ROLLUP: TikTok x Audius, Penguins & CryptoPunks, Robinhood Crypto, Uniswap Treasury (August 20)

3rd Week of August 2021 ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: 💰 GEMINI | FIAT & CRYPTO EXCHANGE https://bankless.cc/go-gemini 🔀 BALANCER | EXCHANGE & POOL ASSETS https://bankless.cc/balancer 👻 AAVE | LEND & BORROW ASSETS https://bankless.cc/aave 🦄 UNISWAP | DECENTRALIZED FUNDING http://bankless.cc/uniswap ------ 📣 PoolTogether | Break up with your Lottery! https://bankless.cc/PoolTogether ------ 0:00 Intro 1:26 MARKETS 1:36 BTC Price 2:05 ETH Price 2:40 ETH/BTC Ratio 3:38 DeFi Action 7:28 Layer 2 Action https://l2beat.com/ 9:55 EIP 1559 is Burning ETH https://ultrasound.money/ 12:53 Gas Price Volatility https://twitter.com/takenstheorem/status/1427130936940851201?s=21 16:55 NFT Monthy Volumes https://twitter.com/fintechfrank/status/1427432022109216775?s=21 Opensea vs. Etsy https://twitter.com/xanderatallah/status/1427453596858294272?s=20 21:00 RELEASES 22:00 1inch on Optimism https://www.coindesk.com/defis-1inch-network-launches-on-ethereum-scaling-platform-optimism 24:26 Balancer Metastable Pools & Lido Partnership https://medium.com/balancer-protocol/balancer-launches-metastable-pools-to-further-pool-liquidity-9eade44d73d8 26:54 Bloomberg Galaxy Index https://www.coindesk.com/galaxy-digital-launches-defi-index-tracker-fund Frank’s Take https://twitter.com/fintechfrank/status/1428348530888871945?s=20 30:18 Metamask EIP1559 Support https://twitter.com/MetaMask/status/1428148268031102976?s=20 30:55 Fintech Collective https://www.theblockcrypto.com/linked/115077/fintech-collective-250-million-fund-defi-strategy 33:57 Jobs https://jobs.banklesshq.com/ 34:26 NEWS 34:36 Robinhood Crypto Revenue https://www.coindesk.com/robinhoods-revenue-from-cryptocurrency-trading-jumps-to-41-of-total 37:43 Polygon x Hermez https://www.theblockcrypto.com/post/114479/polygon-hermez-merger-matic-hez-tokens-ethereum-projects 40:03 TikTok x Audius https://twitter.com/decryptmedia/status/1427344374212571151?s=21 41:24 Samczsun Saves the Day https://www.paradigm.xyz/2021/08/two-rights-might-make-a-wrong/ 44:58 UNI Treasury Drama https://twitter.com/DuneAnalytics/status/1428250340139356164 52:10 Lido Matic Staking? https://twitter.com/LidoFinance/status/1428315782035955712 53:12 Aave DPI Collateral https://twitter.com/StaniKulechov/status/1427762488934871042 55:11 CryptoPunks Fully Trustless https://twitter.com/larvalabs/status/1428099416326557696?s=20 57:50 Zapper Wallet Avatar https://twitter.com/zapper_fi/status/1428096107708657672 1:02:14 Fractional Penguins https://twitter.com/SlingshotCrypto/status/1426391017545113601?s=20 1:03:28 Bitcoin Fees https://twitter.com/hasufl/status/1427335844130697222?s=20 1:10:11 SEC “Protecting” Citizens https://twitter.com/Immutable/status/1427089741082619909 1:13:12 Gary Gensler on DeFi https://twitter.com/lawmaster/status/1428294597684469762?s=20 1:16:26 Former SEC Chair Joins Fireblocks https://www.theblockcrypto.com/linked/115020/former-sec-chair-clayton-fireblocks-advisory-board 1:18:00 TAKES 1:19:00 Why We Love the Industry https://twitter.com/sassal0x/status/1427805148248608777?s=20 1:20:41 Community Innovation https://twitter.com/StaniKulechov/status/1427256596611088387?s=20 1:22:25 Every Object Is Scarce https://twitter.com/naval/status/1428232383703044096?s=20 1:23:49 Single Issue Voter https://twitter.com/twobitidiot 1:25:55 What David’s Excited About 1:28:53 What Ryan’s Excited About 1:32:55 MEME of the Week https://www.instagram.com/p/CSwc8pjihdL/?utm_medium=copy_link 1:33:39 Closing & Disclaimers ----- 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 video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:07Ryan Sean Adams?

  Hey guys, happy 3rd week of August. It is time for your weekly rollups, the most exciting time of the week. Friday morning, I hope you are ready. David, are you ready to dig into the week that was crypto?

• 0:18David Hoffman?

  Absolutely. Like always, there is always so much news to talk about and unpack. So much drama happened this week, so much happened in the markets, and we are going to go through all of it in the Friday weekly rollup.

• 0:31Ryan Sean Adams?

  Oh man, I'm excited. David, before we get into it, we should talk about Tracer Dow. There's so much going on in the Bankless world too. David, we had a hot panel about Dows earlier in the week, the best Dow panel I've ever heard, I think, with our panelists. There's also opportunities for folks listening to Bankless to get involved in Dows. We've talked about the various Dows that Bankless is running and other things. Our friends at Tracer Dow, they're trying to launch a perpetuals product that's coming out in September, and they are looking for Dow contributors, Dow governors. If you are interested in getting involved in the early stages of a Dow that's building out a new DeFi primitive, you should check that out. There's a link in the show notes. Just click it, it'll take you to the Tracer Dow Discord, and you can figure out how to plug into that project.

• 1:16David Hoffman?

  If you want to get in at the very ground levels of a brand-new Dow, which is adding financial tooling onto almost any single ERC20 asset on Ethereum, so long as it has a price feed, Tracer Dow is the Dow for you. So if you want to be sort of a founding member, an early member of Tracer Dow, get involved.

• 1:36Ryan Sean Adams?

  All right, David, are you ready to get into the markets?

• 1:38David Hoffman?

  Absolutely. Starting with the Bitcoin price, which started the week at roughly $46,500. Immediately, on the Monday or Tuesday of this week, jumped up to $48,000, and then lately has fallen down to $44,500, and then back up to $45,600, where we are right now. So a little bit down on the week with Bitcoin.

• 1:59Ryan Sean Adams?

  Down on the week. It was up last week, though, a bit. So we're sort of, I guess, maybe flat on the two-week-ish, something like that. Let's talk about ETH price.

• 2:07David Hoffman?

  More or less the same story. Started the week at roughly $3,300. It peaked a little bit higher than that early in the week, but has fallen down, has flirted with a sub $3,000 level for Ether a couple of times in the last couple of days. But right now, we have our head right above the $3,000 market, $3,050.

• 2:26Ryan Sean Adams?

  3K and above. I'm feeling okay on the price of ETH. It doesn't feel like anything bad is happening. We'll see where this continues. I guess more crab market season. We're almost at the end of the summer, too, David, so I wonder what September will bring. We'll have to see. How about ETH Bitcoin, the ratio? What's that telling us?

• 2:43David Hoffman?

  Continues to range between that .08 and .055 level, currently coming in at .067. So higher in the middle area of that range, Ether reclaimed .07 earlier this week, but is currently below that at the very moment. But definitely just a crab season, again, at this higher plateau on the ETH BTC ratio.

• 3:07Ryan Sean Adams?

  What's all-time high for ETH Bitcoin ratio? It's like about .14, huh?

• 3:12David Hoffman?

  Yeah, if you look at Coinbase, yeah, .14, .15. I think other exchanges have it as high as .155. But again, it was just a flash in the pan for a brief moment, right?

• 3:23Ryan Sean Adams?

  So the ratio would have to essentially double to be close to all-time high range. It hasn't done that since 2017, June of 2017. So that would be, I mean, we're coming up on, you know, over three years. So we'll see how that plays out. How about DeFi? So let's talk about total locked value in DeFi. This is going up lately, in the 80 billion mark last week, I guess. Now, where are we, David?

• 3:49David Hoffman?

  For the, excluding this week, the four weeks prior, total locked value in DeFi has gone, has done really, really well. It started at the low of roughly $55 billion, and then climbed all the way up to $85 billion. We've traced back a little bit, back down to $79 billion locked in DeFi, but still has reclaimed some really high territory with total value locked in DeFi.

• 4:14Ryan Sean Adams?

  Are we flirting with all time highs here? I think we are.

• 4:17David Hoffman?

  Pretty close, pretty close. I mean, we definitely need some asset prices to go up to really reclaim all time highs, but we are definitely within striking distance. That is for sure.

• 4:27Ryan Sean Adams?

  All time high around 88 billion and we're pretty close to that. So it wouldn't take much to get to 100 billion, David. Let's talk about DeFi tokens as measured by the DeFi Pulse Index. How are we looking on the week?

• 4:40David Hoffman?

  Yeah, started the week at around 370, 380 dollars and maxed out at 440 dollars in the middle of the week. And now we are back down to roughly 395 dollars per DPI token. So a week of volatility with the DPI, but we're kind of back to where we started, maybe a little bit higher.

• 5:00Ryan Sean Adams?

  Let's take a look at this ratio that that reveals whether we are in DeFi season or whether we're in ETH season. And what's this ratio showing this week, David?

• 5:09David Hoffman?

  Coming in at point 12955, really annoyingly teasing me with being right below my point 13 number.

• 5:16Ryan Sean Adams?

  I will, I will say below, below.

• 5:18David Hoffman?

  Yeah, I know you. I didn't have to say it. I already said it.

• 5:22Ryan Sean Adams?

  I want to emphasize that for people. Below.

• 5:25David Hoffman?

  Definitely NFT season lately and DeFi season, DeFi, the DeFi arena of Ethereum has definitely taken a backseat. But I would like to remind people that when things are quiet is definitely in, in theory, when you would want to be allocating because you don't want to allocate into loud things. You want to allocate into quiet things. So if DeFi is being like kind of backburnered or forgotten about, and this is the low mark of DPI versus ETH coming in at, point 12, point 13. Again, I feel really good about my almost bottom call.

• 6:01Ryan Sean Adams?

  I think what David's telling you is you don't buy NFTs anymore. Buy some DeFi tokens, right? Is NFTs are too hot? Is that what you're saying? Or are you saying buy both?

• 6:09David Hoffman?

  NFTs are really, really frothy, but we have also learned that like you can, I thought Chainlink was.

• 6:16Ryan Sean Adams?

  It can always get frothier.

• 6:17David Hoffman?

  I thought Chainlink was frothy at $2. I thought Chainlink was frothy at $5. I thought Chainlink was frothy at $10 and then it got up to. $50 and it was really frothy like to some degree like it can get frothy and stay frothy for a really long time. So, you know.

• 6:33Ryan Sean Adams?

  To me, David, DeFi tokens, at least the good ones, are buy and hold for the long run. They fit the classification of Bitcoin and ETH in my book, which brings us actually to the bed index, which is essentially that combination of long-term holds Bitcoin, a third ETH, a whole, a third, and DPI, a third. What are we looking at on the bankless bed index on the week, up or down?

• 6:56David Hoffman?

  Clocking in at $142. It's a down on the week, but on the month, it's up 2%. And like we say, oh, no, excuse me, it's up 2% on the week. On the month, it is up a fantastic amount, like almost 55% on the month. It started $84 and then it maxed out at $158. And we are coming in at $142 for the bed index. Again, the best index in all of crypto.

• 7:23Ryan Sean Adams?

  That's your buy and hold. Don't even have to worry about anything else you say on the show. David, let's take a look at this. L2B is pretty hot. These are, these are some metrics we're starting to include in the market section because this measures how much value is locked inside of Ethereum layer twos. And what we mean by layer two is chains that are completely secured by the Ethereum network and using the economic security of ETH, the asset. So this wouldn't include right now, anyway, Polygon, things like that. But it looks like we're up, up lately. This is the 90 day. Here's the 30 day. Still up on the week, almost 770 million locked in layer two. That's kind of a good sign.

• 8:06David Hoffman?

  Yeah. And again, this is definitely riding on the back of the DYDX token, which really incentive incented a lot of activity. And there's also some new players, which I had never even heard of. Nah, me, there's a layer two project that I have, no, I have never heard of that before. All of the TVL, the $143 million TVL is actually their own token. So it's not really the best signal.

• 8:29Ryan Sean Adams?

  I would discount that one.

• 8:30David Hoffman?

  I would definitely discount that one. But look at optimism, clocking in at 12%. Growth on the seven day, uh, seven days breaking a hundred million dollars deposited into optimism. So congrats to the optimism team. I bet you I have a, my gut take is that's probably a lot of, uh, Uniswap, uh, TVL being captured there, but there's definitely room to talk about synthetics as well. But overall, uh, you know, the L2 is really starting to, to gobble up some value.

• 8:58Ryan Sean Adams?

  Diversify had a good week too, up, um, 33% on layer two. So we'll continue to monitor that, of course. Uh, optimism hasn't gone fully generally available. So it's just in the sort of this limited beta season. Same thing with Arbitrum. I can't wait until Arbitrum enters the ring. Last I heard David, they said sometime in August.

• 9:17David Hoffman?

  August.

• 9:17Ryan Sean Adams?

  Well, look, third week of August. How many more weeks we got?

• 9:21David Hoffman?

  We got one more week, man.

• 9:23Ryan Sean Adams?

  We'll see.

• 9:24David Hoffman?

  They're gonna, they're gonna fucking, excuse my language. They're gonna buzzer beater. Absolutely. It's gonna be the last day of August.

• 9:31Ryan Sean Adams?

  Yeah, why not? Um, anyway, so more layer twos are entering the, the ring. I think this is just the start of, maybe layer two summer just sort of expand.

• 9:42David Hoffman?

  When does summer end?

• 9:44Ryan Sean Adams?

  Yeah. Now, summer ends when, you know, yeah, it goes over five billion. Let's say, we'll say that. Uh, I don't think we're that far away though, to be honest. All right, let's talk about this burn. Man, I can't get enough. My favorite website on the internet, to be honest. And do you see what they added?

• 10:02David Hoffman?

  Right.

• 10:02Ryan Sean Adams?

  This Monday?

• 10:03David Hoffman?

  Simulator. Yeah.

• 10:04Ryan Sean Adams?

  Yeah. Have you been playing with the?

• 10:06David Hoffman?

  I'm yet to press that button and have it not be negative.

• 10:09Ryan Sean Adams?

  Oh, I thought you were gonna say, I'm yet to press that button. I was like, what are you, how do you not?

• 10:13David Hoffman?

  I wake up and do it.

• 10:17Ryan Sean Adams?

  So anyway, for, for folks that can't see our screen, this is basically a button on ultrasound dot money. Um, you can press it and basically it simulates as if the merge was here, if proof of work was turned off, as we believe it will be Q1, Q2 next year sometime 2022, what would ETH issuance be? And it turns out if you take the burn and you set some parameters and like, again, choose your own parameters, but these are some fairly conservative parameters, 20, 20 Gueye, uh, 10 million ETH.

• 10:48Ryan Sean Adams?

  We'd actually be burning negative 1.1% ETH on an annualized basis. That, my friends, is ultrasound money. That's what we've been talking about the whole time.

• 10:59David Hoffman?

  Mm hmm.

• 10:59Ryan Sean Adams?

  And that would be the case, given the amount of ETH we are burning these days. At a 1.7 million ETH per year burn rate, pretty impressive.

• 11:09David Hoffman?

  1.7 million burn rate with a 0.4 million issue rate. So a global net deflation of 1.1%. And then if you are also an individual who is staking ETH, you also get your 5% to 8% of new ETH on top of that, while the global supply is reducing by 1.1%. This has always been my long-term retirement plan, ever since I figured out what this whole Ethereum thing is. And so it's real nice to see a plan come together.

• 11:38Ryan Sean Adams?

  You're not really ever going to retire, David. You can keep producing content.

• 11:42David Hoffman?

  I'll talk about it, though.

• 11:45Ryan Sean Adams?

  Do you know what? If someone wants to understand ETH, you know what I think they could just do? Is just go to this website, right? And like every single one of these gauges and dials, if you don't understand what they do, what they mean, what they are, why they're important, learn about that, read the FAQs. If you understand everything on this website, ultrasound.money, then you understand ETH. You understand why we're saying like 10K ETH is like just the start.

• 12:14David Hoffman?

  Right.

• 12:14Ryan Sean Adams?

  You understand why we're so bullish on this asset.

• 12:16David Hoffman?

  Short-term price target.

• 12:17Ryan Sean Adams?

  Come on. I just think the reason ETH is not already 10K or higher, David, is because there's a very limited set of people who actually understand this website.

• 12:26David Hoffman?

  Mm hmm. Yep. Yep.

• 12:29Ryan Sean Adams?

  We'll see where it goes. Good job, ultrasound money, folks.

• 12:32David Hoffman?

  Yeah, if you can explain ultrasound money, like the amount of edge you have over just the universe is pretty insane.

• 12:39Ryan Sean Adams?

  Edge over the universe. All those aliens out there speculating on their

• 12:43David Hoffman?

  Ether, the best asset in the whole entire universe.

• 12:46Ryan Sean Adams?

  Yeah, not galaxy, universe. David stopped short of the multiverse, so you're being conservative there. All right, gas price estimated from 100,000 blocks.

• 12:57David Hoffman?

  That's because there's ether in other multiverses, by the way.

• 13:00Ryan Sean Adams?

  Okay, okay, thanks for adding that, I'm sure people are curious.

• 13:04Ryan Sean Adams?

  Less volatility now that we have EIP 1559. What? Explain that to me.

• 13:08David Hoffman?

  Right, so EIP 1559, in addition to all the things that it does, one of the things that it does is it helps gas price estimation. And the moment that EIP 1559 got included into Ethereum, we were actually able to see that with on-chain data. And so what we're looking at is we are looking at gas prices to get included into a block. And on the left, before we have EIP 1559, the ranges for estimated gas prices would range from anywhere between like at the lowest 2 to 5 Gwei, up to the highest, which is 1,200 Gwei. And then as soon as EIP 1559 got introduced, all the gas price floor got elevated to about 20 Gwei gas.

• 13:50David Hoffman?

  And then a significant amount of the gas price ceiling got chopped off and got somewhere between, you know, 80 to 100 Gwei. There's definitely some spikes up to, up to the, on the upside. But like, everything has gotten condensed into a much more narrow band of gas price inclusion. And it's very important to note that this is before a significant amount of EIP 1559 type transactions are even happening on Ethereum.

• 14:18Ryan Sean Adams?

  Yeah, we're only at like 20 or 30% now, aren't we?

• 14:20David Hoffman?

  Yeah, Metamask just finally rolled out EIP 1559 support. And so I expect a significant number of transactions to now be of the EIP 1559 type. But the data that we are seeing here is before that. And so as we approach like 100% of transaction, EIP 1559 transactions, this band is going to get even narrower and narrower.

• 14:41Ryan Sean Adams?

  That's good. Less choppy good. This is good UX, right?

• 14:44David Hoffman?

  Less choppy good, yes.

• 14:45Ryan Sean Adams?

  That means like, you're paying 20 Gua for gas right now and an hour later, you're paying 25 Gua, something like that. Rather than what we have seen in the past is like super choppy. Suddenly it's in the hundreds. Although I will say there still are these spikes upward, David. In fact, you like screenshot it, this crazy spike upward. I don't think I've ever seen like if we pre EIP 1559, if I saw gas price exceeding 2,000 Gua, I'd be like, oh, red alert crisis. What's happening? You know, CDPs are being liquidated. Oh, my God.

• 15:19David Hoffman?

  Exit all markets.

• 15:21Ryan Sean Adams?

  Yeah. Crypto's dead.

• 15:23David Hoffman?

  Well, so this is actually just a nature of what's going on in Ethereum at this present moment. And so I took a, I happened to take a screenshot at this moment, this NFT drop happened. It was, I hadn't even heard of the NFT drop. It all is sold out in under like five minutes or like, I think, I think it's something as small as like 15 blocks or something. And so there was an insane amount of demand and congestion in a very acute amount of time. And if you remember our EIP 1559 podcast with Hazu, he was talking about how the, how block size can increase at 12.5% per block. So if, if the block becomes completely saturated, base fee goes up by 12.5%.

• 16:04David Hoffman?

  And what he was talking about with that is that that 12.5% can compound really, really quickly. So in the space of just a few blocks, gas fees went from like, you know, 50 up to 2,500 because that 12.5% compounds really, really quickly. And so while we do have volatility dampeners in block, gas fee inclusion, you can still get these spikes if there is all of a sudden an insane amount of demand for some reason, really, really quickly. And so like NFT drops are a very concentrated amount of demand. And you see the flexibility in, in the base fee by the EIP 1559 metric taking, taking shape here.

• 16:46Ryan Sean Adams?

  So you still do see these spikes, but they settle down faster.

• 16:49David Hoffman?

  They settle down fast, right?

• 16:50Ryan Sean Adams?

  Look at the volatility difference. It's just like, we still get the spikes, but we get some settlement a little bit quicker. David, let's talk, you said an NFT drop, man. NFTs, it's NFT season, NFTs are hot. Look at this. NFT monthly volumes in January 2021, they were 17 million. Okay, respectable. Look, 17 million. We would have been pleased with that in January and I think we were. NFT monthly volumes in August 2021, 848 million.

• 17:20David Hoffman?

  The larger number.

• 17:21Ryan Sean Adams?

  The month is not over yet. The month is not over yet. Okay, this is going to exceed a billion. Like, wow, that's crazy.

• 17:27David Hoffman?

  That's 848 million on the 19th, or excuse me, the 16th of August. So just one day over halfway through the month, we are like doing a 3X on like the previous month's volume. And so like, where are we going? That wasn't even including the drop that we were just talking about just now, right? Or all the other drops. Yeah, the volume on NFTs is absolutely insane. And that's kind of why I was saying earlier that NFTs do feel kind of frothy. But also what I was saying in the Market Monday this morning is just like, NFTs are such a simple concept to think about if you don't think about it. It's like, oh, humanity just trades pictures now? Like, oh, okay, I guess we do this. And so it's such an easy subject to get behind if you don't think

• 18:09David Hoffman?

  about it. And I think a lot, a large portion of the world is just not going to think about it. And they're just going to go onto OpenSea and they're going to see a picture.

• 18:16Ryan Sean Adams?

  It's going to become normal.

• 18:16David Hoffman?

  And they're going to see a price tag and then they're just going to hit buy.

• 18:19Ryan Sean Adams?

  Yeah, it's, it's like, technology just makes weird things normal. That's what happens, right? Like, it's like the, you know, getting in a stranger's car, right? Using an app on your phone. That's freaking

• 18:30David Hoffman?

  Right.

• 18:30Ryan Sean Adams?

  Bad shit crazy.

• 18:32David Hoffman?

  Right.

• 18:32Ryan Sean Adams?

  Like, how crazy would that be in the 90s? No, don't talk to strangers. Don't go in somebody else's car you don't know.

• 18:38David Hoffman?

  No, don't pay $100,000 for a JPEG.

• 18:41Ryan Sean Adams?

  Yeah, don't. But now it's normal.

• 18:44David Hoffman?

  Right.

• 18:45Ryan Sean Adams?

  That's the thing. NFTs, let's talk about OpenSea because that's a huge NFT story. Here, here's the headline, though, David, is OpenSea has now recently passed Etsy. Etsy in volume, 100 billion so far in August.

• 18:59David Hoffman?

  1 billion in August.

• 19:00Ryan Sean Adams?

  1 billion. Sorry, not 100 billion. That might be next August. 1 billion in August, bigger than Etsy. NFTs are rapidly catching up to all of eBay. Wow, Web 3 starting to challenge Web 2 incumbents. People didn't see this coming, how fast that, like, this is happening. OpenSea is sort of like the eBay for NFTs. And, man, a billion in one month? It's insane.

• 19:25David Hoffman?

  And it's in, the comparisons to real-life companies like Etsy and eBay are really, really nice to kind of get an anchor point. But we also have to remind ourselves that, like, The reason why it's so easy for OpenSea to get so much volume is because like they don't have any inventory. People on Etsy have to ship things. The last thing I bought on Etsy were like these massive table legs that came from Europe and cost me $150 in shipping and it took two weeks. OpenSea is just transferring a digital asset from one Ethereum address to another. So it's natural that these things can scale way further. And so like while that while OpenSea is like finally competing in volume with like these legacy kind of like akin platforms, I actually expect OpenSea to be like many, many orders of magnitude

• 20:10David Hoffman?

  larger than these things, just by the nature of the ease of trading digital assets.

• 20:14Ryan Sean Adams?

  I think people see this as sent and many people outside of the industry like will dismiss it as a bubble, as they always have with crypto.

• 20:21David Hoffman?

  Maybe it is. Maybe it is. But like the bubble will come back.

• 20:25Ryan Sean Adams?

  The bubble comes back, right? It's like a real bubble is something that doesn't come back. Like everything's tulips. I mean tulips never came back. They had like the, you know, their pop and then-

• 20:34David Hoffman?

  As financial assets. Yeah, right.

• 20:36Ryan Sean Adams?

  Exactly. There was never another tulip bubble. But NFTs, crypto assets just keep coming back. So even if this is a short-term bubble, like NFTs are here to stay. It's pretty impressive. All right, man. That's it for markets. Guys, we will be right back talking about releases, talking about the news, talking about the hot takes for the week, getting to the meme of the week, which I know you're waiting for. But before we do, we want to thank the sponsors that made this possible.

• 21:00David Hoffman?

  Living a bankless life requires taking control of your own private keys. Not your keys, not your crypto. That's why so many in the bankless nation already have their Ledger hardware wallets, which makes proper private key management a breeze. But the Ledger ecosystem is more than just a secure hardware wallet. Ledger is the combination of the Ledger hardware wallet and the Ledger Live app. And if you're used to seeing all of your crypto services and favorite D apps all in one place, Ledger is where you want to be. Not only does Ledger let you buy crypto assets straight from the app, but it also hooks into decentralized exchange aggregators like PairSwap, which makes sure that you are getting the best prices on your trades without your assets ever leaving your control. DeFi never stops

• 21:42David Hoffman?

  growing and the Ledger Live app grows alongside with it. So click the link in the show notes to see all the DeFi apps that Ledger Live has. And stay tuned as more and more apps come online. And if you don't have a Ledger hardware wallet, what are you even waiting for? Go to ledger.com, grab your Ledger, download Ledger Live and get all of your D apps all in one place.

• 22:04David Hoffman?

  Bankless is proud to be supported by Uniswap. Uniswap is a new paradigm in asset exchange infrastructure. Instead of a cumbersome order book system where trades are matched with other humans, Uniswap is an autonomous piece of software on Ethereum, which is what Ryan and I call a money robot. No human counterparties or centralized intermediaries, just autonomous code on Ethereum. Input the token you want to sell and receive the token you want to buy. Something brand new in the Uniswap ecosystem is the Uniswap Grants Program is now accepting applications for grants. We have been saying this for a while and we'll say it again. DAOs have money and they are in need of labor. If you think that you have something to contribute to the Uniswap DAO, apply for a grant to Uniswap.

• 22:48David Hoffman?

  Just look at the size of the Uniswap treasury. It's almost $3 billion. This mountain of capital is looking for labor. Do you have something of value to contribute to the Uniswap DAO? No matter how big or small your idea is, you can apply for a uni-grant at unigrants.org and help steer Uniswap in the direction that you think it should go. That's exactly what we did to get Uniswap to be a sponsor for Bankless and you can do the same for your project. Thank you, Uniswap, for sponsoring Bankless.

• 23:16Ryan Sean Adams?

  All right, guys, we are back with the releases. Let's start here. David, DeFi's 1-inch, that is the 1-inch aggregator across centralized exchanges, gives you some great pricing on assets. They just launched on Optimism. So we're getting sort of the DeFi Money Lego primitives. Now we're getting the aggregators that sit on top of them on Layer 2. Pretty cool.

• 23:36David Hoffman?

  Absolutely. And the interesting thing is that I'm sure 1-inch is also going to deploy itself on other L2s. And so we're going to have the same aggregating teams with aggregators on different L2s. I want the listener to question, ask themselves, what happens next when aggregators are on different L2s?

• 23:57Ryan Sean Adams?

  I have an answer to this.

• 24:00Ryan Sean Adams?

  Well, we need an aggregator across all of the L2s, don't we?

• 24:03David Hoffman?

  Aggregator, aggregator?

• 24:05Ryan Sean Adams?

  Yeah, we need a layer two aggregator. I wonder if they'll get into that space. I know there's a lot of, it requires a bit of different technology, right? Requires some things that like connects and the hot critical are doing with state channels, this sort of thing, but we're going to end up there. I wonder what one inch plan, what their plans are for this.

• 24:23David Hoffman?

  Yeah, it's definitely coming. That's for sure.

• 24:25Ryan Sean Adams?

  Let's talk about this. Balancer launches two things, meta-stable pools, number one. And the second, they launched a partnership with Lido, Lido like Fido on a meta-stable pool incentive program. Okay, break this down for us. What is Balancer up to?

• 24:42David Hoffman?

  Right. Okay, so two separate announcements in the same post. So we're going to cover them both. This first is their meta-stable pools, which is basically a basket of various yield-bearing dollar instruments. And interestingly, yield-bearing in different routes. So some dollars are in like curve generating dollar fees by being in the LP. Other dollars, dollar tokens are like C D I out of Coinbase. And so these are things that are all generally about a dollar, but they're all yield-bearing. And so now they're in a new product from Balancer, which is a new dollar stable token.

• 25:19David Hoffman?

  What they say is that new stable, new USD stable are just a set of nested other stable coins, D I, USDC, USDT. And this is not only offering a new dollar stable coin, which is getting yield, but there's also offering even deeper liquidity on these stable coins in the first place. So that's the first announcement.

• 25:39Ryan Sean Adams?

  Composeability, we get all the things. This is the beauty of Money Legos. Now we've got a new, I guess, stable coin that is composed of other stable coins through Balancer, through the magic of Balancer. So what else do they do in David?

• 25:53David Hoffman?

  Yeah, so their partnership with Lido is trying to bring liquidity to staked ether, which is the whole point of Lido. Lido is a staking as a service DAO. And so they, you can deposit your ether and get staked ether back. And then Balancer has opened up an ether. To staked ether pool so that if you just want to stake your ether and don't want to be like burdened by the by just going into Lido and staking it yourself, you can just go to balancer and swap your ether for a staked ether. And then boom, all of a sudden you have staked ether. And so the liquidity in that pool is getting bootstrapped as we speak. And there are some Lido rewards for people who provide liquidity.

• 26:34Ryan Sean Adams?

  That's super cool. Tax event, though, maybe depending on your jurisdiction.

• 26:38David Hoffman?

  Probably.

• 26:39Ryan Sean Adams?

  So FYI on that, guys, got to figure that out. I don't know if the IRS can even figure that out. They have no idea.

• 26:46David Hoffman?

  Absolutely. Yeah, they're just going to tell us to fix it and we're going to be like, yeah, what do we do?

• 26:51Ryan Sean Adams?

  Just do your best, guys. All right, let's talk about this. I think this is big, actually, David. Galaxy Digital launched a DeFi index tracker with who? With Bloomberg. Bloomberg, the other, the other be named media company, David. It's not Bankless, it's Bloomberg. Pretty big deal, though.

• 27:08David Hoffman?

  Bankberg.

• 27:09Ryan Sean Adams?

  Yeah, pretty big deal, though, Bankberg.

• 27:13David Hoffman?

  That's a terrible joke.

• 27:15Ryan Sean Adams?

  Whatever. We're leaving it in. We're not cutting this, guys. Pretty big deal because I think everything that Bloomberg stamps, you know, their approval on with Galaxy has to pass some regulatory bar. And I think you included this, David. This is what it's composed of. And you compared Bloomberg with Bitwise, which provides another index to accredited investors still, but like very regulated index Bitwise is doing. There's a lot of similarities, but there are some differences. What would you point out here?

• 27:45David Hoffman?

  Yeah, go ahead and click on that just so it blows up a little bit. The big thing I've noticed is that Bitwise's index is has a lot less of Uniswap dominance. It has 32% Uniswap, whereas the Bloomberg Galaxy index has 40%. To some degree, the 40% in once inside of one index is like, that's such a high number for an index that has so many different tokens in it. And like, I get it's probably a market cap weighted index, but like that lower Uniswap dominance in Bitwise is a little bit attractive to me. Bitwise has 2% more AVE allocation, 1% more MKR allocation. The other tokens that they have that they share in there have generally a matched allocation.

• 28:25David Hoffman?

  But the other thing that differentiates Bitwise from Bloomberg and Galaxy is that they have ren, Curve and Zero X and Bancor in there.

• 28:33Ryan Sean Adams?

  Wait, who does?

• 28:34David Hoffman?

  Bitwise does. Bitwise has those tokens in their index. Bloomberg has UMA and SNX in their index, which Bitwise doesn't have. I'm wondering if there is a securities conversation to be had about this. SNX is a token that, or maybe not securities, but synthetic assets, right? So Synthetix makes synthetic assets and synthetic assets are generally much more regulated by the CFTC. So it'd be interesting to hear why Bloomberg and Galaxy included SNX and why Bitwise didn't. My hunch is it's the synthetic asset thing.

• 29:11Ryan Sean Adams?

  Hard to know, somewhat arbitrary. This is why I prefer DPI to both, right? Like, you don't even have to worry about these things. But I think the good news here is, hey, this is a much better index than, do you remember that terrible index that Goldman put together a few weeks ago? We talked about in the roll up.

• 29:28David Hoffman?

  Like, it's like, I don't even have words to express how terrible it was.

• 29:32Ryan Sean Adams?

  Had Facebook in its DeFi index.

• 29:33David Hoffman?

  Didn't have a single ERC20 token.

• 29:35Ryan Sean Adams?

  Like, how stupid.

• 29:36David Hoffman?

  Right, it's like DeFi companies.

• 29:38Ryan Sean Adams?

  This is much better and it's Bloomberg and you're just getting out there and this is good for the asset class and good for the space. This was Frank's take that this is a big stamp of approval for DeFi by the data giant Bloomberg. Yeah. The next tweet is what?

• 29:54David Hoffman?

  Yeah, he says essentially these tokens all meet Bloomberg's standards of institutional trading and custody readiness in the United States, as well as quality of pricing, which is just saying that DeFi is mature enough for institutional allocation.

• 30:08Ryan Sean Adams?

  Wow, I feel much better about DeFi now. I don't know about you, David, but this stamp of approval is what I was waiting for.

• 30:13David Hoffman?

  Hey, if Frank said it, I'm on board.

• 30:16Ryan Sean Adams?

  Thank you Bloomberg. David, let's talk about this. MetaMask, we alluded to it, we were talking markets, but they are now supporting the rollout of EIP 1559. So they've been adding it to their wallet, but it's been sort of a phased rollout, I believe, and now it's, I guess, fully available. I've not yet sent a transaction, but there's a link in the show notes on how to send a EIP 1559 transaction in MetaMask. Looks like it's pretty easy and it takes here.

• 30:47David Hoffman?

  Nothing, just go get your learn on and check out MetaMask and see if anything's changed.

• 30:52Ryan Sean Adams?

  Yeah, should be good. Fintech getting into crypto. So this is on the raised side. Fintech Collective, they just closed a $250 million fund dedicated not to like crypto in general, dedicated to DeFi. What I think's interesting about this, I don't know a lot about Fintech Collective other than they're a venture capital firm, but they're involved in fintech, right? And digital assets. This seems to me, David, to be like the next frontier for fintech. And investors are starting to come around to that. They've made tons of money in fintech over the last decade, and now they're shifting this to digital assets. There's going to be, as we've always said, a DeFi mullet, a marriage between the two. You're gonna have fintech, you have crypto,

• 31:37Ryan Sean Adams?

  and investment's going to like, you know, push towards both of these things. I think the banks are gonna be left out in the cold as a result of this, but we're starting to see the capital flow, traditional fintech investors, start getting into DeFi. It's kind of cool.

• 31:53David Hoffman?

  This is just investing in the DeFi mullet. So the DeFi mullet is getting a little bit more mullet tier. I think, I think we could combine-

• 32:01Ryan Sean Adams?

  A bit more hair?

• 32:01David Hoffman?

  A little bit more hair. Yeah, I think we could combine the words DeFi and fintech into DeFintech. And so this is what they are investing in, they are investing into DeFintech.

• 32:11Ryan Sean Adams?

  Wow. Did you just come up with that?

• 32:13David Hoffman?

  Yeah, I just came up with that.

• 32:14Ryan Sean Adams?

  Dude, that's, that's why we have you on the show, dude.

• 32:16David Hoffman?

  DeFintech.

• 32:17Ryan Sean Adams?

  DeFintech.

• 32:18David Hoffman?

  I don't know.

• 32:18Ryan Sean Adams?

  You don't know until you tweet it.

• 32:20David Hoffman?

  DeFi tech?

• 32:20Ryan Sean Adams?

  DeFi tech.

• 32:21David Hoffman?

  I don't know.

• 32:21Ryan Sean Adams?

  You guys tell us.

• 32:22David Hoffman?

  There's such a ready marriage between these things that like, DeFi is fintech. It is financial technology, and that technology is blockchain, is smart contracts, is Ethereum. So like, it's a natural inclusion into a fintech stack.

• 32:38Ryan Sean Adams?

  Yeah, to be honest, what's what's super cool is like I've what we've always said is like fintech is just lipstick on a pig and the pig is the banking system, right? That's what we've been doing the last 10, 15 years, putting reapplying lipstick on that ugly pig. What's cool about crypto is like it's not no longer a pig. I mean, it's something much more beautiful to put lipstick on. It's a unicorn. It's a beautiful unicorn.

• 33:00David Hoffman?

  Beautiful unicorn.

• 33:01Ryan Sean Adams?

  And you get to put lipstick on. It's not even lipstick. It's just part of the unicorn. And so I am. This is why we are way more excited about crypto. It is bottom up free design of the money system rather than just just another layer on that ugly old pig.

• 33:17David Hoffman?

  They didn't. They didn't have too many details as to where this money was going, but they did call out the Ethereum DeFi ecosystem specifically, which is nice to see because when we see people like coming into the space, we definitely I definitely get skeptical. It's like, okay, they're investing in DeFi. Are they investing into DeFi on Bitcoin? Is that what they're doing? Are they? Are they making that mistake? Or is it real DeFi? And from the few comments that they have in this article, it sounds like they are investing in real DeFi. So that is 200 million will be going into investments into early stage companies. And then 50 million will be actually allocated towards a DeFi fund, which is probably like buying DeFi tokens.

• 33:56Ryan Sean Adams?

  There you go. And now it's time, guys, for us to give our weekly invitation for you to go get a job in crypto.

• 34:02David Hoffman?

  Please do.

• 34:03Ryan Sean Adams?

  Have you checked out the Bankless Jobs Board lately? Got some hot stuff on there. Senior Product Manager at Immutable over NFTs. That'd be an awesome job. A full stack engineer at Palette as well. There's a ton of other job opportunities. Go check that out on the Bankless Job Board. You'll see a link in the show notes.

• 34:21David Hoffman?

  Right, David, you want to get stuck in the legacy world? The whole point about this whole entire movement is we're leaving that behind. If you're not coming with us, then we're leaving you behind too.

• 34:29Ryan Sean Adams?

  Yeah, come with us. It's it's great.

• 34:32David Hoffman?

  We want you on board.

• 34:33Ryan Sean Adams?

  All right, man. Let's get to the news. The first is this Robinhood. Remember Robinhood, GME Fiasco? Some people still use it. Revenue from Robinhood.

• 34:43Ryan Sean Adams?

  From their cryptocurrency alone, jumped to 41% of their total revenue. Like Robinhood's a big company, just IPO'd. 41% of their revenue coming from crypto blows me away.

• 34:54David Hoffman?

  Think about how many crypto assets that Robinhood has on this platform. It's only a handful and honestly, not even the good ones. And so like it's

• 35:03Ryan Sean Adams?

  You want to buy some Ethereum Classic, David?

• 35:04David Hoffman?

  Right, which is categorized inside the Ethereum family inside of Robinhood. So despite how terrible Robinhood is as a crypto asset like trading platform, 41% of its total revenue is coming from crypto, which there's a number of takeaways to be had. The people that are using Robinhood are increasingly becoming crypto people. So they're getting more and more exposure to crypto, more and more inclined to buy crypto assets. Think of all the traditional assets that you could buy on Robinhood, like all bajillion of them. And yet they prefer crypto assets. And we know that Robinhood is a terrible trading platform for crypto. It needs to make some significant improvements and maybe finally having so much revenue coming from the crypto side,

• 35:47David Hoffman?

  maybe they actually more intentfully go down the crypto rabbit hole and improve their goddamn crypto product offering, which they need to.

• 35:55Ryan Sean Adams?

  This is my take. It's like, I mean, we could lambaste them for, you know, how terrible it is. You don't have the ability to withdraw unless they've changed that. You can't even withdraw your crypto assets, right? So like, good luck getting into anything DeFi. But actually, what I think this will do is exactly what you said, is it will catalyze them to redouble their efforts and invest in real crypto infrastructure, add those features that users want. And this is just going to be another onboarding into like crypto native platforms. So like you start with Robinhood and then where do you go? I actually wonder, I mean, most of the people I think in the bankless journey started with the crypto exchange like Coinbase and Gemini. At least those are the stories I've heard. Have you actually heard of anyone coming through and becoming more crypto native through Robinhood, getting their start there?

• 36:41David Hoffman?

  Yeah, there are people I know who buy and sell crypto on Robinhood. They don't have like the the commitments to being like a DeFi person or a crypto person or a bankless person yet. But they do invest in crypto via Robinhood.

• 36:55Ryan Sean Adams?

  They just like that price exposure.

• 36:57David Hoffman?

  Yeah, I mean, it's just where all the they're like their Ether and Bitcoin and Dogecoin holdings are right next to their AMC and GME holdings, right?

• 37:05Ryan Sean Adams?

  Yeah, it's it's meme stuff. Anyway, it's cool. It's it's good.

• 37:09David Hoffman?

  If anyone from Robinhood who works at Robinhood is listening to this, let Robinhood know that Ryan and I will straight up give you all the free advice that you need in order to make the best crypto product offering.

• 37:20Ryan Sean Adams?

  We will interview you. Let's get the CEO of Robinhood on Bankless. We will talk about what you guys could do to capture the crypto market. Go take it away from Coinbase.

• 37:29David Hoffman?

  We will double your revenue. I promise.

• 37:32Ryan Sean Adams?

  Well, that's a Bankless promise, Eric.

• 37:35David Hoffman?

  The Dow promises that, not us.

• 37:40Ryan Sean Adams?

  All right. Sorry, Bankless Dow. Ethereum stuff. This is cool. On the end, the beginning of Layer 2 summer, we've got Polygon, which has a sidechain. They've always committed to you and promised to building a true Layer 2 in the future. They just purchased Hermes. My understanding of Hermes, David, is they are you talk to them at ECC. They are like a a Layer 2 solution that is building a ZK EVM. So a ZK rollup, which is kind of a different class of rollups, something that Vitalik thinks is incredibly promising, others in the ecosystem do as well. I think what they're doing is they're doing like a talent acquisition, technology acquisition, so that they can get a Layer 2 to market that much

• 38:22Ryan Sean Adams?

  faster and just add that to the Polygon ecosystem and toolkit. So this is like an accelerant for them to do that. Polygon's got the users, Hermes has the tech, you combine those things together and you've got something good. I think that's the play here, but it seems pretty interesting. What's your take?

• 38:38David Hoffman?

  I think you summarize it fantastically. Hermes has kind of been struggling to onboard users and and, you know, market cap and total value locked and applications, whereas Polygon has been doing Absolutely fantastically in that arena. Meanwhile, Polygon has been lagging behind in actually becoming a true Layer 2, whereas Hermes is absolutely fantastic in that arena. And as you've said, people are generally bullish long-term on ZK rollups as a technology, mainly because of the power of the assurances that ZK rollups provides. And so people think that the long-term conclusion of Layer 2s on Ethereum are going to be of the ZK flavor.

• 39:21David Hoffman?

  And so Polygon is fixing its not being a Layer 2 issue. And Hermes is fixing its not getting sufficient adoption issue. And so we're taking the best of both worlds and we're putting it into one scaling project.

• 39:35Ryan Sean Adams?

  What's interesting here about these crypto-native mergers and acquisitions is there's always a token component involved as well. So there was a Hermes token, and I believe that's going to be, you're going to be able to redeem that for the Matic tokens in the future. So they're not only purchasing technology in this acquisition, but they are also becoming more economically aligned, which is super interesting. David, let's talk about this. I think this is big. Hey, I know you're a big TikTok fan. I know you're on there all the time.

• 40:08David Hoffman?

  You try and pull me off of TikTok all the time.

• 40:10Ryan Sean Adams?

  I know.

• 40:12Ryan Sean Adams?

  TikTok, though, pretty big deal. They are partnering with Audius. And Audius has a token on Ethereum. They're also using the Solana blockchain to bring a decentralized, open music streaming service to the market. What have you read about this partnership?

• 40:30David Hoffman?

  It's one of those things where TikTok is a fantastic music sharing service. And there might be issues with TikTok in sharing music that has some sort of nation-state copyright issues on it. And that's exactly what Audius is really good at circumventing. It's a decentralized audio storage system and sharing system. And so this is a nice little marriage between these two projects. The other cool thing to think about is all of these social media platforms are tapping into Ethereum one way or another. Audius is one. Reddit is another one. And there's another one that I'm missing that I can't think of the name of right now.

• 41:13David Hoffman?

  But like, big social media platforms are starting to tap into Ethereum in different ways.

• 41:17Ryan Sean Adams?

  Yeah, they're growing out their own Web3 mullet, maybe. Maybe that's what they're doing in social media companies. David, let's talk about this. While we were sleeping, Sam Zeez's son saved a DeFi yet again. No one knew he was doing it, but he published his results afterwards. Can you talk about this story?

• 41:35David Hoffman?

  Yeah, absolutely. The best thing about Sam Zeez's son is that he saves all of our bags from getting rug pulled, but then he also is a fantastic writer and tells us in great narration and great detail how he actually did it. So like the technical details on this went over my head. Sam is a prolific coder.

• 41:52Ryan Sean Adams?

  Also pseudo anonymous.

• 41:54David Hoffman?

  Also pseudo anonymous, yeah. And so he explained what he, you know, his takeaways from this. And basically, his big takeaway is that the protocol that he saved was Sushi Swap. And Sushi Swap recently came out with their brand new MISO platform. And on Sushi Swap are a bunch of different products, which in silo work perfectly and are perfectly secure. But when you put them all onto the same like product offering on, and you start to connect these contracts, you start to accidentally create bugs. And so while these things work perfectly and are perfectly secure in isolation, when you de-isolate these things, you actually create new bugs. And so that's what happened with Sushi Swap. There was

• 42:36David Hoffman?

  over $350 million that anyone could just grab for themselves. Sam saw it first. And so he pulled the Sushi Swap team into a Zoom meeting. They had their war room. They had their plan. And I think over the space of, I can't remember how many hours, but like under 12 hours, I think they had identified the problem, come up with a plan, and then saved all of the funds. The other big takeaway about this story, read the article, because it's just a great story. It's a great like sci-fi story about Ethereum. Like I said, Sam writes really, really well. The other thing to take away from is that like Paradigm is a massive investor into Uniswap, which is Sushi Swap's direct competitor. And Joseph

• 43:18David Hoffman?

  DeLong at Sushi Swap and overall Sushi Swap and Uniswap have had like a less than awesome relationship, you know?

• 43:24Ryan Sean Adams?

  Sushi forked their code in the beginning, right?

• 43:26David Hoffman?

  Right. And then there's just been like jabs being thrown at each other on Twitter. But all when as soon as users funds became at stake, all differences were set aside and they got all got into the same zoom meeting and jabs were no longer thrown and they focused on saving 350 million dollars of user funds. And so again, a scary story of like perhaps a near death experience from sushi swap. This would have significantly harmed sushi swap for a very long time. This would have left a very bad scar. But it didn't happen because Sam Cee Sun is a good guy and really smart.

• 44:02Ryan Sean Adams?

  Yeah, absolutely. Super talented and glad he's a white hat rather than a black hat and like pulling these funds for his own purposes. Because somebody maybe almost as smart as Sam Cee Cee Sun might be out there, might come along and might take, do these sorts of things, except exploit them and try to escape. I mean, we've seen some of that activity too. It's another reminder, look, this is the wild west, right? Like when you deposit funds inside of a DeFi contract, especially something that is brand new, something bad could happen, right? Now, what's happened so often, maybe low listening some complacency is a lot of these DeFi protocols have then restored the funds, right?

• 44:45Ryan Sean Adams?

  They've sold some of their treasury, they've found some way to essentially provide self insurance. But these things can still happen and you never know. But glad we have Sam out there watching over us. David, do you want to get into this story? This is a uniswap governance tale, I guess. What we're reading here is a tweet, it's a PSA from Dune Analytics about a uniswap governance proposal that would let another analytics firm, Flipside Crypto, manage up to 25 million in uni tokens. Manage, not take them all, but manage them and use the yield to fund their own operations. And the story as of now is it's a governance proposal that's about to pass, doesn't have very much community attention.

• 45:31Ryan Sean Adams?

  And so there's been a lot of pushback from the community who feels like this was sort of snuck in. Treasury bill style, infrastructure bill style by the treasury, like under the radar. And suddenly crypto Twitter is in a frenzy about it. This is DC investor, the growing precedent of using the uni token treasury for large cash grabs. Use that term, large cash grabs to support pet causes, often benefiting narrow groups is bad. It's very bad, he says, and he cast his vote no. What's your take on this story?

• 46:02David Hoffman?

  Yeah, since Dune Analytics and others have signaled about this vote, the vote has flipped to be being voted no, I believe. Oh, if that is a real time update, oh, we are neck and neck at 47 and 0.6 million uni tokens for and 46.9 million uni tokens against. For the conversations I've had lately, it actually sounds like the this conversation is much more nuanced than just a cash grab by a team who thinks that they can provide some amount of value to Uniswap.

• 46:33Ryan Sean Adams?

  Agreed.

• 46:34David Hoffman?

  That is the problem with having a $3 billion treasury, it actually might be higher at this point. It's like, we have $3 billion, you kind of run out of ideas to spend it on. And so then people will be like, well, you can spend it on me. And I'll take $25 million and I'll contribute a little bit of value. So that that might be an accurate take. The other the other take to have is that like governance in DeFi is weird and very raw and not really

• 47:02Ryan Sean Adams?

  Very raw.

• 47:03David Hoffman?

  Very polished. Right. And so this governance proposal, you you kind of classified this thing as got snuck in. I kind of think that people just didn't pay attention to it until like the final bell. And so people realized that this was happening because people voted for it. And so people, people like, you know, submitted this proposal and then they probably voted yes on it. And then it got enough yes votes to actually become get passed. And then kind of in the last hour, people realized like, hey, this is just this team like asking for a bunch of money.

• 47:36David Hoffman?

  No, this shouldn't happen. This like people are just kind of using the Uniswap like treasury as like a just trying to like DC said a cash grab. It was and we saw this before with the same kind of drama with the DeFi education fund where, you know, they voted themselves a bunch of money. It got accepted and they dumped it. So there's a little bit of drama there. So people are cognizant of this theme of this uni treasury becoming just like, you know, a slush fund for various different projects. I don't think it's that bad, but there definitely overall needs to be a better conversation as to like, what is appropriate to send money towards and what does Uniswap governance really want?

• 48:17Ryan Sean Adams?

  I think a lot of this falls down to like a process issues, right? It always seems like these things that suddenly it's a fire alarm.

• 48:23David Hoffman?

  Right.

• 48:24Ryan Sean Adams?

  Right. And like, I don't think that the flip side crypto team like snuck this in either, even though that's, that's what people feel like, but they feel that way because they didn't notice it until now. So these are some of the problems with token voting that need to be sorted out. Like, is there a better process than just suddenly this made massive decision, you have 24 hours to vote, people see it on chain, like where were the governors before this of the Uniswap protocol? Did they already give input into the process? So I really think DAOs and token teams, token vote teams are going to have to learn from what's happened in the legacy space and the traditional space and how governance

• 49:08Ryan Sean Adams?

  decisions like these are made so that we can put better processes in place and everyone is informed along the way, or else we'll keep having these types of problems. And it will feel like it will feel shady even in cases when it's not because the process has been ill-defined. The other thing is David, like, what's the incentive if you're a Uniswap token holder, right? Like, I have mutual funds with some stocks, like very little because, you know, who needs, who needs stocks, right? But like, I don't attend the proxy, like the votes. I don't, I mean, those stocks-

• 49:43David Hoffman?

  You don't vote on governance on your, on your Boomer funds?

• 49:46Ryan Sean Adams?

  I don't, right? And like, there, you know, there are proxies for this, there are delegates for this, but like, I don't have time to get into the minutia of major shareholder votes. What we're seeing is, is some scalability limitations to like- Governors can't be involved in every single decision either. So we have to find ways around that. Anyway, all I'll say is it's all very immature at this stage. There's a lot more that needs to be done on degovernance. In fact, Vitalik wrote a great post about that earlier this week. I think we'll figure this stuff out as we go.

• 50:20David Hoffman?

  So in the, as this story has progressed, when I first checked it, I saw that the for votes were larger than the against votes. And then people like Dune Analytics and DC Investor called into action and signaled their intent to vote against, and then the against votes beat out the for votes. But now we are seeing the for votes beat the against votes by a slim margin. And I'm on the Flipside Crypto Twitter page and they are retweeting people who are signaling, who are just now signaling their intent to vote for the, the flipside allocation of uni tokens and then also their analysis. Corbin Page, a few other accounts, the Stanford Blockchain Club. So this is, perhaps it's contentious, but it's not like this is all one-sided and there

• 51:03David Hoffman?

  are actually a decent amount of people supporting the for side. And the point, the point I want to make is that like, and I've always thought this was true about governance and we saw this with MKR governance way back when, is that non-contemptious proposals get not very many votes and then they kind of just like sail right through with like, you know, a decent amount of yes votes, but like overall not very much participation. Like non-contemptious votes get little participation. As soon as something becomes contentious, that's when you see people come out of like the cracks and actually start to allocate their funds to a vote. And then all of a sudden we get more and more participation. But like the unfortunate thing is, and why this model is so bad, is that it only happens at the last hour.

• 51:48David Hoffman?

  And so emotions get hot, everything happens all at once. People don't have time to like discuss and deliberate. And so we need to fix that problem. Really this is the crux of the issue is that on contentious votes, everything gets decided like in the last like six hours of the vote.

• 52:04Ryan Sean Adams?

  Yeah, fire, fire alarm voting is what we're doing with some of these things. All right, David, let's talk about this. A proposal that's been shared on Lido Governance to actually have Lido start to collaborate with Polygon and provide a staking service for Matic Tokens. What's going on here?

• 52:23David Hoffman?

  Right, and so Lido is the DAO that is solving the liquid staking, a staked Ether problem. And so you can stake your Ether with Lido. But it's, as a DAO, it could just be a generalized proof-of-stake staking as a service DAO. And so why not Matic? It's a proof-of-stake sidechain, let's stake Matic tokens. And let's allow for non-cosodial staking of Matic. Being a Matic validator is a lot more hardware-intensive than Ethereum staking. And so it's nice to just consolidate that into a fewer hands. And this makes it a lot easier to become a Matic staker because of Lido. So this is kind of the bull case for Lido, is that anything that's proof-of-stake can be staked under the Lido DAO.

• 53:08Ryan Sean Adams?

  Lots of things can be staked, I think, too, and will be in the future. David, let's talk about this. This is a tweet from Stani from the AVE project. There's a proposal to list DPI, list that index inside of the AVE protocol. Stani lists some pros and some cons here, but what's going on with DPI in AVE?

• 53:27David Hoffman?

  DPI has had kind of a slow rollout with becoming collateral, which is kind of a bummer, because I would love to use DPI as collateral. It's an index, which generally means that you don't have single-token risk. The big restrictor behind why DPI hasn't become collateral is because of what Stani is highlighting here at the very end. It's got a multi-sig signer, minter, but restricted by the consent of index co-ops and set labs. And so there's like a centralization risk. And so because index co-op has some admin controls over what and how DPI behaves, that is a risk that lending applications like AVE or Compound have previously not been willing to take.

• 54:10David Hoffman?

  But it sounds like AVE is starting to dip its toes into being okay with a DPI index token becoming collateral. I think also there's a decent ball in the index co-op and set labs court to fix this centralization risk. I don't know if it's even fixable, but I think that there's definitely some improvements that could be made. But overall, stoked to see index co-op tokens being added as collateral. That is a really big step forward for the co-op. Stani, do bed next.

• 54:41Ryan Sean Adams?

  It's a bull case for index co-op and I think set tokens as well, right? Compare those to the indices we were talking about from Bloomberg and Galaxy and even Bitwise earlier. Can you do that with your Bitwise index? I mean, love Bitwise, but it's not crypto native. It's not ERC 20, so it's much more limited. That's why like the DeFi rails is so much better for anything that you're purchasing in crypto. It's just so much more flexible. I think it's going to improve at a far faster rate. David, let's switch to NFTs for a minute. Let's talk about our friends, the CryptoPunks. They're now fully on-chain. The images, their attributes, they're now stored in a contract, fully on-chain? What does that mean, David?

• 55:25David Hoffman?

  Yeah, so this is a good learning moment for people who are still just getting into NFTs. The image is not stored on Ethereum. So that image of the NFT that you own is stored on a Web2 database somewhere. There are a few NFTs where this is not true. Autoglyphs, that is their big like claim to fame for Autoglyphs, that all of the data for the image of Autoglyphs is stored on Ethereum itself. But punks have, you know, becomes so decently valuable that it actually becomes really just logical to actually take all of the punk images and actually put them on Ethereum. So no longer are you requiring whatever server that LARVA Labs is using to store your punk images.

• 56:08David Hoffman?

  Now the punk images are being stored on Ethereum, which really elevates punks to a new level that are, because they are now fully trustless. They use, like, almost all NFTs are trusted assets in the sense that you need that server to be online, so you can actually look at your NFT. Otherwise, it's just a token. I think this is a big problem for decentralized data storage, that could really, they could really solve that by having more trustless storage of images. But since punks are so valuable, they just, you know, decided to spend the gas to put all punks on the actual blockchain.

• 56:43Ryan Sean Adams?

  Wait, do you mean like the punks as like the JPEG itself is on Ethereum, David?

• 56:47David Hoffman?

  Yes.

• 56:48Ryan Sean Adams?

  In this case?

• 56:48David Hoffman?

  Yes.

• 56:48Ryan Sean Adams?

  Like, that's not possible with a lot of art, because

• 56:51David Hoffman?

  Right.

• 56:51Ryan Sean Adams?

  It's too large.

• 56:52David Hoffman?

  Right.

• 56:52Ryan Sean Adams?

  Like, is it because punks are decently small?

• 56:55David Hoffman?

  24 by 24 pixels? I think that's a very large part of this, yeah. There's not that much data.

• 57:01Ryan Sean Adams?

  That's that's super cool for, I think, CryptoPunks as well. It's kind of a bull case that it's so tiny that it can be fully encapsulated on the Ethereum chain, which is the most secure place to put it. But other NFTs, they can be put in other decentralized file storage locations, IPFS, you know, Filecoin type locations, RWE, that sort of thing. But this is not that. This is fully on-chain.

• 57:24David Hoffman?

  Directly on Ethereum. Yeah, right. So like, you know, bigger images or GIFs even, that you can't fit that inside of a single Ethereum block. So like, you're not putting your GIF on Ethereum. You would have to put it on something like Filecoin, take that hash of the file that's on Filecoin, and append that to the NFT. And that's how you can get some sort of like trustlessness in your NFT's image.

• 57:48Ryan Sean Adams?

  Super cool. All right, let's talk about this. Zapper is allowing wallet avatar customization. So now on Zapper, you can actually display your CryptoPunk, if you own one of those, or your Bored Ape, or your Penguin. What's going on here?

• 58:05David Hoffman?

  People might notice in MetaMask, when you make a new wallet, or make any wallet, you get like this like random generative icon that kind of identifies your wallet. But people are really into NFTs, and NFTs are kind of, some of them are like these, also these generative property icons, like CryptoPunks, like Penguins, like Cool Cats. And so Zapper is just allowing you to associate your wallet with an NFT. And while, wow, this is like a fun, kind of like UI upgrade. It makes Zapper a little bit more fun, a little bit more interactive. I think this really indicates an early tremor of a growing world of some sort of connection between social media and NFTs. I think that is like what we are really seeing here.

• 58:47Ryan Sean Adams?

  I totally agree with that. But you know, it's one take I've heard from people asking me about this recently, is, hey, like, a year and a half ago, two years ago, it was always about, what can I do to like, keep my ETH address private? Like, I don't want anybody to know that I own this thing. And they said, suddenly, the... The advent of NFTs, it's like, no one cares about that anymore. It's always like, you know, your NFT is in your ETH address and so you're fully identifying your ETH address with your NFT. And you're kind of like, you know, flashing that around. Is that a value that we've lost or does it matter? What's your take on that?

• 59:27David Hoffman?

  Stay tuned for the Wednesday issue of the Bankless Newsletter where I talk about the serialization of Anons on Ethereum. Yeah, no, this is an awesome.

• 59:37Ryan Sean Adams?

  By the way, guys, I did not tee David up for that. We haven't talked about the Wednesday article he's writing.

• 59:42David Hoffman?

  No, no, Ryan just teed up for a very, very important topic, right? And so I can, I can take some time and kind of tease it if you want.

• 59:50Ryan Sean Adams?

  Yeah, if you want to, just a quick tease, quick tease.

• 59:53David Hoffman?

  So I read this book called Seeing Like a State and it's a book that kind of illustrates what it's like to have the perspective of a nation state. Nation states like things ordered. They give you a social security number. They give you an address. They, you, your business has a tax ID number, your car has a license plate number and a VIN number. Every, you know, street has a name. States, nation states like things ordered. So they, and so they can know where you are and then they can tax you. And then the, the book all goes all the way into like, you know, like crops. They like crops very monolithic and ordered, like every six inches apart. And then if you really want to take this to the logical conclusion of a totalitarian state, you see something like the Matrix. Where like you have like fields of humans just being like sucked all of their energy dry.

• 1:00:37David Hoffman?

  That you asked for a brief, brief anecdote, so I'll skip that part. But NFTs are a serial number on Ethereum that are unique, that have certain properties, identifiable properties on them. And so while you can choose your own NFT, you are kind of becoming serialized as your identity on Ethereum because NFTs are unique. NFTs are not like ERC 20 tokens and so like you can trace an NFT around the blockchain. In ways that ERC 20 tokens can't be traced. And so we are, while you said, you know, we all want to have our private wallets, our, our private funds and our, you know, all of our private monies. That is still possible, but I think everyone is going to have a public.

• 1:01:19David Hoffman?

  Address where they keep all their NFTs because if you ever want to share your NFT, if I if I share my CryptoPunk, people can find that CryptoPunk token and then associate my wallet with it. And so people are going to have their public persona identities on Ethereum, which are, you know, probably going to be their NFT wallets. And then they're going to have their ERC 20 wallets, which, well, you know, is going to be their private wallets, probably. But the cool thing about Ethereum is you actually get to identify yourself as you see fit, right? Like, do you want to be a CryptoPunk today? Or do you want to be a pudgy penguin today? You get to choose. Unlike the nation state, which is tells you an eight-digit number, you actually get to choose what your Ethereum serisation is.

• 1:01:56Ryan Sean Adams?

  Yeah, that's kind of a cool take. And I guess if you if you want to sort of bifurcate things and have something public and something pseudo anonymous, of course, you can with Ethereum. You just have to be careful, right? You can't intermix things and trade one wallet with the other. You have to be careful about that. That's cool, David. Looking forward to that article, man. Let's talk about this. Pangu Alert. So Penguins are now trading fractional Penguins, at least on Slingshot, that is a decentralized exchange. I think they are on Polygon, if I'm recalling correctly. But now we've got fractional Penguins, fractional NFTs. What's the story here?

• 1:02:30David Hoffman?

  Yeah, so we had Andy8052 on to talk all about fractional on the AMA. And so all fractional is is taking an NFT, an ERC 721 token, putting it into a contract with some spiffy cool logic, and then outputting a bunch of ERC 20 tokens, which makes these things liquid. And now Slingshot is allowing, it has enabled trading on a Penguin, kind of as a proof of concept. But now this one specific Penguin is now liquid, is on, like you said, is on Polygon. And this is kind of the story of the financialization of NFTs. You can put an NFT into a wrapper and then turn it into a more equipped financial asset that gets all the perks that ERC 20 tokens do on Ethereum.

• 1:03:12David Hoffman?

  And so this is the growing story of the financialization of NFTs, starting with Penguins, which are super cute and that I love.

• 1:03:20Ryan Sean Adams?

  Very cool, guys. Stay tuned for that story. Dial into that story of fractionalizing NFTs. I think it's going to be a major theme in the future of the NFT market. Let's talk Bitcoin. David, this is a tweet from Hasu. He said, "Since people have once again been telling me that Bitcoin fees have only ever gone up over time, here's an update on the actual data." This is a statement about the security budget. Remember, security budget equals market cap divided by minor revenue. And these are the charts that he's showing. And this is basically transaction fees in the red line, block subsidy in the blue shaded area. Together, those form the security budget of Bitcoin. This is denominated in Bitcoin, I think, in this first chart.

• 1:04:03Ryan Sean Adams?

  And you could see it's going down over time, denominated in Bitcoin, as you would expect, because, of course, every four years we get a halving. This is that same chart, I believe, in fees only. And you could see it's interesting how it spikes and then goes down. It's unpredictable as far as when the fees are going to come. So 2017, early 2018 spiked all the way up. It's been down recently. David, what do you think Hasu is saying with these two graphs?

• 1:04:38David Hoffman?

  The first thing that he's saying is like, he's saying that a bunch of Bitcoiners are telling him that BTC fees on a US dollar basis has only gone up, which is a little bit true, but it's also very much not really true. And Bitcoiners tried to pull this same BS about how Ether has only ever gone down in BTC terms. But they're using a frame of reference of that 2017, 2018 spike, where the Bitcoin blockchain actually got super congested. And they're doing the same things when they compare how Ether has never gone up versus Bitcoin, because they use a frame of reference from 2016 to 2017, but not going all the way back to the very beginning. Over the long term, Bitcoin dollar fees have kind of stayed flat,

• 1:05:22David Hoffman?

  which is a not very high level, except for the anomaly in 2017 and 2018 during the mania,

• 1:05:30David Hoffman?

  DeFi on Ethereum and there wasn't scaling solutions. BTC blockchain was actually one of the ways that exchanges transacted value between each other. And so it actually got congested and fees got really high for that one brief moment. Ever since then, Bitcoin security has entirely been dependent on issuance, on BTC issuance. And so while we, while we talk about how Bitcoin has a hard cap, we still, it's still under a paradigm where issuance is securing it. And it is yet to break free from issuance based security. It had one moment in time where fees on Bitcoin actually represented a meaningful amount of security. And even then, it was only one quarter of the total amount of issuance.

• 1:06:12David Hoffman?

  And so Hozu is really just illustrating how non-mature Bitcoin is as a secure blockchain, because it's, it's still dependent on its like, on its like premature, pre like prepubescent phase of like being dependent on like its parents to take care of it. The metaphor being like block rewards and block subsidies and BTC issuance is what's securing Bitcoin.

• 1:06:37Ryan Sean Adams?

  Yeah, you know, my, my takeaway here is like the whole, it's unsustainable, right? It's like, and it's, it's also unnecessary, right? It's like, I, I very much feel like Bitcoiners, Bitcoin maximus refused to see this. So Hozu would consider himself a Bitcoiner and he's pointing this out. So like, well done, Hozu, but they refuse to see that the security budget of Bitcoin is not sustainable. At least it's not enough to be the world's most valuable blockchain by market cap. They're going to have to adjust the protocol in some way. We've been saying this for a while. And now I feel like David, on the back of like ultrasound money, we've talked to Justin Drake about this.

• 1:07:17Ryan Sean Adams?

  In the back of EIP 1559, the crypto industry is really inventing better ways to secure its network, more efficient ways to secure its network. So I don't know, man, I just, this makes me very bearish actually about Bitcoin. I'm generally bullish on Bitcoin as an asset. I think it's, it's, it's got some properties that. Other chains don't. I think it has an incredible meme following. But if the Bitcoin community doesn't wake up and realize that security budget is actually shrinking and that there are better economic policies that are coming to market that are going to outcompete them, they're just not going to make it, David. Like, they're not going to make it. So I hope they do. I hope they do figure this out.

• 1:08:01Ryan Sean Adams?

  And but but transaction fees, in my mind, it's like everything we talked about with Justin Drake. I mean, they're too unpredictable, unvolatile. It's a great B fuel, not a good fuel, to power the economic security of your blockchain. And block subsidies are running out. It's not going to be a problem overnight. Not going to be a problem next year or the year after. But like, we're playing for the long term, five years, 10 years, 20 years. I don't think you can make a sound money on just transaction fees if that's your economic security model.

• 1:08:32David Hoffman?

  Plus, there's there's an even greater conversation to be had about like the nature of what Bitcoin is trying to optimize for and how it gets security, right? And so Hazu follows up that tweet by saying like, why look at the security budget and not other metrics? As a result, the budget allocated to mining should probably scale with Bitcoin's size to create the same attack disincentive. 50 million in miner revenue may be enough for Bitcoin when Bitcoin is $1 billion, but maybe not when it's $100 billion or $10 billion. What he's saying is that, like, say Bitcoin 10x's to, what would that be? Like, $450,000, half a million dollars per coin. This is what Bitcoiners all think are happening.

• 1:09:15David Hoffman?

  Just because Bitcoin 10x's doesn't mean fees 10x. Because Bitcoin can go up in price, but that doesn't mean any more transactional capacity is going to happen on-chain. And so this is kind of why I think a DeFi smart contract layer on your blockchain, which puts block space demand at first and foremost a priority for the blockchain, is how you achieve sustainability. And that's what Ethereum does. You need to prioritize fees because the more fees you get means the less you have to issue.

• 1:09:44Ryan Sean Adams?

  Ultimately, the purpose of a blockchain is to sell blocks.

• 1:09:47David Hoffman?

  Yeah.

• 1:09:47Ryan Sean Adams?

  It's kind of what you're doing. And then you could feed that back into your economic policy. It's the one thing you have. It's the one thing you have. That is the Ethereum way of thinking. But anyway, we'll see how it goes. Hsu ends it with this, "Don't want to overdramatize anything. The problem is a decade-plus away, but the facts are the facts." I would echo that. The facts are the facts. Not going to be a problem tomorrow, but face up to it someday. They'll have to. Okay, Immutable. Last, let's talk regulatory. I think this is a conversation about regulatory. And Immutable had talked about airdropping some IMX rewards to its supporters. But now they've had to sort of rescind and change that due to regulatory uncertainty.

• 1:10:28Ryan Sean Adams?

  They can no longer drop their IMX tokens to those of you who are American citizens, sadly. Now, good of them. I think they're going to replace that with ETH, I believe, rather than IMX. So, thank you, Immutable. Really cool. But what's happening, man? Like, I thought the SEC was here to protect us. Are they, are they just protecting us from gains? Are they protecting us from airdrops? They protecting us from buying low and like selling high? Because I don't understand what they're protecting us from when they're coming down on crypto and Americans can't get these airdrops, liquidity mining, all of these things that we are precluded from. It's like, it's like America, North Korea, and Iran. These are the countries that don't get the airdrops. What?

• 1:11:14David Hoffman?

  Like, the crypto industry has a fantastic power of just like stripping away like obfuscation and BS from a topic. And so if we are asking, we have to ask ourselves, like, why are we not getting these airdrops? Because the ethos of airdrops, and started off by the Uniswap airdrop and, and, you know, other things as well, is that we need to put capital, the things that govern over these systems, into the hands of the people, which is the most like populist, bottom-up, pro-consumer thing that I can think of. Like, let's put power into the hands of the people. And remember, capital is power. Governance equals capital equals, equals power.

• 1:11:57David Hoffman?

  And as a result of the United States regulations... Immutable is not giving its users power over the system, right? And so by stripping away-

• 1:12:10Ryan Sean Adams?

  What's really important here, David, is like you said the word giving. This is a free gift.

• 1:12:14David Hoffman?

  Right.

• 1:12:15Ryan Sean Adams?

  We're not talking about selling to anybody.

• 1:12:16David Hoffman?

  There's no commitments.

• 1:12:17Ryan Sean Adams?

  They can't even give the free gift to you. Continue, sorry.

• 1:12:21David Hoffman?

  And why this is happening is because of regulations which are largely imposed upon the world because incumbents lobby for those regulations in government to protect incumbents. If we just set up rules about how like individuals can't receive like capital or equity in stuff, then like whoever already has all the capital and equity in stuff gets to keep more of it. And so to me, this is just illustrating how incumbents are like not even allowing an entirely new financial world, which is a separate from the nation state. We have to actually still follow these like incumbent protecting rules.

• 1:13:00Ryan Sean Adams?

  It wouldn't leave a bad taste in my mouth if honestly they just said, hey, we're just trying to protect the system we have and that like the incumbents that we have. But they do it under the guise of investor protection, David. That's what pisses me off. Let's talk about Gary Gensler's comments on DeFi. I'll read this quote. He's the SEC chair right now. "Projects that reward participants with valuable digital tokens or similar incentives could cross a line into activity that should be regulated no matter how quote unquote decentralized they say they are." I don't want to take this one quote in, like, I think we have to take this quote in context, which is like Gary Gensler seems to be hinting about DeFi an awful lot.

• 1:13:43Ryan Sean Adams?

  Seems to be concerned about DeFi in his statements, in his recent speeches. And he actually talked about trying to enforce this, maybe going after devs and founders. He said, "There's still a core group of folks that are not only writing the software like the open source software, but they often have governance and fees." Mr. Gensler said, "There's some incentive structure for these promoters and sponsors in the middle of this." This again is regulators trying to find out who the centralized actors are and put the existing apparatus, securities exchange apparatus for them too. It's like, here's the thing, David, it's like-

• 1:14:25Ryan Sean Adams?

  There is going to be such a thing as constructive regulation for this industry and for DeFi. Like, we want the SEC to go after the scams. Like, please do. There are some obvious scams in crypto. Like, you know what they are? Please go after them. Please protect investors that way. Do not try to protect investors by hampering this industry. The developers are just going to move outside of the US. You're just going to hurt Americans and American consumers and American investors. So, again, we're not seeing action yet, but like, this kind of tone coming from the SEC chair? I don't know. I'm not, I'm not a fan. I don't like it.

• 1:15:05David Hoffman?

  The, the SEC and regulators at large need to have a moment of reflection as to what their original purpose is and why the rules that they are enforcing became rules in the first place. And if, if the, the thing that concerns me the most is that they are not in touch with their own roots. They are saying like, okay, we have these rules from like 30 years ago. Let's enforce them all the time, not realizing that the reason why the rules came in the first place were to protect investors from bad things, not to just enforce the rules. As soon as, as soon as the reality of the world changes and the rules are enforcing the rules, actually hurts investors and you are not drawing the connection between those two things about how you will, your, the rules, by enforcing the rules, you're actually harming people?

• 1:15:50David Hoffman?

  Like, you need to have a moment of reflection as to what you're actually doing on the face of this earth.

• 1:15:55Ryan Sean Adams?

  I do think Gary Ensler maybe thinks that additional legislation is required. So, I'm not convinced that he thinks he has the power to do much in this space and I'm hopeful that's going to be his take because the people should have a voice in, in, in some sort of legislation. This again is, I feel like it's a theme for the week, past two weeks, David, is crypto flexing its political muscle because at some point in time, new regulation is going to be created, new legislation is going to be created. We want our voice on this so America doesn't fall behind. By the way, David, like coming off of what we just said, I find this kind of funny. The former SEC chair, remember Jay Clayton? He just joined Fireblocks, their advisory board. So Fireblocks is the company we interviewed Michael, their CEO, earlier this week.

• 1:16:40Ryan Sean Adams?

  Their entire mission is to bring institutions to DeFi. Now Jay Clayton, well Gary Gensler is talking about DeFi and possibly ways to crack down. Jay Clayton is joining the advisory board of a DeFi company. Makes me laugh. I don't know. I don't know what's going on.

• 1:16:58David Hoffman?

  I mean, like to some degree, I'm kind of down for their revolving door to work in our favor. If that's what's going on, like sure.

• 1:17:05Ryan Sean Adams?

  Have to.

• 1:17:05David Hoffman?

  Do it. Let's do it.

• 1:17:06Ryan Sean Adams?

  Yep, let's do it. All right. Well, maybe Jerry and Jay will meet and talk about these things. Okay, David, we should get to the takes, but before we do, we need to thank the sponsors that made this episode possible.

• 1:17:20David Hoffman?

  When you shop for plane tickets, you probably use Kayak, Expedia, or Google to compare ticket prices. So why would you limit yourself to just one exchange when you trade crypto? When you make your trades, you want to make sure that you're getting the best possible price on your trade and that you aren't paying high gas costs that you could have otherwise avoided. That's why you should be using Matcha. Matcha routes your orders across all the various DeFi exchanges on Ethereum, Polygon, Binance Smart Chain, and gives you the best possible prices without taking any commission. Matcha has smart order routing that splits your order across multiple liquidity sources if Matcha sees that it gets you better pricing. Trading on Matcha is super easy because it pulls the liquidity for me into a single, easy to use platform and that has even saved me multiple times from accidentally picking the wrong DEX to trade on

• 1:18:04David Hoffman?

  and accidentally getting a bad price. Matcha also allows for you to make limit orders on-chain so you can set and forget your DeFi trades and they will go through automatically while you're away. New to Matcha is an integrated fiat on-ramp. You can purchase crypto directly with your credit or debit card and have that fiat be instantly traded for any token that has liquidity. When you're making a trade, head over to matcha.xyz/banklist and connect your wallet to start getting the best prices and most liquidity when you trade your crypto assets. Arbitrum is an Ethereum scaling solution that is going to completely change how we use DeFi. If you've been using Ethereum for the past 12 months, you've probably noticed the high gas fees and the slow confirmation times that have been plaguing DeFi. Too many

• 1:18:45David Hoffman?

  people want to use Ethereum and it doesn't have enough capacity for all of us. That's where Arbitrum comes in. Arbitrum is a layer two to Ethereum, which means Arbitrum can increase Ethereum's throughput by orders of magnitude at a fraction of the cost of what we are used to paying. When interacting with Arbitrum, you can get the performance of a centralized exchange while tapping into Ethereum's level of security and decentralization. This is why people are calling this Ethereum's broadband moment, where we get to add performance onto decentralization and security. If you're a developer and you want to save on gas costs and make an overall better experience for your users, go to developer off chain labs dot com to get started building on Arbitrum. If you're a user, keep an eye out for your

• 1:19:27David Hoffman?

  favorite DeFi apps building on Arbitrum. Arbitrum has been working with over 300 teams, including Ethereum's top infrastructure projects, and will be opening up to all users shortly. There are so many apps coming online to Arbitrum, so you may want to pack your bags in preparation for the great migration to the Arbitrum layer two. To keep up to speed with Arbitrum, follow them on Twitter at Arbitrum and join their Discord.

• 1:19:50Ryan Sean Adams?

  All right, guys, it's time for Takes From The Week. David, let's start with this from Anthony Sisano. "The irony of paradigm-saving Sushi Swap is why I love this industry." What's he talking about?

• 1:20:01David Hoffman?

  Yeah, like we talked about earlier, the paradigm team, which in theory is a little bit antagonistic, at the very least, to Sushi Swap, also saved Sushi Swap. So when the time comes down to it, we always protect the individuals in this industry as well as we can, and we put differences aside. And overall, the collaborative nature and the like quickness of the teams putting their heads together and coming up with a plan, regardless of like the different teams that they're on, saved $350, $350 million of people's funds. So, pretty cool story. And also just great entertainment, too.

• 1:20:35Ryan Sean Adams?

  Yeah, it's super fascinating, like, but we're all in this together is the bottom line. I think that's what Anthony's saying. Okay, Stani said this, "Well-designed..." A Web 3 protocol does not solve every single thing. Instead, it leaves room for the community to invent and build the rest of the features. So Stani advocating for an open landscape rather than constraints? What do you think this means?

• 1:20:57David Hoffman?

  The nature of this industry is bottom up, right? So what Stani is saying is that Web 3 protocols, whether we build like decentralized social medias or whatever we do in Web 3, which is very nebulously defined, it needs to be built in a minimally viable way that the rest of the features just gets built out by the community in a bottom up fashion because the community knows what it wants rather than any top-down Web 2 company knows what thinks its community wants. And this goes back to what we were talking about with like regulation and user power. Stani is saying is do the minimum viable infrastructure to give the community on top of your infrastructure as much power as possible so they can build the things that they want.

• 1:21:39David Hoffman?

  That's why we give out capital and governance and power to the users of these protocols so that they are maximally aligned with the people that actually use these things. And so when Stani says, who's an engineer, that we should engineer these things in ways that leaves room for the community to invent and build the rest of the features, he's really talking about user empowerment, individual empowerment. I can't wait for the SEC to come and regulate this.

• 1:22:01Ryan Sean Adams?

  You know, this is the insight of Ethereum, though. It's basically that the entire insight was basically, let's take the idea of digital scarcity that Bitcoin provided and let's make a general purpose so anyone can build on top of it. Censorship resistant, general purpose, and let's see what we get. And I think that's a notion that is deeply embedded inside of Ethereum itself. Let's talk about this. Naval said, "In the physical world, every object is scarce. In the digital world, every object is abundant. In a digital world made of NFTs, every object is scarce again." Full circle. Go back to scarcity. Why? What's he talking about?

• 1:22:41David Hoffman?

  If we want to all live in the metaverse, again, whatever the metaverse means, we need digital objects with digital object permanence. We need things in the metaverse to replicate how we expect. These things to also exist in the real life in the real life like I have a MacBook. It's the same as all other MacBooks, but it's my specific MacBook, right? Like it's it's looks it feels like mine. Same with all the other objects that I own. There's only one of them. And so we if we want the metaverse to behave like the real world, which we do. We need NFTs to make every object scarce again.

• 1:23:16Ryan Sean Adams?

  We do, and also it has to. You've seen Ready Player One, right? Watch it maybe? I remember thinking when I was watching it. Okay, none of this would be possible, not without VR tech. But without cryptocurrency, none of this would be possible without digital scarcity. Because you can't have an economy unless you have some idea, some notion of digital scarcity that is outside of the centralized game maker's control, the metaverse control. Well, I guess if you do, you have somewhat of a dystopia metaverse.

• 1:23:44David Hoffman?

  Facebook metaverse.

• 1:23:45Ryan Sean Adams?

  None of us want. Yeah, and it's not real, not real. Okay, let's talk about this. Single issue voters. David, are you a single issue voter?

• 1:23:53David Hoffman?

  I am now.

• 1:23:54Ryan Sean Adams?

  I'm seeing this in Ryan Selkis's profile, right? I'm seeing this in another crypto folks profile. But what does it mean? Is that does that mean like you will not support any politician with your votes with with your money unless they are pro crypto? Five out of five on the crypto scale?

• 1:24:12David Hoffman?

  Yeah, I mean, I can't really think of anything I care more about in life other than the industry that I work in. Like, not only is it all of my savings, but it's where I work and it's where all my friends work. And so if I want to do what is in my own best interest, I'm basically a single issue voter for crypto. And I think this is a new page for the crypto industry. As we all kind of ask ourselves, like, what are we really willing to give up? Like, and how much do we really want to like center around crypto? And I think there's a very large cohort of people who kind of only give a fuck about crypto. Sorry about my language. And and that that cohort of people really cares about crypto and is also really, really well capitalized.

• 1:24:55David Hoffman?

  And so we have the means to get what we want out of nation state regulation. We have the money to put behind it. And we can actually finally fund the values that we want to see in nation states.

• 1:25:07Ryan Sean Adams?

  Yeah, I agree. And values is the key there. So it's not just like you got bags in crypto, and you've got friends in crypto, and you're in the industry. But it's also like crypto values are my values, like inherently. And I think that I feel very strongly, I'll talk about this a little bit later, but our need for a digital bill of rights, digital freedoms in the 21st century, right? And I think crypto is fundamental to that. If we don't have it, we'll end up in a dystopia that none of us want to live in. It's kind of like, think about your kids, think about your grandkids. What kind of life do you want them to grow up in? What kind of society do you want them to grow up in? Do you want to live in a totalitarian digital nation state? Or do we want crypto? We have to

• 1:25:51Ryan Sean Adams?

  fight for it. We have to fight for it in these early stages. I agree with that. It's a good take. David, tell me what you're excited about, man.

• 1:25:58David Hoffman?

  I am excited about a new podcast coming out on Tuesday. So it's going to fit into the regular Bankless programming. We have the Monday podcast, as we all know. And then we have the Tuesday State of the Nation, but that's only on the YouTube. That audio for that doesn't go out onto the podcast until Wednesday, which means on the podcast, we have an open Tuesday, and we're finally-

• 1:26:18Ryan Sean Adams?

  You can't have an open Tuesday?

• 1:26:19David Hoffman?

  Yeah, you can't have that. We have to put another show out.

• 1:26:22Ryan Sean Adams?

  What are you doing on Tuesday?

• 1:26:23David Hoffman?

  Yeah, Tuesday is Layer Zero Day, which is a brand new podcast out of the Bankless ecosystem. Here is the graphic that I have for it. We actually are not doing Vitalik on Tuesday. This is just the mock graphic. We are yet to finalize that. But shout out to the two members of the Design Guild at Bankless DAO for designing this, who actually, the first episode coming out on Tuesday is with Dmitry Buderin, which technically is actually, if we're all Layer Zero, Dmitry Buderin is Layer Negative One, because he's the actual father of Vitalik.

• 1:26:54Ryan Sean Adams?

  He's also Layer Zero, too. He's really in the ecosystem. But yes, I love it.

• 1:26:58David Hoffman?

  So Layer Zero is a podcast focusing on all of the people that make up this ecosystem, not about the projects, not about their funds, not about what they're working on, but what they care about when they log off their computer. Like, what do they think about? Where do their values come from? What's their story? And so the lines I've been using- To kind of explain, uh, layer zero is like, I want to ask, uh, Justin Drake about like his trip to math camp. Or I want to ask Hayden Adams about like his first heartbreak. And then maybe even how did that come to impact what he built with ultrasound money or with Uniswap? Maybe we do connect those things. I'm always fascinated about the ways that the human DNA connects to the code that they write.

• 1:27:42David Hoffman?

  And therefore how it impacts the people that use that code. There's a very awesome connection between those two things. And we are going to unpack those things on the Layer Zero Podcast. First episode coming to a bankless podcast near you on Tuesday.

• 1:27:56Ryan Sean Adams?

  I'm super excited about this and guys, I'll just say to the listeners, I have no idea where David finds the time to do all this and the energy. Like we already produced so many podcasts when he told me about this, I was like, so are you doing this or do you need my help? David's like, no, I got this. So I'm really excited to listen to this man and David Hoffman, once again proving he is the Joe Rogan of crypto. With these in-depth interviews and conversations, um, thanks for adding to the ecosystem.

• 1:28:24David Hoffman?

  I'm interviewing Eric tomorrow, so he will be episode number two, Eric Connor, Eric Connor.

• 1:28:29Ryan Sean Adams?

  Ah, there you go.

• 1:28:30David Hoffman?

  And then, uh, Justin Drake comes in on episode number, uh, number three. So I will be asking him, what did Justin Drake do at math camp?

• 1:28:39Ryan Sean Adams?

  Are you gonna ask, uh, one, one day, I hope you interview me on it. Would you do that?

• 1:28:43David Hoffman?

  I'm not sure. I'm not sure you're ready for that.

• 1:28:45Ryan Sean Adams?

  It'd be weird. That'd be too weird. One day, I'll, I'll hope, I'll put, I'll put my name in that someday.

• 1:28:51David Hoffman?

  I'll add you to the list.

• 1:28:53Ryan Sean Adams?

  Do you want my take for the week?

• 1:28:54David Hoffman?

  I do want your take for the week.

• 1:28:55Ryan Sean Adams?

  It's real quick.

• 1:28:55David Hoffman?

  Yeah. What are you excited about?

• 1:28:56Ryan Sean Adams?

  You know, I've been, what I'm excited about, sorry, yes. Um, I feel like there has been lately, I've been reading this news about, you know, Apple, uh, basically releasing software updates. They could scan all of your photos and they're doing it for the kids too, right? It's, um, obviously a child pornography thing, um, that is very terrible, uh, sounds very terrible. But they are sacrificing our freedom and our digital liberties and our privacy in order to do that. Apple having the ability to scan any photo. It starts in one small area. Where does it end? We don't know. Once we give them this access, once we remove the barriers of encryption. It's gotten me kind of down, David. Like, I feel like this is an all-out assault on our digital freedom and privacy,

• 1:29:40Ryan Sean Adams?

  and it's not going to end. Now the big companies, remember Apple billboards? "We protect your privacy. We care about privacy." "Google doesn't, but Apple does." Yeah, right. They're all selling us out. So what do we do about this? It's depressing. Well, I think the wealth created by crypto, per earlier conversation, is our greatest hope to fight this and combat this. And so as we think about crypto, first it's a social movement, now it's getting a little bit more political. First, we can fight for crypto, cryptocurrency, our industry. Then we can broaden that fight to fight for digital rights more generally. I think it's time for crypto to get more politically active. That's what the last two weeks have taught me, that we can do this.

• 1:30:23Ryan Sean Adams?

  We have a coordination point. We have a shared set of values. We can be single-issue voters. We have the capital. Like, let's take the fight to DC. Let's play their game. Because if we don't, who's going to? No one else cares about digital rights the way the crypto industry does and has the resources to do it. So that's actually what I'm excited about, is our ability to make a broader impact. Like, I care a lot about long-term things, David. Like, I care a lot about the protocols we set up now and the future generations that, you know, are going to live with the decisions we make, with the protocols we put in place. The whole world, their world's going to be digital. Like, our kids, our grandkids, they're going to live in a completely digital world. Are we going to give them a digital constitution for that world? Are we going to give them a Bill of Rights?

• 1:31:08Ryan Sean Adams?

  We're going to let them be screwed over by big governments and corporations? Nah, I don't think so, right? Like, that's why, that's why we're doing crypto. That's why I, you know, I'm not really a political person, actually, if you can believe that. Or no.

• 1:31:23Ryan Sean Adams?

  Yeah, you kind of have to be. If we're standing still, if we're not vigilant, it's just going to continue to erode until we have nothing left for future generations. Anyway, I'm excited about that. Crypto can have a big impact here.

• 1:31:35David Hoffman?

  I think that's exactly right, and that's something I think everyone should should reflect on. This movement got started in the 70s and the 80s with the cypherpunks, and everything that we've done in crypto has been downstream of the cypherpunks. And the cypherpunks had very explicit values. Cypherpunks write code, cypherpunks value privacy, cypherpunks understand that cryptography makes social systems. And I think the power of crypto economics, which is cryptography plus money, right? Now we finally have the economic resources to actually put behind the cypherpunk values. So like you said earlier, this is not just us protecting our bags, or not just us protecting our investments, it is a little bit of that. But it's also about us fighting for the things that this industry stands for.

• 1:32:18David Hoffman?

  And this industry stands for a lot of things, and they're generally all surrounding individual freedoms, individual autonomy, and individual rights. And I think that we can finally have a lot of these, a lot of the struggles that the cypherpunks have was, A, there was too few of them, and they had no money. In the crypto community, there's a lot of us, and we all have a lot of money. So I want to see what the crypto community can do when it focuses its money into cypherpunk values. Because now, because of the power of Ethereum, because of the power of crypto, we can all be cypherpunks, and we all have the means to fight for ourselves.

• 1:32:54Ryan Sean Adams?

  Well said. Plus one on that. David, meme of the week?

• 1:32:57David Hoffman?

  Give me the week.

• 1:32:58Ryan Sean Adams?

  Subjects?

• 1:32:58David Hoffman?

  Let's do it.

• 1:32:59Ryan Sean Adams?

  All right. The meme of the week, this has got to be from Wolf of Wall Street, is it?

• 1:33:03David Hoffman?

  Uh, gotta be. Maybe, maybe.

• 1:33:06Ryan Sean Adams?

  Okay, it's Leo, right?

• 1:33:07David Hoffman?

  It's Leo, right, yeah.

• 1:33:08Ryan Sean Adams?

  Okay, so describe it for our listeners.

• 1:33:11David Hoffman?

  Two panels, Leo very intently leaning into somebody who's sitting in a chair, holding up a pen and says, "Sell me this pen." And the person grabs the pen, turns back to Leo and says, "It's an NFT."

• 1:33:24Ryan Sean Adams?

  I'm buying it. I don't care.

• 1:33:26David Hoffman?

  As somebody who blindly bought some cheap NFTs last night for no reason and no due diligence, I can completely align with it.

• 1:33:33Ryan Sean Adams?

  You are the guy.

• 1:33:34David Hoffman?

  I'm the guy. It's like, it's an NFT.

• 1:33:38Ryan Sean Adams?

  Love it. All right, guys. That has been the weekly rollup. Hope you enjoyed it. As always, none of this was financial advice. DeFi is risky. So is ETH. So is all of crypto. You could lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the Bankless journey. Thanks a lot.

• 1:33:56David Hoffman?

  Hey, we hope you enjoyed the video. If you did, head over to Bankless HQ right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence. We recommend joining our daily newsletter, podcast, and community as a Bankless premium subscriber to get the most out of your Bankless experience. You'll get access to our market analysis, our alpha leaks, and exclusive content, and even the Bankless token for airdrops, raffles, and unlocks. If you're interested in crypto, the Bankless community is where you want to be. Click the link in the description to become a Bankless premium subscriber today. Also, don't forget to subscribe to the channel for in-depth interviews with industry leaders, Ask Me Anythings, and weekly rollups, where

• 1:34:40David Hoffman?

  we summarize the week in crypto and other fantastic content. Thanks, everyone, for watching and being on the journey as we build out the Bankless nation.