Bankless - ROLLUP: Voyager Bankrupt | Solana Phone | ENS Domains | Facebook NFTs | Reddit NFTs | EU Crypto Regulation

Starting point is 00:00:00 The sky is starting to clear. Like, all the trash has already floated up to the surface, and we've already started to, like, start doing a lot of that cleaning. I'm feeling pretty good. Bankless Nation, it is the second week of July. I hope you are enjoying your Friday morning because it's time for the weekly roll-up. I said it this time, not you, David, but how are you doing, man? On the second week of July, crypto's still being kind of crazy. We're getting some liquidations.

Starting point is 00:00:27 We're getting some bankruptcies, some consolidation on the market. how are you feeling about things? You know, pretty good, I'd say. Successful Sopoilia test net merge, two of three test nets ready to go, is goarly next. And like meanwhile, the BlockFi story has, I think, concluded. That story is over. We're going to recap the conclusion of that story. Voyager goes bust, but we already knew that.

Starting point is 00:00:52 The final death of three euros capital, we kind of already knew that too. And also Reddit and Facebook doing NFT things and no one really noticed it. And so, like, Ryan, like, we're also like a little bit great. We're actually more than a little bit green right now. Again, positive news on the merge. No more contagion. I feel pretty good. You think things are getting cleaned up.

Starting point is 00:01:13 I think, yeah. Contagion is, we're getting our stuff together. The sky is starting to clear. Like, all the trash has already floated up to the surface, and we've already started to like start doing a lot of that cleaning. I'm feeling pretty good. How are you feeling? Yeah, you know what?

Starting point is 00:01:28 I think that the contagion, might be over, at least this first pass, unless we get another big leg down, right? So I'm always cautious to say that, but we've had a lot of crypto banks go under. And that's been the story, and we're going to continue talking about it this week as well as everything that is else that is going on in crypto, including macro stuff. If, as always, if you guys enjoy these weekly roll-ups and bankless in general, make sure you like and subscribe. All right, on the podcast, that means making sure you're subscribed on YouTube, it's hitting that click subscribe button,

Starting point is 00:02:01 and also giving us comments, throwing comments our way, and five-star reviews. We always appreciate that. David. Have we told them to get their morning coffee yet? Yeah. Yeah, get your morning coffee.

Starting point is 00:02:11 Second cup. Yeah, second cup. Yeah, second cup. You've probably already drank your first cup in that. It gives me a two-cup roll up. Let's talk about Juno, though, David. This is a crypto bank that we actually do like, and we do recommend because it is an easy way to bridge onto layer two.

Starting point is 00:02:27 what is Juno doing for us? Oh my gosh, so much. The coolest thing about Juno, it's a normal checking account. It's a bank. You know, fun fact, I actually do have a bank account. That's how I pay rent.

Starting point is 00:02:38 So we all need our checking accounts. It's the place that, you know, the money goes before you buy Ether or Bitcoin. But with Juno, you can get from your checking account to a layer two on Ethereum directly goes checking account to layer two immediately in seconds.

Starting point is 00:02:53 So that's kind of crazy, free withdrawals. And so you don't have to deal with like layer one gas fees. You don't have to deal with like the bridge wait times. So that's already crazy. It's optimism, arbitrum, I think. What else is there? Polygon. And then the ZK rollups are also coming out soon. Yep. Yep. ZK sync and Starware. And then you can also trade crypto with zero fees. We like zero fees. We like crypto assets. And then if you so choose, you can get 6% on your USDC and 3% on your Bitcoin and Ether.

Starting point is 00:03:23 What I also love is they'll convert your paycheck. You can get your direct deposits into this. They'll convert your paycheck into crypto. And then you can immediately withdraw that to layer two. And some people are saying, well, you guys are bankless. Well, we still also live in the real world. And I still have a Wells Fargo account, sadly. I haven't been able to get rid of that. But I do also have a Juno account because that is a DeFi-friendly crypto bank. Doesn't mean you have to keep all of your funds on Juno, right? Keep the minimum necessary in the banking system. But these fast withdrawals to layer two, and all of this crypto-native and defy-native support is super useful. So go ahead and get your Juno account. There's a link in the show notes. Also, if you go to

Starting point is 00:04:04 bankless.c.c. slash capital J for Juno, you will be able to get that link and earn $10 when you deposit. David, let's talk about markets, man. What are the markets doing? We actually have a little bit of sunshine? It's a green week. A little bit of sunshine. Yeah. So Bitcoin started of the week at $20,000. We are currently at $20,730, about 3.5% in the green, Ryan. 3.5%. Above 20K is a good day. All right.

Starting point is 00:04:31 How about ETH price? That's up even more. Yeah. Are you ready for this one, Ryan? Ether started the week at $1,030. We are currently at $1,215. That is 18%. That is 18% green word.

Starting point is 00:04:45 That's a big green week. What is this? Are people bullish suddenly? I don't know. I didn't know. that that was allowed in this market. Well, let's look at the ratio because that's also bullish. That must have gone up with the numbers you just quoted me.

Starting point is 00:04:55 Yep, up 8%. We are currently at 0.058, where we were down to 0.054 or 53 earlier this week. You still believe this is a reliable bull market, bear market indicator. So it's a little bit bullish on the week. I mean, it's a lagging indicator, not a leading indicator. But, I mean, it's been up since June. The bottom was like June 10th or June 12th or something. So, like, it's been slowly grinding up ever since June 12th, which was like when this contagion started.

Starting point is 00:05:23 So, like, a month of contagion in the rear view mirror, which is Polish. Important to note, though, in these bear markets, there's always these fakeouts, right? So what'll happen? This happened in 2018? How many times did it happen where, like, we'd go for a steep drop, and then we'd recover, and everyone's like, oh, here's a ray of hope. There's the sunshine. Like, maybe we're out of it, and then boom, we get hit by another major drop.

Starting point is 00:05:47 It happened a lot. and, you know, I had no idea what the hell I was doing in 2008. I was like, yeah, you're the elder millennial here. Yeah, well, man, I remember. And I thought a few times I was like, okay, this has got to be it. This has got to be the end. We're still on a road to recovery. Although I will say that the feeling is a little bit different this time, David.

Starting point is 00:06:09 I feel like a lot of people have already capitulated to the fact that we are dead in a bare market. And we might be in a bare market for years at this. point in time. And that to me is a good signal because we didn't see that in the first mega drops of 2018. People were still in denial and they spent more of this phase in denial in that like, oh, maybe the bear market, maybe the bull market's not over. Maybe we'll just recover and things will shoot back up. Maybe this is another big dip. But what is the cryptocurrency chart telling us from a global perspective? How much value in crypto right now? Yeah, total crypto market cap up from

Starting point is 00:06:44 934 billion to 976 billion. That's going up too. The sentiment, though, from a macro perspective, doesn't feel so great. An economic update. Here's a tweet. Could you read this one out, David? Yeah, 58% of Americans now living paycheck to paycheck, consumer confidence lowest since 1950. Stock market having its worst year since 1970.

Starting point is 00:07:10 Mortgage demand lowest since 2001. credit card debt up 20% in one month, and then they followed these metrics up with. The recession is just getting started. This is where I always go back and forth. They're like, okay, these are all like lagging indicators, right? These are telling us of, well, you know, the Zike guys saw the times. Everyone feels bad because the stock market's down. No one's buying homes.

Starting point is 00:07:32 Everyone feels price out of homes. Not only are homes still pretty high priced, but the mortgages are really, really high. And you can see this choice, the economic conditions showing up in impact. in consumers because they're having to load up on credit card debt, and credit card debt up 20% in one month. But these are all as a result of the last three months, and I don't think they are indicative of the future three months, but they could be.

Starting point is 00:07:56 Yeah, this is a, I think it's a good marker of sentiment. And I do think some of these data points are probably like selected, right? So, you know, for instance, this stock market having its worst year since 1970. Well, you know, at the beginning of January, stock market was like close. like all-time highs, right? So there's some data sampling here that is definitely skewing towards the bearish side. But definitely this R-word,

Starting point is 00:08:20 I'm seeing that everywhere now. Everywhere. Recession. Recession is just getting started. And I feel like sentiment from an economic perspective has shifted towards everyone's now expecting a recession, even though that hasn't formally hit yet.

Starting point is 00:08:35 But what's the U.S. dollar doing? Because, I mean, the U.S. dollar is still strong. It's looking good. In fact, it is pumping. Yeah. Yeah. for the first time ever, I think there's parity between the euro and the dollar at the moment, not the first time ever, but first time in, like, far as I can remember.

Starting point is 00:08:50 Yeah, so the headline here, Euro tumbles to a 20-year low, putting parity with a dollar in sight. The Dixie, the DXY, which is a chart that we don't have up, but the basket, basically measures dollar strength versus a basket of other currencies, is continuing to increase. and I think this is relevant to the dollar milkshake theory. If people are familiar with that, we had Brett Johnson on the podcast forever ago to talk about what the dollar milkshake theory is. Basically, it's a general theory that in economic hardship conditions, there's a flight to dollars, which is what you would expect in a downturn. People just flight a dollar. But also because there's so much debt pent up in the system that when it comes time to pay the debts, it basically there's a squeeze on the dollar supply.

Starting point is 00:09:35 because everyone's trying to get their hands on dollars to pay back their debts. And so in bear markets, as we've seen in crypto, everyone, when time, when numbers go down, people have to pay back their debts. This is why there's a discount on staked ETH because people sell Staked ETH for ether because they need that liquidity. People are just selling assets for dollars because they need liquidity and therefore the dollar is really, really strong right now. Sadly, this is also an indication of future recession because as dollar strength goes up,

Starting point is 00:10:05 corporate profits go down, like real rates go down, et cetera, et cetera. And so it slows growth. High dollar value slows growth. And that triggers a recession in addition to all the other things that trigger recessions. The basic idea is the dollar drinks every other fiat currency's milkshake. That's why it's called the dollar milkshake theory. And we're seeing the euro at its lowest level since 2002. And yen is down even worse to its lowest level since 2001, which is basically.

Starting point is 00:10:35 pretty crazy. Another sign of recession, it feels like, is oil. So I remember we were very concerned about oil. I mean, economists were very concerned about the price of oil shooting up for all sorts of different reasons, of course, you know, war in Ukraine, other reasons as well. Now oil has just tumbled as much as 10%. I don't know about you, David, but around me, gas prices were just down on the week, down like 40 cents a gallon or something like that, 40, 45 cents a gallon. And And it's incredible how fast that is happening. But of course, oil demand being down is another sign of recession. It could be a sign of waning inflation, too. We don't know, because inflation itself is also a lagging indicator. What are your thoughts on this? Yeah, so this is a mixed data signal, right?

Starting point is 00:11:22 Oil prices are down because people are buying less oil because people are buying less in general because of, you know, the quote-unquote recession that we are currently in. You know, still debated whether in a recession or not. So demand for oil is down. But that's good because we need prices to go down because oil price goes down means food prices go down, which means inflation comes down, which is literally the only way out of this recession

Starting point is 00:11:47 is if we get inflation to come down. So like mixed signal here. And it's kind of the signal that you want to see. We want to see oil prices come down as a result of killing demand. And so like, you know, it kind of sucks that like we're having to, quell inflation by having a recession. But that's kind of the bargain that we made when we printed a bunch

Starting point is 00:12:07 of stimmy checks two years ago. This is definitely the bargain that Jerome Powell and the Central Bank explicitly wants to make. If you want more info on that, go tune into our Jim Bianco episode that we did a couple weeks ago where he's basically like the Fed has one big stick and it has to beat inflation over the head with it. And that stick is called recession. That stick is called making everyone feel bad so that they don't spend as much money and decreasing demand. That's the stick that we're getting beaten over the head with. So this is expected, as you'd say. A few interesting crypto numbers in the midst of all of this is, David, did you know that USCC, Circles USDC, is now on track to topple tether. USDT? I thought this would happen a couple

Starting point is 00:12:49 of years ago, right? Because just Circle is a regulatory, like from an assurances perspective, it's a more transparent dollar staple coin than Tether. It looks like it's happening now. I actually think it makes sense that Tether took such a long time to dethrone. Hasn't been dethroned yet. But like the regulatory gray area that Tether lives in actually is one of the reasons why it's got adopted by so many people outside of the United States. But as soon as like the United States takes a leadership position, which is being helped by

Starting point is 00:13:22 circle, like eventually the regulatory, once the regulatory arm comes in and like we all start to have regulatory fears people go from tether to USC so i mean the writing's been on the wall for a while eventually crypto was going to become big enough where regulatory reasons are concerned so you would naturally see that flow out of tether and into u sEC which is what happened by the way like tether has seen a decrease in total supply but u s c's market cap has grown by 8.27% since may highest level ever hit of total u.s.s supply 55.9 billion was hit on July 2nd. In contrast, UST suffered a 19% drop in total market cap and is currently at 66.14 billion. So, USC at basically 56 billion and Tether at 66 billion. So not far away.

Starting point is 00:14:11 You know what? All the crypto bulls that I know, even if they're exiting some of their, you know, positions, their core crypto holding positions, unless they need the money to go pay bills, they're not exiting to Fiat, to like dollars in a bank account. They're exiting to some. something like USDC or USDC or die, right, to these stablecoins. So it's always interesting to me in these, in these, even these bare market cycles, you do tend to see stable coin grow. These stable coins appreciate in terms of total market cap because that's where people are parking their money. Isn't USDC, like if you own buy USC and put it in your Ethereum wallet, which is, by the way, Ethereum is called an account-based ledger system as opposed to Bitcoin's

Starting point is 00:14:52 UTXO unspent transaction output system. Anyways. When you buy USC and put it in your Ethereum wallet, your Ethereum account, aren't you just using it? Isn't that like a proxy for a bank account? Yeah, it totally is. A bank account. Yeah, USC is one massive bank account. And then all USC account owners on Ethereum are one micro bank account. Totally. It's just another proxy for it. It is. But it's on better rails, right? So like, I could send you as much as I want at any point in time. There's no like banking hours. I don't have to go, like, show up with my ID to my bank in order to wire you funds. I can send it to any ether dress.

Starting point is 00:15:26 So it's still, like, USDC and stable coins are still a crypto superpower guys. This is still a use case the world hasn't woken up to. It's so much better than trying to wire money in the stupid traditional banking system. Ryan, I had to send a $10,000 wire to this angel investment this week, and no one knows where it went. It's just lost. I have to go call my bank. They have to go call their bank, and they're like, all right, like, where did this money go? Did you see, like, do you know of any mistake that was made?

Starting point is 00:15:56 Like, I have no clue. I have to go find that out. But it's just like, how do we just lose money? It's like, it's like, where to go? It's like, I can, you're still tracking. I can see, I can send a 10,000 USDC transfer on Ethereum and I can watch it penned in real time. And it's wherever it's going. The fact that it just like disappears and then it's like, oh, we lost it.

Starting point is 00:16:16 Like, this is ridiculous. It's funny. It's like, to be honest, David, even ignoring all the hassle, which is a massive hassle. to show up in a bank, present your ID, do the wire thing, the cost, five days it takes to get something internationally. Ignore all of that, okay? Just like, I am now more nervous to transfer a wire from one place to another than I am to send a crypto transaction. It used to be reversed to me. That's another, like, minor flippening.

Starting point is 00:16:44 I used to be terrified to send crypto. Like, double check. Let me send, like, the test transaction. Let me check this 10 times. Now, I'll send $1, then I'll send $10. Yeah, yeah. And now I still obviously check everything. And to make sure, like, user experience has gotten a little bit better.

Starting point is 00:17:00 And, like, the fact that I can see it instantly, I mean, if you're wiring money, who knows where it's going. Yeah. That is way more risky in my mind. That's been interesting, you know, flip that's happened in the last, you know, two or three years for me personally. Yeah, okay. Rocket pool.

Starting point is 00:17:14 Back to more crypto numbers. 200K, ETH staked. That's a big milestone, too. Another crypto number we are looking at. And then also, EFIPA. Ns is still on a tear. What's happening with the Ns? They just released their June stats. That is a bright spot in the NFT market. Yeah. So, ENS June numbers, 122,000 new dot-eath registrations, $3.3 million in protocol revenue, all going to the Dow. That's 2,500 ETH in revenue. 25,000 new

Starting point is 00:17:44 ethos accounts with at least one new EMS name. So that's 25,000 Ethereum wallet with a new ENS name. And Ryan, that was just June. We're one week into July. And you can see that tiny little bar chart down in the bottom right corner. So far, seven days into July, we are basically where all of June was. So the last seven days, we still have three more weeks. So the June, the July, the July number is finish. We're basically on par. The first week of July is basically on par with all of June. David, David, you know anyone playing this game? Oh, I know. Yes. A lot of my, And there have been a lot of my, like, crypto friends that I've been trying to, they, they, I tried to get them into Defy Summer. I tried to get them into NFTs. They did get into NFTs and then got burned. Sorry about that.

Starting point is 00:18:26 But then of their own accord, without, of their own accord, without me, like, kicking them in the butt. They're all playing the ENS game. And so, like, yeah, they have, like, they've registered a ton of ENS names. They're sitting on a lot of them. Yeah, they're playing it. And so people have found, like, a new market to play in, like, NFT games. Look, this has an analog, right? Domain names are valuable.coms are valuable. Dot nets are valuable. They weren't like, and you could just see this. Obviously, they're going to be valuable in crypto and for various things.

Starting point is 00:18:57 And, you know, anyway, Dow's, NFTs, every single piece of property will want to have its own. Dot-Eath name. That is the bullcase for all of this. I don't play in this in the speculation, though, David. I just, you know, we collect a few things here and there. We got bankless. I got, you know, my initials, a few other things. but I'm not playing these games.

Starting point is 00:19:17 Yeah, you saw David.eath got bought for 32Eath. Oh my God, really? Yeah. Recently? Yeah, this last week, yeah. I wonder what Ryan. Dot, Heath goes for. Do you think it's worth more or less?

Starting point is 00:19:28 Less than 32. I think David's got to be worth more. There's more Davids. Yeah. There's better Davids than are Ryan's in crypto. Good take, Ryan. Good take. All right, guys, we got so much more to cover the contagion that has spread.

Starting point is 00:19:40 Maybe this is the last week that we'll have to talk about that, but another C-5 bank going bust. This is the conclusion of Voyager, and we'll talk about that. Also, BlockFi gets their bailout, some good news there. And crypto banks are consolidating. We're going to talk about the big winners and what that means. We will get back to all of these things. But first, we want to tell you about these fantastic sponsors to help provide some tools to help you go bankless.

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Starting point is 00:21:51 and borrowing service went bust. We've been talking about that. They had exposure to three-erros capital. Here's how this resolved. You know, though, David, I feel like all of these centralized C-Fi lending services are kind of coming out of the woodwork a little bit, like ones that I didn't really know much about. And I don't know about you, but I didn't know much about Voyager. Did you know anything about Voyager? All crypto banks. Yeah, right? It's like, I, I know the block fives and the nexus and such. I was not covering, like, following Voyager. I was just taking a scan at their website.

Starting point is 00:22:21 Look, award-winning crypto app, 100 digital assets. Look how nice this looks. Looks like a nice fintech platform. I get my debit card. It looks nice, safe and secure. I can go take a look at the products here behind this. Don't forget to click on the token tab, Brian. There's a token tab, too.

Starting point is 00:22:41 Let me, let's talk about the products. get started in under three minutes. Look at these annualized rewards here. All very nice. They do have a token, the standard royalty token. All right. The Voyager token, meet the Voyager token. Boost your crypto yield with the Voyager token.

Starting point is 00:22:58 All right. Crypto banks like their loyalty token. Where do I buy? You can stake it, of course, because why not? You go to the About section and take a look at the team. Oh, look. These guys look competent. Look at those suits.

Starting point is 00:23:09 They all wear ties, Ryan. They all weigh tie. Biggest red flag in the universe. though. Okay. This gentleman who's the CEO is a brokerage and market structure veteran who founded Lightspeed Financial. Previously, he worked as the CEO at E-Trade, professional trading. Oh my God, this is great. This looks like a fintech platform meets crypto. It's got the LinkedIn button. Yeah, they must keep my money secure. It must be safe to deposit and earn like eight, nine percent interest. Wow. Yeah, look at this, man. Eight percent on Dap coin. Eight percent on ape coin.

Starting point is 00:23:40 8% on ap coin, dear God. 9% on USC. Look these tiers. You know, all looks very standard. Wow. All looks very, like fantastic, nice and shrink-wrapped. And by the way, Voyager is a publicly traded company. Oh, yeah, I forgot about that.

Starting point is 00:23:55 This is listed on the Toronto Stock Exchange. So you've got that era of legitimacy, too. But why don't you take us through? What happened with Voyager? Yeah, so on the theme of the last few weeks, we have to go back a few weeks because these things happen over, you know, longer than seven days. On June 14th, Forager releases a digital, an update on their asset and risk management policies, which I'm going to pull out a few quotes to read from.

Starting point is 00:24:19 As a public company, Voyager operates with a consistently high level of transparency, providing regular quarterly financial statements detailing the company's financial position and financial statements to closer surrounding risk management practices and counterparty exposure. Forager differentiates itself through a straightforward low-risk approach to lending and asset management by working with a select group of reputable counterparties, reputable counterparties, low risk, which are all vetted through extensive due diligence by its risk committees. Voyager holds a strong position in the crypto industry. Not only were we among the first who go public and provide full balance sheet transparency, our leadership also has

Starting point is 00:24:59 deep financial expertise across the sector and has led companies through multiple market cycles, says Steve Elrich, Elrich, chief executive officer and co-founder of Voyager. The company is well capitalized and in a good position to weather this market cycle

Starting point is 00:25:14 and protect customer assets. Well, all this sounds great, David. And this sounds so good. What could go wrong? It's Voyager's goal to continue to build secure products and services as well as build trust

Starting point is 00:25:26 and leadership in the cryptocurrency industry. Okay, reminder, that was June 14th. That was about three weeks ago. June 22nd. Let's go forward. June 22nd. The news breaks. Voyager digital stock plunges after disclosing over $660 million of exposure in a uncollateralized loan to three arrows capital, an unsecured loan. And so this balance included $350 million of U.S.D.C. and 15,250 BTC loaned to three arrows capital. So that news got released on June 22nd.

Starting point is 00:26:00 That's pretty unique, too, that uncollateralized loan piece of it, right? Like Blockfly ran into. trouble, but their loans were completely collateralized to three hours capital. Yeah. Okay, so July 6th, and here's the news of this week, Voyager goes bankrupt. And so they have filed for Chapter 11 bankruptcy. And so, again, a few quotes I'm going to pull out. Cryptolender and broker Voyager Digital has filed for Chapter 11 bankruptcy, estimating that it has more than a hundred thousand creditors, that's retail.

Starting point is 00:26:31 The single largest creditor is Alameda Research with unsecured loans. of $75 million. Voyager Digital is a publicly traded company listed on Toronto Stock Exchange. The company has also issued VGX token allowing users to earn boosted rewards, high referral bonuses, and better pricing on trades. On June

Starting point is 00:26:49 22nd, the company announced that his exposure to Thrio's Capital listed the assets that I just mentioned a second ago. And on July 2nd, Singapore-based Thurro's Capital filed for Chapter 15 bankruptcy, which allows a company to shield U.S. assets and block creditors like Voyager digital from filing lawsuits.

Starting point is 00:27:08 And so on a July 6th press release, Voyager announces that has commenced a voluntary Chapter 11 bankruptcy to provide maximum values for stakeholders. Under this plan, which is subject to change and requires court approval, customers with their crypto account, so if you're a retail investor, investor, if you're a retail depositor into Voyager, customers with their crypto in their account will receive an exchange of a combination of the crypto in their account as much as they can get back from Voyager, proceeds from the Three Arrow's Capital Recovery, which could be zero, common shares in a newly reorganized company and more Voyager tokens.

Starting point is 00:27:44 So common shares in a newly reorganized company. In order to pay back the debts that Voyager owes their retail customer, they're basically giving them equity for a new company. It's like a future IOU. It's like, sorry, we don't have any money to give you, but we can print equity and give that to you instead. And so the current state of Voyager is that they have about 100, $110 million of cash and crypto assets on hand.

Starting point is 00:28:07 Remember, they gave $3.0.660 million. And they said that they will provide liquidity to support day-to-day operations, so they're going to pay their employees. And then moving on to the last quote that'll read, Voyager has approximately $1.3 billion of crypto assets on its platform plus claims against three errors capital for more than $650 million. So, like, they're not completely, like, they have assets. They have, like, I would say like 50% to two-thirds solvency, but they're missing, like, a big chunk, missing a big chunk.

Starting point is 00:28:40 So the big picture story here is crypto market goes down and then press release to reassure everyone in Voyager. Look, we have our risk processes covered. We're solvent. Everything's fine. We're responsible company. Hey, look, we're publicly traded. Depositors. Don't worry about it.

Starting point is 00:28:58 And of course, if you're a crypto bank in this situation, you kind of have to say these things to project confidence. that you don't get a bank run. Right. Under, behind the scenes, they had a number of uncollateralized loans to like Alameda group, also three-earest capital. These loans were not low risk at all, particularly the one to three-hours capital. That went completely bust. And now if you are a depositor into Voyager, so retail investor, you were looking at the website

Starting point is 00:29:30 earlier, David, with those attractive returns and look at the sleek interface. And you got the mobile experience, and it's an easy one button click to deposit. Well, what do you get as a result? You ain't getting your money back. What you're getting instead is whatever crypto assets are maybe remaining, some percentage of 100% that you deposited, the proceeds from some sort of three-error's capital recovery, three-eers capital owes them $650 million, will they get any of that back? Who knows?

Starting point is 00:29:59 Maybe Suzu's yacht is for sale. Maybe you get a portion from that. I don't know. Common shares in a newly reorganized company, whatever that's worth, and Voyager tokens. That's what you get. I don't know if you remember back in like, was it like 2016? I'm going back in my past year. There was a BitFenix, which had a major hack. It was BitFenix, and they like lost funds as a result. So they lost depositors money. And they did something similar where they kind of spun out a token and gave that to some of their depositors. It's funny, last cycle, some crypto banks went bust because they actually got hacked, lost

Starting point is 00:30:41 funds. This goes all the way back to Mount Docs. This cycle, what's happening is some of these crypto banks, these centralized lending providers, were completely irresponsible with their clients' funds and lost it that way. But it's kind of funny how it's playing out in a similar way that, you get tokens, you new equity. It actually worked out for some of the BitFenex depositors in that over time, their tokens were actually worth more. BitFinex did pay their customers back. They made their customers whole. It took a number of years, but they got there. Yes. This could have a happyish ending, I suppose. It really depends on what Voyager and the management team does from here. And if they're able to unbury themselves and add more value

Starting point is 00:31:22 to this equity. Not a good place to be if you're a depositor, though. Absolutely not. And of course, because this is contagion, we're bleeding right over into the story of three, Theodore Capital, Theodore Capital has formally filed bankruptcy, so this story is slowly coming to a close, although it will definitely take a while to play out because there's going to be a fight in court. The Fero's Capital has petitioned the British Virgin Isles Court for bankruptcy, and the reason why you would want to do this is, well, because you have to, first off, but also they say that without the relief requested herein, this is in their filing, creditors may pursue a value

Starting point is 00:31:58 destructive race to the courthouse to exercise rights in a manner that would enhance their own position vis-a-vis other similarly situated creditors. Basically, three-rose capital owes a bunch of money to a bunch of people, and all of these people, all these entities are racing to seize three-oes-capital assets the fastest so that they could get their money back before other people get their room. Like, there's like, you know, $10 billion owed, and there's like $1 billion dollars of assets left, and everyone's trying to get that $1 billion dollars of assets left. And so because of this race, it would create capital destruction. It would force liquidation at unfavorable rates, et cetera, et cetera.

Starting point is 00:32:33 And so they are filing for bankruptcy to preserve as much capital as possible, knowing full well it's ultimately going to get liquidated, but they will just want to liquidate it for the most amount of value possible so that they can make their creditors as whole as possible. But the point I want to make is that this is a lesson that when markets break, things revert back to lawyers and courts. This is what we saw in 2008. there is still, to this day, Ryan, fallout from 2008,

Starting point is 00:33:00 going through court proceedings because of the mess, the absolute spaghetti mess of the credit default swap era of the 2008. And so this is exactly what's happening to Thurro's Capital. And when markets break, ultimately we have to have lawyers say, like, okay, these people are owed this and these people are owed that. And so this is an example of things we don't want to have happen. Do you know, I want to put one asterix on that, which is like, that's true in traditional finance and centralized markets.

Starting point is 00:33:34 That does not have to be true in defy. Right? Number one, defy held up better. Number two, the code is the liquidator and the settlement engine. The code is the core. In the Ethereum world, in the defy world, the code is actually the law. And so you wouldn't see that if you're liquidating a maker, ETH, you know, collateral loan. First of all, that should happen in an orderly way.

Starting point is 00:33:58 Second of all, it'll all be settled on chain, completely transparently. We don't have to go to the court system. That's where things get very expensive and inefficient. It's going back to the court system and having lawyers in nation states try to arbitrate all of this stuff. And that is exactly what we're trying to avoid with defy, which, again, we'll say, has held up very well through this liquidation cycle. I think Leighton Kusak has a take on that later that will get too. But one other question I have in my mind, David, is, look, these are all three hours capitals NFT holdings. Oh, no. Look, man, look at all the ARP locks that they purchased, autoglyphs, sport-a yachts, crummy swignels. Like, what's going to happen to these things?

Starting point is 00:34:40 And you know what this reminds me of-Kraptopunks? Do you know what? Hang on, for the listeners out there, we're looking at a pie chart. And so all of three-oes capitals, NFT holdings through their Starry Night Fund, I'm pretty sure. We got 40.7 percent. of their NFT holdings are crypto punks. Ow, my bags. It's going to be liquidated, brother. Art blocks curated is 33.5% of their holdings. They got some pegs, which I don't know what that is.

Starting point is 00:35:06 Mutant ape, yacht clubs. They got a few autoglyphs, some other things. They're going to liquidate so many cryptopunks. All this stuff looks good on the way up. It doesn't look so good on the way down. I'm reminded by this. To me, this was like, peak NFT season. Do you remember this tweet from Suu?

Starting point is 00:35:23 Right. They spent so much money on that. Are we looking at an art blocks NFTs? Is that what this is? That is a ringer. That is an art block. It's a ringer. Which was, you know, peak NFT season. This was a tweet from Suzu from August 27th, almost a year ago. The thesis, we like the goose. It's because this random generated NFT art looks like a goose. And I like it too. But now it is part of that pie chart, David, is being liquidated. I don't know that I like it for like $10 million. or whatever was paid for this thing at the time. So that's what's happening with three hours capital. A few other contagion events. Hang on, hang on, hang on. I'm going to go find out how much that goose was sold for. You know where I found out? Where?

Starting point is 00:36:10 Metaversal. Thanks, William. Hey, Ryan, you want to know how much that goose was sold for? I'm super curious. Can I guess, though? Sure. I'm going to guess, I said 10 million just now. I'm going to guess actually 15 millions.

Starting point is 00:36:22 I'm going to boost that up. 5.66 million, 1,800 ether. That's a deal. So what's it worth now? I don't think very much. I'm going to go with like under half a million dollars. Got bought for 5.5 million, 5.6, under half a million dollars. Do you know one thing, if it's Susie's personal funds, but now that you know kind of the history of

Starting point is 00:36:47 three hours capital, and this is like some retail money went into this. Right. Yes. If you deposited your money into Voyagers, you helped Three O's Capital buy the goose. Did you know you were doing that? They borrowed your money and bought NFTs with it. And now those NFTs are down bad. Things got silly, man. Things got very silly. But some consolidation is happening in the crypto banking system, at least the strong crypto banks, the ones that have survived, the binances of the world. We talked to CZ last Friday. He said, he's looking at things. Sandbank bin freed from FTX, we'll talk about what he's doing with the BlockFi deal, but also Nexo, which is a centralized lending and borrowing platform, a CFi crypto bank, has come out of this stronger and is now in the process of potentially acquiring crypto lender Vold. This is another one I haven't heard of. I haven't heard of Vold, but it looks like they're sniping

Starting point is 00:37:46 those assets. All crypto banks are coming out of the woodworks. So we're seeing this consolidating. I think Nexo is going to come out of this stronger. I think FDX is going to come out of this stronger. Binance is going to come out of this stronger. Anyone who wasn't irresponsible during the bear market, if you weren't irresponsible or during the bull market, if you weren't irresponsible during the bull market, if you have some cash on reserve,

Starting point is 00:38:08 if you didn't go margin long, if you didn't bet everything, 100% of your net worth, you're going to come out of this stronger as well. And that is the lesson that we've learned every single bull market, don't we? if I had my money in NXO, I'd be like, oh, thanks guys. That'd be a good thing. Thank you. I guess.

Starting point is 00:38:26 It's a crapshoot, though. Could you guess which one? You don't know until, like, you don't know until after it's too late. Exactly. And so, like, it's like, all right, like, you want to get your yield. You're going to use a C-Fi lender. You got C-Fi lender. You got, I don't know, name some other ones for me.

Starting point is 00:38:42 You got all these ones. Voyager. It's just like, place your bets. Well, Voyager was a crypto exchange. They weren't even a lender. Oh, they were a lender. They were a lender. too. Yeah, you're right. So it's like, you know, place your bets, which one of these is

Starting point is 00:38:53 responsible and which one's not. Because the marketing all sounds the same. The website looks the same. The executives that they hire all are wear suits and ties and look very official. So you have no idea until something like this happens. That's pretty rough. It's a pretty rough existence. What happened to the BlockFi story though? We keep on reporting on this contagion every single week because again, as soon as things goes to court, it takes a long time to play out. But at least one part of this story we are going to formally wrap up probably which is the block five side of these things. FtX and BlockFi have reached a deal for up to but not at $240 million. So they are acquiring BlockFi all of BlockFi right like all of it for up to 240 million dollars which also

Starting point is 00:39:38 gives BlockFi a $400 million revolving credit facility basically a loan to allow for liquidity for their users. And so this $240 million valuation depends on startups on BlockFi's performance triggers. So they need to hit certain milestones. And if they don't hit certain milestones, then that valuation goes down. What these details are undisclosed. But there's rumors that the lowest end of this thing is a $25 million valuation. And so here's a statement out of a quote, from this Blockworks article, although Prince, Zach Prince, the CEO of Block 5, did not disclose the lower end

Starting point is 00:40:21 of the acquisition. CNBC reported that the deal was pegged at $25 million. Prince denied CNBC's reporting, which he dubbed unfounded, which, I mean, it's part of par for the course for these, like, C-Fi banks that say, like, trying to preserve, like... And maybe it is, maybe it's not, we don't know.

Starting point is 00:40:39 But you know FDX is getting a great deal on this, right? They are in the driver's seat. they set the terms of the negotiation like Darth Vader's style coming in here and being like, hey, this is what we're going to do for you. Do you know what's great about this, though, David, is in this BlockFi situation because there's gradients of how irresponsible or even responsible that CFI lenders actually were, right? So you have NEXO, which is still left standing. They probably did an okay job as evidence.

Starting point is 00:41:07 We don't know all of the details, but as evidenced by the fact that they're still standing in their building. FDX did it fine job managing risk. Binance did a fine job managing risk, it seems. Celsius on the other side did a terrible job managing risk. The only one worse that we've seen so far is probably Voyager, which was just handing out unsecured loans. Well, through us capital was the worst.

Starting point is 00:41:31 Yeah, of course. Yeah, on the other side of things. But they were not accepting deposits directly from retail, even though they were behind this. No, they were accepting deposits from resorts from. Retail aggregators. Yeah, exactly. It's true.

Starting point is 00:41:44 Retail aggregators gave money to three euros capital. Again, we said this in the last roll-up. Three-e-euro's capital was the contagion. Yeah, like that seven percent that you saw on Voyager, three-year-os capital. That like, whatever percent you saw on Celsius, three-euro's capital. Well, except Celsius was doing some other things. Oh, yeah, that was different. They were like, they were in staking assets.

Starting point is 00:42:04 They were like betting in these weird speculative defy things. They were doing, they were off the, you know, doing something else completely. capital and Celsius. But BlockFi, okay, they were kind of in the middle. They did some things that were irresponsible. I'm sure that they regret doing. But in this case, depositors' funds are going to be safe. FDX has bailed them out. It's looking good. If you have your funds in BlockFi, you should be able to get all of your money back. They never had to pause anything. So there's kind of gradients, right? We see like really bad case scenarios. We see decent risk management coming out of this stronger on the other side. And we see

Starting point is 00:42:40 situations like Block 5, which are kind of in the middle. They definitely failed, but not completely. This is the last maybe, I hope, this won't be the last time we hear about Celsius. But what happened this week with Celsius, David? Yeah, so Celsius famously has this Maker Dow vault. They have a bunch of

Starting point is 00:42:56 WBT inside and they pulled out a bunch of of dye. As of very recently, they have fully paid off their entire debt. So they no longer have debt in their vault. Is that a good thing? Well, it sounds like a good thing.

Starting point is 00:43:12 Basically, like, my interpretation is they are waving the white flag and say, like, we have had enough. Like, we are out. We are liquidating at whatever price. So they're selling all this. We're selling. And so Hal Press says it does indeed look like Celsius is prepared to sell about $500 million with the BTC. That was tweeted out, it was a couple hours ago from the time of recording. And so, like, it's basically like a change of pace where Celsius previously was like agro-leveraged yield farming.

Starting point is 00:43:37 now they are being hyper-conservative at like suboptimal prices. And so because of, because of this like change in demeanor, my opinion is that they and other people are saying like, well, they're kind of going to close up shop and this is what they're doing. This, that's just speculation. But the idea is the change of like we're going, we were going to try and have this business of leverage yield farming, but now we're just going to pay back all debt possible and just like liquidate whatever assets we have is like, to me, they're just waving the white

Starting point is 00:44:07 flag. And so this is a tweet from like crypto. CEL, squeezing on vault repayment is comical when considering that this is likely a move in preparation for bankruptcy filing. I think sell is the Celsius token, right? Correct. And so they're talking about price action here. It all begs the question of what in the world is the cell loyalty coin actually worth, right? What is the Voyager loyalty coin that depositors are getting? What is that worth in this world? the truth is nobody actually knows. Not equity. Whatever it is, it's not equity.

Starting point is 00:44:42 Anyways, that is all of the contagion once again. It'll probably be more things to talk about next week, but at least some of these stories are coming to a close. Coming up next in the show, we're going to have to burn through these because we took a really long time on the market section and contagion section like I would imagine we would.

Starting point is 00:44:58 But NFTs on Facebook, crazy that that's not the biggest news of the week. Reddit, also deploying NFTs on Polygon, also crazy news. There's crypto phone wars to talk about. There's people getting into the hardware game and also merge updates. Like actually, pick news.

Starting point is 00:45:15 But, you know, contagion. If it bleeds, it leads, Ryan. If it bleeds, it leads. So we're going to get to all of that news right after we get to some of these fantastic sponsors that make the show possible. Arbitrum is an Ethereum layer two scaling solution that is going to completely change how we use

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Starting point is 00:47:05 We have successfully merged, Sopolia. The second of three test nets has finally completed. That went through a couple days ago. And it was successful. There were a few hiccups here and there, but they were not related to the merge. And so the general consensus is that this is good news. And whatever the hiccups were,

Starting point is 00:47:26 they were unrelated to actual merge progress. So here's Terence.e., who I believe works at Prismatic. Yeah, I'm pretty sure that's true. and he says merge transition itself was a success. 25 to 30% of the validators went online shortly after the merge. The offline validators were due to wrong configurations. Since then, the offline parties have updated the configurations and validators are up.

Starting point is 00:47:48 So, like, there are no client bugs, and the hiccups will not delay the merge. And so, cool, good news. We are at 95% participation rate, so that's like a 95% success rate, which is pretty damn good. The numbers that you don't want to see are 60%. percent or below, I'd say like anything above like 92 and a half percent-ish feels pretty damn good. 95 percent is pretty good. David, what's the next one remind us?

Starting point is 00:48:12 So we've got these are dress rehearsals, right? We've got two down. Is it one left? One left. The gorely test net, the last test net. And this is the one where like, oh, this one makes it real. And so the state of the aftermath of the goarly test net, whether it's positive or negative, will become extremely indicative of the actual merge.

Starting point is 00:48:32 If it's a bad result, then we might kick the test net, the merge back one or two months. If it's a good result, like, yo, like late August, early September. Don't say it. Stop. Late August, early September. I didn't say dates. I said late August, early September. That's a date range, my friend.

Starting point is 00:48:51 Anyways, when the goarly merge happened, TBD on the actual date, it has to be a date decided. The date will probably be decided. When is the next all-core devs call? A week from today. We are live streaming this with the East Stakers group. Oh, we are? Do you not know that? Oh, yeah.

Starting point is 00:49:07 No, when is that? Well, Ryan, in about seven days, the All-Curdivs call will determine when the GORLY test net is. I should listen to these roll-ups more closely. Yeah, if it's not decided then, it'll be decided at a later Al-Corpard steps call. But when the Gourly TestNet does merge, we will be live-sharing it with the East Stakers group and a bunch of other people. Maybe we'll invite Hal Press on because it's good timing then. and that's when we get to see. Oh, let's definitely have Hell Press back.

Starting point is 00:49:32 Yeah, let's do that. I want to see if he's buying in yet. Yeah. What's happening? If he's still trying to bet on the merge. Oh, I got dinner with Hal Press not too long ago. I got a bunch of Alpha. I haven't told you yet.

Starting point is 00:49:41 All right. I want to hear that too after the show. Yeah. We'll leave it to a debrief, David, on the premium podcast feed. Guys, let's talk about some news that went by the wayside. Actually, we're totally going to do that. Hell Press Alpha League on the premium feed.

Starting point is 00:49:56 No, we'll open that up to everyone. Facebook is testing Ethereum and Polygon NFTs on its profile. Facebook, this is the company, now called meta, but Facebook is the platform with 2 billion users worldwide. They're getting into NFTs, and no one noticed this week. What's happening here? So, I mean, we already reported on the Instagram integration of NFTs, and it's more or less the same thing, but for Facebook.

Starting point is 00:50:22 So users will have a digital collectible tab on their Facebook profiles where they can showcase their NFTs, and users will be able to connect their wallets to their Facebook profiles and they'll be able to turn their NFTs into Facebook posts which can be reacted to, liked on, commented on. It's basically just like kind of basic

Starting point is 00:50:38 NFT integration into Facebook. So like that's awesome. Facebook's huge, right? Now you buy an NFT for your mom. Right. For a Mother's Day, right? And make a post about it. Yeah, but the thing is like,

Starting point is 00:50:50 who's left on Facebook? It's like our crazy aunts and parents and stuff. I don't know. What's the last time you logged into Facebook? Oh, forever ago, dude. You're heavy Instagram, though. Yeah, I'm pretty heavy on Instagram. Don't follow me.

Starting point is 00:51:04 Please don't follow me. I deny every single request. Not you. Oh. Listener. Wait, what's the content there? Now you've got me curious. Yeah, no, you can follow me.

Starting point is 00:51:16 I get a bunch of Instagram follow requests. I delete every single one, so don't try it. NFTs on Facebook, though. That's a big deal, man. Yeah. I mean, is it, though? because now all of our aunts are going to reach out to us and be like, son, can you help me set up my crypto wallet so I can share these NFTs? Dude, why are you making fun of that? I'm so happy to help all my aunts and uncles and everyone who wants to.

Starting point is 00:51:38 I will help you. Good luck. Good luck for that. Let me know how that goes. Don't follow David on Instagram. Don't follow me on Instagram. Crypto phone wars. Did you see that this week? Oh, by the way, we forgot to look at this. These are with the NFTs for those looking on Facebook. This is what they're going to look like. like in Facebook. See, they're just normal pictures, but they just have like the digital collectible hexagon checkmark. Yes. The only thing. Hey, these aren't just JPEGs, okay? This is property rights. Verified. Verified JPEGs. You know what? It's cooking up, uh, heating up though. It's the crypto phone wars. Okay. Solana just released a, uh, flagship Android phone. I think they bought this

Starting point is 00:52:17 company called, um, Sega. The thesis here from Anatoli, the founder of Solana, almost seven billion people use smartphones around the world and more than 100 million people hold digital crypto assets. Both of these will continue to grow. So Solana should own its own in-house phone company in order to deploy this. So far, David, sales not looking too good. You'd actually see this on chain. Sales, pre-sales have been about 2.5,000 K pre-orders, which kind of bics the question of like, does a blockchain really need to have its own phone? I know Anatoly has a history of, like, Qualcomm, and he's very close to this. So maybe he feels differently. But I got to tell you, this would feel really weird if the Ethereum Foundation was like,

Starting point is 00:53:03 and now we have a phone. The Ethereum phone. We bought some like Android, you know, startup company. It feels very strange. I'm not going to say it. No, I'm going to say it. It feels a little EOS, David, to me. Remember that they were off buying, like, voice.com? Yeah. And, you know, social networks and all these things, because they didn't know what else to do with their capital and they had so much of it. Maybe there's a justification for this. Maybe I'm wrong. I got to be honest, though, I don't really get it. It seems like a massive distraction to a blockchain network. The answer here is what is the unique properties of the hardware of the Solana phone versus a normal phone? Because that's the only reason why you would get into the

Starting point is 00:53:46 hardware game. A hardware game, yeah. Salana, Ethereum blockchains, these things are software. So you want software in your phone. What is the different? Like we can have a secure enclave to have like verifiably like basically a built-in hardware wallet in your phone which is like separated and compartmentalized from the rest of the phone. That's the only like hardware thing I can really think of that would be like different for that would enable like a blockchain phone. Other than that, it's only software. It's that's blockchain phones have been tried. They've never done well. They've never done well. They've never done well. Now this is a different strategy. It's interesting. It's the same week. This is why we call it the wars because there's his size to this. So Polygon is taking a different approach to the mobile phone

Starting point is 00:54:29 wars. Here's what he says. Mass adoption of Web3 will happen on mobile. Polygon is prepared for it. Our strategy is not to make our own devices. Interesting contrast. Instead, we will integrate with existing manufacturers. Today, we are proud to announce our first major integration. This is the HTC desire, which is going to be a metaverse phone with Ethereum and Polygon support. So the difference in strategy here is they are not getting into the hardware game. They're not acquiring anything. They're partnering with existing phone manufacturers and phone builders. And to me, this makes a bit more sense. But I guess we'll have to see these strategies play out and, you know, could be proven wrong. Ryan, one does not just make a phone. It's just not what you do. It's a bore me or mean.

Starting point is 00:55:14 One does not just make a phone? Yeah, that's exactly right. Like, that's hard. That's an extremely saturated market. You're going up against like HTC, you're going up against Apple. Like you don't, you don't have a competitive advantage just because you also have a blockchain ecosystem. That blockchain ecosystem does nothing for you. So it makes sense to like what Polygon should do what Polygon does best, which is build software, and they should partner with somebody that does hardware really, really good, like HTC. So a few more details. HTC preloaded its 4.6 inch phone with applications from its metaverse arm Viviverse, offering users what it's called a rich MetaVeVeverse. experience without a VR headset. With Viviverse apps and buy VVVW wallets built into phone,

Starting point is 00:55:55 users can create virtual avatars, manage crypto assets, including non-fundable tokens and cryptocurrencies on Ethereum and Polygon the company said in a press release. That seems to make much more common sense to me. Hey, Bankless Nation, are David and I missing something? Tell us. I mean, I'm not a hardware expert. Tell us some comments. Actually, I have built a computer before. I know something. Look, YouTube commenters will tell us. For wrong, David. Even if we're right, they'll still say we're wrong. The alpha's always in the YouTube comments, isn't it? Talk about this.

Starting point is 00:56:24 This is a, you know, a quick thing, but I think worth talking about immutable with a Fiat off ramp. What's this? Right. Okay, so Immutable tweets out, major update, ETH off ramp is now available to any developer building on an immutable X power platform. Developers can enable their users to sell layer two ether and have their proceeds to deposit directly into their bank account.

Starting point is 00:56:42 Okay, so you know how we talked about Juno, going from your checking account straight to a layer two? This is the opposite. So if you have Ether on Immutable, you have, you can go from Immutable to your bank account. Why would you want this? Well, imagine you're somebody who does not care about crypto, but you do have this crypto game that you really want to play.

Starting point is 00:56:59 I can't imagine that. I can't get in that headspace, sir. But go on. And you keep on playing this crypto game, and you acquire a bunch of assets. And you're like, oh, these assets that I've acquired are like, I can get like $200 into my bank account. Now you can, with a snap of your fingers,

Starting point is 00:57:12 go from the gaming assets that you just acquired, sell them on some marketplace, which Immutable already has built. That's already done. Turn that into layer two ether. and then send that money straight into your bank account. So that is a user acquisition strategy. It's an integration strategy.

Starting point is 00:57:26 It's an onboarding strategy. And it's also a Trojan horse, Ryan, for a bankless life. Because first you come in, you play a bunch of games, make a bunch of assets, sell a bunch of eth, put your money back in the bank account. And then you're like, well, wait a second. But what about all that defy stuff? And then all of a sudden, you're a bankless person. This crypto thing becomes really real when people start earning money in it.

Starting point is 00:57:49 So you're earning these crazy expensive gaming items, and then you can convert that to go pay your rent, pay your mortgage, buy something. That's when all of this becomes real. If Facebook wasn't enough Reddit, 400,000, over 400,000 monthly active users is launching an NFT marketplace on Polygon. They're using Polygon for that.

Starting point is 00:58:10 Pretty big deal to me. They're starting very small, David, though. They're starting with one NFT community, a small set of avatars. But I don't know if you've ever seen this. in Reddit. There's the ability to create your own avatar. And so they are going to, right now, this is not fully NFT enabled, but it's going to be such that you can select a collectible that is an NFT and set that as your avatars. They're going to be selling these NFTs as well.

Starting point is 00:58:36 And they're going to be partnering with artists, a 50-50 revenue split on transaction sales. So anytime a piece of art is sold on OpenC, then the artist gets 50% of the transaction. transaction sales on that. So kind of a unique new model that Reddit is now experimenting and I'm curious to see where this goes. That is kind of the NFT adoption that we're really looking for. Rather than like an NFT artist going straight to the blockchain or straight to some like, you know, front end, they're just going to more, you know, obfuscated platforms, abstracted platforms like Reddit and just like ultimately things settled down back to the blockchain, but so much of the blockchain is hidden the way it should be anyways in the first place.

Starting point is 00:59:19 Like, if you think the future of NFTs are people, like, going to OpenC and buying NFTs, that's not the future of NFTs. It's, like, aggregators, like, Reddit who use PolyGon and, like, Mintin in the back end and then just display the thing on the front end. Yeah, like, you can buy these things with the credit cards, like $25 in a credit card. Yeah. Done. Don't even know you're on a blockchain. 100%. So that is just user acquisition right then and there.

Starting point is 00:59:43 Talk to me about more NFT stuff in the moonbird world. Is Moonbirds moon? Is that a thing? Yeah. So apparently the moonbird floor went up. And so somebody asked why. And somebody responded with a picture of a trademark, a trademark filing system. So there's a lot of texts here.

Starting point is 01:00:03 So I read what they were filing a trademark for. It's called Moonbird Ravens. It's basically an online NFT marketplace. The issuance of possible of currency, so like maybe like a Moonbird ERC20 AirDrop. There's also online art galas. services that are part of this like spec for their trademark. They want to create a virtual environment in the name of an online community for registered users to collaborate, share,

Starting point is 01:00:28 and comment on digital media, and also with social networking services. So moonbirds filed a patent called Moonbird Ravens that does all of these things. So basically they're making a Metaverse. So incoming Moonbirds token and Moonbird Metaverse, cool. There you go. Kevin Rose has been busy. We'll have to bring them back and see what he's up to. Also, do you remember that Axi story? the bridge hack, what happened there? Some details broke about what actually happened. It's kind of a crazy story. Yeah, so no one really knew how the bridge got exploited.

Starting point is 01:00:57 We just knew that it did get exploited. Apparently, we found out. And so one of the AXE people that was in charge of running the bridge nodes applied for a job that involved him downloading a PDF. And so that PDF had corrupted code in it and that corrode. And so this guy was specifically targeted

Starting point is 01:01:18 by the Lazarus group, by the way. The Lazarus group is that North Korean hacking group. So this Axi engineer was targeted by North Korea. So I'm applying to an external job, right? Explying to an external job. And this job application had him download a PDF. And that PDF had corrupted code in a weird code magic that was able to expose the private keys to the validator

Starting point is 01:01:40 and allowed for North Korea to drain the Axi Infinity Bridge. Right. I knew that a Doc X file could have bad, like malicious code in it. I did not know that a PDF could have malicious code in it. That is news to me. What file format is safe? Are there any safe file format? JPEGs are still safe, David.

Starting point is 01:01:58 JPEGs are safe. All your NFTs and JPEGs are still safe 100%. Gifts are safe. Beyond that, I can't tell you. Don't download anything. Stop using the internet, sir. That's what you have to do. It's serious, though.

Starting point is 01:02:10 I mean, this is a $540 million hack. and an individual being targeted in this way is a pretty sophisticated attack. It still kind of boggles my mind. And I mean, people in crypto have to be very careful. Right. And anyways, speaking of being careful and how crypto people need to do more of that, Uprise, again, a crypto bank or crypto investment fund, I don't even know, but some entity called Uprice lost 99% of clients' funds.

Starting point is 01:02:39 Did you know what it was for it, Ryan? by shorting Luna during the price crash. And so what did they do? They shorted Luna at $30 with 100x leverage, and then Luna hit $32 before going to zero, and they got liquidated. This is the lesson in fractals, where if you take 100x leverage,

Starting point is 01:03:03 your time frame goes from long to extremely short. And so it doesn't matter if you are in a 99.99% downtrend. If you take 100x leverage, you're taking a micro slice of that price chart, and that thing could go up, like, a ridiculous amount. So, like, what was Luna at the height? It was something like, I don't know, like a $250. If it goes from $250 down to $30, that's like down, like, 85, 90%. If it goes up $3, that's up 10%. And if you take 100x leverage, you get liquidated at that level. That is ridiculous.

Starting point is 01:03:38 Imagine losing your entire business by shorting Luna with $100. leverage. So dumb. It's so dumb. It's embarrassingly stupid. This is, Uprise took custody crypto assets from customers and traded them in cryptocurrency futures market. And this is what they were doing with it. They say that they have an AI-enabled trading technology that's supposed to minimize the risk associated with leverage crypto trading. Wow. And you're going to go short Luna in this type of a market. It's just, you know, some of the mistakes that were made by so-called professionals this cycle. are completely embarrassing.

Starting point is 01:04:14 Like, I, it's hard for me to wrap my head around it, honestly. It's been the most surprising thing about this downturn is how dumb the so-called professionals have been. Not all of them, but enough of them where you're like, what? Like, is this your first time in crypto? Do you know nothing? You're not a professional. You're just taking leverage.

Starting point is 01:04:35 I guess, I mean, maybe it's just the excess of greed that, Because some of these are smart people. I actually don't, I fundamentally don't understand how these mistakes were made unless you use some explanation of like, you know, kind of greed and ego. It's going to be something we'll study in the weeks to come, in the months to come. Got to touch this quickly too. Recently last week, the EU finalized some new crypto registration. I'm going to read you some key points from a thread put together from the policy leader at

Starting point is 01:05:06 Ledger, which of course, Ledger, the hardware wallet they are based in front. France. So they've been tracking this thing closely. And the TLDR of this legislation is called Micah. It doubles down on the failed notion of leading in regulation. This is Seth who's saying this from Ledger rather than prioritizing innovation, but it could have been worse. So it fails in a lot of ways. It doesn't prioritize innovation. It prioritizes regulation, but also, David, it could have been worse. Okay. And here are some of the things that were good and some of the things that were bad. On NFTs, it was good. They were fully out of scope of this round of regulation. So that's a good thing. So is defy. Another good thing. But Parliament failed to ban proof of work

Starting point is 01:05:52 blockchains and assets directly while they didn't ban it directly. They snuck in a potential backdoor to ban it later. So within two years, the commission must report on mandatory minimum sustainability standards for consensus mechanisms. So leaving the door open to completely ban proof of work, which is not awesome. Also, stable coin regulation was particularly heavy-handed and requires a physical presence in the EU. Not completely clear what that means, but I wonder if this means in some way, if you are issuing a stable coin in the EU, you actually have to be jurisdictionally located in the EU. So there's some complications around that. So all in all, a big step. It's not done yet. There's going to be a second level of legislation, some review causes, some more agency reports. And I know those crypto companies

Starting point is 01:06:45 that are based in Europe will continue fighting for this. So not great. Could have been worse, though. I guess that's what we should expect from legislators and regulators at this stage in the game. Also going to be one of those things that we continually report on going into the future. Something actually really cool pivoting here, really cool release out of the layer two, Aztec Network, Asset Connect, finally got launched on Mainnet. For those that don't know, Aztec Connect, it's kind of like a private VPN for your layer one defy stuff. So you go to the Aztec Connect, layer two, you put your money there, and then via that layer

Starting point is 01:07:21 two, that layer two will interact and engage with layer one defy apps on your behalf in like this privacy wrapper. So it's like when you're on the Aztec layer two, you get to go do stuff in defy, but you still exist on the layer two, and it's private. and they use complicated cryptography magic stuff to make that happen. Basically, what gets to happen is that you get to do confidential defy, staking, vault entry, lending and swaps, all private. You get significant gas cost reductions because there's this beautiful symbiosis between privacy and scalability. And you also get to have private treasury management. So like Dow's get to

Starting point is 01:07:57 manage their treasuries without disclosing what they're doing. You've got also ahead do like private NFT purchases and private trading and all that stuff. And so that's pretty cool. That is a release. You can go and play around with that and ASSEC has not released a token. So maybe you would want to go play around with that. Do you remember our last market cycle we were talking about privacy tokens and Zcash and Manera and all of these things? Right. Is this essentially embedding that as an app into Ethereum? So I've always said, privacy is an app, not an asset. I don't understand privacy tokens. I do understand privacy apps. That makes much more sense. This is really cool, and I think it's really bullish for privacy, and hopefully this continues

Starting point is 01:08:38 to pick up steam. David, we got some bankers that are leaving their banks and going into crypto. What's this? And do you think this is going to be a trend? Yeah, quick headline. Three execs leave JPMorgan this week to join crypto firms. So the brain drain out of Tradfai and into Defi continues. So bankers going bankless, what we love to see.

Starting point is 01:09:00 If you are a banker and you want a job. in crypto. Come on over to the bankless jobs board. All right. Get a job in crypto. Even if you're not a banker, even if you have no financial skills, there's lots of things that are required. You can go take a look at the bankless job boards. I'm going to read a few out for you right now. The first is from Steakfish, a smart contract software engineer, a back-end full-stack software engineer as well, blockchain marketer from Steakfish. It's not technical. Steakfish front-end software engineer, DevOps engineer. Steakfish is trying to hire everybody right now. Alliance Dow wants a CTO, a software engineer, a senior software engineer, and an executive assistant.

Starting point is 01:09:39 Not a technical. Otterspace wants a solidity engineer, abstract ventures, a front-end engineer, Boolean Labs, founder and CEO, blockchain capital, research engineer. I could go on. We got Uniswap up here. Ooh, is that the alpha. Oh, look at that alpha. Let's go back over. Let's go back up.

Starting point is 01:09:54 Senior mobile engineer iOS Uniswop Labs. Oh, that is some alpha. That's some alpha. Swap. What are you, what are you brewing up? What are you up to? Guys, of course, you can find all of this. David and I will remind you every single roll-up, but you can find out for yourself on bankless.com.com slash jobs. Make sure you add your email address so you get these to you in your inbox every day. David, we got some hot stuff next, including questions from the nation. As usual, some hot takes.

Starting point is 01:10:23 Make sure you like and subscribe if you were enjoying this roll-up. We'll be right back. But before we do, we want to thank the sponsors that made this episode possible. The layer two era is upon us. Ethereum's layer two ecosystem is growing every day, and we need layer two bridges to be fast and efficient in order to live a layer two life. A cross is the fastest, cheapest, and most secure cross-chain bridge. With a cross, you don't have to worry about high fees or long wait times.

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Starting point is 01:11:09 their Discord and using Across for all of your layer two transferring needs. So go to across.com to quickly and securely bridge your assets between Ethereum, Optimism, Polygon, Arbitrum, or Boba networks. The Brave browser is the User First browser for the Web3 internet, with over 60 million monthly active users. And inside the Brave browser, you'll find the Brave wallet, the secure multi-train crypto wallet built right into the browser. Web3 is freedom from big tech and Wall Street. More control and better privacy, but there's a weak point in Web3, your crypto wallet. And most crypto wallets are browser extensions, which can easily be spoofed. But the Brave wallet is different. No extensions are required, which gives Brave browser an extra level of security versus other

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Starting point is 01:12:12 All right, guys, we are back. Time for the questions from the nation. Of course, we tweet this out every week. You can ask your question by replying to the tweet. Follow at Bankless HQ. Hi, David and Ryan. This is from claudy.com. I would like to ask about a post-merge situation,

Starting point is 01:12:26 if I understand it correctly, those who stake on the merge should take apart at transaction fees of transaction fees. But which part of the fees will it be? Base fee or tips? David, you got the answer for this one? Yeah. So all transaction fees when you pay on Ethereum are split into two parts. The base fee and the tip.

Starting point is 01:12:43 The base fee fluctuates, with the percentage of these things fluctuates, but there seems to be an equilibrium, about 90 to 10 base fee to tip. So 90% of that transaction fee goes to the base fee, 10% goes to the tip. The base fee is burnt. That is the EIP-159 burn. So the majority of ether is burnt. That is like the stock buyback. That's the ultrasound in ultrasound money.

Starting point is 01:13:06 So everyone gets that if you hold ETH in a way. If you hold ETH, you gain exposure to that burn. Only if you stake ETH, do you get that extra 10% tips? And you can see it in the name. It is a tip that is paid to stakers to prioritize their transaction over other transactions. So like the base fee is where transactions used to be. be before EIP 1559. It used to be only tips. And we just called that the gas fee. Now the gas fees are both the base fee burn and now the tip. And so the tip has been reduced down to 10% and that goes

Starting point is 01:13:37 directly to validators. And the more you tip, the higher in the queue that you get. And so all validators get that 10% tip. And just a reminder for other staking revenue sources. So one is definitely that tip portion. That's a transaction fee portion. Another is, of course, block rewards that a staker receives, and a third source of revenue is maximum extractable value, M-E-V, which you also receive as a staker and a validator. So three revenue sources there. David, here's another question from discover crypto.eith. I know how valuable L2s are to the ETH ecosystem. Once complete data sharding happens on Ethereum, way down the line, and transactions are fast and cheap on L1, what use will we have for things like optimism and arbitrum? David, what you got? Okay, so the

Starting point is 01:14:25 asker, discover crypto.e, thank you for the question. The way that you're phrasing this is that and transactions are fast and cheap on the layer one. They're going to be, with data sharding, they're going to be faster and cheaper, but they will not necessarily be super fast and super cheap. So like, it doesn't really matter what the state of transactions are on the layer one, that layer twos will always be orders of magnitude faster and cheaper than whatever the layer one is. think of like layer twos as like an exponent of scale. And so like if the layer one is X, then the layer twos are like to the power of two or to the power of three.

Starting point is 01:15:02 And so even if we do like a two X, a three X of the layer one throughput, like it doesn't matter because that two X turns into two X squared with layer twos. I don't know if we're following the math analogy, but I think it makes sense to me. It doesn't matter how fast we can get transactions and how cheap we can get transactions on the layer one, layer twos will always be an exponentially increased order of magnitude faster and cheaper than whatever the layer one is. And also like layer, while the layer one will get faster and will have more total space, I don't think it'll necessarily get cheaper.

Starting point is 01:15:35 And so it'll, we will always need layer twos to have, if we ever want zero fee transactions, it's going to be on layer twos and layer threes. And then layer one is can be kind of expensive probably all the time. While it will have more total data, it'll probably be pretty expensive and it'll probably be prohibitively expensive for most people. Yeah, so to double down on that and be super explicit, transaction fees on layer one are probably never going down. That's not part of Ethereum's scalability strategy. It is scaling on layer two. And this is why we've encouraged people to start investigating these layer twos like Arbitrum, optimism, immutable and others, because that's going to be your crypto home. That's where you go bankless is on these layer two is. Migrate,

Starting point is 01:16:17 leave from layer one. We put out a couple of episodes about this, the great layer two migration that you can check if you want to learn a bit more about this. But I don't think transaction fees are going to go down long term on Maynett. So we should all be migrating to layer twos. David, let's do some hot takes of the week. Here's a first one from Layton. What's he saying here? Layton QSack, the guy that created all the pulleys that we know and love, he says, the only lenders Celsius has paid back, AVE, MakerDAO compound. And he continues, smart contracts have a higher liquidation preference than any paper agreement. DFI protects you from Celsius. What he's saying here is that the agreements, the parameters for your loans in DFI are steeper. They're steeper. If they're Avey, if they're Maker Down, if they're compound. And this is the cost of decentralization. You pay higher liquidation penalties. You have to post higher collateral bonds. And so what he's saying is this, the automation of Defi and the smart contract nature of Defi requires higher level of security, therefore higher level of retail protections, Ryan.

Starting point is 01:17:23 Yeah, what's super cool about this is remember you said markets go bad, it's all arbitrated in court systems, right? Well, not the case with Defi, as we made the point earlier, right? So Celsius can't get out of these collateralized loans in Maker and compound, in Ave. They just can't because it's written in code and all of their collateral will be will be completely dissolved. And so they have to pay them back. And so it puts, if you're in D-Fi, puts you at the top of the stack in terms of liquidation preferences. And that's a great place to be. I think, once again, I can't say enough, David, that one of the big outcomes of this whole

Starting point is 01:18:00 crypto meltdown that we've seen recently is just like seeing how well D-Fi performed. Right. Right. Especially relative to C-Fi. Like, it held up strong. And I think that is, incredibly bullish. And people will realize that on the other side of this bear market that, hey, at the end of the day, it was the smart contracts that saved us. And the centralized lending providers did not. And look at how well they held up. For all of the risk and the smart contract risk and all of these other things, they were the ones that actually preserved retail capital, investor capital, during the crypto meltdown. So that's a bullish thing. David, what's this take from Vitalik. I had to screenshot this tweet because it was actually deleted by Rudy Giuliani. So

Starting point is 01:18:47 Rudy, this is a, Vitalik is retweeting a Rudy Giuliani tweet. And Vitalik says, claim, the crypto space is weird and dumb and we should go back to mainstream institutions which are ruled by adults. And then reality, and this is where he was retweeting the Rudy Giuliani tweet, Rudy Giuliani tweets, great products at reasonable prices. Use code Rudy for additional savings. And And we are looking at a picture of new sandals. But we have some like bad, terrible crock-knock-off-looking sandals. Regular price $798, actual price $49.98 at mypillow.com. promo code Rudy with like a star-spangled banner like fireworks, 4th of July savings.

Starting point is 01:19:34 Rudy Giuliani is tweeting out a discount code to some knock-off looking sandals. This is insane. Yes, David. These are the adults ruling our political system right now. And yeah, I guess I'm fine with all the crypto weirdness in this context. Okay, here's a tweet from Van Spencer. We don't need any new narratives. We are like 0.1% of the way through the current narratives. We do need the grifters and low effort projects to capitulate. Once a wave of those announcements hit, we are close. Anyway, how old are you, son? I like the way this ends. I don't know why it ends that way. But, you. Here's this point. Once a wave of those announcements hit, we are close. David, we've just seen a wave of those announcements. That's why it's kind of feeling like we're close. And then Vance's other point is like, hey, let's get the whole like self-sovereign money thing use case down. Like, there's still a lot to do on that. Let's get the whole bankless defy money system down. Let's get NFTs in the metaverse to be true property rights for things that matter and people will use in their

Starting point is 01:20:41 everyday life. Like, we have enough narratives in crypto to blow this thing up to, like, $100 billion, $100 trillion in total addressable market size. And so, like, we're just a fraction of the way there. I think it's a great point. Remember how we were talking about at the beginning of the episode, how, like, I lost this, like, wire transfer and, like, this, the UX, U.S.C. transfers on Ethereum. It's just, like, orders of magnitude. Like, that's the whole 1% of the way. stop doing wire transfers, then we can actually get somewhere. Like, the whole paradigm of instant and permissionless liquidity in uniswap, still underappreciated. Like, the boomer defy, and this is why I think he ended it on like, how old are you son? Boomer defy, like,

Starting point is 01:21:28 defy 1.0, like, that stuff is still crazy to most of the world. Like, that stuff is still brand new paradigms. And so Van Spencer's like, yo, guys, like, I know crypto moves really fast, we cycle from narrative to narrative to narrative. But remember, like, the first are also still really good. This might be why he's bullish on some of the DFI blue chips, as he told us last time. David, some advice for what to do during a bear market from Nader. Do you want to read these out? Yeah, he says, top three things to do during a bear market.

Starting point is 01:21:55 One, meet people that stick around. Two, learn about the technology to gain conviction. Three, build something you're passionate about. Man, I could have written this tweet. This is a great tweet. That's why we included it in the roll-up. Absolutely, great advice from Nader there. All right, David, what do you bullish about this week?

Starting point is 01:22:11 man. I'm pretty bullish on ETHCC, which is happening in two weeks. So a week from, a week from tomorrow, we flying out to France. ECC, I can't believe it's been one year, as in it's only been one year, but ETHC was like the first conference I went to when conference season, 2021 conference season really started. And so ETHC... It's also the last for a while, right? Yeah. Yeah, it is the last for a while. And so it was the first post-COVID conference. It was the conference I got my first COVID at. but like now everyone, now COVID's largely over. Everyone's going back. It's like Stani's going to be there.

Starting point is 01:22:48 There's going to be a Rave. Maker Dow is going to throw their divinity. So many, so many good talks. A lot of the things that were talked about at ECC last year became kind of like the cultural meta that was discussed in the next year. NFTs were big. Also, non-financial use cases of the blockchain were a very big thing. Vitalik spawn that off.

Starting point is 01:23:08 You know what that turned into, Ryan? Soulbound NFTs were. FTs. And so like six months, eight months later, that turned into a big, big part of the meme, the cultural meme at the time. So I'm just going to go here and see what are people focused on next. And so I remember this is a pretty smart group too. It's like a high IQ conference, right? Yeah, high IQ conference. Should that intimidate people though? I mean, so tickets are already sold out, I'm pretty sure, but so many people are going anyways for all the peripheral events. And this is pretty common for ECC. So like if you're around or just

Starting point is 01:23:41 want to go to Paris. You can go to ECC. Try and bum a ticket off of someone, but if you can't, just go to all the peripheral events, because that's what I'll be doing. There's a ton of peripheral parties, but also, like, actual, like, side conferences and side talks. So I'm going to be doing some sort of, like, content there, whether it's like in-person interviews or just writing about it, IDK. But, yeah, I'm bullish on ECC. Great conference. Looking forward to going back. That's awesome, man. It's their fifth. These are a conference. OGs. ECC, by the way, sounds for Ethereum Community Conference. Oh, cool. Yeah. I feel like I knew that, and then I forgot it.

Starting point is 01:24:16 And thanks for dragging my memory. It's awesome, man. All right, Ryan, what are you bullish on? I'm not going to say mine because you made fun of it, okay, David. I'm going to say a different one. Mine originally was, I'm bullish about the future, guys. And I had this thing where, like, optimism is so important in how builders build for optimism. I was inspired by Josh Rosenthal. when we were going over this, David laughed out loud when he heard I was bullish on the future.

Starting point is 01:24:42 So I'm not going to say that. But I will tell you, I am bullish on NFTs, David. Oh, yeah. Like, the stuff that's going on. The future of NFTs, I'll say that. The stuff that's going on with like Reddit and Polygon is the, it's incredible how quickly the narrative and sentiment has shifted on NFTs. Now everyone's like, I guess the popular narrative, not everyone, not people who

Starting point is 01:25:07 deep in crypto. Like, NFTs were a scam. They're only JPEGs. We're like back to that again. And we just swung so far to the other end of the pendulum. You know, a lot of NFTs will fail. Many will go down 99% in value. But there will be a new generation of these NFT property rights, these ERC 721s, and we'll have a resurgence the next bull market and look for these signs when you see like the social media companies of the world continuing to build, continuing to add into these things, you can see it start to happen. Some of the foundation being laid. So I'm bullish on NFTs.

Starting point is 01:25:45 I'm also bullish on the future. Yeah, I bet you are. The problem with being bullish on NFTs is that like, it's hard to, you can be bullish on NFTs as a sector, but it's hard to like inject that into like, I'm bullish on this one particular NFT. You know what that makes me bullish on, Ryan? What? Block space.

Starting point is 01:26:02 Because you always, people, people, rotate through NFTs all the time, but there's only one block space. Well, they're all layer two block spaces, but it all collapses down to Ethereum block space. Chris Stixen said it. Blockspace is the commodity of the crypto age, of the next couple of decades, for sure. You know what's a good proxy for Blockspace, Ryan? I do. It's that Heath, you're holding. It's that Heath, yeah. David, I like your plant, by the way. First, we're all up with a new plant in the new place. They can't see it, but I'll bring it in here. Here we go. Yeah, what is it? Does it have a name? It's a Dracina. It's a Dracina Naginara. Here it does.

Starting point is 01:26:34 What's special about this plant? It's easy to keep alive when I go travel away. It looks great. It's got some purple hues. It's got some green. Really impressed. I'm looking forward to seeing your menagerie grow behind you. This slowly turns into a green house.

Starting point is 01:26:50 This is not the plant corner. This is strictly the studio corner. We're going to have place. So since we're on, well, a few plants, but mainly studio. Since we're on the topics of things that are bullish on, I think, I don't know if I've told you this. I told you I was going to do it. I don't know if I told you I'd done it,

Starting point is 01:27:04 but I bought $10,000 with the studio equipment yesterday, Ryan. Oh, my God. Wow. So we're doing this, huh? Oh, yeah, we're doing it. Bankless studio is happening. It's official. And look, guys, we're doing this during the bear market.

Starting point is 01:27:14 That's how much we believe. That's how much we believe. David, you want to get to the meme of the week? Meam of the week. Let's do it. Okay, this is a picture out of Kobe, and it's one of these ones that progresses. And it starts with Q1, 2021.

Starting point is 01:27:27 And this is Jerome Powell saying, quantitative, quantitative easing won't cause inflation. And then we go into Q2, 2021 and okay now we're you know some inflation but it's transitory now we're at q3 2021 okay high inflation but we're peaking q 4 2021 okay inflation might not be transitory but job market wage growth very strong and then q1 2022 need to hike aggressively to curb inflation but no worries economy very strong and soft landing possible q2 2020 we are here by the way q2 2022 negative growth in q1 but no recession risk q 3 2020 so this is now predicting the future

Starting point is 01:28:03 okay recession coming but you won't lose your home q4 2022 okay you might lose your home but you won't starve to death q1 2023 you may die but you'll go to heaven which is super dark and this is an explicit part of the agenda for the podcast that we're about to go record with lin alden uh oh god in 10 minutes or or in one hour in 10 minutes let me check our schedule no 10 minutes man we got to we got to oh fuck 10 minutes okay in 10 minutes we are literally going to go ask lin alton about this question, that podcast is coming out, this coming Monday? Yeah. And now we're actually, so we're not in Q2, David.

Starting point is 01:28:39 You know, we transfer July is Q3. So we're at this phase where it's okay, recession coming, but you will not lose your home. And then the next phase is, okay, maybe lose your own, but you won't starve to death. And then you actually die. That's the question we have for Lynn Alden. Are we all going to die? Are we going to be okay? Is macro going to be fine?

Starting point is 01:28:56 Am I dumb for being bearish or bullish? Well, like, does this guy have any idea what he's doing? Are the central banks driving us completely off a cliff? Anyway, stay tuned for the macro content for bankless. As always, got to end with none of this has been financial advice. You might die. You might die. You can definitely lose what you put in.

Starting point is 01:29:16 You get dysentery on the journey. But we're right there with you. And of course, crypto is not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot. If we all die, we all die together.

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