Friday 5/29 Livestream w/ David & Anthony Sassano

Every week(ish), David and Anthony do a Friday Weekly Livestream to chat about the week in Ethereum, the markets, and whats coming in the short term future. Enjoy this unscripted conversation! ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎖 CLAIM YOUR BADGE: https://newsletter.banklesshq.com/p/-guide-2-using-the-bankless-badge ------ BANKLESS SPONSOR TOOLS: 💰 GEMINI | FIAT & CRYPTO EXCHANGE https://bankless.cc/go-gemini 🔀 BALANCER | EXCHANGE & POOL ASSETS https://bankless.cc/balancer 👻 AAVE | LEND & BORROW ASSETS https://bankless.cc/aave 🦄 UNISWAP | DECENTRALIZED FUNDING http://bankless.cc/uniswap ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures

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

• 0:13David Hoffman?

  Hey, Bankless Nation. We are doing something new on the Bankless Podcast today. For those that don't know, me and Anthony Cisano, every Friday, not every Friday, but a decent number of Fridays, we get together and just do an unscripted, impromptu livestream. And so you can always catch that Friday evenings at 6:00 PM Pacific Time. And me and Anthony, we just talk about a bunch of Ethereum stuff. A lot of the Bankless Podcasts and livestreams that you guys watch are very, we have an agenda. We have topics that we want to get through. This is the time to have just completely unscripted conversations about what's been going on in the week of Ethereum with David and Anthony of The Daily Gray. If you guys aren't listening to The Daily Gray, I highly recommend the YouTube channel and also the newsletter.

• 0:58David Hoffman?

  And Anthony just puts out roughly like 30-minute-long videos, just updating everyone about what's going on in the Ethereum ecosystem every single day. It's a fantastic resource and that's kind of why I wanted to get closer with Anthony as a content producer with the Bankless Podcast and Bankless YouTube. And so that's why we do these weekly livestreams. One time, we brought on DC to chit chat. And in the moving forward into the future, maybe we will bring on other guests for just, you know, some Friday evening fun, Friday evening fun times. And I think we're going to do more of that in the Bankless ecosystem. Me and my buddy, Michael Wong, Chief Culturalist over at Bankless, we are chewing on something fun for some Friday evening entertainment.

• 1:39David Hoffman?

  But until that comes around, just enjoy these weekly livestreams with me and Anthony Cisano. And now, we're putting them on the Bankless Podcast as well for your weekend snacking. So I hope you enjoy this conversation. It was pretty fun. The theme this week was ETH Layer 2 Summer, and as well as the conversations around, is this a dead cat bounce? Or are we just in a stagnating bull market? So I hope you enjoy this conversation. But before we get into it, we have to take a moment to talk about some of these fantastic sponsors that make this show possible. Balancer is DeFi's most powerful automated market maker. Typical AMMs just have two tokens inside of one liquidity pool, which can lead to fractured liquidity across the many pairs in DeFi. With Balancer, you can access the full power of multiple tokens

• 2:23David Hoffman?

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• 3:07David Hoffman?

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• 4:42David Hoffman?

  What's up, Anthony?

• 4:44Speaker 02

  Hey David, how you going?

• 4:45David Hoffman?

  Oh, you know, hanging out. I'm in a different place right now. As we, we were literally just talking about where I was, not at my own home a second ago. And then we decided to live, but now I'm talking about it again. But yeah, I'm in an Airbnb in San Francisco on my way home.

• 4:59Speaker 02

  Mm hmm, mm hmm. Yeah, we're talking about how like you, you're able to like travel all over the country. And I'm just locked down in Melbourne again in my house.

• 5:05David Hoffman?

  Yeah, yeah. I mean, as if it's any different when you work in the world of crypto. But yeah, yeah, yeah. World's in a, in a weird space right now. Um, so I guess I won't see you at Bitcoin Miami in a week, a week. Yeah.

• 5:20Speaker 02

  No, no.

• 5:22David Hoffman?

  I'll tell you all about it though.

• 5:24Speaker 02

  Yeah, I'm sure I'll say all about it on Twitter because like there's tons of people going. And I mean, I was just saying to you, I saw that you can't even talk about anything but Bitcoin at the conference. So I'm like, I think there's going to be a lot of people just hanging around outside the conference. Just at different places, which you know, it's pretty cool. That's what usually happens with conferences anyway, like you go and then, you know, you do go to the main one, but you, you also kind of like hang out around it, which actually that's the main thing I loved about conferences. Just being able to hang with friends, like with online friends in real life. But yeah, yeah, do that. I won't be able to do that for a while.

• 5:54David Hoffman?

  There's two people that go to conferences and people that go to conferences and then people that go to hang out. Right? And, uh, the, not the last time, the last time we hang out, hung out was at ETH Denver. Uh, and ETH Denver is, is very like, I would say participatory, uh, conference. But the time before that was ETH New York and ETH New York was very much separated between like, it was meant for builders. It was meant for a hackathon people and participants. And then there was all the other people who couldn't code, who just like were going there because we knew other people, other Ethereum people were going there. Uh, and so that, that, yeah, that was ETH New York. That's where I met Eric for the first time. Uh, oh wait, you weren't there. Yeah, you weren't there. You weren't there. Oh, yeah.

• 6:34David Hoffman?

  I met Eric, Eric, uh, for the first time, met Hudson for the first time, uh, and literally just like this like division between like people who are furiously typing on their computers, like hacking, like Preston Van Loon and all the other people who are just like fucking leaning back in their chairs. It's like, oh, it's good to see you guys. This is great.

• 6:51Speaker 02

  Yeah, yeah, yeah. I, I always love that though. Cause like, I remember at eight Denver, there, there was like three levels or something of, of devs of developers, like doing the hackathon. And then there was just everyone else crowding around. And it's funny because you have like different groups of people. One of the groups that you can pretty easily spot are like the VCs and the investors. Cause they'll, they'll huddle together and they'll, they'll just wait. Uh, cause they want to, you know, they want to obviously find their next investment and things like that. So, and you can kind of like see them moving around, like just looking at projects. And then yeah, as you said, they've got the laid back people just kicking it, hanging out. Um, and then the, the, the hackers, but man, you're making me nostalgic now. I miss it. That's for sure. Haven't been to a conference since eight Denver. I haven't been able to go.

• 7:29David Hoffman?

  I'm fucking missing them, man. Like if, for all the listeners out there, if you're ever on the edge of like, do I go to this a conference thing or not? Like, go. Absolutely go. Like it's, it's, it's where fucking Ethereum culture is. Like if you want to experience what crypto culture is, you gotta go for the conferences. Speaking of culture and conferences, did you, you, you just woke up. So you probably haven't seen the Mike Dudas tweet. Okay. So Mike, Mike Dudas tweeted out a poll and he goes, what are you going to do in Miami next week? Since we're all going to be there? Option one Bitcoin conference, option two Ethereum slash D5 slash NFT, option three, partying, option four, all of the above. Ethereum slash D5 slash NFT is coming in at number one at forty point five percent.

• 8:10David Hoffman?

  Bitcoin conference is the loser at eight point four percent. And then partying and all of the above are roughly tied. I need to go, I was, I was trying to find like the actual poll because I voted on it a while ago and took that screenshot, but still like the, and, and like, I was planning on going to the conference until I found out that like so many Ethereum people are just going to be hanging out. And like, if you're, if the Bitcoin, literally the Bitcoin rules are you can't talk about Ethereum stuff. This is Bitcoin only conference, then I guess I'll just go outside then.

• 8:40Speaker 02

  Yeah, exactly. Uh, yeah, man. But I, yeah, I, I, as I said, like, I've been seeing tons of people say they're going and I, I, you know, I kind of expected that. There's a lot of Ethereum people going and it's just, it's more fun to talk about. Like, I really don't, like, I don't want to bash Bitcoin again here. I just like, it's more, it's just more fun to talk about Ethereum and DeFi stuff, I guess, in general. And, you know, I mean, that's what we talk about all the time. Like, I literally talk about it every day. You guys on Bankless talk about it all the time. So, you know, it's, yeah, exactly. It never gets, it never gets old and it's something always new and fresh. And, you know, you just mentioned that I just got up. I did. And I literally have not caught up on what's happened. I looked at Twitter and like, I just saw all the updates. I'm like, oh my God, a lot happened while I was sleeping again. Do you know what happened with, apparently there was some Twitter spaces where people were talking about how much money they made from pre-sales. Did you see that?

• 9:26David Hoffman?

  Oh, I saw some rumor about that, but now that, that's, that's still something I'm not, not privy to.

• 9:31Speaker 02

  Yeah, I don't know. I think there was something about like, uh, some, some big influencers on Twitter promoting, you know, pre-sales they got access to and then, you know, you know, selling them off or whatever. But, uh, regardless of that, uh, I think, well, we haven't done this in two weeks. So the, the price, man, the price, what happened? Where did it all go wrong?

• 9:48David Hoffman?

  Oh, my God. Well, two weeks ago, what, what were we doing two weeks ago? It was, it was like at the all time high, huh?

• 9:54Speaker 02

  Yeah, yeah.

• 9:55David Hoffman?

  Okay, so, so I have two topics on the agenda for so far today. It's the question of-

• 9:59Speaker 02

  You have an agenda. Oh, God, you betrayed me.

• 10:02David Hoffman?

  Two topics. I know, it's because I know what you want to talk about and you already brought up one of them. So give me the benefit of the doubt on the other one. The second one is layer two summer. For, the, the other one, like, come on, I, come on. Like, I know what we're talking about.

• 10:15Speaker 02

  Yeah, yeah, we're in sync.

• 10:17David Hoffman?

  The first one is, uh, dead cat bow, bounce, question mark. Since you brought it up, I guess we have to talk about dead cat bounce, question mark.

• 10:23Speaker 02

  Uh huh. Uh, man, I don't think so. Like, ah, God, you know, it's, it's funny because we, like, the people I talk to, you know, they're on both spectrums, right? There's like the perm of wolves and everything who find it really hard to be bearish in general. And I fall into that bucket. Like, this is why I can't trade is because I'm just bullish all the time. Uh, and then you have like the people who are bearish, but they're only bearish because they want a better entry from what I've noticed. Like, they want to just buy lower and, you know, and, and obviously people who are- bullish just wanna sell higher. So this is, this is what's always funny about markets, you know, you can never really get an unbiased view from people because everyone's got their own agenda. Everyone's got their own reason for wanting the market to go up and down. So you can never get like someone uh saying, oh, well, I actually think it's gonna do this based on this,

• 11:05Speaker 02

  this and this because this makes the most sense. It's like, well, this makes the most sense to me for my bags.

• 11:10David Hoffman?

  Because of what you're looking for, something like something you're looking for this actually is what really the through line is.

• 11:16Speaker 02

  Mm hmm. Exactly. So, but yeah, I don't know. I don't know. I don't know. Like, I think everyone kind of got caught off guard by this. That was, it was unexpected by, um, maybe not everyone. There were some people who, who were calling for like a three K ETH. But that was based on like technicals and things like that. But then, you know, once we fell through that, we just fell even further and I, it's been spoken about a lot lately, but I really do think it's the leverage in the system. Uh, there's just so much of it and people just like gets, you have such easy access to it that you have these death spirals because there's never enough spot liquidity to, to match this when, when there's liquidations and stuff like that. So, um, but yeah, man, I like just generally, I mean, there's, it's, it's impossible for me to be bearish on anything right now. Even though the prices keep going down, it doesn't matter. Like, well, when you think about it, like, it was,

• 11:59Speaker 02

  like, I was really bullish in, I mean, we were both really bullish during 2019, like the depths of a, of a, of a bear market. Uh, and lots of stuff was happening, but the price wasn't moving. And when it comes to markets, they, they can kind of have a mind of their own sometimes where both positive and negative news won't do anything to the markets. It'll just be like the market's doing the market things. So, uh, yeah, so I guess that's where I'm sitting right now, but I'm sure you're in like a similar boat, y'all.

• 12:22David Hoffman?

  Yeah, there, I mean, we could talk about how there was, there, there was generally a just like kind of shitty two weeks in the narrative world, mainly on the Bitcoin side, right? Like Elon Musk's being erratic was bad. Like Doge coins, like doggy tokens making the front page news, that was bad. Like there are shit, there's shit that happened, like the mind, the actual, uh, real news, which is the China actually banning Bitcoin, actually doing it. That was bad, right? So we, we had like a series of like one, two, three, four punches in a row right after, right after just rocketing up. And so we had like no price consolidation. We hadn't, we didn't establish the highs and then we got smacked by like really bad news. Been, and then Bitcoin dumped and pulled the rest of the market down with it. And like,

• 13:07David Hoffman?

  I think in the grand scheme of things, you're totally right. There's like, When when Ether goes from like forty-three thousand dollars down to seventeen hundred dollars in like seven days and then it rebounds a thousand dollars off of the floor. And then it take for example, we can talk about this hypothetical scenario that it keeps on going. Over the long term, that's just a smooth line, like it's it went up really fast and went down really fast, but then but then it was a smooth through and through. And what you're saying about like the there's just not enough not enough liquidity in the market. It's just an anomaly of the fact that like the spikes are so high because of how little liquidity there is. And so you round out the spikes because it's noise. It's like it's like um it's like an outlier, right?

• 13:48David Hoffman?

  And just the the fact that we dipped down to seventeen hundred dollars for a brief couple hours in time was literally what you're saying. You've just got to clear out the fucking leverage bros. Uh and so liquidity just like disappears and so the price can do anything. The price can go to fifty dollars. And then it'll just go back to twenty-five hundred dollars a second later. Uh and that's just an anomaly. That's not actually something that you should really like. It's more of an anomaly than it is real. The reason why it's real is because a lot of people did did get liquidated and like a sixty percent drawdown off the top will spook anyone, no matter what. Like watch watch your sixty percent of your net worth get deleted. Doesn't matter that you just only made it in the last like forty-five days. Like you still got deleted. Um and so that's that's my analysis.

• 14:29Speaker 02

  Yeah, yeah, I think so. And and that's why I think like even though obviously long term bullish, I still think it's going to take a little bit to to kind of like keep going up from here. I think we're gonna have to consolidate. Yeah, exactly. We're gonna we're gonna be here.

• 14:41David Hoffman?

  Too fast anyways.

• 14:42Speaker 02

  Uh huh. Yeah, yeah, I mean, I see this is the thing.

• 14:46David Hoffman?

  He was like, that's an appropriate level of speed, actually.

• 14:48Speaker 02

  I I actually think that ETH wasn't going up fast enough, if I'm being honest. Um if if if we were, you know, traditionally, when you see a drawdown like this on um, you know, large market cap assets like Bitcoin or ETH. You know, if we're looking at past cycles, you would you would expect to see maybe a forty percent drawdown at most. We've seen that already, right? We saw that from, I think, twenty-one hundred to thirteen hundred was about a forty percent drop or something like that. Uh where whereas, you know, getting a sixty percent drop on ETH is is incredibly scary, especially when ETH has such a high market cap these days and has such a wide and varied holder base. Um and I know we we kind of like bounced off that really quickly, but the thing is like, think about it, forty-four hundred to seventeen hundred in a week is crazy. Like we fell way faster than we we we went up.

• 15:31David Hoffman?

  Yeah, but only like two or three times as fast. Like we went up pretty fast, bro.

• 15:36Speaker 02

  Yeah, yeah, but I don't know, like maybe.

• 15:37David Hoffman?

  It was like two and a half times as fast. It was like three, three weeks versus one week.

• 15:42Speaker 02

  But you know, but the thing is, I actually think that ETH, so it's hard to say like what's fairly value, but I actually think that ETH didn't go up fast enough. But I think that what ended up happening was that there was a lot of other crap happening, right? There was, as you mentioned, the dog tokens. There was just a lot of froth in the market generally. Bitcoin was actually weak for quite a while. You can see on the chart that Bitcoin was weak for like three months, man. It was like ranging and it was actually going down. It wasn't exactly going back up.

• 16:08David Hoffman?

  Ranging down, not ranging up, yeah.

• 16:09Speaker 02

  Yeah, exactly. And then, you know, you mentioned all the bad news that came out, like the ESG narrative, the Elon Musk stuff, all that sort of stuff. That just, you know, I think that just like basically or like tipped over an already wonky kind of horse, so to speak, right? It was already ready to kind of like, you know, dump. Uh, and also Bitcoin dominance had gotten slaughtered. We went over this two weeks ago, how Bitcoin dominance gotten, had gotten absolutely slaughtered, which means that there was, people, people kept saying, oh, when's alt season? I'm like, guys, it was alt season. Yes, you, you, you're, you're waiting for DeFi season, which is different to alt season. Alt season is literally all the scams and like absolute crap pumping. And we had that, we had that in a very big way. It's just that people think that alt season is means that their bags are gonna pump. No, it doesn't mean that at all.

• 16:52Speaker 02

  It means that just really shitty bags are gonna pump, but maybe your bags aren't part of that shitty bag. So, um, yeah, that, but yeah, I, I think that definitely you're right. That this is gonna spook a lot of people. It's definitely gonna spook a lot of the institution, maybe not all of them, but a lot of them, the institutional investors who are like, wow, you know, this is really volatile, but maybe they won't allocate as much money now. They'll allocate some, they'll be like, okay, well, this, this asset class is still extremely risky and extremely volatile. Let's allocate less than we were going to because of it for now.

• 17:20David Hoffman?

  Right.

• 17:21Speaker 02

  Uh, but, but yeah, man. And then, and I actually think the narratives aren't going away for Bitcoin. We've, we've spoken about this before and just like the, the energy use narrative is just such a bad one, I think in general for, for Bitcoin. And it doesn't matter if it's right or wrong. It's a narrative that's very powerful and people just gonna, gonna look at that and be like, wow, Bitcoin uses this much energy. Like this is, this is horrible. Uh, whereas with, with Ethereum, soon we'll be able to just say, well, Ethereum doesn't. Use mining, let's see it, like we don't have to say anything else, it's like, doesn't use mining.

• 17:48David Hoffman?

  Right, it uses literally nothing, that's the whole point. Um, well, it actually uses ether, which is not nothing, but from, from Nick, Nick Carter was making this point about how, he was talking ironically, he was talking about like the Chia or Chia network, which uses um, like, proof of hard disks, and so you just have like hard disks farm, farming where you have all these hard ducks, hard disks, and they're just writing random data to these hard disks and then deleting them over and over and over again. And so like, and then the hardware's burnt out, same model as the ASIC, uh, what, what the hell was he saying? He was, he was talking about how um, this network got so large so fast that it actually started to tap into like, commodity resources, and then he was talking about how like,

• 18:30David Hoffman?

  this is why you don't like bake financial products into like general like commodities like corn or something, because like, society needs corn, like, we don't, we don't want the prices of corn to artificially skyrocket for no fucking reason for this art, like for this weird thing. And, and then he's like, then this is why Chia makes no sense, now, but to me, I was so confused because then he turned it into a positive about Bitcoin, and I'm like, dude, what's the one commodity that all humans need? It's energy, like, what? Like, I know we can create more energy, but we can also create more corn, like, I didn't, I, I, I lost that part of it, like, that's the one part about, the one thing, few things that Nick Carter said, I was just like, I don't get this.

• 19:08Speaker 02

  Yeah, I, I don't, I don't get the hypocrisy, and I think when, I was actually thinking about this, and I was, I was going through a scenario in my head, and I was thinking, okay, if I asked a Bitcoiner, hey, aren't you being, you know, hypocritical by saying that Chia is a waste, but Bitcoin isn't, uh, you know, wasting, kind of electricity here and, and kind of like hardware, I, their reply would be, yeah, but Bitcoin's worth it, like a hundred percent, I already know what their reply would be, right? And, and, and, you know, that's actually a fine stance to take, I actually think that's, that's, that makes sense, but at the same time, you really shouldn't be calling out other, other kind of like waste. You know, as a Bitcoiner, you think that Chia is useless, and you think it's worthless, but like, there are people who like Chia and, and, and like,

• 19:51Speaker 02

  find it valuable, and mine it, and want to make money off it, um, so yeah, it's extremely. And this is why the debate is never going away because it's it's just this objective that there's no objective answer here. There's no good or bad. It's what people think is good or bad and what what they feel is is is a benefit or not for the planet. So. Yeah, I just, I don't know, man, that that that that that narrative has extreme headwinds and, you know, I know you mentioned Nick Carter. He does a lot to fight it off and. Puts out a lot of good work around it, but that's not going to matter. Like, most people aren't going to read Nick Carter's blog posts. Like, it's as simple as that.

• 20:21David Hoffman?

  Right. He's just like hammering out blog posts after after blog posts, but like, he's doing his best, man, but like, he's not winning. Like, he's he's losing and like the whole Elon Musk. And Michael Saylor, like Mining Council thing, like we're going to establish the North American Mining Councils to like make Bitcoin green. That's a that's capitulation. That's Bitcoiners admitting defeat and that they have to tackle this problem head on. And then they did it in this extremely ungracefully way where we're going to like establish the Council of American Bitcoin Miners. And so all of you Bitcoin miners, which is an opt in, but still like. Let's all get the miners all in one spot and have a council like. Come on, guys. What is this?

• 21:02Speaker 02

  Yeah, it's it. It definitely looks like fear, like a little bit of fear where they're like, well, we know this narrative is really bad. And if we don't get on top of it, it's really bad for Bitcoin. And they won't ever say it, but they they'll think to themselves, well, you know, Ethereum doesn't have these problems soon enough. Like, even though some of them will say Ethereum is never going to prove a stake. What's like, it is. And once it does, like, what do you got? Like, after that, it's it's like, it's pretty bad. But. And I'm just so happy that Ethereum is moving to prove a stake and it's been a plan for for quite a while now. I'm happy it's not just a reactionary thing. I'm happy that it was like very kind of like set in stone back in the day.

• 21:35David Hoffman?

  Into the ethos, the ethos selected it from day one and it was the right ethos to go by. Like, this is like every single day, I'm just like impressed by like, oh. Like, all these people that are like, humanity's now debating consensus mechanisms in 2021. And like Vitalik was like, hey, guys, I'm gonna like, I'm gonna solve this problem six years in advance that you guys don't even understand is coming.

• 21:58Speaker 02

  Yeah, yeah. Vitalik's foresight has been amazing to see. He's like, I mean, even in the white paper, DeFi used. Cases were mentioned, like financial use cases, it wasn't DeFi back then, but financial use, like he, he just had so much foresight and, and just generally, I think like Ethereum community is very lucky to have him. But yeah, uh, generally just that, that, that when you, when it comes to a narrative war, people who pay attention to what happens on Twitter, like just even, okay, let's, let's pivot a little bit for a sec to talk about narrative wars. Look at what happened with one, five, five, nine, right? Look over the last couple of days, people are now concerned trolling E I P one, five, five, nine and saying that it was, uh, people were always sold it as a way to improve gas fees.

• 22:39Speaker 02

  It was never ever sold as that, not from when it first got created, not from any of us in this ecosystem, like not for many of the people with a reach. I made a point to never ever sell it as something that would reduce gas fees. I often noted that it may work to, uh, or sorry, that it should work to smooth out transaction fees because that is part of its design. But I had never alluded to it, um, you know, fixing the gas fees. And I always said that that was layer two, right? That was not the E I P one, five, five, nine. But now we have people coming along and saying, well, that, that's what it was sold as. I'm like, are you serious? Like, are you just learning about one, five, five, nine now? Like, who are you listening to? It's, it's, it's just, the narrative war is such a very, a hard one to win. Because even if you think you've won it, though, someone will come along and throw a spanner in it and then everyone will be confused.

• 23:22Speaker 02

  This is what happened when, I'm, I'll just say it, like Taylor Monahan put out this thread that started this whole thing. She confused everyone because now everyone is trying to kind of, you know, latch on to a narrative and latch on to an explanation for it. And, and now this kind of like revisions of history happening too. People are like, oh, maybe it was about this all along, or maybe it wasn't about this. And it's like, it's just so insane because we had a very cohesive narrative the whole time. But then someone can come along and just like screw it all up, I think.

• 23:49David Hoffman?

  And it also doesn't even matter what the motivations are. It's a piece of code. We can analyze and analyze the code as the code itself, right? And, and like to, also for what it's worth, if we're talking about intent, it was intended to just make the U X better. And now it's touted as this fee burn mechanism. And, and if I remember, I didn't look into the thread too much because I was like, this is dumb. I'm not going to waste my time on this. And so. The reason why I think Taylor Monahan is going after EIP 1559 is because she's a contrarian and like everyone likes EIP 1559. And so like people, the reason why people like it is because it burns ETH and it pumps their bags.

• 24:31David Hoffman?

  But that's not why it was actually ever implemented. It was, the first proposal was framed in the context of just making gas an easier thing to use. I was not the first person to like talk about the relationship between burning ETH and ETH scarcity. But I think I had like the first article that was really about EIP 1559 that was directly about that. And it was really just out of the social layer that did EIP turn in, EIP 1559 turn into this like bullish, fundamental case of Ethereum's monetary policy after the fact, after Eric Connor was like, this is going to make using gas easier.

• 25:10David Hoffman?

  Now, there's a conspiracy that I have that Vitalik, because Vitalik knew about EIP 1559 or at least like the original construction of it, the original mechanism. And then he might have like passed it to Eric and be like, yo, you submit this EIP because Vitalik's smart. He's like, well, this is going to make Ether be scarce. And so I think Vitalik was like, Eric, like you go do this. That's my conspiracy theory.

• 25:33Speaker 02

  Vitalik had been talking about this sort of stuff since 2016 and he was never talking about like fee burns or whatever. He was talking about improving the gas mechanism for Ethereum. Yes, yeah. So there's papers back in 2016, 2017, 2018 and 1559 was put forward in 2019. But, but on your point about people saying, oh, well, it's all about the fee burn now. Okay. Well, okay, let's put it this way. Let's see what the fee burn actually does besides just your vanilla, oh, it pumps your, pumps people's bags. The fee burn takes the money that's going to miners right now in terms of fee revenue and distributes it to all fee holders and makes ETH a kind of revenue generating or like a value capture token. Because right now ETH does not capture the net, the value of its, of its own network.

• 26:15Speaker 02

  Because it is not, I mean, it can be used as collateral, it's staking and all that sort of stuff. But it is not capturing that fee revenue. So by you saying that, oh, you don't like 1559 because it burns fees and directs value to ETH. You're taking the other side and saying you're happy with that ETH going to miners who dump it, right? That's the side you're taking really at the end of the day.

• 26:34David Hoffman?

  Decreasing the security of Ethereum when you dump it, by the way.

• 26:37Speaker 02

  Exactly, decreasing the security of Ethereum and also causing chain instability because when you have more fee revenue than uh than uh I I guess like uh block rewards. It's been shown in a research paper that this can lead to an unstable blockchain or an unstable blockchain. So the when I see that, I'm just like, guys, like, okay, yes, it's it's it's it's good for the for for the value of ETH. And yes, a lot of the industry is is is showing it like that. But at the end of the day, like, who are these people following? Like, are you just following traders who are shilling this so that they can trade ETH and like, you know, pump it higher based on this narrative? Like, I know I've been talking about the fee burn a lot for sure, but but I I the thing the the thing is is that the fee burn is just like a really easy narrative for people to latch on to.

• 27:18Speaker 02

  Like, and when I when I look at people arguing against this, I'm like, you guys should never work in marketing because you didn't understand how marketing works. Marketing works by boiling down complex topics into an easy to digest narrative. That's the that's really the crux of of marketing. So when you want to market 1559, you want to get the word out about it, what do you start with? Well, you start with the most attractive feature of it, like, which is an ETH fee burn. Then you can talk about the other things. That's what I've done. I've gotten people to kind of like, you know, listen to me because of that. And then I kind of like ETH pill them later on the better things about 1559. Uh, so to me, it's just like a a marketing narrative thing that I I think a lot of people in this industry do not understand. Um, you know, marketing is something that I think people look down upon sometimes and they're like, oh, you're just trying to show your bads.

• 28:01Speaker 02

  It's like, everyone's trying to show something, like, let's just be honest here. Like, everyone is always trying to show something. Like, i- i- is is Taylor, um, you know, shilling, uh, just her bags with my crypto? Of course she is, like, but that's fine. It's her product, right? Like, it's it's fine. So, yeah, I mean, maybe without ranting too much there. I just think that um the forest for the trees gets missed a lot in this in this industry.

• 28:23David Hoffman?

  Totally, totally. And on the note of just like everyone shilling their bags, like all content producers, all YouTubers, all podcasters, everyone writing an article, they're all shilling their bags. The reason why people write articles is because they write about something that they believe in. That's why Bitcoiners have so many Bitcoin podcasts. That's why it's that's why Ethereum people are well, we actually could use some more podcasters actually these days. Um, it's mainly you, me and a few other people. That's about it. Um, but like, we're all shilling our bags. We're all shilling our bags. But the thing is, someone is right. Like, someone shilling their bags is right. There's all these different people shilling their bags and someone's right. Uh, and so at some point, that's why you have to be like a thesis driven shiller.

• 29:01David Hoffman?

  Because if you're, if you're the shiller who's shilling their bags and you're wrong, then you're like an asshole in hindsight, not an asshole, I wouldn't really call him an asshole, but like, oh, you're the one that got it wrong. Like you, you were just shilling your fake bags, right? And if you are the shiller that got it right, you're the person that democratized alpha, right? Like, you're the one that did all like, good job. And so, and so like at the, at that point, like, that's why you kind of, it's a responsibility to shill bags if you do believe in them. Because that's, that's your right as a person.

• 29:31Speaker 02

  And I guess like in saying that all shilling is not created equal either, right? You have a lot of things that are shielded that are, that are scams or dodgy projects or people have access to like, um, you know, I was just saying before about like pre-sales, right? Where there's no kind of vesting or lockup on their tokens. They shill it to their followers and then they just like dump on them, right? Um, that, that, that, that happens a lot in this industry and I'm not condoning that at all. I'm not saying that's a, that's a, that's a good thing, but you know, when I shill ETH, I, I should, I'm more shield like, um, you know, the fundamental drivers of like ETH and Ethereum and what's happening there. And obviously like, you know, I mean, me, me and you, it's the same thing. We're both like long-term Ethereum people. We're not just like shilling some bags you got in a pre-sale. I mean, you and I, we bought ETH way later.

• 30:13David Hoffman?

  Didn't get the pre-sale.

• 30:14Speaker 02

  We bought ETH way later than.

• 30:16David Hoffman?

  My first price was like $330.

• 30:20Speaker 02

  Exactly. So.

• 30:21David Hoffman?

  In 2017, right? Not, not in, not, not in the 2018, 19 bear market. Like it was not $80 at the bottom of the bear market. It was like $330. And then it pumped to $1,400. I'm like, yes. And then it fell to $80. I'm like, fuck.

• 30:36Speaker 02

  Yeah, exactly. So I think, yeah, a lot of people will miss that. Uh, there's, there's, you know, some of the loudest people in this ecosystem and the ones you would call shillers bought, bought in a lot later. So they're not, you're not kind of like shill like bags they bought in at like pre-sale and things like that. But, but yeah, I mean, and shilling's like, it's got a negative connotation that comes with it. At the end of the day, it's just talking about things you're excited about. Really? That's how I view it. And yeah. Okay, yes, you have a monetary incentive to do so, but that's like this whole industry. If you're talking about something, uh, most of the time you have a, have a incentive to do so, whether that's being monetary or social. And it can be both. You can have a social incentive to do things like, obviously I have a social incentive to talk about Ethereum because like that's my whole thing. Like, and the same with you guys at Bankless, that's your whole thing.

• 31:16Speaker 02

  But you make money from it too, because it's part of like, like, there's no way I'm gonna shill Ethereum if I don't have ETH. Like, why, like, yes, I love Ethereum, but like, I'm gonna invest in ETH. Like, I'm not gonna sit on the sidelines and be like, oh, yeah, ETH can go up without me, it's fine.

• 31:29David Hoffman?

  I, I think it's gonna go up into the moon, but I'm not gonna buy it. Like, what?

• 31:33Speaker 02

  Exactly. Yeah, yeah, exactly. So this just, it's, it, that's just like being a rational investor, um, being a rational person. So, yeah, when I, when I think about that, that's, that's kind of like the train of thought I go down. And, and I'm fine with people thinking it's gross and disgusting sometimes where people are shilling things. But guys, like, I don't see that with ETH. I see that with like the dog coins or like the outright scams, like, or the really shitty projects. I just do not see that with, with something like ETH where you can say, oh, it's disgusting, shillers just trying to pump their bags. Guys, if I wanted, like, if we wanted to shill bags and pump bags, we wouldn't be pumping like ETH, we'd be pumping something else. But we don't wanna do that, right? We're not here for that.

• 32:08David Hoffman?

  Yeah. It's, it's, it's easier. Well, shilling ETH is like long-term games, right? And the reason why it's a long-term game is because we think it's a long-term asset, right? So, like, come back to, you know, this Bankless YouTube in like 50 years, Anthony and David still shilling ETH. Like, it's still gonna be doing it, it's probably, um. Hey, guys, we're about to get into the topic of conversation of Layer 2 Summer, or what's about to happen when Arbitrum and Optimism open the floodgates and allow all the developers to come and start building on these L2s. And what it's going to be like once all those applications are built for L2s, the users, and what it's like for the users to come and, and live in those L2s. I think it's going to be a really exciting time. Anthony agrees with me. So that is the second half of this conversation.

• 32:53David Hoffman?

  But before we get there, we have to take a moment to talk about some of these fantastic sponsors that make this show possible.

• 32:58Ryan Sean Adams?

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• 34:06David Hoffman?

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• 34:50David Hoffman?

  Just look at the size of the Uniswap treasury. It's almost $3 billion. This mountain of capital is looking for labor. Do you have something of value to contribute to the Uniswap DAO? No matter how big or small your idea is, you can apply for a uni-grant at unigrants.org and help steer Uniswap in the direction that you think it should go. That's exactly what we did to get Uniswap to be a sponsor for Bankless, and you can do the same for your project. Thank you, Uniswap, for sponsoring Bankless. And now, Anthony, I think we should turn to the main conversation, which is Layer 2 Summer. How do you feel about that?

• 35:27Speaker 02

  I'm feeling like if we say Layer 2 Summer too much, people are gonna accuse us of overpromising something. That's what I feel like, because I already saw it happen with the Arbitrum release today. People are complaining and saying, "Oh, it's only for developers." Guys, like, every single piece of marketing copy said it was only for developers. Like, literally, I have not seen anyone say that it was for users. So where do these people get this idea from, that it was for users? And I think it's got to do with the fact that when people hype things up, again, it goes back to what I was saying about narratives and marketing. You always kind of focus on the really, the best thing, right? The most awesome thing coming. And all people focused on was, "Oh, Arbitrum is gonna like be a Layer 2 that comes out before Optimism, right?

• 36:12Speaker 02

  It's gonna be like where all these developers can deploy their stuff to and users will be able to enjoy the cheap and fast transactions." That is true, but that is not true today. And what's true today is that they need to release a developer mainnet so that they can actually get the apps on there. This is another thing that I don't get when people kind of say this, like, "Okay, guys, if they released it to the public today, what would you go and do?"

• 36:33David Hoffman?

  There's nothing there. There's nothing there.

• 36:36Speaker 02

  Like, I just, I don't get it.

• 36:37David Hoffman?

  What, you expect like, "Oh, Ethereum, but on Arbitrum." Like, no, you gotta go build it.

• 36:44Speaker 02

  Exactly. So I just, I don't get that, and I don't get what I have people thinking that. But anyway, that's what released today, right? Arbitrum, and then there's other Layer 2s that have been rolling out slowly, there's other apps and stuff. There's Layer 2s live today, you can go use them and things like that. But I think Layer 2 Summer is something that is not just gonna happen coherently. It's not just gonna be one thing that, you know, happens at one point in time like DeFi Summer did. I think it's gonna take a little while still for Layer 2s to roll out to a point where you can have like, you know, a critical mass of users on there doing all sorts of, you know, really cool things. But I think it can happen eventually, it's just that, like, I mean, I thought I was underpromising a lot of things, even though like I'm bullish on them, but it seems like people still think we're overpromising.

• 37:29Speaker 02

  Things and it just it really kind of like irks me because you know I I think on Twitter it's just different on Twitter people because Twitter doesn't lend itself to to nuance at the end of the day Twitter lends itself to what can you fit into 280 characters and how much engagement can you farm and that's fine that's exactly what what what I do it's what you just what like all of us do like we want to get attention to our long form stuff and our you know our YouTube channels our newsletters whatever but the only way we can do that is by creating these bite sized narratives that get people to pay attention to us and to follow us and by doing that we remove a lot of the nuance from things so I I get that but if you're just taking your your knowledge from Twitter only right from one person's tweet then you're you're just not doing enough research into into what's happening because you can't get everything from one tweet even a tweet thread is not going to give you everything

• 38:13David Hoffman?

  Right.

• 38:13Speaker 02

  So that that's my general opinion on layer two summer is that we shouldn't over promise this and we shouldn't say this is going to be a coherent thing it's going to eventually happen where the critical massive users will move to layer twos and will have like some some fun stuff happening on there but I don't think it's going to happen like people think it is like where it's just like all of a sudden oh my god everything's pumping way too summer we we we no I don't think it's going to happen like that.

• 38:34David Hoffman?

  So so here's my model for how this goes and maybe maybe adding summer to it is more just like mar- marketing and and excitement which I mean we're always excited but layer two season era whatever so the the here's how I've been explaining this to my friends imagine like Disneyland but you've probably never been to Disneyland have you?

• 38:54Speaker 02

  Um Disneyland in Tokyo so I guess that counts.

• 38:57David Hoffman?

  Okay, I think an amusement park the the Disneyland that I'm familiar with in uh in uh Anaheim in in Los Angeles it's like very much you go you go in through the gates and then you go up to this main Walt Disney statue and then there's like different parks like park this way a different park that way a different park that way and so you have like this main Disneyland area and all these different parks like spawning off of it right and so this is what Ethereum is like ma- main park super congested spit lines everywhere because there's only one spot to go the lines are super long and now Ethereum as an ecosystem they just launched like the Matic Park not too long ago the Polygon Park and now they're about to launch the Arbitrum Park and then they're about to launch the Optimism Park which are even way more like way more surface area.

• 39:42David Hoffman?

  And instead, and when they launch these things, there's this massive like, for at first, it's kind of like a gold rush, but people have to wait for the developers of like these applications to come and build the future rides that people are gonna ride on, so that the people can come find the gold, because the gold's in the ride. Okay, so here, so like Sushi Swap comes, and they're gonna, and Uniswap, they're gonna come deploy on, on Arbitrum, and this is completely my speculation, but like, in order to get liquidity onto Arbitrum, perhaps both Uniswap and Arbitrum, and I'm just using these as examples, so like, insert your DeFi app here, Uniswap does uni-distribution rewards to people providing liquidity on Arbitrum,

• 40:24David Hoffman?

  Arbitrum provides rewards for people using Uniswap on Arbitrum, and so you have these dual yield farming coming from both application, which is like the ride, and the actual real estate, which is Arbitrum, and we've written like, repeat that for every single application, borrowing and lending application, like Ave is gonna probably take the lead here, because it can move so much faster than Compound, so Ave is gonna be yield farming Ave tokens on Arbitrum, which is also gonna be giving Arbitrum tokens, and then also they're gonna repeat this on Optimism, right? Everyone, we need to give away the tokens of these L2s, because we need them to be decentralized. How do you give away tokens? We learned this in the first DeFi summer. We just give them away to people that use the protocols, and so there's going to be yield farming on Arbitrum, there's gonna be yield farming on Optimism,

• 41:08David Hoffman?

  there's already yield farming on Matic, right? And so it's just gonna be fucking Yield Farm City in like, these three different like, parks, that are brand new, and the important thing is, there's no fucking fees! There's no fees! And so that, that is like, the bull case, I'm super fucking excited for this, why I'm calling this Ultrasound Summer, and maybe also Fall, or whatever, just Ultrasound, or not Ultrasound, Layer 2 Summer.

• 41:31Speaker 02

  Or Winter, for those in the southern hemisphere.

• 41:33David Hoffman?

  Yeah, whatever, there's not that many of you.

• 41:36Speaker 02

  No, no, I agree with you, and I think, you know, a big part of these like, summers, is the, is the yield farming, and the liquidity mining, right? And the conditions have to be good for this, though. You need a bullish market, you can't have like, a bearish market, because liquidity mining doesn't really work in a bearish market.

• 41:51David Hoffman?

  Right.

• 41:51Speaker 02

  You need a bullish market. Exactly, exactly. And we already saw a taste of this on Polygon with Aver launching with Matic Token Rewards on Polygon there. So you could, and we saw like, I think it's seventeen billion dollars in Aver on Polygon right now because of that. So yeah, as you said, like if all these tokens are being given away through liquidity mining programs, it's a really easy way and good way to bootstrap liquidity. You know, and I think this is what's going to happen for a lot of these apps. And some will move faster than others and things like that. And you can't have liquidity mining on like every single L2. So maybe this is a race here where, you know, who can bring out their L2 scalability solution, you know, first, so to speak. So I think from that perspective, it makes sense. But, you know, it depends on what the broader market does as well.

• 42:36Speaker 02

  I think, as I said, like we're not long-term bearish, but like short-term, the market is just like, no one knows what's going to happen in the short term right now in the markets, like absolutely no one. I think people are betting on it's going to take a couple of months for it to work itself out because we got ourselves into a really bad rut here. And every single bounce is going to be sold down because people are going to be like, well, I'm going to sell the relief bounce. Be like, oh, I should have sold here. And now they're like, oh, it bounces and they're going to be like, I should sell here. And I think a lot of people are saying, well, unless ETH breaks 3K, we're going to be stacking like the 2K to 3K purgatory for a little while. So unless that happens, or maybe, you know, the funny thing is maybe this all happens at once. Because these events have a really funny way of like all coalescing around each other.

• 43:17Speaker 02

  So if you think about what's happening in the next couple of months, say, say the market starts hitting it back up in July, for example, again. I think Arbitrum will be open to users in either kind of like, I'm estimating late June or early July here. And what else is happening in July? Well, optimism is also said that they're going to go live with the mainnet in July. 1559 is still happening in July, as far as I know. I saw something about like a slight delay on it on Twitter before, but I think it's still happening in July, right? So if we get like a return of the bull in July, well, then we can possibly have an L2 summer, right? Because the conditions are there for it. I think the reason why we had like a DeFi summer originally is because the conditions were there for it. It was, the market was just getting started, hitting up. We just discovered this really cool new primitive.

• 44:02Speaker 02

  Fees were low. And then spiked high, but people didn't care about the fees because they had made so much money from their ETH holdings. Like people forget that the people who were part of DeFi Summer were early ETH investors. So at that point in time, they didn't care about the fees because they had made a lot of money from from their ETH going up. So they were like, well, all right, all right, it doesn't matter. Like I'm getting all this money from this. I didn't care about the fees. Uh, and then it was just a new thing as well. So as you were saying, this is like going to be a zero to low fee kind of environment. Where it's going to be a new thing for people, where they're going to be like, the people who were locked out before. Are going to be like, wow, I can actually do like all this cool yield farming stuff now. And there's going to be centralized exchange bridges in and things like that for people to to kind of come into it. Uh, so yeah, I think the conditions can be there in maybe June, like maybe late June, kind of like July-ish.

• 44:47Speaker 02

  But we're going to have to see what the broader market does. If the broader market is like super bearish and Bitcoin's like dumping, ETH's dumping. I I don't see us having like an L2 kind of like season like because of that.

• 44:58David Hoffman?

  Yeah, yeah. To some degree, maybe you can you can have like some amount of faith in in markets and say like, well, because optimism and Arbitrum are releasing and this this real estate is going to be so incredibly valuable, like that can be its own catalyst and be the reason why we are bullish. Not that people's bearishness kill the potential for L2 summer or L2 whatever. It's actually the fact that these things are happening is what makes it bullish. It could go both ways. It could go like for some, at some point in time catalysts move markets. Uh, it's an extremely viable catalyst. Uh, and and as as what you said, like there's already plans for certain exchanges to just put USDC right on to these L2s.

• 45:37David Hoffman?

  And so I've been talking to some of my friends, one of my, one of my friends owns bonds, so that's stupid. And so I'm telling him, sell all your bonds and just put it into stable coins and yield farm on all these L2s that are coming. Just like you can keep your dollar principles. Like I'm not even going to bother to try and convince you to buy ETH. He did, but he doesn't own ETH. Um, but I was like, well, your bonds are yielding like buttfuck percentages, excuse my French, on on the bond market. Go go farm some actual real assets. Like this is the future. Go do that. Like no, same same risk kind of. Um, and and so like if you, the the time to deploy just bare cash is like kind of coming up like pretty damn soon. And you don't have to buy ETH, you don't have to put it into risky assets. You can keep your principal.

• 46:20David Hoffman?

  But in the spirit of going bankless, you're going to get better yields in the bankless world. Like, and so you might as well go do that.

• 46:26Speaker 02

  Yeah, yeah, no, totally. I totally think so. And this has been my kind of like thesis for a while. As to why I don't think we're gonna get like a long drawn out bear market anymore. And I think we're gonna get like mini cycles. Is because of that, as you said, like, I mean, where are you gonna put your cash, right? Where are you gonna put your USD? If not in crypto, like, are you gonna go to a bank account? Uh, no, like, what are you gonna do with it in a bank account? Are you gonna go buy bonds? No, what are you gonna do with bonds, right?

• 46:51David Hoffman?

  Most ignorant thing on the planet.

• 46:53Speaker 02

  Exactly. Are you gonna go in the stock market? I'm like, okay, maybe you can go in the stock market, but like, you're still buying assets. You're not holding on to your cash.

• 47:00David Hoffman?

  Right.

• 47:00Speaker 02

  Whereas, um, and this is, this is why I'm saying like, if you keep your cash in stable coins, well, you're looking for a dip to buy. You're not looking to exit crypto. You wanna buy a dip or you wanna yield farm, you're keeping the capital within the ecosystem. So from that point of view, I mean, I, I think it's very hard to be kind of like bearish, like even medium term. Like, I think short term is fine because short term can do whatever they, whatever it wants. But long term, medium, long term, like bullish, just like everywhere, like, they're just seriously like, I just can't find any reasons to be bearish. And think about how many users have still got to come into the ecosystem as well, and how many of them are locked out because we don't have, um, sorry, because we have high fees and what that's, what that's gonna unlock on L2 is gonna be amazing. So, yeah, I think people might get blindsided by this.

• 47:43Speaker 02

  Um, you know, and, and the memes of like, oh, Ethereum can't scale, we're just gonna die, like, and that goes back to what I was saying about narratives and narrative war. It's very hard for Ethereum to win the Ethereum can scale narrative war just based on promises and, and based on us saying, well, you know, this is coming out soon. Um, we just, once we get it out there and people can actually use it and people see that, oh, wow, this is actually real. That's when, um, you know, I, I think things start changing. I think Polygon had a, played a pretty big part in this as well, where, you know, they, they, they kind of showed this and, and kind of like you go on there and, yeah, I know there was debates about Polygon being like not a L2 and all this sort of stuff. But, you know, generally, it's a, it's an Ethereum aligned scaling solution. And that showed people that, you know, when Ethereum wants to, it can, it can scale both on the technical level and the social kind of coherence level too.

• 48:26David Hoffman?

  Right. The, the one thing I don't know about Matic is like, if the Matic network blows up, like, what kind of assurances do you have that you can come back to Ethereum? I think that's, that's kind of like the, the weakness that Matic has is it doesn't have perfect assurances in the same degree that optimism and Arbitrum does. Uh, and so like, you can't have perfect, like, security when you are on Matic, like, there is some risk there. But at the end of the day, if it works, it works. And right now it's working. And so like, whatever, talk about, we can talk about compromises for whatever. But like, if it's offloading scaling fees and reducing fees and like, count it as an L2. Um, you know, we're gonna like, oh, the, it's not technically an L2, that's technically incorrect, but like,

• 49:07David Hoffman?

  you know, people, random users of Ethereum aren't gonna give a shit. Like, they're just like, oh, it's the thing that, that things are, things I do are cheaper. That's, that's the L2, I'll go over there. Like, they don't care what it is. Uh, and so like, to some degree, that's probably why people are so bullish on Matic now is, is not only does it, it's already first, people are already building on it. It's got all those like, oh, any sort of L2, like, it's all automatic, it's all automatic. Like, I guess that's bullish. Uh, I don't really know, like, how architecturally, why that works, or, but okay. And so to some degree, sure, whatever, count it as an L2, like, so long as it works.

• 49:38Speaker 02

  Yeah, I, I think when it comes to these sorts of things, it's just the trade-offs, right? And the Polygon, uh, POS network, or the automatic network, as you're talking about, they have their own validator set, like a hundred plus group of stake validators, they have slashing, all that logic lives on Ethereum, they checkpoint to Ethereum. Um, but the actual central point of failure is the multi-sig, uh, bridge, which essentially is the bridge from Ethereum to Matic, which holds billions of dollars of assets. That is a five of eight multi-sig right now. So if, you know, they wanted to, not saying they would, five people could collude and steal all the funds in there, right? And that, the, the thing is, that multi-sig is not there for any malicious reasons. It's there because

• 50:18Speaker 02

  they want to be able to upgrade the platform still, uh, and because the platform's still very early, and they want to, um, protect user funds in case of any exploits and stuff like that. This is not similar to what happens with DeFi apps, when DeFi apps have admin keys and stuff like that.

• 50:31David Hoffman?

  Or WBTC, sure.

• 50:34Speaker 02

  Yeah, yeah. So just, that's, that's the thing. Just as long as people understand the trade-offs, I think is fine. Um, the, the, the definition war, like, the, the narrative war around defining things is already lost, even though that I think technically an L2, like, is something that's secured by Ethereum directly and doesn't rely on its own kind of security. Um, and you know, Matic or Polygon has been referred, referred to as a, as a side chain. I, I just think that they've And that kind of term is useless. I think it's all about, you know, is it like its own network? Is it secured by itself? Which which polygons POS chain is? Okay, where's the central point of failure here? Well, it's the breach, right? So the bridges really are generally kind of like the central points here. And you know, who's, you know, who's responsible for the bridge? Like, what are their social coherence?

• 51:17Speaker 02

  And I think, you know, obviously, I mean, I should disclaim that I'm an advisor to Polygon. But I think that, you know, the team is not like malicious or anything like that. It's not trying to harm Ethereum or anything. They're kind of very aligned there. So and you know, even these other like, I guess you can call them true L2s, like Arbitrum and Optimism are going to have guardrails on them in some way or another. I don't know if they're going to be centralized guardrails or anything like that, or all kind of admin keys, but they're definitely going to have ways to, I mean, just think about it, like if Arbitrum and Optimism want to upgrade their networks once they're live, like how are they going to do that without like a multi-sec? Where they can actually just like put the upgrades in themselves? Well, they'd have to set up a whole governance process. That's not going to work really early on in their life. It's it's going to hamper their adoption because they're not going to be able to move fast.

• 52:02Speaker 02

  So I think early on in these projects, it's fine to have an admin key. It's fine to have a central point of failure, as long as you're upfront about it. If you're kind of like trying to hide this fact, well, I mean, if you're trying to hide it, then I can see you malicious.

• 52:14David Hoffman?

  That's a different story. Yeah. Yeah, because you're hiding information from the market and not allowing them for them to decide for themselves. Yeah.

• 52:20Speaker 02

  Yeah, and this is why I had such a big problem with BSC is that CZ is marketing BSC as if it's exactly like Ethereum, that it's just like Ethereum with low fees. I was like, no, man, it's like centralized Ethereum. Like, stop with this bullshit marketing. And, you know, I think as long as people are honest about what these systems are and people understand what they are, that's that's fine by me. I think, you know, if you're lying to people, that's when it gets like kind of kind of gross.

• 52:43David Hoffman?

  Yeah, yeah, totally. What should we talk about next?

• 52:49Speaker 02

  Well, I mean, markets, L2, 1559, drama.

• 52:52David Hoffman?

  Chat, chat, what should we talk about?

• 52:54Speaker 02

  Yeah, give us a topic. There's lots we could talk about, but maybe they've got something they want to hear about.

• 53:00David Hoffman?

  Yeah, yeah, I I've always wanted to do like a just like, have you ever used the webinar feature of Zoom?

• 53:09David Hoffman?

  I guess it's not all that different than YouTube having a chat function. But Polygon Loki Cardano killer. Well, you have to be alive to be killed.

• 53:20Speaker 02

  You know, I always viewed Polygon as these, not so much Cardano, but as these kind of like multi, sorry, these interoperability, multi-chain protocol, things like Polkadot and what was the other one? Cosmos. Yeah, yeah. So I always viewed Polygon as that because they're not just building the POS chain. They're building like what they call Internet of Blockchains, which is going to be like standalone chains, L2s, you know, all this sort of stuff, hybrids, whatever you want to call it. So yeah, that's what I view it as. But as you say, Cardano, I mean, what's there to kill?

• 53:51David Hoffman?

  You know, you know what I haven't heard anything about? The Compound chain. When was the last time you heard about something about the Compound chain?

• 53:58Speaker 02

  I actually saw Robert Leschner tweeting about it on Twitter, like I think two days ago, and saying that Arbitrum should have like a star port on the Compound chain. I'm like, okay, well, what is actually happening with this Compound chain? What is it right now?

• 54:11David Hoffman?

  Apparently, there's a new assets in Compound, Link and True USD. So they actually added some new assets to base L1 main chain of Compounds. Like, that's the first thing that's changed about that application. And I guess to some degree, they're kind of stuck being like the ultra-secure application versus AVE, which is kind of the move fast, but not yet break things, fingers crossed, app. And so like, I guess if Compound does start rolling out the features and it kind of breaks what it's good for, which is like a really locked-down vault.

• 54:43Speaker 02

  Yeah, I mean, there's lots of money market protocols now with more coming. I mean, you have like ones that move really fast, like Cream and Fuse from Rari Capital. And then you have ones that move, you know, a bit faster, but like not as fast like Aven. And then, yeah, the ones that don't move very fast, like Aven, sorry, like Compound and Maker. But that's, yeah, it's all trade-offs. Again, it's all trade-offs. Like, if you move fast, you introduce collateral into the system that may not be safe because of a variety of reasons. Well, you have to take on the risk and the risk gets taken on by the whole protocol. Even if the markets are separate, if you have like, say you have like the token gets sold off for insurance, then you bear that risk as a token holder, you bear that risk as a protocol. Whereas if you're just onboarding like really robust collateral that has really robust liquidity

• 55:27Speaker 02

  and that liquidity has existed for a long time, then, you know, you're fine. That's what Compound and Maker try to do. And I think Compound is even more conservative than Maker at this point.

• 55:37David Hoffman?

  I mean, I I'm interested as to how that how that's true. How how is that true?

• 55:42Speaker 02

  Well, I mean, Maker has actually been onboarding assets pretty quickly these days. Like, if you if you look at like how many assets Maker has on boarded in the last few months compared to Compound, I think Maker actually wins there. Yeah, Compound just, I don't know why, but like, yeah, they do move very, very slowly on that front. Yeah, compared to the others.

• 56:01David Hoffman?

  So so here here's something I've been thinking about lately. So I got into into Ethereum around like July of 2017. After Ether ran from like 10 or 20 dollars all the way up to, I think it was like 425 or something. And then it crashed back down to 135. And then it rebounded and then it it was like just like ranging from 330 dollars to like 270 dollars for like six weeks. It literally felt like forever. And that was like my first impression of crypto was like Ether ranging from 330 to 270 for for like, it was like August until like October. And then and then that's when it did its massive run all the way up to like 1400 dollars instead of its 2017 all time high.

• 56:46David Hoffman?

  It feels like that right now. Like Ether ran from 100 dollars all the way up to 4,300 dollars. Fell all the way down to 1,700 dollars and now we've been ranging between like 2,400 and 2,800 for one one week. And like what you we were just talking about is like, well, we could do this. Really, we could just range until like July, right? When EIP 1559 and Optimism comes online and Arbitrum allows users.

• 57:14David Hoffman?

  Oh, that's weird. Like, kind of crazy fractal, right?

• 57:18Speaker 02

  Yeah, yes. So I've seen this talked about a lot lately, this fractal to to 2017. And it's funny because like the magnitude is different here because I I don't think you can say maybe it ran from like 100 to 4,300 because if you're saying it ran from 10 dollars to 420 dollars, that happened in six months in 2017. Ether was 10 dollars in January of 2017, at the beginning of January. Whereas 100 dollars was only true in March of last year. So it took us like, you know, Fifteen, fourteen, fifteen months to get to forty four hundred. So a much longer times timeframe there. So if you if you really want to do a do a comparison, I think you you should be comparing it maybe to to to to kind of like Bitcoin here. Because Ethereum is as big as Bitcoin was back then, because it's it's about market cap and stuff like that.

• 58:03Speaker 02

  But this is also why I think that when you look at these kind of fractals and look at these charts. It it's kind of hard and I don't I don't think it repeats like the same way every time. It might it might rhyme where, you know, human emotions don't really change and the way humans trade things and fear and greed is is the same. But I don't know if you can look at that and say that's exactly what's gonna happen. I do think the general rule is that when you have like a blow off top like this. You either go into like a really long term bear market where it just keeps trending down. Or the market is generally bullish and you stay like range bound for a little while and then you move back up generally. I think that's what is happening right now, but at the same time, I'm not like totally sure because. You know, short term is very hard to kind of predict.

• 58:44Speaker 02

  I I didn't think that it would go to seventeen hundred. I thought that it would, you know, I I was looking at when it was dumping. I'm like, okay, well. You know, maybe we go to under three thousand. That's where I bought some as well. I bought some at twenty nine hundred. Um, but then, uh, it it, you know, it kept falling. I'm like, wow, okay, this is a serious dump now. And then it kept going. I'm like, wow, okay, starting to feel like, you know, COVID black Thursday, uh, black, whatever it was in March of twenty twenty. And then it dumped even more. I'm like, what the hell is happening? And then I'm like, okay, well, there must not be much liquidity in the system as I thought there was. I thought there was more liquidity than what there was. Um, and then we bounced, of course, and we got went up to twenty nine hundred. I'm like, okay, this is a classic dead cat bounce right now. This is like a classic. Uh, let's all just buy the bottom. And then we trended back down. I'm like, okay, I wasn't surprised by that. And now we're just ranging. So.

• 59:26Speaker 02

  Who who knows, man? Like, it's just, it's so hard to tell. But if you're in it for the long term, you should be unaffected by these. If you didn't invest more money than you can afford to lose, if you're not relying on crypto to to live, then you're fine. I mean. I I think, yeah, as long as you kind of like set yourself up for that and not panic sell into these sorts of things, you should be, you should be fine. Because what what actually gets people long term is that they blow themselves up, whether that be on leverage or they end up panic selling. Um, and then buying back in at a higher price. Really, that's why people say holds, because in the long term, holding, like, we just look at history.

• 59:57David Hoffman?

  Holding wins.

• 59:58Speaker 02

  Holding wins, exactly. Over the long term, holding wins over everything. So unless you're a trader and trying to be a trader. You can be a trader, you can have like a trading stack, maybe you want to trade with 10% of your portfolio. Um, but yeah, just generally like I think, holding wins and you've got like proof of that from like 10 plus years of crypto markets. And that is not to say this is investment advice, but you just need to look at the the industry and look at what what's happened to people who who held from from early on. I think that's just what happens.

• 1:00:24David Hoffman?

  Yeah, a- and on that note, there are some things that you can't learn in crypto, you can only experience, right? And I feel like that's kind of what I was getting to when I was saying like, oh, like similar fractals 2017 kind of feels like that, like. The numbers are messy, like time horizons are different, like things are fuzzy. But like, there is like a gut feeling, right? Uh, and you know, gut feeling is completely emotional, it's just my gut feeling. But also like, there's like, kind of this order of operations things, or like Bitcoin pumps, then Ether pumps, DeFi tokens pump. And we have this crash, like, we're, we're, what we're yet to see is another, because I remember like allocating heavy into tokens. And I feel like this is like a first cycler thing to do is this like, oh, I missed out on the pump.

• 1:01:06David Hoffman?

  Better buy tokens because that's how I get my leverage. Uh, and so I bought bought a bunch of tokens and then Bitcoin ran from like. Seven thousand to $20,000 and I just felt pain every step of the way because to- tokens are actually going down in price, just getting just slaughtered by Bitcoin. And then we had the biggest fucking altcoin mania of all time. That's when Ether hit its cap and and so we just went through these cycles, right? And so it feels like, feels like the second half of the of the bull market, right? It feels like Ether had its first pump, Bitcoin has its first pump, DeFi tokens kind of lagged behind, but are, but still have done extremely well. And then we have a bunch of new entrants coming in, which a lot of, a lot of people that I know that I was trying to tell them to get into crypto are now finally getting into crypto.

• 1:01:48David Hoffman?

  Uh, and so it kind of feel, it feels like that moment in time where like we have the next second half of the bull market ahead of us.

• 1:01:55Speaker 02

  Yeah, yeah, I I agree with that. I actually put a tweet out saying this exact thing where I where it feels more like, you know, June, July twenty seventeen than it does Jan twenty eighteen. And I do agree with you. I just think it's just funny whenever you kind of look at the prices and the magnitude of the increase and how ETH went, you know, forty two X before it crashed in twenty seventeen. Whereas if you look at like, say, say you want to compare it to the start of this year to now, um, you know, ETH was like, what, a thousand dollars at the start of this year, I think. Um, so it's only a four point four X. And that's because ETH's market cap is much larger this time around. And, you know, you can look at other coins that did the forty two X, for example, which they did, like some other coins did a massive run like that.

• 1:02:36Speaker 02

  So that's when I see people saying, oh, you know, ETH's gonna go like forty X again because it went forty X in twenty seventeen or whatever it was. It's like, nah, guys, like, this is not gonna happen. That's the market caps are way different and it takes a lot more money to move ETH these days. That's why you see Bitcoin as being like an asset that doesn't go up too much in value. But again, uh, I mean, it doesn't go, I mean, it goes up, but it doesn't go up as fast. And again, it's just a risk thing. Like you're, it's it's less risky to be in BTC and ETH than it is to be in other things. Like, yes, BTC and ETH, I mean, ETH went down sixty percent, but a lot of the other things went down like eighty percent. And that might seem like a small gap, but going down eighty percent is way larger than going down sixty percent because it's it's it's percentage wise. It's not um,

• 1:03:16Speaker 02

  not based on on something else. So, uh, and that and that's just the risk you take. And and also on the recovery, ETH and BTC are gonna recover probably much faster than all these other things will. So, um, yeah, that's that's kind of like how I play it. It's like you play in the risky stuff and it's not just risk based on market stuff. It's also risk based on the project. Like, we know that BTC and ETH are gonna stay around for a while, but a lot of these kind of other projects, who knows if they're gonna be around? Who knows if they're gonna get traction? Who knows if they're actually gonna be successful? And a lot of them haven't been, and a lot of them have been slaughtered because of that, um, in addition to the market turning down.

• 1:03:50David Hoffman?

  Yep, totally. And that's why I feel like the way that we should leave listeners is that always, always long-term games. Always, always play, play, position yourself like it's fun to play on leverage. I play on leverage. You, if you play on leverage, you have to position yourself in a way where you can still play the game even if you get punched in the face, right? So like you can take, you can take the loss, but if you're out of the game because you lost too big, then you're fucked. You're allowed to, you're allowed to take an L, but you gotta keep yourself in the game. Uh, because this is a long-term revolution and so you can't count yourself out of the revolution. Cause honestly, you only get it one time, right? Like maybe you miss a 2017 bear mark or bull market and like

• 1:04:31David Hoffman?

  that sucks because you only get one 2017 but uh bull market, but you have this one. So like, don't fuck it up. Don't fuck it up.

• 1:04:39Speaker 02

  Yeah, yeah, exactly. And I guess like even as a broader thing, the, the kind of revolutions that we're, we're seeing now within crypto is like a once in a lifetime thing or a once in a generation thing. Like the last one was the internet. They seem to be happening much faster. But when the internet was growing, I was a kid, man. Like I, I couldn't experience this. Uh, like I couldn't invest in companies. I couldn't do anything like this. Um, so, so now I'm not, and I think a lot of people are in the same boat. A lot of people missed out on the internet because they were just too young. They hadn't even been born yet. I mean, think about it. Like if you, several born like in, in the, sorry, people were born in the year 2000 that are now like 22 years old, 21 years old or whatever.

• 1:05:14David Hoffman?

  Oh, it's crazy.

• 1:05:15Speaker 02

  So when, yeah, it is crazy. But when you think about that, it's like, okay, well, those people were literally born into the hype into, you know, of the dot com bubble. They didn't get to experience that at all.

• 1:05:24David Hoffman?

  They were literally a product of the bubble. There's people celebrating and having babies.

• 1:05:29Speaker 02

  Exactly. So, so from that perspective, all those people like get to enjoy this. And even like early, like I was born in 92. So, I mean, you were as well.

• 1:05:36David Hoffman?

  Ninety-two gang.

• 1:05:37Speaker 02

  Like around, yeah, exactly. So, yeah. But like for us, you know, in the year 2000, we were eight years old. I wasn't worried about that. I was worried about my Pokemon games on, you know, Game Boy. I wasn't worried about the, the dot com bubble. I didn't even know about the dot com, dot com bubble until I was like in my teens. But so from that perspective, yeah, this is, this is why kind of like, uh, it's a once in a generation thing or normally once in a lifetime. So you make the most of it by playing long-term games and not blowing yourself up on leverage trying to capture some short-term wins.

• 1:06:05David Hoffman?

  Totally, totally. And I will take note that like if we do have DeFi Summer Round 2 or slash DeFi Season Round 2 with L2s, that's a blessing because like we already had it once and like now we kind of know what to expect. And so that is also something to take advantage of. Anthony, thank you for coming on the Bankless Day, God, wow, the Bankless Daily Guay Friday Weekly, sometimes Weekly livestream. Here's the Daily Guay YouTube channel. I'll putting it into chat. Give Anthony and his YouTube channel a follow there because he does stuff like this every single day. I listen to it on the podcast every single day and it's where I get a lot of my information. And then we come and talk here and just kind of shitpost and have fun. And so thank you for tuning in and Anthony, I will see you in a week.

• 1:06:50Speaker 02

  Yep. Thanks everyone. See you later.

• 1:06:52David Hoffman?

  Peace.