ROLLUP: CFTC's Attack On Crypto | FTX Offloading Billions | Live From Permissionless!

WRU 3rd Week of September Live From Permissionless! ----- Check your wallet with our brand new tool Claimables 🎁 https://bankless.cc/GetClaimables ------ 📣 AAVE V3 is Here! http://app.aave.com/ ------ 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 https://%E2%81%A0https//bankless.cc/Arbitrum ⁠ 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle ⁠ 🦄UNISWAP | ON-CHAIN MARKETPLACE ⁠https://bankless.cc/uniswap 🗣️TOKU | CRYPTO EMPLOYMENT SOLUTION https://bankless.cc/Toku ----- TIMESTAMPS & RESOURCES 0:00 Intro 3:45 Permissionless Recap 9:06 MARKETS https://pro.kraken.com/app/trade/btc-usd https://pro.kraken.com/app/trade/eth-usd https://pro.kraken.com/app/trade/eth-btc 12:08 Friend. Tech vs Ordinals https://twitter.com/tyler_did_it/status/1700515163906912637?s=46 https://dune.com/dgtl_assets/bitcoin-ordinals-analysis https://twitter.com/0xcygaar/status/1700557505330307308?s=46 19:43 CFTC settled charges against DeFi https://www.cftc.gov/PressRoom/PressReleases/8774-23 https://www.cftc.gov/PressRoom/SpeechesTestimony/mersingerstatement090723 https://twitter.com/lex_node/status/1699912782416658605 https://twitter.com/antonttc/status/1699935302616482204?s=46&t=2ZINVXJQKx6xO_6Wiiu_2g https://twitter.com/antonttc/status/1699935302616482204?s=46&t=2ZINVXJQKx6xO_6Wiiu_2g https://twitter.com/jchervinsky/status/1699934869118190054?s=46&t=2ZINVXJQKx6xO_6Wiiu_2g https://twitter.com/jchervinsky/status/1699934869118190054?s=46&t=2ZINVXJQKx6xO_6Wiiu_2g https://twitter.com/CFTCpham/status/1699936965259673934 28:44 Gary Doubles Down https://www.banking.senate.gov/imo/media/doc/gensler_testimony_9-12-23.pdf https://twitter.com/WatcherGuru/status/1701609274278080516?s=20 https://x.com/TrustlessState/status/1701287340314878430?s=20 33:16 Spot Bitcoin ETF https://blockworks.co/news/franklin-templeton-bitcoin-etf https://www.youtube.com/live/EdDsqW9CYys?si=SnCsraZBGR_0Z8Tx&t=12259 https://www.youtube.com/live/EdDsqW9CYys?si=SnCsraZBGR_0Z8Tx&t=12259 35:11 FTX Offloads Billions https://twitter.com/milesdeutscher/status/1701261775600025906 https://twitter.com/nobrainflip/status/1700586113251906017 40:42 Ethereum News https://twitter.com/mikeneuder/status/1701224774884643167 43:48 Metamask Snaps https://metamask.io/snaps/ 45:42 Vitalik Hacked https://twitter.com/OlimpioCrypto/status/1700677246393155657 https://warpcast.com/vitalik.eth/0xb23618 https://x.com/TimBeiko/status/1700659107764785336?s=20 50:21 Espresso is partnering with Offchain Labs https://twitter.com/EspressoSys/status/1701318209624834466?t=w9VTlOJo75aT8H8olmw2QA&s=19 https://twitter.com/EspressoSys/status/1701318209624834466?t=w9VTlOJo75aT8H8olmw2QA&s=19 52:04 NFT News https://twitter.com/huntersolaire_/status/1701191292221292978?s=46&t=2ZINVXJQKx6xO_6Wiiu_2g https://twitter.com/huntersolaire_/status/1701191292221292978?s=46&t=2ZINVXJQKx6xO_6Wiiu_2g 54:33 Jailed for 11,196 Years https://www.bbc.com/news/world-europe-66752785 55:45 FBI Investigates DCG https://www.bloomberg.com/news/articles/2023-09-07/winklevoss-claims-fuel-us-investigation-of-barry-silbert-s-dcg-crypto-empire?sref=QkiN9npb 57:10 Claimables Launch! https://www.bankless.com/claimables?ref=home-promo-banner https://twitter.com/NiftyMateo/status/1701315423495487677?s=20 58:27 Blockworks Analytics https://x.com/blockworksres/status/1701990215907475499?s=20 59:29 LayerZero x Google Cloud https://medium.com/layerzero-official/layerzero-x-google-cloud-7b4784873071 1:04:02 Questions From The Nation https://discord.com/channels/615592155481767941/1058053004705669211/1149342327240933538 1:05:59 What Are We Bullish On 1:10:01 Meme of the Week https://x.com/josephdelong/status/1701937546484158876?s=20 1:10:38 Risks and Disclosures ------ 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.

• 0:06Ryan Sean Adams?

  Bankless Nation, it is that time again for the weekly rollup and David and I are doing it from a special location again. Oh my god, I forgot to set you up, David. Let me ask you the official question.

• 0:15David Hoffman?

  Sure, let's do it.

• 0:16Ryan Sean Adams?

  David, what time is it?

• 0:17David Hoffman?

  Oh, it's the Bankless Friday Weekly Rollup, but it's happening on Thursday.

• 0:20Ryan Sean Adams?

  Yes, it is.

• 0:20David Hoffman?

  Because we are on Wednesday, the third day of Permissionless, here in the Kraken booth, on the floor of Austin, Texas. We have a live audience for the first time ever. It's a little bit intimidating.

• 0:29Ryan Sean Adams?

  Live studio audience.

• 0:30David Hoffman?

  Bankless citizens, people in the Bankless DAO, all watching us as I speak these words right now. I don't know how I feel about that, but here we go.

• 0:37Ryan Sean Adams?

  You know what? We're just going with it. This is a fantastic setup that we have here at Permissionless 2023. Actually, Permissionless 2, that's what they call it. And Kraken put this booth together for us, so extremely grateful for the hospitality. This is a professional setup.

• 0:51David Hoffman?

  Yeah.

• 0:52Ryan Sean Adams?

  Way better than my home office.

• 0:54David Hoffman?

  Not so amateur shit, that's for sure.

• 0:55Ryan Sean Adams?

  I know. And so David and I are in person today, obviously, and we're here to bring you...

• 1:00David Hoffman?

  The Weekly Rollup!

• 1:01Ryan Sean Adams?

  All right. Topics of the week, David. What are we talking about, man?

• 1:04David Hoffman?

  The CFTC has joined the SEC in the fight against crypto. Oh, wait, that's bad. That's a bad thing.

• 1:10Ryan Sean Adams?

  Yeah, I thought they were the good guys.

• 1:11David Hoffman?

  That's not great. Okay, well, there's more. FTX is about to sell a huge portion of their token holdings. Should we... Oh, that's also bad.

• 1:18Ryan Sean Adams?

  Oh, no.

• 1:20David Hoffman?

  Ethereum Foundation just dropped a proposal on a native liquid staking. That's good. That's good. That's a good thing. And then finally, friend.tech not dead yet. Okay, also good. Also good. I came back from Burning Man and I thought that Friend's tech would be dead, and it was like four times larger than I ever thought that it would be.

• 1:35Ryan Sean Adams?

  Is there some signal there?

• 1:36David Hoffman?

  Yeah. And then my share price going into Burning Man was 0.7.

• 1:41Ryan Sean Adams?

  Dude, I don't want to hear about your share price since...

• 1:42David Hoffman?

  And I came back from Burning Man and it was 0.2, and I was sad.

• 1:47Ryan Sean Adams?

  Well, that makes me happy. Sorry, David.

• 1:49David Hoffman?

  And then some more bad news of the week. Vitalik's Twitter got hacked.

• 1:53Ryan Sean Adams?

  It's bad.

• 1:54David Hoffman?

  X got hacked. Some details around that and how to protect yourself from Twitter and how to make sure that you actually might be exposed. You might have your phone number in Twitter and you don't know about it, so we're gonna talk about that.

• 2:04Ryan Sean Adams?

  This is one that I didn't know. Like, if Vitalik can get hacked, then what about the rest of us? David, before we get into the chatter of the week, and I know we want to talk about Permissionless even before we get to the markets, we gotta do a shout out to our friends and sponsors over at AVE because... A lot of you guys listening are still in AVE V2. And there's the, there's the opportunity to upgrade to AVE V3.

• 2:28David Hoffman?

  Cool.

• 2:29Ryan Sean Adams?

  Tell them, tell them why they should upgrade, David.

• 2:30David Hoffman?

  Well, first off, the AVE V3 protocol is just better than V2. Three is better than two, it's a higher number.

• 2:36Ryan Sean Adams?

  Yep.

• 2:36David Hoffman?

  But why is it better? There's just a different amount of efficiency. There's asset efficiency in AVE V3. There's gas efficiency in AVE V3. There's some extra bells and whistles. There's asset isolation mode, so you can get some better parameters for specific assets inside of isolation mode. And then you can also just do a bunch of things all at once, like remove assets, swap assets, redeploy assets all in a single transaction because of AVE V3. So if you are one of the users that has up to over a billion dollars in AVE V2, everything is better if we all have the same party rather than two different parties. So go and migrate from AVE V2 to AVE V3, you laggard.

• 3:14Ryan Sean Adams?

  Yes, because three is better than two.

• 3:16David Hoffman?

  Three is better than two. There's also AVE Grants DAO. So Grants, that's free money for builders who are building on the AVE protocol with extra emphasis on the GoStablecoin. They're bringing a new stablecoin out of AVE. So if you would like free money, do you like free money?

• 3:30Ryan Sean Adams?

  Yeah, I mean, this isn't quite free because I gotta build something, David.

• 3:33David Hoffman?

  Sure, okay, trade your labor for money.

• 3:35Ryan Sean Adams?

  Yeah, I like that.

• 3:36David Hoffman?

  Unconditional money after you build something or to build something. I don't know, details are in the show notes, also at avegrants.org.

• 3:43Ryan Sean Adams?

  I'd be down. All right, before we get to markets, I think the people deserve an update on permissionless.

• 3:48David Hoffman?

  Yeah.

• 3:48Ryan Sean Adams?

  Okay, so let's talk permissionless. It's been great so far.

• 3:52David Hoffman?

  We're on the second, the last third of the last day of permissionless, so it's coming to a close.

• 3:57Ryan Sean Adams?

  So do you want to tell me about some of your favorite talks so far? Let's start with the content.

• 4:01David Hoffman?

  I've done eight talks.

• 4:03Ryan Sean Adams?

  Done eight talks?

• 4:04David Hoffman?

  Excuse me, I have moderated eight panels.

• 4:06Ryan Sean Adams?

  Yes.

• 4:07David Hoffman?

  So I'm racking up the content. How many did you get to?

• 4:10Ryan Sean Adams?

  I did one, David. Eight to one.

• 4:13David Hoffman?

  Wow.

• 4:13Ryan Sean Adams?

  Anytime I'm asked.

• 4:14David Hoffman?

  Is lower better or higher better?

• 4:16Ryan Sean Adams?

  Um, I don't, it depends on whether you like to do lots of panels or not.

• 4:19David Hoffman?

  I love doing panels.

• 4:20Ryan Sean Adams?

  Okay, I don't. So anytime someone asks me to do a panel, I'm like, David, would you like to do this panel?

• 4:24David Hoffman?

  Wait, that's how I ended up with eight? Okay.

• 4:26Ryan Sean Adams?

  That's how.

• 4:26David Hoffman?

  I think that my favorite one was, uh, we did a Jesse Pollock and Ben Jones, uh, on chain is the new online conversation, which, I mean, we just had them on for the super chain, uh, but this was a net new episode, net new, uh, conversation. Uh, and I really enjoyed that one. That one just felt really fun. And that one I actually just did not prepare for because I just know these guys.

• 4:46Ryan Sean Adams?

  Yeah.

• 4:46David Hoffman?

  I know this haunted sphere.

• 4:47Ryan Sean Adams?

  What was the takeaway from that?

• 4:48David Hoffman?

  Um, so we have like on chain is the new online. This is the new top of funnel, uh, for base. Base is kind of like base in the front. Optimism governance in the back. We have the golden era of web three design happening around base. Like we're getting better at design for attracting new people to get them on chain. And then we have retroactive publics good funding in the back. And so connecting that, those dots and filling in the gaps a little bit, and then talking about how this is a flywheel, right? More people coming in on base leads to more retroactive public goods funding, which makes base better as a part of the OP stack, which leads to more people coming into base. And this is all a flywheel that hopefully scales public goods out to the world. That was the TLDR of the conversation. Doesn't mean that you shouldn't also go listen to it. It's available on the YouTube, on Blockworks YouTube, not Bankless YouTube, actually.

• 5:31Ryan Sean Adams?

  Yeah, there's, and you know, um, Jordan asked me what my favorite one was.

• 5:35David Hoffman?

  Sure, you only did one, but what was it?

• 5:37Ryan Sean Adams?

  It was actually the one that I, I loved, and it wasn't because of me. It wasn't because of the moderator.

• 5:41David Hoffman?

  Yeah.

• 5:41Ryan Sean Adams?

  But the panel that, um, we got to do with the regulators. So it was Hester Purce. I think we'll talk about it later in the episode. Hester Purce, Brian Quintan, CFTC regulator, Tom Emmer, uh, majority, House majority whip. So we got a congress, a member of Congress.

• 5:56David Hoffman?

  On the floor.

• 5:57Ryan Sean Adams?

  To come to our crypto conference, uh, and then Kristen Smith.

• 6:00David Hoffman?

  Of course.

• 6:00Ryan Sean Adams?

  And she's kind of a crypto lobbyist. And this, honestly, it gave me some hope, David, because things are looking kind of bleak from a US regulatory perspective. And this gave me some hope, uh, because these, these people are fired up and they were ready to fight for crypto. And they have some power in DC to do that.

• 6:16David Hoffman?

  You say bleak, but it's definitely bleak with strong notes of optimism.

• 6:20Ryan Sean Adams?

  Yeah.

• 6:20David Hoffman?

  Yeah. Uh, the, I think the comment that got the most applause was towards the end where Hester Purce said, we don't even need to, uh, Well, I can't remember what she said the details were, but the punchline was like, the law is on our side.

• 6:33Ryan Sean Adams?

  Yeah.

• 6:33David Hoffman?

  So we just have to, you know, make sure that the United States has run by the rule of law and then we will be golden.

• 6:40Ryan Sean Adams?

  Yeah, absolutely.

• 6:41David Hoffman?

  It's it's nice having the law on your side.

• 6:42Ryan Sean Adams?

  Oh, it's I I mean, that is great, and we are winning in the court system, that's for sure. That was a point that was made. Uh, David, there's also been some bankless parties going on.

• 6:50David Hoffman?

  We had the the largest party that we've ever thrown, uh, six, six hundred people, six hundred people, a bunch of bankless citizens, some little podcast guests. Jesse Pollak was there, uh, the Blocker Scene was there. Gosh, everyone, I think, I don't know if there was other parties that Monday night, but everyone was at our party because it was the best.

• 7:05Ryan Sean Adams?

  It it was so fun.

• 7:06David Hoffman?

  We throw the best parties.

• 7:07Ryan Sean Adams?

  Yeah, meeting in real life, meeting people in real life. I was getting used to like, you know, the handshakes that you do and like the hugs and stuff.

• 7:12David Hoffman?

  Ryan is learning how to be human. This is actually the third time that Ryan and I have ever hung out. It does feel normal. He does feel like a human. He's doing, he's coming along.

• 7:20Ryan Sean Adams?

  I'm doing human things. I think I got a lot of proof of humanity on this trip. There's a lot of Twitter posts out there with, uh, images, so, um, I think RSA truthers, they're gonna have a hard time. Speaking of this conference, what is happening next year at permissionless? So if you missed it, people missed it.

• 7:36David Hoffman?

  Permissionless 3. This is something that I've been unpacking with, uh, Mike from Blockworks. We've got a lot of plans for Permissionless 3. Uh, I think we're kind of realizing that, A, we want to keep on doing this, so Permissionless 3, here we go, uh, Salt Lake City in October 2024. But we want it to be something net new, like, there's a bunch of conferences out there. There's a bunch of, actually, there's three conferences going on this weekend. Uh, and we want Permissionless to elevate. We think that we can apply some innovation to the content world, to the, to the, uh, conference world, and make something that's not just a conference, something, something that's bigger than a conference, that has a conference in it, but more stuff around it. Uh, here is my shoot-from-the-hip idea that I'll share with you that is not totally set in stone, but I'm gonna try and convince the Blockworks squad of this.

• 8:15Ryan Sean Adams?

  Oh.

• 8:16David Hoffman?

  So, day four.

• 8:17Ryan Sean Adams?

  You're using your podcast fully platform to do that.

• 8:19David Hoffman?

  That's exactly right. Day four of a three-day conference, which I know doesn't make any sense, but that's because day four, I want to be tribal field day, tribal games. So this is like tug of war and dodgeball and an obstacle course.

• 8:35Ryan Sean Adams?

  A lot of nightmares from high school from field day. Can you invoke that?

• 8:39David Hoffman?

  Yeah, I do. And so like if you are part of a tribe, like Layer 2 versus Arbitrum Dodgeball, or Bankless versus Blockworks tug of war, or Bankless Dow. I don't know. Are you a part of a tribe? Come to the tribal field games.

• 8:54Ryan Sean Adams?

  Thanks.

• 8:54David Hoffman?

  Day four of a three day.

• 8:55Ryan Sean Adams?

  In an industry dominated by nerds that David wants to bring back PE.

• 8:59David Hoffman?

  Bowling, yes.

• 9:01Ryan Sean Adams?

  Oh, my God. Well, you know, I don't know if you were a nerd or jock in school, David, but you know.

• 9:06David Hoffman?

  I'll let the listeners come to the conclusion on that.

• 9:08Ryan Sean Adams?

  All right. Well, cast your votes, folks. Let's talk markets, David.

• 9:12David Hoffman?

  Markets, right.

• 9:12Ryan Sean Adams?

  Get to the market. So sorry for the FOMO if you couldn't make it. Permissionless has been awesome. But let's get to the regular scheduled program. Thanks to Kraken, of course, for these charts. What are we looking at?

• 9:22David Hoffman?

  The Kraken charts in the Kraken booth. It's been great.

• 9:26Ryan Sean Adams?

  Cracception.

• 9:27David Hoffman?

  Okay, Ryan, I just had to pause our recording because I needed to verify this and I am verifying it. The we're up on the week. We are up on the week. I don't know how that happened. We dumped. We had the classic conference dump. We always dump during conferences. But somehow we're up on the week. Bitcoin starting the week at $25,100, up 4% to $26,300. Wow. Oh, good for us.

• 9:47Ryan Sean Adams?

  Yeah. How about ETH price?

• 9:49David Hoffman?

  ETH price 1550 on the week. We must have just like bottom ticked the perfect timing. Up 4% on the week to 1610.

• 9:55Ryan Sean Adams?

  And the ratio?

• 9:56David Hoffman?

  Down 2.5% on the week.

• 9:59Ryan Sean Adams?

  Ratio ratio go down because ETF or is this?

• 10:01David Hoffman?

  Yeah, something like that. Or or noise. But definitely ETF is pushing pressure on Bitcoin. So that total crypto market cap 1.07 trillion on the week. I think that's about flat.

• 10:10Ryan Sean Adams?

  All right. Well, look, I'm happy to play the the happy music this week. This has overall been a net win on the price side. All right, David, we're just talking about the week to week price action. But I want to zoom out for a minute and talk about the cycle, the year that we're in. Uh, did you see this?

• 10:24David Hoffman?

  Yep. Yeah, this is great meme. Great meme.

• 10:26Ryan Sean Adams?

  I don't know who made this. This is fantastic. Can you describe? For listeners, what we're looking at.

• 10:30David Hoffman?

  Okay, so we are looking at a, call it a four by four box grid. But these things are shifted up because the boxes lean upwards. And the first box in the top left corner is 2011, followed by 2012, 2013, 2014. And so these things go upwards and then we go one row down, 2014 to 2017, and then we go down. And so these things are, we're talking about the four-year cycles, cut up into four years, right? And so 2022 is lining up with the first year of a four-year cycle where it's the bear.

• 10:58Ryan Sean Adams?

  It's red.

• 11:01David Hoffman?

  And then 2023, pre-bowl, leads into 2024, first bowl, and 2025, second bowl. Maybe second bowl is synonymous for blow off top. But we are most of the way through pre-bowl. And this is like, I feel like this is a part of a bell curve meme where it's just so stupid simple to understand. That's just like, oh, like the cycles can't play out, efficient market hypothesis. We're not going to have another cycle again. It can't be four-year cycles over and over and over again. That's the mid curve take. And I think the left curve take is just like, it goes in four-year cycles.

• 11:31Ryan Sean Adams?

  Yeah, I totally agree. And so is the right curve take, right? So we got bear, we got pre-bowl, we got first bowl, we got second bowl. And if you look at this chart, I mean, it kind of maps, right? So 2023 is like 2019, which is what we've been saying, which is like 2015, which is like 2012. Do you remember 2012?

• 11:48David Hoffman?

  No, I don't.

• 11:48Ryan Sean Adams?

  I was not here for 2012.

• 11:49David Hoffman?

  2019, I would definitely characterize as just price being completely divergent from fundamentals. And that's definitely what I feel.

• 11:56Ryan Sean Adams?

  David, this is the base case. This is kind of my prediction, you know, like it's hard to make predictions on cycles yet. I'm kind of ready to make it. I feel like it's probably going to play out this way.

• 12:07David Hoffman?

  Yep, until proven otherwise.

• 12:10Ryan Sean Adams?

  Tell me about friend.tech, all right? So you alluded to this in the intro. You were talking about coming back from Burning Man, being surprised that friend.tech was still a thing.

• 12:19David Hoffman?

  Like four times larger than I left it.

• 12:21Ryan Sean Adams?

  Okay, how do we know it's still a thing? I think we should talk about some metrics here.

• 12:24David Hoffman?

  Yeah, we got, there's a Dune board that we can look at. I'll pull out some of the details here. The numbers I'm about to spit out are already five days old. And so there's even more numbers than this, but in the, from the 8th of September. New users came in at 1,000 new users, up 50%. Returning users, 4,025%, up 25%. And then total incoming users, and this is as of just before recording, total users of friend.tech, unique users, unique addresses, for 1,480,000. And these are much more

• 12:53Ryan Sean Adams?

  Wait, wait, can you repeat that number again?

• 12:55David Hoffman?

  148,000 unique users of FriendTech. Unique Twitter accounts that have signed into FriendTech, which is why this is a better metric than just like a unique Ethereum address.

• 13:03Ryan Sean Adams?

  Wow.

• 13:04David Hoffman?

  The volume, the TVL of FriendTech, 18,000 Ether, that's $28 million. And that's 4,500 Ether in fees that has been collected by the system. And that is, that has been split. One half of those fees goes to the FriendsTech team. The other half goes to all the FriendsTech participants, all the people that are aggregating the trading fees. 2.2 million transactions. 2.2 million transactions.

• 13:30Ryan Sean Adams?

  Can I ask you a question about this TVL really quick?

• 13:32David Hoffman?

  Sure.

• 13:32Ryan Sean Adams?

  So is this TVL all ETH?

• 13:35David Hoffman?

  Yes.

• 13:35Ryan Sean Adams?

  We're talking about 28 million in ETH. We're not talking about a native FriendTech token that's

• 13:39David Hoffman?

  Nope, there is no token. Nope, no stablecoins. It's a ETH maxi system. There's only one currency inside of FriendTech, and that's ETH.

• 13:46Ryan Sean Adams?

  That is great.

• 13:47David Hoffman?

  Yeah.

• 13:48Ryan Sean Adams?

  I'm very excited about this. Okay, so, but, but, but, remember, I mean, we did this episode. There's Ponzi, there's Ponzi economics behind this, of course, a little bit.

• 13:56David Hoffman?

  A little bit. I mean, it's mostly, it's kind of true for all types of finance, like finance is perceived.

• 14:03Ryan Sean Adams?

  Yeah.

• 14:03David Hoffman?

  So these are all paper gains.

• 14:04Ryan Sean Adams?

  Yeah.

• 14:04David Hoffman?

  Because that's how finance works. Finance is paper gains. So the 0xRacerAlt, who's one of the creators of FriendTech, his share price is 8.8 Ether. There are 360 shares, which they call keys, which I'll call shares. Market cap, 970 Ether. So Racer, top number one on FriendTech, market cap of almost 1,000 Ether, followed by 0xCaptainLevi. 0xCaptainLevi, there's an interesting story to him. I, I think this is true. He wasn't like an influencer or anyone really before FriendTech.

• 14:35Ryan Sean Adams?

  He's just been working the system.

• 14:36David Hoffman?

  He has been working the system.

• 14:38Ryan Sean Adams?

  Yeah.

• 14:38David Hoffman?

  Absolutely grinding. He came into my share room, my key room, whatever, and it's like, hey, David, will you buy one of my shares? And I'm like, okay. It's like, his share price is .002. I'm like, I don't, I'll just appease this individual. I don't know who they are.

• 14:53Ryan Sean Adams?

  Yes.

• 14:53David Hoffman?

  So I buy one of his shares. He is now number two.

• 14:56Ryan Sean Adams?

  Wow.

• 14:57David Hoffman?

  Share price of 6.5 Ether. It's one of the biggest, it's by far the biggest returns I've ever had. And at the time I was like, oh, okay, fine, I'll just do it. And now I'm like, man, I should have bought 10.

• 15:06Ryan Sean Adams?

  Well, all of these are still crypto people, which is somewhat interesting.

• 15:09David Hoffman?

  All the OnlyFans people have been pushed out and the crypto people are back on top.

• 15:13Ryan Sean Adams?

  Oh, really? I wonder what the next cohort is. Do you think this still has staying power or is this just a?

• 15:17David Hoffman?

  This has way more staying power than I thought that it would. They're the three, remember the three comma three from? Yeah, so that started to emerge, which has raised my heckles about, man, that doesn't feel sustainable.

• 15:28Ryan Sean Adams?

  That's a Ponzi game wrapped in a Ponzi game.

• 15:30David Hoffman?

  It's 3.3 came from the Olympist Dow, which had some astronomical price action in 2021. And then also in reverse as well. Because 3.3 was, what was 3.3 is like, hey, everyone buy and don't sell. And that doesn't work over the long period of time.

• 15:46Ryan Sean Adams?

  Because the game theory, someone's going to sell at some point in time.

• 15:49David Hoffman?

  Why, why are people doing this? Why is 3.3 emerging? Well, why is TVL and FriendTech going up? Well, people are farming the airdrop. People are starting to unpack the black box of the points distribution. There's a points distribution at the end of every single week. And people are assuming that this is going to just be a precursor. Like how many points you have is going to lead to how much tokens that you get for the airdrop. And so people are starting to figure out the algorithm for how they're distributing points. And they're realizing that if you just have a high portfolio balance, you'll get a lot of points. And so that's incentivizing people buying people's shares. So they don't really care about people's shares. They're just buy, just hit buy so you can farm the airdrop. So this has turned into an airdrop farm, I would say.

• 16:28Ryan Sean Adams?

  I get it. Yeah, I get it. I still don't, um, I'm still a net, like, I think this is still a net good. I think it's still doing more, more good than hard.

• 16:37David Hoffman?

  You sound hesitant.

• 16:38Ryan Sean Adams?

  Yeah, I'm a little, you know, we did an entire episode and why there's some hesitancy. But this is fairly fascinating. The first month, 5.3 million paid to creators through FriendTech, 5.3 million in app revenue. We talked about the TVL. This is one particular user's experience here. This is not easy tweeting this out. I only deposited about five ETH into FriendTech some weeks ago. And then he's showing his portfolio value and it's like 19 ETH right now, including 7.1 ETH in trading fees. So some people are now making some substantial money from this.

• 17:11David Hoffman?

  Check how many followers this guy has. How many followers? Is this a big influencer or is this a?

• 17:16Ryan Sean Adams?

  Are you talking about their Twitter followers?

• 17:17David Hoffman?

  Yeah, not easy. Not easy. They have 110,000 followers. Okay, I would definitely categorize that person as an influencer. So they are getting some. Trading fees, those trading fees are coming from the benefits of just having a lot of social capital. But man, the portfolio numbers, I mean, that's just capital appreciation. Friends shares are up. There you go. Friends shares are up. David, what do we have coming up next? Coming up next, CFTC takes their turn as being the bad guy of the week, not to be upstaged. Gary wants that position, that number one spot, so he's doubling down. He's earned it. He's doubling down on his anti-crypto approach. MetaMask launches Snapz, so we're going to talk about that. And also, FTX bankruptcy is incoming, a massive cell wall of crypto. How will that affect markets? We're going to unpack some of those numbers and more. But first, a moment to talk about our fantastic sponsors, Kraken, who are in the Kraken booth

• 18:02David Hoffman?

  onstage here at Permissionless. So thank you, Kraken, for supplying the booth, the charts, and also sponsoring Bankless. Let's go here for them right now. Kraken Pro has easily become the best crypto trading platform in the industry. The place I use to check the charts and the crypto prices, even when I'm not looking to place a trade. On Kraken Pro, you'll have access to advanced charting tools, real-time market data, and lightning-fast trade execution, all inside their spiffy new modular interface. Kraken's new customizable modular layout lets you tailor your trading experience to suit your needs. Pick and choose your favorite modules and place them anywhere you want in your screen. With Kraken Pro, you have that power. Whether you are a seasoned pro or just starting out, join thousands of traders who trust Kraken Pro for their crypto trading needs. Visit pro.kraken.com to get started today.

• 18:45David Hoffman?

  Arbitrum is accelerating the Web3 landscape with a suite of secure Ethereum scaling solutions. Hundreds of projects have already deployed on Arbitrum One with flourishing DeFi and NFT ecosystems. Arbitrum Nova is quickly becoming a Web3 gaming hub, and social apps like Reddit are also calling Arbitrum home. And now, Arbitrum Orbit allows you to use Arbitrum's secure scaling technology to build your own Layer 3, giving you access to interoperable, customizable permissions with dedicated throughput. Whether you are a developer, enterprise, or a user, Arbitrum Orbit lets you take your project to new heights. All of these technologies leverage the security and decentralization of Ethereum and provide a builder experience that's intuitive, familiar, and fully EVM-compatible. Faster transaction speeds and significantly

• 19:29David Hoffman?

  lower gas fees. So visit arbitrum.io, where you can join the community, dive into the developer docs, bridge your assets, and start building your first app with Arbitrum. Experience Web3 development the way it was always meant to be. Secure, fast, cheap, and friction-free.

• 19:43Ryan Sean Adams?

  David, sad news this week. The CFTC charged some DeFi protocols. These are fantastic, I think fantastic teams. Great DeFi protocols.

• 19:51David Hoffman?

  I've used them.

• 19:52Ryan Sean Adams?

  I feel like Anakin. I thought you were the chosen one.

• 19:54David Hoffman?

  What, to the CFTC?

• 19:55Ryan Sean Adams?

  Yeah, to the, no, it wasn't Anakin. Who was it? It was Obi-Wan, saying to Anakin. I, I mean, the CFTC was supposed to be, I think, a lot of people in crypto, a much more moderate, incredibly neutral version of a regulator. And we're constantly pointing out, hey, SEC, we wish you could be more like the CFTC.

• 20:13David Hoffman?

  More like them.

• 20:14Ryan Sean Adams?

  And so that's the context through which this press release comes out. I'll read the title. "CFTC Issues Orders Against Operators of Three DeFi Protocols For Offering Illegal Digital Asset Derivatives Trading." What are these protocols, David?

• 20:28David Hoffman?

  Open, ZeroX, and Derix. Open, if you are familiar with Squeeth, which is squared ETH, which is a leveraged product, that came from Open. ZeroX, or Matcha. They also have a number of integrations across the space. Matcha, I've used Matcha quite often.

• 20:44Ryan Sean Adams?

  Yes.

• 20:44David Hoffman?

  And then Derix, less familiar with Derix, but it's another derivative exchanges. Derivatives, of course, fall under the purview of the CFTC, and so they have deemed that they don't like these projects.

• 20:54Ryan Sean Adams?

  Yeah, so Derix and Open were charged with failing to register as a swap execution facility, failing to register as a futures commission merchant, failing to adopt a customer ID program, that's Bank Secrecy Act, AML KYC stuff, and they were all charged with illegally offering leveraged and margin retail commodity transactions in digital assets. Oh my God, can you imagine?

• 21:16David Hoffman?

  It sounds like a bunch of nation-state speak.

• 21:19Ryan Sean Adams?

  I mean, some of these things were just basically levered assets. I mean, Open has been here since the very beginnings of DeFi. They were one of the initial kind of options projects I've explored. Just a fantastic team, I believe, based in the US. ZeroX as well, OGs. They built so much.

• 21:35David Hoffman?

  Will Warren, shout out Will Warren.

• 21:36Ryan Sean Adams?

  Yeah, and Derix, I'm not so sure about the, but like, this is quite the chilling effect, I think. So the fines were not substantial.

• 21:43David Hoffman?

  These aren't, these aren't long-tail shitty DeFi projects.

• 21:46Ryan Sean Adams?

  No.

• 21:47David Hoffman?

  These are our friends and families, just like inside of the crypto space, building primitives to support permissionless finance.

• 21:54Ryan Sean Adams?

  Yep, so it's, it's pretty sad. It's, it's kind of depressing. The fines were not substantial. So Open, 250K, ZeroX, 200K, Derix, 100K.

• 22:04David Hoffman?

  And a cease and desist.

• 22:07Ryan Sean Adams?

  And a cease and desist? God, so I don't know what the future of Open is. They haven't released anything publicly around this. I think for 0x and Matcha, it means basically like from their front end, basically delisting some of these leveraged tokens, right? Because, you know, adults in America can't make wise choices. And so if you have a levered ETH product, it's not allowed, right?

• 22:29David Hoffman?

  Okay, Matcha is a front end to 0x, which is spun up by the 0x company. But the 0x protocol is just like Uniswap. Anyone who wants to delist assets can F off. You can't.

• 22:41Ryan Sean Adams?

  Yep, yep. So anyway, quite the chilling effect. So what does a new company, a DeFi project do? Now the CFTC is also going a little bit rogue, going a little bit Gensler. There was one commissioner that dissented here.

• 22:55David Hoffman?

  Oh, in Hester Perstile?

• 22:56Ryan Sean Adams?

  Yes, Hester Perstile dissent, which was good to see. But also unfortunate, David, only one. I don't know how many CFTC commissioners there are. It's like five to seven, something like that. David's Googling it for us. But only one dissented. It would have been nice to see another voice, another couple of voices here. Anyway.

• 23:15David Hoffman?

  Five commissioners.

• 23:16Ryan Sean Adams?

  Commissioner Summers, Mercengers dissent went like this. "The commission's orders in these cases give no indication that customer funds have been misappropriated, or that any market participants have been victimized by the DeFi protocols in which the commission has unleashed," I like that word, "unleashed its enforcement powers. I am concerned that the commission, in these cases, is taking another step down the path of bringing enforcement actions when we should be engaging the public."

• 23:42David Hoffman?

  Yeah, yeah, yeah. That's a good point. No one that I know feels aggrieved. There are no, there are no victims here.

• 23:48Ryan Sean Adams?

  There aren't. So, but the CFTC feels aggrieved enough to shut it down in America. This is, I think, a pessimistic take from Gabe Shapiro, but maybe an accurate one. What's his take here?

• 23:59David Hoffman?

  Gabe says that the CFTC is an even worse regulator. Oh, that's, this SEC is pretty bad. I'm assuming he's alluding to the comparison of the SEC. He says, "If you run any kind of interface, etc., for a DeFi credit protocol, block the United States. Many people told me I was crazy when I said that the CFTC's case against Ukidao," that's the BZX protocol, "simply makes DeFi illegal under the CFTC's view of US law." I was right. Uh, okay.

• 24:28Ryan Sean Adams?

  The prospect, the prospect of a regulator being worse than the SEC. I'm not ready to go that far, but this really, this, this case does not look good. And here's something that's equally disconcerting in these charges, David. Anton Chang, uh, making the point that geo-blocking was not enough in this case. So Open was fined 250K, sent that cease and desist for leverage ETH that wasn't even executed through Open. It was executed through Uniswap, okay? And so-

• 24:55David Hoffman?

  They bought the asset through Uniswap and then they charged Open because Open created the asset.

• 25:01Ryan Sean Adams?

  Yeah, but the, the website that Open maintained actually implemented geo-blocking. So if you went to the website for Open, they were doing the right thing by banning, you know, uh, American residents from participating.

• 25:13David Hoffman?

  The right thing, yeah.

• 25:14Ryan Sean Adams?

  The fact that it was on Uniswap was enough. And the fact that they took what they thought were preventive measures to make the CFTC happy was not enough, even though they geo-blocked-

• 25:23David Hoffman?

  There will never be anything that's enough. Nothing will be enough.

• 25:26Ryan Sean Adams?

  Uh, absolutely brutal here. So this is, uh, Jake Trivinsky. Perhaps we should lay to rest the idea that the CFTC is a better regulator for crypto than the SEC. Today, the CFTC violated the court's opinion in the Uniswap class action, its own principles during attack on DeFi. The Uniswap course case was, of course, we talked about that last roll-up. That was a big boon for crypto and DeFi.

• 25:48David Hoffman?

  Hey, you know what? If, if we can take this to court, is this just more surface area for future wins?

• 25:52Ryan Sean Adams?

  I don't know, David, because they keep just respawning Gary Genslers. They, they've got like unlimited Gary Genslers that they're throwing at us. All right? And so their response is pretty high.

• 26:00David Hoffman?

  Absolute nightmare.

• 26:01Ryan Sean Adams?

  Um, yeah. So, but, but, but when I made this point to Jake, all right? Here, here's part of the silver lining, and I do want to get to the silver lining in a minute. Uh, I said, hey, it feels like we're losing here. What's happening? Jake says, "They could say whatever they want in a settlement agreement, or in speeches, or in guidance, or in notices of proposed rulemaking. None of it counts unless a court says it does." You may have noticed that we keep winning in courts.

• 26:24David Hoffman?

  Oh, yeah.

• 26:25Ryan Sean Adams?

  That's not going to stop. In the end, we win. The courts are slower moving, but they are making the right decisions. In the end, we win. I, uh, I happen to believe that, David. I think we're on the right path.

• 26:35David Hoffman?

  Okay, so there, the, there's potential here for these companies to take the CFTC to court and we can win?

• 26:41Ryan Sean Adams?

  Hundred percent. I mean, we have to be bankrolled to do that. We have to be ready to do that. We have to bankroll. There, there is another CFTC commissioner that's recommending an alternative approach. I noticed that Commissioner Pham here, that, that is her name. She did not dissent, and I wish she would have, although she is proposing a pilot program, a sandbox, so that, you know, companies can come in and I guess, you know, use the sandbox type approach so that they foster innovation. Maybe that'll take off, maybe not. It hasn't worked when Hester Purce proposed it on the SEC side.

• 27:14David Hoffman?

  Is this, is this, so like, there's always that question of like, is this malicious? Or is this ignorance?

• 27:19Ryan Sean Adams?

  Yeah.

• 27:20David Hoffman?

  I, I don't know. I'm, is I might overly optimistic to call it ignorance, like, because they, the punchline that we know is that they are asking things that are impossible. And they are not, there is no way out for these protocols to be compliant based on the nature of what they are. And so, and then they are giving charges anyways. I, ignorance?

• 27:39Ryan Sean Adams?

  No, not at this point, David. I think that, I think I'm in team, this is malicious. This is an actual kind of squelching of what we're doing here. It's another overreach. It's a, it's a mini Gary Gensler type of move. We've seen it play out at the SEC. I do think that regulators' incentives skew in this direction, anyway.

• 27:58David Hoffman?

  There, you did, right, I say a line I remember forever ago about just like, why, why might you want to be bearish about the state of regulation? Is because like, all the smart regulators get frustrated and then they go leave into the private markets, like Brian Quintenz of the, formerly of the CFTC, now at A16Z.

• 28:14Ryan Sean Adams?

  Yeah.

• 28:14David Hoffman?

  We like Brian. You were talking to him on stage.

• 28:16Ryan Sean Adams?

  Yeah.

• 28:17David Hoffman?

  He's no longer in the regulatory apparatus. He is at A16Z, where he probably feels much better able to suit the industry and work, and work forwards.

• 28:25Ryan Sean Adams?

  Yeah, there's like a values brain drain where they kind of get sucked out into crypto. The chairman of the CFTC-

• 28:31David Hoffman?

  The only status are left.

• 28:32Ryan Sean Adams?

  Yeah. The chairman of the CFTC is a gentleman by the name of Rossin Benham, and I feel like he should come on the podcast. He's a Democratic appointee. He hasn't embraced anything crypto positive yet, so we'll see. Yo, Gary does not want to be upstaged this week, okay? We're talking about the CFTC, and apparently he doesn't like that. So he had some things to say. He was called in front of Senate, in a Senate hearing, and he took some time out of his testimony to say some things about crypto. Do you want to hear it?

• 28:59David Hoffman?

  All right, let's do it.

• 29:00Speaker 02

  And help protect Americans from the crypto abuses that cost consumers billions.

• 29:05Speaker 03

  If they were to live up to the investor protection built into their current laws, it would help investors, but right now, unfortunately, there's significant noncompliance, and it's a field which is rife with fraud, abuse, and misconduct.

• 29:22David Hoffman?

  That's malicious. I know malicious when I can see it.

• 29:26Ryan Sean Adams?

  Significant noncompliance that is rife with fraud, abuse, and misconduct.

• 29:30David Hoffman?

  You know, he never actually listened to companies when he says noncompliance. It's just like homogenous in general.

• 29:36Ryan Sean Adams?

  It's all of them.

• 29:37David Hoffman?

  Vibe of noncompliance.

• 29:38Ryan Sean Adams?

  Yes, they feel very noncompliant. He actually continued, "We've seen this story before," Gary said. "It's reminiscent of what we had in place in the 1920s before the federal securities laws were put in place." Of course, right? It was the Wild West, and then the SEC rode in and saved the day. "Thus, we have brought a number of enforcement actions, some settled and some in litigation, to hold wrongdoers accountable and promote investor protection." So that's how he feels about crypto, David.

• 30:05David Hoffman?

  If there's one thing that I think listeners should do is they should listen to Eric Voorhees's opening speech at Permissionless.

• 30:10Ryan Sean Adams?

  My god.

• 30:12David Hoffman?

  Brought the absolute guns to the table. Man, that was, it really started off the conference that well, and if anyone feels energized to have some anti-nation-state regulation content thrown their way, definitely listen to Eric's speech.

• 30:27Ryan Sean Adams?

  You know, you know the thing about that speech, and I think Eric's approach in general?

• 30:30David Hoffman?

  He called us farm animals.

• 30:31Ryan Sean Adams?

  Well, he could, you know, so it's, it's, it's sort of that type of talk, right, from Eric? He gets like right to the-

• 30:38David Hoffman?

  It's pretty militant.

• 30:39Ryan Sean Adams?

  He, he goes almost like militant towards it, but what I love about Eric is it's no apologies.

• 30:44David Hoffman?

  Yeah.

• 30:45Ryan Sean Adams?

  Like, what do we have to apologize for?

• 30:46David Hoffman?

  Unapologetic, yeah.

• 30:47Ryan Sean Adams?

  One of his comments there was, "They should be giving Hayden Adams a Nobel Prize."

• 30:52David Hoffman?

  Yeah. For creating orderly markets. Doing the SEC's job.

• 30:56Ryan Sean Adams?

  Yes, and what are we doing?

• 30:58David Hoffman?

  Suing people.

• 30:59Ryan Sean Adams?

  Suing-

• 31:00David Hoffman?

  Suing, oh, oh.

• 31:01Ryan Sean Adams?

  Getting DeFi out of here, suing, suing Matcha, suing ZeroX, that's what we're doing. I do think though, David, I mentioned the, like, my favorite, one of my favorite, your panels were great too. I didn't agree on your panels.

• 31:11David Hoffman?

  But your one panel was-

• 31:12Ryan Sean Adams?

  This panel was great, okay? And the reason it was great is because Hester Purst was there. You gonna hear what she says, David?

• 31:18David Hoffman?

  Yeah.

• 31:19Speaker 04

  If Chair Gensler did wake up tomorrow morning and say, "You know what? I want to take a new, I want to chart a new course." What would that new course look like? What kind of solutions would you recommend for us? Where are the problems that you're seeing? Having that kind of stuff ready to go? If we can really work on developing those kinds of solutions now, and I know Congress is working certainly on that, I know that there's a lot of industry work being done on that, but having those concrete solutions ready to go when Chair Gensler does wake up on the other side of the bed and say, "I'm going to do things differently," then if we're doing that, I think we're in a good place. If we're just going to be in this

• 31:59Speaker 04

  bad place we are that we're in now, and then when that change happens, there's nothing there to put in its place, then we're in a really bad place because it takes a long time to get these changes worked through. So we need to be really ready to go when the opportunity strikes.

• 32:16David Hoffman?

  I do appreciate how she just assumes that inevitability of time, Gary Gensler will come to the light.

• 32:21Ryan Sean Adams?

  Yeah.

• 32:22David Hoffman?

  One will be forced or be enlightened, probably forced.

• 32:25Ryan Sean Adams?

  Yeah, I actually think there might be some replacement going on, and I for one would be happy to nominate Hester Purce, her chair of SEC. I think she'd do a fantastic job. You have a tweet here. Do you want to?

• 32:37David Hoffman?

  Yeah, while I was watching your one panel, I tweeted out, "A mountain of respect for Hester Purce, who eagerly shares opinions in public forums while her role at the SEC constrains what she can say. She can't talk directly about the SEC versus Ripple or Grayscale cases, or speak on behalf of the SEC directly, but she gets on stage and speaks her mind anyways. She engages with us. She comes permissionless. She chats with you." Could you imagine? She chats with you, Ryan.

• 33:03Ryan Sean Adams?

  No, I think it's fantastic, and Tom Emmer was there. They've got some legislation. There's some stuff going. I do think it's an inevitability that the US rights the ship. I just, I hope it doesn't take, you know, years. So meanwhile, while all this is going on, institutions continue to adopt. I think they're pretty excited about the spot Bitcoin ETF. It's going to happen. It's going to happen. So what are we looking at here?

• 33:25David Hoffman?

  Well, it just so happens that another trad institution with $1.5 trillion in wealth filed for another spot Bitcoin ETF this week, Franklin Templeton, which is perhaps the most boomer name I can think of for a financial institution.

• 33:38Ryan Sean Adams?

  Franklin Templeton?

• 33:39David Hoffman?

  I, no, it just sounds very...

• 33:41Ryan Sean Adams?

  It doesn't even sound real.

• 33:42David Hoffman?

  It sounds extremely trad. They have 1.4 trillion dollars in assets under management. So that's kind of, yeah.

• 33:50Ryan Sean Adams?

  I feel like I should have heard.

• 33:51David Hoffman?

  Yeah, I feel like I should know them, yeah. They have filed for the spot Bitcoin ETF. So there's another big trad institution pushing for this as well. The interesting thing about this one is that Kraken is actually the oracle. So for the prices.

• 34:03Ryan Sean Adams?

  Yeah.

• 34:04David Hoffman?

  For the spot Bitcoin ETF. So, cool, congrats to Kraken on that one.

• 34:06Ryan Sean Adams?

  And oracle in this context, what do we mean by that?

• 34:09David Hoffman?

  So the spot and the ETF, all ETFs need an oracle. It's actually not Kraken specifically. It's CF Benchmarks, which is wholly owned by Kraken. So Kraken subsidiary is doing the spot Bitcoin pricing. And so you remember when one of the, I can't remember which, but some of the, one of the Bitcoin ETF spots like updated their filing to include surveillance sharing. And then all the other ones.

• 34:32Ryan Sean Adams?

  Yeah.

• 34:32David Hoffman?

  Also like, oh, we have to also include that.

• 34:34Ryan Sean Adams?

  Yeah.

• 34:34David Hoffman?

  So this spot Bitcoin ETF, the new thing about this one is they're using CF Benchmarks, Kraken subsidiary, to provide the surveillance sharing. And they are the one thing doing the thing that is the final nail in the coffin about why the SEC is claiming that it is not approving a Bitcoin ETF.

• 34:51Ryan Sean Adams?

  Yeah.

• 34:51David Hoffman?

  Now we are doing, we are doing that thing. And that's the thing that CF Benchmarks is doing. I just learned about this just now.

• 34:56Ryan Sean Adams?

  We are closing in on this.

• 34:57David Hoffman?

  There's nothing left.

• 34:58Ryan Sean Adams?

  Running out of excuses.

• 34:59David Hoffman?

  You have to approve it.

• 35:00Ryan Sean Adams?

  If you want to get a bit more optimistic on the regulatory landscape in the US, you got to watch the panel. We'll include a link in the show notes to the permissionless panel that we were referencing. Also, David, this was some news this week, okay? This is FTX, the ghost of FTX. It's still here. They're going bankrupt, of course, and they got a lot of crypto. They don't like crypto that they have to sell.

• 35:22David Hoffman?

  That's a lot of crypto.

• 35:22Ryan Sean Adams?

  In order to give back to their creditors. So the question in my mind, and I think in crypto's mind, is who is going to take the hit from all of this? All right? I mean, what do their bags look like? It's reported, David, that they have 3.4 billion in crypto assets.

• 35:38David Hoffman?

  At current prices.

• 35:39Ryan Sean Adams?

  At current prices. And they are allowed by the courts to sell up to 100 million worth of tokens per week.

• 35:46David Hoffman?

  And that can be increased up to 200 million. Oh, man. That's a lot of sell pressure, my friend. Sell pressure, yeah. Okay. So which assets are under question, of course, the big question to have? The biggest asset that they have to sell is going to be Solana at 1.16 billion dollars. Biggest by a lot. Now, a lot of this Solana is locked, and I think locked for a very long amount of time. What do you mean by locked, so they can't sell it? Vested, yeah. So the FTX was an investor in Solana, of course, the Solana-FTX relationship was ripe in 2021, 2022. Now that FTX is gone, Solana is clear from that, but they still have a lot of vested Sol. I think the last of it unlocks in like 2027 or 2029, so it's over a very long period of time. You know what, though? I still totally think you can sell that OTC.

• 36:31David Hoffman?

  Someone buy the, like... Oh, you're right. Yeah, the vesting. You're right. So if there was an OTC buyer, they could buy the locked Solana, but that wouldn't... That wouldn't be sell pressure. It wouldn't be sell pressure. You're right, right, right. But still, like over, there is, it's a very significant amount of Solana, like a very... Is that like 10% of market cap, something close to that? 1.16 billion dollars of Solana is going to be, let's go, let me go look at the Solana market cap. The Solana market cap is 7.4 billion dollars of market cap. Fully diluted. 10 billion dollars. So yeah, that's about, that's about 10% of this all market cap of sell pressure over the next five-plus years. It's a long time, it's a lot of Sol. Yeah. It's a pretty big over. Yeah. What else we got?

• 37:14David Hoffman?

  After that is going to be Bitcoin. So Bitcoin coming in at number two at 560 million dollars. That is fully liquid, of course. And then Ether is number three at 192 million dollars. I feel like that's a decent amount for Bitcoin, but like the Bitcoin and Ether amounts, I feel like Bitcoin and Ether can kind of eat that. Yes, yeah. I mean, Sam always, like there was a general resistance and resentment between the Ethereum community and Sam. And so as a result of that, like there was just less Ether proportionally. than than other asset.

• 37:43Ryan Sean Adams?

  Oh, cool.

• 37:43David Hoffman?

  Right. So like there's a hundred, there's $192 million of Ether, a very liquid asset. There's $137 million of Aptos, a very illiquid asset.

• 37:52Ryan Sean Adams?

  That's gonna hurt.

• 37:52David Hoffman?

  I don't know how, that's probably also locked up, uh, but it's again, that's a massive overhang for Aptos. Um, Tether, uh, XRP, uh, there's some other ones as well.

• 38:01Ryan Sean Adams?

  Yeah, this is gonna be some, uh, sell pressure.

• 38:03David Hoffman?

  Yeah, that's, that's some overhang.

• 38:04Ryan Sean Adams?

  Do you think this is gonna affect prices? Or do you think it's more specifically these particular assets?

• 38:10David Hoffman?

  The reason why there's four-year cycles is because of reflexivity. Like, once people realize the game is on, then the game is on. And I think the sell pressure of this will be a meme that resurges its head over and over and over again. And it may be weeks we'll have downward sell pressure as like, kind of like the, the, um, the Mt. Gox thing. It's like every once in a while people, "Oh, Mt. Gox is gonna sell." And then it never actually happens. It's probably gonna be something like that.

• 38:33Ryan Sean Adams?

  Yeah. Uh, all right, David, what do we have coming up next?

• 38:36David Hoffman?

  Coming up next, Scroll's mainnet is announced for when? Well, we know, we'll, we'll tell you, but not now. Vitalik's X account is hacked as a result of the SIM swap attack and a bunch of other stuff as well. We're gonna get through all the news and more, but first a moment from these fantastic sponsors that make this show possible. Especially MetaMask Portfolio, also here on the floor at Permissionless. Uh, we're gonna talk about MetaMask's snaps coming up. Uh, so thank you for MetaMask for sponsoring this message. Let's go hear from them right now. Are you a MetaMask user? Well, you're listening to Bankless, so of course you are. The wallet you know and love just got a whole lot better. MetaMask Portfolio is the ultimate one-stop shop for all of your crypto needs. It gives you a holistic view of your crypto portfolio across multiple chains and multiple addresses all at once.

• 39:16David Hoffman?

  You can easily view and manage all your coins, tokens, and NFTs in one convenient place just by connecting your wallet. MetaMask Portfolio goes beyond just viewing your portfolio, though. Inside the portfolio, you can do all the incredible money verbs that make DeFi so powerful. You can buy, swap, bridge, and stake your crypto assets with ease. It's like having a powerful battle station for all your DeFi moves right at your fingertips. So if you're looking to do more in Web3 your way, MetaMask Portfolio is the answer. I already know that you have MetaMask wallet, so go check out your MetaMask portfolio. Learn more at metamask.io slash portfolio.

• 39:50David Hoffman?

  You know Uniswap, it's the world's largest decentralized exchange with over 1.4 trillion dollars in trading volume. You know this because we talk about it endlessly on Bankless. It's Uniswap, but Uniswap is becoming so much more. Uniswap Labs just released the Uniswap Mobile Wallet for iOS, the newest, easiest way to trade tokens on the go. With the Uniswap Wallet, you can easily create or import a new wallet, buy crypto on any available exchange with your debit card with extremely low fiat on-ramp fees, and you can seamlessly swap on mainnet, Polygon, Arbitrum, and Optimism. On the Uniswap Mobile Wallet, you can store and display your beautiful NFTs, and you can also explore Web3 with the in-app search features, market leaderboards, and price charts, or use Wallet Connect to connect to any Web3 application. So you can now go directly to DeFi with the Uniswap Mobile Wallet.

• 40:35David Hoffman?

  Safe, simple custody from the most trusted team in DeFi. Download the Uniswap Wallet today on iOS. There's a link in the show notes.

• 40:42Ryan Sean Adams?

  David, this caught our attention this week. This is from Mike Neuter, who is an EF researcher, and he published-

• 40:47David Hoffman?

  Also my rock climbing buddy.

• 40:48Ryan Sean Adams?

  Oh yeah? You guys climb rocks together?

• 40:49David Hoffman?

  Yeah, he's in Williamsburg with me.

• 40:50Ryan Sean Adams?

  What do you climb?

• 40:51David Hoffman?

  Bouldering, right? Bouldering, yeah. He called himself a pebble wrestler, which is a nickname for boulderer, and I thought that was just absolutely hilarious.

• 40:57Ryan Sean Adams?

  Okay, so this pebble wrestler is proposing a two-tiered staking proposal, presenting a hypothetical native liquid staking token design. If that doesn't mean anything to you, it's basically like, rather than having an LSTs and leaving that up to like this quote-unquote "private market," Lidos, the Rocket Pools, anybody else, you know, the Swells, anybody else who does it, making that part of the protocol, enshrining liquid staking token as part of the protocol. Now, I don't think either of us have gone into the design of this, and we'd probably have to do an entire episode with your pebble climber. Wait, was it-

• 41:33David Hoffman?

  Pebble wrestler.

• 41:34Ryan Sean Adams?

  Pebbler wrestler, in order to find out what this is.

• 41:36David Hoffman?

  I hope he's gonna be okay with this.

• 41:37Ryan Sean Adams?

  But I think it's interesting. I think that is interesting. It's like a countermeasure, it's a possible countermeasure move where like, the public state-

• 41:46Ryan Sean Adams?

  I'm gonna use government analogies here for a second.

• 41:48David Hoffman?

  Please do.

• 41:48Ryan Sean Adams?

  Just hang with me.

• 41:49David Hoffman?

  Fire away.

• 41:49Ryan Sean Adams?

  It's like a, the public nation state is saying, oh, this is a monopoly.

• 41:55David Hoffman?

  Yep.

• 41:55Ryan Sean Adams?

  This is threatening the public good of what we're creating of our citizens. And so we're going to grab this private asset and make it a state-run asset.

• 42:05David Hoffman?

  Mm-hmm.

• 42:05Ryan Sean Adams?

  Okay? And it won't, they're not quite grabbing the asset. So they're not like taking LST. They're just providing an outlet. They're like, rather than private, we'll have a public type. Maybe it's like public healthcare, I guess, and that, that whole debate.

• 42:17David Hoffman?

  Single payer healthcare?

• 42:18Ryan Sean Adams?

  Yeah.

• 42:18David Hoffman?

  Yeah.

• 42:19Ryan Sean Adams?

  People are gonna get massively triggered by all of this with what I just said. But I feel like it's a, it's a helpful analog.

• 42:24David Hoffman?

  I think that's right. And this is actually very like fitting with what the role, I see the role of the AEF is. And I've heard this articulated elsewhere. It's an anti-trust force for Ethereum.

• 42:33Ryan Sean Adams?

  Yes, anti-trust force.

• 42:35David Hoffman?

  Where a monopoly emerges that impacts the protocol. Like, I would call it, consider Uniswap a monopoly in liquidity. Cause it's like dominates 80 to 90% of liquidity and swaps in Ethereum. Does that impact the protocol? No. Is Lido a growing monopoly and might it impact the protocol? Yes. Or any other LST that might grow to have more than 33% share.

• 42:55Ryan Sean Adams?

  Yeah.

• 42:55David Hoffman?

  And so what Mike is, is doing here, and they are proposing like, hey, here is an LST system that we can enshrine as a credibly neutral force in the protocol itself, where there's no token, there's no profit motives, there's no anything. Uh, and it is like state-run infrastructure to ensure the credible neutrality of Ethereum. Um, I would say that the Pepsi, P-E-P-C, from Barnaby, Protocol Enforced Proposer Commitments, is of a similar vibe to Eigenlayer.

• 43:22Ryan Sean Adams?

  Yep.

• 43:23David Hoffman?

  Uh, so if Eigenlayer kind of grows so incredibly large that it needs a check by the protocol, we have Pepsi ready to go. Uh, it's not ready to go, but is in development. And so this is of a similar vein.

• 43:33Ryan Sean Adams?

  I, I, again, I just skimmed the details, but this has some economic ramifications that I'm not, I am entirely comfortable in.

• 43:40David Hoffman?

  Yeah, we're gonna have to talk to Mike about this.

• 43:42Ryan Sean Adams?

  So I don't really know if I, I support this proposal or not, but I'm in kind of finding out more mode, and I think it's interesting nonetheless. All right, while we're on the infrastructure track, let's talk a little bit about MetaMask. I feel like this is actually a pretty big upgrade in infrastructure. For MetaMask. This week, they launched MetaMask snaps.

• 43:59David Hoffman?

  Yeah.

• 44:00Ryan Sean Adams?

  In open beta.

• 44:00David Hoffman?

  It's been brewing for a while.

• 44:02Ryan Sean Adams?

  My simplest explanation of this is if you think of a wallet as a browser. So think of like the analog to the internet, you know, you had early kind of Netscape, Internet Explorer. And now you're probably like using Chrome or Brave or something like that. Okay. So a wallet is kind of like an Internet Explorer for crypto, or it's kind of like a browser for crypto. And you know, the ability that browsers have had, I feel like Chrome really pioneered this with different extensions. So you go to kind of the Chrome Extension Store. You download your favorite extensions. So ironically, MetaMask is actually an extension on top of your Chrome browser. And now it's.

• 44:36David Hoffman?

  Is that ironic?

• 44:37Ryan Sean Adams?

  I don't know. It's fun.

• 44:38David Hoffman?

  It's something.

• 44:39Ryan Sean Adams?

  Fact. Yeah. What's the definition of irony? Anyway, didn't Alan?

• 44:43David Hoffman?

  Let's stop this podcast and consider this.

• 44:46Ryan Sean Adams?

  We'll do an entire episode on it. Put it in the backlog. Okay, so what they're doing is basically giving the ability to launch extensions onto MetaMask. That's what a snap is.

• 44:54David Hoffman?

  Our MetaMask snaps is extensions for your MetaMask, not just extensions, because it can also, you can kind of change the default about MetaMask, the way that it looks.

• 45:03Ryan Sean Adams?

  Yeah.

• 45:03David Hoffman?

  So it can, it can be an extension. It can do anything. MetaMask snaps can do anything. There are already developers that have been building MetaMask snaps under the hood for a while. So there are some snaps ready to go. And so this is just kind of going to, this is going to be probably the biggest upgrade to MetaMask. Sense inception, I think.

• 45:21Ryan Sean Adams?

  It makes it like permissionless. Anybody can deploy an extension.

• 45:25David Hoffman?

  Open source, open source MetaMask, open source snaps.

• 45:27Ryan Sean Adams?

  So all of those things, you're like, uh, MetaMask, when are you going to implement this feature? And I don't know how many times.

• 45:32David Hoffman?

  Build a snap for it. Build a snap.

• 45:33Ryan Sean Adams?

  Somebody can build a snap for it. So there's a library. I plan to spend some time discovering different snaps, seeing what's useful. And, you know, maybe we'll do an article on this and bake this newsletter.

• 45:43David Hoffman?

  Snaps.

• 45:43Ryan Sean Adams?

  David, David, Vitalik was hacked.

• 45:46David Hoffman?

  Oh, no.

• 45:46Ryan Sean Adams?

  Last week. You were, you're not worried about this?

• 45:49David Hoffman?

  I just know about it.

• 45:50Ryan Sean Adams?

  Okay. Not a surprise for David here. Okay, so what happened though?

• 45:54David Hoffman?

  Uh, okay, so surprise, you can turn off SMS two-factor authentication on Twitter, on X, but you can still use it to recover a password. So there's two things that you need to turn off in order to cover your traces on Twitter. I actually did not know this, and now I do know this, so I turned it off for me. But this is how Vitalik got sim swapped, and that's how they got access to his Twitter. I think $691,000 and a couple CryptoPunks from some OGs got drained. One thing I definitely learned from this is OGs fell for this. And when I read this tweet, I immediately recognized it as like this is a compromised tweet. It was interesting that

• 46:38David Hoffman?

  some OGs fell for it and other people like didn't. I'm realizing that getting phished depends on the context that you're in. So like OG, why are OGs getting phished? Because maybe they're just not on Twitter that often. It's a Twitter skill, not a Web3 skill.

• 46:53Ryan Sean Adams?

  Yeah, so let's talk about the mechanics of what happened. Out of nowhere, it looked like Vitalik's Twitter account published this tweet. It's basically, "To celebrate proto-dank sharding." That's very precise, yeah. Vitalik might say that. No, he would never say that. But anyway, coming to Ethereum consensus is, and then it goes on, "You can mint an NFT."

• 47:11David Hoffman?

  There's a call to action to mint an NFT.

• 47:12Ryan Sean Adams?

  Exactly. And so this was actually some fisher that had taken over Vitalik's account. And if you go to try to mint this NFT, there's some code in there, malicious code, that will actually drain your wallet and steal all of your funds. And so what David was saying is, some OGs, like some crypto-native people actually fell for this because, oh, it's Vitalik's official account.

• 47:33David Hoffman?

  This is such a sad fun fact. This is a sad fact. The first ever CryptoPunk that was minted got drained.

• 47:40Ryan Sean Adams?

  Oh my god.

• 47:41David Hoffman?

  CryptoPunk number one.

• 47:42Ryan Sean Adams?

  Yeah. If it's a sad fun fact, then I don't think it's fun. I think it's just a sad fact. So that's what happened. And how did it happen? As you're saying, he was sim-swapped, which means somehow his carrier, I think it was like T-Mobile or something like this, probably did some, so someone... Some hacker called them up and convinced them somehow to port his phone, or the other phone, and because in Twitter, actually, if you sign up for Twitter Blue, they ask for your phone number.

• 48:10David Hoffman?

  Yeah.

• 48:11Ryan Sean Adams?

  Okay, so I'm sure Vitalik went through that process,

• 48:13David Hoffman?

  Yep.

• 48:13Ryan Sean Adams?

  gave the phone number, and then if somebody SIM swaps your account and triggers password account recovery, account recovery,

• 48:21David Hoffman?

  Yeah.

• 48:21Ryan Sean Adams?

  then it sends it to the new phone number, and that's how this all happened.

• 48:25David Hoffman?

  Yeah.

• 48:25Ryan Sean Adams?

  So, what are the lessons here?

• 48:28David Hoffman?

  So, he actually, Vitalik went to Farcaster to talk about this. I'm assuming he's regained access to his Twitter. But the main, like, kind of mic drop moment was that, well, Farcaster, you can't be SIM swapped because there's no phone for Farcaster. It is your ENS name, it is your Ethereum address. So, Farcaster accounts have assurances here about how and who can access those things, which I find

• 48:50Ryan Sean Adams?

  Because it's

• 48:51David Hoffman?

  secure.

• 48:51Ryan Sean Adams?

  It's secured by private key.

• 48:53David Hoffman?

  It's secured by private key.

• 48:53Ryan Sean Adams?

  That's the big difference here, so that's a takeaway. I guess another message is watch out for SIM swaps.

• 48:58David Hoffman?

  Yeah.

• 48:59Ryan Sean Adams?

  I mean, you can have your mobile company add a PIN number. Let me just say, that does not necessarily protect you.

• 49:04David Hoffman?

  The social engineering, like, honestly, this is pretty goddamn damning of phone companies. We should be pretty upset as an industry, is all of these phone companies that aren't taking this problem seriously, and likely, one of the culprits are probably coming from inside the house.

• 49:18Ryan Sean Adams?

  Yeah.

• 49:18David Hoffman?

  Like, it's either social engineering externally, or somebody in T-Mobile, an employee or access to T-Mobile databases and servers who can have the ability to do this. So, T-Mobile, yo, look at your shit.

• 49:30Ryan Sean Adams?

  Yeah, well, you know, I don't know if they listen to Bankless, but

• 49:33David Hoffman?

  Somebody at who works at T-Mobile listens to Bankless. Odds are.

• 49:37Ryan Sean Adams?

  What can people do, though? All right, so, one thing you can do is try to call them, add the PIN number to your account. That's kind of going to be a dead end. Some people use Google 5,

• 49:46David Hoffman?

  Yeah.

• 49:46Ryan Sean Adams?

  at least in the US, and this has no vector for attack in this way, right? So, it's all kind of Google Advanced Protection, and you can really lock it down. There's no way to social engineer it. That's another mechanism for that. That's how to prevent SIM swap.

• 49:58David Hoffman?

  Yeah.

• 49:58Ryan Sean Adams?

  What you really need to do, what you really need to make sure of is, none of your key accounts, like Twitter or Gmail,

• 50:04David Hoffman?

  Correct.

• 50:05Ryan Sean Adams?

  have a phone number activated account recovery.

• 50:07David Hoffman?

  Yeah.

• 50:08Ryan Sean Adams?

  Okay? So, that means

• 50:09David Hoffman?

  Just remove your phone number from your Web2 life.

• 50:11Ryan Sean Adams?

  Yeah, because that means if you do get SIM swapped, no one can actually get inside of your accounts. So, it's, you know, at worst, you know, two-day inconvenience kind of thing, where you get your account restored. So, that's the learning lesson there in how we can protect ourselves. David? Espresso partnering with Offchain Labs. Okay, what's going on here?

• 50:30David Hoffman?

  Yeah, Offchain Labs, aka Arbitrum, and Espresso, a decentralized sequencer. They have partnered up so that they can get some decentralized sequencing into the world of Arbitrum. This improves transaction ordering to bring a shared sequencing option to Arbitrum tech chains. You can fight front-running and harmful forms of MEV, so this is just MEV fairness coming to the world of Arbitrum. And this also is actually part of Arbitrum's strategy, their like, superchain strategy, if you will. They actually don't have a superchain strategy. They want to work with decentralized sequencers so that the aggregate of all chains can be sequenced together. So it's rather than having a superchain strategy like Optimism, it's just like, whoever has a chain.

• 51:11David Hoffman?

  And so it's more, it's like, the space between all of those superchains, whoever signs up for Espresso is part of the Arbitrum system, which is also more, more open. I think that's how that's working.

• 51:21Ryan Sean Adams?

  I feel like we have to do some episodes on this, too.

• 51:23David Hoffman?

  Yeah, I probably butchered that.

• 51:24Ryan Sean Adams?

  My, my rough understanding of how this works is Arbitrum is the only sequencer right now

• 51:29David Hoffman?

  Yes.

• 51:29Ryan Sean Adams?

  for Arbitrum chains.

• 51:30David Hoffman?

  Yes.

• 51:30Ryan Sean Adams?

  Now Espresso is also a sequencer.

• 51:33David Hoffman?

  Yes.

• 51:33Ryan Sean Adams?

  And any chain that Espresso

• 51:35David Hoffman?

  Yes.

• 51:36Ryan Sean Adams?

  also services as a sequencer on. Let's say they're on Arbitrum 1 and they're on all of the other Arbitrum chains as well. And let's say they're also a sequencer on the Optimism network, right? That improves the interoperability between Optimism.

• 51:49David Hoffman?

  Cost chain execution through shared sequencing.

• 51:52Ryan Sean Adams?

  Right, and that's very bullish.

• 51:53David Hoffman?

  It's very bullish.

• 51:53Ryan Sean Adams?

  That is the reason why an Arbitrum might want to adopt someone like Espresso, right?

• 51:58David Hoffman?

  There's definitely some like, network, some power law network effects to shared sequencing.

• 52:01Ryan Sean Adams?

  Absolutely. David, some nouns news this week. I'm not going to go through the whole thread, but 40% of nouns are quitting the DAO and claiming a refund. There's some nouns drama.

• 52:11David Hoffman?

  Yeah, Nounfork, Nounfork.

• 52:12Ryan Sean Adams?

  Okay, so what's going on here?

• 52:14David Hoffman?

  I think the way that this works is nouns at some point in time are going for over 100 Ether per noun. And that was, one noun is sold every single day, so 100 Ether into the nouns treasury. Nouns are now being sold for lower prices, like 20 to 30 Ether a day, last I checked. Which means that a lot of nouns are like underwater. But nouns, one noun is one vote. There's a treasury of Ether. And so I would assume that there is a desire for some nouns to get their ether back.

• 52:40Ryan Sean Adams?

  Yeah.

• 52:40David Hoffman?

  And so 40% of nouns have done that.

• 52:44Ryan Sean Adams?

  It's basically like the rage quit option, right?

• 52:46David Hoffman?

  Yes.

• 52:46Ryan Sean Adams?

  You give your noun back and you take your share, your public share of the ether.

• 52:50David Hoffman?

  Yep. And so this is people just being disgruntled about the way that the nouns treasury is being handled. They just don't agree with the way the capital is being allocated and so they are saying peace. We're out.

• 53:01Ryan Sean Adams?

  You know, I've, I talked to some, this is kind of a noun skeptic type thread. It's basically like, hey, decentralized treasuries don't work, DAOs don't work, that sort of thing. And, you know, I think there are some flaws with DAO managed token vote treasuries.

• 53:14David Hoffman?

  Sure.

• 53:14Ryan Sean Adams?

  But I also talked to a noun bull, William Pisser.

• 53:17David Hoffman?

  Yeah.

• 53:17Ryan Sean Adams?

  He was actually like, hey, no, this is right. This is like the cleansing process we need.

• 53:20David Hoffman?

  Yep.

• 53:21Ryan Sean Adams?

  And now we just have the true believers left. And now this arb opportunity has been swallowed by the market. We have a smaller treasury, but that treasury is full of token votes by a rabid group of fans. So this is the natural kind of cleansing process and, you know, nouns will be reborn.

• 53:37David Hoffman?

  Well, also there's the potential here. So like early nouns buyers, like for example, the first noun ever got sold for 613 ether, 1.9 million dollars. And like for a long time nouns were being sold for hundreds of ether. And so even if you are an early noun holder and you are down in ether, a new noun buyer who's, you know, buying a noun for 20 ether is buying 30 or 40 or 50 ethers worth of treasury with their 20 ether purchase.

• 54:01Ryan Sean Adams?

  Right.

• 54:02David Hoffman?

  So it's actually rational for the early buyers to like get their ether.

• 54:06Ryan Sean Adams?

  Yep.

• 54:07David Hoffman?

  And then rebuy cheaper nouns.

• 54:08Ryan Sean Adams?

  Yeah.

• 54:09David Hoffman?

  Because newer buyers are buying free ether, basically. And there's like, I don't like that arb op, I would like to rebalance my portfolio. And so I'm sure some nouners, some nouners are going to quit. Some nouners are going to rebuy at a lower price. And then there's going to be more equality across the DAO.

• 54:23Ryan Sean Adams?

  Yeah. So is it broken or is it working? Is it performing?

• 54:26David Hoffman?

  I think this is an example of an efficient market playing out. So I would say this is, would be rational, it's rational expected.

• 54:32Ryan Sean Adams?

  I sort of think so too. David, we're just going to breeze by this story, but the headline is crazy. So there's a cryptocurrency exchange founder in Turkey and he was just jailed for 11,196 years.

• 54:45David Hoffman?

  Yeah, that's a lot of years, Ryan.

• 54:47Ryan Sean Adams?

  That's a lot of jail times. Can you imagine if SBF was in Turkey? What would happen?

• 54:53David Hoffman?

  Uh, oh, he would get a high score for sure.

• 54:55Ryan Sean Adams?

  That would be like-

• 54:56David Hoffman?

  Hundreds of thousands of years.

• 54:59Ryan Sean Adams?

  Wow, Turkey does not mess around. This was for fraud. Actually-

• 55:02David Hoffman?

  I love this fact. So why is he being sentenced for embezzling? For like stealing users' funds? I love this fact. He's sentenced to 11,196 years and a $5 million fine.

• 55:11Ryan Sean Adams?

  Wow.

• 55:12David Hoffman?

  He stole-

• 55:12Ryan Sean Adams?

  One of those is not like-

• 55:13David Hoffman?

  Millions of dollars.

• 55:15Ryan Sean Adams?

  Okay, so apparently this guy, he really is like that SBF of Turkey. It sounds like. I don't know much about this story, but he's got the hubris of an SBF. He said this to the court. "I am smart enough to lead any institution on earth."

• 55:28David Hoffman?

  Yo!

• 55:29Ryan Sean Adams?

  "That is evident in this company I established at the age of 22."

• 55:32David Hoffman?

  Wow.

• 55:33Ryan Sean Adams?

  "I have not acted amateurishly."

• 55:35David Hoffman?

  Wow. I think he should just go to jail and do the whole like sardines and cigarettes Ponzi in there.

• 55:40Ryan Sean Adams?

  Oh my god.

• 55:41David Hoffman?

  He can have his jail institution.

• 55:43Ryan Sean Adams?

  SBF of Turkey. It's a long jail sentence, though. All right, catch this. The FBI is investigating the whole Barry Silbert versus Winklevoss type of allegations? What's going on here?

• 55:54David Hoffman?

  Yeah, so as a part of an ongoing review of DCG and Genesis Global Capital, Genesis, the FBI agents, SEC staff, and New York City prosecutors sat down with Cameron Winklevoss to discuss his allegations of fraud that he levied against Barry Silbert.

• 56:09Ryan Sean Adams?

  Huh.

• 56:09David Hoffman?

  So like, everyone is innocent until proven guilty, but some very big players are taking a look at what's going on here.

• 56:15Ryan Sean Adams?

  David, this is getting kind of serious, I think.

• 56:16David Hoffman?

  That's pretty serious. I don't, well, I would not want to be in that position.

• 56:19Ryan Sean Adams?

  Uh, Mountain Protocol has just launched, David. We're doing an entire episode on Mountain Protocol. What's the TLDR of this thing?

• 56:25David Hoffman?

  Mountain Protocol on-chain T-bills. Part of the real-world assets coming to be tokenized on-chain. Mountain Protocol is one of them. Uh, USDM. So instead of USDC, which has no native yield to it, USDM is a tokenized T-bill. So it's trying to be a currency inside of DeFi, uh, but instead with the native yield of the treasury market. So makes sense.

• 56:48Ryan Sean Adams?

  David, this is a product I'd actually love.

• 56:49David Hoffman?

  I bet you would.

• 56:50Ryan Sean Adams?

  If we can get it through the regulatory gauntlet- You know, it's like, it's like USDC, except USDC plus 5% yield.

• 56:57David Hoffman?

  Well, it is launched.

• 56:58Ryan Sean Adams?

  Sounds good to me.

• 56:58David Hoffman?

  So it got through the regulatory gauntlet.

• 57:00Ryan Sean Adams?

  That's true. So far.

• 57:02David Hoffman?

  So far.

• 57:02Ryan Sean Adams?

  It just, it feels like it's taking kind of a tether type approach of like offshore type of approach. Anyway, listeners, you guys can listen to the podcast and let us know what you think about it. Um, another big launch this week was the Bankless Team.

• 57:13David Hoffman?

  Oh, that's us.

• 57:14Ryan Sean Adams?

  We told you guys about it last week, but we have now officially launched a bankless claimable.

• 57:18David Hoffman?

  Claimables. I like that. What's a claimable, Ryan?

• 57:20Ryan Sean Adams?

  Uh, well, it's a thing that you can claim on chain.

• 57:24David Hoffman?

  That's been the name.

• 57:25Ryan Sean Adams?

  It's usually has a, um, a valuable property associated with it. So it could be an airdrop.

• 57:30David Hoffman?

  Yep.

• 57:31Ryan Sean Adams?

  It could be, uh, something you're eligible for because you hold a specific NFT.

• 57:35David Hoffman?

  Or an NFC itself.

• 57:36Ryan Sean Adams?

  You, here's the point is you really don't know what you're eligible for. It could be anything. And all you have to do is type your ETH address into this website. Double check the URL. Make sure you're on the bankless site and not on some Fisher's site.

• 57:49David Hoffman?

  The reason why we know that this is valuable is because we, we have a bankless product now. We have a thing that you can connect your Metamask to or airdrop hunter, et cetera. Uh, your, your wallet. Uh, there are a hundred thousand claimables that the Bankless Nation is able to claim.

• 58:02Ryan Sean Adams?

  Yeah.

• 58:03David Hoffman?

  We know this for a fact. We verified it. Uh, that is, and they are worth collectively $350,000 of claimables. That is not including the millions of dollars of Arbitrum and Connect Airdrops as well. Uh, there's a lot of money that Bankless citizens, I don't know how many times, I'm getting, I'm going to be so annoying. Y'all have money. Go get it using claimables.

• 58:22Ryan Sean Adams?

  Go claim your stuff, your free stuff, guys. Uh, so it's available for Bankless citizens right now. Super excited about that release. Also, our friends over at Blockworks who are helping to throw this conference with us. Well, they did most of the heavy lifting.

• 58:32David Hoffman?

  They did the back.

• 58:33Ryan Sean Adams?

  Yes. Blockworks Research is announcing Blockworks Analytics. I haven't checked out this product, but what is it, David?

• 58:39David Hoffman?

  Uh, they're saying this is a singular destination for real-time data-powered instincts. And so we, I think there are many products out there like this, like the block has a data platform. I know that Defiant has a data platform. Um, from what I'm seeing in this preview, I haven't been able to find the page. I don't know if it's like actually launch, launched yet. Um, we are rushing through this conference, so apologies. Um, the reason why I'm bullish about this particular analytics platform is that I think. Mike Ippolito specifically, we just recently had him on Bankless, but like the two founders, they really know what's up. So they know what is good data. I know in the preview, you can see like Layer 2 sequencing profits. Like that's data that I'm interested in.

• 59:16Ryan Sean Adams?

  Yeah.

• 59:16David Hoffman?

  So I think just the brains of Mike and the Blockworks team, plus an analytics platform, I think we could get some really valuable insight out of that. So I'm looking forward to getting my hands on that.

• 59:24Ryan Sean Adams?

  David, this was kind of a cool release coming out of the conference as well. Layer Zero and Google Cloud. What is up with this?

• 59:31David Hoffman?

  So I just, before doing this roll up run, I came down from a panel talking about this with Raz from Layer Zero and Rich from Google Cloud. So Layer Zero has smart contracts on every chain, like the Layer Zero smart contracts, which are also immutable, by the way. That's kind of cool. And so any single new chain, so like the Ethereum Layer 1, Optimism Mainnet, Base, pick another chain, Solana, Avalanche. And so any single chain has Layer Zero smart contracts. And then what these smart contracts do is with a, between the chains, you have an oracle provider passing messages between the Layer Zero smart contracts, and that's how these chains become interoperable. Google Cloud is one of these oracles. Now, oracle, if I say the word oracle, you might think like price oracle, because that's what like something like Chainlink does.

• 1:00:15David Hoffman?

  This is not that. We're using oracle in a different context. This is an oracle that's saying, hey, this chain's messaging box has this date. I'm going to pass that message to, I'm going to be at the oracle for the other chain, the destination chain. And so kind of like how you have MetaMask RPC nodes and you can, it defaults to Infira, or you can select that dropdown and you can pick a different one. This is like one of those. So kind of like how Google is the default search engine for your web browser. This is Google Cloud being a oracle for the Layer Zero cross-chain messaging network. I don't know if it's specifically default, but it is like a very strong first choice for people like me, who I'm not going to run a Layer Zero system or oracle.

• 1:00:57David Hoffman?

  I'm just going to pick Google because I pick Google for search engine. Fuck it, I'll pick them for.

• 1:01:02Ryan Sean Adams?

  You mean hypothetically, you, because you're not actually picking oracle, are you?

• 1:01:05David Hoffman?

  I mean, you have the option to. You have the option to. But you have Google out of the box to use.

• 1:01:10Ryan Sean Adams?

  I got it. Okay. I want to dip in sometime, you know, and evaluate kind of what Layer Zero is doing. And it's not just Layer Zero, there's a bunch of-

• 1:01:19David Hoffman?

  C C I P from Chainlink.

• 1:01:20Ryan Sean Adams?

  C C I P from Chainlink.

• 1:01:23David Hoffman?

  Not C C C P.

• 1:01:24Ryan Sean Adams?

  No, no, not that one. That's a different kind of work. And I want to evaluate kind of like the bridge type platform type play versus the superchain type play versus like Intense. All of these things.

• 1:01:36David Hoffman?

  Versus.

• 1:01:37Ryan Sean Adams?

  I mean, I think they solve a similar problem in some way, which is like getting assets from one place to another.

• 1:01:42David Hoffman?

  There's a there there, for sure.

• 1:01:43Ryan Sean Adams?

  Fragmented multi-chain ecosystem, and I don't know what the winners are going to look like, but we need to-

• 1:01:47David Hoffman?

  Or why the winners will be the winners is the big question.

• 1:01:50Ryan Sean Adams?

  Haven't decided yet. David, what do we got coming up next?

• 1:01:53David Hoffman?

  Coming up next, questions from the nation, takes of the week, and a meme of Ryan in real life because it's so damn meme-able. One of the questions, "How do you calculate the market cap of ETH when we keep burning it?" Interesting. We're going to get to all of this and more, but first I want to talk about these fantastic sponsors that make the show possible. "Are you planning to launch a token? Is your token already live? And are you granting your employees and contractors vesting token awards? And are you trying to figure out how to take care of taxable events for your team? Toku makes implementing a global token incentive award simple. With Toku, you will get unmatched legal and tax support to grant and administer your global team's tokens. Toku will help you navigate across the lifecycle of your token, from easy-to-use pre-launch token grant award templates to managing post-cliff taxable events with payroll.

• 1:02:36David Hoffman?

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• 1:03:21David Hoffman?

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• 1:04:02Ryan Sean Adams?

  The question from Derry: If market cap is unit price multiplied by the circulating supply, when we burn ETH, aren't we reducing the market cap in a sense? Or can we consider burnt ETH part of the market cap? What say you, David?

• 1:04:15David Hoffman?

  Uh, yes. Okay. When we burn ETH, it is gone. It is gone from the accounting. It is removed from the line item. So burnt ETH is no longer a part of the Ethereum market cap. We are literally reducing the circulating supply of Ether. So you're both market cap and fully diluted for those that count. And so, no, you do not consider burnt ETH as part of the market cap. You do consider burnt ETH as part of the market cap that was burnt. So no, as we burn more ETH, the market cap of Ether goes down, which is why it's actually bullish, because that means when you buy Ether, you're buying it at a better valuation the more that Ether is burnt.

• 1:04:51Ryan Sean Adams?

  Yeah, I think there's maybe also some confusion and distinction here. So the definition that the questioner gives of unit price times the circulating supply, right?

• 1:05:00David Hoffman?

  That's market cap.

• 1:05:01Ryan Sean Adams?

  That is one definition of market cap, but I like fully diluted market cap a little bit better for this type of eometric, right? So because I don't know, when you say circulating supply for ETH, what you actually mean. I think that that depends on different things. There are some projects where it's very clear what you mean.

• 1:05:15David Hoffman?

  Right.

• 1:05:15Ryan Sean Adams?

  So you've got a bunch of tokens that are vested or lost somewhere or something like that. They're not circulating at all. I'm not sure entirely what you might mean by circulating, but let's take a look at fully diluted. So that would be unit price.

• 1:05:28David Hoffman?

  Well, so for Ether, market cap and fully diluted valuation is one to one.

• 1:05:33Ryan Sean Adams?

  It should be the same.

• 1:05:34David Hoffman?

  And Bitcoin is also one to one, except for all of the lost coins out there. So Bitcoin also has a lower market cap than actually reported because something like 3% of Bitcoins is lost. So the real market cap of circulating supply of Bitcoins is actually 3% lower than reported because everyone who just reports the market cap of Bitcoin just includes.

• 1:05:51Ryan Sean Adams?

  There's a lot of ETH that's burnt. It's also gone as well. I don't know what.

• 1:05:55David Hoffman?

  But that is actually accounted for in the circulating supply.

• 1:05:58Ryan Sean Adams?

  Right, okay. All right, David, we haven't compiled any takes this week, but let me ask you, what are you bullish on?

• 1:06:03David Hoffman?

  I am bullish on Permissionless 3. Go figure. At Permissionless 2, already focused on Permissionless 3, that's October in Salt Lake City. I kind of already gave my tease for why I think it's going to be exciting. The reason why I think Permissionless is so cool is I'm very bullish on podcasters organizing conference content. It's just, it's the same skill set. I have been to my fair share of conferences out there, Ryan. I have seen when people who don't have that skill set organize talks and panels. And it's like, you know that one Family Guy meme of like the giraffe, platypus, elephant, animal?

• 1:06:37Ryan Sean Adams?

  Yeah.

• 1:06:37David Hoffman?

  That's how I feel at like the typical conference, like what the hell is this panel? Like who put this together? Who titled this? What moderator, this moderator is bad, boo. I'm so, I'm so mean.

• 1:06:47Ryan Sean Adams?

  Yeah, that's kind of mean, David.

• 1:06:49David Hoffman?

  It's pretty mean. I mean, so you, me, Mike, Jason, and the other, and many others at Blockworks, we organize every single bit of content here. The panels make sense.

• 1:06:58Ryan Sean Adams?

  I only organize the good ones, David. I don't, yeah.

• 1:07:02David Hoffman?

  The panels and panelists make sense. We do a good job, I think, organizing content. And the Blockworks team is just so polished with actual event planning. It's really, and so I think we are both coming together and realizing that we're not done yet with improving the conference experience. I think just another three-day conference of programming and talks is table stakes. And I want to do something net new in addition to that, because we've got that on lock. We figured that out, and I feel strong, we've done that twice in a row. Permissionless 3, I want to be more than a conference. A conference and something. Yes, and. I talked about that in the intro, but I think there's a lot of innovation, an arc of innovation to do in the crypto conference circuit. Because it's a very special time. It's the one time of year where the Bankless community gets to show up in real life.

• 1:07:47David Hoffman?

  We just had 100 people watching us at the very start. We're down to just a handful now. It's just, it's a time where your Twitter friends get to show up in real life. I was on a stage with Ethan Buckman from Cosmos, Anatoly from Solana, and Ben Jones from Optimism. And we all just like talked about, we hashed stuff out about our visions for the endgame. Like, that is, you don't get that anywhere else. That's such low-hanging fruit content. So I'm bullish on us like doubling down on really diving into what a crypto-native conference is and not just doing the same like template of conference in the future.

• 1:08:21Ryan Sean Adams?

  That's cool. Yeah.

• 1:08:23David Hoffman?

  What do you both?

• 1:08:24Ryan Sean Adams?

  So I am bullish on the vibes of this conference.

• 1:08:27David Hoffman?

  Vibes are good.

• 1:08:27Ryan Sean Adams?

  Right? You know, this is the one conference that I go to, obviously. So I couldn't tell you if it's the best conference or not, David.

• 1:08:33David Hoffman?

  It is.

• 1:08:33Ryan Sean Adams?

  I frankly have no idea, okay?

• 1:08:35David Hoffman?

  I mean, special place for DevCon, special place for ECC, but Permissionless is a league of its own.

• 1:08:40Ryan Sean Adams?

  Yeah, so like, but the vibes here for me were fantastic. The regulatory panel was bullish. I asked each of the panelists, you know, Tom Emmer, Hester Purst, like, are we gonna make it? Is the US gonna make it? The answer was, yes.

• 1:08:53David Hoffman?

  Hell yes.

• 1:08:54Ryan Sean Adams?

  Like, hell yes, like, because we're here and we're fighting. And they showed up to this conference. I mean, that speaks volume in the bear market. Meeting the community. Was so bullish. It just struck me how, yeah, this bear market is a bear market, but like it is 10x the last bear.

• 1:09:09David Hoffman?

  10x bear.

• 1:09:09Ryan Sean Adams?

  In terms of builders, in terms of interest, in terms of value creation. And so just, just hang on, guys. Right. I really made this full circle. The very beginning where we were talking about the markets, four year cycle. It is 2019 again. And this 2019 is 10x.

• 1:09:26David Hoffman?

  Yeah.

• 1:09:26Ryan Sean Adams?

  The last time we were in this part of the cycle. And the pre bull cycle is really where we are. And I feel like that should be this, this roll up title. We're in the pre bull cycle right now. And that was really impressed upon me. And I think you get that experience in real life and meeting everyone and seeing all of the builders. And yeah, I'm leaving this place more bullish than I was, David.

• 1:09:45David Hoffman?

  For sure, for sure. I've definitely been taking a moment to reflect today, walking around permissionless and like, look around, look who's here. This is a bear market conference and you don't get that many of these. And I say that in a good way, like bear market conferences are special because there's all of your friends and there's no noise.

• 1:09:58Ryan Sean Adams?

  Yeah.

• 1:09:59David Hoffman?

  Next year is going to be a little bit more wild, I'm sure.

• 1:10:01Ryan Sean Adams?

  The next one's gonna be crazy. All right, David, meme of the week. What are we closing with? I don't know if I've screened this one. Oh, here it is.

• 1:10:07David Hoffman?

  This is, this is Joseph DeLong here at Permissionless, running into Ryan, taking a selfie of Ryan.

• 1:10:13Ryan Sean Adams?

  Oh, my God.

• 1:10:15David Hoffman?

  With the caption, "So proud of my son on his first day of high school." And man, that slaps.

• 1:10:20Ryan Sean Adams?

  Disappointed with how many likes this guy, David. I'm in my white collared shirt, you know, I'm just looking like a little child. My backpack on.

• 1:10:29David Hoffman?

  A little bit, a little bit.

• 1:10:29Ryan Sean Adams?

  It's, it's, yeah.

• 1:10:31David Hoffman?

  Hey, he's proud of you, though.

• 1:10:33Ryan Sean Adams?

  I let that man in the conference, you know? Just waiting outside. This is how you repay me, Joseph? Oh, well, all right, we're gonna end with risks in a minute, but first we disclose, David and I are investors in Arbitrum.

• 1:10:44David Hoffman?

  No, not just you. That's just you.

• 1:10:46Ryan Sean Adams?

  Oh, forgot about that.

• 1:10:47David Hoffman?

  Yep.

• 1:10:47Ryan Sean Adams?

  Sorry about that, David.

• 1:10:48David Hoffman?

  Oh, well.

• 1:10:48Ryan Sean Adams?

  Both David and I also hold ETH. We are long-term investors. We're not journalists. We don't do paid content. There's a link to all Bankless disclosures in the show notes. And let me leave you with this special sign off for Permissionless to, of course, crypto is risky. You could lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us here on the Bankless journey. Thanks a lot.

• 1:11:20Speaker 05

  ...I get a royalty And the better I do, the more it will be Hey Gary

• 1:11:30Speaker 05

  Give me a call, baby And we can settle this

• 1:11:38Speaker 05

  Once and for all, baby Because it's so confusing I don't know what you're doing Is it out of your abusing for kicks? You keep losing in court I know that's gotta hurt Now you're trying to extort the JPEG fix But it's so easy for security I better register with the SEC If this resells, I get a royalty And the better I do, the more it will be

• 1:12:17Speaker 05

  The more it will be

• 1:12:21Speaker 05

  The more it will be Tell me how to leave

• 1:12:29Speaker 05

  The more it will be Gary

• 1:12:34Speaker 05

  Come on, walk me through this If I've got to register How do I do this? Because it's so easy for security I better register with the SEC If this resells, I get a royalty And the better I do, the more it will be