Where do we go from here?

This is the craziest moment we’ve experienced in crypto. So many things to unpack. But the biggest question remains… where do we go from here? ------ Earnifi | Check For Your Unclaimed Airdrops, POAPs, & NFTs https://bankless.cc/earnifi ------ SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/?utm_source=banklessshowsyt ️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: ️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum ACROSS | BRIDGE TO LAYER 2 https://bankless.cc/Across BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave LEDGER | NANO HARDWARE WALLETS https://bankless.cc/Ledger ️FUEL | THE MODULAR EXECUTION LAYER https://bankless.cc/Fuelpod ------ Topics Covered: 0:00 Intro 6:30 One Week Later 13:00 Changing Perspective 17:25 Shaking Faith 21:20 Losing Funds 22:25 Sponsorships 27:30 Cronies 30:15 Regulators 34:30 The Content Treadmill 37:30 Richard Heart 39:45 Community Vibes 44:30 Staying Optimistic 50:25 Reflections ----- Resources: Sam’s Weird Twitter Behavior https://twitter.com/SBF_FTX/status/1592275869825134593 Sam’s Penthouse https://www.99.co/singapore/insider/cryptocurrency-ftx-ceo-sam-bankman-fried-sbf-bahamas-penthouse-sale-usd40m/ FTX Corporate Structure https://twitter.com/Leishman/status/1591800851236282368 ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://www.bankless.com/disclosures

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

• 0:00Ryan Sean Adams?

  Bankless Nation, it is November 14th. David and I have been doing these live streams for you, doing another one today, just to talk about everything that went on last week. Without question, David, last week was the craziest week I've ever seen in crypto.

• 0:15David Hoffman?

  Which is saying something out of 2022.

• 0:18Ryan Sean Adams?

  I'm just like, maybe we'll ever see in crypto?

• 0:21David Hoffman?

  God, I hope so. I hope so.

• 0:23Ryan Sean Adams?

  I definitely hope this.

• 0:24David Hoffman?

  This feels like, I don't know how, there's no bigger thing that could like be worse, right? Like Coinbase could collapse, but I'm betting that it's not going to. Like, there's no, there's no bigger thing. Like, it had, that had to have been the finale of 2022, right?

• 0:41Ryan Sean Adams?

  The grand finale? That was the fireworks? That was it? So we're done?

• 0:45David Hoffman?

  I, I-

• 0:46Ryan Sean Adams?

  It gets easier from here?

• 0:47David Hoffman?

  I mean, you don't know that, but it feels like a good bow on what was a terrible year in crypto.

• 0:55Ryan Sean Adams?

  Good bow, a terrible, a bow of terribleness on an otherwise terrible year in crypto. Well, we've got some things to unpack, I think. So, part of this is, the story has, I think the events have settled down a little bit, even though SBF is still like tweeting out like he's the Zodiac Killer.

• 1:12David Hoffman?

  I don't know what the hell is going on with that man.

• 1:15Ryan Sean Adams?

  We could talk about that if we want to, but part of me is like, why are we giving-

• 1:19David Hoffman?

  I don't even want to talk about SBF right now.

• 1:21Ryan Sean Adams?

  I'm tired of giving him attention.

• 1:23David Hoffman?

  Yeah, yeah.

• 1:24Ryan Sean Adams?

  Like, so, but, but for people who aren't aware, he is just tweeting out like letters of the alphabet, maybe spelling something-

• 1:28David Hoffman?

  One by one by one, yeah.

• 1:30Ryan Sean Adams?

  What? H A-

• 1:31David Hoffman?

  H A P P E, I think. So we're, we're-

• 1:34Ryan Sean Adams?

  Oh, really?

• 1:35David Hoffman?

  I think, yeah, yeah. P and E came really close after each other.

• 1:39Ryan Sean Adams?

  We just recorded a podcast and last I was up too. See, I just can't look away, even though I don't want to talk about this. I still want to know what he's typing. Let me, uh, let me look up his Twitter account. So, is he spelling what, what happened?

• 1:51David Hoffman?

  So, yeah, I can't imagine what other, what other word, yeah.

• 1:54Ryan Sean Adams?

  What happened with an N?

• 1:56David Hoffman?

  Why? Why even bother, man?

• 2:00Ryan Sean Adams?

  What a psychopath!

• 2:01David Hoffman?

  Yeah, I don't get it.

• 2:03Ryan Sean Adams?

  Is he in control of his, uh, of his Twitter? And he's just, is he doing this for, why, what's, what's motivating this guy at this point?

• 2:12David Hoffman?

  I don't know. He's still, he's still in the Bahamas, right?

• 2:16Ryan Sean Adams?

  No idea. That's been unconfirmed either. Anyway, I mean, people, there's some things that we can't confirm. I think the purpose of this episode is to talk a bit more about some-

• 2:26David Hoffman?

  What the state of the industry is. Like, I think that's overall confusing. Like, what is the state of things? I don't think we're in, I feel like we're in this period of time where, like, it's Monday, we're starting to see, like, announcements don't happen on the weekends, they happen on weekdays, right? And so, we saw Travis Kling's Ike Guy, Ike Guy hedge fund, VC fund. He had apparently the whole fund on FTX.

• 2:51Ryan Sean Adams?

  He had everything on FTX.

• 2:52David Hoffman?

  Yeah, everything on FTX. BlockFi just sent out an announcement saying, hey, like, we got nothing, we have to cease operations.

• 2:58Ryan Sean Adams?

  Oh, cool.

• 2:58David Hoffman?

  Sick, right?

• 3:00Ryan Sean Adams?

  I had some funds in BlockFi, that's fine.

• 3:01David Hoffman?

  No longer. You actually had some funds on FTX, Ryan, did you know?

• 3:06Ryan Sean Adams?

  Wait, I do?

• 3:06David Hoffman?

  Well, through BlockFi, because they did, right?

• 3:08Ryan Sean Adams?

  Oh, true.

• 3:09David Hoffman?

  I'm super loud. Oh, sorry, chat, I'm turning myself down.

• 3:13David Hoffman?

  And so, like, I think we're in this weird state where, like, we're starting to see the contagion fall out. And so, like, but the story's starting to end, and like, the industry's starting to have conversations about how to proceed forward. I feel like we're in that, like, in-between phase right now, where, like, the story's still here, but it's coming to a close. And now, we're, now we have to think and, like, reflect as an industry as, like, all right, what the hell do we do about this?

• 3:39Ryan Sean Adams?

  Well, let's talk about it. And I want to hear what the bankless community thinks about it, too. So, we get a chat window open, we're gonna be looking at that.

• 3:44David Hoffman?

  Yeah.

• 3:45Ryan Sean Adams?

  And we have some other comments from the community to get into. I want to hear more about how your perspective might have changed, too. Just the general mood in the crypto with the feedback is, in general, I think we got to talk about where we go from here. So, guys, stick with us. This is a live stream David and I are doing. We'll just go until we run out of things to talk about. But before we get there, we want to thank the sponsors that made this episode possible.

• 4:10David Hoffman?

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• 4:55David Hoffman?

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• 5:38David Hoffman?

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• 6:20David Hoffman?

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• 6:43Ryan Sean Adams?

  Hey guys, a special live stream. We are back. Where do we go from here is the the topic. We've done a number of these live streams just because this is a pretty crazy time in crypto, unlike anything we've experienced. And I want to ask you this question as we kick things off. So it's been about a week. All right. So it's a week and a day since SBF, you know, tweeted his a famous tweet about FTT and selling that. And we didn't, CZ, excuse me, and we didn't.

• 7:11David Hoffman?

  He tweeted over the weekend. It was, it was like Monday, which was Sunday, Monday, it was when FTX stopped processing withdrawals.

• 7:19Ryan Sean Adams?

  We did not know at the time, of course, that FTX was $10 billion in the hole in solvent. We didn't know that this guy was running some kind of a charade with, you know, lending against investor money, basically using depositors' money to, to, you know, pump his own fund and to plug holes. We didn't know all of that.

• 7:38David Hoffman?

  You know, and my conclusion on that whole thing is like $10 billion is an insane amount of money. Do you think all of that went to Alameda? Because as far as I'm concerned, I was listening to Brian Armstrong on the All In Podcast and Brian was like, I knew Coinbase's revenue, I knew FTX's revenue, and it didn't check out. Like, he kept on like buying all the things. And so like, I'm kind of like, dude, FTX was just like Sam's slush fund to do what the hell he wanted. You see that like $40 million apartment that he had or a penthouse he had in the Bahamas?

• 8:13Ryan Sean Adams?

  Actually, okay, I saw pictures of this, but I didn't get a time to like, it's like, I want to actually go through the listing and take a look at that. But yes, I saw that among other things, which has been, I believe, put up for sale, right?

• 8:24David Hoffman?

  Yes.

• 8:24Ryan Sean Adams?

  $40 million apartment in the Bahamas. He was just like chilling in the Bahamas, wasn't he?

• 8:29David Hoffman?

  Yeah, yeah, yeah.

• 8:33Ryan Sean Adams?

  Do you have that photo?

• 8:34David Hoffman?

  Oh, of the apartment? Yeah, I'll go get it. Oh, I think I put it in our Discord. It'll take me a second. But like, I don't know, man, he like, I don't know how big the hole in Alameda was, but again, like I said, I don't think it can be $10 billion big. And Sam was just like buying everything like left and right as much as thing as many things as possible. And so like, he just had no like discretionary like nature about the funds and he just used customer deposits to buy whatever the hell he wanted. Like, I think that's going to be

• 9:09David Hoffman?

  the conclusion to this whole thing.

• 9:10Ryan Sean Adams?

  There's something psychological about like, there's something deeply ingrained that would cause somebody to do that. I know, by the way, it was late last week, Vitalik tweeted out this kind of thing that, you know, true Vitalik style, where he sort of separated SBF, the person versus SBF, the public

• 9:31Ryan Sean Adams?

  brand and the public image, right? And his comment was like, SBF, the public individual, the runner of FTX, deserves a lot of the the slamming and the dunking and the vitriol and the anger coming at him, right? Because this is a $10 billion hole that probably set our industry back years.

• 9:52David Hoffman?

  Yeah.

• 9:52Ryan Sean Adams?

  And yet he balanced that with SBF, the person is still a human being worthy of value and respect as all human beings are. And he was hopeful that SBF had some family and friends that were supportive of him. This is kind of how I feel. And this is, I don't, I'm not one of SBF's friends. I'm not his family member. So I can't speak to the person. But the public individual, Sam Bankman-Fried, that screwed our industry over and pulled one over on us. Like, I guess I have entered the phase and it goes in and out for me where sometime like, do you know how you're supposed to go through the stages of grief sequentially, right? And there's like anger, there's sad, but for me, I've been going in and out of sometimes I'm sad and sometimes I'm angry.

• 10:36Ryan Sean Adams?

  And I go that's sad and I'm angry and it goes back and forth. Right now, as we're streaming this, at this moment, I'm pretty pissed. I'm angry. Like, why? Like, look at this, man. This is the Singapore house. Wait, Singapore?

• 10:52David Hoffman?

  Bahamas.

• 10:53Ryan Sean Adams?

  Bahamas. Okay. Bahamas. Excuse me. This.

• 10:58David Hoffman?

  And that, see, this is the thing, like, like, he had this whole, like, you know, New Balances and effective altruism and like plain old t-shirts. And then he owned this thing. I don't even see Sam as the person like giving a fuck about stuff like this. I think he-

• 11:17Ryan Sean Adams?

  That's because that's his con, man. That, like, he conned us into believing these things.

• 11:22David Hoffman?

  No, I don't think he, like, I'm saying, like, I don't think Sam cares about a super fancy apartment. I think he is just like playing life like a video game and trying to score as many points as possible. So if he buys Twitter, he buys his apartment. Like, can you see Sam sitting down on that couch and like watching that TV? Like, no. He just cares about owning a 50 billion or 50 million dollar like apartment just because he wants to check that box. Like, it's a little sociopathic, yeah.

• 11:52Ryan Sean Adams?

  He's just kind of leveling up, treating the world like a video game?

• 11:54David Hoffman?

  Yes.

• 11:55Ryan Sean Adams?

  Like he's in some kind of like, you know, private VR instance and everyone else is an NPC?

• 12:00David Hoffman?

  Yeah, I guess, I guess so. And I think like, he had, and so the other thing I learned from the, uh, the All In Pod was that, um, uh, Chamath, when he was thinking about investing in FTX, uh, and Chamath, like, and his people, like, gave them like a two-page, two-pager as like recommendations. And one of them was like, set up a board of directors, AKA like, you know, have some adults in the room. Uh, and you know what the response was?

• 12:27Ryan Sean Adams?

  From, from Chamath?

• 12:28David Hoffman?

  From, from, from, from SBF to fuck off.

• 12:33Ryan Sean Adams?

  What?

• 12:33David Hoffman?

  Yes. That was the response.

• 12:36Ryan Sean Adams?

  Just like, I don't want, and he could, well, that had to be a red flag.

• 12:41David Hoffman?

  Big red flag, yeah, right? And so like, Alameda and FTX, like Alameda and like the Caroline girl, uh, like, I don't know, it was just like Sam and his friends who was like, got access to a billion dollar like money printer. And they're like, hey, what do we do? Let's buy this 50 million dollar like penthouse, like-

• 12:58Ryan Sean Adams?

  This is some, this is Wolf of Wall Street.

• 13:00David Hoffman?

  Yeah.

• 13:01Ryan Sean Adams?

  This is like, this is crazy.

• 13:02David Hoffman?

  Yeah.

• 13:03Ryan Sean Adams?

  Yeah. So how have the events of last week changed your perspective on things?

• 13:11David Hoffman?

  It's like, so like, there was the moment in the weekly roll up, right? That like everyone knows about. And, and like the bankless, like universe.

• 13:18Ryan Sean Adams?

  Are you talking about when you?

• 13:20David Hoffman?

  Yeah, yeah, yeah, yeah. Exactly. Yeah. And like, everyone was like, why are you getting sad? Like, this is C-Fi. This is exactly emblematic of like, what we're trying to avoid. And like, DeFi literally fixes this. Like, this is why we're all here. Like, financial system by code and math. And, and I think I was just getting frustrated, just like, it's just like, a bunch of like narrative storytelling, and I believe it. But like, we keep on building all of these cool DeFi things, and then we like run over to FTX, right? Like, there was just like a moment of just like, and we, we joked that like, you make money in crypto by going through your second cycle.

• 14:01David Hoffman?

  Not your first cycle. Like, your first cycle, you take pain, and then you have lessons, and then you, you make money the second time around? Well, if that's true, like, you make money the second time around because you're dumping on the first people, right? And so like, I'm just like, cornered by this fact that like, there's no way for this industry to like, move and progress forward in a way that like, doesn't harm people? Because like, how do we learn as an industry? Like, not your keys, not your crypto. Well, where did we learn that from? Mt. Gox. Right? Like, all right, well, now we're learning that like, cross-chain bridges are bad, because we'll lose money there. And it's like, we only seem to like, learn the lessons and actually apply principles like, by losing billions of dollars. And that was just like frustrating.

• 14:41Ryan Sean Adams?

  That, that, I, when we were recording that, I was like, you know, trying to give some, some thoughts on this, but like, in the back of my mind, I was like, oh, SBF just broke David. Like, do you know, like, you're, you're one of the most enthusiastic, like, bullish, permeable people I know, right? In crypto and about the space, not just, it's not like, just dollars, price in your eyes, right? It's actually like, you're excited about this technology, and excited about the good it can do for the world. And I think I saw, like, as you're talking, like, You doubting that? Not necessarily for the first time, but like maybe in a fundamental

• 15:22Ryan Sean Adams?

  way I hadn't seen before. And it was funny because actually you know that Molly White episode that we released yesterday where she's like web three is going just great. And we recorded that a month ago and we did the debrief on that. And I remember you talking in the debrief about, you know, Molly White sees crypto as like, like crypto is like a whole bunch of turtles born on the beach, right? And they're all kind of running for the ocean.

• 15:51David Hoffman?

  Right.

• 15:51Ryan Sean Adams?

  And some turtles are born, but only a few are actually going to make it. And your comment then was like, and Molly's really concerned about the turtles because she's like, there's so much pain. There's so much stuff like, why do we have to let turtles die? Right?

• 16:01David Hoffman?

  Right.

• 16:02Ryan Sean Adams?

  And that's, I think, what we're seeing right now.

• 16:05David Hoffman?

  Right.

• 16:05Ryan Sean Adams?

  And it's like painful, like the turtles are getting, it's like, it's like D-Day, man. They're blown up all around us. The turtles are dying and they're just little baby cute turtles.

• 16:15David Hoffman?

  Right.

• 16:15Ryan Sean Adams?

  And why do they have to die? Why does this have to happen? Why can't it be? Why can't we just all make it to the ocean to get, we're all gonna make it. Do you remember that thing?

• 16:23David Hoffman?

  Yeah, we're all gonna make it.

• 16:25Ryan Sean Adams?

  I don't say that as much.

• 16:26David Hoffman?

  We didn't all make it.

• 16:27Ryan Sean Adams?

  I was always suspicious of that. I just, I was on board with the GM thing, but the we're all gonna make it. I was like, oh, I don't, I got, I got news. I mean, that's nice to say, but like, some of us are not gonna make it.

• 16:41David Hoffman?

  Okay. And also like, why does that have to be true? And like, we're, this is why we're all mad at Sam is because like Sam killed like, like all time highs in like turtle deaths. Like he killed the most amount of turtles. Like after we, after we had Celsius and three hours capital and like, and like, yeah, it was like the

• 17:00Ryan Sean Adams?

  Drones just strafing the turtles. Look, I'm laughing about this because if I don't laugh, then David's gonna get emotional again.

• 17:10David Hoffman?

  Yeah, yeah. The chat's gonna make fun of me. Yeah. The chat's not being very nice right now. But we'll see.

• 17:15Ryan Sean Adams?

  Chat's never nice.

• 17:16David Hoffman?

  Well, it's been nicer. There's some, there's some antagonists in the chat right now.

• 17:20Ryan Sean Adams?

  So how have the events changed your perspective then? Like last week, I know how you're feeling, but like this week, is it a fundamental shift? Are you like, I mean, has it shaken your faith in what we're doing here?

• 17:35David Hoffman?

  It's made me understand Bitcoin maximalism a little bit better. It's like, it's made, the, the, the last week like made me feel very extremist or like want to become an extremist.

• 17:44Ryan Sean Adams?

  Well, that's interesting.

• 17:45David Hoffman?

  Yeah. And so like,

• 17:46Ryan Sean Adams?

  Extremist about what?

• 17:47David Hoffman?

  So like, I previously would have called myself like a bank apologist, right? It's like, in the, in the future crypto world that I'd see, there's going to be a broad variety, a broad spectrum of quality products. And some of those are going to be centralized and some of those are going to be decentralized. Uh, and just because humans are folly and we have SBFs of the world and like Bernie Madoffs and like all these centralized powers that do all the bad things, that doesn't stop the existence of good, quality, centralized products that exist out there. There, centralized products are allowed to exist. Like, I believe Brian Armstrong is great, personal hero. I think Coinbase is great. But like now, I'm like, well, now I'm just like, milit- feel,

• 18:33Ryan Sean Adams?

  You don't trust Brian, you don't trust Coinbase.

• 18:34David Hoffman?

  No, I do trust Brian, but like at some point it's like, there's, after you start trusting Brian, like where do you draw the line? And if you want to trust Brian, like, all right, you'll trust like, uh, I also trust Gemini. I also trust like Nexo, but at some point like you're gonna add, you're gonna add too many people into that circle of trust and you're gonna have one bad one. And so like, at some point, like I can see like the polarization of Bitcoiners who are like, not one bank, like not one ever.

• 19:02Ryan Sean Adams?

  Like one is too much.

• 19:03David Hoffman?

  One is too much.

• 19:04Ryan Sean Adams?

  Don't ever compromise.

• 19:04David Hoffman?

  You don't ever compromise on values. Right? Uh, and so I can start to resonate with that like a lot more.

• 19:09Ryan Sean Adams?

  Like the shelling fence has kind of moved back where you're like, rather than, it's just the, the policy should be a hundred percent bankless all the time.

• 19:17David Hoffman?

  Right.

• 19:17Ryan Sean Adams?

  And as soon as possible, you get your funds off of that exchange. I mean, like, so I had a conversation with, um, my dad over the weekend. He was like, what is happening in crypto, right? I'm like, well, okay. So, and then, but he's like, well, I have some funds on Coinbase. Should, should I take him off Coinbase? Right? And I was like, That you probably should.

• 19:39David Hoffman?

  Yeah.

• 19:39Ryan Sean Adams?

  I'm not, I don't think, I don't think Coinbase is going under.

• 19:42David Hoffman?

  Right.

• 19:42Ryan Sean Adams?

  As part of this, right? I, um, but we don't know, do we? This is the thing, have you been up to date? And it's like, what do you think of proof of reserves? We're talking about the, how it's changed our perspective on things, right? But how has it changed? I guess everyone's perspective on this. Let's, let's talk about some of the, some of the players. So crypto exchanges themselves. This hasn't just been a hit to FTX's credibility. All crypto exchanges.

• 20:10David Hoffman?

  Yes, everything centralized, yeah.

• 20:12Ryan Sean Adams?

  Anything centralized, anything that custody's private keys is under tremendous amount of scrutiny. And I've become like a bit, proof of reserves.

• 20:23David Hoffman?

  Right.

• 20:23Ryan Sean Adams?

  Like, or you don't deserve to hold any of our private keys.

• 20:27David Hoffman?

  Right.

• 20:27Ryan Sean Adams?

  Audits, are audits enough? Proof of reserves, proof of liabilities as well as part of that is not.

• 20:33David Hoffman?

  I don't even know if that's possible. Proof of, proof of lack of liability? I don't even know if that's possible.

• 20:39Ryan Sean Adams?

  So you're, we're back to auditors, we're back to trusting it. But like, FTX was audited. They were, uh, Arminio was one of the auditors. It's not like a big four, but it's like one of the top auditor. I mean, they were audited.

• 20:52David Hoffman?

  Mm hmm.

• 20:53Ryan Sean Adams?

  Um, so it does, it does kind of, it does kind of galvanize you to, and like, um, militarize you to be like, well, we should like back to, back to bankless, full bankless, right?

• 21:04David Hoffman?

  Mm hmm.

• 21:04Ryan Sean Adams?

  Um, it used to be the policy of like, bankless over time.

• 21:08David Hoffman?

  Plus, plus the things that get you there.

• 21:11Ryan Sean Adams?

  Yes, plus the things that get you there. And you don't have to do it all at once because don't lose your private keys. And there's a lot of risk over there. But now I'm just like, I am weighing the risk of keeping anything on a centralized, uh, exchange very high.

• 21:24David Hoffman?

  Right.

• 21:24Ryan Sean Adams?

  I've lost some funds in this process.

• 21:26David Hoffman?

  Yeah. I've never lost funds. I've never lost funds ever. Well, okay, in 2017, I got fished for a fake Iota wallet. That was my only time.

• 21:34Ryan Sean Adams?

  Really?

• 21:34David Hoffman?

  Yeah. Other than that, I haven't.

• 21:35Ryan Sean Adams?

  Do you click an email?

• 21:36David Hoffman?

  Uh, I was, I was spinning up a new wallet and I was like, I need a new Iota wallet. So I went to an Iota wallet generator, but it was just like, I just sent my Iota to like their wallet. Yeah.

• 21:46Ryan Sean Adams?

  Trinary code, do you remember this?

• 21:48David Hoffman?

  A trinary code?

• 21:49Ryan Sean Adams?

  That was one of their things. Yeah, it was like, we're basing our, uh.

• 21:52David Hoffman?

  No, the DAG, the DAG, the.

• 21:53Ryan Sean Adams?

  The DAG, dude.

• 21:54David Hoffman?

  Yeah, the DAG, the DAGs, yeah, right. Uh huh.

• 21:57Ryan Sean Adams?

  Alright, so but that's the only time. Yeah, so I had a little bit of funds on Celsius previously, remember? Because like I tried these things and then also BlockFi and I kept just a little bit on there even after they got bailed out. I was like, oh, okay. Well, may as well not. That's never coming back. Didn't BlockFi send an email today? Kind of confirm me? I've checked my email.

• 22:20David Hoffman?

  Yeah, BlockFi sent an email saying, hey, like, we're ceasing operations. Don't deposit any money. Yeah.

• 22:26Ryan Sean Adams?

  Yeah.

• 22:26David Hoffman?

  Have you noticed like the crypto industries just feels like at each other's throat right now? Like, everyone just feels super toxic.

• 22:34Ryan Sean Adams?

  Oh, yeah, dude.

• 22:35David Hoffman?

  Why? Why the hell is that?

• 22:36Ryan Sean Adams?

  No, this made me sad. It's like, I know you, because we've been, we've been attacked in the past, like.

• 22:42David Hoffman?

  Yeah, we got, we got like the, we got StayGolden in here who's like in our chat saying like, oh, this, this video is brought to you by FTX, even though we've never ever had an FTX as a sponsor. And like, Up, Up, Up only had FTX as a sponsor, but I don't blame them in the slightest because the whole thing is like, the industry got duped.

• 22:59Ryan Sean Adams?

  We've had Gemini as a sponsor. We've had Gemini. I mean, could the Winklevoss twins be rugging us now? Like, I don't think so, but I can't say for 100% certainty.

• 23:09David Hoffman?

  Right. Yeah, Alan Fields, guys, like, Bankless loved BlockFi, also never had BlockFi as a sponsor.

• 23:15Ryan Sean Adams?

  They're just looking for people to tie to the stake and burn.

• 23:18David Hoffman?

  Yeah, like, I guess when like, we lose like $10 billion as an industry, like, people just get like, they don't get, they're growing the pie mentality. And so like, we've triggered a few communities. I've triggered a few communities, like the, the Hex community and the Cardan.

• 23:32Ryan Sean Adams?

  Did you ever have BlockFi as a sponsor? No, we never had BlockFi as a sponsor. Never. Learn from the haters. You promoted so much.

• 23:40David Hoffman?

  Too much garbage. What garbage did we promote? Tell us.

• 23:45Ryan Sean Adams?

  What garbage?

• 23:45David Hoffman?

  What garbage? We have not one, there's not a single Bankless sponsor that has lost a dime of Bankless listener money.

• 23:53Ryan Sean Adams?

  Don't say that, David.

• 23:54David Hoffman?

  Yet. Knock on wood.

• 23:58Ryan Sean Adams?

  I mean, guys, we just try our best. I mean, like, what are we gonna do? We're very judicious in terms of the sponsors we decide to support. We've recently made a sponsor decision. So at the very, at the very beginning of Bankless, we would not do anything with centralized custodian companies. And I think the very first centralized custodian we started to sponsor, work with as a sponsor, was Gemini. And why? It's because I'm a Gemini user. You're a Gemini user as well, happened in the past.

• 24:34David Hoffman?

  Yep.

• 24:35Ryan Sean Adams?

  There are a few exchanges probably that I would consider that I like, you have to trust something, you have to, look, you have to get your fiat to crypto.

• 24:42David Hoffman?

  Yep.

• 24:42Ryan Sean Adams?

  All right.

• 24:42David Hoffman?

  You see, you need an exchange.

• 24:44Ryan Sean Adams?

  You need an exchange. I don't know how else you do that. There is no other way to do that.

• 24:48David Hoffman?

  Right.

• 24:48Ryan Sean Adams?

  So Gemini would be, like, was a sponsor. I'd probably do something with Kraken. I trust them reasonably to get my fiat over to crypto. I'd probably do something with Coinbase. Never done anything with FTX. The very first time we decided to do something with a borrowing and lending centralized company was Nexo. And that was because they had survived everything up to this point.

• 25:17David Hoffman?

  Right.

• 25:18Ryan Sean Adams?

  We have, and then also Juno, you know, that startup.

• 25:22David Hoffman?

  Also an exchange with, that's also a bank that has like crypto powers, yeah.

• 25:26Ryan Sean Adams?

  Yeah, it's because I have like, look, I have Coinbase. I literally still have a Wells Fargo account. And I have, I don't know how many accounts we have for Bankless as a, as a company, right? But like, they've kicked us out of Bank of America because we have interactions with crypto. And so we're at like small community credit unions. Like, we have to use banks.

• 25:49David Hoffman?

  Right.

• 25:49Ryan Sean Adams?

  In order, we can't go fully bankless yet. Like, I wish that were the case. This is a journey. It's gonna take a decade or more.

• 25:55David Hoffman?

  Right.

• 25:56Ryan Sean Adams?

  For us to get all the way there. So we support hybrid solutions along the way when we can.

• 26:00David Hoffman?

  Right.

• 26:01Ryan Sean Adams?

  That said. I think that you talked about being militant.

• 26:06David Hoffman?

  Yeah.

• 26:07Ryan Sean Adams?

  I think that's very important for us to not support centralized institutions moving forward when there's an alternative. I'll make, I'll make some exceptions to this. So for, for example, if it's an exchange, if it's doing the fiat

• 26:22David Hoffman?

  Right.

• 26:22Ryan Sean Adams?

  to crypto, totally need that.

• 26:25David Hoffman?

  Right.

• 26:25Ryan Sean Adams?

  Totally understand that. I am-

• 26:27David Hoffman?

  No way, there's no way around it.

• 26:29Ryan Sean Adams?

  But if it's doing like lending and borrowing, unless we have some sort of proof of reserve system.

• 26:36David Hoffman?

  Without, without proof, yeah, that includes some sort of-

• 26:39Ryan Sean Adams?

  With some proof of liabilities.

• 26:40David Hoffman?

  Yeah, right.

• 26:40Ryan Sean Adams?

  Or some super strong audits, right? Like, and then that should be qualified as well. Maybe that's not even enough. Like, we need some real certainty there in order to ever work with a, with a partner like that again. The other thing I'm pretty wary of right now, David, is staking, centralized staking custodians.

• 27:00David Hoffman?

  Yeah.

• 27:01Ryan Sean Adams?

  Yeah, I mean, can you imagine if FTX was like staking, I don't know, 10% of Ether right now? Like, what would that, what, like, what would happen?

• 27:13David Hoffman?

  Right.

• 27:13Ryan Sean Adams?

  If that was the case? Right? That's a major attack vector. You give up your private, like, so decentralized staking providers are really important here. So what, what are your thoughts on this?

• 27:23David Hoffman?

  Yeah, I think like, I don't have too many thoughts on like the staking element, but I think like, you, you have to have a bank, a crypto bank, Coinbase, Gemini, whatever, Kraken, to go from fiat into the crypto world. And I think like, at this point, like, this is what we're, it's ironic that like, FTX was in the Bahamas, so they would be outside of crypto regulation. And so at some point, you kind of have to tip your hat to like, regulated entities because of, this is what regulation does. And so like, like crypto banks that are inside of the US, I feel like is an acceptable line to draw.

• 28:04Ryan Sean Adams?

  Maybe, but what happened to FTX US? Is that still here?

• 28:08David Hoffman?

  Yeah, I don't know how that, I thought that those were separate. Yeah. Did you see the tweet about like, uh, SBF's dad is like a, like a Stanford, like tax, uh, tax person? And then, and then it had like, I'm not even gonna, I'm not even gonna butcher this. I'm gonna go get the tweet. It was, it was pretty funny. Uh, can you, uh, I'm gonna post it into, uh,

• 28:29Ryan Sean Adams?

  Is this part of the conspiracy theory stuff about SBF being?

• 28:33David Hoffman?

  It's no, it's, it's less of a conspiracy theory. Here, can you share your screen on that one?

• 28:37Ryan Sean Adams?

  Yeah. It almost feels scripted, that element of it.

• 28:40David Hoffman?

  Dude, this whole thing feels extremely scripted.

• 28:43Ryan Sean Adams?

  Oh, wow. Yeah. I have seen this. What are we looking at?

• 28:46David Hoffman?

  Uh, I don't know if you're sharing the right one. You're just sharing your notifications.

• 28:49Ryan Sean Adams?

  Oh, actually, uh, stop share. Let me share it there. This.

• 28:55David Hoffman?

  SBF's, uh, what was the tweet say? SBF's father was an expert in tax shelters and a professor at Stanford Law. On entirely unrelated note, this is FTX's corporate structure. Dude, that thing looks like a motherboard, man.

• 29:10Ryan Sean Adams?

  Yeah, it does. Uh, it's crazy. Look at all of these entities. I can't even, like, I can't even read it.

• 29:15David Hoffman?

  Yeah, it's insane. It's absolutely insane.

• 29:17Ryan Sean Adams?

  Yeah. So, okay, so we've lost faith in centralized institutions or centralized custodians. And by the way, I don't think that's, I don't think that's a bad thing.

• 29:28David Hoffman?

  Right.

• 29:30Ryan Sean Adams?

  Like, um,

• 29:30David Hoffman?

  It's a bummer that we can't have both.

• 29:33Ryan Sean Adams?

  Yeah. Bankless playing innocent is hilarious. Still got sponsors, I see. Yes. Sponsors are how we pay for the show.

• 29:39David Hoffman?

  We have sponsors.

• 29:41Ryan Sean Adams?

  We have sponsors. We will, I mean, the way a, uh, Bankless makes revenue is through sponsors and then through subscription.

• 29:48David Hoffman?

  Yep.

• 29:49Ryan Sean Adams?

  Member fees. That's how we make revenue, grow a business. We have, um, eight folks on our team and counting. We're trying to build, you know, uh, incredible products. We actually have a new product to announce. Probably that's coming maybe this week or next week. We'll get that announcement out. I mean, like, we're busy, like, we're trying to grow this mission. And so, yes, we have a revenue model. But, okay, so that's centralized. Exchanges.

• 30:18David Hoffman?

  Mm hmm.

• 30:18Ryan Sean Adams?

  What about regulators? What do you think they do in the wake of this?

• 30:22David Hoffman?

  Okay, so this is what has made me optimistic is that like even JP Morgan just now wrote some articles saying like, hey, like all of the bad things that happened in 2022 in crypto was because of centralization. And like, I actually think that this is a moment where we are actually able to go to the regulators and be like, look at what happened. It was a regulation shitty regulation inside the United States that made and like the enabled FTX to go offshore and do all the offshore things. And it was centralization. It's been the same things. I I'm optimistic that there is a moment where the crypto industry, the decentralized side of the crypto industry and regulators can come together and do something useful for a change.

• 31:06Ryan Sean Adams?

  See, that's that's some of that Hoffman optimism.

• 31:08David Hoffman?

  Yes, yes, I'm optimistic that this is.

• 31:10Ryan Sean Adams?

  Faith?

• 31:11David Hoffman?

  I think we have a better. We have more evidence and more talking points, and this is an educational event that we can take to the regulators and move forward with.

• 31:23Ryan Sean Adams?

  Did you see this, by the way? So I was feeling like that, like a sad thing is Sam and Kill defi in the US on its way out, right?

• 31:29David Hoffman?

  Right.

• 31:29Ryan Sean Adams?

  The wrath of the regulators is coming, right? So Jake Trivinsky, I asked him, what do we do? Did you see his thread here?

• 31:35David Hoffman?

  Oh, I didn't see it. I thought I saw that one tweet. I didn't see the thread.

• 31:38Ryan Sean Adams?

  Oh, my God, fire. He wrote this whole thread. What do we do, Jake? The regulators are coming. They're going to squash us. Jake says, we tell the truth. We explain that this wasn't a US regulatory failure or a flaw in the technology. It was a historic fraud perpetrated by a con man in the Bahamas. We uncover in detail exactly what happened honestly and ruthlessly to lay bare the crime in full. We take responsibility for not calling out the red flags, for not pushing back. We help with investigations. We show how open source public blockchains offer an unprecedented ability to root out bad actors. We take it upon ourselves to use this technology for what it does best, to increase transparency, to mitigate risk, to eliminate untrustworthy third parties. We make proof of reserves a top priority.

• 32:23Ryan Sean Adams?

  We restore the principles that brought us here. Don't trust, verify, not your keys, not your coins. We focus on education for newcomers. The very first thing we teach is self custody, not which coin will make them rich quick. We teach them self custody. We teach them how to go bankrupt.

• 32:40David Hoffman?

  I'm like, oh, there's nothing new here. We've been doing this.

• 32:44Ryan Sean Adams?

  Back to basics.

• 32:45David Hoffman?

  Right.

• 32:45Ryan Sean Adams?

  Let's back to basics.

• 32:46David Hoffman?

  Yes, there was something you said in the weekly roll up. It was like, there was a moment in time where crypto really put forth values first. And we had some like memes that you chanted, which and it was like, protocols, protocols, not kings or something, or code not people.

• 33:05Ryan Sean Adams?

  People code not kings.

• 33:05David Hoffman?

  Yes, exactly.

• 33:06Ryan Sean Adams?

  You gotta get that iteration.

• 33:07David Hoffman?

  We've, yeah, thank you. This is why, this is why you're a meme artist. And I think like, just like, we, 2021 was just like a bunch of bull market mania where we forgot about that stuff. Like that's.

• 33:19Ryan Sean Adams?

  Mitchell King, yet you still show Nexo. We are, was, were we not clear?

• 33:24David Hoffman?

  Yeah.

• 33:24Ryan Sean Adams?

  We are not working with Nexo moving forward.

• 33:26David Hoffman?

  Yeah, which is a shame for Nexo because like they're doing just fine, probably.

• 33:30Ryan Sean Adams?

  Yes.

• 33:31David Hoffman?

  But that's, that's.

• 33:34David Hoffman?

  And it's like, there, there's the whole DeFi chat of 2020, 2019 was like all about that, right? Can you say it again? So can you say it? He said.

• 33:44Ryan Sean Adams?

  Protocols not people, code not kings.

• 33:46David Hoffman?

  Can you say it again? Can you say it again for the, for the people in the back?

• 33:49Ryan Sean Adams?

  People code not king.

• 33:51David Hoffman?

  I was like, okay, so we forgot that. We forgot in 2021, we forgot that. It was NFT mania, the board ape season, yield farming. And I think we forgot all about it. And like, you know, it's just, it's like, we're just, it's the crypto industry. We're just here for that. And I think like, over the next like year or so of like, we just drill that into people's heads, man.

• 34:11Ryan Sean Adams?

  Justin said, no, you guys forgot about that stuff. Many of us did not forget about that stuff. By the way, I'm only reading, uh, right now chatter from, uh, like the.

• 34:21David Hoffman?

  YouTube chat.

• 34:21Ryan Sean Adams?

  Army that's.

• 34:22David Hoffman?

  The evil army.

• 34:23Ryan Sean Adams?

  YouTube chat that's angry. There's a lot of, a lot of supporters, obviously. Do you think we forgot that? Do you think Bankless forgot that, David?

• 34:31David Hoffman?

  Yeah, there's like a decent amount of just like, the content treadmill is like pretty subsuming. And so like, all right, like it's Monday, gotta get another podcast out the door. Like, what are we going to talk about? And like, when you're in, in it, it's harder to like stay zoomed out. And I think that's really what has like, what's, um, I was doing this weekend. It was like zooming out a little bit. But like also at the same time, like, there's only so much content you can make about that, right? Like.

• 34:58Ryan Sean Adams?

  I don't know, man. I feel like we did a fairly good job about that. Like, one asset that we've always been like accused of like talking about price too much is an asset I make no apologies for talking about price.

• 35:11David Hoffman?

  Oh, ether?

• 35:12Ryan Sean Adams?

  And that asset is ether.

• 35:13David Hoffman?

  Right, yeah.

• 35:14Ryan Sean Adams?

  I mean, it's the whole, unless ether has value, like, the security of the entire network goes down.

• 35:19David Hoffman?

  Right.

• 35:20Ryan Sean Adams?

  I mean, like, I personally, maybe I don't want to be defend, I want to be introspective here, but personally, David, I think we did a pretty good job at that.

• 35:29David Hoffman?

  Yeah.

• 35:29Ryan Sean Adams?

  But you're right, there is always the temptation.

• 35:32David Hoffman?

  We weren't militant about it, right? And so like, that's why I call it, called it like, yeah, I've been like a bank apologist lately.

• 35:39Ryan Sean Adams?

  A bank apologist? I don't think you have.

• 35:41David Hoffman?

  Up to, up to now.

• 35:42Ryan Sean Adams?

  The least bank apologist of, I mean, like, I don't know. I, I guess, I guess, what, what are we trying to accomplish right now? Are we trying to kind of look in the mirror?

• 35:52David Hoffman?

  I guess so.

• 35:52Ryan Sean Adams?

  And we're trying to say.

• 35:53David Hoffman?

  A little bit.

• 35:54Ryan Sean Adams?

  Like, what, what did we do?

• 35:55David Hoffman?

  Yeah, well, cool. Well, because you had that, that tweet where you were like, apologize on behalf of the crypto industry. It's like, hey, uh, we missed this one. We missed SPF. Like, I'm really sorry about that. And people were like, why are you guys apologizing? What the hell did you guys do? It's like, it's sometimes like anything, if it happens in crypto, I feel responsibility over it. And that's what I think what felt like wrecked me so hard on the weekly roll up. It was like, yo, when Sam rugs, this is my industry. Like, and like, what also hit me pretty hard and probably like what started that whole thing was like, I was on a call with my mom and sister, like a FaceTime call, uh, just, it was my mom, sister and dad. It was my dad's birthday and I was wishing him a happy birthday. And like, they were, we were talking about like, I was like, oh yeah, this shit's going down in the crypto world.

• 36:38David Hoffman?

  Uh, and they had heard about it, obviously. And I was like, yeah, it's like really hard to like defend crypto. And like, the speed and like energy to which my mom and sister started nodding like, yeah, it is really hard to defend what you guys are doing right now. And I'm like, oh, dude.

• 36:52Ryan Sean Adams?

  You're right.

• 36:53David Hoffman?

  Yeah.

• 36:54Ryan Sean Adams?

  You're right. We, um, they don't see the distinction. They haven't listened to all of our content, all of the shows. They don't, they don't see the subtle differences between, um, what we try to talk about and what some other crypto person is talking about. Uh, and by the way, they also see, we do talk about price go up, don't we?

• 37:14David Hoffman?

  Yeah.

• 37:15Ryan Sean Adams?

  Uh, like number go up and that can all sound the same without kind of the deeper context.

• 37:20David Hoffman?

  Dude, I love, I love all these trolls in the, in the chat and say like, time to cry again. It's like, you go make a podcast that has a bajillion listeners.

• 37:29Ryan Sean Adams?

  To teach you a lesson.

• 37:31David Hoffman?

  Yeah. What lesson is gonna, is Richard gonna, gonna teach me?

• 37:33Ryan Sean Adams?

  Uh, let's see. Richard Hart. Let's go to the website here.

• 37:37David Hoffman?

  Dude, the website's so bad, man.

• 37:39Ryan Sean Adams?

  What's Richard Hart?

• 37:39David Hoffman?

  What's, what's he up to?

• 37:41Ryan Sean Adams?

  For good in this world. He owns the largest.

• 37:44David Hoffman?

  How can he have that? This is the biggest troll website of all time.

• 37:48Ryan Sean Adams?

  In watches and raised $23 million for medical research. He owns the quickest Ferrari ever made and the most expensive Rolexes ever made. This is richardhart.com. I'm on the right website. He's got 10 million in watches and 3 million in cars. With 145 IQ, he invented.

• 38:07David Hoffman?

  145? Wow, that's really good.

• 38:09Ryan Sean Adams?

  Which went up in price 10,000 X. He gave over 500,000, uh, $500 million of free money to Bitcoiners and created the largest free airdrop of coins through pulsechain.com. He also called Bitcoins top two cycles in a row. This is his website. This is a person that should not be doing what he's doing in crypto. This is an example of a demagogue that does not deserve our respect. And anyone who tells you he does is trying to sell you some hex coin. And that's the bottom line.

• 38:43David Hoffman?

  Yeah.

• 38:43Ryan Sean Adams?

  And so, I mean.

• 38:44David Hoffman?

  Do you think he wrote that himself?

• 38:46Ryan Sean Adams?

  I have no idea. Are we getting, are people angry in the chat?

• 38:50David Hoffman?

  Well, that's what I'm saying. Like dude, everyone's angry, man. Like we have like.

• 38:54Ryan Sean Adams?

  Website. If you're a serious adult with a brain, like read this website and tell me how you think that this is a legitimate person who, um, cares about the values that, that, uh, crypto is based on.

• 39:04David Hoffman?

  It's insane, man. It's insane. Like, well, that's what I was saying. Like the industry just feels so toxic at the moment. Like, like perhaps I've been too mean to the Cardano folk and so they come back.

• 39:16Ryan Sean Adams?

  That? Do you want to say sorry to any of the Cardano folk right now?

• 39:21David Hoffman?

  Cardano is not a scam. Yes, I regret, I regret saying those words. I felt very frustrated by not because Ethereum has a history of unfulfilled promises, which is now, I would now consider those promises fulfilled. I think Cardano also has that, and I just am skeptical on there even being intent on that being fixed. But I'll totally admit that that's just my gut feeling that the Cardano community knows way more about, and so their opinions are probably far more legitimate than mine. The X community can fuck right off.

• 39:56Ryan Sean Adams?

  Well, there you go. That's the mood. What do you think the mood of the rest of the market is? Are people angry? Are they just, are people leaving for good? Have you heard anyone in your circle say, "Hey, I'm out for good"? Like, this was it for me.

• 40:09David Hoffman?

  Well, yeah, but no, because I surround myself by other people that are going to be here no matter what, right? Yeah. So it's like the margins that are the undecided.

• 40:18Ryan Sean Adams?

  You're in a bubble, aren't you?

• 40:19David Hoffman?

  Yeah, I'm in like a bubble, for sure. Yeah, yeah, yeah. And so, no, I don't see anyone leaving, but I wouldn't put myself in the comfort or in the company of somebody who would leave, though.

• 40:30Ryan Sean Adams?

  All right, let's talk about people we know who've been on the podcast, maybe. Okay, Travis Kling, ikeyguy. Did you just say their fund is blown up?

• 40:38David Hoffman?

  Yeah, yeah.

• 40:40Ryan Sean Adams?

  That's sad, and it's because Travis had all of his.

• 40:44David Hoffman?

  Well, at least, it sounds like a significant majority of the funds on FTX, yeah.

• 40:48Ryan Sean Adams?

  Absolutely brutal. MultiCoin, they're still standing, but wounded?

• 40:52David Hoffman?

  Downtown 10 to 15%, yeah.

• 40:55Ryan Sean Adams?

  10 to 15?

• 40:56David Hoffman?

  There's like the jokes around of like, people two months ago, "Proud investors of FTX, like VCs now. It was a small check."

• 41:05Ryan Sean Adams?

  What about like, I know like Paradigm, for example, they were in on the FTX deal, weren't they?

• 41:11David Hoffman?

  Yes, yeah. Yeah, yeah, yeah. I mean, a lot of people were, man. A lot of people had, like, they were part of one of the ways that FTX had a bunch of money is they kept on raising money, man. They had, they had great revenue, and then they would buy everything. But like, it was, it was one gigantic fraud, where like, money in to fund SPF's ego.

• 41:32Ryan Sean Adams?

  Okay. Do you know another thing we got a lot of pushback for? I feel like I don't want to spend this episode on this.

• 41:37David Hoffman?

  Defending ourselves. Yeah. Cause I don't feel like we need to defend ourselves in the slightest.

• 41:41Ryan Sean Adams?

  But, but last thing, do you regret ever having SBF on? We've had him on.

• 41:44David Hoffman?

  No, dude. No. No, not at all.

• 41:48Ryan Sean Adams?

  Back in March, if you remember.

• 41:50David Hoffman?

  Yeah.

• 41:51Ryan Sean Adams?

  And this is like a contrast because we're having all of the exchange.

• 41:55David Hoffman?

  Yeah.

• 41:56Ryan Sean Adams?

  And the second largest, third largest exchange, we had Brian Armstrong on and he talked about crypto values. And then we had SBF on and the contrast of like, there aren't crypto values there. It was like, I'm a trader. This is how I make money.

• 42:09David Hoffman?

  Right. I'm a, I'm a business builder. I'm a trader and I'm good at it.

• 42:12Ryan Sean Adams?

  Talk to CZ. But he said that, um, a lot of people are saying you had, you had SBF on. You gave him a platform. You enabled this. Is this just part of the witch burning?

• 42:22David Hoffman?

  I guess so. Yeah. People are just looking for people to, to.

• 42:25Ryan Sean Adams?

  I don't regret that. You didn't want us not to talk to.

• 42:27David Hoffman?

  It was a good episode. It's like, yeah, what did I learn from that? What did I learn from that episode with SBF? He's not going to build DeFi. He's going to build a grid exchange and he, remember like the exchange was good. It was a good product that people enjoyed. And if it's. Except, except for the fraud in the back, but the exchange in the front was a functioning product that was worth something. Yes. It's a, well, see like that, there's, there should, there should be, uh, there should be a dividing line between like, okay. You have the functioning exchange, which was a money printer, which was great. And like, and that's why FTX employees even feel rugged by this is because like in the back, it was SBF's like personal bank account to go

• 43:10David Hoffman?

  like buy cool things because he was a child with no adult in the room.

• 43:15Ryan Sean Adams?

  Right.

• 43:15David Hoffman?

  And so like, if you could separate those things, and this is why Tremath wanted to have FTX as like a board of directors. If you could separate those things and have like adults in the room, we would still be able to have FTX.

• 43:25Ryan Sean Adams?

  The best thing we can do is like, so here's the thing, as kind of a, I think a content creator and having podcasts that I've learned, like, our audience isn't dumb.

• 43:37David Hoffman?

  No.

• 43:37Ryan Sean Adams?

  Why should, why should we like?

• 43:39David Hoffman?

  We have one of the, I'd say we have one of the smartest audiences in crypto.

• 43:42Ryan Sean Adams?

  I mean, like, we shouldn't be paternalistic about this. They can listen to a conversation and make their own judgments about the individual in front of them. Is another, exactly what we also did with Eric versus Eric Voorhees versus SBF.

• 43:56David Hoffman?

  Right.

• 43:57Ryan Sean Adams?

  We brought him in and they just talked.

• 43:59David Hoffman?

  Talk, right.

• 44:00Ryan Sean Adams?

  If you came out of that episode and you were thinking that SBF, like, was in it for crypto values and cared about DeFi and decentralization and was going to stand up for these principles in DC, I don't know what to tell you, like, because you didn't watch the same episode that, that I did.

• 44:18David Hoffman?

  Right.

• 44:18Ryan Sean Adams?

  And so.

• 44:19David Hoffman?

  We were trying to get Sam on for a while and we were having a bad time reaching to him because we've been so antagonistic to him up to that point. Yeah, right. He had you blocked. I forgot about that.

• 44:30Ryan Sean Adams?

  Yeah, it was a preemptive blocking, like, I'd never interacted with him, but he just didn't like, I don't know, Vegas Valley, I don't know, something like that.

• 44:38David Hoffman?

  There was something, yeah, we were like barely warm to Sam, sometimes antagonistic because he was like part of the Solana ecosystem and we were critical of Solana. Anyways, I don't know. In all of my years in crypto, I've never been hacked, scammed, or lost money to a thief. And a lot of that credit goes to my Ledger hardware wallet. The Ledger Nano X and the Ledger Nano S plus hardware wallets allow users like you and me to secure and manage all of our crypto assets and our NFTs, all with the security of storing users' private keys offline and out of reach from hackers. The Ledger Nano X is the perfect hardware wallet for managing your crypto and NFTs on the go because it connects to your phone with Bluetooth and has a nice big screen for easy transaction readings.

• 45:19David Hoffman?

  Ledger has also upgraded the iconic Ledger Nano S and made the new Ledger Nano S device more DeFi and NFT friendly, making it the perfect hardware wallet for beginners. Ledger has truly maximized for both ease of use and security. So discover which Ledger device is best suited for your journey by going and visiting. shop-ledger.com. If you've been listening to Bankless, you know that we're fans of the modular blockchain thesis. The idea that blockchains will separate execution from data availability and consensus, allowing all three to become the best versions of themselves. And Fuel has built the fastest modular execution layer in the industry. By supporting parallel transaction execution, Fuel unlocks significantly faster throughput for the web3 world. Fuel also goes beyond the limitations of the EVM with its own Fuel VM, which is more

• 46:04David Hoffman?

  efficient and optimized, opening up the design space for developers. And lastly, Fuel brings a powerful developer experience with its own domain-specific language, Sway, and a supportive tool chain called Fork. With Fuel, you can have the benefits of smart contract languages like Solidity while adopting the improvements made by the Rust tooling ecosystem, letting the Fuel development environment go beyond the limitations of the EVM. If you want to learn more, there's a link in the show notes to see how you can get involved with a Fuel network. The Layer 2 era is upon us. Ethereum's Layer 2 ecosystem is growing every day, and we need Layer 2 bridges to be fast and efficient in order to live a Layer 2 life. Across is the fastest, cheapest, and most secure cross-chain bridge. With Across, you don't have to worry about high fees or long wait times. Assets are bridged and available for use almost instantaneously.

• 46:47David Hoffman?

  Across's bridges are powered by Ooma's Optimistic Oracle to securely transfer tokens between Layer 2s and Ethereum. Across is critical ecosystem infrastructure, and Across V2 has just launched. Their new version focuses on higher capital efficiency, Layer 2 to Layer 2 transfers, and a brand-new chain with Polygon, all while prioritizing high security and low fees. You can be a part of Across's story by joining their Discord and using Across for all of your Layer 2 transferring needs. So go to across.to to quickly and securely bridge your assets between Ethereum, Optimism, Polygon, Arbitrum, or Bova Networks.

• 47:19Ryan Sean Adams?

  Where do we go from here? Can we get to that?

• 47:22David Hoffman?

  Okay, so here's what I'm optimistic about, again. We, as an industry, were faced with a lot of scammers and, just like fraudsters and bad actors in 2022. Do Kwan, Danny Sesta, Three Arrows Capital, who, again, I think Suzu is like an okay guy, but like when you give him money, he's bad.

• 47:46David Hoffman?

  And like now SBF and like so we we've been faced with a variety of like fraudulent people or just like scammers like Danny Acesta and like Do Kwon, I don't know what to categorize him, but like not good. And so like as an industry, we've learned who these people are. They have a couple, they're all different flavors, but they all have kind of similar bases to them. Like, they all are obsessed with themselves. They all want to promote their ego. Like, why was SBF the face of FTX and when with his like sweaty t-shirts and like New Balance sneakers and he plastered himself all over San Francisco? So like we've, as an industry, back in 2013, we learned not your keys, not your crypto because of Mt.

• 48:25David Hoffman?

  Gox. We haven't learned something like that for a long time. As bad as 27, 2018 was, it was like, wasn't really anything like, there wasn't anything that crazy there. It was just like unsustainable business models with ICOs. In 2022, it got bad because we had so many scammers rug us left and right. But like, the learning lessons is like, I think we as an industry will be able to call out the early warning signs and the red flags a lot better now because of the lessons that we've learned in 2022. So I think it is going to be a lot harder to scam this industry and defraud this industry moving forward because we've seen it before. We've had it happen to us.

• 49:06Ryan Sean Adams?

  Do you think we just get some temporary resistance, though, and then need to be re-inoculated? There's a new generation that comes, they also need to be inoculated, right? I mean, the class of 2013 and a lot of those OGs were not fooled by this SBF person.

• 49:21David Hoffman?

  Right.

• 49:21Ryan Sean Adams?

  And like, I guess like, I, look, Voorhees did not think SBF was a straight scam.

• 49:26David Hoffman?

  No one did, dude. No one did.

• 49:27Ryan Sean Adams?

  SBF was the most successful con man that we have had in crypto.

• 49:31David Hoffman?

  Right.

• 49:31Ryan Sean Adams?

  Like, just very good at it.

• 49:34David Hoffman?

  See, con man implies intent. He was, he didn't even intend to be a con man. He was just irresponsible.

• 49:40Ryan Sean Adams?

  I guess, uh, I don't know. I don't know. I don't know what the man is thinking. I don't know what is in his kind of like brain or his heart. I mean, like, look, man, 11 days before we had the conversation with him and he knew he had a $10 billion, you know, a hole in his balance sheet and he's playing with depositors money. I mean, I don't know what you call that con. I don't know.

• 50:04David Hoffman?

  Fraud, fraud.

• 50:05Ryan Sean Adams?

  Accidentally, you don't accidentally stumble into that. Like, there was some, uh, definitely. Anyway, Voorhees did not smell that out in person, but he knew, like, I'm not going to give anyone, like, on principle alone, I'm not going to give someone else my private keys.

• 50:20David Hoffman?

  Right.

• 50:21Ryan Sean Adams?

  Right? Like, I'll use exchange to get fiat crypto and I'm out. I'm out.

• 50:25David Hoffman?

  Yeah.

• 50:25Ryan Sean Adams?

  Right? And I, I have custody of my, or it's in a smart contract wallet or something else. By the way, I think the apology that we as an industry and a subset of an industry of crypto, we in the DeFi community owe the world and the rest of crypto is we didn't educate well enough. Okay, we tried. What do you mean we tried?

• 50:48David Hoffman?

  Yeah.

• 50:48Ryan Sean Adams?

  Well, I'll say it's like the attention isn't there all the time. I mean, talk about private keys and some, somebody else is talking about like, whatever coin has gone up 20x and they'd rather tune into that. But education, I think we could have done a better job. The other thing is building. It's just the user experience of taking custody of your private keys sucks still. It's not great. It's hard. Right? So even in my dad, when I was talking to him, I was like, you get, you want to get your money off Coinbase? He's like, yeah, you're needing to help me with that. And like, yeah, I really am going to need to help you with that. So you don't like, so that's the other thing I think we could be, that we could have done better.

• 51:26David Hoffman?

  Yeah. I was on Kevin and Waki's podcast yesterday and we were talking about like, all right, what, what like, how do we, how do we move forward in like more concrete steps and like, yo? We need account abstraction, bro. Like, that's exactly what we need. And like, we don't have time to go into what account abstraction is, but like, it is the thing that unlocks the golden age of UX improvement for self-custoding assets. And this is, like, education's one thing. We just need to make self-custody assets cool and fun and easy, and we don't get there without account abstraction.

• 51:59Ryan Sean Adams?

  It's account abstraction, smart contract wallets, really, is the way forward, right? I mean, Vitalik talked about, we had him on the podcast, was it almost like two years ago now? He talked about this?

• 52:09David Hoffman?

  He's talked about it a number of times.

• 52:11Ryan Sean Adams?

  I mean, but like, on bankless, I just feel like that's an area we haven't moved the dial very much at all. And I'm a little like, hopefully, this will be the pressure that we need. There's a tremendous amount of demand right now to use bankless systems to take custody of your own keys. And David, I want the experience of like, I have it on my phone, and I can share social recovery style with a few other people in my network that I trust. Right? And the gas fees are low, and so it's not going to cost me, you know, a hundred dollars.

• 52:48David Hoffman?

  Well, see, with account abstraction, it wouldn't even be your family. It would be just your other devices.

• 52:53Ryan Sean Adams?

  Perfect.

• 52:53David Hoffman?

  Yeah.

• 52:55Ryan Sean Adams?

  Like, that is something we absolutely need right now. Yeah. All right. What else you got? What else? Should we talk about? What else is in your mind?

• 53:03David Hoffman?

  I don't know, chat. We're either gonna talk about whatever you guys want us to talk about, or we're gonna sign off. So take this moment to ask some questions or prompt us with something.

• 53:14Ryan Sean Adams?

  What are prices like, real quick?

• 53:17David Hoffman?

  Twelve, low twelves for ETH, I think. Ratio is at 0.75, yeah. Once again, I feel good about my buys. Have you made any moves lately?

• 53:27Ryan Sean Adams?

  No, David. See, so, so I was thinking about the difference between like, our kind of timing things. And you're really good at getting like, these local buys.

• 53:35David Hoffman?

  Lately, lately, yeah. Knock on wood.

• 53:38Ryan Sean Adams?

  That's good. But I want to be really good at like, buying the kind of the more sustained, like, long. I don't think, I think we'll be in this range for a while. I'm knife catching right now. We're actually going lower at some point. And so I'm still.

• 53:51David Hoffman?

  I don't think we're going lower.

• 53:53Ryan Sean Adams?

  I'm still on board. I think we're going to triple digits first. I think something's gonna shake us. I'm not talking about locally. I could take a month. It could take a few months. I have no idea, but that's what I'm guessing. I could be wrong, in which case I'll have missed the train yet again, but.

• 54:07David Hoffman?

  Oh, Bot Hunter asks, when Steve Newcomb? We have a Wednesday episode coming out with Steve from ZK Sync. So there's that.

• 54:13Ryan Sean Adams?

  Look, that's still progressing. What's the next big tragedy to fall crypto, do you think? We've seen a lot of them.

• 54:22David Hoffman?

  If it's a bigger one, then it's just dashing my hopes and dreams, Jesus. Like, it's, it was, the only way it could be bigger than FTX is if it was something that was even more trusted by the industry. And so like, it's, that's gotta be something like Gemini or Coinbase. Like, if some trading firm like Genesis went under, which people were worried about, people are like, oh, get your funds out of Gemini, earn, because Genesis, their trading firm is going under. Like, if it was just a good trading firm, that would be one thing. Like, but it's like, we need to like, not lose trust and faith in our institutions. And that includes our fiat on-ramps. And so like, yeah, if Coinbase did something bad, or Gemini did something bad, or Kraken, like, that would be bad. But again, like, what's

• 55:05David Hoffman?

  the bigger shark beyond FTX?

• 55:09Ryan Sean Adams?

  I'm worried the next thing is, I think, I think we've removed the custodial kind of risk from, from the pools here, mostly. And we've, we've removed a lot of the margin, a lot of the leverage. I've always been worried about kind of the, the D-Day sort of hack, like a major smart contract hack or something, like a, like an AVE, or like, maybe in kind of the new world of layer twos, something, layer two, some issue with a massive layer two, after it gets to significant highs. Yeah. And there's like a DAO type of event, like the original, the DAO event, where you have a massive hack. But, I guess we're dwelling on.

• 55:53David Hoffman?

  You want some alpha?

• 55:54Ryan Sean Adams?

  I want some alpha.

• 55:55David Hoffman?

  So I had some friends over at my place this weekend. One of them worked at Coinbase, who shall not be named. But they, they were talking about just like, they're inside of the United States competition, like, it's FTX, it's Binance, it's Coinbase. FTX was flat in terms of user adoption and user acquisition. It was Binance that's been starting to creep up against Coinbase. And this was before FTX went under.

• 56:22Ryan Sean Adams?

  Wow. So now our banks have gotten even bigger because we've had a major competitor get kind of deleted. And you know Coinbase is there, but Coinbase is somewhat DeFi aligned. I feel like

• 56:37David Hoffman?

  Yes, Coinbase is very DeFi aligned. They have a they have a self custodial wallet inside of their main consumer application.

• 56:44Ryan Sean Adams?

  Yeah, I mean, we'll, we'll continue to push on them and hold them accountable for that. But I mean, that's what they says they're they're more DeFi aligned. So I feel like left standing. It's kind of the like, because the the alt layer ones have taken not mortal wounds. I think they'll be back, but they are severely wounded and they're kind of limping away. Like the soul community is is down bad right now.

• 57:06David Hoffman?

  Yeah, I think I think that's definitely true in terms of price. But I'm I'm wondering if like, I mean, you remember what it was like when we watched Ether go to $80. Like I became like I felt stronger camaraderie with the crypto Twitter ETH crew during that moment.

• 57:22Ryan Sean Adams?

  I just think it's what Sol has to figure out is like what Solana has to figure out is look, I don't think they're dead. They're definitely not dead. But now they've got kind of a major exchange supporter that was basically a Joe Lubin like of Solana out of the picture completely. They take a hit from that, right? And in in the face of that, they also have increasingly or two competition that is pretty significant and having low block fees is not is not enough. Like right now, when you have like a ZK EVMs that are nipping at your heels. So I do think Solana is going to have to, I mean, they're going to exist, but they're going to have to

• 58:04David Hoffman?

  Have some uphill battles, yeah.

• 58:05Ryan Sean Adams?

  They might have some uphill battles and they might have to kind of reinvent themselves. But anyway, all that to say, I feel like it's Binance and then there's Ethereum DeFi. It's these are the these are the major horses left.

• 58:17David Hoffman?

  Yeah.

• 58:18Ryan Sean Adams?

  And so I'm not saying CZ is final boss because he's not, I don't, I don't think. And right now he's reasonably crypto aligned, but like

• 58:28Ryan Sean Adams?

  Finance is a bank, right? And I hope they go in the direction of decentralization. But it's interesting that rather than align with Ethereum and building on layer twos, they decided to launch their own kind of Get4 BNB chain powered by BNB the token. And like, I think CZ is a brilliant strategist and business person. But I don't know. I don't know if that will mesh with what the end state vision we hope for, for DeFi and crypto is.

• 58:57David Hoffman?

  Right? I think like Binance will only be as DeFi aligned as it makes rational profit sense. As in like, the only reason why Binance Smart Chain exists is because it was a profitable endeavor by CZ, not because of any particular like ethos of crypto, right? But still, that is a significant step ahead of most people in this space, so.

• 59:26Ryan Sean Adams?

  Do you think that we'll be able to convince regulators that DeFi is already regulated? It's just regulated by code?

• 59:32David Hoffman?

  And that that's the biggest ask in, in, in that's possible. Like to convince them that the EVM is all the regulation that we need.

• 59:40Ryan Sean Adams?

  It's not, that's not, so I think that's not totally the objective. I think it would be really cool if we figured out. All right, so part of this, which was so fascinating is we got to watch a bank run unfold in real time.

• 59:56David Hoffman?

  That was pretty fun.

• 59:56Ryan Sean Adams?

  On Chainalysis, on Nansen, on EtherScan, on Twitter, right? Like, the whole thing was publicly visible. That's, to me, that sounds like a regulator's best friend. And if, if we, we can kind of present tools to them that allow them to check the reserves of.

• 1:00:19Ryan Sean Adams?

  DeFi protocols if they want, but also like, you know, some of the more centralized parties and validating it like they might, I'm not saying this current regulatory regime, but like if they were smart, back to your optimistic vision, if we could educate them and show them and convince them of all of the wins in DeFi, and if they really cared about the missions of their regulatory agencies, which is like protecting American citizens, right? And, you know, fair, efficient markets, these sorts of things, then maybe, maybe there's a shot that we can actually recruit them and get them on board to pushing the industry in the direction of why have another, you know, blockFi stood up when we can have

• 1:01:04Ryan Sean Adams?

  a user interface on top of an AVE and a compound and like collateral backed DeFi protocols that are completely transparent and publicly audible.

• 1:01:15David Hoffman?

  Yeah, with proof of reserves every 12 seconds. Yeah.

• 1:01:18Ryan Sean Adams?

  Right. I mean, this is kind of what we need to be.

• 1:01:22David Hoffman?

  Like, there is a window that has opened here and we need to make sure.

• 1:01:25Ryan Sean Adams?

  You think so?

• 1:01:25David Hoffman?

  Yes. Yes.

• 1:01:27Ryan Sean Adams?

  I guess my, my, my final thought on this piece is I am so relieved that a sociopath and a predator who is clearly bending his empire towards the destruction of DeFi and crypto, and we didn't know it yet. Like, it was, it's basically, it's like Senator Palpatine, like in the back.

• 1:01:46David Hoffman?

  Yes, we found Senator Palpatine in like this first two or three years of existence. Yeah.

• 1:01:52Ryan Sean Adams?

  Right? Thank God, because he turns into Emperor Palpatine later, full Sith Lord. And like, then it's too late. Then he's already has the entire galaxy under his dominion, right?

• 1:02:05David Hoffman?

  Yep.

• 1:02:06Ryan Sean Adams?

  We have to fight back. Like, that's literally what we just uncovered. And I am. If he got, if he got this far, and what, it's been in the industry since 2018, 2019, he got this far in four years. Biggest democratic donor, massive political, the guy who's representing crypto in our houses of legislation, second largest crypto exchange, Tom Brady cameos. Like, this guy was everywhere and would have been such a dangerous

• 1:02:40David Hoffman?

  Right.

• 1:02:41Ryan Sean Adams?

  individual to have in this space. And we got him out. What a victory that is.

• 1:02:45David Hoffman?

  He was, he was a cancer. And this is why the industry is hurting right now. We, we crypto is one holistic body. We had cancer. It was propping us up for a while. And now we cut the cancer out and now we're hurting. And now we're post-surgery and now we're recovering.

• 1:03:02Ryan Sean Adams?

  Recovering, recovering.

• 1:03:04David Hoffman?

  Recovering. Maybe that's the state of things is we are recovering.

• 1:03:07Ryan Sean Adams?

  Did he really just tweet out an "N"?

• 1:03:10David Hoffman?

  Yep, we got an "N".

• 1:03:11Ryan Sean Adams?

  This guy.

• 1:03:12David Hoffman?

  This fucking guy, dude. Fucking guy.

• 1:03:14Ryan Sean Adams?

  What happened?

• 1:03:16David Hoffman?

  What happened?

• 1:03:16Ryan Sean Adams?

  What happened? That's what he's gonna do?

• 1:03:18David Hoffman?

  Yeah.

• 1:03:19Ryan Sean Adams?

  Unbelievable.

• 1:03:20David Hoffman?

  Unreal.

• 1:03:22Ryan Sean Adams?

  I can't wait to forget this guy and move on. Bankless, move on with DeFi. You got anything left, David?

• 1:03:29David Hoffman?

  I think this is good. This is helpful. Yeah.

• 1:03:32Ryan Sean Adams?

  Thanks for staying strong, Bankless community. We appreciate you guys.