ROLLUP: Stripe's Billion Dollar Stablecoin Bet | Noteworthy Investor Longs BTC | Kraken's New L2 | Self Custody Is For Losers??

This week, a record-breaking billion-dollar crypto acquisition has caught mainstream attention, highlighting its significance for the stablecoin market’s future. Kraken joined the Layer 2 race, while Worldcoin launched its own L2, WorldChain, and Scroll’s airdrop received mixed reactions from recipients. Meanwhile, Paul Tudor Jones is bullish on crypto as a hedge, while Michael Saylor stirred controversy by criticizing self-custody, calling it a move for “losers.” ------ 📣 0x v2 | NEXT GEN PRICING ENGINE https://bankless.cc/0x ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2 ⁠ 🦄UNISWAP | BROWSER EXTENSION https://bankless.cc/uniswap 🪄 MAGIC EDEN | HOME OF WEB3 https://bankless.cc/MagicEden 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle 🤖 0G | MAKING THE IMPOSSIBLE, INEVITABLE https://bankless.cc/0G ----- ✨ Mint the episode on Zora ✨ https://zora.co/collect/zora:0x0c294913a7596b427add7dcbd6d7bbfc7338d53f/84?referrer=0x077Fe9e96Aa9b20Bd36F1C6290f54F8717C5674E ------ TIMESTAMPS & RESOURCES 00:00 Start 02:23 Markets https://pro.kraken.com/app/trade/btc-usd https://pro.kraken.com/app/trade/eth-usd https://x.com/DegenerateNews/status/1849120571222536262 https://www.coingecko.com/en/global-charts 06:22 L2 Updates https://l2beat.com/scaling/summary https://x.com/lukeyoungblood/status/1849217477668171831?s=46&t=2ZINVXJQKx6xO_6Wiiu_2g https://x.com/lukeyoungblood/status/1849217477668171831?s=46&t=2ZINVXJQKx6xO_6Wiiu_2g https://x.com/lukeyoungblood/status/1849217477668171831? s=46&t=2ZINVXJQKx6xO_6Wiiu_2g https://x.com/lukeyoungblood/status/1849217477668171831?s=46&t=2ZINVXJQKx6xO_6Wiiu_2g 08:09 Paul Tudor Jones Bullish Bitcoin https://x.com/WatcherGuru/status/1848735063615152136 10:46 Election Check In https://polymarket.com/elections https://x.com/Polymarket/status/1849451658788384797 15:26 Kraken's New L2 https://x.com/inkonchain/status/1849443457883885801 https://inkonchain.com/en-US 19:23 Stripe's $1 Billion Dollar Bet https://x.com/Stablecoin/status/1848390849215730100 https://x.com/zcabrams/status/1848391342524641533 https://x.com/benhoneill/status/1848390493425504388 https://x.com/cburniske/status/1848108613631390155 22:24 Michael Saylor Against Self Custody? https://x.com/AdamSimecka/status/1848131598044074289 https://x.com/Sina_21st/status/1848450657205789161 https://x.com/ErikVoorhees/status/1848754319019151873 https://x.com/VitalikButerin/status/1848876323026178429 https://x.com/ercwl/status/1848737997463695827 28:59 Balance on CEX's https://x.com/leonwaidmann/status/1848780740969795917? s=46&t=2ZINVXJQKx6xO_6Wiiu_2g https://x.com/leonwaidmann/status/1848780740969795917?s=46&t=2ZINVXJQKx6xO_6Wiiu_2g 32:38 Uniswap Integrated Across https://x.com/AcrossProtocol/status/1849106135443202069 https://x.com/danrobinson/status/1849142590131904650 https://x.com/TrustlessState/status/1849182167748022600 35:47 Scroll Airdrop https://scroll.io/blog/introducing-scrolls-first-airdrop-a-celebration-of-the-global-community https://claim.scroll.io/ https://x.com/Andrey_10gwei/status/1848441546645135672 https://x.com/redhairshanks86/status/1848653068554166339 39:12 Ethereum Blobs https://x.com/Data_Always/status/1848789160888332340 42:46 WorldCoin launches 'World Chain' L2 https://world.org/blog/announcements/world-chain-now-open-every-human 48:46 Central Bankers https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4985877 https://www.minneapolisfed.org/research/working-papers/unique-implementation-of-permanent-primary-deficits 52:11 Buenos Aires Issues Decentralized ID's https://zksync.mirror.xyz/kWRhD81C7il4YWGrkDplfhIZcmViisRe3lnsmbvOEmg 56:19 Nigeria Drops Charges https://www.bloomberg.com/news/articles/2024-10-23/nigerian-court-releases-binance-executive-jailed-since-february 57:44 Meme Of The Week https://x.com/TrustlessState/status/1849206541255389459 ------ 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.

• 0:03Ryan Sean Adams?

  Bankless Nation is the fourth week of October. It's time for the Bankless Weekly Rollup. Okay, where do we start? We've got a record-breaking billion-dollar crypto acquisition. It's catching mainstream attention, and it could be a really big deal for stablecoins.

• 0:17David Hoffman?

  We also got multiple Layer 2s adding to the Ethereum Settlement Network this week. Kraken adding its Layer 2 to the superchain. What's its plan? What's it called? And then also, World Chain from WorldCoin is online. And in addition to all of that scroll, another Ethereum Layer 2 dropped their airdrop this week. Was everyone happy, or was everyone upset?

• 0:36Ryan Sean Adams?

  It's an airdrop, so what do you think, David, at this part of the cycle?

• 0:40David Hoffman?

  Was it like all the other ones, or did it break the trend?

• 0:43Ryan Sean Adams?

  Also, Paul Tudor Jones, notable investor, is buying crypto, and we'll talk about why. And then Michael Saylor, another notable crypto investor, he's on the hot seat for basically saying self-custody is for losers.

• 0:55David Hoffman?

  Yow, yow, hot take. Not very bankless of him. Bold strategy for him. We're going to get to all of this stuff and more, but first, I want to talk about our friends and sponsors over at ZeroX, the OG builders, building critical DeFi infrastructure ever since 2017. I remember reading the ZeroX white paper in 2017. One of the few white papers that I actually got value out of and stood the test of time. They are now building out ZeroX V2, a full-stack upgrade of their crypto-trading APIs. What does it bring? What is ZeroX V2? Multi-hop and multiplex routing. That means it just splits trades across multiple liquidity sources, intermediate tokens, to find the optimal execution route across all of Ethereum's liquidity pools. You know, bajillions of permutations, and ZeroX and its new engine will find the right

• 1:39David Hoffman?

  one for you to make sure that you get the best price, not just the best quote, but the best final price when the tokens finally land in your wallet. First-in-class for large trades as well as small trades. It's just the best. It's just the best. And for all of you security maxis out there, they've also upgraded the risks exposures when doing all of this stuff, permit-to-allowance holders. If you know what I'm talking about, then you know that these are the industry-best practices to making sure that your wallets stay safe when you trade on chain. There is a link in the show notes, bankless.cc/zerox.

• 2:10Ryan Sean Adams?

  This is what traders want, best price, bajillions of permutations. Bajillions, a very scientific number there.

• 2:16David Hoffman?

  That's right. We don't want bajillions of permutations. We want the one permutation out of the bajillion permutations. And that's what Xerox gets you.

• 2:24Ryan Sean Adams?

  Getting into the markets this week, let's take a look at our friend Bitcoin. Where are we at on the week?

• 2:28David Hoffman?

  Up 1.3% on the week, started the week $67,000, ending the week at $67,700. So, okay, okay week. So kind of flat, but okay.

• 2:37Ryan Sean Adams?

  Yeah, how about Ether?

• 2:39David Hoffman?

  Not great, down 2.8% on the week, started the week at $2,600. Fell pretty low, fell below $2,500 for a little bit. Currently at $2,525.

• 2:49Ryan Sean Adams?

  Almost 3% down on the week. This explains my timeline. ETH holders in shambles, ETH is dead, et cetera, et cetera. This is the sentiment going on on crypto. But what are we seeing in the ETF flows? Maybe we should start with Bitcoin because it had a banger week, did it?

• 3:03David Hoffman?

  We should probably start and end with Bitcoin. Bitcoin ETF flows coming in hot. I'm just going to start reading out some numbers. October 11th, 250 million. October 14th, 550 million. October 15th, 370 million. The next day, 450 million. The next day, 470 million. The next day, 273 million. The next day, 294 million. The next day, out 80 million. And then yesterday, the most recent day, in 192 million. Just racking in the numbers. There's a total inflows of 21 billion and like 3 billion? 2 billion came in in the last like 10 days.

• 3:39Ryan Sean Adams?

  All right, so Bitcoin had the big week. How about Ether?

• 3:43David Hoffman?

  I mean, just not too much action. We're at negative 475 million. It's like marginally inflowing, but not anything comparison to what Bitcoin ETFs are doing.

• 3:53Ryan Sean Adams?

  Yeah, it's probably not even a 10th of the inflows, net inflows in that same time period. So just basically take the numbers that you heard and like, you know, take 10% of that. And that was basically what Bitcoin did. Let me show you a chart that's going to make you even sadder, David. You ready?

• 4:10David Hoffman?

  I mean, like, we're about to look at the ETH BTC ratio. And the ETH BTC ratio reflects the inflows that we were just talking about. It is down to 0.0372, which is a three-year low.

• 4:20Ryan Sean Adams?

  Down? Wait, a three-year low? You say a three-year low?

• 4:23David Hoffman?

  A three-year low, yep.

• 4:25Ryan Sean Adams?

  Okay, so the lowest level since April 2021.

• 4:29Ryan Sean Adams?

  According to our sources here, you know trader Ben Cowan, he has predicted this ratio for actually some time. Remember he came on the bankless? He basically told us this. He thought he was kind of crazy back in 2022 and 2023. But his range for the last three years has been .03, so still some ways to go, to .04. But he says that we are in the bottoming process right now. He says that's kind of the the home range. And over the next few months into maybe the first two weeks of January, that's when we're going to bottom. We might be at the bottom right now, according to him.

• 5:03David Hoffman?

  Bottom mesh, yeah.

• 5:04Ryan Sean Adams?

  Or we could go a little bit lower before we resume some ascent here. And his base case is just reversion to mean because he reads kind of the TA lines and the logarithmic charts and that kind of thing. So this could be the worst of it, David, but it's definitely feeling kind of bad in sentiment land.

• 5:23David Hoffman?

  Yeah, we've been here before. I've seen that .03 handle, but it was all the way back in like 2018, 2019.

• 5:31Ryan Sean Adams?

  Most people don't remember that.

• 5:32David Hoffman?

  No, most people were not here for that. But that's where the crucible was. That's where a lot of ships got sharpened.

• 5:38Ryan Sean Adams?

  Well, I have nothing more to say to ETH holders other than this. It's conviction time. Let me just say this. And something that you often say, which I like, David, is you can't copy trade conviction. So you either have it for this particular asset or you don't. And if you don't, I mean, better sell.

• 5:54David Hoffman?

  The actual line is you can copy someone's trade, but you can't copy someone's conviction.

• 5:59Ryan Sean Adams?

  I like that line. Total crypto market cap, where are we at in the week?

• 6:03David Hoffman?

  Coming in at $2.42 trillion, below that $2.5 trillion mark. But you know, I bet you we see $3 trillion by the end of the year.

• 6:12Ryan Sean Adams?

  Yeah, I mean, I think so, particularly if we start talking about, well, I don't know, by the end of the year. But like stablecoin is included in this number too, and that's destined to go higher. Let's do a quick L2 update drive by. Of course, there's some major updates on L2. Some big launches happening that we'll get to for a second. I just wanted to highlight this. And thanks to our sponsors and friends over at Mantle for supporting this section of the roll up. L2 fraud proofs are coming on base. Next week, okay? So this will elevate Base from stage zero on L2B to stage one, which is a big upgrade in terms of Coinbase's inability to yoink your funds.

• 6:55Ryan Sean Adams?

  Basically, when you have fraud proofs, you, as a user of the base chain, have the ability to exit to L1. No one can steal permissionlessly. No one can steal your crypto assets on Base. It's a pretty big milestone, and there are a lot of people out there who said, "It would never happen. Base is never going to decentralize. All the L2s are not going to decentralize." Of course, OP MainNet did it not too long ago, and now they're rolling that out to Base. I think that'll become relevant when we talk about Kraken's layer two a little bit later. This is Luke Youngblood saying, "In about a week, Base will become a stage one rollup with permissionless fault proofs. While Arbitrum has been ahead of Base, their system only accepts fault proofs from a whitelist set of actors, so Base will leapfrog them for a bit."

• 7:38Ryan Sean Adams?

  I love this competitive pressures of like which L2 ecosystem can become more decentralized and like the pressure to be on the frontier of that.

• 7:48David Hoffman?

  This is just about property rights. So with stage one and even more so with stage two, your property rights on layer twos are given much stronger, almost equivalent assurances to your property assets on the Ethereum layer one. So it's all about just like permissionlessly expanding Ethereum's property rights settlement network. So a very necessary part of the Ethereum roadmap. Moving into markets, some big news out of the world of Paul Tudor Jones on Squawk Box. There was an interview on Squawk Box where he says, "All roads lead to inflation." And the interviewer, Andrew Ross Sorkin, asks him what exactly he's long if he thinks all roads lead to inflation. Let's go watch that clip right now.

• 8:28Speaker 02

  Given all of the things you're saying, are you off buying gold and Bitcoin and hiding somewhere?

• 8:33Speaker 03

  I think all roads lead to inflation. We're gonna end up, if you, so...

• 8:38Speaker 02

  But does all roads lead to inflation? Therefore, gold is a good investment? Is Bitcoin a good investment to you?

• 8:42Speaker 03

  I'm long gold. I'm long Bitcoin. I think commodities are so ridiculously under-owned, so I'm long commodities. I think most young people find their inflation hedges via the NASDAQ. That's also been great. It's probably some combination. I probably have some basket of gold, Bitcoin, commodities, NASDAQ, something like that. And I don't own zero fixed income.

• 9:04David Hoffman?

  I really like the framing, actually, that he's so long commodities, or he believes that commodities are just super undervalued. Because I kind of think, if you go to CoinGecko, you just look at the market cap, you've got Bitcoin, Ether, like all the other ones. These are all commodity monies. Every single layer one asset is a commodity money. So to me, that statement is just like secularly bullish the whole entire crypto industry.

• 9:23Ryan Sean Adams?

  Yeah, I agree. When he says all roads lead to inflation, some people will hear that and think he's just talking about consumer price index inflation, like CPI. And they'll be like, well, no, Powell's got that under control. Look at all the reports. I mean, it came down from 8% to now it's like roughly 2% to 3%. And that seems to be sustainable moving forward. That's not what Jones is talking about here. He's talking about the increased supply of money. He's talking about currency debasement, essentially. He's talking about asset price inflation and ways to hedge against that. When there's more and more liquidity and more and more fiat dollars in the system, that's the type of inflation he means. And that's why he's pointing out there are some hedges out there, like commodities. He says those are undervalued.

• 10:06Ryan Sean Adams?

  And even like the NASDAQ can be a inflation hedge as well. And certainly, we think our crypto monetary assets are the best of the best with respect to inflation hedges because they are completely outside of the fiat system.

• 10:21David Hoffman?

  Just some stats on this, some metrics on this, just to put some numbers here. The Congressional Budget Office estimates that the federal government will clock a $1.9 trillion deficit this year by the end of 2024. And it's on track to grow to $2.8 trillion by 2034. So in a decade, we're going to have a $2.8 trillion deficit. All of that, that's just net inflation. All of that, how do we cover that deficit? Inflation, inflation.

• 10:46Ryan Sean Adams?

  We are 11 days out from the election. So let's do a check in on Polymarket. And what we're seeing on the 2024 election forecast, at least on Polymarket, is Trump still up? 61% odds of winning for Donald Trump versus Kamala Harris at about 39%. I've actually been surprised at how Trump's lead has held for so long.

• 11:08David Hoffman?

  Gone up and then held its position.

• 11:10Ryan Sean Adams?

  Exactly. And so what I sort of expected to see, if this was more kind of short-term noise, or maybe even market manipulation, was Trump's 60% fading as the days progress. And what we're seeing is some sustained lead here. So what does that tell us? I mean...

• 11:29David Hoffman?

  The more, I mean, the more volume that's coming in at these current valuations, like percentage likelihoods, just the more true the number is as according to like the market, right? But in addition to that, I think I saw this market, the Senate control after 2024, 84% chance Republicans, which obviously Donald is the far more pro crypto candidate, but I think there's a lot of consensus that it's actually really the Senate that really matters in terms of the crypto industry because the Senate is going to be the people that does or does not pass pro crypto regulation. And when the Republicans have an 84% chance, up 10% on the week, 84% chance to win the Senate, that that just bodes so well for the industry getting legislation passed that we needed to.

• 12:14Ryan Sean Adams?

  I do think that's like, think of that as like, you know, higher percentage likelihood of getting fit legislation actually through. So we understand what's a commodity and what's a security in crypto, higher percent likelihood of getting stablecoin legislation through, lower percent likelihood of having like regulators who are sort of unchecked by by laws. So you're like, definitely the election is moving in crypto's favor here. David, we got more to talk about. Kraken's Layer 2, we have all the details. Also, that monumental crypto acquisition, we'll tell you what that is. We think it's going to mainstream stablecoins. And let's get to the Michael Saylor gossip. Did he really just turn against self custody? Is he just another banker now? We'll talk about all that and more. But before we do, we want to thank the sponsor

• 12:58Ryan Sean Adams?

  that made this episode possible. Kraken, our recommended exchange for 2024. Also, the exchange that is bringing you a brand new shiny Layer 2. Let's go hear from them now.

• 13:09David Hoffman?

  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, making it simple and secure for everyone, everywhere, to trade crypto. Kraken's intuitive trading tools are designed to grow with you, empowering you to make your first or your 100th trade in just a few clicks. And there's an award-winning client support team available 24/7 to help you along the way, along with a whole ring. Of educational guides, articles and videos. With products and features like Kraken Pro and Kraken NFT Marketplace and a seamless app to bring it all together. It's really the perfect place to get your complete crypto experience. So check out the simple, secure and powerful way for everyone to trade crypto.

• 13:53David Hoffman?

  Whether you're a complete beginner or a seasoned pro. Go to kraken.com slash bankless to see what crypto can be. Not investment advice, crypto trading involves risk of loss. Tired of juggling multiple wallets and websites just to navigate Web3? Meet Magic Eden, the home of Web3. It is becoming a super dapp where you can do everything cross-chain all in one place. They're solving UX issues by building products across every chain ecosystem. Swaps, borrowing and lending, NFTs, perps and more, all seamlessly cross-chain. Instead of hopping between countless sites and handling multiple wallets, just use Magic Eden. Save time and get to the meme coining faster. Plus, the ME token is coming out this quarter from the ME Foundation. If you've used any of their protocols, like the NFT platform, you can claim some.

• 14:34David Hoffman?

  So check out Magic Eden today and watch them become a super dapp and the home of Web3 in real time. You can get there at magiceden.io to get started. Uniswap Wallet is officially the preferred wallet of Bankless. And it's the one we use anytime when we want to transact on-chain. Whether you're on your browser or on the go, Uniswap Wallet makes it easier than ever to swap anytime, anywhere. Use your wallet to transfer funds directly from a top centralized exchange and tapping thousands of tokens across Ethereum and over 10 other chains like Base, Arbitrum and Optimism. Uniswap Wallet delivers deep liquidity, fast execution and reliable quotes with zero gas swaps through Uniswap X. And when it comes to security, you can rest easy knowing it's backed by Uniswap Labs, one of the most trusted teams in DeFi. Their code is open source and independently reviewed, so you know it's protected. So why wait?

• 15:17David Hoffman?

  Download the Uniswap Wallet today on Chrome, iOS and Android. And don't forget to claim your free uni.eth username directly in the mobile wallet. Start swapping smarter with Uniswap. Introducing INC, the brand new OP stack, Layer 2 out of Kraken. Kraken's going on-chain and they're doing it with their chain called INC. That testnet is coming in 17 days with mainnet coming in Q1 2025.

• 15:40Ryan Sean Adams?

  It's cool. They're actually introducing this at a dev con. So they're gonna have hackathons, that sort of thing. So really getting right into the Ethereum community. Of course, we've been waiting. There's been rumor for a very long time that Kraken was going to launch a Layer 2. And there was rumor of them discussing, like, talking to various Layer 2 solution providers. And it looks like they've been doing that for the past year, David. This isn't just coming out of the blue. They're coming out with an announcement, and they're like, "Yeah, we're like, a week or two away from a testnet, and we're gonna launch mainnet in Q1." So why is this a big deal? It's a big deal first, because this is a total win for Ethereum and the Ethereum economy and kind of the Layer 2 roadmap. What we're seeing here, David, is all of the centralized exchanges, they

• 16:23Ryan Sean Adams?

  either have a Layer 2, or they have a plan to launch a Layer 2. I mean, the one outlier is Binance, who has its own kind of like Layer 1 chain. But you wonder what the trajectory of that is when everyone else is building out a Layer 2. So they're bootstrapping security and decentralization from the Ethereum network. So that's bullish. And this is something that we'd long hoped for and long predicted at Bankless, that all of the crypto banks, we call them, the centralized exchanges of the world, would actually start to move more and more on-chain, with the eventual destination of all their assets, and their order books are fully on-chain as well. I mean, that's a long time out, but you could see the migration, the progression here. Base has its own Layer 2. Crypto.com with

• 17:05Ryan Sean Adams?

  Kronos has their own Layer 2. That's on the ZK sync stack. OKX has a Layer 2 as well, and this is Kraken joining their ranks. A few cool things about this, that I think are cool, anyway. It's gonna be on the superchain. So that's gonna be a very interesting cohort. You already have Base there. You have Unichain there, which has just announced earlier this month. You have Zora there. You have an interesting amalgamation of other Layer 2s, and a lot of liquidity, a lot of centralized exchange liquidity, the largest decentralized exchange with Uniswap being there as well. I think that's going to be very interesting. And it positions both Kraken and Coinbase on the same ecosystem, in the same economic zone. In the same family. Yeah. So what are they doing?

• 17:49Ryan Sean Adams?

  Well, they're not quite competing against each other inside of the superchain. They're sharing liquidity because across the superchain, all of this liquidity, we were talking to Ben from Optimism yesterday. It's all going to be shared. And so what feels fragmented right now on the superchain is going to like come together and feel like one single chain. And so it's an interesting position for both Base and Coinbase's L2 and Kraken to have kind of an all boats rise type scenario where what's good for Base is good for Inc. And what's good for Inc. is good for Base. I love that dimension of it, and I think that's going to be interesting to watch. Of course, they're bringing the Kraken devs with them. We're talking to the lead of this project. His name's Andrew.

• 18:31Ryan Sean Adams?

  He's got over 100 developers at Kraken, working just on Kraken on-chain exercises. So this is a big deal. First, the crypto banks with L2s, then the actual banks, the actual like real world so-called banks will have L2s. And our prediction is that every ledger in the world will eventually end up with some sort of crypto-based, you know, layer two, layer three ledger inside of the crypto ecosystem. We're all going on-chain, David.

• 18:58David Hoffman?

  We did an episode with Andrew from Inc., who I'd actually never met before, but very eloquent, really interesting to see him come out. And so Inc. is actually this, a subunit inside of the Kraken system. So independent from the Kraken organization, owned and operated by Kraken, but still independent, kind of in the same way that Base is. But then also Ben Jones from Optimism. So if you want to learn more about that, we did a podcast episode. That's probably, that's actually already out in your podcast feed. It's also on YouTube as well. Moving into crypto's largest acquisition to date. Stripe acquires a stablecoin startup called Bridge for $1.1 billion. Just blowing the water out for all previous acquisition records. So what is Bridge? Bridge allows businesses to create, store, send and accept stablecoins.

• 19:40David Hoffman?

  It was founded in 2022, which is crazy. It's $1.1 billion acquisition for a company that started just two years ago.

• 19:48Ryan Sean Adams?

  Well done, guys.

• 19:49David Hoffman?

  Really good job. From two former Coinbase executives, Zach Abrams and Sean Yu. Their intention was to compete with the Swift network and with credit cards. Honestly, pretty easy people to compete with, especially we have stablecoins on your side. Yeah. Largest acquisition for Stripe as well as the crypto industry. If you're not familiar with Stripe, it's a, just a payments company, kind of web two fintech payments company. Definitely the most valuable. Definitely one of the most valuable fintech companies in the world. It operates over 135 countries. Millions of businesses work with Stripe. If you guys ever use that little tap to pay on that little square thing, the square white thing, or you put your card into the square white, that's Stripe. It's kind of like point of sale for consumer payments for businesses on the ground.

• 20:33David Hoffman?

  And now there's this like very intimate stablecoin integrations into this Stripe vertical.

• 20:38Ryan Sean Adams?

  I think this is absolutely huge. I don't think it's hyperbole to say like Stripe is basically internet payments today. They kind of like modernized and revolutionized payments on the internet, made it super easy with kind of their set of APIs. Like everybody on the internet uses Stripe in some form or fashion. And this is a big vote of confidence for stablecoins. You have to think if Stripe is doing this, they are betting that stablecoins are going to be a big deal. Maybe they even see regulatory tailwinds on the horizon, right? And so they're looking at, well, you know, Congress in 2025 or 2026 could come up with stablecoin legislation. Yeah, we're looking at 150, 160 billion dollar stablecoin market now. You flip the switch on some legislation that goes pro-stablecoin in the US and you quickly

• 21:23Ryan Sean Adams?

  turn into like a multi-trillion dollar market for stablecoins. So all of this is hugely bullish. Zach Abrams, the co-founder of Bridge, wrote, "We started Bridge because we thought stablecoins could become a core, global, regulated payment platform and the first wave of interest of cross-border companies. Today, we're moving many billions in payment volume, but more importantly, we're now helping hundreds of developers all around the world."

• 21:46David Hoffman?

  Chris Podolski, he tweets out, "The importance of Stripe wholeheartedly embracing blockchains as a signal for other fintechs is not to be underestimated." So this is also kind of the conversation that is going around in the crypto VC land is that stablecoin deals are about to get very hot because we just had a provable exit opportunity for any VC investing in stablecoin deals. And then also you would think that like any other Stripe competitor is looking at what Stripe is doing and be like, damn, do we need to be doing that?

• 22:13Ryan Sean Adams?

  Yeah.

• 22:13David Hoffman?

  Like, how hot is that sector? Like, are we behind here? And so there's perhaps a little bit of a gold rush coming in the stablecoin startup sector. And so that's kind of been the conversation. Behind the scenes there. Moving into the drama of the week. Michael Saylor feeling some heat after he called anyone who takes self custody a paranoid crypto anarchist. If you hold your own keys, which is kind of a hot take for an industry that literally invented and has imbued deeply into its culture. The idea of self custody. Ryan, what was your reaction when you when you heard this?

• 22:45Ryan Sean Adams?

  I can't believe a Bitcoin, like a notable Bitcoiner actually said this.

• 22:49David Hoffman?

  The Bitcoiner's Bitcoiner.

• 22:51Ryan Sean Adams?

  You know, you know what? We should just play the clip so people can decide for themselves. Here's Michael Saylor being interviewed and what he says.

• 22:57Speaker 04

  If there is more Bitcoin, Bitcoins held with these third party custodians. What risk does that pose having greater supply held by fewer large institutions? Does that increase the risk of seizure and confiscation like we've seen with gold? And is that not exactly what Bitcoiners don't want to happen?

• 23:18Speaker 05

  No, I think it's the opposite. I think that when the Bitcoin is held by a bunch of crypto anarchists. Who aren't regulated entities, who don't acknowledge government or don't acknowledge taxes or don't acknowledge reporting requirements. That increases the risk of seizure. You have an OG crypto community is very hardcore about it. But if you look at where all the money is, 99.9% of the money is actually in the traditional economy.

• 23:48Speaker 04

  If you consider the Great Depression, I mean, people thought that their gold was safe and banks until the executive order of 1933. So we're not entirely safe. I mean, I know that's kind of a wild thing to suggest may happen again, but history does repeat itself. So people's Bitcoin wouldn't be entirely safe.

• 24:01Speaker 05

  People say that, but mostly it's mostly it's paranoid crypto anarchists that say that.

• 24:07Ryan Sean Adams?

  Oh, my God.

• 24:07Speaker 05

  Okay, because it's a it's a myth and a trope that goes on over and over again. But first of all, he didn't really seize the gold. People voluntarily turned in the gold. They didn't go and kick in everybody's door, arrest them, shoot them and take their gold. That never happened.

• 24:22Ryan Sean Adams?

  Well, they did make it illegal and basically send people to prison if they didn't turn in all of their gold. And this was a federal law, you know, at the time. This is pretty crazy, honestly, coming from Michael Saylor, who's the Bitcoiner of Bitcoiners, at least according to some. So let's talk about the reaction. So this is Sina from 21st Capital saying, "This is a terrible look for Saylor to become a shill for the government and banking system, and call all true Bitcoiners paranoid. Saylor is on a mission to relegate Bitcoin into an investment pet rock and halt its usage as a currency. Spooky vibes." It's interesting, too. This comes off of news we were talking about last week, where, of course, Saylor is amassing all of this Bitcoin. It's well-known that he has dollar-cost-averaged

• 25:06Ryan Sean Adams?

  his way into MicroStrategy, holding like over 1% of all Bitcoin supply. And he was talking about launching a MicroStrategy Bitcoin bank, essentially, on top of that. Well, that is not bankless at all. That is all custodied. And so, like, maybe, David, Michael Saylor is doing what's in Michael Saylor's best interest, and not in the interest of this decentralized, bankless movement that most of us are here for.

• 25:28David Hoffman?

  There are two pillars of Bitcoin that you do not violate. One, 21 million units, which Michael Saylor loves and knows and espouses. And the other is self-custody, strong property rights, permissionless custody over your assets. You have to have both. The reason why, like, actually, those fit very well together is because the inability to inflate Bitcoin is property rights over the amount of Bitcoins that you have.

• 25:53Ryan Sean Adams?

  100%.

• 25:54David Hoffman?

  But you also have to match it with actual, real property rights, the ability to hold your own Bitcoins. And Saylor just denying the other half, the other yin to the yang of Bitcoin's system, is kind of just like an affront, an offense to the idea of Bitcoin. It's sacrilege, which all the takes from the OGs repeated out this week. Eric Voorhees says, "Saylor is getting trashed for the self-custody comment, as he should." Vitalik said, "I'll happily say that I think Michael Saylor's comments are batshit insane. He seems to be explicitly arguing for a regulatory, a capture approach to protecting crypto." Eric Wall, I thought, put this meme together that I think encapsulates everyone's ideas. This meme format is the guy riding the bike who's Sticks a stick through the bike's pegs and then falls over.

• 26:36David Hoffman?

  Churchill sees the gold, Roosevelt sees the gold, Germany sees the gold, Japan sees the gold, Russia sees the gold. There's nowhere on earth you could have kept your gold. And then now in 2024, Michael Saylor says, lol, no one is going to kick down your door and seize the gold. That never happened. Fucking paranoid cyber hornets. Yeah, so kind of kind of a hot take. So there is actually some people saying, actually, this is this is positive EV from Saylor. Saylor is being listened to by the status quo, by the incumbents, by the banks, by the regulators. And this is like a good look for Bitcoin. If you have like Mr. Bitcoin saying like, oh yeah, you know, the old system is like totally fine and good. Like Bitcoiners got to pay their taxes. It's totally okay to custody it with the system as like

• 27:19David Hoffman?

  a prisoner's dilemma strategy of trying to cooperate with the system to make Bitcoin less sketchy. That's kind of the defense of Saylor, which I think kind of there's there's something there. Is that what Saylor is actually doing? Or is he actually, you know, should we take him at face value? I kind of think we should take him at face value.

• 27:38Ryan Sean Adams?

  Yeah, personally, I don't think there's anything like there. I think that this is just a little bit of Saylor bootlicking. This is the comment Mitchell Hoddle says, Saylor is willing to stomach criticism from the Maxies in order to make Bitcoin less sketchy and provide cover for institutions. That was basically the case. And he was talking about like crypto holders not paying their taxes, like self custody has nothing to do with not paying your taxes.

• 28:01David Hoffman?

  Yeah.

• 28:01Ryan Sean Adams?

  It has to do with like not having a third party have all of the like own all of the fiat and all that you get is not you. It's I mean, it's the entire purpose for Bitcoin, for crypto, for going bankless. I gotta say, it was relieving to see some of the crypto OGs, you know, like come out and and say, hey, this is not okay. By the way, Saylor kind of retracted a little bit of this. At least he had a tweet statement. I don't know if you saw that. We don't have it in the show, but he was just basically like, I support the right of all Bitcoin holders to like be self custody. He didn't exactly apologize for what he said. He just sort of, I guess, reiterated that he is supportive of self custody. So maybe he's trying to walk that back. But Bitcoiners should be wary of this type of thing. Everybody in crypto should be wary of this type of thing.

• 28:44David Hoffman?

  Culture matters.

• 28:45Ryan Sean Adams?

  Did you see? Did you see this, you know, farce satire book title? It's called The Compliance Standard.

• 28:52David Hoffman?

  Michael Saylor's biggest fans.

• 28:54Ryan Sean Adams?

  Rather than the Bitcoin standard, I think there's an element of that here. Fun fact, David, you ready for this fun fact?

• 29:00David Hoffman?

  I am ready.

• 29:01Ryan Sean Adams?

  Right now, balances of Ether on centralized exchanges are lower than Bitcoin. They continue to be lower than Bitcoin. So of all of the Ether that's out there, only 10.4% is inside of centralized exchanges. For Bitcoin, that number is actually 15%, okay? So 10% for Ether, 15% for Bitcoin, and you can see kind of like a flippanting that has happened here over time with Ether started out with more decentralized exchanges and now, you know, where we are at this point, 2024, is less in centralized exchanges and more in like decentralized exchanges and L2s and kind of like the bankless world.

• 29:41Ryan Sean Adams?

  So does this mean, David, that Ether, the asset, the monetary unit, is more bankless than Bitcoin?

• 29:48David Hoffman?

  You ready for me to, sorry, douse some water on this?

• 29:51Ryan Sean Adams?

  Sure, go ahead.

• 29:52David Hoffman?

  I'm pretty sure that this chart, we need this to be fact-checked by the listener, because I think this is true. The percentage of centralized exchange Ether that they go and stake, like Coinbase CB Ether or anything staked by Coinbase-

• 30:06Ryan Sean Adams?

  Oh, that's included here too?

• 30:07David Hoffman?

  Is not reflected in this chart.

• 30:09Ryan Sean Adams?

  Oh, they got us with the staking.

• 30:10David Hoffman?

  Yeah, they got us, yeah, so there's an anomaly there where if Ether is being staked by a centralized exchange, it doesn't count, it is being on the centralized exchange.

• 30:20Ryan Sean Adams?

  I think the, whatever metric we're using, and we should get like kind of the right metrics for this, this is a really important dimension of crypto-

• 30:28David Hoffman?

  It is, yeah.

• 30:29Ryan Sean Adams?

  Which is percent that's decentralized, the percent that's in, you know, like held by code and not by third-party institutions and intermediaries, whether this is Bitcoin or whether this is Ether or any asset, it's all about going bankless, it's all about decentralized finance. David, we got a lot coming up next. The Scroll airdrop is live, so of course, everyone is really happy with this and grateful. How's the token doing? And who got it? Also, the WorldCoin L2 has launched, what is this about? So not just Kraken on the week, but WorldCoin with that L2, and some uplifting news about the Binance exec who was stuck- In a Nigerian jail, we'll get to all that and more. Before we do, we want to thank the sponsors that made this episode possible.

• 31:09David Hoffman?

  New projects are coming online to the Mantle Layer 2 every single week. Why is this happening? 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 Rewards 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.

• 31:54David Hoffman?

  Imagine a future where AI and blockchain converge, where decentralized intelligence operates transparently with Web3 infrastructure, unlocking boundless human potential. And that future is here with Zero Gravity, the first decentralized AI operating system. Zero Gravity isn't just faster, it's 50,000 times faster and 100 times more cost efficient than current alternatives, unleashing the power of high data applications and modular AI. With unrivaled throughput, limitless scalability, and a verified AI framework, Zero Gravity is turning the dream of on-chain AI into reality. Curious about how AI and Web3 can reshape the future? You can visit zero-g.ai to explore the infrastructure as revolutionizing decentralized AI.

• 32:38David Hoffman?

  Pretty cool announcement out of the world of Across and Uniswap. Uniswap in the app and also in their wallet has integrated Across kind of directly into their front end and then also when the transaction is made into the transaction itself. And so Across's intent-based bridging has now gone directly into the Uniswap swapping. And so you can swap and bridge right into Uniswap inside of the app. And this is overall a part of the story of Ethereum's Layer 2s kind of just being woven together by various different technologies, this one being Across and Intense. And it's also pretty cool if you want to go from Layer 2 to Layer 2. At least the one that they showed in the demo from Arbitrum to Optimism, 2 seconds and 2 cents.

• 33:19David Hoffman?

  And so this is a bridging standard, a bridging solution being integrated right into Uniswap, Ethereum's biggest exchange. And I would just imagine this is kind of actually the first step. We can see this today because people who are using Uniswap kind of know a thing or two about bridging and all this stuff. And now that solution, rather than, because usually I would have to go to Uniswap and then over to Across. And now these two solutions, these two products are being collapsed together. And I think as we go on, even more abstraction layers just kind of smooth this entire process over.

• 33:51Ryan Sean Adams?

  I've always wondered to what extent Ethereum's fragmentation problem would be quote unquote solved just by like Intens. You were talking about bridges just a minute ago. And like by that, you meant like Across's particular, your take on bridging and getting assets from one place to another, one chain to another is through using Intens. And we've talked about Intens for like a while now, probably 18 months plus. But to see them go into production and some standardization around this, because correct me if I'm wrong. I think the next step is a ERC 7683 standard that's co-authored by both Uniswap Labs and Across. I expect that to be widely deployed across the superchain and then probably picked up by other Layer 2 environments.

• 34:35Ryan Sean Adams?

  Anyway, I'm kind of like wondering to what extent you think Intens will just basically solve the fragmentation problem. I don't think it'll get us to 100%, but there could be the case, if you see standards like this widely deployed, that it gets to like 70, 80%. And again, the feeling for the user is just like the chain is fully abstracted. You know, like my asset can move from here to here in three seconds. That's what Across and Uniswap is doing right now. And like it won't feel like you're crossing over bridges because Intens is kind of like, you know, solving the gaps in between.

• 35:07David Hoffman?

  I think that Intense and a few other interrupt standards solutions start to fill in Ethereum's fragmentation from like the top down, as in like the kind of the top of the tech stack. And then there's also some like bottom up solutions as well. They're literally talking about the bottom of the tech stack is in the Ethereum protocol. And so some snarking needs to be added to the Ethereum layer one. We need to increase the capacity of the Ethereum layer one. And all of a sudden, the solutions that are higher up, these interrupt standards, these Intense, all just work more effectively. And we just kind of just start to fill in the gaps between all of these different chains. And then ultimately, everything just gets completely fixed, completely defragmented by the cosmetic layer, which is just the app layer.

• 35:47Ryan Sean Adams?

  Scroll's first airdrop is here. Let's talk about this for a minute. So what happened this week? What is Scroll for people who don't know? This is another layer two. They're not an optimistic roll up. This is a ZK roll up. What's unique about Scroll?

• 36:03David Hoffman?

  So as we have enjoyed EVM equivalency across many of the other optimistic rollups like Arbitrum and Optimism, this is the first ZK EVM that is one to one equivalent with all the other smart contracts that have ever been built and deployed, including all the toolings around the Ethereum ecosystem. So they just announced their SCR, their Scroll airdrop. So with a total supply of 1 billion Scroll, we have 190 million Scroll in circulation from the airdrop. It's clocking in at just under a billion dollar fully diluted valuation with 177 million dollar market cap, priced currently clocking in at 93 cents. So who receives the airdrop? There has been a very long like airdrop farming campaign, just to

• 36:43David Hoffman?

  earn marks, which is kind of their points. 570,000 wallets will receive 5.5% of the token supply. And so there, of course, were eligible participants from ecosystem projects, industry contributors, pretty standard airdrop campaign. The airdrop claim is open on October 22nd, which was two days ago. You can go to claim.scroll.io or you can go to banklistclaimables, bankless.com/claimables to see if you earned a Scroll airdrop. That claim period is open for 90 days. So do not forget. That's why we have Bankless Claimables. And so you guys have 90 days to claim your scroll airdrop if you received any of the marks. There were some complaints, as there are, Ryan, for all airdrops.

• 37:27Ryan Sean Adams?

  Especially now, in these times.

• 37:30David Hoffman?

  A, an account put, so yeah, there's some analysis about who got what. Apparently, 100, the top 100 whales farmed 30% of all of the marks, which kind of compressed what the long tail was able to receive. A wallet with about 1,000 marks, again, points, will get about $98. And the claim here is that some of the whales were able to just game the game, sucked up so much of the supply, leaving very little for the long tail. But this is also the same story that we've seen with every single airdrop. We know that the airdrop meta is broken. Scroll has been doing their, their point farming systems and even before we all realized that the airdrop mechanism was broken. And I remember we did this episode titled "This Cycle Is Cooked",

• 38:14David Hoffman?

  talking about this, like, era of token distributions. There's always eras of token distributions. Points farming in airdrops seems to have been cooked. One of the complainers was pretty straightforward, who talked about this, saying, "Seeing Scroll launch at a $240 million market cap, it's down since then. Shows me that the universe is healing. Every VC in their latest round is down 30% from their initial investment. By the way, I farmed Scroll with 300 wallets and passed their scribble flawlessly. Perhaps one of the guys contributing to the ending of this meta. I still fudged them the last of all before bothering to claim my tokens sometimes. Only sometimes it's more important that your enemies lose than you win." This is the people that, the kind of people that we're rewarding with this airdrop meta.

• 38:57David Hoffman?

  Please move on from airdrops. We need to find a better way.

• 39:00Ryan Sean Adams?

  These accounts are so blatant about it. They're like,

• 39:03David Hoffman?

  "So bad."

• 39:04Ryan Sean Adams?

  "This is such a scam and haha, I was one of the scammers."

• 39:06David Hoffman?

  And I'm like, "You guys let me scam you. This is your fault."

• 39:09Ryan Sean Adams?

  Yeah, like, "Haha, suckers." That's why this meta is so cooked.

• 39:12David Hoffman?

  It's also one thing that was pretty interesting. It actually heated up Ethereum blobs. So while people were claiming all of their scroll tokens, blob capacity, blob consumption jumped up. And so we had about like 12 hours, maybe even 18 hours of blob contention.

• 39:28Ryan Sean Adams?

  Price discovery?

• 39:29David Hoffman?

  Price discovery for blobs. Blobs started to get sold by these different layer twos. I think Ethereum collected something like $15,000 during this era from layer twos buying layer one blobs.

• 39:41Ryan Sean Adams?

  Ethan's back, David. Now you crawl. It's a bird.

• 39:45David Hoffman?

  We fixed ether.

• 39:47David Hoffman?

  That has since gone down. We are now once again below the blob target, which is good. It's like, in my opinion, way too early to be selling blobs. I personally want to sell blobs for free for years.

• 39:58Ryan Sean Adams?

  You do. You're a free blob guy.

• 40:00David Hoffman?

  It's cool to see that, like, you know, the pricing mechanism, the pricing mechanism of blobs actually does need to get fixed, but like, Layer 2s are buying blobs, can buy blobs, will pay Ether, the Layer 1 Protocol, for blobs. But like, right now, we have a target of 3 blobs. In the future, we need to target, we are going to target in the Ethereum Protocol 256 blobs. I hope blobs stay free until then, because I want more Layer 2s buying more blobs. I want Ethereum Settlement Network to expand. How many orders of magnitude is that? 2 orders of magnitude, from 3 to 256, almost orders of magnitude. Because that's the Rollup Centric roadmap. I want all of the settlement networks to layer, to settle down to Ethereum. Then we can start talking about blob price discovery.

• 40:43David Hoffman?

  But you can only imagine when there is 256 blob targets being consumed by, you know, bajillions of Layer 2s, how much net blob demand there might be. This is a small taste of that future. We don't want that future to happen yet. We want to do some penetrative pricing in the blob market, is what we're seeing today.

• 41:01Ryan Sean Adams?

  It's actually hilarious to me how the market can interpret this bearish if it wants, or can interpret this bullish. And it's like, really up to you as an investor. You can either interpret what's going on with Ethereum and it's not burning anymore because blobs are very cheap. You can either think that's like bullish for Ether, the asset, or you could think that it's bearish for Ether, the asset, because it's not accruing value at any point, at this point in time, right? And so, it's just like the market sentiment that we're in. I feel like Ethereum's having a hard time on the narrative side, like, winning, right? So, you know, now people are pointing to blob space being consumed, and they're like, "Well, there's not enough blob space." Or they're looking at the 15K burned, and they're like, "Just 15K? What a joke of an asset." You know what I mean?

• 41:46Ryan Sean Adams?

  Like, it's just, it's funny how this can be interpreted multiple ways. My chosen interpretation, right, is that, similar to yours, this goes in cycles. Ethereum blob space is going to get cheap, penetrative pricing. You get L2s kind of hooked into the network effect of Ethereum. And then Ether is exported as a monetary asset. ETH is money. And it's net beneficial for all of crypto because we have decentralized chains and also ETH as a monetary asset inside of these Layer 2 economies. You know, this is good for Ether. Whether it is burning at the moment or not, that's my chosen interpretation. But others are super bearish, like, for whatever reason. Oh, you're like, we're going to expand more blob space, more L2s to take all of the Ethereum's users.

• 42:31Ryan Sean Adams?

  And this is bad for ETH, blah, blah, blah, blah, blah. So we're kind of almost like done with the debate here. We'll just see what happens.

• 42:38David Hoffman?

  Yeah, like you said at the beginning, it's conviction time. We have the data, we've had the conversations, we've had the debates. Now we're just seeing them to play out. All right, so Kraken announced Inc. their Layer 2. Scroll launched their airdrop. And now WorldCoin launches the WorldChain Layer 2, built once again as an OP stack chain inside of the SuperChain. SuperChain kind of just like collecting some dubs left and right here. But this is actually definitely one of the more interesting Layer 2s. And it's going to use Ref, the client out of Paradigm, the Georgios Konstantopoulos client.

• 43:10Ryan Sean Adams?

  It's like a hyperscale ETH client, right? EVM client.

• 43:12David Hoffman?

  Yep, super scalable.

• 43:14Ryan Sean Adams?

  Smart.

• 43:14David Hoffman?

  ETH will be the native token. But users can pay fees using the WorldCoin token WLD as well. But also, interestingly, I think this is the coolest thing. World ID holders, people that have the World ID app and have scanned their eyeball, will have priority access to block space. So it's human-reserved block space.

• 43:35Ryan Sean Adams?

  Oh, humans get the advantage, huh?

• 43:37David Hoffman?

  Humans get to front run the bots, yeah. And there's an allowance for some free gas for a transaction. So if you are verified human, you get an allowance of free gas to transact on the WorldChain. Ryan, do you know how many users there are of World ID? How many World ID people have? Have scan their eyeball and have the app.

• 43:57Ryan Sean Adams?

  I do, because I'm looking right at the number in my notes, David. But I didn't before this, so why don't you tell me?

• 44:01David Hoffman?

  Seven million. There are seven million.

• 44:04Ryan Sean Adams?

  That's a lot.

• 44:04David Hoffman?

  World ID holders. Yeah, and so this has always been the strategy of WorldCoin is you pay for the token, you pay a token to get people to scan their eyeballs, download the app, and then get on chain.

• 44:15Ryan Sean Adams?

  It's still, whenever you say scan their eyeballs.

• 44:17David Hoffman?

  Scan the eyeballs, yeah.

• 44:18Ryan Sean Adams?

  It sounds so like dystopian and sketchy. Have you been orbed yet? Have you gotten an orb?

• 44:22David Hoffman?

  I have not been orbed. My policy, my personal policy is that I will not be orbed until there's a very large incentive for me to get on WorldChain. And as soon as there's a good reason for me to get on WorldChain, I'll go get my eyeballs scanned.

• 44:34Ryan Sean Adams?

  Oh, yeah.

• 44:34David Hoffman?

  But right now.

• 44:35Ryan Sean Adams?

  You're not worried about kind of the privacy of it? Or like, you don't think it's like biometric, you know, dystopia and the whole idea of getting orbed?

• 44:42David Hoffman?

  No, I think the technology checks out. I mean, I'm not a ZK expert, but like, I do believe in the ethos, yeah, they ZK wrap the privacy. Like, what are they gonna do with my eyeball? Like, they can't do anything.

• 44:54Ryan Sean Adams?

  Yeah, your eyeballs are already on the internet in all sorts of ways, probably, right?

• 44:57David Hoffman?

  I accidentally signed up for Clear one time, like, I know that was a mistake.

• 45:00Ryan Sean Adams?

  It's like, you know, the 23andMe, like, you get your DNA tested, and that sounds like a really bad thing. Oh, my God, some third-party company has my DNA. And like, you know, I agree with that. Like, I understand why that feels really bad. And yet, also, like, somebody could grab my DNA, extract my DNA, if I just like, you know, leave a skin imprint on a glass that I use at a restaurant or something like this, or a follicle of my hair falls, and they have my DNA that way. I don't know, I think there's an argument for dystopia, of course, of like, one, WorldID, and it's like run by corporations. If we can keep it decentralized, like, maybe that's not so bad.

• 45:37David Hoffman?

  It's the same thing with Layer 2s and fraud proofs and being a Stage 2 is like, you're like, sure, the sequencer can suppress your transaction, but you always have your property rights. It's just like, you use fraud proofs, you use zero-knowledge proofs to have strong assurances, and it's the same thing with your eyeball. You get your eyeballs scanned, and you have the assurances of ZK that no one can do anything evil with it.

• 45:56Ryan Sean Adams?

  Yeah, and I might be more worried at this point in time, in the dystopia that's coming from a different direction of like, I have no idea who's a bot and who's a human online. Right?

• 46:05David Hoffman?

  Right.

• 46:05Ryan Sean Adams?

  And now we have like, you know, AI agents that are spinning up meme coins. You don't, I don't fully know whether that thing is, that's another story. But that thing is human operated or not. And like, who are the humans and who are the bots? You could have a dystopia that way if we can't separate, if we don't have a proof of humanity without a passport. So, uh, there you go. That, okay. One thing that's interesting though, I want to ask you. So WorldCoin is going to be in the superchain along with Kraken Inc., along with Base, along with Uniswap.

• 46:32David Hoffman?

  Zora.

• 46:33Ryan Sean Adams?

  And so if the world chain specializes in kind of like decentralized proof of humanity, that's going to be available to this growing network of chains and economies inside of the superchain. You could come up with some really interesting primitives that way. Shared liquidity across all of them. I mean, once they fix the interop fragmentation problem, that could be a pretty interesting sector.

• 46:55David Hoffman?

  So world, the world ID app used to integrate with OP mainnet. It used to, actually, I can't remember the, the number, somebody fact check on me on this, but the like share of transactions on OP mainnet that were WorldCoin was something like 60 or 70%. Like stablecoin transfers, uh, world ID like setups. That's why they're starting up their own chain because they have their, want their own sovereign blockchain. Uh, and like the same pattern of, so like the, the world ID, world chain is taking all their transactions away from OP mainnet and they're taking it on to world chain.

• 47:26Ryan Sean Adams?

  Yep.

• 47:27David Hoffman?

  And it's the same pattern of just like the Ethereum layer one is getting, is being, uh, layer twos are parasitic to the Ethereum layer one. Superchain chains are parasitic to the OP mainnet because they're all deploying their superchain chain. Uh, but the one difference is that all superchain chains do pay 15% of sequencer fees to the OP mainnet. And so OP mainnet does have their take rate, their 15% take rate that the Ethereum layer one does not. But the Ethereum layer one, as a credibly neutral settlement layer, just takes the blob fees, which again are free right now. It's the same pattern. It's a fractal pattern.

• 48:01Ryan Sean Adams?

  Yes.

• 48:01David Hoffman?

  Of these chains settling on chains, settling on chains.

• 48:04Ryan Sean Adams?

  Yes, yes. And like, look at kind of the upside, right? So you're just talking about value accrual of like, you know, um, that may be going away or being diluted for ETH holders. But on the same token, Eight million?

• 48:18David Hoffman?

  Mm-hmm.

• 48:18Ryan Sean Adams?

  Users? It's not users, yeah, because they're not fully on-chain, but like, potential users? Growing to 100 million, growing to, who knows? How many, like, WorldChain is going to onboard? And having ETH as a monetary unit inside of that chain? I mean, I just think that's like, net bullish for ETH. When you're asking the question of where are all the users? And you have eight million potential users of WorldChain. So, yo, that's the trade-off here. Let me take you to central bankers, David, because they... You know the "first they ignore you, then they laugh at you"?

• 48:51David Hoffman?

  It's not a line that I enjoy.

• 48:53Ryan Sean Adams?

  Well, "first they ignore you, then they laugh at you, then they fight you, then you win." I think we are getting even closer to the "then they fight you" phase. There were two interesting papers released this week. One by the European Central Bank that claimed that those who acquired Bitcoin at an earlier date, basically it was an unfair system because it would... "Nonholders should recognize," they said, "that Bitcoin's rise is fueled by wealth redistribution at their expense. There are compelling reasons to advocate for policies that curb Bitcoin's growth or even eliminate it. The stakes are high. Pro-Bitcoin politicians could skew wealth distribution further, threatening societal stability if nonholders don't push back." So, this is a European central banker, authoring a paper that's saying, basically, like, "hard

• 49:36Ryan Sean Adams?

  money, strong property rights outside of the hands of the central bankers and the nation-state is like, we can't move the dials as much on wealth redistribution." So, they're kind of like, waking up and realizing that. Simultaneously, last week, I thought this was a really interesting paper from the Federal Reserve Bank of Minneapolis. Recall, the Federal Reserve Bank has all of these kind of like, regional chapters, and this is one of them. And they produced a paper that suggested that assets like Bitcoin should be taxed or banned in order to help governments maintain deficits. Help them maintain... This is them staying the quiet part out loud again. So, they said, "In an economy where the government tries to maintain permanent deficits using nominal debt, Bitcoin creates problems for policy implementation."

• 50:21Ryan Sean Adams?

  And this is a quote, "It introduces balanced budget trap, an alternative state where the government is forced to balance its budget."

• 50:29David Hoffman?

  An alternative where the government is forced to balance its budget. We have to balance our budget? Oh, no.

• 50:36Ryan Sean Adams?

  And so what do they recommend in their conclusion? They recommend, and this is a quote, "A legal prohibition against Bitcoin that can restore unique implementation of permanent primary deficits." Or also, "A direct tax on Bitcoin." They're basically saying like, hey, if this whole crypto Bitcoin thing takes off, then we lose the ability to-

• 50:59David Hoffman?

  To print money.

• 51:00Ryan Sean Adams?

  Run this thing at deficit and print money. And it's like, yeah, that's what we've been saying.

• 51:04David Hoffman?

  Yeah, yeah. That's why we're here.

• 51:07Ryan Sean Adams?

  That's what we've been saying the entire time. But at first, they were ignoring it. Then they were kind of laughing at it. And now, I think, we are moving, this is week by week, we'll see this, and probably over years, and maybe over decades, the central bankers are like, oh, shoot, this is picking up. This is actually working. And they'll shift more into the "now they fight us" face. We'll see how that goes.

• 51:27David Hoffman?

  I just love it when we watch like, nation-state and powers-that-be just like, tussle with this idea of Bitcoin. Remember that quote like, two or three weeks ago, where the, one of the risks of the IMF saw of Bitcoin El Salvador is that like, we need to control public access to Bitcoin?

• 51:45Ryan Sean Adams?

  Yeah.

• 51:46David Hoffman?

  You just think that you can do that? Like, the statements that they're making just are just super indicative of exactly the thesis of permissionless finance, permissionless money, money on the internet. And it's just like, you guys are just saying this?

• 52:00Ryan Sean Adams?

  Yeah, I can't believe they're saying this out loud. Like, I thought this was all in smoke-filled rooms, but nope, they're actually saying that this will allow them to no longer print as much money as they want to.

• 52:10David Hoffman?

  That's so funny. All right, a tale of two governments, a tale of two powers-that-be. On the flip side of things, the city of Buenos Aires, which has 3.6 million citizens, by the way, is the first city to issue digital IDs to its citizens. So there is this application, app, called Quark ID, inside of Buenos Aires. It's a local app for accessing municipal services, documents, documents like your birth records, documents like healthcare records, driver's license. And so all of this is going on chain with verifiable credentials and ZK proofs to let users show that a document has indeed been authenticated by the government without disclosing the information that is relevant to the task at hand. I love that use case of ZK.

• 52:52David Hoffman?

  The classic example of like, okay, like, why, how can zero knowledge proofs be used to help people in their daily lives? The classic example is when I'm going up to a bar and they say, ID, please, let me check if you're 20, 21 years old or not. What do they also getting with my ID? They're getting my name, my last name, my birth, my, my birth date, my address. Your photo. My, my photo. Your eyes, they're orbiting you basically. Eyes, yeah. And all they need to know is this binary, are you over or not over 21? That's the only thing that they need to know. You disclose all this extra information, mainly your address being the big one. Yep. And so ZK proofs has been like, well, you can actually just submit a proof, ZK proof, to tell somebody if you are, are indeed over or not over 21 years old. They don't need to know all of the rest of the information. It's just a binary,

• 53:37David Hoffman?

  yes, is over 21 or no is not. Yes, correct. And this is what is being rolled out to 3.6 million citizens of Buenos Aires. So what kind of documents can be stored there? They say over 60 different types, birth certificates, gross income taxes, vaccination data. But also importantly, no third party, not even the municipality of Buenos Aires, has control over the documents. So the documents are trustless. So cool. They're trustless. Once they are issued by the government, they are bearer assets by the, by the account that controls them. Thank you. Thanks to the ZK proofs. Thanks to the ZK proof system, user data is protected against identity theft and data tampering, which is so sick. All of this is deployed

• 54:17David Hoffman?

  on ZK Sync. I think one of the, one of the cooler wins of the crypto industry coming out of ZK Sync here. My prediction here, this is on ZK Sync era. I think Quark ID is going to eventually in the future, this is my hypothesis, my, my prediction, Quark ID will make the Quark ID ZK chain on the elastic chain. And then we will have the chain for Buenos Aires and then therefore Argentina. Argentina's getting a chain. And protecting citizen privacy at kind of the, the base level. You know, one of the most dystopian things?

• 54:48Ryan Sean Adams?

  I do in like modern life is and I must do this like multiple times a month now. Whenever I'm like moving money with like TradFi or like getting, you know, credit investor or something like this. You have to do the selfie of yourself and you submit your driver's license or your passport. And they do the selfie of yourself and they get you to turn left, turn right, like they scan your face. And this is going to some third party company. I have no idea. Probably in China. They have all of this information about me, my passport, my life, my driver's license is just basically everywhere. And like they have a perfect scan of my face too. I mean, if we have ZK cryptography, you don't need to share any of that information.

• 55:29Ryan Sean Adams?

  It can just cryptographically check whether I am, you know, AML KYC or and you know, like resident of the US or not. I don't have to share all of that information. This is such an upgrade and this is going to protect us from so many like privacy failures of the modern internet. And like the modern digital landscape that it's very bullish. Who says crypto doesn't have real world utility, David? Okay. It's not just about number go up here.

• 55:54David Hoffman?

  At Bankless, we say we want to help you front run the opportunity. I actually did an interview with the leader of the Cork ID effort, Diego Fernandez, who is the Secretary of Innovation for Buenos Aires. He's like right next to Javier Malé back in January because we like to front run the opportunity here on Bankless. So if you've listened to that, you kind of saw this coming from a long way off. If you are curious about what's going on there, there is a link in the show notes to get that done, to watch that.

• 56:19Ryan Sean Adams?

  Some uplifting news to close us off on the week. I was so glad to see this. So Nigeria has dropped the money laundering charges against the Binance exec Tigren Gambirian, who was stuck in jail in absolutely atrocious conditions. He's been stuck in jail for seven months. His health was affected. I mean, last time like people saw him in a, in a clip, a video clip, he's like walking with a limp. Anyway, a lawyer representing Nigeria's government prosecution said that Tigren wasn't serving a key role at Binance. Finally, they're admitting this and they were going to let him out and drop the charges. This is after almost eight. Months being held in custody in a Nigerian jail cell. But thankfully, this comes to an end now.

• 57:04Ryan Sean Adams?

  I'm not sure what kind of pressure was pushed behind the scenes to actually make this happen. I'm sure there's a lot of folks that were involved, hopefully in the US government side of things.

• 57:13David Hoffman?

  Hopefully, we did something.

• 57:14Ryan Sean Adams?

  Yeah, certainly Binance was pressing for this the entire time. And from my perspective, Tigre was basically a political captive. He was just nabbed because what? The Nigerian government didn't want Binance doing things messing with their fiat system, messing with their banking system, giving citizens economic freedom. They were doing the kind of the central banker thing that we were talking about, which is probably coming to many economies. Anyway, great news there, somewhat uplifting way to end the week.

• 57:44David Hoffman?

  And that's all the news of the week. We don't really have a meme of the week. We kind of have a tweet of the week. I didn't put this in the agenda. One of the Bankless team members did, but this is a tweet from me. Because of course ETH price comparatively not great compared to Bitcoin, not great compared to Sol. And so I tweeted out, when I invested my entire net worth into Ether in 2018, it was under the thesis that most other crypto market participants are dumb and wrong. And I'm grateful to have a second opportunity to do that all over again. And that's kind of what I feel. ETH hasn't been this contrarian, I think, since 2018 and 2019. And it's starting to kind of feel like that level of contrariness once again.

• 58:26David Hoffman?

  And I think that's pretty cool because it feels comfy, feels like I'm at home.

• 58:31Ryan Sean Adams?

  David ending the week with some ETH conviction here. I got to imagine this tweet was not very popular on that app that people call Twitter, right? I'm sure.

• 58:39David Hoffman?

  Well, Twitter's pastime, crypto Twitter's pastime is just like harping on Bankless from like whatever corner. Like if you're an Ethereum, you harp on Bankless. If you're a Solana person, you harp on Bankless. If you're a Bitcoiner, you harp on Bankless. I'm just honored that Bankless has so much contention about it. People really care one way or another.

• 58:55Ryan Sean Adams?

  Yep, that's right. Well, Bankless Nation, thank you for joining us on the week. We appreciate it. As always, got to end with this. You know crypto is risky. You could lose what you put in. None of this was investment advice. You can't take. ...conviction and make it yours. You can't copy trade that, right, David? That's right. But we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the Bankless journey. Thanks a lot.