? What are the goodies? We'll talk about all that and more.

But before we do, we want to thank the sponsors that made this episode possible. I've been trading crypto for almost a decade. And I've used so many different wallets, exchanges, aggregators, or front ends. And I'm basically always looking for the same thing, just one interface with a deep liquidity across a bunch of chains and assets, where I can access markets like perps, earn yield, trade confidentially, and still control all of my funds. And I've never really found it. And I'm just always switching wallets, juggling, gas fees, or getting eaten by slippage. But neir.com feels fundamentally different to me.

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uses post-quantum signatures, and that's run over five years on mainnet with zero downtime. Neer.com is the best way to be on chain and be in control. Get 20% of your trading fees back on neer.com using the bankless link and the show notes, not investment advice. Bankless Nation, we've built something for you. Introducing the bankless MCP. Chat Chibi T and Claude are great at a lot of things, but ask them anything beyond the basics of crypto about protocol mechanics, tokenomics, or just what happened last week in crypto, and the gaps will start to show. The problem is context.

Bankless, on the other hand, has spent almost a decade building one of the deepest archives of crypto data anywhere. More than 2,000 podcast transcripts, 10,000 articles, and countless conversations with the people actually building this industry. And now we've structured all of that data into the bankless MCP. So you can go and connect it to your cloud or chatDBT, and suddenly your AI can answer your crypto queries with the entire bankless archive behind it. And every new bankless article or episode gets added automatically so the context keeps staying up to date. The bankless MCP is exclusively available to bankless premium subscribers. So you can go to bankless.com, upgrade to premium. and connect the MCP in just a few minutes,

and all of a sudden, your crypto queries to your AI, LLM, whatever you use, will get a thousand times better. So go check it out. There is a link in the show notes, and once you become a bankless premium member, you can hop into the bankless Discord and let me know how you like it. Cheers. So early this week, it was announced that Trump actually agreed

to the updated Clarity Act ethics provision, which was considered to be the final obstacle to getting the Clarity Act passed. This was a surprise. Everyone on Twitter got really excited. odds of the Clarity Act passing on Polly Market doubled and Bitcoin jumped from 77 to 79, ETH jumped from 2,400 to 2,500. Things were looking pretty good.

We were thinking about getting a surprise clarity act. Then the Senate procedural vote came on Tuesday, and it seemed that the compromises from Trump and the Republicans were just not enough. All Democrats voted no to the procedural vote. The final tally fell 11 votes short of the supermajority needed to proceed. Okay, so why did all the Democrats vote know if Trump relented on the ethics thing?

I thought that's what they said they needed. Give us ethics provisions and we'll vote yes. I think that the Democrats feel like they're in a very strong position to win the midterms, and so they don't need to compromise. And the Clarity Act passing is a Republican win no matter what. Like it's not a bipartisan win. It is a partisan win for the Republicans. And so, like, why the Democrats with or without, why give them a win at all is not their bill, is not their constituents, they don't care.

And they're just going to wait this one out until they control the House. And so they're just not motivated. There's no carrot for them to vote. Also, I think a lot of the provisions here and the specifics of the ethics provisions was Trump agreeing to things on a go-forward basis. So the deal didn't really touch the $1.4 billion. of all of the Trump family crypto dealings in the past. You mean like trying to claw back money from the hands of the Trump family? Right.

So from a cynics perspective, right? If you're just like optimizing for Trump, then you can be like, oh, we've already got the things we wanted out of crypto. So we're fine with signing something that talks about ethics for moving forward. But like, there's no way you're touching what we already have. And so they weren't really losing anything either. were they? Yeah, yeah, that's fair. I will say that, like, I do think Donald Trump does have a very large role in why the Clarity Act did not pass by just not agreeing to the ethics provision and

doing all the grifting in the first place. Like, imagine a world where he didn't do any of that. None of it. Totally. Do you think it would have passed? I think a lot of crypto-twaters blaming the Democrats for voting no. And I think we should also be blaming Donald Trump for just making this such a big issue in the first place. Like, Donald Trump is the biggest reason why Act did not pass. That is a true statement. And yet, David, and yet his administration with Paul Atkins and Mike Selig continues to deliver on promises for crypto, not in a legislative way because they can't because they are regulators, but in a way that also matters with some of these proposed rules.

So this is Mike Selegg on the back of this. He is the chairman of the CFTC. And of course, he had this tweet, I'm sure, Prime to Go. Prime to Clear. He said, the outcome of yesterday's Senate vote was unfortunate. Americans deserve regulatory clarity, legal certainty, and consumer protections in crypto asset markets. And he continues to say the U.S. is and will remain the crypto capital of the world. Paul Atkins made similar statements when it was announced that clarity was not going to pass.

He said, I have been unequivocal with or without legislation. We will act decisively within the SEC's statutory authority to deliver certifications. for American investors shaping the future. And then he ends the tweet with stay tuned in bold. And so the crypto industry did stay tuned. First, I think Haseeb put out a tweet that I did, I think did a very good job talking about, okay, we're not getting clarity.

What can we get? What can we get from the SEC and the CFTC? He says nothing stops them from doing rulemaking now. Rules aren't as durable as a law, true. but the best defense against a hostile future administration isn't a law or regulation, it's adoption. Do you see wrote that or AI wrote that? This is what protected Uber and Airbnb fantastic examples.

Adoption is now the mandate for the industry. And so he lets out what agencies can do. Exemptive relief. So like carving out exceptions for things. No action letters like telling companies, hey, we're not going to come after you if you go do this thing. registration pathways, project crypto, and rulemaking. Those are like the big things.

So when Paul Atkins at the SEC says, stay tuned in bold at the end of his tweets. He means those things. What are we staying sued for? Yes. So this morning, the day of recording, September the 17th, this morning, the SEC releases the innovation exemption. This is an exemption for allowing tokenized stocks to trade on AMMs and other decks on public permissionless blockchains.

Wow. This is unique and not the same as Robin Hood tokenized stocks, you know, Crackin X stocks are backed or onto. Those are tokenized stocks in like kind of backdory ways, these like tokenized debt securities, things that have one-to-one economic representation of the stock. What the SEC is talking about is things that are truly one-to-one tokenized stocks that have KYC and white list.

and they are giving an exemption to dexes, things like Uniswap, things like Aerodrome, so that those dexes, those trading facilities, those exchanges, are not considered exchanges as broker dealers. So these are not dealers. Uniswap is not a dealer. Aerodrome is not a dealer because that's what this exemption says. They're a TSV. They are a trading venue.

They are trading venue. What's the TSW? stand for again? No clue. The SEC added a bunch of acronyms onto our acronyms. The TSV, I think, is like a Dex. Okay. Okay, it's like a Dex.

And so some of the, I guess, would these be brokers that might be first users of the exemption could be a securitize or a Coinbase or a Denari or Robin Hood or an Ando or all the tokenized stock providers that we've talked about in the past, right? Those could be users of this exemption. Is that right? That is correct. That is correct. Now, if you go and look at the securitize asset price on the public stock market,

because they went public a few months ago, securitizes up like 30% today on this news because Securitize specifically is best enabled by this because they are trying to do the one-to-one actual tokenization of a real equity as opposed to just economic rights. And so this is like this is onshore and offshore. And so all of the tokenized stocks that we're talking about being paired with mean, coins on Robin Hood chain or the tokenized stocks from Ando that have been online for forever. Those are offshore.

Those are offshore instruments. Those are not impacted, not relevant to this exemption. Those will still run. Those will still exist. With this exemption, we have the first foot in the door to onshore versions of these things that are KYC'd, whitelisted, governance rights, economic rights, all that stuff. And that the exemption allows them to trade on things like unoswap and aerodrome. and other exchange facilities on public permissionless blockchains.

Now, you told me that was actually, you found that out because that was your first question to the SEC after you got a call from what, Washington, D.C? Did you call from the SEC, David, but in a good way? Yeah, in a good way. We got a call from the SEC yesterday saying, hey, we're hosting a little Q&A session for people like you to ask questions like this. And so I was asking, like, Laura Shinn asked, like, took my question and like drill down even further.

like, we're still cool with the offshore tokenized stocks. And I was like, does this pertain to the existing tokenized stock things that we already have? And they're like, no, no, no. So those are offshore and United States investors are not allowed to access those. We pretend they don't exist, right? It's like tether or something. This is about getting all of that activity onshore in a compliant and regulated way. And that's great.

I think the K-OIC white listing burden is going to be. just a non-negotiable to the market. The market doesn't want a white-listed tokenized stock. It wouldn't say permissionless, tokenized economic rights. No one cares about voting. You kind of want both. But there's no way a company wants a permissionless, like, okay, there's no way an actual company with shareholders

wants token holder, shareholder votes in the hand of some hacker from North Korea. Right? That's probably true. Yeah. So that's why these more legitimate, tokenized like shares with all of the

shareholder rights including governance votes that's why the SEC is going to bless those and the others will be available for offshore non-U.S. participants.

There's also some language in here in innovation exemption, which by the way, innovation exemption. It sounds a lot like Hester Persis 's innovation sandbox idea that she's been talking about

for like seven years. This is Hester-Perses efforts coming to fruition. Thank you, Hester. People don't remember enough and thank her enough. Permission also, I guess for the TSV, to receive this exemption, the

AMM has to be on a permissionless public blockchain. I think there's some language in the actual provision about this, in the actual token exemption. Smart contracts, here's some language. Smart contracts must be

auditable, public, and deployed on a public permissionless distributed ledger, which kind of implies a walled garden chain where there's not a distributed validator base would fail that test. And so wouldn't be eligible, the AMM on that chain would not be eligible for this type of exemption. Was that covered in your call? That is a really good question. That was not asked or covered. The definition around what is a public permission that this ledger was not specifically hashed out. Because we haven't hashed it out in crypto, have we? Like, we know Bitcoin is permissionless.

We know Ethereum is permissionless. We kind of think Solana is, right? Yeah. Uh-huh. What about Kantan network? What about single sequencer L2s? What about base? What about Robin Hood chain?

Who decides that? Some more gray area to work through, right? Yeah. Uncertain these questions will need to be hashed out as this comes online. There was also something I found, I guess, somewhat sandboxy, but also still somewhat annoying or a little bit of cold water splashed on this, is there's going to be caps too. So for a given asset, there can't be more than 0.25% of daily volume.

Right. Or else it kind of breaks the exemption here. So the way that that works is that if there is a thousand shares traded on a day in the normal public equity stock market, then in this version worth the exemption on chain, only 25 shares can trade as a volume cap per day. Yikes. I mean, that makes it like, so you can't have size.

You can't have large institutions. It really limits this to kind of a small retail type environment. So truly is a sandbox. And this is not going to be massive volume. Like, I mean, even compared to perps, you can't really get massive volume if you're only 0.25% of trading volume. daily. Yeah.

Yeah, this is, it's this, like, I think the offshore permissionless ones are going to work and this is like, I'm sorry,

I don't want this. I don't want to KYC. I want to be able to go straight to uniswap, and I don't want to be capped on the volume. And like, size is not size here.

Yeah. So are you somewhat worried that, yes, they've legitimized this approach, but this has got too many rules and handcuffs to make it actually practical versus tradify?

It's the expected approach. Like the SEC is never going to do away with KYC for tokenized equities. It's just like they're competing with some of the fundamental properties of what makes a blockchain a blockchain. Permissionlessness, you know, global access, you know, instant settlement.

And the current versions of the offshore tokenized stocks have all of those things. And the KYC onshore compliant ones are strictly an inferior. your product. Maybe I say that as like a retail participant and somebody at BlackRock can come and tell me like why I'm dumb and wrong. But like I know me and all my friends what our answer is to which product we prefer. Nick Drossi has a take that might signify this is just a sign of things to come. He said this. I think there are a number of politicians who are going to wish they

pass Clarity Act by the time regulators are done pushing crypto for it. So what he's saying is basically all the people that voted no because they don't want tokenization or don't want crypto infused into the traditional finance system, well, it would have been much more conservative for them to pass the Clarity Act because regulators are just full steam ahead now on everything. It's almost like Atkins and Seleague just got out their capes and they're like, we'll save the day, we'll do clarity, and we'll do even more than clarity. We'll go above and beyond is what Gerasi is saying here. We have an early rumor. This didn't get any sort of official press released by the CFTC, not one that I found yet. But,

But Justin is from Watcher Guru, CFTC permits developers to build passive derivative software without registering as brokers, including for crypto markets. And so the CFTC also has their thing ready to go. Same with the SEC. And there's also this roundtable for 24-hour trading that's happening as well from the SEC. Yeah, that's happening today. There's a discussion with industry participants from the crypto side, but also from the Tradify side. simply to discuss what 24-7-365 trading looks like in market structure. And so things are moving.

Balls are moving. This also might be a type of answer to the concern that the AMC CEO had last week with the fact that AMC stock was tokenized in some form on Robin Hood chain. He clarified his concern, by the way. He said his biggest concern was that Robin Hood stocks lack the voting rights that token holders had. So that was the thing. He really wants his token holders to have voting rights. He's very disappointed that the people buying AMC shares in Robin Hoodching

aren't aren't able to vote in AMC governance. That's what he's concerned about. That's what it came down to once pressed. All right. Remember he had all of these paragraphs of tweets about how much he handed it? Lots of words. How violent, disgusting it was. And it came down.

So right before hopping on to record with you, I was talking to Johan, Johan from Robin Hood. Yeah. I brought this up. I brought this like the AMCA CEO called you guys like vile and contemptible. What do you think about that? Well, he thinks an asset without any voting rights is just disgusting.

It's just like vile. It's just like should not be allowed to exist. Anyway, it's interesting because the SEC exemption also says the same thing. All of the SEC exempted tokens would also include shareholder voting rights. So he gets it that way. Also, Vlad said that he would do that too, right? Yeah, so he's just making, so Vlad said Robin Hood token I stocks, the offshore ones,

will also have in-kind redemption and voting for Robin Hood Stock tokens. Okay. And so, like, we're basically approaching feature parity with real equities, except for the KYC, which, like, cry me a river. I don't want that. Like, it's a feature to not have KYC. Well, I guess that's resolved then. I don't know what the AMC CEO was so worried about.

It almost feels like a big attention hijacking game. You think this was like an underground thing to like, you know, put some more light on Robin Hood tokens. It was like a PR campaign to have the AMCCC. I don't think so. I don't think so. It's just so weird. We are in the very early stages of something that may never manifest, but something that could manifest is like all of these tokenized stocks coming on chain. and then DGEN is doing weird things with them

and then grabbing the attention of the relevant CEO in question. If crypto ever got big in a cycle once again, that would be a fantastic movie to watch, and I hope it plays out. What's coming up next? Coming up next, I'm going to give a take about why options might be the next meta in the crypto industry. A lot of attention is going on options these days.

It's actually a pretty competitive field. Hyperliquid is trying to build options. Lighter is trying to build options. Derive is already building options and already got options. And options are kind of like the last derivative that we haven't really produced on the crypto industry.

So we're going to talk about that. We're going to talk about hyperliquid coming to the United States. We're going to talk about growth in Venice and also the arc chain launch. But first, let's hear about some of these fantastic sponsors that make the show possible. Some exciting news. We are launching a new podcast

to help people figure out the crypto cycle, how to navigate it. The best crypto cycle investor I know, his name is Michael Nato. He runs the DeFi report. This is the guy that sent me a cell alert before the 10-10 price drop happened. His cycle analysis has been absolutely on point.

I've been following him for years. And this year, we started recording weekly podcast episodes. Each one we get into his portfolio, what he's holding, the market structure, entry targets, fair market value of Bitcoin and Ether, and where we are in the cycle, there's new episodes that are released every Wednesday. They're 30 minutes. They're short. They're punchy.

I think this crypto cycle is harder to navigate than most. So let's do it together. Go subscribe to this podcast. Search the Defi Report, wherever you get your podcast, YouTube, Apple, Spotify, or find a link in the show notes. There's a new episode waiting for you now. Okay, we've had perps and crypto for a while, decentralized perps, hyperliquid, lighter.

They have popularized that. Massive successful products. We've never had successful options in crypto. I mean, previously it's been like illegal, but there have been a lot of teams that have really tried to do this. Nothing has taken off. There has been a graveyard of startups

trying to build options in crypto. And so, you know, but maybe. This time is different. This time is different. And so I recorded with the Drive Team. That episode came out on Monday. And I asked him this question, like, why haven't options worked in crypto? The perpetual has worked so incredibly well.

We have other derivatives. We have other. Why not options? And like his answer, I thought it was actually pretty good. Like for the first time, you need a pretty diverse set of market participants with different directional opinions that all cross in a double coincidence of wants. But you need like a large, set of very diversified opinions.

And we don't really have that yet. We've really just had kind of concentrated retail and then crypto-native funds. The claim now from Nick is that we are finally in an era in crypto where we have a sufficiently large set of market participants. And then also, this was also probably the most interesting take of that episode that he gave me, was that 10-10 showed a lot of perp traders how much extra risk encumbrance a perpetual position has. that an option does not.

Okay. And so an option, you pick your asset, you prick your price point, you pick your date of expiry, and that's it. You don't get liquidated along the way. So with a perpetual, you can be directionally right,

but still get liquidated due to volatility. Right. Whereas an option, you can be directionally right and not get liquidated along the way because you can go deep, you know, deep out of the money, deep in the red,

but so long as you have time, left in your option contract, you can wade it out in a way that a perpetual can't. And so you also remove yourself from risk from the platform itself. Yeah. So like if your platform goes down or there's contagion or ADLing or whatever,

if you own an options contract, you don't have that worry. And so... That was like my big question going in. It's just like, why do we need options when we have perps, aren't perps better? But Nick's answer was that, they're different.

This almost reminds me of like, the gang learns about options, right? That's exactly what's going on. Oh, that's why options exist in TradFar. Oh, okay. So perps can't do everything. It's like a different product. Because Derive also has perps as well in a small way.

They also have perps as well. Yeah, they are, they are dominantly, they dominate on hype options. And so the most liquid hype options volume is on Derive. And so the derived token has done incredibly well this last week. It is up 150% in the last month and 50% in the last two weeks. And so I kind of think this is like a starting pistol for the options race. Lighter is definitely trying to get into the options world.

Hyperliquid has enabled options. So they are like, Derive is kind of like this, David versus Goliath versus Hyper Liquid. I don't know if lighter counts as a Goliath yet. But there are three players in the options world. And I think like the options meta could be like a theme for the rest of the year. It's like everyone is converging into on-chain Robin Hood. Even Robin Hood is converging into on-chain Robin Hood. That's right.

That's right. That's right. Uh-huh. Meanwhile, still on the hyper-liquid front, Crackin is bringing perps to the onshore U.S. market via a compliant KYC'd permissioned HIP3 marketplace. And so like onshore U.S. citizens and entities are going to be a, able to trade perps that basically route through that are hyperliquid but through Crackett as a front end wait a second that's pretty cool is this similar to the lighter and Robinhood

relationship or is it different yes uh different in the sense that that was not Robin hood core app that was Robin hood wallet and I think that's only available to people in the EU I could be wrong about that um but this is like the crack in exchange whereas lighter and Robin hood was on the Robin Hood Wallet app, which is everyone wants to be in the Robin Hood core. Wow. Okay. So that's a big deal. That's a big deal.

Onshore perps, hyperliquid, decentralized, coming to the U.S. Yep. That's right. The other cool bullet chart that I saw was this chart from Eric Borges talking about the rate of token consumption on Venice. It is a accelerating. Which tokens? Which tokens?

AI token consumption on Venice. And so. I was just like kind of loosely did some math on this chart. The chart is doubling every two months. So it was like six months ago, it was at 50 million tokens a day, or is that billion? 50 billion tokens a day. And we are now at 250 billion tokens a day.

So I think like the game is, can you model the growth of Venice token consumption to VVVV? Because it's like reductively one to one in terms of token consumption versus VVVV value capture. And so if this continues to accelerate up into the right, you would see like a repricing of VVV to account for like this accelerated growth. I'm really hoping for some superstar tokens to just like that have strong value accrual properties investor alignment to just dissolve the current narratives and token curse that all of these things are lemons. And they can't be owned. They're uninvestable. We have to make tokens investable. We have to make tokens

investable again. And what that requires is tokens like VVV, tokens like hype, tokens like lit, value cruel tokens to be successful. Derives even takes 25% of their fees to buy the token. That's the model. And we need to have some successes, huge successes there, not just one or two, more than a handful. You have like a dozen, two dozen kind of just successes there. Then you get the market back and you have the asset class back and that's what it's going to take to rebuild from the sins of our past. Speaking of rebuilding from the sins of our past, Arc chain has launched with about a hundred meme coin launch pads on day one.

Oh wait. Doesn't seem very rebuilding. That's a corpo L1 with a baby. Isn't it kind of a, isn't it oxymoronic to have Arc the USC basically Fed coin chain launched with like a hundred meme coin launch pads? You got to give the people what they want, David. How are you going to get product market fit? That's what we do here.

So I was kind of wondering, like, is Arc going to take the tempo path and like integrate into e-commerce website, optimize for payments, just like not compete in the Alt Layer 1 landscape? Or is, again, try and compete in the Alt Layer 1 landscape? And the answer is firmly it's trying to compete in the Alt Layer 1 landscape. And I don't think they should be competing there at all. That is not their arena. It's interesting because it seems like they're doing the Robin Hood play, but they don't have their Robin Hood distribution. Distribution, that's right.

The Robin Hood front-end user interface. At its core, USDC is a back-end asset and backend bank plumbing, and it doesn't have the front-end experience. So it seems a little follower-y, like fast-follary, to try to do this. The very diagram between USC as a product and ARC as a product overlap very little.

Like I get the all tech companies want to have like a second season, like a second act, but yeah. I don't get what ARC really adds to the mix. You could just say it's permissionless. This is what permissionless things do. That's you know, that hot bubbling

vapor is going to boil off. And once it boils off, then we'll have all of the infrastructure for agenic economic workflows and trading and liquidity and payments and settlement and tokenized assets, all of the things that ARC is advertising

that they want to do in the future. So it's just a short-term speculation thing that allows them to build the plumbing for later. Okay. It's hard to build a layer one. It's really hard to build a layer one. Yeah, yeah. Last bit of news before we close the things out,

SMP Global Acquires Open Zeppelin. Oakland, Opline, probably some of the best smart contract writers and auditors in crypto. They've been around

for forever. purchased, bought by S&P. Do we know how much? No. There's a number here. It's 37 trillion, but that is not the number

they were purchased for. That is 37 trillion in value transferred from Open Zeppelin. That's how you know we're at the end of the episode. A headline like this, though, seriously,

would have have blown my mind, I think, in original bankless thesis, decentralized finance, circa 2021. And if you gave me the headlines for, you know, September 17th, September 18th, 2026, and you said, bankless was reporting that SMP has acquired Open Zeppelin. I'd be like, wow, we have really made it. I'm glad ETH is at 10K. That's fantastic. I was about to ask you, does it feel like we made it?

You get, you know, like one or two of those, at least, we've kind of made it. And that feels very much like crypto in 2026, doesn't it? It feels like we kind of made it. We didn't like make it make it, but we kind of made it. We kind of made it. Yeah, we made it in a way that a little bit different than I think the... And we made it in a way that kind of hurts. And it took longer.

And took longer, yeah. But that doesn't mean we can't make it more. Yeah, yeah, yeah, yeah. I think that's a big question. I think for me as we close out September and move to Q4 is, what the fuck are the blue chips going to do? Where are the blue chips going?

I know where they're going. If it's the early bull market, we stay in that band, they're going up, David. Okay. All right. I'll see you in a week. Thank you, all right.

You guys know the deal. Crypto is risky, but not risky enough. The institutions have landed. It's where we are going even further west. This is the frontier. It's not for everyone, but we are glad you are with us on the bank's journey. Thanks a lot.