ROLLUP: Fed Pivot | Ledger Scare | New Warren Bill | Airdrop Szn

Bankless Weekly Rollup 2nd Week of December 2023 ----- 🏹 Airdrop Hunter is HERE, join your first HUNT today https://bankless.cc/JoinYourFirstHUNT ----- 🌐 Layer Zero V2 Launch https://bankless.cc/LayerZeroLabs ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE ⁠https://k.xyz/bankless-pod-q2 ⁠ 🦊METAMASK PORTFOLIO | MANAGE YOUR WEB3 EVERYTHING ⁠https://bankless.cc/MetaMask ⚖️ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum ⁠ 🔗CELO | CEL2 COMING SOON https://bankless.cc/Celo 🗣️TOKU | CRYPTO EMPLOYMENT SOLUTION https://bankless.cc/Toku ------ TIMESTAMPS & Resources 0:00 Intro 3:55 Markets https://blockworks.co/news/satoshi-nakamoto-last-online https://ultrasound.money/ https://www.coingecko.com/en/global-charts https://l2beat.com/scaling/summary https://www.coingecko.com/ 11:55 The Fed Pivots & Predictions https://www.nytimes.com/2023/12/13/business/economy/federal-reserve-interest-rates.html https://www.bloomberg.com/news/newsletters/2023-12-13/fed-s-powell-leans-into-rate-cuts-stok https://x.com/BloombergTV/status/1735029792511082982 https://imgur.com/UR6UhrA https://imgur.com/gJeKA0J https://twitter.com/twobitidiot/status/1733315999615574391 https://twitter.com/RasterlyRock/status/1734956139580936658 22:53 Airdrop Szn https://x.com/StarknetFndn/status/1733101666357100992 https://x.com/LayerZero_Labs/status/1732862812710449466 https://x.com/TrustlessState/status/1730623451323322383 https://www.coingecko.com/en/coins/celestia https://x.com/wronguser000/status/1734894958497181939 https://x.com/RyanSAdams/status/1733244396303163462 27:52 Ledger Scare https://x.com/bantg/status/1735279127752540465 https://x.com/hudsonjameson/status/1735283602340843757 https://twitter.com/Mudit__Gupta/status/1735301007188406681 32:00 Elizabeth Warren Bill https://x.com/BitcoinMagazine/status/1732844381143539725 https://twitter.com/NeerajKA/status/1734305528187109584 41:09 Pudgy World https://twitter.com/pudgypenguins/status/1733672528453705819 https://www.pudgyworld.com/ https://twitter.com/icebergy_/status/1733682163692769491 42:54 Coinbase’s Project Diamond https://www.coinbase.com/blog/coinbase-and-coinbase-asset-management-announce-project-diamond-a-smart https://blockworks.co/news/coinbase-responsible-defi-development 45:00 VanEck $HODL BTC ETF https://x.com/EricBalchunas/status/1733126301622435881 46:42 Cheap L2s https://twitter.com/EclipseFND/status/1734966671457329478 https://x.com/Immutable/status/173505808602364326 49:00 The IRS wants $24B from FTX… BEFORE the creditors https://www.theblock.co/post/267102/ftx-says-irs-demand-for-24-billion-in-unpaid-taxes-is-delaying-recovery-of-user-funds https://twitter.com/mdudas/status/1734323699187155171 https://x.com/GaryGensler/status/1733231711725527217 55:23 Meme of The Week https://imgur.com/GE7iZOL https://twitter.com/route2fi/status/1733250454560141455 57:29 Closing & Disclaimers https://bankless.com/disclosures ------ Not financial or tax advice. See our investment disclosures here: https://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?

  I do enjoy, Ryan, the timing of the Fed pivot that's happening, that we're calling it, that is right before the Bitcoin happening, right before the Bitcoin ETF approval. The stars are aligning in a very big way.

• 0:12Ryan Sean Adams?

  The money printer is getting ready to fire back up.

• 0:18Ryan Sean Adams?

  Bankless Nation, it is the third Friday of December. It's Friday morning. That means it's time for your weekly rollup. David, what do we have in store for him?

• 0:26David Hoffman?

  We got the Fed pivot! What does that mean for risk assets? I think we know. We'll talk about the details. Did we really get the Fed pivot? We'll understand why. We'll unpack why we think that. And also, airdrops. It's airdrop season. Some hotly anticipated airdrops have been confirmed, some more than confirmed with plenty of details, so we'll go into that as well. Ryan, what do we got after that?

• 0:49Ryan Sean Adams?

  Liz Warren wants to ban crypto in the US, and she doesn't care who knows at this point, David, so we're going to talk about that. And pudgy penguins, they're doing some things on Layer 2s and in the metaverse, including some things around number go up, so we'll talk about that. And that's not the only Layer 2 stuff. What else, David?

• 1:05David Hoffman?

  Coinbase turning its base chain into a real-world asset chain 2. We're going to get some new types of assets going onto base chain with some of the efforts out of Coinbase. All of this and more. And it's very, very bullish, Ryan. We got the Fed pivot. This very, very bullish weekly rollup. But first, we're going to talk to our friends over at Layer Zero, who just announced Layer Zero V2 as of this morning, this morning of recording, Thursday. And there are details for you awaiting with unified semantics, which, if you're a developer, you probably know what that is. I don't. But developers can build applications on any supported chain and can retain complete control over security. There is a brand-new 14-minute video that I watched, Ryan, of Brian, the co-founder

• 1:47David Hoffman?

  of Layer Zero, that is on their pinned tweet at their Twitter, @LayerZero_Labs. There is a link in the show notes. If you want to just learn something about bridges, it's a super educational video. And so, I mean, I know a decent amount about bridges, but yeah, even I learned a thing or two watching this. And so, that is the call to action. Go click the link in the show notes to go learn about bridges from Brian Pellegrino himself.

• 2:10Ryan Sean Adams?

  Well, actually, this gets a big endorsement. I saw this this week from Eric Voorhees, because they're talking here about a censorship-resistant, permissionless, and immutable omni-chain interoperability protocol. That's what Layer 0 is purporting to be. And, you know, Eric Voorhees giving the standing clap around that. So yeah, go check out that video, guys. All right, David, before we get into markets, I gotta say, I saw these videos and images on crypto Twitter this week. And this is what, so David is not recording from his regular location in New York City, in Brooklyn. You are actually recording probably, I think this is from your house in Seattle.

• 2:48David Hoffman?

  I'm back home in Seattle. Yeah, so I took a little detour up in Banff to, before coming here. So me and Hart Lambert from across.

• 2:57Ryan Sean Adams?

  Is crypto not risky enough for you, David? What are you doing, climbing ice?

• 3:00David Hoffman?

  You gotta, you gotta up the ante, brother. After, on your third cycle, like, the volatility just doesn't do it for you anymore.

• 3:08Ryan Sean Adams?

  Okay, so you gotta tell us, what is it like to climb up a sheet wall of ice? This is a video here. Is this you?

• 3:16David Hoffman?

  Yeah, this one's me. It's nice, because like with rock climbing, you have to put your hands in specific places. But with ice climbing, you can, you know, stick your toes or your ice tools wherever you want. So like, the whole thing is climbable. It's pretty cool. It's pretty fun. It's the only thing you gotta worry about is like, when you, when you hit your tool into the ice, like, ice shrapnel can like, come back at you. So you gotta, gotta be careful.

• 3:39Ryan Sean Adams?

  This is not like free solo. Like, you are totally like wired in.

• 3:42David Hoffman?

  That is a rope. That is a rope connecting me. Yes. If I fall, I didn't, I did not fall one time. But if I had, I would have fallen onto a rope.

• 3:51Ryan Sean Adams?

  Oh, my God. Well, good to have you back, man. It's great. All right. Well, while you were gone.

• 3:56David Hoffman?

  Where do you think the Fed pivot came from, Ryan? What do you think I was doing?

• 4:00Ryan Sean Adams?

  I don't know. Is this more back to the?

• 4:02David Hoffman?

  As soon as I get down, the Fed is like, no, we're gonna lower interest rates.

• 4:06Ryan Sean Adams?

  So you got a Powell Horcrux up there. Well, let's talk about Bitcoin on the week. So are we up? Are we down? Um, did you help us there in your ice climbing journeys, David?

• 4:15David Hoffman?

  We were going to be down, but then we ended up flat. So Bitcoin flat on the week. The crypto market is kind of flat on the week. We retraced a bigly amount after a lot of the just the frothiness that was accumulating for the last, I don't know, eight months of straight up only, I would say. Uh, and then we saw kind of like a negative 15% across the market day across the board. But then the Fed pivoted. And so we ended up flat on this week. So Bitcoin up 1%, call it flat. We are ending the week at 42,700. Ether started the week at $2,340, down 1% to $2,300. New supply lows, though. We got new supply lows in Ether. So we are down to the low, low supply of 120.2 million. Going to break through that 0.2 million, uh, probably in this,

• 4:59David Hoffman?

  uh, this episode level. Uh, and then Bitcoin, the Ether Bitcoin ratio also flat on the week.

• 5:05Ryan Sean Adams?

  Okay.

• 5:05David Hoffman?

  So it could have been a bearish week, but we got a flat week.

• 5:08Ryan Sean Adams?

  Yeah. So, and, uh, you, you mentioned there, I just, I just want to embellish this a little bit. So Ether supply at all time lows. So we're burning some ether these days.

• 5:18David Hoffman?

  No, post-merge lows.

• 5:19Ryan Sean Adams?

  Post-merge lows. Of course, of course. We can't go back to the

• 5:22David Hoffman?

  But yeah, but time started at the merge.

• 5:24Ryan Sean Adams?

  Come on. Yeah. It's, uh, you know, the, the clock started 455 days ago. Um, and also, did you know this while we were talking about Bitcoin? 13 years ago, to the day this week, uh, as of December 13th, we just celebrated the anniversary of Satoshi disappearing. He just went away.

• 5:44David Hoffman?

  His last message on the internet.

• 5:45Ryan Sean Adams?

  His last or their last message. This group of people, whoever Satoshi actually is, vanished, uh, 12 years ago. No, 13 years ago.

• 5:55David Hoffman?

  13, 13 years ago.

• 5:56Ryan Sean Adams?

  Never came back.

• 5:57David Hoffman?

  Yeah. You got to really like tip the hat to him. Being anonymous on the internet and retaining anonymity after you make, uh, billions and billions of dollars in this network, that's hard. That's a hard thing to do. He covered his tracks extremely well.

• 6:12Ryan Sean Adams?

  Somebody knows who he is, don't you think? CIA NSA, some three-letter agency.

• 6:17David Hoffman?

  I don't know, man.

• 6:18Ryan Sean Adams?

  Knows who this is.

• 6:19David Hoffman?

  I don't know. I mean, I think the industry has.

• 6:21Ryan Sean Adams?

  Can't be that hard.

• 6:23David Hoffman?

  It's Hal Finney. Like, I think everyone would place their bets and say it was Hal Finney. But no one really knows. No one really knows.

• 6:30Ryan Sean Adams?

  Well.

• 6:30David Hoffman?

  Can tell you who it's not. It's not Craig Wright. I know that.

• 6:34Ryan Sean Adams?

  Tell you it's not me either, David. I'll go on record and tell you that I'm not Satoshi. Let's take a look at the crypto market cap. What are we at on the week?

• 6:42David Hoffman?

  We just poked through $1.7 trillion, coming up to $1.71 trillion. Some really healthy numbers in the total crypto market cap.

• 6:50Ryan Sean Adams?

  I haven't seen 1.7 in a long time, since the last bull market.

• 6:53David Hoffman?

  A long time. Remember when we did like a year and a half of Bankless Weekly Rolloffs? And you were asking me what is the crypto market cap? And the answer was $1.1 trillion?

• 7:02Ryan Sean Adams?

  Yeah, it was just, it was.

• 7:03David Hoffman?

  For a long, I hated that question.

• 7:06Ryan Sean Adams?

  It was.

• 7:07David Hoffman?

  Why are you asking the question, Brian? It's 1.1.

• 7:10Ryan Sean Adams?

  I mean, we had about 12 months around like the 1 trillion mark. And it would go a little bit below, a little bit above, and we're just crabbing up. And now we're getting close to 2 trillion, David. So pretty soon you can, you can say 2 trillion. Speaking of numbers going up.

• 7:23David Hoffman?

  Oh.

• 7:23Ryan Sean Adams?

  On Layer 2.

• 7:24David Hoffman?

  Great chart.

• 7:25Ryan Sean Adams?

  Layer 2s, we are at all-time highs for total value locked in Layer 2s. That is $16 billion worth of value locked. And let's see, activity as well on Layer 2s at all-time highs. This was an interesting chart from Grow the Pi to XYZ, which is another fantastic website for tracking Layer 2s. In terms of transaction fees, David, earlier this week, we hit one day that marked all-time highs in terms of fees paid by Layer 2s to Ethereum, 1.25 million. That is part of the reason for the ETH burn, part of the reason ETH supply is at all-time lows

• 8:05Ryan Sean Adams?

  since the merge, is because we are burning more transaction fees and Layer 2s are actually consuming block space on Ethereum Layer 1s. I mean, Ethereum economics, Ethernomics, if you will, looking quite healthy going to this bull season. I mean, there's a lot of, there's a lot of talk about Layer 2s and. Or layer ones and kind of like ETH transaction fees being high and that being bearish. It's not bearish to me, let me tell you that. And you know, layer twos on the uptick is looking pretty nice as well.

• 8:35David Hoffman?

  If you tallied all of the assets deposited onto layer twos, AKA like aggregate layer two TVL, it would be number 10 in market cap behind Lido Staked Ether, head of Avalanche.

• 8:47Ryan Sean Adams?

  Wow, wow. So the climbing, climbing on the charts. David, tell us about some tokens of the week. So now that we're in the bull market, we gotta keep an eye on the tokens that are pumping. You got two. What's the first one?

• 8:58David Hoffman?

  First one is injective coming in at plus 80% on the week.

• 9:03Ryan Sean Adams?

  Wow.

• 9:03David Hoffman?

  It is a layer one. I don't know much more than that, other than a lot of the crypto Twitter influencer trader people are all talking about it. I mean, that's what happens when a token goes up 80% of the week. The bonk still coming in at number two on the week at plus 70%. But the other thing that we have that I have listed here is an NFT, Ryan. Pudgies. Definitely deserve a shout out. If you look at the market cap from December to now, they are at from like a five ETH floor to where they are now at

• 9:34David Hoffman?

  11 ETH floor.

• 9:35Ryan Sean Adams?

  This is all time highs.

• 9:36David Hoffman?

  An NFT doubling. Is that all time highs?

• 9:39Ryan Sean Adams?

  Yeah.

• 9:40David Hoffman?

  Wow, good for pudgies.

• 9:42Ryan Sean Adams?

  Previous all time highs was a floor of about six. Is this right? Does this go back far, far enough?

• 9:48David Hoffman?

  I don't know if it goes back far enough, but 11 seems, it definitely could be a pudgy all time high.

• 9:53Ryan Sean Adams?

  All time high at least.

• 9:54David Hoffman?

  Fun fact, I fumbled my pudgies at 1.25 ETH.

• 9:58Ryan Sean Adams?

  Oh, you sold? You sold your pudgies? You kept your Crypto Punk though?

• 10:02David Hoffman?

  I'm not Crypto Punk. That one was.

• 10:04Ryan Sean Adams?

  So pudgies are now number four? The number four PFP collection?

• 10:09David Hoffman?

  Yep.

• 10:09Ryan Sean Adams?

  Number four.

• 10:10David Hoffman?

  Behind Bored Ape and Mutant Apes.

• 10:12Ryan Sean Adams?

  Man, doing quite well. And you what accounts for the turnaround?

• 10:16David Hoffman?

  Never thought I would have seen the day. Crypto Punks, Bored Apes, Mutant Apes, pudgy Penguins.

• 10:21Ryan Sean Adams?

  Like, why did, why did they turn around so hard? You have a take on that?

• 10:24David Hoffman?

  New management. Yeah, Luca and the people that bought the pudgy Penguin IP just are absolute Chad executors who turned the IP around and started actually building stuff. Like, they're the reasons why pudgy Penguin stuffed animals are in Walmart. And later on in the show, we're going to talk about the pudgy Penguin metaverse world. The thing that the Bored Ape, that other world was promised to be. I think Punchy Penguins kind of beat them to the punch.

• 10:50Ryan Sean Adams?

  Oh, wow. Just a good old fashioned execution. That's why they're pumping it, at least at the early stages.

• 10:54David Hoffman?

  Yeah, here's a take from Mike Ibelito. NFTs are under-owned by crypto Twitter, but everyone believes in them long-term. The setup for an absolutely biblical FOMO rotation is here. NFTs remain the fat pitch in crypto right now. And this is after Mike put out a poll of saying, how much of crypto Twitter has at least 10% of their wealth in NFTs? And everyone gave the smallest answer of 5 to 10%. So Mike is saying everyone is underexposed to NFTs.

• 11:19Ryan Sean Adams?

  You think it's going to be PFPs again this time? We're getting into speculation territory. It's like my problem with the NFTs is like...

• 11:24David Hoffman?

  It can't just be the same thing over again.

• 11:26Ryan Sean Adams?

  Right. That's what I mean. I just like, I'm bullish NFTs. I just don't know what particular NFTs. So maybe you could help me with that, David. Maybe we'll do an episode on that.

• 11:35David Hoffman?

  I've been telling you.

• 11:39Ryan Sean Adams?

  I want a different answer, though. I want an answer that is...

• 11:41David Hoffman?

  You see it in the back of my podcast studio every single time in Brooklyn. It's a gigantic CryptoPunk.

• 11:47Ryan Sean Adams?

  Nah, that's, you know, that's like, um, old news, David. I'm looking for the new meta, the cheap one. Um, all right, well...

• 11:55David Hoffman?

  The new CryptoPunks?

• 11:56Ryan Sean Adams?

  Well, let's talk about the big news in markets. This is in trad markets, but it affects basically everything. And that is the long-awaited Fed pivot. Did we just get the Fed pivot this week, David?

• 12:07David Hoffman?

  You know, we can only interpret if we are getting the Fed pivot. It's not like the Fed is going to come and say, it's not like Jay Powell is going to come and say like, "Yo, we're pivoting." But here's what happened. Uh, we got the third instance in a row in which they did not raise rates. Rates stayed unchanged. And then previously, they were going to signal that in 2024, they were perhaps going to cut rates once. That was the status quo going into this meeting that happened yesterday. They continued, they're not raising rates, so third time in a row. And then now, now they are signaling that there are three cuts coming next year.

• 12:46Ryan Sean Adams?

  Three cuts.

• 12:47David Hoffman?

  So currently, interest rates are at between 5.25% to 5.5%. And they said that they are going to get to 4.6% by the end of 2024. So they are accelerating in their interest in lowering interest rates. And the markets responded as if it was the Fed pivot. Like the Nasdaq and SPY are in LFG mode. Yeah, I think Nasdaq is like poking into all time highs. Yeah, it's about to hit, the SPY is about to hit all time highs. Coin stock, which I think it's a pretty good barometer of just like risk appetite. Because like what happened when we had low interest rates last time, like crypto assets just mooned.

• 13:28David Hoffman?

  So people perhaps are using coin stock as an exposure to assets, an asset that is exposed to low interest rates. So coin is breaking out through like a highs not seen since May of 2022. Is that $150 a share? So yeah, the markets are responding as if we got the pivot.

• 13:50Ryan Sean Adams?

  Yeah, I love this Bloomberg headline, David. Powell brings tequila to the Wall Street rate cut party. So Powell's pouring drinks here. And there's a clip here of his comments on the recession. You want to hear what he says about the recession?

• 14:03Speaker 02

  I think you can say that there's little basis for thinking that the economy is in a recession now.

• 14:10Ryan Sean Adams?

  Basically, little basis for thinking the economy is in a recession now. So we're kind of getting close to mission accomplished. He followed that up by saying like, who knows what will happen in 2024, but like we're cutting. So what does that tell you? I think one of the unspoken things about this, you know, other than Powell not using the P word for pivot, of course, is the debt, the underlying US debt and the interest payment on that debt. I was just looking at this this morning. US interest payment on an annualized basis is about $700 trillion, David, right now, on top of its colossal amount of debt. So it has to pay that every single year. That's more than the US pays for defense, pays for its military. Okay?

• 14:53David Hoffman?

  So the higher. We don't usually hear anything being higher than that.

• 14:56Ryan Sean Adams?

  Right. The higher the Fed rate, of course, the greater the interest payments. And so that's some other unspoken pressure that is pushing these rates, I think, down. It's something, of course, Powell can't say. I don't know if Yellen will comment on that, but this interest payment is increasing. And if it went beyond 5%, if interest rates went to 6%, 7%, 8%, I mean, this just ratchets up until it's a massive portion of US GDP every year. And then how is that sustainable? So there's always going to be this downward pressure. And I think that's something unspoken that is starting to apply. So Powell may not like it, but he kind of has to pivot at some point, and this might be the opportunity.

• 15:36David Hoffman?

  This is what we've been saying ever since they turned on the interest rates in like early 2022. Everyone has been saying, well, they're going to pivot at some point. Well, they're going to pivot at some point. Well, they're going to pivot at some point. And why is because you know that the Fed can't bankrupt the government by keeping interest rates high. So we always knew that the Fed pivot was coming. We just didn't know when or where. We always knew it was on the horizon. I do enjoy, Ryan, the timing of the Fed pivot that's happening, that we're calling it, that is right before the Bitcoin happening, right before the Bitcoin ETF approval. Like, the stars are aligning in a very big way.

• 16:13Ryan Sean Adams?

  The money printer is getting ready to fire back up. David, do you want to get some predictions? I know we did a couple of episodes on predictions, but one that didn't make a full episode because we just didn't have time this year was Bitwise predictions. They had 10 of them, and you pulled a few of them out. And this is from another Ryan. How do you pronounce Ryan's last name? You went to college with this guy, right? So you know who Ryan is.

• 16:34David Hoffman?

  Yeah, his last name's Rasmussen, but you can go ahead and call him Raddelson because the little spirit of Ryan is he gets rattled really easily.

• 16:41Ryan Sean Adams?

  Oh, dude. You can say that because you're friends, I guess?

• 16:46David Hoffman?

  Yeah.

• 16:47Ryan Sean Adams?

  Okay, okay. Sorry, Ryan. I'll apologize on David's behalf. Okay, so what were the predictions that you pulled out? Because you only pulled out Ryan's good ones, right?

• 16:57David Hoffman?

  Only the good ones. Yeah, 1, 3, 4, 6, 7, and 10. So half of them, more than half of them are pretty damn good.

• 17:03Ryan Sean Adams?

  Good job, Ryan.

• 17:03David Hoffman?

  To read the rest, there is a link in the show notes. Actually, this tweet thread did absolute numbers. So congrats, Raddelson. Bitcoin, number one, trading above $80,000 from the two catalysts of the Bitcoin ETF and the halving. Feels pretty safe. Bullish, but safe prediction. $80,000 for Bitcoin in 2024. How do you feel about that one, Ryan?

• 17:23Ryan Sean Adams?

  I feel like it's too safe. I'm like, not okay.

• 17:27David Hoffman?

  Too safe?

• 17:27Ryan Sean Adams?

  Yeah, way too safe.

• 17:28David Hoffman?

  Well, I mean, I'm sure he's trying to get as many like, you know, points on the board as possible. Safe predictions. Prediction number three, Coinbase's revenue will double, beating Wall Street's expectations by 10x. Because Coinbase's trading volume surges in bull markets, of course, and they have launched a bunch of new products. And so basically Coinbase is going to just blow people's, blow expectations out of the water. You want to do the next one?

• 17:53Ryan Sean Adams?

  I also think that's kind of safe, but also good, right? And beating Wall Street's expectations by 10x. Well, Wall Street obviously had bad expectations then, I think. Prediction number four, more money will settle using stable coins than using Visa. You could see this chart where we're kind of like, not quite neck and neck in 2023. It was just, stablecoin settlement was about half that of Visa. And so this is a significant increase in stablecoin settlement. The next one, number six, is Ethereum revenue will more than 2x to 5 billion as users flock to crypto applications. What do you think about that one, David?

• 18:28David Hoffman?

  I think that's about right, especially as layer twos and layer two activity demand goes up only. And value and assets on layer twos also go up only. You know, when there's more money on layer twos, there's more economic energy on layer twos, which means we're burning more ether in layer twos, which means Ethereum's revenue is going up. All right, the most bold prediction of the bunch, Taylor Swift will launch NFTs. Man, that is bold. And I am absolutely here for it. I can't really, really call myself a Swiftie, although I do enjoy my fair share of Taylor Swift songs.

• 19:00Ryan Sean Adams?

  Yeah. Was Ryan a Swiftie in college, David?

• 19:03David Hoffman?

  I know his girlfriend is.

• 19:08David Hoffman?

  Anyways, last prediction Ethereum will drive the average transaction cost to below one penny and he is of course talking about Ethereum and his layer twos because that's where you are going to get 0.01 cent transaction fees and that is going to be spurred by Dinkun aka Proto Dink Charting that's EIP 444 which is probably going to come in 2024.

• 19:29Ryan Sean Adams?

  That's a very safe prediction. I'm very confident in that. David, what do we have coming up next?

• 19:33David Hoffman?

  Coming up next, airdrops, airdrops, airdrops. We're getting all the airdrops. We've had an airdrop meta already arrive on the scene here in December in holiday season and you just know that you know, there's a bunch of layer twos and others that are going to launch their airdrop in January or at least Q1 and we're going to get the details to you as well as Liz Warren has some notifications for us. It is a bill called the Anti-Digital Asset Money Laundering Bill, something extremely disconnected from reality. We're going to talk to you guys all about that anymore. But first, a moment to talk about some of these fantastic sponsors that make this show possible, especially Kraken, our preferred exchange before buying crypto. All of that cheap, cheap Bitcoin, that's not going to be cheap later. If you do not have an account with Kraken, consider

• 20:17David Hoffman?

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• 20:59David Hoffman?

  financial freedom and inclusion. Head on over to kraken.com/bankless to see what crypto can be. Not investment advice. Crypto trading involves risk or loss. Cryptocurrency services are provided to US and US territory customers by Payward Ventures E. PVI doing business as Kraken. Arbitrum is the leading Ethereum scaling solution that is home to hundreds of decentralized

• 21:17David Hoffman?

  Arbitrum's technology allows you to interact with Ethereum at scale with low fees and faster transactions. Arbitrum has the leading DeFi ecosystem, strong infrastructure options, flourishing NFTs, and is quickly becoming the Web3 gaming hub. Explore the ecosystem at portal.arbitrum.io. Are you looking to permissionlessly launch your own Arbitrum Orbit chain? Arbitrum Orbit allows anyone to utilize Arbitrum's secure scaling technology to build your own Orbit chain, giving you access to interoperable, customizable permissions with dedicated throughput. Whether you're a developer, an enterprise, or a user, Arbitrum Orbit lets you take your project to new heights. All of these technologies leverage the security and decentralization of Ethereum. Experience Web3 development the way it was always meant to be: secure, fast, cheap, and friction-free. Visit arbitrum.io and get your journey started in

• 22:02David Hoffman?

  one of the largest Ethereum communities. Are you launching a token? Is it already live? How are you managing the legal and tax for providing token awards for your team? Toku simplifies everything about managing token grant compensation, and you can get started with them for free. You'll have access to top-notch legal and tax support to handle the distribution and management of tokens for your team. Toku caters to every step in the process, from user-friendly legal templates for granting tokens to tracking vesting periods and calculating withholding taxes. Toku understands every grant structure: token purchase agreements, restricted token awards, restricted token units, token options, and all the other ones. Toku is already simplifying this today for leading companies like Protocol Labs, DYDX Foundation, Mina Foundation, and many more.

• 22:46David Hoffman?

  You can learn more about how Toku can help you streamline your token management and get started for free. Visit toku at toku.com/banklist or click the link in the description below.

• 22:55Ryan Sean Adams?

  David, tell me about airdrops. It feels like airdrop season. What do we got coming up?

• 22:58David Hoffman?

  We got a confirmation of the Starknet token airdrop. Pretty definitely one of the most anticipated airdrops of all time. People saw the writing on the wall. They're like, yo, they're gonna do a token. They have to do a token. And now they are giving away details about that airdrop. So they start out this tweet announcing some of the details that says, "Darknet, it's about each of you. Every user, builder, and member of our community existing and future is a critical piece to building our network into the future of decentralization for generations." To come, the success of Starknet depends on this. We love the crypto ethos. TLDR, we plan to allocate over 1.8 billion Stark tokens out of a total supply of 10 billion across multiple initiatives to drive adoption and growth of the Starknet blockchain. So here are

• 23:42David Hoffman?

  some of the first wave of details that we've gotten. 900 million Stark tokens for the fair, decentralized and transparent distribution of Stark over multiple programs and phases. This would be the airdrop and perhaps a second round of airdrops and perhaps more targeted airdrops, but generally retroactive distribution for reasons into the community. Second, network rebates in Stark, 900 million Stark tokens as well, another 9%. If you are, if you have spent money on gas or transaction fees in Stark where you will be given a Stark kickback to compensate you for your gas fees. And then also 50 million, pretty small, but definitely meaningful, 50 million Stark tokens to boost DeFi activity. This is

• 24:24David Hoffman?

  liquidity mining or incentives, etc. And then more. So they said 1.8 billion. That was a lot.

• 24:32Ryan Sean Adams?

  So 1.8 billion.

• 24:33David Hoffman?

  18% of tokens.

• 24:35Ryan Sean Adams?

  Yeah, I'm just going off of like, you just napkin math here, but like, what Arbitrum's and these other layer twos is about $10 billion market cap, let's say. So let's say Starknet is similar, then each token would be worth a dollar, let's say. So that would be 1.8 billion dollars worth of airdrop that they are pushing out to the community. So that's a pretty big one. I mean, there have been larger airdrops, but this has got to be one of the top five, I would say of all time, if, if that happens. And who knows, it could be worth less, it could be worth more. The market will tell us as soon as it's released what the Starknet tokens are worth.

• 25:11David Hoffman?

  It's gonna be worth more.

• 25:14David Hoffman?

  It's gonna be worth more than both.

• 25:16Ryan Sean Adams?

  You don't have to be sorry. That sounds great. I'll take more. That's not, that's not the only one.

• 25:20David Hoffman?

  I'm taking the over on that one.

• 25:22Ryan Sean Adams?

  You promised to.

• 25:22David Hoffman?

  Yeah, Layer Zero, Layer Zero Labs, one of the, again, very, very bot-farmed airdrops. So we're going to have to see how they overcome that challenge. But Layer Zero, they tweet out, has always been, we've built with the ability to have a native token within the protocol. As can be seen in the immutable code launch on day one, basically TLDR, we'll state now in no uncertain terms that there will be a layer zero token. Its distribution is something we're committed to getting right and expect it to happen within the first half.

• 25:54Ryan Sean Adams?

  In no uncertain terms? Oh, wow.

• 25:55David Hoffman?

  In no uncertain terms, yeah. And that is how you know. And they say it's going to be distributed in the first half of 2024. So Starknet, they also didn't give a date or a time, but you know, they just told about details. So I'm going to go ahead and guess earlier in 2024. So Starknet first, probably layer zero after that. You know, at that point, the ball is rolling at that point. Like, I remember my take way back when, where I said, like, yo, as soon as the market heats up and some big airdrop happens, it's going to queue to all the other unreleased airdrops. Like, yo, it's airdrop season. And I think with the GTO drop last week, or last week, yeah, last week, and like hundreds of millions of dollars going into the pockets of people, that I was like, okay,

• 26:38David Hoffman?

  this is the green light. Everyone release your token now. It's airdrop season.

• 26:41Ryan Sean Adams?

  Not only GTO, GTO is the Celestia token, TIA, that was probably like three, four weeks ago, I believe, and a fully diluted valuation, $14 billion.

• 26:53David Hoffman?

  That is nice. Go look at that chart, dude. Scroll down and look at that chart. It doesn't go down. It goes only up.

• 26:59Ryan Sean Adams?

  Some of these things are getting a little silly. I gotta be honest, David. This does not feel like the early stages of the bull market.

• 27:04David Hoffman?

  It's a little silly. Somebody was talking and commented under my, like, ice climbing in Canada picture. And I was like, yeah, he's just trying to get out of the US so he can go claim his.

• 27:15Ryan Sean Adams?

  That's actually not a bad take. Another not bad take is, don't miss it because you didn't do your homework, okay? So all of these airdrops are chronicled in the bankless airdrop hunter. David, I missed out on a 17K GTO airdrop because I didn't do my homework, my friend.

• 27:32David Hoffman?

  Wow, the minimum amount for a GTO airdrop recipient was $17,000. That's, that's pretty good. The Uniswap airdrop was 1,200. We're up to 17,000 now.

• 27:42Ryan Sean Adams?

  I know. This is the part of the cycle where it pays to really be in crypto and to do your homework and to use. All of these

• 27:48David Hoffman?

  Well, so this is harvest season.

• 27:49Ryan Sean Adams?

  Protocols. It's very much harvest season. So make sure you do your homework. Another PSA for you. David, there was a big scare actually this morning, the time of recording. I woke up on Thursday morning and all over crypto Twitter, a whole bunch of people were saying, "Stop using your DApps. Just stop. Just don't use any more DApps." Because there's like a phishing attack. And like, when you read into the details of this, it seemed like there was some mysterious attack where if you were using your Ledger hardware wallet paired with some sort of either crypto wallet, like a, you know, like a MetaMask or just on a website using Ledger Connect, there was a way for an attacker to drain your funds. Okay. So this was circulating around crypto Twitter. Can you tell us some details on what was happening? And like whether it's resolved or not?

• 28:35David Hoffman?

  So I think it is now resolved. We now know the details. But the TLDR, hey, this is some coding developer language. I'm gonna do my best here. A library that is used by many DApps maintained by Ledger was compromised and then a wallet drainer was replaced. So think about a little snippet of code. That snippet of code that's maintained by Ledger was compromised and a wallet drainer snippet of code was replaced. And so sometimes when you use your Ledger and it connects to MetaMask and then it connects to a front end, somewhere in the middle of that process is this Ledger library that this exploiter got their hands on and was able to insert a drainer. I don't think it was true for all front ends. So not all front ends were having this Ledger Connect library as a part of their stack, but some of them were.

• 29:20David Hoffman?

  And I bet you, Ryan and me and bankless listeners are like, I don't know which uses it and which doesn't. And so everyone is like, just stop using it. Stop, pause.

• 29:27Ryan Sean Adams?

  Yeah. And what it would do is

• 29:29David Hoffman?

  Puzzles all trading.

• 29:29Ryan Sean Adams?

  It would do a man in the middle attack where it would just insert this rogue transaction into your device.

• 29:34David Hoffman?

  Right.

• 29:34Ryan Sean Adams?

  You know, you wouldn't really know. So you'd look at the transaction on the screen. You'd click through and you'd click accept and you ended up sending your funds to this, uh, this third party, this Fisher, this hacker.

• 29:47David Hoffman?

  So, uh, your Ledger hardware wallet is totally fine. It is software that's on the internet that is compromised. That takes a transaction from your Ledger hardware wallet and sends it out into the, into the world. There is now a fix for this. You basically just need to clear your cache. Muneeb Gupta, who I think is from Polygon, put out this tweet that tells you how to do this. So there is a link in the show notes. And you Ryan, go ahead and click that, go and click that link. And then if you ensure that the version is 1.1.8, you will be good. Yeah. So you're good. Okay. So you see that original file slash NPM at the very, very top. Connect kit 1.1.8, you're Gucci. There is a link in the show notes. You can go click that link. You can follow suit and make sure that is 1.1.8.

• 30:32Ryan Sean Adams?

  And that's just a double check.

• 30:33David Hoffman?

  Not, yeah, go clear your cache.

• 30:35Ryan Sean Adams?

  Well, and that's just to double check. Now I think this, the fix is kind of propagated through all of it. You know, CDN, content delivery networks. I think it's pretty much safe, but there was this narrow window of time where it was not safe to actually use your ledger connecting to, to a wallet. And, and I got to say here, David, like, um, I guess my reflection on this is we still got some work to do. My friend, like, I love crypto, but no one just wake up one morning, whip out your bankless wallet. And, uh, like you get this random message saying, hey, if you use your wallet today, you could be drained of all of your funds. That is bad user experience, my friend. That is not, we are not quite ready for normies when we have that level of, of user experience. So, I mean, just surfacing that.

• 31:17David Hoffman?

  Also, it's just like, this is software that helps normies manage stuff. Like without this library in the middle, it gets more complicated. And so it's, there's like this big problem, I'd say, where like as much as ledger is doing fantastic work, like it's, we're still dependent on them. And there is no way, there's, I don't know, there's, I'm sure there's some ways, but just like, it's a scary allow, amount of dependency. And like, if it wasn't ledger, it'd be someone else, right?

• 31:43Ryan Sean Adams?

  I've just like this year, this year, David.

• 31:45David Hoffman?

  Hardware wallet.

• 31:46Ryan Sean Adams?

  The last three to six months of, I, I don't know how many phishing stories I've heard from like crypto OGs. From like this, this could have gotten me, this could have gotten you, this could have gotten many people listening if they had used their wallet during this, this period of time, right? And as you say, too many, uh, we still have work to do here. Speaking of work to do, David, we still have some work to do in the U.S. I think when we have senators saying things like this, you want to hear it?

• 32:12Speaker 03

  No. You know, we have something called the Bank Secrecy Act, which is how banks are required to monitor certain kinds of transactions that go through the system. It was written in the 1970s following 9/11. The law enforcement folks went back, looked at what had happened, figured out how the financing had made it through the system. And that's the last time that Congress updated the Bank Secrecy Act. What we need to do is we need to update it again because there's a new threat out there. It's crypto and it is being used for terrorist financing.

• 32:49Ryan Sean Adams?

  She goes on, David, a new threat out there. It's crypto. That was Elizabeth Warren, of course, Senator from Massachusetts, two weeks ago on CNBC. So she was on the press circuit for some reason railing against crypto. I think we found out more of the reason why she was on this press circuit. And that is she was planning to launch a bill and she has now launched a bill called the Digital Asset Anti-Money Laundering Act. And it is absolutely terrible. It basically, David, kills DeFi in the United States. Some details. It kills crypto. It kills like any peer-to-peer money system in the US. So a few details, of course, you can go and read the bill yourself, but a few details

• 33:33Ryan Sean Adams?

  from Coin Center. It requires if you have a public blockchain infrastructure, so if you're EtherScan, if you run a validator, if you host a DeFi front end, so you host a Uniswap front end, it requires that you register as a financial institution. And as a financial institution, so David, you have an at-home ETH validator? Well, guess what, my friend? You would be a financial institution. So you'd have to identify and record the personal information of every user who used your validator software, basically do a full AML KYC risk compliance program because you would be culpable, you would be liable as a financial institution if some like terror,

• 34:16Ryan Sean Adams?

  like bad actor actually pushed through, you know, a transaction.

• 34:21Ryan Sean Adams?

  Through some of the blocks that you validate. You file reports about users when they like breach their requirements at government requests. So this basically would kill like tornado cash, Zcash, Monero, all privacy. It is bad, bad, bad. And this is what Naraj from Coin Center says. Make no mistake, while proposed as a solution to potential money laundering, terrorist financing, the bill is in fact a repudiation of liberal values and a move towards the types of surveillance and control prized by authoritarians like Vladimir Putin, Xi Jinping, and Kim Jong Un. So there you go, David. An absolutely atrocious bill. It has bipartisan support, by the way, so it's not just Liz Warren.

• 35:05Ryan Sean Adams?

  Warren, she has a Republican senator who's signed on and the support of five other senators. So incredibly disturbing. And like my take on this is it just unmasks what like, do you hear Elizabeth Warren in that clip? She's talking about like how great the Bank Secrecy Act was, how great the Patriot Act was. Like, I mean, she, she wants to append the financial surveillance system to our peer-to-peer monetary systems and delete and kill the idea of cash. Delete the idea of like me giving money to you without the government kind of like knowing who I am and who you are. She wants to delete that idea entirely. And it's, it's wow.

• 35:49Ryan Sean Adams?

  I, you know, I guess I'm at a loss for words as to, as to why she is so forcefully trying to push this kind of thing through.

• 35:57David Hoffman?

  Yeah, that's the same kind of question I have about like Gary Gensler's motivations. Like, why is Gary, why does Gary Gensler hate crypto so much? Like, why us? And why, why does Elizabeth Warren, in the face of fantastic, real, hard evidence that is way more comprehensive than that meager Wall Street Journal or Bloomberg article? Which one was the one that she was cited in Congress? Like way more comprehensive and complete evidence to suggest the complete opposite of what she is saying, yet she just doesn't care. She doesn't care about actual real facts that are presented in a very clear and coherent manner by industry experts who are aligned with government, which is chain analysis. She doesn't care about them. It's just like she doesn't, she doesn't want to talk to us, doesn't want to hear about the facts, just wants to ban crypto.

• 36:42David Hoffman?

  And so my question is, where's the motivation? Why is the motivation? Who, where is the incentive for Elizabeth Warren to just come after crypto so hard?

• 36:49Ryan Sean Adams?

  Well, Ryan Selkis, actually, I asked him that question. He has a take on that. That is an episode that's coming out next week. So I'll leave that take, but the summary is control. He really thinks that Elizabeth Warren's end state aim is to create a central bank digital currency. It's just kind of like a, like we know best type of thing and to control rather than let the people have a peer-to-peer money system. There's some good news here, David, and the good news is there's a low chance that this will pass. Okay. So not only is it unconstitutional, you have the ability to contest it in the court system that that takes years. Warren seems to write a whole bunch of bills that actually don't pass. So during her 11-year-long career, she's written over 330 bills and

• 37:33Ryan Sean Adams?

  only one was enacted. So I don't know.

• 37:36David Hoffman?

  That's not a very track record.

• 37:38Ryan Sean Adams?

  That's not a great track record.

• 37:39David Hoffman?

  Wait, so then is it just for the show?

• 37:41Ryan Sean Adams?

  I don't, maybe, David, maybe. But like, we have to take these kinds of things seriously, obviously, and the fact that she has other senators signing on means we have to just impose it in its entirety. So there you go. What do we have coming up next?

• 37:54David Hoffman?

  Coming up next, we got pudgy world, perhaps the most successful NFT project to rise out of the bear, fulfilling its metaverse promise, and Elizabeth probably wants to make it illegal. Coinbase Layer 2, the base chain, going to be the home of real-world assets, is Coinbase going to take the real-world asset throne? And we got some other updates from two other Layer 2s. Talking about cheap fees right after the cheap fees narrative sweeps through Twitter, all of this and more. But first, we'll talk about some of these fantastic sponsors that make this show possible, especially MetaMask Portfolio. I've said it so many times, it's now time to do the thing, which is open up your MetaMask portfolio because it is the bull market. That is your battle station. There's a link in the show notes to check it out. MetaMask Portfolio is your one-stop shop to navigate the world of DeFi. And now,

• 38:37David Hoffman?

  bridging seamlessly across networks doesn't have to be so daunting anymore. With competitive rates and convenient routes, MetaMask Portfolio's bridge feature lets you easily move your tokens from chain to chain using popular Layer 1 and Layer 2 networks. And all you have to do is select the network you want to bridge from and where you want your tokens to go. From there, MetaMask vets and curates the different bridging platforms to find the most decentralized, accessible, and reliable bridges for you. To tap into the hottest opportunities in crypto, you need to be able to plug into a variety of networks, and nobody makes that easier than MetaMask Portfolio. Instead of searching endlessly through the world of bridge options, click the bridge button on your MetaMask extension or head over to metamask.io-portfolios to get started. Introducing USDV, a better type of stablecoin.

• 39:20David Hoffman?

  Currently, billions of dollars in stablecoin yield each year are paid to Tether, Circle, and other central issuers of major stablecoins. But what if yield could be shared with the protocols that use it? Those protocols, in turn, can decide how to reward their users. USDV shares its yield with a community of apps and developers that mint it. Every USDV is backed one-to-one by US Treasury bills which pay yield. This yield flows out to the community of USDV issuers, so your protocol or app can get paid for helping end-users convert other stables into USDV. This works thanks to a breakthrough technology called ColorTrace from Layer Zero. Without it, it was impossible to attribute users of a token with a specific issuer. But now we can. USDV is live on Ethereum, Optimism, Arbitrum, and other chains, and is already available

• 40:05David Hoffman?

  on over 20 exchanges such as Curve, Bitget, Velodrome, and Stargate. Start participating in the yield from Treasury-backed stablecoins at bankless.com/usdv. Cello is the mobile-first, EVM-compatible, carbon-negative blockchain built for the real world. And now, something big is happening. Introducing the Cello Layer 2. It's a game-changing proposal that's going to bring Cello's rapidly-growing ecosystem home to Ethereum. Vitalik has shared his excitement for the Cello Layer 2 on the Cello forum, so has Ben Jones from Optimism. But why? The Cello Layer 2 will bring huge advantages, like a decentralized sequencer, off-chain data availability, and one-block finality. What does all that mean? Rock-solid security, a trustless bridge to Ethereum, and more real-world use cases for Ethereum without compromise. And real-world adoption is happening.

• 40:50David Hoffman?

  Active addresses on Cello have grown over 500% in the last six months. With the Cello Layer 2, gas fees will stay low, and you can even pay for gas using ERC20 tokens. But Cello is a community-governed protocol. This means that Cello needs you to weigh in and make your voice heard. Join the conversation in the Cello forum. Follow @celloorg on Twitter and visit cello.org to shape the future of Ethereum. Pudgy World Alpha from Pudgy Penguins is announced, also going to be releasing in Q1 of 2024. Q1, Ryan, is going to be a hot quarter powered by ZK Sync and their Hyperchains. Pudgy Penguins tweets out "The beginning of a new era of blockchain-backed experiences with the goal of onboarding millions, brought to you by Pudgy Penguins." And there is this cute little animation of this Pudgy World.

• 41:35Ryan Sean Adams?

  It's like Pixar quality.

• 41:36David Hoffman?

  Animation. Yeah. The storytelling could use some help. There's just like a penguin stuck in an iceberg and the iceberg's falling apart. But no, it's good. The animation's great. There's no words sadly, just some Penguin sounds. What was that one Penguin-based video game for kids? It was probably before your time, Ryan.

• 41:57David Hoffman?

  It was before my time. I barely played it. Anyways, there was this Penguin like-

• 42:00Ryan Sean Adams?

  Club Penguin.

• 42:01David Hoffman?

  Club Penguin. Thank you, Dave. Club Penguin. Yeah, so it feels like Club Penguin, but in the metaverse now. Okay, so if you buy a Pudgy toy in Walmart, wherever they're sold, you can scan a QR code, which will make your account and you can redeem your traits and customize your forever Pudgy Penguin. And so, you know, the real world, digital, physical, metaverse, it's coming back, man. It's coming back.

• 42:25Ryan Sean Adams?

  We're trying to get kids hooked on crypto, aren't we? Start them young.

• 42:29David Hoffman?

  We gotta get them early, man.

• 42:33Ryan Sean Adams?

  Sorry, he's got a buyer bag saved.

• 42:36Ryan Sean Adams?

  What is this Iceberggy? Pudgy World means Pudgy Token? Oh, they're doing a token?

• 42:40David Hoffman?

  Yeah.

• 42:41Ryan Sean Adams?

  Is that what this means?

• 42:41David Hoffman?

  Well, no, no, they're not doing a token, but Iceberggy is saying that they are doing a token. So Luca and the Pudgy Penguin team had said, "We're not doing a token." But I don't know, Pudgy World means, might mean Pudgy Token.

• 42:54Ryan Sean Adams?

  All right. Well, let's get out of the metaverse for a second. Tell me about Coinbase's Project Diamond. This is a new project name, codename that they rolled out and has some implications here. Maybe Coinbase's base layer two is trying to be the real world asset chain? That's what some of this indicates to me, but give us the update here.

• 43:12David Hoffman?

  Yes, the Project Diamond is being pitched to help institutions create, buy and sell their own native digital assets. So that means asset minting and asset trading. Obviously on base, because where else are they going to put it? This is from the effort of the exchange's asset management arm that recently debuted this project diamond for a platform for mirroring debt instruments used in traditional finance by tokenizing them on base. So this actually had an in-production transfer of value between two firms. So on November 10th, the first digital debt instrument on Project Diamond was successfully issued, distributed, and matured on the platform as a technical demonstration of feasibility

• 43:51David Hoffman?

  to the Financial Services Regulatory Authority as it prepares to join the ADGM, the Abu Dhabi Global Market Regulatory Laboratory Sandbox. So many parts of the world outside of the US are really, really leaning into blockchain-based financial services. And Project Diamond from Coinbase, I guess is a dark horse of a project that's coming in to try and take some of the real-world asset tokenization narrative.

• 44:15Ryan Sean Adams?

  Yeah, I mean, well, one thing to keep in mind is Coinbase kind of manages one of the largest real-world assets that there is, which is USDC. It's their stablecoin, right? And so there's already been lots of speculation that they make base the layer two, the chain, the home chain for USDC. And of course, hopefully, we get to the point where we see tokenized treasuries after that as well. Those are two massive real-world assets, and I think they can continue to expand. The one nice thing that Coinbase has is it has all of the infrastructure for institutions already, right? You just take like Coinbase Prime, and then they have, you know, a Web3 crypto wallet, and now they have a chain, and they can kind of connect all of the pieces and start to

• 44:59Ryan Sean Adams?

  deploy real-world assets on chain. So I'm excited to see how that evolves, and I feel like this is a flag being planted here. David, speaking of planting flags, VanEck has just rolled out the name of their ETF. What is this?

• 45:14David Hoffman?

  The Hodl Bitcoin ETF. H-O-D-L.

• 45:19David Hoffman?

  Which is a decent departure from like the more boomer-y choices from BlackRock, which you would expect from BlackRock.

• 45:25Ryan Sean Adams?

  Yeah, what's BlackRock called, Dino?

• 45:28David Hoffman?

  It's gotta be like BTC E or BTC.

• 45:31Ryan Sean Adams?

  Yeah.

• 45:32David Hoffman?

  Something with something straightforward and not creative and uninspired, which again is totally appropriate for BlackRock. But Van Eck, if you remember their ETH futures ETF ads were like a little surreal and like definitely zoomer with that like goat.

• 45:47Ryan Sean Adams?

  No, they're trying to appeal to crypto natives, remember? Like Van Eck also.

• 45:50David Hoffman?

  A little bit, yeah.

• 45:51Ryan Sean Adams?

  They also, I believe, sent some of their ETH futures fees to like the protocol guild. Like they're very much trying to win the favor of crypto natives. And the ticker symbol HODL is another way to do that. It's a really cool strategy.

• 46:04David Hoffman?

  Apparently the ticker symbol actually really matters because like people were talking about this a lot.

• 46:11David Hoffman?

  A comment from Nate Karashi says, I like this play. Retail who knows crypto will love the ticker. Boomers will have no idea what it means, so it won't attract any negative attention. Plus, a lot of advisors preach HODL, not with HODL, but like, you know, just hold, in other asset classes anyway, so it is a good straddle. I don't want to hear that, like, there's smart money in TradFi if we are making our fundamental analysis on Bitcoin ETFs on the ticker name.

• 46:39Ryan Sean Adams?

  Hey, but it is all brand at the end of the day, right? And one of these ETFs will be a power law winner is what we keep being told here.

• 46:45David Hoffman?

  Moving into where crypto natives like to reside on Layer 2 is the Eclipse testnet is live. If you're not familiar with Eclipse, that is the Solana virtual machine as an Ethereum Layer 2 using Celestia for data availability, gas-denominated in ETH. It is a platypus of a Layer 2. That testnet Eclipse is pretty hotly anticipated and that testnet is now live. So supposedly ETH can be bridged over and you can deploy contracts there as well. But not just Eclipse immutable, the ZK EVM powered by Polygon is now gas-free. So what does that mean? It means users, gamers, who are using Immutable's anti-Cible mechanism, their passport is what they call it. It's like their anti-Cible mechanism to play games. And so you can take your passport from game.

• 47:29David Hoffman?

  To game to game, it's like your player card, if you're a gamer tag, if you will. If you have one of these on immutable, you don't pay for gas. Immutable pays your gas for you. And this is a take that I had a while, Ryan, where like the entire business model of layer twos and also app chains, which is kind of what immutable is, is that their fees are going to become so cheap that the operator of these layer twos or just app locations on layer twos are just like, well, we're just going to pay for the transaction fees of our users because that's good UX and it's going to attract users. And we saw this also, Ryan, with Base Chain, when they say, hey, if you verify your Coinbase account, we pay your gas fees on on Base. And so more and more of layer twos are becoming a no fee environment.

• 48:12David Hoffman?

  So they're all going gas free, which I'm going to call going electric for layer two.

• 48:17Ryan Sean Adams?

  Going electric. Well, I think that's great because there's a narrative right now that's very popular about low gas fee layer ones, right? But you know, you know what's better than low gas fees, David? No gas fees.

• 48:30David Hoffman?

  No gas fees.

• 48:31Ryan Sean Adams?

  Right? So don't even worry. You don't even have to know the concept of gas. And I think that is possible with the economics of layer twos, to your point. So if you go on immutable.

• 48:40David Hoffman?

  And we are doing this before EIP 4844. We are doing this in a pre-optimized environment. Can you imagine when we get bank sharding?

• 48:49Ryan Sean Adams?

  I think very much that mainstream will onboard to crypto without having to worry about all of the economics of gas or gas transaction fees or any of that stuff. And so this is a point pointing in that in that direction for sure. David, this caught my attention this week. Did you know the IRS is saying FTX, all of the people that are now creditors of FTX, that means they lost, they had funds deposited on the exchange. They lost all their funds, went to zero because Sam Bankman-Fried stole it all. The IRS is saying that those people, FTX, in its bankruptcy owes them $24 billion in unpaid taxes.

• 49:30Ryan Sean Adams?

  Okay, they're saying like, hey, before the creditors, all you depositors who put your money in this apparatus, before you get your money, we want our cut and it's. Our cut is $24 billion, as far more than FTX actually has. The audacity of this.

• 49:46David Hoffman?

  Yes. So if you are an FTX creditor, the IRS is like, well, you know, the company owes us a bunch of taxes. So you don't get any of that money. $24 billion is like meaningfully more than FTX is ever going to be able to recover, even though they are doing a great job recovering. So initially, the IRS wanted FTX to pay $44 billion, but then lowered the number to $24 billion.

• 50:11Ryan Sean Adams?

  That is so arbitrary.

• 50:12David Hoffman?

  So the FTX lawyers are trying to get the IRS to show like how they got to the $24 billion. And then the IRS is like, we, we, we just calculated that. It's actually on you to prove that it's not that. So like, my take here is that like, the IRS is just like, they just come up with a number and they're like, dur, dur, pay us 24 billion. Also, that's the number.

• 50:32Ryan Sean Adams?

  No, no, no. First, they can't, the first they came and they said, it's 44 billion. And they're like, no, no, no. It's actually, it's only 24 billion. We're giving you, you know, the 50% discount here. And the FTX lawyers are like, oh, where'd you get that number?

• 50:47David Hoffman?

  You have to prove that you're wrong.

• 50:48Ryan Sean Adams?

  Yeah. But this is a microcosm of how like taxes work.

• 50:53David Hoffman?

  Broken the taxes.

• 50:54Ryan Sean Adams?

  The IRS, yeah. Right? Like, it's just, they give you, they tell you what you owe and you have to try to guess at the number. That's very much what it is with crypto taxes. So Mike Dudis has a comment here, you know, spicy comment, which I, you know, I don't blame him. This IRS request is so blatantly insulting to creditors, Americans, and anyone. The arrogance of the US government that flies in the face of any law is staggering. Their demands literally are trying to supersede the recovery of user funds at the same time that SEC sues exchanges to protect customers. That's the wider context here. It's like a whole bunch of people that lost their money. And the IRS is, is charging them a tax bill. SBF doesn't have to pay this.

• 51:35Ryan Sean Adams?

  Hopefully, hopefully it gets resolved, David, but absolutely ludicrous that they're coming in and trying to collect here.

• 51:42David Hoffman?

  Well, Jesse Powell was using the word extortion when the SEC came after Kraken the second time inside of a year for another bunch of millions of dollars. And I will put on my extremely libertarian hat, which doesn't come on very often. And Ryan, you want to know what the difference is between extortion and the IRS and the SEC?

• 52:02Ryan Sean Adams?

  Uh, the IRS has military behind it.

• 52:05David Hoffman?

  These groups of people have the monopoly on violence. And if you're charged with extortion, he's just, you just didn't have the army. Sorry about it. Sorry about it.

• 52:12Ryan Sean Adams?

  Can't say no. I, you know, I'm not someone who's against taxes in, in general. Taxes are necessary. I'm a big believer in, in public infrastructure.

• 52:19David Hoffman?

  They, we are a part of a society, but these taxes are dumb.

• 52:24Ryan Sean Adams?

  You actually have to have a reasonable justification for it as well. Uh, anyway, speaking of, um, dumb things, silly things, uh, look at this guy, Gary Gensler. Uh, he's, he tweets out, thank you, CoinDesk, I guess. What is this, David?

• 52:37David Hoffman?

  Uh, actually, should I just play the clip?

• 52:39Ryan Sean Adams?

  Sure. All right, let me play the clip.

• 52:41David Hoffman?

  We all love Gary Gensler. He's the Taylor Swift of regulation.

• 52:51David Hoffman?

  I'm, I'm assuming this CoinDesk talking head was being sarcastic. To call Gary Gensler the most influential of 2023, like, we're just using influential in like this newtral term is like, yeah, he influenced people to go abroad and shut down their startups and not issue tokens and overall not.

• 53:12Ryan Sean Adams?

  File a court cases.

• 53:14David Hoffman?

  File a court cases. Yeah. So like, he moved a lot of people's time and energy.

• 53:18Ryan Sean Adams?

  Yeah.

• 53:18David Hoffman?

  Is it a positive influence? Absolutely not. Anyways, so Gary Gensler himself retweets this video of CoinDesk saying he's the most influential of 2023 and he goes, thank you, CoinDesk, I guess? Question mark.

• 53:31Ryan Sean Adams?

  David.

• 53:32David Hoffman?

  Which also is a farce.

• 53:34Ryan Sean Adams?

  Not only did he retweet it with, thank you, CoinDesk, I guess, he paid someone, I assume, at the SEC, it's somebody's job to edit this video and add the T-Swift.

• 53:45David Hoffman?

  Gary Gensler edit?

• 53:46Ryan Sean Adams?

  Yes, this is a Gary, this is Gary Gensler influence. He put that, he put the cute, like, you know, T-Swift has, you know, cats and stuff. So that's a meme. So he puts a cat on his shoulder and he scratched out rather than Time's most influential coin. He's trolling us, man.

• 54:01David Hoffman?

  He is trolling us.

• 54:02Ryan Sean Adams?

  With our tax money.

• 54:03David Hoffman?

  Remember April Fools, he put on the, uh, Deal With It sunglasses on his Twitter profile picture and crypto Twitter was like, haha, Gary Gensler. trolling us and I'm like he is admitting that he is just trolling us and that

• 54:17Ryan Sean Adams?

  I know

• 54:18David Hoffman?

  that he's not taking this it's an admission of guilt

• 54:20Ryan Sean Adams?

  not taking his job seriously

• 54:21David Hoffman?

  admission of guilt that he's just trolling us and now he's doing it again this isn't Gary Gensler just knowing that he's not saying totally enough to get himself into trouble but he's admitting to being a fucking troll excuse my language

• 54:35Ryan Sean Adams?

  it's absolutely maddening and you know there's nothing we can do about it right now I guess just keep taking those L's in court Gary because they're coming for you 2020 if you had enough in 2023 you got some more coming in 2024 David

• 54:49David Hoffman?

  he leaves office in 2025 right

• 54:50Ryan Sean Adams?

  ah it depend it depends who wins elections like that's another Selkis take that we'll have to get to next Tuesday I think that episode's coming back but like

• 54:59David Hoffman?

  thank you for doing that episode

• 55:00Ryan Sean Adams?

  he could definitely be back for a long time depending on the election outcomes

• 55:07Ryan Sean Adams?

  or he could morph into a different David it's a it's a revolving like he could morph into some other um you know place in the cabinet right

• 55:15David Hoffman?

  yeah can't AI have some bubble and they can just take Gary Gensler

• 55:18Ryan Sean Adams?

  imagine Gary Gensler Secretary of Treasury if you want to have some nightmares think about that

• 55:24David Hoffman?

  I don't I don't want to think about that

• 55:26Ryan Sean Adams?

  all right let's end with meme of the week David what are we looking at

• 55:29David Hoffman?

  we got two memes of the week this one this is the classic bell curve meme we've seen these 10,000 times and you have the middle teary eyed complainer guy who's in the middle of the curve and he goes it's fundamentals fundamentals fundamentals which might be me and Ryan and then on the outside on the left curve and the right curve it's it's flows it's all about flows it's who's buying and who's buying more in comparison to who is buying last time so flows

• 55:53Ryan Sean Adams?

  this one hurts me actually but you know what I've got a meme on top of this you know that that sniper meme with like you got the sniper and then behind the sniper is another sniper behind another sniper okay okay so behind this meme is another sniper and it's actually fundamentals because over the long run fundamentals equals flows you can't have flows

• 56:14David Hoffman?

  flows follow fundamentals

• 56:15Ryan Sean Adams?

  yes is that recursive enough for you

• 56:18David Hoffman?

  yeah that's that's for some somebody in the bankless nation please make that

• 56:23Ryan Sean Adams?

  Do you have a second meme?

• 56:24David Hoffman?

  Flow is shooting fundamentals, shooting flows.

• 56:26Ryan Sean Adams?

  Exactly. Whatever. What's this?

• 56:31David Hoffman?

  This is just, this is a meme, but it's also a warning. This is the man pointing at himself in the mirror and looking at himself. And he goes, it's not the bull market. You really are a genius. I believe all of our crypto asset portfolios are up bigly over the last month or so, unless you've been shorting, which you're an idiot then. Cause it's, it's not because we're geniuses, Ryan. It's because it's a bull market and that is something that everyone needs to remember as they go into a bull market and they continue to drink that bull market Kool-Aid. You're not actually a genius. You are a genius for sticking around in the bear market. That is what you are smart for. You put in the work, you stick around, you put in the research, you allocate it correctly. Now it's harvest season, but you're not a genius. It's just harvest season. You already, you already were a genius, but you're not anymore of a genius.

• 57:14Ryan Sean Adams?

  Oh yeah. Inject that humility into my brain, my bloodstream, David. I'm not going to need it until ETH is over 10K, then I'm going to feel super smart. But right now I'm just like, I'm still relatively sober, honestly, at this early stage of the bull market. But check yourself.

• 57:27David Hoffman?

  That's because ETH is lagging behind the market. So we are the designated drivers of crypto right now.

• 57:32Ryan Sean Adams?

  Got to let you know, of course, David and I hold lots of different crypto assets. We are long-term investors, we're not journalists. There's always a link to our disclosures in the show notes. And of course crypto is risky. If you use your ledger wallet, you will know that from earlier this week. You could lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.

• 58:22Ryan Sean Adams?

  Sorry.

• 58:24Ryan Sean Adams?

  I thought they would be making cute sounds and it's just like a.

• 58:27David Hoffman?

  Yeah. No, they're, well, yeah. We'll have to cut that.

• 58:30Ryan Sean Adams?

  Cut all that out.