ROLLUP: 1st Week of March (3LAU & Grimes NFTs, PayPal Crypto, Citigroup Report)

Download the crypto meta to your brain in this weekly show. ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ GO BANKLESS WITH THESE SPONSOR TOOLS: ⭐️ AAVE - BORROW OR LEND YOUR ASSETS https://bankless.cc/aave 🚀 GEMINI - MOST TRUSTED EXCHANGE AND ONRAMP https://bankless.cc/go-gemini 💳 MONOLITH - GET THE HOLY GRAIL OF BANKLESS VISA CARDS https://bankless.cc/monolith 📱 DHARMA | MOBILE ONRAMP DIRECTLY INTO DEFI https://bankless.cc/dharma ------ MARKETS BTC Price $50-$52k ETH Price $1500-$1600 TVL in DeFi $40B DPI $420 NUPL https://studio.glassnode.com/metrics?a=ETH&category=&m=indicators. NetUnrealizedProfitLoss&mAvg=7&mMedian=0&zoom=all https://studio.glassnode.com/metrics?a=ETH&category=&m=indicators. NetUnrealizedProfitLoss&mAvg=7&mMedian=0&zoom=all Bitwise DeFi Index Fund - $32.5m https://www.coindesk.com/bitwise-defi-index-fund-sec-filing-growth DeFi Revenue Chart https://www.theblockcrypto.com/data/decentralized-finance/protocol-revenue Grayscale Premiums https://twitter.com/rleshner/status/1365679532808806401?s=20 ------ RELEASES Google Finance 'Crypto' tab https://www.google.com/finance zkSync Investing Round https://twitter.com/zksync/status/1366387870735495169?s=20 Sushi going Multichain https://twitter.com/josephdelong/status/1367226781393166336?s=21 Alpha On BinanceChain https://blog.alphafinance.io/alpha-homora-embraces-multi-chain-future-starting-with-binance-smart-chain-bsc/ MetaMask & Layer 2 https://twitter.com/MetaMask/status/1367229353046790146?s=20 Zerion integrating Polychain https://twitter.com/zerion_io/status/1367528734148886528?s=20 Alchemix Platform - 100M DAI https://twitter.com/scupytrooples/status/1366029422839570432?s=20 B. Protocol-Compound Integration https://medium.com/b-protocol/b-protocol-compound-integration-is-live-fe026ba7b301 Kings Of Leon Album NFT https://www.rollingstone.com/pro/news/kings-of-leon-when-you-see-yourself-album-nft-crypto-1135192/ Introducing ‘Gateway’ https://medium.com/compound-finance/gateway-623f6f48d2b6 ------ NEWS Citigroup Report on Crypto https://www.cnbc.com/2021/03/01/bitcoin-btc-is-at-a-tipping-point-citi-says.html Paypal To Buy Curv https://www.coindesk.com/paypal-to-buy-crypto-custody-firm-curv-sources Paypal & Smart-Contracts? https://twitter.com/mdudas/status/1367525905761984517?s=20 MicroStrategy Buys BTC - $15m https://decrypt.co/59789/microstrategy-invests-15-million-in-bitcoin-adding-to-4-3-billion-stash Furucombo Exploit - $14m https://www.theblockcrypto.com/linked/96572/defi-building-block-service-furucombo-exploited-for-14m Fed Looking At Digital Dollar https://markets.businessinsider.com/currencies/news/fed-digital-dollar-jerome-powell-congress-issue-crypto-bitcoin-2021-2-1030114663 Grimes $5.8 Million NFT Auction https://cointelegraph.com/news/musician-grimes-debut-nft-auction-generates-5-8m-in-20-minutes 3LAU $11.6M NFT Sale https://thissongissick.com/post/3lau-11-million-nft-auction/ Ubisoft Bring NFTs into Games https://twitter.com/bruhagan/status/1366711237632004098?s=20 NFT Bull Market https://twitter.com/spencernoon/status/1367495101681983490?s=20 Canada Filing For ETH ETF https://www.theblockcrypto.com/linked/96813/evolve-funds-eth-etf-filing-canada BitMEX’s Arthur Hayes Expected To Surrender https://twitter.com/ppogodin/status/1367189056212398081?s=21 ------ TAKES Burniske Advice to entrepreneurs https://twitter.com/cburniske/status/1367231116529180672?s=20 BSC Speedrunning DeFi summer https://twitter.com/sassal0x/status/1367437987185709062?s=20 ETH's Moat is EVM https://thedailygwei.substack.com/p/the-evm-is-the-moat-the-daily-gwei Full Blocks Maximalist https://twitter.com/TrustlessState/status/1367364003521986561?s=20 ETH Maxis: Bitcoin is a Worthless Meme Coin https://twitter.com/ashleighschap/status/1366903062091210754?s=20 ------ MEME https://www.instagram.com/p/CLzwCdIgiXH/?igshid=1rmy63avudo2t ----- Not financial or tax advice. This channel is strictly educational. This channel is NOT: investment advice, a solicitation to buy/sell any asset, 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. See Bankless 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?

  All right, Bankless Nation, it is the first week of March. This is Friday morning. I hope you're enjoying this special edition of The Roll Ups, first edition of March, with your Friday morning copy. David, what are we doing today?

• 0:21David Hoffman?

  We're rolling it up. We're rolling up the first week of March. As we all know, the cryptocurrency industry moves so incredibly fast. And so we try and distill a full week of crypto news into one single episode. It's an ambitious endeavor. We try and condense as much information and as short a time as possible. Sometimes we go a little bit long, but we're going to try and condense things a little bit better this week. So Ryan, shall we get into it?

• 0:44Ryan Sean Adams?

  We should, David, but first, before we get into it, we should mention that Consensus tickets are on sale. So this is a virtual conference you can attend. I'll be there. David is speaking there. Ray Dalio is speaking there, so he's in good company. The thing I wanted to mention is that you can get $20 off when you use the Bankless code. They've got an early bird special. So if you're planning to attend a crypto conference this year, this should be the one you attend. Everyone goes, fantastic event, and get $20 off with the code Bankless. We'll include a note in the show notes. David, you ready? Let's start with markets, my friend. You ready to start with markets?

• 1:21David Hoffman?

  Let's do it. What are the markets saying?

• 1:24Ryan Sean Adams?

  Well, tell us. Bitcoin, what is the price of Bitcoin right now? Where have we been and where are we going?

• 1:30David Hoffman?

  Yeah, at the time of recording, Bitcoin is at $47,500. Ryan's got Missouri on up. It's got $48,000, you know, different depending on where you look. But we touched over, got back over $50,000 this week. But maintaining strength, I think, has been a little bit of a struggle for the main monies, the Bitcoin and Ether. We are falling down a little bit today, but you know, on the Ether price action, we both touched $1,600 and the $1,400 in the same day. So things are volatile. We're definitely planting a floor, I would say, but we are struggling to get much higher than that.

• 2:09Ryan Sean Adams?

  Still feels like we're in a bit of a dip, but maybe as some have said, a dip for ants. This is not a substantial dip. Not sure when it will end, but it definitely still feels very much like we are in a secular bull run. Let's talk about the price of Ether. What's going on here?

• 2:24David Hoffman?

  Yeah, from the low, low price that Ether hit of $1,400 earlier this week, uh, earlier this week and last week. It got all the way back up to $1,650. Now Ether is back down to the price of $1,537, kind of all over the place. Again, having that strength off the floor, off the bottom of the dip that we saw, but also not really able to continue its strength, really. So it's still kind of stuck in this range. We will see what happens.

• 2:53Ryan Sean Adams?

  And it has dipped harder than Bitcoin, but you've officially called the bottom floor of Ether for now at 1,300. And that's holding up fairly well so far. So cross your fingers for David, guys. He's, he's making calls here. We'll see if he's right or not.

• 3:06David Hoffman?

  I do believe that you cannot go below $1,300.

• 3:09Ryan Sean Adams?

  See about that. That's a dangerous call. Okay. DeFi leaderboard, let's talk about total value locked in DeFi. That has dipped a little bit. It's kind of plateaued at this 40 billion mark, which, oh my God, 40 billion. Still incredibly high versus a year ago. But you know, the parabola has, has flattened a little bit lately. What's going on here?

• 3:31David Hoffman?

  Yeah. So again, both, uh, there's, there's three things going on here. There are continuing deposits of assets into DeFi protocols. Those assets are increasingly, increasing in price, except for the last week. And also DeFi Pulse is adding new applications into their metrics, right? So I think today they just added tornado cash. So tornado cash is the new metric. I think there's $300 million that tornado cash has, yeah, 304. Congratulations tornado cash for getting on the board. Well deserved. I expect a number to only go up with tornado cash and so, um, and that's

• 4:08Ryan Sean Adams?

  There's 300 million locked in tornado cash?

• 4:11David Hoffman?

  Right. And so the, what's going on is there's a liquidity mining mechanism where if you put your Ether into tornado cash and leave it in there, which is good for privacy, because there's a bigger crowd that people can hide amongst in the, in, with tornado cash's mixing services. So they reward you with the torn token for how long you leave your Ether in there, which is pretty cool.

• 4:32Ryan Sean Adams?

  Super cool. All right. What's going on with DeFi Pulse Index, the DPI, which is the top 10 DeFi token projects? Price of that is 413 at the time I'm looking at it. What has, it's a little bit up on the week, it looks like, unlike, unlike Ether price. What's going on?

• 4:50David Hoffman?

  Yeah, and I'm gonna start saying some trader words, but don't ascribe me to being any sort of trader professional, but it looks like DPI has done a triple bottom. It's touched the 400 range, the low 400 range, three times in March already, and you know, March is only like five days long now. And so again, planting a floor at $400, not really able to extend above that floor, but definitely not going below it either. So there's both like the mixed signals in the markets right now, signs of strength, but not able to continue that strength and DPI is showing that as well.

• 5:23Ryan Sean Adams?

  Now, we started looking at this metric into the, the new year, the DPI to ETH ratio, and this basically tracks DPI's strength relative to ETH. So it tells us whether we're in DeFi season or not, as we've called it from a cyclical perspective. So David, are we in DeFi season? What's happening here?

• 5:41David Hoffman?

  Yeah, Ryan, if you zoom out for that three month or six month timeframe, the DPI versus ETH trend is extremely strong. Wow. Yeah. Look at that straight line up and to the right. There's a lot of volatility in intra-day or intra-week movements, but ever since 2021, DPI has been an up and to the right trend versus ETH. The trend is your friend. This hasn't, this has been a really sustainable growth, which is the thing, which is the cool thing. This isn't a blow off top. Things are just modestly marching up and to the right when, in terms of DeFi versus ETH, which I think is a metric that offers much more signal

• 6:19David Hoffman?

  than DPI or DeFi tokens versus the dollar. People, DPI is an indication of people's ability to be risk on. And it's been DPI versus ETH is people's interest in being risk on versus Ether, right? Which is already kind of a risk on asset anyway. So it's really a taste of how risky people are interested in being, because DeFi tokens are more speculative than Ether. And this just marching up and to the right.

• 6:45Ryan Sean Adams?

  David, you want to talk about the NUPL? Or should I talk about the NUPL?

• 6:48David Hoffman?

  I think you're gonna have to talk about the NUPL.

• 6:50Ryan Sean Adams?

  Okay. This is a, this is a metric. We'll, we'll get back to DeFi revenue in a second. But this is a metric I like. So many of you have probably seen the, the Wall Street cheat sheet that looks something like this, where you, you go through this parabolic cycle of first, there's, there's hope in the market. Then there's optimism, belief, euphoria. And then it drops down to complacency, anxiety, denial, panic and anger. Eventually it levels off in, in depression. When the bull market comes to an end, you're in the, the bear market. Everyone thinks it's dead, never coming back. You get back to disbelief and then you repeat the cycle all over again. Well, the N U P L is an interesting metric from Glassnode Studios. So this is net unrealized profit and loss.

• 7:35Ryan Sean Adams?

  So we'll get into all of the mechanics of this metric. It uses something called, uh, uses something called realized gains, which is basically kind of tracking the, um, the cost basis of all Ether holders and using sort of a metric to measure whether they're up or whether they're down. This is based on when the Ether has last moved inside of their, their Ether account. So think of it as kind of as the cost basis of all Ether holders. What I find interesting here, David, is, is they use that, that, uh, Wall Street psychology kind of frame of reference where they've got like in the red, in the, in the, the bear market that you're seeing, they've got capitulation.

• 8:20Ryan Sean Adams?

  In the orange, you see hope. And in yellow optimism, and then green is belief. And then, and then blue is euphoria. And they sort of chart this over time, which is super interesting. And right now, according to this metric, we are in a stage right before euphoria, which is the, the belief stage. So we're in that green zone territory, uh, above, uh, like a bit above this, this metric number. We'd get into euphoria. We've seen that, according to this metric, uh, three or four times back in, in 2017. So. We're going to monitor this from time to time and kind of update you on this. But when we start to get into sustained blue level territory, that might be an indicator

• 9:04Ryan Sean Adams?

  that the market has topped, that we're inside the euphoria phase and things are getting a little bit nutty. We are the stage right below euphoria, according to this metric. I think it's something to track, something that's quite interesting because it was fairly predictive in the 2017 bull run. That makes sense.

• 9:22David Hoffman?

  That makes a ton of sense. And I think my only comment here is that when, if and when we go from green to blue and go into that euphoric mode, that actually is not an indication to sell, at least in right that one present moment, because it's about sustained time in that euphoric moment. If you go back to 2017, we first get into the blue, the euphoric moment with a $100 ETH price, right? And so maybe a little bit north of that. But then, and then we got, and then we fell back down into the green, but then got back into the blue at $300 ETH price. And then for the third time, we got into blue at the max, the absolute peak at 20 or at $1,400. So in 2017, there was, according to this, this metric, we were in the euphoric mode

• 10:07David Hoffman?

  for three times before it was the actual top. So if people are looking at the green that we are currently in and like, oh, man, there's only, there was only one more stage left. It's about time in that stage as well.

• 10:19Ryan Sean Adams?

  Yeah, well said. Good, good for, good for pointing, good that you pointed that out. I think that's definitely important to realize. All this metric is saying, probably the bottom line is, we have not yet hit the euphoria stage. So we are still relatively early in the bull run. We're certainly not the earliest phase, but we're definitely not in the later half is what this metric is telling us. David, let's talk about the DeFi index fund that Bitwise released. We had, we had Matt Hogan on the podcast for State of the Nation, which is just like an absolutely-

• 10:52David Hoffman?

  Oh, my God, it was so good. So good.

• 10:54Ryan Sean Adams?

  Such a good State of the Nation. So listen to that. He came on Tuesday, so you could get it on the podcast or on YouTube that way. But like, his message was, the financial advisors are coming, is his message. And there's $40 trillion, at least in the US, locked that the financial advisors manage. And he talked a little bit about the DeFi index that Bitwise has released. And it turns out, this is a headline just from yesterday, that this has been their fastest growing crypto index product ever. So the financial advisors are coming, David, and they're coming to DeFi and they're investing in DeFi tokens. Super bullish, I think, for this space.

• 11:33David Hoffman?

  I think what the interesting thing about this is that financial advisors aren't the fastest to move, but they're also not the slowest to move either, right? They are relatively independent. And if one individual financial advisor wants to pull the trigger on something, they can do that, right? And so when I see the headline fastest growing week ever, my head's that, well, how many people are on the sidelines, kind of waiting for other people to make the move? And now that other people are taking the move, like, I think there's going to be, you know, quote unquote, the floodgates open.

• 12:01Ryan Sean Adams?

  And you know what Matt opened our eyes to, I think, David, on that podcast, is that the narrative really makes sense? And why does the DeFi token narrative make sense? It's because financial advisors are used to investing in capital assets, like stocks, assets that have some sort of cash flow related to it. This is a graph from the block. And we'll include a link in the show notes as well of daily DeFi revenue. So once again, this is not like 2017 where the tokens available produced no cash flows. They were just like utility tokens, futility tokens, as we've called them. Now our tokens are producing real cash flows. No wonder financial advisors are starting to take interest.

• 12:43Ryan Sean Adams?

  What would you say about this chart here that I'm showing from the block of daily DeFi revenue?

• 12:48David Hoffman?

  Yeah, it's so consumable. This information is consumable and easy to look at. And for a financial advisor, I think they should be impressed about how the fact that they don't have to wait for a centralized entity to issue a quarterly report. Having live data is a huge value proposition that I think regardless of the specific DeFi protocol, the fact that DeFi at large is issuing, you know, real time reporting should be able to offer financial advisors, you know, the peace of mind when they make these investments.

• 13:21Ryan Sean Adams?

  So we are hitting about 25 million in DeFi revenue per month, a total of 210 million. These are, especially when you consider growth, these are not numbers to to sneeze at anymore. David, there's one last thing I think we should cover in the market section, and that is this tweet from Robert Leschner. I'm going to get you to maybe explain this and the significance of what Robert's saying here.

• 13:46David Hoffman?

  Yeah, I actually didn't understand the significance of this before I saw this tweet and I had to go and ask my more educated friends about what this means. So here's what I've learned. Robert says, this is currently the most important market data in cryptocurrency markets. It drives the cost of funding across stable coins and assets, the profitability of many businesses operating in this space, DeFi markets, and in some cases, spot prices. What Leschner, what Robert Leschner, founder of Compound, by the way, is what he's talking about is the GBTC and ETH premiums of grayscale. That is a significant source of revenue for many, many yield-bearing companies, right? Like, think of, who's that? Who's the big?

• 14:26Ryan Sean Adams?

  BlockFi would be one.

• 14:28David Hoffman?

  Yeah, it would be a great one.

• 14:29Ryan Sean Adams?

  Celsius would be another, Nexo.

• 14:31David Hoffman?

  Right. And so people are, like, many, many businesses have their revenue, a significant amount of their revenue, from putting Bitcoin into grayscale to accessing that premium, right? So like, if the premium, the GBTC to BTC premium is 50%, somebody would put in one Bitcoin in, wait six months, and get 1.5 Bitcoins out. Like, great, great business model. But it dried up, and now it's even negative. And so people, literally, this revenue stream just got deleted from so many companies that depend on it. And so we are going to see a big contraction in people, companies' ability to to generate revenue from this, from this, this path. And the fear is that this could actually lead to selling, because now they have to sell assets to make ends meet.

• 15:17David Hoffman?

  That's why Robert Leschner is drawing attention to this.

• 15:20Ryan Sean Adams?

  Yeah, I think it's interesting because people always ask the question of, okay, BlockFi is delivering like 7, 8% yield, annual yield on stablecoins. How does that work? Where does the yield come from? Well, one of the places that yield comes from is this arbitrage opportunity between the grayscale premiums, right? So because there's this massive difference between the spot price of Bitcoin and ETH and the price of grayscale shares, institutions are able to arbitrage that and they deliver that in the form of interest to centralized platforms like BlockFi. And of course, that filters down into the DeFi ecosystem as well. Now, I think there's two kind of questions about this.

• 16:03Ryan Sean Adams?

  First of all, it's interesting to understand that, but you know, the first is, will these premiums be sustained, right? Like low, this is the first time they've ever dropped into negative territory in recent memory and is that just a blip or will it hang out in negative territory? If it's just a blip, it doesn't really matter for the kind of the long term. If premiums go back up, it doesn't matter. The other thing I think to consider is I've, my understanding is as well, there is a nice arb opportunity when premiums are actually on the negative side. So there might be other ways to restore that, those high interest rates in DeFi. But it is interesting to think about the question of like, okay, where do these interest rates come from?

• 16:45Ryan Sean Adams?

  Because they are manufactured from some sort of arbitrage opportunity somewhere and the grayscale arbitrage opportunity is one of them. It's just how markets become more efficient. David, that is markets. We should take a minute to thank the sponsors that made this roll up episode possible.

• 17:03David Hoffman?

  Aave is a borrowing and lending protocol on Ethereum and just recently released Aave version two, which has a ton of cool new features that makes using Aave even more powerful. With Aave, you can leverage the full power of DeFi, MoneyLegos, yield and composability all in one application. On Aave, there are a ton of assets that you can deposit in order to gain yield and all of those same assets can also be borrowed from the protocol. If you have deposited collateral. Here you can see me getting a 200 USDC loan against my portfolio of a number of different DeFi tokens and ETH. I'll choose a variable interest rate because it's a lower rate than the stable interest rate option. But I could choose the stable interest rate option if I wanted to lock that interest rate in permanently.

• 17:48David Hoffman?

  One of Aave's V2 features is the ability to swap collateral without having to withdraw your assets. Trade them on Uniswap and then deposit them back into Aave. Aave does all of this for you, all in one seamless transaction. So you don't have to repay loans in order to change the collateral you have backing them. Check out the power of Aave at Aave.com. That's A-A-V-E dot com. If you want to live a bankless life, you need to get a Monolith DeFi Visa Card. Monolith is a one-two punch of both an Ethereum smart contract wallet and an accompanying Visa Card that lets you spend the money that you have in your Ethereum wallet everywhere where Visa is accepted. When you swipe your Monolith Visa Card at the grocery store or at a restaurant,

• 18:31David Hoffman?

  it actually makes a transaction on the Ethereum blockchain that spends some of the money you hold in your Monolith wallet. It's insanely cool and it's one of the best tools out there for living a bankless but still normal life. Monolith also offers on-ramp services for getting your fiat money into the world of DeFi. So it's trivial to top up your Monolith card if you ever need to and your deposited money goes straight into your non-custodial wallet. So your money is never held by a centralized intermediary. Because Monolith is native Ethereum infrastructure, the money you hold in your Monolith wallet still has the power of DeFi behind it. Swapping assets on Uniswap or earning yield in DeFi is at your fingertips.

• 19:13David Hoffman?

  Go to monolith.xyz and sign up to get your Monolith Visa Card today.

• 19:18Ryan Sean Adams?

  All right, David, release time. Let's get to the first. Google Finance has added a crypto tab to their google.com/finance sheet where you can see all of the metrics, you can see what's going on in the US, in Asia, S and P, NASDAQ, Russell Index, Dow Jones, and now crypto. It just feels like it naturally fits there. I think it's kind of cool, mainstream adoption.

• 19:39David Hoffman?

  Yep, and that's the story. Crypto is getting in front of people's eyeballs more and more and more, probably because people demand it.

• 19:47Ryan Sean Adams?

  This is the first year I've heard crypto actually mentioned on NPR when they're going through like the, you know, the roundups. It just feels like it fits. This is something we would have never seen in 2017. David, I'm going to round out a few of these and throw them at you, and then let's get some comments. So the first is ZK Sync has announced ecosystem investment round, a new investment round. So this is a layer two based on ZK. I believe it's ZK rollups, not optimistic rollups. This is from Matter Labs. They've got a pretty massive Series A investment for the tech that they're building. Let me get to the next one. Sushi is going main chain, multi-chain, rather.

• 20:29Ryan Sean Adams?

  So, and they're taking like this shotgun approach to it, which is sort of interesting. So Sushi, of course, is sort of a Uniswap clone originally, but they've developed into an interesting automated market making DeFi exchange in their own right. And they're just shotgun gunning approach their deployment to other layer twos and other chains, including Phantom, the Polygon chain, which is formerly Matic, Xdi chain, Binance Smart Chain, Moonbeam Network, which I'm not even, that's something on Polkadot it looks like. It's an interesting approach. They're like, we're going to deploy Sushi across all of these. We've got Alpha Hamora, who has embraced, as it says in the headlines, a multi-chain future.

• 21:13Ryan Sean Adams?

  They're starting with the Binance chain. So they're deploying Alpha Hamora on the Binance chain. And then we've got MetaMask, which is a wallet that we all know and love and use. They are creating an API so that it can be super easy using MetaMask to switch different chains. You could go from Ethereum mainnet to the Polygon network to some of these rollup chains like Arbitrum and Optimistic and Scale Network and Xdi and more. And then, lastly, I think, but not least, we've got Xerion, which is a DeFi portfolio viewer that we know and love. We had them on a recent AMA. They said they were going to do this.

• 21:54Ryan Sean Adams?

  They are now supporting the viewing of assets, not only on Ethereum mainnet, but also on the Layer 2 Polygon network. David, that was a lot of headlines there, right? But I think what we're getting to is a theme here. And I'm interested in your thoughts on this. And that theme is this. We are moving from just Ethereum host of all DeFi activities to something a little different, to a re-architecture, a bit more of a multi-chain world. What's your take on all of these things?

• 22:25David Hoffman?

  Yeah, the poly-chain world or the poly-chain thesis has always been one that has been interesting to me because there's many different ways to view a poly-chain world. One of the ways to view a poly-chain world is through the ETH-Maximalist lens, where you have the Ethereum L1, and then you have all of the EVM-compatible Ethereum L2s. That's Optimistic rollups, that's ZK rollups, that's Matic. And that's a story that we have here. We have a story of many different people implementing Ethereum's L2s. And those are also different chains, right? And a ZK rollup or an Optimistic rollups is a blockchain. And that is in that with MetaMask, you can now select these different networks that aren't the Ethereum L1 as you see fit. And then we also have the story of Sushi Swap,

• 23:09David Hoffman?

  basically spanning out, like you said, shotgun method to every single relevant blockchain that has users, right? Any blockchain that has users that makes it worth their time to make this effort.

• 23:18Ryan Sean Adams?

  Even some that don't. Do you know if moving?

• 23:20David Hoffman?

  Yeah, perhaps some that don't too. Yeah, but then also Alpha moving on to Binance, which definitely has users. And so the interesting story is that, you know, some teams and some companies, some tokens don't have to be Ethereum-native perpetually, right? There is value in going and finding different users on different blockchains. And all they have to do, all Sushi has to do is generate revenue on other chains. And that's good for Sushi. Importantly, Sushi, the token, is issued and relies on Ethereum, right? And so you own Sushi, the token, using the main Ethereum chain. But there's no reason why these other teams can't go and generate revenue for their application, for their business, by going and generating revenue on Binance Smart Chain or Matic or wherever.

• 24:05Ryan Sean Adams?

  At a high level, I think it's important for people to realize that there are really two separate chains that we've talked about throughout all of these. The first is a side chain, and a side chain is basically something that is not, at least from Ethereum's perspective, side chain is all relative. But from Ethereum's perspective, anything that is not secured by the Ethereum main chain consensus would be considered a side chain. So the Binance Smart Chain would be an example of a side chain. XDi, for example, that would be an example of a side chain that has its own validator set. A Layer 2 is better defined as something that derives its security from Ethereum consensus, the value of ETH as an asset, and the Ethereum main chain.

• 24:50Ryan Sean Adams?

  So you know, the Polygon network kind of plays a little bit in Layer 2. It's mostly a side chain, but a little bit in Layer 2. But these rollups that we've been talking about that are coming out, like optimistic rollup, the rollup that we just mentioned from Matter Labs, ZK Sync, those are all Layer 2 chains that are secured by the Ethereum mainnet and the value of ETH as an asset. So when we talk about a multi-chain world, at some level, we've always had a multi-chain world, right? I consider Coinbase, Binance, Gemini, these are all side chains, essentially. They have their own ledgers, these are side chains to Ethereum and Bitcoin and other crypto networks. So we've always had a multi-chain world.

• 25:34Ryan Sean Adams?

  And now we are having like more of a multi-chain world with some of these DeFi protocols expanding to other chains. I think the interesting question is, are we going to live in a world that is more L2, Layer 2 dominated? Or are we going to live in a world that is more side chain dominated? Or is, as Andreessen Horowitz said in their recent press release, Chris Dixon wrote this about their investment in optimism, "We don't know, so we're betting on all of them," is basically what they said. What's your take?

• 26:03David Hoffman?

  My take is that in the short term during the bull market, we will live in a many different blockchains, many different L1s world with plenty of sidechains, right? Binance Smart Chain, it's going to work during the bull market. Polkadot, perhaps even Polkadot works during the bull market. I think, and that's because there's just more people than what Ethereum capacity can handle. And so there's overflow, there's spillover. This is why Ethereum L2s are also going to work. There's going to be general spillover. Then during the coming bear market, if that if that cycle does continue to play out, things will contract, there will be fewer users and people will contract back to Ethereum, in my opinion, as the economic hub of the internet.

• 26:42David Hoffman?

  And then that will give the opportunity for Ethereum-specific L2s to benefit, because they are closer to Ethereum, they're closer to the heart, they're closer to Manhattan. So, short term, all chains will work. Long term, mainly just Ethereum L2s.

• 26:58Ryan Sean Adams?

  There you go. Maybe, or maybe you're a protocol sync maximalist, David, and that is a thesis through which we see the world. The most credibly neutral base protocols tend to win over time. We'll see how that plays out, but we'll continue to talk about it. David, this was a DeFi protocol that just was released last week. We talked about it on the rollup Alchemix, and you explained it. I don't think we need to explain it again. You could listen to the previous rollup to hear. But what I'm amazed at is this new protocol, only a week old, and it's already got over 100 million in DAI in it. This, just this space moves so incredibly fast and capital moves so quickly. Do you have any takes on Alchemix?

• 27:40David Hoffman?

  Yeah, I got a take on Scoopy Troubles' Twitter name. Best name in Twitter, by the way. It's so fun to say, Scoopy Troubles. It's how I say it in my head. But yeah, for those, the TLDR of Alchemix is it's loans that pay back themselves via interest earned in DeFi, right? So you pay out $100 loan and then the principal or the interest will just pay off the loan. Don't tell students about this one, is the joke that I have, because I'm sure they would like their loans to be paid off as well. But that's just not how it works. So, pretty cool protocol, and I think it's going to be a pretty important money lego.

• 28:11Ryan Sean Adams?

  All right, David, this is another hot DeFi protocol called B Protocol. I know you talked to them for Meet the Nation earlier this week. I'm not sure if that episode's released yet, but can you tell us what B Protocol is? And the headline here is B Protocol in Compound. Their integration is live. So what's going on with B Protocol here?

• 28:29David Hoffman?

  Yeah, B Protocol, Meet the Nation, coming out sometime next week for those that want to go and dive deeper into B Protocol. Basically, B Protocol is like your safety net for liquidations for MakerDAO or Compound or in the future, AVE. They're going to integrate with AVE. And so this is a response to the Black Thursday event, which actually is almost coming up a year on our one-year anniversary of Black Thursday. Yeah. And so for a quick history lesson, Black Thursday, Ethereum blockchain was extremely congested because Ether price went from like $270 down to like $120 in a very short amount of time. MakerDAO vaults were, needed to get liquidated, but Ethereum congestion was so high that bids weren't getting in. And so somebody was able to liquidate those vaults for $0, which was bad because then there's no collateral left over.

• 29:15David Hoffman?

  Some, some people had their, basically their vault just completely drained. It wasn't an exploit. It wasn't an attack. It was just a failure of, of liquidations. And this is what B Protocol is doing. It's a guaranteed liquidator. And so what you do with, with B Protocol is instead of going into Compound or MakerDAO, you go to B Protocol and you deposit your money into Compound or MakerDAO through the B Protocol wrapper. And what that does is that gives B Protocol the rights to liquidate your positions according to the same exact parameters of MakerDAO or Compound or the underlying borrowing and lending protocol. But they get priority on, on liquidations versus the, the external liquidators.

• 29:59Ryan Sean Adams?

  Wow.

• 30:01David Hoffman?

  Right? Super cool. And they actually save a bunch of money by not having to compete with miners on gas fees. And so they, and that's where a little bit of yield comes from. And so because the liquidators of the B Protocol system don't have to compete with other miners in, in gas auctions, that savings actually goes back to the users, which is a pretty cool platform.

• 30:23Ryan Sean Adams?

  Super interesting, David, I'm gonna have to watch that full meet the nation with B Protocol, because one thing I have questions about is like, what are the security implications of wrapping your collateral in a B Protocol token? I'm sure you cover it there, but what a super interesting primitive, just in general, that like, I wouldn't have ever thought could be devised, and just like the creativity of these financial systems, it's pretty cool, man. Let's get to NFTs. Every week, there's new NFT releases. This week has been no exception. Kings of Leon are releasing album NFTs right now. That's a fairly, you know, it's a fairly mainstream band, right? Kings of Leon,

• 31:05Ryan Sean Adams?

  they've been around. I'm a Kings of Leon fan, so they're joining the NFT fray. You know, this is just an example of another, another group from the music scene jumping aboard crypto here.

• 31:21David Hoffman?

  Absolutely. And again, the always the through line is this is a new way for artists to monetize themselves. They're not doing this because, well, maybe they are doing it because of hype, but they're doing it because they're gonna make some money, right? And this is going to just be a magnet, both for capital and for other artists, right? So, you know, if anyone's a King of Leon, like, has a Kings of Leon connection, we would love to bring them on the show. So let us know.

• 31:43Ryan Sean Adams?

  Oh, yeah, let's bring Kings of Leon on. And what I love about this, David, is we're reading about NFTs and crypto in Rolling Stone, rollingstone.com. No big deal. All right, David, let's wrap up releases with this. Compound has introduced another chain called Gateway, or the Compound chain, as the original white paper described it. So what's Compound doing here? And how does it fit into the conversation of a multi-chain world that we were talking about earlier?

• 32:11David Hoffman?

  Yeah, this one's a little unique. This is a sidechain, I guess, because it has its own consensus mechanism. It's not secured by Ethereum. It's secured by cash validators, and cash is the new currency token for Compound. It's a stablecoin. And so this is a application-specific blockchain that links into Ethereum and other chains that is specifically built for Compound. Very unique. Pivot, I guess, from Compound that has a lot of, you know, ETH maxies like me who are scratching their heads as to why they're doing this.

• 32:44Ryan Sean Adams?

  ETH maxi.

• 32:45David Hoffman?

  I don't really get it. I don't really get why we want an application-specific blockchain, rather than going on to something like optimistic rollups like where everyone else is. But Robert Leschner, and I'm not ready to to bet against him. So I'm just gonna sit and I sit on my hands and wait and see how this thing plays out.

• 33:00Ryan Sean Adams?

  What's interesting here is they built it on substrate, which is a Polkadot technology. Now, they didn't choose to connect it to the rest of the Polkadot network. That would, of course, incur fees to reserve a spot on the Polkadot network. So they haven't done that yet. But I I find that interesting, and it basically allows you to do something that you couldn't just do on native Ethereum, which is like borrow against, borrow dots, for example, a non-Ethereum asset using ETH as collateral. I guess this is what that this is is supposed to provide. But I'm not sure how security works, to be honest. If it's not secured by the Ethereum mainnet,

• 33:40Ryan Sean Adams?

  and if it's not secured by by Polkadot either, it's just secured by its own set of validators, you know, backed by this cash token. So a bit of a different take here, and we'll see how that evolves. David, let's leave releases and get to the news. As always, there is a lot of news. Let's start with this one. Citigroup has come out with a paper where they actually said Bitcoin is at a tipping point and could become, this is in quotes, "the currency of choice for global trade." I guess they mean global trade between competing nation-states? What's what's this report saying?

• 34:17David Hoffman?

  Yeah, this report is massive. It's 108 pages and is very positive about Bitcoin. It's it's a huge improvement from some of the reports that we saw back in 2017. And yeah, look, Bitcoin mentioned over 658 times. Ethereum mentioned 21 times, I believe, also very positively. It's a it's a report about Bitcoin for for people interested in Bitcoin, but they couldn't help to include some some Ethereum talk because of how relevant it is. And so that's pretty cool. The fact that big institutions like Citibank are talking positively about Bitcoin is obviously bullish.

• 34:52Ryan Sean Adams?

  Look at this, David. I'm doing a quick search for Uniswap because I have not read this full report.

• 34:56David Hoffman?

  Uniswap's in there.

• 34:58Ryan Sean Adams?

  You talk about WBT on Ethereum. Really?

• 35:01David Hoffman?

  Yeah.

• 35:01Ryan Sean Adams?

  So the bankers are going deep on this stuff, huh? Is that what you're saying?

• 35:05David Hoffman?

  Type in wrapped, type in wrapped.

• 35:07Ryan Sean Adams?

  Wrapped?

• 35:08David Hoffman?

  Wrapped.

• 35:09Ryan Sean Adams?

  We got three? Yeah, wrapped Bitcoin. Wow, they're doing their homework. Good job. Welcome bankers. Glad. Thanks for tuning into Bankless.

• 35:20David Hoffman?

  All right, PayPal. Hide that from your boss.

• 35:24Ryan Sean Adams?

  Not safe for banker work at least. All right, PayPal to buy crypto custody firm, Cur. I've not heard of this crypto custody firm. So it may be a smaller one or it's not, not like Anchorage, which is one that I've heard of or.

• 35:39David Hoffman?

  Bit, bit, no, Bitpay?

• 35:41Ryan Sean Adams?

  Bitco, Bitco. Bitco, thank you. But they are getting into the crypto asset space. They bought this for, for $500 million. So first of all, wow, nice premium on crypto based company these days. But also, this is part of the DeFi mullet story that we've been talking about. So the DeFi mullet is finance, traditional finance, fintech in the front and DeFi in the back, crypto in the back. That's what PayPal is doing here, investing in the new financial infrastructure. It's kind of what I see playing here. I think that the banks are going to get checkmated by this kind of thing. Because if fintech is the front end, things like PayPal, for example, or things like Venmo or Square, right?

• 36:25Ryan Sean Adams?

  And they're using traditional banking infrastructure as the backend. If they just do a swap that out for crypto infrastructure, where does that leave the banks is always my question. But this is super bullish, I think, for, for crypto that fintech is getting involved here.

• 36:40David Hoffman?

  And having a blockchain in the back, right, Ethereum or Bitcoin in the back, quote unquote, is where they're supposed to be. Like, these things are not supposed to be in the front face of users. Like, we don't want to tinker with ACH or Fedwire, right? That's not cool. Only nerds like us like to tinker with Ethereum and blockchain directly. If we want to go mainstream with this, we need big trusted companies like PayPal to do the DeFi in the back, DeFi mullet, right? Where all of the UI and UX developers that PayPal employs, which is a lot of them, they're all of a sudden going to make Ethereum and Bitcoin and all these DeFi protocols very easy to use by just obfuscating them and showing them the PayPal front end.

• 37:20Ryan Sean Adams?

  Every fintech is going to get their DeFi mullet on. We're seeing it already. This is another tweet from Mike Dudis about PayPal, and this is a direct quote from the story. PayPal's crypto unit is experimenting with smart contracts, testing Ethereum and other blockchains as potential candidates to help the company improve payments and other transactions. They're just jumping right down the rabbit hole. I think we'll see more of this in the future as well. David, something that happens, I feel like every week, we'll put it in that category, is MicroStrategy invests more of their cash into Bitcoin. They've just done another $15 million investment this week. Not much more to say there, is there?

• 38:04David Hoffman?

  No.

• 38:05Ryan Sean Adams?

  Another week goes by.

• 38:06David Hoffman?

  Other than the consistency is impressive, and it kind of leads me to believe that Michael Saylor and MicroStrategy will never actually be done filling their bag, and they will permanently be taking their US dollars and buying Bitcoin with it. Like, this is what, the seventh, eighth, or ninth purchase of Bitcoin by MicroStrategy? At some point, this is just them saving.

• 38:26Ryan Sean Adams?

  You know what this looks like to me? It looks like what we recommend is you dollar-cost average into crypto. There's dollar-cost averaging their company balance sheet into crypto.

• 38:36David Hoffman?

  Sometimes it's $15 million, sometimes it's $900 million.

• 38:40Ryan Sean Adams?

  Sometimes they borrow it, you know? It's not even, like, they just borrow it directly from the Fed and bondholders. Nice to be able to do that if you're a corporation. Another thing that tends to happen on a weekly basis is something that happened this week. A DeFi protocol was hacked, $14 million, Furo combo exploited. I'm not personally, I've heard of this, I've not used it directly, but I'm not sure. Did you read the details of this hack or what actually happened?

• 39:10David Hoffman?

  This exploit was unique and has never been done before, and I think it's unique to how or what Furu Crumbrow is. It's apparently a drag-and-drop DeFi building block system, which is kind of cool. But apparently, somebody was able to trick the protocol into thinking that the application that they had deployed was Aave, when it wasn't actually Aave or something.

• 39:31Ryan Sean Adams?

  I remember this, sorry.

• 39:32David Hoffman?

  Very unique.

• 39:32Ryan Sean Adams?

  Another, the last thing that tends to happen other, every single week, is the Fed talks about talking about the US digital dollar. When are they going to stop talking and actually do something, David?

• 39:45David Hoffman?

  Yeah, like, once again, the Fed says, we're looking into digital currencies. And at this point, just fucking do it. Just get there.

• 39:52Ryan Sean Adams?

  China is doing it. They're like, trying it.

• 39:55David Hoffman?

  The first time we talked about the Fed looking into the digital dollar, Ether, that was like, you know, in 2020, and Ethereum was a younger system then. Like, we forget how young.

• 40:05Ryan Sean Adams?

  We're all younger.

• 40:06David Hoffman?

  We're all younger. And it has developed way more in the last, like, you know, X number of months than the Fed has. The Fed's still looking at the digital dollar. Meanwhile, crypto dollars on Ethereum are through the roof. Like, it's not gonna hap- if it hasn't happened by this point, honestly, it's not gonna happen.

• 40:25Ryan Sean Adams?

  David, let's get to some of the things that are happening in NFTs, because this is another thing that's going to be a recurring theme, I feel like, for the next few months on the rollups. That is, NFTs breaking new records. The musician Grimes, this is Elon Musk's girlfriend, I believe, she debuted an NFT auction, sold out 20 minutes, about $6 million. Got another one. Blau brings in the biggest NFT crypto art auction ever. So, setting records here, almost 12 million, 11.6 million in this auction. Got another one here. Ubisoft is incorporating NFTs into its game, so a major game publishing

• 41:09Ryan Sean Adams?

  company, working with SoRare, they're doing sort of football, soccer in the US, collectible cards, and Ubisoft is launching a game built with their NFTs. And lastly, well, this is Spencer Noon, saying that NFTs are on the verge of going mainstream, and he's got some metrics behind it. But David, all of this news, on a weekly basis, this week included, feels like Spencer's right, NFTs are going mainstream.

• 41:37David Hoffman?

  Fantastic thing about NFTs is that they are magnets for celebrities and celebrities are magnets for people's eyeballs. Right? So the amplification power of this whole revolution is massive because it's celebrities' jobs to be public and get as much exposure to their NFTs as possible. So celebrities are taking NFTs mainstream for us and that's because NFTs are a way for them to monetize their own labor as we have been saying.

• 42:03Ryan Sean Adams?

  That's, that's a really good point. I mean, we're in fact crypto is effectively leveraging all of the attention and all of the fan base that these celebrities have in order to amplify its, its mention. In it, in order to amplify its, its attention on this space. Spencer has seven signs that NFTs are on the verge of going mainstream. David, should we cover these?

• 42:24David Hoffman?

  Yeah, I think we can blow by them pretty quickly. Number one is that obviously sales are through the roof. $91 million worth of crypto artwork sold in February. Which is eight X the previous month. So that's pretty crazy.

• 42:38Ryan Sean Adams?

  The second is that there are now over four artists who have sales in artwork value of over 10 million. So Spencer says this is a sign that artists have unprecedented earning potential. Once you see another artist make 10 million on NFTs, you're certainly going to FOMO into that if you are a creator, if you are an artist. David, what's the third one?

• 43:00David Hoffman?

  NBA Topshop up to $300 million in all time sales. That's on the Flow blockchain and there's a deeper conversation as to whether NFTs on the Flow blockchain are going to work out. Can't settle to Ethereum, kind of a problem in my mind, but still either $300 million or $300 million.

• 43:17Ryan Sean Adams?

  Bringing more people into the space. The fourth is the sales of CryptoPunks. These are the original NFTs.

• 43:25Ryan Sean Adams?

  Yeah, vintage 2017 or earlier even. They surpassed all time sales. This is all denominated in ETH, which is another interesting point in and of itself. All time sales of over $105 million. So the more authentic, the original NFTs are doing quite well in this NFT boom market. David, what's the fifth?

• 43:47David Hoffman?

  HashMax, 825 HashMax in NFTX. NFTX is a NFT ETF-type product with index fund that allows investors to get exposure to crypto art. And there's just more and more HashMax in NFTX. NFTX continuing to be like overall buying pressure for NFTs.

• 44:07Ryan Sean Adams?

  David, did you hear Mark Cuban call them hashmarks on our podcast?

• 44:12David Hoffman?

  The guy knows branding.

• 44:13Ryan Sean Adams?

  The guy knows. It was awesome. Yeah, well done, Mark. Freudian slip there. All right. OpenSea, which we're having on a bankless Ask Me Anything next week, they just surpassed 50,000 users. This is an over 100, over 1,000 annualized growth. So this is definitely a sign of a vibrant secondary market for NFTs. So OpenSea is almost like an eBay for NFTs where people can resell NFTs that they've purchased. What's the seventh? Cap this one off for us.

• 44:43David Hoffman?

  Yeah, socks. One of the first tokens redeemable for a real world item, Unisocks. As these one socks, one pair of socks is now trading at $130,000. These are, these are actually ERC20s, but the connection is still the same. You know, scarce digital goods that, well, this one's actually redeemable for real life goods, but I would still categorize it in the NFT camp. There's, there's only so many of them. The Uniswap meme is extremely strong. And to the point that people are evaluating that Uniswap meme at $130,000 per token. I don't know how many total tokens there are. I think maybe 10,000. Market cap is very high for socks.

• 45:22Ryan Sean Adams?

  David, this is the one that got away from me. I remember being like, oh, I'm not going to pay $150 for a sock. Come on, Uniswap. Come on, Hayden Adams. I'm not doing that. Joke's on me. They're worth 130,000 now.

• 45:35Ryan Sean Adams?

  Gotta love crypto. Evolve Funds files for an ETH ETF. This is a Canadian firm that is filing for an ETH ETF. This is right on the heels of the Bitcoin ETF that they just followed. And I think maybe the story here is that first Bitcoin will get its ETF and institutional adoption. But right on the heels of Bitcoin is Ether. And this is what we've seen across, you know, the CME futures, across all institutional preferences so far, that Bitcoin is really paving the way for Ether to get into the institutional adoption as well. And he takes here.

• 46:11David Hoffman?

  Yeah, here's my hot take. An Ether ETF is more bullish for Ether than a Bitcoin ETF is bullish for Bitcoin. And that's just because of relative market cap sizes. If you are somebody who's interested in buying a Bitcoin ETF, you're probably also interested in buying an Ether ETF. And $1 into an Ether ETF means more for Ethereum, because the market cap of Ethereum is much lower than Bitcoin. So it means more. It will push the price up more. That's my hot take.

• 46:39Ryan Sean Adams?

  I've got a, I've got a second hot take on that, which is the take that Bitcoin expands through institutional adoption. So crypto banks, as we've said, Ether can do that too, though, right? Which is the interesting thing, but it's not limited to that, because it can also expand as DeFi collateral as well. So it's got these two paths to growth, whereas Bitcoin has just the one, which I think is kind of unique and bullish ETH. There's a hot take on top of your hot take. Bitmex Arthur Hayes expected to surrender to US authorities. He was kind of on the lam, I believe, but now he's expected to surrender. What's your take on this?

• 47:21David Hoffman?

  It's gonna happen. Now it's finally happened. No, end of story, I guess.

• 47:25Ryan Sean Adams?

  End of story. End of story. It's probably, yeah, Arthur, Arthur is definitely going to be back in the crypto scene. I'm sure at some point we'll see what happens next with that story.

• 47:35David Hoffman?

  Not ready for that to happen.

• 47:37Ryan Sean Adams?

  All right, David, let's get into some takes. We've been dropping the hot takes, but now let's, let's formalize it within our take section. This is a message from Chris Berninski. What is Chris saying here, David?

• 47:48David Hoffman?

  Yeah, he is giving a warning to crypto entrepreneurs to be patient and let the deals come to you, basically. So let me, let me read this out real quick. If you're an entrepreneur raising money in crypto, try to get more than one term sheet before committing to a lead. The market is competitive and flush with capital that is to your favor. More than one terms of service or term sheets, excuse me, will help you get you the best deal and neutralize predatory behavior. What he is saying in the crypto space is that good entrepreneurs with good products are Are this scarce goods and as an entrepreneur, you need to know that. And so don't just sell out for the first deal because capital is not scarce in crypto.

• 48:30David Hoffman?

  People need to deploy crap capital and they don't have very many places to deploy them to. That's also just a warning or a message for people interested in entrepreneurs. The environment is friendly to you. Go build something like you can get money for it. So go, go out and get that money. Um, so thanks, Chris, for, for just being a heads up play.

• 48:49Ryan Sean Adams?

  So Chris is saying labor is in charge of this market. In particular, David, I think labor that knows how to develop smart contracts and DeFi protocols. And in order to know those things, you had to be leveling up on this stuff like two years ago. Right? You could join now, but you're not going to command the premium that of, of DeFi veteran. And a veteran is like two years, one year even, developing this space commands.

• 49:13David Hoffman?

  Not that long.

• 49:14Ryan Sean Adams?

  Yeah, this is the value of front running the opportunity. And when we say that, we don't just mean investing in assets while they're low and expect them to, to, to go high. We do mean that, but we also mean front run the labor opportunity. If you know crypto at this stage in the game, you are ahead of most of the world. Use that to your advantage. You can do that during the, the bull markets is what Chris is saying here. Here's another take. Anthony Sisano is really fascinating to watch. Binance Smart Chain speedrun Ethereum's DeFi summer. What's he saying here?

• 49:47David Hoffman?

  Yeah. So he's talking about like the crazy farming APYs that you can get on Binance Smart Chain right now. The, the crazy token movements, new tokens, new assets. Anthony's saying that it's very much like Ethereum's DeFi summer, but now it's happening on Binance and it's happening at a faster rate. And which makes sense because we've already done DeFi summer once. And so now the Binance chain is doing it. It's just going to do it even faster. Binance chain saw, saw BNB skyrocket in price and saw many new assets come and also skyrocket in price. Also got their first rug pulls. Uh, so pop their rug pull cherry like congratulations, Binance. Uh, and so yeah, that Binance Smart Chain speedrunning DeFi, uh, DeFi summer.

• 50:24Ryan Sean Adams?

  All right. Here's another take. The EVM is the moat while we're doing Anthony Sisano takes. This is his second take here. The, the Ethereum virtual machine is what he's saying is the moat. Is he saying that's the moat for Ethereum, the Ethereum virtual machine? What's your take here?

• 50:40David Hoffman?

  Yeah, so Binance Smart Chain, also an EVM-compatible blockchain, right? And so many, many things are EVM-compatible blockchains. Notably EOS was once an EVM compatible, or I guess it still is, an EVM-compatible blockchain. But what Anthony is saying is that because everything is an EVM-compatible blockchain, that's actually beneficial to Ethereum. While in EOS and Binance Smart Chain, they're like, hey, you can come deploy your contracts on Binance or on EOS, right? And so then they do, but it's actually just adding network effects back to Ethereum because Ethereum set the standard and everything began on Ethereum in the first place. So compatibility to try and steal users or volume or activity from Ethereum to your chain by implementing the EVM is actually just increasing Ethereum's network effects.

• 51:25David Hoffman?

  That's Anthony's take.

• 51:26Ryan Sean Adams?

  Yeah, definitely. I can see, I can see that take, although I would say it's definitely not the only moat for Ethereum. I don't, Anthony's probably not saying that, but would you agree that the EVM, the technology component is not the only moat that Ethereum has? It might not even be the strongest moat. I think that Ether as an asset is a moat in, in of itself. I think the Ethereum community is a moat. I think credibly neutral protocols, builders behind them are also moats in this ecosystem. I'm not sure necessarily, you know, stronger moats, but I totally agree with the take that others adopting the EVM enforces the EVM as a standard. Polkadot, for instance, they're not going with the Ethereum virtual machine, right?

• 52:11Ryan Sean Adams?

  Cosmos, Adams, they're not, they don't have an Ethereum virtual machine right now. And, you know, that has maybe decreased their adoption speed as a result.

• 52:24David Hoffman?

  All right, Ryan, on to the next take, which is mine. And my take is that I am a full-block maximalist. And so this has been going around, especially as many, many people come into the space and they aren't, they don't have some of these conversations that we've been having on Bankless for a while now. They see like, oh, Polkadot, Scail, like, oh, like, you know, Binance Smart Chain, new chain, like, doesn't have fees, it's good. And so my take is that I'm a full-block maximalist, and that means that I pay attention Into blockchains that have full blocks and that's a simple, the calculus is pretty simple. If your blockchain has full blocks, it's being used and people are paying fees to use it. Therefore, and fees are importantly not gamable, it's not a gamable metric unless you are interested in burning money to fake that metric.

• 53:07David Hoffman?

  Full blocks and and blockchains with high fees, which is only Bitcoin and Ethereum are how you get a very strong signal out of this space. And so as soon as Polkadot or Binance Smart Chain or whatever block, and so your blockchain here has full blocks. I will start to include it in my mental models and we will begin to talk about it on the Bankless program. So stay tuned for future blockchains with full blocks.

• 53:30Ryan Sean Adams?

  All right, David, while you throw you've thrown it down right there. This is kind of what you're talking about, right? So we've got Ethereum and it's it's kind of at the top with $15 million average seven day daily revenue. And then we've got Bitcoin in second place with 6 million. But I will say, and then we have a bunch of DeFi protocols. We've got Binance Chain here with 100,000 in average fee daily revenue. Are you saying if that starts to rise up the ranks and get closer to Ethereum and Bitcoin? That that will make you more bullish on something like Binance Chain relative to Ethereum or Bitcoin?

• 54:07David Hoffman?

  Yeah, it's a step in the right direction. However, there are issues with Binance's 21 nodes, which are largely run by Binance, right? And so when Binance pays for fees on Binance Smart Chain, they're actually just paying themselves. So there is actually a way, because they're the ones collecting their own fees. It's okay for them to wash trade because they they the fees, the money that they're paying, they just collect. So there is a nuance there that is worth parsing out.

• 54:32Ryan Sean Adams?

  Yeah, absolutely. But definitely your point that that fees are the way you determine whether a blockchain is used or not is a is a good one. All right, David, let's go with this last take. I think this is Ashley saying ETH Maxies.

• 54:48Ryan Sean Adams?

  Pretending this is ETH Maxi saying this. Bitcoin is a worthless meme coin. Also ETH Maxis. NFTs, oh my god. NFTs are the best thing ever. What is she saying here?

• 54:58David Hoffman?

  Well, I think this means that I'm actually not an ETH Maxi because I don't think Bitcoin is a worthless meme coin. But many ETH Maxis do. Like, they point at Bitcoin and go, "Oh, it's a pet rock. It doesn't actually do anything."

• 55:09Ryan Sean Adams?

  Can I ask you? I want to, I want to get back to that, that thing of ETH Maxis. Because I don't actually believe, David, before we get here. It's like, who's an ETH Maxi? I don't like, I, I-

• 55:20David Hoffman?

  Anti-pro-synthesis.

• 55:22Ryan Sean Adams?

  Okay, there's, so there's one. There's one guy on Twitter. That's a pseudonymous account. He's an ETH Maxi. I keep seeing all of these tweets about ETH Maxis. In fact, I'm called an ETH Maxi. I know I'm not an ETH Maxi because I believe in other assets that are not Ethereum and other chains that are not Ethereum. I'm definitely a bankless maximalist and a decentralization maximalist in this space because I think those values are how we, like, are very important. Those are the things we need as a foundation for this space. But I don't believe that there's only one chain that can exhibit those, those values. So, and I don't even think you're an ETH Maxi. You said you were an ETH Maxi early in the episode, but I don't think you actually are. Like, this is a meme that I feel like has been foisted

• 56:06Ryan Sean Adams?

  upon a group of people without, without substance. But what's your take?

• 56:10David Hoffman?

  Yeah, I'm, I, it's, it's a semantic issue, right? Because like, I'm not an ETH Maxi because I own assets that aren't Ether, right? And that's the difference between Bitcoin Maxis and Ethereum Maxis. And I don't really think Ashley, Ashley is like poking fun at ETH Maxis. I think she's just doing it for the memes. It's a good meme, it's a good joke. The point about, why the, the theory behind why there can't be Ethereum Maxis is that Ethereum is an economy. No one is like an economy maximalist. I mean, I guess, or we're all economy maximalists. And by definition, Ether can't work as an asset without many, many, many other assets as well having value on Ethereum.

• 56:51David Hoffman?

  And so, just like this one token to rule them all attitude is, is- Just not relevant, it's invalid when it comes to Ethereum. But it is also a very easy way to just ascribe homogeneity amongst an out group, right? So if you don't consider yourself an ETH head, an Ethereum or whatever, you'll just point at all the people that you do consider to be in the out group of, you know, the Ethereum believers. And then you'll just call them ETH maxis, and that's how it works.

• 57:19Ryan Sean Adams?

  I got it. So sometimes when people use the term ETH maxis, what they're really saying is like fans of ETH, like people who believe that ETH is really important and really great, and that it's better in some dimensions than other chains is kind of what they mean.

• 57:31David Hoffman?

  Oh yeah, it sounds like meme.

• 57:33Ryan Sean Adams?

  Yeah, right? So like, I guess in that, in using that term, then you would be an ETH maximalist. But I think what's interesting here is that Ashley is saying like Bitcoin is a worthless meme coin. And then she's also pointing out that Ethereum maximalists or Ethereum fans are going crazy over NFTs, right? And NFTs, what are they? They don't have cash flows. They are useless memes, are they not? Do you see that there's a kind of, I guess, a contrast here? Or something that doesn't line up, I guess, in the way that they think of these things?

• 58:09David Hoffman?

  Yeah, I mean, there's, we could go, we could talk about this forever.

• 58:14David Hoffman?

  NFTs are valuable because there's belief that other people will buy them. You know, there's one way to value these things as in this strictly the value of the art. But I wouldn't say that that's why, you know, NFTs are being bought for millions of dollars these days. They are being bought because people think that they can sell them to other people for higher prices in the future, which is what Bitcoin is. And that's also what Ether is. Like, as soon as we have a conversation about like, especially with Bitcoin, with perfect scarcity, it automatically turns into a pyramid, not scheme, but pyramid game, right? And NFTs are also a pyramid game, where the value depends on you being able to sell it to someone else in the future for a higher value. And at that point, if it's, if that's the only fundamental thing about what is true about the value of that asset,

• 58:59David Hoffman?

  then that's when people say like, oh, it's just like a worthless meme coin. It's just a Ponzi game. It's just a Ponzi scheme or whatever. But all scarce assets have this Ponzi nature to them. Their only reason that they're going to go up is, and people are going to buy them now so that they can sell them to other people for a higher price later.

• 59:16Ryan Sean Adams?

  I do think it's the case that Ethereum have traditionally been like, it's taken them a long time to admit that, that memes actually have real value and that you can have things that are store values because everyone believes they are store values or things that can have value because collectively, society believes they are valuable. Ethereum's historically have been a bit slower to admit this, whereas Bitcoiners are just like, yeah, of course, the number goes up. Like, they got it day one. They got it day one. Absolutely. All right, David, those are the takes. We should stop and tell our listeners about the fantastic sponsors that made this episode possible, and then we will be back with the meme of the week.

• 59:57David Hoffman?

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• 1:00:40David Hoffman?

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• 1:01:13David Hoffman?

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• 1:01:56David Hoffman?

  which are synthetic assets that move inversely to their target asset. Synthetix isn't just for traders. Developers can build on Synthetix to access the infinite liquidity offered by synthetic assets. Or investors can stake collateral to the protocol and earn fees that the protocol collects. If you're a trader and you're looking for a trading platform and not found in the legacy world, check out quanta.io. If you're a developer or you just want to earn yield on your collateral, go to www.synthetix.io, where you can stake your SNX or ETH and earn fees from Synthetix.

• 1:02:32Ryan Sean Adams?

  All right, David, we're back. What are you excited about this week, my friend?

• 1:02:36David Hoffman?

  Okay, so I didn't want to do this because I wanted to keep this alpha for myself. But my, my, one of my favorite digital artists out there is releasing his NFT, his digital art NFT. And it has some bankless influences on it. It is a picture of this Gitcoin robot, the theme behind Gitcoin. And he's, he's fighting the, the monster that is Moloch over some sort of cityscape, right? Really, really cool. And there's also some trophies to go to that are going with it.

• 1:03:02Ryan Sean Adams?

  This is amazing.

• 1:03:03David Hoffman?

  It's so dope, dude. It's so dope.

• 1:03:05Ryan Sean Adams?

  This is the first time I've seen this.

• 1:03:07David Hoffman?

  And so like I'm, I'm going to be paying attention to this when it goes live for bidding. And I might, and this is why I'm, I'm okay. I don't really find myself an NFT fan. I don't really find myself like interested in speculating on art, but I want this for the Art, I want it for the art. So I'll be fucking placing some bids, depending on how high this this thing goes. There's I'm probably gonna get it outpriced, but I really, really want this thing. And so I might buy it. We'll see.

• 1:03:34Ryan Sean Adams?

  Bad move to talk about it, then in a bankless roll up, my friend, because now the word is out. When is this? Oh, Friday, the 5th.

• 1:03:42David Hoffman?

  The auction goes for two days. So if everyone can forget about it over the weekend, that'd be great.

• 1:03:47Ryan Sean Adams?

  Let's just cut this piece. Let's cut it. Cut this out of it.

• 1:03:50David Hoffman?

  It's not going in.

• 1:03:53Ryan Sean Adams?

  Oh, man. Yeah, that's pretty awesome. Great piece of art, for sure.

• 1:03:56David Hoffman?

  Yeah. And and also, the artist Kitty is donating revenue to Gitcoin. So not only is this art for art sakes purposes, you can fund an artist who I believe deserves to be rewarded for their art, but you're also funding Gitcoin, which also deserves to be funded. So you can feel good about it.

• 1:04:12Ryan Sean Adams?

  Actually slaying Moloch while you're buying a picture of Moloch. That's fantastic.

• 1:04:17David Hoffman?

  Yeah, wow. Good point. Good point. All right, Ryan, what are you excited about?

• 1:04:21Ryan Sean Adams?

  You know, this is really quick this week, but I'm super excited that we actually have tokens with cash flows this this bull run, right? So we saw on the the the block chart where we saw DeFi tokens with revenue over time. That's amazing. We just put out a piece, actually, by the time you listen to this yesterday, so on Thursday, Lucas Campbell from our team put together 14 different token metrics that you need to know when you are evaluating a token. I felt so much, David, in 2017, like,

• 1:04:53Ryan Sean Adams?

  like, we didn't earn it. We didn't earn the bull run. The the tokens that were pumping in price had nothing behind them, like, no substance. This time, I don't feel like that. We have a real decentralized finance economy with real cash flows, with real users. This is a big deal. And, you know, if if it's your first time in in the crypto bull run, if you weren't here in 2017, just know this is different. We didn't have this stuff in 2017. So I'm super excited about it. And this is something that Chris Berninski has talked about ever since I I read his crypto assets book in 2017, that valuations in this space will play out over like decades, will get better and better at it as an industry. And I'm definitely seeing a level up on how to value crypto assets this cycle that we didn't have in previous cycles.

• 1:05:42Ryan Sean Adams?

  So kind of geeky, kind of nerdy, whatever. But, look, it's it's what I'm excited about this week.

• 1:05:50David Hoffman?

  It's another theme of the Bankless Podcast that we keep on harping on is that being understood is extremely bullish. And when I hear Matt from Bitwise saying that investors can understand DeFi instantly, specifically because of live, real-time data that they can analyze and verify and reduce their career risk, where somebody's like, "Well, why did you invest in that DeFi token?" It's like, "Well, look at this live report of all the revenue that they're making in real time." Like, that's why I invested.

• 1:06:20Ryan Sean Adams?

  It's doing billions in volume.

• 1:06:22David Hoffman?

  It's doing billions in volume, right? And so like, the investability of this thing is so awesome. And yet, if you want to get access to like, what does it mean to get access to DeFi that gives you real-time data? Like, how do you get exposure to that? And the answer is either DPI or ETH, or it's just ETH, because Ethereum is the economy that enables the real-time reporting of valuation metrics.

• 1:06:47Ryan Sean Adams?

  Yep, absolutely. Well said. We're bringing in new cohorts into the space and everyone is learning about it. Meme of the week, David?

• 1:06:55David Hoffman?

  Meme of the week.

• 1:06:56Ryan Sean Adams?

  What is our meme of the week?

• 1:06:57David Hoffman?

  Favorite time of the week. The meme of the week is

• 1:07:00Ryan Sean Adams?

  Wolf of Wall Street.

• 1:07:01David Hoffman?

  A scene from Wolf of Wall Street where Jonah Hill is on the phone with his boss right after Leonardo DiCaprio tries to get him into whatever, whatever the, I can't remember the story. Anyways, he's on the phone with his boss saying, "Me quitting my job to work for the decentralized present and future." And then there's Ethereum looking over his shoulder, watching him quit his job. And then the caption is, "Hey, man, have you heard of this Ethereum thing? Something about sovereign finance and lots of memes. Anyways, I quit."

• 1:07:31Ryan Sean Adams?

  Is it possible, this is a great meme, but like, is it possible to actually quit your job and go work for Ethereum right now? Like, I know you and I are doing it, but, I mean, to be fair, we started like a year and a half ago or so. What are the opportunities now for people? Are there more opportunities or are there fewer?

• 1:07:50David Hoffman?

  There are, oh my god, there are so many opportunities. And I think that the most obvious opportunities are specifically in two realms. DeFi Protocol Treasuries, millions and millions and millions of dollars.

• 1:08:03Ryan Sean Adams?

  Hundreds of millions.

• 1:08:03David Hoffman?

  Hundreds of millions of dollars available for funding for anyone that can contribute value of any kind.

• 1:08:10Ryan Sean Adams?

  To a protocol, right? Like you have to, if you, if you have value that you can provide to a protocol, I guarantee a protocol will pay you for that value in some way.

• 1:08:19David Hoffman?

  Right. And, and that's what's so awesome about this is like, there's no more like credentialing. You don't need to go get a degree. You just need to show this protocol that you can contribute value. And so like all of this, like you have four years of education and two years of education after that. So you can, you know, give your credentials, like no, the, the communities, you're like, yo, that guy's doing good work. Pay that man some money. It's much more casual. It's much more just like buy the seat of the pants. And I think much more fun, much more freeing. And that's just DeFi protocols. The other side is NFTs, which is funding artists. We've talked about this a number of times on the bankless program. But funding artists and giving them vehicles to monetize their creativity and their labor. I think the design space for allowing creators to fund themselves with NFTs is just getting started.

• 1:09:04David Hoffman?

  And those are just those two things. You can carve your own path. I quit my job of, and my career path of trying to become a physical therapist. And, and I started just writing blogs for this company back in 2017. And that's just how it started. I just started creating. I just started producing something that people valued. And so if you don't know what to do, go and figure it out because like honestly, it's up to you. You can get it done. Anyone listening to this, you can be employed by Ethereum or an Ethereum protocol, or pick your blockchain of choice by the end of this bull market. And so if you want to, that opportunity is available to you. You just need to actually act on that.

• 1:09:43Ryan Sean Adams?

  Here's the other thing I would say is you could start this out as a side hustle, right? So you don't have to just like do the Jonah Hill thing and call your boss and tell him you quit, right? That's like, that's, it's a fun way to do it. It makes a great meme, but you don't have to. I mean, you could start using your spare time, your hobby time, your weekends, your moonlight hours, doing something for a protocol, getting involved in these communities and understanding actually what they need. Do they need more users? Is this marketing? Do they need more education materials? Do they need videos? Do they need like coding? Do they need some financial analysis? Any skill that you can bring to bear to help one of these protocols achieve its end goal

• 1:10:25Ryan Sean Adams?

  will be valued by the DeFi and crypto community and economy. And you don't have to go zero to 100 right away. Just start, just start doing something in the midnights in your hobby time. And that's a great place to, to, to even see if what you're producing provides value to the community first before you go all in.

• 1:10:44David Hoffman?

  A hundred million people employed by Ethereum by the end of the 2020s.

• 1:10:49Ryan Sean Adams?

  A hundred million?

• 1:10:50David Hoffman?

  A hundred million people by the end of the decade. Yeah.

• 1:10:53Ryan Sean Adams?

  Wow. There you go. A hundred million people.

• 1:10:56David Hoffman?

  Starting with the listeners.

• 1:10:58Ryan Sean Adams?

  Starting with the listeners, starting with the Bankless Nation, we're going to be in the Ethereum, in the crypto economy, not only buying the assets of this economy, but working for this economy. That feels pretty fun. We should do risk and disclaimers. Guys, ETH is risky, DeFi is risky, crypto is risky. None of what we said was financial advice today, but we are on the journey west. We're glad you're with us. Thanks for joining us on Bankless.