📺 ROLLUP: 3rd Week of May (Dip Week, The Rise of Polygon, Elon Crypto, Coinbase Outage, China)

Download the crypto meta to your brain in this weekly show. Rug Week. 3rd Week of May, 2021 ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ 🎖 CLAIM YOUR BADGE: https://newsletter.banklesshq.com/p/-guide-2-using-the-bankless-badge ------ BANKLESS SPONSOR TOOLS: 💰 GEMINI | FIAT & CRYPTO EXCHANGE https://bankless.cc/go-gemini 🔀 BALANCER | EXCHANGE & POOL ASSETS https://bankless.cc/balancer 👻 AAVE | LEND & BORROW ASSETS https://bankless.cc/aave 🦄 UNISWAP | DECENTRALIZED FUNDING http://bankless.cc/uniswap ------ 📣REGISTER FOR COINDESK CONSENSUS 2021 AND SAVE $20 W/ BANKLESS http://bankless.cc/consensus2021​ http://bankless.cc/consensus2021%E2%80%8B ------ Topics Covered: 0:00 Intro 4:08 MARKETS 4:18 BTC Price 5:25 ETH Price 6:50 ETH/BTC 8:05 Going a Full Cycle 12:00 What Caused the Dip? https://twitter.com/BTCization/status/1395053801061634049?s=20 18:40 The Rektoning https://twitter.com/dytfin/status/1395007097461477379?s=21 20:30 Now vs 2013 https://twitter.com/raoulgmi/status/1395150660660862987?s=21 22:20 Exchange Outages https://www.theblockcrypto.com/linked/105366/exchanges-outages-market-volatility-eth 22:57 DeFi Action 24:26 Greed & Fear Index https://alternative.me/crypto/fear-and-greed-index/ 27:00 EIP-1559 Bullish https://twitter.com/hasufl/status/1395006497164308480?s=20 29:07 RELEASES 30:30 Uniswap V3 Success https://imgur.com/H53upPS 33:50 Slingshot Launch https://app.slingshot.finance/trade/m/MATIC/USDC 35:14 Coinbase Wallet Extension https://twitter.com/coinbase/status/1394369329408454668?s=20 37:05 Miso https://miso.sushi.com/ 41:40 NEWS 41:55 Erratic Elon Musk https://twitter.com/elonmusk/status/1393995872413888518?s=20 https://twitter.com/elonmusk/status/1395352073550532613?s=20 48:07 The Rise of Polygon https://twitter.com/SushiSwap/status/1393215036076658688?s=20 https://www.delphidigital.io/reports/polygon-the-swiss-army-knife-of-scaling-solutions/ https://twitter.com/0xPolygon/status/1395047808860708870?s=20 57:48 Sleuthing Mark Cuban https://twitter.com/0xBay/status/1393987720649662464?s=20 58:38 Cathie Wood & ETH https://twitter.com/RyanSAdams/status/1394761387302432769?s=20 59:50 Ebay NFT Sales https://www.theblockcrypto.com/linked/104508/ebay-offering-nft-sales 1:00:18 BlockFi BTC Oops https://www.coindesk.com/blockfi-botches-promo-outsized-bitcoin-reward-payments 1:02:15 China Crypto Stance https://www.theblockcrypto.com/linked/105190/china-self-regulatory-organizations-crypto 1:03:25 Bank of America on Ethereum https://blockworks.co/bank-of-america-leans-into-blockchain-to-speed-settlements/?oly_enc_id=9918E2523689A0T 1:04:05 Wells Fargo & Crypto? https://cointelegraph.com/news/wells-fargo-investment-institute-to-onboard-crypto-clients-by-next-month 1:04:22 BSC Instability https://twitter.com/ProofOfBags/status/1395235478216060935?s=20 1:06:40 News Quick Bites https://www.microstrategy.com/en/investor-relations/financial-documents/microstrategy-acquires-additional-10m-in-bitcoin-at-average-price-of-43-663_05-18-2021 https://thedefiant.io/yearn-finance-seizes-dip-and-buys-back-1-47m-of-yfi-token/ https://twitter.com/ProofOfBags/status/1395235478216060935?s=20 https://twitter.com/argentHQ/status/1394584739160469504?s=20 https://blog.deversifi.com/deversifi-closes-oversubscribed-round-lead-by-parafi https://www.coindesk.com/defi-dashboard-zapper-raises-15m-to-build-on-platform-app-store 1:09:40 TAKES 1:11:00 DeFi Summer Round 2 https://twitter.com/rewkang/status/1394788692749922304?s=21 1:15:48 Dave Portnoy & Meme Coins https://twitter.com/stoolpresidente/status/1394379356487757834?s=20 https://twitter.com/RyanSAdams/status/1394402282658308100?s=20 1:18:48 Volatility Scares Institutions https://www.bloomberg.com/news/articles/2021-05-17/elon-musk-is-now-blowing-up-the-wall-street-case-for-bitcoin 1:20:05 What David’s Excited About 1:21:17 What Ryan’s Excited About 1:23:10 MEME of the Week https://twitter.com/NeerajKA/status/1395344179371421697?s=20 https://twitter.com/DocumentEther/status/1394982948085116932?s=20 1:24:15 Closing & Disclaimers ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures

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

• 0:08Ryan Sean Adams?

  Bankless Nation, it is the third week of May and it is a Friday morning. That means it's roll up time and this is dip week, David.

• 0:16David Hoffman?

  Oh, God.

• 0:16Ryan Sean Adams?

  Dip week, David. Roll up time, too. Are you excited, dip week, David?

• 0:21David Hoffman?

  Also, all time high week and dip week, all in the same week.

• 0:25Ryan Sean Adams?

  What?

• 0:25David Hoffman?

  Yeah, Ether hit its all time high in the Friday after we recorded the last week of the roll up. And then crypto also crashed, all in the same week.

• 0:33Ryan Sean Adams?

  Guys, we're going to be talking about all of that. That's going to be in the markets section. That's what we do here. Every Friday morning, we try to cram as much of the week that was crypto into your brain, where we cover markets, releases, news, takes, and then we end with what we're excited about. Except that we don't end there. We actually end with the meme of the week. So stay tuned for the meme of the week. This comes at you every Friday. All right, David, before we get in, we got to talk about Consensus. Big crypto conference coming right up. People can get their tickets. This is the last chance, though, to get their tickets. David, you're going to be speaking. What are you speaking about?

• 1:04David Hoffman?

  Ultrasound Money on Monday. Still working on my presentation, but it's going to be hot. Ultrasound Money gets its debut at Consensus. And then I'll also be speaking on a panel about the current state of DeFi and, of course, how to live a life without banks. So Bankless also getting its debut at Consensus. Really excited for this particular year of Consensus because so many of Ethereum things have gone mainstream, as we expected them to for years and years. But now they are finally here. Now they have like the front stage at Consensus, DeFi, NFTs, so much to talk about. Really excited to talk about all those things and listen to the other conversations that are going on. Ray Dalio is going to be there. Michael Saylor is going to be there. Anyone who's anyone in crypto is going to be there. So you should be there, too.

• 1:48Ryan Sean Adams?

  It's awesome. Yes, I'm definitely going to be there. And Bankless listeners, you still have a chance, I think, two more days from today to get your ticket. $20 off with the Bankless codes. Make sure you do that. There's a link in the show notes, David. Also, this is no longer an opportunity. We, the Bankless DAO, that is, issued an awesome shirt. And this is based on our April's April Fool's Day joke where we said like Bankless was getting acquired by Wells Fargo. Psych, that'll never happen. And anyway, the Bankless Dow created, community created this fantastic shirt to commemorate that. It's the first, I think, in a future apparel line. It's all sold out now. That was a limited edition sale.

• 2:28David Hoffman?

  Hope you got one.

• 2:29Ryan Sean Adams?

  Yeah, from what I've heard, hundreds of sales there. It went really well. Yeah, so the thing to do, guys, is next time, don't miss out on this. Go to cryptoculture.substack.com, sign up, get your email address there. That's where the drops will be dropped. So you're first to know. I think future drops, David, might have a set amount, you know, sell out, might be time limited, but it might be also number limited, like a hundred of these things.

• 2:56David Hoffman?

  Scarcity in one form or another. And that is really the through line with Bankless apparel is, in the non-crypto world, the non-cryptoculture world, apparel is not scarce. And there is the world of like scarce apparel and just like, you know, streetwear that some people are into. And we want to emulate that culture in crypto apparel. There is a through line about fixing fast fashion, like bad garments that just cost $2 and you wear them two times and then you never touch them again. No, we want scarce apparel that you wear for life. Because it has that premium price tag, it doesn't fray, it doesn't wear out, it's a dope design, done with an intent. The cool thing about this is that we didn't mass produce these shirts and then sell them.

• 3:38David Hoffman?

  We took the orders and now we are making one shirt per unit of demand. So there's no excess. There's no, you know, environmental issues. It's about changing the culture of the world around us using scarcity and scarcity tools and also rug pulling the Wells Fargo logo and making it our own.

• 3:56Ryan Sean Adams?

  Oh, that's just exporting crypto culture and that's just the fun part. I'm wearing one of these, which is Ritual BAP Design. Only 50 have ever, will ever be made. Really fun, guys, so get in on that. Okay, David, you ready to get in? We got to start with markets this week. And with markets, we have to start with the dip. But before we get there, let's describe it for folks. Bitcoin, what happened this week in Bitcoin price, sir?

• 4:22David Hoffman?

  Yeah, Bitcoin fell from 58,000 of the high of the week all the way down to 36,500 or so at the deepest part of the dip, which is a level that I don't think anyone saw coming. Slight rebound up into the low 40,000 range, but Bitcoin has really been having a tough number of weeks. Ryan, if you zoom out all the way until April, Bitcoin has been in this consolidation period, which everyone was hoping would break out from because it's a bull market. You tend to break out in bull markets, but no, it broke down and it's been having a real tough time with, you know, and overall in the news cycle, it's the Elon's just been pounding it, like environmental issues, blah, blah, blah, China FUD. Bitcoin having a really tough time lately.

• 5:07Ryan Sean Adams?

  We're like, this is definitely three months lows. It's not quite year-to-date lows, but it's getting close, man. Getting really close year-to-date lows.

• 5:15David Hoffman?

  I do think there's a case to be made that the current risk-adjusted return risk profile is really, really strong with Bitcoin right now.

• 5:22Ryan Sean Adams?

  Oh, interesting. We'll get back to that, too. But first, let's talk about what happened in Ether because that went down as well. The price of ETH went down after, as you said, we hit all-time highs. So tell us about the highs and then let's go to the lows.

• 5:35David Hoffman?

  Yeah, Ether hit an all-time high of $4,390, which is really, really high. And it kind of makes sense as like when things are that high, like you can, it's easier to go in the down direction. And that's definitely what happened. Again, no one really expected this level of downness. And that's really the through line of the markets this week is like, holy shit. Like, I kind of thought the, this was the only thing that I can remember of a move like this was Black Thursday. In all of my years of crypto, it has never really seemed to move that much that quickly. And Ether went from, after it topped out at its highs of $4,300, it came down to $3,700, then went down to $3,500 and held there. It kind of seemed like it was going to make a nice basing pattern, but then the floor just fell

• 6:20David Hoffman?

  out and it went from $3,500 all the way down to 2,000, no, all the way down to $1,800 on some exchanges. Think about that. $4,300 down to $1,800.

• 6:32Ryan Sean Adams?

  Like 55% or so off really quick, right? 55% drop really quick. I've got some hot takes on that, but I'll reserve that for now. Let's, let's take a look before we get to those takes on the dip. It was dip week, guys. You know, buy the dip, maybe. We'll talk about that too. First, let's talk about how the ratio held up. This is the ETH to Bitcoin ratio. It's something, David, we've been monitoring since the first part of this year when ETH was really gaining on Bitcoin. How did the ratio hold up last week?

• 7:05David Hoffman?

  Yeah, the ratio peaked out at just over 0.08, which again, really, really high. And then, and then historically, when dips happen, the ETH BTC ratio, quote unquote, noobs. It gets slaughtered consistently every single time. You know, when Bitcoin sneezes, Ethereum just gets absolutely wrecked. And to some degree, like the ratio did pull back a little bit, but like it's still really strong. And that's kind of the sentiment around crypto Twitter right now is the ratio held up between Ether and Bitcoin, which is something to take note of.

• 7:37Ryan Sean Adams?

  People don't remember, but do you know, another time it held up, David, was 2017? Like when we saw this kind of action and like, I feel like this is maybe a theme when we get into talking about the dip. But like so far, dude, 2017, 2021 feels like a fractal of 2017. It's playing out very similarly. Definitely 2018, 2019, when Bitcoin sneezed, ETH got destroyed. But that was not the case in 2017. And this is reminding me a bit of 2017. We'll get to that.

• 8:07David Hoffman?

  I've been kind of thinking about like the, what, what it means to go a full cycle. And I got into crypto and Ethereum after Ethereum pumped all the way up from like $10 up to $430. And that was crazy. And that's when I started paying attention to it. And then after Ethereum or Ether hit $430, it crashed down to $135. And that's the moment that I got in and I, that feels like a, this feels like a fractal of that now. I know a lot of my friends who have just gotten into Ether in this brief moment of time. And so like, oh, a lot of my friends are just now getting Into Ethereum and you know, price is a great marketing tool. And it feels like that time when Ether ran up to $430 off of this insane floor of like $10 to $20

• 8:51David Hoffman?

  and then fell down to $130.

• 8:53Ryan Sean Adams?

  Oh dude, that's exactly it. Look, and the the numbers are similar too. Like, I remember those days. This is why I feel like this is like 2017, right? So that was 66% off of all time high. And I remember that drop, David. It was like 420, the memes were about 420, ETH price 420. And then it all the way to 130, it was like mass panic, bull market's over. ETH was a bubble this whole time. The entire platform's like worth nothing. Like I told you guys, all of this talk, and it happened very rapidly, like in this move. It was like in the flash of a day, two days, all of a sudden 66% drop. Feels very much like that right now. All right, David, let's take a look at this chart because I think this really nails it home. This is one ugly looking chart, or at least one strange looking chart.

• 9:35Ryan Sean Adams?

  Green candle up, spike, green candle down, spike. What are we looking at here?

• 9:40David Hoffman?

  Yeah, this is the weekly chart. So each candle is one week for the ETH dollar price. And there's a famous line, both in markets, but especially in crypto, where you know, stairs up or escalator up, but elevator down, right? And so markets climb a wall of glory, right? And so we were all, we were all super euphoric when Ether hit $4,300. And then just one week later, it spikes all the way back down and retraces. One, two, three, four, five, six, seven, eight weekly candles are erased in two weeks, right? And so this is a lesson in A, just being in zen about this because like this is going to happen. Pain comes in markets. If you feel pain, it's just inevitability.

• 10:24David Hoffman?

  And so this is also a lesson in leverage. If you were on leverage and you got liquidated, I'm sorry, that's the pain. It's a lesson to be learned. If you didn't get liquidated, good job. And the the take here is that, you know, perhaps as you know, crypto becomes more mainstream, we always thought that markets were becoming less volatile. Perhaps as these markets become bigger, the volatility actually gets bigger.

• 10:48Ryan Sean Adams?

  Yeah, I still think volatility is going down with the long, like, over the long term. If you like cycle all the way out a little bit, but yes, absolutely. We're not over the volatility days. And I actually think volatility is a feature, not a bug at some, at some level, right? Like, so people are so afraid of volatility, but you only have to worry about volatility. If like holders don't have to worry about volatility.

• 11:10David Hoffman?

  Right.

• 11:11Ryan Sean Adams?

  Like, I'm, I'm holding ETH. Yeah, traders do, but holders don't. I like, uh, the market gets, and I feel like the news cycle, David, gets, gets all hung up on crypto's volatility. And they think that volatility is like a proxy for risk, right? But like, the fiat markets are a lot less volatile, but I think they have a massive, like, a whole lot more tail risk here. In, in fiat markets, right? So it's just a different, it's, it's, it's almost a more honest market.

• 11:43David Hoffman?

  Right.

• 11:43Ryan Sean Adams?

  If you will, right? Like, there aren't people tinkering with the dials. And so you get this, this craziness. And of course, less liquidity too, at these earlier phases. But let's talk about, everyone's asking what happened, right? So when something like this happens, you get a big drop. Everyone wants to know, what was the cause of this? So we have to talk about this. What was the cause of this? Here is a trader's perspective. This is Dylan Leclerc had a great tweet thread about it. Let's go through some of these, David. So first off, Dylan says bull market corrections on the general of 25 to 30% are completely normal and expected. This has happened in all previous bull runs. That's his first point.

• 12:27Ryan Sean Adams?

  His second point, he talks about Elon Musk here, throwing a Molotov cocktail into the mix here. Also Elon Musk talking about, uh, energy consumption of Bitcoin. So that's one other possible explanation for it. Where else does this thread take us in terms of Dylan's explanations for this downturn, David?

• 12:49David Hoffman?

  Yeah, he looks at some, uh, UTXO analysis where like, who is sending Bitcoins? This is a Bitcoin focused trader, who is sending? Bitcoins and at what prices? And he draws the connection that you can do this thing called the spent output profit loss ratio. I'm not familiar on this metric, but the conclusion he comes to is that there was a ton of leverage in the system. It's all about leverage and this is where these normal 20 to 30% drawbacks, which are healthy, turn into violent, immediate, cascading, quick drawbacks. And so he goes on his next tweet, Ryan, he looks at, here's what he says. Following the 64,000 all time high, the market started to sell off during the sell offs.

• 13:31David Hoffman?

  Funding flips negative, which means that you are actually incentivized. I think this is right. Correct me if I'm wrong, listeners, I guess. If when funding flips negative, you are actually paid to go long. And so each time traders quickly leveraged back up. So like Bitcoin hit 64,000, it dipped down to 55,000 and people are like, there's the dip. I'm going to buy it and I'm going to leverage up. And so the leverage never got flushed out of the system, right? Underwater longs kept adding to their leverage, right? Every dip, they added more to their leverage. And at some point, this guy claims that on the next tweet, that a bunch of whales saw this opportunistic whale saw this and deposited into exchanges

• 14:14David Hoffman?

  and began relentlessly spot selling, knowing that these, knowing that how many leveraged traders were going to, they were going to forcibly make them underwater and forcibly liquidate them, right? And so the, this, you know, in theory, whales looked at all how much leverage was in the system. And they're like, if we dump the market, we can buy like discounted Bitcoins, right? And so that's the conspiracy is that there was way too much leverage that was identifiable. Very much like the GME debacle, right? Like people noticed how much short position there was. And so they bought a bunch of GME and then all of a sudden we had the squeeze. This is the same exact thing, but just in the inverse, right? And so now there's a ton of leverage flushed out from the system.

• 14:57David Hoffman?

  If you get liquidated, your leverage goes to zero and that's what happened to a lot of people. We had 27 billion dollars of open interest at the, I believe, the 64,000 dollar mark. And now we got that cut in more than half.

• 15:12Ryan Sean Adams?

  The trader finishes by saying this is nothing and should be treated as a huge buying opportunity. I feel like that's a great trader's explanation of what happened. It's just like there was so much leverage in the market downturn caused cascading downturn because of leverage and the leverage was flushed, right? And that has to happen periodically as part of a bull run, which is why you've seen this pattern in other bull runs. You know, it was also interesting, David, that that's kind of the trader's take of why this happened, but of course, like crypto media and like the narrative side of crypto wants to take too. Here are, I guess, a few popular takes I heard for why this happened. One, Reuters China banned Bitcoin. Reuters reported that China banned Bitcoin.

• 15:55Ryan Sean Adams?

  I don't know if you saw this circulating, but it was in fact not the case. China did not ban Bitcoin. This, I don't know how many times this has happened, like it's literally dozens.

• 16:07David Hoffman?

  More than 10.

• 16:08Ryan Sean Adams?

  For real. So you had that.

• 16:10David Hoffman?

  It's like honestly a ceremony at this point. It's like, oh, we got to China FUD this week.

• 16:13Ryan Sean Adams?

  Yeah, it's, it's going to happen. It's going to happen every three months or so, just like clockwork. Elon Musk tweets, his tweet that Tesla was dumping 1.5 billion Bitcoin stash. Of course Tesla was not dumping the Bitcoin stash, although Elon's pretty erratic these days in his tweets about cryptocurrency, which we'll get to. Okay. So some people said that was the cause. It was Elon's fault. Over leverage, which we talked about. Other people said it was Tether. So Tether published a breakdown of its reserves, not super cash centric. I don't know if you saw that, David, but it's like.

• 16:51David Hoffman?

  Also cross the FUD, ceremonious FUD. We always get it.

• 16:53Ryan Sean Adams?

  Yes, yes. Also, Tether's compilations, like when you buy a Tether, you're definitely not buying a dollar in the, in the bank account. You're buying a lot of other things, but it's not a dollar in the bank account.

• 17:03David Hoffman?

  And the redeemability of a dollar.

• 17:05Ryan Sean Adams?

  Yeah, plus like treasuries and bonds and all sorts of things. Anyway, separate discussion. That was a reason given. Also broader macroeconomic trends, inflation warnings.

• 17:17David Hoffman?

  Right.

• 17:18Ryan Sean Adams?

  What was the reason? Okay, maybe that's led like correlation with, with stocks. Maybe that's led to the growing fear and uncertainty. Investors are getting skittish. You know, all of these things are given as explanations, but I almost feel like there, there are always like narratives that sort of retrofit the data. And I just, I'm not convinced by any of them, right? I just think like. In bull markets, this sort of thing is going to happen. And then people will look back after it happens to be like, oh, here were the causes very clearly.

• 17:49David Hoffman?

  Right.

• 17:49Ryan Sean Adams?

  It doesn't actually have to have a cause. It could have been anything that happened.

• 17:54David Hoffman?

  I think holistically, we can say like, oh yeah, all of those things. Like overall, it just made everyone just really down. Like our hero Elon turned against us. Yeah, people are just down about this tether fud, like China. Yeah. Like, ah, maybe it made people pessimistic, right? Holistically, not really any one of these things, but overall, people are just like, oh, there's so much to fight. The energy debate is relentless. Nick Carter is getting swarmed. Uh, and then also at the same time, we have this, these over leveraged traders in whales, which really just like lights the dynamite. Like that, I feel like is a more rational explanation.

• 18:28Ryan Sean Adams?

  For sure. And I, I guess I feel like you could swap this set of headlines out with any other set of headlines in a given week or two weeks in crypto. And it would be the same thing. Like the, the net of this, David, is I feel like a reckoning was needed. A rectening. People needed to get wrecked.

• 18:46David Hoffman?

  Rectening.

• 18:47Ryan Sean Adams?

  After this, after this bull run, like it had to happen and dips happen. I tweeted this out, David, right? So like, people are stunned by the, um, the drop, the sudden drop, right? And I get that, but like also.

• 19:03David Hoffman?

  Feel it. We feel it.

• 19:04Ryan Sean Adams?

  We feel it. We feel it. Like, but also guys like zoom out, right? So the, the prices that you just quoted, right? Ether all the way down to 1800. It was 1800, 45 days ago. Like just 45 days. We only lost 45 days at the lowest of the low. Now ETH is, is recovering a bit, but like, oh my God, man. Like if, if you bought 45 days ago, you wouldn't have lost anything on ETH. Like, let's zoom out a little bit and realize how much this asset class has been growing, right? Rather than focus on the dips, like it is true. When in doubt, zoom out. Like you have to zoom out, uh, and realize that we're sitting at a price right now

• 19:47Ryan Sean Adams?

  that we were like 30 days ago, less than 30 days. And as low as low is only 45 days ago from a price perspective.

• 19:56Ryan Sean Adams?

  There's a tweet response on my response that just made the point that David, you and I were talking about that the same thing happened in 2017. From the 420 mark to the 150 mark. So dips are going to happen. It could have been anything. I feel like this was just destined to happen. At this point in the cycle.

• 20:15David Hoffman?

  Yeah. And again, this feels like the marker of the second half of the bull market. That's what it was in 2017. I feel like that's what this is now.

• 20:25Ryan Sean Adams?

  Good take. Springtime. It's funny. It kind of happened around the same time in 2017 as well. Let's go to Raul Paul. I thought this was interesting too. So Raul Paul does a chart comparison. The first is Bitcoin now. Versus 2013 where he's comparing the two. And in white, you see current price of Bitcoin.

• 20:47David Hoffman?

  Right.

• 20:47Ryan Sean Adams?

  In this navy color, you see Bitcoin price 2010, 2017.

• 20:54Ryan Sean Adams?

  The lines kind of line up.

• 20:56David Hoffman?

  Yeah. I mean chaotically line up. Yeah, totally.

• 21:00Ryan Sean Adams?

  Fractally line up. Let's go to.

• 21:06David Hoffman?

  BTC now versus 2017. Right. Perfect. And this is exactly what we're just talking about. Like the dips. Almost, yeah, exactly what you just said. Like it's seasonality is actually the same. The dip amount is pretty similar. Like. I guess this is just the ceremonious halfway through the bear, the bull market, like whales, whales are getting more bullish and they have more resources to liquidate markets who are over leveraged. Maybe this is, maybe this is it.

• 21:32Ryan Sean Adams?

  I think he did ETH somewhere too in the thread. Someone asked him, hey, do ETH? Here it is.

• 21:39David Hoffman?

  Yeah. Or ETH now versus BTC in 2017.

• 21:42Ryan Sean Adams?

  Is that what this is?

• 21:43David Hoffman?

  Yeah. You could, wow. So Ether in the bear market of 2018 to 2019 was lower than BTC in 2017 and right now it's higher. And I feel like that's just a perfect indicator of just like. Ethereum and Ether's narrative was getting just absolutely slaughtered in the bear market. And now finally people are starting to figure out. And so it goes from underperforming to overperforming really quickly. That's interesting.

• 22:04Ryan Sean Adams?

  That is interesting. What's he doing? So he's doing one for ETH.

• 22:08David Hoffman?

  Mm hmm.

• 22:08Ryan Sean Adams?

  Uh.

• 22:10David Hoffman?

  No, that was what we just looked at.

• 22:11Ryan Sean Adams?

  Okay, I would love to see like ETH now versus ETH in 2017, but I'm sure that's out there. Anyway, like, these patterns are all super similar, so there's that. While this chaos was going on, of course, crypto exchanges went down. I think a number of them, David.

• 22:26David Hoffman?

  I think the record number of them. Coinbase, which I mean, usually goes down. Binance US, US went down, Kraken went down, Gemini went down, Bitstamp went down. That's all of the exchanges. That's all of them. That's every single one.

• 22:38Ryan Sean Adams?

  What didn't go down? What didn't go down, David? DeFi didn't go down?

• 22:41David Hoffman?

  DeFi did not go down. Ethereum did not go down. 99.99%.

• 22:45Ryan Sean Adams?

  Gas prices went up, though.

• 22:46David Hoffman?

  Gas prices went up, which is kind of a proxy of going down. If you can't afford a gas price, is it really, is it really up for you?

• 22:52Ryan Sean Adams?

  Yeah.

• 22:53David Hoffman?

  It's a bigger, bigger conversation.

• 22:55Ryan Sean Adams?

  Yeah, did not go down, though. All right, David, let's, let's talk a little bit more about what happened in DeFi. So total locked in DeFi.

• 23:03David Hoffman?

  Almost $90 billion, and then it got flushed out to below $60 billion.

• 23:09Ryan Sean Adams?

  We were almost, we were almost celebrating that $100 billion mark and then all the way down.

• 23:15Ryan Sean Adams?

  So that's total locked value in DeFi. How about, how did, how did DeFi tokens hold up this week?

• 23:19David Hoffman?

  DeFi tokens have been doing okay, right? Like, AVE still $460, Uniswap $26.

• 23:27Ryan Sean Adams?

  Impressive.

• 23:28David Hoffman?

  It's pretty impressive, as in like generally flat. I mean, they definitely took a hit, of course, but as far as things go, DeFi tokens didn't really get the run-up that Ether got, but also didn't get like the slaughtering that Ether got either.

• 23:41Ryan Sean Adams?

  That's super impressive, actually. I didn't realize DeFi tokens held up so well this week.

• 23:46David Hoffman?

  They did okay. DeFi did okay.

• 23:48Ryan Sean Adams?

  Let's take a look at this.

• 23:50David Hoffman?

  And look, yeah, look at it. DPI versus Ether. Again, called the bottom last week, a little bit, so roughly 10 days ago, called the bottom of .13.

• 23:59Ryan Sean Adams?

  You did, sir.

• 24:00David Hoffman?

  ETH per DPI, we are at the level of .161. We almost got up to .18, down to 1.161. But yeah, ETH versus DPI, bottom still in. Patting myself on the back, maybe I'll become a trader.

• 24:13Ryan Sean Adams?

  You know, that's actually impressive, David, because I actually would have predicted that DPI would have gotten slaughtered relative to ETH in this. And that didn't happen. So maybe that bottom will hold, sir.

• 24:26David Hoffman?

  I think so.

• 24:27Ryan Sean Adams?

  I like this. I like this chart, too. This is from.

• 24:30David Hoffman?

  This is good.

• 24:31Ryan Sean Adams?

  Alternative. I mean, it's the fear and greed index, right? I think they measure this based on various social media sentiment, other sentiment scores. But right now, we are on the extreme fear side of the spectrum. I think the other side of the spectrum is like, you know, jubilance, exuberance, irrational exuberance, right? We are now.

• 24:50David Hoffman?

  Chibu tokens are going bajillion Xs. Yeah.

• 24:53Ryan Sean Adams?

  Last week.

• 24:54David Hoffman?

  And then also ETH Maxies are gloating about the ratio. Yeah.

• 24:57Ryan Sean Adams?

  Yeah, exactly. Wait, wait. Who does that?

• 24:59David Hoffman?

  No one does that. No one does.

• 25:00Ryan Sean Adams?

  No one does that. But but let's say hypothetically, they did gloat about the ratio. They would do that in the exuberant phase. They would not do that in the extreme fear phase. And now we are in extreme fear phase. I'm reminded of this Warren Buffett quote where he says, be greedy when others are fearful and be fearful when others are greedy, right? Like, so when you dial, when you dial into the extreme fear phase, when we're over there, that's when you got to be greedy.

• 25:25David Hoffman?

  Right.

• 25:26Ryan Sean Adams?

  Right? When we're in exuberance, that's when you feel like, like your lizard brain tells you, it's like, oh, my God, it's going up. It won't stop going up.

• 25:33David Hoffman?

  I got a leverage. I got a leverage. I got to get more. FOMO, FOMO, FOMO.

• 25:37Ryan Sean Adams?

  Right? That's worse when you lever up to even get like increase those gains. That's when you should be fearful. Like, you should look around and be scared. But right now, we swung into the extreme fear. And I think that investing adage, Buffett's investing adage holds up. You got to be greedy during those times. I will say one thing back to your comment, David, earlier about margin. You know, the the thing that gives you confidence during the extreme fear times, like confidence to be greedy, like the ability to be greedy is if you don't have margin. It's a lot harder to be greedy when you have margin, like during that times of extreme fear, because you're just like, you're feeling that fear.

• 26:21David Hoffman?

  You're flushed.

• 26:21Ryan Sean Adams?

  Yeah, you got nothing. There's no dry powder. Exactly. So how do you be greedy when others are fearful? It's no leverage fam. Like if you want to do that, have the dry powder ready. Don't over invest. Long-term time horizons, all of these things are important.

• 26:39David Hoffman?

  I think it's also a practice in mindfulness. If you can be zen about the dip and be like, yay, I get to deploy capital. Everyone else is scared. I'm scared too, and I'm buying anyways. That's a practice. That's a practice in mindfulness, and that's how you survive long-term in crypto.

• 26:57Ryan Sean Adams?

  Position yourself to do that. You have to position yourself to do that too. This was a good take from Hsu. Man, he's, he might be more EIP 1559 bullish than we are, David. And that podcast, guys, if you haven't listened to podcasts we had with Hsu on EIP 1559, go listen to it. But he did a thought experiment. Imagine if EIP 1559 was live today. David, what did he say here?

• 27:21David Hoffman?

  Every single block mined during this big dip had 30 ETH in fees or more. That was the basal level of ETH fees per block during this crazy volatility times. All of that would be burned and retroactively paid like via buyback and burn to Ether holders. Like 30 ETH just deleted every like 12 seconds, by the way, because that's how fast Ethereum blocks. 30 ETH paid every 12 seconds. I don't know what that is annualized, but it's a really big number. And then of course, if proof of stake goes well, stakers receive all of the extras fees, right? One day fees of $80 billion.

• 27:58Ryan Sean Adams?

  80 million.

• 27:59David Hoffman?

  80 million, excuse me. 80 billion. I bet you, I bet you it was over 100 yesterday. I forgot to check it yesterday. But 80 million dollars of revenue per day, like think of Ethereum as a business. 80 million dollars per day in revenue with no overhead. Like that's a profitable business that you want exposure to and Ether is how you do that.

• 28:21Ryan Sean Adams?

  Dude, also look at Uniswap. I was like paying attention to Ethereum all week on fee revenue. But like, look at Uniswap, man. 10 million in fees. Sushi Swap, 8 million in fees this week. Decentralized exchanges have really hit their stride and they do best in bull markets. Sorry, in volatile market, whether that's bull or bearish volatility.

• 28:49David Hoffman?

  Here's a new member on the crypto fees page is QuickSwap, which is the Uniswap fork on Polygon. Polygon, yeah, Uniswap for Polygon is the number 1, 2, 3, 4, 5, the 5th largest revenue generating application in all of crypto, and it's on an Ethereum L2.

• 29:07Ryan Sean Adams?

  That is markets, guys. We are going to be back with some hot releases, some news, some takes, of course, meme of the week. Stay tuned for all of this. But first, we want to thank the sponsors that made this episode possible.

• 29:18David Hoffman?

  Aave is a borrowing and lending protocol on Ethereum and just recently released Aave version 2, which has a ton of cool new features that makes using Aave even more powerful. With Aave, you can leverage the full power of DeFi money legos, yield and composability all in one application. On Aave, there are a ton of assets that you can deposit in order to gain yield, and all of those same assets can also be borrowed from the protocol if you have deposited collateral. Here you can see me getting a 200 USDC loan against my portfolio of a number of different DeFi tokens and ETH. I'll choose a variable interest rate because it's a lower rate than the stable interest rate option, but I could choose the

• 30:00David Hoffman?

  stable interest rate option if I wanted to lock that interest rate in permanently. One of Aave's V2 features is the ability to swap collateral without having to withdraw your assets. Trade them on Uniswap and then deposit them back into Aave. Aave does all of this for you, all in one seamless transaction. So you don't have to repay loans in order to change the collateral you have backing them. Check out the power of Aave at ave.com. That's A-A-V-E dot com.

• 30:27David Hoffman?

  Balancer is DeFi's most powerful automated market maker. Typical AMMs just have two tokens inside of one liquidity pool, which can lead to fractured liquidity across the many pairs in DeFi. With Balancer, you can access the full power of multiple tokens inside of one single AMM, which unlocks an entirely new playing field of possibility. This makes Balancer an awesome building block for so many different use cases. Balancer pools can make asset indexes, but instead of paying fees to portfolio managers, Balancer lets you collect fees from traders who use your portfolio for liquidity. Additionally, Balancer smart pools can be programmed to have properties that change according to predetermined rules, such as changing the swap fee based on market conditions, or even liquidity bootstrapping pools, which can help you launch and distribute your token with day one liquidity. At Bankless, we used a liquidity bootstrapping pool

• 31:11David Hoffman?

  to sell our BAP t-shirts to much success. Balancer V2 brings powerful new features that makes your money work even harder for you. In V2, idle tokens are capable of generating yield in DeFi without sacrificing liquidity in the pool. To top things off, Balancer is reimbursing all gas costs with BAV rewards, meaning that all your gas costs are returned to your wallet with the Balancer Governance token. Balancer's mission is to become the primary source of liquidity in DeFi by providing the most flexible and powerful platform for asset management and decentralized exchange. Dive into the Balancer pools at pools-balancer exchange.

• 31:47Ryan Sean Adams?

  All right, guys, we are back with releases. We've got to talk about Uniswap V3 at the start of this. V3 released two weeks ago, maybe three weeks ago now. It is already the second largest decentralized exchange on Ethereum, trailed only by Uniswap V1, and it's fast catching up. V2, excuse me, yes. And it's fast catching up. So at this pace, it might actually surpass Uniswap V3, or sorry, V3 might surpass V2 by the end of this month. Are you surprised about that?

• 32:22David Hoffman?

  Uh, I mean, no, because Uniswap V3 is straight up a new paradigm in AMMs. Where AMMs to begin with are already a new paradigm, but V3 is a new paradigm inside of a new paradigm. Uh, and so I like to use the word paradigm. It's also interesting to note that, uh, you know, Uniswap V2 and V3 are not Uniswap, right? Uh, there is no one, there is no Uniswap. There's Uniswap V1, there's Uniswap V2, and now there's Uniswap V3. These are all different things. They just are under the same brand, right? And, and technically, Shelling Point, social consensus around the same token.

• 32:53Ryan Sean Adams?

  Yes.

• 32:54David Hoffman?

  And we all, everyone expects big things out of V3. Uh, and so, uh, and V3 has been adopted in very specific niche circumstances. And, but now people are coming to learn how to use it. Uh, the UI is getting better. Uh, people are getting more strategic with their liquidity.

• 33:07Ryan Sean Adams?

  Look, man, there was always the chance that, that it could fail. I remember like, you know, um, cause, cause it's such a new paradigm, right?

• 33:14David Hoffman?

  Right.

• 33:14Ryan Sean Adams?

  Um, so like, you know, you hit a grand slam and then is the follow-up going to be as good? Kind of reminds me of like, you know, Apple released the iPhone and then they released the iPad. Analysts were like, uh, what, what is this? Yeah, like, is this gonna do well? And this kind of felt to me like this. It was, it's definitely a paradigm shift, but also risky at some level. You're changing the core way Uniswap V2 worked. Are you changing everything about it? And so it felt risky to me, but like, it's, uh, working and seems to be working really well, so.

• 33:47David Hoffman?

  Congrats to the Uniswap team.

• 33:49Ryan Sean Adams?

  Absolutely. Uh, Slingshot, let's talk about that. What is Slingshot, David? You used it this week.

• 33:54David Hoffman?

  Yeah, Slingshot is a AMM or a decentralized exchange aggregator on Polygon. Uh, so this is a new Polygon release. Uh, I've traded on it and god damn, are the fees absolutely awesome. It literally feels like a centralized exchange and the very fee.

• 34:09Ryan Sean Adams?

  In like nonexistent, right?

• 34:11David Hoffman?

  Sorry?

• 34:12Ryan Sean Adams?

  Awesome as in nonexistent fees.

• 34:14David Hoffman?

  Yes, as in .0001 Matic, which one Matic is like $2 right now. And so .0001 Matic is basic, basically zero, call it zero. Uh, and also basically instant finality, right? And so block times are really, really short in Polygon. I think they're like two or three seconds and they always gets through on the first block because there's so much extra, extra free real estate. It's a suburb, it's an Ethereum suburb, right? Uh, and so. The great thing about Polygon and specifically Slingshot is like Polygon is still relatively new, even though that they have been being adopted very, very fast. There's actually really decent liquidity on Polygon. But there can always be more and that's what Slingshot does. It's a liquidity aggregator. It's a DEX aggregator, much like 1inch, much like Matcha.

• 34:54David Hoffman?

  But now it's on Polygon and so really just adding liquidity into Polygon, making Polygon a very hospitable place to live.

• 35:03Ryan Sean Adams?

  That's cool that there's enough liquidity on Polygon for a DEX aggregator at this phase. I think we're going to be talking about Polygon some more later because it's had a big run-up and a big week. So we'll get to that. Yeah, Coinbase is excited to announce, they say in this tweet, a new Coinbase wallet extension, a wallet extension, to more easily and securely connect to apps and DeFi on your desktop. David, this sounds like Coinbase is rolling out their version of MetaMask. Is that what this is?

• 35:32David Hoffman?

  Right, yeah. There's people have just gotten used to using a browser extension to interact with DeFi and so Coinbase is getting into that game. They already had this MetaMask, this Coinbase wallet, which I don't think very many people will be familiar with. If you have downloaded what is canonically known as Coinbase, this is not what you have downloaded. This is Coinbase Wallet, which is a self custody, you control your own private keys, DeFi-enabled wallet with DeFi apps involved. And so you put your own ether there, you put your own tokens there, you pay for your own gas. It's non-custodial, non-centralized. And so now they are trying to really finally double down on this infrastructure, what they've basically had in the back pocket forever now, and finally trying to get that thing integrated into DeFi, because they finally know, finally recognizing that DeFi is the place to be.

• 36:17David Hoffman?

  And so hopefully Coinbase just expends more and more resources into the Coinbase Wallet, because we could definitely use some diversity of options in DeFi.

• 36:24Ryan Sean Adams?

  Yeah, I'm very excited that MetaMask has some competition to make them better. And you know, another reason I think Coinbase joined is because MetaMask is absolutely crushing it on fees. Like they are generating real revenue. It seemed for a while like, well, is MetaMask going to be sort of a public good? Does it really have a business model? But they incorporated some decentralized exchange aggregation, added a layer of fees on top of that. People are using it for convenience reasons and they're just crushing it in terms of revenue. So Coinbase is like, business opportunity. What are we? We're a business. We're a crypto business. So we're going to go where the business opportunities are. And I think that that's part of their expansion of the space too, which is cool.

• 37:05Ryan Sean Adams?

  Let's talk about this, David. Miso. Miso on Sushi Swap. What is this?

• 37:10David Hoffman?

  Yeah, so this is interesting. This is a really interesting conversation and this is a kind of, I feel like, very much in my camp because I came into the crypto during the ICO boom. ICOs leave a bad taste in people's mouths just because of what they turned into, but as a primitive, all an ICO was, was a token launch and distribution mechanism slash mania.

• 37:31Ryan Sean Adams?

  Permissionless.

• 37:32David Hoffman?

  Permissionless, right. And it was very, very, like I said, rudimentary, primitive, bare bones, and also too early. We are returning to the concept of good token issuance, or just token issuance at large. So like, this is basically a rebranded ICO platform, but maybe we should stop, maybe we should leave the term ICO behind. This is a token launch and distribution sale infrastructure platform. And so they have a bunch of different mechanisms to get your token out into the wild. And so here's, I'll read this from the launch article. "Miso is a suite of open source smart contracts created to ease the process of launching a new project on the Sushi Swap exchange. Miso aims to drive new capital and trade to the exchange

• 38:16David Hoffman?

  by increasing the attractiveness of Sushi Swap as a place for token creators and communities to launch new project tokens. We aim to create a launchpad for both technical and non-technical project founders that will allow communities and projects to access all the options they need for a secure and successful deployment to the Sushi Swap exchange. Choose from crowdsale, Dutch, or batch auctions, and as well as how you would like to manage participation." So it's basically a suite of tools built on top of Sushi Swap to launch your token. This is exactly what Binance tried to do with their IEOs, which was just an iteration off of ICOs. I remember Consensus had the Foundry spinoff that didn't really do well, that tried to capitalize

• 38:57David Hoffman?

  on the token issuance. Sushi Swap, getting back into token bootstrapping tools. And I'm really optimistic about that because while ICOs were corrupted, that doesn't mean that token issuance and token creation is bad. And I think we could just have more optionality and expressivity with how we launch. These things. And now that we kind of as a community are more self-regulating, I'm very much bullish on open, more permissionless, easy launch tools. Cause I remember I wanted to launch my own token back in 2017 because I was a, I just wanted to, why not? And I didn't really have any help to do it. I had to learn how to code. If this is allowing just random people to just launch their token ways they see fit. People like Gary Vee, who just wants to launch a token, doesn't really care about the technicals or any other community member.

• 39:41David Hoffman?

  This is a tool for them. That makes me really bullish. Awesome.

• 39:43Ryan Sean Adams?

  Yeah, it's, it's, it's really exciting. And like with Binance, Shannon, or with Binance IEOs, they, they sort of got corrupted, right? Like you had to pay Binance a fee. They wanted their cut of the process. This is really open, permissionless, like, you know, Saki and Miso is not taking a inordinate cut out of this, this whole process. So it's a, it's really different and really accelerates that idea. The other thing that struck me, David, is like, what a perfect project for a pseudo anonymous team to capture, to, to execute on, right? There, there are many other teams that wouldn't want to even touch this because of 2017 SEC securities type pressures. But where is, where is the sushi swap team?

• 40:28Ryan Sean Adams?

  I don't know. All over the world, outside jurisdictions, right? This is a DAO pseudo anonymous project, great launch, public infrastructure, more tokens are coming. Some of these tokens will be terrible, absolutely terrible as they were in 2017. But this is a new primitive and mechanism for us to experiment on, like it.

• 40:44David Hoffman?

  They're actually, they're also launching with this Sake token. So they have their own internal project and Sake is literally, it's a token redeemable for a bottle of Sake. And yeah, right. So they've partnered, partnered with like this, you know, very craft Sake, I guess you would call it. I don't know what to call it, but very premium Sake. And there's only going to be, I think, 800 Sake bottles. So like, don't even think that this is just like a, you know, a DeFi token launch platform. Like literally launch your token for whatever, like we could have launched our BAP tokens with this as well. Literally you're, it's, it's up, up to you to use your imagination to how you want to use this infrastructure.

• 41:19David Hoffman?

  And also it's really bullish for Sushi because they make, they help people launch their tokens and naturally they're going, people who launch their tokens on Sushi Swap are going to be so inclined to keep their tokens on Sushi Swap and keep liquidity there. So it's a really big play by the Sushi Swap team.

• 41:33Ryan Sean Adams?

  The last take on this is remember when Sushi Swap was just a fork of Uniswap?

• 41:38David Hoffman?

  Right.

• 41:38Ryan Sean Adams?

  Man, has it evolved, right?

• 41:40David Hoffman?

  Not that anymore.

• 41:41Ryan Sean Adams?

  Evolved into its own thing, uh, doing a separate direction. Really cool to see the community, uh, build new things around this. All right, David, let's get to the news of the week. I think there are two big stories of the week that we need to cover. The first is erratic Elon.

• 41:56David Hoffman?

  Erratic Elon.

• 41:57Ryan Sean Adams?

  What is Elon Musk doing again to the crypto markets? We've got to talk about that. And the second is

• 42:01David Hoffman?

  What is he doing?

• 42:02Ryan Sean Adams?

  This, this theme that we've talked about elsewhere, which is the rise of Polygon. What does that mean for layer twos? What does that mean for side chains like Binance Smart Contract Chain? So let's talk about that first. Erratic Elon, what, what, why is Elon picking a fight with?

• 42:19David Hoffman?

  Picking fights left and right.

• 42:20Ryan Sean Adams?

  What's he doing here?

• 42:21David Hoffman?

  Michael Saylor of all people, right? So, you know, uh, Peter McCormack made this big thread trying to like help Elon, like guide him down the, the rabbit hole of crypto. And then Elon was like, annoying maxi threads like this just won't want to make me ape all my money into Doge.

• 42:38David Hoffman?

  Uh, you know, Michael Saylor made a comment and then, and then Elon Musk made a meme of, of some guy looking in the mirror, pointing at himself in the reflection and goes, no, you are a genius. Everyone else is wrong. Um, it's not the bull market. You really are a genius, uh, which is poking fun at Michael Saylor, who, you know, bought a bunch of Bitcoin and then Bitcoin went up in price. And so now everyone loves Michael Saylor. He's really just picking fights left and right, right? Like he picked a fight with Chainlink God. And so like, really has no friends in the crypto space because he picks fights with everyone.

• 43:07Ryan Sean Adams?

  Except Doge community.

• 43:08David Hoffman?

  And then goes and chills Doge, right? Erratic Elon.

• 43:11Ryan Sean Adams?

  Why?

• 43:12David Hoffman?

  And so probably, probably contributed to some of this market decline because again, it's just like, it was just demoralizing for everyone. Like fuck Elon, like it's just ceaseless. It's endless. Like, why are you even doing this? It makes no sense. Like, why are you concerned about Bitcoin's energy now? Why, why didn't you care about it two weeks ago? It's like, god damn it. Just shut up Elon. Just shut up. Delete Twitter. But of course he's never going to do it.

• 43:33Ryan Sean Adams?

  Do you know, here's the thing, David. It's like, I don't care, though. I feel like so here's the here's the mistake that I feel like the crypto community made. And this is I understand it, right? Like, when somebody with a lot of clout says something good about an asset, you the community wants to put this person on a pedestal. And that's what that's what Bitcoiners specifically, but also crypto in general, did with Elon two months, two months ago, when he added Bitcoin to the balance sheets. Like Elon loves Bitcoin now. He's a supporter. He's our hero. We put him on this pedestal, right? But like, now he's

• 44:11Ryan Sean Adams?

  turning on them. And like, this was all that we didn't have to put Elon on a pedestal in the beginning. I look, here's what I feel like, David, it's like billionaires have been last to crypto, except maybe the Gemini, the Winklevoss twins at Gemini. But like, they've been last to crypto this entire time. It's been the nobodies who've really adopted crypto and understand where the puck has been going, right? Like, very beginning of Bitcoin, it was the nobodies. Like Ethereum, very beginning, all of the VCs turned down Ethereum, didn't buy any ether in ICO, very few of them did, anyway. And it was the the regular people, the crypto natives, who got in first. It was like, it was the people, it was the nobodies. Like, why are we even taking advice

• 44:55Ryan Sean Adams?

  from billionaires? Like, we don't need their clout. Who cares, dude? Right? I don't care what Elon says. I don't care in the slightest what he says. Has Elon ever used Uniswap? Has he used AVE? Does he know anything about, like, using MetaMask and non custodial wallets and DeFi, right? If if the answer to those questions is no, he doesn't really know about crypto yet, in my opinion. Like, okay, here's another Mark Cuban, different, different situation. Billionaire, he's gone deep. Like, he knows what he's doing in DeFi, you could see his address. Teaching himself solidity, we had him on the podcast, right? Different story. He's informed. I don't think Elon's takes are informed right now. Maybe someday they will be. But why do we care so much?

• 45:38David Hoffman?

  I think there's, I think there's good reasons as to why we care. Elon, it's not, Elon Musk is just one man, happens to be the richest man. But he has influence. And so who cares about Elon? But I care about the people that think of him as a leader. And are looking to him for information, right? Because the guy landed a rocket and stuff on Mars. I think he did that, like he does stuff, right? Like he does really good stuff. He like basically memed electric cars into existence and forcibly changed the entire automotive industry. The guy moves markets, like crypto markets aside, he moves markets.

• 46:12Ryan Sean Adams?

  He memed it, he memed it, but he also built it.

• 46:14David Hoffman?

  He also, he also built it, right?

• 46:16Ryan Sean Adams?

  Yeah.

• 46:16David Hoffman?

  And so while he's just one man, like there, he's got a ton of clout and following. And so it's not just this one guy. It's like, if he legitimizes Bitcoin, that's really powerful. If he's delegitimizing Bitcoin, uh oh, fuck. Like, a lot of people are gonna take what Elon says at face value and be like, well, if Elon doesn't like it, like, like, you know, the guy lands rockets on Mars. Like, who am I to disagree with this man?

• 46:36Ryan Sean Adams?

  So this is why we had this, we had this podcast we did with Udi Worthheimer, right? And this was kind of like, I actually, I expected that to be sort of a, you know, kind of a troll fight back and forth, but Udi actually had some good takes about this.

• 46:51David Hoffman?

  Yeah, Udi has good takes.

• 46:52Ryan Sean Adams?

  Like, one of his takes was, um, yeah, he does, but good take here. One of his takes was like, hey, you are, crypto natives are dramatically underestimating influencer coins.

• 47:03David Hoffman?

  Yeah.

• 47:03Ryan Sean Adams?

  And what is Elon doing is he's propping Doge up as an influencer coin. It's kind of like his coin.

• 47:09David Hoffman?

  Elon coin, yeah.

• 47:10Ryan Sean Adams?

  Yeah. And like, the market doesn't necessarily care about like Bitcoin maximalism or decentralization. They very much care what Elon buys and what he says. So they're gonna go to whatever he says. I don't know. What, what's your take on that? Do you think we're, we're underplaying in crypto influencer coins? You think they have a huge future here?

• 47:30David Hoffman?

  Yeah. I mean, at the end of the day, crypto needs help going mainstream. Like, we can't do it ourselves. We can try and bootstraps our, our way into existence and like, it'll work, but really slowly. And we all want crypto to be here like tomorrow, right? So we do need influencers to come and say like, oh yeah, crypto's dope. And, and Elon Musk is perhaps the world's biggest influencer. And right now, he's saying crypto's not dope. And so we're all like, fuck!

• 47:54Ryan Sean Adams?

  Yeah, that's that, man. That's Elon.

• 47:56David Hoffman?

  Here's my take.

• 47:57Ryan Sean Adams?

  Fuck! Yeah. There you go. Not a kid-friendly show, not this week.

• 48:02David Hoffman?

  Sorry.

• 48:03Ryan Sean Adams?

  Let's go to another take. Oh, this is Elon again. I'm just kidding.

• 48:06David Hoffman?

  Yeah.

• 48:07Ryan Sean Adams?

  We're done with Elon.

• 48:07David Hoffman?

  So many, so many Doges, yeah.

• 48:09Ryan Sean Adams?

  All right, another take. Polygon, rise of Polygon. What does this mean? Sushi Swap passed 500 million total locked value on Polygon this week. That's just, that's just one. Delphi Digital released a report about Polygon as the Swiss Army Knife of Scaling Solutions, and emphasized how fast it's growing, how well it's doing, how many DeFi apps have migrated to it. This is what the Polygon ecosystem looks like. We've got to talk about the rise of Polygon, David. So what's happening here?

• 48:44David Hoffman?

  Yeah, so the Swiss Army Knife of L2s is a really interesting take. And my buddy, Michael Wong, the Chief of Culture at Bankless, made this really good take that, you know, there's a reason why Loopring has had troubles trying to get out the door. And it's because Sushi Swap can't build on Loopring. Loopring has to build its own liquidity.

• 49:06Ryan Sean Adams?

  It's not open.

• 49:07David Hoffman?

  It's not, it's not open, right? And so Sushi Swap comes into Polygon, just deploys itself on Polygon. And like, oh, like, we take this big project on AL1 and just we put it on the Polygon. And all of a sudden, that makes sense. That makes a lot of sense. Shout out to Michael Wong. Here he is.

• 49:22Ryan Sean Adams?

  Oh, hey, Michael Wong. What are you doing? Is that real? Did that just happen?

• 49:27David Hoffman?

  That really does happen. He's in the back. And so, and that's kind of like, this gets into a broader conversation as what really Polygon is, right? It's not like a specific L2. It's a Swiss Army Knife of L2s.

• 49:39Ryan Sean Adams?

  Well, I gotta stop you here. I gotta stop you here, though, okay? Because L2, we've defined this before.

• 49:43David Hoffman?

  Sure.

• 49:44Ryan Sean Adams?

  L2 is secured by an L1.

• 49:47David Hoffman?

  Sure.

• 49:48Ryan Sean Adams?

  So an L2 on Ethereum would be secured for the economic security and the underlying asset of the L1 of ETH. And Polygon is not quite that. It does checkpoint back to Ethereum, but it is more like a sidechain. At least, they have a Plasma version, but that's, that's not really what's, what we're talking about here. It's their proof-of-stake version, which has like a set of validators. So it's almost like similar to maybe Cosmos, similar to a more...

• 50:18Ryan Sean Adams?

  I guess distributed version of Binance chain even, right? It does checkpoint to ETH, so there are some differences. But like, you were saying layer two, would you amend that? It's not, because it's not really a layer two, is it?

• 50:34David Hoffman?

  Yes, you are technically correct, and that is the correct way to view things. And that's the informed way to view things. I will not amend this because I'm going to put on my first cycler hat and my crypto novice open like, like, non-informed perspective and which is going to be the mainstream perspective. Right? So they come on to Ethereum and they say like, oh, gas prices, those really suck. How do I get rid of those? Some people got rid of those by going to Binance Smart Chain and was a different chain. Other people are going to get rid of those by going to Polygon. And this is where the question of does decentralization really matter? Can actually, I think, be much more fitting because the difference between optimism and Arbitrum, which are like holistic, complete, uncompromising L2s and Arbitrum and Polygon?

• 51:20David Hoffman?

  Maybe that difference is less and maybe we are ready to sacrifice decentralization, not because we're sacrificing it at the base layer, but we, and we, but we're okay with sacrificing it at the L2 layer, the L2 layer. And so to some degree, if Polygon is not a true L2 and it's actually just a sidechain that checkpoints to Ethereum, to some degree, if it just works and it's not maximally decentralized in the way that, you know, other L2s could be, if it just works and everyone gets their funds back and nothing breaks, that's great. That's fine. Call it an L2 at that point in time.

• 51:53Ryan Sean Adams?

  Okay. I gotta take the other side of this for a second. Would you say the same about Binance chain? Right? Binance chain has had definitely some transaction volume. There are definitely some applications on Binance chain that are doing well. Definitely lower gas fees. What's, is there a difference between Binance chain and Polygon in your mind?

• 52:13David Hoffman?

  Yes, there's two main differences. One, you have to go through Binance to get to Binance Smart Chain. So that, that is a big change. Like the process of actually moving your funds there actually literally goes through, I think that's true, literally goes through a centralized service.

• 52:26Ryan Sean Adams?

  Well, let's say there was a bridge.

• 52:28David Hoffman?

  Yeah, okay, so say there is a bridge. Okay. One is about the incentive misalignment between Binance Smart Chain and Ethereum. And in stark contrast, the attempted incentive alignment between Polygon and Ethereum. The Polygon team, Mihailo, Sandeep, Ethereum bulls, like, want to help Ethereum. They are politically aligned with Ethereum. And Polygon is trying to become constructive in a way that's politically aligned to Ethereum. On a technical level, that's involved with checkpointing to Ethereum. And that kind of removes that centralization vectors over time. Not perfectly, but over time, it removes that centralization vectors by checkpointing. But also, just, there's a conversation of allowing Ether to be gas on Polygon.

• 53:10David Hoffman?

  And so, there's the Matic token, which you stake to be part of the consensus level 2 Matic, which is what separates Matic from Ethereum and makes a division. But what they are considering is using Ether as the consumable gas asset on Polygon. And so, they are, and I used this metaphor yesterday when I was talking to Mike. It reminds me of like two kingdoms back in the old times. And one kingdom's bigger than the other. And one kingdom owns the smaller kingdom and makes the smaller kingdom pay taxes to the bigger kingdom. Ethereum is like, "Oh, do you want our blessings? You use our money as the native fee payment currency on Matic, right? Like, you better use our money." And so, Matic is giving up. And it's like, "Oh, Ethereum, please like us.

• 53:54David Hoffman?

  We want you to like us. You know how we will get you to like us? We will use your money as the consumable, transformable asset. And we will give up that role of the Matic token to Ether, the token." Which just is making a, and so, really, what Matic is doing is optimizing. It's making a hybrid bullish position between Matic bulls and Ether bulls. And trying to blend Matic community and Ethereum community. And that's starkly different than Binance Smart Chain. Some of those things- And so, to tie this off, the main difference between Matic and Polygon and Binance Smart Chain is political alignment with Ethereum. And as we say at the end of the day, it all collapses down to layer zero, which is people.

• 54:35Ryan Sean Adams?

  So you're saying even though some of those things haven't happened yet, like ETH being used as a native fee, for instance, and I know, by the way, Polygon has other plans to roll out more Layer 2-like solutions, right? Polygon is kind of a Swiss Army knife. Proof of Stake chain is just one approach. They plan to have kind of a roll-up based approach in the future. But what you're saying is, those plans, even though they're in the future, like, because they are socially and politically aligned with Ethereum, then that's why you trust Polygon more than you would Binance Chain. It was like CZ is not socially or politically aligned with Ethereum.

• 55:17Ryan Sean Adams?

  He is socially and politically aligned with Binance, the company, and BNB token holders, maybe. But like, if that's the case, David, is this you being like, and again, I'm playing devil's advocate, right? I'm like, I like what's going on, but is this you being tribal about things? Like, some people would say, David's saying Polygon good, but Binance Smart Chain bad? Just, like, there's a contradiction here. What would you say to that?

• 55:49David Hoffman?

  I think the contradiction is not there. And I think Polygon good, Binance Smart Chain bad, is that, you know, Binance is bankers and Polygon is attempting to be as aligned with the values, be an extension of the values of Ethereum as possible. I don't, I think there's something to say that the absolute insane rise of Matic token over the past month has occurred simultaneously with the rise in Ether, the asset, over the last month. People rotating into Matic is a fractal off of people rotating into Ether. And it was a political rotation both ways, right? Like, people understanding that Ethereum is the place to be. Also, Matic is the Binance Smart Chain killer. And so while perhaps they are fundamentally constructed similarly, even though checkpointing

• 56:33David Hoffman?

  is actually a very big point about Polygon.

• 56:35Ryan Sean Adams?

  There are some differences, for sure. I totally agree.

• 56:37David Hoffman?

  But the difference is, is that Binance Smart Chain is a banker's chain through and through, and I'm pretty sure consensus is permissioned, whereas Matic consensus is not permissioned with a Matic token. And overall, they are committed to Ethereum values, and that's really what the through line of Polygon is. And so that's a very big difference.

• 56:56Ryan Sean Adams?

  The big take here is something that we've, I think, predicted on Bankless is actually coming true, that's that sidechains like Binance Smart Chain aren't actually competing against Ethereum. They're competing against other Ethereum sidechains or Ethereum's layer two. That's what they're really competing against. And we've seen this massive rise in Polygon as it's kind of got its its feet at the expense of not Ethereum, but at the expense of Binance Smart Chain, right? Like, a lot of that activity is starting to leak over to to Polygon and, you know, at the expense of Binance Smart Chain. So it's like two layer twos, two sidechains competing against one another. And Ethereum is, Polygon is starting to capture that flow from Ethereum now. All right.

• 57:41Ryan Sean Adams?

  I think we have some takes on Polygon a little bit later that we'll get back to. But let's get to some other Ethereum stuff. Speaking of billionaires, Mark Cuban, this dude on Twitter has been stalking Mark Cuban's ETH address, which is kind of cool that you could do that, I think.

• 57:57David Hoffman?

  Also, Mark Cuban didn't really know that you could do that when he first got into Ethereum.

• 58:01Ryan Sean Adams?

  That's true. I think he knows now, though, right?

• 58:02David Hoffman?

  Yeah, he does know now.

• 58:04Ryan Sean Adams?

  But what's Mark Cuban doing? Well, maybe he's listening to Bankless Podcast, maybe he's reading the newsletter because he's fooling around with Alchemix, which we're big fans of.

• 58:12David Hoffman?

  Right after the Never Sell Plan, which had Alchemix front and center.

• 58:16Ryan Sean Adams?

  Look at this, he's staking. Hedjic?

• 58:21David Hoffman?

  Yep.

• 58:22Ryan Sean Adams?

  Some advanced DeFi stuff.

• 58:25David Hoffman?

  200 ether to make your DAO vault? Wow.

• 58:27Ryan Sean Adams?

  Look at that, dude.

• 58:28David Hoffman?

  Nice. Cool. Good job. Good job, Mark Cuban. Proud of you.

• 58:31Ryan Sean Adams?

  That's how you do it. If you're a billionaire.

• 58:33David Hoffman?

  Sorry, sorry for stalking you, but we're going to keep on doing it.

• 58:36Ryan Sean Adams?

  Someone's going to if we don't. All right, let's talk about this, too. Speaking of big money, all right. Arc Invest, massive fund. They've been primarily Bitcoin focused to this point, but it's the fund Chris Berninski came from. They have finally started to purchase, it is official, ETH. Yep. Small increment now, 20 million worth. But David, I remember not too long ago, we had people on the Bankless Podcast who were debating us. Ryan Selkis was debating us. About institutions never purchasing ETH. Like funds like ARC wouldn't purchase ETH. People like companies wouldn't put it on their balance sheet, wouldn't hold it in their treasury.

• 59:20Ryan Sean Adams?

  And like now, not less than six months later, it's starting to happen. I feel like ARC is a big move in that space. Now, they're not cussing it, they're buying it through grayscale, but that's how they purchase Bitcoin as well. Uh, so it's happening, man.

• 59:34David Hoffman?

  And it's only 20 million dollars, but I mean, the bigger signal is that it's at all, right? Um, that's really the new paradigm shift here.

• 59:42Ryan Sean Adams?

  I think it is. Uh, we should have Kathy on the podcast, be good discussion.

• 59:46David Hoffman?

  Kathy, please come.

• 59:50Ryan Sean Adams?

  eBay, opening up its NFT, uh, opening up its platform to NFT sales. This is like OG Web 1.0 meets crypto, kinda cool to see.

• 1:00:00David Hoffman?

  Slightly disappointing that they didn't pick Ethereum, they picked a WAX blockchain, which is a 2017 project. But, uh, you know, if they're getting into NFTs, uh, if, if you got, if you're, if you're, if you believe in the protocol seeing thesis, you end up at Ethereum. So I'm just happy they're getting into NFTs.

• 1:00:16Ryan Sean Adams?

  There you go. Let's talk about this. This is in Bitcoin news-ish. Bitcoin news-ish, this is crypto news. BlockFi botched some promos with an outsized Bitcoin reward payment here. What, what happened with, uh, with BlockFi?

• 1:00:31David Hoffman?

  Right. So BlockFi crypto bank, crypto lending platform like Compound or Ave, where you deposit assets and you get yield on them. Uh, they pay out, uh, they pay out USDC payments, obviously in USDC. Something got messed up and when people hit the withdraw USDC button, instead of getting USDC withdrawn, they got Bitcoin withdrawn. So instead of one USDC, they got one Bitcoin. Uh, and that's a big difference, uh, in, in value. Uh, and so I think they, I, some people got two Bitcoins, some people got seven Bitcoins, like a decent number of Bitcoins accidentally got sent out by BlockFi. And there was one post on Reddit or on 4chan, I saw of one of the recipients of one of these Bitcoins and they were like, not your keys, not your crypto, like thanks for the Bitcoins. And I, and which were like, not recommended. If this was, if one of you guys got.

• 1:01:16David Hoffman?

  Bitcoins like you're don't send those Bitcoins away like the meat space nation state regulation police are coming after you.

• 1:01:23Ryan Sean Adams?

  I mean to get on block five.

• 1:01:24David Hoffman?

  Those transactions are getting reverted. Yeah, you're right. KYC is on block five. They know who you are. You know that this is a mistake.

• 1:01:30Ryan Sean Adams?

  Where you live.

• 1:01:31David Hoffman?

  Yeah, like this is I think an interesting example of just like this is going to get rolled back, not at the protocol level, obviously, but at the meat space level like those Bitcoins are getting sent back.

• 1:01:41Ryan Sean Adams?

  Yeah, yeah, like unless you want trouble with the nation state, which which you don't like they have your passport on file. Anyway, too bad for block five on that one. I think it'll get resolved. Just a little snap through there. Let's talk regulation.

• 1:01:56David Hoffman?

  The through line here is that protocols don't mess these things up.

• 1:02:01Ryan Sean Adams?

  Protocols? Yeah.

• 1:02:03David Hoffman?

  Ave doesn't accidentally withdraw Bitcoin when you requested to withdraw USDC.

• 1:02:07Ryan Sean Adams?

  That is true. That is true. It's as long as the code is written well, they don't mess this up.

• 1:02:13David Hoffman?

  That would be an interesting bug.

• 1:02:15Ryan Sean Adams?

  All right. So this is part of the China flood, I think, David. So this is regulatory three self regulatory organizations within China reiterated a 2017 stance on crypto. Here's what they said. These are bank regulators in China. Basically, they said that crypto is here's the quote severely damaging the people, the safety of people's property and disrupting financial stability. What's interesting about this is not that this is coming out of China, but I think that this is something that bankers in all nation states will say. The problem with crypto is it's damaging safety of people and it's disrupting financial stability. We're going to hear that reiterated

• 1:02:59Ryan Sean Adams?

  over and over again when nation states and bankers take a negative stance on crypto. So it's coming out of China. Wouldn't be surprised if we hear it in other jurisdictions too.

• 1:03:09David Hoffman?

  If you hear headlines like that, what you should actually hear is we have all the control. We don't like these things that take away control from us. Please, here's some reasons why you should keep us allowing to have control over your lives.

• 1:03:22Ryan Sean Adams?

  Exactly. That's what's really going on, but they'll say they're protecting you. Let's talk about some more banks, David. Bank of America leaned into blockchain to speed settlements. What's the quick take here?

• 1:03:33David Hoffman?

  I love leaned into blockchain as if blockchain is a thing. What they actually mean is Ethereum. That is actually what's going on. And so they are actually selling, settling securities on the Ethereum blockchain. So that's pretty cool. Pretty cool.

• 1:03:47Ryan Sean Adams?

  Yeah, what's cool about this is they partnered with a crypto bank to do it, Paxos to do it. So it's like, I think this is what's going to happen. It's legacy banks. They'll partner with Coinbase, they'll partner with Paxos, and they'll roll out something cool. This might be cool. Securities on chain. We've been promised that for a while. Maybe they could do something in this space. Let's go to Wells Fargo, our favorite. They, Wells Fargo is instituting some onboarding to crypto for clients.

• 1:04:15David Hoffman?

  Yeah, I think they have some Bitcoin fund offerings or, and the thing is like, it's only available to wealthy clients, which is just peak, peak banks, peak banks. Bitcoin only fund for wealthy, only Wells Fargo customers. Nice job, Wells Fargo.

• 1:04:32Ryan Sean Adams?

  Two trillion in assets, but, but only for wealthy clients, like as if we need Wells Fargo to help us buy crypto, right?

• 1:04:39David Hoffman?

  Too slow.

• 1:04:40Ryan Sean Adams?

  Too slow. Sorry. Moving on. Wells Fargo. Bye bye. You think they heard about our t-shirt, David?

• 1:04:47David Hoffman?

  Oh, I'm sure they're sweating. They are just, I'm sure corporate Wells Fargo is just sweating at the t-shirts we had.

• 1:04:53Ryan Sean Adams?

  Some bad stuff's happening on Binance Smart Chain, by the way. I haven't kept up with all the technicals here, but here's one bad thing. It seems like the network is increasingly unstable. What's going on here?

• 1:05:03David Hoffman?

  Yeah, so we have Crypto Ultron, who says he runs a BSC node. He says, "The network is constantly forking uncontrollably for every block that is part of the main chain. There are around five uncles." So five accidental forks going on before the blockchain can find consensus again. Several validators are running subpar hardware and cannot keep up with the rest of the network. This is, first off, just a tweet, so unverified, but we've been covering topics like this of the massive amount of state blow over the last few weeks. And so this was predictable. And so that's kind of why I feel comfortable talking about this here, even though it's unverified is like this is the predictable logical conclusion of what happens when you just fork geth and the Ethereum one client add 50 million gas instead of 15 million gas and

• 1:05:46David Hoffman?

  and and cut block times down from 13 seconds to two seconds. You just block changes grows too fast. And so now everyone is having consensus issues because there's too much data being going around and no one can keep up with things. This is the logical conclusion of the Binance Smart Chain. It's finally coming to a head. CZ, if you're listening, here's how you fix this. I'm going to tell you how to fix this.

• 1:06:07David Hoffman?

  Come up with a checkpoint where one single block that was perhaps yesterday's block is just the new genesis block of Binance Smart Chain. Delete all of the history and go from there. Problem solved. You're just, all you have to do is do that every two months and come up with a checkpoint and then you can keep going and and every single two months, you're going to lose consensus, but you just checkpoint, delete the history and keep going. Problem solved.

• 1:06:29Ryan Sean Adams?

  Is this DeFi, sir?

• 1:06:31David Hoffman?

  Send me my BNB tokens, please.

• 1:06:34Ryan Sean Adams?

  It's funny. The developers of geth predicted that this would happen. Here it is. It's happening.

• 1:06:39David Hoffman?

  Shocker.

• 1:06:40Ryan Sean Adams?

  Let's do some drivebys. I'm gonna, I'm gonna start with this one, David. Let's go back and forth. MicroStrategy has acquired another 10 million in Bitcoin. Another week, another MicroStrategy dollar cost average in from Michael Saylor. No wonder he is the save savior of Bitcoin right now. That's drive by one. What's this one?

• 1:06:59David Hoffman?

  Urn at Finance sees at the dip and buys back 1.47 million dollars of YFI tokens, doing the same thing as as Michael Saylor. And the funny thing is they have these same similar announcements about like Urn, Urn bought the dip, you know, added to the treasury. The other cool take on this is that Urn is at the, you know, kind of the team layer, the team behind Urn is now executing on a MakerDAO style tokenomics value capture mechanism where they're using funds generated by Urn to buy back YFI off the secondary market and withhold it from the secondary market. It's a buyback and burn model, just like MakerDAO.

• 1:07:33Ryan Sean Adams?

  Cool community there. Let's go to the next one. Alchemix Audit, it finally came. So Alchemix has been a really cool protocol, but I gotta be honest, David, I was, I was sweating it. I don't think I have the tweet up, but I was sweating it when Alchemix was, was getting all of this total locked value locked inside of it and. There hadn't been a completed registered audit, right? Now it's come. I think that will give some folks

• 1:07:58David Hoffman?

  ease of mind.

• 1:07:58Ryan Sean Adams?

  will help them breathe a sigh of relief. Although, an audit does not mean that the thing is unhackable. It is a good sign that they are now audited. What's the next one here, David?

• 1:08:09David Hoffman?

  Usually, we wouldn't really report on audits, but literally, everyone was like waiting for the Alchemics audit. So that's why I reported it. The next one is $1 billion now stored in Argent wallets. Congratulations to Argent. They have also been innovating at the transaction level. I think pooling transactions together, either via mining pools or just other user customers together. I don't know, I was talking to Mike, he knows about it more than me. But they have some innovations with reducing gas fees out of Argent, which is always helpful because they're a smart contract wallet. Therefore, gas fees are always higher in smart contract wallets. And then they say, yeah, they'll end with Layer 2 is on the way. #ethsummer. I like that hashtag.

• 1:08:44Ryan Sean Adams?

  Yeah, I think that's because maybe it's coming in summer. We'll see. Diversify, $5 million round. Diversify is a DeFi exchange. They are built on Starkware's Layer 2. This is a true Layer 2 solution. They're closing some more funding, which will help them build out their exchange. Love the work that they're doing. Congratulations to that team.

• 1:09:09David Hoffman?

  Next up in the funding round, DeFi Dashboard Zapper raises $15 million to build on platform App Store? App Store? What are the plans coming from that? Wow, interesting. First off, Zapper is absolutely fantastic. That's where I see the, just a report of all of my wallets and all my little DeGen activities. They also have Polygon interacted with there. And so they also just ship so fast. So really excited to see what they can do with this $15 million. Excited to see what an App Store is.

• 1:09:39Ryan Sean Adams?

  Yeah, absolutely. All right, guys, we are going to come back with some hot takes and of course, the meme of the week. But before we do, we want to thank the sponsors that made this episode possible.

• 1:09:48David Hoffman?

  Bankless is proud to be supported by Uniswap. Uniswap is a new paradigm in asset exchange infrastructure. Instead of a cumbersome order book system where trades are matched with other humans, Uniswap is an autonomous piece of software on Ethereum, which is what Ryan and I call a money robot. No human counterparties or centralized intermediaries, just autonomous code on Ethereum. Input the token you want to sell and receive the token you want to buy. Something brand new in the Uniswap ecosystem is the Uniswap Grants Program is now accepting applications for grants. We have been saying this for a while and we'll say it again. DAOs have money and they are in need of labor. If you think that you have something to contribute to the Uniswap DAO, apply for a grant to Uniswap.

• 1:10:32David Hoffman?

  Just look at the size of the Uniswap treasury. It's almost $3 billion. This mountain of capital is looking for labor. Do you have something of value to contribute to the Uniswap DAO? No matter how big or small your idea is, you can apply for a UniGrant at unigrants.org and help steer Uniswap in the direction that you think it should go. That's exactly what we did to get Uniswap to be a sponsor for Bankless and you can do the same for your project. Thank you, Uniswap, for sponsoring Bankless. Gemini is the world's most trusted cryptocurrency exchange. I've been a customer of Gemini since I first got into crypto in 2017 and it's been my main exchange of choice to make my crypto buys and sells. Gemini is available in all 50 states and in over 50 countries worldwide and on Gemini

• 1:11:16David Hoffman?

  there are markets for over 30 various different crypto assets, including many of the hot DeFi tokens. And it's one of the few exchanges that has liquid DAI markets. Gemini just launched their Earn program where you can earn up to 7.4% interest on 26 various crypto assets. If you're tired of paying fees in DeFi or you don't want to worry about DeFi exploits but you still want to earn interest on your crypto assets, Gemini Earn is the product for you. Another product I'm stoked to get my hands on is the Gemini Crypto Back Credit Card, which gives you 3% cash back on all of your purchases but paid to you in your preferred crypto asset. When I get my Gemini credit card, I'm going to make sure that I get my cash back in ETH, so whenever I buy something, I get a little bit of ETH bonus back to me at the same time.

• 1:12:01David Hoffman?

  You can open up a free account in under 3 minutes at gemini.com/goBankless. And if you trade more than $100 within the first 30 days after signup, you'll be gifted a free $15 Bitcoin bonus. Check them out at gemini.com/goBankless.

• 1:12:17Ryan Sean Adams?

  Alright David, let's start with the takes. DeFi Summer Round 2, this is Andrew Kang with this take. What is he talking about here? What is DeFi Summer Round 2? How's it gonna be different?

• 1:12:27David Hoffman?

  Right, so DeFi Summer Round 1 was all about yield farming, liquidity mining, token distributions, events to people that are using these protocols. And so what Andrew Kang is talking about is the game plan for DeFi Summer Round 2. We're not just gonna repeat history, because that's not how it works. We're going to rhyme history. And so the way that history rhymes with this upcoming DeFi Summer Round 2 that he's trying to illustrate is that instead of applications on Ethereum doing yield farming, instead it's going to be L2s doing liquidity mining incentives, distributing tokens on L2s. That's currently what's going on on Polygon. You can get Matic rewards by depositing liquidity into AVE. You can get Matic rewards by depositing liquidity into SushiSwap.

• 1:13:10David Hoffman?

  So many different ways are being subsidized and incentivized by the Polygon team via Matic token distributions. And so just go use Matic stuff, you get Matic rewards. And that's just, and they got me with this. I put my Matic on Matic L2, deposited into AVE, realized that the yields were insane. So I deposited Matic into one side of AVE, borrowed Matic from the other side of AVE, redeposited that, just kind of wound up the position. It's actually not leveraged, because my borrowing is denominated in what I'm lending. And so that's much more safe. Again, do your own research. Getting a decent amount of Matic rewards. And now I just find myself with a decent size of my portfolio on the Polygon L2. They got me. They got me with the incentives. I got got.

• 1:13:52David Hoffman?

  And we're about to have optimism and Arbitrum, they're probably gonna have a token, because why the hell wouldn't you have a token? How else are they going to incentivize people to come onboard and use their stuff? They're going to, and they also need to distribute their tokens.

• 1:14:04Ryan Sean Adams?

  Who's funding these incentives, David? Is it the L2s themselves? Or is it the L2s plus the protocols? Is it AVE plus Matic?

• 1:14:13David Hoffman?

  Right, it works both ways, right? And so the L2s are incentivizing the apps, and the apps are incentivizing the people. It all works, it all works out. And so you thought DeFi Summer was crazy with yield farming opportunities? What happens when you add a whole entire new dimension, which is the L2? So the DeFi Summer Round 2 is going to be underpinned by just yield farming out of the actual base layer, the L2 itself, not just the application. And then also the applications, right? Absolutely crazy. Really interesting take from Andrew Kang.

• 1:14:44Ryan Sean Adams?

  Guys, I think this is one of those alpha takes. This is one of those opportunities to get ahead of things because what Andrew's saying, what David is saying feels absolutely right to me as well, right? The reason we saw DeFi summer last season was because Compound issued a governance token and it worked so well that all of the other DeFi protocols did. By the end of September, Uniswap didn't even have the intent to launch a uni-token. This is what Hayden Adams said when we had him on, but did anyway. Why? Because crypto economic incentives worked so well. Now you've got DeFi protocols who continue to have this incentive to push users to layer twos, plus you have the layer twos themselves that are locked in this competitive battle

• 1:15:28Ryan Sean Adams?

  to gain traction, gain liquidity and gain users. So optimism, Arbitrum, Polygon, they're all going to want to incent users and incent liquidity. So token summer, it's about summertime too. I don't know. That feels like a great take and a little bit of alpha for you guys. Get prepared for the possibility of DeFi summer round two. Let's go to this next take. David, this was Dave Portnoy. Man, this almost got overshadowed by everything else as the market fell out. But like, is this the top signal? He introduced what he calls his shitcoin announcement and he got behind this coin called Safe Moon, has a whole video about it.

• 1:16:06David Hoffman?

  He did?

• 1:16:06Ryan Sean Adams?

  Kind of funny? Yeah. Yeah. So you didn't see this?

• 1:16:10David Hoffman?

  No, I didn't see this.

• 1:16:11Ryan Sean Adams?

  Oh, my God. Yeah, I'm like, I almost feel conflicted about actually talking about this because it gives more attention to the thing that he wants attention for. But he's basically saying, I am behind Safe Moon now. I've bought it. You should buy it to jump into my influencer Ponzi scheme, right? It's like, it's like his version of Elon's Dogecoin is Safe Moon here.

• 1:16:40David Hoffman?

  And he put this out, this tweet out on the 17th and then we just absolutely had the most violent dump two days later. Perhaps, perhaps that was the quote unquote top.

• 1:16:50Ryan Sean Adams?

  Here's my take on this, man. Like, I am not here for meme coins. Like, I'm just not here for this shit. Like, so, being a meme coin, and by this I mean like, just being sort of an influencer coin, or like, not having any value proposition beyond the value proposition of somebody else is going to buy this thing in the future, right? Which, I don't discount, there's some value there.

• 1:17:15David Hoffman?

  Right. Only if it's underpinned by fundamentals.

• 1:17:18Ryan Sean Adams?

  There's just, it's, it's, it's not enough for me anymore, right? Like, I feel like everybody chasing these meme coins, by the way, Bitcoin included at some level. It's the most successful meme coin. I mean, they're playing in the kiddie pool. And like, we're out here exploring the ocean, dude. Like, I, what is Ether? It's so much different. Yes, there's a meme coin aspect to it, but it actually generates transaction fees. It's a capital asset, right?

• 1:17:42David Hoffman?

  Which is the meme, by the way.

• 1:17:44Ryan Sean Adams?

  Which is the meme. It's making the world more centralized. It's making the world more bankless. What is Safe Moon doing? Is Safe Moon doing that? Is Doge doing that?

• 1:17:52David Hoffman?

  Right.

• 1:17:52Ryan Sean Adams?

  Like, dude, people just buy an whole Doge, right? Like, it's not enough for me. It's not why I'm here. I'm done with meme coins. I'm done with influencer coins. I'm still bullish on Bitcoin, right? Like, because there is a place for some of these successful meme coins. But for me, it's totally not enough. And this market and this whole industry will be hollowed out by meme coins if, if that is the only thing we're producing for the world. Fortunately, we're not. It's just the thing that media likes to shine its light on and give attention to at this moment in time, but it's kind of, kind of annoying, kind of frustrating. Like, I don't hate it. Like, people can do whatever they want. It's free, open market.

• 1:18:31Ryan Sean Adams?

  People can buy meme coins if they want. I don't hate it. It's just a shallow pursuit to me, and it's not enough.

• 1:18:38David Hoffman?

  Right.

• 1:18:38Ryan Sean Adams?

  Not enough.

• 1:18:39David Hoffman?

  You gotta have substance. At the end of the day, there has to be something real when you collapse down and kill the meme. There has to be something real there. Good memes are built on real foundations.

• 1:18:48Ryan Sean Adams?

  Absolutely. Good memes have to be validated. Elon Musk is now blowing up the Wall Street case for Bitcoin. Here's the take here. It's basically that if Elon's tweets can evaporate like hundreds of millions in crypto market cap, right, it's not an institutionally ready asset. It's not institutionally great. That's basically the Bloomberg take here. What do

• 1:19:12David Hoffman?

  you think about that? That's a fair take. That's a fair take, but also that is kind of the future. The future, in my opinion, here's a, standing outside of crypto, the future is chaotic. The next 10 years is chaotic. The next 10 years is volatile. And so you gotta learn to play in the game. Like, this is not your world anymore, institutions. We are finding new institutions. So like, you better get with the change.

• 1:19:34Ryan Sean Adams?

  But also, what does a statement from Jerome Powell do to markets?

• 1:19:39David Hoffman?

  Yeah.

• 1:19:40Ryan Sean Adams?

  Jerome Powell can make a statement and evaporate-

• 1:19:42David Hoffman?

  Jerome Powell's the world's biggest influencer.

• 1:19:45Ryan Sean Adams?

  Right?

• 1:19:46David Hoffman?

  Mm-hmm.

• 1:19:46Ryan Sean Adams?

  Are institutional influencers really that much different?

• 1:19:50David Hoffman?

  Mm-hmm.

• 1:19:51Ryan Sean Adams?

  I don't know. Jerome Powell has this power and people think it's normal. It's just like, yeah, Jerome, like, let's, let's watch everything he says.

• 1:19:57David Hoffman?

  Mm-hmm.

• 1:19:58Ryan Sean Adams?

  Just a different set of influencers.

• 1:20:00David Hoffman?

  Yep. Institutional influencers, approved, institutionally approved influencers.

• 1:20:05Ryan Sean Adams?

  What are you excited about, David?

• 1:20:07David Hoffman?

  I am excited about the second half of the bull market. I said it earlier, in 2017, I got into the world of crypto after I watched Ether go up to $430 and then fall down to $135. And I was like, whoa, I gotta buy now. And that was my first entrance. That was my first real buy of Ether.

• 1:20:24Ryan Sean Adams?

  A dip.

• 1:20:25David Hoffman?

  A dip. Well, I also bought the top earlier. Don't have a doubt on that. I'm a crypto novice. I'm not automatically buying the dips. I'm definitely buying the tops the first time around. So I would like to just put myself, pat myself on the back. So this is my crypto birthday. I went, I went one full cycle around the crypto markets, you know, four, four years around. I feel like I've gone one, one full crypto revolution. And so here I am.

• 1:20:48Ryan Sean Adams?

  A cycle around the sun. Well done.

• 1:20:49David Hoffman?

  Yeah. And so like, I kept on talking about like how there's first cyclers and technically I was still on my first cycle. As of this dip, this massive dip, I now consider myself a two-cycler.

• 1:20:59Ryan Sean Adams?

  Congratulations.

• 1:21:00David Hoffman?

  That's what I'm excited about.

• 1:21:01Ryan Sean Adams?

  Happy second birthday, sir.

• 1:21:02David Hoffman?

  Thank you.

• 1:21:03Ryan Sean Adams?

  Happy, happy second birthday.

• 1:21:04David Hoffman?

  First birthday. First birthday, because I was zero and now I'm one.

• 1:21:07Ryan Sean Adams?

  You're zero years old. You're one. This is what I say, like, it's like crypto is like three-year-olds teaching two-year-olds things. Like, we're all so early in this, right?

• 1:21:17David Hoffman?

  Ryan, what are you excited about?

• 1:21:18Ryan Sean Adams?

  I, I, I want to riff off that, man. I'm excited about the dip. Like, sharing a dip with all of you fine people is actually exciting, right? Like, this is where you earn the crypto that you hold. It's, it's very much a battle against, like, your lizard brain, against all of your emotional reactions.

• 1:21:36David Hoffman?

  Builds character.

• 1:21:38Ryan Sean Adams?

  It does. The volatility in crypto will throw you for a loop if you let it, right? But if you can take a long-term mindset, if you can hold through these dips and think about, like, long-term horizons, right?

• 1:21:53Ryan Sean Adams?

  I don't know. It's actually kind of a zen-like experience.

• 1:21:55David Hoffman?

  Yep.

• 1:21:55Ryan Sean Adams?

  There's a little, like, Chris Berninski out there, you know? Like, that guy's always zen. And, um, you know, he's zen during the dips. He's zen during the bull runs. He's zen all of the time. And, uh, you, you achieve that with practice. And I'm excited to go through it. I know many, many people are on their first birthday. They're unicyclers. And, uh, like, this is all part of the game, guys. This is completely normal. It's all part of the game.

• 1:22:20David Hoffman?

  Yeah, crypto is, it's really a lesson in how well can you control your brain? How well can you control your emotions? Because markets are emotional. Markets are by definition emotional. And when they are so incredibly crazy in crypto, that's by definition crazy emotions. And I remember when I was first getting into crypto, I was like, oh, that token pumps, gotta go chase. Oh, that token pumps, gotta go chase. FOMO, FOMO, FOMO, fear, fear, fear. Oh, dip, is it over? It's like, shit, I don't know.

• 1:22:42Ryan Sean Adams?

  Yep.

• 1:22:43David Hoffman?

  And then this, this time around, I'm like, eh, like, congratulations to whoever won on that, on that pump. I'm gonna wait my turn. Like, no, I'm not gonna pay that gas fee. I'm just gonna sit back. I got my bags, I'm comfy. Uh, oh, a dip? Oh, fuck, wow. You know, ouchy, that hurt. Um, let's, let's keep going, though. Uh, you know, much more zen this time around. And so I hope all, all the people who are going through these crypto markets are also practicing mindfulness at large. Because in, in, in separate from crypto, it's a good skill to have. But it also is a very strong skill to make you more money in crypto markets, if you can be mindful.

• 1:23:14Ryan Sean Adams?

  Well said. All right, with that, let's go to meme of the week, David.

• 1:23:16David Hoffman?

  Meme of the week. Emotions.

• 1:23:19David Hoffman?

  This is awesome. It's not even a complete meme because the text is in the tweet itself. I don't even care, it's so good. Here's Niraj, I don't know what GM, he starts saying GM, I don't remember, I don't know what that means, but he goes, "Remember, you can't spell crypto without cry."

• 1:23:34David Hoffman?

  And he's got a teary eyed cat with a thumbs up. Sad kitten. Yeah, sad, sad kitten. It's so good. Oh, it's GM sounds for good morning, thank you Mike. Okay, good morning, remember you can't spell crypto without cry, that's awesome. I was feeling it this week a little bit. Alright, what's this one? Documenting Ethereum, great meme account. Yeah, second meme of the week, you get two this week. Two. Now, we're supporting our listeners, we can't give them too many times. We have the grid of gravitational waves, right? And so we have the sun and it's pulling down the gravity of the gravitational grid. We have a neutron star, it's even more. And then we have the ETH price, just going absolute tanking and then back up. And that's what a dip looks like. And that's sometimes how you can try and call a bottom. Very good.

• 1:24:17David Hoffman?

  Ending on a happy note, of course guys, none of this was financial advice. Was this just the dip? Was this the end of crypto? There's no way to be sure, but we're glad you're with us on the Bankless journey. We don't think it's the end of crypto. We think we'll continue to do this into the future. Thanks for joining us on another weekly rollup. Take care guys. Hey, we hope you enjoyed the video. If you did, head over to Bankless HQ right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence. We recommend joining our daily newsletter, podcast and community as a Bankless premium subscriber to get the most out of your Bankless experience. You'll get access to our market analysis, our alpha leaks and exclusive content,

• 1:25:02David Hoffman?

  and even the Bankless token for airdrops, raffles and unlocks. If you're interested in crypto, the Bankless community is where you want to be. Click the link in the description to become a Bankless premium subscriber today. Also, don't forget to subscribe to the channel for in-depth interviews with industry leaders, Ask Me Anythings and weekly rollups where we summarize the week in crypto and other fantastic content. Thanks everyone for watching and being on the journey as we build out the Bankless nation.