ROLLUP: Rate Cuts Price Savior? | Trump’s DeFi Project | Vitalik’s Documentary

The Fed just cut rates by 50 basis points for the first time since the pandemic, how is the market reacting, should we be excited? Trump revealed new details about World Liberty Financial. We’ll break down why they’re building it, who’s involved, and what’s going on with the token. We also have a Tale of Two Chains: Bitcoiners watching Trump buy a burger with Bitcoin in NYC, while Ethereans premiere an Ethereum documentary down the street. ------ 📈 INDEX COOP | LEVERAGE TOKENS https://bankless.cc/IndexCoop ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2 ⁠ 🦄UNISWAP | BROWSER EXTENSION https://bankless.cc/uniswap 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle ⚡️ CARTESI | LINUX-POWERED ROLLUPS https://bankless.cc/CartesiGovernance 🗣️TOKU | CRYPTO EMPLOYMENT https://bankless.cc/toku ------ ✨ Mint the episode on Zora ✨ https://zora.co/collect/zora:0x0c294913a7596b427add7dcbd6d7bbfc7338d53f/66?referrer=0x077Fe9e96Aa9b20Bd36F1C6290f54F8717C5674E ------ TIMESTAMPS & RESOURCES 00:00 Start 02:36 Markets https://x.com/ledgerstatus/status/1835473538028814667 06:09 RSA Finally Cracks https://x.com/RyanSAdams/status/1836779556998459436 10:55 Total MKT Cap https://www.coingecko.com/en/global-charts 11:09 L2 Update https://www.growthepie.xyz/fundamentals/transaction-count 13:36 Fed Rate Cuts https://x.com/SpecialSitsNews/status/1835699786785136703 https://www.cnbc.com/2024/09/18/fed-cuts-rates-september-2024-.html 18:57 Cut Reactions https://x.com/TimDuy/status/1836154346045870391 https://x.com/coinbase/status/1836470341063053572 https://x.com/RyanSAdams/status/1836795960321585388 https://www.coindesk.com/business/2024/09/18/arthur-hayes-if-they-go-50-that-will-be-a-nuclear-catastrophe-for-financial-markets/ https://x.com/intocryptoverse/status/1836471892674302430?s=46&t=2ZINVXJQKx6xO_6Wiiu_2g https://x.com/intocryptoverse/status/1836471892674302430?s=46&t=2ZINVXJQKx6xO_6Wiiu_2g https://x.com/Jamie1Coutts/status/1836192104722370930 https://www.tradingview.com/chart/1RYLG2gC/?symbol=NASDAQ%3AQQQ https://youtu.be/b6O-lHr-D0s?si=7uiJPAxPibmCTLsz 27:03 Trump's Liberty Financial https://x.com/EricTrump/status/1834322630721122521 https://x.com/worldlibertyfi/status/1835748701534404945 https://x.com/alexandergrieve/status/1836006655223275904 32:06 Takes On The Project https://x.com/iamDCinvestor/status/1836006290125987860 https://x.com/worldlibertyfi/status/1835300402163503260?s=46&t=dmRhP54bJmHi0Ppb8BT30Q https://x.com/worldlibertyfi/status/1835300402163503260?s=46&t=dmRhP54bJmHi0Ppb8BT30Q 34:42 Trump Pays With Bitcoin https://x.com/WatcherGuru/status/1836510214482284545 https://x.com/crypto_condom/status/1836512092503077146 36:39 Vitalik Film Premiere https://ethereumfilm.xyz/streaming https://x.com/EthereumFilm/status/1828192695095042429 https://x.com/TrustlessState/status/1836737714223210638 https://x.com/dimabuterin/status/1836701356565922006 https://x.com/ViktorBunin/status/1836556640734085478 https://x.com/jessepollak/status/1836607456497275028 https://x.com/jessepollak/status/1836607456497275028 https://x.com/EthereumFilm/status/1835973354995499061 41:36 SEC Sues Rari? https://www.sec.gov/newsroom/press-releases/2024-138 https://x.com/dcfgod/status/1836488126744924299 43:03 The Flyfish Case https://www.sec.gov/files/litigation/admin/2024/33-11305.pdf https://x.com/HesterPeirce/status/1835757603860681141 https://x.com/FinancialCmte/status/1836124400695021654 https://x.com/RepFrenchHill/status/1836420981310542092?t=KbWMCpEacfkVWgSADJSgQg&s=19 https://x.com/RepFrenchHill/status/1836420981310542092?t=KbWMCpEacfkVWgSADJSgQg&s=19 50:41 Token 2049 https://x.com/justinsuntron/status/1836330985706918253 https://unchainedcrypto.com/buterin-at-token2049-were-not-early-to-crypto-but-were-early-to-crypto-being-usable/ 53:36 New Zora App https://x.com/RyanSAdams/status/1836399083482742814 56:19 New Fastest Rollup https://x.com/atlasxyz/status/1833880969251524973 57:39 Permissionless Party https://lu.ma/yj5pdeqe Bankless listeners - 10% off tickets with BANKLESS10 Bankless citizens - 30% off tickets with link: https://bankless.cc/PermissionlessDiscount 59:26 Moment Of Zen https://www.youtube.com/watch?v=71DtEk1cFdg ------ Not financial or tax advice. 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.

• 0:03Ryan Sean Adams?

  Bankless Nation is the third week of Flat Timber. It's time for the Bankless Weekly roll up. We got some Fed rates to talk about, David. What did the Fed do this week? What are we talking about?

• 0:14David Hoffman?

  The Fed rates, also the jobs report. So, big macro numbers coming in this week. How is the economy responding? Because the markets did not initially move to the Fed BIPs cut that we got. How many BIPs did we get? We cut some BIPs. How many of them? So, we'll talk about all the macro news that we got this week. Also, Trump family introducing the details around World Liberty Financial. Why are they building it? What is it? What does it do? Who's on the team? And what about the token? That I think even CNBC talked about? The World Liberty Financial token?

• 0:46Ryan Sean Adams?

  Yes.

• 0:46David Hoffman?

  That is being released?

• 0:48Ryan Sean Adams?

  Well, they have to talk about these things because it's a president. And speaking of Donald Trump, maybe this is a tale of two chains here. So, Bitcoiners were enjoying watching Donald Trump purchase something in a Bitcoin bar with Bitcoin. We have a clip of that. And also, down the street, Ethereum's were having a different type of party. They were celebrating a movie release that I think you've seen. I'm going to catch the details on that. And then, we also have Big Bad Gary Gensler. He's back at it. He's got a few enforcement actions, but he's going to be on the hot seat next week, David. It's actually going to be in front of Congress, Gary Gensler and Hester Purst at the same time. We have never seen that showdown. I'm almost more excited to see that than I am you and the cane fight, David.

• 1:33David Hoffman?

  Here's how I think this is going to go.

• 1:34Ryan Sean Adams?

  Yeah.

• 1:34David Hoffman?

  It's going to be like, it's going to be the Republicans just grilling Gary Gensler. Saying, Gary Gensler, can you please explain yourself? And then Gary Gensler is going to give some bullshit.

• 1:44Ryan Sean Adams?

  Yeah.

• 1:44David Hoffman?

  And then they're going to be like, Hester, like, what do you think? And then Hester's going to be like, everything-

• 1:48Ryan Sean Adams?

  Throw him right under the bus?

• 1:49David Hoffman?

  Everything that Gary Gensler just said, I also think is bullshit. I think that's how this is going to go.

• 1:53Ryan Sean Adams?

  I can't wait. Next week is going to be Hester Purst week on the roll up for sure. But we got to wait for that. Also, I'm going to throw out an apology. So, you are back in New York City, right?

• 2:01David Hoffman?

  That's right, yeah.

• 2:02Ryan Sean Adams?

  Okay. So, last time, when I was like, David's on a flight, he's in Lisbon. I said Lisbon, Spain, when I meant Lisbon, Portugal.

• 2:08David Hoffman?

  I did not pick up on that.

• 2:09Ryan Sean Adams?

  You didn't catch?

• 2:09David Hoffman?

  Yeah.

• 2:10Ryan Sean Adams?

  A bunch of Youtuber comments did. And so my apologies for that confusing cities and their locations. New software update. That will never happen again.

• 2:18David Hoffman?

  Okay. Add that this one and we'll add it to the Greenwich. Greenwich.

• 2:24Ryan Sean Adams?

  What did I say? Greenwich, Connecticut?

• 2:27David Hoffman?

  Greenwich, yeah.

• 2:28Ryan Sean Adams?

  Yeah. Something terrible. All right. Well, this is how we learn, right? This is how the models improve here. We got some market updates. We got to thank Kraken for these. Are they beautiful market updates?

• 2:40David Hoffman?

  They are beautiful markets. They are beautiful markets. Look at that. Green, green, green, green, green, green, green, green across the board. Bitcoin, start of the week, 58,300, up 9.2%. Almost a double digit green week currently coming in. $63,800. When's the last time Bitcoin has been up over $5,000 on the week?

• 2:58Ryan Sean Adams?

  That's great.

• 2:59David Hoffman?

  Bitcoin's up $5,000.

• 3:00Ryan Sean Adams?

  Wait, what's the percentage then?

• 3:01David Hoffman?

  9.2.

• 3:02Ryan Sean Adams?

  9.2? Almost double digit?

• 3:05David Hoffman?

  Almost double digits, yes.

• 3:06Ryan Sean Adams?

  Wow. So, you know, the price is up, but did we deserve it? I'm going to say, yes, we did.

• 3:09David Hoffman?

  I think, oh, for sure. For sure. We deserve a lot more globally, across the board.

• 3:13Ryan Sean Adams?

  I agree.

• 3:14David Hoffman?

  Especially Ether. Starting the week at 2,340, up 5.5% on the week. Currently at $2,450. You're at the one day chart, so you're really zoomed out.

• 3:26Ryan Sean Adams?

  Oh, I'm zoomed out.

• 3:27David Hoffman?

  Yeah, that's why.

• 3:28Ryan Sean Adams?

  We're up on the week.

• 3:29David Hoffman?

  Yeah, it still looks bearish when you zoom out. But when you zoom into the week, it's pretty, still, it's a little bit more bullish. But nonetheless, Ether is at its 200-week moving average line. This is a tweet that Ledger Status put out. And that is, that means that it's low. That means that like Ether.

• 3:47Ryan Sean Adams?

  It's dropped to its 200 moving average, yes?

• 3:49David Hoffman?

  Or the 200 moving average has caught up to Ether, which hasn't really moved all that fast. And so basically, it's saying that Ether hasn't moved over a long period of time. Bitcoin, if you put Bitcoin at its 200-week moving average, Bitcoin would be $39,000 instead of where it is at $63,000.

• 4:08Ryan Sean Adams?

  Okay, so if you are a Bitcoiner out there, you're just a Bitcoin, like Maxi, you're just insane crazy for Bitcoin. Imagine how you would feel right now if Bitcoin was less than $40,000.

• 4:20David Hoffman?

  Right, right.

• 4:20Ryan Sean Adams?

  That's how

• 4:21David Hoffman?

  That's how we feel.

• 4:24Ryan Sean Adams?

  Okay? It's real bad. And imagine if, you know, Ethereum was like 10K while Bitcoin was lingering, you know, around in the 40K mark.

• 4:32David Hoffman?

  $40,000, yeah.

• 4:33Ryan Sean Adams?

  That's how we feel. So David, tell me about your feelings. This is the ETH Bitcoin ratio. It's low, lower than it's been in three years.

• 4:42David Hoffman?

  In recent memory, yeah. I never thought that I'd ever see three again at the Bitcoin ratio, but we are at 0.0386. It was at 0.039 when I was looking at this earlier, but man, it hasn't been this low since like 2019? Is that right? Early 2020?

• 4:58Ryan Sean Adams?

  No, not 2019. All right, so here's where we can start scrolling back here. Okay, so we are below 0.04. And the last time we were here is where? Look at this.

• 5:08David Hoffman?

  May, right, May 2021. Where, yeah, man, that's where Ether rocketed from like high 1000s, low 2000s, up to like $41,000 in a very short amount of time.

• 5:18Ryan Sean Adams?

  May 2021.

• 5:19David Hoffman?

  I remember where I was in May of 2021.

• 5:21Ryan Sean Adams?

  Look at this chart, look at this chart, the difference between January 2021, where we also hit that on the ratio, and then May. So we dipped, we dipped below, we dipped below that in the ratio. But you're thinking of like, you know, how the sentiment we've claimed feels like 2019 in Ethereum land, and it really does.

• 5:37David Hoffman?

  Yeah, it really does, yeah.

• 5:38Ryan Sean Adams?

  Do you want to go look at 2019? Look at the ratio here.

• 5:40David Hoffman?

  2019, we got like down to 0.023, I think. Oh, what, 0.016? Jesus Christ, we were dead and dead.

• 5:48Ryan Sean Adams?

  It's been a lot worse.

• 5:49David Hoffman?

  It was so low back then, oh my God. I mean, to actually kind of think we're only like double that.

• 5:56Ryan Sean Adams?

  This is, this is about the time we started, we decided to start, you know, like an Ethereum D5 podcast, you know?

• 6:02David Hoffman?

  Yeah, that's where we started.

• 6:03Ryan Sean Adams?

  We thought that'd be a good time to do it.

• 6:05David Hoffman?

  Yeah, it was a good time.

• 6:06Ryan Sean Adams?

  Yeah, so I guess feels bad, man. And for me, I kind of like, I had like a crack this morning. Like, I just like, so I saw this tweet. This was from Chow, whom we've had on the podcast, at Token 2049. I don't know if you have FOMO for missing that event.

• 6:23David Hoffman?

  Not at all, but that's a separate story.

• 6:26Ryan Sean Adams?

  All right, all right. But this is Chow saying, literally every person I talk to at 2049 is bearish ETH. It's so consensus, it makes me uncomfortable. And I saw that in my timeline, followed up by this. Laura Shin, reporting that Kyle Samani was giving a talk at Token 2049. Soul on course to flip Ether.

• 6:46David Hoffman?

  Yeah, I'm sure Kyle believes that.

• 6:48Ryan Sean Adams?

  I saw this back to back in my timeline and I was like, okay, this is it. It's ridiculous. Enough is enough. I am feeling like going full bull mode again on Ether the asset. And I don't understand how we're back in like 2019 with respect to sentiment, where the entire industry, as Chow says, it's consensus. Fading ETH is now consensus. Because my perspective, the bankless perspective, has been ETH is the most important asset in crypto. Without Ether the asset, there is no DeFi, okay? I know other platforms are like, working on this, trying to get to decentralization, but nothing else is close. Bitcoin is a store of value, but if you want to lend, if you want to borrow,

• 7:32Ryan Sean Adams?

  if you want to trade, you have to move off of the Bitcoin blockchain. You gotta go use a Coinbase or Celsius or some sort of banked platform. So, I don't know, I'm drawing the line here, man. We can't go any lower, okay?

• 7:46David Hoffman?

  I mean, we could definitely go lower, but like, we're approaching some sort of just like, it can't...

• 7:50Ryan Sean Adams?

  It's getting silly.

• 7:51David Hoffman?

  It's getting silly. We're approaching clown world territory. I mean, we've been in clown world in the crypto space for the last like, I would call it 18 months. Clown world and meme coin mania, I would kind of call synonymous. And like, trading meme coins and appreciating the rollup centric roadmap are on like, direct opposite ends of the spectrum. Like, these have been diagrams that do not overlap.

• 8:15Ryan Sean Adams?

  Well, remember how last week you were like, "Oh, just dump harder on me." Like, "I want to see that ratio, like, more pain."

• 8:20David Hoffman?

  More, more pain.

• 8:22Ryan Sean Adams?

  I'm fine with the pain, and now I'm just like, "Come at me, like, come on."

• 8:25David Hoffman?

  Yeah, point 03. Point 03000.

• 8:28Ryan Sean Adams?

  I don't care. I don't care. Don't at me, bro.

• 8:30David Hoffman?

  Bring it on.

• 8:31Ryan Sean Adams?

  See the replies, see the comments.

• 8:32David Hoffman?

  I've got cash. I'm bidding.

• 8:36Ryan Sean Adams?

  Find some cash?

• 8:37David Hoffman?

  I can find more cash.

• 8:38Ryan Sean Adams?

  Mortgage my house? Do some Michael Saylor here? I mean, this is kind of like, it's conviction territory for Ether right now.

• 8:44David Hoffman?

  So, now that you've cracked, Ryan, I think there's a product for you from our friends and sponsors over at Index Co-op.

• 8:50Ryan Sean Adams?

  Oh, nice, nice.

• 8:51David Hoffman?

  Yeah, so, this is right, yeah. So, the products that I would use, I've bought. tokens like this before. So they're making 2X and 3X long Ether tokens by simply just using Ave and Uniswap in the background. And you know, taking these two money Legos, smashing them together into a unified product that is a single token. So you can just buy a 2X or a 3X leveraged token. So if Ether goes up $20,

• 9:14Ryan Sean Adams?

  Yeah.

• 9:15David Hoffman?

  your token will go up $40. And the idea here is actually you pay less in fees by using Ave than you would some perps platform. Because the perps platform, like you pay like a pretty high carry. But since Ave has lower fees, you can create a leveraged position with lower fees than a perp. And you can hold leverage. The idea is like, this is a little bit better to hold for a long-term leverage than some sort of like short-term perps, right? So 2X or 3X long Ether with a simple ERC 20 token. In theory, these like 20 ERC 20 tokens could then go like be integrated into the rest of DeFi, but that's that's up to the rest of DeFi. But you could just, you know, buy a leveraged token.

• 9:54Ryan Sean Adams?

  That's cool.

• 9:54David Hoffman?

  Since we're since we're so close to the bottom somewhere.

• 9:56Ryan Sean Adams?

  Huh?

• 9:56David Hoffman?

  Yeah.

• 9:57Ryan Sean Adams?

  Yeah, you want me to back up my beliefs? The only thing that's unfortunate, David, is as a US citizen, I of course, live in a financial prison.

• 10:04David Hoffman?

  Oh, yeah.

• 10:05Ryan Sean Adams?

  This is not available if you are a US citizen. So if you do not live in the US, I'm sure you can partake in this index co-op goodness. But not if you live in the US.

• 10:15David Hoffman?

  Okay, well, some version of you that's outside of the US. You're the Ryan instance, Ryan TMT instance that's outside of the United States.

• 10:22Ryan Sean Adams?

  The forked option, the forked European option.

• 10:25David Hoffman?

  Gary Gensler for that for this one, but this is actually the CFCC's fault.

• 10:27Ryan Sean Adams?

  Let's just blame them. We could still blame Gary. The rest of the episode will shed some like shed some more blame on Gary. There's a link in the show notes to that, right? Bankless.

• 10:35David Hoffman?

  Yes, there is. Bankless.cc/indexco-op. That's C-O-O-P.

• 10:40Ryan Sean Adams?

  I should also say, of course, if you're using leverage, be responsible, kids. Be responsible with that leverage.

• 10:46David Hoffman?

  Leverage is a bitch. And if you haven't learned that lesson yet, and you are learning and you're using leverage, then you will eventually learn that lesson.

• 10:53Ryan Sean Adams?

  You definitely will. I've learned that lesson. All right. So we talked about prices. Give me the crypto market cap. What are we on the week?

• 11:00David Hoffman?

  You're up really healthily. 2.29 trillion, almost at 2.3 trillion. So staying away from that $1 trillion handle. 2.3, 2.3 T.

• 11:09Ryan Sean Adams?

  All right, I got another chart for you that's moving up. This is a Layer 2 update brought to you by Mantle. That is this blue line here. You know what that is?

• 11:16David Hoffman?

  Wow, that's nuts.

• 11:18Ryan Sean Adams?

  This is a base transaction. So what we're looking at is a chart of the transaction count for all Layer 2s. So we've got all our faves over here. Arbitrum, OP, Linnea, we've got Blas.

• 11:30David Hoffman?

  There's just no limit on the base transactions.

• 11:32Ryan Sean Adams?

  Yeah, we've got Mantle here. And the outlier line is base. So it is a straight line up.

• 11:37David Hoffman?

  4.6 million transactions a day? What the hell?

• 11:42Ryan Sean Adams?

  It's shattering, it's shattering all previous records on transaction count.

• 11:45David Hoffman?

  Every single day it's written new records.

• 11:46Ryan Sean Adams?

  Do you know what's going on over there? What's going on over there? They have a meme mania? Okay, well, we're back to school.

• 11:54David Hoffman?

  This is what happens when we have DA that we have so much more DA than we know what to do with. And so base is like, well, I'll just consume that for free. Thanks.

• 12:03Ryan Sean Adams?

  Yummy.

• 12:04David Hoffman?

  Yummy DA, yeah.

• 12:05Ryan Sean Adams?

  This is active addresses too. It's holding up, the blue line's holding up. So active addresses and tons of transactions.

• 12:11David Hoffman?

  People going on-chain, look at that.

• 12:13Ryan Sean Adams?

  This is a good sign. When people have cheap transactions, they use it.

• 12:16David Hoffman?

  They use it.

• 12:17Ryan Sean Adams?

  Do you think this is like a lot of bot, some bot activity too?

• 12:20David Hoffman?

  Oh, I think so. Well, yeah, because I think if you are using DeFi on a Layer 2, like one DeFi user will bring in like three bot transactions for every transaction just to kind of like snibble up that, the MEV that they create. Snibble is a technical term. Snibble, yeah. But like, yeah, so like, there's kind of like a leverage effect here. So like one, one human transaction creates three bot transactions. I just made that number up, but that's like structurally correct. Because that's just how DeFi and MEV works.

• 12:49Ryan Sean Adams?

  Three bots for every human according to David?

• 12:51David Hoffman?

  Yeah, and DeFi on Layer 2s are fundamentally better than a DeFi on Layer 1 because of low transaction fees.

• 12:56Ryan Sean Adams?

  Yeah.

• 12:57David Hoffman?

  It's more efficient, it's faster, it's cheaper. And it's sort of like it's a sign of fitness, I would say.

• 13:03Ryan Sean Adams?

  So you don't think there's a need to build a snibble resistant protocol here?

• 13:08David Hoffman?

  Well, I mean, I think that gets into the conversation on base rollups, which are snibble resistance.

• 13:16Ryan Sean Adams?

  I love that you're just going with that, dude.

• 13:18David Hoffman?

  App chains, base app chains, I think are the snibble resistant

• 13:24David Hoffman?

  mechanisms to prevent app MEV leakage. So you're Apple and that won't be snibbled at.

• 13:30Ryan Sean Adams?

  Well, let's talk about the rate, shall we? Let's move on.

• 13:34David Hoffman?

  Let's get out of there.

• 13:35Ryan Sean Adams?

  Let's get out of here. So let's talk about Jerome Powell. Did he bring us some gifts on the week? There was speculation earlier this week. This was the week, remember we said at last rollup, this was the week that Powell was going to deliver us some news. Was he going to decrease the Fed fund rate? And the question, everyone said yes. The question was, how much? And going into the week, earlier in the week, the speculation was 25 bips. You know, I said bips because I know you're a bip guy. Big, big.

• 14:00David Hoffman?

  I like bips.

• 14:01Ryan Sean Adams?

  Yep, big bip energy here. And then.

• 14:03David Hoffman?

  Snibble the bips.

• 14:04Ryan Sean Adams?

  Snibble the bips. We have 25 basis points. Or would he be more generous with his bip reduction? Would he give us 50 basis points?

• 14:14David Hoffman?

  Well, Elizabeth Warren put out this like fantastically cited, well-resourced, well-researched letter.

• 14:22Ryan Sean Adams?

  Economist Elizabeth Warren.

• 14:24David Hoffman?

  Economist Elizabeth Warren. Everyone knows her as the economist. With like citations on citations on citations, asking for 75 bips, a huge snibble out of the Fed funds rate. More snibbling. Honestly, it was actually a pretty impressive document. Like, I mean, I fundamentally disagree on Elizabeth Warren with most things, but when I was reading this, it was like, wow. This was like a pretty compelling case.

• 14:46Ryan Sean Adams?

  I don't know if it was impressive. She's like, look at these sources. She's citing her previous letters here. Look at those.

• 14:51David Hoffman?

  Some of these sources were pretty good. Some of these sources were pretty good. I enjoyed at least the attempt. She was asking for 75 bips.

• 15:01David Hoffman?

  75 stimples on the bits, bips.

• 15:05David Hoffman?

  I think that's not too much to ask. Is that too much to ask?

• 15:08Ryan Sean Adams?

  That's kind of a lot. That's kind of a lot.

• 15:10David Hoffman?

  But to me, like, when, I don't know what the hell Jerome Powell was thinking, but if he was deciding between 25 and 50 bips, like, I don't know, which one am I gonna do? I'm undecided. And then he gets this letter from Liz Warren, who's asking for 75. He's like, oh, I just have the freedom to do 50 now. I have the, she just gave me permission to do 50.

• 15:28Ryan Sean Adams?

  She was doing the classic bargaining thing where you like, you overask.

• 15:30David Hoffman?

  Maybe she actually wanted 75, but like, yeah.

• 15:34Ryan Sean Adams?

  She wanted it.

• 15:35David Hoffman?

  So anyways, the day came, that was, what, two days ago? Yeah, two days ago. The Fed lowered the funds rate by 50 bips to now it's in a range of 0.475 to 5%. Powell commented, "We're trying to achieve a situation where we restore price stability without the kind of painful increase in unemployment that has come sometimes with this inflation. I think you can take today's action as a sign of our strong commitment to achieve that goal." So, how did markets react? Right when, like, everyone wanted 50 bips. Like, people with assets want 50 bips. We got 50 bips.

• 16:06Ryan Sean Adams?

  We would have been disappointed with 25 bips.

• 16:08David Hoffman?

  We would have been disappointed.

• 16:09Ryan Sean Adams?

  If you only snibbled 25, that would not have been enough.

• 16:12David Hoffman?

  Yeah, we wanted a larger snibble. We got 50. Then markets just like, were totally whelmed.

• 16:19Ryan Sean Adams?

  Totally whelmed.

• 16:20David Hoffman?

  They didn't, didn't go up, didn't go down, like, nothing really happened.

• 16:23Ryan Sean Adams?

  I felt nothing. Did you feel anything?

• 16:26David Hoffman?

  Well, I mean, like, I got a sense of relief that it wasn't 25 snibbles. But it was the first rate cut since the pandemic. So outside of the emergency rate reductions during COVID, the last time that the FOMC cut by half a point was 2008 during the global financial crisis.

• 16:43Ryan Sean Adams?

  Yeah, yeah, that was the last time. Okay. And let me give you a mirror image. Okay. So, so the question, of course, is, what does this mean for markets? What does this mean for our crypto assets, right? So shortly after, Coinbase tweeted this.

• 16:58Ryan Sean Adams?

  They say history doesn't repeat. It's time to break the cycle. It's time to update the system. I'm glad they said those two lines, but they say history doesn't repeat. And they were referring to a CNN headline from exactly 17 years ago. This is the headline from September 18th.

• 17:11David Hoffman?

  To the day.

• 17:12Ryan Sean Adams?

  To the day. September 18th, 2007. Remember 2007? The Federal Reserve cut the target rate on short-term interest rates by half of a percentage point Tuesday to 4.75. Did the same thing 17 years ago, David. And they're saying that they say history doesn't repeat. The reason is because this was pre-crash. This was pre-2008.

• 17:36David Hoffman?

  This was on the precipice of being on the precipice.

• 17:39Ryan Sean Adams?

  Of great recession, right? So this is kind of a question, right? You could interpret the Fed move as bullish, if you want.

• 17:46David Hoffman?

  Right.

• 17:47Ryan Sean Adams?

  Okay, okay. Now, we have slain the inflation dragon. This is Powell's soft landing. Now, unemployment numbers are starting to creep up a little bit, but he's getting ahead of this with a 50-basis-point cut right now. It's like, perfect. This is the soft landing asset. The cycle is resumed. It should be all good news. Or, you can interpret this and say, uh-oh, what does he know that we don't? 50 basis points? That's not your average... That's not a small-time move. That's like, pretty large. And maybe there's something rotten in the underlying economy that he sees that we don't? It's like a choose-your-own-adventure with this type of macro data. And I've seen smart people, who I consider good analysts, on either side of this.

• 18:30David Hoffman?

  I think the Fed has been outplaying most people, I would say. And so far, if you are believing in the soft-landing scenario, the soft-landing scenario is what the scenario is that we're getting. And this has all been happening in slow motion for like, the last two years. Slowly, the soft-landing has been coming, while some people are always saying, like, well, there's a recession looming.

• 18:52Ryan Sean Adams?

  Yeah.

• 18:52David Hoffman?

  And sure, maybe there is a recession looming, but it's still looming, still out over there somewhere. Not here.

• 18:58Ryan Sean Adams?

  You want the ultra-bearish scenario? You can get it from Arthur Hayes. So he was actually interviewed that morning, like, just prior to the Fed rate cuts. And they asked him... The difference between 25 bips and like 50 bips. He goes, he says this, if they cut by 25, not much is going to happen with with prices. But I think if they go 50, that will be a nuclear catastrophe for financial markets. This is what he predicted pre this.

• 19:22David Hoffman?

  What?

• 19:23Ryan Sean Adams?

  And his reason for this.

• 19:23David Hoffman?

  That's two very different outcomes from a very small change in interest rates.

• 19:28Ryan Sean Adams?

  Yeah, his reason for this, though, is he says it's a signal. I actually think it points to a deeper rot in the global financial system. And that will come through in much more depressed prices after the fact. So that's his take. It's the deep rot. Who knows what trades Arthur Hayes has on? Of course, you know, it's just one person's opinion, but that is the bear scenario.

• 19:48David Hoffman?

  Okay, but there's only going to be a nuclear catastrophe for financial markets if there is some sort of like hidden leverage like in 2008, like just because they're cutting 50. He, I guess Arthur is saying that like, oh, Powell does see something that we don't see.

• 20:03Ryan Sean Adams?

  Yeah, as evidenced by him cutting so much. I don't know.

• 20:09David Hoffman?

  I'm not on board on that one.

• 20:10Ryan Sean Adams?

  Not on board with Arthur Hayes there, but I guess we'll see and time will tell. I think one thing that we know is going to happen eventually is the money printer will resume printing. Now, this was something else that's significant that we should be tracking. It's not just rates that we need to take a look at. We also need to look at quantitative easing versus quantitative tightening. So we got some indication that quantitative tightening, which is what the Fed has been doing the last 18 months or so, is going to continue. So this is a quote, "The committee will continue reducing its holdings of treasury securities and agency debt and agency mortgage backed securities." So they're going to continue to constrict the Fed balance sheet while at the same time lowering rates. Now, we will really know.

• 20:52David Hoffman?

  So those are, those are in opposition to each other, right? Like lowering rates is easier money and then restricting the balance sheet is harder money?

• 20:58Ryan Sean Adams?

  Ish, yeah, that, that, that's kind of it. I think the big question is, when is this going to like, this is M2 money supply. We could also look at like, you know, the Fed balance sheet. And it kind of has this shape, look at this, all the way from the 1980s. It's been basically like hockey stick upwards until about.

• 21:17Ryan Sean Adams?

  Year 2022, we got into

• 21:19David Hoffman?

  When we started cutting, yeah.

• 21:20Ryan Sean Adams?

  Yep, yep, Do Kwon, you know, lunatics.

• 21:23David Hoffman?

  It's so funny that like the Fed pivots interest rates and three seconds later, Do Kwon blows up. Like, he did not last one second of high interest rates.

• 21:33Ryan Sean Adams?

  But tell me, look at this chart and tell me, what do you think is happening? We got a little bit of a bending of the curve here on M2 money supply. I mean, Fed Treasury looks similar.

• 21:41David Hoffman?

  Returning back to the trend.

• 21:42Ryan Sean Adams?

  Looks like it.

• 21:44David Hoffman?

  We escaped from the trend in COVID and now like since we started cutting interest rates, we've been going back to the trend, but the trend is nonetheless accelerating upwards on a parabola.

• 21:54Ryan Sean Adams?

  Exactly. Not TA, full disclaimer. This is another

• 21:57David Hoffman?

  That was TA.

• 21:58Ryan Sean Adams?

  That was TA? Alright, this is a golden cross.

• 22:00David Hoffman?

  God damn it.

• 22:02Ryan Sean Adams?

  Jamie Kootz says this, ultimately liquidity is what drives everything. And this has now turned decisively bullish. So this is a liquidity indicator here of global money supply. It's got Bitcoin price charted and kind of this blue line is liquidity. Liquidity, global liquidity is going up.

• 22:19David Hoffman?

  Going up, going up.

• 22:20Ryan Sean Adams?

  So that's gonna be, that's gonna be good. The other thing though, we gotta look at is jobs.

• 22:25David Hoffman?

  Okay, this is the thing that actually moved the markets. So when we got 50 bips, like I said, didn't move the markets, but you would all go and look at your prices. Bitcoin's up 9% on the week, Ether's up 5.5% on the week, like prices are green. So how do these things square? As soon as we got in this jobs report in yesterday, or maybe even this morning, yeah, this morning. US jobless claims came in at 219,000 in this week of September, when it was estimated to be 230,000. So we had, what is that, 11,000 less jobless claims than expectations? And this is the recession indicator. If there are less jobless claims than expectations, we are less likely to be in a recession. So what did we get?

• 23:06David Hoffman?

  We got 50 bips, snibbled, and then we got 11,000 jobless claims also snibbled. So we got more jobs and 50 bips of easier free money. And so that's what caused the markets to go up. The combination, that one-two punch of bullishness is why the markets are up, which is pretty cool.

• 23:25Ryan Sean Adams?

  Yeah, so be gone with that 2,000 7 talk, okay? Don't want to hear it. Not on bankless, not this week. We're just enjoying our, our, our BIPs reduction and good unemployment numbers.

• 23:36David Hoffman?

  Enjoying my, our BIPs reduction, our unemployment numbers and .038 on the ETH ratio. God, you, you gotta accept the buying opportunity, my man.

• 23:44Ryan Sean Adams?

  Well, no, no matter what happens, this is, you remember we did that, uh, episode with Robbie from BlackRock? Who was like, hey, you guys are pitching Bitcoin all wrong. It's actually not a risk on asset. It's not even a risk off asset. It's a little bit of both. And what it is, is a money printing resistance asset. Uh, he promised that BlackRock would put a report out that covers this topic and they did. There's a link in the show notes. It's worth a read from my perspective, but basically their take is Bitcoin is an uncorrelated asset that does well when there's money printing. So it's, it may be affected by the recession in the short term. If a recession comes, but in the long run, it's correlated to, you know, uh, as a non-sovereign story of value

• 24:28Ryan Sean Adams?

  and to kind of the money printing story, which regardless, I mean, let's go back to that chart. What do you think's gonna happen here? Empty money stock.

• 24:35David Hoffman?

  I think it goes up.

• 24:36Ryan Sean Adams?

  There we go.

• 24:37David Hoffman?

  Uh, yeah, a pretty nuanced take actually on what Bitcoin is. Uh, and BlackRock would know a thing or two about how to actually both position and understand Bitcoin. Uh, definitely worth reading. Coming up next, one day after his second assassination attempt, Trump did an interview about his brand new sparkly DeFi protocol.

• 24:53Ryan Sean Adams?

  That's crazy.

• 24:53David Hoffman?

  And then also went to a Bitcoin bar in New York City called Pubkey. I've been there a couple of times. It's pretty fun. Uh, and then also, why were a bunch of Ethereum's gathered just a few blocks away? Uh, what were they doing there? And why were, uh, hundreds of Ethereum's gathered a few blocks away, including myself? Uh, completely ignoring the whole Trump thing at the Bitcoin bar. Uh, what were we doing over there? So we're going to get to all of that and more. But first, I'm interested to talk about some of these fantastic sponsors that made this show possible. Especially Kraken, our preferred place for longing the ratio. If you do not have an account with Kraken, consider clicking the link in the show notes, getting started with Kraken today.

• 25:27Ryan Sean Adams?

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• 27:03Speaker 02

  We're embracing the future with crypto and leaving the slow and outdated big banks behind.

• 27:09David Hoffman?

  Wow, okay, so that was Donald Trump on a Twitter video promoting his Twitter space that was incoming with Rug Radio, one of the bigger Twitter spaces in the crypto world. And that's where he talked about, actually not World Liberty Financial, he didn't really actually talk about World Liberty Financial. He mostly just talked about the crypto industry. He said crypto is one of those things that we have to do. Whether we like it or not, Donald Trump said.

• 27:33Ryan Sean Adams?

  Whether we like it or not.

• 27:34David Hoffman?

  Yeah. He shared that his NFT projects have opened his eyes to the crypto world. Quote, because so many people paid with crypto, I was blown away. I wasn't overly interested at first, to be honest, but I was surprised by the massive amount. And so over 100,000 live listeners were listening live. 2.5 million people have listened in total to this two hour long Twitter space with Donald Trump, Farokh, who hosted Rug Radio, and then a bunch of stuff, a bunch of people were there.

• 28:04Ryan Sean Adams?

  What's crazy about this, David, is this is the day after a second assassination attempt. All right.

• 28:09David Hoffman?

  So I guess it's pretty safe to be inside your own home on a Twitter space, though.

• 28:13Ryan Sean Adams?

  Right. But like, this was, I think, the first interview that he did, really? And it was about Donald Trump's DeFi project?

• 28:21David Hoffman?

  Yeah, crypto thing, yeah.

• 28:22Ryan Sean Adams?

  What world are we living in?

• 28:23David Hoffman?

  Dude, it's kind of nuts.

• 28:24Ryan Sean Adams?

  It's absolutely crazy. Should we play this? This is some of the founders, Zachary Fulkman and Chase Hero, actually talking about World Liberty Financial and what it's here to do.

• 28:35Speaker 03

  So what's the main goals of World Liberty Financial? It's a good question to the both of you, right? Zach and Chase? I'll go to you first, Zach. But like, what's the goal, but most important, like, how do you plan on, like, actually, like, accomplishing those goals?

• 28:46Speaker 04

  Yeah, so I think rather than trying to, you know, rebuild the wheel, it's to take what's the best of DeFi and basically bring it to the everyday person who isn't already interacting with DeFi platforms. Build products that are really simple and intuitive and easy to use, where you don't feel like you need to phone a friend to get a walkthrough, you know? And to just onboard as many people through, you know, simple products where they can actually start to earn yield on their assets, not take a ton of risk by speculating on, you know, the next meme coin, but instead being able to use stables that are pegged to the US dollar to be able to generate yield or unlock liquidity in assets that they're already holding, such as Ethereum or whatever other tokens they might have.

• 29:31Speaker 03

  And for you, Chase?

• 29:32Ryan Sean Adams?

  I mean, it sounds like a pretty typical collateralized lending and borrowing DeFi protocol.

• 29:39David Hoffman?

  Okay, so last week when we were talking about this, I said, "This is kind of sounding like Kane Warwick's Infiniti." And I think that's what this is. I think this is an easy-to-use front-end that uses DeFi in the background, and they just make it like, super sexy-smooth for people who are neutral about crypto, but love Donald Trump, and who want some access to financial services.

• 30:04Ryan Sean Adams?

  Yeah, what users are inside of that Venn diagram, that they're crypto users and just like, super passionate about Donald Trump enough to use this platform, I don't know. I think if they are competing against some sort of a DeFi front-end, then they really got to bring it in terms of like, feature set, and user experience, and all of these things. And another question coming out of this is, is the thing going to have a token? What do we know so far?

• 30:28David Hoffman?

  Yeah, the thing is totally going to have a token. Even that fact was broadcasted by CNBC. So on the CNBC team, World Liberty Financial's WLFI tokens, equity structure 20% to the founding team, 63% for public purchase. Doing an ICO. Donald Trump is doing an ICO, which is absolutely nuts.

• 30:50Ryan Sean Adams?

  So there's a few things about this. So one is, it's tokens-making CNN, right? And they call it equity structure. These are actually tokens, so it's not actually equity. That said, I believe this is limited to accredited investors only. So the token is basically frozen, and only accredited investors can actually purchase it. So 63% are going to be sold to accredited investors in this public sale, ICO-like, but not ICO in that it's accessible to everyone. It's basically an accredited investor vehicle. And they're using, you know, these regulations. One of that, Reg D or something like this. They're using one of those regulations.

• 31:29David Hoffman?

  And also, the CNBC broadcasted, "Doesn't provide any dividends or distributions." Also, no official date set for the sale. I think demand for this token, it's gonna be pretty interesting. Like, do people want to own like the quote unquote equity of World Liberty Financial? Or is this gonna turn into a Donald Trump meme coin?

• 31:49Ryan Sean Adams?

  Yeah, so I mean, it very much trades like, you know, kind of like a Trump affiliated brand might trade based on memetics, let's say. And yeah, Trump fandom, I think largely, rather than like discounted cash flow, what is this company actually worth, you know, how's it performing, all of these types of things. So I think this could be similar.

• 32:06David Hoffman?

  Some takes from around the community, DC Investor says, "Love it or hate it, CNBC is talking about DeFi right now, thanks to the Trump Crypto Project. Could this be a moment which rekindles Ethereum DeFi and renews interest in its value proposition for Wall Street types and normies?" God, I wish, I wish we did it under our own steam, personally. I hope, I hope we can do it for, you know, reasons that we deserved and have earned rather than.

• 32:29Ryan Sean Adams?

  Glass half full, though, glass half full. I mean, so on the, on the Twitter Spaces, David, I mean, Eric Trump, like the Trump, the sons of Trump are using AVE. And they were just talking about how, you know, various aspects of it are difficult, other aspects are sort of easy, but they're like using DeFi. On the main stage, and like every news agency is like reporting this. So glass half full is kind of DC Investors' take, right?

• 32:53David Hoffman?

  Yeah, I'm just worried about it becoming just such a partisan thing. Like Ethereum is credibly neutral, and I hope that it is perceived to be a neutral technology platform and not like Donald Trump's like technology interest.

• 33:06Ryan Sean Adams?

  Well, but that's just like this one particular, you know, DeFi application could be, again, just like, you know, the Trump fans. My, my big hope is that it's not a scam and, you know, good, good that it's locked, good that the tokens are locked from that perspective.

• 33:20David Hoffman?

  Right. Sandy Peng from Scroll has joined as an advisor to World Liberty Financial, which is pretty interesting. And then some other advisors as well, Luke Pearson from Polychain, Raphael Yakobi from a crypto law firm, and Ogil, a crypto security expert and co-founder of Glu. Ogil is an interesting name.

• 33:41David Hoffman?

  Turns out that's a pseudonym. He went on Laura Shin's podcast, masked behind a hat, sunglasses, and a handkerchief. So this person is an anon. And I find it weird that an anon who's representing Donald Trump's World Liberty Financial DeFi project is cannot just like disclose who he is. I find that odd.

• 34:03Ryan Sean Adams?

  Yeah, I mean, I guess that's odd, or maybe that's just the way crypto is. These advisors are pretty interesting. Like Sandy, like really surprised me that-

• 34:10David Hoffman?

  Motley Crue of people, dude.

• 34:12Ryan Sean Adams?

  But they are like, many of them are DeFi natives. Like, okay, so if it's not a scam, the other thing that bad thing that could happen is it could be hacked, which is a worry. Because the previous manifestation of this dough finance was actually hacked. And Laura Shin actually asked this anonymous developer and advisor to the World Liberty Finance Project, whether he had reviewed the code. He said he had not. It's a little bit concerning on the security side of things.

• 34:35David Hoffman?

  The security advisor has not reviewed the code.

• 34:37Ryan Sean Adams?

  Ah, this could go either way. This could go either way, David. We'll have to see.

• 34:42David Hoffman?

  All right. Meanwhile, in a different corner of crypto and Trump, Trump went to this Bitcoin bar in New York City called Pubkey. I think, great name for Bitcoin bar, Pubkey. Like, get it? Public key, Pubkey. And bought burgers with Bitcoin. And so this is, he's, this is the owner of the Pubkey on the right, Thomas, helping Donald Trump out, scanning a QR code. I think he's paying with Lightning Network, because it's like probably the one place in New York that you can use Lightning Network. And Bitcoin, yeah, so Donald Trump used Lightning to buy a burger at a Bitcoin bar.

• 35:16Ryan Sean Adams?

  That's very cool. Other Bitcoiners are very excited about this. It's the first former president transacting and purchasing something with Bitcoin. So, history in the making here.

• 35:27David Hoffman?

  Which is funny, because he's also building a DeFi app on Ethereum.

• 35:31Ryan Sean Adams?

  You would think that like, the Ethereum community would be a bit more excited about the traction. Some of them are.

• 35:38David Hoffman?

  Dude, huge tale of two communities right now. Like, most of the Ethereum community is completely indifferent to Donald Trump's World Liberty Financial thing. And then Bitcoiners are just so effing stoked that he's at Pubkey, like, using Lightning Network to buy a burger.

• 35:53Ryan Sean Adams?

  Well, it's because it's, Bitcoin is a simpler story. All you have to do is be bullish on it and buy it, right? I mean, even, even sort of- Paying for something in Bitcoin is mostly ceremonial. I mean, like, true Bitcoiners do not want to use a Bitcoin as a means of payment. They just want to stack their Bitcoin as a store of value. But this is the high level from CryptoCondom, our friend here. A former US president is-

• 36:14David Hoffman?

  We've actually used CryptoCondom's tweets on the weekly-

• 36:16Ryan Sean Adams?

  Fantastic content.

• 36:17David Hoffman?

  A good handful of times, like, actually a really good account.

• 36:20Ryan Sean Adams?

  So, the condom says, "A former US president is buying a burger with Bitcoin, launching a lending app on ETH, and promoting tokenization, and you're bearish on it?" Maybe don't nitpick a bit-

• 36:30David Hoffman?

  It's a good point.

• 36:31Ryan Sean Adams?

  As long as it's not a scam. I mean, this is good attention to the space, hopefully.

• 36:35David Hoffman?

  Yeah. It just has to not be a scam, and I think it's probably not a scam. I think it's probably not a scam.

• 36:39Ryan Sean Adams?

  Meanwhile, and David, you kept alluding to this, that some of the members of the Ethereum community were doing something completely different. So, you guys were gathered, what, like, coping over the ETH race show, David?

• 36:48David Hoffman?

  No, not at all. Like, three, like, while Donald Trump was buying his burger with Bitcoin at Pubkey, me and, like, a couple hundred other Ethereum community members were, like, four blocks away at a movie theater to watch the world premiere of Vitalik the Ethereum Story, which has been a movie that has been being in production for the last, like, three-plus years. First ran into the, uh, this crew, it was originally called Ethereum the Infinite Garden, Carrie and Zach. I ran into them in 2021 at ETHCC, and it had already begun filming throughout COVID. And then I ran into them at Zuzalu in Montenegro, again at Bogota. They even came to my apartment in San Diego.

• 37:31Ryan Sean Adams?

  Oh, I remember that.

• 37:32David Hoffman?

  They had been around, yeah. They have filmed so much, and so much of this has been just like this long story arc. This movie has been funded by the Ethereum community via NFTs. And so they sold NFTs from People Pleaser, who made the Uniswap X times Y equals K NFT way back when, when Uniswap V3 was announced. Mariano Conti is an executive producer because he, like, donated some crazy amount of ETH to the financing of this movie. And this movie is finally out. So, on Wednesday, the 18th, this last Wednesday, this film released in theaters across 23 countries.

• 38:09David Hoffman?

  And 30 cities all at once, all of these different cities were all watching the movie at the same exact time. New York, London, San Francisco, Toronto, Singapore, Lisbon, Istanbul, Kiev, Los Angeles. They called it a one of a kind decentralized theatrical release sponsored by Base Matcha Pleaser Dow. And the cool thing is because there's, there's like middlemen here, right? Like there could be Netflix, there could be Amazon, but they are distributing it directly to people who want to watch it at ethereumfilm.xyz. And you can buy an NFT that unlocks access to watch the movie on the website. So there is no middleman. You're going straight to consumer, which is pretty cool. And it was pretty cool to also just see the showing of the Ethereum

• 38:53David Hoffman?

  community there. Dema Beterin, Vitalik's dad tweeted about it. There's Victor Bunin, who was, he was at the New York showing. Jesse Pollak tweeted out, this is probably one of the most important movies in a decade. And Linda Z, the co-producer, I thought her take was pretty cool. She says, well, I didn't personally join crypto for any one person. And there are countless members of the Ethereum community that are what make it special. I've repeatedly heard tonight and in audience testing from non crypto people that seeing Vitalik was inspiring and helped them understand and navigate the crypto space further. Seeing a mission driven person who cares about what this technology can do for society makes the space so much more accessible to newcomers. This is something that I've learned about storytelling over the years as someone who is brand new to filmmaking, learning from my teammates.

• 39:37Ryan Sean Adams?

  I personally just want to know how it was because you saw it. So how was it? What's the Rotten Tomatoes review here?

• 39:42David Hoffman?

  I loved it. I thought it was great. The way that the movie opens up with Vitalik giving this like two minute long rant about the origins of the word tea in like China and Portugal of stuff while he's like drinking tea, kind of like sitting a little bit nervously because he's about to go all into, I think, DevCon Bogota to give his talk. There's just so.

• 40:03Ryan Sean Adams?

  Is it more about Vitalik or is it more about Ethereum? Or is it sort of like Ethereum through Vitalik's eyes? Or is it telling the Ethereum story via this character named Vitalik? Like.

• 40:14David Hoffman?

  Yeah, I would say that one, that last one is the most accurate. I would call it 50/50. So this movie started off as Ethereum, the infinite garden, focusing on Ethereum, and then it eventually pivoted to being Vitalik and Ethereum story. It's one half Vitalik, it's one half Ethereum. How can, I mean, how can you separate Ethereum from Vitalik? How can you separate Vitalik from Ethereum? But yeah, it walks us through, like, it does some very old archival footage from Vitalik when he was like six or seven with some commentary from his dad. Did you know Vitalik made an encyclopedia of bunnies? And he made this whole, like, world-building universe around, like, this bunny universe. When he was seven years old, he made, like, graphs and charts and stuff. It was crazy.

• 40:53David Hoffman?

  Then it also took us through the merge and the NFT mania was like a big role in this. It also, the Ukraine invasion by Russia and Ukraine Dow was a big role in this. A lot of characters were there. Danny Ryan had a very strong role. Justin Drake. You, Ryan, you gave the intro to the Bankless. Welcome to Bankless, where you explore the frontier of internet money and internet finance. That was part of it. Yeah, it was pretty cool.

• 41:17Ryan Sean Adams?

  All right, well, I'm gonna go watch this. So I think it's live as of today, at the time you're reading it. And it's like $20 to mint this. I'm gonna go watch this tomorrow afternoon, I guess, like, on my own, because I don't have anyone look like it.

• 41:27David Hoffman?

  Highly recommend. It was, it was an absolute treat. So thank you for the, the movie Ethereum film team for producing this and getting us out here.

• 41:35Ryan Sean Adams?

  Let's talk about Gary. He's being Gary again this week. So we'll burn through this, because, you know, Gary's been dropping enforcement.

• 41:42David Hoffman?

  Same, same move, same movie over again. We know this movie.

• 41:45Ryan Sean Adams?

  Who did he, who did he try to prosecute this week? Well, the answer is Rari Capital. Remember Rari Finance? Basically, this is like, I mean, there were kids doing this. They were kids in college, basically.

• 41:56David Hoffman?

  College kids, college kids. Freshman dorm, college kids.

• 41:58Ryan Sean Adams?

  20, 21. They stopped the protocol in 2022. There was a hack. Anyway, they kind of also just stopped the protocol. So the SEC had, has settled with Rari Capital and the founders of Rari Capital. Basically, they claimed not only the Rari token as a security, big surprise coming from the SEC, but all of the, like, Rari was sort of a borrowing and lending protocol with, with different pools. So it was kind of like an Aave, It had isolated pools for all of its liquidity. SEC is actually claiming that all of those individual liquidity pools, like the LP positions, LP tokens, those are securities too. Okay? The good news is they-

• 42:36David Hoffman?

  That's a security and that's a security and that's a security.

• 42:40Ryan Sean Adams?

  Yeah, so the good news, I guess, for the founders of Rari is they basically settled with a kind of a slap on the wrist. There's not a fine associated with this because Rari, after the hack, restored funds to anyone who was affected. It was all good, but again, precedent. And I don't even know why they're wasting their time on this. I mean, the protocol's not even been active for a number of years. So that was the first enforcement case, Rari Capital. The second is this Flyfish case. Can you describe what the Flyfish case is, David?

• 43:08David Hoffman?

  Yeah, so this is something, there's actually this interesting intersection between NFTs and restaurants. There's a couple startups and companies and projects working on this. This is a members-only private dining club where membership is purchased as NFTs and owned by the token holder to gain access to restaurants and their associated experiences.

• 43:27Ryan Sean Adams?

  Utility token, utility NFT.

• 43:28David Hoffman?

  Utility token, yeah. This was a Gary Vee product. Yeah, startup product, based in Manhattan because the restaurant scene in Manhattan is super large. So the SEC accused Flyfish for conducting an unregistered offering of crypto asset securities by selling 1,600 NFTs to US investors. So Flyfish agreed to settle while it didn't admit or deny the accusations and also destroy all the remaining NFTs and pay a $750,000 fine and will also not accept any future royalties from the sales of the NFTs.

• 44:00Ryan Sean Adams?

  Of course, whenever there is inane enforcement filings, as there often is, Hester Purce writes a dissent. So this was Hester Purce's take on the Flyfish case. She said, "The commission, with the many demands on its time and resources, has inexplicably decided to focus on membership in an exclusive dining club." She says, "This is not a case where there's alleged fraud. It finds only that Flyfish Club should have registered its sales of membership NFTs as securities transactions." And she goes on, she says, "In our view, the NFTs here are utility tokens, not securities. And the statements by the founders and the NFT purchasers that a successful restaurant would cause the NFT price to rise do not change that." She goes on, she says, "The securities laws are not needed here

• 44:44Ryan Sean Adams?

  and their application is harmful, both in the present case and as future precedent." The Flyfish NFTs were simply a different way to sell memberships. Why shouldn't a chef be able to sell memberships to eat at her kitchen table and to collect royalties on resales of these memberships? NFTs are a promising way to allow creative people, such as chefs, musicians, or visual artists, to monetize their talent. And she says, "Experiments like Flyfish Club are not a threat to the American investor." So like, "Why are you doing this, Gary Gensler and the SEC?" That's good old Hester Peirce.

• 45:19David Hoffman?

  I love how the SEC is gatekeeping art and club memberships.

• 45:23Ryan Sean Adams?

  And utility. I mean, like, what? They just want useless JPEGs, I suppose. Once you associate any real-world utility, then it's suddenly illegal.

• 45:32David Hoffman?

  So, some good news pushing back against this. Chair Patrick McHenry and Whip Tom Emerson gave a letter in which they accused the SEC of putting a thumb on the scale and required clear answers on how the SEC views airdrops in the crypto industry. So, quote, "By prohibiting Americans from participating in airdrops, the SEC is preventing crypto users from fully realizing the benefits of blockchain technology." And so, really great letter, which was talking, basically saying, "Hey, airdrops are an important way for these protocols to decentralize themselves."

• 46:02Ryan Sean Adams?

  Stop making them illegal.

• 46:04David Hoffman?

  And the SEC is preventing these protocols from becoming decentralized in the first place by preventing airdrops from happening at all. And so, just really putting a lot of pressure. And they asked for responses from the SEC for three specific questions. "The SEC's posture is that certain transactions in which digital assets that are given away for free without payment satisfy the investment-of-money prong under the Howey test and therefore are securities transactions. In recent court filings, the SEC has taken the position that digital assets in and of themselves are not securities. Does the SEC believe that giving away non-security digital assets for free implicates the Howey test? If so, under what circumstances and arrangements?" There's actually five total questions.

• 46:49David Hoffman?

  I think that's a very good question.

• 46:50Ryan Sean Adams?

  Well, my favorite, can I read my favorite one?

• 46:52David Hoffman?

  Yeah, go for it.

• 46:53Ryan Sean Adams?

  My favorite one is, "Has the SEC ever considered the potential for loss of economic growth in tax revenue caused by its treatment of airdrop digital assets as securities?" You make airdrops illegal and Americans can't claim them.

• 47:05David Hoffman?

  And stop collecting taxes on them.

• 47:06Ryan Sean Adams?

  And so, you know, no tax event.

• 47:08David Hoffman?

  Attention IRS, I would love to pay you guys the taxes that I would have collected had I been able to receive all these airdrops, but I can't because I never collected them. So you don't get any money.

• 47:18Ryan Sean Adams?

  This is what's crazy and this is what's cool, the timing of all of this. The setup for next week, as we mentioned in the intro to this entire episode, is the entire, all of the commissioners of the SEC will be in front of Congress, including Gary Gensler, which he has visited Congress many times, but also people like Hester Purse, the dissenters at the SEC. And so they are going to be asked, I think, these same questions by members of the Congress who are very informed on this. And the hearings have already started, not with the commission, but with kind of like, I guess, some preamble type cases. So we've been seeing some glimpses of that this week, but next week will be the main event, and I for one, am looking very forward to the clips that come out of that.

• 47:57David Hoffman?

  Yeah, there's gonna be a lot of content to cover, hopefully some hot clips of Gary sweating next week, so we'll talk about that. But before that, coming up next, Vitalik delivered a keynote in song form at token 2049. The Zora app taking us mainstream. I know Ryan was playing around with Zora app, so I want to get his takes. And then also another SVM on Ethereum, another Layer 2. So we're gonna talk about all of that and more, but first a moment to talk about some of these fantastic sponsors that make the show possible. New projects are coming online to the Mantle Layer 2 every single week. Why is this happening? Maybe it's because Mantle has been on the frontier of Layer 2 design architecture since it first started building Mantle DA powered by technology from EigenDA. Maybe it's because users are coming on to the Mantle Layer 2 to capture some of the

• 48:40David Hoffman?

  highest yields available in DeFi and to automatically receive the points and tokens being accrued by the $3 billion Mantle Treasury in the Mantle Rewards Station. Maybe it's because the Mantle team is one of the most helpful teams to build with, giving you grants, liquidity support, and venture partners to help bootstrap your Mantle application. Maybe it's all of these reasons all put together. So if you're a dev and you want to build on one of the best foundations in crypto, or you're a user looking to claim some ownership on Mantle's DeFi apps, click the link in the show notes to getting started with Mantle. The Arbitrum Portal is your one-stop hub to entering the Ethereum ecosystem. With over 800 apps, Arbitrum offers something for everyone. Dive into the epicenter of DeFi, where advanced trading, lending, and staking platforms are redefining how we interact with money. Explore Arbitrum's rapidly growing gaming hub,

• 49:25David Hoffman?

  from immersed role-playing games, fast-paced fantasy MMOs, to casual luck-battle mobile games. Move assets effortlessly between chains and access the ecosystem with ease via Arbitrum's expansive network of bridges and on-ramps. Step into Arbitrum's flourishing NFT and creator space, where artists, collectors, and social converge and support your favorite streamers all on-chain. Find new and trending apps and learn how to earn rewards across the Arbitrum ecosystem with limited-time campaigns from your favorite projects. Empower your future with Arbitrum. Visit portal.arbitrum.io to find out what's next on your Web3 journey.

• 50:03David Hoffman?

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• 51:01Ryan Sean Adams?

  That's my favorite line. "A new form of wealth begins." Give some context for this. Ryan, have you seen the clips of how many people are at token 2049? No, it looks like an insane number, honestly.

• 51:15David Hoffman?

  There's some like Barachain side event at Token that had room for like, I don't know, like 200, 300 people and there was like a 1,000 person line out the door to go into the Barachain side event.

• 51:27Ryan Sean Adams?

  Yeah.

• 51:27David Hoffman?

  Like, I think because the United States, the SEC, our government, Choke Point 2.0, has just pushed so many users.

• 51:36Ryan Sean Adams?

  To Singapore.

• 51:37David Hoffman?

  To Singapore and also Dubai where Token is also held. So like, there's been this massive shelling point that the East has like all of the crypto users now because we're pushing them out of the United States. And so it's like, this is like, I've been, I've called this, I've heard this be called like the Super Bowl for BD and crypto. So, so many people are here. Ben Lakoff from Bankland Centres is there taking a bajillion meetings. Everyone's over here. And Vitalik goes up to deliver the keynote and starts singing in both Japanese and English.

• 52:04Ryan Sean Adams?

  Yeah, we just heard the English stuff, right? Like, he has a Japanese song.

• 52:08David Hoffman?

  He's also singing in Japanese and in front of thousands of people.

• 52:12Ryan Sean Adams?

  Thousands of people and then like hundreds of thousand, if not millions, who saw these clips like go viral online, right? I just saw this everywhere.

• 52:19David Hoffman?

  Uh huh.

• 52:20Ryan Sean Adams?

  Okay, so that was not, was that just the start of the keynote? It was the start of the keynote, but that's not the end.

• 52:25David Hoffman?

  It was either the start or the end, I don't know. He also gave a keynote.

• 52:28Ryan Sean Adams?

  Okay.

• 52:28David Hoffman?

  Which I think will be summarized as, "We are no longer early to crypto, but we are early to crypto being usable." That's a line from him. He said, "Hefty transaction fees have ended up killing at least the original wave of exploration by those seeking to use Bitcoin as currency. Ethereum has suffered the same problem with users in recent years, paying as much as $50 to transact using ETH. Fast forward to 2024, Ethereum transaction fees have dropped to almost nothing, thanks in part to several major upgrades such as EIP 4844."

• 52:55Ryan Sean Adams?

  You hear that? "We need to satisfy the needs of mainstream adoption. We need to hold on to open source and decentralization values at the same time." So, he's basically like, "We can have both. We can have mainstream and we can also have decentralization." His message was like, "There's, eat both pills, right? Blue pill, red pill, pill, eat them both, do the purple pill thing, we can have it all." That was one of his main messages. It's not a binary option.

• 53:19David Hoffman?

  Right. That's always been the Ethereum perspective. It's like, "We can do, we can have everything. We can do everything." Takes a little bit of engineering to get there.

• 53:26Ryan Sean Adams?

  Yeah, so it's great. I'm waiting for like the entire produced version of the keynote so I can like watch it all, but we're just clips are coming out so far.

• 53:33David Hoffman?

  Rather than people's like smartphones.

• 53:35Ryan Sean Adams?

  Yeah, that's right. Actually, you know, that brings up an app experience I had this week that I thought was absolutely fantastic. That was an example of everything that Vitalik was saying is like purple pill is maintaining decentralization and also being like as mainstream ready as I've seen, which is Zora. So you know, Zora is a layer two. They released an app. I'm not sure when they released it, maybe like a week ago. iOS only, so iPhone. And for me, the experience it uses Privy in the backend, the wallet experience felt very much like web two, right? I just sign up with with email. I didn't need seed phrase. It felt very like Venmo-esque. When you do transactions

• 54:15Ryan Sean Adams?

  on in the Zora app too, instant. So it was fast. There's no gas fee. And the main function of Zora, of course, is like buying, like minting things. And so it's like, think of an Instagram, except every post is something that you can mint. So Zora is hoping a creator economy like springs up out of this. And so the verb is ownership, the verb is minting, the verb is trading, and also the verb is if you're a creator, earning inside of this economy. And all of this, the great thing is because it's a layer two, it is secured, not, you know, once it gets to stage two, but is in the process of being fully secured and having the same property rights as ether, the asset. And the denominator for all of this value, all the money that's being created is actually ether.

• 55:00Ryan Sean Adams?

  They call it a subunit of ether. So one one millionth of an ether, a micro ether, if you will, in the Zora app, they're trying to meme sparks into existence, whereas they're like trying to, you know, dollars have cents. Well, one millionth of an ether in the Zora app is called a spark. And these are the atomic units you can you can kind of earn. Anyway, they put it all together in a way. I don't know if the creator economy, people will actually want to buy like JPGs and crypton, this sort of thing. But this is the first time we actually have a mainstream ready app where we can try these things. And that was exciting to me. And I think is an example of what Vitalik was saying is where you get the mainstream accessible capability where this just feels like a regular app, but it's all secured on top of Ethereum. There's not

• 55:45Ryan Sean Adams?

  decentralization trade offs.

• 55:48David Hoffman?

  I think also in the show, we were talking about if you want to go watch the Ethereum film, you go buy the NFT and then you can access it. Well, I mean, NFTs to watch a movie at JPEG, same, same, same format.

• 56:00Ryan Sean Adams?

  It's true.

• 56:01David Hoffman?

  And so we like ticketing has always been like this ancient use case of crypto that we've never really been able to unlock. And you can kind of see, put those two pieces together, like you get a ticketing experience.

• 56:11Ryan Sean Adams?

  We're here, we're ready. I do think we're not early to crypto, maybe in terms of price appreciation for everything, but we're definitely early to crypto being usable.

• 56:19David Hoffman?

  So second Solana virtual machine chain has arrived to Ethereum. It's a layer two. This is Atlas out of the Ellipsis team. Ellipsis has been building this in stealth for like a really long time now. And everyone's known about it. It's like the worst kept secret in crypto. Ellipsis Labs is a Solana DeFi team that has built a Phoenix, which is an order book deck on Solana. And now they're building Atlas, a Solana virtual machine layer two on Ethereum. So they call this a custom, hyper efficient implementation of the SVM, native bridging, data availability, and an enshrined oracle.

• 56:53Ryan Sean Adams?

  Yeah, that was cool. I was wondering if you were going to pick that out. So an enshrined price oracle, is that what we're talking about?

• 56:58David Hoffman?

  I mean, if you're going to have an on-chain DEX optimized platform, then enshrined oracle kind of makes sense. Coming in with block teams at 200 milliseconds, which is 50 milliseconds faster than Arbitrum 1. So Arbitrum is now not the fastest roll up on Ethereum. It is now this Solana virtual machine roll up.

• 57:16Ryan Sean Adams?

  Well, they're not, they're not mainnet yet, so we should say that.

• 57:19David Hoffman?

  Also not mainnet.

• 57:20Ryan Sean Adams?

  Mainnet in Q2 2025. So Arbitrum's still got that title for a while.

• 57:23David Hoffman?

  Yeah. The private testnet is live, public testnet available later this year. And of course, this is going head to head with Eclipse. So we have these two Solana virtual machine layer twos on Ethereum, both trying to grow adoption using the SVM. May the best SVM win.

• 57:38Ryan Sean Adams?

  Love it. So David, I hate to be the countdown guy, but now permissionless is just, it's less than three weeks away, which means your fight with Kane Warwick is less than three weeks away.

• 57:49David Hoffman?

  Three, three weeks and one day away.

• 57:50Ryan Sean Adams?

  Have you seen pictures of Kane lately? I mean. He's looking strong.

• 57:55David Hoffman?

  I mean, he's looking like Wolverine. Well, he's looking skinny because the guy's got to come down 15 pounds.

• 58:01Ryan Sean Adams?

  That's true.

• 58:02David Hoffman?

  Yeah, dude, my day lately, my days have been doing podcasts, going and doing as much sprints as I can, and then eating until the day's over.

• 58:13Ryan Sean Adams?

  That's right. That's what you should be doing.

• 58:14David Hoffman?

  Because I have to go gain.

• 58:15Ryan Sean Adams?

  Well, don't you have to spar too? Don't you have to fight?

• 58:17David Hoffman?

  Yeah, I got sparring practice tonight. Yeah, I gotta go. Not break a rib at.

• 58:21Ryan Sean Adams?

  Well, if you, Bankless listener, want to wish David good luck, not farewell, but good luck, then, and you're gonna be at Permissionless, you gotta come to the Permissionless party. This is on Wednesday, October 9th. So that'll be like, what, two days before your fight?

• 58:36David Hoffman?

  Uh, that's the two days before my fight, yeah.

• 58:38Ryan Sean Adams?

  Be buying David, you know, drinks, like whatever you want.

• 58:41David Hoffman?

  I will not be drinking. I will not be drinking.

• 58:42Ryan Sean Adams?

  Okay. He's gonna be healthy. But you can, if you're there, because it's gonna be held in a bar.

• 58:46David Hoffman?

  We will be paying for your drinks. There'll be free drinks at the Bankless party for Bankless citizens, only for Bankless citizens. So if you are listening to this on Bankless Premium RSS feed because you're a Bankless citizen, you get into the party, because the party's for you.

• 58:59Ryan Sean Adams?

  There you go.

• 59:00David Hoffman?

  And so come hang out with me, Ryan, the rest of the Bankless team, previous podcast guests that are gonna be at Permissionless. It's gonna be fun. It's gonna be great. There's a link in the show notes, so you can go and sign up for that party. Bankless goes to Permissionless.

• 59:11Ryan Sean Adams?

  Moment is done this week. We're gonna show you the trailer for the Ethereum film that we were talking about earlier in the episode, and gotta end with this. Of course, you know crypto's risky, 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.

• 59:29Speaker 05

  Our lives are increasingly on the internet. The way that these companies are abusing us is messed up. We have to change the trajectory.

• 59:43Speaker 06

  Okay, that's probably the bravest I've been around bugs in years.

• 59:45Speaker 07

  Metallic mutator. Is the engineer recognized as the inventor of Ethereum?

• 59:50Speaker 04

  The blockchain movement's biggest celebrity has become something like gloss.

• 59:56Speaker 06

  Oh, God, why are people listening to me? I'm just a guy.

• 1:00:03Speaker 08

  Vitalik has been on a global campaign. Ethereum has the potential to disrupt the giants of the tech world.

• 1:00:08Speaker 06

  It could be used to build this new internet.

• 1:00:12Speaker 06

  They're saying this is the way the internet was meant to be, because no one person can control it.

• 1:00:18Speaker 09

  We're building infrastructure that the whole world can enjoy. This internet garden.

• 1:00:28Speaker 10

  Technologies very rarely stay the same as they are envisioned by their creators.

• 1:00:34Ryan Sean Adams?

  It's just batshit crazy out here. They want the fucking janitor to be at the same level as the person at the top.

• 1:00:39Speaker 06

  Not everyone in the crypto space is in it for the ideals. A lot of people really just want to make lots of money.

• 1:00:46Speaker 05

  Currently Ethereum uses something like the energy consumption of Argentina.

• 1:00:50Speaker 06

  Financial incentive is like a fire. You can use it to keep yourself warm, or you can use it to burn your house down.

• 1:00:56Speaker 05

  Like anyone who thinks they understand exactly where it's all going, they're lying to you or lying to themselves.

• 1:01:09Speaker 06

  This is an important set of upgrades that fundamentally improves what Ethereum can do. People seeking a deeper kind of democracy in this digital space. We need to be involved. There are some things that are worth making a stand over.

• 1:01:25Speaker 08

  Food, medicine.

• 1:01:27Speaker 05

  Is this next evolution of coordination for humanity? There are hundreds of thousands of people across the world that are building things.

• 1:01:34Speaker 06

  We are seeing a resurgence of idealist dreams of the cyberpunk world in the 1990s.

• 1:01:43Speaker 06

  There is no off switch.

• 1:01:47Speaker 06

  You've created life.