ROLLUP: Crypto Bear Market? UST Luna Collapse. Instagram NFTs. Coinbase Bankruptcy? Bankless Youtube Ban.

2nd Week of May, 2022 ------ 📣 OPOLIS | Sign Up to Get 1000 $WORK and 1000 $BANK https://bankless.cc/Opolis ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: ⚖️ ARBITRUM | SCALED ETHEREUM https://bankless.cc/Arbitrum ❎ ACROSS | BRIDGE TO LAYER 2 https://bankless.cc/Across 🏦 ALTO IRA | TAX-FREE CRYPTO https://bankless.cc/AltoIRA 👻 AAVE V3 | LEND & BORROW CRYPTO https://bankless.cc/aave ⚡️ MAKER DAO | THE DAI STABLECOIN https://bankless.cc/MakerDAO 🦁 BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave ------ Topics Covered: 0:00 Intro 3:30 MARKETS 4:00 BTC Price 5:14 ETH Price 6:20 BTC Ratio 7:30 Down Bad 8:20 The Fed 11:30 Alt L1s https://twitter.com/RyanSAdams/status/1524530815534780418?s=20&t=vizZmVoPrcVxbam1fHBrDw https://twitter.com/RyanSAdams/status/1524530815534780418?s=20&t=vizZmVoPrcVxbam1fHBrDw 18:41 Coinbase Earnings https://twitter.com/fintechfrank/status/1524128481537400832 22:30 NEWS 23:00 UST Luna Collapse https://twitter.com/terra_money/status/1524785058296778752?s=21&t=E7dei4OsxkNXTk1l9K0kaQ https://twitter.com/terra_money/status/1524785058296778752?s=21&t=E7dei4OsxkNXTk1l9K0kaQ 36:06 Tether Loses Peg https://www.coindesk.com/markets/2022/05/12/tether-loses-1-peg-bitcoin-drops-to-2020-levels-of-near-24k/ 38:05 Coinbase Bankruptcy https://www.wsj.com/articles/coinbase-says-users-crypto-assets-lack-bankruptcy-protections-11652294103 41:27 Bankless Banned from Youtube https://twitter.com/BanklessHQ/status/1523317593947353089 48:58 Optimism Records https://twitter.com/kelvinfichter/status/1523826091961597953 51:00 NFTs 51:24 Instagram NFTs https://twitter.com/BanklessHQ/status/1523404729715359745 53:49 Doodles Billboard CEO https://decrypt.co/99660/ethereum-nft-collective-doodles-names-billboard-executive-new-ceo 54:14 PopeNFT https://www.entrepreneur.com/article/426931 54:54 Poolsuite Manor DAO https://twitter.com/Poolsuite/status/1522311339116539906 55:15 REGULATION 55:44 BitMEX Fine https://www.coindesk.com/policy/2022/05/05/us-court-orders-bitmex-founders-to-pay-30m-for-illegal-trading-2/ 56:51 Germany Tax https://decrypt.co/100086/germany-wont-tax-bitcoin-ethereum-sold-after-one-year-of-possession 57:43 JUNO Oops https://twitter.com/CoinDesk/status/1522290377713192962 58:30 RELEASES 58:40 Hop Drop https://twitter.com/HopProtocol/status/1522284534598967300 1:00:45 Compound Treasury Credit Rating https://twitter.com/compoundfinance/status/1523655146898661376 1:01:35 Zapper iOS App https://twitter.com/zapper_fi/status/1517155336070696961 1:02:25 Zora $50m Raise https://twitter.com/stevejang/status/1522287336209362944 1:03:18 Decrypt Raise https://www.coindesk.com/business/2022/05/03/decrypt-spins-out-from-consensys-mesh-raises-10m-at-50m-valuation/ 1:03:40 JOBS https://pallet.xyz/list/bankless/jobs 1:08:15 Community Questions https://twitter.com/ChristopherSc15/status/1524539103412379650?s=20&t=C0zGfY_hr437Uh3oamnkuw https://twitter.com/ChristopherSc15/status/1524539103412379650?s=20&t=C0zGfY_hr437Uh3oamnkuw https://twitter.com/Jasper_ETH/status/1524492344317419520?s=20&t=C0zGfY_hr437Uh3oamnkuw https://twitter.com/Jasper_ETH/status/1524492344317419520?s=20&t=C0zGfY_hr437Uh3oamnkuw https://twitter.com/daniserra/status/1524570148257947648?s=20&t=C0zGfY_hr437Uh3oamnkuw https://twitter.com/daniserra/status/1524570148257947648?s=20&t=C0zGfY_hr437Uh3oamnkuw 1:15:45 TAKES 1:16:10 DAO Culture https://twitter.com/owocki/status/1524069606855303168 1:18:35 The Best Investments https://twitter.com/RyanSAdams/status/1524703484884488192?s=20&t=HrwnaTnEh4GfX6mk8q5Ybg https://twitter.com/RyanSAdams/status/1524703484884488192?s=20&t=HrwnaTnEh4GfX6mk8q5Ybg 1:20:15 What David’s Excited About 1:22:00 What Ryan’s Excited About 1:24:05 MEME of the Week 1:25:00 Moment of Zen ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures

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

• 0:00Ryan Sean Adams?

  Bankless Nation, it is the second week of May. Oh my God, David.

• 0:03David Hoffman?

  Oh God.

• 0:04Ryan Sean Adams?

  What a week it has been. I didn't even get to what this is. This is the roll up that you're listening to, okay?

• 0:12Ryan Sean Adams?

  What do we do on the show, David?

• 0:13David Hoffman?

  Uh, we recap the news in crypto, which Ryan, I say is always an ambitious endeavor.

• 0:18Ryan Sean Adams?

  Well, we need different words.

• 0:19David Hoffman?

  I don't know if we're gonna make it this week.

• 0:21Ryan Sean Adams?

  Yeah, man.

• 0:22David Hoffman?

  Oh my God, dude.

• 0:23Ryan Sean Adams?

  This is, this is the craziest week I've ever been in crypto.

• 0:26David Hoffman?

  By far.

• 0:26Ryan Sean Adams?

  Like, I could say that. And there have been many crazy weeks, but we just watched a, how, how big was Luna at the outset of this?

• 0:34David Hoffman?

  Combined, about $50 billion. Combined market cap, yeah.

• 0:38Ryan Sean Adams?

  In just like three days' time, four days' time, I don't know, it felt like a year, but it was actually like three days' time, we watched that $50 billion thing go from 50 to zero.

• 0:49David Hoffman?

  To zero. Yeah, you know how we talk about crypto speedrunning, the history of money and finance? Well, we just span, uh, speed ran the Weimar Republic hyperinflation event. That's what we just did.

• 0:59Ryan Sean Adams?

  I mean, yeah, and it's crazy. And look, guys, we're gonna get into, uh, into all of that. And of course, a lot of people lost a lot of money, which is no, no laughing matter. Uh, and we do have sympathy for the folks that lost money. I think this is definitely a time to reflect in the crypto ecosystem. So, uh, and we've said before, it's not about gloating, it's about reflecting on what's happened and learning. And so, we actually did an entire episode on this, David, that we, that we put on the podcast. So, we're, we're just gonna do the tease in today's episode. We're gonna talk about the crash of the Luna ecosystem. But if you want more, go, uh, go tap into that episode that we just released yesterday.

• 1:37David Hoffman?

  Yeah, it's, uh, we're gonna go and try and do the Luna thing in under 10 minutes, but the episode itself is 50, uh, 50 minutes for the full deep dive into the whole entire ecosystem. There is a little bit extra information that has happened in the last 24 hours that we will cover. But in addition to all of that stuff, there's also Coinbase bankruptcy fears, question mark? Uh, should you be concerned? Uh, TLDR, the answer is no, at least in my opinion, but we'll cover as to why people have those fears. Uh, also, Ryan, this is the same week that the Bankless YouTube got banned. I don't know if you remember that. It seems, uh, it seems like it happened forever ago. Uh, and then- And of course Instagram adding NFTs. And so, you know, some bad news, some also some very good news. And then of course, some funds blowing up, which is kind of how you kind of know that

• 2:21David Hoffman?

  we're close to the bottom is when funds start blowing up. That is the way that's what we're going to talk about amongst many other things.

• 2:27Ryan Sean Adams?

  The Instagram thing alone, that would have been the headline this week. And that happened on Monday, and it got completely overshadowed. Okay, Instagram adding NFTs. How big is that? Facebook, 2.9 billion people in the meta Facebook, Instagram, social network, they just added NFTs. It's absolutely gigantic, but it all got overshadowed. Of course, we'll get to all of these things. Before we get there, want to talk a little bit about Opus. And these guys are awesome. Okay, so Opus provides health insurance, payroll, benefits, everything you need to be a self sovereign employee. That means you can work for a Dow. You know how David and I are always saying in these rollups, hey, go quit your corporate job. It's probably boring. Come

• 3:09Ryan Sean Adams?

  join us in crypto. We talk about the job opportunities. This is a tool for how you do that. Because your big question, if you're quitting your job is, okay, what about health insurance? At least if you live in the US, that is like one of the top three questions. Opus solves that problem. David, what do they get if they become an Opus member by the end of May? I think it's May 25?

• 3:30David Hoffman?

  May 25. Yeah, you get you get tokens. And we all like tokens, right? Opus, they have their own native token, and that is a reward for signing up and being a part of the Opus Dow. You get a thousand work tokens. Plus, you also get a thousand bank tokens, because a lot of Bankless Dow members are also Opus customers. So there's a partnership there. Thousand work tokens, thousand bank tokens, when you sign up with Opus by May 25. There is a link in the show notes, bankless.cc slash Opus with a capital O at the start to get your tokens.

• 3:57Ryan Sean Adams?

  Amazing. All right, David, let's get into markets. Man, what a bearish week this was.

• 4:03David Hoffman?

  Yeah, in addition to all the other stuff.

• 4:06Ryan Sean Adams?

  You know, the reason I'm laughing is because we've been through this before and I'm not worried long-term at all about crypto, but what is the short-term Bitcoin price telling us on the seven-day, David?

• 4:16David Hoffman?

  The Bitcoin started the week at $39,000 and it bottomed yesterday, last night, at $26,000.

• 4:24Ryan Sean Adams?

  Wow, 26?

• 4:27David Hoffman?

  Yeah, 39 to 26, down 36%, down to the very bottom on the week. It's recovered since then, we are currently at 29,400 at the time of recording, down 27% on the week. But yeah, the bottom, the bottom on the week was down 36% a single week.

• 4:42Ryan Sean Adams?

  Do you know, when we get in the twenties, like, do you remember the top in like 2017, David?

• 4:47David Hoffman?

  Yeah, 20,000, yeah, 19.29.

• 4:49Ryan Sean Adams?

  Oh yeah, that's right. And it briefly flashed up to 20,000, that was like a miracle. We're getting close to that, we're getting close to the like, the all-time high top of the last bear bull cycle. Incredible.

• 5:02David Hoffman?

  Overall, Bitcoin, from the top of the more recent top of I think like 69,000, nice, 62%, we're down 62% from the very, from the very, very peak to the very bottom.

• 5:14Ryan Sean Adams?

  How about ETH? Is that telling a different story?

• 5:16David Hoffman?

  Similar story, yeah. Started the week at $2,900, bottomed last night at $1,700, that was Wednesday night, we always record these Thursday morning. So, down 31% on the week at the bottom last night, it was down 42%, currently clocking in at just almost $2,000. Down 65% from the top, Ryan, 65%.

• 5:40Ryan Sean Adams?

  And what was our, what was our top in the 2017, 2018 cycle? What number was that, David? I know it's written in your heart.

• 5:47David Hoffman?

  1440.

• 5:48Ryan Sean Adams?

  1440, okay. I mean, we're getting close, right? When you get to the 1,000, 2,000 range, you're starting to get close. Nowhere near the bottom of that cycle, which was like $80 ETH.

• 5:57David Hoffman?

  We're not going to $80.

• 6:00Ryan Sean Adams?

  We're not going to $80.

• 6:01David Hoffman?

  If anyone thinks that they are buying $80 ETH, you are absolutely delusional.

• 6:05Ryan Sean Adams?

  I think it's hard to imagine a world where we get to triple-digit ETH.

• 6:09David Hoffman?

  Yes, I would agree.

• 6:10Ryan Sean Adams?

  But the 1,000 range, we could range here for a while. I don't know. Look, triple-digit ETH could happen. Who knows? Anything can happen in crypto. That would, that would really surprise me, but we'll see what happens. How about the ratio? I wonder what story that's telling us.

• 6:23David Hoffman?

  Ratio was holding up really, really good, except for yesterday. It plummeted at 0.075 down to 0.068. So it took a steep nosedive, which is very unfortunate because I actually took a long ratio position literally yesterday.

• 6:39Ryan Sean Adams?

  I'm sorry, man. Pour one out for David.

• 6:42David Hoffman?

  Pour one out for me.

• 6:43Ryan Sean Adams?

  There's a lot of people who, who need some support in the markets this week. So if you don't laugh, you'll cry.

• 6:49David Hoffman?

  Yeah, let it be known while we're all smiles and joking here, like, oh yeah, no, like we're down big too.

• 6:57Ryan Sean Adams?

  Oh yeah, this is the mask. There's just tears inside, guys.

• 7:00David Hoffman?

  We've just, the difference between us and a lot of others, other people is like we've done, we've been here before. Like I was serious and sad last, last cycle.

• 7:08Ryan Sean Adams?

  Same, same.

• 7:08David Hoffman?

  And so like, you know, this time I, I mean, I know how to take it on the chin.

• 7:12Ryan Sean Adams?

  People are going to be like watching this and be like, you guys sounded so giddy. What? Like, why?

• 7:17David Hoffman?

  What? Did you guys short ETH? What did you do? It's like, I would never short ETH.

• 7:21Ryan Sean Adams?

  Okay, but we're down bad, just like you. All right, guys. It's just if you don't laugh, you'll cry. And this is a temporary thing. So now, when I say temporary, we don't know how long the temporary could be. It could be months. I mean, we've gone through years before too. What about the total global crypto market cap, David?

• 7:37David Hoffman?

  Yeah, I, I didn't look at the numbers for the last week, but it's bad. Overall, oh wait, no, I did. Oh my God. I thought that was the top from the top. Last week we started, we started last week at 1.9 trillion. We are down to 1.3 trillion. We lost $600 billion in total market cap. $600 billion of wealth destroyed. So that's like individual wealth, fund wealth, like, like all the wealth, all the crypto wealth. $600 billion gone.

• 8:04Ryan Sean Adams?

  You can round that up to closish to a trillion. I mean, it's not a trillion, but 600 billion.

• 8:09David Hoffman?

  It's like a trillion over the last like month or so. A trillion dollars of capital destroyed. Down 32%. The total crypto market cap down 32% this week.

• 8:16Ryan Sean Adams?

  Yikes, that is painful. All right, speaking of pain, let's get to the Fed watch because I mean, I think some people are blaming macro conditions in the Fed for some of these events and the Fed just released inflation numbers, actually not, not the Fed, who, this is the Consumer Price Index. It's all tied together because the Fed is obviously watching these numbers.

• 8:38David Hoffman?

  The Fed consumes these numbers, yeah.

• 8:39Ryan Sean Adams?

  They do, they consume, they set monetary policy at least partially based on them. The March CPI Consumer Price Index was 8.5% year over year. The April, that was just last month, was 8.3%, so slight down, but also over what was expected. Yeah, well, slight down from March. So March was 8.5% and April's 8.3%, so slight down, but above what was expected. What was expected was 8.1%. So I don't know what the market did with that, I guess, just more coughing up blood. Yeah, wasn't super favorable.

• 9:17David Hoffman?

  The take from Ralph Paul, which I think makes a ton of sense, is that like the crypto markets, the equity markets, all markets are just down, like down, down, down. Tech stocks are wrecked. And this is largely where a lot of inflation came from in the first place is assets going up and then a lot of people just start buying stuff because they're rich. All those people are no longer buying stuff because they lost all the money. And so the demand is killed. But the thing is like Ralph Paul thinks, Ralph Paul thinks is that demand is already dead, but it's going to take a while for that to show up in the CPI numbers.

• 9:49Ryan Sean Adams?

  It's lagging.

• 9:50David Hoffman?

  It's a lagging indicator. And so like he thinks that like there's already the case for the Fed to stop being like, stop punching the crap out of the market and start to being a little looser, but it's going to take a while for those numbers to actually show up in CPI. Meanwhile, they're keep on, they keep on punching the market, right? And so this is like, this is like, remember that that World War I movie in like 1917 or something where like they already, the war was already over, but they hadn't heard about it yet. And so this guy had to go into the generals to say, hey, don't invade, the war's over. But like, yeah, so this is like that, like it's over, but like news has to like proliferate to the Fed first. Is a take, is a take.

• 10:28Ryan Sean Adams?

  That would be a hopeful prediction. And the reason we know that's Raul Paul's take is because we spent 90 minutes with him earlier this week. That episode is going to release on Monday.

• 10:36David Hoffman?

  It's already out for premium subscribers.

• 10:38Ryan Sean Adams?

  Yes, it is. If you're a premium subscriber. If you're not, you should go get it because you can download it now. But that episode is entitled, Should We Be Scared? And Raul Paul goes through maybe some reasons we should be scared across the market, but also how this market's going to turn around. And the TLDR, as David said, is he actually thinks the high CPI has already been painted, and we're now going to be lower from here. Then he anticipates the bonds will start turning around. Then he anticipates the Fed will start kicking the crap out of the market, and the pain will stop. And ultimately, this is a really interesting prediction. Everyone's going to get another stimulus. He thinks that. He thinks the world governments are going to actually inject cash back into their respective economies through like

• 11:21Ryan Sean Adams?

  direct deposits and this sort of thing. So anyway, stay tuned for that episode. It is here if you're a premium subscriber. If not, it's coming out on Monday. David, what does this mean for alternative layer ones?

• 11:35David Hoffman?

  Oof. Well, I mean, they're all kind of down bad. They're down bad the most. Just like, you know, first, first cycle things always get hit the hardest, Ryan. So the all the alt layer ones are down way worse than the rest of the market. For example, let's start with Cardano, down 65%, down 84% all time high, down Solana, down 81% from all time high, Polkadot, down 83% from all time high, Avalanche, down 78% from all time high. We don't even have Luna on this thing because Luna is literally down 100%.

• 12:09Ryan Sean Adams?

  It's right here, David.

• 12:10David Hoffman?

  There are plenty of zombie chains out there, like EOS, for example. EOS is only down 95% from all time high. We have never seen something go down at 99%.

• 12:21Ryan Sean Adams?

  I have never seen a top, Luna was a top 10 crypto asset, right?

• 12:25David Hoffman?

  Bigly.

• 12:26Ryan Sean Adams?

  And this all happened in a week.

• 12:28David Hoffman?

  Last week. Yeah.

• 12:30Ryan Sean Adams?

  Unbelievable. What does this chart look like? This is just like chart gore.

• 12:34David Hoffman?

  Oh, it's a straight line down.

• 12:35Ryan Sean Adams?

  Oh, my God.

• 12:37David Hoffman?

  It's a straight line down.

• 12:37Ryan Sean Adams?

  Look at it.

• 12:38David Hoffman?

  Yeah. Yeah, it's like it's looking at a train wreck. You can't look away. In stark contrast, not that stark, but you know, decently Bitcoin is down 56%. Ethereum Ether down 58%. This is for a lot of reasons. Again, newer stuff gets hit harder. But also like the newer holders are also, they just get scared more, right? Like Bitcoin and Ether, they have holders that have gone through a bear market. And so this is mostly to be expected. Like there's always a flight to safety in bear markets. So things at the bottom of the crypto market cap like list work their way up towards the top. And it's actually nice to interesting to see Ether not down much worse than Bitcoin. Last year or last cycle, I mean, it was down way more than Bitcoin, just because it was the first cycle.

• 13:24Ryan Sean Adams?

  Yeah, I have a take about this too. I actually think that the death of Luna this week, everything that went on really marks the end of the alternative layer one trade. That has been a super popular trade almost throughout all of 2021 and lasting up until now. But I think the death of Luna sort of kills it for a lot of people because there are some underlying systemic risks in many of these alternative layer ones that haven't really been priced in or factored in. And what I think we're going to see in the next kind of narrative play is actually a return to some fundamentals and rotators will rotate into the next narrative as well. And if the next narrative is stronger fundamentals, I don't think they're going to be flying into Bitcoin so much. They're going to, of course,

• 14:09Ryan Sean Adams?

  because that is the ultimate safety asset in crypto. At least that's perception. I think they're going to be coming to Ethereum and then later to layer twos. And I mean, we've made this case many times on Bankless, but there are just so many catalysts coming up for Ethereum and layer twos. The merge is one. Go listen to our merge episode that we dropped with Hal Press earlier this week. Incredibly bullish episode, just supply and demand dynamics. Also, security, right? It's like Ethereum security is super tried and tested. What we saw in the collapse of Luna is not just the entire economy turned into the Weimar Republic. We saw all of its military, all of its security degraded in basically a 24 to 48 hour period of time now can be attacked by like a few dollars if you have it.

• 14:55Ryan Sean Adams?

  Layer two tokens are coming. That's been a narrative. We've got strong staking returns. So it's really going to be the market, the rotators are going to choose, well, should I rotate? They'll, they'll rotate, of course, into fiat for a while into US dollars. But then they'll come back and they'll say, okay, what's gonna, what's gonna, you know, return fastest in crypto is it gonna be ether or bitcoin? And I would put my money on ether because it has DeFi, it has NFTs, and it has killer economics coming up, especially post-merge.

• 15:24David Hoffman?

  Yeah. And also let's take a moment to reflect on the state of the alt-layer ones right now. Like Luna did the first thing of the crypto market ever and went down basically 100% because of the hyperinflation of the Luna token because of the algo stablecoin. Solana went down for seven hours again for like the sixth or seventh time. I don't even know.

• 15:43Ryan Sean Adams?

  Not down in price, you mean an outage.

• 15:45David Hoffman?

  An outage. The blockchain went out, right? And, and so like now there's the joke of like Solana is only open for business hours. The Avalanche C chain is going up, the, the gas fees are going up, which is like their big claim to innovation is that like Avalanche is the low, low fee chain, but it's not. And they also are doing their scaling via like subnets, but that's really just like off-brand sharding with fractured security. So that's not gonna work. Terra, we already talked about Terra. Phantom also blew up as soon as Entree just left. So that, that ecosystem's down bigly. And so like almost all of the predictions that the Ethereum camp made about the compromises that these alt-layer ones have made have started to come true in the last like three months.

• 16:22Ryan Sean Adams?

  You know, I'll add another one to the pile, which near, which is interesting, some interesting tech there of course too. But they were going in the direction of just kind of copying Terra and launching an algo stablecoin. That's probably a bad idea. It's like wrong timing. Jonah Hill, like, ugh, not right now.

• 16:38David Hoffman?

  There's a reason why Ethereum has made the choices that it's made.

• 16:41Ryan Sean Adams?

  Yes. And we're not saying alternative layer ones will never come back. I'm sure they'll have another season, another narrative. But I do think that this week is going to change the narrative. And of course, David and I, we play narratives a little bit, but not too much. We're more interested in the fundamentals. But I think that's it. The new narrative is fundamental. Fundamentals, at least for some period of time.

• 17:01David Hoffman?

  It always is in the bear market. And while we go into like the layer two season, we're going into layer two season during a bear market. So I don't really think like it's going to be hard for the layer two season to like completely change from market. I don't really think that's going to happen.

• 17:14Ryan Sean Adams?

  Yes.

• 17:15David Hoffman?

  But what is going to happen, Ryan, is layer two season is going to be a builder's bull market, as in stuff is going to be built and it's not going to be reflected in price. And that is your opportunity, listener. This is the opportunity to take the bull by the horns during the bear market is so strong. If you just pay attention to fundamentals.

• 17:34Ryan Sean Adams?

  Yeah, absolutely. And I don't want to go over predictor here, but I actually think while we're in a bear market, it's obviously confirmed by the price action. I don't think this one is going to be as prolonged, David. No way to know that, no way to tell. I feel like this is the sort of thing that's going to be, it's going to take your breath away. It's like, you know, going on a roller coaster, right? You're just going down that big dip. It's going to take your breath away. It's going to be sharp. It's going to be severe. But it's also going to be fast, at least a lot faster than previous bear cycles. Again, that's just kind of a feeling based on where, what I'm seeing in the market. But this does not feel like a multi-year-long winter that where that that lies ahead for us.

• 18:16David Hoffman?

  The chances that the bottom is already in, I would say is pretty significant.

• 18:20Ryan Sean Adams?

  There you go. I, yes, we'll see. I think we could go further down, but it just won't be as long is probably my take, but let's.

• 18:27David Hoffman?

  Oh, I hope it's as long as possible, to be honest.

• 18:31Ryan Sean Adams?

  I mean, the last time it got a little long, David.

• 18:33David Hoffman?

  It was, yeah. During the COVID.

• 18:36Ryan Sean Adams?

  Are we right?

• 18:37David Hoffman?

  I was like, God damn, we're going to do this another, for another year.

• 18:40Ryan Sean Adams?

  Yes. Uh, let's talk about coin, Coinbase.

• 18:43David Hoffman?

  Also bear markets.

• 18:44Ryan Sean Adams?

  Yeah. So what did they do? They just released their earnings report. They are down.

• 18:48David Hoffman?

  Down bad.

• 18:49Ryan Sean Adams?

  From 1.1 billion in Q1 2021 to 20 million. 1.1 billion to 20 million. So that's a steep drop. I think the TLDR is some big hiring. There's some bear market impact. But what's crazy about this, David, is the PE ratio of Coinbase. You know what that is right now?

• 19:08David Hoffman?

  Tell me.

• 19:09Ryan Sean Adams?

  4.6.

• 19:11David Hoffman?

  Oh, God.

• 19:12Ryan Sean Adams?

  Okay.

• 19:12David Hoffman?

  That's lower than Ether. Isn't that lower than Ether right now?

• 19:15Ryan Sean Adams?

  It's really low, okay? It depends how you measure PE for Ether. But like, the average for the S and P is about 20 right now.

• 19:21David Hoffman?

  Wow.

• 19:22Ryan Sean Adams?

  It is 4.6.

• 19:24David Hoffman?

  Dude, things are so oversold. The coin price is at like, I don't know, it was like something like 90 or 80 dollars, went big, down vaguely after, after earnings. It's been going down ever since it listed at like 400 something dollars. It's so cheap. Coinbase is like 14 billion dollars right now.

• 19:39Ryan Sean Adams?

  14 billion dollar market cap right now. Uh, it's absolutely blowing my mind as well. Now, they did do a lot of hiring. I don't know how efficient that was, but um, I mean, that PE ratio is just like crazy to me. Uh, so maybe we're in oversold, sold territory. Uh, guys, we got a lot to cover. What are we gonna cover next?

• 19:57David Hoffman?

  We're gonna speedrun the U S T debacle, the U S D demise, Terra demise. Uh, and then we're gonna talk about the, the Instagram NFTs. We're gonna talk about how Bankless got canceled, but we're back, uh, because you're watching this on the YouTube or you're listening on the podcast. Uh, and then there's just a bunch of other stuff, too.

• 20:12Ryan Sean Adams?

  So much more to cover, guys. We will be right back, but before we do, we want to thank the sponsors that made this episode possible.

• 20:18David Hoffman?

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• 21:03David Hoffman?

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• 21:45David Hoffman?

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• 22:29David Hoffman?

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• 22:51Ryan Sean Adams?

  All right, guys, we're back. We got to start here. UST, Luna, Terra, the biggest collapse in crypto history. David, what are we looking at in this chart?

• 23:00David Hoffman?

  Yeah, this is the UST chart for its trading for tethers. You can see it start to wobble on the 8th of May, but it picked itself back up again. But halfway through the 9th of May, it dropped down to 75 cents, recovered up to 90 cents, but then shortly thereafter, it dropped all the way down to 30 cents to where we are today at 46 cents. I'm pretty sure we are actually lower at this current moment. But this is the USC stablecoin out of the Terra ecosystem, losing its peg bigly, going down bigly.

• 23:29David Hoffman?

  You might be asking, why are, why is it not down to zero if the whole thing has collapsed? Well, that's because Luna collapsed on its behalf. Luna is minted in order to redeem a U S T. So you can, in order to get $1 worth of, if you have $1, one U S T, you can get $1 worth of Luna because it will mint the Luna to make you whole. Then you can go to the secondary market and sell all your Luna to get your dollar back. So Luna has been hyper inflating and it went from where during this whole thing, it started about $85. It is now currently below a single penny, 0.007 cents because it just hyper inflated because the peg became unsustainable. The peg got attacked by an attacker who was very well capitalized.

• 24:12David Hoffman?

  That attacker made out with almost a billion dollars, causing a bunch of fear. So people tried to exit. There wasn't enough liquidity for everyone to exit, causing this hyper inflation event. So Terra, for the first ever token to actually go to zero in the crypto ecosystem.

• 24:26Ryan Sean Adams?

  Look at this, David. So all of these gains were basically within the last year or so, 2021. So people bought here, they bought around, I don't know, 30 cents or so back in the beginning of 2021. And then they just experienced an over 120 X gain, a massive gain.

• 24:44David Hoffman?

  Thousands of percent.

• 24:46Ryan Sean Adams?

  Yes, thousands of percent. And then they lost it all in a single week. That's what happened. I've never seen a chart like this.

• 24:54David Hoffman?

  Yeah. I mean, the only other chart that we've seen do this is Bitconnect, but that was a verified Ponzi scheme that everyone knew was a Ponzi scheme. And so that went to zero, but that was in 2018 and that was at a $3.5 billion valuation. And I layered these two charts on top of each other and controlled it for time. Bitcoin X went from $3.5 billion market cap down to zero. Luna was over $40 billion at the peak. So like the, by far, the craziest destruction of capital event in crypto history, not even close.

• 25:28Ryan Sean Adams?

  Yeah, incredible. Guys, we went through the full story of all of this. If you're looking for all of the details, we just did a 40-minute episode on it and we just launched that on Wednesday. So go check YouTube, go download that on the podcast if you want to hear the full story. But what David and I are doing is giving you the latest update and doing the quick summary right here. And I understand one thing that's happened since we recorded that episode is the Terra blockchain has also been halted. Is that the case?

• 25:54David Hoffman?

  Yeah, that happened actually in the last five minutes or five or 10 minutes because the Luna token is so cheap, it's so cheap that people could just buy it up and start to become validators on the blockchain and then basically 51% of the blockchain to death. So they just said like, yo, this thing is dead. It's over. We're stopping the blockchain and letting whatever assets that remain on the blockchain to be redeemed. There are tokens on there. The tokens are also down bad. But yeah, this is the first, I've never seen a blockchain actually get stopped, Ryan. This is, not only have I never seen something go to zero, I've never seen people actually turn off a blockchain.

• 26:30Ryan Sean Adams?

  It's usually a meme, like the asset's going to go to zero or it's going to kill the blockchain. And this time it actually killed the blockchain. The asset actually did go to zero. Pretty incredible. A lot of people were affected by this. Let's keep that in mind, of course. And again, as we said earlier in the episode, it's like even if you were right about Terra, this is an opportunity to reflect and not gloat. But these are a lot of tweets of well-known people, well-known investors in the crypto space who lost their net worth almost entirely. This is the co-founder of Real Vision, Remy talking. This is a founder of Delphi talking. Delphi Labs. Do you want to read some of these tweets?

• 27:12David Hoffman?

  Yeah, Jose, who's the one that we actually had on the podcast to talk about the bull, he was the Terra bull. And on the podcast, he talked about how he was just extremely bullish on Terra. And he goes, brutal. Like many others, I lost most of my net worth here. My heart goes out to all the other lunatics who are hurting, many much worse than me. If you are feeling down, please get off crypto Twitter and spend some time with family and people you love. My DMs are open too. We'll do a longer tweet head next week. Had some time to reflect and collect my thoughts. Yeah, this is a common story throughout the Luna ecosystem. Obviously, there are many, many people who were bullish on the algo stable coins. That that and sometimes when it when price goes up, instead of taking money off the table, people put more money on the table.

• 27:54David Hoffman?

  And, you know, I mean, I do that too with ether. This is this, but that's my currency of choice. Other people picked Terra as their currency of choice and just never really took money off the table and now have sadly lost a bunch of their net worth.

• 28:07Ryan Sean Adams?

  One thing I

• 28:07David Hoffman?

  On the frontier. This is risky.

• 28:08Ryan Sean Adams?

  Yeah. Well, one thing I will say about Jose is he took the the bull case, but he also went all in. So he wasn't just saying this, and I think that's, you know, e- even though he got massively hit during this event, it is it is commendable. He wasn't just talking. He was putting his money where his mouth was. But this is the the Terra Luna subreddit right now. And what are we seeing here?

• 28:32David Hoffman?

  It's like a bunch of stories of people losing losing their savings. The it's it's a bad place to be. During the the 2018 to 2019 bear market, like pinning the suicide hotline number on our cryptocurrency and other subreddits was a frequent thing like that happened many, many times, like on days like today, where the whole entire market was down 30, 40%. And like some ICOs were going down to like, you know, down 80, 90%. The suicide hotline number was a very common thing to see pinned. A lot of people and what's sad about this is that like Terra, the U S T and the and the yield wrapped around anchor was actually put into products and

• 29:11David Hoffman?

  made into like neo bank savings accounts. So like people, they would just wrap anchor and then like solicit savings and it was branded as a savings account. So a lot of individuals just said, oh, I can get like, you know, 15, 20% on my on my dollars. So I'll deposit into this app. And then the app just put it into into anchor in the back end. And now a lot of retail, a lot of and uniquely, a lot of Western retail. In contrast to Bitconnect, which was largely Eastern, a lot of Western retail really was hit by this. And reason why I differentiate that is because it's it's kind of when rest Western retail people really get their get

• 29:45Ryan Sean Adams?

  Western regulators.

• 29:46David Hoffman?

  Western regulators come and that's when things get serious.

• 29:49Ryan Sean Adams?

  We're starting to see that already. As we mentioned in our episode on Wednesday, this is Janet Yellen.

• 29:57Ryan Sean Adams?

  Talking to Congress, I believe, and she's talking about, she's asking for legislation by the end of this year on stablecoin, stablecoin legislation. The SEC, this is a report that the SEC, they've already been suing Terraform Labs, and one former SEC lawyer is saying that they have every reason to continue to sue Terraform and Terra for UST.

• 30:21David Hoffman?

  Yeah, certainly. Yeah, I mean, the SEC served Do Kwon at Mainnet, Missouri Mainnet last year, actually unrelated, it was at his Mirror Platform, but you can only imagine that they want to go after Do Kwon now.

• 30:36Ryan Sean Adams?

  They're already there.

• 30:38David Hoffman?

  Do Kwon will never be coming back to the United States.

• 30:40Ryan Sean Adams?

  A lot of funds were hurt in the process, too. I know these are rumors, we don't have stories yet, but like some large funds were very exposed to not only Luna and UST itself, but to the entire ecosystem. Remember, Terra is a smart contract platform, there are all sorts of different applications and builders developing on it before it turned Weimer Republic and just inflated away and totally disappeared. I don't know if we can mention any names or what we want to say about this, but what would you say about the funds that were impacted by this and the capital outflow?

• 31:12David Hoffman?

  Yeah, well, there's a lot of very public funds who were all very publicly in the Terra ecosystem. I mean, Mike Novogratz, Ryan, has a Terra tattoo of a wolf with a moon.

• 31:22Ryan Sean Adams?

  Oh, I remember that.

• 31:23David Hoffman?

  Yeah, yeah. So I think we can go ahead and assume that Galaxy Digital took a big hit here. The Delphi Boys, the Delphi team, who are a great bunch of guys. They were all very bullish on Terra. I don't think Delphi Digital was exposed to Terra too much, but it was mainly Delphi Labs that had all the Terra exposure. Hashed, Tribe, Republic, some other funds are definitely hit by this.

• 31:48Ryan Sean Adams?

  Definitely hurting. I, uh, one thing I tweeted out because, you know, some people were saying that even talking about the events of this week, right? In the, in the way that we've been talking about it, which is like, hey, let's, let's reflect. Let's learn some lessons. Let's also show empathy for those impacted, particularly retail who didn't know better. You know, a lot of, a lot of people are saying, hey, don't dance on graves. Don't, uh, don't gloat. And I want to be clear that like, maybe some people are gloating in crypto, but, uh, no one I respect is gloating about what happened. It's very unfortunate. Uh, no one, I said this, no one I respect is cheering for U S T to fail. All we're saying is we showed you that this was a possibility. And by we, I mean,

• 32:31Ryan Sean Adams?

  a lot of people in crypto, Vitalik was one of them, for instance, and many in the community dismissed it like it was maximalist FUD. So here's the thing, a mature community can handle good faith critiques. No chain is perfect. This is an opportunity to grow. I do think this is an opportunity for all of us. But when you start to interact with a community that can't handle, uh, good faith critiques, uh, then that's when your warning signal should start to go off. You know that something is wrong with this community. They're not taking risk. They're not taking criticism. Uh, they're not taking issues maybe seriously enough. And I think part of that culture is why we got where we got with 50 billion in market collapse, uh, basically overnight.

• 33:17David Hoffman?

  And definitely Do Kwan is to blame here. He has been extremely aggressive, extremely mean, extremely toxic on Twitter. And he really created this culture in the Terra ecosystem that that was an okay thing to do. So when we had our Terra Bull versus Bear episode, we got absolutely swarmed in the YouTube comments saying like, we're a bunch of Maxies who don't know anything, blah, blah, blah, blah. And just like, this was the culture that Do Kwan created around his ecosystem of just like fudding every other project that says anything bearish about Terra. Uh, and so like, dude, Do Kwan takes it to have all of the blame here. And he has been, the silence out of Do Kwan has been absolutely deafening in the last week.

• 33:54Ryan Sean Adams?

  All right, guys. So there's, there's a lot more here. There's a lot more that we have unpacked. Go listen to that episode. I want to maybe close this section with this, David. What do you think the takeaways are? What did we learn from this episode?

• 34:07David Hoffman?

  Yeah, crypto is here to completely reinvent money and finance. We are going to completely eat the traditional financial system. And then we're also going to make a much, much bigger financial system and to replace it with. So we can't take shortcuts along the way. This is a long-term game. And when you see ecosystems taking shortcuts, delegated proof of stake, algorithmic stablecoins baked into consensus, fueling growth with unsustainable yields inside of anchor protocol. When you take shortcuts to achieve growth, we threaten the whole viability of this whole entire crypto project. And especially as we have gone into this multi-chain ecosystem, the choices that other layer one blockchains impact other layer ones.

• 34:52David Hoffman?

  There is ether on the Terra ecosystem. There is ether on the Solana ecosystem. The choices that those layer ones make will come to impact the distribution of ether and the mechanics of proof of stake on the Ethereum ecosystem. We cannot have shortcuts determine the future of this whole entire financial system because the whole world will eventually become a crypto-enabled world. And what that world looks like is going to be determined by the choices that we make in the early genesis of this whole entire industry.

• 35:20Ryan Sean Adams?

  Absolutely. I think the best mental model, I think Fisk Ante said something like this, but when you're taking shortcuts like the centralization shortcuts, algo, stablecoin-type shortcuts, you know, the yield type of shortcuts that Terra was taking, you're actually taking returns and taking growth and taking profit from the future. And you're bringing it forward in an unsustainable way. So that is not what we want to do in crypto. And that's why, you know, Bankless has always been about, okay, let's build this thing right. No shortcuts. Let's do it decentralized. Let's obviously be open to all sorts of approaches, but let's make sure they're sustainable and they're long-term. If you want to hear our full take on that, once again, click in the show notes, go to the crypto meltdown episode, the biggest collapse in crypto history where we covered all of this.

• 36:05Ryan Sean Adams?

  David, I wish I could say this was the only stable Bitcoin drama this week, but there was some other stablecoin drama, not nearly as significant, of course, but Tether losing its $1 peg. What's that about?

• 36:16David Hoffman?

  Yeah, the timing on this is definitely just out of fear, I would say. So UST loses its peg, USDT, Tether also starts to lose its peg, but the differences between these two things could not be more stark. Tether has money in the bank, their redeemability window is always open, where UST Terra has to generate confidence from reflexivity, which is a terrible thing to put confidence in. Tether, USD generates confidence from actually being redeemable for actual dollars, which it always is. But nonetheless, during the fears of Bitcoin dropping, Ether dropping, almost half, over half a billion dollars, or half a trillion dollars of capital being wiped out, people started to have fear about Tether and other stablecoins. And so as

• 36:58David Hoffman?

  Tether started to lose its peg, that peg has, I'm pretty sure, since been restored, but this just generally like added to the whole fear of the whole entire week this last week. Here's Paulo Arduino, CEO of Tether/Bitfinex, or CTO of Bitfinex, somewhere in that ecosystem. He goes, "GM, reminder that Tether is honoring its USD redemptions at $1 via tether.to. $300 million have been redeemed in the last 24 hours without a sweat drop." So this is just a fear, a fear, beginning fear, but there's, unless I'm missing something, and I'm pretty sure I'm not, there's absolutely no reason to be fearful of Tether. And there almost has never been any fear to really be had about Tether. Only fear mongering on the Tether ecosystem. Not saying it's a great stablecoin, but it's always been redeemable.

• 37:41Ryan Sean Adams?

  Yes, it has. I think the thing that most in crypto industry would want out of Tether is additional transparency, the kind of transparency we'd see at USDC. And of course, it's not decentralized either, so ideally we want something much more decentralized, but it doesn't pretend to be at the same time. Definitely not going to suffer the same fate as Luna, almost impossible for it to do so.

• 38:05David Hoffman?

  But that is not where the fear ended, Ryan. People, there was a report coming out of Coinbase, a report with the SEC, I believe, that drew concerns about what would happen to user deposits if, in the event that Coinbase might go bankrupt. And this became relevant because, again, the coin price is down bigly, earnings is down. And so people are, and then also on top of that, this report came out that said that when you deposit your crypto into Coinbase, you are not depositing it, you are crediting Coinbase, you are a creditor to Coinbase. And in the event of Coinbase bankruptcy, you would not be guaranteed to get your funds back. You would be in line during bankruptcy court saying, hey, here's what Coinbase owes me

• 38:50David Hoffman?

  because I deposited one Bitcoin, whatever ether, and so I would like to get that back. But you would have to go to court to get that back, according to this documentation. So this also caused fear that people might not be able to get their money back in the event of Coinbase going bankruptcy. First and foremost, there is no reason why Coinbase is going bankrupt. That is just like, in the event of Coinbase going bankrupt, not that this is happening. Coinbase is not anywhere close to bankruptcy. They have plenty of funding, they have plenty of money, so that is not a concern at all. This is in the event that Coinbase does indeed go bankrupt, would I get my money back? And so to address these concerns, Brian Armstrong put out a tweet thread that read and gave out some of these answers. And he goes, while we have no risk of bankruptcy, however, we have included a new risk factor

• 39:32David Hoffman?

  based on an SEC requirement called SAB 121, which is a newly required disclosure for public companies that hold crypto assets for third parties. For our retail customers, we are taking further steps to update our user terms so that we offer the same protections to these customers in a black swan event. Should we have the, we should have had these in place previously, so let me apologize for that. The disclosure makes sense that in these legal protections have not been tested in court for crypto assets specifically, and it is possible, however unlikely, that a court would decide to consider customer assets as part of the company in bankruptcy proceedings. And so this is just because a crypto centralized exchange that takes user deposits has never gone bankrupt before, and since crypto aren't, they are not securities, users, and because

• 40:17David Hoffman?

  of that, there's this legal gray area. So this is a regulatory concern, as in we are, this is unprecedented, we've never seen this before, therefore, we've never had legislation before. So this is actually not a call to action for Coinbase, this is a call to action for more legal clarity, as there almost always is.

• 40:33Ryan Sean Adams?

  Yeah, I think that's the takeaway. I think the question of is Coinbase going bankrupt? Or is Coinbase going to take all of its user funds in the event of bankruptcy? It's kind of much ado about nothing, really. This was, as you said, it wasn't a report by the SEC. This was an SEC filing that Coinbase had to make. They registered it with the SEC. And it's just kind of some legal language near the bottom that I think people took. They hadn't seen it before and they ran with it and they extrapolated it in weird ways. I can't imagine any court system would not decide to refund customers in the event of bankruptcy. And Coinbase is so far from bankruptcy, it's not even a thing to worry about. So much ado about nothing.

• 41:15David Hoffman?

  But yes, but we still want more investor protections and investor confidence. And that is up to the regulatory agencies.

• 41:23Ryan Sean Adams?

  Yes, much more legal clarity in cryptos is needed, that's for sure. How about this, David? We were banned last Sunday.

• 41:30David Hoffman?

  Dude, I completely forgot.

• 41:32Ryan Sean Adams?

  Bankless was banned from YouTube. Okay, this happened on Sunday. It was Mother's Day. In fact, I think I was in bed and I woke up to text that morning, on Sunday morning, David. And I think it was a text from Luke, who's our editor, a text from you. And I turned on the Discord and I saw this screenshot. Ben on our team, who's taking a screenshot of someone on Twitter who said, "WTF just happened to Bankless headquarters because our YouTube was banned, blocked, rugged." We got letters, we got email from YouTube saying, "You have been deactivated."

• 42:07David Hoffman?

  We did get an email.

• 42:08Ryan Sean Adams?

  There was an email to my, yeah, my personal email account. And it said, it said something, it's not like it's helpful. It just says, like, "You broke our terms of service. See you later." I'm like, what did we do? Oh no, what did David do now? Did he upload something inappropriate? But no, it's just our regular Bankless stuff. So what happened here?

• 42:29David Hoffman?

  Well, that was the full story. That's as much as we knew. And so like this happened, this happens Saturday night. And so this was, it happened at like 10 or 11 PM Saturday night. And so we kind of had an all hands moment in the Bankless HQ Discord. And we're like, all right, what do we do? What do we do? What do we do? And we basically stayed silent because it was the middle of the night. We know like the way forward for this is to make a bunch of noise, but we're going to wait until Sunday morning to do that. And so we emailed, we emailed some people that we've had on the show who we know have connections to YouTube. But basically, we knew that it was going to come down to making a ton of noise on Twitter. And so Sunday morning, drafted up a tweet, said like, yo, Bankless was, Bankless is banned.

• 43:10David Hoffman?

  Retweet this to make sure that you want, to let YouTube know that we want to get Bankless YouTube back and instantiated in, and live again. And that, that worked. Definitely the most liked tweet out of Bankless ever. Hit 14,000 likes inside of like, I don't know, a couple of days. And so thank you for everyone that helped do this. Couldn't have done it without you. Couldn't have done it without our community. Especially all the people watching on YouTube right now. This is back online because we were able to make a bunch of noise.

• 43:40Ryan Sean Adams?

  What's crazy about this story is like, once again, no reason was given. We were just completely deactivated. So we had, we had, you know, 150,000 subs, subscribers on Bankless YouTube. And then 10,000 hours of content, like all of our podcasts, all of our videos, all completely wiped. Now, we use YouTube for distribution, of course. So we do have backups of this sort of thing. But to be just completely wiped from a platform on the internet does not feel good. And lots of people say, well, why don't, why didn't you host it, you know, in IPFS? And with Web 3 technologies and platforms. And the truth is, a lot of these platforms aren't ready yet for what we're trying to do. And the other thing is, part of the Bankless mission is we want to reach as many people as possible, a billion people.

• 44:23Ryan Sean Adams?

  Plus, we can't do that unless we have the distribution of Web 2. And so we need Web 2 in the interim. But if they're going to ban us, we will go to take our content to other platforms, certainly. It's one thing I love about our Our podcast, David, is we control the RSS feed. In the podcast world, right? You just publish and then Apple picks it up or Spotify picks it up. Now Spotify is trying to be like a platform, a social media thing. So they're a little bit different. It's very different in the video world. There's no RSS feed for videos. So you have to host it on the platform. So a lot of challenges with that. I mean, the short story is because we got our community, because you helped us raise, make a lot of noise about this. There were tweets, people were pinging YouTube,

• 45:06Ryan Sean Adams?

  people were talking about canceling their subscription, all of these things. That's why we were restored. It was because of you.

• 45:13David Hoffman?

  Thank you.

• 45:14Ryan Sean Adams?

  We appreciate it.

• 45:15David Hoffman?

  Well done. Class for the listener.

• 45:19Ryan Sean Adams?

  Bankless Nation came through for us. Now, it's great because we have a community that can support us. And we've gotten to a size where we can get loud and we can mobilize when we need to. But there were other content producers, crypto content producers, Gabriel is one, who are also banned in this crypto banning incident. It's not the first time this has happened to the crypto industry either. And some people don't have the ability to raise a ruckus, get on YouTube's radar and get decisions like this reversed. So it's a real problem.

• 45:53David Hoffman?

  It really is. And so all of this small, and this happens rampantly throughout the ecosystem where just small indie producers who just like making videos for their small community can't figure out how to get the attention of YouTube. And so those people just do not have a voice because they are silenced by the Web 2 world. Eventually, we got a reply that's from Team YouTube saying, confirming Bankless channel is back up. We're so sorry this happened. Looking into other channels you mentioned in your tweets. Thank you so much for bearing with us, DMing you with more. They still haven't reinstated others. I will say that one of Bankless's best assets that we have is that we talk about the value of censorship resistance and deplatforming. We talk about the perils of Web 2.

• 46:34David Hoffman?

  So this is the wrong community to mess with because we talk about this all the time. And so like when YouTube and other Web 2 platforms come to deplatform crypto relevant communities, like we know what we're doing, what we're dealing with. We know what we're talking about. So it's just like the wrong thing to mess with.

• 46:52Ryan Sean Adams?

  Yeah, absolutely. This is an invading Russia in the winter type of move here. I will say, like, we don't know fully why we were banned and a reason was never given. This could have been bots going crazy. This could have been a complete mistake. But that's just the point, isn't it? Right? It's like, you get banned, you have no idea why, no one tells you anything, and there's no recourse for you. So Voice was our only recourse, and that's what we used. To their credit, YouTube did reinstate us quite quickly. And also, and I thought very highly of this, the CEO of YouTube, okay? She apologized publicly on Twitter. This is Susan from the CEO of YouTube. "We clearly made a mistake, Bankless. Glad our teams were able to fix things quickly."

• 47:38Ryan Sean Adams?

  And then she goes on, "Can you DM me your contact info and we can talk offline? Love the level of conversation happening around crypto on YouTube. Very interested in Web 3 and the role we can play in the topic." So, I think the Bankless community just helped us perform a jujitsu move. We turned crypto YouTube, like, channel gets banned into a conversation with the CEO of YouTube. So now we're about to go have a conversation with the CEO of YouTube. She's scheduled something for David and I. I have no idea what she wants to talk about, but I think it's about this, David: "Very interested in Web 3 and the role YouTube can play in the topic." Okay?

• 48:19Ryan Sean Adams?

  Again, earlier, like, you know, earlier this week, Instagram adding NFTs, okay? Web 2 realizes that they are going to need Web 3 in the future. And so I think we can turn this into something good. Not saying we have full, you know, like, unmitigated trust in YouTube and we want to depend on them for everything in the future, but they can help propagate Web 3 protocols and Web 3 technology. And so we want to use them whenever we can to propagate that freedom. So...

• 48:51Ryan Sean Adams?

  Turn this into a good thing, and it was thanks to the Bankless community.

• 48:54David Hoffman?

  Thank you, thank you, once again, once again, well done, we needed you guys. All right, let's go in and get into some layer two things, because while many, many things are down, some things are up. Here's Kelvin Fitcher on Twitter saying, "Optimism hitting a transaction day record today. Interesting stuff, seems to be holding up." So I put some data together here in this image here. Two things that are at all time highs on optimism is daily transaction fees hitting records for three days in a row. I think dwarfing doubling the daily average transaction fees of history. And also fees earned per day, also at just gargantuan all time highs on the optimism layer two. If you don't know about retroactive public goods funding and how the fees on optimism

• 49:37David Hoffman?

  layer two can go into your pocket, you got to listen to that layer two trillion dollar bull case or layer two opportunity episodes that we put on the Bankless YouTube and podcast recently. But optimism seeing just some great growth, and you just love to see it. Also, a fantastic article, very short article, three minute read, was released called "The Economics of Roll-Up Fees" from Alex Beckett. There's this line that "rollups get cheaper with more users." And it goes into the full deep dive about how this is true. There are various costs for layer twos, fixed costs, variable costs, average variable costs, total costs, marginal costs, average costs. And when you put all of this data together, you get a full comprehensive understanding as to how layer two fees work. But basically, layer two fees go down the more people use them.

• 50:18David Hoffman?

  This is a great resource to understand some more technical content in an easy to understand format. There's a link in the show notes to read all of that. But TLDR is, rollups get cheaper when more people use them.

• 50:29Ryan Sean Adams?

  That's crazy, because layer ones do the complete opposite. They get more expensive as more people use them. So there are no economies of scale, and this is great news for for rollups.

• 50:39David Hoffman?

  And just some quick and final stats on the layer two ecosystem right now. Optimism did $500,000 of fee revenue just yesterday. Arbitrum did 200,000. And layer twos, Ryan, have consumed 2.2% of all daily gas used on Ethereum yesterday, the second highest on record. So when I say, when you guys are, we're all sad that the Prices are going down, but the bull market opportunity is on layer two. You gotta grab the bull by the horns. You gotta grab the bull by the horns.

• 51:07Ryan Sean Adams?

  Yeah, this is, uh, we'll see how layer two is fair during the crypto recession, but it's looking good so far. And, um, yeah, I'm expecting big growth here too.

• 51:16David Hoffman?

  Crypto recession. I like that more than crypto bull market.

• 51:18Ryan Sean Adams?

  Yeah, I think that's, uh, I think that's what we're in. I think it's just a crypto recession, right? Kind of a blip. Uh, NFT stuff, though. This doesn't feel like it should happen during a crypto recession because this is big news. I think on any other week, this would be what we would talk about the most and lead with. Instagram is now providing support for sharing NFTs. Uh, and they started doing this on Monday. Mark Zuckerberg talked about it. I actually didn't get caught up with all of his comments, but the TLDR is we want to work with, uh, Web three. Web three is very important. Uh, we're going to be kind of the centralized pieces, but we recognize that decentralized protocols are also important.

• 51:56Ryan Sean Adams?

  And so we're going to incorporate NFTs into our technology stack, into our platform, into what we're doing in virtual reality, but also more immediately into freaking Instagram. Okay? 2.9 billion people on the planet. Use Facebook, use Instagram, use Meta products. And now we're providing them another gateway to crypto? That is not recession stuff. It's kind of bullish. Uh, what platforms are they plugging in? Well, uh, one of them is going to be Ethereum, of course. Uh, in the future, Solana and Flow as well, but co-launching with Ethereum is actually Polygon. Uh, and this is pretty big. So the rights, a lot of the, the reads will happen.

• 52:39Ryan Sean Adams?

  Like if you're reading NFT data from, from the chain, you just want to display something in Instagram. That's going to be ETH and Polygon, Solana and Flow. But the rights, according to, uh, one of our sources, will happen only at first on Ethereum and Polygon. The rights, that means minting. They're going to mint on Ethereum and Polygon. And this functionality will start to be exposed into Instagram. David, I feel like we have to unpack that entire story. Like, I feel like we need somebody from Meta to actually come on bankless. Maybe, maybe this is enemy territory. I don't know how they view it, but maybe we're collaborators, uh, as well. I mean,

• 53:15David Hoffman?

  They need us more than we need them, Ryan.

• 53:17Ryan Sean Adams?

  Okay. So they just come into our house. Let's come on bankless, Mark Zuckerberg. Let's talk about what you are doing, uh, with NFTs and how you plan to incorporate that into Meta. But I feel like this is super bullish.

• 53:29David Hoffman?

  Yeah, we are actually recording with the Polygon team tomorrow, Friday, for an episode that will come out while we are at Permissionless on Tuesday. So we're going to talk all about this. And of course, I'm sure William Peaster out of the Metaverse Newsletter from Bankless will also be going into the deep dive as well. So if you're looking for more information on this, stay tuned, because Bankless got you, per usual, per usual. Leading into this one, Ethereum NFT Collection Doodles names Billboard executive as new CEO. So NFT PFP communities getting CEO, getting executive leadership. I mean, we saw it work with Yuga Labs and Bored Apes, so why not, why not others? And Doodles definitely have the capital to get it done. So congratulations to Julian Holguin, Holguin, for joining the NFT Collective Doodles.

• 54:12Ryan Sean Adams?

  That's cool. The Pope's getting into NFTs, David. Can you believe this, man?

• 54:17David Hoffman?

  I did see this, dude.

• 54:18Ryan Sean Adams?

  You didn't see that coming? The Vatican is preparing a gallery. That was not a joke.

• 54:22David Hoffman?

  I saw the news. No, I did not see it coming.

• 54:26Ryan Sean Adams?

  The Vatican is preparing a gallery in the Metaverse with NFTs. So that's kind of cool.

• 54:32David Hoffman?

  NFTs are for everyone, man.

• 54:33Ryan Sean Adams?

  Look, everyone's getting into it. I could read more, but you can click a link in the show notes to see what the Vatican and the Pope is doing with NFTs.

• 54:40David Hoffman?

  In an effort to democratize art, the Vatican City, in partnership with augmented reality company Sensorium and Humanity 2.0, will create a virtual exhibition based on NFTs. Did not have that one on my bingo card. Also breaking out of PoolSuite, this one's really, really quick and easy. PoolSuite is a NFT company, NFT team that got this, NFT memberships for joining pool parties. They are launching Manor Dow because they want to buy a manor. So if you want to be a part of Manor Dow, you can join Manor Dow at manordow.com. The aesthetics of PoolSuite, I always thought was really cool. Also, Ryan, this news reporter, this 80s themed news reporter, her name's Ally. I went to college with her. I haven't seen her or talked to her in years.

• 55:21Ryan Sean Adams?

  Yeah, right. This person's from the 80s. How old are you, David? When were you born?

• 55:25David Hoffman?

  Dude, like, she's all about the 80s. She just looks like she's from the 80s. Anyways, it's crazy to see this person I was hanging out with in college on a PoolSuite Twitter account tweet. What's up, Ally? It's been a while.

• 55:36Ryan Sean Adams?

  That's amazing. Do you think she listens to Bankless, David?

• 55:38David Hoffman?

  I don't think so. I think this is her first thing in crypto.

• 55:42Ryan Sean Adams?

  Go look her up. Send this to her. Let's talk about regulation. I mean, we talked about a lot of it, but do you remember when Arthur Hayes and company Bitmex was brought to task for illegal trading?

• 55:55David Hoffman?

  Oh, I certainly, I certainly remember. Absolutely.

• 55:58Ryan Sean Adams?

  Because it seems like so long ago to me. I guess this is, what's happening now? There's a court order, I think this has been mostly resolved, is ordering Arthur Hayes and the BitMEX founders to pay $30 million for illegal training.

• 56:12David Hoffman?

  Actually, $10 million each for the three of them, for a total sum of $30 million. Arthur Hayes, I'm pretty sure his personal net worth at maybe at the peak.

• 56:22Ryan Sean Adams?

  You think he can afford it?

• 56:23David Hoffman?

  It could have been a billion dollars, dude. So a $10 million fine to Arthur Hayes.

• 56:28Ryan Sean Adams?

  Slap on the wrist.

• 56:28David Hoffman?

  Is nothing, is nothing. That is a fart for him. And so, yeah, I think he's gonna be fine. And also, like, I'm kind of curious as to what happens when Arthur Hayes gets out from under just all of this mess, all this legal mess, like, what, he's, he's been writing about crypto, he's been into crypto. What does Arthur Hayes do next?

• 56:47Ryan Sean Adams?

  Yeah, he's not retired, that's for sure. So we will have to see. TradFi stuff, do you know Germany doesn't tax you on crypto if you sell it after one year? Did you know that?

• 56:58David Hoffman?

  I'm moving right now.

• 56:59Ryan Sean Adams?

  Okay, that's, that's a thing, like.

• 57:01David Hoffman?

  F Brooklyn, I'm going to Germany.

• 57:03Ryan Sean Adams?

  Germany isn't going to tax Bitcoin, not going to tax Ethereum if it's sold after one year of possession.

• 57:09David Hoffman?

  Even if they're used for staking, amazing.

• 57:11Ryan Sean Adams?

  This is like the most crypto-friendly legislation I've seen. I mean, maybe, maybe someone lives in a jurisdiction in a country somewhere that has more favorable legislation than this. But of course, in the US, you've got short-term capital gains if it's less than a year, and then long-term, if it's over a year. There's no condition where you're not paying taxes on crypto.

• 57:29David Hoffman?

  Right. Yeah, taxman's always coming.

• 57:32Ryan Sean Adams?

  Yeah, incredible.

• 57:33David Hoffman?

  Not in Germany. Germany, the taxman is banned after one year.

• 57:36Ryan Sean Adams?

  I guess, I guess they are trying to attract crypto natives to the German economy. I'm not sure why.

• 57:41David Hoffman?

  I'm sure it's gonna work.

• 57:43Ryan Sean Adams?

  What's this, David?

• 57:45David Hoffman?

  Yeah, CoinDesk, there was, this is a CoinDesk article saying with the headline, "We effed up big time. Millions of dollars worth of Juno tokens were supposed to be sent to a community wallet, but because a copy and paste error, validators sent the funds to a wrong wallet permanently." $36 million of Juno tokens just deleted.

• 58:04Ryan Sean Adams?

  This chain has been kind of a mess. I believe the quote from the article is "unprecedented community vote last week was supposed to seize millions of dollars worth of Juno tokens from the wallet of a whale who was accused of gaming a community airdrop." So basically, it was a token holder vote to snatch the tokens out of this individual's accounts, and then unfortunately, the validators in the Juno network were going to restore these tokens to their rightful owner, just like fat fingered it, copied and pasted it, and sent it to the wrong address. They screwed up again.

• 58:35David Hoffman?

  Whoopsies.

• 58:36Ryan Sean Adams?

  Yeah, not a good look for it.

• 58:39David Hoffman?

  Fair market things.

• 58:40Ryan Sean Adams?

  Juno ecosystem.

• 58:41David Hoffman?

  All right, moving on, moving on. Last week, the HOP protocol announced HOP DAO, and of course, the HOP token. They say, "Today, HOP begins its journey to become core Ethereum infrastructure operated and controlled by our community. The HOP drop, it's out. You might have got one if you've used the protocol. If you sent more than $1,000 over a HOP protocol, you got the airdrop. If you sent $100 over HOP protocol 10 times, you also got the airdrop. If you liquidity provided, you got the airdrop. You can check your airdrop, probably the link in the show notes." But we also did a show with them. I did a show with Chris Winfrey detailing all about HOP, and where it came from, how it came to be. Very, very little capital investment into HOP protocols, so like, very, very community-owned,

• 59:24David Hoffman?

  ethos is strong. They actually got swarmed by a bunch of their "community members" because the people got mitigated out of the HOP drop because people farmed the hell out of HOP, trying to farm the airdrop. But they did a very good job mitigating airdrop farmers to making sure that their token went to their community members who were actually engaged. And this made a lot of people very, very angry because their farming strategies got nullified. And so like, there's this angry cohort of people who are in the HOP Discord. Yelling at the HOP team, saying, "This is unfair. You're only giving it to whales." But again, if you sent $100 over HOP 10 times, you also got the airdrop. And so I wrote an article in Bank List last Monday detailing the changing airdrop meta,

• 1:00:09David Hoffman?

  because optimism also had these changing airdrop strategies to mitigate farmers and to make sure that the token goes to their community. And so this is the new airdrop meta. And if you want to understand that, read the article. But basically, if you want to get future airdrops, you can't just try and farm them with minimum viable strategies. You've got to pretend like you're a user. So you might as well actually just become a user.

• 1:00:31Ryan Sean Adams?

  Be a real person. Be a real person. You have to create like 40 different MetaMask accounts to try to farm the thing. Just like use it.

• 1:00:37David Hoffman?

  Just use it.

• 1:00:38Ryan Sean Adams?

  As a normal person would use it. And you're more likely to get tokens now. That's a good thing, I think.

• 1:00:44David Hoffman?

  That is definitely a good thing. Compound Finance, this is actually really cool. Today, Compound Treasury received a B- credit rating from S&P Global Ratings. This makes Compound Treasury the first institutional DeFi offering to be rated by a credit rating agency. Pretty cool. Pretty cool. Somebody jokes that this actually makes them a B- is junk bond. But like, that's not... It's not Compound's protocol. It's the assets and lending creditworthiness of the lenders.

• 1:01:12Ryan Sean Adams?

  It's all of the assets inside of it and the lenders that makes it a junk bond status. But at least we're on there.

• 1:01:17David Hoffman?

  We're on there, right? We got our work cut out for us, man. We just need better and better assets, better collateral.

• 1:01:23Ryan Sean Adams?

  We can't expect to start at the top of this rating scale, okay? Moody's and S&P and Fitch? We're gonna work our way up. You call us junk now, but now we're on the charts.

• 1:01:32David Hoffman?

  Up only.

• 1:01:34Ryan Sean Adams?

  What's a lot of iOS apps, I've noticed recently. This is Zapper's new iOS mobile app that just came out here. Go check this out. Go download it. Zapper is a fantastic tool for looking at your NFT and crypto portfolio.

• 1:01:48David Hoffman?

  Don't look at that part, though. Wait until the bull market.

• 1:01:51Ryan Sean Adams?

  Yeah, skip the portfolio. Look at your NFTs. Go to the NFT section, okay? Just look at the pretty pictures and look at prices until we're out of this crypto recession. DYDX, they just also announced the release of their iOS app. They were teasing some big news, and I guess this is it. It's really cool that these crypto DeFi exchanges are starting to get into the mobile space, making their user interfaces that much more friendly and getting us ready for the other side of the crypto recession. David, when we come out of this and onboard another 100 million or 200 million users...

• 1:02:25David Hoffman?

  Also coming out of the news here is Zora with a $50 million raise. So congratulations to Zora. Coming out of Katie Hahn, Coinbase, Kindred Ventures. Zora is an NFT marketplace, but it's also an NFT marketplace protocol. So kind of like how Matcha is a DEX aggregator built on top of 0X. Zora is an NFT marketplace built on top of the Zora aggregator, right? So it's a protocol and an app. And so they've raised $50 million. They have been very explicit that a token is coming. And so if you haven't made a purchase of an NFT on Zora, I might do that for the token.

• 1:03:03Ryan Sean Adams?

  Just do it like a normal human would.

• 1:03:05David Hoffman?

  Okay. Yeah, don't be ridiculous. Just buy something you like. You might get a token, but they have been very explicit that a token is definitely coming. And so, cool, cool. Congratulations to Zora.

• 1:03:16Ryan Sean Adams?

  One other raise that was notable this week is Decrypt. Decrypt is a crypto news, crypto media publication. They just spun out of consensus. They were incubated by consensus and they raised $10 million at a $50 million valuation. Congrats to Decrypt for that. Sometimes we include Decrypt in our stories. We're going through the roll up, you know, sometimes. Good job, Decrypt. Jobs, David. Now is our weekly reminder for you. This is for you. We don't do this for us. This is for you, a reminder to get a job in crypto. Cause even if it's a bear market, crypto's still hiring. David, you got a job in crypto during the bear market, didn't you?

• 1:03:57David Hoffman?

  Oh, yeah. I got, well, I got it going into the bear market, right? I got my job in February of 2018, literally like six weeks after the top. And then that company blew up later that in that August. I got another crypto job. That job blew up and then I got a third crypto job. That company's still around. And then I, and then, and then we started Bankless. But the difference between 2017 and 2018, not to scare you guys. The difference is all of these companies have raised insane valuations over the last year. They are flushed with cash, ready to spend it. So I do not. Think and plus, okay, the first company was an ICO advisory company.

• 1:04:38Ryan Sean Adams?

  Yeah, David worked at some shady companies before Bankless. Not real tea, okay? They were legit.

• 1:04:44David Hoffman?

  After, after that one was an STO, security token advisory, which was like after, once ICOs were done, it rotated into STOs and then both of those blew up.

• 1:04:52Ryan Sean Adams?

  Yeah, it seemed like a good idea at the time, all of these things, right?

• 1:04:55David Hoffman?

  That's just something that we're leaving into the history. That didn't come forward.

• 1:04:59Ryan Sean Adams?

  Well, you know what? It's the future and the present is these companies are hiring. I'm going to go through a few jobs on the Bankless job boards. Where do you find this? At bankless.pallet.com/job. Make sure you sign up. Also, join our collective, submit your resume and these crypto companies will come to you. That is the magic of it. I'm going to name a few, though. Marketing manager at Wanderverse Incorporated. This looks awesome. VP of Engineering, ZKX, a head of growth at ZKX, non-technical. Lead Community Manager, Crypto Skulls Dow. A Senior Product Designer at Parcel Incorporated. Ethereum Core Developer, that is the most technical role you will ever find. A Golang Engineer at Starknet Client.

• 1:05:42David Hoffman?

  Very technical.

• 1:05:42Ryan Sean Adams?

  I could go on. There's a whole bunch of Coinbase job openings. They are still hiring UX designers, all sorts of great stuff on the Bankless job board, as usual. Guys, we've got so much more to cover. Coming up, we get to questions from you guys in the Bankless Nation, one of our new favorite sections. So, a question from a listener who can't stop buying ETH. Maybe needs some help, maybe needs some advice. I don't know if we can help him with that, David.

• 1:06:06David Hoffman?

  It doesn't sound like a problem, Ryan.

• 1:06:09Ryan Sean Adams?

  Who gets gas fees post the merge? Who gets them? Do you get them? Do I get them? We'll cover that and more when we come back after these fantastic sponsors that make this episode possible.

• 1:06:20David Hoffman?

  Arbitrum is an Ethereum Layer 2 scaling solution that's going to completely change how we use DeFi and NFTs. Over 300 projects have already deployed to Arbitrum and the DeFi and NFT ecosystems are growing rapidly. Some of the coolest and newest NFT collections have chosen Arbitrum as their home, all the while DeFi protocols continue to see increased usage and liquidity. Using Arbitrum has never been easier, especially with the ability to deposit directly into Arbitrum through all the exchanges, including Binance. FTX, Quobi, and Crypto.com. Once inside, you'll notice Arbitrum increases Ethereum's speed by orders of magnitude for a fraction of the cost of the average gas fee. If you're a developer who wants low gas fees and instant transactions for your users, visit arbitrum.io/developer to start building your DApp on Arbitrum. If you're a DGen, many of your favorite DApps on Ethereum are already on Arbitrum,

• 1:07:04David Hoffman?

  with many moving over every day. Go to bridge.arbitrum.io now to start bridging over your ETH and other tokens in order to experience DeFi NFTs in the way it was always meant to be: fast, cheap, secure, and friction-free.

• 1:07:18David Hoffman?

  The Layer 2 era is upon us. Ethereum's Layer 2 ecosystem is growing every day, and we need bridges to be fast and efficient in order to live a Layer 2 life. A cross is the fastest, cheapest, and most secure cross-chain bridge. With Across, you don't have to worry about the long wait times or high fees to get your assets to the chain of your choice. Assets are bridged and available for use almost instantaneously. Across bridges are powered by Uma's Optimistic Oracle to securely transfer tokens from Layer 2 back to Ethereum. A token proposal is being deliberated as we speak in the Across forum, where community members will decide on the token distribution. You can have your part of Across's story by joining the Discord and becoming a co-founder and helping to design the fair, fair launch of Across. If you want to bridge your assets quickly and securely,

• 1:07:59David Hoffman?

  go to across.to to bridge your assets between Ethereum, Optimism, Arbitrum, or Boba networks. Maker DAO is the OG DeFi protocol. The Maker DAO produces DAI, the industry's most battle-tested and resilient stablecoin. Using Maker, you don't need to sell your collateral if you need liquidity. Instead, you can spin up a Maker Vault and use your collateral to mint DAI directly. With Maker, the power to mint new money is in your hands. The Maker Protocol is extremely hardened and operated by one of the most experienced DAOs in existence. They've been here since the beginning, they've seen it all, and so you can mint DAI with the assurance that your collateral is safe. Soon, Maker will be present on all chains and L2s, so minting DAI can take place on oasis.app, Xerion, Zapper,

• 1:08:43David Hoffman?

  or any other DeFi protocol that you use. Follow Maker on Twitter, @makerdao, and learn from the oldest and most resilient DAO in existence. And we're back. Questions from the nation. Again, a new segment out of the Friday Weekly Rollup. This is the second time we have done this bit where we're doing this every week going forward. Every Wednesday, there is a tweet coming out of Bankless saying, "Questions from the nation." If you have a question, drop them in here. We'll choose the ones that have a bunch of favorites to answer. This one only has one like, but I personally liked it. I'm pretty sure that's my like, actually.

• 1:09:13Ryan Sean Adams?

  That one like is David's.

• 1:09:14David Hoffman?

  That one like is me. And so, emptybags.eith says, "I can't stop buying ETH. My wife wants a new kitchen. My kid needs braces. It's hurting the ones I love. I bought a sandwich the other day and cried halfway through when I calculated its opportunity cost and the future value of ETH. My question is, should I also be buying Matic?" And Ryan, you're an advisor to Matic, so you can't answer this question. That's not allowed. So I'll go ahead and answer this question. I have personally trimmed almost every single token and sold it into ETH in the last like three months or so, except for Matic. And so that is one of the very few tokens that I still hold. Because, I mean, Layer 2 season is ahead. And also, have you seen how much execution Matic, the Polygon ecosystem, has done?

• 1:09:57David Hoffman?

  They just onboarded NFTs with Instagram. And so like, I'm into the Layer 2 thesis, I'm into the Layer 2 rotation. And Matic has been around for a very long time. They are building very, very aggressively. I, of course, will never advise you to buy anything other than Ether. But Matic doesn't seem like a bad buy.

• 1:10:17Ryan Sean Adams?

  Yeah, I would bucket this in the theme of Layer 2s as well. We are very bullish on Layer 2 ecosystems in general. Matic is partially a Layer 2. It's partially not, but it has a foot in both worlds, has a lot of Layer 2-type acquisitions.

• 1:10:31David Hoffman?

  Well, that's just the Matic Polygon, or the Polygon proof of stake chain. There's also like the infinity other ZK rollups and other chains that are also related to Matic.

• 1:10:39Ryan Sean Adams?

  Yeah, that's what I'm talking about. All right, let's go to the next question. So the next question from Jasper the Frog, Jasper the Friendly Ghost, are you sure these aren't your alt accounts, David? I don't know if these names are real here.

• 1:10:50David Hoffman?

  I'm just attacking the questions from the nation.

• 1:10:53Ryan Sean Adams?

  I mean, that last question kinda seemed like a little fishy there.

• 1:10:57David Hoffman?

  Do I look like I've got a kid with braces, Ryan?

• 1:11:00Ryan Sean Adams?

  You'd look like you'd write that in a question to us. Real world assets are supposed to scale DAI into a real USDC competitor. Are you worried about the introduction of assets that have pricing based on centralized agencies? If DAI becomes, say, 20% USDC, 40% US property, 40% crypto, we've actually increased US reliance. The meat of this question is, what about all of the nation-state dependencies that are backing the value of DAI? What do you say to that, David?

• 1:11:29David Hoffman?

  Yeah, so so many people just misunderstand DAI and how it's built and what its ethos is. So I'll take that USDC isn't the most ideal collateral inside of Maker, but also the Maker team would also agree with that. However, 40% US property, people think that that is like a centralization regulatory risk, but it's actually not, because every single instance of real world assets inside of MakerDAO is its own specific agreement, its own specific legal structure. And that legal structure isn't on-chain. There are individual trusts that are just beholden to the Maker protocol itself. So there is not one single sweeping legislation that could stop all of these assets being

• 1:12:13David Hoffman?

  good collateral inside of MakerDAO. And so if there is like 50 different real world assets, 100 different real world assets, or if the MakerDAO vision comes, like thousands and thousands of instances of real world assets inside of MakerDAO, every single one of those is its own independent thing. There is no centralization amongst all of those things. And so the real world assets itself are decentralized, because there are so many of them. It's decentralization by numbers. And it also gets just regulatory immunity, because it's playing nice with the United States. It's making the capital and value of the United States to work. So it's actually playing inside of an ecosystem that is friendly in a very safe and secure way.

• 1:12:56David Hoffman?

  And so it's both playing nice with regulators, but also being untouchable by regulators at the same time. It's so genius. It's so genius. And people think it's, oh, this is centralization. Like, it's actually not. It's roundabout. About decentralization and it's beautiful.

• 1:13:12Ryan Sean Adams?

  I think, I think that, so the, the one thing that DAI does depend on is, uh, it's basically the game theory that not, not all nation states will, in all jurisdictions, will ban like DeFi and, and DAI and Maker at the same time. It's kind of playing that game theory arbitrage. There's always going to be some friendly jurisdiction out there. If there was a super, if there was a world where the government went ultra evil, all governments, they cluded together, all jurisdictions said, we're going to wipe this thing off the mat. First of all, it's very unlikely because as you said, they have a lot to lose if they do that. Then maybe you could say, hey, we need something different. We need something more than DAI. But in which case we have Ether, we have Bitcoin, we have other, um, stable-ish assets like RAI,

• 1:13:56Ryan Sean Adams?

  which are super interesting, which is basically the DAI play, only it's completely ETH collateral and it's all settled on chain. So I feel like crypto has a lot of options for this. Let's get to the next question, David, because we've got to burn through these.

• 1:14:08David Hoffman?

  Before, before, before that, uh, just one last thing. The strength of the real world assets inside of Maker DAO is related to the strength of property rights of that particular country. So you will never see like Chinese real a- assets inside of Maker DAO, just because, you know, China will come and take your stuff. But like the, the assurances that property rights are good in particular countries will lead into real world assets ins- inside of Maker DAO.

• 1:14:30Ryan Sean Adams?

  Yes.

• 1:14:33Ryan Sean Adams?

  Let's go to this question. Why is everyone saying that ETH staking yield will rise after the merge from the current four and a half percent or so? That's what you get if you stake ETH to more than 10%. I couldn't find any explanation to that, David. What is the simple explanation as to why we're going to get close to 10% post-merge on ETH staking yield?

• 1:14:50David Hoffman?

  Right, so if you are staking, people, right now with proof of work, people pay and, and they, uh, bribe miners to get their transaction ahead of the line, right? If you need your transaction in immediately, you got to pay miners extra above and beyond the base fee, above and beyond the typical gas fee to get your, uh, transaction in the line. This accounts for roughly about 10% of the total transaction fee. And this is where these, uh, the staking yields will increase from the current 4.5% to the now hypothesized 7%. Hypothesized number used to be way higher, like 12 to 15%, but that was during DeFi summer when gas fees were like 400 to 1,000. Now that gas fees have settled down to 10%, the equilibrium has been about 90% base fee, 10% staking tips.

• 1:15:33David Hoffman?

  But in the post-merge, validators get the tips rather than the miners. And so the staking yield for e-staking will go up to include the value of the tips.

• 1:15:42Ryan Sean Adams?

  Yeah, you're going to get those sweet, sweet transaction fees is the TLDR. And the percentage is also affected by the amount of people who stake. So if there's more people staking, if there's more capitals being staked, then the percentage actually goes down. So ideally, I think our conversation with Hal Press earlier this week, he's like, in my perfect world, I'd be the only staker of ETH. Right? Because that would maximize Hal Press's returns, of course.

• 1:16:04David Hoffman?

  That's also my perfect world as well.

• 1:16:06Ryan Sean Adams?

  For Hal Press or for you?

• 1:16:07David Hoffman?

  No, for me, I want to be the only staker of ETH.

• 1:16:10Ryan Sean Adams?

  All right, let's get to the takes, guys. This is the first one from Kevin Awaki. It's all about DAOs.

• 1:16:15David Hoffman?

  Yeah, Kevin Awaki says, "The community has hurt itself by restrictively defining the DAO to mean a community group embracing the tyranny of the structuralist-ness." This is basically, the tyranny of the structuralist-ness basically means like, when there is no structure, there are the people who, people can create tyranny in that structure because there's no rules. And so Kevin follows up and says, "There's been a rather successful movement to discredit the efforts of any DAO with even a loosely centralized structure as not being a really a real DAO." Kevin follows and says, "In my opinion, this is totally wrong. The D in DAO can just mean decentralized governance via a permissionless token. It doesn't have to mean a chaotic loose web of individuals.

• 1:16:56David Hoffman?

  The A in DAO can just mean some level of smart contract automation to help with high-level decision-making. It doesn't, it doesn't have to mean that all initiatives must be atomic, well-formed, compound-style, direct democracy proposals. The O in DAO can just mean what it means in TradFi, a group of people and resources with a mission and structure that to achieve that mission." I've been hammering this home for a while. DAOs are the worst name. They're decentralized autonomous organizations. We should actually just call those DeFi apps. Things like Uniswap, things like Compound, those are DAOs. The DAOs that people Think of like bankless Dow or get coin Dow are actually dues decentralized organizations or digital organizations. They're just basically, we need all the same hierarchies.

• 1:17:39David Hoffman?

  We need all the same structure. We need all the same delegation of responsibilities, but also in the digital realm. And so instead of filing like an LLC with Delaware, you make a transaction on Ethereum to incorporate a token for your digital organization, not a Dow. And so if you are a Dow, it's like, oh, we don't want leadership because we want to be decentralized. You're wrong. You do want leadership because leaders get stuff done. So when instead of thinking DAOs, think dues, digital organizations.

• 1:18:08Ryan Sean Adams?

  I think in the ideal do, the, the truth is everyone can be a leader too, or anyone can be a leader, which means it's very metacritic. You can just, you know, chip in, do something, rise to the top if you're providing value to that organization. So it's not as, not, doesn't need to be as hierarchy, hierarchy. It doesn't need it to be a hierarchy as corporations are as well. There's much more, much more ability to just get things done.

• 1:18:36David Hoffman?

  This is a tweet from some guy, Ryan Sean Adams tweets out, sometimes the best investments in crypto are the ones you don't make. What does that mean?

• 1:18:43Ryan Sean Adams?

  What I mean is like, you know, it's kind of like Warren Buffett where he'll, he'll just sit there for years. Sometimes years goes by and doesn't deploy any capital, doesn't do anything. He's just patient, right? And I think sometimes in crypto, we feel like we always have to be deploying capital, doing something, buying, trading. And that's when we get ourselves in the most trouble, right? Sometimes the best thing you can do is absolutely nothing. Sometimes the best investment you make is the one you actually don't make, right? You just don't give into the FOMO, don't give into the FUD, and you just maybe don't ape into that thing. I think a lot of people learned that with Tara this week. It's just, I, you know, I was getting a nice 20% yield on my, my, my UST, but I didn't

• 1:19:28Ryan Sean Adams?

  realize the risks associated with that yield did not compensate for the yield that I was getting. So the risk adjusted reward was not 20%. It was something very far in the negative direction, right? And so sometimes we'll do our best work and our best investing when we're not overly eager, when we spend time to actually understand what we're investing in, we feel very certain that what we're buying has strong fundamentals. I think we've gotten in some bad habits over the past like 18 months or so, the past bull market of like aping in, you know, that term that just really rose to prominence and phase, let's just ape in. It's kind of fun. Yeah, you want to ape into some things, but like, let's not go overboard with it. And I think

• 1:20:11Ryan Sean Adams?

  people are realizing that truth this week as we're coming out of the Luna crisis. All right, wow. The week is over, but what are you excited about?

• 1:20:19David Hoffman?

  Hang on, we still got Friday left. Whatever happened on Friday, sorry, we didn't cover it. I'm sure something's gonna happen, but Ryan, I'm excited for the cheap ether, man. Like, when we were doing the show with Hal Press, I like opened up my Gemini account and like two X the size of my daily buys. And like, as the price has gone down, like I'm seeing those daily buys, like get me more ether, and so that gets me excited.

• 1:20:41Ryan Sean Adams?

  He did that like mid podcast? What are we talking?

• 1:20:44David Hoffman?

  Oh, yeah.

• 1:20:44Ryan Sean Adams?

  You are crazy, dude.

• 1:20:49David Hoffman?

  Well, sometimes you say wait on your investments and I'm like, well, not for ether.

• 1:20:52Ryan Sean Adams?

  Yeah, he just destroyed my last take. And you were like, look, but this is, this is the yin and yang. Look, I'm all gas, you're all gas, I'm brakes. And that's why you listen to bankless, because you get the taste of both.

• 1:21:03David Hoffman?

  It's also daily average buys, so I'm not aping my entire bank account.

• 1:21:06Ryan Sean Adams?

  That's true. David's not crazy.

• 1:21:08David Hoffman?

  Yeah.

• 1:21:11David Hoffman?

  Anyways, the bear market is like, I spent 2018 through 2020, like learning everything I knew about crypto. And so the bear market kind of feels like home, man. Like, the moon boys are gone, the noise is gone, we return to fundamentals, we can start to think not in one year long timeframes, but decade long timeframes. And that's just really refreshing, really healthy. And like, you know, some, this is the part of the cycle where some people will stick around and learn the value of decentralization, centric resistance, permissionlessness, all the things that make crypto tick. And the people that don't will leave and they'll FOMO back into the next bear market like 50% too late. And so this Boils go to people who stick around and learn these lessons.

• 1:21:54David Hoffman?

  Last week, Ryan, I said I was excited for permissionless and to meet you. I'm still excited about that. I said that last week. And so this week, Ryan, I'm excited for the bear market.

• 1:22:01Ryan Sean Adams?

  Yeah, look, I'm looking forward to that, too. But, you know, I'm also excited about the bear market. I'm just gonna, I'm gonna plus one that because I guess maybe we'll call it the crypto recession instead. Does that make people feel better, right?

• 1:22:10David Hoffman?

  You feel better now, and on.

• 1:22:12Ryan Sean Adams?

  It's like, it's like, uh, bear market building, recession building is the best kind. You said lower prices. We also get back to fundamentals. I feel like for a long time, people weren't, weren't paying attention to the things that that really mattered in crypto. And so we get a lot less noise, a lot more ability to kind of like focus on what matters. A lot more writing gets done. As we've said before, the tourists leave and the settlers stay. So it's kind of a, it's kind of a great time to be in crypto. And the cool thing is, I've never been more certain in any other crypto recession, bear market thing, that crypto was gonna make it out on the other side and be even stronger for it.

• 1:22:51Ryan Sean Adams?

  It's like in 2017, 2018, in that bear market, 2018, 2019, like, I wasn't so sure. I mean, like, when, when E2.

• 1:23:02David Hoffman?

  I did start to question my sanity in 2020.

• 1:23:04Ryan Sean Adams?

  Right? It's the only thing that we've produced here. Bitcoin is DeFi really gonna take off? Will anyone care? Like, keep in mind, none of these things existed. NFTs weren't a thing. Smart contracts only had one use case, and that was the ICO. And it was just absolutely obliterated. Some people said tokens will never come back as a result of this. So we've come so far, and now there's not a shadow of a doubt in my mind that crypto is gonna be here for the long run. So that's why you and I are just smiling throughout this episode. Because even though we're in a crypto recession, even though we got, people have bear market blues and a lot's gone on, a lot of people have lost money, crypto as an asset class isn't going anywhere. And that's why this is still the opportunity of a generation.

• 1:23:47Ryan Sean Adams?

  Now, more than the last time you listened to a bankless episode, right? It's like, there's even more opportunity now because prices are lower.

• 1:23:56David Hoffman?

  Certainly, certainly. Yeah, we invented DeFi last bear market. What will we invent this bear market? I don't know, but it will be great. It will be very big.

• 1:24:04Ryan Sean Adams?

  All right, meme of the week. What are we looking at, David?

• 1:24:07David Hoffman?

  Oh God, I'm just gonna let this play. This is the tweet is what you look like when you show your NFTs to other people. And this is like for the listeners out there, this is like the TikTok video where people are lining up. They're doing a move and they walk off camera. I don't know what game this is, but they all have some like, like thing around their waist, like a fanny pack that's like, I don't-

• 1:24:29Ryan Sean Adams?

  Laser tag, Power Ranger, it's something I don't actually understand.

• 1:24:32David Hoffman?

  I don't know, but these are like grown men, dude.

• 1:24:38Ryan Sean Adams?

  Is this really what we like? Have you ever shown someone one of your NFTs in public?

• 1:24:41David Hoffman?

  Oh, 100%, totally.

• 1:24:42Ryan Sean Adams?

  Really?

• 1:24:43David Hoffman?

  Dude, I have a fucking NFT on my wall, man.

• 1:24:45Ryan Sean Adams?

  So do I. You haven't even noticed it. You haven't even said anything.

• 1:24:48David Hoffman?

  Oh yeah, your turtle's back, huh?

• 1:24:49Ryan Sean Adams?

  Yeah, it's a recession market turtle. Okay, David? It's just slowing things down for the recession. All right? No need to be speedy.

• 1:25:00David Hoffman?

  You were reading the entire podcast for that one, huh?

• 1:25:03Ryan Sean Adams?

  Oh, I had that prepped, you know it. Also, guys, stick around because we've got a really hot moment of zen from Ben from the optimism team. Who knew Ben was so talented? Of course, guys, if you like this episode, make sure you like, subscribe to the podcast. If you're on YouTube, subscribe, of course, like the video. If you're on the podcast, send it to a friend, tell someone to subscribe to Bankless. None of this has been financial advice, though. ETH is risky, crypto is risky as we just experienced 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.