ROLLUP: M2 Money Supply Flipped Bullish | Robinhood Wells Notice | Trump Supports Crypto | Friend.tech Token

Bankless Friday Weekly Rollup Second Week Of May ------ 📣 TRANSPORTER - SECURED BY CHAINLINK CCIP | TRY IT OUT https://www.transporter.io/ ------ Bankless Premium | Use Code "FEED10" https://bankless.cc/FEED10 ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2 🔗CELO | CEL2 COMING SOON https://bankless.cc/Celo ⚖️ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle 🏠 CASA | SECURE YOUR GENERATIONAL WEALTH https://bankless.cc/Casa 🗣️TOKU | CRYPTO EMPLOYMENT SOLUTION https://bankless.cc/toku 🌐 CARTESI | APPLY FOR A GRANT https://bankless.cc/CartesiGovernance ------ TIMESTAMPS & RESOURCES 00:00 Intro 01:28 Markets https://pro.kraken.com/app/trade/btc-usd https://pro.kraken.com/app/trade/eth-usd https://www.coingecko.com/en/global-charts 03:40 M2 Money Supply https://twitter.com/thomas_fahrer/status/1786196603931644086 08:18 GBTC Inflows https://x.com/JSeyff/status/1787506564267393037 https://twitter.com/JSeyff/status/1787610459413102688 09:49 Stablecoin Mkt Supply https://twitter.com/alpha_pls/status/1787405833279545393 10:55 Bullish for Solana https://twitter.com/smyyguy/status/1787892675145781611 18:43 Robinhood Wells Notice https://newsroom.aboutrobinhood.com/robinhood-response-to-receipt-of-wells-notice-from-the-u-s-securities-and-exchange-commission/ https://x.com/vladtenev/status/1787595555981668751 https://twitter.com/BSCNews/status/1787811373361107092 22:32 Gary's Take https://x.com/RyanSAdams/status/1788313202024915178 28:27 Biden Administration Against Crypto https://twitter.com/BitcoinMagazine/status/1788274505753755836 https://twitter.com/jchervinsky/status/1788281811086221646?s=46&t=2ZINVXJQKx6xO_6Wiiu_2g https://twitter.com/jchervinsky/status/1788281811086221646?s=46&t=2ZINVXJQKx6xO_6Wiiu_2g https://x.com/RyanSAdams/status/1788289854574322049 34:09 Trump Response https://twitter.com/frankdegods/status/1788359051031761269?s=46&t=2ZINVXJQKx6xO_6Wiiu_2g https://twitter.com/frankdegods/status/1788359051031761269?s=46&t=2ZINVXJQKx6xO_6Wiiu_2g 42:16 FTX Creditors Make 118%? https://www.bloomberg.com/news/articles/2024-05-07/ftx-has-billions-more-than-needed-to-repay-bankruptcy-victims?cmpid=BBD050824_MONEYSTUFF&utm_medium=email&utm_source=newsletter&utm_term=240508&utm_campaign=moneystuff https://www.bloomberg.com/news/articles/2024-05-07/ftx-has-billions-more-than-needed-to-repay-bankruptcy-victims?cmpid=BBD050824_MONEYSTUFF&utm_medium=email&utm_source=newsletter&utm_term=240508&utm_campaign=moneystuff 44:42 Friend. Tech Token https://x.com/friendtech/status/1786573081240297926 47:06 Eigen Stakedrop Update https://twitter.com/TrustlessState/status/1786172333717066237 https://x.com/BanklessApp/status/1786055564629348383 48:28 $MODE Token https://x.com/modenetwork/status/1786115439212294386 49:43 Optimism L3 https://optimism.mirror.xyz/6idqs2nEDLdezbSynrYsakliSCm3VyzA3WWj6esBbbM 51:29 BOB Bitcoin Chain https://twitter.com/build_on_bob/status/1785601054966771970 52:10 Autonomous Worlds https://twitter.com/redstonexyz/status/1785715921014960188 54:48 Nigeria Banning P2P Crypto Trade https://www.bloomberg.com/news/articles/2024-05-07/nigeria-to-ban-person-to-person-crypto-trade-in-battered-naira 57:05 Revolut X https://www.revolut.com/blog/post/revolut-x-launch/ 57:59 Meme of The Week https://x.com/jonwu_/status/1787512817303629962 ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures⁠

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

• 0:03Ryan Sean Adams?

  Bankless Nation, it's the second week of May. David, it is weekly roll-up time. You ready for this?

• 0:08David Hoffman?

  I'm absolutely ready for this. And we're gonna go super fast this week because that's kind of the week that it is. First up, Gary sends his fifth Wells notice this week. Who got the nasty gram this week? It's not a crypto company, so the crypto army is growing by one. Biden, Joe Biden, says he will veto extremely important crypto legislation right before election season, and Trump has a thought on that. Bold strategy coming out of the Biden administration. And also, we got a number of signals to say that the bull market is not over. We have some tides that are turning in the bullish favor, so we'll talk about that. And also, Friend Tech launched their token, Mode Network launched their token. A roll-up spans between Bitcoin and Ethereum. Got a bunch of new network launches this week, and we're gonna get to all of these details and more. But first, before we get

• 0:53David Hoffman?

  into prices, gotta talk about our friends and sponsors over at Transporter, a brand-new bridging app called Transporter, using Chainlink's CCIP in the background to help you securely transfer your assets, ETH link USCC between all of the different chains, of which there are three more this week. So you can try out transporter.io, link in the show notes, if you want to securely transfer and track tokens across all of your blockchains.

• 1:18Ryan Sean Adams?

  This is like Jason Statham, taking your assets from one chain and putting them on another chain.

• 1:23David Hoffman?

  That's such a niche reference.

• 1:25Ryan Sean Adams?

  That's how cool this is. Someone out there got it. All right, let's get to the prices. Thanks to Kraken for providing these glorious charts, the beautiful charts, but the direction is unfortunately a bit... Wait, are we up or down on the week?

• 1:38David Hoffman?

  Bitcoin's up on the week. Bitcoin is up 5.3% on the week.

• 1:41Ryan Sean Adams?

  See, I don't feel happier this week, David. It doesn't feel like it should be up.

• 1:45David Hoffman?

  Hang on, we haven't got to ETH yet. We haven't got to ETH yet. Bitcoin started the week at $59,000. It is currently at $61.5,000, up 5.3% at the week. ETH price, basically flat. Started the week $2,950. We are ending the week right below $3,000, up half a percent. Counts as flat. And of course, the total crypto market cap, $2.39 trillion, under $2.4 trillion.

• 2:10Ryan Sean Adams?

  Would you say this is still feeling doldrums-y? Like, it feels like it's kind of, you know?

• 2:15David Hoffman?

  Yeah.

• 2:15Ryan Sean Adams?

  There's some malaise on the market right now.

• 2:17David Hoffman?

  Six weeks of just like not exciting, down flat-ish.

• 2:21Ryan Sean Adams?

  So while this general malaise is going on, the Layer 2 projects continue to build. And thanks to Mantle for this Layer 2 update today. David, you know there's now 95 projects on L2 Beat?

• 2:33David Hoffman?

  And that's just the ones that we know about.

• 2:34Ryan Sean Adams?

  95 different Layer 2s. And you're absolutely right. That's just the ones that we know about. This is Chow saying, in other words, there are probably at least several hundreds, possibly thousands of Layer 2s right now. And I think there's a big question for crypto is, is this just like an infrastructure boom? Like, how sustainable are all of these Layer 2s? I know you and I have always taken the vantage point that, like, they answer the question of, how many Layer 2s will there be? It's sort of similar to trying to answer the question, how many websites will there be?

• 3:04David Hoffman?

  How many blogs will there be? Yeah.

• 3:06Ryan Sean Adams?

  Yeah, exactly. As many as the market finds like useful and deems fit. What's your take on these numbers here? Do you think this is sustainable?

• 3:14David Hoffman?

  Well, in the short term, no. In the long term, yes. And I think there's going to be a theme, especially when we get to the announcement section of this roll-up, is like, well, we are getting more roll-ups this week, but we're also getting more specialized roll-ups. And so, one of the reasons why there will be like N number of roll-ups is because they are learning to become extremely niche and extremely specific and finding different corners of the internet in which like a roll-up is actually useful and justified. So yeah, we'll talk about that.

• 3:40Ryan Sean Adams?

  Let's talk more about the markets again and see how long these doldrums will last. Because there's actually, David, some bullish signs on the horizon. You called it in the intro, the tide is beginning to change. So a few things that are different that we should emphasize this week. Number one, I don't know if you saw this chart. This is Thomas.

• 3:56David Hoffman?

  I love this chart.

• 3:57Ryan Sean Adams?

  M2 money supply has flipped positive. Here it is. What are we looking at? And can you describe this for like Bankless listeners and viewers on YouTube? What we're looking at and what M2 is actually measuring?

• 4:10David Hoffman?

  So we are looking at a chart from 2019 up until this very moment right now of the percentage growth of M2 money supply. So when there is a tiny blue bar that's above the line, that means we are growing by a percentage. And then if it's below the line, it actually means that M2 supply is decreasing. M2 money supply is called broad money supply. So like if you pull out your wallet and you have like a $1 bill, that is M0. M2 is after all of the 10 to 1 fractional reserve of the commercial banking sector. It's after all of like private money has been created. And so it's a very broad measure of circulating money. And it's generally why it's important.

• 4:53David Hoffman?

  It's generally the underlying common denominator that frequently prices capital assets.

• 4:59Ryan Sean Adams?

  Yeah, it's like, you know that meme where you see drone power and the money printer?

• 5:02David Hoffman?

  Yeah.

• 5:03Ryan Sean Adams?

  That's what M2 basically is.

• 5:04David Hoffman?

  Well, when drone power on the money printer prints $1, that turns into like $10 in M2. And so it's like leveraged just because of like the leverage of the commercial banking system. M2 is like where people get the money in their accounts to go buy assets. That M2 money supply flipped negative at the end of 2022 because of the Federal Reserve hiking interest rates and all the capital destruction in both like Bitcoin, crypto, stock market. All the capital assets went down, right? Houses, stocks being sold.

• 5:36Ryan Sean Adams?

  For people who can't see, before that, it was mega.

• 5:38David Hoffman?

  It was big. It was extremely big. It was very, very big. So like M2 money supply was growing 25% like on a, for a year, which is large, which is very, very large. And so M2 money supply was getting smaller basically throughout 2023 and into 2024. In the last week, M2 money supply flipped positive as in M2 supply of money out there is growing for the first time in like a year and a half, 18 months. And Bitcoin generally, crypto assets generally are like debasement hedges and M2, the growth of M2 money supply is basically the thing that props up, especially the long tail of assets out there, which is definitely what crypto is.

• 6:24Ryan Sean Adams?

  So for the first time in a couple of years, M2 has flipped positive. The money printer is on. You remember that take I was telling you from Arthur Hayes, I think a couple of rollups ago where he was. It's just basically like April's a wash. I'm gonna sell like it's just like um we're going down in April and he called this like at the end of March and beginning of April. He has now flipped bullish.

• 6:45David Hoffman?

  Oh, great.

• 6:45Ryan Sean Adams?

  It's like one month later.

• 6:47David Hoffman?

  It's May now.

• 6:47Ryan Sean Adams?

  And this part of the reason why is he says this, make no mistake by reducing the rate of quantitative tightening from $95 billion to 60 billion per month. That's a thing that happened, by the way, they've reduced quantitative tightening tightening. The Fed is essentially adding $35 billion per month of dollar liquidity. Okay, so quantitative tightening tightening has eased. And in other words, this is quantitative easing, money supply expansion by another word. And this is part of the reason that Arthur has flipped bullish. He's not saying it'll happen overnight, but he's basically saying we're back to more liquidity, back to money printing, back to like how things were trending in 2020. Of course, we're probably not going to see a COVID level stimulus.

• 7:32Ryan Sean Adams?

  But that for Arthur makes him very bullish on on the crypto asset class.

• 7:37David Hoffman?

  If you look at the total supply of M2 money out there, not just the change in direction of its growth, M2 money supply grew just absolutely massively post-COVID. That's like really what the the effect of COVID was, was a massive growth in M2. And then we jacked up interest rates and all that money went into money market funds. But if you look like the supply of M2 money didn't go away, there's still a ton of M2 money out there. There's just not in the long tail. As as M2 money is growing now and people going on risk on like all of that money that's still print, we still printed a bunch of money, it's still out there. Now it's giving like more and more permission to go out on the long tail. So that's like the first changing of the tides.

• 8:15David Hoffman?

  Second, pretty unrelated to M2 money, but Grayscale GBTC saw its first ever inflows last Friday. And so the actual amount of Bitcoins in the Grayscale GBTC ETF went up. Which is crazy because like there's so much already Bitcoin in there. The fees are super high. Why people, what people are still trying to figure out why there's more Bitcoin in grayscale than typically what would be expected. People are learning like, why are people buying grayscale over anything else? Still haven't found that answer. The crazy thing is, it also went up on Monday as well. So grayscale had two days in a row of inflows into the grayscale GBTC ETF.

• 8:58Ryan Sean Adams?

  So I kind of want to ask the question, though. What about just global Bitcoin ETF inflows, right? So like, I don't know if we can really explain why grayscale had an up week, but are we getting an up week on just global Bitcoin ETFs?

• 9:10David Hoffman?

  Last week, we definitely had net outflows, kind of like one of the biggest net outflows. This week, we have pretty strong net inflows. Kind of hard to measure it, but looking like maybe 50 to 100 million dollars a day of net inflows into the Bitcoin ETFs. Last week, there was a very large net outflow of 570 million. So the average day this week has been like 100 to 200 million dollars of net inflows. So this week, net inflows. Last week, net outflows. The week before that, net outflows. The week before that, net outflows. And then before that, it was all inflows. So yes, this week, there has been a turning of the tide of net inflows into the Bitcoin ETFs.

• 9:49Ryan Sean Adams?

  The last tide turning, I think we want to talk about is stablecoin market supply is going up. And this is something that Jim Bianco, it's like one of his theses he turned you and I on to, which is basically, we're not going to get a bullish crypto market until you start to see stablecoin market cap and stablecoin supply going up, because that's a representation of how much liquidity there is flowing from the fiat system into crypto. And sure enough, the market cap of stablecoins was down, down, down during the bear market. And now it is starting a trajectory, an ascent up.

• 10:23David Hoffman?

  With the in-striking distance of all-time highs of stablecoin supply.

• 10:26Ryan Sean Adams?

  Yes. Here's the tweet around this. This is exactly what you want to see, and it's a very important metric to monitor. As long as we continue to see stablecoin inflows, our coins will go up. The stablecoin market cap has grown by 30 billion year-to-date, and is now about About 19 billion away from last cycle's peak. So this is another bullish indicator. Don't sleep on this one. This is a nice gradual kind of ascent that you'd expect to see. And as long as that number is going up, I think the crypto bull market is still on.

• 10:55David Hoffman?

  More changing tides here, but this was more specifically for Solana rather than the entire macro market. This is a tweet out of Dan Smith from Blockworks Research, who's talking about the fees being paid to the Solana Layer 1. And Solana MEV over the last like month or so has actually surpassed Ethereum MEV. Total economic value of transaction fees. Solana is still below Ethereum, but like still putting in like you actually can see it on the chart, which is like that's the first time for Solana. This started, of course, in December of 2023 with the rise of like Solana Summer. But you can definitely starting to see like Solana showing up on the charts with fee supply, fee structures. So the fee market in Solana, very, very strong.

• 11:38David Hoffman?

  This is something that like we were saying like last cycles, like like Solana has to get to the point of having like sustainable fees. And this is, this is what this looks like.

• 11:46Ryan Sean Adams?

  Yeah, I'm not going to lie. This, this number impresses me because something that you and I have said from the very beginning, which I think is true, and we should evaluate more Layer 1 chains. This is blockchains. What do blockchains do? Blockchain sell blocks.

• 11:57David Hoffman?

  Solana selling blocks.

• 11:58Ryan Sean Adams?

  How, how do you know whether someone is purchasing the blocks? You have to look at the fee revenue and the fee revenue comes from two sources, either transaction fee revenue. Right. Or the ordering of the blocks, which is MEV. And so Solana is just not making that much with respect to like fee revenue itself, but is making a ton with respect to ordering of the blocks. And that's actually impressive. I think if they can sustain this moving forward and how long they can sustain this, this is kind of like flipping into a big bullish indicator to me from a fundamentals perspective. A few things that I like would look for next as Solana continues to mature. It's like, one is what's the sustainability of this, right?

• 12:37David Hoffman?

  Fee revenue to issuance ratio, right?

• 12:39Ryan Sean Adams?

  Well, first of all, sustainability, not, not profitability of block space. But I'm just saying like, there's going to be a lot of high throughput blockchains that will compete against this, basically. So you've got your, you know. Monad coming online, you've got the move ecosystem, you've got other layer twos that are going to like,

• 12:56David Hoffman?

  Right.

• 12:56Ryan Sean Adams?

  Maybe try to commoditize this.

• 12:58David Hoffman?

  Corner of crypto, yeah.

• 12:58Ryan Sean Adams?

  Yeah, but then I think secondly, yeah, fee burn, right? Because just like what you want to see is that the fee revenue, the blockchains that you're selling exceeds the cost, which is like issuance. In our world, that's issuance. I know some people disagree with that, but issuance is kind of like a cost if you're not staking in the network. So ideally you have profitable block space and they implement some sort of fee burn that delivers this MEV back to the holders of Sol. It's sort of there to stakers, right? With GTO and that sort of thing, like you can get a portion of this MEV, I believe, but it's not quite as clear how this MEV flows to kind of like the average, ordinary Solana staker or Sol holder.

• 13:44Ryan Sean Adams?

  And then, and then lastly, I actually think MEV can become a problem for networks too, right? If it gets distributed.

• 13:50David Hoffman?

  Unaddressed MEV, yeah.

• 13:51Ryan Sean Adams?

  If it gets distributed to kind of like a.

• 13:54David Hoffman?

  MEV unchecked MEV is a massive centralization force.

• 13:57Ryan Sean Adams?

  It can be, right? And so that's another thing that we'll want to monitor long term, but good signals, I think, for Solana.

• 14:05David Hoffman?

  Yeah, so if I wanted to move the goalposts, MEV to validators, very, very strong in Solana. I would like to see how MEV per transaction or the efficient, because there's an efficiency of MEV, right? Right now, like in Solana, if you just like slap market sell or market buy on a Solana DEX and you have like a very high slippage tolerance. Like, we know that this has been a problem with Solana MEV because people are just like dumping into into a DEX with very high slippage tolerance. And then MEV validators are taking a very large cut. I would like to see some sort of like MEV efficiency because if MEVs are taking pennies over a larger number of transactions, that's good. If they're taking like hundreds of dollars over a low number of transactions, that's bad.

• 14:50Ryan Sean Adams?

  Why is that bad? It's bad for users?

• 14:52David Hoffman?

  Super bad, super bad for users and it's just not sustainable. Like, that just means that's an inefficient market.

• 14:57Ryan Sean Adams?

  I think that's kind of like a leading indicator of what will happen if like users feel like they're getting jacked up over MEV costs, right? And they're being sandwiched, attacked, that sort of thing. Like, my, my theory is they just go to another chain where that doesn't happen, right? As part of the kind of the commoditization type story, which would kind of happen.

• 15:13David Hoffman?

  Have to move there because the users will follow the meme coins.

• 15:17Ryan Sean Adams?

  Yeah, that's true. And that, I think, accounts for a lot of this is Solana has absolutely dominated the meme coin narrative this cycle, which has been super, super hot. All right, David, we got a lot more to cover. What's coming up?

• 15:28David Hoffman?

  Coming up next, Robin Hood receives a Wells notice, but they're not giving up. They're joining the pro crypto army. Biden's got a veto vote for crypto coming, but Trump is taking the opportunity to push back. Crypto is becoming a pretty partisan crypto issue this election cycle. And then Gary is on CNBC talking smack, so we're going to play those videos and comment on them. So you're going to hear all of that and more, but first a moment to talk about some of these fantastic sponsors that make this show possible. If you want a crypto trading experience backed by world-class security and award-winning support teams, then head over to Kraken, one of the longest-standing and most secure crypto platforms in the world. Kraken is on a journey to build a more accessible, inclusive, and fair financial system, making it simple and secure for everyone, everywhere to trade crypto.

• 16:12David Hoffman?

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• 16:55David Hoffman?

  And with Opera MiniPay as one of the fastest-growing Web3 wallets, Cello is seeing a meteoric rise with over 300 million transactions and 1.5 million monthly active addresses. And now Cello is looking to come home to Ethereum as a Layer 2. Optimism, Polygon, Matter Labs, and Arbitrum have all thrown their hats in the ring for the Cello Layer 2 to build upon their stacks. Why the competition? The Cello Layer 2 will bring huge advantages like a decentralized sequencer, off-chain data availability secured by Ethereum validators, and one-block finality. What does that all mean for you? With Cello Layer 2, gas will stay low and you can even pay for gas natively using ERC 20 tokens, sending crypto to phone numbers across wallets using social connect. But Cello is a community governed protocol. This means that Cello needs you to weigh in and make your voice heard.

• 17:39David Hoffman?

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• 18:22David Hoffman?

  So if you're a developer looking to push the boundaries of what's possible in Web 3, Cartesi is now offering up to $50,000 in grants. Head over to Cartesi's grant application page to apply today. And if you're not a developer, those with staked CTSI can take part in the governance process and vote on whether or not a proposal should be funded. Make sure you're vote ready by staking your CTSI before the votes open. Robinhood receives a Wells notice from the SEC and they are joining the ranks of all the other crypto companies who are now also fighting the SEC. Robinhood says they're just not going down silently. They are going to fight the SEC in the courts. And so Dan Gallagher, Robinhood's CLO, Chief Legal Officer, says, "After years of good faith attempts to work with the SEC for regulatory clarity, including our well-known attempt to come in and register,

• 19:08David Hoffman?

  we are disappointed that the agency has decided to issue a Wells notice relating to our US crypto business." Vlad, the CEO and co-founder, says, "While we strive to maintain positive and productive relationships with our regulators, if necessary, we will use our resources to contest this matter in courts, with the intent of both defending our crypto business and establishing regulatory clarity with the United States for the benefit of our customers." So Gary Gensler in the SEC coming after Robinhood's specifically crypto side of the business. Robinhood Of like, of the most compliant and rigorous and constrained.

• 19:40Ryan Sean Adams?

  Even more constrained and cautious and conservative than Coinbase and Kraken.

• 19:44David Hoffman?

  There's only like 20, 30 like crypto assets on Robinhood and they got served a Wells notice. And so Robinhood, a very like large and well-resourced company is once again like joining the crypto army to fight the SEC in court. So LFG.

• 19:58Ryan Sean Adams?

  It's interesting. So this is number five, right? Of like the kind of the big, big, big names, US-based companies, right? So we've got Metamask consensus, of course. We've got Uniswap, we've got Kraken and Coinbase and now Robinhood. What's interesting is all of the other four companies came directly from like they're crypto native companies. Whereas Robinhood is fintech and they're trying to expand into crypto and have done so quite successfully. It's also interesting, Robinhood has a non-custodial wallet. So I bet that's on the docket for the Wells notice as well. But how did investors react to this, right? Because Robinhood is a publicly traded company and probably has a lot of traditional trad-fi types of investors. I mean, did that spook people?

• 20:39David Hoffman?

  Yeah. So Hood, the equity of Robinhood, had a tiny little blip. I think it went down from $18 down to $17.60 and then right back up to $18. And so there's market fatigue about the SEC Wells notice. Like, the market actually doesn't care about the Gary Gensler like SEC attack on crypto.

• 21:01Ryan Sean Adams?

  Like the market's pricing it in, basically? It's nerfed?

• 21:04David Hoffman?

  Or it's pricing in nothing because they're saying that this is bullshit and it's not going to affect the market.

• 21:09Ryan Sean Adams?

  I mean, Jose says, "This is the debasement of Wells notices and the SEC's reputation."

• 21:14David Hoffman?

  That's what happens when you issue Wells notices like candy.

• 21:17Ryan Sean Adams?

  Well, this is what Jake Trivinsky says. "The SEC just sent Wells notice to Robinhood. The number they've sent about crypto in recent months is astonishing. It's hard to imagine they would or could bring so many enforcement actions at once. It seems like they're abusing the Wells process as a scare tactic now. It's pretty much unprecedented." I mean, think of all these Wells notices that have been recently sent. We don't even know if we're done. My question, David, is what's the, what's the legal theory of this? Like, the SEC is, as you said, dishing out Wells notices like candy, but don't they have to win a case? Like, isn't the correct order of...

• 21:52David Hoffman?

  No, technically, no, they don't.

• 21:53Ryan Sean Adams?

  Wouldn't the correct, normal order of operation be like, do a Wells notice for one company, see if you win in court, based on all crypto assets are security and non custodial wallets are noncompliant, all of these charges are very similar for each of these companies, right? And then, based on that, you'll get a reaction from the market, they'll stop doing it, or whatever, and then take the offenders to court? They're not doing that. It's just like a blanket DDOS attack, which like, makes me think that this is not about winning in court at all. This is about creating a chilling effect.

• 22:24David Hoffman?

  This is just about doing it. They don't care about the outcome, they just want to do it.

• 22:28Ryan Sean Adams?

  I don't think winning a case is the point here, or maybe it was never the point. So David, Gary is doing appearances, whenever he does something like this, he makes an appearance on CNBC, on Squawk Box, and so they want to talk to him about crypto. There's a whole six-minute video, and it will both enrage you, but kind of captures his mindset. Here's how it opens, I'm gonna play this.

• 22:48Speaker 02

  One of the things I wanted to ask you is, when you look at the headlines today, around what the SEC is doing, and what your priorities are, it's hard to tell how much of your focus today is on the stock market writ large, versus the world of crypto, and trying to figure out the future of Ethereum and other things. How do you see it?

• 23:08Speaker 03

  Well, I see it this way, we oversee 110 trillion dollar capital market, about half of that's the stock market, half, as you might know, is the bond markets and other markets. Crypto is a small piece of our overall markets, but it's an outsized piece of the scams and frauds and problems in our markets, because without prejudging any one token, much of this field is noncompliant with the protections of our securities laws. And so thus, you end up with like, an outsized ratio of journalists, questions, and crypto journalists to market cap.

• 23:50Speaker 02

  But is that a function also of the fact that that's where your attention is too?

• 23:55Speaker 03

  No, it's a function of where your attention is. Think about it. I've been on your show, what, a dozen times, and every show you ask about crypto, and my guessing is this will be a majority crypto interview, while the capital markets are 110 trillion. So it's also about where the financial media is focused.

• 24:12David Hoffman?

  God, the level of gaslighting.

• 24:13Ryan Sean Adams?

  Yeah, this is like, this is the ten year of the entire interview, David. And basically, Gary is very triggered that he's being asked crypto questions. And the interviewer's like, you're being asked crypto questions because you're dropping Wells notices. Like, the SEC doesn't usually do this. And you just dropped one on Robinhood. So he goes on to quote what Vlad, the CEO of Robinhood, said against the SEC. And Gary is just like increasingly frustrated this entire time that they keep focusing on crypto. But it's because he is disproportionately focusing on attacking crypto.

• 24:47David Hoffman?

  Dude, this is just like, you know, the Leslie Nielsen gif from Naked Gun, where there's like the exploding building behind him, and he's like, nothing to see here, please disperse. God, this is an insane level of gaslighting.

• 25:00Ryan Sean Adams?

  I want to play this other clip from the interview too, because I think it's relevant. Here it is. It's Gary on disclosures in crypto.

• 25:05Speaker 03

  The field of crypto assets, without prejudging any one of them, many of those tokens are securities under the law of the land, as interpreted by the US Supreme Court. So we follow that law. And you, the investors, are not getting the required or needed disclosures about those assets. And so, like, this is earnings seasons right now, Andrew. Everybody's asking about what's the earnings release, and how many companies are beating earnings or falling behind and so forth. Where is the disclosures from these crypto tokens similar to?

• 25:45David Hoffman?

  I don't know how many times we have to say this, but the catch 22 of Gary Gensler saying there's no, like, although the investor protections around crypto assets are terrible, like, there's no disclosures around crypto assets, investors are getting the raw end of the deal. That's what we're saying about the meta, the points meta, that people have been forced into, cornered into, because you cannot come in and register. He is creating the reality that he is complaining about. This whole line of, "Without prejudging any one of them, many of the tokens are securities, under the law of the land, as interpreted by the Supreme Court." No, bro, as interpreted by you, you're just using the Supreme Court as your scapegoat. The Supreme Court is saying this. Like, no, you're saying this.

• 26:30Ryan Sean Adams?

  David.

• 26:31David Hoffman?

  And then he's saying, like, "There aren't sufficient disclosures from these tokens." What the actual F? If any team actually made any sort of, like, disclosure about, like, "Here's what a token gets you, here the right side of token gets you," they're gonna get the ban hammer from Gary Gensler. It's just the biggest, most gaslighting catch 22 that I've ever fucking seen, excuse my language.

• 26:48Ryan Sean Adams?

  It's so gaslighting, and it's even worse than what you're saying. He's not acknowledging the superior disclosures that crypto already has. The interviewer goes on to ask him about Ethereum, right? And of course, he doesn't, like, answer any questions. "Well, let's talk about Ethereum." Gary says Ethereum and all crypto assets don't have disclosures. Here's the reality. Ethereum issues a decentralized earnings report. He was talking about earnings season. A earnings report every 12 seconds.

• 27:15David Hoffman?

  Mm-hmm.

• 27:15Ryan Sean Adams?

  Okay?

• 27:16David Hoffman?

  You can see it all.

• 27:17Ryan Sean Adams?

  And anybody with an internet connection can audit this. Anyone can access it. It's completely open source. You could see, literally, how much revenue is going to validators and, like, the profit on this revenue. This is also true of many DeFi protocols, that you see that the cash flow's on-chain. This is better than a quarterly earnings report. It's like real-time data. And instead of the SEC going to Ethereum, just connecting... They have this database for all of those disclosures. It's called the Edgar database, right? All of the filings are listed, if you're a company, if you're a security, you have to disclose there. Why don't they just go connect the Edgar database to an Ethereum node? Right? They, they, the disclosures are freaking there.

• 27:56David Hoffman?

  I don't think he's gonna know how to do that.

• 27:59Ryan Sean Adams?

  It was never about disclosures. It's just not about disclosures.

• 28:02David Hoffman?

  It's not about disclosures.

• 28:03Ryan Sean Adams?

  It's not about protecting investors. It's about control. And it always was about control.

• 28:09David Hoffman?

  Suppressing the industry.

• 28:10Ryan Sean Adams?

  And he might think he can gaslight, kind of like the trad users who just don't, have never been to Dune Analytics. Like can't actually go to token terminals and can't see it.

• 28:17David Hoffman?

  Fros and crypto, oh, I've heard of those.

• 28:19Ryan Sean Adams?

  He can't gaslight us, though. I'm like, I prefer these earnings reports to the quarterly things that I get from the SEC. It's like real times, open source.

• 28:25David Hoffman?

  I'm a more informed investor.

• 28:27Ryan Sean Adams?

  Oh, wow. We could go on, David, but that's not all this week.

• 28:31David Hoffman?

  It gets worse. The Biden administration has made a statement of administration policy saying that they strongly oppose the passage of House Resolution Bill 109. Ryan, what is this? What's 109? What's going on here?

• 28:43Ryan Sean Adams?

  Yeah, basically, this is, this is Biden saying that they are going to veto this House Resolution Bill. Okay?

• 28:49David Hoffman?

  Okay, so there's a bill in the House?

• 28:51Ryan Sean Adams?

  Yeah, this is a bill in the House. We'll get to that in a second, but I think that this is the most explicit FU that we've seen from the Biden administration directly against crypto. It's like, most of the time, it's been through kind of like the SEC or FinCEN, Treasury, all of these things. This is Biden actually saying, hey, if this legislation comes to my desk, I will veto it. So let's talk about, let's give some background on this, because House Resolution 109, like, what is this? Okay, so the background context right now is today, in today's environment, US banks can't really custody crypto. The reason why, I don't know if people know this, but it's because about two years ago, so this is March in 2022,

• 29:30Ryan Sean Adams?

  the SEC, again, it's Gary, the SEC pushed through an obscure accounting rule. This was called SAB 102. And in the words of the banks, this is the bank saying that, this is not me, SAB 102 effectively precludes banks from offering digital asset custody at scale since placing the value of client assets on their balance sheet will impact certain capital, liquidity, and other prudential requirements. Basically means no US bank can custody crypto, because if they do, they have to, like, house all of their reserves. It messes up their accounting. It basically is a loophole to make it Impossible for banks to custody assets. And there's two notes on this that are important going into this. This is not how any other asset is treated.

• 30:11Ryan Sean Adams?

  For custodians, there's all sorts of custodial assets out there from like property rentals, you know, securities, all of these things. This accounting requirement is not required for any other thing other than digital assets, other than crypto, right? Because that would be crazy. It's like the custodial service is sort of a known thing. So this is an exclusion for crypto. And also, the way they SEC did this back in March 2022 was sneaky, like over the top sneaky. They didn't do administrative procedural rulemaking. You don't rulemaking with commentary. That's what the law requires, right? They didn't like sneaky a backdoor way and they just pushed it in. So what's happening right now, David, in real time is Congress caught wind of all of this.

• 30:56Ryan Sean Adams?

  The SAB 102 thing, because they didn't really realize what was going on. You know, they're busy, they're focusing on many things, I suppose. And they're trying to reverse it. Okay, so they're trying to reverse SAB 102. That's the House resolution that you just mentioned. And that's what's being, that's what's in front of Congress right now. And then this is Biden saying, hey, if you guys pass this in Congress, if it gets through the House and Senate, I will veto it. And the Biden administration says he would veto it because it would disrupt the SEC's work to protect investors in crypto assets markets and to safeguard the broader financial system. So that's the reason he's giving to veto it. So what's happening right now is this bill is in the House. It actually, just as of yesterday, it passed.

• 31:40Ryan Sean Adams?

  So it passed the House, you got to pass the House, and then it goes to the Senate. And we want it to pass. We like passing. That's good for us. We want it to pass just because like banks are private institutions. They should have the ability to custody crypto assets as well. What do banks do? Banks custody stuff. Yeah, I mean, obviously, we favor bankless custody of your own keys. But there are situations where you want a custodial service to house your private keys, and that's OK, too. We don't want an Operation Choke Point type of situation. Anyway, this passed, and look at the numbers here. 207 Republicans in the House and 21 Democrats. What's significant is actually the number of Democrats that voted for this, because they have to go very much against the Elizabeth Warren party line.

• 32:22David Hoffman?

  That's 21 Democrats that defected from the party lines of the establishment Democrats.

• 32:26Ryan Sean Adams?

  Yes, basically.

• 32:28David Hoffman?

  This is Jake Stravinsky, who's commenting, "SAB 121 is illogical and illegal. The SEC adopted it in violation of the CRA and APA for no reason other than to harm the crypto industry. The White House should have walked away from this mess instead of doubling down on attacking US companies. Not smart in an election year." So this goes back to our episode that we did with, a lot of people gave us like great feedback on this one episode with Joe Lubin and the consensus case against the SEC, where Joe Lubin is just putting on, just like saying the quiet part out loud, like, "This is a conspiracy to just completely suppress crypto out of the Biden administration." And in an election year, Biden is saying, hey, like, we're doing the full suppression. Like, no, you don't enter crypto assets into our traditional financial system.

• 33:13David Hoffman?

  Banks, I know your guys' one job is to custody stuff, but you can't custody crypto. We aren't forcing that choice upon you. And then meanwhile, Gary Gensler, like an arm of the Biden administration, is issuing Wells notices to any company that touches crypto. So it's just a full suppression of the industry.

• 33:27Ryan Sean Adams?

  Well, and here's the crazy, here's the thing that doesn't make sense to me is, why are they doing this before November, right? Even if Biden loses the election, I mean, he's still in office after November. Why not, like, pass it then?

• 33:40David Hoffman?

  Yeah, because like, who is the marginal voter that's like, "Oh, Biden is suppressing the crypto industry? I'm going to vote for him because of that."

• 33:48Ryan Sean Adams?

  Exactly.

• 33:48David Hoffman?

  Who is that voter?

• 33:49Ryan Sean Adams?

  So I asked Jake Stravinsky this question, like, what are they thinking over there? Why are they going full Kim Jong-un on crypto before November? Like, how does this make sense? And Jake's take is, it's an exercise in partisan wagon circling. The administration can't admit the SEC has done anything wrong, and the Democrats have to oppose the Republicans, so.

• 34:06David Hoffman?

  This is so dumb.

• 34:08Ryan Sean Adams?

  It's super dumb.

• 34:09David Hoffman?

  So let's get into the Trump response to this because Trump was asked a crypto question about like how his approach to crypto is and you can just tell it is a direct response like, oh, the Democrats don't like crypto. Well, therefore I like it.

• 34:23Ryan Sean Adams?

  Yeah.

• 34:24David Hoffman?

  And you should vote for me because of it.

• 34:25Ryan Sean Adams?

  Let's play this.

• 34:27Speaker 04

  Biden doesn't even know what it is. If you ask Biden, sir, are you for or against crypto? What's that? What the? Get me off the stage. He's saying, get me off the stage. Now, he has no idea, but look, Gensler is very much against it. The Democrats are very much against it. And I say this, a lot of people are very much for it, probably a lot of the people in this group. And I'm fine with it. I want to make sure it's good and solid and everything else, but I'm good with it. And if you want, if you like crypto in any form, and it comes in a lot of different forms. If you're in favor of crypto, you better vote for Trump.

• 35:02Ryan Sean Adams?

  So David, what that does is this makes crypto an election issue.

• 35:07David Hoffman?

  Yep.

• 35:08Ryan Sean Adams?

  And this is back to-

• 35:09David Hoffman?

  And they just gave Trump the silver platter of like the crypto single issue voter. If you are a crypto single issue voter, like Biden wants to ban it, Gary Gensler wants to ban it. Gary Gensler is Biden and Trump just said like, well, I'll, I don't, he doesn't even have to follow through on supporting it. He just has to not ban it.

• 35:28Ryan Sean Adams?

  100%, 100%. It's just the game theory of it. If the Democrats are saying one thing-

• 35:32David Hoffman?

  It's free votes for the Trump administration.

• 35:34Ryan Sean Adams?

  He's gonna go to the other side and try to get votes and try to appeal to this demographic. And the question of can you Trump, can you trust Trump or not to like follow through this promise?

• 35:45David Hoffman?

  It doesn't matter.

• 35:46Ryan Sean Adams?

  It doesn't even matter at this point in time. It's become an election issue and it's gonna be a piece of it. I mean, this leads to the question that a lot of people are asking is like, okay, what happened here? Like, do the Democrats hate crypto? We've kind of seen the trajectory of this a little bit. And one thing I'll just say to people is like, not all Democrats hate crypto. You actually go to the Coinbase Stand With Crypto website, which is fantastic. And you like sort by Democrats and their stance on crypto as like pro crypto. And you can see a lot of folks here, like a lot of, like, we've talked to- Members of Congress, Richie Torres is a Democrat who is in favor of crypto. So it's definitely not all of them, but it does seem to be a strong contingent, particularly with access into the executive branch of the Biden White House,

• 36:31Ryan Sean Adams?

  the anti crypto army led by Elizabeth Warren that are really pushing down these positions. So do we?

• 36:37David Hoffman?

  It's the establishment Democrats.

• 36:39Ryan Sean Adams?

  Yes.

• 36:40David Hoffman?

  The incumbent Democrats.

• 36:41Ryan Sean Adams?

  I just, I don't even know if we know where Biden like truly stands on this issue.

• 36:45David Hoffman?

  I don't think Biden cares. I don't think he has an opinion on it.

• 36:48Ryan Sean Adams?

  So in the absence of not having a strong opinion, right? That decision kind of gets delegated to the Elizabeth Warrens of the world and the anti crypto army. Right?

• 36:57David Hoffman?

  And so This is where Joe Lubin says the, the banking sector, the incumbents have found their wedge into the political spheres through the Elizabeth Warren incumbent Democrats types.

• 37:08Ryan Sean Adams?

  That's right.

• 37:08David Hoffman?

  Who have the ear of Biden.

• 37:10Ryan Sean Adams?

  That's right. And it is a, interesting you say wedge because it is a wedge issue. I think some people will just say, well, like, okay, sure. The Bankless Podcast cares about these issues and there are like some like greater than zero percentage of single issue crypto voters, but really it's not going to swing an election, right? This doesn't matter and that's why they're doing it. So like they can do all of this stuff because they know crypto voters don't participate or don't care. There's not enough of them. There's actually some interesting data on that that's been put out last week by, by Paradigm. Really interesting poll that fills in some blanks. Basically 31% of voters, this is a poll for just swing states, like the states that matter for Biden. If 31% of votes in the swing states are crypto positive and 40% of them say it's a major issue.

• 37:55Ryan Sean Adams?

  So if you kind of distill that, that's about 12% of the electorate overall. That is crypto positive and also says it's a major issue for them. So 12% is not small, David.

• 38:08David Hoffman?

  No, that's huge, dude.

• 38:10Ryan Sean Adams?

  Especially

• 38:10David Hoffman?

  I kind of didn't expect that. This is a poll coming out of the blockchain association. So there's a conflict of neutrality there.

• 38:17Ryan Sean Adams?

  For sure.

• 38:19David Hoffman?

  But like still, if that is at all directionally correct.

• 38:22Ryan Sean Adams?

  What if it's like?

• 38:23David Hoffman?

  If it was 5%, I would still be impressed.

• 38:26Ryan Sean Adams?

  Well, because some of the, the elections in some of these swing states are going to be so tight. So to me, this is like a complete self owned move.

• 38:34David Hoffman?

  This is a huge blunder.

• 38:35Ryan Sean Adams?

  By the Democrats and wow, I guess crypto just became an election issue and we'll see how that plays out.

• 38:41David Hoffman?

  Yeah, yeah, this is, uh, these are facts and circumstances that I will not be bringing up with my family. What do we got coming up? Coming up next, token launches, FriendTech, Mode all launched their token. We got an update on the Eigenlayer stake drops, some new details there. All of that and more, but first a moment to talk about these fantastic sponsors that make the show possible, especially Mantle, a preferred yield-bearing layer two. If you haven't explored the Mantle ecosystem, there's a link in the show notes so you can get started. Mantle, formerly known as BitDAO, is the first DAO-led Web3 ecosystem, all built on top of Mantle's first core product, the Mantle network. A brand-new, high-performance Ethereum Layer 2 built using the OP stack, but uses Eigenlayer's data availability solution instead of the expensive Ethereum Layer 1. Not only does this reduce Mantle Network's gas fees by 80%,

• 39:23David Hoffman?

  but it also reduces gas fee volatility, providing a more stable foundation for Mantle's applications. The Mantle Treasury is one of the biggest DAO-owned treasuries, which is seeding an ecosystem of projects from all around the Web3 space for Mantle. Mantle already has sub-communities from around Web3 on-boarded, like Game7 for Web3 gaming and Bybit for TVL and liquidity and on-ramps. So if you want to build on the Mantle network, Mantle is offering a grants program that provides milestone-based funding to promising projects that help expand, secure, and decentralize Mantle. If you want to get started working with the first DAO-led Layer 2 ecosystem, check out Mantle at mantle.xyz and follow them on Twitter at @zeroxmantle. Taking self-custody of your crypto is one of the most important things you can do on your bankless journey.

• 40:05David Hoffman?

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• 40:48David Hoffman?

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• 41:32David Hoffman?

  Explore the ecosystem at portal.arbitrum.io. Are you looking to permissionlessly launch your own Arbitrum Orbit chain? Arbitrum Orbit allows anyone to utilize Arbitrum's secure scaling technology to build your own orbit chain, giving you access to interoperable, customizable permissions with dedicated throughput. Whether you are a developer, an enterprise, or a user, Arbitrum Orbit lets you take your project to new heights. All of these technologies leverage the security and decentralization of Ethereum. Experience Web3 development the way it was always meant to be: secure, fast, cheap, and friction-free. Visit arbitrum.io and get your journey started in one of the largest Ethereum communities. Moving on to Friendtech. Friendtech launched their token last week, kind of just coming back after being pretty

• 42:13David Hoffman?

  quiet for a number of months since the Friendtech mania kind of ended. Along with a token, Friendtech V2 with a couple of new features: clubs. So there can be a club now. So instead of having like owning the keys of one particular person, keys of a club can be made. There's a native DEX inside of Friendtech. So they have a Friendtech native AMM, which is where all of the Friendtech token is getting its liquidity from. And then, of course, inside of the app, liquidity providers who provide ETH and Friendtech liquidity to this AMM are getting 1.5% in fees as well. And so what's interesting here is just like you're seeing the vertical integration. This is all on base, but Friendtech, the app, is also got its own DEX.

• 42:58David Hoffman?

  And so it's getting some just more infrastructure. Friendtech token coming in just under $2 right now. That brings it to a fully diluted valuation of 178 million, which I think is pretty like not, it's not over its ski tips. 178 million in comparison to like the high FDV low float tokens that are out there. Pretty damn fair.

• 43:17Ryan Sean Adams?

  What, 100% of the supply went to users, basically, the community? Is this true or not?

• 43:22David Hoffman?

  Yeah, I there wasn't a blog post. I couldn't really figure out like the distribution, but apparently 100% of friend tech tokens got sent out to the people that of users of friends.

• 43:34Ryan Sean Adams?

  I claimed mine and it was okay. It was kind of a clunky experience, I gotta say, but it was okay. And but but I do think that this token, this chart is one to watch of like friend tech, because this is almost going to be a bellwether for other socialfi types of applications and the narrative around it. So it's definitely an interesting one to watch.

• 43:54David Hoffman?

  Yeah, certainly. The other thing that's interesting about this is that there's friend tech has been very popular with like the trader influencers out there. But when you claim your friend tech tokens, it goes to an account that everyone knows is yours. And so everyone can see people when they choose to sell their friend tech. And so like, there's been this like, like, people, people are shilling their friend tech, but then they're also dumping it at the same time. And now for the first time, people can see the relationship

• 44:21Ryan Sean Adams?

  Their favorite influencers dumping their favorite influencers, what they're saying

• 44:24David Hoffman?

  in public versus what they're doing in private. Now we totally know this. So that's been a

• 44:27Ryan Sean Adams?

  fun disclosure is Gary Gensler. We got him. Okay, moving on to the Eigenlayer Stake Drop

• 44:33David Hoffman?

  update. This happened on the Friday right after we recorded last week. So 100 additional Eigen tokens are being allocated to every single wallet. So every single wallet is getting 100 Eigen tokens. The minimum that you could have gotten before this update was 10. And so in addition to this 100, now the minimum you're getting is 110.

• 44:51Ryan Sean Adams?

  Raising the floor.

• 44:53David Hoffman?

  Raising the floor for everyone. Yeah. Also, just some clarity. Investor vesting, I said this last week, so roll up, this is just like a miscommunication. Just people made an assumption that investor vesting started before Eigen transferability started. That did not, that's not true. And they just made a clarifying statement that investor vesting of the Eigen token does not begin until Eigen is transferable. And then they provided some more clarity about the transferability targeted date, which is around September. Claiming will go live the day that people are listening to this, Friday, the 10th of May. So we're going to start to see like, how many people, if they are motivated to, to get around the claiming VPN block. But all of that information is going to be surfaced on crypto Twitter for people who are watching.

• 45:36Ryan Sean Adams?

  Yeah, I don't have any more takes on this. I feel like we've talked this one to death. I will just notice that people seem pretty happy about this. And the

• 45:43David Hoffman?

  Their response was good.

• 45:44Ryan Sean Adams?

  Yeah, like the anger about this has completely subsided. Like, portion that was real of that anger, and also the portion that was maybe like airdrop farmers.

• 45:52David Hoffman?

  Yeah, yeah, yeah. Not the only token. So Mode introduced its token, Mode Network. It is an OP stack, superchain chain. If you aren't really familiar with Mode is, it's basically like a superchain version of Blast. Blast also an OP stack, but not inside of the superchain. Mode is inside of the superchain. And so there's just a bunch of like incentivized growth.

• 46:14Ryan Sean Adams?

  Incentive. David, being in the superchain, does that provide you any like benefit right now? Or it's more of a social benefit with the promise of future integration benefit? Yes?

• 46:26David Hoffman?

  The biggest benefit is you get involved inside of Optimism OP retroactive public goods funding, which is like people right now on Blast are farming Blast gold. But Mode as a part of the superchain, like doing things on Mode rewards you with like OP grants and a variety of different things.

• 46:42Ryan Sean Adams?

  But the hope is for more than that. The hope is that the-

• 46:44David Hoffman?

  That's what's happening today.

• 46:45Ryan Sean Adams?

  It becomes more of an economic zone, right? Where everything is composable and synchronous and that's gotta be what Optimism is working towards. Yes?

• 46:54David Hoffman?

  Yeah. They haven't released details yet, but like I think there's some like people, it's kind of flying under the radar. I think Optimism is not like immediately soon, but they're gonna drop some like pretty damn cool, like both the scaling and composability innovations.

• 47:08Ryan Sean Adams?

  Well, I actually just want to skip ahead while we're talking about Optimism. I saw this post, didn't get a chance to get into it, from Optimism welcoming L3s to the superchain. This is from Optimism. Like, what are they saying with respect to L3s? So there are already L3s built on the superchain, right? We've talked about DGEN, which is kind of built on Base.

• 47:27David Hoffman?

  Built on top of Base, and Base is a part of the superchain. But I don't know if DGEN is, because DGEN is built using Arbitrum Orbit. And in order to be part of the superchain, you need to be under the same like tech stack. You need to be using the OP stack.

• 47:40Ryan Sean Adams?

  Okay, so what is this? What is an L3 on the superchain?

• 47:43David Hoffman?

  Yeah, so they're giving their roadmap to how you can be an L3 on optimism and also be a part of the superchain. So there's two main different innovations here that are differentiated from just a typical OP stack fork, which is like mode network and base and all the other ones. So there's this thing called Plasma Mode, which is like an alternative version of a data availability layer. They've been working on Plasma, which is a very old technical innovation that is being resurfaced as a data availability layer, extremely cheap, like I think probably like theoretically minimum cost for data availability. And then also custom gas tokens. So famously, DGEN, the DGEN chain uses the DGEN token as a gas token. And so these are the new features that are being brought into what could be

• 48:28David Hoffman?

  a layer three construction to really allow for a very strong layer three construction. Like if you're going to build a layer three, you need to be super, super fast, super, super quick. And then you're also going to want to use your own token as a gas. And so these primitives are being standardized so it can be brought into the superchain.

• 48:44Ryan Sean Adams?

  David, also something we've been covering is Bitcoin Layer 2. We did this episode with Eric Wall, which I absolutely love. If you want to go deep on Bitcoin Layer 2s and what's real, what's not, you got to go check that out. But something for at least last week that we didn't catch, or we didn't include in the rollup, and this is Bob, the Bob chain, build on Bitcoin. It's a Layer 2 in air quotes. So it's not quite a Layer 2, but it is using the OP stack and the social commitment is to transition to being secured by Bitcoin when BitVM as a technology matures and they're able to do that. So they're growing this with, it's like a platypus because they're growing this with Ethereum in quotes, technology, like fork of the OP stack. And then eventually they want to use Bitcoin as the settlement

• 49:29Ryan Sean Adams?

  layer. I think we're going to see a lot of experimentation in the Bitcoin Layer 2 world around this and it's pretty exciting. Also, I haven't had a chance to listen to your episode. It's right now, it's on the Bankless Premium feed. So if you're a Bankless citizen, you already have this. It's in my queue to go listen to. But this is around autonomous worlds, something that you were super excited about. I did notice that there was this chain called Redstone that was deployed and it's a, is this, this is a Layer 2, but it's focused on autonomous worlds? Tell me about Redstone and just pill us on the autonomous worlds like concept if you can.

• 50:06David Hoffman?

  Yeah, so now actually, we're moving back into the OP stack and the superchain. Redstone is an OP stack layer two. It's actually developed downstream from the actual first ever forking of the OP stack. If people remember OP MUD or OP Craft, which was a Minecraft version of, and like it was an OP stack fork that ran Minecraft. Autonomous Worlds is a category of Ethereum development that I actually think is Ethereum's main quest line, which is why I'm so bullish on it.

• 50:36Ryan Sean Adams?

  You think it's super big.

• 50:37David Hoffman?

  This is like the logical conclusion of where Ethereum goes. Ethereum, when it starts, it first starts at DeFi, it ends at Autonomous Worlds. And so this is what this episode is about with Justin Glibbert from the Lattice team. Lattice is an OP stack construction. Think of it like an operating system for building autonomous worlds on an OP stack chain. An autonomous world is kind of synonymous with a fully on-chain game. So a game with all of the logic put on-chain, not any, no logic is left external. Like, there's no external dependencies, physics, assets, like the laws of the world are all coded on-chain. And this is why they need that plasma mode that I was talking about earlier with just like extremely cheap,

• 51:21David Hoffman?

  basically zero data availability costs. And then also they have like an operating system that they're calling Lattice that they're building on top of Redstone. And so this is so experimental, this is so early in this whole like autonomous worlds thing. But like the degree of which I think this is, it's hard to understate. This is the main point of Ethereum, this logical conclusion of Ethereum. It's basically what is actually really the promised metaverse, but I'll let people who listen to the podcast episode like unpack that take when they listen.

• 51:48Ryan Sean Adams?

  Well, in order to get that episode, you gotta be on the Bankless Premium feed. And by the way, we are glowing up the Bankless Premium feed. It's now available on Spotify. It's awesome. It's some bonus exclusive episodes further in the frontier. There's actually a code that I want to give today. It's in the show notes, but FEED10, it gives you a 10% discount on a Bankless. Yeah, FEED, F-E-E-D-10. I don't know how long that's gonna last, but go check out that episode as I'm going to, it's in my queue.

• 52:13David Hoffman?

  Okay, we're hopping around left and right this week. Now we're back into the world of nation states. And their relationship with crypto, but this time not inside of the United States. This time we're talking about Nigeria. What's going on in Nigeria, Ryan? And why, why is this relevant to crypto?

• 52:24Ryan Sean Adams?

  Well, David, it seems like some capital controls are hitting Nigeria. So Nigeria has a version of the SEC and they are proposing some, they've been, there's been a crackdown on Binance right now. And just like in general crypto and exchanges. Now there's some legislation like that they're looking to pass that would actually ban peer to peer crypto transactions. And why? It's basically because of the threat of like crypto trading against the Nigerian currency. And I say this to say, like, you know, people hearing this will say, well, that's in Nigeria. Like I live in, you know, someplace in Europe or I live in Australia or I live in the US. Like, how's that going to affect me? I feel like the example that we're seeing in Nigeria of capital controls is just kind of like front running.

• 53:08Ryan Sean Adams?

  What is possible in your, you know, local liberal, Western liberal democracy with like a mature, like, you know, system. When you get into a situation where the local currency is under threat from money printing. We talked about this at length in an episode that we just recorded, I think it's coming out on Monday with Lynn Alden. There's an entire section there on capital controls. And what could happen when a country gets into a situation like the 1930s in the US? And like, I guess worldwide where there are threats to the nation state currency from some sort of non sovereign asset. And in that case it was gold. The next case, it could be crypto. So I feel like I'm watching this in Nigeria.

• 53:53David Hoffman?

  You're saying this is, this is a canary in the coal mine.

• 53:55Ryan Sean Adams?

  It's a canary in the coal mine. I feel like they're front running something really ugly that could happen in other places around the world. I would actually be interested in talking to somebody like from the crypto community in Nigeria. Do a bankless episode to just like, see what it's like on the ground. Because I think this is incredibly important to.

• 54:11David Hoffman?

  You're saying like the weakness of a fiat currency is going to be a harbinger of capital controls for any. So like, if you are living in a country with a weak currency, you're likely to see capital controls around crypto sooner rather than later is what you're saying.

• 54:25Ryan Sean Adams?

  That's what I'm saying, David. But let's not end on that. All right. Let's, let's end on some good news.

• 54:30David Hoffman?

  Yeah, this is actually kind of a big deal. Revolut, which is a very big payment provider, I think mainly focusing on Europe.

• 54:37Ryan Sean Adams?

  Yes.

• 54:38David Hoffman?

  Has introduced Revolut X, I guess we love naming things X these days. A cryptocurrency tailored exchange. So Revolut, a trad, European-based payment provider, has introduced a crypto exchange, to I would assume to help facilitate foreign exchange transfers and actually exchanging currencies.

• 54:56Ryan Sean Adams?

  It's really cool. Have you ever used Revolut, David?

• 54:58David Hoffman?

  No, I have, not in forever, no.

• 55:00Ryan Sean Adams?

  It's just, it's like Venmo. It's kind of a Venmo-type experience, only it's much, much more European-focused.

• 55:06David Hoffman?

  And much bigger, right? Like much more of like a kind of a common standard to use in Europe.

• 55:11Ryan Sean Adams?

  Yeah, I think it's a very big deal in many places in Europe. So expanding into crypto, the way Robinhood did.

• 55:18David Hoffman?

  Yeah, that's a, that's a pretty big deal, especially for European listeners. So, congrats on the dub, European listeners. Bankless Station, that was the Weekly Rollup. Thank you for running through the weekly news with us. We got a meme of the week to leave you with. This is from John Woo, which is the classic bell curve meme, but I actually helped. I think this is a great synthesis of what the bell curve meme actually is. Of course, you have the left and the right side of the curves, and then you have like the frustrated man in the middle. The left and right side of the curves labeled as practice here, and then the frustrated man in the middle labeled as theory. I actually really appreciate this because I think like the whole point about being on one, on the margins of the curve, is actually you're putting your money where your mouth is, and you're not just theorizing things, but you're putting things into practice.

• 56:01David Hoffman?

  You're actually like, you're actually taking risks, you're actually like in the trenches, you're actually taking real learning lessons, not just theorizing about stuff. So, appreciate the meme.

• 56:10Ryan Sean Adams?

  A hundred percent, and that is a timeless lesson from Bankless, of course. We've always encouraged like, in order to understand what to invest in in crypto, you actually have to use the apps. You have to use the system. You have to be on the frontier and do stuff in crypto. And crypto pays you to learn about crypto, not just in ergops.

• 56:24David Hoffman?

  Even if you lose money, you gain lessons.

• 56:26Ryan Sean Adams?

  A hundred percent, a hundred percent. This is like timeless, I think.

• 56:29David Hoffman?

  Which is not cope.

• 56:31Ryan Sean Adams?

  How come I'm always stuck in the middle and like being frustrated with theory though, David? This is not cop. All right, guys, we'll end with this. Risks and disclaimers, of course. You know crypto is risky. You could lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. See you later.