Bankless - ROLLUP: Tik Tok NFTs | Facebook Goes Down | Société Générale & MakerDAO | Ethereum 2.0 Merge Updates

Starting point is 00:00:07 Hey, Bankless Nation, it is the first week of October. It's Friday morning. Do you know what that means, David? Tell me. I do. It is the Friday morning, Bankless weekly roll-up, recapping the whole week of crypto inside of hopefully an hour and a half. Maybe we can get it down to an hour and 15 minutes. Ryan just got up because he knows we can't. But we'll do our best. I have faith in us. There's so much to talk about this week, though, David. We're going to talk about some of the main events of the week. But firstly, man, how are you doing? You doing okay? Doing pretty good. I'm like of that Cryptopunk in your background. At first, it was like pretty big and I'm like, do I stare at David's face or do I stare at the Cryptopunk?

Starting point is 00:00:41 And I've got the same face. It's the same person, really, right? It's the same person, yeah. It's just the metaversal representation of David Hoffman. I can't wait until like he starts speaking. Does he talk to you at nights, David? Hey, when Zoom can give the filters and then we can just upload our own faces, then yeah, you'll talk to the Cryptopunk.

Starting point is 00:01:00 It's perfect. Still waiting for you to get your turtle back on your wall, but for some reason, you haven't done that yet. I really should. I just haven't had time, but, you know, Turtles are slow. That's what they do. Don't say that. Okay, no sheller.

Starting point is 00:01:13 All right. Well, I'll stop with the insults. Let's keep going. Main events of the week, guys, TikTok is coming to Ethereum by way of NFTs. That's huge. Also, banks are coming to defy now. There's a post from Society General on the Maker Dow governance forms where they want to inject 20 million collateral into Maker.

Starting point is 00:01:32 Facebook was down this week as well, but not Web3. Web 3 cannot go. down. David, we've got two other things. What else is hot this week? Yeah, this is the week where a lot of the Ethereum community figured out how to pitch this whole modular blockchain thing, which is basically roll-ups, but really put it in a way that's really distillable and understandable in my mind that is in stark contrast with monolithic blockchains, whereas some blockchains, trying to do everything all at once. The modular approach separates out the consensus layer,

Starting point is 00:02:05 such as proof of stake and all the nodes talking to each other, and the execution layer, which are roll-ups. And so that is a big theme going around in the Ethereum community this week that we are going to talk about. And also, the merge. The merge is happening. We have the first ever hard fork coming for the beacon chain. So you've got to update your nodes.

Starting point is 00:02:23 And this is the hard fork that is going to enable the merge to happen. So the merge is coming. Got some updates around that as well. there's five things for you. You're going to have to wait to the news section before we give those to you. But that's a reason to tune in. Of course, tune in to the end. You get the meme of the week. And if you're on YouTube, the moment of Zen. There's two this week. There's two the memes, plural of the week. But first, a couple announcements from the bankless community, Bankless Nation. The first is, have you RSVPed for the Bankless Dow season two launch? That is coming up.

Starting point is 00:02:53 I believe that's 11 Eastern on Friday. So if you're listening to this Friday morning, You got a couple hours to go check that out. That's going to be live on Twitter spaces. Season 2s are always better than season 1s. And season 1 was awesome for the bankless Dow. I think what they're going to do is recap a whole bunch of the things that happened in season one, talk about planning for season 2. David, my favorite part about this meeting is like, I have no idea what's in store.

Starting point is 00:03:17 Like this bankless Dow thing. Yeah. I mean, you and I are kind of opening it up, but the community has really taken charge for this and what a community it is. So if you want to understand what's happening. happening in the Bankless Dow. Tune into this quarterly meeting where they unveil season two. There will be a link in the show notes to that or just check out Bankless Dow on Twitter.

Starting point is 00:03:37 I'm sure you could see it there. Also, David, got to talk about our sponsor and friends at Xerion. And to do that, I'm going to open up this little portfolio, this little NFT portfolio. I'm going to take a look at these Fidenza rocks. No, don't look at the Fidenza Rock. I was literally opening up my ledger in OpenCity Today to try and see. send these Fidenza rocks to the burner address. You're shamed of them.

Starting point is 00:04:01 You're shamed of your NFTs, sir. Yeah, I thought they, like, oh, Fidenza's rocks? Like, what happens when you combine Fidenza rocks? People are just going to buy, though. If they've bought rocks, they'll buy Fidenza rocks. And it turns out it's a scam. I think it's a scam. Well, I don't really know.

Starting point is 00:04:16 Anyways, I bought a bunch of Fidense rocks. I want to send them to the burner address, the X-Zer000-0-0 address. It cost me $50 per rock to do it. And I bought like eight of them. Anyways, open, excuse me, Zirion with our NFT explorer can show you all of my mistakes that I pot with NFTs and, and also the wins as well. There's my 3D pudgy penguin, which I actually do like. And somebody sent me- I know what your favorite is.

Starting point is 00:04:44 What's your second favorite NFT in Zirion here? It's got to be one of my, who, one of those flowers. The flowers as a whole are pretty cool. No, it's got to be, it's got to be that black and white one. Not the one. Oh, this one. No, no, the other black and white one. Oh, this one. White on black.

Starting point is 00:05:01 The inverted black and white. Okay. That's one of my favorites as well, but also the pudgy penguins, man, because they're this, the goddamn cutest all the way down to the movie. All the way, wait. Okay, it's not the 3D one. Yeah, the 3D one is an artist, an artist, an artist, rendition of, uh, Pudgy P penguin. Cowboy hat.

Starting point is 00:05:17 Yeah, so we got Farmer Penguin and then we also got, uh, socialite penguin. Well, you know what? The next thing we need to do. So you could view all of this in Zeran, of course. Zerana has like a fantastic NFT viewer now. They're adding more in the future. You have the ability to like exchange NFTs as well.

Starting point is 00:05:34 Also, you could put them on your Apple Watch face. Like, check this out. I don't have, my wife has an Apple Watch. I don't have an Apple Watch or I would be doing this with my Turtle right now, David, because I'm not shellless like you. Yeah, you don't. These are all ifs. What could you do with your turtle if you actually cared about it?

Starting point is 00:05:52 Someday, sir. I'll surprise you on a roll up someday. Anyway, here. Here's what you can do with Xerion is in a few simple taps. You can add that to your Apple Watch Face and flex in real life with your NFT. Super cool stuff they are adding there. You can check that out, zirion.io slash bankless and find out more about that. But guys, the first thing we get to on every weekly roll up is markets. Let's start with that.

Starting point is 00:06:18 We've got to start with Bitcoin. Bitcoin is still the top dog. So what's Bitcoin doing this week? Yeah, started the week at $43,000, which was also the low for the week, hit a high earlier, I think yesterday, at $55,000. We are currently clocking in at $54,000 for Bitcoin. So overall, up 30% on the week. That's a hot week for Bitcoin. We haven't seen that kind of jump in a while, like 55K.

Starting point is 00:06:42 That's so slouch. Yeah. Good job, Bitcoin. Back over $1 trillion market cap. So Bitcoiners excited about that. I'm excited about that. that's fantastic. I think it's great for the crypto market in general. What's Eif been doing this week too? Oh, I can't show you. Let me pull up. Eat started a week at $3,000, which like Bitcoin

Starting point is 00:07:01 was also the low for the week, hit a high of $3,620. And we are currently clocking in at $3,605 overall up 25% on the week. Also a good week for Eith. Okay. Bitcoin to all time high first or Eith to all time high first. What's your bet? I mean, gosh, I would, if Eth hit all time high first, I would be so happy. Okay, Bitcoin to 100K or ETH to 10K, which happens first? Oh. And that's only a two, that's less than a 2x for Bitcoin and that's almost a 3x for Heath.

Starting point is 00:07:34 So like, you got to go with common sense. It's a Bitcoin to 100K first. I'm going to take ether, just because. Do we want to turn this into a bet bet, or you're, or you're, I bet you a turtle, sir? I like the actual value, sir. Oh, my God. Oh, shell minimalism will not survive, sir.

Starting point is 00:07:55 All right, let's get to the next one. Eith and Bitcoin, the ratio. How are we checking out on the ratio? We were down, looks like earlier in the week. Let me scroll to the monthly here. Give you a look at that. Ratio is down. Now it's back up a little bit, but still not close to, I guess, the three-month high.

Starting point is 00:08:12 Yeah, I think the market is pricing in Bitcoin at 100K before Eth at 10K. So, I mean, historically, Bitcoin always goes for. First, the crypto market is generally like wait for Bitcoin to do things so Bitcoin can signal the all clear. That's why I really, really want Ether to hit all-time highs first because that, for once, would actually reverse that trend. But it looks like that has not, that trend has not been reversed yet. So we are currently clocking in at 0.0667, eth per BTC.

Starting point is 00:08:40 You know the other thing, David, I think they're pricing in is Bitcoin ETF. Everyone's been talking about October, okay? Van Eck said to the SEC, hey, we've got two fantastic. Bitcoin ETFs in, there should be no problems with this. Like it's the fifth time they've submitted these ETFs to the SEC. These are the golden ones. We hope you will approve both, right? And we've been waiting for that olive branch for Mr. Gary Gensler to come to crypto. I still think that's coming. And a lot of people think it's going to happen this year. Maybe that's why Bitcoin is making it run. There was also that report. I can't remember who, but Coin Metrics was partnered with it about how

Starting point is 00:09:19 onshore futures markets are actually leading the spot markets, which tells the SEC that price discovery for Bitcoin is happening on U.S. regulated exchanges, which was basically the big reason why the stated reason as to why the ETF was not approved. And so they, I think I can't remember who helped with the report. But overall, they proved that Bitcoin price discovery happens on U.S. regulated futures exchanges like the CME. Yeah, there should be no more reasons. If you say no now, you're saying it for different reasons than the previously stated reasons.

Starting point is 00:09:55 Okay, let's talk about the total locked value in DFI. We're up into the 90s. That's 90 billion, 92 billion as of the time of recording. Still haven't hit 100 billion, but look, man. We are within striking distance. One good week away of price action or overall just more time because I bet you if you hit that. You never know. Yeah, it could be a day.

Starting point is 00:10:17 I bet you if you hit that ETH link, so it's actually ETH deposit into DFI, which does a good job of separating away price movements from value locked, right? So if we just denominate in ETH, we don't get the ETH price volatility to actually tell us how much values locked in DFI. And you can also see that ETH locked in DFI is about to break an all-time high if the trend continues. So we actually don't need ETH to go up in price to break that 10, was it, $10 billion? Yeah, 100 billion locked in D5. We just need more time. And also prices to not go down. Cue up your tweets, guys.

Starting point is 00:10:51 Get ready. We're celebrating 100 billion. I scheduled for Tuesday. Just take the chance. Yeah, just do it. And you'll forget about it. And you'll tweet it out. And people would be like,

Starting point is 00:10:58 WTF, David. It's not 100 billion. All right. DPI, this is the DFI pulse index, a great measure of DFI tokens on Ethereum. So how are we looking on the week? Yeah, start of the week at $300 per DPI, which was also the low,

Starting point is 00:11:14 hit a high, $360. Earlier in the week, fell down a little bit to where we are currently at $334. So overall up 9.5% on the week. Here's the status chart in crypto, David. You ready for it? DPI to ETH ratio. We are down to 0.093 at this point in time.

Starting point is 00:11:33 And it's creeping down. 1.13, 0.12. It's history. Who knows? We'll never know what your original call was, right? I think it was 0.08. Yeah, maybe. You call.

Starting point is 00:11:44 We're going down. This means that it is not DFI C. It is more each season than it is D5 season when we're down on the ratio like this. Only matter of time, though. It's going to reverse one day. It's just not right now. I will blame NFTs for this because one of the reasons, in my opinion, why this chart is the way that it is, why DFI tokens just can't catch a bid, is because all the attention is on NFTs. Like, defy tokens are boring.

Starting point is 00:12:09 They're now, they're now like the boomer side of crypto where NFTs are like the cool zoomer things. It's so funny because both of the. you know, NFTs and defy, good for each other, best friends. Like, you know, they should be married. They're, like, they're going to do well for each other long term, but definitely the narrative attention is on NFTs. I would also say alternative layer ones, maybe like alternative layer ones, defy things, you know? So that's garnered some attention to, but let's check this out.

Starting point is 00:12:37 This is, this is, Ethereum strikes back, I think, when you see layer two beat, which is a measure of total locked value in layer twos, and up 25% on the week, 26%. Is that what that is? Pretty cool. Very cool. It's nice to see because with that big, big spike that you see about three weeks ago, that was Arbitrum launching.

Starting point is 00:12:58 And then also that whole Nyon cat coin also sucking in TVL. That's gone now. And so we're almost back up to the all-time high of like 0.36 billion in layer two's without the whole meme coin sucking in a bunch of money, right? It's much more sustainable. Layer 2B added this, which I absolutely love, which kind of shows the risks of these various layer 2s, at least at the state that they're in now. So some of them are upgradable.

Starting point is 00:13:24 Some of them are still kind of in like a beta type phase. And you can view that on layer 2B as well, which I absolutely love. But looking primed, man, this is going to be the... It looks so good. It looks so good. Yeah, this is going to be the chart. This is like the new total log value. This is like the new D5 pulse type measure, which is...

Starting point is 00:13:45 like how much is locked in layer two. And this is going to go up and to the right, the same way total locked value in defy did. That's, I think, both of our predictions. I'll say that for you, too, David, because I know you agree. EIP 1559, burn in ETH every day. We're burning more at Eath. I thought this was super cool, though. There's a report that Coinbase put out in their blog that said, to date, Coinbase, because obviously they have to settle transactions on Ethereum as well. They shoot it in big batches. And they pay for it. And they charge users to. If you ever withdraw from Coinbase, you know, it might be like a $5 gas fee or something for your token, whatever. Anyway, they have burned over 15,000 ETH to date. Thank you very much, Coinbase.

Starting point is 00:14:29 We appreciate your contribution. Love you guys. Very good. EIP 1559, I said, turns transaction fees into economic security. I still don't think people are bullish enough on EIP 1559. David, It happened in August. And now it's just like a slow burn. It's a slow burn, right? And it continues to burn every day. Coinbase also said, you know, we're not just doing this to burn the ETH. We're also saving 9% on gas fees because of EIP 1559 versus the legacy transactions.

Starting point is 00:15:02 No sacrifice in confirmation time. So it wasn't any slower to confirm to Ethereum for all. And they're burning 250 ETH per day. Every exchange is doing this. centralized exchanges, they're all contributing to the economic security of Ethereum. Used to call some of these centralized exchanges like, I guess like parasitic, right? Because they were using Ethereum security without actually like paying for it. No longer.

Starting point is 00:15:27 They're paying for it. They're paying their taxes too, just like every other citizen of Ethereum. Very cool to see. There's also a nice little history lesson in this. The whole saving 9% on gas fees using EIP 1559, let's back up all the way to, I think, Eric Conner's post where he actually introduced EIP 1559 and talked about how the whole auction, block space auction model, which is the pre-EIP 1559 model, as a lot of cognitive overhead to users, transacting, they actually have to guess the right way number.

Starting point is 00:15:59 And they would just like slap in a way number that would like be just like probably way too high. Yeah. And the overall like ended up just because of the inefficiencies of the auction model, people would end to ultimately pay more than they actually needed to. And so the, a narrative that arose around EIP for 1-559 was that it would help just like reduce gas fees. And then that narrative caught on a little bit too much.

Starting point is 00:16:21 And then there was some resistance thrown on like four or five months ago. It was like, hey, EIP's 1-559. It's not going to do anything to gas fees because all it does is just change how the fees are collected. It doesn't actually lower the gas fees. And then the Ethereum community had to back up. It's like, whoa, whoa, whoa, yep, he 1-559 doesn't do anything for gas fees like directly.

Starting point is 00:16:39 And so the Ethereum community had to walk back. So like, hey, EIP-159, not going to fix gas fees, right? And remember, EIP-159 was actually introduced when gray prices were like one. And so like gas feeds weren't an issue like they are now then. Yeah. But now on the other side of things, now that EIP-1559 is here, we actually can see that it is reducing gas fees by reducing the need to like have informed estimations about what the fees need to be paid.

Starting point is 00:17:07 And instead, you could just play the number. And, like, reducing that cognitive load for Coinbase has reduced gas fees by 9%, which is not insignificant. Yeah. Another case of the truth being somewhat in the middle, right? It, you know, it did end up to reduce gas fees. Just not, like, eliminate them. I think people wanted, like, zero gas fees on Ethereum. That was never the promise.

Starting point is 00:17:27 But, you know, the promise was some reduction. We are seeing that. This is cool. This is not reducing. This is only increasing up into the right. The past 12 months, Ethereum settled 6.2 trillion with a T in transactions. That's the value of all EF transactions. That's the value of all stable coin transactions.

Starting point is 00:17:48 That does not include other ERC20s as far as I know. That's just stable coins and ether the asset. Take a look at this chart, David. From $1.2 trillion in 2020 to $6.2 trillion. year to date, years not even over, in 2021. And that's all settled on Ethereum, right? Like, how is the world not talking about this? This has got to be like, it's bigger than Bitcoin now, include all those stable points.

Starting point is 00:18:23 The largest settlement layer in the world, open source, it's permissionless. It wasn't created by large corporations, created by a decentralized community. and people are still sleeping on this. I don't get it, man. And this is just currency transfers. This is just ether and stable coins. There's so much other value that's also settled on Ethereum. NFTs being a big one, also defy tokens.

Starting point is 00:18:48 So this is actually just a fraction of the total amount. Just a fraction. Let me remind you what that means, right? It's like, how hard is it for me to you live in Switzerland? I live in the U.S. I want to get you some money, right? My God. I have to go to, like, in the U.S.,

Starting point is 00:19:03 I have to go to a bank account in person, present my ID, talk to a bank teller who asks me where I got my money, where's it going, what's the purpose? I fill out forms. I fill out documentation. I submit my ID. Using a pen and paper. They charge me $50, maybe $70. And they tell me to wait like a day. And then, I mean, I think actually international wires can take like three to five days.

Starting point is 00:19:28 Right. It's okay. The difference is with this, I don't have. have any central intermediaries, right? I click a few buttons. I have my self-sovereign private key. Don't even have to get up off of your chair. Yeah. And this is any amount. Any amount in the world, by the way. Like, that's what we're talking about here. Better settlement number. All right. Let's go on the next. Zapper. Zapper is, of course, a great way to see your DeFi portfolio. They've got a lot of ways to kind of zap in and out of protocols. Monthly active users,

Starting point is 00:20:01 640K up only super impressive uh looks like they were maybe like 20k or so January I can't see the the units on the chart here but I like the uh up 100 1,000 percent number they clearly just broke it like it didn't the number metric wasn't able to go high enough to illustrate how fast Zapper is growing yeah greater than 1,000 percent you can't tell you you broke our computers All right, guys, you know, it is the end of the quarter. It's the end of the third quarter. So I think maybe it's time to reflect and summarize some trends for what happened over the past three months. And coin metrics, I feel like, does a great job of this with data.

Starting point is 00:20:45 So past three months, what happened last quarter for to distill it all down and summarize it? One of the interesting things that happened was the rise of Eith Killers and alternative layer ones. I think this chart from Coinbase is sort of a great summary. They've got kind of two lines here. The first is ETH price. Sorry, Ethereum's gas fee price. It's mean gas fee price. The other is the price of Seoul, which has been kind of the darling,

Starting point is 00:21:15 Heath Killer, layer one. And you can kind of see the correlation. As Eith price goes up and we have these large spikes in Eith price, and everyone starts complaining, everyone's angry, narrative shifts, the eth is unscailable. Like, it'll never scale. We need more cheap block space than what happens. Well, alternative layer, layer ones,

Starting point is 00:21:38 Salana price goes up too. That was definitely a key theme of the year. I'm going to talk about the other two's, but any reflections on this, David? A, we've seen this before. Same pattern happened in EOS 2017. And like, yeah, the whole narrative is that like, do I say it? Sloppy Ethereum, sloppy seconds.

Starting point is 00:21:56 It's our show, Sarah. Oh, yeah, sweet. We're the chain that captures Ethereum sloppy seconds. Nice. Yeah. Well, there you go. So that was the first. I guess, ETH killer season, alternative layer one season, if you prefer that term.

Starting point is 00:22:11 The second was JPEG summer. We thought we were going to get more layer two summer. We didn't. We got JPEG summer. And here's some interesting graphs that coin metric shows. Again, coin metrics pulling this directly from the blockchain, which is why I love it, right? All this is open transparent. You have the analytic skills.

Starting point is 00:22:29 You can be the data too. But this is ERC 721. That is an NFT, the amount of transfers per quarter. And you can see we're up to like 9 million from almost nothing. Right. Like 9 million units. 9 million NFTs transferred in the last quarter, whereas the quarter before that was like 2.5. And the quarter before that was 1.5.

Starting point is 00:22:51 A big difference this week. A huge difference this week. another NFT, I guess this is OpenC transaction volume. We just had Devin from the CEO of OpenC on the podcast. We talked about the insane numbers they're throwing out. So JPEG season was the second. And the third is the coming, the advent and the deployment of EIP 1559, of course, which we were just talking about.

Starting point is 00:23:15 You could see two graphics here, two graphs here. Total ETH burnt over 400K at this point in time, which we've been updating you on. interesting chart, though. ETH daily issuance, sometimes Ethereum, at least from a proof of work chain perspective, has actually had negative issuance. So I actually gone into like the ultrasound territory where it's deflationary rather than inflationary because we're burning more than the network is issuing. So pretty cool to see.

Starting point is 00:23:44 Those three things, I think. That's the summary for Q3 in my mind. Nice quarter of Ethereum. It's wrapping it up. Yeah. What's in store for Q4, David? You have any big, big bold predictions for us? I'm just going to wait and see.

Starting point is 00:23:57 Well, I think we're going to see even more ultrasoundness in ether. Like that definitely a downward trend of daily ETH issuance. Q4, God, do I say it? Defy tokens to make a comeback for, oh gosh, no, probably not. Probably more NFTs. More NFTs. More NFTs. Yeah.

Starting point is 00:24:15 I don't know if I have any predictions. My only prediction is I think Thanksgiving is going to be like really happy. I think by, you know, Christmas. crypto is going to be doing really well. I think this is going to be an up quarter for crypto. Isn't the holidays always generally a pretty bullish time for crypto? I think the seasonality. I think, yeah, Q4 is a good quarter.

Starting point is 00:24:36 I remember a lot of, you know, thanksgivings and, you know, holidays where family members are asking me about crypto because we've just had a like a big run up. And they're like, should I buy Cardano? Should I buy ripple? Okay. So since we're on the subject, this is something that frustrates me about being a crypto person. Sister, have a sister,

Starting point is 00:24:57 there's some sibling rivalry there. And she gets really frustrated when like I'm talking about crypto all the time. Except the problem is at like family gathering events or just greater. People ask you. Right. They ask me it like, oh, like, so I ask them like,

Starting point is 00:25:10 hey, what do you do for a living? And then they tell me some like normal job, which like, oh, I work for marketing for some like company. Like, okay, great, I already know everything you do. And then they ask me what I do. And I was like, oh, I work in crypto. And then they have of infinity questions. and then my sister comes over and like hears me talking about crypto.

Starting point is 00:25:27 She's like, oh, Dave's talking about crypto again. I'm like, they asked me. It wasn't my fault. They asked me. I'm just existing. Don't get mad. Yeah, yeah, that's the other thing. But the other thing I mean for me is like, if I really go on about crypto, I can't shut up.

Starting point is 00:25:41 Yeah. So I have to be intentional around. Like, the other thing is, I'm just like, for your family and friends, the information's out there. Like, this is public service right now. Go listen to Bankless. This is what we think about crypto. You always direct your family members here if they're really interested in diving in.

Starting point is 00:25:59 But they have to be really interested in diving in. Remember, tell them to start with episode 55. Episode 55. Is that our welcome to Bankless, 2021 edition? Yeah. Yeah. Well, the Welcome to Bankless episode that we made after we got good at podcasting, not before. Actually, David, go back to episode one.

Starting point is 00:26:17 It was pretty decent. I listened to it recently. It's pretty decent. We did okay on that. But 55, guys, is the real answer. All right, we are going to be back with the releases of the week and get to the news, TikTok, little gnaz, everything you need to know about crypto. But first, we want to thank the sponsors that made this episode possible.

Starting point is 00:26:36 Bankless is proud to be supported by Uniswap. Uniswap is a new paradigm in asset exchange infrastructure. Instead of a cumbersome order book system where trades are matched with other humans, Uniswap is an autonomous piece of software on Ethereum, which is what Ryan and I call a money robot. No human counterparties or centralized intermediaries, just autonomous code on Ethereum. Input the token you want to sell and receive the token you want to buy. Something brand new in the Uniswop ecosystem is the Uniswap grants program is now accepting applications for grants. We have been saying this for a while and we'll say it again. Dow's have money and they are in need of labor.

Starting point is 00:27:15 If you think that you have something to contribute to the Uniswap Dow, apply for a grant to Uniswap. Just look at the size of the Uniswap treasury. It's almost $3 billion. This mountain of capital is looking for labor. Do you have something of value to contribute to the Uniswap Dow? No matter how big or small your idea is, you can apply for a UniGrant at Unigrant.org and help steer Uniswap in the direction that you think it should go.

Starting point is 00:27:40 That's exactly what we did to get Uniswap to be a sponsor for Bankless, and you can do the same for your project. Thank you, Uniswap, for sponsoring bankless. The era of proof of stake is upon us. Proof of stake systems like Ethereum, Terra, and Solana allow the industry to move away from the hot, loud, and wasteful proof of work systems and return back to a cottage industry of individual stakers and individual validators. And that is what we need to make this industry stay decentralized.

Starting point is 00:28:06 Individuals must play their part in crypto network validation. And that is what Lido is here to do. Lido makes staking accessible to everyone at the click of a button. By delegating your stake to Lido's network of nodes, you can access the yield offered by proof-of-sake systems and claim your share of the network transaction rewards. Do you have 32-Eth and want to stake it to Ethereum, but running a node sounds intimidating? Or maybe you have less than 32-Eth, and you need to pool your Eth with others so you can access staking yields. Lido offers a solution for both.

Starting point is 00:28:37 Simply go to Lido.fI, choose which assets you want to stake, and deposit them to the Lido validating network. Lido is working to make sure proof of stake stays as decentralized as possible, and it's committed to decentralizing its own validating network to eventually become a completely permissionless protocol. So if you want to stake your ETH, Tara, or Seoul, and get liquidity on your stake, go to Lido.fI to get started. All right, guys, we are back with the fresh releases of the week. The first is this.

Starting point is 00:29:07 Axi Infinity is launching a decentralized exchange. Dave, that makes a lot of sense, right? I mean, they are a massive crypto gaming company, a lot of assets being traded back and forth. Massive economy, right? Yeah, they're the Axi Nation. It's like kind of a real nation, right? And now they're launching a decentralized exchange. So that just makes sense to me.

Starting point is 00:29:29 What's your take? Yeah, they needed this on the Ronin side chain, right? So if you were an Axi Nation economy participant and you needed to do some exchanging, you would have to go from the Ronin side chain to the main chain to do stuff on Uniswap. but that is inefficient. So Axy just is releasing their own decks on the Ronan side chain, which makes sense. Put the market where you live.

Starting point is 00:29:51 Nice. I bet the side chain will become a roll-up in the future, too. That's a prediction. I know we're going to talk about a bit more about like roll-up maximalism, I guess, in the future, modular blockchains as we hinted at. But let's wait for that. The next is this. Context is a new service that makes it easy to see what's happening on Web 3,

Starting point is 00:30:10 just went into beta, that's the tweet. What is it? It's like a social feed for NFTs, which is super cool. It's pretty basic right now, but what I love about this is you can actually click over to punkholders. And you can see all of the punk holders

Starting point is 00:30:28 what they're doing, what they've done recently. Yeah, what's their shenanigans. They're on-chain shenanigans. Yeah, so look at this. Pop Wonder, who's a punk holder. He just sold this Alpha Kitari NFT, for 0.15th.

Starting point is 00:30:43 He did that two minutes ago on OpenC and scroll down and see a whole bunch of NFT, sorry, crypto punk holders. I don't see David on here. It was a transaction if you try to sell your Fidenza rocks. I buy only. Yeah, you buy Fidenza rocks only. There's a turtle transaction for me somewhere, but we can't see it. Anyway, collectors, artists, friends with benefits, the idea of a social feed for

Starting point is 00:31:08 NFT holder. this is very much a Web 2 meets Web 3 kind of idea. And I'm all about it, man. I love this. This reminds me of like big funds or just investment firms that will use like satellite imagery to count cars in like Walmart parking lots. That's like a thing that happens in the legacy finance world. And so this is kind of the same thing.

Starting point is 00:31:29 It's like all right. Like let's look at all like what are all the Cryptopunk people buying? What are all the FWB members? What are they up to? It's just a little bit of just, you know, birds eye view. analytics of what certain communities are up to. And so it's a way to get some alpha. I just want one that should see what DC investors buying.

Starting point is 00:31:47 I'm like, it should give me an alert on my phone. Yeah. Thanks, DC. All right. Lido dashboard. So Lido like Fido, internet bond dashboard is kind of the theme.

Starting point is 00:31:58 But okay, so Lido, big, eth-saking. They're also a sponsor of the podcast. Thank you, Lido. But they have just released a reward history tab where you can kind of see how much reward you are earning on whatever asset you stake. This is ETH, how much you're earning on the ETH you stake, a 4.8% average APR at the moment. This is kind of cool, man.

Starting point is 00:32:23 This is what draws traditional finance in the space, right? Because like you have Bitcoin, which is an asset that hopefully goes up, but it's not a productive asset. It doesn't generate yield. You have ETH, which is also a store of value, but is also a productive asset. And you could see it right here on the dashboard. I think it's pretty neat to see. And glad Lido added this.

Starting point is 00:32:45 And one hammer that I've, or one drum that I've always been beating is the more and more metrics that we put towards these things and make these things more and more legitimate towards the people that don't understand them. It literally defines and adds color to what the hell is going on

Starting point is 00:32:59 in this whole Ethereum thing. And also just good user UX. So nice job Lido. Yeah, absolutely. This is pretty cool. Actually, Rinn Christensen just issued a post. It was all about clean money, David. We have a podcast episode about this bankless listeners where we go into all of the details. That is coming on Monday. We talk about clean money with Rune Christensen. We also talk about his thoughts on actually Ethereum maximism. That intrigues you. L1 maximalism. That also happens to be Ethereum. Yes. Fair. But this is a clean money post that he issued all about.

Starting point is 00:33:38 turning die into clean money. David, why don't you give us the TLDR of what he's talking about here. Yeah, so we saw society, Shenera, which we haven't covered yet in the weekly roll-up, we're about to, submit a governance proposal for Maker-Dow to accept some of their assets as collateral so they can get a loan. When we extrapolate this out, Maker-Dow can, is now as a credit facility, as a lending protocol, can give the ability to use their lending protocol to whomever they choose. Bruin is saying we should choose to allow people to use our protocol that are aligned with green climate activities, our green capital. And so Brun says, we should brand die as clean money, right? For example, Bitcoin, heavy proof of work, a lot of non-green funds won't buy Bitcoin because it's dirty.

Starting point is 00:34:30 It's like heavy, heavy, heavy energy consumption. Die can instead take the opposite route and brand itself as if you use a non-green fund. die, you are actually helping MakerDAO fight climate change by allowing to point their credit facility utility towards companies that are green and promoting green things. We've seen MakerDAO fund, I think, $20 million to help build a solar farm in New York. And overall, Maker Dow is a pool to express capital. And Roon is saying we should allow Maker Dow to focus its capital allocation powers towards entities that are building out a green future. And then by and large, giving the brand of dye being clean.

Starting point is 00:35:13 And so one of the best ways to help change the future is by lowering the difficulty or lowering the barriers to actually helping. And if that means that Maker Dow is making die, just using and holding and borrowing die as something that can help contribute towards fighting climate change, then they should totally do that. And that just lowers the barrier of helping fight climate. change to just using dye, which is a nice narrative to get behind. Yeah, it's definitely flipping the script on what mainstream thinks of crypto right now.

Starting point is 00:35:44 If you want the full extrapolation of Roon's thoughts on that, and if green crypto intrigues you, if the climate alpha, the idea of generating alpha from, you know, climate and investments in green technology intrigues you, then tune into that episode on Monday for sure. Also tune into this. This is a new newsletter, Bankless Dow is putting out. It's called State of the Dow's. One of my favorite newsletters they've put out so far because I really think, and I know you believe this too, Dow's are the next big thing.

Starting point is 00:36:17 Like, Dow's at some level never left, and there's sort of a container for everything else that is happening in crypto, but I don't think they've had their moment yet. You know, D5's had its moment, NFTs have had their moment. DOWs will have their moment at some point in time, and a ton of infrastructure is being built out. If you want to keep up to date on the latest, go check out the state of the Dow's newsletter that is put out by Bankless Dow. That's bankless Dow.com. You can stay ahead of that. I think there's some alpha in there for you if you get in on what's going on with Dow's early and keep informed on the industry. It's a whole subset of the crypto economy that not a lot of people

Starting point is 00:36:57 are paying attention to. David, let's get to raises. There are two this week we want to highlight. The first is back to Axi Infinity. They just raised 152 million, this time from A16Z. That's a large number. But, I mean, they're a large, I guess like, they're a large nation now, a large economy now, A16Z getting in on this action. A16C is just freaking everywhere. Like, there's, they just, there's buying everything these days.

Starting point is 00:37:25 We're actually going to have Chris Dixon on the podcast. Maybe we'll talk to him a little bit about their strategy for allocation. but a big raise for Axi Infinity, you know, congrats to that team. I don't know if they need the money, but, you know, they got the money now. Yeah, that is a big question. They have a massive market cap on their token. Like how much do they, what do they need this money for? I mean, I guess strategic partnerships from A16C, I'd like to know a little bit more

Starting point is 00:37:50 of the details behind like why raise when you already have a massive market cap and also where is that money going for? I think the next time we get G-Hoh and team. on the podcast. That would be a good question for them. We'll find out. The AXI vision is extremely ambitious. It's not just like this one singular game.

Starting point is 00:38:08 It is literally an entire economy, an entire like online nation. Like they are not the whole AXI Nation thing. That's not just like a meme. That is an actual like roadmap. That's an actual manifesto. Yeah, that actually might be part of the answer to your question, David. The second is this. Second race is this.

Starting point is 00:38:25 Ramp network just hit a $300 million valuation in a series. A, so they just raise $30 million. This is kind of like a Fiat on-ramp into D-Fi. We've known about Ramp for a while. It's pretty cool rather than go through a crypto exchange, like a Coinbase, to on-ramp your Fiat into crypto with a few clicks of the button. You can use Ramp directly onboard into D-Fi into crypto. I think has better market presence in Europe right now.

Starting point is 00:38:52 Yes. And not in the U.S. yet, but hopefully this helps them expand into the U.S. as well. Yeah, it's been a while since I took a peek under the hood at ramp. But if I remember correctly, it's actually closer to a protocol than it is a company. That's right. Yeah, which is pretty cool. A protocolized on ramp seems nonsensical. But if they can lock that down as a product, that is, no wonder, it's $300 million.

Starting point is 00:39:17 That's right. I'm recalling that. They have a bit of, you know, foot in both, both realms there. So very cool. Jobs time. Jobs. Get a job. Guys, your weekly reminder.

Starting point is 00:39:27 Get a job in crypto. I haven't you got a job yet. If you got a job in the legacy world, it doesn't count. That's what she's, but a lot of people have, to be fair. If you've gotten a job in crypto, well done. Let's make this positive, David. But also, if you haven't, you really should. Bankless is going to shame you into jumping into the crypto industry.

Starting point is 00:39:49 It's a little bit off-round for us, but hey, by whatever it takes. You know what? Your job may be great now, but could it be better. It would be better. Yes, it could. Go to the bankless job boards. and you can check out some of the better jobs that are available for you. General Counsel, that's a new, that's for legal minds, I suppose, from Smart Defi.

Starting point is 00:40:06 Finance and operations expert required at Smart Defi as well. They also need a senior backend engineer, always room for more technical people in crypto. Merit is looking for a blockchain technical CTO as well. This is more of an interim position. So if you're looking to just sign in for six months or so and test the waters, that's a great position for that. community manager at, I always want to say, Errigorn. Errigorn.

Starting point is 00:40:34 Oregon, yeah. Is required as well. That's on the job board. A blockchain engineer at highlight software engineer at popcorn, community lead at popcorn. And of course, Chaser Dow still wants a senior front end web three developer. If you feel like you have the skills for some of those roles, go check that out, submit your resume, and get a job in crypto.

Starting point is 00:40:55 What more can we say? News time. Put your old job. Ready day? Today? Wait, do you have to quit your old job to start a new job? I guess you do. Yeah, you kind of do.

Starting point is 00:41:05 Open up your, text your boss, email your HR, say, I quit. Do it right now. You're probably, here's the thing. You're probably already working in crypto. If you're listening to bankless, you're just like working for crypto in all of the time that you're not working for your actual job, right? Like, nights and weekends, you're probably doing something in crypto. So why not make it all the time?

Starting point is 00:41:30 There you go. Enough about that. We'll bug you again next week, guys. All right. This is cool. It's huge. Three things to talk about this week. The first is this.

Starting point is 00:41:39 TikTok is coming to Ethereum, and they're doing it via NFTs. David, why don't you take this story here? Yeah, TikTok, everyone's, well, all the Zoomers' favorite social media app, famous for distilling as much like dopamine hits into a short amount of time as possible.

Starting point is 00:41:53 Hey, don't act like you're too good for TikTok, sir. I'm definitely not. They are now working with Immutable X, the NFT Starkware-based ZK roll-up, which is focused on NFT specifically. It's like an NFT-specific roll-up, and TikTok is doing NFT stuff on top of Immutable. So that is absolutely massive.

Starting point is 00:42:17 That's insanely cool. They've also bringing on a ton of artists and just people who are going to be participating in the NFT world in TikTok, on immutable, including Little Noss, whoever that is, Gary Vaynerchuk, Gary V, Grimes, Elon Musk's ex-girlfriend, and a few other people that I don't know. Also, coin artist. I do know coin artist. Glad she is part of this as well. Yeah, this is super cool, right? So, first was Twitter, and they started with minting NFTs, experimenting. Now they're

Starting point is 00:42:49 authenticating NFTs. They're getting into that business. Now it's TikTok, and they are now experimenting with minting NFTs. Next thing you know, they're also having an auction. They're actually selling NFTs. Yeah, that's cool. Yes, they're one-upping. The full suite of activities, right. One-upping to it.

Starting point is 00:43:06 And of course, they've got like TikTok firepower. So acting like you don't know who little gnaz is, David. I know you've listened to Old Town Road, sir. I have not. I have not listened to that song. I know of this song. I have not listened to the song all the way through. Okay.

Starting point is 00:43:20 Well, I understand why you haven't listened to it all the way through. I will say that. It's definitely. like gets in your head. But okay, so people like Little Nas are debuting in this TikTok NFT collection. So again, another easy way for celebrities mainstream to enter the market, enter crypto, create theorem addresses, eventually go bankless by way of NFTs. This is Web2 meets Web 3. Web 3 is going to eat Web 2. They just don't know it yet. All right. Let's talk about this, David. This is kind of another important story of the week. You were hinting at it a couple

Starting point is 00:43:55 of times too that throughout this episode what is happening here yeah society general with like four asterisk in his name or tilda's in his name the third largest bank in France just made a collateral onboarding application to maker dow for 20 million dollars backed by euro bonds uh and so banks coming to maker dow asking for a loan they are submitting governance proposals to defy applications saying please accept my collateral, and that's pretty crazy, right? And so, when we talked to Root about this, again, podcast comes out on Monday where we talk about this more directly. He said, like, Maker Dow and didn't go out to Society General out and asked for this. Society of General, they made their own governance proposal and submitted it to the Maker Dow forums of their own

Starting point is 00:44:42 accord. No one goaded them or convinced them to do anything. They saw the value of what Maker Dow could offer them, and they submitted a governance proposal advocating for what they need and what they have to offer Maker Dow. So banks coming to Defi to get financial services without us, like, yelling at them to do so. So that's pretty cool. It's hilarious. It's not a small bank either. It's the third largest bank in France. And coming to Defi now, I never thought I'd see the day. Well, I knew I'd see the day. I just never thought it would happen so soon. Pretty cool that's happening right now. All right. Brun follows up his own tweet with a fun little joke saying, Turns out it was the future of France all along.

Starting point is 00:45:21 For those that don't know, the future of finance meme, which is defy, has also been co-opted into saying it's also the future of France kind of as a joke. For what reason? Just because it's fun. It sounds similar. Yeah, that's about it. Yeah, it sounds similar. It's fun. All right, guys.

Starting point is 00:45:33 The third, I think, lead headline for the week is Facebook was down. Yeah. Facebook was down this week. Yeah. And crypto wasn't. Right. Facebook down. Crypto wasn't.

Starting point is 00:45:46 Why was it down, though? Let's talk about this. Yeah. Okay. So the reason why it was down was because apparently Facebook, it services itself. It serves its own servers. And so when things broke, the thing that starts up again, like, you know how when your internet goes down, you like unplug it and plug it back in?

Starting point is 00:46:07 Well, when Facebook is down, you can't access the thing where you unplug it and plug it back in. I'm not technical, so I don't know the details of this. But apparently the way that Facebook server architecture is constructed, is that like the password that you need to start to stay up Facebook again, you can't access it if Facebook is down. They lock their keys in the car. They locked their keys in the car. So Facebook, Instagram, WhatsApp, all the other Facebook services were down for like, I don't know, 12 hours, which is also less time than Solana was down a week ago. I'm just going to throw that out there.

Starting point is 00:46:44 But yeah, Facebook was down. Yeah. including, it was interesting, like, employees couldn't get in the building. Right. Right. It was all tied into their security system and employee ID. So it's like you're going to try to get in the building to go fix the server and you actually can't get in there.

Starting point is 00:47:02 Not a great situation. What do you think this means for, like, are there lessons that Web 3 can learn? I think there's definitely one lesson, which is when you centralize everything, you know, bad things can happen. there was a rumor going around, David, at the time that possibly Facebook was actually hacked, and a lot of its internal user data was maybe stolen by a hacker and published on the dark web. What a nightmare scenario that would be. 1.5 billion Facebook users, all their information, all of their data, you know, is centralized

Starting point is 00:47:36 the Facebook data repositories, and that's now out and open in the real world. I think there's a lesson on, you know, what crypto can do in the, the self-sovereign identity, decentralized identity world. Maybe that's a future thing that crypto tackles and hopes to tackle. What other lessons you think there are for us here? Yeah, I can remember if I have this in the takes or not, but I'll take it, I'll put it here just in case. Is that like more and more lately, starting in 2020, things have happened in the world that are priming society to understand and appreciate some of the things that we are building here in the crypto side of things. So in 2020, we have the money,

Starting point is 00:48:15 printer go burr, 26% of all outstanding US dollars were printed in 2020. That's a lot, 26%. Meanwhile, at the same time, people finally coming around to Bitcoin, coincidentally, right after Money Printer goes Burr. So society, the choices we've made as a society to print a bunch of money have woken up people. It's like, oh, that's why Bitcoin's valuable. I understand that now. And now in 2021, we have like quarter of the internet traffic going to dead websites because of centralization of servers and centralization of power. So now I think society might be a little bit more prime to understand Web3 protocols as protocols that don't ever go down. They're public utilities that are unstoppable on the internet. And now I think there's going to be a lot more room for aha moments about like, oh, that's why crypto is cool.

Starting point is 00:49:07 like, oh, I get it now. And I've always had this mental model as like, crypto is making itself more and more usable and marching itself closer and closer to society. We're figuring out the problems. We're actually making cool, better, useful things. And we're also figuring out the U.S. behind those things.

Starting point is 00:49:25 So crypto is getting closer to society. And society is also getting closer to crypto by all these things that are happening in the world that are now real concrete examples as to broken systems that crypto can fix. So that's my take there. I totally agree. Can I add another one to that, David?

Starting point is 00:49:40 Yeah. GME earlier this year. Remember when Robin Hood, like Robin Hood disallowed their own traders from trading GME because I got a phone call. Got some pressure from prime brokerages. And so they just disabled it. That was like an aha, that's why we need D5 moment. So I totally agree with that take.

Starting point is 00:50:01 And it's a shame that it only happens when something bad happens. But I guess that's kind of what it takes to wake people up from the status quo. And at least we actually have options, right? Like without DeFi, without Ethereum, without crypto, we like, and we would have the GME debacle and be like, well, we don't got any other choice. Now we have the ability to exit. And the ability to exit is very important. Lifeboat.

Starting point is 00:50:25 We have a lifeboat. Nozark. A big one. Jump aboard. Really big one because of modular blockchains, but we'll get to that later. Before we do, let's talk some Ethereum stuff. merge is getting close. How do we know?

Starting point is 00:50:37 What's this tweet from Danny Ryan? Danny Ryan, the coordinator behind the ETH2 efforts, which is no longer called ETH2 for reasons, tweets out, the Altaire Mainet launch at Epoch 74240 is set for October 27th. So there's a hard fork,

Starting point is 00:50:55 an update for the Beacon Chain, for the Proof of Steak Chain, which is the first update for the proof of stake chain. So if you are running, a beacon chain note, you need to update your clients. All of the clients have new client updates for you to download. And this is the hard fork, the update that prepares us for the merge.

Starting point is 00:51:13 So this is the last hurdle we got to get over before we can merge. So more or less, what's going to happen is we are going to update this update on October 27th. We're going to hard fork the beacon chain to prepare for the merge. Then all the clients are going to start talking to each other. They already have. That's what's coming next. And once they are talking to each other stably for a. really, really long time and all the devs feel comfortable emerge.

Starting point is 00:51:38 Here's kind of some tweets as far as the project plan goes. And remember, there's multiple clients doing this, right? So this was, I think, a tweet maybe a few months ago. And we see these different phases. This was yesterday. This was yesterday. Oh, okay. This picture.

Starting point is 00:51:51 This first one, yeah, this picture, this image I'm looking at. And we see... M1 and 2, these are just milestones. Milestones, yes. And I actually don't know what's included in these milestones. Yeah, I think they keep that a secret just to, yeah, they just keep it. Fair enough so that people like us don't speculate. Don't tell them like, be it chained by January, 2022.

Starting point is 00:52:11 Anyway, no check marks. Now we got a lot of check marks from each of the clients. Check marks good. Green check marks. That's the takeaway here. Here's the bottom line. There's five milestones. They probably don't want us to speculate.

Starting point is 00:52:24 I'm going to speculate anyway. There's five milestones to complete in getting to merge for all of the clients. And three of them now look completed. for almost all of the clients, which means we are like three-fifths of the way there, right? So hopefully, fingers crossed, Q1, 2022, Q2 early, 2022, looking good for the merge. Anthony Cizano says he's bullish on Q1. He's bullish on Q1, okay. I can give you behind that.

Starting point is 00:52:55 Anthony Cisano, core dev of Ethereum, says Q1, 2021. That was a joke. Bullish on Q1, hopeful on Q1. one. I don't know. Maybe those words are the same sometimes, bullish and hopeful, but we'll see what happens. This is all of the clients, as you said, talking to one another. This is what it looks like in the command line. Yay, consensus. Yeah, and yay developers, yay builders. Thanks for understanding all of this. Thank you for doing the hard stuff. Yes. So we can talk about it. All right. This was a close call this week in Ethereum world. So there was a bug. Rocket Pool was getting ready to launch, which was

Starting point is 00:53:35 like sort of the first decentralized ETH staking provider. They've been in the works like forever for a very long time and the OGs in the space. I was super excited about that. They were supposed to launch a couple days ago, but they didn't like 24, 48 hours before they were about to launch. Someone found a terrible bug, a security vulnerability that could have led to the theft of rocket pool, ETH funds. David, why don't you tell us more? Yeah, apparently the same vulnerability

Starting point is 00:54:04 was also present in Lido. So it was like a two-for-one discovery of an exploit. The details of the exploit are beyond me, but they have now been patched, so no, you can't go and exploit this. But yeah, turns out code is hard.

Starting point is 00:54:22 Delayed rocket pool's launch. It's the thing. I think maybe one learning lesson from this. If you are staking even with a pool, It's more risky than stake. If you want the, it's more risky than staking on your own. If you want the lowest risk way to stake, you run your own validators. That's the lowest risk way to stake.

Starting point is 00:54:41 Pools, you're out a bit more risk. It's a bit more like ease going on. But there's still some level of risk. And we see that when we uncover security vulnerabilities. David connects. We talked about this. This is a bridge. They just released last week, what they're calling NXTP.

Starting point is 00:54:59 which is kind of this multi-bridge interoperability protocol to move from Arbitrum to optimism back to Maynet, bridge from any of the layer twos. And I guess they've been live for a week and now 16 million in volume has been bridged across their chains, which is pretty cool. The insane thing is that $16 million in volume has come off of $1.6 million of like liquidity, right? So there's $1.6 million worth of stable coins or ETH. No, it's all staple coins. But that $1.6 million of stable coins has actually transferred $16 million of value.

Starting point is 00:55:36 So the way this works is that like one stable coin will go back and forth between two L2s like 10 times and count for $10. So it's very, very capitally efficient. And so the total depositors who have deposited a total of $16 million earning 30% APY on their stable coins with a 0.05% fee. So this is definitely going to be a very strong. and sustainable source of yield that is going to ultimately come to defy when these things open up for mainnet. And you're going to see applications like YERN develop strategies around these things. And so this is going to be one of those things that pumps up stable coin yields across all of defy. Capital efficiency is great news, too, David, because some of my worries about like

Starting point is 00:56:21 payment channels and state channels are that they're not actually like that capital efficient. I mean, that's why they haven't had the adoption that we all hoped that they would have up to date. And yeah, just say you agree, you know. I do agree. David had to walk away from his computer for a second. I don't think he was listening. I was hearing you. I was hearing you, yeah.

Starting point is 00:56:48 Okay. All right, what's next? Let's talk. This is the subject you really wanted to talk about. This is the reason for the roll-up this week. So I'm not going to steal your thunder. But I've read everything that Polly Nya has written. I suggest you do the same.

Starting point is 00:57:03 I know you have two, David. But give us the TLDR take. I know we're going to do a longer podcast on modular blockchains and the future scalability of Ethereum, how it relates. Why we're so excited about this concept. But give us the TLDR here. Yeah. So we all know the concept of ultr sound money with Ether.

Starting point is 00:57:22 This is going to become ultimately the narrative of ultra-dust. Scalable Ethereum in the same vein, right? One half of the coin is ultrasound money. The other half of Ethereum is ultra-scalable Ethereum. The way that we get to ultra-scalable Ethereum is by this concept called modular blockchains or simply the delegation of labor, the separation of labor of how blockchains operate into their respective components where they are optimized for. So Paulinea, who has a great blog, who's one of probably the most,

Starting point is 00:57:54 succinct and illustrative. Most accessible. Accessible like, yeah, illustrators of how this whole roll-ups plus data layers, Ethereuml1 is going to work. The relationships of all these things. Pauline I had tweets. The first time in 12 years,

Starting point is 00:58:11 which he is calling the monolithic blockchain era, the last 12 years of crypto, we had the blockchain trilema. With ZK proofs, zero-knowledge proofs, and data sharding, we have economies of scale that invert the trilemma, The more decentralized you are, the more scale there is and the cheaper the transactions get. It's a whole new paradigm, Pauliniya says.

Starting point is 00:58:33 So I think there's a couple more times in the roll-up that we're going to touch on this. But basically, before I get there, I'll read the second tweet. Polynia says monolithic blockchains and monolithic blockchains are like blockchains that try and do everything at the L1 without any sort of just accessories like roll-ups, like cram all the things into one base chain. So really quick, what that means is Ethereum's current state is a monolithic blockchain because it does consensus, data, and also execution on the same chain. And all of the alternative layer ones do that as well. Solana is trying to do all three of those things as well. And that's what he calls a monolithic blockchain.

Starting point is 00:59:12 But Ethereum's future. Yes, Ethereum's future is changing with the merge and then the future upgrades that's undergoing. But anyway, continue. Right. So Polynata says monolithic blockchains are crypto. by Moore's law and will only grow 64x over the coming decade. Modular architectures will grow by 1 million X at the same time. The only way the blockchain industry attains global scale.

Starting point is 00:59:37 And so he finishes off, for example, by 2030, 15 million transactions per second with ZK. Roll-ups on Ethereum alone. What we are talking about is basically roll-ups, but also importantly, the illustration of the execution environment is actually, like, when you send a transaction where that transaction actually gets executed, you can take that off of the L1 and put it on the L2. Then you can leave the consensus side of things to just optimize that on the L1. Make the LA or one of a theorem really, really good at consensus.

Starting point is 01:00:10 Put all of the execution environments where you actually send transactions on the L2s, let the L2s bundle them up and then package them in a very, very small data footprint and put them on the L1. And this division of labor allows the ZK rollups, the roll-ups chains to optimize for being really, really, really fast, really, just good execution environments for doing crypto things.

Starting point is 01:00:37 Then the nature of a roll-ups consolidates it and makes, and puts it on Ethereum, which has been optimized for consensus. It never, ever goes down. It's the most, the highest uptime system ever. And also has high data,

Starting point is 01:00:52 availability and basically data availability is like food for the rollups right you need the data to be available and you need the data to have the uptime of something that has optimized for uptime right so zK rollups not actually you have to optimize for uptime like they can actually go down and we actually saw that happen when arbitrage from one wind down but importantly you can always get your money back out via the nature of rollups but you let rollups do the execution and you let the Ethereum l1 do the consensus and the data availability and this is is what allows you to not just scale linearly, like what he's saying with Moore's Law, but scale exponentially.

Starting point is 01:01:29 And this is the future of ultra-scalable Ethereum. And not only is this really good tech, but it's like blockchain agnostic tech. And so we were actually also seeing Tezos go with this roadmap because it's actually a logical conclusion of how blockchains are designed. The bad way to do things is try and just like push everything into one single monolithic blockchain. and the good way to do things is to optimize the different modular components of a blockchain for what they are good at and allow them to be really, really good at those things and allow them to come together as a modular system.

Starting point is 01:02:02 That is the narrative that's going to be happening over Ethereum over the next few weeks. And the reason that a monolithic blockchain design is bad is because if you want to scale, you have to sacrifice decentralization in order to do it. You have to disallow individuals from, running their own nodes. You have to run those nodes in data centers or large institutions, large organizations in order to do it. So you sacrifice security and you sacrifice decentralization. There's so much to unpack here. We'll talk about it a couple more times in the episode. David and I are going to do an entire podcast about this in the future coming up with an agenda

Starting point is 01:02:41 for that. But keep this in mind, ultra scalability. That is the future for Ethereum. And it happens through this modular blockchain design that Ethereum is kind of silently pivoting to. I don't think anyone's really picked up on this until Paulineas started posting. It's been sort of the, it's been the design path, but there hasn't really been a term or a narrative

Starting point is 01:03:03 or a way to share what's actually going on. So we're going to be talking about this a lot more. And as you can tell, we're super excited about it. I think some related news, maybe, on the monolithic blockchain side of things, the sole racer. Yeah. There was an announcement.

Starting point is 01:03:19 from Soul Razor, which is, which is trying to do, I don't know what an IDO is, but I think it's an ICO with a different name. Okay, what's the D mean? X, I think. Oh, okay. Okay. Well, it's an ICO anyway. They were going to ICO on the Solana chain,

Starting point is 01:03:36 but apparently they decided they needed to push that back, and it was because the Solana team asked them to. Because if they deployed on Salana in its current form, there would be issues, right? It would, Solano is worried that it would actually take down their network as, as happened a few weeks back.

Starting point is 01:03:56 You've seen the thing that already happened once, yeah. The hazards of monolithic chains, right? So I guess there's two pieces there. It's like some of these alternative layer ones aren't nearly as scalable as they let on. It's like, it's a lot more scalable than the Ethereum L1, which isn't actually a great thing to compare yourself to.

Starting point is 01:04:14 I don't even think they're scalable because they sacrifice, like security and decentralization. So they're not really scaling. They're just giving you more transactions and making you feel like they're scaling. But also, like, it's kind of weird that they would kind of go to the team or that the Solana organization would ask them,

Starting point is 01:04:37 hey, please stop doing your idea, right? It's supposed to be a permission. You're going to break our network. Yeah. I mean, it's kind of weird. I guess some people would say, look, Salon is still an alpha and beta.

Starting point is 01:04:49 I'm like, but then I'm always like, why it's worth $40 billion then? Okay. If you have to request a team to not do something because you're worried that it's going to break your network, like, you kind of deserve to get your network broken.

Starting point is 01:05:01 Like, and I don't mean to like cause, like, promote harm, but like the whole thing about crypto is that if it can be broken, it will be broken. That's why you have to make it unbreakable, anti-fragile.

Starting point is 01:05:13 Because like, what if this team is actually malicious? and they're actually looking to do harm, then they can do harm. The whole point is that you can't do evil and you design your blockchain so they can't be broken so you don't have security by request. Like, please don't break our stuff. Like, no, just make it unbreakable. This is just one example, guys.

Starting point is 01:05:32 I think what David and I are saying is like we feel like a lot of the layer one summer that we've seen is just not sustainable. It's built on the wrong foundation and it's built on the wrong architecture. And we've seen this before in crypto. So we've seen this play out with ICOs. We've seen this play out with the EOSS of the world in 2017 and 2018. And if we're right, if this thesis is correct, it's playing out right now. So careful out there is what we would say.

Starting point is 01:06:00 Hey, next thing. U.S. Bank of America, the Bank of America, the largest bank, maybe in the world, definitely the largest bank in America, I guess. They've just published a report on crypto that mentions DFIs, NFTs, and a Ethereum. I think there's some quotes in here. It's difficult to overstate how transformative blockchain technology digital assets and the thousands of decentralized apps that have yet been created could potentially be. We expect rapid changes in the current market structure, but they are bullish, I suppose, a bank getting bullish on the thing that's going to disrupt

Starting point is 01:06:38 them. I guess that's some honesty for you a little bit later, but interesting that they're discovering it. What would you say about that, David? I mean, we know that, according to Kathy Wood, we know that banks are very, very aware of some of their bottom lines getting chewed up by Defi. So it only makes sense that banks are now publishing reports about, like, the promise of this industry. The first screenshot that's there in the tweet thread, Ryan, if you want to go to

Starting point is 01:07:04 that one, the little bit up. There you go. The first headline is digital asset sector too large to ignore. not just Bitcoin so much more. Nice. Nice rhyme. The other headlines are welcome to the token economy and then also followed by DAPs and NFTs the most innovation.

Starting point is 01:07:27 So like this seems to be a report that actually is talking about the right things about the blockchain world, unlike what we saw earlier in 2017, 2018. I got to say, way better reports coming out of 2021 from large institutions and banks. They're starting to understand what's happening. here. The Ethereum NFT market OpenC has been hit by the Toads. The Toads are absolutely exploding.

Starting point is 01:07:51 Tell me about this phenomenon, David. Look at these things. You don't look any more special than my turtles, by the way. Except for the price tags. What are these? So the Toads are the NFT of the week. So congratulations for Toads. The amount of volume behind Toads was

Starting point is 01:08:07 absolutely insane. Starry Knight Fund through the Three Arrows Capital Fund. I think bought a bunch of Toads, including an extremely rare one. DC investor got into Toads this last week. Cosmo de Medici, apparently who's the Snoop Dog, alter ego of NFTs,

Starting point is 01:08:23 also got some Toads. Toads won the NFT game, the NFT Hunger Games this week, and also created OpenC's best 24 hours in volume ever. So nice job. If you thought NFTs were dead, they're not yet because Toads are here. I don't think anyone says NFTs are dead anymore.

Starting point is 01:08:40 I don't know. Somebody. All of the right-click savers are just gone. I saw somebody this week compare them to selling real estate on the moon or selling stars, basically. Not anyone in the NFC space, just a critic of NFTs. Okay. Well, we have a meme for that later. Teasing the meme of the week.

Starting point is 01:09:01 Well done, sir. Bitcoin on Bitcoin. George Soros, legendary investor, knows when to buy generally. His office confirms that they own Bitcoin. I think they own other crypto as well. I think that's big news. George Soros is a big name in the space, similar to some other large investors that have gotten in. Now, I don't know when he's gotten in, but they've confirmed that they're into crypto.

Starting point is 01:09:25 So definitely, they always confirmed these things after they bought a lot. So you can imagine George Soros now has a lot of crypto, maybe particularly Bitcoin. Maybe he's why Bitcoin's back over a trillion-dollar market cap. I mean, totally could be, right? All right, let's talk some regulation here. the first is a tax loophole is about to close maybe. Can we talk about this in detail? Sure.

Starting point is 01:09:51 Yeah. So the way that this tax loophole works is that in the way that it doesn't work in stocks because the stock market doesn't have this. But like, say you buy something, it goes down in price by a lot. But you still want to hold that stock. You're still bullish on it. Just because it went down doesn't mean you've lost your conviction. So what you can do is that, you know,

Starting point is 01:10:11 you can sell, harvest the tax loss, and in stocks, you have to wait 30 days before you re-buy, if you want to, uh, compliantly to harvest that tax law. In crypto, you can just re-buy it immediately. So you can just go to uniswap, sell your token, rebuy at your token, harvest your tax loss and get some tax optimizations that way. Apparently, that tax law is going to get closed in 2022. Yeah. That tax loophole, excuse me. That's a good explanation. And by the way, I would say none of this is tax. advice, right? So different, different tax consultants will give you different advice based on that. Some of which we are not. Some I've talked to, have said, you should wait 30 days anyway,

Starting point is 01:10:51 just in case. But now it looks like there's some legislation in the House Ways and Means Committee that is going to explicitly close that loophole. So if you are looking to use that sometime, if you got some losses on maybe some Shiba that you purchased or, I don't know, even NFTs, I suppose. And you want to sell those losses and then re-buy the same asset because you're still bullish on it. Now is the year to do that. You only have to the end of the year because this could close on you if you're looking to do that. None of this is tax advice.

Starting point is 01:11:24 I'll say it again. The Biden administration is seeking to regulate stable coin issuers as banks. I'm not surprised about that, the desire to do that. Not a lot of detail here. I think we'll wait until that plays out. You have any comments, David? Yeah, at first glance, I don't hate this. They are kind of banks anyways.

Starting point is 01:11:43 So maybe that's actually gives them more power because of their status as a bank. EBD on the details. Yeah, absolutely. As long as it doesn't apply to, like, decentralized stable coins, they don't cast too broad a net. Also, I read that the FDIC, there's some talk of applying FDIC to stable coins as well, which is a nice consumer protection, right? If your bank goes under, you still get your money back. It'd be nice if, you know, stable coins offered that guarantee too.

Starting point is 01:12:12 So there are ways the, there could be smart regulation. It could be a W. Don't know about this regulatory body recently. Not W. The SEC is investigating Circle, which is the issuer of USC, of course. They've been investigating them since the summer, since July. We've gotten Circles gotten subpoenas. Now the word is just getting out about this right now.

Starting point is 01:12:37 You got to imagine it's the same kind of thing. Some sort of implication, investigation on whether USDC is a security or not. What's your take? Yeah, so Gary Gensler, A, first off, Jeremy Aller totally saw this coming. Circle at large, totally saw this coming. They've been marching towards compliance way ahead of the game, starting like four or five months ago. They were working on better transparency, better auditability, because they knew that regulation

Starting point is 01:13:05 was coming one way or another. And Gary Gensler has also, when he talked about stable coins at this one talk, he referred to them as stable value coins, which people speculated was a nod towards stable value funds, which are an SEC regulated financial product. And so the SEC is probably going after USC in the same way they were probably going after BlockFi and other like lending. Salis. Yeah, it's saying like there's deposits on one side. and credits on another, like USDC on another. And the SEC probably thinks that it can regulate that. And so that's probably what's going on.

Starting point is 01:13:45 This could be something that we get clarity on via the courts. Coinbase, unfortunately, back down on taking the SEC to court. Maybe circles the one that fights back. I don't know. Right now is just the SEC doing a probe, which in my mind is like, you know, you know, when your cop pulls you over, I've never been pulled over by a cop. not true.

Starting point is 01:14:08 You're not supposed to say, they're going to say, can I look inside your car? And you always, everyone knows to say no. But the SEC is like, hey, can we look inside of you? And you're like, you're supposed to bend over backwards and take it, apparently. Like, why? It's just a racket, dude. Well, I mean, that is one of the special privileges of the government, right? That's, we've armed this Leviathan with weapons.

Starting point is 01:14:33 And they use these weapons to. investigate companies like this. I will say, look, USC is not a security in my mind. It's nothing like, you shouldn't have a, like, it's not like an ETF or something like this, right? But should there be some regulation around it?

Starting point is 01:14:50 Like, I want to know that circle USC assets are actually backed by what they say they're backed by, right? And if they're not, because again, this is not open, transparent finance, right?

Starting point is 01:15:04 This is sort of a token version of dollars in a bank account the end of the day. If they're not, then circle and any issuers of the stable coin should be responsible for that, right? If there's some shenanigans going on. So like, I don't love what's going on with tether. What's a tether made of, David? None of us know. None of us really know, right? I know exactly what a dye is made of. I feel like the answer to a lot of this is better, more decentralized stable coins. But while we're dealing with USC, maybe there's some light touch regulation, I just, I I don't know. The SEC is as heavy-handed recently. And we'll see what goes on there.

Starting point is 01:15:43 Let's talk about a few quick things before we end this section and get to takes. Powell said he doesn't plan to ban crypto, which is convenient because he actually can't ban crypto. I think that would require less than that power. What's the next one here, David? Yeah, this next one is that the Bickgo executive, Darren Jordan, says that he gets regular calls from corporates looking to add Bitcoin to their balance sheet. So interest in Bitcoin continues. Good. That's good news. Utopia Labs is a company that's building some more Dowell infrastructure. This is the season of building for Dow's. I think they're going to explode a little bit later,

Starting point is 01:16:24 but a ton of infrastructure is being built out to help Dow's measure, to help Dow's manage treasury, payroll, salaries, all sorts of things. And it's great to see that happen. David, why don't you take us home with this last quick one Dave White tweets out I've been Dave White is a guy in crypto Twitter who works on options options at Paradigm but has apparently also been working on a new

Starting point is 01:16:47 NFT primitive with Andy 8052 we've had him on the show a couple times and Dan Robinson from Paradigm also had had him on the show they have released Rix CKS recurringly issued collectively kept shards basically this is at the intersection of NFT and DFI

Starting point is 01:17:04 fractionalizing NFTs into tokens along with a way to reconstitute the NFT once fractionalized. When you fractionalize NFT into Rix, the protocol mints and sells new Ricks every day. And all proceeds go to Rix, Ricks stakers. So if you are interested in the intersection of NFTs and DFI, you can go to this and read about its construction. I just like the name, man. Ricks, it's great, Rick and Morty.

Starting point is 01:17:28 All right. I'm glad your brain goes there as well. Exactly. I was just waiting for the meme, but there's no meme here. Paradigm. Why is there not a pickle? There is a pickle. There needs to be a pickle right. All right, guys, we will be back with the takes of the week. But before we do, we want to thank the sponsors that made this episode possible. The AVE protocol is a decentralized liquidity protocol on Ethereum, which allows users to supply and borrow certain crypto assets. AVE version 2 has a ton of cool features that makes using the AVE protocol even more powerful.

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Starting point is 01:20:14 This is Anthony Sassano. My 5 to 10-year crypto investment thesis in quotes, and he has some categories here. Eif, a category in and of itself, defy, layer 2s, and scaling, privacy-focused tech, cross-layer-2 chain bridges, NFT infrastructure, some really hot NFTs, crypto gaming. I know five to ten years is forever in crypto,

Starting point is 01:20:39 but I'm confident that Ethereum is going to eat the world. This looks a lot like my investment thesis as well. And I think the bankless investment thesis, where you got some crypto monies, you got the new banking layer, which is defy, you've got the scalability that's going to power all of that. You've got privacy, which hasn't even been dealt with yet,

Starting point is 01:20:58 and needs to be in crypto and will be. Then you've got cross-chain bridges that connects liquidity throughout this entire organic system, NFTs, which are a category in and of themselves and cryptic gaming, which is absolutely going to be massive. I think there are some other bullet points that we could add as these areas emerge over the years. But like, this kind of sums it up for me. What's your take?

Starting point is 01:21:22 Yeah, I looked at this tweet and just sat and tried to think of something that Anthony missed. And I don't think he missed anything. If you scroll down, I think you'll see. Mem coins, sir. Mem coins. How about meme coins? Do you want to own any memes? There is my reaction to that.

Starting point is 01:21:36 It's like, oh, that's about all of it. Porky pig. Yeah. I think it is worth noting that of all the things that Anthony listed, ETH is the only one that's actually an asset. Everything else is a category. So that's worth noting. Also, Ryan, if you had to pick which one of these is the biggest category other than Heath, what do you think it is?

Starting point is 01:21:54 Ooh. I have my answer. Now that's a good question. Well, defy is going to be the entire banking layer. NFTs are absolutely huge. That's the cultural layer. Crypto gaming is kind of an intersection of both. All the rest of this is like scalability infrastructure.

Starting point is 01:22:17 I think privacy-focused tech, as bullish as I am, it's going to be a bit more niche than these. Eth is going to be the biggest by market cap is what I would say. but some of these categories will be absolutely colossal. I just can't, I can't give you an answer right now, David. I don't know. What's your answer? My answer is crypto gaming, mainly because I think at the same time, we're going to see a redefinition of what gaming actually is.

Starting point is 01:22:45 Gaming is going to move closer towards work. Less, it's not going to be just gaming. It's also going to be in-game economies. And so I think as a euphemism, you can almost say the Metaverse as crypto is what crypto gaming is. That's a good sake, sir. And I think that is going to be the biggest category in here by far. Yes, I think if you, if you call it crypto gaming, that minimizes how large it's actually

Starting point is 01:23:09 going to be and how impactful, right? This isn't just like Fortnite plus tokens. It's not just that. It's that's like the beginning. Metaverse. Crypto gaming is huge, right, yeah. But gaming is the start of the metaverse, I think. So it's good to categorize it as that for now.

Starting point is 01:23:23 Okay, let's talk about this. Your tweet. Say it. This was a fun take. Very, very short. Joe Lalu is from Bison Trails. He tweets out, after hours is for NFTs, as in NFTs after dark. Victor Bunin follows up saying during hours is for defy.

Starting point is 01:23:39 So daylight is for defy and nighttime is for NFTs. I thought it was a fun take. Yeah, that's good. You know, Chris Dixon says, watch what people do on nights and the weekends, the smartest people do on nights and the weekends, right? Watch their hobbies. I think this is another example of that. by the way, Dixon on the podcast, common sometime in October.

Starting point is 01:23:59 It's going to be exciting. Talk more to him. We'll run this tweet by him. David, this is your tweet to you. I'm going to say it. You tell me what it means. Ethereum is the best single source of truth we've ever come up with. What's that mean, David?

Starting point is 01:24:12 Yeah, so humanity loves objectivity and truth because it allows us to coordinate around truth. And Ethereum, as a state machine of truth, is the best source of single source of truth that we've ever been able to come up with. The whole Moloch and coordination side of crypto, this lends itself to that, right? When everyone understands what the truth actually is, we can actually coordinate around that. And as Ethereum, as a generalized, Turing complete smart contract platform, it offers us the best single source of truth we've ever come up with. Particularly important when all of our other trust machines, institutions of trust are failing

Starting point is 01:24:53 us in this moment to build up new institutions of trust. So the world doesn't descend into chaos. Let's talk about this from Mariano. The Howie Test, 1946, that's when it came out, is closer. It's the invention of the stapler 1877, then of Ethereum Maynett, 2015. Hey, I'm just impressed that the stapler was made in the 1800s. Nice. Yeah, that's pretty innovative. I wonder, I hope the stapler maker got a patent on that, made some money. But what he's saying is like, why are we bounded by these laws written pre-internet, pre-digital age, pre-computer, right, when we're entering this whole new paradigm, right?

Starting point is 01:25:36 We need to create new laws. We need to create new regulations. Update the laws. Update the laws. There you go. You said it better. All right. This is cool from Aaron Wright.

Starting point is 01:25:48 This is one way to think about emerging blockchain trends. What are we looking at? out here, David. Yeah, we're looking at kind of a funky Venn diagram. We have two Venn diagrams in the middle. One is DFI, one is NFTs, and they also overlap. But another circle around all of that that completely encompasses those two Venn diagrams is a bigger Venn diagram that says DOWs. So Aaron is implying that DFI apps are DOWs, NFT apps like Punks or like Pudgy Penguins or Cool Cats are also DOWs. And then there's also things that aren't DFI or NFTs that are also DOWs. So, it's kind of a nice way to visualize how gargantuan DOWs are as a concept.

Starting point is 01:26:27 And then I also follow up this tweet with my own tweet again as well, saying Ethereum and Bitcoin and Bitcoin and Bitcoin, Ethereum actually are actual Dows. They're actually one of the only true Dows out there. And so kind of a nice visualization. This is definitely how the economy is going to be organized in the future and reorganized as we move to that. All right, David, here's another modular blockchain take because it's modular blockchain roll-up today. What's this take? Yeah, this is coming out of a chain link God,

Starting point is 01:26:57 who I actually had the pleasure of meeting in New York a couple weeks ago. He's not a frog? He's not a frog. He's not a frog, yeah. All right. Say no more. Optimistic roll-ups, ZK. Roll-ups, Validium's, volitions means a shift from a monolithic blockchain model

Starting point is 01:27:11 to segregating security, data availability, and execution into different layers. The key is to not just mitigating the blockchain trilema, but inverting it, aka solving it. So yeah, just hammering the point home. The era of modular blockchains are upon us. And that is how we go from just like a little bit more scale to like almost infinitely more scale. When you say the blockchains.

Starting point is 01:27:35 When you say upon us, it's like just starting, right? That's why we haven't felt its effect yet, right? We still need a few other key technologies to. DYDX users have felt it. DYDX users have felt it. We'll get to that soon too. But let's look at this. This looks like a galaxy.

Starting point is 01:27:52 spiral, nice spiral galaxy image. I'll read out the tweet. In Q1, 2021, ETH settled 1.5 trillion in transactions, more than all other blockchains combined. In 2022, ZK rollups and a sharded data structure could increase Eats max throughput from 45 transactions per second to 100,000 transactions per second, setting the stage for EVE to become the universal store of value. This is a spiral galaxy with ETH in center where it's sort of the black hole would be all the star clusters yeah clustered in the center and it's all of the various m1 that is like circulating currency 35 trillion m2 currency and savings 60 trillion stocks bonds real estate derivatives all swirling around the black hole the the gravity vortex the singularity that is Ethereum and i think that's a good analogy any other takes yeah this also

Starting point is 01:28:50 lends itself towards the modular blockchain narrative because all of these different use cases need different constructions. And when you have a single monolithic blockchain, you force every use case to just operate under the same structure, the same monolithic structure. But the validity, volitions, ZK. Rolups, optimistic rollups, they offer different components that you can piece together as you see fit that is optimized for your specific use case. And so having this modularity allows Ethereum and all of its layer twos to be constructed in a way that is optimized for that specific use case. And one thing that Ethereum does very, very well is it maximizes choice for the developers

Starting point is 01:29:32 and for the users. And when choice is maximized, innovation explodes. Guys, if you're having trouble with some of the terminology like ZK, roll up zero knowledge or volitions, never fear. Just keep tuning into bankless. We will have some episodes for you that dive into these topics. detail. But David, it's end of the show, almost end of the show. I got to ask you the question we always talk about, which is, what are you excited about this week? All right. I'm excited about

Starting point is 01:30:00 modular blockchains. I think modular blockchains are the future. That is how we solve basically everything. When crypto says like it wants to take over or Ethereum people say like we're going to tokenize everything, well, we need the appropriate infrastructure to do that. And like I just said. When you have modularity, you get to optimize for that specific module and what it is good for. So let's put the consensus module in the consensus corner and optimize for that. Let's put the execution in the execution corner and optimize for that and give all the, all options available to everyone how they want to construct their layer two. And so we are all, we've been hammering this from the beginning of bank list. It's like, eventually we are all going

Starting point is 01:30:45 to live on layer twos, and these layer twos are going to have different flavors, and eventually all of the flavors to do what Ethereum needs to do to put the entire universe on Ethereum. That has always been the goal, and a modular blockchain is how you become expressive enough to allow for optionality for everything to eventually become something on Ethereum. That's what I'm excited about. That's cool, man. What are you excited about, Ryan? You know, I'm a plus one on that.

Starting point is 01:31:13 Oh, yeah, you're excited about modular blockchains? Yeah, I'm just going to riff on that, right? It's like a different way. So I think one of the things we've been able to do is identify things a little bit early, at least some things, right? So like back in 2018, we're telling everyone that ETH as a monetary asset, as a store of value is undervalued. That's when we come up with ideas like ETH as a triple point asset, right? Staking, you know, EIP 1559, all of these other characteristics that would be built in would turn Ethereum

Starting point is 01:31:45 and Ether as an asset into a bond, into a very valuable store of value that is likely far more valuable than even Bitcoin. So we identified that early. And it was underrated at the time. No one believed it at the time. Massively underrated, yeah.

Starting point is 01:32:00 Massively underrated. No one believed it. I believe we're at the point in time where Ethereum's scalability strategy is just as underrated as ethie asset was back in 2018 and 2019. I'm just going to say I think Ethereum has the best

Starting point is 01:32:18 scalability strategy in crypto right now and nobody knows it. It's driving me crazy. Because people are saying oh, ETH can't scale and that's why X chain or Y chain or like that's why we need all of these things.

Starting point is 01:32:35 No, it hasn't compromised on decentralization security but it is scaling and it's scalability strategy. is far more robust and far more achievable and actually far more scalable than any of these other solutions. It's just taking the time to do it right and keep things decentralized. Polynia, 15 million transactions per second is a rough estimate by the end of 2030. It's coming. Like there's cryptography magic, like ZK roll up, ZK sync. It's all coming.

Starting point is 01:33:11 People just are impatient. And they run and they chase them. narrative, and they run, they chase the next ETH killer. And I think it's going to cost investors some money. But like, if you don't believe Ethereum is scaling today, to your point earlier, David, go try DYDX, right? Like it has the deepest liquidity. We just had Antonio on bank lists this week. The deepest liquidity in all crypto. This is not just decentralized exchanges, crypto exchanges too for some of their assets, the deepest liquidity. They're doing like $8 billion in daily volume. Eight billion in daily volume, all secured by Ethereum. Don't tell me Ethereum is not scalable. It's scaling now. You just haven't put in the effort to actually make it scale,

Starting point is 01:33:54 and you haven't waited until some of these scalability strategies come online. And the reason is not, the reason I like this is not because, like, you know, people say, oh, he's an Ethereum Maximilist, right? All he cares about is Ethereum. No, I care about decentralization. The ability to run your own node. Bitcoin preserves this, okay? Ethereum preserves this. there are a few, if any, other networks that are focused on security and decentralization right now. I love Solana as an execution layer. Fantastic for a roll-up. Avalanche, too.

Starting point is 01:34:25 Hell, they can all come to the party. They can all play. They can all be execution layers and roll-ups. But let's not sacrifice. The only thing that makes crypto great, which is it's decentralization, it's security, its self-sovereignty. That is why we're here in the industry. And yeah, I think it's massively underrated right now.

Starting point is 01:34:44 People will wake up a year from now, two years from now. That's how long it took for ETH the asset to be publicly recognized. And they'll realize that this is the case that, oh, well, back in 2021, when everyone was saying ETH is not scalable and ETH is dead and some other chain is far more scalable, they actually had the best scalability strategy the entire time. That's my prediction. Right. And the reason why it's not here yet is because when you don't cut corners, it actually takes, longer to get there. I think one thing that Paulineya said,

Starting point is 01:35:13 and the reason why this weekly roll-up is the blockchain modularity roll-up because Paulineya's writing has just recently come onto the scene, at least for you and me, Ryan. Anthony, people like Anthony Sizzana have tapped into this a little bit earlier. But they just make it really, really accessible

Starting point is 01:35:30 and understandable. So definitely recommend reading his blog post if you want to get into the details about why we're so excited about this. I think the big point that listeners should understand, and I'll do my best, to explain it here.

Starting point is 01:35:42 You're going to need to read his own writing to understand why it's true, is that when you optimize for decentralization and you put decentralization first under a roll-up paradigm, the more decentralized you get actually scales with how scalable you can get. And so typically, previously,

Starting point is 01:36:01 when you optimized for decentralization, you actually reduced scale. Those are the same spectrum. You can either have scale or you can have the trillum. a trilemma. Now, under a blockchain roll-up paradigm, the more decentralized you get, the more, the better your node architecture is and how many nodes there are gives a roll-up stronger assurances as to their settlements. And so you actually are able to increase throughput on layer

Starting point is 01:36:31 two's by adding decentralization at the layer one. So more decentralization, more scale, which is completely like paradigm shift with how scale it should be thought of. And anyone that thinks that you scale a blockchain by scaling at the L1 should understand that sacrificing decentralization at the L1 sacrifices the ability to have layer twos. And layer twos are where you go from, you know, going from like 45 transactions to a second to 100 million transactions per second. That can, 100 million transactions per second can only ever happen at a database layer,

Starting point is 01:37:07 a one-of-one nodes or on layer two's. And the way that it happens on layer twos is if the main chain is maximized for decentralization, you actually get the bejillion transactions per second without sacrificing decentralization. This is the way blockchainers are scaling. This is technology that's independent and agnostic of political alignment. Is that roll-ups are not an Ethereum technology. Like I said earlier in the show, Tesos is also going by the same roadmap because developers have come to this logical conclusion as this is how a blockchain should work. And so that is why

Starting point is 01:37:42 we are excited about this. Tezos, near two, a number of them have discarded the monolithic blockchain strategy. And I think that's what it is for us. Like, bottom line is long-term games, right? I think this is the long-term game and the short-term game are these monolithic blockchains right now. All right, David, unless serious matters, we got all serious for a moment, okay? Meme of the week. What's the meme of the week this week? Let me display it. This is, why don't you tell our listeners what we're looking at here? Yeah, so this is actually one of my favorite comics is, it's the, the format has been changed, but it's two stick figures. One is in a therapy chair. The other one is the therapist, and the therapist is writing some notes. The guy laying down on the chair says,

Starting point is 01:38:25 I just don't see any value in JPEGs. And then you see the therapist scribbling some notes. And then in the second panel, you see that the notes being scribbled are not going to make it. It's fatal. All right, we got two memes of the week, though. This is a meme of the week that is very much a part of the theme today. Yeah, we earlier talked about how the Altair hard fork is coming for the beacon chain to prepare for the merge. So we have a black bear and a polar bear, black and white, eth one, eth two, changing the names from execution layer to consensus layer, tip of the hat to modular blockchains. And when these two bears touch fingertips in the way that they are,

Starting point is 01:39:05 they come together to be a panda bear, which is Ethereum, a black and white bear. Yeah, cool. Also cute. Ethereum, the panda meme. Will the panda replace the unicorn? I don't know.

Starting point is 01:39:16 I don't think so. Unicorn's irreplaceable. This dude has the meme of the shirt. Yeah, Ben from Teku, I believe. He's the product behind Teku. I hope that's right. Actually has this as a shirt. That is awesome.

Starting point is 01:39:29 All right, guys. That has been the weekly roll-up. Of course, none of this has been financial advice. ETH is risky, Bitcoin is risky, so is D-Fi. You could definitely lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey.

Starting point is 01:39:45 Thanks a lot.

Bankless - ROLLUP: Tik Tok NFTs | Facebook Goes Down | Société Générale & MakerDAO | Ethereum 2.0 Merge Updates

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