Bankless - Ryan Selkis Shares His 2024 Crypto Predictions

Episode Date: December 19, 2023

Joining us today is Ryan Selkis, who is here to walk us through his crypto thesis for 2024.  We cover big investment themes, people to watch, the future of stablecoins, policy takes and so much more in this wide ranging episode. ----- 🏹 Airdrop Hunter is HERE, join your first HUNT today https://bankless.cc/JoinYourFirstHUNT   ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE ⁠https://k.xyz/bankless-pod-q2   ⁠ 🦊METAMASK PORTFOLIO | MANAGE YOUR WEB3 EVERYTHING ⁠https://bankless.cc/MetaMask   ⚖️ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum   ⁠ 🔗CELO | CEL2 COMING SOON https://bankless.cc/Celo   🗣️TOKU | CRYPTO EMPLOYMENT SOLUTION https://bankless.cc/Toku   🌐 Layer Zero V2 Launch https://bankless.cc/LayerZeroLabs   ------ TIMESTAMPS 00:00:00 Intro 00:05:11 Recapping 2023 00:07:50 Are We In A Bull Market? 00:12:09 Investment Trends 00:16:48 BTC ETF Winners 00:20:03 Ether 2024 Predictions 00:26:57 BTC Security Model 00:33:06 Investment Strategy 00:36:56 VC and Private Markets 00:42:28 IPO's and M&A's 00:45:04 People To Watch 00:50:56 Why Does Elizabeth Warren Hate Crypto? 00:57:54 Grayscale 01:04:55 Products to Use in 2024 01:07:00 USDC Flips USDT? 01:11:32 Coinbase and BASE 01:15:46 Crypto Money 01:21:17 Privacy 01:27:54 How Crypto Wins In The US 01:40:07 The Political Bull Case 01:44:42 What's Most Exciting ------ RESOURCES Ryan Selkis https://twitter.com/twobitidiot  ------ Not financial or tax advice. See our investment disclosures here: https://bankless.com/disclosures 

The important battle that must be won is in the Senate. There is no future for crypto in the U.S. if the Democrats hold the Senate. Really? At least not until 2030. I think if it's a clean sweep for the Dems, then move your family. Wow. Really?

Move your family? Or pick another industry, right? I mean, I'm not going to be doing crypto in the U.S. If it's a clean sweep from the Democrats. You see what? Why? What do you think happens? What will 2024 have in store for crypto?

That is the question on today's episode. To answer that question, we brought up. on Ryan Selkis. He gives us his crypto theses for 2024. This is from a document that he publishes every year where he goes through. I think this one is 200 pages of all of his predictions, all of the themes, all of the narratives, all of the things he thinks will be in store for us in the following year. A few things we talk about in today's episode. The big investment themes in 2024, including Bitcoin, Ethereum, and all the other tokens down the market stack. Also, the people to watch, including Larry Fink. Ryan thinks he is about to get a lot more bulletin.

on crypto. How we defeat Elizabeth Warren as well. We talk about that and why Ryan thinks Barry Silbert will make a comeback. I think he called him in this episode undefeated. We also talk about the future of stable coins. Ryan is particularly bullish on Coinbase's layer two. It's called base. Of course, we talk about that. And finally, we conclude with some policy takes. And Ryan has some particularly spicy takes here. Just me on today's episode. David is out today. He is ice climbing. True story. Guys, we're going to write to our episode with Ryan's Selkis, but before we do, I want to thank the sponsors that made this episode possible, including our number one recommended crypto exchange for 2023 and 2024. That's Cracken. Go create

an account. Cracken knows crypto. Cracken's been in the crypto game for over a decade. And as one is the largest and most trusted exchanges in the industry, Cracken is on the journey with all of us to see what crypto can be. Human history is a story of progress. It's part of us, hardwired. We're designed to seek change everywhere, to improve, to strive. And if anything can be improved, why not finance? Crypto is a financial system designed with the modern world in mind, instant, permissionless, and 24-7. It's not perfect, and nothing ever will be perfect. But crypto is a world-changing technology at a time when the world needs it the most. That's the Cracken mission, to accelerate the global adoption of cryptocurrency, so that you and the rest of the world

can achieve financial freedom and inclusion. Head on over to crackin.com slash bankless to see what crypto can be. Not investment advice, crypto trading involves risk of loss. Cryptocurrency services are provided to U.S. and U.S. territory customers by Payward Ventures Eek. PVI doing business as Cracken. Arbitrum is the leading Ethereum scaling solution that is home to hundreds of decentralized applications. Arbitrum's technology allows you to interact with Ethereum at scale with low fees and faster transactions. Arbitrum has the leading defy ecosystem, strong infrastructure options, flourishing NFTs and is quickly becoming the web-free gaming hub. Explore the ecosystem at portal.arbitrum.io. Are you looking to permissionlessly launch your own Arbitrum orbit chain?

Arbitrum allows anyone to utilize Arbitrum's secure scaling technology to build your own orbit chain, giving you access to interoperable, customizable permissions with dedicated throughput. Whether you are a developer, an enterprise, or a user, Arbitrum orbit lets you take your project to new heights. All of these technologies leverage the security and decentralization of Ethereum. Experience Web3 development the way it was always meant to be. Secure, fast, cheap, and friction-free. visit arbitram.io and get your journey started in one of the largest Ethereum communities. Metamask portfolio is your one-stop shop to navigate the world of Defi.

And now bridging seamlessly across networks doesn't have to be so daunting anymore. With competitive rates and convenient routes, Metamask portfolio's bridge feature lets you easily move your tokens from chain to chain, using popular layer one and layer two networks. And all you have to do is select a network you want to bridge from and where you want your tokens to go. From there, Metamask vets and curates the different bridging platforms to find the most decentralized, accessible, and reliable bridges for you. To tap into the hottest opportunities in crypto, you need to be able to plug into a variety of networks, and nobody makes that easier

than Metamask portfolio. Instead of searching endlessly through the world of bridge options, click the bridge button on your Metamask extension or head over to metamask.io slash portfolio to get started. Bankless Nation, our next guest, needs no introduction because we do this every freaking year. We have Ryan Selkis. He is the founder and CEO of Masari, which is a crypto analytics firm and media company helping bring clarity to the crypto space. And every year he brings for us toward the end of the year, his thesis going into next year. Today, we are ending 2023, actually not today, but this month sometime, and we're entering 2024. So it is time to take a look at Ryan's predictions. He's, his thesis going into 2024. Ryan, how you doing today?

I'm tired, man. You're tired? We were just talking off camera. This is the longest one yet. and it's still under review. We didn't even get you the full draft yet, so I appreciate you doing this, but I'm... Yeah, no, we're looking at... I'm a hundred today. I'm 102 sections into the 105 overall, so... A hundred and two sections.

The last three, I think I'm going to finish tonight, and then we'll go through about a week or so of edits and then ship it out right before the holidays. So, Bankless Nation, this is a 200-page document, of course, that we're going to try to distill half of this into an hour or so long episode, which is an absolutely monumental task. But of course, we'll have a link so that you can download the full document and get your digest.

This is some fantastic holiday reading for you if you're interested in kind of a recap of 2023 and the things going into 2024. I'm wondering before we get into kind of the various sections here, and we've got a number that we're going to cover, if you could give us sort of a recap of the year. So you start with this welcome letter. The carnage of the past 12 months in crypto have been. and brutal for all of us. We've grinded through bankruptcies, lawsuits, layoffs, turnovers, and a general malaise that comes with a bad hangover after a big party. That's very much how I felt

we ended, you know, 2022 and 2023, I suppose, for much of the year, what was part of that. How would you recap the year that was 2023 and how are we positioned going into 2024 at the highest level? I feel good about heading into next year and where we are. We have a number of tailwinds that I think should be pretty encouraging for most of us. There is a weird backdrop in the private markets, like the private venture markets where there's still pretty significant dislocations in terms of prior valuations. And I do worry that some of the non-token affiliated companies might be getting a little bit of a false sense of security or this might be a false start in terms of like resetting certain levels of optimism, particularly, you know, for

folks that have been around for a while. But that's mostly a function of the, both the public software and kind of private venture market still being, you know, relatively icy. I think seed stage feels good. Series A feels good. Obviously, the token markets are coming back. There's different narratives that are starting to get people excited. And then at the very highest level, you know, Bitcoin has a number of tailwinds. We'll talk about Ethereum as well. as we always do and kind of bat that around. But I think the Bitcoin spot ETF tailwind is probably the biggest kind of wealth generator or potential wealth generator for folks within the crypto ecosystem.

And then that usually has a trickle-down effect. So we're in this like little bit of a weird transition phase, but all things are generally trending positive, including policy right now. Might not feel like it. But I can certainly share some thoughts on why I think things are. Slowly coming back to a good spot. Maybe this is the dark before the dawn there. Ryan, would you call this a bull market?

Are we in a bull? Well, technically, we've been on a bull market all year. I mean, you know, Bitcoin's up, you know, 150%. You know, Ethereum's almost 2x off the lows. Salana and some of the other, you know, the highest performing, you know, big protocols or midcap protocols or are up five, you know, in some cases even upwards of 10x. So I certainly think just,

it's almost undoubtedly and indisputably a bull market from the bottom. But there is still, you know, a ton of recursive investment, you know, within the industry, right? So when you think about infrastructure companies, when you think about, you know, where we are from an ecosystem health standpoint, a lot of our long-term growth and kind of really hitting the potential for crypto and all these emerging protocols, it's going to come from real world adopt. and kind of crossing this chasm, either with users or in the case of defy and financial instruments with Wall Street. And that's where we're starting. We're still in a bit of a halting pattern. I would say it's probably more acute on the defy side of things than it is for just Bitcoin on kind of the

currency front or some of the other emerging applications like, you know, DPN and non-financial. We're not explicitly financial applications. But it feels like, you know, it feels like, you know, we could be on the cusp of a really fun year. It really just depends on how a couple things break. So going into 2024, do you have an analog for what year 2024 will be most like? Is this like, you know, if we go back to the previous market cycle, is this 2021 or is it 2020? Or you can even go back further than that? Is it 2016?

What do you think 2024 will be? It feels like 2020 and a six-month delay. or so because what we're seeing right now in the Solani ecosystem in particular and, yeah, this hotball of money trade and, you know, all the enthusiasm for different, you know, alternative L-1s or, you know, farmable ecosystems, it's very reminiscent of Defy Summer in 2020. Yeah. And, of course, you know, DeFi Summer 2020 was basically like rocketing off the COVID crisis lows in March. to a new high right after the last Bitcoin having.

So it does feel a little bit like, I'd say mid-2020 in some respects. I always try to shy away from the different calendar year comparisons, just because I think that there really are a series of overlapping hype cycles and kind of rhythms to the market. On the one hand, you've got the Bitcoin halving cycle, which, you know, for whatever coincidental, you know, reason has just happened to work in pretty nice. nice tight four-year cycles. And then others, you're kind of analogizing of previous like historical events. So for Solana, it's, you know, the crash to $80 of ETH and all the, you know,

kind of nuclear events that happened around, you know, consensus being very, you know, distressed at one point in that low. You can kind of analogize that a little bit to, you know, what happened at FTX and some of the supporting infrastructure around Solana and kind of their resurgence. But, yeah, I think 2020 feels like the vibes, depending on what part of 2020 you look at, though, that could be very scary because, you know, it's, it was a shit show earlier in the year. And obviously, you know, I think there are some things, you know, politically and kind of socially, culturally, that that probably cause some related fears, even if it's not quite a pandemic that locks everybody down to their houses from. for two or three months. Yeah, interesting. I mean, 2024 in itself will be an election year. So I'm sure we'll get to that.

But let's set this up. Okay, so we've got five sections we want to touch on. And we're only going to be able to cover the highlights. We've got the investment trends for 2024. We've got top people to watch. We've got some products to use, the top products to use, top crypto monies. Talk a little bit about money. And then some policy trends.

We'll end with that. But let's start with the investment trends for 2024. You've listed 10 here. Let's start with King Bitcoin here. So what's the investment case for Bitcoin going to 2024? Who is buying? Are these some of the standard crypto natives? We have net new buyers.

How would you describe Bitcoin as an investment trend for 2024? I know you mentioned the spot Bitcoin ETF. Maybe it starts there. Is there more to it than that? I think there's a bit more to it than that. But that is probably the most important. And again, this does depend on an actual Bitcoin ETF getting approved in January, like many people expect, including myself. I think that's a high probability event.

If it doesn't happen, it would be both a surprise and potentially introducing a pretty big variable into the mix. We don't really know how the market will react, but I'd imagine it would be net, you know, unfavorable compared to what the year could look like. But the thing with the Bitcoin ETF is, you know, Mike Novogratz and a number of other, you know, investors that we had at Mainz, Karamucci said the same thing. Rao Powell said the same thing. The one thing about Wall Street is that assets are sold, not bought, right? And you basically have a dozen or so of the largest institutions on Wall Street that are going to be falling over themselves and ruthlessly competing. with each other on who can market Bitcoin harder to their investors. Is that really something they say, by the way, assets are sold, not bought?

That's something they say in Wall Street? Yeah. I mean, it makes sense, right? It's a very sales-oriented industry. And you have a situation where, yes, there are all these kind of tailwinds, right? You know, could you see increasing adoption of Bitcoin in high inflation countries and, you know, is, you know, Malay in Argentina going to be the second Bitcoin president, right? That's kind of one thing in the background.

You've got this four-year cycle of the halving narrative. And, you know, you could argue whether that's overplayed because the inflation rate is so low now. So the marginal impact is muted, blah, blah, blah. We don't really know. Then there were smaller but really important changes like the, you know, FASB financial economic standards board. Their treatment of Bitcoin as a balance sheet asset has changed in a net favorable way where, you know, you don't have to list it as an intangible now. You can actually market to market,

which is one of those boring but important structural changes that I think was an underappreciated tailwind for this year, particularly. And why is that important, by the way, the FASB? Well, you know, essentially in the past, you would only be able to take an impairment if your Bitcoin fell below its fair market value. But the second that it appreciates above that, you can't market to market, right? So you're basically taking a loss in your financial statements if it dips below, but then you don't subsequently mark it back up, given the way that intangible assets are treated. So, you know, there's, I think, a ton of things like that that all add up. But, you know, those are every single data point, every single kind of narrative that I just mentioned,

those are going to be the same things that are put on glossy investment materials from all these big, professional salesmen at the companies that are going to be falling over themselves to gather AUM for their new Bitcoin ETF products. And the only way that you really compete as an ETF provider is through distribution on the one hand and basically marketing, right? Customer acquisition on the other. And there's no real difference between these spot ETFs. You can argue about, okay, one's going to be 50 basis points, one's going to be 75 basis points. Like, who gives a shit, right? Like at the end of the day, whoever does the best job with marketing, and distribution is going to amass the most assets under management, right? And if you follow that logic,

then the incentive is for people to, you know, go above and beyond in terms of like how they're marketing these things and the dollars spent are going to directly equate to net new AUM, which net new AUM for a financial product and an ETF is new deposits, right? And this is the first time Wall Street has had a product in general. And I'm wondering. They've had a crypto product to sell. Right. And so you see basically the, the, the largest asset managers in the world just got their first crypto product and they're going to be pedal to the metal in trying to sell it to the market and distribute it. And we've got some pretty big names here, right? I don't know. You know, I've heard from the analysts that generally

ETFs are a power law winning game. There's like, you know, one big one, and then there's a long tail of smaller ones, and they're all competing to be the biggest one. And we have some of the biggest names here, don't we? We have BlackRock. We have, you know, Vanek. And I guess GBC and Grayscale has somewhat of a head start too. Do you have any commentary? on who you think the big winners will be besides maybe the price of Bitcoin through this competitive experience? Do you think, does BlackRock just always win these things? Do you have any takes?

Well, I think Grayscale is probably going to be the big winner in some respects, and it will lose in others. But in terms of long-term assets under management, Gray-Sale is going to be tough to displace, even for someone like BlackRock. I think there's a bit of a misconception about what an ETF is. approval or an uplisting does to gray scales and business based on the fact that they're going to have to lower fees and offer redemptions. Just because they will begin to offer redemptions and have to lower fees does not mean that that business is going away overnight or everything's

just going to go to BlackRock. And there's one very simple reason, Texas. So, yeah, there are a number of clients of gray scales that are not, you know, I own GBTC shares. I'm not going to immediately redeem or transfer assets to another ETF product or even to Coinbase necessarily. Because that's a tax event for you, right? And then you have to trigger that taxable event and then you have to increase your cost base on it. Right. So, you know, do I want to lose, you know, 30% of my, of my, you know, Bitcoin on a per share basis the second that I do that, or do I want to just hold it for 1% a year or whatever they reduce the fees to? Now, I do think the fees will be reduced for gray scale, but it won't be size of

enough that it, you know, basically, um, uh, hurts them net net. I think you could see a scenario where, you know, they gray scale cuts their fees by 50%. Maybe they lose, you know, 10%, 20% of their AUM, but I could also see them gaining, um, because they already have a liquidity advantage and, and they've already got this, um, this kind of marketing engine in place and all the other products that, um, that basically they could come out net ahead, uh, with just some modest price appreciation expectations next year. All right. So the interesting question, of course, is whether the market has priced this in or not. It seems to be consensus that we are going to get a spot coin BTF sometime in Q1 of 2024. I don't know if you depart from that consensus. The best prediction market here is the

GBTC share price, right? Yeah, which is closed almost. And watching that that gap that had grown to 50. Now, I think 50% was very much an overshoot based on the fact that, um, those shares were being liquidated as kind of bad collateral assets during the credit crunch last year. But when you see it kind of slowly, slowly, steadily tick up from, you know, 50% to sub 10% now, last I checked, maybe it's changed a little bit. That's probably the best prediction market that you're going to get in crypto for whether people anticipate that there will be an uplisting in a spot Bitcoin ETF approval. Okay. So let's talk about another investment trend prediction So Ether and the World Computer.

So currently the second largest asset, about $225 billion or so, something like that. So about one-fourth the size of Bitcoin, but still an order of magnitude larger than kind of the next crypto asset, I would say. What's your prediction for Ether? So where does Ether stand going into 2024? It seems like the market has been fading Ether maybe lately, particularly there's been a big sole run-up, I think in your report, you're talking about Ether maybe being squeezed between Bitcoin and all of these alternative super fast layer ones. Yeah, what's your take there?

So squeezed, you know, one way to put it, you know, I think I wrote straddled, which may be slightly different, right? I don't think people are getting squeezed out of Ethereum, but I find it maybe not as unlikely now as it was a few weeks ago, just because the markets have continued to move in one direction and at some point you'll have a reversion to the mean potentially. But Ethereum out of L1s and kind of network tokens, Ether as an asset still is around 60 plus percent of the market, right? And if you believe that network tokens are a winner take all market or power law distribution market, right, like search, right, Google versus Bing. Then maybe that's sustainable and maybe what you're looking at is,

you know, ETHBTC, right? So should ETH or be, you know, X percentage of Bitcoin or ultimately is it going to catch up and maybe even flip because people think that there's more utility in the Ethereum network? I think the issue that ETH has is it's trying to be both ends of the straddle, right? So Bitcoin, it's very simple. It's a very easy meme. It's got all these narrative tailwinds. It's going to be the first out of the gate. You've got all the institutional investors who are not overthinking this, right?

They're looking at the back in the napkin pitch that I just made and they're all thinking the same thing and thinking that everybody else is going to think the same thing because, yeah, they understand it. The triple point, you know, asset thesis, right? Or the ultrasound money, right, which I know you guys have advanced. That resonates, but it's not quite as simple, right? it's, you know, it does take a little bit of an unpacking. And you can pull a different parts of that thread. You can pull on the money thread. Well, isn't everybody just kind of gravitating a Bitcoin?

You know, El Salvador is not buying ETH that I know about. Javier Malay is not talking about ETH as far as I know. Central banks aren't thinking about, you know, digital gold and naming Eith in the same part of the conversation. And by the way, you've got this other assets, a lot of this really kind of coming up the curve and seems to be eating a lot of Ethereum's value. So now you're kind of taking questions from both. sides. And I don't think that that's necessarily an indictment of Ethereum and the whole

roll-up ecosystem being fundamentally unhealthy so much as it is a recognition that has been so dominant that it's tough to retain 60% market share unless you truly have a monopolistic business. And I don't think the block space is a winner take-all or even winner-take-most market. I think that ultimately application builders and kind of other kind of para chains or kind of parallel networks will ultimately go where they find the tradeoffs between costs security for block space to be the most compelling. And by and large, that's going to make it very difficult for Ethereum to continue to compete on both availability and kind of cost on the one hand. And if they do, if the ecosystem does get more and more scalable than the drive down fees,

right, because there's more block space. And so the supply and demand dynamic exchange on that side too. So I've thought more about Ethereum historically versus other Alt L1s in general, almost more like Visa versus MasterCard versus Google versus Bing. And if that's the case, yes, it will be tough for Ethereum to maintain its market share. But having said that, everything mean reverts. And Solana and some of these kind of alternative assets have rallied so hard this year compared to Ethereum. If I'm wrong, it will probably be because of mean reversion, not because I necessarily think the long-term thesis is wrong about this competitive positioning dynamic between the two. Do you think that Ether has any tailwinds of being sort of the

second most institutionally adopted asset at all? So there is talk of Ethereum getting its own ETF as well. And there's even talk that that could happen as early as this summer is one possibility. What do you think that does for Ether, if anything, this cycle? I'm not sure. Look at the Ethereum Futures ETF. It didn't really do anything. I think the assets of our management are negligible. I think it's in the, you know, eight figures.

I don't even think they've had nine figures collectively. You know, it's a $100 million in the futures ETF versus, you know, which you saw in the first 48 hours with the Bitcoin futures ETF, very different. So I don't necessarily know that that is going to be a driver. for Ethereum going forward. But I do think that Ethereum benefits if any of the other kind of core narrative building blocks for Bitcoin or the other ALTS L1s, if they start to break down. Right. So if you have another, you know, kind of major Salana outage or there's a series of hacks, you know, that impact some of those early emerging defy projects on Solana that've gotten a lot of heat recently.

You know, basically a number of things could happen. And I'm using Salon as a placeholder, you know, as kind of the second in line behind Ethereum and that, you know, that hurts that community collectively on the one side. And it helps Ethereum, you know, kind of net net. On the other hand, at some point, we do have to start talking about Bitcoin's security model. And the halving is a double-ed sword at this point because now your network security is down to about 0.8% per year. And I think that there is a question as to what level is too low. I don't know that 0.8 is too low to secure a trillion-dollar network that's still, you know, tens of billions of dollars per year

in security spending to the mining community. But it's certainly less compelling than it has been historically. And if you get down to, you know, 30, you know, 0.3 percent or 0.1 percent or, you know, whatever it is, at some point, either a fee market needs to develop or there's going to be a breakdown in Bitcoin's core security models. We are seeing some of that fee model with the ordnals activity lately. Does that make you optimistic at all? Yeah, and I wrote about this during the report. I think that, you know, everybody, you know, the irony is that everybody should be rooting for Udi and Eric and, you know, ordinal theory to kind of take hold. And instead you've got, you know, the Bitcoin religious that just, of course,

they hate it because, you know, why not? But, you know, one of the things that I wrote about, in a later section at the investment transaction is, you know, Bitcoin essentially long term has four different options, right? There's either going to be a fee market that develops and it'll be thanks to something like inscriptions and ordinals or, you know, other kind of Bitcoin layer two demand. You will ultimately find people starting to agitate for a switch to proof of stake. And this could potentially have, I mean, it sounds crazy now just based on where the kind of Bitcoin community is, but you can imagine a scenario where Bitcoin gets financialized. And, you know, half of the Bitcoin in the world is ultimately managed, you know, by, you know, regulated financial custodians on behalf of, you know, basically, you know, we've basically created digital gold and it's the same as the old players and kind of incumbents that are, are custody in these assets. You know, that makes it a little bit easier. on margin to have that conversation at some point in the future. If the majority of the kind of economic voting interest says this network is no longer secure, we need to kind of fork it to proof of state.

Third way would be you think about the 21 million Bitcoin cap as a soft cap versus a hard cap, right? So in other words, there is some lower bound to security that we should be spending as a network. The fee market is not maturing. We must maintain proof of work as an alternative to of stake otherwise. What do we just build all this for if, you know, the block rock and, and three other banks can just make the ultimate, you know, kind of network decisions at scale. That might be an alternative that people take seriously because they'll say, okay, half a percent annual inflation destroys the 21 million Bitcoin meme, but at the same time, it allows us to incentivize these third party energy intensive actors to secure the network. And that is a tradeoff that

we're willing to make because, look, that's still better than gold, right? That's still better than any other kind of fiat currency and there's kind of a natural equilibrium there. And then option four is a relevance long term because you can't secure a network with, you know, negligible fees that's measured in the trillions. The security model just doesn't work. So, you know, I put in the report, I think it's equal probability before those four. But the one that the one outcome and I think the one kind of future of the world that everybody should be rooting for if you're, you know, in the Bitcoin community is bucket one, which is that a fee market materializes and it actually costs money to generate Bitcoin transactions on chain. And then you do push out some things like

payments to, you know, layer twos. I just wish that, you know, at some point in the last six years, we would have seen any sign of life in the lightning market. But so far, I just don't think that anyone should be able to push on lightning. It could be the year of lightning. Ryan? Who knows? Next year. Next year is always the year of lightning. Yeah, I know.

That's always how it's been since I've been here anyway. You know, I will say the one thing that gives me pause is knowing that, you know, shit talking against lightning or even coming across this shit talking lightning does feel a little bit like betting against David Marcus and Light Spark. And there are some good teams that are building, you know, on Lightning Protocol. So I don't want to bet against David. But I do think that he might. sometimes this happens where you just get so jaded and so emotionally scarred from a traumatic

experience that you can't possibly imagine, you know, someone else figuring out what, you know, you didn't. And if light spark can't figure out, you know, how to make lightning apps work, I think it'll mostly be because, you know, David went through the Libra treatment at Facebook and just the full ire of the state, you know, going to block what they were trying to do with a private stable coin and then extrapolated that. to a private stable coin will never work or these kind of private, public-private partnerships will not work at scale. So, you know, I need to build on Bitcoin.

But, you know, who knows? That would be a big conversation for me or you to have with him at some point. Well, certainly. Certainly. It's interesting. Those four kind of ways that Bitcoin could handle the economic chain security discussion, right? At least two of those feel like they could result in forks.

And what's fairly interesting about that is now we have an ETF, right? And so how does Wall Street handle a fork? That could get very interesting, I think, over time. But I guess one high-level question for you, you don't think that this is the chain security budget of Bitcoin is not going to be a factor in 2024. We can continue to kick that can down the road. Can we not? Yeah. So I guess what I mean is not necessarily that it's going to be a factor and people need to worry about the security of the network.

But at some points, if this is not addressed and people start to. to see this dwindling, you know, fee market or issuance rate as a liability for long-term security, ultimately that begins to get priced in. But it gets priced in very slowly. And I think the way that that would get priced in is net in favor of something like Ethereum. I see. Okay. Or another or another asset. So yeah. So kind of, you know, close in the loop on the first part of the conversation, I think, you know, to the extent that Ethereum outperforms in like the medium term versus Bitcoin in particular, you know, that. that will probably be one of the factors.

Well, tell me about the liquid field then. So we talked about Bitcoin. We talked about Ethereum. But there's a long tail of other assets. But just you put this so people are kind of recognizing Bitcoin, eth, and dollar-backed stable coins actually represent 75% of the total crypto market cap. That's about $1.6 trillion. This won't always be the case, you say. And yet you also say a little bit later in this section, for your friends and family, I wouldn't recommend investing in anything.

outside of maybe five or so crypto assets. And by the way, you're not telling us the other three, although I'd be curious to ask you what the other three are. So what do you think about this long-tailed? Well, I kind of outed myself in the disclosure section at the back. Yeah, I see. Maybe we'll get to that too. Solano was the third, but I won't mention the other two.

And mostly that's not because I feel uncomfortable sharing them, but I just don't want to get yelled at. So now if anyone from any community tells me that, you know, I should be taking their asset more seriously. I can just fib to them and say that they were part of the other two in private. But I think the point about number one, it's simplicity, right? So the reason to keep things simple is not that other assets won't outperform Bitcoin and Ethereum, but because for someone that's just looking to get exposure to crypto as an asset class,

definitionally, if you were just at Bitcoin 2014 or whatever the conference was that Vitalik introduced, you know, Ethereum at, you would have captured 75% of the market upside since 2014, right? So you would have captured that 100x, you know, plus if you just invested in the Ethereum ICO and Bitcoin back then. And I always joke with folks that, like, if you knew the early, like, Ethereum crowd, yeah, there's a reason I miss the ICO, right? You can know too much about this. industry and not keep being simple because it was like the island of misfit toys. And, you know, fortunately I got in, you know, while it was still relatively early, but not as early and as dysfunctionally as maybe the first couple of years were. But I think, you know, that's going to hold true for a while, right?

So, you know, maybe there's a handful of assets that make up the index that you want to exposure to just so all of your eggs aren't explicitly in one basket being Bitcoin or two baskets being Bitcoin and Ethereum or vice versa. But, you know, there's, there probably is, I think, a heavy bias towards being invested in the names that have a lot of name recognition, just for the, you know, the 70 IQ play on crypto on the one hand. The other reason not to get overly excited about any individual asset or basket of assets. In the other hand, is, one, it's just really expensive in time consuming and kind of parse through the other $300 billion. worth of economically interesting or not so interesting assets. But also most of them are

relatively high inflation, especially compared to Bitcoin and Ethereum. And I use inflation a little bit liberally just so that we can compare these on an apples to Apple's basis. And I'd include things like insider sales from some of the big foundations and labs and kind of founder stakes that are prevalent in many of the other assets, you know, three through 10,000, right? So the price that you're looking at and the market cap that you're looking at, that's not in a fully diluted basis necessarily for the rest of the asset class. So you're basically trying to not only compete against the top assets in the industry and Bitcoin and Ethereum, but you're also trying to beat the dilutive impact of all this

net additional issuance, whether through the form of new tokens that are being issued through high staking rates or new assets that are hitting the market through token online. or kind of early team vesting schedules. Okay, so what's your take on, you got a section here on private crypto markets, and I think a lot of people who are unaccredited investors, they don't have any funds inside of a fund structure or a VC of any type.

They get a little bit of FOMO, right? Because they see the VCs participating in these early stage deals. But you've called the private markets before losing Alpha. Yeah, what's your take on private investors? so the VCs of the world and the funds of the world. Are they outperforming like an index weighted, you know, top 10 or top 25 in crypto? Or do you think it's a losing game there?

I think if you looked at the aggregate investments in private crypto funds, hedge funds, venture, all strategies at the time they were raised in the time that they were deployed. and you took all of those assets and you invested in Bitcoin Ethereum alone, it wouldn't even be close, right? It would not even be close. Bitcoin and Ether would way outperform. Just absolutely fucking destroy every, every, every, you know, the aggregate. That's good for retail.

That's good for retail. But my point is I don't think that is true universally. But of course it's not going to be, right? You're always going to have a couple of outliers in that field that do very well, right? So multi-coin comes to mind and betting early and really going all in on Solana, right? So credit to them. But, you know, is that 100% skill? Is that a confluence of factors?

Skill and luck? Is it, you know, whatever? Just, you know, throw a dart and you're going to have, you know, if you throw a dart times at a dartboard blindfolded, you know, one time out of 100, you might hit the bullseye regardless of your skill level. I'm not saying that about multi-coin in particular, but rather in general, you're always going to have outliers on either side. But if you aggregate all of those dollar flows, they're net going to probably underperform the liquid market. And, you know, for illustration of this,

you can you can even go back to look at, you know, Coinbase's series B with Andreessen Horowitz. So it's in the fall of 2013 that they closed that. I think Bitcoin was trading around $100, $120 probably when it closed. And, and, and, you know, and, you know, and, you. If you look at their valuation, I think, you know, Coinbase was around 140 million post money if my memory serves me correctly. So, you know, Coinbase is a public company now is $35 billion. So, yeah, just do the quick math there. Yeah, they've done very well. It's about a 300x.

But, you know, it else is 300xed from $100, $400,000, actually, is the king, right? So even Coinbase, right, the most successful. I think really the only company to arguably outperform the market at that scale has been finance, right? But remains to be seen whether that's something that will persist long term. But that is to say, it is exceptional and rare. And the odds of you picking that as an investor and going all in on that thesis as an investor such that it outweighs the relative underperformance of all of your other dogs, it's probably not going to be worth it.

Having said that, you know, I always was of the opinion that folks that were heavily invested in Bitcoin and Ethereum should be investing in critical infrastructure because without the critical infrastructure, their bigger positions in the liquid tokens are not going to hit their potential. Right. So you do need those picks and shovels. And as these as these big networks hit the scale that they're at, you know, the odds of another 100x in Bitcoin. If we have 100x in Bitcoin, then society has fallen, right? So, yeah, that's not a good thing because that means that we've experienced hyperinflation events in the U.S. dollar. You can get 100x investments. You can get venture scale investments, I think, much more easily today than maybe historically. So it'll be interesting to see how some of those funds perform.

But the reality is, and Nick Tomino from one confirmation, who's at a tremendously performing, well-performing fund. I even think that he had kind of broken this down and the DPI for their kind of early funds. How did it do relative to the liquid markets? It was, I think, neck and neck maybe slightly under. But credit to them, they were transparent about it. And I think one of the reasons they were transparent is basically to say, you know, we've done very well by venture standards. And, you know, even we, you know, having done well by venture standards, you know, face a tall order

and outperforming the liquid crypto markets. the last thing I'll say there is because of that dynamic, people will see that historical performance of the private and kind of infrastructure-related venture markets. And I do think that you'll see many more liquid investors begin to deploy against strategies, especially if we see market momentum picking back up. They'll want access to some of these liquid tokens because you can just as easily see if you avoided leverage and you avoided exchange blow-up risk, the funds, that really did well and absolutely crushed were mostly private and they were mostly liquid.

Yeah, it's a fascinating dynamic. So I guess for bankless listeners, don't get too obsessed with the FOMO of getting into that hot VC firm because there's a lot of opportunities in the public markets. And by the way, I pick on multi-coin because they've crushed, right? So like they're, you know. But you're picking on them in a good way. Well, I'm picking on them in a good way. And, you know, I also think that no one is happier to troll people than Kyle. Yeah, I read his Twitter too. All right, so let's talk about public markets

from a different vantage point. And this is, you've got a section here in investment trends, IPOs and MNAs. What's going to happen? Are we going to get another crypto IPO? Do you think circles on that short list? We obviously have Coinbase. We have Galaxy out there,

but there haven't been a ton of other large U.S. public companies in crypto. Do you think that changes in 2020? I would honestly, I mean, I'd be surprised by just about any other company with the exception maybe of circle coming out, right? I think to get out in this environment, in the U.S. in particular, I'm not as familiar with the international public markets, but for anyone to really get out in this environment in the U.S., you just need to have an exceptionally strong regulatory positioning and no one else fits the job description with the exception of circle right now. there are other great companies that, you know, I think operate the right way. They've never had a hack. They've had, you know, minimal slaps on the wrist, you know, for different issues. So Cracken is one that comes to mind. But, you know, Cracken has been in the crosshairs of the SEC twice over this year, right?

One for their staking product that they settled and ultimately had to, you know, kind of wind down in the U.S. And now again, more recently, they've kind of double-dipped and come after them with the same types of facts that they alleged against Coinbase. So tough to take a company public in the U.S. in that environment when the SEC that would have to approve your listing is also coming after you for various reasons. So I think that's unlikely. But I think Circle is one of the few that has both the numbers, the narrative and the regulatory positioning to support that. You know, Jeremy had mentioned, you know, earlier this fall when we spoke, and this is public. You know, you said this on stage, but that. Yeah, the company had done 800 million in revenue and about 200 in EBITDA all of last year.

And the first six months of this year, they had matched that. And that's probably going to persist in this interest rate and environment. So, yeah, just really well run. And so, you know, obviously circles the company to watch. And then, you know, Jeremy and Dante, who's their head of strategy and their chief policy whisperer, not just in the U.S. but kind of internationally. We're also part of the, you know, two of the people to watch as well. We'll get to some policy later.

That would certainly be a pretty bullish thing for stable coins if Circle, I think, went public and got through that gauntlet. But let's turn to the people to watch going to 2024. There's a number of folks on your list, but I want to start right at the top. Larry Fink and Kathy Wood. So Larry Fink, of course, the CEO of Black Rock, Kathy Wood, Ark Invest. Why are these names at the top of your list? Kathy's first. arc is the first name on the calendar.

So as the ARC, ETF goes, so goes the rest of the industry. Or so go to the rest of the listings, I should say. So I literally think it's all the attention in oxygen. But if you just look at the calendar, literally, Arc is going to be first out of the gates. And this is literally Tradfai coming to crypto and that product to sell, as you were talking about earlier. Let's talk about Elizabeth Warren. So she made your list. Elizabeth Warren and Minions, I would say.

Why is she on the people to watch list? people don't understand why and how Senator Warren is as powerful as she is. And this took me a couple of years to learn and really is just a function of the, you know, just enormous amount of time and energy that I've spent, you know, in D.C. And not just, you know, with policymakers, but I'd argue even more importantly with so many of the other policy leads at the different industry groups and at many of the other companies and projects. And these folks have by and large come into crypto from D.C., not the other way around. And they understand that Warren is as powerful as she is, not because she passes bills, but because she places personnel and places of high importance. And in fact, there was a good Atlantic article about her probably six, seven years ago, that essentially kind of walk through the logic, which is, you know, she never had any interest in going to Congress and, like, passing,

bills that were, you know, renaming post offices and stuff like that. She explicitly said, from day one, both, you know, explicitly and through her actions, that she wanted to pull the country to a more progressive direction, and she wanted to basically have an outsized influence on financial policy. So much of your influence as a senator or congressman depends on your position with respect to committees. And from day one, having come from Harvard, and then the Consumer Financial Protection Bureau, which she was the first chair of, to the Senate, she always had a very strong bias towards financial services, and ultimately she ended up on the committee that oversees most of our financial regulators being Senate banking.

When she ran for president in 2020, she didn't win. She fizzled out actually pretty quickly, but it was such a crowded field. And she was otherwise splitting the progressive vote so closely with Bernie Sanders that, that there was a bit of a devil's bargain between the Biden campaign and Warren that in exchange for her support, she would have pretty decently sized influence in financial policy in his administration. And that was both a horse trade that's an open secret in D.C. circles as well as a just logistical necessity because Biden, even when he was vice president, had much more reformed policy. then a kind of domestic policy bent. So, you know, he did not necessarily have the staff

on economic policy and financial policy to begin with. And by aligning with Warren, it both helped him solidify the nomination and then ultimately, you know, she was able to place people in positions of high importance. So now if you look across the financial regulators that are across the board, almost universally hostile to the industry, they are almost universally well aligned. And in many cases have direct hooks with Warren and are either former staff or just very long-time allies. So, you know, I won't keep people's families out of it. But, you know, Gensler's yet a close family member that interned with Elizabeth Warren. You know, the deputy director of the National Economic Council that has been our biggest obstacle and one of our biggest critics within the Biden White

House, Barat Ramah Mordi. He was a former Warren staffer. He actually resigned in September. Who did they replace her with? Warren's current chief of staff, or then current chief of staff, directly in the same position. So there's pressure that she's able to exert from the financial regulators that she helps place senior most personnel in, and then directly from the White House, in some cases, if you're talking about the NEC, where some of those phone calls ultimately came, when people hear about the pressure that the White House was putting on, for instance, Maxine Waters in the other chamber, the House, not the Senate, to slow down or walk away from some of the bipartisan bills that came out of the House this summer. Those calls were coming from the White House. They were coming from staffers closely linked to Elizabeth Warren. And so you basically have this situation where she is, I've called her the shadow president of the economy.

I don't think it's too far of a stretch because at the end of the day, you know, this is an administration. that is very, well, be diplomatic, I'll say it's very heavily weighted towards autopilot based on, based on, you know, who's at the helm and kind of the age of the president. Can I ask you a question here, Ryan? So, so I think I have totally underestimated what you just said. So, you know, you look at it just from a vote's perspective. You're like, oh, this is one senator. One of a hundred senators, one senator, one vote. And sure, she's more popular, more well-known. So she's got a little bit of that. But when you paint the portrait of This is a senator that has massive influence in the executive branch, basically, in terms of placing key personnel at-

Indirectly in the house as well. Yeah, okay. So you got all that. Can I ask you just a meta question about Elizabeth Warren that I haven't been able to figure out? And I don't know if you have any answers to this. Why does Elizabeth Warren hate crypto so much? What progressives will tell you is that it's about financial stability, consumer protection, and national security. Those are lies. It is ultimately about control. And the progressive establishment led by, you know, Senator Warren, I'd say when it comes to financial policy, what they really care about is getting the federal government and the, the Fed, right, through a central bank digital currency, to have a greater direct impact on and greater direct accessibility to everyday citizens, right?

So they think by and large that the private banking system, the kind of federal banking system is a mistake as currently incarnated because it's, and there is some truth to this, you know, in terms of the privatization of gains and the socialization of losses that you see kind of throughout Wall Street historically. But they still view that as a glitch in our system that, you know, ultimately needs to be brought to heal. and ultimately we should be centralizing as much of the financial rails in the economy as possible. You know, I, in theory, I don't think that that is a bad thing in terms of, you know, solving for some of the criticisms of the existing banking system. In practice, it's the most hellishly dystopian thing you can imagine because you're giving the federal government direct control over, you know, the financial, banking and kind of wherewith all of basically the entire citizenry. So we've already seen what happens with the platforming risks in social media. You know, we've seen it in overdrive with Operation choke point, which people don't remember or either don't remember or weren't paying

attention is not like a crypto bro conspiracy. This was a this was an explicitly named fucking program in the Obama administration that the current FDIC chair, who, was also then the Obama FDIC chair ran for payday lenders and firearms dealers and the like, basically to de-platform them, debank them from the financial system extra legally because they were politically disfavored industries, right? They basically just ran Operation Chokepoint back. They don't call it Operation Choke Point 2.0. We kind of came up with that moniker, but they're running the same playbook that they did with the explicitly named Operation Choke Point a few years ago for some of those other politically disfavored industries. So I think that's, it's incredibly dystopian to, to give the

federal government that kind of control, just because, you know, we're not governed by angels, right? And ultimately, I think the same reasons that you and I are excited about crypto and kind of the decentralization of finance in general are the same reasons that I'd say, you know, 90% of Americans probably agree with us that the decentralization, at least of the banking system, is probably better than having like a central central bank cover digital currency that's going to be able to direct debit or credit your financial

accounts. So what's fascinating about that account and maybe that kind of clicks for me and kind of rings true is you're saying it's very ideological and it's about control but I think somebody like Elizabeth Warren in that whole kind of anti-crypto army

they seem to think what they're doing is right the way. Like, and, and maybe it's more ideological than, than I thought it was. And that would make sense because crypto as well as an ideological movement, I think, on kind of the other side of things. But it's, it's less about, is it less about like direct benefit and more about this is the way it should be and we think we know best and, you know, therefore we're pushing this out there. You know, I think what it boils down to is, you know, I don't find myself particularly ideological. I just look at history. And the history of centralizing the economy and the financial economy in particular is, it's, I don't want to live in that country. I don't live in that

world, right? So like, just period. Like, just because we don't do centralized power very, very well. And I have never really seen, I've never really seen, I've never really seen competitive counterpoints, right? You know, to the extent that people use China as as kind of a modern example of, you know, the CCP and its control of the economy, kind of shepherding it and into like this, this kind of new dawn, you know, one of the reasons that their, their model has been so successful is because they kind of hotswop the back end of communist China in the 80s and 90s to capitalism, right? So I think that it is, If I heard a progressive case for further centralizing Wall Street or disintermediating Wall Street and kind of being able to go directly to the Federal Reserve and kind of further federalizing power that had any historical analogs that didn't end in national disintegration or fascism, then I would love to hear it.

So maybe a listener here will be able to send me some links or counter examples, but I've just never seen it. And so until I see some historical example that would disprove this, I tend to believe that this is one of the most evil things that could be foisted on the American people and in general. And the onus is on their proponents to prove otherwise that this could be managed in a way that wouldn't be outright, you know, of dystopian and kind of frankly, contrary to the Bill of Rights and all of our constitutional protections are kind of embedded in the operating system of the U.S., right? And I think that's really where this fight boils down. As you know, I've been outspoken on this and at times impolite. And one of the reasons that I'm impolite is because, you know, if it comes to our constitutional protections and people that I think are going to run roughshod over them because it's convenient

or because that's just their political persuasion, I think that we should tell them the fuck off. There you go. A challenge issue maybe to Rowan Gray to come up with an alternative. I know he's a regular listener. I would love to see it. All right. So we're still on the top 10 people to watch.

We're going to get back to policy. Hopefully we have some time at the end. So we don't have time to cover all of these names. But if there's one other person on this list or a group of people, Ryan, you think is worth highlighting maybe somebody that the crypto industry i feel like elizabeth warren is maybe in the top 10 people to watch but like maybe keep an eye on that kind of uh watching um how about a more positive case who's somebody in the industry doing some good does a name come to mind here uh well i mean i know we talked about the etfs a bit um but uh but you know i think sun and shine uh my my sun and shine

from gray scale who i used to work with uh is on the list deservedly so i mean you know we talked but the economics of that business. Grayscale, you know, was able to amass a massive, massive AUM base that I don't think is going away, even if it does shrink slightly, which even that's arguable. That business is going to be strong for a long time. And it's, it's, you know, really, you know, led the charge in many respects, both in terms of institutional adoption. A lot of people don't know this, but I mean, I was like gray scale is responsible for three bubbles and one burst. You know, 2013, when, when the product, was originally formed.

That was kind of the first institutional exposure that people could get through second market, you know, kind of amassing into this Bitcoin Investment Trust product. Obviously, the levered gray scale trade from the last cycle where, you know, funds were kind of plowing in Bitcoin, you know, using leverage in terms of amassing more shares and then hoping to flip them on the open market. Yeah, that arguably led to late 2020 and kind of early 2021 rally until that trend reverted. And then if you think the next year is going to be a third bubble, then I'd argue that they're probably going to have a pretty meaningful part of driving that forward just based on their loss in victory against the SEC. So I think that company and kind of Sunny in particular is interesting to watch just because of the drama at the rest of the DCG family.

Yeah, I was going to say, do you think he can get out from under that gray cloud that seems to be hanging over the DCG empire? Well, you know, I know Rom, he's at the theory that. you know, will the New York Attorney General's action against Genesis, DCG, and then Barry in particular, you know, lead to an outcome where Grayscale has to spin out? And I mean, I make the point in the section about Sunny that I think that's overstated. But the importance of Grayscale and I think the steadiness of Sonny kind of at top, yeah, that part of the empire is a pretty important piece of 24 story. I personally think that Barry is unkillable. And I think people underestimate, underestimate his ability to navigate a bankruptcy crisis or really anything like this. And I'd give him the advantage over Latisha James, you know, basically 99 times out of 100, but we'll say.

fascinating. Very, very sober at being unkillable. We talked about people to watch. We talked about the top 10 investment trends. I even, I even link, by the way. I don't know if he caught the link, but I even link to like the Jesse Pinkman. He can't keep getting it. Basically for anyone to disagree with me. That's how I feel about anyone that is surprised when they walk away and this is ultimately resolved. And I think this whole, I think everything with Genesis probably does get resolved for one reason and one reason only because the number is going back up and there's more money to go around. I mean, even the FTCS bankruptcy is looking.

kind of okay these days with the asset price going on. And Genesis is small potatoes compared to that, you know, for multiple reasons. One, I think in terms of the, in terms of the divide that has to be bridged, but then, you know, two, in terms of the earning power of gray scale and gray scale's ability to earn revenue in Bitcoin and crypto-denominated terms, right, would allow for some makeholes that otherwise wouldn't have been available at something like FTX as part of the remediation. So I think those are important factors of people are overlooking. Guys, we're going to get right back with Ryan.

And we're going to talk about products, the crypto monies, and some crypto policy going to 2024. But before we do, we want to thank the sponsors that made this episode possible. Selo is the mobile first, EVM compatible, carbon negative blockchain built for the real world. And now something big is happening. Introducing the Selo Layer 2. It's a game-changing proposal that's going to bring Sello's rapidly growing ecosystem home to Ethereum. Vitalik has shared its excitement for the Sello Layer 2 on the Selo 4. So has Ben Jones from optimism. But why? The cello layer two will bring huge advantages,

like a decentralized sequencer, off-chain data availability, and one block finality. What does all that mean? Rock solid security, a trustless bridge to Ethereum, and more real-world use cases for Ethereum without compromise. And real-world adoption is happening. Active addresses on Sello have grown over 500% in the last six months. With the Sello layer two, gas fees will stay low and you can even pay for gas using ERC-20 tokens. But Sello is a community-governed protocol. This means that SELO needs you to weigh in and make your voice heard.

Join the conversation in the SELO Forum. Follow at SELOorg on Twitter and visit sello.org to shape the future of Ethereum. Are you launching a token? Is it already live? How are you managing the legal and tax for providing token awards for your team? Toku simplifies everything about managing token grant compensation and you can get started with them for free. You'll have access to top-notch legal and tax support to handle the distribution and management of tokens for your team. Toku caters to every step in the process, from user-friendly legal templates for granting tokens to tracking investing periods and calculating withholding taxes.

Toku understands every grant structure, token purchase agreements, restricted token awards, restricted token units, token options, and all the other ones. Toku is already simplifying this today for leading companies like Protocol Labs, DYDX Foundation, Mina Foundation, and many more. You can learn more about how Toku can help you streamline your token management and get started for free. Visit Toku at Toku.com slash bankless or click the link in the description below. Introducing USDV, a better type of stablecoin. Currently, billions of dollars in stable coin yield each year are paid to tether, circle, and other central issuers of major stablecoins. But what if yield could be shared with the protocols that use it?

Those protocols, in turn, can decide how to reward their users. USDV shares its yield with a community of apps and developers that mint it. Every USBV is backed one-to-one by U.S. Treasury bills which pay yield. yield flows out to the community of USDV issuers so your protocol or app can get paid for helping end users convert other stables into USB. This works thanks to a breakthrough technology called color trace from layer zero. Without it, it was impossible to attribute users of a token with a specific issuer but now we can. USDV is live on Ethereum, Optimism, Arbitrum, and other chains and it's already available on over 20 exchanges such as Curve, BitGet, Velodrome, and Stargate. Start

participating in the yield from Treasury-backed stablecoins at Bankless.com. com slash usdv all right ryan let's talk about some of the products to use in 2024 the first one that makes the list is tether on tron okay so this is the tether stable coin usdd tauton why does that make your list of a top product for 2024 i just thought it was fascinating to look at the at the metric that i included is as part of the visual which is the number of addresses that hold $1,000 of USDC versus USDT. And essentially, it's about 200,000 wallets in each case, at least it was at the beginning of the year.

And then basically all of the net losses for USDC wallets in that regard, I don't have the numbers in front of me, but I think it was like 240 down to 200,000 wallets with that description for USDC. For USDT, Tether, it was basically the inverse. And they've climbed all year. particularly on the back of the Silicon Valley bank crisis in March. That, I think, hurt Circle because they had their assets at SVB. So the great irony is that Circle probably needs better protection from the U.S. banks than, you know, the U.S. banks need protection from crypto. Ridiculous. And I think the, I think Tether on Tron and Tether just in general, but I think, you know, Tron being the primary settlement platform, you know, in terms of the availability in Latin America and Africa and Southeast Asia, it really is,

I'd say probably the most widely used killer app for crypto, particularly when it comes to financial inclusion that we've seen to date. So I did not have that on my bingo card for the most widely used and most important apps that we have, but I do think right now is probably the case. I mean, it's just a Tron usage of USDT is just a slightly transparent. ETHERium at this point, which is incredibly impressive. I thought it was higher. It may be higher, too, by the time we're recording this.

Actually, we had Matt Siegel on from Vanek, and he had kind of a contrary prediction I want to run by you. He actually thinks that USDA will flippen tether in 2024. And the reason, I think his unstated reason is basically treasury. It goes after USDT in a big way and tries to squash it out and snuff it out and shut it down. What's your take on that? Well, I wrote about this later. I don't blame me if you didn't actually read all 90 pages in the first half because it's a beast.

And I didn't give you a whole lot of turnaround time. But I could be very wrong about this. But I just have a hunch that it's all K-Fabe. You're familiar with this concept in wrestling, right? K-Fab and- No, no, no. Refresh me. I think generally people should be aware of this when it comes to politics in general.

K-Fabe is essentially the, like, it's all somewhat scripted, right? So like all the anger, all of the, all of what's happening in public, right? It's performative. But in private, you know, the reality is very different. And, and I think if you, if you look at Tether, like this is a perfect, you know, situation where where you could see like real like crypto KFAb between the U.S. government and a project like Tether. Tether is this, you know, one of the largest buyers of U.S. treasuries.

They work very, very cooperatively with the U.S. government. when it comes to things like AML KYC, and the alternatives for the U.S. government are basically shut it down and lose a surveillance partner or to let it go on and, you know, keep an eye on it and make sure that, you know, it doesn't get too big or out of control. But, you know, otherwise, you know, we'll sell them some treasuries. We'll keep an eye on it.

And ultimately, you know, if they want to survive and not go to jail, then, you know, they'll play by our rules. And I think I find it very difficult to believe that the U.S. government wouldn't have found a way at this point to go after Tether unless there was that dynamic in the backgrounds. And, you know, frankly, I think that's kind of good for all parties, but especially for Tether, which literally and figuratively just prints money as a company since they sweep, you know, the interest on those treasuries, basically to the company versus. to anyone that's... So you think all the talk from Treasury is like performance art. Like they really don't, you know, they're just talking a big game, but when it comes down to it, they're happy that Tether exists and they'll be happy to let them to continue to exist. Yeah, because ultimately I think they'll be able to seize those assets a little bit more easily, right?

Like, you know, it's different from Binance in the sense that, you know, finance, well, it's similar in some cases, right? I mean, if Binance gets a big fine, there's, there is a deal that's ultimately cut in terms of what CZ is going to have to cop to and, and we'll see what a sentencing is. But, but, you know, obviously, you know, could be radically reduced versus, you know, what you might expect, you know, given the magnitude of what was accused of finance. But the tradeoff there is, you know, now the U.S. government is a little bit more closely tied to to finance the platform and now has better surveillance capabilities. So to the extent that you see anything, you know, at Tether, that is similar in terms of the government

kind of cracking down and then or going after them, I would imagine it's probably not dissimilar from a finance situation and that Tether is basically allowed to exist. Maybe they pay some sort of fine, even in the case that the government really comes after them. But the U.S. government just finds a way to tighten its surveillance hooks into the project. And the more they play up the wild west nature of tether and the more they, you know, fight them in public and kind of, you know, engage in K-FAB here, then the more credible looks, right? And the more people will continue to use this asset that can then be fully surveilled and, you know, and that liquidity and all that demand doesn't just flow to something that is even more difficult for them to wrap their heads around from a sanction standpoint or just a general surveillance standpoint.

So bankless listeners, there are a number of other products on Ryan's list. Celestia, FireDancer, Farcaster, Lido, CCIP from Link, Project Guardian. There's two layer twos on this list. We haven't talked about later twos up to this point. Maybe let's talk about base then from Coinbase. So why is that on your list as a product to watch and use? Well, I think just generally, Coinbase had a monster year. They stayed out of trouble. They've been in the right side of a really good relative position and all these legal battles. They're the net benefactor or sorry, beneficiary of the drama at Binance on the one hand, the concentration of kind of custodial assets on the other. When you look at all the ETF providers that have been, choosing Coinbase as their surveillance sharing partner and ultimately their custodian for these applications.

But I would actually say that one of the most interesting things about the businesses is all of the on-chain and kind of permissionless infrastructure they've been building. I think the Coinbase wallet is best in class right now, the MPC wallet. They've made a lot of investments in terms of the kind of embedded wallet as a service infrastructure they've been promoting. I even joked with Brian at Mainnet. But like I feel like I'm kissing his ass and I'm usually a pretty tough critic. But I just think that they've been monsters this year from a performance standpoint. They're almost back to break even even a pretty kind of hellish exchange backdrop. And I think base is kind of that last missing piece of the puzzle.

Right. So they had the wallet, but base basically is the parallel chain that allows them to, you know, quote unquote, you know, kind of take an L2 or a exchange-affiliated. blockchain network public without all of the baggage associated with BNB or, you know, kind of actually issuing or selling a token and then trying to prop up an ecosystem that way. So they're basically able to use the optimism, you know, stack. They can be contributors to that community. It's highly performed into their specifications. They'll be able to build an ecosystem around it.

Now the line's getting a little bit blurrier between the base blockchain, Coinbase, the company, all the permissionless tools that they're building. And you've got this kind of space. spectrum of lock-in across both centralized and decentralized, you know, alternatives for people getting into the crypto industry. So it's equal parts, I'd say, a way to, you know, continue to keep their users, essentially have their cake and needed to kind of keep users locked into the CoinBase ecosystem. But I think it's also a really invaluable hedge to have, given the positioning, you know,

in the U.S., for a regulatory standpoint where they need some way to, um, play in these frontier markets where historically they've been penalized by the uncertainty in the U.S. and not being able to fully engage, right? They were handcuffed by the number of assets they could do versus an overseas exchange. It would list everything, right? And so I think that patience is ultimately, you know, getting rewarded in the stock price, but more importantly, I think it's, it's just a really excellent, you know, kind of addition that they made and kind of, you know, core asset that they have, not that they own it outright. Maybe they'd object to my framing, but I think, you know, that affiliation and, you know, that outlet for some of this, you know,

on-chain activity to this L2 is going to be pretty invaluable for them moving forward. You think they're going to do, make a big play with USDC and stable coins on top of base? Well, yeah, yeah. I mean, I think that was one of the big, one of the big additions here is the ability to actually, you know, natively pay for transactions using USDC and not just, you know, another kind of roll up token, right? So I do think, you know, there's, there's some 40 chess that's being played on base and all of it is kind of, you know, net good for users. If you look at, you know, kind of friend tech and the explosion that it had over the summer, that whole onboarding process, the bridging on the coin base wallet to base, the, the kind of scalability of, you know,

that MVP, I think they knocked out of the park. Some of that was Front Tech, obviously. A good chunk of it was, but I think that infrastructure that's been laid, you know, was part of what powered it. So, Ryan, you've got an entire section here on crypto monies, and we've already, you know, touched upon a number of them that are listed here. We talked about Tether. We talked about USDC. Of course, we talked about Bitcoin, right? And when you look at USDC and Tether and you look at Bitcoin, we see both ends of the spectrum. I think Nick Carter calls Tether and USDC crypto dollars. I kind of like that term rather than stablecoins.

It's kind of like a dollar-backed IOU, if you will. And then we have our completely separate store of value assets like Bitcoin. So we have both sides of those spectrums. Do you think we get anything else in between? I mean, every cycle, it seems like we try something with crypto-collateralized stable coins. I mean, you could say Maker Dow has been somewhat successful with Dai. That's still at play. It's not growing as fast as maybe, you know, the Bulls would have hoped.

We tried some Algo stable coins last cycle that absolutely collapsed. What's new for us in the, in the crypto money thesis going into 2024? What do you think will work? Honestly, you know, I'm not sure. I, so I was interested in Terra in kind of mid-2020 because the affiliation of CHIA, the payment application, and, you know, what I thought at the time, and again, again, there's a lot of, like, allegations have been thrown around, but, you know, now folks are saying that, you know, all those volumes were fake and, you know, that application wasn't real or whatnot.

But at the time, it seemed like you had a payment application that was useful with some underlying economic model that could ultimately, you know, kind of feed the algorithmic stable coin and create at least something that wasn't just turtles all the way down in terms of a, a, a, crypto collateralized money. And the issues and the blowup risk were well known from day one, but at least you had that kind of fee engine and that, you know, potential path to sustainability that was interesting. And I forget the market cap at the time, but I think it was, you know, it was, it was, it was low, right? It was like $50, $60 million or something like that. So it was, I think, a reasonable bet to make if you thought about, you know, could someone or could some model

ultimately come to fruition that that figures out how you can bring a undercollateralized stable coin to market that doesn't just collapse from day one under its own weight. And I've kind of gotten, I don't say jaded. I'm very skeptical. I feel like that was probably the closest we were going to get to running that experiment at scale. And I'm almost not sure whether it's worth running again because the risk will never disappear. peer and you saw how catastrophic the losses were from Terra getting to, you know,

40 billion or, you know, whatever, whatever the high water mark was. Yeah, I could imagine the repercussions of an algorithm of stable coin that tweaks some of the model parameters and then got to 400 billion, right? Or 4 trillion, right? Now you're, now if that unwinds, you're collapsing the global economy. So, you know, I don't know. Like, I, I, I think that, that there's, I think there's some interesting plays that are being contemplated right now. I know, you know, a couple of folks have written about flat coins and, and, you know, do you have stable coins that could, you know, potentially map to purchasing power versus, like, actual, you know, like US dollars. I don't know. I think it's going to be extremely difficult. And I think at

some point you, we're going to have to have cooperation with nation states when it comes to stable currencies. That's not to say that they won't ultimately all fail or hyperinflate or at the very least inflate. And so you lose purchasing power over time. But, you know, part of me kind of things like that's what Bitcoin's for, right? I get that. On Bitcoin and then on your dollars, but like don't try to mix the two and then create another just catastrophic. That's kind of a barbedo type strategy. Yeah. Right. We have our crypto-native assets and we have our... And again, I don't, I don't mean to knock, you know, any of the entrepreneurs or any of the folks that are trying, you know, because maybe someone figures out a model that works. But I don't know. I think it's just, you know, this is actually one area where I'm probably more on the side of, you know, financial regulators than people would think that I would be. I don't think that we should be fucking around with algorithmic stable coins anymore because, you know, because the bigger they get, the riskier, they are. You can look at, you could, you could, you could point to any algorithmic stable coin project right now and show me a thousand positive metrics. And the question is going to say, okay, well,

what happens when this becomes a hundred million? Right. It comes a billion when it becomes 10. But like the more successful it is, the more pronounced the risk get and the higher the incentives, the greater the incentives are to break that. So, you know, I am, fortunately, you know, I've gotten good at identifying top signals, so I didn't lose my entire, you know, terror investment. I sold a good chunk when Mike Novogras got his tattoo because I thought that was a top signal. But that was also a few months before, before, you know, Doquan got, you know, really started to go off the rails publicly.

So, you know, I kind of dodged a bullet there. Well, let me ask you another question about our crypto money missing, a missing feature is privacy. But do you think we're going to get that? I know you've long been supportive of the Zcash project. But also, I mean, I feel like if there's one battle that feels somewhat unwinnable in the U.S., it's just like privacy. I mean, we've got tornado cash, smart contracts being sanctioned. Do you think we can get privacy on our crypto monies, either at a, you know, crypto-native store of value, like ether, some sort of set of smart contracts, a layer two, something to give us private transactions? I think that what Zucco and the kind of whole Zcash team did in terms of the same.

of advancing like that whole field of cryptography is I think it's incredible and I think it's going to be, you know, it'll be a notable achievement for a long time. The original sin of Zcash was restarting from the same issue and schedule that Bitcoin did, which I don't think could be repeated, right? Bitcoin was kind of a miraculous bootstrapping mechanism because it was first. And And with Zcash, you had this instance where from the second they launched, it was a straight shot down. So you could never build excitement out of the early, you know, base. You could never, you know, really get people fully bought in and kind of fully endorsing or kind of promoting this technology. And then you also had all of the headwinds from the regulatory state.

But even today, if you look at Monaro versus Zcash, you know, Monero is almost an order of magnitude bigger now. And part of that might be because of the issue and schedule and kind of the way that they brought the token of market. But I think another big element is maybe ZK tech, I would argue it probably is one of, if not kind of the best privacy preserving techs that we have. But it's better instantiated at the application layer for these networks. And it is at the base layer for two reasons. One, not everything needs the same level of privacy. And so if you, you know, privatize the entire chain and you basically render all blockchain analytics obsolete, you have, you have bigger problems even than MLKYC, right? You know, with ZCash, if everything was private by default and shield of transactions, it also at scale would have been very difficult to audit the supply long term, right?

And, you know, that creates, I think, some risks that, you know, financial regulators worldwide just would never allow for. But I think the other element is the flexibility that you get from having like quasi public, quasi private and like the spectrum of privacy is probably going to be better for almost all users, right? Because think about the case of like an audit, right? Yeah. If you're a big bank, you can't just, you can't showcase or kind of tip your hand as to what you're doing with customer funds on. chain, right? Because someone like chain analysis could come in and they could review the wallet addresses and they could say, okay, this is JPMorgan and they have this customer set and this company just reported earnings. And so like maybe this address or like this, this on

chain movement is due to like, you know, this particular transaction, whatever. You just can't have that. So I think the kind of hybrid privacy model is probably something that is going to work better at scale. And the paper that's Vitalik, Amin Soleimani, someone from Chainhouse, a couple of other academics, you know, came out with earlier this year. Privacy pools is kind of this, you know, I'd say bridge model that that might work. Do you think the regulators go for that, though, Ryan? That's actually my bigger worry. I'm with you that privacy needs to be an app.

I think it's going to be a fight no matter what. I don't think they want crypto to exist, at least not this administration, right? This financial administration doesn't want crypto to exist. So we already talked about that with Elizabeth Warren. I think, you know, if, depending on what happens in the election next year, the U.S. Does any administration though? work, right? Like just the financial surveillance, FinC, OFAC, you know,

North Korea hacking billions of, you know, like in DeFi. I'm worried that neither side of the spectrum actually wants crypto to be private. Well, we know one doesn't. We have, or we're cut out with the other,

right? French. And, and I think, you know, the one thing I will say is there are kind of two camps on both sides, right? It's kind of weird. When you think about privacy and civil liberties, the old wing of the Democratic Party and like the old school progressives like Ron Wyden have much more in common with the new, quote unquote, conservatives, the more libertarian conservatives that, you know, are kind of pounding the table on civil liberties and like, you know, the Bank Secrecy Act as an over. overreach or, you know, but whatever, whatever the case may be, right, just trying to rein in, like the surveillance, you have powers the state.

You know, Ron Wyden fought for crypto in the 90s in terms of like crypto being encryption, right? And now I think you're sure. No crypto wars on the right. And then if you if you kind of run it in reverse, right, like the Dick Cheney, you know, Patriot Act school of the Republican wing and all the neocons, you know, now they're getting lambasted in presidential debates, right? It's like, you know, Dick Cheney is a slur in Republican debates now.

And I think that neocon, you know, establishment is essentially dead. I mean, I think that right now, probably 70% of the demand for or maybe even close to 75%. In the Republican Party, if you just look at kind of the leading candidates, you know, it's for, I'd say, like anti-neocons, right? So kind of this new, more libertarian strand of the Republican Party. So it's just kind of like freaky yo-yo of the two parties and kind of where they stand from, you know, at least that form of progressive, progressivism or kind of libertarianism, civil liberties in particular. So, yes, there are some old school, like classical liberals that are on the right side of this. But playing the percentages, it's very skewed in one direction. All right.

And you know that. Everybody knows that. We got some fights ahead. So let's maybe talk about the last piece of this, which is policy. So your takes on policy. And you've got an entire section. I think it's like 30 pages or so about policy trends for 2024. And I want to zoom out and get the context because we're not going to be able to cover all of this.

But you say this. I wrote this chapter for people who want an unfiltered perspective about what it will take for crypto to win in the U.S. that's really what I want to hear, an unfiltered perspective on what it will take for crypto to win in the U.S. I know you're based in the U.S. You know, bankless is also, David and myself are based in the U.S., even though bankless is also worldwide. And you've made the case very strongly, which I agree on, which is like we have to fight it here, right? Because if the U.S. falls and does not protect crypto liberties, then where do we go? Right?

I mean, Europe may follow suit. We have Mika, which you can weigh in on. Anyway, let's get to this. What do you think? Give me, give bankless listeners the unfiltered take on what it will take for crypto to win in the U.S. going into 2024 and beyond. I'll start with an interesting disclaimer, which is I'm probably not going to talk much about politics next year. I gave myself like a one year.

I know people don't really believe me about this, but I wanted to give myself a year buffer between the election. and my political discourse because I just, I think it's going to be, I think it's a losing battle. I won't give you that maybe over beers. I'll give you the full anecdote. But literally there was one conversation in particular that happened like a week on either side of the one year mark before the November 5th election. And the change in attitude between this person like a week before and a week after in terms of like some of my rhetoric was like hilarious. And I was like, this is just kind of confirmed that like this is way too spicy to be involved with as a sitting CEO in an election year, right?

Like I'm not full-time politician. And so, you know, some of the things that I'm saying, I think about, you know, more through like an analyst lens. And as someone who just kind of knows what we're going to need to do to win for the industry, even if it's politically unpopular because it is, it does skew in one direction pretty decisively. So that's one disclaimer. I'd say the, we already talked about Elizabeth Warren at length. And I think that's, that's kind of the thrust of where we should maybe dovetail the conversation because this is actually a good segue from the previous point. And this is a criticism that I hear sometimes.

It's like, well, if Trump is the Republican nominee, the Trump administration was no friend of crypto, right? Steve Mnuchin tried to ban. That's what I think of specifically. Self-hosted wallets in the way out, right? It was like January 2020, was it? And he, that was one of his last acts, right? I almost got there.

Yeah. And, and, and there's some truth to that. And it's one of the reasons that, um, uh, again, personnel is policy. And the, the, the reason that Elizabeth Warren is so effective is the same reason that we can actually make pretty significant strides as an industry, um, on both sides, but particularly on the Republican side right now and making sure that, um, some of the voices that are elevated have, um, like a strong libertarian or kind of civil liberties focus behind their personal platforms, their personal ethics, because those will ultimately be the people that are selected for another administration. If it is Trump and we get the same kind of Goldman Sachs, you know, bankers that we had,

you know, in the last administration and the last however many administrations, that just don't like this industry, you know, we get another Mnuchin or, you know, basically maybe he comes back, right, for instance. then yeah, we're not really marginally improved. Or maybe we are marginally improved, but only marginally improved. There's nothing that's like really different about the, you know, whether it's the Biden administration or the or the Trump administration, depending on who the personnel are. So, you know, for instance, I've been very supportive of Vivek Ramoswamy, as you know, you probably know. And he has a small path to actually getting the nomination.

who knows what happens in 2024, but just looking at the polls, it's a very narrow path. If Trump is out of the equation, he has a much greater potential path. But if Trump is in the conversation, he's probably going to be a nominee. And you want as many people like the vague in that inner circle and in a position of influence as we can possibly have because the administration is just that. It is a large group of people with one person at the helm, but it matters who's in the room. And we didn't have that with Steve Mnuchin. So I think this proxy game is really important.

And we can actually learn from Elizabeth Warren in that regard. So I won't spend too much time going on the, you know, I don't want our options to be what they are for the presidency. But, you know, I don't get to pick. The important battle that must be won is in the Senate. There is no future for crypto in the U.S. if the Democrats hold the Senate. Really? At least not until 2030. So the good news is that the electoral map, or 2029, effectively, right, when, you know, when there would be, you know, another administration that's sworn it. And that's because Elizabeth Warren and Sherrod Brown, who's the chair of Senate banking, will remain blockers on anything productive and essentially let any financial regulator kind of run roughshod over the industry in perpetuity if they're in there.

the oversight chairs and in that position of influence. So if you have a changing control in the Senate, and it goes from, you know, 5149 in favor of the Democrats to 5149 in the other direction, which is really only going to require one net seat since West Virginia's Joe Manchin has decided he's not going to run for reelection, that's the difference between, you know, who has the final say on financial regulators. And so if it is a Biden real, election, then the radicals will just get kicked back outright, right? Someone like Gary Gensel will never make it through again. And if it's a Trump administration, you're going to have more of like the Hester Perch camp or someone like, you know, Christian Carlo or Brian Brooks, who served in the last

administration that sit in some of these positions of authority. And that is a very material difference for our prospects as an industry. The Senate matters. And obviously, you know, presidential matters. matters. Does Congress – but I would say the Senate is the most important, right? So, you know, we can – we can survive, arguably. I have strong feelings on this personally, but, you know, we're not going to have an impact on the presidential election. But I do think that we can survive another Biden administration if the Republicans have the Senate. And we have our ducks in a row when it comes to who are some of these, you know, nominees for the financial administrators?

But I think if it's a clean sweep for the Dems, then, you know, move your family. Wow. Really? Move your family? Like, seriously, like, tell me about that. How much if this is pure anti-crypto Senate? Or pick another industry, right? I mean, I'm not going to be doing crypto in the U.S.

if it's a clean sweep from the Democrats. You see? Like, why? What do you think happens? Like, I think it's important to. I mean, you know, well, you just need to open. your eyes, Ben. I mean, like, we're all seeing what's happening. I mean, this, this, this, this hostility is not going to end, um, from, uh, from this party under his current leadership. I mean, yeah, they've, they've already worked their hand. I mean, it's, it's really bad now, but like, I, I, I, is there a world where they ban D5 front ends and, you know,

I would say, I would say, it, it doesn't, I think that's the wrong framing, right? What, what would be worse is no light at the end of the tunnel. And I just, I think that everybody will come to this conclusion naturally when it gets to that point, if it gets to that point that the U.S. is just not for crypto business. And you already see this, you know, writ large, every entrepreneur that's starting a new project, you know, encourage them that they're going to touch anything related to crypto protocols and you have the ability to do it offshore, you do it offshore. Don't do it in the U.S. You're seeing this with all. of the major crypto companies kind of hedging their bets, expanding to Europe, expanding to Dubai,

expanded to Singapore. And, you know, this is this is the worst kept secret, you know, within the industry in the U.S. People are saying it privately now out loud. But, you know, I've been saying it publicly since kind of mid-20201. I mean, we're going to need some political changes in order to, you know, just have a workable framework within the U.S. So basically, if Democrats win the Senate and Democrats win the presidential, you basically feel like it's lights out for crypto in the U.S. for the next four years, at least for the industry. Because I don't see a, I don't see a scenario where the Democratic Party keeps the Senate and Sherrod Brown is not still the chair of the Senate Banking Committee. And Elizabeth Warren is not still in the catbird seat in terms of influence when it comes to crypto policy in Senate banking, which are the oversight committees.

Do we have any defense in that other branch of government, which is the court system? I mean, we've won a few things lately. Yeah, but it'll take years. I mean, that's the Hail Mary, right? But, you know, at that point, again, if it's a clean sweep in one direction, you know, these justices don't live forever either. So the window of time where there is a majority on the bench that would be sympathetic to, you know, crypto as an industry and, you know, at least leaning in that direction to

to check the power of the administrative state. You know, that's, that's not permanent either. And if you extend that out another, you know, five years, we're just as likely to get an unfavorable court ruling from on high as a, as a favor. Wow. I didn't know your takes where, you know, like, this, this raw, I guess you promised raw and unfiltered, but basically, like, this is existential for, like, the 2024 election is kind of existential. Again, I know, I know this is, I know this is going to, you know, this will probably rub some people the wrong way. And, and, you know, maybe we'll even hear some policy folks kind of chirp, but just trust me, if you hear anyone chirp, it's K-Fabe, go back to that word.

You know, this, this is, this is more or less known. And I'm looking at this just as an analyst, no bullshit. Yeah. What the state of affairs actually looks like. And at some point you need to take people with their word. I mean, Elizabeth Warren, when she, when she's raising money. I believe for now. To raise and to, you know, recruit an anti-crypto army.

And every single story that you hear from, you know, kind of leaders, you know, on that side of the aisle, you know, in the Senate and basically in the positions of kind of greatest authority, it's all tying us to North Korea and money launderers and tax evasion and blah, blah, blah, but it's just a lit. Well, it really scared me. Honestly, Ryan, was when she got Jamie Diamond saying the exact same thing in front of Congress last week, basically just saying, yeah, it's criminals. And, you know, and, you know, I saw all the memes. about, you know, J.P. Morgan and Jamie Diamond. I mean, I didn't really think too much of it. I thought the best interpretation was, you know, if you're Jamie Diamond, you've got the in-house team that's working on, you know, permissionless blockchains. And, you know, if it's a Democratic-run Senate and White House, then, you know, if you're saying the right thing, you're not going to get

a nasty gram from Elizabeth Warren. And if it goes the other direction, yeah, they're still going to be the net beneficiary because, you know, the rule. Playing both sides. Classic. The rule is J.P. Morgan always wins. Okay, well, let's not leave folks here, though. That's his responsibility as kind of the CEO of that company. Let's not leave folks here. So what's on the flip side? Let's say crypto wins some, you know, crypto-friendly politicians in the Senate and also, you know, presidential.

What do you think? Is there a rose of your picture here for the next four years? Look, I just want to be very explicit about this and just reiterate. Like, there are some very excellent leaders in D.C. tend to be 20 years younger that understand the tech, that understand, you know, the potential for this technology, you know, across the board in terms of financial inclusion, in terms of, you know, economic development. And these leaders span the aisles that you would say.

Yes. Jell Brands, Ron Wyden, on the Senate side, you know, Richie Torres, Rochana. Like, there's a number of folks, right, in the House. So this is not a universal truth. but the reality is the folks that are in the most important seats on that side of the aisle, the senior most committee leaders and the people that are ultimately going to be blockers on policy. Like, that's what's at stake, right? It's not whether there are good individuals on either side, but this is just kind of the dynamics that, you know, and power structures and play.

Anyway, that's my final disclaimer there. I feel like I've had like six disclaimers. I'm still going to get a lot of this. I'm going to get for this segment. So, but I think the, I think the. in the kind of long arc of history, time is our friend. Crypto remains inevitable as a technology. And it's just a matter of where it blossoms first, right?

And where it kind of firmly takes root. And I think the economics, the incentive structures of crypto incentivize competition in much the same way that startups are incentivized to disrupt the incumbents. So it would not surprise me. And in fact, it's probably the expected outcome that a technology like crypto is going to be fully formed and brought to mass adoption by an economy, not named the U.S. for the sole reason that the U.S. currently has the reserve currency, the dominant financial system and the world's largest military. It's like innovators dilemma type stuff. And so we've got an innovator's dilemma in that regard, right?

So that would not surprise me, but I, you know, I've got my family here and I like it here. And, you know, what's that line from office space? Like, why should I change my name? He's the one that sucks, right? Like, like, why should I move? Like, they're the one to suck. And, you know, they just won't refuse to step aside even though, like, so many of these folks are, you know, closer to, closer to the end of the line than

crypto is, that's for sure. But I think compounding, just if you zoom back, like zoom out a little bit and you just look at everything that's been developed. You know, crypto, Bitcoin didn't exist 15 years ago. Ethereum didn't exist until 10 years ago,

even as a concept, right? It didn't launch until, you know, nine years ago. Solana was born five, six years. years ago as a concept. Defi really didn't blow up until the summer of 2020. NFTs a year later. Just you just go through the list, man. And it's just one development after the other. Yes, there are these hype cycles. Yes, there are these big crashes. Yes, there's a ton of headwinds from some very powerful people that don't like us right now. But eventually, growth almost always wins out. And you can be a stick in the mud for as long as you want to be you're you're either going to come along for

the ride or you're going to get left behind and I think whether that happens to the U.S. or internationally, maybe it starts to happen internationally. And then that old like Churchill saying comes through like you can always count on the U.S. do the right thing when all other options have been exhausted. Yeah. Maybe that's maybe that's our saving grace in terms of how we, how crypto you know comes are proliferate in the U.S. But I think there's multiple paths to get there. One, I didn't say it's over forever.

I just said until 20, 20, 29 or so, depending on the outcome of this election. But that's not a permanent condition either way, because this technology is not getting uninvented. There you go. What a great way to end it.

Maybe we'll wrap here. But Ryan, I just want to ask you a personal question. So what's still exciting to you about crypto? I've seen you tweet before, like you still love this industry. I'm assuming you still do. What's,

why are you still here, man? I am literally excited about everything. So just, you know, I'll end on another positive note. I mean, I think it's going to be a costly and really intense battle next year. But I have never been more confident that, you know, we're going to move the needle politically. And so I'd encourage people to, you know, check out the resources that I link to in the, in the Theses. I think the three to watch or Coinbase is down with crypto movement. The Blockchain Association, Kristen, you know, has done a great job. United the Warring Tribes and the Blockchain Association Summit just had a who's who of speakers a couple weeks ago. And then Mike Carcase from Fairshake, who's running a super PAC. I think he's going to raise some eyebrows in the New Year. So I think there's room to be optimistic and I certainly am. And I'm probably most excited.

The thing I'm most excited about, Ryan, is I wrote the policy section first, knowing that my work here is done. And now I'm going to spend, I'm going to spend 2024 being a complete degenerate and playing and playing with all the toys. Have fun. And literally just dog fooding and power using our product as a, as an investor and show showcasing all the functionality. Yeah. What a great.

I mean, and speaking of the long arc of history, 13 years from magic internet money from zero all the way to an ETF. And I believe we'll get that in 2024. So crypto has come a long way. We've got a ways to go. but we've come such a way. Ryan, thank you so much for putting out these theses. It's been a pleasure talking to you about this.

Likewise. Thanks, Ryan. Bankless Nation, action item. We've got Brian's report right in the show notes. So go check that out. Read all of the pages. They are fantastic. Got to end with this. None of this has been financial advice,

certainly not political advice. Crypto is risky. You could lose what you put in, but we are headed west. It's the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.