ROLLUP: $ARB Airdrop | Do Kwon Arrested in Montenegro | Coinbase Wells Notice | SEC Charges Justin Sun$ARB Airdrop | Do Kwon Arrested in Montenegro | Coinbase Wells Notice | SEC Charges Justin Sun

Bankless Weekly Rollup 4th Week of March 2023 ------ 📣 Infura | New SDK for NFT APIs For Devs https://bankless.cc/Infura ------ 🚀 JOIN BANKLESS PREMIUM: https://www.bankless.com/dashboard ------ BANKLESS SPONSOR TOOLS: ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://bankless.cc/kraken 🦄UNISWAP | ON-CHAIN MARKETPLACE https://bankless.cc/uniswap 👻 PHANTOM | FRIENDLY MULTICHAIN WALLET https://bankless.cc/phantom-waitlist 🦊METAMASK LEARN | HELPFUL WEB3 RESOURCE https://bankless.cc/MetaMask 🚁 EARNIFI | CLAIM YOUR UNCLAIMED AIRDROPS https://bankless.cc/earnifi ------ Topics Covered 0:00 Intro 3:08 Markets 6:47 FED hikes https://www.cnbc.com/2023/03/22/fed-rate-hike-decision-march-2023.html 12:30 Volatility https://twitter.com/ColeGotTweets/status/1637645721485598725 13:40 ETHBTC & Wartime https://twitter.com/TrustlessState/status/1638878806105628673 22:50 Crypto VC List https://coinstack.substack.com/p/the-crypto-vc-list-2023 27:48 Do Kwon Arrested https://twitter.com/BanklessHQ/status/1638891838881910785 29:38 Arbitrum Airdrop https://twitter.com/arbitrum/status/1638163831833649152 33:14 Earnifi https://earni.fi/account https://www.coingecko.com/en/coins/arbitrum 37:24 War on Crypto 37:34 SEC Coinbase Wells Notice https://twitter.com/RyanSAdams/status/1638655328257548289 https://twitter.com/brian_armstrong/status/1638654192138199041 https://twitter.com/iampaulgrewal/status/1638660032324829184 https://twitter.com/brianquintenz/status/1638747660080533504 https://twitter.com/jessepollak/status/1638716234027106305 https://twitter.com/RebeccaRettig1/status/1638867335745290240 46:25 Sushi SEC Subpoena https://www.theblock.co/post/221723/sushi-hit-with-sec-subpoena-seeking-3-million-usdt-legal-defense-fund 46:55 SEC Lawsuit Against Justin Sun & Celebrity Promoters https://www.nytimes.com/2023/03/22/technology/justin-sun-sec-crypto.html 47:55 Bank Pressure & Contagion Spreads https://www.cnbc.com/2023/03/20/what-ubs-rescue-of-credit-suisse-cs-means-for-markets-and-banks.html https://www.wsj.com/articles/signature-bank-new-york-community-bancorp-flagstar-bank-crypto-barney-frank-fdic-9b825e2e 56:56 Euler Hack Update https://twitter.com/peckshield/status/1636985705858764800?s=20 https://twitter.com/TrustlessState/status/1637864971290697738 https://twitter.com/chainalysis/status/1636739618249867265? https://twitter.com/proofofjake_/status/1638225829397143555 58:55 IRS Tax Treatment of NFTs https://www.irs.gov/newsroom/irs-issues-guidance-seeks-comments-on-nonfungible-tokens 1:00:15 Magic Eden Bitcoin Ordinals https://cointelegraph.com/news/magic-eden-launches-marketplace-for-bitcoin-ordinals 1:01:29 Avalanche Short Outage https://twitter.com/WuBlockchain/status/1638711219778646016 1:02:40 Florida Gov. US CBDC Ban https://www.flgov.com/2023/03/20/governor-ron-desantis-announces-legislation-to-protect-floridians-from-a-federally-controlled-central-bank-digital-currency-and-surveillance-state/ 1:04:30 New Green Pill Channel https://www.youtube.com/channel/UCrX_72ziMAZMb8fwD2HyOaw 1:05:18 Bankless Merch https://137s232gkpwm42ei-26449739831.shopifypreview.com/products_preview?preview_key=b4f7d5e5a88c4e2852bf37665f580cd0&variant=40128096206903 https://137s232gkpwm42ei-26449739831.shopifypreview.com/products_preview?preview_key=b4f7d5e5a88c4e2852bf37665f580cd0&variant=40128096206903 1:06:40 Immutable x Polygon Labs https://twitter.com/0xPolygon/status/1637878834945990675 1:07:44 Microsoft Wallet in Edge Browser https://twitter.com/thebookisclosed/status/1636759487829917698 1:08:25 Sismo https://twitter.com/Sismo_eth/status/1636371873377423361 1:09:50 PleasrHouse UniBlocks https://twitter.com/PleasrDAO/status/1638858333506646020 1:12:25 Farcaster Web Login https://twitter.com/dwr/status/1638297074365239296 1:12:45 Ledger Browser Extension https://www.ledger.com/ledger-extension 1:13:21 Blockworks ‘GrantFarm’ https://blockworks.co/grants 1:13:48 Raises https://twitter.com/HilmarVeigar/status/1638180896611377154 1:15:05 Jobs https://pallet.xyz/list/bankless/jobs 1:17:55 Questions from the Nation Tadziu Jacksonthedev 1:22:22 Takes https://twitter.com/Fiskantes/status/1637497040933625858 https://twitter.com/sassal0x/status/1637702828306358272 1:25:13 What David’s Bullish On 1:27:30 What Ryan’s Bullish On 1:29:35 MEME of the Week https://watcher.guru/news/belgium-to-require-all-crypto-ads-to-state-only-guarantee-in-crypto-is-risk 1:30:52 Risks & Disclaimers 1:31:07 Moment of Zen https://twitter.com/biancoresearch/status/1638174103038472195 ---- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://www.bankless.com/disclosures

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

• 0:00Ryan Sean Adams?

  Do Kwon was just arrested in Montenegro, David. Excited about that?

• 0:05David Hoffman?

  Ladies and gentlemen, we got him.

• 0:09Ryan Sean Adams?

  Bankless Nation, happy 4th Friday of March. David, what time is it?

• 0:14David Hoffman?

  Oh, Ryan, it's the Bankless Friday Weekly Rollup, where we cover the entire weekly news in crypto. Especially this week is absurdly crazy. I feel like I say that every single week, but it just keeps on getting crazier. And so that's what we're gonna do today. Cover the entire weekly news in crypto with coffee.

• 0:32Ryan Sean Adams?

  Yes, and you have a new Vista behind you. Where are you today? You're not in your New York place.

• 0:38David Hoffman?

  I'm very, very far away from New York. I am in the Dominican Republic. You know, with some pleaser Dow folk and other people around the crypto space.

• 0:45Ryan Sean Adams?

  Tropical location, and you're right. There's so much to cover. I feel like the 2020s are just like this. Like, every week is going to be a little bit crazy. That's how it's felt since COVID? Maybe before that? I don't know. But let's talk about what we're doing. We've got some big topics of the week. Number one, the Arbitrum airdrop has now dropped. Did you claim it?

• 1:06David Hoffman?

  We got a price.

• 1:07Ryan Sean Adams?

  We gotta talk about that. What else are we covering?

• 1:09David Hoffman?

  Both Balaji and Hayes, Arthur Hayes, are signaling wartime for crypto on different timeframes, but both agree directionally that this is the big one. So we'll talk about what that means and also all of the people who think that they are both full of shit. We'll talk about that. And then on different frontlines, the SEC has issued a bunch of Wells notices and subpoenas. These are real facts, not just rumors this time. So we'll talk about all of those. Interestingly, Coinbase got a Wells notice, but Coinbase seems pretty ready for it. So is this the SEC's final push? And then breaking, Bankless broke this. You wanna talk about what Bankless broke, Ryan?

• 1:50Ryan Sean Adams?

  Do Kwon was arrested in Montenegro.

• 1:52David Hoffman?

  Bankless broke Do Kwon.

• 1:54Ryan Sean Adams?

  Yeah, well, you know what? He kinda broke himself after he broke Luna and Terra. And now he's been arrested, I guess. We'll tell you where. We'll tell you the location and the details when we get to it. All right, David, before we get into it, this is a message for the devs listening to Bankless. If you are a developer, did you know, for you amazing developers out there, that there is now an NFT API that is being provided by Infura? Really cool new product from Infura. David, you wanna tell them about it?

• 2:26David Hoffman?

  Yeah. So if you are an NFT builder, this is for you. This is a new SDK kit that provides you the tools to write across five different blockchains, all the smart contract templates for ERC 721, 115 to allow you to aggregate your data across all the chains. So whether you are building something that mints NFTs, buys NFTs, sells NFTs, et cetera, Infira has got this SDK to help your builder life get easier. So there is a link in the show notes for you to access all of that SDK information. You can register with Infira and then you'll be able to make an account and get that SDK.

• 3:01Ryan Sean Adams?

  And builders, thank you for being a builder, making this space better. This is definitely the build market, not the bear market. Speaking of markets, let's get to the Bitcoin price. Are we up on the week or down?

• 3:12David Hoffman?

  Oh, we're up bigly on the week, start of the week, $25,000. A very respectable $25,000 is where we started. We are up 10%, Ryan. Ooh, over 10% since I put these numbers in. We are at $28,200.

• 3:24Ryan Sean Adams?

  We were up last week too, right?

• 3:25David Hoffman?

  Oh, we are. Green, very, very, two very green weeks for Bitcoin.

• 3:30Ryan Sean Adams?

  I'm zooming out on the Kraken charts here. Kraken Pro, of course, you know it. Thanks to Kraken for providing these fantastic charts. This is another big week, back to back, two in a row. We'll talk about Bitcoin a lot because I feel like it's narrative season and Bitcoin is in the spotlight. But before we get there, ETH price, what are we doing on the week?

• 3:48David Hoffman?

  ETH price, starting the week at $1,660. It was up 6% when I wrote these numbers down when it was 1750, but we have just hit a very large green candle. We are all the way up to 1815. So, okay, this is a moment, Bankless Nation, pull out your price checkers.

• 4:05Ryan Sean Adams?

  Check yourself.

• 4:06David Hoffman?

  That's the actual price. We are recording this at 11 Eastern Time on Thursday. Yeah. So we are almost 12 hours behind you if you're listening to this Friday morning. So right now for us, Ether price is 1818. For you guys, I don't know what it is.

• 4:20Ryan Sean Adams?

  Yeah, well, we're like 24 hours behind you guys probably. ETH Bitcoin, what about the ratio? That tells a story in and of itself.

• 4:27David Hoffman?

  What about the ratio?

• 4:28Ryan Sean Adams?

  David, yeah. What about the ratio? Are you sad about this? Cause I bet the ratio is, is it up or down from last week?

• 4:35David Hoffman?

  It's down from last week. We are down. Five percent on the ratio. So we are down to the low, low price of point zero six four or five. We hit almost as low as point zero six two, which is lower than it's been in a long time. Not lower than it was for the three hours capital liquidation. That was really low. But it is pretty unequivocal that Bitcoin has won the last two weeks. Bitcoin smash. Hulk season for Bitcoin.

• 4:58Ryan Sean Adams?

  Bitcoin smash. It's gonna be okay though, David. Like, are you, are you upset about this? Or is this just whatever noise? Do you, do you think?

• 5:04David Hoffman?

  I've been saying like, this is a 18 plus long term hold. So like the two weeks of Bitcoin narrative season is not, I'm not, my reserve is not shook.

• 5:15Ryan Sean Adams?

  Can we zoom out though?

• 5:15David Hoffman?

  Bitcoin ordinals does not change my thesis about, about ether.

• 5:20Ryan Sean Adams?

  When in doubt, zoom out, David. How far should we zoom out to, to make these numbers feel better for you? Should we go all the way back to 2021?

• 5:28David Hoffman?

  Right. So on the far left of the screen, Ryan zoomed out all the way to 2020 when the Bitcoin ratio was down to point zero two five, point zero three. Where we're over double that. And so ever since this bull market, when ether hit the, went from point zero three to point zero nine or so. We haven't gone down below that. So you can see the three hours capital liquidation area in July of, of 2021. So we are still at this like plateau, but we are at a local low in the ether appreciation versus Bitcoin from the last bull market.

• 5:59Ryan Sean Adams?

  Yeah. Do you remember this whole season here was this after DeFi summer where there was, it was a huge Bitcoin narrative? And the question was, did you even need ether as an asset? You could just buy DeFi tokens.

• 6:11David Hoffman?

  Plus Bitcoin.

• 6:12Ryan Sean Adams?

  Plus Bitcoin. You got the money and you got the finance systems. And then you get full exposure to the market. That was the narrative. And that's what we were seeing over here. It's funny, you can get into that age old question of, does price drive narrative or does narrative drive price? Which is like, the answer to that always to me has been yes.

• 6:30Ryan Sean Adams?

  They drive each other. And so we're definitely in a good narrative season for, for Bitcoin. Maybe we'll, we'll get to that in a little bit, but crypto market cap is up on the week? Question mark?

• 6:41David Hoffman?

  Slightly up on the week. Yeah, we are at just below 1.2 trillion dollars, 1.198 trillion.

• 6:47Ryan Sean Adams?

  Okay, well, let's go over to Powell's world and the central bankers for just a minute. We'll talk about more bank stuff later in the episode, but the Fed just hiked rates by a quarter. So they had a meeting on Wednesday. This was a much anticipated meeting. What are they going to do? The answer is they're going to hike rates by 0.25%.

• 7:07David Hoffman?

  A little bit.

• 7:08Ryan Sean Adams?

  So, yeah, it's not the 50 basis points that some people said that they might do, lower than that. And then they also signaled some things, too. The increases might stop soon. Jerome Powell said that the committee is considering pausing hikes because, this is his quote, "Events in the banking system are likely to result in tighter credit conditions." That's an interesting phraseology. Events in the banking system. I'll say, yeah, a bank run might be considered an event to Jerome Powell.

• 7:38David Hoffman?

  A crisis is an event, yeah.

• 7:40Ryan Sean Adams?

  Yes. Janet Yellen is also weighing in. She is, of course, Secretary of Treasury of another important monetary institution in the United States. She said that Treasury isn't even considering guaranteeing all bank deposits without congressional approval. So that's been a question mark that people have been asking about. So with the bailout of some of these banks, the depositor bailout of Signature and Silicon Valley Bank, depositors made whole, does that mean de facto that Treasury is going to guarantee all depositor accounts in every single bank? And Yellen says, "Don't go that far. That would take an act of Congress."

• 8:18David Hoffman?

  Right. Tamper your expectations. We need Congress to give us the thumbs up on that one.

• 8:23Ryan Sean Adams?

  My question to you, David, is like, do you think she means it? Do you think it even matters? Do you think that by the time you need to go to request to Congress for something like this, they're going to rubber stamp it anyway? What's your take here?

• 8:36David Hoffman?

  So, the take here that I think is safe is that the powers that be, be it Congress, the FDIC, the Fed, are always going to aim on the side of mitigating pain. The Bank Term Funding Program has this one-year term on it, as in that facility goes away after one year. But is it really gonna do that, or are they just saying that because they want to tamper expectations? The best that they can tamper our expectations, the more that we are pushed towards normal market behaviors. But I think everyone is ready to call their bluff, because ever since the 1933 Great Depression, the monetary policy and fiscal policy of the United States of America has been to mitigate pain, mitigate pain, mitigate pain. So I think it's safe to

• 9:21David Hoffman?

  assume that they are going to make choices that mitigate pain regardless of what they say.

• 9:26Ryan Sean Adams?

  That program that you mentioned, what's that called again?

• 9:29David Hoffman?

  The Bank Term Funding Program.

• 9:31Ryan Sean Adams?

  BTFP. You might be hearing that acronym a lot, BTFP. If it doesn't mean anything to you, I encourage you to go listen to the Arthur Hayes episode that we published earlier this week. It was fantastic. David was doing it solo. I was busy. And Hayes just gives kind of a run through and explains monetary policy. He explains this new acronym that I think you need to learn about. You need to know this. This is like the quantitative easing of 2023. This is the big,

• 10:01Ryan Sean Adams?

  like, I guess stimulus, this is the big money printing event that is actually happening in the background quietly. And David said, I don't know if you actually said this, but like, it's, they announced this last Sunday, I believe, the BTFP. Was this the last Sunday? I don't know, sometime in the last week or so. And they said it was only going to last for a year. People like Arthur Hayes are incredibly skeptical. They're like, no, they're gonna do this and they'll do it forever. And it'll never, it will keep on getting renewed up to infinity. And anyway, he has a much better way of explaining all of these things.

• 10:37David Hoffman?

  The simple way to explain it is that, like, okay, the Bank Term Funding Program is meant to be used by banks. Banks will therefore use it and settle into this new equilibrium that is created by the Bank Term Funding Program. Once the banks get accustomed to this program, undoing the program is hard, especially when everyone is ready to call the bluff of like, yeah, one year, not if we use the F out of this new facility that you just created for us and lock ourselves into that new paradigm. And so unwinding the bank term funding program after people get, okay, what is the bank term funding program? All of the illiquid underwater, long-term bonds that banks bought, they get to borrow against those bonds, even though the mark-to-market price is down 30%, 10%, whatever, down something

• 11:19David Hoffman?

  bad, they get to borrow against those bonds at the full value of them at par at maturity. So they get to print free money, essentially. Unwinding this program after they have already engaged in this behavior is going to be hard and deflationary and cause pain, which is why we are going to assume, probably it's safe, to think that they are just going to extend the term on this.

• 11:42Ryan Sean Adams?

  So if fully used, the BTFP would print about another $4 trillion. This doesn't happen immediately.

• 11:49David Hoffman?

  4.4.

• 11:50Ryan Sean Adams?

  4.4 trillion.

• 11:51David Hoffman?

  And we eased, we didn't print, well, we did print. We eased QE 4.1 trillion dollars in COVID, and the bank term funding program has 4.4 of available money issuance to.

• 12:03Ryan Sean Adams?

  So COVID, the largest money printing 2020 episode in US history since World War II, we're going to do another COVID, it seems like. That's what the BTFP is.

• 12:12David Hoffman?

  COVID plus another cherry on top, plus a little more.

• 12:15Ryan Sean Adams?

  And then, that's not even the end of it, by the way. You gotta listen to the full episode on how we get from 4 trillion, 4.4 trillion, to potentially like something like 17 to 18 trillion dollars of money printing if the next domino falls after this. Anyway, a lot going on, we'll get more to the banking crisis in a minute, but let's talk about volatility while we're on the topic of markets. Banks down, coins up, volatility up. What are we looking at?

• 12:42David Hoffman?

  I think this chart really just tells a very different story. Without even understanding what each one of these lines are for the bank, for the podcast listeners, there's about 10, 12, 15 lines on the screen. They're all going horizontal and to the right, and then the crisis happens, the banking crisis happens, some lines go up into the right, some lines go down into the right. The theme here is the ones that went down into the right are all banks, the ones that went up into the right are crypto assets and volatility. And I think maybe there's also a Chinese bank in here, Chinese banks up into the right, I could be mixing up my charts. But basically, the summation of this chart is that Bitcoin and crypto assets are up, banklessness is up, if we want to use our own terminology for this. Banklessness is up, banks are down, and also volatility is up.

• 13:25Ryan Sean Adams?

  Yeah, banks are so 2020.

• 13:29Ryan Sean Adams?

  You know, it's like, this is incredible. This is the bifurcation, right? Bankless assets up, volatility also up because things are crazy. Bank stocks go down. That's all part of the story too, that we've been talking about. This is a take that you tweeted out, which has been sort of a theme of our episodes this week. And it's not the conclusion of the theme, but I think has definitely been a theme of the past two, three episodes that we did. Bitcoin in times of war, Ethereum in times of peace. Who tweeted that out? David Hoffman? What? Bitcoin or ETH maximalist? David Hoffman tweeted this out? Is that really what happened, David?

• 14:07David Hoffman?

  This is not the first time I've given out this take. This is a take that I've had in my back pocket for a very long time. And now this is a moment where the market kind of understands this a little bit better. Bitcoin, the philosophy, the design philosophy of Bitcoin is reduce, reduce, reduce, reduce the code, make it more simple, make it more invisible, make it harder to track, make it more self-sovereign, remove all utility from it because you need to do one thing, which is hold your store of value. It has this wartime crisis moment mentality in the design philosophy of Bitcoin. The whole idea, even if you could add in extra features, NFT features, and this is why sometimes ordinals have triggered people. If you could add in DeFi features, that would be extra baggage, extra surface area.

• 14:51David Hoffman?

  If you added NFT features, smart contracts, it would be extra baggage that would make Bitcoin less suitable to times of crisis. And so what does Bitcoin do? It does one thing, which is store your money in a way that's outside of the system. Adding in extra features in the Bitcoin philosophy is making it harder to use in a wartime crisis moment. And so during times of peace, all of these layer two, smart contracts, account abstraction, NFTs, DeFi, NFTFi, identity, these are all innovations that happen during peacetime when times are stable and we can invest in innovation and progress and development.

• 15:33David Hoffman?

  And there's a pendulum in humanity between peace and war. And so the claim here is that the philosophical design of Ethereum. Is suited to peacetime and the philosophical design of Bitcoin is suited to war. Bankless is known, at least me and Ryan, not the analysts of the newsletter, but at least me and Ryan are known to be Ethereum biased. Some might say Ethereum maxies. I think, Ryan, you and I are all disposed towards peacetime, growth and innovation. Other people are disposed towards, let's make sure that Bitcoin does the thing that it needs to do in the worst possible moments of time, in crisis moments. And that's not necessarily our disposition, but I think that is a valid disposition.

• 16:18David Hoffman?

  And as the pendulum of the world shifts from peacetime innovation to crisis, capital controls, restrictions, fiat inflation, fiat demise, like all of a sudden that pendulum shifts into wartime. And that is my, I remember last week, Ryan, we were talking about, I said like, I don't know why the Bitcoin ratio is versus Ether is up so big. This is my, this is my answer for that. We are shifting from peacetime into crisis time. And Bitcoin, the narratives of Bitcoin, whether or not they're legitimate in the foundations, the narratives in wartime benefit Bitcoin. And that is my take.

• 16:54Ryan Sean Adams?

  Do you want my take on your take?

• 16:55David Hoffman?

  Uh, sure.

• 16:57Ryan Sean Adams?

  So there are elements of that that I agree with, but I think that the last part of what you said is like what I agree with most and the rest, I don't probably. So I think that there is a difference between product market fit and narrative market fit. Right? Product market fit is, does the thing do what it's supposed to do? And provide like actual utility for what it promises. Okay. And that's one component of it. You know, everyone always talks about product market fit when you're a startup and technology is the same. Does it have product market fit? Like iPhones had fantastic product market fit, for instance, right? You know, some other products that we thought were going to be revolutionary never, never had product market fit.

• 17:42Ryan Sean Adams?

  And then there is something else, which is narrative market fit, which is like, is this, are we at the point in the storyline of humanity where this narrative is going to Specifically have a moment, whether this is narrative is specifically going to land. I think Bitcoin has incredible narrative market fit for this moment in time. But I actually, but I actually think Ethereum has better product market fit for actual wartime. All right. So, so like, if you talk about proof of stake, I would 100% argue that having thousands, tens of thousands, maybe hundreds of thousands of decentralized validators around

• 18:26Ryan Sean Adams?

  the world that can run validators from their own homes, locations, wherever they have an internet connection is much more.

• 18:34David Hoffman?

  Large scale mining operations that can be bombed and seized.

• 18:36Ryan Sean Adams?

  It is much more censorship resistant in times of war than something like a proof of work. For example, I think that Ethereum provides not only the like the verb of transact, which Bitcoin provides in a censorship resistant way, but it also provides the verb of trade. Like, how do I trade Bitcoin for some other asset that I want without going to a centralized custodian? The answer is I can't. With Ethereum, we have Uniswap, we have decentralized protocols. So like both Ethereum and Bitcoin are bankless, but Ethereum provides more money verbs, more bankless things that you can do, and therefore is a better system in times of war.

• 19:20Ryan Sean Adams?

  But here's the difference, it has not captured that narrative at freaking all.

• 19:24David Hoffman?

  Yes.

• 19:24Ryan Sean Adams?

  And then the culture of Ethereum, I agree with you here totally, does not lean into that.

• 19:30David Hoffman?

  Right. No, we have unicorns and rainbows.

• 19:32Ryan Sean Adams?

  Yeah.

• 19:33David Hoffman?

  Bitcoiners are gun people.

• 19:35Ryan Sean Adams?

  Exactly. They're, they're like the, you know, the doomerism, like, like, let's quick, let's grab all of the Bitcoin we can because the world's going to end and there's only 21 million and then we'll get kind of these, you know, underground bunkers and, you know, like Ethereum culture is just not that at all.

• 19:51David Hoffman?

  Podcasts out there called Bitcoin and Guns. Do you know that?

• 19:54Ryan Sean Adams?

  Is it really?

• 19:54David Hoffman?

  Yeah.

• 19:56Ryan Sean Adams?

  So anyway, what I would say is that what I think we are seeing is also a narrative trade. We see narrative trades in the past, David. Like, remember when there was narrative market fit for scalability on crypto networks because Ethereum gas fees were way too high? You got all of these chains that pumped on narrative market fit, not necessarily product market fit. Now, I will say narratives can feed product market fit, especially for a meme energy asset like a monetary asset. And so that is another wrinkle in this where if enough people believe Bitcoin is money, then it becomes money and then it, you know, reaches

• 20:37Ryan Sean Adams?

  greater product market fit. But yeah, that is the subtlety. I actually think Ethereum is better in times of war from a practical product perspective than Bitcoin. It just doesn't have the narrative at all for that.

• 20:49David Hoffman?

  I think if I said that Ethereum isn't meant for war, Justin Drake would like roll in his grave.

• 20:54Ryan Sean Adams?

  Yeah, I know he would.

• 20:56David Hoffman?

  No, because we have all of these like cryptography tailwinds to protect Ethereum. Maybe there's an episode out there that is like the Ethereum case for wartime. Just to tie off this last bit of conversation, we can move on. Bitcoin, born in the banking crisis, born in the 2008 financial crisis. Now we have another banking crisis. Imagine there's still more capital outside of crypto, outside of Bitcoin than there is inside of it. And all of the trad fi wealth managers, who I will perhaps unfairly claim are 100 IQ middle curve money managers.

• 21:31Ryan Sean Adams?

  They're doing the thing they were taught in school, basically.

• 21:34David Hoffman?

  Exactly. Right. And so they're going to like, think about this banking crisis and they are going to consider alternatives because that's what Arthur Hayes, while you're saying is like, you must consider alternatives now. And so they are going to think in their brain. Banking crisis? Bitcoin, it even is an alliteration, Ryan, which actually does mean something. It sounds better. And so just like

• 21:57Ryan Sean Adams?

  Bitcoin not banks?

• 21:58David Hoffman?

  Yeah, Bitcoin not banks. Like, oh, there's this is, oh, this is what Bitcoin is for. Eden Bitcoin, I think it's a lot of tailwinds be because it's more of an idea than it is actually an execution. Like Bitcoin is a grandiose idea for what it is. People associate all of the features of crypto into Bitcoin, sometimes naively, before they unlearn about the actual fundamentals of Bitcoin. But for the people who are on the outside, who just understand that crypto exists to the best of their ability, they're thinking, bank crisis? Question mark? Bitcoin? And that's all they have to think.

• 22:29Ryan Sean Adams?

  There you go. And by the way, if you're listening, but neither David nor myself consider ourselves a maximalist, Ethereum maximalist. If anything, we are bankless maximalists, decentralization maximalists. And so I'm happy to the extent Bitcoin remains bankless, which it is, to support Bitcoin in all sorts of ways. Okay, the crypto VC list, moving on. This was really cool. Here's a VC list from 2020, the top 300 global crypto VC firms by fund size and investment activity. Ryan Ellis has been a guest on the podcast previously. His firm CoinStack put this out. I wanted to highlight one thing. Okay, here's a quote from the the report, really.

• 23:12Ryan Sean Adams?

  Even as the the bear market is here at the moment, there's three times as much capital going around as last time. The digital assets industry is maturing. We're seeing much more institutional capital stick around this time. This is a big deal. Okay, in the 2019 bear, there was about $470 million going from VC into like building crypto projects and crypto infrastructure. In this bear market, the 20 late 2022 and 2023 market, there is $1.5 billion, a nice little 3X on that. That is like the money that is going to build and invest in future crypto startups has never been higher and continues to flood in.

• 23:56Ryan Sean Adams?

  That was the big finding of the This report and I think is super bullish. We've called this the build market, not the bear market and like the capital inflows are reflecting that as well. There's also bankless listeners, a link in the show notes. If you want to see who is moving the most money, like it goes through, you know, A16Z all the way to like Galaxy Interactive, all of the largest crypto VC funds. And I found that data really interesting. Anything on that, David, before we move on?

• 24:26David Hoffman?

  Yeah, we've talked, I've gone back and forth. It's like, man, this bear market is not so bad to, oh my God, this bear market is so bad. At least in terms of capital flows into people's salaries to allow them to maintain to work in crypto during this bear market. That has been better than it's ever been. So wow, we've, we've still had the FTX, we've still had the Alameda's and the three hours capital and the DoKwans. At least we are still paying people salaries.

• 24:53Ryan Sean Adams?

  That's right. And look, we needed to cool down anyway. It was getting out of hand. So yeah, so I feel like it's much healthier. David, what do we have coming up next?

• 25:01David Hoffman?

  Oh my God, we get to talk about the Arbitrum airdrop. The price has been, I've been watching the price. It's been jumping all around. So we're going to talk about what price is the arb token. Well, just a few hours later, bankless listener, you're going to have more information than we will, I guess. So this is a time to pull up the art price and you can tell us. But in addition to that Coinbase and Sushi Swap has received a Wells notice. Sushi Swap received a subpoena. Credit Suisse, we're going to talk about the collapse of Credit Suisse and the banking crisis that has hit Europe. And we also have an Euler hack update. It's good news. We think. So we'll talk about that and more as soon as we talk to some of these fantastic sponsors that make this show possible, especially Kraken, who according to Balaji and Arthur Hayes, you need

• 25:46David Hoffman?

  to get out of the fiat banking system. So I would suggest that you use Kraken to go from fiat to Bitcoin, if that is your asset of choice. So if you're going to flee the financial system, make sure you use Kraken, our strategic sponsor for 2023. Let's go. Kraken has been a leader in the crypto industry for the last 12 years. Dedicated to accelerating the global adoption of crypto. Kraken puts an emphasis on Security, transparency, and client support, which is why over 9 million clients have come to love Kraken's products. Whether you're a beginner or a pro, the Kraken UX is simple, intuitive, and frictionless, making the Kraken app a great place for all to get involved and learn about crypto. For those with experience, the redesigned Kraken Pro app and web experience is completely customizable to your trading needs,

• 26:29David Hoffman?

  integrating key trading features into one seamless interface. Kraken has a 24/7 365 client support team that is globally recognized. Kraken support is available wherever, whenever you need them, by phone, chat, or email. And for all of you NFTers out there, the brand-new Kraken NFT beta platform gives you the best NFT trading experience possible: rarity rankings, no gas fees, and the ability to buy an NFT straight with cash. Does your crypto exchange prioritize its customers the way that Kraken does? And if not, sign up with Kraken at kraken.com/bankless. How many total airdrops have you gotten? This last bull market had a ton of them. Did you get them all? Maybe you missed one. So here's what you should do. Go to Earnify and plug in your Ethereum wallet, and Earnify will tell you if you have any unclaimed airdrops that you can get.

• 27:13David Hoffman?

  And it also does PoApps and mintable NFTs, any kind of money that your wallet can claim. Earnify will tell you about it. And you should probably do it now because some airdrops expire. And if you sign up for Earnify, they'll email you anytime one of your wallets has a new airdrop for it to make sure that you never lose an airdrop ever again. You can also upgrade to Earnify Premium to unlock access to airdrops that are beyond the basics and are able to set reminders for more wallets. And for just under $21 a month, it probably pays for itself with just one airdrop. So plug in your wallets at Earnify and see what you get. That's E-A-R-N-I dot F-I. And make sure you never lose another airdrop.

• 27:48Ryan Sean Adams?

  Do Kwon was just arrested in Montenegro, David. You excited about that? Ladies and gentlemen, we got him.

• 27:57Ryan Sean Adams?

  We don't have much information at the time of recording, but we did find this out. In Montenegro, this is a translation, I believe. "Montenegro police have detained a person suspected of being one of the most wanted fugitives." Most wanted, wow. "South Korean citizen Do Kwon, co-founder and CEO of Singapore-based Terraform Labs. The former cryptocurrency king, is that what he was? "who is behind losses of more than $40 billion, was detained at the airport with falsified documents. And South Korea, the US, and Singapore are demanding the same."

• 28:32Ryan Sean Adams?

  Wow.

• 28:32David Hoffman?

  Demanding the return of Do Kwon. Interestingly enough, we actually broke this news. I think we were the first ones on Twitter to actually break this. So yeah, Do Kwon arrested, falsified documents. Interestingly enough, if you go back in time to Do Kwon's tweet back in September of 2022, one of my favorite quotes now of all time out of Do Kwon is, "It's not like I'm on the run or anything."

• 28:55Ryan Sean Adams?

  He said this.

• 28:56David Hoffman?

  But then Do Kwon, tell me, how, why, how do you have falsified documents in Montenegro?

• 29:01Ryan Sean Adams?

  Interesting. Look at this tweet, September 17th. "I am not on the run or anything similar from any government agency that has shown interest to communicate. We are in full cooperation. We don't have anything to hide." Wow. Falsified passport, seems like you might be on the run, Do.

• 29:18David Hoffman?

  So I'm going to grave dance a little bit. My first interaction of Do Kwon was telling him that I don't believe him that he was going to kill Die the stablecoin. Here's Nick Kunkel, a friend of mine who used to work at Maker, goes, "How it started, retweeting Do Kwon's, 'By my hand, Die will die,' and how it's going, breaking. Do Kwon arrested in Montenegro." And that's a, that's a wrap on that story.

• 29:39Ryan Sean Adams?

  Moving on. Arbitrum, they announced a token and they launched the token yesterday.

• 29:45David Hoffman?

  We like tokens.

• 29:46Ryan Sean Adams?

  At the time, at the time of recording yesterday. So this just launched now. I think we have some pricing information, but can you recap, folks, on the high level? What, what about the arb token drop? It's finally here. What do we got? What are the stats?

• 30:00David Hoffman?

  What are the big ones? Okay, 12.75% of the Arbitrum token will be airdropped to users of Arbitrum yesterday, today for me and Ryan. This is the inaugural launch of the DAO governance of Arbitrum One and Arbitrum Nova, featuring on-chain governance execution, not just snapshot votes. I think the maximum airdrop that you could get was 10,250. The minimum was 625. I think the vast majority of people got somewhere below 1,000 Arbitrum tokens. And of course, the long tail approaches all the way to 10,025. Interestingly enough, the details for, there is this extra.

• 30:42David Hoffman?

  1. something percent that was airdropped to DAOs on top of Arbitrum. The biggest DAOs that got the DAO airdrop were the Treasure DAO ecosystem, the Smallbrains ecosystem, as well as GMX, the leveraged trading exchange on Arbitrum. Uniswap and SushiSwap got an allocation, DopeX and Curve got an allocation. And shout out to the Arbitrum team that elected to do this. Protocol Guild got a large distribution, I think 3 million, yeah, 3 million arb tokens. What does Protocol Guild do? Public goods for Ethereum core developers. Core development of Ethereum fundamentally does not have a business model, so they rely on grants and donations and the EF. And so Protocol Guild is a place where people can donate money to,

• 31:27David Hoffman?

  to pay for the core development of the Ethereum protocol. And Arbitrum, as a part of their airdrop, allocated 3 million arb tokens to the Protocol Guild. That is a great precedent to set, and I'm a big fan of this.

• 31:38Ryan Sean Adams?

  I think one of the coolest things about this, David, is that the wallet addresses, the number of wallet addresses that received this and were eligible for this, 600,000. That's like the population of a fairly large-sized US city. That's a lot of people that were eligible for this airdrop. Why is that?

• 31:57David Hoffman?

  That's a really large number. That, I don't know how many people there are in DeFi, but that, we all know the Arbitrum airdrop was at least attempted to be farmed. We all know that they also tried to prune to the best of their ability airdrop farmers. The 600,000 number, Mike got reflex on that one, is like, that's a farmed number.

• 32:15Ryan Sean Adams?

  I don't think it, so my take is, even if it's like, like 4X farmed or 5X farmed, we're still talking about like, got at the low end, 100,000, 150,000. Like, it's a pretty well-distributed airdrop. And some people had, you know, multiple wallets, for sure.

• 32:30David Hoffman?

  I don't know how well we can know that.

• 32:33Ryan Sean Adams?

  I guess you can't.

• 32:34David Hoffman?

  I think we need somebody to do who is like an on-chain analysis expert. We need somebody to come in and do a report on that.

• 32:41Ryan Sean Adams?

  Well, I am excited about it because this is one of the larger airdrops in history in terms of distribution of addresses. It's probably like Uniswap, ENS, and this would be probably a number three, I want to say, in terms of.

• 32:55David Hoffman?

  I think in terms of dollar value, this is by far number one.

• 32:58Ryan Sean Adams?

  Yeah, but also in terms of like the number of people who received it. Can you think of another one? Like, whatever the number is, you know, that we just attribute.

• 33:07David Hoffman?

  Uniswap got 247,000 addresses.

• 33:11Ryan Sean Adams?

  And that was probably like.

• 33:12David Hoffman?

  ENS came really close to that.

• 33:14Ryan Sean Adams?

  Yeah. Anyway, if you want to check to see if you received the Arbitrum airdrop, I recommend you go check out Earnify. This is earni.fi. You could type in your ETH address. You can type in ETH addresses to multiple wallets and see whether you are eligible or not. I've got my wallet pulled up here. It looks like I got some Arbitrum tokens here, $4,230 worth. I can't wait to talk to you about price, David, because I think that that means some good things, but this is my way to get.

• 33:42David Hoffman?

  Tax liability, Ryan?

• 33:43Ryan Sean Adams?

  Yeah, thank you. This is my way to get notified of airdrops, so I don't even have to think about it. Just put my addresses in.

• 33:49David Hoffman?

  Tax burdens, yeah.

• 33:50Ryan Sean Adams?

  Yeah, all the tax burdens that come inbound.

• 33:52David Hoffman?

  You owe the IRS one message.

• 33:55Ryan Sean Adams?

  Yeah, so go check that out, guys. And speaking of price, though, what is the Arbitrum token trading at right now?

• 34:02David Hoffman?

  $1.17. Ignore that, down 76%. That's because the inception of liquidity is always completely arbitrary. So we are trading at a fully diluted valuation. If you scroll up, Brian, I can read that number of basically $12 billion. What was my price prediction last week? Last year or is it last year? Last week, I think it was between $1 and $2.

• 34:22Ryan Sean Adams?

  $1 and $2.

• 34:23David Hoffman?

  Pretty wide range.

• 34:25Ryan Sean Adams?

  The obvious comparison is optimism here, right? Which is what?

• 34:28David Hoffman?

  It is $1 billion more than optimism. So $11 billion versus $12 billion.

• 34:34Ryan Sean Adams?

  Interesting.

• 34:35David Hoffman?

  Actually, it's like $800 million higher than optimism.

• 34:38Ryan Sean Adams?

  Look, this is just.

• 34:39David Hoffman?

  We are in such early days of price discovery for Arbitrum.

• 34:42Ryan Sean Adams?

  Yeah, this is just, we are like three hours into this, four hours into this?

• 34:46David Hoffman?

  You know, there are very big funds who got an airdrop, which means they are not allocated, exposed to Arbitrum, who have not deployed capital. And so if there are big funds who want exposure. Like they probably haven't bought yet. I'm just a extrapolation, just a, yeah. There's also investors that will have to sell at some point, but that doesn't start per year. That's actually, we can talk about that. If you are an Arbitrum investor, you are locked up for four years. There's a one year cliff. What does that mean? You get zero tokens for the next 12 months. Then at 12 months, 25% of the total supply unlocks for investors. And then every month after that, a linear amount of unlocks for the remainder of four years.

• 35:29David Hoffman?

  So that is the Arbitrum investor token supply. I'm not an investor. I just know that because we did the show with the Arbitrum team and that's what they said.

• 35:38Ryan Sean Adams?

  There, uh, there's a question I have for you though, is so you got some airdrop tokens. What are you going to do with them? Buy, sell, hold? Buy more, sell?

• 35:47David Hoffman?

  Brother, you're selling the Arbitrum airdrop in the middle of a bear market. One of the major layer twos, you're going to sell that thing in the, in the, in the bear market? Like, what are you doing? No, that is what I am doing and not financial advice of any sort in time. But today is not, unless you, unless you need to like glow up your life, right? Unless you have bills to pay. Unless you have any reason to do anything about improving your own life, which is a fantastic reason, thing to do with any airdrop, because this is free money and like, maybe perhaps you should do that. But, but if you don't have to do that, I am holding that shit so hard. Excuse my language.

• 36:23Ryan Sean Adams?

  That is not the only option though. Like you, you could glow up your life, of course, but you could also just exchange it for ether. If you think ether is going to appreciate relative to arb tokens.

• 36:33David Hoffman?

  Yeah, if you do think that, uh, layer, but ether, the just platform of Ethereum depends on layer twos. And so it's actually like, it's not like this is an application where an application on Ethereum can come and go. Like layer twos and Ethereum need each other. And so this is a more formal relationship with Ethereum. So I'm not going to lump this into like a one inch airdrop or perhaps even an ENS airdrop. Like this is a more formal relationship with Ethereum.

• 37:02Ryan Sean Adams?

  I'll go back to our old analogy is like Ethereum is like the federal government and Arbitrum is like a state in the, in the union, if you will. So this is like a bet on California or something.

• 37:11David Hoffman?

  Right.

• 37:12Ryan Sean Adams?

  And, you know, the Fed and California are pretty tied together. They're very interlinked economically in all sorts of ways.

• 37:18David Hoffman?

  It's like Jupiter and Arbitrum is like one of its moons, you know?

• 37:22Ryan Sean Adams?

  Yeah, there you go. Mixed analogies here, but this is not a mixed message like that transition from the SEC. They're coming after crypto in a big way. It seems like today Coinbase received a Wells notice from the SEC focused on staking and asset listings. This is from Brian Armstrong and a Wells notice is basically a notice that the SEC is going to take enforcement action against you and your company at some point in time. I am calling this, and I called this on Twitter, a war on crypto. David, some people were triggered by that. War on crypto. He's being hyperbolic. Antrop synthesis said this. Please stop. Here's my comment. I just want to defend why I think this is a war on crypto.

• 38:07Ryan Sean Adams?

  This is not the only action that we've seen coming out of the US government. This is part of Operation Choke Point, part of choking off Silvergate, part of maybe some action in Signature Bank, part of this whole plan, it seems like, to choke the entrance and the exits to crypto. And so my reply is this, no, this is, I'm not going to stop. Enough is enough. It's absolutely ridiculous that SEC is ruling by enforcement. Gary Gensler isn't emperor king. We need to speak out. We need to organize. We need to push back. Unelected bureaucrats don't get to make the rules. And the reason I care, David, is because I live here. I live in this country. So this cannot, this cannot stand.

• 38:48Ryan Sean Adams?

  Anyway, could you get into more details on what exactly the SEC is alleging here and what they're trying to do with Coinbase staking?

• 38:57David Hoffman?

  I really wish I could, Ryan, but that's one of the issues is that they're not giving Coinbase, the people that they are serving, the Wells notice, any of the details. And that's one of the big parts of this story. A Wells notice is actually meant to be delivered in good faith to the company or organization that the SEC is about to sue to inform them of the reasons that they are about to sue them. The reasons that SEC stated to Coinbase is that they have securities on their exchange and also staking. Their staking product is a security. And so Coinbase in response was like, Which assets are they? Which which ones are the securities? And they've got no response from the SEC, which is totally asynchronous from what a typical Wells notice is supposed to provide,

• 39:41David Hoffman?

  which is clarity and rationale and reasonings. So that the people that they're about to sue can actually like, like, prepare for an argument. It's like actually a good faith extension, but not this kind. Brian Armstrong put out a Twitter thread where he said, "Two years ago, the SEC reviewed our business in detail and approved Coinbase to go public. Coinbase runs a rigorous asset review process and has rejected more than 90% of assets, although I will say they have some let some weird assets in as well. Going forward, the legal process will provide a public forum before an unbiased body where we'll be able to make it clear, clear that the SEC simply has not been fair, reasonable, or even demonstrated seriousness of purpose when it comes to engagement on digital assets." So Brian Armstrong saying, "We've been in compliance.

• 40:26David Hoffman?

  We are compliant. We've always wanted to be compliant. The SEC said that we were compliant."

• 40:30Ryan Sean Adams?

  We have SEC filings. They went public. They have S1 filings.

• 40:35David Hoffman?

  Right. And then the SEC comes in and says, "Hey, we're going to sue you guys. Here's your Wells notice." And then the Coinbase is like, "Why? Because you guys said this was okay a while ago, but now you're saying it's not."

• 40:46Ryan Sean Adams?

  The rules have changed. We're not going to tell you how they changed or why.

• 40:49David Hoffman?

  Which rules have changed? And how have they changed?

• 40:51Ryan Sean Adams?

  We didn't have rules before.

• 40:52David Hoffman?

  And then the SEC is like, "We're not going to tell you guys that."

• 40:54Ryan Sean Adams?

  Yeah, we don't have to tell you guys. This is Coinbase legal. Coinbase received a Wells notice from the SEC. "After years of asking for reasonable crypto rules, we're disappointed that the SEC is considering courts over constructive dialogue." Courts over constructive dialogue. But this is some of the fight here. But if courts are required, so be it. We'll defend the rule of law. Wow, this is Coinbase's, I believe, chief legal officer here, saying that they're going to go to court. Okay, you throwing down? By the way, we just had Brian on the podcast, and this is what he said. We asked him specifically about staking. And we're like, "Hey, Brian, you know, Kraken staking has been banned in the US. What do you think the fate is for Coinbase staking?" And he was like, "Well, it's different because of XYZ."

• 41:39Ryan Sean Adams?

  And also, if they come after us, we're gonna fight them in the court system. That seems to be the approach. Okay, game on, SEC. We've got evidence. Here is Paul talking more. Over the past nine months, Coinbase has met with the SEC more than 30 times, sharing details of our business and to build a path to registration. This is like the kid in the front of the class, the straight A student, who's like abiding by all of the rules that they know about. And like the teacher comes in and just like rips up their homework and is like, "This is not what I wanted." Like, I mean, I don't-

• 42:11David Hoffman?

  You're bullying the kid.

• 42:12Ryan Sean Adams?

  I just don't understand, you know, why this is happening, other than, again, we had Hester Purcell on earlier this week, and she said explicitly that this is about a land grab for the SEC. And Gary Gensler in particular, I use that name, she didn't use his name, but Gary Gensler in particular, trying to get land in the sphere of crypto. I think it's, I think it's that. And also, David, I think this is part of a broader war on crypto, right? If you like, just rule by enforcement and you don't provide any clarity, what else, like, what else are we to assume? You know, banks are getting choked off, Coinbase staking getting choked off, they're trying to do all the right things, they don't even know what the laws are, so they can't even abide. Now they're getting choked off.

• 42:57Ryan Sean Adams?

  This is a war on crypto, in my opinion.

• 43:00David Hoffman?

  I actually think that this is bullish, believe it or not. I actually don't know if Coinbase stock went down or not.

• 43:07Ryan Sean Adams?

  It went down. It went down. 8% down after hours, but I don't know what it is now, who knows?

• 43:11David Hoffman?

  Yeah, that's because a bunch of TradFi people own it, and they're probably not like exposed, "God, I'm so mean to TradFi people, I apologize."

• 43:17Ryan Sean Adams?

  Well, like, it is bad in the short run, right? It means like-

• 43:20David Hoffman?

  In the short run, right.

• 43:21Ryan Sean Adams?

  Okay.

• 43:21David Hoffman?

  But like, here's my case for this, right? Coinbase was not naive that this is happening, right? They were prepared for this, they saw the writings on the wall. The SEC is going for more and more people, deeper, deeper into crypto. They came for Kraken not even a month ago. And so, they've been prepared for this. They have legal staff, they understand their arguments. They already have their arguments that they're going to take to court, ready to go, packaged on a boat. They, they were ready for this. The SEC and Gary Gensler's maniacal behavior is he's Icarus-ing. He's doing his Icarus moment. He's flying way too close to the sun. He's going against-

• 43:59Ryan Sean Adams?

  He became the main character of the show right now.

• 44:01David Hoffman?

  He's doing the whole influencer thing. He's like out on Twitter, like trying to get for engagement, Gary the Influencer. He's going up against the most well-capitalized, well-supported, well-constructed organization that is doing everything by the book to the best of their ability. He's going to go to court. The SEC is going to lose. I'm not a lawyer. They're going to lose. And, and now we're going to get clarity because Coinbase is going to give it for us because they took Gary Gensler to court and Gary Gensler's going to effing lose. And so not only are we going to push back against the SEC manually over the front lines via trench warfare in the court,

• 44:41David Hoffman?

  we also just got the Fed pivot, bro. So like the SEC is, is on the defense. The interest rates are, are on the retreat. That's bullish, man.

• 44:50Ryan Sean Adams?

  I, I, look, I agree with, I agree with the long-term take. And like, so, okay, so I don't think that Coinbase is going to do the strategy of let's settle with the SEC because that would be the, the worst possible outcome, I think. And the easy way out, we'll disband, we'll just settle, we'll pay the fine and we'll move on with our lives. I think they'll take it to the, to the, to the limit, to the brink.

• 45:09David Hoffman?

  Yes. And we're going to the Supreme Court if we can.

• 45:11Ryan Sean Adams?

  But David, this will take years. This is the pain of the court system, right? Like, we're talking at least two years, maybe even longer, for this all to get resolved. And that's what sucks. Maybe Gary Gensler is just trying to like, slow things down or something. I don't know what his strategy is, but that's the part that sucks.

• 45:29David Hoffman?

  Yeah, by, by the time, when is Gary Gensler's term up? In 2026 or something?

• 45:34Ryan Sean Adams?

  That's what I'm saying. He doesn't care. It'll be the next person who's the chair. And, you know, hopefully Hester Pears, you know, 2024, 2025.

• 45:44David Hoffman?

  Please, hold on, Hester. She, her term ends in 2025, actually.

• 45:49Ryan Sean Adams?

  Yeah, I know.

• 45:50David Hoffman?

  So before Gary's.

• 45:52Ryan Sean Adams?

  You know, yeah, there's lots we could say there. Brian Quintan's, a former CFTC commissioner himself, says, "The Wells notices are intended to afford targets and opportunity to defend themselves in writing." Before the charges are filed, that's what you said. The vagueness of this notice deprives Coinbase of that opportunity. It lacks due process. Yes. This is Jesse Polak, who we had in the podcast, one of the key brains behind the base chain. I'm proud to work for Coinbase, Base and Ethereum. We remain committed to updating the global financial system, creating more economic freedom in the world. Well, there you go.

• 46:26David Hoffman?

  Love you, Jesse.

• 46:27Ryan Sean Adams?

  Sushi was hit with a subpoena this week. Anything you want to say about that?

• 46:32David Hoffman?

  Yeah, no, I don't know. I don't know any details of and beyond this title. I mean, Sushi Swap not too long ago, they posted their like salaries for all of their team members. And so it's kind of indication of like, oh yeah, there's this, there are people being paid salaries. There's a centralized team here. There's also the sushi token. So like, you can kind of see how this would trigger the ire of the SEC. I don't, I haven't read the details, but yeah, they are hit with a subpoena.

• 46:57Ryan Sean Adams?

  Same week. Also, Gary is going after influencers himself. Crypto entrepreneur and celebrity promoters face SEC charges. So Justin Sun was named, Lindsay Lohan.

• 47:07David Hoffman?

  Justin Sun targeted by the SEC, charged by the SEC with securities law violations. So this is like, why this is hard is like, well, yeah, Justin.

• 47:17Ryan Sean Adams?

  I mean, there are, there are definitely scammers that we like, we, we want our regulators to kind of pay attention to and check out. And, but then they also do this. So the double edged sword, I don't know if it's worth it, in my opinion.

• 47:31David Hoffman?

  Ryan, remember East Denver week, was that two or three weeks ago? And I was like, oh yeah, the SEC's got like all of these subpoenas and, and Wells notices that they're ready to fire. I said, we said, and then we said, what was it? Carpet bombing Wells notices? Those are all rumors. Here we are.

• 47:49Ryan Sean Adams?

  Well, Coinbase probably felt carpet bombed by that last, by what just happened. Here's some banker news. Banks are under pressure. The contagion is spreading to Europe. Credit Suisse. Gone under a shotgun wedding is a CNBC title. What's happening here?

• 48:05David Hoffman?

  UBS has rescued Credit Suisse. I haven't been following this story too lately, but Credit Suisse, which has been like a bank hanging by a thread ever since, for a very long time, finally getting under duress because of all the banking crisis, banking issues that are going on with the whole interest rate phenomenon. UBS is rescuing Credit Suisse. Do you know the details of what that means to actually rescue them?

• 48:28Ryan Sean Adams?

  Basically, giving them money, printing the money, government funding.

• 48:33David Hoffman?

  Sick.

• 48:34Ryan Sean Adams?

  Yeah. UBS and Credit Suisse, stocks plunged, of course. This is just the contagion spreading beyond like Silvergate, Silicon Valley Bank, and Signature.

• 48:44David Hoffman?

  Is it contagion, or is it generalized, just like distressed assets owned by banks?

• 48:49Ryan Sean Adams?

  I think when I'm talking about the contagion, I'm talking about that, is like the root cause is these distressed assets that are underwater, right? All of the treasuries that are underwater, long dated treasuries underwater on bank balance sheets, not just in the United States, but across the world and in Europe. And who has to come to the rescue? The only person that can, the person with the money printer, the Fed, Treasury, is the US government. And so that's what they're doing. That's all part of what Arthur Hayes was talking about. Also, remember the Barney Frank rumor? There's some more evidence that maybe he was right about Signature Bank. So Barney Frank, this is the Frank in Dodd-Frank, a former senator, he was on the board at Signature Bank. He claimed, he alleged that Signature was closed

• 49:34Ryan Sean Adams?

  because the FDIC was targeting crypto. That's what he claimed. And it seems like we got some more confirmation that that could be the case.

• 49:43David Hoffman?

  Oh, yeah. It was basically cut and dry. It was like, we'll acquire everything about Signature Bank, but no one's allowed to acquire any of the crypto companies, or like take them as clients. I wish I had more in my brain what that details actually were, so Bankless listener, go investigate that. But it was like cut and dry. It's like, yeah, everything else about Signature, all their customers, all their clients, everything that they own is totally fine for acquisition, except for crypto.

• 50:06Ryan Sean Adams?

  Well, it's actually, so the New York Community Bancorp Flagstar Bank is the bank acquiring Signature Bank, and that's explicitly what they said. They'll acquire, they'll assume all the cash deposits is, all the cash deposits, except the crypto company cash deposits. So it was this acquisition that was basically, they said, yeah, we'll take everything except for crypto. And there's evidence, maybe that the FDIC ordered that Signet, that the acquirer had to divest all of the crypto business. So, yeah, that again is not good, and I think the public deserves to know more about it. Speaking of this, David, the last thing we got to cover real quick is this whole Balaji bet. He thinks that

• 50:50Ryan Sean Adams?

  the US dollar is going to hyperinflate 90 days. He came out like, after last week, we recorded the roll up, and he came out with this tweet, was saying this, we had him on the podcast, because he was saying, saying some very alarming things, basically that this was a bank crisis of epic proportion. This would be the straw that breaks the camel's back, that the US dollar would hyperinflate, and approach zero, that Bitcoin would hit a million dollars, and he called a time on this, 90 day, and he put a bet out around that. Yeah, so we had Balaji on, we've been kind of like, tracking down this claim, and getting kind of the, you know, the pro side and the con side together. But I want to ask you, because we've had a whole bunch of guests on this week, I've been doing kind

• 51:33Ryan Sean Adams?

  of these emergency episodes, give me your reaction to this Balaji take. So he spent almost two hours with us. What do you think? Like, do you think he's right?

• 51:44David Hoffman?

  Yeah, people actually, we were getting some flack for even hosting Balaji. People saying, why are you guy, he's just doing this marketing campaign, he's just trying to promote his bet, like, don't, don't give into the doomerism, don't give into the hyperbole. And I'll push, of course, I'll push back against that, and I'll say that it's important to, don't This is Balaji's mistake. He's leading with the bet, which triggers a lot of people. The package, Balaji has a very, well, he's not necessarily the most coherent individual, but he's very smart. He's got a good message. The package that the message came in, people really did not like. This $1 million Bitcoin bet inside of 90 days. Balaji was, that was probably not the best way to lead with the thing that you are trying to say, although he did make that bet in his big grandiose bet.

• 52:29David Hoffman?

  If you actually want to get your learn on, if you actually want to get educated as to what Balaji is trying to say, whether you believe it or not, you need to look past that bet and hear the message that he's trying to say. We did the episode with Arthur Hayes. In my mind, Arthur Hayes's message and Balaji's message are almost synonymous. Difference in timeframe, difference in severity, but directionally completely aligned. And we are also going to host counterarguments, anti-dumerism, anti-hyperinflation perspectives. So that is also coming. But since multiple people, Balaji and Arthur Hayes, are pointing towards the same logical

• 53:09David Hoffman?

  conclusion of very significant inflation in the US dollar, that I implore you, Bankless listener, to look past the perhaps triggering 90-day, $1 million Bitcoin bet and just take in what Balaji is trying to tell you. And so I don't really have any take beyond that. I'm still in learning mode. I think we should all still be in learning mode, but that is my response.

• 53:31Ryan Sean Adams?

  Yeah, you got to listen to both sides of the argument for sure in order to make an informed opinion. If Balaji is even 5% right, like, it's a pretty big freaking deal. I guess my take is like, Balaji was more exaggerated. He put a timeframe around this. Hayes was much more like methodical and like approached this as a like a neutral trader on what he thought would happen, just as he's kind of evaluating the system. And those episodes together formed kind of like a package towards understanding what the threat vector might be in the inflationary case. Next, we're having Ben Hunt on, who I think is going to push back against a whole bunch of that. Next week, we're going to have Jim Bianco. Go on as well. Who's going to give us kind of the tradfi take?

• 54:16David Hoffman?

  And I don't No quantity, Jim Bianco.

• 54:18Ryan Sean Adams?

  Yeah, like

• 54:19David Hoffman?

  I understand Jim Bianco.

• 54:20Ryan Sean Adams?

  I don't know where we're going to go next with this, but our role in this is to like, like we say all the time, we're on the the journey with you. We are discovering this. We want to hear both sides and understand whether it's true and then decide for ourselves and have you decide for yourself. David, what do we got coming up next?

• 54:36David Hoffman?

  Coming up next, we got an update on the Euler hack update. Good news, everyone. Hopefully, things are trending at least in the right direction. We got some money back. Maybe we're getting more. We'll provide the details about that. Immutable and Polygon launching a new layer two, a Matic staking immutable flavored layer two. We'll get the details beyond that and so much more. We got some Bitcoin stuff. We got some IRS stuff, Ryan's favorite subject. We got some CBD stuff. We got some Bankless stuff. So all of this news and more as soon as we get to some of these fantastic sponsors that make the show possible. Uniswap is the largest on-chain marketplace for self-custody digital assets. Uniswap is, of course, a decentralized exchange, but you know this because you've been listening to Bankless. But did you know that the Uniswap web app has a shiny new fiat on RAM?

• 55:20David Hoffman?

  Now you could go directly from fiat in your bank to tokens in DeFi inside of Uniswap. Not only that, but Polygon, Arbitrum and Optimism layer twos are supported right out of the gate. But that's just DeFi. Uniswap is also an NFT aggregator, letting you find more listings for the best prices across the NFT world. With Uniswap, you can sweep floors on multiple NFTs and Uniswap's universal router will optimize your gas fees for you. Uniswap is making it as easy as possible to go from bank account to bankless assets across the theory. And we couldn't be more thankful for having them as a sponsor. So go to app.uniswap.org today to buy, sell or swap tokens and NFTs.

• 56:02David Hoffman?

  Learning about crypto is hard until now. Introducing MetaMask Learn, an open educational platform about crypto, Web3, self custody, wallet management, and all the other topics needed to onboard people into this crazy world of crypto. MetaMask Learn is an interactive platform with each lesson offering a simulation for the task at hand, giving you actual Practical experience for navigating Web3. The purpose of MetaMask Learn is to teach people the basics of self custody and wallet security in a safe environment. And while MetaMask Learn always takes the time to define Web3 specific vocabulary, it is still a jargon-free experience for the crypto curious user. Friendly, not scary. MetaMask Learn is available in 10 languages with more to be added soon, and it's meant to cater to a global Web3 audience.

• 56:47David Hoffman?

  So are you tired of having to explain crypto concepts to your friends? Go to learn.meta mask.io and add MetaMask Learn to your guides to get on boarded into the world of Web3. Update on the Euler hack. 3,000 Ether has been returned from the Exploiter back to the Euler Treasury, Euler Vault, which is interesting. I did not see that coming, especially after they put that Ether through tornado cache.

• 57:11Ryan Sean Adams?

  Yeah, like why?

• 57:12David Hoffman?

  I don't know. I don't know. I mean, they could be fearful of going to jail. I made a decline last week that it was definitely North Korea. It was probably North Korea, probably definitely. I guess I was wrong on that one. One transaction of 100 Ether was sent to an address of North Korean linked actors, which is confusing. And then also we have North Korea attempting to fish the Exploiter, trying to get them to basically sneakily give them their private keys, which is nuts. So like this, this has gotten from a very sad story of a very large exploit to a very confusing story of some money returned.

• 57:50Ryan Sean Adams?

  I don't know what's going on.

• 57:51David Hoffman?

  North Korea is involved trying to exploit the Exploiter. And then also importantly, the big punchline here is that using a lot of this communication is happening inside of Ethereum transaction. So people are writing data into the Ethereum transaction. And there was a message from the Exploiter to the Euler hacker saying, "We want to make this easy on all those affected. No intention of keeping what is not ours. Setting up secure communication, let's come to an agreement." So all of a sudden the Exploiter is growing a conscience or at least

• 58:23Ryan Sean Adams?

  No, come on, they're definitely, I don't think it's a conscience. I think it's definitely like something is happening in the background. But like, I don't understand, only 3,000 ETH is just a tiny fraction of the 90,000 something ETH they stole, right? Why would they?

• 58:39David Hoffman?

  I don't know. I, this is confusing. I'm waiting for more data to unfold.

• 58:43Ryan Sean Adams?

  Yeah. What's so crazy, though, is that these conversations are all happening on-chain and we can like observe the negotiation process. What a bizarre world we live in. But yeah, so that's happening. What about the IRS? What are they doing?

• 58:57David Hoffman?

  They are IRS who formalized tax treatment of NFTs as collectibles similar to other art. Is this guidance? We're getting guidance from the IRS?

• 59:05Ryan Sean Adams?

  I think so. Imagine that.

• 59:06David Hoffman?

  That's kind of cool. Is this bullish, bearish? You're the tax man.

• 59:10Ryan Sean Adams?

  It's what we would totally expect, right? Of course, the IRS treats NFTs as property, just like they would a baseball card, or like art, or you know, a classic car, or something like that. It totally makes sense. What's interesting about this, though, David, is it's in complete conflict with how the SEC wants to treat tokens and NFTs, which is like, everything's a security, right? Well, it can't be a collectible and a security at the same time, so I think that's-

• 59:36David Hoffman?

  Unless they deem baseball cards to be securities, which not putting it out of Gary Gensers-

• 59:40Ryan Sean Adams?

  You think he wants that? He wants like the Mickey Mantle classic thing?

• 59:44David Hoffman?

  Depends on how big the AUM is, if it's big enough, you know?

• 59:47Ryan Sean Adams?

  Wow. Yeah. I mean, what I would say to the Fed is like, just in general, all the Feds, like, get your story straight. You have different agencies telling us different things. And then you're like penalizing us when we don't understand what the rules even are? Absolutely ridiculous. Anyway, but, but good news from the IRS. Some guidance, some clarity. It's not that hard.

• 1:00:07David Hoffman?

  I don't know how that really materially impacts me, but okay.

• 1:00:11Ryan Sean Adams?

  Just keep doing what you were doing. It's how it affects you.

• 1:00:15David Hoffman?

  Magic Eden launches a marketplace for Bitcoin ordinals. Okay, so this was a huge problem in the Bitcoin ordinal space. We saw all of the vitriol that was pointed at Yuga Labs for doing the thing where they say, "Hey, give us all of your Bitcoin, we'll custody it, run the auction, and then give you your Bitcoins back."

• 1:00:31Ryan Sean Adams?

  Yeah.

• 1:00:32David Hoffman?

  So now we're starting to get infrastructure around Bitcoin ordinals, which means that Bitcoin ordinals has further sticking power. So like, we're a month, two point something into the Bitcoin ordinals world. More sticking power, more infrastructure, more roots being grown. Ordinals, more case for ordinals here to stay. Cautiously optimistic, I'll remain. I don't know.

• 1:00:54Ryan Sean Adams?

  I think it's great. I don't really have a take until I own a, uh, look, I was a little slower to the NFT thing too, and I'm just gonna wait until someone speaks to me. It's down pretty bad, David.

• 1:01:06David Hoffman?

  Well, it was at zero when you bought it. How can it be down?

• 1:01:09Ryan Sean Adams?

  Oh, yeah. That's true.

• 1:01:12Ryan Sean Adams?

  It went up and then it went back down again. But you know, I'm a forever turtle holder. So.

• 1:01:19David Hoffman?

  Dude, every once in a while, I'll see somebody with a turtle PFP.

• 1:01:21Ryan Sean Adams?

  No, you won't still.

• 1:01:23David Hoffman?

  Random Discord. Yeah, the Alpha Discord has a turtle PFP guy in there. And I'm like, that's Ryan.

• 1:01:28Ryan Sean Adams?

  Hey, look, they're gonna someday tiny turtles will make a comeback.

• 1:01:33David Hoffman?

  Sad news on the blockchain uptime front. No, not Solana. This time the Avalanche C chain has stopped producing blocks for over an hour. This tweet said not yet recovered, but it was recovered, I think, within two hours, I believe. So the network went down and then is now back up after an update was very quickly written and patched. I think this is the first time, or at least the first time in a long time, that the Avalanche chain was halted. Again, I think Bankless listeners who have been listening to the weekly roll up and other podcasts understand our perspectives as what it means for a blockchain to go down. It's not great. Do you want to say anymore?

• 1:02:09Ryan Sean Adams?

  It's back up, though. Hey, there's that.

• 1:02:11David Hoffman?

  So here's, here's what I was thinking about this. Like, whoa, wow, they got that chain back up really fast.

• 1:02:15Ryan Sean Adams?

  Yeah.

• 1:02:16David Hoffman?

  And then I was like, well, that just means that they were able to coordinate really, really well.

• 1:02:19Ryan Sean Adams?

  Right, right, yeah.

• 1:02:20David Hoffman?

  But then I'm like, okay, well, but if they went down for a really long time, I would also be saying that that's bad. And so like, if you're down for a long time, that's bad. If you're down for a short time, that's also bad. I guess I'm just biased against chains that go down in the first place, which has been what I've been saying for such a long time.

• 1:02:36Ryan Sean Adams?

  I mean, it's hard to call your.

• 1:02:37David Hoffman?

  Don't go down.

• 1:02:38Ryan Sean Adams?

  Not layer ones. They shouldn't be. Anyway, regulatory Governor Ron DeSantis announced legislation to protect Floridians from a federally federally controlled central bank digital currency. This is interesting, David, just some like, I guess fracturing in the United States of, you know, he's a powerful governor for sure. I mean, he's in, in the candidate pool for president for 2024. And he is saying in Florida, we shall not have a central bank digital currency. First of all, I don't know how this works. If Florida is actually able to do that and be like, yeah, we'll take the physical dollar, but we won't take the central bank digital dollar. So I don't know if this is just a.

• 1:03:18David Hoffman?

  It's kind of cool.

• 1:03:20Ryan Sean Adams?

  Can they do that? Yeah. But can they do this? Right? Like every state like Florida bucks. I mean, what do you do if it can't be cut off?

• 1:03:27David Hoffman?

  Can you regulate up as a state?

• 1:03:29Ryan Sean Adams?

  But I think it's and Balaji would probably say this, it's indicative of some fracturing in the various political alignment groups around something like a central bank digital currency. I don't think the United States will, will, will take that without a fight, at least some factions of politicians will. And I'm, I'm anxious to see this, how this, this plays out for what we'd call free crypto money systems, right? Will it be like a partisan issue where like one party is pro crypto and the other party is not? Or will it be, I mean, because I, I see Democrat, Republican, there are wins for both sides on kind of their stated platforms. Anyway, but I, I wonder if one

• 1:04:13Ryan Sean Adams?

  party or the other will kind of take the lead on advocating for, for crypto and what their intents might be. It's interesting to see.

• 1:04:20David Hoffman?

  I'm not holding my breath for the Democrats.

• 1:04:22Ryan Sean Adams?

  Yeah. Well, you know what? Some of their leaders.

• 1:04:25David Hoffman?

  Elizabeth Warren's too high up in the power struggle and she is way too anti crypto.

• 1:04:29Ryan Sean Adams?

  Very anti crypto, sadly. Um, David, we got some cool stuff going on at Bankless. One, just an update about the Green Pill podcast that we come out with. What's this?

• 1:04:38David Hoffman?

  Bankless HQ, the Bankless you're listening to, puts out too much content, so much content that we are creating the Green Pill, which we typically host on our YouTube channel. Green Pill's getting its own YouTube channel. So if you are a Green Pill fan, you got your own YouTube channel. We're managing this one on behalf of Kevin O'Walkie. So definitely go subscribe to that Green Pill YouTube channel if you are a Green Pill fan. If you don't know what Green Pill is and you like the idea of regenerative economics, global coordination, how to prevent global coordination failures, or overall are a fan of Kevin O'Walkie, perhaps listen to the Green Pill. But either way, there's a brand new YouTube channel called the Green Pill Podcast. Go subscribe.

• 1:05:16Ryan Sean Adams?

  There you go. You can find that on the RSS as well. David, this is pretty cool, man. This is a jacket. I saw you sporting in the pictures anyway, because I don't go to conferences, as you know, at ETH Denver. This is, what's this jacket called?

• 1:05:29David Hoffman?

  Oh, gosh, a Sujikan? Oh, I'm butchering this name.

• 1:05:32Ryan Sean Adams?

  Look at this, man. GQ level. This is David sporting the jacket.

• 1:05:37David Hoffman?

  Shout out to Dave Krugman for being the photographer here. Yeah, so if you are at ETH Denver, you saw me probably rocking this jacket. I'm biased here, but I will claim that it was the coolest piece of apparel at ETH Denver. And so this is being made by Metafactory in partnership with Metafactory for people that want to buy it. It is extremely rare. There is only 60 being made in production, and it is literally, Ryan, the coolest thing, the coolest piece of clothing that I own. These pictures don't show it, but it is also reversible. And so if you want to not be wearing crypto, you just want it to be blank, you can reverse it, and it's just a normal black and yellow silk jacket. Emphasis on it is the coolest thing that I own.

• 1:06:21Ryan Sean Adams?

  People can buy this now? Is that what you're saying?

• 1:06:23David Hoffman?

  It is available now, yes.

• 1:06:25Ryan Sean Adams?

  You know what this has to me? Have you ever seen that movie, Ryan Gosling movie, Drive?

• 1:06:29David Hoffman?

  Yeah.

• 1:06:30Ryan Sean Adams?

  That's it. It's the crypto version. Don't turn into a psycho and start killing all the people like he does, but...

• 1:06:37David Hoffman?

  I haven't seen the movie. Thanks for the spoiler.

• 1:06:38Ryan Sean Adams?

  Okay, sorry. Good movie, though. All right. Immutable and Polygon Labs in releases as well. They team up to expand Web3 gaming. I know we did an episode on this. Any high level you want to say?

• 1:06:50David Hoffman?

  Yeah, so, brand new ZK EVM. It is run by Polygon, Matic staking to secure the chain. But IMX from Immutable is the gas token. It is also where Immutable does all of its BD. There are Layer 3s that are available to go on this new ZK EVM Layer 2. It's a brand new Layer 2 called the Immutable. ZK EVM operated by Polygon.

• 1:07:14Ryan Sean Adams?

  So this is like a team up?

• 1:07:15David Hoffman?

  Like a

• 1:07:16Ryan Sean Adams?

  It's a team up. Okay, so Immutable was on Starkware Tech. And so you're saying, have they moved?

• 1:07:21David Hoffman?

  And it still is. That chain is still up and running. And now they are doing a generalized ZK EVM with Polygon technology with the IMX as the gas token.

• 1:07:30Ryan Sean Adams?

  That's cool. That's a big win for Polygon, I guess.

• 1:07:33David Hoffman?

  Yes.

• 1:07:33Ryan Sean Adams?

  Yeah, very interesting alliance here.

• 1:07:35David Hoffman?

  Very interesting.

• 1:07:36Ryan Sean Adams?

  Yeah, we'll see how that plays out. I know there's a whole episode on this.

• 1:07:39David Hoffman?

  Ryan and I are investors in IMX and Ryan is an advisor to Polygon.

• 1:07:43Ryan Sean Adams?

  Very true. David, Microsoft is building a crypto wallet in their Edge browser. I haven't used the Windows browser in forever, Microsoft browser in a while, but like they're getting in the crypto wallet game. It's a big freaking deal, right?

• 1:07:56David Hoffman?

  The default browser of Microsoft is getting a crypto wallet partnership with Consensus, I believe, to offer swaps between Etheruni, USEC and USDT. But yeah, I mean, that's kind of crazy. The default browser for Microsoft coming with a crypto wallet.

• 1:08:13Ryan Sean Adams?

  I think it's big.

• 1:08:14David Hoffman?

  I don't know how many people care about Edge.

• 1:08:17Ryan Sean Adams?

  Yeah.

• 1:08:17David Hoffman?

  But some people use it, I'm sure.

• 1:08:19Ryan Sean Adams?

  There's some Edge lords out there.

• 1:08:22Ryan Sean Adams?

  Sismo.

• 1:08:25Ryan Sean Adams?

  What do we got? Sismo, ZK Connect. This is about identity in crypto, in Web 3. They have just released something.

• 1:08:35David Hoffman?

  Right, so Sismo, it's ZK Identity for your on-chain footprint, if you will. So I have many, many wallets. I have PoApps in some wallet. I have different PoApps in other wallets. I have my CryptoPunk in a third wallet. I don't want all of those wallets to be connected via transactions, but I do have my identity spread across all of these wallets. ZK Connect allows you to sign ZK badges, ZK proofs, to attest to your ownership of stuff and things and PoApps or activities.

• 1:09:04Ryan Sean Adams?

  Without disclosing your address?

• 1:09:06David Hoffman?

  Without disclosing your address.

• 1:09:07Ryan Sean Adams?

  That's really cool.

• 1:09:08David Hoffman?

  Aggregate all of your wallets and all of the identity properties of your wallets together.

• 1:09:13Ryan Sean Adams?

  Yeah.

• 1:09:13David Hoffman?

  Without linking them, also without disclosing those wallets to anyone that you need to prove what your stuff is. And so they are launching, this is Sismo, they are launching ZK Connect to get this done.

• 1:09:26Ryan Sean Adams?

  That's a really good use case because you know, the only way I do it is I funnel through a centralized exchange and then it doesn't really maintain my privacy. It just makes it not public. The exchange knows which addresses.

• 1:09:37David Hoffman?

  It's not very bankless, that'd be a brother. What else do I do?

• 1:09:40Ryan Sean Adams?

  All right, yeah. Give me bankless tools, David, and I'll go bankless. Please, what more can I do?

• 1:09:45David Hoffman?

  Well, I got this thing called ZK Connect out of Sis.

• 1:09:48Ryan Sean Adams?

  Thank you. I appreciate your help on that. David, you were doing an event in Dominican Republic. This is what it is. You guys are burning socks down there or something? What's going on?

• 1:09:58David Hoffman?

  No, this was in the Pleaser Dow offices in New York. We were watching it last night. So last night, Pleaser Dow in their Pleaser House, which is their native Web 3 auction house.

• 1:10:09Ryan Sean Adams?

  This is so weird, dude.

• 1:10:10David Hoffman?

  Burned three different pairs of uni socks. I think we're coming up to a total of $160,000. Why did they do this? Because they are taking the ashes of these uni socks and putting them into uni blocks, which is these little cubes. So you're gonna have like a necklace with cubes of ashes of uni socks. And there are, I think, 2,000 of them. And so they were sold in this Web 3 auction house. Hayden Adams showed up to talk about... One of the pairs that was burned was Hayden Adams' actual uni socks, the ones that he wore. He said he doesn't wear anymore because they just soaked up all of his stink.

• 1:10:46Ryan Sean Adams?

  That is so great.

• 1:10:47David Hoffman?

  I shit you not.

• 1:10:48Ryan Sean Adams?

  Is this peak crypto culture? I don't even know what this is. I don't know what to do with this. Why are these socks worth $160,000 freaking dollars?

• 1:10:56David Hoffman?

  Because they're associated with UniSwap. They were dropped at the same time as the UniSwap token. Also, Mike Damaris is just the big meme propagator of uni socks.

• 1:11:05Ryan Sean Adams?

  He's a...

• 1:11:06David Hoffman?

  He's a big fan of...

• 1:11:07Ryan Sean Adams?

  One of the founders of the Rainbow Wallet.

• 1:11:08David Hoffman?

  Rainbow Wallet, yeah. And so he bought a bunch of uni socks, NFT tokens, that's on a bonding curve.

• 1:11:14Ryan Sean Adams?

  He's a socks influencer.

• 1:11:16David Hoffman?

  You get an NFT if you burn the token. If you burn one token, you get to claim the socks. Because there's only 2,000 of them, and because it was the first of its kind, these socks ended up going for tens of thousands of dollars. He also propagated the meme, "Redeem, you cowards." As in, like, take your ERC 20 token, burn it, claim your uni socks, so you can have your $30,000 pair of socks and wear them. But the idea is like, it pumps up the price of the uni socks, because it's a fun little, like, economic game. Anyways, Pleaser House is... The whole production quality of this thing was off the charts. Had this host, Ali Weiss, who I actually went to college with, just roundabout fun fact, doing this like show of this like this web three auction house, this native crypto culture auction

• 1:12:00David Hoffman?

  house. And dude, so many people were in the chat participating, like Mike was there, Hayden was there, Frog Monkey from formerly Bankless, now Uniswap fame was there, Will Price was there. It was like a who's who of Ethereum DeFi. It was, it was pretty cool. It was pretty cool. The production was insane, dude. It was really, really, I'm really, I'm also a member of Pleaser now, so I'm biased. But I thought, I thought they killed it.

• 1:12:22Ryan Sean Adams?

  There you go. Burning socks. I don't know why, but they're doing it. Warp Cast. All right. This is Farcaster, Dan Romero's Protocol. We had him on the podcast. Fantastic. It's been on mobile as an app, but now there's a web version, which is pretty awesome. Go check that out. Decentralized social networks is going to be a big theme over the next few years, we think. And that is one of the leading ones. Also Ledger is combining efforts connectivity to build a wallet? Is that what I'm looking at, David?

• 1:12:52David Hoffman?

  Browser extension. So they have entered the browser extension game. Everyone's getting a browser extension these days. MetaMask, of course. Coinbase Wallet has a browser extension. GameStop has a browser extension now. Xerion has a browser extension. Now Ledger has a browser extension. I know of one more wallet that's coming with a browser extension. Everyone wants a browser extension these days.

• 1:13:11Ryan Sean Adams?

  Yeah. That's great. I'll take more. More competition. Good. Ledger can certainly do it. Well, they got the hardware behind it. It'd be really great to connect directly into that. Blockworks has released a Grant Farm. So this is a crypto grant directory. So if you're looking to see what grants are available, you can go to blockworks.co/grants and go check that out. Anything more on this?

• 1:13:34David Hoffman?

  It's like a grant aggregator. Every single, not every single, many, many protocols have grants out there. This is Grant Farm from Blockworks. It's just a place to aggregate all of the various grants that are out there. So really cool resource. Nice job, Blockworks.

• 1:13:48Ryan Sean Adams?

  Yeah. Let's talk about the big raises this week. This is the first one, David. In a AAA title set gaming raise here. What are we looking at?

• 1:13:58David Hoffman?

  Yeah, so if Bankless listeners aren't familiar with Eve Online, the creators of Eve Online, which is apparently called CCP Games, has raised $40 million from A16Z to build a blockchain-based MMORPG set within the universe of Eve Online.

• 1:14:14Ryan Sean Adams?

  No way. That's big, man. Like Eve is one of the OG MMORPGs.

• 1:14:21David Hoffman?

  Yeah, with like real simulated economies. And so like it's a natural fit to put the Eve economy on a blockchain. And so I think people are very, very excited about this. Even Palenia, who's very hard to please these days, has said positive things about this. So when you know that you please Palenia, who's got the highest bar in crypto of legitimacy, you know you're on to something. So that's pretty cool.

• 1:14:44Ryan Sean Adams?

  What does Palenia say about it?

• 1:14:46David Hoffman?

  That it actually makes sense. It's using blockchain tech that actually makes some sense.

• 1:14:51Ryan Sean Adams?

  Now, the thing with like a great game, triple A game, is it takes some time to build. So this is a funding announcement. It doesn't mean it's releasing anytime soon. We could be like three, three years plus away. But you don't have to wait three years to get a job in crypto, do you, David? Because we have the Bankless Jobs Board here. I'm showing it, bankless.pallet.com. Let me read a few. A marketing manager at Rise, a sales development representative, these are non-technical, at Rise, Uniswap Labs needs a senior product designer, an application security engineer, and a senior mobile engineer. There's a whole bunch more. You can read about them on the Bankless job boards. And get that in your email.

• 1:15:30David Hoffman?

  There's alpha in the Bankless Jobs Board. We had, there was a Uniswap Mobile Web Dev Job Board months ago, before they introduced the, there's, there's alpha on the Bankless Jobs Board.

• 1:15:39Ryan Sean Adams?

  Yeah, get to see who's hiring and get that in your inbox, guys. We've got a lot more coming up, David. What are we in for?

• 1:15:45David Hoffman?

  Questions from the nation. We got two different questions from the nation. The differences between Layer 3s on optimism and Arbitrum. We got a Bitcoin versus Ethereum take from Fiscanties. And then we got Ryan and I are bullish on, as well as a really good meme of the week. Not actually a meme, still really funny. But all of that stuff and more is coming right after we talk to some of these fantastic sponsors that make this show possible. Ethereum, the number one wallet on Solana is bringing its millions of users and beloved UX to Ethereum and Polygon. If you haven't used Phantom before, you've been missing out. Phantom was one of the first wallets to pioneer Solana staking inside the wallet and will be offering similar staking features for Ethereum and Polygon. But that's just staking. Phantom is also the best home for your NFTs.

• 1:16:27David Hoffman?

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• 1:17:11David Hoffman?

  producing flourishing DeFi and NFT ecosystems. With a recent addition of Arbitrum Nova, gaming and social dApps like Reddit are also now calling Arbitrum home. Both Arbitrum One and Nova leverage the security and decentralization of Ethereum and provide a builder experience that's intuitive, familiar, and fully EVM-compatible. On Arbitrum, both builders and users will experience faster transaction speeds with significantly lower gas fees. With Arbitrum's recent migration to Arbitrum Nitro, it's also now 10 times faster than before. Visit arbitrum.io, where you can join the community, dive into the developer docs, bridge your assets, and start building your first app. With Arbitrum, experience Web3 development the way it was meant to be: secure, fast, cheap, and friction-free.

• 1:17:55Ryan Sean Adams?

  Questions from the nation. This is a question for David. Hello, David. Could you help me understand how hardware wallets work with browser wallets? Oh, we were just talking about that. For example, I was able to connect my ledger to Metamask yesterday. How does this work? How does Metamask know or store the private key for my ledger to function in this way? That is from Atadzoo. I think I pronounced their name correctly, from the Bankless Nation Discord. David, how do browsers and hardware wallets interact? Browser extensions interact? Tell us about that.

• 1:18:26David Hoffman?

  Yeah, super important question. Okay, why do we have hardware wallets in the first place? Hardware wallets, the actual physical hardware of a hardware wallet will never allow the private key to leave its hardware, leave its hardware. It is a secure enclave. It cannot leave. You don't even know the private key to your wallet because you are a liability, because you are human. So hardware wallets are designed to never let the private key out. You have your seed phrase and you can derive your private key from that, but your hardware wallet will not allow your private key to escape. That is the point. A browser extension wallet or a software wallet is like a virtual hardware wallet, but it is stored on the computer. So there is a risk dependency there,

• 1:19:11David Hoffman?

  especially if your computer is connected to the internet. And so your MetaMask, your browser extension, it's like a virtual hardware wallet. It tries to contain its, the private key inside of the software. But by the nature of because it's on the computer, it is not as contained as a hardware wallet. Now you can plug your Ledger into MetaMask or now into Ledger's own browser extension and others. And that allows MetaMask to connect to all the DeFi apps that are out there. So MetaMask is kind of like a distribution connection service to all the DeFi apps that allows your hardware wallet to connect to these things. But it doesn't have the hardware wallet level security. So, does that make sense?

• 1:19:51Ryan Sean Adams?

  Yeah.

• 1:19:51David Hoffman?

  I feel like that makes sense.

• 1:19:52Ryan Sean Adams?

  Totally. Makes sense to me. And you know, one general rule is if you're going long-term cold storage, that's a hardware wallet. If you're more active, then maybe a browser extension is okay for those private keys. And smaller sums in the browser extension, larger sums in the cold storage where it's more secure.

• 1:20:10David Hoffman?

  MetaMask will actually allow you to extract your private key. So in MetaMask, you can actually go and tell MetaMask, hey, show me my private key. And then you can go and copy that private key and load it up into a different wallet. In my head, I have done this a few times for different circumstances. When I've extracted my private key out of MetaMask, I know that I have done that for that particular wallet. And so I flag it in my brain saying like, I've now exposed this private key to the internet. And it is now no longer as secure as another MetaMask wallet that I haven't done that in, which is also not as secure as an actual hardware wallet. And a hardware wallet won't even let you do that at all in the first place. So there's always like different levels of private key security. And you should understand them in your head.

• 1:20:54Ryan Sean Adams?

  Totally. Uh, here's a question from Jacks on the Dev. What's the difference between building an L3 on Arbitrum versus Optimism? Heard a lot about the OP stack in the roadmap, but wasn't aware that Arbitrum had that option.

• 1:21:06David Hoffman?

  Yeah, Arbitrum has that option as of recently. This is in tandem with the Arbitrum token drop is that they are launching their layer three surface area. Uh, and so this is new to Arbitrum. What is different is that you can take the Arbitrum code and you can deploy our another Arbitrum chain on top of the Arbitrum layer two freely and independently. But if you deploy an Arbitrum chain that settles directly to Ethereum, you need to get DAO approval of that per the open source, per the license of the Arbitrum code. Optimism does not have that restriction. Our optimism is like, like, yo, please fork our code base. Please copy it. Cambrian explosion of OP stack chains left and right. Pew, pew, pew, pew. OP stack chains everywhere. No restrictions on being able to fork and deploy an OP stack chain.

• 1:21:48David Hoffman?

  So the main difference between these two things, other than the differences between the code, although optimism and Arbitrum are trying to largely become the same thing, which is Ethereum synonymous layer two. The main difference is the license and kind of the philosophy behind these different chains. Arbitrum is kind of like more commercial, I'll say. And our optimism is more indie, more developer indie. Uh, you gotta, you gotta get to get DAO approval to fork the Arbitrum code. Optimism wants you to fork their code as much as possible. Uh, and that's kind of the, the second order effects of what that means are, that could be a whole entire episode, but that's kind of the gist of it.

• 1:22:23Ryan Sean Adams?

  Here we go, some takes of the week from Fiscanties is talking about Bitcoin versus Ethereum. This looked like AI-generated graphics, but one looks like this kind of stoic picture of, I don't know, a Greek philosopher.

• 1:22:37David Hoffman?

  Ancient philosopher, yeah. Kind of reminds me of the Da Vinci Man in the circle and he was like balanced a little bit like that.

• 1:22:44Ryan Sean Adams?

  It's Renaissance, it's principles, it's like deep, it's foundational, it's immutable. This is like, you know.

• 1:22:51David Hoffman?

  Ancient, ancient, I think is a great word, yeah.

• 1:22:54Ryan Sean Adams?

  And this is the AI depiction of Ethereum. How do you describe this image?

• 1:22:59David Hoffman?

  Yeah, one part human, one part AI, definitely on the frontier, a little bit of Cyberpunk's 2077, I think, is in here. Definitely like one part computer, definitely futurist, definitely young as well, I would say. Rather than ancient, I would say, say young and not yet fully manifested, I would also say that. I just like the, I like the artist. Artists, we talk about the future. Artists, Ryan, are always on the future more than the rest of the world. And so I like the actual like idea of illustrating what these things are via art. Sorry for the podcast listeners that aren't seeing these visuals.

• 1:23:36Ryan Sean Adams?

  Yeah, but you can check them out on YouTube. This is a take from Anthony Sisano, "Creating a better money is not enough. We need to create a better financial system that serves everyone in a fair, transparent and decentralized way." That's Ethereum. So a lot of, I guess, maybe traction on the Bitcoin narrative side of things. And Anthony is saying, "Hey, it's not enough to have a better money. We need a whole banking system that is bankless that is associated with that money." I'd probably echo that sentiment. What's your take on this?

• 1:24:06David Hoffman?

  I think this is coming in response to my whole Bitcoin for war and Ethereum for peace.

• 1:24:11Ryan Sean Adams?

  Oh, he was talking to you?

• 1:24:12David Hoffman?

  Yeah, so, so he hit me up and he was like, "Dude, you are so wrong about that." And I'm like. I know, I know you think that Anthony, and I think he's right. I think he's right. I think the case for Ethereum also for war is also very strong. And I think Anthony would say that like Ethereum is the like, like you, Ryan. Ethereum is the best suited blockchain for a wartime environment based off its raw fundamentals. And he, Anthony refuses to get caught up in like narrative war games and will always go back to the fundamentals very, very quickly. And so Anthony and others, I think, are asking for an Ethereum for wartime type of narrative to emerge. And so that's what this is.

• 1:24:51Ryan Sean Adams?

  Yeah, I just still always think that the Bitcoiners will do this better because they'll have like a Bitcoin and guns type of approach to it. And like, what's Ethereum and rainbows?

• 1:25:00David Hoffman?

  They don't have like layer twos and NFTs and like DeFi stuff to get distracted by. And so what do they have their time and energy to spend on? Narrative.

• 1:25:08Ryan Sean Adams?

  Mean narrative.

• 1:25:09David Hoffman?

  Bitcoin innovates on narrative.

• 1:25:11Ryan Sean Adams?

  Written word.

• 1:25:12David Hoffman?

  Ethereum innovates with code.

• 1:25:13Ryan Sean Adams?

  Yeah. All right, David, at that point in the episode, I got to ask you, what are you bullish about this week?

• 1:25:17David Hoffman?

  Ryan, I'm just bullish on crypto, man. SEC is going to break. In the same way Doquan broke, the SEC is going to break. They went too far, too fast, too high, flew too far to the sun. The Fed is signaling a pivot. The end of rising interest rates is here. We have the bank term funding program, which is where we start to issue money once again. Where did this last bull market come from? COVID stimmys. The BFTP is another stimmy source. So we have the powers that be retreating, even though they're coming in very hot, they're also ready to retreat. So that's bullish. Again, we are faced with a banking crisis and I've said this before, but it's been a while, so I'll say it again.

• 1:25:59David Hoffman?

  Crypto is slowly and slowly becoming ready to accept mainstream society. Mainstream society is becoming ready to accept crypto. We are meeting in the middle, closer and closer and closer. And so this is happening along with this banking crisis. People are understanding this. We are getting our layer twos. We have two ZK EVMs, Ryan, launching in the next five days. That is the way that we make crypto things look and feel like fintech. The time, it seems to be crypto's time. It's been crypto's time for a while. I will say it always is crypto's time. But there's just more and more evidence that we are shaping up to be just, what am I bullish on? Crypto. Like it's, you can see the writing on the wall.

• 1:26:41Ryan Sean Adams?

  Yeah, I echo some of that. I think the banks are falling apart and we're seeing in the midst of that layer two shipping. And let's remember what layer twos are and what Ethereum is. Is this promises to be a bankless financial system. It is the antidote for the bank failures. It's, you know, trustless, verifiable code where you can see all of the assets, what secures them, and everyone can be their own bank. You can go bankless. The infrastructure hasn't been ready up to this point. This is the broadband moment of building that banking infrastructure, and it's coming at such an interesting time as the banks in the traditional world are having like trouble, and this new banking system is becoming available for them. Arbitrum Token,

• 1:27:21Ryan Sean Adams?

  ZK Sync, Era, Polygon, ZK EVM, and like all this in the last seven days and like I guess, you know, a couple of days from now too. One other take I'll maybe share is I think that this Bitcoin narrative that probably sounds crazy to some of you listeners, which is like, you know, the banks are dead, Bitcoin is the only way out, get to the lifeboats, quick, quick, quick. That probably sounds hyperbolic to many listeners. And I understand that. I also understand like past runs where that narrative is kind of the seed to understanding, like in order to, in order to, I still believe that Bitcoin is very much a gateway drug to Ethereum,

• 1:28:02Ryan Sean Adams?

  because in order to actually understand the concept of digital scarcity and digital money and money over internet protocol IP, like Bitcoin is a core asset to actually understand. And as the banks are failing, and then the narrative, however shrill it might seem to you, is propagating via Bitcoiners, I think what comes next is we have a season of that. We might have like a Bitcoin run up on that narrative. And then what comes next is this epic flight to a new trustless financial system on Ethereum. And I think we might have a Bitcoin narrative, like run for a while, but that gets everyone exposed to this concept of digital scarcity and digital money. And then that will open the gate for them to be gateway drugged into Ethereum

• 1:28:45Ryan Sean Adams?

  and layer two as a new bankless money system that they can now call home. Oh, Wells Fargo, Has failed me. The unit of account has inflated. Well, I have this browser extension that I can use.

• 1:28:59David Hoffman?

  Aren't that crazy.

• 1:29:00Ryan Sean Adams?

  Right. It just opens the door. So I understand like sometimes you're like, ah, the Bitcoiners are crazy. Like it sounds crazy. It's happening. Maybe they're gleeful at this, but I think that the net result is we get that wave, that narrative wave wash over us. It will prime the pump to get people ready for the next wave, which is be your own bank. Take responsibility of your private keys and the property rights that that is entailed to you. And like, we got layer twos ready to receive the world, hopefully. Well, they're not ready yet, but they're getting a lot closer. And that's what I'm bullish on this week.

• 1:29:33David Hoffman?

  I'm also bullish.

• 1:29:34Ryan Sean Adams?

  Wow. Wow. Wow. Meme of the week, David, what are we looking at here?

• 1:29:38David Hoffman?

  The week. This is the first meme of the week, I think, I think that we've had. That's actually not a meme.

• 1:29:43Ryan Sean Adams?

  It's an accidental meme.

• 1:29:45David Hoffman?

  It's an accidental meme. This is just in Belgium to require all cryptocurrency ads to state the only guarantee in crypto is risk. Simultaneously, we are having a banking crisis. And apparently in Belgium, if you are a crypto ad, you have to disclaim that the only guarantee in crypto is risk.

• 1:30:06Ryan Sean Adams?

  That is hilarious.

• 1:30:07David Hoffman?

  Crypto assets are doing better than like the banking sector index. If you take away the big banks like only, only guarantee. I actually also guarantee you bankless listener, in addition to risk, you will also have fun.

• 1:30:22Ryan Sean Adams?

  That's right.

• 1:30:23David Hoffman?

  Lose money, but you will have fun losing.

• 1:30:25Ryan Sean Adams?

  You might. There, there, there could be risk, certainly. Actually, I like that. The only guarantee in crypto is risk. Like I would wear that on a T-shirt, honestly. Guys, we have a moment.

• 1:30:33David Hoffman?

  Guarantee in life is risk.

• 1:30:34Ryan Sean Adams?

  Yeah, though, yeah, you're guaranteed to have risk no matter what.

• 1:30:39Ryan Sean Adams?

  Guys, we have a moment of Zen coming up. I think you'll appreciate this one. David liked it. I was worried he'd be like, not like my dad humor, but like it's, it's for everyone.

• 1:30:47David Hoffman?

  People in this, in this scene. So know that. And you might want to watch the YouTube.

• 1:30:51Ryan Sean Adams?

  All right, go check that out. Otherwise, I'll give the risk and disclaimers. Guys, thank you for joining us. Crypto is risky. Maybe I'll put it like the Belgian ad. The only guarantee in crypto is risk, but we are headed west. This is a frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.

• 1:31:13Speaker 02

  You owe me twenty. Well, here's ten, I'll owe you ten. Uh-uh, you owe me twenty. Here's ten, I'll owe you ten. Here's the ten I owe you. Here's the ten I owe you. Here's the ten I owe you. Good, now we're all even.