ROLLUP: Ripple (XRP) Wins Big in the SEC Lawsuit | Google Play NFTs | Layer 3 Summer

2nd Week of July 2023 ------ 🚀 Join Ryan & David at Permissionless in September. Bankless Citizens get 30% off. 🚀 https://bankless.cc/GoToPermissionless ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2 🦊METAMASK PORTFOLIO | TRACK & MANAGE YOUR WEB3 EVERYTHING https://bankless.cc/MetaMask http://bankless.cc/MetaMask ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle 👾POLYGON | VALUE LAYER OF THE INTERNET https://polygon.technology/roadmap ----- Timestamps 0:00 RIPPLE VS SEC Breaking News - https://twitter.com/tier10k/status/1679512873498816519?s=20 Explained - https://twitter.com/BillHughesDC/status/1679525517068759040?s=20 A Huge Win - https://twitter.com/adamscochran/status/1679515814272155648 Tom Emmer - https://twitter.com/GOPMajorityWhip/status/1679525171479150592?s=20 Richie Torres - https://twitter.com/RepRitchie/status/1679534903661301761?s=20 Coinbase Relisting - https://twitter.com/coinbaseassets/status/1679575239657758721 RSA Take - https://twitter.com/RyanSAdams/status/1679534121100476417?s=20 5:20 Waking Up Bullish 7:15 Permissionless https://bankless.cc/GoToPermissionless 7:55 MARKETS 9:10 Bond Markets Trad - https://www.visualcapitalist.com/ranked-the-largest-bond-markets-in-the-world/ New - https://coinmarketcap.com/view/staking/ Fed Funds Rate - https://panteracapital.com/blockchain-letter/bonds-down-crypto-up/ 16:30 The Internet Bond https://ultrasound.money/ 23:22 Liquid Staking https://www.bankless.com/whats-next-for-liquid-staking-2 31:25 Tokenized Treasuries https://www.coindesk.com/markets/2023/07/11/tokenized-us-treasurys-surpass-600m-as-crypto-investors-capture-tradfi-yield 34:30 Bank of America Bullish https://rsch.baml.com/access?q=s-i517792VNkDKydHLEioQ 35:20 Correlation with Stocks https://panteracapital.com/blockchain-letter/bonds-down-crypto-up/ NEWS 41:00 Arkham Intelligence https://twitter.com/ArkhamIntel/status/1678339355314900992 46:55 Technofascism https://twitter.com/scott_lew_is/status/1678772359648641028?s=20 51:15 Are the Devs Leaving? https://www.developerreport.com/blog/newsletter-20230706 53:12 Google Play NFT Policy https://android-developers.googleblog.com/2023/07/new-blockchain-based-content-opportunities-google-play.html 55:45 Solana Phone https://twitter.com/aeyakovenko/status/1679278533800235009?s=20 58:30 Linnea L2 to Mainnet https://twitter.com/LineaBuild/status/1678738006646177793?s=20 1:00:13 Mantle Network https://www.mantle.xyz/ 1:01:20 Gitcoin Public Goods L2 https://twitter.com/pgn_eth/status/1676972199423668228 1:06:30 GHO Stablecoin Mainnet https://app.aave.com/governance/proposal/?proposalId=268 1:10:25 EigenLayer Reopening https://app.eigenlayer.xyz/ 1:12:30 Vitalik Bitcoin Takes https://cointelegraph.com/news/vitalik-buterin-ordinals-revived-developers-on-bitcoin 1:16:45 Gemini Suing DCG https://twitter.com/cameron/status/1677327395869581316?s=20 1:17:22 Jay Clayton BTC ETF https://twitter.com/DefiantNews/status/1678434627768446977 1:19:15 Rishi Likes Crypto https://www.wired.co.uk/article/london-wants-american-crypto-refugees 1:21:1 Brazil Ethereum CBDC https://twitter.com/vinibarbosabr/status/1678511772775374850?s=20 1:27:00 Questions from the Nation 1:30:00 TAKES 1:34:30 The Fink Effect https://twitter.com/mskvsk/status/1677937403733106688 1:36:00 Still Using Venmo https://twitter.com/ryansadams/status/1679236595105382402 1:42:00 Crypto is a Scam https://twitter.com/RyanSAdams/status/1679077948463144961?s=20 1:45:50 MEME of the Week https://twitter.com/spreekaway/status/1677316680588967937 1:46:45 The Daily Gwei https://www.youtube.com/channel/UCvCp6vKY5jDr87htKH6hgDA 1:47:30 Where’s David? https://twitter.com/TrustlessState/status/1678473614818156544?s=20 ----- 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.

• 0:00Ryan Sean Adams?

  A US court has ruled that XRP, the asset, is not a security. In the words of the judge, "Ripple's sales of XRP do not constitute an offer of investment contracts." XRP, not a security. This is absolutely huge because if XRP isn't a security, then nothing in crypto is a security. Now, that's a little bit hyperbolic. Of course, it's possible to tokenize a thing that is a security and issue a security on-chain. But what it does mean is the SEC's overreach, their regulation by enforcement, their allegations that Coinbase is an illegal securities exchange,

• 0:41Ryan Sean Adams?

  their court filings indicating that Solana, that Filecoin, that Matic, that Atom, that Cardano, that all of these are securities. Well, how can they be securities if XRP isn't? How can ETH be a security if XRP isn't? This is important precedent that was just set and I think puts Gensler back on his heels. It's a setback for Gensler and for anyone in the SEC who thinks that this regulation by enforcement activity can continue. It's a check on their power. And all of this came about, of course, from a multi-year court case between Ripple, which is the company that originated XRP, and the SEC. We haven't talked about it much because it's been on the back burner for so long. But now here it is. This is a tweet from Bill Hughes. He is a crypto lawyer.

• 1:26Ryan Sean Adams?

  He says this, "The SEC versus Ripple. In brief, here's what you need to know. Ripple putting XRP on exchanges for trading and funding their operation with those sales is not an investment contract and therefore not a security." That's what the court said. Also, Ripple paying people in XRP is not an investment contract and therefore not a security. And XRP is not a security in and of itself, even when offered through a securities transaction. So this turn of phrase, "investment contract." XRP is not an investment contract when it's on an exchange. If you pay people with it... Or even when it's offered through a securities transaction. That's what the court ruled.

• 2:07Ryan Sean Adams?

  However, the court did say that Ripple's original selling of XRP directly pursuant to contracts was an investment contract and thus a security. So originally, XRP was a security and became not a security at some point in time. Bill also says, "I'd be shocked if the SEC doesn't immediately appeal this to the second court because of course, this is a big setback for the SEC." I also agree with Adam Cochran's take here. He says, "Overall, this is a huge win. XRP is one of the more centralized foundations with a key figurehead who has had standard sales via exchanges and formal distribution programs. If those aren't securities, nearly nothing sold via exchange is." We also have some weigh-in from politicians. This is Representative Tom Emmer, Majority Whip.

• 2:52Ryan Sean Adams?

  He's been on Bank List before. "The Ripple case is monumental development in establishing that a token is separate and distinct from an investment contract." Did you hear that, SEC? "The token is separate and distinct from the investment contract it may or may not be part of." Now, he says, "Let's make this law." Wants to take this court precedent and make it law, generally applicable. Representative Richie Torres, on the Democrat's side, also weighs in on all of this with an attack against the SEC, saying, "The SEC is acting like an overzealous traffic cop arbitrarily ticketing drivers while keeping the speed limit a secret. It prefers to communicate by enforcement rather than by rules or guidance, but that's no way to regulate digital assets.

• 3:37Ryan Sean Adams?

  I'm calling for an investigation of the SEC." So some heat from that as well. Some of the major exchanges, including Coinbase, also issued, "Within hours." Coinbase will be re-enabling trading for XRP on the XRP network, they say. I suppose they feel safe in doing this, given that the US court system has ruled that XRP is no longer a security." So that's what just happened. I'll end with my take here, which is, this doesn't really matter what you think of XRP, the asset, or Ripple, the company. I personally think XRP is an overvalued project riding on some vapor, riding on a passionate, some might say, a shilly community. And I never thought I'd be saying this, all right?

• 4:23Ryan Sean Adams?

  Thank you, XRP. You stopped Gary Gensler's onslaught against crypto. Because if XRP isn't a security, then almost nothing is. I'll end it there. We're going to discuss this in more detail on Bankless in the coming days. I'm sure there's some things I missed here. This is breaking news. As I said, there's questions of whether Gensler and the SEC can appeal this. There's questions like, is it clear skies ahead for security regulations in the US? I imagine there's some subtleties there. I imagine there's still some work we have to do. We'll get to all of those details. In fact, later today, I'm recording with Mike Selig. He's a crypto lawyer, and we're going to explore this in some more detail. But today, for now, on the roll-up, this morning, we get to celebrate this win.

• 5:08Ryan Sean Adams?

  And I can't believe I'm saying this, but thank you, XRP.

• 5:14Ryan Sean Adams?

  Bankless Nation, it is the second Friday of July, and it is time for, of course, the weekly roll-up. I have Anthony Sisano from the Daily Gwei with me for the second week in a row. While David's up exploring some mountains, and we got some topics to cover this week. Anthony, how are you doing this morning?

• 5:33Speaker 01

  I'm very good. I'm very bullish today, actually.

• 5:36Ryan Sean Adams?

  Wait, you woke up bullish? That's a thing you say on the Daily Gwei, right? Like, so what constitutes Anthony waking up bullish versus all of the other days of the year?

• 5:45Speaker 01

  I think I wake up bullish every day, to be honest. Doesn't matter what the price is doing. I just wake up and, you know, I do my usual check Twitter routine. And I'm just like, you know what? I love this industry so much. I'm so bullish.

• 5:56Ryan Sean Adams?

  So you still have faith in this industry? You haven't given up on crypto?

• 6:00Speaker 01

  No, no, no. I mean, look, crypto to me is a broad term, right? I obviously focus mostly on Ethereum, but no, I mean, everything that I'm seeing in the Ethereum ecosystem, just every day, it's just crazy. I honestly can't keep up with it anymore. It's just, there's too much.

• 6:16Ryan Sean Adams?

  Well, guys, if you want that bullish energy injected straight into your veins, this is the place to get it. This is the weekly roll up where we cover everything going on that you need to know about crypto. A few topics of the week. Number one, we're going to talk about this new marketplace for doxing crypto addresses. Is everyone in crypto about to get doxed? Some controversy surrounding a new bounty program that rewards people for doxing crypto addresses. We're going to get into that. Also, the Google Play Store, they just did an about face on their policy in a good way. Now NFTs are unbanned. They are allowed. We're going to discuss that as well. AVE is about to launch its new stable coin as well. It's called GO. And is this the stable coin we've been waiting for?

• 6:58Ryan Sean Adams?

  Or is there another? Anthony, I want to pick your brain on that. As always, you've got to make sure you like, subscribe, rate and review. If you're on YouTube, subscribe. If you are listening to this on a podcast player somewhere, give us a rate and review and let's propel this thing to the top of the charts. So much to cover in markets this week, Anthony. But before we do, a quick shout out. We are going to the Permissionless Conference. That is the Bankless Nation, David and myself. That is coming up on September 11th through the 13th. So we're almost all the way through summer in the US and it's time to book your ticket, guys. And I think the bear market is the best time to go to a conference. This is an opportunity to network, to meet all of the settlers who stayed during crypto

• 7:40Ryan Sean Adams?

  winters and to find your bear market buddy, as David and I like to say, a fire lineup. There's 120 speakers. We're expecting 6,000 attendees, 1,500 different crypto projects, and it's all in Austin. If you're a Bankless citizen, you get a 30% discount. There is a link in the show notes to go do that. All right, Anthony, let's get to the markets. Thanks to Kraken Pro for showing us these charts today. Bitcoin price, we're about flat since the last time you and I talked about this. About 30K on the week. Any takes on Bitcoin this week?

• 8:13Speaker 01

  I think, I mean, similar takes to last week, right? Where I basically said that I thought that the market was trading just purely based on narrative, that ETF narrative. And I didn't expect any wild moves from here because of that, because there doesn't seem to be any new money coming in. And I think that's basically been playing out over the past week, but it's only been a week, right? You know, next week, we could be, we could go up 10% for, you know, that's the volatility in crypto. So yeah, I think just more of the same really over the last week.

• 8:38Ryan Sean Adams?

  Well, ETH is more of the same as well, kind of down a little bit, but pretty much flat. I'm just gonna call it flat. 1880 at the time we're recording this, which means, of course, the ETH to Bitcoin ratio is flat. The good news here is crypto market cap is over $1 trillion. I don't know about you, Anthony, but that's kind of a meme number for me. Are we above a trillion or below a trillion? Of course, there are a lot of tokens in this market cap that maybe should be worth a lot less, but it feels good to be above a trillion. We are at 1.3 trillion on the week. Well, if there's nothing going on in the short run, or at least not much, we're waiting for the next price action. I want to zoom out a little bit, and I want to talk to you about three things in this

• 9:20Ryan Sean Adams?

  market section. One is bonds. The second is staking, in ultrasound money, and the third is real-world assets. So, let's start by talking a little bit about the bond market. And I want to do almost like a tale of two bond markets here, because we've got the fiat bond market, and then we have the crypto bond market and the Ethereum bond market. And I think there's an analogy that fits, that spans across both of them, that I want to implant in listeners' heads and get your thoughts on here. First of all, when people say "bonds," a lot of times it just sounds like this obscure financial instrument. But

• 9:59Ryan Sean Adams?

  what is a bond, actually? A bond is just a form of debt. So when you buy a US bond, that would be a treasury, something to that effect, you're essentially lending money to the US government. In the same way, when you buy a liquid staking token, called these LSDs, or when you stake your ETH, you are lending Ethereum, the Ethereum protocol, some money. So that's why we call staking ETH or staked ETH a "bond," essentially. It's an Ethereum bond. I don't know if you've seen this infographic, Anthony, at any point in time, but this is what the global bond market looks like. And I'm going to describe

• 10:40Ryan Sean Adams?

  some of this for listeners who are listening on the podcast. This is all of the sovereign bonds. About a $60 trillion market. So these are all of the bonds that nation states issue. So call these nation state bonds, if you will. And 60 trillion worth of that, you know, 51 trillion is the US. Actually, these numbers are a little bit larger. So it's maybe this is 70 to 80 trillion, 20 trillion or so is China. And you can see all of the other nation states encompassing this pie. That's the size of the sovereign bond market. So I want to contrast the nation state bond market, which is about 60 to 70 trillion dollars or so to the network state bond market,

• 11:23Ryan Sean Adams?

  which is only about 70 billion right now. And of course, Ether, the asset, the bond, composes the vast majority of that, about 40 billion or so. And then we've got Solana, we've got Cardano, we've got some other chains here, of course. So we've got a tale of two bond markets. And I was reading this report from Pantera earlier this week, Anthony, about the US bond market. And Pantera's perspective, they're obviously, they've been in crypto for a very long time. But their perspective is that the US is totally screwing up its bond market, like turning it into a complete Ponzi scheme. And one way you can see that is this metric called the real Fed funds rate.

• 12:07Ryan Sean Adams?

  Okay, so the real Fed funds rate. So what you can see on this chart is the Fed funds rate is basically the interest rate set by the Fed. That's sort of in yellow, that's this yellow line here. And then you see CPI. So core CPI, that is Consumer Price Index, that is the measure of, a measure of inflation, is this dotted line. Everywhere where you see kind of red, the shading pattern of red, that's where the Fed funds rate is below the core CPI rate. It's basically like you're buying a US bond, a sovereign bond, in order to get a yield. Say yield of like 5%, but CPI, but inflation is like 8%.

• 12:50Ryan Sean Adams?

  In which case, how much are you making in real returns, in real Fed funds rate? Well, negative 3%. So you're kind of losing money on that. And it's very interesting. You see like post 2008, the, you know, the great financial, the financial crisis here. It's been red basically ever since. And up until it hit a high point, I believe, lowest point of the year, negative 6.3%. That's the lowest in the last 50 years that the real return on, on bonds have been on essentially this Fed funds rate, which is pretty crazy. So you can start to see that the case that this

• 13:33Ryan Sean Adams?

  sovereign bond market is not actually producing a real rate of return. I want, I want to pause here because next we're going to contrast that with what's going on in crypto. Maybe we'll take a peek at the Ethereum bond market in some detail. But what's your take on this, Anthony? Like, who in the world is buying bonds right now?

• 13:53Speaker 01

  So I mean, I got to preface this and say, obviously, I'm not an expert on, on this kind of stuff. Definitely more of an observer. But it seems to me that the, the COVID, I guess, response and COVID generally has distorted a lot of this because you can see it in, in the chart, right? It seems to have distorted a lot of this. And also post 2008, as you were pointing out, how it was, rates were so low for so long. But then you can see that they were kind of trickling back up and then COVID happened and then back down again. Right? And it's, it's kind of funny how similar a lot of these charts look with COVID. Like, there was the COVID dump, I guess, initially in stocks, right? And crypto. And then we, we went, we went up after that. And because, you know, the rates were basically at rock

• 14:36Speaker 01

  bottom again. And then the rates started going up and everyone got scared. And I guess like risk on assets kind of went down. But yeah, just generally, when, when you're talking about like buying bonds and getting that real return, I think that if you weren't in a bond and just in cash, obviously, and that's not cash in like an interest bearing account or something like that.

• 14:55Ryan Sean Adams?

  You're losing even more.

• 14:56Speaker 01

  You're even worse off.

• 14:57Ryan Sean Adams?

  Yeah.

• 14:57Speaker 01

  Exactly. Yeah. So it's kind of like, yes, you might be losing like whatever it was, 0.3%, but you're much better off still doing that than just leaving cash lying around. But at the same time, You know, it's all about the appetite of investors, right? Like buying a sovereign bond, especially the US bond, is like the least riskiest thing you can do because you have the full weight of the US government behind that, right? Like you, literally, it's the, you're buying into the US government essentially. So it's considered the least riskiest thing you can buy. But at the same time, like, is it really like worth not taking on a little bit of extra risk to just get much more return potentially with your dollars, right? With some risk assets such as a BTC or an ETH, right?

• 15:41Speaker 01

  Or even a gold, which has done comparatively well. So yeah, it certainly begs the question is like, who is buying the bonds, right? Over these other things?

• 15:50Ryan Sean Adams?

  Well, what's interesting is part of the answer to that question is in a big way, banks. So central banks are buying their own bonds. That's why Pantera is calling this kind of like a Ponzi scheme. So central banks own about 50% of the sovereign bonds that are out there. That's what quantitative easing is. So many of these modern, your central bank policies actually do is they buy bonds on the open market. So that has kind of a distorting effect as well. But it's really interesting when you start to look at real returns, which is, okay, what's the yield of the underlying bond? But like, you have to look at the yield minus inflation, right? That gives you your real return. Now let's contrast that to Ethereum, which I think is, is kind of interesting here.

• 16:33Ryan Sean Adams?

  So remember Ethereum is very much like staked ether is like a bond. You are lending ether to the protocol of Ethereum. And Anthony, when you were saying the risk-free rate, it's kind of the lowest risk type of your financial asset you can, you can have is owning US bonds or US treasuries. Staked ETH is the lowest, like the highest yield. It's almost like the risk-free rate of ether as an asset, right? You can't deposit your ether anywhere else and expect to receive a return of any size at lower risk. So it almost represents the risk-free rate here, which is kind of cool. And the contrast here is this to me looks a lot, I'd call

• 17:19Ryan Sean Adams?

  It healthier, but because you don't have the the money printer, the algorithm doing open market operations and purchasing staked ETH, like LSD tokens in the open market. That's what central banks do. It's completely transparent. So you can see it kind of block by block. There aren't arbitrary decision makers who are adjusting the dials up or down. It just kind of follows the the the algorithm. And if you look at kind of, I guess, maybe the comparison is the real rate of return. And since, you know, since the merge, the real rate of return has been what? Like something between four and six, or the actual rate of the nominal rate of return has been about between four and 6%.

• 18:04Ryan Sean Adams?

  And then if you take the the burn there, then you have to kind of like add that. So you're at like the burn since the merge has been 0.3%. And so the real rate of return looks far more attractive on a staked ETH versus sovereign bonds versus something like a US Treasury. And I just think this contrast is so stark and so interesting and does beg the question of like, if you are looking at any sort of time horizon, you have some extra capital, you're looking at a time horizon that's longer than like a year, let's say. Why would you hold these sovereign instruments that are bleeding effectively?

• 18:49Ryan Sean Adams?

  Like your real rate of return is going down when you can own an asset like Ether, but where, I mean, it's it's a positive rate of return. Now, people say, but that's ETH denominated, right? It's not like, you know, real money, you know, but I don't know. I kind of go back to like, look over the longer time horizon. One ETH is one ETH. What are your thoughts on this in this comparison in general, Anthony?

• 19:14Speaker 01

  Yeah, so I mean, there's generally a lot of things I could say about this. Maybe the denomination thing is somewhere good to start. So yeah, when people say, oh, but it's ETH and it's not US dollars. So it's completely different. The way I think about stability generally is that, as you said, one ETH equals one ETH, one US dollar equals one US dollar, you know, one AUD equals one AUD. But the thing is, is that like it's stable relative to itself. So if you start comparing a US dollar to your grocery bills, well, over the last two years, US dollar hasn't been very stable compared to your grocery shop, right? Your grocery shop has gone up because there has been inflation and because of just prices generally going up because of supply chain constraints and all those sorts

• 19:56Speaker 01

  of stuff that happened because of COVID. And the same is true for any asset. You can compare any asset to any other asset. And that's where we come to things like stores of value, like where do you store your wealth in order to protect yourself in the most kind of like, I guess, risk free or riskless way, so that you're not taking on a massive amount of risk, like investing in a brand new company that has a 5% chance of succeeding or something like that. And traditionally, it has been obviously the strongest currency, USD, which is the world reserve currency, or it has been gold for a very long time. And then over, I guess, like the last, I want to say 10 years, but probably less than that, in terms of BTC and ETH being considered stores of value. You can say five to 10 years, I guess. It's been those assets, right? People say, well, you know,

• 20:39Speaker 01

  I can store my wealth in these crypto assets. I mean, I do it, you do it, we store our wealth in ETH, and then we stake ETH, of course, as well, to get that return. And you were mentioning how it's a real return. So when you stake your ETH, there are really, I guess, three parts to it. You get a new ETH issuance that gets paid out to you as a reward. You get the ETH bet that gets paid out as fees as a reward as well, anything that's not burned, of course. And you get MEV related payments too, if you're running the MEV Boost software, which most people do. I think it's up to like 95% of validators are kind of talking to that software. So the later two parts, the unburnt fees and the MEV, that is not new issued ETH, that is existing ETH that already exists in the Ethereum economy.

• 21:24Speaker 01

  That is paid by users to do whatever on the network. The only new ETH that is issued is on that consensus layer side rewards, which is the, the, the new ETH that is printed. But the thing is, is that we're burning more ETH than is issued. And we've been doing this for quite a while now, especially since the merge, which means that the net result, as you mentioned, is that since the merge, we are at negative 0.3% inflation rate or issuance rate for ETH, the, the, the net rate. Um, and on top of that, it is much harder to print new ETH than it is to burn it. Because you have to basically outrun the burn. So even if the, the, the burn is really low, even if gas fees are quite low and the burn isn't actually,

• 22:08Speaker 01

  um, you know, at, at, at, at, um, uh, high amounts, it doesn't matter because you're still burning, um, almost the same, if not the same as what's being issued. So the issuance isn't actually increasing from that. It just basically stays flat. And that's what we've seen, um, at, at periods of time. And you can actually see this on the chart. For the last few weeks, we remained relatively flat with increasing slightly. But then we started burning more ETH again over the last, I think, couple of weeks or, or, or so. Um, you can see, uh, yeah, over the last 30 days, you can actually see how it worked out here. Um, and then we're just going straight back down because it's much easier to burn ETH than it is, uh, to issue it. Now, of course, issuance changes as more ETH is staked, there's more ETH issued. Um, but still, I, I, I feel like the more ETH that gets staked, the more, um,

• 22:53Speaker 01

  the more activity is happening on the network because people are using that staked ETH for different things like restaking such. So the, the fees will probably, uh, level that out. Um, and yeah, all that just culminates in such a nice, real yield on your staked ETH and a very, very attractive asset as a store of value.

• 23:09Ryan Sean Adams?

  Totally. So you woke up bullish, Anthony. I woke up bullish on staked ETH. Like, it's just incredible. You gotta look at the real, um, return here and the real return of an asset like Ether when it's staked, when it's bonded is just, uh, incredible. Um, I, I want to ask you another question because people listening to this section might also get kind of bullish and they have some ETH and they're like, okay, guys, I, I still haven't pulled the trigger. I still haven't staked. My ETH, where should I stake it? How do you think about that question, Anthony? So there are a lot of different options in terms of staking ETH, including, by the way, all of these liquid staking tokens and options as well. So Bankless just put out a post about this and there's a slew of new ones.

• 23:53Ryan Sean Adams?

  Prisma, Swell, Unsheath, Origin, Ether, Diva. There's tons of them. I can't even keep up with all of the new ETH staking protocols that are essentially innovating on the bond market by making some of these, some of the staked ETH liquid. And that's really interesting. But for the average listener, thinking about how to stake, they could put their Ether into an exchange. For example, a centralized location and stake that way. They could use a staking protocol, one of these new ones, or some of the established ones like Rocketpool or Lido or something like that. Or they can solo stake.

• 24:31Ryan Sean Adams?

  What's your take on that? Like, what advice do you generally give?

• 24:35Speaker 01

  Yeah, I mean, the thing is, is that like, there's a bunch of different questions that you should be asking yourself before putting your money into any of these things or before putting your ETH into any of these things. I think the number one question is like, how old is the protocol? Because security of the protocol and its smart contracts should always be top of mind. Because the newer protocol is going to be less secure than something that's older, that's been around for a while, that has been able to be battle tested. So that should be top of mind for everyone.

• 25:02Ryan Sean Adams?

  Like particularly these new ones. You're just a little bit like, oh, they don't have a Lindy. Like, be careful.

• 25:08Speaker 01

  Exactly. I'd be more careful with them than say something like a Rocketpool or a Lido that's been around for quite a while now. I would definitely be more careful with the newer ones. That's not to say that they're insecure or that they're going to get hacked or anything. But you need to be aware of that risk, especially when using newer protocols. And of course, older protocols can still have bugs in them. But it becomes, you know, less and less of a possibility or probability as time goes on. But on top of that, I would also say, depending on what kind of size you're staking for these LSTs, if you're planning on selling on secondary market when you want to exit this position, you should really be aware of what the Liquidity is like for these LSTs because some of them, especially the newer ones, aren't going to have that much liquidity to start off with.

• 25:50Speaker 01

  So if you're putting in a substantial amount into these things, you may not be able to exit with the same amount you put in. Because you'll cause some kind of price slippage because you've got, you're just trying to sell too much at once or something like that. So that's something to consider. Other things to consider, obviously, are you putting ETH into something that is decentralized? Or is it going to be decentralized? Or are you staking with a centralized service? Are you staking with the dominant player? A lot of people say, well, you know, you shouldn't stake with Lido because they already have a very large market share. You should stake with one of these other players and I definitely agree with that. But at the same time, you do have to consider these other questions that I brought up, especially around security and liquidity. And things like that. And also the models of these things as well, depending where you are in the world.

• 26:32Speaker 01

  There are two different ways that these tokens, these LSTs can operate. They can either be rebasing or they can be, or they can pay you out extra tokens as rewards. So it rebases or it can pay out, or sorry, all the token price, sorry, the token value increases with the rewards. And that could have tax implications for you. You could owe tax on that. Or you could owe tax on the rebasing one. It just depends on where you are. So that's another question to ask as well. So there are a lot of considerations here, but generally I would run through all of those things before staking with anything really. And then when it comes to solo staking, there are really just considerations with solo staking of, of a different nature. Because with solo staking, you're running the software.

• 27:18Speaker 01

  If you're, you know, if you're buying an LST, you're not running the software. You're just buying the token. Someone else is running it. But as a solo staker, you are running all of the software. You are managing all the hardware. There is a lot more that goes into it in that respect. You have all this, most of the same questions around, around the things I just brought up. But you also have to worry about uptime. You have to worry about making sure that you are upgrading when there's an upgrade. Like when there's an Ethereum network upgrade, upgrading your clients if there's a bug.

• 27:43Ryan Sean Adams?

  How much work is this? Cause I know, I know you do this with solo staking. So like, um, all right. So per month, how much time are you spending kind of babysitting it?

• 27:52Speaker 01

  Uh, zero now. Um, honestly, once it's set up and going, uh, and you know, you don't have like, I guess, any hardware issues where something breaks for some reason, uh, generally it's zero. And a- as I said, unless there's like a network upgrade that you need to upgrade your software for, uh, or there's kind of a bug or something, because you can set it up in a way where the, the thing that you're, uh, the, um, the, the instance that you're running. So I run Linux. You can set it up so that automatically updates itself and then automatically reboots to install those updates. So you literally can be completely hands off and it, it, it, it really just depends as well because something could go wrong, like your internet going off or something, and then you have to diagnose it right, or, or, or some other thing, or something becomes corrupted.

• 28:36Speaker 01

  But if everything's running fine, then yeah, the maintenance is, is, is, is generally pretty low. Uh, but yeah, people, people have different reasons for being actively ma- actively maintaining it. Some people wanna, uh, optimize it as much as possible in order to kind of like, get like near that hundred percent uptime or something like that. So if you're not too worried about that and you're okay with 99%, then yeah, it's pretty much like hands off most of the time.

• 29:00Ryan Sean Adams?

  Do you know the, the thing that scares, uh, me or a lot of people, I think about this is just like the idea of losing your private keys, like walking yourself out somehow, right?

• 29:08Speaker 01

  I was gonna, I was gonna mention that.

• 29:10Ryan Sean Adams?

  How much of a concern is that? Like, so a lot of people listening, of course, to Bankless will, um, have taken custody of their own keys and then wallet like MetaMask or a Ledger or something like that, right? And that, you have to know a little bit what you're doing before you go do that, right? If, if I'm advising, say, my parents or something, I'm just like, yeah, dad, keep the money on Coinbase. Like, it's, you know, it's fine until you learn how to do private key management. How much more technical do you need to be in order to safe, safeguard your keys in a solo staking type setup?

• 29:41Speaker 01

  So the keys themselves, it's no more involved than, than just, uh, like doing a self custody kind of setup with a Ledger hardware wallet or a good plus or something like that, or even just, uh, securing like your MetaMask seed, right? Um, that it's, it's basically the same approach. Where it becomes a little bit more complex is that you have these validator keys that are on the, I guess, like machine that you have your validators on. Now, if that machine becomes compromised, so some, say someone hacks into it, they can't access your ETH because they don't have your, your private key and they don't have your, your seed phrase. But what they can do, and Vitalik has spoken about this, they can do like a- A thing where they slash you, they get you slashed, right? They want to be malicious. They don't make any money from this, but if they want to be malicious and get you slashed,

• 30:23Speaker 01

  they could literally run your validator keys with their validator, right, on their, on their software, and then do something that gets you slashed. Now, that I don't think is a huge concern, to be honest. I don't think it's something the everyday person needs to be worried about, especially.

• 30:40Ryan Sean Adams?

  The incentives for someone to do that, it would just be because they hate you. Like, they're not gaining anything from this. They're just burning yourself down. It's like arson.

• 30:48Speaker 01

  Yeah, well, pretty much, yeah. So the, definitely, the incentive is not there to do this at, at kind of like a scale unless you like really hate someone or you really want to target someone. And the bigger players, I mean, you would think, they, they do generally, but you would think they have a better secure setup than, than just the smaller players. Because some people will have a, have something that they've set up and they haven't secured it properly. But yeah, I mean, for, for someone to go in there and get you purposely slashed, they'd have to hate you or something. This is no benefit for them to do that, other than that.

• 31:17Ryan Sean Adams?

  Well, very cool. Anyway, lots of options for, for you to look into if you're looking at, at staking your ETH and, you know, some, some ramifications, but more options is, is always better here. I guess in contrast to what I was just talking about, about like no one buying bonds, here's a, here's a headline from CoinDesk, "Tokenized US Treasuries Surpassed $600 Million As Crypto Investors Capture TradFi Yield." So we are actually increasing in, in crypto, the tokenization of these treasuries and these sovereign bonds, like US treasuries, past $600 million is the latest number. What are your thoughts on like tokenized treasuries and real world assets on chain? Do you have

• 32:02Ryan Sean Adams?

  a general perspective on this trend?

• 32:05Speaker 01

  Yeah, I mean, this is the bridge, right? This is the bridge from, from DeFi to TradFi. I think that we've had real world assets be incredibly successful on Ethereum in the form of stable coins for, for very many years now. I mean, people forget that stable coins are real world assets. USDT, the first at-scale stable coin, that's, that's absolutely massive, has been around for a very long time. And that is a real world asset, has real world USD in a bank account that backs up the USDT, same with USDC. And now what we're doing is we're taking all these other assets and we're saying, hey, we can bring these on chain as well. And then everyone around the world. Can get exposure to these things. Yes, they're KYC'd and AML'd and things like that as well. But I mean, I don't think that's necessarily something to worry about or necessarily a bad thing.

• 32:48Speaker 01

  I think that that is just the way the old world operates and what the way that will continue to operate for various different reasons. But yeah, I mean, I've talked about real world assets generally for quite a while now. And I said that they were going to be a main theme in this bear market especially, but also in the bull market. Because at the end of the day, everyone in crypto likes to call stocks like boomer things. But I mean, the young people still love stocks. Like, it's not like the only people buying stocks are boomers. And at the end of the day, a lot of young people, even if they're not buying stocks directly, they're buying it through their 401k or their retirement accounts, right? So at the end of the day, stocks, they're going to be popular. People are going to want exposure to it. Honestly, I would probably be more inclined to buy stocks if I could buy them using crypto rails than traditional rails.

• 33:32Ryan Sean Adams?

  It would be so much more convenient than using like my Schwab account or Fidelity or whatever else. It's just better, better infrastructure.

• 33:40Speaker 01

  Exactly. So yeah, just overall very bullish on real world assets.

• 33:43Ryan Sean Adams?

  Well, I mean, to your point earlier, like, you know, I was disparaging, I guess, treasuries and sovereign bonds. But they are better instruments from a real return perspective than just holding the dollar relative to inflation. And so when we have treasuries that are yielding like four to five, you know, percent. And if you could tokenize them and hold them on chain, I'd rather hold up four, five percent yielding treasury than USDC. If that was tokenized, it'd be really cool if Circle or someone was able to come out with a product around this. Where we just ERC 20-assized a treasury or a money market of some type.

• 34:22Ryan Sean Adams?

  Of course, the difficulty here is regulatory headwinds that you face in trying to do anything with tokenized securities. But this was the interesting report I saw this week, which is the Bank of America is actually very bullish on real world assets. Which is very interesting. And they say the expected value of tokenized asset markets could reach 16 trillion dollars by 2030. That's in seven years. That's 10% of global GDP. I do think that real world assets are something like the Bank of Americas of the world, like the banks can kind of understand. They both understand and probably can support it and appreciate it because it's the same.

• 35:05Ryan Sean Adams?

  Financial instrumentation that they use, it's just on a new set of rails, on a new platform that's much more programmable. So I'll include a link to this report in the, in the show notes. You can go check that out, see what the banks are saying about tokenized assets. The last thing I just want to touch with you in the markets section here, Anthony, is correlation here. We spent a long period of time, I think in, you know, 2021 and 2022 with Bitcoin and other crypto assets being very correlated with the S and P 500. So we just, you're talking about like stocks as boomer instruments. We were trading just like those boomer instruments in crypto.

• 35:46Ryan Sean Adams?

  And this like punched a hole in the narrative that I think crypto folks, particularly the Bitcoin community has been preaching, which is Bitcoin is a non-correlated asset. It's kind of like gold. It's not correlated to, you know, Fed rates and what stock price does and all of these things. But for a very long period of time, we were pretty correlated with stocks. Now that correlation has actually dropped. So we're back from something like a high of 0.76 correlation to about 0.1 correlation. So is this nature healing? Or do you have any takes on this?

• 36:26Speaker 01

  I've maintained for a while that even though these correlations are like this, that crypto likes to do its own thing, right? Crypto seems to follow its own cycles where it doesn't necessarily follow stocks up or down. I mean, right now, I mean, stocks have been going wild for, for a little while now and crypto seems relatively flat compared to them, even though I think ETH is up almost 2X since the start of the year or something like that, right? And BTC as well. But generally, you know, everyone's looking at stocks right now being like, oh my God, every day, you know, stocks are going higher, the S and P 500 is going to hit new all time high soon, all these, all these sorts of stuff, you know, a lot of these other tech stocks that got just obliterated last year are coming, coming roaring back. And I look at that and I'm like, yeah, okay, that's true. But at the same time, like, I don't think that there

• 37:11Speaker 01

  is that much correlation between stocks and crypto because you, and I think that the recent correlation was an anomaly. You can see the rest of the, the time period here where correlations weren't that. Weren't that that high. And I think if you look back at what happened last cycle, the S and P 500 was going was going up and hitting new all time highs for like, I think, a total of maybe at least 12 months before crypto started really moving. So it seems that the stock market was going to go up before crypto anyway. It's kind of a leading indicator, I guess, for a number of different reasons. I think the two main reasons are that crypto is more risk on generally than than stocks. Even if you consider Bitcoin and Ether to be

• 37:54Speaker 01

  low risk assets, the majority of the world does not think that, right? They still think that BTC and Ether are highly speculative and very volatile, which they are. But to be fair, there's been a lot of tech stocks that were more volatile than ETH and BTC in this last cycle, which is which is funny. And I think the second reason is that generally what you what you kind of see in crypto market cycles is like this four year cycle, right? That seems to follow the Bitcoin halving. And I think that we're still respecting that. I think that maybe this might be the last time we respect that because there's going to be a lot more tradfi involvement in in crypto than there has previously been, as we talked about last week at the BlackRock stuff and things like that. So yeah, that's the that's the kind of second reason that that four year cycle and that four year cycle points to next year

• 38:37Speaker 01

  being a really positive year because the halving is next year and it's kind of it's it's right on smack bang four years since the last bull market. So all the start of the last bull market. So yeah, it it kind of seems to be following that still for better or worse.

• 38:50Ryan Sean Adams?

  I think this chart too, when you look at the long term, is the case that you made last week for kind of ignoring macro in crypto and that like, yeah, aside from, I guess, events in 2021 and 2022, crypto as an asset class hasn't been correlated to the S and P and has not been very correlated to macro. And so if that's the case, this chart is showing what we think it's showing, then why not just ignore all of it, which maybe that could help listeners filter out some noise in their minds when they think about how to invest. We got a lot more to talk about, though, Anthony, including crypto doxing. What happens when we have a new marketplace for buying and selling information about any blockchain wallet

• 39:35Ryan Sean Adams?

  address anonymously via smart contract? Also, there's a new developer report out. And some developers are leaving. I want to talk to you about that and see if you think that that is material. And lastly, the Google Play Store just had an epic unbanning of NFTs. And maybe there are some people to thank for that. We'll talk about that, too. But before we do, we're going to get to the sponsors that made this possible, including our number one recommended exchange, Kraken. Go check them out.

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• 41:38Ryan Sean Adams?

  Okay, the question in my mind, is everyone in crypto about to get doxed, Anthony? Let's talk about Arkham. This is a tweet thread that a project called Arkham released announcing the world's first on-chain intelligence exchange. You can buy and sell information on the owner of any blockchain wallet address anonymously via smart contract. You can see by the screenshot and the image of their interface, they have created an exchange of these bounties. So if you want to identify a particular hedge fund, or if you want to identify the owner of a particular Ether address, there are bounties for all of these data sets.

• 42:20Ryan Sean Adams?

  And I guess a community of sleuthers can go through and de-anonymize, identify who the owners of these addresses are. And there's lots of tools to do this, of course. I think the government has their pulse on a lot of these tools and probably actively uses them in various prosecution types of cases. But what's your take on what Arkham has released? And by the way, they've been active for a while, so this isn't necessarily a new project. I think it's getting a bit more play because they're doing something with a token. But this whole idea of a marketplace, a bounty system to de-anonymize crypto addresses, like, is everyone about to get doxed? And what does that mean?

• 43:04Speaker 01

  Yeah, so I mean, I think generally people should understand that Ethereum and Bitcoin, I guess, is the two largest chains. And most chains out there are not anonymous, they're pseudonymous, right? Because everything is already public on the ledger. Now, if you look at it from that lens, what Arkham is doing here is they're basically just monetizing that fact, right? They're monetizing the fact that all that information is out there, all that information is ready to be consumed and sorted and organized. But we just need to provide an incentive for people to do that. And you mentioned that governments have already been doing this, they do. Chainalysis is not quiet or not, I guess, like secretive about the fact that they work with governments on this. And Chainalysis has been doing work for a very long time now.

• 43:49Speaker 01

  I would wager that they have probably every single address on the chain doxed at this point. They probably know everything about Ethereum and Bitcoin at this point, just because they've been doing it for so long. And they do have big government clients for things like anti-money laundering, and they have big exchange clients too, I believe.

• 44:06Ryan Sean Adams?

  So they have a database you're contending with all of the different addresses out there. And then like identifiable names, not maybe not all of them, but say like 98%.

• 44:18Speaker 01

  I mean, I would assume like that chain analysis is already de-anonymized or or kind of like tagged everything just because that is their job to do that, right? Their job is to categorize and sort everything out for one reason or another. Maybe they haven't got like names attached to these things, like people's names, but they have sorted it organized and you could quickly just search it up. Like if you search an address on it, it'll probably be tied with certain things and categorized in a certain way to make it easier to to filter through. And just because that's their their main kind of like business, right? That's what they do. And they have government clients, they have other clients out there that that that request this information. But at the end of the day, like I can't be mad at chain analysis.

• 45:00Speaker 01

  I can't be mad at Arkham because it's really a failure on our behalf to allow this to happen, right? We allowed non-private blockchains to proliferate. And people have been going on about privacy for a long time now, saying, you know, we need privacy by default because privacy by default means that everyone is protected and there is no need to worry about these sorts of things. But because we don't have that, now you have Arkham coming along and saying, well, there's a business case here, right? There is a business case that we can slap a token on it and we can monetize this and we can do like bounties on things. And obviously, it's it's highly immoral. It is not something that I consider to be a good thing. It's not something that I consider to be morally right. But but at the end of the day, you know, we're building open permissionless systems.

• 45:45Speaker 01

  Morals don't factor in in that point because the permissionless system and open system will let you do whatever you want because and it's decentralized too, right? So it'll let you do whatever you want. And and I think people grapple with that sometimes because their morals don't match their technology. And I think people have to understand that that's what we've created. And if you want it to improve. Build better privacy tools that protect people. I know that obviously there was tornado cache and then they got sanctioned, right? So we did build a better tool and then the US government came along and said, no, you can't use that anymore because of of North Korea, really. And that just makes it worse because it's like, okay, well, every day, people want to protect themselves, but now they can't because the US government has said that we're not going to allow you to use this tool anymore. So that's why I'm saying it needs to be by default. It doesn't have it. It can't just be an app. It has

• 46:30Speaker 01

  to be the entire chain is always private. No one can see what you're doing. And I think maybe Ethereum gets there eventually, but it's more likely an L2 will do it before Ethereum L1 will do it. And at the same time, it's not like we're going to be able to make everything that has already happened private. It just it would start from from that period of time onwards. So yeah, there are a bunch of different kinds of things here. I think people have struggled to grapple with that they probably assumed that no one would build something like this or that they were okay. But at the end of the day, everything you do on chain is completely visible to literally everyone in the world.

• 47:04Ryan Sean Adams?

  And if you didn't know that, now you know. And this power is no longer in the hands of just big governments. It could be in the hands of just about everybody. Scott Lewis takes the counter this Arkham Intelligence is techno fascism. Of course, it's backed by Sam Altman founded company. The guy's building a dark and terrible future for humanity. We all get to choose whether we resist or submit. So calling kind of what Arkham is doing basically evil. I think your point is a bit broader than that in that, well, if Arkham didn't do it, like morality aside or ethics aside for Arkham specifically, somebody else would have. And so it's incumbent on us as a community to actually solve this.

• 47:45Ryan Sean Adams?

  I'm wondering if you see any, I guess, upside to Arkham coming to like, does it make us now?

• 47:55Ryan Sean Adams?

  Think seriously about privacy and tell you if like people are getting doxed all of the time, I guess one negative effect is they might use crypto less. If the, you know, the average person listening to this knew that all of their on-chain activity was, you know, fully, fully transparent and could be revealed at any moment by some tool like, like Arkham publicly, not just to governments of the world, but just publicly, they might stop using our on-chain systems, right? I guess on the, the flip side of that though, is that starts to create market value in actually solving the privacy problem. Maybe we start to get serious about privacy by default. Do you think this works out in our favor of the long run?

• 48:39Speaker 01

  Yeah, so I mean, I'll say first that I do agree with, with Scott here. I mean, I'm not in any way trying to defend Arkham and what they're, what they're doing. I do believe that it is definitely immoral and something that I don't want to see exist. But at the same time, like before Arkham, I mean, you can literally dox most people with just EtherScan because most people are not doing sophisticated hiding of their addresses and their funds. They're doing probably the bare minimum and the bare minimum is maybe sending coins to an exchange, like washing it through an exchange to a new address. Do you know how easy that is to track still? Like it's not, it's not difficult to track that, but that's what people are doing as the bare, as, as the bare minimum. So generally like, uh, the, it's already kind of like happening, it's already been happening

• 49:24Speaker 01

  and people can follow EtherScan and, and dox these things. I mean, Scott, uh, Scott, Zach XBT does this a lot, right? He uses EtherScan and similar tools to follow the funds of scammers and grifters with pretty great success.

• 49:35Ryan Sean Adams?

  Isn't that good? Like, so what, if we have privacy by default though, Anthony, we lose that, don't we?

• 49:40Speaker 01

  We, we do, but we gain a lot more, I believe. Um, I, I, I believe we, we gain obviously privacy just generally, but we get, we, we gain the fact that people already have, I guess, like privacy, privacy from just everyone in the world or everyday people, uh, in the traditional finance system, really, most of the time. Like the people that see your transactions are, I guess, like the financial system itself and the people running the infrastructure, but it's not like everyone can see, like, it's not like everyone can see what I'm doing on my bank account, for example, right? There is a kind of wall between those two things, whereas with crypto, there's no wall. There is literally, everyone can see what you're doing. Doesn't matter if it's the government, doesn't matter if it's, you know, your neighbor. And that is definitely a problem. And to your

• 50:23Speaker 01

  point, I think that this problem coming to the surface a lot more will spur on more of this activity. But there already has been a lot of this activity and there already is a very promising layer two called Aztec Network being built out that is going to be private by by default. And they're building what they're calling an encrypted blockchain where basically everything on there is encrypted and private. So it's already happening. But yeah, I can see that over the long term, this could definitely spur a lot more research and a lot more development into this space, just by virtue of people being aware of it. Because I don't, as I said, I don't think a lot of people are aware of the fact that anyone with EAT the Scan can with pretty great, I guess, like odds, dox all of your addresses if they wanted to.

• 51:04Ryan Sean Adams?

  Yeah. And one thing that I'll add to this is I don't see Ethereum mainnet adding privacy by default anytime soon on the layer one, right? We will probably have smart contracts that do sort of mixing type things, tornado cash style, will have layer twos that add privacy by default as a feature. But layer one will not be, like mainnet, will not be privacy by default. I haven't seen any pursuits in that direction. All right. Well, let's talk about another report that that came out this week, which is a developer report from Electric Capital. Anthony, it's looking like some of the devs are leaving, actually. So we are down 22% in dev activity and contribution

• 51:47Ryan Sean Adams?

  from about a year ago. Should we be alarmed by this?

• 51:51Speaker 01

  I mean, it depends where they're down from, right? It depends what ecosystem, I guess, they're down from. Because if you're measuring from June of last year, then you're measuring basically the depths of the bear market, the second half of last year, right? Where where everything was was blowing up. So many things are blowing up. And then you had FTX blow up. And all of these narratives that were formed in the bull market, especially around these kind of like layer ones, right? That that went crazy during the bull market. We came off of that. So are these developers basically leaving from those ecosystems? Because they only got involved because there was money flowing, there was developer incentives, things like that. I think that's more likely the the reason, because it actually isn't that

• 52:32Speaker 01

  hard of a fall. Only losing twenty two percent when we when we when we basically went through a brutal bear market, but we're much higher than we were from the last bear market, where you can see here on the chart. And as I said, I feel like most of the developers probably left from the ecosystems that have just stunted in growth, right? That have just stopped growing altogether. Whereas Ethereum and the layer two has kept growing, right? So I wouldn't imagine that a lot of those were from there. But but just like users, there are tourist developers, right? There are people who only come during the good times. And then they're like, oh, well, I'm pivoting to AI now, right? So I think there's a lot of that going on, too.

• 53:11Ryan Sean Adams?

  I agree with that take. My take is it's healthy. And if you look at this chart, which is actually twenty fifteen up until now, and number of monthly developers, if you if you were to view this chart in log rather than linear, I'm sure this looks similar to twenty nineteen and twenty twenty. Twenty two percent drop off is probably about what we needed at this point in time. This was pretty big this week. Google Play changing their policy and allowing NFTs in apps and games. The reason I love this, Anthony, is because I also think it puts pressure on Apple to do the same. And so we have, of course, these these app stores, Apple and Android and

• 53:50Ryan Sean Adams?

  Google, they can be gatekeepers to what sort of wallets that are issued inside of the mobile ecosystem, or what what sort of NFT games we have. And this is Android saying, hey, we're opening up. We are going to enable NFTs in apps and games. We're not going to charge an additional fee. And I think this puts pressure on Apple to do the same. Any other takes on this?

• 54:17Speaker 01

  Yeah, I agree with you on that. I think I'm well aware of the fact that people like know about this duopoly, right, between Google and Apple when it comes to app stores and how they can exert some pretty big control over things. And people want to break that as well. They want to basically create a maybe a new ecosystem that is outside of Apple and Google. But I think what people miss is that not only is creating a new ecosystem for mobile incredibly difficult, and there have been multiple big companies like Microsoft that have failed to do this. You not only need to do the software, you also kind of need to do the hardware. And doing the hardware is even harder than doing the software side of things. So when you take all that into consideration, it's much better

• 54:58Speaker 01

  for us to focus our effort on basically not forcing, but encouraging forcefully, Google and Apple to allow these things to exist, right, to allow these things to exist on their respective app stores. Because bootstrapping a whole new ecosystem is a pretty, I would say, impossible task. I don't think it's something that should be pursued. And I know that Solana had an initiative recently with Solana phone to do this. I said it then, and I'll say it now. I don't think that's really going to go anywhere. I don't think anyone's going to buy a Solana phone over an iPhone just so that they can use a new ecosystem and kind of like get access to apps they wouldn't be able to get access to on the Google Play Store or App Store. The vast majority of people, 99.999%

• 55:42Speaker 01

  of people, do not care about that. So let's not service the micro niche kind of thing of crypto. Let's service the rest of the world. And as I said, I think our energy is better spent making sure that we can get these apps approved and enabled on these existing app stores.

• 55:58Ryan Sean Adams?

  Anthony, not bullish on the Solana phone, but that didn't stop Anatoly from taking

• 56:04Ryan Sean Adams?

  this one without Solana Mobile. Going to take 100% credit for shifting multi-trillion dollar titans of industries. So making the case that because crypto provided another option.

• 56:15Speaker 01

  No, that's, that's, that's, that's a, that's a very bold take.

• 56:20Ryan Sean Adams?

  Yeah, there's very little adoption right now of Solana Mobile. But anyway, you know, cheering them on. This is a, this is a good, this is definitely a good step forward for crypto and something we need, having the Apple or the Google Store open up. So let's see the same from Apple. Anthony, we've got a lot to talk about coming up next, including AVE's new stablecoin about to hit the market. Is this the one we've been waiting for? Brand new ZK EVM hits the market as part of Layer 2 Summer. There's a lot going on in Layer 2 world I want to talk to you about. Also, Brazil with a central bank digital currency on Ethereum. I saw something about this. I want to dig into it some more. And the UK, they are turning crypto friendly. What does that mean for us? Guys, we'll be back with all of that.

• 57:04Ryan Sean Adams?

  But before we do, we want to thank the sponsors that made this episode possible.

• 57:09David Hoffman?

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• 57:53David Hoffman?

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• 58:36David Hoffman?

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• 58:53Ryan Sean Adams?

  Layer 2 summer is here. Three things to know. I think the first is this. Consensus is launching a Layer 2 on mainnet. This is an alpha release right now. It's a ZK EVM. It's called Linear. Anthony, what do you know about this? What Consensus is building? Is this just another Layer 2 joining the ranks? And like, welcome? Great to have you? Or is there anything special about this particular Layer 2?

• 59:18Speaker 01

  It's relatively new, so I haven't dug into it too much myself, and I haven't seen much about it recently. But yeah, I mean, it's another ZK EVM joining the ranks here, obviously, as you said, from Consensus. Consensus has been around for quite a while now. They're developers of products such as MetaMask and Ethereum that everyone uses pretty much. So yeah, they have a track record of launching products and maintaining them for long periods of time. So I'm curious to see where they go with this, because I think that the generalized L2 market is becoming very saturated very quickly at this point. It seems like we have more block space than apps at this point.

• 59:55Ryan Sean Adams?

  A good problem to have, I guess?

• 59:57Speaker 01

  Yeah, definitely. But it does begin to feel like what we saw with the L1s, right? Where there were so many of these L1s launching, they all looked pretty much the same. They had their own claim to fame. But at the end of the day, people just wanted more block space, right? They wanted those cheaper fees and not wanted to pay Ethereum mainnet fees. But I'm still excited for it. I'm still excited to see these things blossom and basically play it out in the market. You know, battle it out, see which ones people actually want to use and which ones can survive and thrive, and which ones just go by the wayside.

• 1:00:27Ryan Sean Adams?

  Yeah, that's just it. I love the competition. I think it's going to level us all up. And here's another competitor that's entered the fray from Mantle Network. This is a layer two developed by BitDow. Their thing is they're going to use Eigenlayer as the data availability layer. So fees will be super cheap. Maybe this allows them to optimize on user experience. You know, really fast smart contract wallets, low cost. The news this week was they are launching a eco fund. Mantle, BitDow is from Mantle, $200 million investing in the Mantle ecosystem. And what I think is interesting about this is this comes from BitDow.

• 1:01:10Ryan Sean Adams?

  I don't know if you've followed BitDow, Anthony, but they maintain one of the largest treasuries, on-chain community treasuries of any DAO, including $500 million worth of ETH. $2 billion total treasury. A lot of those are Mantle tokens, but 500 million in ETH, that's quite the war chest to be investing into this layer two. So another competitor throws a tat in the ring and I think it's kind of cool. Lastly, Gitcoin is releasing a public goods layer two as well. A public goods layer two. What's going to be different about this one?

• 1:01:49Speaker 01

  Yeah, so, so these are the kind of things I guess I get a bit more excited about because they're specializing, right? They're not just trying to be another generalized L2. They're actually specializing and in Gitcoin's case, they're specializing on public goods. This has been their bread and butter since day one, right? They've been doing this for quite a while now. And the way I'm kind of envisioning this is that you want to have an ecosystem that develops around public goods, but you don't want it to be necessarily fragmented, right? You want to be able to have it in kind of a, I guess for lack of a better term, centralized place where people can kind of interact with all these different public goods applications. They can do payments on this chain. They can have like some light DeFi. You'll have a Uniswap on there because people will obviously want to swap tokens when they're doing these sorts of things.

• 1:02:32Speaker 01

  But having it all in the one place and having these protocols be able to integrate with each other and cooperate with each other in a really close knit way and being aligned to grow the public goods network together, I think is just speaking to Gitcoin's core values and what they've been trying to do for a long time. And also something that I am incredibly bullish on because it differentiates itself from the competition, right? From, from the pack. And as I said, I don't, I don't necessarily think it's trying to compete with the other L2s either. It's more of a compliment. It's like, hey, you know, you want to do some public good stuff instead of having to go to You know, all these other different ecosystems, you can just go to Public Goods Network and here you go. You can find your your home on there. You can find cool things to do, find really cool things to fund and and DAOs to join and things like that. And I really do think that probably

• 1:03:14Speaker 01

  the biggest thing that's going to come out of this is that there's going to be a network of people that join the Public Goods Network and basically become the governors of many different protocols out there. And they call the Public Goods Network their home, but they're governing apps on Arbitrum and Optimism and and you know, Polygon, all these other chains. And they come home to Public Goods Network. That's their hub where they kind of coordinate and and and do all this stuff. So yeah, I'm pretty excited about it.

• 1:03:38Ryan Sean Adams?

  Do you worry at all about fragmentation, all of these different layer twos? Like, we kind of just get too fragmented, can't keep up. There's no one single source for kind of state and we just become diffuse.

• 1:03:49Speaker 01

  I I think I worry about fragmentation, not on the technical or kind of economical side, but more on the on the social side of things, where humans will generally stick to something longer than they should a lot of the time. Um, you know, especially if it's something that they've founded or if they're very close to. We have all had this experience. We hold the crypto token down way too long because we are, we, you know, we can't cut our losses, so to speak. So I think that from a technical point of view, interoperability is is pretty much solved with these bridges that we have now. And same with the economic side of things, where you can just bridge assets between change relatively easily. But on a on the social side of things, what's going to happen is that you're going to have these L twos that exist for quite a while because they're going to have a massive war chest from issuing tokens, things like that. And they they'll be like these L ones. They're

• 1:04:34Speaker 01

  basically zombies, but the social capital is still there. These people are still getting paid. They don't want to cut their losses on it because they're like, this is a cushy job, right? It's like dying corporations. It's the same thing. Like, they're around, there's money coming in, and then they just stick around for way too long. So I worry about that. But at the same time, I think over the longer term, it fixes itself anyway, as we've seen with the layer ones. Over the longer term, everyone just comes home to roost on Ethereum. You know, they, they go, they, they, they abandon these other layer ones. They come home to Ethereum and Ethereum grows. Ethereum becomes a better ecosystem because of it. So I think with the L2s, it's going to be the same thing. There's going to be a bunch of them that don't work out. They just exist as zombies. And then the people from there eventually will come to the, to the other L2s that are succeeding. And kind of like, you know, migrate. It's, it's like, it's like the, the countries around the world.

• 1:05:16Speaker 01

  You migrate from a country that you believe doesn't have an economic future for yourself to one that does. It, I think it's a similar kind of thing, but you usually wait too long to do that a lot of the time. And this is like an immediate threat. Obviously war, uh, war in the real life is immediate threat and you move. But if it's, if it's a slow burn, you tend to wait longer because it's a, you, you, you're kind of like stuck in that ecosystem for one reason or another. So I think that's what I worry about the most, but not the technical economical stuff. That's much easier to solve than social stuff.

• 1:05:43Ryan Sean Adams?

  Yeah, that's a great point. And, and to your point, you and I were just laughing before the show began on the Kraken chart. The top gaining tokens this week were things like, um, kin, uh, you know, P O W R, right? These tokens that are still around and you, you wonder, um, like it seems like tokens and crypto can never die. And it's probably for the reason you, you just said, they'll just be around forever. They may not grow and they might have this one weird breakout day where suddenly they're up 30%. But they just don't fully collapse to zero, do they?

• 1:06:14Speaker 01

  No, no. And, and I, it's kind of funny because you can always find at least one, there's always one, I don't know why. Person who's still holding a bag of an old token. I, I remember in the bull market towards the end, someone was shilling Feathercoin in my Twitter replies. Feathercoin is from like 2013 or 2012.

• 1:06:36Ryan Sean Adams?

  Like a serious believer.

• 1:06:37Speaker 01

  Bitcoin. Yeah, yeah. Someone's serious being like, oh, the team's coming back. They're going to reinvent the thing. I'm like, wow, what is going on?

• 1:06:46Ryan Sean Adams?

  Yeah, you know, you can't destroy the faith of human beings, I guess, sometimes. Okay, so we've got a new stablecoin from Aave. It's called Go. This has been talked about for a while. This is a proposal on the governance of form of Aave to actually launch this thing. Go is an algorithmic stablecoin, so you can mint exactly a dollar worth of tokens when there's a dollar worth of cryptocurrency. And it's minted against a diversified set of assets that are in Aave. To me, this is very similar to DAI. I don't know what your take is on it. But high level question, is it Go time? I mean, is this the decentralized stablecoin we've been waiting for? What are your thoughts on this?

• 1:07:27Speaker 01

  I have a lot of thoughts on decentralized stablecoins generally. And I guess the TLDR of my thoughts is that I don't think we're ever going to have one that actually works at scale. Because when you think about it, and I was talking about stability earlier in the episode, right, where I was basically saying you're measuring stability against something else. If you have a decentralized stablecoin that is pegged to fiat, I mean, in my mind, it's not decentralized really, because you're pegging it to a centralized asset, right? Even if it's only backed by ETH, even if it's got no governance attached to it, and it's like completely just existing on Ethereum as in a decentralized state, it's still pegged to the US dollar.

• 1:08:07Speaker 01

  So if that's the case, and if you're collateralizing it to mint it, you're limited as well in terms of scale by the collateral. So you're limited, even if you're just using ETH, you're limited by ETH's market cap. And that's the upper limit. The real limit is much lower than that, because obviously not all of the ETH is going to go back in your stablecoin, right? Even if it's an LST, for example. But as soon as you do LSTs, it doesn't become decentralized anymore. Like, if you're backing with ST ETH, that's not a decentralized asset anymore. ST ETH decentralized with Lido. So. If you're just using ETH as the example here, your ceiling for how much you can issue is very, very low. It's super low compared to the ETH market. I would say you could get to 10 billion

• 1:08:48Speaker 01

  or something, 10 or 20 billion. So that's nowhere near enough to service the whole world, right, as a decentralized stablecoin. Okay, so if we run along that path, well then how do we make it bigger? Well, we make ETH's market cap bigger. Okay, how big does ETH's market cap have to be? Well, it probably has to be 100 trillion plus dollars in order to issue enough

• 1:09:06Ryan Sean Adams?

  of this. In which case ETH becomes the stablecoin?

• 1:09:10Speaker 01

  Exactly. You knew exactly where I was going with it. In which case ETH becomes the stablecoin. So in my mind, these things are good in like little kind of niche areas and maybe just for the crypto economy to play around with and use. But the end state of a decentralized stablecoin really is just ETH. ETH is going to be the decentralized stablecoin if it succeeds, if it gets to a large enough market cap. Because as I said, it's stable to itself, but then if it becomes stable relative to everything else in your life, your expenses, groceries, bills, whatever, then why wouldn't you use ETH as money? People use things as money when they're stable relative to what they're trying to purchase with it. Just like people in hyperinflationary countries, they want to purchase USD because USD is way

• 1:09:53Speaker 01

  more stable than their currency, right? So it's going to come to a point where ETH is way more stable than their currency and probably far into the future at this point. But you purchase that and then you just use ETH as your decentralized stablecoin.

• 1:10:05Ryan Sean Adams?

  So your take is you like Go, it's cool, but to assume it'll have more success than something like DAI is, you know, probably overstating it. It's going to be sort of a niche stablecoin for crypto enthusiasts, not nearly as scalable as something like a USDC or a Tether at this point. And you're pessimistic on the overall ability for us to get a true decentralized stablecoin out there. And so

• 1:10:31Speaker 01

  fiat-based stablecoin, yeah. Yeah, like something that's pegged to fiat and

• 1:10:35Ryan Sean Adams?

  I think that's what I think that's what history has shown so far. So we'll see if Go can be different. Kind of cool to see some innovation here. Eigenlayer has just reopened as well. So the LST restaking cap has been increased from 9,600 to 30,000 staked ETH. Anthony, you gonna restake anytime soon? Are you gonna wait on this one?

• 1:10:57Speaker 01

  So I don't hold any LSTs because I am a solo stake and a Rockpool node operator. So node operators in Rockpool don't get the RE. They basically just, obviously, there's a, there's a kind of pool. I'm not going to explain the whole Rockpool protocol, but they, the, the node operators don't get the RE. The RE is given to the people that are putting ETH in a deposit pool, which matches the Rockpool node operators.

• 1:11:19Ryan Sean Adams?

  You guys just meant the RE as a node operator, right?

• 1:11:22Speaker 01

  Yes, essentially, yeah, yeah, that's, that's probably the correct terminology there. So for me, I don't have any LSTs because solo staking Rockpool, I don't own ST or anything like that.

• 1:11:29Ryan Sean Adams?

  You can always buy some, Anthony, just buy some to stake.

• 1:11:32Speaker 01

  I, I could, I could, but right now, right now, outside of farming in potential, a possible airdrop, which is what I think a lot of people are doing right now, I don't see the point because there's nothing really live yet for Eigenlayer. It's, it's literally just deposit these funds here. And they're doing this as a bootstrapping mechanism. Obviously, you can't have things go live using restaked ETH if there is no ETH that's been restaked, right? So that's what they're doing here, but they are going to have like native restaking as well as they've listed here, where you can change your withdrawal credentials from your solo validator to Eigenlayer. I'll probably do that when there's something that's actually live rather than, than this, because I'm not interested in farming any potential airdrop or anything like that. And at least, as I mentioned before, anything new is always risky. So I definitely take that very seriously, especially when it comes to my staked ETH.

• 1:12:17Speaker 01

  I'm very protective of my staked ETH, that's why I solo stake. But yeah, I, I actually think this is a really cool way of bootstrapping, right? Just getting, raising that TVL cap, doing a guarded launch, and then eventually launching their products like the Eigen Data Validability Layer, which you mentioned before, which I think is one of their first products. And then harnessing what's already been staked or restaked and, and using that to secure these things.

• 1:12:39Ryan Sean Adams?

  Yeah, I, I agree. So if you want to be on the frontier, of course, you can put some ETH in there. But definitely don't feel like you should be pressured into that. There are risks associated with it. I don't know if you've been following this, but Vitalik did a Twitter Spaces. And here's a quote from a CoinTelegraph article. Vitalik Buterin says, "Ordinals have revived Bitcoin builder culture on Bitcoin." He said later, he praised ordinals and the BRC 20 token standard. He said, "Ordinals are starting to bring back a culture of actually doing things. Feels like there's some real pushback to the laser-eyed movement, which is good." I think he was talking to Udi Rethimer and also Eric, who are, I think, well-known.

• 1:13:26Ryan Sean Adams?

  Bitcoin revolutionaries, let's say, and Bitcoin is almost having a cultural revolution type of moment where there's sort of this builder community that's starting. And then there's the laser eyed maximalists who don't want to do any of that. Do you have any weigh ins here? Do you think Bitcoin culture is getting any better? Do you pay any attention to this?

• 1:13:48Speaker 01

  I pay a bit of attention to it. I think it is definitely, I guess, the most interesting thing to happen in Bitcoin in a while, which says a lot considering that Ethereum was doing this in 2015. So like doing tokens and NFTs, which is basically what ordinals are. I will say that I actually side with the laser eyed maxis in this case. And that's not something I usually say. Yes.

• 1:14:08Ryan Sean Adams?

  Oh, that's spicy.

• 1:14:10Speaker 01

  I think Bitcoin doesn't need any of this. I don't think Bitcoin should be doing NFTs. I don't think Bitcoin should be doing tokens because it is literally just a budget store, a dollar store Ethereum. It's not doing anything better than Ethereum.

• 1:14:22Ryan Sean Adams?

  So why are you? Bitcoiners are gonna hate you for that on both sides.

• 1:14:26Speaker 01

  Yeah, I think so. But like, why are you compromising on what makes Bitcoin special? Sure. To do things that you can just do on Ethereum and even other chains that already have existed for quite a while. And people will say, oh, because Bitcoin's more secure. You know, it's got a lot of capital there. We can harness that. And there's a different culture. I get that. But at the same time, like I, in my mind, Bitcoin is no longer what it used to be. Bitcoin has changed now, right? Fundamentally. So I think people are gonna look at that and be like, okay, well, Bitcoin is not this unchanging thing that we can kind of store our value in and be certain that it's going to be very similar, if not the same in 10 years as it is today. You're not gonna know what Bitcoin's like in 10 years because this functionality was actually introduced on accident with the

• 1:15:09Speaker 01

  Taproot upgrade. No one, as far as I know, knew that this was possible using Taproot. So if something can be introduced via accident like this, what's to say it's not gonna happen again? So for me, it basically adds a cloud of uncertainty to Bitcoin that didn't exist before. So that's why, and I think that's the argument that the laser eyed maximalists make, even though, I mean, I disagree with them on pretty much everything else. I think they're right in that Bitcoin should not be going down this path because at best, it becomes a dollar store version of Ethereum, right?

• 1:15:38Ryan Sean Adams?

  You just see it as like, building on Bitcoin is just like, you know, TI-83 calculator. It's just like a computer. It's just like shitty Ethereum. So like, why go down that path at all? But at the same time, like for the laser eyed maximalists, you can't really stop it. Can you?

• 1:15:52Speaker 01

  No, you can't.

• 1:15:53Ryan Sean Adams?

  Once this is open, all of the tweets and the kind of the vitriol and the, you know, jihad you wage internally, that's not going to stop builders from building on Bitcoin if this is a permissionless protocol and they have the ability to do it.

• 1:16:08Speaker 01

  Yeah, no, I definitely agree and I don't fault anyone for building on there and I do agree with the tag that it revived some kind of builder culture on Bitcoin. I don't think a lot, to be honest. I think that there was a short term, kind of maybe three months or so of it going kind of crazy because it was this new thing. Everyone loves the new things, right? And then it seems to us tape it off a bit. But at the same time, as I said, like, it fundamentally changes what Bitcoin is in my mind. Bitcoin is no longer what it what it used to be. And I think that there are a lot of people in the Bitcoin community, not just the laser eye people, but generally Bitcoiners that don't like this, that feel like Bitcoin has changed too much. And if these changes continue and if it keeps changing, I don't know what that's going to look like. Is there going to be

• 1:16:50Speaker 01

  another civil war? Is there going to be another split between the Bitcoiners, right? Like Bitcoin Cash and Bitcoin in 2017? I'm not sure.

• 1:16:57Ryan Sean Adams?

  There's something happening. It's certainly, if nothing else, it's entertaining to see what's going on.

• 1:17:02Speaker 01

  Yeah, definitely.

• 1:17:04Ryan Sean Adams?

  Vitalic weighing in is interesting. Just to conclude the story we talked about from last week. So the Winklevosses were saying they would sue Barry if he didn't return all the hundreds of millions, the 640 million he owes. And indeed, they did sue Barry, Silbert and DCG. Of course, the statement from DCG Group is that this is yet another publicity stunt from Cameron Winklevoss to deflect blame and responsibility from himself and Gemini. We haven't done anything wrong, et cetera, et cetera. Back and forth, back and forth, as you'd expect, Anthony. So that's where that is. Also, this was interesting this week. The former SEC Chair, Jay Clayton, thinks that we should

• 1:17:47Ryan Sean Adams?

  get a spot Bitcoin ETF. His reason was this. He said, when the SEC approved a future

• 1:17:55Ryan Sean Adams?

  Futures-based ETF. They said, let's look at the future market. We see there's surveillance. We see the protections in that market for the investor that are sufficient. We don't see them in the spot market, so we're going to make that distinction. He said, there should be no distinction. If you're going to approve a Bitcoin futures ETF, which has been approved, then the SEC should also approve a Bitcoin spot ETF. I still think we're going to get a Bitcoin spot ETF this year. I mentioned that a couple of years ago, but I sort of confirmed it. This fantastic podcast with a kind of an ETF expert at Bloomberg. And he went through sort of all of the various scenarios. He tracks all of the different ETFs for approval.

• 1:18:38Ryan Sean Adams?

  There are like 77 different crypto ETFs in some state of either denial or approval. And he thinks that this year could be the year, and if not this year, into January for a couple of reasons. One, there's this grayscale court case where GBDC and grayscale are essentially suing the SEC, saying, hey, we should be allowed to convert our trust into an ETF-type structure. This is, you know, there's no reason for you not to approve that. So that's going through the court system. Some legal analysts are saying a verdict could be delivered by September. Obviously, that would be a big game changer. And then, of course, you've got BlackRock coming in here and Fidelity and some of the others continuing to apply pressure on Gary Gensler and the SEC.

• 1:19:22Ryan Sean Adams?

  So I feel like he's got to bend. I feel like politically, he's got to give something. And so that's why I think a Bitcoin ETF is going to happen this year. So I know we've talked about that a little bit. Last thing I want to get to, though, is London and the UK becoming a place, maybe, for American crypto refugees. The Prime Minister of London, Rishi Sunak, he seems to really like crypto, Anthony. Do you have any takes on like jurisdictional arbitrage? And it always seems like someplace around the world is either cooling or warming up to crypto. And right now, the UK seems to be warming up to crypto. Do you think we'll get some crypto projects over there, some favorable regulations?

• 1:20:07Ryan Sean Adams?

  And crypto natives may be moving in that direction?

• 1:20:10Speaker 01

  Yeah, I mean, I think so. If the US continues down this path, right, of just being hostile to crypto, it will just naturally happen. I think that the UK generally, from what I've seen, is trying to reinvigorate their economy after leaving the EU, which seems to have turned out to be not that great of a decision. So they seem to be trying to, yeah, reinvigorate their economy, grow their economy. And it seems that, I mean, Rishi seems a lot younger than the politicians we're used to, especially in the US, right? So he may be have a favorable outlook on crypto because he probably understands it better, just from a fundamentals point of view. So I think, yeah, he seems to be pushing it. The, yeah, the UK seems to be putting in those regulatory guardrails,

• 1:20:51Speaker 01

  that regulatory clarity that the US doesn't have, that should logically attract a bunch of teams. But as we're talking about before, about switching costs, right, and how people can stay in one place for way longer than they need to, and they don't cut their losses. I think the same thing's gonna happen. I think there's gonna be a lot of US-based crypto teams that are just gonna stay put because they'll be like, no, things will change, you know, just give it a couple of years, we'll get more regulatory clarity, and we'll probably end up just seeing that existing people that live in London or the UK will probably just start crypto businesses there that maybe otherwise wouldn't have, because they have more clarity now on that front.

• 1:21:22Ryan Sean Adams?

  Yes, and hopefully this this puts pressure on other jurisdictions, and maybe the US in particular, to become a bit more crypto-friendly. So that is definitely the bull case for that. This caught my eye as well, Anthony. I don't know if you've followed this at all, but a pilot project of Brazil's central bank digital currency, apparently it was deployed to Ethereum, I believe. The tweet thread here says, of course, the central bank digital currency, Brazil's currency, it can be frozen at any time. You'd sort of expect that for any nation-state deploying a central bank digital currency to have the ability to freeze various transactions or block various transactions.

• 1:22:05Ryan Sean Adams?

  I'm not super surprised at that, but deploying this on a public network? And again, this is probably just a prototype. It's just a pilot. It's just a test. Do you think that? Ethereum will be the recipient of central bank digital currencies of ERC20s. Is it a net gainer in a world where central banks all have their own digital currency? Or do you think most central banks will not deploy on a public blockchain? They'll kind of trade their own blockchain digital apparatus the way China is doing?

• 1:22:41Speaker 01

  Yeah, so I think with the Brazil one here, what they want to do is create a private fork of Ethereum, sort of like an Intranet for their CBDC, right? So in that world where, let's say, all the central banks around the world do that, I could imagine Ethereum as that interoperability layer, right? As that internet to the Intranets, so to speak. So that's where I see Ethereum playing a big role, where they'll probably use the ERC20 token standard just because it's widely accepted. And then it'll be easy to interoperate between these different kind of ledgers, these private ledgers and the public ledger. So that's where I see them meeting. At the same time, I'm not exactly very bullish on CBDCs for the reasons you outlined, obviously, the massive centralized control that they exert.

• 1:23:24Speaker 01

  But at the same time, people will say that they're not bullish on these things and they don't want them to exist. But currently, both USDC and USDT have the same freeze function in them. At any time, Circle or Tether can freeze assets in any address, right? They have the power to do that. And yet, their combined market caps are over $100 billion worth, and they're the biggest stable coins, right, in crypto. So when looking at it through that lens, I really do wonder what the uptake on CBDCs is going to be like. Like, is the population just going to use them because they're way more convenient than the existing system? Are they going to become popular because of that? The government's going to obviously, and the banks themselves are obviously going to inject a lot of liquidity into it to get that liquidity network effect. So I think it's inevitable that we get these things.

• 1:24:09Speaker 01

  I think it's inevitable that these things are pretty dystopian and probably not going to be great for society. But in terms of where Ethereum fits, yeah, they'll use the Ethereum technology because it's just there, it's open source for them to use, it's free for them to use. I wouldn't blame the Ethereum ecosystem. Or like, or anyone for like, working on Ethereum, enabling this, which I've seen some people do, which I just find bizarre. But yeah, I've seen, I've seen especially the Bitcoin Maximus. They said that they, it's Vitalik's fault that the Brazilian Central Bank digital currency exists because he invented Ethereum. Okay, let's take that logical conclusion. Exactly.

• 1:24:47Speaker 01

  Exactly. So, you know, it's a silly reasoning there, but yeah, I think they'll choose Ethereum technology because it's just the standard, right? And they'll choose the EIC 20 token standard as well for the same reasons. And then it'll just all interoperate with the Ethereum public ledger, which has been my thesis for Ethereum for a long time, that it's going to be the sediment layer for all types of value. It doesn't matter if it's a CBDC or otherwise, it's going to exist as that layer. And that's where Ethereum as a network benefits.

• 1:25:16Ryan Sean Adams?

  Well, we've got more to talk about, Anthony, coming up. I want to pick your brain on what DeFi protocols you are looking at. This is a question from the nation actually addressed to you also. The entire world, it feels like, thinks crypto is a scam. Is there anything we can do to change that? Want to pick your brain on that as well. But before we do that, got to shout out the fantastic sponsors that made this episode possible, including our friends over at Metamask. Who wants you to go check out the Metamask dashboard. If you have a Metamask wallet, you view all of your assets in their portfolio. It's portfolio.meta mask.io. Go check it out.

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• 1:26:36David Hoffman?

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• 1:27:21David Hoffman?

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• 1:27:30Ryan Sean Adams?

  Here's a question from the nation this week. Sassel mentions, that's you, of course, Anthony, Sassel mentions newer DeFi protocols that he's been looking into. Which ones does he mean? And what makes them new and innovative compared to the blue-chip DeFi protocols? This is Jay Miles, looking for some Anthony Sisano alpha here. What DeFi protocols are you looking at? Or maybe, if that's too specific, what sort of trends are interesting at this point in time?

• 1:27:58Speaker 01

  Yeah, so generally, the trends, I would say, are things like oracle-less protocols. So, protocols that just do not have oracles involved in them at all. Like a Uniswap-style protocol, for example. Uniswap doesn't use oracles. It works without them, which is pretty cool. So, that's one thing I'm paying a lot of attention to. There is a company that I invested in recently that's launching, I think they're launching today, actually, called Ajna Finance, which are doing an oracle-less lending protocol. So, essentially trying to disrupt the Avers and compounds of the world, and trying to do that without oracles, and with very, kind of like, minimal governance and things like that, or basically no governance for a lot of things. So, that kind of trend there, I'm paying close attention to.

• 1:28:42Speaker 01

  Because if we can make protocols work without oracles... That removes a centralization vector, not to say that that the oracles are bad and we definitely need them for a lot of things. They're definitely real old assets. We would do that. We can't really remove it in that kind of realm from what I've seen. But that's one trend that I'm paying very, very close attention to. Another one is new AMM designs. So I know that Uniswap V4 just got announced and that's a pretty broad design, but and a pretty, pretty exciting design. But there are other protocols being built right now and I don't think I can, I can name any of them off the top of my head right now. I think a few of them are in stealth, but. They're basically designing AMMs in a very different way to what we're, what we're used to. They're building them from the ground up.

• 1:29:22Speaker 01

  In order to be fully generalized and modular to give the liquidity provider as much control over the, you know, the liquidity as possible. So that to me like has been done in various ways. Obviously Uniswap V3 did it with concentrated liquidity. Now they have V4 with their hooks. Which they're basically trying to modularize it even further. But some of the protocols, other protocols I've been looking at, are taking it even further than that, basically, and making it so generalized. That it just provides a lot more value to the liquidity provider itself. So those are some of the things that I'm paying close attention to. In generally as well, like I guess you could call these DeFi protocols, but I call them StakeFi. So things like Eigenlayer, of course, with restaking and newer LST protocols that maybe are trying to do something a bit different than the older ones.

• 1:30:07Speaker 01

  Those sorts of things I'm interested in as well. And yeah, that's what, that's basically in the kind of DeFi sphere, what I'm, what I'm looking at right now.

• 1:30:15Ryan Sean Adams?

  Yeah, those are some good takes. I'm a plus one on, on kind of the oracleist protocols. We did an episode with Dan Elitzer from Nascent. On the, on oracleist protocols that folks should go check out as well. More money Legos to build here, really. That's what it comes down to. A lot more DeFi innovation needs to happen. Here's another question about account abstraction. There's been a lot of talk late last year about account abstraction, the beginning of this one, around the subject, but things seem to have cooled down. How needed is account abstraction? What are some projects working on this front? Can you remind us what account abstraction is? And then tell us, has there been any movement lately on it or has it cooled down?

• 1:31:00Speaker 01

  Yeah, so basically account abstraction refers to this ability to create these Ethereum wallets that basically have superpowers, right? So essentially, they're sometimes referred to as things like a smart contract wallets, where basically you can have controls in place like whitelists directly on the wallet itself. So you can have whitelist on like your MetaMask wallet, for example, right? But with a smart contract wallet, you can have it inbuilt into your actual public-private key pair itself as a smart contract. I mean, that's a crude analogy because smart contracts don't have kind of like private keys here. But from that kind of perspective, that's how it would work. And you could have like spending limits, things like that. You could

• 1:31:42Speaker 01

  do things like multiple kind of, I guess, like string together transactions as well, so that you could do an approve and swap in one transaction instead of having to approve a token for swap and then click swap to do it. So in two different transactions, that I think is very powerful for people because how many times have we all gone to Uniswap and we've been like, oh, I have to approve this token and then I can swap it, right? So it's better on the UX side of things. But in terms of like how much talk there's been, look, there's a lot of development happening in the background, but just by the very nature of what this is and how it's not really a speculative thing, you're not going to hear much about it unless you're actually looking for news and updates on it. Because it is stuff that's happening in the

• 1:32:24Speaker 01

  background. It's at the infrastructure layer, but it is not infrastructure in the sense of a layer two or a layer one. It's more of like the middleware kind of protocols that you don't hear too much about. Like, for example, there is the graph and chain link as well that are out there, but those things have tokens, right? So you do hear about them sometimes. Whereas account abstraction, things like the wallet connects and Argen working on these things and people just working on standards, they don't have tokens attached to them. So there's no speculative attention. And generally, they don't have much marketing because It's just infrastructure that's being built in the background for now. So there is still a lot of stuff happening, but what you'll see is a slow rollout to these different wallets, because it is a change on the user facing stuff. So to change things for users, especially their wallet experience, you need to be slow and methodical with that.

• 1:33:09Speaker 01

  You need to make sure that the users aren't scared if you change something on them. That's why something like MetaMask is so slow to change. And they recently did a UI update, actually, and I looked at it and I was like, oh, okay, this is new. And I looked at it, I'm like, okay, here's this, this and this. But then that's me as a pro user. Imagine someone that's completely new, um, using MetaMask for like a couple of months, and then it changes on them. So when it comes to wallets and integrating with account abstraction, they have to be very careful. They have to definitely do it as a gradual rollout, a slow rollout. So that's probably why you're not hearing too much about it. And generally, when you hear something talked about a lot in, in like maybe a couple of month period, it's because people are releasing all these new things that they've been working on, and they're doing it at like major events such as ETH Denver as a, as a kind of marketing tool, so to speak.

• 1:33:53Speaker 01

  But generally, most of the time, you won't hear about these things unless you're actively looking, looking for it.

• 1:33:58Ryan Sean Adams?

  Be on the lookout, though, for these improved account abstraction wallets, smart contract wallets is, is sort of what you'll see. And the experience, if we get this right, should be very much like fintech. So we're all kind of the gas fees and all of the multiple steps and transactions. It should feel very seamless. So I don't know, I think we're probably a year away, a year to like three years from this, like getting really good and polished, but the infrastructure is starting to be built. Some takes this week, here's one, a take about the think effect here.

• 1:34:31Ryan Sean Adams?

  Post BlackRock Forbes, of course, Larry Fink and BlackRock came out in favor of crypto in Bitcoin. This, this poster says Bitcoin suddenly has become greener, helps third world countries, and is not being used by baddies anymore. You love to see it. And the post links a whole bunch of articles, everything you need to know about Bitcoin and the environment, how Bitcoin helps civilians escape the war in Sudan, Bitcoin network to reduce more emissions than its energy sources produce. All right, that, that idea here is, of course, once big finance and big Wall Street gets on it, Larry Fink, the BlackRock CEO, nothing could be bigger, then mysteriously, the narrative in mainstream media begins to turn pro crypto. Is there anything to this? What do you think?

• 1:35:15Speaker 01

  I mean, yeah, I guess like Lex is probably cherry picking here, to be honest, at the same time, like, but and to call something a trend, I think you have to have longer than maybe like a few weeks of data. But there is something to media organizations changing their tune based on different trends, right? Because at the end of the day, they're for-profit organizations. They don't want to be going against something that's going to, you know, lose them money or lose them clicks or things like that. So, so yeah, they're definitely going to probably align themselves more closely with these things. And at the end of the day, they could be doing this as well as a way just to ride another trend of the public having a more favorable view. But in reality, they don't carry the weight. It's going to publish whatever gets them the most clicks.

• 1:35:58Speaker 01

  So I don't know, I don't have very much faith in mainstream media, that's for sure.

• 1:36:01Ryan Sean Adams?

  Yes. You, one wonders whether it's more can buy algorithms at this point and whether this is kind of new ideas being created. Okay, so one other take this week I want to ask you about. So this was actually somewhat controversial. I said this, it's embarrassing that even my crypto friends use Venmo, not crypto, to split a dinner. And we have to change that this cycle. We can't guilt people into it. We have to make crypto wallets so useful, they're irresistible. It's that idea of account abstraction that we were just talking about. It's like, where's the crypto wallet? Where like, we can, I don't care about paying at Starbucks necessarily, because that requires like somebody like a Starbucks point of sale type system, right? I'm just talking about

• 1:36:44Ryan Sean Adams?

  you're with a bunch of crypto natives, right? And you just had a dinner and you're gonna go split the bill or something like that. And it's a peer-to-peer transaction. And I find myself still using fintech tools for that, still using Venmo. And I wish that wasn't the case. Here's part of the maybe the controversy. DC investor says, it's possible small P2P payments like this are not a value prop of public blockchains in most societies. In fact, I'd argue they are not, even though the narrative was popular for a long time, starting with Bitcoin. He's basically saying, actually, P2P isn't the use case that crypto is focused on. It should be the more kind of

• 1:37:23Ryan Sean Adams?

  the large, you know, like store of value would be more of a use case, for instance, or, you know, collateralized loans or something like that. And P2P microtransactions will be one of the last things we solve. I get that, but I still want my Account abstraction crypto wallet, like, why am I still banked here? I want, I want to be bankless, Anthony. What's your take on this?

• 1:37:48Speaker 01

  I think really I agree with DC in the short term and disagree in the long term. I think P2P payments are a value prop of, of blockchains generally. But at the same time, we're just way too early still. Um, it doesn't exist a wallet right now that would be able to do this, right? In a, in a cheap way, in an efficient way. And also, at the end of the day, the reason we have dollars in a bank account still, we have money in a bank account is because crypto is not integrated with many real world things. You can't pay a lot of things in crypto, right? So when that changes, it'll be, people will have crypto on hand, right? For everyday expenses and they'll be able to do that Venmo payment at dinner or that, you know, Venmo like payment at dinner.

• 1:38:30Speaker 01

  So I think it really just comes down to building out that infrastructure, getting it more integrated with the real world. And then eventually we hit the tipping point where people are like, oh, well, you know, why would I use this old world money? When I can use this new world money, so to speak, right? And yeah, it's going to take a while. It's, it's definitely more of an end stage crypto adoption thing rather than an early stage. And it's going to require a lot of work to get there. That's why I said I disagree, sorry, agree with DC investor in the short term, disagree long term. I know people have, you know, will sometimes say, well, it's been like 15 years since Bitcoin's been out and we still don't have P2P payments. It's like, yeah, because Bitcoin isn't suited for it, right? Ethereum layer one is not suited for it. Ethereum layer two is just getting started now.

• 1:39:13Speaker 01

  Stable coins, uh, you know, uh, in terms of being used for, uh, at, at scale on Ethereum, they're not that old, right? And the infrastructure obviously is getting better all the time, but at the end of the day, we're still super early. I think we're, we're, we're still way too early for the world that, that you want, Ryan, unfortunately. But it's a world that I want as well, but I think it'll come with time.

• 1:39:35Ryan Sean Adams?

  That's cool. And you know, you're talking about like, you know, it's been, it's been 15 years, right? Why, why do we have this? You know what we do have though? And this was sort of, I was reminded by this after I tweeted, it's actually the project manager at PayPal, product manager at PayPal. He, he sent me after this, he DM me and he's like, yo, you know, we could do this crypto thing in Venmo. And he just sent me point 005 ETH in Venmo, as if to say like, yo, we got this, like, we can do this too. And he has a, you know, a dot ETH name. So this is somebody who is clearly crypto pilled inside the company at PayPal and Venmo building this out. And so it was kind of cool in my Venmo

• 1:40:16Ryan Sean Adams?

  app in fintech to receive some ETH. And of course, like, it's an IOU, but I, for ETH, right? It's custodied, it's not fully bankless. So it's not the full vision. But we have gotten to this stage in 15 years and Venmo and PayPal have, I don't know, hundreds of millions, 400 million or something, customers worldwide. That's absolutely massive progress that we're able to do this. And recently, I think it was within the last six to 12 months, Venmo has also enabled the ability to withdraw to a bankless, non-custodial address, which is a big step. So now we also have an off-ramp from these systems. Anyway, I was, we were sending money back and forth and I'm at

• 1:40:58Ryan Sean Adams?

  the stage where I'm trying to get AML KYC'd, of course, in order to send him back the money on his, on his bankless address. And I'm almost there. But look, man, that's progress. That's very cool. The, the original, I don't know, back in 2013 or back when you started getting into Bitcoin, Anthony, imagine being able to buy a crypto native asset in a fintech tool and send that to a friend, even if it's fully custodian. Like, that is progress. And, you know, I think, I think we're getting there. We're just in this weird interim phase.

• 1:41:32Speaker 01

  Yeah, it definitely is progress. I mean, as you said, it is custodial. So it's like the easy way of doing this, so to speak, because you can just run a ledger in the background and there's no need to do on-chain transactions for this. So it's like a centralized exchange, right?

• 1:41:46Ryan Sean Adams?

  A sidechain.

• 1:41:47Speaker 01

  Yeah, well, yeah, essentially, it's a sidechain to Ethereum, which isn't necessarily a bad thing. But yeah, I guess the dream that you were referencing in your other tweet was the fully bankless, non-custodial payments. We'll get there. We'll get there eventually. But yeah, I still think it's too early, unfortunately.

• 1:42:02Ryan Sean Adams?

  I don't want to be doing this podcast with you in like five to 10 years and still not there yet. All right. Like, we gotta...

• 1:42:08Speaker 01

  Yeah, yeah.

• 1:42:10Ryan Sean Adams?

  All right. Well, a last question I have for you this week, as we bring this to a wrap, is another question I put out on Twitter. The world thinks crypto is a scam. How do we change that perception? What's your take on this, Anthony Sisano? This idea that crypto is a scam, obviously, you and I disagree. Most listeners will also disagree. But the world thinks it is. How do we change that?

• 1:42:34Speaker 01

  So I really think it's perception at the end of the day, right? Like, there are so many scams in the world that aren't perceived as scams because they are marketed in such a way that convinces the general populace that they are not a scam. And you could stretch the definition of scam to meet a lot of different criteria, right? But there are certain things that people say are scams. Like, so let's say, student loans in the US, they're predatory, you know, they have high interest rates, they lock people in for a very long time, and some people consider them a scam, right? But then there are other things that may also look like a scam, but no one's calling it a scam because they've been able to successfully

• 1:43:14Speaker 01

  market themselves as not a scam. And I think when it comes to crypto, we both believe it's not a scam. And obviously, there are scams in crypto. But so how do we change that perception? And I think that it's a very tough task to do, because there is no centralized marketing for crypto, right? There is no crypto overlord that says, this is the way we're going to market crypto to the masses. At the end of the day, it's a very disjointed ecosystem, a very decentralized ecosystem, that has different sectors to it. Some people will never, you know, pay attention to... Certain assets, but pay attention to other ones or pay attention to certain sectors and not other ones. Some people will spend all their time at NFTs, but not look at DeFi at all, for

• 1:43:58Speaker 01

  example, right? And, and let's say you're in NFTs and you get rugged a bunch of times. You're like, you're gonna throw up your hands and be like, oh my God, crypto is all a scam, you know, screw this, right? So I, I think it is just a perception thing at the end of the day. So how do we change that perception? I don't have a good answer to that. And I was reading through the replies and I'm like, it's kind of funny reading the replies. I was thinking the whole time, like, there are so many different replies that it speaks to exactly what I was saying, that because there is no central overlord dictating the narrative or dictating the marketing, you're gonna get all these different replies that imply different things. And there's not going to be a, a kind of like, correct answer here. So I don't have a good answer for this, but I think that people should read through the replies on your tweet to get the different answers and to get the

• 1:44:41Speaker 01

  different perspectives here. But generally, if, if, if you kind of held the guns on my head and said like, okay, you have to answer this, you have to have a take on this, I would say, let's just keep building, right? Let's just keep building, keep building products people want to use that actually provide value. And eventually, if we build things that enough people use, and it, it, it shouldn't change that perception and change the narrative in the, the minds of the masses. But, but yeah, even in that world, it, it may not, right? It may not be a, a thing, it may, it may not happen for a lot longer after we do that. But yeah, we'll have to see how that plays out.

• 1:45:14Ryan Sean Adams?

  So we just need the builders to build, and then we just need some time. And your other message is, hey, scam is in the eye of the beholder, right?

• 1:45:22Speaker 01

  Well, yeah, I mean, it is though, because like, there are legit scams in crypto that people don't think are scams. And I'm like, this is literally a scam, dude. Like, it's pretty obviously a scam. And they're like, no, it's not, it's not a scam.

• 1:45:33Ryan Sean Adams?

  I can't tell sometimes. Sometimes in crypto, I feel like we overuse the term scam, and other times I feel like we don't use it enough. Other times I'm like, oh, no, we should call these things out. So I, I just don't even know how I feel about that. But yeah, it's, it's interesting. We definitely have a narrative problem right now, but of course, we will when prices are down. Let's get to the meme of the week here. This is a tweet from Spreak.

• 1:46:00Ryan Sean Adams?

  Crypto company announcement translation guide and one column. Today is my last day. I'm excited to spend more time with family and working on new projects. What that really means is I'm quitting because of massive fraud and looming legal actions. Here's another one. What it means if you're looking for the translation. We are excited to announce our expansion to insert island nation state. What that really means is we are under investigation by the CFTC. We are excited to announce our expansion to the UK. That really means this, we are under investigation by the SEC. I love this. All right. What decentralization actually means. Founders and investors are ready to dump their tokens on you. Wow, that is, I think, a, you know, a negative take, of course, but, well, that's where we are in the market cycle.

• 1:46:44Ryan Sean Adams?

  So I found this funny. That's your meme of the week this week. Anthony, the daily way keeps on popping out videos. I'm gonna give you a shout out. This is the daily way YouTube channel. So if you are listening to this on a podcast, you gotta go look up the daily way in your podcast feed. You can get episodes daily, right, Anthony? I mean, this is the daily way, of course. And if you're watching this, if you're watching this on YouTube, you gotta go over to the daily way channel and hit subscribe. Anthony, you do the fantastic episode every day that is technical, is Ethereum focused. That is absolutely fantastic to get a refuel on everything that is going on in the Ethereum economy.

• 1:47:29Ryan Sean Adams?

  It's a, it's fantastic place to go. And Anthony, I want to thank you for doing so many episodes with David and myself on the roll up. David should be back starting next week. He is up on a mountain. This is him climbing Baker Mountain. He's doing three mountains and he'll be back next week. But Anthony, you've done a killer job in helping David and I manage some vacation and keep these roll ups going. So we definitely appreciate you. Thanks, man.

• 1:47:55Speaker 01

  Yeah, thank you very much. Thank you for the shout outs and yeah, thanks for having me on. It's always really fun being on these on these rollups and talking to you and David. You guys have a great perspective on things and I think that I really like the back and forth. Instead of just talking to the camera on my own a lot of the time, right? I love the back and forth with people. So yeah, thanks for having me on.

• 1:48:15Ryan Sean Adams?

  Absolutely. Well, guys, thank you for listening to the Bankless Rollup. Got to end with this, our typical risks and disclaimers. Crypto is 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.