Bankless - SotN #2 - CHURNING; ETH bears wrong, Venmo loves crypto, Gas fees good

Episode Date: June 24, 2020

STATE OF THE NATION #2 - Tuesday, June 23, 2020 The State of the Bankless Nation is....CHURNING! The Bankless boys discuss why.  Subscribe to get new episodes every Wednesday! (Get it 1 day earlier on Bankless YouTube!) Watch the video here. Covered: 1) Why isn't ETH pumping? (BEARS are wrong?)  2) Venmo onboarding millennials to crypto (and just in time)  3) Gas prices are bad (or are they good?) We show you how: 1) See ETH locked in DeFi 2) Look at ETH/BTC transaction fee revenue using Coinmetrics   ----- GO BANKLESS WITH THESE SPONSOR TOOLS:   💸 RAMP - FIAT ONRAMP FOR DEFI (ONRAMP $100k FREE WHEN YOU MENTION BANKLESS)https://ramp.network/ 💳 MONOLITH - GET THE HOLY GRAIL OF BANKLESS VISA CARDShttps://monolith.xyz/ 🌈AAVE - LEND & BORROW YOUR CRYPTO W/O A BANKhttps://aave.com/ 📈MULTIS - BANK YOUR BUSINESS W/O A BANK! (1 MO TRIAL - JUMP QUEUE WITH "BANKLESS")https://multis.co/  ----- RESOURCES: 1) Learn about Economic bandwidth: Listen: https://bankless.substack.com/p/bankless-podcast-economic-bandwidth Read: https://bankless.substack.com/p/the-trillion-dollar-case-for-eth   2) Read Protocol sink Listen: https://bankless.substack.com/p/12-the-protocol-sink-thesis 3) Coinmetrics Transaction revenue chart https://coinmetrics.io/charts/#assets=btc,eth_roll=7_left=FeeTotUSD_zoom=1279411200000,1592784000000 ----- ACTIONS: 1) Read the new Bankless Starters Guide https://bankless.substack.com/p/-guide-1-starting-with-bankless   2) Subscribe to Bankless YouTube channelhttps://www.youtube.com/c/bankless 3) Check out the Daily Gwei by our friend Anthony Sassanohttps://thedailygwei.substack.com/   ----- Don't stop at the show! Subscribe to the Bankless newsletter program http://bankless.substack.com/   Visit the official Bankless website for resources http://banklesshq.com/   Follow Bankless on Twitter https://twitter.com/BanklessHQ   Follow Ryan on Twitter https://twitter.com/ryansadams   Follow David on Twitter https://twitter.com/TrustlessState   Follow DeFi Dad on Twitter https://twitter.com/DeFi_Dad   ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This is not tax advice. Talk to your accountant. Do your own research.   Disclosure. From time-to-time we may add links in this channel to products we use. We may receive commission if you make a purchase through one of these links. We'll always disclose when this is the case.

All right, everyone, welcome to a June 23rd edition. Our second episode of State of the Nation, we are glad you are with us. So here's what we do in these episodes. We talk about what's going on in crypto, and we relate that stuff to the big picture to help you understand the state of the bankless nation. So we release these episodes right here on YouTube every Tuesday. Make sure you subscribe. and then we also release them on the bankless podcast on Wednesdays.

And here's the question I always start out with. I'm going to relay this one to David. David, what is the state of the bankless nation today, sir? The state of the bankless nation is churning. We are churning at the moment. Last week, the state of the nation was bullish. I said that defy tokens had really gone up a lot in price, and that was illustrative of a catalyst of all of Ethereum.

And then Ether started pumping a little pump from 229 to 243 where we are today. So I feel pretty validated about this one. So my- You totally called it. You just nailed it. Like, because, I mean, comp tokens did like after you said that, after we gave the State of the Nation, they did like a 3 to 5X after that after you said it was bullish.

Do you think State of the Nation had any effect on the comp pump? David Hoffman. Oh, one to one. One to one. It wouldn't, it wouldn't have happened otherwise. Yeah. That was my thought too. Okay. So churning. So why are we churning? Okay. So yeah. So we had that bullish week. Prices have gone up. People are all talking about yield, yield farming, liquidity farming. Like bat is being borrowed and then relent. Tether is just flooding into compound. All of a sudden, like all of defy, all the theorem is like, Tether's cool now. Like it's, we're okay with it. It's got, it's got, it's real. Like, it's here to stay. So like our, our mental models are now integrating tether. Our mental

modulates. Yeah, yeah. It's, it's, yeah, it's a real thing. Um, uh, and so like, and so there's a lot of both, both churn with like asset prices, but also churn with mental models. Like the comp governance token and the SAFG, the simple agreement for future governance is like this brand new paradigm and that we're all trying to integrate into our brains. There's a lot of change going on. Changes in the air. So things are churning. Yeah, yeah.

And I guess one question for you. So last week I wrote an article on and I published it Monday and I said, stocks are drunk, but defy is sober, right? And then we had that crazy week last week where it looks like, like, defy might be drunk too. Is it drunk? Is this like going to cause problems for us later?

Well, I mean, if we're comparing what 2017 was to being drunk and what we are today, D5 is just a little buzzed. It's been sober for a very long time and it's just really sensitive right now because it hasn't had a drink in years. So it had a small drink and now it's a little buzzed. Okay, so it's alcohol tolerance is low due to abstinence and it's just a little buzzed right now. It feels good though. It feels good. We like the buzz. We had a good week.

It was a good week. Now, I think the big question on everyone's mind is what's going on with ETH, like ETH the asset, right? So we see DFI tokens pump like crazy. I mean, you comp did maybe an 8X last week. It's down a little bit from that. AVE2 is up in the hundreds of percentage points, synthetics as well from last week. But ETH is not following. So ETH has been pretty flat, honestly.

it's been hovering around this price point of like 230-ish, just recently had a small bump, but we're talking mere percentage points. That was different. Like in 2017, in the ICO wave, that was a killer use case, a killer app for Ethereum. It was decentralized funding of the protocol.

And the price of ETH just went insane. Like, is that not going to happen in this case? Is ETH just going to kind of languish and fall by the wayside while DFI moons? Right. So like all these defy tokens, like comp, like AVE, and now even MKR, like the profits, the cash flows generated by these systems are becoming less and less ETH denominated, right? So like there's cash flows coming from Tether, which is definitely not ETH denominated, as cash flows from Dye, which is only limited, ETH denominated. And we're seeing the backing of die become less and less ETH over time. So like the bears are saying, like, ETH is losing its like supremacy over defy tokens. And the value of comp, the value of AVE is coming from other cash flows, not just ETH denominated.

And so like that is something to integrate into our brains. Like the ETH isn't the one true asset of Ethereum, right? Like there are other assets that the valuations of these DFI tokens gain their value from. We have to remember that like ever since basically now very recently, like all of MakerDAO was ETH, ETH. All of compound collateral was ETH. And it was just because there weren't other assets on Ethereum, right? It was just a matter of just like what other assets are there on Ethereum other than ETH, which was basically none. But at the same time, we've seen ETH in compound absolutely skyrocket. We've seen ETH in DFI just suck up ETH. And so it's also sucking up other assets too, but also ETH primarily is being sucked up by DFI. And so like there's going to be the defy. And so like there's going to be the. And so, like, there's going to be. this constant tug of war for a while between the bulls and bears saying like defy doesn't need eth and then the bulls are saying well yeah but like it's still using it like it doesn't need it but it's still using it like and so um uh i think that and it's another thing to it to point out is like

defy isn't correlated to bitcoin btc but ether is and so ether's got this tug of war between like being correlated to bitcoin and being correlated to defy defy has mooned Bitcoin has not. And so Ether is like stuck in the middle. Yeah, you know, I should pull this up for, pull up this graph from D-E-5 pulse for everyone who's watching. This is total value locked of, denominated in USD in D-Fi. And you could see the total value locked has absolutely skyrocketed given sort of the, the, the defy tokens adding rocket fuel to that. One billion to 1.5 billion in West. it looks like two weeks. That's insane. And if you go by the way, let me just show comp really quick.

If you go to comp specifically, this is the compound protocol that just launched the comp token that we talked about on the last state of the nation. Look at this chart. Wow. Right? So yeah, 100 million or so locked. Right. And all all assets. All assets. A hundred million, right? All assets. Pretty flat to be honest. And then they issue comp tokens and they juice the returns. basically. And we're up to 600 million now, 600 million. That's a 6x leap. Right. In terms of the capital inside of this protocol. And we talked to Dan Ellitzer about this in our episode that we released yesterday. This is not free money that's being generated. Some people are saying like comp printer go burr, right? As if this is just money coming out of thin air. It's not really. You're pulling it from future expectations of the compound print. right and you're bringing those expectations into the present and in the future uh investors apparently

if they're rational anyway they're expecting uh like comp to generate a return as a capital asset and that's why they're valuing it the way they are it's juicing returns but here's back to back to if we look at um if we look at if we look at eith locked in compound this is just eth uh denominated locked in compound look at that pump that is too good yeah so so compound now has is just under a million it was a million eath yesterday which makes us having two applications on aetherium that have what has one million eth locked in it and there's there's like a 110 115 million eth out there in total and so like how many more of these do we need before like a a meaningful amount of eth is locked up that you can't argue with yeah totally i mean it goes

to what you're saying is uh i don't think the bears like the bears are right that there are now other money assets on Ethereum that are competing with ETH. But what they don't understand is that the success of DFI, like what's good for DFI is also good for ETH. And you're seeing it right in the charts because that's increasing the total amount of ETH locked up. But like here's the question, why hasn't this borne out? Why hasn't this flown into Eith price yet? Right. So the bears would say, you know, that's because you're wrong, guys. That's because these two things are not related. I think the Bulls would say, just be patient. It's been seven days, right?

Like, these are market cycles. We've come off of a two-year Ethereum winter where Eath lost 95% of its value. This is what Amazon lost in 2001 when the dot-com bubble burst, right? 95% of its value in this winter. And investors are skinnish. People are afraid. people still are using, like they're looking backwards at a world where it was just Bitcoin

maximalism and that was the only money and they're not looking at ETH as a monetary asset. Is that the reason why I were just in a cycle, David? What do you think? Yeah. So markets have memory inside of them, right? And so like, and the defy market has much less of a memory than the ETH market does. And the ETH market has like fear and skepticleness baked into it because we went from 1400 down to 80 and now we're at two whatever. And at the same time, we have gone up a little bit. Heath did run up a little bit. 229 to 243.

Still not much. Could have been noise. Could have been uncorrelated. However, it did lead first Bitcoin. It started moving first sooner than Bitcoin did. And it was going up and then Bitcoin dumped and it pulled down Eith with it. So like, Heath moved first and it brought big and then Bitcoin also moved upwards after ETH started moving upwards. And then Bitcoin dumped a little bit and it killed the momentum of

ETH. And so like I really think that, you know, DFI is pumping and it's trying to bring ETH with it. But Bitcoin is holding ether back because ether and Bitcoin are so strongly correlated. It seems that way. You know, the other thing I'm seeing is a narrative shift. Can you see my screen right here, David? Yeah. Uh-huh. All right. So this was an excerpt. I'm not going to share the full email. an excerpt of an email I received yesterday from a fund manager. A guy I know runs a decently small-de-min-sized crypto hedge fund. He's got some other content in this, but the money line was this. My fund was 60% Bitcoin until recently.

Now we're 80% ETH and DeFi. The time has come, in my opinion, is what he said. Above that, he said basically, you know, the previous cycle, he's been allocated Bitcoin. but nothing's happening in Bitcoin right now. All of the action, all of the activity is happening in the defy Ethereum space and Bitcoin maximalists are going to get left behind and maybe they'll be a bit salty as a result of getting left behind.

I don't know for sure if he's right, but I do know that I've seen a lot of places where sentiment has seemingly shifted. Even, you know, one of our friends, hopefully he's coming on the podcast, right, Chris? Chris Berninski tweeted this. He said, if you think defy will have a smaller impact on ETH and ICOs, you aren't paying attention. Defy will flex Ethereum's ability to perform all, in bold, all financial services. This is early stage capital formation is what he said.

Are you starting to see the early signs of a narrative shift, the thawing of the Ethereum winter, and people are like coming back to ETH as an asset? Do you think we're getting closer to that? Yeah, 100%. And it's just because it's coming in so many different directions, right? Like you have your money, your money verbs icon. And like we are just knock,

Ethereum is just knocking them down one by one. Like got that one, got that one, got that one. And also I think the biggest narrative shift is the seemingly one way movement of Bitcoin onto Ethereum, right? Because it just goes to show that like people that own, Bitcoin, bitcoins or not, want to do things that do verbs with their money. And you just can't do that on Bitcoin, at least not in a custodial fashion. Okay, so take that though. So some people say Bitcoin on Ethereum is actually tokenized Bitcoin is actually bullish Bitcoin because they want to

use the better money, which is Bitcoin, even on the Ethereum network. And so Bitcoin, tokenized Bitcoin on Ethereum will cannibalize the moniness of ETH as an asset. What say you? Well, it is bullish Bitcoin, but it's not bullish necessarily Bitcoin versus Ether, right? It's good value for Bitcoin. I'm really happy that Bitcoin can do some of these things that it can do. Like you can generate a loan, a permissionless loan inside a MakerDAO with your Bitcoin. And then Ether is its own thing, right? And so, like, sure, there's going to be some, like, displacement of sorts in the same way that, like, Tether is also displacing ETH and other assets will ultimately displace ETH.

but this isn't a zero-sum game, right? Like, ether's going to go up, especially because all economic activity ends up feeding into Heath, but just being proximate to each other is always going to be good. And so, like, we can talk about how, like, Bitcoin may be cannibalizing ETH, but it's only going to do it to a small degree, and it's really going to just push the fold as to why Ether and Ethereum are important. Yeah, it's hard to replace ETH as trustless economic bandwidth. I know we've both talked about this and written about it.

We will include some articles and references to you. If you want to understand the concept of trustless, economic bandwidth will include that in the show notes. You know, one last thing we should maybe touch on before we leave this topic of why ETH might be getting left behind, but why I think both of us are still bullish ETH. And that's this. Nexo Finance.

So this is a crypto bank. Just last week, the people linked some of them. their Ethereum transactions to putting in USDT. So they're putting assets in the compound protocol. So this is a crypto bank depositing close to $30 million, there were a few transactions here, into the defy protocol comp.

You know what this is? This is the great protocol sync thesis that we've been talking about. Right? I mean, it is. I mean, we talked about in that episode we did on the protocol sync thesis, We said, look for signs of it. This is it. This is what it looks like.

You're seeing a crypto bank actively depositing funds. They're like, is it customer funds? I'm not sure where these funds are. Probably. Okay. So they're depositing funds into the compound protocol, right? So they wouldn't do that. They wouldn't deposit funds into a protocol that Coinbase is spinning up or one of their

competitors like Crypto.com. But they are inside this credibly neutral lending and borrowing protocol. That's how the defy protocols slip underneath the crypto banks. And there's the potential here, David, that crypto banks and other capital pools like them might actually be the primary consumers of defy protocols. If we're right, if the protocol sync plays out the way we think it's going to. And there's two things I want to bring up with this. One, NXO Finance, this gives NXO Finance an edge because it's getting a return that other

crypto banks aren't, right? Yes. And so that's good for NXO. it's also making compound a better protocol at the same time because the more capital and liquidity inside of compound, the better. So this is mutually beneficial for both Nexo and compound. And it's going to start to force the hands of every other crypto bank because their Nexo has this edge that they also have available to them so they need to start using it. And so like all these crypto banks are going to start, you know, and we've seen such a strong level of

competition with crypto banks. Like you need to iterate and improve faster, really, really fast. Yeah. So I think this is going to come really, really quickly. And the thing is it all converges upon the same protocols. Compound, MakerDAW, like, you know, D-Y-D-X perhaps is even one. And so like all these many, many crypto banks are going to converge upon the same D-Fi protocols. And all those same D-Fi protocols, their primary collateral is ETH. And my article, Ethereum is an emergent structure. I had this section where I claimed, Ether is the epicenter of Ethereum.

It's the capital of the Ethereum's date, right? So any application that uses some sort of crypto bank, it lands upon Ether, ultimately. Like, all roads lead to Ether. Yeah, totally. I totally agree. And it's exciting to watch the Protocol Sync play out a little bit. We'll include some information about the Protocol Sync thesis.

In the show notes, there's at least a bankless episode. You got to write an article, David. Like one of us does. I wrote this little snippet of an article, but we need something meaty because I think the protocol synch thesis is really what's going to drive the success of defy and has already driven the success of Bitcoin and Eith as assets. So the people need an article, my friend. Yeah, no, you're totally right. I need to pound that one out. Now that we have already been talking about it so much, we've already done a podcast episode on it, it should be pretty easy. Yeah, it should be. I'll bang it out. All right. Before we go any further, we want to

talk about the sponsors that make this show possible. The first is Ramp. I'm really excited about Ramp because they are a crypto-fiat gateway. So the problem with a lot of DFI applications is that most users, you know, 99% of new users are not going to have ETH or crypto in their account, so they can't even complete an Ethereum transaction. Ramp solves that in like five minutes. They can get crypto to a wallet. So the key thing here is if you're a D-Fi app developer, you want to check out how to integrate ramp inside of your defy app and you're just going to like explode growth. That's how we address the total addressable market for defies. We make fiat on ramps super easy. We'll include info on ramp in the show notes.

Part of the protocol sync thesis is that all these worldwide companies and businesses are going to ultimately use applications on Ethereum. And one way that this is playing out is through Monolith. Monolith uses the visa network to generate a payment network, but instead of using dollars in your bank account, it uses dye in a smart contract wallet. So using that dense protocol die and maker Dow and a smart contract wallet on Ethereum, you can top up your wallet with die and then go to your local coffee shop, your local whatever, your local grocery store, swipe your visa card and make a transaction that settles on Ethereum using die. So this is a great tool to live a bankless life to break up with your bank and still be able to access a normal

life that is relatively indistinguishable from people that are perhaps not as far along in the bankless nation as you are. Are you saying we should break up with our banks but not be weirdos, right? Break up with your banks but still be a normal person. Yeah. You don't necessarily have to be a complete revolutionary. Yeah. So you can check them out at monolith.xy Z to get your bankless visa card today.

Yeah, definitely we are very practical on the bankless revolution. You know, breaking up with your bank is a process. It's less like a clean breakup and more like growing apart is how I think about it. You start using your bank account less and less, and networks like Ethereum become more and more valuable for you. That's the journey we're on. It's been true in, I think, our daily living. So we expect it to be true in the future.

But speaking of bull markets, you said churning, right? PayPal and Venmo, an article came out this week, that PayPal and Venmo are getting ready to add a buy crypto feature. I got to think they're certainly going to enable buying Bitcoin, right? Because Square did that. But Ether can't be far behind because it is also the only crypto asset that is CFTC deemed their important regulatory body in the U.S. They've deemed them a commodity. No other asset has that distinction. what do you think this is going to do once this is added? Are we going to, are we going to see like

more people onboarded? Are your neighbors and friends and family and start asking you about like how they buy a ripple? I hope that. God, if they list ripple, I will throw a fit. So this is just part of the normalization of crypto, right? Bitcoins would call this hyper-bitcoinization. And if they, if PayPal only added Bitcoin, that would probably fit well into that narrative. However, the reason why Cash app only has Bitcoin is because cash is run by Jack Dorsey, and Jack Dorsey is very idealistic and holds Bitcoin in a more supreme position than other assets. PayPal doesn't have such biases or leanings, right? They are primarily focused on generating revenue. Well, they're probably going to want to, they're going to one-up square, right?

Yeah, absolutely. Add more than Bitcoin. Yeah, they're going to have to force Square's hands. So you're totally right. It's probably going to be Bitcoin and ether. And then I bet a stable coin, probably USDC. It would be fantastic if they did die. But die doesn't have the same volume as USDC. So I bet those are the three assets that are coming. And like I bet right at the gate, this doesn't really do much. It just, but again, it forces the normalization of crypto. And this is part of the settlement, the protocol sync thesis, right? Like all companies, like legacy or not will ultimately

use crypto because crypto in itself, regardless of the apps on in crypto, crypto is a dense protocol. And so they're going to, it's going to find its way into banks like PayPal or banks like, you know, Wells Fargo or whatever. And so this is that playing out. And PayPal, every, every single person, not every single person, but like a lot of people have a PayPal account, especially millennials, right, especially young people. And it's also in Venmo. Like, it's also going to be an app on your phone that you already have KYC'd with. You've already submitted your ID. Be wary of that, by the way.

And it's already going to be a tool that you have to instantly buy crypto and send it into the Ethereum economy. Yeah, I think this is really important. I mean, so this is how millennials and certainly Gen Z pays for things, right? Like, you know, we're even like beyond paper out. It's just Venmo. You know, if you're buying, selling anything from anybody who's under the age of like 35, it's going to be on Venmo and providing a gateway, an in-app gateway to purchase crypto is really important, I think, for this generation to get into it.

I saw this tweet earlier this week about millennials having basically no money, right, in terms of wealth as compared to previous generations. So if you compare boomers to millennials, boomers at the age of 29, or 39, and now, like, you have to remember, the oldest millennial now is 39. which is like crazy to me. Wow. But boomers had 21% share of the wealth when they were 39, when the first boomer hit 39. Millennials have 3% of the total U.S. wealth now that they're at the age 39. So this generation, the millennial generation,

is not doing better from a wealth perspective than our parents were. And to me, I think we make the mistake a little bit as, like millennials in looking for the nation state to solve all of these things because the nation state is not necessarily equipped to solve these things. The nation state is in a process of being squeezed. That's what the last 30 years, at least in the U.S. have been. It's been a squeezing process. And right now, with all the money printing you're seeing, it's a squeezing process of the U.S. dollar as reserve currency status, something that the U.S. essentially has worked for over generations. It's being squeezed out right now. I think the big opportunities for millennials

are actually going to be in these digital nation states, as we call them, like Ethereum and Bitcoin. So having a gateway to those digital nations in apps that are easy to use and that we already use is pretty important, at least to me. And I do think these younger generations will be all about that. And I hope they are. And we've already seen the demand for this sort of activity from millennials, right, from the Robin Hood rally, right? People are taking their $1,200 like COVID check, their Trump bucks throwing it right into Robin Hood and buying Hertz as it goes bankrupt. Because they, they know that these, this sort of like GDP growth that came to the boomers is not coming to them, right? I think in a similar stat, like GDP growth during the boomers when they were from like 20 to

35 was like 34% and millennials it's been 11% and so we have seen one third of the growth in GDP it in our best years in our best professional years than boomers have right and so what's what's that's doing is like millennials are like like well you know fuck it like if I'm not going to get a I'm not going to get a high paying job and so because robots are going to automate my job away so I'm throwing all my money into Robinhood because this is like this gambling app so at least I have some chance of like generating some sort of wealth for myself. And like, and so that's because there's risk there's also risk in defy. There's also risk in crypto. There's also risk in Ethereum. And so I think this is just and but this is like real risk, not just fake Hertz is going to the moon

because they're going bankrupt risk. Like this is real like value like measurable. There's no there's no fed backing up crypto right. There's no bailouts coming for us. Right. Nope. Wildless. Like millennials have this risk appetite, right? Because they are looking for greener pastures. And in my mind, there is no greener pasture than crypto, especially defy, especially decentralized finance. Well, because Ethereum, you've said it before. Ethereum is an entire economy, right? It really is. It's like going out west and settling, right? And people in the East Coast who were comfortable in their positions and secure and fine with the status quo. Those weren't the ones traveling west in search of gold and opportunity. It was it was the people who are looking for another chance, looking for an opportunity

outside of the existing constructs of the system. And that's really where I do think the opportunity is there. It's not GDP growth in the U.S. It's GDP growth in the Ethereum economy. Also to add on to that to that metaphor, like people went west to escape the tyranny of the state. Like they wanted to be free. That was also a real thing. And so that is a direct one-to-one comparison. Yeah, that's why I love that analogy. David, before we go any further, we should talk again about our sponsors. So I'm super excited about Maltus. So they've decided to sponsor bankless on the show.

And they are really providing a bankless business account. So they've released a new addition of their application. This is like a bank user interface, but underneath it's all Ethereum and D5 protocols. And we're going to be releasing a video on the channel about that too. And I plan to convert some of my business activity to Maltus and give it a try. And you should too. It is like a bankless bank account where you can operate your entire business on DFI, on Ethereum. Super powerful stuff.

We'll include more info in the show notes for you to check out. Another great application on Ethereum, which we talk a lot about, is AVEA. AVE is a borrowing and lending application. You can supply assets. You can borrow assets. You can get an interest rate or you can pay an interest rate, but what's different about AVE is that AVE will give you stable interest rate payments. A really important tool to build out this DFI economy, this economy on Ethereum.

If you are pulling out a loan, you need to have some assurances that the interest rate on that loan isn't going to jump up to like 20% or something crazy, which we have seen before in DFI. So you can get that sort of stability and long-term thinking using AVEA. They also have A tokens, which are representations of the assets deposited in their protocol, which has the interest baked into the tokens. So you can use those to transact while also receiving interest rates, interest payments at the same time. Check them out. They're a fantastic protocol.

Check them out at Avey.com. David, one more thing we should talk about. We're trying to keep the show a little bit. We tend to go on for a while. So we've got one more topic. We're excited. excited about this stuff guys so you got to forgive us we're going to try to keep this to 30-ish minutes but I think we might be close to that now anyway let's talk about gas all right so

gas prices are too damn high you you agree or disagree like here's the gas price right now I'm sharing it this is eth gas station fantastic site so again eth gas is required for every Ethereum transaction and gas prices go up and down right now they're fairly expensive I remember time not long ago when it costs too guay to send a transaction. Now it's 46. It's been like 46 to 70 for a while. Is this a good thing or a bad thing for Ethereum? So I think actually the very, the very correct answer is it is a thing.

And so it is both good and bad. You're dodging the question. It is both good and bad. And to what degree it is good also generates some equal and opposite amount of badness. And so here's what I mean by this. The high gas prices on Ethereum represent or correlated to the potential returns that you can get on Ethereum, right? If there are high returns on Ethereum, there's going to be high economic activity and there's going to be high demand for block space. Also, fees are good for the long-term health of the network.

In this new digital nation world, feeds represent taxes, and the taxes are the thing that fund the economy, right? They prevent, they secure the Ethereum economy. So when we see high gas fees, we can safely rest assured that like the Ethereum economy is going to exist a long time into the future because that's where revenue for security comes from. At the same time, it's bad, right? Because, you know, high fees price people out. And this is the main concern that like the Ethereum side of things has versus the Bitcoin side of things, right? If we have an inflexible block space and extremely flexible block space demand, what you get is really high. fees and it ultimately forces the small guy out and only allows the large capital holders in who can

afford those fees. So that's bad. We don't want that. And that's why Ethereum has always committed to scale. And so there's there's pros and cons. There's pros and cons. It's good and bad as you say. It does seem to be the case. Look, there's always going to be limits to the amount of block space available. It's a scarce commodity, right? And it does, we talked about this with Nick Carter. It does seem like high density economic transactions. By that I mean like the big ones, the high value ones, are going to be the ones that are prioritized because those transactions are the only ones that will essentially be able to afford these kinds of fees. And the lower value transactions will move to layer twos, to side chains, maybe even to crypto banks. So even though Ethereum is

scaling, there's still a limit the amount of transaction space in the Ethereum network. And they're always will be, right? Absolutely. Yeah. But I would say, like, if you force me into a corner and made me answer this question, I would say it's a good thing because the alternative is having, like, one, get gray fees or two gray fees. And that makes us look like a ghost chain. And so, like, at the end of the day, we do have to do this deal with the devil and ask for high fees, because that means our chain is useful. That means our chain is in demand. And I would prefer that to low fees. There's a lot of ghost chains out there. A lot of ghost cities. In fact, almost all of them are, go look at the transaction fees.

We'll put this in the show notes. Go look at the transaction fees of Dash or Ethereum Classic or Bitcoin Cash or XRP. It's nothing. Like if you're looking at this chart, this is, okay, so this chart is Bitcoin in red and Ether in purple, right? These are the daily transaction fee revenue. Okay. So let me just click in XRP. Let's see, XRP, way down here.

And this is a log scale graph, right? 95 bucks a day, baby. 95 smackers for the whole XRP network. That's how much they're making in transaction fees. I don't even know who's paying that, but it seems overpriced. But Ether now is 540K per day. And over the past two weeks, 14 days, it's actually been higher than Bitcoin. So Bitcoin right now is 332.

This is the highest it's ever been over Bitcoin for this long. amount of time. The last time it was, was in 2018, the last 14-day window. But if it goes another week, it probably will be the longest time transaction fees on ether. So what that means is blocks based on Ethereum is more valuable currently than blocks based on Bitcoin. Like, that's what that means. It doesn't mean the asset is more valuable, right? Bitcoin is, Bitcoin, the asset is worth more than ether the asset. But it does mean the Ethereum block space is worth more. Right. Which is- Let's do some, let's do some eth killers. Will you? click in ADA and BNB.

Are you just trying to embarrass these guys, dude? A little bit. Like, they're never going to sponsor us now. Oh, no. Oh, wow. Oh, look, Cardano is beating light coin. Hey, Cardano flip into light coin. All right.

Let's do BNB right below ADA. Wait, what is B? Oh, Binance. Well, this is, you know, the whole finance casino. It's got that going for it. Oh, they have over a thousand. Yeah. Finance has over $1,000.

in daily transaction fees. Right. On the board. On the board. Yeah, I mean, we could like like coin. Oh, don't do it. It's like long. Oh,

like coin. Yeah. It's, I mean, no one cares about block. Like no one's willing to pay for block. And look, there was a time,

look at this, there was a time when no one cared about Ethereum either. Mm-hmm. Right? Let's be honest. Look, back 2016, no one cared. No one cared.

And then they started to care because DFI got its first use case, January 27th. And then they really started to care. Right. And now, Ethereum block space has been consistently valuable up until about that time. And it's seeing a resurgence and its value. So it's interesting to watch.

We don't have time to talk about all of the implications. There's a whole discussion we could have, David, about like fixed issuance in your monetary policy, and how that is supplemented by transaction fees and how Bitcoin is essentially moving to a network that is all transaction fee. you know, revenue driven from a security perspective, but we won't today because I think we're getting up to time. I would like to plug Anthony Sazana's recent newsletter, The Daily Gway, where he broke down what the miners are doing about these high fees. They're increasing the block size limit. And so if you guys want, we can't go into it because it's a really nuanced conversation with lots of things to talk about. And Anthony does a great job of breaking it down there. So I would

definitely recommend that a read if you are interested in this subject. Oh, Anthony, I subscribe. It's good. He does it every day. Yeah, so check this out, Daily Quay. We'll put that as an action item. Other action items, actually. So as long as you're looking at things, subscribing to things,

we released the Bankless Guide on Saturday. The Bankless Guide is basically the best of the best that we have published so far in Bankless on the newsletter. And it's created in a format to help go through the, the goals, the resources you need for the journey, how to understand core concepts and the key skills. And then lastly, where to get help. So you got to check this out. People have really loved it. And that would be another action item. David, do you have any other action items in this, in this churning state? As you called it? Yeah. What else should be doing? I would definitely say

the easiest ones are subscribe to the YouTube. Give us those likes. We are trying to get this bankless gospel onto the front page of the crypto YouTube. So that is really important. Also, if you have not subscribed to the podcast as well, where Ryan and I just peel back the layers of the most complicated topics, as well as bring on some of the smartest guests in this crypto world. We have a fantastic lineup coming over the next month. So stay tuned for all of that. Anklos hitting some all-time highs too, right? Oh, yeah. And we hit our 1,000th YouTube subscriber. Just got a notification of that. And podcast is fantastic. Yeah, this morning. Yeah, podcast is going up too. So thanks for all the support, guys. We really appreciate it. That's

what makes state of the nation possible. It's what makes me think that we're on the cusp of a bull run because everyone wants to hear about all the great craziness that's going on. And if you're aiming to defy. Absolutely. Guys, that's it. So we're coming at you every Tuesday, state of the nation on YouTube. Give us feedback. Tell us what you like about the show. Tell us what you don't like. We're also pushing this out on the podcast on Wednesday. So if you prefer not to see our faces when we're talking, you can take a listen on Wednesdays. That's it from us. The state of the nation is churning.

Thanks, guys.