ROLLUP: BitBoy Lawsuit | Ethereum Merge Updates | Biden Cancels Debt | Tornado Cash Fallout | Pudgy Penguins

4th Week of August, 2022 ------ 📣 Chainlink | Register for SmartCon 2022 with promo code “BANKLESS” https://bankless.cc/smartcon ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: 🌱 LENS | WEB3 SOCIAL PROTOCOL https://bankless.cc/Lens 🚀 ROCKET POOL | ETH STAKING https://bankless.cc/RocketPool ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum 🦁 BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave 🌉 JUNO | BRIDGE FIAT TO LAYER 2 https://bankless.cc/Juno ⚡️ ZKSYNC | THE LAYER 2 SCALING ENDGAME https://bankless.cc/zkSync ----- Timestamps: 0:00 Intro 1:53 UFO Sightings 5:20 Actual Intro 7:50 MARKETS 9:45 Total Market Cap https://www.coingecko.com/en/global_charts 11:15 Biden Debt Cancelation https://www.politico.com/news/2022/08/23/biden-student-loan-forgiveness-repayment-pause-00053299 13:30 Trolley Problem https://pbs.twimg.com/media/FbBIG1vXgAAniu5 17:50 Inflation Pain https://panteracapital.com/blockchain-letter/ethereum-tightening-more-than-fed/ 20:10 Energy Markets https://twitter.com/Schuldensuehner/status/1562771407313915905 21:14 FTX Revenue https://www.cnbc.com/2022/08/20/ftx-grew-revenue-1000percent-during-the-crypto-craze-leaked-financials.html 22:15 Layer 2 NFTs https://twitter.com/blockworksres/status/1560292557975801856 23:40 Hardware Wallets Up https://decrypt.co/107877/crypto-winter-freezes-have-turned-investors-hardware-wallets Tornado Cash Fallout 26:30 Flashbots Blacklists Wallets https://thedefiant.io/flashbots-blacklists-wallets-tornado 30:20 FTX Froze Aztec Funds https://twitter.com/aztecnetwork/status/1560710567249096704 33:55 Uniswap UI Bans Wallets https://blockworks.co/wallets-banned-by-uniswap-labs-for-alleged-crimes 34:40 Alex Persev in Jail https://twitter.com/skywinder/status/1560655212741685248 36:30 Tom Emmer https://twitter.com/RepTomEmmer/status/1562084891247902721 37:15 Matthew Green https://twitter.com/ryansadams/status/1561887300887482368 37:45 Tether https://twitter.com/Tether_to/status/1562468486886346753 38:25 Layer Zero https://twitter.com/ercwl/status/1561180759146336256 40:00 FEI Fallout https://thedefiant.io/fei-shutdown-uproar 41:45 The Proposal https://tribe.fei.money/t/tip-121-proposal-for-the-future-of-the-tribe-dao/4475 47:15 BITBOY https://twitter.com/DegenSpartan/status/1559516281078190080 49:00 Suing Atozy https://twitter.com/atozy/thread/1562206338293309440 51:20 Community Support https://twitter.com/atozy/status/1562403410791567360 52:20 Drops the Suit https://twitter.com/AutismCapital/status/1562541877689126913 56:40 NEWS 58:30 Merge Updates https://twitter.com/TimBeiko/status/1562418377582419968 1:00:20 Merge Dashboards https://twitter.com/duneanalytics/status/1562021273575751680 1:00:45 Overhyped Merge https://newsletter.banklesshq.com/p/is-the-merge-overhyped 1:11:15 Uniswap Open Source Development https://app.uniswap.org/#/vote/2/24?chain=mainnet 1:15:50 Nike vs Adidas https://twitter.com/Blockworks_/status/1561666150991335431 1:17:15 Pudgy Penguins https://decrypt.co/107974/pudgy-penguins-ethereum-nfts-pump-83-as-meta-nansen-execs-join-advisory-board 1:18:20 BendDAO Bank Run https://metaversal.banklesshq.com/p/the-benddao-bank-run- 1:21:54 Gary Gensler https://twitter.com/cobie/status/1561809080297177092 1:25:00 Coinbase ENS Integration https://twitter.com/financeguy74/status/1561872288399691777 1:28:35 Swell Launch https://blog.swellnetwork.io/mainnet-soft-launch-announcement/ 1:29:06 Arbitrum Nitro https://twitter.com/arbitrum/status/1561812173793419265 1:29:30 Jobs https://pallet.xyz/list/bankless/jobs 1:31:00 Questions from the Nation https://twitter.com/BanklessHQ/status/1562470760824057857 1:32:00 Merge for Norms https://twitter.com/Yash_WeCan/status/1562472673795457029 1:35:25 More Merge Questions https://twitter.com/YoEdJoCo/status/1562472379313684480 1:36:20 Bullish Layer 2 https://twitter.com/_satyakikc/status/1562651521837600770 TAKES 1:39:11 Unicorn Markets https://twitter.com/TrustlessState/status/1562559417857773568 1:40:00 Good Podcast https://twitter.com/TrustlessState/status/1562569160474824705 1:41:05 Eric Wall Poll https://twitter.com/ercwl/status/1562673861434703876 1:43:25 What David’s Bullish On 1:45:05 What Ryan’s Bullish On 1:48:30 MEME of the Week https://twitter.com/NFTek2424/status/1562809727608066048 ----- Not financial or tax advice. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures #ethereum #eth #crypto #cryptonews #btc #bitcoin

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

• 0:00Ryan Sean Adams?

  Some bad things happening, but also some good things happening.

• 0:06Ryan Sean Adams?

  Happy Friday morning to you. It is the fourth Friday of August and David, the special time, what time is it?

• 0:12David Hoffman?

  Ryan, it's the Friday Bankless Weekly Rollup where we cover the entire weekly news in crypto, which is always an ambitious endeavor, yet we persevere into the frontier every single week, nonetheless, with a cup of coffee, of course.

• 0:25Ryan Sean Adams?

  Yeah, I hope you are enjoying your cup of coffee. By the way, David, did you get a cup of coffee when you went in the mountains? Last week you were in the mountains. Like, what'd you take with you? Did you enjoy any coffee or any amenities?

• 0:36David Hoffman?

  We had coffee, but then we ran out of water, so we had to skip the coffee and walk out of there. Yeah.

• 0:44Ryan Sean Adams?

  I guess you need water. Is coffee higher on Maslow's hierarchy of needs or is it lower?

• 0:49David Hoffman?

  Well, it definitely makes you lose water. So if you're short on water, you gotta skip the coffee.

• 0:54Ryan Sean Adams?

  How was the trip, though?

• 0:56David Hoffman?

  Dude, it's super good, man. We were 5,000, 5,500 feet up, but we're like, zero is, we started at like 3,000, but like we're in Washington, so basically like really close to sea level. You can see the ocean from the top of the mountain. It was great, man. It was great.

• 1:11Ryan Sean Adams?

  You also had cell service, I heard, because you're checking in.

• 1:14David Hoffman?

  Yeah, so we were so high on the mountain that like we had sightlines with Victoria, British Columbia. And so we actually were able to get service. And so when I wake up on Sunday, I just like look at my phone to check out the time. And I have like a widget on my front screen that shows me the ether price every single.

• 1:29Ryan Sean Adams?

  You're checking prices on the mountain. I knew it.

• 1:32David Hoffman?

  I can't not check prices. It's on my home screen. Like, it's the first thing I look at.

• 1:35Ryan Sean Adams?

  You can delete it from your home screen?

• 1:37David Hoffman?

  No, no, I can't.

• 1:40Ryan Sean Adams?

  Okay, it's hardcoded into the OS.

• 1:42David Hoffman?

  And so I wake up on Sunday morning, like, sweet, we're down like 10%, like big ass red candle, excuse my language, sorry.

• 1:47Ryan Sean Adams?

  Yeah, you knew it, huh? It was right after the rollup too, and prices were up. So, and then we had a crash. But you also saw some like strange activity while you were up there.

• 1:57David Hoffman?

  Yeah, dude.

• 1:57Ryan Sean Adams?

  Okay, so I don't know. This sounds a little conspiracy theory to me, so convince me.

• 2:01David Hoffman?

  This is what we were worried about. Okay, so it is 9:46. It's dark out. We're on the top of the mountain. And, you know, we're watching a shooting star here or there. There's a shooting star. There's a shooting star. It's nice, super cute. And then we see this very slow line in the sky. I'm like, wow, that is the slowest moving shooting star I've ever seen. And then it just doesn't go away. Like, shooting stars go away like a second or less. This thing, we saw it for 90 seconds, maybe a little bit longer. And it was just like this long line. And it had this weird trajectory. It was like, first it was coming down across the horizon like a shooting star. But then it changed direction and started moving toward us. And then it went right over us. And it was this line of light. And as it got closer and closer, it turned from a line to like a series of dots.

• 2:45David Hoffman?

  And then it looks like we were like right below, like, you know how those planes like trail, um, signs like, you know, marry me, Susan or something. Yeah, it was like that but lights. But who has ever seen those with lights on them? So like, that wasn't it.

• 2:59Ryan Sean Adams?

  So what do you guys think in there? Like, there has to be a group of five of you. I know one of them is gotta be a believer.

• 3:04David Hoffman?

  UFO believer. I feel like a very sane, grounded individual. And I'm like, I don't know. I don't have an explanation for what this is. This is, it can't be a plane.

• 3:12Ryan Sean Adams?

  You think it's possible?

• 3:13David Hoffman?

  I don't, I don't know. Like, it is by definition, an unidentified flying object because we didn't know how to identify it. So we were all, dude, like, there's no explanation for what this thing possibly is. Like, 30 to 40 dots in a row flying at a uniform. There was no sound, no propeller engine, no jet sound. Like, didn't make any goddamn sense. And so we, well, we had service. So we started pulling up Twitter and we typed in like, UFO, uh, Olympic Peninsula, Washington. And like, 50 other people's videos and photos of the same exact thing all showed up. And like, people freaking out like, what the hell is this? What the hell is this? And then we saw, like, people also saw in like Albany, New York, and like Minnesota. And we're like, what the hell is going on?

• 3:53Ryan Sean Adams?

  That's weird. This is in the middle of the night.

• 3:55David Hoffman?

  Middle, 9:46 PM. 9:46 PM. Uh, because I have the video like tagged. And then, and then because we're eventually figuring it out, and it's like, apparently, it's Starlink launched like 58 new Starlink satellites. And when they launched them, apparently they'd launched them like ducks in a row. And they they start very close together, but over time they spread out. But like, it took us forever to get there. And also, that's what they say allegedly. Like, it's very, very, like, like coincidental cover-up story. And then the next thing that happens is that we see again, exactly 24 hours and 2 minutes later, when we go back to the cabin, and we're sitting out on the beach under by the campfire. And we see it again. We see it again. It was one of the most like-

• 4:37Ryan Sean Adams?

  God, it's just Elon Musk messing around with it. Not aliens.

• 4:41David Hoffman?

  Rich people playing rich people games, I guess so.

• 4:43Ryan Sean Adams?

  Yeah, I guess so. But you know what? This is, um, this is not gonna become a UFO truther podcast, I hope, David. Unless you are, like, what's the probability now you think this was a UFO versus Elon?

• 4:54David Hoffman?

  Uh, I mean, I would expect, so when we, we were up there, we were like, okay, we're gonna get back to like civilization tomorrow, and like, either aliens are gonna be here, or we're gonna have like a rational explanation for this. Aliens are not here, and no one has else has said it's not Starlink, so like, I'm going with Starlink.

• 5:10Ryan Sean Adams?

  All right, well, Bankless listener, if you've, if you've heard this story, you have other information for David to feed his alternative ideas, then please send it over to us. But we're gonna get to crypto right now, first thing on the menu. Yeah, you remember crypto, the other big conspiracy theory out there? The tornado chill, tornado cash, just got a little bit colder, some bad things happening, but also, some good things happening. Maybe a page has turned, some people are fighting back. We're gonna talk about that. David, what else are we covering?

• 5:37David Hoffman?

  Tribe DAO is shutting down. There's a proposal from the Tribe DAO team to shut down and call it a day, much to the consternation of the tribe community. So we're gonna cover that, and like, how the proposal actually looks like to wind the thing down. And then BitBoy, the, you know, BitBoy is crypto's biggest YouTuber account, filed a lawsuit on a, against another YouTuber who made a video of him talking about him being a scammy pump-and-dumper. And then BitBoy files a lawsuit of like citing like defamation and like destroying BitBoy's business. And then all of crypto Twitter, Ryan, shows up to defend this other YouTuber, who's not a crypto YouTuber, who made this video about BitBoy.

• 6:20David Hoffman?

  So we're gonna cover all of that drama, and this, and Kobe, who just yeeted $100,000 to help defend this innocent crypto YouTuber. High drama, high drama on crypto Twitter this week.

• 6:32Ryan Sean Adams?

  Awesome. I think we also have some merge updates, of course, some coming out from the Ethereum Foundation too. So a date is definitely being proposed. Speaking of dates that are proposed, there's a date of a conference that's coming up. Our friends and sponsors, SmartCon, this is a conference by Chainlink. This is a crypto web three conference. Look at these speakers, David. This conference is absolutely stacked. I've attended virtually the past couple of years. This time it's in person. It's physical. So you know, I won't be there because it's a physical conference, but everyone else should go. I'm the weird one because who do we got? Let's go into this conference, David.

• 7:09David Hoffman?

  Yeah, we got Eric Schmidt, former CEO of Google. We have Sergey Nazaros, of course, founder of Chainlink, Bology. Recently had him on the podcast, SBF, Ed Felton from Arbitrum, Stani from AVE, Emin from Avalanche, Anatoly from Solana, Kane from Synthetix. And so this is the first time that SmartCon is actually in real life. And so previously it's been in virtual every single year, but this is in real life. There is a link in the show notes to get a ticket if you so choose to go and also a code bankless to get a hefty discount if you also want a hefty discount, which why wouldn't you?

• 7:43Ryan Sean Adams?

  Hefty discount. This is for you, for the bankless community. Just type in bankless and get that discount, a gift from the folks at SmartCon. Thank you for that. All right, David, let's get to the markets today. Bitcoin, I'm seeing some red candles.

• 7:56David Hoffman?

  Yeah, some big boy red candles. Yeah. Right after we recorded the weekly roll up last week. So like when bankless listeners opened up the weekly roll up Friday morning, like all of our numbers were all bad. It was all bad. Yeah. It happened like Friday. Yeah. And so, let's see, Bitcoin started the week at $23,000 and a half, $23,500, ending the week at $21.6,000, down 8.2% on the week. Oof.

• 8:22Ryan Sean Adams?

  That doesn't feel good. Down almost double digits and Ether, I think, is down double digits this week.

• 8:27David Hoffman?

  Double digits. Yeah. Started the week at 1920, ending the week at $1,700 where we are now, down 11.4% on the week.

• 8:35Ryan Sean Adams?

  David, what happened to my merge trade, man? Did it die last week?

• 8:38David Hoffman?

  No, it's fine. It's fine. We're back 14 days. We're back 14 days.

• 8:43Ryan Sean Adams?

  Just back in time 14 days. Not a big deal. That's what happens when you're too zoomed too closely to this. But how about the ETH Bitcoin ratio? Because that's a tell for whether we're in merge season or not.

• 8:55David Hoffman?

  Yeah, we started it last week at .0795, down to .0876, so down 1%. But if you look at the chart, like you zoom in, there's basically .08, went all the way down to .073, and then recovered to where it is now at .0787. So like, went down a lot and then recovered a lot. And so to me, that like pressure, that buy pressure to keep the ETH BTC ratio at its like local highs, I think is the merge trade.

• 9:26Ryan Sean Adams?

  That's kind of strange. Like what happened here?

• 9:28David Hoffman?

  That's merge strength. Merge strength.

• 9:29Ryan Sean Adams?

  What happened here? Like, why did this happen on Friday, last Friday? This big candle down?

• 9:33David Hoffman?

  I don't know. I don't know. Markets gonna market. Crypto does go down. Did you know?

• 9:39Ryan Sean Adams?

  Sometimes, on a daily, hourly, minute-by-minute basis, it goes up and down. That's what they tell me.

• 9:44David Hoffman?

  Sometimes it goes down for an entire year.

• 9:46Ryan Sean Adams?

  I'm back to David. Why do we even do numbers, huh? Every week. How about the total crypto market cap? While we're doing numbers, what is that looking like?

• 9:55David Hoffman?

  Down from where it was last week, 1.16 billion, excuse me, trillion, to where it is now at 1.086 trillion. So down, what is that? 0.8 trillion on the week.

• 10:07Ryan Sean Adams?

  Do you know, David, I remember a time when total crypto market cap was $10 billion. Some people remember way, like way, like sooner than that. But like, I remember the days, like 2016, when Ethereum was like 500 million to a billion, and like Bitcoin was just the big behemoth. So, zooming out, this feels a whole lot better. Like, $1 trillion. What a success!

• 10:31David Hoffman?

  Yeah, zooming out to where 90% of these listeners weren't here.

• 10:35Ryan Sean Adams?

  Sorry. But look at these things, you know, like, I don't know. We're back to crypto prices go up and down.

• 10:41David Hoffman?

  I came in in June of 2017, and the total crypto market cap was $80 billion. Wow.

• 10:47Ryan Sean Adams?

  See? How silly is that? Now you're at a trillion. What a success. It's been very successful.

• 10:53David Hoffman?

  Yeah.

• 10:54Ryan Sean Adams?

  And June of 2017 was like, kind of like, pretty frothy at that time.

• 10:58David Hoffman?

  We were well into the bull market, yeah. I was a 2017 top buyer, certainly.

• 11:05Ryan Sean Adams?

  That top buyer badge with pride. I think we all were. We've all bought some tops around here. That's how you learn in crypto, but let's talk about some gov stuff. You want to talk gov stuff? A little bit, just a little bit, because some stuff's happening. Biden just okayed a sweeping student loan relief plan as midterms near. That's a key word, as midterms near, of course, right before November. But also, what's happening here? It looks like some debt forgiveness.

• 11:32David Hoffman?

  Yeah, $10,000 of student debt is being forgiven for anyone who receives less than $125,000 a year. So if you make $125,000 a year or less, you have 10,000 less dollars of student debt if you had it.

• 11:47Ryan Sean Adams?

  Just been eliminated.

• 11:48David Hoffman?

  It's gone, gone. They deleted the zero or the $10,000. If you had a Pell Grant, you got up to $20,000 of student debt for low and middle income borrowers who had a Pell Grant. So, cool. So like, you know, a lot of people have student debt, so add like multiply $10,000 by the number of people who make less than $120,000, $25,000 a year that who have student debt. Like, that's a large number. I don't really, I think there's that calculation in this article, but it's a pretty good number.

• 12:16Ryan Sean Adams?

  It's funny. I mean, you just said, cool. Some people think, cool. And a lot of people who have student debt are like, this is cool. You know, some people who don't, but they're just supportive of debt relief are also think this is cool. Some other people don't think it's very cool as well, right? This does remind me a lot of the PPP loans, though, which were loans for businesses. Some small businesses got the funds. A lot of large businesses got the funds that were eventually forgiven during COVID. It kind of reminds me of that. And it strikes me that, you know, some of the people who got the money are generally in favor of this and people who didn't get the money aren't, right? And so like

• 12:55David Hoffman?

  How that works.

• 12:56Ryan Sean Adams?

  It just feels very much like different constituencies are hooking, finding their way to hook into the money printer, right? And whether it's a good or bad thing, that's kind of beyond the scope of this podcast to consider. But what we are looking at is the money printer continues to go brr, right? And one, you know, It's red or blue, one politician gets in control and rewards their constituency. Then another gets in control of rewards there through tax cuts or debt relief or stimulus checks or that sort of thing. I feel very much like, David, we're kind of losing the credible neutrality of the money printer through this process, though, and that is certainly a contrast with crypto. David, you've got a meme here. I think this is the classic trolley problem. What are we looking at here?

• 13:41David Hoffman?

  Yeah, so there's two fights on this debate. There's like, people, some people are sad that like they paid back their student loans and then then the student loan gets canceled and they're like, well, F. Like, I shouldn't have paid it back. I should have waited to just get it canceled. So there's like, I think, I thought a funny trolley meme here, trolley problem. And so the trolley problem, of course, traditionally, it's there's one person on one track, five people on the other track. If you do nothing, if you don't divert the trolley, the trolley is going to kill five people. And so if you do something, if you divert the trolley by like switching the lever, then it only kills one person. It's a moral question as to like, do you take the action? You, as a person with agency, do you take the action to divert the trolley to kill one person rather than five people?

• 14:23David Hoffman?

  In my mind, you absolutely do that, even though you then become like a murderer technically. You also save five people. It's like net beneficial anyways.

• 14:29Ryan Sean Adams?

  Utilitarian.

• 14:30David Hoffman?

  Utilitarian, yeah. This trolley, but there's also there's like an infinity number of like renditions of the trolley problem. So this one, the trolley has already killed 10 people. And if you divert the trolley, it won't kill five people. It will instead kill zero people. And then the person who's like in control of the lever says, but if I divert the trolley now, that would be unfair to the people that is already killed. I thought it was funny. I thought it was funny meme.

• 14:54Ryan Sean Adams?

  Yeah, no, I get it. This is kind of the argument. It's like, but you bring up an interesting question, David, about your ethics. I'm curious here. So have you ever played that like trolley problem game where it's like 30 different renditions of the trolley problem?

• 15:06David Hoffman?

  Yeah, yeah, yeah. And then they start off relatively like easy, but then they get more and more like hard.

• 15:11Ryan Sean Adams?

  Yeah, okay. So there's like some that are very, very difficult, right? So like you got a baby on one side and then five people over 85 on the other side. And do you flip the switch? Is it baby or do you let the trolley go kill five 85 year old people? What do you decide in that case?

• 15:30David Hoffman?

  Oh, am I on the stands here?

• 15:32Ryan Sean Adams?

  Yes, I'm curious. As my business partner and co-host, I need to know your moral ethics, David. We haven't discussed this yet.

• 15:40David Hoffman?

  Big utilitarian over here. So like the way that I would do this, if I was to do this, like, how old are these people? Eighty, eighty years old?

• 15:48Ryan Sean Adams?

  Eighty-five.

• 15:50David Hoffman?

  Okay, so like, I don't know what the stats are, but the way I would come to determine this is that if you are eighty-five years old, what is your expected remaining years to live? And so like, if your expected remaining years to live is like eight, multiply that by five and you get forty. And then you take the expected remaining years to live of the baby, and if it's greater than forty, then you kill the old people and save the baby.

• 16:14Ryan Sean Adams?

  Okay, let me modify that. What if one of these eighty-five-year-old people are Nobel Prize-winning scientists on the cusp of curing cancer? What then?

• 16:24David Hoffman?

  Oh, if you know they're on the cusp of curing cancer, then you absolutely kill the goddamn baby, because that baby hasn't done anything.

• 16:30Ryan Sean Adams?

  He's sick.

• 16:32David Hoffman?

  Well, no, because like, if you cure cancer, you recreate like billions of years of life.

• 16:40Ryan Sean Adams?

  There's no good answers to these problems, all right?

• 16:41David Hoffman?

  Kill the baby, Ryan, kill the baby.

• 16:43Ryan Sean Adams?

  Oh my god.

• 16:44David Hoffman?

  Do it!

• 16:45Ryan Sean Adams?

  We're about to get sued by BitBoy, or all sorts of different agencies here that we've just made angry.

• 16:52David Hoffman?

  My favorite one, which I think is the one that, okay, the most answers I answered with consensus, but the one that I didn't answer with consensus was, do you kill one human or five sentient robots? What do you do?

• 17:05Ryan Sean Adams?

  Well, I've got to represent the AI side, so definitely.

• 17:11David Hoffman?

  Well, okay, that's good, because I also represented the AI side.

• 17:15Ryan Sean Adams?

  Oh my god, can we get back to crypto?

• 17:18David Hoffman?

  Sentience is sentience, who am I to judge?

• 17:20Ryan Sean Adams?

  You know, at some point in time, I guess maybe AIs will be making these decisions for us. That reminds me of our episode with Dimitri that's coming up.

• 17:29David Hoffman?

  Will the future AIs of the world, please let it be known that if the trolley problem kills AI, then I choose to save you?

• 17:37Ryan Sean Adams?

  Is that Roku's balisk, right?

• 17:39David Hoffman?

  Roku's basilis, yeah.

• 17:40Ryan Sean Adams?

  Yeah, Roku's basilis. Anyway, let's move on.

• 17:44David Hoffman?

  Deep cuts so far on this roll-up.

• 17:45Ryan Sean Adams?

  Deep cuts on this roll-up. Maybe this will make the cut, maybe you'll never hear this, we'll see. Did you know, though, okay, so we're just talking about Biden, more money printing, of course, more debt forgiveness. That is what it is. Here is a tweet from Jacob Franek, who says, "A Fed study finds that 60% of all US inflation over 2019 to 2021 was due to what? A demand for goods, thanks to fiscal stimulus and other aggregate demand factors."

• 18:16David Hoffman?

  Ryan, what is student loan forgiveness?

• 18:18Ryan Sean Adams?

  This is fiscal stimulus.

• 18:20David Hoffman?

  Is that fiscal stimulus?

• 18:21Ryan Sean Adams?

  Yes.

• 18:21David Hoffman?

  Is that increasing everyone's net worth by $10,000?

• 18:23Ryan Sean Adams?

  It puts more money in people's pockets, more perceived money. They're more willing to spend on other things, including meme stocks, because they're probably millennials, and also crypto, right? Which is kind of an interesting byproduct. But there's a direct link between the money printing and fiscal stimulus, of course, and inflation, which is a problem, David, because the US is in the process, the Fed is in the process of trying to get inflation under control. This is a chart from Pantera Capital, and this is showing the real 10-year Treasury yield. Okay, so if you buy a Treasury bond for 10 years, your real rate of return right now, that's the return of the bond, minus inflation, is negative 6%.

• 19:07David Hoffman?

  Return of the bond.

• 19:08Ryan Sean Adams?

  Right? Negative 6%. David, would you buy this bond earning negative 6% per year right now?

• 19:15David Hoffman?

  Okay, so I feel like there's two rational ways to say yes to that question. If I am bearish on the stock market, and I think the stock market is going to go down more than 6%, then yes, I would buy bonds.

• 19:29Ryan Sean Adams?

  Rather than have it in stocks?

• 19:31David Hoffman?

  Rather than have it in stocks, yes. What was the other one? I can't remember.

• 19:37Ryan Sean Adams?

  You're the Fed. The other one is maybe you're the Fed, and you have to buy bonds to keep the entire, because that's what's happening.

• 19:43David Hoffman?

  That's the other rational outcome, yeah.

• 19:44Ryan Sean Adams?

  What's actually happening is they're kind of running out of buyers, right? Because a lot of people are like, "This is not a great deal with inflation running so hot", and they're buying alternative assets. So the Fed has been buying a lot of bonds historically, of course. Anyway, it's a real quandary, and I think there's a juxtaposition between debt forgiveness, inflation... Inflation and also the real return on sovereign bonds and you contrast that with crypto. And this is the market we find ourselves in right now. David, there's also some energy price things going on. What's this?

• 20:14David Hoffman?

  Yeah, this is a graph of the cost of a megawatt hour in Euro terms in Germany. I haven't been paying too much to the macro markets, except for like a tweet here and there talking about like commodities markets, which are looking bad and energy markets, which are looking worse. So just let it be known, we don't have time to go into it. And I'm also just not an expert. But energy in Europe is really expensive right now. Going to the start of the year, say, let's just pick an arbitrary point is like January 2022. The cost of a Euro megawatt hour was about like 80 to 100 euros for a megawatt hour. We are currently up to 313. So it's three Xed and since the start of the year. So energy costs Europe going up. That's bad.

• 20:55Ryan Sean Adams?

  And it's going up relative to Euros in particular, which is kind of bad because Euros are Europe is the next exporter, net exporter of energy. So they don't have energy kind of backing their currency, the way rubles do. More on that in the Luke Raman episode, which I think is a fantastic episode on that that we did. But David, we're talking about money printing. SBF and FTX is definitely printing some money back in the bull run.

• 21:19David Hoffman?

  It's not printing money if it's revenue.

• 21:21Ryan Sean Adams?

  I guess so. All right. So some leaked financial data. How much was FTX making last year?

• 21:28David Hoffman?

  In 2020, first off, before we get to last year, in 2020, FTX was making just a measly below $90 million. You know, just below $90 million in 2020. In 2021, they were making over a billion dollars of revenue. So from under 90 million to over a billion in revenue. Some insane profit margins, profitable with 27% operating margins. And then not only did they make just a ton of money in 2021, but they also made a ton of strategic acquisitions. And so they have just like, like Sam Bankman Fried and FTX just won the bull market. Made a bunch of money, bought a bunch of businesses at a very cheap discounts because all of those businesses were distressed. So FTX really just won the bull market for sure.

• 22:10Ryan Sean Adams?

  Yeah, they definitely did. And that's what they're doing, buying these distressed assets right now. David, this is interesting. I think we wanted to include this year because it seems like a layer two season might be afoot, some more competition for alternative L1s. At least on the NFT side, this is a stat from immutable X. What's immutable X doing?

• 22:30David Hoffman?

  Immutable has passed Solana in daily NFT sales volume in dollar terms. Now it is the only chain, it's the second chain with the most volume behind the Ethereum Layer 1. And this kind of just makes sense. Like Immutable is a NFT optimized platform. It's built for NFTs and for trading NFTs, and also with super cheap fees, kind of like Solana. So perhaps eating into Solana's market share, but also Solana overall is down in NFT trading volume. It was between like 3 and 5 million dollars in daily NFT trading volume back in June. Now it's down to 1 million dollars of daily NFT trading volume, where IMX has now gone to like 1 and 1/4 million dollars in trading volume.

• 23:11Ryan Sean Adams?

  This is one thing we predicted, not sure if we're right on this thesis, but alternative Layer 1s will find themselves competing more with Layer 2s, Ethereum Layer 2s than Ethereum directly. Maybe that's starting to play out now.

• 23:24David Hoffman?

  It's also just a big plus one to the modular Ethereum thesis, where specific chains that are custom-built to do and perform specific activities are going to be better at those activities than monolithic chains who have to like have trade-offs because they want to do everything at once.

• 23:40Ryan Sean Adams?

  Right. And here's a plus one to the bankless thesis. So maybe we've learned something this cycle, as we always learn things. Did you know that even in the midst of a bear market, crypto hardware wallets are up, up bigly? Okay, so Ledger says their sales recently blew up since the Celsius hacked by 4.5x. 4.5x Trezor and SafePal also up, hefty sales figures. People are withdrawing their funds from centralized exchanges. They're taking sovereignty of their own crypto, taking their own keys. They're going bankless and they're buying hardware wallets. And that's on the back of centralized exchange failure. This is a good thing, I think. We are learning our lesson, and we are getting more people

• 24:25Ryan Sean Adams?

  to go bankless. I'm kind of bullish on this, actually, David.

• 24:28David Hoffman?

  Yes, of course. This is, I mean, this is how the crypto industry learns. We learn through pain. So when something bad happens, when everyone gets like a punch to the stomach, they're like, I didn't like that. What can I do to not have that happen to me again? And hardware wallets are definitely a solution.

• 24:44Ryan Sean Adams?

  Absolutely. Get more resilient as time goes on. David, got a lot more to cover in the next section. What are we going to talk about?

• 24:50David Hoffman?

  Oh my god, so much. First coming up next is the freezing, the chilling effect of the tornado cache. But we also got some thawers on the horizon, people trying to stop the freezing and thaw things. Am I drawing out this metaphor too much? I don't know, probably. But in addition to that, the Tribe DAO trying to unwind, trying to shut down, proposal from the Tribe DAO team to just call it a day with Tribe and the community backlash as a result of that. And also, BitBoy, Suzie YouTuber, but the entire crypto community, the entire crypto Twitter community shows up to defend that YouTuber. So we'll get into that drama, which is some juicy drama, and more, right after we talk to some of these fantastic sponsors that help you go bankless.

• 25:34David Hoffman?

  Rocketpool is your friendly decentralized Ethereum staking protocol. You can stake your ETH with Rocketpool and get our ETH in return, allowing you to stake your ETH and use it in DeFi at the same time. You can get 4% on your ETH by staking it with Rocketpool, but you can get even more by running a node. Rocketpool is the only staking provider that allows anyone to permissionlessly join their network of validating nodes. Running a Rocketpool node is easier to set up than running a solo node, and you only need 16 ETH to get started. Why would you do this? You get an extra 15% staking commission on the pooled ETH, so your APY is boosted. So if you're bullish ETH staking, you can increase your APY and get some extra tokens by adding your node to the decentralized Rocketpool network, which currently has over 1,000 independent validators. It's yield farming, but with Ethereum nodes. You can get started at rocketpool.net and also join the Rocketpool

• 26:18David Hoffman?

  community in their Discord. You can find me hanging out there sometimes in the chat, so I'll see you there. Lens Protocol is an open source tech stack for building decentralized social media applications. It is the new era for social media. We all have toxic relationships with our Web 2 apps. We want to break up with them, but we can't. These applications own our digital lives and all the relationships that we've made. We need to break through to a new paradigm of social networking applications that we control, rather than them controlling us. Lens isn't a social media app, it's a protocol to let 1,000 Web 3 social apps bloom. Lens is a permissionless and transparent social graph that is owned by the user. In crypto, we say not your keys, not your crypto, and on Lens, we say not your keys, not your profile. With Lens, your followers go with you to whatever social media application you want to use. And instead of being trapped by an

• 27:00David Hoffman?

  algorithm chosen by that app, Lens lets you choose the way you want to experience your social media. Alright guys, we are back.

• 27:07Ryan Sean Adams?

  More on tornado cash, so more on the OFAC sanctions. Of course, as you know, OFAC sanctioned for the very first time smart contracts on Ethereum, the tornado cash smart contracts. Last couple of weeks, we've been dealing with and talking about the fallout from that. You're one of the fallout items. This is in the negative section. There's also some positive things we're going to talk about, but what is this first headline we're looking at, David?

• 27:32David Hoffman?

  So post-merge, a lot of, all of the Ethereum clients are going to have this thing called MEV Boost kind of plugged into it like a little bit of a sidecar. That's produced by Flashbots. And this is something that is first an accessory to the Ethereum protocol, but then later becomes integrated into the Ethereum protocol. Basically, it's a precursor to proposer-builder separation, and it allows Ethereum stakers to just receive pre-created blocks from MEV Boost, from these people called block builders who are building blocks, which is kind of a computationally intensive thing to do. And then these block builders just propose these blocks to proposers, ETH stakers, proposers are ETH stakers, and then ETH stakers take these blocks and then they just like, oh, I'll take that bid associated with that block and I'll propose that.

• 28:14David Hoffman?

  This service is going to be created by this thing called MEV Boost, but sadly, Flashbots is a US centralized entity, and they stated that they plan on complying with OFAC regulations because they don't want to go to jail, like relatively rational. And so as a result of that, that's one of the big conversations that trigger this Ethereum censorship conversation, saying, oh, well, if Flashbots is going to maintain OFAC compliance or almost doing censorship at the protocol level. And as a result of that, Flashbots has accelerated the open sourcing of MEV Boost and their relayers so that more people can participate to remove some of that censorship. But the point here is that Flashbots, as a centralized, regulated entity, is not going

• 28:57David Hoffman?

  to go toe-to-toe with OFAC, and they will be complying with OFAC. I actually wouldn't necessarily classify this as a tornado cash chilling effect. I would actually straight up saying like this is, they would otherwise be in violations. And so you can't really blame them. Like, I wouldn't say like, no tornado, excuse me, no Flashbots people, you got to go to jail for us, but it's also stuff we don't like.

• 29:19Ryan Sean Adams?

  Yeah, definitely. And there's two things for this. One, if you still have more questions on MEV Boost or Flashbots, go to the episode that we released earlier this week on Flashbots. You'll understand all of that. We actually recorded that episode before all the tornado cash stuff happened. So we weren't able to ask the censorship resistance questions. But if you're wondering how this affects Ethereum's long-term protocol censorship resistance, listen to our episode coming out with Justin Drake this Monday.

• 29:45David Hoffman?

  New Drake dropping.

• 29:46Ryan Sean Adams?

  It's so good. Okay, this is our episode, I think we called it Ethereum Uncensored. And he classifies this problem, the problem of Flashbots and block builder censorship as a form of weak censorship attack, weak censor attack. And so he goes through the difference between weak and strong and shows what the mitigators are. Anyway, fantastic episode. If you're worried, like I am, when you read a headline and you're like, Flashbots is blacklisting wallets, what does this mean? Got to do your research. Listen to both those episodes coming out on Bankless. We could talk a lot more about that, but there's more. FTX.

• 30:23David Hoffman?

  This is actually tornado cash chilling effect. As in, this did not need to happen. This is not, no one is forcing FTX to do this.

• 30:31Ryan Sean Adams?

  So there's a layer two, similar to tornado cash in terms of the tech stack it uses, but also different, more advanced in some ways. We talked about it a lot. It's called Aztec. And FTX actually froze a user account who sent coins to Aztec's ZK money. Aztec, of course, was not on any OFAC sanctions list. Does use similar technology, preserves your privacy on chain, only in the layer two. And then now here's a crypto exchange saying wallets can no longer, like, our users can no longer withdraw to Aztec. Big problem, flashing red light. What do you think about this, David?

• 31:06David Hoffman?

  Yeah, yeah, this is like, this is like an unforced error, I would say. Like, if we're going to be in crypto, can we live by crypto values, which is to not censor, like, minimum viable censorship that doesn't make operators of FTX and others go to jail? And so Aztec, you can just go and use Aztec right now. You're not violating any laws. You are free to do so. I'm not a lawyer, but I'm pretty sure that's true. And so the fact that we are banning people that are using Aztec before, just because it is privacy services, is like against the ethos of crypto. We didn't need to do this. This is bad.

• 31:43Ryan Sean Adams?

  Yeah, this is part of the chilling effect. Aztec also responding by implementing some practical deterrents and measuring their effectiveness. This is a tweet from Aztec and I understand why they're putting this out there. They want to say that they're doing something, but I don't like it, David. Look at this.

• 31:59David Hoffman?

  I don't like that they have to do it, yeah.

• 32:01Ryan Sean Adams?

  I don't like that they have to do it, or they feel like they have to do it. This is all part of the chilling effect. They're doing some IP-specific deposit rate limiting. They're looking at people's IP addresses and trying to rate limit how much you can deposit. Nothing else. This has a throttling effect to how many people use Aztec and the scale of what Aztec could be. This is a throttling effect for privacy for everyone in the world. Massive problem.

• 32:28David Hoffman?

  And let it be known that if you are North Korea or a highly motivated actor, you can get around all of these things.

• 32:34Ryan Sean Adams?

  Oh dude, that's the meme.

• 32:36David Hoffman?

  Except for the system-wide daily asset deposit caps, which they mean like you know like no more than 1,000 ether can go into Aztec on a daily basis. Other than that, it actually just makes it have more friction for individual people like you and me. And it's annoying for somebody like North Korea, but it's not going to stop them in the slightest.

• 32:56Ryan Sean Adams?

  David, have you seen that meme of like, there's a guy, there's like a sidewalk? Okay.

• 33:01David Hoffman?

  The six-inch wide or the six-feet-long barrier that has no barriers on either side and it's like banning North Korea.

• 33:08Ryan Sean Adams?

  Yeah, and so it's like, North Korea's obviously just going to route around all of this as they usually would. So the only group that you're punishing are law-abiding, privacy-seeking individuals, which is a big problem, but let's keep moving, David.

• 33:21David Hoffman?

  It's not Aztec's fault. That is OFAC's fault. It's OFAC's fault.

• 33:25Ryan Sean Adams?

  Yeah, yeah, I get that. I get that. It depends, like, I think there's a spectrum of how much you react to the chilling effect, right? I don't want, look, people can't code from jail. We can't do the Bankless Podcast in an orange suit, right? So like, we gotta, we gotta stay out of jail in order to continue this stuff. And yet, we don't have to be over-compliers either. And so I'm not sure what the line is here, but there is a line here. Anyway, the fight continues, but what is happening with Uniswap Labs?

• 33:56David Hoffman?

  Yeah, more wallets are being banned from TRM Labs, which the Uniswap front end and other front ends used to ban, to block banned addresses. So 253 crypto wallet addresses over the last month have been banned. They have been claimed to belong to criminals and hackers or interfere with US government sanctions. So DeFi front ends getting harder to use for, well, 253 addresses.

• 34:20Ryan Sean Adams?

  Sad. And you know, Jake Trivinsky says he doesn't blame organizations for doing this at this point in time.

• 34:26David Hoffman?

  Because of the chilling effect.

• 34:28Ryan Sean Adams?

  If you want more of the mitigators for front end kind of bans, then listen to that Justin Drake episode. He walks through all the ways we can solve this as a community. But also, David, the developer, Alex Persev, who was arrested by authorities in the Netherlands, is still in jail.

• 34:51David Hoffman?

  Right.

• 34:51Ryan Sean Adams?

  Okay.

• 34:52David Hoffman?

  And will be, yeah.

• 34:53Ryan Sean Adams?

  He's been in jail now, I think, for 12, 13 days.

• 34:56David Hoffman?

  Right.

• 34:56Ryan Sean Adams?

  And a judge just ruled that he will spend the next 90 days in jail as well until his hearing.

• 35:02David Hoffman?

  Until his court date, yeah.

• 35:02Ryan Sean Adams?

  No charges have been laid.

• 35:04David Hoffman?

  Uh-uh.

• 35:05Ryan Sean Adams?

  No charges. We don't know why he's in jail.

• 35:07David Hoffman?

  How are you supposed to hire a legal defense if you don't have charges?

• 35:10Ryan Sean Adams?

  It's unbelievable.

• 35:11David Hoffman?

  How do you go to court without charges?

• 35:13Ryan Sean Adams?

  They tried to. His lawyers apparently tried to make bail, and bail was denied. Again, no charges, right? It's just like, there's...

• 35:24David Hoffman?

  Where's the due process?

• 35:26Ryan Sean Adams?

  I don't know. I don't know what's going on. Anyway, some people are protesting this, as they should be. There are some ways to get involved, too. So some people are literally protesting in person. You know, this is my tweet. A judge just ruled that Alex must stay in jail. Alexi must stay in jail. Alex wrote some open source privacy code of public good. A few bad guys used his code, so they put him in a cage. Who's next? Vitalik? Tim Berners-Lee? We're going to arrest the creator of TCP IP and the internet? So I think we need to get loud as a community. And there are ways to do that. There's a website called set alexfree.nl where you can join a, sign a petition, join a Telegram group, donate in various places and start to speak out because we at

• 36:10Ryan Sean Adams?

  least need to know what he's being charged for. If they don't have a charge, they need to let the guy free because it looks like they're just putting him in jail for writing code.

• 36:18David Hoffman?

  Right.

• 36:18Ryan Sean Adams?

  How is that permissible in any free, open democratic society?

• 36:22David Hoffman?

  Yeah, there better be a real good reason why that guy's in jail. Otherwise, it's, it's completely ridiculous.

• 36:28Ryan Sean Adams?

  And also scary. So protests happening as well. But David, there's also some good news.

• 36:33David Hoffman?

  The thars coming to the rescue.

• 36:35Ryan Sean Adams?

  Okay, what's a thar?

• 36:36David Hoffman?

  Imagine people with flamethrowers just like flamethrowing the tornado cash chilling effect. That's like, that's what's going on here. So Representative Tom Emmer, who we've had on the podcast tweets out, "I sent a letter to Secretary Yellen regarding the unprecedented sanctioning of tornado cash. The growing of the adoption of decentralized technology will certainly raise new challenges for OFAC. Nonetheless, technology is neutral and the expectation of privacy is normal."

• 37:00Ryan Sean Adams?

  Oh, wow. I like that line.

• 37:01David Hoffman?

  Expectation of privacy is normal. Thank you. Thank you. And then this is what this guy, Ryan Sean Adams, says, "Thank you for standing up to privacy, Representative Tom Emmer." But he is not the only tornado cash flamethrower of the chilling effect.

• 37:16David Hoffman?

  Matthew Green, who we've also had on the podcast, he says on Twitter, "I made a GitHub organization to republish a fork of tornado cash repositories that were banned following the Treasury's sanction order of the other week. So there's tornado cash code back up on GitHub and new GitHub repository with tornado cash because all that is, is open source code." Matthew Green, nice job. Third tornado cash flamethrower anti chilling effect thar person, Tether.

• 37:43Ryan Sean Adams?

  Tether, that's unexpected.

• 37:45David Hoffman?

  Yeah, Tether. Tether holds firm on a decision to not freeze tornado cash addresses awaits law enforcement instruction. So basically saying, hey, guys, we're not going to freeze those, but you know, come talk, we'll come talk.

• 37:58Ryan Sean Adams?

  Yeah, send us a reason. Like, give, give us a court order. They're, they're not falling victim to the over compliance trap.

• 38:06David Hoffman?

  I will say though, Tether has like blacklisted, I think like 10 to 50 times more addresses than USDC has. But granted, it's been around longer and has had a higher market cap longer than USDC. Some asterisks there.

• 38:20Ryan Sean Adams?

  Definitely. Ultimately, David, as we get into the Justin Drake episode, our greatest defense is the layer zero, right? And if there is some sort of censored version OFAC sanctioned version of Ethereum versus an uncensorable original Ethereum, which one of the core devs going to support? Which one is the Ethereum community going to actually develop software for and actually want to use? This is a quote directly from the last core devs call from one of the core devs of Ethereum. He says this, "If we allow censorship of user transactions on the network, then we basically failed. This is the hill that I'm willing to die on. If we start allowing users to be censored on Ethereum, then this whole thing doesn't

• 39:05Ryan Sean Adams?

  make sense, and I will be leaving the ecosystem." Who's going to work on your OFAC sanctioned Ethereum version?

• 39:12David Hoffman?

  Chills.

• 39:13Ryan Sean Adams?

  It's not going to be the core devs of Ethereum, that's for sure.

• 39:15David Hoffman?

  Right.

• 39:17Ryan Sean Adams?

  Yeah.

• 39:17David Hoffman?

  See, that's a really good point. If OFAC wants an OFAC compliant version of Ethereum, they need to build all of that infrastructure from themselves, because no Ethereum core devs are going to be like, "Okay, yeah, we'll just build OFAC compliance into our censorship resistant blockchain."

• 39:34Ryan Sean Adams?

  Ethereum.gov, baby. Let's go. Let's do it. Build your own blockchain if you want to sanction one. China's doing it. Why can't the US do it?

• 39:43David Hoffman?

  Yeah.

• 39:43Ryan Sean Adams?

  Go do it.

• 39:44David Hoffman?

  Nice job. This is Marius on the Geth team. Geth, I mean, probably the most important piece of Ethereum infrastructure that exists.

• 39:52Ryan Sean Adams?

  Bullish, bullish. I think bullish layer zero. David?

• 39:55David Hoffman?

  Yep.

• 39:55Ryan Sean Adams?

  Let's move on to the next story. What are we talking about here?

• 39:58David Hoffman?

  Yeah, so this is the FAE fallout of the FAE DAO. So the title of this article here is that the FAE community is up in arms over the dissolution plan. And so citing technical, financial, and future regulatory risks, the team behind FAE says it's ready to call it quits. They make a proposal to the DAO, but that proposal will only partially repay $80 million of the Rari hack, which is now the Rari FAE Ferrari. Remember that whole thing? So Rari DAO...

• 40:29David Hoffman?

  Rari got hacked $80 million and there's plenty of funds to pay back these hack victims in full. But according to this proposal, this proposal pays back the tribe token holders, hence, you know, this is the tribe team, but and only pay back the hack victims partially. At the peak of the bull market, the Faye market cap, the Faye stablecoin was over $800 million. Now it's just $140 million. A comment from Sam Kazmani, founder of Frac, says it's a new low for DeFi. So an important part of this story is that back in May, holders of the tribe token, the the entity's governance token, all voted to make the community whole after the Rari hack by repaying the bad debt on behalf of the hacker. But the specifics would be hammered out later.

• 41:12David Hoffman?

  But then when the specifics were actually hammered out, the team with the majority owners of the tribe token, the actual like centralized team, voted no. And the team said that, well, the original vote was non-binding since it didn't take place on chain. Oof, big lame, big lame. Okay, so going into the actual details of the proposal for the wind down of the Faye DAO, which is coming out of the Faye team, there's three phases. A consolidation phase, a fuse hack repayment phase, and then a final redemption phase. Basically consolidation is just like a liquidity phase. It's like, let's just sell all the assets and get as much as liquidity as possible. The current account ownership, asset ownerships of the Faye DAO, the tribe DAO, 50,000 staked ETH, 22,000 ETH.

• 41:55David Hoffman?

  That 22,000 ETH is going to be converted into DAI using Balancer. That 50,000 staked ETH, because it's illiquid, is going to be distributed to tribe token holders pro rata because they can't sell that. So they're just going to distribute the staked Ether. There's 18.7 million LUSD from the liquidity protocol is going to be converted to DAI using periodic trades on Balancer or Curve. And then, so that will be retained by the DAO temporarily. And then they have some other assets, 1.5 million in VE Bal, which is going to be traded OTC for Faye, Tribe or Bal, 1.5 OM traded OTC with for Faye, Tribe or DAI. And then there's some liquidity Fox tokens and index tokens, which, I mean, very small amounts. And then. So after a lot of that staked ether gets distributed to the tribe token holders,

• 42:40David Hoffman?

  you have Faze 2, which is the Fuse hack repayments, which of the remaining assets in the org, any of the assets that could be converted to DAI, that 22,000 ether, and also that 18.7 million LUSD, that will be used to, whatever is left will be paid back to the Fuse hackers. And then there's the final repayment, which all Faye becomes wrapped DAI. So if you are a Faye holder, you basically become a DAI holder. Tribe becomes redeemable for a pro-rata claim on all the remaining assets after setting aside DAI for backing Faye. And then that's basically it.

• 43:13Ryan Sean Adams?

  Well, what kind of sucks about this is it feels like it's like, at least with BlockFi, depositors didn't get a haircut, right? Equity holders got a haircut. And it seems like in this case, the people who are depositing into Rari in this case, which was later merged into Faye, which is like what you were talking about, like Faye and Tribe is where this is all coming from. They are not getting protected. They're getting protected after all of the Tribe equity holders.

• 43:42David Hoffman?

  Yeah, the Tribe equity holders are like, I choose to pay myself.

• 43:47Ryan Sean Adams?

  Yes.

• 43:48David Hoffman?

  And not the hack victims.

• 43:49Ryan Sean Adams?

  Oh, and there was a governance proposal that said that we should-

• 43:52David Hoffman?

  We should pay the hack victims, but it's non-binding.

• 43:55Ryan Sean Adams?

  That one doesn't count. No, that was a fake one. So it's just, I'm with Sam, this is just kind of shit. Look, I don't know all of the details of this, so I hazard to talk too much about it. But in general, this doesn't strike me as a good thing or a good precedent to hit, or the right thing. This goes back to our episode with Hossu's.

• 44:16David Hoffman?

  Right.

• 44:16Ryan Sean Adams?

  Investor protection rights kind of suck, and so do depositor rights. And so it's very much like caveat empters, like, you know, buyer beware when you're doing this kind of stuff.

• 44:27David Hoffman?

  This is something that like, when we take this to like TradFi, TradFi is better than DeFi on this particular scenario. Traditional equity holders' rights.

• 44:37Ryan Sean Adams?

  Have better rights.

• 44:38David Hoffman?

  DeFi failed here because we don't have-

• 44:41Ryan Sean Adams?

  Same with depositors.

• 44:41David Hoffman?

  Exactly, yeah. Like, this is something that like, when we show to Gary Gensler, Gary Gensler is like, oh, this is great, this is good for me. I get to regulate this more. Yeah.

• 44:51Ryan Sean Adams?

  He's right on that piece of it.

• 44:52David Hoffman?

  This makes Gary Gensler right. Like, nice job, tribe.

• 44:55Ryan Sean Adams?

  He's wrong because he wants to fix it the Gary Gensler way, which is like make these things all equities.

• 44:59David Hoffman?

  Gives him more ammo, yeah.

• 45:00Ryan Sean Adams?

  Yeah, there's also, it gives him more ammo for sure. But so I'm disappointed with that. Like, not with the wind down and them choosing to quit, but I'm disappointed with them not helping the Fuse hack repayments. But I'm more disappointed, macroly, in like the class of 2021, David, DeFi builders. Not throwing everyone under this bus, but there've been a lot of them. And there've been a lot of DeFi builders that I feel like have abandoned their projects. Just like orphan them. Things got a little tough, right?

• 45:31David Hoffman?

  The going got tough and they folded, yeah.

• 45:33Ryan Sean Adams?

  I feel a little bit like DeFi grandpa over here saying, "Back in my day, Ruud Richardson and Maker Dow didn't quit." When the going got tough. But that's a bit how I feel. And I just want to say, rather than calling out some of the DeFi projects that did abandon, and founders that did abandon their projects, I just want to give a shout out to all the DeFi founders that didn't. Even when the going got tough. And there are a lot of them. I created a thread where the community kind of tagged a lot of people here. And it gave me some hope that, you know what, a lot of DeFi founders stayed with their projects, did not choose to abandon. I mean, ultimately, I don't understand why DeFi founders are taking this shortcut, reputational shortcut, when we're at the very first stages

• 46:16Ryan Sean Adams?

  of a multi-decade industry of like, you're going to abandon your project? Like, people are going to remember that. I know I'm going to remember. Bankless community will remember. And it might make it a little bit hard to re-enter after you've done something like this. That's all I'll say. DeFi grandpa's over.

• 46:33David Hoffman?

  The sad part is, is that Ether is actually like a lucratively bullish asset that if you exit into Ether, you still get so much upside. So I think that's where a large amount of the incentive comes from. It's like, oh, if I like abandon my project, I'll have enough Ether to stake for life.

• 46:49Ryan Sean Adams?

  It's the same story, David. We saw this in the ICOs, right? A whole bunch of them just kind of did an ICO and they half-assed their project. But then they kept all the ETH, right?

• 46:58David Hoffman?

  Yeah, but also I would say, it's people that like Take money too early, right? That's another problem of DeFi is like we fund people with way too much money way too soon. And they're like, wait, but I just made all the money. Like, what? That was the point. I'm done here.

• 47:12Ryan Sean Adams?

  I know. We've got to work on that for sure. David, next thing, though, is the BitBoy story. Okay, so I don't watch BitBoy at all. Like, I've never seen, I've never seen a BitBoy. I've heard of him by reputation. So let me just say that. Could you give some people some context for who BitBoy is? I get the sense that there is a whole nother world of crypto YouTube out there. We are barely YouTubers, by the way. If you're listening, if you're watching this on YouTube.

• 47:36David Hoffman?

  We are podcasters who put our stuff on YouTube.

• 47:39Ryan Sean Adams?

  We try our best, all right? But like, we're not YouTube optimized yet, although we're getting better, right, David?

• 47:44David Hoffman?

  Yeah, we are getting better.

• 47:45Ryan Sean Adams?

  But anyway, BitBoy was purely crypto YouTube. And what was he all about? What was his platform?

• 47:51David Hoffman?

  Yeah, he's, I mean, he's got an insane following. I think he's got something like over a million followers. I called him, well, I participated in some of this drama. I commented on a Dejounte Sartor's tweet thread, calling him like the Alex Jones of crypto. And maybe we could get the editors to actually play that clip, just a small like showcase of who he is. He's got this insane setup, like, just like a studio media studio office thing, kind of like how Alex Jones does. And then makes some just like very ridiculous like statements about crypto, like the one we're about to play right here.

• 48:22Speaker 02

  I want to be very clear on this. The US government is 100% behind the crash of USD.

• 48:31David Hoffman?

  Anyways, very bombastic dude. And also, totally and completely known for just like dumping on his followers. That's the, I don't watch him.

• 48:39Ryan Sean Adams?

  What do you mean dumping on his followers?

• 48:42David Hoffman?

  Signing deals, receiving tokens, pumping the tokens, and then selling the tokens. Like, that's just the general pattern, right?

• 48:47Ryan Sean Adams?

  Okay.

• 48:48David Hoffman?

  And like, I don't know this because I watch him personally. I know this because that's what everyone in my sphere like comments on. And so it's to the point of like, why would I ever go watch BitBoy? Like, yeah. Anyways, so that's the start of the story. So here is a thread from a Twitter handle tagged Atozy, A-T-O-Z-Y. And he puts out this thread that says, "I wish I didn't have to make this thread, but I'm being sued by YouTuber BitBoy Crypto for a video I made roughly nine months ago covering how he promoted a project named PAMP, P-A-M-P."

• 49:17Ryan Sean Adams?

  It's called PAMP?

• 49:19David Hoffman?

  Last night, a third server, like somebody who like, I listened to this guy's YouTube video, he got served three different times, and the third person finally actually showed up with a real lawsuit. What? And according to the- At his house? At his house, yeah. The first two were just like drafts of lawsuits, the third one was the actual lawsuit. And so this crypto YouTuber, he made this YouTube video about BitBoy. It was like a journalist, like, yo, this guy dumps on his followers. He like promotes, makes promotions, and then these tokens rug. And so like this whole PAM token like pumped, and then it went to zero after like BitBoy covered it. And I think this is just like one of many, many, many things that BitBoy has covered. And so, Ben Armstrong, aka BitBoy, says Erling Munchen Jr., which is Atozi, posted a video

• 50:02David Hoffman?

  on YouTube entitled "This YouTuber scams his fans: BitBoy crypto in November 2021." I'm reading out the details of the BitBoy filed lawsuit right now. The lawsuit claims a laundry list of offenses in that video, including defamation, infliction of emotional distress, torturous interference with business relations or potential business relations, violation of the Uniform Deceptive Practices Act, and violation of the Fair Business Practices Act. And so this is BitBoy suing Atozi for these things. And all Atozi did was like talk about how BitBoy pumped this token, and then dumped the token, and the token went to zero. And so- Which you can see on-chain. You can see it all. It's backed by data. Totally audited. It's not speculation.

• 50:45David Hoffman?

  And so this Atozi person, he's not like, he's just such a normal YouTuber, so he doesn't have the money to fight this lawsuit. So this is BitBoy, who makes bajillions of dollars pumping and dumping tokens, again allegedly, I'm pretty sure it's true though. Uh oh, David's- Oh, I'm gonna get it. Someone could be showing up at our house now. Yeah, you're gonna see a GoFundMe for another BitBoy lawsuit. Anyways, BitBoy coming in hard with like paying a ton of lawyers to like slam this guy with a bunch of lawsuits that he can't afford. So this crypto YouTuber, Atozi, spins up this GoFundMe with a $50,000 goal to defend him from BitBoy's lawsuit. And this is when it gets into crypto Twitter, and crypto Twitter doesn't like BitBoy. No one likes BitBoy, except for YouTubers, or YouTube consumers, who probably don't know better. And so CryptoCondom, excuse the name-

• 51:28David Hoffman?

  This is actually like a crypto community member is pretty good. Says, "I will be donating to Atoz's legal fees relating to BitBoy's lawsuit. If you have them, means I encourage everyone else to donate too. Scammers like BitBoy are a net negative to the space and should not be supported. If we don't police ourselves, no one else will." And so this is when this GoFundMe starts to actually gain some traction. And then, coming up next, Kobe tweets out, "I'll send $100,000 later or something. Win at PC." And then that gets 8,000 likes. And then Toby follows up a little bit later and says, "Sent." And yes, Kobe actually did send $100,000 to this crypto, non-crypto YouTuber, normal crypto YouTubers, just like Ethereum address.

• 52:13David Hoffman?

  I'm assuming Ethereum address. And so what happens next, what happens next, Ryan, is that BitBoy drops the lawsuit. And so this is Off System Capital saying, "Hearing BitBoy succumb to social pressure and announce he's dropping the lawsuit. Can anyone verify?" And then the next tweet says, "Yes, indeed." And so here's the clip that BitBoy said where he's on his own YouTube channel saying, "I'm dropping the lawsuit."

• 52:35Speaker 02

  Okay, where we're at is, at this point, it has become public. It's become an absolute fuck. We know Kobe gave him $100,000, so hopefully that money will go to good use. But yeah, so we are going to drop lawsuit 100%. And I'm sorry this became public.

• 52:49David Hoffman?

  Ryan, you want to know my favorite quote from this little clip here?

• 52:52Ryan Sean Adams?

  Yeah, give it to me.

• 52:53David Hoffman?

  Where BitBoy says, "I'm sorry this became public," is what he says.

• 52:58Ryan Sean Adams?

  I'm sorry I was found out.

• 52:59David Hoffman?

  I'm sorry I was found out to do frivolous lawsuits to allow myself to continue to dump on my followers.

• 53:05Ryan Sean Adams?

  Okay, but, David, here's one thing that doesn't connect to me. This feels like, you know, victims keep going back to their abuser. Why does this, why does this person have YouTube views? Why does he have followers? Why do, why do people, like, why do people do, subject themselves to this?

• 53:26David Hoffman?

  So like, look at the production value of this like of BitBoy, right? Like fantastic production value. No wonder he has a million views. He's optimized the YouTube algorithm. He's played the game. He's got his ads everywhere. He's got his like topics that he's run down. And like this kind of goes back to the heart of like crypto, I think. Where like, there are some projects that like you have these open source developers that just care about code. They don't know how to market. And then you have other projects which market themselves to the very end. And that's the product and they forget about the actual code development. This is the same thing. This is BitBoy, hyper-marketing optimized, knows crypto to enough extent to when people are like, oh, like I would like to know about crypto. I'll go to the most number one followed crypto YouTube channel because clearly that's the best channel.

• 54:09David Hoffman?

  And then they listen to BitBoy Crypto who's like, Pamp Token is gonna pamp. It's in the name. And then, and then he's paid a promotion for that. And then Token goes to zero and he makes a bunch of money. And then wash and repeat because people like people these days have amnesia. They forget everything. I would say, why do people go back to like their abusive relationship? It's because people have amnesia, Ryan. They forget.

• 54:31Ryan Sean Adams?

  Yeah, I, you know, once commented that, that crypto Twitter, crypto in general, has the, the memory of the goldfish. You know, like we just like constantly forget things. But is this also a lesson that if Bankless ever gets, if we ever get our stuff together and we increase our production value? People better like be scared.

• 54:50David Hoffman?

  Okay, well, we do plan on increasing our YouTube production value.

• 54:54Ryan Sean Adams?

  David's like, he's looking back at his studio that he's just built and he's like, uh-oh, what did I just say?

• 55:01David Hoffman?

  Oh, I think.

• 55:02Ryan Sean Adams?

  I think you can do both. It just takes longer. You just gotta not take shortcuts. Don't take shortcuts.

• 55:08David Hoffman?

  Plus like the Bankless community is intelligent. If we ever started like pumping and dumping tokens, it would, it would be over so fast. It wouldn't even take a half a second to like, oh, like Bankless went evil.

• 55:19Ryan Sean Adams?

  They wouldn't, they wouldn't allow us to do that. They wouldn't let us do that.

• 55:21David Hoffman?

  No, we would go to zero so fast.

• 55:23Ryan Sean Adams?

  Man, what a story though. That's crazy.

• 55:25David Hoffman?

  David, my favorite, my favorite part about this. So, so since they dropped a lawsuit, like, well, they made, Tozzi made $200,000 and he says, once I have it confirmed. It's officially pulled. I will be refunding everyone who donated. And then Kobe says, use my money, my $100,000 to pay for the gas fees for a lot of people, the individual donators. But then also Kobe follows up and says, keep some for a vacation to Smiley Face.

• 55:51Ryan Sean Adams?

  Ah, that's awesome.

• 55:53David Hoffman?

  Kobe, Kobe, well done.

• 55:54Ryan Sean Adams?

  Hey, look, look, both of these lessons, right? It's like the last lesson is like not take, don't shake shortcuts. This lesson is don't take shortcuts. Also, I love this, this concept of we can also police ourselves at the social layer too. We need to do much more of that in crypto and call these things out. So, good job. A tozy YouTuber. Man, I am so not connected with crypto YouTube though. This just shows me that I'm just living in a different world. David, what do we got coming up next?

• 56:21David Hoffman?

  Oh my God, so much. Okay, merge updates. We got some merge updates for y'all, of course. Uniswap is getting a brain. Cue that part of the Wizard of Oz where the scarecrow says, if I only had a brain. There's a meme on that later. Between Nike and Adidas made $200 million in total NFT revenue. But one of them made a lot more than the other. So we'll get into which one may, which one won the NFT game in 2021. All of that and more, right after we talk to some of these fantastic sponsors that make this show possible. Arbitrum is an Ethereum layer two scaling solution that is going to completely change how we use DeFi and NFTs. Some of the coolest new NFT collections have chosen Arbitrum as their home while DeFi protocols continue to see increased liquidity and usage.

• 57:04David Hoffman?

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• 57:47David Hoffman?

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• 58:28David Hoffman?

  And yes, there's also going to be a token, so give them a follow on Twitter too, @ZKSync.

• 58:34Ryan Sean Adams?

  Alright guys, we are back. Another merge update. This is a date. Now it's an official date, not just a tweet on Twitter, it's a tweet from Tim Bako, Ethereum Foundation. So, Tim Bako says, "Ethereum's transition to proof-of-stake is happening. Client releases are out, upgrade your, update your node." That's a thing you have to do if you're running a node, by the way. First part of the merge, Bellatrix happens on September 6th, and then the full transition ETA, September 15th. Not even a date range, not even the 15th to 16th, September 15th. Mark your calendar, David, is that the official date? September 15th?

• 59:09David Hoffman?

  That is, well, no, because it's still, it's still an official TTD number, Total Terminal Difficulty. So there is no official date, that TTD number can hop around, but it's an official TTD number, which says the same thing. There's no, there's no new TTD number. The only thing that's new this week is that we have new client software that instantiates that TTD number into the clients. And so as soon as you update your clients, that TTD number goes into your client, and then it's hands-off from there, that the Bellatrix activates, and then later is the merge. The current estimated merge time, right now, is 6:20 AM Eastern Time, Thursday, September 15th. This number's been hopping around. It used to be like 8 AM, then it hopped around to like 4 AM, and now it's, now it's at 6:20 AM.

• 59:52David Hoffman?

  But it's looking like Thursday, early morning, Eastern Time. Pacific, specific people, and also Eastern people, you're probably going to be in bed, but this number will continue to hop around, but, you know, zeroing in on Thursday morning, September 15th.

• 1:00:06Ryan Sean Adams?

  This link in the show notes is a script that actually calculates it based on the current hash rate, so you can always get the update on that, even though you know Bankless is going to update you on a weekly basis.

• 1:00:16David Hoffman?

  Yeah.

• 1:00:16Ryan Sean Adams?

  As far as everything that happens. Until it actually happens, because as Dune Analytics says, "The merge is coming. Here are the top dashboards to follow the action." Anything here we should pick out? I guess maybe a link for people and a resource for people if they want to follow the merge. There are a ton of dashboards from Dune Analytics where they can see the intricate details of all of the numbers that make up the merge. So, anything here to point out, David?

• 1:00:39David Hoffman?

  Yeah, all six of these dashboards are fantastic. It's just a nice little command station to seeing the merge. I don't really have any one in particular that's favorite, but just as a resource, these are available to you.

• 1:00:49Ryan Sean Adams?

  You know, the bigger question, I think, is there was this rag of a publication, you know, a terrible newsletter.

• 1:00:56David Hoffman?

  Terrible, terrible newsletter.

• 1:00:58Ryan Sean Adams?

  That published an article that said...

• 1:00:59David Hoffman?

  Why would you ever publish this title of a...

• 1:01:02Ryan Sean Adams?

  Is the merge overhyped?

• 1:01:03David Hoffman?

  Who published this?

• 1:01:05Ryan Sean Adams?

  Do you believe it?

• 1:01:07David Hoffman?

  Who published this?

• 1:01:08Ryan Sean Adams?

  For people who are not seeing on YouTube. This is Bankless, okay? This is a Bankless article. We had our friend Jordy Alexander. Do you remember Jordy Alexander? So, he came at a time when everyone was just so frothy bullish about Terra Luna, and he took the bare case of Luna.

• 1:01:26David Hoffman?

  The very difficult, at the time, difficult position to take. The bare case for Terra Luna at its peak.

• 1:01:31Ryan Sean Adams?

  When was this? April? Did we do this March? April? Something like this? Like about a month before the Terra collapsed, essentially? And Jordy took the position that, like, "I know everyone's bullish on this thing, but there are a few tail risk events you really should look at, and I think they're fairly high probability. A month later, it's completely beat up." And by the way, a whole bunch, most people, a lot of people, coming out of that debate thought Jordy lost the debate.

• 1:01:56David Hoffman?

  Yes.

• 1:01:57Ryan Sean Adams?

  They were more compelled by the vote.

• 1:01:58David Hoffman?

  Yeah, Jose, the other guy, just absolutely swept the floor with him. But then if you go back to the YouTube comments, they're all like, "Oh." Like now...

• 1:02:06Ryan Sean Adams?

  Oh, really?

• 1:02:06David Hoffman?

  Yeah.

• 1:02:07Ryan Sean Adams?

  People refresh their comments?

• 1:02:08David Hoffman?

  If you see the chart of viewers on that video, you know, it's the normal curve, and then Terra collapses, and it gets another huge bump, because people went back and watched it.

• 1:02:19Ryan Sean Adams?

  Guys.

• 1:02:19David Hoffman?

  And so, like, the four-month-old YouTube comments are like, "Jordy got railed by Jose." And then the three-month-old YouTube comments are like, "Oh, Jordy was right. Oh, Jordy got it right."

• 1:02:30Ryan Sean Adams?

  Wow, Jordy was right. But here's his case. We asked Jordy to write an ETH bear article for us, ETH merge bear article, because David and I couldn't break ourselves to write that.

• 1:02:39David Hoffman?

  Couldn't.

• 1:02:40Ryan Sean Adams?

  All right, because we don't actually believe it. But fantastic article. And I think like anytime we have a thesis on something or bullish on something, we'd love to get kind of the the counter to that, or the the steel man case for why not. And I think Jordy puts in a fantastic steel man case. So a few things. By the way, this is full of fantastic memes throughout the article. But let me try to summarize some of his high level takes and get your reaction to this, David, as an ETH bull, right? So one thing he says is that, yeah, there's these three dragons to the triple halving, to the ETH merge bullishness. One is reduced issuance. He says, yep, I understand that. That's pretty bullish. I get it. The second is EIP 1559

• 1:03:20Ryan Sean Adams?

  burn, and the third is locked staked ETH. Okay, so he's good with the reduced issuance. But he says, burn has been down pretty bad. Okay, like, look at burn over time. So it's because block space is in much lower demand than it was during DeFi summer and then later NFT, like the whole NFT boom. And then if you look at like this past summer, David, we're not even deflationary.

• 1:03:44David Hoffman?

  No, we're not deflationary.

• 1:03:46Ryan Sean Adams?

  And so what's what's with your ultrasound money, merge money, if it's not even deflationary? That's what Jordy's saying. And there's not an indication, he says, that a positive catalyst ahead that will actually bring this block space demand back. Maybe it goes to alternative layer ones. Maybe it goes to layer twos that don't consume as much block space revenue. So there's that. And then he also chips into the ETH staking rate. And he says it's actually a lot lower than a lot of people are saying. So he calculates the ETH staking rate at steady state in like 2023 to be closer to like 1 to 2%.

• 1:04:23Ryan Sean Adams?

  Yield. So you stake your ETH.

• 1:04:25David Hoffman?

  In real terms, in real terms is what he's saying.

• 1:04:27Ryan Sean Adams?

  In real terms, yes. You stake your ETH and maybe you're getting like 3% or 4%, but then you have to subtract the issuance of ETH, which is maybe 1.5%. So you're left with like 1% to 2%

• 1:04:41David Hoffman?

  Right.

• 1:04:41Ryan Sean Adams?

  real yield. And he's like, no one's going to be super excited about that. And he's calculating this based on a whole bunch of more people will stake, right? And so the yield goes down. And so maybe you'll get like 20 to 30 million ETH staked in the network. And I can't remember what it is right now, David, but it's like 15 million ETH. I can't even remember. I shouldn't even say that, but it's a lot less now. And so these are some of his bare thesis cases for why the word merge won't really matter. What was your take when you read the high level of this article?

• 1:05:12David Hoffman?

  My high level article was that Jordi is making an argument against an outdated bull case, like outdated stats. And so he's taking like May 2021 or November 2021 gas price, gas markets. And he's making his argument that it's not bullish against that. And I mean, we have since then, like

• 1:05:34Ryan Sean Adams?

  Look at this.

• 1:05:36David Hoffman?

  Jesus. Sorry, the podcast listeners who don't see this, I'm not going to explain this one. And so he's making like, yes, there was previously more bullish parts of the Ethereum economy. Gas prices used to be a lot higher, therefore the Ethereum burn used to be a lot more. And it's no longer the case. And I mean, since then, we've adjusted the numbers, the yield numbers. Like if we had May 2021 gas prices, like we were looking at like a 15% yield on staking Ether. And like, we used to say that on the weekly roll up because that used to be the data, but that is no longer the data. And now we've adjusted down to where it is now at like 5.2% without MEV and maybe perhaps maybe 6% plus with MEV. But Jordi is taking a frame, a slice of data that was in the bull market.

• 1:06:21David Hoffman?

  And now, but also, and so that's the gas market thing. Now, I will say that the ETH supply reduction is, was always going to be more significant than the Ether burn. Simply just like, when you compare those things, there's less Ether burn, uh, less Ether issued.

• 1:06:36Ryan Sean Adams?

  That's the main thing bulls are bullish on.

• 1:06:38David Hoffman?

  Yes, it's the supply reduction, right. And so even at these, like, even if you take the bearish, most bearish gas fees, which is at like 7% or 8%, that goes from 0.43% Ether issuance down to 0.2%. So the burn just lowers it by a measly 0.2%. But it's cutting the issuance down by 50% because it already is so low. And so like, that's still, the bull case is still strong. And if you go and compare it to Bitcoin issuance at like 1.5%, or Solana issuance and Avalanche issuance at like 6% and 7%, like, it's still fundamentally bullish. It's just not ultra uber mega bullish that would have been if we had merged during like DeFi summer, for example. So that's, that's a gas market thing.

• 1:07:21Ryan Sean Adams?

  Did you see this argument too? It's like, you know, one side, staked ETH will be locked off the market. Yeah, you're super happy about this. But then you realize the unlock will hang over us for over a year. So this is because everyone is essentially depositing if they're staking and it's, it's one way, but then there will be this big unlocking event, maybe a year from now, and all of that, you know, 15, 20, 30 million worth of ETH is suddenly unlocked. And his argument is the market's going to price that in ahead of time too. And that makes the, the case less bullish and maybe bearish.

• 1:07:54David Hoffman?

  Sure, the market will price it in, but we need to make sure, like, are all the unlockers going to be sellers? Cause I don't think necessarily so. Like typically, we use this word unlock or like invest, like investing unlocks for like angel investors or seed investors that got in at valuations 1/10th or 1/100th. And so of the supply of the asset, so like, of course they're going to sell. It doesn't matter what price it's at, they're going to sell because they're up so much. That's not the case with Ether. Like the average Ether deposit price, I think is like 700 or $800. So like the average person is up a 2X. And so like, yeah, maybe, uh, obviously some people have. Had their stuff like illiquid for so long that they're gonna sell. But I don't really think it's gonna turn this into the systemic sell event.

• 1:08:39David Hoffman?

  When the APYs go up too, by the way, up from 4% up to like 5, 6, maybe 7% if MBV is really strong. I don't really think they're like, we use this term unlocked to be like, oh, investors unlocks are totally gonna dump. That's not true with Ether stakers. Ether stakers are fundamentally bullish. That's the whole point of proof of stake is that you reward Ether holders who want to be long-term holders. And so the people that stake their Ether back when Ether price was like $300 to $700. They're the people who are like, yeah, I'm fine with having my Ether be illiquid for two years, three years, an unknown amount of time. They're fundamentally the most bullish Ether owners there are because they take the illiquidity of it and they don't care about that.

• 1:09:20David Hoffman?

  So they're not likely to be sellers. So I don't really think it's fair to say that like all of these, finally we get this big unlocking and everyone runs for the exit so they can dump their tokens. I don't see that happening.

• 1:09:30Ryan Sean Adams?

  Well, anyway, I think we could have an entire episode on this.

• 1:09:33David Hoffman?

  Oh wait, no, I'm not done. We got one more point. We got one more point.

• 1:09:34Ryan Sean Adams?

  You're not done?

• 1:09:36David Hoffman?

  And so his last, his last argument is that the yields go down to a super low amount. Can you go to that part in the, in the articles that like, the, if we, if we have something like 30,000 Ether staked and Ryan, Ryan, I pulled this up. Right now there's 14,000 Ether staked. If we get something like 30,000 Ether staked, the issuance of Ethereum goes up because as more people stake, the more Ether is issued to reward those people, the yield, the per validator yield goes down, but total Ether issuance goes up. And so that's his argument that like, well, we have increasing actual Ether inflation and decreasing yields for stakers. And so the yields are actually going to be way lower than people expect.

• 1:10:14David Hoffman?

  But he's missing the part that the way to get to like 30,000 plus Ether staked is 16,000 million Ether comes off the market and begins staking.

• 1:10:25Ryan Sean Adams?

  Wait, 16, 16 million?

• 1:10:27David Hoffman?

  16 million Ether comes off the market and begins staking. And so he skipped over the bullish part of that, which is that a bunch of Ether gets locked up. So you can't forget that bull side. And that is my complete rebuttal of the bear case for the merge.

• 1:10:41Ryan Sean Adams?

  It's not complete. Come on. You know, it sounded like David wants to get on a podcast with Jordy and really hash this out and have a debate. But I also remember what happened to the last guy who did that. So maybe we'll keep this in the article form.

• 1:10:51David Hoffman?

  Brian, the last guy was defending Terra and I'm defending Ethereum.

• 1:10:56Ryan Sean Adams?

  I do think if there's demand in Bankless Nation, if you guys are excited about this, let us know. Maybe we'll have Hal Press, plus David, plus Jordy, plus another bear debate on this. Maybe we'll get Checkmate in this scene or something. Anyway, a lot of discussion about this, and I think it's really fun to look at both sides of the argument. David, let's get to this. Uniswap has a brain. That's what you've been saying in the tease to this. What do you mean by this? How is Uniswap getting a brain?

• 1:11:23David Hoffman?

  Uniswap Uni Governance voted overwhelmingly at 86,000,000 to 770, so I call it 99.9% yes, to create the Uniswap Foundation. We've talked about this, the precursors for this. There was a governance proposal, and then also a sentiment check, but now a formal vote, token snapshot vote, has gone through overwhelmingly in support of creating the Uniswap Foundation. So what does this mean? What are the details of this? The blog post says, "There is work to do to help Uniswap reach its full potential. The governance process has too much friction, the ecosystem is too difficult to navigate, and the UGP Uniswap governance process in its current form is not able to fund the most ambitious and impactful projects. We want to change that. Today, we are excited to propose the

• 1:12:07David Hoffman?

  creation of the Uniswap Foundation, which has the submission to support the decentralized growth and sustainability of the Uniswap protocol and its supporting ecosystem and community. Today, we are thrilled to propose the creation of the Uniswap Foundation." And then some details. Scope, team, budget, and governance participation. Scope, the UF, the first foundation of a major protocol to go through the community governance process, will support the protocol's decentralized growth, reinvigorate governance, and serve as a protocol advocate. The team behind this is going to be Devon Walsh, who will serve as Executive Director, and Ken Eng, who will serve as Head of Operations. They also have a team of 12 behind them. They've got some budget requests as well. $14 million of operating budget to cover a team for three years, and $60 million expanded Uniswap

• 1:12:49David Hoffman?

  Grants Program budget to cover three-plus years. So they are requesting a total of $74 million from the Uniswap DAO, which will be broken up into two disbursements, a first disbursement of $28 million. And lastly, governance participation, also requesting $2.5 million uni to participate in governance. Primarily through delegation through usage of a new smart contract primitive called the franchiser. And this uni will be revocable by the DAO at any time and cannot be used for any purposes outside of governance. And so Uniswap, get in the foundation. Nice.

• 1:13:20Ryan Sean Adams?

  Okay, so one question I have on that, David, is the $74 million that's going to fund the Uniswap Foundation. Where's that coming from? I would imagine it's got to be like uni token sales at some level from the DAO, maybe.

• 1:13:35David Hoffman?

  Yeah, if not already, then future sales. I don't know. I don't know.

• 1:13:40Ryan Sean Adams?

  That's one interesting thing to check into, but like, am I also understanding that, so we have, we have three pieces here. We have the protocol, right? Uniswap itself, which is not a legal entity or anything else. It's smart contract code. And then we have Uniswap Labs, which is the thing Hayden and team are doing that is venture backed, that is continuing to buy companies and create tools for the Uniswap ecosystem. And then now we also have this Uniswap Foundation and their job will be to kind of steward the protocol itself a bit more. And I guess grow it. Is that, is that the model here?

• 1:14:15David Hoffman?

  Yeah, that's exactly right. And I've looked into the governance proposal. It's all coming out of the uni token. Yes. So this is all funded by the uni token.

• 1:14:23Ryan Sean Adams?

  So this will create some sell pressure, I think, in uni in the short run. Now they're doing this in chunks, like first distribution of 20 million and then kind of the remaining. But also you could say bullish on Uniswap getting a brain.

• 1:14:37David Hoffman?

  Yes, that's the bullish. Yeah. Don't, who cares about $20 million of sell pressure? That's a blip. Uni token is actually pretty liquid. The point is, is that Uniswap can be just more organized. If you listen to our podcast episode with Hazu, these DAOs need direction and centralization. Centralization is not a bad word and the foundation can do this. In addition to the two, to Ken, Eng and Devin Walsh, we also have some advisors. Jesse Walden from Variant, Julia Rosenberg from Orca Protocol, Alexis Gaubah, Gaubah from Open, and Hart Lambert from Uma. And then they also have already talked about some proposals that they're trying to get done, which is. Building Uniswap in the Cairo language for Starknet and other things that like I think

• 1:15:22David Hoffman?

  the Uniswap without a brain just might not have been able to get done. So I think that is the reason why we should be bullish here is that, you know, execution, execution matters.

• 1:15:30Ryan Sean Adams?

  And if you're curious to why it doesn't have a brain, why Uniswap Labs is not necessarily that full brain, I think the Haasu podcast is the answer to your question. But here's a nice meme, the scarecrow.

• 1:15:41David Hoffman?

  Yeah, scarecrow from Wizard of the Oz. There's that one song where the scarecrow's got, if I only had a brain, but this one's if I only had a foundation.

• 1:15:49Ryan Sean Adams?

  This is every Dow, by the way, dancing around like a scarecrow. Uh, Block, okay, this is cool. This is a tweet from Blockworks, but did you know, David, this is another chart from Dune Analytics, Nike and Adidas had NFTs last year. Nike revenue was $185 million.

• 1:16:09David Hoffman?

  Damn.

• 1:16:10Ryan Sean Adams?

  Adidas was 11 million, but in total, like, so Nike absolutely swamped the floor with Adidas. But think about how much money that is for Nike NFTs. What do you think the costs of these NFTs were?

• 1:16:21David Hoffman?

  Very little.

• 1:16:22Ryan Sean Adams?

  3 million?

• 1:16:23David Hoffman?

  And Ryan, I bet you the biggest cost was legal.

• 1:16:25Ryan Sean Adams?

  10 million? Yeah. Like, but think about these profit margins. So if you think that large corporations are just going to pass this by, pass up this kind of opportunity, you don't understand.

• 1:16:39David Hoffman?

  Look at that secondary trading volume of Nike NFTs, $1.3 billion of secondary trading volume.

• 1:16:46Ryan Sean Adams?

  Crazy.

• 1:16:47David Hoffman?

  You know they have royalties on that.

• 1:16:48Ryan Sean Adams?

  Look at these other, look at these other brands too. Dolce and Gabbana here, Tiffany's here, Gucci here, Adidas here, Budweiser here, Time Magazine here, NFTs.

• 1:16:55David Hoffman?

  Nice.

• 1:16:56Ryan Sean Adams?

  NFTs are just a fad, never coming back, obviously.

• 1:16:59David Hoffman?

  Okay, so look at that data. There's two columns. There are primary, primary sales revenue, $93 million for Nike, $92 million in royalties off of that secondary volume. Crazy, crazy.

• 1:17:11Ryan Sean Adams?

  That's crazy. Yeah, more companies are going to join this and NFT market will be back, I'm sure. But. In the short run, we are seeing some resurgence in some other classic non-corporate NFTs. Pudgy Penguins, David?

• 1:17:24David Hoffman?

  Pudgy Penguins, pump 83% as Meta and Nansen executives join advisory board. Ryan?

• 1:17:31Ryan Sean Adams?

  Meta, Facebook, huh?

• 1:17:33David Hoffman?

  Yeah, right. You want to hear a funny story, Ryan?

• 1:17:35Ryan Sean Adams?

  Yes.

• 1:17:36David Hoffman?

  You know when we were talking about how I was moving wallets a while ago?

• 1:17:40Ryan Sean Adams?

  Yes.

• 1:17:41David Hoffman?

  Well, I'm also slowly doing that for my NFT wallet and just like getting rid of all these like NFTs that I thought were dead. And so I sold my pudgies literally two days.

• 1:17:50Ryan Sean Adams?

  No, you didn't, David.

• 1:17:51David Hoffman?

  Before this happened.

• 1:17:51Ryan Sean Adams?

  David!

• 1:17:54Ryan Sean Adams?

  Oh.

• 1:17:55David Hoffman?

  It was like perfectly ironic. It's like I sell these things just because like I don't really know what's happening with these things. These are just some JPEGs.

• 1:18:02Ryan Sean Adams?

  I would have assumed they're dead too.

• 1:18:03David Hoffman?

  Yeah. And then like literally like out of nowhere, like that has the biggest resurgence of all time. It was like literally the Pico bottom. It was fantastic. It was great.

• 1:18:12Ryan Sean Adams?

  That's why you listen to Bankless for your NFT alpha every single week because David and I know what we're doing.

• 1:18:17David Hoffman?

  We know, yeah, we know what we're doing with the JPEGs.

• 1:18:20Ryan Sean Adams?

  Do you know, we do know a little bit about DeFi and this is kind of a blend of DeFi plus NFTs. This thing called Ben Dow, which is basically like, I think of it as Maker. It's like collateralized loans backed by NFTs. So, but there was kind of a crisis last week with Ben Dow. What happened?

• 1:18:38David Hoffman?

  Yeah. So Ben Dow NFT liquidity protocol, of course, you can put your NFTs into Ben Dow and borrow ETH against them. Some of the top NFT collections in there, Azukis, Board API Clubs, Clone X, Crypto Punks, Doodles, Mutant Apes and Space Doodles. And the thing is, is that once upon a time, Ben Dow had about 18,000 ETH earlier last weekend and that went down to 15. Not 15,000, 15.

• 1:19:02Ryan Sean Adams?

  Yikes.

• 1:19:02David Hoffman?

  15 ETH. It's currently back up to 4,500 as of a couple of days ago. But basically what happened was that all of the ETH, you lend your ETH to Ben Dow and then you get a yield on that ETH, very strong yield. And then Ben Dow lends out that ETH to people that collateralize their NFTs. You could get an 80% yield on your Ether because they were in such a short supply of Ether because all these NFT collateral. Utilization people were borrowing, were borrowed up all the ETH, they used all the bandwidth. It's like if compound utilization, if you put like, if compound has like $100,000 of USDC in it, and then like, there's $98,000, 98% of that USDC is utilized, they're going to jack up the interest rates to incentivize people to pay back their Ether.

• 1:19:47David Hoffman?

  So what's going on here is they jacked up the interest rates or yields paid to Ether lenders. And they also, what they did in order to fix this, this like credit crunch they had, is that they passed emergency parameters to progressively lower the liquidation threshold from 95% to a new baseline of 70% incoming on September 20th. So it's going to go from where it is now at 95% to where it will be in the future, 75% or 70%. Basically like making liquidations more likely to happen, increasing, it's like increasing the interest rates. The Ben Dow, if it's like a Maker Dow, they're increasing the interest rates and making more strict capital requirements for NFT lenders so that they can pay back their loans and get Ether back into the coffers. I will say, this is not a failure. This is actually quite the opposite.

• 1:20:32David Hoffman?

  I would say this is a big success. It was so successful that they, all the borrowers used up all the Ether and they just had to jack up the interest rates. The first time, the first time Maker Dow had to go through a cycle, DAI was trading below peg and they had to jack up interest rates from like 0.05% to almost 20%.

• 1:20:51Ryan Sean Adams?

  I remember that.

• 1:20:51David Hoffman?

  And I feel like this is, this is the same thing with Ben Dow. It's like, yo, everyone's using the protocol. We ran out of like credit. We need to jack up interest rates so we can like get more money in the system.

• 1:21:00Ryan Sean Adams?

  They almost went insolvent in the process, right? So they bent, they didn't break, but like they almost...

• 1:21:06David Hoffman?

  I wouldn't call it insolvency. They just had more loans outstanding than they can issue. They couldn't issue any more loans.

• 1:21:13David Hoffman?

  They didn't have more, enough money in the, in the system.

• 1:21:15Ryan Sean Adams?

  There is a great explanation, if you want all the details, from William Peaster, who does know a thing or two about NFTs and Metaverse, and you can read through that.

• 1:21:24David Hoffman?

  Ryan was joking earlier, we don't know shit about NFTs.

• 1:21:27Ryan Sean Adams?

  I think one of the things though, David, is that Ben Dow has definitely learned through this episode is that NFTs are not quite as liquid as maybe they thought they were. So it's one thing if you're selling ETH as collateral in a Maker type auction because you have to liquidate. It's another thing when you've got like 50 bored apes and you're trying to find buyers for those things. Of course, that's what makes them non-fungible, lower liquidity profile in them right now. David, Gensler's back. What's he saying now? He wrote a op-ed in the Wall Street Journal. I read part of this. It was also paywalled. Maybe there are a few choice tweets or choice quotes we could take

• 1:22:10Ryan Sean Adams?

  out of it, but basically his take is, "There's no reason to treat the crypto market differently from the rest of the capital markets just because it uses a different technology. The fax machine and the internet are the same thing." That was my paraphrase. That's not his paraphrase, that end part. But like, I feel like that's kind of what he's saying. What are your thoughts on this, David?

• 1:22:31David Hoffman?

  He also made a video on this, and basically he's saying like, "Oh yeah, like crypto markets, traditional equities markets, they're the same thing. Therefore, we should regulate both of them," which is a hot take. But also, just like, you're having, you're trying to like have your cake and eat it too. It's like, you're saying you want to regulate the crypto markets, and therefore we should treat crypto markets like the traditional equities markets. But then you're also not treating us fairly. And this is what Kobe said when he followed up and says, "Sounds good. Spot ETF then?" Because if Kobe said, or if Gensler says, "Okay, we're going to treat the crypto markets like we treat the traditional equities markets, that means we get spot ETFs. That's what that means." And so he says, like, "The SEC,

• 1:23:13David Hoffman?

  according to Gary Gensler, should regulate the crypto markets, just like they regulate the traditional equities markets." And if they, but then he also doesn't want to treat us like normally.

• 1:23:22Ryan Sean Adams?

  So there's a double standard at play.

• 1:23:24David Hoffman?

  Yeah. Huge double standard.

• 1:23:25Ryan Sean Adams?

  There's a double standard. But he also doesn't understand that this is a much different technology.

• 1:23:29David Hoffman?

  It's literally not like that.

• 1:23:30Ryan Sean Adams?

  It's kind of like covering your eyes and plugging your ears and just kind of ignoring the differences between crypto and the traditional equities markets, of which the differences are also vast. These are two different technologies. It's fax machine versus internet.

• 1:23:44David Hoffman?

  And I would definitely say that Gary Gensler is playing this narrative game. He knows they're not the same.

• 1:23:49Ryan Sean Adams?

  He used to teach classes at MIT about blockchain.

• 1:23:52David Hoffman?

  And so he's trying, he's doing a PR stunt, saying, "Hey, the SEC is going to regulate the crypto markets because they're the same as equities markets. There's no new magic here. The SEC is going to regulate these things."

• 1:24:03Ryan Sean Adams?

  It's just not hard. We can have a nuanced conversation about what pieces are the same, because there are parts that are the same as the equities markets, and what parts are different. Let's have a nuanced conversation about that and let's get some clarity. Mark Cuban had a tweet, uh, take too. He says, uh, to Gary Gonsler, who says, there's no reason to treat the crypto market differently. Uh, just come in and talk to me. Mark Cuban says, come in and talk to who? Set up an appointment, how? You using Calendly these days? Since you understand crypto lending and finances, why don't you just publish bright line guidelines? You would like to see and open it up for comments. We don't want regulation, legislation by Wall Street Journal op ed.

• 1:24:45Ryan Sean Adams?

  All we're asking for at some like just some clear expectations.

• 1:24:49David Hoffman?

  Treat it the same.

• 1:24:49Ryan Sean Adams?

  Like you said. Guidelines or even treat us the same and don't have a double standard. Uh, very confusing here, but seriously, Gary, come on the podcast. I think the best way of clearing all this up is to engage with the crypto community. It's what you should be doing. We'd love to have you on bankless sincerely. We've had Hester Purse on, we've had other CFTC regulators on. We would love to have Gary Gensler on. Pretty friendly. We could talk about this. Uh, give us your perspective. David, you have a take here.

• 1:25:15David Hoffman?

  The, the thing is people outside of the crypto industry have noticed Gary's lack of popularity. And so this are also an article that came out in, in Forbes, I believe. Yeah, Forbes, uh, was titled Gary Gensler colon resign, uh, from a writer called, uh, Roslyn Layton from the International Tech Policy, not a crypto person, but like Gary Gensler is like losing the public support like left and right. Uh, and so Gary Gensler, like gotta win hearts and minds and you can do that by coming on bankless.

• 1:25:42Ryan Sean Adams?

  Yeah. We don't want you to resign until you tell us what you really think about crypto and we can have a good conversation. First come on bankless. Uh, all right, David, do you know Coinbase's ENS integration is finally out in the wild? What does this mean?

• 1:25:57David Hoffman?

  Yeah, so this is in the Coinbase wallet. I'm pretty sure not the coin, normal Coinbase consumer app. But, uh, if you are a Coinbase wallet user, you get an ENS name built into that wallet. So this is a user who's got debanked dot CB dot ID. Interestingly, Ryan, not dot ETH. Did that catch your attention? There's no dot ETH name, but it is actually an ENS integration. And so from, from the article, it says on a technical level, both CB dot ID and. can be used on multiple networks. We determined that most users associate dot ETH IDs slowly solely with Ethereum. And so Coinbase chose CB.id because they want to make it easier for people to understand that a username is not tied to Ethereum and can be used on multiple networks.

• 1:26:40David Hoffman?

  However, did you know, Ryan, that your dot ETH name can work in Bitcoin wallets and Litecoin wallets and Dogecoin wallets that by run by the the ENS standard?

• 1:26:50Ryan Sean Adams?

  Yeah.

• 1:26:50David Hoffman?

  And so Coinbase wallet is just like kind of making that a little bit more formal. CB.id saying, hey, this can work for your Ethereum address, but it can also work for your Bitcoin address. It can also work for your Dogecoin address.

• 1:27:00Ryan Sean Adams?

  What's happening here? Coinbase is just giving these to all of its users?

• 1:27:03David Hoffman?

  Yeah.

• 1:27:04Ryan Sean Adams?

  Basically.

• 1:27:04David Hoffman?

  Yeah, and all of its users who are using the Coinbase wallet.

• 1:27:07Ryan Sean Adams?

  Users are becoming decentralized. Either claim your current username or decline and get a random 20 character username. So you get your own ENS name.

• 1:27:15David Hoffman?

  You get one by default. Yeah.

• 1:27:16Ryan Sean Adams?

  That's cool. What is this extension, though? CB.id, what is this?

• 1:27:21David Hoffman?

  I think it just means identification identifier.

• 1:27:23Ryan Sean Adams?

  Yeah, but I know, but like what? How do, how are they getting a dot ID? Is this like, I guess I just.

• 1:27:29David Hoffman?

  This has something to do with DNS.

• 1:27:31Ryan Sean Adams?

  And this, this part. So there's a dns.id, like a dot com, like a dot org.

• 1:27:35David Hoffman?

  So another fun fact of ENS is that it's actually DNS compliant. It also operates with the traditional DNS system. And I think, I don't know the details beyond this, but like the dot ID is a DNS thing. So you could, oh, actually, Ryan, go and type in, type in this into into your URL. Ta-da, it worked.

• 1:27:58David Hoffman?

  It took you back here. You already had the webpage pulled up.

• 1:28:00Ryan Sean Adams?

  Ah, okay. I was like, I was like, you just sent me back to the same site.

• 1:28:03David Hoffman?

  Yeah, but, but it worked.

• 1:28:04Ryan Sean Adams?

  Yes, it worked.

• 1:28:05David Hoffman?

  So like, if you have like, this, this also works. Does, I think this also works. No, this doesn't work with David Hoffmann dot ETH, does it?

• 1:28:13Ryan Sean Adams?

  De-banked.

• 1:28:14David Hoffman?

  Let me find out.

• 1:28:18David Hoffman?

  No, it doesn't work with David Hoffmann dot E. But that, and that's why, and so the dot ID name is a DNS name. And so

• 1:28:23Ryan Sean Adams?

  That's why it works in every browser.

• 1:28:25David Hoffman?

  Exactly. It works in it. It works in your browser. Yeah.

• 1:28:28Ryan Sean Adams?

  But that's not completely decentralized because there's still some DNS linkage there, I suppose.

• 1:28:34David Hoffman?

  Whatever.

• 1:28:34Ryan Sean Adams?

  Okay. Cool. That's cool.

• 1:28:36David Hoffman?

  Getting better.

• 1:28:37Ryan Sean Adams?

  Swell. What is Swell? Are they another staking provider?

• 1:28:41David Hoffman?

  Yeah, staking as a service provider. Basically, Swell is a hybrid between Rocketpool and Lido. So they have a permission validator set, which allows for capital efficiency, but they also have a permissionless validator set, which allows for permissionlessness. And so they, they had a testnet launch not too long ago. Now they have a guarded launch coming soon. And so Swell Network is coming out, new staking as a service protocol. We gotta love that competition.

• 1:29:05Ryan Sean Adams?

  That's awesome. Also more competition, of course, in Layer 2 world. So just a reminder, now I think there are five days? Is it five or four days?

• 1:29:13David Hoffman?

  Five, five days.

• 1:29:14Ryan Sean Adams?

  Okay, five days till Arbitrum releases Nitro, which is the next release of Arbitrum. And of course, the TLDR is this is faster, cheaper transactions for you, if you are an Arbitrum user. Awesome to see Layer 2's upgrading as well. David, speaking of upgrades, you have an opportunity to upgrade your job right now.

• 1:29:32David Hoffman?

  Upgrade your job.

• 1:29:32Ryan Sean Adams?

  Okay. This is our reminder to you. To what, David?

• 1:29:37David Hoffman?

  Get a job in crypto because it's the most fun place to have a job.

• 1:29:40Ryan Sean Adams?

  Absolutely.

• 1:29:41David Hoffman?

  That's, that's the rule.

• 1:29:42Ryan Sean Adams?

  What could be more fun? Number one job. I'm gonna read some out for you. Misari is looking for a software engineer. Two software engineers, one for media, one for market data. DYDX, backend software engineer, Stakefish, a business partner, HR business partner. Stakefish, a backend, full stack software engineer. Stakefish, frontend software engineer. Stakefish, DevOps engineer. Bankless, we need somebody to run our podcast, edit them, media operations. Boardroom Labs, software engineer, DAO governance, Manticore Labs, manager of crypto marketing. Bankless needs a thread or and a senior newsletter editor and marketing coordinator at Vertex Protocol. Lots more. Bankless Academy needs a product manager. You can find out more, of course. Look at all these. I'm scrolling through them.

• 1:30:23David Hoffman?

  For all the people that For all the people that watch the YouTube, I'm aware of my dancing. It's extremely cringe.

• 1:30:28Ryan Sean Adams?

  No one's ever seen anything that I've seen, David. Must be great.

• 1:30:31David Hoffman?

  I can, I can feel it.

• 1:30:33Ryan Sean Adams?

  All right, what's going on next?

• 1:30:35David Hoffman?

  Coming up next, we got questions from the nation. Which Layer 2 are you most bullish on and why? And also, how can you explain the merge to normies? And also, of course, some hot takes from crypto Twitter, the meme of the week, and also a fantastic moment of zen coming out from Gabriel Haynes. It's about BitBoy Ryan. So all that coming up and more, right after we talk to some of these fantastic sponsors that make this show possible. Juno is bringing crypto-friendly banking straight into your checking account. With Juno, you can send money from your Juno checking account straight onto a Layer 2, like Polygon, Optimism, Arbitrum, and they have ZK Sync and Starknet support on their way. You can skip the ACH wait times, you can skip all the gas fees, and go straight from your checking account to an Ethereum Layer 2 in seconds.

• 1:31:18David Hoffman?

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• 1:32:03David Hoffman?

  Brave Wallet is your secure passport for the possibilities of Web3 and supports multiple chains, including Ethereum and Solana. You can even buy crypto directly inside the wallet with Ramp. And of course, you can store, send, and swap your crypto assets, manage your NFTs, and connect to other wallets and DeFi apps. So whether you're new to crypto or you're a seasoned pro, it's time to ditch those risky extensions and it's time to switch to the Brave Wallet. Download Brave at brave.com/bankless and click the wallet icon to get started. All right, guys, we are back, starting with the questions for the nation. Of course, a reminder, if you have a question for David and myself...

• 1:32:34Ryan Sean Adams?

  Follow Bankless on Twitter. That's Bankless HQ on Twitter. We tweet it out. You can reply to the thread. Get your question answered. The first one is from 2, eth. How do I summarize and explain the importance of the merge and its implications to my normie friends who ask me about it? Good question from 2, eth. Explain it like I'm five, David. How do you explain the merge to someone who doesn't know anything about crypto, doesn't really care about crypto?

• 1:33:01David Hoffman?

  God, these are all going to be so hard. All right, I'm going to go for it. Okay, Ethereum, it's the number two blockchain behind Bitcoin. It's the thing that created DeFi and like smart contracts and allows us to do things like decentralized finance stuff, borrowing and lending, trading, et cetera. So that's a big blockchain. It's got the majority of all economic activity inside of crypto, created NFTs. It's that blockchain. It's the big blockchain. It's proof of work, which is that thing that consumes a lot of electricity, which a lot of people in the outside world don't like. And it's always been proof of work, but it's always wanted to go to this thing called proof of stake. Proof of work works by if you lie to the blockchain, you basically burn electricity for no reason. And proof of stake works that if you lie to the blockchain, you lose your ether.

• 1:33:46David Hoffman?

  Ether, the native currency of Ethereum. How proof of stake works is that you stake your ether to the promise that you're not going to lie to the blockchain. And if you do lie to the blockchain by trying to add in a false transaction, an invalid transaction, you get your ether slashed. So it's kind of like proof of work in that you just lose money, but you lose money a lot faster and a lot more quickly and a lot more money in proof of stake. So generally, the crypto world is like, this is just a better, more efficient way to secure a blockchain. We don't have to consume electricity. We also don't have to have Bitcoin be sold because of proof of work, because of all this electricity consumption. Because there's no electricity consumption, you don't have to issue as much ether to pay for that electricity consumption. And these stakers don't have to sell their ether. So it makes ether really bullish. End. How was that?

• 1:34:33Ryan Sean Adams?

  Pretty good, pretty good. I think it's, I think it's hard to explain.

• 1:34:38Ryan Sean Adams?

  Do you know, it kind of, what I go back to is just like, buy a hundred dollars on Coinbase worth of ETH, and then ask me questions as you're curious about it. So it's just like, I feel like-

• 1:34:52David Hoffman?

  But what if you're past that point? What if this is the question they're asking you about?

• 1:34:55Ryan Sean Adams?

  Then, then I get them to listen to Bankless and you explain your thing. I think it's like that. It's, sometimes people aren't interested until they have some skin in the game. They actually have finance. I wasn't really interested, as interested in crypto, until I owned some Bitcoin. And then I was like, oh, this is cool. Why are the numbers going up and why are they going down? What does this all mean? That's why I actually advocate, like, don't dump your entire net worth in here, but like, if you want to get into crypto, buy some first.

• 1:35:19David Hoffman?

  Do it.

• 1:35:19Ryan Sean Adams?

  Step one, buy some. Just do it. Not financial advice. All right, that was the first question. Let's get to the second. When the merge occurs, this is from Eddie Coats, "When the merge occurs, what if anything will ETH holders have to do? Will it automatically convert? Or will holders need to sell out of the old and buy into the V2?" Thanks, guys. Bankless Podcast is lit.

• 1:35:41David Hoffman?

  Sick, sick, rock horns. Will you have to do anything as an Ether holder? No.

• 1:35:50Ryan Sean Adams?

  I'm so glad. I'm so glad the answer is no.

• 1:35:52David Hoffman?

  The answer is no. You don't have to do anything. You're gonna have Ether in your wallet, and then you're still gonna have Ether in your wallet. You will actually not notice a thing. The merge is a, kind of like a software update, you know, when you plug your phone in and then it just like updates while you're sleeping. It's gonna be like that. You're not gonna notice it.

• 1:36:07Ryan Sean Adams?

  Not gonna notice. And updates like this have happened many times in Ethereum's history, and you probably haven't noticed if you've been here for one of them. It'll just be like one of those. That's if everything goes well.

• 1:36:18Ryan Sean Adams?

  It should go well, but nothing you should have to do. Last question from satkc.eth. Asked the question, "Which layer-two scaling solution are you most bullish about and why? And he lists a few: Starknet, ZKSync, Polygon, Scroll. Can't help but notice, David, all of these have a similar theme, and they are ZK EVMs. Which layer-two scaling solution are you most bullish about is the question and why?

• 1:36:42David Hoffman?

  I am most bullish on- Yes.

• 1:36:45Ryan Sean Adams?

  Ah, you took mine, come on.

• 1:36:47David Hoffman?

  They're all great. Like, okay, I'll give you different reasons why you should be bullish on every single one. Starknet, apparently, after listening to a podcast, which I'm about to talk in a sec, this Cairo coding language and this overall, the developer support and like building out Cairo and accepting like updates from developers has been great. So the developer user experience for Starknet has been just like really good. Developers love it.

• 1:37:13Ryan Sean Adams?

  For just a long in a lot of ways.

• 1:37:16David Hoffman?

  Yeah, yeah. And like definitely their BD skills are really strong. I think they were the first to market. So like Starknet, like can't not be bullish. ZK Sync, Alex and team have been around Ethereum from the beginning. They're also doing a separate, an EVM compatible strategy with their ZK rollup. They just like exude the values of Ethereum. And like, we've just see adoption of things that like exude the values of Ethereum. Uniswap, I would put in this category. And so like, they just have like fundamental Ethereum alignment at their tailwinds. They've been around for a while. They're like friends with all the other developers in this space. They're just very

• 1:37:57David Hoffman?

  well-connected. And then, okay, let's go to Polygon. Polygon also has their proof of stake chain, which is like not a ZK rollup, but like the most bullish thing possible, I don't know if this is possible, but if it is possible, it's really bullish, is that their current proof of stake chain just rolls into their ZK rollup. If that's possible, really, really cool. Scroll, the most bullish thing about Scroll is that it's got EVM equivalence. They are going for the very hard task of EVM equivalence, which is if you can deploy your thing on the Ethereum Layer 1, you can also deploy your thing onto the Optimism Layer 2 without changing a goddamn thing. And you can also deploy it to Scroll, which is a ZK EVM, without changing a goddamn thing. Also really bullish.

• 1:38:36Ryan Sean Adams?

  Super strong engineering team, though it's a harder problem, right? It's like, all of these have different strengths.

• 1:38:42David Hoffman?

  They all have, they're all different flavors. So like, I like, I like many different flavors. And they're all, they're all bullish. They're all bullish.

• 1:38:48Ryan Sean Adams?

  To me, this question is like asking, you know, which of your kids is your favorite? I can't answer that question. They're all special.

• 1:38:56David Hoffman?

  I feel like you can't answer that question out loud.

• 1:39:00Ryan Sean Adams?

  No, it's true. Okay, I have three kids and I love them all equally. Kids, if you're listening, you guys are fantastic, all of you equally. So are Starknet, ZK Sync, Polygon and Scroll. David, takes of the week. Let's get into them. First take here from you.

• 1:39:16David Hoffman?

  Yeah, you want to read it?

• 1:39:17Ryan Sean Adams?

  Read your own tweet. No, I'll read your tweet. Okay, it's better that way. From David Hoppin, "My favorite version of the future is the one where global Forex markets are traded on a unicorn-themed venue." This is Uniswap, I imagine. You think that's real?

• 1:39:30David Hoffman?

  I mean, I feel like that is actually the most likely version of the future, is when like global Forex markets are held on Uniswap. And just like Hayden and like his friend Carl and Vitalik, they just like unicorns and so they made it a unicorn theme. And then like, you know, butterfly flaps its wings and all of a sudden global Forex markets are like on this unicorn-themed venue.

• 1:39:50Ryan Sean Adams?

  I still contend that Uniswap will be the largest exchange in the world. You know, sometime in the next 10 years.

• 1:39:57David Hoffman?

  Yeah, that's right.

• 1:39:58Ryan Sean Adams?

  I think that is undoubtedly true, but we'll see. And that'll be funny when it is. Also, you have a podcast that you want us to tune into.

• 1:40:06David Hoffman?

  Yeah, I don't really know where to fit this into the roll-up, but here's my hot take. This podcast that I listen to is really, really good. This is Into the Bytecode from Sina, great podcast, very technical, but also does a great job of breaking it down for the listener. And so this is Julian from Argent, Argent and Smart Contract Wallet. And they talked about just a number of things like, "Bill, why smart contract wallets need to be the future? Why smart contract wallets and ZK rollups go really well together? Account abstraction and overall the developer experience of Starkware and ZK Sync." And so this is where I got that take that the Starkware team is just doing a great job, just like making their developers feel good. So my hot take is that this was a good podcast and you should listen to it.

• 1:40:46Ryan Sean Adams?

  I've been waiting for Argent to get its legs under itself again, because I feel like we haven't yet seen the promise of smart contract wallets.

• 1:40:54David Hoffman?

  Oh, God, no.

• 1:40:54Ryan Sean Adams?

  And I'm hoping that Layer 2s bring that, but we like, we still haven't seen it yet. And there's just such promise, such potential there. It's a little bit like Layer 2s where there's promise and potential, but we just haven't fully seen it realized. Last take here. This is a poll take, actually. I'm showing the poll results here, but let me give you the A, B and C. This is from Eric Wall. A, option A, "The merge will happen as planned in September." Vote on that if you think it will happen as planned. B, it will happen, but something big will go wrong, like private work miners will refuse to mine the last block, a major client consensus split, something chaotic, that's option B. Or C, it won't happen, it'll get postponed. All right. Before I clicked my answer,

• 1:41:39Ryan Sean Adams?

  which is A, I thought that basically A would be the vast majority. I thought we'd get like 80 or 90%, but it turns out what? What are the results here, David?

• 1:41:50David Hoffman?

  It is A that got the most votes. 52% of respondents said A, it's going to happen as planned in September without any problems. 15% of people said, "Show me the results." So 15% of people are automatically off the table. 15% of people said, "B, it will happen, but something will go wrong." And then 18% of people said, "It's not going to happen, it's going to get postponed." So if you add B and C together, what do you get? You get something like 33%, 34% of people think that it's either going to get postponed or go wrong, and 52% think it's going to happen, fine. And like, okay, so I've accounted for

• 1:42:30David Hoffman?

  a 95% success rate in my head, and this is accounting for something like a 66% success rate. And so that discrepancy, if I'm right, means the merge is not priced in. That's my takeaway.

• 1:42:45Ryan Sean Adams?

  That is an interesting takeaway. It's interesting that 18% think it'll be postponed.

• 1:42:51David Hoffman?

  Bitcoiners do.

• 1:42:52Ryan Sean Adams?

  It's already been like pushed as an update. Like, it's happening. It's going to happen at this point. You don't even really have C as an option. That's just kind of like, I don't know, I guess if the world ends.

• 1:43:05David Hoffman?

  It's a little bit too late for C. We have the client software.

• 1:43:09Ryan Sean Adams?

  And yet we have almost 20% of people, again, in this Twitter poll, but I think it's decently representative of crypto Twitter sentiment, saying that it's not going to happen, it'll get postponed. And it's like, we have a date, and the software's been updated, and we're just waiting for that date to be activated at this point. Anyway, I do think that there's some alpha there for us. David, what are you bullish on this week, man?

• 1:43:28David Hoffman?

  I am bullish on, you know, that high-value production studio that we were talking about?

• 1:43:33Ryan Sean Adams?

  The BitBoy Studio you're creating behind you?

• 1:43:36David Hoffman?

  The BitBoy Studio.

• 1:43:38David Hoffman?

  Well, as BitBoy exits, I hope to enter. And I'm gonna turn into the new BitBoy. Oh, I'm kidding.

• 1:43:47David Hoffman?

  We are thinking about, not totally sure on this, but splitting the Bankless YouTube into Bankless Podcasts, which is our long-form interview formats, weekly rollups, Monday podcasts, live streams, the podcasts that you know and love. But then also, short-form Bankless, 20-minute-long, like, a little bit more, just like newbie-optimized content. Your boys got a teleprompter right behind the screen. I got scripts. And so, we're trying to make, uh, trying to expand Bankless into new audiences, because there's a lot of people out there with that, when they come to YouTube, they go, "Oh, BitBoy, he's got all the best information."

• 1:44:19Ryan Sean Adams?

  We wanna steal the BitBoy audience, David?

• 1:44:21David Hoffman?

  We're trying, we're, well, we're trying to steal the BitBoy audience. And instead of feeding them candy and tokens that go to zero, we feed them, we have junk food, we feed them the veggies.

• 1:44:31Ryan Sean Adams?

  With some junk food. There's just some junk food around here.

• 1:44:34David Hoffman?

  With some merge, with some merge candy, yeah. Not high-fructose corn syrup, but, you know, strawberries and raspberries, still sweet. Organic. Organic junk, yeah, organic junk food. Anyways, that is what I am bullish on, Ryan. There's Bankless Productions, Bankless Studio, something. And that's actually aside from like this Joe Rogan, Lex Friedman-type studio I've got behind me, which, uh, gets finalized and finished tomorrow, uh, and then we're off to the races.

• 1:44:59Ryan Sean Adams?

  All right. Bankless becomes BitBoy. That's gonna be the feedback.

• 1:45:02David Hoffman?

  Bankless becomes BitBoy.

• 1:45:03Ryan Sean Adams?

  The new BitBoy is Bankless. Wow.

• 1:45:06David Hoffman?

  Uh, Ryan, what are you bullish on?

• 1:45:08Ryan Sean Adams?

  David, you were laughing about this before I hit record, but let me tell you why. I'm bullish on the Constitution. That's actually like... Here's specifically why, all right? That doesn't sound like it's overly patriotic, 'cause, you know, I'm reasonably patriotic, but I'm not a super patriotic person. But I'm really into like, social protocols. And the Constitution happens to be a pretty big one, and a pretty important one, and a pretty good one. Particularly this thing called the Bill of Rights. And you know, uh, where I got excited about it was when we were recording with Jake Trivinsky. And basically, the takeaway is, all of the OFAC sanctions, and developer getting arrested, and, uh, like, restrictions on privacy that we're feeling right now, what's super interesting is...

• 1:45:51Ryan Sean Adams?

  250 years ago, the framers of the Constitution and creating the Bill of Rights already thought through these things. Right. Like, we have these protections. It's a solved problem. It's a solved problem, and it's actually enshrined in the protocol that governs our country. It's like, sometimes we get overly afraid of, like, OFAC, for example. It's like, what if we do this thing, and they put me in prison? They're the ones doing the thing that's illegal. They're the ones that are doing the thing that is against the Constitution, that's unlawful. Of course, we have to prove these cases in court over time, but like, talk about the First Amendment in the Bill of Rights, freedom of speech, press, protest. This is code, all right? We've precedent, legal precedent, that code is protected as a First Amendment right, just like speech is.

• 1:46:35Ryan Sean Adams?

  The Fourth Amendment, no unreasonable search and seizure. This is privacy. If you live in America, you have the constitutional right to privacy. Number five, due process. That means the government can't come and seize your property without due process, without a court saying it's okay, without proving that you did something wrong, okay? Digital rights. If property, the government can't come and seize your ETH in the US, that is unconstitutional. All of these things. And I think it's a bit, on the legal front, it's a little bit back to like, getting back to the original protocol of the US, right? This is why, actually, I think that, you know, some people are like, ah, the US is too far gone, it's turned into a surveillance state, all of these things.

• 1:47:18Ryan Sean Adams?

  I think that may be true over the past, like, you know, 40 to 50 years, we've veered into that. But if we can have a generation of people, and a group of people, who take us back to our roots, right? And kind of like, the actual social contract this entire country is founded upon, then we can resurface and find our digital rights once again. Some of it sounds like I'm running for a political platform. I'm really not, but- You kind of are. Crypto is a political movement, isn't it? And I want to make sure that we protect these things. And I am into fighting the fight in the US, because I think this is a decent place to fight the fight for digital freedom and for cryptocurrency, because it's like baked

• 1:48:02Ryan Sean Adams?

  into the social contract, baked into the narrative of the US, so why not do it here? And that's what I intend to do more and more. Of course, it's gonna be the Jake Travinsky's of the world, and the Coin Centers of the world doing it, but like, we're gonna help through our platform and education to continue that fight.

• 1:48:17David Hoffman?

  Ryan is bullish on the Bill of Rights.

• 1:48:21Ryan Sean Adams?

  Yes, I am. Onto lighter matters.

• 1:48:24David Hoffman?

  How do I get exposure to that? We're gonna buy the Bill of Rights.

• 1:48:28Ryan Sean Adams?

  Before the merge.

• 1:48:29David Hoffman?

  We're gonna start.

• 1:48:30Ryan Sean Adams?

  Didn't we try that? Didn't we try to? No, we tried to buy the Constitution. All right, what are we looking at? Meme of the week?

• 1:48:35David Hoffman?

  Meme of the week. We have a guy doing like the prey squat and he's looking at one of those like, what do you call those? The stack of rocks that are all balanced on each other. And we have like Vitalik and inflation and then on top of that is a recession. And on top of that is Putin and a Fed pivot. Bounce on top of that is a stock pump. Bounce on top of that is SBF. Arthur Hayes, Medium post, the ETH Foundation not selling. DJ Spartan bullish tweets, Jump Capital not selling. And then the ETH merge pump. And we are praying that the aligned rocks here allow us to have a bull market.

• 1:49:09Ryan Sean Adams?

  These rocks are built like a Jenga castle, too. It does not look good. A lot of things have to go right in order for the ETH merge pump to happen is what this meme is communicating.

• 1:49:17David Hoffman?

  That's right.

• 1:49:18Ryan Sean Adams?

  There you go. David, what are people in store for? For the moment of Zen if they're watching on YouTube?

• 1:49:23David Hoffman?

  Right, okay, so this is Gabriel Haynes. He's the guy that says like always like rapping and dancing. And there was a rap from Gabriel and a song from his wife. And so that is coming up in this moment of Zen, right after we get through Ryan's classic disclaimer.

• 1:49:36Ryan Sean Adams?

  Of course, guys, crypto is risky. Got to tell you, none of this was financial advice, but we are headed west. This isn't for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.