Bankless - ROLLUP: Why Solana is Down Bad | Avi Arrested | MicroStrategy Purchases $41M Bitcoin | Gemini Sued Over Gemini Earn

Episode Date: December 30, 2022

Last Week of 2022 ------ 📣 Kraken | The Crypto Exchange for Everyone http://k.xyz/bankless-pod  ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/?utm_source=banklessshowsyt  🎙️ SUBSCRIBE TO PODCAST: https://availableon.com/bankless  ------ BANKLESS SPONSOR TOOLS: ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum  👯 DESO | DECENTRALIZED SOCIAL BLOCKCHAIN https://bankless.cc/Deso  🦁 BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave  📡 TRUEFI | CRYPTO FINANCIAL HUB https://bankless.cc/TrueFi  👾 SEQUENCE | ALL-IN-ONE PLATFORM https://bankless.cc/Sequence  ⚡️FUEL | THE MODULAR EXECUTION LAYER https://bankless.cc/fuel  ------ Topics Covered 0:00 Intro 1:55 Kraken 2:54 MARKETS 3:00 BTC Price 5:15 ETH Price 5:25 ETH/BTC 9:39 Yearly Candles https://imgur.com/uMwOO7F  https://imgur.com/2Yzrr8M  https://imgur.com/4k44ep3  14:16 Amazon and Tesla https://imgur.com/YXxXphI  17:12 COIN https://imgur.com/gdHapjc  19:50 SOL https://twitter.com/hentaiavenger66/status/1608034523190640640  https://twitter.com/hedgedhog7/status/1608125232350629888  22:10 HEX https://twitter.com/TrustlessState/status/1608488903992029186  22:25 RPL vs LDO https://twitter.com/BenGiove/status/1608216011517603840  24:15 Winner of the Year https://www.coingecko.com/en/coins/gmx  24:55 RAI Stability https://twitter.com/reflexerfinance/status/1584650507347406848  28:54 State of Solana https://imgur.com/vvTyhAe https://imgur.com/gwLFyj7 37:00 Solana TVL Down https://twitter.com/shegenerates/status/1608197123257901056  40:00 Vitalik https://twitter.com/VitalikButerin/status/1608591727316684804  40:40 State of Multicoin https://twitter.com/DrSoldmanGachs/status/1607877120239497219  https://twitter.com/KyleSamani/status/1457317165661622275  43:35 State of L2s https://newsletter.banklesshq.com/p/the-l2-year-in-review  49:04 NEWS 49:05 Taiko https://twitter.com/taikoxyz/status/1607789733194891266  50:20 Most Popular SOL NFT Project Moving to ETH https://twitter.com/degodsnft/status/1607156858019794944  51:11 Pudgy Penguins having a Good EoY 51:45 China Opens State-Approved NFT Marketplace https://www.coindesk.com/web3/2022/12/28/china-to-launch-first-national-digital-asset-marketplace/  53:22 MicroStrategy Purchases 2,500 Bitcoin ($41M) https://twitter.com/WatcherGuru/status/1608100195010494466  https://blockworks.co/news/microstrategy-bitcoin-wash-trading-tax-harvesting  54:45 Another Miner Bites the Dust https://www.coindesk.com/business/2022/12/27/argo-blockchain-suspends-us-share-trading-for-24-hours/  57:05 Gemini Sued Over Gemini Earn https://www.coindesk.com/business/2022/12/28/crypto-exchange-gemini-sued-by-investors-over-interest-earning-program/  57:45 Avi Arrested https://twitter.com/SummersThings/status/1607861933322952709  https://www.coindesk.com/policy/2022/12/27/mango-markets-exploiter-eisenberg-arrested-in-puerto-rico/  https://twitter.com/avi_eisen/status/1581326197241180160  1:03:50 Questions From The Nation 1:11:50 TAKES 1:11:59 When Will Bear End? https://twitter.com/DegenSpartan/status/1607215848519008263  1:13:45 Sasssal, Please Rate Each Tweet https://blockworks.co/news/crypto-twitter-most-liked-tweets  1:21:35 MEME of the Week https://twitter.com/Sule8921/status/1607856004535820288  1:25:30 Moment of Zen https://twitter.com/itsk1cks/status/1608139751063691264  ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://www.bankless.com/disclosures 

Bankless Nation, welcome to the very last weekly roll-up of the year. Happy Friday morning to you. I hope you're drinking your cup of coffee while we cover the entire weekly news in crypto, which is always an ambitious endeavor, which is why I've pulled in my dear friend, Anthony Sizzano, to sub in for Ryan while he is getting his software updates for 2023. Anthony, welcome to the Bankless Weekly Roll-up. Hey, David, thanks for having me today. I love how you say Ryan's getting a software update just because there's that meme that

he's actually a robot because no one had seen him before. I think permissionless, right? Like was where everyone actually saw him for the first time. Yeah, including myself. Yeah. Yeah. Yeah. Yeah.

Yeah. Yeah. Yeah. I love it. Yeah. No, it's a good meme and it's stuck pretty damn well. Anyways, Ryan, like I said, he's actually out on vacation, enjoying some, some well-earned breaks with wife AI, child AI.

So we're pulling in Anthony Sizzano to sub in for his help. So Anthony, thank you for helping us walk through the news. Are you ready to do it? Yeah, let's go. All right. So last. Weekly roll-up of the year, Bankless Nation. We are going to talk with some year-end market talk.

We got roughly about 10 times the amount of charts that we usually do on a weekly roll-up. So we're going to walk through the year's winners, the year losers, and what the snapshot in time is going into 20-23. So that's going to come up first, an extra large market section, some candy to end the year with. Coming in in second, got to talk about the state of Solana. Everyone is talking about it on crypto-Twitter right now. So we're going to discuss that. And then lastly, we're going to talk about the state of layer two. because they report out of bankless from our analyst, Ben, just came out,

and there's always a bull market somewhere. So we're going to talk about the state of layer two's. Bankless Station, you know the deal. Please like and subscribe, right and review, wherever in the Metaverse, you are listening to this content. That is how we get crypto back onto the top of the iTunes business and investing charts. And before we get to all of that topics, first we have to give a shout out to our strategic sponsor for 2023. Cracken.

You guys know Cracken. Cracken has been the exchange since 2011. And why have they stuck around since 2011? Well, because they've prioritized things like security and transparency and actually servicing their customers well. And so that's how they've been able to stick around for such a long time for actually being true to the ethos of crypto and helping the crypto industry blaze paths forward into the frontier of the world of crypto.

After all of the insolvencies of 2023, having a secure and transparent exchange is no longer just a nice to have feature is probably a should be a base requirement of your exchange of choice. We definitely need secure exchanges to get our money from the old world into the new world, and Cracken is helping us do that. Thank you for Crackett for being Bankless's strategic sponsor for 2023. Visit Cracken.com slash bankless if you want to upgrade your exchange. All right. Anthony, are you ready to get into the markets? Let's start with Bitcoin, of course. Bitcoin started the week at the high, high price of $16,800, ending the week at the low, low price of $16,600 down 1%.

Anthony, and he takes on Bitcoin. No, I mean, this range that Bitcoin and Eath have both been in is just hilarious to me because, I mean, it is the Christmas period, right, and we're going to be seeing very low volatility around this, and then you see these wicks on the chart of people just trying to kind of wreck shorts and wreck longs, and it's just like this little bit of a ping pong going on. But yeah, volatility is is very, very low right now. And this range kills both bears and bulls. I think when I look at this stuff, it reminds me of 2019 or I guess like parts of 2019 where we just kind of ranged forever and probably even 2020. And people getting really frustrated

with it. Like, oh my God, starve for volatility. And typically you see people go down the risk curve in that, in that environment, which is kind of funny in a bear market to see people going down the risk curve. But yeah, it's an interesting dynamic because I think this time around we have NFTs, right, where people kind of seek refuge in NFTs. And that's why we see some NFTs still popping off, even though Ethan BTC are like sideways, basically and everything else is basically dumping. So yeah, it's kind of an interesting dynamic to see how people will move between different markets because they're, they're kind of like starved, right? And you go where the food is, so to speak. Yeah. And when there's no volatility in the blue chips like Bitcoin and Ether,

when that range gets really, really compressed and all of us like monkeys are opening up our price apps and be like, hey, can I get some dopamine? Like, can you do anything? You do anything. go down even, like give me some excitement. And so people's like trading ranges get compressed and compressed and compressed. And so they start to get like more or less, more, more bearish or more bullish inside of tighter ranges. And they start to play tighter trades. And it just makes the the field of play like tighter and tighter. And I remember, I think what you're talking about in 2019 was like the bark effect that was just absolutely massive in 2019 where it would bar up and then barred down.

And you could like sometimes just feel a bart coming. And it's just like, oh, yeah, we just barts it up. Give it like somewhere between 12 and 18 hours, we will Bart back down. And what Bart means, Bart is like Bart Simpson. Like imagine like the Bart head go straight up, like jag around for a little bit, go straight down. And then you do that in reverse. Anyways, we digress.

ETH price kind of doing the same start of the week at 1,120 ending the week at 1,200 flat, down about 1.9%. And of course, the ETH Bitcoin ratio, pretty damn flat on the week. About half a percent down. we are at 0.7-2 on ETH BTC. Anthony, any comments on ETHBTC? I think it's just continuing to do what it's done all year has remained flat against Bitcoin,

which is actually incredibly bullish for ETH, I think. As people have said on Twitter, I think I've said it as well. Basically, ETH didn't do this last bare market. Eth went straight down against Bitcoin last bare market. It dumped like 90% against Bitcoin, you know, and 94% against USD. But this time around, it's basically flat on, of the year. We had a bit of a dip mid-year when Heath bottomed in June because of 3AC puking all

their STEath for Eath and then selling that ETH from there. But we bounce back from that. And now we've just kind of stuck in this range for the whole year, which as I said, I think is incredibly bullish. There are people calling for EFBTC to actually nuke maybe next year or something like that. Oh, I've heard people call for it to nuke like soon. Yeah, yeah. I mean, I've been hearing it all year from particular people. But I look at that and I'm like, well, look, if you're just looking at charts, maybe you can come to that conclusion, if you're just looking at historical kind of chart data. But the biggest thing for me is the merge.

And that's what's affected ETHBTC at the most. By removing that cell pressure that we would have had from miners, that's why I believe ETHBTC is so strong, at least. And there's other reasons as well, but I think that's a core reason. And if you're just looking at charts, they're not going to show you that. Charts, the historical charts will just show you Ethereum in the proof of work error, right? It's not going to show you Ethereum in the proof of stake error. Yeah.

What do you make of this trend? So we have like this very long-term trend from like almost 2019 of ETH BTC just going up into the right. But then we have the short-term trend of it coming down. I am not a TA charter person. Any T-A person looking at the chart right now is going to cringe. But just what do you make of this like convergence of like kind of short-term bearishness versus long-term bullishness on the ETHBTC ratio?

Yeah, I mean, I think since 2020, ETH has really come into its own thing. Eighth is viewed a lot more positively by the wider market. Now, it is still viewed as more risky than BTC, though. That's why you'll see the kind of volatility here, and you'll see things, especially in big sell-offs, you'll see Eats selling off harder than BTC. But I think more and more people understand the ETH ball case now than they once did. More and more people understand that Ethereum is here to stay, or at least maybe not even understand, but believe Ethereum is here to stay. Because believe it or not, even up until like the end of 2020, probably after DeFi summer or during DeFi summer, a lot of people didn't believe that Ethereum was going to amount to anything, right? it was still Bitcoin, Bitcoin, Bitcoin.

And I think there's a bit of parallels now with some other things we're going to talk about later. But yeah, that's why. Because I think Ethereum just has a much better story now. And there's a much better bullcase for it than they used to be. And obviously, we just did the episode with Justin Drake and DC. And myself and you guys that you put live there. But I think, yeah, more people understand the bullcase for Ethan Ethereum now. And that's helping there.

But as well as those kind of flows that I guess Hal Press originally talked about due to the merge, I think people looked at that and were like, oh, well, ETH is not doing very well against U.S.D. It's like, yeah, but that's a bare, that's bare market things, right? In a bare market, none is going to do well against U.S.D, right? But look at ETH relative to other assets and look at its historical performance and look at its current performance. ETH is trading like it is basically the same risk profile as Bitcoin, which is quite something. That's never been like that before. Nothing's ever traded like Bitcoin before, honestly, in terms of risk profile.

Bitcoin was considered by far the safest asset in crypto and was your flag. the safety in a bear market. But that's not the, that's not the, that's not the thing anymore. Yeah, so I've got the Mizari chart screeners up and we are looking at a comparison down from, from all time highs. Ether, actually ahead of Bitcoin in terms of down from all time high by a whopping 0.6%. So either is down 0.6% less than Bitcoin, which is unheard of compared to last cycle. If you go and inverse this and see who's down the most, of course. course we have Tara Luna, Tara Luna, of course,

followed by BitTorrent, followed by Lido. Some of the starting points of these are all kind of arbitrary, right? Why is Z cash down technically 100%? Yeah. It started off the out of just weird price,

but we're going to go into some winners and losers. But first I want to actually look at Bitcoin and USD in yearly charts. This is the last weekly roll-up of the year. And sometimes people forget to zoom all the way out and see what things look like on a yearly basis. And so what I've got on the screen here are both the linear and logarithmic charts for Bitcoin with yearly candles. So each one of those candles that you are seeing is 12 months of time. And you can obviously just see a secular bull market in Bitcoin unquestionably up into the right.

Like there's actually only two red candles on the screen, which is kind of insane actually. So one, two, three, four, the first four years of Bitcoin, it was green on the yearly chart. then in 2016. No, wait. Oh, well, this actually isn't the full chart for Bitcoin. Excuse me. Out of the one, two, three, four, five, six, seven, eight, nine last years of Bitcoin, only two years have been read.

And we are, of course, finishing one right now. Anthony, what do you make of this chart? Yeah, I mean, I think this is what people will talk about when they say four-year cycle for Bitcoin, right? Well, you'll have like a red year after having a few green years. right, but it can be kind of arbitrary. Like you can actually get an all-time historical chart for Bitcoin. It's called the BLX on Trading View.

It's the Brave New Coin Bitcoin Index. And the four-year cycle is pretty prominent in that. And I understand that because of the harvining cycle and all that sorts of stuff. And maybe that's been true in the past, but I don't think it necessarily is going to be true going forward. I have a lot of opinions on Bitcoin that I won't give generally here. But I think that the comparison here between linear and logs quite important as well. Linear will show you the extent of, I guess, the movements and how wild they can get. You can see on the linear chart, there's a massive wick for Bitcoin in 2021 there that's come back down.

And then you've got obviously the red. But the log will give you a better long-term picture and a better smooth picture of what things look like. And traders use both. I've seen traders use linear a lot, actually, because they like to see the, because they're more short-term oriented. They like to see the pronounced movements there because it will show you it more violently. like yeah especially on the eath chart right but but yeah i prefer to look at log charts just generally though yeah that that eith chart is even more volatile looking than the than the bitcoin chart but both charts are just looking absolutely up into the right of course ether's actually got much more

red yearly candles than bitcoin does and but that's also just because this is also picking out ethereum's earliest years as well because this one actually does go back to its first year of existence. And then, of course, here is the ETH Bitcoin yearly candles, which also is just up and to the right. So it's just important to know that no matter what you look at in crypto, Bitcoin, ether, ether, BTC, things are always up into the right. That's not probably true for every single asset. Of course, there are many and many assets that came during the 2013 bull market that aren't around, same thing with 2017. But over time, we're starting to collect more and more assets in crypto that when you zoom out and go into the yearly candles, everything is just up.

and to the right. Any final comments on these yearly charts before we move on? Yeah, I mean, I think it's also important to, I guess, understand outlier bias here. Because as you said, like there are many, many, many, many assets from those previous market cycles that never came back against USD, let alone, ETH and BTC. So it's good to keep that in mind when looking at things and trying to say, oh, well, you know, Eith and BTC did this last cycle. It means my favorite asset can come back. It's like, no, that's not what it means. There's no guarantee of that. I understand why you would say that and it's fine to believe that,

but don't fool yourself into thinking that that's a guaranteed thing, right? Take a snapshot of the NFT markets right now since this is, again, the last weekly roll-up of the year. So to end the year, the board ape yacht club, climbing in at a 73th floor, taking the number one spot, followed by the Cryptopunks at 65th, followed by mutant apes at 15th.

Those are the one, two, and three NFT projects to finish the year. Anthony, you want to talk about NFTs or you want to keep on moving? I mean, I don't pay too much attention to NFTs. I always find it funny watching the spats on Twitter, especially between the board apes and the Cryptopunks with the floor price. I mean, now being quite close, they used to be quite far apart. But I always find that kind of entertaining.

But yeah, I don't really pay too much attention to it generally. It's just not my scene. Yeah, I think that Bored Apes might have actually flipped back over to number one this last week because Cryptopunks were in the lead for the two or three weeks prior to that. But unquestionably, board apes were in the number one spot for the vast majority of 2020. 22. All right. So we're going to look at some tradfai. We got Tesla and Amazon on the screen in its charts. Absolutely wrecked. These are some of the Amazon's going all the way back down to it's March of 2020. It's COVID, COVID lows. And that is where we are now. So imagine that

Amazon is back at the same price it was at the bottom of the March COVID lows. It's kind of insane. Tesla is an absolute freefall coming in at $123 when it used to be almost as high as almost 500, but definitely over 200 for the last almost two years now. Anthony, any comments on TroutFi? Yeah, I mean, the trend here is quite funny because it basically just shows that everything that happened during the COVID period was just funny money, right? Like all the assets going up, it was like an everything bubble. But in saying that, if Eath was back at its March 2020 bottom, it'd be $90, right? We are like 13x from there. And Bitcoin went back to like, you know, what it was at like under 4,000 or something.

So when you look at it like that, crypto, I mean, Ethan BTC, not all of crypto, but Ethan BTC have done remarkably well, which is quite funny. And, you know, it also speaks to that narrative of inflation hedges as well. Like, you could still make the argument that, hey, look, Ethan BTC have acted really well as kind of those inflation or debasement hedges. Because if you look at stocks, I mean, Amazon is a big-ass company that is very, very profitable and is, you know, is growing year-on-year. but their stock price did nothing the last two years now,

looking at this. Tesla's a different story. I think Tesla got way, way overvalued for where it was supposed to be. I mean, I don't have a great read on the stock market, but just doing naive, like price to sales, price to earnings,

and then pricing that in the future, you can see that. But seeing something like Amazon, raise all of its gains from that bottom is quite something. And, you know, I think that because of that, it makes the market just much more healthier, generally too. And I think that that's what the Fed was looking for

when raising rates. They wanted the market to reset itself to prior to the COVID stuff. But, you know, we've still got inflation relatively high. We still want to see that come down, all that sorts of stuff. But generally, the macro environment is very hard to study because it's not our scene, so to speak, being in crypto. But also, it is much more complex, I think, than crypto. It covers so many different things across so many different countries and places around the world that it's hard to see. But yeah, it's funny seeing just like Amazon erase all of its gains.

It's like something as profitable. and as big as Amazon to raise its gains. I think there's definitely some solace in this because if you weren't going to be a crypto investor, the other asset class that you probably would have invested in is high growth, high risk tech stocks. And so they also got wrecked too. So if you're feeling like wrecked by crypto,

well, I mean, if you compare crypto to like tech stocks, it's almost the same. And so like if you compare how bad... I mean, Ethan BTC are relatively like doing so bloody well compared to these other stocks, right? It's just crazy. 100%. Yeah.

So I've got, I've got coin base's equity. Absolutely wrecked. Coin is down 90%, not even from the top tick of the 400, almost 440 price that it reached on day one, but of the price it originally came out at 380. It is down 90% from its original price of $380, down to $34 right now. I kind of think that coin is like a generational buy. right now, man. Like, it's, it's got to be worth, I think this makes Coinbase worth $7.5, $8 billion. Like, that's pretty insane. So my thesis on coin, the reason why I didn't buy it and

probably won't buy it still, is that one, it is directly correlated with the health of the crypto market, right? Because Coinbase's revenue is directly correlated with it. But also, you have coin trading in Tradfey world with people who don't understand crypto, right? People do not trade this as if they know what's going to happen with crypto. They do not trade it with the assumption that there's going to be another crypto cycle. They trade it with right now, coin coin is trading like crypto is dead because that's what trad file. That's what people outside of crypto believe. So by that measure, you like I can't bring myself to buy coin over something like ETH or even I wouldn't buy BTC, but like when you compare it to PTC or even some other crypto assets,

because if coin is going to do well, it's going to be when the crypto market's doing well. And by the time the world believes the crypto market is doing well, there's already been a lot of gains had by both ETH and BTC and other assets that you were still probably going to be better off buying those than coin. Now, that's not an investment advice, but that's the way I look at it. And I don't think that's going to change anytime soon, because the Tradfly outside of crypto world, they find it very hard to understand crypto. They're going to trade based on pure marketing, narrative, just general mainstream noise. And we usually see that come when crypto prices are already at the all-time highs. Like when Ethan BTC are back to all-time high,

you know, that's when I would suspect some big moves to happen there. But, yeah, I mean, that's just my general thesis I've had on coin for a while. Yeah, that's definitely a fair take. I will also just point out the vast difference between the $7.9 billion market cap of Coinbase right now versus the 220-ish billion dollar market cap of ether. Like, there's some alternative risk for reward there, I'll say. Yeah, I mean, it's definitely, yeah, a better, maybe it's a better risk reward to play buying coin here than buying eath, depending on your time horizon, depending on how you look at these things.

But I think generally, yeah, coin just looks like to me, like it's trading like the rest of the world thinks crypto is dead, which they do right now. Right. Yeah. And then, of course, we're got salana. Here is the yearly salana, like, candles. There's three of them. And the first one is a tiny, tiny little green candle.

The second one is an absolutely gargantuan green candle with a huge wick all the way up to $280. And then the third candle, where we currently are, is an absolutely gargantuan red candle, which goes all the way back down to the base of the green candle. We're going to talk about Solana coming up next. So I'll save some of your takes for that, Anthony. But I want to get your take on this one. This is a tweet from Sauer Hog. Last Fud of the day, Soluna Avax traded at $600.

Saluna Avax is an index of Saluna, Avalanche, and Solana. I just said Saluna. Solana, Luna and Avalanche that the index traded at $600 and now is worth $21. That is a big oof. Anthony, give me your hot takes. I have so many hot takes. Or should we save it for the Solana section? No, I mean, I can give one on this in particular.

I think people are going to call me an Ethan Maxi no matter what I say. So I'm just going to give my honest takes here. This was perpetuated by people who were mercenaries, right? This was perpetuated by Three Arras Capital, this meme of something. a lunar Avax, which was funny because they didn't really have a sole position, but they had massive lunar and Avax positions. They didn't care about fundamentals. They didn't care about how terror was built on a house of cards. They didn't care about Avalanche just being an EVM fork and only really having any traction because of the bull market. They just cared about making money.

And it's kind of an irony that they had so much money that they made and they lost it all. But when looking at stuff like this and looking at it happening in a bull market, you really need to remember. If you're first likely, you won't know this. But next, cycle, you need to remember that people pushing this narrative do not care about you at all. All they care about is making money. They don't care about the projects. So I'm not surprised at all to see it come down like this because we already saw this happen last cycle, if you were around for them.

We already saw similar things happen. But in terms of speaking to the fundamentals of these projects, yeah, it's never in line with that. And as we saw, Tara went to zero. You know, Solana's not have enough great time and no one talks about Avalanche anymore, at least from what I see. So, yeah. But anyway.

Yeah, I haven't seen anyone. and Avalanche has not shown up in my feeds either, although people in the bankless Discord do say that there's exciting stuff there that I should explore. Something I'm not going to explore, though. I thought this was pretty funny. So, Hex, the Richard Hart's baby, down 97%. Of course, a very polarizing coin on crypto Twitter.

There's definitely an army of hexacons out there that are going to come onto my mentions just because I brought it up. But I thought I'd just put this tweet out there just because I thought it was pretty funny. we can move on though here's a take out or a tweet I want to get your take on

this is Ben this is the Ben the analyst over at Bankless our guy our analyst Ben RPL up 67% against Lido since the November 7th or excuse me November 9th bottom interesting and he takes on

RPL versus Lido yeah I mean I've become so biased recently towards Rockapool because we're both Rocket Pool Maxis yeah yeah I mean I joined as an O'Dow member, Bankless is already an O'Dowd member. I've spun up mini pools. I think the rockerball community is so closely aligned with Ethereum. It's basically the same community. But my, I guess, like, most level-headed take here, not bringing my rockerpool bias into this, is that Lido is already

worth a lot, right? And it kind of grew really, really quickly. But I think there's a belief in the market now that Lido's growth has topped out, right? At that around 30%. And that post-witdrawals, they're actually going to lose a lot of market share due to people reshuffling their ether round and due to Rockapool being in a very, very nice position and going to be an even better position around time of withdrawals to grow. So when it comes to LSDs, it's hard to bet on anyone. And maybe betting on Lider historically has been a good, relatively good bet, I guess. But yeah, I mean, RPL, the token from what I've seen has been very, very resilient. It has an actual defined use case within the protocol itself.

It's not just the governance token. and I think the community is one of the best in crypto. So, yeah, I mean, I am a Rockapool Maxi at this point, but that's my most level-headed take that I can give. Yeah, no, I share those sentiments as well. I think Lido captured a massive amount of the market and asking Lido to go up 67% is much harder than asking Rockapulte to go up 67%.

The winner of the year, the best token, the best crypto asset to hold your money in this year, was unquestionably GMX. If we scroll all the way back out to the one year chart, it is up on the year, a lot of chop, started at $20, currently ending the year at $42, $43. So a doubling on the year. But actually, most of that doubling happened in the first few months.

It was then a flat for the rest of the year. So congratulations to GMX and all GMX holders, because you guys did not lose in 2022, and that made you winners. Here's a chart that I thought was pretty interesting that's actually not the price of a token, but it's actually the price of a stable coin. And this is the chart I saw of Rye in relation to other U.S. dollar and other fiat currencies. And so Rye, of course, is a stable coin in the sense of the word that it's a coin that is meant to be stable, but not stable to anything in particular.

It is opposing market forces. And so how that works, it's out of scope for this. It just attempts to maintain some sort of soft peg to the U.S. dollar, not for, follow it in particular. And if you look at this chart, it's probably the coolest and most simple and most stable asset to hold out of all fiat currencies. Anthony, what's your take on this? Yeah, I mean, I like Rye. Unfortunately, it has some limitations on it that mean that it can't actually grow that fast and it can't actually be used within defy like other stable coins can. And the biggest limitation there is capital inefficiency because you have to collateralize it with

Heath and this is why Die went multi-collateral is because it was very hard to grow with just collateralizing it with Eith. But I think that all of these kind of stable coins, even ones that aren't tied to USD, specifically tied to USD, I don't know. I feel like long term, I kind of hope that we get currents, like we just get like ETH that becomes the de facto currency and we start measuring stability against ETH rather than trying to mimic Fiat currencies. Because, yeah, I mean, fear currencies lose purchasing power just like any other currency does. But if we have one that can maintain its purchasing power over the long term, like something like Eith does, I think that'd be better. But yeah, the stable coin stuff is going to be a massive kind of amendment of thing

still going forward. And I'm excited to see if Rye can actually grow. But generally, yeah, it still suffers from the same kind of issues, I think, that other decentralized stable coins suffered from. Yeah, certainly, certainly. All right, Bankless Nation, that is the snapshot of the year in markets. But we got some more conversations ahead. Next up, we're going to talk about the state of the Solana ecosystem. It's depending on who you ask. It's either in a meltdown or it's moment of solidarity or something. We're going to talk about Solana. Also going to talk about multi-like coin capital and the state of layer two. It's coming up next. But first, a moment to talk about these fantastic tools from our sponsors to help you go bankless. The reality today is that five corporations control the entire

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Solana, which started in May of 2020, about below a dollar. And then at the top of 2021, 2021, it was $270. And now it is $8.36 coming almost full circle to where we are now, down, I think, something like 94% from all-time highs. This is the talk of the town on crypto Twitter right now. everyone's talking about it. And the tweet I put out, which I won't read here, is that the Salana community is trying to bolster morale. The East community is saying it was vapor all along. The trading community tells me how bad the chart looks. Anthony, what's your take on the Salana ecosystem right now? So my take has remained the same from when I first heard and learned about Salana. I think that people kind of look at the stuff that maybe I'm saying and other people are saying, and being, oh, you're just dancing on Salana's grave. You know, you just throwing shots at Solana because it's down so much. And it, like, I've been throwing the same shots at them that I've been throwing since day one. I just don't think the Salana architecture is long-term sustainable. I don't think Salana is going to win against Ethereum and

its L2 ecosystem from a fundamentals perspective. The price action, I think, is in a different kind of realm, and you can talk about it in a different context. But I'm not surprised at all because, like, Salana had support from SBF and FTX, right? And like, now that they're gone, and, now that SBF isn't funneling all the money that he was making, or I guess stealing from customer deposits into Seoul, Sol is going back to basically the price that it started at. Like, I don't think it's going to, I don't know if it's going to go back to $3, but it's basically erased all of its gains. Like it's down more than ETH was down in ETH's 2018 bear market.

And ETH was propped up by ICOs, right? And that's why it came down so much. But when you have something like, like that, such a big force propping up your thing, it's going to come down very, very hard. and Heath went through that in 2018, and that's what Salana's going through right now. Now, in saying that, I think people are,

and this is one point I really wanted to hit on, I think people are making the false equivalence between Eith coming back from that 2018 bear market and Seoul coming back from its current bear market. There is no guarantee of this at all, right? There is no guarantee that your favorite thing is going to come back just because someone else's favorite thing came back. And let me put this in context for people.

Like, there were thousands, of tokens issued and assets issued in 2017 slash 18. Maybe 1% or less of those actually went back to their USD all-time high, and none of them went back to their Ethan BTC all-time high, I believe, except maybe B&B. I think B&B might have been the only thing, right? So you can't just look at previous performance of other assets and say that your thing is going to do the same thing.

Now, the thing you can do is look at the actual ecosystem behind your favorite project and be like, okay, is this sustainable? Is this going to grow? are we going to be able to come back from where we're at today? And I think for Solana, it is an extremely uphill battle, just like it was for Ethereum in 2018. But the problem for Salana is that Ethereum didn't have any real competition at all during its Renaissance kind of period. And Ethereum led its own Renaissance period. Salana has competition from everyone else.

Every other layer one, all these other layer ones like Aptos and Sui and Say and stuff like that. But also Ethereum and its layer-to ecosystem, which actually exists today. It didn't exist back in the day, but it does. does now. So if Solana can come back from that, I'll actually be bullish on it, right? Like, I'm seriously, I'll be bullish on Solano if it can come back from this because they're basically starting from a very, very, very bad position right now, not only from tech perspective, but also from just general sentiment perspective. And if they can manage to build an ecosystem out of that and go back to all-time high, which I think is just near impossible, right? I'll be impressed and I'll be

bullish. But at this point in time, I just can't. And I've got so many other thoughts on this. And I'm not just saying this because I'm an ETH maxi. I believe this about pretty much all the L-1s. And I have a lot of thoughts on L-1s generally. But I'll leave that at that. And you can maybe give your take there because you did say you were going to back the truck up at $10. And I don't think you did. I did back the Tonka truck up today. So I bought a few stole, a handful of sale at below $9. But did I do that because I'm fundamentally bearish or bullish on the Solana ecosystem? No, it's because of the same reason why I said what I was saying when I tweeted that out in the first place is just like, I know what it's like to be in this position. And the thing that it stands out to me the most is the fact that the Salana community seems to be taking this as a challenge to themselves, which of all the reasons to be bearish about Salana.

And maybe I'll just go through with the, I'll put on my Eith Maxie hat too and go through those with you. you're totally right that like Ethereum had like this privilege of being the only Ethereum in the room when it came back from the grave in 2018 to 2020. There were no Ethereum competitors at all. And like Solana has to come back while faced with an Ethereum that is already one cycle ahead of it with all of its layer twos, which are in a bull market right now. That's part of the topics that we're going to talk about. And one thing I've always said is like I won't really be bullish on Solana until I see a frontier of developers push. forward in a new direction that Ethereum isn't. And I'm yet to see that.

That's always been like, all right, David, you are so bullish on Ethereum. What will it take to change your mind? It's always, the answer to that has always been, when I see developers doing things on other blockchains that are not being done on Ethereum,

and those are frontier new level technologies. And I'm yet to see that. And then also... I mean, even, I was going to, just on that note, even if that exists, there's no guarantee that that's going to push soul back to its ridiculous all-time high, because just to get,

context for people. Sol started at about 50 cents, I think. It stayed there for a little while, but then quickly went up. It went up to 280. That is a bigger run than what Eath did in 2017. Heath went from $10.000 to $14.00. It's 140X. Soul did much more than that, right? And as we've seen, it was because of the SBF and FTX kind of money funneling in. So where's this money going to come from to get it back to the old time? Even if Solana is providing value to people, even if they have users, even if they have developers building cool and interesting stuff, again, that does not necessarily translate into price. And I mean, the reason it did for Eath is something that we could talk about, but it's an aside there. But yeah, I just wanted to make that note for people.

And I think this applies to so many different things as well. Yeah, 100%. I think my mind goes back to like the one bullish thing I see about Solana is the community seems to be taking this moment not to capitulate, but to rally. At least that from a very cursory glance from what I'm seeing There was a real community there. There's a real community. And that's like this one nugget of like bullish optimism that I have for the Salon ecosystem under a sea of like, wow, that's a lot of headwinds that like not even Ethereum had to face during 2018.

And so like I'm just not envious of the Salana ecosystem. But I am always heartened to see people believe in something because I think you and I both shared that experience believing in Ethereum during 2018 to 2020. So if that's what they believe in, by all means. Um, good luck adventuring forward into the frontier. Yeah, yeah, yeah. Yeah, but I mean, as I said, like, if they can get out of this, like, it'll be incredibly bullish for them, but it is a huge if.

It is something that, I mean, they have so many headwinds. And honestly, like, Ethereum, as you said, did have headwinds coming out of its own bear period, but not compared to what Salana has here. And I'm not just saying that because I'm, people are going to call me an Ethan maxi for saying that. I literally, objectively looking at the headwinds that, that Salina has compared to what, what Ethereum had. It's very different.

And it's a different ecosystem. It's a different ballgame. If there is a real community there that can bring value and keep building out Solana, that's fine. But is that enough to fend off competition? Is that enough to get sold back to all-time high? I really don't think so. Yeah.

Yeah. And the sentiment on crypto Twitter is like as negative as it can get on Solana. Here's a tweet from She Generates. Maker has 260 million in total locked value in March of 2020 when Ether was collapsing to $85. So during the capitulation crisis of COVID, each ETH collapsed down to $85. And Maker Dow had $260 million of TVL. Some of that was my TVL.

Solana currently has $229 million in total locked value. So the Maker is just a single app on Ethereum. And Solana is an entire layer one blockchain. So this kind of puts into context like Solana has individual applications on Ethereum that it competes with. many, many, many applications. And that is not competition that Ethereum had prior. Exactly. Exactly. It speaks to the fact that back then Ethereum was the only thing that was around, right? And now, Salana is not the only thing that is around. The reason why Salana has such low TBL,

or at least one of the reasons is because people have their funds on other chains. It's not just Ethereum, right? There are other chains out there. Obviously, it's a vast majority of Ethereum, but there are L2s that are just dominating right now. I'm going to talk about that. And that didn't exist back then. Like, there was just Ethereum. There was EOS, but no one, like, I mean, EOS came, his problem was that it came in a bear market, I think, so it didn't get what Salana got by coming and being ready for a bull market. But there wasn't really anything else. And there wasn't DFI or anything. And then Ethereum created this thing called DFI and worked on it. And it's amazing and it works really well and people love it. And now there are other

chains that just copy Ethereum. And there are so many of them. So, like, I don't see the differentiator here. Like, I really don't. And honestly, the only reason why people are talking about Solana so much is because it had such a big bull market and that's just left over from then. There are other ecosystems. There are other L-1s that do much better than Salana. My name's smart chain is killing it, right, compared to Salana. No one talks about it, but it is.

You know what I mean? So I think the only reason why so many people are talking about Salana is because it had such a loud bull market. Now, and that's another headwind. Are people even going to care in a year? I honestly don't think so. And yeah, I could go on forever and people always call me an inkmaxie for this and I really don't like it because I think the takes that we're both giving here are very reasoned and very just looking at the data, looking at what's happening here. And honestly, like, if L2s didn't exist, I'd be just as bearish on Ethereum because there's no way Ethereum would be able to actually service anyone or anything without L2's taking on a lot of this growth.

And from that perspective, I really do think that people need to look at this objectively and look at what's happened. now compared to back then and not just say oh salina's going to make it out of this because Ethereum made it out of its spare market that's it's insane to me when people think that maybe it's just people blindly having optimism here because they need to because maybe they're underwater just like I was underwater on eathbys maybe I had some blind optimism back then but but yeah just looking at it as a whole it's it's very hard for me to to find a bull case you i do want to pay attention to one last tweet from vitalik buteran actually who tweets out some smart people tell me that there is an earnest, smart developer community in Salana.

And now that the awful opportunistic money people have been washed out, the chain has a bright future. Hard for me to tell from the outside, but I hope the community gets its fair chance to thrive. And interestingly enough, this tweet actually marks the bottom because Salana was like breaking down below $8. And then Vitalik tweeted this and it jumped like 20, 25% or something to be, I think, where it is just below $10 right now.

But this is kind of the sentiment. Like I see real people in Salana who believe in it. I think this is the right sentiment to turn to brighter things that make us both happy. The state of layer twos are really, really good. They're really, really strong. So again, this is analyst Ben over at Bankless, who put a L2 year-in review with some metrics that we want to share here. So here is the arbitram transaction count on monthly basis.

Almost every single candle is higher than his previous one for the entire year of 2022, which I think is pretty damn cool. The same thing with optimism is just a chart up until. the right. So L2 usage is just in an absolute bull market. Users are up and up into the right. Unique transacting addresses and of course the rise of GMX on Arbitrum as well, one of the few tokens that didn't do bad in 2022. Anthony, what's your take on all of this? Yeah, I mean, we've been saying people are going to call us Eve Maxes for this, but we've believed in L2s for a long time, right? This isn't a kind of sudden thing for us. This isn't like, oh, all the L1s are dead,

L2s are good. Let's pivot to being bullish on L2s. No, we've always been bullish on Ethereum and L2s and Ethereum's roll-up centric roadmap because it makes the most sense. It makes the most sense from every kind of way you look at it, economic, social, scalability. And we're seeing this play out in real time. While the L-1s are dying, basically, or losing a lot of their activity, L-2s are picking all of that up and people are coming home to Ethereum because Ethereum is consistently the most sustainable ecosystem in crypto. It is the most fun to be on. And I think what was holding it back was those high fees on layer one. And now we have L2s, which have really cheap fees. Not as cheap as some of the L1s out there, but they will be post-Protodank sharding.

They'll be cheaper. And they'll still be able to inherit Ethereum's security and Ethereum's community and Ethereum's network effect. So I'm not surprised at all to see the L2s grow. I'm a little bit surprised to see them grow so well in a bear market. It really speaks to just how awesome the, I guess, like, L2s are, the fact that they can grow in a bear market like this. But what's going to happen in a bull market? I mean, it's going to be amazing. the next ball market we have, Ethereum is actually going to have a scalable ecosystem for people to play around with. People aren't going to be priced out anymore. And I honestly can't wait for that. But an L2 transaction counts have actually flipped L1 now, which is what we want to see. Ethereum L1 is a settlement layer.

It is not a user layer, at least for most users. It is for those who can afford it, of course. But L2 is where the users will sit. And the thesis is playing out before our eyes. This is not a new thesis. We've talked about this for many, many years, and it is playing out. I think people need to understand that is that we're not just pivoting to being L2 balls. We've been L2 balls all along, right? We've been waiting for the L2s to show up. I'm really enjoying this new scaling factor page out of layer 2B. One of my predictions for 2020 is the scaling factor of Ethereum,

which is how many more times layer 2s on Ethereum transact Ethereum's worth of capacity? So right now, Ethereum's got a scaling factor of 2.4. So if you combine all of the layer 2s together at all their transactions, that is 2.4 times the amount of transactions you can put through the Ethereum layer one. And my prediction is that we are going to hit five by the end of 2023. And I think that is a very low number. I think we could see a lot higher than five. Mm-hmm.

Definitely. All right. Bank this nation coming up, we got the news of the week that we got to talk about. China is opening up an NFT marketplace. Absolutely nuts. As an ice storm passes over half of the globe, pudgy penguins reach new all-time highs. incidents. And a developer gets arrested and exchange gets sued. And I ask Anthony to rate crypto Twitter tweets out of 10. So stay tuned for all of this and more. But first, a moment to talk

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EVM equivalent layer two. I love those words. And they tweet out, First, Public TestNet is now live. Welcome to our Alpha One TestNet, aka some Icelandic word that I'm not even going to bother to pronounce, but it's got a volcano next to it. Nowfels Jokul or something.

You get that way better. than I would ever had. So congrats on that. And they continue as we, it's as open as we make it. So while you are relaxing this week, participate, deploy a contract, wrote a node and proposer, or just make some transactions. So if you are interested, probably for the technically minded, if you are interested in exploring the frontier of ZK EVMs that are EVM equivalent, check out Tyco. Yeah. The unique thing about Tyco is that they're building a type 1 ZK EVM or ZK roll up. So I know ZK EVM. And I don't think there's any other ZKVMs doing that, which is cool. Because I think, Vitalik mentioned there were like three or four types of ZK EVM and they have different properties.

But yeah, Tycho is building a type 1 ZK AVM. So different than the other ones you may have heard of. Yeah. And if you want to learn more about what Anthony just talked about there with the type 1 versus type 2, read this post that will link in the show notes about how to distinguish a ZKEVM. DGODS, an NFT project on Solana, has now decided to bridge over to Ethereum in Q1 of 2023. So kind of some indication of a little bit what we were talking about earlier. I think that they were the biggest NFT project on Solana.

Just to give some scale here. It's not just some random NFT project. From what I saw, it was the biggest. And they also bridging something called Utes to Polygon as well. So, yeah, I mean, it's kind of like people abandoning the Salana chain for Ethereum and Polygon. And that's how people kind of read it on Twitter. Yeah, I don't know.

There is a signal there. I don't know exactly what that signal is because I don't know what this project is. I don't know how sustainable it is. I don't know anything about it. But there is a signal there that projects moving from Salana and other L-1s back to Ethereum or just over to Ethereum and they're polling on POS chain. There is a signal there, I believe. It depends on what you want that signal to be, though.

Certainly, like I talked about with the Pudgy Penguins. Did you ever own a Pudgy Penguin, NFT? Anthony, I don't think you're really much for an NFT guy. No, but someone, I think, crypto wife made me a penguin in my kind of white character, But it wasn't part of the NFT. But yeah, I don't think I ever owned a Pudgy Penguin, no. Well, let me tell you, I bought some Pudgy Penguins and sold them at the absolute bottom. So congrats to everyone that held the Pudgy Penguin because it just hit an all-time high of 7th.

Rare to see an NFT hit Eth all-time highs these days. But congratulations to all the Pudgy holders. Speaking of NFTs, China is actually launching a national digital asset marketplace to trade. Actually, not NFTs. They are specifying digital collectibles. Because apparently digital collectibles have been popular amongst Chinese collectors through heavily regulated marketplaces. And now there's going to be a Chinese national digital collectible marketplace. Wow.

Did you see this one coming? No. And I kind of take news out of China with a grain of salt because there's a lot of lost in translation. And the Chinese government basically changes their mood from time to time. I mean, we've seen China bans Bitcoin a million times, right? So I kind of take that with a grain of salt. We'll see. It's not really interesting to me, considering it's a very closed ecosystem.

Like, it's more closed than a centralized exchange, right? It's completely, idly controlled by the CCP. So, yeah, there's definitely not something that interests me, to be honest. But interesting development, but yeah, not something that interests me personally. I mean, it definitely checks out if China is making a CBDC. This is what is this? This is basically a CBDC version of a marketplace for digital collectible. So I think it's China, if we're taking this piece of news at face value, because, yeah,

you're totally right. There's like a, just like a cultural barrier that can't be crossed with a lot of news and information that comes out of China. But I think it's fair to assume that the Chinese government is like, oh, digital collectibles, those are totally going to exist. So we should make a marketplace that is state run to facilitate that technology. That seems like the very obvious, like path, just like accepting their existence and then making a state operated exchange to do that. That sounds pretty China to me. Yep, exactly. Did you know, micro strategy purchased an additional 2,500 Bitcoin for $41 million, Anthony? Well, is it a day that ends with why? Micro Strategies buying BTC. You know, what I found funny about this actually is that they sold some BTC to tax loss harvest and then re-bought and bought more, which is actually kind of smart because they're down so bad on a lot of their buys right now.

So tax loss harvesting makes sense. But yeah, I mean, I'm not surprised at all that Sailor bought more BTC, right? Yeah, yeah. Here's that article about the tax loss harvesting. Sold 700 Bitcoins, bottom back two days later to tax loss. And he also sold a bunch of M Master Strategy stock, I believe, and then probably put that money into BTC. We're just kind of funny when you think about it. He's like taking the Tradfai money from Master and putting it into BTC. So yeah, that was interesting as well, I think. Dude, this is the story for the ages, man. Like this is, Ryan's take, and I think I should agree with him is that it's going to work out for him. Like, Bitcoin is going to end up in the green

for Michael Saylor. Probably, yeah. I mean, I'm not bullish on Bitcoin against ETH, but like against USD, it can probably easily go back to all-time high in the next cycle. I have no doubt there. But yeah, it'll probably work out for him, but it would have worked out better if he bought Eith. That's my opinion. Hey, to each their own, you know, everyone's, everyone's got their preferred assets. Yeah, yeah. We've been following stories like this over the fast few weeks, so here's another one, Argo blockchain, which is a Bitcoin mining public company, has suspended trading in U.S. shares for 24 hours. They are on apparently the verge of bankruptcy, so they are looking to figure out how to restructure without declaring bankruptcy, but the health of the Bitcoin mining ecosystem is definitely

being stressed. And this is nothing new. This happens at the bottom of every single bear market, really, is like Bitcoin miners go under and the strong ones become stronger. This is kind of like an important facet of like how Bitcoin works in the first place with just miners always improving in efficiency in theory. But to me actually, Ryan, excuse me, I almost just called you, Ryan Anthony. This actually marks a bottom for me. This is a bottom indicator of for just the crypto industry at large, but also specifically for Bitcoin. And I have this ETH BTC long position open. And this news like this actually makes me a little nervous just because this is a strong bottom indicator for Bitcoin.

Yeah, but there's also still a lot of mining emissions that will just keep getting sold, right? Like that was my main thesis around ETHBTC was the fact that ETH no longer has those emissions and BTC does. And on top of that, these collapses just lead to more centralization of mining because, as you said, the bigger players get bigger, mining becomes more centralized and becomes much harder to compete because of that because you need a massive amount of capital to start up. And I know that there are arguments to be had about proof of stake centralizing as well,

but I think that's out of scope for my point here. But, I mean, I don't think I can be bearish on ETH BTC, and that's no, just because some miners have capitulated doesn't mean that the existing miners aren't going to continue to sell BTC to cover their expenses. They definitely will. That is not a theory that is a fact. They have to sell BTC to cover expenses. That is the only asset or the only revenue that they make is from selling BTC.

Some of them may have a very small part of their business. business that does other things, but it's like centralized crypto exchanges. Majority of their revenue comes from crypto trading, right? So the majority of the Bitcoin minor revenue, if not all of it, comes from selling BTC. And this goes for any minor. So when you have that sell pressure and Ethereum doesn't, and ETH as an asset has much more, I think, demand drivers than BTC does, at least from my perspective, I don't know how you can be bearish on ETH BTC in that world. Yeah. Yeah. And some more news out of the crypto exchange role, Gemini's Earn Program is being sued by some of its investors.

of course because all that money was in Genesis, which went under because of FTX. All of this contagion worked its way to Gemini earn. And sadly, is now being sued by investors due to all of that. Anthony, any comments here? I mean, just more kind of innocent people getting hurt, right, thinking that they'll putting their money into something that was trustworthy because Gemini is a trustworthy exchange, right? They haven't really had any dodgy stuff happen around them.

And yeah, I feel sorry for people that lost money here. But again, speaks to if you don't know where the yield is coming from, you may just be the yield. Yeah, that's a good take there. Anthony, a few weeks ago, Ryan and I covered the story of this guy, Avey, who was manipulating markets on mango markets on Solana and then took some of that winnings to go get liquidated with gambling with Curve in Avey. I don't know if remember that story, but that developer was arrested for commodities,

fraud and manipulating markets. Go figure, right? And I thought this tweet was pretty funny from him. Statement on recent events, this was after he was publicly known to have done all of this. He did this out in the open. I was involved with the team that operated a highly profitable trading strategy last week. Second tweet, I believe all of our actions were legal open market actions using the protocols as designed, even if the development team did not fully anticipate all the consequences of setting parameters the way that they are.

Unfortunately, the exchange this took place on market, mind-go markets became insolvent as a result, with the insurance fund being insufficient to cover all liquidations. This led to other users being unable to access their funds to remedy the situation, I hoped negotiate a settlement with the insurance fund with the goal of making all users whole as soon as possible, as well as recapitalizing the exchange. This man is now being charged by the CFTC for commodities fraud. Nice. Yeah, yeah, commodities for market manipulation. My main takeaway from this is a broader kind of take where essentially it kind of opens Pandora's box now. Like if you can prosecute for this or if you can charge for this, can you charge for people running MEV strategies, right? Like, for example, there is a very toxic M.AV strategy called sandwich attacks that pretty much everyone agrees with is extremely toxic and should be completely eliminated.

But can the CFTC charge the MV searches and maybe even the relays for kind of helping this to happen? And I don't know. Maybe they're studying it. Maybe they're trying to see if this can be considered market manipulation. But it's all very subjective because there's also MEV in tradfair markets and it's quite toxic as well. like payment for order flow, I believe is quite toxic where the biggest players get to pay for the order flow information and then make money on that, basically a form of MEV. So it's going to be interesting to see how that shakes out. But it seems like they're more so going after the individual

rather than the actions that the individual, like the individual for the actions he took, but rather than the actual actions, right? So maybe just don't be so public about it and don't actually go out there saying that it's a highly profitable trading strategy when in reality you were just manipulating things. And you knowingly did it, right? You knowingly manipulated the exchange, knowing that it would lead to losses for users. If you do it like that, then yeah, I mean, I think it's a bit, if you'd be brazen about it, yeah, it's a bit more. Yeah, and the way that this works, Bankless Nation, if you're questioning how this happened, is he basically took a large sum of money, was able to move a market in one direction for an

Oracle price and then be able to take a position out of that market that he just moved in order to capitalize on it. And then when everything resets, after he's been, you know, tinkering around with oracles and prices on illiquid markets, he ends. up with way more money. And then everyone else that had money in the in the mango market didn't have any money to withdraw. This is called an economic attack. And it's what, it's market manipulation is what it is. And so, Anthony, are you saying that the difference between like a sandwich attack with MEV versus market manipulation and defy app is really just like on a spectrum and one's very, very small and one's very, very large? Is that kind of what you were saying? Yeah, but it's,

I mean, it's just subjective, right? It just, it depends on which regulatory authority that it is, what they want to go after, what's actually written in law, what they can prove, what they think is harmful on what scale it's harmful at. There's a lot of different moving parts here, but you could, you could imagine an argument being made by one of these authorities to say that anyone engaged in MEV behaviour is hurting people, so we're going to prosecute for that. But it'd probably be a lot harder to prosecute for that rather than just going after an individual being so loud about it and having all the on-chain proof to kind of go after. Because a lot of the searches are actually anonymous from what I've seen, the MV searches. Oh, interesting.

All right, Bankless Nation coming up next. We got some questions out of the nation. We're going to go straight to the Inner Circle Discord to get some of our questions this week. And then we got some hot takes of the week. And Anthony and I play a fun game where I go through the hottest takes, the hottest tweets of 2022 and ask him to rate them on a zero to 10 scale. I think that game's going to be pretty fun. But before we get there, we have to talk about some of these fantastic sponsors to help you go bankless.

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You can download the browser at brave.com slash bankless and click the wallet icon to get started. And we are back with some questions from the nation. We're getting these questions straight from the Inner Circle Discord. So if you are a Bankless premium subscriber and you would like to ask either me or Ryan, but this week, Anthony, a question, go into the Bankless Circle, inner Discord and ask it in the brand new weekly roll-up question section. The first question of the week comes from Poser out of the Inner Circle Discord asks, how does Aztec compare with Tornado Cash, how is it security model, and why did you invest in it? Because this bankless listener knows that Ryan and I invested in ASTEC. And since Anthony also invested in ASTEC, you want to take this question?

Yeah, so the main difference between ASTEC and Tornado Cash is the Aztec has a much broader kind of scope here. ASTEC is a privacy preserving layer. or they've actually kind of rebranded themselves lately to an encrypted L2 because they're using the term encryption instead of privacy. Great rebrand. Great rebrand. Yeah, it's a really great rebrand. And I think it may be due to, I guess, the stigma around privacy, which unfortunately exists.

But basically, Tonnetta Cash is a mixer, right? Very good mixer, obviously, because OFAC found that kind of prudent to sanction it because it was so good at being a mixer. Whereas Aztec wants to be an encrypted layer two where basically you can do privacy preserving transactions at their layer two while also. tapping into layer one Ethereum liquidity. And they have this thing called Aztec Connect and they have a bunch of apps on Aztec that allow you to essentially tap into Ethereum layer one liquidity while doing a transaction

on Aztec layer two, which means that your transaction is still private. So I think it's very cool. I mean, as you said, I'm an investor in it as well. Basically because they're one of the only L2 teams, if not the only one focusing solely on making a privacy preserving L2, which I think is incredibly interesting and incredibly needed. I mean, my two biggest bull cases for Ethereum are, my two biggest things I'm interested, sorry, in Ethereum are scalability and privacy, and as tech offers both. So, yeah, no brain of investment for me, for sure. Not only does it offer both, but one actually helps the other. So the privacy helps the

the speed and the speed helps the privacy, which is a pretty cool synergy between these two things. All right. Next question coming up, Lab Punk. What is it currently the best hardware solution, price over quality to run a dedicated eth node. Anthony, I know you've got a solo staker computer. I don't think you're going to suggest that as a price to quality-staking computer. But I was wondering if you could give your take here. Do you have any ideas as to the best kind of hardware to set up an eth-node? I think the best hardware would probably be a Nuck. So if you search like Intel Nuck on Twitter, that's going to be your best kind of like

price to performance ratio. Now, my star is taking PC. I posted the Twitter. People probably saw it. It's basically a gaming PC. Like totally overkill. You do not need that at all. But an Intel Nuck with at least.

at least 16 gig of RAM and a 2 terabyte solid state drive is going to be your best bang for your buck. Now, in saying that, you can also run validators on Raspberry Pi's or what's something called a Rock 5B board. But for everyday people, I would suggest something like an Intel Knuck and run something called DAP node on it, which makes it really easy to stake. And DapNode actually has their own solution with Avado. So Avado is basically an Intel Knuck that comes preloaded with DapNode and then you can run it with that. So yeah, I would say that's your best bang for your buck kind of node to run a dedicated eth node slash validators on that. I forgot I had it right here.

Oh, there you go. That's not what it is, really. That's all you need. And you can run up to hundreds of validators off of that, which is actually what someone from the Rockapool community does. I don't believe he's running it off a Nuck. I think it's either off a Rock 5B or a Raspberry Pi. He runs hundreds of Rockapool mini pools off of that,

which means he's running validators on that. So when you kind of look at it like that, yeah, you don't need beefy, overpowered hardware at all. And people who do that, like me, are just doing that because they like pretty things. But yeah, an Intel NAC or a Navado, which is basically not coming pre-installed with DapNode, is probably going to be your best bang for buck, I think. Yeah, and these are really what these machines are for. They're just like the minimum viable computer that's in a tiny little box.

And it does all the computation you would ever need for a computationally constrained blockchain. Like your individual computer can totally run a blockchain. And it doesn't really need to be that big. All right. And then last question, Theo, will there always be an N plus one layer two's, or do you think we will settle with a winner-take-most kind of market between one of optimism, arbitram, ZK, sync? I'm not sure if they specifically chose these three, but there are some bigger layer twos that we would expect to be in the future. And I think that N-plus-one phrasing is kind of interesting. So I think the question is, will there always be growth in the supply of layer twos?

or will there be a concentration on a few layer twos that will scale both horizontally and vertically. What do you think about this, Anthony? So broadly speaking, to me, there are two kind of categories of layer twos. There are the generalized ones like optimism and arbitram that allow you to do anything like what you do in a few in layer one. And then there are the specialized ones like the app layer one, sorry, the app L2s like DYDX, for example, that are very specific to a use case and very specific to just DYDX. So I think that in terms of generalized platforms, there's only going to be a small handful of them that actually take the majority of the market share. There aren't going to be hundreds of these generalized L2s that all share market share. It's just not going to happen like that, I don't believe.

But then on the dedicated L2 app layers kind of things, I think that we're going to have hundreds of those. I think there's going to be a lot of different ones. Not all of them are going to succeed, of course, but they're definitely going to be quite prominent. So that's how I split it up. And I think obviously the market leaders right now are arbitram and optimism in terms of the generalized. platforms, but the jury is still out on a long-term winner. I mean, as we've seen, there are ecosystems that can kind of build up a network effect, but then lose that quite quickly because it may not have been a real network effect. It may have just been subsidized by bull market activity, but yeah,

that's how I generally look at it. And I think that's a good way to frame it as well, because there is not going to be hundreds of generalized altus. There's just, I mean, just from a perspective of network effect, there's not that, the network effect, but get the network effect. And because of the power law distributions that we see in pretty much everything. I don't think the generalize L2s are going to escape that power law effect. Yeah, I think we can definitely apply the same reasoning why you and I both don't think that there will be a large number of smart contract layer ones are probably going to extend itself into layer two. There's probably not going to be that many smart contract layer two either for the same reasons that we believe the first case. But then there's

also, you do get the more app-specific chains. Like there's always going to be like a single chain for like World of Warcraft, for example, or whatever, like, more specific niche use case you have for a specific server of some kind. But then also there's, there's takes like Polenia's take, who thinks that they always emphasize the possibility that a layer two will be able to produce some possible new type of money, a new economic model for money. I've seen them articulate that a number of times. And so there's, like, perhaps use cases for layer two that we haven't even really been able to optimize for it yet. Actually, Anthony, I do have one more question for you.

I can't actually remember where this was asked in the inner circle, but I thought I'd ask you. What is your favorite Pokemon? Oh, geez, that's putting me on the spot. I haven't played a Pokemon game in a long time. I think my favorite from, I guess, like, when I used to play it a lot, which was very, very long time ago, Sapphire and Ruby Days, Gen 3. I would say my favorite from back then was probably Salamance, because the way that

got Salaman's was getting a bag on. And I think it's bag on. And to get that, you had to go to a specific cave and kind of find it and took me a while to get there and find it. And I just, I actually remember where I was. I was at, I was at the beach playing on my game boy as a little kid with my parents. And I got it there. And then it involved into Sheldon, I think it was. Sheldon or something. And then Salamance. So yeah. But yeah, since then I haven't really got kind of played it too much. So that would, that would be my answer. All right. And of course, all of these questions came from the Inner Circle Discord if you want to come in and have some fun with us, sign up for Bankless Premium. And I will see you in there in the questions and answers channel. One take of the week

this week out of crypto Twitter. And this is coming from DGN Spartan himself. And if anyone else tweeted this tweet, I definitely wouldn't have included it. But DGen Spartan says, personally, I'm excited about 2023 because that's when the crypto bear market ends. No specific time in 2023, but just 2023 broadly. Anthony, what do you think about this take? It's a meme. I'm sorry to burst your bubble. It's a copy past. Seriously? Yeah, yeah, I'm sorry. No.

Did I just get memed? Yeah, you did. You got inverse broad. I just got inverse broad? Wow. Because, look, DeJen Sparton, I consider to be one of the smarter people on crypto Twitter, even though he ship posts a lot. Even though this is a shitpost.

And ironically, I think it's also truthful, but he's also been calling the bottom for as long as I have on Eath specifically and saying that now would be a good time to accumulate for the next cycle, which I also believe, to be honest. So I think the bare market for Heath And BTC ending I mean it could be in 2023 If you subscribe to those usual cycles that we see in crypto But yeah

I think on the surface this is a shit post With a bunch of alpha underneath it as well Yeah see that's always a beauty A beauty about DGEN's tweets It's like yeah it's shitposts but like It could not be though You don't really know You don't really know

Yeah but I think he subscribes to the same thing Maybe we do where now is a time to accumulate and like on Ethan, maybe BTC, but yeah, it's kind. And then he's, he's also saying things like, there are some assets that are going to give you 100x from here, just like what happened last cycle. But picking those is really, really hard. And it's even harder these days because there's so many more assets and projects.

But, but yeah, when you see market talk like this on crypto, Twitter, just generally to people, I would kind of steer clear of it, no matter who it's coming from, because no one has a crystal ball. But if you are a long-term investor, then, yeah, I mean, you can look at a few different kind of metrics out there and come to a conclusion based on that. And then the last set of tweets that we're going to go through in 2022. This will actually be the last tweets. Blockworks put out this article that I thought was pretty fun.

Crypto-Twitters, most-like tweets of the year. There's seven of them. So we're going to go through them one by one. We're not going to talk about this one. We're just going to put it on screen and briefly move on. Number two, Vitalik Buterin about the merge. And we finalized, happy merch to all. This is a big moment for the Ethereum ecosystem.

Everyone who helped make the merch happen should feel proudly today. Anthony, rate this tweet out of 10. Like 100 out of 10? Like, come on, this is easy. This is, I mean, the merch was the best thing that happened this year. And Vitalik Twending about, I mean, I saw Vitalik tear up on the stream, right? Like, he was in, like, I couldn't imagine the amount of happiness he was feeling, seeing the merge happen after working on it for so long.

It's like his pride and joy, right? His baby. So, yeah, I mean, this is the best tweet of the year for me. I mean, the merge is the best thing that happened this year. This is the best tweet. Yeah, there's not even hard for me to answer. Yeah, and the 194,000 likes. I think that, yeah, this makes it Vitalik's most like tweet.

Coming in, number three, CZ, we need less divide in the world, more building, a 136,000 likes. Anthony, rate this tweet. I mean, I agree with the tweet, but coming from CZ, it's a bit ironic. CZ's kind of like a redemption arc has been funny because he's like being able to have like a more positive view of himself because of SBF blowing up. but CZ is still a villain in his own right to me. So I would say I agree with the tweet, but I think it's very ironic coming from CZ. And out of 10, I mean, maybe eight out of 10 or something,

because that's what I've always believed in. Like, let's just keep building. But it would be 10 out of 10 if it came from someone else. CZ is a villain? Why is CZ a villain? To go into it would take me a while. But CZ has promoted some very shady and scamy things in the past to make himself,

to make Binance kind of successful. He got into bed with Justin Sarn and Tron during the last bear market. He was a very, very, very big promoter of them. And he generally does a lot of the same stuff SBF did in terms of, I guess, like, well, I mean, it's suspected of, but there's obviously not much proof. But he's definitely better at managing his risk as well. He's definitely better and like not just, I mean, he's everything that hasn't, I don't think he's stolen customer deposits or anything like that.

But for people who have been around for a while, you'll know that CZ he's definitely been a villain and he's just kind of like rejigged his image recently. Maybe these days he's not as much of a villain, but he definitely was back in the day. I definitely agree that all those things definitely happen. I will also give him some credit of he has put a lot of private keys and a lot of people's hands. And at the end of the day,

you also have to take into account that people in like South America and Argentina use Binance to get their lives done. And so... Bynance is a good business, right? and it's been great for crypto and all those insolvency rumors of what I think we're really, really dumb about finance. I think comparing Binance and FTCS is completely wrong and comparing CZ and SBF is completely wrong.

But at the same time, CZ is not an innocent party. It's not like he's an angel. He definitely is a villain in his own right. He definitely cares about growing Binance at all costs. I don't think he cares about his own wealth and power. Like, SBF definitely cared about power above all else. But I think CZ as a person cares above all else. growing binance. And he's stuck to that, which is fair enough. But he's done unscrupulous things

to grow binance, which, yeah, that's where the villainous comes from, I think. All right. Coming in number four, Naïbe Buckele, the president of El Salvador, just over 100,000 likes. El Salvador just bought the dip with an El Salvador flag. 500 coins at an average US dollar price of $30,700. Anthony, zero out of 10? Like zero? Because this dude's just eating his country's like money into BTC at highs and I really don't think that his citizens cared much for BTC or cared much for it being integrated. They, uh, yeah, El Salvador as a country is, is not, you know, it's not first old country, right? And to see your presidents, and I say president with quotation marks,

uh, because there is, uh, apparently he's not much of a president, more of a dictator, to see him yeeding this money into BTC into being underwater on and then trying to force his citizens to accept BTC at their businesses and stuff. I don't know. I don't think this is, this is a great look at all. And I've been critical of this for a very long time. Yeah, again, I don't totally disagree. Michael Saylor tweets out, Monday morning is time to get back to work

and it's a meme of Michael Saylor handing you McDonald's fries. Hashtag Bitcoin. Anthony, write this tweet. Yeah, I mean, I think as a meme, it's hilarious. Again, going back to like the person tweeting it versus the tweet itself. So I guess like 8 out of 10 maybe. But he traded this in May of this year when BTC was collapsing. and so was Anthony and everything else, right?

And he's just making fun of himself for being underwater. So I guess he's got some humor there. But at the same time, yeah, at this like Sailor, I'm not a big fan of as people know. Yeah, you have to give him the credit on the tweet, though. That is pretty good for you. Yeah, definitely, yeah. Sam Bankman-Fried, 58,000 likes.

One, I'm sorry. That's the biggest thing. Two, I effed up. I should have done better. Anthony, rate this tweet. Oh, I mean, like, negative a million out of 10. Like saying I should have done better. Are you kidding me, bro?

Like, you literally knowingly stole customer deposits to try and eat into things to try and leverage trade and make up for your bad trades. Like, get out of here. Get out of here. Like, I'm so glad that he actually got arrested and is actually facing jail time for his crimes here because this is just ridiculous. And I think I said this on my own show, people like SBF who were just basically massive egomaniacs, when their empires crumble, their mind breaks.

And they're actually not thinking straight anymore because they know deep down, that they're never coming back from this, right? And he's not the only one, Doquan, 3AC. And they speak like they're actually mentally deranged and they're saying things that a normal person wouldn't say. And that's simply because their mind is broken. Their empire is gone and their life is over. I think they know that.

And their careers are over. And they have to deal with that. And their way of dealing with that is this, apparently. Yeah, that's a pretty good take. Speaking of the devil. Speaking of Doquan, yeah, Doquan at 41,000 likes, close to announcing a recovery plan for UST, hang tight, tweeted out on May 10th of 2022, 41,000 likes. Anthony, you rate this tweet.

The same as the previous tweet. Like, what a piece of shit, right? Promising people that he was going to be able to recover UST and everyone had their money and people lost billions of dollars. Like, seriously, like when Doquan arrests, honestly, like, what a, I'm not going to mince words here. Like, him and SBF and the others of this cycle that have knowingly lost customers. their money and created these bullshit things. And especially people like Doquan who had a massive ego and would dunk on everyone calling out anything wrong with UST

or anything bad about UST. Yeah, I mean, and the fact that they were so liked these tweets as well, it just speaks to how crazy the bull market got and how people just didn't really give a shit about anything except making money. But, but yeah, I mean, the lesson from all of these people is that the most popular people in a bull market are not people you should be following. They're usually the ones who get washed out first.

And we saw it this year. saw them all get washed out. And yeah, maybe lessons for next, next ballmark of people that are still around today. Yeah, I did tweet out about what lessons did we learn during this last bear market. And it was like, oh, yeah, we don't listen to egotistical personalities. So I don't think we're going to fall for that again. I hope there's like a decent number of people who all learn these lessons. I'm not optimistic that there's like not another new lesson that we learn that we don't

totally foresee. But that was my take about that. All right, Anthony, to close it out, of course. so we're going to do the very last meme of the week of the year of 2022. Are you ready for it? Yep. Here we go. It's Gary Gensler who's saying, come on in and talk to us.

And then Sam Bakeman-Freid saying, I did several times. Give us your takes. I mean, I'm going to be careful with what I say here because I'm dealing with accusing people of things. But there is a lot of kind of evidence and a lot of proof that Gary Gensler was, I mean, bed with SBF and not treating him like a bad actor, actually inviting him in, treating him like a good actor, getting ready or gearing up to give him preferential treatment. That's kind of coming out. It's all alleged. I'm not saying it's proven or anything like that. But I think Gary Gensler has done an absolutely terrible job as the SEC chair. He has not protected really anyone. He only cares

about himself in his own career, which is evidenced by him going after celebrities like Kim Kardashian, instead of going after the actual scammers in crypto, the big ones. So yeah, he did nothing to protect people from FTX and SBF. And obviously FTCS wasn't regulated in the US. FTX US was, but FTCS was in the Bahamas. But the reason it was was because they wouldn't provide a regulatory framework for FTX to operate within the US. And yeah, I mean, there's a lot of takes on the SEC in general, but yeah, they've completely failed in their mandate in my eyes.

Yeah, and I've actually been talking to a number of securities lawyers in last week's going down the securities law SEC rabbit hole. And the both, the two takes that I've gotten is that in order, in order, for crypto to get the regulation that we want, we're going to need a new administration. And so I'm going to put my daydreaming hat on. And I'm going to say that because of this, because of the relationship between SBF, FTX and Gary Gensler, as Gary Gensler was using SBF and FTX as like a playing card to elevate his position and his power, that hopefully is also the downfall of Gary Gensler as if this plays out. And then we get a new administration

in the SEC as a result of that. Maybe I'm daydreaming, but I see that as a potential possible path forward, which would be extremely bullish, but that is just absolutely mere speculation. Anthony, sadly, our time is going to have to come to an end because we have gone so far over time, but I have absolutely enjoyed this weekly roll-up that we've done together.

Thank you, of course, for always subbing in for when we need to get the AI some software updates. If y'all want more of Anthony, he puts out a video basically every single day, 30 minutes, about what is going on, in the Ethereum ecosystem. It is called The Daily Grey. You can find it on YouTube.

I get it as a podcast. Anthony, talk a little bit more about the Daily Grey. Yeah, I mean, I will say that if you're into Ethereum and really Ethereum alone and want to hear me say bullish things about Ethereum, then the Daily Grey is for you. Please don't come to the Daily Grey expecting me to say nice things about other ecosystems. I think some people get the wrong idea sometimes. The DailyGway is an Ethereum dedicated channel. It is not like Bankless, which tries to cover everything.

It is definitely Ethereum and Ethereum alone. But if you're into that, if you are all about Ethereum, then the Daily Way, I think, I believe is the best resource for keeping up to date with everything happening in Ethereum. So, yeah, and I would really appreciate it if you subscribe and watched my videos and gave me feedback if you think I'm doing things right or doing things wrong. But yeah, go check that out if you're into that stuff. Yeah, and I, of course, have the Daily Gway in my ears at least a few times a week, at least a few times a week. I do try and catch every single episode, but I definitely binge them for sure. Anthony, thank you so much for joining us. And also Bankless Nation, thank you for joining Bankless throughout all of these weekly roll-ups of the year.

That was 52 out of 52 weeks. We've done a weekly roll-up. And Anthony, thank you for joining me for, I think, two or three of them. Yeah, I mean, yeah, it's definitely been three, I think, or four, maybe four. But yeah, thanks for having me. This is always very fun. Yeah, absolutely. And of course, Anthony, did you know that crypto is risky?

You can lose what you put in, but we are headed west. This is the frontier. It is not for everyone, but we are glad you are with us on the bankless journey. Thanks a lot. Oh, and also here's a moment of Zen. Bam! Hey, hi. So, I'm SBF, founder and CEO of FTX.

My accidental theft of our customers' life savings to create a giant over-leveraged Ponzi slush fund for myself is a tragedy that should have never happened. And to all those affected, I want to say I am deeply sorry. I'm sorry. I'm sorry. Sorry. Oops. Sorry. I'm sorry. Sorry. I'm deeply sorry.

Huh. Sorry. Oopsie-dupsy. Ladies and gentlemen, we got them. Some breaking news. In the case against disgraced crypto founder, Sam Bainteam-Maid. He was just released on $250 million bond. Sorry.