AI Memecoins & Lessons for Narrative Investing

Ryan and David share another Bankless Takes episode where they discuss their AI memecoin analysis, why AI crypto tokens are a big deal, how to speculate on narratives like AI memecoins (lessons and guidance for “narrative investing”, and what are the next big narratives this cycle. ------ 🌐 CARTESI | MODULAR EXECUTION ON LINUX https://bit.ly/3SYkjzF ------ 🎧 Listen On Your Favorite Podcast Player: https://bankless.cc/Podcast ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2 ⁠ 🦄UNISWAP | SWAP SMARTER https://bankless.cc/uniswap 🔗CELO | CEL2 COMING SOON https://bankless.cc/Celo 🗣️TOKU | CRYPTO EMPLOYMENT SOLUTION https://bankless.cc/toku 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle ⚖️ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum https://feeds.flightcast.com/%E2%81%A0https:/bankless.cc/Arbitrum ------ TIMESTAMPS & RESOURCES 0:00 Intro 4:49 Why is Crypto x AI Narrative a thing? https://media1.tenor.com/m/q0zcs7G7FogAAAAd/galassia-galassie.gif https://twitter.com/0xMubeenn/status/1764139946062029212 https://vitalik.eth.limo/general/2024/01/30/cryptoai.html 10:40 Decentralized AI & Compute https://x.com/TrustlessState/status/1762318512507208182 https://x.com/anna_kazlauskas/status/1764675698310926459? https://www.coingecko.com/en/coins/filecoin https://www.coingecko.com/en/coins/arweave https://www.coingecko.com/en/coins/renderc https://www.tradingview.com/chart/?symbol=MEXC%3ATAOUSDT 20:00 Road to AGI 23:00 AI Memecoins 21:12 Crypto Narrative Guidance https://twitter.com/0xMubeenn/status/1764139946062029212/photo/4 https://cryptonarratives.substack.com/p/how-to-catch-a-few-20x-to-100x-coins 46:55 Top Signals 49:50 Predictions & Closing https://twitter.com/mrjasonchoi/status/1758902284980027818 56:51 Disclaimers ------ 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.

• 0:02Ryan Sean Adams?

  Bankless Nation, we got a Bankless Takes episode for you because we got something top of mind and I think it should be top of mind for you as well. David, you wanted to come talk about AI tokens and I think that will unleash a few other topics as well that are adjacent, including narrative investing and how to make that 20 to 100x gain, whether that's even possible this bull cycle. But first, what are we going to cover today? Tell me why you're excited about AI tokens.

• 0:27David Hoffman?

  I think today, Ryan, I want to plant a flag and say that the next crypto cycle, the 2024-2025 bull market cycle, is going to be the AI token cycle. In 2017, we had the ICO cycle. In 2021, we had NFTs. In 2025, we will have AI tokens. And I'm seeing these like just two parallel technologies just converge together in spectacular fashion. So I want to talk about like some of the experiences I had at ETH Denver, call it AI Denver, the world of decentralized compute, the road to AGI that crypto can facilitate, and why crypto and AI is such a match made in heaven, and why I think it's going to define the whole

• 1:09David Hoffman?

  entire market cycle that is this incoming extremely frothy, extremely speculative bull market.

• 1:14Ryan Sean Adams?

  I think that's a good grounding for what I want to talk about too, David, which relates to sort of AI tokens. The question of, is this a narrative trade, a narrative investment? I think your answer to that in comparing it to ICOs would be, yes, it is. Maybe there's something fundamental here, but it almost is certainly a narrative investment. So I think we want to broaden that and talk a little bit about narrative investing in crypto in general, and maybe some of the lessons or frameworks that apply because I saw a fantastic piece by a guy named Victor that I want to share with you too, David. And then maybe we could conclude with talking about what the next big narratives this cycle might be. I think you came back from ETH Denver with a list of three that we want to get into.

• 1:54David Hoffman?

  Three. One very big one, and then no second place, and then a third and fourth place.

• 1:59Ryan Sean Adams?

  All right, guys, we're going to get into all of that. But before we do, we want to thank the sponsors that made this episode possible, including our number one recommended exchange for 2024. That is Kraken.

• 2:10David Hoffman?

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• 2:55David Hoffman?

  whether you're a complete beginner or a seasoned pro. Go to kraken.com/bankless to see what crypto can be. Not investment advice. Crypto trading involves risk of loss. Are you launching a token? Is it already live? How are you managing the legal and tax obligations for providing token grants to your team? It's no secret that token management gets complicated. Between learning all the legal language and tax obligations in every country that your team is in, token grant management can feel like an obstacle course. But it doesn't have to. That's where Toku steps in. Toku provides practical tools to handle token grants, allowing for effective oversight of token distributions and payroll tax compliance for employees, contractors, advisors, and investors. They also handle tax withholdings through their real-time tax calculations that can be done by Toku or integrated into any payroll EOR providers in any jurisdiction.

• 3:39David Hoffman?

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• 4:23David Hoffman?

  And the best part, limit orders are built on Uniswap X, which means no gas fees. Also new to the web app is the data and insights pages with real time candlestick charts, price data, transaction logs, and detailed pool data, all integrated into the Uniswap web app. All of these new releases come together to create one platform to help you swap smarter every time, no matter where you are, on web, mobile, or on the extension. Click the link in the show notes to sign up for the extension waitlist and download the mobile app. Start swapping smarter with Uniswap.

• 4:49Ryan Sean Adams?

  All right, David, tell me about AI tokens. Why are AI tokens a thing? Why, how is that intersecting with with crypto right now?

• 4:59David Hoffman?

  Both of these industries are being built in parallel, completely separately and adjacent from each other. And I think the space that these two industries occupy and overlap at is going to be the thing that really captures a lot of speculative fervor, mainly from the people that like, hey, I want to invest and have exposure to AI, but I don't want to invest in Nvidia because it is larger than the entire Chinese stock market. There are these two storms that I'm seeing slowly converge together as they learn how to like relate with each other. I'm calling it like a particle collision. Like what happens when you smash the AI particle with the crypto particle?

• 5:37Ryan Sean Adams?

  Well, you got on the screen, you're making me show the Andromeda galaxy and the Milky Way galaxy. I think that's on track to like intersect with one another in like 5 billion years or so. These are galaxy sized collisions is what you're talking about.

• 5:49David Hoffman?

  Well, yeah, we have the three, two and a half trillion dollar crypto economy colliding with the, you know, probably a couple trillion dollar AI economy. And I think we're going to produce a few trillion dollars as a result of that collision from across the space. And I think it's mostly going to be AI meme coins. And why is it going to be mostly meme coins and not like AI fundamental coins? Well, what do we do in crypto? We just print tokens out of thin air and we name them things that are like related to AI and then they pump. And so there's going to be a few ounces of like AI fundamentals that I think are going to be very real. That's going to produce like the massive amount of leverage that it has. That we have to fuel into the world of AI meme coins. That's what I think is coming.

• 6:34Ryan Sean Adams?

  So you think this is a bit more of a narrative trade? Actually, I wanted to show you this. I was wondering if you if you kind of agree with this. So this is a graphic that I saw in a Twitter thread about attention captured, right? And we have like the serious projects on the top, and this is kind of like a graph. It's a very small slit.

• 6:52David Hoffman?

  Five to 10% of the bar.

• 6:53Ryan Sean Adams?

  Right, 5 to 10%. And then we have meme coins that comprise the bulk of this being like, you know, 85 to 90%. Is that what you're saying? Is that how you are thinking about AI and crypto as we get into this? Is it like 90% meme, but like 10% substance?

• 7:12David Hoffman?

  That's exactly right, along with an order of operations there. First, it's the 10% substance which creates the space, the room, the motivation for the 90% meme. I think there is actually a ton of substance between the relationship between crypto and AI. And it's that is as a result of that very real intersection, we're going to attract, you know, for better or for worse, mainly for worse, like the scammers, the grifters. Like this is what's going to be the signal of the top of the market is that like people realize that they can make a quick buck by like throwing crypto and AI together and like, you know, doing some like ICO, if you will, or like some startup raise. We've already seen froth in the AI VC market six to nine months ago, post chat GPT launch.

• 7:57David Hoffman?

  And like, what happens when you collide that particle with the ability to mint an ERC 20 token permissionlessly?

• 8:04Ryan Sean Adams?

  Two frothy, world-changing technologies that no one understands, and they're going to smash together and create like, what, a super bubble?

• 8:12David Hoffman?

  A legitimate crypto super bubble, a super bubble, super cycle, call it. Like, I also want to leave room. I was talking to Mike Ibleto about this. I also want to leave room for the potential of like, the whole AI world creates something like approaching like the dot com bubble slowly over the next like, you know, two to five years. Something stupid like this. AI is going to change the world. I think everyone has like now realized that. But now the whole AI industry has access to quick liquidity. Tokenization events, meme power, like content generation power, like I think wouldn't, yeah, I think it's gonna get very, very

• 8:46Ryan Sean Adams?

  Okay, so

• 8:47David Hoffman?

  Before we get there

• 8:48Ryan Sean Adams?

  Yeah, the context here then is that this is definitely a narrative investment, is definitely a narrative trade this cycle. And also, there might be some fundamentals here, but it's going to be a small sliver, a small portion of the value here. It's going to bubble and froth and get way over its skis. This is a graphic from Vitalik, a recent post that he did at the end of January, where he talked about the intersection between AI and blockchain, and they're kind of two separate technologies, but there are some synergies. Data ownership, transparency, monetization, cost cutting, competition, innovation, inclusive. But I'm guessing we'll also create a whole bunch of like AI meme coins that really like have, are nothing more than narratives, right? Are not actually making use of blockchain

• 9:32Ryan Sean Adams?

  fundamentals and kind of this intersection in the Venn diagram.

• 9:36David Hoffman?

  I think we can also like talk about the blurring of the line between fundamentals and memes. Like WorldCoin, for example, like has a ton of just like very real building going behind it. That's a very real project, has attracted very real VC dollars, and it has done like a very like good job. Like what, no matter what you believe about the project, they are doing this very hard thing about building this infrastructure to help identify humans on the internet in the age of AI. It is also, Ryan, trading at almost a hundred billion dollar market cap, and that is a meme valuation. Real project, meme valuation. And so like, there's gonna be this blurring of the line between like what's real and what's like hot air. And right now, like we have a little bit of hot air. I think

• 10:19David Hoffman?

  we're gonna have a lot of hot air. First, I want to talk about like, why there will be hot air in the first place? Because if there's hot air somewhere, that implies that there is a real source of energy producing that hot air. I'm talking about fundamentals here. Like, what are the reasons why there's a fundamental truth about the intersection between crypto and AI? First, I want to talk about decentralized AI models.

• 10:44David Hoffman?

  Second, I want to talk about decentralized compute platforms. Third, in order to really strike our imaginations, the road to AGI using crypto as a railway to get there. And then also talk about after that, the shared properties that crypto and AI have. And then lastly, we'll end up where we're ultimately going to converge no matter what, which is AI meme coins. Are you ready?

• 11:05Ryan Sean Adams?

  Totally. Let's go.

• 11:06David Hoffman?

  All right. First decentralized AI models. This is what happens when you have a lot of the properties that we have in the crypto space. Open permissionless innovation, decentralization, moving complexity innovation towards the margins with the world of AI. I was at this AGI summit day and I was listening to Casey Caruso, who's sitting on the left there, who gave this absolutely banger take, which is that we have this desire to have as many AI models as possible. You know, your favorite line, Ryan, which is like, we'll have as many chains as there are websites, or we'll have as many tokens as there are our websites. I think we also want as many AI models as we have like blogs or websites, or any like large Cambrian explosion of stuff that we've seen on the internet.

• 11:51David Hoffman?

  AI models can like do almost infinity things. And the more of them that we have, the more flourishing that there can be.

• 11:58Ryan Sean Adams?

  What do you mean by an AI model, David? Like is ChatGPT, is that sort of an AI model? And that might be different than, you know, the, the model behind X, what's it called? The one Elon's developing? Yeah, Grok. Is that a model? What's a model?

• 12:12David Hoffman?

  Yeah, that's exactly right. So like ChatGPT is one model, Grok is one model. And I will call these very generalized models. There can be models for anything and you can put any sort of utility into a model. Think about a model that has been custom trained, Ryan, as it to be your personal assistant, like your Siri or, you know, your like Amazon Alexa. Like we can talk about like the blue chip fat tail models that are very generalizable, that, that are kind of one size fits all. And then we can also go down the line of just like, what about like an NPC inside of a game engine? Or something like, or some model about like the weather? Any sort of AI model that can be either very broad or very narrow.

• 12:53David Hoffman?

  But the idea is that with the proliferation of AI, we have more models and we have a lot of them, or at least we can. That is the world that I would enjoy, especially when like you can start to associate like AI, the growth of AI models, as in the growth of like human cultural proliferation, expressivity, like how can we leverage the power of AI in more total cases? And so this is the world that I would want. This is the world that a lot of the people in the open AI community also wants. That's open source AI, not open AI the company. But here's a line from Casey Crusoe, who like brought us, brought everyone in the audience back down to reality. "We want open source AI. We want a wide proliferation of

• 13:35David Hoffman?

  models custom fit for various use cases, but the tailwinds behind the economies of scale for AI models are very strong. Data monopolies and compute monopolies restrict open AI model development." And so basically, who has all the data, you know, Facebook, like why is Reddit going public? Well, because they've got all the data for AI. There's these data silos, these web two data silos, that is all of the, that has all the data that all of these AI models need to run on. So whoever has all the data has economies of scale for producing very strong AI models. If you, as your, you know, regular homegrown AI tinkerer, if you don't have access to data,

• 14:17David Hoffman?

  you're not going to be able to produce an AI model. And so that is one very strong centralizing force that AI has. And then the other one is access to compute. Who's got all the access to the GPUs? It's going to have this massive economies of scale that the regular like long-tail and consumer experimenter hobbyists won't be able to access. So I think if you like understand crypto principles, you can kind of see where I'm going with this. Like, we want AI models, but we can't have them because of siloed centralized resources.

• 14:47David Hoffman?

  Ready to go into decentralized compute platforms?

• 14:49Ryan Sean Adams?

  Yeah, so, okay, so we want decentralized AI because it's just like a richer, more organic, more competitive than kind of data monopolies, but that doesn't, it doesn't follow that that's what we'll get just because we want it. You know what I mean? Like, you were just saying that these are centralizing, you know, like monopoly forces. So, part of me is like, okay, well, game over. You know, we can't, we can't just like, you know, make them decentralize just because we want it. Is there some sort of market force that will propel decentralized AI and decentralized compute? Is this part of the theme here?

• 15:24David Hoffman?

  Well, so this is getting to some of the actual, like, already existing tried and true crypto platforms that can actually pull that market force down towards the decentralized end of the spectrum. So first, you're seeing like centralized AI, call that the Google, the OpenAI versions of the world, but we are looking for decentralized AI. And I think this like decentralized AI narrative is something that's like very ripe to be taken up by society. When they learn about how much returns on capital on like monopoly that OpenAI and others will have over us, there's going to be just an interest in decentralized AI as a narrative. Crypto actually has meaningful answers to this. Like, some of the biggest tokens that have pumped, and this is when we'll start to get into like the narrative

• 16:09David Hoffman?

  and meme side of the world, some of the biggest tokens that have pumped in the last like three months are all these decentralized compute platforms. Filecoin is up 100% in the last 30 days. Arweave is up 200% in the last 30 days. Render is up 300% in the last three months. Bitensor is up 1,250% in the last five months.

• 16:30Ryan Sean Adams?

  Oh my god.

• 16:31David Hoffman?

  These are all various like decentralized compute platforms that have caught like the AI bug, the AI narrative, like have caught the AI bid. And so these, and Filecoin, you put data on it and it's allowing for permissionless compute. And so the idea is actually very similar, Ryan, to your, my protocol sync thesis. Wherever you can have the most credibly neutral repository of data, it will collect all of The data, there's this thing called a data gravity in the web two world. Whereas like if there are stockpiles of data that exist on the internet somewhere or like in servers. Apps will actually migrate towards that data. So it's like thinking of like data as like a black hole. If there's enough of it, the data won't move.

• 17:15David Hoffman?

  Apps will actually move towards the data and Filecoin, the Filecoin thesis is that so much data will end up on Filecoin. Because it's the permissionless compute platform for data. That just the apps will go around it. And so, you know, Filecoin is up 100% in the last 30 days.

• 17:28Ryan Sean Adams?

  I'm starting to see the why the contours of we we introduced this as a narrative. Cause that what you just said is absolutely a narrative. It doesn't necessarily have like substance backing it, but like you could foresee a world where everything you just said. Becomes like comes true, but that's not necessarily going to happen. You could just sort of foresee it. So it's a narrative. Here's a tweet you had us put in this episode today from from Anna. Today, models are primarily trained on publicly scraped internet. What if 100 million users contributed their private data from siloed platforms to create a user owned? Foundation model. So this is basically the part of the narrative is how do we compete against these centralized?

• 18:08Ryan Sean Adams?

  Data banks like data monopolies. Well, we get 100 million users to sort of combine their force behind a credibly neutral compute platform. It may be incentivized by a token. Is this sort of where we're going with the story?

• 18:20David Hoffman?

  That's exactly right. I love how you you brought up that tweet. Do you think that person's a crypto person?

• 18:25Ryan Sean Adams?

  I've never seen this person, but I was assuming yes, because it's in a bankless show, but you're going to tell me no?

• 18:30David Hoffman?

  The answer is no, this is not a crypto person. I have two overlapping followers. This is an AI person.

• 18:35Ryan Sean Adams?

  Oh, wow.

• 18:36David Hoffman?

  If the tweet is talking about what if 100 million users coordinated their resources together? To get them out of siloed centralized platforms to create a user owned foundational model? That sounds like a crypto tweet. That is a crypto ethos. And so what the AI world is missing is what crypto has like the the pushing power and authority to the margins. Right. Pushing power to the individual, whereas there's so much power contained in centralized. Wall Street, AKA Silicon Valley, AKA web two resources, how they have all the power. Decentralized AI is about taking all of that power and like pushing it down toward the margins. But you need crypto to do it.

• 19:17David Hoffman?

  And so like you're talking about like, yeah, that's, that's a narrative now. Well, markets price in the future. And so people just think that this might be a thing. And also we have just like the markets going up in price and we have an interest in going out towards the long tail. We have the Bitcoin ETF funneling hundreds of millions of dollars into Bitcoin each week, which is acting like a hydraulic pump down for the rest of the risk on market. Like this is the storm that is coming. We have this one ounce of very real narrative and it's going to create a pound of like meme coinery.

• 19:50Ryan Sean Adams?

  Yeah. Okay. So that's what's going on. I see the narrative. It remains to be seen whether it actually becomes, you know, point of fact, a reality here. But I see the narrative around decentralized models and AI and decentralized compute. Tell me about this next piece though, the road to AGI, which is artificial general intelligence, right? By the way, I'm not sure that we want to go down that road, but you included it here. What, you know, where does this fit into the, the story arc?

• 20:16David Hoffman?

  This is where I think this is a little bit of a less assured take, but I would, I think it'd be very, very fun if we actually got there. When I went to, got into ETH Denver and went to the AGI summit, which is where actually Vitalik was talking. Casey Crusoe from that tweet that we were just showing was talking. Sriram from Eigenlayer was also talking. He was the first person I saw giving a talk at this AGI summit. And his talk I thought was actually the most interesting. He was talking about like this road, road to AGI and the three different ingredients that we need to get there. And I felt it was super compelling. I am getting on board on this narrative. One is open source AI models is one ingredient.

• 20:59David Hoffman?

  Two is permissionless innovation to innovate on these AI models. And three, value accrual mechanisms to these AI models. So like open source AI models, which is like the opposite of what chat GPT is, the opposite of what OpenAI ironically is, the opposite of what Google Bard is. Open source models, so we can all as humanity coordinate and tinker around these open AI models. That's the first ingredient. Second, permissionless innovation on these AI, AI models. Something that Eigenlayer is working on is this derivative license. So that if you are making an AI model and then other people find it useful, but then they also make a derivative of it. There is a value chain of payments for developers who are making these AI models.

• 21:42David Hoffman?

  And then this last ingredient is basically the marketplace. Where can we link the value that these models are creating for users to actually the developer who is birthing them into the marketplace? And so, once you have derivations or derivatives of these AI models, you get replication and reproduction and you add in the market incentive forces. You get a survival of the fittest. And so, this is just one slice of one possible narrative that's coming out of this AI crypto space of just like, we have these ingredients. We can make expressivity happen. We can make a Cambrian explosion of innovation happen. Maybe, Ryan, we can even make AGI happen. But it's using a crypto foundation for coordination and resource management

• 22:26David Hoffman?

  to produce a proliferation of AI, proliferation of human culture and creativity. That's kind of the part that I see.

• 22:34Ryan Sean Adams?

  It also strikes me that those three things are the same thing, like an effective accelerationist like Beth Jay-Z would say. And that's the thing that's going to prevent us from regulatory capture by authoritarian regimes and monopolies who will use AI against the people, basically. So it has that shared, I guess, narrative, let's say, with crypto as well. Okay, so the projects you mentioned, Filecoin, R-Weave, Render, I don't know as much, and BitTensor. But R-Weave and Filecoin, for sure. These are real projects that people are actually using today. But you were also talking about AI meme coins, right? So are you talking about these projects? Like, there's some, obviously, memetic narrative element to even legitimate projects that are doing something real.

• 23:19Ryan Sean Adams?

  Or are you talking about a new, kind of like, shitcoin waterfall? Like, down-market types of meme coins that are just taking this narrative and not producing much of substance and just running with it? Like, what's that piece of the equation?

• 23:31David Hoffman?

  I'm talking about both. And like all things, in every single crypto cycle, we will start. Start with very real fundamentals and we will end with shit coronary mania froth that ends in tears and ruins. Uh, and so we are somewhere towards the beginning of that cycle. And I'm claiming that we are heading towards the, the memery froth end of the spectrum. Uh, and there's like, just a lot of properties that the crypto industry has that the AI industry does not have and will probably want. Uh, the AI industry is like rapidly innovating. It's moving at breakneck speeds. It's comprised of futurist frontier technologists who like, don't want to like be under the ire of nation state regulation. Cause it will slow them down.

• 24:16David Hoffman?

  What does crypto offer them? They offer them permissionless liquidity events with the ERC 20 token. They offer them like a way to actually have open access to data, all the fundamentals I was talking about. And we actually are also an industry that moves at breakneck speed. I think there's like this cultural cut from the same cloth between the AI industry and the crypto community. That's going to make a match made in heaven. I don't want to like, cause there's gonna be a lot of like bullshit out there that is going to be very bad. And it's going to like sour the crypto industry, but at least we're like 18 months away from that. It's a match made in heaven in the sense that like, there's a lot of there there. There's a lot of like clay for both industries to work with, especially just like if an AI company that is going to start up as some like wrapper around a chat GPT.

• 25:02David Hoffman?

  They're never going to IPO, but they could launch a token. And I think just the permissionless access to innovation that we both want and both have is going to, one is going to fuel the other. And especially the fact that we have ERC 20 tokens that these AI companies can just like print or AI founders or like, you know, shitcoin startup founders. They, they can just start printing the tokens. You, we've seen this, we've seen this movie before. This happens every single cycle.

• 25:27Ryan Sean Adams?

  So you're telling me every data model is going to get a token here, David? That's what, that's where we're going to go. A world of many data models and each model has a token, maybe.

• 25:36David Hoffman?

  The rule of if it can be a token, it will be a token has played out very, very well in crypto.

• 25:41Ryan Sean Adams?

  Yes. All right. Well, uh, that, that, that's a great overview and I think there's so much more content to. On Bankless around this AI plus crypto theme, some of which will be more fundamentals driven. But David, when we come back, I want to talk about this in the context of a fantastic narrative investing article that I read this week and throw out some guidance for Bankless listeners who are trying, getting off of the fundamentals train a little bit and looking over their shoulder at some of these attractive crypto narratives out there because I think there's some useful insights we have for them. So we'll be back with that. But before we do, we want to thank the sponsors that made this episode possible, including our friends over at Mantle, the yield chain. Go check them out.

• 26:22David Hoffman?

  Mantle, formerly known as BitDow, is the first Dow-led Web3 ecosystem, all built on top of Mantle's first core product, the Mantle Network, a brand-new, high-performance Ethereum Layer 2 built using the OP stack, but uses Eigenlayer's data availability solution instead of the expensive Ethereum Layer 1. Not only does this reduce Mantle Network's gas fees by 80%, but it also reduces gas fee volatility, providing a more stable foundation for Mantle's applications. The Mantle Treasury is one of the biggest Dow-owned treasuries, which is seeding an ecosystem of projects from all around the Web3 space for Mantle. Mantle already has sub-communities from around Web3 on-boarded, like Game7 for Web3 gaming and Bybit for TVL and liquidity and on-ramps. So if you want to build on the Mantle Network, Mantle is offering a grants program that provides milestone-based funding

• 27:07David Hoffman?

  to promising projects that help expand, secure, and decentralize Mantle. If you want to get started working with the first Dow-led Layer 2 ecosystem, check out Mantle at mantle.xyz and follow them on Twitter at ZeroXMantle. Cello is the mobile-first, EVM-compatible, carbon-negative blockchain built for the real world, driving real-world use cases like mobile payments and mobile DeFi. And with Opera MiniPay as one of the fastest-growing Web3 wallets, Cello is seeing a meteoric rise with over 300 million transactions and 1.5 million monthly active addresses. And now, Cello is looking to come home to Ethereum as a Layer 2. Optimism, Polygon, Matter Labs, and Arbitrum have all thrown their hats in the ring for the Cello Layer 2 to build upon their stacks. Why the competition? The Cello Layer 2 will bring huge advantages like a decentralized

• 27:52David Hoffman?

  sequencer, off-chain data availability secured by Ethereum validators, and one-block finality. What does that all mean? Mean for you with Cello Layer 2, gas fees will stay low and you can even pay for gas natively using ERC 20 tokens, sending crypto to phone numbers across wallets using social connect. But Cello is a community governed protocol. This means that Cello needs you to weigh in and make your voice heard. Join the conversation in the Cello forums, follow Cello on Twitter and visit cello.org to shape the future of Ethereum. 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 Web 3 gaming hub.

• 28:36David Hoffman?

  Explore the ecosystem at portal.arbitrum.io. Are you looking to permissionlessly launch your own Arbitrum Orbit chain? Arbitrum Orbit allows anyone to utilize Arbitrum's secure scaling technology to build your own Orbit chain, giving you access to interoperable, customizable permissions with dedicated throughput. Whether you're 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 Web 3 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.

• 29:12Ryan Sean Adams?

  All right, David, you ready to talk about investing in crypto narratives? I hate use, like, I don't know if I should even use the word investing. It's more like speculating or something else.

• 29:23David Hoffman?

  Well, I think that's probably one of the warnings you're about to give us. People think they're investing when they should be very aware that they are speculating.

• 29:30Ryan Sean Adams?

  Yeah, and that can be very difficult to sort of confuse. I guess our model for this and our framework for this is there are three ways to make money in crypto. One of the ways is you be, you become a trader. So you're looking at prices, you're looking at charts, TA, you're very obsessed. Your time horizon is daily or weekly or sometimes like hourly, right? Things can change a lot to make a trade real. That's the first type. Second, you can be a narrative trader, narrative investor, narrative speculator, let's call it. And this is the recognition that crypto, at least in the short run. So we're talking about a time horizon of not days, but maybe weeks and months. Is very much an attention economy. Fundamentals don't really matter for narrative investors.

• 30:12Ryan Sean Adams?

  That's a second legitimate way to do well and make money in crypto. And the third is more where bankless skews, the fundamentals investor. It's where you sort of forget the noise. You denominate in crypto money assets like Bitcoin, like Ether. You buy the assets with fundamentals. You try every single cycle, like four year cycles, to increase the amount of Bitcoin and ETH that you hold. And you measure this in terms of years and like even decades. By the way, that third category, basically everyone I know who has been maximally successful in crypto has at least been in part a fundamentals investor. Though some have dabbled with narrative investing. There are very few traders, I think, that actually make money. So that's, that's the framework, I think, coming into this thing.

• 30:57David Hoffman?

  I will say traders definitely can make money, but they take their profits and they become an investor. So like the tiers you are in the pyramid can also kind of represent your portfolio. So like, you know, 10% trade, you know, don't mess too much with that, you know? 20 to 30% narrative speculate over a longer term cycle. And then the rest, you just set and forget and don't touch. And that's your Bitcoin, your ETH, your monies.

• 31:21Ryan Sean Adams?

  I know that's very much been your strategy, right? And has previously been my strategy in previous cycles. I think this cycle, I'm being a little less active on the narrative investing side. I'm just kind of letting it rise because like, I'm tired, dude. I'm like tired.

• 31:35David Hoffman?

  So you're going down the pyramid towards the fundamentals? Because that's good, because I'm going up the pyramid towards the narratives.

• 31:40Ryan Sean Adams?

  Well, basically, right? But like, I know your strategy is, is pretty much what you've, you've said, which is your fundamentals investing with like the bulk of your, your stack, let's call it. I don't know if that's 80% for you or something like that. But you know, the other, you know, 20, 15 to 20%, you're, you're, you're not afraid to put on some narrative trades. And indeed you do.

• 31:58David Hoffman?

  Play the game.

• 31:59Ryan Sean Adams?

  It's fine. Why not, why not ride the cycles out? So I guess I will say before we get in, for, for many narrative investing is going to be an optional side quest, right? So like, I don't do very much of it. David does a little bit more. It's kind of like, you don't have to do it to go on your bankless journey to do well in crypto. But you can, and I do want to caveat this by saying it's also kind of dangerous. Because, as we said, narrative investing is a type of speculation. You're speculating on what's going to receive the most attention in crypto. And like, I will say, many of you listening to this probably shouldn't be doing it. Okay, because probably the limiting factor for you is you don't have time. You don't have time to keep up with all of these narratives, right? You have to be on the game.

• 32:42Ryan Sean Adams?

  You need to listen to every single Bankless podcast, okay? Like, you need to, like, consume Twitter, like, it's a fire hose into your mouth. You need to be in, like, more niche corners of the internet than Bankless. Yeah, Bankless will sound boomer to you. We can't cover the long tail of narratives, like, that's not what we do. 100%. And the other caution I would give is, um, some of you who go down the narrative path will be tempted to overallocate. Like, you'll be addicted to it, because this is shorter-term time horizons. And I'm talking about, like, big risk, but also big return. Like, the truth is, narrative investing is the way you do a 20 to 100x in a cycle. You're not going to do a 20 to 100x on your Bitcoin and ETH stack. You're just not, okay? You might be able to do a 5 to 10x in 5 to 10 years, okay?

• 33:25Ryan Sean Adams?

  But like, when we're talking about massive returns, that's why people are so attracted to this, but they can become addicted. So, those are the caveats that I would say, uh, as we get into this. But now, let's get into it. And I think the first rule to understand about narrative investing is you basically, you take all the fundamentals you learned, and you just kind of set them aside. Because for narrative investing, fundamentals really have no place. So, David, when you were talking about Filecoin, R Weave, and Render, and what else did you mention? Bitensor? Yeah, Bitensor, but there's like 10 others I could have mentioned. It doesn't even matter if they're actually used by AI at this point in time. Because it's not about that. It's about attention, it's about the story. Can you get eyeballs on it?

• 34:10Ryan Sean Adams?

  Can you get people thinking that this is a part of an asset that captures some part of this? So, you have to think completely different. Again, with this, uh, you know, segment of your portfolio, you can't think from a fundamentals perspective. And, um, I ran across this fantastic article by a guy by the name of Victor, who actually puts out a Substack called Crypto Natives. And he titled the post, "How to Catch a Few 20 to 100 X Coins During the Next Bull Run." And what I love about this post, David, because I think you'll resonate with a lot of the lessons that he mentions, is this is lessons from 2021. Because every single cycle plays out in a similar way from a narrative investing perspective,

• 34:55Ryan Sean Adams?

  right? Like, the 2021 bull run had a set of narratives that were incredibly lucrative, incredibly attractive, like 20 to 100 Xers. And this cycle will as well. And so, like, history doesn't repeat, but it rhymes. So I think one useful exercise for us to do is to go look at 2021 and see what actually worked there, and like, go down memory lane, and then see what we can draw out, some of the lessons we might be able to draw out for 2024. So, you ready to do that?

• 35:25David Hoffman?

  Yeah, let's do it. It is worth noting that every cycle rhymes, but does not repeat. And so, we are making just pattern identification of 2024 and 2025.

• 35:35Ryan Sean Adams?

  Hundred percent. So this will be different in ways that we just can't anticipate at this point in time.

• 35:39David Hoffman?

  AI themed, it'll be AI themed.

• 35:41Ryan Sean Adams?

  Yeah, well, that will probably be a narrative. And maybe we'll end with like, that narrative and some other narratives that you predict. But, okay, here's what happened last time. The first thing that happened in 2021 narrative investing market is that shiny new coins outperformed old coins, okay? Shiny new coins outperform, old coins underperformed. Example, Ripple, Stellar, Bitcoin Cash, Neo, Iota, EOS, Dash, you remember these coins? They never, even Tron, never reached their previous all-time highs in dollars. They never have reached it. And they've been down only versus something like Bitcoin or an Ether since 2018. Take a look at this. You know what this is, David?

• 36:24David Hoffman?

  This is a very, this is my childhood in crypto. This is what the coin market cap looks like back when I was getting into crypto. Wow, when Dash was number eight. No one knows what Dash is anymore.

• 36:36Ryan Sean Adams?

  This is the coin market cap from 2017. Yeah, so you mentioned it from your first cycle. Look at these coins. What else pops out at you?

• 36:45David Hoffman?

  EO Stellar Neo, Neo, the Ethereum of China. Qatum, it is a Ethereum smart contracting layer over a Bitcoin UTXO model. Makes no sense.

• 36:55Ryan Sean Adams?

  I did not even know that.

• 36:56David Hoffman?

  Whatsoever.

• 36:58Ryan Sean Adams?

  Right under that is Bitconnect. Do you remember Bitconnect?

• 37:00David Hoffman?

  Yeah, Bitconnect, the actual Ponzi scheme that lasted way too long.

• 37:04Ryan Sean Adams?

  Now, you talk about a narrative, number 11, Bitcoin Gold. Do you remember all these weird Bitcoin forks?

• 37:09David Hoffman?

  Yeah, there's a lot of Bitcoin forks, yep.

• 37:11Ryan Sean Adams?

  It's number 11 in the crypto market cap. So there's some durable things like Bitcoin, Ethereum, but number three is Bitcoin Cash. Where's Bitcoin Cash now? Where is XRP now?

• 37:20David Hoffman?

  If it's on the top 100, yeah. XRP's still around. It's not at four, it's still in the top 20.

• 37:26Ryan Sean Adams?

  But again, back to it, it hasn't actually outperformed Ether. It's never gone back to kind of all-time highs since 2018.

• 37:34David Hoffman?

  Other than Bitcoin and Ether, the only exception to this rule has been Dogecoin, which is also one of the big narratives of the cycle, which is meme coins.

• 37:42Ryan Sean Adams?

  Yes, yes. Okay, so old coins will underperform shiny new coins are probably the ones to look at from a narrative investing perspective. You don't want to go with the old dogs. The second lesson from Victor's post is also great. Most coins underperformed Bitcoin before the bull run really starts. That's where we are now. This is still a Bitcoin-owned bull run, okay? As expected, this is how it plays out. That tells you that the actual bull run for this narrative investing shenanigans that's about to happen has not started yet. It hasn't really started.

• 38:19David Hoffman?

  The whole flows of money, of capital of dollars into the Bitcoin ETF to me is just like the rocket being loaded up with fuel. It is the hydraulic pump that is just getting primed to as soon as Bitcoin calms down, as soon as flows equilibriate, all of the BTC holders who are just extremely wealthy and ETH is following right along Bitcoin and honestly, so is Solana too. A lot of the blue chips, the top five assets are up bigly. As soon as this main big move, the start of the bull market takes a breather, that hydraulic pump is going to just ram market cap down the stack. And so people are going down to like the 200 chart, the 300 level charts on the CoinGecko

• 39:04David Hoffman?

  and looking at like, what are some of the most degenerates I can make right now? If Bitcoin grows 10%, some tiny little shitcoin is going to go 1,000x. And this is just, and we have never seen Bitcoin being primed this hard ever before because of the Bitcoin ETF. It's absolutely an insane alignment of stars.

• 39:24Ryan Sean Adams?

  Yeah, and people will point out over the last, hey, but over the last six months, there have been pockets of narrative investments that have outperformed Bitcoin. And yes, absolutely, that is true. It has already started in small ways, but I just, we ain't seen nothing yet, okay? Right now, this is still Bitcoin's ride. We haven't seen the true kind of like narrative investing degeneracy that we're about to see. So that's the second point. The third point, and this is incredibly important, is how fast it happens. Time, we're in the bull market now, guys. Time is about to speed up. It already has sped up and it's going to go warp speed. Most of the gains for these types of narrative investments are concentrated in a period of a few months' time, okay?

• 40:07Ryan Sean Adams?

  During the last bull market, for example, January to May, August to November 2021, these were the periods of time where it just felt like easy mode, up only, nothing could go down. There's this famous GCR tweet that Victor mentioned in his blog post that says this, "You should be sacrificing..." This was the peak, you know, 2021, October 2nd, 2021. You should be sacrificing your weekends to give everything you have, harvesting all possible yield out of this market. Oh, you're 22 and you want to have fun with your friends? You will never have such easy opportunities for generational wealth, even if you live another 80 years. At that point in time, it was kind of true-ish that like, okay,

• 40:46Ryan Sean Adams?

  look at this. BNB, 8X in 20 days. February 2021, in 20 days, it ate X. That's the Binance coin that had a narrative season. Sushi, 6X in one month. Ave, 6X in one month. This kind of tells you that like, it can be absolutely explosive and you want to get in on the front end of these types of narrative trades and not the back end because it can shoot up in a hurry and get away from you.

• 41:13David Hoffman?

  I think this also just shows that these things are not investable. They are speculatable. Like you do not find like, you don't go sifting for like this AI gem and then plan on being a long-term holder of that AI gem. That is going to be a two, maybe nine-month-long thing. And even nine months is long. It's just you are waiting for, hopefully to strike gold, hopefully for that thing to pump. But as soon as it does, you are not going to, you do not believe more in that thing. You cash out, right? Like it doesn't, it's not a long-term process.

• 41:49Ryan Sean Adams?

  And that's true, by the way. That's true, by the way. Even if the thing that you're investing in has fundamentals, buying fundamentals, like Filecoin has fundamentals, okay? But it doesn't have $100 billion worth of fundamentals.

• 42:00David Hoffman?

  Right.

• 42:00Ryan Sean Adams?

  It's not worth that much, probably. And so like that, that's even true with things that have some sliver of fundamentals underneath them. The last point here is, don't let the bear market PTSD rob you of the insane gains. What Victor is commenting on here is, you have to change your orientation. Some of you might still be, if you're doing this, narrative investing, some of you still might be holding on to the PTSD of the bear market, where like every pump, you just got like, oh, I don't believe that. That's not real. You know, it's going to go back down. And in the bear market, that's the behavior you're rewarded for, right? You're rewarded for pessimism. Not in the bull market.

• 42:39Ryan Sean Adams?

  Momentum has shift shifted completely. You gotta get out of that mindset like things are just going to go up and they're going to get go up in a hurry. So don't let that PTSD from the bear market like stop you if if this is what you're you're trying to do. So those are the the four lessons that we learned, I think, from 2021 that are probably still valid going into 2024.

• 43:01David Hoffman?

  I think it's also worth noting that it becomes increasingly hard to remind yourselves that you need to be sober. When froth is happening like left and right, when we go, if you go right now, the day of recording, March 4th, if you go look at the top movers in the last seven days, it's Bonk, Doge, Pepe, Dogwhiffhat, like all of the meme coins, right?

• 43:26David Hoffman?

  This, the bull market, I remember one of the biggest mistakes I made last bull market was thinking that the bull market was going to last longer than it did. It did get cut short, like the whole interest rate phenomenon thing happened. But I kind of considered the bull market starting in 2021, not when it actually started, which was like May in 2020, when DeFi summer was a thing. The biggest thing to remember is as the total crypto market cap goes up to where it is right now at 2.5 billion, maybe it tops out around 10 billion, a little bit more. Everyone is sitting on a mountain of paper gains and this is when the game of chicken continues, goes on. Everyone, if everyone has paper gains and no one has sold, whoever sells first gets to make out like a bandit and they get to leave everyone else with the bag.

• 44:09David Hoffman?

  And if buying turns into selling, all of those paper gains collapse down to just like normal app parity, like one to one, like no gains for everyone. And you want to have to have sold before that happens.

• 44:22Ryan Sean Adams?

  And and you can't trust yourself to call the top and you can't trust yourself to know in the moment whether like to sell or not. You can't trust your instincts and psychology. So if you do this, my recommendation to you is have a sell plan going in, right? What do you do if it five X's? What do you do if it 10 X's? What do you do if it, you know, 50 X's? Have a plan at all of those various points.

• 44:42David Hoffman?

  You want to know what the the common denominator is between Sam Bankman Fried, Three Eros Capital and Alex Mashinsky at Celsius?

• 44:50Ryan Sean Adams?

  Oh, wow. That's a cast of characters. What?

• 44:52David Hoffman?

  The common denominator is as, as the bull market went on, they took on more leverage, not less. They took on more exposure, not less. Both Sam Bankman-Fried and 3O's Capital started with a risk-adjusted basis trade, which is basically the least risky thing you could do. They started the bull market with that, and then they both ended with massive amounts of leverage. I'm pretty sure this is the same for Alex Wachinski as well. As we all are gonna get drunk in the next six months, some of us already are, you are going to want to have more exposure because you're going to FOMO left and right. Actually, it's the time to get less exposure as the bull market goes on.

• 45:26Ryan Sean Adams?

  Yeah, I want to get, and like, maybe end this, some of this section with some of the top signals, David. But like, one quick recap. Do you know what, some of the main themes for the 2021 cycle, some of these were more real than others, right? The first one was DeFi. Remember DeFi summer, DeFi 1.0? That was some reality being priced back in, and then it went absolutely crazy. But look at this, AVE and Synthetix, from bottom to top, the gains in AVE and Synthetix were 500X and 1,000X. Absolutely incredible. And then we had this alt-layer-one season, which was another narrative trade last cycle. So that's where you saw like, Solun, what was it?

• 46:05David Hoffman?

  Soluna AAVAX?

• 46:06Ryan Sean Adams?

  Yeah. And Phantom, and BNB again, all of these things. And then you had a alt-layer-one ecosystem playbook. So BNB's pumping, so Cake, which is an app on top of BNB, should pump too.

• 46:20David Hoffman?

  It's the uniswap of BNB.

• 46:21Ryan Sean Adams?

  Exactly. And then we had briefly a Metaverse pump. Do you remember this? So Facebook's rebranding to the Metaverse, and so Sand and Mana and Gala went absolutely crazy. And then in the background, you had Axie Infinity going nuts. And then, of course, the, like, you know, the true narrative trade throughout all of this was the meme coins, Shib, and the Doggy Coins, you know, Elon, all of these things. We had NFTs as well. These were some of the, the main narratives from, from last cycle. It might be helpful as we try to like, predict the, the narratives for this cycle. But a few of the, the top signals that I felt like were right on that he points out too, as you'll resonate with this, main character and the worship of some crypto figures.

• 47:06David Hoffman?

  Oh, deifying wealth, whoever makes a lot of wealth.

• 47:10Ryan Sean Adams?

  Yes, so let's name some of them. Sam Bankman-Fried.

• 47:14David Hoffman?

  Right.

• 47:14Ryan Sean Adams?

  CZ, Suzu, Elon Musk, Do Kwon, Richard Hart,

• 47:19David Hoffman?

  Yeah.

• 47:20Ryan Sean Adams?

  Andre Cronier, Danny Sesta.

• 47:23David Hoffman?

  Andre Cronier is a great guy. He got, he got deified by a bunch of D gens. It gets, we get animal spirits left and right.

• 47:31Ryan Sean Adams?

  Yep, some of these are great guys. Some of them are not so great guys. And that's one thing to look out for. If you're looking for top signals, look for the deification of some of these main, main chartered archetypes.

• 47:43David Hoffman?

  Can we paint out who we got in a fight with last cycle? SPF, Suzu, Do Kwon, Richard Hart, and Danny Sesta.

• 47:51Ryan Sean Adams?

  Yes, we did. We didn't get in a fight with Elon Musk, I'll point out, which is somebody else on the list.

• 47:56David Hoffman?

  I don't know if Elon Musk deserved to be there, but whatever.

• 47:58Ryan Sean Adams?

  So, so that's one top signal, right, is the deification of main characters. Another top signal is closely related is this cult. You'll feel like this cult type vibe of some kind of like a cult Ponzi, which, you know, you can't say anything disparaging about their bags. You can't like rationally argue with them. Do you remember the peak for this was when we had a debate? The, the podcast was entitled, "Is Luna a ticking time bomb? Is Terra Luna a ticking time bomb?" And of course, this was six weeks before it absolutely blew up. And we had a bull for Luna and we had a bear. And that post, that episode got absolutely attacked on all social media that we've seen. You should see, the YouTube comments, Bankman's listener.

• 48:38David Hoffman?

  The comments are so gross.

• 48:39Ryan Sean Adams?

  Yeah, and the lunatics.

• 48:41David Hoffman?

  Right.

• 48:42Ryan Sean Adams?

  Basically, we got lunatic swarmed, lunatic attacked, and then I remember you and I looking at this.

• 48:46David Hoffman?

  Whenever the Terra Luna bear would speak, the comments would just get wild about, "This guy's making no sense. He's so unconfident." And they were really bolstering up the bull because he was pumping their bags and they were just taking down the bear.

• 48:59Ryan Sean Adams?

  If you see a cult with a Ponzi, with a group of followers, hit that sell button. Okay, because it means bad things are ahead. You might be able to ride it for a little bit, but like eventually, bad things are ahead. Without fail, every community that has had this type of vibe has completely collapsed.

• 49:14David Hoffman?

  The louder that the cult gets, the stronger the sell signal.

• 49:18Ryan Sean Adams?

  Danny Sesta's ecosystem was exactly this way. Richard Hart with Hex, right? Even Olympus Dow had like vibes of this. The other thing to maybe look for, like the last top signal is, oh, when we start to get this kind of shit, David? FTX Arena?

• 49:33Ryan Sean Adams?

  For the FTX arena?

• 49:34David Hoffman?

  Buying arenas, yeah.

• 49:36Ryan Sean Adams?

  Yeah, so Vegas Sphere, I know you've mentioned this before. If the Vegas Sphere starts to have a crypto project on it or token, like, sell, top signal.

• 49:44David Hoffman?

  Maybe wait like two days and then sell.

• 49:48Ryan Sean Adams?

  Okay, so that's narrative investing. We've just scratched the surface of it. I'm curious as we end this episode. So we started this episode talking about the AI narrative, AI meme coins, AI tokens. There's some substance there. There's a lot of narrative memetic energy. It's definitely a narrative investment or narrative trade. Besides that, what do you think? You promised us three. David's prediction for big crypto narratives on the level of like the metaverse or like NFTs this cycle. What are the other two?

• 50:21David Hoffman?

  Yeah, so number one, obviously crypto and AI. That's like what this whole first half of this episode was. A very distant second, because I really want to emphasize how strong I think the crypto AI just meta is about to be. A very distant second, but also extremely strong is the Bitcoin Renaissance. This is the Bitcoin Layer Two mania and also tokens on the Bitcoin Layer One, both inscriptions and Bitcoin's equivalent of an ERC 20 token, which is not, by the way, a BRC 20 token. That's something that's coming soon. We're going to talk to Casey Rodmer about that. Tokens on the Bitcoin Layer One, NFTs on the Bitcoin Layer One, and also Bitcoin Layer Twos. Bitcoin's getting Layer Twos. And one of the reasons why I think this is so powerful is related a function of the

• 51:05David Hoffman?

  money-ness of BTC, the asset. There is three times as much money as there is in Bitcoin as there is in Ethereum. And look at how much speculation and NFT activity there is on the Ethereum chain. Multiply that by three, because that's how much more money there is in Bitcoin. I mean, then take some premium away because like the Layer Twos on Bitcoin are strictly inferior to Layer Twos on Ethereum, just on a technical capacity, but. Nonetheless, if there's a lot of money in the ecosystem, there will be a lot of speculation. We've seen NFT projects, ordinal projects on Bitcoin, Mint, and then immediately POMPA 3X. And this is what happens when there's a lot of latent demand for speculation on any sort of chain that has a big stockpile of money, which is BTC the asset.

• 51:50David Hoffman?

  The Bitcoin Renaissance, I think, is going to be perhaps the second biggest narrative of this cycle.

• 51:55Ryan Sean Adams?

  Okay, AI tokens, Bitcoin Renaissance, what's number three?

• 51:59David Hoffman?

  Eigenlayer restaking, and it should come as no surprise to people who have been watching Bankless. The amount of capital that I think is going to be injected into the Ethereum space over the next like six to nine months as a result of Eigenlayer, both from LRTs becoming tokenized and AVSs becoming tokenized, and then AVSs spitting out yield is, I think, going to be massive. I think AVS is going to be kind of, do you remember yield farming? DeFi yield farming, food farms of the DeFi summer cycle of 2020? I think that's about to be repeated at the AVS layer around Eigenlayer. It's going to be extremely frothy. People, I think fundamentally, the Eigenlayer structure is sound, but human greed at a higher level, a leverage level on top of that,

• 52:44David Hoffman?

  will test how sound that that structure is. And so just the yield, I think, is going to also produce like a ton of capital injection and a lot of speculation.

• 52:54Ryan Sean Adams?

  Interesting timing as well at the time of recording. Eigenlayer today has just passed a billion in total locked value, or 10 billion, excuse me, which by the way was your prediction for 2024, and it happened two months in to 2024, right?

• 53:09David Hoffman?

  Gotta pump those numbers up.

• 53:10Ryan Sean Adams?

  Again, fast forward, like this is, like, the bull market is going to be exceedingly fast. And, you know, at some level, if you're, if you're hearing about the narrative and it's getting amplified in a big way, you might be a little late to that, to that particular narrative, right? So there's probably some other restaking types of opportunities out there, but at least a good portion of that has, has already leaked its way into, into the market, I would say.

• 53:37David Hoffman?

  I said this once before, but I'd really just want to emphasize this. The thing that will end the bull market is the magnitude of paper gains that people have. Right now, we're sitting on a lot of paper gains because as a crypto industry, Everyone inside of crypto who are crypto believers that were sidelined have bought, and that put Bitcoin up from 20K up to where it was at 45K. It took ETH from like 1,000 up to $2,500. It took Solana from $10 to like $120. That was internal capital. We have not yet seen external capital, except with Bitcoin. We have not yet seen external capital. Retail is just now coming back into the market as of the last two weeks.

• 54:19David Hoffman?

  Coinbase is just now, as an app, rising in the ranks of downloads per week or activities, users per week. Coinbase is now crashing. Retail is coming in as of this week because we are threatening all-time highs. So the first phase of the bull market is over. The first of the phase where all of sidelined capital buys. Now everyone is basically exposed because we are all expecting retail to come in. And the second phase of the bull market has started. This phase of the bull market will end when we are all sitting on too many paper gains and we all want to cash out because we made life-changing money. And so it doesn't matter how strong the fundamentals are. It doesn't matter like how cool these projects are. Eventually, once there's too much paper gains, the animal spirits will invert and buying

• 55:04David Hoffman?

  will turn into selling and selling will beget selling and the bull market will be over. Who knows when that is?

• 55:09Ryan Sean Adams?

  You know, who knows when it is? It's no mistake on the, on the weekly roll up every, every week, we talk about the total crypto market cap, right? And so we are now at 2.6 trillion. The last all-time high in total crypto market cap was about 2.9 and that was at the various, the very peak. So you could see that here, right? You see 2.9 in November of 2021. The cycle before that is 2018. That was in January, February 2018. The cycle high was not just under a trillion. It was 850 billion. Okay? So the big question, the thing to look at is how high will this go? I remember during more sober times, this was just like not, not less probably than two or three months ago, you and I actually predicted this.

• 55:53Ryan Sean Adams?

  I, I think that you said something, do you say 10 trillion, something like that?

• 55:57David Hoffman?

  Yeah, I think I said like 10 trillion. Yeah, I think that's right.

• 55:59Ryan Sean Adams?

  Yeah, and I was like, you know, 10 to 15 trillion, somewhere in that range, right? But is it going to be, is it going to be 6 on the very low side? Is it going to be 8 or is it going to be 20 trillion? We actually don't know, but the closer we get to those amounts, the more paper gains is kind of what you're saying on the books. And the more we get into, be careful, this market's getting exuberant territory.

• 56:21David Hoffman?

  Right, 100%. I remember in 2017, in my crypto chat group with all my friends, I think the crypto market cap passed $850 billion. And I sent out the question, how long? Well, this was like November of 2017. How long, guys, question to you? How long after we cross $1 trillion will it take us to cross $2 trillion? And I remember said, I said, we're going to cross it in January, $1 trillion, and then we're going to cross $2 trillion in May. We never crossed $1 trillion.

• 56:51Ryan Sean Adams?

  That was first cycle, David. First cycle, David, okay, guys? We will end it there, of course. These side quests around narrative investing, purely optional, if you just want to block out the noise and just, you know, stack some ether, stack some bitcoin, I totally understand. I got to end with this, of course, you know crypto is risky. You could lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.