Bankless - ROLLUP: Wormhole Hack | Wonderland Follow Up | Justin Bieber Bored Ape | Gamestop X Immutable

Starting point is 00:00:00 Just like Groundhog Day yesterday, too, wasn't it? Do you know if the Groundhog saw a shadow? I have no. You don't track this? No. Is there no D-5 prediction market on this? For Groundhog Day? Hey, Bankless Nation, it's time for the weekly roll-up.

Starting point is 00:00:15 David, first week of February. How you feeling, man? I'm absolutely stoked. There's so much how that happened in this last week. I say that every single time. But again, it's always, always true. And at the same time that so much happened, there's also so much to be excited about.

Starting point is 00:00:29 And we are going to talk about all of those things. What happened in the week? And also, what are we excited about moving forward? Because there's a bunch of shenanigans going on in crypto, as always. And we're going to cover it this week on the bankless Friday weekly roll-up. Oh, my God. So much to discuss. Largest exploit ever.

Starting point is 00:00:45 Okay? This might be a $300 million exploit. And it happened on a bridge. This was actually the second largest in defy history, I should say. We're going to talk about this. This happened on Solana. It left 120K worth of ETH. Solana. No, no, no, no, no. 120k, eth on Solana. Yes, yes. Backed by nothing.

Starting point is 00:01:06 Pacted by nothing. Okay. So we're going to dig into that. Why did that happen? What's going on? What are the takeaways? Also, GameStop partnering with Immutable. So this is the Wall Street Betts love GME. And they're partnering with a mutable to do a hundred million dollar fund. We'll talk about that. More trouble in Wonderland as well, an extension of the conversation we started last week on this D5 project that was managed by a convicted felon. Also, the IRS, are they taxing staked income as income? Or maybe not? Maybe they're not.

Starting point is 00:01:38 Only you would include that as a hot topic of the week, Ryan. This is super hot, okay? I mean, I want to know if my staking rewards are income or not. There's a potential they might not be. And some guy named Josh is suing the IRS to push that, which is awesome. Ryan just thinks this is the coolest thing. My best, my new best friend is Josh. He has a fitness center too.

Starting point is 00:01:57 We're going to talk about that. Also, David, NFT season, I know you want to get to that too. January's been a hot month, right? NFTs are up. NFTs are in vogue. NFTs season has been in. It's not the old NFTs. It's a bunch of new crops of NFTs.

Starting point is 00:02:12 Some new celebs, Justin Bieber, is included in the new celebs that are aping into NFTs. What NFTs did Justin Bieber buy? I'm sure everyone listening to that is on the edge of their seat waiting to hear exactly what Justin Bieber is up to in the world of NFTs, yeah. You just got to front run the beeps now. That's the objective in NFT trading. So so much to discover, to uncover as usual.

Starting point is 00:02:34 It was like Groundhog Day yesterday, too, wasn't it? Do you know if the Groundhog saw a shadow? I have no clue. You don't track this? No. Is there no DeFi prediction market on this? For Groundhog Day? Does this not matter to people?

Starting point is 00:02:46 I don't think the overlap is all that big. Okay. All right, Groundhog Day is a thing in the past. Guys, we're going to talk about all of the, things before we do. We should talk about some updates from our friends and sponsors at Xerion. Xerion is something we've talked about on bankless often. It's like an app that I check almost every day to see my D5 portfolio and they're adding some cool things. David, what are they adding? Oh, so many things. They've added this fantastic graph that I actually really, really appreciate

Starting point is 00:03:15 just to see like all the different token, the aggregate value of my entire portfolio. But as we expand into the multi-chain, multi-el tube cross-chain ecosystem, Xerion is being the one-stop shop to get all of your money in all the places that you want it to go. So they have included all of the EVM compatible networks that we're familiar with, optimism, Arbitrum, Avalanche. And they also have other layer ones coming soon into integrated into Zerion. So you can easily just put your money in the places that you want it to be through the Zirion user interface. interface, just drop down and select a network, and it's really just becoming the terminal to access all your money on all the bridges and all of the chains all at once, all from one single spot. So go load up your wallet into Xerion and start doing your cross-chain L2-L-1 transfer

Starting point is 00:04:07 shenanigans today. I think it's a bridging as well. This is a great place. If you've got assets scattered all across different chains to see them all in one place, so you guys can find out more. The invitation is to connect your wallet and see what's up with Zirion. at bankless.cc.c slash zirion. All right, David, let's get to the markets, man. Bitcoin price. What are we looking at this week?

Starting point is 00:04:27 Yeah, started the last week, started this week at $36,500. Hit a high of $39,000 and fell back down to $36,770. So, yeah, just up, up less than a percent on the week. But, you know, at some point in time, when everyone's talking about bear markets, being flat is good. So that's what we saw out of Bitcoin this week. And then turning to Ether, ether started the week at $2,500, hit a low of $2,350-ish-dollar, hit a high of $2,800, but then bounced off that high, a little bit of resistance at that $2,800 mark, fell back down to $2,6,000-over-over-off, up 7-ish percent on the week, 6 to 7 percent. So strong week for Ether.

Starting point is 00:05:14 Love it. Bitcoin Flat, Ether up. does that imply for the ETH to Bitcoin ratio then? Yeah, ratio. I think it was last week. It bottomed at 0.065. We are currently at 0.071, almost 72, excuse me. So significant ground like recaptured by the ETH BTC ratio. And gosh, look at that just look at that just floor being printed. Oh my gosh. Like higher highs back in July, we hit 0.055. A few months later, but in October, November, we hit 0.06 as a floor. Just last week, we hit, 0.065 as the floor. So for the last, like,

Starting point is 00:05:50 coming up on almost a year now, the ETH-BTC ratio has hit higher lows consistently, which is really cool. Very interesting as well to track, especially going to the merge. We'll talk a little bit more about that later. The bankless bet index, if you want a third, a third, a third of

Starting point is 00:06:05 thirds, a little bit, a third D5, third Bitcoin, and third ETH, this is the index for you. What's that looking at like on the week, David? Yeah, marginally up on the week, start of the week, at $98 currently coming in at $101, so up a little bit more than 1% on the week. There you go. Good exposure to those things.

Starting point is 00:06:25 David, let's talk a little bit about ETH, all right? Just a little bit. The ratio going up. It's going to be a big year for ETH, we think. And part of the reason why is because we have the EIP 1559 burn in full effect. Market is discovering that. Of course, we have the merge hopefully later this year. But one of our favorite websites, Ultrasound.Money, has added some new really interesting displays where you can see what the burn is doing by category.

Starting point is 00:06:55 So this is the burn over the last day and it splits it in categories. NFTs, Defi, MEV, L2, and Miscellaneous. And what's really interesting here is NFTs as a category looks like it's consuming 47% of Ethereum block space in the burn. So it's contributing to 47% of the total burn. Defi is 21%. Okay? And those are the big categories that like everything else is, you know, after that. But NFTs are the product market fit for the product that Ethereum sells right now, which is block space.

Starting point is 00:07:34 What do blockchain sell? Blockchain sell blocks. Really interesting to see that breakdown in the burn categories here. And it's more clear on what. what you're betting on when you're betting on ETH the asset. It's product market fit for NFTs and for DFI and some of these other things as well. Any thoughts on this, David? Yeah, this is a 24-hour time frame.

Starting point is 00:07:54 What happens if we zoomed out to like a week? Can you, there you go. Okay, and it stays about the same, about the same, so it's relatively stable. And yeah, even going, zooming out to the 30 days, about the same. Pretty cool breakdown, pretty cool to see these categories. I expect the L2 category to grow significantly, especially as things, like NFTs and Defi move on to layer two, the layer one burn rate of these things is going to go down and be replaced by L2 burn rates. And so this is actually kind of a proxy metric for how much activity is going on on L2 versus L1.

Starting point is 00:08:29 And so that will be the thing to watch over the long term. Eventually, L2 will start to just gobble up some of the block space share because when you make an NFT or DFI transaction on layer two, that will consume block space on layer one ultimately, but via. a layer two bridge. So that's what's going to happen there. Totally agree. These are the users of block space. Many of them will be layer twos. And by proxy, maybe your transaction will be rolled up into this. You as an individual will not be able to compete with a whole entire layer two blockchain for block space on the layer one. So just capitulate now and move your stuff

Starting point is 00:09:03 on a layer two. Hey, stop making assumptions, David. I'm sure we have some massive whales in the bankless listener group that will always remain on L1. Well, they can only remain on L1 if other people are also on L1. Humans want to be around other humans. It's just you and the robots will so you might as well migrate. No company there. This is cool too. I love how ambitious this website is

Starting point is 00:09:24 monetary premium track and it's tracking a percentage of market cap of ether versus some other monies. One is Bitcoin of course and ether is about 44% of Bitcoin in terms of value but the next is gold and so

Starting point is 00:09:40 ether right now is only 2.6% of gold. It's tracking the flippening. So everyone pull out your calculators and multiply the price of ether divided divided by 0.026. I'm bad at math. Anyways, pull out your calculators and do the math. Yeah, it's like it could get a lot bigger is what David's saying. Also, it's 1.49% of U.S. dollars. And I think that's probably U.S. dollars. I don't know, it's, it's, it's probably, you know, one of the M0s or M1s of U.S. dollars. So anyway, interesting to track that over time. Another chart that I think is pretty bullish for Ethereum and paints this picture in a different way. Chris Berninski tweeted this out is the percentage share of fees over time. Okay, this is block space sales. And again,

Starting point is 00:10:29 would have blocks chain sell? They sell blocks. This is Bitcoin in red and eth in green. Look at this chart, David. This tracks from inception of Bitcoin, basically, where it was all red. There's 100% Bitcoin were all the sales. Of course, ETH was not a thing. And it's just tracking these two assets side by side. Then ETH comes along to 2016, about like less than 1%, I would say, of the market share of block space between these two. And look what happens. 2017, you can see.

Starting point is 00:11:01 And now look at it. 2022, okay? This is what's blowing me away. And Chris Berninski says almost didn't believe it when I saw it. Bitcoin currently at 1% of ETH in terms of the amount people pay to use the network. It's 1% of ETH in terms of blockchain sales. And look at how fast this happened. Absolutely mind-blowing.

Starting point is 00:11:24 The reason why this happened so fast is because of expressivity. When you have a turn-complete platform, you can generate infinite reasons to use the blockchain, and that turns into fees. Ultimately, at the end of the day, it turns into demand for block space. If you have infinite use cases, it turns into infinite demand. I just, I mean, there's something we said very early, but you can now see it very clearly, is if you're betting on ETH, you're betting in an economy. And if you're betting on Bitcoin, you're betting just on an asset, which is very interesting to see this dichotomy. Also, David, this was cool.

Starting point is 00:11:58 You and I did a State of the Nation episode where we went through a dollar cost average for ether, the asset. And that was very well received. Can you just give the TLDR of that episode? And then I want to talk about this after you do. Yeah. So a discounted cash flow model is a tried and true model that is just used by all of finance like ever. That's what finance uses to value the capital assets of the world based on a discounted

Starting point is 00:12:29 cash flow model. How much money is this thing going to spit out into my hands over time? And we can come up with a model for valuating that. Ether is the only asset, only L1 crypto asset that has the metrics that are needed in order to actually create inputs into a DCF model. And so with that, we brought on Ryan Alice, who has done a very robust DCF model for Ether. And we can actually using comparable metrics, comparable PE ratios to other, like, depending on how fast you think Ethereum as a network is growing. Like, do you think it's growing faster than Amazon? Do you think it's growing faster than Facebook?

Starting point is 00:13:10 Do you think it's growing faster than Netflix? Making some assumptions as to how fast the Ethereum network grows, we can actually come out with some sort of justifiable model for the price of ether. And let me tell you, it's bullish. If you're surprised, it's a bullish output of a model. And the cool thing about that is that is just one aspect of ether that makes it so cool, is the cash flow analysis of ether. There's also reservation.

Starting point is 00:13:36 manned by locking it up in defy and that's not even included in that model. So definitely go just watch that state of the nation. It's on the video. It's on the video on the YouTube. It's also on your podcast feed. And if you just have any people from TradFi world that wear ties, send them that model. Send them this model. This is the language that they speak. This is how ether is going to be understood by TradFi and how it's going to be justifiable to invest hundreds of millions of dollars into this asset coming from people that wear ties. send the bottle to your tie wearing friends is what David's saying and what's cool here is we say all this to also tee up this there are other takes on a discounted cash flow type model a DCF and so

Starting point is 00:14:18 after that episode one bankless listener messaged me and said hey I've got some an even more DCF more precise DCF estimation here and passed me his spreadsheet and it's an even more more bullish prediction. Oh, I love it. I like this one now. And it's not just more bullish. This listener says it's also more accurate because it looks a bit more at the monetary side of things and the demand side.

Starting point is 00:14:46 It's a bit more precise with respect to issuance in the future. I think that Ryan Alice's DCF was sort of a floor model based on some more static assumptions, and this gets a bit more dynamic. With Ryan Alice, the model spit out an eth price of 10 to 12k at about, like 3.5 to $4 trillion in market cap. This one's spitting out in the price of 73K. All right? But the thing is like that's such a high, crazy high number that I feel like if you sent that to your tie wearing friends, it would just break their brains. Like is that even allowed? Then check the numbers. Tell them to check the numbers. Like put your own variables in the

Starting point is 00:15:25 spreadsheet. Anyway, optionality here, guys, if you like these types of analyses, will include this link to this DCF model in the show notes. You know, the listener also mentioned to me because we asked Ryan, hey, do you model other layer ones this way? I know you're bullish on layer ones, Ryan Alice. Do you model other layer ones this way? And he's like, I've never done that, actually. Well, this listener did.

Starting point is 00:15:48 He modeled Cardano based on its DCF. And the fair price of Cardano was about one to two cents, which is interesting because it's trading above a dollar right now. I'm I'm look not knocking anything I'm just it's just a model plug your own numbers in and you can assess the fundamentals for yourself and choose what you invest in right it's all we're saying love you cardano love you Charles uh visa visa two billion in transactions on their crypto linked cards that's a lot that happened really fast it's a lot yeah do you have one yet do you know no no I don't waiting for the Gemini one yeah waiting for the Gemini one i have a blockfi one uh that i use a little bit also coinbase has like a debit card that i have it's like blue looks kind of cool i don't know i don't know how many of these i'm going to collect you know guys try them all right collect it's

Starting point is 00:16:46 pretty good visa yeah it's really good uh we did that episode of anchorage where we talk about the bullcase for for all of this i think this number will go a lot higher um david some stable coin numbers reminding us that stable coins are big yet small. But what is this number we're looking at here? Yeah, we're looking at total value settled with stable coins per year. So every single year, the graph resets back to zero. And you can just see how much more money is being settled by stable coins. So like at the end of 2019, we settled like, I don't know, $0.2 trillion.

Starting point is 00:17:17 By the end of 2020, we settled a whole entire $1 trillion. By the end of 2021, we settled $6 trillion. So we went from 0.2 trillion to 6 trillion inside of three years. And then you can just look at how steep the curve is at the start of 2022 and compare it to how steep it is at the start of 2021. And it looks like we're just going to have another record-breaking year in terms of stable coin value settled. So cool. It's just another like 5x per year. Where are all these fees coming on Ethereum?

Starting point is 00:17:47 I don't know. 5x per year, right? So next year maybe 30 trillion. Wow. You could be larger. Another chart reminds us that, while it's a lot settled, there's only $140 billion in stable coin supply outstanding. So still lots of room to grow, still very small. If you compare that to like money markets, which some people compare as sort of like quasi-stable coins, like some people say shadow bank stable coins, money markets are like $5.5 trillion.

Starting point is 00:18:18 and, you know, the Euro dollar is in the, you know, large trillion. I don't know if it's like three to five trillion or more. So just a ton of room to grow on stable coins. And I have kind of a thesis. I don't know if you agree with this, David, but I feel like when we've seen stable coins grow, they often grow faster during kind of bear or crab markets, where people are like, I want to hold some USDC,

Starting point is 00:18:46 and I want to harvest some yield on my USDA rather than having all of my cash deployed into like crypto-native assets. So like, you know, during bearish markets, people tend to collect more stable coins. They, you know, might sell their assets and wait for the bare markets and then, you know, have stable coins.

Starting point is 00:19:06 But you got your, David's skeptical face on. What do you think about that? Yeah, that's not what I've seen. I've seen that stable coin supply grow up, grow really high during times of bullishness because that's when yields are super, super high, and also people are being DGens and borrowing against their crypto assets more and more, and so there's twofold demand there. There's more demand to borrow and also because of higher yield.

Starting point is 00:19:32 And I think that's what we see in the charts during times of number go up. Stablecoin supply also goes up. Jim Bianco actually thinks that it's actually stablecoin supply that's really a leading indicator towards bull markets, as in like more stable- For defy anyway. For defy, yeah. More stable-coin supply makes bull markets easier to happen because the cost to borrow are low. And we see that out of the Federal Reserve, right?

Starting point is 00:19:53 Like what are the problems that we're having today is that the markets have been so bullish because the cost to borrow has been so low that people have been taking out infinity leverage and that's been pumping up the value of assets. So I've taken the other side of that. I have one more thought about this chart, but I'll let you respond. No, I think that there's some given take. So I don't feel strongly on that. I think it just tends to go up regardless. This is Ryan telling me I'm right. Yes. You're right, David. I know you wanted to hear that

Starting point is 00:20:23 today. You're right, David. What's your other take on the start though? Look at all the different colors. Look at them. It's so balanced. Like, look at how. Yeah, it's a very pretty, pretty rainbow. Nothing is really too dominant, but also look at the, as soon as what around like, I don't know, May of 2021 happened, tether growth really tapered off in favor of USDA growth and other stable coin growth. So this is starting around May 2021 was when USC really started to take the lead in rate of growth. And now we just a couple weeks ago, we saw USC finally pass a tether supply. And so regulated stable coins really taking the lead versus more black box unregulated stable coins. I would like to see more defy native staple coins take the lead.

Starting point is 00:21:08 And we still haven't seen that yet. But we'll see. We've got some regulatory information coming on stable coins as we get to the new section. But guys, so much more to cover. We're going to hit releases. We're going to talk about the big news items that you have to know in crypto. But before we do, we want to thank the sponsors that made this episode possible. Slingshot is a decentralized trading platform that combines the performance and ease of a centralized exchange with the openness and transparency of DFI.

Starting point is 00:21:34 Slingshaw aggregates liquidity from all of DFI in order to find the best price on thousands of crypto assets. Every token on Slingshot comes with a price chart and trade logs to give you insights into the market's activity in real time. SlingShot is available on Polygon, arbitram, and optimism, saving you from the high gas feeds and low transaction speeds of the Ethereum L1. There are no fees to trade on SlingShaw and any positive slippage is given to the users. Trading on SlingShort is a social experience. You can even set your chat avatar to your favorite NFT or soon a Slingshot 2099 NFT avatar. Once you bridge your assets to Polygon, Arbitrum, or optimism, go to app.slinghot.finance to trade and use the chatbox to share your trades with

Starting point is 00:22:12 others and find other tokens to ape into. The Brave browser is the user first browser for the Web3 internet with over 50 million monthly active users. Control your digital footprint with built-in privacy and ad blocking. Inside the Brave browser, you'll find the Brave wallet, the first secure crypto wallet built natively inside of a Web3 crypto browser. Web3 is freedom from big tech and Wall Street, more control and better privacy, but there's a weak point in Web3, your wallet. The Brave wallet is different. Brave wallet is built natively inside the Brave browser, no extension required, which gives the Brave wallet an extra level of security versus other wallets. With the Brave wallet, you can buy, store, send, and swap your crypto assets, and

Starting point is 00:22:51 can even manage your NFTs and connect to other wallets and defy apps, all from the security of the best privacy browser on the market. Whether you're new to crypto or a season pro, it's time to switch to the Brave wallet. Download Brave at brave.com slash banklist and click the wallet icon to get started. Arbitrum is an Ethereum scaling solution that's going to completely change how we use Defi and NFTs. Over 250 projects have already deployed on Arbitrum, and Arbitrum's DeFi and NFT ecosystems are growing rapidly. Arbitrum increases Ethereum speed by orders of magnitude for a fraction of the cost of the average gas fee. When interacting with Arbitrum, you can get the performance of a centralized exchange while tapping into Ethereum's level of decentralization and

Starting point is 00:23:29 security. If you're a developer who wants low gas fees and instant transactions for your users, Visit developer.offchainlabs.com to get started building your application on Arbitrum. If you're a user, keep an eye out for your favorite defy apps or NFT projects building on Arbitrum. Many of your favorite apps are already live, with many more coming over soon. You can find these apps at portal.arbitrum.1. And you can bridge your assets over to Arbitrum. com using bridge.orgatrum.com. In order to experience Defi and NFTs, the way it was always meant to be.

Starting point is 00:23:58 Fast, cheap, and friction-free. All right, guys, we are back with the releases of the week, David. Defi's favorite lending and borrowing protocol is getting ready to launch its V3. It's just been deployed to TestNet. This is Ave V3. What's going on here? AVEV3 deployed to seven test nets. Seven? Yeah, that's why, yeah, look at it.

Starting point is 00:24:18 They're deploying everywhere. Yeah, deploying everywhere. And I think that's just lending themselves to how they're going to deploy. I think Avi it's about to become a cross-chain, multi-chain, ecosystem play. And so, like, I mean, look at that graphic. There's avalanche, optimism, arbitrum, polygon, phantom, I think, is that one? Harmony. So Ave going everywhere, turning into a protocol of protocols. And so pretty cool. They're just going to have just probably a lot more cross-chain features, capital efficiency

Starting point is 00:24:45 features. Because the fees are lower, you just get more optionality with what you can do in the protocol. So just like rejiggering and rebalancing your portfolio without incurring like a billion dollar gas fees. So cool. I'm really excited for ABE3. Yeah, same here. Great protocol. David, let's talk about some of the exploits. Okay, I think that's the main message of the week or the main news item is this massive exploit. But this is cool from Polly Market. There's a way to actually trade and hedge against this risk. Here's a question on Polly Market.

Starting point is 00:25:18 Will this D5 protocol suffer an exploit by March, the end of March 31st, 2022? And you've got prediction markets for all of these protocols, uniswap, Maker Dow, compound. So people think there's a 5% chance that Uniswap could suffer an exploit by March 31st. Seems really high. You could bet against that. You know, I'd love to see a market like this for bridges, especially on the back of this week. Right, right, right, right. Five, yeah, the problem is, like, I would love to put money into this market and just collect that 5%, you know, winnings because Uniswap's not going to get exploited by March 31st, 2022.

Starting point is 00:25:55 But also, the reason why I'm not going to do that is because, even, you know, you know, I think it's going to go up more than 5% in that same time frame. Like, I mean, I always think that. But like, what's the point of holding USC to get 5% by March for the end of March when I'd rather just hold ETH? Well, it's, you know, it's free money if you're right. I suppose. But yeah, but I kind of feel like that like ETH and other assets like it are kind of

Starting point is 00:26:17 a black hole for all of my available cash too. Right. Let's talk about this. David, this is a new protocol release. Kuiper. Like Kiper like the belt. The Kiper belt. It's kind of like set, maybe kind of like index co-op, but also a bit different.

Starting point is 00:26:33 What's your take on this? It's an index protocol of some sort, right? Yeah, it's a governance minimized, like trustless, more trustless index protocol being established by some of the guys over at DFI Pulse and a few other just independent developers. They're just trying to go the very, very dense protocol sync route by just being permissionless and uncensurable from day one. So going to be keeping tabs on that. Yeah, me too.

Starting point is 00:26:59 I think it's interesting. Still looking at how different it is versus index and set and some of those things. But it feels like it's a bit closer to the metal, deeper in the protocol sink, as we might say in bankless terminology. Let's switch to raises of the week. We've got some unicorns we've got to talk about. Here's one. Doon Analytics is now a unicorn. One billion dollar valuation above one billion.

Starting point is 00:27:22 And they raised an amount. What do they raise here? $69,420,000. Nice. I just love how, like, Dune Analytics is a very serious, very in-depth analytics platform. And then they just go the meme route of raising $69,420,000. And I just think it's great. We're just making a farce about like money, and I'm kind of here for it.

Starting point is 00:27:45 Yeah. You know, crypto sometimes is just hilariously irreverent. And I just love that. That's part of the fun for me. Salana, their wallet. Anyway, Phantom is raising $109 million. This is another unicorn. So $1.2 billion valuation.

Starting point is 00:28:03 Pretty cool wallet. And I guess a MetaMask competitor-ish, except for one thing, it's only on Solana at this point in time. What do you make of this? Yes. Metamask, same niche as Metamask, but not a competitor because they're just are in completely different ecosystems. I've heard fantastic things about Phantom wallet and people wishing that Phantom Wallet were in

Starting point is 00:28:22 the Ethereum ecosystem. At the rate that Metamask is printing money via their native swap feature, I would imagine that Phantom has incentives to try and penetrate the Ethereum market, but they might be Salonamaxies. Yeah, well, I'm not sure. And they've talked about deploying to you, Ethereum. I've heard rumor that maybe second half of next year, but they're kind of busy on Phantom at the same time,

Starting point is 00:28:46 so that could keep getting pushed back. Meanwhile, Metamask is making some moves. What do they do this week? They acquired My Crypto. So My Crypto is this very old reputable team that was working on wallet infrastructure, led by Taylor Monaghan, who's a veteran of the ICO era. Imagine Ryan being the founder's CEO of an Ethereum wallet during the ICO era where like people... She was a veteran of keeping people safe during the ICO era. We should say she was one of the good guys, right?

Starting point is 00:29:16 Yes, yes. But also just like imagine like imagine being responsible for like 80% of the. inbound support request for ICOs because no one knows where else to get customer support. So they go to the wallets. And that was Taylor Monaghan. Her team was like basically Ethereum support. Yeah, it really was. Like in the same way that people complain about Metamask and how like, oh, like, where did my money go? Help me. Help me Metamask team. And like, the Metamask team is like, yo, we just are the wallet infrastructure. Like we don't know where you've sent your money, dude. Anyways, my crypto is teaming up with

Starting point is 00:29:50 MetaMask, getting acquired by MetaMask to help them build out the MetaMask ecosystem. And we are having both Dan Finley and Taylor Monaghan on the live stream on Tuesday to talk about this acquisition and where MetaMask is going from here. It just makes a ton of sense. So congratulations to both teams. Looking forward to chatting. I do want to hear where MetaMask is going next. That'll be interesting conversation. So make sure to tune in. David, this is weird this week. Do you know FTCS is now more valuable than Coinbase? How? How is that possible? They're not even publicly listed. Where did they get all the valuation from?

Starting point is 00:30:23 It's, you know, private valuation. So it's on the private market. And so if you add up the private valuation most recently of FTX and then also you add FTX US, which is a separate subsidiary, which I don't know. Didn't we talk about that last week? It's like worth $8 billion on its own. And you take the cumulative amount. It's worth more than the public price of Coinbase on the market, which surprised me. Right. Does that surprise you? Yeah, it definitely does because like, you know, FTCX is a gargantuan in this space and they're doing a lot more and they move a lot faster than Coinbase, but they also just don't have the same branding. Like when people, when you ask people like, yo, like where should I go get my crypto? Should I just get a coin base account? Like, that's always what they ask first. Like, oh, like, do I just sign up with Coinbase? And like, yeah, sure. Great. It's a great spot. But somebody said, so a couple things when I tweeted this out, somebody said, one is that, well, there's a difference between private and public markets. and when you go public, you're going to be marked down. Okay, so maybe there's a discount when you go public,

Starting point is 00:31:22 which would be interesting, I don't know. And then the second thing was, okay, the difference with FTX is derivatives, huge focus on derivatives, which is a massive market, and also international focus where they're stronger. So you might tell your retail friend, like, hey, start with Coinbase, but if it's a, you know, fund of some sort, and they're getting into, like, more exotic derivative-type products, pushing a lot of capital,

Starting point is 00:31:46 FTCX might be the go-to spot. I don't know what this all implies for Coinbase, but it's, you know, the battle of crypto banks is a real thing, and it's going to keep ongoing. If you told me back in like 2018, 2019 that there would be an exchange that would be rivaling Coinbase and that hadn't existed yet because FTX wasn't around back then, I would be like, you're absolutely crazy. There's no way, like, the exchange marketplace is like way too competitive. There's no way a new exchange can come back to dethrone Coinbase. Turns out that's what happened. Well, if it happened once, can it happen again? Making any exchange bets, David, these days?

Starting point is 00:32:20 No, I'm not. Defi exchanges. Yeah, there you go. Also, big congrats to our friends at Castle Island. They just raised hundreds of millions for a new fund. This is Nick Carter, who's been on the podcast, I don't know, five, six times. Yeah. Something like this.

Starting point is 00:32:35 What does Castle Island invest in? Do you keep up with their pod? Yeah, yeah, I do. They invest in, they're pretty heavy in Bitcoin infrastructure investment, but they also do defy investments and are really big in the stable coin world. And so they kind of span themselves out pretty well, I'd say, with emphasis in the Bitcoin ecosystem. And they are definitely just true crypto believers through and through. They understand how this industry works.

Starting point is 00:33:02 I get so much from my knowledge from Nick Carter. I wish that likeness of him was actually better. You don't think this looks like Nick? I think Nick looks way better than that in real life. It's not terrible, though, but yeah. It's not terrible, yeah. I could tell it's Nick, I guess. It's just like wax museum, Nick.

Starting point is 00:33:19 Yeah, wax. That's exactly right. Anyways, congratulations to Castle Island. Looking forward to hearing where you guys put that money on your pot. Fun fact, their weekly roundup was the inspiration for the bankless weekly roll-up, and that's how that happened. It means we stole that from Munich. Yeah, we totally sold that.

Starting point is 00:33:40 Jobs. Get a job in crypto. Look at all these companies raising. They're all hiring. We put this strategically in our roll-up agenda where it's like, look at all the money these protocols and companies have. And then we're like jobs. Jobs.

Starting point is 00:33:52 Go get it. Go get it. New jobs on the job board this week. A senior product engineer at moment ranks. Go check that out. Also, a slew of D-Y-D-X position. Some technical, some not. You want to be a community manager at D-Y-D-X?

Starting point is 00:34:07 Do it. Governance Growth Leave as well. Business Operations and Finance Associate. marketing associate. See, all of these don't require technical skills. Fantastic. All of these jobs are open for you now. Accountant, smart defy, a Web3 engineer solidity and React at Goldfinch, a senior go rust engineer as syndica, a smart contract tech lead at StarX. That's just the start. I could keep David dancing for this entire episode if I read all of these off, but I'll leave you to do that at the bankless job boards. It's bankless.comallet.x, sign up.

Starting point is 00:34:39 If you want to learn more about Goldfinch, which is a company that Ryan just listed off as hiring, we did a Meet the Nation with them. That video is on the YouTube. If you want to learn all about Goldfinch, they're doing under-collateralized lending via D-Fi, via a Dow type organization. And they have funded some really, really cool things all across the world. There you go. Very cool. Cool companies.

Starting point is 00:35:02 David, news time. News. Here it is. We've got to start here. Oh, yeah, right. Okay. The bridge hack. Bridge hack.

Starting point is 00:35:08 $300 million. Is this $300 million? I heard $250 to $350. Somewhere between $250 and $300. You know, depending on the price. A lot, okay? I said $200 million, but it was more. And this, maybe we'll start with kind of a...

Starting point is 00:35:21 First off, that's big. That's very, very big. That's a big number. That's the second biggest defy exploit of all time. Yes, it is. Yes. Millions, when you get in the hundreds of millions, that's very big territory.

Starting point is 00:35:32 It's a nice bank heist. Yes. Bank heist keep getting bigger. I'll start here. with it's it's kind of a prediction that I feel like bankless has has made and uh not happy about this prediction but like it felt like an inevitability in 2022 this is a tweet that uh I put out earlier in january sad prediction there will be some monster bridge hacks in 2022 that will make people question their multi layer one chain thesis I feel like that's a little bit what happened right

Starting point is 00:36:04 multi chain multi bridge really fast it did okay and And then I probably doubled down on that prediction, which is, again, sad. Okay, sadly, this exploit is just the start. And I feel like that's the case, too. Although, hopefully everyone with Bridges is double-checking their code right now to make sure this thing doesn't happen. But we'll start there. Tell us actually what happened.

Starting point is 00:36:27 This thing is called wormhole on Solana, I believe. Give us the scoop here, David. Yeah, so everyone's attention got raised when Sam Z's son, who's a famous white hat hacker who can like almost like fix any exploit before everyone knows about it, tweet it out that wormhole is not having a good time. And it turns out by the time Sam paid attention to it, it had already happened. So the wormhole network, which is a Ethereum to Salana Bridge that lets you wrap up your ether on Ethereum, put that ether into a smart contract on Ethereum, and then that smart contract pings another smart contract on Salana.

Starting point is 00:37:06 to tell the salana chain that some ether just got deposited into it and they can mint new ether fake ether wrapped ether salana ether on the salana chain and the reason why that will have values because you can go back and forth and that's how bridges work what happened allegedly from what we are understanding from all the people that know how to code and uncover these things is that the smart contract on the salana side had an exploit that allowed the exploiter to mint a bunch of of Solana ether, a bunch of IOUs for ether on the Ethereum chain. And so they just minted new ones, kind of in the same way that Federal Reserve would prints new money.

Starting point is 00:37:46 If you can get a hold of the money printer, you can print a bunch of new monies, but that doesn't mean that there's actually more ether backing it on the Ethereum chain. So the exploiter minted a bunch of Solana ether and then sent that Salonethe ether back through the bridge so that they could take the ether on the Ethereum side out of the wormhole smart contract. And that came out to a tune of 120. thousand wrapped ether. And then that 120,000 wrapped ether is now in the Exploders wallet. And I don't know if they're actually watching it through tornado cash yet. But I would imagine that's just kind of the only

Starting point is 00:38:18 way that they can get that value cleaned. This happened as we're recording it. This happened, I don't know, 12 hours before we're recording this maybe maybe a bit more. So this story, this story and what's happening is kind of still developing as we're doing it. But yeah, exactly what you said. Right. So you've got these fake IOUs on Solana. And then the hacker just just caches these IOUs for real ETH on the Ethereum side of things. But this causes some downstream effects, doesn't it? What are the downstream effects, a cascade of effects when something like this happens? Right.

Starting point is 00:38:48 So ether is fantastic collateral. And so it's used as collateral and liquidity inside of Solana Defi. And so all of a sudden, the ether collateral in these defy applications, like providing liquidity to other tokens, becomes unbacked. And so it kind of goes from like an IOU to ether to an IOU of nothing. And so all of a sudden, like the value in these things just evaporates, right? Because it's like if somebody, if somebody like stole all the gold out of a bank that had issued IOUs against that gold. Well, if there's no gold there, like you can't issue any IOUs for it or the IOUs that you do have are worthless.

Starting point is 00:39:25 And so it has cascading impacts on defy. Liquidations happen because if a value of the collateral goes to, zero, then, like, people need to get liquidated. But also, how can you liquidate anything if there's no actual value there? Like, the IOUs aren't worth anything. And so it really just, it just messes up everything. It's a systemic risk to have all of this unbacked collateral in Salonadena Defi. And so, like, this is exactly what Georgios Constantinopolis from Paradigm says, domino effect of now under-collateralized loans against Wormhole Eath is severely undermentioned. That was yesterday. This has been fixed, actually.

Starting point is 00:40:04 as of like literally one or two hours before recording, somebody, we think Jump Capital has footed the bill. Footed, footed, footed, footed the bill. I have a hundred foot the, they coughed up in all the ether. And so now the Worm Hall Bridge is actually whole again because we think Jump Capital coughed up. Is it Jump Capital? I think so.

Starting point is 00:40:28 That's what everyone's working. That's unconfirmed, but that's kind of the only people that we can really consider to have this much money. $250 million, just like, okay, here, like, we'll make wormhole whole again, absolutely crazy. Yeah, so basically we had all of these IOUs that were minted. This causes a cascade of problems everywhere this wrapped ether on Salana in the Salana DeFi ecosystem is used, right? Because now all of these assets that you thought were backed by ETH are no longer backed, right?

Starting point is 00:40:59 So that's a lot of problem. All of the while, wormhole is saying, hey, look, guys, we got this. They were tweeting out, we're finding a way to restore funds. In the background, they were negotiating with the hacker, I believe. And they sent messages to the hacker saying, hey, if you just return the funds, we'll give you $10 million. You'll be a white hat, right? You'll be helping us out for this.

Starting point is 00:41:22 $10 million bug bounty, yeah. Yeah. And who knows? There's probably lots of other conversations that we're not privy to, right? And so, but now what's just developed, it seems like, and what you're saying, David, is wormhole is back up. They somehow procured the funds. Amazing.

Starting point is 00:41:39 And you think it was, this was from Jump Capital. That funded this? Yeah, so Jeff Garzik asked that question, where did the funds to refill the bridge come from? And so if you click on that tweet and then scroll down, you'll see a lot of speculation that it was Jump Capital. Kyle Smalley says Jump is covering because they believe in the future of crypto and what they're building. So Jump Capital, I think maybe had some like maybe were there investors in Wormhole or or something like that. Jump Capital is a trading desk, I think,

Starting point is 00:42:08 and they just print money from doing trading stuff. So they're very well capitalized, obviously. But I mean, I could pay for this if they wanted to. At the end of the day, $250 million is nothing. I'm sorry. Even George Soros will notice $250 million missing from his treasury, I think. Yeah, that's incredible. You know, I guess, I guess so, you know,

Starting point is 00:42:30 what do we learn from this episode here? I there's maybe some lessons that are starting to emerge. I feel like the first thing we're learning is that bridges are dangerous. Bridges are dangerous. And they're dangerous. They're dangerous in two ways. They're dangerous in one, the smart contract code for a bridge can actually be hacked. And that's what happened here.

Starting point is 00:42:52 There's a smart contract code hack. It happened on the Salon side. Which Ryan is differentiating from the bridge. It's like, so yeah, you have the bridge that spans two endpoints, two structures. And the bridge can break and be broken in the middle, or the two structures on the end can also break. And those are the smart contracts on either side of the bridge. So the bridge was fine because even the exploiter was able to transfer assets across the bridge, it was the entryways of the bridge that got exploited here.

Starting point is 00:43:22 And these are each individually weak points. And we've seen hacks like this, not for a bridge, but like this in Defi, many different times, right? the famous parody multi-sig hack is, you know, smart contract code that is basically hacked. So that's the first category. The other category that we haven't yet seen, but Vitalik has been talking about for a while, and particularly for the last month,

Starting point is 00:43:43 is economic attacks. So this is like you're sort of dependent on the multi-sig signers or you're dependent on the security of, you know, the salonah chain or any side chain to actually secure this bridge. And that's another iceberg, I think, under the water a little bit that people aren't seeing. You know, for my perspective, it's good that people are paying more attention to bridge security.

Starting point is 00:44:08 So there is a, I guess, a sunny side at the other side of this. I think it's important to note that both layer ones like this, bridge layer ones like this and layer two bridges can have the smart contract vulnerability, though they probably don't. Layer twos don't have the same economic attack surface area. that these layer one bridges have. So I'm happy to see that bridge security is coming into focus. It seems like it's good that there's a happy ending

Starting point is 00:44:38 where maybe a big capital provider like jump is reimbursing all funds. I do think that, look, this bridge was talked about as if it was safe and secure. And I think a lot of people thought it was safe and secure. And I think there is some troubling, I guess, market pressure. for everyone to say their bridge is secure when it's really not. And that is troubling.

Starting point is 00:45:06 And I hope we see the lessons of security from this. And we take those lessons and we ply them. We look at these bridges with a lot more scrutiny moving forward. What do you think the takeaways are, David? The biggest thing I'm surprised about is I had no idea how much ether was on Solana via this wormhole. Like a quarter billion dollars is a lot. over 100,000 units of ether is a lot. Reminder, there's 118 million ether in existence.

Starting point is 00:45:36 A lot of that's locked. A lot of that is lost. So maybe like, you know, 10 to 15 million of that is actually lost somehow somewhere. But like 100,000 ether is a lot. Like that is not trivial. And so that's what I'm surprised about. I'm surprised that a bridge, in such a nascent part of bridging's like story with crypto had that much ether wrapped up in his contracts.

Starting point is 00:46:02 And it also like whenever Solana goes down, like we have Kyle Samani and Anatoly come out and say like a main net beta. Solana is in main net beta. Like, you know, we got DDoS. It's going down. I'm sorry, what kind of main net beta has a quarter billion dollars of value in it? Like, you need to pick, we need to pick a lane, guys. Is this a beta or is this a live ecosystem?

Starting point is 00:46:24 Because if people are getting liquidated, it's not really a beta. And there are very, very, very, the whole Solana ecosystem is very, very fortunate that Jump has the means and the reason and the ability to actually cover the losses here. Part of me wonder if we get the wrong lesson out of this as well. Like I'm glad that users are going to be made whole for this. I think that's a great thing and I'm, you know, I'm happy individually. But I feel like it's a dangerous precedent for bridge users to expect that any hack or economic attack is going to get bailed out in the future. Just because this ended with a happy ending doesn't mean the next one will. There's not necessarily a jump capital who's going to like

Starting point is 00:47:07 step in and reimburse everyone. Especially when these bridges and layer two's and everything decentralized. Like there's not there's supposed to be no one there. Exactly. So there's there's some brittleness in this structure that we're building in particular in the bridging structure. I think we talked a lot about this with Rune Christensen on the episode that we did with him. So go check that out. That's somewhere in the archives as well. And, yeah, Bridges are going to be a main topic of discussion. This won't be the last hack that we see of 2022, sadly.

Starting point is 00:47:40 And, yeah, we're going to continue talking about it. So what is this exploiter going to do with all the money? What does one do with 250 million dollars? What do you do? Well, okay, so they can't touch USDC. They can't touch USDT. It'll get frozen. Because it'll get frozen.

Starting point is 00:48:00 So, like, they can touch dye if they want. You're going straight to ETH. Yeah. And then you're going to Tornado Cash. Yeah, right. But, like, you can't, you can't just wash 100,000 units of ether through tornado cash. Like, you can maybe do, like, a couple hundred Eth a week.

Starting point is 00:48:16 But, like, if you have to pull it out into different wallets, you can't, because, but then also, like, sure, you can, you can, you can. You start to liquidate, like, the trickle of ETH that you push through tornado cash. So, yeah, you hack, you exploit something for a quarter billion dollars, and then maybe over the course of one year, you can discreetly withdraw $1 million across, like, spreading it out and off-use skating and- Just wait a long time. Yeah, exactly, just wait a long time. But, like, what the hell do you do with the remaining $249 million?

Starting point is 00:48:46 Do you just keep it neat? Do you take out some loans? Use it in D-Fi? I don't know. That's an option. To do what? You can't do it. Where is it? It's stuck there.

Starting point is 00:48:54 Yeah, I guess it is. Although, like, I think a lot more will be built. Like, you could just expect that there'll be more privacy preserving solutions in the future, more off-ramps, this sort of thing. Sit on your hands and so you can get your money here. If they're inside the United States, like, where are they going to, how are they going to tell the IRS that where they got their a quarter billion dollars from? Oh, I don't, it's very difficult. It's going to be very difficult for them to exit. That's why if I'm the hacker, I'm pretty, like, I'd be pretty tempted to be like, oh, okay, yeah. No, this, just a prank, guys. Look, I'm a white hat.

Starting point is 00:49:31 It's just a prank. I'm a white hat. Because they, because they offered the exploiter $10 million. Yeah, I'll take the $10 million free and clear. Right. And, but I'll, although I do wonder, is that really free and clear? Yeah. If you go, you hack something, can you just be like, yeah.

Starting point is 00:49:46 Yeah, can you, like, remove yourself from all, like, courts and liabilities? Yeah, yeah, but just by just take. the $10 million bribe to give it all back. Yeah, or maybe you're supposed to play coy and pretend that you were just a white hat all along. Maybe that's the way to do it. And maybe that makes it free and clear. I don't know.

Starting point is 00:50:03 Look, I'm not a hacker. Do you want to interview a hacker on bankless? Yo, if a hacker wants to come on bankless, let me know. I will throw you a Zoom link. We're just curious. We're just curious. Any hackers out there. What are you going to do with the money?

Starting point is 00:50:17 That's all I want to know. That's all I want to know what you're going to do with the money. DM me. Yeah, but also I don't want to draw attention to us with hackers, David. Right, sure, yeah, right. DM Anthony Sasano. It'll be our go-between. David, let's talk about this.

Starting point is 00:50:35 There's trouble in Wonderland still. There was trouble last week. There's more trouble. Update us on the story that was developing. So this was, as listeners will remember, this was, I have felon in charge for the Treasury. Of Wonderland, yeah. Yeah, Wonderland. So what's happening now, David?

Starting point is 00:50:51 Yeah, so the community has been in turmoil, I guess, trying to figure out how to continue, what to do with the Wonderland project. Now that one of the core developers, core founders, one of the multi-sixthiners was discovered to be the ex-Quadringa guy who's a convicted felon for identity fraud and stuff like that. And then also discovered that Danny Sesta just knew about that and didn't tell anyone. The community has been reeling about like, well, okay, what how do we, what are the next steps? And that's where we left the story last week. There was like a governance vote of, you know, should we boot this treasury? Should we continue the project? It was that.

Starting point is 00:51:29 That's the to be continued from last week. Right. And what's also not helpful is all of the very, very depreciating asset prices, time and spell and mim, there's just a, and all the curve. A bunch of money has moved around because of, as a result of this turmoil, so the state of things is unclear. Asset prices are down. And so the community is, you know, very stressed.

Starting point is 00:51:51 And so Danny, the leader of the whole Wonderland project says, tweet it out in a tweet thread that got over 2,000 likes, so a lot. Wonderland Experiment is coming to an end. It's clear from the vote that the community is divided. The core and heart of Wonderland is still the community. If we cannot find agreement on whether or not to continue, it means that we failed. The duty of the team is to enact the will of the token holders, as the vote is so close to 50-50, there is only one path forward.

Starting point is 00:52:19 The vote was to keep Zero Wexifu as a treasury member or to oust him. And so Danny says... Why does anyone want to keep him? I have no clue. I hope that's the right vote. As the vote is so close to 50-50, there's only one path forward. It is to reimburse, unwind those who do not feel a part of Wonderland so they can find a new home who feels attached and in line with a Frog Nation vision.

Starting point is 00:52:46 And so that is what the community of Wonderland is currently. reeling with. Kind of, oh, also at the same time, Zero Xifu, the ex Quadrinka guy, is pushing all of his ether

Starting point is 00:52:59 through tornado cache. And so has put... Actively exit scamming on chain. Just like watching, like disappearing through a puff of tornado cash. And so like that, so he, his address is becoming outwashed.

Starting point is 00:53:13 So there's that. And then Danny inside of the, inside of the discord, he said he said this was on january 31st he goes this dow is going going to be managed directly by me the circus needs to stop now and we need to gather more serious proposals and structure to move forward so i mean danny just really pushing himself as i mean at some point like in times of turmoil like some leaders need to step up and like who else is it going to be other than danny he has the most at stake here um but like dow is saying like danny's kind of saying this dow is going to be managed by me it's like

Starting point is 00:53:42 well let's take the d out of that dow at the moment um yeah so some some mess some mess going on Yeah, how do you think this resolves? I mean, some people are saying, like, oh, governance is so messy. It's a mistake to even do this. You know, I don't know. How does this end in your mind? I have no clue, but I'm definitely reminded of that Thomas Jefferson quote or George Washington quote, which that said, like, the biggest argument against democracy is a conversation with the average voter.

Starting point is 00:54:12 Is this the biggest argument against the Dow? It's actually Dow votes. Yeah. Yes, it is. Yeah, I get it. look the project will you know hopefully come to a good resolution uh we'll see just a quick update danny did not get back to us after saying he would come on the bankless podcast we had bm's open did not get back to us here's a tweet someone saying being a part of wonderland is like living with the

Starting point is 00:54:34 schizophrenic person um no comment following that from me let's move on to other things all right cool things gay things happy things immutable and game stop the team up gm eym investors have been waiting for on layer two, what is happening with Immutable and GameStop, David. Yeah, so there was a ton of speculation that GameStop was going to be using loopering to issue NFTs and bolster their gaming. Really? But I don't know. I think this is a pretty strong commitment to the immutable ecosystem.

Starting point is 00:55:07 So GameStop has publicly announced that they're going to be issuing NFTs using the GameStop, like all the games that GameStop own and all their platforms and all their IP are going to be issued as NFTs on the Immutable X layer two, the ZK rollup layer two, along with, in partnership with the Immutable team, establishing a $100 million fund to help grow the gaming ecosystem on Immutable X. So huge partnership. This is making a ton of big news. We are, you guys, by the time you hear this, we'll have already done this, but we are, Ryan and I are about to go on a live stream with Robbie, the co-founder of Immutable, to talk about all of this. Oh my God, people are It's hours away and people are already waiting for this.

Starting point is 00:55:50 That is crazy. It's just because it's the Wall Street Betts community. It is. It is. I'm very excited about this. Like a different community. Yeah. So if you guys want to learn more about everything that GameStop is doing with Immutable,

Starting point is 00:56:00 go to YouTube, check out that video. And then we'll probably put it on the RSS feed this weekend or something. Meme stocks, meme crypto, producing NFTs. I don't know. Sounds kind of fun. I'm in. I'm going to ask Robbie about that. David, what's happening here?

Starting point is 00:56:15 More L2-2-Soo stuff. Okay. Yeah. We talked about this last week where Binance ran out of ETH to deposit onto Arbitrum layer two. Binance, by the way, you can take your ether and deposit it from the Binance exchange. You can get it deposited on Arbitrum. Like two weeks ago, after rolling out that feature, they ran out of ETH because everyone deposited their ether on Arbitrum from Binance.

Starting point is 00:56:36 They're migrated. They had to put more ether from the L1 into their optimism, or excuse me, their Arbitrum Layer 2 so that more people could use that Arbitrum Layer 2. to withdraw onto Arbitrum. They ran out of Eith and then they resupplied it. And then it happened again. They happened again in less than 20 hours for Binance's new ETH supply to get drained. And so there's clear demand. I said it last time. There's clear demand to deposit money on layer two coming from centralized exchanges. Coinbase, once again, please take note and open up withdrawals onto things like Arbitrum and optimism and all the other layer twos. So we can drain you, Coinbase. So we can drain you.

Starting point is 00:57:14 Well, look, man, bankless. That's what this whole thing is. Ultimately, we've got to get a lot of these assets off of exchanges. That's the reason we're here. This is cool, too. On layer 2, 22, Rainbow is now deployed on Polygon, displays Polygon NFTs.

Starting point is 00:57:31 Rainbow Wallet's pretty awesome, David. Do you use this? I haven't downloaded. I don't use it too much, although I think we might be doing a show with them in the future. Yeah, we should. And I guess they are deploying on, you know, on all layer 2s. It's definitely one of the best,

Starting point is 00:57:44 NFT wallets out there. The NFT layer two ecosystem is definitely not very strong, as not as strong as I wish it to be. And the reason why is stuff like this hasn't been like deployed yet. So you know, wallets, user-friendly wallets that allow you to check out and do NFT stuff on layer twos is definitely one of those stories. So nice job, Rainbow wallet. Yeah.

Starting point is 00:58:06 So like the Ethereum Maynet sells 90% of all NFT traffic, right? It has like 60% of DFI, but it has a total locked value. it's 90% of all NFTs, which is pretty insane. But look, NFTs are doing well. It's NFT season. It's NFT season. Wow. I thought bare markets.

Starting point is 00:58:23 I thought all the liquid JPEGs are just evaporate in a puff. I know you're not the biggest NFT guy, Ryan, but like when I cope with down prices, I go and look at pretty JPEGs on OpenC. You do? You think that's what's happening? I think that's what other people are like, oh, yeah. Let's not go. Go away, coin gecko.

Starting point is 00:58:41 Open up OpenC. Like, I don't want to look. I don't want to look at crypto prices. want to look at my JPEGs. I mean, that might be a little bit reductive, but that's definitely my behavior. And, you know, at the same time, January has absolutely broken, like, smashed through records in NFT volume. Just wild.

Starting point is 00:58:58 And there's a bunch of brand new NFT projects that have really just caught people's attentions. And that's what we put in the market Monday for this week. We just kind of ran through all the NFT projects that have really captured a lot of attention. Board Apes have a floor of, like, 115th. insane. Justin Bieber bought a floor ape for something like 5X the value of it for some reason. Justin Bieber also bought doodles. These brand new doodles things have a 15, like 10 to 15 Eth floor and where just a couple of weeks ago they were two to three Eth. Um, Azuki's are these like anime style profile pictures that are really hot with those that are really into anime and

Starting point is 00:59:36 other Asian culture type stuff. Um, uh, cool cats and they're cool pets. I'm a big fan of the cool cats. They have their cool pets launch that happened earlier this week, kind of like a board abe kennel club type derivative project. And then there's a bunch of other NFT projects that have captured my attention that aren't necessarily pumping, but I decided to include those. Crypto-Covens, a new celebrity, just bought one of those, and that we'll talk about in a second. And then also MFers, which I think are just like,

Starting point is 01:00:03 perfectly offensively simple. It's like Ryan's, it's Ryan's Turtle brand, but a little bit better than the turtles, but not too much better than the turtles. turtles in terms of the drawing. And it's just like so offensively simple. It's just like, yes. Like this thing does cost $1,000.

Starting point is 01:00:21 It's so basic. Yeah. Definitely my brand. David, you even convinced me to get one of these. So I don't know what I'm, I'm an MF or two. It's like, look, is the game now we're trying to just front run Justin Bieber? I'm trying to front run the next celebrity.

Starting point is 01:00:35 Because what's interesting is they're buying NFTs, but it seems like they're not, they're not buying tokens. Right. I guess that's because when you buy an NFT, what are you actually buying? Are you buying some clout? Are you buying some signal? You're buying things you can't get from. You're buying clout and community love.

Starting point is 01:00:52 That's what you're buying. You're buying a community. Didn't you say, it's like, this is like a social media experiment, when you buy an NFT that has a robust community around it, and you said, hey, I'm now part of this MFT, I'm now a cool cat, I'm now a born ape, I'm now a punk, I'm now an MFer, than like instant community love. Right. You like instant followers.

Starting point is 01:01:14 Instant clout. It's like a, it's like people that don't know the Twitter world. Like you can go and buy followers on Twitter and like it's super obvious that you do. But like in the NFT world, you can kind of in a roundabout way buy followers by buying an NFT. And then that community just follows you. Yeah.

Starting point is 01:01:32 It's actually really interesting. It's a composable communities. It's like, oh, he's one of us. That's what's going on. All right. So here's another slide. Celebrity Cat, official cat. This is Cat Dennings.

Starting point is 01:01:43 Cat Dennings from two broke girls and also Thor. She brought a Crypto-Covin, which is this female-led NFT project that has all these very cool drawings of different witches. I think that you're just going through her Twitter feed at this point in right. I'm trying to see what I recognize her from, and I don't. But she's in Thor, I guess. Yeah, she's in Thor and a few others, yeah. Yeah, definitely seen her around.

Starting point is 01:02:07 Not in real life. All right, board apes. Okay, maybe this is why board apes are worth what? $5 billion. And it's not board apes. Sorry, not board apes. The Yuga Labs, the creators of board apes, the startup behind board apes, is receiving this $5 billion valuation potentially from A16Z.

Starting point is 01:02:29 $5 billion. $5 billion. What? That's insane. How is that true happening? I guess you're betting. I guess what you're betting is like, that board apes are sort of like Marvel comics level IP,

Starting point is 01:02:45 that they're going to be used in the future across like movies. They're going to be part of pop culture. That seems to be like a unicorn level, 5x unicorn level bet. And what you're doing is like you're buying the Marvel, you know, the company that created like the Marvel characters essentially. I guess that's what you're doing.

Starting point is 01:03:08 But I don't, I don't, I can't, I have a hard time wrapping my head around $5 billion for this. It's like a lot of assumptions. Well, I mean, it's A16C. So they kind of just like pile into anything that they do and really inflate valuations. That, I, I want that unpacked by somebody more smart than me because that is perplexed. Carly Riley. Carly Riley, overpress JPEGs. I'm sure she's on it.

Starting point is 01:03:30 Fantastic NFT podcast, by the way. If you want to hear more about this stuff, David and I just, you know, we tinker. At least I do. David, David's all it. Ryan just buys what I tell you. him to buy. Buy an MFer. What?

Starting point is 01:03:41 Okay, this looks stupid. I saw, like, very rudimentary drawings plus low floor price, and I was like, oh, Ryan's totally going to get one of these. Yeah. All right, Coachella, they are partnering with FTX. They're going to launch NFTs, maybe tickets. Is that what they're doing? No, I think they're doing.

Starting point is 01:03:58 Yeah, they're doing the whole, like, NFT collection type thing. So Coachella, I mean, I feel like the right kind of ecosystem to do an NFT style. projects like all these very very like you know hip young kids that stay up with the times like they maybe they want some nfts for going to cochella like anyone who goes to contela likes to flex like that's kind of why you go there it's interesting it's like it's uh the headline is cocella partners with ftx to launch nfts and where they launching them on salana it's kind of like whenever you see ftx you see salana it's like salana is to ftx what binaance chain is to binance i very much feel like that's the case. And you know, when we talk to Brian Armstrong, he's like, they haven't launched a

Starting point is 01:04:41 coinbase chain, have they? They haven't picked like a winner. And he seemed like, uh, I'm just going to It's Ethereum. Oh, okay. That's what you're saying. Yeah. Yeah. FTS is a lot. It's Coinbase is through Ethereum. Well, Heath would, like, he can't get the value on top. Like, he can't extract the value from that in the way that, you know, FTX can from Solana. I remember Brian was like, oh, I like open, permissionless, uh, decentralized protocols. And I respect that. Yeah. But I wonder if that's not the profit maximization take. Oh, certainly not. Definitely not. It's already not. And that's why FTX is maybe greater valuation than Coinbase right now. Yeah. And at this present moment. You got to do the right thing though, Brian.

Starting point is 01:05:19 All right. Okay. So that was a lot of exuberance. And Chris Berniske, who's one of my favorite people ever, but also has been a bear lately. A downer. A downer. NFT volumes and prices in January 2020 have been strong. Many say this shows how everything in crypto may not crash simultaneously again. I would rephrase that as how everything in crypto can be in different bull markets at different times. Sometimes. Super cycle. Some sectors go up while some sectors go down. Chris says that one could say that NFTs are at the furthest end of the risk spectrum, the most illiquid, and so the last to pump with the euphoric gasps of a dying bull. Oh, last gasp of the bull market. Chris. Chris, come on. We're trying to be bullish here. Chris will not be bullied into being bullish, unlike most people on crypto Twitter.

Starting point is 01:06:10 So he's always a very independent thinker. And when I hear these bear tweets out of Chris, I just like, oh, damn it, Chris. Like, yeah, did you have to say that? He might be right, though. I mean, there's always a chance he's right. What do you think? He's wrong. He's not.

Starting point is 01:06:24 He's not. Couldn't be a bear market. Couldn't be. It couldn't be. It's possible. It just doesn't have. Ryan. Look, we said it last week.

Starting point is 01:06:33 I'm going to double down on this. This is not. This does not feel like, you know, 2018? It's different. Different. It's different. Beber's here. You're not.

Starting point is 01:06:41 Peeper's here. Does that make you feel better, Chris? Oh, no, that did not make me feel better at all. Oh, shoot. What have we done? Oh, no. Anything can happen, guys. Remindered bankless listeners.

Starting point is 01:06:52 Anything could happen. We don't know. Bull market, bear market. We're not sure. Chris reminds us of that. Hey, let's talk about this. DM is selling. This is Facebook's Libra turned DM project,

Starting point is 01:07:03 staple coin project. You offer. to bid last week of $5,000. Apparently that wasn't enough, okay, because Silvergate outbid bankless for DM and is now, I think they paid $132 million for this. Oh, that's, that's, that's a lot. That's more than I would pay. Yeah, it's a lot. But actually, it makes sense for Silvergate. Do you know, so Silvergate is like the, the actual bank behind USDC and Coinbase. There are some other banks, but it sort of gave Coinbase and other exchanges a bank account when no other banks would support them. Now they're publicly traded. And that's true for a lot of companies in the ecosystem.

Starting point is 01:07:39 Oh, for sure. Silvergate has been like the traditional bank for. Polar. Mm-hmm. Because everyone else, you know, gave exchanges Dear John levels, you know, letters and said, get out of here. We don't want your business. Silvergate didn't. And they have an exchange as well, like sort of a bank-to-bank kind of crypto network exchange called the Silvergate Exchange Network. So I feel like this kind of makes sense for them, David. It's just DM has pivoted to a private company-owned blockchain that's going to do bank-to-bank-stile transactions. Oh, that doesn't make sense. So we're going to do something with it.

Starting point is 01:08:16 Yeah. Still wouldn't pay more than $5,000 for it, though. Yeah. There goes. The Eath Killer is getting bought by a bank. The ETH killer got bought by a bank. Just two years later, or three years later. I should go back and read some tweets.

Starting point is 01:08:31 For those that don't know that context, DM was originally, it was an EVM fork, I actually think. It was a death fork or something. And then people were talking about like... They built their own code, but it's like going to kill Ethereum, right? Yeah, right. That was definitely one of the branding. He's like, oh, yeah, this is going to kill Ethereum. And then meanwhile, it gets bought by a bank.

Starting point is 01:08:47 It's Facebook. What are you going to do? Oh, God, the irony. Look at this. Crypto leaders are launching a political action committee to back congressional candidates. So this is a PAC, right? Cryptofunded PAC. Framework Ventures is in there.

Starting point is 01:09:00 FtX is in there blockchain capital Masari, multi-chains, big money. Dan, Dan, Mattiches, I can't pronounce his last name. Dan, Dan, the guy that donated a bunch of money to Gitcoin for us to host Udi on the podcast.

Starting point is 01:09:14 Ah, CMS Holdings. Thanks, Dan. That's awesome. Anyway, they're spending 20 million on crypto-friendly politicians and, you know, that's cool to see. That is cool.

Starting point is 01:09:24 I think that's the backdrop where we get to some of these other stories. Last week, and this happened, I believe last Friday, after we recorded. Word came out about the SEC dropping a rule, a proposal for a rule, a proposed rule. This is kind of like executive order, so it's not coming from Congress, it's not a law. And possibly broadening the definition of what a securities exchange is to include automated market makers and DFI protocols.

Starting point is 01:09:55 It's unclear if that was really their intent. but they only gave the industry and everybody involved 30 days to comment. So this feels very much like trying to slip the vote through. And Hester Purse, of course, dissented on this. But it feels very much to me that crypto is under attack, maybe in the executive branch, coming out of Treasury, coming out of the SEC, coming out of some other agencies there.

Starting point is 01:10:23 And I don't know what to make of it. So there's that. And then you couple that with, there's a great story in decrypt and if you're curious about this we'll include a link in the show notes about the plot to hand the crypto industry to the big banks and the tlDR of this story is people think and it seems it could be the case that the biden administration directed by treasury and others in the executive branch they don't like stable coins very much they don't like the freewheeling uncontrolled uh like you know nature of stable coins

Starting point is 01:10:57 And you can understand when you see things like Tether, but they're worried about this industry getting too big and, you know, getting outside of the U.S. regulatory control. So their plan, according to this article, is actually to give it to the banks. Like make the banks responsible for it. And if you want to issue stable coins, you have to go through the same steps. A bank would be go through it. It's unclear whether this would apply to decentralized stable coins as well, how far they would push them. in the defy stack, but that is kind of the plot that might be uncovered. And we're going to see a stable, I believe a report from the Biden administration,

Starting point is 01:11:38 like this month about crypto and the actions that they intend to take with respect to this growing industry. What do you think about that, David? Yeah, it makes me think that this very significant amount of success by USDC and Tether has actually taken wind out of the sales of decentralized stable coins. Because why do we need decentralized stable coins? Look at how much USDC we have. It is pegged to the dollar so well.

Starting point is 01:12:06 Maybe this is the thing that really puts the brakes on things like USC and Tether and really, really incentivizes true decentralized stablecoin projects that we really, really need because we need more stable coins, but we also don't want them to be issued by banks. I mean, even defy has some amount of systemic risk in USC alone. And so, like, we need to get out of that. For just a little bit of context, the USC model and also the tether model of issuing stable coins and then allowing anyone to buy those stable coins internally in defy is a great, gigantic shift in a paradigm.

Starting point is 01:12:50 And so that allows banks who issue USC like Circle. to have some of that money be held by users that never KYC'd with the bank. Unlike PayPal, unlike any Wells Fargo or Zell or whatever, if somebody needs to send you money in PayPal, both people need to have accounts, the sender and the receiver. And that is not true with USDC or stable coins in defy. The buyer can buy USC off of its secondary market and send it to someone. It's so much better.

Starting point is 01:13:21 It's so much better. And there's no KYC for. for either of those two people. And that's what really triggers the nation state. Like cash, by the way. Like very much just like cash. Like actual physical cash. Yeah.

Starting point is 01:13:31 And that's taking the power out of banks. It's taking the ability for banks to capture us away from them. And then it's also taking the ability for nation states to know where all the money is and to tax all of its individuals away from them. So there's friction here. And so USC is this, in my mind, a very amicable middle ground. between the desires of the nation state wanting to push dollars into all corners of the world

Starting point is 01:13:56 and the desires of the individual to freely and omissionlessly transact dollars between their friends and family and whatever. But the banks and the nation states are saying like, no, no, no, it's our way or the highway. And so they are fighting to rethink. It's like, let's hope they don't screw it up, I think is the message here.

Starting point is 01:14:18 And there are lots of ways they can screw it up, particularly by giving this entire individual over to the incumbents rather than the crypto natives. I hope you guys are ready for a banked future if they get what they want. I hope not. I'm not ready for that. I'm not ready for that. I'm not ready to capitulate yet.

Starting point is 01:14:34 You would? Oh, yeah. Where'd you go? Portugal. Well, look, this is one guy who's pushing back. His name is Josh Jarrett. Josh. Quality fitness.

Starting point is 01:14:46 He is the owner of quality fitness, also a crypto staker, Tezos. and what's he doing? He is suing the IRS. Yes. All right, this is insanity wolf stuff. And why is he suing them? It's because he doesn't think that staking rewards should be treated as ordinary income, which is sort of maybe the posture of the IRS so far. And if you are staking in an exchange, they'll issue 1099,

Starting point is 01:15:14 and they'll consider anything that staked any of the staking rewards ordinary income. Josh is saying that we don't have clarity on that. It's actually new property and you shouldn't have to pay taxes on staking rewards as ordinary income. You should only have to pay capital gains when they're sold. And so apparently he had a favorable in his district. He had a favorable interaction with the IRS. The IRS offered him at first a refund saying, okay, it's not ordinary income. You know, staking reward. and then he refused the offer and then he went to court and said, no, I want more than that. I want some additional clarity. So kind of cool. It's like, it's small because it's in, I believe, some sort of district court, but some precedent is being set. And this is what Jake Trevinsky says about this.

Starting point is 01:16:11 Josh sued the IRS for clarity on taxation of new tokens created through staking. The IRS tried to pay him off to drop the suit. He turned down the money to continue the case. case and seek building precedent for all of us. King! How many times I'll have to play this song for it? You're done with me talking about it. That's what that means, I think.

Starting point is 01:16:30 No, no, no. Dude, we need more heroes like Josh. We need more people with spines to stand up and say, hey, the way that this is working is bad and wrong and we should fix it. You're a citizen. You have rights. Push back against this stuff. Use our court system for what it's made for.

Starting point is 01:16:49 Or, you know, some CPAs are saying, look, like, some people are saying IRS will not tax unsold, staked crypto's income. It's far too much, it's far too early to say that right now. And so we can't say that. But what we are doing is establishing some precedent in court and can continue to fight this. Meanwhile, in India, what's happening? India is proposing pretty aggressive taxes on just all crypto activity.

Starting point is 01:17:16 So 30% tax on crypto income. In addition to, I think, like, a 1% tax on, like, crypto transfers. So I think what that means is, like, if I were to send you, like, USC, and I send you $1,000 of USC, I got to pay, if I was in India, I would have to pay them $10. What? Yes. Yes. Like, yeah. Like, there are the Visa Network or something?

Starting point is 01:17:36 Yes, exactly. Yeah. So, like, everything about, India is just going, like, hey, that crypto thing that you did, tax. Like, that other crypto thing that you did, tax. And so they're just trying to capture. all the activity, the native Indian activity in crypto as much as possible. Do you see what it's paired with? So this headline is paired with, they propose a 30% tax on crypto.

Starting point is 01:17:59 Meanwhile, they announced the digital rupee launch. Yeah, probably no taxes on the digital rupee. Not at all. Taxing freedom to try incentivize you into coercion. This is something that, you know, remember when we had Eric Peters in the podcast? And we asked him the question, are you worried that big governments will ban crypto? He's like, no, I'm not. They're not going to ban crypto.

Starting point is 01:18:20 What they could do and what they probably will do is tax the hell out of it. Yeah. They'll try to disincent you from using crypto, using all of their traditional means. And that's what we're seeing India do here. India is doing it aggressively, by the way. That's kind of the news. It's not just like, oh, India is taxing crypto. Like, no, they are taxing crypto.

Starting point is 01:18:41 Yeah. It kind of sucks as well. I mean, some people are saying it's good that there's some additional clarity. but like the clarity to me to my mind is bad news now david and i aren't from india so there might be some listeners who have better information on this we'd be interested to hear from you what you think about this does not seem like great news seems like a little nation state hostility towards crypto guys we're going to be right back with the takes of the week get to the meme of the week as well but before we do we want to thank the sponsors that made this episode possible the gemini exchange has been my exchange of choice ever since

Starting point is 01:19:13 i got into crypto i used jemini to both buy the dips and also manage my regular automatic monthly purchases of my preferred crypto asset. On Gemini, you'll find over 50 different cryptos, including many of the top defy and Metaverse tokens like Wi-Fi and Axi Infinity. Using Gemini Earn, you can earn yield on your various cryptos, including 8% on the GUSD stablecoin. Gemini is available in all 50 states and more than 50 countries worldwide. So if you're looking to upgrade your crypto exchange, sign up at Gemini with Gemini.com slash go bankless and get $15 of Bitcoin after you trade $100 or more within the first 30 days. That's gemini.com slash go bankless.

Starting point is 01:19:52 When you shop for plane tickets, you probably use kayak, Expedia, or Google to compare ticket prices. So why would you limit yourself to just one exchange when you trade crypto? When you make your trades, you want to make sure you're getting the best possible price on your trade. And that's why you should be using Macha. Masha has smart order routing that splits your trade across all the various liquidity sources in Ethereum. And is also operational on Polygon, Avalanche, Finance Smart Chain, and other chains. Trading on Macha is super easy because it pools the liquidity for me in a single easy-to-use platform and allows me to make limit on-chain orders so you can set and forget your DeFi trades

Starting point is 01:20:24 and they will go through automatically while you're away. So when you're making a trade, head over to macha.xyZ slash bankless and connect your wallet to start getting the best prices and most liquidity when you trade your crypto assets. Bankless is proud to be sponsored by Uniswap. Uniswap is a new paradigm in asset exchange infrastructure. Instead of a cumbersome order book system where trades, are matched with other humans, Uniswap is an autonomous piece of software on Ethereum that lets you trade any token at the current market price. No human counterparties or centralized intermediaries,

Starting point is 01:20:55 just autonomous code on Ethereum. Input the token you want to sell and receive the token you want to buy. The Uniswap Grants program is accepting applications for grants. Do you have something of value that you think you want to contribute to the Uniswap ecosystem? No matter how big or small your idea is, you can apply it for a unique grant at Uniswopgrant.org and help you. helps steer Uniswap in the direction that you think it should go. Thank you, Uniswap, for sponsoring bankless. All right, guys, we are back with the takes of the week, David. Why don't you start with this from Chris Dixon?

Starting point is 01:21:24 Yeah, I really, really like this take. Chris Dixon says, if you think right-click and save is a dunk, you really don't understand NFTs. The more copying, the more valuable. And the reason why I like this take, Ryan, is because the same is true for how blockchain networks need to be anti-fragile and resilient. Is blockchain networks need as many computers to download the chain as possible? Bitcoin, Ethereum, these things survive by self-replication.

Starting point is 01:21:49 And what that means is can they self-replicate like evolution and put their DNA on all the computers in the world? And the more that they do that, the better. And so when someone says, like, oh, I just right-click saved your NFT, I tell them, thank you for doing that. Make sure you print it out and frame it as well because I want my NFT, which is mine, not yours, to be propagated all around the world. And so the more, that's why you see like cool cats on.

Starting point is 01:22:15 on the Times Square and Board Apes on Times Squares because we want these things to be right-click-save. Like we want to lean into the right-click saving. Please right-click save my NFT. Please download it. Make it your phone background. Make it your profile picture. Please do that. It makes a lot of sense, right?

Starting point is 01:22:32 And this is not foreign. I mean, we see it in kind of traditional art markets as well, right? It's like if the Louvre was selling Mona Lisa posters in their gift shop, does that decrease the value of the Mona Lisa? No. You're propagating the Mona Lisa. You're making it more valuable by doing this. You're making it a cultural icon and a staple. So not surprising that this is the case, but it's a very basic criticism that really doesn't understand things.

Starting point is 01:22:56 Why don't you do this? This is sort of a follow-up related tweet from Scott Lewis. Yeah, Scott says, for people active on social media, $100,000 NFL profile picture will get so many more impressions per month than a wristwatch that costs $100,000. of course more people choose to spend more on nfts than watches and scott says for me over a decade it might be point zero zero zero three dollars per impression for his super expensive nfts versus three dollars per impression on your super nice awesome Rolex so really it's just a matter of like what lets you flex more that super expensive watch or that crypto punk as your profile picture

Starting point is 01:23:37 and how and what is the r o why on the number of flexes that you can get per person versus your Rolex, where you can only wear your Rolex in real life, where on the Metaverse, you can flex your NFT profile picture to everyone on the internet. And so the value per impression, while these NFTs and these JPEGs are super, super expensive, the dollar price of an impression is really, really cheap. And that's why NFTs are so hot. I feel like you're selling me on that $5 billion board ape valuation. I've been trying to get you to do a crypto punk for a while now, Ryan.

Starting point is 01:24:10 This is a really good take I've never thought about it like this is what I would say I guess the other value is like a Rolex can break can you know deteriorate you can lose your private keys though I guess Have you ever lost your private keys before Ryan? I have never No I've never lost my private keys

Starting point is 01:24:32 I have never had a wallet error before I have also never done the thing where you send money to the wrong wallet Except one time I have done that Okay, I've done that once, and I did it to my own wallet, though. Oh, I also did that. I also did that. It was like, I sent, I sent money to an address and were like, that's not the address

Starting point is 01:24:51 that I wanted to, but I recognize that address. Where are the private keys from the address? Oh, I double checked and I was like, oh shit, oh shit, it happened. And I was like, you did it to your own wallet. That's my wallet. Dude, I was tearing apart my, like, all the places that I had. This was like a while ago. And I was like, where the, where the hell is this goddamn private?

Starting point is 01:25:10 key for this goddamn wallet and it took me like an hour and I have to find it and I finally did. Awesome. Well, I mean, knock on wood, right? It can't happen. I guess that's your point. Yeah. Let's see this. Another, man, all the takes are NFT. This must be NFT week. What's this NFT take? Yeah, this is from Gabby Dizzen from Yield Gaming. He goes, NFT Blue Chips are the L1s of IP. Interesting comparison. I think he's saying stuff like Cryptopunks, board apes, whatever other projects you consider to be blue chips, I'll throw in cool cats, are the layer ones of IP. I think it's kind of a riff off of the fat protocol thesis where like these NFTE blue chips are just like these blockchain native brands like board apes, like crypto punks, like doodles,

Starting point is 01:25:57 I guess, are now in a blue chip like cool cats. These are these the like OG like L1s, but for IP, internet native IP. Well, I think he's saying this is this is Mickey Mouse, right? I think he's saying this is Marvel. This is DC Comics. This is that kind of IP that people are going to build against into the future. And it could turn into shows, cultural icons, movies, cartoons,

Starting point is 01:26:23 action figures, all sorts of things. I guess that's partially what you're betting on too. We've also seen that in the past. Here's another NFTs take. What's this? Okay, so this is a facetious take. So this person is being sarcastic. NFTs are a scam.

Starting point is 01:26:37 I prefer to pay artists real money. like 0.000-0-478 cents to my favorite musician for my Spotify listen or $20 for a photography print on a website that gets seven hits a day or my favorite one Instagram follow to a digital artist whose work I absolutely love. So this is just like there's a lot of NFT haters out there. But then like we have to remind where we're coming from. Like the alternative is like, oh, I'll pay you in likes or I'll pay you in followers. Oh, are you a really, really cool artist? here's 10,000 followers on your Instagram, good luck paying for dinner. And so, you know, this is this facetious take about how, like, you know, actually

Starting point is 01:27:17 NFTs are a great way to monetize art, which there's a lot of people out in the world that are not ready to hear that take, I don't think. Money directly to the creator. That's where the money's going. And so people don't understand. Are we done with that? Is this one NFTs? No, this is a DC investor who's NFT periphery, but great take.

Starting point is 01:27:35 You want to read this one? This is more about conviction, I think. I'll read it. One of the partners at my old firm used to call me blockchain. He used to call it blockchain. That's funny. After 2017 bubble pop to remind me of my misplaced exuberance for the technology, he got fired three years ago.

Starting point is 01:27:51 Meanwhile, I quit one year ago because I no longer needed to work because my exuberance was correct. There's DC investor. Looking at history, I guess, maybe getting a bit of a... Shoddenfroid. Yeah. My German is not great out of this. What do you think?

Starting point is 01:28:09 Did you get made fun of in 2017, like 2018 after the people like, why are you still in crypto, David? It's dead. You let us wrong. I don't think I really was made fun of back then, but I definitely had a harder time of convincing people to come into crypto. No, I didn't really get made fun of. People don't want to listen to you when prices are depressed right that. The very time they should be buying, they just think you're, you know. Click on Eric Conner's.

Starting point is 01:28:35 meme that he drew. So here's a DC investor's profile picture, drawn as a restaurant, receiving a poured glass of champagne while somebody in pain, some waiter in pain, has to pour it for him. Yeah, I, uh, yeah, I, look, it pays to invest with conviction. At least when you're right. At least when you're right. All right, this is your take, Ryan. What's your take here? Yeah, my take is, uh, this is just, you know, not about Joe Rogan at all, but it's about the protocol. So people want to cancel Spotify over Joe Rogan. I saw a lot of this conversation, but no one ever called for the cancellation of RSS. That's because one is a company and the other is a protocol. When Rogan switched to Spotify from RSS, he gave someone else the ability to

Starting point is 01:29:18 de-platform him. I think that's an interesting take because RSS is a protocol. It's a standard. So we distribute the bankless podcasts, lots of podcasters do via RSS. And any third party, a Spotify, Apple, iTunes, whatever podcast listener, you listen to podcasts in, can subscribe and can aggregate our feed or any other podcasters feed, but they don't control RSS. Why? Because it's a protocol. It's a credibly neutral protocol. So Apple can't de-platform us from RSS. And when there's some controversy about a particular podcast, like as there has been lately with Joe Rogan over some of his COVID conversations and stances there, no one calls for the deplatforming of him on RSS because RSS can't deplatform you. It's credibly neutral. It's a free speech

Starting point is 01:30:08 protocol. Meanwhile, if you are Spotify, you have governance, you have a management team, you have shareholders, you absolutely can be deplatformed, right? Whether you agree with what Jogan is doing or not, it's like kind of completely beside the point here. It's not irrelevant. It's just illustrating the difference between a protocol that is credibly neutral and a platform, which has a set of decision makers that can de-platform you and relegate you to the sidelines for whatever reason. So I think that's a good thing because a lot of things, it's a good thing to realize because a lot of things in crypto, they talk about themselves as if they are censorship-resistant, credibly neutral protocols. Really are they all they are if they don't preserve those qualities? They're just

Starting point is 01:30:58 platforms. They're kind of like companies rather than protocols. Yeah, remember when DFINITY, I think, took down some NFT project because it violated IP copyright laws. Yep. Well, that's kind of the same thing. And this is why a lot of, you know, cypherpunk fans all chant the chant that code is speech. RSS, the RSS feed allows for free speech to happen. Say, for example, the United States, nation state decided to get super authoritarian against crypto and demanded the deplatforming of every single crypto podcast, bankless would still be able to get out its podcast via RSS feed. RSS, and that protocol is free speech.

Starting point is 01:31:40 Spotify is not free speech. That's permission speech. And it goes down to exactly what Ryan's saying, down to our crypto protocols. True decentralized permissionless protocols are equivalent to free speech. Others that don't have that property are not. Yeah, great illustration there. David, what are you excited about, man? Oh, man.

Starting point is 01:31:59 I'm excited about Heath Denver, Ryan. I got my East Denver shirt. Oh, man, I didn't even notice. Right? Yeah. I think this is the... What year was that? This is, I think, 2018.

Starting point is 01:32:08 I think 2018, yeah. Actually, this might be 2019. But, Ryan, did you know that there are 25 East Denver and East Denver, 2018 Poaps, and I own one of them? How many? Only 25. My God, that is rare. One, yeah, looks very rare.

Starting point is 01:32:27 Yeah. And I also had the 2020, or 2019 one. I did not get the 2021 because that one didn't happen. It was a live stream. But only 13 sleeps until Eat Denver. 12 sleeps for you guys since they were recording this a day early. And so that is one of the things I'm excited about, Ryan. And then the other thing I'm kind of excited about, also super excited about,

Starting point is 01:32:45 I haven't totally committed to this yet. But I'm more and more every single day. My lease in San Diego ends at the end of May. And I'm real, real thinking about moving to Brooklyn, Ryan. No way. Why? You want to get on the East Coast time zone, huh? Yeah, yeah. All of a sudden, we're going to be synced up in our time zones. That's going to be weird. You're going to have to get used to how early I wake up. You wake up early.

Starting point is 01:33:07 Yeah. Just the amount of friends that I've meeting that live in New York City and Brooklyn is just through the charts. Absolutely astronomical. And there's a lot of cool things being built out there, and I want to be there for it. So might f around and move to Brooklyn at the end of May. There you go. We'll see. Is David coming to Brooklyn? Should he come to Brooklyn? What do you think? Leave a message in the comments on YouTube. David, David,

Starting point is 01:33:31 to move to Brooklyn. Yo, David, you can sleep on my couch. I'm from Brooklyn, man. All right, Ryan. What are you excited about? Look, this is going to sound super nerdy, but I'm pretty excited about the DCF model, discounted cash flow model that we saw in the podcast

Starting point is 01:33:45 we recorded. But I'm excited for different reasons, right? It's like we knew this model existed and people have modeled this in the past. The reason I'm excited is because, I feel like part of the purpose of bankless when we started this podcast and when we started the newsletter was to explain the value of defy and the value of ether. That's honestly why we started it. We started it in the bear market because we were like, look what's happening.

Starting point is 01:34:11 Look at this thing called Ethereum. Why aren't people paying attention to this? Why do people keep saying crypto is only Bitcoin and also that it's dead? That's all people we're talking about. And I feel like it's working. Okay, so we had a bankless listener, Brian Alice, who came up with this great discounted cash flow model. How did he come up with it? Well, after being inspired from listening to our ultrasound money episode with Justin Drake around last year at this time.

Starting point is 01:34:38 Okay, that seeded, like the seed of the idea for him, and he created a discounted cash flow on top of that. Now, and he's saying, you know, 12K is conservative fair value now for the price of ether. And then we saw earlier in this episode a bankless listener on Reddit who did a riff on Ryan Alice's discounted cash flow model, more improvements for the model. And this is how it kind of works its way up.

Starting point is 01:35:02 Like an idea, a good idea, a narrative that sticks, kind of goes through the forges, the mean forges and works his way up. Goes through the crucible. And it starts with shows like bankless, but then other smart investors are like, you know what?

Starting point is 01:35:15 They're right. I'm looking at the numbers and there's something here. I am bullish on ether. Yeah, these guys aren't just like the other, you know, shills we see on YouTube. There's actual, like, numbers and fundamentals backing this stuff. And then big name analysts start to step up and pretty soon, like, the banks and, like, the, you know, the JP Morgan's of the world, they're like, oh, we're running the numbers too. And here's our price prediction for this asset.

Starting point is 01:35:40 And then you get to mainstream acceptance. Wearing their ties. Then you get to mainstream acceptance for the stuff on, you know, C&BC and that becomes part of the narrative. So the cool thing I think is that, you know, we've been part of this. If you've been a bankless listener, you've been part of this. And this is an opportunity to participate in this story, to front run everybody else. And like, I'm not saying this is the last chance. There'll be tons of opportunities for this in crypto.

Starting point is 01:36:03 But this is probably the most obvious chance to do that. Okay? Like the merge for ETH is happening in like six months. And no one's running this discounted cash flow analysis. No one's actually looking at supply and demand for this asset and being like, well, if this comes true, what is going to be the price of ETH? So you get to front run these opportunities and you get to say, probably to your kids and grandkids, you are here listening to Bankless while ETH price was below 3K. That to me is exciting. And yeah, I'm just like education is alpha. We talk to Kyla about that.

Starting point is 01:36:39 That's our podcast coming out on Monday. Just keep educating yourself. Keep being curious about this. it's always going to be alpha, and we're glad you're here. And the other thing I would say is, like, what's nice about this is we're not shilling eth. We're just saying like, hey, run the numbers. We're just showing the numbers. We have the receipts. Come and see.

Starting point is 01:37:00 Go check it out. And the numbers and the metrics and the ability to evaluate these things is unprecedented in the world of Ethereum. And specifically with ether, that is why ether is so cool, is that the amount of supporting numbers that you can generate to back up the things that we are saying is more, stronger than any asset in history. And so ultimately, the level of confidence that ether the asset will be able to instill once people get over the hump of like, oh, crypto's a scam, is going to be massive.

Starting point is 01:37:32 So you're right, Ryan. I'm also excited about that. You know, somebody could start a podcast, a once-a-week podcast on just Ether the asset. Isn't that ours? No, no, it's not. We don't do that enough. Somebody could like go really do a deep, the deepest dive into ether, the asset.

Starting point is 01:37:51 What happened in last week? You should buy EET, this is why. The metrics, like the updates, the global perceptions around it. Once a week podcast that just dives into the metrics and numbers behind ether is ripe for the taking. I would be a frequent consumer of that podcast. Well, message to another bankless listener who feels inspired to do that. We're going to stop talking about Ether now. You can't have pushed those in time.

Starting point is 01:38:14 No, we're not. Let's talk about NFTs. Let's talk about the meme of the week. What are you looking at? Meme of the week, David. Meme of the week. It's a bunch of lines, a bunch of lines all going down into the right. A bunch of different colored lines.

Starting point is 01:38:24 They're alluding to prices of your NFTs. And your NFTs are the ones that always go down, except there's that one line that goes up into the right. And that's the NFT that you didn't meet. Sorry about it. It's bittersweet, huh? I guess, you know, turtles are the ones on the downward side. The one I didn't mint is up there.

Starting point is 01:38:44 Yeah, the green one is the board apes. That's right. I did not mint a board ape. Guys, thanks for hanging with us. Again, of course, none of this has been financial advice. We have no idea which NFTs or crypto assets are going to pump next. And we won't pretend that we do. ETH is risky.

Starting point is 01:39:01 So is TFI. So is all of this crypto stuff. You could definitely lose what you put in. But we are headed west. This is the frontier. It's not for everyone. But we're glad you're with us on the bankless journey. Thanks a lot.

Starting point is 01:39:12 Hey, we hope you enjoyed the video. If you did, head over to Bankless HQ right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence. We recommend joining our daily newsletter, podcasts, and community as a bankless premium subscriber to get the most out of your bankless experience. You'll get access to our market analysis, our Alpha Leaks, and exclusive content, and even the Bankless token for AirDrops, Raffles, and Unlocks. If you're interested in crypto, the bankless community is where you want to be.

Starting point is 01:39:45 Click the link in the description to become a bankless premium subscriber today. Also, don't forget to subscribe to the channel for in-depth interviews with industry leaders, ask me anythings, and weekly roll-ups where we summarize the week in crypto and other fantastic content. Thanks everyone for watching and being on the journey as we build out the bankless nation.

Bankless - ROLLUP: Wormhole Hack | Wonderland Follow Up | Justin Bieber Bored Ape | Gamestop X Immutable

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.