On The Brink with Castle Island - Weekly Roundup 03/01/24 (DOE order stayed, Bitcoin renaissance, SBFs autism plea) (EP.508)

Episode Date: March 1, 2024

Matt and Nic are back for another week of news and deals. In this episode: Funding rates in crypto Blockbuster ETF flows Bitcoin Renaissance BitVM opening the overton window Remembering PlusToken SBF is "too autistic" to go to jail The 3ac boys have another fake fundraise announcement Genesis reaches a settlement proposal The DOE's demand for information from miners has been halted for now Should the Bahamas be a state Marathon is launching their own L2 Content mentioned in this episode: Alex Thorn, Why we aren't Stopping Fidelity Digital Assets, Addressing Ethereum Risks Sponsor notes: In the Coin Metrics State of the Network Issue 248, we provide an overview of the paper—Breaking BFT—and examine the importance of network security

Brought down by bad mortgage investments, Lehman, which has 25,000 employees, will be liquidated. The federal government loans American International Group, AIG, $85 billion. This is a different kind of market, and the Fed is asleep. The federal government is stepping it to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. The Bank of England has pumped 75 billion pounds more into Britain's ailing economy with a new round of concentrated easing. You print a couple trillion dollars, and all of a sudden, people start to worry.

So out of this worry, we have something called a Bitcoin. Bitcoin. Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter. This episode is brought to you by Coin Metrics, and here is the Metrics Minute. For today's Metrics Minute, we're looking at the paper, Breaking Byzantine Fault Tolerance by former CM employees, Lucas Nuzzi, Kyle Waters, and Matthias Andrade. The paper introduces the total cost to attack metric, assessing both capital and operational expenses needed for 51% of tax. attack on Bitcoin and a 34% attack on Ethereum. For Bitcoin, the cost amount of one-hour network

attack is estimated between $5 billion and $20 billion, considering electricity costs and A6. Compromising Ethereum super-styk system necessitates capital of about 15 million ether and operational costs. The network attack costs for Ethereum as of year end, 2023, is estimated at $34 billion. This is a fantastic paper. I highly recommend it. very novel methodologies to determine what it actually would cost to acquire ASICs to attack the Bitcoin Network. Really no one's done it before. That's your Metrics Minute. So that was the Metrics Minute. Early morning for you, recording at 6 a.m. Denver time. This is a true hero's effort. This is the second consecutive day where I've recorded a podcast at 6 a.m. That's not right,

man. That is not right. Yeah. You're not sitting on your laurels here. We got Bitcoin. approaching all-time highs, but the hustle factor is still high. I mean, we deserve a medal for this one, honestly. But it's okay because I have this thing called Zbiotics, where basically you don't get hung over. Oh, perfect. It's like, it's weird genetically modified bacteria that metabolizes the poison part of the alcohol for you.

So you can go to a happy hour and then you can be so ready for you. your 6 a.m. podcast recording the next day. Oh, that's great. Well, you did one yesterday with Guy Young at Athena and you had that out immediately. So the podcast productivity is going up here. Yeah, I thought that was a great episode actually. Guy is obviously very smart with regards to crypto rates. And if you look at the kind of crypto-native interest rate, it's through the roof right now because funding is very high and there's a huge demand for long side leverage, which is where the basically interest rate derives from. So a lot of people worried about that.

Actually, they think positive funding is kind of a top signal. But I will say Alex Thorne at Galaxy had a really great post on X yesterday, basically looking at a bunch of indicators and saying he doesn't think the top is in. And I mean, I think that's probably consensus, is that we're sort of midway through rally here as opposed to the top being in. So we'll put that in the show notes. There's a bunch of key indicators that I thought were interesting. It's kind of a different market paradigm here.

I mean, we've never had a market with byside flows coming in like these ETF flows. So you can't really compare this cycle to the last one because structurally is just a lot different in terms of who can participate. Yeah, I mean, and, you know, of course we have to acknowledge that yesterday was an absolute blockbuster in terms of the flows. highest volumes ever, I think, for the ETF cohort. I bet I bet was higher than QQQQ. I mean, the volumes are insane on these things. It's like James and Eric of Bloomberg, every day I log on to X.com and they come up with new stats

regarding the success of these ETFs that are just mind-blowing. And it's every single day I got my mind-blown by how successful the ETFs have been. So there's some kind of like retail frenzy as well. Like something is going on with this ETFs. I don't quite understand. Well, did you see Edward Snowden's tweet that by the end of the year it will become revealed that a sovereign nation is stacking Bitcoin?

I mean, I would love an explanation for who is buying. People think it's Jeff Bezos. That's a weird conspiracy that's going around too. He sold a lot of Amazon. He sold a lot of Amazon stock. sold a couple billion dollars worth of Amazon stock in the past two weeks. So, I mean, I bet is at almost 10 billion in assets, across 9 billion yesterday. I mean, it's like just like the most insane ETF launch ever.

Like it took gold's ETF much longer to get to 10 billion. I mean, fastest sort of ETF to 10 billion, I think probably ever. Well, it was a busy week on the podcast. We also, in addition to Guy Young, Sean sat down with Chase Lockmiller. Second time, I believe Chase has been on the pod. It may be the third time, actually, from Crusoe Energy, talking about intersection of AI, talking about Bitcoin mining. That was a fun episode. Yeah, I mean, one of the more interesting businesses out there, mining Bitcoin with strained energy and then also now they have a significant AI cloud business. which is pretty great business to be in. And then you appeared on bankless. So that was a good episode.

So talking about the Bitcoin Renaissance. Yeah. And today at the conference here in East Denver, there's a event that's being thrown called actually Bitcoin Renaissance. So this Bitcoin Season 2 thing is in full swing. That's actually one of the most talked about events at this whole conference. A lot of people, this is my first time at Heath Denver. A lot of people were remarking to me that,

there's like a shocking number of Bitcoin events. And I mean, it really does seem like it's Bitcoin's moment here, not just in terms of, you know, price action, but also in terms of actual things being built on Bitcoin. So I expect this one Bitcoin Renaissance event today to be very well attended and we'll give you a synopsis on it next week. Another reason to be excited about Bitcoin. Yeah, I mean the crux of it, and this divides,

opinion a bit seems to be bit VM. I mean, that was the thing when I kind of finally understood what bit VM was that really perked up my ears because it seemed like we can finally do an optimistic roll-up on Bitcoin without a soft fork. I was talking to some other folks in kind of the Bitcoin season two world and people disagree to the extent bit VM matters. Some people think it'll never actually be a meaningful feature of the protocol. And, but what it did do is sort of open the Overton window and make it permissible again to create a side chain or roll up on Bitcoin and just make people think that that is possible. So it might be that the impact of BitVM is kind of purely symbolic, but still really important, even if the code itself never becomes that important. Well, you just look at the amount of Bitcoin that is sitting there, right?

like we got a trillion dollar asset here that people want to do things with. And so it's kind of one of these things where the higher the price of Bitcoin goes, the more developer attention is going to be on building, you know, D5 things that you can do with your Bitcoin. So it's kind of a reflexive cycle there. And there is a real East-West divide. Like a lot of the ordnals and BRC20 enthusiasm, we know came from the east.

And there's a whole new Bitcoin L2s that I've never heard of that are apparently very popular in the Asian markets, which I'm finding out. It's just stuff that I've never heard of that's attracting billions of dollars in flows. No one in the West has even heard of it.

It's always the case, right? Basically new Bitcoin L2s. It's a, yeah, it's a different almost industry over there. What was the huge Ponzi scheme? What was it plus token? back in the Ethereum, yeah, 2018 Ethereum days.

That thing happened and it raised an unbelievable amount of ETH and I had never even heard of it till the tail end of it. Yeah, plus token, I think they raised Bitcoin as well. I think that was in 2019 and we had kind of a mini rally in 2019 if you remember before things really kicked off in 2020, 21. And I think a lot of it was just plus token taking supply offline. and creating a supply shock. And then, of course, blowing up and spitting all the supply back.

So that's kind of my explanation for that mini bubble in 2019 was just one massive Ponzi scheme. Crazy. Crazy times. All right. Well, there are some deals this week. Why don't we hop into it? First one up is etherified. This is a liquid restaking protocol.

There is $23 million from bullish coin fund and others. Then we've got validation cloud. They're a Web3 infrastructure company. There is $5.18 million from Kedzer. blockchain founders fund and blockcelerate. Then it's Build Bear Labs. This is a developer platform that raised 1.9 million from SuperScript, Tribe Capital, 1KX, and others.

Do you think that might be copyright infringement? Build Bear? Yeah, Build Bear. You ever seen one of those? Yeah, like build a bear, like the place you go and, you know, put stuffing in the little teddy bear or whatever. Yeah, I've never done one, but I've seen them. I think that probably is copyright infringement now that you say that.

Yeah. Then we've got Backpack. They're a crypto wallet in exchange. They raise 17 million from policeholder hashed, robot ventures, and winter mute. Speaking of Bitcoin, we have Bounce Bit. This is a Bitcoin restaking protocol that raised $6 million from blockchain capital, Breyer Capital, CMS, bankless, and others. Then we've Ready Games Network.

their social gaming company. They raised 4 million from Delphi Digital and Merit Circle. Sphere Labs, a stable coin infrastructure company, raised 2.8 million from the Churning Group, jump, HART, big brain holdings, and others. And then we've got Initia. Their startup focus on developer tooling. There is 7.5 million from Delphi Digital,

hack VC, nascent, and figment. All right, so let's talk about Sam Bankman-Fried. Did you see this? So his new lawyer has filed a brief with the sentencing judge, they are asking for 5.5 to 6.5 years in prison instead of 100 years in prison, which I believe is the sentencing guideline. The request is in light of the fact that apparently they're saying Sam has autism and that the creditors will recover 100%. They're saying no one was impacted here, which is a complete crock. So remember that this 100% figure, first of all,

it's not there yet. John Ray hasn't really done the mission accomplished thing. yet, but it's dollarized. So if you had one Bitcoin on the platform when it went bankrupt, that was, you get like 17K or whatever the price of Bitcoin was on the FTX bankruptcy. It's not like you're getting your Bitcoin back at 65K. And not to mention all of the, you know, the lending businesses that went out of business as a result of FTX and Alameda defrauding them. So I don't buy it. The autism thing, I believe that, though. Yeah, I mean, like, look, the guy's, he's an oddball. There's no beating around the bush.

I don't think that should get you out of prison, frankly, my opinion. I do agree with the filing. Looks like Barbara Freed said, quote, I genuinely fear for Sam's life in the typical prison environment. She says, quote, it may be that some of the inmates will come to appreciate Sam once they get to know him. But miscommunication in that environment is dangerous

since Sam's traits greatly increase the likelihood of this occurring. She also says his behavior can seem odd and off-putting to people that don't know him. Look, that's all true. Hard to argue that. That Sam is probably not very good at being in prison. I agree. And frankly, based on the disheveled picture

that we got from him about a week ago, it seems like he's not thriving in prison. Well, he did, there was an anecdote, it was at Parker, there was an article that came out last week that said that Sam has been recommending to prison guards to buy Solana, which, I mean, you got to respect it.

He remains committed to the Salana trade. Yeah, I mean, and, you know, depending on when he gave the advice, it was actually probably pretty good advice. He's historically given good advice on Solana, actually. Yeah. So, I mean, I think 6.5 years would be ludicrously short, but I kind of do buy the idea that he will get some leniency in the sentencing now, actually. Well, it's funny how these crypto asset prices impact the way you think about it. I was talking to someone about this the other day and they said, look, if Sam got 10 years, how would you feel about it? I'm like, I don't know. I wouldn't go berserk about that. But if the price of Bitcoin was $17,000 still, the industry is still in shambles and he got 10 years, I would be irate.

Yeah. Eric Wall had a pretty funny tweet on this. I mean, and it is interesting now, the benefit of hindsight, his prices have recovered. So he said, so the market really did wipe out SBF, Kwan, 3AC, and then it went shooting up for all-time highs, like not as a joke, but for real. so Luna really did go to zero. SPF really is in a prison cell. Kwan is getting extradited. Zuit to drop everyone,

every last one of his token logos from his display name. And Kyle is in a shed somewhere, chopping wood. The cryptocurrency saga moves like poetry. How is this real? When you experience something like this, you need to take it in with every fiber of your body.

Every hair should be standing on your skin. That's awesome. It is kind of funny because, like, we have recovered so strongly. However, all of these charlatans from last cycle are totally out in the cold. I mean, in various stages of disarray. Except for Suzu, that absolute, absolute bozo. He's out there tweeting that he's interested in making LP and GP investments in crypto funds. If you're a crypto fund that takes money from that guy, when he owes his creditors, what, $3 billion?

and he's on the lamb, you're not really going to have a spot on any cap tables near us. I mean, have we talked about the fact that they did it again with their fake fundraise announcement? Oh my gosh, we haven't talked about this. No, we haven't talked about this. Yeah. So they did this before, right, with the CoinFlex, yeah, fundraise announced. CoinFlex OpenX, so they basically made up names that purportedly invests. and then the names that were in theory investors,

they came out and said they're not. Then they did it again with the, whatever, the ox token raise and Forsyad Ventures, which was purported to the lead, which is the parent company of the block, I think now, came out and said, it's fake. We didn't invest. It's crazy. How many times can they do this?

I mean, the first time they did this, it was about Don Wilson at DRW investing in their thing. and came out immediately and said it's not true. But who in their right mind would make something like that up? These guys are obviously just completely off their rockers. I mean, I think they just get a thrill out of lying at this point. But like, why would they think they would get away with it? Like, obviously, if you're a serious fund,

you don't want to be affiliated with these people. So of course you're going to come out and rebut the notion that you're an investor in them. So, like, you know, the deception isn't, isn't very sophisticated here. It's just crazy. Well, we'd need to actually purge the last of the charlatans of the last cycle, I think before we can really have a full-on bull market here. Yeah, there was like a brief moment where people started to doubt maybe whether the Three Arrow's boys had actually done anything that bad.

And for a moment there, it seemed like they were actually primed to come back into the fold and become, you know, thought leaders. and influencers again. It seems to me like that's not going to happen now. But they do still have their freedom and apparently they still have assets to invest. So that's the status quo that I'm not happy with. Definitely not. All right. In other news, so Gemini, this is the firm, of course, owned by the Winklevoss Twins.

They have announced that they've reached a settlement with Genesis, which is the bankrupt crypto lender. The settlement will result in a full asset recovery, not in dollarized terms. So a full in-kind asset recovery for Gemini earned customers. What a great story there, especially if you're a Gemini-earned customer. And if I'm not mistaken, this is a recovery in-kind. In-kind, yeah. Unlike the three arrows, or sorry, unlike the FTX liquidation,

you actually get your Bitcoin back and you get the benefit of the appreciation. It's a remarkable outcome. It's a really great outcome. So if it's approved by the bankruptcy judge, they will return $1.8 billion in value at today's prices, $700 million more than what was there when Genesis halted withdrawals. They will not give it all back right away. So it looks like 97% of the assets would go back within two months and then the remaining 3% over the next 12 months. And so this still kind of has to play out in the bankruptcy process. That whole Genesis bankruptcy looks like it's getting really messy.

So DCG is protesting against it right now. There's an argument around dollarizing the claims versus returning in-kind. Obviously, this piece of it is going back in-kind, but there's disputes around other creditors and whether or not they're getting dollarized or whether or not they're getting in-kind treatment. It seems like Genesis, the management team, is trying to do as much in-kind as possible. It seems like DCG is pushing back against the in-kind. So we'll see where that one lands. But honestly, credit to the Winkle vibe for this, because if they do pull it on,

it's an incredible outcome for the creditors. Oh, it's a great, great outcome. Yeah, so well done by not just the Winkle Vi, but really the whole management team at Gemini. So in our, in policy news, you know, we often say that the courts are the friends of the crypto industry because the courts still have an allegiance to the rule of law, which is really refreshing when faced with the sometimes lawless administration.

And the crypto industry picked up another dub recently when this Department of Energy emergency order demanding all of this information from Bitcoin miners. They actually sued and they got a, I believe, a temporary restraining order basically freeing them from the obligation of submitting this information to the Department of Energy, which is another embarrassment for the Biden administration, I'll say. It's just a complete waste of taxpayer resources to have this whole apparatus come down on just one part of the economy that is operating in a free market, buying electricity. It's not like you're pilfering electricity. Just how many man hours are we wasting at the SEC, at the Department of Energy on things that really just the government shouldn't be involved in? It's really just mind-boggling. Yeah, and frankly, I find it to be pretty sinister at these kinds of requests. I've said this, but it looks to me like the playbook of harassing Bitcoin miners through this coordinated troika of sort of NGOs, academia, and then the state itself, nominally to sort of get information, quote unquote, regarding what the miners are doing.

I think that's a much darker thing, which is they want to ultimately politicize who can purchase power. and they basically want to intimidate the service providers of the miners into cutting them off in a kind of a choke point maneuver. I think that is a dry run for AI. I mean, if you wanted to control AI, there's a few ways to do it. And one of the choke points is at the data center level, at the literal infrastructure, the electrons of energy that are going into the cloud service providers. And so I know a lot of people don't really care about Bitcoin mining, but I do think it's everyone's fight. If you want to have the freedom to purchase power and do whatever you want with it, it matters far beyond Bitcoin mining to push back on these things. So I'm really glad that we achieve this kind of small victory here, but we need to stay super vigilant about it.

Are you familiar with this concept of how expensive is a meeting, like these companies that tally up, kind of the salaries and then do the actual math on based on how many people are in the room, how expensive is a meeting? Have you heard of this? Yeah. So, you know, you'd have these like big meetings and some of these companies, a lot of venture back companies have started to do it. And so it really just discourages superfluous activity. Like let's just not have meetings and meetings and meetings. Let's just try to ultimately make a decision and let's do a lot of things offline so we don't have to gobble up time. But if you were to do a tally on just, the taxpayer dollars spent at the SEC and at the Department of Energy for things that have gone

nowhere and that have been overturned in the courts and that have really just been dead ends that are unconstitutional. It's a breathtaking amount of money. And so I almost think that we need a data scientist to attempt to quantify some of the stuff where you'd have Gary Gensler. It's like, has this guy wasted like a billion dollars of taxpayer money? Is it 10 billion? Is it 100? billion. Paul Munter is another one. I mean, one of the worst public servants in the history of U.S. capitalism. This is the chief accounting officer of the SEC that put out Sab 121 completely unconstitutionally. It's getting marked up today in House Financial Services Committee to repeal it. But Paul Munter has done more damage to the U.S. economy than almost anyone other than Gary Gensler.

It's really just breathtaking. We're living in a country that has $34 trillion of debt, and we're just wasting money, hemorrhaging money on illegal political maneuvering by these agency heads. The purpose of the system is what it does. And the purpose of the SEC, it appears, is to hamstring American dynamism. And they've been pretty good at it so far. I was asked this question the other day. So we have, what, I think it's $34 trillion of national debt. and no one's talking about it, right?

Like there's not a political issue. It is probably the number one issue facing the country, but you can't find a Democrat or a Republican to take a stance on it. And someone asked me, well, what would you do about it? And it's a hard question. And the only thing I could come up with was I'd probably start a sovereign wealth fund. And I think the only way to get out of that debt is to grow your way out of it. And so I'd probably be taking a page out of the Singapore's playbook.

just trying to invest in high growth things that could really benefit the GDP of the United States? Well, I think you could slash the size of the administrative state. Frankly, you would have to layer on some inflation. I think that is an unpopular thing, but that's in practice how you reduce the size of the debt. And then, yeah, encourage growth. I mean, we have dealt with these levels of debt in the past in the 40s. We had a productivity explosion. we did have high in variable inflation

and those two things combined to get the debt down to a manageable level. And I think AI is that thing. I think AI is the kind of productivity gain that tax on two to three points of GDP growth a year. Yeah. But they're also doing the wrong thing from that perspective by trying to inhibit the success of AI. I mean, luckily it seems like it's still ticking along really well.

But their executive order against AI was kind of the wrong direction there. Yeah, so you could do the austerity. I agree with that, but that's only going to get you so far. I think you're right on the inflation, so you sort of slowly inflate your way out of it a little bit. My idea around the sovereign wealth bond is basically just owning more risk assets, owning more equity, probably getting into some alternatives, BTC, gold. My other idea was foreign country invasion and conquering. So maybe take out like Greenland, Canada.

Like, why don't we go grab some, grab some resources, monetize them? So here's one. What about the Bahamas? I know, you know, it's not very polite to idly speculate on foreign territories to conquer, but the Bahamas should have like basically be part of Florida. Yeah. Look, after FTX, you've lost every right to operate as an independent culture. I mean, we just need to turn that into.

the 51st state. Yeah, that's our causes belly. I mean, come on. That was a lot of harm visited on ordinary Americans. And also the Bahamas is right there. I mean, it's almost contiguous with Florida. So I think it should be ours. I think that a lot of people in the Bahamas are above there.

It should be like a one of the Florida Keys. Oh, yeah. Make it a key. And Greenland for that matter. Do they have a lot of natural resources, though? Is there any, what are we going to do with the, I guess just a vacation destination? I'm sure there's some lithium that we could find

maybe some oil deposits Well there is some tungsten there's still some tungsten down there That's true there's a large Allegedly 14 inch tungsten cube I don't think it's been moved I think it's still there That would break the bottom of a plane You can't move it

So Brink Nation Good news Brink Nation I'm back on Farcaster Kind of does raise questions about Farcaster itself, the fact that my account was restored by Mr. Romero himself. So there was an intervention at the very top. It was deemed an important priority to get me back on the platform. It is good to have you on there.

So it's picked up a little bit, the discussion. Bobby goes by Robert on Farcaster. He says, what would the price of Bitcoin be if the ETFs got rejected? very hard question to answer not as high as it is right now still in the 30s I think someone replied and just said zero I don't think it would be zero

I will say we've said I think the most controversial thing you've ever said on this podcast is that we think the ETHETF is unlikely to be approved and people are said received an avalanche of criticism on X.com for that claim

an avalanche people are saying it's because we don't like Ethereum. We hold Ethereum, guys. We like Ethereum. It's just that we think that the SEC... Yeah, we have no quarrel with Ethereum. We think the SEC doesn't abide by the law. That is our stance. This isn't about what we want to happen. It's about what we think will happen based on how lawless of an agency the SEC is. So, yeah, people clapping at us around this Ethereum ETF take. I don't really get it. I mean, it's a highly contrarian opinion. But we stand by it. We stand by it.

We will be surprised if ETH gets an ETH. And I think a lot of ETH price action reflects the expectation of an ETF. So I actually do think it'll be really tough for ETH price-wise if there's a delay or it becomes clear that there's no ETH forthcoming. The most popular company in the Ethereum ecosystem will be the issuer that sues the SEC after the the ETF gets rejected. So there's a chance there. Gray scale, you know, I don't know why they would do it at this point because it would just bring down their fees so much. Yeah. I mean, yeah, like in hindsight, looking back on this whole thing, gray scale suing the SEC wasn't good for their business. Not at all,

not at all. So what do you think they were thinking? Was it just the principle of the thing and they decided to fall in their sword for the for the better of the industry? Yeah, maybe. I kind of wonder, this is probably a way to find this out, but I wonder if converting to an ETF made it easier for the parent company to actually get liquidity on some of the GBTC that they owned. And that probably helped in this bankruptcy process that's going on at Genesis. Oh, that's a good point. Yeah, because they themselves owned a fair amount of GBTC on the balance sheet because they kept on buying it to try and restore. store the discount, right? Yeah, they did the tender offer and they bought $250 million worth of it. And that was at like a, what, 40, 50% discount for a while. And so brings the nav back up. So they're able to get out of that and probably pay down some debt.

Yeah, and the GBDC becoming a toxic asset and trading well below par during the liquidation bankruptcy proceedings, that didn't help. It was a super toxic asset at the time. Totally. So it's kind of like taking money out of one pocket, putting it to another. That's actually a good point. All right. So odds and ends. Hester Purse went on Galaxy Brands actually this morning.

So Thursday we're recording this. Really good episode, I thought. Hester Purse, man, we're lucky to have her. For sure. Fidelity Digital Assets released a research report entitled Addressing Ethereum Risks and Criticisms. a lot of pro-etherium takes on that one, actually, debunking the notion that the EF foundation controls Ethereum, that it's controversial.

Proof-estate is less secure than proof of work. Ethereum is too complex. Light is a threat to Ethereum security. You can make your mind up about these, but we'll put that one in the show notes as well. Fidelity digital assets, putting out some great research. also I got a swag bag the other day from Fidelity Digital Assets a little known fact Yeah golf golf had received that water bottle notebook mouse pad pretty awesome So shout out to Fidelity Digital Assets

Within on back on the forecaster A few questions from Brink Nation Johnny B says what chains projects slash projects do you and Matt personally use the most I'll put you on the spot here, Matt. What on-chain projects and chains do you use the most? Well, definitely Ethereum I use the most, I would say. Farcaster, I'm on Farcaster a lot. Yeah.

I think, so stable coin payments, like Solana, I would say. That's true. By volume, it's definitely stable coins for us. I mean, like it's very normal for us. us to settle deals and stable coins now. Yeah. Yeah. So professionally, that's...

I would say, yeah, at the fund. For me personally, it's actually Salana. I've actually migrated a lot of my usage away from ETH towards Salonah. So just buy the numbers. I make a lot more Salonah transactions these days. Yeah. But I experiment with everything. I mean, I've used Harmony Network.

How many people can say that? Yeah, I did as well. The Harmony Bridge was a nerve-wracking experience. And in hindsight, it didn't matter because everything that we put in there was like a black hole. Oh, my God. And went to zero. Harmony Bridge is like- Defy Kingdoms, man.

Driving an 18-wheeler through the mountains. That is a white-knuckle experience. I've never had a good experience using or playing, quote-unquote, a blockchain-based game. I'm still waiting for a good one. Every time I've engaged with a blockchain-based game, I've lost absolutely 100% of everything that I put in there. Yeah, Defy Kingdoms. I thought that was going to be a big thing.

That was not a terrible game, though. I mean, there wasn't much gameplay. Well, you could walk over to the store, and then you could, I don't know, I don't know what else you could do, really. I think it was basically a game of, rapper around yield farming from what I can tell. Yeah, yeah.

Yield farming is not a thing that happens anymore. That's obsolete. Now, that was a quick moment in time there, Defy Summer. Yeah, and I'm okay with yield farming, not being a thing. I think it was pretty exploitative and depended on a bunch of info asymmetries. And Guy Young had an interesting take on it. He said the reason yield farming isn't a thing anymore is because the punter is the participated in it, in particular retail, they got shafted so many times that they eventually

ran out of money. And so the people that were willing to yield farm, especially as industrial yield farmers came in and seized the advantage, they just had a finite amount of capital and they burned through it. Yeah. And then that wealth transfer was complete. And the kind of typical person that would have wanted to yield farm, they were out of cash. Yeah. That's why. why he said that it's basically not a thing anymore. Got blown out. Totally agree. Another comment from Brink Nation. Adrian Lacomb says,

interested in hearing your thoughts around the Bitcoin Renaissance events happening in Denver. That's today. So I'll report back to you. I think Bitcoin Renaissance will be a big hit. There's actually some huge characters from other blockchains there, like Sandeep from Polygon. I'll be interviewing him today. Apparently they have a Bitcoin angle now.

Adrian says, what do you think we will witness this year in terms of tech being shipped to production? If Bitcoin starts providing with economic security to L2s, isn't that bearish long term for Ethereum. This year, I do think we'll see in production an optimistic roll-up that uses BitVM in some capacity. I also think we'll see a bunch of L2s launch on Bitcoin that are basically just multi-sigs without the kind of nice economic security properties that, bit VM would enable. And I think this is because like on Ethereum, you have a bunch of L2s that are basically glorified multi-sigs. And that's not me being mean. That's just true. Like if you go to L2 beat and you look and see what the security model of these L2s is, it's frankly still pretty centralized at the sequencer level. That's just a fact. And so I think something's changed with

attitudes such that Bitcoiners are now more okay with this. And one interesting piece of news that came out yesterday is actually Marathon is launching their own L2 on Bitcoin. Oh, I saw that. I need to put that in the newsletter. Yeah. Yeah, that's an important piece of news. So there has been more of an acceptance and openness towards new L2 models. And I always say, look, the perfect is the enemy of the good. Bitcoin has always pursued the perfect. It's the perfect. It's the the expense of the good, Ethereum's were happy with the merely good. But when it comes to L2s, you can amass billions of dollars in TVL and very meaningful usage with merely good, as opposed to perfect systems. I think that cultural shift is occurring on Bitcoin.

That's well said. So as we've been talking, Matt Hogan was just on Squawk Box. So Matt Hogan's the CIO at Bitwise, which is just crushing it these days. So look at this stat. So yesterday there was 900 bitcoins that were produced onto the network by Bitcoin miners. 900 Bitcoins. ETFs yesterday, just yesterday, purchased 11,211 Bitcoins. If you're not paying attention to this, you should be. I mean, I don't actually like, I do like Matt a lot, but I don't like this type of reasoning.

Because it assumes that every other Bitcoin is immobilized. And then the only bitcoins that are moving at the margin or the new bitcoins versus the Bitcoin's being bought, we know that's not true. Yeah, yeah, yeah. We get that. But it's just the look at the... Yeah, but like, come on.

I mean, if you look at the short-term holders versus long-term holders in Bitcoin, a feature of bull markets. And if you look at the Alex Thorne post yesterday on Twitter, he posts this chart about percentage of Bitcoins held for more than a year. During bull markets, older holders transfer their bitcoins to newer holders, right? I mean, of course that's what happens. People take profit. They sell.

They pull their bitcoins out of cold storage and they sell them to newer buyers, which is definitely happening right now. So there's a wealth transfer now with the, The ETFs, basically the boomer is going to own all the Bitcoin. And one way actually to pinpoint when a bull market is kind of reaching its end is when that share of long-term held Bitcoin starts to drop precipitously because that, and there's actually critical levels you can see and do the analysis. And so there is this cohort of Bitcoins that seem like they're immobile, but once the price

rises enough, it drags them back onto the market. So that's actually one thing that I watch really closely to see where we are in the cycle. So yeah, I get that. I mean, so the other thing this kind of highlights for me is what is the U.S. government going to do with all this Bitcoin? Did you see yesterday that a billion dollars worth of Bitcoin that was tied to the Bitfinex hack moved? So it's in U.S. custody. It moved. I wonder if it went back to Bitfinex. I mean, it is their money. So hopefully that's where it went. that occurred to me yesterday is you remember how worried everyone was about the Gox coins? Oh, yeah.

Being released. Nothing burger. For years. People worried about it. And I guess it was totally overshadowed by the rally. Yeah. So we fretted about that for nothing, basically. Well, it's going to be an interesting few days here.

We'll see what the price of Bitcoin is the next time we record this podcast. It seems like I have a lot more friends the past. couple weeks. It's really an interesting dynamic. Yeah, a lot of people I haven't talked to in a while talking to me. I don't know. Maybe I just got a tan or something. So I want to address something, which is people are chirping me for saying the ETF was a news selling event. I made my predictions at the beginning of this year around Bitcoin. I said, quote, Bitcoin is flat week of ETF approval, but touches 80K in 2024. So we'll see about the 80K, but it was flat the week of the ETF approval.

Yeah, it went down a little bit. So it was a new selling event. It absolutely was a new selling event on the week of. So I'm not saying we're still in the new selling era. I felt that there would be flows that would materialize that were unanticipated, they were meaningful. That's clearly true. But I did feel that the week of,

it would be flat, which it was actually sold off. Yeah, you're pretty good on that prediction. Yeah, I'm taking the dub on that. I think we're going to leave it here, let you get to East Denver. Enjoy it out there. Don't come back. Last year, there was like some crazy corona outbreak out there. So hopefully you're not going to catch anything.

Yeah, no guarantee that I get sick for sure. Yeah. All right, everybody, we'll have a safe and healthy weekend, and we will see you on Monday.