Layer Zero | Eric Conner

Eric Conner joins the second episode of Layer Zero. Eric is the co-founder of EthHub along with Anthony Sassano, and is a recurring Bankless guest as well as a crypto twitter staple. From the early days of Ethereum to golf and Porsches, David and Eric discuss things at large — what does Ethereum have left to prove? How do you manage Ethereum Brain? What will the next generation of crypto natives look like? ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ 🎖 CLAIM YOUR BADGE: https://newsletter.banklesshq.com/p/-guide-2-using-the-bankless-badge ------ BANKLESS SPONSOR TOOLS: ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum 🍵 MATCHA | DECENTRALIZED EXCHANGE AGGREGATOR https://bankless.cc/Matcha 🔐 LEDGER | SECURE YOUR ASSETS https://bankless.cc/Ledger 🦄 UNISWAP | DECENTRALIZED FUNDING https://bankless.cc/UniGrants ------ 📣 TracerDAO | Building DeFi Infrastructure. Join the Discord! https://bankless.cc/TracerDAO ------ Topics Covered: 0:00 Intro 0:00 Intro 4:00 Eric Conner & Podcasting 7:00 Early Liquidity 15:53 Regulators Protecting Investors 25:28 Finance Background 31:12 Integrating Digital Finance 38:58 Bitcoin and Maximalism 46:27 Punks vs BTC 51:00 Ethereum Brain 56:18 The Space Never Sleeps 1:01:30 Marrying Ethereum 1:05:36 Golf 1:06:44 Porsche & Electric Cars 1:10:40 Governance Tokens 1:19:19 Closing & Disclaimers ------ Resources: Eric on Twitter https://twitter.com/econoar?s=20 EthHub https://ethhub.io/ ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures

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

• 0:07David Hoffman?

  Welcome to Layer Zero. Layer Zero is a podcast of unscripted conversations with the people that make up the Ethereum community. Ethereum is built by code, but it's composed by people. And each individual member of the Ethereum community has their own story to tell. Cypherpunks understood that the code they write impacts the people that use it. And Layer Zero focuses on the people behind the code because Ethereum is people all the way down, and it always has been. I'm David Hoffman, and today we are talking with Eric Connor. Eric Connor is what I have been calling the unofficial community manager of Ethereum. The metaphor I like to use is that he was stoking the fire during the 2018, 1920

• 0:48David Hoffman?

  bear market, keeping the fire warm for all of us while we all kind of coped with having absolutely no interesting price action at all. Meanwhile, the innovation and development behind Ethereum and what was going on in the early, early stages of DeFi was absolutely insane. And Eric was one of those people who has helped everyone, I think, understand that, no, we're not crazy. Everything that's happening here is insanely awesome and cool. And just because the prices don't reflect that doesn't mean that it's not awesome and cool. Eric has gone in and out of being a prominent crypto Twitter individual. As soon as the bull market came on, he started to kind of take a step back.

• 1:30David Hoffman?

  And now he's kind of graduated into more or less just a shitposting position. And I actually kind of find his journey in relationship to Ethereum pretty interesting. As we all know, Ethereum is very, as an ecosystem, is very dominating, very overwhelming. And Eric has gone through the whole entire stages of like, you know, early stage interest in Ethereum, deep diving all the way into it, getting overwhelmed, having a bull market come, taking a step back and learning how to really... Walk the line of Ethereum life balance, where you can actually live a life that is actually not completely defined by like being an Ethereum or crypto Twitter person.

• 2:10David Hoffman?

  Eric has always been a mentor to me in learning how to navigate the space and some of the insights and just, you know, things that he says I always, I always find are more and more true as time goes on. So I hope you enjoy this conversation with Eric Conner. But first, before we get there, we have to take a moment to talk about some of these fantastic sponsors that make this show possible. Living a bankless life requires taking control of your own private keys. Not your keys, not your crypto. That's why so many in the bankless nation already have their Ledger hardware wallets, which makes proper private key management a breeze. But the Ledger ecosystem is more than just a secure hardware wallet. Ledger is the combination of the Ledger hardware wallet and the Ledger Live app.

• 2:51David Hoffman?

  And if you're used to seeing all of your crypto services and favorite D apps all in one place, Ledger is where you want to be. Not only does Ledger let you buy crypto assets straight from the app, but it also hooks into decentralized exchange aggregators like Paraswap, which makes sure that you are getting the best prices on your trades without your assets ever leaving your control. DeFi never stops growing, and the Ledger Live app grows alongside with it. So click the link in the show notes to see all the DeFi apps that Ledger Live has. And stay tuned as more and more apps come online. And if you don't have a Ledger hardware wallet, what are you even waiting for? Go to ledger.com, grab your Ledger, download Ledger Live, and get all of your D apps all in one place.

• 3:32David Hoffman?

  Arbitrum is an Ethereum scaling solution that is going to completely change how we use DeFi. If you've been using Ethereum for the past 12 months, you've probably noticed the high gas fees and the slow confirmation times that have been plaguing DeFi. Too many people want to use Ethereum, and it doesn't have enough capacity for all of us. That's where Arbitrum comes in. Arbitrum is a layer two to Ethereum, which means Arbitrum can increase Ethereum's throughput by orders of magnitude at a fraction of the cost of what we are used to paying. When interacting with Arbitrum, you can get the performance of a centralized exchange while tapping into Ethereum's level of security and decentralization. This is why people are calling this Ethereum's Broadband moment where we get to add performance onto decentralization and security.

• 4:14David Hoffman?

  If you're a developer and you want to save on gas costs and make an overall better experience for your users, go to developer off chain labs.com to get started building on Arbitrum. If you're a user, keep an eye out for your favorite DeFi apps building on Arbitrum. Arbitrum has been working with over 300 teams, including Ethereum's top infrastructure projects, and will be opening up to all users shortly. There are so many apps coming online to Arbitrum, so you may want to pack your bags in preparation for the great migration to the Arbitrum Layer 2. To keep up to speed with Arbitrum, follow them on Twitter at Arbitrum and join their Discord. Hey Eric, how's it going?

• 4:52Speaker 01

  Hey David, good. How are you?

• 4:54David Hoffman?

  Pretty good, pretty good. You are guest number two on Layer Zero.

• 4:58Speaker 01

  Nice. Yeah, I'm excited for this new format you were telling me about. It sounds like a nice little change up. I feel like in the podcast space, like we were just talking about this before recording, but stuff gets a little like, not scripted, but like you kind of hear the same questions and formats over and over. So just kind of a freestyle is my vibe these days.

• 5:18David Hoffman?

  Yeah, and freestyling is definitely something like missing in crypto because like there's so many projects to talk about and some people like explain the rationale behind their projects in really like awesome ways. But to me, that makes me think of like, okay, why is this person like so good at A, coming up with a project? And then B, explaining it like that tells me there's like a little bit more behind the scenes of what's going on there.

• 5:42Speaker 01

  Yeah, totally. No, I know. There's so many like, I mean, in cryptos in general is funny, right? Like, I feel like going beyond just the typical like interviews and talks is when you get into the more interesting conversations. Like doing Into the Ether when I would do guest episodes, the best stuff always happened after the mics got turned off.

• 5:58David Hoffman?

  Every time, dude.

• 6:01Speaker 01

  It's not because people are like scared to say stuff either. It's just like when you just, I don't know. And there's this free flow conversation with no one's looking at questions and stuff. I feel like people just say, and it's not like they're saying something they wouldn't have wanted to say on mic. It's just like a more natural conversation.

• 6:15David Hoffman?

  I mean, it's definitely like a little bit of that, right? It's like, all right, now that we're stopping recording. I can like take the persona off and I can like like kind of speak a little bit more freely, a little bit more like I don't, I don't have to consider like lawyers or anything. But then also to some degree, like it's just like you've bring up all the things that you forgot to talk about while you were on the actual recording, right? And then that's like, like you said, like the super interesting stuff. It's, it's terrible practice and you know, I would never actually do this, but like, I always wanted to like, just leave the recording actually going like, all right, we're done now. But I'm going to leave it. I'm going to listen to record though.

• 6:52Speaker 01

  Yeah. Then like release like blooper clips. That's like one big, people would not be too happy about that.

• 6:57David Hoffman?

  No, no, not, not at all, not at all. So I kind of want to start this, uh, this conversation and then actually work backwards from it with, um, Ether Delta. Tell us, tell us about Ether Delta and what it was like to trade on Ether Delta.

• 7:12Speaker 01

  Yeah, man. Wow. That's a huge throwback. Yeah. I guess most people listening probably know at this point, I, I got into this, the Ethereum scene. Because I had, was like an IRC trading channels. Man, it's funny even thinking back like IRC, now we're on Discord, so much.

• 7:27David Hoffman?

  I actually don't even know what IRC is. I never got that experience.

• 7:30Speaker 01

  It was like, yeah, it's like the original, like totally, you didn't miss much. Like it was kind of like, um, where people that anonymous wanted to go and kind of hide. And like, it wasn't being tracked and stuff, but just total shitty, just like text channels, right? And but that's where like a lot of Bitcoin traders hung out in their early days. And I had some friends that got owned in the Gox hack and that led us to say, okay, what are we doing here? We've got this technology potential. Why are we trading these decentralized assets? Why are we hiding in IRC channels and all this stuff? And we're just trading on centralized exchanges? And that sent me down like around that exact time, um, was when Vitalik pitched Ethereum at Bitcoin Miami.

• 8:09Speaker 01

  And everything just kind of clicked. So long story short, we, we, three of us, um, a couple of friends that got owned by Gox and myself, who didn't get owned by Gox luckily. Set out to build Ether X, which was a way too early attempt at building a decentralized exchange. But funny enough, that ended up, one of the people, he wasn't like a direct team member at the time, but he was in like our Slack channel. He went on to build Ether Delta. Um, and man, like that feels like a totally different universe at this point, right? Like you had to literally go, like people are so spoiled now by AMMs, right? Or you go on, you just trade and matching happens. And even like if you're using like matcha or one inch, like all this stuff just happens easily and you get matched.

• 8:51Speaker 01

  On Ether Delta, you literally had to go like click the specific order to get matched. And it was so shady.

• 8:57David Hoffman?

  Right. There was, there was no market buys, right? Like you couldn't just market buy. You had to actually select an order out of. And you could, if you were not paying attention, you could in theory like select a, a less optimal order than what was best offered. And sometimes you would actually have to if your trade was larger than like the actual best offer. But your trade was so large, like it just wouldn't matter and you didn't want to go through all the steps. You'd actually have to take a, go down the list. Yeah.

• 9:22Speaker 01

  Yeah, no, it was, it was brutal. And it's funny because like, anybody could list a token, which you know, that created chaos too. And you could plug in like addresses, but like if you think back, right? Like it's funny how sophisticated that actually was. It was just like the user experience was horrible. We hadn't quite figured out the user experience, but like in a way, that's kind of how like Uniswap. You just plug in an address and it pulls up the token, right? It's just, it was done differently. There was too much information on one screen. So like you knew, you knew something was there, but you weren't sure like how long it was going to take to become mainstream. And I would say it happened a lot faster than I actually thought it would. I, I've kind of always back then probably would have said, ah, 10 years down the road.

• 10:02Speaker 01

  Mainstream might be using DEXs and then all of a sudden, you know, what, two years later, people, Uniswap came along and stuff like that. It's crazy how fast it actually moved.

• 10:11David Hoffman?

  That's definitely, definitely been like the pattern that I've noticed is like, all right, we have this Ether Delta thing. Like it's a great proof of, of concept. It's obviously broken. And then you don't see any progress for a really long time and you get a little bit disillusioned and you get a little bit frustrated. You're like, all right, what is this thing that we are actually doing here? And then all of a sudden, boom, there's Uniswap. And then like just a few short months later, we've solved all those problems like all at once. Like it's like, there's nothing happens. You get frustrated and then boom, the solution happens. And then it's just like a, a step order function and like the way this stuff works.

• 10:44Speaker 01

  It's crazy, and I guess it's because of all the geniuses in this space, I think. I mean, my investment thesis for ETH has always been like the smartest people I know are essentially all in Ethereum, like the smartest people I've run across in my life. I mean, obviously, there's some outside the space, but like in general, the more amount of smart people I know are in the Ethereum space. And like, that's always been my investment thesis, and I think that's why things happen faster. And also, like, we've totally cut out like the corporate bureaucracy crap too. And like even coming down to like creating products, right? Like, I have a background in product management. Before that, it was finance. And like, things just take longer to build in the traditional space. You have like managers and you've got these like silos and you're going through like these

• 11:28Speaker 01

  old outdated processes, right? And I feel like now people are like, let's just get a small team together and build this and we'll figure out funding later. And a lot of that has to do, I think, with these teams know they can launch a token or easily raise money later, right? And I think that allows people to fearlessly build things. And that's kind of, I believe, why things seem to move so fast in this space.

• 11:52David Hoffman?

  Yeah, that is a good point that I don't think I've thought of before. One of the magic things about tokens is like they're easy to issue, they're permissionless to issue, so they're always a tool for every single team. But like people can like quote unquote like go public and get liquidity way faster in the Ethereum world than they ever could in in the traditional world, right? You'd have to go like seed round after seed round after seed round just to stay alive. And like now we're seeing like things and projects develop with just like one or two seed rounds and then token. And then like they, at that point, they have all the money that they could ever ask for, that they would ever need.

• 12:27Speaker 01

  Yeah, totally. It's interesting, right? And like you're putting that risk more on just random speculators, which

• 12:35Speaker 01

  Back in like the, I guess in the 17 ICO days, that wasn't ideal because people, there were a lot of promises made. And like the ICOs happened and teams disappeared, but now like you just said, we kind of are getting the product first at least. Like I don't, I can't remember a team in the last like two years that launched a token really before a product. Like maybe a few scammy ones, but nothing like legit, right? And I think that's been the big shift. I mean, tying this all the way back to like Ether Delta, right? That was the first time we were like, oh man, these tokens, like tokens have been talked about in the white paper and theorized on Reddit and all of this. But that was the first time where you're like, wow, I can get like instant liquidity for anything I create. And that, that was a huge breakthrough that Ethereum created and I think got lost in a lot of the 17 ICO FUD was,

• 13:17Speaker 01

  it wasn't like about scammy ICOs, it was about anybody in the world being able to fundraise at a click of a button. And that's, that's insanely powerful. And now at least we're seeing products be built before you launch like a governance token. And that gives speculators a little more meat to work with, right? And I think it's less risky. Yeah, they're taking on risks that the team disappears, that the token doesn't do well. But that's a way better model that we're at now than back in the Ether Delta days.

• 13:43David Hoffman?

  There's probably like a connection between the, how powerful the concept of early liquidity and token liquidity that we were just talking about, and the magnitude of like the ICO craze, like early liquidity is such a powerful concept that it accidentally created the ICO mania because like we got just like over our ski tips like way too soon. And so like, there's a connection there, like the ICO mania was so incredibly massive because this tool of early liquidity is so incredibly powerful.

• 14:13Speaker 01

  Yeah, no, absolutely. And it's like, we saw people just totally FOMO into that. And it's funny, the other, the flip side of that is not only could anybody raise liquidity, anybody could get into early startups, right? And that's something that I think people underappreciate as well. And like, I think regulators are most scared of that, I would say. I think when the SEC claims they're trying to protect investors, really, they want to have a say on like who, they want the gates of entry, right?

• 14:37David Hoffman?

  Right.

• 14:38Speaker 01

  Controlled of who can get into these things. And traditionally, it's just been accredited investors, which are people that are already well off and wealthy that can get into seed rounds and Series A and early equity investments, right? And that, this is a huge paradigm shift. So I think on one side, you saw these teams say, oh, wow, we can raise money instantly. Let's do it. And on the flip side, it was like a perfect boiling point, right? On the other side, it's like, oh, wow, for the first time ever, I could try to be an early investor in a project. And those two concepts are not going anywhere. And I think oddly enough, we're kind of self-regulating pretty well as an Ethereum community. I think it pretty quickly on Twitter, like if something seems scammy, like called out, you know, some people are going to get burnt, of course, like we, we're going to go through booms and busts.

• 15:21Speaker 01

  But I think we're doing a pretty good job as a community and realizing, you know, these models, I think we're at a good point now where it's like, at least like we were just saying, you have a product and then you do it. But it'll be interesting to see, like, is the SEC, our regulators, going to try to really crack down on this? Like Anthony and I were just talking last week. I mean, Poloniex got fined, but it was only like $10 million. And it's like, how big is the SEC's bite really, right? Like Poloniex has made way more money than that. And that was their fine. We saw that with EOS too. So I think that's going to be an interesting narrative to watch going forward.

• 15:52David Hoffman?

  Totally. Here's something I want, I want to get your perspective on. And this is something that Ryan and I talk about on like the weekly rollups all the time. Where we talk about like the SEC regulators preventing like IMX and like the other like token airdrops from going to US citizens. And like, it's all under the guise of like, yeah, we're protecting investors, but like in this format, they're definitely not because all they're doing is protecting investors from airdrops. And like the, one of the cool things we've unlocked with early liquidity is, you know, putting like, like potential 1,000x opportunities into the hands of individuals. So like, there's two rationales that like could come out of this. One is that like the tax reporting requirements gets a lot hairier when like it moves from just like,

• 16:37David Hoffman?

  You know, small funds and accredited investors. And there's only like a handful of those that invest, right? Like for the first like seed round or angel round, like it's just like maybe 50 different entities, right? But then when we do in like an ICO, that moves into like 5,000 plus individuals. And so from like a tax collecting and reporting perspective, it's just like two multiple orders of magnitude more hairy to make sure that all the citizenry is reporting the taxes that they are obligated to report. So there's one perspective. The other perspective is that all this regulation is just like done by incumbents to gatekeep so that they can have all the exposure for themselves. And so like, you know, if only 50 entities are getting into an early investment opportunity,

• 17:22David Hoffman?

  it's more likely that, you know, they are, the incumbents are one of them and they can keep all the, you know, the small fries from having these massive upside opportunities from early-stage startups. And so that's the other perspective. I'm sure it's a little bit of both true, but like which do you think is more true?

• 17:37Speaker 01

  Yeah, I agree that it's a little bit of both. I think there's the, so if I had to pick one, I would agree most with the first because I do think government IRS are definitely feeling overwhelmed with tax reporting and how to even handle this, right? Like I don't even know, like honestly, if someone tried to look at my transactions from 2020, I can barely figure them out enough to report them, right?

• 17:59David Hoffman?

  Individuals can't figure it out. How is the IRS going to do it for everyone?

• 18:03Speaker 01

  Right, exactly. And like the reporting rules are still not quite there. I think we're years away from those being really clear. So I do think it's that, right? There, right now, like you said, a lot of wealth is concentrated in a few entities, a few people, and it's easy to audit them and look at those returns, right? And that's where a lot of the money's being made. So that's where a lot of the taxes are coming from. Now that wealth is spreading out more, I believe crypto is really kind of spreading wealth out to a newer, younger generation and amongst more people. Yeah, if they can't track that, they're going to be worried because they're potentially losing out more if people aren't reporting them correctly, right? I also think there's a perspective too, where in general, like within regulators and within the government, there's a power game as well.

• 18:46Speaker 01

  And I think some of these, some of these entities need to stay relevant and they're like crypto's the thing coming down the pipeline, right? And they're all trying to become the agency that regulates crypto, right? Because that gets them more funding, more bodies, more power. But yeah, I don't know how, I mean, they have to be scared, right? Not scared because It's scary because it's overwhelming to them. It's new and some of this stuff is just really, really hard to trace. There's there's software out there, but like, you know, LP positions and how that's treated and all this stuff. I mean, I think if ever they're 20 years away from being able to properly understand this, so they're trying to figure it out.

• 19:25David Hoffman?

  To some degree, like think of the people behind behind the with their responsibility of like figuring out all this stuff. Like I said, we can't figure it out. It's gonna have to be some sort of like automated thing. Like something like chain analysis or some like government like automation of just because we can read the blockchain. Like it's going to have to be like an input, input your addresses, receive a number type of thing. And like, maybe you can make arguments about like how the calculations were done wrong, but like, there's so much like, and plus like people. I play with my ledger all the times like, oh, I like, sometimes I'll wake up and I'll make 50 transactions in a day for some fucking reason. I don't know why. And like, all of a sudden, there's 50 transactions that I have to like login, report and like.

• 20:07David Hoffman?

  Again, for the if the individuals are overwhelmed, there's no way that like the IRS isn't going to get overwhelmed. And and it's also the perfect substrate to automate, right? It's literally a blockchain with all the transactions. It has to be an automated thing.

• 20:21Speaker 01

  Yeah, I agree. I think that's the way forward. And I think really what it's exposing is how ancient and outdated the tax laws are in general, right? So I think what we might see is agencies just being too overwhelmed and that leading to simplification of tax laws. So what might that look like? I know some countries have basically just like a fiat in fiat out policy where it's like just net gain or loss on your fiat.

• 20:44David Hoffman?

  Yes, it's just like that. Well, the problem is that then that incentivizes never actually going back out to fiat, which is like definitely something that I preach.

• 20:53Speaker 01

  Yeah, yeah, exactly. Yeah, that's the bankless model, right? But like something like this, right? To get things more a flat tax, for example, and not all these different taxes, but like Ethereum, DeFi has become too complicated for the tax laws. Like how you handle AMMs, some, you know, like I reported them one way. I know some people reported a different way. Other countries treat it like. They need to just come up to the times. And I think I hope this is going to result in simplification. Like, I don't mind paying my taxes, but the the huge bitch of it is trying to figure this all out.

• 21:23David Hoffman?

  Yeah, I do.

• 21:23Speaker 01

  7,000 transactions and all that.

• 21:25David Hoffman?

  I do mind spending like 40 hours a month of my life, like trying to actually do it right.

• 21:30Speaker 01

  Exactly.

• 21:32David Hoffman?

  You talked about how like these different agencies are trying to like all jostle for position to try and like be the agency that regulates crypto. And this is something that like, while generally, most all Bitcoin maxies and most Bitcoiners are pretty naive, sometimes the stories that they tell and the narratives that they weave are like super accurate. And maybe Bitcoiners don't have a monopoly on this narrative, but like, the state is an organization and like, all organizations everywhere have an incentive to grow larger, right? And so like, there's like, the CFTC, SEC, the Treasury, they all have their incentives to grow their funding and grow their influence and power, just because they're by the nature of a very organization, right?

• 22:15David Hoffman?

  And so like, no, and so this is always why Bitcoiners are so like anti-state, is because they all like see the logical conclusion that like, some sort of like three or four-letter agency out of the government is going to want to capture our industry. And so, what are your thoughts on that? Like, how do you think about that?

• 22:33Speaker 01

  Yeah, I mean, I agree. I definitely agree with any organization's gonna try to get bigger and over time, get more barnacles and become less efficient, right? And I think, like, you see that in this infrastructure bill, right? Like, it's supposed to be an infrastructure bill, but then there's all these amendments and tachons and the crypto laws are in there. And like, to me, it's just become inefficient, I would say, and I definitely am worried. I don't know where the fix is gonna be. I personally, like, if I had to vote on something, I'd probably say like, term limits, just to kind of keep career politicians out of this. You know, I agree, but I don't, okay, so everyone's freaking out over the infrastructure bill stuff, and like, kind of rightfully so. We need to fight for ourselves, we need to lobby.

• 23:17Speaker 01

  But I think what people don't realize is that this crypto generation is growing up and getting larger, and a lot of people from this crypto generation are either gonna become politicians or have power to vote in politicians, right? And I think what we're seeing now, it's a lot of, you know, politicians maybe going out near the end of their terms, life, whatever it might be. I mean, some of these politicians, like, 100 years old in Congress. I think they're going to just eventually be replaced with crypto friendly people. I know it's hard to imagine now because people think that, yeah, the states against crypto and all that stuff. But we kind of grow up in this. It takes a while for a paradigm shift to happen, right? That's why I'm not too worried about long term, you know, regulation of this stuff.

• 24:02Speaker 01

  But at the end of the day, right, if if we can be regulated, if if DeFi can be shut down, then we're doing something wrong. Right? There's some centralized point of failure. And that's kind of been my point on the infrastructure bill, like, guys, OK. Yes, it would suck to get some regulation put in against us and tax reporting requirements. But if you can stop DeFi, we're doing something wrong. We're here to make sure that this stuff doesn't matter, right?

• 24:24David Hoffman?

  Right. Yeah, all they're doing is they're just putting more and more onus upon the individual. But they're not putting more and more onus on Uniswap. And that's like, that's the important thing, right? Like, so long as Uniswap and so long, as long as the actual code is untouched, then, fine. Like, we'll we'll take, we'll concede whatever, so long as it's, you know, reasonable.

• 24:43Speaker 01

  Yeah, totally. I mean, I think we have done ourselves a little bit of a disservice with heavy reliance on centralized stablecoins, USDT, USDC. I do think there's a point of attack there for governments that we need to be careful with. I mean, most all DeFi protocols are very heavily reliant on this liquidity from centralized coins. I think that's where they would try to go after first if they could. But, you know, now Coinbase is a public company, they they have a bunch of lobbyists themselves. So, yeah, I mean, this is a long battle, but I do wish we would kind of reduce our reliance on that, if anything.

• 25:18David Hoffman?

  Right, yeah, I do hope, and I'm sure Amin would agree with me, is like, RAI is actually the way that we stop giving so much power to over to to USDC. You said that you have a background in in finance, and so I actually want to want to pick your brain on that. So I my my old roommate and a bunch of my friends from college, they were in like the business school part of the college, part of the university, and I kind of like tease them and joke with them about like, one of the reasons that I've done so well in crypto is that instead of majoring in business, I majored in psychology. So I didn't actually have to unlearn anything in order to learn crypto. But you actually majored in in finance or have a have a background in finance. So what was it like coming into crypto with a finance background? Do you think that was all like relevant or like, what was that story like?

• 26:03Speaker 01

  Um, I would say, yeah, it's interesting. It's funny. I've always been kind of fascinated with finance. I was like, my dad set me up with an E-Trade account when I was 10 years old and like dial up internet and gave me a little bit of money in there and I was picking out some stocks that I liked tonight. So I've always been into trading and kind of my own personal financial stuff, which led me to a finance degree. But you know, the finance degree was more of a play and I've always been a numbers guy and into trading, but more just like it was going to be safety coming out of college into a job. But then the financial crisis happened and I graduated in oh nine and that wasn't really the case, but everything worked out. Yeah, I would say

• 26:38David Hoffman?

  Graduated in oh nine.

• 26:40Speaker 01

  With a finance.

• 26:41David Hoffman?

  Jesus Christ.

• 26:43Speaker 01

  I got lucky enough to find a good internship and then a job right after somehow. But yeah, it wasn't the best timing in the world. You know, I would say like, what helped me most was more that background I had in like trading and finance. I don't think my finance degree specifically has been too applicable um in crypto, but what it has helped me with is like realizing how outdated the traditional finance world is, right? I worked at a bank for five years and like it was a great experience, met great people. But man, just like the processes in place and the technology. What's funny is I discovered crypto while sitting at my desk, working at a bank. Yeah.

• 27:23Speaker 01

  Ran across an article about Bitcoin in early 2013 as I was like bored at work scrolling through something. I think it was on Reddit.

• 27:30David Hoffman?

  And I What a hilarious, just like snapshot of his of just like, oh yeah, bored at work at a bank, discovered Bitcoin because he was bored.

• 27:39Speaker 01

  Exactly. And then it, you know, it fascinated me. I sent it to my girlfriend at the time, now my wife. I sent it to her and I'm like, oh yeah, we should probably like kind of look into this thing. Led me to buying some. What's really funny

• 27:52David Hoffman?

  Wait, so you bought Bitcoin and saw that thought that Bitcoin was cool on your first exposure to it?

• 27:58Speaker 01

  Yeah, well, I wouldn't say

• 27:59David Hoffman?

  Never hear that.

• 28:00Speaker 01

  I would. I didn't buy it that day.

• 28:02David Hoffman?

  Sure.

• 28:02Speaker 01

  But a few days after, I did a little research and created a Coinbase account and then

• 28:06David Hoffman?

  No, most people like they get exposed to Bitcoin and then they're like, man, this is bullshit. And then the price runs up and they're like, oh, I missed out on that. And then that's when they get in.

• 28:16Speaker 01

  You know, what's funny about me is like, I get very upset if I miss out on something that I, after the fact, find to be really awesome. And so I was already mad that it had gone from a dollar to like $200 at the time. So I'm like, oh, man, I already missed this, but I'm gonna buy some anyways.

• 28:33Speaker 01

  So like, you know, I felt like some of that was some NFTs these days too. But yeah, anyways, then I found it. And then I just kind of went down the Reddit rabbit hole, IRC rabbit hole. And then what what's really funny about this story to kind of tie it all back to my finest degree is like, I worked in the Treasury Department and our treasurer at the time had this little like, box in the kitchen, you could put questions in. So I wrote a question mainly, I've been a troll, I guess, my whole life, but I questioned and I said, what do you think of Bitcoin? Like, it's been on this big run lately. And this is the treasurer of like a large regional bank, right? And he responded to it and he actually had a good response and like it kind of,

• 29:13Speaker 01

  he would respond over email, there's a whole group. And like he was like, you know, the typical, it's probably in a blah, blah, blah, blah. But he had some good thoughts on it. And it kind of like sent this like Bitcoin, like exploration across the whole floor of the Treasury Department at this bank. You know, I don't know if many people actually bought into it, but I gave, I would say at least 30 people exposure to Bitcoin at about $200. So hopefully some of them bought it.

• 29:36David Hoffman?

  Wow, that's hilarious. Asking, who was like, was the CEO of the company or who was, who'd the question end up at?

• 29:44Speaker 01

  The treasurer.

• 29:45David Hoffman?

  Yeah, treasurer. So asking some like leader of a financial organization, their opinions on Bitcoin, after it just ran up in price, you can repeat that story like every four years up until today.

• 29:58Speaker 01

  That's what's funny. I mean, you know, some people, you know, I haven't worked there for a while. I still have some friends from there, but you know, some people think back, oh, man, remember when that guy was talking about Bitcoin in 13? I really wish I bought it.

• 30:08David Hoffman?

  I really wish I said, who was that guy? Like, I gotta look him up.

• 30:11Speaker 01

  Right. Yeah, it's funny, right? Like, early on, I mean, I know you were in ETH early too, and like, just all these technologies early, like, no one believes you, really? Like, I never really talked about it early on, because I didn't want to be the guy giving out, like, financial advice when something could go to zero. But like, I had friends and family I would mention around, no one gave it a thought, and like, during bear markets, no one talks to you. And then the second price starts going up, and it's way past where it was one day, everyone starts talking about it.

• 30:37David Hoffman?

  Right. No, first, you're the crazy crypto person, and then, and then you're the poor crazy crypto person. And then you're like the rich crazy crypto person. But people love you when you're at the third point.

• 30:48Speaker 01

  Exactly. And you know what's funny is it's happened like three times in Ethereum now with ETH, and then DeFi tokens, and now NFTs. They've all kind of gone through the same, like, wait, now you're crazy on ETH, now you're crazy, DeFi is never gonna happen. Now, NFTs, why would I buy JPG? And like, all three have gone through the same cycle.

• 31:04David Hoffman?

  Right, yeah. No, people, people like assets, and people like digital assets for some reason.

• 31:09Speaker 01

  Yeah.

• 31:09David Hoffman?

  I, during, during 2018 and 19, when I first getting into, into crypto, my mom's friends would always like, in a very concerned fashion, ask me, ask my mom, like, how I was doing. And like, to this day, and then like crypto prices starting, started to go up, and they would still ask her, and it's very concerned. Is he still doing like that weird Bitcoin thing? Like, oh, is he okay? And like, she would tell him, say, oh, no, like, he's actually doing pretty well, like, his podcast is like, going all right. Like, he's actually doing, making a name for himself in the industry. And then they still, like, don't get it. It's like, no, no, he should get out of that. Like, that's gonna, that's not gonna, not gonna work out.

• 31:48Speaker 01

  It's funny, right? Like, even to this day where, you know, crypto Twitter's giant, listening and followers of podcasts and YouTube channels, whatever, and like, you know, multi billions of dollars in market caps out there. It's funny how a lot of people in the mainstream still think it's like a fad, or there's only like five people into it. It really has been. I've talked a lot in the past, if I'm not sure if these two worlds are gonna collide or just run parallel forever.

• 32:13David Hoffman?

  Right.

• 32:13Speaker 01

  Um, I mean, they truly are just running parallel now. I feel like I live in an alternate reality. And I don't know, like, when I go back to the traditional world. World and like people that don't know about crypto and stuff. Honestly, I feel like kind of so disconnected from them because this is such a different life.

• 32:30Speaker 01

  Not gonna make it.

• 32:33David Hoffman?

  You're we were earlier, we were talking about just like how we're gonna get like good regulation and just good relationships with the nation state and like to some degree. Like as soon as like there's this phrase like science moves on one grave at a time. Like honestly, once the boomers all die, like it's gonna things are just gonna get a lot easier, like no offense to the boomers, like both my parents are boomers. But like, that's kind of what we need for this like digital world, this digital financial system to either get more integrated into the into the rest of the world. Or just have started absorbing all the people and we can finally like leave that shit behind.

• 33:08Speaker 01

  Yeah, totally. I mean, and that's kind of what I'm saying earlier too, right? With like eventually crypto native people will become the people making the laws, right? I think, you know, I'm even like a boomer, I guess, when it comes to crypto, right? There's there's a huge younger generation of anywhere from I'm sure all the way down to like 15 years old now up to, you know, 25 that's coming up too. So it's gonna take some time, but yeah, like your quote about science, I mean, this is just kind of how humanity works in general, right? A new idea, a new movement comes along and people are skeptical of it at first. I mean, look at the internet, right? You can pull up tons of articles about the internet where people are laughing at it and making fun of it. And like, why would we ever use the internet? The famous today's show clip, right? All this stuff.

• 33:52Speaker 01

  And then stuff just takes over. Now, what's interesting with crypto is like you're challenging a lot of, you know, institutions, the state, money-ness. And that's gonna take longer than the internet to take things over, right? Because those are bigger concepts. They're bigger institutions to kind of have to uproot. But eventually, I mean, it's inevitable at this point. I don't even I don't even think like two years ago, I would have said that it's inevitable. I still thought there was a path where Ethereum didn't win, but there's, I mean, it's, there's no doubt in my mind at this point. Like at a minimum, it might not just like totally usurp the current system, but at a minute this.

• 34:31Speaker 01

  Parallel world, which is its own financial system, its own creator economy, all this stuff that that's not being stopped at this point.

• 34:39David Hoffman?

  Yeah, at the very least, it maybe, maybe it doesn't make like the the past system completely irrelevant, but it gives the option for people to make it irrelevant for them as as individuals, right? Like, if you want to just forget about the legacy world, you can. I mean, there are still some problems that we need to figure out. Like, I still need to figure out how to pay my rent without using my Wells Fargo account. Maybe that never happens. But maybe that's just what like Wells Fargo is succumbs to is like, what what is your purpose? Like, you pay my rent.

• 35:07Speaker 01

  Right, yeah. Speaking of like Wells Fargo, man, going into like a branch, I had to go in the branch the other day and send a wire. I can't believe like it that still exists. And like when you realize, like, not that I want people to lose their jobs, but I think what people will realize is how much of this can be automated and fixed with a blockchain, right? Like, I'm going into a branch to talk to like two people to send money like, and I have to fill out forms. Like, it's just crazy, right? Like, all this stuff can be fixed with technology. I mean, even technology better than the banks have that's not blockchain. But I think what's eventually what will win the banks over are two things. The first is global access to liquidity, right? So right now, you're like a bank, you kind of just have your branches.

• 35:51Speaker 01

  Like, if you're not a Wells Fargo, you're probably a smaller regional bank. You can only tap into like one or two states, right? And that that gives you a very small reach of a customer base. When these larger institutions realize, hey, we can access money anywhere in the world at any point on DeFi, that's going to be like, wow, we can make a lot more money, right? We have, we can access a lot more liquidity. And the second is cost saving. So once they can, you know, replace all these people they don't need because the technology is outdated. Exactly, yep. All the paperwork stuff, you know, these companies are looking to cut costs everywhere. So once it becomes kind of an accepted thing in the world by regulators and whatnot, those are the two things that are going to win the banks over.

• 36:32David Hoffman?

  Yeah, to some degree, like some of the processes that banks have are just like.

• 36:37David Hoffman?

  We just do them just because we do them, right? Like, the reason why you have to go into a bank is like historically is because the bank would actually know who you were, right? That's not like, no bank knows who anyone is anymore. Like, you just show your ID and then like, oh yeah, the picture matches the face. That is you signing a transaction. Like, does your ID match your face? Like, oh yeah, okay, does the private key align with the, with the public address? Like, yes, yes, it does. And like, uh, there, there was, there was one time I needed to send a wire transfer that was over, over the limit. And I couldn't do it from my computer, so I had to go into a bank. But I was in a situation, I didn't have enough time to go into a bank. And so I called the bank up to see if I could do it over the phone and like, no, the only way that we let you do this is we send you like a, a PGP like encryption device.

• 37:22David Hoffman?

  And I'm like, that's just a fucking hardware wallet. You're gonna send me a hardware wallet so I can make a transfer out of Wells Fargo? Like, it's, it's just like so obvious that they are like trying to incrementally like do the same things that crypto does an order of magnitude better and did that like 10 years ago.

• 37:38Speaker 01

  Yeah, totally. I mean, I think your point about personal relationships is an interesting one. I mean, you used to go into a bank and they knew you, like you said, and like that, that's nice, right? Like, these people have your money, they're dealing with your money. Like, that, that's something that most people would want. That's gone now for multiple reasons that, you know, the banks have combined, merged and gotten too big for that and all this stuff. But I think one interesting thing that DeFi has is this like connection and relationship to team members. And that kind of happens through Discord channels and Twitter. You kind of feel at any point, now it's a little easier for us to say we're kind of prominent in the space and have been around a while and a little well, more well-known. So maybe for people newer to space, they don't quite feel this as much, but it feels like at any point you could hop on and talk to someone from the team.

• 38:23Speaker 01

  And that, that's almost like being able to hop on and talk to a bank CEO or Jeff Bezos with an Amazon order, right? Now, how this scales long-term will be interesting, but I think that's one of the cooler things about DeFi right now.

• 38:36David Hoffman?

  Yeah, and that definitely makes people feel a little bit more like trusting in this like weird code thing that's like ruling our financial lives. But like, oh yeah, now there's that. And like, to some degree, it's not necessarily even the team, it can actually just be the community that's in there too, right? And for some reason, like, communities love to answer questions and be customer support.

• 38:54Speaker 01

  Yeah.

• 38:55David Hoffman?

  Very like collaborative and social of environment.

• 38:57Speaker 01

  Totally.

• 38:58David Hoffman?

  I want to actually go back to like the pre-ethereal era of your crypto life. When you were focused on Bitcoin, because there was only Bitcoin to focus on, like, was your imagination as like grandiose as like Ethereum is now? Or like, what did you think like the future prospects of Bitcoin would be at that time? Because there wasn't Bitcoin maximalism back then, right?

• 39:17Speaker 01

  No, yeah, that's what's interesting. It didn't really exist. It was still like this. And when I entered in like 13, it felt more like the Ethereum community does now to me. What first just kind of attracted me was, okay, this concept of a digital currency, a digital money. And like I mentioned, I have like a trading background and I like just getting in on new trends. And so that's actually what captured me first and why I kind of instantly went to like these IRC channels, right, of trading. But what was interesting is most people then in like these, we weren't just talking about like price and trading, right? People were talking about these larger visions of kind of what we're talking about right now. Like, how can Bitcoin usurp the traditional finance system? And talking about concepts that we're talking about on Ethereum now.

• 40:02Speaker 01

  So it's not like the traditional or the Bitcoin maximalist following that we're used to at this point. And it's what's really funny is most of the people in those chats, when Vitalik pitched, or didn't really pitch, but gave a talk about Ethereum at Bitcoin Miami, most of those people bought into ETH because that's kind of the vision that they had seen, right? So I think when I first saw Bitcoin, just it was such a new concept to me. I didn't really know where it would go. I don't think I really had that vision until we started working on EtherX, which was like end of 14, I believe, tried to launch it beginning of 15.

• 40:42Speaker 01

  And I mean, I had such conviction in Ethereum, like not one day, like I said earlier, like I had some days where I'm not sure if Ethereum is going to like be this huge like takeover thing, but I've never one day thought Ethereum wouldn't be like a success on its own, right? Like this idea. Of code running, smart contracts running. I don't know why it clicked with me so much because I, before it, I had never thought of it, right? But the second I saw this, I'm just like, so Bitcoin kind of like led me into the rabbit hole and got me thinking about this digital money idea. What could be done with like a trustless ledger and all that stuff? You know, and having worked in like a treasury department, which is kind of like the heart of a bank.

• 41:23Speaker 01

  I kind of like saw how ledgers worked at a bank and it like, you know, they're so antiquated. So that kind of like trapped me in. But really the second I saw that talk about Ethereum, I've never looked back, but I don't know what, I don't know why it captured me so much to this day, to be honest. But I think it just clicks with me so much. I'm glad it did because it's obviously paid off. But yeah, that's kind of, you know, my Bitcoin to Ethereum journey.

• 41:50David Hoffman?

  See, this is also always why I call like Bitcoin is just a massive proof of concept. Like it was the conversation starter and like it got started conversations around like digital identity and trustless peer to peer like transactions and swaps. And you know, to some degree, like even colored coins was like an early version of like the ERC 20 token. And we're talking about how like your Bitcoin address is like your, your passport into like the digital nation state. Like Bitcoiners were talking about like what I call like the bankless nation before Ethereum was like even in existence.

• 42:25David Hoffman?

  And I wanted to get your opinion on this take Bitcoin maximalism wasn't really a thing in the way that it is now until like roughly around the time that Vitalik coined it. Right? Like first Bitcoin was Bitcoin and Bitcoiners were Bitcoiners and they had all these fantastic ideas about a trustless nation state free future with no regulation. And like all these, all these possibilities with Bitcoin. And then, and then this like Bitcoin maximalism switch happened where like Bitcoiners subconsciously realized that the only thing you can do on Bitcoin is have Bitcoins. And like all these grandiose ideas are going to actually happen elsewhere. And a decent amount of like Bitcoiners were just like in denial about that. And so like they created Bitcoin maximalism to like cope with that fact. That's kind of how, that's my interpretation of history.

• 43:11Speaker 01

  Yeah, no, I agree with that. It was a defense mechanism, I think. So going back to you mentioned colored coins like that. I think that's one of the most interesting things because I think that's where the pivot really happened. So back in like 13, when I discovered Bitcoin, people were talking about colored coins. They were talking about scaling. These were big topics in the space and like colored coins excited people because it was like this idea of tokens. And I remember people even talking about like stable coins, right? Like getting like USDT peg or USD peg tokens through colored coins and all this stuff. So there was this vision. And when Ethereum came along, you know, the stories, of course, are Vitalik really wanted to build Ethereum on top of Bitcoin and kind of got

• 43:52Speaker 01

  shut down on that idea and stuff. So that kind of created the initial rift, I would say. Yeah. And then once Ethereum took off, I think it started taking these ideas and it was more of a defense mechanism and obviously a little bit of saltiness, right? Like any Bitcoiner could have bought into the Ethereum pre-sale. I mean, they accepted Bitcoin, right? So I think once they saw those ideas going away and realizing that they weren't going to happen on Bitcoin because not because at that point, like now nothing's going to happen on Bitcoin. Let's be honest, because like the maximalism, the minimalist approach has taken over. But I think even right when Ethereum launched, it still had a chance, but it was going to just be more cumbersome now to do it on Bitcoin. There was no reason.

• 44:31Speaker 01

  And it became a defense mechanism because it's like, okay, we had these bigger ideas. We wanted to do them. Now we're not going to do them. And I'll look, I'll give them a little credit, like backing into the digital gold store value narrative has paid off for Bitcoin. It's an easily translatable thing to the mainstream. I think people buy into it. That's why Bitcoin's at, what, $49,000 today? But long term, it's not the winning narrative, right? Ethereum's narrative is much stronger, but it's going to take a little bit longer for people to understand it. You know, Bitcoin's not going anywhere, but they had to kind of pick this narrative, right? Because there wasn't going to be another one.

• 45:09David Hoffman?

  Right, and in my mind, picking the narrative of like digital gold, you're adding a futuristic word upon a, an ancient word. It's like, hey, there's this ancient thing and we're gonna make it futuristic again. But like, the reason why Ethereum's narrative is so complex is because there is no ancient corollary to Ethereum. It's purely, it's digital layered on top of digital, right? Like, it's only sci-fi. And that's why, that's where so many people get confused and skeptical about what Ethereum is. But like, when you kind of like suspend your disbelief, like, oh yeah, no, this is like the most sci-fi thing that we can ever think of.

• 45:42Speaker 01

  Right, yeah, I mean, it's still hard to explain to people. I mean, I've been in the space seven years now on Ethereum, and if people ask me like to explain it, I still struggle. Right? Like, it's tough to do, like, because there are so many things happening and so many visions. But, yeah, I mean, the digital gold thing, it's like, really what Bitcoin is saying at this point is, we're scarce. There's a scarce amount of these things, you should collect them, right? And scarcity goes back a long time. Now, for Bitcoin, what's interesting is, I don't think the 21 million cap is viable. So at some point, we'll be long gone probably, but at some point, the scarce narrative is gonna kind of blow up a bit. And that'll be interesting to see.

• 46:24Speaker 01

  What I find really interesting is like, okay, so here's, here's a good prompt. Are CryptoPunks a better store of value than Bitcoin long-term?

• 46:33David Hoffman?

  A hundred percent, a hundred percent, because they don't have to secure, secure themselves.

• 46:39Speaker 01

  Right, exactly. And there's never, like, there might be more Bitcoin minds, because they need to secure the network. There'll never be more Punks minds. And what's funny is like, some people listening to this may be laughing, oh, it's ridiculous to compare CryptoPunks to Bitcoin. But really, what Bitcoin's entire pitch is, behind the digital gold pitch is, hey, there's only 21 million of these, you should own one.

• 46:59David Hoffman?

  Right.

• 47:00Speaker 01

  CryptoPunks is the exact same pitch, and CryptoPunks has cool art behind it and has some traits, so, yeah.

• 47:06David Hoffman?

  It triggers the FOMO, there's like a status symbol behind it, like, you get to say that you got it early. Like, it's all the same things. The only difference is one's fungible and one's non-fungible.

• 47:19David Hoffman?

  I don't think Bitcoin will have to mint more Bitcoins. I don't think Bitcoin will ever hard fork. I think it'll just like get reorged over and over and over again until like it turns into like where something like BSV is now where like exchanges just delist it because like they can't keep on dealing with the reorgs. That seems like the that's like the hands off like we were just gonna send this thing off into the ether. And then this is like the inevitable outcome to it because like Bitcoiners are already committed to like never ever hard forking.

• 47:47Speaker 01

  Yeah, it's interesting, right? It's like if they don't and fees aren't high enough at that point, like you said, it'll be easily attackable. But yeah, but even at that point, we're gonna be so far down the road like with the whole ETH deflationary ultrasound money thing like, yeah, is it even gonna be worth them to fork it and add it? Because that is their only narrative left. And if they remove that, what's the point?

• 48:09David Hoffman?

  Yeah, I mean, they talk about Bitcoiners say like if something hard forks out of Bitcoin, then it's not Bitcoin anymore. Right? Like they've they've committed to like whatever this Bitcoin thing is, and they will ride that thing into the sunset and crash and burn along the way, in my opinion.

• 48:26Speaker 01

  Right. Yeah, we might see it sooner than later. I mean, we might see it within three happenings, I think. So that's another 12 years or so.

• 48:33David Hoffman?

  Right. Yeah, you said we're gonna be long gone by then. No, I think I think it's gonna be within, yeah, three or four happenings. Sounds about right. Hey, Bankless Nation, I hope you're enjoying the show so far. In the second half of the show, we talk about what I've been calling Ethereum brain and what happens to the person when they have just overwhelming amounts of Ethereum and crypto just going around in their lives. And how Eric has has managed Ethereum brain and what he does about it to like retain his grip on humanity. We also talk about Bitcoin maximalism a little bit and talking about how Bitcoin maximalism is a coping mechanism for coming to terms with a protocol that has never upgraded.

• 49:15David Hoffman?

  And we also talk about DeFi tokens and our mutual desire to see tokens distribute cash flows to holders as well as the long term outlook of yield in DeFi. We also talk about some golf. We talk about some electric cars and some. Other grab bag subjects. So I hope you're gonna enjoy the second half of the conversation. Before we get there, though, we have to take a moment to talk about some of these fantastic sponsors that make the show possible. When you shop for plane tickets, you probably use Kayak, Expedia, or Google to compare ticket prices. So why would you limit yourself to just one exchange when you trade crypto? When you make your trades, you want to make sure that you're getting the best possible price on your trade and that you aren't paying high gas costs that you could have otherwise avoided. That's why you should be using Matcha.

• 49:56David Hoffman?

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• 50:41David Hoffman?

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• 51:25David Hoffman?

  If you think that you have something to contribute to the Uniswap DAO, apply for a grant to Uniswap. Just look at the size of the Uniswap treasury. It's almost $3 billion. This mountain of capital is looking for labor. Do you have something? Thing of value to contribute to the Uniswap DAO. No matter how big or small your idea is, you can apply for a uni grant at unigrants.org and help steer Uniswap in the direction that you think it should go. That's exactly what we did to get Uniswap to be a sponsor for Bankless, and you can do the same for your project. Thank you, Uniswap, for sponsoring Bankless. So Eric, you've been, when was the moment you were like, quote unquote, like, full-time crypto, as in like, it consumed eight to 10 hours of your life, at least?

• 52:08Speaker 01

  Yeah, let's see, I would say it was around, well, I didn't go full-time working in crypto. So about two years ago, right after we started ETHUB into the Ether, and then I got a job at Gnosis, that's when I really left the traditional world behind. But I would say since 15, even though I had a traditional job, I was probably on the side spending way too much time on crypto, right? Like either on my phone, or when I would get home, spend the entire evening in the space. So what's, you know, what's interesting though is like, I always wanted, it was still speculative, like even when ETH did its first like run up to like a thousand or whatever, you just didn't know like if it was gonna go back. So I always wanted like a steady salary for the family on the side, right?

• 52:53Speaker 01

  And not just totally YOLO it into, so that was, that was a very fun thing to finally hop over to Gnosis, and I'm always thankful for the opportunity they gave me, because that was like, okay, now I'm full-time ETH. But I would say I've been pretty much entirely down the rabbit hole since about the time we tried to launch EtherX, which was like 15 or so. So it's been like six years now, and I, at this point, it's getting too hard for me to keep up. I think what we're seeing is like, the deep, we're seeing like, not silos, but like different ecosystems pop out within Ethereum. We're getting the DeFi ecosystem, the NFT ecosystem. I mean, keeping up with both is nearly impossible at this point. I just almost can't do it.

• 53:36David Hoffman?

  Right, and like, even when you're at like a legacy job, like in your mind is still thinking about crypto, like I kind of still consider that like, full-time crypto, if like, if that's where your brain is all of the time, then like, that's kind of where you are. And so then, then you started ETHUB because we needed to fight the Bitcoin or FUD. Thank you for doing that, got a job at Gnosis. So you're doing the ETHUB podcast, which like, in the past had like, three episodes a week sometimes at minimum, and then you're also doing your Gnosis job, like. How did you deal with that? Like, I kind of have called, gotten this thing that I've been calling Ethereum brain, as in just like, oh, you wake up and think about Ethereum, you're thinking about Ethereum all day, you're doing Ethereum things. Like, have you noticed Ethereum brain?

• 54:21David Hoffman?

  Have you gotten Ethereum brain?

• 54:23Speaker 01

  Totally. Yeah, I got largely burnt out, probably like, well, first of all, you can see these gray hairs here.

• 54:30David Hoffman?

  Are those Ethereum gray hairs?

• 54:31Speaker 01

  I think they are Ethereum gray hairs. I definitely reached a point where I got burnt out. And just one day, it's more just like constantly looking at screens on your phone. And one day I just said, I gotta like drop off Twitter and Discord for like a few weeks, right? Because this is, actually, you and I have talked about this a little bit offline, but the difference to me and working and loving the Ethereum space versus the traditional world is most people work their traditional job, you know, eight to five, they come home, they totally disconnect, right? Maybe you have some friends from work, but you're not then going home really, I wasn't going home and reading about treasury departments and treasury functions, right? Like, I wasn't passionate about it.

• 55:12Speaker 01

  The difference in Ethereum, like you and I and many others, is we work in it, we invest in it, all of our friends are in it, all of the conferences and travel we do are in it. And it just becomes, it does become overwhelming. And I recently have tried to start stepping back at times, like I'll take breaks from Twitter. We scaled back the ETHUB podcast a little bit. I mean, I recently had a baby girl too, so that's obviously taken over life priorities. But I do think it's such an interesting thing. And it's a bit, it's healthy, it's very healthy to work in something you're very passionate about. I'm very thankful for that. And like, not many people can say that. But I do think there's an unhealthy element to not being able to disconnect.

• 55:54Speaker 01

  And it's the 24/7 nature of things, people across the world, the price is always trading, everything's always on. I think it'll hit us all a little bit. It has me, but I would just suggest stepping back, taking a break, go to Hawaii for a couple of weeks if you can, do something like that and leave your phone at home.

• 56:12David Hoffman?

  Yeah, that, I remember as soon as like, towards the end of 2020, or no, at the beginning of 2020, right after the March crash and things like really accelerated right after the March crash, like started like April, April and May, you kind of got the tremors of like DeFi, DeFi summer. And like, DeFi summer was such a Just like whiplash of, you know, the 2018, 2019, early 2020 bear market was like, it was just like, people really got to know each other. I got to know you. I got to know Anthony. I got to know like DC. Uh, and it was just like a very calm, peaceful environment. Like, we're just like, taking this one, the one news event of like the month, which is like this Uniswap thing, and we're all like parsing it apart

• 56:55David Hoffman?

  together collectively on Twitter. Like, the only crypto Twitter conversation was Uniswap for like three weeks, because we all invented this crazy new paradigm that solves all this ether delta thing. And then like, we get smacked by DeFi summer, like 2020, and like a bull market and a bunch of new entrants. And all of a sudden, just like, we were all so hungry for like crypto innovation and crypto content and crypto stuff, that like, we forgot to learn how to like tune things out. And so then, and then DeFi summer comes, and like, all of the things that we were longing for in like 2019 and 2020, all came and hit us all at once. And so we're all like, primed to consume literally everything. And, and the, where like, you know, things could, Ethereum could only saturate your life

• 57:40David Hoffman?

  like, you know, five to eight hours a day. All of a sudden it goes to like, well, you could actually spend like all 24 hours a day, like consuming Ethereum stuff.

• 57:47Speaker 01

  Totally. I mean, it's, it's funny, right? Like, I don't work a traditional nine to five job anymore. I, I kind of do my own investing and startups, kind of like angel investing. But I, so people are like, oh, so you don't work? And I just kind of laugh. Like, yeah, I do still, like, I still work. Like, I'm managing yield farms. I'm trying to find new investment opportunities. I'm doing the podcast. I'm trying to keep up with the news, Twitter, Discord, like, that's still a job, but it's almost like a new paradigm job, right? Like, in this Ethereum space, we found so many different ways to like, make money and connect with people. Um, that like, you don't feel like you're really working, but you still are working, right? Like, I'm not just sitting on a lounge chair

• 58:26Speaker 01

  all day, like, in the sun. Uh, but yeah, it's, long-term, it'll be interesting to watch, like, how people do get burnt out and the response to that. Because it's still hard to step away, because you feel like you're missing something, right? Like, oh, man. And so, I had finally gotten a point like around when my daughter was born where like my farms were on auto control. Like I wasn't really like moving funds around and chasing yields and like price had kind of calmed down a little bit. And then all of a sudden, NFTs blew up and I'm like, are you fucking kidding me?

• 59:00Speaker 01

  Now I have to spend, you know, more time tracking NFTs and I don't want to miss out on some opportunities here and I want to.

• 59:05David Hoffman?

  Did you feel obligated for some reason? Like, oh, NFTs are a thing. Like now I do this. This is what I do now.

• 59:12Speaker 01

  I did. I felt obligated and part of it's because like what I told you earlier, like I, I feel like if I missed out on something that I end up liking and it had a big price appreciation, I'm just going to hate myself. So I had to dive in and like, understand like all these drops and the generative art stuff. And like I, I've been a crypto punk guy since day one. I was on there claiming, um, when they were going out for free. But that's kind of been the only NFT. I didn't go down like the crypto kiddies thing and I've kind of just held my punks and you know, not done much with them. But I had to like reteach myself this. And now it's like, okay, I just added more work to my job. Now it's Ethereum, DeFi and NFTs.

• 59:49David Hoffman?

  Right. Yeah. And it kind of seems like there's just like always something like on the horizon. Right?

• 59:54Speaker 01

  Right.

• 59:54David Hoffman?

  Like when you've, when you've stepped back, like if, from the perspective of like stepping back from Ethereum as like a skill, like what advice do you have?

• 1:00:04Speaker 01

  Yeah. So, okay, this is one of the more interesting things I've personally run into lately is, you know, a decent amount of us, I guess we could say have made it or will make it with our investments. And whether it's DeFi, NFTs or whatever, and like we work in this space that we might get burnt out on. What I, what I kind of struggle with is when I step back, I've become so enamored and so into Ethereum, the space, like I'm not really sure what to do. Like I always have to be working towards something, right? So, you know, I like to golf, I have hobbies outside, but like I can't fully leave the Ethereum space. So like, what I would say for, it's almost like trying to quit something cold turkey, right?

• 1:00:44Speaker 01

  Whether it's like drinking or smoking or like eating something bad. Um, what I've realized is don't just give it all up at once, right? Like, keep your favorite. Discord server, give up Twitter and step away from everything else. Because honestly, you kind of feel a little bit lost, which is weird for me to say. Like, it sounds strange, but you all of a sudden, you're like, wait, what am I waking up for? What am I like trying to accomplish? And that's like, honestly, why I had to go down the NFT hole. It's like, I wanted something new to bite on. Like, I feel like I had kind of accomplished the east side and the DeFi side. And now, like, what's next? So I think that's why it keeps bringing people back to that, to be honest.

• 1:01:22David Hoffman?

  It reminds me of the metaphor of like, carrying the, the, I don't know what, the, the ring from Lord of the Rings. Like Frodo carrying the ring around his neck. It's like, he carried it for too long and like, now he can't get rid of it. Like, it's not on his body anymore, but like, it's still burned into his soul. Like, you, once, once you like, consume enough of Ethereum, like, you can think of it as a drug. Like, you actually can't like, leave. Like, it's, it's got you and it, and it's, and it traps you. And then, and, and that, like Ethereum was like my, I, I haven't talked about this too much, but like, before I got into Ethereum,

• 1:01:58David Hoffman?

  before I got into crypto, I got broken up with, with a girl that I thought I was going to marry. And Ethereum like filled that void for me. It's like, oh, I like, this is super fucking entertaining. I can like, forget about like, like, just like, being really bummed about life. And I can, I can like, just think about Ethereum all the time. And like, you know, four years later, I'm like, okay, like, no, you can't marry Ethereum, David. Like, you need to like, step back. And like, and that's why I like, straight up moved to San Diego. Like, I needed to like, step myself out of like, Seattle and, and just where I was like, raised and had to put myself into like, a new environment. And, and like, if, if you're like, there's this thing called like, state-dependent learning.

• 1:02:41David Hoffman?

  If you, like, I haven't like, lived in San Diego before, so it's like, trying to welcome myself like, into a new life and give myself like, permission to like, stop having so much like Ethereum brain.

• 1:02:51Speaker 01

  Totally. Yeah, no, I mean, I moved too, which is funny. Like, I feel like a lot of people moved and that was a way to like, kind of get out and escape a little bit. But, I mean, The whole like marrying Ethereum thing is a funny metaphor if you think about it like I I also think like why some of us have such a hard time stepping away is we kind of like think of Ethereum as our baby a little bit, right? Like you mentioned that starting ETHUB, like, why did we start ETHUB? Well, because Bitcoin Maximus were spreading fun narratives and smacking ETH down all the time and we needed to fight for it, right? And now Ethereum is like grown up and come out of that and has its own narratives and those things don't matter anymore. But a lot of us have helped shape where Ethereum is today, right? Like even down to 1559, right?

• 1:03:35Speaker 01

  Like, I co-author, you were really involved in like helping people understand it. Like, these are big things that shaped the future of Ethereum. And it's hard to like, just like, no one wants to abandon their baby, right? So like, it's hard to fully step away. And I don't think I would ever fully step away. I think it's just going to be too impossible. But it's kind of like, like, where do we go after this stage of Ethereum where it grows up? Like, what is our next role, right? What does that look like? Because there's always going to be like younger, more eager people coming up that want to do, I mean, you're doing five podcasts a week or whatever, like, that's probably not gonna, you're gonna get burnt out eventually, right? But like, I feel like we're all gonna always be in the space and just kind of do different things.

• 1:04:17David Hoffman?

  Yeah. And like you said, the space is splitting into like the NFT cohort, the DeFi cohort, and there's going to be more cohorts into the future. And like, keeping up with all of them is going to be absolutely insane. But maybe there's just like, the people kind of come into Ethereum at their own specific like generation. So there's just going to be like generational cohorts of Ethereum that all kind of like go through their own, just like, you know, the learning journey of crypto and then like finding their place in Ethereum. That's right for them.

• 1:04:45Speaker 01

  Yeah, I mean, that's one of the biggest transformations I've seen too. Like, early Ethereum, it was only a space for devs, right? And like, no one wanted to see like speculators or traders. Like, the Ethereum Reddit literally doesn't allow price talks still to this day. And you felt like you didn't have a place. It's crazy how much that's changed, right? It's a place for anybody now. Like, you don't need a finance background, you don't need a trading background, you don't need a coding background. You know, this was Even still a problem, I would say back in early 18 even there was like this pretentiousness of oh, if you're not a dev, you don't have a spot in the space and man, has that changed fast.

• 1:05:19David Hoffman?

  Right. God, that that was going through my brain like endlessly in 2017. It's like, oh, this crypto stuff is super cool. I guess I'm just gonna watch it grow in front of my eyes for the rest of my life because I won't be able to actually like do anything because I don't know how to code.

• 1:05:32Speaker 01

  Yeah, no, it's crazy how much that's changed, right?

• 1:05:34David Hoffman?

  Absolutely. How's it? How's uh, since you've practiced stepping back from Ethereum, how's your golf game gone?

• 1:05:41Speaker 01

  Well, not great because it's not very easy to golf with a baby. Uh, I'm hoping to get out here soon. It's been solid, but it's not where I want it to be. Let's put it that way. Yeah. And before I play with you, I need to get a lot better so I can kick your ass.

• 1:05:57David Hoffman?

  Oh, I am not good at golf at all. I'm very much one of those people where like I hate putting first off, but like, I know that if I stop or if I start giving it, giving a fuck about golf, then like I'm actually getting like a start and go out and practice. I've never practiced golf. I only play. I never practice, only play.

• 1:06:15Speaker 01

  Which is a tough sport to do that. Yeah. What's funny is like, I feel like golf's a great sport for people into Ethereum. Like, I feel like if you're looking for a hobby or something new and you haven't tried golfing and you're super into Ethereum, try golf. Because just like Ethereum, you can never perfect it and there's always something new to learn, be frustrated by, get happy about. Like, there's a lot of similarities. So we need an Ethereum golf outing.

• 1:06:39David Hoffman?

  Ethereum golf, golf retreat. Oh, God. So, uh, how's your Porsche?

• 1:06:50Speaker 01

  That's nice. Yeah. Yeah. It fits golf clubs, which is good.

• 1:06:53David Hoffman?

  Is that? Yeah. Basically all you needed to?

• 1:06:58David Hoffman?

  I got, just recently got a Polestar, which is not a Porsche, but it's definitely an electric car that goes really, really fast. And like, I keep having to remind myself that like, okay, just because you have a really fast electric car, doesn't mean you get to go like 100 miles an hour down that like the San Diego highway.

• 1:07:13Speaker 01

  It's dangerous. The fast electric cars, man, you're going like 100 and you don't realize it. It's crazy.

• 1:07:20Speaker 01

  One electric car. I'm never going back. I don't think like it's just it's too great. The experience is awesome. Just be able to plug it in like I know where the environmental impact right now is we have the production and all that. So it's a bit minimal, but I do feel better about myself driving it around. That's for sure.

• 1:07:37David Hoffman?

  Yeah, no, like sometimes like there's been times where I have friends all the way up in LA and like a little bit, maybe in like South Anaheim or Orange or something. And just like if I ever want to go out there, like I actually don't have like the weight of like consuming gas to go do that. It's like, oh yeah, this is it's a lot more casual. Now I don't have to fill up my gas tank with gasoline. Like, oh, just plug it in later. Yeah.

• 1:07:58Speaker 01

  Yeah, I feel like we're finally seeing the electric car revolution happen. I feel like a lot like we're getting nice looking electric cars now, which I never knew like before why they made them look so horrible. But I think we're finally there.

• 1:08:11David Hoffman?

  The Porsche Taycan is like one of the best looking cars. I think that's out there.

• 1:08:15Speaker 01

  Nice car. They finally realized like, let's not make this look like electric car. Let's just make it look like a Porsche. Like, I don't know why these car companies didn't do that.

• 1:08:22David Hoffman?

  I I test drove that car a few a few months ago and you told me to do the like the stomp on the brake and then hit the gas and do the launch. Oh, my God, man, like that it just puts your stomach into like a different dimension.

• 1:08:36Speaker 01

  It feels like, you know, those roller coasters that launch you like zero to sixty or whatever. It feels exactly like that.

• 1:08:42David Hoffman?

  Right. Yeah. And there was and I was being an absolute idiot on the test drive, definitely going over a hundred and coming coming up behind a guy and a guy like turned on like didn't turn on his blinkers and came into my lane. So I had to swerve and the handle I swerved at like a hundred plus miles an hour and the handling on that thing, just like it cradled it. It cradled the swerve and just put me exactly where I needed to go. I feel like if I did that on any like normal car, I would have just like spun out and died.

• 1:09:08Speaker 01

  Right, exactly. Yeah. If you haven't drove the Porsche Taycan, go test drive it. Porsche is going to see a spike of a bunch of test drives next week now that we're talking about this.

• 1:09:19David Hoffman?

  No, I absolutely recommend it. No, it's been fun. Have you seen what a Polestar looks like?

• 1:09:26Speaker 01

  I looked it up the other day. Yeah, it's nice. Yeah. So what's the deal? Are they like in they're easy to get in production? You already got it?

• 1:09:34David Hoffman?

  Yeah. Yeah. So like I was going back and forth between a Polestar and a Tesla. Just like the more affordable versions of an electric car. I didn't I I couldn't get myself to dish out the cost of a cost of a Taycan.

• 1:09:46Speaker 01

  It's like one JPEG, man.

• 1:09:50David Hoffman?

  Depending on the JPEG. But Tesla is you can't get a Tesla like they're all you can't get one until 2022. And also Polestar is a derivative off of Volvo. Like they used to Polestar used to be Volvo, like Skunk Works, like they're like performance division. And then they just spun out, made the Polestar one, which is like the supreme luxury car for like 150,000. It's a hybrid gasoline electric car. And then they made the Polestar two, which was like the affordable affordable version. But like, since it's like, for some reason, Volvos have always been in my family. My dad and his dad had matching 1972 Volvos, which which he still has. And then my

• 1:10:33David Hoffman?

  first car out of college was a Volvo. So then I decided like, oh, Polestar, close enough.

• 1:10:37Speaker 01

  Some tie to it. Right. Yeah, exactly. That's funny.

• 1:10:41David Hoffman?

  So Eric, since as a host of a podcast, usually sometimes hosts don't get to say everything that they get to say, because they're always talking to guests. Is there any subject matter that you've never been able to talk about? You've always wanted to curious like to have the floor on?

• 1:10:57Speaker 01

  Hmm, that's an interesting one. What haven't I been fully honest about?

• 1:11:06Speaker 01

  You know, I've talked about this a little bit, I guess. This is still Ethereum related, of course, but I've been a little bit disappointed in the governance tokens and like where we haven't evolved like at all. So when governance tokens came out, the pitch was, hey, you can have a, you know, if you own this, you'll probably own a portion of our protocol fee going forward, right? And like when I've had guests on, I've brought this up a little bit, but I'm not like the the response for most DeFi founders is, oh, That's in the token holders hands, right? Like, I love Robert Leschner, but like, if you listen to my episode with him, like, the entire time, oh, comp token holders, oh, which makes sense, right?

• 1:11:47Speaker 01

  For legal reasons and all this. But I'm a little disappointed in the advancement of that. Like, I think sushi is kind of one of the only protocols that's doing any revenue take to token holders. And I really wish that we would come further than just pure speculation for the value on these things. So I think decentralized government, Vitalik put out a good piece about token voting the other day. I think we're kind of just like shooing some of these problems under the rug. We saw like a weird uni swap vote happen the other day where some team tried to get like 25 million. It took like the last second for like a Twitter outrage to happen for it to get shut down.

• 1:12:20David Hoffman?

  Did that actually end up? Because when I, last I looked at it, it actually had more yes votes and no votes after it got flipped with more no votes after people like realized what was going on. Did that?

• 1:12:30Speaker 01

  I haven't tracked it today. I haven't tracked it today. So that could be the case. There are all kinds of weird things, like the UI was broken, like no votes were going to yes votes and stuff. It was a mess. But I'm a little disappointed in the progress of governance tokens. Now, I will say, most of this stuff and fixing and innovation happens in bear markets. I think people are just distracted right now. But man, we're missing like such a good long-term value narrative for GFi tokens if they're actually paying a part of the protocol revenue to token holders, right? That kind of gives a nice little like feedback loop. So if I had to pick a topic where I think people in that ecosystem are kind of like ignoring or not paying enough attention to, I think it would be that.

• 1:13:15David Hoffman?

  So yeah, that vote did end with the grants, grant getting approved.

• 1:13:21Speaker 01

  Yeah.

• 1:13:21David Hoffman?

  Was that today? Earlier today. Yeah.

• 1:13:24Speaker 01

  Interesting.

• 1:13:25David Hoffman?

  So that's kind of interesting. The, I have said that, like, it would be nice to not just emulate like the greater fool's valuation of like the traditional stock market is like, oh, we got the uni token, get the comp token and like, oh, governance, like, buy the token. But actually like morph that into actual like analysis of, analysis of on-chain cash flows.

• 1:13:46Speaker 01

  Yeah.

• 1:13:46David Hoffman?

  But one thing in like, there are certain paradigms that Ethereum completely breaks and renews. And then there are certain other paradigms that like, it absolutely doesn't, right? And like, well, if you start to spend cash flows, then like, you actually like, you can't spend them on like, development and, and you know, innovation into the protocol, right? So like, maybe it is actually like, too soon. There, there, I do think there is room for that to be like a paradigm that Ethereum doesn't actually fix.

• 1:14:13Speaker 01

  Yeah, yeah, like where this goes, like how it relates to additional valuation is still to be known. And there's going to be like, a lot of tweaking of this, right? And I think even like, we could go way further where it's like, incentivize people more to not just farm and dump the token, like if you hold it longer, you get some kind of incentive. There's all kinds of things.

• 1:14:30David Hoffman?

  Isn't that just a greater fools, like Ponzi game thing too? Cause that just turns into a Ponzi game.

• 1:14:34Speaker 01

  Yeah, kind of. I mean, this is leading to the ultimate conversation, right? Where I haven't brought up too much on the podcast, but what's like the end game for DeFi? Once incentives run out, right? Like, what, what do yields start to look like? Do users just drop off? You know, everyone in, in the space touts these super high yields, but the reality is they're not long-term sustainable, right? Like the token, so there's two aspects to a lot of these yield farms, right? Or these DeFi protocols. There's the, the core rate, which say like on an Avair compound, that rate is driven if you're lending, that's driven by borrowing demand, right? So there's a huge spike in borrowing demand for USDC, your interest rate's going to go up. Now that can be muted down if more deposits come in to the lending side.

• 1:15:19Speaker 01

  And then the second part is a lot of protocols are giving away their own token. Now, they're probably not going to give away their token forever, although I would debate that like, the supply cap meme isn't really necessary for DeFi protocols. So we might see that lifted and kept. But once, say the subsidy of the coin, like in Comp's case, you're giving away a comp on top of the interest rate, once that dries up and you get a lot of cash that starts to come into DeFi over time, because it becomes easier, if rates start to settle down to like, traditional finance levels, what, like, what's the strong narrative for DeFi at that point beyond just trustless, holding up your own wealth or your own money or whatever, right? So I'm curious to see how that shakes out.

• 1:16:01David Hoffman?

  I mean, if we do settle down to like traditional finance levels, like to some degree that might just signal that like A, it got actually adopted. Or B, people might actually feel more secure about like entering into that market and like keep keeping that because like aside from how like magical and wonderful and fantastic and efficient DeFi is like, there's plenty of other reasons to adopt Ethereum infrastructure. Rather than your, your traditional banking infrastructure.

• 1:16:25Speaker 01

  Totally. Yeah, I think that's where we will go. Um, but I don't know if people realize that these rates are gonna eventually get arbed down to traditional rates, right? There's nothing really magical. The magic right now is it's it's harder to get into Ethereum. So the rates are higher and there's more speculation happening. But the second, you know, large funds, hedge funds, banks can put in their deposits, those rates are going to get crushed down and they're going to be pretty equal to traditional world. So I think people should expect that going forward. We're starting to see it a little bit like last year comp, you could earn eight to 10% pretty easily. These days it's more like three, um, just on the core rate, not the comp subsidy on top, but yeah.

• 1:17:04David Hoffman?

  Right. But DeFi has also been like pretty quiet, right? Like as soon as like trading activity picks up, like yields, yields pick up. Like, yeah, my, my gut is that rates will always be at least marginally higher than traditional rates. On their floor at the very least.

• 1:17:19Speaker 01

  Yeah, agreed. There will be a spread for sure. Um, yeah, that'd be interesting.

• 1:17:24David Hoffman?

  And plus, if like, if these things do get arbed down, they're just, the market itself is going to be like insanely liquid. And also if, if like a bunch of like traditional money comes in to arb that down, it's going to be really bullish for Ether.

• 1:17:37Speaker 01

  Yeah, totally. Yeah. And what's interesting is I, I don't put anything in, um, DeFi that's not insured through Nexus Mutual. So it becomes interesting for me when rates, so it costs like 2.4% or whatever to insure on most protocol, most safe protocols through Nexus. If rates start creeping down towards that becomes a net negative for me, right? Yield wise. So I think the whole insurance thing needs to be figured out a little bit better long-term as well. And I know there's a lot of teams working on, of course, Nexus too. But more streamlined, like the ideas of I'm only insured when I'm actually in the protocol, um, and rates need to get a little bit more competitive there.

• 1:18:16David Hoffman?

  So do you micromanage that insurance or like if things like go negative, do you just like, ah, I'm just gonna like not bother and like two days later it'll be positive again?

• 1:18:24Speaker 01

  Yeah, I do. I do manage it. It kind of sucks, right? Like, they do like 30, 90, or 180 days. I always do 30 because if like the rates were to tank or whatever, I don't want to be net negative for longer. But yeah, then you got to like in your calendar, remember when your compound cover is expiring and you got to go re-up it. And like, sometimes I'll-

• 1:18:43David Hoffman?

  There's the work you're talking about.

• 1:18:45Speaker 01

  Yeah, exactly. Right? It's a full-time job. I know there's been, what was it, like Armor? Like Armor Fire, someone was doing where like you would only be covered if you were in the protocol. Like, so if you took your funds out and then that cuts down your costs too. There's a lot of tweaks and improvements. I would like to see where protocols offer an insurance native option, right? So like, this stuff's baked in to say Ave, and it's like, do you want an insured deposit? You get 2% less, or do you not? That would be so much easier.

• 1:19:13David Hoffman?

  Yeah, that that seems to be like the logical conclusion of where that would go.

• 1:19:17Speaker 01

  Yeah, yeah, I think it has to.

• 1:19:19David Hoffman?

  All right, Eric. Well, I think we could wrap it up there.

• 1:19:22Speaker 01

  Cool. Yeah, it's been fun.

• 1:19:23David Hoffman?

  Thanks for coming on Layer Zero and let me pick your brain a little bit.

• 1:19:26Speaker 01

  Yeah, absolutely. I appreciate you inviting me. I like I like this format, so I'll definitely be tuning into others too, because I think it allows a nice flow of conversation.

• 1:19:33David Hoffman?

  After you, I have Justin Drake. So he's your episode number two and he's episode number three. Dmitry Buderin is episode number one and he comes out. We're recording this on Friday. He comes out on Tuesday. Listeners will be hearing this a week from Tuesday.

• 1:19:48Speaker 01

  Awesome. Sounds good.

• 1:19:49David Hoffman?

  Thanks, man. Thanks. Good conversation. Cheers.

• 1:19:52Speaker 01

  Bye.

• 1:19:52David Hoffman?

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• 1:20:33David Hoffman?

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