ROLLUP: $3B ETH Whale | Roman Storm Verdict | Trump 401(k) Crypto Order

On this week’s Weekly Rollup, Ryan and David cover Tom Lee’s $3B ETH buying spree at 12x Michael Saylor’s pace, the race to become the top Ethereum treasury, and whether these companies are a buy or not. They also discuss the Roman Storm verdict, Trump’s surprise $8.7T 401(k) crypto order, and Arthur Hayes selling millions in ETH. Plus, Base’s 33-minute outage, the launch of Succinct’s ZK prover network, and the SEC declaring liquid staking tokens are not securities. --- 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24 https://bankless.cc/spotify-premium --- BANKLESS SPONSOR TOOLS: 🪙FRAX | SELF SUFFICIENT DeFi https://bankless.cc/Frax 🦄UNISWAP | SWAP ON UNICHAIN https://bankless.cc/unichain 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle --- TIMESTAMPS & RESOURCES 0:00 Intro 6:17 Markets https://www.cbsnews.com/news/jobs-report-today-july-2025-economy-tariffs-trump-doge/ https://x.com/CryptoHayes/status/1951510939469292023 https://x.com/EricBalchunas/status/1952346941523701954 https://x.com/MitchellHODL/status/1948779978579214777 https://x.com/cburniske/status/1953240847669182937 13:05 Tom Lee becomes the largest crypto holder https://x.com/WhaleInsider/status/1952386215975469242 https://www.tradingview.com/chart/1CDu50yK/?symbol=AMEX%3ABMNR https://x.com/RyanSAdams/status/1952386046206890262 https://youtu.be/iClsnZ1KYSk?si=Ko99PtLiTCiJ_Q-O https://x.com/fabdarice/status/1953110071493439604 https://www.strategicethreserve.xyz/ https://x.com/NateGeraci/status/1953272814422937941 https://blockworks.co/analytics/treasury-companies/market-data https://www.theblock.co/post/365645/mei-pharma-litecoin-treasury-strategy-charlie-lee-gsr 25:31 Roman Storm’s case came to the end https://x.com/SDNYnews/status/1953196594876301702 ​​https://x.com/valkenburgh/status/1953149843565605015 https://x.com/katiebiber/status/1953235191893549123 https://x.com/jchervinsky/status/1953142247504908496 https://x.com/RyanSAdams/status/1953147290165641407 https://www.youtube.com/watch?v=zfKSKz3Kafk 36:10 Executive order - crypto in your 401k https://watcher.guru/news/trump-to-sign-order-allowing-crypto-in-401k-retirement-plans 41:20 Base halted block production for half an hour https://x.com/jessepollak/status/1952785312767459709 https://x.com/TrustlessState/status/1953129400087572524 45:22 Succinct Prover Network is live! https://x.com/pumatheuma/status/1952836524808257580 https://www.coingecko.com/en/coins/succinct 49:00 SEC said LSTs are not securities https://x.com/RebeccaRettig1/status/1952780309876867200 https://x.com/jespow/status/1952833684392034404 50:23 Metamask is about to launch its stablecoin https://x.com/AggrNews/status/1952821245814182346 51:41 Barry Silbert returns to Grayscale as chairman https://x.com/BarrySilbert/status/1952460252571468187 52:29 China said Worldcoin-style iris data collection are national security threat https://www.theblock.co/post/365752/chinese-security-ministry-flags-iris-national-threat https://x.com/BanklessHQ/status/1947265308416229745 55:43 Coinbase Ad was banned in the UK https://x.com/brian_armstrong/status/1952152928044847477 https://www.theguardian.com/politics/2025/aug/04/george-osborne-uk-cryptocurrency-boom-left-behind 58:02 Closing & Disclaimers 58:11 Moment of Zen https://x.com/coinbase/status/1950843893240496564 --- 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.

• 0:04Ryan Sean Adams?

  Bankless Nation is the second week of August. It's time for the Bankless Weekly Roll-Up. David, I declare this is Tom Lee Week at Bankless.

• 0:11David Hoffman?

  Why is it Tom Lee Week?

• 0:14Ryan Sean Adams?

  Tom Lee just became the number one largest ETH holder, at least that we know about. That happened on the week. He's got almost a million, not a million dollars' worth, a million in supply of ETH. That's like $3 billion. We gotta talk about how he got that.

• 0:29David Hoffman?

  Well, if I own ticker B M N R, then I am a shareholder of the entity that holds the largest amount of ETH.

• 0:37Ryan Sean Adams?

  Yes.

• 0:38David Hoffman?

  So me and Tom Lee combined own $3 billion of ETH. Something like that.

• 0:44Ryan Sean Adams?

  Wow, wow. I didn't know I was speaking with such a whale here. Do you actually own some B M N R?

• 0:51David Hoffman?

  No, I don't. But not for any particular reason. I just kind of have, other than just like looking at the different leadership of all the ETH treasury companies, I don't really have any other way to really differentiate between the two. I know that, I know, I'm pretty sure that there are material differences, but they don't broadcast their secrets. Like, remember in the episode with Tom Lee? I was like, so Tom Lee, like, what strategies do you employ to that? And he's like, David, these are inappropriate questions.

• 1:17Ryan Sean Adams?

  Yeah, he said, "These are inappropriate." Step back.

• 1:20David Hoffman?

  Yeah, he's like, calm down. You're on strike too, buddy.

• 1:25Ryan Sean Adams?

  Thank God I recovered that entire interview. You know, I have to go to the next one. No, but I've actually got some takes for you on ETH treasury companies and their M N A's.

• 1:33David Hoffman?

  I'd love to hear them.

• 1:34Ryan Sean Adams?

  So actually, I want to hear what you say about this. And also, what's your favorite Tom Lee photo, David? Because look at him here.

• 1:41David Hoffman?

  Dude, I can't believe this thread popped off. Okay, so was this you? Was this you on Twitter? Okay, so Ryan posted on the Bankless Twitter account. It's Tom Lee Day at Bankless. Post your favorite Tom Lee picture. There is a lot of quality. There's a lot of quality Tom Lee pictures. Did you see him with the two Rockettes?

• 1:58Ryan Sean Adams?

  Uh, no, let's get there. Okay, this is Tom Lee and Jensen right here. Tom Lee actually... Looking like it's been a long night there.

• 2:05David Hoffman?

  The hair of Tom Lee every single time.

• 2:07Ryan Sean Adams?

  This is AI generated. Tom Lee is Superman.

• 2:09David Hoffman?

  No, it's not.

• 2:10Ryan Sean Adams?

  Yeah, I could tell. I could still tell. This is Tom Lee with some pudgy penguins.

• 2:14David Hoffman?

  Pudgy Penguin, yep, yep, yep.

• 2:16Ryan Sean Adams?

  Tom Lee's call for Bitcoin. Bruce Lee, nope. Oh, Rockettes.

• 2:20David Hoffman?

  There we go.

• 2:20Ryan Sean Adams?

  Is that the one?

• 2:21David Hoffman?

  Look at the angle of his kick. He's doing great.

• 2:25Ryan Sean Adams?

  My god, that's bullish.

• 2:26David Hoffman?

  That is a good Rockettes stance.

• 2:29Ryan Sean Adams?

  I feel like that's a straight line up. Is that showing something?

• 2:32David Hoffman?

  That leg is going up and to the right.

• 2:35Ryan Sean Adams?

  There's a lot of Tom Lee fodder here, so.

• 2:39David Hoffman?

  There's a lot of good Tom Lee material out there.

• 2:41Ryan Sean Adams?

  Yeah, he's, anyway, okay, that's not all we're talking about. There was a pretty big verdict on the week that we got to cover. So that was the Roman Storm trial. What are we talking about there?

• 2:50David Hoffman?

  Yeah, I'm pretty jazzed about it and I'm kind of very aware that I'm more jazzed than anyone else, but like.

• 2:58Ryan Sean Adams?

  Maybe more than me still.

• 2:59David Hoffman?

  More than, more than, more than Ryan, more than some of the lawyers. We talked with Peter from Coin Center and also David Morris. And so we kind of got their opinion right after the verdict. I'm talking with Jake Travinsky and Amanda Tummanelli on Monday, so I'm going to get their opinion. But like, I'm still of the opinion that we have, we still have work to do. But there is a possible better outcome, a better outcome than was ever possible before. Specifically downstream of the nature of the verdict that came out of Roman Storm. So I will, we will talk and I will give my case for why this is.

• 3:30Ryan Sean Adams?

  The verdict is in though.

• 3:31David Hoffman?

  The verdict is in.

• 3:32Ryan Sean Adams?

  Yeah, it's a partial verdict, so we'll get into all those details. Also, the SEC said stake tokens like, you know, Lito stake D, they're not securities. So we always knew this, but good to see them say it. Succinc releasing their Prover network, why that is pivotal to scaling the Ethereum layer one. Also, Base stopped producing some blocks. We've got to talk about what went wrong there. And David, there's a Trump executive order that's being signed today, okay? At the time of recording, so it will have already been signed. Crypto is now allowed in your 401K, sir.

• 4:03David Hoffman?

  Dude, this is, like, no one saw this coming.

• 4:07Ryan Sean Adams?

  Yeah.

• 4:07David Hoffman?

  Right? And he just decides, Donald Trump just decides that crypto can go in the 401K, which is like, there's a reason. And why that's massively bullish.

• 4:15Ryan Sean Adams?

  Yeah.

• 4:15David Hoffman?

  If you are in the 401k, you just have a constant buy pressure from everyone's two-week pay period salary in America.

• 4:23Ryan Sean Adams?

  Yeah, yeah, yeah. We'll get into that, including when it's starting. I did some research on this one. David, you know what? We should, we should do this. We should shill the bankless premium feed on the podcast for just a minute here.

• 4:33David Hoffman?

  Let's shill our product.

• 4:34Ryan Sean Adams?

  Okay, let's shill it. Okay, so the bankless premium feed is a special RSS feed. So if you're on Spotify, you listen to the podcast. If you're on Apple, any RSS player, you listen to this podcast. If you see kind of like the black bankless, you're on the, you're on the regular feed.

• 4:50David Hoffman?

  Pleb feed.

• 4:52Ryan Sean Adams?

  Is that what we call it? You're on the pleb feed. Sorry, guys. It's great. It's mostly all the content, but not all of the content.

• 4:59David Hoffman?

  It's 90% of the content.

• 5:00Ryan Sean Adams?

  Yeah, there's commercials, other things, but on the premium feed, that's what happens if you upgrade, you become a bankless citizen. You get all sorts of other stuff, including this episode right here. We just recorded an episode earlier this week with Vitalik Buterin, it's a two-hour episode. Absolutely phenomenal. That's already available to you.

• 5:17David Hoffman?

  People have already, people on the premium RSS feed with the white bankless logo have already listened to the Vitalik episode. They're also listening to the same episode right now, but they're doing it without the commercials. So they're going to end this episode six minutes sooner than the pleb feed and they're going to get six minutes of time back.

• 5:33Ryan Sean Adams?

  It's a bull market. You can afford it, guys.

• 5:35David Hoffman?

  Yes, yes. And there's also, last week I did a episode with AJ from Arbitrum.

• 5:40Ryan Sean Adams?

  Yeah.

• 5:41David Hoffman?

  And that went out on the premium feed.

• 5:42Ryan Sean Adams?

  Bonus content.

• 5:43David Hoffman?

  This incoming week, I'm doing an episode with Preston Van Loon. That's going to be on the premium feed. That will not be on the pleb feed, which is the black and red bankless feed. If you are looking at the podcast player and it's black, you're on the free feed.

• 5:56Ryan Sean Adams?

  Yeah, you want to go white and red. That's the, that's the premium feed. There's also these debrief episodes that we do. And so even this Vitalik one, so after the episode, we just stop and then we hit record again. And we just give our raw thoughts after the episode.

• 6:08David Hoffman?

  Very casual. Forty minutes, forty minute long episode. Yeah.

• 6:11Ryan Sean Adams?

  Yeah, extra episode. Anyway, that's available for you. If you want to go upgrade, that's, there's a link in the show notes. David, let's talk about the market. I want to talk, I was out last week. Okay, so maybe this is the blame, but it. It seemed like crypto markets dipped on Friday. Are you responsible for this dip?

• 6:27David Hoffman?

  That's, that's why they dipped?

• 6:29Ryan Sean Adams?

  I don't know.

• 6:30David Hoffman?

  That means you can't leave.

• 6:31Ryan Sean Adams?

  I was out and then I came back and now we're fine again. But what happened last Friday, Saturday, like what was this dip?

• 6:38David Hoffman?

  Like I wasn't really tapped into this one because like I kind of didn't really think it was worth tapping into. There was some like jobs report, we revised some historical job numbers to revise them downwards. People are like, oh, this is tariffs, tariffs are finally catching up. They're showing up in reduced jobs. That's bad for the economy. And then Trump got in a tizzy and he fired someone and started like saying that the, the numbers were fake news and.

• 7:03Ryan Sean Adams?

  Labor secretary.

• 7:04David Hoffman?

  Yeah, the labor secretary. Yeah. But, but it sounds like I think we're kind of just bouncing back. I think we're fine now.

• 7:09Ryan Sean Adams?

  You don't want to talk about it anymore?

• 7:11David Hoffman?

  I am chalking it up to like, I don't need to go and pay attention to that one.

• 7:15Ryan Sean Adams?

  People are concerned. What I, did ETH price go what 3200 and Bitcoin dropped below?

• 7:19David Hoffman?

  Yeah, people thought it was all over and I'm like, maybe it's all over, but if we're bouncing back, then like the bull market just resumes. And we're going up, we're going up another 70, 80% before we do another one of these things.

• 7:29Ryan Sean Adams?

  It was on more like that, the blame for this is probably on some of the new tariff, um, saber rattling coming from Trump, 70 plus countries. Also the weak economic data really resulted from that. So they revised some of the early job reports down by a substantial amount. And people are saying, oh, okay, is this the tariff like recession that, uh, we've been worried about? Actually, this was notable. People were looking on chain, Arthur Hayes sold a bunch. So he sold, you know, August 1st, I guess the end of last week, he, he sold, you know, uh, adding this up about 15 million worth of crypto, including 8 million worth, worth of ETH. And he actually gives a reason why. He said, the reason I sold is the UF tariff bill is coming due in Q3.

• 8:09Ryan Sean Adams?

  All right. At least the market believes that after the NFP print, uh, non-farm payroll is probably what that means. The labor numbers, the jobs numbers. No major econ economy is creating enough, uh, credit fast enough to boost nominal GDP. So Bitcoin tests 100K, ETH tests 3K. Um, come to my Tokyo keynote, October, August 25th for more info, back to the beach. He was basically like, hey.

• 8:31David Hoffman?

  When did he tweet this?

• 8:33Ryan Sean Adams?

  August 1st.

• 8:34David Hoffman?

  August 1st. Okay, it's August 7th. We are higher right now, so.

• 8:39Ryan Sean Adams?

  I bet he's back in already.

• 8:41David Hoffman?

  Yeah, he's bought back in.

• 8:42Ryan Sean Adams?

  This is why you don't trade. I don't, I don't, this is why I don't trade these things.

• 8:46David Hoffman?

  I don't trade. I don't trade. I don't trade. I just buy, I just buy more.

• 8:50Ryan Sean Adams?

  Dips are gonna come. It's gonna happen. You either believe we're in a secular bull market or not. I happen to believe that. We are.

• 8:56David Hoffman?

  I believe we are in a secular bull market, not just in crypto, but also with the economy. When I hear news right now of like, oh, like a drop, bad jobs market report came in and like, we got scared. I'm just gonna like, you know, in five days, I think we're gonna be higher. And that has been true.

• 9:11Ryan Sean Adams?

  Five days.

• 9:12David Hoffman?

  In the S and P 500, the S and P 500 has momentum and strength right now. And the economy is strong. Like the macro people, the macro commentators that I listen to, they're all like, yeah, economy is pretty strong. I am in the category of both the stock market and the crypto markets are in a secular bull run.

• 9:30Ryan Sean Adams?

  You know who agrees with you, David?

• 9:32David Hoffman?

  You?

• 9:33Ryan Sean Adams?

  The, the man of the week. No, not me. The man of the week, Tom Lee. Tom Lee. All right. We're gonna try to say his name at least 10 times this show, so.

• 9:39David Hoffman?

  Tom Lee, Tom Lee, Tom Lee, Tom Lee.

• 9:40Ryan Sean Adams?

  You already did it. Bitcoin price in the week, where are we at?

• 9:43David Hoffman?

  Bitcoin price actually down a percent and a half, down to 116,000 dollars, 700.

• 9:49Ryan Sean Adams?

  It's really down?

• 9:50David Hoffman?

  Yeah.

• 9:51Ryan Sean Adams?

  Oh my God, it's down.

• 9:52David Hoffman?

  It's down, down one and a half percent. Call that flat. Call that flat.

• 9:56Ryan Sean Adams?

  Well, one thing that's interesting about Bitcoin lately and the price lately is volatility. This is Eric Belchunis, you know, Bloomberg ETF guy, saying that since the launch of the ETFs, the volatility on Bitcoin has plummeted. You know, the 90-day rolling volatility is between four, is below 40 for the first time. It was over 60 when the ETFs launched. He's basically saying that the ETFs and institutionalization of Bitcoin have actually made it less volatile. What do you think about that?

• 10:23David Hoffman?

  Not surprising at all. That's always been the plan. And especially as you grow in size, like volatility just goes down.

• 10:29Ryan Sean Adams?

  I mean, as you get closer to gold's market cap, you become like gold's volatility, right?

• 10:34David Hoffman?

  Yeah, yeah, exactly. Yeah.

• 10:35Ryan Sean Adams?

  It's going to happen over time. And it does seem like it's, it's sped, that timeline has sped up a little bit more with the ETFs and the institutionalization. David, tell me about ETH. Price in the week.

• 10:44David Hoffman?

  ETH price up a percent and a half on the week. $3,830 is where we are, which is pretty good. What were we, if can you zoom out to the one month? I think we're like, kind of close to tying for the highs. Yeah, yeah, we almost touched 4K. We were like $100 higher, maybe 10 days ago.

• 11:01Ryan Sean Adams?

  Oh, I've got market cap on. Yeah, so like we, yeah, we 3,900, I guess, was the July 28th tie when we were feeling really good.

• 11:09David Hoffman?

  So like, we're kind of close to that number where like ETH can potentially just do something. You know, once it gets to like $4,000, then it's gonna like, there's gonna be some volatility, but it could be volatility to the upside. Like, we're getting, we're getting close to another, what would you call?

• 11:26David Hoffman?

  Impulse move, I think is what they call it in ETH.

• 11:29Ryan Sean Adams?

  Okay, I'll call it that. I feel my impulses going in directions. How about the ratio? What's that doing for your impulses, David?

• 11:35David Hoffman?

  The, the ratio is, it's impulses pulsing. 2%.

• 11:43David Hoffman?

  Moving on.

• 11:44Ryan Sean Adams?

  I'm gonna say I missed some of that because, you know, there's some lag on the video here, David. But, you know, I, I get, I get the cut of your gym.

• 11:51David Hoffman?

  Crypto market cap, $3.9 trillion is where we are at.

• 11:56Ryan Sean Adams?

  You know, on, back to the ratio, David, this is Chris Berninski, so it's not you saying this. This is Chris Berninski saying it. He said, "The ETH Bitcoin ratio doesn't look like it wants to stop." And he's like, "I actually, I listened to your Ben Cohen episode too, with Ben." And the synopsis is, he kept saying the ratio has to go home. Basically, it had to, you know, go to lows. It's gone home and now he thinks it's all up from there. So.

• 12:23David Hoffman?

  He thinks it's going to point 0, like 5, 0.06. And I think that that is where, once you get to point 0.5, 0.6, the traders will kind of get off of the trade.

• 12:34Ryan Sean Adams?

  Yeah.

• 12:35David Hoffman?

  But it could go higher. Like, there's another reason why it couldn't go higher than that.

• 12:39Ryan Sean Adams?

  No, I mean, he also said, "Once it gets to point 0.5 or 0.6, then he's gonna revise his numbers." I imagine he revised them upward after that.

• 12:47David Hoffman?

  Yeah, you could, you could.

• 12:48Ryan Sean Adams?

  But that's a sense for the direction. And if we're there, where are we in fiat terms? Is that like, you know, 6, 7K, something like that?

• 12:54David Hoffman?

  The holding, holding a Bitcoin price of like 120,000, let's call it, it's something like 7,000 ETH.

• 13:00Ryan Sean Adams?

  All right. But Bitcoin would be higher. Bitcoin would be like 150. So call it 8,000 or 9,000 ETH. Let's get to the main event. Okay, this is Tom Lee becoming the largest ETH holder in the world, at least publicly disclosed, probably the largest ETH holder in the world. This happened earlier this week on August 4th, Bitmine Immersion, that is Tom Lee's Ethereum treasury, I almost said Bitcoin treasury because this is Bitmine, but used to be, used to be a Bitcoin miner, now it's a ETH treasury company, buys another 208,000 ETH worth $757, uh, $757 million. Okay? That's a, that's a lot of ETH. That's a lot of ETH. You want to look at this on the, on the charts here? Who the hell sold $750 million of ETH to Tom Lee?

• 13:44Ryan Sean Adams?

  Not me. I would never do that. Not me. Where's that ETH coming from? Look at these buys, right? From, from, I guess this is, uh, July 8th, all the way to, um, August 3rd. Yeah. He has bought $3 billion worth of ETH. Okay, that's 833K worth of ETH. They're all chronicled here, they're all, you know, publicly traded SEC information. 833K of ETH, not, not dollars, 833K Ether has been purchased. Yeah, $3 billion worth. Right? So we went through this in the episode. I mean, he's close to 1% of all ETH supply, and he seriously does seem to want to get 5%.

• 14:27Ryan Sean Adams?

  And he's not, no one is size until they're above 1%. Everyone is small now. All of these ETH treasury companies are still small. Yeah, I mean, I mean, it's starting to make Sbet look a little small. I mean, Sbet's still got a healthy 2 billion, I guess, but. Yeah, you hear that, Joe? You gotta step up those buys, my man. Yeah. Tom Lee thinks you're, you're small. You know, but he's going at the, all of these treasury companies, but especially Tom Lee, he, he made the point in our interview earlier this week that, um, he is going at a pace that is 12X, the speed of Michael Saylor, MicroStrategy buying Bitcoin. So it took MicroStrategy about five years to get to 3%, and Tom Lee's already at 1%. Luxury of time since there was no three or four other Bitcoin treasury.

• 15:10David Hoffman?

  Treasury companies is like just Michael Saylor doing this for free.

• 15:14Ryan Sean Adams?

  Yeah.

• 15:14David Hoffman?

  With ETH, there's, you know, plenty of competition. And so there is absolutely a race to become memetically known as the ETH Treasury Company. Cause right now, like we do these episodes every week. We're like, there are so many ETH Treasury companies. There's another one this week we're going to talk about.

• 15:28Ryan Sean Adams?

  There is.

• 15:29David Hoffman?

  No one is known as memetically the ETH Treasury Company.

• 15:33Ryan Sean Adams?

  Yeah.

• 15:33David Hoffman?

  And that's what everyone is accelerating towards trying to get.

• 15:36Ryan Sean Adams?

  Well, it's very much a fight for liquidity and velocity, it seems like, because those become reflexive. We've seen that really with the Ether and Bitcoin ETFs. You know, the big ones just keep getting bigger. The Black Rocks and the Fidelities, they kind of consume the majority of the, the volume here. This is the new treasury company that you mentioned, another ETH Treasury Company. This one called Cosmos Health.

• 15:57David Hoffman?

  Global Healthcare Group?

• 15:59Ryan Sean Adams?

  The ticker is C O S M, has secured up to 300 million to launch a new Ethereum Treasury strategy.

• 16:07David Hoffman?

  That's our second healthcare group. So we had the A and like 180 Life Sciences, which turned into ETH Zilla. We have Sharpling Gaming. So we got one from the gaming world. We have now, this is our second healthcare company. Now Ethereum's just eating the world.

• 16:20Ryan Sean Adams?

  Yeah. I mean, I like, did you know anything about this Cosmos Health?

• 16:23David Hoffman?

  Fuck no. No way.

• 16:24Ryan Sean Adams?

  I feel like we like try to keep a pulse on what's going on in crypto.

• 16:27David Hoffman?

  A pulse.

• 16:28Ryan Sean Adams?

  Particularly these, these ETH Treasury Companies. And like, they just pop out without anyone I'm aware of knowing.

• 16:36David Hoffman?

  Yeah.

• 16:37Ryan Sean Adams?

  So a new one is there.

• 16:38David Hoffman?

  Question, well, how many more will there be? 300 million dollars is a lot.

• 16:42Ryan Sean Adams?

  Yeah. I, yeah, I mean, they're probably going to consolidate, et cetera. But a lot of these.

• 16:47David Hoffman?

  Where's 300 million dollars put them? That puts them right at number 10, 10th. That puts them in 10th.

• 16:53Ryan Sean Adams?

  Yeah.

• 16:54David Hoffman?

  Wow, 300 million dollars gets you 10th?

• 16:56Ryan Sean Adams?

  Here, here's a chart. This is Nate Drossi saying, wild stat, ETH Treasury Companies and spot ETH ETFs have each bought approximately 1.6% of the total current ETH supply since the beginning of June.

• 17:12David Hoffman?

  Hmm.

• 17:13Ryan Sean Adams?

  Does that impress you? 3% over 3.2% of all ETH supplies since the beginning of June.

• 17:20David Hoffman?

  Name of the game is momentum. We need momentum because we need this to happen again and again and again.

• 17:26Ryan Sean Adams?

  Why isn't price moving more than?

• 17:28David Hoffman?

  I don't know, dude. I don't know.

• 17:31Ryan Sean Adams?

  We're just gonna come back one week and it's gonna be a big step function change and we're gonna be above all time highs and?

• 17:38David Hoffman?

  I mean, the ETH price has basically made two moves in the last like three months and it's been flat other than these like two moves. And it was when ETH went from $1,500 and it jumped up to $2,500 and then it was flat. And then it went $2,500 to $3,500 and it's been flat around that amount. And so it's basically all of the gains of Ether has happened over these like very small amounts of time over the last like three months.

• 18:08Ryan Sean Adams?

  Yeah, at these, and this is what Tom Lee confirmed. He thinks it's gonna be another step function change or maybe a series of smaller step function changes. That's why it's so painful to be out of the market. That's why I don't, I'm not doing the Arthur Hayes thing where you trade in this market.

• 18:20David Hoffman?

  Yeah, imagine you just missed that one day where ETH goes to $5,000.

• 18:24Ryan Sean Adams?

  Exactly, exactly. I mean, I think there's another question, right? So if you're bullish on ETH, you can of course buy ETH, but how about buying ETH treasuries? And one thing that's kind of interesting here because we see all of these new treasury companies entering. The question is, are we getting into frothy territory? This is a great treasury holdings kind of dashboard put together by Blockworks. And I want to show you kind of MNAV here, David. So look at this, MNAV. We've got some of the Bitcoin and ETH treasury companies and Solana treasury companies, et cetera. But you could see that MNAV is actually like kind of close to one. Do you look at Sharklink?

• 18:57David Hoffman?

  They've all kind of approached one, right?

• 18:59Ryan Sean Adams?

  Right. And MNAV, of course, is the multiple valuation market cap of the assets that you have of your treasury assets itself. So like Sbet right now, 1.07. Very, very close to.

• 19:11David Hoffman?

  That's reasonable. That's not froth. And I think what's also being priced in here is that no one knows which one is going to be medically known as the ETH Treasury company, because that one would command a larger premium.

• 19:21Ryan Sean Adams?

  That's right. That's right. BNMR right now, so that's Tom Lee's vehicle, 1.35. If you go back to kind of the.

• 19:27David Hoffman?

  1.35 is pretty good by comparison.

• 19:29Ryan Sean Adams?

  Sure. If you go back to the gold standard, uh, Mike Stragi, 1.64.

• 19:35David Hoffman?

  That makes sense.

• 19:36Ryan Sean Adams?

  Now, Mike Stragi, they've been much higher at times, like 2.8 and above, I believe, in that territory.

• 19:43David Hoffman?

  Yeah, but that's why Michael Saylor has the ones goddamn Bitcoin.

• 19:45Ryan Sean Adams?

  Well, the question is, like, I mean, to me, I look at these, these MNavs. I'm actually like, this does not look frothy at all to me.

• 19:53David Hoffman?

  It does not look frothy. This is very reasonable.

• 19:55Ryan Sean Adams?

  If you were looking at frothy treasury market, it wouldn't, it wouldn't just be these new entrants all the time, which we are seeing. It would be like MNavs that are a lot higher than one.

• 20:05David Hoffman?

  Right.

• 20:06Ryan Sean Adams?

  So I'm looking at that and I'm actually like wondering, I mean, are some of these treasury companies buys? Like, were you compelled by the math that Tom Lee did in our episode? Which is, is basically like, well, staking alone, if you do kind of the multiples, MNav should be 1.6 for any ETH Treasury company. That's like staking their ETH. And then you add velocity and you add liquidity on top of that. And you get like 2, 2+, maybe even the 3-zone, the things get like really, really hot. Now, of course, the backdrop against this is they are doing the ATM kind of like things where they're diluting shareholders in order to purchase more of the treasury asset. And maybe they don't have access to the types of leveraged vehicles, really nice like debt vehicles

• 20:48Ryan Sean Adams?

  that Michael Saylor's magic does with, with what he's doing. But like, getting close to one, are some of these ETH Treasury companies a buy to you?

• 20:57David Hoffman?

  Yeah, and I do think like Tom Re, Tom Re, Tom Lee really has the momentum to command that premium, which is showing up. It's not showing up like that much. I will say, as a, I don't really know if this counts as froth, but I was on the subway in New York earlier this week, and I'm coming out of Williamsburg, which is known to be ETH central of New York, of the world, honestly. There's, we have Buy ETH spray painted on the ground on the sidewalk here.

• 21:24Ryan Sean Adams?

  What? Really?

• 21:25David Hoffman?

  Yeah. Oh, yeah. It's all over. Yeah.

• 21:26Ryan Sean Adams?

  Okay.

• 21:27David Hoffman?

  And I was just looking at some dude's phone who was sitting like next to me in the subway, and I see the Robinhood notification pop up saying S bet is up 15%. And I'm like, whoa, same dude. I got that same notification.

• 21:41Ryan Sean Adams?

  Does that mean he owns S bet, basically?

• 21:43David Hoffman?

  Probably. Or he's watching it. Yeah, exactly. Yeah.

• 21:46Ryan Sean Adams?

  Oh, that's great. All right. Well, that's, you know, that's that's signal of a sort, I think. I mean, on the other hand, if you want to look at the bear case, like, you do have a lot of treasury companies entering. This is a new Litecoin treasury company on the week. MEI Pharma is another healthcare company buying 100 million of Litecoin as a treasury asset.

• 22:04David Hoffman?

  With Charlie Lee and GSR as lead investors. And you know, you can do this, I'm not actually going to call this froth. What would be frothy if there was a Litecoin treasury that had a big MNAV? Like, if it comes out as like a 1.0 MNAV, then that is provably not froth.

• 22:22Ryan Sean Adams?

  Sure.

• 22:22David Hoffman?

  But if there's like, if Litecoin, the Litecoin treasury has like a 3 MNAV, then like, what the shit's going on here?

• 22:28Ryan Sean Adams?

  If you have a 1 MNAV, like, you've created nothing of value. You may as well not have done this.

• 22:32David Hoffman?

  Yeah, which means that you're like, why did you do it with Litecoin? Go do, go do it, go do something else. Go do it with a store of value, a real store of value, or something that spits out cash, one of the two.

• 22:42Ryan Sean Adams?

  Do you know Litecoin's number like 26 or something on the total, you know, top 100 coins or whatever?

• 22:47David Hoffman?

  It's got Lindy.

• 22:49Ryan Sean Adams?

  I mean, it's 26. There was a long time where it was like number two. Do you remember those days?

• 22:53David Hoffman?

  Yeah.

• 22:54Ryan Sean Adams?

  I remember number two, man. It was, it was like silver to Bitcoins gold.

• 22:58David Hoffman?

  Yeah, there's other days where like we would look at the top 10 in crypto assets and be like, "What is this industry?" I still have, no, I still very much do that, okay? We started an XRP. David, what do we have coming up next? Coming up next, we're going to talk about the Roman Storm verdict. It's probably perhaps one of the most important court cases in crypto history. Definitely a positive and a negative side to talk about for DeFi and privacy. Also, Trump signs an executive order so everyone can get crypto in their 401k. Ryan's going to talk about that. And then Bases Sequencer stopped producing blocks for 33 minutes. What happened? What was the impact to users and what are the lessons? We're going to talk about all of this and more, but first a message to talk about some of these fantastic sponsors that make this show possible, like starting with Uniswap. It's a browser wallet. It's a mobile wallet. It's the best place to do DeFi. Let's go hear it from Uniswap right now.

• 23:44David Hoffman?

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• 24:28David Hoffman?

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• 25:13David Hoffman?

  reward stations and buy bit launch pool. For MNT holders, every economic activity in UR drives value back to you, embodying the entire stack and future growth of this super app ecosystem. Follow Mantle on X at Mantle underscore official for the latest updates on blockchain for banking. That's X.com slash Mantle underscore official. So after almost a month long trial, we have the verdict in on Roman Storm's case. There were three counts that we were going to get the verdict for. There's counsel one, two, and three. One and three were a hung jury. So there was not a unanimous decision, which means there's just no outcome. It doesn't mean he's not guilty. It also doesn't mean he's guilty. The prosecutors, the attorney of the United States, they have the opportunity,

• 25:57David Hoffman?

  if they so choose, to retry counsel one and three. And the counsel one and three were the big ones. That was a conspiracy to like assist in money laundering and also conspiracy to avoid sanctions as it relates to North Korea. So those were the big ones. Those were the reasons why Roman Storm could have gone to jail for 35 minutes and there was no outcome there.

• 26:19Ryan Sean Adams?

  Wait, 35 minutes?

• 26:20David Hoffman?

  35, 35 years, excuse me. It's slightly, slightly different.

• 26:24Ryan Sean Adams?

  45 years, yeah.

• 26:24David Hoffman?

  The second count, which was being a money transmitter without a license, he was found guilty on and has a maximum of five years. Now, that is like, there's a lot to unpack there. The money transmitter thing is the thing that we have been fighting for against as an industry for a very long time. That is the same conversation as is the Uniswap front end or the Ave front end a money transmitter?

• 26:52Ryan Sean Adams?

  Or the protocol itself even.

• 26:53David Hoffman?

  Or the protocol itself. What is a money transmitter? And when we talk to Jake Shavinsky, when we talk to all the lawyers, when we talk to Coin Center, being a money transmitter or, or, you know, preventing our software from counting as money transmitters, so long as there's no custodian, there's no bank. If there's no custodian, if there's no one in control of the funds, it's always been crypto's position that they are not money transmitters and they don't To be one.

• 27:19Ryan Sean Adams?

  Can I just add, not just crypto's position, it's crypto's position as they interpreted the clear guidance from 2019 from FinCEN, who's the regulator responsible for all this money transmission, like legal framework. They basically said that if you are code that does not take custody of the funds, right? You're not a custodian in any way, then these things don't apply to you. That's what the 2019 guidance said and what the industry's been operating under. There's been no further guidance since besides this DOJ prosecution.

• 27:51David Hoffman?

  So this begs the question, why was Roman Storm found guilty of being a money transmitter without a license? And there's a glass half a full and a glass half empty perspective here. The glass half empty is, oh no, an open source software developer who did not have control of the funds was found guilty. And that sets the precedent. And now other open source software developers need to be cautious because they might find themselves guilty of the same thing based off of the precedent of this court case.

• 28:18Ryan Sean Adams?

  Basically, all of DeFi, basically.

• 28:20David Hoffman?

  All of DeFi, all of DeFi.

• 28:21Ryan Sean Adams?

  If you have a DOJ that is aggressive enough to prosecute any sort of DeFi, and there's like some bad actor that has used a protocol for a swap, for a transfer, for a trade, for, it doesn't even have to be privacy, right? Then all of that is suspect because all of those protocols and all of those front ends could be quote unquote money transmitters. That's how the prosecution is basically labeling Roman Storm. It's the same principle here.

• 28:45David Hoffman?

  Yeah, and it's bad that that precedent has been established. Oh, no, like every open source software should live in fear now. Like, that's kind of the negative perception here and why lawyers like Jake Shavinsky and others have said this is a really bad day for crypto.

• 28:58Ryan Sean Adams?

  Right.

• 28:59David Hoffman?

  Either I'm naive, which is very possible, or I'm just thinking about these things differently. I'm seeing this with a glass half full perspective, which is they can't arrest all of us. They can't go arrest Hayden Adams from Uniswap based off of this court precedent. They can't go arrest other software developers who run a front end or who write smart contracts. We have been fighting this as an industry and this was a procedural error, a legal error in the court case that we are. Are going to go and end fight as an industry. Now, when we talked to Peter Van Valkenburg on the episode yesterday, he articulated that there's actually two different versions of this like kind of guidance. There's the FinCEN guidance and then there's like the federal like version of money laundering.

• 29:44David Hoffman?

  You have to go watch the episode to get a clear articulation on it. But the there's two different interpretations. And so Roman Storm, because there's a confusing status of the interpretation of the FinCEN guidance, he's able to go appeal this and be like, look, there's two different interpretations here. I can't follow both because they conflict with each other. And so therefore I should be innocent. And that's totally going to totally be possible. The other way that this is good for the industry is that because that this was a legal error, we now have the surface area, the galvanization and the means to go fight this case and actually get a stronger win, a more clear win for the nature of open source development, software development in crypto than we were able to get prior.

• 30:29David Hoffman?

  Roman Storm, when he left the courthouse yesterday, he was asked by a reporter, Eleanor Tera, like, hey, Roman, how you feeling? He smiled. He said, the thing that he was charged for, the 1960 rule is bullshit and he's going to fight it. Which means he's going to continue to double down, not only for his own defense, but to set the precedent for the industry. So he's going to go appeal this and then we're going to get this thing reversed. And then hopefully we have enough motivation to get a law passed or something cleared up where this never ever happens again. So while the current status is this is set to bad precedent for open source software developers, I think that there is a very clear and open window for us to totally make lemonade out of this

• 31:13David Hoffman?

  in a very big way that makes this never relevant for any other software developer after Roman Storm ever again. And we can use Roman Storm to get that done. And he is volunteering his court case, his life to go and make this the case. So I'm pretty riled up. I'm pretty stoked.

• 31:31Ryan Sean Adams?

  Yeah, I'll sharpen the points of optimism here, just, you know, to go with the glass half full. Roman got to go free. Roman's flying home today to go hang out with his daughter. The prosecution basically said, okay, because he was convicted on this count, he needs to go to jail immediately. He could be a flight risk. And the judge completely rejected that. The appeal process, the next, to get this tried again, could take many months to years, right? And the prosecution, the DOJ, basically wanted to have Roman Storm spend all of that time in jail. And the judge was not having it. And so Roman Storm was able to use his house as collateral to actually, you know, get out and be free on bail to fight again in court. It will be appealed. The appeal is very likely to go in.

• 32:15Ryan Sean Adams?

  And I think you're very right, David, that in the appeal, there's a new chance at interpretation. Basically, the judge for this case said, hey, you know, the rulemaking of FinCEN said it doesn't really apply because there's some other criminal statutes that Roman could still apply, like be liable for here in this case. And basically pushed that interpretation onto the jury. So the jury was somewhat constrained in terms of, you know, how they had to judge this case based on like the fact that, oh, okay, criminal, like Roman Storm non-custodial software could actually be a money transmitter. The judge's interpretation really set the framework for that. And so kind of pushed the jury in a specific direction.

• 33:00Ryan Sean Adams?

  The next time around with a different judge, provided you get a judge that has a, you know, like a more favorable, more liberty, like centric interpretation of the code here, could, it could be a completely different trial and Roman Storm could still score a big win. And in the appellate court, this is my understanding, that's where precedent is truly cemented. Right now in these lower courts, it's kind of like, it's more like guidance interpretations. It's not cemented precedent. There's also the case, David, this could go all the way to the Supreme Court. So the fight that you were talking about, this could be like a multi-month, multi-year-long fight. And there's also a get out of jail free card that I didn't know about quite clearly. But apparently there's a piece of legislation on the Clarity Act

• 33:44Ryan Sean Adams?

  that would actually cement into law that non-custodial DeFi

• 33:49Ryan Sean Adams?

  Smart contracts are not money transmitters. And recall, the Clarity Act passed by the House, now it's going to the Senate. We could actually enshrine this in law as well. So that would not affect Roman Storm because it wouldn't be retroactive. But it would, like, moving forward, cement this into kind of like hard code it in the US law system. So there's a lot of cause, I would say, for optimism. That said, man, it's disappointing. Like, if they had just found him not guilty on that, on that second count. Like, we would be feeling very good about this.

• 34:23David Hoffman?

  It would be more simple that way. It'd be all over. We would all be popping champagne and that'd be great. And Roman would be like, okay, we're done here. And yeah, you know, that's not a bad future. That's not a bad version of the timeline to be in. The timeline, the version of the timeline that we could be in could end up in a stronger, like ultimatum, a better ultimatum with more work and like more suffering to get there.

• 34:49David Hoffman?

  And so I continue to look at this in a glass half full perspective.

• 34:53Ryan Sean Adams?

  Now, that is all dependent on our agency, I believe, as an industry. And so maybe I want to leave with this Jake Trivinsky take, which, you know, he basically says, if the Trump administration wants the USA to be the crypto capital of the world, then the DOJ must not be allowed to retry the two deadlock charges. That's the other thing is still those, those charges where he was found, it wasn't a not guilty, it was a hung jury, so they can still charge him, right? And if the DOJ continues.

• 35:16David Hoffman?

  And we are waiting with like bated breath to hear if the DOJ is going to try and resume those. And if that does, then, then I'm like, that's actually much worse place to be.

• 35:24Ryan Sean Adams?

  That's bad, right? We'll have an update on that soon. But in general, Jake says this is existential. If you've been sleeping on the section that 1960, that's the, the count he was actually found guilty on, wake up. So it does depend very much on the actions of us in our industry to like, you know, like push this forward, make our voices heard.

• 35:42David Hoffman?

  Yep. So if Roman is volunteering, like I said, to fight this further, he's going to appeal this both for himself and for the industry. And we as an industry are going to need to support him in that. And what that looks like is donations. And so there's going to probably, I'm assuming, going to be another call for donations. Ryan and I and Bankless, we will be donating. We're going to ask you guys to donate in the future. So prepare yourself for those requests.

• 36:04Ryan Sean Adams?

  Yeah, yeah. All right, next up, something a bit more bullish. An executive order. You can now have crypto in your 401K, David. So this is Trump. He is signing an executive order today. So it should be signed by the time people listen to this. That tells the Labor Department and the SEC to rewrite their rules so that cryptocurrency can appear as a regular investment option inside of 401Ks. There is a lot of funds in America, in the US, in people's 401Ks that will be unlocked by this.

• 36:37David Hoffman?

  Those are big numbers.

• 36:38Ryan Sean Adams?

  Yes.

• 36:39David Hoffman?

  Like trillions?

• 36:40Ryan Sean Adams?

  Yeah, yeah. You know, I should have had the number.

• 36:42David Hoffman?

  Trillions?

• 36:43Ryan Sean Adams?

  Go chat GPT, guys. The number's here.

• 36:45David Hoffman?

  I'm doing it.

• 36:46Ryan Sean Adams?

  Let me ask you, while you're doing that, do you have a 401K?

• 36:50David Hoffman?

  Don't we have that set up for the company?

• 36:53Ryan Sean Adams?

  Yes, we have one set up at Bankless. Is that your only 401K? Or have you ever had like previous 401Ks?

• 36:58David Hoffman?

  I think, yeah, when I got into crypto, I liquidated my 401Ks and I bought ETH.

• 37:02Ryan Sean Adams?

  Okay. So you have a 401K with Bankless. Do you recall like how difficult it is to actually get crypto in the 401K?

• 37:11David Hoffman?

  It's a huge pain in the ass.

• 37:13Ryan Sean Adams?

  It's a huge pain in the ass. And if you go over 5% of, at least our Bankless 401Ks, right? We tried to find, by the way, the most crypto favorable 401K provider that we could.

• 37:24David Hoffman?

  Yeah, it constrains you to a very low number.

• 37:27Ryan Sean Adams?

  Yes. If you go over 5%, they send warnings, they're like freaking out. It's like, hey, like your 401K, you know, proportion is over 5% of the portfolios in crypto. You're in a super risky asset. Like, you sure you want to continue this? Like, I get those emails all the time. You get those emails? You probably don't. You probably don't.

• 37:43David Hoffman?

  I don't check my email.

• 37:44Ryan Sean Adams?

  They're sending them.

• 37:45David Hoffman?

  Yeah, I'm like, yeah, let's pump those numbers up, baby.

• 37:47Ryan Sean Adams?

  And that's because...

• 37:48David Hoffman?

  The answer is $8.7 trillion, Ryan. It's in the aggregate United States. Citizens 401k portfolio.

• 37:54Ryan Sean Adams?

  Okay, so that's a lot of, that's a lot of trillions. And, and the current state is there's not an outright ban. So some people listening are like, well, actually I've been able to get crypto assets inside of my 401k. But here's, like, the, the problem is for most, most 401ks, the default is no crypto. Because the Department of Labor in 2022, under the Biden administration, issued a bulletin warning fiduciaries to use extreme caution, they said, with crypto. So this was like a chilling effect on our, all 401k providers. And so employers were like, we're not going to offer that as an option. So there are some workarounds, like prior to this executive order, where like you can buy Bitcoin through a self-directed brokerage window. Like Fidelity, for instance, has like a separate digital assets account

• 38:38Ryan Sean Adams?

  that you have to jump through a whole bunch of hoops to go open. And it's only if your employer has opted in and if you've accepted the, the strict caps on how much you're actually going to contribute as a portion of crypto in your 401k. There's also extra fees, so it's like not the default at all, okay? Post this executive order, crypto assets are going to be able to sit side by side. All of your mutual funds, your traditional stocks, all of your existing equity assets, with all of the things you see in the 401k. So it's not separate container, like special case. It's just like default with all of the other assets. So that is a big deal. And if you're telling me it's eight trillion in capital,

• 39:21Ryan Sean Adams?

  all of that will be like available for individuals to make their own individual decision as to how much of their 401k they want to allocate to crypto, if any. So this is a big deal and it's kind of under the radar. Like you were saying in the intro, like you didn't see this coming, you didn't expect it.

• 39:39David Hoffman?

  Yeah, this happened.

• 39:40Ryan Sean Adams?

  Yeah, it just kind of happened and it can happen by executive order. Now, David, this is not going to happen right away, okay? So what has to happen is it has to go through all of TradFi. The SEC has to tweak some rulemaking and then the platforms have to adopt it. So expect this, you know, the Fidelities and Black Rocks of the world. Expect this over the next six to 12 months. If you have, and if, look, if you're employed somewhere with a 401k, start asking your employer about it.

• 40:07David Hoffman?

  Be annoying about it.

• 40:08Ryan Sean Adams?

  Yeah, be annoying about it and that might make adoption happen even sooner.

• 40:12David Hoffman?

  Okay, so there is currently $8.7 trillion in all 401k portfolios inside the United States. Estimated new contributions for 2025 will be between $1 and $1.4 trillion gets added. And so that's the flow, right? The flow into 401k. Some percentage of that is going to go into crypto assets like Bitcoin and ETH. And that's why this is so cool is because it's a constant flow of bids into crypto, into the blue chips. And that's just a wealth effect for crypto. And so being in the 401k is just like, you've made it. You've get the boomer bid, the retirement bid. And so you're always, every single week, just everybody's like, paychecks, 15%, 10%

• 40:56David Hoffman?

  goes out of their paycheck, goes into a 401k. And especially as the zoomers grow up and millennials grow up, like these generations are going to allocate, you know, more, more to crypto than the average.

• 41:09Ryan Sean Adams?

  It's all of that. It's also like the education. I mean, all of these, all of these brokerage 401k platforms are going to start educating people on crypto and it's going to be, seem like a normal investment asset, just like the rest of the equities. David, the base chain halted block production for a half an hour, I believe. What happened here?

• 41:27David Hoffman?

  Yeah, so this happened on Tuesday. Base's primary sequencer, the high throughput sequencer, started lagging due to a spike in on-chain activity. In order to maintain uptime, the system tried to do a handoff to a backup node, but that backup node wasn't fully set up apparently, and that halted in transaction processing. And so then I think it just broke at that point. So downtime for 33 minutes, transactions couldn't happen, deposits withdrawals, all app activity just froze, liquidity on D5 froze. And so the base core team had to manually transfer block production back to a healthy sequencer node, which took 33 minutes. No funds were lost, nothing was compromised, it just started working again. And there was a question in my replies, which is like,

• 42:10David Hoffman?

  "You ETH people always talk about Ethereum uptime all the time, 10 years of Ethereum uptime, and then base goes down. What the hell is the deal with this?" Like, if you, if you guys are selling Ethereum to Wall Street, and you're selling it through the uptime lens, but then base goes down, like, how do you, how do you square these two things? I'm so glad you asked, Ryan. Here's my answer. My answer is, actually, base is, is not Ethereum. Base is actually Wall Street. Coinbase is a Fortune 500 company that's building a Layer 2 on Ethereum. It's a publicly traded company, like, listed on the NASDAQ, and they're building a Layer 2 on Ethereum because Ethereum has 10 years of uptime. Like, Coinbase, they don't care if their chain goes down.

• 42:55David Hoffman?

  I mean, they definitely do care. They're gonna get that thing back up as fast as possible, but they own the network, they own the chain. So long as Ethereum stays up and running, and they don't have a dependency on Ethereum, then they're totally fine managing the centralization and the potential downtime of the base chain. And that's also true for Robinhood, and that's true for any other Wall Street entity that wants to go to Ethereum and build on Ethereum's 10 years of 100% uptime. That's my answer there.

• 43:20Ryan Sean Adams?

  Yeah, there's more I could say there. I do think that the modular L2 design does make Ethereum much more fault tolerant, right? Individual Layer 2 could go down, but the entire Ethereum ecosystem does not have to go down. And it's almost expected that if you're really pushing on high-frequency throughput, then things are gonna break.

• 43:40David Hoffman?

  If you're not going down, you're actually not pushing hard enough on your throughput.

• 43:43Ryan Sean Adams?

  Maybe. Look, maybe you also have some, like, kinks you have to work out, and some engineering you have to, you know, like I said, that could be another explanation. But at some level, the Layer 2s are pushing so fast and so hard so that Ethereum Layer 1 doesn't have to, right? And it can be kind of the thing that never goes down. Anyway, we got more to cover, David. The first ZK Prover network is going mainnet. That is succinct. It's up and running. You gotta tell us about that. Also, MetaMask is releasing a "stablecoin?", question mark? And China issuing warnings about "Worldcoin", and putting your eyeballs into the machine.

• 44:16David Hoffman?

  We'll cover all that and more, but first, we want to thank our sponsors, including Frax. In the Wild West of DeFi, stability and innovation are everything, which is why you should check out Frax Finance. The protocol revolutionizing stablecoins, DeFi, and Rolex. The core of Frax Finance is Frax USD, which is backed by BlackRock's institutional Biddle Fund. Frax designed Frax USD for best-in-class yields across DeFi, T-bills, and carry trade returns all in one. Just head to frax.com, then stake it to earn some of the best yields in DeFi. Want even more? Bridge your Frax USD over to the Fraxtill Layer 2 for the same yield plus Fraxtill points and explore Fraxtill's diverse Layer 2 ecosystem with protocols like Curve, Convex, and more, all rewarding early adopters.

• 44:56David Hoffman?

  Frax isn't just a protocol, it's a digital nation powered by the FXX token and governed by its global community. Acquire FXX through frax.com or your go-to Decks, stake it, and help shape Frax Nation's future. Ready to join the forefront of DeFi? Visit frax.com now to start earning with Frax USD and staked Frax USD. And for Bankless listeners, you can use frax.com/r/bankless when bridging to Fraxtill for exclusive Fraxtill perks and boosted rewards. The succinct prover network is live. We officially have the mainnet of succinct. What is succinct? What is a prover network? I'm going to call this just like ZK infrastructure as a service. There are people out there who need ZK computations done by a decentralized network.

• 45:41David Hoffman?

  Succinct is that decentralized network. So for any demand for a ZK computation, succinct will just do that. And so it connects kind of buyers and sellers of proofs. So if you need a proof verified, you can just go to succinct. And so this is kind of like this critical piece of ZK infrastructure to make ZK accessible. Because if you have a ZK app, so you're building an app and you need some sort of ZK cryptography, you need people in the backend to do the verification and the proving of that ZK app. But as an app builder, you don't want to think about that. But succinct is this decentralized network of provers that will just allow you to plug in your app into this network of provers that has the uptime of Ethereum, that's the goal. And so ZK as a product can just work.

• 46:26David Hoffman?

  All the time as an app builder without any app builder thinking about like building a prover network behind it. That's kind of like the technical explanation, semi-technical explanation for what's going on. How would you articulate this, Ryan?

• 46:38Ryan Sean Adams?

  Well, to me, the big use case for like when you'd need a prover and this type of network is actually Ethereum validation. So as Ethereum moves to the kind of the next level of scaling up the layer one, all of the clients are going to turn to ZK clients, essentially. So if you're a validator, you can run a ZK validator, Ethereum layer one validator instead. And rather than replaying all of the transactions, that's a bottleneck. That's why we only have, what, you know, 20 transactions per second. With a ZK EVM, you can essentially just submit a proof. You don't have to replay all of the transactions. And in submitting the proof, you can either run a prover at your house, let's say, if

• 47:22Ryan Sean Adams?

  you're a home validator. But running a prover at your house requires some specialized hardware. You know, think ASICs that are going to consume a lot of power, a lot of energy, maybe like, you know, another, a Tesla or something, you know, battery power. So rather than run that at your house, you could just outsource that proving to a prover network. So essentially, this technology is going to be pivotal for scaling Ethereum. And I think-

• 47:46David Hoffman?

  Ethereum would be a customer of succinct's prover network or Ethereum node operators who are running the ZK nodes would be.

• 47:54Ryan Sean Adams?

  Exactly. So it's very much an enabling technology into scale. Do you know how at one point in time, individual validators were doing the block building? And now we have block building specialists as part of the block production, like supply chain for Ethereum. We're going to have proving specialist networks like succinct that fill that role. So this is a huge part of Ethereum scaling and it's incredible that succinct has come so far so fast. I think Vitalik in our episode said, this is all happening five times faster than he actually thought ZK would happen. So it's huge.

• 48:27David Hoffman?

  I kind of think this is like, I don't know if I'm going to call this a chat GPT moment for ZK, but it just does so much hard work in the background. It solves so much hard work to make ZK accessible to people. So I expect with the arrival of something like succinct, we're just beginning to be able to find ZK embedded in our apps more and more and more. And it's going to become just a lot more tangible to people because a lot of the hard work is done because that's what succinct has done.

• 48:53Ryan Sean Adams?

  Did you have a token? So it's the prove token. Doing OK. Fully diluted valuation of a billion dollars right now.

• 48:59David Hoffman?

  One billy, one billy.

• 49:01Ryan Sean Adams?

  David, the SEC said that liquid staking tokens are not securities. So they finalized this. They put out a ruling, I believe, formal statement that LSTs are not security offerings. So this is pretty pivotal. It allows integration of liquid staking tokens, like, you know, a staked ETH or something like that, into ETFs and other financial products. This is funny from Jesse Powell, right? Says, "This had been a question for a long time."

• 49:30David Hoffman?

  Can I get a refund?

• 49:31Ryan Sean Adams?

  He goes, "Can I get a $30 million refund in response to tweeting this?"

• 49:40David Hoffman?

  What's the statute of limitations on the SEC? Like, seven years?

• 49:43Ryan Sean Adams?

  Yeah, I don't know.

• 49:44David Hoffman?

  I think if you change the law to make something legal that you took a $30 million fine on, you have to give the money back.

• 49:51Ryan Sean Adams?

  Yeah, so the context here, if people don't remember, I don't know, was this 2024? Jesse Powell and Kraken had to pay the SEC $30 million for, because they enabled staking on Kraken. And now, because, you know, the SEC alleged that, oh, if you're doing staking ETH on Kraken, that's a security. And now, 18 months later, they're saying it's not a security.

• 50:13David Hoffman?

  It's legal now, yeah.

• 50:14Ryan Sean Adams?

  But they still had to pay $30 million!

• 50:16David Hoffman?

  Thanks for your money. Thanks for your $30 million, Kraken. Wow.

• 50:20Ryan Sean Adams?

  Oh, my god.

• 50:21David Hoffman?

  I'm gonna call that a racket. That's what a racket is.

• 50:24Ryan Sean Adams?

  Yes, absolutely bizarre, man. Metamask is launching a stablecoin? Question mark? What's going on here?

• 50:30David Hoffman?

  I mean, question mark, I think it's kind of the news. MMUSD. Metamask USD is gonna be a US dollar pegged stablecoin to enable more reliable payments and DeFi interactions with Metamask services, including swaps, payments, yields, and protocols like AVE, partnered with Stripe on this one. It's still in a proposal phase. Apparently, there's some governance that needs to happen here. But yeah, Metamask getting a token. Interesting case study to see how a...

• 50:57Ryan Sean Adams?

  Not the token I wanted.

• 50:59David Hoffman?

  Not the token, no, excuse me. Technically, they are getting a token. It's just not, it doesn't go up or down. It just stays flat at a dollar. It's gonna be interesting to see, like, because there's the whole, there's some people out there, they're like, oh, everyone's gonna have a stablecoin. And then there are other people out there, it's like, not everyone's gonna have a stablecoin. So the success of the Metamask stablecoin, or not, will kind of be indicative of how many stablecoins there will be.

• 51:23Ryan Sean Adams?

  I think we'll get a stablecoin explosion for, you know, pretty soon.

• 51:26David Hoffman?

  A quantity of stablecoin explosions?

• 51:28Ryan Sean Adams?

  Yep, in the next year or two, and then it'll kind of thin out. It's like the first fragmentation, you know.

• 51:33David Hoffman?

  Heather's just like the Bitcoin of, of stablecoins.

• 51:36Ryan Sean Adams?

  Yeah, something like that. Everyone's going to try their hands. This is MetaMask. Why not?

• 51:39David Hoffman?

  Sure.

• 51:39Ryan Sean Adams?

  Post-genius act, it's legal. You may as well give it a try. Speaking of giving it a try, Barry Silbert is back on Grayscale. All right, so this is.

• 51:46David Hoffman?

  Back giving it a try.

• 51:49Ryan Sean Adams?

  So Barry Silbert, if you don't remember, was the chairman, I believe, of Grayscale. I think he stepped away in the, I'll call it, fiasco of the

• 51:59David Hoffman?

  Right.

• 51:59Ryan Sean Adams?

  Grayscale Bitcoin Trust breakdown and all of the things that happened there. My God, that seems like a distant memory.

• 52:05David Hoffman?

  Yeah, that was, that was an era ago.

• 52:07Ryan Sean Adams?

  But he's coming back. So I am honored to rejoin the Grayscale board at a defining moment for both the company and the broader digital asset ecosystem. There's word here that this is maybe setting up for an IPO, Grayscale-type IPO, which I could totally see.

• 52:23David Hoffman?

  That checks out to me.

• 52:25Ryan Sean Adams?

  Yeah.

• 52:25David Hoffman?

  That definitely checks out.

• 52:26Ryan Sean Adams?

  Barry Silbert's back. Oh, that's news.

• 52:28David Hoffman?

  Welcome, welcome back Barry Silbert. So this is a headline out of the block this week. China warns world coin-style iris data collection for crypto poses national security threat. Now, I thought this was, the juxtaposition here, I thought, was pretty interesting. When China says something is a national security threat, I'm like, nice.

• 52:47Ryan Sean Adams?

  That's like, oh, I should look into that.

• 52:49David Hoffman?

  Yeah, I'm like, oh, that sounds pretty cool. That sounds pretty sick, actually. Yeah, specifically. And so the headline says, "World coin-style iris data collection." There's only one company doing iris data collection out there. And honestly, it's not really data collection, so I.

• 53:06Ryan Sean Adams?

  Well, it is.

• 53:08David Hoffman?

  It's, they create a hash of your iris, which, yes, is data, but they don't collect and store pictures of your iris. That's the whole world coin thesis. They.

• 53:17Ryan Sean Adams?

  It's privacy preserving.

• 53:18David Hoffman?

  It's privacy preserving. They take a picture of your iris, they make a hash of it, they throw away the picture, and then they just have the hash. They don't actually collect the data because that's not what WorldCoin wants. They just want the hash. And so actually, I think like either China is getting, somebody's getting this wrong. China, I don't think it's getting this wrong. They claim that the data could be exploited for espionage. You know, biometric data once leaked can't be changed.

• 53:38Ryan Sean Adams?

  National security risk, right?

• 53:40David Hoffman?

  National security risk, right. Privacy risk. The ministry mentioned past incidents where leaked biometric data was not, was used by foreign intelligence for spying and hacking not related to WorldCoin, probably something like 21, 21andme, the actual DNA company which does collect data. There are no bans yet. Officials just recommended being careful and sharing biometric data and understanding how it will be used, stored and handled. I'll tell you how WorldCoin uses, stores and handled your data like I just did. They take a picture of your iris, they throw it away and they make a hash of it. And anytime you need to restore access to your world, they just verify, they compare the hash. And so in terms of privacy, I think it's very beneficial. The reason why I'm like on this is because we just had Alex on the episode and he talked about his

• 54:22David Hoffman?

  whole, you know, he wants world to be like an internet native citizenship. And then, and then the juxtaposition, when China says that this is a threat to national security, I'm like, yeah. Yeah, of course, we're trying to make like a self-sovereign citizenship on the internet. Yeah, that does butt up against authoritarian states like China.

• 54:43Ryan Sean Adams?

  It's like the CCP taking a principled stance against data collection, right? Is that, are you really going to do that? No, like data collection, like no, we don't, we don't do that. And you just sort of, you wonder, it's just because it's data collection that they can't control? And they're fine if the government does it, right? They're fine if a tech company that they can control and get access to does it. But if it's something that's hashed, if it's something that they can't control, maybe that's why they're against it. I think that's the, that's the take you're, you're linking here.

• 55:12David Hoffman?

  That's right, yeah. National security threat doesn't mean a threat towards individual sovereignty and freedom. That's specifically just from the perspective of the state.

• 55:22Ryan Sean Adams?

  Yeah, I think I think that's what it is. I think that's what's actually going on. Although, if you just read a headline for this and you run this by an army and like you're like, "Wait, Worldcoin's doing what?" I mean, it still, it still feels dystopian. I mean, they're taking pictures in my eyes. Unless you kind of know the the details.

• 55:38David Hoffman?

  Right.

• 55:38Ryan Sean Adams?

  It's just like, that's a narrative bar that Worldcoin's, I think, gonna have to get over. Speaking of that, David, bars, Coinbase ad was barred and banned from the UK. I don't know if you saw this. Well, maybe we'll play the the full ad in the moment of Zen.

• 55:54David Hoffman?

  We will disappear to the ad and we will leave you with an ad from Coinbase. Because it's a good ad, it's pretty entertaining. It's an entertaining piece of advertising.

• 56:02Ryan Sean Adams?

  Alright, so you guys will hear it to the end of the episode. You'll hear the the full ad. I guess even if you live in the UK.

• 56:07David Hoffman?

  You kind of need to watch it because it is a like dance and skit thing. It's a song, so you'll hear it too, but visually, it's it's it's nice to watch.

• 56:15Ryan Sean Adams?

  Well, basically, to describe it, it's a, the ad is titled "Everything is Fine", and it shows like kind of people in the UK, you know, leaky ceilings, empty supermarkets, sky high prices, and they're all singing the song like "Everything is Fine", basically implying like, "Oh, the financial system, things aren't going well, you know, I feel inflation when I pay for things and somebody's not telling me something." So, this, uh, UK regulators actually banned it. They said it was too political on the grounds...

• 56:42David Hoffman?

  I mean, it's talking shit. It's talking shit about the UK.

• 56:46Ryan Sean Adams?

  It's like, it's a commercial, guys, like, and basically misleading impression, lack of warning, irresponsible anti-system framing.

• 56:54David Hoffman?

  It's definitely insulting the nation-state apparatus.

• 56:58Ryan Sean Adams?

  And you can't do that in the UK?

• 57:00David Hoffman?

  Yeah, apparently not. Apparently not. Apparently not.

• 57:03Ryan Sean Adams?

  I mean, Coinbase would say that the the ad was not baseless because 44% of all adults in the UK are living in financially vulnerable conditions here. But it did not have FCA approval, so that's apparently a three-letter agency in the UK that can give things approval or not before they're aired on public broadcast. This was, um, there was some debate about this. So, um, some of the people in Parliament, UK Chancellor George Osborne, Osborne said, "The UK has been left behind the cryptocurrency boom." Is danger of missing a second wave of demand. We're doing things like we're banning this. And so all this caused Brian Armstrong to make a statement needing to update the system and improve society is not a political statement on either party in the UK. It's not specific to the UK.

• 57:44Ryan Sean Adams?

  It's a statement about how the traditional finance system is not working for many people and how crypto represents a way to improve that. We welcome the attacks and any other attempts to censor this message as it just helps it spread. There you go. Case in point.

• 57:57David Hoffman?

  Because of all the raveling, now we're going to show you the ad because it's pretty funny.

• 58:02Ryan Sean Adams?

  Got to let you know, of course crypto is risky. So is all finance. You could lose what you put in, but we are headed west. This is frontier. It's not for everyone, but we're glad you're with us on the make this journey. Thanks a lot.

• 58:14Speaker 02

  We ain't got no troubles, no reason to complain. Cause here in great old Britain, we just love it when it rains.

• 58:20David Hoffman?

  Morning.

• 58:21Speaker 02

  We're cozy here at home.

• 58:22Speaker 03

  Even though it's not our own. But wait a few more years and you can see. Everything is just fine. Everything is grand. Your life can get a better when you're living by the letter in this pleasant land. Everything is just fine. Everything is great. The streets can't get cleaner. Nor the rat meat any leaner.

• 58:52Speaker 02

  No, life is just for straight.

• 58:56Speaker 03

  Everything is just fine. These fish fingers are a steal. Prices up a smidge. Just a hundred quid a meal. Empty purse. But hey, could be worse if there was nothing in the fridge.

• 59:14Speaker 02

  Strategically alignment means I get to work for myself. Yeah.

• 59:20Speaker 03

  Paying up by your degree with tips from each delivery. Excuse me, sir, I have your tandoori.

• 59:38Speaker 03

  Everything is grand. Your life can get no better when you're living by the letter in this pleasant land. Everything is just fine. Everything is great. We're soldiering on, we're doing our best.

• 59:58Ryan Sean Adams?

  We're off to Dubai. It's time to jump ship.

• 1:00:00Speaker 03

  We're tying in our belts with a stick of honey. Cause everything, everything, everything is just fine.