ROLLUP: Huge Binance Exploit | David Sues the Treasury | Devcon Bogota | PayPal Censoring

2nd Week of October, 2022 ------ 📣 Galxe | Explore Crypto’s #1 Credential Network https://bankless.cc/Galxe ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum ❎ ACROSS | BRIDGE TO LAYER 2 https://bankless.cc/Across 🦁 BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave 💠 NEXO | CRYPTO FINANCIAL HUB https://bankless.cc/Nexo 🔐 LEDGER | NANO HARDWARE WALLETS https://bankless.cc/Ledger ⚡️FUEL | THE MODULAR EXECUTION LAYER https://bankless.cc/Fuelpod ----- Topics Covered 0:00 Intro 6:30 Galxe https://bankless.cc/Galxe 8:00 MARKETS 10:30 Macro Markets CPI https://www.nytimes.com/live/2022/10/13/business/inflation-cpi-report 13:00 The Selloff https://twitter.com/tradingview/status/1580537107378221057 15:20 Volatility https://twitter.com/zerohedge/status/1578489043171807232 17:15 Erasing the Bull Market https://twitter.com/biancoresearch/status/1580553494766854145 18:30 Ultra Sound ETH https://ultrasound.money/ 23:00 DevCon Announcements 24:20 Scroll zkEVM Testnet https://twitter.com/daddysether/status/1579681127669051394 26:35 Arbitrum Acquires Prysm https://twitter.com/arbitrum/status/1580190809701613568 29:55 zkSync Pathfinder L3 Testnet https://www.theblock.co/post/175823/zksync-says-layer-3-testnet-pathfinder-will-launch-in-q1-2023 31:20 Polygon zkEVM Testnet https://twitter.com/sandeepnailwal/status/1579501728793518081? https://twitter.com/sandeepnailwal/status/1579501728793518081 33:52 Supermodular https://twitter.com/owocki/status/1579508166613946368 35:45 Binance HACK https://twitter.com/bnbchain/status/1578148078636650496 37:20 2 Million Token Exploit https://twitter.com/bnbchain/status/1578148078636650496 Damage - https://twitter.com/SlowMist_Team/status/1578220472373649408 38:30 How it Happened https://twitter.com/samczsun/status/1578167198203289600 39:50 Freezing Blockchains https://github.com/bnb-chain/bsc/releases/tag/v1.1.15 45:45 David Sues the Treasury https://www.theblock.co/post/176701/coin-center-sues-treasury-over-tornado-cash-sanctions 47:40 Fighting for Privacy Rights https://twitter.com/jerrybrito/status/1580237327364157440 48:40 The Complaint https://www.coincenter.org/app/uploads/2022/10/1-Complaint-Coin-Center-10-12-22.pdf 50:45 Fighting for Shaq https://twitter.com/TrustlessState/status/1580253035804372993 53:50 The Coincenter Mullet https://gitcoin.co/coincenter 57:00 All Time Hacks https://www.financialexpress.com/blockchain/octobers-the-biggest-month-in-crypto-hacks-chainalysis/ 58:50 Mango $100m Hack https://decrypt.co/111727/solana-defi-trading-platform-mango-markets-loses-100m-in-hack Proposal - https://twitter.com/alex_valaitis/status/1580017142132805632 1:00:45 Solving Hacks https://twitter.com/RyanSAdams/status/1580569612055629824 1:03:10 Across Airdrop https://twitter.com/acrossprotocol/status/1579849755760287744 1:04:35 PayPal Censorship https://twitter.com/davidmarcus/status/1578795041719750663 1:09:00 Celsius Users Doxxed https://fortune.com/crypto/2022/10/07/did-celsius-dox-its-customer-base/ Lark - https://twitter.com/DegenSpartan/status/1578399874009006082 1:11:19 Bored Ape SEC Probe https://twitter.com/tier10k/status/1579870677867278336 1:15:00 RELEASES L2beat Bridges - https://l2beat.com/bridges/tvl/ UniStark - https://twitter.com/nethermindeth/status/1578769317952647168 Google Search - https://twitter.com/hhua_/status/1579700083314282496 1:18:00 Uniswap Labs $165m Raise https://twitter.com/Uniswap/status/1580532185597026306 1:20:00 TAKES 1:21:00 Coinbase Documentary https://twitter.com/trustlessstate/status/1578551874520723456 1:23:10 Gary Gensler https://twitter.com/RepHuizenga/status/1578383374447689731 1:23:45 Back to 2018 https://twitter.com/RyanSAdams/status/1579859121402449920 1:25:00 What David’s Bullish On https://twitter.com/TrustlessState/status/1580447738067841024 1:28:55 What Ryan’s Bullish On https://twitter.com/RyanSAdams/status/1580185912260014086 1:31:10 MEME of the Week https://i.redd.it/tb9ffr78cds91.jpg ——— Not financial or tax advice. Do your own research.

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

• 0:00Ryan Sean Adams?

  The BNB chain was halted, halted after a billion dollar hack.

• 0:08Ryan Sean Adams?

  Bankless Nation, happy second Friday of October. It is roll up time. It's also a special dev con roll up. David, you were hanging out in Bogota, Colombia at dev con this week. How's it going, man?

• 0:21David Hoffman?

  Really good, man. Bogota is a ton of fun and dev con is just going absolutely fantastically. There's, there's so much energy here at dev con and it does kind of feel like the last like bonfire of energy in this bear market in the crypto space, but everyone is just really excited to be at dev con. The talks and content is just very, very rich. People are stoked, man. People are really stoked to be here.

• 0:44Ryan Sean Adams?

  David, dev con is an Ethereum specific conference or is it wider than that? And then like this is the first time it's been in person in a while because of, you know, COVID and everything else, right? So this is the first time the entire Ethereum community is there. Give us a sense of the vibe and what dev con actually is.

• 1:00David Hoffman?

  Yeah, yeah. Dev con is, I would say like the foundation of much of the rest of global Ethereum conferences. It is the, well, it's not only actually anymore, but it is the conference thrown by the Ethereum Foundation. So yes, it is Ethereum specific. In years previous, however, there has been many other exposures to other chains. EOS and Ethereum Classic famously were, had a significant presence and Algorand has significant presence at, when was it? Osaka, which was the last dev con that happened in 2019. There has not been a

• 1:34Ryan Sean Adams?

  2019?

• 1:36David Hoffman?

  Right. There has not been a dev con in three years and that's, it's actually made this dev con many, many people's first dev con, including myself, which many people are surprised. Like, oh, David, you're like, you've been in crypto forever. This is your first dev con? Yeah. And many other people have also like not been able to go to the dev cons prior. I remember dev con 2018 in Prague.

• 1:58David Hoffman?

  I had just gotten into crypto and I like, I was just like, you know, couldn't convince my company to send this like person that they just hired all the way to go to DEF CON. And then 2019 was Osaka and like, kind of, kind of the same deal. I'd like, if Osaka was going to be a four or $5,000 trip and Ether was like $100, I was like, I really want to go, but like.

• 2:19Ryan Sean Adams?

  I'd have to sell some ETH.

• 2:20David Hoffman?

  I'd have to, yeah, I'd have to not buy some ETH. And so this is my, my and many others' first dev con. And it's, it's, I mean, Ethereum as an ecosystem is just completely different from last dev con. Last dev con was 2019 at like $100 to $200 Ether and there was no DeFi, very little DeFi, absolutely zero NFTs, no layer twos. Plasma was our scaling solution at the time. Yeah, right. And so like, it's just a fundamentally different dev con. And they made this really cool video. I'm going to see if I can get the video from the EF and just do something with it. But they made this really cool intro video. And man, I got goosebumps, dude, of just like the road to dev con and like what it took to get here, going through like all like, you know, ETH dev connect, the merge, EIP.

• 3:04David Hoffman?

  It was like a speedrun of the last like three years of Ethereum history. And like this really cool animated like promotion video. It was really, really cool.

• 3:12Ryan Sean Adams?

  And I know this is Ethereum community, Ethereum ecosystem, and it's heavily like dev, the dev and dev con stands for developers. So it's a heavily developer centric kind of conference. Like, how many people are there? We're in the thousands, right?

• 3:25David Hoffman?

  Oh, in the many, many thousands. I, I don't know numbers, so I'm going to spitball here. I think something like eight to 10,000 people, maybe less.

• 3:36Ryan Sean Adams?

  Don't quote David on that, though.

• 3:37David Hoffman?

  Maybe less than that.

• 3:39Ryan Sean Adams?

  Five to 10,000, how about that?

• 3:41David Hoffman?

  Definitely 5,000. 5,000 feels very safe. Yeah, I'm going to go with like 8,000 ish. But you're, and you're totally right. And like, it is, I was talking to people about this at dev con. It's not even like application layer stuff. There's not many like DeFi apps or NFTs conversations at all. The conversations are the Ethereum protocol, EIP 4844, account abstraction, post merge stuff, layer twos. Like, it's like staking infrastructure. It is some, we are

• 4:12Ryan Sean Adams?

  Deep in the protocol, huh?

• 4:13David Hoffman?

  Deep in the protocol stack. Like, we are not, this, the focus of this conference is like below the application layer. So like, not even DeFi apps have exposure here.

• 4:22Ryan Sean Adams?

  Are you seeing any suits? Any suits and ties?

• 4:25David Hoffman?

  No suits, no suits.

• 4:28Ryan Sean Adams?

  As it should be. Sorry, all you suit-wearing, dapper, you know, gentlemen and gentle ladies. It's just, you know, it's nice to just kind of chill and be with the developers and kind of wearing whatever is comfortable.

• 4:40David Hoffman?

  You know, it's also been fun, Ryan.

• 4:42Ryan Sean Adams?

  What?

• 4:42David Hoffman?

  I don't think you know this. No hay mucha gente que sepa esto, pero bueno hablar un poco español, sí. So, está hablando español aquí en Colombia. So, it's been a little bit of fun. I've been practicing my Spanish.

• 4:54Ryan Sean Adams?

  Wow, well done. How is it holding up? How's your Spanish holding up with the neighbors?

• 4:58David Hoffman?

  Yeah, bien. Yo vive in Guatemala para dos meses. Yo vive in Argentina para dos semanas. So, I've been like shaking off some rust, but it's been good.

• 5:09Ryan Sean Adams?

  That sounds impressive, actually. Bankless Nation, rate David's Spanish right now in the comments. Tell him, tell him how he did. But you gotta appreciate the effort, right? That was great, David. Well, anyway, we got a lot of topics to cover this week. The first is, of course, DevCon, what's going on? There have been a slew of announcements coming out of DevCon that we gotta talk about.

• 5:31David Hoffman?

  Big announcements, big announcements that people are super surprised by. Yeah, so we're gonna cover that.

• 5:36Ryan Sean Adams?

  Also, we have the BNB chain that was halted, halted, after a billion-dollar hack. David, are chains supposed to halt?

• 5:45David Hoffman?

  Not, not the Ethereum chain, but we'll talk about whether it's appropriate for other chains.

• 5:50Ryan Sean Adams?

  And finally, we've got the ultimate showdown, I think. David Hoffman versus Janet Yellen. Yes, David Hoffman from the Bankless Podcast. We're gonna talk about that, all right? David has been named as a co-plaintiff in a case against Treasury. But it's not a bad thing. It sounds like a bad thing, actually, but it's actually a really good thing. We'll get into that. And of course, as always, make sure you like, subscribe, and review wherever you're watching this, wherever you are listening to it.

• 6:18David Hoffman?

  With your morning coffee. Here's my espresso with zero sugar or milk.

• 6:22Ryan Sean Adams?

  Yeah. Oh, that's amazing. I bet the coffee in Columbia is pretty tasty.

• 6:26David Hoffman?

  It's pretty decent. Yeah.

• 6:28Ryan Sean Adams?

  All right, well, before we get in, I want to talk about our friends and sponsors at Galaxy. They want to invite you on a DeFi crypto adventure. It's adventure time in crypto. David, what is Galaxy? What are these guys up to?

• 6:42David Hoffman?

  Galaxy is your digital passport for exploring the metaverse, exploring Web 3. They have a bunch of quests and tasks and things to go do in the world of crypto. And once you go do those things, you get to log a little badge, a little gym badge, a little credential in your Web 3 passport given to you by Galaxy. So they are producing little things for you to go do, go and explore the frontiers, if you will, to go and get some tasks done. And then you get to show the world that you did those tasks, that you are an actual frontier explorer. And, you know, surface area for other opportunities, if you will. And so there is a link in the show notes to go get your Web 3 passport from Galaxy.

• 7:25David Hoffman?

  And you can start exploring different parts, different optimism, Arbitrum, wherever, wherever people want you to go explore, you can get paid to explore or at least get a badge, sort of like a PoE, to go and explore the metaverse.

• 7:37Ryan Sean Adams?

  Yeah, some of these, some of these campaigns, as it were, they have rewards on the other side. So if you are a gold hunter, you can go check out those rewards. Also, that passport you're mentioning, David, that's actually a soulbound token, which is pretty neat. I love these experiments with identity on chain, using a soulbound token for this. So go check out.

• 7:56David Hoffman?

  Don't trigger Evan McMullins too hard.

• 7:59Ryan Sean Adams?

  Just a little hard is fine. That's galaxy.com/passport to get to that. G A L X E dot com is the URL. So Galaxy spelled G A L X E. David, let's get to markets. Bitcoin this week, how we doing?

• 8:18David Hoffman?

  It's down. It's down a solid 9%. So started the week at 20,200, ending the week at 18,400. Oof, oof, oof.

• 8:29Ryan Sean Adams?

  Down week, sad music. Okay, how about ETH, down as well?

• 8:32David Hoffman?

  Yeah, down a little bit more, down 10 and 1/2%. Started the week at 1370, ending the week where we are now at 1240, 1220-ish, give or take.

• 8:41Ryan Sean Adams?

  David, do you think we're going to dip on ETH below 1,000 again?

• 8:45David Hoffman?

  I mean, it's certainly in the cards. It's certainly in the cards for sure.

• 8:49Ryan Sean Adams?

  Certainly in the cards. Not going to say no, not going to say yes. I'm veering towards yes on that.

• 8:56David Hoffman?

  I mean, if we if we roll back at the last bear market, we hit $80 and then we hit like $92 and then we hit like $95 across like 18 months of time.

• 9:07Ryan Sean Adams?

  What's our low right now on ETH?

• 9:10David Hoffman?

  I think it's like 870. Yeah.

• 9:13Ryan Sean Adams?

  And that was a quick spike.

• 9:14David Hoffman?

  And your boy bought 897. So that is the best bottom tick I have ever done.

• 9:20Ryan Sean Adams?

  All right. So David timed the market really well that time, but maybe we'll be below that.

• 9:26David Hoffman?

  For now.

• 9:27Ryan Sean Adams?

  I can't wait to beat David and buy 800. What'd you buy?

• 9:32David Hoffman?

  Shush. Get out of here.

• 9:33Ryan Sean Adams?

  What'd you buy? 800? So I'll do 897.

• 9:37David Hoffman?

  You're going to set your limit orders for 896?

• 9:38Ryan Sean Adams?

  Yes.

• 9:39David Hoffman?

  I'm going to set my limit orders for 895.

• 9:42Ryan Sean Adams?

  And on we go. And this is how we end up with no cash.

• 9:45David Hoffman?

  This is how you get price discovery.

• 9:48Ryan Sean Adams?

  I guess we're laughing about this, but it is a pretty steep bear market. I mean, like, we are like at this, these prices, we are below the all time high of the last cycle, which was like 1440, something like that. So we'll talk about why this might be the case. It's all screaming macro to me. How about the ETH to Bitcoin ratio? We down on that too?

• 10:09David Hoffman?

  Yeah, down a little bit. 2.5% down to 0.663.

• 10:14Ryan Sean Adams?

  And how's the crypto market cap holding up overall?

• 10:18David Hoffman?

  No longer being measured in the trillions. We are now at 934 billion dollars. So well below $1 trillion market cap.

• 10:27Ryan Sean Adams?

  We lost our T status. We back to the Bs.

• 10:31Ryan Sean Adams?

  All right. Well, let's talk about macro. Okay. Because this is the cause of some of our problems. Why is this happening to us? Why us right now? Of course, crypto, crypto goes in cycles. But I think one of the catalysts and the things that are like preventing some of the crypto markets from from rising again is uncertainty in macro. And boy, there's a lot of uncertainty these days. The big news this week was the CPI number, that is, the September inflation report just came out. And David, the numbers are higher than expectations. The CPI, Consumer Price Index, rose 8.2% in the year that is annualized through September.

• 11:11Ryan Sean Adams?

  I think expectations we're hoping for 8.0, 8.1, so a little bit higher on that. And we're still in the eight range, David. So not good. I guess, just to recap, in August, we were CPI of 8.3%. That's annualized, of course. In July, 8.5%. In June, 9.1%. So from June to September, from the annualized perspective, we went from 9.1% to 8.2. So we're still down, but you know, we're not down as much as some analysts, and I think the market was hoping for and expecting. And so, do you know what this means, David?

• 11:51David Hoffman?

  Numbers go down?

• 11:53Ryan Sean Adams?

  Numbers go down. And also, Powell wants one number to go up, which is the interest rate. And so, the next Fed meeting is November 2nd. The market's anticipating another 0.75 basis point hike. So that is definitely coming down the pike for us. And yeah.

• 12:15David Hoffman?

  I mean, this is just simply like, rate hikes will continue until inflation comes down, right? So this is like pretty easy forward, I'd say.

• 12:21Ryan Sean Adams?

  Exactly. The beatings will continue until morale improves. And so, we've got some more beatings to go through from the Fed. It's an interesting question, I think, a question that we want to bring some macro folks here to answer on Bankless, which is like, is this actually effective? Can you break the back of inflation by raising rates? I mean, the story, the narrative, keeps going back to like Paul, like Volcker, the Fed Chair of the 1980s, who allegedly broke the back of inflation. Is that really what did it? Or conditions different? Or there are other factors at play? I would love to get in a conversation with somebody on the macro side about whether this strategy is actually effective.

• 13:03Ryan Sean Adams?

  But in the meanwhile, David, you could see the sell-off, the sell-off event when those numbers retire.

• 13:08David Hoffman?

  Those are some large down candles.

• 13:10Ryan Sean Adams?

  Yeah.

• 13:11David Hoffman?

  This is the S&P 500, gold, bitcoin, and euro, all just tanking in a single candle as soon as this report came out.

• 13:18Ryan Sean Adams?

  Exactly.

• 13:19David Hoffman?

  Global correlation. Yeah, this is one of those moments where like correlations all go to one when times are bad. That's exactly what this looks like.

• 13:26Ryan Sean Adams?

  Yeah, that's what's happening. But I will tell you one thing, which is which is kind of interesting, is how crypto is faring relative to traditional markets. Here's kind of one stat. So after the CPI numbers came in, the US 30-year bonds were down 2.5%, as you might expect. So bonds go down. But also ETH was down 2.5%. It was interesting. Like, the risky asset, you know, you'd expect ETH to go down by 2.5% or a lot more. It was down the same amount as bonds. Bonds are supposed to be the stable asset, and they're not performing as the stable asset in this market. So I start to wonder if, like, will

• 14:11Ryan Sean Adams?

  have crypto markets bottomed? Is prices and some of the volatility shifting to more the traditional markets? That could be what's happening.

• 14:20David Hoffman?

  My take here is that the hot air has already left the crypto industry. And so when macro goes down, we're also going to go down with it. But we're not going to go down in an outsized way. Like, we went down in an outsized way from January to May of 2022. And then everyone got liquidated. And now we've kind of like, found some sort of floor-ish. And as that floor lowers because of macro, we will follow that floor down. But we're not going to like, puncture through that floor in the same way that we did in the first half of this year. That's my take.

• 14:50Ryan Sean Adams?

  I largely agree with that. I think crypto already took its lickings and got beaten down. And now traditional markets are taking theirs. This is a tweet from Zero.

• 15:00David Hoffman?

  People are underappreciating the fact that we do not have another three years capital like, leverage event. And like, maybe we do, because you don't really know if you have one of those or not. So it's kind of impossible to claim. But I don't know, man, like, if it would have happened last time, like, we already did that. I can't imagine there's a second one.

• 15:17Ryan Sean Adams?

  The things that are still standing are now on much more firm, solid foundation. This is a tweet from Zero Hedge. "The Fed finally did it. They broke the market. The Dow Jones, which is of course, the 30 largest industrial stocks on the planet, is now officially more volatile than crypto." This is a volatility index of Dow Jones and crypto versus US dollars. And so, the stock market now performing with more volatility than crypto. That lends a bit more credibility to what you just said, I think, David.

• 15:49David Hoffman?

  Yeah, and this is a theme that I have been trying to just get into people's heads because I think it's the right theme. And I've said this in a number of different capacities where crypto is becoming more and more suitable for mainstream while the mainstream world is needing crypto more and more and more. And this is related to our Web 2 versus Web 3 apps, like Facebook algorithms, rage algorithms are pushing us and like, oh, I kind of understand why we need Web 3 a little bit better. There's an adoption story here. The other time I've articulated this is that the normal world is getting more chaotic as crypto is becoming more stable. And so this is me taking a victory lap, Ryan. When the Dow Jones is more volatile than Bitcoin, the old world's getting more chaotic

• 16:34David Hoffman?

  and crypto's getting more stable. And this is going to be one of the great... It's like the Benjamin Button meme, like we are now crossing and now crypto is the stable one.

• 16:44Ryan Sean Adams?

  Yeah, I totally agree with that. And I think what you're saying is the victory lap is not that you're happy the Dow Jones is going down, but you're kind of saying like, you predicted that all the naysayers who said, "Look, crypto is too volatile for mainstream." We've long said, people in crypto have long said, "Just wait." The whole world's getting more volatile and that volatility is coming to you as well. And crypto is just a bit more of an honest market in terms of pricing that in early. And I think that is exactly what's happening. This is another tweet from Jim Bianco. This is the early 20... He says this, "The early 2020 pre-pandemic peak in the S&P 500 was 3,393. As I write..."

• 17:29Ryan Sean Adams?

  And he's writing October 13th, so this is on a Thursday. "As I write, the S&P 500 is 3,493, 100 points away from erasing the entire post-pandemic bull market. We just erased that entire pandemic bull market. All the money printing that went into stocks, it's gone now. We're back to where we were in early 2020." That's pretty astounding when you think about it that way.

• 17:56David Hoffman?

  Yeah, that is quite astounding. And it's also worth noting that in early 2020, Ether was $100 and Bitcoin was like $4,000 or $5,000. And so crypto has made significant strides in the same time that the legacy markets has just gone full circle.

• 18:11Ryan Sean Adams?

  Yes, and despite it, of course, if we're looking at now a the speed of the US interest hikes, look at this, 2022, the fastest speed at which the Fed has ever increased interest hikes, at least ever in kind of like modern history, it seems like. So they are on a tear to increase interest rates and no signs of stopping yet. We'll see if something breaks before they do. David, meanwhile, on the crypto monetary policy side of things, ETH went ultrasound last week. Talk about that for a minute.

• 18:44David Hoffman?

  Yeah, so last week, since the merge, we had issued 13,000 Ether, about 13,500 Ether. So last week, the new post-merge Ether issuance was 13,000. Today, seven, eight days later, the post-merge Ether issuance is 7,100. We have burned about 6,000 Ether in the last seven days. And so where we have been previously, up to last week, we were inflationary, the last seven days has been extremely deflationary. We've almost cut out 50% of all issuance in the last seven days. And this goes back to what I was saying last week. It's easier to burn Ether than it is to issue it. And you can recover a significant amount of Ether

• 19:27David Hoffman?

  issuance in a short amount of time. So we've, we've like taken three weeks of issuance and like deleted it inside of one week. Previously, I think the issuance rate of Ether, the inflation rate, the was 0.22%, up until at the very peak. We are now down to 0.08% in, since the merge. And so this is really cool. This is really, really cool. The less cool thing about it is, okay, why is this happening? Why are gas prices like sustaining 30 gray and sometimes getting up to 100 again? It's because of a Ponzi.

• 20:01Ryan Sean Adams?

  Zen crypto.

• 20:02David Hoffman?

  Zen crypto thing. Yeah, I actually haven't looked into it myself, but this is the discussion at DevCon. And so I'm kind of regurgitating what I heard is apparently this is like the new Ponzi thing. But this also goes back to my other take that Ether is the index of Ethereum and you don't have to buy every single token to have exposure to Ethereum. Maybe this Ponzi just comes and goes.

• 20:20Ryan Sean Adams?

  You should not buy every single token.

• 20:21David Hoffman?

  Definitely not. Yeah, maybe this Ponzi comes and goes, but it burnt for almost 5,000 Ether along the way. And so, yeah, cool.

• 20:30Ryan Sean Adams?

  It is really cool.

• 20:31David Hoffman?

  Generalized exposure to Ponzi's. Nice.

• 20:34Ryan Sean Adams?

  Well, this is, and other things among them, but like, this is an example. So Ether was ultrasound in the week. It's not ultrasound overall since the merge, but it could easily, like you get another week like this, and it basically is. And what we're talking about, of course, is again, a 94% issuance reduction post-merge. And that has not been priced in from the markets at all. And the reason is because like during bear markets like these, demand simply vanishes for Ether as NASA. Everyone's kind of scared, so demand vanishes. But in the backdrop, a lot of supply is getting eliminated as well. And so, once that demand recovers, I would expect to see some like rocket ships like back up because we have

• 21:17Ryan Sean Adams?

  much less supply to work with and there's much less availability.

• 21:21David Hoffman?

  I think, I think that's the right take. I think Ether burned, Ether removed from the market. I don't think does too much when prices go down. Like, I don't think this Ether burn is going to save Ether from setting new lows.

• 21:32Ryan Sean Adams?

  It's not.

• 21:33David Hoffman?

  But, but once demand comes back, like you said, it becomes, the upside becomes highly sensitive. And so it is easy to recover price, I think, as soon as there's any amount of like meaningful new buyer, net new buying of Ether. I think that's right.

• 21:48Ryan Sean Adams?

  Guys, we have a lot more coming up in the roll up. David's going to get to all of the DevCon announcements that he saw well in Bogota. And also, we're going to talk about the Binance smart chain pause. Why did it pause? What happened? Did they roll back the chain? Talk all about that. And then Hoffman versus Janet Yellen, the fight of the century. It's coming to a court near you. David can't talk about it, but I can, and I'm going to.

• 22:11David Hoffman?

  How convenient.

• 22:12Ryan Sean Adams?

  All of this and more, coming after we talk about these fantastic sponsors that made this episode possible.

• 22:18David Hoffman?

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• 24:04Ryan Sean Adams?

  A lot of big announcements coming at DevCon, mostly on the protocol layer of things as we were talking about in the intro. David, you want to take us through a few of these announcements?

• 24:13David Hoffman?

  Yep, 100%, because they're really cool stuff. This is the building being expressed here at DevCon. So we'll start with this one. This is Liam on Twitter. Last night, and he's from the Scroll team, last night we officially announced the Upgraded version of our ZK EVM testnet over at Scroll. This is a huge milestone for both the Scroll team and incredibly early community. Let's break down what this upgrade means for developers and users. And there is a tweet thread in the show notes if you want to learn more. Scroll's ZK EVM testnet is debuted. And so if that is interesting to you as a developer or a tinkerer, that is now something that you can go play with. And so congratulations to the Scroll team. This is definitely the ZK rollups are definitely a very hot conversation

• 24:58David Hoffman?

  here in Bogota and overall in the crypto space. And I mean, this is Scroll between Scroll, Polygon and ZK Sync. This is like one of the, one of the big three of the ZK EVM teams. And now we got a ZK EVM on testnet, ready to go.

• 25:12Ryan Sean Adams?

  Wouldn't you also add Starkware maybe as a fourth?

• 25:16David Hoffman?

  No, Starkware is not a ZK EVM.

• 25:18Ryan Sean Adams?

  Not a ZK EVM, you know, because, because they don't actually have an EVM because you have to kind of write it in Kyro. Is this why?

• 25:28David Hoffman?

  Correct. They are a non-EVM compatible ZK, ZK rollup. Yes, correct.

• 25:37Ryan Sean Adams?

  This is actually coming faster than I thought.

• 25:39David Hoffman?

  Super fast, yes.

• 25:40Ryan Sean Adams?

  Big move for Scroll and they, they are purporting to be the most EVM equivalent of them all, of course.

• 25:46David Hoffman?

  That is, that is their competitive advantage. That is their like angle. They are a, trying to be as EVM equivalent as possible beyond EVM compatibility. And so there, there is a fight for EVM equivalence. Our optimism and Arbitrum are fighting over EVM equivalence. Scroll and Polygon are fighting over EVM equivalence. ZK Sync is specifically one firm in the EVM compatible camp. That is their competitive advantage, a little bit in the same angle as like why Starkware wanted Kyro. A little bit highly optimized language or just some kind of tinkering. But, but ZK Sync is like a little bit in the middle. Like definitely want to maintain EVM compatibility,

• 26:28David Hoffman?

  but they think that they can make optimizations that are better than the ZK EVM or an EVM equivalent rollup. So that is their, that's their territory.

• 26:39Ryan Sean Adams?

  Well, speaking of Arbitrum, which you just mentioned, they had a big announcement too. What are they talking about?

• 26:45David Hoffman?

  Yeah, this is huge. They have acquired Prismatic Labs, Prilabs, Prism, a Layer 1 client. We have a Layer 2 optimistic rollup acquired a Layer 1 client team, which is crazy. No one really thought that you could really do this. And so this has caused a ton of conversations in this space as to what this actually means. But Prism is like the most used client in Ethereum. The one of the few people, the few first teams to come out and build, start building an ETH 2 client, which is now what we call Prism, and that got acquired by Arbitrum. So Preston Van Loon, Raul, all of the Prism team, I think there's 10 or 15 of them-ish, are now under the Arbitrum umbrella.

• 27:27David Hoffman?

  And they are, of course, going to continue working on Prism. But now Prism is just a product of Arbitrum.

• 27:35Ryan Sean Adams?

  This is kind of cool in that it kind of means funding secured, right? Like business model secured for the team that's building a critical client. And obviously, this is very good for Arbitrum. And I believe Arbitrum, when they say they're going to continue to support this and continue to maintain its credible neutrality. I think there have been some concerns about this, though. Is what happens if a Layer 2 team kind of maybe tries to bias the Layer 1 client in some way? Or is this unfair to other Layer 2s? So there's been some of that. I don't know what to make of that. We don't necessarily need to get into the arguments. But what I will say is the feedback that I've heard from Raul and Preston Van Loon and others is they're just excited about this. And I know those individuals are here for the right reasons.

• 28:19Ryan Sean Adams?

  And I don't think they'd be excited unless they had a path to preserve the values of Ethereum that they really care about. So I'm pretty optimistic about this overall.

• 28:29David Hoffman?

  I actually had the opportunity, I was in a cab with Preston for like 20 minutes, where we kind of talked about this. So I can regurgitate some takes here. I'm going to see if I can get him into an actual interview right after this over at DevCon. But we are also hosting Preston and Steven from Arbitrum and Prismatic on Tuesday.

• 28:49David Hoffman?

  Next Tuesday for State of the Nation to talk all about this. But Preston, like one of the big reasons why he's so excited about this and then the whole team is him and Raul were running a company, right? They were managing like the grants incoming from the EF where they were previously getting funding for and they were doing like HR and like paying salaries and like normal company stuff. But they're builders, like they just want to tinker. And so now that they are being like put under the larger Arbitrum umbrella, like they don't, he doesn't have to like do any of the business operation stuff. Which I think he'd like, you know, if you're a builder, you just don't really like to do that. Also, like salary bonus, salaries are going up because they're going from grants to like EF grants to again, under the Arbitrum umbrella.

• 29:31David Hoffman?

  And I mean, they also get, they also get to just like be financially compensated for all of their hard work, which, you know, grants, grants aren't a business model. And so, but so like, so everyone's like super happy about it over on the Prism team.

• 29:45Ryan Sean Adams?

  That's cool. Look, and if worst case scenario, they're not going to go evil, but if they ever went evil, it's open source code. Some other team could fork it, take it and run with it. So I think that's a net win for the ecosystem. David, speaking of net wins, the makers of ZK Sync just launched their Layer 3 testnet. Now Steve from ZK Sync was talking all about Layer 3 on a State of the Nation that we recorded with him a couple of episodes ago, and they're already on testnet for this. What is, what is this announcement telling us?

• 30:15David Hoffman?

  Yeah. So ZK Sync's mainnet is coming in like 20 ish days. We might actually be in the teens on that. So ZK Sync is actually much further along than the other two ZK EVM teams, Scroll and Polygon. So their mainnet, their ZK EVM mainnet is coming very soon. And so they have, their announcement today is that their Layer 3 testnets, which are their app chains, their hyperchains, whatever you want to call them. Their, their testnets for Layer 3s is now going live. So they are like a decent step ahead of the other Layer 2 teams because they are now working on their Layer 3s. This is the same conversation as to keeping DYDX on Ethereum. DYDX had to leave Ethereum because they wanted to produce their own app specific.

• 30:59David Hoffman?

  Chain on Cosmos because Layer 3s were not ready yet in the side of the Ethereum ecosystem. And this is this Layer 3 testnet is that what would have been a solution for for DYDX. And so they're calling it Pathfinder. And so this is now whatever it means to have a Layer 3 testnet. I'm not too sure, but it is now available for you.

• 31:21Ryan Sean Adams?

  So another big announcement from Polygon as well, which we weren't really sure when their public testnet for the Polygon ZK EVM would go live. And it looks like it just went live at DevCon. So while ZK Sync is close to shipping on mainnet, it'll be a guarded release, by the way. It's a mainnet without any apps. It'll be kind of like, yeah, with for for

• 31:45David Hoffman?

  Developers first mainnet, yeah.

• 31:46Ryan Sean Adams?

  Developers first, so we won't be able to use it for a while until they kind of, you know, release the floodgates. But meanwhile, from Polygon ZK EVM, their testnet just went live as well. Any takes on this announcement?

• 32:00David Hoffman?

  Again, this is this is why the meta right now is the ZK EVM. And Vitalik, I remember at Rollup Day, which was a rollup themed conference, one day conference hosted by Scroll, Vitalik gave his presentation and talked about just like, yeah, the ZK teams have really astounded.

• 32:20Ryan Sean Adams?

  They're shipping.

• 32:20David Hoffman?

  They're shipping hard. Yeah, he was he was giving this narrative about like how the ZK EVM, the ZK rollups were like going to be here in like 2025 to 2030, like sometime around there. But bam, no, they actually came in 2022. And he said, it's the one time that you actually see development is super accelerated beyond like, you know, the merge was delayed, sharding is not even here yet. Everything about Ethereum has been delayed, except for the ZK EVM teams. And you can see this all happening all at once at DevCon. Everyone saved their announcements to DevCon. The ZK EVMs are basically here. And so while, you know, we're all frustrated that like Ethereum development is slow, even though like, cool, now we have the merge, so I'm not really going to complain too much.

• 33:05David Hoffman?

  The ZK, the ZK Layer 2s are here and they are super exciting. It's not just about cheap and fast transaction fees, Ryan. There's so much new doors that are opened up on a ZK rollup. More content on that and the overall Bankless ecosystem coming soon.

• 33:21Ryan Sean Adams?

  We at Bankless are cheering all of these projects on. Way to go, everyone.

• 33:26David Hoffman?

  Quick disclaimer on all of these projects that we just mentioned. Ryan and I are investors in Scroll. Ryan, I believe, is an investor in Arbitrum. We are both advisors to ZK Sync and Ryan is an advisor to Polygon. So we are very, very involved in this Layer 2 ecosystem. And so those are those.

• 33:43Ryan Sean Adams?

  And also, and also David holds some ETH. He's been known to hold a little bit.

• 33:47David Hoffman?

  Oh, yeah, also really related to Ether, I also hold ETH.

• 33:50Ryan Sean Adams?

  Yes. Disclaimer's out. Kevin Owoke, he tweets this. I am pleased to announce the launch of Super Modular XYZ. We are a venture studio that builds Regen Web 3 projects, often on top of adjacent and adjacent to Gitcoin's protocols. What is this from Kevin Owoke? What is Super Modular? This was announced at DevCon.

• 34:12David Hoffman?

  Yeah, so Kevin Owoke, the founder, former CEO of Gitcoin is, and Gitcoin is now a protocol. It is now a DAO. It is on its own and he's largely stepped back from the DAO. Kind of in the same way Satoshi stepped back from Bitcoin and Vitalik has stepped back from like.

• 34:29Ryan Sean Adams?

  He's even made time for a podcast, hasn't he?

• 34:31David Hoffman?

  He's even made time for the Green Hill Podcast. And so Gitcoin is up and running and it just chugging along. And so now Kevin, the perma builder that he is, has founded a centralized company that exists on top of the Gitcoin protocol. So I think Super Modular, the way to explain it simply is like the consensus for Gitcoin, a software studio that builds on top of the Gitcoin protocol. So Kevin Owoke just can't stop building. A founder and CEO yet again, back, back building out something centralized on top of his, the decentralized protocol that he helps steward. So just Kevin Owoke is just like, well done, sir. And I also think this is just a great model of something that we see, I think we will

• 35:14David Hoffman?

  see and we have seen before and we will see again of founders building something, letting it become decentralized and then building a centralized company on top of that decentralized thing. This is what we've seen with Hayden Adams and Uniswap. So Hayden Adams built Uniswap, released it to the wild. Now the Uniswap DAO is in control of Uniswap and now he's the CEO of Uniswap Labs, a software company that is building on Uniswap. And so I think this model is going to be something that we're going to see over and over and over again throughout into the future.

• 35:40Ryan Sean Adams?

  I totally agree and I think it's a great model. All right. Well, meanwhile, this is everything that's going on on DevCon. And I think you've got some more stuff to say about DevCon a little bit later. But maybe we should talk about another event that happened this week. And that was on the Binance chain. So, sorry, the BNB chain, I think they've rebranded this, is not the Binance chain. Here's a tweet from BNB Chain, the Twitter account. "Due to irregular activity, we're temporarily pausing BSC. We apologize for the inconvenience. We'll provide further updates here. Thank you for your patience and understanding." That happened, that tweet was pet out on October 6th. Was that last Friday, David?

• 36:18David Hoffman?

  I believe that's right. And then they also follow up that tweet to say, "To confirm, we have suspended Binance Smart Chain. After having determined a potential exploit, all systems are now contained and we are immediately investigating the potential vulnerability. We know the community will assist and help freeze any transfers. All funds are safe." Interesting, because all funds were definitely not safe, Ryan.

• 36:37Ryan Sean Adams?

  All funds were not safe. Okay, so first of all, we could, maybe we'll talk about the exploit itself and what that was. But let me just park this, because we'll come back to it later. How bizarre is it that a Twitter account representing the chain itself can tweet like, "Hey, something went wrong. We just paused it." It sounds an awful lot like a centralized exchange to me. Like, you'd expect this from Coinbase. You'd expect this from FTX. Something happened, we're pausing things. But on a blockchain? A little bit weird. Like, the Ethereum Foundation, we're pausing the Ethereum chain because, I don't know, someone hacked their own inside chain, like, what the hell? You're not supposed to be able to pause a chain. But let's talk about what actually happened. Here's an article from Decrypt.

• 37:22David Hoffman?

  Decrypt reports that $566 million of BNB tokens were stolen from a bridge. So this was a bridge exploit, a bridge attack. And then they froze the chain. And so, as, once the attacker got hands, their hands on an extremely large sum of money, they started to transfer it out as fast as they could in all the different other bridges. So they bridged out to Arbitrum. I think they also bridged out to Optimus, and they bridged out to Ethereum. But then they froze the chain. So the hacker managed to get away with $110 million. And then about $430 million was frozen and now is back in the custody of the Binance Smart Chain operators. And so, you know, the freezing of the chain did save $430 million.

• 38:08David Hoffman?

  But the hacker has like 110 million dollars of various crypto assets across the space because they bridged out. And so, oof, yeah, oof.

• 38:18Ryan Sean Adams?

  Yeah, this is a summary of the hack. So since the BNB chain was suspended, the 430 million 430 million dollars on it cannot be transferred any further. And this tweet goes through kind of all the details and include that in the in the show notes. This is from Sam CZ Sun, who kind of goes over the hack and what actually happened. And it appears, David, that the summary here is something went wrong. There was a bug in the bridge, the Binance bridge itself. So there's a bug in the way that the Binance bridge verified proofs, which could have allowed any attacker to forge arbitrary messages.

• 38:54David Hoffman?

  I went through this Sam Z Sun thread, and it was an extremely sophisticated bug. It was, I mean, I generally don't understand.

• 39:02Ryan Sean Adams?

  Hard to find bug.

• 39:03David Hoffman?

  It's a very hard to find bug, hard to reproduce. I think I think this bug has been in Binance marching since the beginning, which is kind of the crazier thing. So yeah, this is like top.

• 39:13Ryan Sean Adams?

  It's been in the bridge specifically.

• 39:15David Hoffman?

  Yes, been in the bridge. It is a it is a 10 out of 10 complexity level bug. So wow, crazy.

• 39:22Ryan Sean Adams?

  So chain halted, everything frozen. The good news is, if you if you think this kind of thing is is good news, is that they were able to get back a lot of the funds, I think. How much of the funds was Binance able to kind of like recover or freeze? Or was the hacker prevented from getting away with?

• 39:44David Hoffman?

  About a little over 400 million, 430 million dollars. Yeah. So the hacker got away with 110 million. 110 million, though, that's a that's a large, large amount.

• 39:53Ryan Sean Adams?

  Yeah. So, okay, so what do you think about this? I mean, there are some people outside of crypto looking at this and being like, well, I'm glad the hacker didn't get away. Are you guys crazy? The cops were on the beat. They froze the chain. They stopped the hacker from getting what? Do you want the hacker to get away with like? Half a million dollars and who knows who the hacker actually is, right? The last time on the Ronin sidechain turned out to be a state apparatus of North Korea. Do you want these types of events to happen? And here you are on bankless saying like, oh, it's it's um, it's out of character of crypto values for a chain to be able to layer one chain to be able to freeze things. Well, are you sure about that?

• 40:38Ryan Sean Adams?

  Do the ends justify the means in this case? What's your take with that with that argument?

• 40:42David Hoffman?

  Yeah, I mean, this doesn't, I don't really think this surprises many people. We Binance Smart Chain, there's that meme about like, you know, the the captcha of like, you know, select all the fire hydrants. And then there's the meme of like, select all of the Binance Smart Chain validators. And it's just CZ's face like nine times. We know that this is the state of Binance Smart Chain. This isn't really surprising to anyone.

• 41:03Ryan Sean Adams?

  That it's centralized, that they have the ability to freeze, that they will freeze if an event like this happens. You're saying no one was really surprised. We all knew this.

• 41:11David Hoffman?

  Yeah, and so like, I think that has been in the social contract of Binance Smart Chain. And so when we say like, yeah, this is against crypto values. Well, yes, in one way, it's definitely against Bitcoin and Ethereum values. I don't think it's necessarily against Binance Smart Chain's values. There's a certain social contract that Binance Smart Chain has. And I think there's no, there's no secret that it is centralized and like plausible. And the fact that we have Ethereum, and again, Binance Smart Chain is an EVM fork of Ethereum. And then it's just juiced up Geth, so it goes super fast. We have the irreversible, immutable, decentralized version of that is called Ethereum. And so I don't.

• 41:47Ryan Sean Adams?

  We don't need B and B to be that.

• 41:49David Hoffman?

  Yeah, we have that option. So if you would like to express those bankless values, you probably transact on Ethereum. If you prefer the more like a certain kind, a different level of settlement assurances in the sense that you trust that Binance Smart Chain operators like CZ will be benevolent and do things that will prevent hacking and loss of funds and return. Like if you're an investor and you see like Binance Smart Chain halted and gave money back to investors that were innocent, that might be compelling to you.

• 42:23David Hoffman?

  Certain set of people. And so my take is that because we have Ethereum, I'm not, I don't really care so much about Binance doing this. I would, I would be much more cautious or much more like reserved if like they were like freezing funds of like the Uighurs because the Chinese government told them to. That's a different story.

• 42:41Ryan Sean Adams?

  Well, but that could, but that could happen next, right? To be fair. Now you have these, these, these buttons that centralized validators can press and have the ability to freeze. You'd expect that they wouldn't just be used for, for hack type situations, right? But, but largely I agree with you. I, I think what this does though, is it really reveals that BNB chain is a separate type of platform, separate type of application versus something like Bitcoin or Ethereum, right? And so it is, it is a bit more like a bank. It is a bit more like kind of fintech. And I actually don't see a lot of difference between something like BNB chain. And an actual like bank with a set of open APIs that you can build on top of. It's, it's, it's very similar. It veers in that direction. It's kind of like fintech.

• 43:26Ryan Sean Adams?

  Where I have a problem is when people mistakenly think that they're getting into like DeFi. When like, or like that this thing is built on, uh, you know, a permissionless base layer. And really what you're kind of building is on a, you know, a set of validators, kind of like a, a bank API. That's, that's where I have a little bit of the issue when it kind of masquerades or cloaks itself as being decentralized. And it's really, it's not nearly as decentralized as something like Ethereum. You could build on top of it. Maybe it's permissionless, maybe it has some open APIs. But you can't put it in the same category as a Bitcoin or Ethereum.

• 44:01David Hoffman?

  Right. And you touched on it just there, but just to drive that point, point home, and, and I guess I'm defending CZ today. It's permissionless to access. It's permissionless to build on. It's, it's like permissionless by default, but like on a bank, for example, you can only do certain things and you can't do anything else. On Binance Smart Chain, you can do whatever you want with the potential that CZ will stop you from doing that later. But you can enter, you can enter Binance Smart Chain and do things freely in the same way of you can with Ethereum. You just know that like, hey, you might get stopped after the fact where a bank stops you before the fact. Binance Smart Chain stops you after the fact, and then Ethereum doesn't stop you at all. So like it's, what's the difference between Ethereum and a bank?

• 44:45Ryan Sean Adams?

  Well, what's interesting to me is like some people will say, well, David Ryan, that's what users want. I mean, they want some level of protection. And like, I hear that, and I agree with you. And I would say if you're a user that wants that, go use Binance Chain. But what I actually think is that the true users of Layer 1 Blockspace aren't individuals like you, myself, or like, the Bankless listeners right now. They're actually other chains. And so the true users of Layer 1 Blockspace are going to be the ZK EVMs, the Optimisms, the Arbitrums, right? And the question for these chains is, what chain are you going to build on top of? Are you going to build on top of a chain where a small set of validators can like, freeze things?

• 45:26Ryan Sean Adams?

  Well, if you are, then you are completely giving up your sovereignty. You're not building on a credibly neutral censorship-resistant base layer, right? And so, that is more kind of what I think. If you're a user, go use whatever chain that makes sense to you, like, recognize these trade-offs. But if you're a chain, which is where the big Blockspace consumers are going to be in the future, you sure as hell aren't going to build on something like BNB versus something that is much more immutable and has higher security guarantees.

• 45:55David Hoffman?

  Yeah, basically, what you're saying is that these choices, the specific social contract of Binance Smart Chain puts a limit as to like, how much value can this thing actually host? Like, what is the total addressable market? The total addressable market of pure, strong immutability and strong settlement assurances is much larger than weak settlement assurances. People can trust Ethereum much more. And that's fine. And that's the same take that I have about Solana and why Solana needs to stop going down because of settlement assurances. You need to be able to have assurances that your value is secured. And Ethereum has that market pretty well cornered. I will say like Ethereum, like if you're using Ethereum, I would consider you a user. If you're using Binance Smart Chain, I would consider you a

• 46:37David Hoffman?

  customer. I would use semantically define it. Yeah, I would semantically define it like that.

• 46:43Ryan Sean Adams?

  Yeah, I kind of like that distinction. I think it draws the right mental models in people's mind. All right, speaking of distinctions, speaking of mental models, actually, there's no segue here at all. I'm just gonna say it. David is suing the Treasury, guys. All right, I'm gonna kind of lead this story. This is a post from the block. Coin Center sues Treasury over Tornado Cash sanctions. Of course, you know Coin Center, they are a crypto-friendly legal group, lobbyist group, based in DC. We've talked about them often on Bankless. We've had folks like Jerry Britto and Peter from Coin Center on the podcast to explain what's going on in DC. And guess whose name is in this article? Guess whose

• 47:26Ryan Sean Adams?

  name is on the lawsuit? My own co-host, if I can find it, David Hoffman. Where are you? There he is. David Hoffman says, and David Hoffman, a digital asset manager. There you go. Digital asset manager, you. But let me read what's going on here. This is from Jerry Britto from Coin Center. He is the lead at Coin Center. "Today, Coin Center filed suit in federal district court against OFAC," that is a branch of the Treasury, "challenging its authority to sanction Tornado Cash immutable smart contracts." You guys remember that. Tornado Cash was sanctioned, so no US citizen can legally use Tornado Cash, a privacy mixer on-chain on Ethereum. Jerry goes on, "Not only are we fighting

• 48:09Ryan Sean Adams?

  for privacy rights, but if this precedent is allowed to stand, OFAC could add entire protocols like Bitcoin or Ethereum to the sanctions list in the future, thus immediately banning them without any public process whatsoever. This can't go unchallenged." Can you imagine that, the slippery slope here? "We intend to win this challenge, even if it's necessary to go to the Supreme Court, and we'll keep you posted as the case unfolds." You can read more about our suit here. A big thank you to our co-plaintiff, Patrick O'Sullivan, David Hoffman, and another Twitter handle here. And this is the actual filing itself. This is the first page on it. Listed as plaintiffs are Coin Center, Patrick O'Sullivan, John Doe, and David Hoffman.

• 48:53Ryan Sean Adams?

  Hoffman as plaintiffs versus Janet Yellen in her official capacity as Secretary of Treasury, Department of the Treasury, and it goes on. And the entire complaint is listed here. I might read some sections on it, but David, I know you can't say everything about this case as a co-plaintiff. But what can you tell us? Why did you get involved in this? And what specifically is your role as a co-plaintiff? Like, what are you filing this complaint against?

• 49:24David Hoffman?

  Yeah, so yeah, so I'm suing Janet Yellen and Treasury because I received the dusting from tornado cash to David Hoffman dot ETH. I don't know who sent it to me. Permissionless Ethereum sent me money that is now OFAC, OFAC against OFAC sanctions. And so as a result of that, because somebody has sent it to my public address, which I couldn't prevent them from doing that, I now have to, I had to file a report with OFAC saying, "Hey, somebody did this to me," had to take time out of my day, file this stupid report, like do all these stupid things. And then every single year, Ryan, for the rest of my life, I have to do it again. And so next year, I'm going to have to file the same report saying, "Hey, still have this illegal money.

• 50:07David Hoffman?

  I still control it. It's still in my wallet. I'm not a criminal." And I have to do that next year, and I have to do that the year after that, and I have to do it the year after that, and the year after that for the rest of my life. And the thing is, Ryan, if somebody sends me ETH from tornado cash again, I have to do that again, every single time. And so I'll file two reports, and I'll file three reports. And so like the Treasury, as a result of their, in my mind, illegal listing of a smart contract, which I can't do, in my mind, in my opinion, I have to spend my life, my time, doing this stupid bureaucracy stuff that I don't think I should have to do. And so this is an injury, and I'm suing Janet Yellen and the Treasury.

• 50:46Ryan Sean Adams?

  It's not only that, as I understand it, David, it's unclear whether those that were dusted, yourself included, but also like, like some celebrities, right? Jimmy Fallon, I think, was dusted. It's, it's unclear.

• 50:58David Hoffman?

  Shaquille O'Neal.

• 50:59Ryan Sean Adams?

  It's Shaquille O'Neal. It's, it's, you're fighting for all of them. You're fighting for Shaq. You're fighting, you're fighting for Jimmy Fallon.

• 51:06David Hoffman?

  I don't want them to have to waste their time either.

• 51:08Ryan Sean Adams?

  It's not just wasting your time. I know that's a part of it, but it's also, as I understand it, Treasury has not said whether they could legally, like legally, it seems like Treasury's stance is you are breaking the law even by receiving this. And so if you file, then you are a good citizen, thank you very much. But they're only committing to deprioritize charging you for, for this illegal action that you've undertaken. And what is the illegal action? Receiving some dust that somebody sent you and these other individuals without their permission from Tornado Cash. So this is awesome. I am so glad that Coin Center is stepping up here. David, it's awesome that you're doing this, man. Like, I appreciate it. We appreciate it.

• 51:52Ryan Sean Adams?

  The Bankless community appreciates it. It's Bankless AF to take this to the court system. And I'm proud of you, dude. Like, this is really cool. This is, I think this is a cool moment for crypto. By the way, I, I will say, this isn't the only lawsuit that we have. So we have two irons in the fire as a crypto industry. So there's the Coinbase lawsuit that's going on in parallel. And then there's this one from, from Coin Center. And I think that the hope is we have two irons in the fire, two approaches. One of these either wins, or it gets all the way to the Supreme Court, and then something happens. And the big macro fight here is the question of whether an American citizen can have on-chain privacy or not. All right?

• 52:37Ryan Sean Adams?

  And we have these, we have these rights on the internet. I, I want you to know, every time you use encrypted communication protocol like HTTPS or something like this, or you send encryption without a social media company spying on you, or without the government spying on you, every time it's encrypted, we have that in our communication protocols, right? Are we going to, as a country in the US, allow citizens to have this in our value transfer digital protocols? That's what's at stake here. And if we lose this, as Jerry Brito was saying, we might lose the, the larger battle of having a censorship, making it...

• 53:15Ryan Sean Adams?

  They could make it illegal to run an Ethereum validator in the US, for instance, right? That is kind of the slippery slope. Why? Because unless you're running an OFAC,

• 53:27Ryan Sean Adams?

  OFAC sanctioned compliant ETH validator, you are maybe breaking the law, right? So we have to take this to the court system. It's a big, bold move. And I just want to say on the behalf of the whole bankless community, everyone in crypto, we appreciate it, man, and we're cheering you on. I know you can't talk about it very much more. The good news is I can, all right? So I'm going to be keeping the bankless nation updated a bit more. And in addition, guys, to cheering David on, what you can also do is donate to Coin Center, because they are funding all of the legal expenses to make this happen. David, as I understand, this is not coming out of your pocket, right? So they're funding this, they are representing, they're paying all the legal fees to take Janet Yellen and Treasury

• 54:12Ryan Sean Adams?

  to court over this. Is that right?

• 54:13David Hoffman?

  Yeah, that's correct. Yeah, I could not do this without their support. So like, it's like David's face in the front, but it's entirely Coin Center in the back.

• 54:22Ryan Sean Adams?

  Coin Center mullet?

• 54:24David Hoffman?

  Coin Center mullet, yeah. So thank you, Coin Center, for all of the support and helping spearhead this. Coincenter.eth is where you can send money for, if you would like to contribute. At DEF CON, people, this went out, and so while I was walking around at DEF CON, people were going up and, hey, like, congratulations on like, the lawsuit. I'm like, oh, I guess congratulations.

• 54:46Ryan Sean Adams?

  But seriously, you know, congratulations. And I think it's going to take all of us kind of standing up if we're going to be able to protect our digital rights in the 21st century here.

• 54:54David Hoffman?

  And a quick, quick speed, a quick speed run through, remember that before Bitcoin episode that we did? Like, we got, cryptography was made available because of a series of lawsuits that individuals sued the government and won in court. And that is why we have cryptography. And now we're just

• 55:10Ryan Sean Adams?

  1980s, early 90s. It was on the back of giants. So we actually have the rights that we have today.

• 55:16David Hoffman?

  And now we're doing it all over again, but now with cryptocurrency. So, running it back.

• 55:22Ryan Sean Adams?

  Let's make history. All right, coming up next, guys, we got a lot going on, including a whole bunch of hacks that happened. October was Hack Month in crypto. Also PayPal getting a little authoritarian. Also PayPal is going to fine you $2,500 if you're politically incorrect, maybe because you said something on Twitter. We'll talk about that story. It's partially true. Partially, they've walked it back. And also, the SEC is coming after the bored apes of Uka Labs. We'll talk about all of that and more when we get back. But first, we want to thank the sponsors that made this episode possible.

• 55:56David Hoffman?

  Arbitrum One is pioneering the world of secure Ethereum scalability and is continuing to accelerate the Web 3 landscape. Hundreds of projects have already deployed on Arbitrum One, producing flourishing DeFi and NFT ecosystems. With the recent addition of Arbitrum Nova, gaming and social dApps like Reddit are also now calling Arbitrum home. Both Arbitrum One and Nova leverage the security and decentralization of Ethereum and provide a builder experience that's intuitive, familiar, and fully EVM compatible. On Arbitrum, both builders and users will experience faster transaction speeds with significantly lower gas fees. With Arbitrum's recent migration to Arbitrum Nitro, it's also now 10 times faster than before. Visit arbitrum.io, where you can join the community, dive into the developer docs, bridge your assets, and

• 56:41David Hoffman?

  start building your first app. With Arbitrum, experience Web 3 development the way it was meant to be: secure, fast, cheap, and friction-free. In all of my years in crypto, I have never been hacked, scammed, or lost money to a thief. And a lot of that credit goes to my Ledger hardware wallet. The Ledger Nano X and the Ledger Nano S Plus hardware wallets allow users like you and me to secure and manage all of our crypto assets and our NFTs, all with the security of storing users' private keys offline and out of reach from hackers. The Ledger Nano X is the perfect hardware wallet for managing your crypto and NFTs on the go, because it connects to your phone with Bluetooth and has a nice big screen for easy transaction readings. Ledger has also upgraded the iconic Ledger Nano S and made the new Ledger Nano S device more DeFi and

• 57:25David Hoffman?

  NFT friendly, making it the perfect hardware wallet for beginners. Ledger has truly maximized for both ease of use and security. So discover which Ledger device is best suited for your journey by going and visiting shop-ledger.com.

• 57:37David Hoffman?

  Ryan, it is only the second week of October, yet we have hit all-time highs in hacks. So not necessarily good news, but so far, October is the biggest month ever for hacks. $718 million across 11 different hacks. This year, there's been a little bit more than $3 billion across 125 hacks. And of course, it's always cross-chain bridges, which has always been the weakest link in this entire industry. It's accounting for 64% of this year's losses. So congratulations, October, for breaking the record of hacks. And just another quick show of the Ethereum Layer 2 ecosystem. You eliminate bridges as much as possible in the Layer 2 roadmap. You kill the bridges.

• 58:19David Hoffman?

  And so cross-chain bridges, Layer 1 to Layer 1, sidechains, they're the weak link. They're the reason why we have all these hacks. Optimism Superstructure, or Superchain, which we're going to talk about at some point in the future. ZK Sinks, like Hyperstructure, all of these like single-circuit Layer 2s are the bridged, minimized, scaling ecosystems. And that's why, that's how we're going to eliminate all of these hacks. So again, that's why we're always bullish on these Layer 2s. Anyways, congratulations to October for breaking records.

• 58:49Ryan Sean Adams?

  Yes, and not bullish on centralized bridges, not bullish on bridges. This was another hack that happened this week. A DeFi trading platform called Mango just lost $100 million in a hack. That's included in those October numbers. And I think the hack here, David, was an Oracle attack of some sort. What's crazy is...

• 59:09David Hoffman?

  Oh my god, it's so crazy.

• 59:10Ryan Sean Adams?

  Yeah, okay, so why don't you read this out? So the hacker stole $100 million in this protocol, exploited some kind of like an Oracle attack, where he pumped the price and then through that exploit, ran away with a bunch of money. And then he said he was sorry and he posted to the governance forum, "Hey guys, please don't prosecute me." Why don't you read what this tweet is, David?

• 59:32David Hoffman?

  Yeah, so the hacker who stole a bunch of these Mango tokens, posted a governance proposal to... The hacker said, "Hey, I will pay back the DAO, a significant amount of the money, like most of the money, 70 or 80%, and if the DAO agrees to not pursue legal action." And then, because the hacker owns all of the tokens, the hacker voted yes.

• 1:00:00Ryan Sean Adams?

  To the governance proposal.

• 1:00:02David Hoffman?

  To the own governance proposal, using the funds that he stole.

• 1:00:06Ryan Sean Adams?

  I don't know. Checkmate Mango holders.

• 1:00:10David Hoffman?

  Is code law? I don't know, but oh my God, this is.

• 1:00:13Ryan Sean Adams?

  I don't think this kind of thing holds up.

• 1:00:15David Hoffman?

  I don't think this holds up in court.

• 1:00:18Ryan Sean Adams?

  What's the, what's the analog? I guess maybe you go.

• 1:00:21David Hoffman?

  I have no clue, dude. There is no.

• 1:00:23Ryan Sean Adams?

  Go to Wells Fargo, steal a whole bunch of their money, steal a bunch of their shares and then go to their shareholder meeting and they're like, hey, uh, don't prosecute me and I'll give you most of the money back. And then you vote?

• 1:00:33David Hoffman?

  Yes. Yeah. Like you somehow steal all the certificates and I now own Wells Fargo because I own their certificates, but you don't own them because you stole them. That's doesn't work.

• 1:00:44Ryan Sean Adams?

  Yeah. Only Warren Buffett could, uh, has the Wells Fargo, um, shares to pull this off, I guess. I actually think there's a take here and that is, um, we've got to get really serious about hacks. Okay? So $3 billion this year in hacks. That's a lot and year's not even over, David. And, uh, do you, do you notice when things started to turn ugly in the U.S. from a regulation perspective? We're just talking about tornado cash. Um, it happened after the $625 million Ronin sidechain hack. Do you remember that? And this was when North Korea allegedly, uh, some attackers from North Korea made off with millions of dollars and they pushed it through tornado cash. And this is when the, I feel like the U.S. popped its head up and, and

• 1:01:26Ryan Sean Adams?

  the, uh, the defense apparatus of the U.S. said, uh-uh, we don't like this. This is like, um, you know, against our national security interests to have these, because what's happened is North Korea just got a new business model and that business model is hacking crypto. So I, I want us like, one of my thoughts here, one of my messages to crypto, uh, here, the industry is we think we're playing with these digital NFTs and these experimental DeFi games, but this has actually moved beyond that. I think crypto has taken, uh, center stage in geopolitics, the geopolitical scene. That's what we've entered. We have nation states that are attacking protocols now. Not this guy from Mango. That was just some guy.

• 1:02:09David Hoffman?

  That's a guy.

• 1:02:09Ryan Sean Adams?

  But in other cases, the running sidechain, who did the, the BNB chain hack? We don't know yet. And while I think this is inevitable and I think it's progress, um, hacks really matter. I think we no longer get to say, ah, it's going to happen. Hacks are going to happen. I think that's true. And I understand that's part of the experiment, but could you imagine a hack that was like? 3% or 5% of all ETH supply and it went in the hands of like a rogue nation state. How is the US national security apparatus going to react to that? It's going to increase pressure and suppress citizen freedoms as a result of that. So I guess my message here is we as an industry need to get really serious about defense

• 1:02:54Ryan Sean Adams?

  and spend more resources on crypto security and preventing these kinds of things moving forward.

• 1:02:59David Hoffman?

  Right. And again, it's one part, let's write better smart contracts. And it's another part is let's create systems that have less surface area for attack.

• 1:03:08Ryan Sean Adams?

  Yeah, less bridges.

• 1:03:09David Hoffman?

  Yes, less bridges. Bridges, bad.

• 1:03:12Ryan Sean Adams?

  Bridges, brat. Oh, speaking of bridges, here's a cross protocol, a bridge protocol. They just gave an airdrop. What's going on here?

• 1:03:17David Hoffman?

  It's different, though. It's an oracle bridge that lets you go from a one secure bridge to another secure bridge. And again, like-

• 1:03:23Ryan Sean Adams?

  It's not a multi-sig bridge.

• 1:03:25David Hoffman?

  It's not a multi-sig bridge. And when optimism and ZK Sync have their perfect fraud proofs and they have their circuits down, like the optimism superchain, like the many, many, many trains where there's 1,000 layer three chains, there's not a bridge there. There is a single circuit. There is no bridge. That is the cool thing about optimism and all these layer threes and app chains on the layer two thesis. The bridges are gone. And so when you use this across, which is this airdrop we're about to talk about, and you hop from one bridge to another, you're using a bridge, but you're only vulnerable in that one moment that you are using it, not persistently through all of time. And so anyways, sorry, ACX across has an airdrop. So if you've ever used across, perhaps multiple times, there's a different criteria for being

• 1:04:10David Hoffman?

  eligible for the ACX token. But a billion tokens has been minted and 125 million tokens will be distributed through an airdrop for the people who have contributed to across. I am not local to my wallet at the moment, so I don't know if I got it, but I'm a frequent accroser, bridge or hopper, whatever you want to call it, not hopper, because that's hop. But I'm probably, I think I got this airdrop, so I'm going to go home and claim it as soon as I'm done with DevCon.

• 1:04:35Ryan Sean Adams?

  You guys, we'll include a link where you can check that. It's across dot two slash airdrop and you could see if you're eligible for that. David, there was a ruckus on Twitter as well that poured out about PayPal censorship. And the first tweet I saw about this was from David Marcus, formerly Facebook. Now he's working on a Bitcoin lightning project. I believe he used to work at PayPal too. He's like an executive at PayPal. And this is as a result of PayPal issuing new terms of service for PayPal users. David Marcus says this, "It's hard for me to openly criticize a company I used to love and gave so much to, but PayPal's new terms of service goes against everything I believe in. A private company now gets to decide to take your money if you say something they disagree with. Insanity."

• 1:05:20Ryan Sean Adams?

  And he links to a post that has now been taken down. But the post from PayPal explicitly stated that they plan to target anyone who is sending, posting, publication of any messages, content, or materials that, quote, "promote disinformation." And how would they do this? The company PayPal would just deduct $2,500 from your PayPal account if they deemed you were in violation. Okay, so PayPal has since backtracked to this, has called it a mistake. It's not very, it's not clear how these terms actually came to be and like why they were published, but they're distancing themselves from this and they are backtracking from it.

• 1:06:04Ryan Sean Adams?

  Here's a headline from Fortune, "PayPal Tells Users It Will Find Them $2,500 For Misinformation, Then Backtracks Immediately." And of course, you know, there is a take here that maybe PayPal genuinely made a mistake. Who knows how this language got in? You know, it's hard, it's hard to rationalize an explanation for how this could be accidental, but maybe some internal conversation that they never wanted to get out something like this. The, I guess the devil's advocate take on that is, well, maybe they were just like floating this idea and hoping it would go unnoticed and there was such a reaction from the entire

• 1:06:45Ryan Sean Adams?

  Entire ecosystem, not just crypto, but outside of it to this, that they decided to withdraw and detract. But the big concern here is obviously, imagine a bank, a bank account like PayPal, digital account. You say something on Twitter, maybe I don't like the fact that you're suing Treasury, David, and I'm PayPal and it's you know, against my policy, or maybe it's, you tweet something and it's quote unquote misinformation. I can then just shut down your account. I can more, I could take money out of your account.

• 1:07:16David Hoffman?

  Hey, we don't serve as people who sue the government. Like, could you imagine?

• 1:07:21Ryan Sean Adams?

  Why not? Right? Like, you just don't really know where this kind of things ends. What do you think about this? Is this a tinfoil hat conspiracy?

• 1:07:29David Hoffman?

  No, no, not at all. I'm much less gracious than this. And I think that it's actually quite obvious that like, somebody chose that number. That number is specific. Somebody said, you know what we should do? Like, we should fine people $2,500. We, like, it doesn't, the fact that that number is explicit, it's not that like, there's this detail of like PayPal reserves the right to deduct funds from your account if you say something like bad or something, maybe you're a terrorist, I don't know. But like, somebody had to choose $2,500. So somebody wrote that number down and said, this is the amount of money that we are going to deduct from your account if, under our discretion.

• 1:08:08Ryan Sean Adams?

  For misinformation spreading.

• 1:08:10David Hoffman?

  Whatever, yeah. And like, and the reason why this is, so there's that, there's that take. But also, like, we know the world of payments is just a huge era of censorship. This is what, this is what, like, Amin Soleimani has been doing with like, payment channels and bank chain. So like Mastercard, Visa, they won't support like sex work, for example. That is censorship.

• 1:08:31Ryan Sean Adams?

  Marijuana industry is the same. Bankless has been kicked out of a bank accounts. Bank of America, we're kicked out of Bank of America for actually transferring money to Coinbase.

• 1:08:41David Hoffman?

  Right.

• 1:08:41Ryan Sean Adams?

  And this happens.

• 1:08:42David Hoffman?

  Yeah. And so we know the payments industry is ripe with censorship. I don't know like, why it's so much, but it's like, you can't run like a sex work company or like a pot company without getting censored. And so this is part of like, the big story of like, why we need permissionless payment systems? Because you don't want to get de-banked, deplatformed.

• 1:09:01Ryan Sean Adams?

  Yeah, and I think they are right now advertising crypto for us, and this is why we need to go bankless, of course. By the way, another reason to go bankless is to add insult to injury, David. You know the Celsius hacks? A lot of people with deposits in Celsius lost a heck of a lot of money, myself included, RIP. It seems like they also exposed all Celsius users to a data leak, okay?

• 1:09:27David Hoffman?

  Insane, dude.

• 1:09:28Ryan Sean Adams?

  This came about in, I guess, in the court system, some court documents that were leaked that basically doxed the names, because of course with Celsius, every accountant is AML KYC, so they have the identity, and the amount of money individual Celsius holders actually had. And there's a way you can kind of back through some of that data and find specific crypto addresses, public crypto addresses that these individuals held as well.

• 1:09:56David Hoffman?

  Nice.

• 1:09:57Ryan Sean Adams?

  Essentially just doxed the entire Celsius user base. As if losing your money isn't enough, now you've lost your entire privacy and everyone knows the net worth that you had on Celsius.

• 1:10:08David Hoffman?

  Just kicking you in the gut on the way out, like absolutely insane, man.

• 1:10:13Ryan Sean Adams?

  Can you believe it?

• 1:10:14David Hoffman?

  That Crypto Grifters video I made where I was like, Alex Mischinsky is the greatest grifter of all time, thank God that's aging so well right now. The other crazy thing is like, remember last week, we talked about the Crypto Lark and how he got Zach XBT'd because of, you know, like pumping tokens and then dumping them? Crypto Lark withdrew $2.5 million right before it froze. Like, I don't know, right before? I don't think there's a conspiracy here. Maybe it was just like luck that he withdrew 2.5 before it got frozen. But Crypto Lark, the scammer, got out.

• 1:10:43Ryan Sean Adams?

  Geez, man. Doesn't feel right.

• 1:10:47David Hoffman?

  But you still have money inside of Celsius, don't you, Ryan?

• 1:10:50Ryan Sean Adams?

  No, it's gone. I don't know where it is. I had money in Celsius, but yes. I actually don't know what the status of my information is, but it's not looking good, David. RIP. RIP on that, too. Double RIP. So yeah, I'm right there with you, Bankless Nation, if you got sucked into this. Fortunately for me, it was just like, I was just kind of testing Celsius and this was um.

• 1:11:13David Hoffman?

  Play money? Sure.

• 1:11:15Ryan Sean Adams?

  Ish, yeah, ish, still sad.

• 1:11:17David Hoffman?

  Wasn't play money for everyone, so that's unfortunate.

• 1:11:19Ryan Sean Adams?

  Yes.

• 1:11:19David Hoffman?

  And also sorry to people that got doxed, but.

• 1:11:21Ryan Sean Adams?

  Yeah, totally. It's brutal. Um, Board Ape Creator facing SEC probe over unregistered securities offering. So going after you, Ugo Labs, SEC, maybe going after, probing first. First you probe, you know, then you kind of drop your case. So SEC doing the old probe. And Ugo Labs, of course, the creators of Board Apes, very prominence, number, is it number one? Number two, NFT project?

• 1:11:46David Hoffman?

  Number one.

• 1:11:47Ryan Sean Adams?

  It's number one right now, okay?

• 1:11:48David Hoffman?

  Number one in market cap, not culture in my mind, but that's just my take.

• 1:11:54Ryan Sean Adams?

  What, what's interesting is um, like, one of the line items here is the SEC not only investigating Ugo Labs or the sale of the digital assets, right, like they have a token, some other things. But the SEC is examining whether certain NFTs from the company are more akin to stocks and should follow the same disclosure rules. The SEC is also examining the distribution of Apecoin. Here's the thing, David, like, I don't know what parts of the Apecoin ecosystem and all the various parts, like, what parts of those might be securities and what parts might not be. But are they saying that like, the JPGs themselves, the Ape JPGs themselves are securities?

• 1:12:36David Hoffman?

  They are, they are investigating it, yeah, the JPG is a security.

• 1:12:39Ryan Sean Adams?

  And let me just say, like, a probe itself is punishment. It's investigation. I mean, it's legal expenses, it's punishment, it has a chilling effect on the industry. And here's my beef with the SEC in this type of action is, we don't actually know because they refuse to clarify. Are NFTs themselves, the JPGs, are they securities? Are baseball cards securities? Are antique cards securities? Are pieces of art securities? Of course not, okay? Do monkey JPGs really need a 10K filing? All right?

• 1:13:08David Hoffman?

  Well, okay, so I'm gonna put on my SEC hat. My SEC hat is, Ugo Labs is building out of. Metaverse, right? They took investment from like A60Z and many other people to build out like this or Yuga Labs, Bored Apes Metaverse. And in that Metaverse, a financial asset is a Bored Ape. Uh, and so the Metaverse has some sort of value to it and the Bored Ape is correlated or associated with that value. So is Apecoin. Uh, and so it kind of actually does feel like a Howie test, Ryan. I can't believe I'm taking the side of the SEC. But also it just goes to show that we need better laws because it's a goddamn monkey picture. It's not a security. And we need to have permissionless building or else this industry is not going to express itself the way it should.

• 1:13:51Ryan Sean Adams?

  Here's the thing, it's just the SEC, they, they want to take a leadership position in crypto, but all they're doing is vaguely through, um, like through, through these sorts of charges and probes, telling us very obscurely what we can't do. But they're not telling us what we can do.

• 1:14:07David Hoffman?

  Right. They're just suing us. Yeah.

• 1:14:09Ryan Sean Adams?

  Yes. They refuse to give us basic clarity. That's my big charge. And I, I think that, um, as a result of this, like, so, so for instance, um, I mean, it's probably no secret. We'd like to do more with Bankless with, uh, some sort of membership NFT, right? What's the status of that thing? How do we make sure that that's, how do we make sure that that's not, like Gary Gensler's position is.

• 1:14:33David Hoffman?

  Ryan Sean Adams versus the SEC, that's what happens.

• 1:14:36Ryan Sean Adams?

  Here, boy, do we need another one?

• 1:14:39David Hoffman?

  I'll take the treasury. Yeah, you take the treasury. I'll take the treasury. You take the SEC.

• 1:14:43Ryan Sean Adams?

  Hey, what about this world where Gensler becomes the next Janet Yellen?

• 1:14:47David Hoffman?

  Oh God.

• 1:14:48Ryan Sean Adams?

  That's a world that could happen too.

• 1:14:50David Hoffman?

  Can we, can I get a poe up for suing the treasury?

• 1:14:53Ryan Sean Adams?

  Only if you win. Sorry, dude. You gotta win for us, alright? Uh, anyway, craziness. Um, again, I, I'm sure there are things that are clearly securities probably, but like, we don't know what the bright lines are. And it feels like our regulators aren't willing to actually talk to the crypto community. And give us some clarity here. I just want some good faith, David.

• 1:15:17Ryan Sean Adams?

  On the, on the, on the releases side, LT Beat, you know LT Beat because they're showing you total value locked for different Layer 2s. Now they're also showing you total value locked for bridges. And they're doing risk analysis of bridges, which feels very relevant. So you can look at the Polygon POS Bridge, MultiChain Rainbow Bridge, Ronin V2 Bridge, Avalanche Bridge, all of the bridges, and you can see how risky they actually are. So this feels like a very timely release from Layer 2 Beat. And you could find that at Layer2Beat.com. Pretty badass. What's this one, David?

• 1:15:50David Hoffman?

  Yeah, this is Nethermind making an announcement that they have taken Uniswap, kind of, and ported it over to Starknet. So remember when we were going through all of the ZK EVM conversations? I was like, ZK Sync, EVM compatible, Scroll and Polygon going after EVM equivalents. And then there's Starknet, which is just like, we don't care about the EVM. We're building our own thing. It's called Cairo. So they have taken Uniswap and they have rewritten it, tinkered it a little bit, because that's what you have to do, and then applied it to the Starknet ecosystem. So a Uniswap sister thing, which is not exactly what Uniswap is, because they had to change it, is now on Starknet and they are calling it, what are they calling it? UniStark, because they had to rewrite it for Starknet. So UniStark, which is a Uniswap flavor, is now on Starknet.

• 1:16:35Ryan Sean Adams?

  That's really cool. Obviously, you get the scalability of Starknet. Do you see this, David? Blockchain address is now available in Google Search. So if you just plug in a blockchain address, Google will display it on EtherScan. I like this. Cool. I also worry about like, Google data surveillance and, you know,

• 1:16:57David Hoffman?

  It's just pulling from EtherScan. It's not any more invasive than EtherScan. It's all public.

• 1:17:01Ryan Sean Adams?

  Sure, sure. I guess this is true. Here's what I worry about, David. You start plugging in all of your ETH addresses, for example, in Google. Google already has a profile for David Hoffman, where it knows your search history, it knows like your browser history, it knows a lot of data about you. It knows maybe where you are in Google Maps.

• 1:17:20David Hoffman?

  You're also complaining about the business model. Zapper and Xerion. I don't, I'm, I, I'm pushing back on this.

• 1:17:25Ryan Sean Adams?

  I'm complaining. I, I'm only complaining because it's Google and like Zapper and Xerion do not have the scope of a data profile on me that a Google has. And so I just worry about these kind of long-term effects. I'm, I'm happy that Google added this. I just, again, it's, it's kind of like a, how do we get out of this like Moloch trap of constant surveillance, tech surveillance of us? And that's the part that always gives me pause. But anyway, in the meanwhile, good job. David, you released a new Bankless video here. What's this?

• 1:17:57David Hoffman?

  Yeah. So this is that new Bankless YouTube account. There's new YouTube, uh, new YouTube video. It's like these hyper optimized 15-minute explanation of what Ether is. It's basically my triple point asset thesis, but if you're into these new videos, go check it out. All right. Uniswap Labs is announcing a $165 million raise in Series B funding to bring powerful simplicity of Uniswap to even more people. So congrats on Uniswap Labs. They are raising, and I believe that is the only raise of the week. However, Ryan, I can see on the ground at DevCon that definitely there is some deals being made. There are deals being inked on the floor at DevCon. So there, there is some activity.

• 1:18:30Ryan Sean Adams?

  It's definitely the biggest raise of the week. I bet there are others that we missed, but one thing that's happening, we know, is Uniswap, as a result of this funding, Uniswap Labs is hiring. The reason we know that is because they're on the jobs board. It's our weekly reminder to tell you to get a job in crypto. As David dances, I'm going to read some jobs off for you. Uniswap Labs needs a Director of Product Management. David, I think that's not. Okay. Uh, they also need a Developer Relations Lead.

• 1:18:56David Hoffman?

  Probably not technical.

• 1:18:57Ryan Sean Adams?

  Probably ish. Senior front-end engineer at Uniswap, senior backend engineer, those are definitely technical. Solid World Dow needs a senior Web3 developer, Rubicon Smart Contract Engineer, Bankless still looking for a social lord. Optimism hiring a bunch, so is Rabbit Hole, so is CoinShift. Go head on over to bankless.pallet.com/jobs and sign up. So you get these in your inbox. Get a job in crypto. Now's the time. Guys, we got a lot more coming up, including some hot takes from crypto Twitter. David, you've got some takes on the Coinbase documentary. I haven't watched it yet, but you have. We'll talk about that and more when we come back, but before we do, we want to thank the sponsors that made this episode possible.

• 1:19:34David Hoffman?

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• 1:20:17David Hoffman?

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• 1:21:00David Hoffman?

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• 1:21:10Ryan Sean Adams?

  Guys, we're back with Takes. First take, David, you watched the coin documentary. It's called Coin: A Founder's Story. What's your review? How many stars?

• 1:21:18David Hoffman?

  Uh, 5. 5 out of 5 stars. I thought it was super, super good. And there's also so many more movies about Ethereum, about crypto coming out, like documentaries. And I think it's gonna be a really actually great onboarding and PR tool for crypto, movies. It's like, yeah, let's tell you the story, the long-term story.

• 1:21:33Ryan Sean Adams?

  Real humans.

• 1:21:34David Hoffman?

  Real humans.

• 1:21:34Ryan Sean Adams?

  Not just the shadowy supercoaters.

• 1:21:36David Hoffman?

  Yeah. And Brian and Coinbase has always kind of been like a black box. It's a little bit, hey, what's going on over there? Like, what's you guys up to? Like, not for any particular reason. Brian's just kind of an introverted person. And every time I learn more about Brian, either through his interview with Peter McCormick and then our podcast with him, he doesn't do very many public things. So this documentary was awesome, just to see just the story of Brian and Coinbase. And I tweeted out, every time I learn more about Brian, I discover more reasons to respect him. And so he's just a guy that saw, first Coinbase was a wallet. And he was like, struggling to find like a business model, because no one had any Bitcoin. So it's like, oh, I'll just put in a buy button in the wallet, and I'll let people buy Bitcoin, so they can use my wallet. And then he learns that

• 1:22:21David Hoffman?

  like, actually, that's the business, is selling Bitcoin to people that want to buy it. And then the ball starts rolling downhill. And Coinbase just becomes huge. And him and Fred Arson started building this thing. So like, as I've learned about Brian, he's gone from like, for me, just a successful founder, to an industry leader, to like, a straight-up personal hero. Like, that guy has like, done so much for the industry. And I don't think we give him enough credit. But that's my take of the week. The coin movie was great, and Brian's a great guy.

• 1:22:48Ryan Sean Adams?

  That's awesome. I think, David, in like, the crypto banks, we're gonna have some banks that like, stand up and uphold crypto values for us. I'm hopeful Brian Coinbase's among those. I think there will be sadly, some other crypto banks that kind of sell us out to the regulators and politicians, and are not going to be fans of DeFi. And those will emerge too. But I think Brian's always been here for the right reasons. And yeah, I'm like, excited about that. David, this is a take from a congressman, Representative Bill Huizenga.

• 1:23:20David Hoffman?

  Yeah, and Bill says, "The fact that Gary Gensler has appeared twice with Jon Stewart before attending an oversight hearing with the financial crimes and enforcement, and also the Democrats, just like, you know, doing his job, is alarming. Appearing before Congress is part of your job," he says to Gary Gensler. "We look forward to seeing you in 2023 under new leadership." So a congressman, a House of Representatives congressman, is saying, "Gary Gensler, stop going on Jon Stewart and start..." Start showing up at your job.

• 1:23:48Ryan Sean Adams?

  Stop trying to be an influencer.

• 1:23:50David Hoffman?

  Stop trying to be an influencer. Yeah, God. Ryan Sean Adams, here's a take from Ryan saying, "Apparently, the era of easy money is over and crypto was just a speculative asset bubble that will never recover. And there was never real, anything real here to begin with, and you should have sold the top, you idiot." And then he finishes saying, "Hello 2018, good to be back." Wait, what do you mean, "good to be back"?

• 1:24:08Ryan Sean Adams?

  Thanks for nailing the tone. By the way, thanks for nailing the tone of that. It was just definitely sarcastic. It just feels very 2018 to me. Like, at a time where everyone's saying crypto is over, it was always speculative asset, there's never anything real. Go to Reddit and try to say something positive about NFTs right now. You just get absolutely brigaded, and this reminds me so much of 2018, honestly, where we had kind of the backlash in the back of ICOs. And Ethereum was like, "Nothing", and there was no such thing as DeFi, and all ICOs and all of crypto was a scam. Feels like 2018. Now, I know there are some differences. We've got war in Ukraine, we have like massive macroeconomic pressures and things we didn't have in 2018.

• 1:24:50Ryan Sean Adams?

  But that's what everyone says. There's always, in 2018, people are like, "No, this is, this is different than the 2015 bear." Because like, in this bear, XYZ, right? And like, everyone always says that. Anyway, to me, it's kind of home, it's back to 2018. It'll take some time to recover, but I'm super confident we're gonna come back stronger. It just might take a little bit. David, what are you excited about this week, man? And why is it DevCon?

• 1:25:15David Hoffman?

  Oh my God, DevCon has just been so fun, man. And this was a picture of me at Rave last night, Ave's like, you know, regular party that they always throw. And this is Dankrad. So Dankrad Feis, this guy, super German, always wears a collar in the middle of this, in the middle of this rave.

• 1:25:33Ryan Sean Adams?

  Hey, you said there were no suits. He's, he's got the sports coat on.

• 1:25:36David Hoffman?

  It's different, it's different when it's Dankrad. Dankrad, Dankrad doesn't count. He's just German. So I took this, this photo with Dankrad at, at Rave last night. Yeah, I mean, like, it's just, it's so great to see all the builders around.

• 1:25:49Ryan Sean Adams?

  This is like a big brain researcher behind ProtoDex, by the way.

• 1:25:53David Hoffman?

  It's like, knows crazy polynomial math, and there's like rave lasers in the background.

• 1:26:00Ryan Sean Adams?

  Crypto is great, man. I love it.

• 1:26:02David Hoffman?

  And it's like, the energy here is so awesome. And like, even though it's the bear market and people are sad about the prices. And my metaphor for these markets is like, in the bull market, it's like a bonfire, but in the bear market, like, the fire starts to dwindle. But the fire at DevCon is really strong. And like, even the Boys Club event also last night was just, the energy at Boys Club was crazy. And it's cool because Boys Club is like, I don't really think like Boys Club and like, core Layer 1 Ethereum Protocol development, like, that's kind of like, they don't really mesh.

• 1:26:32Ryan Sean Adams?

  Boys Club, by the way, is a, it's a Web 3 DAO that-

• 1:26:37David Hoffman?

  It's a social organization. Yeah.

• 1:26:39Ryan Sean Adams?

  Primarily like, representing women and, you know, non-binary people. So when people hear David say Boys Club, it's not like, it's like, it's a joke. It's a play on words, alright? It's not an actual Boys Club for boys. Yeah.

• 1:26:52David Hoffman?

  Yeah. But like, the Boys Club showed up and through like, one of the most high, like, high-energy vitality events, and everyone was having a really good time. And so, like, as like, energy is going out of the space, and it's just a good move by Boys Club, because they throw, that's what they do. They throw really good events.

• 1:27:08Ryan Sean Adams?

  Parties?

• 1:27:09David Hoffman?

  Really good parties. And there's not many like, other conferences out there that have like, enough life in them for them to throw a good event. Because like, you know, no one wants to throw a depressing event. So what do they do? Oh, they go to like, the crypto nerds at the Developers Convention, and then they throw a really good event there, because that's where all the vitality is in this industry.

• 1:27:26Ryan Sean Adams?

  Because developers aren't gonna throw their, they're gonna buy boxes of pizza, okay?

• 1:27:31David Hoffman?

  Yeah. And, and like, the cool thing about DevCon, and why I'm so excited about DevCon, is it's a tech conference. But it goes to very specific cities. It goes, it's not San Francisco, it doesn't go to New York. It goes to-

• 1:27:43Ryan Sean Adams?

  Off the beaten path.

• 1:27:44David Hoffman?

  Bogota. It goes to Ostaka. It goes to Prague. And it's not just a tech conference, it's also a cultural conference. And that's because Ethereum's not just a technology, it's a social organizational technology, it's a movement. And so, it's so, and this is why the DevCon execution team is like, so shout out to Skylar at the EF and everyone else.

• 1:28:02Ryan Sean Adams?

  They got a lot of pressure, by the way, for going to Columbia, because, you know, people are saying, hey, it's too dangerous, like, you can't throw a conference there, it's not large, and all sorts of reasons.

• 1:28:11David Hoffman?

  People do have like, bodyguards and stuff, but like, it's also like, if you just live with common sense, like, you don't get yourself in trouble. I haven't heard anyone getting into trouble. But like, leaning into the culture side of things for every city that we go to, and it's just like, the right branding for Ethereum.

• 1:28:24Ryan Sean Adams?

  What's the next city, David? Next year.

• 1:28:27David Hoffman?

  People are like, this is where people like start to lobby the EFs like, I want to come to my city. So there's like a movement to get people to get the devcon in Turkey, in Istanbul.

• 1:28:38Ryan Sean Adams?

  I think it's going to be somewhere you you don't suspect, right?

• 1:28:41David Hoffman?

  Oh, definitely, definitely.

• 1:28:42Ryan Sean Adams?

  Istanbul would be one of the top places I would not suspect, actually.

• 1:28:46David Hoffman?

  Yeah.

• 1:28:47Ryan Sean Adams?

  Right?

• 1:28:49Ryan Sean Adams?

  Anyway, lots of lots of places.

• 1:28:50David Hoffman?

  That's what I'm bullish on. The fact that devcon is not just a tech conference, it's also a cultural conference. And I mean, it's important. This is where we come together as a community and hang out and make sure that we're not just like face down buried in code all the time or in our world podcasts. That's awesome. What are you bullish on, Ron?

• 1:29:06Ryan Sean Adams?

  I asked a question this week on Twitter. Sometimes you get good answers to questions on Twitter. Sometimes you get bad. I got a lot of good ones. I said this, from the 2015 to 2016 bear market, we got Ethereum. From the 2018 to 2019 bear market, we got DeFi and NFTs. What's going to be the big thing coming out of this bear market, the bear market of 2022 that we're in? And I was just really excited about the range of different answers to the question, because it wasn't just a consistent like, there wasn't like a group think of it's all going to be this, or it's all going to be that. Impact DAOs, DeFi science, refi, web two integrating web three, game fi, broadening of the NFTs

• 1:29:46Ryan Sean Adams?

  to research IP and NFTs like music, video and other verticals, more noob friendly DeFi, social crypto, all of these answers to the question. My answer to this question is probably the layup answer, which is like layer twos. It seems so obvious that coming out of this bear market, layer twos are going to be like the absolute vanguard of crypto. Like they're going to be stronger, they're going to be in higher use. I don't know, David, if you saw the Ethereum quarterly report, you know, state of Ethereum report, like earnings report we released on Bankless last week, Ben put this together for our team. Ethereum is down in just about every category, right? Like revenue is down 86%.

• 1:30:28Ryan Sean Adams?

  You know, DeFi total locked value is down 60%. Stablecoin supply down 21%. Like, it's very clear that we are weathering a major contraction. But the bright spot was, Layer 2s are up 97%, about 100%. And we're doing that in a bear market. So this to me is like, these are kind of the early saplings, kind of on the tree of, you know, future life and future progress. So that's what I'm excited about, that no one actually knows what the next big thing is going to be, tells me that it could be almost anything and it'll be unexpected and that we're pursuing so many different use cases at the same time.

• 1:31:11Ryan Sean Adams?

  And then I just see obvious things like Layer 2s, which are going to be a big deal.

• 1:31:14David Hoffman?

  100%, 100%. Also bullish.

• 1:31:17Ryan Sean Adams?

  All right, man, I know you got to get somewhere real soon for DevCon, but let's get to the meme of the week. What are we looking at here?

• 1:31:23David Hoffman?

  Yeah, this is a, I can't remember what kind of flavor of comic this is, but it's like the guy who's interviewing for a job and the job interviewer is asking, can you stop inflation without causing a recession? And the interviewer he asks says, no, I can't. And then the guy says, okay, you're hired. And then it turns out that this is the Federal Reserve. Cyanide and how it's, that's what this is. Yeah, that was pretty good. Very emblematic.

• 1:31:45Ryan Sean Adams?

  All right, guys, David's got to get to DevCon. I know he's going to be on stage presenting a few things, actually talking, I think, doing a panel.

• 1:31:51David Hoffman?

  Yeah, I am moderating a panel that is definitely stretching my technical ability. It's account abstraction, so I have to finish up doing my research. But it is also the only panel that Vitalik Buterin is on, on the main stage. So your boy's hosting that panel in a second.

• 1:32:04Ryan Sean Adams?

  He chose to do account abstraction as this thing that he wants to talk about, huh?

• 1:32:08David Hoffman?

  Yeah.

• 1:32:09Ryan Sean Adams?

  Shows how important he thinks it is. Well, cool. We'll leave it at this then. Risks and disclaimers, as always, got to tell you that crypto is risky. We're definitely on the frontier. Eth is risky, DeFi is risky. You could definitely lose what you put in, but we are headed west. It's the frontier. It's not for everyone, but we're glad you're with us on the Bankless journey. Thanks a lot.

• 1:32:27David Hoffman?

  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 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

• 1:33:11David Hoffman?

  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.