David and Anthony Discuss the Crypto Meta

David speaks with Anthony from the Daily Gwei about the current crypto meta, price swings, and emerging narratives from around the Ethereum sphere. ----- 🏹 Airdrop Hunter is HERE, join your first HUNT today https://bankless.cc/JoinYourFirstHUNT ------ 📣 SAFE CORE | Smart Wallet Infrastructure https://safe.global/core ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE ⁠https://k.xyz/bankless-pod-q2 ⁠ 🦊METAMASK PORTFOLIO | MANAGE YOUR WEB3 EVERYTHING ⁠https://bankless.cc/MetaMask ⚖️ ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum ⁠ 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle ⁠ 🦄UNISWAP | ON-CHAIN MARKETPLACE ⁠https://bankless.cc/uniswap 👾STADER LABS | ETHX LIQUID STAKING https://bankless.cc/Stader ----- RESOURCES Anthony Sassano https://twitter.com/sassal0x Daily Gwei https://twitter.com/thedailygwei ----- Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures⁠

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

• 0:09David Hoffman?

  The new

• 0:18David Hoffman?

  The start of the stream just like

• 0:28David Hoffman?

  Oh, it's trying.

• 0:34Speaker 01

  Last stream is just always finicky, I've noticed.

• 0:38David Hoffman?

  Oh, no, we've been live, we've been live.

• 0:41Speaker 01

  Oh, we have.

• 0:42David Hoffman?

  Yeah, what's up Anthony?

• 0:43Speaker 01

  Hey man, what's going on? Like if we didn't say anything, we would not want to have on record, right?

• 0:49David Hoffman?

  Yeah, yeah, all the, all the secret shenanigans, back alley dealing that we do right before the stream starts, yeah.

• 0:55Speaker 01

  Yeah, yeah, yeah. Man, what a 24 hours, huh?

• 0:59David Hoffman?

  God.

• 0:59Speaker 01

  The hilarious thing about it is that I slept through literally all of it. I went to bed, ETH was 1700, I got up, ETH was 1700, and it was not until, until I checked the chart that I realized that something actually happened.

• 1:11David Hoffman?

  Wait, wasn't it 1850 when it, when it started dumping? We were way higher.

• 1:15Speaker 01

  No, I mean, I went, well, I went to bed at like 3am my time, um, I don't know what that time is for you, so it was, it was kinda late for me, but, um, and then I woke up like 11am or something, and yeah, it was at the same price, and I, I, I thought we were just crabbing, and then I,

• 1:33David Hoffman?

  Yeah, yeah, yeah. We almost never catch dips when we record the prices section during the weekly rollup, and it was dumping as we were doing the prices, so I was like, oh wow, we're actually getting captured this time. And then the ending price that we moved, before we moved on for the market section to the rest of the, of the rollup, was like 1740, and then I end the rollup and I look, I was like, oh my god, we got so low.

• 1:59Speaker 01

  Oh man, yeah, I mean, I can imagine what it was like for everyone that was kind of awake and witnessing it. Cause I know what it's like. I mean, I've been awake for those kind of volatile periods. But yeah, the amazing thing of sleeping through it was that I felt nothing, right? I got up and I'm just like, oh, okay, we dipped, we did this thing, you know? Apparently a billion dollars was like liquidated or something of leverage. I was like, why are there so many levered apes still in this market? Like, who has the money to do this right now?

• 2:24David Hoffman?

  Well, like my, my idea on that is like, if the longer you wait, the more people take leverage. So like, so like as, as liquidations don't happen, like, like people just like, okay, I'll take leverage now.

• 2:38Speaker 01

  Yeah, yeah, especially if you're going sideways for so long, which is what happened. And like the fact that there's no real new money coming in. I mean, I think we, we can obviously see that, given that pretty much everything retraced its entire pump after the Ripple SEC kind of win. Uh, you know, we had that big ass pump, like everything went nuts, especially XRP. And now if you look at everything, it's back to basically what it was before that happened. And I think that just signifies that really all the money that was pumping up the market was just the same money that was already here. There was no follow through from the new money because, you know, I've been saying this for ages on my own show. That during these crab markets, the reason why it crabs is because there's no new money.

• 3:18Speaker 01

  And this recent thumb seemed to have been, as you were saying, all that leverage just building up from people just essentially being bored, I guess. And being like, oh, we're going sideways. I can't get, I can't get, you know, liquidated in this environment. Well, yes, you can.

• 3:32David Hoffman?

  The number stops, the number stops going down for six months. Take on the leverage, boys.

• 3:38Speaker 01

  Yeah, yeah, exactly, exactly. So, but it's, it's always funny to see people's reactions after big moves like this, you know? I saw some, some bears, you know, obviously gloating and things like that. And they were, they were saying, oh, you know, I'm going to wait till BTC hits like 15K, then I'm going to buy. And it, it kind of gives me flashbacks to the bull market where people said, no, I'm not selling my BTC, it's going to 100K, right? It's the same picture. It's the exact same picture. It's just reversed, right? So it's always funny seeing the reactions. And then I think that we're so deep into this bear market that really, uh, the only reactions that I see are from the trader types. The investors are like, oh, well, whatever, I'm just going to keep stacking. There's no panic really. Like I didn't see any panic from the, the long-term investors that I.

• 4:21Speaker 01

  Talk to regularly, it's more of, okay, we dumped, you know, we got liquidated, but hey, you know, we can stack some more, we've got more time to stack. But I think it's also setting the expectation of what the market's going to do. I think when everyone just accepts that it's just gonna do nothing good and it's just gonna go sideways mostly and maybe we have these high volatility events, which I actually tweeted about a few weeks ago. I said, there's still gonna be high volatility events and you're gonna get washed out if you're on leverage. So I think that's just the norm, right? For crypto.

• 4:49David Hoffman?

  Yeah, absolutely. And like even if you, I've been feeling like a foundation of bullishness brew. Kind of in the same way that, you know, towards the end of the last bear market, like you had a lot of real reasons to get real excited. Like we had Uniswap, we had Maker, we had Compound, we had Ave. Uh, we had a lot of these ingredients. Curve had just come out and like, and for people that weren't in crypto during that time, think about like what we didn't, we didn't have any of those things. And so going from nothing to Uniswap, Maker, Dow, Curve, Ave. Uh, was like a paradigm shift. And so like we are all, we're all being on chain, even though we didn't even use those words. And we had this underlying bullishness foundation build up.

• 5:31David Hoffman?

  But no one outside of crypto was paying attention to that. And so that's why you're like, yes, you are excited. You have the alpha. But it's not gonna happen right now. Like you, you have, you, there's like at least a years of time. Before like you have like the bullish sentiment foundation grow before something starts to like poke up and sprout into the mainstream culture.

• 5:51Speaker 01

  Yeah. And we were just actually saying briefly off air, I was telling you how I remember at the turn of like the new year in 2019, obviously ETH had come off its, you know, all time high, 94% down, went to like 80 bucks. And it was a pretty bad time for the prices of everything, really. Uh, and then, you know, the, the year turned and everyone was just kind of licking their wounds, stuff like that. And then I was thinking to myself, you know, all this stuff to be bullish about in the Ethereum ecosystem. We had the early kind of DeFi stuff going on, as you mentioned, Maker, Uniswap, things like that. Uh, and we had, you know, there were still discussions around proof of stake, what was gonna happen with that, uh, the Ethereum roadmap generally. And because you and I were so close to the Ethereum, you know, roadmap and paid so much attention.

• 6:33Speaker 01

  To us, we were like, holy crap, you know, we can see the next five years of Ethereum, but no one else can. And we were, that's the reason why we were bullish at the time and buying ETH at those levels. But even still, it took ETH another two years after that, even a little bit more than two years to go back to its old all time high because it didn't actually reach fourteen, twenty, whatever it was, until January twenty twenty one, which was, yeah, more than two years from that point. So if you apply the same logic to the current markets kind of cycle that we're in right now and think to yourself, wow, look at all these bullish news that's happening, L2s are popping off, right? We have more L2s that we know what to do with Visa, PayPal, you know, ETFs, all this kind of bullish news. But the thing is, is that like the market isn't pricing that in because as I said, there's no new

• 7:18Speaker 01

  money coming in. The fundamentals take a while to play out. Yes, they're bullish now, but it's because we're aware of them. We know it's bullish, but other people aren't aware of it. Other people aren't paying attention to it. And it just takes time for for that to kind of filter through. And as you said, sprout up essentially. It's like it's at the seed seedling stage and then it needs to sprout up and then everyone notices the big tree, right? So I think that that's the exact same thing that's happening now. And that's why I keep iterating to people whenever I talk to people about this is that I just I have the biggest vibe of twenty nineteen right now. It's just it's the deep within me. I'm just like, I feel like I'm back in twenty nineteen and I feel like I see it so clearly and I'm seeing the woman in the red dress if I'm reading the Matrix Code. That's literally how I feel some days because it just feels so eerie. I mean, obviously

• 8:02Speaker 01

  I can be wrong, right? Obviously, it's, you know, it's not gonna, history's not gonna repeat exactly. But I don't know, I just, I don't feel fundamentally bearish. Like, I feel like we washed out everything last year and now we're just in a holding pattern waiting for the kind of seeds to grow.

• 8:17David Hoffman?

  Certainly, yeah. And the twenty, we had a year of bullishness. Like, everyone was bullish during DeFi summer. And that was like, uh, March or April of twenty twenty until December, when Ether started to actually act. So we had, we had people making life-changing amounts of money from March until December of twenty twenty. And that continued on, but also like making life-changing amounts of money. While Ether was below $450 and Ether stayed in that same range, it was like 300 or $400, which was just like on the higher side of the bear market, but it was a number that we saw in the bear market throughout for the past three years. So Ether stayed at this like low level

• 9:01David Hoffman?

  for the whole year while people were printing life-changing amounts of money during DeFi summer. And everyone who was in the market was like paying attention, was playing the game, was knew it was on. But like, it was like the insider bull market. Like if you stuck out through the bear market, like you got to have all of this like alpha for yourself because like we were printing governance tokens, DeFi yield farm, et cetera, et cetera, et cetera. And it didn't show up in the blue chips and Bitcoin was starting to make moves, but Ether wasn't. But like still mainstream.

• 9:31Speaker 01

  Bitcoin was making moves off of the, I think, Saylor stuff, like Elon Musk buying BTC, like that kind of stuff. It was getting the attention because of that. Cause I remember ETH BTC was going down and it was because of that. Like it was getting more mainstream attention from, from those kind of headlines.

• 9:47David Hoffman?

  Sailor bought his first Bitcoin in 2021.

• 9:50Speaker 01

  Well, I, I, was it 2021? I, I remember 2020. Maybe, maybe I'm misremembering Sailor, but I know that there was Tesla. I'm pretty sure Tesla first bought in 2020, didn't they?

• 10:00David Hoffman?

  I don't, I, okay. So the, the line I remember going on throughout, throughout crypto Twitter was that both Bitcoin and then like a few weeks later Ether made all time highs and no one in mainstream media was talking about it. Like we broke through all time highs. Crypto Twitter was jubilant and no one outside of the world like saw that that was coming or was even talking about it. It did not register on their radars. And in my mind, in all of our minds, we were like, yo, like we just broke through all time highs and there's still like not new money coming in or not massive amounts of new money. New money was coming in, but like not the Sailor money.

• 10:39Speaker 01

  So I just Googled it because I was curious. So Tesla bought in Feb 2021, but Sailor actually bought in 2020. I think as early as like September or August or something. So that's what I was remembering. Yeah, he was like making waves of doing these huge BTC purchases. And then everyone was meaning that, oh, wow, all these companies are going to start buying BTC. And of course, we saw some follow through with Tesla, but it didn't really materialize. We saw some companies here and there.

• 11:04David Hoffman?

  Oh, and I wrote this tweet that more companies will own ETH on their balance sheet than Bitcoin because they were going to need to pay, pay gas on Ethereum. And that triggered every single Bitcoin maximalist under the sun.

• 11:16Speaker 01

  Yeah, yeah. I mean, it usually does, right? But yeah, no, I remember that distinctly because I remember ETH BTC going down a lot, even though ETH, like even though DeFi summer was happening and then everyone was saying, oh, well, you know, you only need BTC and DeFi tokens, screw ETH. The barbell strategy that didn't end up materializing. And everyone just like got wrecked if they held DeFi tokens against like ETH and BTC, right? Because ETH then went on its ridiculous run. People forget that ETH was still like $400, $500 when DeFi summer ended. And then ETH went to 4,400 in like six months. So yeah. We were doing. Rotating to ETH.

• 11:52David Hoffman?

  We were doing one of our bull case for ETH episodes that December because it's like great holiday content. And Ether was marching past $700 the second week of December and then it would hit $1,100 in January. But it was December that month that was like the good month for Ether where like all of the whole like DeFi token Bitcoin barbell just idea just went out the window.

• 12:16Speaker 01

  Yeah. And suddenly everyone started becoming an ETH maxi instead of a BTC maxi because there was that trend of everyone becoming a BTC maxi in the bear market, like last bear market, which was a very annoying trend, but I guess it made sense because Ethereum had come off ICOs and everyone had like written off Ethereum for dead because they weren't paying attention as we were saying.

• 12:36David Hoffman?

  It only had one bubble. Bitcoin already had like three bubbles and so like, you know, there was no precedent for Ether coming back.

• 12:43Speaker 01

  Yeah, exactly, exactly. But then, obviously, this time around, it's a lot different, right? No one's doubting Ethereum's use cases. We know DeFi, this is L2s. You know, we know we have, you know, some stuff like decentralized social media as well and gaming and NFTs, obviously, right? So, yeah, it's just a very different kind of vibe from that sense. But as I said, I'm getting the exact same kind of vibes of there's so much stuff going on, price is not reacting to it. But this doesn't last forever. It is definitely a temporary phenomenon.

• 13:10David Hoffman?

  Yeah, certainly. One thing that I've been really enjoying out of the Bankless Ventures, like, what do you call them? Activities that we do, activities, where we like talk to a lot of deals, like, teams on the frontier. And like, the nice thing about it is that you get a lot of signal. And there's been a handful of teams that we've talked to who, like, their number one volume or numbers of clients are gaming companies. And like, the reason why they have traction is because of gaming companies. And they just spit out like, large numbers versus everyone else, like, yeah, like, there's gaming companies up here. And then our next biggest category of client is like down here. Like, the number of instances where people say gaming is like going to, I mean, everyone's been saying this for like a year now. And I've always been like, even longer than the year.

• 13:54David Hoffman?

  But I've always been like, all right, is that just like a narrative? Because that's a great narrative, like, is this real? But like, after like, talking to all these like teams like that are servicing gaming clients, like, gaming apparently is just like, nothing.

• 14:07Speaker 01

  Yeah, yeah, I think people in crypto, like crypto natives got burnt out on it because a lot of it was Ponzi-esque. And obviously, Axie Infinity was like the quintessential example of this, of something that went nuts. But really, when you drilled down into it, it was a lot of kind of people just farming the money, right? And then everyone was going on about how people in the Philippines were able to play this game and earn a living. And like, that's all well and good, but the problem was is that they were only able to do that because it was bull market money, right? And that's not sustainable for, in the norm. But now, yeah, I'm seeing it too. Like, I don't pay that much attention to it, just because I don't have the time to. But I, in the Daily Gray Discord channel, we have a gaming channel and I see people talking about it and things like that. And, yeah, it is, it is real, right? There are a lot of things happening in, in, in behind the scenes.

• 14:52Speaker 01

  But again, people aren't paying attention because they got burnt out from like the first iterations of what happened. And they just, you know, they don't want to pay attention to it because they think it gets maybe a scam or like a Ponzi or whatever it is. And some, don't get me wrong, some of it is, right? But that's like anything in crypto. So, it's interesting.

• 15:10Speaker 01

  Yeah.

• 15:10David Hoffman?

  It's weird how we can't, we can't think of anything other than Ponzi's. Hey, what should we do with our new blockchains? Oh, Ponzi's, let's do Ponzi's.

• 15:18Speaker 01

  The, the friend's tech thing is interesting to me because there's like two sides of the coin here where you think it's really interesting. Because it's like something new to play around with and the, well, not necessarily new because it has been done before, but it's like, I guess new to some people. But there's the other side of it where it's this trend of the financialization of everything in the world, not just within crypto, where everything is suddenly becoming an investment. And I've noticed that with like a lot of my hobbies, right? Everything is just suddenly an investment, right? If you, if you have something that's slightly different than something else, you could get more for it. And it's just hilarious, the kind of value that people will give to certain items based on memes, based essentially, it's not based on any kind of fundamentals. It's memes and I guess meme is a fundamental, if you wanna, if you wanna frame it like that.

• 16:02Speaker 01

  But the, the, the logical conclusion of that is speculating on people, right? Speculating on kind of like influencers and, and kind of buying their shares with what you do with friend tech and getting access to. I mean, essentially it becomes like a paid group where you get to access to their chat, but then you can sell your access to someone else. And it becomes this financialization of someone's, essentially their, their, their time. Which obviously isn't a totally new concept, uh, but something that I think that, yeah, as you said, it looks Ponzi-esque. And it can also be gamed, uh, very easily. But I don't know, I feel like it's an interesting idea for people who want to be involved in that world where essentially you, people say, oh, what if you could invest in an influencer before they blew up, right?

• 16:46Speaker 01

  What if you could invest in them when they only had a thousand followers? Then they got to a hundred thousand followers and suddenly your shares are worth a lot. It's like investing in a company or investing in a sports player or something, right? As a, as a company, right? So I get that side of things, but I think that the execution needs to be handled very finely or else, as I, as we said, it turns into like a Ponzi where everyone's just kind of gaming everything. And it's just money in and money out and everyone just like gets wrecked.

• 17:11David Hoffman?

  There's this one guy who from my Twitter, one of my Twitter followers who bought one of my shares and his name's Leo. And I like looked at his Twitter account. He's got like a hundred or maybe a thousand followers, like not, not the biggest account on Twitter. But like he said, hey, you buy one of my shares? I'm like, sure. Cause when you're there, they don't have any supply of shares, like the shares are super cheap. And then I see him just like absolutely grinding in his chat. And he goes from like, just like the long tail of friends account, follow like accounts. And he's like number four, bro. And so he, he has like a hundred and 40 like shareholders. I don't, I don't know what his market cap is, but it's insane. Yeah. One share is point 58.

• 17:54David Hoffman?

  A half, half an ETH dude. He's, it's insane. He just goes like Levi, yeah. 57 holders. He's holding 115 people, but he's just been absolutely grinding in the friends tech game. And he's been posting out like some of his stats. He's earned, he like, he posts, posts the stats in his chat. Share price point 39 to point 58 in the last day of 50%. Trading fees earned point 57 ETH in a day. I don't know who this guy is, but he's just like this friends tech grinder and he's just been making it happen for himself.

• 18:28Speaker 01

  That's awesome though. Like I, I, I respect that. I respect people who put in the effort to, to do that. But I, I also have the cynic in me that thinks, you know, that's the outlier.

• 18:37David Hoffman?

  It's got to be the outlier. Cause like friends tech is fundamentally unsustainable because it's just small accounts buying big accounts, right? Like that, that's just how this works.

• 18:46Speaker 01

  It's also, it also goes back to like the experiments that were done with monetizing social media. Obviously Twitter has started doing it recently, but one of the first large scale examples was something called Steam it. Uh, and this was around a long time ago. It ended up being drama around that it got taken over by Justin Sun and they forked it off. But the original idea was paying people. Yeah, yeah, yeah. The original idea was paying people to post content. And you can imagine what happened, right? It was overrun by bots and and and trading of of kind of like upvotes, stuff like that. And the way that the money was paid, it wasn't paid by the users. It was paid by the protocol. So essentially, the protocol would issue, it would have an issuance curve, right? And inflation, essentially, and then pay that out to people.

• 19:31Speaker 01

  And of course, when there's, that's basically a zero cost, right? Because the users aren't paying for it. The cost is borne by all the the token holders. So it's not a cost to the to the user directly. It's if they're holding the Steam tokens, of course, is a cost to them. But what would happen is it would be gamed. And I I saw it. It was all transparent because it was on chain. But it was completely games. Everyone was trading votes with each other. They were bots dominating everything. And people were making a lot of money by doing this because it was a, you know, it was a bull market. And it was just crazy stuff going on. And I remember seeing people just like copy pasting other people's content as well. And they were just better at marketing it. And they were getting paid for it. So I I I don't know, like that financialization of stuff like that. I don't know if it actually leads to good outcomes.

• 20:13Speaker 01

  I think it just leads to gamification of things in in the the worst ways possible. And with Twitter, I think it's it's rather limited because Twitter didn't start off like that. It kind of bolted it on later. And a lot of people don't really care about getting paid for their content. They were putting content out in the anyway, right? Before they were getting paid. But also, on a long enough time horizon, you can imagine that people just spew whatever they want on Twitter to get the most attention, which they already do, right? But they do it to such an extreme now because they're earning money from it. If you're earning lots of money from it, you're going to go to the extremes to earn even more. So it it's it's a tricky business, man. Like, it's something that I've thought a lot about. And and I've I've never come up with a good conclusion to actually make it work.

• 20:52David Hoffman?

  Yeah, the gamification, it puts a lot of pressure on the parameters for how you distribute money. Like, if if the incentives around Twitter have changed because Twitter is starting to pay people out money for posting tweets, then then like there's going to be some sort of, you know, economic imbalance, right? Like, think of, think of like what all the numbers that goes into constructing a gas fee. Like, sometimes we tinker with those things because one is like outsized for the other. And Twitter is going to have to do that to manage the incentives around paying content. But like, that's the bull case. If they can effectively manage their own economy with their, like, you know, money printer, that is like their, you know, money that they send out for for Twitter content creators. That that's like the bull case for all of this stuff. Like, the whole idea of everything turning into a financial game.

• 21:37David Hoffman?

  Like the, the, that, the, one of the big pushbacks against the crypto industry in this last bull market was like, the crypto bros are going to come financialize everything. And then, and we don't want that because we don't want your finances in our culture, right? We don't want NFTs because we don't want money in our art. And I, I think that's, you know, a good worry and it's like a natural immune response, but it also underserves the equal and opposite idea, which is that culture is finally infiltrating into the world of finance. Like both hold true. You can't have one without the other. And so a combination of just like some arbiter of whatever this economic system is, like the steam, Twitter, uh, whatever, whatever is going to be the monetary policy issuer for how these things actually economically work out.

• 22:20David Hoffman?

  And then also allow for, that optimize for like good content, right? Cause if it's just bots coming in to tweet out tweets to make content, then that sucks. That, that finance, that's financialization becoming ruined. But the bull case is that actually you are instilling culture and allowing culture to manifest better because you figured out the economics. And all of a sudden Twitter becomes a better place because it's literally full of culture.

• 22:43Speaker 01

  Mm hmm. Yeah, I guess that's the optimistic approach. I don't know, I, I've become more kind of like, uh, more of a cynic, uh, uh, the more I use kind of like Twitter, uh, just because of the fact that the things that seem to get the most attention are literally like fake news, right? Things that are just not true because people want to believe things, right? They want their biases to be confirmed. And especially when it comes to politics, you can put out literal blatant misinformation and people eat it up. Now, the thing is, is that there's community notes, which Vitalik wrote about recently. People want to actually get a deep dive on how community notes works. It was an excellent blog post, but community notes is, is amazing, right? But if you get community notes and it says, this is literally fake, right? This is not a real kind of, uh, uh, factual information.

• 23:28Speaker 01

  Uh, are you going to get demonetized for that, right? Like, does your tweet not count towards your monetary rewards for the month or something? That should be the, what happens, but if it doesn't happen like that, there is literally no consequence. Yeah, you get community noticed, but by the time you get community notes, your tweet's already viral, right? And then, and people are already seeing it and you get all those impressions and it counts towards your total for the month. So I feel like if you really want to make it work, you have to take that into account. You have to essentially punish the bad actors or else you just get overrun by them. Because then everyone will be like, well, if I can earn money for literally just spreading the most fake news possible and the most viral news possible, then they're probably going to use an AI to come up with something that has the highest chance of getting the most impressions. And eventually what you have is that the culture actually gets overrun by that.

• 24:13Speaker 01

  And just to your point about the culture, just generally. And that will tie into something else I wanted to talk about, but I don't know if you wanted to say anything to that there.

• 24:21David Hoffman?

  Yeah, take us there.

• 24:23Speaker 01

  Yeah, so the other thing I wanted to talk about today, actually, that I've been talking to you about for a, I don't know, a few weeks now, actually, on and off, I've been kind of rattling the new mental model that I've kind of come up with for blockchain generally, for crypto ecosystems, blockchains generally. And I was thinking a lot about this specifically over the last few weeks because I've been thinking about the social layer because a lot of people have been talking about it on Twitter and a lot of people are misunderstanding what a social layer is when it in the crypto context.

• 24:53David Hoffman?

  A lot of people have social layer blind spot.

• 24:56Speaker 01

  They do, they do. And I understand why because it's definitely a thing that isn't obvious and it takes a while of being in crypto to actually understand why it's important. But I was thinking to myself, okay, so there's the social layer side of things, but are there other parts of crypto that people get attracted to and that people kind of vibe with at different parts in their crypto journey? And I think that I've come up with three categories that it all falls into. So you have the social category, as I just mentioned, you have the economic category, and then you have the technical category. And those are the three things that I think that blockchain ecosystems optimize for in different ways. Now, I count with some examples to illustrate this here. So when you think about Ethereum as an ecosystem, how did Ethereum start?

• 25:37Speaker 01

  Well, it started with a really strong social layer because it was started based on ideology, right? It was started based on, hey, how can we change the world, right? How can we build these decentralized applications to take power away from centralized intermediaries, right? That was the whole kind of vibe of Ethereum. It was very kind of like tight-knit at the start. Obviously, it was very kind of like hacker oriented and that kind of was Ethereum's beginning. That's what it began at, social. The technical stuff was like more of an afterthought because obviously the tech of Ethereum. There was a roadmap to upgrade it and make it better, but it was it was not the greatest tech, right? It was very simple and it has remained that way for a long time now. And the economics of it were completely out of there. There was no economical thought put into it at all. Like it was it was really not thought about.

• 26:20Speaker 01

  But then you look at Bitcoin. How did Bitcoin start? Well, it had a lot of that social stuff as well, right? But it also had the economic side of things. Definitely did not have the technical stuff. Zero technical. Bitcoin, yeah. Zero technical, but it had the social and it had the economics. But then slowly over time, what happened with Bitcoin is that the economics took precedent over everything else, right? It was all about protecting Bitcoin's monetary policy at the cost of everything else, even at the cost of the social layer. And that's why we see with Bitcoin, a lot of the social layer turned into just toxic kind of infighting, stuff like that, right? And and outfighting too. Right. We call it the Bitcoin brain drain. Exactly. And they've kind of optimized completely for that. So there's very little technical.

• 27:01Speaker 01

  The social layer is not where where I think it should be. It's definitely not a very healthy social layer. And the monetary thing is is their main main thing. Then you look at these other layer ones that have come over the years, right? What are they optimized for? Well, they optimized for technical. They always said, we've got the best tech, right? We've got better tech than Ethereum. We've got cheaper gas fees. We've got this. We've got that. They don't focus on monetary policy. Yeah, exactly. They don't focus on monetary policy at all. They don't focus on the social layer at all. So all they focus on is the technical stuff, which then feeds into what actually forms on the social side of things. Because the social layer becomes, oh, we've got the best tech, you know? And then they they're kind of like starting insulting Ethereum and say Ethereum is crap because it's got crappy tech. We've got better tech and they just they're over optimized for that. So

• 27:45Speaker 01

  that's what I mean by like there's there's three high level categories that sit there that that kind of dictate what what ecosystems become. Now, I I then related it back to Ethereum, obviously, because we're, you know, we're both in Ethereum. And and I spent a lot of time in it, just covering it. And I thought to myself, okay, like, what, why do I spend so much time in Ethereum based on this framework? Like, what makes Ethereum special to me? Well, what makes it special to me is Ethereum is the closest ecosystem to hitting all three of those categories in an equal fashion, right? It has a fantastic monetary policy now, in my, in my opinion. Obviously, this is subjective, right? Bitcoiners hate Ethereum's monetary policy, but you know, we love it, right? So to me, it has a really great monetary policy. It has a really great technical roadmap, right?

• 28:28Speaker 01

  Where we pushed the technical innovation really to layer two, right? Which I believe is a much better way of, of, of scaling a blockchain, not just scaling for, you know, cheaper gas fees and stuff like that, but also scaling the technology and, and integrating better tech within the Ethereum stack. And then Ethereum has an absolutely awesome social layer where Ethereum as an ecosystem has been able to actually attract a really healthy group of people who are in it for the tech, who care about the values of decentralization, the values of freedom and, and the values of longevity too, which is very important, like building systems that can last a very long time. So that is really the core of why I am so kind of like in Ethereum. And I think that would be the same for you in that framework.

• 29:13Speaker 01

  And that's, I think, after explaining all that, that is definitely not something that I would expect someone that is newer to the ecosystem to understand, because it is a learned thing. It is years of experience, going through the cycles, seeing what works, seeing what doesn't, and then coming to your own conclusion about what you actually want to see. And if we, if we look at other ecosystems that, that, um, their current state, uh, you know, people talk a lot about Solana, for example, and I'm going to start naming names here because I need to, I want to use concrete, concrete examples. I think Solana, uh, over optimized on the technical side of things, right? They, they were all about the tech and they still are about the tech, right? But that meant their social layer got corrupted, uh, because not, not these days, obviously it's been flushed out, but when Solana started, their social layer was heavily dominated by profit maximalists,

• 29:58Speaker 01

  which was influenced by SBF and FTX and a lot of the crowd that they were able to attract via that, right? Because, uh, those people used Solana's, uh, kind of like headlines of we've got better tech, we've got more scalability, blah, blah, blah, as a way to make money essentially, right? So that was kind of corrupted there, but, but you know, it can evolve over time. Change over time. I still think like Solana, these other layer ones out there like Cardano, Polkadot, all these other layer. I still think they optimize way too heavily on the technical side of things. And they forget about the social layer because the social layer then starts reflecting only the technical side. And they forget about the other important parts of the social layer, which as I mentioned are things like, okay, how do we actually do decentralization outside of the technical properties, right?

• 30:42Speaker 01

  How do we ensure that we can recover from an attack? Or how can we recover from things like censorship and all those sorts of things like that becomes an afterthought? Because they're all they're thinking about is the technical stuff as an ecosystem. And, uh, and, and yeah, so that's like my whole framework and my whole spiel that I I've come up with. Uh, and I tried to kind of formulate in my head. And as I said, it's very subjective. It's definitely not something that everyone's gonna vibe with. But that's pretty much the reason why I spend so much time in Ethereum is because in my mind, it's the closest thing to hitting all three in in a nice, equal, healthy, healthy way.

• 31:15David Hoffman?

  Hundred percent. Yeah. And that that resonates with like a lot of my sentiment as to why Ethereum is the thing that it is. Like I think one of the reasons why I have the convictions on Ethereum that I do is because I I kind of consider Ethereum like this. Singularity between so many different components of what makes a blockchain a blockchain. And like you labeled out like the three big overarching categories. And like one of the reasons I think why Bankless is what it is, is because we talk to so many different types of people. Like what does a historian think about crypto? What does a cryptographer think about crypto? What does a macroeconomist think about crypto? What does a computer scientist think about crypto? Like how many like, like I can, what, what, what does a psychologist think about crypto, right?

• 31:59David Hoffman?

  Like, uh, the, the point is that like everyone has a lens for viewing crypto and that is the power of crypto. Crypto has something for everyone and you can understand crypto through your own lens and crypto can bring something to you based on where you came from and your walk of life because it's got something for you. No matter where you came from, like maybe it's a little bit easier if you understand computer science and cryptography and economics. But like if you even understand sociology, you start to see some of the tribalism and how and you talk about that's the social layer, right? And so the best ecosystem I've always thought is going to be a harmonization between so many different aspects of what makes a crypto system a crypto system.

• 32:38David Hoffman?

  And it doesn't just stop at tech, right? It doesn't just stop at economics, it doesn't stop at technicals. It's like all of these different mass variables. And that's why crypto itself is such a nerd snipe is because it's like, in order to understand crypto, you need to understand a very wide swath of things about the world. And you also need to pattern match as to how these things fit together. And that is what I would call going down the crypto rabbit hole. And I totally agree with you where like the Bitcoiner world is over indexed on the economics. And then the Solana and you know, layer one world has over indexed on the tech. The thing is like, it's just saying like, hey, we have the better tech, we have the better tech. If you actually miss the economics and the social layer, your tech isn't complete.

• 33:24David Hoffman?

  Because the reason why Ethereum is doubling down on the technology of rollups is that it scales the social layer and the economics layer, it harmonizes those things. And so you can say like, our tech is better, our tech is, you know, for some reason has some competitive advantage. But if you have a social layer blind spot, you're missing in the ways that this technology actually doesn't scale at the social layer. Because you can only see the tech. And so like, this is why I think like people can come into crypto and like understand 60% of what makes crypto crypto. And then you end up as someone who like is a Bitcoiner or a Solanian person because they have a blind spot to the rest of the of the spectrum.

• 34:07David Hoffman?

  And this is why I like, I put out a tweet that I said Ethereum harmonizes diversity. Ethereum has this emphasis on pluralism. How do we have more tribes with more values exist in the same spot? And I don't see any other layer one expouse that as a principle, as a value. But like pluralism is how you grow a network to the whole world. That is what that is. And that is why pluralism has been a word that the Ethereum community has stated from, from day one. And so like, I totally agree with you. It's like, there are many variables in the layer one ecosystem that wins is going to be the one that harmonizes all of them better than anyone else.

• 34:48Speaker 01

  Yeah, yeah, exactly. And I think, you know, it's not just us saying this either. Like, people will come at us or kind of hit back at us and say, you know, you can talk all you want, but like, the proof is in the pudding, so to speak. And I mean, it is, though. Like, people will complain and they'll say, you know, why are people using Ethereum layer twos when they are inferior tech-wise to our layer one blockchain? It's like, okay, well, maybe take a step back and just actually ask yourself that question and then go do some research to actually understand why. Because there's no point asking that, right, to, you know, to just avoid. You're just saying the market's on. Exactly. You need to, you need to internalize it. You need to actually deal with it. And you need, you know, I see so much cope over these sorts of stuff.

• 35:30Speaker 01

  And you just have to deal with it, right? You have to go out there and you have to think, okay, why is this the case? To me, my kind of answer to that question is the social layer. The, the reason why Ethereum has, I guess, like arguably inferior tech that is more adopted than something that is better, is because Ethereum has such a strong social layer that it attracts people to build within that ecosystem. It attracts people, smart people, to want to be in that ecosystem for the long term. They're not mercenaries, they are missionaries, which is actually something I should have mentioned before. There's that mercenary-missionary balance. And I think you only get missionaries if you hit all three of those categories in a nice fashion.

• 36:09Speaker 01

  Otherwise, you get mercenaries on one side of things. Like, you can have mercenaries in the economics, the way they just want to pump their bags as high as possible. You get mercenaries on the social layer. They just want to basically run in governance circles about, and philosophy circles about what a blockchain should be and how this should act. These are the governance-heavy chains out there. I'm not going to name names. I don't want to, I don't want to start flame wars. And then the, the, the technical side of things as well, right? Where you just kind of do the same stuff there. So I think that people just need to kind of internalize these sorts of stuff and realize that it is because of that. It is because of that, that very strong social layer. The tech, at the end of the day, you know, the best tech never wins when it, in, in technology.

• 36:51Speaker 01

  It's always the kind of things that get adopted based on, I believe, a number of different factors, but I believe that like a strong. Kind of social A and a strong social presence and and onboarding, obviously developers and stuff like that is incredibly important. So uh but but all of this isn't to say that you can't like grow into this as a as an ecosystem because Ethereum, as I said before, did not start with a good monetary policy and it did not start with a good technical roadmap. Ethereum started with a good social layer, in my opinion, uh because it started with the right values in in mind and attracted the right people from the start. But the thing is, is that Ethereum's monetary policy arguably did not actually get fixed or get to the point where we all wanted it to be until the merge happened, right?

• 37:33Speaker 01

  And that was literally a year ago, well, eleven months ago now, right? So that was a long time, seven years after Ethereum went live, or even eight years if you count the Ethereum ICO, right? Um. And then the technical side of things, really, it's only the last two years where we've basically pushed all the technical stuff to layer two and gotten a lot of technical innovation happening there, two to two to three years. I mean, there's obviously stuff that happened earlier, but the last two to three years is where it's really started to to take off. So you can grow into the other categories, but the thing is, is that it's incredibly difficult to do that because uh and and it depends where you start from. I think Ethereum is lucky because it started from a good base with the social layer. It it didn't start from like the monetary base, it started from the social layer base.

• 38:15Speaker 01

  Now, it remains to be seen if you can start from the technical base and then grow into a healthy social layer and grow into a healthy monetary policy. Um. I personally don't think most ecosystems are going to be able to do this. There might be one or two that can that can do this, but again, it's very, very difficult and not something that will happen overnight. It takes many years of uh of kind of like meticulous planning from the community. That's what that and that's why it happened for Ethereum, because the social layer fixed the monetary policy, right? The social layer um basically came together and said, we don't think Ethereum layer one should scale for the world. We think we should push this to layer two. And then the social layer attracted the layer two builders uh to the ecosystem, uh smart people to the ecosystem to build layer twos.

• 38:57Speaker 01

  So that's why I think starting at the social A is the strongest base you can start from. And that's why Ethereum has been so successful to this day. Uh. And, you know, it remains to be seen what other ecosystems end up doing.

• 39:08David Hoffman?

  Yeah, there's there's a line that stuck with me in my head where um uh if you have governance, you can have everything. And that that line was meant for actually de-cred of all chains.

• 39:19Speaker 01

  Yeah, yeah, I remember that line.

• 39:21David Hoffman?

  The point is, is that if you can coordinate your social layer, then you can have anything you want. And so like the social layer, I think is the hardest one. I think it's the thing that most crypto entrants have the biggest blind spot towards. They think it's just crypto, you know, crypto economics, technology, money, right? Uh, but it's, but then so like, we actually don't do a good job, I think, expressing the value of the social layer. Ethereum does. Um, but like, you're totally right. If you have the social layer, you can fix things that are downstream of that. But the pinnacle of this whole thing, or the foundation, the layer zero of this whole thing is the social layer. Um, so I came into, go for it. Yeah.

• 39:59Speaker 01

  No, I was just gonna say, I think, I think it's because the dogma of a lot of crypto centers around, uh, uh, this decentralization myth of if you've got a lot of nodes, if you've got a lot of validators, you know, if you've got a high Nakamoto coefficient, which I believe is one of the most worst metrics for measuring decentralization. But there's this dogma around that where it's like, you've got all that, you're, you know, you're decentralized when not, or like, that's all you need. Um, and it started, it started in Bitcoin and it kind of permeated into other ecosystems or perverted other ecosystems. Um, but at the end of the day, what powers these ecosystems are the people, right? The people decide what these things are and what they are not. And that is going to be true until the AI overlords take over, if they ever do, right?

• 40:43Speaker 01

  And then it's up to them. But, but for, for now, for the reality that we live in, uh, you know, humans run the nodes, humans run the infrastructure, humans run the validators and the miners, humans decide on the changes, you know, with Ethereum governance. Uh, it's, it's not on-chain governance, it's all off-chain soft governance. Uh, but Ethereum, uh, Ethereum's roadmap and its upgrades are all done by humans. And if Bitcoin was to ever do that, uh, like, so let's say, for example, it had a bug, an inflation bug that needed to be fixed with a hard fork. Who do you think's gonna fix that? It's not gonna fix itself. Humans are gonna fix it, right? The social layer is gonna fix it. The social layer is going to come together and say, we need to fix this. Everyone upgrade their nodes. We're now gonna run on this new chain that doesn't have this inflation bug anymore. Not the new chain, but like the fork chain, right? So.

• 41:28Speaker 01

  At the heart of it, at the heart of it, ultimately, it's the social layer truth that is the real truth. We can build all the systems that we want. We can make something extremely decentralized from a technical point of view, and that's all well and good. But at the end of the day, what you need to build for and what is the most important thing is like if everything else fails, the fallback is the social layer. If you have a shit social layer, you're gonna have shit outcomes. And that's, that's basically the ultimate truth in my mind.

• 41:53David Hoffman?

  Yeah, I gotta read you a comment from the YouTube. Skynet says, David's beard is actually a ZK rollup of Sazil's beard.

• 42:03Speaker 01

  I actually had mine trimmed recently. It was a lot longer, so.

• 42:06David Hoffman?

  Oh, this is pretty long for me, actually.

• 42:09Speaker 01

  Yeah, yeah.

• 42:10David Hoffman?

  I've, okay, I've got a rant for you, and it is a, a, call it, so like, I come from, my character class coming into crypto is like the, or not character class, but like, my background is psychology, sociology. So I come into crypto and like, one of the most immediately fascinating things was tribes, like tribes. It's so obvious about tribes. You run into crypto and you're like, you discover tribes. And so like, I've got, and so like, that's been like the lens that I see crypto through. And so I've got a audit, a character analysis of like, the archetype of the Solana community that I want to run by you. Ready?

• 42:46Speaker 01

  Okay.

• 42:47David Hoffman?

  But first, we're gonna do some ads to help sponsor this show. Thanks. Extra thanks to Kraken, our preferred exchange for crypto in 2023. Whether you're dollar cost averaging into crypto to prepare for the bull market, or you're taking profits out of crypto, be sure to do it with Kraken. The newly designed Kraken Pro makes it super easy to do both your basic financial transactions while also taking your trading to the next level. Kraken Pro is truly the trading UX that you've always wanted. So if your bull market archetype is the trader class, you need Kraken Pro in your toolkit. But if your character class is more of a DeFi journeyman or woman, then MetaMask portfolio is the tool for you. MetaMask portfolio is your DeFi multi-chain battle station. Any asset on any Ethereum layer two, MetaMask portfolio will present it to you. So don't get caught

• 43:29David Hoffman?

  forgetting assets or missing opportunities. Make sure you're prepared for the bull run by prepping your MetaMask portfolio. Moving on from tools you need to playing fields The Arbitrum Layer 2 is one of the main arenas in which this bull market will be fought on. Whether your character class is a DeFi Dgen, Airdrop Hunter, or Yield Seeker, the Arbitrum Coliseum is where a ton of the action is going to be. So whether you're on Arbitrum 1 for DeFi and NFTs, or Arbitrum Nova for Web3 Gaming, or a new frontier on Arbitrum using an Arbitrum Orbit Chain, there are so many opportunities to sink your teeth into. But as we know, the Ethereum rollup-centric roadmap produces all kinds of Layer 2s. And Mantle is one of the newest Layer 2s on the scene, with some of the newest technology that Ethereum Layer 2s has to offer in the year 2023. Mantle is built using the OP stack,

• 44:13David Hoffman?

  but uses Eigenlayer's data availability solution instead of the expensive Ethereum Layer 1, reducing gas fees by 80% compared to other Layer 2s. With billions of dollars standing by from BitDow to invest in Mantle, make sure you stay ahead of the game by building and growing your on-chain footprint on Mantle. Let's not forget about the ETH staking character class, and Stater makes it easy. Running a staking pool with Stater just requires 4 Ether for a deposit, letting you charge a fee to the remaining 28 Ether that uses your node to stake their ETH, increasing your yield by 35%. Stater's staked Ether token, ETHX, allows you to stake your Ether and use it in DeFi at the same time. For all you DeFi swappers out there, this one is for you. Uniswap X has opened up a brand-new landscape to play in, and it's the world of Intents. This is where those who employ this swapping ability

• 44:58David Hoffman?

  get to team up with the evil MEV bot army, and they get to band together to discover the most efficient liquidity route through the Ethereum landscape: gas-free swaps, MEV protection, and theoretically optimal pricing. When swappers and MEV'ers come together, new metas happen, and it's thanks to Uniswap X. So the next time you trade on Uniswap, consider clicking the Uniswap X button to get your MEV protection. And so, if we're truly entering a bull market phase in crypto, which we totally are, then tokens are going to start flying all over the place. So if you're an organization looking to grow with token incentives, then look no further than Toku. If you want to distribute tokens to your employees, team members, or for payroll, Toku can help you comply with labor laws, tax obligations, and reporting for whatever country you employ someone. Crypto is entering its regulated era,

• 45:41David Hoffman?

  and Toku can help you achieve your token incentive award goals with compliance. So thank you to all the sponsors that support Bankless, and all the podcast editors, newsletter writers, and operations managers who make the Bankless organization the best that we can be. We truly appreciate your support, and for all the listeners out there who listen to the mountains of content that we churn out each week, especially this one right here, so let's go on to the show. And we're back. All right. This is my take about the Solana community. Like, how did the Solana community come to be? And so, we have the alt-layer ones, and all alt-layer ones start off as an underdog, right? And then they attract some community for some particular reasons, like Solana was the tech. And to give Solana credit, like, the whole single, shared, global state, like, leaning into the monolithic

• 46:26David Hoffman?

  strategy is a competitive difference that Avalanche, Phantom just does not have. So that's their thing, right? That's their tech, like, single, global, shared state. And I think a lot of, for a while, during the bear market that you and I were kind of formed in as Ethereum, a lot of our identity was, like, built up by being, in contrast to Bitcoiners, because Bitcoiners just bullied the absolute F out of us, like, "Your guys' monetary policy is broken, you can't run Ethereum full node." And, like, even though, like, those things were fundamentally wrong, like, there were kernels of truth there that actually, we had to actually go and work on. At some point in time, the Ethereum community, and I remember it was, like, right during DeFi summer, and I know this because I had my POV Crypto podcast episode, podcast itself, with me

• 47:11David Hoffman?

  and my Bitcoiner co-host, and as soon as the bull market started, we just, like, split off. Like, he went and did Bitcoin Media, I went and did Bankless, we just doubled down on our own respective ecosystems. But the Ethereum community grew up, and we stopped being, like, in the shadow of Bitcoiners. And because we had, like, technological escape velocity, right? We had things like EIP1559 to rally round, we had proof of stake that eventually got shipped, we had Layer 2s that started to form, we had DeFi, we had our own home-built narratives that allowed us to, like, grow up and have our own foundation to stand on and stop being out of the shadow of Bitcoiners. But a lot of us, like, learned to fight on Twitter that way. And then, so like, that was, like, Bitcoin was the older brother, it was punching us,

• 47:53David Hoffman?

  and we learned to have a, grow a hard shell and, like, bootstrap our way out of that using, you know, technical growth. And that was social layer growth. The Solana community, I think there's a little, there's definitely a lot of the same relationship that the Solana community has to Ethereum, that Ethereum's had to Bitcoiners. So it's a little bit of the same, it's also a little bit different. Like, we bully the Solana community. We bully them because we think that their tech is broken and we think that their social layer is broken and we're frustrated that they don't see that. And so they, I think a lot of them have chosen Solana just to be antagonistic to Ethereum. Not antagonistic, like reactive, reactive to Ethereum. And like, what, like, the thing that fascinates me the most about this industry is that culture

• 48:37David Hoffman?

  and people, the code and the culture resonate with each other. Like, code defines culture, culture defines code. And like, Cal Samani and MultiCoin Capital are like, they are like, we are the contrarian investors. Like, everyone was double down, doubling down on Ethereum, we doubled down on EOS because it is contrarian to Ethereum. Okay, that didn't work, but we're gonna run back the same exact playbook, we're gonna just be whatever is contrarian to Ethereum. And that frustrates you and me and like, the Ethereum community because we see, like, what we were talking about with like, the harmony between the social layer, technical layer, and the economics layer, and like, I see like, that goes like, to the furthest reaches of knowledge, like Ethereum just harmonizes everything.

• 49:21David Hoffman?

  And so to us, we see people being contrarian to that and being like, what the F are you doing? Ethereum is a singularity of all important variables. And if you're gonna be contrarian to that, like, you're actually just working against the values of crypto. That's like, our perspective. And so, but then the Solana community is like, learning about our behavior. So like, you know, think like, some 15-year-old kid, and then you have some, that's Ethereum, and then you have some like, you know, six, seven-year-old kid, and they're like, learn, seeing their older brother, their older sibling, their older network, do things and exhibit certain behaviors. And so like, we kind of bully them, but then they just need to, they've learned to band together and also be bullies, because this is what just tribal warfare is doing. This is the milieu of crypto.

• 50:05David Hoffman?

  Ethereum is doing it, in my opinion, because it has certain values and beliefs and perspectives around the world. And then, but the Solana people, I think, the amalgamation of the Solana community, just complete blanket statements, exists as a reaction to Ethereum. Because that's one of the reasons why they are all coming together is because they think Sol will pump from like $25 to 250. And it would go up versus Ether. I think a large part of the identity of Solana is specifically to be in contrast to Ethereum, because we created, we accidentally created that because we carried forth our trauma with the Bitcoiners and then pass it down the line to the Solana people. Except what the Solana people is missing is like they have social layer blind spot.

• 50:51David Hoffman?

  Because they don't see like all the variables that you and I were talking about earlier. They just kind of see like, hey, if we band together, if we like put our flag down and put our foot down and say, hey, you're not going to bully us. Actually, it's your guys' networks that's broken. It's actually the monolithic way that's forward, the same single shared state, blah, blah, blah. Layer twos are never going to work, etc. They're playing the games. They're playing, they're playing games on Twitter. And like, they love to dunk. They love to dunk. They love to like tweets. They love to say, oh, that's a ratio. And they love to say that that's like proof of how this whole thing works. But in reality, they're just being one big tribe, one big monolithic tribe. And I think like a decent amount of Ethereum actually created that in Solana because we taught them how to fight on crypto Twitter because we were the ones that were bullying them.

• 51:37David Hoffman?

  But it still doesn't change the fact that like they, it is a reaction to Ethereum and not because they are built under their own merits, which is what I would say the Ethereum community is. And so like, I think the Solana community, Solana is going to make it. Like they have carved out their own niche. And that's going to, there's enough of a value landscape there that they're actually going to like be able to ride that and that's going to work. They think that they are going to flip Ethereum. They're always just going to live inside of our shadow. Because they can't, because they, that's, I'll stop there. That's kind of like my take.

• 52:09Speaker 01

  No, no, I mean, I think, look, you obviously spend more time in the Solana community than than I do. I don't really spend any any time there. But I think generally your points do apply to like a lot of L ones over the years. If I'm being honest, I think they're not exclusive to Solana. Because if you look at what a lot of the L ones do, or pretty much all of them do, they do try to be contrarian to Ethereum, right? Because that is their moat, that is their competitive advantage, as you said. That is the thing that they can latch on to and rally around. Now, just, I guess, to keep it on context with the Solana context, this is what I was talking about before about how because they are going down the monolithic approach, right? They believe in this shared global state, they believe in doing everything at layer one.

• 52:53Speaker 01

  The technical layer is actually influencing the social layer. Yeah, so their social layer is influenced directly by the the technical merits of Solana rather than anything else. So that's why they've got the monetary policy blind spot, right? And that's why their social layer is only focused on the technical stuff. It's not focused on the other stuff that that goes into the social layer that that, as I explained before. At least that's my kind of a view of things as they have existed. Now, I think this is very true for the other L ones as well. Like, I see this in the other L ones, they have sprinkles of their own kind of, I guess, niches that they follow. Like, for example, I mentioned before, these governance heavy chains, the ones that believe in like having never ending philosophical discussions around how governance should be done.

• 53:37Speaker 01

  You know, they've got on chain governance, they want to debate this, they want to kind of say, okay, we have a good governance system because of this, this and this reason. They go back in history and look at human governance systems and try to apply that to blockchains. I guess we do that in Ethereum as well, we just don't do it at the base layer, right? We do it at the app layer, so it's a different kind of abstraction there, so it doesn't influence everything, it just influences who wants to pay attention to it. So that's that's that's kind of why I was bringing up the categories before, because I really do think that those three categories hit on literally everything and explain pretty much everything we've seen play out in these L one ecosystems. But at the same time, if we want to focus on the the L one ecosystems, as you know, obviously, there's the monolithic approach, there's the modular approach, but there's also

• 54:18Speaker 01

  A different approach here as well. There is the approach of what is your L one trying to be outside of scaling, right? Like, what is it trying to actually be? Well, Ethereum is trying to be a sediment layer for value, right? It is not trying to be a globally executable and scalable execution layer. We've pushed all that to layer two. So funny enough, you could use the Solana execution layer, which is what they are. They're not, they're not going for the sediment layer. They're going for the execution layer. You could use that as an L two on Ethereum. And from, you know, what I've seen and what I've kind of researched, that would actually work quite well, right? And would actually hit on the points that they still want. They still want that globally shared state. They still want that ultra scalable execution layer.

• 55:03Speaker 01

  It would still hit on that. And that's not me saying that I, I, I, that Solana should become an L two on Ethereum because they're inferior, whatever. But it depends on what your goals are. If your goals are to do that, then I think that that just works better in that context. But they obviously want to do it their own way. And as you said before, there is a contrarianism there, which I totally get. You know, Ethereum was contrarian to Bitcoin. Ethereum was, was very different to Bitcoin in the technical aspects where Ethereum was like, no, we're actually going to do things on chain. We're actually going to do smart contracts. We're going to do DeFi. We're not going to outsource these to, to centralized services and exchanges. So there was that contrarianism there. So I do see the, the similarities and I do see the different tribes that kind of form here. But it, it's, it's funny how it all still fits into those three categories.

• 55:48Speaker 01

  And, and you can actually map out where they all kind of sit. And you could probably do like one of those alignment charts or whatever you, you want to do and kind of map each ecosystem to it. It wouldn't be an exact science, but it would, it would give you a, a general picture of what things look like. And as I said, it can evolve over time. It is not a static thing, but it definitely is, is hard to, to evolve. So, but yeah, I mean, I, I, I can't comment too deeply on the Solana ecosystem itself. Because as I said, I don't, and the community too, I don't spend a lot of time in there. But like just from what I see and from, from what I've talked to, especially with you who do, who does spend more time in there and other people. That, that's kind of what, what I say, the focus too much on the technical stuff, the social layer stuff. Seems to be misunderstood or not well understood by them.

• 56:31Speaker 01

  And the monetary policy stuff, I don't even need to talk to them to understand that because I can see Solana's monetary policy. I can see these other L ones and I can see that they're not sustainable. And I don't think that they're, they're going to be sustainable for the foreseeable future. Because the monolithic design, I don't think it actually translates well to a good monetary policy. But that's a whole different discussion there, but yeah.

• 56:53David Hoffman?

  Well, this is when I was talking about like, hey, if you have like economic blindness or social layer blindness, you're actually, you don't actually get to fully express the best version of tech, right? You actually need a harmonization between all three in order to maximize all three. And so like the, again, sweeping blanket statements here. Like a lot of the feedback and like criticism I get out of the Solana crowd about layer twos is that like, layer twos are fundamentally broken. Fraud proofs will never ship is like a line that like, again, not every Solana person says, but like a line that I hear, like fraud proofs are never going to work. Layer twos are totally not going to manifest. And so they are taking.

• 57:32Speaker 01

  Well, they have to, that has to be true for their contrarian bet to be true, right?

• 57:36David Hoffman?

  They need that, that tech to not be true so that their tech can be true.

• 57:42Speaker 01

  Similarly for us, we need the monolithic approach to not work and not be true. For the, for our approach to be true and to work, right? So it's kind of the same thing.

• 57:52David Hoffman?

  Yeah, I would, but I would also say just like, there are fundamental like logical constraints that the monolithic approach has. Like somebody in the comments says, like, I remember totally talking about making Ethereum a layer two on Solana LaMao. Like you can't, you can't, like you can't hold layer twos on Solana and also the monolithic approach in the same breath. Like you must have everything on one single network at all times. But that never makes any sense because like, say you have Solana and you have one gigantic network. You will also be able to scale it by making another Solana settle down to Solana. Like you can add more Solanas. Like you can have a Solana layer two on top of the Solana layer one.

• 58:32David Hoffman?

  Like the idea of putting the entire globe on one layer one is just not going to work. At least that is the reaction that I am having. And so. They need

• 58:43Speaker 01

  I mean, that's why I, and then that's why we believe in the roll up centric roadmap over the monolithic roadmap, right? That is, that is really the crux of it. We don't think it's technically superior, but obviously they do. And I think it's also a bit of a kind of thing of, hey, let's try and do it, right? And, and, and believing that they actually can do it because if for some reason we're completely wrong and they actually can do it, right? Then for them, that's like a history defining kind of moment, right? It's a huge thing for them, right? So it's kind of, they've, they're kind of forced into that position because if they just say, we're going to do L2s, we're going to do the roll up stuff. Well, that narrative just gets shattered, right? Of, of being that contrarian.

• 59:22David Hoffman?

  Dude, I've, I talked to a avalanche person that I won't name names, but like, it was right after a talk at a conference. And I went up to them because there were, it was a layer twos versus like subnets debate. And they just like, after like, they said like, yeah, we like, we can't really do layer twos because Ethereum took all the layer two mind share. That's why we do subnets. And I'm like, did you really just say that out loud to me? The shit? And so like, that's why I mean, like a lot of like Solana would do layer twos if, if Ethereum hadn't already captured all of that market share. And so like they are, they are confined into the monolithic strategy because that's all that is left. And so like, they can't admit that layer twos work in any sort of flavor because that's bearish on like the whole Solana archetype vision for itself.

• 1:00:08Speaker 01

  Exactly. And, and it's kind of what you see replicated across everything in, I think in, in life, really, especially with companies that compete on the same product. They have to always differentiate themselves from their competitors, even if it doesn't make sense. So for example, Apple removed the headphone jack, right? Why did they do that? It was a point of differentiation for them, right? It was something that stood them, make them stand out from the crowd, even if it wasn't the, the, the thing that everyone wanted or needed or was even necessary. They did that, right? And then their competitors kind of followed them with it. And then the competitors got made fun of because they're just like, you're just copying them now. And Apple, you know, obviously is that, but this is one example of something that happened. So.

• 1:00:50Speaker 01

  And and I think that as you as you said, like Avalanche doing their subnets, it's like, well, we believe it's a strictly inferior system to L2s. But they can't do L2s because if they do L2s, they're just Ethereum. Right? So and and I think that it it also isn't just a technical thing. It's also like a monetary policy thing. For example, if Ethereum just copied Bitcoin's monetary policy, everyone would be like, well, I'm just gonna buy Bitcoin. Why would I buy ETH? Like, it's the if it's the same thing. So but but I I obviously believe Ethereum's monetary policy is better than than Bitcoins. But other people don't, right? And they they they kind of like fall into the these different categories here. But it's always funny seeing that play out, especially on the technical side of things, where things just get done. Because people want to differentiate themselves. They think that that's the only way their product can succeed.

• 1:01:36Speaker 01

  And I don't blame them for doing that, because that is really a kind of prevalent thing that's been going on for, you know, as long as techno technological innovation has happened. But at the end of the day, you can't fight reality. You can't fight the truth. And the truth will reveal itself on a long enough time scale. And I think when it comes to Ethereum and its rollup centric roadmap, the truth is revealing itself. The truth is saying that Ethereum's rollup centric roadmap is awesome. Everything that you fudged Ethereum about like the I remember the seven day withdrawal period being a huge point of FUD for optimistic Robs. No one talks about that anymore, right? The shared liquidity stuff, uh, people talked about a lot as well. They still talk about it now, but it's less of a of a discussion. You mentioned the fraud proof stuff. I mean, Arbusrum has fraud proofs. They're gonna decentralize their fraud proofs.

• 1:02:19David Hoffman?

  It's the dumbest FUD.

• 1:02:21Speaker 01

  It it is, it is. And then they start fudding the sequences. So every and that's another thing, right? When you when you when you kind of like have to meet reality, you have to adjust the FUD. Because you can know that there's a reality shield that goes up and it basically says, well, you can't FUD this anymore. Like with people fighting the the merge is never gonna happen. Merge happens. What are they privy to? Withdrawals are never gonna happen. Withdrawals happen. What are they privy to? Something else.

• 1:02:43David Hoffman?

  The same Bitcoiners that have been fudding Ethereum since 2019 are still fudding Ethereum to this day. And all of the FUD that they have given us over the last four years, we've executed on and they are still Bitcoiners. Why? It's because they've picked a tribe, right? They are a reaction to another tribe. And like, that's the thing that frustrates me the most about like the Solana camp is because they've they've picked their identity. They've placed their bets and they're doubling down on it no matter what. And at some point, the market humbles you. I'm frustrated because like the Solana community won't be humbled by the market, I think, for like four more years. And in the meantime, like Sol's probably gonna go up to $250 next bull market. But they're still wrong.

• 1:03:22Speaker 01

  Well, yeah, I mean, that's the thing. Like, I guess regardless of price, because I don't think price is a good metric, a good measure of success in crypto. Because, I mean, look at the top 10, top 20, it's pretty just stupid, right? But like, I think generally on the tech side of things, like, we can already see the winners. And people will say, oh, well, you know, these other ecosystems will catch up. Maybe they will, right? Maybe they will. And that's the contrarian bet that you're making. Maybe we're totally wrong and roll ups fade away. But I just don't see that. And it comes a point where it's like, you can no longer deny the reality, right? The reality is this, if you keep denying it, you are viewed as a crazy person. And then people just ignore you. And that's why the Bitcoin community turned inward so much and everyone really ignores the Bitcoin maximalists, because they look insane.

• 1:04:07David Hoffman?

  Right. Yeah, we'll cook all those. Again, the smart ones left, and so it just left the crazy ones.

• 1:04:13Speaker 01

  Yes, and the crazy ones kept saying stuff that kept being wrong. And eventually, people just, the smart people, as you said, they clue in. And all the people who don't just aren't indoctrinated into that kind of tribe are like, well, you guys are insane. You have said this same stuff for years and none of it has come true. So they just leave. So I think that, again, comes to social layer, right? When you have a social layer like that, it doesn't lend itself to good outcomes anywhere else.

• 1:04:39David Hoffman?

  Yeah, although I do have more optimism about the Solana community more than like the current state of Bitcoin maxi community.

• 1:04:46Speaker 01

  Well, yeah, I mean, I think, I think I have more optimism about any community. Yeah, yeah, I have more optimism about any community compared to the Bitcoin one generally, but, you know, that's not a high bar. But yeah, I mean, as I've said, these things, these things definitely evolve over time. Communities evolve, they change, they expel. The people that the majority maybe doesn't want, right? And maybe sometimes you expel the wrong people. Like, as I said, the Bitcoin maximalist community, they expelled all the smart Bitcoiners. But, you know, the Solana community, to their credit, they've expelled all that crap from the SBF era, I guess you could call it. And they've managed to build up a semblance of a healthy community from me looking in the inside.

• 1:05:28Speaker 01

  I see some semblance there. Yeah, I say it's definitely healthier. So to their credit for sure. But as I said, it is an extremely uphill battle. If you started from a bad base, it's going to be very hard to get to a good base on multiple fronts. And also you have competition. You're not doing it in a vacuum. You have competing ecosystems that also want to be the one that wins at the end of the day. And they also have communities that are very kind of tribal about their their thing, whether that's right or wrong. It's just the way I think crypto ecosystems work.

• 1:05:58David Hoffman?

  Yeah, certainly. What what do you think is like the biggest thing on the Ethereum roadmap future? That is like, so like the big thing that we had versus the Bitcoiners is like proof of stake. Bitcoiners for years were like, proof of stake is never going to ship. And then it did. What do you think is like the next version of that that's on the Ethereum frontier?

• 1:06:18Speaker 01

  Well, I think we're already seeing it in terms of like the L two stuff, right? Where, as I was just saying before, there's fud around centralized sequences. There's fud around them. Things not having fraud proofs, which I I understand like the actual legitimate concerns around fraud proofs not being enabled, right?

• 1:06:34David Hoffman?

  It's centralized sequencers is not nearly as as big of a deal as like the Solana community thinks it is. Like, actually, it's kind of one of the perks of of a layer two is like you can actually have a centralized sequencer and it's totally fine.

• 1:06:45Speaker 01

  Yeah, that but that's the thing like they're overblowing stuff in in that regard. But yeah, I think that's

• 1:06:51David Hoffman?

  word in it of centralized and they're like, oh, it's centralized.

• 1:06:55Speaker 01

  Yes, exactly. So I think that's totally overblown. The, as I said, the fraud proof stuff, I understand the legitimate reasons for being concerned with that, like security risks, things like that. But if your thesis is that these things are never going to have forward proofs, it's just stupid because we already have an optimistic roll up in Arbitrum one that has forward proofs. But and and the funny thing is about this is that we have a site that tracks all of this for the L twos. We have l2beat.com, which is the most amazing website that could have been created to track this, right? And we don't have l1beat.com. We can't track all this stuff for L ones, right? We we can't. There's no there's no resource that exists for these L ones to track these sorts of stuff. But for the L twos, you have this. You can go there and you can read about every single L two. You can read about

• 1:07:38Speaker 01

  Their architecture, you could go look at their contracts because there's links to that. And, and you can digest all this information and actually understand this, but people don't and won't do that, of course, right? Because they don't really care about that. So that's the next stuff that I've been seeing. It's all the L two stuff. The reason why it's the L two stuff is because that is now the user facing layer. The L one stuff is very, besides forty eight, forty four, right? Which I haven't seen fudged yet. I thought that more people would fud this, but I think they're just very behind. I thought more people would fud the fact that the blobs expire after a certain amount of time. And they would use that and say, oh, that means you're never going to be able to know if that, if that, if what that happened was true or secure. Wait, that's not how it works at all, but I thought there'd be more fud around that. Maybe I'm going to create the fud. Maybe I'm making people aware of that now.

• 1:08:21Speaker 01

  Yeah, yeah. So, so it's, it's really just L two stuff that the FUD has kind of moved to. And I think that's actually a really positive thing because as I said, like the L two FUD is so fucking weak. Like it's, it's so weak. It doesn't stand up to scrutiny. And we have L two beat.com, which tracks all this stuff that you can just easily link to people and say, hey, this is actually what it is. You know, thi- this is what's happening here. Uh, and, and that, and that's basically it. Like I know the L two teams debate, I guess is a word you can use against each other on, on Twitter and things like that. And as I said, there are legitimate concerns, but uh, the FUD that happens, man, it's just, it's all the same. It's always the same FUD. It's always just bullshit.

• 1:08:59David Hoffman?

  I, maybe this is a naive take, but I don't know. As crypto industry grows up and progresses and we become more mainstream, a lot of that just has to get suppressed. Like the flooding and the tribalism.

• 1:09:12Speaker 01

  It becomes in, it becomes insider stuff, right? Man, like I, I remember reading uh, strings of emails from like the Linux developers. And like, who do you think's reading those emails? It's not the everyday person. It's tech nerds who care about tech drama. So like, it's the same thing. Like, do you think the, the majority of crypto Twitter is reading debates between L two teams? No. Like the majority of crypto Twitter is looking for shitcoins to gamble on, right? Like. It's, it's, it's, it's, I think we're already at that point where it may seem loud to us because we're involved with it. We are, you know, we're amongst that kind of crowd, but generally it's not. And, and like, think about all the people who are buying coins on centralized exchanges. They don't even know what an L2 is, let alone the, the debates around it.

• 1:09:56David Hoffman?

  Yeah, the, the tweet I sent out yesterday about addressing the bankless FUD. Like, we got so many comments inside the bankless discord saying like, David, why did you write this tweet? Like, what was this in reaction to? I don't even know what's going on. And I'm like, don't. So like, we're fighting with people, it's okay.

• 1:10:11Speaker 01

  Yeah, the, the, and that, that's the thing, right? Like, when you're at the, when you're, you're the one facing the FUD and the brunt of it, you think that everyone knows about it, right? You think that you, you are the, the thing that everyone's paying attention to in that moment because there's this drama. But in reality, most people have no idea what's going on because they're not plugged in like we are, right? Into that sphere, they're plugged into something else, right? So it's the same with, with anything, I think. But, uh, yeah, it's always, it's always funny when that happens. Like, I, I, I sometimes wake up and I, I, I see something on Twitter and then I go talk about it in the Daily Guay Discord. And they don't know what I'm talking about. And, uh, and I'm like, what do you mean? I've seen it all over Twitter and I link it to them. And because, and they asked me when I, when I shippost about it too, or when I, I'm like memeing about it on Twitter. Like, dude, what are you talking about? I'm like, what do you mean?

• 1:10:56Speaker 01

  You see this, it's all over Twitter. And they, they didn't, they just didn't see it for some reason, right? So I think overestimating how much coverage something has is, is something that we all do, I think.

• 1:11:06David Hoffman?

  Yeah, certainly. Emberverse in the chat just said, gotta go, guys. I just thought that the Daily Guay is up. So since people are gonna go flock to the Daily Guay, Anthony, you wanna pull up, uh, your YouTube channel so we can all see it?

• 1:11:17Speaker 01

  Oh, yeah, I can pull it up. I mean, I don't, uh, I got it here.

• 1:11:21David Hoffman?

  For all the, uh, 200 people that have been watching this show and then all the people up on the RSS feed. We're gonna talk about what Anthony Sedano does every single day. If you like this conversation, Anthony talks every single day for 30 minutes, 45 minutes today. He was paying some content debts.

• 1:11:38Speaker 01

  Yes, yeah, I, I, I didn't do one yesterday, so I, uh, I did one, uh, I didn't add an extra long one today to make up for that. I always do that because I feel bad for not doing it.

• 1:11:49David Hoffman?

  So yeah.

• 1:11:50Speaker 01

  I'm trying to find the window here that I've got the thing on. I have a million Google Chrome tabs open. It's crazy.

• 1:11:57David Hoffman?

  Yeah. So Anthony just monologues for like 30 minutes straight in a side of a single breath about everything that's going on on Ethereum. It's called the Daily Gua. It's a YouTube channel. It's also, I get it on my RSS feeds and then he also writes every single day on his newsletter.

• 1:12:11Speaker 01

  Oh, no, actually I don't anymore. I haven't for a while.

• 1:12:14David Hoffman?

  I haven't seen that in a while.

• 1:12:16Speaker 01

  Yeah. So I, it's actually almost been a year now.

• 1:12:18David Hoffman?

  Podcast content always dominates over writing content, doesn't it?

• 1:12:21Speaker 01

  It does, but it's also because I was writing the newsletter every day and I was doing the podcast every day and I was overlapping constantly with what I was talking about. And I, and I understand that not everyone watches the podcast and everyone, you know, reads the newsletter, but I, I just was like, I'm repeating myself so much. And it's a lot of work to write, uh, like something every day. It is. So I, I might bring it back as like a maybe twice a week thing where I can write longer form pieces or maybe even once a week. But yeah, I mean, as a fellow writer, you know how intense it can be.

• 1:12:51David Hoffman?

  Yeah. I've been on a writing binge, but I am slightly behind. So that's actually going to be what I'm going to do today. I'm going to write the piece that goes out on Monday.

• 1:12:59Speaker 01

  Awesome. Awesome.

• 1:12:59David Hoffman?

  Anthony, this has been great. Great to catch up with you, my man. We always should be doing this. Uh, it's more, more than we actually do. Everyone enjoys it. That's what I hear from the chat. So appreciate you coming on, brother.

• 1:13:09Speaker 01

  Yeah. Awesome. Thanks for having me on. And, uh, yeah, I guess like happy Ethereum-ing, if that's a word. Ethereum-ing.

• 1:13:18David Hoffman?

  All right. Banglaisation and Daily Gua Eens. What do you call your community? Daily Guaers?

• 1:13:24Speaker 01

  Yeah. I know. I've never used.

• 1:13:26David Hoffman?

  You gotta find a name for your community. All right. Banglaisation and Guaers. Uh, you know, the deal. Uh, crypto's risky. DeFi's risky. Crypto is risky. Uh, you can lose what you put in.