Post-Merge Recap | White House & U.S. Crypto Regulatory | $160M Wintermute Hack | Do Kwon on the Run?

4th Week of September, 2022 ------ 📣 Swell | Liquid Staking for the People https://bankless.cc/swelldiscord ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: 🌱 LENS | WEB3 SOCIAL PROTOCOL https://bankless.cc/Lens 🚀 ROCKET POOL | ETH STAKING https://bankless.cc/RocketPool ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum 🦁 BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave 🌉 JUNO | BRIDGE FIAT TO LAYER 2 https://bankless.cc/Juno ⚡️ ZKSYNC | THE LAYER 2 SCALING ENDGAME https://bankless.cc/zkSync ----- Topics Covered 0:00 Intro 3:00 BTC Price 3:54 ETH Price https://ultrasound.money/ 14:00 Relayer and Builder Market https://www.mevboost.org/ 18:13 FED WATCH 18:25 Fed Rate Hike this Week https://www.cnn.com/2022/09/21/economy/fed-rate-hike-september/index.html 19:45 Risk on Assets Falls https://www.coindesk.com/markets/2022/09/21/federal-reserve-hikes-rates-to-highest-since-2007-bitcoin-falls-to-19000/ 21:44 Houses! Interest Rates on Houses Spiking https://twitter.com/charliebilello/status/1570413955637460993 https://twitter.com/KobeissiLetter/status/1571522450386735112 24:00 Flat Markets Prediction? https://twitter.com/GoldTelegraph_/status/1570738647254831105 29:27 NEWS 29:30 White House & U. S. Regulatory https://twitter.com/coingecko/status/1570769375212470272 https://www.whitehouse.gov/briefing-room/statements-releases/2022/09/16/fact-sheet-white-house-releases-first-ever-comprehensive-framework-for-responsible-development-of-digital-assets/ 31:20 Terra Screwed Things Up https://twitter.com/jchervinsky/status/1571991546291159042 https://twitter.com/RyanSAdams/status/1570774337254461446 https://twitter.com/brian_armstrong/status/1572095723306627073 34:35 Draft Stablecoin Bill https://www.theblock.co/post/171565/draft-stablecoin-bill-in-congress-to-require-fed-state-regulator-approval https://twitter.com/jchervinsky/status/1572586178502864896 39:05 Senate Banking Committee Hates Crypto https://www.politico.com/newsletters/morning-money/2022/09/22/sherrod-brown-turns-up-the-heat-00058202 40:00 Interaction Between Toomey and Gensler https://twitter.com/BanklessHQ/status/1570808589148909569 41:41 $160M Wintermute Hack https://t.co/Kkk445dLyv 41:50 Experts Blame Vanity Address https://www.theblock.co/post/171192/experts-blame-a-vanity-address-bug-for-wintermutes-160-million-hack 42:00 More Details on What Happened https://twitter.com/evgenygaevoy/status/1572329148411936770 https://halborn.com/explained-the-profanity-address-generator-hack-september-2022/ 44:16 David and Ryan Discuss: What’s Next? https://twitter.com/iamDCinvestor/status/1572927876546297859 https://wrongalot.substack.com/p/the-next-big-crypto-narrative 54:24 PoW Ethereum Fork Dead? https://thedefiant.io/ethpow-rough-start-after-merge 54:46 Infura Decentralized Infrastructure Network https://twitter.com/infura_io/status/1570794318067290112 56:00 zkSync Devs Found Bug https://twitter.com/StarkWareLtd/status/1567888940123983874 https://twitter.com/iamDCinvestor/status/1567889575128727552 https://twitter.com/zksync/status/1570073596709462018 56:55 OpenSea on Arbitrum https://twitter.com/opensea/status/1572250900198203392 57:17 Universal Studios NFT Scavenger Hunt https://twitter.com/banklesshq/status/1572619172454232064 https://twitter.com/0xferg/status/1572068539049058304 58:15 Tether: Show Us What’s Backing USDT https://finance.yahoo.com/news/stablecoin-issuer-tether-ordered-produce-041706661.html 59:31 FTX in the Lead to Buy Voyager https://www.coindesk.com/business/2022/09/15/ftx-is-in-the-lead-to-buy-crypto-lender-voyager-digitals-assets-out-of-bankruptcy-source https://www.coindesk.com/business/2022/09/20/crypto-exchanges-binance-and-ftx-have-both-bid-roughly-50m-for-voyagers-assets-report 1:00:42 Do Kwon on the Run? https://www.coindesk.com/business/2022/09/19/s-korean-authorities-ask-interpol-to-issue-red-notice-for-terra-co-founder-do-kwon-report/ 1:01:13 Rari Fuse Hack Victim Compensation https://twitter.com/joey__santoro/thread/1571898748405714947 1:04:16 Helium Signs Agreement with T-Mobile https://twitter.com/tier10k/status/1572244764237471749 https://twitter.com/TusharJain_/status/1572248774893834240 1:06:13 Kraken’s CEO Stepping Down https://www.theblock.co/post/171847/krakens-jesse-powell-stepping-down-as-ceo-of-crypto-exchange 1:06:31 Nasdaq Launching Institutional Crypto Custody Services https://twitter.com/fintechfrank/status/1572186768132161536 1:07:05 Liquid Collective https://twitter.com/liquid_col/thread/1572164626535563265 https://liquidcollective.io/ 1:07:55 Coinbase Cloud https://blog.coinbase.com/coinbase-cloud-launches-platform-for-web3-developers-472eb355b1fa 1:08:45 FTX Reloading https://cointelegraph.com/news/ftx-in-talks-with-investors-to-raise-1b-for-further-acquisitions-cnbc 1:09:10 Messari Raises $35M Series B https://www.prnewswire.com/news-releases/messari-announces-at-mainnet-2022-summit-raising-35-million-in-series-b-funding-301629624.html 1:11:00 JOBS https://pallet.xyz/list/bankless/jobs 1:14:19 NATION QUESTIONS https://twitter.com/bbbFollowOnly/status/1572948809063317510 https://twitter.com/mmaatt78/status/1572638221720498176 1:20:45 TAKES 1:20:50 VCs Against Bitcoin https://twitter.com/TheStalwart/status/1570485528633417730 1:21:55 Say No to Bitcoin Fundamentalism https://twitter.com/danheld/status/1570839132028674048 1:23:35 Ethereum & Crypto Haters https://twitter.com/haydenzadams/status/1570459984206381058 https://twitter.com/haydenzadams/status/1571535610279510021 1:25:25 Rollups Today https://twitter.com/jon_charb/status/1572395334516748290 1:27:31 What We’re Bullish On 1:30:53 MEME of the Week https://twitter.com/banklesshq/status/1571984307748569088 1:33:41 Closing & Disclaimers 1:33:50 Moment of Zen https://twitter.com/gabrielhaines/status/1572927657049980929 ------- Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.

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

• 0:00David Hoffman?

  Is this cope, Ryan? Are we coping right now? We might be coping. Do you feel like we're coping?

• 0:04Ryan Sean Adams?

  I think when people are coping, they don't know they're coping. And I was about to say, no, I'm not. This is not coping, David. But maybe that's what people who are coping say.

• 0:14Ryan Sean Adams?

  Hey, Bankless Nation. Happy 4th Friday of September. David, what time is it?

• 0:18David Hoffman?

  Ryan, it's the Bankless Friday Weekly Roll-Up, where we cover the entire weekly news in crypto, which is always an ambitious endeavor. Yet, we persevere into the frontier nonetheless. Every Friday, with our morning coffee, of course.

• 0:30Ryan Sean Adams?

  Yeah, grab a cup of coffee as you hear how David and I struggle through a roll-up post-merge.

• 0:37David Hoffman?

  Post-merge.

• 0:37Ryan Sean Adams?

  Because, David, what is there to talk about now that the merge is done? Do we have any content?

• 0:41David Hoffman?

  Content? Bear market.

• 0:42Ryan Sean Adams?

  Is this gonna be a 20-minute episode here?

• 0:45David Hoffman?

  Yeah, the roll-ups are just getting... Actually, even though there is nothing happening, I bet you we could find a way to make a 90-minute roll-up, yeah.

• 0:52Ryan Sean Adams?

  But you know what? There actually is a lot happening, because there's always a lot happening in crypto, even though we're in a post-merge world. Number one, we're gonna talk about the White House. They have some words to say to the crypto industry. This Biden report just came out. And I think people need to know, is it alarm time? Should we be freaking out right now? What else we got?

• 1:10David Hoffman?

  And we have to reset the hack counter. There's a $160 million hack in this never-before-seen way of getting hacked. Are you at risk? No, you're not, but it's an interesting story nonetheless. So we'll get into that. And of course, we covered it last week. Do Kwon, is he on the run? Where is he? Ryan, do you know where Do Kwon is? Because people are looking for him.

• 1:31Ryan Sean Adams?

  I don't know. He says he's not on the run, but I think Interpol has a different take on that.

• 1:36David Hoffman?

  It sounds like somebody who's on the run was what they would say, yeah.

• 1:39Ryan Sean Adams?

  It does. Before we get in, though, David, got to talk about our friends and sponsors at Swell, who wants you to know that there is going to be a new ETH-staking opportunity in town. It's called Swell. David and I like these guys so much. We're also angel investors. And they are now in a guarded-launch territory. So they've started the launch process. It's in a guarded-launch while they take care of a few more things. But what is Swell, David? Why is this a new entrant onto the liquid staking scene? And what are these guys specializing in?

• 2:12David Hoffman?

  Yeah, Swell is really going after the best of both worlds between Lido and Rocketpool. Rocketpool, of course, the only decentralized, permissionless, validating, staking-as-a-service pool on Ethereum. Lido, a permission validator set. And Swell is doing a little of both. So you can stake your Ether with Swell permissionlessly if you put up a 16 ETH bond, or you can also be in the DAO and get voted in as a trusted staking provider. And so you get a little bit of Lido, a little bit of Rocketpool. And if you were... Lido came around in 2020, and so if you were too late for both of those things, you could still get in at the ground floor of Swell. So there is a link in the show notes to go and join the Discord and join that community.

• 2:54Ryan Sean Adams?

  This is promising to be a community-owned protocol. So go check out the Discord and help them build this thing out. David, let's get to markets, all right? Bitcoin. What are we looking at on the Bitcoin price this week?

• 3:06David Hoffman?

  Can we just skip the market section this week? Let's skip the whole section.

• 3:11Ryan Sean Adams?

  No, tell us. Give us the hard truth, okay? We can hear it. We're ready for this.

• 3:14David Hoffman?

  Bitcoin not down so bad. Started the week at $19,800. So started the week below $20,000, ending the week at $19,000, a few dollars below $19,000. So we are in the $18,000 range, down 4% on the week. Not looking so great. Not looking so great.

• 3:32Ryan Sean Adams?

  This is not so great, but not so bad. Typical bear market week for Bitcoin, right?

• 3:36David Hoffman?

  Well, we're at the lows. Bitcoin flashed down to 17.5 during the liquidation, and then it popped right back up to 18,000 something. We're at the market lows. Like, we're not that far off the bottom.

• 3:48Ryan Sean Adams?

  There was a liquidation event this week. Maybe some are saying this is maybe Fed-caused, Fed-induced. We'll talk about that. But how about Ether? We are in a post-merge ETH world. Was Hal Press right, David? Was the merge priced in?

• 4:02David Hoffman?

  So Ether, down 14% on the week. Oof. Started the week at $1,500, ending the week just below $1,300. I guess the merge was priced in.

• 4:14Ryan Sean Adams?

  I guess it was fully, the merge execution was priced in.

• 4:17David Hoffman?

  Yeah.

• 4:18Ryan Sean Adams?

  You ready to say that?

• 4:18David Hoffman?

  I, I, I guess so. Yeah.

• 4:20Ryan Sean Adams?

  What's, what's interesting is-

• 4:21David Hoffman?

  There's no, there's no way for me to like twist this. I got, I got nothing here.

• 4:25Ryan Sean Adams?

  Do you know your debate with Jordy Alexander on whether like the merge is priced in or not? I still like, again, I'm, you know, I've taken the role of the unbiased moderator, David, so I can't be in your corner. I can't be in Jordy's corner. I have to be unbiased. I will say as an unbiased moderator, you're not wrong yet. Okay. Maybe how press was wrong, some of the, like the traders were wrong. You were not wrong yet because what I heard you say in that conversation with Jordy was it may not price itself in, in the short term. You were talking about like post-merge, you know, could take a few weeks, a few months. But your main argument was in the mid to long run, the merge isn't priced in because we have a massively decreasing issuance rate.

• 5:10Ryan Sean Adams?

  Less supply on the market. All we have to do is refill that demand bucket and then prices shoot back up.

• 5:16David Hoffman?

  All we gotta do, huh?

• 5:18Ryan Sean Adams?

  Maybe some solace there. I don't think you're wrong yet. I don't think anyone can say that.

• 5:22David Hoffman?

  It's a, it is pretty much a, a pretty, pretty big bummer to see ether go down 14% immediately post-merge. I mean, definitely one part macro, which we're about to talk about. Also, the other thing, the, the new meta is like, all right, post-merge, what the hell is next? Like when you look over the horizon, what do you see?

• 5:40Ryan Sean Adams?

  Talk about that.

• 5:41David Hoffman?

  Like there's not, there's not much there. So we're going to talk about that too. Yeah.

• 5:43Ryan Sean Adams?

  Do you know what this has cemented for me though, David, that we are in a bear market?

• 5:47David Hoffman?

  Yeah.

• 5:48Ryan Sean Adams?

  All right. We are in a bear market.

• 5:49David Hoffman?

  It's greasier.

• 5:50Ryan Sean Adams?

  It's going to be a sustained bear market, right? So I think there was some hope that this catalyzing event of the ETH merge might, uh, change things.

• 6:00David Hoffman?

  Yeah. Spark a new fire.

• 6:01Ryan Sean Adams?

  Spark something wasn't enough.

• 6:02David Hoffman?

  Nope.

• 6:03Ryan Sean Adams?

  And this confirms when good news happens during a, uh, market cycle and the price goes down, it's generally, you know, you're in a bear. So bear market confirmed. I think we could be here for months. Uh, I think we'll have to wait until macro, um, takes over and we'll, we'll get into some of that story. But also there are no big crypto catalysts ahead. This is nothing I can really think of beyond the merge.

• 6:28David Hoffman?

  Yeah.

• 6:29Ryan Sean Adams?

  So we got that. It's gonna be fun times on Bankless.

• 6:32David Hoffman?

  Is this a bearish weekly rollup? Wow. There's only like three of those.

• 6:36Ryan Sean Adams?

  I'm not, I'm not really bearish. Honestly, I just think this is the sustaining the bear market. But I'll tell you what did not drop ETH price, and that was Gensler comments this week. I saw this headline, had to bring it up.

• 6:47David Hoffman?

  What a ridiculous headline. I thought that was an Onion article.

• 6:50Ryan Sean Adams?

  This, no, this is Yahoo Finance. This is mainstream finance reporting and with the headline, "Ethereum price drops 20% as SEC declares control over the network." And we've got a picture of Gary Gensler with his fist in the air, dictator king style, controlling the network, I guess, as depicted controlling the network. So if your friends ask you if Gensler is controlling the network right now, and if that's the reason price dropped, Bankless is here to say, no, that's not the reason price dropped. And no, the SEC didn't declare control over the network. Gensler was just saying things that Gensler says often. We'll, we'll cover that later, but.

• 7:30David Hoffman?

  Gensler gunning Gensler.

• 7:32Ryan Sean Adams?

  You can't mainstream, like mainstream reporting of this, you can't associate the, you know, correlation is not causation here. So anyway, moving on, let's, let's take a look at what actually happened with ETH supply, because that is a pretty cool story. We're actually not in the ultrasound territory though. So maybe that's a bummer, but tell us what we're looking at here, David.

• 7:53David Hoffman?

  Yeah, so we're gonna just do a review of the Ether supply dynamics post-merge. And you can see that little chart in the center of your screen. It is going up and to the right. So Ether is inflating. It's inflating at 0.19% a year, which is pretty damn low. And I see some Bitcoiners and some Ethereum bears looking at this chart and be like, oh, look, Ether's not ultrasound, it's not deflationary. All the ETH people were wrong. But when you see this chart and you go up and to the right, Ryan, could you go ahead and hit that simulate pow button on the, on the right side so we can see what it otherwise would have? Now look at that. So that white dashed line is what Ethereum was previously pre-merge. And then the blue line at the very bottom is what it currently is. And those are very distinct, very different slopes.

• 8:38David Hoffman?

  And then Bitcoin is about splitting the difference right in the middle there. And the, also the other important thing is that since the merge. There has been 4.7 thousand Ether issued. Where there was previously once 13,000 Ether issued a day. Since Merge, there has been a net total issuance of 4.7 thousand Ether issued. If we were still in proof of work, we would have otherwise issued about 93 and a half thousand Ether. So that is a net issuance reduction of 88,000 Ether that has not been issued since the Merge has gone in. A total sum of about $14 million. $14 million, not insignificant. And how long has it been since the Merge? About seven days, right?

• 9:19Ryan Sean Adams?

  Yeah. It's been seven days. And this is the thing, David, just one week into this, and Ether is not ultrasound post-Merge. On a one-week basis, but of course, it can always catch up, right? Two weeks from now, three weeks from now, maybe months later. And the next bull run, for example, takes issuance down and deep into the negative territory and makes up for this. But for people who couldn't see the lines that you're pointing to, ETH was issuing, or would have been issuing over the past seven days, 3.78%. And to your point, it was actually only 0.19%. And that was as a result of the Merge. So the difference being, we issued 4,700 ETH.

• 10:04Ryan Sean Adams?

  With proof of work, we would have been issuing 93.5. Big difference there.

• 10:09David Hoffman?

  Big, big difference.

• 10:10Ryan Sean Adams?

  Not showing up in the numbers.

• 10:12David Hoffman?

  It's also worth noting that when gas is like basically on its floor right now, right? At 7 Gwei. If we had like a 50 Gwei 24-hour period, that makes up for like three days of net inflation, right? And so the amount of burn is uncapped. And so you can burn like seven days worth of inflation inside of a very small amount of time. And so as soon as you get out of like the depressed bear market era of gas fees, like you can make up a lot of lost ground in a very short amount of time. Is this cope, Ryan? Are we coping right now? You might be coping. Do you feel like we're coping?

• 10:47Ryan Sean Adams?

  I think when people are coping, they don't know they're coping. And I was about to say, no, I'm not. This is not coping, David, but maybe that's what people who are coping say.

• 10:55Ryan Sean Adams?

  Honestly, I'm not that worried about this. Like, you should only be worried about this, in my opinion, if you think block space demand will never recover on Ethereum.

• 11:04David Hoffman?

  Well, if you think block space demand will never recover, you are also thinking crypto is not a thing. Those are synonymous statements.

• 11:11Ryan Sean Adams?

  Right? So, to me, like, it does not compute, is not compatible. Like, that doesn't work, because, I mean, and if Bankless has a fault, maybe we have more than one fault, David, but our fault is that we are permabulls on this industry and on crypto, not over short-term, one-week time periods, okay? Over year-long, decade-long time periods. And, yeah, it's incompatible to me to be short block space demand in that environment. But how does ETH, stack up, Ethereum that is, stack up in issuance versus other networks right now? That'd be a cool thing to see.

• 11:49David Hoffman?

  Yeah, this is where the ultrasound meme really, really takes hold. So Bitcoin currently issuing at 1.75%, which is issuing $17 million a day. Dogecoin coming in, and this is in terms of dollars, so the more dollars you're issuing, the you come first. Dogecoin is the new number-two daily issuer in US dollar terms, inflating at 3.6%, almost $0.8 million a day. Coming in third is Ethereum at 0.15%, issuing $700,000 a day of currency. And so, like, the 0.15% issuance rate is such a clear juxtaposition

• 12:30David Hoffman?

  on every other, like, highly issuing money currency in this space. Like Cardano, 1.3%, Litecoin, 1.3.7%. I don't know where Avalanche or Solana is on this. Sometimes David Meow gets a bug and he stops displaying them.

• 12:44Ryan Sean Adams?

  I'd say 5% to 7%.

• 12:46David Hoffman?

  Solana's at 7%, like Avalanche is like at 8%. Like, yeah, it's like, these are big differences. These are huge numbers.

• 12:53Ryan Sean Adams?

  Yeah, I do think all of this will catch up to the price of ETH, but certainly not overnight. Eventually. A few things with respect to staking rewards. I saw this from our network newsletter. This was very interesting. Look at this portion of consensus rewards, which are basically block rewards versus execution rewards. So post-merge, the rewards to validators saw an increase of 172%. So definitely went up. Not as high as some people were saying. I saw numbers around like the high 5.9s to 6% APY, something like that.

• 13:33Ryan Sean Adams?

  I mean, there was the hope during the bull run, if you use the bull run block, like block space demand, then you get like double digits staking yield. We haven't seen that. We're not likely to see that anytime soon, but 6% not too bad. And more than half of that is coming from MEV and transaction fees rather than pure block space reward.

• 13:56David Hoffman?

  One of my favorite things about just the post-merge world is how many more metrics there are to look at. Like, there's just so many numbers to talk about. As a content producer, I enjoy it.

• 14:05Ryan Sean Adams?

  Yes, we will not run out of content, that's for sure.

• 14:09David Hoffman?

  Knock on wood. Okay, so this is mevboost.org, which is a new website that's very, very useful. This is all about the block building side of the equation. And so just a quick recap, there's block proposers, AKA ETH stakers, people are staking their ETH. And sometimes they want to outsource the role of building a block. They are, for whatever reasons, usually monetary, they will say, hey, someone serve me a block and I will propose that block, rather than building that block myself. Because if you, block building is a skill. It's a competition vector for people to compete on. And there are new block builders on the scenes. These are new entities in the supply chain of building an Ethereum block. So there's flashbots, of course, there's a blocks route, there's block native manifold and Eden.

• 14:54David Hoffman?

  These are all block builders and they are specializing in how to extract as much MEV out of a block as possible. But then there's also things- Things like block route ethical, which is only extracting ethical MEV. So no sandwich attacks and no other malicious stuff. There's also blocks routes regulated. If you choose to be OFAC compliant, you can have the regulated block served to you. And these are all, these entities are all competing as to how profitable they can build you a block. So Flashbots is by far the most used block builder. It's, it's built almost 10,000 blocks so far, producing almost 2,000 ether in rewards for people that have used Flashbots as a block builder, coming in at an average block

• 15:38David Hoffman?

  value of 0.193 ether per block. And then, you know, all of these people are competing on various vectors as to how to make the average block the most profitable. Coming in first, block native at 0.23 ether per block is the most, the best block builder so far in the game, but it's so, so early in this brand new world of block building that, that we will see. Manifold, the one that Ryan is highlighting is a special case. They are integrating with certain DeFi apps like Sushi Swap, which is why they have only proposed a very low number of blocks, 63, but their average block value is 0.6. Right, that's their deal. They are low numbers of block proposers, but high value per block.

• 16:23Ryan Sean Adams?

  Yeah. What's interesting to me is like, okay, so relayers and block builders, they just got jobs on the network. They're newly employed. And this is the same time we said to all of the miners on the Ethereum network, thank you for your service. Your services are no longer needed. We will escort you to your vehicle. Right? And like miners left.

• 16:44David Hoffman?

  Your watch has ended.

• 16:45Ryan Sean Adams?

  And now we have new employees.

• 16:47David Hoffman?

  Thank you though, for your service.

• 16:48Ryan Sean Adams?

  We have relayers and we have builders as well. And the builder market is actually like, it's actually fairly diverse. Like there are a number of different block builders that are gaining some market share. On the relayer side of things, that's, that's been interesting because if you run an actual validating node, like David and myself, so you set up your validating node and then you get to pick which block builder, which block. Relayer you actually want and you can pick based on your values. So I want maybe an ethical

• 17:19David Hoffman?

  Ethical blocks, yeah.

• 17:20Ryan Sean Adams?

  Builder and relayer.

• 17:21David Hoffman?

  Grass fed.

• 17:22Ryan Sean Adams?

  Or you can, yeah, grass fed, organic. Or you can pick maybe something that is in super compliant, maybe the overcomplier block builder, like block, uh, blocks are out regulated. You actually get to choose these things. Now, David and I had a conversation with Vitalik earlier this week and he made the point that there are protocol upgrades coming down the pipeline that will actually nullify the need for relayers. And so we'll always have block builders, but not relayers, which is good because relayers can represent a censorship vector. Anyway, more on that.

• 17:55David Hoffman?

  Centralization vector too, yes.

• 17:56Ryan Sean Adams?

  Yeah, a centralization censorship vector. More on that episode, if you've listened to it, that's coming out on Monday. But to your point, David, there are so many more numbers to look at and the ecosystem has just gotten that much more interesting with, with these new relayers and builders entering the network. All right, well, Ethereum is building blocks. The Fed is raising interest rates. Maybe Jerome Powell is the guy we have to thank for the lower crypto prices this week. The Fed just went big again. This is their third straight three quarter point rate hike. So point seven five, 750 basis points up. This was anticipated, I think, by the market.

• 18:37Ryan Sean Adams?

  This is, uh, of course, you know, Powell has been signaling this for a while and in his comments, he actually signaled more to come. So the comments, I think, were a bit more hawkish than analysts thought. Quotes like this, "The chances of a soft landing are likely to diminish to the extent that policy needs to be more restrictive or restrictive for longer." That's what he said. He also said, "No one knows whether this process will lead to a recession or if so, how significant that recession would be." Not as much talk of soft landing in this discussion. Talk of maybe estimations of maybe a point seven five rate hike again in November, followed

• 19:21Ryan Sean Adams?

  by another half a percent. Cent in December. All right. So we are going up, my friend.

• 19:27David Hoffman?

  Yo.

• 19:28Ryan Sean Adams?

  Interest rates are rising. The Fed is really serious about breaking the back of inflation. So we are now between the new target range of three to 3.25% from an interest rate perspective. So that happened this week and of course, markets risk on assets tumbled as a result.

• 19:49David Hoffman?

  Yeah, sick. I mean, okay, so we merge, we look beyond the merge and we see nothing. And then the Fed says, oh, you know, you want something to look forward to rate hikes? And that actually, I feel like it does a pretty good job explaining the price action over the last seven days.

• 20:04Ryan Sean Adams?

  Oh yeah. You think Powell was like, he saw the merge and he's like, you guys are too happy. Take this. You think that's what happened, David?

• 20:11David Hoffman?

  Yeah, he's got it out for us.

• 20:13Ryan Sean Adams?

  Yeah, that's probably what happened.

• 20:14David Hoffman?

  All right. So like, when the hell is the pivot? I was promised a pivot. I thought like.

• 20:19Ryan Sean Adams?

  Election. You know, maybe November pivot, post, post November pivot.

• 20:25David Hoffman?

  Isn't that November of 2023?

• 20:28Ryan Sean Adams?

  No, there's the midterms are coming up this year.

• 20:30David Hoffman?

  Oh, midterms. Oh, midterm election. Okay.

• 20:32Ryan Sean Adams?

  Yeah, we've got midterms.

• 20:34David Hoffman?

  Okay. Well, whatever. I don't know anything, but like I was always under the impression that the Fed can't raise the interest rates all that much without like bankrupting the United States. So when's the bankruptcy happening?

• 20:45Ryan Sean Adams?

  We're doing it. We're testing this. Not, not at these rates. I mean, there, there've been lots of people like Dan Moorhead from Pantera Capital who's like, hey, the Fed has to raise at least five to six percent. And they should be doing it now. And this is more on kind of the aggressive side and like they have to do it in order to be sustainable. So different macro people have different perspectives on this, but I will give you.

• 21:07David Hoffman?

  No one knows whether this process will lead to a recession or not, or how significant that recession would be. Kind of freaks me out because they, their policy on the other side of things, like I said last week, their policy on the other side of things were like, oh, this issue money, like inflation is transitory. We don't know. It's like, okay, sick. Now we're going in the other direction.

• 21:27Ryan Sean Adams?

  But here's the thing, of course, we know that like high inflation is not politically tenable. Neither are recessions. For those in power, right? So you kind of want to thread the needle and get the balance right. And right now Powell is in the mood to take a hawkish stance on things. But I'll tell you, the prices of something is going up. And that is the price of a 30-year mortgage rate in the U.S. Now, this is raised to more than 6% for the first time since November 2008. So I have never seen rates in my kind of looking at homes lifetime. I've never seen interest rates this high, not even close. And they're still increasing, which is crazy.

• 22:10Ryan Sean Adams?

  And if you want to look at how this looks to an average home buyer, here's a tweet. "The average 30-year mortgage is up from 2.7% to 6.3%. We've got a doubling."

• 22:22David Hoffman?

  That's nuts.

• 22:23Ryan Sean Adams?

  And that means monthly payments on a $500,000 loan last year, that's a home payment, was $2,030. Monthly payments now, $3,100. Housing prices are down 6% in one month, and that is the biggest drop since 2011. This tweet ends, "Recession is an understatement." So how much can you keep cranking the vice grip here, David, before other things break? And that's what macro analysts like Jim Bianco have been telling us all along. They will continue to hike until something breaks. Is the housing market the next thing to break? I'm not sure. We're looking at bonds in Japan. These are other things, like not sure when the next thing to break is.

• 23:06Ryan Sean Adams?

  But Powell and the Fed seem determined to continue this strategy of tightening.

• 23:10David Hoffman?

  Yeah, I can't tell if people that bought a house at the peak of the bull market, like in 2021, where did they buy the top of the housing market, yet also the bottom of the interest rates, of the mortgage rates? Because at the same time, prices are down from all-time highs, but also interest rates are up. So was it a good deal or was it not?

• 23:30Ryan Sean Adams?

  Nice to be locked in right now to a 2.7% fixed loan, 30-year fixed loan. What a gift that is in these rates.

• 23:37David Hoffman?

  But your house is down 6% in a month. So pick your poison.

• 23:42Ryan Sean Adams?

  Yeah, you can't get everything. But if you want some comforting words, Powell has some words on shelter. He said this, "I think that shelter inflation is going to remain high for some time. We're looking for it to come down, but it's not exactly clear when that will happen. It may take some time." Here's, this one's for you, David. "Hope for the best, plan for the worst," Powell said.

• 24:03David Hoffman?

  I don't feel comforted by that at all.

• 24:04Ryan Sean Adams?

  Hope for the best, plan for the worst. This is Stanley Druckenmiller. Not much more good news than what he's saying. This is a video quote from an interview series he did. He said, "There's a high probability in my mind that the market at best is going to be kind of flat for 10 years, sort of like 1966 to the 1982 time period." That's not a favorable time in American history with respect to like the prices of stocks and equities markets and that sort of thing.

• 24:34David Hoffman?

  That is a huge take. 10 years of flat?

• 24:38Ryan Sean Adams?

  Yeah. So, I mean, I don't know what this all means, right? But like, I think one thing that we're seeing, of course, is like when prices go down, when it seems like there's bad news on the week or in the month, then things like this, Druckenmiller quotes, surface, right? Who knows how long he's been saying this? Who knows how long other investors have been kind of saying this? So, there is kind of an information bias when it comes to bad news always gets magnified during bad weeks in the market. I think that's at play. But, the question remains, I think, what would crypto do in a flat 10-year period? Is that going to happen?

• 25:21Ryan Sean Adams?

  And if it does happen for equities, what does that mean for crypto as an asset class? I'm not really sure how to wait these, how to understand them, but I think it's more content we should do on Bankless to figure that out.

• 25:34David Hoffman?

  The answer, what I want crypto to do during that time, I mean, of course, I want the answer to be to go up, but that's, you know, you can't ask for that, obviously. What I want it to do is decouple. Do something else. Like, do something different. And like, maybe that's how this like bear market slowly plays out is like, you know, this S and P market, which moves slower than crypto markets crabs for 10 years, but then four to five years into it, we have just another classic growing season in the crypto world. That's maybe.

• 26:06Ryan Sean Adams?

  That's what you want to happen, David?

• 26:07David Hoffman?

  Yeah, I wanted to decouple sometime.

• 26:10Ryan Sean Adams?

  Later, later in the conversation, Druckenmiller did say, like during the 1970s was it was a good time for many companies. I mean, that was the time when Apple was founded, for example. Home Depot was founded. And of course, we do know that crypto markets tend to move much faster than traditional markets. So the pain is more severe. The dips are shorter in general. But yeah, we'll have to see. This could be uncharted territory. David, what do we have coming up next?

• 26:36David Hoffman?

  Coming up next, the White House has some words for us in the crypto industry. Is it time to sound the alarm? We'll figure that out. 60, $160 million hack, got to reset the counter on that one. And what's next now that the merge is behind us? What are we going to talk about? What's the new meta? Is there, what's the new narrative? Can we create one? Because there's definitely content bear market going on. So all of that and more, right after we talk to some of these fantastic sponsors that make the show possible. Arbitrum is an Ethereum Layer 2 scaling solution that is going to completely change how we use DeFi and NFTs. Some of the coolest new NFT collections have chosen Arbitrum as their home, while DeFi protocols continue to see increased liquidity and usage. You can now bridge straight into Arbitrum for more than 10 different exchanges, including

• 27:19David Hoffman?

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• 28:02David Hoffman?

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• 28:45David Hoffman?

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• 28:49Ryan Sean Adams?

  All right, guys, we are back. The Biden administration, the White House, just released their first ever comprehensive framework for responsible development of digital assets. By that, they mean crypto. And the Biden administration charged a whole bunch of branches in the White House to go and investigate crypto. And this is the report. This is what they came back with. David, what's some of the summary from this report?

• 29:15David Hoffman?

  Yeah, there's just different headlines, different goals that this report wants to see out of the crypto industry. Coming in at number one, protecting consumers, investors, and businesses, which, yeah, I mean, I guess that makes sense to lead with, especially coming from the White House who are trying to protect their citizens. It's no secret that crypto is full of scams and exploits and hacks. How the White House and how the government plans to solve that problem? Curious to see. Anyways, that's number one. And number two, promoting access to financial services. Number three, fostering financial stability. Four, advancing responsible innovation. Five, reinforcing the country's global financial leadership and competitiveness.

• 29:56David Hoffman?

  Six, fighting illicit finance, anti-money laundering, counterfeit financing of terrorism, etc. And seven, exploring a US central bank digital currency. I don't know how much I should read into the ordering of these things, but it would make sense that the White House would put protecting consumers first. So that's like, let's not do things like algorithmic stablecoins. Let's not promote scams. Interesting that number seven, blast, is the C. B D Z, which definitely tracks with all the other institutions, like government institutions out there that are like, oh, we'll research and talk about.

• 30:32Ryan Sean Adams?

  Let's explore.

• 30:33David Hoffman?

  Let's explore.

• 30:34Ryan Sean Adams?

  Think about it.

• 30:34David Hoffman?

  Let's think about, like, talk about it. Yeah. What are your takes on this?

• 30:38Ryan Sean Adams?

  Yeah, so when I read this, David, I guess a few things like stood out for me, like just some keywords, like if you did a keyword search, there were a lot of like words that can note danger or risk or illicit finance. And there was also some some C D B C, even though there is a section about competitiveness in America and protecting innovation, like there wasn't a lot of meat on the bone in the in those sections. And so for me, this report was pretty bearish. Now, I didn't go into all of the detail because there are many like branching reports and it's very long, but there wasn't a lot of talk about like the potential of crypto. Wasn't a lot of talk about the the value of DeFi in our

• 31:20Ryan Sean Adams?

  economy. There wasn't a lot of talk about how America would lead the way from an innovation perspective. And I was left as kind of like a fellow builder and investor in the space and crypto, being like, why, what's there for me in America? Like, why should I build here? It was pretty uninspiring, I think, for US entrepreneurs and builders. Hopefully, it's just a lot of like talk, similar to the C D B C type talk, and maybe there won't be negative action kind of taken. But one thing that became clear, and this was a take from Jake Trivinsky, that kind of the, of course, you'd expect them to come down pretty hard on like illicit finance and money laundering, that sort of thing, because this is the government

• 32:02Ryan Sean Adams?

  after all. But also algorithmic stablecoins kind of took center stage in the report. This is Jake Trivinsky tweeting this. It's hard to overstate the damage that Terra has done to the perception of crypto in DC. Many policymakers already disliked the notion of a permissionless digital marketplace and wanted to put all of crypto into a well sealed box. Terra gave them unjust cause to push forward, or maybe just cause. And I think that's what like lawmakers and those in DC are actually thinking. So. Terra, Luna, Doquan, the ecosystem, the community, that entire thing that just happened, you know, six months ago.

• 32:43David Hoffman?

  Oh, yeah, that $50 billion that we deleted, oops.

• 32:46Ryan Sean Adams?

  I put a damper on this entire report. I mean, a lot of people think it could have come out a lot different if Luna hadn't just happened six months ago. Now, how can you be optimistic on quote unquote DeFi, like when that sort of thing is going on?

• 33:05David Hoffman?

  But, okay, can you help me understand, what is this thing? White House releases comprehensive framework for responsible development of digital assets. What does this really mean? Like, are they just issuing a report? And like, we issued a report?

• 33:21Ryan Sean Adams?

  I think they're issuing a report, they're issuing some guidance, they're starting to develop a posture, a policy on kind of what Biden might support, what might he not support, the things that people should explore.

• 33:34David Hoffman?

  This is for themselves, though, right? They're like, here's our report for our own stance towards crypto?

• 33:39Ryan Sean Adams?

  It's influential, I think, across all branches of government, right? So, everyone's reading this. What we're seeing-

• 33:46David Hoffman?

  And like, a lot of branches of government are reading this and be like, okay, this is how we should act?

• 33:50Ryan Sean Adams?

  I think this is how Biden wants us to act, or this is kind of the White House's posture. I think it's influential in that way. And we're starting to see some legislation, particularly on the stablecoin front. So, this week, we learned of a draft stablecoin bill in Congress. This is all about stablecoins. We don't yet have the details of what this bill actually is. It's in the House right now. But there's talk of bans on different types of payment coins that are not backed by outside assets. So, similar to Terra and UST, that algo stablecoin that, of course, collapsed. And so, bans on maybe algorithmic

• 34:31Ryan Sean Adams?

  stablecoins? Now, I have to say, we haven't seen the details yet. This is all kind of closed doors, so we don't actually know what might be inside of these bills. But it's kind of alarming that, you know-

• 34:45Ryan Sean Adams?

  That we wouldn't pick on the centralized aspects of a Terra and would extend, maybe extend the blame to a class called algorithmic stablecoins. And who knows how far, like would RAI be included in that, for example, which is collateralized backed by ETH and not really pegged to the dollar as kind of a control mechanism? Could you imagine having to explain RAI? Well, is Maker an algo-stablecoin? I mean, it's enforced by code, right? Maybe this definition is broad enough to include Maker, for example, or how about Frax, which uses a combination. And so if these experiments fall under the purview of such a bill, I don't think that's a good thing for crypto. Like, that's a very bad thing. That puts us farther away from non-state money, at least the legality of non-state money in

• 35:30Ryan Sean Adams?

  the US.

• 35:31David Hoffman?

  And Brian Armstrong made a comment about this. He said, "One of the strongest policy arguments for cryptocurrency is that it's a national security issue. The US missed out on semiconductors and 5G, which is now largely manufactured offshore. It can't afford to have cryptocurrency go offshore as well. Same for every country, by the way." And then he continues, "Regulation by enforcement has a terrible chilling effect and rhetoric matters. We've already seen a huge amount of crypto talent, asset issuers and startups go offshore." And he finishes, "Coinbase is a global company, but we're based right here in the USA and we'll fight to make sure crypto succeeds here for everyone. It's too important for America and the free world." And this is why, Ryan, I was asking you, like, what is this report really doing?

• 36:14David Hoffman?

  What is, how is it moving the needle? Because every time I see a report like this, like, and we always joke about like, "Oh, the United States decided to have a meeting to talk about and research CBDCs without actually implementing anything." And like, yes, it takes time to do regulation, but the crypto industry builds so fast that like, we're going to build faster than they're going to be able to comprehend this industry. And that is always going to create a source of friction because of what you just said. Maker Dow, is that algorithmic? Because that's fully collateralized up to like 300%. Frax, is that algorithmic? Because there's only 10% of that supply that's algorithmic. And then there's Terra. That's algorithmic. Algorithmic's a bad word. They don't even know, we don't even know the words that we need to describe our own industry. And so like, there's so much just chaos and confusion

• 36:59David Hoffman?

  in this space that like, whatever regulation or report that they produce, I feel like it's always just going to lag behind what's actually needed.

• 37:07Ryan Sean Adams?

  I think what's most alarming, though, is if the first principles in the report are kind of wrong, right? Where we do need regulation, and I think we've always said this, is where things are centralized, they should be regulated.

• 37:21David Hoffman?

  Yes.

• 37:22Ryan Sean Adams?

  Where they are more decentralized, they don't require as much regulation. The regulation is the code. It's fully transparent, it's all unchained, there aren't humans in the middle. And so if they make that categorical error of taking, mixing up the difference between centralized and decentralized, and taking an entire use case like algo-stablecoin, pointing at that and saying, "That's the bad thing. No more algo-stablecoins." I just think the implications of sloppy regulation, sloppy legislation, could impact our industry in a big way. And particularly when I say "our industry," I mean those in the US. Because outside of the US, these experiments may continue to run, and as Brian Armstrong said, what's going to happen? US will be leapfrogged, right?

• 38:07Ryan Sean Adams?

  Just like they missed out on the 5G opportunity, they missed out on the semiconductor opportunity. That's what's at stake here. And so that was the White House report, there's a House bill on stablecoins that's happening. There's actually been an earlier proposition of a stablecoin bill in the Senate as well. But apparently, on the Senate Banking Committee, we don't have many fans of crypto. This was an article that was released just yesterday.

• 38:36David Hoffman?

  Right, and the Senate Banking Committee is not fans of crypto? I am just shocked.

• 38:40Ryan Sean Adams?

  Right. So, the Ask Senator Brown, who's the Chair of the Committee, about crypto, and this was his direct quote, "Let's just say there's a healthier skepticism about crypto and banking, housing, and urban affairs committee than there is in the ag committee." That's the agricultural committee he's talking about. "Every single member of the Banking Committee, with the exception of one, has serious, serious skepticism of and concerns about crypto." Well, do you know who the one is, David?

• 39:10David Hoffman?

  I have a guess.

• 39:11Ryan Sean Adams?

  The one who doesn't have concerns? This is Senator Toomey, who's actually coming on the Bankless Podcast next week. And I don't know if you saw this, David, but he had kind of a sparring match. Did you watch this video with Gary Gensler?

• 39:25David Hoffman?

  It was so good.

• 39:26Ryan Sean Adams?

  All right.

• 39:26David Hoffman?

  It's like when politicians make sense, it's just like, it feels like a weight is off your chest. Like, thank you, Toomey. Thank you.

• 39:33Ryan Sean Adams?

  Yeah, so there was some back and forth between Toomey and Gensler in a Senate committee meeting. And Gensler was basically saying, hey, all tokens are securities. There are almost all of them that I've seen because most of them depend on the profits of others. I'm not saying this. The Supreme Court is saying this. There's something called the Howey Test. And Toomey was coming back and saying, yeah, but not if they're sufficiently decentralized, though. And Gensler was kind of like dancing around that term, sufficiently decentralized. And Toomey said, well, profits of others, that's just one prong of the Howey Test. And there are like four, like, he didn't say this, but the question imposed is like, are Pokemon cards securities? How about concert tickets?

• 40:14David Hoffman?

  If the number goes up, is that security? No, is the answer to that question.

• 40:18Ryan Sean Adams?

  And he was pleading, he was just saying, please give us clarity. There's a lack of clarity for the industry. Please, Gary Gensler and SEC, give us clarity. And Gensler repeated, but there's already clarity. The Supreme Court said so in the Howey Test. And on and on it went for like four minutes.

• 40:34David Hoffman?

  He's just passing the buck off to the Supreme Court, right? He's like, everything's a security, go ask the Supreme Court. But he's just putting words in the Supreme Court's mouth.

• 40:44Ryan Sean Adams?

  That's what he's doing, which is, which is interesting because maybe these sorts of cases end up at the Supreme Court level. Maybe that's how they ultimately get resolved.

• 40:52David Hoffman?

  It's where he's funneling them, that's for sure.

• 40:54Ryan Sean Adams?

  It seems to be. And, and yeah, that's, that's the White House report. That's what's going on in DC in crypto during the bear market. David, we also got a hack this week. What happened?

• 41:05David Hoffman?

  $160 million WinterMute hack. This was an interesting one. And so there's this way, there's these things called vanity addresses. They're not like ENS addresses where you like buy a name. They're something where you like, you basically mine for an address. You use like a CPU or a GPU. You produce a bunch of hashes and you try and check for something that you're looking for. And so like, say you want an address that starts with 0x000000. You can't actually intentfully make that address. You have to just like discover a private key that corresponds to that address. And so that's what Wintermute did. They mined for an address with this application called Profanity that helped them do this.

• 41:48David Hoffman?

  And they got an address that started with like a large number of zeros. It was like six or seven zeros. People just do these things because it's cool. I remember there was like a big excitement when somebody in like Bitcoin land in 2017 found an address that started with flame. And that was like super cool. Obviously you can't share the private keys because there's only one set of private keys. But like people like to do these things. Anyways, Wintermute used this app called Profanity to make a profanity address which started with like eight zeros. Turns out the code that Profanity used was faulty. And so it was very exploitable and that's what happened here. And so are you at risk of the same exploit? If you've used the app Profanity, you might want to double check. But for like 99.99% of people, you're fine. You're fine.

• 42:33Ryan Sean Adams?

  Definitely not worth it to get that vanity address, right?

• 42:36David Hoffman?

  It's definitely, it's possible to do it in safe ways if you double check everything like all smart contract addresses. You just got to make sure you know what you're doing.

• 42:44Ryan Sean Adams?

  Just kind of why, why take the risk?

• 42:46David Hoffman?

  Yeah.

• 42:47Ryan Sean Adams?

  Clicking buttons on your ledger in Metas. Yeah, it's, it's risky business sometimes. And Wintermute, of course, they were a crypto market making firm. That's why they had so much money in a hot wallet. Because this was a hot wallet as well, was in cool storage.

• 43:02David Hoffman?

  That's a lot of money in a hot wallet.

• 43:03Ryan Sean Adams?

  Yeah, it's a lot of money. I do think that the lesson here is, and this was a good summary from a website I found called Halborn. The profanity vulnerability address generator was abandoned by its creator. So this project was actually abandoned by its creator, which is not a good sign multiple years ago. So when performing high risk cryptographic operations such as private key generation, it is best to use a tool that is reputable, audited, and still actively supported.

• 43:33Ryan Sean Adams?

  Key takeaway for bankless listeners, I think.

• 43:34David Hoffman?

  Yeah, I mean, this feels like common sense. Anyways, moving on into our big news item of the week, which is an absence of news, actually. And so the big meta question is, now that we're post-merge, like, what's the next catalyst? What's the next thing that we're going to focus on? What next? And I think this has been the meta conversation in crypto Twitter lately is, what's on the horizon? Like, what do we have to look forward to? And I feel like that lost feeling of where are we and where are we going when people don't have an answer to like, what is next in the crypto world is like showing up in the price action. Prices are down because people feel like they are confused as to like, where is the next catalyst?

• 44:17Ryan Sean Adams?

  It's not a supply problem. It's a demand problem.

• 44:20David Hoffman?

  It's a demand problem. And so like, it turns out post-merge that there's like, not that much juice to squeeze out of crypto. Like, there's, the merge was kind of it. And like, you know, straight up, retail just needs a rest. And this is just how crypto works. Like, retail comes in, they pump up the markets and they make institutions follow them. And then they get exhausted, right? Like, the NFT gas markets are hard, DeFi is complicated, bridges get hacked. So like, retail needs a rest. But they always come back. Retail always comes back. You just gotta, you just gotta let them sit for a little bit and then we'll poke that door later. There's also like macro fears on the rise. We talked about macro all like for the first like 30 minutes of this podcast. But then

• 45:02David Hoffman?

  there's also the pivot on the horizon. And so like, we have these, we have this period of time where like, things just got really calm, really quickly, and really depressed. And now we're like, having to contend with like, what's next? Ryan, what's your attitude with this?

• 45:19Ryan Sean Adams?

  My attitude is, this is normal. This should be expected. We've seen this before in crypto. We're going to see it again. This is a take from DC Investor. And he says, if you were here from the crypto class of 2020, 2022, 2021, and are still here in 14 months, then I might, from that point onward, consider you legit. This is the great filter, he calls it. So that's where we are in the market, the great filter. A whole bunch of people who just came in recently, class of 2020, 2021, are about to get filtered out. They're about to leave. And so this is an analogy we often use of the difference between settlers and tourists. The tourists leave, the settlers

• 46:02Ryan Sean Adams?

  stay, and we build, we rebuild for the next cycle. And I gotta say, David, and this goes back to kind of probably my main take of the week that we'll get to is why I'm bullish. I'm bullish because the builders are continuing to build, my friend. I have never seen more building activity go on on the Ethereum protocol layer, for example, even just shipping the merge and everything that's next that we just talked to Vitalik with. But then on the application layer, I mean, bridges being built, layer two is being built out and hardened. DeFi apps, a whole new generation of these DeFi apps. GameFi is still happening in the background. NFTs, like, we are building more than ever before. I think this market

• 46:46Ryan Sean Adams?

  cycle to me proved that crypto has product market fit. All right. In 2018, before DeFi, wasn't sure, didn't know for sure. It was kind of a guess. And that's why, by the way, prices of ETH are like, you know, 10x higher. It's because we have product market fit. But what's going to happen over the months to come is the tourists are going to leave, the settlers are going to stay, we're going to build, and we're going to be ready for the next cycle because I do believe the next cycle will come, independent of macro. This is not even a bet based on macro. Maybe macro will help things happen faster. But I don't think crypto can be stopped due to macro. I mean, this is an exponential revolutionary

• 47:29Ryan Sean Adams?

  technology, and it can grow past macro in the stock market quite easily. It doesn't actually take that much. It just takes some real world use cases to completely expand.

• 47:41David Hoffman?

  And there are things that are literally next. We're going to have the withdrawals unlocked. Not that that's fundamentally bullish. But then there's EIP 48404. The ZK EVM, the gold standard of scalability, the ZK sync's launching in 36 days. So there are things, Ryan, technical protocol developments that are literally next. It's not, however, it's not the protocol that triggers bull markets. These protocols are the platforms for applications that then trigger bull markets. And this is the thing that people that stick around during the bear markets are able to observe firsthand that newcomers that come because of a bull market are always catching up on.

• 48:21David Hoffman?

  Is that like the 2021 bull market was the DeFi summer of 2020 and NFTs exploded on Ethereum? And that was the Ethereum app layer bull market. This is where Ethereum gas fees hit like 600 and like stayed there for weeks. What that triggered was another, another bull market in protocols that wanted to like also share in this avalanche, Solana, Phantom. But like it always starts with the protocol. And so we are having protocols now, like the ZK EVM out of ZK Sync, Polygon, like so many of all these teams, Starkware. Oh, Starkware's not doing one, actually. But like, and then also 4844 where like the, the brakes get unleashed out of layer twos. So these are the things, these are the things that are next.

• 49:04David Hoffman?

  They're not like fundamentally bullish, but they produce the platforms for bull markets to exist on. And you're only going to watch that if you were here. I remember Ryan going through 2018 to 2020, having, having this gut instinct that like, I have no idea when the bear market is going to end. But when it does end, it's going to end quickly and it's going to rocket. The prices are going to rocket. And when Ether broke $400, it broke $1,000 like two or three months later. So you have to stick around to observe this.

• 49:33Ryan Sean Adams?

  Can, can you share that story? Because, um, so Bankless, Bankless tweeted something out. It said, um, for real, how did you actually become a millionaire in crypto? Like for, for those of you who did it, how did you do it was the tweet? And I actually didn't expect you to respond, David, but like you responded with your story. What, what is your story? Like, how did you do well in crypto during the last bear market?

• 49:55David Hoffman?

  I got a job in crypto that made it easy to pay attention to crypto. So it was my job to stay up to date with the meta. And so that was, I was consuming information all the time, like learning, learning, learning about how this thing works. And then with whatever money I had after rent and rent and food, I bought ETH, like 100% of it. And I remember when Ether broke down to $80 in COVID again, I literally stopped. I'm not saying that this is healthy, but like my friend was like, hey, let's go on a trip. And I'm like, dude, the, the cost of this trip in ETH terms is astronomical.

• 50:35David Hoffman?

  And so like, like you, I definitely did like cut off like general like life activities. But it was just because like I, I saw these prices in ETH terms. I'm like, this is, I can't justify this expense.

• 50:46Ryan Sean Adams?

  An opportunity.

• 50:47David Hoffman?

  Yeah. And like then eventually after like a very like subdued two years of activity where I was just like working at my companies, eventually starting Bankless and consuming and learning and producing content. That all came to like, I was able to cash in on that rapidly in 2021, when Ether goes from $400 to $4,000 inside of 12 months, right? And so like you can't afford to like not pay attention because like the alpha you get from being ahead of the bull market is insane. It's the difference between buying the top and selling the top.

• 51:21Ryan Sean Adams?

  The ability to see.

• 51:22David Hoffman?

  Not that I sold the top.

• 51:23Ryan Sean Adams?

  The ability to see DeFi, like DeFi summer before it happened. I mean, we saw that.

• 51:27David Hoffman?

  It was obvious. All people that participated in DeFi summer saw the 2021 bull market a year in advance.

• 51:33Ryan Sean Adams?

  Yeah, I totally agree. This is a post that caught my attention from Matty earlier this week. And he, he talked about some possibilities, some things if you were a settler to look out for. An actual DeFi 2.0, he mentions web three commerce, web three social, decentralized science, D-sci, the world of atoms where kind of like physical meets crypto. And there's all sorts of different areas you can take a look at. And I love how he concludes his post, which is just like, I don't really know what the next big use cases are going to be, but I'm here and I'm going to watch them and observe them and find out. So that's what you have to do if you want to do well in cryptos. You can't be the tourist who just comes in during, you know, the tops of the cycle.

• 52:17Ryan Sean Adams?

  You have to stay for the long run. So I think that's what's next for us, David. We're going to keep staying. We're going to keep doing what we're doing with Bankless.

• 52:24David Hoffman?

  And what is literally next in the show? Universal Studios doing an NFT scavenger hunt. So this is kind of that story, the adoption of NFTs and creative in different ways. Universal Studios getting into it. Tether, once again, under the microscope. Seems this happens every 12 months or so. And DoKwon, an Interpol notice, but we don't know where he is. So we're going to find out all this stuff and more right after we talk to some of these fantastic sponsors that make the show possible. Juno is bringing crypto-friendly banking straight into your checking account. With Juno, you can send money from your Juno checking account straight onto a Layer 2, like Polygon, Optimism, Arbitrum, and they have ZK Sync and Starknet support on their way. You can skip the ACH wait times, you can skip all the gas fees, and go straight from your checking account to an Ethereum Layer 2 in seconds.

• 53:08David Hoffman?

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• 53:52David Hoffman?

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• 54:23Ryan Sean Adams?

  The new proof of work Ethereum fork, David, it's down 75% already. It seems like it's kind of dead. Is that a shocker to you?

• 54:31David Hoffman?

  Not at all. While I was sad that the merge was definitely priced in, at least I got this one right. The Eathrow chain was a nothing burger. Like, I'm not surprised in the slightest.

• 54:44Ryan Sean Adams?

  That is some solace. And Fura as well, they are a network that provides a lot of the data to different wallets that you use, a lot of the infrastructure, node infrastructure that powers Ethereum. And they are announcing that they are planning to decentralize their infrastructure. I think this is a long time coming and very hoped for for many in the Ethereum community, that we would have more decentralized options rather than just the Infurys and the Alkmes of the world. Do you have anything to add to that, David?

• 55:13David Hoffman?

  I think with somebody, a big protocol like Infurys, as we plan to decentralize, it's fair to say token. Because if you want to continue development, how do you incentivize that development while also being decentralized? It means a token. This is a very key piece of Ethereum infrastructure. It's a source of critique from external Ethereum people because like, you know, your MetaMask hooks into Infura to relay transactions, and if Infura wanted to censor you, you probably could. So decentralizing Infura is a very big deal. So this is a very big step out of Infura, also fitting with Consensus's new meta of wanting to tokenize and decentralize as many of its products as possible. So best of luck on the journey into the decentralized frontier in Fura.

• 55:55Ryan Sean Adams?

  I'm still waiting on that MetaMask token though, David. Someday.

• 55:59David Hoffman?

  Yeah, keep on, don't hold your breath on that one. Something new out of the StarkX ecosystem. They tweeted out, "Bug found and fixed shortly after launch, but how it was found and fixed is pretty cool." The bug was found by Vlad Pachok out of Matter Labs and Ihor Berenblatt. These are Russian names that I'm terrible at pronouncing. And Starkware says, "We deeply share, we share our deep appreciation and thank them for alerting us. This is an excellent example of good community spirit." And then DC Investor, who retweeted this, saying, "ZK Sync devs found a bug in the Starkware ecosystem and communicated..." To them to make sure that it could be fixed before anyone found could be harmed by it. Respect to the right kind of ethos to move us forward.

• 56:41David Hoffman?

  And then ZK Sync says, being mission driven means helping everyone in the Ethereum ecosystem. Glad we could help Starkware stay secure. Nice job. Nice job. This is good. Good move.

• 56:51Ryan Sean Adams?

  Harvest that goodwill clout.

• 56:53David Hoffman?

  Yeah, that's exactly right.

• 56:55Ryan Sean Adams?

  This is OpenSea excited to share that they just released OpenSea on Arbitrum, or at least that's going to be happening soon. So adding other networks to the fray, I think they've added Polygon, maybe Solana, if I'm not mistaken, and now Arbitrum. So excited to see all of the Layer 2s join the ranks of an OpenSea supported network. David, this is some cool NFT news. Universal plus NFTs and a scavenger hunt? What is all this?

• 57:22David Hoffman?

  Yeah, I thought this was pretty cool. It's a pretty clever use of NFTs. So basically what they're doing is they are just issuing, they're putting seven different QR codes around their Halloween era themed parks. Like every Halloween, they themed their park Halloween themed. And it's a scavenger hunt. And so people run around the park and they scan seven QR codes. And then you get an NFT when that's scanned. And visitors who scan all seven of them receive a special NFT, which according to Moonpay, the crypto payment service that's partnering with Universal on this, said can unlock additional perks. This is what you like, if you don't know what to do with your NFTs, this is what you do. You make it hard, you make them hard to get. And then you make them unlock certain things and access to more things.

• 58:06David Hoffman?

  Like it's the most basic roadmap for all NFTs. Universal doing a good job with this and making it fun. And I guess congrats to Moonpay for partnering with them on that. That is a huge, huge partnership.

• 58:17Ryan Sean Adams?

  Tether under the microscope again. Stablecoin issuer Tether ordered to produce documents showing what USDT is actually backed by. This is, I think, a US judge in New York requiring that Tether do this. And that's all good. This is back to what we were saying is if you're centralized, you should be under the scrutiny of regulators. Like we should know what USDT is backed by. You shouldn't be able to ban it completely, but we should have full transparency and visibility here. So I don't hate this. I'm excited to get the definitive view on what Tether is actually backed by. Cause that's always somewhat been kind of a mystery in crypto.

• 58:56David Hoffman?

  I will say this does happen every now and then. I think the last time this happened was in like 2019, where Tether was like forced to disclose its holdings and it was like, okay, it's all there, moving on. But like you said, that was a one snapshot in time that's now like three years stale. So I guess we'll just do this all over again. I'm expecting Tether to come back with plenty of reserves.

• 59:17Ryan Sean Adams?

  Like USDC does it every, every month, right?

• 59:21David Hoffman?

  It feels like they do like every block or something, yeah.

• 59:23Ryan Sean Adams?

  But it's like, that's the way it should be if you're centralized. So you should have audited financial reports for what actually backs the dollar here. David, there seems to be some back and forth between FTX, SBF that is, Sam Bankman-Fried, and CZ. They are, they are buying all sorts of things. These are the two crypto banks that have money in this bear market and they are

• 59:47David Hoffman?

  Yo, me too.

• 59:49Ryan Sean Adams?

  It feels that way, David. So this is FTX, they're in the lead to buy the crypto lender Voyager. Remember that was the one that went bankrupt. Some of its assets are still worth something, some of its customers, I assume some of its software. And they're in a bidding war with Binance, CZ from Binance. So back and forth they go, trying to snap up all of these companies that have failed so hard and take their assets.

• 1:00:16David Hoffman?

  Yeah, so you said FTX bid was in the lead, but this article came out before it was disclosed that actually Binance's bid was slightly higher than FTX's, according to what this article cites as "some people." So I guess citation kind of needed, but this is what some people are saying. Yeah, SBF versus CZ, these two people with letters for names going after it.

• 1:00:40Ryan Sean Adams?

  Meanwhile, Do Kwon is on the run, question mark? This is the headline, "South Korea asks Interpol to issue red notice for Terra co-founder Do Kwon." David, what is a red notice?

• 1:00:53David Hoffman?

  Yeah, a red notice is an international agreement. It's like, yo, this person, if you find or see this person, grab them. And so, red notice out for Do Kwon, yeah.

• 1:01:03Ryan Sean Adams?

  There's like no hiding from it, like most Western countries and, you know, most countries I think in the world are in the Interpol red notice list, are they not?

• 1:01:11David Hoffman?

  Uh, yes, I believe so. So, South Korean says they moved to invalidate his passport days after they issued the arrest warrant. And then they have a definition of a red notice here is a request for law enforcement worldwide to locate and arrest the named individual and hold that person until extradition processes can begin. Uh, not 195 countries. Um, so.

• 1:01:32Ryan Sean Adams?

  Wow.

• 1:01:33David Hoffman?

  Yeah.

• 1:01:34Ryan Sean Adams?

  Pretty much all of them.

• 1:01:35David Hoffman?

  Can't hide, can't run.

• 1:01:36Ryan Sean Adams?

  What's weird is earlier this week, Do Kwon tweeted this, "I am not on the run", in quotes, "or anything similar, for any government agency that has shown interest to communicate. We are in full cooperation. We don't have anything to hide." He's not on the run, yet he has an Interpol red notice after him. Uh, one of these things doesn't make sense.

• 1:01:56David Hoffman?

  Only one of these things can check out.

• 1:01:59Ryan Sean Adams?

  So, uh, it's, and this is like, I can't even believe all of this happened this year. Do you remember like?

• 1:02:05David Hoffman?

  It was this year!

• 1:02:06Ryan Sean Adams?

  March of this year, Do Kwon was riding high, torching people on crypto, talking about ending DAI, um, talking about like how, I don't know.

• 1:02:17David Hoffman?

  Ryan Sean Adams doesn't know anything about crypto.

• 1:02:20Ryan Sean Adams?

  Mike Novogratz is getting tattoos.

• 1:02:22David Hoffman?

  Do you remember that tweet?

• 1:02:23Ryan Sean Adams?

  Oh yeah, I remember that tweet. Uh, and now, like, months later, there's an Interpol notice for him. Like, he's wanted in 195 countries. How crazy. How quickly things change.

• 1:02:34David Hoffman?

  That's one of my, like, favorite things, bull market shenanigans that happened, is, uh, Mike Novogratz gets the Luna Wolf tattoo. You comment below that, "This makes me question everything I know about crypto." Do Kwon replies to you, "Don't worry, it wasn't much to begin with."

• 1:02:52Ryan Sean Adams?

  Yes.

• 1:02:53David Hoffman?

  And then all of the lunatics, like, laugh at Ryan Sean Adams, then Tara blows up, and now Do Kwon's on the run. And like, and Mike Novogratz makes a statement of like, "Yeah, this is gonna be one of these memories I have, like, I have to live with for the rest of my life."

• 1:03:06Ryan Sean Adams?

  Yes.

• 1:03:07David Hoffman?

  It happened in the last, like, five months.

• 1:03:10Ryan Sean Adams?

  I wouldn't believe it. If you gave me the script for this movie, I wouldn't believe it.

• 1:03:13David Hoffman?

  No way, no way.

• 1:03:14Ryan Sean Adams?

  This is cool. What is the Tribe community doing as a result of the Rari hack? Because there was word that they weren't going to pay back victims. And now maybe they're changing course and they are going to pay back?

• 1:03:26David Hoffman?

  Yeah, it looks like it. Yeah, the Tribe DAO team has said that they are going to call it quits. And this caused definitely a lot of consternation because there's plenty of assets in the Tribe DAO treasury. And the Tribe token holders were going to vote to distribute those assets to token holders. And then partially pay back people that lost money in the Rari hack. Rari now part of Tribe. But it actually looks like that a vote was passed on-chain to fully pay back the victims inside of 24 hours from this tweet. So this should have happened by the time you are listening to this. So it looks like hack victims are being paid out in full before Tribe DAO token holders are liquidating all assets. The way that it should be. So, nice job.

• 1:04:09Ryan Sean Adams?

  DAOs doing the right thing. I wonder if there's pressure on them or they just decided to do the right thing?

• 1:04:13David Hoffman?

  There's certainly pressure. I'm sure there was pressure.

• 1:04:16Ryan Sean Adams?

  Helium signs a five-year agreement with T-Mobile for the Helium Mobile launch. That is according to CoinDesk. This is huge. This is from Tishar from MultiCoin. "Helium Mobile just launched their own cellular plans, which will combine the Helium 5G network and the T-Mobile network. Helium Mobile plans will start as low as $5 per month and subscribers will mine mobile tokens using just their phone." That's pretty crazy, David. What is Helium for people who aren't aware?

• 1:04:46David Hoffman?

  Helium is this mesh network of cellular connection. And so plenty of people, some of my friends here in Brooklyn and New York, have these little like helium router node things on their roof, kind of like where you would put like a satellite dish. And so people that are walking by that are connected to the Helium network can tap into your little helium node and then use that node for data. So your helium node hooks into your wifi or your internet service provider. And then you bounce that wifi to somebody who's got their phone out that's local to you. And these things are short range. I think it's something like maybe a quarter mile or perhaps even much less than that. But the idea is like many, many, many people all put these on their houses. And so in densely populated areas, you can go and like

• 1:05:29David Hoffman?

  get data from this helium mesh network, helium network thing. I don't really understand the tokenomics behind it. This is actually a project that I haven't really dove into much. But a partnership with T-Mobile is crazy.

• 1:05:41Ryan Sean Adams?

  T-Mobile is great. Yeah. So I think the rough approximation of the token economics is early adopters win bigger, right? As the token price appreciates. So this is kind of one of the use cases for tokens, which is how do you bootstrap an entire cellular network? And the way you do that is through token incentives, particularly reward the early adopters. And so maybe that's what's working out here. I think we should do more content on helium and figure it out in some more detail. But yeah, it's certainly a big move here. It got our attention.

• 1:06:13David Hoffman?

  The founder of Kraken, Jesse Powell, not to be confused with Jerome Powell, stepping down as CEO. So getting new leadership and David Ripley, Kraken COO, will be taking over as CEO. So that's the news.

• 1:06:28Ryan Sean Adams?

  There you go. Jesse's watch has ended as well. Did you know, David, the NASDAQ is planning to launch an institutional crypto custody service? The NASDAQ Stock Exchange, which is kind of weird because at the same time Gary Gensler is talking about all your C20 tokens maybe being securities and NASDAQ is getting into crypto custody. So what does that mean, I wonder? I think it's a good thing for adoption, particularly institutional adoption of crypto. I'm glad it's happening during the bear market where people are more focused on building and not pumpy headlines. So that's cool. David, we also have Liquid Collective.

• 1:07:07David Hoffman?

  Yeah, Liquid Collective. It's a consortium of many centralized staking-as-a-service entities, things like Coinbase Cloud, a few others, Alluvial, Figment, and they are all coming together under this Liquid Collective. I haven't been able to parse out the details too deeply, but I think the gist is that this is a shared protocol, shared standard for staking-as-a-service providers to all produce a liquid staking token, and that can help mitigate some of the concerns around centralized stakers, because if they are all, like, forming one mega system, they're all actually checking and balancing on each other. And so that's kind of the gist here. I think more details are certainly needed,

• 1:07:49David Hoffman?

  but definitely interesting, interesting development out of the Liquid Collective.

• 1:07:53Ryan Sean Adams?

  And speaking of Coinbase Cloud, they have just launched their platform for Web3 developers. And what's cool about this, so Coinbase Cloud, I think of it as like, almost like AWS for crypto, AWS for blockchain, that is Amazon Web Services, which, you know, many of the websites that you use in your daily life run on AWS. They're doing a cloud-based service, but for blockchains and for crypto. And starting today, apparently, developers, and this was a couple of days ago, now have free and instant blockchain API access from Coinbase Cloud. So free and instant API access. And I imagine they are running this kind of a promotion to fuel adoption of Coinbase Cloud. That's a big entrant into the space. I'm pretty excited about this.

• 1:08:38David Hoffman?

  Yeah, big moves. In Otherworlds, FTX is reloading. They have raised $1 billion for further acquisition strategies. So they've already been buying up all of the blood in the market, and they are raising another billion dollars, adding to the $400 million that they've already raised in January, so that they could buy up more deals during crypto winter. Damn.

• 1:09:03Ryan Sean Adams?

  Your move, CB.

• 1:09:06Ryan Sean Adams?

  Are you gonna compete with another billion that's just entered? Uh, this is cool. Messari, the crypto analytics and media entity, they just announced that they raised another $35 million, this time in Series B funding. And David, you've been hanging out at Messari Mainnet all week. Um, what was the temperature there? What was the feeling?

• 1:09:24David Hoffman?

  Yeah, I was actually there just before recording this, moderating a panel of scaling solutions. Avalanche, Arbitrum, ZK Sync, and Polygon. Decently populated. This is always the, uh, the conference that's like one suits that are one foot in the crypto world. Uh, so can't really talk to them about EIP 4844, but can talk to them about like generalized scaling ideas. Um, so not, not too technical, but definitely more than crypto curious, I would say. Decently populated, definitely successful. Uh, it's always nice to see people attending crypto conferences in bear markets. And congratulations to Ryan Selkis leading Messari over there, raising 35 more million dollars.

• 1:10:05Ryan Sean Adams?

  Yeah, congrats to Messari on the raise there. That's a big one. Um, good to have more crypto media companies. So we don't have stupid headlines that we have to deal with from like the Yahoo Finance one I read out earlier.

• 1:10:14David Hoffman?

  Ryan, do you know, I remember Ryan Selkis' like war over Ripple and like Brad Garland House?

• 1:10:21Ryan Sean Adams?

  Yeah.

• 1:10:22David Hoffman?

  Guess who was on stage together?

• 1:10:24Ryan Sean Adams?

  No, Brad and Ryan?

• 1:10:25David Hoffman?

  Brad and Ryan.

• 1:10:26Ryan Sean Adams?

  How did that go?

• 1:10:27David Hoffman?

  Yeah, I, I'm sure it was spicy. Definitely not. I didn't watch it myself, but I, I remember murmurings about this, about how this was gonna happen. Ripple sponsored the event. One of my friends came up to me, uh, James from Fire Eyes. He came up to me and was like, dude, look at my hat. And it's like a Ripple hat. And we just started cracking up.

• 1:10:45Ryan Sean Adams?

  Old school Ripple hat, huh? That's amazing. I haven't seen one of those in a long time. I guess-

• 1:10:49David Hoffman?

  Well, it's not old school. It's brand new. Ripple's still around.

• 1:10:53Ryan Sean Adams?

  It's so hard for me to believe that Ripple's still around.

• 1:10:56David Hoffman?

  It's, I don't know why they have the market cap that they have.

• 1:10:58Ryan Sean Adams?

  It's actually pretty impressive at this point. David, it's jobs time. So while we are in a bear market, from a price perspective, we are not in a bear market for jobs because what happens during bear markets, builders build and they need people to help build the companies and protocols of the future for the next bull run. David, should I read out some jobs? Go, please do, Ryan. It's my favorite part of the weekly relit. All right. Well, you should dance then. Solid World Dow, Senior Web 3 Developer, Rubicon, Smart Contract Engineer, Bankless, we need a social lord. That sounds awesome. Social lord? Molecule, Ahead of Engineering, a Bankless, a Growth Marketer. Both those are what, David? Non-tactical.

• 1:11:41Ryan Sean Adams?

  Economia needs a Lead Designer, a Silent Protocol needs a Full Stack Software, Contract Engineer, Superform, Senior Back End Engineer, BitGreen, a Full Stack Developer, Messori, Software Engineer, Market Data, Messori also Software Engineer of Media. I could go on, but I don't have to. Get a job like David did. Last bull market, last, excuse me, last bear market, he got a job and look at him now. You could be the next David. Oh God, you just turned, so many people just turned it off. No, no. Go to the banklist.pallet.com website to get those jobs. Be the next David or just be yourself. Now's the time to get a job in crypto. We should say, instead of a get a job in crypto, we should say, become a crypto millionaire. Yeah. By getting a job in crypto. Is that how it works?

• 1:12:24Ryan Sean Adams?

  During the crypto bear market. It's like, it's one to one. It's guaranteed. Stay tuned for David's book of 10 easy steps. Guys, coming up next, of course, we've got questions from the nation and some hot takes on Twitter from Hayden Adams, dropping the spice this week? He was spicy this week. Yeah. We'll get to that and more. But first, we want to tell you about the sponsors that made this episode possible.

• 1:12:45David Hoffman?

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

• 1:13:30David Hoffman?

  You can find me hanging out there sometimes in the chat, so I'll see you there. ZK Sync is an Ethereum Layer 2 network that is pushing the frontier of high-performance blockchains that don't compromise on security or decentralization. ZK Sync has combined the power of zero-knowledge rollups and the Ethereum virtual machine, enabling developers to build the greatest Web3 projects possible, ones we haven't even seen yet. Crypto needs its killer applications to onboard the world, but crypto killer apps need ZK Sync as a platform to build on first. It's generally accepted that zero-knowledge rollups are the conclusion of crypto blockchain scaling technology, and ZK Sync is leading the charge into the final frontier of crypto economics. So if you're a developer who wants to build your app on a future-proof foundation, which gives your users the best UX possible, check out ZK Sync's website at zksync.io.

• 1:14:14David Hoffman?

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

• 1:14:19Ryan Sean Adams?

  Questions from the nation. A reminder, you can ask the question on Twitter. Follow Bankless HQ on Twitter. Get your question in. We usually publish a post on Wednesday. Reply to that post with your question. It may come up on the rollup. Here is Ben Brown. He's asking the question, "Could you help explain the value of running a full node, even if you don't have enough ETH to be a validator? You providing any security benefits to the network? And how would that play out if someone attacked or censored the network?" Ben is asking here, David, "Why run a node if you ain't getting paid? If you're not a staker or validator, is there any point?"

• 1:14:53David Hoffman?

  There are so many reasons why one would want to run their own node. And I think the easiest one to explain is that if you run your own node, you can point your MetaMask, your wallet provider, to that node. And so your node natively connects to the Ethereum blockchain, or whatever blockchain you're talking about, in the same way that every other node does. And so as a first-class citizen, it's hearing the same transactions, it's seeing the same data, it's taking in the same blocks as all the other nodes in the world. And so you have an Ethereum node in your house.

• 1:15:26Ryan Sean Adams?

  You don't have to use Infura.

• 1:15:27David Hoffman?

  You don't have to use Infira. You take your wallet, your MetaMask, and instead of using Infira, you point it to your node. And then when you write a transaction, there are no middlemen. It's going straight to the Ethereum network because you are broadcasting your own transactions. There's plenty of reasons why you would want to do this, but it's one of those, it's going max bankless. And so there are no intermediaries separating your transaction from the Ethereum network. And so this is why running your own node is like part of the bankless philosophy. Like having the option to run your own node is having the option to permissionlessly transact on the network. It's nice that we have things like Infira, but it's critical that we can route around them if we need to. And that's what running your own node does.

• 1:16:09David Hoffman?

  That's like the first use case for me that comes to mind as to why someone would run to run their own node. What use cases come to you, come to your head, Ron?

• 1:16:17Ryan Sean Adams?

  Well, ultimately, it's about that. It's going full bankless and taking complete sovereignty. But also, I will say, there's a systemic importance to this of more people running their own nodes because it is a check on other validator power, right? So if you don't want to run the Ethereum software on your own node, for example, you don't have to. It's kind of like a vote in the Ethereum network, right? And so like it's really the non-staking nodes are an essential part, as well as staking nodes, of course. But non-staking and staking nodes are an essential part of Ethereum's defense and security. It's kind of how you vote as a citizen inside of the network.

• 1:16:59Ryan Sean Adams?

  And so this is the problem if individuals don't have the ability to run their own nodes and somebody else has to run for them from a data center and they lose their vote. It's kind of, it's sort of like, you know, some people vote in all of their local government elections, right? Some people don't. But imagine if you didn't have the ability to vote in your local government election. That would be a problem. That would mean you're no longer in a democracy. There's no longer, you know, some notion of the people, the people rule. You might be in some different type of a network. You might be in a monarchy. You might be in a government controlled by an elite few. And that is the, that is the difference between running a node.

• 1:17:42Ryan Sean Adams?

  It gives you the ability to vote in the network itself.

• 1:17:46David Hoffman?

  Take for example if like two big entities like Coinbase or Lido had like the army march in, even though Lido's actually 24 people, but say for example, there's one person. The army marches in, holds a gun to these people's heads and say, "Hey, install this new client on your validators and make the Ethereum blockchain update to this client." Think of nodes as like minority power. So all like two, like two thirds of ETH stakers have a gun to their head, say, "Hey, install this OFAC version of Ethereum." And like now we have two thirds of proof of stake validators going in that direction. It's the nodes that don't install that software that actually have the say, because then we'll have a chain split and the community is going with the non-OFAC version of Ethereum.

• 1:18:31David Hoffman?

  And that version of Ethereum will win if the community says it will. And the community says that it will by running that node. And it's the same reason why Bitcoin won versus Bitcoin Cash in 2016, 2017, is because the Bitcoin community chose to run the Bitcoin as we know it node software and also like bought that version of Bitcoin and prompt up the market price of that version of Bitcoin. So like running your own node is like how you have minority power over ETH stakers, no matter the, no matter the size of the stake.

• 1:19:03Ryan Sean Adams?

  This is a question, I think that's related. It's from Matt. "Why are mobile phones not the ultimate device for solo staking? They're always connected on Wi-Fi or cell if the landline doesn't work and their battery feed for them lasts hours in case of electricity shortages. What about this idea? Why not stake on a mobile phone? It seems like this would be the ultimate computer for a validator or staker for someone to run their own non-staking node itself."

• 1:19:27David Hoffman?

  Yeah, it's a really good question. And there's definitely the possibility of mobile phones becoming staking. And the timing of this question is actually really interesting because we just recorded an episode with Vitalik Buterin where we talked about this, where not only can we reduce the Ether requirements for staking nodes potentially down to like eight Ether, but we can actually reduce the hardware requirements down to a cellphone. So why can't we do this today? I don't know what the exact bottleneck is. With, I don't think is the issue. CPU power definitely could be an issue. Hard drive space, perhaps an issue. But then as soon as we get into light clients, which are like clients that don't have a lot of like data stored with them,

• 1:20:07David Hoffman?

  but are still fully self-sovereign clients, like then we do start to unlock like cell phones taking.

• 1:20:13Ryan Sean Adams?

  This is the future. This would be amazing.

• 1:20:14David Hoffman?

  This is a thing. This is a real thing.

• 1:20:15Ryan Sean Adams?

  Imagine if there was an app you could just download on your phone that was just the staking app.

• 1:20:19David Hoffman?

  The Ethereum app.

• 1:20:21Ryan Sean Adams?

  The Ethereum app, right? It's just so much easier. There's one, one click and you have it and you're running a staking node on your phone. That sounds pretty badass.

• 1:20:29David Hoffman?

  Yeah, well, you, the bigger concern is like you won't, you're taking your phone into like wherever you're going, right? So if you lose your phone, you're gonna need to be able to recover those keys.

• 1:20:41Ryan Sean Adams?

  Account abstraction, David, you know, social recovery. We'll get there, alright?

• 1:20:45David Hoffman?

  We'll figure that out.

• 1:20:45Ryan Sean Adams?

  It's not overnight.

• 1:20:46David Hoffman?

  One of the infinity problems we have left in this space.

• 1:20:49Ryan Sean Adams?

  Takes of the week. Let's talk about the first one. This is from Joe Weisenthal. He says, "I genuinely think that with the merge now having happened, much of the institutional crypto space, think VCs, et cetera, they're now going to turn sharply against Bitcoin. The Ponzi scams and fads built on Ethereum are now ESG. And this will be used as a regulatory cudgel against proof of work chains." So Joe making the case that because Ethereum is proof of stake, doesn't have the energy consumption baggage that Bitcoin does, it will now be the institutional crypto chain. What do you think about this?

• 1:21:25David Hoffman?

  Yeah, I mean, this is one of the things we've been saying for a long, a long time. Joe Weisenthal, of course, co-host of the Odd Lots podcast, he out of Bloomberg, so this is not just someone.

• 1:21:34Ryan Sean Adams?

  He's pretty crypto skeptical.

• 1:21:35David Hoffman?

  He's crypto, well, yes, he's definitely crypto skeptical, but definitely also pays attention. Really close with like Nick Carter and people like that, like the academic side of crypto. But yeah, like Bitcoin has an extremely uphill battle to fight with this whole like energy consumption thing, and I don't know how they get through that.

• 1:21:53Ryan Sean Adams?

  Here's maybe how they do get through that, David. This is a take from Dan Held, notable Bitcoiner, longtime Bitcoiner. I would have called Dan a maximalist. And he tweets this, "Say no to Bitcoin fundamentalism." And then someone asked the question of what does fundamentalism look like? Bitcoin fundamentalism? And it's saying things like "alls are immoral," according to Dan. "Lending is immoral." "VCs are immoral." "Making money is immoral." This is maybe Bitcoin hardliners softening a little bit? Getting more pragmatic? Is that what this is looking like to you?

• 1:22:28David Hoffman?

  Yeah, I'm actually an email correspondent with Dan about potentially scheduling a show because I reply to this like, "Hey, I would love to talk about Bitcoin fundamentalism versus Bitcoin rationalism." This fundamentalism term is new. And I think that's a strategic not using the word maximalist because I think Dan Held is, would self-identify as like, "I'm fully focused on the Bitcoin ecosystem." Maybe he wouldn't call himself a Bitcoin maximalist in the same way we don't call ourselves Ethereum maximalists. But like, other people call us that and other people call Dan Held that. So if we do get Dan Held on the show, I'd love to see where he draws the line between Bitcoin fundamentalism and Bitcoin maximalism. Because I don't, I'm pretty sure Dan Held is going to ride proof of work or die. Like, I think that's a strongly held belief.

• 1:23:12Ryan Sean Adams?

  I do too. He's going to ride Bitcoin or die, probably. But I will say, this is narrative pivot, I think, for the Bitcoin Fundamentalism community. Let me say, the Bitcoin community as a whole. They're definitely looking at this and saying, "Hey, people don't like us."

• 1:23:28David Hoffman?

  Y'all are crazy. Corey Klipsten, you're crazy.

• 1:23:34Ryan Sean Adams?

  This is a take from Hayden Adams, of course, the founder of Uniswap. "In my opinion, thinking about Ethereum haters as a singular group is not particularly useful," he says. "Most people outside of crypto Twitter are not haters or likers. They're, I couldn't give less of a shit about Ethereum, except for how it affects things I actually care about or is."

• 1:23:56David Hoffman?

  Really overusing the "or" meme, but I love it.

• 1:23:58Ryan Sean Adams?

  Maybe underusing it.

• 1:23:59David Hoffman?

  I mean, yeah, I'm just reminded of that line that like, the opposite of love isn't hate, it's indifference. So like, a lot of people just don't care about crypto, except for the fact that we're consuming a ton of energy, except a lot less these days.

• 1:24:10Ryan Sean Adams?

  Until we build stuff for them that they care about.

• 1:24:13David Hoffman?

  Yes, exactly.

• 1:24:13Ryan Sean Adams?

  Till they notice.

• 1:24:14David Hoffman?

  Exactly.

• 1:24:14Ryan Sean Adams?

  Another take by Hayden, you want to read this?

• 1:24:16David Hoffman?

  Yeah, "Crypto people blame others for being anti-crypto, but it's because, one, crypto has elevated horrible spokespeople."

• 1:24:23Ryan Sean Adams?

  Yeah.

• 1:24:24David Hoffman?

  "Two, crypto industry spends too much time fighting and arguing both internally and externally for theoretical futures rather than actively demonstrating value in the present." Yeah, I'd say that's an accurate summary. Although I will also say that crypto very much needs to look into the future to see what it will become, because there are potential, many, many potential versions of crypto, and we need to make sure that we find the right one. So you do have to look into the future.

• 1:24:50Ryan Sean Adams?

  Yeah, I agree, and I don't think Hayden is saying, "Don't look into the future." I think what he's saying is, "Let's build, let's build something really useful." This is the call during the bear market, for sure. David, this was another take, and I enjoyed this tweet out of Bankless as well, it says, "What's your most cancelable take?" We got a lot of good cancelable takes.

• 1:25:09David Hoffman?

  Ryan Sean Adams says, "It's okay to have a bank account."

• 1:25:12Ryan Sean Adams?

  Hey, don't repeat that, don't repeat that, alright? It's not for the rollup, okay? That was just the cancelable take. But seriously, it is okay to have a bank account. I have a bank account, David has a bank account. What's this take from John?

• 1:25:24David Hoffman?

  Yeah, this is John, and he says, John from Delphi, who wrote that insane reports on both Ethereum's roadmap and rollups, so very well-informed guy. And he says, "Rollups today mostly aren't actual rollups, and one of them will likely suffer a major hack at some point, which will make people question the whole plan to begin with." There's also a picture of a guy like, dropping a grenade into...

• 1:25:45Ryan Sean Adams?

  Down a stairwell?

• 1:25:46David Hoffman?

  Into, down a stairwell. It's a pretty good picture.

• 1:25:49Ryan Sean Adams?

  What do you think he means by that? Rollups aren't actually rollups. Is it because we have some relaxed security assumptions?

• 1:25:56David Hoffman?

  Yeah, if you want to go to l2beat.org, oh my gosh.

• 1:25:59Ryan Sean Adams?

  I knew you were going there, dude. I already opened it.

• 1:26:02David Hoffman?

  Right, yeah, so there's all these different like risks that we need to like plug. And so there are like Arbitrum 1, Optimism, DYDX, Loopring. All of these things still can be upgraded. They still haven't burned the private keys, right? And so that still, that still needs to happen. There's still like fraud proofs that are needed. So there's like six or seven or eight different like pieces that you need to have complete before you call yourself a rollup. And John is just saying, rollups are just like incomplete. They are missing pieces before they can fully call themselves a rollup. I will say though, well, he's totally right. Still yet to have a single rollup having, having a big exploit. And like almost it seems every single cross layer one bridge has gotten exploited.

• 1:26:44Ryan Sean Adams?

  You better knock on wood, David, because things could change quickly. I know there was an exploit bug that was found on Arbitrum earlier this week. We didn't fit it into the rollup, but, but that happened. So these types of things can happen for sure. And I do think that it is probably true that some of these rollups are kind of like they're sidechains with a path towards a rollup future, right? Until they fully take care of upgradability, state validation, validator failure, all of these risk scenarios. They do have some risk. They operate a bit more like sidechains. Now, the difference between sidechains and rollups is they have a path to get there the other side and be fully secured by Ethereum.

• 1:27:23David Hoffman?

  They actually have a future.

• 1:27:24Ryan Sean Adams?

  They actually have a path to get there. They actually have a future. Let me ask you the question though, David. What are you bullish on this week, my friend?

• 1:27:31David Hoffman?

  Ryan, you know that merge video that I made, that like 15 minute, what is the Ethereum merge video?

• 1:27:35Ryan Sean Adams?

  Yes.

• 1:27:36David Hoffman?

  And it got like 20, 30,000 views and got us a bunch of new subscribers. And it was like very edited and like, you know how, you know how we are like, how long are we at right now? We are at one hour and 31 minutes into the weekly rollup. And like we keep, every, we keep on talking about how like, yo, we like, we have to trim down these goddamn weekly rollups. And then we do it once and then we never do it again. Same thing with the podcast. We've recorded podcasts with Vitalik and we just need to talk about everything. So it's an hour and 45 goddamn minutes.

• 1:28:01Ryan Sean Adams?

  Part one, part two.

• 1:28:02David Hoffman?

  Part two, two part episode of Vitalik because we can't do short episodes. You know, you know how this is a problem of ours?

• 1:28:07Ryan Sean Adams?

  Yeah, I know that's the problem. Yeah, why, why are you talking about it now?

• 1:28:10David Hoffman?

  Yeah, so I've got like four of those videos like in the hopper.

• 1:28:14Ryan Sean Adams?

  Four 15 minute videos.

• 1:28:16David Hoffman?

  Yeah, one's 18 minutes, one's 12 minutes, one's like three minutes. What is Ethereum? What is ETH? Why, this was my favorite, why is crypto full of scams? I'm known to write very long essays. But when you take these long essays and you read them really fast into a teleprompter and then give that to your editors and they make a YouTube video out of that. All of a sudden, David's infamously long essays turn into very short YouTube videos.

• 1:28:40Ryan Sean Adams?

  Wow.

• 1:28:40David Hoffman?

  Yeah, so all that's coming on a brand new Bankless YouTube channel. And so this is coming out shortly soon, so stay tuned for that. This is going to be the hyper YouTube optimized side of Bankless and ya boi is pioneering it.

• 1:28:53Ryan Sean Adams?

  I feel like this is the point in the show where we should edit in like subscribe to the new YouTube channel with a big button if people are watching this on YouTube. Do we have that capability yet as the channel?

• 1:29:02David Hoffman?

  Ah shit, you're totally right. No, it'll be out like next Wednesday or something.

• 1:29:07Ryan Sean Adams?

  Oh, almost. Alright.

• 1:29:08David Hoffman?

  Stay tuned though. Stay tuned. Well, I'll talk about it next week too. For all the people that are sticking around. Ryan, what do you bullish on?

• 1:29:14Ryan Sean Adams?

  Just like I already said it, the building, the building that's going on. I've never seen a time where more building is happening in crypto, more developers. You know, the thing that they always say is like following, follow the developers, right? It's like if you follow the developers, then you know, you follow them regardless of what the price is. I mean, people can be bearish if they want, but like I'm going to be here following the developers. And what are they doing? They're working on the ETH roadmap. That looks better than I've ever seen. Episode where Vitalik goes through it coming out on Monday. Layer twos, the building that's going on across all of the team, like ZK team, ZK EVM fasting happening faster than anyone thought. We're building on optimism, building on Arbitrum, DeFi, that's being built out.

• 1:29:58Ryan Sean Adams?

  I think there will be a DeFi 2.0. It was not the DeFi 2.0 that we sort of saw the meme around in 2021. Yeah, it'll be a real DeFi 2.0, which you know, has all sorts of new ideas that we've not even contemplated. NFTs are building. It's all of these new discoveries ahead for us too.

• 1:30:15David Hoffman?

  Is Bankless is building NFTs?

• 1:30:16Ryan Sean Adams?

  We're building like, so I just feel like when you have this. Amount of talent and you know, developer capability in space like being bearish on crypto right now is like, okay, cool. Like be bearish on the internet, be bearish on humanity, be bearish on software and code. Like where did that get you the last 20 years? Go be bearish on those things. That's fine. I'll be settling. I'll be holding. It's gonna be okay. And I'm excited that, you know, there's still a bankless audience for us on, on the other side of this because we're going to come out stronger as we follow the developers as we keep building. David, what do we have? Meme of the week?

• 1:30:55David Hoffman?

  Meme of the week. Let's do it.

• 1:30:56Ryan Sean Adams?

  Let's look at this. I thought this was great.

• 1:31:00David Hoffman?

  So this is actually gonna be kind of hard to explain, but we have two dudes and another dude, and one dude is explaining to two dudes and they're at a party. And then the title is when I accidentally use personality A with friend group B. And the solo dude is like, I'm stoked that the Ethereum proof of stake upgrade was successful. Looking forward to tracking my staking yields over the next few weeks. And then the other two dudes who are both wearing football sweatshirts saying, proof of what? What the fuck are you talking about? And then Bankless, the Bankless Instagram DMs this dude who was talking about proof of stake at the party. And he goes, Bankless says, hey, how was the party? And the guy says horrible. And he's just crying. He's just sad. Yeah, I guess this meme works more when you look at it.

• 1:31:42Ryan Sean Adams?

  You know what? It's funny to me because it kind of works in real life. Like, do you have, like, I have a whole bunch of internet friends where I could celebrate the merge with, right? But like, I don't have that many in real life friends who just care at all about the merge, about Ethereum. And like, if I brought up to my like, in real life, normie friends, hey, the merge was awesome this week. What are you talking about? Get out of here, nerd. Like, so I don't know if this is like you, or maybe David, your life, you've better integrated, kind of like your in real life friends with your crypto friends, and they're one in the same. But like, for me, it's very much two different groups.

• 1:32:20David Hoffman?

  So my mom's birthday was the day of the merge. And so I called her up and I was like, Mom, do you know what day it is? And she of course thinks I'm talking about her birthday.

• 1:32:30Ryan Sean Adams?

  Oh, no. I hope you were in that moment. I hope you pivoted.

• 1:32:34David Hoffman?

  No, I was like, she was like, uh, yeah, it's my, and I go, it's the day of the merge.

• 1:32:39Ryan Sean Adams?

  Oh, God, David.

• 1:32:41David Hoffman?

  But, okay, but my mom remembers when I had like these GPU miners in different corners of my dad's house. And so my mom, being like the liberal environmentalist that she is, she's always like, this is consuming how much electricity? And so she goes, and so she goes, what, what's, what's the merge? And she go, and I tell her, this is the day that Ethereum mitigates all mining and it goes proof of stake. And we eliminate all of our energy consumption. You know what she says? That's great. I love the merge.

• 1:33:11Ryan Sean Adams?

  And also, happy birthday, Mom.

• 1:33:12David Hoffman?

  And then I wish her a happy birthday.

• 1:33:14Ryan Sean Adams?

  Okay, perfect. Good ordering on that, David. Well, that, that was a gift to your mom, then. Didn't know that the merge and environmental effects were all, all about a gift to your mother, but that's great, David.

• 1:33:27Ryan Sean Adams?

  Should we end it here?

• 1:33:28David Hoffman?

  So we do have a moment of zen and this moment of zen is coming out of Gabriel Haynes. He's this, if you're not familiar with him, he's this absurdist meme joker account on crypto Twitter. And it's pretty funny, but first Ryan's going to read you some disclaimers.

• 1:33:42Ryan Sean Adams?

  Of course, ETH is risky. Got to tell you, none of this has been financial advice. All of crypto is, so is DeFi. You could lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.

• 1:33:55Speaker 02

  My friend told me that he's waiting for ETH to hit $500 before he buys. And I said to him, well, ETH only hit 800 because Suzu and Kyle needed to liquidate their entire portfolio at the bottom. So it's very unlikely that we get to those numbers again, unless there's some sort of catastrophic liquidation. And he says to me, well, you know what? The macro is getting bad. The macro is going to send SPX to 200.

• 1:34:33Speaker 02

  You're a goddamn barista, sir, not a macro trader. Just buy Ethan, shut up.

• 1:34:39David Hoffman?

  Hey, we hope you enjoyed the video. If you did, head over to Bankless HQ right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence. We recommend joining our daily newsletter, podcast, and community as a Bankless Premium subscriber to get the most out of your Bankless experience. You'll get access to our market analysis, our alpha leaks, and exclusive content, and even the Bankless token for airdrops, raffles, and unlocks. If you're interested in crypto, the Bankless community is where you want to be. Click the link in the description to become a Bankless Premium subscriber today. Also, don't forget to subscribe to the channel for in-depth interviews with industry leaders, Ask Me Anythings, and weekly rollups where we summarize the week in crypto and other

• 1:35:24David Hoffman?

  fantastic content. Thanks, everyone, for watching and being on the journey as we build out the Bankless Nation.