SotN#9 (PART 1) - PROPAGATING (WTF ARE YAMS, DEX VOLUME INSANE)

STATE OF THE NATION #9 (Part 1) - Tuesday, August 12, 2020 Watch on the Bankless YouTube Channel https://www.youtube.com/c/bankless The State of the Bankless Nation is.... PROPAGATING! The bankless boys discuss why. This is Part 1 of SOTN this week. Stay tuned for Part 2 with Vitalik tomorrow. ----- GO BANKLESS WITH THESE SPONSOR TOOLS: ⚔️ GODS UNCHAINED - TRADING CARD GAME https://bankless.cc/godsunchained - you own the cards - start a free account, play and trade https://godsunchained.com/! 🧙‍♀️ POLYMARKET - BET ON CRYPTO https://bankless.cc/polymarket - bet your beliefs! - use it to bet on DeFi outcomes https://bankless.substack.com/p/how-to-bet-on-defi-with-polymarket! 🌈 AAVE - LEND & BORROW YOUR CRYPTO W/O A BANK https://bankless.cc/aave - earn some interest! 💸 AMPLFORTH - MONETARY EXPERIMENT FOR BASE MONEY https://bankless.cc/AMPL-MINE - learn about this experiment! ----- Covered: WTF ARE YAMS DEX VOLUME INSANE PART 2: (COMING TOMORROW - ETH SUPPLY GATE) Special guest Vitalik Buterin We show: Post introducing YAMS https://medium.com/@yamfinance/yam-finance-d0ad577250c7 Active YAM farms https://yam.finance/farms YAM farm contracts https://twitter.com/devops199fan/status/1293264263486808064?s=20 AmpleForth Geyser https://www.ampleforth.org/dapps/ $34B annualized in Uniswap volume https://twitter.com/haydenzadams/status/1287878006694752257?s=20 Uniswap eating DeFi https://twitter.com/masonnystrom/status/1283151242735255561?s=20 --- Episode Actions: Catch tomorrows episode with Vitalik on ETH Supply Watch what's going on with YAM contracts https://twitter.com/devops199fan/status/1293264263486808064?s=20 Check out DEX stats https://explore.duneanalytics.com/dashboard/dex-metrics Also...subscribe to Bankless YouTube https://www.youtube.com/c/bankless to watch State of the Nation every Tuesday! ----- Don't stop at the show! Subscribe to the Bankless newsletter program http://bankless.substack.com/ Visit the official Bankless website for resources http://banklesshq.com/ Follow Bankless on Twitter https://twitter.com/BanklessHQ Follow Ryan on Twitter https://twitter.com/ryansadams Follow David on Twitter https://twitter.com/TrustlessState Follow DeFi Dad on Twitter https://twitter.com/DeFi_Dad ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time we may add links in this channel to products we use. We may receive commission if you make a purchase through one of these links. We'll always disclose when this is the case.

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

• 0:01Ryan Sean Adams?

  Hello everyone, welcome to State of the Nation, episode 9. David and I are super excited about the state of the nation today. We're going to talk about what's happening like we usually do, relate it to big picture stuff, drop some insights and action items. And right after we talk about our sponsors, going to mention a few other updates today, as well as the schedule. But David, why don't we start with our sponsors? You want to, you want to kick it off?

• 0:27David Hoffman?

  Yeah, yeah. So I was playing with one of our sponsors games last Friday and a little bit this weekend, God's Unchained. For those of you that played Magic the Gathering, for those of you that played Hearthstone, Yu-Gi-Oh, this is a game just like that. But instead, the cards that you own in the game are ERC 721 tokens on Ethereum. And so the big problem with Magic the Gathering was that it was physical. So you had to be across from a person with other physical cards to play them. So that kind of sucked. And then there's Hearthstone that came around, so you could play over to their computer. But then you never owned your actual cards, because Blizzard just owned them on a centralized database. What God's Unchained does is they have the best of both worlds, right? Where you own your

• 1:11David Hoffman?

  cards, because they're digital assets on Ethereum, but you can play on the online medium that the world is now turning to. So it's a really fantastic game, and with a really fantastic dev team that is kind of leading the charge with, when it comes to ERC 721 standards and also gas on Ethereum. Check them out at godsunchained.com, download the game. You can start without having to buy any tokens, without having to buy any cards. They give you the basic starter pack that you need to get started. It's a really elegant UI, really elegant whole experience. And it's just a ton of fun. I played it all weekend.

• 1:48Ryan Sean Adams?

  Absolutely. All right. So the second sponsor we want to tell you about is AVE. AVE is a long time favorite of the bankless community. So it is a lending and borrowing protocol at its core. So it's all DeFi, it's all bankless. What you can do is deposit an asset into AVE. You do that by going to ave.com. So an asset could be any ERC 20 Token like a die, for instance, or an eth. And what it will do is it will provide you a yield on top of that. So you're effectively lending your assets to the protocol. That's one side of the market. The other side of the market is where you actually borrow against the protocol. And the unique thing about Aave is they don't just offer variable rate loans. They offer fixed rate loans.

• 2:31Ryan Sean Adams?

  So with most DeFi protocol lendings, what happens is the interest rate could change on a day to day basis. With Aave, you can sort of lock in that interest if you're borrowing something from the account. So they are just crushing it in terms of popping up the DeFi leaderboard in terms of total value locked. So there's a lot more going on inside of that protocol. Also, they released Avanomics, which is super exciting. That is some token economics to their protocol. One of the big things, there's lots to highlight about it, but one of the big things is they're actually going to be putting a percentage of tokens, of reserve assets into sort of an insurance type of of protocol.

• 3:16Ryan Sean Adams?

  So if something happens to Aave in the future, that can be paid out. So that's going to be included in Avanomics. We will include some links where you can check out Avanomics and you can check out Aave. But if you're looking to get started and just try a small amount today, you can do that at ave.com, A A V E dot com. Check the show notes. David, what are we doing today, sir? You know, I didn't ask you how you're doing, but how are you doing?

• 3:41David Hoffman?

  I'm doing fantastic. We've released a just killer episode with Andre Cronier, who was the creator of the Y earn and the Yiffy Protocol Token. That just went out on the podcast stream on Monday. If you haven't listened to that, give that a listen. There was, there was some FUD going around from this decrypt article about how Andre is close to quitting. And then Andre also, also came out on Twitter saying that that article was not accurate. And so I feel like people really turned to, to listen to this episode to really get a glimpse as to what the hell that decrypt FUD article was even talking about, because it wasn't entirely wrong. Andre did say that he was like fed up and really tired with what he's been building, but he did not at all allude to how he is bailing or quitting.

• 4:25David Hoffman?

  So for more details, listen to the podcast.

• 4:28Ryan Sean Adams?

  Absolutely. It's a fantastic podcast. One of our most downloaded, actually.

• 4:32David Hoffman?

  Already.

• 4:32Ryan Sean Adams?

  First dates. So it's just crushing it and super interesting. It was called DENTS, I think, on Twitter. So, so take a look at it, maybe listen to it a couple of times if you need to. The other thing is Bankless Nation is growing like crazy. So we hit a really cool milestone yesterday, which is 10,000 subscribers to the newsletter, where it all started. So we just want to thank everyone for hanging with us and being a part of this, this community. It's just been really rewarding to see. And Bankless is not even a year old.

• 5:04David Hoffman?

  Right.

• 5:04Ryan Sean Adams?

  And we are population 10K right now.

• 5:07David Hoffman?

  10K, yeah. It's a big city.

• 5:09Ryan Sean Adams?

  Absolutely. So we're growing. We want to grow this into a metropolis and then eventually a full-size Bankless Nation, right?

• 5:18Ryan Sean Adams?

  David, we should talk about the ETHscape shirts as well. So what's the latest on those? We introduced those last state of the nation.

• 5:25David Hoffman?

  Yeah, yeah. So that ETHscape shirt, it's the, it's the rare apparel platform that we're kind of building out. And it's the first one, Season Zero, we're calling it. This is going to be a regular rolling out seasons of new awesome Scars merch. And what we did was we made 50 shirts and we also made 50 tokens. And if you want the shirt, you buy the token from Uniswap and you burn it and then you get the shirt sent to you. And so if somebody's already redeemed one, so their shirt is in the mail on, on the way. Looking forward to hopefully getting it, seeing a tweet come out on Twitter from some guy wearing the ETHscape shirt. And so we had this set up into two phases, right? So we had like this initial phase where the buying demand on Uniswap would, would suck up some of the

• 6:08David Hoffman?

  tokens. And then we would start to release the tokens as well. So like the, what we did is we supplied all tokens to Uniswap, every single one, you know, ETH, one ETH per token. And then the purchasing power would increase the price of the token. And then we would, in, we, the plan was to withdraw liquidity and sell as the price went up to keep that price dampened and shallow.

• 6:34David Hoffman?

  Until we ran out of tokens. And so the first phase of that happened. And then we realized that with Uniswap as a distribution method, it kind of runs up against a wall in that second phase. Right? And so the price, the price got too high and we couldn't sell them because people weren't pushing that, they weren't, um, there wasn't enough supply. And also, and then the demand wouldn't reach that certain threshold. And so there wasn't really a good way to like offload these. And so we're working with the balancer team to try out this new mechanism that they, that they've always discussed and all always like kind of promoted as a potential use case of a balancer pool. And it's basically a Dutch auction. And so what we're going to do is as we build out the system with balancer, we're not ready to do that yet. We're just kind of talking about our plans.

• 7:19David Hoffman?

  What we're going to do is we're going to withdraw the remaining liquidity from Uniswap and then put it all into a balancer pool. And so there's going to be like the remaining tokens that we have. It's gonna be like 40, 38 tokens, something in that ballpark. And we're going to supply them, all of them into balancer with a very low supply of either DAI or Ether or something. And then these supplies cross over time. And the, the price of the tokens will tick downwards at a rate over time and time and time. And so when prices will go down, and then there will be only so many shirts, only so many tokens that you can purchase. And as you purchase them, the supply runs out as the price lowers. And so the price will get closer to zero over time.

• 8:02David Hoffman?

  But before it gets to zero, it's likely that all the shirts will have been purchased because people will buy them for more than $0. And so at some point between where we initially set the parameters at, we're going to set it really high, something like $3,000 a shirt. And then it's going to trend towards $0 a shirt over time. And somewhere between those two ends, all the shirts will be bought. And it kind of does work like Uniswap. Like when you purchase a shirt, the price goes up, but the price will go up and then continue to tick back down over time until either all tokens are sold or the price is zero. And so this is just a much better way to distribute these things. Uniswap isn't really a distribution mechanism. This, this Dutch auction from the balancer system, I think is going to distribute these things because we don't, we don't want

• 8:46David Hoffman?

  these tokens, like we want you guys to have these tokens. And so this is a way for, for us to get, um, to get the tokens out into the ecosystem so that people can actually redeem these shirts. I don't want to just sit on a box of really awesome shirts for, for, for months on end. So that's the update with that.

• 9:02Ryan Sean Adams?

  Absolutely. That's gonna be super cool. I mean, so the summary is basically, um, phase one was successful. The, the market found a price for these shirts on Uniswap. It's still active. Now, phase two, we've sort of changed plans to move phase two to a Dutch auction type model, where all of the liquidity, um, is, is essentially off of our books and into, uh, into the market. Um, I think that'll be great. Very exciting. We don't have an ETA on that though, uh, but keep, stay tuned here, uh, for that and, uh, and you'll be first to know.

• 9:33David Hoffman?

  Yeah, there, there's a reason why we labeled this season zero, not season one. We're, we're, we're still trying this thing out.

• 9:40Ryan Sean Adams?

  Yeah, absolutely. Um, and the market is definitely having fun with, uh, figuring out what the price of these eavescape shirts are. I mean, they've, uh, they've moved quite high and now they're sort of back to mid, um, to your last I looked, it was like, you know, $700 or something for.

• 9:55David Hoffman?

  Got all the way up to $1800 and then, and then people started to, well, that's a lot.

• 9:59Ryan Sean Adams?

  Yeah, that is a lot. I, I love the shirts. I'm, I'm not sure I'd do $1800 for one shirt, of course. Um, all right. So, um, what else are we doing? So this state of the nation is going to be a little bit different, um, this week. So we're actually going to release this in two episodes. There's going to be a part one, which you are listening to right now. Um, and we've recorded a little bit, yeah, first, we're going to stitch these videos together. And then there's going to be a part two. The part two is actually going to be on ETH Supply with Vitalik. We think that that deserves its own dedicated episode. And we wanted to get this episode out to you today because we've got some super interesting, time-sensitive topics. One in particular that we're talking about, um, a little something called YAM,

• 10:43Ryan Sean Adams?

  which has kind of hit the, the bankless community. So that's what we're going to start with today. And that's how it's going to be divided. So expect two state of the nation episodes this week. It's a bonus week. This is just part one. Stay tuned for part two. I don't know, Wednesday, Thursday, sometime this week, we'll, we will release part two with Vitalik, where we are actually talking about the ETH Supply gate, as you call it, right, David?

• 11:05David Hoffman?

  Yeah. That's what, that's what Bitcoiners call it. That's what, that's what's going around in their circles.

• 11:10Ryan Sean Adams?

  Totally. Well, let me ask. The question, I guess we're gonna do this question twice. I'm not sure. Maybe, maybe there's just one state of the nation. But David, what is the state of the nation this week, sir? What's the, what are we using?

• 11:21David Hoffman?

  The state of the nation is propagating. Oh, it's such a perfect word. So bankless just hit 10K. Bankless Nation 10K large, fantastic. There's people flooding into the Discord. If you guys aren't in the Discord, join it. It's where a lot of the awesome conversation happens. Meanwhile, in DeFi, there's this new thing called YAM, which is the YAM farming revolution. It's a new, a new cycle of the season. So that, that has now propagated. The DeFi ecosystem, like the units, the first, first users of Uniswap, that number has gone through the roof. So user, Uniswap users are propagating. The texts about DeFi continue to flow in. Everything is propagating. Everything is propagating.

• 12:04Ryan Sean Adams?

  Yep. And we are recording this intro actually post YAM launch and we recorded the YAM section of this pre YAM launch. So it's just like an hour, an hour and a half before the, the launch of YAM. It has launched and you can, you know, find out more about it in real time. All right, David, we should get right to it then, sir.

• 12:24David Hoffman?

  Right. That's first, before we talk about YAMs, we got to get into our second round of the sponsors and then it'll be clear skies after that.

• 12:31Ryan Sean Adams?

  Awesome. All right, David, let's take a minute to talk about two more of our fantastic sponsors. The first is Polymarket. Polymarket is a prediction market with a very simple and understandable user experience. You can use it to express an opinion as to the likelihood of future events. We've written a tactic about this. We will include it in the show notes. It is fantastic to use. You can, you can bet on future events using ETH. You can bet on it using DAI. It's very much like a wisdom of the crowd sort of phenomenon. So you can go there not to gamble, but also to gain a glimpse into what the market's actually predicting about things.

• 13:14Ryan Sean Adams?

  Things like the total locked value in DeFi, things like coronavirus metrics, things like the, the US.

• 13:22Ryan Sean Adams?

  Government and election outcomes, all sorts of things. Go to poly dot market and check out the markets that are available. You could tweet about it and tag poly dot market when you do. And if you do that, you can email hello at poly dot market with bankless as the subject line, and they will cover all of your gas fees. So make sure if you're using poly market, email hello at poly dot market with bankless in the subject line. They will cover your gas fees, which are not insubstantial at this point in time. So check it out. Check the show notes out and get into the prediction market landscape.

• 14:04David Hoffman?

  All right, our second sponsor is Ample4th. Ample4th is a pretty interesting experiment going on in Ethereum right now. Ample4th is a base money asset, right? So it's trying to be an M zero, and it has this clever little mechanism built into it. So it tracks $20.19, and but it's not a stablecoin. And so it has this very interesting mechanism where as the price of Ample4th goes up and down, it will rebase. And so if the price is above a dollar, it will rebase by minting everyone new Ample's to bring that price down. And if it's below a dollar, it will do the opposite, and it'll burn Ample's from people's wallets to bring that price back up, right? And so it has similar values to Bitcoin in that it's non-dilutive.

• 14:47David Hoffman?

  And so if you own 1% of Ample4th tokens, you will always own 1% of all Ample4th tokens, no matter how many there are, no matter how many, no matter what the rebases do. And it's meant to be a non-correlative asset to crypto, right? It's supposed to be collateral for DeFi that doesn't act like the rest of the collateral for DeFi. So you can check them out at ample4th.org. You can take part in the Ample4th liquidity mining by going to geyser dot ample4th dot org and submitting Ample and ETH to the Uniswap pool to get a little bit of extra rewards.

• 15:21David Hoffman?

  Speaking of Ample4th and this crazy rebased mechanism that drives this thing, we are going to talk about something brand new to the crypto space as of today and I'm going to share my screen here. And it's called yams.

• 15:36Ryan Sean Adams?

  Wait, wait, wait, wait, wait, yams. So like yams as in like the vegetable yam?

• 15:41David Hoffman?

  Yams as in the vegetable, apparently.

• 15:43Ryan Sean Adams?

  Okay. And apparently there's an emoji for yams. I didn't realize that.

• 15:46David Hoffman?

  I did not know.

• 15:47Ryan Sean Adams?

  I knew there was a zucchini.

• 15:48David Hoffman?

  Yeah.

• 15:50Ryan Sean Adams?

  But we have an emoji for yams.

• 15:52David Hoffman?

  Yeah, so yam is this thing, it got released today. Actually, this, this post went out 10 a.m. August 11th, which for me, that was an hour and 10 minutes ago. And so some people have been teasing this a little bit, a little bit earlier, which is why we know to cover it, but I've just been reading it and I want to share it now. I'm calling it yample because it's very much Ample4th, but it's, it's an experiment in fair farming, governance and elasticity. And so take ample and take the Y fee, the Y fee, the yearn distribution mechanism and combine them together. And that's more or less what you get with yam.

• 16:28Ryan Sean Adams?

  All right, hold on for a second. So you said, take ample. I, I hope people were paying attention when you were talking about Ample4th as a, as kind of a sponsor for Bankless. And you had this great meet the nation where you actually interviewed one of the co-founders of Ample and went in depth on what Ample is. But should we maybe start, David, with a recap of what Ample actually is?

• 16:49David Hoffman?

  Yeah.

• 16:50Ryan Sean Adams?

  If people missed what you just said in the sponsorship slot.

• 16:52David Hoffman?

  Sponsor, the sponsor slot. Yeah. Yeah. So, so Ample4th goes up and down in price as all tokens do, right? Because when there is a specific number of units out there for a given period, that unit doesn't go, is it, there isn't any more or less of that, that unit for that one time period. So like Bitcoin or like other assets, the price fluctuates. The only thing that Ample4th does differently is that it tracks using an oracle. It tracks the price of the Ample4th token on secondary markets like Uniswap. And then it rebases, which means it adds more to the supply or removes from the supply an appropriate amount to keep that price roughly targeting dollars. So it's not, it's not a stablecoin.

• 17:35David Hoffman?

  It's just as volatile as Bitcoin, but the unit of account they like tracks a dollar over time. And so the Yam token does that too, but it also does some other things as well. Right? And so

• 17:48Ryan Sean Adams?

  Okay. Real quick though, why is that useful, David? So obviously it's really exciting when like we have tokens that are scarce supply because it creates sort of a scarcity game. I don't almost call this, people hate the word Ponzi, right? But so like there's Ponzi schemes that are ripping you off and then there's transparent Ponzi's which are like games. And I would say Bitcoin is like a transparent Ponzi game. Everyone's Bitcoiners in their hearts would admit this too. Everyone is trying to collect their portion of the 21 million Bitcoins. That's the game, right? So this is like a game. It's a scarcity game, but the difference, one difference at least, it doesn't have Bitcoin's longevity. Doesn't have all sorts of things, doesn't have its own blockchain. It's all based on Ethereum.

• 18:30Ryan Sean Adams?

  But one of the key differences as well is this, it's trying to rebase itself as close as possible to a dollar every day. Why is that even useful?

• 18:41David Hoffman?

  Yeah, so the jury is kind of actually still out on why this is useful. My answer for this is that it acts as trustless collateral for DeFi, that you are going to be comfortable paying back in the future, like no matter what. Right? So like the market cap of ample fourth could go from something really, really small to really, really big. But if you owe 10 ample fourth tokens and 10 amples, like you're only going to be paying back $10 plus or minus a couple of percentage fluctuation. You're going, doesn't matter what the, the market cap of the network did. You always will pay back roughly the same purchasing power in order to pay back your debts. And so it's a trustless way to denominate debts over the long term.

• 19:23David Hoffman?

  And so this really differentiates itself from DAI or a stablecoin, especially USDC because it's relatively trusted. And then DAI as people criticize DAI more and more and more for Onboarding centralized assets, ample fourth gets more and more relevant because it's there's no die isn't an M zero dies and M one, which means it's created by collateral. Ample fourth is itself collateral. That's the.

• 19:46Ryan Sean Adams?

  Yeah, right. Exactly. And some people would say it's it's not a good M M zero at all. And I would totally agree. What makes it M zero good is is basically liquidity. The most saleable asset is what makes an M zero good. But there is something to what you said, I think. Again, this is a totally an experiment, but when people define even economists define. What money is, they usually look at three attributes, but there's actually four attributes. So they always talk about store value, medium of exchange and unit of account. But other economists add a fourth, and that's unit of deferred settlement, unit of deferred settlement. So that's like unit of account, but unit of account specific to loans, right?

• 20:27Ryan Sean Adams?

  And the reason the US dollar reigns supreme, basically as the world's reserve currency is because most debt, most loans are denominated in US dollars. So this fourth attribute, unit of deferred settlement is actually pretty important. That's the experiment. It seems like ample fourth is iterating on, but a lot of people, David, don't like ample fourth. And I think when you boil it all down, it kind of is because of one thing. It's not that they don't appreciate, like, understand the mechanism of it. I think at least the the smart folks that I've talked to, it's that they don't like the initial distribution of ample fourth.

• 21:05Ryan Sean Adams?

  A large portion of amps were distributed to investors to kind of fund the team, fund the original idea, right? And that's the aspect that folks don't like. It's not as organic. VCs are actually involved. The team has bags, quote unquote. And a lot of people, when when you boil it all down, seem to be up in arms about that specific aspect of it. Would you agree?

• 21:29David Hoffman?

  Yeah, they're distrustful of peoples whose incentive is to shield their back. And Ample4th is kind of caught in this rock and a hard place where the project is about the token. Where like things like Ave or Compound or Maker, they're not centered around the token. They're centered around a product or service, whereas Ample4th is centered around this token, which kind of puts the team in this hard, difficult spot of like, yeah, we're trying to grow our product and service and our product and service is this token. So that's difficult.

• 22:00Ryan Sean Adams?

  Yeah, so I know I derailed you, David, but I wanted to get that out there. So tell us what YAMs are.

• 22:06David Hoffman?

  Yeah, no, it's good context. Yeah, so YAMs are something similar and also something completely different, right? So you can kind of think this as a competitor to Ample4th, but you would also be missing a very large component of what makes YAMs work. And also, Ample4th strictly has in its values that it's a trustless governance minimized system. And YAMs are not that. They are welcoming governance and that's a very key differentiator because trustless M zeros need to be without governance. And this has something else, this has a governance function and something else as well that Ample4th doesn't have.

• 22:47Ryan Sean Adams?

  But first of all, the thing they did first is, as I understand it, and again, we're just like kind of learning about this now because it's totally fresh. The first thing they did was they forked Ample4th.

• 22:57David Hoffman?

  Right.

• 22:57Ryan Sean Adams?

  So this is a fork of Ample4th, is it not?

• 23:01David Hoffman?

  Maybe fork is the wrong, forking means that you're taking that code and then you're changing it and then you're redeploying it. What they're really doing is they're taking the code of Ample4th and they're taking the code of Compound's governance mechanism. And they're taking the, not the code, but like the pattern of YFI YFI distribution. And they're combining that all into one thing, right? And so it's taking a bunch of different features and combining it into this one project.

• 23:30Ryan Sean Adams?

  So they're not forking the code per se. They're more like forking the meme, right? They're more forking the issuance policy and the entire. Idea here, right?

• 23:40David Hoffman?

  Right. Yes, we're forking ideas more than we are code.

• 23:43Ryan Sean Adams?

  Interesting.

• 23:44David Hoffman?

  The ample forth code might be an actual fork, but again, if you compare this ample forth, you're missing, you're missing out on what this really is. Okay, so the YAM token, very much like ample forth, tracks a dollar, right? So that that's the same. That's, that's very, very much the same. There's a governable treasury for, for promoting the YAM system, right? And that's very, very different. There's a treasury of funds that aren't denominated in YAMs that is governed by the YAM token holders, very much like YFI, very much like YFI. And, and then also there's this distribution mechanism that incentivizes community members and to, to take control over YAMs and have this fair launch, right?

• 24:29Ryan Sean Adams?

  Okay.

• 24:29David Hoffman?

  The key difference here is that, I'm going to scroll down real quick.

• 24:34David Hoffman?

  The key difference here is that when a rebase happens for YAM, just like a rebase happens in ample forth, tokens are minted and added to the total supply that's shared throughout everyone, right? So if, if you own a thousand YAMs and then they mint, the, the rebase mechanism mints 10% more, you will have 1,100 YAMs. The only, the only difference is that when a rebase happens, 10% of the newly issued YAMs goes to purchasing the Y-curve token. And the Y-curve token, for those that don't know, is like a very high yielding stablecoin asset, right? So it's, it's, the Y-curve is the Y-die, Y-tether, Y-USDC, Y-BUSD,

• 25:19David Hoffman?

  all the, all the Y-stablecoins, which are stablecoins submitted to liquidity in the Curve protocol, when you combine all those together, you create the Y-curve token.

• 25:30Ryan Sean Adams?

  So Y-curve is like a super stable, it's like a meta-stablecoin, right?

• 25:35David Hoffman?

  Meta-stablecoin.

• 25:37Ryan Sean Adams?

  Meta, meta. Okay, so Y-curve, the token itself is like a stablecoin that a portion is die, a portion is BUSD, a portion is USDC, all the other popular stablecoins on Ethereum. And I- Does Y curve as well entitle you to curve's transaction fees?

• 25:54David Hoffman?

  Yes, and so so Y die receives, this is really stretching my capacity of understanding this these systems. Y die receives yield from people using curve and die, right? And so does Y tether, so does Y USDC. And then when you combine all of those together, you get Y CRV, right?

• 26:15Ryan Sean Adams?

  Okay, but it's it's going to track the dollar. It's just like a super meta-stable coin that's kind of almost diversified its risk across multiple, you know, stable coins, but also adds the risk of of curve.

• 26:27David Hoffman?

  Right, exactly. And but then and then there's also yield, right? And so it's purchasing. So when 10% of the rebased for yams happens, 10% goes to purchasing Y curve and adds that to the treasury. So what's happening is a little bit of money printer, money printers going on where they're printing money to purchase other money to add it to the treasury, which the Yam token governs over, right?

• 26:51Ryan Sean Adams?

  Okay.

• 26:52David Hoffman?

  That's kind of the big value prop of Yam is that over time, the treasury of Yam gets larger because of the rebased.

• 27:02Ryan Sean Adams?

  And the rebased, right? So this is how ample for it basically works the same similar way is there's a there's a rebate. So what will happen is when lots of people are bullish on amples, just in general, for whatever reason, then amples float above a dollar. So they'll start trading at $2 or they'll start trading at $3. I've even seen it close to $4 trading. And then what happens is more supply is printed essentially during that rebased. So you in an attempt algorithmically to drop the price of amples closer to $1. So that's how it's pegging. And this works the same way, except that a portion of that rebased on the upside. So say yams were trading at $3, for instance.

• 27:44Ryan Sean Adams?

  10% of the rebased amount would be taken and parked into a, you know, a governance fund, a treasury of some sorts.

• 27:55David Hoffman?

  Protocol treasury, yeah.

• 27:56Ryan Sean Adams?

  And that treasury would essentially be sort of the, almost like the base utility value that's backing all of the yams in existence. Is that right?

• 28:06David Hoffman?

  Right, right. So it kind of turns the Y curve as like the deposits of the system, and then the yam as the credit of the system. And you can buy the yams on the secondary market as credits to access the deposits of the Y curve, right?

• 28:25David Hoffman?

  And so now I have to get into the distribution, right? So there's eight different pools of yams that will send out yam tokens to those that supply the tokens to them. And so we can go to the yam website, right? And so this is what you'll see when you go to the yam website. Depending on what tribe you consider yourself, if you're like a link marine, if you're a Spartan, if you're a maker, whatever. I like how they turned, every single one of these is an emoji of sorts. And so you can take your asset of choice and deposit it. And that deposits it into the, into the quote unquote farm for that particular yam. And this is just a distribution mechanism. Your assets aren't doing anything in here. They're just being there.

• 29:11David Hoffman?

  No one is, no one's on the other side of this. This is just proof of the locked up capital so that you can receive the yam token, right? It's not at risk, except for the fact that it's out of your wallet. It's not at risk because it's not being borrowed against, nothing's happening. You're just locking up capital, right?

• 29:27Ryan Sean Adams?

  And to be clear, David, none of the yam initial supply was awarded to a team, pre-mined, venture capital funded, none of it, right?

• 29:37David Hoffman?

  Well, yeah, let's go to the EtherScan page and we can see where all the yam tokens are, right? And so with the holders, there are eight addresses, each holding a quarter million yam tokens. And then there's one, two, three, four, five, six, seven, eight pools for depositing assets to get. The YAM token. So we can assume that these eight pools, each with a little bit over 7% of the supply correlates to one of these pools that we see on the YAM website. By the way, this goes live in 30 minutes from the time of recording. So that by the time viewers are watching this, this is already live.

• 30:11Ryan Sean Adams?

  Just live for the first day, right?

• 30:12David Hoffman?

  Yeah.

• 30:13Ryan Sean Adams?

  And then so, but this is 3.5 million and there's, I thought there was 5 million.

• 30:17David Hoffman?

  Yeah. So on this, on the medium page, which is like the announcement, it says, there's 200, 2 million distributed, 250,000 YAM per pool over seven days, launching in 30 minutes. But there is a total supply of 5 million.

• 30:35Ryan Sean Adams?

  Yeah.

• 30:35David Hoffman?

  I don't know where that comes. I don't know where those are. I don't, I.

• 30:41Ryan Sean Adams?

  Well, is that a pre mine?

• 30:43David Hoffman?

  I don't know.

• 30:44Ryan Sean Adams?

  Anybody getting the 2 million?

• 30:45David Hoffman?

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

• 30:47Ryan Sean Adams?

  Find that out.

• 30:47David Hoffman?

  Yeah.

• 30:47Ryan Sean Adams?

  We should.

• 30:48David Hoffman?

  But they actually don't, according to EtherScan, they don't exist.

• 30:52Ryan Sean Adams?

  So are they deciding to award those later?

• 30:55David Hoffman?

  I don't know.

• 30:56Ryan Sean Adams?

  That's interesting.

• 30:56David Hoffman?

  So, so here's one, here's one thing that is happening.

• 31:01David Hoffman?

  In, in another pool, I think somebody has, there must be a multi-sig that controls the YAM printing, the minting, but it sounds like in, after this phase is done, there's going to be a second phase where 3 million more YAM get distributed through the YAM Y-curve Uniswap V2

• 31:19David Hoffman?

  liquidity, right? So YAM is supposed to track a dollar and so it's going to be paired against Y-curve to give YAM the liquidity. This is like, this is like the ample fourth geyser program.

• 31:30Ryan Sean Adams?

  Yeah, I got it.

• 31:31David Hoffman?

  Yeah. So that you're gonna, there's going to be liquidity incentives for depositing Y-curve and YAM tokens into Uniswap.

• 31:37Ryan Sean Adams?

  So it feels like phase one is they're trying to seed some distribution, almost in a YFI type way. People are familiar with YFI, like go listen to our Andre podcast came out this week, like get familiar with that. And then so they're distributing not to VCs and, and, and that kind of investors and that sort of thing. They're distributing to liquidity providers. And then phase two is they're trying to incentivize liquidity. And by the way, incentivizing liquidity has been incredibly.

• 32:06Ryan Sean Adams?

  It's worked really well for Appleworth. Like, they were, you know, number, number two, something like that?

• 32:12David Hoffman?

  Number one.

• 32:13Ryan Sean Adams?

  Number one.

• 32:14David Hoffman?

  By a long shot.

• 32:15Ryan Sean Adams?

  On Uniswap.

• 32:16David Hoffman?

  On Uniswap, right.

• 32:16Ryan Sean Adams?

  Okay. And so liquidity incentivization does work and has seemed to work with Uniswap. So this is like the playbook almost, but with a different distribution. We need to find out where that other, like, the 3.5 million, right? We've got 3.5 million tokens. This is 5 million. I'm wondering about where's that other 1.5?

• 32:36David Hoffman?

  Yeah, wait, so 2 million into the pools.

• 32:39Ryan Sean Adams?

  Yeah.

• 32:39David Hoffman?

  250,000 yen per pool.

• 32:41Ryan Sean Adams?

  Yeah.

• 32:42David Hoffman?

  And so, you know, here's it, here they are.

• 32:47David Hoffman?

  But yeah, so this is weird. So when you add up eight times 250, you get to, oh man, quick math. You get to 2 million. And then there's, but there's 350 million yams here. So there's something unaccounted for that hasn't popped up on EtherScan yet. And that's just a mechanism of a specific contract and ERC20 tokens that sometimes people don't include for whatever reason.

• 33:10Ryan Sean Adams?

  Are they, are we sure they're not like doing anything else? They're not printing some for their?

• 33:14David Hoffman?

  I don't know. Well, this is, this is, according to this post, they're very specifically trying to make a non VC printed token, right? So they're trying to.

• 33:27Ryan Sean Adams?

  What are they saying? What do they say explicitly anywhere that the EM team doesn't get anything? And no one gets anything aside from these liquidity.

• 33:34David Hoffman?

  Yeah, I don't think there is a EM team, right? There's just the people that made this thing and I don't think they, they would call themselves the team, right? And so a fair distribution mechanism that incentivizes key community members to actively take the reins of governance. I guess that doesn't, you know.

• 33:49Ryan Sean Adams?

  No one is saying in this post explicitly that aside from these, you know, liquidity mechanisms, no one else is getting it approved. Well, it does say that.

• 33:58David Hoffman?

  Yeah, right here, right here.

• 33:59Ryan Sean Adams?

  All right. Well, the post says it.

• 34:01David Hoffman?

  EM is being distributed in the spirit of YFI. No pre-9, no foundershers, no VC interests. Simple, equal opportunity staking distribution to attract a broad and vision-aligned community to steward the future of the protocol and token.

• 34:14Ryan Sean Adams?

  All right. So I'm a. Assuming that's true, and assuming that is true.

• 34:18David Hoffman?

  I don't know Brock, Trent, or Clinton, but I do know Dan, I do know Will, and I like those guys, so.

• 34:24Ryan Sean Adams?

  So what's the, so if we were to kind of summarize the difference here. The difference, it seems to me, make sure I capture this, between Ampleforth and Yams are obviously length of time alive, but like, one is, uh, Yams has a reserve they set aside. Ampleforth has no reserve. So basically, there's no underlying value besides the value of Ampleforth.

• 34:51David Hoffman?

  Ampleforth is the reserve.

• 34:53Ryan Sean Adams?

  Amps are the reserve, right? And so this has a 10% or so, it's going to set aside in some sort of a treasury. And you would assume that the market would value, but like, that the price of Yams would not drop below the value of that treasury. You know, you might make that assumption because it's sort of, it's a treasury that backs the value of Yams, right? And then, so that's one difference. There's some base backing reserve, almost like central banks have, like, you know, a reserve of other assets like gold, that sort of thing.

• 35:24Ryan Sean Adams?

  And the second difference is governance, right?

• 35:26David Hoffman?

  Right, so huge difference.

• 35:28Ryan Sean Adams?

  That's a huge difference. Okay, so governances, Yam token holders, they get to vote on what can be done with that treasury. And they vote on other aspects of governing the protocol in a similar way of YFI, whereas Ampleforth is a bit more governance minimizing, wouldn't you say?

• 35:44David Hoffman?

  Right, right. And I don't even think that it's, uh, right to compare these things because they're achieving totally separate goals. They have similar mechanisms, but they have totally different like success, uh, success scenarios, right? And so like, um, Yam is really a hybrid platypus between, uh, Yiffy and Urn and Ampleforth, right? But they're not competitors, like, I would maybe even say that Yam and Yiffy are more competitors than Yam and.

• 36:15Ryan Sean Adams?

  You think so? So I, so it seems to me what Yam is trying to do is compete as a base money, zero, and M zero, just like Ampleforth. Whereas Yiffy is trying to, it's a capital asset, right?

• 36:27David Hoffman?

  Yes, yes. I think that is an, uh.

• 36:31Ryan Sean Adams?

  Do you think it's the value of VM, there's no fees associated with it?

• 36:36David Hoffman?

  What do you mean?

• 36:38Ryan Sean Adams?

  Oh, did I, did you hear me what I said? So, um, yeah, so I think that I think we were, um, we got like a little disconnected there for a second. So I think that it seems to me that Ample is competing in the same way that Yams are as a M zero. Because like, there's no underlying transaction fees, like with Yiffy, YFI, there's Wi-Fi, we keep saying Yiffy.

• 37:01David Hoffman?

  Yeah, that's my bad.

• 37:03Ryan Sean Adams?

  So with Wi-Fi, there is like, the transaction fees from the protocol ultimately, you know, it's kind of a cash flow. This has no cash flows, aside from the reserve it's set aside as that 10% reserve. But everything above that 10% reserve of the value of Y curve tokens, that's all like monetary premium territory, right? Wouldn't you say?

• 37:22David Hoffman?

  Yeah, yeah. So it's a little bit of both. It, it splits, it really actually does split wiren, yearn, Yiffy, whiffy, Wi-Fi, whatever. It really splits that and Ampleforth right down the middle and constructs its own thing. So, um, I, I think when you say that you think that Yam competes with Ampleforth, I think that that will be up to the Yam token holders as to how they perceive Yam's role in Ethereum. Because, you know, these four, these five, they're calling themselves the horticulturists, horticulturists. Brock, Trent, Clinton, Dan, Will, they, they are spinning up this system, but they don't own the system.

• 38:03Ryan Sean Adams?

  Yeah.

• 38:03David Hoffman?

  The whole idea is that day one is in the hands of the community. So it, the community will decide like, what, what role does the Yam token fulfill in Ethereum? No one else.

• 38:12Ryan Sean Adams?

  Interesting. So, but it is a double edged sword to add governance, right? So like with Ample, um, no amount of Ample, the token at least, entitles you to govern, govern the system.

• 38:24David Hoffman?

  Correct.

• 38:24Ryan Sean Adams?

  Right? And people would say, look, it's still centralized because there's a central team, absolutely understand, right? You can change the code, that sort of thing. But with this, governance of token holders, like, they can vote. Like, so 51% of Yam token holders could say, we want to print all future supply of Yam directly to, like, the specific set of addresses, right? Whereas in Ampleforth.

• 38:50Ryan Sean Adams?

  There's no protocol mechanism for governance to do that, right?

• 38:53David Hoffman?

  Nope.

• 38:53Ryan Sean Adams?

  That's a double edged sword, though, because that could be bad for a base money system.

• 38:57David Hoffman?

  Yep. Yep. Base money system and governance are kind of like oil and water. But again, we will see what happens.

• 39:04Ryan Sean Adams?

  The cool thing about this is the YFI distribution, I think.

• 39:09David Hoffman?

  Yes. And this is also yield farming for beginners, because all you do is like you probably, if you're listening to this, you probably have one of these assets, right? You probably have AVE or LINK or Synthetix or Maker or Comp or YFI. You probably, or at the very least, you have W ETH, you have wrapped Ether. You have something here and all you have to do is you deposit it. That's, that's all you do.

• 39:33Ryan Sean Adams?

  And this is the point where we say, don't deposit anything that you're not willing to lose.

• 39:41Ryan Sean Adams?

  Right? Because there's no audits.

• 39:44David Hoffman?

  No audits. No audits. Big audits, none. While the initial creators of the YAM protocol have made reasonable efforts to attempt to ensure the security of the contracts, including forking much of the codebase from existing well audited projects and soliciting review from friends, nothing approaching the rigor of a formal audit has been conducted at this time. We strongly urge the caution to anyone who chooses to engage with these contracts and think a proper professional audit would be highly advisable if the project gets any meaningful use. This was a 10 day project from start to launch. They started this 10 days ago. This is completely like right out the gate. So.

• 40:21Ryan Sean Adams?

  This is, this is, this is Andre's, I test in prod.

• 40:25David Hoffman?

  Yep.

• 40:26Ryan Sean Adams?

  This is what's happened here. They're testing in prod. This whole thing could get hacked in a, in a heartbeat, in a second. In fact, as soon as it receives some attention, you can bet there are some smart people looking at how they can exploit the vulnerabilities of this thing, right? So if you choose to do this, and we don't recommend that anyone, this is not financial advice. We don't recommend anyone chooses to use these DeFi protocols. But this is like on the spectrum of risk, this is like, like code red, super risky. You know, you could lose anything you put into this thing.

• 41:00David Hoffman?

  Yeah, if you guys watched my settlement assurances and the protocol sync thesis talk at Ethereum, I talked about the time value locked metric for evaluating DeFi protocols, right? So like Maker Dow has a really high time value locked. It's had a lot of value locked in its contracts for a lot of time. This has had $0 locked for 0 seconds. It is literally the worst time locked value score you could have.

• 41:26Ryan Sean Adams?

  Plus unaudited.

• 41:27David Hoffman?

  Plus on audit, unaudited. So the only way that you get time value locked is more value flows into the contract. So it's kind of like a chicken and egg debate. But when it comes to Lindy, this has zero, zero Lindy.

• 41:41Ryan Sean Adams?

  Yeah, I don't know how much more we can say about how risky this is. It's just super freaking risky. I mean, I did, I had a tweet last week where I just, I feel like some people aren't appreciating the risks of DeFi, David. Like, it's just like, or they aren't appreciating that other people are talking about the risk of DeFi. This whole place, the whole DeFi bankless thing we talk about, like, that should be wrapped in police caution tape. Like, do not cross unless, you know, a chunk of a building could fall on your head and wipe you out, right? Like, this is like, dangerous stuff. DeFi is not safe. So keep that into context. Other things are safer than others, but like, some things are safer than others. But if you're entering all of this stuff, none of

• 42:22Ryan Sean Adams?

  it is risk free. All of it's risky. You could lose everything. This is the most extreme, like, one of the most extreme sorts of things that we see. It does not appear to be a scam, right?

• 42:33David Hoffman?

  Does not, does not appear to be a scam.

• 42:34Ryan Sean Adams?

  These are some legitimate names, but that doesn't mean, you know, that doesn't mean much in terms of the risk. It means a little bit, I guess. But very risky. Anyway. Anything else?

• 42:46David Hoffman?

  Nothing for me. Nothing about yams. Yample. We're calling it yample. It's a yample.

• 42:52Ryan Sean Adams?

  It's yample now. Stacking yams.

• 42:56Ryan Sean Adams?

  All right. What else should we talk about, my friend?

• 43:00David Hoffman?

  Moving on to Dex's, huh?

• 43:02Ryan Sean Adams?

  Dex's, okay. Dex's are blowing up, right? In a good way.

• 43:05David Hoffman?

  Yes, in the way that we like.

• 43:07Ryan Sean Adams?

  Like, in a good way, right? It's finally hitting product market fit. I'm gonna pull up a tweet from Hayden about Dex's volume. Well, you may be intro us to what's happening in the Dex world, because it's getting really excited.

• 43:20David Hoffman?

  Yeah, so this is one of those metrics that really indicates that all of the action is happening inside of DeFi, right? And the epicenter right now is Uniswap. And we know this because tokens, newly issued tokens, are getting listed on Uniswap first before any other exchange. Binance just listed YFI Giffy token yesterday, a full two weeks after its genesis. So like, still pretty fast, but also two weeks behind Uniswap, because Uniswap is permissionless. Like, Uniswap didn't need to wait for Andre to whitelist it on Uniswap. That's not how it works. It's still yet to be on Coinbase.

• 44:01David Hoffman?

  And so, like, the epicenter of this whole boom that's going on is Uniswap, right? Like, all the volume is on Uniswap. It's dwarfing centralized exchanges. I don't know off the top of my head how much volume there is on a Coinbase exchange on a daily or weekly or monthly basis, but I bet you, if you decide comparison of various centralized exchanges, and then you would have Uniswap be up there in those numbers.

• 44:26Ryan Sean Adams?

  Look at this. Seven-day volume. If you extrapolate that, $34 billion in volume and annualized.

• 44:37David Hoffman?

  Yep.

• 44:37Ryan Sean Adams?

  That's insane. I mean, that's a very large exchange at this point. I mean, that has got to be eking up to even, you know, the Krakens of the world, let's say, that tier of exchange.

• 44:51David Hoffman?

  Yep.

• 44:52Ryan Sean Adams?

  It's crazy.

• 44:53David Hoffman?

  I'm trying to find a tweet real quick, so I can send it to you. But basically, it is yeah, here, I'm gonna send this to you, Ryan, in Zoom notes, so you can display this one. This one just came out today. If Uniswap was an L1 blockchain, it would be third.

• 45:12Ryan Sean Adams?

  In fees.

• 45:13David Hoffman?

  In fees.

• 45:13Ryan Sean Adams?

  I'm pulling it up.

• 45:14David Hoffman?

  And in fees. And this was actually a little bit late. There was an earlier image that showed Uniswap was at like .7.

• 45:24Ryan Sean Adams?

  Holy crap.

• 45:25David Hoffman?

  .7 million in one day fees and Bitcoin was at like .9. So Uniswap is almost as big as Bitcoin in how many fees it's the volume of.

• 45:34Ryan Sean Adams?

  What fees are these? Are these gas fees?

• 45:37David Hoffman?

  No, exchange fees, not gas fees, exchange fees, right? And so this is the 3.3% on every single Uniswap trade. That is what this is talking about, right?

• 45:47Ryan Sean Adams?

  Okay.

• 45:48David Hoffman?

  Just Uniswap is taking a comparable amount of fees as the entire Bitcoin blockchain.

• 45:55Ryan Sean Adams?

  And we said taking, but the interesting thing about Uniswap is they are, these fees are going directly to liquidity providers.

• 46:03David Hoffman?

  Mm hmm, mm hmm. Right. So it's not, it's not going to the Uniswap team. It's not going anywhere. It's going to a nebulous set of liquidity providers, whoever they are.

• 46:14Ryan Sean Adams?

  This is an incentive, liquidity incentivization mechanism. Now, something else that I've been watching with Uniswap is just last week, they announced 11 million in funding, which is interesting, right? And I wonder how that, like, they've been a funded team before. They were obviously, you know, the story of Uniswap is Hayden, who developed it, received like $100,000 something grant from the Ethereum Foundation, built the whole thing. His first programming project, launched it. And, you know, it was, it was, it was pretty popular from day one. But now they're starting to get funding, which leads me to wonder as to what they're actually going to do. Like, is a token going to be next, right? Are they going to go the way of COP or Balancer,

• 46:58Ryan Sean Adams?

  which we see and create sort of a capital asset out of these fees? And will a portion of that capital asset be like rewarded or awarded to VCs? Which is interesting. What do you think about that?

• 47:10David Hoffman?

  Yeah, while I talk about what I think about that, go ahead and go to that link that I just sent you because that would be fun, too. So for every fully governance minimized, governance reduced protocol like Uniswap, for every protocol that is entirely trustless, entirely like hands off, there is also the governable, hands-on version of that, right? So Balancer has both of these, right? The cool thing about Balancer is it launched with both of these at once, where you can have your own native Balancer pool that doesn't answer to the Balancer token, or you can. And so Uniswap is the non-governance application,

• 47:52David Hoffman?

  and there's probably a version of Uniswap that can be governed that would then justify the Uniswap token. And so that is perhaps my idea as to what's going on.

• 48:02Ryan Sean Adams?

  We will see.

• 48:04David Hoffman?

  That graphic is so cool.

• 48:05Ryan Sean Adams?

  All right, it's called this Pac-Man.

• 48:08David Hoffman?

  Yeah. I love that. All the, this is a graphic of all the transactions going on over a specific period, or active addresses that have, that are really like heavy DeFi users, right?

• 48:21Ryan Sean Adams?

  These are the users, and each of these, by the way, each of these users, some people think they're individuals. We've talked about before on Bankless State of the Nation, David, that it's not so much, don't think of it as one-to-one mapping of individuals. It's one-to-one mapping to a bank account. An Ethereum address is like a bank account, and a bank account is a capital pool that can represent one individual, or many individuals, could represent hundreds of thousands of individuals, right?

• 48:44David Hoffman?

  Right.

• 48:45Ryan Sean Adams?

  Anyway.

• 48:45David Hoffman?

  Yeah, and this graphic just shows exactly how, where Uniswap is in relation to the rest of the DeFi ecosystem, which is at the epicenter, right? So there's all this economic activity between, you know, Synthetix, Kyber, DDX, you know, Bancor, Augur, Compound Maker. But then there's Uniswap that is like basically connected to everything. So like, whenever there's a transaction going on on Compound or Augur or something, there's, it's always seemingly one transaction away from Uniswap, right? So like, no matter whatever people are doing, they're going through Uniswap to go through other protocols. And so Uniswap is just like this, this volume Pac-Man that's just munching on all the liquidity in the space. Huh.

• 49:28Ryan Sean Adams?

  Fascinating.

• 49:29David Hoffman?

  Right.

• 49:29Ryan Sean Adams?

  What is, oh, okay. So all that red in the center, it, that's um, usage accounts, ETH addresses that are shared by three or more protocols. So there's a whole bunch of accounts, it looks like, that are just using Uniswap.

• 49:42David Hoffman?

  Right.

• 49:42Ryan Sean Adams?

  That's what that means. If it's just um, on its own. So if it's yellow, then it means um, it's being shared by one or more protocols. But all of this kind of pink color, Uniswap color, some people are just going into DeFi just to use Uniswap, it looks like.

• 49:59David Hoffman?

  Yeah, like one, one way to view this, all these pink dots, all these, uh, these are all Ethereum accounts that are just using Uniswap, and there's a lot of them. There's more than, than, than, than there's ever been before. To me, this is a bunch of new entrants into DeFi.

• 50:14Ryan Sean Adams?

  Looks like it.

• 50:15David Hoffman?

  Because Uniswap is the easiest protocol to use. Uh, it's, the UI is, is super elegant, and it's the place where you go to buy all these DeFi tokens that are mooning. And so this massive array of, of pink dots that are people that were just using one protocol are the new entrances into DeFi. And eventually, over time, I predict that they will migrate into being, becoming yellow, and then also orange, red dots, which are, you know, turning into DeFi super users, right? They're using multiple protocols. But right now, Uniswap is like the first stop.

• 50:44Ryan Sean Adams?

  And that's why there's so many. Just a story, just, you know, evidence of this empirically. I had a text from a friend, a couple weeks ago. He said, he's just a Coinbase user, and he's like, hey, I want to do some stuff with DeFi tokens. And he listed a few that he's interested in. And he's like, how do I do it? And I said, you can't get those in Coinbase, right? So we traded a text message back and forth. And he was motivated because of the speculation of DeFi tokens.

• 51:11David Hoffman?

  Naturally.

• 51:11Ryan Sean Adams?

  And he'd never been motivated before, but within 45 minutes, he, you know, set up a MetaMask account, had his first Uniswap transaction completed, and was one of those pink dots, basically. Um, it's, it's difficult, but at this point in time, it's not that difficult. I mean, two, three years ago, like, none of these dots existed. There was maybe Maker. There was Maker on this. Just Maker.

• 51:36David Hoffman?

  Very far left.

• 51:37Ryan Sean Adams?

  Very, very far left. Yeah, it's just Maker. And all of these dots are just, that's in the past, you know, year and a half, two years, right?

• 51:45David Hoffman?

  Mm hmm.

• 51:46Ryan Sean Adams?

  Crazy.

• 51:47David Hoffman?

  Crazy stuff.

• 51:48Ryan Sean Adams?

  Yep, it looks like we are moving forward pretty fast, maybe at an accelerated pace. Should we wrap up with this?

• 51:57David Hoffman?

  I think that's it. That is the state of the nation.

• 51:59Ryan Sean Adams?

  All right, state of the nation today. Action items, we will include a few in the show notes. One, of course, is to verify ETH supply yourself. We talked about that at first. Don't trust what you read necessarily on Twitter. Dig a little deeper, I think bankless listeners generally do. We'll include some links to Yam and Yam farming. Again, appreciate the risks before you do anything with that, but it is another fascinating monetary experiment. And lastly, we'll include some links to check out some of the DEX usage in as well, so you can see how that is growing too. Guys, none of this was financial advice. ETH, Bitcoin, all the DeFi protocols we always discuss are very risky.

• 52:42Ryan Sean Adams?

  You could lose what you put in. This has been Bankless State of the Nation, episode nine. Thanks a lot.