ROLLUP: SBF vs Caroline Ellison | Sam Altman on Joe Rogan | ETH Predictions

Bankless Weekly Rollup 2nd Week of October ----- 🎁 Check your wallet with our brand new tool: Claimables https://bankless.cc/GetClaimables ------ 📚 a16z Startup School | Applications are now open! https://a16zcrypto.com/crypto-startup-school/?utm_source=bankless&utm_medium=podcast&utm_campaign=css_london&utm_id=css https://a16zcrypto.com/crypto-startup-school/?utm_source=bankless&utm_medium=podcast&utm_campaign=css_london&utm_id=css ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE ⁠https://k.xyz/bankless-pod-q2 🦊METAMASK PORTFOLIO | MANAGE YOUR WEB3 EVERYTHING ⁠https://bankless.cc/MetaMask ⚖️ ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum 🗣️TOKU | CRYPTO EMPLOYMENT SOLUTION https://bankless.cc/Toku 🦄UNISWAP | ON-CHAIN MARKETPLACE ⁠https://bankless.cc/uniswap 🔗 CELO | CEL2 COMING SOON https://bankless.cc/Celo ------ TIMESTAMPS & RESOURCES 0:00 Intro 3:30 Markets 6:30 Inflation https://www.cnbc.com/2023/10/12/cpi-september-2023.html 11:00 Why Americans Have Crypto https://twitter.com/jp_koning/status/1711714224664186943 14:05 ETH Validator Queue https://www.validatorqueue.com/ 16:45 Friend.tech Surpassed Bitcoin https://twitter.com/tokenterminal/status/1710024292992163889 17:45 Tron vs Bankless https://www.bankless.com/tron-trx-bull-bear 22:00 ETH Predictions https://www.theblock.co/post/255860/ethereum-eth-price-standard-chartered-bank 27:00 SBF Trial https://compote.slate.com/images/c8708922-4b13-418c-a8be-af557e45079e.jpeg 28:20 Gary Wang https://twitter.com/emilydparker/status/1711797258302243182?s=46 33:00 Caroline Ellison vs SBF https://www.nytimes.com/2023/10/10/technology/caroline-ellison-sam-bankman-fried-trial.html 41:30 Thai Escorts (Not Taiwanese, David!) 44:05 SBF’s Ambitions https://x.com/innercitypress/status/1711806222117027840?s=20 https://twitter.com/byzgeneral/status/1711864012567093287 47:45 Hamas Crypto Accounts https://www.theblock.co/post/255679/israeli-authorities-have-frozen-hamas-linked-crypto-accounts-report https://www.wsj.com/world/middle-east/militants-behind-israel-attack-raised-millions-in-crypto-b9134b7a 50:22 Critical Context https://twitter.com/samlyman33/status/1712209368450511162?s=46 51:33 Getting Drafted https://twitter.com/AmMuroch/status/1711980124021669941 52:30 Ray Dali on War https://www.linkedin.com/pulse/another-step-toward-international-war-ray-dalio/ 53:30 Farcaster Goes Permissionless https://twitter.com/dwr/status/1711828728865849505 54:00 Five Shades of Lido https://notes.ethereum.org/@mikeneuder/magnitude-and-direction 58:10 Sam Altman on Joe Rogan https://ogjre.com/episode/2044-sam-altman 1:01:05 Trader Joe Getting Sued https://twitter.com/Blockworks_/status/1711705702287200497?s=20 1:02:00 Uniswap zkEVM https://x.com/okutrade/status/1709916468219981977?s=20 1:04:30 Questions from the Nation https://bankless.cc/GetClaimables 1:08:10 When to Sell https://twitter.com/cburniske/status/1711064578212475360?s=20 1:10:10 Cars vs Shoes https://twitter.com/0xMidnight/status/1710409447187632611 1:10:50 What David’s Bullish On https://www.bankless.com/vampire-season-diva 1:15:50 What Ryan’s Bullish On 1:21:00 MEME of the Week https://twitter.com/Crypto_McKenna/status/1711851523657830561 ------ 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.

• 0:00Ryan Sean Adams?

  David, look at her surrounded by all these reporters.

• 0:03David Hoffman?

  Yeah.

• 0:03Ryan Sean Adams?

  Crazy.

• 0:04David Hoffman?

  That's intense.

• 0:05Ryan Sean Adams?

  Absolute circus.

• 0:06David Hoffman?

  Very intense. So Caroline Ellison is like the only person closer to Sam Bankman-Fried than Gary Wang. Like, not only was she in charge of Alameda, but like Sam Bankman-Fried and her were dating. They were sleeping together in 2019. They were dating in 2021. Then they broke up, but they were still together. Yeah. And so like, you know, very incestuous business dating, sleeping together relationship.

• 0:28Ryan Sean Adams?

  Incestuous.

• 0:28David Hoffman?

  Also in the Bahamas, like, well, the business relationship. Everything's just a mess.

• 0:33Ryan Sean Adams?

  They're not related, though. Let's just clear that up.

• 0:36David Hoffman?

  They're not related. Yes. There's many other things, like a lot of convoluted paths. They're not related.

• 0:43Ryan Sean Adams?

  Bankers Station, happy Friday morning. It is the second Friday of October, or should I say Flat-ober, David? It's looking pretty flat out there in the markets.

• 0:51David Hoffman?

  It's down.

• 0:51Ryan Sean Adams?

  No?

• 0:51David Hoffman?

  It's sad.

• 0:52Ryan Sean Adams?

  Oh, okay.

• 0:53David Hoffman?

  Nice try.

• 0:53Ryan Sean Adams?

  Well, I haven't looked at the markets. You just put them in, the prices in, but we'll get to that. What else we got on the week? Topics of the week?

• 0:59David Hoffman?

  The SBF trial of FTX continues on to week two, Friday of last week, before we were able to cover it. Gary Wang, the CTO of FTX, testified. This week Caroline Ellison testified for two days straight. There's a lot of juicy stuff to unpack there.

• 1:13Ryan Sean Adams?

  Two days?

• 1:14David Hoffman?

  Two days. Two days on the stand.

• 1:16Ryan Sean Adams?

  Forty-eight hours of testimony?

• 1:17David Hoffman?

  Yeah. Yeah. One day was like eight hours straight. So she just kind of dumped it all about Alameda on the table. Little did I know that Thai prostitutes would be involved with this story. Did you hear about this?

• 1:28Ryan Sean Adams?

  Uh, no.

• 1:29David Hoffman?

  Yeah. Well, okay. Like, oh, you haven't heard about this at all. Oh, you're about to get this fresh?

• 1:34Ryan Sean Adams?

  No, I haven't read any of this.

• 1:36David Hoffman?

  Thai prostitutes have entered the FTX arena.

• 1:38Ryan Sean Adams?

  Entered the chat?

• 1:39David Hoffman?

  Entered the chat, yeah.

• 1:40Ryan Sean Adams?

  The arena. It's funny you say that. They used to have an arena, didn't they? We also have Sam Altman. He's talking about crypto on Joe Rogan's show. What did he say? Was it good? Was it bad? Did he mention WorldCoin at all? We'll get to that, too. David, what else we got?

• 1:55David Hoffman?

  Why do Americans own crypto? The Fed, the Fed did a survey result. So we'll talk about that. Also, the vampire attack on Lido. I got some takes. That's at the very, very end. And then apparently, Ryan, we're giving our price. Predictions for ETH? Why are we doing this?

• 2:12Ryan Sean Adams?

  You didn't know that?

• 2:13David Hoffman?

  No, I did not know. I did not sign up for this.

• 2:15Ryan Sean Adams?

  You better be thinking of a number, okay? Because we're getting to it. But before we get in, we've got a message from our friends and sponsors over at A16Z. You know A16Z, crypto VC firm. Well, they're telling you, they want you to go back to school. That is crypto startup school. What are we looking at here, David?

• 2:33David Hoffman?

  A16Z Crypto Startup School is that time of the season where you can apply to join and get accepted by the crypto startup school. It's a 12-week accelerator program to make you into a crypto founder. So cue the Mulan music. We're going to make a founder out of you. That's what A16Z is going to do. You're going to work with some of the best and brightest mentors in the crypto space, including some of the A16Z partners and sometimes just like external founders come in and just get involved. The A16Z Startup School 12-week program, March 27th through June 11th in London in the UK. So you will be there. This is onsite. This is on campus. And yeah, it's great. You get to work with some fellow founders, work with some great mentors.

• 3:14David Hoffman?

  You need to apply, October 20th. That is in eight days from recording, seven days if you're listening to this on Friday, which you should be. So applications are open. Make sure you catch that deadline.

• 3:23Ryan Sean Adams?

  We've got some videos from Chris Dixon there. He's going to be providing some mentorship. Also Jin Wang from Optimism, some fantastic people there. So yeah, go check it out. Become a founder. David, all right, you ready for it? You said it wasn't Flattober, but it's not Uptober, is it? Does that mean it's the other direction? What's the other?

• 3:40David Hoffman?

  Yeah, the other is the bad direction. It's the down direction. Yeah, a little bit.

• 3:44Ryan Sean Adams?

  What's Bitcoin on the week?

• 3:45David Hoffman?

  Kind of accelerating to the downside a little bit. Started the week at 27,900, down 4.5%. We were asking for bigger moves last week. We kind of got them.

• 3:55David Hoffman?

  26,600 is where we are this week, 700, excuse me.

• 3:58Ryan Sean Adams?

  Okay, I guess it's better than flat? No, I don't know.

• 4:02David Hoffman?

  Is this what we wanted?

• 4:03Ryan Sean Adams?

  I don't know. I don't know if this is what I've wanted. Let's give me some ETH charts too, so I can decide what are we looking at?

• 4:08David Hoffman?

  Started the week at 1630, down 5.5% to 1540. 1540, oof.

• 4:14Ryan Sean Adams?

  I didn't want that. No, I didn't. It didn't feel good.

• 4:16David Hoffman?

  I bought this week.

• 4:18Ryan Sean Adams?

  Did you?

• 4:19David Hoffman?

  Yeah.

• 4:19Ryan Sean Adams?

  Yeah, that's the upside, actually. It's like, what a fantastic buying opportunity. I've got to take about that at the end. And of course, we're getting into price predictions. But I guess it's not October, huh? We got, we got, we got, um, we got half the month yet to redeem ourselves.

• 4:35David Hoffman?

  Right. Yeah, it's only the 12. It's only the 12.

• 4:38Ryan Sean Adams?

  Yeah. Well, it was.

• 4:39David Hoffman?

  Tomorrow's Friday, the 13th. Congrats to all the bankless listeners who are listening to this on Friday, the 13th. Everyone brace yourselves.

• 4:44Ryan Sean Adams?

  Should we do something spooky, David?

• 4:48David Hoffman?

  Oh, dude, Halloween's coming up. We're gonna have to get our costumes.

• 4:51Ryan Sean Adams?

  I don't care anymore. I'm not doing a, are you doing a costume this year?

• 4:55David Hoffman?

  They love it. The listeners love it. We gotta do it.

• 4:57Ryan Sean Adams?

  Do they?

• 4:58David Hoffman?

  We gotta do it.

• 4:58Ryan Sean Adams?

  I think you and I like it.

• 5:00David Hoffman?

  Last year, last year for bankless listeners who are new, who the, the five new bankless listeners that have come in the last year, Ryan dressed up as Bit Boy.

• 5:10Ryan Sean Adams?

  Oh, yeah, that's right.

• 5:11David Hoffman?

  And I dressed up as a crypto dickbutt. Yeah.

• 5:13Ryan Sean Adams?

  Oh, dude, I'll be SBF and you'd be Caroline.

• 5:16David Hoffman?

  Oh, my God, that's not what I signed up for. I already kind of have my, my, well, I haven't got my costume, but I've got my idea.

• 5:22Ryan Sean Adams?

  Really?

• 5:23David Hoffman?

  Yeah, I've got my idea.

• 5:24Ryan Sean Adams?

  Is this a thing where you're not gonna tell me?

• 5:26David Hoffman?

  We have, we have, we have not told each other. That's been the deal. We reveal.

• 5:30Ryan Sean Adams?

  I know, okay.

• 5:31David Hoffman?

  Do we do the, we throw all the cameras off until we hit record?

• 5:34Ryan Sean Adams?

  All right.

• 5:35David Hoffman?

  I'm just, I'm saying, year one, I was my Crypto Punk. Now, now behind me. Year two, I was my Crypto Dickbutt. Year three, if you continue the trend, it'll be an NFT, perhaps. Perhaps. Perhaps.

• 5:47Ryan Sean Adams?

  An NFT? One of your NFTs?

• 5:49David Hoffman?

  One of my NFTs, yeah. I think that's my rule of thumb. It's like, I'm an NFT.

• 5:52Ryan Sean Adams?

  Scan your wallet. It's for, for, for some bankless listener, go find, go track down David's wallet and, and let's see if we can predict.

• 5:59David Hoffman?

  It's David Hoffman Dottie. That's where I keep my NFTs.

• 6:04Ryan Sean Adams?

  Super secret location. All right, how about the ETH Bitcoin ratio? That's looking spooky.

• 6:09David Hoffman?

  It's bad. Point 0577.

• 6:12Ryan Sean Adams?

  Yeah.

• 6:12David Hoffman?

  Yeah.

• 6:12Ryan Sean Adams?

  I was gonna ask you to give it to me straight and you just did, huh? So we're down 1.5% on the week?

• 6:17David Hoffman?

  1.5% on the week, yeah. Total crypto market cap, 1.08 trillion dollars. So it's not great. Can we move on?

• 6:25Ryan Sean Adams?

  Yeah, we can. Thanks to Kraken for those charts. We appreciate the charts at least performing.

• 6:29David Hoffman?

  Make them look better, make them go up. You can make them look pretty, but can you make them go up?

• 6:34Ryan Sean Adams?

  Hey, Kraken, can you help us with that? All right. What are we looking at? Here we go. CPI, that is the Consumer Price Index. Inflation reports came in for September. And guess what, David?

• 6:46David Hoffman?

  It's not dead yet.

• 6:48Ryan Sean Adams?

  No, inflation is still here. It was actually a little higher than most analysts expected. So it was up 0.4% in the month of September. So it was not flat temper. It was up temper a little bit for inflation. And if you extrapolate that, yeah, I'm working the months in this show, David. 4.8% annualized. That's what inflation would be. I was starting to feel like 5% actually. That's annualized. That's if you take, you know, 1.4% multiply that by 12 months, right? But if you look at historic data, we are at 3.7% annual. So no, it's not dead. You see this bump? That's a bump up.

• 7:27David Hoffman?

  Yep.

• 7:28Ryan Sean Adams?

  It's bumped up a little bit.

• 7:29David Hoffman?

  Okay.

• 7:31Ryan Sean Adams?

  You know, what's interesting is you and I just did a recording with Lynn Alton.

• 7:35David Hoffman?

  So good.

• 7:35Ryan Sean Adams?

  We talked about.

• 7:36David Hoffman?

  So good.

• 7:37Ryan Sean Adams?

  It was fantastic. Guys, that episode is coming out soon. Actually, I still have her book right here. Broken Money, David. Anyway, the contents of that book is in the episode and it's absolutely fantastic. But one of her takes was, what if inflation just becomes like background noise for us?

• 7:55David Hoffman?

  High background noise. Well, I mean, inflation is always background noise, but what you mean to say is like it's the volume is increasing. Still background, but higher.

• 8:03Ryan Sean Adams?

  I'm, what I'm saying is like, what if we don't go back to the 90s? What if we don't go back to the 2000s, right? What if, what if now it's just a sustained like four, five, six, seven percent spikes up, maybe tiny spikes down? Like what if it's in the background? And you know, Lynn's comment was, that's how a lot of countries live right now. I'm talking about kind of in Western developed nations, right? In Europe, what if this is the new normal? In Canada, in Australia, what if this is the new normal? In the US, what if this is the new normal? She, she mentioned she was just in Egypt, 30% annual inflation. Okay. And people just live like that. And so what do you do when you're in a high inflation type of environment? Well, you tend to spend more.

• 8:47Ryan Sean Adams?

  You might want to, you might be willing to take out more cheap debt if you can find it in fiat, that's nominated in fiat. You might want to hold your money in other things. You know, real estate in a lot of emerging countries that don't have strong capital markets like the US. Stocks for, you know, Western developed countries like the US, maybe crypto. Maybe you start to think a bit more short term about your spending habits as well. This is very interesting if this is what the next decade holds for us is kind of sustained high inflation rates. What do you think about this?

• 9:23David Hoffman?

  I was talking to Mariano Conti, who lives in Argentina, who bought a car maybe a few years ago. And he, he got a 20% interest loan in Argentine peso. So he's paying 20% interest, terrible loan for, for a car loan, for a one year.

• 9:38Ryan Sean Adams?

  That's a loan shark.

• 9:39David Hoffman?

  Yeah, it's terrible. His first, but Mariano Conti like lives on dollars like most people who do in, who live in Argentina. So his first, his first loan payment that he had to pay to pay back the loan was.

• 9:48Ryan Sean Adams?

  Most people who can, I would say in Argentina, live on dollars. Yes.

• 9:53David Hoffman?

  Dollars are like most, everyone in Argentina, almost everyone has a person that they exchange dollars with. So it's not just like.

• 10:00Ryan Sean Adams?

  Really?

• 10:00David Hoffman?

  Oh yeah. No, it's the dollarization of Argentina is like very well permeated. It's not like an elite.

• 10:05Ryan Sean Adams?

  But it's all gray market, right?

• 10:06David Hoffman?

  It's all gray market and it's like social, totally social culturally accepted. Right. Everyone has like the guy that comes and swaps currency.

• 10:15Ryan Sean Adams?

  Your dollar guy?

• 10:16David Hoffman?

  Yeah, your dollar guy. Yeah. It's not like, it's not like an elite only thing. It's just like everyone. Anyways, his first car loan payment was $1,200. So he converted $1,200 into pesos to pay his car loan. And his most recent car loan payment, he told me was $580 because it only took $580 to acquire the same amount of peso that he would need to pay back his car loan. Inside, so like when he takes like a 20% peso, 20% interest rate loan on a one year loan, which is a dumb loan. It actually works out because it's inflating so goddamn much. It doesn't matter.

• 10:53Ryan Sean Adams?

  Do you know an elder millennial flex is just to be like, yeah, I got a mortgage at 3%.

• 10:58David Hoffman?

  Yeah.

• 10:59Ryan Sean Adams?

  Like, that's a huge, like, that, what a gift that was.

• 11:02David Hoffman?

  Right.

• 11:03Ryan Sean Adams?

  You can't get that nowadays. And, you know, you're, you're, you're basically making money on that. Because inflation is, is higher than your interest payments. So the Fed has an idea on why people are buying crypto. And it's not necessarily inflation. So apparently, David, every couple of years, the Fed puts out a survey on why people buy crypto. They must, they must be interested. I don't know if, I don't know if they're worried or just.

• 11:28David Hoffman?

  How many times have they done this?

• 11:29Ryan Sean Adams?

  Generally interested, at least since 2019. First, guess what percentage of Americans the Fed says owns crypto? What do you think?

• 11:39David Hoffman?

  Well, Coinbase said 50 million and there's like over 300 million citizens. So like,

• 11:45Ryan Sean Adams?

  Yes.

• 11:46David Hoffman?

  Like, what was that number? Like 20%? Quick math? 20%?

• 11:49Ryan Sean Adams?

  20%, 1 in 5 kind of thing?

• 11:51David Hoffman?

  Yeah.

• 11:52Ryan Sean Adams?

  The Fed reports less than that. Okay, so this is a survey of about 400 Americans. And they say 8.1% in their survey of Americans that own crypto. Which is, which is not nothing. It's not Coinbase numbers. But interestingly enough, this was up from 1.9% in 2019.

• 12:11David Hoffman?

  2019, 1.9%, now 8.1%. Directionally, I love that number.

• 12:17Ryan Sean Adams?

  It's a great, it's a great, like, that's a great multiple, right? It was a little 4X for us. And I think these numbers are actually 2022 numbers. So, you know, although no one's really buying 2022.

• 12:30Ryan Sean Adams?

  Probably selling. But one of the questions they asked in the survey is, why do you guys, why are you guys buying crypto? Why do you own crypto? All right. Do you want to know the number one reason why? 67% of Americans own crypto, David? You want to guess what that is?

• 12:45David Hoffman?

  Number go up?

• 12:46Ryan Sean Adams?

  Yeah, it's, it's number go up. As an investment, as an investment was number one. With 67%, number two was curiosity about the tech. That's 21%. I'm in it for the tech. There's always those tech. Those are the ones that are down on their bags. They're just sitting for the tech. And then other, interestingly enough, was 10%. You know what got no mention was remittances, payments for goods and services. So no one using this as a payment in their, in their study. Or number, the last one, most dishearteningly, almost at zero, because they don't trust banks.

• 13:20David Hoffman?

  Well, duh. You don't, as an American, buy crypto for remittances. Well, okay, I guess if you're an American citizen and you are sending crypto abroad, then I guess, I guess you are, if you're like a-

• 13:35Ryan Sean Adams?

  If you have family abroad, if you've recently immigrated, that sort of thing, you know, you know, maybe, maybe. You're probably doing like, you know, stable coins, I would expect. Yeah, but the big use case of the 8% is investment, is number go up. So, anything surprising there for you, David?

• 13:53David Hoffman?

  No, that, that checks out.

• 13:55Ryan Sean Adams?

  Well, I know you're in it for the tech, man, so you're part of that 20%.

• 13:58David Hoffman?

  I'm in it for the memes.

• 14:02Ryan Sean Adams?

  Here's a number.

• 14:03David Hoffman?

  That's all we got at this point in the market, Christ.

• 14:06Ryan Sean Adams?

  Ooh, okay, here, here's a number that is straight down. It looks scary. Is this a, a good chart or a bad chart we're looking at? This is the validator queue. Explain it.

• 14:15David Hoffman?

  Okay, so this is, okay, now we're talking about crypto.

• 14:18Ryan Sean Adams?

  That was a hard pivot.

• 14:20David Hoffman?

  That's a hard pivot. Okay, this is the Ethereum proof of stake validator queue. Okay, so, quick rock through memory lane. We enabled withdrawals. The supply of ether in the beacon chain went down because people withdrawn. And then the rate of inflows into the beacon chain, like, accelerated bigly, like 3Xed.

• 14:38Ryan Sean Adams?

  Beacon chain is just people who want to stake their ETH.

• 14:40David Hoffman?

  Proof of stake, the proof of stake, yeah. There was like a 45 day wait queue to get into the beacon chain to stake their ETH a while ago. We have finally approached an equilibrium. That acceleration of people depositing into proof of stake has finally started to come down. And so it's currently less than 24 hours to deposit your ETH into the beacon chain staking contract and get your ether staking. And so- This is, this is, we, this inevitably was going to, this was never going to be up only, of course, like, you know, not all Ether is going to stake. And so we are, have found the equilibrium. That equilibrium is around 27.3 million staked Ether.

• 15:22David Hoffman?

  That's 22.7%, which is about the 20 to 30% range that we predicted. So about 3.5% APR is about what the market wants. And if that goes down, then people won't want it anymore. And that this is the equilibrium that we have finally arrived at. Cool.

• 15:40Ryan Sean Adams?

  It is cool. A bullish bearish? I, I don't know.

• 15:44David Hoffman?

  It's just straight neutral.

• 15:45Ryan Sean Adams?

  As a staker, I was, you know, wanting to keep that number above 3% certainly.

• 15:52David Hoffman?

  Right.

• 15:52Ryan Sean Adams?

  So I didn't want the queue to stay full and the demand to be kind of perpetual.

• 15:56David Hoffman?

  Yes.

• 15:57Ryan Sean Adams?

  And so as a staker, it's good to see that number go down.

• 15:59David Hoffman?

  You are not alone in that. Everyone would like that to go up. Yeah. Everyone else should un-stake. Please un-stake.

• 16:07Ryan Sean Adams?

  I think one reason, what, you know, why was it, why did it get so high? Because 45 days is, is pretty high, right? For all these people wanting to get in the, in the beacon chain club and stake their ETH. I think it was really because once withdrawals went through post Shanghai, people just saw like lower risk. I mean, maybe I'm extrapolating, but that was true for me. I was just like, okay.

• 16:26David Hoffman?

  It was so obvious. I was arguing with Bitcoin maxis where like, as soon as withdrawals are enabled, Ethereum is going to collapse because everyone's going to un-stake. I'm like, you're an idiot. That's not how it's gonna work.

• 16:37Ryan Sean Adams?

  Why do you do that to yourself, David? Why do you still argue with Bitcoin maxis, huh?

• 16:40David Hoffman?

  Because people are wrong on the internet, Ryan.

• 16:42Ryan Sean Adams?

  Oh, okay. You can't sleep. Can't sleep. Someone's wrong on the internet. Token terminal, speaking of Bitcoin, you want to get your, all your, all your angry takes out about Bitcoin? Friendtech just surpassed Bitcoin in 30-day fees, okay? Friendtech is making more money selling each other's friends, friend shares, sorry, they don't call them that, friends.

• 17:04David Hoffman?

  Keys.

• 17:05Ryan Sean Adams?

  Friend keys, then Bitcoin is making, selling block space. That's what this means.

• 17:10David Hoffman?

  That's a layer two app. So not even a layer one app on Ethereum, a layer two app is making more money than Bitcoin is.

• 17:18Ryan Sean Adams?

  Yeah.

• 17:18David Hoffman?

  And paying Ether very little for security because it's on layer two.

• 17:23Ryan Sean Adams?

  Friendtech revenue, 28 million. Bitcoin revenue, 26 million over the last 30 days. ETH revenue, 90 million. Tron revenue?

• 17:34Ryan Sean Adams?

  87 million.

• 17:35David Hoffman?

  The Tron revenue is actually such a dark horse. Turns out Tron has very similar economics to Ethereum and it's it's super duper used for payments.

• 17:44Ryan Sean Adams?

  And you should be, you should be careful saying Tron. Okay. Because that old Justin Sun guy is kind of litigious. So you should be careful what you say about him.

• 17:55David Hoffman?

  Are we going to open up the store? Okay. Can you, can you open up the article then? If we're going to open up the store?

• 18:00Ryan Sean Adams?

  The, okay.

• 18:01David Hoffman?

  Bankless released a Tron bull versus bear case.

• 18:06Ryan Sean Adams?

  Let me find this.

• 18:06David Hoffman?

  Inspired by, for me, it was inspired, I didn't write it. It was inspired by Paul Enya's article about the economics of Tron and how they're like, they're mimics ether and they're kind of bullish. And so we published this article. Jack wrote it, great, great article, wrote the bear case and then the bull case. And so there was a, when, talking about the bull case for Tron is already super dubious. Why is it dubious? Well, because the founder, Justin Sun, I, in my opinion, is a morally bankrupt character. And we allude, it's just my opinion, it's my opinion.

• 18:40Ryan Sean Adams?

  You could say that.

• 18:41David Hoffman?

  We just, the article gave that disclaimer. It's like, hey, the bear case for Tron is that, you know, Justin Sun is dubious. He's, there's allegations of fraud. And then the author and the newsletter editor of Bankless got pulled into a Telegram group with Justin Sun's lawyers for Tron. And they submitted a cease and desist for talking shit.

• 19:05Ryan Sean Adams?

  They threatened legal action against Bankless for publishing. By the way, this wasn't just the bear case. It was the, the bear case and the bull case. Because we just actually said, there is kind of a weird bull case about Tron, which is that it's generating a lot of fees and it's burning those transactions. Okay. It's completely centralized. It's completely part of the Justin Sun empire. But it is actually producing revenue. Number two, behind Ethereum. Uh, yeah, we got sent this cease and desist from Tron. And we talked to our lawyers.

• 19:38David Hoffman?

  Here's what they say. Wild assertions like Tron's primary function is to enrich its insiders and participating in the zero sum game is a mistake that you will invariably regret. If you want to live on a chain wrought with fraud and deception, then Tron might just be the one for you. God, I'm so proud of Jack.

• 19:55Ryan Sean Adams?

  That's what, that's what, that's what Jack put in the post. But, but yeah, the, the Tron's lawyers disputed that. They didn't like that. They sent us a cease and desist. We talked to our lawyers and they said, you look, you got First Amendment rights.

• 20:07David Hoffman?

  You get to say whatever you want.

• 20:08Ryan Sean Adams?

  Yeah, but do you really want to get in a pissing match with Justin's son?

• 20:12David Hoffman?

  Yeah, he can expend this.

• 20:13Ryan Sean Adams?

  We already shipped the newsletter, so we'll just strip that from our.

• 20:16David Hoffman?

  Yeah, so we have stripped it from the record because I don't want to go up against a billionaire who's got way more money than me.

• 20:23Ryan Sean Adams?

  Unless he's gonna be a total bully and then like.

• 20:26David Hoffman?

  And then we might talk about it on the podcast.

• 20:28Ryan Sean Adams?

  Yeah, yeah, just our opinions.

• 20:31David Hoffman?

  It's just my opinion, not anyone else's, that Justin's son is morally bankrupt and probably so are the lawyers who work for him.

• 20:39Ryan Sean Adams?

  There you go. Just an opinion.

• 20:41David Hoffman?

  Just an opinion.

• 20:42Ryan Sean Adams?

  Okay, so back to the fees though. We're talking about Bitcoin fees, 30 days. I mean, I don't know, David, the quick take is I don't think this is great for Bitcoin. And, um, you know, we've said this for a long time, since 2019, when it was a lot less possible, yeah, popular to talk about the sustainability or the lack of sustainability of Bitcoin's monetary schedule and model. And, um, you know, it's, it's starting to pop up again. It still won't get really bad.

• 21:14David Hoffman?

  I'm looking at the graph that you have on the screen, which is just the token terminal, like graph of who's making money. Ethereum number one, Tron number two, bullish, Lido number three, FriendTech number four, Bitcoin, Uniswap. Where's Solana? There's 25 apps on here.

• 21:28Ryan Sean Adams?

  No, Solana doesn't make money, dude. Not, not, not the traditional way.

• 21:31David Hoffman?

  It doesn't even make the top 25 in fees.

• 21:34Ryan Sean Adams?

  No, it doesn't, doesn't, it doesn't. But, you know, everyone values.

• 21:38David Hoffman?

  But the bull case for Solana is fees. That's what they say. They make it up in volume.

• 21:42Ryan Sean Adams?

  No, I think, I think, I actually.

• 21:44David Hoffman?

  But they make it up in volume.

• 21:45Ryan Sean Adams?

  I think the bull case for Solana is fees, but MEV. It's sound, you gotta sell the block ordering at some point.

• 21:52David Hoffman?

  MEV extraction.

• 21:52Ryan Sean Adams?

  It's gonna be less the user fees. Yeah, it's MEV extraction, for sure.

• 21:56David Hoffman?

  Not our rent extractors, their rent extractors.

• 21:59Ryan Sean Adams?

  Hey, semantics. Um, you know what? There, we, we promised the last thing here is.

• 22:05David Hoffman?

  God, tribal warfare coming out left and right in this.

• 22:10Ryan Sean Adams?

  Price predictions, though.

• 22:11David Hoffman?

  Okay.

• 22:11Ryan Sean Adams?

  Okay, so this was a price prediction from Standard Chartered Bank. Don't know who's Standard Chartered Bank.

• 22:16David Hoffman?

  My favorite bank.

• 22:17Ryan Sean Adams?

  That your favorite bank?

• 22:18David Hoffman?

  Yeah.

• 22:18Ryan Sean Adams?

  Okay, well, they're analyzing Ether. And according to their analysts, Ether could reach $8,000 by the end of 2026.

• 22:27David Hoffman?

  Okay.

• 22:28Ryan Sean Adams?

  So, but that's not their top side. Their top side, at the end of the journey, the long-term range is 26,000 to 35,000.

• 22:36David Hoffman?

  Okay.

• 22:36Ryan Sean Adams?

  All right, now we're talking.

• 22:37David Hoffman?

  Yep.

• 22:37Ryan Sean Adams?

  And I don't know what timeline that is, but that's probably

• 22:40David Hoffman?

  It's like in the fullness of time.

• 22:41Ryan Sean Adams?

  10 years out.

• 22:42David Hoffman?

  It sounds like.

• 22:42Ryan Sean Adams?

  Yeah, something like this. Final destination, maybe.

• 22:44David Hoffman?

  The equilibrium of ETH prices.

• 22:45Ryan Sean Adams?

  Yeah, the equilibrium. So, I don't know what like backs their analysts, but I know, David, you have some takes on the price of ETH.

• 22:54David Hoffman?

  Do I?

• 22:55Ryan Sean Adams?

  If you don't, at this point in the episode, when I teased you just like 15 minutes ago to get your take ready, because I'm going to ask you, what do you think the top is for this bull cycle for Ether? What's the top? Call, give me a number. Call the top for the next cycle.

• 23:10David Hoffman?

  I mean, my gut, my heart says 15K.

• 23:14Ryan Sean Adams?

  Okay.

• 23:15David Hoffman?

  So we had 10K was the mean price last bull market and we got to 4,800, which in logarithmic terms actually isn't terribly far off from that, but you know, still a 2X or away from the top. So increasing last cycle's call from 10K to 15K, I think is appropriate.

• 23:35Ryan Sean Adams?

  So, and what do you think? Are you willing to time box that? You know, are we talking 2024, 25, 26? Longer?

• 23:44David Hoffman?

  Yeah, assuming four-year cycles play out, then yeah, end of 26, by the end of 26. What year is it?

• 23:51Ryan Sean Adams?

  15K.

• 23:53David Hoffman?

  23?

• 23:53Ryan Sean Adams?

  15K by 2026, is what you're saying.

• 23:56David Hoffman?

  15K in two years? Ooh, that's starting to get world-specific. That's making me a little scared.

• 24:01Ryan Sean Adams?

  There you go.

• 24:01David Hoffman?

  Those are some specific numbers and times, which I am just pulling from my absolute, you know what?

• 24:07Ryan Sean Adams?

  I don't know. I mean, you know, that's only double what Standard Chartered Bank said. So you're in good company here.

• 24:14David Hoffman?

  Right. Okay, all right. Well, wait, what's your number? You say a number.

• 24:18Ryan Sean Adams?

  You want to know my number?

• 24:19David Hoffman?

  Yeah.

• 24:20Ryan Sean Adams?

  I was gonna go 12,500.

• 24:23David Hoffman?

  Okay.

• 24:23Ryan Sean Adams?

  Okay, but in honor of Friday the 13th, 13,000 is my number. 13,000, this is me saying that's the top. That's the ETH price top for next cycle, 13,000. I'm just a little bit under 15,000. My rationale is, we're looking at it like a...

• 24:40David Hoffman?

  David's too bullish.

• 24:43Ryan Sean Adams?

  Yeah, my rationale is take anything David says and then discount it by like 20%. Because that's, that's what we do in this podcast.

• 24:51David Hoffman?

  You're breaking the gas.

• 24:52Ryan Sean Adams?

  Those are our numbers, those are our numbers. David, what do we have coming up in the episode?

• 24:55David Hoffman?

  Coming up next, SBF Trial Week 2, Gary Wang. We got to talk about him because he was last week, but we didn't cover him because he was on Friday. Caroline Ellison this week, kind of a climactic cinematic moment in the trial. There's a lot to cover, including, Ryan, don't forget about the Thai prostitutes. Got to talk about them.

• 25:12Ryan Sean Adams?

  Wow, you're weirdly excited about that part, I don't know.

• 25:16David Hoffman?

  Also crypto is playing a role in the story of the Israel Hamas conflict. So we'll discuss the details there. And of course, there's always just going to be the regular old news of the week. Some new chains coming to Polygon, remember Apecoin, now Apechains? We'll talk about that. Farcaster's going permissionless, all this stuff and more. But first, I want to talk about these fantastic sponsors that make this show possible, especially Kraken, our preferred exchange for crypto in 2023. If you're not having an account with Kraken, then consider clicking the link in the show notes to get started with Kraken today. Kraken Pro has easily become the best crypto trading platform in the industry. The place I use to check the charts and the crypto prices, even when I'm not looking to place a trade. On Kraken Pro, you'll have access to advanced charting tools, real-time market data, and lightning-fast trade execution, all inside their spiffy new modular interface.

• 25:57David Hoffman?

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• 26:40David Hoffman?

  to interoperable, customizable permissions with dedicated throughput. Whether you are a developer, 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 and provide a builder experience that's intuitive, familiar, and fully EVM-compatible. Faster transaction speeds and significantly lower gas fees. So visit arbitrum.io where you can join the community, dive into the developer docs, bridge your assets, and start building your first app with Arbitrum. Experience Web3 development the way it was always meant to be. Secure, fast, cheap, and friction-free.

• 27:15Ryan Sean Adams?

  Here it is, SBF trial. It's week two. David, seems like only last week it was week one, and that's because it was week one last week. And so now it's week two. We have some new characters, new testimony entering. Well, you give me the analysis. So I have absolutely no idea what happened. I saw some illustrations, like the one that we're looking at, which is Caroline Ellison looking at Sam Bankman-Fried, looking absolutely bewildered, you know, sad. Here's another one, by the way.

• 27:45David Hoffman?

  These illustrators did the characters just zero favors.

• 27:49Ryan Sean Adams?

  So, okay, my hot take is, I feel like the illustrator here, this is more art than actual, like, what these people look like. My take is that the illustrator here is going to sell these for NFTs later, as NFTs, as iconic NFTs.

• 28:01David Hoffman?

  That is a hot take. I'm assuming the illustrator works for the court. So if, I don't know how this works, but that's property of the court.

• 28:09Ryan Sean Adams?

  Really?

• 28:09David Hoffman?

  Which I don't know. I don't know.

• 28:11Ryan Sean Adams?

  Maybe the court can issue an NFT.

• 28:12David Hoffman?

  I don't know.

• 28:13Ryan Sean Adams?

  All right. My tinfoil hat's off. So tell us what happened. What happened in week two of the SBF trial? Some bombshells, I'm sure.

• 28:20David Hoffman?

  Well, first we have to start with last week Gary Wang. We need to cover what he talked about on Friday. Gary Wang, the CTO of FTX. This is the illustration of Gary Wang.

• 28:30Ryan Sean Adams?

  Smart glasses he's wearing here.

• 28:33David Hoffman?

  Okay, so what was the big punchline? Was that, you know, the story goes that we understood as crypto Twitter crypto people was that Terra Luna collapsed, wiping out $50 billion, followed by Three Arrows Capital, another like, you know, X numbers of billions of dollars. And that's where the hole in the Alameda FTX balance sheet occurred because they had exposure.

• 28:56Ryan Sean Adams?

  That was the common narrative. That's what I thought.

• 28:58David Hoffman?

  That was what we understood and, you know, kind of makes sense. Turns out that the hole in FTX's balance sheet started at Genesis with their very early relationship with Alameda.

• 29:10Ryan Sean Adams?

  Genesis of what?

• 29:12David Hoffman?

  Of the whole thing. FTX and Alameda in 2019 had a convoluted relationship that allowed for Alameda to borrow funds from FTX starting in 2019. It did not begin in 2022. This started from Genesis. FTX was a fraud from Genesis. And that was the big learning moment that we got out of Gary Wang. The way that it started was that I think they, Alameda just wanted to be able to do some things. And so at Sam's direction, and so both Caroline Ellison and Gary Wang, who testified this week, it's understood that they have entered plea deals with prosecutors. And so both of them thematically would use these words at Sam's direction.

• 29:57David Hoffman?

  So Gary Wang.

• 29:58Ryan Sean Adams?

  They kept saying that.

• 29:59David Hoffman?

  They kept saying.

• 30:00Ryan Sean Adams?

  I did this at Sam's direction. This was conducted at Sam's direction.

• 30:04David Hoffman?

  In 2019, Gary Wang, at Sam's direction, according to Gary Wang, allowed for Alameda to borrow customers' funds using the Alameda backdoor that Gary Wang coded up himself. And it started off, it was just like, I think like, you know, something. Not terribly crazy in the grand scheme of things, like a $10 million line of credit, which went up to $100 million line of credit, which went up to a billion dollar line of credit, because Alameda kept on maxing it out. I think like just straight up losing money. And also some other shenanigans, but like the idea of Alameda, the myth around Alameda was they were just printing money and they were just like extremely lucrative prop trading shop. Yeah, so turns out they were shit traders because they were kids at the wheel and they

• 30:48David Hoffman?

  didn't know what they were doing. And they, and Alameda would like keep on tapping into FTX's customer deposits and they would have, there was like a number and the whole, the whole premise here was that Alameda, FTX allowed Alameda's trading account to go negative. And this is, this is just giving them a line, a line of credit. FTX was giving Alameda a line of credit. This is not unheard of in the world of exchanges. Like you can enter a line of credit with crypto exchanges, but they're like small. They're like $1 million, $2 million.

• 31:23Ryan Sean Adams?

  They're also separate. They're also separate entities, right?

• 31:26David Hoffman?

  Right. They're also separate entities.

• 31:27Ryan Sean Adams?

  It is a, it is a business relationship. Well, if you're telling me that 2019 is when all this started, right? Like that seems like it's an original sin.

• 31:35David Hoffman?

  Yes.

• 31:35Ryan Sean Adams?

  You, you have this, this trading firm, this fund married with your exchange. Like those two things being one in the same owner seems like that is from inception.

• 31:47David Hoffman?

  Right.

• 31:48Ryan Sean Adams?

  A problem, a sin, an original sin, I guess.

• 31:51David Hoffman?

  Right. So Alameda just kept on pushing up that line of credit. It got to $1 billion. It got to $5 billion, it got to $10 billion. And then, and then Gary, when he testified, he's like, at some point he's like, F it. I'm not, stop bothering me to increase the line of credit. I'm just going to max it out. I'm going to enter effectively infinity line of credit for Alameda from FTX. The actual number was $65 billion, but that's effectively infinity. Because they, because Alameda kept on top, like topping it up. And there's this one moment inside of the court case where the lawyer asked Gary Wang, are you aware of the difference between solvency and liquidity? And Gary Wang, I'm sure this was hilarious in the, in the moment, just responds, now I am.

• 32:34David Hoffman?

  A little bit late, little bit late, little bit late.

• 32:36Ryan Sean Adams?

  Okay, so that's Gary's take on it, which is, you know, the number, one of the major witnesses in this case. But the second one-

• 32:43David Hoffman?

  The punchline here is that Sam Bankman-Fried told Gary Wang to coat up the ability for the Alameda to have the back door. And he was also telling them, he was also the guy telling Gary Wang, hey, increase Alameda's credit limit. Increase Alameda's credit limit. Gary Wang was like, okay, fine. That's what he's saying to do. Yeah, okay, boss. Right.

• 33:01Ryan Sean Adams?

  How about Caroline? She is the other witness here that is the key to this whole case.

• 33:06David Hoffman?

  Yes. Okay, so this is kind of like the big moment of the trial, because Gary Wang was very close to Sam Bankman-Fried.

• 33:14Ryan Sean Adams?

  David, look at her surrounded by all these reporters. That's crazy.

• 33:17David Hoffman?

  That's intense.

• 33:18Ryan Sean Adams?

  Absolute circus.

• 33:19David Hoffman?

  Yeah, yeah, yeah. Very intense. So Caroline Ellison is like the only person closer to Sam Bankman-Fried than Gary Wang. Like, not only was she in charge of Alameda, but like Sam Bankman-Fried and her were dating. They were sleeping together in 2019. They were dating in 2021. Then they broke up, but they were still together. Yeah. And so like, you know, very incestuous business dating, sleeping together relationship.

• 33:43Ryan Sean Adams?

  Incestuous.

• 33:44David Hoffman?

  Also in the Bahamas, like, well, the business relationship, everything's just a mess.

• 33:49Ryan Sean Adams?

  They're not related, though. Let's just clear that up.

• 33:51David Hoffman?

  They're not related, yes. There's many other things, like a lot of convoluted paths. They're not related. Gross.

• 33:58David Hoffman?

  Okay, again, Caroline also frequently used the words at Sam's direction. The main focus of the Monday testimony, I believe it was Monday, was Alameda's financial documents that they were going, that they showed to Genesis, Genesis Capital, in pursuit of a line of credit from Genesis. So Genesis asked Caroline Ellison if she could provide documentation of Alameda's financials, just doing proper due diligence. Ellison said that she was worried that providing accurate financials would show that Alameda was far too risky to be able to like lend money towards. So the pair, Ellison and SBF, devised strategies to improve the looks of Alameda's financial positions.

• 34:40David Hoffman?

  So at the direction of SBF, says Caroline, she produced seven different balance sheet reports. So like, seven different versions of looking at the truth. There was, and these were titled, "Maine." Which was truth and then alt one, alt two, alt three, four, five, six, seven. Oh, this is, this is a crypto principle. You just fork things. We get all these alts. All balance sheets, huh? Yeah, yeah, yeah, yeah. Uh huh. Okay, so it was agreed upon between SBF and Caroline that Maine could not be shown to anyone because like I said, it would cause, duh, that's, that's the truth. Yeah, hide that one. So they, SBF was shown like here are seven different balance sheet reports and SBF chose seven.

• 35:24David Hoffman?

  Number seven. Number seven. The seven. Yeah, yeah. I'll make the assumption here as like one was like the most truthy and seven was the least truthy. This is uncorroborated. This is me shooting from the hip, but I mean, he chose number seven of seven. I'm going to go with him. Knowing Sam and knowing what we know in this trial, he chose the least truthy one. Okay. But it's gotta kind of feel truthy. It can't be like all rainbows and unicorns, right? It has to deceive some creditors here. Anyway, go on. Are you ready for the alchemy that has ensued in alt seven? Okay. The main punchline is that alt seven obscured the fact that Alameda borrowed $9.9 billion

• 36:04David Hoffman?

  from FTX. Of course, that's the punchline. FTX did not have $9.9 billion in profits and so they need to cover up that hole. Interestingly, $4.5 billion from Alameda's balance sheet was made into venture investments by executives. So that's SBF, that's Caroline Ellison, that's Gary Wang and like I think one other. $4.5 billion. Why do they do it in their own personal names? Uncertain. Perhaps tax advantage reasons? Uncertain.

• 36:37David Hoffman?

  So the alt seven report labeled this $4.5 billion as, on their balance sheet as a long-term asset, not risky venture capital investments. They just wrote it off like, hey, we invested $4.5 billion. These are long-term assets. What I mean venture is long-term. It's dubious to call venture investing a long-term asset, but I guess if you spray and pray $4.5 billion, you're going to get something out of it, which is also a story for the show. We'll talk about Anthropic. Anyways, that $4.5 billion of venture capital was subtracted from the $9.9 billion of customer funds from FTX. Oh, I also missed a line. In Maine, in the Maine report, there was a line item called FTX borrows.

• 37:24David Hoffman?

  And it was $9.9 billion. That's the thing that they were like, well, that can't, that can't be

• 37:29Ryan Sean Adams?

  Right.

• 37:30David Hoffman?

  Okay, so they took this $4.5 billion of illiquid venture capital investment, subtracted it from the $9.9 billion to get 5.5, and then the Alt7 report renamed this line item to long-term loan. So instead of $9.9 billion of customer liabilities, which are at risk of being called forward at any moment, because again, if you're running an exchange, you're supposed to be fully liquid, it instead turned that into a 5.5 billion long-term liability. So this is kind of the big punchline, and this practice was basically rinsed and repeated over certain aspects of the balance sheet and over time as well.

• 38:07Ryan Sean Adams?

  David, this is just good old fashioned cooking the books, isn't it? And you know, one thing I scratch my head, I'm like, where are the accountants here? Didn't they have any CPAs? Like, isn't somebody auditing their books? But okay, I guess you can just like fork your balance sheet and make it say whatever you want.

• 38:21David Hoffman?

  It's such a Google Doc, right?

• 38:23Ryan Sean Adams?

  Okay.

• 38:26David Hoffman?

  Okay, so what is being testified in court is that Caroline is saying that Sam reviewed and approved this. She doesn't have any proof of this. So this is Caroline versus Sam. Caroline is saying, Sam told me to do this. He is the one that selected number seven. It was at Sam's direction. This is Caroline's word versus Sam. A lot of this information and analysis I'm getting from Carly Riley, who, you know, overpriced JPEGs, who was in the courtroom listening to this.

• 38:53Ryan Sean Adams?

  Carly's going to all the sessions, huh?

• 38:55David Hoffman?

  So Carly's opinion is that she totally believes Caroline, and she, again, she watched this testimony in person, so there's some.

• 39:01Ryan Sean Adams?

  Has she done a body language analysis?

• 39:05David Hoffman?

  I don't know. Okay, so that is the Alameda balance sheet conversation. So any questions about that? You ready to move on to other?

• 39:11Ryan Sean Adams?

  I'm ready. It sounds pretty clear cut, honestly.

• 39:15David Hoffman?

  Not great, yeah. Okay, so then there's conversations around SBF's morality and worldview. So Caroline recalled how SBF had said that lying and stealing money were permissible in his worldview.

• 39:26Ryan Sean Adams?

  So that's what the prosecution was going for. They're like, they're not only, like, the facts of the balance sheet and forking the balance sheet, and then how does this person think was at play in the courtroom?

• 39:37David Hoffman?

  Yeah, so Caroline talked and reflected about her own moral compass and how Sam's like conviction about utilitarianism warped her own sense of morality, that lying and fraud were acceptable to, more acceptable to her than she would have predicted just a few years prior, thanks to the influence of Sam Bankman-Fried.

• 39:56Ryan Sean Adams?

  Now, can I just pause? Of course, the person on the stand is going to play the victim card, right? "Oh, little old me, it was all Sam." Like, that is like a common kind of trope that is going to happen. So we should filter it through that, that sort of a lens, too.

• 40:11David Hoffman?

  Yes. And the defense, Sam Bankman-Fried's lawyer, the defense is, is poking at that. They're saying, "Well, jury, please be reminded that this person has very likely entered a plea deal and is influenced about that." So that's what the defense is saying.

• 40:26Ryan Sean Adams?

  Courts are great. They really like, they're, they're great. It's a great way to kind of get all the facts on the table on both, both sides. Okay, continue, yeah.

• 40:34David Hoffman?

  Yeah. She also said that it was a large part of Alameda and FTX culture to not put anything into writing and to use Signal with auto delete settings turned on. That was a part of the culture, kind of implicitly. Everyone kind of knows we're committing fraud here. So that's that. That's morality and worldview. There's a section of Sam's, like, his maintenance of his own public appearance. So Caroline said that Sam wanted to look sloppy. She said that-

• 41:00Ryan Sean Adams?

  He succeeded. He succeeded very well there.

• 41:03David Hoffman?

  Yeah. She said that press and investors frequently took Sam Bankman-Fried's appearance as a sign that he was a typical Silicon Valley nerd who knew how to code but didn't care much about fancy or designer clothes or cars, which was exactly the image he wanted. Quote, "He did not cut his hair often." We actually don't need that. We know that. That is evident. Sam said that he often got higher bonuses at Jane Street because of his hair, and he wanted to lean into his hair because it was a very, it was like valuable part of his brand. SBF's hair is like part of his vibe.

• 41:33Ryan Sean Adams?

  Yeah. So, you know, there's definitely some iconic hair there, David. You got to hand it to him for that.

• 41:38David Hoffman?

  It's hard to miss. Are you ready for the Taiwanese prostitutes?

• 41:44Ryan Sean Adams?

  Yeah, oh yeah, I almost forgot about that. Okay, what happens now?

• 41:48David Hoffman?

  Okay, so Alameda had funds stored on OKX and Huobi, both Chinese exchanges. In 2021, these accounts were frozen at the direction of Chinese officials due to a money laundering investigation of someone who traded with Alameda. SBF and execs, who kind of need every single dime that they can get their hands on because they're levered to the absolute tits, were like, well, this can't, this can't be. They had a billion dollars of locked capital on these two exchanges, on their trading accounts. And so they really needed to get this capital off. And so they just like slammed heads and was like, how do we get this, how do we get our money back? So one idea was that they would make further OKX trading accounts, fake trading accounts, using the ID of Thai prostitutes.

• 42:29David Hoffman?

  So somehow, they got a bunch of Thai prostitute IDs and they made trading accounts. And their strategy was that Alameda would both control their own account. They could trade on the, on the exchange, they just couldn't withdraw. So they could, they could make trades, they just couldn't withdraw the money. And so they made some fake accounts using these Thai prostitute IDs. And their plan was to make just absolute dogshit trades. And then the Thai prostitutes would take the other end of that, and other end of that trade and it would effectively be a transfer of capital from one account to the other. And they would be able to withdraw. That didn't work, surprise, but they legitimately tried to do this. Another Chinese employee of FTX attempted to broker a connection,

• 43:11David Hoffman?

  a deal between a Chinese official who they could bribe with $150 million, which they ultimately went through with. And this showed up on the Alameda balance sheet as a negative $150 million line labeled, quote, "the thing", because Caroline did not want to put these facts into writing that they were bribes.

• 43:32Ryan Sean Adams?

  No one's gonna suspect if we just label it "the thing".

• 43:35David Hoffman?

  The thing. Negative $150 million, the thing.

• 43:39Ryan Sean Adams?

  So Chinese authorities can just freeze accounts? And the way to get that unfrozen is $150 million? You know what?

• 43:47David Hoffman?

  I mean, $150 million can do a lot of things in this world.

• 43:50Ryan Sean Adams?

  This whole, I wouldn't know, I wouldn't know. This whole thing, though, is just like, it's the underbelly of crypto exchanges as well. I'm not saying all crypto exchanges, right? But like, some of them at least, wow, I mean, get this to DeFi as quickly as possible, is one of my reactions here. Okay, so what else we got, David?

• 44:15David Hoffman?

  Okay, I think this is, this is a nice way to just wrap this whole thing up. This kind of talks about just the absolute lunacy that is Sam Bankman-Fried. And so there was one quote that really stood out for the entire trial. And so this is a Twitter account kind of going back and forth on the questions.

• 44:31David Hoffman?

  Starting with just, it injects this conversation to a weird spot, but we're gonna skip past that. So Ellison says, "We started sleeping together on and off in the summer of 2020. We dated and we broke up." And then the attorney says, "What did the defendant tell you about his ambitions?" And Ellison said, "That he would be president." And, and the attorney says, "Of what?" Ellison says, "Of the United States."

• 44:57Ryan Sean Adams?

  Wow.

• 44:58David Hoffman?

  So Sam Bankman-Fried had aspirations of being president of the United States of America. Wow, absolute delusion.

• 45:09Ryan Sean Adams?

  There it is. So that's, that all makes sense then. It's that level of mega lumania that, that causes you to like fall the way he, he fell.

• 45:19David Hoffman?

  Icarus, straight Icarus.

• 45:20Ryan Sean Adams?

  The big revelation here is since 2019, this has been going on. It just got bigger and bigger and bigger from there.

• 45:27David Hoffman?

  It was a fraud from the get-go.

• 45:29Ryan Sean Adams?

  No kidding. All right. Well, that's FTX and SBF this week, David. So I guess stay tuned for next week, week three. How many weeks do we have?

• 45:37David Hoffman?

  Who's left to testify?

• 45:40Ryan Sean Adams?

  SBF, right? They're gonna put him on the stand, aren't they?

• 45:42David Hoffman?

  Oh, yeah. Oh, yeah, that's gonna be fun.

• 45:45Ryan Sean Adams?

  We'll see if they make him cry. We'll see. All right.

• 45:48David Hoffman?

  Make him cry.

• 45:49Ryan Sean Adams?

  What do we got coming up next?

• 45:51David Hoffman?

  We're gonna talk about crypto during wartime. We're gonna talk about Farcaster going permissionless. We're gonna talk about so many other things. ApeChain, everyone wants to talk about ApeChain. We'll talk about the Five Shades of Lido. Really good article from Climbing Buddy Mike Neuter, as well as so many things and more. But first, a moment to talk about these fantastic sponsors, especially MetaMask and MetaMask Portfolio. If you have not opened up your MetaMask portfolio, it looks so good. Check it out. There's a link in the show notes. MetaMask Portfolio is your one-stop shop to manage your crypto assets and to tap into DeFi, all in one place. And the most important part of that experience? Buying crypto, obviously. Metamask Portfolio's Buy feature enables you to purchase crypto easily without going through centralized exchanges. Designed with you in mind, you can fund your wallet directly in just a few clicks with convenience and simplicity. What happens when you press the Buy button?

• 46:36David Hoffman?

  Rather than being limited to a single payment provider, Metamask brings together a bunch of vetted, trustworthy providers to present you with customized quotes for your crypto purchase. Once you've funded your wallet, you'll be able to plug into DeFi with all the money verbs like swapping, bridging, and staking. But first things first, you need skin in the game. Head over to metamask.io-portfolios to buy crypto the easy way. Hiring people worldwide, paying them in crypto, providing them access to benefits, it all's so complex. But it doesn't have to be. Complying with labor laws, payroll rules, tax obligations, and crypto regulations in every country that you employ someone is difficult, time-consuming, manual, and costly. And it's drawing more and more attention from regulators and governments. But there is good news. Toku is here.

• 47:19David Hoffman?

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• 47:55Ryan Sean Adams?

  So everyone has heard about the news of the Israeli-Palestine conflict, of course, an absolute tragedy last weekend. And I gotta say for myself, I've been doing a lot of doom scrolling here lately.

• 48:08David Hoffman?

  Doom scrolling is in.

• 48:10Ryan Sean Adams?

  Absolutely heartbreaking. And I don't think that Bankless listeners want David Remai's take on the events that are unfolding. Right? It's, you know, we'll stay in our lane and focus on crypto here. But there is something that is related to crypto, at least, that was making the news this week. I'm reading a headline here. Israeli authorities have frozen Hamas-linked crypto accounts in a report here. What are we looking at, David?

• 48:34David Hoffman?

  Yeah, so a Tel Aviv-based news company organization reported that Binance also assisted in the shutting down of Hamas-linked accounts, so these are crypto exchanges. Quote here, "With the outbreak of war, Hamas launched a fundraising campaign on social networks, asking the public to deposit cryptocurrencies into its account. So the cyber unit acted immediately to locate and freeze the accounts with the assistance of Binance crypto exchange in order to forfeit the funds to state authorities." Actually, this story doesn't even begin with the conflict. Hamas apparently has been raising funds using crypto for a number of years now. And so it is a Wall Street Journal article that came out with a headline, "Hamas Militants..." Scroll up, scroll up.

• 49:17David Hoffman?

  "Hamas Militants Behind Israel Attack Raise Millions in Crypto. Digital Currency Transactions Highlight How U.S. and Israel Have Struggled to Sever the Access of Hamas and Palestine Islamic Jihad and Hezbollah from Foreign Funding." So the story here is like... It sounds a little bit like a hit piece, though. Crypto terrorist financing is really what's going on. And well, like, there was multiple millions of dollars throughout 2021 into 2023 of Bitcoin transfers towards Hamas military group. I think something like $10 to $20 million, which is a lot. In the article, it says, "It couldn't be determined whether the crypto that they received was directly used to finance the assault."

• 50:01David Hoffman?

  Researchers, I don't know who these researchers are, but this is what the article says, said that it would have likely have been a very small percentage of the overall amount that funds flowed through to finance the assault. But again, I don't know how they came to that conclusion. But something very important was left out of the report that came from Sam Lineman, analysis from a Twitter account, Sam Lineman. Ryan, what does it say?

• 50:25Ryan Sean Adams?

  A critical context was missing from the piece on Hamas and crypto. In April 2023, Hamas warned its donors to stop sending Bitcoin. Why? Because the transparent nature of the blockchain had Western intelligence following their every transaction like bloodhounds. Hence, the sudden drop on the chart. There's a reason money laundering via Bitcoin has been called a classically dumb crime. It shines a spotlight on everyone involved. Remember this, as the usual suspects ramp up their anti-crypto rhetoric in the weeks to come. That's what I think this was, David, was anti-crypto rhetoric. I don't think that crypto or Bitcoin is a good way right now to raise funds for terrorists. It is open. It is a public.

• 51:10Ryan Sean Adams?

  It is transparent. And it does have Western intelligence, bloodhounds. You know, some of them are companies, very sophisticated companies, following every single transaction.

• 51:20David Hoffman?

  As much as we tease chain analysis for being narcs, they also prevent terrorist financing. So this Twitter account takes a screenshot of the chart and points to where Hamas says, "Hey, stop sending us Bitcoin, everyone can see it." And then the Bitcoin flows just dropped to zero. So, you know, important context.

• 51:36Ryan Sean Adams?

  Yeah, I think so. David, some other context. A lot is going on in the world today. This is a tweet from crypto founder Alon Maroc. "I got drafted. Situation on the ground is significantly worse than described. Massacre is the only word that comes to mind. 90% civilians, families." Wow, this is somebody who just got drafted.

• 51:59David Hoffman?

  Founder of the SSV network, Shared Secret Validator Network, kind of basically DBT.

• 52:05Ryan Sean Adams?

  It's definitely crazy. It's like in my network, I don't know if in yours, but people are getting drafted, right?

• 52:11David Hoffman?

  Yeah, I was in Tel Aviv in February and met a bunch of people who I've heard now have both been called into the reserves, which are being called into the reserves is apparently much better than being on the front lines. But yeah, I mean, like, there's, there's just a lot of crypto founders in, in Israel. Like Starkware is all in Israel, just like this is extremely disruptive to parts of the crypto industry. Like, we have a large footprint in Israel.

• 52:37Ryan Sean Adams?

  There's that, and then there's the other context. Like, you ever want to read a pick-me-up? Go read Ray Dalio. He just sent this email. David and I just saw the headline here and the first paragraph. "What happened and is happening between Israel and Hamas, like what happened and is happening between Ukraine and Russia, should raise revulsion and fear in everyone. This is true, both because these conflicts reveal the unimaginably terrible and revolting ways people can and do treat other people, especially innocent civilians, and because no one anywhere can be sure that they won't someday find themselves in some horrible war." That last piece, "Because no one anywhere can be sure that they won't someday find themselves in horrible war."

• 53:19Ryan Sean Adams?

  Absolutely crazy decade, I feel like we've entered, and there's not a lot of certainty. And it feels like these sorts of things are hitting closer and closer to home. So, yeah, it's been a rough week for that stuff.

• 53:32David Hoffman?

  Yeah, yeah. Like I said, doom scrolling is in. There's no really good way to talk about, to pivot out of this subject.

• 53:39Ryan Sean Adams?

  Yeah, there's not.

• 53:40David Hoffman?

  There's not. But we are talking about Farcaster next, so we're going to talk about Farcaster now.

• 53:44Ryan Sean Adams?

  All right, let's do it. Hard pivot. Farcaster. Tell me about Farcaster.

• 53:48David Hoffman?

  Now 100% permissionless, so no more invites. You can now sign up directly through OPMainNet. Users can choose any client of their choice. There's zero dependencies on WarpCast, which is the first Farcaster client. Devs have full access to data and API via hubs. Farcaster stepping into the arena, the permissionless arena.

• 54:07Ryan Sean Adams?

  That's big. David, you ready to talk about Lido again? Yeah. We got to. Okay. This was actually a great post from David's rock climbing buddy, Mike Neuter. I love every time we say Mike Neuter, we've got to add David's rock climbing buddy. Okay. Five Shades of Grey. I almost said 50. Five Shades of Grey, Lido edition.

• 54:31David Hoffman?

  You would be excused from saying that. You did.

• 54:34Ryan Sean Adams?

  What is this post about? What's the TLDR?

• 54:37David Hoffman?

  Maybe I'll just back up and provide context from our perspective, Bankless perspective. Once upon a time, we brought on Lido to give, in defense of Lido, the episode that says, "Hey, Lido's good and we should accept it and it's great."

• 54:51Ryan Sean Adams?

  And to be clear, the guest was saying this.

• 54:54David Hoffman?

  The guest was saying this, yes. Just one side of Lido, the Lido debate. The other, then we recently had on Danny Ryan, was saying, "Hey, Lido's bad. It's too centralized, it's too, we should be concerned about Lido going over 33%." Right now, perhaps it's an attack. Right now in Ethereum, this is like, kind of, the bear market fight that we are currently going through. Is Lido good or is it bad? Like, two factions fighting. And even, like, internal EF members don't have homogeneous views about this whole thing. Like, I think Danny-

• 55:25Ryan Sean Adams?

  Very much Ethereum-aligned community members too, right?

• 55:29David Hoffman?

  Yeah.

• 55:29Ryan Sean Adams?

  Don't, like, it's pretty, there's a diversity of views, right? I don't think there's a clear cut answer.

• 55:38David Hoffman?

  Mike Neuter, also at the EF, wrote this-

• 55:40Ryan Sean Adams?

  David's rock climbing buddy.

• 55:41David Hoffman?

  David's rock climbing buddy, yeah. Also works at the EF, wrote this post called "The Five Shades of Grey: Lido Edition", which talked about some of the potential risks of having Lido have over 33% control, or even theoretically 100% control, and what those risks actually are. So we have Lido, or we have Hazu, saying, "Here's the case that Lido's good. Here's Danny Ryan saying, 'Here's the case that Lido's bad.' And now we have Mike Neuter saying, 'Well, like, let's be pragmatic and practical about these risks.'" Let's say that, like, so he gives like, five different variables here.

• 56:14Ryan Sean Adams?

  Shades of Grey.

• 56:15David Hoffman?

  Shades of Grey. So on one hand, Lido's roadmap clearly prioritizes decentralization. It is going to be a decentralized protocol. On the other hand, Lido financially benefits from the centralization of stake. So that's one variable. On one side of things, Lido can launch an attack on Ethereum consensus. But in reality, the outcomes are that Ethereum survives and Lido dies. Another variable, Lido is composed of 30 plus node operators, which is decentralized, it's distributed. But also DAO governance is a tool to coordinate cartel behavior. So DAO governance is the one centralizing factor. Next, some amount of moralistic pressure may be unavoidable.

• 56:58David Hoffman?

  So like the anti-Lido faction is just going to exist. But and also leaning too hard into altruism and social enforcement is damaging. Social enforcement, I think, is perhaps one way to view a violation of credible neutrality is a way to articulate this. And then lastly, there's a willingness in Ethereum to improve the LST foundation, the liquidated token foundation with layer one changes, changes to the layer one, AKA

• 57:23Ryan Sean Adams?

  Like protocol enshrinement.

• 57:25David Hoffman?

  Enshrinement, yes. And then on the other hand, pragmatism while considering the effects of enshrinement. This was like Vitalik's recent post about like, how do we choose to enshrine something?

• 57:34Ryan Sean Adams?

  Yeah.

• 57:35David Hoffman?

  So Mike is just like talking about the various attack vectors and the reality and the pragmatism about like, okay, sure, Lido could totally attack Ethereum, but why would it do that? That would be dumb and bad for Lido. Like kind of nuanced stuff like this. Great post.

• 57:48Ryan Sean Adams?

  Yeah, I think it's a great post. There's definitely some shades of gray. You know, the cleanest thing, though, David, and I think this is going to be a take of yours later, if I'm predicting your takes later, is actually to have some competitors into the ring.

• 58:00David Hoffman?

  Right.

• 58:01Ryan Sean Adams?

  Some competitive competitors. Where are they? Where are they?

• 58:04David Hoffman?

  I will invoke the words of Danny Ryan. Where is the vampire attacks?

• 58:08Ryan Sean Adams?

  Maybe you got one. So stay tuned for that, Bankless Nation. David's got an update on that. Did you see Sam Altman on Joe Rogan, David?

• 58:17David Hoffman?

  I did not, actually.

• 58:18Ryan Sean Adams?

  Okay, neither did I. There's just some long episodes here and, you know, Bankless is my only podcast I listen to, so.

• 58:25David Hoffman?

  Everyone must listen to all Bankless weekly episodes before they go out.

• 58:28Ryan Sean Adams?

  But there was, there was some crypto takes here. So this is Sam Altman speaking about crypto. He's not talking about world coin here. He's just talking about crypto in general. I'm going to play the clip. Here it is.

• 58:39Speaker 02

  Studied the world more and had to work in more places in the world. Like, it's amazing how much corruption there still is. But the shift to a technologically enabled world, I think, is a major force against it because everything is, it's harder to hide stuff.

• 58:53David Hoffman?

  Hmm.

• 58:54Speaker 02

  And I do think corruption in the world will keep trending down.

• 58:59Speaker 03

  Because of its exposure.

• 59:01Speaker 02

  Yeah.

• 59:01Speaker 03

  Through technology.

• 59:02Speaker 02

  If, I mean, it comes at a cost, and I think the loss, the like, I am very worried about how far the surveillance state could go here. But in a world where payments, for example, are no longer like bags of cash, but done somehow digitally, and somebody, even if you're using Bitcoin, can like watch those flows. I think that's like a corruption reducing thing.

• 59:29Speaker 03

  I agree, but I'm very worried about central bank digital currency and that being tied to a social credit score.

• 59:37Speaker 02

  Super, super against.

• 59:39Speaker 03

  Yeah, that scares the shit out of me.

• 59:40Speaker 02

  Super against.

• 59:41Speaker 03

  And that, the push to that is not, that's not for the overall good of society. That's for control.

• 59:47Speaker 02

  Yeah, I, I think like, I mean, there's many things that I'm disappointed that the US government has done recently, but the, the war on crypto, which I think is a like, we can't give this up, like, we're gonna control this and all that, that's like, that's the thing that like makes me quite sad about the country.

• 1:00:09David Hoffman?

  Wow.

• 1:00:10Ryan Sean Adams?

  War on crypto is a thing that he's most disappointed about for the US. Good take here. I mean, I can't disagree with that. I also agree.

• 1:00:19David Hoffman?

  I think he probably just sees crypto as just like riding on the canary in the coal mine for what's about to happen to AI. It's like, these are synonymous fights.

• 1:00:27Ryan Sean Adams?

  There's also a later Joe Rogan take on Bitcoin itself.

• 1:00:31Speaker 03

  I mean, the, the real fascinating crypto is Bitcoin. To me, I mean, that's the one that I think has the most likely possibility of becoming a universal viable currency. And it's, you know, it's limited in the amount that there can be. It's, you know, you, people mine it with their own. It's like, that to me is very fascinating, and I love the fact that it's been implemented.

• 1:00:59David Hoffman?

  This is the classic using the idea of Bitcoin more than Bitcoin specifically.

• 1:01:05Ryan Sean Adams?

  Yeah, but what a powerful idea it is. And you could argue that Bitcoin is certainly enshrining itself in the meme wars here.

• 1:01:12David Hoffman?

  Yes.

• 1:01:13Ryan Sean Adams?

  David, here's something weird. You know that that exchange that started on Avalanche is called Trader Joe's?

• 1:01:19David Hoffman?

  I've always wondered. It's called Trader Joe.

• 1:01:22Ryan Sean Adams?

  Trader Joe, okay. I've always wondered how Trader Joe got away with calling their exchange Trader Joe when there is a Trader Joe's grocery store that like I go to on like a weekly basis.

• 1:01:35David Hoffman?

  Oh yeah, you're a Trader Joe's guy?

• 1:01:37Ryan Sean Adams?

  Oh yeah, I'm a big Trader Joe's guy. I like, I love the culture. I love the vibe. I don't know. I'm a big fan. And apparently Trader Joe's, the grocery chain store, has said, no more. US grocery chain Trader Joe's is suing the crypto platform that's matching their name. So there you go. It's happening. Not just Gary Gensler coming after us.

• 1:01:57David Hoffman?

  This week, man.

• 1:02:01Ryan Sean Adams?

  But this is kind of cool. Uniswap, it's getting their first ZK EVM. What's going on here?

• 1:02:06David Hoffman?

  Yeah, Uniswap has been deployed to ZK Sync via Oku Trade. We've seen Uniswap be deployed everywhere, but this one is the first ZK rollup version of Uniswap. So pretty cool.

• 1:02:17Ryan Sean Adams?

  Awesome. David, what's coming up next, my friend?

• 1:02:20David Hoffman?

  Coming up next, questions from the nation. Are you guys seeing bottom signals yet? God damn it, yes. We've been seeing them all year. We'll talk about them. Chris Bernisky gives his ultimate sell signal for next bull market. You know, we all have to remember to set up a plan while you're sober. You have to press the sell button and think about selling the press the sell button when you are sober. If you do plan on pressing the sell button, Chris Bernisky gives you his sell signal and we'll talk about that.

• 1:02:44Ryan Sean Adams?

  The ultimate sell signal.

• 1:02:45David Hoffman?

  As well as, of course, what I'm bullish on, which is the vampire attack on Lido and what Ryan's bullish on, which I don't even know about. Well, we'll get to that and more, but first a moment, but first a moment to talk about these fantastic sponsors that make this show possible. Cello is the mobile-first, EVM-compatible, carbon-negative blockchain built for the real world. And now something big is happening. Introducing the Cello Layer 2. It's a game-changing proposal that's going to bring Cello's rapidly growing ecosystem home to Ethereum. Vitalik has shared its excitement for the Cello Layer 2 on the Cello Forum. So has Ben Jones from Optimism. But why? The Cello Layer 2 will bring huge advantages like a decentralized sequencer, off-chain data availability, and one-block finality. What does all that mean? Rock-solid security, a trustless bridge to Ethereum, and more real-world use cases for Ethereum without compromise.

• 1:03:30David Hoffman?

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• 1:04:45Ryan Sean Adams?

  Questions of the week. This one from Bankless Citizen Caesar Severus. Xerax Caesar Severus, of course, I should get that right. So many TradFi and crypto bottom signals out there. How do you contain your excitement? 10-year and 2-year yields look peaked. BOJ, that's the Bank of Japan, switching gears, ETH, Bitcoin, TA, looks near bottom. I feel like I'm ready to dance every time I check. Man, that's the kind of bullishness I need in my life, David. I love that. It's not even a question. Well, it kind of is. How do you contain your excitement? Because the official question, actually, well, this felt like more like a comment question. What's your reflection on this? How do you, David Hoffman, contain your excitement right now?

• 1:05:29David Hoffman?

  Yeah, yeah. So I'm just, we've just been getting 2019 vibes for the past like four months or so. The, uh, the contrarianism that is crypto is peaking. Like, it is so contrarian to be a crypto investor, to be in crypto in this present moment, while prices are just going down, down, down, down, down. Uh, and so like the bullish signals, uh, we've had Eric B. on talking about the Bitcoin and Ether ETFs, which TLDR, he just said, soon TM, like 75% chance of Bitcoin ETF before the end of the year. And the Ether ETF as a fast follow, wow, was not expecting that level of bullishness. Crypto prices are down. Um, uh, like so many things are happening.

• 1:06:10David Hoffman?

  Like all, like the, the risk to reward for crypto is like been up only all bear market. And especially with prices like in the absolute like doghouse.

• 1:06:20David Hoffman?

  This is, this is, I am so bullish. However, you can't just be bullish all the time. It's fatiguing. It's very fatiguing. Uh, and you need to, like, the market will be weird and against your opinion for longer than you will be able to have like over outsized exposure to crypto. So just because we all think it's going to be bullish season sometime soon, like you have to be patient. Um, when the, the cool thing that was the bull market of 2020, pre 2021, is that anyone who was in crypto in 2019 saw the 2021 bull market happening in 2020. We had like six months of crescendoing excitement and activity that was DeFi summer that led into NFT mania.

• 1:07:04David Hoffman?

  And ETH price, the blue chips, Bitcoin price, almost didn't do anything. They really didn't do anything. They kind of went up. Like Bitcoin Ether broke above $360 and went up to $480, which like we all knew was like, yo, it's on. Like, we haven't seen $400 in two and a half years. It's on. And then like two months later, we were at $1,700 or something where we are now.

• 1:07:30David Hoffman?

  But we had six months of like very strong indications of crypto is in before the blue chips ran. And so like, I think what I'm saying is like, you know, be excited and be patient. It will take time. It'll probably take more time than you think, but things will get excited, exciting again before prices move if we are pattern matching between 2019. Does that make sense? Do you agree?

• 1:07:53Ryan Sean Adams?

  Yeah, but that wasn't the question, David. The question was, how do you contain your excitement?

• 1:07:58David Hoffman?

  Oh, I'm telling them to not get too excited. Like, okay, spread it out.

• 1:08:01Ryan Sean Adams?

  So you dampen it.

• 1:08:02David Hoffman?

  Spread out your excitement.

• 1:08:03Ryan Sean Adams?

  Spread out your excitement. Yes. Okay. Yes. That's, that's a good answer. I don't have anything better. I just, I just doom scroll, I guess, to contain my excitement. That's what I, that's what I've been doing lately. Takes of the week. Here we go. The first take from Chris Berninski. David, I've always wondered, next bull cycle, we know it's coming. How will we know it's the top? How do we know when to sell? What's the, the sell signal? Is it Katy Perry's nails? Remember that was like 2017?

• 1:08:29David Hoffman?

  That was a great 2017 top signal.

• 1:08:31Ryan Sean Adams?

  That was like Instagram. She, she put different crypto logos on each of her nails.

• 1:08:36David Hoffman?

  Yeah. I think IOTA was on there.

• 1:08:40Ryan Sean Adams?

  We should have known in 2017.

• 1:08:42David Hoffman?

  Dana was on there.

• 1:08:43Ryan Sean Adams?

  Okay. How about, how about 2022? What was the?

• 1:08:45David Hoffman?

  FTX buying Miami Heat arena.

• 1:08:49Ryan Sean Adams?

  Oh, that's a good, that's a good one.

• 1:08:51David Hoffman?

  All the arenas being bought. Yeah.

• 1:08:53Ryan Sean Adams?

  Okay. So what's going to be the next top signal? Well, Chris Berninski has the answer. What are we looking at here?

• 1:08:59David Hoffman?

  Okay. So this, this has been going around in just like normal culture. This has been in vogue. There's this big structure in Las Vegas. It's a dome. It's a very big dome and it's all LEDs. It's a complete massive dome of LEDs. And right now we're looking at this massive smiley face on it. I've seen it be a basketball promoting some like basketball game. I've seen the inside of it. And it's like one of the coolest looking concert arenas of all time. And advertising on the sphere will cost $450,000 a day or $650,000 a week. The sales signal is when you see some dumb startup exchange, call it, call it some like letter FTX or something.

• 1:09:43Ryan Sean Adams?

  It's not going to be an exchange next cycle, David. Don't, don't, it's going to be something new. It's going to be something different.

• 1:09:48David Hoffman?

  Maybe some, some cool new crypto thing that has never existed before. That's probably a fraud. Is, is buying advertising space on the sphere. I think that is just a good take.

• 1:10:00Ryan Sean Adams?

  All right. So I guess we're not doing this on 2024. We're not putting the bankless podcast on this thing.

• 1:10:05David Hoffman?

  Will you see NFTs on the, on the sphere? Yeah. You need to sell those NFTs.

• 1:10:10Ryan Sean Adams?

  Okay. There we go. We got our top signals prepared already. This is a take from Justin LaRoe. What, uh, what are we looking at here? It looks like ads in the paper. What's he saying?

• 1:10:19David Hoffman?

  Yeah, we're looking at the Argentine paper and then also Argentine, uh, Nikes. So you could buy a car in 20, 2006 in Argentina for 31,000 pesos, 31,000 pesos.

• 1:10:34Ryan Sean Adams?

  Brand new car.

• 1:10:35David Hoffman?

  Brand new car in 2006. In the year 2023, you can buy a pair of sneakers for 36,000 pesos.

• 1:10:44Ryan Sean Adams?

  Wow.

• 1:10:44David Hoffman?

  So from car to sneaker from 2006 to 2023.

• 1:10:48Ryan Sean Adams?

  Wow. That's absolute.

• 1:10:50David Hoffman?

  That's inflation.

• 1:10:51Ryan Sean Adams?

  That's what that looks like.

• 1:10:52David Hoffman?

  Yeah.

• 1:10:53Ryan Sean Adams?

  And okay, there we go. Um, David, what are you bullish on this week? Don't tell me it's the Argentine peso.

• 1:10:58David Hoffman?

  It's not the Argentine peso. No, I'm bullish on vampire attacks. You know what a vampire attack is, right, Ryan?

• 1:11:04Ryan Sean Adams?

  I do. Uh, but tell me, refresh, refresh our audience.

• 1:11:07David Hoffman?

  Okay. Before I go into this, I'm going to disclaim, I am an angel investor in the thing that I'm talking about right now.

• 1:11:14Ryan Sean Adams?

  So you're shilling us right now.

• 1:11:15David Hoffman?

  I am full chill, committing the sin. I am the worst, et cetera, et cetera, et cetera. You can see full disclosures at bankless.com slash disclosures.

• 1:11:23Ryan Sean Adams?

  Tell me a dirty show. What do you got?

• 1:11:25David Hoffman?

  We're doing the vampire attack. Okay, so Lido's got $14 billion of TVL. That is vampire attackable. One thing that Danny Ryan was talking about in his podcast with us and the other, it's just like, where's the competition? Where's the vampire attack? He literally said, where's the vampire attack?

• 1:11:41Ryan Sean Adams?

  LST staking providers actually trying to eat into Lido's market share is what you're talking about.

• 1:11:46David Hoffman?

  Exactly. So how would a vampire attack work? We saw this with sushi swap versus uni swap. They, you take ether or staked ether from Lido. You buy staked ether from Lido. And then you go over to Diva, the protocol in question, and you deposit it in the Diva vaults. And then you get rewarded with Diva tokens for putting TVL into the Diva vaults. And then Diva swaps the staked ether for Diva ether and gives you back tokens. So it's incentivizing, it's an economic incentive for you to take Lido's TVL and put it in Diva's vaults and you'll get Diva tokens for it.

• 1:12:18Ryan Sean Adams?

  Why would I want, besides the token incentive, why do I care? Like, why is that better than Mido?

• 1:12:24David Hoffman?

  Okay, so that, okay, why, why is Diva, what is Diva? Why does Diva? Diva is a LST protocol, which if I wanted to encapsulate what it is in a meme, in a very short sentence. So you know how like layer twos are going after EVM equivalents, like optimism, Arbitrum are trying to go after EVM equivalents? They are trying to be one-to-one compatible with Ethereum. That's kind of their strategy. Diva is doing something very similar with Ethereum staking. So it uses a lot of the same infrastructure of Ethereum staking as a microcosm of Ethereum. So it's like a fractal spinoff, a mini version of grander Ethereum proof of sake, inside of the Diva vaults. What do I mean by this? How does it work? Diva uses DVT, Distributed Validator Technology, AKA squad staking. And they make a, and they have the Diva contracts.

• 1:13:09David Hoffman?

  And you, as a validator who can run a node, can permissionlessly, unlike Lido, permissionlessly enter the Diva registrar with just one ether as collateral. And you run a node and using DVT, you band together with others to produce a staking validator when it's time for Diva to produce a block. And so there's this band of Diva validators that have at least one ether of capital and they Register with a Diva contract by submitting the Ether into their contracts and then using DVT when Diva is called upon to produce a block for Ethereum. 16 independent validators come together to create a virtual node. This is how DVT works and then they produce the block. And then that is the Diva produced LST block and then Diva.

• 1:13:54Ryan Sean Adams?

  Like just in time, at the time the block is produced, the 16 come together like randomly. They're randomly selected.

• 1:14:00David Hoffman?

  Randomly selected. How are they randomly selected? They use the beacon chain randow randomness, which is how Ethereum proof of stake also selects for Ethereum validator. So it's repurposing and reusing components of Ethereum staking to produce Diva staking with this one very core piece of unlocked technology, which is DVT. And so Lido curates professional validators that have their one job of being, having high uptime. And it's curated and permissioned to professionals, to the experts. DVT is that technology that democratizes that power to the masses. Where if one of the 16 people that come together, or three or five of them are down because they're amateurs,

• 1:14:43David Hoffman?

  because of DVT, you only need parts of that squad to sign off and everyone is up. And so it's, it's how you get 99.9999% uptime because you have redundancy without dual slashing risk. So it is a technically, in my mind, my opinion, technically superior protocol that is also executing a vampire attack upon Lido, which is why I'm bullish.

• 1:15:07Ryan Sean Adams?

  So you think it has a credible chance at some of this market share way? And is more decentralized than, than some of the alternatives out there? It's very cool. Well, another disclaimer I'll add for you as well is this is a very new protocol. Of course, I think you're, you're writing a post about this, which is, you know, why I know. But, but smart contract risk is the key thing you have to worry about at this stage of the game.

• 1:15:31David Hoffman?

  Like all protocols.

• 1:15:33Ryan Sean Adams?

  Well, there you go. All right. Well, thank you, David, for your, your shillfest there.

• 1:15:37David Hoffman?

  Absolute the worst. I am the worst.

• 1:15:40Ryan Sean Adams?

  I mean, it's good to have some competition in the ring for sure. And this is a credible attempt at it. And there are, there are others coming down the pike too, but I'm excited to.

• 1:15:48David Hoffman?

  Overall, I'm just a fan of the drama.

• 1:15:50Ryan Sean Adams?

  I know you are. I know. You just step right in, don't you, my friend?

• 1:15:54David Hoffman?

  All gas.

• 1:15:54Ryan Sean Adams?

  All right. Well, you gotta ask me the question now.

• 1:15:57David Hoffman?

  Ryan, what are you bullish on?

• 1:15:58Ryan Sean Adams?

  I'm bullish on the price of ETH. Speaking of shillers.

• 1:16:03Ryan Sean Adams?

  It's like a really good price right now. It reminds me of, um, do you remember 2019, 2020? When we were floating in this range of between, it was like 150 and like 200, 250 type that range. And it felt like we were there forever. 1600 is like the new 200 to me.

• 1:16:23David Hoffman?

  Well, we're at 1530, so we're well below 1600.

• 1:16:27Ryan Sean Adams?

  There you go. This whole range, right? The whole range, think of like a thousand to like 1600 is kind of a range. I feel like a thousand, thousand be a bit low, but that to me is parallels between like 150 and 300, where it felt like we were floating there forever. Um, and like, I think when you're evaluating the price of ETH, you have to ask yourself of like, is it going to go down again? Right? And the answer to that is yeah, it could totally spike down. I mean, we could get to a thousand. We could go even below a thousand. Macro could go crazy as well. But I guess I'm just feeling echoes of the last fractal pattern of the 200 to 300 range. Except this time, there's no existential, like, are we going to make it type of crisis?

• 1:17:11Ryan Sean Adams?

  There's like more building, there's more block space, there's more money printing going on than ever before. Um, and yeah, I, um, I think it's a very bullish, good time to start, if you haven't already, buying Ether.

• 1:17:27David Hoffman?

  Yeah.

• 1:17:27Ryan Sean Adams?

  And I, I remember like a series of tweets I started making within this price range of like, ETH at 200 is hilarious. And I kept like tweeting this out as it would hit 220 and you know, it would go higher and higher. I'm almost at that stage where I feel like the price of ETH is just, um, very low relative to the potential. Almost there. It's almost stupid. It's almost stupid. One other thing I was, I was thinking of with Ether in general is are we investing in ETH, David, because we're uber optimistic or because we're uber pessimistic?

• 1:18:00David Hoffman?

  Bro, you're gonna bring that existential question into this end of the weekly roll up?

• 1:18:04Ryan Sean Adams?

  And I was just like-

• 1:18:05David Hoffman?

  A buzzer beater 50 minute question.

• 1:18:07Ryan Sean Adams?

  I forgot, right? It's like, it's for me, it's a little bit of both.

• 1:18:12David Hoffman?

  100% both. The world's falling apart. World's falling apart and we're putting it back together.

• 1:18:19Ryan Sean Adams?

  So there's some optimism and some pessimism there. The pessimism is the world's falling apart. The optimism is we're building something new.

• 1:18:27David Hoffman?

  We have the solutions.

• 1:18:30David Hoffman?

  If we didn't have the solutions, then it would just be pessimism. But we have the solution.

• 1:18:34Ryan Sean Adams?

  So it's a weird place to be, right? When you, when you look out and it's, I mean, really shitty week for the world.

• 1:18:39David Hoffman?

  Right. So I gave this take during the Linaldin debrief that only goes out to bankless premium subscribers who subscribe to the

• 1:18:46Ryan Sean Adams?

  There you go shilling again. There you go shilling.

• 1:18:48David Hoffman?

  Ad-free RSS feed. So if you never want to hear another bankless shill about other people's products, who can just hear me shill out my products? So this is a take that I gave on the premium feed. Like, I think we, during 2021, you and I were just like ultrasound money, ultrasound money, burn, burn, burn, burn, burn. Maybe we kind of over-indexed on that. Maybe that was exhausting for the listeners.

• 1:19:09David Hoffman?

  Why do we focus on the burn so much? Is it because the ETH, when ETH burn, it goes, number go up? And that's what we want because we're here for the money? Or are we looking at the Argentine peso inflate at 150% a year? The Turkish lira inflate out over 100% a year. You, the United States dollar has a destiny to inflate. And we are just looking at people's savings being like eaten away, either slowly inside the United States or extremely rapidly everywhere else. We're watching just the GDP of global economies fall apart as a result of this. Entering low-trust societies as a result of fiscal mismanagement at best and corruption at worst, which leads to more inflation.

• 1:19:52David Hoffman?

  So when we see Ethereum, the protocol, having economic surplus and taking that surplus and putting it back into the money via the burn. And we are increasing the savings of the user base, the holder base of Ether as a direct inverse relationship to the decay of people's savings and the decay of the fiscal situation in the United States. That is why we celebrate the burn. It is the, is the same reason why we shit on inflation is why we celebrate the burn. It is a, it's a benefit to the savers, to the widest possible distribution of the Ethereum network, the Ether holders. It is something to celebrate. It is something optimistic. It is a reason to be optimistic about the future. We are putting back, we are strengthening our economy.

• 1:20:36David Hoffman?

  And so it's not just number go up. It is the inversion of the things that we are bearish about in society. That's why we celebrate the burn.

• 1:20:44Ryan Sean Adams?

  Well, that is well said, my friend. That, that is the most spiritual reason to support the burn ever.

• 1:20:49David Hoffman?

  Right.

• 1:20:50Ryan Sean Adams?

  You know, not just number go up. Yeah, I agree with you. Yeah, that's part of it, true.

• 1:20:56David Hoffman?

  Come for the money, save for the tech. Come for the tech, stay for the money. Doesn't matter. Just stay. Please stay.

• 1:21:01Ryan Sean Adams?

  Number is not going up though, right now. And that's the meme of the week. Look at this. What are we looking at here? Meme of the week?

• 1:21:07David Hoffman?

  The meme line is the sellers are getting exhausted. And then we have a picture of the sellers. I don't know if I should know who this person is, but he looks like he could run three marathons in a row.

• 1:21:18Ryan Sean Adams?

  They are not exhausted.

• 1:21:20David Hoffman?

  They are not exhausted.

• 1:21:20Ryan Sean Adams?

  At that point in the market. There we go. Disclosures. We mentioned David and I. I didn't mention myself. I am also an angel investor in Diva. Maybe that's why I let you go on so long about it.

• 1:21:33Ryan Sean Adams?

  We've got all of our investments on thebanklist.com/disclosurespace. Just a reminder, we don't do paid content. We're not journalists. We are long-term investors. Recent disclaimers. Crypto is risky. You could lose what you put in, but we are headed west. This is the frontier. It's not for everyone. But we're glad you're with us on the bankless journey. Thanks a lot.