ROLLUP: Friend.Tech | SBF to Jail | SEC vs Coinbase

WRU 3rd Week Of August ----- 🏹 Airdrop Hunter is HERE, join your first HUNT today https://bankless.cc/JoinYourFirstHUNT ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2 ⁠ 🦊METAMASK PORTFOLIO | MANAGE YOUR WEB3 EVERYTHING https://bankless.cc/MetaMask ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum ⁠ 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle ⁠ 🦄UNISWAP | ON-CHAIN MARKETPLACE ⁠https://bankless.cc/uniswap https://%E2%81%A0https//bankless.cc/uniswap 👾STADER LABS | ETHX LIQUID STAKING https://bankless.cc/Stader ----- TIMESTAMPS & RESOURCES 0:00 Intro 3:46 MARKETS 4:52 L2 Beat Check https://l2beat.com/scaling/summary 5:44 US GDP Aint Bad https://www.reuters.com/markets/us/atlanta-fed-model-lifts-us-third-quarter-gdp-view-58-2023-08-16/ 8:38 Base Activity UP https://l2beat.com/scaling/projects/base 13:51 Permissionless Party! https://media.discordapp.net/attachments/1141000052253397112/1141127988935655485/BK_invite.jpg?width=1620&height=2096 https://media.discordapp.net/attachments/1141000052253397112/1141127988935655485/BK_invite.jpg?width=1620&height=2096 18:00 Friend. Tech https://twitter.com/BanklessHQ/status/1690137625414569986?s=20 https://twitter.com/_ThePinkyToe/status/1691818070317081080?s=20 https://twitter.com/0xfoobar/status/1689961952007561216 24:36 FriendMEX https://friendmex.com/ https://twitter.com/nnnnicholas/status/1691591282395619686?t=aB2QdT8F3LV0pNh1rZCCDA&s=19 https://twitter.com/nnnnicholas/status/1691591282395619686?t=aB2QdT8F3LV0pNh1rZCCDA&s=19 31:31 SEC vs. Coinbase https://dailyhodl.com/2023/08/14/blockchain-association-supports-coinbase-in-amicus-brief-filing-says-sec-short-circuiting-legislative-process/ https://twitter.com/MetaLawMan/status/1690355411373772800 35:36 SBF In Jail https://storage.courtlistener.com/recap/gov.uscourts.nysd.590939/gov.uscourts.nysd.590939.200.0.pdf https://finance.yahoo.com/news/the-existence-is-pretty-bleak-the-harsh-conditions-sam-bankman-fried-will-face-behind-bars-202511231.html https://twitter.com/MetaLawMan/status/1691200324269228032 41:37 Fraud Proofs! Do they matter? https://twitter.com/MattFiebach/status/1691600391635427360?s=20 https://twitter.com/koeppelmann/status/1690395159538634753?s=20 https://twitter.com/DCbuild3r/status/1691610447663735288?s=20 50:21 Gitcoin partnered with Shell https://twitter.com/gitcoin/status/1691092823872073728 https://imgur.com/ekdl7LP https://twitter.com/owocki/status/1691488210315288576 54:56 CoW Swap releases TWAP orders https://twitter.com/CoWSwap/status/1692152855694803112?s=20 56:07 Visa testing onchain payments https://twitter.com/digitalmustafa/status/1689741716084215809?s=20 58:24 Argentina's Pro Crypto Candidate https://www.thestreet.com/cryptocurrency/argentina-pro-bitcoin-candidate-javier-milei 1:00:05 Donald Trump's Crypto Wallet https://twitter.com/ArkhamIntel/status/1691875444809781337?s=20 1:01:59 3AC in trouble again https://twitter.com/CoinDesk/status/1691791478815641859?s=20 1:03:38 Bankless Airdrop Hunter! https://bankless.cc/JoinYourFirstHUNT 1:09:26 BitGo Raises https://www.coindesk.com/business/2023/08/16/bitgo-raises-100m-after-scrapping-prime-trust-deal-bloomberg/ 1:12:35 Questions from the Nation https://discord.com/channels/615592155481767941/1058053004705669211/1138917318899027988 1:17:54 Takes Of The Week https://twitter.com/pythianism/status/1690106630610829312?s=46 1:20:10 What Are We Bullish On 1:25:21 Meme Of The Week https://twitter.com/josephdelong/status/1691961456491639022?s=20 1:26:40 Outro and Disclosures ----- Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures⁠ https://www.bankless.com/disclosures%E2%81%A0

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

• 0:00Ryan Sean Adams?

  Now Ethereum is going to become Uber. Now Ethereum is going to become decentralized Twitter. And it just never seemed to kind of click for me. We made some progress. We did episodes of like Farcaster, for example, and Lens. Cautiously excited about those and bullish on those when I started seeing them. But the question is always, how do we get mass adoption? Friend.Tech and this experiment, again, I'm not saying it's going to be Friend.Tech, guys. Okay, don't hear me. This is a POC, okay? This experiment showed me how it can work. In the same way that CryptoKitties showed me how NFTs can work.

• 0:35Ryan Sean Adams?

  Bankless Nation, happy 3rd Friday of August. David, what time is it?

• 0:39David Hoffman?

  It's the Bankless Friday Weekly Rollup, where we cover the entire weekly news in crypto, which is always ambitious, but never yet. We persevere nonetheless into the frontier. How are you doing, Ryan?

• 0:48Ryan Sean Adams?

  I'm doing fantastic. I'm excited to talk about friends, how you sell your friends this week, because that's what you've been doing.

• 0:55David Hoffman?

  How to monetize friends.

• 0:57Ryan Sean Adams?

  Yeah, and then you sold them right after it.

• 0:59David Hoffman?

  That's right.

• 0:59Ryan Sean Adams?

  That's topic number one. It's this app called Friend.Tech that hit, I think Friday, after we recorded the last rollup. And everyone on crypto Twitter was using it. I used it. It's kind of interesting. We're going to talk about that. Number one, Friend.Tech, this new app, is it a fad or is it a new paradigm? What else we got, David?

• 1:17David Hoffman?

  Coming up next, we got SEC back in the hot seat after six law professors, A16Z and Paradigm, who both employ lawyers, all voice their disbelief about how the SEC ought to approach crypto and propose something new in lieu of that.

• 1:32Ryan Sean Adams?

  Also, SBF is on the move. It seems like, David, you might now be neighbors with Sam Bankman-Fried?

• 1:39David Hoffman?

  That's exactly right. This is a factual statement. After that, we'll talk about PayPal, Visa, all making moves into crypto this week. And then Coinbase futures? Coinbase getting some futures? What does this mean? How is this changing Coinbase's international strategy? If they are allowed to roll their own futures here at home? All of this is coming up as we get into this episode. So make sure to like, subscribe, rate and review wherever you get your podcasts, so we can get the good gospel of crypto to the top of these iTunes charts or Spotify charts or YouTube, wherever there's an algorithm. Give this a five star review, so we can push it up to the top.

• 2:11Ryan Sean Adams?

  Guys, before we get in, want to tell you about our friends and sponsors over at Safe. They have a message for you. Safe, of course, is the wallet that everyone in crypto uses. It's one that I certainly recommend. David, what are they rolling out?

• 2:22David Hoffman?

  Yeah, so Safe is proposing their modular, open source Safe Core Protocol as the standard way to move forward for the wallet transition to smart contract wallets. If y'all ever caught my talk at DevCon, there's just universal consensus in the world of wallets and in the world of Ethereum that we are going to all have smart contract wallets by default. But that is not the way things currently are. That is the future that we are trying to get there. Safe, like I said, is proposing their Safe Core Protocol as the standard. And so they want you to check it out. It features an unopinionated core standard as vendor agnostic, high component reuse and robust security, this is how we prevent bugs, while also maintaining interoperability and smart account diversity.

• 3:05David Hoffman?

  So there's a link in the show notes to get started with Safe Core if you are a dev. They also have a SafeCon coming up in Berlin, Germany. So if you are in around Germany or around the European area, they are doing a SafeCon in September. So check out the link in the show notes to get started with that.

• 3:21Ryan Sean Adams?

  Con as in conference, by the way, all right? Not con as in like a con job.

• 3:25David Hoffman?

  Oh, God, I hate that we have to specify this. What is this industry?

• 3:31Ryan Sean Adams?

  This is crypto, David. Let me introduce you. There have been some cons in crypto.

• 3:36David Hoffman?

  Yes, they're in this agenda, actually. Multiple. We have multiple cons in this agenda.

• 3:40Ryan Sean Adams?

  One of them is living down the street from you, as we just said.

• 3:42David Hoffman?

  And one of them is a conference.

• 3:45Ryan Sean Adams?

  But first, markets. Want to thank Kraken for showing us the market charts today. And I got to ask you, David, what's cracking with Bitcoin price?

• 3:52David Hoffman?

  I'm never gonna do. There were two in a row on this one. 29,500 is where we started. We are currently experiencing some red candles coming in. Below 28,000? Are we below 28,000 right now? This is a moment where I'm going to have to ask the Bankless Nation to please pull out your price checker app to check out the prices because they're probably outdated. 27,700, wow. These numbers have updated in the last like five seconds. We are currently dumping down below 5%, negative 5%.

• 4:20Ryan Sean Adams?

  Look at this red candle. Why? Why are we dumping on the red candle?

• 4:22David Hoffman?

  I don't know. Sellers and buyers.

• 4:25Ryan Sean Adams?

  All right. Well, at least it's not flat.

• 4:26David Hoffman?

  At least it's not flat.

• 4:28Ryan Sean Adams?

  For the past three, four weeks. Ether, doing the same thing. This looks like an equivalent chart.

• 4:32David Hoffman?

  Yep. Yeah. So Ether, when I put these numbers in, was at 1740. We are now at 1730. So we are down 6%.

• 4:40Ryan Sean Adams?

  All right, might have to find out afterwards. Also, the ratio down?

• 4:45David Hoffman?

  Ratio is doing normal.

• 4:46Ryan Sean Adams?

  No.

• 4:46David Hoffman?

  It's flat.

• 4:47Ryan Sean Adams?

  Okay, pretty flat. Total crypto market cap, we're still above a trillion, 1.16 trillion. Tell us about Layer 2 beat, though, okay? So this is the total value locked. Tell me this number's going up at least.

• 4:58David Hoffman?

  That number is going up. We are at $10.1 billion TVL on Layer 2 with the activity, the activity passed 5X ETH Layer 1. So combined Ethereum throughput on this Layer 2 is, if you want to hit that activity tab right, is now 5X. Oh, we're down to 4.92. It was 5 earlier. We breached 5 for the first time. We are now at 4.92.

• 5:22Ryan Sean Adams?

  5X of what?

• 5:24David Hoffman?

  Of Ethereum.

• 5:24Ryan Sean Adams?

  Remind us.

• 5:25David Hoffman?

  So ratios of Ethereum's throughput to the Ethereum Layer 1. So Layer 2's are doing 5 Ethereum's collectively versus the Ethereum Layer 1.

• 5:34Ryan Sean Adams?

  Base is now included, I believe, in all of this TVL and activity, which we'll talk about in a little bit, how the base launch has gone so far. But before we get there, want to talk about the trad markets for a second.

• 5:45David Hoffman?

  Oh, boy.

• 5:46Ryan Sean Adams?

  This is, this is the thing that caught my interest this week. This is the Atlanta Fed, and you know, when they say Atlanta Fed, the Fed is, has all these different, I'm gonna call them chapters, they're not chapters, but you know, geographic, you know, banks. The Atlanta Fed apparently has a model which predicts GDP for the US, and their model is currently predicting 5.8% GDP growth in Q3. It seems wildly optimistic, and yet...

• 6:14David Hoffman?

  5.8%? That's annualized over the year, right?

• 6:18Ryan Sean Adams?

  5.8% annualized over the year, but just in Q3.

• 6:22David Hoffman?

  Right.

• 6:22Ryan Sean Adams?

  Okay?

• 6:23David Hoffman?

  5.8% is gargantuan.

• 6:26Ryan Sean Adams?

  That's a big quarter.

• 6:27David Hoffman?

  That is a huge quarter.

• 6:28Ryan Sean Adams?

  You have to take this with a grain of salt, because it's a prediction model, and as more data comes in, it will probably go down, all right? But a lot of the market indicators of GDP have been up, including industrial production, print, which showed factory output jumped 1% in July. So it looks like GDP ain't too bad. I don't know if you ever look at this chart, David, but let me show you. This is on the St. Louis Fed. They keep track of a bunch of the GDP numbers here.

• 6:57David Hoffman?

  Yeah.

• 6:58Ryan Sean Adams?

  This is GDP over time. Look at that. So you see COVID, uh, down 30% on a in Q2 2020. That was a bad quarter.

• 7:08David Hoffman?

  Negative 32%.

• 7:10Ryan Sean Adams?

  We popped up, but we did pop up, uh, to positive in Q3 2020 and positive from the previous. Anyway, this is where we are right now. Uh, maybe I'll circle in on, uh,

• 7:21David Hoffman?

  Let's zoom in. Yeah, that's, that is up into the right chart.

• 7:26Ryan Sean Adams?

  Right? Now, um, so I guess the, the end of the story is, uh, GDP is not looking so bad these days.

• 7:33David Hoffman?

  Yeah, that is insane. Actually, like that.

• 7:36Ryan Sean Adams?

  Are you surprised by this? This is why I put it in here because I was like, oh, I haven't been looking at GDP for a while because, you know, other numbers are more interesting, but these numbers are better than I thought they'd be.

• 7:47David Hoffman?

  Yes. This is a, I will call this a flash as in this is a single point of measurement. It's, it really matters with if this thing continues. This is a, this is a, one of those charts where it's actually the area under the curve. That is the big thing rather than the single point of reference. And so the longer that this is sustained, the better it gets. But man, we're coming in at 5.8%. That is crazy. Where's all this GD? Where are we getting this GDP from? What couch cushion did we look under?

• 8:15Ryan Sean Adams?

  Yeah, that's probably a subject for an entire podcast, but what's interesting is, um, I don't hear the R word recession being said very often these days. And a year ago, that was a kind of a different story. All right. Well, let's, let's actually talk about what base is doing because, uh, no recession in layer twos either. And base launched recently. Was that last week, the week before? Okay, last week, uh, how's it going? What are we looking at?

• 8:41David Hoffman?

  I would say, I said on Twitter, this is one of the takes I gave is that this was the best protocol launch that crypto has ever seen. Wow. Zero hiccups. Bridging was seamless. Like no one has had any problems. UI UX of interacting with base is great. You know, transaction fees are super cheap because it's a layer two, as we know. Failed transactions. No one's talking about any failed transactions anywhere. And there's a ton of apps. There's a ton of things to do. The first, the first time I went on base, I, I ended up minting like five NFTs inside of two minutes. I redeemed one for a hat, which is sitting on my wall over there. It says on chain.

• 9:14Ryan Sean Adams?

  A utility NFT.

• 9:15David Hoffman?

  A utility. Yeah, I minted an NFT and then I went to like a Stripe checkout page and then it was connected my wallet and had the NFT in it. And the $30 hat dropped to zero because that's what the NFT does. And then I bought the hat and all within like five minutes. It was great.

• 9:30Ryan Sean Adams?

  And you actually received the hat?

• 9:31David Hoffman?

  I had, yeah.

• 9:32Ryan Sean Adams?

  It's not a con.

• 9:32David Hoffman?

  You want me to go show you? It's great. Yeah.

• 9:34Ryan Sean Adams?

  Yeah, go show me.

• 9:36David Hoffman?

  I'll go grab it and after I spit off some facts. TVL almost two, over 230 million dollars. So closing in on one quarter of a billion dollars, averaging, averaging almost nine transactions a second over 24 hours. Second, which makes this the second most popular layer two behind ZK sync era, which has got 10.2 transactions per second. Although I bet you the ratio between like users doing things that I was doing like, and then bots on ZK sync is probably different.

• 10:05David Hoffman?

  Transaction volume all time high on August 10th with a record of, you ready for this? 136,000 active wallets on the network.

• 10:13Ryan Sean Adams?

  What?

• 10:14David Hoffman?

  Yeah. Forty two of them were all first time base users. Forty two thousand, not forty two. Yeah. So a whole total number of 142,000 unique wallets. Already bridged assets over to base and claimed the bridge to base NFT. This is gonna be one of those NFTs. Can you, I don't know if you can pull that up, but if you have that pulled up, the bridge to base NFT, maybe you want to scroll for it.

• 10:35Ryan Sean Adams?

  Bridge to base NFT.

• 10:36David Hoffman?

  Yeah. This is gonna be one of those NFTs where like you're gonna show your grandkids like one, back in the day, I used to, I used a bridge to get on to base. And I minted the NFT and it's one of, yeah, one of these things. Yeah.

• 10:49Ryan Sean Adams?

  Wait, how do I get this?

• 10:50David Hoffman?

  Press the mint button, bruh.

• 10:52Ryan Sean Adams?

  Like with a wallet that I've bridged with?

• 10:55David Hoffman?

  Or, yes, exactly. Yeah. MetaMask, Coinbase wallet.

• 10:58Ryan Sean Adams?

  I gotta go find a wallet that I've bridged with.

• 11:00David Hoffman?

  Yeah, yeah, yeah.

• 11:00Ryan Sean Adams?

  That's cool.

• 11:01David Hoffman?

  Or you can bridge. It takes two, like two seconds. Yeah.

• 11:03Ryan Sean Adams?

  Yeah.

• 11:04David Hoffman?

  So some great, great success out of base. I'll go with my hat.

• 11:06Ryan Sean Adams?

  I can't, I can't bridge live on the episode, David. All right. He's getting his hat. One second.

• 11:11David Hoffman?

  On chain hat.

• 11:13Ryan Sean Adams?

  Hey, there it is. Okay. Wait, zoom in. There it is.

• 11:17David Hoffman?

  It just says on chain.

• 11:17Ryan Sean Adams?

  It says, it just says on chain?

• 11:19David Hoffman?

  Yeah.

• 11:19Ryan Sean Adams?

  I like that.

• 11:20David Hoffman?

  On chain hat.

• 11:21Ryan Sean Adams?

  That's a great hat. That's all I need to say.

• 11:22David Hoffman?

  There were other colors. There was like white on white. There was white on black, but I got the red on black because it matches my banquet hat.

• 11:28Ryan Sean Adams?

  Yeah, that looks very, that's very bankless of you. Of course, the best analysis comes from Poopman, one of my favorite Twitter accounts right now. Poopman DeFi.

• 11:38David Hoffman?

  Bro, there are senators that listen to the show, man.

• 11:41Ryan Sean Adams?

  Yeah, I know. They need to respect Poopman. They need to know too, David.

• 11:45David Hoffman?

  Poopman DeFi, thank you for the take.

• 11:46Ryan Sean Adams?

  What is Poopman telling us about Base?

• 11:47David Hoffman?

  Analysis. Poopman DeFi put in a great tweet about Base. Okay, so Base has been earning 3X more revenue than Arb or Optimism, Arbitrum or Optimism, while only incurring 50% of batch submitter costs compared to the others. Interesting. So like this is the cost of actually being a roll up. You submit the batches down to the layer one. Comparing the daily fee margins from transaction fees between Optimism, Arbitrum, and Base, Base revenues in the last week, I think, 1.25 million. Optimism revenue, 424,000. Optimism, I did say Arbitrum, but I stopped because I thought I did. Arbitrum revenue, 424,000. Optimism revenue, 404,000.

• 12:27David Hoffman?

  What makes this more interesting is that the cost of batch submitters on Base is almost the, is the cheapest among all of these. So a submitter cost for Base, 522,000. An Arbitrum submitter cost, 950,000. An Optimism submitter cost, 1 million.

• 12:42Ryan Sean Adams?

  What do you mean submitter costs? Is how much you pay Ethereum?

• 12:45David Hoffman?

  Yes, yes. Yeah, exactly. Right. So like this is, this is one of the costs of the protocol.

• 12:50Ryan Sean Adams?

  So the profit, if you want to calculate the profit, you take those fees, the 1.25 million of Base revenue, and you subtract largely the Base submitter cost, 522K, and we're still left with, what, 700K in profit?

• 13:04David Hoffman?

  That's right.

• 13:05Ryan Sean Adams?

  Hey.

• 13:06David Hoffman?

  And like this is, this is the Coinbase. Coinbase gets 85%, and then the OP collective gets 15%.

• 13:13Ryan Sean Adams?

  Is Wall Street noticing this?

• 13:15David Hoffman?

  No, probably not. Probably not. So he continues. If this data is correct, Base is likely the most cost-effective and profitable layer two right now. Thanks, this is probably from the fame from Coinbase. Base has been able to leverage its network effects and popularity to drive immense on-chain activities and volume. Potentially create a positive feedback loop. Increased volume attracts more users, more users in turn build more projects on Base. And rinse and repeat. And then also, like, we have this new Friends tech phenomenon, which I bet you is one of a nice, healthy chunk of the volume on Base right now. We'll talk about that a little bit later in the show. Base is going to be a growing part of the content at Permissionless. I think I said this last week, but me, Ben Jones from Optimism, Jesse from Base are

• 13:59David Hoffman?

  on a panel at Permissionless, where we're going to talk about some of these details, all about the Base Layer 2 and its relationship to the Optimism Collective. And since we're talking about Permissionless, this is a PSA for all bankless citizens out there. We are throwing a party. You're a citizen?

• 14:16Ryan Sean Adams?

  Yeah, I actually pay for our product. Do you pay for our product?

• 14:20David Hoffman?

  Do you wait, do you pay for it with a company credit card or a personal credit card?

• 14:23Ryan Sean Adams?

  I think a personal credit card because I've never deactivated.

• 14:26David Hoffman?

  You're not a citizen?

• 14:28Ryan Sean Adams?

  David, you hypocrite.

• 14:29David Hoffman?

  No, I am, but I pay with the company credit card. All right, anyway. If you are a bankless citizen, we are throwing a party. How big of a party? 500 people. Who's coming? You, if you're going to Permissionless and you're a bankless citizen, you are invited. And literally everyone who's at Permissionless, who's also been on the podcast before, so like all of the speakers that we invited, and basically all of our friends and, you know, people that we like to hang out with in the space, and also all the bankless citizens. So they're in the Discord, go into the Discord, say, and there is, there will eventually be a link that we're going to hand around to our citizens. And so make sure to come, it's going to be very, very fun. Ryan will actually be there.

• 15:11Ryan Sean Adams?

  I will be present.

• 15:12David Hoffman?

  Is at a bar. So Ryan and I will have drinks.

• 15:15Ryan Sean Adams?

  I'm gonna sit right there.

• 15:16David Hoffman?

  Look at that bar. Yeah, that's your spot? That's your spot?

• 15:19Ryan Sean Adams?

  Yeah, that's my spot. We'll say one thing. Well, yeah, I mean, we won't talk to each other the whole night, right?

• 15:25David Hoffman?

  We don't hang out in real life.

• 15:27Ryan Sean Adams?

  I, one thing I should say is, okay, there's a place for 500, right? We might not be able to give everyone who is a bankless citizen a ticket, hopefully.

• 15:38David Hoffman?

  I don't know how many bankless citizens are showing up to Permissionless.

• 15:40Ryan Sean Adams?

  It's while availability lasts.

• 15:42David Hoffman?

  Yes. Yes, as soon as we hit 500, we, you know.

• 15:46Ryan Sean Adams?

  Gotta cut off.

• 15:46David Hoffman?

  Fire code says we can't have anymore.

• 15:48Ryan Sean Adams?

  Fire code. Nation state regulations are preventing us from gathering more than 500 people.

• 15:54David Hoffman?

  Yeah, they're oppressing the bankless nation. But we're not there yet, so stay tuned for that link if you're a Bankless citizen. It's gonna be fun.

• 15:59Ryan Sean Adams?

  What do we got coming up next, David?

• 16:00David Hoffman?

  Coming up next, we're gonna talk about Friend Tech, the phenomenon that has swept through crypto Twitter passing fad, or new paradigm. If it is a passing fad, is there still lessons to be learned? We will talk about this. SBF, my new neighbor, we're gonna talk about how that happened. And then we are also, we, Bankless, are dropping an app to help you hunt some airdrops. So all of this is coming up and more, but first a moment to talk about some of these fantastic sponsors that make this show possible, especially Kraken, the actual organization who's gonna give us all free drinks at the party. And then Kraken will also be at the party. Thank you, Kraken, for all the free drinks and also sponsoring the Bankless Nation. Cheers. Kraken Pro has easily become the best crypto trading platform in the industry. The place I use to check the charts and the crypto prices, even when I'm not looking to place a trade. On Kraken Pro, you'll have access to advanced charting tools, real-time market data, and

• 16:45David Hoffman?

  lightning-fast trade execution, all inside their spiffy new modular interface. Kraken's new customizable modular layout lets you tailor your trading experience to suit your needs. Pick and choose your favorite modules and place them anywhere you want in your screen. With Kraken Pro, you have that power. Whether you are a seasoned pro or just starting out, join thousands of traders who trust Kraken Pro for their crypto trading needs. Visit pro.kraken.com to get started today. You know Uniswap? It's the world's largest decentralized exchange with over $1.4 trillion in trading volume. You know this because we talk about it endlessly on Bankless. It's Uniswap, but Uniswap is becoming so much more. Uniswap Labs just released the Uniswap Mobile Wallet for iOS, the newest, easiest way to trade tokens on the go.

• 17:27David Hoffman?

  With the Uniswap Wallet, you can easily create or import a new wallet, buy crypto on any available exchange with your debit card with extremely low fiat on-ramp fees, and you can seamlessly swap on mainnet, Polygon, Arbitrum, and Optimism. On the Uniswap Mobile Wallet, you can store and display your beautiful NFTs, and you can also explore Web3 with the in-app search features, market leaderboards, and price charts, or use Wallet Connect to connect to any Web3 application. So you can now go directly to DeFi with the Uniswap Mobile Wallet. Safe, simple custody from the most trusted team in DeFi. Download the Uniswap Wallet today on iOS. There is a link in the show notes.

• 18:00Ryan Sean Adams?

  Friend.Tech swept crypto last week. It's a new application on base. Okay, explain this one to me. What is Friend.Tech and why is everyone flocking to this app?

• 18:11David Hoffman?

  Yeah, it is an app built on base, but okay, so it's it's an app. I think it's for iOS only. Because

• 18:19Ryan Sean Adams?

  It's not. It's not an iOS app, but it. Okay, I see what you're saying.

• 18:23David Hoffman?

  Yes.

• 18:24Ryan Sean Adams?

  It. Okay, it only works on iOS devices, right?

• 18:27David Hoffman?

  Yes. Okay, so they. Why? Why are we like hung up on this one little point? Because of the iOS App Store charges its 30% fees to all apps. So friends.tech did this workaround where Safari on the the native Apple browser that no one uses has this ability, this native ability in your iPhone to actually take a website and then turn it into a little widget square, just like a normal app. But it's not an app.

• 18:51Ryan Sean Adams?

  An icon.

• 18:51David Hoffman?

  It's just an an icon, right? It's just a direct to a specific website. And so using that, it turns it and it behaves like an app. It's kind of clunky, but it's the workaround so that they don't have to pay the Apple Store. They don't have to go through the iOS.

• 19:06Ryan Sean Adams?

  Permission? It's just like the the Internet used to be, David.

• 19:09David Hoffman?

  Right.

• 19:09Ryan Sean Adams?

  Remember, you could just spin up an app and everyone who typed in the URL could access it. We didn't have to go through gatekeepers. We didn't have to pay any app fees. It's like that.

• 19:17David Hoffman?

  Yep.

• 19:17Ryan Sean Adams?

  And it's a little bit harder, right? If you're used to kind of the

• 19:20David Hoffman?

  Kind of clunky because it's okay. It's one of the first of its kind. They actually

• 19:23Ryan Sean Adams?

  But it's doable.

• 19:24David Hoffman?

  I the first time I actually used this was to actually had turned chat GPT into an app before they actually released an app. So like it was a nice little shortcut, right? But this is actually a core part of how this stack is built. Then you sign in using a code. It's like, you know, they're doing their gated launch to help, you know, drum up excitement about it. So I got a code, submitted it, opened up friends.app and I'm given a base wallet and a brand new Ethereum wallet that is non-custodial. No one. That's my wallet because it's built into my phone because it's saved in the little app thing. So I have my own wallet. I link my Twitter account. And so I link my Twitter account to this wallet and all of a sudden I have my friend's profile. And then people start buying shares of me. Why are people buying shares of me?

• 20:06Ryan Sean Adams?

  Yeah, why?

• 20:07David Hoffman?

  I don't know, because I'm just such a valuable. I'm just a valuable friend to own shares about.

• 20:12Ryan Sean Adams?

  Because they want to sell you. They want to make money on you.

• 20:15David Hoffman?

  Well, they they think that other people are also going to buy shares on of me.

• 20:18Ryan Sean Adams?

  Ah, and so there's like a leaderboard for this. One step to you, you actually have to bridge some ether.

• 20:23David Hoffman?

  Yes. Right in order to activate this. Point one ether to get myself started here.

• 20:28Ryan Sean Adams?

  Okay, it's like, you know, $10 or something. You can, you can go a very low amount to kind of bootstrap this thing. Okay, so why, why, yeah, why is everyone so excited about this? Isn't it, is this just a Ponzi game for influencers? Is this the, the only fans of crypto pros?

• 20:42David Hoffman?

  Like, I think it is a Ponzi game for influencers. Part of the incentive is that you, your account, you get 5% of all share trading fees. And then the Friends app creators, the app, the company also gets 5%. And then, so when you buy a share, 90, you, 10% of the value of the share, 5% goes to the profile, the influencer, or you know, your friend. And then 5% goes to the company. And then you retain the share. And so like, me, as somebody with a following, I can be like, oh, go buy my shares. And then I get trading fees. And so I have accumulated 1.4 ether from trading fees.

• 21:22Ryan Sean Adams?

  What?

• 21:23David Hoffman?

  Yes. So to, to date. And there are, let me see, there are, how many people have bought my shares? How many people, I'm checking, I'm checking.

• 21:31Ryan Sean Adams?

  I used to be, I used to be a shareholder, David.

• 21:33David Hoffman?

  You dumped me.

• 21:34Ryan Sean Adams?

  And I sold, I.

• 21:35David Hoffman?

  Yeah, I have 45 holders. I have 45 holders. And then I can't, I don't know this apply, but like, I, I own five shares of myself because I believe in myself. Zero X Bread Guy.

• 21:46Ryan Sean Adams?

  Oh, so you're pumping, you're pumping your own bags, huh?

• 21:49David Hoffman?

  I'm allowed. I'm allowed to do this.

• 21:51Ryan Sean Adams?

  It's transparent, right?

• 21:52David Hoffman?

  Zero X Bread Guy also owns five shares of me. Goon Machine owns four shares. Tangle Account Accountant owns two shares. Altcoin Daily I O owns two shares. Hyro Kennelly from the Bankless Dow, he owns two shares of me. And my current shares are at all time highs. So all my followers, Ryan, are in profit.

• 22:11Ryan Sean Adams?

  What does it, what does it take to get a share of David on friend.tech?

• 22:14David Hoffman?

  One share of David currently costs 0.26 ether.

• 22:18Ryan Sean Adams?

  .26 Ether, are you kidding me? That's hundreds of dollars. How much is that?

• 22:23David Hoffman?

  That is like $400.

• 22:24Ryan Sean Adams?

  $400?

• 22:26David Hoffman?

  Getting less now.

• 22:27Ryan Sean Adams?

  To get a share?

• 22:27David Hoffman?

  You can sell your share too, right? And so also, I have committed to distributing all of my trading fees that I accumulate in seven days, starting on Sunday, to one of my shareholders. So on this-

• 22:40Ryan Sean Adams?

  So you do-

• 22:41David Hoffman?

  On this Sunday, I'm just going full Ponzi. On this, this Sunday-

• 22:45Ryan Sean Adams?

  It's a prize.

• 22:46David Hoffman?

  Like I said, I have accumulated 1.41 Ether in trading fees. That will continue to go up. So every time somebody buys one of my shares, and especially as my shares get more expensive, the point, the 5% of the trading fees that goes into my trading fees earned also goes up. So, uh, .25 Ether to buy one of my shares, 5% of that goes into trading fees, and I am raffling that off to one of my shareholders on Sunday. So go buy my shares.

• 23:11Ryan Sean Adams?

  Wow, that, that, that is, um, worth a disclosure, I think. David, David is benefiting from all of the shares and he is making a commitment. I, hey, you better not refund it to yourself, because you're a shareholder. So you're not-

• 23:25David Hoffman?

  I'm allowed, I'm, I own, I own five shares. If I win, then I get my own trading fees. I will do this in a public, trustless way. Trustless, trust me, bro. But yeah, that's, that's the plan.

• 23:37Ryan Sean Adams?

  What's, what's funny about, so one, one question I have for you about the share price. So it's basically, the shares go up the more demand there is?

• 23:44David Hoffman?

  Correct, it's just like a uniswap curve, yeah. So as somebody-

• 23:47Ryan Sean Adams?

  Oh, it's a uniswap curve?

• 23:48David Hoffman?

  Yeah, yeah, it's the X times Y equals K kind of thing. So as more people buy my shares, they get more pricey.

• 23:52Ryan Sean Adams?

  Okay.

• 23:53David Hoffman?

  I think, I think I'm top 20? I think I'm top 20.

• 23:56Ryan Sean Adams?

  Dang David, now you're just, I feel like-

• 23:59David Hoffman?

  Ultra chill right now.

• 24:00Ryan Sean Adams?

  Let's, let's talk about-

• 24:01David Hoffman?

  I'm like, I'm like top 20, yeah, yeah, yeah.

• 24:03Ryan Sean Adams?

  Let's talk about what, um, this is doing, uh, in general. So friend.tech on base has generated 650,000 for users, for users. They've gone to people like David. After launching a beta a week ago, users received 5% shares you talked about. With over 250,000 transactions and 23,000 unique users, user counts are higher than Ethereum's largest NFT platforms combined. This is a tweet from a Messari analyst giving us this info. So those are some of the stats that make this happen. Okay, so I've got this app open. It's called friendmex.com. What in the world am I looking at right now?

• 24:42David Hoffman?

  Friendmex is a reference to Bitmex, which is this old derivatives exchange that Arthur Hayes used to run before they got in trouble with the law. But this is just like the dashboard of friends if you are a trader. So like bots and people who are making bets on other people are making money here. So like some people have made a lot of money. I think I saw somebody, people like profiting 30 ETH. If you go over to the discover on the far right side and scroll down about 20-ish people, you'll find me again on the leaderboard because I'm coming up, you know, using my trading fees to pump up my position.

• 25:13Ryan Sean Adams?

  You have to keep scrolling, Dan.

• 25:14David Hoffman?

  There you go. Trust I'll say it. You just scrolled right past it. My profile picture's broken. Yeah. I have a market cap of 18.8 Ether.

• 25:23Ryan Sean Adams?

  What's so cool is somebody just-

• 25:24David Hoffman?

  That is the value of David Hoffman, apparently. 18 Ether.

• 25:27Ryan Sean Adams?

  Yeah, you know, I think personally, I think you're worth more, but I'm also not going to be buying a share anytime soon, but maybe I should. Maybe I should.

• 25:35David Hoffman?

  Maybe you should, yeah.

• 25:36Ryan Sean Adams?

  What's cool about this is, and people are maybe asking why we're talking about this so much, this is, this Friendmex website was just spun up. Like, because all of this data is public, all of this data is open, and you can create an exchange on top of base, on top of friend.tech. So friend.tech is powered by smart contracts completely in the background. All of it is open source.

• 26:02David Hoffman?

  Can you go click my profile so you can see my chart? See my chart of my net worth?

• 26:09Ryan Sean Adams?

  Who are you?

• 26:10David Hoffman?

  Right there.

• 26:11Ryan Sean Adams?

  I just click this?

• 26:13David Hoffman?

  Yeah, they can click. Look at that chart. Oh, that's bullish. Oh, that's so bullish. That's a bullish chart. That's a buy.

• 26:20Ryan Sean Adams?

  And you can connect, you can connect your wallet right from this app and trade, although I don't know, it's maybe not audited. Be careful where you connect your wallet here, folks. Okay, we're not necessarily endorsing this. You know why I'm excited about this is, you know, not, not just to buy different influencers like David or Kobe or anything else. I feel like this is very much a proof of concept for a next thing that we've unlocked, right? You know, last week we were talking about Unipig and how that felt like a paradigm shift. We just unlocked layer twos for the first time. This to me feels kind of like this. This to me almost feels a little bit like CryptoKitties did.

• 26:58Ryan Sean Adams?

  At, you know, when was that? 2017, 2018? We were like, oh, NFTs, like we just unlocked some new primitive. This, this Twitter poster agrees with me. Nicholas, friend tech. Friend dot tech is not a revolution in social tokens. It's the wow moment about a brand new stack. PWA progressive web app. That's the Safari app that we're talking about. Web to login. Oh, that's a great point. You could just log in with what? Your Apple ID, your Google ID? Embedded self custodial wallet, so it's still bankless. Layer two transaction fees. So you're not paying like dollars for transactions to this. iOS notifications. It's all of those things combined. And to me, it feels like a proof of concept.

• 27:42Ryan Sean Adams?

  I mean, likely this thing is just, yeah, it's going to pump and dump. It is natively a Ponzi scheme. I guess there is some utility in here in that if somebody purchases a share of someone else, then they unlock this chat room, right?

• 27:55David Hoffman?

  We totally forgot the main point of this app, which is like owning, owning a share unlocks a chat room. And so like, why are people buying my shares? I'm actually in there like answering questions that people have directly. So like providing value to my shareholders, right? Like there's a room, we can direct access to the influencer that you've, you know, influencer. Whoever you own a share for, you can go talk to them directly. And if like they don't respond or they give you shitty answers, you can dump them and move on to the next one until you find a room that provides value to you.

• 28:23Ryan Sean Adams?

  It's cool. I think it's very cool. And I will say it's the most fun I've had in crypto in a while. And it felt, it felt very much like CryptoKitties.

• 28:31David Hoffman?

  Are you, you still active in there?

• 28:33Ryan Sean Adams?

  Um, I

• 28:34David Hoffman?

  I bought it and dumped your share, so I also

• 28:36Ryan Sean Adams?

  I did.

• 28:36David Hoffman?

  You sold me, I, you know, we both sold each other.

• 28:38Ryan Sean Adams?

  I, I activated on Friday and Saturday and I was like, oh, this is cool. I see where this is going. I'mma let other people like do these things, but you know, maybe, maybe, look, maybe, maybe Ryan is underpriced relative to David on friend.tech. You know, I'm just saying that's a possibility.

• 28:54David Hoffman?

  It is, it is a possibility. Yeah. So you're taking a bet that Ryan's gonna start becoming active rather than the guy who's already active.

• 29:04David Hoffman?

  And who's also giving away 1.4 ether to his shareholders. What are you doing? You don't even have 1.4 ether to give away.

• 29:09Ryan Sean Adams?

  Look at this. See this, these are the types of games that like, it's basically every creator is, I suppose, incented in like to do something. And, and I think that the chatroom is the first layer of utility, but other layers of utility can be added. Like what, imagine if this was scaled out to like

• 29:25David Hoffman?

  Kobe was teasing his followers with feet pics.

• 29:28Ryan Sean Adams?

  Okay, right? Like, um, imagine, okay, so I was right. It's, it's only fans for crypto bros. So, but what happens if you scale this out beyond kind of like the, the, um, the crypto crowd? And you scale this out to like, I don't know, music artists. I mean, how much would people pay for like Taylor Swift chatroom? Like a share of that?

• 29:50David Hoffman?

  So much.

• 29:51Ryan Sean Adams?

  You could see how this scales and how the social games, like it's just social clout, economic games, uh, meets crypto. And it just, something about this for me just kind of works or unlocks something that's going to be absolutely big. And again, I don't know that friend.tech will capture all of this, but somebody's going to. We're, we're in a new frontier here.

• 30:11David Hoffman?

  I think really the biggest pressure that I see on this, on the future is the progressive web app. This is the crypto native application that just routes around the 30% tax of Apple. And if this becomes standard, if like a lot of people start, you know, providing services through progressive web apps that are crypto, and so like anyone that wants to do their thing, but they can't because of Apple, they just start doing this progressive web app instead. It's a bargaining chip against Apple because we just routed around their gate.

• 30:39Ryan Sean Adams?

  Guys, it's, it's the open internet, right? Because if you, if you tried to do this on, uh, the app store, they'd want 30% transaction fee for all of this. Like it wouldn't work. Like their systems are not set up to handle crypto economics in this way.

• 30:52David Hoffman?

  And so we, we, it's a big bargaining chip that the crypto industry has to force Apple's hands to either lower their fee or just like crypto in or do something. Or we'll just, you know, progressive web app our way around their gate.

• 31:05Ryan Sean Adams?

  Guys, I'm only half joking when I'm about to say this. Our Ponzi games are going to change the world. We're going to change the internet. Like, for real. This is going to lead to a more open internet.

• 31:14David Hoffman?

  Yeah. Ponzi games versus Ponzi schemes. Ponzi schemes are where somebody is a rug puller. Ponzi games is where it's kind of just a collective game of chicken that we all agree to play.

• 31:22Ryan Sean Adams?

  Well, I mean, some of these influencers, some of these influencers on there might be rug pullers. We don't know. I mean, some of them might be, depends on what game they're playing.

• 31:29David Hoffman?

  They could walk among us right now.

• 31:31Ryan Sean Adams?

  Uh, what do we got next? Okay, the SEC versus Coinbase. I feel like this is the Avengers assembling here, David, because a, a set of lawyers filed what's called an amicus brief, saying the SEC should stop, should leave Coinbase alone, basically, should drop the case. Okay. And what is an amicus brief, you might ask? Do you have that question, David?

• 31:54David Hoffman?

  I don't. I don't. It sounds like some lawyer speak.

• 31:58Ryan Sean Adams?

  Okay. I think it basically is lawyer speak. It's basically where a bunch of outside lawyers who have some level of prestige, some level of legitimacy, write their opinion on a case, either while the case is in progress or, you know, before it goes. Why do they do this? You know, they just want to communicate their position. And so depending on the, the level of legitimacy, I think court system, like the court system, the legal system will kind of look on this, not as a piece of evidence necessarily, but as a, you know, an element of the argument here. And so this is a bunch of lawyers who've stood up and said, hey, the SEC is out of line here. So the law professors are from Yale, University of Chicago, UCLA, Boston University.

• 32:43Ryan Sean Adams?

  And they go through and they school the SEC on the history and meaning of an investment contract, both during and after the passage of the original Federal Securities Act in 1933, the act that gives the SEC their power. And what are their conclusions? Their conclusions are basically that the SEC's argument that crypto tokens are trading on secondary markets, our investment contracts, is wrong. That's what their conclusion is.

• 33:09David Hoffman?

  I think the significance of this is not just that this, you know, opinion is being expressed. The crypto industry has been trying to express its opinion for years now. The significance of this is that it is a band of legal minds who are putting forth a legal document, which is now in the public space for anyone and all to use in any sort of future legal proceedings that they might need to use it. So I think like, really, it's like these Avengers coming together to produce this future document that allows for any other lawyer to leverage the arguments if they ever find themselves in the positions of needing to be leveraged. And so it's ammo, it's collective ammo for us as an industry to shoot. That's, is that fair? I feel like-

• 33:51Ryan Sean Adams?

  I think that's totally fair. Yep. And so this is A16Z Crypto and Paradigm also filing an amicus brief that is as similar, and their argument is also similar. The SEC's approach is a significant and problematic expansion of its regulatory authority, and it even threatens purchases of Taylor Swift concerts and Teslas.

• 34:13David Hoffman?

  And probably friend shares, yeah?

• 34:15Ryan Sean Adams?

  Yeah, definitely friend shares, David. Senator Lummis, as well, has added to the voice of the lawyers coming out swinging against the SEC, asking the courts to actually drop the lawsuit entirely. I don't know how often that happens, where a senator like chastises a regulator and says, like, the court system should absolutely drop the case. Meanwhile, there was actually some good news on the regulatory front this week.

• 34:41David Hoffman?

  Yeah, Coinbase announced that the National Futures Association, which is apparently a CFTC-designated SRO, has approved a Coinbase financials market as a registered futures commission merchant. Coinbase can now offer futures contract in Bitcoin and Ether to eligible customers inside of the United States, inside of the United States. That's us.

• 35:02Ryan Sean Adams?

  That's big, right?

• 35:03David Hoffman?

  Yeah, so Coinbase was recently, like, six months ago or so, making a big push to be international, because they could not do this, because they could not offer competitive products and services that push so much United States capital offshore to things like Binance and FTX. So now, they are given the green light to do some of these future stuff inside the United States, so that Coinbase can do it. So, that's great news.

• 35:26Ryan Sean Adams?

  Yeah, CFTC playing nice, the SEC still not playing nice, but you know, two steps forward, one step back, and we'll get there eventually. David, speaking of two steps forward, SBF is now your neighbor. What were we teasing in the intro? Where's SBF right now?

• 35:41David Hoffman?

  Yeah, so two steps forward to jail. The federal judge has revoked SBF's bail for attempting to tamper with witnesses. LOL. So that he has been moved from house arrest with his parents in Palo Alto, California, to a New York jail awaiting his criminal trial on October 2nd.

• 36:00Ryan Sean Adams?

  Wait, because he was tampering with witnesses while he was in his parents' basement?

• 36:04David Hoffman?

  Yes, yes, he was attempting to tamper with witnesses and therefore violated the terms of the bail. Turns out if you're on bail, you're not allowed to tamper with witnesses.

• 36:12Ryan Sean Adams?

  Okay.

• 36:12David Hoffman?

  Prosecutors, so you know, mental note for.

• 36:15Ryan Sean Adams?

  Seems racist, but okay.

• 36:17David Hoffman?

  Prosecutors allege that SBF repeatedly tried to corruptly influence witness and interfere with a fair trial through attempted public harassment and shaming. Wow. Okay, so, and so he's in New York. Not only is he in New York, he is in Brooklyn.

• 36:33Ryan Sean Adams?

  Really?

• 36:33David Hoffman?

  Yeah, so a federal judge revokes bail for FTX founder Sam Bankman-Fried, and the crypto entrepreneur was sent to a crowded Brooklyn administrative prison known for grueling conditions as he awaits trial in October. The quote from someone who's familiar with the matter says, "The existence is pretty bleak" of the inside of the jail. Federal prosecutors that have alleged that Bankman-Fried, 31, violated his bail agreements, of course, communicating with a New York Times reporter about Caroline Ellison, his former girlfriend, who previously served as CEO of Alameda, of course. And Ellison, Caroline, has pleaded guilty to multiple fraud charges and entered a plea deal to testify against SBF. So we have, you know, ex-girlfriend, ex-boyfriend, you know, in a prisoner's dilemma together.

• 37:19David Hoffman?

  Apparently, SBF released her diary, which he had access to, which is just like. I mean, he's a sleazeball, so it's not beneath him.

• 37:27Ryan Sean Adams?

  Of course he would.

• 37:27David Hoffman?

  But that's why he's back in jail, because he's tampering with witnesses. He's like, I put the address of where the jail is in Google Maps and in my apartment. It's like a 30-minute bus ride. It's not that far.

• 37:40Ryan Sean Adams?

  That's so bizarre. But David, I'm not sure if the corruption stops just with SBF. So the DOJ this week released an indictment alleging that SBF was lobbying Congress and high-level government officials. This is pretty big news. You wonder who else was caught up in SBF's trap here? And it sounds like there's a lot of people on Capitol Hill that may need to provide some answers around this.

• 38:05David Hoffman?

  Yeah, I don't think this is news to anyone in the crypto industry who's been following the FTX case, but of course, FTX and SBF just spewed out what the DOJ is alleging to be over hundreds of millions of dollars to both Democrats and Republicans. So, quote from this article, "The defendant's use of customer deposits to conduct a political influence campaign was a part of the wire fraud scheme charged in the original indictment. And as a part of the originally charged money laundering scheme, the defendant also concealed the source of fraudulent proceeds through political straw donations." So, the DOJ is on the case, which is great. We're gonna get some more clarity, and we're gonna see who turned a blind eye to all that incoming money from FTX.

• 38:43Ryan Sean Adams?

  David, this is absolutely crazy, but this actually might make Gary Gensler a witness in this case, okay? Which would mean, if that happens...

• 38:52David Hoffman?

  I don't think, what is not being charged is that Gary Gensler received money. That's not, just to make sure that's crystal clear.

• 38:59Ryan Sean Adams?

  It's true. We don't know, but he might be a witness.

• 39:02David Hoffman?

  He could still be compelled to testify.

• 39:05Ryan Sean Adams?

  And that would mean that SBF's lawyers would be able to cross-examine Gensler under oath at a trial.

• 39:13Ryan Sean Adams?

  Yeah, where can I buy tickets?

• 39:15David Hoffman?

  If he's was pumping right now, that would just make my day. It would be a complete day, but we're dumping instead.

• 39:20Ryan Sean Adams?

  What do we got coming up next, though, David?

• 39:22David Hoffman?

  Twitter fights over fraud proofs. We're gonna talk about this controversy and how you should understand it. Also, Gitcoin partnering with Shell. The oil company has obviously caused some controversy. We'll talk about both sides of that argument as well. And also, we found Donald Trump's ETH address. You'll never guess what he's holding. All of this coming up and more. But first, I'm going to talk about some of our fantastic sponsors that make the show possible, especially MetaMask Portfolio. If you have not opened up MetaMask Portfolio, it is your battle station for the multi-chain bull market that is coming. So check it out. There's a link in the show notes. Are you a MetaMask user? Well, you're listening to Bankless, so of course you are. The wallet you know and love just got a whole lot better. MetaMask Portfolio is the ultimate one-stop shop for all of your crypto needs. It gives you a holistic view of your crypto

• 40:03David Hoffman?

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• 40:46David Hoffman?

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• 41:31David Hoffman?

  bug bounty with ImmuneFi. Go to staterlabs.com/eth/stake to access the Stater staking protocol today. As we've gotten into Layer 2, some of the Layer 2 wars are... Heating up. And so this week it was fraud proofs, fraud proofs, do they matter? And so this is a post from Matt Feibek. He says, it's crazy how few people are aware of the risks of using optimism and other OP stack rollups, given that they do not have active fraud proofs. It's honestly, honestly, one of the most substantial risks to the Ethereum ecosystem today. If the centralized sequencer wants to land invalid output proposals, it can. In other words, the centralized optimism sequencer can settle a malicious transaction that removes all $3 billion in the bridge to an address of their choosing.

• 42:14David Hoffman?

  There's nothing that anyone can do about it. It's really just a decentralization facade. We need to push these rollups to implement fraud proofs yesterday. So that is the, the, oh my God, this is really a big deal. People should pay attention to this. Take number one. Here's take number two.

• 42:27Ryan Sean Adams?

  Well, can I ask though, David, just, just to like, set the basis. So who doesn't have fraud proofs? Which chains do and which chains don't? Is this all on layer two beat?

• 42:36David Hoffman?

  Yeah, this is all on layer two beat. Most chains do not have fraud proofs. The Arbitrum bold, most, most rollups, yes. The Arbitrum bold announcement is Arbitrum gaining decentralized fraud proofs. They, they still need that to be merged into the protocol, but I mean, the DAOs was going to vote yes, and it's going to happen. All OP stack rollups do not have fraud proofs because.

• 43:00Ryan Sean Adams?

  Including base, which is maybe why some of this narrative is heating up a bit.

• 43:04David Hoffman?

  Right. So like the reason, yeah, that's exactly right. Why is this conversation happening now? Well, I think it's actually just like a normal immune response of the crypto industry. Sometimes stuff like this needs to happen. We are seeing new users and TVL and Mindshare grow, go to base, which is a fork of the OP stack, a clone of basically optimism bedrock. And then also optimism bedrock doesn't have fraud proofs because they just haven't implemented it yet. And so now the, while there was previously some like grace to give in about layer two teams about their state of fraud proofs or lack thereof, now people are like, okay, these things are main net now. Yeah, people are looking for dates and... Yeah, it's no longer time to be not having fraud proofs. So that was the first take. The second take is from Martin Koppelman,

• 43:49David Hoffman?

  who's maybe saying this a little bit more punchy. "To be very clear, until they add fraud proofs, all the $3 billion that are in the optimism and base bridges can be taken out at any time, and users can do nothing about that. Not sure under what definition this is called non-custodial." Okay, so these are like the two takes about like, "Yo, like, red fire alarm sounds. We should be very cautious and concerned about this." There is also the other half of the story, and I think DC Builder said this very well. He said, "Tired of seeing takes shitting on optimism for not having Canon Live." Canon is their version of fraud proofs. There was a lot of fighting on crypto Twitter, and so I'm about to read the next sentence, and it was not in response to any of the just two takes. There was a lot of just like,

• 44:33David Hoffman?

  if you're in crypto Twitter, you know that shit gets thrown. "People should get a life. Intention-seeking is not what is going to get you anywhere. Yes, Bedrock was a prerequisite for Canon. Yes, Canon has been the main focus of optimism ever since they shipped Bedrock almost two months ago. Yes, all of the progress is available on GitHub for y'all to see. Stop making long threads about why your rollup is better when you either have permission fraud proofs live or a ZK system that is as mature as a toddler and with more security surface area than the world's oceans." David, the kids are fighting. Okay, and then, okay, so then AJ Warner from Arbitrum responded to this tweet, which I thought was very, very useful. And so I'll just read that one as well. "I'm obviously very biased here, so take my perspective with a Himalayan-sized grain of salt, but I don't think this criticism is because they don't have fraud proofs live. Building proofs is hard.

• 45:18David Hoffman?

  Decentralizing proofs and making them permissionless is harder. If they think the best roadmap for the project was emphasizing Bedrock and making all of its components modular before building the prover, that is a super reasonable roadmap." I'm going to unpack that really quick before continuing. Building Bedrock, which is the current implementation of Optimism, Mainnet, and also Base, was a precursor step to implementing fraud proofs. You need the Bedrock scaffolding to insert the fraud proofs module into the scaffolding. They needed Bedrock first so they could get to implementing Canon. So I'll continue on with AJ's take. I think the criticism, which in my opinion is completely justified, is the other decision that have also been made alongside that. It stems from my opinion that having some sort of prover with training wheels should

• 46:02David Hoffman?

  be necessary to qualify as a stage zero rollup. This is how I think things have evolved and represents the frustration of many other rollup teams. I don't think any other team or community could have or would consider pulling off the below set of operations. One, if you want to prioritize a roadmap that will take years to build a prover, you don't have to launch a rollup. The ZK teams didn't, and they lost a significant opportunity for market share and land grab. Two, if you launch, you don't have to launch a token and massive incentives to use the technology before the prover is built. Three, if you want to incentivize people to use your implementation, you don't have to prioritize building out the OP stack in Superchain so that anyone in the world is encouraged to launch their own rollup. One of the reasons why I think the first bullet was acceptable by the community was

• 46:44David Hoffman?

  because the Optimism team is trustworthy, and nobody thinks that they will steal funds, and I 100% share that sentiment, but they have extended that trustworthiness to this stack in which anyone can run it, and the trust assumptions completely fall over. Let me try and distill this. So the OP stack strategy, which I'm a big fan of, is to try and get as many chains as possible. Fork the OP stack, build your own chain, let's democratize access to building chains. It's one of the cool things about this technology, which I think is a great strategy. Then AJ is articulating here that that is like, the order of operations is bad because if you promote doing that before you solve your fraud proofs module, well then you're actually promoting just the proliferation of centralized chains, which I think is a valid take.

• 47:26Ryan Sean Adams?

  Can I interject there? So it's not that this hasn't been done before, right? So it's sort of a market share type of prioritization. I also think you can argue that Bedrock is also necessary first and making that open source and releasing that. But there's definitely an argument that some of Optimism's strategy has been a market share type of strategy. We've also seen this before. Polygon launched for years a proof of stake network, and that was a sidechain. And I remember before a lot of You know, people were angry about this. But I also remember that Polygon took market share away from the Binance chain, which to my knowledge, has no plan to actually phase into a volition or a roll up of any kind.

• 48:11Ryan Sean Adams?

  Right? And so Polygon went with a market share approach and they added security and decentralization later. And that seems to be a bit more what optimism is doing in this case. And so some people are griping with the order of operations here.

• 48:26David Hoffman?

  Yes, that's right. And so like, it's a little bit of like damned if you do, damned if you don't for the optimism roadmap. Like I said, they needed to ship Bedrock so that they could implement fraud proofs. What is Bedrock? It is the OP stack. And so they simultaneously have the OP stack as a precursor to implementing fraud proofs. But then, once they have the OP stack, then you have Coinbase, Lyra, Public Goods Network, WorldCoin, Mantle, all forking the OP stack because they all want their chains. So it's like, it's kind of just the way that the universe played out. But then I will also say like, the immune response from, you know, the broader Layer 2 ecosystem saying, hey, not having fraud proofs is no longer like tenable in this in, you know, halfway through 2023 is also a valid take.

• 49:11David Hoffman?

  Now, I'm very well connected to the optimism team. I know for a fact that they are all focused on shipping fraud proofs. That has been the number one focus since shipping Bedrock. Because like I said, Bedrock was a precursor to shipping fraud proofs. So we are now in this like this uncanny valley of

• 49:27Ryan Sean Adams?

  Schrodinger's fraud proofs.

• 49:29David Hoffman?

  Right? Schrodinger's fraud proofs. It's like post Bedrock, but before Canon, right? And now this is, this is where we are. And then of course, the Solana ecosystem will tell you that fraud proofs are never coming and these Layer 2s are going to be centralized forever. And they are wrong.

• 49:43Ryan Sean Adams?

  It's many of them. But yeah, I agree with that. I think we've talked about it sufficiently. One thing I will do a big plus one on though, is AJ's post right here. It was just a nice rational post, spells it out. It's interesting, by the way, that it's not tweet sized. You know, the old Twitter tweet size of 280 characters or whatever? It's actually taking the time to go through the arguments. And I encourage more conversation like this. So all of this is healthy. And I do think we all, as an industry, want those red and yellow parts of the pie on Layer 2 B to turn green. And yeah, it's good to apply that pressure once in a while. David, more pressure, apply. These are things that are breaking out of crypto Twitter, maybe in the bear market,

• 50:27Ryan Sean Adams?

  but Gitcoin was on the hot seat as well. So what's the Gitcoin controversy this week?

• 50:33David Hoffman?

  Yeah, so kind of an interesting announcement tweet from Gitcoin. They say, Gitcoin tweets out, "We're happy to share that we've entered a collaboration with Shell to accelerate open source innovation to the energy sector." Shell, the oil company, yes. "Together, we're driving sustainable solutions and making a positive impact in the world. Let's dive in." And then there was a blog post from gitcoin.co about the Gitcoin Plus Shell partnership.

• 50:56Ryan Sean Adams?

  Ooh. People don't like Shell.

• 50:58David Hoffman?

  People don't like Shell, for good reason. Have you ever read the book, Confessions of an Economic Hitman?

• 51:04Ryan Sean Adams?

  No.

• 51:05David Hoffman?

  That one will destroy your brain.

• 51:07Ryan Sean Adams?

  It's about the oil industry?

• 51:08David Hoffman?

  Yeah, it's worse than that. It's just about the way that, like, first world countries make third world countries beholden to them, indebtedness forever. It has to do with the International Monetary Fund, it has to do with Shell, it's all bad.

• 51:22Ryan Sean Adams?

  So when you think of Gitcoin as a brand, you think of, like, nice wholesome things.

• 51:26David Hoffman?

  Public goods, sustainability.

• 51:28Ryan Sean Adams?

  Public goods.

• 51:29David Hoffman?

  Yeah.

• 51:30Ryan Sean Adams?

  When you think of Shell, you do not think those things.

• 51:32David Hoffman?

  I think of deforestation, and climate change, and assassinations, and corruption.

• 51:40Ryan Sean Adams?

  Wow. That's the brand association a lot of people have as well. And that's why this fell pretty flat. This tweet fell pretty flat, I'd say, to put it mildly.

• 51:48David Hoffman?

  So I photoshopped in a bunch of people's takes. Here they all are. Anthony Sazano, "As a longtime fan and user of Gitcoin, I have to say I'm extremely disappointed in their decision to partner with Shell." Scooby Trooples, "I love Gitcoin, but this is greenwashing, not green pilling. F Shell." Hazu quotes the tweet and says, quote, "The end justifies the means," said by Gitcoin 2023. So yeah, just general WTF response from crypto. And then here's Kevin Owaki, who is no longer at Gitcoin. He is now at his software company, Super Modular, which is built on top of the Gitcoin protocol, because Gitcoin is a protocol now.

• 52:28Ryan Sean Adams?

  And Kevin, Kevin was the founder of Gitcoin. And as you said, yes, Gitcoin itself is both a protocol and a DAO. And so Kevin is not, you know, associated with those things, except as a kind of an ambassador for the brand.

• 52:41David Hoffman?

  Yeah, so Kevin Awaki writes out a tweet titled, in all caps, "Awaki, what do you think of the Shell Gitcoin pool?" Which I'm sure is what he has been asked many, many, many times. To tell the all of this, he says, "I personally don't care for the Shell brand. I doubt many people will opt in for the optional Shell funding pool, but we'll see. It's a free market. I think $500,000 is a pittance, especially if you look at Shell's contribution to climate crisis and the brand damage to Gitcoin is immense, and also greenwashing is just not okay." But then also he goes on and says, "But the point of Gitcoin is to be a permissionless protocol, not to actually pick winners and losers." And so he actually, he said it better than I did on a podcast, which we have a clip for. And so we'll just go ahead and play that clip because I think this is a hot sign about.

• 53:24Speaker 02

  Public goods are relative to the values of the communities they serve. Some communities are going to want a DEI round, some are going to think that's woke fucking nonsense. Some are going to want to fund open source software, some just don't give a shit about open source. Some people want to fund physical public goods, some want to fund digital. Some are okay with an oil company giving them money and some are not. So basically, it's impossible to serve all of these memetic tribes at the same time. And that's a fundamental tension in what Gitcoin is trying to do. If you're trying to build the stack for civilizational scale, public goods funding. All of the tribes don't agree on what is a public good. And this was a really profound realization for me. And it's why 24 months ago, we decided to shut down the company that was Gitcoin Grants and turn it into a protocol in a DAO.

• 54:06Speaker 02

  So basically now at Gitcoin, you have like the DAO contributors and you have their politics. You have the PGF work stream, which is like the public goods funding work stream that did these partnerships. And then you have the products, which are now credibly neutral protocols. And so by design, if you think Gitcoin is too woke because they're funding diversity, equity, and inclusion, or that they're taking blood money from Shell, then you don't have to take the money, but you can still use the protocols. And anyone can go to manager.getcoin.co and set up their own quadratic funding round for their own values.

• 54:39Ryan Sean Adams?

  There you go. That's Kevin.

• 54:41David Hoffman?

  Yeah, that was like, that's a, that's a take. Kevin will also be at Permissionless and he will be at the party. So if you want to berate him or ask him about his opinions on other things, he will be there.

• 54:49Ryan Sean Adams?

  Please don't berate him. I mean, he's trying his best. Like, this is a credibly neutral protocol, folks. I think he's right on there. CalSwap, speaking of credibly neutral protocols, they just released T-WAP orders. What is a T-WAP order, David?

• 55:04David Hoffman?

  Yeah, T-WAP, Time Weighted Average Price. So this is a way to automate your dollar-cost averaging in a very short amount of time. That's probably not the best way to say dollar-cost averaging, but take dollar-cost averaging and compress it down to like an hour or a day or something really narrow. But this T-Wapping is like a strategy that if you have a very big order, to spread out your order to match volume over time. So as more buying picks up, your order will be fulfilled faster and as it's buying or as volume slows down, your order will be fulfilled slower. This has been harder to introduce into native crypto DEXs just because of the logic that is required to make this happen, but CalSwap has done it. And so there's a link in the show notes if you want to try it out.

• 55:48Ryan Sean Adams?

  And you can do it right from the safe wall. The cool thing about this architecture is it's intent-spaced architecture, right? So basically, rather than commit to a transaction, you commit to an intent. And that's been a theme that we've been exploring definitely, and all of crypto has been exploring definitely this summer. So, very cool. Visa has always impressed me with how on top of crypto they've been. And this week was no exception to that. They are testing an on-chain payment system for gas with a card. So they're essentially abstracting gas fees away for blockchain payments and allowing you to complete an on-chain transaction just with your Visa card. So the gas is kind of paid via account abstraction in the background. Just really cool to see like the

• 56:33Ryan Sean Adams?

  largest payment company in the world innovating on this. And I think this is also related to two other headlines from this week. So MetaMask has just rolled out a one-click crypto buy button with Apple Pay. So, Apple Pay, MetaMask, you can get into Fiat, you can get into crypto directly through your Apple Pay account. Also cool. Ledger and PayPal have also introduced a partnership. So now Ledger users will be able to buy crypto automatically via their PayPal account. This whole chain of things, we've got Visa, we've got kind of Apple Pay, and we've got Ledger. These feel very much like 2023 things, bear market things, that we would have no concept of in 2019.

• 57:16Ryan Sean Adams?

  Do you remember all the fake partnerships that were going around, kind of the ICO landscape, where somebody would take a picture of themselves with a skateboard in front of Google? Yeah, or they'd advertise a partnership with Amazon, and really they're just using AWS servers for some like portion of their user interface.

• 57:33David Hoffman?

  I know that that sounds insane, and that's what 2017 was. Like, that happened so many times. That was a real tactic that many ICOs did.

• 57:42Ryan Sean Adams?

  And what's so crazy is now we actually have these large partnerships. This is like going mainstream. I mean, last week PayPal just rolled out a stablecoin. How crazy is that? Ledger and PayPal together. So now you can go directly from PayPal to a bankless wallet in Ledger, right? Visa pushing forward, not just like, "Oh, we have a blockchain strategy." They're looking at account abstraction. It's so cool to see this, and makes me very bullish even in the midst of this bear market.

• 58:09David Hoffman?

  Yeah, certainly. And it also just shows that we have enough UX solutions, UI/UX solutions, to make some of this stuff easy. From PayPal to your Ethereum wallet was like, that took 50 steps in 2017. So in South America, Ryan, Argentina has a, apparently, a far-right pro-Bitcoin candidate, Javier Millay, who's won a primary in Argentina. And there's this clip going around the internet about him explaining Bitcoin and Ethereum to like the news panelists that he is like shoulder-to-shoulder with. And so all of crypto is like, "Oh, my God, people are getting it," and also being elected into Argentine offices.

• 58:51David Hoffman?

  Argentina, of course, very crypto, one of the most crypto-native countries that exists. It could be number one, to be honest. Why is Argentina so far ahead? High inflation and high internet connectivity and a technically competent population. And so it's one of the most crypto-enabled countries that exists. So it is no surprise that we are getting crypto politicians working their way through getting elected.

• 59:18David Hoffman?

  So Javier Coleish, and known as the La Libertad of Anza, garnered more than 30% of votes in the political contest.

• 59:24Ryan Sean Adams?

  I think the big story here is that crypto is continuing to become a global political movement. And I don't know very much about this candidate, certainly not an endorsement. I've heard many mixed reviews, in fact, many negative reviews from the Argentine community. And apparently, this candidate's track record in crypto has been rocky. He's been embroiled in high-profile crypto Ponzi schemes, one called Coinex, which allegedly stole $800,000 worth of pesos. So I don't really know very much about this candidate, other than the story that crypto is becoming a political movement. And speaking of politics and crypto, David, we this week got to see what Donald Trump holds in his Ethereum wallet. Do you want to know what he's holding?

• 1:00:06David Hoffman?

  I am so excited.

• 1:00:07Ryan Sean Adams?

  Here it is, right here. We believe this ETH address, ending with 22CE, is Donald Trump's Ether address, Ethereum address. This is supported by information from his financial statements filed, I believe, probably the court system, August 14th. So this is what he's holding, David. Rate this portfolio. What do you think of Trump's portfolio?

• 1:00:29David Hoffman?

  It is just an A+ portfolio.

• 1:00:31Ryan Sean Adams?

  It actually is. It's great.

• 1:00:32David Hoffman?

  It's great. Okay.

• 1:00:34Ryan Sean Adams?

  What's in it?

• 1:00:35David Hoffman?

  He's got four assets. Ether, he's got 1.5,000 Ether, worth $2.8 million, coming in at number one. And then he's got 16 Weith, 3.4 Matic, and 12 USDC. So it's 99% Ether.

• 1:00:52Ryan Sean Adams?

  There you go.

• 1:00:53David Hoffman?

  Where did this man get all of this Ether? Why does he have Matic? Well, it's because of the Trump NFT sales on Polygon. He needed the Matic for gas, and they were sold in ETH. So he made $2.8 million in Ether.

• 1:01:07Ryan Sean Adams?

  You know, Trump is just making money on his NFT. The only thing I've ever heard him say explicitly about crypto was this from a Fox Business interview in December 2021 about crypto. He said, "I've never loved it, because I like to have the dollar." You should do this in your Donald Trump accent. I shouldn't be reading this.

• 1:01:26David Hoffman?

  "I have never loved it, because I have always loved the dollar." Trump told Fox Business in a December 2021 interview.

• 1:01:33Ryan Sean Adams?

  That's way better.

• 1:01:33David Hoffman?

  "I was never a big fan, but it's building up bigger and bigger, and no one's doing anything about it. But I want our currency called the dollar."

• 1:01:42David Hoffman?

  I'm like shit impressions and for some reason the Donald Trump I'm not completely terrible at.

• 1:01:47Ryan Sean Adams?

  I don't know. It's pretty good. I gotta admit. It's pretty good.

• 1:01:50David Hoffman?

  I love how he just tells us that he's a fiat maxi. Like I, Trump, Trump declares he is a fiat maximalist.

• 1:01:56Ryan Sean Adams?

  It may change though, once he gets bags. I mean, who knows?

• 1:01:59David Hoffman?

  All right, moving on. Here's a headline that I thoroughly enjoyed out of CoinDesk. Fallen hedge fund Three Hours Capital co-founders were fined by Dubai's crypto regulator over their new bankruptcy claims exchange, OpenX.

• 1:02:13David Hoffman?

  So you know how much volume OpenX has done, Ryan? Like how much they have the, okay, what is OpenX? It is an exchange for bankruptcy claims. Where are those bankruptcy coming froms? The like, the ones that Three Hours Capital caused. Like anyone like Celsius, Three Hours Capital themselves, FTX, Voyager, any of the bankruptcy that we like reported on for like almost a year straight. OpenX is a, an exchange, a crypto exchange to trade claims.

• 1:02:41Ryan Sean Adams?

  That these guys co-founded.

• 1:02:42David Hoffman?

  Run by Three Hours Capital. Yes.

• 1:02:44Ryan Sean Adams?

  Man.

• 1:02:44David Hoffman?

  Man, they are just loving that we are talking about this right now. And so I'm going to get to the meat of this whole thing. The whole, the volume on OpenX is coming in at a whopping like a couple thousand dollars.

• 1:02:56Ryan Sean Adams?

  Wow.

• 1:02:56David Hoffman?

  That's it.

• 1:02:56Ryan Sean Adams?

  And so is that why they're being fined?

• 1:02:59David Hoffman?

  Yes, they are being fined for like not being up to snuff with the Dubai crypto regulator. They are being fined $2.7 million on their exchange that they've had to build from scratch and probably have, you know, a million dollars of investment in, and they've made zero money on it. So they are in the hole. They are in the red.

• 1:03:17Ryan Sean Adams?

  Can you imagine investing in this thing though? They actually raised money and investors were willing to give them money for this thing. That, that blows my mind.

• 1:03:25David Hoffman?

  Yeah. Yeah. So they, they're in Dubai because they can't go anywhere else. Cause if they go anywhere else, they'll get extradited to the United States and then thrown in jail. And now they're in Dubai and they owe $2.7 million that they probably don't have.

• 1:03:38Ryan Sean Adams?

  And by the way, David, you know, we were talking about friend.tech and the progressive web app. The Bankless app is also available as a progressive web app. You can open this thing in Safari. You can set it to your homepage and you can actually use it. Did I just blow your mind right now?

• 1:03:53David Hoffman?

  I didn't know that we had a progressive web app. I thought we just had an app.

• 1:03:56Ryan Sean Adams?

  Well, you have a progressive web app if you just load it in your Safari browser and you add it to your homepage.

• 1:04:01David Hoffman?

  We had a progressive web app before I even knew that what a progressive web app was.

• 1:04:05Ryan Sean Adams?

  Yup, yup. We just bypassed Apple. We're doing it. But anyway, we got the airdrop hunter that we launched this week. What does this thing do?

• 1:04:13David Hoffman?

  Okay, so the airdrop hunter, what does it do? It helps you hunt airdrops. It's in the title. So airdrops, of course, are this meta in crypto. And that meta shifts. And so we've built this product because we were writing this as articles, like, hey, there's this like new crypto app. They don't have a token. They're probably going to have a token. Here's how you use this app. And if you use this app, you are likely to get some qualified for the token airdrop, perhaps, if they ever, we don't know. And so like a part of the Bankless newsletter, which is now the Bankless website, banklessmedia.org, has always been just like, here's how you use this DeFi app. Like, one of the earliest articles in Bankless history is Ryan Sean Adams here saying, here's how you use Uniswap.

• 1:04:56David Hoffman?

  And then later, anyone who did that article got the Uniswap airdrop. And this, and like our articles have progressed. We did, you know, we did DYDX. We did like a lot of layer twos. And so as soon as the airdrop meta has unfolded, a lot of these guides is like, here's how you use this, here's how you use this DeFi app, has also simultaneously been like, and then you do these things in order to maximize your chances for receiving the airdrop. And so now we've just turned this, because of our team, our Chad team, we now have a product team and also airdrop hunters, who are filling out like all these different possible protocols that might have an airdrop, how to use them, what to do inside of them to maximize your footprint for receiving an airdrop, and then like a step-by-step process to make this easy for people.

• 1:05:39David Hoffman?

  And so this is part of the progression of this story of Bankless, I think, is like, how to use DeFi apps, how to learn about them, and then how to grow your on-chain footprint to do the thing that Ryan always loves to tell you is like crypto pays you to learn. He's mouthing it right now. And so now we've just formalized this into a product for the bankless citizen. So if you are already a bankless citizen, A, come to our party at Permissionless, and B, while you're waiting for Permissionless, go hunt some airdrops. I think we have 31 airdrops, and we're gonna just add more and more and more. And I also want to add in a bit about the difference between what we are calling airdrop hunting versus airdrop farming. So there's this vertical that's growing out there. Do you ever remember seeing like the Pokemon Go people with like 50 phones all at once?

• 1:06:23David Hoffman?

  No, but that's crazy. That's a thing. Yeah, like, there's an industry that exists. They're all based out of Asia generally. But yeah, just like, there's airdrop farming, which is like, these highly capitalized, kind of like, just like how proof of work mining is now in the hands of just like extremely well capitalized verticals, entities, entities, not individuals. So there's the era of like airdrop farming is upon us. And that is not what we want to promote, and that is not what we are trying to instill in this product. The product is like, first use this application as a real human, as a real person, to do things that we think are in what the protocol wants you to do. Things like locking, like, you know,

• 1:07:07David Hoffman?

  depositing rather than than just transacting, right? Like, things that are actually truly valuable to the protocol. Because our job is to try and guess the meta of what future airdrop criteria will be. And that meta is going to respond to the airdrop farmers. And so as, like, all of the bankless citizens, they're humans. Those are human beings. We talk to them in the Discord, we have Jack guiding, like, talking about like DGEN stuff, we have Jack the Chief Hunter, who's like guiding some of these citizens through some of these apps. These are the humans. And so we're trying to give humans a platform to stand out against the bots. And that is the airdrop hunter.

• 1:07:45Ryan Sean Adams?

  Yeah, well said. Hunt and then settle. Those are our two verbs.

• 1:07:48David Hoffman?

  Learn, learn hunt, settle.

• 1:07:50Ryan Sean Adams?

  Yep, learn hunt, settle. That's the bankless platform in a nutshell right now. So go check that out. If, and by the way, if you've never considered becoming a bankless citizen, I think this is a compelling opportunity to do that. So you could check this out. So I think we provide one airdrop hunt available for our free members. And then you get 31 of these if you're a citizen and we're going to be adding more every week. So I think we've got another batch of a dozen or two dozen coming and we'll of course, keep you updated on this. The one other thing I want to mention is beware of phishing attempts. Okay, so this has been something that I feel like it's been plaguing crypto all summer. Of course, it's always been here, but has really ramped up this summer and has been-

• 1:08:32David Hoffman?

  Phishing sophisticatedness is at all time highs.

• 1:08:35Ryan Sean Adams?

  What do we mean by phishing? Okay, that means like you could get an email from someone you think is bankless and is actually not bankless. That's telling you to click a button and connect your wallet and your funds could be drained. Okay, so emails from bankless only come from the at bankless URL. And if you go to a third party website, make sure it's got the lock HTTPS and it's www.bankless.com. And that's the URL. That's from us because there are people out there that are sending spam emails to try to get you to click a button, connect your wallet and drain your funds. So be careful out there. It's definitely still the Wild West.

• 1:09:18David Hoffman?

  And if you need help and you are confused and you just want some guidance or some friends along the journey, come into the Discord, we'll help you out.

• 1:09:27Ryan Sean Adams?

  Totally. David, we got one raised this week, but it's a pretty large one. Bitco raised $100 million. Who is Bitco? $100 million? Why is this significant?

• 1:09:37David Hoffman?

  Yeah, Bitco is a custodian. They're actually the creators, the producers, one of the producers of wrapped Bitcoin, because they are the custodians of the Bitcoin that backs the wrapped Bitcoin. But they're a Bitcoin and crypto custodian. Why are valued at $1.75 billion? I'm pretty sure the custodian play is like eventually like PayPal bought a custodian. Anyone that, any bank that wants to do crypto stuff is probably just going to buy a custodian. And so this is, this is being valued, valued at kind of that $1.75 billion. It's nice. $100 million raise. This is their series C. Congratulations to Bitco.

• 1:10:14Ryan Sean Adams?

  David, what do we got coming up next?

• 1:10:15David Hoffman?

  Coming up next, we are in the early innings of base, and there are rug pulls and meme coins everywhere. Is that a problem? We'll talk about that. That's a question from the nation. Also, a hot take, why on-chain revenue is the next meta? And the main thing that you should be paying attention to right now, that is a take of the week from Van Spencer. And we also got a take from Ryan that we're going to talk about as well. And of course, we're going to talk about what we're bullish on, and of course, the meme of the week. So all of that and more. But first a moment to talk about some of these fantastic sponsors that make the show possible. Mantle, formerly known as BitDow, is the first DAO-led Web3 ecosystem, all built on top of Mantle's first core product, the Mantle Network. A brand-new, high-performance Ethereum Layer 2, built using the OP stack, but uses EigenLayer's data availability solution instead of the expensive Ethereum Layer 1. Not only does this reduce Mantle Network's gas fees by 80%,

• 1:11:00David Hoffman?

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• 1:11:45David Hoffman?

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• 1:12:30David Hoffman?

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• 1:12:35Ryan Sean Adams?

  We got some questions of the week, this one from the Bankless Discord from someone who calls themselves ZKJew. So the question is, "In the early innings with Base, it's been rife with rug pulls, like Bald, I guess there was a rug pull called Lead, I didn't even know that. Is virtue signaling values really more important than creating a safe environment for onboarding users? And what about Base?" Alright, so some of the things, this commenter is saying, some of the things that they're seeing are not entirely wholesome over on the Base Layer 2. What's your reaction to that?

• 1:13:07David Hoffman?

  I think this is just the meta that unfolds. When we have something new, you need, and there's just like, the shelling point is for all the traders and degens, and just the attention. Everyone understands that the attention is on Base. And so if you are a, if you're gonna issue a meme coin, you should do it on Base. If you're gonna rug pull, you gotta go there quickly, because that's where the attention is, you gotta rug, you gotta rug before the attention leaves. And so like, I think I gave this take last week, but just, all the early and easy things to do are bad, and the hard things to do are good. Good things are harder than bad things. And so the first things that you're gonna see on any new network are just because the attention's there, just because it's a shelling point, are like all the value extractive things that are

• 1:13:49David Hoffman?

  just fundamentally unaligned. And then, we build harder things. Like, there's a reason why Friends did not get on Base Day 1. It took a little bit. I'm sure they were building it prior. But like, that's kind of my take. Like, early network stuff is like, the worst of the worst. And then, we improve and iterate, and it gets better.

• 1:14:08Ryan Sean Adams?

  It's a permissionless network, anyone can deploy, so Coinbase cannot moderate or cannot gatekeep. This reminds me a lot of the early internet in the 90s, where, you know, early critics of the internet just said, "The internet's for gambling and porn and scammers," right? That was the 1990s.

• 1:14:25David Hoffman?

  Lots of porn on the internet.

• 1:14:27Ryan Sean Adams?

  I mean, and like, they dismissed it as a result. So you can't do serious things on the internet. And that was a massive mistake. But those are the use cases that pop first, certainly. Another question here, this one from Rock3T. "In the debrief of the Lido episode from earlier this week, you talked about how everything eventually settles to Layer 0, that is the social layer. As crypto adoption grows and more people make up Layer 0, do you worry about the potential impact on Ethereum values that the dilution of our social layer could have?" That's a really interesting question, I think a fantastic question. What's your take?

• 1:15:02David Hoffman?

  Yeah, that's a really hard question to answer in not a 90-minute podcast. We should do a podcast.

• 1:15:09David Hoffman?

  Okay, so as crypto adoption grows, more people make up the layer zero. Do you worry about the potential impact on Ethereum values that the dilution of our social layer can have? I actually think that as crypto grows, not necessarily does the layer zero also grow. Because the layer zero are like the people on crypto Twitter, the people on the Ethereum Magicians forums, the people in Discord having important conversations about Ethereum. If you are just an average user, if you're a collector of music NFTs and you don't really care about the chain or what protocol or whatever you're on. Blockchains are designed to be invisible and it's actually a KPI that people go and adopt crypto protocols without actually having to join the conversation.

• 1:15:51David Hoffman?

  We have these conversations because we're nerds and we like to talk about these things and it's important to us and it's philosophically interesting. That's the layer zero. We just need enough of a robust layer zero so that we can check our values and make sure that they are doing the right things as we build these networks. But it's the networks that's supposed to scale these things. The networks are supposed to scale, not necessarily the layer zero. The layer zero is a backstop. It just needs to be the last line of defense and I don't think it needs to be large. It just needs to be precise.

• 1:16:19Ryan Sean Adams?

  Yeah, I guess I would add maybe two things to that. You know, one is I do think that the OGs for a while will have a disproportionate share of kind of, at least let's say ETH stake, right? Why? Because they bought it at a lower price and they have more ether at first. So it'll take longer for that to dilute and I think that's a good thing. But more broadly, I'll say this is a challenge of any social system that we construct. So the founders of the Constitution, the American Revolution, you might say, well, future generations, well, our grandkids' grandkids, will they still care about the values that we're trying to embed in this nation-state, right? And they try to document as many of those values as possible inside of a

• 1:17:06Ryan Sean Adams?

  A protocol, essentially, an algorithm. And that's kind of what we're doing with crypto right now. So I think our constitution, our protocols will harden and ossify. And over time, they'll be less malleable to kind of future generations who maybe care less about these values. And maybe these future generations will find new ways to help us live up to the values that we purported as well. I mean, it certainly was the case in America, you know, expanding the voter base of, you know, beyond white males, for instance, to women, to minorities. I think, I have faith, I think, that once we embed these values of decentralization

• 1:17:50Ryan Sean Adams?

  into our crypto systems, that they'll carry forward. David, takes the week, this one from Vance Spencer, what's he saying?

• 1:17:58David Hoffman?

  Vance Spencer says, if you don't nail the transition to on-chain, ooh, he used a hyphen, oh Vance, on-chain revenue generation.

• 1:18:06Ryan Sean Adams?

  On-chain is spelled O-N-C-H-A-I-N, okay Vance?

• 1:18:10David Hoffman?

  Okay, so if you don't nail the transition to on-chain revenue generation as a centralized crypto exchange, you will be left in the dust by competition in the coming 12 to 18 months. It takes an entirely different DNA to succeed on-chain versus centralized, different products, people, and culture. Basically Vance, I think, is just saying that like, yo, the meta is shifting on-chain and you better go there.

• 1:18:31David Hoffman?

  Interesting.

• 1:18:32Ryan Sean Adams?

  Speaking of on-chain meta, I feel like this is a new on-chain meta for this cycle. I said this on Twitter, all Ethereum competitors want to become an L2 now. Ethereum won the thumb war. I sort of tweeted this out to get the response, not entirely true, of course, there's still alternative layer ones, but you gotta admit, this cycle is a lot different. Last time, you know, in 2018, 2019, you had a whole bunch of alternative layer ones who were coming to kill Ethereum and eat Ethereum's lunch. Now I'm seeing far more of just... Become layer twos, become kind of app chains. And so that has been a paradigm shift. What do you think about this?

• 1:19:11David Hoffman?

  Yeah, your, your response a little bit, your reply to your own tweet. You say, okay, not all, there's still Solana, Cosmos and the long tail. Throwing a flag at Cosmos, Cosmos is actually not a chain, it's a network of app chains. And so Ethereum layer two roll apps could absorb any Cosmos app individually. And I think when DYDX just capitulates and comes back to be a rollout back on Ethereum, you will know, you will know that the design philosophy of Ethereum

• 1:19:38Ryan Sean Adams?

  I don't know, Antonio is showing

• 1:19:39David Hoffman?

  All the way around.

• 1:19:40Ryan Sean Adams?

  He's showing no signs of capitulation. He is all in on Cosmos for DYDX. So we'll see.

• 1:19:46David Hoffman?

  Solana will never

• 1:19:47Ryan Sean Adams?

  Plays out. Yeah, no, he never will. I don't think they, yeah, I don't know that they, I don't know that they should or they want to. I don't know that it's best for the value

• 1:19:57David Hoffman?

  No, the layer one of Solana, it's imbued in the social contract of Solana that they must be a layer one. Like all the soul boys are like, they think that soul will overtake ETH one day.

• 1:20:09Ryan Sean Adams?

  And yeah. You, you've been much more involved in those conversations than I have. I've just been observing, David. What are you bullish on this week?

• 1:20:16David Hoffman?

  I'm speaking of what I'm bullish on this, this week. I'm brewing up a piece that I'm going to write.

• 1:20:20Ryan Sean Adams?

  Yes.

• 1:20:21David Hoffman?

  About like some, some, the differences between, I think Ethereum and Solana. Remember my old P O B crypto podcast?

• 1:20:29Ryan Sean Adams?

  Yeah, of course.

• 1:20:29David Hoffman?

  It was about the differences between Bitcoin and Ethereum. I think that there are a similar level of depth to that conversation between Solana and Ethereum. And I think it goes way deeper than I think most of both camps expect than they think. So I'm bullish on this article that I'm writing. They

• 1:20:46Ryan Sean Adams?

  Is it an article that's going to help us all come together, David? Or is it?

• 1:20:50David Hoffman?

  No, it's an article that is going to help us all understand. And obviously, we'll have my positions about things. It's so I'll tease it a little bit. Ethereum and its layer twos, layer threes, layer fours, it's valydiums. It's like base rollups, it's sovereign rollups. There's like so many different ways to construct a rollup. Ethereum, like I say, blockchains are supposed to be invisible. Ethereum is supposed to produce enough networks to permeate throughout the entire internet as well. So when you have all of these different flavors of rollups, we can get into the cracks of the internet because a particular rollup construction is specific towards a specific use case that allows itself to find itself in the corners of Ethereum.

• 1:21:33David Hoffman?

  Whether your on-chain data is on Ethereum layer one, or it's hosted by Eigenlayer DA, or it's hosted by a centralized database. The lines between Ethereum and the internet blur because of how rollups are constructed. Then you have the Solana vision, which is a single global shared state. There's a very firm boundary between what is and is not on Solana. And these are two different archetypes which have downstream consequences. And so this article is unpacking that metaphor.

• 1:22:01Ryan Sean Adams?

  Well, I can't wait to host the debate between you and Kyle Samani on modular versus monolithic.

• 1:22:10Ryan Sean Adams?

  David doesn't want to do this debate. Oh, yeah, well, I'm bullish for your article as well, David.

• 1:22:16David Hoffman?

  Thank you. Brian, what are you bullish on?

• 1:22:18Ryan Sean Adams?

  I have definitely flipped bullish on crypto social media. And I think I've been sort of in a, I'm not sure, this could work type of state. Well, let me tell you where I started. I started with being fairly bearish on web three social media. Do you remember the early days? We created a kind of Ethereum and people were like, now Ethereum is going to become Uber. Now Ethereum is going to become decentralized Twitter. And it just never seemed to kind of click for me.

• 1:22:54Ryan Sean Adams?

  We made some progress. You know, we did episodes of like Farcaster, for example, and Lens. And so cautiously excited about those and bullish on those when I started seeing them. But the question is always, how do we get mass adoption? Friend.tech and this experiment, again, I'm not saying it's going to be friend.tech, guys. Okay, don't hear me. This is a POC, okay? This experiment showed me how it can work. In the same way that CryptoKitties showed me how NFTs can work. Economic social games, that's what they did. And they vampire attacked Twitter's network effect. They just vampirized it.

• 1:23:31David Hoffman?

  They did do that.

• 1:23:31Ryan Sean Adams?

  How'd they do that? Because I got a message from someone saying, go check this out, right? And I was, you know, someone I trusted. I went and I checked it out and I connected my Twitter account and ported some of my social graph over to friend.tech and spent some time on it. That is an economic, why did I do that? Partially because it's kind of cool. And partially because of token incentives, right? I wanted to see how this thing worked. That's why everyone did it. And then you did it to compete in the social game of the leaderboard, right? I mean, you were just talking earlier how like, I'm in top 20, I'm in top 20. That means something to you, right? And so now I see the path. Now I see how crypto, social media, maybe it's Messenger apps,

• 1:24:15Ryan Sean Adams?

  maybe it's apps like friend.tech can actually do it. And I also see a path around Apple App Store, Android, right? With kind of this web-based Safari sort of experience. Again, it was still super clunky. Like, half the time when I was using friend.tech, the chat didn't work. It was like broken.

• 1:24:34David Hoffman?

  That's actually fixed now. They fixed it.

• 1:24:37Ryan Sean Adams?

  Okay, so that's the thing. It reminds me of, do you remember early days of Twitter? Okay, I got my Twitter account super early. And early days of Twitter was always like fail whale. You know, the fail whale was this image that they would put on screen when Twitter was over capacity, couldn't handle the load, right? The fail whale. Like, when things break because of overuse, it's a really freaking good sign, okay? It means there's demand. That's what you want. So, anyway, that's kind of cool. It's like hackathon quality right now, but it's a proof of concept for things to come. And I have flipped firmly bullish on this category of whatever you might call crypto social, web three social messaging, like, uh, consider me bullish and I'm super excited about it.

• 1:25:21David Hoffman?

  And into the meme of the week, there we go. This is, uh, Joseph de Long won the meme of the week trophy this week. Uh, this is, this meme format's been going around crypto Twitter. This is the, it's a joint. It's a picture of a joint. And like the first majority of the joint is, is like, you have decently cool and good thoughts. And then the last lever of the joint, you start to get real, real crazy. So this is a Joseph de Long is, uh, he used to be in charge of a Sushi swap before he moved on. So the first like three quarters of the joint is just X times Y equals K, you know, the Uniswap AMM curve. And then the last quarter of the joint is I can fix him permanent loss with options. Which man, if you have to kind of be deep down the crypto rabbit hole to understand this one, but the, the, to unpack this meme,

• 1:26:04David Hoffman?

  uh, impermanent loss, for some reason, people are, uh, LPing into Uniswap and Sushi swap and all these AMMs, these X times Y equals K AMMs.

• 1:26:11Ryan Sean Adams?

  And they're not making money?

• 1:26:12David Hoffman?

  They're all losing millions of dollars and no one knows why there's so much liquidity in Uniswap because everyone's losing money. And so everyone is, is, there's like a meme lately of rotation into like, oh, we can fix LP loss by like adding options on top. And like, Joseph is saying, it's like, you gotta be effing crazy to think that.

• 1:26:32Ryan Sean Adams?

  That is one of the mysteries of crypto is why people are doing this. Not even Dan Robinson knew when you asked him on the recent podcast. It's just crazy to me. Guys, that has been the roll up. Hope you enjoyed it. We're going to end with risk in a minute, but first we disclose. David and I mentioned optimism. We mentioned Arbitrum. I think we said Polygon. Uh, we are both investors and advisors for optimism. I'm advisor to Polygon. Both David and I hold a little bit of Matic tokens. Uh, David and I also hold ETH and it's our time to remind you, we are long-term investors. We are not journalists. We don't do paid content. There's a link to all bankless disclosures in the show notes at all times. And of course crypto is risky. You could lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.