ROLLUP: Ledger Recovery Concerns | Ethereum Finality Issues

Bankless Weekly Rollup 3rd Week of May 2023 ------ 🚀 AIRDROP ALPHA 🚀 https://bankless.cc/Alpha ------ 🚀 Consensys Diligence Fuzzing https://bankless.cc/diligence-fuzzing-pod ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2 🦊METAMASK LEARN | HELPFUL WEB3 RESOURCE https://bankless.cc/MetaMask 👾STADER LABS | ETHX LIQUID STAKING https://bankless.cc/Stader ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum 🗣️TOKU | CRYPTO EMPLOYMENT SOLUTION https://bankless.cc/Toku 🎮IMMUTABLE | GAMING ECOSYSTEM https://bankless.cc/Immutable 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle ------ Topics Covered 0:00 Intro 2:55 MARKETS 5:00 ETH Staking Update https://www.theblock.co/data/on-chain-metrics/ethereum/cumulative-eth-deposited-to-beacon-chain-and-validators Monitor: https://validator-queue-monitoring.vercel.app/ 7:00 Macro Market Trends https://www.cnbc.com/2023/05/15/paul-tudor-jones-says-the-fed-is-done-raising-rates-stocks-to-finish-the-year-higher-from-here.html 11:20 Liquidity Drying Up https://twitter.com/ramahluwalia/status/1657924211770380290 https://www.youtube.com/watch?v=qbr8965IYfo&t=3830s https://www.youtube.com/watch?v=qbr8965IYfo&t=3830s 13:30 The Bore Market https://twitter.com/sassal0x/status/1656857007385894912 14:50 The Promise of Crypto https://twitter.com/RyanSAdams/status/1659177889428914177 16:30 Layer Two Activity https://l2beat.com/scaling/tvl 21:30 What Happened to Ethereum? https://twitter.com/0x_Osprey/status/1659019122548830209 24:40 Client Diversity https://clientdiversity.org/#why 27:15 Not a Monolith https://twitter.com/TrustlessState/status/1657316158729494528 29:30 Block Reorgs https://www.youtube.com/watch?v=QkMjcqVEARc 33:15 Is Ledger Safe? https://www.ledger.com/recover 36:30 Ledger Comms https://twitter.com/Ledger_Support/status/1658892462440456192 40:10 Canceling Ledger https://twitter.com/oklahodl1/status/1658580508320620546 https://twitter.com/0xfoobar/status/1658460603831263232 https://twitter.com/Mudit__Gupta/status/1658368265687556097 https://twitter.com/hosseeb/status/1658740433361702913 43:25 Did They Do Anything Wrong? https://twitter.com/0xfoobar/status/1658965272416452609 49:00 Redundancy https://twitter.com/TrustlessState/status/1658788949165322242 51:00 Coinbase vs the SEC https://twitter.com/MetaLawMan/status/1656737447756038177 53:30 Gary Speaks https://twitter.com/ROCKilroy/status/1658206561125146630?s=20 55:00 Summary https://twitter.com/milesjennings/status/1658515975170555904 58:00 Nike Dot Swoosh https://www.swoosh.nike/location 1:01:10 Optimism Bedrock https://twitter.com/optimismFND/status/1658202279147601921 Polynya: https://twitter.com/apolynya/status/1658312190577836032 1:04:05 Worldcoin OP https://worldcoin.org/blog/announcements/worldcoin-commits-optimism-superchain-vision-ahead-mainnet-launch 1:04:55 Lido v2 https://twitter.com/LidoFinance/status/1658195242149879824 1:05:20 PayPal MetaMask https://metamask.io/news/latest/metamask-and-paypal-all-you-need-to-know-about-buying-eth/ 1:06:30 On-Chain Cease & Desist https://twitter.com/zachxbt/status/1659078481228058624 1:08:00 DRC-20s on Dogecoin https://bitinfocharts.com/comparison/transactions-btc-ltc-doge.html#3m Doge Maxis: https://twitter.com/938433911/status/1657961759322562560 1:09:45 EU MiCA Just Passed https://www.consilium.europa.eu/en/press/press-releases/2023/05/16/digital-finance-council-adopts-new-rules-on-markets-in-crypto-assets-mica/ 1:11:00 Do Kwon Bail https://www.theblock.co/post/230575/do-kwon-bail 1:12:15 Sam Altman Congress https://twitter.com/BanklessHQ/status/1658498249727307776 1:19:00 Questions from the Nation 1:25:00 David’s Shirt https://twitter.com/TrustlessState/status/1659182411467350016 1:26:40 Abandoning Wallets https://twitter.com/0xDesigner/status/1658851890803744768 1:28:00 What David’s Bullish On https://imgur.com/vlEaQMG 1:29:25 Permissionless Spaces 1:30:15 What Ryan’s Bullish On https://twitter.com/RyanSAdams/status/1658660759352614914 https://twitter.com/MetaVsGaming/status/1658687862269771777 1:36:40 MEME of the Week https://twitter.com/MinisterOfNFTs/status/1657793552808656900 https://twitter.com/balajis/status/1657879440146444288 1:37:15 Moment of Zen https://twitter.com/linusekenstam/status/1657083568231702528 ---- 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://www.bankless.com/disclosures

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

• 0:00David Hoffman?

  Is your Ledger safe or should you throw it down the toilet? Ethereum's got a finality outage. Is it safe or should you also throw it down the toilet? You don't know?

• 0:12Ryan Sean Adams?

  Bankless Nation, it is the third Friday in May and it's morning time on Friday or afternoon time.

• 0:18David Hoffman?

  Actually, it's not. It is 4:40 PM.

• 0:22Ryan Sean Adams?

  All right. Well, it's morning for me, David, and I can't wait to have you on the East Coast, but you're still in Montenegro. But okay, this intro is going long. We've got something to tell them. It's time for the what?

• 0:31David Hoffman?

  Bankless Friday Weekly Rollup, where we cover the entire weekly news and crypto, which is always an ambitious endeavor, yet we persevere nonetheless into the frontier. It's going to be a long one today, so I'm speaking fast.

• 0:40Ryan Sean Adams?

  All right, that's good. Let's keep, let's keep up that pace, David. Topics of the week. Did we just get rugged by Ledger, the hardware wallet? Or is this just mob season on Twitter? Is this Ledger getting canceled? That's number one. What else are we covering this week?

• 0:53David Hoffman?

  Ethereum's non-finality event. Is non-finality an event? Did Ethereum break or is it working as intended? We'll talk about that and more. And Gary Gensler continues to be in the hot seat. Nice. Bedrock, WorldCoin, Dogecoin, plenty of things to talk about there. But bigly, most bigly, Nike's dot swoosh program, a program that no one is paying attention to, which might be the coolest Web3 metaverse thingy thingy that got released that everyone else is just ignoring because we're busy canceling each other on Twitter.

• 1:25Ryan Sean Adams?

  That was, it was cancel week for sure. Maybe some of it justified, though. We'll get into, we'll get into the story. Definitely the Bankless cancel ship was justified a little bit.

• 1:34David Hoffman?

  Yeah, fuck those guys.

• 1:36Ryan Sean Adams?

  All right. Let's, before we get in, let's talk about fuzzing. Do you want to spend a minute talking about our friends and sponsors over at Consensus? Because they want you to know you should be fuzzing right now if you are not fuzzing. David, what does this mean? What am I talking about?

• 1:51David Hoffman?

  So Consensus has a new diligence tool for all the people who write code. So it's an audit-grade security tool that serves as an automated way to find code vulnerabilities. If you know what fuzzing is, Then this is for you. If you don't know what fuzzing is, then this isn't for you. And so if you are working to write code without having to host your own infrastructure, no writing of complex tests, blah, blah, blah, blah. Diligence fuzzing is a system to test your code that is built by ConsenSys. So you can layer on additional security in addition to your regular audit. You can also use ConsenSys's diligence fuzzing. So this is ConsenSys's message to you. Go fuzz yourself.

• 2:35Ryan Sean Adams?

  Did you just come up with that on the fly?

• 2:36David Hoffman?

  I did, yeah. So in order to go fuzz yourself and your code, there's a link in the show notes.

• 2:42Ryan Sean Adams?

  You could fuzz for free, too. It's free fuzzing.

• 2:46David Hoffman?

  You can do it by yourself.

• 2:49Ryan Sean Adams?

  Fuzzing all by yourself for free. Can you beat that? Well, let's get to the markets. Enough with this fuzzing talk, David. What are the markets telling us this week, starting with Bitcoin?

• 2:58David Hoffman?

  It's flat. 27,300. Start of the week, end of the week. It's flat.

• 3:03Ryan Sean Adams?

  You did. You put the same number twice. I'm looking. I'm looking at the agenda here, which I print out, by the way. Every week I print out so I can look down on paper. 27,300 is the start and you have the current 27,300.

• 3:18David Hoffman?

  Those are the same numbers.

• 3:19Ryan Sean Adams?

  It can't be. I know those are the same, but like, really?

• 3:23David Hoffman?

  I mean, give or take a few dollars.

• 3:25Ryan Sean Adams?

  But you just rounded it, huh? You just like, it's flat.

• 3:28David Hoffman?

  How do you know?

• 3:29Ryan Sean Adams?

  It's that season.

• 3:29David Hoffman?

  You can check my math.

• 3:30Ryan Sean Adams?

  I don't know. I'm just trusting you. Every week I don't even look at. I barely look at this, even though the charts are beautiful. Thank you Kraken Pro for these charts. I barely look at this. I just hear you tell me numbers each week. What is the ETH price?

• 3:42David Hoffman?

  1820. It was 1820. Seven days ago. It's 1820 today. It's a flat week.

• 3:47Ryan Sean Adams?

  You know what? Something suspicious about these numbers. You're just copy tasting, I think. ETH Bitcoin, the ratio?

• 3:53David Hoffman?

  Flat.

• 3:55Ryan Sean Adams?

  Are you serious?

• 3:56David Hoffman?

  Of course.

• 3:57Ryan Sean Adams?

  Why do we even do markets anymore?

• 3:59David Hoffman?

  I know.

• 3:59Ryan Sean Adams?

  Okay, whatever.

• 4:00David Hoffman?

  And Bankless Nation, please open up your price checker apps, open up your Kraken app on your phone and check the price currently because it might not be flat, who knows?

• 4:08Ryan Sean Adams?

  Yeah, verify this for me with David.

• 4:11David Hoffman?

  Don't trust.

• 4:12Ryan Sean Adams?

  I'm sure this is for most Bankless listeners, this is the first time they'll be checking prices this week, by the way.

• 4:17David Hoffman?

  100%.

• 4:17Ryan Sean Adams?

  They just wait until we prompt them to check prices.

• 4:20David Hoffman?

  People actually listen to the Bankless Podcast in order to hear about the crypto prices.

• 4:24Ryan Sean Adams?

  I think so.

• 4:25David Hoffman?

  They don't know the prices until we tell them.

• 4:27Ryan Sean Adams?

  It's a global source of truth for that. We'll tell them the market cap of crypto then, while we're at it.

• 4:32David Hoffman?

  Coming in at a whopping $1.18 trillion, so I think we are up $60 billion from last week, marginally up. So some shitcoins got pumped. If Bitcoin is flat, Ether is flat, but the total crypto market cap is up.

• 4:46Ryan Sean Adams?

  David, you can't, you can't call the rest, you can't call everything non-Ether and non-Bitcoin shitcoins, David.

• 4:53David Hoffman?

  I think I just did.

• 4:55Ryan Sean Adams?

  I know, and I feel like I should cancel you for that, for saying that.

• 4:59David Hoffman?

  Oh, God.

• 5:01Ryan Sean Adams?

  Beacon Chain, ETH supply.

• 5:03David Hoffman?

  It's up.

• 5:04Ryan Sean Adams?

  All-time highs.

• 5:04David Hoffman?

  It's up.

• 5:06Ryan Sean Adams?

  The same flat.

• 5:07David Hoffman?

  No, it's up.

• 5:08Ryan Sean Adams?

  We're continuing to go up. Okay, what is, so this chart is all-time highs, how much ETH do we have deposited?

• 5:13David Hoffman?

  18.5 million Ether. Yeah, so if you zoom in real close, I think this is one of those charts where you can click and drag and it'll automatically zoom in and we can get real close.

• 5:24Ryan Sean Adams?

  I can get you the month when you settle for that.

• 5:26David Hoffman?

  Yeah, 18.5 million Ether is deposited onto the Beacon Chain. It is going up faster than it has ever gone up before.

• 5:35Ryan Sean Adams?

  Man.

• 5:35David Hoffman?

  Which is pretty cool.

• 5:36Ryan Sean Adams?

  A lot of people were wrong about this. They said, uh, post-withdrawals, it would be going down and it's not going down, it's going back up.

• 5:42David Hoffman?

  Well, it went down for not even two weeks, it went down for like 10 days. So here's a cool new website, I mean, actually it's really boring, it's actually a very boring website, but you still.

• 5:51Ryan Sean Adams?

  It's not.

• 5:52David Hoffman?

  It is.

• 5:53Ryan Sean Adams?

  The information is cool.

• 5:55David Hoffman?

  There are five lines of text here.

• 5:56Ryan Sean Adams?

  The most boring website I've ever seen.

• 5:57David Hoffman?

  Yeah, so this is Ethereum 2.0 Validator Q, Validator hyphen Q hyphen monitoring, God, I'm not even going to read that, there's a link in the show notes. It basically tells you two things.

• 6:05Ryan Sean Adams?

  This website sucks, honestly.

• 6:07David Hoffman?

  Sorry to ever made this website. It's supremely useful. It is basically a tug of war between the depositors and the validators. And it tells you who is winning that tug of war. So pending validators on the entry queue is at 55,000 pending validators. 55,000 pending. If you want to make a new validator, it will take you 731 hours to get through that line. If you are a validator who would like to exit and stop being a validator, it will take you, drumroll, four minutes.

• 6:40Ryan Sean Adams?

  Four minutes?

• 6:41David Hoffman?

  Four minutes to exit.

• 6:42Ryan Sean Adams?

  If I want to leave, it only takes four minutes. But if I want to get in, it's like the best nightclub ever, man.

• 6:49David Hoffman?

  Yes.

• 6:49Ryan Sean Adams?

  It's just the line just keeps getting longer.

• 6:51David Hoffman?

  731 hours to get into the nightclub and four minutes to exit. Man, people really want to be on the beacon chain.

• 6:57Ryan Sean Adams?

  They totally do. Wow. Well, congrats Ethereum for that. All right, let's talk about some other market news. David, I think the big question this week in the markets is where are we in the cycle? You just kept talking about flat and I feel like that's a pretty good description. But let's start at the highest level. What is the Fed doing this week? And can the Fed actually declare victory on their interest rate rises? And are we going to stop doing that? This is Paul Tudor Jones, who is a billionaire investor, manages a hedge fund, is someone the traditional finance markets respect on that question. Here he is on CNBC. I want to know what you think about this, David. Here, I'm going to play it.

• 7:39Speaker 02

  I actually want you to react a little bit to this Austin Goolsbee interview and some of his comments. I'm curious where you think interest rates will go, should be. What do you think?

• 7:51Speaker 03

  I think they've done hiking.

• 7:55Speaker 03

  I'm so glad I don't have his job because listening to these guys try to not say what they really want to say and what they really think.

• 8:02Speaker 02

  What do you think he really wants to say?

• 8:04Speaker 03

  All he wants to say, we're done. We've gone too far and enough's enough. That's, that's what he wants to say. He just can't say that because he's new on, he's new on the board and he has to follow the chairman, but that's what he wants to say.

• 8:16Speaker 02

  And what do you want to say?

• 8:18Speaker 03

  I think he's right. I think they're done.

• 8:20Speaker 02

  You think they are done?

• 8:21Speaker 03

  Definitely, I think they're done. I mean, they could.

• 8:27Speaker 03

  Probably declare victory now because if you look at CPI, it's been declining 12 straight months, 12 straight months. That's never happened before in history. So there's a strong downward arc to inflation at the moment. Two-year breakevens are under 2%. Clearly, they have to be governed by trailing 12-month inflation. But if we get to the here and now, you can see that inflation, to a great extent, has been rung out of the market. Now, does that mean that we're getting ready to immediately cut? No. But you've got to think of interest rates a bit like chemo. So chemo, chemotherapy, chemo

• 9:08Speaker 03

  is poison. Interest rates with the kind of amount of sector-wide debt that we have between private, consumer, and the government, we're probably at levels where we've typically hit a recession in the past because of the interest tax on the economy. So we're at a level that historically has really slowed the economy and historically has kicked off a recession. I think it's just a question of waiting for...

• 9:39Ryan Sean Adams?

  He goes on, David, and then he talks about equity markets, and he says this, on equity prices, "I think they're going to continue to go up this year, but I'm not rampantly bullish because I think it'll be a slow grind." But he thinks equities end the year higher than they began the year. So what's your take on all of this? Is, can the Fed declare victory? Are they done? What do you think about Paul Tudor Jones and his takes on this market?

• 10:05David Hoffman?

  Well, first and foremost, Paul Tudor Jones is way smarter than me and way more informed. So take that, take all of my further words with that. He said CPI is down for 12 months in a row? Yes. And core CPI is not. And that is the bigger deal and the more important one. And that is such an obvious fact that I'm sure Paul Tudor Jones has something to say about that response. However, to say that, like, oh, yeah, inflation, 12 months in a row, it's down. Like, that's not the whole story. The issue...

• 10:35Ryan Sean Adams?

  It was also up a... A lot.

• 10:37David Hoffman?

  Yeah.

• 10:37Ryan Sean Adams?

  Right?

• 10:38David Hoffman?

  And so the last time I checked, which was not too long ago, it was six weeks ago. Core CPI has not had not reversed. And that is the bigger story that I've thought. And so in order to have a more informed take, I would need to go back to the core CPI numbers and compare that to what Paul Tudor Jones is saying. But Paul Tudor Jones is like smarter than me about this.

• 10:59Ryan Sean Adams?

  Interest to high interest rates as as chemo. And I guess that means like debt is like cancer or like, I don't know, meme stock markets or like.

• 11:07David Hoffman?

  Malinformed investment, poor capital allocation is in is cancer. Yeah.

• 11:11Ryan Sean Adams?

  That is the cancer you have to cut out of the system. Anyway, the Fed is done raising rates now is the message. I think he might be right on that core message. But that brings us to the crypto markets. And this is something we talked about last week, David. And maybe we want to put more flesh on this because last week, a theme was liquidity is dry. It's a desert out there because liquidity is drying out in crypto markets. This is Ram, who's been a previous guest on the Bankless Podcast now a couple of times, who has some great insight on this, on liquidity and crypto. What's he telling us?

• 11:43David Hoffman?

  So I believe Ram is actually following up with what we were saying last week in the market section, because in our in our Telegram channel with him, he was like, hey, really good points about liquidity, which I usually don't pay good take. I don't have good takes about market macro markets. Except that with that one, I was like, okay, I think I'm right about this one. And then he comes in and follows up. And so here's what he says. Crypto markets liquidity has dried up significantly. These are the consequences of a lack of a crypto bank settlement layer, Silvergate and Signature. Market makers need a way to settle instantly with counterparties. So here's the part that we missed last week. Silvergate and Signature had SEN, SEN and Signet, their interbank instant settlement layer between banks that market makers would use.

• 12:25David Hoffman?

  And so in crypto, the problem was seemingly solved with SEN and Signet. A market maker can enjoy instant settlement. One benefit is not having to type capital on many exchanges or waiting several days for funds to clear. Lack of instant settlement hurts capital efficiency. The banks intermediate these transactions, they confirm tractions and validate sufficient funds, just like the blockchain. And so he's what he's saying is that, yes. All the reasons that we talked about last week are reasons why there's liquidity leaving the market and also the specific products that these crypto banks made in order to satisfy crypto market makers called Signet and Cent and Cent transfers. And so these specific products are missing now from the market because choke point choked them.

• 13:09Ryan Sean Adams?

  Yeah, absolutely. I mean, the settlement infrastructure for crypto was operating behind the scenes, almost like a private side chain or a private blockchain and it was settling all these transactions. And this is no longer the case. Yeah, we had Ram on the podcast to talk more about this and I would encourage folks to go listen to that if you already haven't about the US banking system and the crisis that we've seen recently. So this is the part of the market, David, we've been calling the apathy market. We've gone from bear market where that was obvious to bore market, right? From bear to bore market. And this is how Anthony Sisano puts it. I love how the entire market has been bleeding nonstop for like a week now and crypto Twitter is pretty much dead silent about it. Clearest sign I've seen so far that we're now firmly in the time

• 13:54Ryan Sean Adams?

  based capitulation part of the bear market. Time based capitulation, that's the part of the bear market we're in, says Anthony. What does he mean by that?

• 14:04David Hoffman?

  He means that now it's boring. And so time based capitulation, so the excitement is over. Even when like prices are going down and like there's blood on the streets, at least it's still exciting. So Anthony's saying is like, well, now like we've bled all of our blood, like we got nothing left to bleed. All the excitement has left the market. Now, now we just have to wait this one out.

• 14:26Ryan Sean Adams?

  That term capitulation, though, he means like people give up in the bore market, don't they? They capitulate. They're like, ah, it's not moving. Like, it's not going up. It's not going, it's going to go down forever.

• 14:38David Hoffman?

  The number's not even going down. If it was going down, it'd be exciting. Now it's just flat.

• 14:43Ryan Sean Adams?

  They sell. And so they sell, they capitulate in this type of market. That's the market phase that we're in right now. As if on cue, David, I just saw this this morning from The Economist. Here's the headline. I've read the whole story, but it's kind of summarized in the headline. The Crypto has not lived up to its initial excitement. A crypto finance revolution looks further off than ever from The Economist.

• 15:04David Hoffman?

  That's a bearish sentiment headline.

• 15:07Ryan Sean Adams?

  This is the apathy market headline. You're going to see a lot of these in the weeks and the months to come. And it's up to you if you want to do the time-based capitulation part, or you want to hold through this to the other side. But I got to tell you, man, there's nothing new under the sun. We've done this a few times now in crypto. Like, I've seen these headlines before.

• 15:26David Hoffman?

  So you know what this means to me?

• 15:28Ryan Sean Adams?

  What?

• 15:29David Hoffman?

  The bear market is half over.

• 15:31Ryan Sean Adams?

  I totally agree with you.

• 15:33David Hoffman?

  Yeah. I totally agree with you more. We are now in 2019. 2018 is over, 2019 has started. The true convicted people will watch the innovation happen and learn to be excited about that, even if it doesn't mean the prices are going to do anything. And they will learn to be excited about that. And then the prices will return and then the bear market or bull market will start. And then you actually won't. If you were like me, you won't know what you're really in for with a full bear market, starting from the low, low prices that we're currently at. Anyways, that's how it happened last time.

• 16:01Ryan Sean Adams?

  Happy 2019, everyone.

• 16:03David Hoffman?

  Happy 2019.

• 16:04Ryan Sean Adams?

  It's just 2019, but it's 10x, right? I remember like 2019, ETH was hanging in the 100 to like 250 range forever.

• 16:12David Hoffman?

  Over and over and over.

• 16:13Ryan Sean Adams?

  Well, what are we right now? What is the equivalent, right? Like, just, you know, 10x that 1,000 to 2,000? That's like 100 to 200. Like, it's so crazy, dude. It's like...

• 16:24David Hoffman?

  It's out of zero.

• 16:25Ryan Sean Adams?

  The crypto gods are giving us yet another opportunity, my friend. If you're here, you probably see it. This is a chart that I do like looking at, though. Total locked value in layer twos. This is on layer two beat, of course. This hasn't changed a ton. Of course, we've got Arbitrum number one, 5.87 billion in optimism coming in. But look at this activity chart. So this is the number of transactions.

• 16:48David Hoffman?

  Yo, look at that.

• 16:49Ryan Sean Adams?

  ZK Sync Era, all right? Immutable X.

• 16:54David Hoffman?

  Wow. We got... That's actually the first time we've seen chains be equivalent to Ethereum throughput. That's pretty cool.

• 17:02Ryan Sean Adams?

  Yeah, Immutable X, for people who can't see this on screen, Immutable X, number one, with a seven day increase of 250% and transaction throughput higher than Ethereum mainnet. ZK Sync up almost 200% as well over the last seven days, getting to equivalency of Ethereum mainnet transactions per second.

• 17:23David Hoffman?

  And if people are like, I thought Layer 2s are supposed to be faster than Ethereum. Ethereum Layer 1 is clogged. It is as fast as it's ever going to go.

• 17:33Ryan Sean Adams?

  Yeah.

• 17:34David Hoffman?

  Immutable X, ZK Sync, these are ZK rollups. These are not clogged. People just aren't using them enough.

• 17:39Ryan Sean Adams?

  Yeah.

• 17:40David Hoffman?

  But we have equivalent amount of usage of these things as Ethereum. So, it's cool. And then like, if you aggregate it all together, which is this red graph, in aggregate, man, we have not been reporting on this. I think the last time we talked about this, the scaling factor of combined Layer 2s was like 2.4. We're up to 3.7. So Layer 2s are doing 3.7 times as much economic activity. It's an all time high in economic activity on Layer 2s. Economic activity in transactions per second, not total value nuances, but still.

• 18:13Ryan Sean Adams?

  Yes. Economic activity of transactions.

• 18:17David Hoffman?

  Yes, transaction, yeah, transaction volume.

• 18:20Ryan Sean Adams?

  And what was interesting to me is, these are both ZK. This is both ZK technology, not optimistic technology. Immutable and ZK are. So, good news. All right. We had a lot more to talk about, David. What's coming up?

• 18:31David Hoffman?

  Coming up, we got to talk about the big news of the week. Is your ledger safe? Or should you throw it down the toilet? Ethereum's got a finality outage. Is it safe? Or should you also throw it down the toilet? We don't know. Bedrock on Optimism's coming to mainnet. Say hello to DRC 20s. You know what a DRC 20 is, Ryan?

• 18:50Ryan Sean Adams?

  Dr. 20? Okay, I don't know what this is, no.

• 18:53David Hoffman?

  I don't know. Yeah, well, I'm about to tell you. So, we're going to get to all of this and more as soon as we talk to some of these fantastic sponsors that make this show possible, especially Kraken. I prefer exchange for 2023. If you do not have an account with Kraken, consider getting one in the show notes. Here we go. Kraken Pro has easily become the best crypto trading platform in the industry. The place I use to check the charts and the crypto prices, even when I'm not looking to place a trade. On Kraken Pro, you'll have access to advanced charting tools, real-time market data, and lightning-fast trade execution, all inside their spiffy new modular interface. Kraken's new customizable modular layout lets you tailor your trading experience to suit your needs. Pick and choose your favorite modules and place them anywhere you want in your screen. With Kraken Pro, you have that power. Whether you are a seasoned pro or just starting out,

• 19:36David Hoffman?

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• 20:21David Hoffman?

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• 21:06David Hoffman?

  Stater is actively building integrations across the Ethereum ecosystem to bring the same great DeFi utility to the EtherX token, with $1 million of SD token rewards in DeFi for its ETHX users. All of Stater's smart contracts are audited by at least two independent cybersecurity auditors, and have multimillion-dollar bug bounties currently live. So, go to staterlabs.com/eth to sign up and get access to the Stater staking protocol.

• 21:30Ryan Sean Adams?

  What happened to Ethereum last week? David, after we recorded last week's rollup, there was a hiccup. And then there was a second one on the Ethereum network. What happened to Ethereum? Can you give us the details?

• 21:43David Hoffman?

  Yeah, so Ethereum blocks stopped finalizing for about 25 minutes. And then the second non-finality event lasted for about an over an hour. And so what does finality mean? Blocks are still processed. Transactions go into blocks. Blocks are still sent around, but they are not being finalized. As in, they are not having the last line of security locking in those blocks into the chain. So blocks are still being added to the chain, but they are not being permanently embedded under the full weight of proof of stake yet. And so this is, this is an interesting nuance. And so we did a show with Preston Van Loon and Terrence from Prismatic that will be

• 22:23David Hoffman?

  able to explain this deeper, but just at a high level, every single validator does attestations. And so there was a large amount of attestations due to the increased number of validators, because so many new stakers are coming online. There is increased requirements between bandwidth and also computation. And so a bunch of attestations are being sent around and that overloaded a number of validators, excuse me, a number of clients. And so TeKu and Prism released software updates pretty quickly that strengthened and fixed this part. And then all of a sudden, we were able to return to finality. And then we had a unique lesson learned about how Ethereum works and a contingency patched. And so that's the TLDR. How would you add to that?

• 23:06Ryan Sean Adams?

  I think, I think that's a great, so Ethereum didn't go down. This wasn't an outage, as we've seen with other networks like Solana, which was a straight outage. Transactions couldn't move forward for like hours at a time in some cases. This was a temporary halting of finality, which is

• 23:26David Hoffman?

  I wouldn't even use the word halting if we wanted to be super precise. We did not achieve finality, but nothing is halted.

• 23:33Ryan Sean Adams?

  Right. And so some people were saying that Ethereum broke in this case.

• 23:38David Hoffman?

  Some people. And some people.

• 23:42Ryan Sean Adams?

  Can you believe it?

• 23:43David Hoffman?

  Can you believe it?

• 23:44Ryan Sean Adams?

  Even tweeted that out as a headline and then explained it in the details of the body of the tweet. But we're not precise about that. But Ethereum didn't break in that sense. In fact, this is kind of a demonstration of its resilience. If you want all the details, go to the episode that we just did with Preston and Terrence. But I think this showcases the value of a multi-client architecture for one.

• 24:08David Hoffman?

  100%. Exactly. Okay, so Prism and Taku had this problem. Lighthouse, no problems whatsoever. So Lighthouse, like, I don't know, Ethereum's working fine for me and I'm doing my thing. And so Ethereum's just gonna keep on going because I'm gonna put Ethereum on my shoulders.

• 24:22Ryan Sean Adams?

  It's also, it also demonstrates kind of the blend of proof of stake that Ethereum is, which is kind of the priority of liveness. So Ethereum doesn't go, it can be delayed, but it does not go down in the same way that other chains go down when they prioritize on safety with proof of stake. So David, let's take a peek at client. I didn't know there's an entire page about this, but.

• 24:45David Hoffman?

  There's an entire page about everything in Ethereum.

• 24:48Ryan Sean Adams?

  All right, so what are we looking at here? This looks like some charts on distribution of two types of clients, consensus clients and execution clients. How would you explain this?

• 24:56David Hoffman?

  Yeah, okay, so two kinds of clients. One is consensus clients, AKA beacon chain clients, and then execution, which is the actual processing of transactions. Nuance there, but also really important. Consensus clients is the beacon chain. So we got Lighthouse, Prism, Taku, Nimbus, Loadstar. These are what we previously called ETH2 clients. And so Lighthouse and Prism equally have about 38%, followed by Taku with 16%, followed by Nimbus. And so it was Prism and Taku that had the shared bug. And so that's actually one of the unique properties about a non-finality event. When a non-finality event happens, you actually know that it is a bug that is shared by multiple clients, which is a serious thing. And that is why this is an event, is because there is one bug that multiple clients had. So it showed up in Ethereum.

• 25:41David Hoffman?

  If this was just one client, and if, say, it was like Nimbus at 6.5% and Nimbus had a catastrophic client that just broke every single node, you wouldn't notice it. Not only would you not notice it, you would still actually get finality because Nimbus is only at 6.5%. At Lighthouse, if Lighthouse, if all Lighthouse clients went down.

• 26:01David Hoffman?

  You would not achieve finality because it would get to below 66%. And so because Lighthouse has 38.2% of all nodes, Lighthouse has enough clients that we would get below that 2/3 threshold. And so Prism at 37 and Takeu had this bug, but Lighthouse and the other clients held the system up. And so this is the importance of client diversity. And also, again, why, when there's one bug in multiple clients, that is when client teams wake up and start fixing the problem immediately, which is what Preston and Terrence and other people across the client teams did. Thank you for your service. And so this is just a quick lesson in client diversity.

• 26:40David Hoffman?

  And while multiple clients had the bug, call it a bug, the rest of the clients kept Ethereum up. So like, think of it like Atlas holding up the world, right? And every single client is an arm and the strength of the arm is related to the share of nodes that they have. How's that for an explanation?

• 27:01Ryan Sean Adams?

  Multiple armed Atlas.

• 27:02David Hoffman?

  Yeah.

• 27:03Ryan Sean Adams?

  Totally.

• 27:04David Hoffman?

  And the cool thing is, building a new arm is permissionless. So you can always build a new arm because it's

• 27:08Ryan Sean Adams?

  You want to build a new arm?

• 27:10David Hoffman?

  No, I'd rather talk about people who build arms.

• 27:12Ryan Sean Adams?

  Yeah, it seems way harder to actually build arm. This is a take from David Hoffman. Ethereum, in quotes, is a composition of diverse and distributed components, none of which are individually critical to Ethereum. Components can and will fail, but the chain will continue. This downtime non-event illustrates this perfectly. Single client systems are weak and fragile. Fast systems cannot hold a distributed set of components since more components require slower systems to maintain consensus. Fast change minimize components and therefore maximize fragility. I think you are saying here, David, that this event showcases the design decisions that Ethereum has made, which is to maximize liveness, to maximize resilience, to not go

• 27:56Ryan Sean Adams?

  down at the sacrifice of some other things, right? Ethereum is not the fastest layer one

• 28:01David Hoffman?

  It's a slow chain.

• 28:02Ryan Sean Adams?

  From a transactions per second perspective. It is a slow chain. Tell me more about this.

• 28:07David Hoffman?

  Yeah, so the slowness of Ethereum, the decentralized nature of Ethereum allows for more components, more clients to be a part of the network. And the idea here is that Ethereum is designed, intentionally designed, so that

• 28:22David Hoffman?

  Components will fail and Ethereum will continue because Ethereum is not one thing. What is Ethereum is a question, not an answer. And so if you go back to the client, the client diversity page, like what is Ethereum? Well, it's 38% Lighthouse, it's 37% Prism, it's 16% Tequ, and those numbers are in flux. And there can be other nodes that come online or other valid clients that come online. And so Ethereum as a system just needs a majority of these things to work. And even if a majority of these things don't work, that actually doesn't take down Ethereum because it only takes down one component of Ethereum, which is finality. That's only the cherry on top of what makes a blockchain a blockchain.

• 29:04David Hoffman?

  And so like these considerations have been deeply considered by the ETH researchers out there. And so the actual fact that this happened and Ethereum didn't stop and then also naturally recovered quickly, along with the help of some superstar client teams, it just shows the resiliency of the system at large.

• 29:24Ryan Sean Adams?

  This is a question from the Bankless Discord from alexrow.eth that I think is relevant here. "In light of Ethereum recently," in quotes, "breaking," is this too soon? "Can you explain block reorgs? It sounds like a reorg could cause chaos, but each block producer susceptible to it for two epochs, I believe. Is this not a huge risk? Can you explain block reorgs in the context of this?"

• 29:45David Hoffman?

  Yeah, so blockchains are a chain of blocks that go one by one by one. And sometimes, due to the construction of a blockchain, we pick a new header. And so maybe two or three blocks are added to the chain. And then actually, because of the mechanics of the chain, it goes backwards like three blocks for whatever reason. This happens in Bitcoin every now and then, like not too long ago, there was like, I think like a 10 Bitcoin block reorg, if I'm not mistaken, maybe not that much. But the idea is it's possible. And so the joke here is that like, everyone was freaking out about Ethereum not having finality for like over a little bit over an hour. Do you know when the last time Bitcoin has had finality, Ryan?

• 30:22Ryan Sean Adams?

  No, I don't.

• 30:23David Hoffman?

  13 years ago, because Bitcoin doesn't get, Bitcoin doesn't get finality.

• 30:28Ryan Sean Adams?

  Yeah, it doesn't, it doesn't get like deterministic.

• 30:30David Hoffman?

  It doesn't get deterministic.

• 30:31Ryan Sean Adams?

  It's like economic weight probabilistic finality, of course.

• 30:35David Hoffman?

  Right. So like rolling back the Bitcoin blockchain back to block zero.

• 30:39Ryan Sean Adams?

  Costs a lot of money.

• 30:40David Hoffman?

  Is technically possible and within the rules of the Bitcoin system, it just costs a lot. Ethereum, because of the innovations of proof of stake achieves finality in six minutes. And then if you want to go backwards in time, more than six minutes, it takes, you are provably going to slash two thirds of all staked Ether. In the event of non-finality, this is when there is susceptibility to block reorgs. And so that is the risk here. That is, this is why this is important because we are no longer having our massive wall of capital slashing to protect a reorg event. And so while there are other penalties, there's not like the big penalty.

• 31:20David Hoffman?

  So it is a risk and this is why like when, when Preston and others saw that Ethereum mainnet wasn't having finality that like, they didn't just say, oh, okay, we'll just wait. Like, no, they got up and fixed the problem. But that's because Ethereum has a culture of maximum security. And so, yeah, the risk for a reorg doesn't just, there's more and more nuances there.

• 31:42Ryan Sean Adams?

  I think, one other thing I would say is sometime, it can sound like without Terrence and

• 31:50Ryan Sean Adams?

  Preston waking up or client teams wake you up and fixing the problem, that Ethereum would never have finalized. It still would have finalized.

• 31:57David Hoffman?

  It still would have finalized.

• 31:58Ryan Sean Adams?

  Like, that's the point. What would have happened is these client, this client distribution would have changed. A whole bunch of like client validators would have switched over to Lighthouse.

• 32:07David Hoffman?

  Right.

• 32:08Ryan Sean Adams?

  And then network would have rolled on. So this was not a case where, this was reliant on the client devs to like pop up in the, in the middle of their day and like wake up from their like naps. Preston was literally almost going like for a nap at the time and like fix it. It would have resolved itself as well. They just restored the resilience back to the network.

• 32:26David Hoffman?

  They did it faster. So when parts of Ethereum are not doing their job, they get penalized. There's like producing an invalid block and then you get slashed and that's the big one. But if you're not also doing your job, you get penalized in a minor way. And the idea is like as soon as, and this is actually did start to happen. When there's not, when there isn't finality for enough amount of time. These sources of non-finality start to get penalized marginally and then a little bit more and then a little bit more. And then eventually they get penalized so much that the actual, the network starts to return to consensus. Because the people that are producing, helping produce finality are not getting penalized. And so the, the system is naturally finding an equilibrium because that is what a good crypto economic system does. There's much better explanation if you just listen to the podcast.

• 33:11Ryan Sean Adams?

  There it is. It's right here. It's right here, guys. If you want to use this apathy market to level up on your Ethereum knowledge, it's a good time to do that. David, speaking of level ups, Ledger Recover, all right? Was this a level up for Ledger or was this a big mistake? The question on people's minds is, is Ledger safe this week? That, that is the hardware device that we're talking about. And give us the context for this because it all started when Ledger decided to announce a new product called Ledger Recover. Take us there.

• 33:44David Hoffman?

  So Ledger introduced a new product called Ledger Recover, which lets you recover your seed phrase using your ID. Which for the normies of the world was probably they're like, nice, great, love that. That's what I'm used to. If I'm, if my bank account, like I can't access it, I'll just show them my ID and they let me in. That's, that's normal. For the crypto hardliners out there, you understand the risks associated with that. That has new risk assumptions that triggered a lot of the crypto.

• 34:11Ryan Sean Adams?

  Shivers up your spine when you see this.

• 34:13David Hoffman?

  Yes, right. Like we don't want nation state IDs to be our recovery process. So the way, so the way that this works is that you subscribe to this Ledger Recover through the Ledger Live app. You go in through the, and make an account and then go through the ID verification process. On your device, after PIN verification, you will ask to initiate a recover backup process. So you ask your own device, like your device asks you, hey, do you want to do this thing? And you're like, yes. So after you consent to that, the ledger takes your seed phrase that's inside of the ledger, shards it into three, encrypts it, and then sends it outbound to these three custodians of your sharded private key. One is ledger to our alternative custodians in different parts of the world. And then these are the people that you go show your ID to in order to get your

• 34:57David Hoffman?

  seed phrase back. So is a way to, if you, if you lose your seed phrase, use your ledger, your nation state ID can get you your seed phrase back. Make, again, makes sense to a lot of people. And so that is kind of this new product that I think will make sense to a lot of people who are not in crypto. I think present bankless listeners can understand where people started to get concerned. The idea here is that people, including myself, were always assumed that your private key cannot leave your hardware wallet because that's the point. And so I'll never mind the fact that it's sharded and then encrypted and then sent into three different spots, which is probably a very secure way to do this. The fact that

• 35:42David Hoffman?

  it can do it at all is new information for a lot of people. And so if you

• 35:48Ryan Sean Adams?

  That's the idea.

• 35:49David Hoffman?

  That's the idea.

• 35:49Ryan Sean Adams?

  The idea of software being able to pull out your seed phrase, pull out your private keys is just like very concerning because that is the point of a hardware wallet. You don't want anyone to be able to pull out those, those private keys without, without you knowing about it.

• 36:09David Hoffman?

  And so the idea is like, okay, well, if you can do it securely, you what's stopping you from doing it insecurely? And so this is like, okay, you can shard it, encrypt it, but you can also just do it in plain text. And that is theoretically possible. The fact that it's theoretically possible is like the new information. So people on Twitter got very upset because this is like a perceived rug by Ledger. And then also, I'm going to add on that Ledger comms was not the most, not the greatest about this. So here's a tweet that people really didn't like, which was, "Technically speaking, it is and always has been possible to write firmware that facilitates key extraction. You have always trusted Ledger not to deploy firmware whether you knew it or not."

• 36:53David Hoffman?

  Technically, the truth, but oof, as a PR statement, oof.

• 36:58Ryan Sean Adams?

  Well, you say oof, but this is the, this is the actual truth. So, so just describing like, you have to opt into the Ledger Recover Service.

• 37:07David Hoffman?

  Yeah.

• 37:07Ryan Sean Adams?

  Like, of course, right?

• 37:08David Hoffman?

  Right.

• 37:09Ryan Sean Adams?

  And so you, but, and you also have to opt into a new upgrade of the Ledger firmware.

• 37:15David Hoffman?

  New firmware, right.

• 37:16Ryan Sean Adams?

  Which, if you have Ledger, a Ledger device of any kind, you probably have already done, not only once, but multiple times in the past to get security updates, to get new feature unlocks, that sort of thing. So you have to do that. And lastly, you actually have to click a button on your Ledger device, give like-

• 37:34David Hoffman?

  Really important point.

• 37:34Ryan Sean Adams?

  -in-person consent anytime a seed phrase or the private keys are actually leaving the hardware wallet. So there's kind of like three steps here, right?

• 37:45David Hoffman?

  Yeah.

• 37:45Ryan Sean Adams?

  And most people will not do the Recover Service, right? That's kind of a total trust Ledger thing. Most people will also want to continue to upgrade their firmware, all right?

• 37:53David Hoffman?

  Right.

• 37:54Ryan Sean Adams?

  But there is this like fallback of unless you physically put in your PIN number in the Ledger interface and click the checkmark button.

• 38:04David Hoffman?

  Buttons, yeah.

• 38:05Ryan Sean Adams?

  It will not send your seed phrase externally from the wallet.

• 38:09David Hoffman?

  Right.

• 38:10Ryan Sean Adams?

  I, I think that's an important consideration here in this, in this, this whole kind of mess. But, and yet still, people are uncomfortable with the idea that a firmware upgrade

• 38:21Ryan Sean Adams?

  can maybe put in an errant message or something, or could somehow-

• 38:26David Hoffman?

  Well, the idea is that we are now, people are now realizing that we are one firmware upgrade away from a key extraction type of firmware.

• 38:34Ryan Sean Adams?

  Yes.

• 38:34David Hoffman?

  That-

• 38:35Ryan Sean Adams?

  That's right.

• 38:36David Hoffman?

  In the worst case scenario, you just approve any transaction and because it was a malicious firmware upgrade from who knows where, that-

• 38:43Ryan Sean Adams?

  A fake transaction.

• 38:44David Hoffman?

  The next time you, you press the checkmark button, that you're sending your private keys outbound, right?

• 38:49Ryan Sean Adams?

  That's right.

• 38:49David Hoffman?

  So that's, that's, people thought that that was not possible, but it turns out to be possible. And now, because we are in mob season on Twitter, Ledger has been absolutely mobbed by this. And so this is now just talking about like the social drama.

• 39:03Ryan Sean Adams?

  Should we go to this tweet, David?

• 39:04David Hoffman?

  Yeah.

• 39:04Ryan Sean Adams?

  This is a video, and I actually, this, this Twitter user has me blocked, so I have to open it in another browser.

• 39:09David Hoffman?

  Which is hilarious.

• 39:10Ryan Sean Adams?

  Hold on.

• 39:14David Hoffman?

  Ooh, ooh, that is a ledger being hit with a hammer. Ooh, ooh, it's broken.

• 39:19Ryan Sean Adams?

  Wow, that's what it looks like inside.

• 39:21David Hoffman?

  Ooh, oh, it's in a fire pit now. It's going in a fire pit. Oh, we got a blowtorch.

• 39:25Ryan Sean Adams?

  Oh, a blowtorch.

• 39:26David Hoffman?

  Oh, we got a guy blowtorching a ledger. Oh, that thing is, that ledger is, uh...

• 39:31Ryan Sean Adams?

  It is toasty.

• 39:31David Hoffman?

  Oh, that ledger's dead.

• 39:33Ryan Sean Adams?

  Bye-bye seed phrase. Wow.

• 39:37David Hoffman?

  Yeah.

• 39:39Ryan Sean Adams?

  Well done on the toast job, though.

• 39:40David Hoffman?

  Yeah. Okay.

• 39:43Ryan Sean Adams?

  Have we seen enough?

• 39:44David Hoffman?

  I get it, Ryan. We can stop. I hope that guy backed up his seed phrase.

• 39:49Ryan Sean Adams?

  Are people, you know, doing other things with this? This is the only one I saw about it. And I actually, I saw it linked in Discord or someone, like, are people, like, putting it in blenders and running over it with their cars and, you know, the typical thing that people do?

• 40:01David Hoffman?

  Let's go on. We'll talk about this at the end. Let's go to the next. We have to go through the Twitter mob part of this agenda, and then we'll go to and get the takes.

• 40:07Ryan Sean Adams?

  All right, all right. So here's another tweet from Fubar. Let's, uh, let's read this.

• 40:11David Hoffman?

  Stop using Ledger hardware wallets. Migrate away from them immediately. They've shown nothing but gross incompetence and wild misunderstanding of their own purpose, and now they've publicly admitted intentionally backdooring their own proprietary hardware. Stop using Ledger. Ooh, big words. Big, big words.

• 40:26Ryan Sean Adams?

  Intentionally backdooring their proprietary hardware. That's interesting. Okay.

• 40:28David Hoffman?

  Oof, okay, okay. So these, these tweets are in order from most extreme to, to, to more, more reasonable. So now we're starting to get into the more reasonable side. Here's Munich Gupta, who said, Ledger just released a new update for Nano X that allows social recovery of your seed phrase. It encrypts your seed in three shards, sends it to different entities, and then it can reconstruct your seed from your post-ID verification. It's a horrendous idea. Do not enable this feature. Now, that is a take that is talking about how you actually have the option to not do this, which, again, understand is only half the issue, but you can, you can opt out of this. Let's go to the last take of this whole series, which I think is the most reasonable take, which is Haseeb, which of all the people drawing a big hubbub on Twitter was actually

• 41:12David Hoffman?

  helpful here. And so he goes, Yesterday, I freaked out about the revelation that Ledger could spit out your private key with a firmware update. Yet I noticed the smartest people were not freaking out. Was I missing something? I spent the evening educating myself, and now I'm in the nevermind is fine camp. So then he continues and goes, My initial mental model is I thought Ledger Secure Enclave was like Apple's Secure Enclave, a box that has private key lines in which I can only sign things, but the keys can never leave the device. But it's not. Firmware can exfiltrate the private key. Oh, God. And then he finishes and says... This take is actually nonsensical. This cannot be how it works because ledgers upgrade. Most people's instincts are like, wait, why even? I don't want my hardware to wallet to ever upgrade, but ledgers upgrade to support evolving blockchains.

• 41:54David Hoffman?

  Ethereum now requires BLS signatures. There's Solana, near Aptos, all this new stuff, new signing algorithms, new key derivations, all this fanciness. Aside from Bitcoin, every single blockchain evolves. And so the point here is that the secure enclave in your ledger has always actually been software. It is a hardware wallet, but there is software inside that secure enclave. And the point that you said earlier, that everything actually doesn't necessarily fall back to the ledger hardware wallet, but it does fall back to you pressing approve. That is the actual remaining part of the ledger that is the hardware of you hitting that approve button, not the secure enclave itself. And so this is the new reality that, by the way, has always been the

• 42:37David Hoffman?

  reality. And if we as an industry were more informed about this, there wouldn't be this

• 42:42Ryan Sean Adams?

  That's the security posture. That's the security posture you've always accepted when you've purchased a ledger device to hold your private keys. And some people are just now aware of that.

• 42:52David Hoffman?

  Right. Yes. And so are we, is this where we get into our takes? Okay. Are we all ready for? So this has been like the us doing a, trying to do an objective job of reporting it. I'm ready to give.

• 43:03Ryan Sean Adams?

  Yeah. And I will say, we, we talked to you, Charles, the chief security officer on Bankless. I think if you're interested in hearing from at least the ledger side, how this works and what went on, you can listen to that episode. We tried to be as objective as possible, but I think people come to the roll up for, for some takes too. And I would be interested in hearing your takes. What are your takes on this episode, David?

• 43:26David Hoffman?

  My takes are Ledger did nothing wrong. It was the crypto industry's collective misunderstanding as to how a hardware wallet works. Here, here's all of the blame that I will place on Ledger. There is the narrative and the marketing that your private key cannot leave your hardware wallet. And there's two different ways to interpret that. There's it can't leave the hardware wallet because the firmware up to this point has not allowed it. And then there's the, it can't. Leave the hardware wallet because the hardware doesn't allow it. Maybe Ledger benefited by that gray area and meant the software version, but got the benefits of the hardware version. Maybe that's the risk and that has been their comms mishap for years now of advertising, maybe being able to double dip and say like the hardware wallet will not allow your private

• 44:11David Hoffman?

  keys to leave the wallet, but not saying that that's because of the software, the firmware that we upgrade. And so maybe that is there, that is there.

• 44:21Ryan Sean Adams?

  It wasn't clear.

• 44:22David Hoffman?

  That's the, that's their bad. But Ledger is frustrated because they've been here in crypto, helping people go bankless this entire time. And now Ledger Ledger is being canceled from what appears for them to be like no good reason. Like you guys install firmware updates. There's the trust model is completely the same as it's always been. And y'all are just like learning about this for the first time. And so I think that coming to that conclusion has actually not been that hard. And so now my final take, Ryan, is I am actually disappointed in the people have taken the opportunity to jump into mob mentality about this and cancel culture so quickly and make viral videos of them smashing their ledgers with a hammer and a blowtorch just because they know they're going to get a bunch of likes because it is currently in vogue to cancel Ledger.

• 45:07David Hoffman?

  So that is my set of takes.

• 45:09Ryan Sean Adams?

  Geez, that take is going to be pretty damn unpopular this week, David.

• 45:13David Hoffman?

  I think, I think.

• 45:14Ryan Sean Adams?

  We've already had a rough week, my friend.

• 45:16David Hoffman?

  Mob mentality is coming after me next. Come at me. That's what I believe. Ledger did nothing wrong.

• 45:22Ryan Sean Adams?

  I think that you say nothing wrong is your summary. And yet you also said they did something wrong in their comms.

• 45:28David Hoffman?

  They could have done something better. All right. But I understand the error.

• 45:32Ryan Sean Adams?

  This is where I come down on things and I think I largely agree with what you said, but I want to put a fine point on what you said. So this is, this is also from food bar. This is a tweet from Ledger from November 15th, 2022. Hi, from Ledger, the Ledger account. Your private keys never leave the secure element chip, which has never been hacked. The secure element is third party certified and is the same technology as used in passports and credit cards. A firmware update cannot extract the private keys from the secure element. A firmware update cannot extract the private keys from the secure element. Okay. Here's what I'm saying, David. I think that is technically true from what I understand, unless you hit the approve button.

• 46:17Ryan Sean Adams?

  Okay?

• 46:18David Hoffman?

  Yes.

• 46:18Ryan Sean Adams?

  So you could read this tweet and be like, yes. However, by not making it emphatically clear that you are still a nefarious firmware firmware update from Ledger away from Ledger, you're trusting them to not snatch your private keys. I think that there's a little bit of an omission there, or at least a little bit of a communication mishap. So that's what I'll say. The other thing I'll say, David, is I actually think this could have happened no matter what they did from the comms side of things, right? It was just the time in the universe where we decide to take a week and completely torch Ledger. All right, it's like, I get that. Now, what they can do in terms of moving the industry forward

• 47:03Ryan Sean Adams?

  is they can choose to open source their firmware, elements of their firmware. So let's take this. Yes, the the reaction was probably extreme. Yes, there's a lot of people who didn't know. Yes, this was Ledger's misunderstanding in their target market. And like, well, you just pissed off your core like group through this comms. Yes, all of those things. And now, what, how do we move forward? I would be supportive and call on Ledger to open source as much of their firmware as possible, or to explain if there's pieces why they can't open source it, explain why. I think that could be the path forward because that's the best that that we can really do. So what do I plan to do here? I'm not like going and torching my, you know,

• 47:48Ryan Sean Adams?

  any Ledger device I own. I plan to continue to use it, but I've also always had redundancy, different setups. Like, don't just depend on one provider. Have Ledger, get a Trezor if you want. Grid Plus is a fantastic hardware wallet. We've had them on the podcast before, and I think they do a fantastic job on this. Still, even with Grid, David, you're still one firmware update from being screwed by Grid Plus, all right? But if we have redundancy here, one thing that GridPlus, I believe, is doing is open sourcing, moving to open source, more of their firmware in Q3. I think that's a positive step. It's good pressure in the industry to do it. I also think, let's zoom

• 48:29Ryan Sean Adams?

  out, big picture, okay? Seed phrases do kind of suck. They kind of suck. And Ledger was trying to make that less sucky for normies. That is a noble effort. We want more people on the bankless journey. We don't just want to be like the crypto gold bugs here. And so we got smart contract wallets. We have MPC technology. That, to me, is the way for it. So I also think that Ledger made some mistakes, but I agree with you. It's not, I don't know why we're choosing this week to cancel Ledger. So hard. Like, just learn from it and then use whatever security posture you prefer for your private keys.

• 49:04David Hoffman?

  I've got a take for you, Ryan, and it actually ties these two stories together. These two stories being Ethereum's client, multi-client design philosophy and Gnosis Safe. And so Martin Koppelman says, whatever wallet you are using that actually holds your keys, it's never a bad idea to use at least two different ones and combine them into a safe. And so I retweet this and I say, this is the same philosophy as Ethereum's multi-client design strategy. If one client fails, you have redundancy with orthogonal alternatives. The overlapping risk space of multiple strategies becomes miniscule. Okay, so you got a Ledger, you got a lattice, a GridPlus lattice, and so you also have a Metamask. And you do a two of three, and if Ledger rugs you, it doesn't matter because

• 49:49David Hoffman?

  you need GridPlus and Metamask to access your Gnosis Safe. Say Metamask rugs. Well, you got your GridPlus, like, two of three. And so this is the same security philosophy that is how Ethereum multi-client design works. But since we have smart contracts and multi-sigs, which is a completely different realm, we actually can completely mitigate any risk whatsoever. So, once again, solved by smart contracts.

• 50:14Ryan Sean Adams?

  I agree, and that's just a very sensible reaction in security posture, I will say, though.

• 50:19David Hoffman?

  Oh, wait, I shouldn't burn my Ledgers?

• 50:23Ryan Sean Adams?

  No, you shouldn't. But even in that, David, like smart contract risk on the safe wall, do you know what I mean?

• 50:30David Hoffman?

  But then there's risk and we're going west and crypto is risky and we're on the frontier at this point. Come on.

• 50:38Ryan Sean Adams?

  Yep. Yep. I think that the moment I'll start to get concerned about this is if I hear of a firmware update that's been pushed and someone gets maliciously hacked, right?

• 50:48David Hoffman?

  Yes. So far, I never install firmware updates first. I always let other people go first. That's a great security trick. Let others go first.

• 50:58Ryan Sean Adams?

  Yeah, let others go first. Right. All right. Enough of that. So let's get to the SEC this week and more grilling of Gary Gensler, I guess. This is big, though. Absolutely massive. This happened late last week. The US Chamber of Commerce has just filed a brief in the Coinbase versus SEC case, calling out the SEC for acting unlawfully in the digital asset space. This is the US Chamber of Commerce, not the Chamber of Digital Commerce. The US Chamber of Commerce represents all US businesses in the United States. They have a massive presence in DC. Metta Lawman says this is a big deal. He says the US Chamber is highly influential and they represent companies across all industries, not just the US. And the brief

• 51:43Ryan Sean Adams?

  opens with this. As it stands today, nobody knows for certain which digital assets, if any, are securities under federal law. Could not have put it better ourselves on a weekly roll up. I think this is a big vote of confidence for Coinbase in what they're asking for from the SEC.

• 52:04David Hoffman?

  It continues and makes three big points. Regulatory uncertainty is killing innovation in the US. The SEC is destabilizing the digital assets regulatory environment and the SEC is violating constitutional due process and fair notice rights. Basically, the Chamber is declaring the SEC actions are not just harmful policy, they are unlawful. They're not just bad, they're illegal, which is great. The court will give these arguments advanced by the US Chamber of Commerce serious attention. And like Ryan said, this is the largest, most influential business organization in the US, has just declared that it stands with Crypto represents the interest of more than 3 million businesses and organizations throughout the country from small businesses to global corporations.

• 52:47David Hoffman?

  Dope. I love that. These are great words.

• 52:50Ryan Sean Adams?

  Did you see, so, so David, this, this same week, SEC just responded to Coinbase's petition. And you recall that, that petition we were talking about a week or two ago, where Coinbase was asking the court to require the SEC to respond just yes or no.

• 53:05David Hoffman?

  Yes, yes or no.

• 53:06Ryan Sean Adams?

  A simple yes or no to whether it will undertake rulemaking for our industry. That's all they had to do was respond yes or no. You know what they responded with, David?

• 53:14David Hoffman?

  Uh, oh, boy. You were gonna tell me.

• 53:17Ryan Sean Adams?

  36 pages of legalese, I skimmed this. It just amounts to, we don't have to if we don't want to. That is my non-legal summary of this thing. This is what Paul Graywall, Chief of Legal at Coinbase said. Today, the SEC's responded to Coinbase's petition, asking the court to require SEC to respond just yes or no. The SEC's answer, a resounding maybe.

• 53:43David Hoffman?

  Uh, resounding, go fuck yourself.

• 53:46Ryan Sean Adams?

  Basically.

• 53:48David Hoffman?

  Sorry for the language.

• 53:49Ryan Sean Adams?

  That's what they said. So David, maybe that was why Gary Gensler was so defensive this week when asked at a financial conference whether the SEC has provided sufficient clarity to crypto. Here's what he said.

• 54:00Speaker 04

  Okay. Can you comment at all on the dispute with Coinbase about rules on crypto? And why doesn't the SEC want to publish rules for that market?

• 54:10Speaker 05

  Because, Tom, the rules have already been published. And to make it quite direct, this is a field that is in operating largely non-compliant. Our agency has put out rules about what it is to be an exchange, what it is, means to be a broker dealer, what it is, means to be an advisor or custody assets, and how to register securities offering. Those rules are in existence, and there's nothing about a new technology that makes it non.

• 54:47Ryan Sean Adams?

  He goes on, I'm sick of hearing this, but basically Gary's saying the rules are already clear, right? And again, on the back of this, he's doubling down on that.

• 54:56David Hoffman?

  Well, the Chamber of Commerce said that he's being illegal by doing that.

• 55:01Ryan Sean Adams?

  I like that he's in this situation right now, David.

• 55:04David Hoffman?

  Yeah, so here's Miles Jennings from A60Z, lawyer at A60Z. SEC, come in and register. Coinbase, we'd like to register. SEC, you're not allowed. Coinbase, why not? SEC, the rules are clear. Coinbase, the rules don't make sense. SEC, the rules are the rules. Can they be adapted? Yes, but we don't like your industry. But you've adapted rules before. No, we haven't. You approved our IPO. No, we didn't. Yes, you did. We're going to sue you. For what? Wouldn't you like to know? Yes. Too bad. You should have registered. But we would like to register. I bet you do. Can you tell us how? No.

• 55:35Ryan Sean Adams?

  That is exactly what happened. Wow.

• 55:37David Hoffman?

  That's a really long tweet. Good for him.

• 55:40Ryan Sean Adams?

  That's very good, though. All right, David, what do we have coming up next?

• 55:43David Hoffman?

  Meanwhile, while crypto is eating itself and Gary Gensler's hot seat gets even hotter, Nike has built the most legit Web3 metaverse platform ever. World coins come into optimism. Sam Altman testified before Congress and urged lawmakers to regulate AI. Bitcoin or Dogecoin is the same picture. So much to talk about, but first a moment to talk about these fantastic sponsors that make this show possible, especially MetaMask, who's helping you learn about all the jargon that Ryan and I don't have time to explain on the podcast. Sorry about it. But if you want to go learn all that jargon, there's a link in the show notes. So go check out MetaMask Learn. Learning about crypto is hard, until now. Introducing MetaMask Learn, an open educational platform about crypto, Web3, self custody, wallet management, and all the other topics needed to onboard people into this crazy

• 56:28David Hoffman?

  world of crypto. MetaMask Learn is an interactive platform with each lesson offering a simulation for the task at hand, giving you actual, practical experience for navigating Web3. The purpose of MetaMask Learn is to teach people the basics of self custody and wallet security in a safe environment. And while MetaMask Learn always takes the time to define Web3-specific vocabulary, it is still a jargon-free experience for the crypto-curious user. Friendly, not scary. MetaMask Learn is available in 10 languages with more to be added soon, and it's meant to cater to a global Web3 audience. So are you tired of having to explain crypto concepts to your friends? Go to learn.meta mask.io and add MetaMask Learn to your guides to get onboarded into the world of Web3. Mantle is a brand High-performance Ethereum Layer 2 network.

• 57:13David Hoffman?

  Built differently from the other Layer 2s you may be familiar with. Mantle is a modular Layer 2 built on the OP stack, but uses Eigenlayer's data availability solution instead of the expensive Ethereum Layer 1. Not only does this reduce Mantle's gas fees by 80% compared to other Layer 2s, but it also reduces gas fee volatility. Mantle has a decentralized sequencer set, eliminating the risk of downtime and censorship on the network. And because Mantle implements multi-party computation nodes, Layer 1 settlement execution is shortened from seven days to as low as just one or two. Mantle is the first Layer 2 built by a DAO and is backed by one of the biggest DAO treasuries in the world: BitDAO. Mantle already has sub-communities from around Web3 onboarded to help the growth of Mantle, like Game7 for Web3 gaming,

• 57:58David Hoffman?

  or EduDAO for the world of D-side, and Bybit for TVL, liquidity, and on-ramps. Check out Mantle at mantle.xyz and follow them on Twitter at @zeroxmantle. Nike's .swoosh platform is a brand-new platform that Nike is rolling out to consumers. Not for us. This is not for us. So don't judge it, because it's not for us. And if you're not a Nike, if you're not a sneaker head, this might not be for you. But it's a .swoosh platform. Kind of, I think it's an allusion to .eth, but .swoosh is the home of Nike Virtual Creations and Community Hub for .swoosh members. So they are creating, like, kind of like loot boxes, boxes of merch, virtual merch.

• 58:41David Hoffman?

  So they have their OF1, Our Force, instead of Air Force, you know, Air Force Ones, but Our Force Ones. So OF1, collection of Nike Virtual Creations inside of an OF1 box. So OF1 collection starts with each OF1 box, comes in two forms: classic remix or new wave. Classic remix boxes contains an Air Force One inspired by Air Force One collections from 1982 to 2006.

• 59:06Ryan Sean Adams?

  These are NFTs?

• 59:07David Hoffman?

  These are NFTs. Well, I mean, these are digital collectibles, actually.

• 59:12Ryan Sean Adams?

  Yes, virtual, though.

• 59:13David Hoffman?

  Virtual.

• 59:14Ryan Sean Adams?

  They're not sending a box with sneakers in my house.

• 59:16David Hoffman?

  But I think if you are a sneaker head who's collecting Air Force Ones from 1982 to 2006, you know exactly what they're talking about. The new Wave Box features a brand new next generation reaching Air Force One that takes inspiration from 2007 to the present and even into the future. Scattered across both boxes are co-created Air Force Ones from our year, Your Force One winners. These are all, so this is like a digital scavenger hunt collection for sneaker heads who like to collect. And not only that, but they have a Swoosh ID which secures your place in the .Swoosh community where you can meet members, collect virtual collections, get exclusive access to physical and virtual collections, and then you can also co-create with Nike. And so what are collections? They are sneakers,

• 1:00:01David Hoffman?

  apparel, accessories, other collectibles that you can use in games or other immersive experiences. Some Nike virtual creations will unlock benefits for you in the physical world such as in real life products and exclusive events. Wow. Okay.

• 1:00:13Ryan Sean Adams?

  No mention of an NFT though.

• 1:00:16David Hoffman?

  Yeah.

• 1:00:16Ryan Sean Adams?

  Which is kind of cool.

• 1:00:18David Hoffman?

  And so you get a wallet, you will get a wallet, they won't call it a wallet, you will have your wallet custody by BitGo, which is fine for this use case. Don't cancel Nike, Jesus. And the thing is, like, you will buy these things with a credit card, and you will buy digital assets with a credit card. Guess on what blockchain, Ryan?

• 1:00:40Ryan Sean Adams?

  It's not going to be on Ethereum. I know this. Gas prices are too high for this use case. Tell me.

• 1:00:45David Hoffman?

  Polygon. On the Polygon blockchain.

• 1:00:48Ryan Sean Adams?

  Where else would it be? I mean, they're getting the big ones.

• 1:00:51David Hoffman?

  It could have been Flow. It could have been Flow. When I was looking at this, I was like, oh, is this going to be Flow?

• 1:00:57Ryan Sean Adams?

  Well, there you go. So, and the good news about Polygon is, of course, it has a future direction to become an Ethereum Layer 2 as well.

• 1:01:04David Hoffman?

  And you can, you can take that asset and put it back on Ethereum if you want to.

• 1:01:08Ryan Sean Adams?

  Speaking of Layer 2s, David, what's happening in the Optimism ecosystem?

• 1:01:13David Hoffman?

  Optimism is getting its Bedrock update. So Bedrock is coming down on June 6th. Ooh, that's D-Day. Never mind. An upgrade that will require 2 to 4 hours of downtime for OP mainnet. Once upon a time, I was a World War II history buff. Okay, so Bedrock will bring a 50% reduction in protocol fees. So Optimism fees are getting cut in half. It's also going to make it easier to contribute to client diversity. So the OP stack getting an upgrade, improve the security and resilience of the Ome OP mainnet bridge, will increase the minimum diff between OP mainnet and Ethereum, that Ethereum equivalence that we know and love, and also sets the stage for the superchain to enable more and more OP chains.

• 1:01:57David Hoffman?

  So that world, that superchain, that all those OP chains, every time you hear the world, "Hey, this is an OP chain," or "Built on the OP stack," it helps that thing become a little bit more composed. So this is the first major protocol to Optimism to be voted on and approved by Optimism's token house. Interestingly, this will require 2 to 4 hours of downtime for OP mainnet, which is, actually, I think I haven't seen that before for a Layer 2, actually going down to start back up again. I'm sure that's going to cause some drama when that day comes.

• 1:02:26Ryan Sean Adams?

  And zooming out, this is Plenya speaking about, I think, Ethereum's modular scalability strategy. A standard chain, one like Ethereum, that's 1X. A fast chain, I would assume that's a monolithic chain like a Solana, 10X. Fractal scaling, 10,000X. This is why fast chains have only offered variations on the apps described 9 years ago in Ethereum white paper. To explore the next frontier at scale on-chain games, we need fractal scaling with thousands of chains. This is kind of alluding to what Optimism is doing with Bedrock and the idea of a Layer 3 types of chains.

• 1:03:01David Hoffman?

  Yeah. Yeah, I think the whole idea of like, hey, we're going to scale by juicing up our monolithic chain. In the future, that will just be an anachronism, as in, it'll just be like, hey, remember when like the crypto industry tried to scale with Layer 1 chains that were juiced? Like, eventually, we're watching Layer 2s get faster. We're watching the superchain gets composed. And so the superchain fractal scaling, hyper scaling, these are all the same terms.

• 1:03:24Ryan Sean Adams?

  All same.

• 1:03:25David Hoffman?

  Yeah. And so like, we're going to watch, and it's just going to blow people's minds about how fast these things can actually get. It's just going to take some more time to get there.

• 1:03:32Ryan Sean Adams?

  David, how come we've never talked about this? I didn't know you were a World War II buff, man.

• 1:03:37David Hoffman?

  Oh, yeah. Oh, yeah, yeah.

• 1:03:38Ryan Sean Adams?

  So am I.

• 1:03:39David Hoffman?

  Yeah. Oh, I know.

• 1:03:40Ryan Sean Adams?

  I have read so many freaking books.

• 1:03:42David Hoffman?

  What's your favorite World War II book?

• 1:03:44Ryan Sean Adams?

  Uh, there's a book called D-Day.

• 1:03:48David Hoffman?

  Yeah, I remember that one.

• 1:03:48Ryan Sean Adams?

  It's been a while. It's been like 10 years since I've been sort of like deep into it. Would you compare our collections?

• 1:03:56David Hoffman?

  Mine's Band of Brothers.

• 1:03:56Ryan Sean Adams?

  History? History podcast? You down? We do like a World War II history podcast.

• 1:04:02David Hoffman?

  You do a history podcast. I'll do a food podcast. That'd be great.

• 1:04:08Ryan Sean Adams?

  All right. Tell me about WorldCoin. What are they doing?

• 1:04:10David Hoffman?

  It's coming to Optimism mainnet. So actually not an OP stack, although I think they have expressed plans to make an OP stack in the future. For now.

• 1:04:18Ryan Sean Adams?

  What do you mean by that? They're using optimism, optimism code.

• 1:04:23David Hoffman?

  WorldCoin, yes. And so they will use the OP mainnet for WorldCoin, the coin. I think they also might use it for WorldID. Eventually, I did a, we did a podcast, I did a podcast, actually you weren't there, with Sam Altman and Alex Blanier from WorldCoin about the WorldCoin vision. I'm seeing a lot of WorldCoin chatter start to heat up, so I think this is going to be a reoccurring conversation throughout the Twitter sphere. Eventually, they will have their own OP stack chain. For now, they are putting their infrastructure on OP mainnet.

• 1:04:52Ryan Sean Adams?

  More Sam Altman in this agenda, too. Before we get there, though, Lido, they just released withdrawals, I believe.

• 1:04:59David Hoffman?

  That's right. Lido V2-enabled withdrawals, a bunch of other upgrades as well, along with a router. I couldn't find very many stats. I think there were some big withdrawals from Lido, but that's what you would expect, and they were very temporary and very short-lived. The tug of war in the side of the meta, the smaller microcosm of Lido is TBD. I think Lido's going to be doing just fine.

• 1:05:21Ryan Sean Adams?

  You know what's really cool, too, is the increasing amount of PayPal and Venmo support, at least in the US, for crypto. This is integration of PayPal and MetaMask, where you can just buy in MetaMask, in your MetaMask wallet, you can just buy crypto using PayPal. So you select PayPal, you choose the amount, you tap it, and you've just purchased some ETH. And this is also cool. You can also buy and send crypto from PayPal. So you buy your crypto in PayPal and then send it to MetaMask. This is very big. This goes into the DeFi mullet thesis that we've been talking about so long, which is like. Man, millions, hundreds of millions of users of Venmo and PayPal across the world,

• 1:06:03Ryan Sean Adams?

  and all of them now have a way to onboard directly to a bankless wallet in something like MetaMask. I just think that is absolutely massive and worth celebrating. By the way, I think we're in touch with their team.

• 1:06:14David Hoffman?

  Yeah, we're talking to them today about a future podcast episode.

• 1:06:18Ryan Sean Adams?

  Yeah, we want to see what they're up to.

• 1:06:19David Hoffman?

  The podcast episode is going to be so, so easy. Like, hey, what's your guys' DeFi wallet look like?

• 1:06:24Ryan Sean Adams?

  Yeah.

• 1:06:24David Hoffman?

  Do you think they're gonna, do you think they're gonna understand that question?

• 1:06:28Ryan Sean Adams?

  Well, that'll be the screener. If they don't come on the podcast, let's understand that question.

• 1:06:32David Hoffman?

  Okay, so here's something that happened pretty cool. This is a tweet from Zach XBT. He tweeted out, "Wow, both Pump and Dump meme coins, Nian meme coin and Grumpy Cat coin were sent cease and desist letters on-chain." So a cease and desist letter was turned into a JPEG, an NFT, and sent them to the, to the, to the deployer address for these Pump and Dump coins from law firms.

• 1:06:57Ryan Sean Adams?

  Does that work?

• 1:06:58David Hoffman?

  Does that work? Can, does that count as a cease and desist letter?

• 1:07:01Ryan Sean Adams?

  I don't, have you received that letter if it's on-chain and posted publicly?

• 1:07:06David Hoffman?

  I don't, it's on, it's on the blockchain, bro.

• 1:07:09Ryan Sean Adams?

  They do call it a wallet. I mean, I sent it to your wallet. I sent it to your, like, address. I sent it to your vault.

• 1:07:15David Hoffman?

  Is this legally valid?

• 1:07:17Ryan Sean Adams?

  It's in your custody if.

• 1:07:19David Hoffman?

  Well, yeah, but I get spam tokens sent to me all the, all the time. Doesn't mean I look at those. There's a difference between like, no one tweets at me about my spam tokens. They definitely got tweeted about this.

• 1:07:28Ryan Sean Adams?

  Well, here's a question.

• 1:07:28David Hoffman?

  Because this is what the tweet is.

• 1:07:29Ryan Sean Adams?

  If I put a cease and desist in your mailbox and I leave it in your mailbox, but you never open your mailbox, have you received it or not?

• 1:07:36David Hoffman?

  Hmm, that's a big meta question.

• 1:07:37Ryan Sean Adams?

  I think it's equivalent.

• 1:07:38David Hoffman?

  So this, the cease and desist letter starts with, "May 17th, 2023, Kia Carmen, Attorney at Law, to the persons with wallet addresses listed below and all collectors. Attention, 0XDAE2D95 blah, blah, blah, blah, blah."

• 1:07:54David Hoffman?

  So like, attention wallet owner.

• 1:07:58Ryan Sean Adams?

  That's funny, man. That's funny.

• 1:07:59David Hoffman?

  Okay, are you ready for this one, Ryan? I'm gonna carry you through this one.

• 1:08:02Ryan Sean Adams?

  Yeah, what's this?

• 1:08:02David Hoffman?

  Say hello to DRC20's tokens on Dogecoin. So Dogecoin daily transaction volume climbed to a lifetime peak after the launch of DRC20 token standard, a new mechanism that allows the issuance of tokens on the Dogecoin blockchain. 650,000 transactions on Dogecoin on Sunday briefly crossing both Bitcoin and Litecoin transactions before falling back down. And so, Ryan, this is hilarious because the next part of this story is a bunch of Doge fundamentalists not being happy about that.

• 1:08:34Ryan Sean Adams?

  No.

• 1:08:34David Hoffman?

  Yes.

• 1:08:35Ryan Sean Adams?

  There are Doge maximalists out there?

• 1:08:37David Hoffman?

  Yeah, so not despite this increased uses of Dogecoin, people in the Dogecoin community have said that this has led to network congestion that moves away Dogecoin's aim of being used as an everyday currency. "The DRC20 Dogecoin community should stop this shameless hype," wrote one Dogecoin community member on Twitter. "Everyone should probably focus on the transactional currency use case," said another. "High fees and network congestion are valid concerns for any blockchain and that may lead the network to becoming expensive, slow, and for everyday users, dampening adoption plans." Does this sound familiar, Ryan?

• 1:09:11Ryan Sean Adams?

  Oh my god, that's amazing. Are these people serious, though? I thought I thought Dogecoin was always a parody. Is this actually a serious crypto tribe?

• 1:09:20David Hoffman?

  I don't know how to answer that question.

• 1:09:24Ryan Sean Adams?

  And why DRC20s? I mean, maybe the better question is, why not? Of course, there were going to be DRC20s.

• 1:09:30David Hoffman?

  So we have ordinals on top of Doge, and now we have two camps inside of Doge. Who's like, get your stupid pumping them tokens out of my extremely serious and legitimate global currency.

• 1:09:42Ryan Sean Adams?

  That's a Will Smith slap to the face right there.

• 1:09:46David Hoffman?

  Okay, in more serious news, MICA out of the EU has passed.

• 1:09:51Ryan Sean Adams?

  They say MICA.

• 1:09:52David Hoffman?

  MICA has passed. We saw this coming, right?

• 1:09:56Ryan Sean Adams?

  Yep. My summary of this is, we did an episode on it with a bunch of panelists who knew a lot more about it than you and I do. It's a B minus, they say. And here's a take from one of the panelists that I'll quote. "The EU never knows when to stop." This is the big but part. It's like, we got some good B minus legislation, that's good. But the EU never knows when to stop. MICA may be a B minus, but the AMLR and Data Act and DAC8 is with the council. All are bad for crypto, and there's even more coming after that. So before anyone throws a "we're moving to Europe" party, they need to consider that things never get better in the EU. The regulation only gets heavier. So that is the fear on the back of this. And before you start celebrating, let's all move to Europe, because it's better than the US.

• 1:10:42Ryan Sean Adams?

  It is right now. The US doesn't have any clarity on crypto. Just look in the pipeline of other things that might be coming down, because I don't think the EU is done. That's the... What's the opposite of a silver lining? It's the opposite of a silver lining, alright?

• 1:10:56David Hoffman?

  Lead lining?

• 1:10:57Ryan Sean Adams?

  Yeah, lead lining. Speaking of lead linings, Do Kwon is set to be released after Montenegro court accepts a 436k bail in local press. Do Kwon's getting out, David.

• 1:11:10David Hoffman?

  Yeah.

• 1:11:11Ryan Sean Adams?

  You guys gonna hang?

• 1:11:12David Hoffman?

  Yeah, so I'm not too far away from Montenegro, so the capital of Montenegro, Podgorica. God, that's taken me forever to learn how to pronounce, is where he is. That is about an hour away from where I am. So, under conditions of bail, Kwon and Terra executive Han, John John, will be under surveillance and prohibited from leaving their apartment.

• 1:11:32David Hoffman?

  Yeah.

• 1:11:33Ryan Sean Adams?

  You setting up the interview? Would you interview him? Would you talk to him?

• 1:11:36David Hoffman?

  Alright, yeah, sure, I'd interview him.

• 1:11:38Ryan Sean Adams?

  Just be like, why'd you do this? Like, how has it been?

• 1:11:41David Hoffman?

  Is that the question I would lead with? Is like, I think my first question is, do you feel guilt?

• 1:11:47Ryan Sean Adams?

  Do you feel guilt? Yeah, are you sorry?

• 1:11:50David Hoffman?

  Are you sorry?

• 1:11:51Ryan Sean Adams?

  But maybe that's too moralistic. Maybe you should just like, in order to get him to open up, you have to like, have the question of like, reflect on the last year, and just leave it so open-ended.

• 1:12:02David Hoffman?

  Right.

• 1:12:03Ryan Sean Adams?

  So he can sort of, you can get a peek inside the mind.

• 1:12:06David Hoffman?

  What do you want people to hear?

• 1:12:09David Hoffman?

  Because you can't corner him. He's already cornered.

• 1:12:12Ryan Sean Adams?

  Yeah. Anyway, that's not going to happen, but let's talk about regulation of a different type that we don't usually talk about, but while they're talking about crypto regulation in the US, really AI regulation is heating up. So what happened this week?

• 1:12:26David Hoffman?

  So Sam Altman had to testify before Congress. And so we've seen this before. We've seen Web 2 employees. We've seen Zuckerberg. We've seen the SBF testify before Congress. Sam Altman's turn. And so he actually urged lawmakers to regulate AI in specific ways. So he testified before the Senate Judiciary Subcommittee on Privacy, Technology, and the Law. And hearing touch on the risks that generative AI could pose to society, how it could affect the jobs markets, and why regulations from governments might be needed. There's a useful clip, I think, that we should play.

• 1:12:57Speaker 06

  And last, I don't know if I'm allowed to do this, but I will note that Sam's worst fear, I do not think is employment. And he never told us what his worst fear actually is. And I think it's germane to find out.

• 1:13:08Speaker 07

  My worst fears are that we cause significant, we, the field, the technology, the industry, cause significant harm to the world.

• 1:13:16Speaker 07

  I think that could happen in a lot of different ways. It's why we started the company. It's a big part of why I'm here today and why we've been here in the past and we've been able to spend some time with you. I think if this technology goes wrong, it can go quite wrong. And we want to be vocal about that. We want to work with the government to prevent that from happening. But we try to be very clear eyed about what the downside cases and the work that we have to do to mitigate that.

• 1:13:41Ryan Sean Adams?

  Interesting response. Sam Altman, of course, he is the CEO of OpenAI, the creators of ChatGPT. What's your take on that response?

• 1:13:50David Hoffman?

  So I did a podcast with him on last Sunday, so six days ago, about WorldCoin. So different subject.

• 1:13:57David Hoffman?

  Prior to this, I really, I think I had an internal bias. I'm very aware of my biases, I like to say. I had an internal bias. If I really wanted to not like Sam Altman.

• 1:14:08Ryan Sean Adams?

  Why? Just like kind of reptile tech bro reptiles?

• 1:14:12David Hoffman?

  A little bit of that, a little bit of, we came out of the eleazar podcast being like, oh man, this is going to take us over the world. And then it's irresponsible for other CEOs of AI companies who are falling victim to the Moloch trap, who are accelerating this thing. So they are being irresponsible. And so, and then I like, I listened to him answer Lex Friedman's question about AI alignment. And I thought that he just, man, he just deflected the hell out of that one.

• 1:14:38Ryan Sean Adams?

  He asked, he asked questions in return. It was like, well, what do you think?

• 1:14:42David Hoffman?

  Yeah. It's like, and so I'm like, man, Sam, uh, bro, look what's about to happen here. And that, and lately I have seen him, um, in addition to the podcast and kind of seeing the human there. I think I've seen him to tackle this alignment problem head on. And I think the CEO leaders of these AI companies are also going to be the very likely solvers of AI alignment, if anyone. And so I think I'm cautiously optimistic that Sam Altman is not just a good guy, but a potential, God, I hate to say this word, hero in the fight of AI alignment. That is my optimistic rosy colored glasses scenario. Plenty of other scenarios can play out,

• 1:15:26David Hoffman?

  but I am hoping the best in Sam Altman. And I'm starting to be okay with depositing some trust there.

• 1:15:33Ryan Sean Adams?

  I think his name will be, um, front and center, will become a household name if it, if it hasn't already. That's how important this is. I, uh, it always makes me uncomfortable, David, to be put in the situation of having to trust heroes and having to trust people. I will say that. And I think it's probably the case that we may never know what Sam Altman's intentions actually are. We'll have to judge it by his actions. I mean, there is a more nefarious like case you could make, which is just, um, yeah, I'm going to put on this face in front of Congress and regulators and say, come in and regulate me in order to like establish and entrench my own sort of power. So I can help shape the regulations, like.

• 1:16:15Ryan Sean Adams?

  There's like, remember SBF was doing a little bit of this? Do you know what I mean? You just don't really know is the thing. And he could be an incredible person. I have no idea. He could also be an SBF. We also have no idea. And it's just, I hate that we have to trust. But I don't think we do. I think we need to find ways to sort of verify and find other ways rather than relying on the human beings in the ecosystem kind of put AI in the right direction. But interesting nonetheless. More to come, I'm sure, on that. David, what do we got coming up next?

• 1:16:47David Hoffman?

  Coming up next, we got questions from the nation. We got three of them this week. I think there's some great questions and then some pictures. We're going to look at some pictures because that is going to be some both some takes of the weeks and what Ryan and I are excited about. And there is also a moment of Zen for the YouTube people. It is a video only moment of Zen. It is the most impressive of AI, artificial generation of image, video. Oh, my God, it's so cool. You got to go watch it because it's actually really related to what Sam Altman was testifying about. Anyways, all of that's coming up and more as soon as we talk to some of these fantastic sponsors that make this show possible. Hiring people worldwide, paying them in crypto, providing them access to benefits. It all so complex, but it doesn't have to be complying with labor laws, payroll rules, tax obligations and crypto regulations in every country that you employ someone is

• 1:17:32David Hoffman?

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• 1:18:16David Hoffman?

  Arbitrum One is pioneering the world of secure Ethereum scalability and is continuing to accelerate the Web3 landscape. Hundreds of projects have already deployed on Arbitrum One, producing flourishing DeFi and NFT ecosystems. With the recent addition of Arbitrum Nova, gaming and social dApps like Reddit are also now calling Arbitrum home. Both Arbitrum One and Nova leverage the security and decentralization of Ethereum and provide a builder experience that's intuitive, familiar, and fully EVM compatible. On Arbitrum, both builders and users will experience faster transaction speeds with significantly lower gas fees. With Arbitrum's recent migration to Arbitrum Nitro, it's also now 10 times faster than before. Visit arbitrum.io, where you can join the community, dive into the developer docs,

• 1:19:01David Hoffman?

  bridge your assets, and start building your first app. With Arbitrum, experience Web3 development the way it was meant to be: secure, fast, cheap, and friction-free.

• 1:19:09Ryan Sean Adams?

  Questions from the nation this week. This one from thebigsalad.eve. Man, I love that ENS handle. Would it be possible for Ethereum to use MEV as partial gas refund to users? Would that be possible, David?

• 1:19:20David Hoffman?

  So not only is that possible, but that is an explicit strategy that a number of startups are going after right now. Actually, this is one of the benefits that I think the Bankless Interest has because we actually get to learn more about what's going on in the frontier and be educated about the frontier and be able to relay that information here on the podcast. There is a very decently saturated market of people that are trying to connect the circuit between transaction origination and MEV back to transaction origination. So like transaction from the wallet, if you do a DeFi thing, it picks up by an MEV searcher bot, which makes another transaction, which goes into a bundler bot, which goes into a block builder, which goes into a block proposer, aka ETH validator, who ultimately connects the MEV.

• 1:20:02David Hoffman?

  But then, there's a possible way where wallets, who ultimately are the originators of transactions, aka the source of MEV, can be paid for their deal order flow, which we generally think of as toxic. But if that payment for deal order flow goes back to the transactors for transacting in the wallet, there is a way where we can connect MEV to people who are making transactions as, yes, a gas refund. So if your transaction produces MEV, your wallet might pay for that in some particular way. And so that is a thing that is being built by a handful of startups in this world.

• 1:20:40Ryan Sean Adams?

  You know how when you use a credit card, you get like points, hotel points or gas points or discounts back? It's same same, except this could be even better.

• 1:20:48David Hoffman?

  Yeah.

• 1:20:48Ryan Sean Adams?

  Because it's also, it could be ETH, but there, yes, there could be all sorts of different models on top of this that wallets built. And the cool thing is crypto can pay you to spend and to transfer to use crypto transactions. I think that's definitely coming. All right. Here's a second question here about Bitcoin. Bitcoin has a history of legitimate and illegitimate hard forks, most important being Bitcoin Cash. Well, we remember that, whose central point was the network's block size. Bitcoin won that fight versus Bitcoin Cash, based on choosing decentralization as the North Star, keeping one megabyte block size. The question is, if a hard fork is on the menu and thinking that Bitcoin's North Star is decentralization, which option is objectively more decentralized? A chain with

• 1:21:33Ryan Sean Adams?

  or without ordinals? So I guess this is the idea, David, a questioning of whether Bitcoin might fork into two different options, one chain with ordinals and one chain without ordinals. And the questioner is asking which is objectively more decentralized? Can you imagine this future and help us make sense of this question from Abram CR?

• 1:21:55David Hoffman?

  Yeah. So my podcast with Eric Wall, who actually is coming on next week with Nick Carter, actually, so we're actually going to talk about some of these things. Eric Wall and Nick Carter next week. I'm excited about that one. He made the very strong argument, which I'm on board with, that the ordinals blockchain is the more decentralized blockchain. But I kind of want to ask, answer a slightly different question, which is, is Bitcoin going to fork? Because there is going, there's a growing civil war happening, a growing division in the tribes of Bitcoin. There's you have the non-ordinals and ordinals, and then the ordinals. And so that is a new tribe, the new internal tribes of Bitcoin, and now they are fighting for power. And the last time this happened was the Bitcoin Cash versus Bitcoin Camp. And so does this create a division

• 1:22:40David Hoffman?

  strong enough to fight over a fork of Bitcoin? And my answer to that is I don't think so. I think this, this is fighting over social power. Who is at the helm of the ship? Can't really steer the ship because it's Bitcoin, but it's who, who is the bigger Bitcoiner? And who are the bigger Bitcoiners? Who are the bigger, better Bitcoiners? And right now, like Bitcoin Media, which runs the Bitcoin 2023 conference, which is going on right now? That that company that's actually is actually more or less the bankless of or yeah, the bankless of Bitcoin. They are similar in vibe, very, very thesis driven, perhaps very biased. I would call them very biased. They are the Bitcoin fundamentalists of the Bitcoin camp and they are starting to make ordinals content in the same way

• 1:23:24David Hoffman?

  that you and I enjoy smart contracts and tokens because they are interesting and they good to make content about and therefore benefits the bankless business model because our business model is content. Bitcoin media is also finding ordinals as a way to produce content because it's interesting and gets reads and clicks and likes and all that kind of stuff. And also, all of the people that I know and trust, like Eric Wall and Nick Carter are also like ordinals, good. And so I think

• 1:23:49Ryan Sean Adams?

  That's gonna win, David. That's gonna win in the social layers, my prediction.

• 1:23:53David Hoffman?

  100%. It's more like people like Ponzi's. We saw this in Bitcoin last week. And so I think the should the power, pendulum power has shifted towards the ordinal people.

• 1:24:02Ryan Sean Adams?

  Yeah, but you know what they're gonna want, David? They're really gonna want those Ponzi's to prop up their bags. Because anything Bitcoiners like is like number go up for Bitcoin? That's funny because that's a mechanism that Ethereum has that Bitcoin just doesn't, which is like, okay, you have a Ponzi, that's sort of annoying because it's making my transaction fees high. But then we go and we look at ultrasound dot money and we're like, oh, look at all the ETH that was burnt. And then ETH holders are happy again. Well, Bitcoin ordinals, maybe call them rather than small blockers, maybe they're just useful block blockers. Maybe that's the tribe.

• 1:24:35David Hoffman?

  Smart blockers.

• 1:24:36Ryan Sean Adams?

  Yeah, smart blockers. There we got is small blockers versus smart blockers. The smart blockers of the Bitcoin community don't get that benefit. Like, it's just not as fulfilling, I guess, if you want number to go up on Bitcoin.

• 1:24:50David Hoffman?

  But it does pay for security, which is, I mean, marginally, but non-zero now.

• 1:24:55Ryan Sean Adams?

  The public good. Yeah.

• 1:24:56David Hoffman?

  Non-zero now. Yeah.

• 1:24:58Ryan Sean Adams?

  All right, let's get to some takes, David. Here's the first one from you. This looks like a picture and I think you're wearing the T-shirt. Tell me about this.

• 1:25:04David Hoffman?

  Oh, yeah. Oh, I haven't talked about this yet. Look at the T-shirt. I got a T-shirt.

• 1:25:08Ryan Sean Adams?

  David's shirt, tornado cash symbol. I helped violate international sanctions and all I got was this lousy t-shirt.

• 1:25:15David Hoffman?

  Okay, so this t-shirt is nothing new under the sun for the people that are inside of the conference circuit, but I haven't gotten one yet. And I would like to say, not only have I violated international sanctions by receiving 0.1 ether from the dusting attack, I also sued the Department of Treasury over it. And so this t-shirt fits extra well.

• 1:25:31Ryan Sean Adams?

  Yeah. You're gonna be wearing that to the congressional hearing, or I guess the Supreme Court case.

• 1:25:36David Hoffman?

  Yeah. And so like Amin Soleimani, who like made this t-shirt, gave me this t-shirt. And so I thought, I thought, like, of course, I'm gonna take a picture with Amin. But then I was reflecting on this picture. And some people have probably mentioned me, mentioned Amin Soleimani, I've mentioned him on a handful of podcasts. But I wrote this longer tweet, which I think I kind of solidifies what this picture means to me. And so I say, this might look like a picture, but to me, it's so much more. Amin has been a personal hero and mentor to me throughout my Ethereum journey. Without Amin, Ethereum would be all rainbows and unicorns, but no claws or teeth. Amin taught me the importance of thinking adversarially, what's at stake, and what's at stake if we do not think that way. He was also my first big guest on my podcast before Bankless,

• 1:26:20David Hoffman?

  POV Crypto, back when I was absolutely no one. And I follow up and say, I would not have the balls to sue the Department of Treasury without the knowledge and leadership that Amin has shown this industry. So thank you, Amin, for the lousy t-shirt. Appreciate that.

• 1:26:35Ryan Sean Adams?

  That's really cool, David. Yeah, it's heroes in real life here. Here's a take from 0x Designer, "Onboarding the next billion users with words. How the term wallet is psychologically limiting Web3's growth potential, the case for abandoning it. Killing the idea of wallet, David, rather than connect wallet, just connect." I don't know if I totally agree with it, but 0x Designer bringing up some interesting points that maybe the thing we should be calling this thing, the mental model we should be using, is like more like an account. Because sure, it's a wallet in some cases, but usually when we're talking about finance, right? Sometimes, if you go to the social case, it's a profile, or it's an identity.

• 1:27:17Ryan Sean Adams?

  If you go on the art case, not really stuffing an art piece in your wallet, are you? It's more like adding it to your collection. If you're in the gaming world, this account is actually like inventory. If you're music, it's library. And so maybe we should start reframing this away from wallets and making it more generic. Calling this connect, calling this an account instead. An interesting point, I think, at least.

• 1:27:41David Hoffman?

  Yeah, I think, I think that makes sense because we always talk about like, oh, the future of the internet is like sign in with Ethereum. So like Facebook account, Spotify account, all of these things that there's a sign in button. It's just an account and the idea is that web three just replaces web two. So that makes sense to me.

• 1:27:57Ryan Sean Adams?

  David, what are you bullish on this week, my friend?

• 1:27:59David Hoffman?

  I got another picture, Ryan.

• 1:28:01Ryan Sean Adams?

  It's us.

• 1:28:02David Hoffman?

  This is a picture of us at Permissionless. Do you know when?

• 1:28:06Ryan Sean Adams?

  This was the night we had our, our party, right?

• 1:28:08David Hoffman?

  Yeah, yeah, the bankless party at Permissionless. Also one year ago as of today.

• 1:28:12Ryan Sean Adams?

  No way, that was a year ago as of today?

• 1:28:15David Hoffman?

  That was a year ago as of today.

• 1:28:16Ryan Sean Adams?

  Wow, the first time we met was at this conference and the only time, I will add.

• 1:28:21David Hoffman?

  Haven't seen you since, it's been a year since I've seen you, bro.

• 1:28:24Ryan Sean Adams?

  Were you worried that like when, when we did that, were you like, oh, I might not like this guy in real life? Like what if he's just like, what if, I don't know, he smells bad? What if the vibes are off? It sounds like this.

• 1:28:34David Hoffman?

  And so there, so we, you came up to when we met for the first time at the Airbnb. It was like five minutes until we had our company meeting and then we opened up the door, gave you a hug. And then I was like, uh, now what?

• 1:28:48Ryan Sean Adams?

  Now what? Do we continue the podcast or not?

• 1:28:53David Hoffman?

  Yeah, I was like, oh, thank God we had the meeting to like, kind of get the ball rolling.

• 1:28:59Ryan Sean Adams?

  Talk outside of this format, outside of the screen format.

• 1:29:03David Hoffman?

  Yeah.

• 1:29:03Ryan Sean Adams?

  That's funny. And I think the first meeting, I think the first meeting too, we had, I had like the laptop in front of me too. And I feel like I was like talking to you through the laptop as well.

• 1:29:12David Hoffman?

  Right, but you were also like right next to me as well. Yeah, you couldn't, couldn't look away from the laptop. So I guess I'm bullish on another year. I'll see you in September.

• 1:29:22Ryan Sean Adams?

  I'll see you in September, man.

• 1:29:23David Hoffman?

  September at Permissionless. But the other thing I'm bullish on, slightly related, is we're actually going to have this Twitter space with the Blockworks guys, the other dads. By the way, for Bankless listeners out there, for who don't know, internally to Bankless, the employees call me and Ryan dads. And so the Blockworks founders, Jason and Mike, are also called dads, apparently. And so we're having a dads and dads chat ahead of Permissionless, just company, media company in Web3 to media company in Web3. That is a Twitter space. That's happening on May 31st, I think. When is that? 12:00 PM Eastern Time? And so if you want to see just two groups of founders talk about media companies in Web3, we are bringing questions for Jason and Mike, and they are bringing questions for us. So.

• 1:30:06Ryan Sean Adams?

  No way. I didn't know we were doing that.

• 1:30:08David Hoffman?

  Yeah, we're doing that. Yeah, yeah, yeah. So that's going to be a fun time. It's going to be an hour of just like banter and stuff like that. So.

• 1:30:13Ryan Sean Adams?

  I like the Blockworks scene.

• 1:30:14David Hoffman?

  Yeah. All right. Ryan, where do you bullish on?

• 1:30:16Ryan Sean Adams?

  So before I answer that question, let me just say, this week felt really exhausting. Like, I guess maybe emotionally draining. So Bankless HQ, our Twitter account, put out a tweet headline saying Ethereum broke again, and then went through a thread. And the thread actually had some really good content. Like, I think it was largely accurate. The headline was off. The headline was a bit of hyperbole, I think. I think when our editors published it, they were thinking like, oh, yes, maybe it's satirical, maybe it's just kind of capturing attention, so people will read the rest of the thread. An innocent mistake,

• 1:30:56Ryan Sean Adams?

  in my mind, right? And this happened on a Friday afternoon, and I was kind of logged off. I was enjoying Mother's Day, my parents were in town, that sort of thing. And David, when I logged back on, on like Sunday, my God, it felt like the entire, like, we're used to getting attacked in all sorts of ways. But this was a little bit different because it felt like in Tribe, a lot of people we thought were like part of the, you know, the Bankless community that we've contributed a lot to, were just lighting us up and torching. Bankless for doing this, saying that we've transformed into like clickbait media. And yeah, it just got really negative. And I've been through these negative things before, as I know you have.

• 1:31:40Ryan Sean Adams?

  But I don't know why this one just hit me. Maybe it's kind of like apathy market, bore market, kind of hit me at the wrong time. Like last straw type of thing. I don't know what it was. We tried to apologize, but when you're being like sort of mob attacked like this.

• 1:31:57Ryan Sean Adams?

  Sometimes there's nothing you can do. There's nothing you can do. Anyway, so I posted this and I said, maybe it's the bird app talking, but I'm feeling sad right now. I described this as a low point. I was just feeling that way when I posted this. And this is a totally self indulgent like venter type of tweet. You're allowed. These are valid. The takeaway was like, is that a valid use of Twitter? The takeaway for me was like, why I was sad was because a bear market needs to be a time where the crypto community bands together and fights common enemies. Like we got them Gary Gensler and crew. Like we got all these common enemies. We build up, we support each other. So why are we so determined to eat our own?

• 1:32:35Ryan Sean Adams?

  And I said, guys, I don't know how we can expect to solve this coordination thing if our friend and enemy barometer stays max style to mercurial and unforgiving. This isn't about bankless. This is about all the good ones who've been burnt out by the negativity and pitchforking in crypto. Anyway, I tweeted this, a total event tweet. And David, the reaction from I think like the silent majority community of bankless listeners was just so powerful. Like, okay, so I know the reason you do this because it's the same reason I do this. The way my kind of energy gets filled up is when I hear from the community. Like when I know that we put out a piece of content that really helps someone learn something.

• 1:33:20Ryan Sean Adams?

  That means something to them, that kind of like educates them, that benefits the world. That's, that's why I do this, right? If it starts to feel like the content we put out is just not doing that, it's totally energy depleting. Or if it starts to feel like the content that we put out is like harming people or like causing negative value to people, that's when I'm just like, why am I doing this in the first place? Anyway, the reaction on the back of this was just stuff like this. This is a dartinian.eth. You guys changed my life, life. Thank you. Don't listen to haters. You gents have been inspiring me since November 2020 to be bankless. And I've been traveling the world for over a year because of y'all. The world needs you and your channel. You guys represent passion, honesty, intellect and honor with the Web3 space.

• 1:34:05Ryan Sean Adams?

  You're the cornerstone to this foundation and we need y'all to know it. And then he posts this picture of himself.

• 1:34:10David Hoffman?

  In Machu Picchu, wearing a bankless shirt.

• 1:34:14Ryan Sean Adams?

  This is so awesome. Anyway, it's just like, I feel like even the segment is somewhat self-indulgent. But let me just say, as a, as a content creator, like, this is the type of stuff that gets me excited about creating more content and doing more. You know, like this, this kind of stuff. And it wasn't just this response, there was a ton of responses. My DMs, tweets, all sorts of things. And I guess maybe more broadly, I want people to know, if you're in crypto, you're probably engaging in social media, right? Like it maximizes for toxicity sometimes. It maximizes for outrage. And they say this all the time, but like Twitter's not real life.

• 1:34:55David Hoffman?

  Right.

• 1:34:55Ryan Sean Adams?

  And yeah, and I guess I just felt that this week. And it's so easy to get caught in these, these bubbles of, of social media and kind of silos where you lose sight of that. But yeah, Twitter's not real life. So what am I bullish on? I'm bullish on the bankless community. I'm bullish that people continue to listen. To this episode, I think we're doing an okay job and I appreciate everyone who's tuned in to this point.

• 1:35:20David Hoffman?

  I think this last line that he wrote, D'Artagnan dot ETH, "You've inspired me to be a builder and I humbly have been grinding in the background as a pioneer like y'all, helping to create the foundation of our new digital economy." I think the main reason why I do this, Ryan, is that Ethereum, the idea of Ethereum, the idea of permissionless technology, sovereign individual technology, came to me in a time where I kind of needed it most of my life. I found Ethereum when I was in a dark spot and it allowed me to distract myself and then it allowed me to build a platform for myself and then it allowed me to see the world of self-actualization and agency.

• 1:36:04David Hoffman?

  And I think the subtext of Bankless has always been something like this. And when I see the silent majority of builders out there who listen to Bankless and follow us along on this journey, who have used Bankless to see in Ethereum, the thing that I saw and that we see in Ethereum, as scaffolding for self-actualization in the world, I, this is like, oh yeah, I'll take the hate.

• 1:36:27Ryan Sean Adams?

  That's why you're here.

• 1:36:27David Hoffman?

  I'll take the hate every single day of the week.

• 1:36:29Ryan Sean Adams?

  It's worth it.

• 1:36:29David Hoffman?

  Yeah.

• 1:36:30Ryan Sean Adams?

  It's worth it.

• 1:36:30David Hoffman?

  100%.

• 1:36:31Ryan Sean Adams?

  100%. That's cool. I think you said it even better than me. Guys, so we appreciate you. Thank you all Bankless listeners, even the silent ones. We appreciate you guys. David, meme of the week, what are we looking at this week?

• 1:36:42David Hoffman?

  So this is the, "I prefer the real blank meme for an app, meme for an app." And it's the first one, Doge, and then the guy says, "I prefer the real shitcoin." And then it's Pepe, and then he goes, "I prefer the real shitcoin." And then it's the dollar, and then the guy goes, "Perfection." But I've manually added one more layer, which is, "The real actual shitcoin is this $1 trillion coin." So if the dollar's a shitcoin, the $1 trillion coin is a trillion times more shitty.

• 1:37:12Ryan Sean Adams?

  That hasn't been minted yet, but the moment it is.

• 1:37:14David Hoffman?

  Yeah.

• 1:37:15Ryan Sean Adams?

  Wait for it. Yeah, wow. All right, Chris and disclaimers, of course, as weird as the internet is, crypto is always weirder and it's more risky, 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.