Bankless - SotN#10 - GAMING (MONEY GAMES - YAMS NOT DED, CRV LAUNCH FAIR, MAXIMALISM GETTING DUMBER?)

Episode Date: August 19, 2020

STATE OF THE NATION #10 - Tuesday, August 18, 2020 Watch on the Bankless YouTube Channel The State of the Bankless Nation is....GAMING! The bankless boys discuss why. ----- GO BANKLESS WITH THESE SPONSOR TOOLS: ⚔️ GODS UNCHAINED - TRADING CARD GAME - you own the cards - start a free account, play and trade! 🧙‍♀️ POLYMARKET - BET ON CRYPTO - bet your beliefs! - use it to bet on DeFi outcomes!  🌈 AAVE - LEND & BORROW YOUR CRYPTO W/O A BANK - earn some interest! 💸 AMPLFORTH - MONETARY EXPERIMENT FOR BASE MONEY - learn about this experiment! ----- TOPICS: 1) MONEY GAMES - YAMS NOT DED 2) CRV LAUNCH FAIR? 3) MAXIMALISM GETTING DUMBER? We show:  Ready Player One (article by David) Ethereum: The Money-Game Landscape Conway's game of life article YAM Farms YAM analytics Where you mine CRV CRV price --- Episode Actions: Catch SOTN LIVE on YouTube every Tuesday at 10am EST (2pm UTC) Also...subscribe to Bankless YouTube to watch State of the Nation every Tuesday! ----- 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 ----- 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.

Welcome to State of the Nation. This is episode 10. David, this is the first time we are live streaming this. Pretty exciting. How are you doing, sir? Pretty good. Pretty good. Breaking out my live streaming skills. It turns out they, it's not so hard. So yeah, we are now going to live stream the State of the Nation. So we're going to get a little bit more consistent with the time. So I think we're doing 7 a.m. Pacific 10 a.m. Eastern time every Tuesday. So make sure that you tune in to the bankless live streamed to get that done. You can find it on Twitter, but honestly, we prefer you to go to YouTube because the YouTube comments are just better there. And so you can subscribe to it. Wait, did you say YouTube comments are better?

Than Periscope comments? Yeah. Oh, okay. Yeah. Yeah, we just want everyone to be in the same room. So if you're watching this, go to the YouTube. Also, while you're there, subscribe to the YouTube. So you get these alerts that we are live streaming. Awesome. Very cool. Yep, super exciting. This is starting about 10 minutes late just because we were going over some technical issues, but we will work to start this promptly at 10 a.m. East Coast time. I think that's 2 p.m. UTC, if you're international and tuning in that way as well. All right, what do we do in state of the nation? We talk about what's happening. So in particular, what happened the previous week? We try to relate it to some of the big picture themes that we talk about in bank lists every week. And we always

like to show you some visuals, to drop some insights, and to drop some action items. A couple of quick announcements. We had Kane Warwick on Live AMA last week. You've got to check that out. That's now published in the podcast feed. So take a look at that. We're also publishing a podcast today with Charlie Noyes. So make sure you grab the bankless podcast feed and subscribe there. The Charlie episode is just fantastic. We talk a lot about ETH as a monetary asset. Why? it needs to be a monetary asset. Charlie works at Paradigm, which is one of the, I think, the most interesting crypto funds in the space. We're also dropping tactics, so tactic on why earn today and then some killer articles later this week that you're really going to like.

So get on the program. David, before we begin, we should talk about our sponsors. You want to tell folks about God's Unchained? Yeah, yeah. God's Unchained is going to be really perfect for this particular state of the nation. But God's and Chained is a game. and it's a game very much like Magic the Gathering or Harthstone or Pokemon. It's a trading card game. And everyone loves Magic the Gathering because it's like a very social game and you play right across from another person. And you play with like physical cards. Like you own the cards physically.

Kind of like owning cash physically. And then Harstone is that same game but in a computer form. But Blizzard, the company, owns your cards. Like you purchase the cards from them and then they give them to you and you can play with them. But you don't own them. They can take them back from you. You can't trade them. there's no marketplace. God's Unchained is the perfect marriage between a physical card trading game

and a digital card trading game because you own the cards as tokens on Ethereum, which is really, really cool. And other than that, it's just a fantastic game to play. Like the game graphics are just super sexy. I have a fun time playing it. I've put like 50, 60 hours into it. So you can check them out at godsunchained.com. And the greatest part is, when you win games, you get packs and then token to show up in your wallet. And it's fantastic. Somebody has actually made, by playing Gosen Chain has made the minimum wage more than the minimum wage in their home country of Brazil, I think, which is a pretty fascinating story. Oh, yeah. We did an article on CryptoGamers and how much money they're making. There's some really interesting analysis on that.

I think, anyway, we'll include in the show notes, but you can make money this way. Also, I want to tell you about our second sponsor. This is AVE. So Avey, is a friend of the show has been doing incredible work in the lending and interest space. So it's a money protocol that allows you to deposit a crypto asset in. So an ERC 20 or ETH, for example, Dye, for example, you know, Link or USDT or USDC, any asset on Ethereum, and you receive interest back on the amount that you deposit. You can also borrow from it. And this team, the AVE team, is just like iterating on their protocol so fast. Last week, they just announced a V2 of AVE, which I think is going to be absolutely fantastic, like, amazing. I feel like bit by bit, we're taking pieces out of the existing banking system. And we're moving it from like a bank and a building and, you know, thousands of employees to actual code. That's what Avey is doing.

They're also like blowing up the DFI leader board charts. So two comma club. Congrats AVE. Well done. They are at a billion in locked value in the AVE protocol. So are they the second protocol to do that? Wait, isn't that three comma club? Three comma.

Three comma club. You got to get Pierre to come and audit your commas, bro. Yeah. So now there's actually, I'm looking at Defy Pulse right now. We've got Maker who reached over a bit. billion. They're leading right now, AVE, number two, and Curve number three. So, anyway, check out AVEA, um, super easy, user interface. That's at AVE.com. AAVE.com. We'll include it in the show notes. David, want to ask you the question. I always ask at the beginning of the

state of the nation, what is the state of the nation today, sir? The state of the nation is gaming. We are all gaming. I am literally gaming last, or I was literally gaming last weekend when I I was playing gods unchained, but also even earlier than that, I was gaming by farming some yams and playing these money games on Ethereum, which we all seem to start to kind of get a little bit more, there's just a lot of more exposure around these things, and people are starting to realize that they are much more like these massive multiplayer online money games. Like it's a new genre of games, and it's all about wealth maximizing. And that's basically what has happened over the last month of the defy world.

And so we're, again, like kind of how we're stretching the definition of a nation when we call it the bankless nation. We're also stretching the definition of a game by calling it like a money game. It's a different type of game, different rules, different players, different win conditions. But I think it's a fascinating concept. And we're going to go into that in this episode. Yeah, I saw a tweet from Haseeb, who actually are releasing an episode with, he's from Dragonfly, he's an investor at Dragonfly.

And he said, something to the effect of, I know. new crypto gaming would come, but I didn't know it would take the form of yams. It's like for it's always, it's for a long time, it's been a meme that like one of the biggest use cases is going to be gaming in crypto. And I believe that's true. God's and change is an example of that. But also so are these money games. So it was all of the kind of the yield farming that that's going on. The stakes are maybe a different like a little higher and a little different. But these are absolutely games that we're playing. So maybe we should start there with topic one, David,

because you wrote a fantastic, like kind of, you've written a few things on money games. Like, and you wrote a post yesterday that sort of summarized what's going on a little in some of these things. Maybe you could get into that. So the post was called Ready Player One, and I'm going to bring it up on screen. And, yeah, talk about that for us.

Yeah, so this came out of a very early article, I think I wrote last November, called Ethereum the Money Game Landscape. Again, I always use Ethereum as a, referred to it as a landscape. Like it's a physical plane of existence. And there's different options, peaks, valleys, different tools, different parts of the landscape that do different things. And so as a money game, landscape, there's different constructions to be playing different games, right? And so I think Maker Dow, when the thing that kind of brought the defy world into existence is the first example of a move that you can make, right? When single collateral die was issued, there was a move enabled. Like there was a new valid move on the board.

And that move was to deposit ether and mint dye. And you had specific rules and parameters for making that move, but that move is now available. And over the course of the bear market, what we've seen the growth of. defy what we've really seen is the explosion of the growth of possible moves right there are more things for us to do and each move offers you some sort of strategy to create right and so all these people that have been like especially the people that have made a ton of money now they've been practicing their games they're gaming they've been gaming for the past like two years in defy practicing their moves learning how to make moves learning what moves work and what moves don't and

As the defy ecosystem gets larger and more complex because there's more, like, different boards, there are more total moves. And now some people are really good gamers. And other people are not so good gamers. But the cool thing about Ethereum is that you can pick your level of difficulty. It's largely, you largely play against yourself. Like, there are other people that you have to compete with, but it's really mostly a single player game inside of this, like, MMO universe.

Yeah, I think that so if you want to play on easy mode, right, we've talked a lot about sort of, this is not financial advice, but we've talked about portfolio construction a little bit, right? Easy mode in crypto is you buy the reserve money assets. You buy Eith and you buy Bitcoin, right? And if you do that, it's pretty passive, basically, because you can benefit from all of the upside. But harder mode, right, is. when you start playing these money games with each of these particular protocols. And you talked about four valid moves, right? And it's funny because all of these, well, I guess synthetics has been around for over a year. But the other three are relatively new moves that just came on the board. And almost like they were inspired by synthetics. But comp and compound, for instance, I mean, that just came out in May.

Right. Can you talk about each of these new valid? moves, David? Yeah, and so each game, speaking of these protocols as games, each game kind of makes moves. And they're similar, but also different, right? And as you said, synthetics kind of did the yield farming before it was called yield farming, right? That's why Kane in his bio on Twitter has the father of modern agriculture because... Oh, he does. Yeah. Which is true. This is true. He created, he created the concept of like issuing rewards from the protocols in order to, sponsor certain moves because synthetics as a protocol wants you to do certain things, right?

Wait, wait, wait. Don't you think Satoshi should be able to claim that title, though? Yeah, you're right. Yep, you're right. But no, no, no, good. Until he does, though. Until he does. Or she, or they. Or she or they, right. Or it or whatever. And so, Kane and the synthetic Steve made this very prescriptive statement saying, like, okay, we're going to encourage this type of move by issuing these rewards, right? Compound and Comp with yield farming kind of expanded that and said, okay, you can get rewards by supplying any asset or borrowing any asset.

So they kind of expanded the horizon of how you receive protocol issued rewards. And then it also included the governance module. And the governance module over compound from their native comp token is important in the game because that is the thing that is really incentivizing cash flows. at its very essence, right? Because it governs over the cash flows. Then Ampleforth brought this rebasing mechanism. Very simple.

And with it came this massive game that was just played around this one move. And basically Ampleforth is a one move type of game. It's like you buy and then you sell. And you do that because it's speculative, because it's a non-dilutive asset. It's a game of accumulation, but it has this like reflexive repricing thing that makes people play it differently. Right. And then urine and Yiffy came around. and it made this scavenger hunt where there's a bunch of different moves,

but they're elsewhere, not like comp where it's in the protocol, but it's elsewhere. And then I think what was really cool was that Yam and Yam's and all of the activity around Yam's, it's really a collection of all of these moves. And so Yam created this brand new game that was a collection of all these things. These games inspire each other. Someone in the comments called it the money, Farmville, and that's basically what they are, because they're also games that you play socially. There's this whole social dynamic around things like Yam or Ampleforth or SNX or Comp.

And I want to get back to the comment I just made about Satoshi, right? Because some people, I think, don't recognize that Bitcoin is a scarcity game in its The most simple. The most simple. It's almost, people don't like the term Ponzi game, right? But to me, that's different from a Ponzi scheme. So a Ponzi scheme is something that's non-transparent. The centralized planners of the scheme are taking, siphoning money.

They're giving false numbers out in order to trick investors, basically. A Ponzi game is simply a, it's simply a scarcity. game where those that get in early are rewarded disproportionately relative to those that get in late. And that's what Bitcoin is, right? The entire, the entire, I guess motif, the entire, you know, operating line of thought and social layer is like, I'm going to buy my, my portion of the 21 million Bitcoin. I'm going to hold. Nothing's going to shake me from holding. Like, that is the original money game. And if you're a lot of it. And if you're going to be a lot of money game. you think about it, that's what backs, like those types of money games are the things that back

the entire like value proposition of the bankless decentralized money space. The fact that people are playing the game makes the game real. Right. Right. And it's harder to see with Bitcoin because, oh, now, you know, Goldman Sachs is saying you should have a little Bitcoin in your portfolio. Right. And big investors has become institutionalized. So it's become socially accepted. But it wasn't when it started. It was a game that most people in the mainstream completely dismissed as a scam, as a scheme, as nothing that would become the movement that it has.

So at some level, like all of crypto is backed by these types of games with one, like, degree of credibility or another, when you say? Yeah, absolutely. And it's all bakes down to a wealth maximizing game. And that's what Bitcoin is in its essence, right? It's it's a wealth maximizing game that is also a game of chicken, right? And we see Bitcoiners playing this game when like Bitcoin takes a dip and then they all go to cash app and they buy some Bitcoin and then they take a screenshot and then they post it to Twitter. They socially signal. They socially signal and then they say, I'm never selling. And basically what that's saying is like, the game of chicken if they're both if two bitcoins are driving straight at each other 200 miles an hour each car then they're signaling that both they're going to run right into each other because they're not ever going to leave the game of bitcoin because they're never going to sell and that reinforces the game because the price floor of bitcoin is determined by how many bitcoins are committed to buying

bitcoin and never selling it right and so that makes the game valid for other people because if you are as an investment firm see like this army of bitcoins that are all buying like 0.01 bitcoins on the cash app and then signaling that they're never going to sell. You see the available supply of Bitcoin becoming less and less available to you. And so that as an investment thesis, it turns, it goes from a game to an investment thesis. And the investment thesis of Bitcoin is that everyone's going to be playing the Bitcoin game. Well, some people are like, but David and Ryan, like you just made the entire space seem super scammy just now by talking about it in those terms. And I just go back to that's exactly what gold is, right?

Like gold is just a Ponzi game with much more history, 3,000 years of history, right? So that's somewhat, lots of players. That somewhat legitimizes it. But it's the same sort of game that we're playing. There's a scarce amount of gold. And we're betting that other human beings are going to, use it as a store of value. But there's like there's very little of the value of gold. There's very little of that that's actually like utility value, commercial value, that sort of thing. And in another

sense, fiat is the same sort of money scarcity type game. It's very much based on a belief that a particular nation state will uphold the scarcity of the asset, not inflate it away. So like money as a social construct is a scarcity game. At least that's what I've come to believe, right? I think, I mean, maybe this is like a new thought for the world and the rest of the world things were crazy, but I think that this perspective and understanding this perspective is a very useful thing to guide your decision making in Ethereum. And so maybe this is a new thought for the world, and that's fine, but, you know, this is a new industry for the world.

And to whatever degree that this perspective helps you in your understanding of how these systems work, that is a useful thing to know. Well, let's talk about the rules. There are a few rules, right? But let's talk about rule number one. Maybe that's all we're ready to talk about today. What is rule number one, David? Yeah, rule number one. I think we could chalk that up as the only real rule because all the cool thing about Ethereum is that it's infinite and all rules are possible.

but rule number one is the rule and that is the rule of keeping yourself in the game right so you you can play the game really safely by buying ether and then keeping it in cold storage or never touching it and that's really safe or you can do more crazier stuff riskier stuff by going like leverage like 5x leverage long on dy dx with all of your supply and that's really risky that's breaking rule number one because going five x long on ether is putting you in a position for you to lose all of your resources So like imagine you're playing Zelda or like Diablo or like World of Warcraft and like you take all of your armor and your swords and all of your like consumables and then you gamble it, right? Like you try and you try and 5x all of those things. Well, if you lose all those things, then you have no weapon.

You have no shield. You have no armor. You have no health potions. Like if you lose all of your stuff, you're out of the game, right? Yeah, you see a screen that looks like this. Right. You need to avoid. So you can do risky stuff like going 5X long on ether.

But you shouldn't do it with your whole entire stack because you need to stay in the game, right? You should do it with a responsible amount of money that keeps you in the game. Yeah, absolutely. David, we should talk a little bit about these games in general, right? Because you've compared these to Conway's game of life because all of these games on the Ethereum. If Ethereum is sort of a canvas for these types of money games, you have all of these protocols, all of these money games going on simultaneously, and they're kind of competing, right? They are also like obeying the algorithms of their code and their construction.

And it almost starts to resemble like living organisms. Can you talk about Conway's Game of Life and, you know, how that relates here? Yeah, so Conway's Game of Life is a pretty interesting computer science experiment. And what you see on the screen right now is, and again, if you're watching this on the podcast, go to YouTube because that's where you get to watch us look at things while we talk about them. But Conway's Game of Life, it's a grid, right? It's like a, it's like a, it's like a, it's a, graph paper in, you know, elementary school. And there are certain, certain cells are colored white and certain cells are colored black. And then there's a set of rules for, like,

if you have exactly three white neighbors and, like, two black neighbors, then you're, if you are a white cell, then you will switch to a black cell. And then there are certain, certain rules for If you are in one state and your neighbors are in that state as well or a different state, then you will switch states. And so over time, you can create these patterns of cells that will change based on their surroundings, based on the parameters around them. And so as people created this game of life, they found out that using a specific construction of types of patterns of cells, either a one or a zero, black or white, will create something

that lives, that does things, repeats and recycles and creates something that doesn't die. Like there are these things called gliders that can, that just move forward. There are these like things that interact with each other and make gliders, like a factory contract on Uniswap is how I illustrate that. But the point is that it's very much like a chess board, a checkers board, and then there are updates to the checkers board. and that's very much like the state machine of Ethereum because Ethereum moves in this very serial manner,

like one block, two block, three block, and each of these blocks is a time for people to make moves or not. And when we coalesce all the applications on Ethereum in Defi, we create this like ecosystem of combining patterns of cells that all interact with each other. And what you see on the screen is some guy who had a lot of time who made this massive diverse ecosystem of just organisms using Conway's game of life, and it coalesces into an economy, right?

And so each of these individual little patterns are part of a larger hole that is itself, if you take this metaphor to the end, is itself Ethereum, right? All of the activity in these like different patterns of organisms becomes Ethereum. So these are all money games basically that we're watching. This is like an organic economy is kind of what we see. That's why I love, we brought it up in the last state of the nation, but that picture of like all of the different money protocols, you know, like where his uniswap was like Pac-Man eating the others.

At certain times, some of these organisms will become more dominant and start eating liquidity from others. But this is very much how it looks. It's sort of this organic, you know, set of money games. This is, this gets pretty complex, too. Wow. I haven't. Yeah.

And I think I thought, maybe I don't really know the guy that made this video, how much hours he put into it. I'm assuming that's a lot. But a lot of that complexity must be emergent, right? Like he, he's like the central planner of the initial state, but the state grows in its own way from beyond that. So some of these things happen automatically. Absolutely.

Well, very interesting. All right. So let's relate that. you, as we promised, to something that has been going on currently or something that happened last week. And that is Yams. So we talked about this in the last state of the nation. And that was really the day Yams launched. So I guess just to get folks up to speed, if you've been on vacation the last week, right? Like you have, it's just, I tweeted this out the other day. Like, you know, you take a day off and you, you miss eight yield mining opportunities.

right? It's just like this stuff is happening so quickly. But anyways, if you missed it, Yam was a kind of a derivative off of the idea of Ampleforth, basically, where you have some sort of an asset that rebases in Yam's case, it's rebasing every 12 hours to a, to kind of meet its market cap. So if it was above a dollar, the supply would inflate. If it was below a dollar, supply would deflate. Anyway, the details, the intro, we can, you know, check out the last State of the Nation episode nine. Anyway, what happened was, yams got absolutely bonkers crazy, right? So this is a contract that was written in 10 days, basically. It was a fork of a synthetics contract, but unaudited, right? Completely unaudited. But the defy gamers, someone called them

degenerates, deposited. an incredible amount of funds inside of the Yam contract in order to earn that that gaming reward of more Yam. So the way it works is basically you have all of these farms that are set up. I'm not going to unlock my wallet. You have all these farms set up and you can you can basically deposit in different assets. So you can deposit in Wi-Fi or ETH or all of these different assets. And based on the amount that you deposit and some other parameters, you get a return. You harvest yams, basically. So we got to a point where there was over 600 million in value, 600 million in value deposited into these yams farm, the yams farm.

And the market cap of yams as well, you know, I wasn't tracking. It's difficult the tracking places don't have exact methods. metrics on on yam but i believe it got to like 750 million like close to a billion dollars in market cap um before the whole thing the whole thing started to uh collapse david maybe you want to take it from there like so what's what happened with the collapse because everything i talked about happened within about you know 48 hours right and then something started to go wrong you want to take it from here yeah yeah it was it was a 48 hour game. And before I finish off the story of yams, I do want to talk about how like

yams presented different difficulty levels. And I think one of the reasons why yams was so popular is because it had a very accessible easy mode. Because the easiest thing you could do was like submit ether into the system. Then you get yams, right? And it's also important when we talk about the safety and security of these systems because as the listeners probably know, yams blew up. but the whole thing didn't blew up. A specific contract of the YAM system blew up. And so the people that deposited their $600 million of value into Yams, that part was extra secure, super secure,

because all the place that you submitted your value was just a bucket for submitting value. Like it didn't do anything with it. It was very, very inert. And so vetting the risk of these systems takes nuance and understanding because the part of the Yams that blew up was unrelated to the place that people submitted their capital. So the submitted capital was never at risk, right?

Not from the way that Yams blew up. So the way it blew up, my understanding, is, you know, all of that $600 million that was deposited. It's completely safe. But where it blew up was its governance module. So what Yams was trying to do was take, you know, 10% of its rebases on the upside and put that into a stable coin reserve of sorts. And it was that stable coin reserve portion that blew up.

And the idea was, you know, yam holders would be able to govern like, you know, the protocol to some degree and be able to determine what happens with that reserve. So it was that stable coin reserve that effectively, like, it blew up in such a way that yams could no longer be governed. Is that about right? Yeah, the treasury could, yeah, the governance module broke. And so there was an interaction between the treasury and the governance module and the rebasing system.

So those three things created a result that was like a, it was like a mutation that didn't go well. Like it was a bad combination. And that's, that's, that's as a result of probably the hastily generated game that had like a faulty game board. like instead of the path of the game like going to finish line it like veered off the edge. Yep. And so what happened was that, you know, governance needs to have a quorum of yams, but yams rebased. And so the supply of yams changed. And so all of a sudden the quorum got really, really difficult.

And finding quorum and was needed to happen in a certain amount of time. And then it did happen, which actually really cool story is like enough yams did reach quorum to fix the issue. but turns out there was another bug behind the bug, right? So the governance module rebasing and treasury link between those three things didn't link up. And so as a result, yams turned into something much closer to just a much more inert thing like Ampleforth, but it also had a 10% tax because that's how the treasury was filled. But the treasury was being filled without anybody to actually make a claim on it, right? And so that broke.

Now here's where things get interesting because this was a game and the game ended. except I think my claim is that the game is still being played but it's being played off chain and we saw this happen by by people still flooding the yam discord but there being a ton of energy and discussion about yams in the yam discord and most importantly in the course of i think like 70 hours a hundred thousand dollars got donated to fund an audit of the yam v2 system that is supposedly coming out right and so So the Yam community, and also all games on Ethereum require community because you need players. There's a lot of players who are playing the Yam game that want the Yam game to continue, right?

They want to remake the board in a way that the path of the board doesn't veer off the edge, but it finishes, right? It does what it's supposed to do. And so it's now a coordination game. It used to be a money game, which is also to some degree of coordination game, but now it's completely a coordination game where all the Yam players are trying to figure out how to get the game restarted, right? And so there's a generally assumed path where the Yam version 1 token is going to be redeemed for a Yam version 2 token.

And the Yam version 2 token is inert. It's just a normal ERC 20 token, which is this placeholder for the Yam version 3 token. And that token is supposed to, in theory, comes out after the audits, after we have successful audits and with patience. And the game currently is now speculating that that is going to happen. And so this is not, the game is not over and it's still a highly risky game, perhaps the most risky game on Ethereum. But if you want to play the Yam game, you are now speculating that the Yam game will continue or not. So it's now a different game in a different part of Ethereum. Now it's off-chain. And it's a speculation. Will the game make it back onto the board? Like will we make it back onto

Ethereum? And let's be perfectly clear what the game is, right? Like I can't use any clear language than this. This is a Ponzi game, right? It's a game of basically buying low before everyone else and selling high, right? Or holding, if you want, until Yan becomes the global reserve asset at the world. But it's a similar game. Right. So it's a similar game as the Bitcoin game, only with far less legitimacy. But a very interesting distribution mechanism in that it's not going to VCs or like being, I quote unquote pre-mined, anyone has access to a yam farm who has some capital. Now, it's still a whale game, to be honest, because the people with large amounts of defy capital are going to disproportionately get more yams, of course, right? However, it's different

the whale games of venture capitalists in Sand Hell Road and Silicon Valley in that it's accessible to anyone. And I do think that is an interesting distinction in this type of a game. But it is. That's what you're playing. If you're making a bet, as David said, that yams will be resurrected in some sort of second level, second version. And you're also making a bet on the Ponzi game. But I thought yams may have been dead as well, right? Because It was quite an epic ascent and then descent. And even the developer was like, one of the developers was like, I'm sorry, guys. Like this was a bad idea.

But now I, like if you look here, it's not only social coordination going on off chain, but it's also there's $370 million still locked in this thing. That's $370 million worth of farming that activity is still happening. So someone's betting on something here. And then if you look at, okay. So, yeah, market cap right now. I said earlier it got to like $750 million, something like that. I'm not sure that Ether scan is updating this correctly, right?

So this says market cap of Yams right now is $25 million, but I'm not sure that this total supply is correct because supply continuously rebates. Is that right, David? Ether scan is not equipped for rebasing. It was not equipped for rebasing with Ampleforth and is still not equipped for rebasing. Like rebasing is this very creative mechanism that infrastructure like EtherScan is not yet equipped to present.

Yeah. So what you have to do is you have to sort of calculate the scaling factor of yams. I actually was able to figure this out from somebody before we came here up here. It's where you see this would be the correct calculation of what yams are right now, the market cap at a price of $0.55. be about instead of 25 million fully diluted, 31 million. So again, quite a dissent from its highs, but it seems like people are still playing the money game. David, we put out a thread on Friday,

which I knew would be controversial, but it was basically like, hey, defy, hey, Ethereum, hey, bankless community, do you love or do you hate yams? And I'm talking specifically about these types of Ponzi-esque money games, speculative money games. And again, Ponzi, not the Ponzi scam, but Ponzi the game,

you have to buy early and speculate. And I feel like the community is somewhat divided. So here's a comment saying, Yam is the symbol of everything wrong in defy. It doesn't do anything, right? Like this is not like peak insanity. This will end very badly like the ICO craze. Others, like had a divided opinion.

right um excited that this kind of game is possible in a way that was never previously been possible but also like it was hastily launched and you know maybe the game is is sort of um not correctly informing nobs as to as to the risks and speculative nature of it what's your take on yams good or bad these types of money games good or bad yeah um money games absolutely good and specific iterations of money games also very good. Like, yearn and yiffy, good money game. I would also bucket Yam into the good money game category, largely because it was a fair launch with good intentions.

I know two of the five people on the Yam team, one's Dan Ellitzer, the others Will Price. I've met Dan in real life and I've met Will online. And so maybe because I know more people in the space than the average person, I have like privileged information just from knowing these guys, but I trust them. Like Dan's a nice guy. I trust his more. And so from that perspective, for me, Yams was a good game. And very much in the same way that in 2015 and 2016, ICOs were good.

The best, the early ICOs were like Auger and Golem and Gnosis. Excuse me, nosis. And the ICO mechanism was a great way to receive funding and distribute your tokens. And then it became bad, right? And then it got milked and milked and milked at the cost of retail. So I understand when people are seeing like, this is the worst of the worst of defy. It's because like maybe there is something here. And maybe the people that are hating on these games aren't seeing like,

are there are kind of not seeing the good parts because they are seeing the future bad parts coming. And that's totally fair. And if we do think that we are on the cusp of this bull market with a bunch of new entrances, I think what we're going to see is we're going to see a lot of money games. that are very bad money games that are really set up to benefit the people that designed them because they know how they work and in order to milk retail right and that's kind of what we saw with the ICO where the ICO was initially good and then people found out that they could milk retail with it and so that's what I'm

worried about also what about the charge that like these games aren't really doing much for the for the world right so a bunch of early whales like get rich who cares right aren't we here to go bankless? What about that charge? Yeah, so going bankless and leaving your nation state, taking your capital and leaving your nation state, putting out Ethereum, is a subject that I think is relatively separate

from money games because you can take your money and put it inside a compound and earn an interest rate. And technically the way that we are describing things, we therefore state that you are playing games. And the user may not think of him like that, think of it like that. like they just may you think that I'm trying to receive an interest rate on my money like I'm not playing a game and that's totally fair that's totally fair like the the bankless nation is a much bigger thing than just these money games the only idea the reason why we call these money games money games it's because we are thinking that it's an appropriate way to view these things and understand these things right go ahead yeah yeah no I I agree I guess my take is so Ethereum is an open permissionless platform these things are going to come and some of the games games, as you said, David, are going to be scams and toxic.

And some of them are going to be a bit more transparent speculative Ponzi games. And I feel like our job as the Bankless Nation is to educate folks on the game that they're playing. So they know, right? Like if you were playing the ICO game back in 2017, it was not a game based on any sort of fundamental cash flow, right? So the game you were playing, whether you knew it or not, was a game of selling to the next guy, right, who buys it at a higher price. It was completely speculative. There was nothing really backing. That's similar to, honestly, what the Yams game is.

It's a speculative game that you're just trying to sell it for higher than you bought it for, essentially. And I feel like if people are clear on what they're actually buying, I think a lot of people bought ICOs in an uninformed way. They thought that success of the project might be correlated with value of the token. They thought that the like the token itself was like the project itself was real when in reality it hadn't shipped all sorts of things. So I feel like the best place to be is to stay educated on these topics. And we hope to play a role in informing you about these various money games. So if you choose to play them, you know the game you're playing.

You know that there's not someone behind it who can bend the rules in their favor. Right. Yeah. I think it's important to think about where this could go, right? And so we always discuss like if you take a day off in defy like you're behind. I think we are just at the beginning of that. And we saw this evidence by the creation of yams, which was the integration of like three or four other mechanisms from other protocols

that we just, the creators of the yam system found out like, hey, what if we took this puzzle piece and this puzzle piece and this puzzle piece and put them together and that's yams, right? I think that compounding possibility of possible valid moves is about to explode. Like we are on the cusp of that. and as more valid moves are created, more and more possible experiments will result. And so we are just seeing the basic primitives.

Like the rebasing invented by Ampleforth is a primitive, right? That is going to be recycled and reused over and over and over again. And maybe it's one small component of a massively more complex thing that we create as the developers of these systems get better at developing them. And so going back to that video that you showed on your screen, Ryan, of Conway's Game of Life, we are in the very small, very, very, very, like the smallest version of Conway's Game of Life. We are in the very primitive state. But as that game grows, it becomes more and more and more complex, right? We, in two to five to ten years, we are

going to see some of the most insanely complex and fun games on Ethereum. And they're going to come out of experimentation that we are seeing in Defi today. I totally agree. percent agree. These experiments are net good for everything to come in the future. We're building up primitives here. David, speaking of money games, we should talk about our next set of sponsors. Do you want to kick it off with Ampleforth? Yeah, Ampleforth. Father of modern rebasing. Ampleforth created the rebasing mechanism and is responsible for a lot of the creativity that we see on Ethereum today. So Ampleforth is a base money experiment. You could call it a base money game. Very much, similar to Bitcoin in that if you own 1% of ample tokens, you will always own 1% of ample tokens.

But instead of having a fixed supply and variable price like Bitcoin, Ampleforth has a fixed price variable supply, right? So it's inverse, right? It's not a stable coin. Even though the unit of Ampleforth tracks $2019 over time, the volatility comes from the volatility in the supply, right? So you purchase 100 Amplforce and then you will see that 100 Amplforce go to like 200 Amplforce or 50 Amplforths, while the unit will always be a dollar. And we're seeing how successful of a mechanism this is in the way that people are copycatting it and using it in their own protocol. So check them out at Ampleforth.org. They have their own liquidity incentivization mechanism called the Geyser. If you supply Ampleforth and Ether to the Uniswap pool, you can get a little extra bonus of Ampleforth tokens.

And so, yeah, that's ample fourth. All right. I also want to tell you about a Polly market. So the quest for prediction markets on Ethereum and using D5 protocols continues. And Polly.commarket has a really interesting take. So if you go to Polly.com market, you can bet on your beliefs. This is like an information market. So you can see some of the market categories they have, coronavirus, crypto.

You can even create your own markets. This is an interesting category. we've talked about on bank lists. One of my favorites is make a bet on will Ethereum v2 phase zero launch before 2021? 64% think yes. 36% think no. What do you think, David? Just curious.

I think that's fair odds. Fair odds. All right. So David might enter this market equally on both sides. I guess. Well, that would make him net zero. I'm not sure what David would do with this market. But if you want to bet on things like that, you can. They even update it with interesting things like amount of yam being delegated. So you can go to poly.commarket and start betting on D5 protocols. And if you do this and you email hello at polly.com market with bankless in the subject line,

they will cover your gas costs and give you early access to unreleased features. gas cost coverage is a net benefit in these times of 200, 300, 300, gas fees. So check them out at poly. Dot market. We'll include them in the show notes as well. David, let's talk about our next topic here.

And then what we'll do in like at the end is kind of turn it over to the bankless community and the YouTube to ask some questions and finish this off. But let's talk about curve really quick. So curve really. released their token. They started releasing their yield farming mechanism for their CRV token last week. I was shocked at the market cap at the price of this baby when it launched. So here it is. It got up to like $80 billion, didn't it? Yes. So here it is on Coin Gecko at 70 billion. They must take a like a you know like some kind of a one day average or something yeah that's showing 70 million but

they're missing three zeros there it was definitely 70 or 80 billion yes it was and when i looked on um yeah in fact i don't think these numbers are accurate well this this is accurate as of now it's a it's worth 11 billion dollars right now um when i looked at this on saturday we were like 130 billion 120 hundred and 30 billion so it briefly exceeded the market cap of certainly of Ethereum, I don't know, did it succeed the market cap of, exceed the market cap of Bitcoin? No, not a Bitcoin. Bitcoin's like 250 billion. Okay, all right. That would be crazy. Getting close though, right? Getting close. So an absolutely insane valuation, at least at first. And the way it launched was somewhat odd, right? So the way it launched was basically

the curve team had put out some code, sort of an unreleased version. And this guy, this person on Twitter or organization on Twitter, a simple farmer, defy Chad, he was the one who activated the curve governance contracts, the curve yield farming mechanism. So individual group paid $800 in gas fees to activate this contract prior to the curve team formerly releasing it. So a little weird, a little interesting. And there's lots of speculation around that. So anyway, back to the fact. So it was activated.

And then Curve came out and said, since it was activated, without our permission, our knowledge, we're just going to go with it because we have no other choice. In the meanwhile, people had started to yield farm curve early, right? And if you're in early with yield farming, you kind of get outsized returns. You get outsized returns, right? Because no one else is yield farming. So you have a disproportionately large part of the pool. Exactly.

So there's controversy over the launch. The value of the token has fallen steeply, of course, which it had to. I mean, that's just gravity. It was appropriate. It's still $11 billion, which seems awfully rich for a capital asset. But yeah, that's basically what happened. And there's some controversy around it. that we could get into. But David, do you have any quick takes here? Yeah. So the controversy around

the launch was that, you know, we are now kind of used to the status quo of fair launches, right? Like no VC pre-mine, no founders' rewards. But that's, the money's still enticing. And so the nefarious, malicious opinion of what happened was that this defy Chad guy, who's an anonymous this Twitter account was this was a plan, right? And the plan was to deploy the contracts under this anonymous account. And then from Curve, they say like, oh, somebody deployed our contracts. But somebody got to like basically pre-mine. It's basically a pre-mine because it was released before anyone knew it. Right. So the criticism is that this was really done by the Curve team and they just wanted to have the outsized returns. I don't know. That is a thought. There's nothing

to back that up. I don't know if that's true or not, but that is what is the worst, the least generous interpretation of those events. Yeah, that's what I think a good summary of that interpretation or that possibility and criticism of the way it was launched is found in this Twitter thread by Adam Cochran, so we'll include that in the show notes. But it does seem that whatever happened with respect to like the fairness, sort of people getting in early. It seems like this was maybe done to avoid some regulatory scrutiny. Also totally fair. Right.

It's just kind of like hands off. We didn't, we didn't deploy this thing. Somebody else did. Right. We don't know who. Yep. Which is quite interesting as well. I don't know if you've seen any crypto lawyer feedback on that, like a Jake or somebody like that.

No. Jake would never say anything. He wouldn't touch it or no. He wouldn't touch that. Yeah. Yeah. But that is a good point. there are unknown regulatory risks with launching these things because there's no,

there's absolutely zero sort of information about the date of whether these things are dubious, compliantly dubious regulatory issues. It's unknown. And so it's fair to assume that like these people that are kicking off these yield farming events are trying to disconnect from that. That's fair. Yeah. And we will include a link to where that yield farming can be done just in case you're

interesting. Interested. Again, like the earlier in these protocols, you start yield farming, the more risky it is. Yes. So this, again, is maybe not quite yam on the spectrum of risk. Right. But it's pretty close. Going through the door first is risky, right?

And I would also say even the design of curve is this is not an easy mode game. This is a hard mode game. And largely it's because of the gas fees, right? And so I actually started to farm curve at the very beginning because the returns were ridiculous. At an $88 billion valuation, you could make just a ridiculous amount of returns. It was something like $5,000 APR for like on an hourly basis, right? So I'm like, okay, I'll go into yield. It's worth the risk at that point.

Yeah. Now, I'm not like the biggest defy whale. And so I got burned on gas fees going in and out of the pool. So it cost me 0.5 gas to get into. into the pool and 0.5 ether to get into the pool and 0.5 ether to get out of the pool. And I farmed 0.35 ether worth of curve. So I got I got burned. And so this is not a game for everyone. And this is kind of why it's advantageous to be a whale in the space because you can pay for those gas fees because it's more efficient. Right. And so when you are making the calculus

as to what moves you want to make or not, like I messed up and I lost that game because I have less money than I do now. And so therefore I lost, right? And so you messed up because of gas fees. I messed up because of gas fees, right. And by the way, what do you deposit in curve? It's like some sort of a, you like a stable coin, right? Like you deposit a die or you could deposit a USDC or something. This is also why this is not an easy game. Because it's a two-step game where you deposit stable coins, your preferred stable coin, USDC, tether, die. And then you get the Y die, Y, Y, U.S.DC, Y Tether version of that, which is the interest-bearing version. And then you submit that to the Y-curved Dow governance portal, which is then where you get your

curve tokens, that's where you start farming, right? And so it's a two-step process, whereas Yams with a one-step process. And getting in and out of the Y-curve stable coin pool is really expensive, really expensive. Yeah, and just like converting what you said, 0.5Eth into dollar terms, right so like i don't know 150 dollars twice so i spent a whole ether in gas to receive a third of an ether in farmed okay so 400 dollars you spent 200 dollars to receive how much ether 0.34 yeah so net loss right net loss of two thirds of an eth yeah and that is why um i think there you know i think some within defy are starting to um get upset and a bit jaded at these gas fees

because the argument is, hey, like, if gas fees are 300 guay, then the only people that can afford gas fees, high gas fees, are folks that are dealing in large capital pools, right? So, like, to make that trade worth it, basically what you said is like I'd have to have at least $1,000 or so, right? Or actually, I'm not sure how much. For a curve, way more, yeah. Okay, so I'd have to have, and that was when curve was sky high, right?

So if I was depositing a curve now, then like, you know, different story. I'd probably need like, I don't know, $30,000 or something like that before it's even worth it. So that is the criticism. What do you think of that criticism, David? I think it's totally fair. And that's why the current gas market is not good. I mean, it's good for Ethereum because fees are good. But it's really crowding out a lot of, you know, smaller players that want to play games.

but it turns out like the current games on Ethereum are like you know $5,000 minimum poker tables right? Yeah. Like it's just not suitable for everyone. And so a lot of people are on the sidelines like watching all these like rich whales have a lot of fun. It's not the best environment. I'm not going to say that I'm happy about it. And yeah, not only have a lot of fun, but also make a lot of money. Right.

And then sometimes dump that on less savvy players of the game, basically. Yeah, so like somebody who might not understand how to vet games very well might look at like, okay, yield farming. I don't really know how to do it. It sounds risky. Gas is really expensive. You know what I'm just going to do? I'm going to buy the curve token. And if you did that on the first day, you bought a curve token that was valued at $88 billion when Ether was valued at like $40 billion.

So that also wasn't a good move either. So really you were kind of just forced to sit out, right? And if you didn't know how to evaluate the game, you might have made the mistake. sake of buying curve at an $88 billion valuation. Yeah, yeah. You know, it's interesting in our podcast with Haseeb, which is coming out next Monday. We talk a little bit about that, like defy in layer two, a defy in ETH two, right? And how the main chain basically is shaping up to become a settlement chain, right? The original Ethereum 1.0 main chain is kind of like a Manhattan, basically, where things are going to get really expensive and not all transactions can be done in,

Manhattan. It will become like a town, an area, a district for the wealthy. And that is the economic reality that I think ETH one becomes a settlement layer. But that's why we need layer two solutions. That's why we need EF2.0 to create some more space, some more geography, some other, like Haseeb calls it, you know, other suburbs, other farmland that where gas fees aren't completely prohibitive. We get some more rim to breathe. I'm pretty bullish about that in the long term, but I think in the short run, it's going to be tough. But we are seeing things like optimistic roll-ups layer two. I think that will start showing up in fall, and that uses the security of the Ethereum main chain for things. We're also seeing things like X-Di, for instance. This is just a side chain.

It's not even, it's not like, it doesn't use the security of Ethereum, but you can run die for instance in X-Dye and it's reasonably secure, right? Like it's almost like a crypto bank level of security. So there's lots of different things that I think are going to scale this out, but I don't expect an immediate fix here. I think, yeah, I think it's going to be some, you know, 200 to 300-3-3-3-Prices for quite some time. Yeah.

It's not going down. Yeah. The important thing about all the development in scaling solutions is that there are many different paths to go down. and it's really all about optionality, right? Like sharding creates options. L2 systems create options. Like roll-ups create options.

X-Di creates options. And these options compound upon each other, right? And so we don't get linear scale in many different directions. The optionality of being able to scale multiple things in multiple different ways is really how, you know, small fries, got people with like less than $100,000, less than $10,000 can play some of the similar games as the big guys, right? and because of that optionality. Also, I do want to bring up how Yerne and Yiffy, what Andre built with Yerne is a gas optimization mechanism

because anyone that is yield farming with their capital is making a bunch of transactions on Ethereum, and they're all doing that. But instead, if they just deposit their capital into Yern into this automated thing, if 500 people were all making 500 transactions each, trying to maximize yield, and instead they put it into yearn. That's one transaction for 500 people that does the same thing.

And so that is also this internal scaling solution, which just makes things more efficient. And this is how Bitcoiners actually think Bitcoin is going to scale. If you played an Xbox 360 game in year one, and then you bought an Xbox 360 game that came out like a decade later, the graphics were like orders of magnitude better. It looks like a different system. And that's because the developers just learned to be more. more efficient with like the graphics of that game. And I think that's going to also become true about developers that, you know, not too long ago, gas prices were one way, right? Like two,

two or three or four months ago, but gas prices were one way. So developers weren't really incentivized to figure out how to be efficient. Now developers are really incentivized how to be efficient. And so we're experimenting in efficiency in all different directions and that efficiency compounds. And having optionality in how you scale is really important for having that compounding scale. Yeah, I mean, I mean, look at a city like Manhattan, right? I mean, there was a time where it was relatively like flat, in talking 150 years ago. And what did they do to scale partially? Well, they built up. They built skyscrapers, right? That's kind of how it could emerge. And they also built down with the subway. Yep. More efficiency through each unit of geography, more efficiency through

each unit of block space. And you're right, the economic pressures will sort of force them into that. I was listening last thing and then we'll turn it over to the folks in the bankless community for questions. I was listening to the Peter McCormick Vitalik interview with Samson. Did you catch that, David? Yeah, it pissed me off, man. I had to turn it off last night. And this is one thing I'm concerned about with Vitalik because I wanted Vitalik to take the offensive because he wouldn't. Fatalek is very, very peaceful.

He's very pacifist. Samson was being a fucking asshole. He was being a bully. He was being a bully. And he was just being a wrong bully. And Vitala wouldn't call him out on it because of how nice Vidalic is. And like it was the most disingenuous. But don't you think David like that came through to anyone who was listening?

I'm just like so sure, man. I'm not so sure. Because Peter McCormick's audience are a bunch of big coiners that hear things like what Samson Mao says as like gospel. I am not so sure. Yeah, I mean, one of the things that kills me with criticism is like things like, and this is back to relate back to our question. Our earlier conversation is kept pressing Vitalik on gas fees, that sort of thing. Bitcoin has the same freaking problem.

When Bitcoin is in high demand, Bitcoin block space is in high demand, transactions become too expensive to use. Only you know what they do to scale Bitcoin is it scales essentially on crypto bank. infrastructure and side chains like coinbase and finance and that sort of thing, right? Whereas Ethereum has a slew of other options. I just find a lot of the criticisms aren't equally applied to both networks. But one thing in the interview, I don't know if you noticed, but Vitalik gave a couple shoutouts to bankless. Oh, I must have turned it off before that. Oh, dude.

Yeah, get there. So he talked twice about conversation, the bankless podcast that we did with him. And then he also used the term economic bandwidth. I did, I did hear that. Yeah. That was pretty cool. Yeah. You know, some progress.

The part that pissed me off the most was, and to continue your conversation of how Bitcoin scales, Bitcoin is going to scale on Ethereum. And that's going to be how it scales without having to succumb to crypto banks. If you want to use Bitcoin expressively, it's going to come to Ethereum. Yeah. Bitcoiners got really excited about the micro strategy purchase of, like, 21,000 Bitcoins. Well, there's 43,000 Bitcoins on Ethereum. Like, that's twice as big. Yeah. Yeah. So converting that to monetary terms, it's 250 million versus like something like 500 million. Right.

Right. So micro strategy purchased 250 million Bitcoin. And there's already 500 million tokenized Bitcoin on Ethereum. Right. And so Ethereum is going to scale. We are currently scaling. And Bitcoin is going to scale by coming over to Ethereum. And what, you know what really pissed me off the most was that Samson Mao said, too Vitalik, to his face on the podcast, lying through his teeth, that people in Defi are preferring to use wrapped versions of Bitcoin instead of... Oh, dude. Because it offered a stronger foundation.

Is that where you turned it off at that point? I was like, this is absolutely ridiculous. It's a lie. The belief is that Bitcoin itself is a very sturdy foundation and that you build big structures on sturdy foundations, and Ethereum isn't that sturdy of a foundation. That's a fair criticism. And that's the criticism that was baked into that argument. But what Samson Mao forgot about is that in order to get Bitcoin onto Ethereum,

you have to have trust in something, like RenBTC, that you have to make sure that protocol works or wrapped Bitcoin. You have to make that Bitcoin is going to do that correctly. Or TBTC, like they haven't gotten out the gate. And TBTC, you actually have to have ETH to make the trustless Bitcoin work. And so he just glossed over this massive trust assumption. that this is just going to work because he wanted to spin the narrative of just like, yeah, you know, people in defy I want to use WBT, which is just abjectly false.

Yeah. Oh, God, it riled. It just fucking riled me up. Me too, because I think that is the deception that's going on, right? Like, to be honest, the Bitcoin story is, is simple to understand. But like, when they lie about the Ethereum story, it frustrates me. Here's the thing is the other thing Samson was doing that pissed me off is I consider myself, a Bitcoiner.

Right. All right. Same. Like if you ask me, but I'm not Samson Bitcoiner. Right. Right. Like that like Bitcoiners are right.

Maximilists are wrong. Right. You know, like I can be a bit coiner and also be an Ethereum. Right. I mean, that's what the bankless nation is. It's optimizing for the most bankless money system.

Absolutely. Wherever it exists. And so his, I think his painting of bitcoins as pure maximalists is, it's just not going to age well. You know what you know, think that's why people are entering the space for you know what i think he's doing what i think i think he's playing the bitcoin game and the bitcoin game is to get everyone to buy bitcoin and so he's playing a game

where he is trying to brainwash people by lying in order to get them to play the game because when more people play the bitcoin game bitcoiners the people that have have already been playing the bitcoin game win right and so i think it is a and also but samson mal comes from block stream which is an attempt to build a expressive side chain for Bitcoin on Ethereum or BTC on Bitcoin. And there's no bigger, stronger competitor than Ethereum to Blockstream. It's not Bitcoin versus Ethereum. It's Blockstream versus Ethereum. Like no shit, Samson Mao doesn't like Vitalik and what he's built because his Ethereum is going to make Blockstream completely redundant and unnecessary.

And also, by the way, James Preswitch, who is a very great developer on both Bitcoin and Ethereum, discovered a bug in the block stream liquid network that is where this Bitcoin gets expressivity that would allow someone to steal all the Bitcoins. And like he's talking about how Ethereum is like this shaky foundation while his own liquid had this bug for months that no one discovered because no one fucking uses it. Excuse me, using the F word. Look, man, I think you're right. I mean, full circle here, right?

Samson is playing the game. However, I have a massive problem. when you're playing the game unethically, when you're lying about it, right? And by the way, that's not the game I'm playing, right? Like, I want, I want a money system to actually be good for the world, right? I don't, I don't fucking care if, like, Bitcoin gets to trillions of dollars, but all we're left with is a banked money system that doesn't restore self-sovereignty to individuals. That's why I'm here. And I do think the tide is shifting a little bit, David. Like I think people who listen to bank lists and then tune into the McCormick interview are like,

oh, wow. Is this really the kind of the intellectual mecca of maximalist because it's empty? It's like a dry causative, the closet of skeletons. There's like nothing there. There's no organic material. There's no substance there. So that's what, That's why I continue to listen to the episode because I was just like, wow, this is the best you've got. It's, man, what I want to see a debate of is honestly is like an Ethereum debating on like ether. You know, I feel like we could make the argument a little bit better. Right. As to why Ethereum might fail.

Yeah. Absolutely. That was not it. That was not it. No, that was a bag inspired conversation. from Samson Mao. And that's kind of what, like, Vitalik's such a nice guy. Like, he means the best.

He doesn't really want to get offensive. But I would love to see a world where Vitalik, like, brought out the teeth. Because he could, Vitalik's very witty. Vitalik is really clever. And I think if he wanted to, if he practiced at it, he could destroy Sampson Mao. Yeah, I know. He's just, um, he's too nice. He's too nice.

He's a better human, to be honest. Yeah, he's better than all of us. That's for sure. Yeah. So anyway, um, all right. We went on a rant there at the end, but hopefully you guys enjoyed it. Let's turn it really quick to you. Any questions?

Yeah, I've got one. What's your guys' take on staking on a validator node versus yield farming? I have my answer for this one, Ryan. What's your answer? Okay, so it's a risk return answer, right? So I commented earlier on Twitter that all of this yield farming in DFI is preparing us for the greatest yield farm in the world, which is staking our east. bonding our eth, the initial bond offering of Ethereum. Now, it's different. People replied and said, oh, yeah, show me where the like the 1,000% APY per day is on Ethereum. It's not there.

So staking Ethereum in a validator, taking your eth and doing it there, is going to be a much lower risk, not in the early days, right, because ETH2 is new, but eventually it's going to be a much lower risk place to put your money. So, you know how in, the like regular traditional world people people call the the risk free rate that's basically like the fed rate for returns on t bills essentially that's what staking eth is going to be it's going to be the risk free rate of the ethereum the defy economy essentially so much lower risk right because in order for eat staking you fail the entire protocol has to fail just like with with t bills right in order for t like the u.s government not to give you your money u.s government has to go away

Right. Like, the foundationally, it's gone. So it's a much lower risk way to get a steady return. It's not the wild cowboy stuff of like 1,000% per day. But honestly, a portion of my funds personally, I want to be in the crypto equivalent of the T bill asset class, right? Absolutely. Absolutely.

And it's important to like, so the question like framed it as like returns on eath staking versus returns on yield farming. And actually, I think you can categorize as eath staking. inside of yield farming, right? You are farming yield. And the best thing about staking is that it is designed to be as easy as possible, right? It is supposed to be like the tutorial for people coming into the Ethereum game, right? Like the basic and most simple and most trustless thing you can do is you can stake your eth, right? And again, like you said, eath staking when phase zero goes live is going to be hard. It's going to be expert mode and it's going to be high risk. And but the idea is that

the UI and UX around the clients for staking your ETH and also other systems for doing it for you will make this easy, right? The goal is to make this like the 101 game, right? Like you enter the game, you go through the tutorial and that tutorial is staking ether. Because the reason why we want that easy is because staking is supposed to be supposed to enable maximum decentralization. So it has to be easy. If it was extremely difficult, then Ethereum wouldn't be decentralized. Yeah, exactly. And I guess maybe one of the things, of course is because of the super fluidity, as Dan Ellitzer would say, of these protocols, who's to say you won't have a way to essentially take your tokenized, staked eith,

and then also add some risk, add some return to it, and start yield farming with it. There will definitely be ways to do that in the future. So maybe you can have your cake and eat it too. So here's a question from a YouTuber. What do you think about chains like Pocodot, fusion, or other interoperability chains for scaling? And I'm going to use this opportunity to shill our coming episode with Haseeb, which is coming out next Monday. Haseeb gave a pretty interesting classification of Pocod. Where, you know, Ethereum is supposed to be like Manhattan and its suburbs and its farms.

Pocodot, the way Haseeb classified it is as like a one city per application, right? And so that application has its own domain. It has its own realm. And that allows that application to scale up. And so, you know, I'm not an expert. so I can't really comment on the more nuanced designs of Pocodot. But that categorization was interesting to me. Yeah, yeah.

I think my take is similar. So my take is probably in that Haseeb episode a little bit. So I think that probably, this is a thesis, that probably in order to have a main chain, a settlement chain, the reserve asset behind that settlement chain has to be money. because any reserve asset that becomes a money has trillions of dollars in economic security. There's no better way to get security than to be memed into a money, to be used as a money, right? That's why gold is worth, you know, trillion, seven trillion in silver is like not even a trillion, right?

Because it has a money meme attached to it. So I think there are probably some power laws to that where not everything can have that. and Ether certainly has a head start as a main chain with economic security. Pocodot, I feel like a Pocodot is kind of discluded from the race there a little bit, right? So part of the reason why is because first there's governance, almost a plutocratic governance. So if a majority of dot whales decide to change issuance or make some decision to the protocol, they can vote and make it happen, right? That kind of governance, on-chain governance can't happen in Ethereum. And that sort of on-chain governance, I think, is not probably conducive to a, you know,

a monetary system underlying. Like, so how shitty would it be if Facebook and all the Facebook stockholders essentially had the ability to, like, owned the governance of the global, reserve currency of the world. It would be very bad because then Zuck could do whatever he wants for that at any time, right? So like we're here for a more neutral monetary system. Anyway, for reasons like that, I think that Pocod and other things like it become a side chain to stronger, more credibly neutral settlement layers like Ethereum. But they all work together at the end of the day. And by the way, could be wrong about some of these things. It's possible that dots or atoms through some roundabout way starts to accrue monetary premium.

But that's my take right now anyway. Yeah, yeah. And I think that's the correct take for the information that we have today. And I think when Pocodot goes live and inevitably intraoperates with Ethereum because what else are you going to do? We will have to update that take if anything changes, right? Because then we'll have more data. But I think for now, until we have more data, that that's the right approach to

evaluating these things that are not quite live yet very good david should we do one last question yeah do you have one i cannot find another one well i've got one that's super easy when when a bankless merch when i think the people want these t-shirts man i think they do want the t-shirts i think that's true so we uh we're working on it guys so i have a box sitting over there actually with some bankless swag with some bankless t-shirts um we did our scarce swag launch season one first So that's out there. But that's a more kind of scarce premium. The ETHscape, sure, is a more, you know, premium product.

We're going to get some normal merch like this. Hopefully, I'm going to say within the next month, because I feel like, you know, I've got some economic band. To do that. But we're working on it, guys. We're definitely going to get you guys some swag. I really want to walk into my World's Fargo wearing a bankless hoodie. I told you. I did it. I did a wire from a bank in my EtherScape share. It's awesome.

So that'll be fun. That'll be fun. All right. All right, man. In three weeks, there will be some cool news. And I'll leave it at that. Ah, very good. Maybe we can announce on State of the Nation what that cool news is. I think we shall. All right. These are going live every day, guys, at 10 a.m. Eastern. That's 2 p.m. U.T.C. that's 7 a.m. super early for you, David. Look at your bankless dedication man. This guy wakes up at 6.30 to get ready for this. I just want to... Puffy-eyed live stream. Yeah. And, you know, so thanks for joining us. We'll live stream these. The reporting will be on bankless as well. As always, guys, this is not financial advice. Crypto is risky. DeFi is risky. It's not for everyone.

We are going bankless, though, and we are glad you are with us on the bankless journey. Thanks a lot.