ROLLUP: ZkSync Airdrop | Optimism Fault Proofs | Pectra Ethereum Upgrade

Bankless Friday Weekly Rollup 2nd Week of June 2024 ------ ✨ Mint the episode on Zora ✨ https://zora.co/collect/zora:0x9171d31d50857506ebf5c2f20e5690a126ea6687/2 ------ 📣STAKEWISE | LIQUID SOLO STAKING https://bankless.cc/Pod_StakeWise ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2 ⁠ 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle ⚡️ CARTESI | LINUX-POWERED ROLLUPS https://bankless.cc/CartesiGovernance 🏠 CASA | SECURE YOUR GENERATIONAL WEALTH https://bankless.cc/Casa 🌐 TRANSPORTER | CROSS CHAINS WITH CONFIDENCE https://transporter.io/ 🔗CELO | CEL2 COMING SOON https://bankless.cc/Celo ------ TIMESTAMPS & RESOURCES 0:00 Intro 3:31 Markets 8:20 Gary G Says ETH ETF Approval “Sometime in Summer” https://x.com/tier10k/status/1801261940615848004 9:19 L2 Update 11:04 The Fed expects to cut rates just once this year https://www.cnbc.com/2024/06/12/fed-meeting-today-on-interest-rate.html 15:41 Will BTC ETF follow the gold ETF success path? https://x.com/hongkim__/status/1799442365892985257 20:48 ZKSync introduced ZK token https://x.com/TheZKNation/status/1800424206129357194 https://app.aevo.xyz/perpetual/zk https://x.com/eekeyguy_eth/status/1800461976969035910 https://blog.zknation.io/zk-token/ https://zknation.ghost.io/content/images/2024/06/points.png https://x.com/LibraryDefi/status/1800589632909832509 https://x.com/Gautamguptagg/status/1800539906923733397 https://x.com/Gautamguptagg/status/1800539906923733397 https://x.com/TheZKNation/status/1801020410563060031 https://x.com/TrustlessState/status/1801024526001815616 https://x.com/TrustlessState/status/1800758353511207103 36:46 Speaking of Airdrops: Taiko launched their TAIKO token https://x.com/taikoxyz/status/1798336750668136851 Find out whether you are eligible via Claimables! https://bankless.cc/3Jte55n 38:33 Optimism’s fault proofs are live! https://x.com/l2beat/status/1800530188171674070 https://x.com/VitalikButerin/status/1800547329931620625 49:23 Pectra is about to became the biggest upgrade of Ethereum history: https://x.com/sassal0x/status/1798869850200412383 55:34 Symbiotic introduced their restaking platform https://x.com/symbioticfi/status/1800530004776022493 59:29 Eigen Labs acquired Rio Network https://x.com/eigen_labs/status/1800888626642899321 1:01:41 Crypto:The Game was acquired by Uniswap! https://x.com/cryptothegame_/status/1800199946739822594 1:06:28 PleasrDAO releases the WuTang Album https://pitchfork.com/news/wu-tang-clan-once-upon-a-time-in-shaolin-turned-into-nft/ https://www.thealbum.com/ 1:09:12 Terraform Labs agreed to pay SEC $4.5B! https://www.coindesk.com/policy/2024/06/12/terraform-labs-do-kwon-agree-to-pay-sec-a-combined-45b-in-civil-fraud-case/ https://x.com/TrustlessState/status/1800955721955283053 1:11:44 Alchemy introduced platform for building rollups https://x.com/alchemyplatform/status/1798747911226040679 1:13:03 New Paradigm Fund https://x.com/matthuang/status/1801283717664526835 1:14:41 The Daily Gwei https://www.youtube.com/@TheDailyGwei/videos https://x.com/thedailygwei https://x.com/sassal0x https://podcasts.apple.com/us/podcast/into-the-ether/id1443920565 1:15:49 Closing & Disclaimers ------ 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.

• 0:00David Hoffman?

  ZK Sync introduces the ZK token. The probably one of the more anticipated networks to drop their token, dropped their token also. I mean, they dropped 17 and a half percent and it was like a kind of a crazy large airdrop.

• 0:16David Hoffman?

  Bankless Nation, welcome to the Friday weekly roll up. It's the second week of June and we've got a bunch of good news. I think it's a lot of good news and also instead of Ryan, who's down and out for the weekend, hanging out with his AI family like he sometimes does, we're pulling in Anthony Cisano to substitute teach for the Bankless Nation to cover the weekly news in crypto. Couldn't think of a better person to sub in. Anthony, how you doing?

• 0:38Speaker 01

  Hey, I'm doing good. Thanks for having me on as a substitute teacher again. Always love doing these episodes with you.

• 0:43David Hoffman?

  Yeah, we love having you and before we actually get into like the specifics of the news, like maybe let's just zoom out, Anthony, just like quick vibe check. Just like, how you feeling? We're in kind of a weird spot. We've gotten really good news. We've gotten some cool innovations that have happened this year. It's definitely been a very fun year. Overall, like what would you just say at this high level about just the vibe of everything right now?

• 1:05Speaker 01

  Yeah, yeah, I think the vibe's a little weird right now. It depends on where you look. If you go on Twitter, I think the vibe is different to going on like some private Discord communities that you might be a part of, or even public ones that you might be a part of. I think everyone's still very, very excited about the tech and all the developments that have been happening. You know, we're seeing a lot of growth across the industry generally. But of course, if the price goes sideways for a few weeks, everyone starts losing their head. So I think, yeah, there's a bit of a disconnect there. But I guess we'll get to the point where price starts going up again and the tech will be good and everything will suddenly be good for a few weeks as well.

• 1:36David Hoffman?

  Yeah, it does get hard to like decouple price action from like the sentiment of almost anything else. But there is a lot of other things that I think are just like pretty crazy things that happened this week. Crazy big. ZK Sync, one of the oldest and most longstanding Layer 2s dropped their ZK token. So we'll talk about who is eligible and what's the sentiment around that. Optimism, one of the, this is one of the big things I've been referring to, launched the first permissionless fault proofs ever. So if you have been paying attention to the just technical advancements and decentralization of a Layer 2. Optimism got a green slice on their Layer 2 beat. Security orange, as we call it. Eigenlayer gets a competitor. Do they got the juice? Brand new competitor on the scene.

• 2:20David Hoffman?

  This one's a little bit different than the others. And also, it's kind of like acquisition week this week. We saw like three or four major acquisitions. We'll talk about all of them as well. And something that's going to be very useful to have Anthony here. Pectra is about to be one of the biggest Ethereum upgrades. It's chock full of upgrades. And so we're going to talk about just everything that is in the Pectra upgrade and when it is coming. But first, of course, our friends and sponsors over at Stakewise want you to know what they're up to in the world of liquid staking on Ethereum. If you're a solo staker, but your ETH is locked up in a liquid because you're solo staking, you can continue to be a solo staker in the Stakewise protocol while also being able to mint OS ETH in order to use your solo staked ETH in DeFi, on Layer 2s, in Eigenlayer,

• 3:03David Hoffman?

  or anywhere else across the Ethereum landscape. You get to keep your rewards that your node is earning while doing more with your ETH. And if you're not a solo staker, Stakewise is introducing a Vols marketplace to choose perks that you want to add on to your staked ETH between custom MEV strategies, DVT, insurance, API boosts, all things available through the Stakewise Vols marketplace. There is a link in the show notes if any of this stuff piqued you. Kind of talk about the markets. It's not the greatest week in the markets. We are down across the board. Bitcoin down 5.8%. Started the week over $70,000, ending the week $66,800. Ether, kind of even worse.

• 3:43David Hoffman?

  Started the week $3,800, down 8.8% to $3,475. So we were really like pretty riding high, especially the Ethereum community post ETF. And we just like couldn't keep it going. We just like lost steam. Overall, just like any comments on the price action, Anthony?

• 4:02Speaker 01

  Yeah, yeah, I think what it really just keeps confirming is that there doesn't seem to be any really net new money coming into the ecosystem for quite a while now. Obviously BTC has some new money coming in via the ETFs, but even that, like, people don't realize that just because money's going into the ETFs, doesn't mean it is a net buyer of Bitcoin. It can be doing a complex kind of strategy in the background where it could just end up being flat, where essentially you're logging the ETF and then shorting, uh, uh, shorting the market generally on BTC. So your exposure is basically flat there. So yeah, I think that because of that, it means that pretty much everything else except BTC is bleeding pretty hard. ETH, of course, got the ETFs approved, but they're not live for trading yet. We're expecting them, well, at least I am expecting them to go live

• 4:44Speaker 01

  next month, hopefully for trading. But yeah, until they're actually live, there's, there's no inflows, right? So people are just really speculating still, speculating on what those flows will look like. And it's the same pool of money rotating around. I, I really do firmly believe that there's mostly, uh, the same money sloshing around in crypto and has been for quite a while. There's not really any net new money in, like, no one that I know in real life, like, literally no one that is not just in crypto already, has even, even whispered a word about crypto to me. And I know how much I'm in crypto. It's like very uninteresting for them right now. There's no FOMO. I think people, especially if they're in 2021 slash 2022, they're still burnt from that because I think we tend to forget how bad that was for the average investor. You know, things like Terra collapsing wiped out so many people that had just come in and were new people.

• 5:28Speaker 01

  So for them to come back, I think they're going to need some really strong FOMO. And I don't think we're going to see that until BTC and ETH are firmly in price discovery. And the mainstream media every day is saying, look at these new all time highs. You know, get in now or else you're going to miss out sort of thing. So until that happens, I'm not surprised at all by this kind of price action because of the fact that the, the new money is just not coming in right now.

• 5:47David Hoffman?

  Yeah, the, the Bitcoin chart, it's, it's pretty interesting. We've never seen, maybe you can correct me if I'm wrong. We broke all time highs, but we did not see price discovery. Like, I don't think anyone was expecting to break all time highs and immediately skyrocket, but like, we broke all time highs in March of this year. And it's now like well into June. Uh, how many, how many months is that? Like four? Uh, it's been pretty, pretty crazy to break all time highs and then not like do anything meaningful like four months in a row.

• 6:13Speaker 01

  Yeah, yeah, it usually happens where it'll kind of hit the all time high, the old all time high, hang around for a month and then go into price discovery. But because this cycle's generally been quite weird and quite accelerated as well, I think that maybe the market is trying to quote unquote, get us back on track into that classic four year cycle meme, where essentially, you know, BTC will go sideways for a little while and then start going into price discovery to catch back up to that. But yeah, we've not seen this kind of lag before from BTC going, you know, to a, it's old all time high and then yeah, it's four months or something, three, four months and not going into price discovery. But again, I think that speaks to the, to the fact that there's, yeah, there's not really new money coming in. And the, in the BTC ETF money is what's keeping BTC so relatively strong as well. Like it's, it's very, very

• 6:56Speaker 01

  strong, even against ETH, which I consider to be, you know, just as good as BTC, if not better, from, from my perspective there as an asset. Uh, yeah, I just think that's the phenomenon that we're seeing right now. It's not going to last forever. And I also think that there is the phenomenon of the summer lull, like 90% of the world right now is in, is in summer, in the warmer months. So they're not sitting around on their computers, trading crypto, right? They're outside on the beach, you know, having fun. Uh, and that's traditionally what we've seen. But then you can look at the stock market and stock market's doing really well and, and going, you know, bananas, basically. But I think the stock market is definitely very different to crypto. Crypto is super risk on, stock market not so much, especially like the top 10, which carries the entire stock market, top 10 stocks. Uh, people don't treat that as a super risky, I'm going to throw this in for a punt sort of thing.

• 7:40David Hoffman?

  And we're, we're looking at the ETH Bitcoin ratio on this, on this screen right now. And we had just a pretty crazy green candle from 0.045 to 0.057. Uh, but we've retraced almost half of it and Ether USD is definitely suffering in comparison to Bitcoin, uh, in the last like week or so. Um, again, down 9%, 8% this week for Ether and 5% for Bitcoin. Uh, and of course, Ether just doesn't have those flows. We have the speculation of the ETF, but we don't actually have the flows of the ETF. And I think like the entire crypto market that was going to buy Ether because of the ETF getting approved, did that. But then like that was, we, we shot our shot and now we're kind of just waiting for the flows to kick in. Uh, and we got a rumor out of this week.

• 8:23David Hoffman?

  Well, not a rumor, but a mention of Gensler, Gary Gensler talking about when the ETF S1s might actually get approved. And he says sometime this summer, which I will say is now, now is the summer. And so like it's still a pretty like wide range of time. I think we've got like one more month. Like early July is kind of my timeframe. I don't know if you have any opinions on like when you think the ETF might actually start trading.

• 8:48Speaker 01

  Yeah, I'm in the same boat early July. I gave a date on my own show of July 8th, not based on anything other than kind of speculating that maybe it doesn't go live in the first week because of the July 4th holiday in the US. So it could be July 8th, which is the Monday following. But you know, I feel like it's not going to take very long because the S1s are basically copy paste from the BTC ones. It doesn't seem like there's going to be a lot of back and forth or feedback or anything to be rectified. So yeah, I feel like it's going to happen sooner than people think. But I guess like in the next couple of weeks, we'll get a better picture of that.

• 9:19David Hoffman?

  Quick update on the layer two ecosystem. We got $44 billion locked on layer twos. Arbesham again coming still having a healthy lead over everything at almost $18 billion. We're down at 9% in TVL, but that's just because of the ether price. But then the activity on layer twos is staying pretty damn high, I'd say. We're at an 11 scaling factor. So you can really just see the Dankun, the 4844 blob space, hard fork into Ethereum. And then we've just been like holding this pretty high level of activity. Anything you want to comment on the layer two activity? We're definitely going to talk about optimism and their fraud proof later on. But like globally, any comments about the layer two space?

• 9:58Speaker 01

  Yeah, yeah. I mean, it's just continuing the trend that we've been seeing, especially since Dankun went live, as you mentioned, of usage going up and up and up because we basically gave more capacity for users and they're using that. And there's more apps going live and there's more interactions happening. It's, it's great to see. I mean, I don't think the L2 activity has slowed down with the price slowing down at all, which is even better to see. Because as you were talking about earlier, we would love to see more and more of that decoupling of price and tech fundamentals and usage of products on chain. And I think we've been seeing that lately. So every metric that I'm tracking with regards to layer twos, specifically like the top layer twos or like base and Arbitrum one, things like that, right? Yeah, even even the smaller ones is still up and to the right. People are using the people are getting value out of them. And you know, sometimes people say, oh, people are just airdrop farming.

• 10:42Speaker 01

  Well, it's like, no, because Arbitrum already has a token. They're not doing another airdrop. So their usage going up is not airdrop farming of the arb token. Base has said multiple times, they're not going to do a token. Whether they do or don't is another thing. But we know that that a lot of this activity is and a kind of a natural thing, an organic thing. People aren't just farming things. They they're using it, they're getting value out of it, which is what I really love to see there.

• 11:04David Hoffman?

  Switching into the world of macro, we got a FOMC day this week. Where this is where the Federal Reserve comes together and tells us whether or not they're going to raise, lower, or hold steady interest rates. Then we also get the inflation report. So that inflation report came in pretty cool. So inflation this last month was lower than expected, which means that we are more likely going to get raise cuts. That's the general thought. But we did not actually get any raise cuts announcements. So we have indicated that there will be one raise cut coming this year. But that's that's that's no new information. That was already like pricing by the market. But I definitely remember waking up one of the days this week after the FOMC day

• 11:47David Hoffman?

  and hearing the indication of like cooling inflation. And I think that's what caused like a pretty like good day in the markets. Like I like ether was jumped like $200 or something. We have, of course, since retraced, but at least the market favorably reacted to this FOMC day.

• 12:05Speaker 01

  Yeah, yeah. So I think people, because they saw the Canadian Central Bank and the European Central Bank or the ECB cut rates, I believe, last week. They thought that the Fed would be signaling that they're going to cut rates. And I think that it's eventually going to happen. But I think people, a little bit of wishful thinking there of like, oh, it's going to happen now. It's like, hmm, maybe not. And markets are forward looking too, where they'll speculate on this before it actually happens. And I think that markets have been doing that for quite a while now. People forget that inflation actually peaked in June of 2022, which was when ETH bottomed. You know, ETH bottomed at 880 two years ago now. And that's when inflation peaked in the in the US, not not anywhere else. I guess US is the main market we we kind of look at within crypto.

• 12:47Speaker 01

  And then since then, things have really been up only for Ethan BTC specifically. But yeah, I think if the market wants to be more risk on, if people want new money to come in for the long tail of assets, it's definitely going to require the quote unquote cheaper money, right? Looser monetary policy, you can't really have this in a tight monetary policy regime. Because people are like, well, why would I go speculate on this super risky stuff? When I can just buy treasury with my cash and get like a guaranteed kind of return there. And especially because inflation has, you know, it's still relatively high and it's still adding to the cost of living. People just maybe just don't have that disposable income to go and gamble and degen on this long tail of assets. So that's what everyone I think is thinking about and looking at. But as I said, the market will price this in before it actually happens, like these cuts.

• 13:32Speaker 01

  And when the Fed starts cutting, I don't know, like I'm not a macro expert. We're going to see if they keep cutting down to what they were before and what inflation does. Because it's really just a tricky game of managing the cuts versus inflation. And it's a fine line. I wouldn't like to be in Jay Powell's position, that's for sure.

• 13:49David Hoffman?

  I've definitely just noticed a lot more conversation about the cuts over the last like two weeks or so. The conversation has picked up in like intensity. And I think if there's one theme I've kind of just felt between the ETF that's been approved, but not live. And like having super high interest rates that people generally understand are going to get cut. Like there's just an air of anticipation. Like we have like stars that are aligning, but like they're going real slow. They're going in slow motion. And so like people are generally bullish, but they don't want to get too bullish too fast. Because you know, prices can still move against you because there's plenty of time before these like stars do align. That's kind of like my sentiment.

• 14:28Speaker 01

  Yeah, yeah. And I think that's just the probably the phenomenon of how fast information travels versus how slow these things take to play out. Like we, you know, information travels so fast because of the internet 24/7. Everyone's always like hyper informed, you know, you can be as informed as you want to be. But then the actual process, the actual reality of it playing out takes a lot longer, is a lot slower. Because a lot of these systems are still on the old world. I mean, the Fed is a very, very old institution, these notions of Rate cuts and inflation and the macro environment generally tends to move very, very slow, not just because of the systems that are in place, but also because it's a huge beast. Whereas the information will move at light speed, quite literally, right? So there's a mismatch in timelines there. And I think that is actually, that explains so much of the market movements and so much of the market sentiment generally.

• 15:13Speaker 01

  And, you know, I recently had my two and a half week break from crypto. I went away and came back and I didn't really feel like I missed anything, even though I know within those two and a half weeks, things were happening.

• 15:21David Hoffman?

  You missed quite a lot and nothing at all at the same time.

• 15:25Speaker 01

  That's what I, yeah, exactly. That's what I'm saying. So like, I feel like there's so much news and so much information that gets spread around, but the actual reality takes longer to play out. So you can go away for months at a time and then come back and be like, oh, okay, it played out. And I heard about this, you know, months ago, but now it's finally playing out. So there is a mismatch there.

• 15:41David Hoffman?

  Yeah. And definitely a plus one to the idea of patience around these things. This is a tweet from Hong Kim, who I believe works at Bitwise. So yeah, co-founder, excuse me, co-founder of Bitwise, who says, yes, $14 billion in net new flows into the Bitcoin ETFs in the first six months has been a remarkable success. But people don't realize that the gold ETFs had positive and mostly increasing flows for the next eight years after its own successful launch in 2024. So basically, Hong Kim saying, like, we should pat ourselves on the back because we got all these fantastic flows into Bitcoin. But also, like, the idea, the reason to be bullish is that the flows don't stop coming. Like, we get further flows. And of course, we're hopefully about to get the same thing for ETH.

• 16:25David Hoffman?

  And so like, sitting on your hands, understanding that anticipation, but also being zen about it and knowing that we're destined to fall howl up perhaps. If you have an ETF behind your asset is like the takeaway that I'm getting from this.

• 16:38Speaker 01

  Yeah, yeah, same here. I mean, I've been banging the drum about the ETFs being a passive vehicle for a long time now. And that's exactly what they are. They're a passive, long-term vehicle. They will keep taking in flows over time. But yeah, it's been very impressive just to see how much BTC has taken in. But I think that was a pent up kind of demand thing because it's been so long since people have been trying to get a BTC ETF. But yeah, I do think that going forward BTC and then the ETH ETFs will get those passive flows in. And it may be disappointing for people if they're looking at the daily flows, which is literally noise. It doesn't matter at all. But if you look out, like, as I said, like, you go away for a year and you come back, you're going to see all the flows that happened during that time. And then cumulatively, it will be a lot, lot more than what you expected, I think.

• 17:18David Hoffman?

  Totally. All right, that was the market section. We're going to get into the ZK Sync airdrop. And of course, there's a bunch of activity across the Layer 2 space as well. So we're going to get to Optimisms, brand new fraud proofs, brand new shiny fraud proofs, as well as the rest of the news. So we're going to get to all of that and more. But first, a moment to talk about some of these fantastic sponsors that make this show possible, especially Kraken, our preferred exchange to buy the vanilla ETH, not the ETF kind. So you can go bankless, of course. If you do not have an account with Kraken, consider clicking the links in the show notes to getting started with Kraken today. If you want a crypto trading experience backed by world-class security and award-winning support teams, then head over to Kraken, one of the longest-standing and most secure crypto platforms in the world. Kraken is on a journey to build a more accessible, inclusive, and fair financial system,

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• 20:12David Hoffman?

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• 20:58David Hoffman?

  21 billion in supply. It is being priced on the pre-market, on perpetual markets, at $36, which is coming in, I think at like an $8 billion network. So pretty hefty. Of course, ZK Sync has been one of the oldest brands alongside Ethereum that I can remember. I remember donating for Gitcoin grants, probably actually to one of your Gitcoin grants, Anthony, back in like 2019, using ZK Sync Lite. I'm sure you used it plenty of times as well, because I know you're a big fan of Gitcoin. In the airdrop, 17.5% of the total supply was airdropped in a one-time airdrop. So many other teams, Layer 2's networks have done seasons. ZK Sync is not doing a season.

• 21:41David Hoffman?

  They just dropped 17.5% all at once to almost 700,000 wallets. So of that 17.5%, 89% went to users with on-chain activity, which who became eligible for the ZK Sync airdrop. 11% went to contributors. So this is like developers, researchers, educators, like off-chain activity that was rewarded with an airdrop. So yeah, just want to emphasize 17.5% to 700,000 wallets is like pretty crazy. I think Arbitrum did, I can't remember the numbers off the top of my head. The Eigenlayer did 5% with another 5% slated for later. Like industry standard has like somehow converged on like 10% plus or minus a few percentage points.

• 22:26David Hoffman?

  17.5%, like, correct me if I'm wrong, Anthony, but that's like the largest airdrop in terms of supply that I can remember.

• 22:33Speaker 01

  Yeah, no, it's the same for me as well. Like it is definitely the largest airdrop in quite a while. I don't remember which ones, in terms of major projects, which ones were larger. I think, as you said, the trend seems to have been it gets smaller and smaller or gets broken up into seasons. And I've been a big advocate of not just like bigger airdrops, but like bigger community distribution. And I think that with ZK Sync, the community contribution came out to around 67%, I believe, with team and advisor and investors, sorry, getting about 33-ish percent, which is much better than what the industry standard has been up until now. I think the industry standard tend to have been 50/50 split, where a lot of that would go to a treasury instead of to the users from day one, which I think is actually detrimental to a token.

• 23:17Speaker 01

  Because what ends up happening is the tokens open up at a pretty high fully diluted value. Maybe there's only 5% of the token circulating. And then the market has to price in another 95% or up to 95% of tokens coming out over the next few years, which has been a trend that I hope to see reversed in the coming future. I mean, I'm personally trying to be the change I want to see in the world and talking to projects about this and trying to get them to come over to my belief that, you know, have a large float, have a big float from day one on the markets. You can have actual price discovery on this stuff. But ZK Sync definitely is pioneering it here, which is really great to see. I mean, as I said, 17.5%, yeah, seems to be the largest in quite a while.

• 23:56David Hoffman?

  Yeah, so just to really put some numbers in here, investors of ZK Sync will own a supply of 17.2% versus the 17.5% that's airdropped to the community that is airdropped. And then the team will own 16.1%. So the airdrop supply is larger than both investors and the team. And overall, they have this pie chart that we're looking at where there's also a supply of a token assembly. I kind of think that means like a foundation of sorts is like what people would think. And then ecosystem initiatives, which I think is incentivization campaigns for the future. So they're classifying these two things in the community section, which comes out to 2/3 of the total token supply allocated to the community, both past,

• 24:38David Hoffman?

  present, and future. And then 1/3 is allocated to the team and investors. It is pretty nice to see the airdrop larger than investors and teams. It's like part of the ethos of crypto. It's kind of hard to follow through on. It's hard to convince projects to follow through on. Also, it's just not in VC interest either. But ZK Sync, just showing the way and covering a path, I think is pretty cool.

• 25:00Speaker 01

  Yeah, yeah. I think there might be a little bit of a caveat to that generally, not just applying to ZK Sync, but just generally in that the investor kind of pool of entities in there is quite small relative to the airdrop pool. So for example, you might have like maybe a couple of hundred individuals that make up all of the investors, whether they be angels or VCs, and then they have different percentages of the supply. There's usually a lead VC in rounds that take a huge chunk of the supply. So they may have a huge chunk there. And then you've got the airdrop going to tens of thousands, hundreds of thousands of individuals. So it's a bit different like that. But it's hard to plan for that. Like even if you were to do an ICO, one whale can come along and just buy up so much of the supply, right? So the only

• 25:44Speaker 01

  way to actually get proper distribution is have years worth of price discovery through multiple cycles, like how ETH had, like how BTC had, to actually get good distribution. You can't plan for it. It's very, very difficult because there's always the whales that are around, whether you do an ICO or do it as a private investment rounds. And even if you try to get around that, it's difficult, very, very difficult, because there's no on-chain identity yet, right? There's no one uses on-chain identity products to try and do civil resistance and stuff like that. So essentially, you have this game of trying to balance things, but no one's gotten it right so far. But I feel like ZK Sync has done pretty well on the distribution side of things.

• 26:22David Hoffman?

  Yeah, one more caveat about the 17.5% airdrop. ZKSync users got 89% of the 17.5%, and then 5.8% of the 17.5% was sent straight to like native applications on ZKSync, which were then like given the mandate to do what you see fit with these tokens, like use it for incentivizations, further airdrops to your community members. And so they did the kind of the model where like in addition to airdropping to their own users, they also airdropped to projects with a mandate to drop to their own users. Okay, so let's unpack how people actually got eligible for the ZKSync airdrop, because this is where a lot of the tension over the airdrop was felt.

• 27:02David Hoffman?

  You needed to accrue one point, and there were six, seven different ways to accrue a point, and you just needed to have one point in order to be eligible for the ZKSync airdrop. You need to have interacted with 10 contracts on ZKSync Era, or deposited liquidity into DeFi protocols, or used one of the account abstraction Paymaster accounts on ZKSync Era, or traded 10 ERC20 tokens, or held one of the native ZKSync Era NFTs, or on the ZKSync Lite network donated to a Gitcoin round, or at least transacted three different times. If you did one of those things, you became eligible. And then there were further activities that you would have earned to have add on a multiplier onto your eligibility.

• 27:46David Hoffman?

  So, if you read the blog post, which I highly encourage people to if they want to learn more, the ZKSync team shared some of the philosophy of how they wanted to drop their token. Obviously, it's pretty well-known that ZKSync is one of the most bodied networks, like sibbled networks out there, because they have been, from the earliest of days, very explicit about the existence of their token. Like, the founders and the team said, like, yeah, there will be a token, that's how you decentralize a network, we're not going to hide that.

• 28:15David Hoffman?

  As a result, that kind of like was the magnet towards a bunch of like sibling activity. And so in their blog post, they talked about how they wanted to identify and reward people on a human-first approach. So they tried to identify human-like behaviors, such as like using smart contracts very early in their existence, rather than trying to like hide amongst the crowd. They say humans tend to be risk on and other like criteria, just to like try and parse out what is a human. After they developed the criteria that would reward humanness, then ZK Sync added on a pretty light, light-handed sibling filter as well. So not trying to just filter out every single sibyl, but

• 28:59David Hoffman?

  just like admittedly letting some sibyls in because they still nonetheless overemphasize rewarding human behavior. Just a very light sibyl filter on the end of things, just to like kind of pull out the most egregious ones. And then, and so that was their like philosophy. If you go onto Twitter, you will see a ton of discussion about all of these things. And like Signal is like being thrown all over the place. You can only imagine that if there are sibyl accounts and sibyl farms, they also know how to sibyl Twitter too. And so deriving noise, which is something that we do at Bankless, because we cover these things, like we generally have teams on for live streams, we definitely cover the token drops, like getting people's feedback is always very difficult because people are

• 29:44David Hoffman?

  just shouting left and right, that you don't have a lot of time to capture feedback. Overall, like maybe I have my thoughts and sentiments, Anthony, maybe I'll ask you about yours first. Like overall, like what are your thoughts about like the feedback about this token drop?

• 29:58Speaker 01

  I mean, I think my general thoughts about airdrops in general, like just generally, not just specific to ZK Sync, is that they are all heavily farmed, right? And they are all heavily bottered. And it's not just on chain, it's also on Twitter, because Twitter's done nothing to curb the usage of bots. They are absolutely rampant on there. And it's naive for people to think that that people aren't taking advantage of this to steer sentiment for certain reasons, right? Like we saw this play out with Starknet doing their airdrop. There was just a massive Amount of of hate because the the Sybils didn't get what they wa- that that what they wanted. So essentially what they do is if they're already part of a massive kind of operation, running many different addresses to try and Sybil to get more money. They'll go on social media, they'll start fighting the project and then they hope that the project caves and changes the distribution to give them more.

• 30:42Speaker 01

  And this has happened a few times with other projects and I think if you do the math on it, this is not small change we're talking about. I I saw something on Twitter that there was one entity tied to sixty five thousand addresses. Now, if you are controlling those sixty five thousand addresses, you're obviously going to be, you know, smart enough to go on Twitter, get a bunch of bots spun up and then try and steal your sentiment. So that you can get the the team to actually reward you because if the team then says, okay, well, we're just going to give every address that ever used our protocol, even a hundred dollars worth of of tokens. If you own sixty five thousand addresses, that's six point five million dollars, right? So just putting the math on these for people to understand the the the gravity and the incentives here. And when you follow the incentives, that's what you get to. And the bot activity is very, very obvious.

• 31:25Speaker 01

  As much as they try to act like they're not bots, it's extremely obvious which ones are bots and which ones aren't. And now with AI taking off as well, they, you know, they may try to hide themselves a bit better, but it's still very, very obvious. And I've been watching you tweet about this and seeing all the replies to your tweets. And I I actually, before likes were private, I went through the likes and I looked at the accounts. Ninety percent of them were bot accounts or hacked accounts because a lot of them will say it joined twenty fifteen, but they're hacked accounts. They're accounts that have not been, they don't belong to the original owner and they've got no mutual follows with me at all. They're just retweeting everything that to do with like airdrops generally. So it's just very, very obvious when you when you go into it. But now that likes are private, you can't even do that anymore. So yeah, it's it's a bit of a mess.

• 32:10David Hoffman?

  The tweet that I'm showing on screen is a reply to a tweet that I said, I'm collecting feedback on the CK sync, CK token trap. Please let me know your thoughts. And also, if you're in the bankless discord, you can at me in the airdrop hunter channel directly too. And this was the most liked tweet in response to my tweet. And the alec, the response about like what the changes ought to be would be reduce the allocation for the team. Make lower the highest max allocation. From 100,000 down to 25,000 to 30,000. Allocate more tokens according to their fees spent, their active days and weeks and months, their paymaster, which is a contract, native bridge volume, and then light transactions. Give allocation to the minimum 1 million to 1.4 million wallets. And then multipliers for old active laws.

• 32:55David Hoffman?

  Basically, every one of these suggestions is, take away tokens from the fat tail and give it to the long tail. And this tweet happens to have like, an insane amount of like 1.2 thousand retweets, like 2.5 thousand likes. And if you just go down to the comments, it's just like, just not, it's just incomplete. And so it's hard to parse out signal and noise, because I will also go into the bankless Discord. And I don't want to say that like this particular token drop was like, unrelentingly like beloved by everyone. There is everyone that has problems with the token drop. But if you go into the bankless Discord, there's like, problems that people will say like, hey, I like, I think I should have gotten allocation

• 33:39David Hoffman?

  for my wallet that used like Argent or CK Sync Lite, but I didn't, and I'm disappointed by that. There will people say like, I'm very happy with this airdrop, it's good for me. And then there were people say like, look at these bot farms, I'm upset by this. But like, the feedback and conversation in there is like, like coherent and like, everyone has a different opinion. And then you go onto Twitter and everyone has the same opinion. And it's just like, give allocation from the fat tail and give it to the long tail. Which is just like, to my opinion, like if that, that's just like, oh, you want, you want sibbles to be rewarded. That's kind of like one take.

• 34:12Speaker 01

  Exactly. And it can't be more obvious. I don't understand why people like, like it can't be more obvious. If you want to reward the long tail, right? And you know that there's lots of sibbles there because we have on-chain proof of this, it's very obvious. Then what do you think's happening here? And as I said, once you put the math to it, this is not small numbers. This is very much worth someone's time to go out there and steer sentiment if they can get the team to cave and reward them for it. Because then they just go off and yeah, they've made a lot of money for very little effort. Because it's just bots that they're running that are very readily available. And there are probably like teams that do this, like teams of people, where it's become like industrialized for them to do this, because their payout is so large. So yeah, I don't know why anyone is even doubting that this happens,

• 34:54Speaker 01

  given what we've seen in crypto anyway, like outside of this, the incentives are there to do this.

• 34:59David Hoffman?

  Yeah, it's totally rational. Even ZK Sync is making like tweets. Here's a tweet that they made response. Meanwhile, something important you need to know, there is a massive coordinated Sybil misinformation campaign against ZK Sync on X, run by thousands of bots. And so like, they're not even like saying like, hey, we'll try and like get feedback. They're just going full frontals, like declining the legitimacy of like a lot of these requests. I'm out here at Edge City Esmeralda, which is like a pop-up city, kind of like Suzalo. And there's a couple of ZK Sync members here and just like, the ZK Sync team is like working like, you know, 24/7, just like trying to gather data, trying to gather information. And then they put out a tweet today and said like, "We believe in our choices. We're gonna, we're gonna keep with

• 35:44David Hoffman?

  the path. We're not gonna change anything." And like, maybe they could have had enough data to like be more precise about the distribution of their tokens, but like the DDoS attack that is like a Sybil attack just like robs them of that opportunity. That's what I have been on the receiving end of many like Twitter mobs. It feels like a DDoS attack on your brain. Like it's impossible to parse like signal from noise. Anyways, that was that. I would also like to say to like tie off this section, the fighting between like Sybilers, users and teams is actually a symptom of SEC governance failure. This is the opposite of what a fair and orderly market looks like. This is like capital being wasted, capital being destroyed. A lot of the Sybilers were like, "I'm bummed that I didn't get..." Like,

• 36:28David Hoffman?

  some of the Sybilers were like, "I'm bummed that I didn't get the token, but at least give me my gas fees back." So like, that is like inefficient capital being destroyed. And all of this is because of this like kind of unfortunate airdrop paradigm, which we could have have a much better equilibrium if Gary Gensler and the SEC allowed us, but they don't. And to tie off the token, not to, not to be ignored, Tyco, which is a much newer, Layer 2 on the scene, a base rollup. We did a show with them on the Bankless Premium feed with Justin Drake as our technical co-host. If you want to learn all about Tyco and what a base rollup is, their token drop also went live. So 5% of the initial token supply, 50 million tokens, can now be claimed by eligible users. Tyco, like much more recent project with a much more recent mainnet, like mainnet went live just a few weeks ago. Like, how did it like

• 37:12David Hoffman?

  get to a token so quickly? Part of that answer is, a base rollup needs a token to stake to be a part of the functionality. So they needed a token to go out there to be live. Anthony, any comments or thoughts on Tyco?

• 37:25Speaker 01

  Yeah, I mean, it's just, I guess, like another airdrop of a big Layer 2 or Layer 2 generally. As you said, Tyco is definitely newer to the ecosystem. But what interests me the most about Tyco, probably not their token, but the fact that they're a base rollup, which is something that I've been doing a lot more research into over the last couple of months, just base rollups generally and preconfirmations and stuff like that, which seems to be like the endgame of L2s. Like, if we were to look five years out, that's kind of what I think it's going to look like for most of the L2 ecosystem. But yeah, as you mentioned, like, they need a token to achieve a lot of their goals around decentralizing, around getting people to run the infrastructure as incentive mechanisms. So yeah, pretty standard airdrop, I think, from them. It wasn't anything groundbreaking, from what I saw. But yeah, I mean, people knew this was coming as well, I think.

• 38:09David Hoffman?

  It is worth noting that the claim window for Tyco ends July 5th, so that's relatively quick. I think the ZKSync claim window is open until early next year, so you have a pretty big window of time. But nonetheless, you can check your eligibility for both Tyco and ZKSync using Bankless Claimables. So if that is a tool that you use, which you should, totally should, you can use that and it'll tell you exactly how many tokens you got or did not get. Okay, back into the optimistic rollup world. Optimism, fault proofs, which are the same thing as fraud proofs, and Stage 1 have arrived. Open source, permissionless fault proofs are live on OP MainNet, and with them, the OP stack arrives at Stage 1 decentralization, a major step forward for the superchain. Just to really lay down what fraud proofs are,

• 38:55David Hoffman?

  fraud proofs are the mechanism in which we remove the multi-sig from Layer 2s. So we have currently multi-sigs on Layer 2s, on some Layer 2s, in order to upgrade the chain or, like, maybe fix a bug. But of course, that also opens up these networks towards, like, exploitation. Like, you can exploit a network with multi-sigs. Why hasn't any of the networks done this? Well, because, of course, they're building the things. But fault proofs, battle-tested fault proofs, are the big step to getting a multi-sig off of the security model for many of these rollups. And Optimism MainNet, the OP MainNet, has launched and deployed their fault proofs. So they are in production, they are

• 39:35David Hoffman?

  Working as intended, which has earned optimism to green new slices on Layer 2B. So data availability, state validation, sequencer failure and proposer failure are all green slices on Layer 2B, leaving the last one, the exit window, which is just a timer on network upgradability. And these are the things that are all risks to Layer 2s and optimism has four green slices out of five. Pretty big day for the OP stack, the optimism community, for the Ethereum rollup landscape. Sazil, give me your thoughts, your sentiments.

• 40:09Speaker 01

  Yeah, yeah, a very, very big day, especially for optimism who have been building this for quite a while now. And for those who may not know, there are two major optimistic rollup kind of frameworks live today. There's the OP stack, which runs optimism and base and a few other networks out there. Then there's the Arbitrum stack, which is Arbitrum 1 and their orbit chains and kind of like L2s, L3 sort of thing there. And they both use fraud proofs for their security mechanisms here. Now, for me, the most exciting thing about L2s generally is that they run on a secure L1 in Ethereum. And then they can have the optional escape hatch window, where essentially what that means is that if the L2 is down for whatever reason, you can, and goes offline or something happens, you can still get your funds back on the L1

• 40:51Speaker 01

  by doing a transaction on L1 to essentially escape your funds out of the L2. That to me is one of the most, if not the most important properties of L2s. And that needs fraud proofs to be able to work. And that's exactly what OP stack has now, and this is exactly what Arbitrum 1 has. But optimism went a step further by making it permissionless out of the gate, whereas Arbitrum is still permissioned. So they have 14 whitelisted actors that can submit these fraud proofs, whereas in optimism's case, anyone can do it. Now, I know that Arbitrum is going to move towards permissionless fraud proofs as well. But as you mentioned, this is what this kind of pie chart is, or this pie representation is all about. Filling in the green there, there are sometimes yellow, I believe yellow is when it's permissioned. And then there's red, where it just doesn't exist at all.

• 41:33Speaker 01

  And once we have all green across the board, that's when they can move to stage 2 decentralization, which is really the end game for these things. And the number one thing I like about these rollups continuing to progress through this. Stages is that it kills the FUD that rollups aren't going to decentralize. Like, that's a big piece of FUD that a lot of people have been using for a while now, saying that, you know, rollups and L2 is always going to be centralized. They're never going to be able to decentralize, they're never going to be true kind of blockchain, so on and so forth. But we're proving them wrong each and every day. And every time we do something like this, it proves them wrong. And I strongly believe that there are very, very strong incentives for these chains to decentralize. Centralization is a huge liability. It means that a government agency can come to and force you to do things using your centralized power.

• 42:16Speaker 01

  And as a builder of these networks, you do not want that power because you are trying to essentially be as detached from it as possible or from the operation of it as possible, and trying to create a decentralized community around it. So if you want that to happen, you need to get to stage two. And I don't think anything is stage two right now. Arbitrum said that they want to be stage two. Well, nothing that has usage. There are some that are very, very small that are stage two.

• 42:39David Hoffman?

  Deadly.

• 42:40Speaker 01

  No, no, if you go to some of them, like, they really don't have much usage compared to the big players, right? Like, kudos for them for being stage two. But I don't think it really means anything if you haven't got any usage, right? Because you're not really giving any value to anyone. But, you know, Arbitrum has committed to being a stage two, but at the end of this year, which I hope to see play out. And I'm sure optimism isn't far behind them. And because a lot of the chains are built on the development kits that these ecosystems put out, automatically, they get to be, they get to upgrade to stage two as well, once they've implemented that. So, for example, Base will be able to go to stage two or even stage one now because OP Stack has those fraud proofs implemented, which I think is really cool. Because it means that we're not reinventing the wheel every time. We're allowing this community to come together, build these things out,

• 43:26Speaker 01

  progressively decentralize, and that has downstream effects on a bunch of other chains as well.

• 43:31David Hoffman?

  Yeah, I think that's really the point of emphasis that I want to drive home. Since so many chains use the optimism OP Stack, they just get to take these fraud proofs and put them right into their network. So Base, as you said, Blast as well, which has got $3 billion on it, Mode Network, which has $650 million on it, Bob, Zora. These are all OP Stack forks, right? And so they will just be able to take these fraud proofs and put them right into their network, which- It's kind of actually the point of the OP stack framework and why you would use the open source piece of software because then you get the benefits. All of these networks, Base didn't have to do false proofs. Actually, Base is a core contributor of the OP stack. So actually, this is their technology. But like anyone else using the OP stack gets the false proofs.

• 44:13Speaker 01

  They all work together as a collective. I think that's the overall point here is that we're not just decentralizing the tech, we're decentralizing the development of the tech, which is exactly the Ethereum philosophy, where Ethereum Layer 1 development is very, very decentralized. And specifically, optimism has always been about following that philosophy, following that, basically mirroring what happens on Ethereum L1. And I think that they're doing that. I think they're doing that in both, you know, in practice and in theory, which is great to see.

• 44:39David Hoffman?

  Vitalik, of course, gave his congratulations to optimism, saying, "Welcome, optimism, to the club of Stage 1 plus Layer 2s," meaning Layer 2s, where proof systems actually have teeth. I'm looking forward to seeing many more Layer 2s join this club soon, especially some ZK1s. And then he follows up with, I just have to put the meme of the week here, so we're getting the meme of the week in the middle of the show. Ethereum, where yesterday's FUD is today's solved problem. Starting with the very first FUD ever, which was Ethereum will never launch. That was 2014 FUD. Ethereum will never get past the DAO fork. The merge will never happen. Layer 2s will not have low fees. Layer 2s are just multi-sigs, which was the most recent door that the Reaper just laid. And then the next door of Ethereum

• 45:22David Hoffman?

  is cross-layer 2, UX is too fragmented, running a full node takes too much space, and MEV centralization and builder censorship. So these are the next things that's on Vitalik's horizon to go slay.

• 45:33Speaker 01

  Yeah. Yeah. And we just keep slaying him. That's the point, I think. The trend is what you want to be paying attention to is that all of the FUD, or at least 99% of it, has been completely and utterly wrong, or has been right for like a short period of time. Like, and people say, "The merge will never happen." Well, technically, you're right until the merge happens, and then you're just completely wrong, right? But the thing is, you knew these people were wrong years in advance, because you saw that the merge was happening on test nets, on Shadow Forks, and there was just no way it wasn't going to happen by old logic and reasoning. But of course, you know, Ethereum has its haters, a lot of them, unfortunately, but they keep getting slayed. And I'm glad the Grim Reaper's on our side.

• 46:12David Hoffman?

  Alright, everyone. Coming up next, Eigenlayer gets a brand-new competitor on the scene and makes a very big acquisition. A big move in the world of restaking Terraform Labs, the creators behind Terra Luna, agree to settle and pay the SEC $4.5 billion. Where is it getting the money from? We got Pleaser Dow and the Wu-Tang album, we got Crypto the Game acquisition, we got an Alchemy update, all of this and more. But first, a moment to talk about some of these fantastic sponsors that make this show possible, especially Mantle, one of our Layer 2s who definitely uses Optimism Technology under the hood as well. If you haven't checked out Mantle, you probably should. It's a pretty fun thing to do on there. You should go check it out. There is a link in the show notes. New projects are coming online to the Mantle Layer 2 every single week. Why is this happening?

• 46:53David Hoffman?

  Maybe it's because Mantle has been on the frontier of Layer 2 design architecture since it first started building Mantle DA, powered by technology from EigenDA. Maybe it's because users are coming on to the Mantle Layer 2 to capture some of the highest yields available in DeFi and to automatically receive the points and tokens being accrued by the $3 billion Mantle treasury in the Mantle reward station. Maybe it's because the Mantle team is one of the most helpful teams to build with, giving you grants, liquidity support, and venture partners to help bootstrap your Mantle application. Maybe it's all of these reasons all put together. So if you're a dev and you want to build on one of the best foundations in crypto, or you're a user looking to claim some ownership on Mantle's DeFi apps, click the link in the show notes to getting started with Mantle. Taking self-custody of your crypto is one of the most important things you can do on your bankless journey.

• 47:37David Hoffman?

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• 48:21David Hoffman?

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• 49:05David Hoffman?

  and users can even pay for gas using ERC20 tokens, including native USDC and USDT, sending crypto to phone numbers across wallets using social connect. But Cello is a community-governed protocol. Make your voice heard in the Cello forum to shape the future of Ethereum. Follow @cello on Twitter and explore the ecosystem built for the real world on cello.org/quest. And we're back with a tweet from Sazil, who's also on the show with us. "Pectra, the next Ethereum network upgrade is shaping to be one of the biggest in Ethereum's history. The confirmed EIPs include EIP7702." I'm not going to list all of these off. Sazil, maybe you can kind of walk us through some of these EIPs and what significance they have and why people should care.

• 49:45Speaker 01

  Yeah, so maybe I should kind of just touch on the ones that I find to be the most exciting and the ones that probably have the, yeah, the most user-facing effects here. So, as I said, Pectra, the next Ethereum network upgrade, which I'm speculating will go live in Q1 of 2025, is shaping up to be the biggest in Ethereum's history because it includes so many things. And I think originally, they started off, they being the core devs, started off with wanting to do a relatively small fork to get it out, you know, maybe faster. But there are so many things that people want to get into the network that are pretty critical, mind you, that are pretty important, that it's now become this kind of mega fork. And the things that I'm most excited about, there's, I guess, like probably two or three of them. So, number one is EIP7251, or otherwise known as Max EB. So what this allows people to do is stake more than 32 ETH per validator,

• 50:30Speaker 01

  which essentially- It means that I think the the latest I saw was up to 2048 ETH per validator. So if you're running 10 validators today because you're staking 320 ETH, in the future, you only have to run one validator with 320 ETH on it. And everything will be the same. Your block proposal chance will be the same. You'll get the same kind of rewards generally. But this is a huge unlock for the network because it basically allows us to collapse the amount of validators live on the network while keeping the same security, both economic and security via how many node operators there are. But we take a massive load off the network, which enables us to keep scaling Ethereum as a network generally, which to me is definitely the most exciting part of that. And because of that, it means we basically get to keep scaling up L2s with something like PeerDAS,

• 51:13Speaker 01

  which is what I've listed here as well. So PeerDAS is essentially the first implementation of data availability sampling, which is part of the full kind of dank sharding roadmap, if people have heard of this. And essentially what this allows us to do is scale up blobs even further, which means even cheaper fees for L2s and cheaper fees for a longer period of time. For people who've been paying attention lately, they may have noticed that blob usage is going up, which means once they actually reach their capacity, fees will start going up, and that means that L2 fees will start going up. Now, in order to, yeah, I think I put a tweet about this just very recently. Now, in order to rectify this, or in order to keep scaling up, there are two different things we can do. We can increase the size and or count of blobs, which basically gives us more capacity, and we can do PeerDAS and in the future even more stuff around

• 51:59Speaker 01

  data availability charting, such as sampling there, which allows us to scale up even further. And without getting too technical, the TLDR is basically cheaper fees for longer for L2s, more sustainable for L2s, and a continued kind of good user experience there. But as I mentioned, like Maxi B actually plays into this as well because it takes load off the network, takes load off the validators, which allows us to do this in a safer way. And I think the last thing I'll say here, the last thing to be excited about is ERP 7702, which replaces 3074, I believe it was, which is the account abstraction ERP, which essentially makes normal Ethereum accounts, we refer to them as externally owned accounts or EOAs, on the same level as smart contract or smart wallet accounts there.

• 52:41Speaker 01

  Now, there was a bunch of drama around 3074, around how it was insecure. Then Vitalik came along and said, hey, why don't we just do it this way with, you know, with 7702? And essentially, that is the ERP that is now going into the network there. So a lot of stuff to be excited about. That's just the tip of the iceberg, really. But those are the things that I'm most excited about there.

• 52:58David Hoffman?

  Yeah, so there's nothing overly massive, like we're not merging, we're not doing EIP 1559. But there's a lot of pretty like more than incremental upgrades to the network. So a lot of

• 53:12Speaker 01

  PeerDAS is definitely massive, I think.

• 53:15David Hoffman?

  PeerDAS is massive, yeah.

• 53:16Speaker 01

  Result of years worth of research and dev to get us to that point. It's basically on the same level as blobs, I think, in terms of what it represents for the network. But yeah, nothing like the merge. I don't know if we ever get something like the merge again.

• 53:27David Hoffman?

  Yeah, and it would be like kind of bad news, actually, if we did.

• 53:31Speaker 01

  Yeah, maybe something went wrong, I think, or we had to fix something critical. Hopefully we'd ever get that. Yeah, yeah, the unmerge, right.

• 53:39David Hoffman?

  Okay, yeah, I agree. PeerDAS is just like more blob space, right? And especially with that illustration that you had on your tweet where we're starting to approach some sort of fee structure where people are actually going to have to pay, have some sort of contention for blob space. But this is just what the future of Ethereum is. Like, we're going to make it have a lot more scale, which we did when we had blobs. And then we're going to fill up those blobs. And then we're going to have another 3X increase of supply. That's how Mike Noyder said it on our episode with him. And so we'll probably have a blob market show up maybe in the next like one to three months. And then there will be like a pretty healthy, like, people are going to have to pay for their blobs rather than blobs being free.

• 54:23David Hoffman?

  And then, like you said, sometime around Q1, if that estimation is correct, we're just going to have more blobs. And then transactions are going to be free again, and then we're going to repeat that process all over again.

• 54:33Speaker 01

  Yeah, and the thing is, this is extremely bullish. It basically means that the entire Ethereum scaling roadmap is working and Ethereum is growing. Like, I would be bearish if blobs remain free forever. Like, that wouldn't be a good thing. It would mean that no one's really using them. Or maybe we scaled them up so much that there's just so much capacity, but I don't think so. As you illustrated, it's a cat and mouse game of we scale up, people fill the space up, we scale up some more. And it's kind of a never-ending game. But what blobs allow us to do is basically keep scaling up in a relatively easy manner. Without having to make substantial fundamental changes to the network, it's literally just a tweak, like increasing the count or size of blobs is a one-line code change. It is not a big deal, but it does have downstream effects in that it adds more load to the network.

• 55:17Speaker 01

  And that's why we do other things like Max EB, which takes load off the network. So we're essentially doing a swap here. It's like, okay, well, let's take off the load from the validators and let's put that, uh, sorry, from having too many validators on the network. And then let's put that load back on the network via blobs, which actually serves a purpose and actually gives value to, to people.

• 55:34David Hoffman?

  Moving into the world of restaking, Symbiotic has come out of stealth. Symbiotic is, they call themselves a permissionless, flexible restaking. Uh, and so this is permissionless in terms of governance. So I think Symbiotic is positioning themselves as a governance minimized, governance reduced, uh, restaking platform. Uh, and then flexible implies just not just ETH. Eigenlayer, of course, has ETH and ETH derivatives. Uh, Symbiotic is going for, I guess, everything else. Uh, and so, uh, they have opened up what is pretty similar. Like if you're, um, a yield farmer out of Eigenlayer, an Eigenlayer points farmer, um, then a pretty similar thing going on with Symbiotic. You, um, submit capital, uh, and I could only imagine this would result in the collection

• 56:19David Hoffman?

  of a token at a later point. Symbiotic has been in stealth for a pretty long time now. This is a Paradigm and Cypherfund backed project. So if you've been paying attention into the restaking world, you've probably caught wind of this. Uh, and a Cypherfund is, um, part of the, like, not officially, but just like it's a bunch of Lido members. And Lido is also, of course, um, a Paradigm incubated, or maybe not incubated, but just like alignment with Paradigm. Uh, and so this is like coming out from, from that corner of the world. Any, any thoughts or reflections, Anthony?

• 56:49Speaker 01

  Yeah, I mean, I'm glad to see Eigenlayer getting competition across the board. There's two others that I know of, uh, that have come out recently, like restaking.

• 56:56David Hoffman?

  Karak and Nectar.

• 56:58Speaker 01

  Yes, yeah, those two, yeah. So there's four, I mean, I think there's going to be more because obviously the opportunity is so big. It's the same, it's the same that happened with Lido, right? People saw Lido getting so big and like, why is Lido so big? We can make new liquid staking platforms and restaking platforms that chip into that, which, which, which has happened. So when the economic incentives are there, people will come up and, and, and come with competition. I do think that we've kind of jumped the shark here a little bit like for me restaking really only applies to like an actual staked asset on a network like Ethereum like ETH being staked and then restake like that's where the actual economic security comes from. If you're restaking like it doesn't like some people are saying, oh, we'll restake stablecoins like what like I'm just a bit confused here like you know what's

• 57:40David Hoffman?

  I think that's just staking for the first time. You're just staking.

• 57:43Speaker 01

  Yeah, yeah. And even if you are like staking a stablecoin kind of LP pool or you know token or something like that. It is not restaking as is traditionally been defined. It needs to be securing something, right? So I think from that perspective, it's been a little bit weird. I don't know what symbiotics approach is here, but I understand that these other projects need to add more assets because they need to be competitive with Eigenlayer. If they just said, oh, we're doing E3 staking too, people will be like, okay, I'll just come and farm the token and then leave once I've done done that and just go back to wherever I wherever I want from from that perspective. But yeah, it remains to be seen how this shakes out. I think I may have said this on on Bankless, but I've definitely said it on my show. I think the end game may be that restaking as a primitive just gets enshrined at the protocol.

• 58:27Speaker 01

  And then essentially what happens is that all of these projects are just competing on the kind of interface front for the users. It's not on the restaking front. But I don't know if that's going to end up happening because there's already so much money sloshing around, so many different incentives around with this right now. But as I said at the top, I'm still very glad that Eigenlayer has competition. I definitely did not want Eigenlayer to exist just on its own. Because monopolies, no matter how aligned they may seem, are not good for anyone.

• 58:53David Hoffman?

  Right, yeah. And in the murmurings that I just hear from my different corners and like AVS circles and LRT circles and just like restaking circles like symbiotic has like chops to them, like technical chops to them. And so I think the perception is like this is probably the most valid legit competition to Eigenlayer that's like shown up on the market just because like, I mean, paradigm is very technical. Cyberfund with their Lido experience, they know what they're doing with like liquid staking stuff. And so let the games begin.

• 59:23Speaker 01

  Definitely.

• 59:25David Hoffman?

  Moving on to the world of Eigenlayer. Eigenlayer made an acquisition of Rio Network. Now, Rio Network was going to be an LRT project. It was going to be like one of the most conservative and risk-off and just like LRT networks that was going to be out there. That was the way that Rio had been pitched. And then it turns out Eigenlayer just decided to buy them. They are not turning them into an LRT, so there is no Eigenlayer enshrined LRT. They're using Rio restaking as kind of trying to implement like a spec or like an example model of an LRT. But then also Alan and the Rio team are also just kind of like Chad operators.

• 1:00:05David Hoffman?

  So it's in addition to acquiring some of the technology of Rio, they're also acquiring some of the talent as well. And so congratulations for Rio for getting acquired before even launching your network. And then also congrats to Eigenlayer for capturing some of the best talent that's out there. Any thoughts on this, Sessel, before I move on?

• 1:00:26Speaker 01

  Yeah, just a classic aqua hire, right? I had a good one at that as you just explained there. And this is, I guess, going back to what I was saying earlier about how I feel like all of these restaking platforms, they're not competing on the actual restaking itself, they're competing on the BD, right? The distribution, the integrations, the market. Like, it's very true for a lot of things in crypto where they start off being a primitive, but then realize that the primitive is worth nothing without the BD and marketing and community and, you know, integrations and stuff like that. So they actually move most of their operations to that. And the primitive ends up falling into the background. I think that's exactly what's going to happen with restaking. You know, the restaking aspect itself is table stakes. And then if you are going to be the dominant restaking platform,

• 1:01:06Speaker 01

  you need to be doing the BD, the partnerships, the integrations, which is exactly what Eigenlayer, I think, has been doing, you know, from day one. And now they're just doing it even a bigger way by doing this aqua hire of Rio restaking, which allows people to use that tech within the Eigenlayer orbit.

• 1:01:21David Hoffman?

  Do you remember Radar Relay, Anthony?

• 1:01:24Speaker 01

  Yes, that's an old name.

• 1:01:26David Hoffman?

  Testing your Ethereum, Ethereum history. Yeah, so that was also an Alan project. Alan is the founder of Rio, who now is part of the Eigenlayer team. So yeah, Alan's been around the Ethereum ecosystem, so he's seen a thing or two. So, once again, yeah, congrats to the team. But we are not done with acquisitions. Crypto the Game, do you remember Crypto the Game, Anthony? Did you play?

• 1:01:47Speaker 01

  I didn't play, but I think we had a little bit of a debate about this a little while ago, where I kind of followed the incentives and was like, I don't know how this just, this kind of like plays out long term, but we'll see. But yeah, I know of it. I haven't played it.

• 1:02:00David Hoffman?

  Yeah, so Crypto the Game, it sucks up a lot of time. So if you're a busy dude, I've heard of people like lose their like sense of reality because they go down the crypto game.

• 1:02:10Speaker 01

  It's World of Warcraft all over again.

• 1:02:11David Hoffman?

  It's World of Warcraft, yeah. It is a crypto reality show, a reality game show that's happening in real time in the interwebs, right, on Telegram, in Zoom. But then also, once a day, there's like a Hunger Games-like game that is played, something you have to go do. Scavenger hunt on the internet, scavenger hunt in real life sometimes. But then, at the end of every single day, there's a process of elimination. And so it's both like kind of Hunger Game-y, where there's a game every single day, but it's also Squid Game-y, where there's like, it starts off with like a thousand people and there ends up being one winner to win. I think somebody won like 84 ETH at the end of the 10-day game. Anyways, this was acquired by Uniswap of all people.

• 1:02:55David Hoffman?

  And so they say, Crypto the Game tweets out, "Excited to share that we have been acquired by Uniswap. We're forever grateful to our players. We now have the full voice of Uniswap Labs behind us, and we're going to use it to make Season 3 the best one yet." And of course, Uniswap also puts out their blog posts as well. And so Uniswap's just saying they're investing in on-chain experiences. And so kind of like an interesting hire out of Uniswap. Like, it's obviously something totally different than the Uniswap Exchange. David Phelps, I know, who runs Joke Race, his take was that it's just very obvious that user endpoints, like user experiences, is one of the most valuable places to be.

• 1:03:37David Hoffman?

  And so what Uniswap is really doing is finding like where an app that users will use and just like having that be a part of your brand. So whether it's about the Uniswap AMM or not, that's kind of the play there.

• 1:03:49Speaker 01

  Yeah, yeah, I mean, I totally agree with that. I think that we need more on-chain experiences that don't have to do with pure speculation. You know, you could argue that some of this is speculation. As you mentioned, there is a prize pool, so people are speculating on that. But there is a huge social aspect to it. And I think that the social experiences are probably some of the most important and under-explored within crypto. So if we can get more of these things where they mix that, you know, that financial kind of carrot on a stick with the heavy side being the social side of things, we can get more interesting stuff here. And I think there's been other experiments as well, like, you know, Firecaster, for example, is a big one, right? Mixing the kind of social side of things with the financial side of things. But I think Crypto the Game is unique from what I've seen of it and what I've heard about it in that it definitely feels like Survivor on crypto.

• 1:04:33Speaker 01

  I don't know if anyone has watched Survivor before, but it definitely feels like that, but in a much more cutthroat way, because you can be Anon, right? Like, you don't have to dox yourself. And when you're Anon, you can do a lot of things that you otherwise wouldn't do if you were doxed. So it's a very interesting dynamic.

• 1:04:49David Hoffman?

  Yeah, I have been told, and this probably goes for you as well, Anthony, that we would probably not do very well playing the game because we would just be eliminated too fast. Because like, our targets on our back are massive, like, oh, David from Bankless, Anthony from the Daily Way, get them out of here. Like, vote them off the island. Like, they can't be here.

• 1:05:07Speaker 01

  But we could join as an Anon, right?

• 1:05:09David Hoffman?

  We could join as an Anon. But I've also heard that if you join as an Anon, you need to like make up a backstory. So if you come in as a pure Anon, that is also a target on your back. So you need to be like, you need to be like more than Anon, but not like, you know, crypto-famous, like somewhere in that medium.

• 1:05:25Speaker 01

  You can't be JCR because everyone knows who you are, right? Like, even as an Anon, you're like, you're too famous of an Anon, so you'll probably be eliminated as well.

• 1:05:34David Hoffman?

  I heard this one story of a guy or girl was playing Crypto the Game, and they're in Telegram, you're like squatted up with like four or five people or something. And then your squad kind of like rotates as the game goes. But like, some guy went on like a run, and so he was gone for an hour. And so his team needed to vote someone off. He's like, this guy is not taking this seriously. We have to vote this guy off because he like went on a run.

• 1:05:59Speaker 01

  Oh, man. Yeah, no, I would definitely lose this. Within like the first five minutes, I'm like, sorry, guys, I gotta take a break. Taking a break? How dare you?

• 1:06:08David Hoffman?

  You're off the island. Get him out of here.

• 1:06:11Speaker 01

  Oh, that's great. That's great.

• 1:06:13David Hoffman?

  Anyways, season three is coming, of course. So this is gonna be the first season where Uniswap is the operator of Crypto Group, the game. I did an interview with Daniel, so if you want to learn a little bit more about that, that episode is in the Bankless archive. It's also on Twitter as well. Okay, this one is pretty cool. This one's close to my heart. Wu-Tang Clan's album "Once Upon a Time in Shaolin" is turned into an NFT and is going to get released. There is a ton of lore behind the Wu-Tang One of One album, "Once Upon a Time in Shaolin." I don't have enough time to go into it, but basically Wu-Tang album, one of the most famous rap groups of all time, made an album that they only made one of, didn't release it. This was in 2014, so like pre-Spotify era, right?

• 1:06:54David Hoffman?

  They made it into one CD and then they sold it for $2 million to Martin Scruelly, who had his asset seized because he went to jail for securities fraud. And that was put up to auction by the US government and was bought by Pleaser Dow. And the album is not allowed to be released until the year 2102. But I think we're gonna do an episode with the Pleaser Dow. And they are actually accelerating the release date for every fractional NFT that is bought. So if you buy one fractional NFT, you will move up the release date of the One of One Wu-Tang album by 88 seconds. 88 seconds, so you bump it up.

• 1:07:35David Hoffman?

  And so if once enough of these things are bought, then the actual album will be released and you will all, owners of the very cheap NFTs, will be able to listen to it. These NFTs are being issued on base. I think it's a cool story. I can't, again, do this story justice in this quick amount of time here, but it's very along the line, the ethos of just like One of One NFTs, cultural artifacts, distributing power to the masses, direct artist-to-consumer relationships with no middleman. And it's pretty cool to see this come into NFT format. Any comments here, Anthony?

• 1:08:08Speaker 01

  I can safely say this is one thing that I have absolutely no idea about.

• 1:08:14Speaker 01

  Like, I know a lot of things in crypto. I know a lot about a lot of things, but this definitely not. Because I don't listen to the Wu-Tang Clan, whatever they're called. It's not my style of music. And I definitely don't pay too much attention to the NFT side of crypto. It's just not something that I'm too interested in. So yeah, I'll take your word for it on how interesting of a story this is. But I do like the mechanism of the, you know, buying an NFT, reducing the time until it's released. That's something cool and something pretty uniquely enabled, I think, by crypto.

• 1:08:44David Hoffman?

  Yeah, so there have been 5,800 unique collectors and 145,000 shares of this thing. So one NFT is a share of the album. So, you know, governance rights over the album. And so if you want to take part in that and help release this thing, I've actually listened to this. You see, there are like semi-frequent listening parties. Album four. Alright, so I see you're doing song four is my favorite song. I couldn't tell you what the name of it is because I don't think there are names. But yeah, pretty cool. Anyways, moving on. Terraform Labs, Do Kwan, agreed to pay the SEC a confirmed $4.5 billion in a civil fraud case. I did not know that Terraform Labs had $4.5 billion.

• 1:09:26David Hoffman?

  But when the headline out of CoinDesk says, "Agree to pay the SEC a confirmed $4.5 billion", that tells me that there's $4.5 billion somewhere. And that makes me say, like, WTF, bro? Like, where did that $4.5 billion come from? And why does the SEC get to get, as a fine, there are plenty of people who had like money get literally burned on fire. Maybe they should get the money. What are your thoughts and sentiments here, Anthony?

• 1:09:56Speaker 01

  I mean, I completely agree with you. I think that the fact that they have that much money to begin with is a shock to many people. I'm not sure where it would have come from, if anywhere. Maybe it came from that BTC that they were stockpiling in order to try and kind of use it as collateral to prop up their stablecoin. Maybe it came from there. I'm not sure. I don't even know if it's detailed in the case of where this money actually came from. But I agree with you. It should not be going to the SEC mafia as protection money, really, right? It should be going to some of the victims. Like, it'd be kind of difficult to know who to give it to, I guess. But I think that there are a lot of different victims here and just giving it to them in any capacity is way better than giving it to the SEC. Because giving anything to the government, I mean, they're gonna just...

• 1:10:38Speaker 01

  Just spend it inefficiently to begin with and no one is really protected here. Like the SEC's mandate is to protect investors and to to help them and make them whole when they can. If they just keep this money for themselves, they haven't made anyone whole, they haven't helped anyone. Yes, Do Kwon and some of the other Terraform kind of people, Labs people got their comeuppance, which is great. Like I do enjoy that. I do enjoy seeing Do Kwon get punished for his stupidity and his crimes. But at the same time, I don't enjoy the 4.4 billion dollars, 4.5 billion dollars that is going to the SEC instead of going to the people who are actually hurt. Like, what are we doing here? Are we just inflating the SEC's kind of coffers? Yes, and that's not the way it should be.

• 1:11:17David Hoffman?

  Yeah, absolutely not. It's like if you just did a random airdrop of like USDC onto like addresses, Cosmos addresses that had Luna at the time of the collapse. Like, sure, not a perfect way of reparations, but like way better than like giving it to the SEC. But I mean, the SEC has proven itself to be like not really in the interest of people, very much in the interest of itself. One cool release this week comes out of Alchemy. Alchemy is an RPC provider, quite like Infira, like one of the biggest ones, and they are introducing rollups. So they want you to issue a rollup issue, deploy a rollup.

• 1:11:59David Hoffman?

  So kind of like a conduit in the rollup as a service provider. This is the rollup as a service like category. They are becoming a rollup, a place to deploy rollups. So if you want to build, launch, scale your Layer 2, Alchemy now has like a rollup distribution platform, hosting platform. Yeah, hosting platform, that's the right word for it. And so a pretty cool, I'm not calling it a pivot because I'm sure they're definitely doing their RPC stuff too. But it's like an adjacent vertical that they are heavily leaning into. So a pretty cool announcement out of Alchemy.

• 1:12:36Speaker 01

  Yeah, definitely. And just continues the trend of the modularization of Ethereum, right? Where everyone gets to basically build on this stack, build in a modular way. And that opens it up to a Cambrian explosion of innovation and of product offerings. There's not just like one kind of company or one thing that offers those products. It's a multitude of different entities that offer these products in different ways. And the market, the free market chooses what they want to use and chooses what they don't want to use, which I think is very, very bullish overall.

• 1:13:04David Hoffman?

  Totally. And then raises of the week. We had a gargantuan raise. Paradigm has announced their third fund, $850 million venture fund focusing on crypto projects at the earliest stage. Of course, they had to actually add in crypto there because of that one moment where they actually, they took crypto off the website and everyone took that extremely personally. So congratulations to the, to Matt Huang and the entire Paradigm team. $850 million is nothing to scoff at. And of course, Paradigm is like one of the most revered, well-respected, technically strong VC funds in crypto. Any thoughts or additional comments?

• 1:13:41Speaker 01

  No, I mean, no, no real thoughts. Not surprised at all by this. As you mentioned, like Paradigm's big already and being big, it's being bigger in venture, especially if like you get money in from LPs that are basically like, oh my God, like there's so much going on in crypto right now. I need exposure to it. Who do I go with? I'm going to go with one of the most respected and, and you know, well-performing funds, which is, which is Paradigm, definitely. I think that definitely up there. They have made some, I guess, maybe confusing investments over the past couple of years that people may have looked at. But at the same time, if you just follow VC incentives generally, that's what it kind of points to. It's like when you have that much money to deploy, you kind of need to find projects to deploy it to. There's not actually enough quality projects out there to fill billions of dollars of VC money. Like, that doesn't exist. So you

• 1:14:25Speaker 01

  need to be going to maybe more riskier project, maybe projects you otherwise wouldn't have funded and so on and so forth.

• 1:14:31David Hoffman?

  Yeah, you can definitely invest faster than, than we can build quality projects.

• 1:14:36Speaker 01

  Yeah, exactly.

• 1:14:37David Hoffman?

  That's just true across the entire crypto VC space. Anthony, I want to thank you so much for subbing in for Ryan, who's taking a well-earned break. If people just loved the sound of your voice and they want to hear more of it, where should they go?

• 1:14:50Speaker 01

  They should go to the Daily Guay on YouTube or just go to my Twitter profile and you can find all the relevant links there. And I've also restarted doing a episodes of the Into the Ether podcast for the OGs that remember that podcast with Eric Connor every week now as well. So yeah, people can go follow both of those things if they want to. But the Daily Guay is just me, you know, every day, almost every weekday, I try to make those episodes happen, talking about Ethereum, giving the latest updates there, specifically with a heavy focus on Ethereum core protocol and layer two. So if people are very interested in that, then yeah, feel free to follow the show.

• 1:15:20David Hoffman?

  Yeah, Bankless listeners who are familiar with Anthony will know we bring him on quite frequently because he does a bang up job covering Ethereum very deeply, very technically. Bankless, like 100 level, 200 level, 300 level, Daily Guay 300 level, 400 level. Very deep Ethereum and definitely something I have straight into my ears every single morning when I wake up and I get Sessl's Daily Guay podcast right into my ears. So, thank you for doing what you do, my brother. Thank you for having me on. It's been a joy and yeah, I look forward to next time. Absolutely. Bankless Station, you guys know the deal. Crypto is risky. You can lose what you put in. But hey, we're headed west. This is the frontier. It's not for everyone, but we are glad you are with us on the Bankless journey. Thanks a lot.