ROLLUP: The Inscription Infestation | Solana Flips Ethereum Volume | Restaking Heats Up

Bankless Weekly Rollup 3rd Week of December, 2023 ----- 🏹 Airdrop Hunter is HERE, join your first HUNT today https://bankless.cc/JoinYourFirstHUNT —— 💳 AMBIRE | V2 Browser Extension is now Live! https://bankless.cc/ambire-v2 ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE ⁠https://k.xyz/bankless-pod-q2 ⁠ 🦊METAMASK PORTFOLIO | MANAGE YOUR WEB3 EVERYTHING ⁠https://bankless.cc/MetaMask ⚖️ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum 🔗CELO | CEL2 COMING SOON https://bankless.cc/Celo 🗣️TOKU | CRYPTO EMPLOYMENT SOLUTION https://bankless.cc/Toku ——— 0:00 Intro 3:10 David in Argentina https://x.com/TrustlessState/status/1737955700415037856 4:40 Markets https://www.coingecko.com/en/global-charts https://l2beat.com/scaling/summary https://www.coingecko.com/ 11:45 Bitwise ETF Commercial https://twitter.com/BitwiseInvest/status/1736755061127020794 13:50 Phishing Scams https://www.chainalysis.com/blog/approval-phishing-cryptocurrency-scams-2023/ 17:30 Solana Flippens https://twitter.com/DegenerateNews/status/1735842380257869974 https://x.com/SolanaFloor/status/1737414501610479893 21:00 Celsius vs Ethereum https://twitter.com/JedBreed/status/1737311679795400788 27:00 Inscriptions Invasions https://twitter.com/0xCygaar/status/1736581628259107314 https://x.com/0xCygaar/status/1736581694826992071 https://twitter.com/Dogetoshi/status/1736813432983130186 https://dune.com/hildobby/inscriptions https://twitter.com/BFreshHB/status/1735837409336520935 https://twitter.com/hkalodner/status/1735768514433032432 https://mempool.space/ 33:20 Gary Gensler and the SEC https://twitter.com/GaryGensler/status/1735686262625902968 https://www.sec.gov/news/statement/gensler-coinbase-petition-121523 35:30 Coinbase Super PAC https://twitter.com/iampaulgrewal/status/1735716481541996640 https://twitter.com/coinbase/status/1736714975152869845 https://www.standwithcrypto.org/ 37:20 Elizabeth Warren Strikes Back https://theblockchainassociation.org/wp-content/uploads/2023/12/Sen.-Warren-Letter-to-CEO-Kristin-Smith.pdf https://twitter.com/jerrybrito/status/1737119021483557347 https://twitter.com/CampbellJAustin/status/1737132781015114003 44:00 EigenLayer 1 Billion TVL https://twitter.com/eigenlayer/status/1737516837506851207 https://restaking.nethermind.io/ https://x.com/sreeramkannan/status/1737550720092840385 https://x.com/TrustlessState/status/1736903040605794511 45:50 zkSync Hyperchain https://twitter.com/zksync/status/1735297361251897405 46:20 Celestia on Arbitrum Orbit https://twitter.com/CelestiaOrg/status/1737156267645546650 https://x.com/jackmelnick_/status/1737540854477173065 47:45 Solana Phone https://x.com/solanamobile/status/1735835498025832651 https://www.ebay.com/sch/i.html?_nkw=solana+saga&LH_Complete=1&LH_Sold=1 https://www.ebay.com/sch/i.html?_nkw=solana+saga&LH_Complete=1&LH_Sold=1 https://x.com/MKBHD/status/1737501717808185544 50:50 3AC Assets Frozen https://www.theblock.co/post/268758/bvi-court-freezes-three-arrows-capital-founders-1-billion-in-assets 51:35 Solana Hacker Guilty https://www.justice.gov/usao-sdny/pr/former-security-engineer-international-technology-company-pleads-guilty-hacking-two https://blockworks.co/news/nirvana-hacker-pleads-guilty 52:40 MEME of the Week https://twitter.com/iiintimus/status/1735630582904721425 —— Not financial or tax advice. See our investment disclosures here: https://bankless.com/disclosures

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

• 0:00David Hoffman?

  Oh, you're gonna make me say this?

• 0:01Ryan Sean Adams?

  Yeah.

• 0:02David Hoffman?

  Solana slipped Ethereum? In what metric? And what is our take on that?

• 0:13Ryan Sean Adams?

  Bankless Nation, it's roll up time, and I think, David, this is our last roll up of 2023. So happy holidays to the Bankless Nation, wherever you are listening. Man, it's been a crazy year, hasn't it?

• 0:24David Hoffman?

  It certainly has. It's our last weekly roll up. Next week, the Bankless listeners are going to get the yearly roll up. We're doing a whole entire year, and that's going to ship, of course, the last week of December.

• 0:35Ryan Sean Adams?

  We know that because we pre-recorded it this week. We are not working during the holidays, but during next week, actually, I think we're releasing four podcasts? Something crazy.

• 0:45David Hoffman?

  We have some pent up, you know, it's a bull market when we are doing minimum one podcast a day, and sometimes the boy's doing two.

• 0:53Ryan Sean Adams?

  You will have so much content.

• 0:54David Hoffman?

  So much content.

• 0:55Ryan Sean Adams?

  Unwrapping presents next week, so I hope you guys enjoy. But David, we got a packed agenda today. What's first on our list?

• 1:01David Hoffman?

  Inscriptions have had their exodus from Bitcoin and now are infecting every single chain that it can get his hands on, one by one by one. The inscription locuses are taking down chains. We're going to talk about that.

• 1:13Ryan Sean Adams?

  A big clog, I guess, like you're clogging up your drain pipes. I want to hear your take on that.

• 1:19David Hoffman?

  I don't think that one's gonna stick.

• 1:21Ryan Sean Adams?

  We also have commercials. Hopefully, these stick. Bitwise released its first Bitcoin ETF.

• 1:27David Hoffman?

  I think the big question is how many millions of people are going to see the Bitcoin ETF? But after that, Elizabeth Warren writes a nasygram to our entire industry, telling to us to stop defending ourselves and just bow down and take it.

• 1:41Ryan Sean Adams?

  Why are you fighting back?

• 1:42David Hoffman?

  Why are you fighting back? Then we got a ton of crypto native stuff to talk about as well. What else is coming up?

• 1:48Ryan Sean Adams?

  Eigenlayer, they hit a billion in ETH, total locked value. So restaking, that narrative's heating up. I think we'll see a lot more of that in 2024. And then we got some episodes to, David, we got to tell them before we get in about this fantastic wallet. It's coming, this is a next generation wallet because it's based on smart contract technology. Tell them what it is.

• 2:08David Hoffman?

  There's the word smart in it. Yeah. Our team is launching its V2 wallet. Ambier was one of the first smart contract wallets to really ship a wallet into mainnet, into users' hands. They're launching V2, updated for the year 2024 through a browser extension. So browser extension wallet, like we already know, except when you click on it, you get a smart contract wallet, not a vanilla EOA wallet. So entering, of course, the world of account abstraction in smart contract wallets. There's a bunch of things that Ambier Wallet can do for you. If you want to feel the power of a smart contract wallet, there is a link in the show notes, banklist.cc/ambier-v2. Probably just go click the link.

• 2:46Ryan Sean Adams?

  Oh, definitely go click the link. This is, you know, something you're going to want to test. Also works with the hardware wallets too. So Trezor, Ledger, Gridplus, Lattice, whatever hardware wallet you have. David, we got something else to mention too, because you are, right now, you're in the state of Washington. So you're just outside of Seattle somewhere, I believe, recording from your childhood room, I think, although you corrected. Now you're childhood.

• 3:07David Hoffman?

  Crypto childhood.

• 3:10Ryan Sean Adams?

  Oh, wow. A different kind of childhood where you're maybe born again into crypto. Oh, God.

• 3:16Ryan Sean Adams?

  Too religious here. Okay. But you're going to Argentina, right? Tell us about it, David. How can we experience Bankless in Argentina?

• 3:26David Hoffman?

  Yeah, I'm so glad you asked. There is a Bankless meetup in Argentina, Friday, January 5th. TBD on that date, that is the current date that is locked in, but we have 100 slots. And in the one hour that I sent this invitation out, 88 people.

• 3:43Ryan Sean Adams?

  He's telling you.

• 3:45David Hoffman?

  So we might need to move it a different day. TBD might be Thursday. If it's not Friday, it's Thursday. No. Okay. So on Friday, you can't rent out the whole bar. You can only rent out a part of the bar, which is what we did. On Thursday, we could rent out the whole bar. Anyways, either on Friday, the current time is Friday, January 5th, from 7:00 PM to 10:00 PM, at the Wine Bar in Palermo, in the Palermo neighborhood. If we get so much more demand, which I'm guessing we are, we might move it to Thursday.

• 4:13Ryan Sean Adams?

  Guys, because David is spending, I believe, what, two weeks in January? Argentina?

• 4:17David Hoffman?

  One week in Buenos Aires, one week in El Chelten, one week in Torres del Peine. Yeah.

• 4:23Ryan Sean Adams?

  Well, I really want to hear what the crypto scene is like in Argentina, because I know I've.

• 4:28David Hoffman?

  Yo no sé cuántas personas escuchan a Bankless en Buenos Aires, pero apparently mucho. Mucho personas.

• 4:36Ryan Sean Adams?

  Yes, absolutely. So if you want to see David in Argentina, go check that out. All right, Dave, let's talk about the markets this week, shall we? Bitcoin price, and this is like the year ender because I don't think we give our like up to date prices in the yearly roll up.

• 4:53David Hoffman?

  We gave yesterday's prices in the roll up. Today, we give today's prices, which is actually yesterday for current listeners.

• 5:00Ryan Sean Adams?

  Oh, wow. So once again, thanks for cracking.

• 5:03David Hoffman?

  We don't know why we do this section.

• 5:04Ryan Sean Adams?

  We don't know why we do it, but thanks to Kraken because I know these charts are looking really good and they've held us up all year. But you know what? Let's just just salute Kraken, salute these charts, salute our progress.

• 5:15David Hoffman?

  Sir, if you want to scroll out, you need to set larger candles. You are at the one hour candles. You need to go to candles.

• 5:22Ryan Sean Adams?

  Thank you, David. Here we go. One day, this is what 2020. I like the charts, the yearly charts. This is what 2023 looked like for us.

• 5:30David Hoffman?

  Exclusively up. That is an up chart.

• 5:34Ryan Sean Adams?

  We started at 16K.

• 5:35David Hoffman?

  We started the year with a short squeeze from 16K over to like $23,000 on Bitcoin.

• 5:41Ryan Sean Adams?

  Look at us now. Look at us now. They told us.

• 5:43David Hoffman?

  Look at us now.

• 5:46David Hoffman?

  $44,000 Bitcoin.

• 5:48Ryan Sean Adams?

  Great year for Bitcoin. And how was that on the week, David? Tell me, tell me about that because I know that's important in the roll up.

• 5:54David Hoffman?

  We got some, you know, some muted response at the top of the market cap stack. Bitcoin up 1% on the week, but you know, 1% a week, can't can't complain about that. Bitcoin started the week at 43,100, ending the week at 43,500, up a modest 1%. We love it. We love it.

• 6:10Ryan Sean Adams?

  I think that's about 153% on the year. So big, big year for Bitcoin here. Let's give the same treatment to Ethereum. I'm going to zoom all the way out on the Kraken charts here. Okay, the beginning of January 2023, we were 1,200 ETH price, just above, not lows, but just above 1,000 ETH. Now, where are we?

• 6:34David Hoffman?

  We are at $2,200. So a choppy crabby up chart for ETH. That is a uppy crab pattern right there.

• 6:43Ryan Sean Adams?

  Makes me a little crabby. I feel like I should be hired.

• 6:47David Hoffman?

  It's like, why is ETH like not following the market, not trending with the market? I mean, there's 10,000 different answers. One of the answers is that it like, like overperformed versus the market in 2022. ETH was the best asset to hold in 2022. You lost the least amount of money. If you were down further in the market cap, like you lost more money. And so part of ETH's lack of performance in 2023 was because of, you know, it was overperformed in 2022. It was the consensus bet to hold in 2022. And then as soon as risk went on the table, there was like, why, why would you buy ETH? Everyone already has ETH. It's not going to pump like some of the low market cap stack. And, and, and then also like Celsius has been, I think we're going to talk about this.

• 7:29David Hoffman?

  Celsius has been dumping like a bajillion dollars, 250 million dollars of ETH over the last week. And Michael Saylor has been buying a ton of Bitcoin. And so ETH can just not capture a narrative. It can't capture a wind.

• 7:43Ryan Sean Adams?

  I think some people would look at this and be like, guys, you're 80% up. Like be, be thankful for that. People in, you know, the stock market.

• 7:49David Hoffman?

  Trad people.

• 7:51Ryan Sean Adams?

  You're like, you almost doubled. Like, why are you upset about that? But yeah, I think ETH has had an okay year, but not a strong year for sure. So we'll have to see whether that.

• 8:02David Hoffman?

  I mean, think about this. Bitcoin started the year at $16,000, ending the year at $43,000. That's almost a 3X. Almost a tripling. To say like ETH almost doubled, these are like different numbers.

• 8:14Ryan Sean Adams?

  Yeah, I know. Okay. How about the ratio? Down or up?

• 8:18David Hoffman?

  Little down, point 051. It touched point 05, touches basically the low that has been in a long ass time.

• 8:25Ryan Sean Adams?

  Nobody's looking at the ratio, except for the Bankless Weekly roll up now. Total crypto market cap, 1.7 trillion. So the lows, if I recall it, January 1st of 2023 were about 800 billion, maybe 840, 850 billion or so. So that's like a nice. Doubling on total crypto market cap.

• 8:45David Hoffman?

  More than a doubling, yeah.

• 8:47Ryan Sean Adams?

  Yeah, I mean, pretty impressive. How about Layer 2s? What did we see in terms of growth?

• 8:52David Hoffman?

  Layer 2s had an astounding year in 2023. At the start of 2023, we had $3 billion deposited onto Layer 2s. We currently have $16 billion. I outperformed most metrics in terms of dollar value out of anything that you can see. And then activity, actually like usage of Layer 2s, I think also did a nice old like 7X. We are currently at 7 Ethereum, setting new highs, thanks to inscriptions, we'll talk about that in a second, but setting new highs and I would say accelerating highs in terms of Layer 2 activity dominance.

• 9:26Ryan Sean Adams?

  Yeah, okay, tell me about the movers, because we've got some lower down the stack market cap movers. We talked about a couple of tokens. Which one do you want to pick out this week, David?

• 9:36David Hoffman?

  The one that is unequivocally at the top of the chart right this week is Say. Say with a 50% move week over week and 140% move on the 30-day time period. So Say, what is, what's the market cap of Say right now? It is, scroll up a little bit, fully diluted valuation, $4 billion, $4 billion with a float of $900 million. So like 4 to 1-ish float.

• 9:59Ryan Sean Adams?

  What does Say, for people who don't remember?

• 10:01David Hoffman?

  It's, I think it's a parallelized EVM. I think they just pivoted into being a parallelized Ethereum virtual machine chain. And there's a crop of these showing up recently. And I kind of think it's going to be a pretty hot narrative in 2024. Layer 1s that are using the Ethereum virtual machine, but they've, you know, taken it, they've deconstructed it and then recomposed it to be just far more performance, far more parallelized. Monad is doing this. Say pivoted to doing this because they realized the Monad strategy was correct. And I think that's going to be a big thing in.

• 10:33Ryan Sean Adams?

  Yeah, I think so. I think we'll get Monad sometime in like the first half of 2024, which will be another one to this list. And you could see kind of the justification for it. To me, it kind of flows down from Ethereum. So you have Ethereum, what's that, you know, 250 billion or so market cap? And what is Solana now? Is that about 40 billion market cap, something like?

• 10:54David Hoffman?

  37, 38.

• 10:56Ryan Sean Adams?

  37. And then you have Say over here, and people are like, well, if this is like Solana but faster and EVM.

• 11:04Ryan Sean Adams?

  And it's only $4 billion.

• 11:06David Hoffman?

  Everything we like about the EVM and none of the baggage of the EVM.

• 11:09Ryan Sean Adams?

  Uh huh. So if it was valued at Solana's valuation, it would be a nice 10x, right? And that's how, that's how these types of markets work now that you have a narrative, which seems to have some product market fit narrative, like fundamentals, who knows? You can't really separate the two during the, the bull market in this way. It has to kind of burn off during, during the bear. But yeah, you see this, look, they're comparing, they're benchmarking Solana and they're saying, yeah, Solana does 10,000 TPS. We do 20,000.

• 11:37David Hoffman?

  We do 20,000.

• 11:39Ryan Sean Adams?

  Parallelize. Yeah. It's like, it's, it's, it's a high TPS layer one season. That's what it's been for the last couple of months.

• 11:47David Hoffman?

  Moving on back to Bitcoin, you saw this commercial going out this week, Ryan? This is a, a commercial from Matt Hogan from Bitwise doing-

• 11:55Ryan Sean Adams?

  He's been on the podcast.

• 11:56David Hoffman?

  He's been on the podcast a couple of times. I actually learned a few things about ETF and stock market commercials. You can't actually advertise the ETF. You can't say buy the ETF.

• 12:06Ryan Sean Adams?

  Really?

• 12:07David Hoffman?

  You can't show the ticker on the commercial at all. You can't advertise the ETF. Just, you know, securities regulations can't sell financial products on TV commercials. We can sell pharmaceutical drugs here in America on TV commercials, but you can't sell financial instruments.

• 12:21Ryan Sean Adams?

  Yeah. Cause finances, interest.

• 12:24David Hoffman?

  Yeah. Right. Okay. So with that context, here is the Bitwise Bitcoin commercial. It's going to be a little bit rough for your podcast listeners, but we'll unpack it afterwards.

• 12:37Speaker 02

  You know what's interesting these days? Bitcoin.

• 12:43Speaker 02

  Look for Bitwise, my friends.

• 12:46Ryan Sean Adams?

  Hey David, it feels, it feels good to have the most interesting man in the world chilling our bags right now. I gotta say, uh, that's a good commercial. Well done, Bitwise.

• 12:55David Hoffman?

  Just good branding. Bitwise. It's a great name. It's a great name for like normies to understand bit as in Bitcoin, wise as in wisdom. Like this is a financial word. Like this matters.

• 13:05Ryan Sean Adams?

  Hey, you can't pick a favorite ETF, David. You can't.

• 13:08David Hoffman?

  I guess I can. I pick a favorite chain. I can pick a favorite ETF.

• 13:12Ryan Sean Adams?

  Oh, really?

• 13:13David Hoffman?

  Yeah.

• 13:13Ryan Sean Adams?

  You're supposed to be more agnostic, more neutral than that. What about Van Eck? They got the Hoddle meme. Remember we just had Matt Siegel?

• 13:19David Hoffman?

  Van Eck's great.

• 13:20Ryan Sean Adams?

  Okay. But there, are they your favorite? How about BlackRock? What if, what if Larry Fink comes on?

• 13:24David Hoffman?

  BlackRock is going to be just fine with or without my support. Like they don't need moi at all. They already own the world.

• 13:33Ryan Sean Adams?

  I like I like Matt Hogan. So

• 13:35David Hoffman?

  we like we like Matt. We like bitwise. Yeah.

• 13:39Ryan Sean Adams?

  A message to all the the Bitcoin ETFs out here. You have to compete for our love.

• 13:43David Hoffman?

  Yeah.

• 13:43Ryan Sean Adams?

  Okay.

• 13:43David Hoffman?

  You with commercials.

• 13:45Ryan Sean Adams?

  With commercials or whatever mechanism you have. Okay, David, here's a question for you as we end the year. Phishing schemes have really picked up like people trying to pickpocket your crypto wallet and doing it badly. How much do you think has been stolen the last couple of years by phishing attacks on?

• 14:04David Hoffman?

  Last two years, 2022 and 2023.

• 14:08Ryan Sean Adams?

  Years.

• 14:08David Hoffman?

  Over 100, over 100 million, over 100 million, uh, over 100 million.

• 14:14Ryan Sean Adams?

  You're right, over 100 million, and that feels like a very safe bet. It's 10x that. It's $1 billion. Okay, drained. So there's actually, this is.

• 14:22David Hoffman?

  Okay, now looking at the notes, $1 billion since May of 2021.

• 14:26Ryan Sean Adams?

  Okay, so that's two and a half.

• 14:28David Hoffman?

  It was 800 plus million in 2022 and 2023.

• 14:32Ryan Sean Adams?

  Okay.

• 14:35Ryan Sean Adams?

  What did I say that's different?

• 14:37David Hoffman?

  You said, you said, we can just run with that. You can just take the correction.

• 14:42Ryan Sean Adams?

  I don't want to take, I don't want to take corrections. No, that's out of scope.

• 14:46David Hoffman?

  Get corrected, bro, live.

• 14:49Ryan Sean Adams?

  Just take the L. Take the L. Shut up, Ryan. Okay, um, yeah, so here's an interesting stat about that, David. There's actually more last year in terms of total value drained than this year, which it feels like it's really intensified this year, but last year is about 500 million. This year it was 370.

• 15:06David Hoffman?

  Yeah, but last year our price assets were priced higher.

• 15:08Ryan Sean Adams?

  Exactly. So they probably stole more in in units, but got the less value. Maybe that was it. The largest phishing scam so far was $44.3 million. This is crazy. And according to the chain analysis, by the way, this this billion dollar figure is just the the tip of the iceberg. So there's a lot that might not actually be measured in these estimates. It's a problem we have to solve, man. It's a problem crypto has to solve.

• 15:34David Hoffman?

  The worst thing about these numbers, like, okay, 2023, there was $376 million phished, 2022, $516 million phished. Like sadly phishing. Fishing attacks are also like long tail attacks. So they're not like fat tail attacks or like the wormhole bridge gets hacked and then Jump Capital spends a billion dollars to bail them out. These are like individuals. These are individuals clicking links on Twitter, in Discord. Like, these are individuals losing money. It's not, sadly, it is like the worst type of loss.

• 16:06Ryan Sean Adams?

  Well, you can imagine when AI gets combined in here where you could have like somebody like deep fake call you and pretend to be like your mom or your grandmother or something like this. Like, you can really ramp up the, uh, the scale of these attacks. So, you know, my method is I just don't trust anybody.

• 16:22David Hoffman?

  I just don't trust anyone, not even you.

• 16:24Ryan Sean Adams?

  Yeah, you shouldn't trust me. Somebody could, this, somebody could be deep faking you. You can log on a fake Ryan on a Zoom and deep fake me.

• 16:32David Hoffman?

  Here's a prediction for 2024. Somebody will use AI and all of the data of you and me on YouTube to recreate a video about just like how everyone should click this link and ape into this one airdrop or something like this. And that will go out on Twitter and it will be our likeness and that will probably happen in 2024.

• 16:52Ryan Sean Adams?

  Will we get sued for that?

• 16:54David Hoffman?

  Oh, God, maybe.

• 16:56Ryan Sean Adams?

  Because of my likeness? I don't think so. You can't get sued for that. They would start with Vitalik. They, we're, uh, far less trustworthy than Vitalik, but you know, maybe with the long tail of, uh, fishing, deep fakes.

• 17:08David Hoffman?

  This is probably a global call to action for people who are about to have a bunch of text messages from their friends saying, hey, like, what should I do when I get into crypto? Like, give them your answer and then tell them. And if you're not careful, you will be fished and you need to be very cautious. Like, that should come with your onboarding statements to your friends and family.

• 17:26Ryan Sean Adams?

  It's a big, it's a big UX problem for sure. Uh, David, let's talk about a flipping of a different kind. You teased it during the intro and I'm not gonna say it. You say it.

• 17:35David Hoffman?

  Solana has recently flipped Ethereum in Dex volumes. So I think on Tuesday or Monday or Tuesday of this week, Solana had 1.5 billion dollars in total Dex volumes on chain and Ethereum had 1.1. It's a sense reverted. Ethereum has 1.6 currently and Solana has 1.59 currently. Uh, so pretty, pretty close, actually, pretty neck and neck. Um, so I guess congrats to the Solana Dex ecosystem for flipping volumes. Now, I will say, here is my caveat to that. When you have extremely low fees. Painting a million dollars in volume costs very, very little. That's the feature of the Solana blockchain. And I think we're going to enter this bull market and all these people are going to compete on narratives and stuff.

• 18:19David Hoffman?

  And not all narratives are apples to apples. Like Solana has less TVL, less stables on Solana. And it's doing like more movement per stablecoin on Solana than on other chains. Which is cool because that makes it a great payments chain. But having low TVL makes you not a great DeFi chain because that means your liquidity is not that great. You get to have a lot of DEX volumes on a lot of low supply of coins because your transactions are very, very cheap. And so just brute forcing these comparisons to be apples to apples. We need to take facts and circumstances in like, I can go take like $500. I can buy one USDC and I can spend all that $500 on that spending that one USDC.

• 19:01David Hoffman?

  And I can create like some $10 million of volume sending that one USDC around. And so these are some of the nuances between these two chains. Not to diminish or belittle the fact that like, yo, that's like $1.6 of volume going on Solana DEXs. That's, that's a number. And if we are want to be, want to be sophisticated in our understanding for how these chains work. We need to understand that differences in gas fees do create differences in how these metrics need to be evaluated.

• 19:27Ryan Sean Adams?

  Yeah, I think all that's true. And it's also true that this is a pretty massive accomplishment for, for Solana. And the first time ever, it's actually surpassed Ethereum in terms of volume. And all those points, like I think when transaction fees are low, there's obviously a lot of wash trading that could happen. So you can't take one of these metrics and be like, this is the one, this is the one. But I don't think sensible people really do that. I also think the other thing you need to take into account, of course, is all of the other layer twos. It's interesting that there's like Ethereum, Arbitrum and like Ethereum and Arbitrum.

• 19:59David Hoffman?

  Oh, this is Solana versus the Ethereum layer one. Oh, they're not including Ethereum layer twos.

• 20:03Ryan Sean Adams?

  It's still, it's still a big freaking deal, right? Because

• 20:06David Hoffman?

  There's $700 million of trading on Arbitrum. That would put Ethereum between add all the other layer twos, like

• 20:13Ryan Sean Adams?

  Well, this is part of the problem with Ethereum narrative right now. It's like, it's kind of fractured across all of these sub-brands, like. You know Arbitrum is Ethereum, but people don't see that. They see just Arbitrum or they see optimism. Anyway, it's a big move from Solana and that's not the only flipping thing, David. Actually, Sol price, the price of Sol

• 20:30David Hoffman?

  You like this one.

• 20:32Ryan Sean Adams?

  Just past the price, the price of XRP.

• 20:34David Hoffman?

  We like that.

• 20:35Ryan Sean Adams?

  Right now.

• 20:36David Hoffman?

  We like that.

• 20:36Ryan Sean Adams?

  So.

• 20:37David Hoffman?

  We like Solana being on top of the bank chain. That is deserved for sure.

• 20:40Ryan Sean Adams?

  Yeah. Why do you like that? Cause you think XRP is a security, David? Is that what you think?

• 20:45David Hoffman?

  No, that's just a coin by banks for banks. I don't enjoy Ripple.

• 20:50Ryan Sean Adams?

  I don't, I've never understood why Ripple is valued. It's still valued at $33 billion. So I, I, I wish I could say there's something there, but I don't know what's actually there.

• 21:02David Hoffman?

  Solana 100% deserves to be above Ripple.

• 21:04Ryan Sean Adams?

  Okay. So it's number five, number five. And by the way, maybe closing in on Ethereum, it's got a, you know, cool eight X to go before it flips into Ethereum. So, uh, we'll, we'll see what, what's in store for 2024. Meanwhile, Celsius is absolutely dumping on you, ETH holder.

• 21:22Ryan Sean Adams?

  Dumping on you, dude.

• 21:25Ryan Sean Adams?

  Launching data shows that Celsius, you remember Celsius, Alex Mashinsky's old, uh, you know, scam, banks are not your friend. And apparently neither was Celsius. Celsius was your worst enemy. They, um, they are now selling as a result of their bankruptcy, a lot of their ETH. And I, I, they, I say their ETH, but it's really customer deposit ETH, isn't it?

• 21:43David Hoffman?

  Really your ETH.

• 21:45Ryan Sean Adams?

  So they're dumping on you with your own assets. Wow. Insult to entry. Over the past 30 days, they sold 243 million ETH. And the good news is they got to run out sometime. Um, I think they're getting closer, uh, although they don't have a stat. Do you know how much, how much more ETH they have to dump on us, David?

• 22:05David Hoffman?

  Uh, I don't know. I kind of assumed that they would be done, but yeah, what the hell do I know? $250 million is a pretty good amount.

• 22:12Ryan Sean Adams?

  Yeah, that's true. And I also know that the FTX bankruptcy has a lot of assets that will, you know, be available on the market, uh, here soon. So some of the bankruptcies are, are getting cleaned up. Yeah. So what do you think of all that? Is, is this part of the downward pressure that ETH is feeling?

• 22:27David Hoffman?

  Well, yeah, so like the Bitcoin ETH ratio, like, why is that down so bad? It's like, oh, because Michael Saylor bought like $800 million of Bitcoin in the last like quarter. Why is ETH not able to catch a bid? Oh, because Celsius just sold $240 million of ETH in the past 30 days. Like ETH is just taking just wallop after wallop after wallop. And like, there's this actually like fantastic synergy for the Solana narrative. Whereas like Solana is actually still like pretty small in comparison to Ethereum. Like, it's got a ton of energy, but in the grand scheme of things, it's kind of still just like a spec. Uh, and so like, it's not Ether that's vacating Ether going to Solana.

• 23:07David Hoffman?

  But it does appear like that in this, in a simultaneous nature of Michael Saylor buying a F-ton of Bitcoin and the ETH BTC ratio going down and Celsius selling all of his Ether. And so the ETH is just underperforming. Meanwhile, coincidentally, Solana is having like a renaissance of its narrative. And I think like all of these things are like lined up to make like Ether the currently probably the most hated asset I have ever seen in the crypto meta in my entire time.

• 23:33Ryan Sean Adams?

  Well, people say that I said, I had that claim that tweet earlier this week. And people said that Ethereum has a persecution complex. It's still number two. It's still $250 billion.

• 23:46David Hoffman?

  That's like them playing both sides, right? Like, when, when it comes time for ETH to be defended, they're like, why are you defending yourself? You're number two. But it's just like, if you go onto Twitter, just like, it's totally universal.

• 23:57Ryan Sean Adams?

  I think that 2024 will kind of be the year. This is just partway through the story. So, uh, let's see what happens in 2024 for sure. David, what do we have coming up next?

• 24:07David Hoffman?

  Coming up next, inscription locuses are out of control, plaguing all the chains, hopping from chain to chain to chain, heating them dry as they go. That's a bad image. Second up, Elizabeth Warren, even worse image with a holiday nastagram for all of us here in crypto. But before all of that, a moment to talk about some of these fantastic sponsors that make this show possible, especially Kraken, who's been with us throughout 2023 and is fighting the SEC. And we appreciate them so much for it. And it will also be our favorite exchange in 2024 as well. If you do not have an account with Kraken, what are you waiting for?

• 24:39Ryan Sean Adams?

  What are you waiting for?

• 24:41David Hoffman?

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• 25:26David Hoffman?

  Not investment advice. Crypto trading involves risk of loss. Cryptocurrency services are provided to US and US territory customers by Payward Ventures. PVI, doing business as Kraken. Cello is the mobile-first, EVM-compatible, carbon-negative blockchain built for the real world. And now, something big is happening. Introducing the Cello Layer 2. It's a game-changing proposal that's going to bring Cello's rapidly-growing ecosystem home to Ethereum. Vitalik has shared his excitement for the Cello Layer 2 on the Cello forum, so has Ben Jones from Optimism. But why? The Cello Layer 2 will bring huge advantages, like a decentralized sequencer, off-chain data availability, and one-block finality. What does all that mean? Rock-solid security, a trustless bridge to Ethereum, and more real-world use cases for Ethereum without compromise. And real-world adoption is happening. Active addresses on Cello have grown over 500% in the last six months.

• 26:11David Hoffman?

  With the Cello Layer 2, gas fees will stay low, and you can even pay for gas using ERC20 tokens. 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 forum. Follow @celloorg on Twitter and visit cello.org to shape the future of Ethereum. Arbitrum is accelerating the Web3 landscape with a suite of secure Ethereum scaling solutions. Hundreds of projects have already deployed onto Arbitrum One. With a flourishing DeFi and NFT ecosystem, Arbitrum Nova is quickly becoming a Web3 gaming hub, and social dApps like Reddit are also calling Arbitrum home. And now, Arbitrum Orbit allows you to use Arbitrum's secure scaling technology to build your own layer. Giving you access to interoperable, customizable permissions with dedicated throughput.

• 26:56David Hoffman?

  All of these technologies leverage the security and decentralization of Ethereum and provide a builder experience that's intuitive, familiar, and fully EVM compatible. Faster transaction speeds and significantly lower gas fees. Arbitrum empowers you to explore and build without compromise. Visit arbitrum.io where you can join the community, dive into the developer docs, bridge your assets, and start building your first app on Arbitrum.

• 27:17Ryan Sean Adams?

  Inscriptions, they're invading everywhere. They're clogging up our chains. David, what are inscriptions? And why are they taking down multiple chains this week and causing massive gas spikes?

• 27:27David Hoffman?

  So inscriptions were the ordinals phenomenon that came out of Bitcoin, where you could write arbitrary data through a single Satoshi, which unlocked a bunch of cool features, starting with NFTs, but really expanding from there. And then that same primitive has hopped to other chains. Where what are inscriptions? They are just using chains as data availability chains. All chains are data availability chains to some degree. And they're writing inscriptions. They're writing packets of data, bundles of data. What kind of data? Whatever data you want, open-ended, like turn and complete, fully expressive. And so they write just a packet of data onto chains. And it is very resource intensive because data is the thing that is expensive in the crypto world. So inscriptions are just going from chain to chain to chain. Who's bringing them there?

• 28:12David Hoffman?

  I don't really know, kind of the free market. A lot of bots, a lot of this is bot activity because there's no way that you can take down a chain without just having just, it's basically spam. It's basically.

• 28:21Ryan Sean Adams?

  Well, we call it spam, but I, you know, I don't know if it like, I don't know if that's entirely true, right? So for Bitcoin, you know, famously earlier this year, they've been using inscriptions for like a primitive NFT type of network and for containing BRC 20s, which are like Bitcoin's kind of version of a token.

• 28:40David Hoffman?

  And they've. Bitcoin is not spam. But when when inscriptions show up on Arbitrum and then take down the chain two days later, or that's because like people just bought it the hell out of it. It's spam if it's bots.

• 28:50Ryan Sean Adams?

  I don't even know if I could give you on that low utility. They pay the same gas fees that everybody else does for for

• 28:55David Hoffman?

  Yeah, but the things, the data that we're putting on chain is not, it's not interoperable. It's for one single purpose, like who, no one, very few number of people care. Sure, Ryan, one person cares, but what does that do to the Arbitrum or Celestia or Polygon? I think these even happen on Solana. These don't benefit. There's no welfare for users here, right? There's no global usefulness from these things.

• 29:18Ryan Sean Adams?

  But so it's not, are you saying it's not out of bounds of like the protocols ability to do it? But you think it's like outside of kind of like some loose social contract of like what's quote unquote utility or what's valuable and you're saying it's, you're not shunning inscriptions, though. You're just like observing it and being like, ah, that's annoying.

• 29:35David Hoffman?

  It's, yeah, it's just like, yeah, it's an annoying thing. Like if I took one ether and I like, and like took all of that gas money and just loaded up dick butts and placed that on the Ethereum layer one.

• 29:46Ryan Sean Adams?

  I'd be annoyed by that.

• 29:47David Hoffman?

  That would be annoying. That would be annoying for me.

• 29:49Ryan Sean Adams?

  Okay, I didn't expect to get in a, in a, in a debate over inscription. So let's put that aside. I, um, I don't know how I feel about them, like spam or not. Anyway, um, let's talk about what they've been doing on other chains, non Bitcoin chains. So I said they've taken down multiple chains. What's, what's been going on over the past week?

• 30:07David Hoffman?

  So Arbitrum's sequencer briefly stopped working, uh, because they were just overloaded with transactions, uh, specifically like just BRC 20 tokens on other chains, which is like totally an anachronism, but like whatever, um, Avalanche, Kronos, ZK Sync also experienced degraded performance. It briefly also hit Celestia as well. Celestia, I believe, stopped, um, producing blocks, bro.

• 30:32Ryan Sean Adams?

  Wow.

• 30:33David Hoffman?

  I, I think that, that Celestia hasn't confirmed that, but people are like, yo, like, uh, Celestia Blocker's wars stopped showing anything for like 20 minutes, uh, even plus. Uh, and so, yeah, it's kind of nuts. It's like, it's just like consuming the resources of all the chains in a very relatively cheap manner. It's kind of a question of resource pricing. Like if we are spamming, spamming chains because data on these chains are cheap and they're also taking down the chains. Well, then either we need to figure out our shit or we need to increase the cost of data, one of these two things. But I think it's good because every single network is being stress tested at the moment in like a live production reel environment.

• 31:14Ryan Sean Adams?

  And it's not happening on Ethereum, though. Why is that? It's just too expensive.

• 31:19David Hoffman?

  It's too expensive and Ethereum has perfect liveness.

• 31:24Ryan Sean Adams?

  So it's just, people can't afford to spam the network using call data because there are higher value use cases that purchased that block space ahead of Ethereum.

• 31:34David Hoffman?

  Ethereum Ethereum call data space is, you know, meant to be for layer two chains and people who have a ton of ETH.

• 31:42Ryan Sean Adams?

  High execution, like high TPS execution environments are definitely going to have to deal with this, right? This civil attack, this really, it's very cheap to civil attack a chain with like quote unquote spam.

• 31:52David Hoffman?

  Here's a tweet from Hunter from the Arbitrum team where he says Arbitrum one hit an all time high of 4.3 transactions in 24 hours today. That was the day.

• 32:00Ryan Sean Adams?

  4.3 million.

• 32:02David Hoffman?

  4.3 million transactions in one day from inscriptions. And if you can go to like a layer 2B and you'll see just like the massive spike in activity. And so he says, but cooler than numbers was the incredible support for that came from the other layer twos and layer ones for the Arbitrum community. It feels like we're going to see more camaraderie as this bull market kicks into gear. And yes, I'm excited.

• 32:21Ryan Sean Adams?

  I hope so.

• 32:23David Hoffman?

  So yeah, distributed sequencing where rather than having one single extremely high performance sequencer and splitting that into like two or three or four can maintain liveness while still having like the vast majority of the scale, like reducing total scale, total throughput by just like a few percentage points. But then also like having, you know, 99.9% uptime. And like I said, this is ultimately going to be good for all single, all chains, because we're all going to get stress tested by like bullshit before we get is stress tested by normies with their bullshit.

• 32:55David Hoffman?

  Meanwhile, just to say, just inscriptions started on Bitcoin, haven't left Bitcoin either. So inscriptions continuing to surge there as well. There's almost 300,000 unconfirmed transactions. Oh, there are 350,000 unconfirmed transactions in the Bitcoin mempool, $37 per Bitcoin, the typical transaction in Bitcoin over this last week.

• 33:15Ryan Sean Adams?

  But when they're on the Bitcoin, David, they're not spam, right?

• 33:18David Hoffman?

  Yeah, you know, when they're on Bitcoin, they're not spam.

• 33:21Ryan Sean Adams?

  We don't have to open that again.

• 33:23David Hoffman?

  Because like, I don't know, this is all, this is all just.

• 33:26Ryan Sean Adams?

  Let's move on. Gary Gensler and Elizabeth Warren, the anti crypto army, the generals in the anti crypto army, they are on the attack again this week. They couldn't even give us a break during the holidays, David. Can you believe that? So today, this is Gary Gensler tweeting.

• 33:40David Hoffman?

  And lazy and.

• 33:41Ryan Sean Adams?

  Yeah, the commission denied a petition for rulemaking filed on behalf of Coinbase. You remember a few months ago Coinbase was just like, "Hey, SEC."

• 33:50David Hoffman?

  Please give us rules.

• 33:51Ryan Sean Adams?

  "Can you give us like clarity on the rules?" And SEC didn't respond, like denied, you know, providing clarity.

• 33:57David Hoffman?

  Held out to the buzzer.

• 33:59Ryan Sean Adams?

  Yeah. And then, and then so Coinbase is like, "Fine, we'll get a court to make you." All right. And this is, the court made the SEC respond and.

• 34:09David Hoffman?

  They didn't make the SEC provide rules. They made the SEC respond to the inquiry about whether they are going to provide rules or not.

• 34:17Ryan Sean Adams?

  Yeah. And I don't know if you want to hear what Gary actually wrote, but he published his own sort of a statement on the SEC website. "First, existing laws and regulations apply to the crypto securities market." We already have the laws. "Second, SEC addresses the crypto securities markets through rulemaking as well." We already do rulemaking. You already have the clarity that you need. "Third, it is important to maintain commission discretion in setting its own rulemaking priorities." You can't force us to do anything. Basically, you already have what you need and like, don't come to me like asking for more clarity. You know, that, that's what Gary is saying here.

• 34:55David Hoffman?

  Thanks, Gary. Thanks for the help.

• 34:57Ryan Sean Adams?

  We appreciate it. Merry Christmas. This is Paul Graywell from Coinbase saying, "Today, the SEC denied Coinbase's petition for rules for crypto." "After 18 months of silence." Oh, wow. It was 18 months, David. "We went to the court to get the response that the law requires. With appreciation for the Third Circuit later today, we'll again seek its help." So they're gonna.

• 35:16David Hoffman?

  They're not backing down. They're gonna do that. We're gonna keep going.

• 35:19Ryan Sean Adams?

  No, we actually want an answer. Like, we actually deserve an answer from our regulators on like, just some basic rules for clarity on what's a security and what's not. CFDC is saying things are not securities. The SEC is saying something different. It won't really tell crypto what's a security. It's just drop, dropping these, these charges.

• 35:37David Hoffman?

  Yeah, and Coinbase is really gearing up for the big fight. They're keeping the furnace warm with the SEC by continuing to not back down versus the SEC. But then also this this week, they're also launching a super PAC. I don't know if it's fair to say Coinbase is launching it, a super PAC, a political action committee, a lobbyist group for crypto. So the Fair Shake Super PAC is a brand new political action committee on the scene and all of its affiliates representing the nation's crypto community. And they have raised, Ryan, $78 million. 20 companies and leading voices inside of the industry to support bipartisan crypto forward candidates in 2024. So $78 million, which is a large amount, going to help support

• 36:19David Hoffman?

  crypto politicians raised in only Q4, Ryan.

• 36:24Ryan Sean Adams?

  Yeah, you gotta do it.

• 36:26David Hoffman?

  It's a federal independent committee supporting candidates committing to securing the US as the home to innovators, building the next generation of the internet. So who can, where did this $78 million come from? Andreessen Horowitz, Brian Armstrong himself, Circle and Coinbase, of course, Kraken, Framework Ventures, Jump Crypto, MultiCoin Capital, Paradigm. So basically Coinbase and the VCs, which is great. And I think I think that is just the perfect role for these particular players, like the exchanges, Coinbase, Kraken, and the VCs, like the the big leaders who have a lot of capital in this space, who have the most to gain and the most to lose, right? And so, but also, like, there's plenty of place for for us as individuals, plenty of ways to help out. Go to standwithcrypto.org if you want to learn more.

• 37:11Ryan Sean Adams?

  Yeah, call your congressperson, email congressperson. There's lots individuals can do. But I will say Elizabeth Warren did not like the industry fighting back against this.

• 37:23David Hoffman?

  She didn't like this?

• 37:24Ryan Sean Adams?

  No, this is where we get to the nasty Graham. And she sent this letter not only to Coinbase, but to the Blockchain Association, which is a crypto-friendly education lobbyist group in DC. Kristen Smith there, who we've met before, is the CEO. She's fantastic. She also sent it, they also sent it to Coin Center. Okay, the same, the same templated letter. So here's Jerry Brito. He calls This Coin Center received the same impertinent letter from Elizabeth Warren as the BA and Coinbase. That's Blockchain Association. Read it for yourself to see what a bullying publicity stunt is. So I did read it for myself. Basically, Elizabeth Warren is saying crypto is, you know, like being facilitated by Hamas for terrorism. That's like super obvious. And then she cites-

• 38:09David Hoffman?

  She referred the Wall Street Journal article-

• 38:11Ryan Sean Adams?

  That's been debunked-

• 38:12David Hoffman?

  Which we have clearly debunked.

• 38:14Ryan Sean Adams?

  For two months, it's been freaking debunked many times. Anyway, she's like, look, crypto and terrorism, they're basically the same thing. And then she goes on and says, if you like Coin Center Coinbase, how dare you get people from the government or used to be employed by the government, like working on your behalf, right? Because she's upset that crypto has hired people from DC to like push back against this. And she has asked for-

• 38:43David Hoffman?

  By the way, how politics in America is this, it's-

• 38:46Ryan Sean Adams?

  In every industry, it's like-

• 38:47David Hoffman?

  It's how it works.

• 38:48Ryan Sean Adams?

  I hate that we have to spend $80 million on a super PAC. I hate that we have to do that.

• 38:53David Hoffman?

  Get money out of financing, get financing-

• 38:55Ryan Sean Adams?

  But what's, what's the alternative? Don't defend yourself?

• 38:57David Hoffman?

  Because the banks are doing it.

• 38:58Ryan Sean Adams?

  Let them slap us around? What do we do?

• 39:01David Hoffman?

  The banks are supporting, are doing the revolving door. The banks are supporting Elizabeth Warren.

• 39:06Ryan Sean Adams?

  Yeah, at least ours-

• 39:08David Hoffman?

  She just doesn't weekend to it.

• 39:08Ryan Sean Adams?

  At least ours leads to like individual rights. Like it's not fighting for like it's, at least ours is fighting for digital civil liberties, like holding your own private key and running your own validator. Okay. Like ours is actually doing something productive for, for, for the individual, not just fighting on behalf of a bunch of rights. Anyway, she, she asks in this letter that all of these organizations who she's sent the letter to, tell them how many former military civilian government officials or members of Congress are on their payroll. And like list them all out.

• 39:40David Hoffman?

  It's kind of a demand. It's a little bit

• 39:42Ryan Sean Adams?

  It's 100%.

• 39:44David Hoffman?

  What do you Therefore, I ask you to provide the answers to these questions, to the following questions no later than January 14th, 2024. How many former military civilian government officials or members of Congress are currently employed on behalf or by your organization? For all of the officials listed in question one, please provide a summary of their responsibilities. Are they registered lobbyists? Blah, blah, blah, blah, blah. It's like, it's more like you don't really care about these answers. You're just being me.

• 40:08Ryan Sean Adams?

  PR, it's a PR stunt to just basically say crypto plus Hamas. And they're using the revolving door of DC to like influence us. Look at these corrupt people. That's what she's, she's doing and like she doesn't actually expect a reply.

• 40:20David Hoffman?

  It feels like an inquisition.

• 40:21Ryan Sean Adams?

  Oh, it's doubt. Yeah, this is, yeah, it's, and, and she knows it's not going to be effective. Anyway, that's what the anti crypto army is doing. Austin Campbell had to take, I never thought I would see the day when Elizabeth Warren became a proud champion of big banks. And that's sad, you know, I remember when she rose on the scene, it was like for me. Anyway, my first exposure to Elizabeth Warren in the aftermath of, you know, uh, 2008 financial crisis. And she was like anti bank, anti bank. And it was just like, hey, we got to rein like, why are they getting bailouts? It's kind of like the whole Bernie Sanders message. You remember those days? Um, feels very different from that. Here she is like partnering with, uh, Jamie Dimon, basically saying, yeah, all, all crypto surveillance states, you know, scams and frauds. And let's, let's clamp down.

• 41:03Ryan Sean Adams?

  Meanwhile, this is a peer to peer decentralized money system for the people, by the people, bottom up. And, uh, why would she be on the bankers and the institution side for that? It doesn't make sense. It's not consistent with, uh, what her messaging used to be. I'm, I'm pretty disappointed as well. I share, I share Austin Campbell's sentiments there.

• 41:21David Hoffman?

  I've, uh, talked to, um, friends of a friend who, uh, the friend that I was not talking to, the, the one, one removed, who was a previous intern for Senator Warren's office. Says it was kind of just like, uh, uh, very top down, like shrill, did not respect the interns. Was like fall in line, do as you're told, kind of crabs in the bucket environment.

• 41:43Ryan Sean Adams?

  Oh, yeah. I, I, yeah, I wonder if other political internships are, are like that, but, uh, anyway, not loving what I'm, I'm seeing. We'll, we'll see if the tables turn in 2024, but we've got some defensive mechanisms, uh, at least David. What do we have coming up next?

• 41:57David Hoffman?

  Coming up next, we got some crypto things to talk about. Thank Lord, Eigenlayer has raised its cap and then it got filled inside of 48 hours. $1 billion has been deposited into Eigenlayer. We're going to talk about that. And also, Ryan, did you just notice that first the Solana phone was kind of marked up as a flop? And then 15,000 units got sold last week. What the hell happened there? And then finally, ZK Sync has struck another win with a new centralized exchange, Layer 2 from crypto.com, their new Chrono string. Can become a ZK Sync tree and we'll unpack that. But first, a moment to talk about some of these fantastic sponsors that make this show possible. With MetaMask Portfolio, swapping tokens on-chain has never been easier. Swap tokens at any time with the most competitive pricing around.

• 42:40David Hoffman?

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• 43:09David Hoffman?

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• 43:54David Hoffman?

  started for free. Visit toku at toku.com/banklist or click the link in the description below. Eigenlayer hits $1 billion deposited into the Eigenlayer restaking system. So they added six new liquid staking tokens, Stakewise, Swell Network, Stater Labs, Binance BETH, Origin Protocol, Anchor ETH. And then they also raised the Lido stake to ETH cap. All of that got filled immediately.

• 44:16Ryan Sean Adams?

  Crazy.

• 44:16David Hoffman?

  The heat and the energy around Eigenlayer and restaking is definitely crescendoing. Liquid restaking tokens, Ryan, have just absolutely captivated my attention lately. I'm going to write an article about that. Liquid restaking tokens, I think, is the next meta. I think this airdrop mania and the growth around Eigenlayer and the number of liquid restaking tokens is kind of a bunch of.

• 44:38Ryan Sean Adams?

  The TLDR is you can use Ether, the monetary unit of Ether, to secure all sorts of other apps. You call these AVSs, right?

• 44:46David Hoffman?

  Well, that's the TLDR of restaking. Liquid restaking tokens is just like liquid staking tokens, but you also get the restaking yields of Eigenlayer baked into these liquid restaking tokens. So like the whole LST war is starting brand over, brand new again, is starting fresh with the liquid restaking wars, and I'm absolutely here for it.

• 45:05Ryan Sean Adams?

  You're here for it?

• 45:06David Hoffman?

  Yeah, a huge theme in 2024.

• 45:08Ryan Sean Adams?

  This is Sriram saying Ethereum expanded on Bitcoin but could not be built on it. Eigenlayer expands on Ethereum by building on it. You know, Sriram definitely putting out kind of some narrative tweets here about Ethereum alignment as well.

• 45:22David Hoffman?

  Ethereum acceleration, not necessarily Ethereum alignment. We're going for acceleration. Oh, yeah.

• 45:28Ryan Sean Adams?

  It's acceleration, particularly of ETH asset, I would say.

• 45:33David Hoffman?

  ETH asset, ETH yields, ETH the monetary unit being accelerated by Eigenlayer.

• 45:38Ryan Sean Adams?

  ETH becomes more money.

• 45:39David Hoffman?

  ETH ack.

• 45:41Ryan Sean Adams?

  Bring ETH's money back for 2024.

• 45:43David Hoffman?

  Oh, ETH has always been money.

• 45:44Ryan Sean Adams?

  I know.

• 45:45David Hoffman?

  More money.

• 45:46Ryan Sean Adams?

  People forgot. David says, things you're not bullish enough on ETH and restaking. That's a good way to summarize it.

• 45:53David Hoffman?

  You have ETH acceleration. All right, ZK Sync got a new layer two joining the hyperchain. What is a hyperchain? That is the ZK Sync version of the Optimism Superchain. Kronos has announced the launch of their layer two, the Kronos ZK EVM, joining the ZK Sync hyperchain. So crypto.com, actually a pretty large exchange, going to have its ZK EVM on a hyperchain.

• 46:16Ryan Sean Adams?

  This is cool too. Celestia, of course, a DA layer, so data availability layer. They've launched, of course, and many folks got an airdrop from this, worth a lot, actually. Celestia is now available for builders on Arbitrum Orbit. So with Arbitrum Orbit, you can select a non-Ethereum DA layer if you'd like, and Celestia is now an option for that. I was actually curious, David, with these new DA layers, how inexpensive Layer 2s that use non-Ethereum DA layers would actually be. And this tweet says, "The benefits of ZK proving for L2s with a 99% cost reduction"

• 46:52David Hoffman?

  Right.

• 46:52Ryan Sean Adams?

  versus Layer 1 DA.

• 46:54David Hoffman?

  Dude, L2s are about to be free, bro.

• 46:56Ryan Sean Adams?

  The cost savings. This is another Manta network. It's a different Layer 2. So it's not Arbitrum Nova, but Manta Network is tapping into Celestia for DA. And look at how cheap these transactions are, right? It's like, transactions on Layer 2s are going to like fall off of-

• 47:13David Hoffman?

  Be free. They're going to be free.

• 47:15Ryan Sean Adams?

  When they don't use Ethereum for data availability, they're going to be incredibly cheap, practically free, and probably going to be subsidized by many of the Layer 2s. Like, because if it's micro fractions of a penny, like, why introduce that friction for users? Just call it free, because it's basically free.

• 47:32David Hoffman?

  Why do you think we're getting the inscription spam attack? Because everything is free these days.

• 47:36Ryan Sean Adams?

  Oh, cool. So we get more spam attacks.

• 47:38David Hoffman?

  We get more spam.

• 47:39Ryan Sean Adams?

  We'll have to solve that for that one, too. David, tell me about the Solana phone.

• 47:43David Hoffman?

  Yeah, okay, so like, about a month ago, they kind of, the Solana organization, I think, kind of just called the Solana phone a flop. And they had like, they were selling like 30 to 50 phones a day at peak, and it slowed down to like 2 to 3 phones a day. And if you're gonna move, if you're gonna have enough phones being sold to induce a developer ecosystem to build apps for the phone, you need to move a lot more phones, like tens of thousands of phones. They had 20,000 phones in their first batch, the first-

• 48:11Ryan Sean Adams?

  The bootstrapping problem.

• 48:12David Hoffman?

  It's a bootstrapping problem. And I think they only sold like 4,000 to 5,000 of them. I talked to Anatoly about this earlier this week. That episode will come out next week. And then, they sell 15,000 last week.

• 48:23Ryan Sean Adams?

  What?

• 48:23David Hoffman?

  What the hell happened?

• 48:25Ryan Sean Adams?

  Well, because- I've got an idea.

• 48:26David Hoffman?

  The original Solana phone came with a bonk airdrop on it, and the bonk token has appreciated significantly in price to be about half the cost of the phone. So the phone was 50% off. And the thing is, is that- This is not the only airdrop on the phone. There's like a handful in the teens number of airdrops that you get from having the phone. And so people are, these phones are now going for $2,000 to $5,000 a piece on eBay.

• 48:54Ryan Sean Adams?

  Are you serious? It's an arb opportunity then.

• 48:57David Hoffman?

  Well, it's not an arb opportunity. It's an investment. It's a speculative investment that all of these Solana tokens that are on the Solana Saga phone are going to pump in price. And so like you are over at a $5,000. You are way overpaying what you can pull out from the phone in terms of tokens, because you can only pull out $400. But they're kind of just a rare commodity. It's a bet on Solana. It's like, it's kind of like uni socks a little bit, but also with the potential of these airdrops like appreciating vaguely.

• 49:23Ryan Sean Adams?

  Well, that's got to help them with the, the entire bootstrapping problem, I would guess. It has that as a, as a side effect. It's, it's basically like it found its product market fit. And that's like attaching speculative tokens to it. What a crypto thing to do, huh?

• 49:37David Hoffman?

  Yeah. So Anatoly says, we haven't seen a ton of signal, whether that's compelling enough to sell 50,000 units. They're at 20,000 units now, but I think 25 to 50,000 units feels like there's a hardcore user base for developers to compel to ship applications. So they need, they need another reason. They can't, they, Lightning can't strike twice like this, but if they can get to 50,000 phones, all of a sudden that becomes like a strong user base. Funnily enough, Ryan, MKBHD, he's one of the, he's the biggest tech reviewer in YouTube, like one of the most, most watched YouTube accounts. Rated the Solana phone, the worst phone of 2023.

• 50:11Ryan Sean Adams?

  Oh, sad. This is bust of the year. Solana Saga phone. Oh, this is part of a whole thread where he's rating phones when he got to that one, huh? Sad. And he says the bonk.

• 50:21David Hoffman?

  The bonk, yeah. He says no amount of bonk can save this phone.

• 50:24Ryan Sean Adams?

  Oh, no. Well, I mean, I guess a, a cynical interpretation of this is like, oh, great. Another like crypto speculative like bubble crap, just trying to show, you know, a phone that's not great. I guess a more optimistic take on this is like, hey, tokens really do solve the initial bootstrapping problem.

• 50:42David Hoffman?

  They really do. It really is.

• 50:44Ryan Sean Adams?

  So now you have at least some critical mass of phones out there and maybe that creates a network effect for more development for to improve down the line. I don't really have a take. I don't have one of those, but David. Three Arrows Capital in the news again. This time, a billion of their assets were frozen? What's this about?

• 51:01David Hoffman?

  Yeah, so the BVI, British Virgin Isles, I believe that's Bermuda, has frozen a billion dollars of Three Arrows Capital assets. So, we kind of saw this definitely, like, people think about this happening when Suzy was arrested trying to leave Singapore. And he was only arrested for a very small thing, but the bet was that it was going to like spiral into a big thing. And we are watching this. So, Three Arrows Capital can say goodbye to a billion dollars of their monies.

• 51:24Ryan Sean Adams?

  Yeah, if, look, if it's in a bank account, it can be frozen, David. Maybe.

• 51:28David Hoffman?

  Yeah, he should have listed the bank list a little bit more, you know?

• 51:30Ryan Sean Adams?

  Yeah, you know, you can't freeze Bitcoin. Can't freeze that Ether on-chain. David, there was a pretty large court case. Actually, the first DeFi hacker to ever plead guilty in a, the first ever smart contract fraud conviction. This was a Solana DeFi hacker. What happened with the story?

• 51:47David Hoffman?

  This is Shaqib Ahmed, who pled guilty to charges relating to two DEXs, one Nirvana Finance, the other one, Krema Finance. I think these were on Solana? These were Solana? I think so. Is that right? Can you read? Yeah, they were definitely in Solana.

• 52:03David Hoffman?

  Sold 12 million, stole 12 million dollars from Solana DEXs, faces five years in prison, will be sentenced on March 13th. First ever conviction for smart contract hacks and fraud, according to a US attorney. So, that's just a message for all the incoming scammers of 2024 and 2025. You will go to jail.

• 52:21Ryan Sean Adams?

  Yo, theft is still illegal.

• 52:23David Hoffman?

  Yes, theft is still theft, even if it's crypto.

• 52:26Ryan Sean Adams?

  This is where I'm a little bit Gary Gensler. I'm like, oh, we already have rules in place against theft. We don't need additional crypto-specific rules to tell people not to steal. It's always been illegal, guys. You can't steal.

• 52:37David Hoffman?

  Still illegal just because it's crypto.

• 52:39Ryan Sean Adams?

  Just because it's on-chain. David, as we close out this holiday episode, we got a meme of the week relating to the Solana phone here. What are we looking at?

• 52:47David Hoffman?

  It's a meme from that one movie, which is, "Sell me this pen." And the man responds, "It has 10 million Bunk tokens on it." That would buy the pen. That would buy the pen.

• 52:58Ryan Sean Adams?

  That's where we'll leave things, guys. We got a moment of Zen coming up. Do you want to tease that?

• 53:02David Hoffman?

  We got a moment of Zen from Argent, who puts a yearly promo, yearly recap every single year. They did it last year, they did it this year as well. If you want to get excited for the Bankless yearly rollup coming a week from today, actually, our timelines and their timelines lined up pretty well, except they put it into a minute and 30 seconds and we did it in an hour.

• 53:21Ryan Sean Adams?

  It's a good year in review for crypto, I would say. So enjoy that, guys. So got to end with some disclosures. David and I are advisors for ZK Sync and Eigenlayer. I think we mentioned them both in the episode. And as a reminder, we are long-term investors. We're not journalists. We don't do paid content. There's always a link to all Bankless disclosures at bankless.com/disclosures. Wow, what a year it's been. Thank you so much for being with us on, well, 51 rollups for the entire year, David? I don't think we missed a week.

• 53:48David Hoffman?

  51 weekly rollups and one yearly rollup.

• 53:50Ryan Sean Adams?

  Oh, my God. So that's all 52 weeks and you guys have been along for the ride. Thank you so much. Got to remind you again, as we close out 2023, crypto is risky. You lose what you put in, but we are headed west. This is the frontier, not for everyone, but we're glad you're with us on the Bankless journey. Thanks a lot.

• 54:10David Hoffman?

  What is Operation Choke Point? The crypto businesses might end up completely unbanks.

• 54:16Speaker 03

  Investors in the banks will not be protected.

• 54:21Speaker 04

  Crypto bank Silvergate shutting down.

• 54:26Speaker 05

  And the lack of compliance by these crypto platforms means that you don't have basic investor protections.

• 54:43David Hoffman?

  World's biggest asset manager, that is BlackRock, filed to list an ETF backed by spot Ethereum on the NASDAQ exchange at some point.

• 54:52Speaker 05

  The need for crypto.

• 55:16David Hoffman?

  We'll accept Bitcoin, Ether, and US.

• 55:27Ryan Sean Adams?

  I can't subscribe.