ROLLUP: ETF Final Countdown | Polymarket's Huge Breakout | Chevron Defense | SEC Sues Metamask

Bankless Friday Weekly Rollup First Week of July ------ ✨ Mint the episode on Zora ✨ https://zora.co/collect/zora:0x0c294913a7596b427add7dcbd6d7bbfc7338d53f/26?referrer=0x077Fe9e96Aa9b20Bd36F1C6290f54F8717C5674E ------ 📣 MANTLE QUEST ON AIRDROP HUNTER | WIN 1,000 $MNT https://bankless.cc/MantlesAnniversary ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2 ⁠ 🦄UNISWAP | BROWSER EXTENSION https://bankless.cc/uniswap ⚡️CARTESI | LINUX-POWERED ROLLUPS https://bankless.cc/CartesiGovernance 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle ⚖️ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum https://%E2%81%A0https//bankless.cc/Arbitrum 🗣️TOKU | CRYPTO EMPLOYMENT https://bankless.cc/toku ------ TIMESTAMPS & RESOURCES 00:00:00 Happy 4th Of July 00:08:04 Markets https://pro.kraken.com/app/trade/btc-usd https://pro.kraken.com/app/trade/eth-usd 00:10:13 A Likely Outcome 00:11:59 When ETF? https://x.com/NateGeraci/status/1807041501077110986 https://x.com/NateGeraci/status/1807548524910850284 https://www.youtube.com/watch?v=xaP5d1pmncY&ab_channel=Bankless https://www.youtube.com/watch?v=xaP5d1pmncY&ab_channel=Bankless 00:14:39 South America Is Growing https://thedefiant.io/news/defi/ethchile-highlights-triple-digit-growth-in-south-american-crypto-ownership Crecimiento https://docs.google.com/document/d/15Mb1j9quuNAqZzuBfY60F9Y82emWjUktVfw8k--eeiw/edit#heading=h.u6pn408b547d 00:16:48 Why Are We Down? https://x.com/eli5_defi/status/1807712012342092145?s=46&t=2ZINVXJQKx6xO_6Wiiu_2g https://x.com/eli5_defi/status/1807712012342092145?s=46&t=2ZINVXJQKx6xO_6Wiiu_2g 00:22:40 Supreme Court overturned Chevron Deference https://x.com/JBSDC/status/1806799823107997893 https://www.supremecourt.gov/oral_arguments/argument_transcripts/2023/22-451_o7jp.pdf https://youtu.be/JlsM_k7PutQ?t=1243 https://x.com/JTLonsdale/status/1806697088509469119 https://x.com/balajis/status/1806773841395675218 00:28:02 Negative Takes https://x.com/kylascan/status/1806706937083441274 https://x.com/JBSDC/status/1806809534322590069 00:29:38 SEC Sues Consensus https://www.sec.gov/newsroom/press-releases/2024-79 https://x.com/MikeSeligEsq/status/1806834455962652760 00:35:51 US Marshals Service picks Coinbase https://www.coinbase.com/en-gb/blog/u-s-marshals-service-chooses-coinbase-to-safeguard-trade-its-large-cap https://x.com/ErikVoorhees/status/1806105760461726023 00:37:00 BNB and BUSD Sales Aren’t Securities https://x.com/EleanorTerrett/status/1806896212173328850 https://x.com/MetaLawMan/status/1807075663666434311 00:40:53 ZKsync Elastic Chain https://x.com/zksync/status/1808125972434067699 https://imgur.com/nYDhE9u https://x.com/hudsonjameson/status/1808326321728283093 00:47:19 Zerion No-Fee Chain https://x.com/zerion/status/1806364593352016174 00:48:16 Election Season is Polymarket Season https://www.coindesk.com/policy/2024/06/28/crypto-unmentioned-at-first-2024-presidential-debate/ https://polymarket.com/event/presidential-election-winner-2024?tid=1719919681564 00:55:53 Vitalik Likes https://x.com/vitalikbuterin/status/1808092065483436481?s=43&t=2ZINVXJQKx6xO_6Wiiu_2g https://x.com/vitalikbuterin/status/1808092065483436481?s=43&t=2ZINVXJQKx6xO_6Wiiu_2g 00:56:37 Coinbase and Stripe https://x.com/coinbase/status/1806425092513210492 00:57:06 Pay On Warpcast https://x.com/dwr/status/1806774735109562789 00:57:58 IRS issued crypto tax regime for 2025 https://www.irs.gov/newsroom/treasury-irs-issue-final-regulations-requiring-broker-reporting-of-sales-and-exchanges-of-digital-assets-that-are-subject-to-tax-under-current-law-additional-guidance-to-provide-penalty-relief-address 01:00:23 Circle's New License https://x.com/jerallaire/status/1807791418489889279 https://x.com/paddi_hansen/status/1808085759947124778 01:01:44 Raises Of The Week https://x.com/astriaorg/status/1808534932060614983?s=46&t=dAxCjT2P_GIrJMvMgWIpfA https://x.com/astriaorg/status/1808534932060614983?s=46&t=dAxCjT2P_GIrJMvMgWIpfA https://www.youtube.com/watch?v=5809YJpbhFg 01:02:59 JokeRace Update https://www.jokerace.io/contest/base/0x0bac0ec9b6aeafa6c2212f67a67950940eda63a7 01:04:54 Meme Of The Week https://x.com/testinprodcap/status/1806735419792302142 ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures⁠

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

• 0:03Ryan Sean Adams?

  Bankless Nation, it is the first week of July and it is one day early. But it's time for the Bankless Weekly Roll-Up. David, we've got a lot to talk about. Prices are down a little bit, but we are still bullish because what's about to happen?

• 0:17David Hoffman?

  The ETH ETF. This might be the last weekly roll-up without an ETH ETF.

• 0:23Ryan Sean Adams?

  It better be.

• 0:24David Hoffman?

  That is the new expectations for the date. We'll talk about the expectations for the date. We don't know for sure, but we think that this is going to be the last roll-up. So what are people's expectations for how it will trade? When is it going to trade and how it's going to trade? These are what we're going to talk about.

• 0:38Ryan Sean Adams?

  Also, the Supreme Court just struck down something called the Chevron deference rule set in a landmark Supreme Court case. But like, what does that mean? What is Chevron deference? And is this good for crypto? We'll talk about that.

• 0:52David Hoffman?

  The SEC has officially filed lawsuits against Consensus and MetaMask after it said that it wouldn't. It also named Lido Staked ETH and Rocketpool RETH as investment contracts, therefore securities. Is there anything new here? Or is Gary just shooting the same shot that he's already shot before? ZK C Inc. announces the new upgrade for the ZK C Inc. Network Stack. And of course, crypto might actually have a mainstream breakout app this cycle. It's one you already know. You already know the name. We'll talk about that as well. But right, July 3rd is today. July 4th is tomorrow, the day of listeners. Probably not super relevant for anyone outside of the United States because they don't have the freedom that we have.

• 1:33Ryan Sean Adams?

  Oh my God.

• 1:35David Hoffman?

  How are you doing? How's your July 4th?

• 1:37Ryan Sean Adams?

  I'm doing great. Wow, that was probably the most American thing I think I've heard you ever say. So this is why we're doing this episode a day early because we're actually going to shoot some fireworks on the 4th of July, spend some time with family.

• 1:50David Hoffman?

  I'm going to hold Roman candles in my hands as they go off.

• 1:53Ryan Sean Adams?

  You just disclosed to me you're a big fireworks guy, which I didn't know that about you.

• 1:57David Hoffman?

  I was a big fireworks kid, yeah.

• 1:58Ryan Sean Adams?

  You're a fireworks kid and also like a little bit of pyro, playing with fire.

• 2:02David Hoffman?

  It went a little bit too far into my adult life, yeah.

• 2:05Ryan Sean Adams?

  Are you still that kid?

• 2:07David Hoffman?

  I will be perusing the fireworks as we go up to a family cabin, yeah.

• 2:11Ryan Sean Adams?

  Wow, all right, well, David's gonna have a fantastic 4th of July. And we should say happy 4th of July to our American listeners. And why we celebrate? This is about the adoption of the Declaration of Independence, which was America's breakup letter to a king over there in England. And there's a few lines from that that really, like, I think are embodied in the Layer Zero of the US that I think are worth calling out. One is this line about men having unalienable rights, that among these are life, liberty, and the pursuit of happiness. Also, another line I love from the Declaration, governments are instituted among men, deriving their just powers from the consent of the governed. I love these ideas because I think they are very adjacent to crypto and why we're here.

• 2:56Ryan Sean Adams?

  The right to fork, the consent of the governed, an opt-in network. These are all powerful ideas. And the idea that we have civil liberties on our blockchains, the ability to pursue life, liberty, and the pursuit of happiness, and maybe gains in crypto. I think these are fundamental. And it was a good time to celebrate and reflect for our American listeners on the 4th of July.

• 3:19David Hoffman?

  Yeah, I think we had the same idea about this 4th of July episode because I have also prepared some statements.

• 3:27David Hoffman?

  When I do a little bit of writing, the Bankless Nation probably knows that I'm a little bit more long-winded than Ryan, so here we go.

• 3:32Ryan Sean Adams?

  Oh, wow, okay. So for everyone who's listening, there's a link in our agenda and it just says David prepared statements. And when I go to click that link, it says you're blocked. He's not shared this document with you.

• 3:42David Hoffman?

  Because if I did let Ryan see them, he would be like, this is too long.

• 3:46Ryan Sean Adams?

  Edit this.

• 3:48David Hoffman?

  You're gonna have to trim this down.

• 3:48Ryan Sean Adams?

  Strap in, Bankless listeners. We'll see how this goes. But say it, David, I know it's on your heart, so let's hear.

• 3:55David Hoffman?

  Okay, so here we go. As Bankless listeners know from our 4th of July episode two years ago, 4th of July actually began in the 1400s when technology allowed man to wake up and see the world through a new lens. This is the printing press and double-entry bookkeeping. We've pounded this drum so many times. But these two things, these two- Technologies created the Renaissance and allowed man and woman to become self-dependent and self-sufficient. These technologies allowed us to see the permissioned world around us and gave us the tools that we needed to break free from it. By the time the 1700s came around, these ideas had become so large that they became larger than the monarchy state containers that they were born in.

• 4:37David Hoffman?

  And so a bunch of people decided to go west to live in a land that was as free and as big as the ideas that drove them there. They did not ask for permission. They saw a blank slate on which they could build a better future, and they went for it. On July 4, 1776, these ideas of freedom and individualism were codified into the Declaration of Independence, that all men were created equal, that they were endowed with certain unalienable rights, that among these are life, liberty, and the pursuit of happiness. The pursuit of life, liberty, and happiness is, however, never-ending. As technology advances, tools become available to vote both advocates and adversaries of freedom.

• 5:19David Hoffman?

  The pendulum between free and open societies and authoritarian nation-states is never at rest. It is always in flux. After the 2008 crisis, we began building the walls around our closed-source, permissioned financial system. After Snowden whistleblowed in 2013, we realized that we were walking into an internet-enabled surveillance state. Now, in 2024, we have the foundation, the ideas, and the motivation on how to escape these freedom-suffocating pressures. But in 2024, we are not yet ready to sign our Declaration of Independence from TradFi and Web2. We have left Europe for the brave new world of the digital age, but we have not yet had a digital July 4th. There is still work to be done,

• 6:02David Hoffman?

  which is why we are here today, talking about the news on today's Weekly Rollup.

• 6:07Ryan Sean Adams?

  Dang.

• 6:08David Hoffman?

  That was my prepared savings.

• 6:09Ryan Sean Adams?

  Wow, David. I feel like David Hoffman 2024. That felt like a political speech to me. And I enjoyed it immensely. That was great. What a great way to begin the roll up today.

• 6:20David Hoffman?

  That's about as patriotic as I will ever get.

• 6:23Ryan Sean Adams?

  Except when there's fireworks involved.

• 6:25David Hoffman?

  I'd much rather prefer to be a patriot of the Bankless Nation. And if you want to join the Bankless Nation by being a Bankless citizen, which is somebody who pays for all the perks that we provide our citizens. So you get the premium podcast feed with extra researchy episodes and no ads. You get to access to the Airdrop Hunter and the Claimables. You get 30% off of permissionless tickets. The idea is that this, being a Bankless citizen, pays for itself. One of the perks that we have this specific week to commemorate Mantle's one-year anniversary, congratulations to Mantle. We've made an NFT that if you claim, enters you into the chance to win $750 worth of tokens. So 10 random citizens who go through the Airdrop Hunter quest

• 7:09David Hoffman?

  for Mantle for their one-year anniversary quest. They mint an NFT, they make a tweet tagging Bankless and Mantle, and then you will enter into a raffle where 10 citizens will earn 1,000 Mantle tokens. That's currently about $750. So there is a link in the show notes, bankless.cc/mantle'sanniversary. Just go click the link in the show notes. You can go through this process where you complete the quest, mint an NFT, make a tweet, and then maybe win 1,000 Mantle tokens.

• 7:38Ryan Sean Adams?

  And this is definitely a quest. So there's some precursor quests you have to do in order to mint the NFT on Mantle and be eligible for those 1,000 tokens, including adding Mantle to your wallet, purchasing some MNT, bridging funds to Mantle. So this is not for everyone. This is where we end every Bankless episode.

• 7:57David Hoffman?

  Small pool.

• 7:58Ryan Sean Adams?

  You gotta earn it. You gotta earn it. Okay, but the good news is there'll probably be a small pool, which improves your chances to win. David, let's talk about winning. Are we winning in the markets this week? I'm feeling like things are going down.

• 8:11David Hoffman?

  We're gonna punt on that winning thing.

• 8:14Ryan Sean Adams?

  Tell me about the price of Bitcoin on these cracking charts here.

• 8:17David Hoffman?

  Yeah, down 2.7% on the week this week. Start of the week, 61,300, currently just above $60,000 this week. Similar things for ETH price. Start of the week, 3,360, down 1.7%, currently just above 3,300.

• 8:34Ryan Sean Adams?

  David, do you think these down percentages are justified? I mean, we'll talk about it later, but we got some pretty positive Supreme Court rulings with Chevron deference. We've got the Ethereum ETF next week. Is that what we're calling, which is like, this is the last roll up, hopefully, without the Ethereum ETF? So like, we're on the brink of that.

• 8:54David Hoffman?

  We don't rug our listeners, yeah.

• 8:56Ryan Sean Adams?

  Why are we going down?

• 8:58David Hoffman?

  Um, I think we are at capacity with how much new money has gone into crypto. Like, the last big, like, upswing in price was, first, to summarize the entire state of this crypto cycle, if you can even call this a cycle, it was people reweighting Solana in December 2023 and had this Solana season summer, winter, and Solana repriced. And that was bullish, that was a bull market for Solana. And then there was a global industry bull market with the Bitcoin ETF. Because new money came into the industry with the Bitcoin ETF. Like, people bought Bitcoin, it recycled down the market cap stack. Like, $15 billion came into the industry.

• 9:42David Hoffman?

  No new money has come in, in the same ways that it happened in 2021 with NFT mints or like any of this other stuff. And so with the ETH, we will get net new money coming in, just like we did with Bitcoin. It'll be smaller than Bitcoins. It'll be like, maybe a more Ethereum-specific price rise. But like, that's our source of new capital right now. And we can't, the prices can't go up anymore because we seem to be exhausted, like,

• 10:09David Hoffman?

  people, crypto natives, selling all their stables for crypto assets.

• 10:13Ryan Sean Adams?

  But the great thing about the Ethereum ETF is that that is the promise of new inflows and net new buyers, right? That aren't crypto natives. And that's what's so exciting about them. So I want to ask you, you know our episode that we did with Alex and Matt earlier this week, where we went through, kind of like, I went through a scenario. And I want you to tell me what you think the chances of this happening is. This is pure hopium. But basically, quiet summer, Ethereum ETF launches. It's sort of a sell-the-news event at first. Price goes down, there's flood about, you know, like, grayscale. Ealing, not as much institutional demand for ETH, all of this. We go down maybe into the 2000s for the price of ETH. Like, under 3K could be possible, could be on the table, or maybe it's just stagnant.

• 10:56Ryan Sean Adams?

  But then we start seeing these inflows in the weeks after, in the months after. People come home from their summer vacations. They have already sold in May, but now they're coming back. It's September. We get a glorious fall into the early stages of winter. And before the end of 2024, we are above all time highs ETH with 10K ETH price in sight. Because the inflows have surprised people on the upside. They weren't counting for this. What do you think about that scenario? Could it happen?

• 11:27David Hoffman?

  Are you saying we just copy and paste what happened in Bitcoin and apply it to ETH?

• 11:31Ryan Sean Adams?

  Yes, literally, this just happened within the last year to a different asset. And it sounds, as I'm saying it, because the markets are in the doldrums, it sounds unbelievable. But yes, it's just a copy and paste of Bitcoin.

• 11:46David Hoffman?

  Yeah, no, that checks out. I feel like that is the default scenario and anyone else would have to prove otherwise.

• 11:53Ryan Sean Adams?

  All right, well, that's where we're going with. This is the shakeout of buying opportunity before you like new all time highs.

• 11:59David Hoffman?

  So let's get into actually like, when? When is this gonna happen? When ETF? July 8th has emerged as the date to walk. This is a tweet from Nate Girasi. I need to DM him and ask him to make sure I'm pronouncing his last name correctly. He says that all of the S1s have been handed back with light comments. The issuers have been asked to address the comments and refile them by July 8th. So maybe end of day, July 8th, July 9th, sometime after 4th of July.

• 12:26Ryan Sean Adams?

  As soon as it's filed and approved, we get it?

• 12:29David Hoffman?

  Yeah, well, so like, all the approvals will happen under a certain condition. The way that it works is that the SEC wants all these issuers to file their S1s in a particular way. And the issuers are free to file them differently. But then the SEC will make comments and be like, hey, address these comments. And because they want something different, they want a certain outcome. But then, so it's a little bit of just like tug of war between the issuers and the SEC.

• 12:54Ryan Sean Adams?

  Okay, but this is, July 8th is the day to watch. And that's the date that issuers have been asked to resubmit. But that's not necessarily the date of trading, right?

• 13:03David Hoffman?

  Yes, correct, correct. There is no data trading that we know of.

• 13:08Ryan Sean Adams?

  Okay, so this is not like, this could happen later in July then, still.

• 13:12David Hoffman?

  Yeah, the first day it could happen is July 8.

• 13:16Ryan Sean Adams?

  So this might not be the last rule up.

• 13:18David Hoffman?

  I think people are assuming that like, once they get these final comments addressed, then the SEC is like, great, green light.

• 13:26Ryan Sean Adams?

  Just kind of next day, sort of thing?

• 13:27David Hoffman?

  Yeah, it could be the next day. But we'll see. It could be, I don't know. It could be whatever the hell the SEC wants, to be honest. But yeah, people are expecting. Gary Gensler said it's being a smooth process. So when he says that, that's like the only positive thing I've ever heard come out of his mouth. Again, another Nate Geraci tweet about the bullishness of the ETH ETF. He goes, "Early and easy prediction," he says. "Spot ETH ETFs will be the second most successful debut in ETF history, only behind spot Bitcoin ETFs," which were the number one, obviously. "So, two most successful ETF launches in 30-year ETF history will occur this year: Bitcoin and Ether. Are you paying attention yet?" Just saying, ETH is gonna follow on show. It's gonna be great.

• 14:10Ryan Sean Adams?

  He's really, he's already calling it as the second most successful ETF in history, then.

• 14:16David Hoffman?

  And so like, his analysis was like, we'll just copy and paste Bitcoin and get that. Your analysis on the price action was, we'll just copy and paste Bitcoin.

• 14:24Ryan Sean Adams?

  Yeah.

• 14:24David Hoffman?

  The Bitwise and Galaxy episode that we did with Matt Hogan and Alex Thorne was like, just market cap weighted average, just copy and paste Bitcoin, just control for the market caps. Everyone is just like, just don't overthink this.

• 14:37Ryan Sean Adams?

  Yeah, I sort of fall down on that, too. David, there's some good news coming out of South America with respect to crypto adoption. Look at this chart here. This is crypto ownership by continent. We've got Asia, we've got North America, Africa, Europe, South America, Oceania. And we have total crypto ownership by continent. Interestingly, North America ranks number two with 72 million. Asia's number one with 326 million. I'd love to find more details on the source of these charts, but like, let's assume that these numbers are correct.

• 15:09David Hoffman?

  Directionally correct, yeah.

• 15:10Ryan Sean Adams?

  What's interesting here, David, is from 2023 to 2024, South America got a 116%

• 15:17Ryan Sean Adams?

  Increase change.

• 15:19David Hoffman?

  More than doubling.

• 15:21Ryan Sean Adams?

  Just doubled. So 2023, 25.5 million people own crypto. 2024, 55.2 million people own crypto. And that was the largest percentage change of any continent. Very bullish on South America crypto adoption. I know you've spent some time recently in South America and Argentina and in some other places. Yeah, like, what does, what do these numbers say to you?

• 15:46David Hoffman?

  Yeah, the, the big drivers are here are just high levels in inflation across Argentina and Venezuela alongside. Brazil has recently warmed up to the crypto ecosystem and inside of its banking apparatus as well. So there's just like meaningful like crypto adoption in South America, which is also highly motivated. Like just global inflation, like pick a country, there's like inflation there. Argentina has it like kind of the worst and Venezuela. And so you've seen a lot of outsized adoption there. I might be going back to Argentina in August for this thing called Crazy Miento, which is just like a glow, like a block of crypto founders in Buenos Aires in Argentina, of which there are many. And they're trying to just make like, make Buenos Aires into like a crypto, a crypto like sanctuary, crypto haven.

• 16:32David Hoffman?

  Mile is like really approximate to this movement. So like the idea is like get Mile's administration on board and just like really enshrining crypto entrepreneurship inside of Buenos Aires. You can actually apply to go to Crazy Miento. There, I'll put a link in the show notes as well, if you're interested in that.

• 16:48Ryan Sean Adams?

  Bullish crypto adoption, though. David, you know, another explainer of why we're down. I saw this thread and it was basically token unlocks, just the token unlocks that were scheduled for July. And the three biggest unlocks are a project called Alt Layer, a project called XAI Games and a product and Aptos as well. And just like on, if you could go down the list, Arbitrum, WorldCoin, Immutable, all tons of unlocks. We get to the bottom here, we're talking about just in the month of July, we're talking about

• 17:21Ryan Sean Adams?

  almost $700 million worth of token unlocks. And let's recall what a, what a token unlock is, right? So some set of VCs, insiders, like project team founders.

• 17:33David Hoffman?

  Investor, early investors and teams of projects.

• 17:36Ryan Sean Adams?

  Yeah, basically, they have tokens that are vested. They have some vesting period where they can't sell the token or do anything with the token. And meanwhile, the tokens are tradable on on public markets. The vesting period, usually it's about a four-year vesting cycle or so for many of these projects. Some are actually shorter. Anyway, when that time period of vesting expires every incremental month or a year that goes by, it releases some potential selling pressure onto the market. I think this can explain part of the the market doldrums that we're in, particularly down market of Bitcoin and Ether. It's just there's a lot of VC-funded investor tokens that are unlocking, and there aren't net new buyers of these assets.

• 18:20David Hoffman?

  Yeah, well, so so many VCs raised money last cycle, 2021, and also deployed capital 2021, 2022. And those tokens are like went into market, like networks launched. And now the vesting schedule is starting to tick forward. So that $700 million of token unlocks is like just like kind of a one cycle later of 2021. And this is also why we have this like U-shaped bull market, where we have Bitcoin Ether Solana up very bigly, and then meme coins being like up very bigly, and then like a void of price appreciation in the middle of these two things, because there are a lot of investor unlocks in that middle section of the market.

• 19:03Ryan Sean Adams?

  I agree with that assessment, yet also it still doesn't explain some of the DeFi blue chips that are really showing some strong fundamentals that have a lot of the like, they're fairly liquid in terms of in terms of float.

• 19:17David Hoffman?

  There are fully vested profitable DeFi projects out there. Coming up next, Chevron deference. If you have never heard these words before, you're probably like most listeners. What's the deal with that? And why should you know about it? And what does it mean for it to have been overturned? Also, in further courts, SEC sues consensus and also thinks its ETH and Lido and Rocketpool are securities. So just another day fighting the SEC. So we're going to get to all of this and more. But first, I want to talk about some of these fantastic sponsors that make this show possible, like Kraken. One of the many organizations that's fighting the SEC, if you do not have an account with Kraken, consider clicking the link in the show notes, getting started with Kraken today. If you want a crypto trading experience backed by world-class security and award-winning support teams, then head over to Kraken,

• 20:02David Hoffman?

  one of the longest-standing and most-secure crypto platforms in the world. Kraken is on a journey to build a more accessible, inclusive, and fair financial system, making it simple and secure for everyone, everywhere, to trade crypto. Kraken's intuitive trading tools are designed to grow with you, empowering you to make your first or your hundredth trade in just a few clicks. And there's an award-winning client support team, available 24/7, to help you along the way, along with a whole range of educational guides, articles, and videos. With products and features like Kraken Pro and Kraken NFT Marketplace, and a seamless app to bring it all together, it's really the perfect place to get your complete crypto experience. So check out the simple, secure, and powerful way for everyone to trade crypto, whether you're a complete beginner or a seasoned pro. Go to kraken.com/banklist to see what crypto can be. Not investment advice. Crypto trading involves risk of loss.

• 20:48David Hoffman?

  The Uniswap extension is almost here. The self-custody wallet, created by the most trusted team in DeFi, Uniswap Labs, designed to make swapping feel effortless. This extension lives in your browser's sidebar, letting you swap, sign transactions, and send or receive crypto without ever losing your place on the internet. Plus, with human-readable transaction messages, you'll always know exactly what you're signing. Navigate a multi-chain world effortlessly with support for 11 chains, like Ethereum Mainnet, Base, Arbitrum, and Optimism. No more chain switching or token importing. All your assets are right where you need them to be. The Uniswap extension is designed to level up your swapping experience with other Uniswap Labs products as well. Easily onboard to the extension using the Uniswap mobile wallet to begin managing your assets across platforms and take advantage of smooth, seamless synergies with the Uniswap web app.

• 21:32David Hoffman?

  So go and sign up for the waitlist today and download the Uniswap app and claim your free username to get added to the extension waitlist. The Uniswap extension is available later this month to everyone. Just another way Uniswap is helping you swap smarter. Arbitrum is the leading Ethereum scaling solution that is home to hundreds of decentralized applications. Arbitrum's technology allows you to interact with Ethereum at scale with low fees and faster transactions. Arbitrum has the leading DeFi ecosystem, strong infrastructure options, flourishing NFTs, and is quickly becoming the Web3 gaming hub. Explore the ecosystem at portal. arbitrum.io. Are you looking to permissionlessly launch your own Arbitrum Orbit chain? Arbitrum Orbit allows anyone to utilize Arbitrum's secure scaling technology to build your own orbit chain, giving you

• 22:17David Hoffman?

  access to interoperable, customizable permissions with dedicated throughput. Whether you are a developer, an enterprise, or a user, Arbitrum Orbit lets you take your project to new heights. All of these technologies leverage the security and decentralization of Ethereum. Experience Web3 development the way it was always meant to be. Secure, fast, cheap, and friction-free. Visit arbitrum.io and get your journey started in one of the largest Ethereum communities.

• 22:40Ryan Sean Adams?

  Last Friday, the US Supreme Court overturned a court case that's been in place for 40 years called Chevron deference. The question is, is this good for crypto? What does this mean in general?

• 22:51David Hoffman?

  Okay, Chevron deference is this thing that happened way back when that put in this precedent about who makes the rules when the laws are ambiguous. And so, just since it's July 4th, we'll do some civics lessons. Congress, the legislature, writes the rules. And right now, the executive branch, which is the president's branch, he appoints people like Gary Gensler to agencies like the SEC, or like the EPA, the FDA, FDIC, like pick your three, four-letter agency. And these agencies go out and enforce the rules. Chevron's deference says that if the rules or if the legislature, the laws that are written are ambiguous.

• 23:37David Hoffman?

  Then agencies also, in addition to enforcing the rules, get to fill in the gaps of that ambiguity. They also get to say what the legislature really meant.

• 23:48Ryan Sean Adams?

  They get to have their own rulemaking, if you've heard us talk about.

• 23:51David Hoffman?

  Interpretive rulemaking, yeah. They get to add a little bit. They have a little say about what the rules are. And this has kind of increased the scope of what these agencies can do. It's a move, it's a shift of power towards the agencies. This thing, the Chevron deference. Chevron is the company, the gas company. Deference means they're deferring it. It's just this precedent that established this whole idea. That got overturned by the current Supreme Court. Recently, in America, the Supreme Court has moved conservative as a result of Donald Trump appointments of two, I think, Supreme Court leaders, maybe more. And so they have struck down Chevron deference, which means that agencies no longer have interpretive ability of laws.

• 24:35David Hoffman?

  And so this takes power back to the Supreme Court, the courts in general, which will be deciding things. But then also to Congress, who needs to do a better job to make more informed rules. So it's taking away power from agencies and giving it to the courts, which the Democrats really don't like for some reason. And also the legislature, which is Congress, which is kind of nice because we need Congress to write better laws, is the theory.

• 25:06Ryan Sean Adams?

  It's really interesting because as part of the arguments against Chevron deference, cryptocurrency made an appearance. We had the head of policy from Paradigm on the podcast. His name is Justin Slaughter, and he talked about this. And this was an actual quote from the court case where they refer to cryptocurrency. Let's listen.

• 25:24Speaker 02

  And this is what happens, right? Justice Sonia Sotomayor is talking with the plaintiff's lawyer, Paul Clement, great lawyer. I think he was former Solicitor General, which is the top appellate lawyer in the government. And asking him, you know, you're talking about gridlock from Chevron. What do you mean? And he said, you know, no, what I'm saying, I'm quoting now, is Chevron is a big factor in contributing to gridlock. And let me give you a concrete example. I would think that the uniquely 21st century phenomenon of cryptocurrency would have been addressed by Congress, and I certainly would have thought that that would have been true in the wake of the FTX debacle. But it hasn't happened. Why hasn't it happened? Because there's an agency head out there that thinks that he already has the authority

• 26:04Speaker 02

  to address this uniquely 21st century problem with a couple of statutes passed in the 1930s. And he's going to wave his wand, he's going to say the words "investment contract are ambiguous," and that's going to suck all of this into my regulatory ambit, even though the same person, when he was a professor, said this is probably a job for the CFTC.

• 26:23Ryan Sean Adams?

  Oh my God. That was our reaction to this on the podcast with Justin. So they were using Gary Gensler as Exhibit A of this, of how the administrative state, these agencies can go too far in their rulemaking. And, you know, they're unelected regulators, so why should they get to make the laws with respect to a new emerging field like cryptocurrency?

• 26:48David Hoffman?

  I think in the crypto world, it's very easy for us to look at this and be like, well, this is good, because like our main relationship with agencies is the SEC. But that's not universally everyone's take. There are some positive takes, there are some negative takes. One positive take comes from Joe Lonsdale, who says, "The ruling in Loper-Bright versus Raymondo," this is Chevron deference, "this morning, which overturned the Chevron deference, which allowed unaccountable bureaucrats to determine what laws means for their agencies. A huge victory to check the administrative state and restore the balance of power the USA founders intended." Bology, he put out a very long tweet thread, which if you want to learn more, we can, there's this linked in the show notes, it's very useful.

• 27:29David Hoffman?

  He says, "Technology is about to accelerate because Chevron deference is over, and regulators can't just make up laws anymore, so countless new startups just became feasible." And so he goes through a bunch of industries that had been like suffocated by Chevron deference: genomics, nuclear power, cryptocurrency, and just talks about how like because of this, startups are going to be able to just like really hit rubber to pavement because they're unburdened by overregulation.

• 28:02David Hoffman?

  There are some negative takes. Kyla Scanlon says that means the judicial branch, which we also don't elect, by the way, courts, judges, and also serve life sentences, have an immense amount of power. There's a lot of people out there who are worried that we are taking away authority from experts, who, no matter what you say about agencies, they are filled with experts. And we are giving them to uninformed courts, who are also unelected. And so there might be some like other agencies, which like don't fit the same pattern as the SEC, which maybe this is negative for. This isn't like universally good. It's not universally bad. There's like pockets of goodness, which I will say was the SEC, and perhaps pockets of badness. But as it relates to crypto, very good.

• 28:46David Hoffman?

  Like inarguably good, I would say.

• 28:48Ryan Sean Adams?

  Yeah, after that episode with Justin, David, I came to like to the perspective that this is probably net good in general. Definitely net good for crypto. But like, I feel like it's kind of net good because over the past 40 years, the administrative state has kind of built up. And they're actually not the experts that we hope they would be. They've moved from kind of technocrats, who are unbiased, you know, like the Hester Purst type of regulator, to more like political appointees, who are pushing forward an agenda. And I think that's bad.

• 29:18David Hoffman?

  A lot of climbers.

• 29:19Ryan Sean Adams?

  Yeah, and this will start to curtail. But it does very much depend on Congress's ability to actually like do their job and govern. Because we do have a governance gap in general for a lot of these details that are being worked out. So good for crypto. There are some like trade offs in other areas. But David, that's not it with respect to the SEC. Because even though this has curtailed their rulemaking ability in the future, they can still take enforcement actions, David. And they've taken a number of enforcement actions against crypto companies in the US. And it came out last week that they have now formally sued Consensus. Recall previously, it was a Wells notice, which is like the promise to sue you later from the SEC. Now they have actually sued Consensus. And further, according to their suit,

• 30:04Ryan Sean Adams?

  they've stated that Ether, Staked Ether in Lido, that is S-Eth, and Staked Ether in Rocketpool. They've also alleged that those are securities. So that was the big news that dropped last week.

• 30:18David Hoffman?

  Yeah, this is the SEC just continuing to go after staking, staking as a concept, staking as a, as like a, like a service industry. We, we got in the news that the SEC was like dropping the lawsuit against Ethereum 2.0. Maybe that was just specifically the ideas of like the Ethereum Foundation and Ether, the asset, not being a security, but instead of being a commodity. But they're just like taking one small step backwards. They're taking one, one unit of retreat, if you will. And they're going after consensus as an unregistered broker and because of MetaMask swaps. And then also the staking as a service offerings that they are also going after Coinbase with, they went after

• 31:01David Hoffman?

  Kraken with. Now they're classifying Lido and Rocketpool as unregistered securities. I made the mistake last week of saying like, they're also suing Lido and Rocketpool. They're not doing that. They just are, have classified them as unregistered securities. And so they just don't like staking. Like SEC just does not like staking. They see the staking as like a huge Achilles heel of the Ethereum ecosystem. And they're going after any like protocol startup project company that's offering staking services.

• 31:29Ryan Sean Adams?

  Yeah, I guess as a side note, as a side note, this probably doesn't bode well for a, an Ethereum ETF with staking, like as, as a function of it or as a part of it.

• 31:39David Hoffman?

  It's probably true. Yeah. But we knew that. Like staking was going to be a battle for a while. Mike Selig is a lawyer that we found out on the show before. He says, "In the Coinbase and consensus lawsuits, SEC spins staking services as quote, 'programs' where stakers allocate funds to a pool managed by an operator with discretionary authority who deploys the funds to earn returns for stakers. This is a warped characterization of technical services." So this is the debate. Is this an investment contract? Is staking an investment contract where people like Coinbase, like Lido, Rocketpool are offering investment services and returns with discretionary authority?

• 32:24David Hoffman?

  Or are they offering technical services?

• 32:27Ryan Sean Adams?

  I mean, isn't it pretty clearly like technical services here? They're running nodes for you, right? You can, like, if I run my own ETH node and I stake my ETH, it doesn't suddenly become a security, does it?

• 32:40David Hoffman?

  Right.

• 32:41Ryan Sean Adams?

  And so like what I'm doing with Rocketpool is I'm getting a network of Rocketpool nodes to sort of run the validators for me. Same with Lido. So why would that trigger this is automatically a security? Particularly, this is non-custodial as well. Like, all of these services. It's a much different setup than something like, let's say, Celsius or BlockFi, where I'm depositing my Bitcoin or ETH and they're doing all sorts of things with it. They're taking risks I don't know about. Imagine if they issued a liquid token as a receipt for those assets. That, to me, is like much closer to what a security would be than just like staking.

• 33:22David Hoffman?

  Well, they did call BlockFi, they did label those vaults as securities.

• 33:26Ryan Sean Adams?

  Well, but like, again, if it's centralized, right? And there's some risk and it's a black box and you can't see it. That's where...

• 33:33David Hoffman?

  Definitely discretionary authority, because BlockFi would also choose as to like where to give, to get yield from.

• 33:40Ryan Sean Adams?

  That's where regulators should step in. If it's centralized, it can be regulated, it should be. If it's open source on-chain, if it's technical, right, it shouldn't be. And they're having a hard time, like, figuring out the distinction here.

• 33:51David Hoffman?

  I think the process of logic is actually pretty, I hope this is the process of logic that gets argued in court. The SEC dropped the case around Ethereum 2.0, which is Ethereum with proof of stake. So proof of stake is free and clear from any sort of like SEC indictment and it's SEC pursuit.

• 34:09Ryan Sean Adams?

  Just vanilla proof of stake.

• 34:11David Hoffman?

  And vanilla, like solo staking at home. So solo staking at home is not a security. That's the thing that they've dropped.

• 34:16Ryan Sean Adams?

  Okay.

• 34:17David Hoffman?

  What they are saying is like, if somebody does it for you, it is a security. That's like, because they're suing everyone who is offering a staking platform. That's what they're implying. And so the argument in court... Has to, they have to make the argument that because a third party is doing it, it's therefore an investment contract, even though they've created the foundation of solo staking is not an investment contract. That's not a security.

• 34:41Ryan Sean Adams?

  Yeah.

• 34:41David Hoffman?

  And so they need to make some sort of argument that transmutes some sort of third-party platform into an investment contract. And this is a very important word of discretionary authority over people's funds. It becomes really, really relevant. Is Lido doing anything other than getting yield from the Ethereum protocol? Is it adding yield by any sort of discretionary choice? Is Rocketpool doing that? Or is it just providing technical services? And since we have this foundation that solo staking is not a security, and since Lido isn't doing any sort of like strategy to increase the yields,

• 35:21David Hoffman?

  maybe this gets into MEV boost, like MEV strategies, maybe like the relayers are a conversation here. It's gonna get like pretty unwieldy, but like the technical services argument, I think is pretty strong.

• 35:33Ryan Sean Adams?

  But here's the thing is thanks to Chevron deference being overturned against the SEC, it doesn't get to make up its own rules. So like the default is if it's net new-

• 35:43David Hoffman?

  They have to fight it in court, right?

• 35:44Ryan Sean Adams?

  Yeah, they have to fight it in court or ultimately it goes to Congress. So maybe it takes active legislation to fully clarify this and we're free and clear in the meanwhile. Something else that's relevant here, the US Marshals chose Coinbase to safeguard its cryptocurrency. I'm sure the US Marshals picked up some cryptocurrency from some illegal activity. I'm sure they confiscated some funds and they just used, they decided to use Coinbase as their custodial service. Eric Voorhees points out the irony of this, where on one hand, the US government is declaring Coinbase an illegal brokerage through one of its branches of government, and then on the other, it proceeds to use Coinbase as a brokerage. So there's a little bit of hypocrisy going on in the US government, of course.

• 36:28Ryan Sean Adams?

  It's not like all one entity, these agencies have different viewpoints on things, but the fact that one branch of the US government is calling Coinbase an illegal brokerage and another branch is just using them as a cryptocurrency brokerage is somewhat ironic, I think.

• 36:42David Hoffman?

  I mean, so like if the US Marshal says like, okay, well, the SEC, they're suing Coinbase, so we can't use them. They're suing Kraken, so we can't use them. Then where the hell do they go sell their crypto?

• 36:54Ryan Sean Adams?

  I don't know.

• 36:56David Hoffman?

  What?

• 36:57Ryan Sean Adams?

  I don't know. I'm not sure that they've thought it through, David.

• 37:00David Hoffman?

  One last win in the courts this week that's probably snuck under most people's radars is that secondary sales of BNB and BUSD are not securities. Once upon a time, the SEC actually went after Binance USD, that's BUSD, and called it a security. Yeah, they called a stablecoin a security. Remember when they did that? And so, this is, this is pretty similar to the precedent where XRP secondary sales are not securities, even though XRP might have been sold as a security in the first place. That doesn't mean all secondary sales are securities. We have a second court case that deemed the same precedent, BNB and BUSD secondary sales are not securities. And so, this is District Judge Amy Berman Jackson dismissed

• 37:45David Hoffman?

  this SEC claim. So, we are just layering on a second precedent confirming the first. And so, this got picked up by legal Twitter and just like layering on just another win of clarity by the courts for the crypto industry.

• 37:59Ryan Sean Adams?

  It's all good news. And we have some more good news coming up in the second part of the weekly rollup. ZK Sync is introducing their new network upgrade. We'll talk about that. Also, David, it feels like we've got maybe a killer app on the horizon that's being used right now that's maybe breaking out into mainstream.

• 38:14David Hoffman?

  You'll never guess.

• 38:15Ryan Sean Adams?

  We'll talk about that. Has to do with politics. And also, is Circle about to drop a EU stablecoin? We'll cover that too. But before we do, we want to thank the sponsors that made this episode possible, including a layer two that we enjoy, that is Mantle. Go check out the yield they offer and click the link in the show notes.

• 38:33David Hoffman?

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• 39:18David Hoffman?

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• 40:01David Hoffman?

  Head over to Cartesi's grant application page to apply today. And if you're not a developer, those with staked CTSI can take part in the governance process and vote on whether or not a proposal should be funded. Make sure you're vote ready by staking your CTSI before the votes open. Launching a token? Don't let complex legal and tax issues slow you down. Toku provides specialized support to optimize your launch and ensure that you as a founder and your team and your investors get the most tax efficient outcomes. The Toku team understands the crypto space inside and out and will ensure your token launch is fully compliant while maximizing tax efficiency. Toku can connect you with the best attorneys if you need them to make sure that you have the best advice and Toku can help to optimize your taxes so you pay the least possible amount of taxes while still maintaining legal compliance.

• 40:43David Hoffman?

  With Toku's guidance, you can concentrate on building your company while Toku handles the logistics. Token launches don't have to be complicated. Talk to Toku today to get a free initial token valuation. ZKSync coming in hot after their token drop unveils the Elastic Chain. They say an "of ever-expanding network of ZK rollup secured by math and native interoperability under a uniform intuitive UX." Okay, what does this mean? What is Elastic Chain? So Elastic Chain is what they are calling ZKSync 3.0. ZKSync Lite is 1.0. ZKSync Era 2.0. Elastic Chain, ZKSync, the Elastic Chain now is ZKSync 3.0. Just adding dimensions on to ZKSync. Actually, it's a pretty logical order of operations.

• 41:27David Hoffman?

  ZKSync Lite was basically just payments. So it was a ZK rollup, but without expressivity. So just like it was a payments layer two. ZKSync Era is a ZK EVM, so another ZK rollup, but this time with an EVM with a virtual machine. And now the Elastic Chain 3.0 is a new dimension. Just scale that out into like many, many, many new chains. This is basically ZKSync's version of the Optimism Superchain. This is their version of the Polygon Ag Layer. This is their native interoperability and scalability version. They call it Elastic because elasticity refers to the ability to increase the supply of block space proportionally in response to rising demand.

• 42:10David Hoffman?

  So Elastic Architecture allows a blockchain to expand capacity limitlessly by adding new instances to match capacity for usage. From a technical point of view, the Elastic Chain is a federation of autonomous ZK chains that are interconnected natively at the protocol level, at the root level. From the user perspective, it's just like a unified, multi-chain ecosystem that feels and behaves like a single chain, which is what the Optimism Superchain is going after. You have one address across all ZKSync Superchains, which might sound like how you have one address on like Optimism and Arbitrum and all the other EVM chains. But it's even better than that. You have your address on Optimism, you have your address on Arbitrum,

• 42:54David Hoffman?

  and those are the same addresses, like same 0x1234, but on different on each one of these EVM chains. The Elastic Chain is different. There's just one address, even though there's many, many, many chains. And so your single address, you make a transaction from one single address, and that will transact across all the smart contracts uniformly, seamlessly, across all the ZKSync Elastic Chains. And so the way that this works is there is one single bridge, one single bridge, all the ZKSync chains. Down to one single bridge and then your assets and your address bond from that bridge and can interact with all of the ZK sync elastic chains.

• 43:33David Hoffman?

  It is basically single universal synchronous universal composability for the ZK sync network. And so this has been the big update out of ZK sync. Polygon has found this disagreeable. Here's Hudson Jameson, taking a, who works at Polygon now, showing the network topology of the ZK sync announcement to the network topology of the Polygon ag layer announcement. And it's like basically the same picture.

• 44:00Ryan Sean Adams?

  But that's all true, though, right? They're all kind of building the same thing.

• 44:04David Hoffman?

  They're all building, everyone's building the same thing. Yeah. It's like, to me, this is like, well, yeah, because we're all discovering like the logical conclusion of like ZK rollups.

• 44:11Ryan Sean Adams?

  Yeah.

• 44:12David Hoffman?

  And so the fact that like both teams independently approached the same conclusion makes a ton of sense. Like, I think Polygon will say that they're copying us, but like everyone says that these days. Arbitrum said that about Optimism and vice versa.

• 44:22Ryan Sean Adams?

  I think it's a great development. I like the phraseology of elastic. It reminds me of like cloud compute, you know, Amazon ECT, like elastic compute services, where you just like spin up new chains and scale it horizontally on demand as you need the capacity. I will say, though, what this solves is like fragmentation and interoperability when you're inside of a chain network, right? But it's not like the Holy Grail.

• 44:46David Hoffman?

  It's not global, yeah.

• 44:47Ryan Sean Adams?

  Right, because now we have ZK sync, we have Arbitrum, we have Optimism, like we have Polygon, we have all of the different ecosystems, and those are still fragmented. So we still have some work to do. It's not going to, like elastic chain is not going to solve that problem, but it will unify the chains on like the ZK sync, I guess they don't call it superchain, elastic chain.

• 45:07David Hoffman?

  I think it will solve the problem, it'll solve the problem. And here's why. So right now, how many chains are there on Ethereum? How many layer twos?

• 45:18Ryan Sean Adams?

  How many layer twos in total? We probably have like 100 or so.

• 45:21David Hoffman?

  You bridge around, that you bridge around. So you go to a cross and you hit the dropdown menu, like how many do you see?

• 45:27Ryan Sean Adams?

  12, 15. Something like that. There's a dozen or so that are kind of relevant.

• 45:33David Hoffman?

  And so if you want to go do something on Zora, you got to bridge from optimism to Zora, even though that Zora is in the superchain, right? Like, same thing for the Arbitrum orbits, same thing for the Polygon, maybe not actually for the ZK revs. Too many bridges. But like, if we collapse everything down to just five, you have ZK sync, Polygon, Arbitrum, optimism, excuse me, four. Just four. You have four economic zones. And if there are thousands of-

• 46:00Ryan Sean Adams?

  A Starknet, David.

• 46:01David Hoffman?

  If there are- A Starknet, excuse me. Well, I don't know if Starknet's doing that. Oh, yes, they definitely are. They definitely are. Okay, five, back to five. If you just have five zones, and there are thousands of chains inside of these zones, and they are just solidified, they're adopted, and those five zones with five different trust assumptions, that's what creates the fracturing, that can be solved by the bridging layer and the UX layer. Like, you can build assurances into the concreteness and this hardness of each of these five foundations to the point where middleware and the UX layer can just fix the fragmentation at the UX level. And so, let's get 12 down to five. Let's grow an infinite number of chains inside of those five.

• 46:46David Hoffman?

  And then let's let the apps abstract away the UX because they have the strong property rights settlement assurances because these five things are very well-trafficked and they can get a lot of economies of scale from this. That's how I think this could solve.

• 46:59Ryan Sean Adams?

  I get that. And I'm also optimistic that with what you said, we can also solve interoperability across those five, too. I mean, Justin Drake has talked about shared sequencing and how in ag layer is not just a Polygon solution. That sort of solution can be expanded across all of the ZK-proof type chains. Anyway, more to do there. Yeah, and layer ones. Xerion launched one of these elastic chains, it looks like. And that was news this week. What are they doing?

• 47:26David Hoffman?

  They're doing a pretty cool experiment using zero fee, a zero fee chain. So a chain that costs zero fees to use. So it's completely gasless. There's no gas on Xerion's brand new layer two chain from ZKSync. So they cover all the transaction costs using this thing called a Paymaster. They are working on preventing spam using this thing called on-chain DNA. So it's also a strategy to identify bots versus humans and make sure that the bots actually do pay gas and the humans don't.

• 47:54Ryan Sean Adams?

  That's cool.

• 47:55David Hoffman?

  So they're just running, they're running a gasless experience. And so Xerion, it used to be a, and still is a portfolio manager. Now it's also a wallet. Now it's also a chain. So a pretty fully integrated stack. Now they're experimenting with like, hey, what if we just like pay for the cost?

• 48:09Ryan Sean Adams?

  There's no gas. We completely abstract that away, right?

• 48:12David Hoffman?

  Yeah.

• 48:12Ryan Sean Adams?

  Yeah, I, I think it's great. Very bullish on that experiment taking place. David, we ended last week's weekly roll up with a little bet because we are on the, the brink of the presidential debate, Trump versus Biden. That was going to happen. And there was a bet as to whether crypto would be mentioned or not. I lost that bet. Crypto was not mentioned, but in my defense, very little was mentioned during that debate in terms of substance.

• 48:37David Hoffman?

  Golf was mentioned.

• 48:39Ryan Sean Adams?

  It was an absolutely terrible train wreck of a debate. There's been much commentary on that. I'm sure Bankless listeners have not missed that, that commentary. But crypto was unmentioned at all during that debate. And who knows what's going to happen? Who knows whether we'll have the same presidential candidates in a couple of weeks, like versus this debate. But that doesn't mean-

• 48:59David Hoffman?

  Oh, wait, somebody does know.

• 49:01Ryan Sean Adams?

  Oh, really? Oh, okay. Well, that gets to what we intro'd beginning of this episode, which is we may have stumbled across a killer app for crypto this cycle. We've been looking for it. Is there more to this thing than meme points?

• 49:12David Hoffman?

  It's been under our noses this entire time.

• 49:13Ryan Sean Adams?

  Prediction markets. Polymarket is driving like historic unprecedented volumes in what it's doing. What is Polymarket and what are we looking at on the screen?

• 49:24David Hoffman?

  Polymarket is a prediction market platform. So you can bet on the future outcomes of events. Prediction markets have been a thing before crypto. They're predict it is a, is a prediction market that's like web two based and like, just like ACH transfer based. It's kind of janky. I've used it before, tried to bet on Andrew Yang last cycle, didn't work. Lost.

• 49:49David Hoffman?

  But I could probably bet on Andrew Yang again this cycle. At least some people are betting on Michelle Obama winning on a 4% chance of becoming the Democratic or the presidential election winner. There is on the presidential election winner for 2024 on Polymarket, there is $216 million

• 50:10Ryan Sean Adams?

  Wow.

• 50:10David Hoffman?

  of TVL in this one market, this one

• 50:14Ryan Sean Adams?

  That's huge.

• 50:15David Hoffman?

  single market. So this market is extremely liquid. And so the cool thing about prediction markets is that it allows the market to predict future outcomes. And it's it's an oracle. It's a source of truth. And so not only is this just like, kind of cool to have, but mainstream media organizations like Bloomberg

• 50:32Ryan Sean Adams?

  starting to cover it.

• 50:33David Hoffman?

  frequently cite Polymarket, the crypto app Polymarket, as a source of truth, because it is, it has 85% of all prediction market volumes as it relates to the presidential election or politics in general. So if you are looking to cite anything, you, what you do is you go cite the most liquid venue, because that's where all the players are making their bets. And that is the best source of truth of what is most likely.

• 50:58Ryan Sean Adams?

  Oh, yeah. And it's it responds in real time. So during the debate, like the percentages, like, so right now, we're looking at presidential election winner 2024. Donald Trump has a 61% chance of winning at this point in time. But guess what? Joe Biden is not number two. You know who's hopped into number two?

• 51:16Ryan Sean Adams?

  Kamala Harris.

• 51:16David Hoffman?

  Kamala Harris.

• 51:17Ryan Sean Adams?

  is number two. So the current vice president.

• 51:20David Hoffman?

  17%, which is nuts.

• 51:23Ryan Sean Adams?

  Right? Because she's not even running at this point in time.

• 51:26David Hoffman?

  She's not even running. So this is kind of the cool thing about prediction markets, is that if you are an insider with insider information, that you think that the market is not priced in because it's secret, you get to go to a prediction market and bet your life savings, and you will change the market, you will change the outcome of this, this particular bet. And so maybe, maybe I think it's insane, just because I'm watching Kamala Harris meme videos about like, unburdening ourselves from what have been. I don't know if you've seen these, Ryan. But like, maybe someone knows something, and they think that like, the Democratic Party is going Inspire to swap out Joe with Kamala Harris.

• 52:03Ryan Sean Adams?

  Yeah, I mean, we have Michelle Obama with a 4% probability. So it could it could get even crazier.

• 52:08David Hoffman?

  Why is Michelle Obama in there?

• 52:10Ryan Sean Adams?

  Well, so I mean, what's interesting about this, too, is from the very early days of Ethereum and crypto, prediction markets have been a thing that we had hoped to build, right? And so like Augur was a very early implementation.

• 52:24David Hoffman?

  It's like one of our first big apps, Ethereum.

• 52:27Ryan Sean Adams?

  Yeah, but the problem is the wallet UX hasn't been there. It's been like too hard to use, like gas.

• 52:32David Hoffman?

  It was priced in Ether in the first time around.

• 52:34Ryan Sean Adams?

  Yeah, and now here we are in 2024. And it's like with Polymarket, it's a pretty, it's easier to use than than Predictit. It's easier to use than than Web 2. So very exciting to see. And also, as you mentioned, mainstream attention, they are citing this in like mainstream media as like a good source for truth on what the heck is going on in the election.

• 52:57David Hoffman?

  $260 million is hard to argue with. Balaji put out a tweet right after the debate. This is a tweet of Joe Biden's chances of becoming the Democratic nominee. It plummets from like 85, 90% chance down to 25% chance.

• 53:15Ryan Sean Adams?

  Wow, in real time, this happened.

• 53:17David Hoffman?

  In real time. And so we're watching, we're watching in real time, things like play out. And of course, what happened after the debate? All of the Democratic Party is now saying like, oh, maybe Biden shouldn't be our nominee. Hayden Adams put out a tweet saying Polymarket for Dem nominees is popping off. Prediction markets are basically anonymous insider leaks at this point. So again, if you have, if you're an insider and you know something, you can leak that information to the public without saying who you are or what you know, just by like smashing that buy button on a particular prediction market.

• 53:52Ryan Sean Adams?

  Politics is really a great place to bet. This is on the Polly Market homepage. Like, the most populated prediction markets are like presidential election winner for 2024, who's going to be the Democratic nominee? The probability that Biden drops out of the presidential race? That's a 76% chance at this point in time. I actually believe those numbers, which is totally crazy. We're so close to election day and we have the Democratic nominee, potentially 76% dropping out. And the numbers have been absolutely crazy. This is open market interest, April 2024, all-time highs. And just like, you know, like, these election markets have propelled Polly Market into incredible volumes here.

• 54:36Ryan Sean Adams?

  It's like doing analytics so we can track all this stuff. It's really cool to see.

• 54:41David Hoffman?

  Can I just rattle off some numbers here? And just in terms of size of the bets? Okay, presidential election winner 2024, $217 million. Democratic nominee 2024, $80 million. Biden drops out of the presidential race, question mark, $10 million. Republican vice president nominee, there is $6.1 million on the bet for the Republican vice president nominee. Presidential election popular vote winner, $43 million. Like, these markets are super liquid.

• 55:14Ryan Sean Adams?

  Yeah.

• 55:14David Hoffman?

  Did you pay attention to how much capital was on the me versus Nick Polly Market?

• 55:20Ryan Sean Adams?

  Yeah, I did. Did I ever bet? I don't think I got to the stage of betting, dude.

• 55:24David Hoffman?

  No, because you just took it directly with Kyle Samani.

• 55:26Ryan Sean Adams?

  Yeah, yeah. It was like 40K or something like this? Or was it more?

• 55:31David Hoffman?

  It was about to hit $100,000.

• 55:34Ryan Sean Adams?

  Yeah.

• 55:35David Hoffman?

  Yeah.

• 55:35Ryan Sean Adams?

  That's crazy.

• 55:36David Hoffman?

  People love betting on these things, dude.

• 55:37Ryan Sean Adams?

  No, it's fun. And like I said, I mean, this now works on crypto. I believe this is all on Polygon as well, so.

• 55:43David Hoffman?

  That's right. USCC on Polygon, yeah. Actually relatively centralized of an app, except for the fact that it uses USCC on Polygon underneath.

• 55:51Ryan Sean Adams?

  It's using crypto in the right places.

• 55:52David Hoffman?

  Yeah.

• 55:53Ryan Sean Adams?

  This is Vitalik showing his support for prediction markets. He says, "Prediction markets and community notes are becoming two flagship social epistemic technologies of the 2020s. Both are truth-seeking and democratic, built around open, public participation rather than pre-selected elites. I want to see many more things like this." Vitalik coming out in support of prediction markets and what's going on with Polly Market.

• 56:13David Hoffman?

  Did you see Elon responded to this tweet? Did you see what he said?

• 56:16Ryan Sean Adams?

  No, I didn't.

• 56:18David Hoffman?

  He responds, "Yeah."

• 56:21Ryan Sean Adams?

  What does that mean? That's it. He just responded, "Yeah." Is that good? Alright. Thanks Elon. I like that. Oh, uh, community notes. That's why. Vitalik said "community notes," so Elon Musk was summoned. That makes sense. Yeah. Community notes, by the way, is great. It is great. I agree.

• 56:37David Hoffman?

  Okay, USDC being used in other places. Coinbase and Stripe are bringing cheaper payments to Stripe. So this is news out of Coinbase. Three new integrations. You can pay out in USDC out of your Stripe account to over 150 countries. You can go fiat to crypto on-ramp, add it to base inside of Stripe, and then fiat to crypto on-ramp, add it to Coinbase wallet using Stripe. So Stripe and base and USDC all holding hands.

• 57:06Ryan Sean Adams?

  Love it. Very cool. This is also a USDC update. Dan Romero from Farcaster says, "Introducing Pay on Warp Cast as a Farcaster client. Pay someone with USDC in under 10 seconds. Mobile first with your existing wallet, and not having to look or remember an address, close to instant confirmations, and zero fees on base." It's really cool because not only is Farcaster building sort of a decentralized social network, because it's all on crypto rails, you get a wallet thrown into that, right? So you also get Venmo built in. Now they've just enabled USDC functionality in some of the financial payments. Twitter's trying to do this too. Like, X is trying to do this too, but they're doing it the TradFi way, at least up to this point. They're going through all the existing banking infrastructure,

• 57:51Ryan Sean Adams?

  whereas Farcaster can just do this quickly because it's already on crypto rails. Totally. Ryan, I'm ready to hear about taxes. You really are. Do you really want to? You have to really mean it, David, before I'll tell you about taxes, okay? I'm looking at my phone. Go for it. This is the IRS issuing its guidance on crypto taxes. This is one of those rules, by the way. You know, like the rulemaking we're talking about with, yeah, Chevron deference? They have less ability to do this sort of thing. But anyway, the good news is, the absolute worst outcome was averted. Do you remember that Bankless podcast we did a while ago when the IRS originally...

• 58:31Ryan Sean Adams?

  put out its rulemaking and it was looking like they were going to ask every single DeFi wallet and user interface, think EtherScan, think Xerion, who we were talking about earlier, think MetaMask wallets, all of them to actually identify the US citizens that are using their service and go send them a 1099 for trading activity inside of it. Okay? That means they need to know who you are, like passport, like a physical address. Like, I don't need to tell Bankless listeners how much of a nightmare that would be from a privacy perspective and just from like, you know. And no one wants that. No one wants that. Anyway, that was kind of like the Doom type case.

• 59:11Ryan Sean Adams?

  Well, they have come out with their formal rules and they've just kicked that decision down the road to 2025. So we're not out of the woods yet. We're not in the clear. But there was a scenario where they would start enforcing these rules and require all like DeFi frontends essentially to issue 1099s to US citizens. And they're not doing that, at least not right now. They're kicking that decision down the road and they say they're going to clarify it later. So. How does Chevron deference impact that? Well, this is one of the rules, you know, like when, according to the APA, which is the Administrative Procedure Act, like basically these agencies have some rulemaking ability, right?

• 59:51Ryan Sean Adams?

  And they have to post these rules in advance and get commentary from the public before they do it. This is just like one of those, those rules. And so if they, if they do something like arbitrary and capricious, then they'll just have like less ability to kind of like enforce this. Yeah. So it curtails IRS ability to just, you know, create stupid rules in crypto as well. That sounds good. That sounds good. It's good. It's just good. Goodish news, I suppose. And speaking of that, David. Speaking of goodish news. Yeah. Why don't you do this? Why don't you tell me about what's happening over in Europe with Mika and stablecoins?

• 1:00:29David Hoffman?

  Yeah, it's my time to take the Mika reins. Jeremy Allaire puts out a tweet saying, "Today, I'm delighted to share that Circle has been authorized as an e-money issuer by the ACPR in France and a MICA-compliant e-money token issuer for both USDC and UEURC." Wow, this is some compliance speak. "Circle France is now the home to the headquarters of our European-regulated financial activity, and European customers can now access USDC and UEURC via Circle Mint France. All USDC and UEURC currently in circulation in Europe are officially MICA-compliant,

• 1:01:10David Hoffman?

  with Circle now holding 100% of UEURC reserves under our regulated Circle France entity. All of the USDC held by Europeans remains fully fungible globally, and users can trade, transact, self-custody, use in DeFi, etc., with no changes." So I guess we're getting UEURC, which is not roll-off the tongue like USDC does, but nonetheless is a European stablecoin backed by 100% reserves, but also European people, citizens, Europeans can use UEURC and USDC interchangeably.

• 1:01:44Ryan Sean Adams?

  Raise of the week, tell me about Astraea, David.

• 1:01:47David Hoffman?

  Astraea, this is a Bankless Ventures raise. Astraea is a decentralized sequencing layer. You would know this as a shared sequencer. It's a Layer 1 blockchain, because all shared sequencers are blockchains, that enable decentralized rollups. Let me say this again. Astraea, it's a decentralized sequencing layer to help rollup sequence both in the Ethereum ecosystem and the Celestia ecosystem. You would know this as a shared sequencer. This round is led by DBA, John, and also placeholder Chris. And also, we're in this round as well, Bankless Ventures. And so this is, of course, trying to recompose all of the rollups into a unified structure.

• 1:02:27David Hoffman?

  I think, Ryan, and if the listeners peeked, you should watch this 20-minute bit of what I would call

• 1:02:34Ryan Sean Adams?

  Oh, I watched this recently.

• 1:02:35David Hoffman?

  Stand-up for nerds.

• 1:02:35Ryan Sean Adams?

  It was really cool.

• 1:02:36David Hoffman?

  You've watched this?

• 1:02:36Ryan Sean Adams?

  Yeah.

• 1:02:36David Hoffman?

  It was hilarious, right?

• 1:02:38Ryan Sean Adams?

  Yeah, it was basically the founder, Josh Bowen, the founder of Astraea, saying, "We're all building the same thing in crypto, and here's why."

• 1:02:46David Hoffman?

  Yeah, exactly. And it was hilarious. His delivery of it was like, pretty funny.

• 1:02:50Ryan Sean Adams?

  Yeah.

• 1:02:50David Hoffman?

  So it's basically stand up for nerds. So if you want to meet Josh Bowen, he's not talking about Astra. He's talking about something else. There's a link in the show notes to watch this. It's pretty funny.

• 1:02:59Ryan Sean Adams?

  David, speaking of shared sequencers, let's do a joke race update because on the top of the list of podcasts that bankless citizens want us to do, we give them the opportunity to submit requests and then vote on. I think coming in at number one so far, and like, there's still some time to vote. I think there's like seven or eight more days to vote.

• 1:03:18David Hoffman?

  Seven more days, yeah.

• 1:03:19Ryan Sean Adams?

  Is The Great Sequencing Debate with John Charbonneau, Justin Drake, Josh Bowen, we were just talking about, and Ben Fish. That's coming in at number one with the most votes. And so that might be the episode that we do.

• 1:03:32David Hoffman?

  Yeah. One more guest that you skipped over is M-Team. His name's Matthew, who also proposed this podcast episode. So the proposer is proposing himself as a guest.

• 1:03:42Ryan Sean Adams?

  Okay, fair play.

• 1:03:43David Hoffman?

  Which is 100% within the rules.

• 1:03:45Ryan Sean Adams?

  All you have to do is get the votes, if you can get the votes.

• 1:03:47David Hoffman?

  All you have to do is get the votes. So this is coming in at number one. Number two is It's a Miracle Anything Works in Crypto with a guest named Max Howell, who talks about some of the open source supply chains that makes the crypto industry work. I think we all remember when that ledger module thing broke and we all had to stop using crypto. And then we all had this existential crisis about like, wait, what the hell's going on? Third place is Mert. Mert's third.

• 1:04:12Ryan Sean Adams?

  Our good friend Mert. All right. Well, what's the call to action here? People can still vote, right?

• 1:04:16David Hoffman?

  People can still vote. So you have eight, excuse me, eight days to vote. So if you are a bankless citizen with a 2022, 2023, or 2024 PoE in your wallet, sign in to joke race with that wallet and you can vote on one of the submissions. The submission phase ended a week ago. And so now it's just the voting phase. Right now, The Great Sequencing Debate is coming in. So if The Great Sequencing Debate passes, John Charbonneau, Justin Drake, Matthew, Josh, and Ben are compelled to come on the podcast. This is how governance works. If the go through, you guys have to come.

• 1:04:50Ryan Sean Adams?

  They're compelled as well.

• 1:04:51David Hoffman?

  They're compelled, yeah.

• 1:04:52Ryan Sean Adams?

  I see. Now we know the rules. All right, let's close this out with meme of the week. David, is this a 4th of July week or something? Is this a 4th of July meme or something else?

• 1:05:01David Hoffman?

  No, this was a meme from last week where this went out. It was a meme I found on Friday where Ethereum got, or consensus of MetaMask got sued by the SEC. The SEC deemed that Lido and Rocketpool are unregistered securities. And Solana got an ETF submission.

• 1:05:17Ryan Sean Adams?

  So Solana's just sleeping like a baby here.

• 1:05:19David Hoffman?

  And so this meme is Ethereum, the army man protecting the sleeping Solana from Gary Gensler.

• 1:05:24Ryan Sean Adams?

  Oh, that's very nice.

• 1:05:25David Hoffman?

  Is how it felt last week.

• 1:05:26Ryan Sean Adams?

  Very nice of Ethereum to do that. Got to end with this, of course. None of this has been financial advice. You know crypto is risky, 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. Happy 4th of July.