10 Predictions for 2023 with Ryan & David

Tune in to hear Ryan and David share their 2023 crypto predictions on all major areas of crypto: Bitcoin, Ethereum, prices, Alt L1s, L2s, NFTs, regulation, and so much more. Also, major-major-major Bankless alpha leak towards the end of the show that you will not want to miss. Trust, anon. For the last time this year, Happy New Year. ------ Osmosis | Your Gateway into the Cosmos Ecosystem www.osmosis.zone/bankless http://www.osmosis.zone/bankless ------ JOIN BANKLESS PREMIUM: https://newsletter.banklesshq.com/subscribe ------ BANKLESS SPONSOR TOOLS: KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://bankless.cc/kraken UNISWAP | ON-CHAIN MARKETPLACE https://bankless.cc/uniswap ️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum EARNIFI | CLAIM YOUR UNCLAIMED AIRDROPS https://bankless.cc/earnifi ------ Timestamps: 0:00 Intro 6:45 Bitcoin https://buybitcoinworldwide.com/halving/ https://nostr.com/ 16:20 Ethereum https://twitter.com/protolambda/status/1608870249704861696 https://twitter.com/protolambda/status/1608870266582749191 https://twitter.com/protolambda/status/1608870312090955777 https://twitter.com/protolambda/status/1608870317430308865 https://ultrasound.money/ 25:22 Prices https://www.kraken.com/prices/bitcoin?quote=usd&interval=1w https://www.kraken.com/prices/bitcoin?quote=usd&interval=1w https://www.kraken.com/prices/ethereum?quote=usd&interval=1w https://www.kraken.com/prices/ethereum?quote=usd&interval=1w https://www.kraken.com/prices/ethereum?quote=btc&interval=1w https://www.kraken.com/prices/ethereum?quote=btc&interval=1w 34:20 Alt L1s https://www.coingecko.com/en/categories/smart-contract-platform 40:10 L2s https://www.coingecko.com/en/coins/polygon https://www.coingecko.com/en/coins/optimism https://arbitrum.io/ https://www.coingecko.com/en/coins/starknet https://l2beat.com/scaling/activity https://twitter.com/ercwl/status/1609804900472619009 50:14 NFTs https://nftpricefloor.com/ 58:24 CeFi 1:04:55 SEC + CFTC Standoff https://imgur.com/3ixtonT https://www.cftc.gov/PressRoom/PressReleases/8590-22 https://www.coindesk.com/business/2022/12/13/us-judge-in-ooki-dao-trial-orders-cftc-to-serve-original-founders-with-lawsuit/ 1:10:50 Bankless https://www.youtube.com/channel/UCCRxYlYOmLE2l5wxs3ckJtg 1:16:05 What Ryan and David are Bullish on 1:22:26 Closing & Disclaimers ------ Resources: Bankless 2023 Predictions https://newsletter.banklesshq.com/p/bankless-2023-predictions ----- 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?

  Welcome to another episode of State of the Nation. We've got our 10 predictions for 2023. David prepared this list. I'm just along for the ride. And just to give you some insights into kind of the world of live streaming, we just barely got this live stream up, David, right? You had a software update and it kind of wrecked your live stream setup, but down to the wire, we made it here for you guys.

• 0:21David Hoffman?

  Yeah, just a few minutes late, but yeah, made a software update to OBS, absolutely broke everything and then fixed it right at the last minute. Yet here we are. The stream must go on. And there's a lot of things to talk about for 2023, and that is what we are going to be covering today on the episode. We've got 10 subjects, 10 things we want to cover, the big categories that you all know and love, Bitcoin, Ethereum, alt layer ones, uh, layer twos, uh, prices, NFTs, regulation. We've got 10 categories, a couple of ones I haven't mentioned yet, that we just want to give our predictions for what they look like moving forward into 2023. Some of them will have more clear predictions than others, but I think we can look forward at the year ahead,

• 1:03David Hoffman?

  pull back some lessons that we, that Ron and I experienced going through the 2018 to 2020 bear market, uh, and apply them to the current state of crypto as it stands today. So we're going to go and run through all of these major categories of crypto, just to see what lies ahead for us in 2023.

• 1:18Ryan Sean Adams?

  This is going to be raw thoughts, guys. It's going to come at you quick, so I hope you're ready. Before we get in, got to talk about our friends and sponsors over at Osmosis. Osmosis is an app chain in the Cosmos ecosystem. The starter way to think about Osmosis is it's kind of a, the uniswap of Cosmos, the Cosmos ecosystem. It's its own independent app chain, of course, but it allows you to trade Cosmos ecosystem assets, swap one for another. But it's not just that. There's also the ability to look at all of the assets in your portfolio, has a wallet type feature, has the ability to stake, also the ability to vote. So it mixes some, uh, you know, other DeFi hub type tools into, into the system. And if you're coming from the, the world of Ethereum,

• 2:04Ryan Sean Adams?

  I think you'll notice a pretty easy user experience in that there is not MetaMask, but a wallet called Kepler, which is MetaMask-like that you can download and use it to get started. I recently did this, David. I'm pretty impressed with Osmosis and the Cosmos ecosystem and what these guys are brewing up. So it's just a fun little adventure for 2023. I want to do more of these as we get into this year.

• 2:27David Hoffman?

  Yeah, I'm consistently learning that the crypto's best UX actually is not inside of the Ethereum ecosystem, from what I've learned about the Solana ecosystem and now also the Cosmos, Osmosis, Kepler Wallet and all that stuff is that other people have better UX than what I've experienced with MetaMask and Ledger, let me tell you. But, and so just to really drive this point home, Osmosis is an app chain on the Cosmos, in the Cosmos ecosystem, there's also the Cosmos Hub, which is another app chain. So that is a different way of operating that if you are only used to the Ethereum ecosystem, that you'll have to learn about and how to navigate different app chains, not unlike Layer 2s on Ethereum, but something to get used to as well.

• 3:12David Hoffman?

  Ryan, we have so much to cover in this episode. We're going to start with Bitcoin, and I actually had to ask my Bitcoin friends about what is ahead in the world of Bitcoin, because I don't necessarily feel like I am equipped to answer that question. And so I've pulled in some extra help to talk about Bitcoin, but then we're going to go into the broader subjects that the Bankless Nation knows and loves, alt Layer 1s, Ethereum, Layer 2s, etc. So all of that and more is coming up right after we talk to some of these fantastic sponsors that make the show possible. 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.

• 3:53David Hoffman?

  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, 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...

• 4:37David Hoffman?

  Sign up with Kraken at kraken.com slash bankless. Hey, Bankless Nation. If you're listening to this, it's because you're on the free Bankless RSS feed. Did you know that there's an ad-free version of Bankless that comes with the Bankless Premium subscription? No ads, just straight to the content. But that's just one of many things that a Premium subscription gets you. There's also the Token Report, a monthly bullish, bearish, neutral report on the hottest tokens of the month. And the regular updates from the Token Report go into the Token Bible, your first stop shop for every token worth investigating in crypto. Bankless Premium also gets you a 30% discount to the Permissionless Conference, which means it basically just pays for itself. There's also the Airdrop Guide to make sure you don't miss a drop in 2023. But really, the best part about Bankless Premium is hanging out with me,

• 5:22David Hoffman?

  Ryan, and the rest of the Bankless team in the Inner Circle Discord only for Premium members. Want the alpha? Check out Ben the Analyst's DGEN pit, where you can ask him questions about the Token Report. Got a question? I've got my own Q&A room for any questions that you might have. At Bankless, we have huge things planned for 2023, including a new website with login with your Ethereum address capabilities, and we're super excited to ship what we are calling Bankless 2.0 soon TM. So if you want extra help exploring the frontier, subscribe to Bankless Premium. It's under 50 cents a day and provides a wealth of knowledge and support on your journey west. I'll see you in the Discord.

• 5:58Ryan Sean Adams?

  All right. I hope you guys enjoyed hearing about Kraken, our strategic sponsor in the exchange category for 2023. It's our recommended exchange going into this year. David, we've got the 10 predictions for 2023. I'm going to read out all of the categories. We're going to cover it really quick and then we'll hit them one by one. Number one, we're going to talk Bitcoin. Number two, Ethereum, then prices. Number four, alt-layer ones, layer twos, of course, then NFTs, DAOs, C-Fi, that is centralized exchanges. Number nine, the CFTC and the SEC standoff. And number 10, some of our thematic predictions for 2023. Editor's choice, Ryan's and David's thematic predictions. I'm going to have to think of mine before we get to the end here, I think, David. And we are long for the ride, sir.

• 6:42Ryan Sean Adams?

  Why don't you kick us off with, we got to start with old granddaddy Bitcoin, who started this whole crypto movement. Hats off to you Bitcoin. Without you, we wouldn't be here. What are the predictions for Bitcoin in 2023? What's in store for us, David? And we're looking right now at a Bitcoin halving clock. I'm gonna read this out. 441 days, 22 hours, 51 minutes, and 50, 50 seconds till the next Bitcoin halving. What does this mean?

• 7:12David Hoffman?

  Well, okay, so people will notice that that is more than one year away, 441 days. But if we pay attention to the last time a Bitcoin halving happened, there is this chant that gets chanted and it starts to, starts slowly and then it starts to bubble up. And then it just becomes dominant throughout like crypto Twitter, or at least Bitcoin Twitter at the time, which is the halving is not priced in. And so my big prediction is in around Q3, Q4 of 2023 of this year, we are going to start to hear the halving is not priced in, the halving is not priced in. Because the 2024 halving date is scheduled around March. It's probably going to creep up earlier than March because that's kind of what halvings do.

• 7:57David Hoffman?

  They tend to accelerate. People think it's every four years, but it's actually quicker than four years because hash rate for Bitcoin is up only. But I think that is something to expect towards the end of this year is you are going to start to hear the words, "The halving is not priced in." You remember this time in four years ago, Ryan, when that was just dominant?

• 8:14Ryan Sean Adams?

  I do, and I'm curious. Okay, so how many halvings have you been here for? You remember the 2021, and that was certainly dominant. That was the chat leading, chant leading up to this. Do you remember the 2016 one?

• 8:24David Hoffman?

  I was not here. I was not here for the 2016 halving.

• 8:28Ryan Sean Adams?

  I was partway here. I wasn't all the way here, but I was partway here. This was kind of early days of Ethereum. And then prior to that, David, it goes dark for me. I guess the one prior to that must have been in 2012 or something at that point in time. But for folks that aren't familiar, this is when the supply issuance of Bitcoin gets cut in half. Hence the halving. And traditionally, David, as you've been saying, that has been very bullish.

• 8:57David Hoffman?

  Right.

• 8:58Ryan Sean Adams?

  Bitcoin price. At least the narrative of Bitcoin price, because what is Bitcoin celebrated for? What is it known for? What is the one use case and thing that it does? It has 21 million Bitcoin. 21 million units, yes. Right, and that there will only ever be 21 million. And so that that is at least the promise of the Bitcoin network. And that's what's coded in the algorithm. Of course, that is all, at the end of the day, bankers would say socially enforced at some level. But we are approaching less and less issuance per year. It gets cut in half every four years. Now, in 2020, it felt like a lonely thing to say. But I know some of this were saying, some of us were saying, okay, Bitcoin community, the halving is coming up. We're excited about that.

• 9:40Ryan Sean Adams?

  Algorithmic supply issuance, yay, not central bank backed. That's great. Take the humans out of the money. That's wonderful. But also, keep in mind, Bitcoin community, that when you halve your issuance, you also halve your security budget. And the security budget happens to be a very important thing for your blockchain, because that is how a blockchain actually defends itself and provides settlement assurances. Security budget comes from primarily issuance in Bitcoin. It's like 95% to 99% issuance, and a small fraction is transaction fees. That is how you pay the military to provide the defense service around Bitcoin.

• 10:22Ryan Sean Adams?

  The military for Bitcoin, the analogy being miners, proof of work miners. So while you're excited about getting closer to 21 million and cutting off your issuance and less supply available in the market, now I start to wonder if the 2024 halving, the community starts to wake up and realize, ooh, um, our security budget is going down a lot. And can we really afford this? Do you think that'll be a new conversation and a new dynamic that we didn't see in the last decade?

• 10:51David Hoffman?

  It's going to be interesting because that is where you mean the last happening. That is where we saw some of these hardcore Bitcoiners start to consider that angle. Hazu being one of the, one of the big ones that was previously a very hardcore Bitcoiner that started to come around to the idea of a security budget happening. I do not think that this happening is the last, is the happening that triggers a weakness in Bitcoin's security. I think we have

• 11:15Ryan Sean Adams?

  You still see FOMO?

• 11:16David Hoffman?

  I still, yeah, yeah. I still think like there's Bitcoin's lack of security is a number of happenings away. And so I think that, I mean, just to play it forward how it happened last time Bitcoiners start changing the happening is not priced in. Ethereum people are like, your guys' security budget is cut in half. I think it's fundamentally bullish either way. For the same reason that we are bullish on the supply of ether and ultrasound money. It's the same reason to be bullish about Bitcoin. But I don't want to hang on to happening too much because again, like this is actually in 2024. And so not happening this year is just like, you're going to start to see this rumbling. And so I asked my, my Bitcoiner friend CK, my, my podcast co-host before you, Ryan, what to watch out for in the world

• 11:57Ryan Sean Adams?

  Your ex.

• 11:58David Hoffman?

  My ex podcast co-host, yeah. And what to watch out for in Bitcoin in 2023. And his answers were Bitcoin mining and this thing called Noster. And we'll, we'll take those one by one, but I think the things to watch out for, for Bitcoin and when it comes to Bitcoin mining is the consolidation of Bitcoin miners into, into either more central, central, large entities or into newer entities that are also energy production, energy, energy producers. And so if you look around, actually, I was doing a little bit of research before the show. If you look around, a lot of energy producers across various countries are also becoming Bitcoin miners. And now that could actually, if you believe the, the Bitcoin

• 12:43David Hoffman?

  proof of work thesis, lead to integration of Bitcoin into the real world power supply, the, and the decentralized power grid and actually lead to the decentralization of Bitcoin mining, if, if that is the trend. The other trend it could be is that a lot of these weaknesses in the current mining ecosystem, a lot of for the Bitcoin, the big, big Bitcoin miners lead to further consolidation, centralization. That is something to watch out for. That is a theme to watch out for. The other thing to watch out for is Noster, which is something that Eric Wall is predicting just does not gain any traction. But this is the social media for the Bitcoin world, for Bitcoiners. Social media by Bitcoiners for Bitcoiners. This is something I'm not very familiar with, but this is gaining a ton of attention

• 13:28David Hoffman?

  in the Bitcoin world, and it is basically an implementation of sort of decentralized social media, but using Bitcoin as the settlement layer for data. And so this is something that is gaining steam in the Bitcoin world.

• 13:41Ryan Sean Adams?

  Really?

• 13:42David Hoffman?

  Yeah.

• 13:42Ryan Sean Adams?

  I wonder how this works. So they're actually

• 13:46Ryan Sean Adams?

  how are they doing that without Bitcoin being kind of an expressive base layer?

• 13:49David Hoffman?

  I don't know. I don't know. I don't know. But this is they've got a bunch of apps and this is something to probably to explore if you are look chess or like settlement estrances with chess as in like I make my piece and I'm I don't know why you want to put that data on the blockchain, but this is something that is being pioneered out of the Bitcoin world.

• 14:09Ryan Sean Adams?

  It's really interesting that mining is a thing that hardcore Bitcoiners are really excited about. To me, that's just not an area of interest for me, like personally. And I just like, what I see is a lot of, you know, the consolidate, did you see someone tweeted out, I think this was Evan Van Ness, that just, just, just before the end of the year last year, over 50% of for the, for the last week of blocks or something of all Bitcoin blocks have been produced by one of two centralized miners.

• 14:39David Hoffman?

  Mining pools or mining, mining pools?

• 14:42Ryan Sean Adams?

  Yeah, mining pools. So this kind of centralization is, I'm not, you know, I don't know. I mean, I guess there's this, this utopia where all of the major energy companies, right, around the world become producers of Bitcoin miners. But we're not really seeing that. All we're seeing is kind of the shakeout of the bear market and just more consolidation.

• 15:05David Hoffman?

  I don't I don't know. I don't know if I'm seeing that. I think and that is something and the kind of the why I'm putting that as a conversation in this agenda is to that is something to pay attention to in 2023 is where the diffusion of mining power lies at the end of there's just some bankruptcies that needs to happen. ASICs are going to get distributed. But I will say that mining pools, I would say, are not a pretty weak form of centralization in the same way that like I can take my I can either run my Ethereum staking node through Rocket Pool if I choose to or run it solo like mining pools don't have ownership over the ASIC units. And so that's actually a weaker form of centralization.

• 15:45Ryan Sean Adams?

  I get that distinction. Overall, what's your take on Bitcoin? So there's some excitement for the happening. Are you bullish Bitcoin in 2023?

• 15:55David Hoffman?

  Well, I had to ask my friend about what the 2023 has in store for Bitcoin because it's like it's Bitcoin.

• 16:01Ryan Sean Adams?

  Not on your radar?

• 16:01David Hoffman?

  It's well, it's not on my radar, but also it's like there's no roadmap. That's the point. And so there's designed to be not much on the on the roadmap for Bitcoin. That's part actually a feature that the Bitcoiners enjoy about Bitcoin.

• 16:14Ryan Sean Adams?

  I do think it's down too much and is due to go up, maybe in 2023. So we'll talk about that a little bit. What do we got next? We've got Ethereum, I think we're talking about. So what's what's the prediction for Ethereum?

• 16:26David Hoffman?

  Ethereum, yeah. And I got this fantastic thread out of Proto Lambda, and I've lost the particular tweet, but it's about how many hard forks will Ethereum see this year? And Proto Lambda says, we may see three Ethereum hard forks this year. I checked this take with Tim Baker, and he was like, hmm, probably just two. And so again, rough consensus out of the Ethereum land. But the

• 16:51Ryan Sean Adams?

  Two is a lot.

• 16:52David Hoffman?

  Two is a lot. Two is a lot. And what are those two hard forks? Shanghai and Cancun are the next two hard forks. These are the execution layer hard forks. Shanghai, of course, might as well be called the withdrawals hard fork. That is slated for probably March of this year, pessimistically, April. And then Cancun would be EIP 4844 or proto dank sharding.

• 17:15David Hoffman?

  Also partly named after Proto Lambda here who's got this tweet. But that is what is in store with Ethereum hard forks this year. Probably, almost certainly two hard forks. Shanghai to enable withdrawals in March, April of 2023. And then Cancun later in the year to enable 4844. And those are going to be the three, the two major Ethereum protocol upgrades for this year.

• 17:38Ryan Sean Adams?

  I heard people are talking about Cancun in Q3 as a possibility. And if EIP 4844 gets shipped in Q3, that would be hugely bullish.

• 17:47David Hoffman?

  It would be very accelerated, yeah.

• 17:49Ryan Sean Adams?

  Can you remind people what 4844 is? Oh, so you said it's, you know, proto Dank sharding. But what is the net effect of this for the Ethereum ecosystem for crypto?

• 18:00David Hoffman?

  Yeah, certainly. It gives rollups a first class status on Ethereum. So it really is changing the way Ethereum architecture is to really enable layer twos to take off the brakes and be unconstrained. And because what do rollups do? They post data down to the Ethereum layer one. 4844 gives a little sandbox of data on the beacon chain for rollups to post data to. And to really allow rollups to use the beacon chain for data availability, which allows them to like have orders of magnitude increase in speed and cheaper transaction fees.

• 18:37Ryan Sean Adams?

  Don't you think then Cancun is like the alt layer one killer?

• 18:41David Hoffman?

  Yeah, that's always been the case, yeah.

• 18:44Ryan Sean Adams?

  I guess what I'm just saying is right, like we expect another bull market to come and ETH mainnet gas fees to increase. But now instead of the transaction volume going to alternative layer ones, it is so cheap for that transaction volume. It's almost like close to zero cost for that transaction volume to go to layer twos. And they will be much more mature by the next bull cycle comes around. This is, if I was an alternative layer one, I'd be a little bit worried about 4844. And Cancun, and I'd be looking at my strategy and maybe thinking about how I might become a rollup and get my security from Ethereum because it's way cheaper.

• 19:22David Hoffman?

  Certainly, certainly. Moving on in Proto's predictions, he of course predicts that 404 Proto takes starting will ship on Ethereum mainnet. So we've covered this. But he also says, "The line between chains will start to blur due to Eigenlayer, Suave, and large Layer 1 stakers offering different sequencing as a service solutions." And so this is also, this is a pretty like 401 Ethereum level take. But Eigenlayer is something that more and more people are clamoring about. A really quick TLDR on what Eigenlayer is. It's generalized security for other computational resources using staked Ether.

• 20:02David Hoffman?

  So if you are staking your Ether, you can sign up for additional slashing assumptions, slashing conditions to secure something else, such as an oracle. And so you say you're a solo staker with 32 Ether, you're already signed up for the slashing conditions of validating incorrect blocks, but you can sign up for an additional slashing assumption for something else, as in an oracle layer or a data availability layer. And this is something Eigenlayer has captured a bunch of nerds' attentions, and people are talking about this more and more and more. So one of my predictions for 2023 is Eigenlayer starts to be talked about even more, probably throughout the entire year, as we kind of reason about what this thing can do.

• 20:46Ryan Sean Adams?

  Do you know a date for Eigenlayer, when that ships?

• 20:49David Hoffman?

  When that ships to mainnet? No, I do not. No, I do not. So this is not an Ethereum protocol. This is not like part of the all-core devs call. This won't be an EIP. This is a startup that is working on this problem that is separate from any sort of core development from Ethereum.

• 21:05Ryan Sean Adams?

  Yeah, it's just leveraging the economic security of ETH the asset to economically secure more things. That's hugely bullish for ETH the asset, in my opinion. It's also just, man, it adds another dimension to the whole game here and the economics behind it.

• 21:21Ryan Sean Adams?

  Excited and simultaneously a little terrified of the downstream effects of this, but that's super cool.

• 21:28David Hoffman?

  And I mean, if we're gonna, if I'm gonna put on my ETH maxi hat again, I would be even like anytime, any reason you need to have a specialized chain, that's not Ethereum, any other alt layer one, Eigenlayer kind of is like, well, I can turn that into a commodity and I can just use ETH staking. This is, remember that take on the weekly roll up that we gave a while ago? I can't remember who, I think Jimmy, Jimmy Rasua or something. He said Eigenlayer will enable halal alt layer ones for ETH maxis.

• 21:56Ryan Sean Adams?

  Well, I get that and I, what I'm kind of worried about is just the stacking risks that we don't realize that get hidden in some ETH that you, you know, stake somewhere. And I'm worried about some big slashing events for people who don't anticipate the risk. They're looking at like, what this means is there'll be all sorts of ways to earn yield on your ETH besides just staking. And hey, do you want this, you know, 5% for going over here and using that? Yeah, I'll take that sign up for 5%. Sounds great. But you don't realize in the background that there's also the stacking risk associated with that. And something bad happens, David, as you know, it will, give it enough time and then boom.

• 22:32David Hoffman?

  Have you ever like played Skyrim and like loaded up 20, 30 mods? And they all start to like conflict with each other? That feels like, that feels like what Eigenlayer could do.

• 22:43Ryan Sean Adams?

  Exactly. What else we got here?

• 22:45David Hoffman?

  All right, moving for last in our predictions of in the Ethereum ecosystem. I think I just want to raise the question, Ryan, what do you think about the supply of Ether throughout 2023?

• 22:55Ryan Sean Adams?

  So freaking good, isn't it? Look at this, man.

• 22:58David Hoffman?

  Well, do you think it'll be deflationary or not deflationary? Cause if you look at the chart right here, like, I don't really know. By the way, we were at 3,000 Ether earlier, just a few hours ago, and we burned a bunch in the last like little bit. But like, what is this, what is this chart telling you?

• 23:12Ryan Sean Adams?

  First of all, let me just say this, let me just say this. This is kind of a vanity guess, right? Whether you say it's inflationary, deflationary.

• 23:20Ryan Sean Adams?

  First I'll say, who the F cares? Click that button there, simulate POW.

• 23:26Ryan Sean Adams?

  Look at, look at what it would have been had we had proof of work.

• 23:30David Hoffman?

  1.4 million Ether issued in the last 117 days if we were on proof of work.

• 23:37Ryan Sean Adams?

  Versus how much is it on simulated?

• 23:39David Hoffman?

  2,900.

• 23:40Ryan Sean Adams?

  See? Who cares? Over a million less ETH issued.

• 23:45David Hoffman?

  A million 400. Don't forget that extra 400.

• 23:49Ryan Sean Adams?

  Yeah.

• 23:49David Hoffman?

  1.4 million.

• 23:51Ryan Sean Adams?

  1.4 million of ETH that would have been issued was not issued. That is the bottom line here. Whether this thing is vanity metric, inflationary or deflationary, doesn't even matter. But I'll take the...

• 24:02David Hoffman?

  That is 1.8 billion dollars that we have not issued.

• 24:07Ryan Sean Adams?

  It's so bullish. It's so stupid bullish. I didn't even know, like, this is, okay. Here's another thing I feel like is, going back to the happening, is like, man, ultrasound.money totally takes the happening's thunder, doesn't it?

• 24:19David Hoffman?

  Yeah.

• 24:19Ryan Sean Adams?

  I mean, like, I find it really hard to get excited about a happening when I have, when ultrasound.money, that money exists. Anyway, I'll take that, kind of the vanity metric. I still kind of bet that we end the year deflationary is my call. I think block space demand increases. Even post-DIP 4844, I think we're still deflationary in the, on the year if I had to call it.

• 24:39David Hoffman?

  Yeah, I think that's right. And that's because, I tweeted this out, that Ether, it's easier to burn Ether than it is to issue it. As in, when, when there's demand for Ethereum, it burn, we burn Ether way faster than we issue Ether. There's a cap on how fast we can issue Ether. There is absolutely no cap on how fast we can burn Ether. And so just because there's a cap, growth is constrained and contraction of supply is unconstrained. I think it's rational to say that we will burn Ether. We will be deflationary as in 2023. And this is also what Proto Lambda says. So he agrees with us that we'll be net deflationary in the second half of 2023.

• 25:20Ryan Sean Adams?

  Good, he's smart. He knows what he's talking about. That's great. All right, this is number two, Bitcoin, ETH. Number three is prices. We're gonna do some price predictions, David?

• 25:27David Hoffman?

  Price predictions, price predictions. And I don't really want to make specific price predictions because you and I are not necessarily, it's not our skill set, nor is it anyone's really skill set. No one really knows. But I do think we should take our time and reflect on what prices did during 2018 to 2020. And so we've got our price service provider, Kraken, up on the screen here. And if we zoom all the way back out, let's see if I can drag. No, I cannot drag. I might have to go to Trading View. But do you remember the Bitcoin price action between 2018 and 2020? Because it threw everyone for a tizzy.

• 26:00Ryan Sean Adams?

  Bitcoin pricing action between 20... Wait, what'd you say?

• 26:04David Hoffman?

  2018 and 2020.

• 26:05Ryan Sean Adams?

  2018 and 2020. I mean, I remember a successive down. There was basically, yeah. Yeah, zoom in on this. This is exactly what I remember. Some chop, and you saw kind of the bottom. This is in 2018. This happened, I don't know, three times it looks like from the chart, something like this. Is we had a big massive leg down, and like, you catch your breath, and you're like, oh, my God, I'm glad that's over.

• 26:31David Hoffman?

  Right.

• 26:31Ryan Sean Adams?

  And then we rise up, there's some hope, we get some green candles for a couple of weeks, maybe a month, maybe two goes by, and then boom, you get hit with the next leg. Is that what you're talking about?

• 26:42David Hoffman?

  A little bit, yeah. So at the top of the 2018 market, Bitcoin was $20,000, and then it went down 83%, which, I mean, was about roughly where we are now. We're not down, Bitcoin's not down that much. But then, from the bottom, it goes up three, it goes up 3X. It goes from $3,000 to like $14,000 in the middle of 2019. And then what does it do after that? It goes down another 70%.

• 27:08Ryan Sean Adams?

  Yeah.

• 27:08David Hoffman?

  And so like, me saying Bitcoin went from 3 to 14, down to $4,000, like, think about that in today's terms. Like, it's something like, where is it now? Like, $15,000 back up to $40,000, back down to...

• 27:22Ryan Sean Adams?

  Only to fall down to $20,000 or something?

• 27:25David Hoffman?

  $18,000, yeah. And Ether did the same exact thing, right?

• 27:27Ryan Sean Adams?

  Except more.

• 27:28David Hoffman?

  Exactly, yeah, except worse. Right. And so here, here is the top of the 2017 market down 94%. And so then it bottoms out at around like $80 and then it goes up to $380. So people who bought those at $80 ETH made like a three and a half X inside of a year. And then what does it do after that? It goes down 75 more percent again, right? And then, and then that's when DeFi summer started. So like, we don't really have any specific predictions. I'm going to go ahead and say, I don't think you have a specific price prediction, Ryan, but I'm gonna, I'm gonna say people should be cognizant of how fast these markets can whip around or how much they can whip around inside of a year.

• 28:11Ryan Sean Adams?

  So from a timeline perspective, we're kind of mid 2018 or so as far as like length of the bear market.

• 28:18David Hoffman?

  Yeah.

• 28:18Ryan Sean Adams?

  Aren't we?

• 28:19David Hoffman?

  I would say it's almost lining up pretty perfectly because the top of the 2018 bull market was like January of 2017 to, to January, excuse me, December.

• 28:28Ryan Sean Adams?

  A few months off, I guess.

• 28:29David Hoffman?

  Yeah, so a few months off. So like, if we want to, I just closed the tab, but if we want to like.

• 28:34Ryan Sean Adams?

  That's a rough analogy though, right? So 2022 is like 2018.

• 28:37David Hoffman?

  Yeah.

• 28:38Ryan Sean Adams?

  So then 2023 should be.

• 28:39David Hoffman?

  I think we're like right, here's ether price. I think we are like right here in 2018 terms.

• 28:44Ryan Sean Adams?

  I think what you're saying is, I think you're trying to draw lessons from the previous runs. And you're saying, hey, expect run ups and then, then major dips, major crashes.

• 28:54David Hoffman?

  Yeah.

• 28:54Ryan Sean Adams?

  Kind of test your conviction. This will probably happen in 2023 and partially into 2024. Are you just, but like, is it a fallacy to think that every, every bear market plays out the same way?

• 29:09David Hoffman?

  What, I remember going through the last bear market and everyone was like, oh, next cycle, next cycle, next cycle. And I was like, everyone's saying like the next cycle, like, doesn't that mean if everyone's saying it's not going to come? And then it totally came. And so I think that you just assume that it's going to play out exactly how like people expect it to with another cycle. And then really, I mean to say is like, I think what people should watch out for is like Bitcoin might have a run up to $40,000. Ether might have a run up to $3,000. People are going to get really bullish. People say the bear market or the bull market's on. And the bull market is not going to be on. And it's going to throw, it's going to buck people off. And people are going to try and trade it and they're going to on net lose money as they try and trade that thing. So

• 29:53Ryan Sean Adams?

  This is, this is why I was never a full believer in the super cycle, David. It's just, I, I'm still a believer and I think this has proven out, like if you, if you kind of zoom out, right? Is crypto is just plays out, markets play out in fractals. So this is the next kind of fractal. We're just at higher numbers on the highs and higher numbers on the low, but it's, it's just going to play out. And that's kind of repeated every cycle. And now the cycles might lengthen, they might, you know, there might be kind of different timelines involved. I'm fully anticipating and I think the base guess is probably the right guess, which is just play for another fractal. It's going to happen in, uh, you know, the way it has in similar bear markets. Now people always interject, but what, what about macro? Macro is completely different.

• 30:32Ryan Sean Adams?

  Uh, I don't know if you have a take on that, but I guess, um, my take is I don't actually think macro is going to affect, um, the crypto cycles. And the way people think, think it will, I think just the fractal, fractal will play out how it's, how it's going to play out. Maybe it could be kind of elongated or dampened or something like that by macro. But I just think we're kind of, it's all in the charts. It's already destined, it's already pre-planned that it's going to play out this way.

• 30:58David Hoffman?

  I think that's right. I think macro, like if the Fed had this immaculate pivot, uh, it would nudge crypto prices in a particular direction. As in like the Fed's like, all right, we're going to ease up on interest rates.

• 31:08Ryan Sean Adams?

  Easy money again.

• 31:09David Hoffman?

  Yeah. I think, I think that'll be bullish. I think that'll be a plus 20% day, a plus 50% day. I don't think it will create a bull market. Crypto needs to create a bull market under its own steam. And that takes time, that takes building, that takes innovation. And so sure, we could be like nudged by macro in particular directions. But crypto is going to come out of this bear market under its own steam, not just because something else happened to us.

• 31:33Ryan Sean Adams?

  So we think that's Bitcoin. Ether, the same thing. Now, you have a take where you think Ether is going to lead Bitcoin.

• 31:40David Hoffman?

  Always.

• 31:41Ryan Sean Adams?

  And I guess maybe that's a play on the kind of the ratio too. Is that what you're showing?

• 31:44David Hoffman?

  Yeah.

• 31:44Ryan Sean Adams?

  Bitcoin ratio. And I know you have said previously that Ether has led the last bull markets. I think I know what you mean by that, which is like Ether use cases, if not the asset price, but Ether use cases certainly have led the previous bull markets. And you think that will remain true? Or do you think it's a kind of a true in a different way? In the, for the next bull cycle? What do you think happens to Ether?

• 32:11David Hoffman?

  Yeah, I think Ether, the price of Ether has not led bull markets. I think it's gone, perhaps it's followed Bitcoin, perhaps it's gone in tandem with Bitcoin. But every time there's a bull market, it's because of something on the Ethereum app layer. That's always, that's been true as long as Ethereum's been in existence.

• 32:27Ryan Sean Adams?

  ICOs first.

• 32:28David Hoffman?

  ICOs in 2017, DeFi summer in 2020. Well, Bitcoin and Ether did absolutely nothing while we had this amazing bull market in the DeFi space, which ran into a bull market in NFTs and then Ether and Bitcoin rocketed. And so there was a bull market on the Ethereum app layer for a full year before Bitcoin and Ether prices reacted. I expect that to play out again.

• 32:53Ryan Sean Adams?

  Yeah, I think I agree with you. Do you have any predictions on the Ether Bitcoin ratio?

• 32:57David Hoffman?

  I think it is going to do something like that.

• 33:03Ryan Sean Adams?

  Go up.

• 33:04David Hoffman?

  Uh oh, yeah, it's going to go up. I am not a charter. I don't, I don't have a crystal ball, but I am positioned to benefit from an increased ratio in Ether BTC, which is why the current price action is exciting to me.

• 33:16Ryan Sean Adams?

  And remind me, where's the flipping? Where are we now and where's the flipping? So right now we're at 0.076.

• 33:24David Hoffman?

  7.6, yes, 0.77. And then the flipping is about here. We need to get here.

• 33:30Ryan Sean Adams?

  At 0.14.

• 33:31David Hoffman?

  About 0.15.

• 33:32Ryan Sean Adams?

  So it needs to double. Ether price just needs to double. So if Ether price hits, what, 3,000 or something? Will Bitcoin stay stagnant at this price? Then we flipping. Is that right?

• 33:43David Hoffman?

  Yeah, we need to hit 0.159. We need, if Bitcoin stays exactly the same price, we need Ether to be $2,700 and we will flip Bitcoin.

• 33:52Ryan Sean Adams?

  That doesn't seem that far away.

• 33:53David Hoffman?

  Doesn't seem that far.

• 33:55Ryan Sean Adams?

  I'm still not calling it for 2023, but it feels like it approaches, it approaches. All right, alt layer ones, that's the next category, David. What are the predictions for alternative layer ones?

• 34:07David Hoffman?

  Alt layer ones. And so I've got CoinGecko pulled up with smart contracting platforms. We got BNB, Cardano, Solana, Polkadot, Tron, Avalanche. And then I think that's all of them. There are some other ones as well. But I think I just want to get your broad take, Ryan, on the landscape of what it's like to be an alt layer one right now. Like, where do you think the alt layer one ecosystem is in its current form?

• 34:32Ryan Sean Adams?

  Well, I think it's, it had a narrative run up on the USK, on the, on the idea and on the entire narrative that ETH gas fees, ETH transaction fees were too damn high. And that was the value proposition of, of kind of ETH killers.

• 34:51Ryan Sean Adams?

  Very few of them, if any, developed their own independent set of tools. Many of them were EVM based, and so they kind of just glommed on to the existing Ethereum tools. I think Solana is maybe somewhat of an exception. They have a different developer community. They have some unique tools like, like Phantom, so there's some life there. Cosmos also, a little bit different. Cardano really hasn't done anything. It's just been a lot of talk. There's like, nothing really, not much you can do on Cardano at this point. So I think the, back to EIP44, being sort of the alternative layer one killer is if you, if you

• 35:32Ryan Sean Adams?

  lose the value proposition of being a cheaper version of Ethereum, what then do you have? And I think, I think they're in a precarious position, though I do think many of them will come through this, perhaps a little bit stronger.

• 35:47David Hoffman?

  Many of them?

• 35:48Ryan Sean Adams?

  Not many of them, some of them, a few of them.

• 35:51David Hoffman?

  I think one or two.

• 35:53Ryan Sean Adams?

  Yeah, I mean, it's like if you're talking about Cosmos as an entire ecosystem, right? There are many different app chains and you count that as one, that might be one. I think Solana might pull through this. Nothing's really happened with DOT, David.

• 36:06David Hoffman?

  Dude, I know, man. So like, okay, so we have BNB. And so you say like, what is the place of Alt Layer 1 in the face of EIP 4844? I think that's, I think that's definitely something to consider. But also like, what's the place of an Alt Layer 1 when Binance Smart Chain exists at the same time?

• 36:24Ryan Sean Adams?

  I know.

• 36:24David Hoffman?

  Which is a gargantuan of a, of a chain.

• 36:27Ryan Sean Adams?

  And I think it's, it's, it's, you can't really call a BNB chain an Alt Layer 1. It's something else.

• 36:33David Hoffman?

  But if you're going to compromise on, on decentralization and security,

• 36:37Ryan Sean Adams?

  He may as well.

• 36:38David Hoffman?

  You may just use Binance Smart Chain.

• 36:40Ryan Sean Adams?

  Yeah. I mean, I know, it's this place in the middle. It's kind of the idea of that the middle cannot hold. And that's what some of these, these chains are doing and trying to do. So I'm not bullish on them.

• 36:52David Hoffman?

  So looking at some market caps, Binance Smart Chain's coming in at $45 billion. Cardano's coming in at $11 billion. Solana's at 6, Polkadot's at 6, Tron is at 5.

• 37:03Ryan Sean Adams?

  Can you show that? Can you scroll to the right a little bit?

• 37:05David Hoffman?

  Can I? Yes, yes. Tron is at $5 billion, Avalanche at 3.8, Cosmos at 3.2. And I actually don't really, and there's actually, Ryan, you've been saying Cosmos while we were talking about Alt Layer 1s. CoinGecko doesn't actually put Cosmos in the smart contract platform category.

• 37:24Ryan Sean Adams?

  No, I get it. It doesn't have smart contracts on Cosmos, the app chain.

• 37:29David Hoffman?

  Ah.

• 37:29Ryan Sean Adams?

  You have to go to like Osmosis.

• 37:32David Hoffman?

  Yeah, well, I, Cosmos at $3.2 billion, where Binance Smart Chain is at 45, Cardano's at 11, and Solana's at 6. Makes me really bullish on Cosmos.

• 37:45Ryan Sean Adams?

  It's different, though, Dave. So here's why it's different.

• 37:47David Hoffman?

  Which is why I'm bullish, because it's different.

• 37:49Ryan Sean Adams?

  Oh, but here's why it's different, in my opinion, is just because you can be bullish on the Cosmos ecosystem without necessarily being bullish on atoms, the asset of Cosmos.

• 38:00David Hoffman?

  Yes, I am.

• 38:01Ryan Sean Adams?

  Those are two totally different things.

• 38:02David Hoffman?

  I am bullish on Cosmos, the ecosystem.

• 38:04Ryan Sean Adams?

  You just, it's, if people get that confused, then they'll run into a bad time, I think, investing in Cosmos, which is, it's very different than investing in even Binance, which if the Binance ecosystem grows, or the BNB ecosystem grows, then value should occur to BNB, because that is the kind of the unit of account, it is the ether of BNB chain. But Cosmos is just, I mean, that should scale with the amount of app chains that are using the Cosmos hub, and they don't even have to use the Cosmos hub, David.

• 38:37David Hoffman?

  Right.

• 38:38Ryan Sean Adams?

  They can use their own mesh security. They don't have to use Cosmos at all. And so it's kind of an apple, I think it's an apples to oranges sort of comparison.

• 38:46David Hoffman?

  Yeah, I think that's a pretty fair take. We will see. I do not think, there's a lot of alt-layer ones out there. Like, again, Cardano, Solana, PokerDOT Tron, Avalanche, Cosmos, Binance Smart Chain. How many can actually make it through this bear market?

• 39:00Ryan Sean Adams?

  I think if you have a cult leader, you're much better situated. That's why, like, ironically, it's like, Cardano is not going to die, ADA is not going to die.

• 39:09David Hoffman?

  Because of the cult leaders.

• 39:12Ryan Sean Adams?

  Use cases, yeah.

• 39:14David Hoffman?

  I hate that that's probably right.

• 39:16Ryan Sean Adams?

  Isn't that, like, don't you think I'm like, actually, relative to some of these others, I'm bullish on that?

• 39:23Ryan Sean Adams?

  ADA, right?

• 39:24David Hoffman?

  Just because of the Cult of Charles.

• 39:26Ryan Sean Adams?

  Yeah, and look, we've said it before, we said this all the time in the last bear market, is if you have any doubts about which, like, if you're questioning, if you're wondering which chain you should invest in. Try to use stuff on the chain.

• 39:40David Hoffman?

  Right.

• 39:41Ryan Sean Adams?

  Like, like, does it work? Can you do DeFi things? Can you do cool things on it? Is it a step change from something that you might find in established ecosystem like Ethereum? If it is, that's bullish. Like, so many people watch the YouTube and they don't actually do the work to to run the software and to actually use the applications. It's as simple as that. Until there's applications on some of these chains that I can actively use, I'm just not bullish.

• 40:09David Hoffman?

  Activity, yeah.

• 40:10Ryan Sean Adams?

  Yeah.

• 40:10David Hoffman?

  How do you, I don't know how to measure Cardano block space demand, and that's probably an indication. All right, should I move on to layer twos?

• 40:17Ryan Sean Adams?

  Yeah, let's do it.

• 40:18David Hoffman?

  All right, layer twos, of course, layer two beat. Right now, I declare that layer twos are in a bull market of activity. And one of the few areas of growth that's happened in the last year, which was a terrible year, was layer twos. Ryan, the, the best asset to hold last year was, if you didn't know, this token called GMX, which is an application on Arbitrum. And here, here's the, here's the price chart for GMX. Look at that. This was-

• 40:49Ryan Sean Adams?

  How does it go? It's going up?

• 40:50David Hoffman?

  It went up in, it went up in 2022. That is the, one of like three tokens that went up in 2022.

• 40:59Ryan Sean Adams?

  Three DeFi tokens, right?

• 41:00David Hoffman?

  No, three tokens, that's it.

• 41:02Ryan Sean Adams?

  Oh, my God.

• 41:03David Hoffman?

  That's it.

• 41:04Ryan Sean Adams?

  Besides, stable, stable coins stayed flat, hopefully.

• 41:06David Hoffman?

  Stable coins stayed flat, yeah. So that was on Arbitrum. Arbitrum, the Arbitrum ecosystem is just running circles around almost everyone else. Arbitrum's got 2.3 trillion, or trillion, billion in total locked value. Like, this, this was a 2022 bear market and total TVL on Arbitrum stayed about the same.

• 41:26Ryan Sean Adams?

  Yeah, I love the Arbitrum optimism rivalry because I think they both make each other- Yeah, they, they make each other better. And I just love that they're both there and they're both like fully like, I honest, can honestly say I support them both and, you know.

• 41:40David Hoffman?

  Look at this, look at this. Here is a half a million dollars on optimism in January of 2020, a year ago.

• 41:49David Hoffman?

  And now we are at 1.27 billion. We had, we had growth in layer twos in last year.

• 41:54Ryan Sean Adams?

  Hit activity. Can we hit activity on some of these? Does that, oh, that story. This is transactions, right?

• 41:59David Hoffman?

  Transactions, yeah.

• 42:00Ryan Sean Adams?

  Total locked value, which is a, a metric, an important metric, not the only metric, but it's kind of a vanity metric. And then you have activity. Activity is, is transactions. And like transactions are just like up a whole bunch. If you go to the top, go to the top here of LTB and hit activity on the right and see aggregate activity.

• 42:18David Hoffman?

  Mm hmm.

• 42:18Ryan Sean Adams?

  And I love that line there. That line in blue, I think, is Ethereum mainnet activity, isn't it?

• 42:23David Hoffman?

  Correct, yes.

• 42:24Ryan Sean Adams?

  And we're above, we're now, we've been consistently above since October-ish Ethereum mainnet activity on layer twos. That has been a flippanting in the Ethereum ecosystem.

• 42:33David Hoffman?

  Yeah. And we're, the scaling factor, 2.48, that's the highest I've ever seen it. Scaling factor is how many times, uh, layer twos on Ethereum are transacting one Ethereum's worth of uh, transactions on the aggregate layer two. So there are 2.48 times the amount of transactions of the Ethereum layer one happening on layer twos. My prediction, Ryan, I put this in the newsletter, is that this number hits five. And I think that's a pretty safe prediction for 2022, 23.

• 43:00Ryan Sean Adams?

  I think it's conservative. What, what, but what happens if, um, I guess these are used transactions, right? It's not total capacity, is it?

• 43:08David Hoffman?

  Hmm.

• 43:08Ryan Sean Adams?

  It's not total available capacity.

• 43:10David Hoffman?

  So capacity is way, capacity might be like 10 or something. The scaling capacity, we actually don't really know the upper bounds to layer twos. Uh, the scaling capacity could be like a 10x. And when we hit a 4844, it's gonna be something like 100x.

• 43:26Ryan Sean Adams?

  So we've been bullish layer twos relative to alt layer ones for a long time. And for most of, for a good portion of 2021, and for a good portion of 2022, that has been the wrong bet.

• 43:39David Hoffman?

  In 2021, that was the wrong bet for that one year.

• 43:43Ryan Sean Adams?

  Yes. And then into like the first part, the first three months of 2022 was kind of the wrong bet.

• 43:48David Hoffman?

  Mm hmm.

• 43:48Ryan Sean Adams?

  But Again, bankless thesis operates on longer term horizons, right? In crypto, you either invest in the trade level that is like kind of daily to weekly sort of thing, or you invest in the narrative level, the timeline there is like every, you know, few weeks or months, or you invest in thesis and fundamentals, your timeline there could be years. I think that we've been right on that call.

• 44:11David Hoffman?

  I think so. It was the timeframe that was at odds with people.

• 44:16Ryan Sean Adams?

  Right, we were stuck in kind of, people were stuck in a narrative timeline that lasted months rather than the thesis timeline, which is like years.

• 44:23David Hoffman?

  Years plus, yeah.

• 44:23Ryan Sean Adams?

  That's why, you know, people say this, investors say this all the time, but a lot of arguments on crypto Twitter are just timeframe arguments.

• 44:31David Hoffman?

  Timeframe arguments, yeah, semantics, yeah.

• 44:33Ryan Sean Adams?

  People arguing past each other because the timeframe is wrong. And we've consistently say bullish layer twos relative to alternative layer ones. And that was, you could be laughed at for saying that in 2021, couldn't you?

• 44:45David Hoffman?

  Right, well, now it is the inverse. So I've got the optimism chart up on the screen. And this optimism, the OP token, launched in June. So we have seven months of data. But like, do you see the bear market in that chart? Like, no, like you don't, you don't really see the FTX contagion. You don't really see Thuro's capital getting liquidated. Like, this does not look like a bear market chart. And optimism just dropped their token with a $5.5 billion valuation, fully diluted. Arbitrum hasn't even dropped their token yet. And so it's still got that in the hopper. And like all these other like layer two tokens are doing really, really well.

• 45:24Ryan Sean Adams?

  So what's the prediction, bullish layer twos?

• 45:26David Hoffman?

  I'm, the bull market will continue to be hosted by layer twos as it has been for the past like six plus months.

• 45:36Ryan Sean Adams?

  These ecosystems are very, very, very much alive.

• 45:39David Hoffman?

  Yes.

• 45:39Ryan Sean Adams?

  The most alive thing in crypto, in my opinion.

• 45:41David Hoffman?

  Hundred percent, hundred percent. I'm trying to click these things, but oh, that's because, what else do I have here? Oh, Starknet also doesn't have its token released. And so like, there's still a bunch of hype and attention. And finding attention in bear markets is really hard. And we have Arbitrum and we have Starknet. And these communities are extremely strong. There's not even a token out there for them yet.

• 46:03Ryan Sean Adams?

  ZK Sync as well.

• 46:05David Hoffman?

  ZK Sync as well, yeah.

• 46:06Ryan Sean Adams?

  ZK EVMs, uh, scroll, making a significant progress, working on a testnet right now.

• 46:11David Hoffman?

  And so here's a, one of Eric Wall's predictions is that Ethereum Layer 2 TVL reaches above $10 billion. Uh, where are we right now? We are at?

• 46:20Ryan Sean Adams?

  Five, four, five?

• 46:22David Hoffman?

  No, less than that, I'm pretty sure.

• 46:24Ryan Sean Adams?

  Three?

• 46:26David Hoffman?

  Four point five, four point five billion dollars. So he's uh, expecting a little bit more than a doubling of TVL.

• 46:33Ryan Sean Adams?

  Conservative.

• 46:34David Hoffman?

  Conservative?

• 46:35Ryan Sean Adams?

  Yeah, I call, I call for 25.

• 46:37David Hoffman?

  25 is extremely bullish.

• 46:40Ryan Sean Adams?

  Yeah, and that may bleed into next year, let me just say that, but.

• 46:45David Hoffman?

  Definitely by the end of 2024, I would say that 25 is, is, is good.

• 46:49Ryan Sean Adams?

  Yeah.

• 46:49David Hoffman?

  Cool. All right.

• 46:50Ryan Sean Adams?

  All right.

• 46:51David Hoffman?

  Bankless Nation, we got some other conversations that we're going to talk about. I've got some opinions as to where NFTs are going in 2023. Uh, Ryan's gonna have to ask me, but we also have to talk about what is the state of SeFi in 2023, because uh, you know, for better or for worse, SeFi is a fundamental part of how crypto is going to be. Uh, and then also, we gotta talk about regulation, because a lot of things are going to be happening in 2023 as it relates to this SEC and the CFTC. There are some specific cases that we're going to call attention to that are cases to watch. And then, and then Ryan, uh, I had, uh, DAOs in the original agenda, but I actually replaced that with bankless. So what's coming for bankless? In 2023, because we've got some plans, uh, and then what Ryan and David are bullish on. So all of this and more, right after we talk to some of these fantastic sponsors that make this episode possible.

• 47:35David Hoffman?

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• 48:16David Hoffman?

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• 48:33David Hoffman?

  Arbitrum One is pioneering the world of secure Ethereum scalability and is continuing to accelerate the Web3 landscape. Hundreds of projects have already deployed on Arbitrum One, producing flourishing DeFi and NFT ecosystems. With the 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,

• 49:18David Hoffman?

  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. 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. 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.

• 50:02David Hoffman?

  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.

• 50:16Ryan Sean Adams?

  Back with our 10 predictions, went through the first five. Number six, we've got to talk about NFTs, David. All right. I am the student, you are the teacher. Tell me about NFTs. What's going to happen in this crazy world of overpriced JPEGs? It's just JPEGs. What are NFTs to begin with? And where are they going in 2023?

• 50:35David Hoffman?

  Yeah, I think this is something that we can draw a lesson out of the 2018 to 2020 bear. We had ICOs that just totally decimated the brand of crypto. Sadly, this bear market, we have two things tainting the brand of crypto, one of them being FTX, and one of them being NFTs. If you go into like any like normal internet forum, non-crypto forum, and you say the word like "NFT", You just get bullied. Like, please leave. We don't want to talk about your stupid NFTs.

• 51:05Ryan Sean Adams?

  It's always a three-letter acronym that's a problem. ICO, FTS, SBF, NFT, RSA.

• 51:14David Hoffman?

  Okay, so, but what did we see? What lesson did we learn from 2018 to 2020? Like ICOs, they really just turned into governance tokens. They evolved. They got better. All of the fraudsters and the scammers and the short-termists left this space. And then what were we left with? Capital allocation and tokens. And that turned into DAOs, that turned into governance tokens, that turned into airdrops, that turned into yield farming, which started good and did bad. I think NFTs will have a similar arc. And actually, I think NFTs in their current form are in a much better spot than ICOs ever were. Bored Ape, Yacht Club, Mutant Apes, Cool Cats, Pudgy Penguins, Izukis.

• 51:56David Hoffman?

  These are like real efforts by real teams to produce real things. And so all of the short-term NFTs got just pushed out already. And now there's a flight to quality projects. And so this is what I see. I see NFT teams are going to really fight for their market cap. They're going to fight for, you know, raising the value of their NFT. That's kind of the purpose of these whole teams to begin with. And they're going to do that through raw innovation and refinement as to whatever their product is.

• 52:24Ryan Sean Adams?

  So you think that in the same way ICOs were a complete laughing stock, NFTs are a complete laughing stock now. But what we saw is a transformation of some ICO tokens. Let's say, a lot of, all the sketch teams and the scams, they just died. Those projects dried up and died. They left. They're gone. But the ones that remained, like the, well, Uniswap didn't have a token, but I'm thinking of like a project like Synthetix or Link, for examples. Rocketpool. These projects remained and they transformed their token into utility types of tokens. At least the utility is some governance participation with the potential promise of future cash flows, right?

• 53:06Ryan Sean Adams?

  And that was a big pivot from a time we said all tokens are worthless to, hey, some of these are actually worthwhile. You think the same thing could happen with NFTs? And this would imply that NFTs add some sort of utility? Is that the resurrection of NFTs? That they become more than just the JPG? There's something else to it?

• 53:24David Hoffman?

  I think that's right. And this has been the trend that I've noticed in the crypto space. First, we created Bitcoin. It was this static, collectible, no utility asset. And then after every single asset that's gotten adopted by the crypto space after that has had some form of productivity, some form of utility. What can you do with Ether? You can stake it. What can you do with Ether? You can put it in DeFi. You can use it as gas to pay for stuff. So Ether has a lot more utility than Bitcoin. Bitcoin has this blessing of like getting to be this like static inert, collectible asset. Same thing with NFTs. We created CryptoPunks. CryptoPunks have this blessing of being able to be this inert, collectible.

• 54:06David Hoffman?

  Every single other NFT, Bored Apes, Azukis, Penguins, unlock some sort of access for their holders, some sort of privilege. Famously, you know, like nightclub parties in New York, if you're a Bored Ape, that's kind of the brand. Or yacht parties or whatever, but like each one is going to provide utility and reasons for its community to hold them and buy them and own them. And so my claim for 2023 with the world of NFTs is that NFTs are the closest prediction, closest prototypes to Balaji's network state thesis that we have. And so I think we start to look like these NFT like communities start to look like some sort of prototype network state idea in the metaverse.

• 54:48Ryan Sean Adams?

  Yeah. Just, what's the link to Balaji's network state idea? These are just communities that believe in something, have a shared set of values and are passionate and are on the trajectory towards.

• 55:05David Hoffman?

  Building out a universe. So Balaji's network state is really about getting people with like-minded people together and then physically instantiated in the world somewhere. I don't really think that we're going that far. But one of his big metaphors for his network state was like with Google or Facebook. If you worked at Facebook, you could be, you would have access to any Facebook campus all over the world and you have this little badge. You could like get into the Facebook building, no matter where that Facebook building was.

• 55:33Ryan Sean Adams?

  A corporate privilege.

• 55:34David Hoffman?

  Corporate, exactly. And so he said that this is starting to look like a network state. I think that's going to be largely similar with NFTs. Not necessarily in the real world, but also not not that. Like there are Cool Cats meetup. I've been to a Cool Cat meetup in LA. The Board Apes have parties all the time. But then there's also going to be similar vibes inside of virtual lands. Like the Board Apes are building out other deeds. And the Board Apes aren't other, uh, Yuga Labs is. They're building out virtual places for their token holders to be able to experience. And I think that is starting to look and feel like Bellagio's Network State idea.

• 56:09Ryan Sean Adams?

  I think that hits on the current, uh, survive, like the, the current, um, cohort of NFT projects that we have. But I also wonder about a new cohort of NFT projects that are kind of built during this market. So we're talking about NFTs in some existing communities, but we haven't yet touched like gaming NFTs. Are they going to be a thing this year? What are artists going to do? Uh, like sound NFTs, music NFTs, that sort of thing. Uh, we're not even talking about that here. And I think that's a bunch of latent potential. Here we are looking at a Nansen, which, um, NFT folks tell me is, uh, this is a, an index of NFT projects where you can kind of track price over time. If you go to the top here, David, what are we looking at, um, charts?

• 56:53Ryan Sean Adams?

  This is across different sectors. Blue chip is the orange line here. And so I guess maybe I'm asking from a, a price perspective. To be honest, it's not down that much. I think this is all priced in ETH terms.

• 57:06David Hoffman?

  This is priced in ETH, yeah, this is priced in ETH.

• 57:08Ryan Sean Adams?

  Which is honestly, in my opinion, the right denominator for any sort of metaverse item like an NFT is you want this to appreciate relative to ETH. It's kind of the, uh, unit of account here. And, um, I guess I'm wondering from your perspective, uh, do you think the indices as a whole, like art or, uh, blue chip, the top 10 NFT projects or metaverse or gaming or social, will they appreciate relative to ETH? Do you think that's a, a way to think about this market?

• 57:40David Hoffman?

  I think that that is the goal that NFT teams ought to have. Whether they actually do that or not, uh, I don't know. But that is, in my mind, why do NFT teams, centralized coordinated teams exist? It's to increase the ETH-denominated value of the NFTs that they represent. Uh, and I think this bear market 2023 is going to be the time where Teams get really scrappy and innovative to encourage an appreciation of NFTs in Ether terms.

• 58:13Ryan Sean Adams?

  That's what we're all trying to do, increase our value in ETH terms, dominate ETH terms. Okay, regulation, David, what do you think is gonna happen?

• 58:21David Hoffman?

  No, regulation comes after SeFi. I don't really have anything to say, so I'm just gonna stop sharing screen and we're just gonna talk about SeFi really quick, because the SeFi landscape is being stressed right now. Coinbase, as of today, announced that they are doing a round of layoffs, just because it's crypto winter.

• 58:37Ryan Sean Adams?

  Another 20%.

• 58:38David Hoffman?

  Another 20%. Kraken did a round of layoffs. Gemini did a big round of layoffs. And so, I mean, layoff season, I would say is not behind us, because we've already done it all. But, I mean, FTX really soured, soured everything as it relates to centralized entities. Like, no one wants to touch, no one wants to, like, hear the word "SeFi" these days. So I just kinda wanna get your perspective, as like, in moving into 2023, what's the state of SeFi? And how do you think that's gonna play out for the next year?

• 59:09Ryan Sean Adams?

  I think one thing that's true is, um, we can't throw out the baby with the bathwater, right? So, you know, crypto is just, just, it's so, um, they're just like a pendulum. They go to extremes on one side or the other. And so, it was, "Centralized exchanges can do no wrong. Put all your money in these centralized exchanges. Centralized lending, it's glorious, amazing, why use..."

• 59:31David Hoffman?

  Why use the blockchain?

• 59:32Ryan Sean Adams?

  ... have FTX. Like, why blockchain? Yes, all of these things.

• 59:35David Hoffman?

  Let the centralized entities use the blockchains. You just use the centralized entities.

• 59:39Ryan Sean Adams?

  Exactly. And, and so, we swung from that side of the pendulum to this other side, which is a little unhealthy, in that we're like, "Oh, all centralized exchanges are bad and evil. And we don't need any of them, ever. And I hate them." And the reality is, there are some good actors in the centralized exchange space. And I think the vast majority of bad actors have actually been washed out at this point. So the ones that survive, there might be still some, some bad eggs in the bunch, but the ones that have survived are largely the ones that have done things right and have begun with a long-term perspective. So, I think that's...

• 1:00:16Ryan Sean Adams?

  That's important context to this, but I think it'll be a long time before we trust centralized C-Fi lending providers again. I mean Celsius, BlockFi, Voyager, even Terra Luna to some extent. I know that, you know, like had the Anchor Protocol, just these yields coming from nowhere. It'll be a long time till we trust those things again, and I think that's a good thing. So this means more in the DeFi space. There's also, David, we've got a lot of things to just tie off from 2022. So FTX is not completely resolved, that's in bankruptcy court.

• 1:00:57Ryan Sean Adams?

  So is Celsius, Digital Currency Group, remember? It's like we ended last year and that's the last domino to fall. And it's still kind of wobbling. It's in this space of it hasn't quite fallen over yet. And it's still like up-ish and something's gonna happen.

• 1:01:12David Hoffman?

  The leaning tower of DCG.

• 1:01:15Ryan Sean Adams?

  Yeah, I just want that thing to be over. Even this morning, there was a kind of Winklevoss twins tweeting at Barry Silbert and calling for DCG, the parent company of Genesis, to exit. Barry Silbert said, you know, he was unfit. I think was the letter from the Winklevosses at Gemini. And so $900 million of retail funds stuck in Genesis doesn't feel good. So that all has to, that all has to sort itself out too. I don't know. What's your, what's your take on the exchange world in 2023?

• 1:01:52David Hoffman?

  I've got two, two C-Fi takes. One is that 2023 is going to be dominated by the court proceedings from washed out actors, right? We got FTX, we got 3Rs Capital, we got Celsius, we're perhaps about to have DCG. So like that's gonna, what is the Bankless Weekly rollup gonna be? Like, there's probably going to be a section in every single weekly rollup that's like, here is the most recent-

• 1:02:15Ryan Sean Adams?

  An update on bankruptcies.

• 1:02:16David Hoffman?

  A bankruptcy update. That's going to be a huge C-Fi theme of 2023, which is just- Hooray. That's awesome. And I don't mean that in a serious way. That's lame. But that's just gonna be the way that it is because like people have money in Gemini Urn. People have money in Celsius. So like these updates are actually important and they're kind of going to define the crypto, the centralized crypto industry moving forward. My other update is that B and C tier centralized exchanges are gonna struggle and be kind of severely tested. And I think we're seeing that play out with Wobi, who I would call a B or C tier centralized exchange. And so like, I think the call to action is like, you know,

• 1:02:58David Hoffman?

  having centralized exchanges are going to be a part of the crypto world now and for forever. They're going to be around. We have to accept it. We should, if we are going to use centralized exchanges, probably should be using A tier centralized exchanges, not B or C tier. So if you are still having your money on a C tier centralized exchange in this day and age in crypto,

• 1:03:17Ryan Sean Adams?

  Don't.

• 1:03:18David Hoffman?

  I don't. Don't use an A tier. Clearly you're using a centralized exchange. If you're gonna continue to do that, use an A tier one. Like, don't be on the long tail of risk because that is a bad spot to be in a bear market. Or even any market for that matter.

• 1:03:33Ryan Sean Adams?

  I, it's, it's hard on centralized exchanges because we don't know everything about all of them. The way I feel right now at this point is if someone were to ping me on Telegram and just be like, hey, what centralized exchanges do you recommend you trust? Kraken would be top of the list.

• 1:03:48David Hoffman?

  Yep.

• 1:03:49Ryan Sean Adams?

  And not because they're sponsors. We picked them as sponsors because they were on the top of our list.

• 1:03:54David Hoffman?

  Right.

• 1:03:55Ryan Sean Adams?

  Coinbase as well would be on the top of the list.

• 1:03:59Ryan Sean Adams?

  Take a big, deep breath from there.

• 1:04:01David Hoffman?

  I don't really know after that.

• 1:04:03Ryan Sean Adams?

  I just, Binance, I hope, I think. I don't know, though.

• 1:04:07David Hoffman?

  Yeah. I would bet my money that Binance would be okay, but it would be a gamble.

• 1:04:14Ryan Sean Adams?

  I feel that way. And again, it could totally not be, but that's part of the challenge with centralized exchanges is you don't know for sure. And that's why proof of reserves is so important.

• 1:04:26David Hoffman?

  All right, that's another, that's another big theme I think will be throughout 2023 is proof of reserves is going to get better.

• 1:04:32Ryan Sean Adams?

  Where regulators should demand this. If they want to do something helpful, just help them demand proof of reserves and audits on liabilities.

• 1:04:40David Hoffman?

  Yes.

• 1:04:40Ryan Sean Adams?

  Just raise the bar there. Thank you. We'd appreciate that.

• 1:04:42David Hoffman?

  It's so simple. It's so simple.

• 1:04:44Ryan Sean Adams?

  It's still freaking simple. Yeah. Clarity for security. What's a security? And then just proof of reserves, please. Okay. What else we got, David?

• 1:04:52David Hoffman?

  All right. Now, moving into the regulatory conversation. Speaking of regulators, here's our favorite guy.

• 1:04:58Ryan Sean Adams?

  Oh, hey.

• 1:04:59David Hoffman?

  What's up, Gary? So this was a, an article written by Mike Selig, who I had, had on for a conversation and he wrote this. 2023, the year of regulation versus decentralization. And he's basically saying that the world of regulation is going to push and squeeze crypto. And as a result of that squeezing, crypto will become more decentralized. Now, I remember being very, very into these conversations that almost felt exactly the same, Ryan, back in 2018, 2019. It's like, all right, ICOs just tainted the industry. The regulators are totally coming. What's going to happen? And it was.

• 1:05:39Ryan Sean Adams?

  Risk laps is what happened.

• 1:05:41David Hoffman?

  Risk laps. Well, some, some more than risk laps, but the ICO industry, it was the ICO, it was an industry for a while. Did grind to a halt, probably under its own wake, but also because everyone realized they were issuing an unregistered security. And so this is where people actually started to like step back from their own projects and become more quote unquote decentralized.

• 1:06:02Ryan Sean Adams?

  Sure.

• 1:06:02David Hoffman?

  And so this is the opinion of Mike Selig, and I totally agree with him, is that in this year, the CFTC and the SEC are going to push the boundaries of their current existing authorities through novel enforcement actions. And that as a result is going to force crypto to become more decentralized in response to that, which is good. That's a good thing. Even though it's going to be rough, it's still a net out positive outcome.

• 1:06:30Ryan Sean Adams?

  For me, the jury's still out on whether it's net positive or not, but I will give the benefit to this. It's honestly OFAC. OFAC sanctions for Tener to Cash have been one of the best things to ever happen to Ethereum?

• 1:06:45David Hoffman?

  From a decentralization standpoint, sure.

• 1:06:47Ryan Sean Adams?

  Yeah. And sorry, I said that probably a little too hyperbolically. There have been a lot of great things happen for Ethereum. But I just mean, one of the things that seemed bad and very oppressive that has quickly turned into, I think, a victory for Ethereum, which is it's forced the Ethereum community to really focus on what censorship resistance means at the protocol layer for block builders. And as a result, I think, I mean, we've, we said this in our earlier predictions,

• 1:07:22Ryan Sean Adams?

  MEV censored blocks or, you know, blocks with censorship have probably peaked, if you have that chart up. But I think you and I both believe that. And there are a lot of censorship solutions like on their way. Yeah, Dave's gonna pull up a OFAC censorship. Oh, you don't have the chart, but.

• 1:07:40David Hoffman?

  Uh, yeah. What is that website? I can't remember what that website is.

• 1:07:42Ryan Sean Adams?

  I can't remember either. It's MEV something.

• 1:07:45David Hoffman?

  MEV watch?

• 1:07:46Ryan Sean Adams?

  Yeah, it might be MEV watch. Let's try that. MEV watch.

• 1:07:49David Hoffman?

  Not dot com.

• 1:07:51Ryan Sean Adams?

  Oh, God. This is something else. This looks cool, though. This looks like a Dune dashboards.

• 1:07:56David Hoffman?

  Chat, will you help us out?

• 1:07:57Ryan Sean Adams?

  Oh, wait. It doesn't, it doesn't, doesn't matter. But like, anyway, that, that, that's an example of the thesis that this CoinDesk opinion piece is, is kind of playing out in that way. Yeah, this is it. MEV watch. It was, for people that are listening, www.mevwatch.info. And, you know, this, I think, will go down over time. I think this is, this is peaked. And we're gonna get some not OFAC compliant blocks. And anyway, the Ethereum community has been educated on it and has successfully defended against it. And, um, yeah, I think it's gonna be an improvement moving forward. So, that's an example.

• 1:08:34David Hoffman?

  And one thing I want to point people to is I asked Mike, what is the case to watch? What are cases to watch? And OK Dow is the Dow that is being charged by the CFTC. It was going after a Dow, but then a court ruled that you, they, CFTC should actually just serve the two founders, the two founders of OK Dow. And so really this court case really means is like, okay, what does this mean if a Dow violates CFTC regulation? What happens as a result of that? And this case is still ongoing, but because can't really charge a Dow, they are instead going after the two founders of the Dow who have a bunch of the governance tokens.

• 1:09:15David Hoffman?

  How this court case falls, however this lands is going to be important for other Dows and other founders of.

• 1:09:23Ryan Sean Adams?

  I hope this lands the right way. This could go very bad, in my opinion. I don't know what Mike thinks about that. Have you talked about that on the episode? But I'm worried about this case, David.

• 1:09:31David Hoffman?

  Yeah. But the take that we gave, that we talked about is decentralization theater versus actual meaningful decentralization. And that was the point that he really wanted to hammer home on. It's just like, well, if you have two founders and they just make a Dow, like, well, no, you need real decentralization, not fake decentralization. And so I know like in this crypto space, we don't really, we want to protect our Dows, but we also want to protect our Dows against grifters who are not appropriately using Dows in the appropriate sense. And if that's what the CFTC comes and charges these two people with is like, no, your Dow's not a real Dow. You two are just hiding behind a Dow mask. Like, we have to accept that as a crypto industry, I think.

• 1:10:13Ryan Sean Adams?

  Fingers crossed. We'll see. The trust isn't there yet between these two groups. So hopefully with, with some mutual education that, you know, regulators and crypto natives can, can find good solutions and we get sensible regulation. All right. So.

• 1:10:29David Hoffman?

  Ready for bankless? We got two, two things left. We got what bankless has in store for 2023 and then also what David and Ryan are thematically bullish on for 2023. But. We got some stuff planned in the bankless world. And so I put out a tweet not too long ago that the best prediction to make about 2023 is one that you're in control of. And so I'm bullish on bankless going into 2023. Ryan, you want me to keep on elaborating or you want to take this?

• 1:10:56Ryan Sean Adams?

  Yeah, no, you can, you can, you could talk about it, but maybe I'll tee you up for it. We're launching a new website, guys, for bankless members, citizens of the bankless nation. That is going to be absolutely fantastic. I just, there's a cut of the beta right now in our inboxes, David, that we have to go test, you and I. I hope we can find some time to do that. And then we're going to open this beta to members of the bankless community. And hopefully, this comes out pretty soon.

• 1:11:24David Hoffman?

  Yeah.

• 1:11:25Ryan Sean Adams?

  You want to say more about that?

• 1:11:27David Hoffman?

  Yeah. I mean, we have a Chad designer and a Chad website guy, and they are doing absolutely just moving mountains to make a brand new bankless website. And I really think it's, it's a website that I think the crypto industry really deserves. It is a place that hosts much more than just these like podcasts and newsletters and, and articles that we're writing, but just, it's a hub of all raw educational resources. If you are paying attention to the bankless world, you've noticed us producing these super refined, very short videos that are on a different YouTube channel, which we'll link in the show notes, which you should subscribe to. But we're also doing stuff like, I'm working on videos like, what is decentralization? What is a blockchain?

• 1:12:12David Hoffman?

  Like, stuff like this. And so I'm trying, I'm hoping that we can make this the best, unequivocally the best place to send crypto curious people. And that is just, it's going to be the universal hub for people who are just starting their bankless journey, people who are very deep down the rabbit hole at 300 and 400 level content, and like everything in between. And so that's what I'm bullish on, is that it becomes the best hub to send somebody who's new into crypto who's wanting to get into it.

• 1:12:41Ryan Sean Adams?

  We call this the bankless nation all the time because that's the metaphor, the analogy that we're using for bankless. And I know you know this, David, but bankless, the nation, is actually larger in population size than about 40 other established United Nations-recognized countries. There you go. Talk about Bellaji's network state idea. That's what we're slowly moving towards, right, with incremental, incremental progress. So, population, quarter of a million. Now, how do we get to population a million? How do we get to population 5 million? How do we get to population 10 million? That's what we're aimed at with Bankless and what

• 1:13:26Ryan Sean Adams?

  we're trying to do here. Another piece that's coming down the pipeline is an NFT project. Have you mentioned that on the podcast yet? I don't know, but I'm not going to mention any more detail than that because there'll be some things that we want to showcase. But think of this as kind of a, the idea of a bankless passport. What would that mean instantiated in NFT form? That's what we're working on. And again, the idea of the network state, I think, is burned into our minds. We also, you guys remember last quarter, we brought on Dawson Botzford as our CTO from a fantastic tool that we just love using called Earnify. And so, Bankless Labs

• 1:14:09Ryan Sean Adams?

  is where that lives. We're going to double down on our efforts to produce tools for the bankless nation as well, starting with Earnify, which is an airdrop finder, has helped find people $150 million in opportunities. Or talk about net good, public, public good for crypto natives and crypto travelers. That's what we're trying to do. And then, of course, you and I, David, I think we've dedicated 2023 to kind of get back to some of the core basics. 2022 was such a frenetic, busy year. We're all over the place, just trying to keep up with various things. Now we have a chance to kind of breathe and get back to

• 1:14:49Ryan Sean Adams?

  some of the, the basics content. Bringing it from the archive, freshening it up, and in talking about it in, in new terms. So, we're going to revisit some of the OG educational theses that we've had from Bankless from day one. So, I think it's going to be a tremendously bullish year for What we're doing in the bankless movement and I'm super excited about that. Not to mention everything that the bankless Dow is pulling off, which I just can't even keep up with. It's so much going on over there.

• 1:15:17David Hoffman?

  Yeah, it's hard to like give transparency to what's going on in the backend just because like we have this Discord server. We have like the bankless team in there. The bankless team's large and I don't think a lot, I don't think many people realize how much hiring we've done in the last like two quarters or so. We have like 17 people that show up to the Monday meetings. What are they all doing? Stuff we are, I'm super stoked to be able to present to you guys soon. TM, we've gone from like something like seven or eight people at the start of 2022 to where we are now with something like 17 people going into 2023. And everyone's just been heads down working and I think a lot of that stuff is going to come to fruition pretty damn soon here.

• 1:16:01David Hoffman?

  Ryan's already teased out a little bit, but yeah, I'm pretty bullish.

• 1:16:05Ryan Sean Adams?

  You don't have to be sorry for bankless ever do. All right, what do you bullish on though? Tell me if you had to pick one thing in crypto for 2023.

• 1:16:14David Hoffman?

  One theme.

• 1:16:14Ryan Sean Adams?

  That you're most excited about, most bullish on. Yeah, what's one theme that you'd point to?

• 1:16:19David Hoffman?

  I want to point in everyone to the concept of and project sign in with Ethereum. This is something that technically doesn't have a price tag associated with it, but it is still something I'm bullish on. And it's something that I think is also going to be very, very helpful with putting Ethereum on the map when it comes to mainstream adoption. Because this is something that I think everyone can really get behind, which is like, you know, sign in with Facebook, sign in with Google, sign in with your web two overlord, or sign in with your private keys, which you mentored yourself and you control and you operate your own identity.

• 1:16:59David Hoffman?

  And I think especially as society is getting more and more fed up with the web two world. I think the sign in with Ethereum movement, which is, we are just at the very, very like tip of the iceberg on this thing, is going to see a lot of mainstream adoption. Because what people are, Ryan are. Getting exposed to NFTs via Instagram, NFTs via Twitter and NFTs via Reddit. So like parts and corners of the web to internet, big corners, not like Instagram. It's not, it's not a tiny little corner. They're already getting exposed to Ethereum. And so we're finding and also, you know, being able to log into a website without having to email and password and other identities, I think is going to be a big catalyst for just people accepting Ethereum into their lives.

• 1:17:45Ryan Sean Adams?

  It's honestly, it solves a massive problem here. And, you know, I'm gonna, I'm gonna plus one your bull case for sign in with Ethereum. It's actually, there's a Vitalik tweet too. Turns out he's also bullish on sign in with Ethereum. What's this tweet that we're looking at?

• 1:18:00David Hoffman?

  Yeah, so this is Matt Huing from Paradigm, who's asking Vitalik, what is his definition of a good crypto future? And Vitalik just gives a list, you know, fix scaling, fix privacy, fix UX, UX of course. User accounts more secure for average users than centralized services. That might be a nod to account abstraction. Payments and store value plus the DeFi provide value to many people. That sounds like banking the unbanked. Crypto social takes off and then identity plus sign in with Ethereum succeed. The cool thing is, is like sign in with Ethereum, it isn't just you have a private key and you authenticate your identity to a website via signing with your private key. It's, it starts there and that's already a huge order of improvement in terms of user privacy and user sovereignty on the internet.

• 1:18:45David Hoffman?

  But as identity layers and identity tooling and whatever it means to create identity, which is already a nebulous definition, as that becomes greater, signing in with Ethereum becomes more useful. As there's more, as there's a higher fidelity relationship between your Ethereum address and your identity because of the PO apps you collected or the attestations that you have or the things that you have done, that your website that you're logging into is interested, interested in it. Your Ethereum address can represent more and more about you that you control, that you have total like access over. And so it's kind of like when DeFi grows, Ether becomes more useful. As Ethereum identity grows, sign in with Ethereum also becomes more useful.

• 1:19:30David Hoffman?

  And so that is something to be bullish on.

• 1:19:33Ryan Sean Adams?

  Yeah, imagine kind of the narrative coming out of this, like ETH gives you, you know, an Ethereum address gives you a way to sign into any application across the internet in a decentralized way, right? And ETH is kind of a, an investment in a global identity management system. I even think some of these narratives, if they come to fruition, can turn into like bull cases that we don't really talk about. We talk about ETH as money, but what about ETH as identity? That's a super interesting thing to think about. But the reality is, identity is broken, isn't it? In Web 2, it's broken, just like the Twitter bot problem. Like, wow, what a, it's a failure of identity, identity systems. And it's even like, we're talking about wins for mainstream,

• 1:20:18Ryan Sean Adams?

  people who aren't into kind of the money, you know, number go up type use cases. Well, identity is also a national security problem. How do I know what's a Russian bot? Or, you know, an evil nation-state actor that's trying to kind of prey upon my population? If I don't have proof of identity, if I don't have proof of humanity? And I'm just thinking about how utterly, how utterly lacking nation-state identities actually are for this. It's pretty embarrassing, yeah. No, I know, we were just talking about this in one of our debriefs for an episode we just did, which is, I recently opened up some exchange accounts and used a selfie, of course.

• 1:20:59Ryan Sean Adams?

  This is how you validate your, who you are, who you say you are, authenticate it. And it was, you know, a selfie of myself and then my driver's license. Basically, three JPGs, right? A JPG of me and a selfie, a JPG of the front of my driver's license, a JPG in the back. And they just, they live on my computer somewhere. Why? Because I do this so often. Right. All someone has to have is those three JPGs. And then they know my social security number, which is publicly available, basically. And they know my birthday, and then they can authenticate themselves on, in a banking application? Like, that is your state-of-the-art security? Nation-state security sucks right now. Yeah, that's pretty bad.

• 1:21:43Ryan Sean Adams?

  And for this to be a solution to that, well, just sign in, you have a private key. Private keys really are a superpower for the 21st century and unleashing that for for identity is kind of a really bullish use case. I don't know if all of this happens in 2023, though, David. I feel like 2023 will just be the start of that.

• 1:22:04David Hoffman?

  Yeah.

• 1:22:04Ryan Sean Adams?

  At some level, and it'll take a few years for that to fully play out. But I'm also bullish on this.

• 1:22:09David Hoffman?

  Well, we are recording with the Sign In with Ethereum team tomorrow. And so we are going to turn this theory into a full length podcast. So we'll have more material on that soon.

• 1:22:19Ryan Sean Adams?

  There you go, guys. Well, that has been 10 predictions for 2023. We're excited about going into this year. I'll end with our typical risks and disclaimers. Of course, got to let you know that all of crypto is risky. So is ETH, so is Bitcoin. You could definitely lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.