Bankless - ROLLUP: The SBF & FTX Aftermath | ETH Goes Ultra Sound | NEW Ethereum Roadmap | OpenSea Royalties

Starting point is 00:00:00 Some good news, too. We get into the macro markets, of course, inflation. A little bit than expected this month. Actually, a bit of a silver lining. Hey, it's only 7.9%. Only 7.9%. All right. Bagel's Nation, happy second Friday of November.

Starting point is 00:00:19 Maybe I should have said unhappy, David. I see you've got the WoJack meme. Yeah, sad boy. Bring your face. It's a pretty sad today. Yeah, it's not a good week. It's been a rough week in crypto. though, probably the worst I've seen in terms of sentiment, in terms of feeling.

Starting point is 00:00:36 Walking into this roll-up, I mean, how many live streams have we been doing over the last few days? One per day since Tuesday. So this will be number three, yeah. Well, this isn't a live stream, but still, same. You and I were up late last night with Kobe Lentgen. Oh, yeah. So forth. Yeah, this is number four.

Starting point is 00:00:56 Yeah. I mean, but there's just so much to cover. so much to talk about and the way this event has unfolded. For those of you not familiar, of course, we're talking about FTX, SBF, how SBF, San Bagman Fried wrecked this for everyone. I mean, he really screwed us over. And we're going to talk about how we feel about that. What's been happening since I guess yesterday.

Starting point is 00:01:21 Give you the summary of what's happened this week and talk about picking up the pieces. I guess grab your morning coffee or maybe something a little stronger. Yeah, I've put some Bayleys in that coffee. Did you have? Are you a Bayleys plus coffee? No, hey, you told me if you put anything in your coffee becomes a beverage. Yo, you take it. The people need a beverage this week this Friday.

Starting point is 00:01:45 David makes exception for Bailey's. We're going to talk about that. That's going to be a big subject, I think, get you guys up to speed. And even a lot's happened since the last time we live streamed. Got off the live stream at like 1 a.m. last night. Also, we are one year anniversary from all-time highs. Isn't that ironic? All-time highs in the crypto market.

Starting point is 00:02:06 Are we supposed to be happy about that, too? How far are we down from all-time highs? 76%. Crypto market cap is down 76% from 365 days ago. So, congrats. It is worth noting that it's about one year of time from the 2017 top to the 2018 bottom. That was also about one year. And then we had a two-year bear market.

Starting point is 00:02:28 where we touched that same bottom two more times, and then it was Defi Summer. Some good news, too. We get into the macro markets, of course, inflation. A little bit than expected this month. Maybe a bit of a silver lining. Hey, it's only 7.9%. Only 7.9%.

Starting point is 00:02:45 All right. Happy days. Okay, guys, of course, if you enjoy the roll-ups, if you enjoy the work that David and I put into the podcast and everyone behind the scenes making this happen, make sure you like and subscribe, rate and review. That's how we get the top of the charts. It's how you get me the dopamine hits to keep on doing this.

Starting point is 00:03:04 Because weeks like this, it's kind of hard. It's rough. It was a rough week. I mean, just, we'll get into more of that later. But first, some good news from our friends and sponsors at Earnify. If you're feeling down, why don't you plug in your wallet, your crypto wallet, your theorem address, in the space where you can maybe find some unclaimed airdrops. I had a friend last week text me and be like, oh, I listened to that, Earnify. I plugged some of my dresses in and I walked away with 3K.

Starting point is 00:03:34 Oh, he got some dopamine? Good. Yeah. It's a little dopamine finder. Not just dopamine, David. Money. I think this is cold, hard cash at the end of this. What does Earnify do?

Starting point is 00:03:43 Yeah, Earnify takes your Ethereum address and then it scans the whole library of air drops, POAPs, NFT, mints that you may or may have not gotten. And so it's just like it's a little robot to make sure that it goes and checks all of your pants pockets for the $20 bill that you left in your pants pockets. But airdrops tend to be worth a lot more than $20. So all you have to do, it's free to use, but you can sign up to get some extra perks and privileges. It's free to use. You can just put in your Ethereum address and it will go scan the blockchain to make sure that you haven't left any money in any corner of Ethereum or any other blockchain, for that matter. Good to go find your money right now on a week like this.

Starting point is 00:04:22 Go to banklist.c.c.c. slash earnify. That's E-A-R-N-I-F-I to find out more about that. All right, David. Let's get into the markets. Deep breath. You ready? Yeah. Okay. Bitcoin. What's it looking like? Bitcoin, start of the week at $20,275, down 14.5%. Congrats Bitcoin for setting a new low for the year, a new low in this bear market. We've ticked the bottom at $15,513. We are currently at $17,000. We are currently at $17,000. $17,300. So hit a low of 15,500, the new low for the year, but back up to 17,300. David, I'm going to be honest. I wasn't sure we'd ever see 15K Bitcoin, but now 10K Bitcoin

Starting point is 00:05:08 and under is in sight, right? I mean, we're like 50% off of that. And what's crazy is this is 365 days of down, right? To the day. Yeah. Tomorrow will be 366. But yeah, we are at the one year anniversary of the Bitcoin all-time high, where the high was $69,000, nice, $44 for Bitcoin, down about 74% from the all-time high. Pretty brutal. I mean, I've seen worse, though. I've seen worse. I mean, last cycle, would Bitcoin get down to 83% from all-time high, 85%?

Starting point is 00:05:45 Something like this. Of course, Ether got to 94% all-time high. Speaking of Ether, what's that looking like on the week? started the week at 1550, down 17.8% to where it is currently at 1270. It got up to as high as like 1330 earlier, but down to 1270 right now, so down 18% on the week. And what's this chart showing us here? The ratio, we are down 0.076, where we were last week to 0.073. Again, for what it is, you know, if it was last cycle, Ether would be wrecked during a week like this.

Starting point is 00:06:20 It's holding up okay. It's holding up okay. Ratio's holding up okay, but down, down bad. So 14% for Bitcoin and then close to 18% for ether. Pretty crazy. How about the crypto market cap as a whole? Hit a new low of $830 billion total market cap. We are bounced back a little bit to $910 billion.

Starting point is 00:06:43 That lower than expected CPI print has saved us a little bit, created a little bottom. Yeah. A bottom. How about crypto punks? You wanted to put some NFT news in here? And there was a flippening that happened. It wasn't the ETH Bitcoin flippinging, but it was a NFT flippinging. Yeah, I am a biased punk holder.

Starting point is 00:07:03 So take that with a grain of salt. But punks are now, once again, above Apes. So the OGNFT now has a higher floor price than the Apes. One ape, a floor ape will cost you about 60th. A floor punk will cost you about 66th. Just a stronger holder community. Is that what's happening? Perhaps.

Starting point is 00:07:22 It's kind of the, you know, the tourist leave, the settlers stay. People with less conviction on other assets. I mean, punks are an older project as well. They are the oldest NFT project. They are the OG. They are the Bitcoin of NFTs, yeah. So that is like the NFT of last resort, I guess, for this entire market. So, yeah, that's interesting to see.

Starting point is 00:07:43 Well, let's talk a little bit about the economy. Well, we're talking about it. And then we'll get to crypto. but inflation has officially dropped to 7.7%. Dropped to 7.7. Yes. And we're happy about that. And the reason why we're happy is because last month it was 8.2%.

Starting point is 00:08:01 And it came in a little bit lower than expectations. I think 0.2% below expectations. So you can see the chart here. This is like all the way from 1965 to 2023. And so you could say maybe we've peaked. it's kind of looking like maybe we peaked sometime this summer from an inflation perspective and we're on our way down. And I guess that would make sense because we're going to get to more things later, but there's layoffs. It's like the economy is turning.

Starting point is 00:08:32 Interest rates, of course, have been hiked right up. How could inflation continue to rise if we are spinning towards recession? It really can't unless we get some situation like stagflation should be even worse. So this is an expected drop. Maybe the good news is the Fed starts to relent on their policy, the good news at least for markets. And what are we looking at here, David? Yeah, this is the SPY. So SPY who jumped four and a half percent on this news.

Starting point is 00:09:03 So the index, the SPY index goes from 374 to 390 up 4.5 percent because of the drop in inflation. So markets happy. Markets happy. I'm kind of worried about the whiplash of CPI. Like what happens if CPI just like plummet to zero while we're laying off people. That would be called deflation, which I mean, we like it in ether, but we don't like it in the dollar. That's what I'm worried about. But still, inflation coming down is good.

Starting point is 00:09:30 Well, we've got a long ways to go. I mean, I think the Fed is hopeful can get to like the 3 to 4% range if that's even possible. But the markets like that. Risk on assets up on that news. And so was crypto, although it had a much worse week. After being down bigly, we had the positive CPI print, well, the lower CPI print, which was positive news. And then the markets, including the crypto markets, did like that.

Starting point is 00:09:56 But, I mean, FTX collapse, inflation, a half a percent lower than expected. Band-aid on a bullet wound. Yeah. It's not helping us much this week. Let's just touch on elections while we're here to. Let's not talk about crypto as much as possible. We'll punt on that conversation. This is turned into a political problem.

Starting point is 00:10:14 podcast. Election results for 2022, Senate. So it's still undecided. This is the U.S. election, of course. Still undecided election results. Majority is unknown. Apparently, each party needs to win two of three more races that are still in dispute.

Starting point is 00:10:34 Georgia, Arizona, Nevada, and Georgia, the runoff will actually happen in December. So we won't know who controls the Senate until then. also in the House, Republicans gained six seats, Democrats lost seven. That was expected, but actually I think it's kind of expected the Republicans would, there'd be some kind of a red wave. Yes, which has not materialized, which is just the news that I've heard.

Starting point is 00:11:01 Yes, has not materialized, but yeah, I mean, it's kind of still the way it was before, almost. I mean, no real changes. We'll see who controls the Senate past December. But no change is considered an L for the Republicans. They wanted the red wave. They didn't get it. So the same is a loss for the Republicans. That's what I've heard.

Starting point is 00:11:22 What's interesting about this is crypto had a role to play. A minor role, of course. But if you add up the numbers about, according to Wall Street Journal, $73 million went into the 2022 elections from crypto. I think SBF was like $70 million of that. Oh, sick. So it was SBF great. He was a lot, which, right, so we'll get to a little bit later.

Starting point is 00:11:47 What does this mean for crypto, is the question, election results? And the answer, I think, David, is what? Probably nothing. Probably nothing. Yeah. I mean, I don't think this impacts it. I think the SBF events of this week and FTX meltdown of this week impact crypto in a big way, which we'll talk about. David, it's also layoff season.

Starting point is 00:12:09 What headline are we looking at? Yeah, so Silicon Valley kind of down bad. Meta, the parent company of Facebook laying off more than 11,000 employees, but they are not the only one. Silicon Valley overall has got a collective layoffs of tens of thousands. So Twitter laid off 3,700 people. I don't know if that was like economics related or Elon Musk related. Definitely Elon Musk related.

Starting point is 00:12:33 Definitely Musk related. And that's 50% of the workforce, right? Yeah. Oh, wow. I mean a combo, but lots of Musk in that. Stripe laid off 1,000 people. Robin Hood laid off 1,000 people, Lyft, laid off 700 people, laid off 700 people, open door, 550, Netflix, 450. It goes on. Yeah, so collectively, like, tens of thousands of people laid off across the tech sector in just the Bay Area, just San Francisco.

Starting point is 00:12:57 That's crazy. I mean, tech just really expanded during COVID over the past two years, and now they're completely contracting. It's starting to happen in crypto a little bit, too, David. Yeah, Dapper Labs, cutting 22%. of staff because NFT markets. Not great. Not great. Yeah.

Starting point is 00:13:16 When's the last time you heard about NBA Top Shot? Oh, I have not. The headline here says sales volumes for Dapper Labs, NBA Topshot has declined to $2.6 million from $224 million in February of 2021. That is a 99% reduction in revenue. Wow. That's bad. Yeah, that's very bad.

Starting point is 00:13:40 bad. I mean, that 22% might, uh, might ratchet up throughout all of this. Um, you know, one thing, the last time I think I've heard of NBA top shots in the context of people actually starting their crypto journey through NBA top shots. Uh, they no longer do it. They no longer, maybe they have some, some old NFTs from NBA. Yeah, they got into the harder stuff. It brought a lot of people into crypto, right? Brought a lot of people like I talk to the Ethereum and defy. It's like, uh, when I talk to them, they're like, oh, so how, what brought you to crypto and you're going to laugh at this. NBA top shots. That was the thing. I guess let's try to look for some bright spots here. And the big bright spot, maybe the only this week. I mean,

Starting point is 00:14:22 there are some other things that are positive that have gone on, but is Ethereum. And the burn rate, I mean, it sucks that this was the week that Ethereum finally went ultrasound, because that was a milestone we had planned to actually celebrate. I mean, the very beginning of the, when was the Justin Drake episode, almost like two years ago now? Yeah, not almost a year and a half ago, yeah. A year and a half ago, where he coined the phrase on bankless podcast, ultrasound money to describe Ethereum's monetary policy. And this is the week. It actually went ultrasound, at least ultrasound since the merge. What are we looking at here, David? Yeah, this is, of course, the Ultrasound.Money website. Supply change since the merge negative 5,400 ether.

Starting point is 00:15:13 Ryan, we have burned about 6,000-ish ether, maybe 7,000 in the last two, three days, 6,000 ether burnt in the last three days, bringing us a negative 5,400 ether. And like, the, this is the through line, the message here I want to convey is that this is an anti-fragile anti-fragile mechanism. Crypto broke this week. Liquidation's happened, prices go down, F-TX is insolvent, and all of that volatility creates the ether burn. And that ether burn overall makes Ethereum more secure. And so why this is like, if you're anti-ethmaxie, you're like, oh, these people are just like circle-jurking about the burn like they always do. Maybe. I am here to say that this is, while there is chaos, at least ether becomes more anti-fragile

Starting point is 00:16:09 because its security gets cheaper as we burn ether. And so while there's destruction everywhere, at least Ethereum is a little bit more anti-fragile. And that is because of the burn. And we are now, since the merge, negative 0.03% on yearly issuance, and we continue to decline. So this is the one bright shining star that I have that's making me a little bit happy this week, Ryan. Yeah, I mean, and I think that's a big one in the context of crypto, right? Ethereum performed very well this week. I know you're talking in some of the streams you did earlier this week about this sense that for a lot of people who are in kind of the Ethereum bankless defy world and didn't keep their money in kind of the Sam coins, as Kobe calls them, you know, the FTCS of the world.

Starting point is 00:16:58 but also in, or the Solanas and some of these other assets and in FTX. I felt somewhat like unaffected personally by this, right? Of course, crypto prices are down, but we've already seen lower crypto prices. Right. Even over the summer, even recently. So it was sort of weird to feel like another case of the defy Ethereum community. We're not insulated from this because obviously, FDX is

Starting point is 00:17:28 And we're down 15% in prices on the week Yeah massive down And this is terrible for everyone Yet not as drastically affected As those that were maybe a little closer To the FDX community for instance Who can't withdraw their money At this point in time

Starting point is 00:17:45 And certainly our hearts go out to people Who've gotten wrecked in that way But it sort of reminds me of Luna and Terra as well It's just like I wasn't personally affected by that because fortunately we were able to stay away from that catastrophe completely. There are some things that smelled bad about that. There's this core of crypto that has a ton of activity.

Starting point is 00:18:10 It's uniswap. It's Avey. It's Maker. It's compound. It's a few other applications too. And being like a power user of those applications while not having an FTX account, never touching Terra Luna. like if you have been in OG

Starting point is 00:18:26 Defy 1.0 Ethereum applications, you have been in this tiny little like bubble of protection while it seems the whole rest of the industry has just like blown up around you. That's kind of how it's felt like for me lately. Yeah, it totally is like that scene of like somebody leaving an explosion and there's like, you know, everything behind them is blowing up and there's fire.

Starting point is 00:18:49 Mortars going off, bullets whizzing by. And like if you're if you're just tinkering with, just Avey, un-swap, you know, some layer twos, you're fine. I do think, look, I don't want to discount the role luck plays into all of that. Because look, one of these smart contracts, something could happen in Ethereum at any point in time. What do we always say? This is risky. It's not for everyone.

Starting point is 00:19:11 You could lose everything. And yet, I think some of the bankless principles have held up pretty well through the storm that is 2022, right? even just the idea of going bankless, the idea of making sure that you don't have funds on a public exchange, that you're taking custody of your own keys, right? That thing would have saved people from Voyager, from Celsius,

Starting point is 00:19:34 and even from FTX. And that's what we're going to get into next, because FTX was the bank, the crypto bank that people thought was secure, people thought was safe. Honestly, I did. I thought it was fine. I did too.

Starting point is 00:19:48 If someone asked me, here's the test, right? If someone asked you, hey, David, I'm thinking you get into crypto, Coinbase, FTX, you think one's riskier than another. Like, I know you have a preference, but is FTX okay? What would you say? I would say, yeah, I think I've been asked this question before, and I think I've said, yeah, Coinbase, FTX, they're fine. So, it was definitely not fine. Guys, we're going to be right back with that, the story of SBF and FTX, the final day, the judgment day, I guess, where all of this has come to light. We'll be right back.

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Starting point is 00:22:15 I know we have episodes about this already if people want the full story, but what's the 90-second version? 90-second version. SBF rose to fame through this trading fund called Alameda Research, which he is, I believe, like the 90% owner over. Alameda Research just would trade in crypto, do a lot of positions like hedge fund, like hedge trading, all the stuff, made a ton of money. He was a great trader.

Starting point is 00:22:42 and that's where SBF made a lot of his initial money, and that's where Alameda grew a lot of its capital, and then he slowly passed off responsibility to others. Meanwhile, he makes FTCS exchange. Seemingly, Sam Bankman-Freet is a great builder, great operator. FTX, the exchange, rose to fame in a time where no one really thought it was possible to make another exchange, FTCS just made a great product, good exchange, good services, good financial tools,

Starting point is 00:23:12 everyone seemed to be really impressed by Sam. And Sam as a figure grew in prominence for these two massive successes. He slowly passed off all of his responsibility of Alameda Research to somebody else, a team of people, and totally focused and double down on the FTX Empire, which grew in a crazy fashion. There was always this loose association between Alameda Research and FTX, where Alameda would market make on the FTX exchange. making FTCX extremely liquid in a great place to just have liquidity beyond just the basics.

Starting point is 00:23:49 And so there were the symbiosis between Alameda research and FTCS helped FTCS rise in fame. We saw FTX buy naming rights for the Miami Heat Stadium. We saw FTX like signed deals with like Tom Brady and just like a huge success for it out of 2021 and, you know, raise billions of dollars in capital. then a report out of CoinDesk from a leaked financial document about Alameda's balance sheet reported that a lot of Alameda's balance sheet, basically all their assets were the FTCX exchanges token FTT, and it had a ton of FTT as collateral backing a bunch of loans. And so Alameda had loans that were backed by FTT. It was in a precarious position, and that alerted CZ.

Starting point is 00:24:39 and now Binance was an early investor in FTX. CZ, of course, is the co-founder of Binance, a different kind of exchange empire that he's built and the rival to SBF. Much bigger exchange empire. Yes. Yeah. And so Binance invested in FTX equity, and as a result, they had $2.1 billion of FTT. And CZ says, due to recent revelations that have come to light,

Starting point is 00:25:01 we have decided to liquidate any remaining FTT on our books. This is largely a result of the precarious nature of FTT because it was such strong. it was a huge position of Alameda's books. It was basically all of Alameda's assets were basically FTT tokens. People are like, how did Alameda have such, I thought they were trading like Bitcoin and Ether. Why are so much of their assets all denominated in FTT? That was a big question mark.

Starting point is 00:25:24 And so CZ was like, okay, that's not good. We're going to start selling our FTT because of this precarious nature, which starts to first plummet the price of FTT scaring Alameda, but then also trigger fears that there is some sort of contagion between Alameda and FTX because people always knew that there was a link between these two firms from SBF and these were loosely correlated somehow. And people were worried that somehow there was going to be a run on the bank on FTX because of the shared asset, the shared balance books between FTCS and Alameda, which was hypothesized. that turned out, Ryan, to be true. There was co-mingling of assets between Alameda and FTX. So moving forward in the story, the next morning after CEC said he's going to dump all this FTT,

Starting point is 00:26:17 FTC appeared to stop processing user withdrawals. So they ran out of money. And that's basically where it was revealed that FTX was insolvent. How insolvent was FTCS? We didn't really know at the time. We still don't know. but we initially hypothesized something like one to five billion dollars of insolvency, which is already a big hole.

Starting point is 00:26:38 It's now coming to be somewhere around in the $8 to $10 billion that is missing from the FTC's balance sheet, which is largely coming out of user deposits. So what we're talking about is we've got somebody who operated an exchange and a hedge fund. And in order to bolster the books of the hedge fund, he used depositors money in the exchange to basically do that. He gambled away, depositors money in the exchange. I mean, that would be a super simple explanation of what happened. And so now there's a whole- But also, it's important to know that Alameda probably was wrecked along with everyone else during the Three Eros Capital Contagion back in May.

Starting point is 00:27:23 Yes. The reason why they weren't is because they had this relationship with FTX, and so they were able to have to not be wrecked because they FTX sent them a bailout a secret under the table bailout and it was a it was a bailout of depot with like backed by depositors funds whatever money that they had including depositors funds absolutely insane i mean it before he said in our podcast is like you go to a bank or you go to exchange right um you deposit your funds it's not theirs to go like play with and gamble with and use in their side hedge fund, it's supposed to stay there. So that when the user comes back and says, okay, now I'd like to withdraw my funds,

Starting point is 00:28:09 those funds can just be withdrawn. And so the balance sheet should be very simple. Deposits and withdrawals. Deposits and withdrawals. All user funds are deposited and then withdrawn. And that completely broke. And so I guess one of my takes about all of this is because, we're still seeing what the fallout might be in crypto.

Starting point is 00:28:31 And it's absolutely massive. I think this is the biggest single event that's occurred in crypto, maybe since Mount Cox. In some ways, it sort of exceeded this because this is somebody who was supposed to be trusted, trust in Wall Street. He was lobbying in D.C. He represented us. He had the ears of senators and folks in Congress.

Starting point is 00:28:55 He represented us as kind of like the, the cleaned up version of crypto without all of the crypto anarchists and shenanigans. Yes. I mean, he kind of didn't for the different mystique, but yes, he would wear a tie. In fact, we've seen him in front of Congress kind of like talking about crypto. Anyway, all of this just really sunk in with me last night. And this was yesterday evening. And I was just thinking, David, like, how surreal the last 48 hours had been as this story has developed. because like I just I don't know how to overstate how big a figure Sam was like crypto trading

Starting point is 00:29:32 God exchange God like rock of um I don't know um how to how to how to last and how to persist and how to do things right in crypto it just his exchange he built was just a phenomenal product yeah which is sad because that product's gone now and what's crazy to me is as of yesterday it was 11 days ago that we hosted this debate between SBAF and Eric Forgey's. Sam Bank Benfried and Eric Forhees. And you remember that? This is a screenshot from that debate. And Sam was lecturing us and talking to us about the merits of crypto regulation. We were having this debate about crypto values. And in the background, David, this guy had maybe an $8 to $10 billion hole. that was developing on his balance sheet.

Starting point is 00:30:26 He was talking about crypto values and discussing the merits and costs of like DFI, talking about ways to regulate DFI front ends. Meanwhile, he's like playing with depositor money. He's gambling it away. He's been, it's got to be the most irresponsible figure that's done the most damage to crypto that I've ever seen,

Starting point is 00:30:51 that this industry has ever seen. And this was 11 days ago. We were having a conversation with this guy. I don't understand. Like, it's even hard for me to believe that we had this conversation. Like, you were there, right? Like, this happened. He was so frazzled.

Starting point is 00:31:11 He was more frazzled and inarticulate than I had ever seen him before. Like, I've seen him give his talks at Capitol Hill. And he's, like, decently articulate. That call, he was a different person. and it's just interesting that 11 days later we discover an $8 billion, $10 billion a hole in FTCS. Well, let's talk about what's developed, and this is as of a Thursday morning. Yeah, that was just the recap. This is the apology that's just come out.

Starting point is 00:31:40 This is a tweet thread from SBF. Do you want to read a few of these? Yeah, SBF goes, I'm sorry. That's the biggest thing. I effed up and should have done better. I also should have been communicating more very recently. my hands were tied during the duration of the possible finance deal. I wasn't particularly allowed to say much publicly, but of course it's on me that we ended up there in the first

Starting point is 00:32:00 place. So here is an update on where things are. FTCS International currently has a total market value of assets of collateral higher than client deposits, moves with prices. But that's different from liquidity for delivery. As you can tell from the state of withdrawals, the liquidity varies widely from very little, from very to very little. What does that mean here? He's saying that the He's saying that the value of the assets and collateral that FTX has is higher than what their client deposits are. Based on what? Like, what's the value of these assets if you actually can't sell them and then we'll buy them? Yeah, but he's saying that that's different from liquidity.

Starting point is 00:32:39 So they have the assets, but they don't have them liquid. They have some paper value is what you're saying. Yeah, paper value, yeah. SPF continues. It goes, the story here is one I'm still fleshing out every detail of, but at a very high level. I effed up twice. The first time, a poor internal labeling of bank-related accounts meant that I was substantially off from my sense of user's margin. I thought it was way lower. My sense before, leverage, zero, U.S. liquidity ready to deliver 24 times the average daily withdrawal. Actual,

Starting point is 00:33:09 1.7 times leverage and liquidity, 180% of Sunday's worth of withdrawals. But of course, when it rains at poor, we saw roughly $5 billion of withdrawals on Sunday, the large, the large, just by a huge margin. That was the thing that Sisi triggered. He basically precipitated a bank run. Yes. With some of these things. And that's what he's talking about.

Starting point is 00:33:30 The $5 billion of withdrawals on just one day alone. Right. And so, SPS says, and I saw I was off twice, which tells me a lot of things, both specifically and generally, that I was shit at.

Starting point is 00:33:42 And a third time, I'm not communicating enough. And just a reminder, a third time, I'm not communicating enough. I should have, said more. I'm sorry. I was slammed with things to do and didn't give you updates at all. David, why would a bank run actually matter if, like, I mean, if Coinbase got a bank run

Starting point is 00:34:01 and everyone withdrew all of their eth and all of their Bitcoin, right? Like, why would that be a problem? Because all of the eth and all of the Bitcoin is there. It's not a fractional reserve system. It shouldn't be a problem. It shouldn't be a fractional reserve system. It was a fractional reserve system. It was a fractional reserve system. Yeah. And like the whole line, his whole tweet, like, mislabeled bank accounts. Clerical error. That caused an $8 billion hole. Like that's what did it?

Starting point is 00:34:35 I don't think so. Anyways, so he finishes off. Anyways, my number one priority by far is doing right by users, and I'm going to do everything I can to do that, to take responsibility and do what I can. So right now we're spending the week doing everything we can to raise liquidity. I can't make any promises around that, but I'm going to try. and give everything I have to make that work. There are a number of players we are in talks with, letters of intent, term sheets, etc. We'll see how that ends up.

Starting point is 00:34:58 Every penny of that and the existing collateral will go straight to users unless or until we've done right by them. After that, investors, old and new, and employees who have fought for what's right for their career and who weren't responsible for any of the fuck-ups. Because at the end of day, I was CEO, which means I was responsible for making sure that things went well. I ultimately should be, have been on top of everything. I clearly failed in that. I'm sorry. So what does this mean going forward?

Starting point is 00:35:23 I'm not sure. He loves to say I'm not sure. First, Alameda research is winding down. They are probably liquidated. They aren't doing any of the weird things that I see on Twitter and nothing large anymore. One way or another, soon they won't be trading on FTX at all. Second, in any scenario in which FTX continues operating, its first priority will be radical transparency.

Starting point is 00:35:44 Transparency probably all we should have been giving, giving as close to on-chain transparency as I can. so that people know exactly what is happening on it. Kind of like Defi? Kind of like Defi. Kind of like Defi. Yeah. Yeah.

Starting point is 00:35:58 I mean, I feel like that's a good conclusion. He goes on. But there was one thing he said. A lot of Asari's, of course, this tweet number 20. At some point, I might have more to say about a particular sparring partner, so to speak. It's talking about CZ. But you know, glass houses. So for now, all say is, well-played, you won.

Starting point is 00:36:17 Heavily implying that CZ was his downfall. And of course, there was that CZ tweet on Sunday that precipitated part of this. But if he wasn't running a fractional reserve system where he's lending out depositors money, it wouldn't have been a problem, right? So CZ kind of poked some holes in the structure and the whole rotting thing fell down. And it's his fault that it was a rotting structure to begin with and that a few little pokes would... If a few tweets can collapse your... Empire.

Starting point is 00:36:51 You're not, you got to, you might have a problem. You might have a problem. By the way, did you see this? This is a tweet from Kobe. That's kind of related to,

Starting point is 00:37:01 uh, to SBF's thread. But there is some, um, similarities in the way, Chef Nomi and Sampakimbinghreed. Yeah. And Chef Nomi,

Starting point is 00:37:10 of course, was a sushi swap founder that just, the OG sushi swap founder who did the OG sushi swap rug, which kind of gave this sushi swap curse in the first place. and after rugging the treasury out of sushi swap, Chef Nomi tweeted to everyone, I fucked up and I am sorry,

Starting point is 00:37:28 which is kind of the same language. Which is what Kobe's poking out. I'm sorry, that's the biggest thing I fucked up and I should have done better. Interesting. Interesting anyway. There was some ties. That wasn't the only association

Starting point is 00:37:37 between sushi swap and Sam Bankman-Fried. There's been more, there's been relations between. I mean, at this point, David, I would not be surprised. This would not surprise me in the least. We saw, we saw Doe Kwan behind those algos stable coins as an anon and then start.

Starting point is 00:37:55 Rick Sanchez, he telegrammed to me and told me about base, what is it? Basis cash, was his original Ethereum Algo stable coin. It would not surprise me in the least. So, I don't know, what do you make of that? Was it an apology? Is it just a nothing burger? Like, what is he doing here? What is he trying to accomplish? I don't know, man. I don't know.

Starting point is 00:38:19 The big question, I think, is where he's going to find the $8 to $10 billion to fill that whole depositors money. All right. So right now, FTCS is worth $1. It is on the market to anyone who wants to buy it for $1. If you buy FTCS for $1, you are taking on somewhere between $8-ish billion of liabilities. You get the FTX empire, which comes with the low, low price of $8 billion of liabilities. Absolutely brutal. And of course, CZ looked at this apparently and then completely walked away from it. It was like, hell no. It took him about 24 hours to reject that deal.

Starting point is 00:38:59 This is also cost SBF from a net worth perspective, of course, like at his peak, I don't know, he was in the 20s of billions, something like this. I've heard close to 30 billion. But he lost an estimated $15 billion, which at the time is nearly 94% of his total wealth. I bet that's even more now. Like, I mean, who knows where he's going to end up? He could be at zero, yeah. Definitely cost him a lot. What is this tweet, David? Yeah, so this is, okay, so at this point, we are on the frontier of the story, so things

Starting point is 00:39:30 are now developing. But tether has frozen FTX's USD address. So Tether, or FTX, all the Tether that FTX has, about $46 million of it is now frozen. You could only imagine that regular. regulators came knocking on Tether's door. I said, hey, go freeze. FTX's Tether supply. And Tether was like, sure, 100%. Happy to do that. Yeah, happy to. And of course, I mean, USDT is just kind of an IOU. It's not like actually money. So, I mean, they can do this sort of thing, whatever they want to. Hopefully there's assets backing this money and the money wasn't really lost. Gary Gensler has

Starting point is 00:40:17 entered the picture a little bit here. You could imagine he'd have some things to say. So he went on CNBC earlier this morning at our time of recording. And what did he say? He said that he, Gary, was hoodwinked by FTX after meeting with them in March and says he is now building the evidence, building the facts, which often takes time as soon answer as to what he is doing with FTX. Gary was hoodwined.

Starting point is 00:40:41 A lot of us were, to be fair. Yes. But Gary in particular. It's another follow-up. It's his job to not be. It's true. So Gary also tweeted out, I'll be joining Squawk CNBC at 8 a.m.

Starting point is 00:40:55 Eastern, so that was this morning, to discuss recent developments in the crypto markets. And Collins Belton, he's a lawyer actually interviewed about the tornado cash stuff, he replies to this tweet out of Gary and says, ideally you'll spend some time to explain how, once again, the commission's enforcement priorities focused on entities trying to deploy technology

Starting point is 00:41:12 to prevent these market failures and asymmetries while you are meeting with the perpetrators or overlooking their malfeasance. And so this is just a tweet of a picture of Gary's Tuesday, March 29th schedule, which was a meeting with like eight different FTX representatives, executives. So it's interesting that Gary Gensler and FTCS had met. But do you see this move? Gensler is definitely distancing himself from SBF and FTCS.

Starting point is 00:41:42 And a lot of politicians who receive political donations and have been in conversation with SBF are doing the same thing. You've got to imagine. I mean, SBF is just, like, toxic at this point. It's crypto's biggest, it's not a Ponzi scheme, but it's like, it's a scheme of that type, right? And so no one wants to be associated in D.C. with that. This is part of why this is going to cost crypto so much is we've taken a major black eye here and lost a whole lot. lot of legitimacy from the serious adults, I think. You know, the regulators, D.C., Wall Street, institutions, that sort of thing. Ryan, this is developing. We have an email with Tom Emmer's staff

Starting point is 00:42:26 to try and get him on the show to talk more about this, but he retweets Gary Gensler's tweet about joining Squawk CNBC. And Tom Emmer, Representative Tom Emmer says, interesting. Gary Gensler runs to the media while reports to my office allege he was helping SBF and FTX work on legal loopholes to obtain a regulatory monopoly. We are looking into this. That is all we know at this time. It was the fear of the crypto industry that SBF's work in D.C. was to specifically produce regulatory operatrage for FTX by closing the door behind them after making sure that whatever they were doing was legal. Even closing the door on all of DeFi. Right, on DeFi, right. And so Tom Emmer says that they had reports that Gary Gensler and SBF were working to create legal loopholes to create a regulatory

Starting point is 00:43:18 monopoly. I hope we can get Tom Emmer on the show to talk about this soon. That is interesting. More developing too. Of course, Elizabeth Warren weighed in on this and said, The collapse of one of the largest crypto platform shows how much of the industry appears to be smoke and mirrors. We need more aggressive enforcement, and I'll keep pushing the SEC to enforce the law to protect consumers and financial stability. At face value, I love that tweet. I don't have any problem with that tweet. The collapse of one of the largest crypto platforms show how much of the industry appears to be smoke and mirrors.

Starting point is 00:43:49 That's what FTX was. It was smoke and mirrors. Yes. And so I do not have a problem with that. We need to be more aggressive enforcement and keep pushing the SEC to enforce laws to protect. Like, if this means that we are forcing the SEC to do more, great. fine. I don't have a problem with this.

Starting point is 00:44:06 To do more that's helpful. To do more that prevents the actual problem. Like it's definitely a problem if Gary Gensler is kind of setting up a monopoly for crypto bankers like SBF and using regulatory power to do that. Brian Armstrong's response to Elizabeth Warren right under this tweet I thought was good too. He says, FDX was an offshore exchange not even regulated by the SEA. Elizabeth. The problem is that the SEC failed to create regulatory clarity here in the U.S. so many American investors and 95% of trading activity went offshore. Punishing U.S.

Starting point is 00:44:45 companies for making this for this makes no sense. And that is actually the facts of the case. It wasn't FDX.U.S., which was more regulated in the U.S. Which is fine. If you have assets in FTX U.S., you are fine. So if you're an American and you're using FTX U.S., you're totally fine. all deposits are there, withdrawals are enabled. And that's like 1% of all of FTCS assets. It's the minority of the business because it was pushed out. It was pushed out, but also because they could actually take customer deposits and go gamble them if they were not inside of the United States. Right.

Starting point is 00:45:26 So Brian's making the case. Hey, you have to work to make it easier for retail to have safe assets. to have safe access to these products. And you're not doing that with the current regulatory regime. David, there's also some talk of maybe some FTCS transactions appear to be processing. So, of course, no one can get their funds out of FTCS. That's locked. That's a one-way ticket.

Starting point is 00:45:52 They no longer exist. They're not there. But we're looking on chain, and some things do seem to be withdrawing. What's this? Yeah, so this is Stephen out of the block, who's done some great research and snooping, on-chain snooping, but just noticed that funds were coming out of FTX and going into various accounts. No one knows how or why, but that is what we are able to see on chain.

Starting point is 00:46:17 This is Larry Sirmack says, the withdrawals from FTX seem to be really weird. Some of them actually go to the Binance deposit addresses, and some of them appear to be fresh wallets, which could indicate a consolidation, pretty large $100,000 processing. as well. What all of this is, I don't think we know. So I think one of the biggest pieces of this story is everyone, a lot of people trusted Sam and a lot of people were wrong about Sam. A lot of people were duped. I think myself and you included not fully trusting Sam, not ever trusting fully a centralized exchange, but to think that FTX could just evaporate that they were like gambling away the depositors money, that was unthinkable to me.

Starting point is 00:47:01 This is a tweet thread from some of the people that were sticking up for FDX and SBF in the beginning. And there was a lot of this chatter as the rumors persisted that, hey, maybe something's going on at FTCS and Alameda. You should look into it. This is somebody, an account, austerity sucks. I don't delete tweets, so I'm not going to delete this. Even as people laugh and troll and mock me, yes, I was wrong, the tweet stays up. Kudos for keeping the tweet up. On November 6th, this was the tweet that the poster posted.

Starting point is 00:47:30 Imagine thinking Alameda is the next three hours capital. A side effect of the increased counterparty due diligence process. He goes on. Anyway, it was this conversation like, they're not going to go three hours capital. Everything's fine. It's Alameda. They're fine. They're so responsible.

Starting point is 00:47:45 Yeah. I mean, look at Sam. He's like the pinnacle of responsible exchange operator. He's kind of a younger, faster moving Brian Armstrong. This is actually from some of the employees that response. to this thread, and this is an employee named Zane Tackett, many people internally and externally were fooled. I'll leave

Starting point is 00:48:06 my tweets up as well and take all the he I deserve for defending something. I didn't have all the details on. Somebody says, I can't believe this is real, Zane. You're not the only one, man, but in a state of complete shock, he goes on to say, I don't want to speak for others. Remember, this is an employee of FTCS. I don't want to speak for

Starting point is 00:48:22 others, but just complete disbelief and feelings of betrayal. What bothers me the most is that I went out and defended FTX and say I'm in public, said the news was fud, we're fine. When they knew, that wasn't true, and they didn't have the decency to warn me. Employees as well, feeling betrayed by this. What do we do about this, David? I mean, I guess I have kind of two questions for you. It's like, first, how long do you think this is going to take to recover? I mean, this is clearly a wound

Starting point is 00:48:53 in the crypto industry. And then I want to ask you where we go from here, but time to recovery. How long is it going to take this one to heal? I mean, we've had wounds in the past. We've definitely had damage before. This isn't the first time. But how about this? How long will it take for us to get out of this one? How long is it going to take to forget the name FTX?

Starting point is 00:49:15 Oh, I don't think we're ever going to forget the name FtX. For Normies to forget the name FTCS. I think it's going to be a Mount Gox. But yes, I guess Mount Gox is kind of faded, except for the crypto historians who bring it up. Right. It's, I mean, yeah, we're not, we're going to be living with this for a while. I think my take is years, David. Years.

Starting point is 00:49:40 Yeah, I think it's years. And, you know, I'll say it again, I don't think any single individual has ever done more damage to crypto than SBF. I mean, it's things like as far as total crypto market cap, we lost more Mount Gawks than we did in FTX, okay? but there's something different about this. And the difference is Mount Cox was not taken seriously by anybody. Right. Like, crypto was in its infancy. And like the token distribution of Bitcoin at the time was still so much more concentrated.

Starting point is 00:50:13 Mount Cox had like 6.5% of all bitcoins. It was a joke of an exchange, too. It was Magic the Gathering Exchange. That's the name. Yes. And the Mark Carpelli's was Mark Carpelli's. He was kind of like this neck beard. guy. He wasn't going to Congress to testify for regulation, rubbing shoulders with Gary Gensler.

Starting point is 00:50:33 A hundred percent. So the thing that will take a long time to recover, and I'm not necessarily saying actually markets, David. I don't necessarily think it'll take two to three years for markets to recover. I'm just talking about the black state, like I'm just talking about the legitimacy recovery. Right. The Ontario Pension Fund was an investor in FTX. One of the first pension funds to do things in crypto, right? Once the next time a pension fund is going to do this. Once the next time a senator is going to take a meeting with somebody in the crypto industry. Right. They're distancing themselves from it.

Starting point is 00:51:12 Right. How much? We have, like, just such a smaller foundation to stand on. Yeah. We have made, like, the work for people like Brian Armstrong and Jake Chavinsky and people who we need to have trust, we have made their jobs 10 times. harder as a result of this. Totally, dude.

Starting point is 00:51:29 I just, I can't, I feel like we're coming in the night after a crazy house party, right? And like, the kids have been super irresponsp- This is Ryan the dad, I guess, coming out. The kids have been super irresponsible. Like, there's furniture broken, computer stolen. Dude, there are kids who drove home drunk and crashed and died. That's what it is. You know, it's even worse than that.

Starting point is 00:51:53 And the cops are, you know, showing up. And then we have to pick up the pieces in our community for like and why and like why? Why did this happen? I mean, FTCS was a fantastic exchange. It was a good product. It worked. You had a product. You had a product market fit.

Starting point is 00:52:13 But you had to be what you had to run hedge fund. You had to run it as a fucking Ponzi scheme, dude. So where do we go from here is the next question. Like how do we? actually start recovering. I mean, here's the thing, here's the story about 2022 is it's just a story of this keeps happening. And if it was just one thing, if it was just FTX, you know, that would be one thing. But no, we had, we had three hours capital, but I mean, before that, we had Doe Kwan, totally reckless. Celsius. Celsius. And then I saw you tweet this out, by the way. Okay, answer me this.

Starting point is 00:52:54 3-0 capital liquidated Alameda liquidated FTX insolvent then who made the money and who shows up Richard freaking heart goes high there I made all the money

Starting point is 00:53:04 okay this dude is a scammer he runs he's got a coin called Pulse he's praying on people making tons of money and he's actively scamming

Starting point is 00:53:18 and I feel like our industry is still full of people like this for every for every Brian Armstrong, for every Hayden Adams or Stani from Avey, we have like a hundred Richard hearts. And that just sucks. So what do we do about this? How do we move forward? I got nothing, man. How are you feeling about this, David? it's like we have these like super awesome foundations and it's like

Starting point is 00:53:55 they just keep on enabling the worst do you think that it's hard to justify what the hell we're doing here man do you think this is a a layer zero problem is it a problem with kind of the social layer it's like if we'll make these super cool applications and then scammers just can leverage them better

Starting point is 00:54:17 it's like we're running out of ways to explain it to normies so when someone asked you about crypto after this week do you have a different answer for them about why it's important? I won't even want to talk about it I mean I think you're like reflecting how a lot of people feel right now

Starting point is 00:54:40 we've really just been brutalized by this I guess I'll give my take on where we go from here and let me know if you have any other thoughts David I know this one hit you really hard not that you had any fun at risk, right? It's just what?

Starting point is 00:55:03 It's just like the impact, the social impact? It's just the, yeah, what is it? Why is this hitting you so hard, do you think, versus the other ones? It just gets worse. The more that it happens,

Starting point is 00:55:20 it's just, I don't know, man. One answer, I think, for us is going back. I think in our live stream last night, Kobe mentioned this to you of like, you know, where do we go after this? And his answer was, I don't know,

Starting point is 00:55:40 maybe somewhere like 2016, 2017, something like this. And I really feel like we need to take a step back and reevaluate kind of why we're here as an industry. You know that phrase that from the earliest bankless podcast, we're talking about like protocols, not people.

Starting point is 00:56:03 That's where we put our trust in. I feel like crypto believed that at one point in time. And a segment of crypto still does. But we lost a whole bunch of that with the fast money and the demagogues and the Richard Hart's. I feel like we lost our way. And I don't mean everybody. There's still fantastic people building incredible things.

Starting point is 00:56:27 But I mean enough that it made. a difference, enough that it enabled the FTXs of the world and the Alamedas and the three hours capitals and the terrors of the world. And I think what we need to do is go back and rediscover the principles and the reasons this industry exist. It's all about, it's code, not kings. That's what we're, that's what we're trusting in. It's protocols, not people. And this is about going bankless, not trusting another banker. Maybe I'll throw out some hope for David, because it feels like you're pretty down on this. But like defy weathered this quite well.

Starting point is 00:57:10 Ethereum weathered this quite well. I mean, the problem that we saw was with a centralized exchange, is with another bank. And one of the reasons I think we started this podcast and this movement. which bankless listener, I'm glad that you're joining us on and you've been on with us, is to make sure that crypto didn't replace the old system with a new system of bankers. It's no good if we just swap out Jamie Diamond for SBF, right? I mean, what do we gain?

Starting point is 00:57:52 What do we benefit from? And I felt like over the past two years or so, particularly in this bullmarking, market, we were starting to veer towards that, where the bankers were getting more and more control. We forgot about first principles of like why we're here and we put trust in the wrong people. And I'm hopeful, David, that this is actually like a another wake-up call, another cleansing process for us, another reason to go back to those roots. And ultimately, I think we'll end up stronger on the other side. It doesn't feel like that in a week like this.

Starting point is 00:58:39 But I'll just remind people, Ethereum kept going, DFI kept going. We had the transparency. We have the crypto economic protocols. We just didn't use them. And the system broke where they weren't in use. That's what I think of. I remember that there's one part out of our interview with Polenia. and they said, I'm so bullish on a human trust

Starting point is 00:59:05 that we don't actually need protocols in the future. Like, I think that's what's missing. It's like, I want to be able to trust SBF. I want to be able to hand him my private keys and then get them back later with all the funds intact. I feel like I can do that to Brian Armstrong. But, like, at this point, like, well, I don't even know, man. Like, who the hell's left?

Starting point is 00:59:26 This sounds like it's a deeper thing. It's like a faith in humanity kind of. or faith in the industry, faith in the people in the industry, faith in the layer zero. Yeah. Yeah. That's the struggle here. Well, it's because, like, who are the biggest characters of the last year? Like, we have these cult of personalities. We have, like, Doquan, and, like, Alec Moschinsky tried to make this about him, and, like, Susu in Three Hour's Capital.

Starting point is 00:59:53 Danny Sesta. And then SESTA, and then SBAF. Like, everyone's got, everyone's who's super allowed grows this massive cult of personality around them. And they all F it up every single one of them. And like, that's why I just respect that hell out of Brian Armstrong so much. It's because like, it's not about him. It's not about him. And he doesn't want it to be about him. It's one of those, it's where there's that line of just like, the people that you want to be in power don't want power. And the people that want power, you don't want them to be in power. Yeah. I, um, I will say, David, a lot of the people that we've met in crypto, though, over the past three years, four years, they are here for the right reasons.

Starting point is 01:00:42 So, you know, at which point I would quit this industry is if Vitalik Buren screwed us over. At that point, I'd be like, a faith in humanity lost. Yeah. But there's enough Vitalics. There's enough Brian's. there's enough people on the bankless journey that are doing this for the right reasons and who care about these core founding values

Starting point is 01:01:08 and I actually think we're just going to get back to rediscovering these things and hopefully build this thing back stronger. Why does it take a pain to learn? We're the most dumb monkeys of all time, dude. I don't know. Like we're supposed to be able to learn without having to feel pain.

Starting point is 01:01:28 pain is like the last resort like we're supposed to be smart I don't know were you smart the first cycle how smart were you I mean I bought a bunch of ICOs 2017 how smart was David was he what

Starting point is 01:01:42 now I'm thinking a lot smarter than I was originally letting on you think you were smarter than all the other dumb monkeys in this industry that keep giving bankers their money yeah I mean I think it's just it's just

Starting point is 01:01:58 every generation has to learn these things. And yeah, like I said, I mean, the systems that used are crypto economic protocols that use DeFi held up in all of this. And the flaws in the system were where we had trusted intermediaries. And isn't that the freaking point of crypto to remove the trusted intermediaries? Right, but we're not even doing that. Like, no one's, a few people are using that stuff. More, more, though. I mean, every year, it's a little bit more, a little bit more, a little bit more.

Starting point is 01:02:35 And, yeah, I think we'll get out of this. Guys, we got more to cover, some Ethereum Roadmap stuff. We're going to talk about the seizure of $3.4 billion from some dude's closet in Gainesville, Georgia, which is crazy. But before we do, we want to thank the sponsors that made this episode possible. In all of my years in crypto, I've never been hacked, scammed, or lost money to a thief. And a lot of that credit goes to my Ledger Hardware wallet. The Ledger NanoX and the Ledger NanoS Plus hardware wallets allow users like you and me to secure and manage all of our crypto assets and our NFTs, all with the security of storing

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Starting point is 01:04:14 And lastly, Fuel brings a powerful developer experience with its own domain-specific language, sway, and a supportive tool chain called Fork. With Fuel, you can have the benefits of smart contract languages like Solidity, while adopting the improvements made by the rust tooling ecosystem, letting the fuel development environment go beyond the limitations of the EVM. If you want to learn more, there's a link in the show notes to see how you can get involved with a fuel network. All right, guys, we're back. David's feeling better because we are looking at the Ethereum roadmap.

Starting point is 01:04:41 The newest version, a new Vitalik Butrin roadmap, just dropped. This is Ethereum. It's got all of the stages, David. We're looking at the merge, the surge, the scourge, the verge, the purge, and the splurge. And if you were paying attention, you would have noticed there's a new, Urge. The scourge is new. So we'll walk through the scourge, which is to ensure reliable, incredibly neutral transaction, including inclusion, and avoid centralization amongst MEV risk. So this has to do with all of the increased emphasis on censorship resistance of Ethereum. So he's carved out this new urge and put some things that fit under this category, things that already existed, but now we have an urge to explain it. and also Vitalik Buteran would like you to know that all of these things are happening in parallel. This is not a serial order of operations starting from the merge and ending at the splurge.

Starting point is 01:05:34 All of these things are being worked on in parallel from left to right. And this is the updated state of the Ethereum roadmap. Anything else new here, David? I mean, this is everything that, you know, are there any other major features here? Anything unexpected? Nope. Everything else is the same. He's just like move forward the progress bars.

Starting point is 01:05:54 I guess, yeah, he's added some new things here. But it's more or less, it's more or less what we expect. Yeah, if you want, I think the most recent thing that we've heard from Vitalik on the roadmap, check out our previous episode. We did that, what, six weeks ago? Made it a little longer with Vitalik where he goes through some of the roadmap. And I think it's reflected here too. David, we got OpenC.

Starting point is 01:06:17 They are creating new tools to help artists collect royalties on chain. What does this mean? Yeah, so there's been this royalty problem in the NFT world where you have royalties baked into tokens, but they're actually not enforced at the smart contract level, which actually makes sense, right? Because if you own an NFT and you want to transfer it to another wallet address, another, just like go from wallet A to wallet B, just want to send it to someone yourself, you want to gift it. You don't have to pay the royalty because it's not a sale. So where do the royalties actually come in? Well, they come in at the exchange level, but the exchanges have to opt into royalties in order for royalties to be paid.

Starting point is 01:06:55 That kind of sucks. It does kind of suck. It makes royalties an opt-in thing, which kind of ruins the point of a royalty. And so OpenC, Devin Finser and OpenC said that we are making a better system. So they have made a new little widget to help enforce royalties for tokens that have royalties. And so I think the way that this works is that if you want to add this little widget to your NFT, it makes that NFT only saleable on exchanges that opt into this little widget.

Starting point is 01:07:26 So you can write that in code though. You can write that in code, yeah. And so it's a step in the right direction to making sure that we keep royalties into the tokens, which is one of the reasons why NFTs have made the inroads into the artist communities in the first place. Yeah, you can't just be like, I choose not to pay royalties. Right.

Starting point is 01:07:44 And that shouldn't be a decision available to you. William Pister had a whole article on this, but the future of NFT, royalties and Metaversal. If you're not subscribed to Metaversal, by the way, that's a bankless sub-newsletter. If you're into the NFT space, Peacters has got it for you. It's by far the most useful NFT newsletter that exists.

Starting point is 01:07:59 That's Metaversal. Metaversal. Metaversal.com, of course. Super rare doing some NFT stuff too. They're pulling a Kevin Rose here, it feels like, and creating like a curator pass for art? Yeah, it's basically like a pass

Starting point is 01:08:15 that gives you privileged access to the super rare ecosystem. So a monthly air drop from a legendary artist, they claim, three times opportunities a month to win a one-of-one unique NFT, an exclusive PACs, passholder community access, and additional benefits to be announced. I think it's just going to be like the membership passport towards super rare. I think this is a business model that many people are going to be experimenting with.

Starting point is 01:08:41 A big fan of passports, David. How about you? Oh, I love NFT passports, my man. Also experiments. Also experiments. This is crazy. Did you catch this story, by the way? It was just before all the FTX news broke, but the U.S. apparently sees $3.36 billion worth of Bitcoin. They did this a year ago, but they just

Starting point is 01:09:02 announced it earlier this week. And this is from a guy who stole 50K of Bitcoin from the Silk Road. So, you know, Silk Road, OG kind of a drug for crypto marketplace. Ten years ago, somebody stole 50K worth of Bitcoin. And this guy was just hanging out of his house in Gainesville, Georgia. I guess the Fed knocked on his door one day. I love that it's Gainesville. Yeah. And, you know, it was like, hey, we know you have something.

Starting point is 01:09:31 And I'm not sure what the process went like from there. Apparently he voluntary, in quotes, it kind of gave up the crypto to him. I'm sure there's some plea bargains involved. I'm sure there's a lot involved here. But yeah, can you imagine sitting in Georgia with three billion, dollars in your basement somewhere worth of Bitcoin. Not in the basement. Do you know where he hit it, Ryan?

Starting point is 01:09:54 No. So the quote from the Gainesville time.com, I'm reading it right now. The, it was a small computer in a underground floor safe that was submerged under blankets in a popcorn tin in the bathroom closet or something. Oh, my God. well, sir, he was bankless though, wasn't he? I mean, didn't have to worry about FTX, just had to worry about this problem of what you do on-chain.

Starting point is 01:10:27 If you own your own assets, you can still be in trouble for stealing them. And just a, well, just a reminder, on-chain crime is also forever. It is also immutable. So what happened was the feds, the authorities, upgraded their on-chain analytics tools and were somehow able to find this individual. and go request those funds be returned. I'm not sure what happens to it from there, David.

Starting point is 01:10:50 That would be an interesting story. Did the authorities just auction this off? They will. I think that's how they did it last time. And people really, really liked it. What did they auction it from? I can't remember. I think it was the silver road.

Starting point is 01:11:05 It was Ross Oldbrick's Bitcoin is from the Silk Road. Adam Draper bought a bunch or something at the time. And Adam Draper brought a bunch, and everyone wanted them because they assumed that if the government is selling them, the bitcoins that they are government-approved Bitcoins. And so they went for a premium, and Adam Draper paid that premium. I don't think that premium has been justified, but...

Starting point is 01:11:24 Well, but he paid a lot less for them. I don't know, than the hundreds of dollars per Bitcoin. Oh, yeah, yeah, yeah, yeah. Yeah, he's definitely justified. He paid a premium at the time. Ah, I see, I see. Yeah, so pretty crazy. And by the way, that's the second largest financial seizure in history.

Starting point is 01:11:40 Happened to be with Bitcoin, happened to crypto. The other thing that's happening, given what we were just talking about, you might be excited about this, David. I am. The SEC issued a subpoena to influencers promoting hex, pulse chain, and pulse X. These are all shady,

Starting point is 01:11:56 scam. Yeah, Ponzi-type projects promoted by Richard Hart. And a collection of influencers. We are not going after Richard Hart, sadly. Where does Richard Hart live? Can we go get him? I'm sure they're going after.

Starting point is 01:12:11 I'm sure it's something. I'm they can't just go after the influencers and not Richard Hart right yes yeah where I'm Googling this where does Richard Hart can we just say can we just say this is what the SEC should be doing thank you yes like thank you thank you SEC this is what we want this is what crypto has always asked for is your help in identifying and rooting out and bringing the scammers to justice don't stop legitimate entrepreneurs and real businesses but give clarity to our industry, help Brian Armstrong with Coinbase so that 95% of trading activity doesn't happen outside of the U.S., and then also help us collect some of the scammers.

Starting point is 01:12:52 There's a lot of work to do in this space. As you just said, crypto still has a lot of scammers, shady individuals to go chase after. So you can keep yourself busy there, and that's what's happening with some of these influencers. I don't know. He's from America. I don't know where he lives. This article, there's nothing, yeah. I can't imagine. Well, it's not in the U.S. Not in Gainesville, Georgia, huh? Not in Gainesville, yeah. All right, this is a tweet out of library.

Starting point is 01:13:18 Library.com. It says, we lost. Sorry, everyone. What is this about? Well, Library was going up against the SEC about a securities offering. So the SEC sued them for issuing securities. They say that they violated securities laws by selling the native LBC tokens without registering as a U.S. securities and exchange with the U.S.

Starting point is 01:13:41 Securities and Exchange Commission. And this happened back in March of 2021, so a little bit over a year and a half ago. The SEC alleged that the LBC tokens were securities, that the startup had violated securities laws by selling them without registering, blah, blah, blah. Library pushed back, claiming the LBC tokens were not securities, of course, and that the SEC did not give it fair notice that the sale of LBC were subject to securities laws that's violating the company's rights to due process. But they have lost this legal battle with a specific judge.

Starting point is 01:14:08 and the problem with this, and this is coming out of Gabe Shapiro, is that the library judge reasons that even if the team is completely silent about efforts, no promises, no promotions, no contracts, but then they pre-mine the token to give themselves some tokens, that alone creates a sufficient expectation of profits from their efforts in a common enterprise to pass the Howie test a very bad result. basically just the mere act of giving oneself tokens is enough to produce a common enterprise is the precedent that was just set and that's bad because that basically takes care of the whole industry. It means a lot of things are tokens according to, or securities according to this judge. Now it's one judge. Just one judge. Yeah, this is not the Supreme Court.

Starting point is 01:14:56 It's just one case. But yeah, there's going to be some more fights ahead involving. this for sure. Library says the most a part about this whole situation is that even after five years of fighting and a court ruling, we still honestly do not know how to legally launch a public blockchain in the U.S. Does anybody? That's the question. What do we do?

Starting point is 01:15:19 I mean, this is an example of, okay, go find kind of the scammers and the Richard Hart's of the world, but allow the legitimate entrepreneurs and businesses to legally, compliantly launch a token. Figure out how to do it. What are the bounds? We don't have any clarity still,

Starting point is 01:15:38 even after five years, and libraries just been stifled out. The Web3 Foundation, although Pocod is claiming a different experience in working with the SEC. So I don't know if you read this tweet thread. It was sort of a mysterious tweet thread.

Starting point is 01:15:56 It was weird. It was weird. I didn't really understand it. Web3 Foundation, this is Pocod. The foundation that they got the Pocodot project announces Pocodot's native token dot has morphed and is software, not a security. They're announcing that their native token dot has morphed and is software, not a security. They're announcing that it's not a security. It's just like you can do that.

Starting point is 01:16:20 I am not a criminal. This is not a security. You could just do that. And so I was like, okay, there must be something here. I actually read the post. and the post doesn't say very much more, David. It basically says they took Gary Gensler up on his invitation of come in and talk to us. And after three years of going in and talking to the SEC,

Starting point is 01:16:44 now they're not a security. Wait, Gary Gensler's been around for three years? I don't know. Whoever is. Jay Clayton, whoever was previous to Gary Gensler. And I don't know that that's how it works. Like there's no kind of letter produced. you just it's just the comment and talk to us.

Starting point is 01:17:00 So somebody went through the dark forest of talking with the SEC and on the other side we get this announcement that they are not a security and we don't have any sort of details as to that. No corroboration with SECC is saying.

Starting point is 01:17:13 There's just like complete black box between those two steps. Right and there's not getting clarity. There's not even the confirmation from the SEC that this is. There's just a post that says we're not a security from the project itself.

Starting point is 01:17:26 Well actually you know maybe this is a little bit the 4D chess. If they are announcing that they have worked with the SEC and they are not a security and the SEC is like, uh, no you're not. We didn't say that. Well, are they like forcing them into giving them clarity? I don't know. It's like me first. Not it. It's that kind of thing. Not it. I literally think that's what's happening because there's nothing substantiating this from the SEC, no evidence produced, just that they came in and talked and now suddenly they're not a security. They're just software.

Starting point is 01:17:58 Fantastic. Wonderful. UK Bank, Santander will block payments to crypto exchanges. Well, I will block payments to Santander. That's the headline. I don't know that they care, David, but yeah, we'll do it we can. Not going to make it. I don't know how banks could do this over the long run. This is cool on the release of side with Zirion cooking up.

Starting point is 01:18:19 Zirion prepares to take on Metamask with an in-browser wallet. Somebody who has been suffering the Ledger Metamask Chrome just, Bermuda Triangle. You still have problems with that? I don't know how, dude. New computer. I have my laptop. Are you on Windows?

Starting point is 01:18:36 Well, I'm on Windows now, but it was broken before I was on Windows. I know. It was for a while, and then it got fixed. I've updated, I've updated Metamask. I've updated Chrome.

Starting point is 01:18:45 I got a, I built a brand new computer. I've updated the firmware on my ledger, and I still can't use Chrome. Different browser? I use Firefox. Now, yes. Yeah.

Starting point is 01:18:55 One of those two will eventually work. Yeah. Anyways, Azirion, please fix. Congratulations on the release. Do you know Wallet Connect is trying to fix that too? Yeah, Wallet Connect to raise $12.5 million in an ecosystem round aimed at driving the next evolution of their growth. Congratulations on the raise from Wallet Connect. Is this a weird week to tell people to get a job in crypto?

Starting point is 01:19:16 I don't think so, just because we do it every single week. All right, this is our weekly reminder to tell you to get a job in the crypto. David's not in the dancing mood, okay? And I just don't dance. No one wants to see that. So I'm just going to read a few things out at you. But David, you've got to be excited about the scriptwriter. That is the number one position.

Starting point is 01:19:34 That's going to be a fun job if you want to work with me. Swell Network is hiring smart contract engineer as well. This is a staking provider. Swell Network, a senior front end engineer, swell network, a senior back end engineer. Uniswop Labs, developer relations, Uniswop Labs, a senior front end engineer, some NFT engineers from Uniswap as well. Uniswop just keeps hiring. Open hedge optimism. Swell and optimism just are crushing it on the jobs.

Starting point is 01:20:00 Look, this is the hottest job board on the planet, I think, because these are all companies I would love to work for. You know, all of those people that got laid off from Silicon Valley? You can go check out this. Yeah, they should go check out the drawback. Yeah, absolutely. All right, guys, we will be right back with some more takes from around crypto and also talk about what we're bullish on,

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Starting point is 01:22:12 With Arbitrum, experience Web3 development the way it was meant to be. Secure, fast, cheap, and friction-free. All right, guys, we are back. Didn't get a chance to go through the questions to the nation. So I think I'm just going to ask a question that's probably on everyone's mind in bankless right now, which is, is crypto dead? Is crypto dead? People are saying that the collapse of FDX is proving that there's nothing really there in crypto, that it's dead, that it's dying, that's not ready for mainstream, that it never will be. Once again, crypto, is it dead, David? What do you think? the whole point of crypto is that it cannot die that is why we're here you know you know ryan

Starting point is 01:22:56 that i just love the common the intersection of like nature and crypto systems crypto economic systems and that's why i'm here if there wasn't this property of anti-fragility in these crypto systems that i wouldn't be here the whole point is that this biomimicry of the crypto world means that it cannot die it can take a punch it can take a bullet It can take 10 bullets. It can get its head chopped off and it will always come back if you just give it enough time. FTX, Sam Bankman-Fried is not crypto. The reason why Bitcoin, Ether, some of these Uniswap, these things cannot die.

Starting point is 01:23:34 That's the point. People may forget about them, but eventually they will return, as they always do, because these are anti-fragile systems. And if you are anti-fragile, you will always come back. it is inevitable that crypto takes over. It's inevitable that ether goes up in price so long as Ethereum gets built upon. And so crypto cannot die.

Starting point is 01:23:57 That's why we are here. Again, let's get some grit here. I mean, do you really think that someone by the name of Sam Bankman-Free, he literally had bank in his name and we gave him billions of dollars? What were we doing? Do you think we're going to let Sam Bankman-Free kill crypto? He can't kill crypto.

Starting point is 01:24:17 No one has the power to kill crypto. Not on our watch. Yeah. I mean, I think the answer, as it has been in the beginning for this industry, is return to these values of defy, Ethereum, and going bankless. Let's get to some takes this week, David. This one from Hunter, Hunter Horsley. He says this, the future of the crypto industry is two paths.

Starting point is 01:24:38 Number one, onshore regulated U.S. platforms and firms, or number two, fully decentralized. Investors have lost trust for the in-between. Love it. The whole C-D-Fi thing. C-D-Fi? Yeah, get the hell out of here. Remember this whole like blend of like, yeah, we could have a blockchain, but it's like fintech.

Starting point is 01:24:56 It's like, it's the space in the middle that is just ripping shreds. And I think that's what that. My take was like the FinTech bro or the finance bro era of crypto is over. I feel like that's what we got a lot of the last couple years. Get back to being cypherpunks. Cyphur puns or you go full bank, one or the other. Cyphepunk or bank. Yes.

Starting point is 01:25:15 And this fits. into my model of if you can be regulated, you ought to be regulated. If you can't be regulated, that means you're fully decentralized and you are regulated by code, which is the whole, again, the point of why we're here. This is some context for us. The worst events in crypto history, the Mount Gox hack 2014, the Dow hack, 2016, the Terra Luna collapse, 2022. FDX sells to Binance, 2022, three arrows capital collapse. 2022, of course, FDX didn't sell the Binance, but the FDX collapse will call it. Three of the worst events in that list in crypto happened this year.

Starting point is 01:25:55 If you survived this year, you've earned your stripes. Yeah. Yeah, this actually really makes me reconsider like last bear market was bad because we all ran out of money, but this bare market is bad because everyone. We ran out of legitimacy. Yeah, we ran out of legitimacy. Yeah. I, yeah.

Starting point is 01:26:13 I think at the end of this tweet I really, really like, if you survived this year, you've earned your stripes. Oh, definitely. I remember, I think it was when, I think it was like 2020-ish, early 2020, where somebody called me an OG for the first time, a crypto OG. Yeah. And I got into crypto in 2017.

Starting point is 01:26:30 It's because you survived it. I didn't feel like an OG, but somebody called me an OG in 2020, and then more people started calling me OGs and more people started calling me an OG. I mean, if you got in in crypto, in, like maybe early 2020, I think your time to start being considered an OG is pretty damn soon here. You've earned it. If you're through here on the other side, I think that this bear market is no less harsh than the 2018 bear market.

Starting point is 01:26:57 The 2018 was harsh because we all ran out of money, but we didn't get rug pulled. We didn't get scammed. We didn't have these collapses. We were just poor. And now, like, many of us did stupid things without. ICOs. Yes. Yeah. This, making it through the gamut of this bear market, I think, was maybe minimum twice as hard. You're going to feel great on the other side. Let me just tell you. You're going to deserve the hell out of it. Having been through it, you're going to feel great.

Starting point is 01:27:27 This is a take from you, David. I'm going to read it. The sad part is, this week's events proved why we need defy, but the defy brand has lost meaning. Luna, Sesta, Cronier, farming, old-school defy is the bright shining star keeping me going uniswap die rye aveh nosis but we don't even have a name for it david is sad you have been sad this episode david that's not like you you're super like so um defy as a brand yeah we've lost our brand man it's been diluted this is in uh came out of an inspiration from conversation with fatalic i was having in in telegram so actually this is basically Patellix take, but he didn't tweet it, so I did. But yeah, man, like, what do we even call, like, the good stuff?

Starting point is 01:28:13 Because, like, even the DeFi brand, like, Web 3, no one takes that name seriously anymore. Defi is now associated with scams for the outside world. Like, what do we call the good stuff? What do we call the protocols that are actually anti-fragile? Like, we don't even have a name for that. Or even our name has been stolen from us. Well, we don't.

Starting point is 01:28:32 I mean, but this has happened to other names in the past, like, blockchain. You remember blockchain used to mean something And then it was enterprise blockchain And then it got kind of diluted and stupid But yeah, it pains me the most, I think, To lose the term defy Remember when we originally wanted to call this whole thing Open Finance?

Starting point is 01:28:51 Op-fi, open-fi Never stuck. I don't know about that. Maybe bankless finance. Maybe there's a future for that. Maybe we just, yeah, we just call it bankless. We'll just do that. We'll do it.

Starting point is 01:29:03 See if anyone else does. People do. This is another take. Thank God, Gary Gensler, chose to protect us from Checks notes. Kim Kardashian. Woo! I feel so protected.

Starting point is 01:29:15 Gary. What's the background on this? I mean, there was a settlement with Kim Kardashian for pumping a token. For pumping a security, and then they charge Kim Kardashian, and then Gary Gensler went on the speaking tour to say, hey, we got Kim Kardashian for promoting security. Got her.

Starting point is 01:29:31 Got the bad guy. Meanwhile, I'm going to go meet with Sam Bankman, freed for lunch. $8 billion in the hole later. Very sad. Although, to be fair to Gary, a lot of us miss that one. But it's, okay, it's not our job. It's his job.

Starting point is 01:29:46 That's his job. All right. All right. All right. Can you find something to be bullish on? Got to ask you that question as we do every week. What do you bullish on? So, Ryan, I bottom ticked ether so far is what I'm bullish on.

Starting point is 01:30:00 So I don't, people don't know the trading vernacular. What's bottom ticking me and Dave? David. Are you, is that you asking that? I know what, come on, I know what bottom picking is. So I set, I set two limit orders, one at 1150 ether and one at 1075. I think the bottom of Heath was like $1038, $1,038. And so my buys went through like while I was sleeping. I don't usually set limit orders. I usually just hit market buy. But I had some cash. But I usually used Coinbase, which I don't usually do. But I usually use Gemini, but this time I use Coinbase for reasons.

Starting point is 01:30:36 And I just feel really good because it's up since then. And so I just feel good about buying at least what is a local bottom. And let me tell you, if I had bought like two days ago and then it dumped, I'd be feeling way worse. But I'm just bullish on ticking the bottom. I've ticked the bottom pretty well so far. You must believe in the future of this whole ecosystem. You're still buying ETH at these prices.

Starting point is 01:30:58 Yeah. Yeah, it's the only thing I really believe in, man. ETH is still the... the asset you return to? Yes. Is this kind of what the big Bitcoin maximalist felt in the aftermath of 2018, 2019, where they're just like, everything is crap? Stop venturing out.

Starting point is 01:31:14 Stop going to the frontier. Just stick with the thing you know is going to work. Rebuild our base. Go back to the core. Let's go back to the base. ETH is ultrasound money. I bought them ticked it. I'm not for you about that.

Starting point is 01:31:27 I'll just remind people, bought them so far. Bottom tick so far. Well, I bought 897. during the Alameda crash, or it's not the Alameda, I bought 897 during the Three Oro's Capital crash, and then I bought 1075 to add the Alameda FTX crash. I actually think that like everyone's worried about contagion in the future. Like I'm not one to call bottoms except so far.

Starting point is 01:31:52 The last time you are calling bottoms with your buys. The three arrows capital, the worst, when everyone was freaking out about three arrows capital, about oh, there's going to be so much more contagion in the future, that was actually the moment to buy. And that's what people are saying right now. There's going to be so much more contagion. We'll have to see how bad the contagion is for Alameda and FTX.

Starting point is 01:32:13 That's what I bought. And I'm feeling good about it. That's what I'm bullish on. I'm still waiting for my triple digits, to be honest, but may not get there. You may not get there. All right. So if that's not what you're bullish on, then what are you bullish on? David, I'm bullish on the bankless thesis.

Starting point is 01:32:29 I, you know, I think it's just really serious. struck me that crypto has learned through 2022, that it can't leave its destiny in the hands of the banks of a bunch of centralized bankers. And I think we veered into that. It's just like there's something very easy about solutions like FTX. Someone takes custody of your keys and the user experiences better. There's no gas fees. And there's someone with a suit responsible for it, willing to go in front of Congress. There's something very settling about this, right? And we did settle for it. We settled for centralized exchanges. And that's been the problem. But I feel like the bankless thesis has held really strong. Like, we have to rebuild the future of crypto, not on centralized

Starting point is 01:33:20 exchanges. I mean, like, we could never build them on centralized exchange. We had to rebuild the future on defy. So it kind of feel pretty good about the bankless thesis coming out of this. It's just like crypto banks are not going to solve our problems. They're going to cause more problems. It's interesting, you know, a lot of our conversation in the past few months before this debacle, it's been about censorship resistance. And that is one of the benefits of decentralization, right? Censorship resistance and freedom, and that's super important. But here, this was not a failure of, like, Sam was not censoring anyone's transactions. He was stealing the money.

Starting point is 01:33:57 Okay? Like he was taking depositors funds and doing other things with them. It was a trusted intermediary problem. It was a banker problem. We got screwed by the bankers again, David. Okay? This is like 2008. This is like every sort of banker crisis that we've seen where we've been screwed by the bankers.

Starting point is 01:34:17 This is why this is not a problem with defy. It's not a problem with Ethereum. Like, defy didn't do this. Right. Defi solves this problem, and yet here we are in this place. And this is why I understand your kind of your sadness and frustration part of this episode is just like, didn't we already know this? Aren't we better than this? Aren't we supposed to be the ones who aren't trusting the Sandbankan Freeds of the world?

Starting point is 01:34:41 So anyway, I do feel like the bankless thesis has kind of held up even while crypto is suffering. And we're probably going to rebuild this entire space on top of that thesis. And this is why I am ultimately optimistic and bullish that we come out, that we come out stronger. And I'm hopeful, listener, that if you lost some money this week, if you're affected by FTX, I'm sorry. You know, that's really tough. We said in other times this has happened in the past, take some time with family, go for a jog, clear your head, take a break, you step away for a bit. We hope you come back. because I think that people in crypto need veterans with the type of experience that you've just received.

Starting point is 01:35:28 If you didn't have any funds in FTX, you saw what happened to those around you. And crypto needs people with that experience. This is how we make a stronger layer zero for next time. Because who's going to warn the class of 2025 or 2026 when they go do something stupid? This is the only reason David and I know enough to kind of talk about this, going bankless and about. it's just because we've seen it before. And so one generation, it's their responsibility to teach the next generation. So you're developing your battle scars, your veteran skills, and yeah, we need you here,

Starting point is 01:36:04 and we need you to push the bankless thesis forward. Yeah. That's the cool thing about crypto is that it takes about three years to become a veteran. There's not many industries where usually you need to be 30 years in experience in something. be a veteran. But like this is how human wisdom is passed down from village elders to the young folk. And we actually have the privilege in crypto where it only takes three years to become like a village elder who can be wise. Because every year is like 10. I feel like this week was like

Starting point is 01:36:35 10 years for me, dude. I'm exhausted. I'm exhausted, man. I've rarely been tired. Yeah. All right, let's end it with the meme of the week. What are we looking at, David? Meme of the week. we are looking at FTX Arena in Miami, but it's actually a spirit Halloween store. Oh, my God, dude. Because that's where, that's where rundown buildings go to die. You got a laugh or you'd cry. Guys, we hope you've enjoyed bankless this week. It's been a crazy week, and we have a moment of Zen for you, so stick around for that.

Starting point is 01:37:10 But, of course, as always, risk and disclaimers, crypto is risky. You could lose what you put in, but we're headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot. Last thing that I'll say is if you look at what precipitated some of the 2008 financial crisis, you saw a number of bilateral bespoke non-reported transactions happening between financial counterparties, which then got repackaged and re-leveraged again and again and again,

Starting point is 01:37:36 such that no one knew how much risk was in that system until it all fell apart. If you compare that to what happens on FTCS or other major cryptocurrency venues today, There is complete transparency about the full open interest. There is complete transparency out the positions that are held. There is a robust, robust, consistent risk framework applied. And we're excited to work with the CFTC on our U.S. license and regulated venue. Hey, we hope you enjoyed the video. If you did, head over to Bankless HQ right now to develop your crypto investing skills

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