Bankless - ROLLUP: ZkSync Airdrop | Optimism Fault Proofs | Pectra Ethereum Upgrade

Starting point is 00:00:00 ZK Sync introduces the ZK token. Probably one of the more anticipated networks that drop their token dropped their token. Also, I mean, they dropped 17.5%. And it was like kind of a crazy large air drop. Bankless Nation, welcome to the Friday weekly roll-up. It's the second week of June. And we've got a bunch of good news. I think it's a lot of good news.

Starting point is 00:00:22 And also, instead of Ryan, who's down and out for the weekend, hanging out with his AI family like he sometimes does, we're pulling in Anthony Cizano to substitute teach for the Bankless Nation to cover. the weekly news in crypto. Couldn't think of a better person to sub in. Anthony, how you doing? Hey, I'm doing good. Thanks for having me on as a substitute teacher again. Always loved doing these episodes with you. Yeah, we love having you. And before we actually get into the specifics of the news, like maybe let's just zoom out, Anthony. Just like, quick vibe check. Just like, how are you feeling? We're in kind of a weird spot. We've gotten really good news. We've gotten some cool

Starting point is 00:00:55 innovations that have happened this year. It's definitely been a very fun year. Overall, like, What would you just say is this high level about just the vibe of everything right now? Yeah, yeah. I think the vibe's a little weird right now. It depends on where you look. If you go on Twitter, I think the vibe is different to going on some private Discord communities that you might be a part of or even public ones that you might be a part of.

Starting point is 00:01:16 I think everyone's still very, very excited about the tech and all the developments that have been happening. You know, we're seeing a lot of growth across the industry generally. But of course, if the price goes sideways for a few weeks, everyone starts losing their heads. So I think, yeah, there's a bit of a disconnect there. But I guess we'll get to the point. where price starts going up again and the tech will be good and everything will suddenly be good for a few weeks as well. Yeah, it does get hard to like decouple price action from like the

Starting point is 00:01:40 sentiment of almost anything else. But there is a lot of other things that I think are just like pretty crazy things that happened this week, crazy big. ZK Sync, one of the oldest, most longstanding layer twos dropped their ZK token. So we'll talk about who is eligible and what's the sentiment around that. Optimism, this is one of the big things I've been referring to, launched the first permissionless fault proofs ever. So if you have been paying attention to the just technical advancement and decentralization of a layer two, optimism got a green slice on their layer two beat.

Starting point is 00:02:13 Security orange, as you call it. Eigen layer gets a competitor. They got the juice. Brand new competitor on the scene. This one's a little bit different than the others. And also, it's kind of like acquisition week this week. We saw like three or four major acquisitions. We'll talk about all of them as well.

Starting point is 00:02:28 and something that's going to be very useful to have Anthony here. Pectra is about to be one of the biggest Ethereum upgrades. It's chock full of upgrades. And so we're going to talk about just everything that is in the Pectra upgrade and when it is coming. But first, of course, our friends and sponsors over at Stakewise want you to know what they're up to in the world of liquid staking on Ethereum. If you're a solo staker but your ETH is locked up in a liquid because you're solo staking, you can continue to be a solo staker in the Stakewise protocol while also being able to mint O.S. S-Eath in order to use your solo staked ETH in DeFi on layer 2s, in IGIDLAIR, or anywhere else

Starting point is 00:03:04 across the Ethereum landscape. You get to keep your rewards that your node is earning while doing more with your ETH. And if you're not a solo staker, Stakewise is introducing a Vaults marketplace to choose perks that you want to add onto your staked ETH between custom MEV strategies, DVT, insurance, API boosts, all things available through the Stakewise Vaults Marketplace. There is a link in the show notes if any of this stuff peaked you. I'll talk about the markets. It's not the greatest week in the markets.

Starting point is 00:03:32 We are down across the board. Bitcoin down 5.8%. Start of the week over $70,000, ending the week $66,800. Ether, kind of even worse. Start of the week, 3,800, down 8.8% to 3,475. So we were really like pretty riding high, especially the Ethereum community, post-ETF. and we just couldn't keep it going. We just like lost steam.

Starting point is 00:03:59 Overall, just like any comments on the price action, Anthony? Yeah, yeah. I think what it really just keeps confirming is that there doesn't seem to be any really net new money coming into the ecosystem for quite a while now. Obviously, BTC has some new money coming in via the ETS. But even that, like people don't realize that just because money's going into the ETS doesn't mean it is a net buyer of Bitcoin. It can be doing a complex kind of strategy in the background where it could just end up

Starting point is 00:04:23 being flat where essentially you're longing the ETF and then shorting, uh, shorting, uh, shorting the market generally on BTC. So your exposure is basically flat there. So yeah, I think that because of that it means that pretty much everything else, except the BTC is bleeding pretty hard. ETH, of course, got the EATs approved, but they're not live for trading yet. We're expecting them. Well, at least I'm expecting them to go live next month, hopefully for trading. But yeah, until they're actually live, there's, there's no inflows, right? So people are just really speculating still, speculating on what those flows will look like. And it's the same pool of money.

Starting point is 00:04:53 rotating around. I really do firmly believe that there's mostly the same money sloshing around in crypto and has been for quite a while. There's not really any net new money in. Like no one that I know in real life, like literally no one that is not just in crypto already has even whispered a word about crypto to me. And they know how much I'm in crypto. It's like very uninteresting for them right now. There's no FOMO. I think people, especially if they're in 2021 slash 2022, they're still burnt from that because I think we tend to forget how bad that was for the average investor. You know, things like terror collapsing, wiped out so many people that had just come in and were new people. So for them to come back, I think they're going to need some really strong fomo.

Starting point is 00:05:30 And I don't think we're going to see that until BTC and ether firmly in price discovery in the mainstream media every day saying, look at these new all-time highs, you know, get in now, or actually going to miss out sort of thing. So until that happens, I'm not surprised at all by this kind of price action because of the fact that the new money is just not coming in right now. Yeah, the Bitcoin chart is pretty interesting. We've never seen, maybe you can correct me if I'm wrong. We broke all-time highs, but we did not see price discovery. I don't think anyone was expecting to break all-time highs and immediately skyrocket, but we broke all-time highs in March of this year.

Starting point is 00:06:03 And it's now, like, well into June. How many months is that? Like four? It's been pretty crazy to break all-time highs and then not do anything meaningful, like, four months in a row. Yeah. Yeah, it usually happens where it'll kind of hit the all-time high, the old, all-time high, hang around for a month and then go into price discovery.

Starting point is 00:06:20 but because this cycle has generally been quite weird and quite accelerated as well, I think that maybe the market is trying to, quote, unquote, get us back on track into that classic four-year cycle meme where essentially, you know, BTC will go sideways for a little while and then start going into price discovery to catch back up to that. But yeah, we've not seen this kind of lag before from BTC going, you know, to a, it's old all-time high and then, yeah, it's four months or something, three, four months and not going into price discovery. But again, I think that speaks to the fact that there's, yeah, there's not,

Starting point is 00:06:50 not really new money coming in. And the in the BTC, ETF money is what's keeping BTC so relatively strong as well. Like it's, it's very, very strong, even against ETH, which I consider to be, you know, just as good as BTC, if not better from from my perspective there as an asset. Yeah, I just think that's the phenomenon that we're seeing right now. It's not going to last forever. And I also think that there is the phenomenon of the summer lull, like 90% of the world right now is in summer in the warmer months. So they're not sitting around on their computers trading crypto, right?

Starting point is 00:07:17 They're outside on the beach, you know, having fun. and that's traditionally what we've seen. But then you can look at the stock market, and stock market's doing really well and going bananas, basically. But I think the stock market is definitely very different to crypto. Crypto is super risk on. Stock market, not so much,

Starting point is 00:07:32 especially like the top 10, which carries the entire stock market, top 10 stocks. People don't treat that as a super risky, I'm going to throw this in for a punt sort of thing. And we're looking at the ETH Bitcoin ratio on the screen right now. And we had just a pretty crazy green candle

Starting point is 00:07:46 from 0.045 to 0.05. seven, but we've retraced almost half of it. And EtherUSD is definitely suffering in comparison to Bitcoin in the last week or so. Again, down 9%, 8% this week for Ether and 5% for Bitcoin. And of course, Ether just doesn't have those flows. We have the speculation of the ETF, but we don't actually have the flows of the ETF. And I think like the entire crypto market that was going to buy Ether because of the ETF getting approved did that. But then like that was, we shot our shot. And now we're kind of just waiting for the flows to kick in.

Starting point is 00:08:21 And we got a rumor out of this week, well, not a rumor, but a mention of Gary Gensler talking about when the ETF S-1s might actually get approved. And he says, sometime this summer, which I will say is now. Now is the summer. And so, like, it's still a pretty, like, wide range of time. I think we've got, like, one more month. Like, early July is kind of my time frame. I don't know if you have any opinions on, like, when you think the ETF might actually

Starting point is 00:08:47 start trading. Yeah. I'm in the same boat early July. I gave a date on my own show of July 8th, not based on anything other than kind of speculating that maybe it doesn't go live in the first week because of the July 4th holiday in the US. So it could be July 8th, which is the Monday following. But, you know, I feel like it's not going to take very long

Starting point is 00:09:06 because the S-1s are basically copy paste from the BTC ones. It doesn't seem like there's going to be a lot of back-and-forth or feedback or anything to be rectified. So, yeah, I feel like it's going to happen sooner than people think. But I guess like in the next couple weeks, we'll get a better picture of that. Quick update on the Layer 2 ecosystem. We got $44 billion locked on Layer 2's Arbishop again coming,

Starting point is 00:09:26 still having a healthy lead over everything at almost $18 billion. We're down at 9% in TVL, but that's just because of the ether price. But then the activity on Layer 2's is staying pretty damn high, I'd say. We're at 11 scaling factor. So you can really just see the Dengoon, the 4844 blob space, hard fork into Ethereum. and then we've just been like holding this pretty high level of activity. Anything you want to comment on the layer two activity? We're definitely going to talk about optimism and their fraud proofs later on.

Starting point is 00:09:56 But globally, any comments about the layer two space? Yeah, yeah. I mean, it's just continuing the trend that we've been seeing, especially since Denkuh went live, as you mentioned, of usage going up and up and up because we basically gave more capacity for users and they're using that. And there's more apps going live and there's more interactions happening. It's great to see.

Starting point is 00:10:12 I mean, I don't think the L2 activity has slowed down with the price slowing down at all, which is even better to see because as you were talking about earlier, we would love to see more and more of that decoupling of price and tech fundamentals and usage of products on chain. And I think we've been seeing that lately. So every metric that I'm tracking with regards to layer two, specifically like the top layer two's or like base and Arbitrum one, things like that, right? Even the smaller ones is still up into the right.

Starting point is 00:10:37 People are using them and people are getting value out of them. And sometimes people say, oh, people are just airdrop farming. Well, it's like, no, because Arbitrum already has a token. They're not doing another air drop. So their usage going up is not airdrop farming of the ARB token. Base has said multiple times they're not going to do a token, whether they do or don't is another thing. But we know that a lot of this activity is a kind of a natural thing, an organic thing. People aren't just farming things.

Starting point is 00:11:00 They're using it. They're getting value out of it, which is what I really love to see there. Switching into the world of macro, we got a FOMC day this week where this is where the Federal Reserve comes together and tells us whether or not they're going to raise lower or hold steady interest rates. And then we also get the inflation report. So that inflation report came in pretty cool. So inflation this last month was lower than expected, which means that we are more likely going to get raised cuts.

Starting point is 00:11:27 That's the general thought. But we did not actually get any raise cuts announcements. So we have indicated that there will be one raise cut coming this year, but that's no new information. That was already like priced in by the market. But I definitely remember waking up one of the days. week after the FOMC day and hearing the indication of like cooling inflation. And I think that's what caused like a pretty like good day in the markets. Like either like ether was jumped like

Starting point is 00:11:55 $200 or something. We have of course sensory trace. But at least the market favorably reacted to this FOMC day. Yeah. Yeah. So I think people because they saw the Canadian Central Bank and the European Central Bank or the ECB cut rates, I believe last week, they thought that the Fed would be signaling that they're going to cut rates. And I think that it's eventually going to happen, but I think people are a little bit of wishful thinking there of like, oh, it's going to happen now. It's like, maybe not. And markets are forward-looking to where they'll speculate on this before it actually happens. And I think that markets have been doing that for quite a while. Now, people forget that inflation actually peaked in June of 2022, which was when Eith bottomed.

Starting point is 00:12:38 You know, ETH bottomed at 8802 years ago now. And that's when inflation peaked in the U.S., not anywhere else, but I guess US is the main market we kind of look at within crypto. And then since then, things have really been up only for Ethan BTC specifically. But yeah, I think if the market wants to be more risk on, if people want new money to come in for the long tail of assets, it's definitely going to require the quote unquote cheaper money, right? Luser monetary policy. You can't really have this in a tight monetary policy regime because people are like, well, why would I go, you know, speculate on this super risky stuff when I can just buy treasury with my cash and and get like a guaranteed kind of return there.

Starting point is 00:13:15 And especially because inflation has, you know, it's still relatively high and it's still adding to the cost of living. People just maybe just don't have that disposable income to go and gamble and DGEN on this long tail of assets. So that's what everyone I think is thinking about and looking at. But as I said, the market will price this in before it actually happens, like these cuts. And when the Fed starts cutting, I don't know, like I'm not a macro expert. We're going to see if they keep cutting down to what they were before and what inflation does

Starting point is 00:13:40 because it's really just a tricky game of managing the cost. cuts versus inflation and it's a fine line. I wouldn't, I wouldn't like to be in J. Powers's position, that's for sure. I've definitely just noticed a lot more conversation about the cuts over the last like two weeks or so. The conversation has has picked up in like intensity. And I think if there's one theme I've kind of just felt between the ETH ETF that's been approved, but not live and like having super high interest rates that people generally understand are going to get cut. Like there's just an air of anticipation. Like we have like a star. that are aligning, but like they're going real slow.

Starting point is 00:14:16 They're going in slow motion. And so like people are generally bullish, but they don't want to get too bullish too fast because, you know, prices can still move against you because there's plenty of time before these like stars do align. That's kind of like my sentiment.

Starting point is 00:14:28 Yeah, yeah. And I think that's just the, probably the phenomenon of how fast information travels versus how slow these things take to play out. Like we, you know, information travels so fast because of the internet 24-7, everyone's always like hyper-informed. You know, you can be as informed as you want to be.

Starting point is 00:14:42 But then the actual process, the actual reality of it playing out, takes a lot longer, is a lot slower because a lot of these systems are still on the old world. I mean, the Fed is a very, very old institution. These notions of kind of rate cuts and inflation and the macro environment generally tends to move very, very slow not just because of the systems that are in place, but also because it's a huge beast, whereas the information will move at that light speed, quite literally, right? So there's a mismatching timelines there.

Starting point is 00:15:07 And I think that is actually, that explains so much of the market movements and so much of the market sentiment generally. And I recently had my two and a half week break from crypto. I went away and came back. And I didn't really feel like I missed anything. Even though I know within those two and a half weeks, things were happening. You missed quite a lot and nothing at all at the same time.

Starting point is 00:15:25 That's what I'm, yeah, exactly. That's what I'm saying. So like I feel like there's so much news and so much information that gets spread around, but the actual reality takes longer to play out. So you can go away for months at a time and then come back and be like, oh, okay, it played out. And I heard about this, you know, months ago, but now it's finally playing out.

Starting point is 00:15:39 So there is a mismatch there. Yeah. And definitely a plus one to the idea of patience around these things. This is a tweet from Hong Kim, who I believe works at BitWise. So what I, yeah, co-founder, excuse me, co-founder Bitwise, who says, yes, $14 billion in net new flows into the Bitcoin net ETFs in the first six months has been a remarkable success. But people don't realize that the gold ETS had positive and mostly increasing flows for the next eight years after its own successful launch in 2024. So basically Hong Kim saying. Like, it's reached pat ourselves on the back because we got all these fantastic clothes into Bitcoin.

Starting point is 00:16:15 But also, like, the idea, the reason to be bullish is that the flows don't stop coming. Like, we get further flows. And of course, we're hopefully about to get the same thing for ETH. And so, like, sitting on your hands, understanding that anticipation, but also being zen about it and knowing that we're destined to fall howl, perhaps, if you have an ETF behind your asset, is like the takeaway that I'm getting from this. Yeah, yeah. Same here.

Starting point is 00:16:40 I mean, I've been banging the drum about the ETA. being a passive vehicle for a long time now, and that's exactly what they are. They're a passive long-term vehicle. They will keep taking in flows over time. But yeah, it's been very impressive just to see how much BTC has taken in. But I think that was a pent-up kind of demand thing because it's been so long since people have been trying to get a BTC-EF. But yeah, I do think that going forward, BTC and then the ETH ETFs will get those passive

Starting point is 00:17:03 flows in. And it may be disappointing for people if they're looking at the daily flows, which is literally noise. It doesn't matter at all. But if you look out, like, as I said, like you go away for a year and you can, come back, you're going to see all the flows that happened during that time. And then commutally, it will be a lot, lot more than what you expected, I think. Totally. All right, that was the market section. We're going to get into the ZKSink air drop. And of course,

Starting point is 00:17:23 there's a bunch of activity across the layer two space as well. So we're going to get to optimism's brand new fraud proofs, brand new shiny fraud proofs, as well as the rest of the news. So we're going to get to all of that and more. But first, a moment to talk about some of these fantastic sponsors that make this show possible, especially Cracken, our preferred exchange to buy the vanilla Eith, not the ETF kind. So you can go bankless, of course. If you do not have an account with Cracken, consider clicking the links in the show notes to getting started with Cracken today. If you want a crypto trading experience backed by world-class security and award-winning support teams, then head over to Cracken, one of the

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Starting point is 00:20:36 And if you're not a developer, those with staked CTSI can take part in the governance process and vote on whether or not a proposal should be funded. Make sure your vote ready by staking your CTSI before the votes open. ZK Sync introduces the ZK token. Probably one of the more anticipated networks to drop their token, dropped their token. So here are some of the details. 21 billion in supply.

Starting point is 00:21:00 It is being priced on the pre-market on perpetual markets at $36, which is coming in at I think at like an $8 billion network. So pretty hefty, of course, is, I mean, ZK Sync has been one of the oldest brands alongside Ethereum that I can remember. I remember donating for Gitcoin grants, probably actually to one of your Gitcoin grants, Anthony, back in like 2019 using ZKSink Lite. I'm sure used it plenty of times as well because I know you're a big fan of Gitcoin. In the airdrop, 17.5% of the total supply was airdropped in a one-time air drop.

Starting point is 00:21:35 So many other teams, Layer 2's networks have done seasons. ZK Sync is not doing a season. They just dropped 17.5% all at once to almost 700,000 wallets. So of that 17.5%, 89% went to users with on-chain activity, who became eligible for the ZK Sync AirDrop, 11% went to contribute it. So this is like developers, researchers, educators, like off-chain activity that was rewarded with an AirDrop. So yeah, just want to emphasize 17.5% to,

Starting point is 00:22:09 700,000 wallets is like pretty crazy. I think Arbitrum did, I can't remember the numbers out the top of my head. The eigenlayer did 5% with another 5% slated for later. Industry standard has like somehow converge on like 10% plus or minus a few percentage points.

Starting point is 00:22:26 17.5%. Correct me if I'm wrong, Anthony, but that's like the largest air drop in terms of supply that I can remember. Yeah, no, it's the same for me as well. Like it is definitely the largest air drop in quite a while. I don't remember which ones, in terms of major projects, which ones were larger.

Starting point is 00:22:42 I think, as you said, the trend seems to have been, it gets smaller and smaller or gets broken up into seasons. And I've been a big advocate of not just like bigger edge, but like bigger community distribution. And I think that with ZK Sync, the community contribution came out to around 67%, I believe, with team and advisor in investors, sorry, getting about 33-ish percent, which is much better than what the industry standard has been up until near. I think the industry standard tend to have been 50-50 split, where a lot of that would go to a treasury instead of to the users from day one, which I think is actually detrimental to a token because what ends up happening is that tokens open up at a pretty high fully diluted value. Maybe there's only 5% of the token circulating. And then the market has to price in another 95% or up to 95% of tokens coming out over the next few years, which has been a trend that I hope to see reversed in the coming future. I mean, I'm personally trying to be the change I want to see in the world and talking to projects about. this and trying to get them to come over to my belief that, you know, have a large float,

Starting point is 00:23:42 have a big float from day one on the market. So you can have actual price discovery on this stuff. But ZKSync definitely is pioneering it here, which is really great to see. I mean, as I said, 17.5%. Yeah, seems to be the largest in in quite a while. Yeah. So just to really put some numbers in here, investors of ZKSink will own a supply of 17.2% versus the 17.5% that's airdrop to the community that is airdropped, and then the team will own 16.1%. So the airdrop supply is larger than both investors and the team. And overall, if they have this like pie chart that we're looking at, where there's also a supply of a token assembly,

Starting point is 00:24:21 I kind of think that means like a foundation of sorts is like what people would think. And then ecosystem initiatives, which I think is incentivization campaigns for the future. So they're classifying these two things in the community section, which comes out to two thirds of the total token supply allocated to the community both past, present and future, and then one third is allocated to the team and investors. It is pretty nice to see the airdrop larger than investors and teams. It's like part of the ethos of crypto.

Starting point is 00:24:48 It's kind of hard to follow through on. It's hard to convince projects to follow through on. Also, like, it's just not in VC interests either. But ZK Sync just showing the way and covering a path, I think that's pretty cool. Yeah. Yeah, yeah. I think there might be a little bit of a caveat to that generally, not just applying to ZK. sync, but just generally in that, the investor kind of pool of entities in there is quite small

Starting point is 00:25:11 relative to the kind of air drop pool. So for example, you might have like maybe a couple hundred individuals that make up all of the investors, whether they be angels or VCs, and then they have different percentages of the supply. You know, there's usually a lead VC in rounds that take a huge chunk of the supply. So they may have, you know, a huge chunk there. And then you've got the air drop going to tens of thousands, hundreds of thousands of individuals. So it's It's a bit different like that. But it's hard to plan for that. Like even if you were to do an ICO, you know, one whale can come along and just buy up so much of the supply, right?

Starting point is 00:25:43 So the only way to actually get proper distribution is have years worth of price discovery through multiple cycles, like how Heath had, like how BTC had to actually get good distribution. You can't plan for it. It's very, very difficult because there's always the whales that are around, whether you do an ICO or do it as a private investment rounds. And even if you try to get around that, it's difficult, very, very difficult. because there's no on-chain identity yet, right? No one uses on-chain identity products to try and do civil resistance and stuff like that. So essentially you have this game of trying to balance things,

Starting point is 00:26:15 but no one's gotten it right so far, but I feel like ZKSync has done pretty well on the distribution side of things. Yeah, one more caveat about the 17.5% air drop. ZKSink users got 89% of the 17.5% and then 5.8% of the 17.5% was sent straight to like native applications on ZK Sync, which were then like given the mandate to do what you see fit with these tokens, like use it for incentivizations, further air drops

Starting point is 00:26:44 to your community members. And so they did the kind of the model where like in addition to air dropping to their own users, they also air dropped to projects with a mandate to drop to their own users. Okay, so let's unpack how people actually got eligible for the ZKSink AirDrop, because this is where a lot of the tension over the air drop was felt. you needed to accrue one point, and there were six, seven different ways to accrue a point, and you just needed to have one point in order to be eligible for the ZKSink AirDrop. You need to have interacted with 10 contracts on ZKSync era or deposited liquidity into defypire

Starting point is 00:27:20 or used one of the account abstraction Paymaster accounts on ZKSink era or traded 10 ERC20 tokens or held one of the native ZKSinkera NFTs, or on the ZK Sync Lite network donated to a Gitcoin round or at least transacted three different times. If you did one of those things, you became eligible, and then there were further activities that you would have earned to add on a multiplier onto your eligibility. So if you read the blog post, which I highly encourage people to,

Starting point is 00:27:50 if they want to learn more, the ZKSink team shared some of the philosophy of how they wanted to drop their token. Obviously, it's pretty well known that ZKSink is one of the most botted networks like a sibbled networks out there because they have been from the earliest of days very explicit about the existence of their token like the the founders and the team said like yeah there will be a token that's how you decentralized a network we're not going to hide that um as a result that kind of like

Starting point is 00:28:16 was the the magnet towards a bunch of like sibling activity uh and so in their blog post they talked about how they wanted to identify uh and reward people on a human first approach uh so they tried to identify human-like behaviors, such as, like, using smart contracts very early in their existence, rather than trying to, like, hide amongst the crowd. They say humans tend to be risk on. And other, like, criteria just to, like, try and parse out what is a human. After they develop the criteria that would reward humanness, then ZKSink added on a pretty light, light-handed sibling filter as well. So not trying to just filter out

Starting point is 00:28:58 every single Sybil, but just like admittingly letting some sybils in because they still nonetheless over-emphasize rewarding human behavior. Just a very light sybil a filter on the end of things just to like kind of pull out the most egregious ones. And then

Starting point is 00:29:13 and so that was their like philosophy. If you go on to Twitter, you will see a ton of discussion about all of these things. And like Signal is like being thrown all over the place. you can only imagine that if there are Sibble accounts and Sibyl farms, they also know how to Sibble Twitter too. And so deriving noise, which is something that we do at bankless because we cover these things. Like we generally have teams on for live streams.

Starting point is 00:29:38 We definitely cover the token drops. Like getting people's feedback is always very difficult because people are just shouting left and right. That you don't have a lot of time to capture feedback. Overall, like maybe I have my thoughts and sentiments, Anthony. maybe I'll ask you about yours first. Like overall, like, what are your thoughts about, like, the feedback about the token drop? I mean, I think my general thoughts about air drops in general, like just generally, not just specific to ZK Sync is that they are all heavily farmed, right?

Starting point is 00:30:06 And they are all heavily bottered. And it's not just on chain. It's also on Twitter because Twitter has done nothing to curb the usage of bots. They are absolutely rampant on there. And it's naive for people to think that that people aren't taking advantage of this to steer sentiment for certain reasons, right? Like, we saw this play out with Starknet doing. their airdrop. There was just a massive amount of hate because the Sybils didn't get what they wanted. So essentially what they do is if they're already part of a massive kind of operation

Starting point is 00:30:32 running many different addresses to try and Sibble to get more money, they'll go on social media, they'll start flooding the project and then they hope that the project caves and changes the distribution to give them more. And this has happened a few times with other projects. And I think if you do the math on it, this is not small change we're talking about. I saw something on Twitter that there was one entity tied to $65,000. addresses. Now, if you are controlling those 65,000 addresses, you're obviously going to be, you know, smart enough to go on Twitter, get a bunch of bots spun up and then try and see a sentiment so that you can get the team to actually reward you. Because if the team then says, okay,

Starting point is 00:31:07 well, we're just going to give every address that ever used our protocol, even $100 worth of tokens. If you own $65,000 addresses, that's $6.5 million. Right. So just putting the math on these for people to understand the gravity and the incentives here. And when you follow the incentives, that's what you get to. And the bot activity is very, very obvious. As much as they try to act like they're not bots, it's extremely obvious which ones are bots and which ones aren't. And now with AI taking off as well,

Starting point is 00:31:32 they may try to hide themselves a bit better, but it's still very, very obvious. And I've been watching you tweet about this and seeing all the replies to your tweets. And I actually, before likes were private, I went through the likes and I looked at the accounts. 90% of them were bot accounts or hacked accounts because a lot of them will say joined 2015.

Starting point is 00:31:52 but they're hacked accounts. Their accounts that have not been, they don't belong to the original owner. And they've got no mutual follows with me at all. They're just retweeting everything got to do with like airdrops generally. So it's just very, very obvious when you go into it. But now that likes it a private, you can't even do that anymore. So yeah, it's a bit of a mess.

Starting point is 00:32:10 The tweet that I'm showing on screen is a reply to a tweet that I said, I'm collecting feedback on the ZKTink ZK token drop. Please let me know your thoughts. And also if you're in the bankless Discord, you can app me in the AirDrop Hunter channel directly too. and this was the most liked tweet in response to my tweet. And the response about what the changes ought to be would be reduce the allocation for the team.

Starting point is 00:32:32 Lower the highest max allocation from $100,000 down to $25,000 to $30,000. Allocate more tokens according to their fees spent, their active days and weeks and months, their paymaster, which is the contract, native bridge volume, and then light transactions. Give allocation to the minimum, one million to 1.4 million wallets and then multipliers for old active laws. Basically, every one of these suggestions is take away tokens from the fat tail and give it to the long

Starting point is 00:33:01 tail. And this tweet happens to have like an insane amount of like 1.2,000 retweets, like 2.5,000 likes. And if you just go down to the comments, it's just like just not, it's just incomplete. And so it's hard to parse out signal and noise because I will also go into the bankless Discord and I don't want to say that like this ZK, this particular token drop was like unrelentingly like beloved by everyone. There is everyone that has problems with the token drop.

Starting point is 00:33:33 But if you go into the bankless discord, there's like problems that people will say like, hey I think I should have gotten allocation for my wallet that used like Argin or ZK Synclight but I didn't and I'm disappointed by that. there will people say like I I'm very happy with this air drop is good for me and then there are people say like look at these bot farms I'm upset by this but like the feedback and conversation in there is like like coherent and like everyone has a

Starting point is 00:33:57 different opinion and then you go on to Twitter and everyone has the same opinion and it's just like give allocation from the fat tail and and give it to the long tail which is just like to my opinion like if that that's just like oh you want you want Sybil to be rewarded that's kind of like to take Exactly. And it can't be more obvious. I don't understand why people, like, it can't be more obvious. If you want to reward the long tail, right, and you know that there's lots of sibbles there because we have on-chain proof of this, it's very obvious, then what do you think is happening here? And as I said, once you put the math to it, this is not small numbers. This is very much worth someone's time to go out there and steer sentiment if they can get the team to cave and reward them for it. Because then they just go off and, yeah, they've made a lot of money for very little effort, because it's just bots that they're running that are very very readily available. And there are probably like teams that do this, like teams of people where it's become like industrialized for them to do this because the payout is so large. So yeah, I don't know anyone is even doubting that this happens given what we've seen in crypto anyway, like outside of this. The incentives are there to do this.

Starting point is 00:34:59 Yeah, it's totally rational. Even ZK Sync is making like tweets. Here's a tweet that they made for response. Meanwhile, something important you need to know, there is a massive coordinated civil misinformation campaign against ZKSink on X. Run by. thousands of bots and so like they're not even like saying like hey we'll try and like get feedback they're they're just going full frontals like declining the legitimacy of like a lot of these requests I'm out here at edge city as Maraldo which is like a pop-up city kind of like Suzalo and there's a couple of ZK Sync members here and just like the ZKSync team's like working like you know 24-7 just like trying to gather data trying to gather information

Starting point is 00:35:37 and then they put out a tweet today and said like we believe in our choices. We're going to keep with the path. We're not going to change anything. And like maybe they could have had enough data to like be more precise about the distribution of their tokens. But like the DDoS attack that is like a Sibble attack just like robs them of that opportunity. That's what I have been on the receiving end of many like Twitter mobs. It feels like a DDoS attack on your brain. Like it's impossible to parse like signal from noise. Anyways, that was that. I would also expect to say to like tie off this section. The fighting between, like, Sibylers, users, and teams is, and actually a symptom of SEC governance failure.

Starting point is 00:36:17 This is the opposite of what a fair and orderly market looks like. This is like capital being wasted, capital being destroyed. A lot of the Sibylars were like, I'm bummed that I didn't get, like, some of the Sibylers were like, I'm bummed that I didn't get the token, but at least giving my gas fees back. So like, that is like inefficient capital being destroyed. And all of this is because of this like kind of unfortunate air drop paradigm, which we could have had a much. better equilibrium if Gary Gensler and the SEC allowed us, but they don't. And to tie off the token, not to be ignored Tyco, which is a much newer layer two on the scene, a base roll-up. We did a show with them on the Bankless Premium Feed with Justin Drake as our technical coast. If you want to

Starting point is 00:36:57 learn all about Tyco and what a base roll-up is, their token drop also went live. So 5% of the initial token supply, 50 million tokens can now be claimed by eligible users. Tyco, like much more recent project with a much more recent Mainnet, like Mainnet went live just a few weeks ago. Like How did it like get to a token so quickly? Part of that answer is a base roll-up needs a token to stake to be a part of the functionality. So they needed a token to go out there to be live. Anthony, any comments or thoughts on Tyco? Yeah, I mean, it's just I guess like another air drop of a big layer two or layer two generally.

Starting point is 00:37:31 As you said, Tyco is definitely newer to the ecosystem. But what interests me the most about Tyco, probably not their token, but the fact that they're a based roll-up, which is something that I've been doing a lot more research into the last couple of months, just base roll-ups generally and pre-confirmations and stuff like that, which seems to be like the end game of L2s. Like if we were to look five years out, that's kind of what I think it's going to look like for most of the L2 ecosystem. But yeah, as you mentioned, like they need a token to achieve a lot of their goals around

Starting point is 00:37:56 decentralizing, around getting people to run the infrastructure as incentive mechanisms. So yeah, pretty standard air drop, I think, from them. It wasn't anything groundbreaking from what I saw. But, yeah, I mean, people knew this was coming as well, I think. It is worth noting that the claim window for Tyco, ends July 5th, so that's relatively quick. I think the ZK Sync claim window is open until early next year, so you have a pretty big window of time.

Starting point is 00:38:20 But nonetheless, you can check your eligibility for both Tyco and ZK. Sink using bankless claimables. So if that is a tool that you use, which you should totally should, you can use that, and it'll tell you exactly how many tokens you got or did not get. Okay, back into the optimistic roll-up world. Optimism, fault proofs, which are the same thing as fraud-proofs, and stage one have arrived. Open source permissionless fault proofs are live on OP mainnet,

Starting point is 00:38:46 and with them the OP stack arrives at stage one decentralization, a major step forward for the super chain. Just to really lay down what fraud proofs are, fraud proofs are the mechanism in which we remove the multi-sig from layer two's. So we have currently multisigs on layer twos, on some layer twos, in order to upgrade the chain or like maybe fix a bug. but of course that also opens up these networks towards like exploitation like you can exploit a network with multi-sigs why hasn't any of the networks done this well because of course they're building the

Starting point is 00:39:19 things but fault proofs battle tested fault proofs are the big step to getting a multi-sig off of the security model for many of these roll-ups and optimism mainnet the opi mainnet has launched and deployed their fault proof so they are in production they are working as intended which has earned optimism to green new slices on layer 2B. So data availability, state validation, sequencer failure, and proposer failure are all green slices on layer 2B, leaving the last one, the exit window, which is just a timer on network upgradeability. And these are the things that are risks to layer 2s and optimism has four green slices out of five. Pretty big day for the OP stack, the optimism community, for the Ethereum roll-up landscape.

Starting point is 00:40:06 Sassel, give me your thoughts, your sentiments. Yeah, yeah, a very, very big day, especially for optimism who have been building this for quite a while now. And for those who may not know, there are two major optimistic roll-up kind of frameworks live today. There's the OP stack, which runs optimism and base and a few other networks out there. Then there's the Arbitrum stack, which is Arbitrum 1 and their orbit chains and kind of like L2's L3 sort of thing there.

Starting point is 00:40:30 And they both use fraud proofs for their security mechanisms here. Now, for me, the most exciting thing about L2's, generally is that they run on a secure L1 in Ethereum and then they can have the optional escape hatch window where essentially what that means is that if the L2 is down for whatever reason, you can and goes offline or something happens, you can still get your funds back on the L1 by doing a transaction on L1 to essentially escape your funds out of the L2. That to me is one of the most, if not the most important properties of L2s. And that needs fraud proofs to be able to work. And that's exactly what, you know, OP stack has now. And this exactly what Arbitrum 1 has.

Starting point is 00:41:06 has, but optimism went a step further by making it permissionless out of the gate, whereas arbitram is still permission. So they have 14 whitelisted actors that can submit these fraud proofs, whereas in optimism's case, anyone can do it. Now, I know that arbitram is going to move towards permissionless fraud proofs as well, but as you mentioned, this is what this kind of pie chart is all, or this pie representation is all about, filling in the green there. There are sometimes yellow. I believe yellow is when it's permissioned, and then there's red where it just doesn't exist at all. And once we have all green across the board, that's when they can move to stage two, which is really the endgame for these things.

Starting point is 00:41:39 And the number one thing I like about these roll-ups continuing to progress through these stages is that it kills the fud that roll-ups aren't going to decentralize. Like that's a big piece of fud that a lot of people have been using for a while now saying that, you know, roll-ups and L-2 is always going to be centralized. They're never going to be able to decentralize. They're never going to be true kind of blockchain, so on and so forth. But we're proving them wrong each and every day. And every time we do something like this, it proves them wrong.

Starting point is 00:42:04 And I strongly believe that there are very, very strong incentives for these chains to decentralize. Centralization is a huge liability. It means that a government agency can come to and force you to do things using your centralized power. And as a builder of these networks, you do not want that power because you are trying to essentially be as detached from it as possible or from the operation of it as possible and trying to create a decentralized community around it. So if you want that to happen, you need to get to stage two. And I don't think anything is stage two right now. Arbitram said that they want to be stage two. Well, nothing that has usage.

Starting point is 00:42:37 There are some that are very, very small that are stage two. Oh, deadly. No, no. If you go to some of them, like, they really don't have much usage compared to the big players, right? Like, kudos for them for being stage two. But I don't think it really means anything if you haven't got any usage, right? Because you're not really giving any value to anyone. But, you know, Arbitrum 1 or Arbitrum has committed to being stage 2 at the end of this year,

Starting point is 00:42:59 which I hope to see a play out. And I'm sure optimism isn't far behind them. And because a lot of the change, are built on the development kits that these ecosystems put out, automatically they get to be, they get to upgrade to stage two as well once they've implemented that. So for example, base will be able to go to stage two or even stage one now because OP stack has those fraud proofs implemented, which I think is really cool because it means that we're not reinventing the wheel every time. We're allowing this community to come together, build these things out,

Starting point is 00:43:26 progressively decentralized and that has downstream effects on a bunch of other chains as well. Yeah, I think that's really the point of emphasis that I want. want to drive home. Since so many chains use the optimism OP stack, they just get to take these fraud proofs and put them right into their network. So base, as you said, blast as well, which has $3 billion on it, Mode Network, which has $650 million on it, Bob, Zora. These are all OP stack forks, right? And so they will just be able to take these fraud proofs and put them right into their network, which is kind of actually the point of the OP stack framework and why you would use the open source piece of software, because then you get the benefits. All of these networks,

Starting point is 00:44:02 BASE didn't have to do false proofs. Actually, BASE is a core contributor of the OPE stack. So actually, this is their technology, but like anyone else using the OPE stack gets the false proofs. They all work together as a collective. I think that's the overall point here,

Starting point is 00:44:16 is that we're not just decentralizing the tech. We're decentralizing the development of the tech, which is exactly the Ethereum philosophy, where Ethereum Layer 1 development is very, very decentralized. And specifically, optimism has always been about following that philosophy, following that, basically mirroring

Starting point is 00:44:31 what happens on Ethereum L1, and I think that they're doing that. I think they're doing that in both, you know, in practice and in theory, which is great to see. Vitalik, of course, gave his congratulations to optimism saying, welcome optimism to the club of stage one plus layer two's, meaning layer two's where proof systems actually have teeth. I'm looking forward to seeing many more layer twos join this club soon, especially some ZK ones. And then he follows up with, I just have to put the meme of the week here, so we're getting the meme of the week in the middle of the show. Ethereum where yesterday's FUD is today's solved problem, starting with the very first FUD ever, which was Ethereum will never launch.

Starting point is 00:45:08 That was 2014 FUD. Ethereum will never get past the Dow fork. The merge will never happen. Layer 2s will not have low fees. Layer 2s are just multisigs, which was the most recent door that the Reaper just laid. And then the next door of Ethereum is cross layer 2. U.X is two fragmented, running a full node takes too much space, and MEV centralization and builder censorship.

Starting point is 00:45:28 So these are the next things that's on Vitalx Horizon to go slay. Yeah, and we just keep slaying him. That's the point, I think. The trend is what you want to be paying attention to is that all of the fud, or at least 99% of it, has been completely and utterly wrong or has been right for like a short period of time. And I can people say the merge will never happen? Well, technically you're right until the merge happens.

Starting point is 00:45:49 And then you're just completely wrong, right? But the thing is, you knew these people were wrong years in advance because you saw that the merge was happening on test, on Shadow Forks, and there was just no way it wasn't going to happen by old logic and reasoning. But of course, you know, Ethereum has its haters. A lot of them, unfortunately, but they keep getting slayed. And I'm glad the Grim Reaper is on our side. All right, everyone.

Starting point is 00:46:13 Coming up next, Eigenlayer gets a brand new competitor on the scene and makes a very big acquisition. A big moves in the world of restaking TerraForum Labs, the creators behind Terraluna, agree to settle and pay the SEC $4.5 billion. Where is it getting the money from? We got Pleaser Dow and the Wu-Tang album. We got Crypto the Game Acquisition. We got an alchemy update. All of this and more.

Starting point is 00:46:35 But first, a moment to talk about some of these fantastic sponsors that make this show possible, especially Mantle, one of our Layer 2s, who definitely uses Optimism Technology under the hood as well. If you do not, if you haven't checked out Mantle, you probably should. It's pretty fun things to do on there. You should go check it out. There is a link in the show notes. New projects are coming online to the Mantle Layer 2 every single week. Why is this happening?

Starting point is 00:46:53 Maybe it's because Mantle has been on the frontier. of Layer 2 design architecture since it first started building Mantle DA, powered by technology from EigenDA. Maybe it's because users are coming onto the mantle layer two to capture some of the highest yields available in Defy, and to automatically receive the points and tokens being accrued by the $3 billion mantle treasury in the Mantle reward station. Maybe it's because the Mantle team is one of the most helpful teams to build with,

Starting point is 00:47:16 giving you grants, liquidity support, and venture partners to help bootstrap your mantle application. Maybe it's all of these reasons all put together. So if you're a dev and you want to build on one of the best found in crypto. Or your user looking to claim some ownership on Mantle's defy apps, click the link in the show notes. So getting started with Mantle. Taking self-custy of your crypto is one of the most important things you can do on your bankless journey. It's also one of the hardest things to get right with huge consequences if you don't. If you want help going bankless, talk to Casa. Casa helps you take custody of your crypto assets so you don't have to wonder whether you're doing it right.

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Starting point is 00:48:20 Click the link in the description to get started securing your generational wealth. SELO is the mobile first and EVM-compatible blockchain that's built for the real world and designed for fast, low-cost payments worldwide. Driving real-world use cases like Opera MiniPay, one of the fastest growing Web3 wallets with over 2 million users across Africa. SELO is seeing a meteoric rise with over 375 million transactions and a million monthly active users. Not to mention Tether and Circle just deployed native USD and USC on SELO, supported by leading exchanges like Binance. And now, Sello is looking to come home to Ethereum as a layer two, with a game-changing proposal. core contributors at C Labs aims to leverage optimism's OP stack pioneering and transition as the biggest L1 to become a layer 2, with TestNet arriving as early as summer, 24.

Starting point is 00:49:03 With the Cello layer 2, gas fees will stay low and users can even pay for gas using ERC20 tokens, including native USC and USDT, sending crypto to phone numbers across wallets using social connect. But Cello is a community governed protocol. Make your voice heard in the Cello forum to shape the future of Ethereum. Follow at Cello on Twitter and explore the ecosystem built for the real world on Cello.org slash quest. And we're back with a tweet from Sazel, who's also on the show with us. Petra, the next Ethereum network upgrade is shaping to be one of the biggest in Ethereum's history.

Starting point is 00:49:32 The confirmed EIPs include EIP 7702. I'm not going to list all of these off. Sazel, maybe you can kind of walk us through some of these EIPs and what significance they have and why people should care. Yeah, so maybe I should kind of just touch on the ones that I find to be the most exciting and the ones that probably have the most user-facing effects here. So as I said, Pectra, the next Ethereum network upgrade, which I'm speculating will go alive in Q1 of 2025, is shaping up to be the biggest in Ethereum's history because it includes so many things. And I think originally they started off, they being the core dev, started off of wanting to do a relatively small fork to get it out, you know, maybe faster. But there are so many things that people want to get into the network that are pretty critical, mind you, that they're pretty important, that it's now become this kind of mega fork.

Starting point is 00:50:17 And the things that I'm most excited about, there's, I guess, like, probably two or three of them. So number one is EIP 7251 or otherwise known as MaxEB. So what this allows people to do is stake more than 32-Eath per validator, which essentially means that I think the latest I saw was up to 2048-Eth per validator. So if you're running 10 validators today because you're staking 320th, in the future you'll only have to run one validator with 320Eth on it. And everything would be the same. Your block proposal chance will be the same.

Starting point is 00:50:45 You'll get the same kind of rewards generally. But this is a huge unlock for the network because it basically allows us to collapse the amount of validators live on the network while keeping the same security, both economic and security via how many node operators there are. But we take a massive load off the network, which enables us to keep scaling Ethereum as a network generally, which to me is definitely the most exciting part of that. And because of that, it means we basically get to keep scaling up L2s with something like PIRAS, which is what I've listed here as well.

Starting point is 00:51:14 So peer das is essentially the first implementation of data availability sampling, which is part of the full kind of dank sharding roadmap if people have heard of this. And essentially what this allows us to do is scale up blobs even further, which means even cheaper fees for L2s and cheaper fees for a longer period of time. For people who've been paying attention lately, they may have noticed that blob usage is going up, which means once they actually reach their capacity, fees will start going up. And that means the L2 fees will start going up. Now, in order to, yeah, I think I put a tweet about this just very recently. Now, in order to rectify this, or in order to keep scaling up,

Starting point is 00:51:49 there are two different things we can do. We can increase the size and or count of blobs, which basically gives us more capacity, and we can do peer das and in the future, even more stuff around data availability charting slash sampling there, which allows us to scale up even further. And without getting too technical, the TLDR is basically cheaper fees for longer,

Starting point is 00:52:08 for L2s, more sustainable for L2s, and a continued kind of good user experience there. But as I mentioned, like Max CBB actually plays into this, as well because it takes load off the network, takes load off the validators, which allows us to do this in a safer way. And I think the last thing I'll say here, the last thing to be excited about is EIP 7702, which replaces 3074, I believe it was, which is the account abstraction EIP, which essentially makes normal Ethereum accounts. We refer to them as externally owned accounts or EOAs on the same level as smart contract or smart wallet accounts there. Now, there was a bunch of drama

Starting point is 00:52:43 around 374, around how it was insecure. Then Vatelat came along and said, hey, why don't we just do it this way with, you know, with 7702. And essentially that is the EIP that is now going into the network there. So a lot of stuff to be excited about. That's just the tip of the iceberg, really. But those are the things that I'm most excited about there. Yeah. So there's nothing like overly massive.

Starting point is 00:53:01 Like we're not merging. We're not doing EIP 1559. But like there's a lot of like pretty like more than incremental upgrades to the network. So a lot of medium. Pyrdash is definitely massive. I think. I think it's like. Yeah.

Starting point is 00:53:16 Result of years worth of research and dev to get us to that point. It's basically on the same level as blobs, I think, in terms of what it represents for the network. But yeah, nothing like the merge. I don't know if we ever get something like the merge again. Yeah, and it would be like kind of bad news, actually, if we did. Yeah, yeah, something went wrong, I think. Well, we had to like fix something critical. Hopefully we'd ever get that.

Starting point is 00:53:36 Yeah, yeah, we'd ever get that. Yeah, yeah, I agree. Peer Das is just like more blob space, right? And especially with that illustration that you had on your tweet where, like, we're starting to approach some sort of like fee structure where people are actually going to have to pay, have some sort of contention for blob space. But this is just what the future of Ethereum is. Like, we're going to make it have a lot more scale, which we did when we had blobs. And then we're going to fill up those blobs. And then we're going to have like another 3x increase of supply.

Starting point is 00:54:09 That's how Mike Noider said it on our episode with him. And so we'll probably have a blob market show up. maybe in the next like one to three months and then there will be like a pretty healthy like people are going to have to pay for their blobs rather than blobs being free and then like you said run sometime around Q1 if that estimation is correct we're just going to have more blobs and then transaction can go be free again and then we're going to repeat that process all over again yeah yeah and the thing is this is extremely bullish it basically means that the entire ethereum scaling bro map is working and Ethereum is growing like I would be bearish if blobs remain free forever

Starting point is 00:54:43 Like that wouldn't be a good thing. It would mean that no one's really using them. Or maybe we scaled them up so much that there's just so much capacity. But I don't think so. As you illustrated, it's a cat and mouse game of we scale up, people fill the space up, we scale up some more. And it's kind of a never-ending game. But what blobs allow us to do is basically keep scaling up in a relatively easy manner.

Starting point is 00:55:04 Without him to make substantial fundamental changes to the network, it's literally just a tweak. Like increasing the count or size of blobs is a one-line code change. It is not a big deal. But it does have downstream effects in that it adds more load to the network. And that's why we do other things like MaxEB, which takes load off the network. So we're essentially doing a swap here. It's like, okay, well, let's take off the load from the validators.

Starting point is 00:55:25 And let's put that, sorry, from having too many validators on the network. And then let's put that load back on the network via blobs, which actually serves a purpose and actually gives value to people. Moving into the world of restaking, symbiotic has come out of stealth. Symbiotic is, they call themselves a permissionless flexible reststand. staking. And so this is permissionless in terms of governance. So I think symbiotic is positioning themselves as a governance minimized, governance reduced restaking platform. And then flexible implies just not just ETH. EGen layer, of course, has ETH and ETH derivatives. Symbiotic is going for,

Starting point is 00:56:01 I guess, everything else. And so they have opened up what is pretty similar. Like if you're a yield farmer out of Eigenlayer and Eigenlayer points farmer, then a pretty similar thing going on with Symbiotic, you submit capital, and I could only imagine this would result in the collection of a token at a later point. Symbiotic has been in stealth for a pretty long time now. This is a paradigm and cipher fund-backed project. So if you've been paying attention into the re-staking world, you've probably caught wind of this. And a cipher fund is part of the, like, not officially, but just like it's a bunch of Lido members. And Lido is also, of course, a paradigm incubated, or maybe not incubated, but just like alignment with paradigm.

Starting point is 00:56:45 And so this is like coming out from that corner of the world. Any thoughts for reflections, Anthony? Yeah, I mean, I'm glad to see Eigenlayer getting competition across the board. There's two others that I know of that have come out recently, like restaking platforms. Carrack and nectar. Yes, yeah, those two, yes. So there's four. I mean, I think there's going to be more because obviously the opportunity is so big.

Starting point is 00:57:04 It's the same, it's the same thing that happened with Lido, right? People saw Lido getting so big. And like, why is Lido so big? we can make new liquid staking platforms and restaking platforms that chip into that, which has happened. So when the economic incentives are there, people will come up and come with competition. But I do think that we've kind of jumped the shark here a little bit. Like for me, restaking really only applies to like an actual staked asset on a network like Ethereum, like Eath being staked and then restake.

Starting point is 00:57:28 That's where the actual economic security comes from. If you're restaking, like some people are saying, oh, we'll restake stable coins. Like, what? like I'm just a bit a little bit confused here. Like, you know, what stable coin is just staking for the first time? You're just taking. Yeah. Yeah.

Starting point is 00:57:44 Yeah. And even if you are like staking a stable coin kind of LP pool or, you know, token or something like that, it is not restaking as is traditionally been defined. It needs to be securing something, right? So I think from that perspective, it's been a little bit weird. I don't know what symbiotics approach is here. But I understand that these other projects need to add more assets because they need to be competitive with eigenlayer.

Starting point is 00:58:06 If they just said, oh, we're doing E3 staking too, people will be like, okay, I'll just come and farm the token and then leave once I've done that and just go back to wherever I want from that perspective. But yeah, it remains to be seen how this shakes out. I think I may have said this on bankless, but I've definitely said it on my show. I think the end game may be that restaking as a primitive just gets enshrined at the protocol. And then essentially what happens is that all of these projects are just competing on the kind of interface front for the users. It's not on the restaking front. but I don't know if that's going to end up happening because there's already so much money sloshing around

Starting point is 00:58:39 so many different incentives around with this right now but as I said at the top I'm still very glad that Eigen layer has competition. I definitely did not want Egan layer to exist just on its own because monopolies no matter how aligned they may seem are not good for anyone. Right, yeah. And in the murmurings that I just hear from my different corners

Starting point is 00:58:56 in like AVS circles and LRT circles and just like re-saking circles like symbiotic has like chops to them like technical chops to them. So I think the perception is like this is probably the most valid, legit competition to EigenLayer that's like shown up on the market just because like, I mean, paradigm is very technical. Cyberfund with their Lido experience, they know what they're doing with like liquid staking stuff. And so let the games begin. Definitely.

Starting point is 00:59:24 Moving on to the world of Eigenlayer. Eganware made an acquisition of Rio Network. Now, Rio Network was going to be an LRT project. it was going to be like one of the most like conservative and risk off and just like LRT networks that was going to be out there that that was the way that Rio had been pitched. And then it turns out IgenLayer just decided to buy them. They are not turning them into an LRT. So there is no eigenlayer enshrined LRT.

Starting point is 00:59:53 They're using Rio restaking as kind of trying to implement like a spec or like an example model of an LRT. But then also Allen and the Rio team are also just. kind of like Chad operators. So it's in addition to acquiring some of the technology of Rio, they're also acquiring some of the talent as well. And so congratulations for Rio for getting acquired before even launching your network. And then also congrats to Eigen layer for capturing some of the best talent that's out there.

Starting point is 01:00:23 Any thoughts on this, Cecil, before I move on? Yeah, just a classic aqua hire, right? And a good one at that as you just explained there. And this is, I guess, going back to what I was saying earlier about. how I feel like all of these restaking platforms, they're not competing on the actual restaking itself. They're competing on the BD, right? The distribution, the integrations, the market. Like, it's very true for a lot of things in crypto where they start off being a primitive, but then realize that the primitive is worth nothing without the BD and marketing and community

Starting point is 01:00:50 and, you know, integrations and stuff like that. So they actually move most of their operations to that. And the primitive ends up falling into the background. I think that's exactly what's going to happen with restaking. You know, the restaking aspect itself is table stakes. And then if you are going to be the dominant restaking platform, you need to be doing the BD, the partnerships, the integrations, which is exactly what eigenlayer, I think, has been doing from day one. And now they're just doing an even bigger way by doing this aqua hire of Rio restaking, which allows people to use that tech within the eigenlay orbit. Do you remember radar relay, Anthony?

Starting point is 01:01:24 Yes, that's an old name, but yes. Testing your Ethereum history. Yeah, so that was also an Allen project. Alan is the founder of Rio, who now, who now, who now, who now, is part of the eigenlayer team. So, yeah, Alan's been around the Ethereum ecosystem. So he's seeing a thing or so. Once again, yeah, congrats to the team.

Starting point is 01:01:41 But we are not done with acquisitions. Crypto the game. Do you remember Crypto the game? Anthony, did you play? I didn't play, but I think we had a little bit of a debate about this a little while ago, where I kind of followed the incentives and was like, I don't know how this just this kind of like plays out long term, but we'll see. But yeah, I know of it.

Starting point is 01:01:59 I haven't played it. Yeah, so crypto game, it sucks up a lot of time. So if you're a busy dude, I've heard of people, like, lose their, like, sense of reality because they go down the crypto game. It's World of Warcraft all over again. It's World of Warcraft, yeah. It is a crypto reality show, a reality game show that's happening in real time in the interwebs, right? On Telegram, in Zoom. But then also, once a day, there's, like, a hunger game-like game that is played, something you have to go do.

Starting point is 01:02:27 Scavenger Hunt on the Internet, scavenger hunt in real life sometimes. but then at the end of every single day there's a process of elimination and so it's both like kind of hunger gamey where there's a game every single day but it's also squid gamey where there's like it starts off with like a thousand people

Starting point is 01:02:43 and there ends up being one winner to win I think somebody won like 84-Eath at the end of the 10-day game anyways this was acquired by Uniswap of all people and so they say crypto the game tweets out excited to share that we have been acquired by Uniswap we're forever grateful to our players.

Starting point is 01:03:01 We now have the full voice of Uniswop labs behind us and we're going to use it to make season three the best one yet. And of course, Uniswap also puts out their blog posts as well. And so Uniswap's just saying they're investing in on-chain experiences. And so kind of like an interesting hire out of Uniswap. Like it's obviously something totally different than the Uniswap Exchange. David Phelps, I know who runs Joke Race. his take was that it's just very obvious that user endpoints, like user experiences is one of the

Starting point is 01:03:35 most valuable places to be. And so what Uniswap is really doing is finding like where an app that users will use and just like having that be a part of your brand. So whether it's about the Uniswop AMM or not, that's kind of the play there. Yeah, yeah. I mean, I totally agree with that. I think that we need more on-chain experiences that don't have to do with pure speculation. You know, you could argue that some of this is speculation. As you you mentioned, there is a price pool, so people are speculating on that, but there is a huge social aspect to it. And I think that the social experiences are probably some of the most important and under explored within crypto. So if we can get more of these things where they mix that,

Starting point is 01:04:11 you know, that financial kind of carrot on a stick with the heavy side being the social side of things, we can get more interesting stuff here. And I think there's been other experiments as well, like, you know, Farcaster, for example, is a big one, right, mixing the kind of social side of things with the financial side of things. But I think crypto, the game, is unique from what I've seen of it and what I've heard about it in that it definitely feels like Survivor on crypto. I don't know if anyone has watched Survivor before, but it definitely feels like that, but in a much more cutthroat way, because you can be anon, right? Like, you don't have to dox yourself. And when you're anon, you can do a lot of things that you otherwise

Starting point is 01:04:44 wouldn't do if you were doxed. So it's a very interesting dynamic. Yeah, I have been told, and this probably goes for you as well, Anthony, that we would probably not do very well playing the game because we would just be eliminated too fast because like, oh, our targets on our back are massive. Like, oh, David from Bankless,

Starting point is 01:05:02 Anthony from the Daily Way, get them out of here. Like, vote them off the island. Like, they can't be here. Yeah, but we could join as an anon, right?

Starting point is 01:05:09 Like, I don't know where. But I've also heard that if you join as an anon, you need to like make up a backstory. So if you come in as a peer anon, that is also a target on your back. So you need to be like, you need to be like more than anon,

Starting point is 01:05:22 but not like, you know, crypto famous. Like somewhere right in that media. Like you can't be James. because everyone knows who you are, right? Even as an anon, you're like, you're too famous of an anon, so you'll probably be eliminated as well. I heard this one story of a guy or girl was playing crypto the game, and they're in Telegram, you're like squatted up with like four or five people or something, and then your squad kind of like

Starting point is 01:05:45 rotates as the game goes. But like some guy went on like a run, and so he was gone from an hour. And so his team needed to vote someone off. He's like, this guy is not taking this seriously. we have to vote this guy off because he went on a run. Oh man. Yeah, no, I would definitely lose this.

Starting point is 01:06:02 Within like the first five minutes. I'm like, sorry, guys, I've got to take a break. Taking a break, how dare you? You're off the island. Get him out of here. Oh, it's great. That's great. Anyways, season three, it's coming, of course.

Starting point is 01:06:14 So this is going to be the first season where Uniswap is the operator of Cryptoglid the game. I did an interview with Daniel. So if you want to learn a little bit more about that episode is in the Bank of his art. archive. It's also on Twitter as well. Okay. This one's pretty cool. This one's close to my heart. Wu-Tang Clan's album Once Upon a Time in Shaolin is turned into an MFT and is going to get released. There is a ton of lore behind the Wu-Tang one of one album once a time in Shaolin. I don't

Starting point is 01:06:43 have enough time to go into it. But basically, Wu-Tang album, one of the most famous rap groups of all time, made an album that they only made one of, didn't release it. This was in 2014, so like pre-Spotify era, right? They made it into one CD and then they sold it for $2 million to Martin Screlli, who had his asset seized because he went to jail for securities fraud. And that was put up to auction by the U.S. government and was bought by Pleaser Dow. And the album is not allowed to be released until the year 2102. But I think we're going to do an episode with the Pleaser Dow. And they're actually accelerating the release date for every fractional NFT. that is bought. So if you buy

Starting point is 01:07:26 one fractional NFT, you will move up the release date of the one of one Wu-Tang album by 88 seconds. 88 seconds. So you bump it up. And so if once enough of these things are bought, then the actual album will be released and all owners of the

Starting point is 01:07:41 very cheap NFTs will be able to listen to it. These NFTs are being issued on base. I think it's a cool story. I can't again do this story justice in this quick amount of time here, but it's very along the line, the ethos, of just like one-of-one NFTs cultural artifacts, distributing a power to the masses, direct artists to consumer relationships with no middle man.

Starting point is 01:08:03 And it's pretty cool to see this coming to NFT format. Any comments here, Anthony? I can safely say this is one thing that I have absolutely no idea about. Like, I know a lot of things in crypto. I know a lot about a lot of things, but this definitely not because I don't listen to the Wu-Tang clan, whatever they're called. It's not my style of music. And I definitely don't pay too much attention to the NFT side of crypto.

Starting point is 01:08:28 It's just not something that I'm too interested in. So yeah, I'll take you a word for it on how interesting of a story this is. But I do like the mechanism of buying an NFT, reducing the time until it's released. That's something cool and something pretty uniquely enabled, I think, by crypto. Yeah, so there are been 5,800 unique collectors and 145,000 shares of this thing. So one NFT is a share of the album. So governance rights over the album. And so if you want to take part in that

Starting point is 01:08:58 and help release this thing, I've actually listened to this. You see you, there are like semi-frequent listening parties album four. All right, so excuse me, song for is my favorite song. I couldn't tell you what the name of it is

Starting point is 01:09:09 because I don't think there are names. But yeah, pretty cool. Anyways, moving on. Terraform Labs, Doquan, agreed to pay the SEC a confirmed $4.5 billion dollars in a civil fraud case. I did not know that Terraform Labs had $4.5 billion, but when the headline out of CoinDust says, agree to pay the SEC a confirmed $4.5 billion, that tells me that

Starting point is 01:09:34 there's $4.5 billion somewhere. And that makes me say, in like WTF, bro, like, where did that $4.5 billion comes from? And why does the SEC get to get as a fine? There are plenty of people who had like money get literally burned on fire, maybe they should get the money. What are your thoughts and sentiments here, Anthony? I mean, I completely agree with you. I think that the fact that they have that much money to begin with is a shock to many people. I'm not sure where it would have come from. If anywhere, maybe it came from that BTC that they were stockpiling in order to try and

Starting point is 01:10:07 kind of use it as collateral to prop up their stable coin. Maybe it came from there. I'm not sure. I don't even know if it's detailed in the case of where this money actually came from. But I agree with you. It should not be going to the SEC Mafia as protection money, really, right? It should be going to some of the victim. Like, it would be kind of difficult to know who to give it to, I guess.

Starting point is 01:10:26 But I think that there are a lot of different victims here and just giving it to them in any capacity is way better than giving it to the SEC. Because giving anything to the government, I mean, they're going to just spend it inefficiently to begin with. And no one is really protected here. Like, the SEC's mandate is to protect investors and to help them and make them whole when they can. can. If they just keep this money for themselves, they haven't made anyone a whole, they haven't helped anyone. Yes, Doquan and some of the other Terraform kind of people, labs people got their comeuppance, which is great. Like, I do enjoy that. I do enjoy seeing Doquon get punished for his, you know, his stupidity and his crimes. But at the same time, I don't enjoy the $4.4 billion,

Starting point is 01:11:07 $4.5 billion that is going to the SEC instead of going to the people who are actually hurt. Like, what are we doing here? Are we just inflating the SEC's kind of coffers? Yes. And that's not the way it should be. Yeah, absolutely not. Like, if you just did a random air drop of, like, USC onto, like, addresses, Cosmos addresses that had Luna at the time of the collapse, like, sure, not a perfect way of reparations,

Starting point is 01:11:32 but, like, way better than, like, giving it to the SEC. But, yeah, I mean, the SEC has proven itself to be, like, you're not really in the interest of people, very much in the interest of himself. One cool release this week. comes out of Alchemy. Alchemy is an RPC provider, quite like in Fura,

Starting point is 01:11:50 like one of the biggest ones, and they are introducing roll-ups. So they want you to issue a roll-up issue, deploy a roll-up. So kind of like a conduit in the roll-up as-a-service provider. This is the roll-up as-a-service-category. They are becoming a roll-up,

Starting point is 01:12:07 a place to deploy roll-ups. So if you want to build, launch, scale your layer two, Alchemy now has like a roll-up distribution platform hosting platform. Yeah, hosting platform. That's the right word for it. And so pretty cool.

Starting point is 01:12:23 I'm not calling it a pivot because I'm sure they're definitely doing their RPC stuff too. But it's like an adjacent vertical that they are heavily leaning into. So pretty cool announcement out of Alchemy. Yeah, definitely. And just continues the trend of the modularization

Starting point is 01:12:38 of Ethereum, right, where everyone gets us to basically build on this stack build in a modular way and that opens it up to a Cambrian explosion of innovation and of product offerings. There's not just like one kind of company or one thing that offers those products. It's a multitude of different entities that offer these products in different ways. And the market, the free market chooses what they want to use and choose what they don't want to use, which I think is very, very bullish overall. Totally. And then raises of the week, we had a gargantron raise. Paradigm has announced their third fund, $850 million venture fund, focusing.

Starting point is 01:13:13 on crypto projects at the earliest stage. Of course, they had to actually add in crypto there because of that one moment where they actually took crypto off the website and everyone took that extremely personally. So congratulations to Matt Huang and the entire Paradigm team. $850 million is nothing to scoff at. And of course, Paradigm is like one of the most revered, well respected, technically strong VC funds in crypto. Any thoughts or additional comments?

Starting point is 01:13:41 No, I mean, no real thoughts. It's not surprised at all by this, as you mentioned, like, Paradigms big already and being big gets being bigger in venture, especially if like you get money in from LPs that are basically like, oh my God, like there's so much going on in crypto right now. I need exposure to it. Who do I go with? I'm going to go with one of the most respected and, you know, well-performing funds, which is is paradigm, definitely.

Starting point is 01:14:02 I think they're definitely up there. They have made some, I guess, maybe confusing investments over the past couple of years that people may have looked at. But at the same time, if you just follow VC incentives generally, that's what it kind of points to it. Like when you have that much money to deploy, you kind of need to find projects to deploy it to. There's not actually enough quality projects out there

Starting point is 01:14:20 to fill billions of dollars of VC money. Like that doesn't exist. So you need to be going to maybe more riskier project, maybe projects you otherwise wouldn't have funded and so on and so forth. Yeah, you can definitely invest faster than we can build quality projects. And that's just true across the entire crypto VC space. Anthony, I want to thank you so much for subbing in for Ryan who's taking a well-earned break. If people just loved the sound of your voice and they want to hear more of it, where should they go?

Starting point is 01:14:50 They should go to The Daily Gway on YouTube or just go to my Twitter profile and you can find all the relevant links there. And I've also restarted doing episodes of The Into the Ether podcast for the OGs that remember that podcast with Eric Connor every week now as well. So yeah, people can go follow both of those things if they want to. But the Daily Way is just me. You know, every day, almost every weekday. I tried to make those episodes happen, talking about Ethereum, giving the latest updates there. Specifically, with a heavy focus on Ethereum core protocol and layer two. So if people are very interested in that, then yeah, feel free to follow the show.

Starting point is 01:15:20 Yeah, bankless listeners as well who are familiar with Anthony, you will know we bring them on quite frequently because he does a bang-up job covering Ethereum very deeply, very technically. Bankless, like 100, level, 200-level, 300-level, 300-level, daily-gway, 300-level, level, very deep Ethereum, and definitely something I have straight into my ears every single morning when I wake up and I get Sassel's Daily Gway podcast right into my ears. So thank you for doing what you do, my brother. Thank you for having me on. It's been joy and yeah, I look forward to next time. Absolutely. Bankless Station, you guys know the deal. Crypto is risky. You can lose what you put in. But hey, we're headed west. This is the frontier. It's not for everyone, but we are glad you are

Starting point is 01:15:58 with us on the bankless journey. Thanks a lot.

Bankless - ROLLUP: ZkSync Airdrop | Optimism Fault Proofs | Pectra Ethereum Upgrade

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