ROLLUP: Operation Choke Point | SEC Crypto Staking Crackdown | Genesis Earn Repayment | a16z Uniswap

Bankless Weekly Rollup 2nd Week of February, 2023 ------ 📣 MetaMask Learn https://bankless.cc/metamaskshow ------ 🚀 JOIN BANKLESS PREMIUM: https://newsletter.banklesshq.com/subscribe ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://bankless.cc/kraken 🦄UNISWAP | ON-CHAIN MARKETPLACE https://bankless.cc/uniswap ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum 🚁 EARNIFI | CLAIM YOUR UNCLAIMED AIRDROPS https://bankless.cc/earnifi 👻 PHANTOM | CROSS-CHAIN WALLET https://bankless.cc/phantom ------ Topics Covered 0:00 Intro 9:00 Markets 10:20 TA https://twitter.com/CryptoHornHairs/status/1623068877264498688 12:55 Ultra Sound https://ultrasound.money/ 14:15 ETH Burn https://twitter.com/TrustlessState/status/1623482139260887042 15:00 Gas Prices https://twitter.com/hildobby_/status/1622655640056303621 17:55 Bitcoin Blockspace https://twitter.com/dylanleclair_/status/1622660128989233153 21:00 BTC Target https://twitter.com/TrustlessState/status/1621614401550696449 23:35 AI Tokens https://twitter.com/TrustlessState/status/1623300044437725184 26:00 NFT Loans https://thedefiant.io/nftfi-record-loans 30:30 Operation Choke Point https://twitter.com/nic__carter/status/1622973966360133634 32:45 Choke Point Blog https://www.piratewires.com/p/crypto-choke-point 37:20 Jake Take https://twitter.com/jchervinsky/status/1622978313122635776 38:00 Sen Hagerty https://twitter.com/SenatorHagerty/status/1623375510544781356 40:00 Local Bitcoins Shutdown https://twitter.com/LefterisJP/status/1623662500699951105 41:40 SEC Banning Staking https://twitter.com/brian_armstrong/status/1623459203150131201 44:25 Gateway Token https://therug.mirror.xyz/SzofEWluskmQHZZ568XHyv_pfn70tgMqddORLaxxo8M 45:50 Genesis DCG https://twitter.com/AP_Abacus/status/1622735561290031104 https://decrypt.co/120708/gemini-earn-genesis-dcg-agreement https://www.ft.com/content/abee7e2e-1d18-4a68-aac5-665869db250f 52:30 Arbitrum Stylushttps://twitter.com/arbitrum/status/1622974926331453441 54:45 StarkNet Prover https://www.theblock.co/post/208731/starkware-open-sources-prover-technology-for-ethereum-layer-2-network 55:50 MakerDAO Report https://ipfs.io/ipfs/QmNXCG29xCMHhHppw6666zkY1zRTDT75Wdb5LHwEJcsvzH?filename=MakerDAO%202022%20Retrospective.pdf 57:55 a16z Uniswap Governance https://www.theblock.co/post/208729/a16z-votes-against-proposal-to-deploy-latest-uniswap-iteration-on-bnb-chain https://twitter.com/Dogetoshi/status/1622088935336824833 https://twitter.com/eddylazzarin/status/1622758120878653440 1:03:45 Linkin Park https://twitter.com/linkinpark/status/1623561791447117824 1:05:20 Coffeezilla Sting Operation https://twitter.com/coffeebreak_yt/status/1621581040539033603 1:08:20 FTX Donations https://www.theblock.co/post/208763/ftx-debtors-want-political-donations-returned-by-end-of-the-month 1:09:30 Super Bowl Commercials https://twitter.com/watcherguru/status/1622997422254305294 1:11:40 Do Kron Manhunt https://www.bloomberg.com/news/articles/2023-02-07/hunt-for-crypto-fugitive-do-kwon-led-south-korean-officials-to-serbia-last-week 1:12:30 Kyle Davies Hiding https://www.theblock.co/post/209552/kyle-davies-has-chosen-to-ignore-his-duties-to-3ac-after-rare-twitter-subpoena 1:14:20 Taxing Staked Crypto https://decrypt.co/120793/crypto-staking-taxes-appeal 1:16:00 Lido v2 https://twitter.com/LidoFinance/status/1622963224898330624 1:16:50 Aave GHO https://twitter.com/AaveAave/status/1623683819034517504 1:17:20 Element Hyperdrive https://twitter.com/element_fi/status/1623367512086745097 1:17:49 Infinity Pools https://twitter.com/delitzer/status/1623076431243939842 1:18:20 Mean Finance https://twitter.com/mean_fi/status/1621226280984408064 1:19:25 Sorare Premier League https://medium.com/sorare/sorare-partners-with-premier-league-to-launch-digital-player-cards-and-fantasy-competitions-c8b5c5e195b3 1:20:00 Jobs 1:23:30 Questions from the Nation 1:30:00 Takes of the Week 1:33:10 Proof of Time https://twitter.com/trustlessstate/status/1621550977793855488 1:36:40 Opinions that Matter https://twitter.com/RyanSAdams/status/1621502310550495232 1:41:20 What David’s Bullish On 1:43:40 What Ryan’s Bullish On 1:45:20 MEMEs of the Week https://twitter.com/MrT09613720/status/1623649904349577216 https://twitter.com/BanklessHQ/status/1623062111604600849 ---- 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.

• 0:00David Hoffman?

  In bad news, though, Operation Choke Point promises to take crypto bankless, but in the bearish way, perhaps crypto's biggest regulatory threat ever.

• 0:12Ryan Sean Adams?

  Bankless Nation, it is the second Friday of February. David, what time is it?

• 0:16David Hoffman?

  Ryan, it's the Friday Bankless Weekly Rollup, where we cover the entire weekly news in crypto, which is always an ambitious endeavor, especially this week. An insane amount of shipping, some extra-large FUD, and we're going to cover it all on this rollup here and now with, of course, coffee.

• 0:33Ryan Sean Adams?

  Coffee, as always. Yep, in my amber mug, too, so it's nice and piping hot. David, you are back, and your voice still hasn't fully recovered, although it's better than it was yesterday. So, like, how many days of recovery? And what happened to you?

• 0:45David Hoffman?

  Yeah, my voice is slowly coming back after going to the Starkware Sessions in Tel Aviv, Israel, and doing nine interviews, which the Bankless Nation will notice that the first four of is on their podcast feed, so you can go ahead and listen to those. If you, like, if you just can't make it out to conferences, don't worry, because Bankless has your back. I bring out an entire podcast studio with me, including three microphones, and I interview everyone who's founder, builder, developer of that particular ecosystem. This conference in choice was the Starknet World. And sometimes I put my voice on the line, too, to get that done. And that's why you're going to be hearing a little bit raspy of a voice on this weekly rollup this week.

• 1:24Ryan Sean Adams?

  Big sacrifices to make this happen. Many Gotham's died for this information. A little Star Wars reference for you. David, I always thought you were just going to the conferences for me, man, but I guess it is about the listeners, too. Seriously, I appreciate that. That's one of the great things about, people don't know the partnership between David and myself. It's just like a yin-yang type thing, where he does all sorts of stuff that I'm like, "Ah, I don't want to go to a conference." David's like, "I absolutely want to go to all the conferences." And so it's a really good fit. And David's like, I don't want to do accounting and bookkeeping and that sort of thing. And I'm like, oh, that's fine for me. I enjoy it in a weird way.

• 2:01David Hoffman?

  Weird.

• 2:01Ryan Sean Adams?

  That's what makes this partnership work.

• 2:04David Hoffman?

  Anyway. Just like the disposition of who I am at a conference is like, I just want to talk with as many people as possible, but I also hate small talk and receiving pitches. And so in order to defend myself from getting pitched by everyone all the time, I schedule out interviews, longer form interviews. And I'm like, oh, I'm sorry, I'm interviewing people.

• 2:24Ryan Sean Adams?

  But not the small talk?

• 2:25David Hoffman?

  Yeah.

• 2:25Ryan Sean Adams?

  I'm like that too. You know, what's funny is I know you've characterized yourself as an introvert, but I think if somebody met you at a conference, I don't think they'd see an introvert.

• 2:33David Hoffman?

  Yeah, everyone is surprised. Like I say, oh yeah, I'm kind of introverted. And everyone's like, what? No, you're not. And actually I have had to actually rethink that.

• 2:42Ryan Sean Adams?

  Yeah, because there are true introverts that just really don't.

• 2:45David Hoffman?

  Yeah, there are people who are more introverted than me, but also like coming into crypto, I have discovered that it has created a more extroverted outgoing person in me. That is something I've noticed.

• 2:58Ryan Sean Adams?

  Look, come for the money, but stay for the personality improvement?

• 3:03David Hoffman?

  The psychological changes, which also happens to be the subject of my talk at Shelling Point in Denver. If you want to talk about the way that permissionless, self-sovereign protocols change the psychological disposition of the societies that organize around them. If that talk interests you, definitely go to Shelling Point.

• 3:21Ryan Sean Adams?

  David's been waiting years to apply his psych degree to crypto. And then the moment has come.

• 3:25David Hoffman?

  Six years, six years in the making.

• 3:27Ryan Sean Adams?

  This is great. Well, it's, it's, it's super unlike Bankless to shill its own content on the show. But you can, you can tell, we've got a lot of hot content coming at you, David. And I've been looking at our podcast schedule too. I mean, we're recording three podcasts over the next, like three days, three working days with some real big names.

• 3:44David Hoffman?

  Oh my God, there's the, I think it's some of the hottest content lined up over the next like 10 days that I think.

• 3:50Ryan Sean Adams?

  Eric Cowell. This is in crypto ethics. We're talking about that. Eliza.

• 3:57David Hoffman?

  AI bigger brain. We're talking about AI. And this isn't just Bankless following the AI trend. This is.

• 4:02Ryan Sean Adams?

  Yeah, this is not about AI tokens.

• 4:04David Hoffman?

  It's not about AI.

• 4:05Ryan Sean Adams?

  This is really AI. And this guy's like a big brain. I'm. It's incredible that he's choosing to come on and then Annie Jacobson.

• 4:12David Hoffman?

  Oh, my God, I'm so excited for the Annie Jacobson episode. Can I take a moment to show it really quick?

• 4:17Ryan Sean Adams?

  Well, OK, but here's my take on it. She's going to tell us if we have to hide from our government, if the government is coming after people in crypto, right?

• 4:24David Hoffman?

  Nah, I wouldn't say that that's the most accurate way of the theme of the content. The Annie Jacobson content, Annie Jacobson is an author who does not really know much or care about crypto and doesn't need to in order to talk about what we're going to talk about. She's written books like The Pentagon's Brain, which is an exploration into how the Pentagon thinks and how it's organized. And the subject matter is there have been, there are many intelligence agencies in the United States that, you know, the CIA, the Pentagon, et cetera. And there also throughout history has been a number of counter-cultural dissident movements. And there have been ways that these intelligence agencies have engaged with these counter-cultural dissident movements.

• 5:07Ryan Sean Adams?

  Infiltrated.

• 5:07David Hoffman?

  Infiltrated, yes, perhaps is the correct word. And so while Annie doesn't have any specific knowledge about how the CIA might have been chosen to engage with crypto, the idea is that, well, we can talk about all of the different strategies that they have infiltrated other movements. And it's up to the listener to connect the dots and extrapolate this into how, you know, the CIA might have infiltrated, you know, the crypto world.

• 5:33Ryan Sean Adams?

  The question is, how well do you really know your crypto podcast co-host? Like, how well do you really know that person? That's the question I intend to ask Annie.

• 5:42David Hoffman?

  OK, well, so like, the, I'll jump to the conclusion of that episode.

• 5:47Ryan Sean Adams?

  We don't know the conclusion yet.

• 5:49David Hoffman?

  Well, the punchline, I'm pretty sure. Well, OK, so Annie Jacobson spoke at the A16Z Founder Summit, which is a retreat, which is how she came onto my radar. And the conclusion is like, yo, if you are in the social networks of crypto, the VC networks, the media networks, the likelihood that someone is a plant is like, that's looking back throughout history as how this has happened throughout other dissident movements is likely. And so like, I look at myself, I'm like, oh, I moved to New York to be a part of the crypto socialite crew. I have the, one of the most extensive media networks in all of crypto.

• 6:25Ryan Sean Adams?

  Chances are you know somebody who's-

• 6:26David Hoffman?

  The CIA really wants to be my friend.

• 6:29Ryan Sean Adams?

  Well, maybe, they probably already are then.

• 6:31David Hoffman?

  Yes.

• 6:32Ryan Sean Adams?

  If they've wanted it, then they are.

• 6:33David Hoffman?

  And there's someone who's my friend, who I was probably have already invited over to my apartment, who's probably listening to this and is like, oh, fuck, they're on to me.

• 6:42Ryan Sean Adams?

  Thanks, David. Paranoia increases 10x. You guys appreciate that? That was like a whole eight minutes of shilling bankless content. I'm sorry, we got to get to the, the roll up content today, all right? Is Biden Operation Choke Point, this Operation Choke Point we're going to talk about, is it coming to kill crypto? We'll talk about that. What else we got, David?

• 6:59David Hoffman?

  DCG and Gemini hug it out. Maybe we'll get some of our money back. Perhaps a successful resolution. And so if you have money and Gemini earned, stay tuned to find out how much money that you may get in return. And also, Ryan, you've noticed this, I've noticed this. It is absolutely ship season. So many teams have shipped very cool things, very big updates in the last recent weeks. So we're going to cover it all. Fundamentals are up big. Also, A16Z is a DeFi governance cartel. The manhunt for DoKwon. NFTs on Bitcoin continue their exponential growth. Arc's audacious Bitcoin price targets. This roll up is absolutely jam packed. I'm really excited for this one, so stay tuned for this all.

• 7:41Ryan Sean Adams?

  You know what else I'm really excited about is more tools to help us learn about crypto and go bankless. Here's one of the best tools I have seen this year. It's called MetaMask Learn. You're seeing on the screen, it says, "Welcome to MetaMask Learn." This is like courseware to help you learn crypto. You can click here, you could say, "Start Course," and you can get on the journey. Lesson one, what is Web 3? Maybe you're, you're skipping all the early bankless podcasts and you want a quick recap. This is a great way to do it. David, what else is in this courseware in this MetaMask Learn app?

• 8:14David Hoffman?

  Well, you'll also be given an interactive and engaging way to learn how to open up a MetaMask wallet. So if you're, you know, family and or non crypto friends or curious, this is a place for you to send them. They MetaMask obviously teaches you how to set up MetaMask and what what's going on when you write down these 24 words, but also just has some very important DeFi paradigms like digital identity, what self custody is and why it's amazing, NFTs and creators, decentralized finance. So if you want to onboard yourself or not have to onboard your friends, you can send them to learn.metaMask.io.

• 8:48Ryan Sean Adams?

  Really cool. This is really the next step to go bankless. Step one is you open up your crypto account.

• 8:53David Hoffman?

  Your what?

• 8:56Ryan Sean Adams?

  Step one is you open up your your Kraken account and deposit some funds, you transfer that to fiat and then you open up a MetaMask wallet as step two. All right, David, let's get to markets. I think we got some happy news this week yet again. It's it's only happy news. What is Bitcoin doing on the week?

• 9:12David Hoffman?

  It's not happy, Ryan. I don't know what you're talking about. It's we're down 5.4%.

• 9:16Ryan Sean Adams?

  Where have I been?

• 9:17David Hoffman?

  Yeah, where have you been?

• 9:18Ryan Sean Adams?

  Wait, was yesterday happy?

• 9:20David Hoffman?

  No, it's been it's been. I mean, it's not been like super sad, but it's been a down week. We started the week at $23,800.

• 9:27Ryan Sean Adams?

  This is so embarrassing, guys. David puts these numbers in before the roll up and clearly I don't even read them and I am so zen this year. I'm not even checking prices.

• 9:36David Hoffman?

  Yeah, right. Only being down 5.4% is apparently not down enough to be on Ryan's radar. Bitcoin currently coming in at $22,500.

• 9:47Ryan Sean Adams?

  Oh, sad. Sorry for that. I wrecked you guys. How about ETH? Is that down too, David? Don't tell me.

• 9:53David Hoffman?

  Less down, but still down. Yeah. Starting the week at 1675, 1,675, down 3.2% to 1620. Yeah. So down down on the week, not overly bad, especially with like, so we're going to talk about this banking FUD, this operation choke point. And we're only down this much. I'm like, kinda really optimistic about this. And so very rarely in the Bankless Weekly rollup will we give a forward looking market take, but I saw this here, and this is from crypto trader Hornhares. Three weeks of compression and higher lows on the ETH price chart. And so you can just see this triangle wedge forming, and he's, and he's claiming that the resistance, the $1,700

• 10:37David Hoffman?

  resistance, which we talked about last week, is perhaps fading away. And when that resistance finally gets chewed through, we go up into the right. Now, this is the ether price we're looking at, but this is probably also true for overall market indicators.

• 10:54David Hoffman?

  I think there are more bullish indicators in the market than there are bearish indicators in the market. And that is despite all of this banking flood that we'll talk about so shortly.

• 11:03Ryan Sean Adams?

  Did we just do TA on Bankless?

• 11:05David Hoffman?

  We just did TA. We have done this like twice before in all of Bankless Weekly rollup history. And now we have done this a third time.

• 11:12Ryan Sean Adams?

  Let me click away. I mean, you said we don't do price predictions, but we actually do. They're just like really long term.

• 11:18David Hoffman?

  Yeah, right. They're like the 10 plus year price predictions.

• 11:21Ryan Sean Adams?

  ETH is going to 10K.

• 11:22David Hoffman?

  It's absolutely going to 10K.

• 11:24Ryan Sean Adams?

  How about ETH Bitcoin ratio? What's that looking like?

• 11:27David Hoffman?

  Yeah, up a little bit on the week. We are up 2.3% on the week. We're at 0.072.

• 11:33Ryan Sean Adams?

  David, look at these charts from Kraken that that we're showing. It's, it's really good.

• 11:38David Hoffman?

  Can I talk about my favorite futures here?

• 11:39Ryan Sean Adams?

  Yeah.

• 11:40David Hoffman?

  So the URL for this, pro.kraken.com/app/trade/eth-btc. You can actually just like delete BTC and type in USD if you want. You can type in trading pairs in the URL. So like, you know, I mean, you have it also pulled up in the fantastic modular UI UX that Kraken has. You can, you can look at multiple charts at once. So they're tabs, they're tabs, and but you can also drag and drop them and make them modular. So you can pull them out if you want to look.

• 12:06Ryan Sean Adams?

  Yo, we got tabs and tabs right now.

• 12:08David Hoffman?

  Tabs inside of tabs. But you can also intuitively change the URL. Like, I don't know if other people do this when they navigate crypto, but it's just like, if you want to type in any like ticker, you can do it straight through the URL to get what you want. I think it's great.

• 12:21Ryan Sean Adams?

  Can I do the sole BTC ratio? What's that looking like?

• 12:24David Hoffman?

  See, let's see if they got it. So PTC, boom, there it is, right from the URL.

• 12:28Ryan Sean Adams?

  That's pretty amazing. Big screen. Love this stuff.

• 12:31David Hoffman?

  Yeah. Good job, Cochran. Look at that. Look at that. You're a trader now, Ryan. Look at this.

• 12:35Ryan Sean Adams?

  I need.

• 12:36David Hoffman?

  Kraken is turning a trader out of Brian. Wow. Never thought it possible.

• 12:40Ryan Sean Adams?

  Maybe behind me. Live updates all the time. So I can keep track of freaking prices. Apparently I don't do that.

• 12:45David Hoffman?

  Clearly.

• 12:46Ryan Sean Adams?

  Global crypto market cap. Are we above a trillion, David?

• 12:49David Hoffman?

  1.1 trillion dollars. Slightly down on the week.

• 12:53Ryan Sean Adams?

  That's all I need to know. Okay, let's talk about some market stuff going on. One is ultrasound money just keeps getting more and more ultrasound. ETH is at all time lows in terms of deflation.

• 13:05David Hoffman?

  Post-merge all time lows.

• 13:07Ryan Sean Adams?

  Yes, post-merge all time lows. Ever since the burn started? No. No. Ever since the merge happened.

• 13:13David Hoffman?

  Yeah.

• 13:13Ryan Sean Adams?

  This is an all time.

• 13:14David Hoffman?

  I kind of consider all Ether supply metrics before the merge kind of irrelevant now because this is, we are so close, like we could.

• 13:23Ryan Sean Adams?

  Oh, is that a good take, David? Maybe there's only, maybe there's only two dates in crypto. There's BM and there's AM.

• 13:29David Hoffman?

  Before merge? At least in Ethereum, if you want to be an ETH maxi about it, you can say for all of crypto, but at least in Ethereum.

• 13:35Ryan Sean Adams?

  I kind of like it. I kind of want to do that.

• 13:36David Hoffman?

  Yeah, so like all Ethereum monetary policy kind of resets at the merge and now like, and now we are at all time lows PM, post-merge.

• 13:47Ryan Sean Adams?

  Okay, and that's, so how much have we burnt? 14,000 ETH?

• 13:50David Hoffman?

  14,000 ETH since the merge. 20,000 ETH since the top of the supply.

• 13:56Ryan Sean Adams?

  Jeez.

• 13:56David Hoffman?

  So the top of the supply, when the ETH supply peak happened and not too long after the merge, it was at a little over 6,000 Ether, plus positive 6,000 Ether. We are now at negative 4,400 ETH.

• 14:08Ryan Sean Adams?

  When the burn starts, it just keeps going, David. I think that's what your take is here. What, actually, let me read it. I'll try, I'll try in your voice. The 24-hour record for ETH burn was set on November 8th, the day FTX went insolvent. That's a fun fact. 3,600 ETH was burnt. Fire emoji. Today, we burnt 1,800 ETH. 3,600 ETH was burnt during crypto's worst crisis ever. And now we're burning 1,800 ETH on a Wednesday. That is on a Wednesday, folks. Just a typical Wednesday for ETH and we're burning. 1800 ETH, Ethereum, Ether.

• 14:46David Hoffman?

  We're burning like over 30 day period, we're burning like an average of like 12 to 1300 Ether per day.

• 14:52Ryan Sean Adams?

  David, that must mean a block space is in high demand. What are we looking at here?

• 14:55David Hoffman?

  In demand. That is an equivalent statement. Ether burn means block space demand. And this is Hill Dobby, who's just got great gas analytics. He's pointing to a couple of events here. The Ethereum merge, the FTX bank run, and the floor of gas prices is up only. We haven't seen like below 15 Gwei gas prices in months now. And this is, this is to me, Ryan, like, gas prices could go down. They could go back down to where it was. They could, you know, level out, but a crescendoing floor of gas prices is what a bull market would start with.

• 15:32Ryan Sean Adams?

  Isn't this, okay, do you remember like 18 months ago when this was like the most bearish indicator ever? Gas price on ETH was going up, therefore bearish for Ethereum. Do you remember this?

• 15:45David Hoffman?

  Yeah, you mean 2021, the triggering of all layer one season?

• 15:48Ryan Sean Adams?

  Yeah, this, this was like, I don't know, was it December of last, of 2021? Or that, that was kind of the peak of this, I think, was a Suzu tweet where he criticized Ethereum for sitting around watching. Circle jerking to the burn. Is that what we're doing?

• 16:07David Hoffman?

  We are currently doing this, yes.

• 16:09Ryan Sean Adams?

  Okay, well, but, so are you happy about this? Are you sad about this? Or are you like, is this? High gas fees are bad for ETH, aren't they? Or are they good? I'm confused. Tell me. Tell me what to think.

• 16:21David Hoffman?

  I will take Suzu's point when he tweeted that and say that if all the Ethereum proponents who were talking about how awesome the burn was, were perhaps not being sensitive to how much Ethereum gas costs were costing people that weren't able to buy Ether at a cheaper price, of which it was cheaper not like four, five, six months prior. So I'll take that point because at that time, layer twos of around Ethereum were not nearly as mature or developed or as cheap as they are today. Today, layer two- are in production with blossoming DeFi and NFT ecosystems. There's not much you can do on an Ethereum layer one that you can't also do on Ethereum

• 17:00David Hoffman?

  layer two. So now, when we, you know, circle jerk about the ETH burn, there is also a way for all users to experience sub 10 cent gas fees and do all of the crypto Ethereum things that they would like to do on any of the layer twos that they choose. So now I declare that it is once again appropriate for the ETH maxies to circle jerk about the burn.

• 17:22Ryan Sean Adams?

  Okay, well, thank you for telling me that, David. Thanks for the clarification.

• 17:26David Hoffman?

  You have permission.

• 17:28Ryan Sean Adams?

  Because I needed that permission. What we're basically saying is, look, the cost of living in Manhattan is going up once again, but why don't you live in the suburbs? There's tons of cheap housing and affordable things to do in crypto on the layer two ecosystem. David, this is the daily median gas price. Is this another view of the same thing from Hill Dobby?

• 17:48David Hoffman?

  That's exactly right. Just gas, gases definitely hit a floor, a bottom in the September 2022 and has been up only since then.

• 17:55Ryan Sean Adams?

  Do you know what? Ethereum block space ain't the only block space that's selling and going up. Let's talk about Bitcoin.

• 18:02David Hoffman?

  Bitcoin block space.

• 18:03Ryan Sean Adams?

  The ordinal effect. What is this?

• 18:05David Hoffman?

  We love this. So this is Bitcoin block space going all the way back to January of 2022 into February of 2023 where we are now. And you can see Bitcoin block space breaking all time, all time highs in terms of how much, actually how much size they are. And so the ordinals effect have increased the total size of Bitcoin, the average mean of Bitcoin block space to highs that it has not yet seen before, which means, of course, Ryan, that more people are paying for Bitcoin block space. And as we have been saying, block space demand is bullish. And so, congrats Bitcoin. This is one of the strongest properties I've seen out of Bitcoin in a very long time. This is great.

• 18:49Ryan Sean Adams?

  What this is, this is a marker of sustainability of the Bitcoin network. Of course, this is how it pays for defense in the future and security in the future is through a block space fees. So those blocks have to be worth something. Okay, we talked about what's happening, but why is it happening?

• 19:08David Hoffman?

  So Ordinals, which there was a, we did a show with Eric Wall and Casey Rotemore, who is the creative of Ordinals. Eric Wall, I tap him in as my Bitcoin technical co-host. He's my Bitcoin, my Bitcoin, I tap him in when I need help explaining Bitcoin stuff. So him and I talked to Casey, who is the guy who created Ordinals, and this is what we're looking at, this chart, which is absolutely exponential as soon as Ordinals has come into the mainstream.

• 19:33Ryan Sean Adams?

  Which is the NFT, it's the thing that allows NFTs on Bitcoin?

• 19:37David Hoffman?

  Exactly, yeah. And it's actually pretty simple, like how it works. Basically, the Bitcoin UTXO model, unspent transaction output, is basically Ethereum has an account model, as in you have your Ethereum address and you put all of your tokens in there. Bitcoin has a UTXO model, which is that every single Bitcoin is actually like a unique denomination, like 13.7 Bitcoins is like a bill that's like $27.42, like a unique bill that's for Bitcoin. What Ordinals does is they turn, they make a bill out of one Satoshi, which is the smallest denomination, and then just append data to that. And that's what an NFT is on Bitcoin. And the minting of Bitcoin NFTs, Ordinals on Bitcoin, is just going exponential, has not slowed down.

• 20:21Ryan Sean Adams?

  Did you ask them, why didn't somebody think of this years ago?

• 20:25David Hoffman?

  They needed, they needed both SegWit and Taproot, so it was specifically a Taproot thing.

• 20:30Ryan Sean Adams?

  That's right, which is relatively recent.

• 20:32David Hoffman?

  But also at the same time, like Bitcoiner culture isn't really one to like enjoy a lot of non-BTC use cases of Bitcoin. And so like this is why this is controversy. And like some, like Luke Dash Jr. is a Bitcoin cordev, is like, people have lied and tricked the code in order to make this happen, which I think is one of the worst takes I've ever heard.

• 20:53Ryan Sean Adams?

  Trick the code?

• 20:53David Hoffman?

  You can't trick code, that's not how it works. But anyways, Ordinals, brand new demand for Bitcoin block space.

• 21:01Ryan Sean Adams?

  All right, so bullish Bitcoin, but how bullish are you, David? If you want to be Kathy Wood bullish, that is Kathy Wood of Ark Invest, her bull case right now is $1.48 million per Bitcoin.

• 21:14David Hoffman?

  In 2030. By 2030.

• 21:17Ryan Sean Adams?

  By 2030, I should say, yes. It's not happening this year, according to Kathy. The bear case, I want to hear that most bearish possibility Kathy would things could happen for Bitcoin, 258K per Bitcoin. Actually, I could see the bear case playing out. What do you think about these numbers, though, David?

• 21:35David Hoffman?

  I gave my takes. I think that bull case is extremely bullish. While Bitcoin perhaps might be able to tick that amount, I do not think it will ever be able to sustain a $1 million price. And the reasoning behind that is this math that is on the screen here. Bitcoin at $1.5 million in 2030 means that it's issuing $2.33 million every 10 minutes in block rewards. New Bitcoin being minted every 10 minutes is going to be worth $2.33 million. When Bitcoin hit its 2021 peak, it was issuing $400,000 per block. And so Kathy Wood's bullish Bitcoin prediction would imply that Bitcoin would be issuing $2.33 million every 10 minutes.

• 22:20David Hoffman?

  And that is why Bitcoin can't sustain a $1 million price tag, because no bull market could ever sustain $2 million of flows out of Bitcoin miners, because they have to sell. Bitcoin miners have to sell. So that $2.33 million of issuance per block every 10 minutes comes out to $330 million a day of issuance for miners, which not all of it is sold immediately, but ultimately generally becomes sold, like 90, 95% over time ultimately becomes sold. How will anyone, how will any asset be able to sustain itself under $300 million a day of net sell pressure?

• 23:00David Hoffman?

  That is, I don't think Bitcoin can ever sustain a $1 million price tag because of this math.

• 23:06Ryan Sean Adams?

  Well, eventually, that block subsidy will drop to zero, though.

• 23:09David Hoffman?

  Yeah, but then so does the security, and that's a different issue.

• 23:12Ryan Sean Adams?

  Yeah, I think Bankless listeners, hopefully you're seeing the way that Bankless, David and I at least, think about these assets. It's very much about how much, yeah, it's about flows. It's about how much of block space, the product that blockchains create, are you selling versus what is the cost of the sale through issuance and through other kind of transaction fees. So, that is Bitcoin. What about this other leg up, which we've seen, which is these AI tokens? Here's a headline from CoinDesk, "The AI Token Search Traffic Spikes As Crypto Traders Seek Exposure." What in the world are AI tokens, David, and should I buy some?

• 23:55David Hoffman?

  There are a certain class of tokens that are at various levels of relevancy to the world of AI. Most of them are not very related to AI. Like, some people are looking for it, "How do I get exposure to AI?" And so they're going and buying AI crypto tokens. The level of how much AI is actually integrated into these assets and actually meaningfully giving AI exposure to these assets is extremely suspect, which brings me to my take, which-

• 24:26Ryan Sean Adams?

  Which are some of these tokens, though? Like, SingularityNet, Siscoin, Fetch.ai-

• 24:31David Hoffman?

  Deep Brain Chain is a 2017 ICO darling token, which I have not heard since then.

• 24:38Ryan Sean Adams?

  I mean, we're looking at seven days of about 160% for SingularityNet. And so you're saying, like, it's basically, there's a narrative, which is ChatGPT is really cool, and so was crypto, and now these AI tokens are kind of taking that narrative? Are you saying it's basically a narrative trade?

• 24:57David Hoffman?

  It's basically a meme trade, because this is a tweet that I put out, and I didn't really expect this tweet to get over 1,000 likes. I just put this out there, but I guess it ticked the right nerve with certain people.

• 25:08Ryan Sean Adams?

  I'll give you one, too.

• 25:09David Hoffman?

  Thank you. "Let's make something clear," is what I say. "There is no material integration between AI and crypto." You cannot put AI into a blockchain. You cannot make a token that has AI in it. That doesn't make any sense. AI and so I make the claim that AIs AI tokens are meme tokens is just a narrative trade is just a meme trade not too dissimilar from Deutsch code. There are ways like Numerai is a token that legitimately does use real AI to achieve its end goals, but it's the end goal that you should want exposure to not the fact that it just uses AI. So are you saying

• 25:44Ryan Sean Adams?

  I totally make sense. Are you saying this is a dumb market? This is a meme trade. There is no such thing as a it's a meme trade, you know, chat GPT for on the blockchain. Yeah,

• 25:52David Hoffman?

  there's no chat GPT on the blockchain. Okay, chat GPT train though, or chain would if at a certain valuation.

• 26:00Ryan Sean Adams?

  See that? Yeah, I'm sure we're gonna see that this cycle. You know what is kind of cool, though, is a bright spot in the market, too, is NFT fi. It's processing record number of loans. So are people lending and borrowing against their NFTs now? I know that was a an idea that we started talking about about two years ago, and now we're actually seeing it in the numbers. 18,000 ETH borrowed in January. That's a lot of ETH, David.

• 26:23David Hoffman?

  That's a lot of ETH. $444 million in monthly volume in January from NFT lending. So this is using your NFTs as collateral to borrow. Ben Dow had volumes of $36 million. 4,400 loans were made in January, which is almost double the the previous peak. So NFT lending coming into the the world. The numbers are up bigly.

• 26:49Ryan Sean Adams?

  I gotta say, David, despite the detractors, NFTs are still pretty strong during this bear market, and we're seeing it in actual NFT fi, the usage of NFTs. It hasn't collapsed the way some people thought it would. NFTs are doing pretty well.

• 27:03David Hoffman?

  Well, there's a there's a huge amount of capital, quote unquote, that's like locked up. Okay, so like, there's a big difference between something like the United States and the legal system that we have in the United States and like third world countries and the legal system there. A lot of people in third world countries or, you know, countries with inadequate legal systems can't use their house as like as collateral. They can't get a mortgage on their house just because they don't have assurances. The legal system isn't set up. America does have that. And so people can use the value of their Their house to access capital and this has been a huge boon of wealth for America. That's why, one of the reasons why America is so great is because our legal system allows us to tap into capital. This is the same effect, applying this to NFTs, previous to now.

• 27:47David Hoffman?

  And if the capital that's locked up in value of your NFT, your 100 Ether Crypto Punk or your 100 Ether Bored Ape, you can't access that capital without selling it. With NFTFi, you can access that capital without selling it. And so there is a wealth effect that is generated for all of the NFT holders because they are able to use smart contracts to tap into the capital of their assets.

• 28:11Ryan Sean Adams?

  And outside, importantly, this is outside the bounds of a nation state. So it doesn't matter where you live. You know, another way to describe what you talked about is kind of legal assurances. Settlement assurances.

• 28:23David Hoffman?

  Settlement assurances.

• 28:24Ryan Sean Adams?

  Effectively what legal assurances are and Ethereum gives us stronger settlement assurances too. David, we've got a lot more to cover. What's coming up next?

• 28:32David Hoffman?

  Coming up next, did you have money in Gemini Earn? Cause you might be getting your money back. Stay tuned. Yeah, Ryan, some good news. So Ryan, stay tuned. I will tell you exactly how much you might be getting back. In bad news though, Operation Choke Point promises to take crypto bankless, but in the bearish way. Perhaps crypto's biggest regulatory threat ever. And the manhunt is on for Do Kwon. Meanwhile, Kyle Davies is ignoring the subpoena for the Three Arrows Capital lawsuit. Bad boys, bad boys on the scene. All of this stuff and more, as soon as we talk to some of these fantastic sponsors that make this episode possible, especially Kraken, which is Bankless's strategic sponsor for 2023 and has helped Ryan enjoy charting a little bit more this year. Thanks, Kraken.

• 29:16Ryan Sean Adams?

  True, true story.

• 29:17David Hoffman?

  Kraken has been a leader in the crypto industry for the last 12 years. Dedicated to accelerating the global adoption of crypto. Kraken puts an emphasis on security, transparency and client support, which is why over nine million clients have come to love Kraken's products. Whether you're a beginner or a pro, the Kraken UX is simple, intuitive and frictionless, making the Kraken app a great place for all to get involved and learn about crypto. For those with experience, the redesigned Kraken Pro. App and web experience is completely customizable to your trading needs, integrating key trading features into one seamless interface. Kraken has a 24/7 365 client support team that is globally recognized. Kraken support is available wherever, whenever you need them, by phone, chat, or email. And for all of you NFTers out there,

• 30:01David Hoffman?

  the brand new Kraken NFT beta platform gives you the best NFT trading experience possible. Rarity rankings, no gas fees, and the ability to buy an NFT straight with cash. Does your crypto exchange prioritize its customers the way that Kraken does? And if not, sign up with Kraken at kraken.com/bankless. Arbitrum One is pioneering the world of secure Ethereum scalability and is continuing to accelerate the Web3 landscape. Hundreds of projects have already deployed on Arbitrum One, producing flourishing DeFi and NFT ecosystems. With the recent addition of Arbitrum Nova, gaming and social dApps like Reddit are also now calling Arbitrum home. Both Arbitrum One and Nova leverage the security and decentralization of Ethereum and provide a builder experience that's intuitive,

• 30:45David Hoffman?

  familiar, and fully EVM compatible. On Arbitrum, both builders and users will experience faster transaction speeds with significantly lower gas fees. With Arbitrum's recent migration to Arbitrum Nitro, it's also now 10 times faster than before. Visit arbitrum.io, where you can join the community, dive into the developer docs, bridge your assets, and start building your first app. With Arbitrum, experience Web3 development the way it was meant to be: secure, fast, cheap, and friction-free.

• 31:11Ryan Sean Adams?

  David, is the Biden administration coming after crypto? What is Operation Choke Point? And what is happening? What's been the stir this week as we've learned more about what the administration's doing?

• 31:22David Hoffman?

  Yeah, Operation Choke Point is a historical, something in history not to do with crypto, that really just talks about how government institutions, government administrations can use the banking sector to de-bank industries that they find unappetizing. So Nick Carter is tweeting out, "I don't want to raise the alarm. I don't want to sound alarmed. But since the turn of the year, a new Operation Choke Point-type operation has been targeting the crypto space in the US. It is a well-coordinated effort to marginalize the industry and cut off its connectivity to the banking system, and it's working."

• 31:57Ryan Sean Adams?

  The original Operation Choke Point was like an Obama-era thing, you know, 2012 and 2013. And it was like targeted towards, you know, all the kind of gambling. Yeah, all the, all the...

• 32:12Ryan Sean Adams?

  Poker websites got kind of shut down almost overnight.

• 32:15David Hoffman?

  Which is why they started to use Bitcoin. That was a big, big impetus of Bitcoin adoption.

• 32:20Ryan Sean Adams?

  And then, then it was expanded later into other, you know, nefarious industries, you know, the marijuana industry and others like it. So now what Nick Carter is saying is basically there's going to be an operation choke point 2.0. Indeed, it's already begun and this time in the target sites is the crypto industry. And he's brought some evidence to the table too. So what, what are some facts that he, he mentions that are relevant to this case?

• 32:45David Hoffman?

  Yeah, so he wrote this fantastic blog post and just I'll read some of the experts here, excerpts here to give it, give the summary. So he begins, "What began as a trickle is now a flood." And by the way, all of these events have happened in the last two months or so. "The US government is using the banking sector to organize a sophisticated widespread crackdown against the crypto industry and the administration's efforts are no secret. They've expressed plainly in memos, regulatory guidance and blog posts. However, the breadth of this plan spanning virtually every financial regulator, as well as its highly coordinated nature, has even most of these steely eyed crypto veterans nervous that the crypto businesses might end up completely unbanked. Stablecoins may be stranded and unable to manage flows in and out of crypto and exchanges might be shut off from the banking system entirely.

• 33:29David Hoffman?

  The Biden administration is now executing what appears to be a coordinated plan that spans multiple agencies to discourage banks from dealing with crypto firms. It applies both to traditional banks who would serve crypto clients and crypto first firms aiming to get bank charters. This effort includes the administration itself, influential members of Congress, the Fed, the FDIC, the OOC and the DOJ." So there's intergovernmental agency coordination here. So then Nick goes on to list off some of the events that have shown this effort. "On December 7th, Signature, which is a active bank serving crypto clients, announces its intent to have deposits ascribed to crypto clients, which basically means they'll give customers their money back and shut down their accounts.

• 34:13David Hoffman?

  Drawing is crypto deposits down from 23 billion at the peak to just under 10 billion as it's exited stablecoin businesses."

• 34:19Ryan Sean Adams?

  I've had this happen to me, by the way. They just send you a Dear John letter and. Say, yeah, we're cutting you a check. See you later.

• 34:24David Hoffman?

  Yep. No due process. On January 3rd, the Fed, the FDIC and the OCC releases a joint statement on the risks to banks engaging with crypto, not explicitly banning banks' ability to hold crypto or deal with crypto clients, but strongly discouraging them from doing so on a safety and soundness basis. January 9th, Silvergate stock, which is probably crypto's biggest bank.

• 34:47Ryan Sean Adams?

  One of the only banks in the US that would like bank the exchanges and such.

• 34:51David Hoffman?

  Yeah, the stock falls to a low of $11.55 on bank run and insolvency fears after having traded as high as $160 in March of 2022. January 27th, the Federal Reserve denies crypto bank custodians two-year application to become a member of the Federal Reserve system, citing safety and soundness risks. Safety and soundness is a really recurring theme here. 27th of January, again, the National Economic Council releases a policy statement not explicitly banning banks from serving crypto clients, but strongly discouraging banks from transacting with crypto assets directly or maintaining exposure to crypto depositors. February 2nd, Department of Justice Fraud Unit announces investigation into Silvergate over their relationship with FTX and Alameda.

• 35:33David Hoffman?

  February 6th, Binance suspends USD bank transfers for all retail clients. January 27th, the Fed issues a policy statement which discourages banks from holding crypto assets or issuing stablecoins and broadens their authority to cover non-FDIC insured state chartered banks. On February 7th, that same statement I just talked about is entered into the Federal Register, turning the policy statement into a final rule with no congressional review or public notice or comment period. And lastly, there's more. I'm just pulling out the big ones. As February 8th, Protego and Paxos's applications to follow Anchorage and obtain full approval to become national trust banks are outstanding past the 18th month's deadline

• 36:16David Hoffman?

  and appear likely to be imminently denied by the OCC. So hopefully this gives you just a flavor of how broad and coordinated and intentful this effort to de-bank the crypto industry has become.

• 36:30Ryan Sean Adams?

  We can, you can tell why it's called. Operation Choke Point is because the banking sector that the state largely controls, the US largely controls and the executive branch can apply pressure to is choking off the crypto industry. Nick says this too. In some banks taking deposits from crypto clients, issuing stable coins, engaging in crypto custody, or seeking to hold crypto as principal, have faced nothing short of an onslaught from regulators in recent weeks. Time and again, using the expression, "safety and soundness," there it is again. They've made it clear that for a bank touching public blockchains in any way, it should be considered unacceptably risky.

• 37:11Ryan Sean Adams?

  Do not touch a blockchain banking industry, or we will come after you. That is the message that the executive branch is sending right now.

• 37:21David Hoffman?

  Yeah, the whole strongly discouraging them is basically just like, "Don't do that."

• 37:27Ryan Sean Adams?

  Do you want to get investigated?

• 37:28David Hoffman?

  Yeah, exactly. It's like, not a threat, that's also a threat. Jake Shavinsky, who is a lawyer that both Ron and I trust very, very, very much, great, great guy, he tweets out, "This is accurate," talking about Nick's take. "Without new legislation from Congress, federal agencies lack the authority to comprehensively regulate crypto markets, so their fallback position is to weaponize control over the banking system to mandate discrimination against crypto companies. This must stop."

• 37:55Ryan Sean Adams?

  That's what it is. It's mandated discrimination, isn't it, against crypto, against the industry?

• 38:01David Hoffman?

  This is Senator Bill Hagerty, who tweets out, "Regulators singling out business activities should alarm all Americans. It doesn't matter if it's crypto assets, firearms, or any other lawful business. Using banking regulators to advance political agendas should not be tolerated." Yes. Thank you, Senator Bill Hagerty. Appreciate the take. That's great. I'm glad you're a senator.

• 38:25Ryan Sean Adams?

  Look, I think this is... Apolitical, right? If it wasn't the Biden administration, then maybe it would be the Trump administration. And obviously, people in crypto, bankers would come down just as hard on that industry. This is about using the banking system to undemocratically control certain industries and to restrict us from the ability to freely transact with our money. That, I think, is a breach of American values, of our constitutionally granted liberties, and should not, cannot be tolerated. And it's seeping in. It's not a declared policy, but we can see the effects in the last few months.

• 39:08Ryan Sean Adams?

  And I do think, David, look, SBF didn't do us any favors, did he? All of this kind of gave those who maybe already wanted to come after crypto, an excuse to come do it.

• 39:19David Hoffman?

  Yes.

• 39:19Ryan Sean Adams?

  No one can stand in our way now. Crypto is, you know, clearly a scam. We have to, we have perfect cover in order to execute this Operation Choke Point. All we have to do is say, SBF, the name FTX, and we'll get whatever we want. That's what seems to be happening.

• 39:35David Hoffman?

  Yeah, there's absolutely no coincidence that this started right after FTX. And the powers that be were just asking for an excuse to do some of this stuff. And also, this should hit really close to home, because what we're doing in crypto is building systems that intentionally cannot do this. Like, this is what we are trying to prevent. Freedom to transact, no political control over money and economics. So this, this isn't just like, oh, they're coming for crypto. This is exactly what crypto is standing up to remove the powers of. And it was your take last week, Ryan, that I really, really liked. Separate government from money. Separate money from, separate finance from political powers.

• 40:22Ryan Sean Adams?

  Thanks for that, James Madison. I gotta give credit to that guy. I think he had some important things to say on the subject. Yeah, so also, this is sort of related, sort of unrelated, but it seems like local Bitcoins is closing down. That's certainly a shame. Local Bitcoins was a way for you to exchange Bitcoins using the internet as kind of a facilitator, but actually meeting up in person and doing the kind of a swap in person. It was completely decentralized.

• 40:48David Hoffman?

  It's like a Craigslist for Bitcoin.

• 40:49Ryan Sean Adams?

  Peer-to-peer, right? In the analog way.

• 40:51David Hoffman?

  It's like trading cash for crypto, and you would meet up and somebody would give you cash and hit you, they would swap for crypto. So you would have to like meet with this person. There are also like, you could have a third-party custody person if you wanted to have that as well. But like, I mean, you can kind of get why governments don't want this. But also, it's cash, and we should be able to trade cash.

• 41:14Ryan Sean Adams?

  Well, I don't know if this was, this is not related. This is just local Bitcoins, I think, had to close.

• 41:19David Hoffman?

  A while ago, a long time ago, there was government regulation specifically going after local Bitcoins. Over, maybe over two years ago. So local Bitcoins has been like in the crosshairs of regulation before.

• 41:34Ryan Sean Adams?

  Well, it's not only local Bitcoins. It might be institutions that provide staking in the US. This just happened before we recorded this, the day before our recording, from Brian Armstrong. "We're hearing rumors that the SEC would like to get rid of crypto staking in the US for retail customers. I hope that's not the case, as I believe it would be a terrible path for the US if that was allowed to happen." Brian goes on, talking about how it will drive staking offshore, will not help the US on its path towards becoming a more innovative economy, it will set us back, all of these things. Again, the SEC is another branch of the executive, you know, so this would fit into the whole narrative of Operation

• 42:15Ryan Sean Adams?

  Choke Point. This is still a rumor, Brian Armstrong says, but the fact that he tweeted it means that he wanted to make a statement. He wanted to get the news out there. "David, can you imagine if Gary Gensler and the SEC came after staking in the US? Retail staking." So that almost implies that if you're wealthy, you can stake. So it's basically like another discrimination, discrimination against the poor. Sorry, you know, you're pleb, you're too poor. To stake, but the rich institutions can.

• 42:47Ryan Sean Adams?

  It also remains to be seen if this would extend outside of kind of the institutional staking of a Coinbase, for example, or a centralized exchange. And would it extend to like a Rocket Bull, David? Would it extend to Alito? Would it extend to a home validator that you're running? Can you imagine that? What a breach of our liberties that would be if that happened in the United States.

• 43:12David Hoffman?

  You must do it through an institution. Give me a break.

• 43:14Ryan Sean Adams?

  Like, I don't even know. This is, again, it's rumor. And I feel like some of this is, obviously Twitter is kind of optimized for maximum FUD. It's probably not as bad as it all sounds, but it's clear something is going on here. And we need to brace ourselves. We need to be ready for it.

• 43:31David Hoffman?

  Yeah. When Brian tweets out something like this, when he starts a tweet thread and the thread says, "We're hearing rumors that the SEC would like to get rid of crypto staking in the US." Like Coinbase lawyers are connected. This isn't, this isn't Brian just like, "Oh, I heard a rumor." This is Coinbase's lawyers who absolutely know something, who's like, "Brian, we need to use your messaging and platform and Twitter account to broadcast this to the rest of the industry." This is like, "We're hearing rumors." This is, the rumors are substantial. I can almost guarantee you that.

• 44:02Ryan Sean Adams?

  This is definitely the US's loss. And people are saying, "Well, this is the end of crypto and the US can choke off crypto." It actually can't choke off crypto. It can choke off the US. The US can't kill crypto, but the US can kill the US if it wants to.

• 44:16David Hoffman?

  The age old line is, "You cannot ban Bitcoin. You can only ban your citizens from accessing Bitcoin." There's a difference there.

• 44:25Ryan Sean Adams?

  Hundred percent.

• 44:25David Hoffman?

  You're just doing a disservice to your own citizens.

• 44:27Ryan Sean Adams?

  There's more from Gensler this week. I can't believe this headline. You want to read it out?

• 44:31David Hoffman?

  Yeah. So, "You Think It Stops At Staking," Ryan. Gensler states that NFTs are a gateway token. Appearing before the students of George Washington High School, SEC Chair Jerry Gensler called NFTs a gateway token during his speech about the dangers of crypto. The talk was a one stop shop on a campaign called "Just Say No To Crypto, Bro," which Gensler designed to warn younger generations about cryptocurrency.

• 44:59Ryan Sean Adams?

  You didn't give me that time, David.

• 45:00David Hoffman?

  No, I didn't get you that time.

• 45:01Ryan Sean Adams?

  I read this in the agenda ahead of time. So what's this from? This is not true.

• 45:06David Hoffman?

  This is not true. Although, if you believed it, you would be remiss because other things that Gary Gensler have said has been like this.

• 45:14Ryan Sean Adams?

  The gateway token.

• 45:16David Hoffman?

  So if you believed that without noticing that this was a rug, congratulations, you got rugged. This is a product out of the bankless dial. The rug is basically the onion of crypto. You can go to therug.mir.xyz. Last week, we just started doing this.

• 45:30Ryan Sean Adams?

  I got rugged.

• 45:30David Hoffman?

  Last week was the second time we did it. Ryan got rugged and he's the one who pulls up the links in the first place.

• 45:35Ryan Sean Adams?

  I know. Imagine that.

• 45:37David Hoffman?

  Makes it even better. And so there is a bunch of other headlines. Check them out. They're really great. There's a link in the show notes. You can also collect this rug. This is a collectible rug. You can collect this rug.

• 45:46Ryan Sean Adams?

  Remember, kids, just saying.

• 45:47David Hoffman?

  I thought this was great.

• 45:48Ryan Sean Adams?

  This is awesome. Good one. Genesis versus DCG. David, am I going to get my money from Gemini Earn? How much? How soon? Give me the deets.

• 45:58David Hoffman?

  The is not completely locked in stone, but people have done some math. They've done some napkin math and come up with a number of about 80% under the current proposal. Genesis creditors expected to receive 80% recovery under the current proposal. This Decrypto article states that there is a Genesis Global revealed their new restructuring plan between Genesis and Digital Currency Group, their conglomerate, which enables creditors to get their money back. So where are all the funds coming from? How is DCG and Genesis coming up with the funds to make Genesis creditors whole? Well, first off, Genesis, of course, has some funds. They didn't go to zero. They have some funds to start with. In addition to the funds that Genesis has, DCG is also selling Genesis Global Trading,

• 46:43David Hoffman?

  and so they will generate some money for that. In addition to that, DCG is also exchanging its existing notes amounting to $1.1 billion for stock and refinancing $1 billion of loans. So it's getting money that way. And they are also moving to sell blocks of shares in the trusts that they have. So they have a Litecoin trust. They have a Bitcoin Cash trust. They have an Ethereum Classic trust. I don't know why they have an Ethereum Classic trust. They also have a digital large fund cap, and so they hold their own assets in their trust. And so they are selling their trust funds on the open market at a large discount, by the way. And so people are buying these trust assets for very significant discounts of the net present value in the actual trust. And with all of this selling...

• 47:26David Hoffman?

  And an additional, Ryan, $100 million from Gemini to make its own Earn customers whole again to pay for the fault of Genesis. All of that is coming up to about 80 cents on the dollar. So this is the napkin math that has been calculated. If you are a Genesis creditor, and that includes Gemini Earn customers, you are perhaps going to get 80 cents on the dollar. Probably not soon, but maybe hopefully this year.

• 47:54Ryan Sean Adams?

  Do you know what? Look, this feels like a very adult thing to do. Everyone took risk. Everyone gets a little bit of a haircut. All right.

• 48:02David Hoffman?

  Including customers.

• 48:04Ryan Sean Adams?

  Including customers. I use Gemini Earn. It was risky. You know, before I deposited, I knew I was getting into you. I feel like I should get a haircut for this. Not 100% haircut. Please, please, crypto gods.

• 48:16David Hoffman?

  How do you feel about that 20% haircut?

• 48:17Ryan Sean Adams?

  Fine. I'm not gonna say I deserved it. But I kinda like, it wasn't a bankless thing to do. The reason that I've used some of these centralized exchanges is to kind of test them and compare them versus DeFi. It's not a large amount of money for me. I think for some people, the lesson will be much more painful because they had a large portion of their funds inside of these accounts. They weren't using them in the way I was using them. And that does feel a little lopsided and unfair. But still, what happened was DCG is taking a big haircut, which they should. Gemini is acknowledging some culpability and, you know, contributing to this. And depositors take care of it. Much different than what's gonna happen with Celsius and BlockFi. I don't know if you're gonna get anything from Celsius.

• 49:02David Hoffman?

  Well, no, because Alex Michinsky totally rugged you.

• 49:05Ryan Sean Adams?

  BlockFi, you might get something. I don't think we're gonna get anything close to 80% from either of those cases. So it's unfortunate, but I'm glad that both the Winklevosses and Barry Silbert could kind of come to terms on this and figure this out. There's a lot of back and forth publicly on Twitter before this happened, but this seems to be a reasonably good outcome for depositors. So, look, this was the last domino to fall, and it feels like now it's fully fallen. We dealt with 2022. Can we safely say that now, David?

• 49:37David Hoffman?

  Well, now we have to deal with all the regulatory blowback, but the crypto side of things, I think is coming to a close. Just, I'll just say that the Winklevi twins and Gemini kind of get a lot of flack, but I mean, they don't have to put up a hundred million dollars and, but they are anyways. And so I just want to give them some quick props.

• 49:55Ryan Sean Adams?

  Yeah, that's good. It was also probably a good business decision. I mean, they didn't come out of this looking, looking clean. So that's maybe the cynical view of it, but yeah, it's, it's good. Good outcome. David, what do we got coming up next?

• 50:07David Hoffman?

  Coming up next, Arbitrum enables devs to BYOL. What's BYOL, Ryan?

• 50:13Ryan Sean Adams?

  Is that, does that stand for bring your own language, David?

• 50:16David Hoffman?

  No, it doesn't. You just made that up in the show notes, but that's what's happening.

• 50:20Ryan Sean Adams?

  I wanted to say it, guys. Thank you.

• 50:22David Hoffman?

  Exactly. Yeah. Lido V2 brings Lido's path towards decentralization. Maker Dow releases a financial performance report. We're talking about the A16Z governance cartel, as well as a number of other really cool stuff. Stay tuned for all of that very cool stuff and more. But first, a moment to talk to some of these fantastic sponsors that makes the show possible. Uniswap is the largest on-chain marketplace for self-custody digital assets. Uniswap is of course, a decentralized exchange, but you know this because you've been listening to Bankless. But did you know that the Uniswap web app has a shiny new fiat on-ramp? Now you could go directly from fiat in your bank to tokens in DeFi inside of Uniswap.

• 51:04David Hoffman?

  Not only that, but Polygon, Arbitrum and Optimism Layer 2s are supported right out of the gate. But that's just DeFi. Uniswap is also an NFT aggregator, letting you find more listings for the best prices across the NFT world. With Uniswap, you can sweep floors on multiple NFTs and Uniswap's universal router will optimize your gas fees for you. Uniswap is making it as easy as possible to go from bank account to bankless assets across Ethereum. And we couldn't be more thankful for having them as a sponsor. So go to app.uniswap.org today to buy, sell or swap tokens and NFTs.

• 51:41David Hoffman?

  The Phantom Wallet is coming to Ethereum. The number one wallet on Solana is bringing its millions of users and beloved UX to Ethereum and Polygon. If you haven't used Phantom before, you've been missing out. Phantom was one of the first wallets to pioneer Solana staking inside the wallet, and will be offering similar staking features for Ethereum and Polygon. But that's just staking. Phantom is also the best home for your NFTs. Phantom has a complete set of features to optimize your NFT experience. Pin your favorites, hide the uglies, remove the spam, and also manage your NFT sale listings from inside the wallet. Phantom is of course a multi-chain wallet, but it makes chain management easy, displaying your transactions in a human-readable format with automatic warnings for malicious transactions or phishing websites. Phantom has already saved over 20,000 users from getting scammed or hacked.

• 52:26David Hoffman?

  So get on the Phantom waitlist and be one of the first to access the multi-chain beta. There's a link in the show notes, or you can go to phantom.app/ waitlist to get access in late February.

• 52:36Ryan Sean Adams?

  BYOL, David. I'm gonna say it again. Bring your own language. That's what Arbitrum is doing. At least, that's what I interpreted. Can you talk about this big development upgrade? I know some of the folks from Prismatic Labs, now part of the Arbitrum ecosystem, are very excited about it. But what's happening in Arbitrum world?

• 52:54David Hoffman?

  So Arbitrum is announcing Stylus, which is what they are calling a next-gen programming environment upgrade for the Arbitrum chains, Arbitrum 1 and Arbitrum Nova. What is Stylus? Stylus uses WebAssembly to prove all kinds of programming languages and run smart contracts on Arbitrum using languages like Rust, C, C++, Haskell, Python, the move programming languages from Aptos and Sui. Well, now, using Stylus, you can use that on Arbitrum. So the idea here is both Arbitrum and Optimism have gone after what we call EVM equivalents, but that is really optimizing for solidity. What Stylus is, is perhaps like a sidecar, these attachments, plugins, that uses WebAssembly. And WebAssembly lets you use any programming language,

• 53:38David Hoffman?

  which is why Ryan has created this term "bring your own language", which has never been uttered before in the history of ever.

• 53:43Ryan Sean Adams?

  Never.

• 53:44David Hoffman?

  And so this is why Arbitrum is calling this EVM+. As in EVM plus literally every other program.

• 53:51Ryan Sean Adams?

  It's pretty awesome. This has never been done before.

• 53:53David Hoffman?

  This is a very big deal. This is awesome.

• 53:56Ryan Sean Adams?

  If you're not a developer and you don't know that Haskell and in Python and C++ and everything that David mentioned, this is a really big deal. Like, there's been trying to do this for a long time. It compiles all down to the EVM, but you can bring your, you can bring your own language the third time I got that in. So it's pretty cool. I don't know if I'll be able to do it with like, I've got a little bit of HTML experience and you know.

• 54:18David Hoffman?

  Your MySpace days?

• 54:19Ryan Sean Adams?

  Yeah, you think I can, thanks. That's how old I am.

• 54:23David Hoffman?

  Where do you think I learned HTML? It's from MySpace.

• 54:25Ryan Sean Adams?

  On MySpace?

• 54:26David Hoffman?

  Yeah.

• 54:26Ryan Sean Adams?

  I remember we were talking about GeoCities one time though, and you're like, what's GeoCities?

• 54:29David Hoffman?

  I don't know where GeoCities are.

• 54:30Ryan Sean Adams?

  Okay. The OGs, the internet OGs listening, know what GeoCities was. Take my word for it. Yeah.

• 54:38David Hoffman?

  This is how you can date Ryan and date David. That's the line that is drawn.

• 54:42Ryan Sean Adams?

  Yeah, I came into GeoCities, David got in during the MySpace days, and yeah, well, here we are now. There's more going on in the dev ecosystem. That is good news, though, too. Tell me about Starkware. They're open sourcing their prover technology. That sounds like some geek speak. Please, bankless, explain it to me, David.

• 55:00David Hoffman?

  So ZK rollups, which is what Starkware is, require provers. Optimistic rollups require fraud proofs. ZK rollups require provers. And Starkware has announced their plan to open source their prover, which will allow individuals to review the code, detect bugs, transparency, all the stuff. This is one of the critical steps for the decentralization of our layer twos. However, it's kind of the step that is the most esoteric. And if more people didn't know about the prover, that would be kind of okay, because it's kind of niche, but it's still important nonetheless. Notably, they did not actually announce when they would do this. They said that they would open source this at the time that they needed to decentralize StarkNet, but they.

• 55:43Ryan Sean Adams?

  Still a good step?

• 55:44David Hoffman?

  It's kind of an announcement of an announcement. They announced that they're committing to it, which I think we actually kind of assumed anyways.

• 55:50Ryan Sean Adams?

  David, this was really cool. MakerDAO, they released a financial performance report on the protocol, all right? And this is all in IPFS. This is so cool, because it reminds me of like, just like, you know how you look up a 10K or quarterly earnings report for your favorite stock? At least I used to do that back in the day.

• 56:08David Hoffman?

  It's my favorite activity.

• 56:09Ryan Sean Adams?

  Is it really? This is the equivalent. I mean, but like, it's so, it's so cool. Look at these key financial results for the Maker Protocol. This is all on-chain revenue that they're able to kind of generate these reports from and then put it on IPFS. These are unstoppable organizations. That's what a DAO is. It's an unstoppable, I'll put in air quotes, corporation on Ethereum. Doesn't have a jurisdiction. I could go on about this, but what do you think was cool about it?

• 56:35David Hoffman?

  For the podcast listeners who aren't looking at the screen, what we're looking at on screen is a financial statement report that looks exactly like what a boomer would love to see. This is a, this is speaking boomer talk, TradFi talk. This is a financial statement report for the Maker Protocol. Again, hosted on IPFS, which is pretty damn cool, and it is organized with just like, in the, in the way that an Excel sheet and like year ending, year over year, all of these terms, net operating earnings, total operating expenses, total net revenues, blah, blah, blah, blah. All of these things that would make TradFi able to understand what's going on here.

• 57:16Ryan Sean Adams?

  Yeah.

• 57:16David Hoffman?

  Yeah.

• 57:17Ryan Sean Adams?

  By the way, bankless listeners, and for all the baby boomers listening, right, when David says the term "boomer," sometimes he's using that as a term of endearment. And that was, that was such a case.

• 57:27David Hoffman?

  At least half the time, I'd say, yeah.

• 57:28Ryan Sean Adams?

  David calls me a boomer when I do something like-

• 57:32David Hoffman?

  That's because you're getting excited about this.

• 57:33Ryan Sean Adams?

  Or I talk about like taxes, or I talk about like things that adults need to do.

• 57:37David Hoffman?

  Boomer things, yeah.

• 57:38Ryan Sean Adams?

  And so I hope you took that as a compliment. That is just, I'm doing some intergenerational translation here.

• 57:44David Hoffman?

  Yeah, maturity. It's like people that require mature reports about what's going on in DeFi would enjoy this.

• 57:51Ryan Sean Adams?

  Like adult things, right?

• 57:51David Hoffman?

  Adult things, yes.

• 57:52Ryan Sean Adams?

  All right. What do we got?

• 57:54David Hoffman?

  Yeah, a boomer things and adult things are mostly, not all, but mostly synonymous.

• 57:59Ryan Sean Adams?

  Here we go. A16Z, they voted against a proposal to deploy the latest Uniswap iteration on the BNB chain, flexing their token governance power. A lot of people were upset about this. Can you tell us about the controversy and some of the takes here?

• 58:13David Hoffman?

  Yeah, so people are gearing this up as a VC versus VC governance war. So it's A16Z versus Jump Crypto. A16Z backs, and this has to do with the bridge that would, that connects the governance, the uni vote between

• 58:30Ryan Sean Adams?

  Wormhole Bridge?

• 58:31David Hoffman?

  The Wormhole Bridge. So like Wormhole is backed by Jump. A16Z backs Layer Zero.

• 58:37Ryan Sean Adams?

  But there was a, there's a proposal to put Uniswap on BNB. And then there was some controversy over what bridge that they would use. Is this right?

• 58:44David Hoffman?

  This is, well, this is what people are assuming is being fought over. So A16Z wants Uniswap to use the Layer Zero Bridge, which is their product that they invested in. Jump wants Uniswap to use the Wormhole Bridge, which is what Jump invested in. And so now these VCs are fighting over this. I don't actually, I don't think Jump Crypto voted with their tokens, but it was the Wormhole Bridge that was used in this proposal, which A16Z used its governance power to veto. And so the debate about this, which bridge choose is partly about security, because we all know the dangers of Layer One, cross Layer One bridges. A16Z used 15 million of their uni tokens to vote against the Wormhole Bridge for the Uniswap V3 deployment.

• 59:26Ryan Sean Adams?

  Do you have a take on this? Some people are outraged, calling this an A16Z cartel. What's your take?

• 59:31David Hoffman?

  Yeah, so I'll give my take at the end. This is Stephen's tweet, Doge Tosi from The Block. And a quote from the community that he's quoting says, "If A16Z goes against the community vote and tries to tank it, I'd be shocked. That would be truly abhorrent. I don't think that they would go that far." And then he follows up with, you know, narrator, "They went that far, but that far, because that's, that's what they did." However, there is Eddie Lazarin, who I believe is at A16Z, who tweets out this. "Seeing many false claims about A16Z's crypto's voting power in Uniswap Foundation governance, let me clear it up. A16Z, we delegate 40 million votes to outside groups with no conditions on how they vote.

• 1:00:14David Hoffman?

  We vote with 15 million tokens, less than half of what we've delegated to others." So A16Z has given their governance power of the majority of their tokens to others, and they say that they don't have any influence over the vote. And so the A16Z used 15 million of their uni tokens to vote on the proposal that they wanted, and that swayed the vote. The thing is, they were the only ones that really voted for the no, to reject. Almost everyone else voted yes, which is why this is controversial.

• 1:00:41Ryan Sean Adams?

  But I mean, the vast majority of voters, just tokens, didn't vote at all.

• 1:00:45David Hoffman?

  Yes, and yes, that's a very good point. Like a minority of total voters. How do I feel like this is a VC cartel? Yeah, not really. I'm kind of like mad about this whole thing. What's your take?

• 1:00:59Ryan Sean Adams?

  My take is similar. I think it's kind of like, it's token voting. Like, we're all clear on what that means, right?

• 1:01:05David Hoffman?

  Yeah.

• 1:01:05Ryan Sean Adams?

  The protocol states that those with the majority of tokens win the vote. Like, it's literally what it says. I think people need to realize that some of the decentralization and the token voting around these protocols is like, actually not pure decentralization. And the most decentralized part of Uniswap is the code that runs Uniswap.

• 1:01:27David Hoffman?

  Right.

• 1:01:27Ryan Sean Adams?

  That's it. After that, you have varying degrees of decentralization or centralization. This token vote is very similar to the governance mechanism for publicly traded companies or for any pool of capital that has kind of some sort of shareholder vote. So I've never exalted the idea of token vote in my mind and thought that this was somehow some panacea and somehow more decentralized than shareholder voting models. I've always thought that, look, it's just the shareholder voting model that we've ported into crypto. We're not making that part of things anymore decentralized. So am I mad that...

• 1:02:05David Hoffman?

  I'm not sure if it's decentralization that's really the issue here. It's that A16Z win against the community, that everyone else...

• 1:02:12Ryan Sean Adams?

  They are, they are, they have like...

• 1:02:13David Hoffman?

  Yeah, right, they are the community too.

• 1:02:15Ryan Sean Adams?

  They are the community.

• 1:02:16David Hoffman?

  Yeah, uh huh, like, that's the deal. And also, just to give the pro side of the A16Z argument, just another, one more line is like, yo, like, let's not discount how cautious and conservative that we should be when it comes to which cross-chain layer one bridge that we should support. And if A16Z, who has the resources and manpower and technical capacities to vet the security...

• 1:02:42David Hoffman?

  Of cross-chain bridges feel that the wormhole bridge is insecure, which has already been hacked once, by the way. Not to say that their bridge, Layer Zero, can't be hacked, but if that's what their expert opinion is, they have the resources in the world, much more than the community, the retail of the world, to actually vet that bridge. And so I think we should actually appreciate some of their abilities to do due diligence beyond retail.

• 1:03:04Ryan Sean Adams?

  I think we should consider it, for sure. And for those who are saying, oh, look at Ryan and David are now a 16Z apologists. No, that's what we're saying, VC apologists. Like, the ultimate remedy for this is the ability to go fork the Uniswap code and spin up your own Uniswap. The decentralization of Uniswap is that A16Z, no matter how hard they ever tried, cannot shut down the code and turn the thing off or ban you from using Uniswap. That is the decentralization that makes Uniswap actually bankless. And so governance layer aside, I think there are far more ways to preserve the decentralization of protocols that are built on crypto versus the real world. David, what's going on in the NFT world?

• 1:03:49Ryan Sean Adams?

  I see a tweet here from Linkin Park. What are we looking at?

• 1:03:51David Hoffman?

  Yeah, they have a new music video, "Lost", which is getting a ton of attention and hype. The reason why it's relevant is that the beloved artist People Pleaser, the artist that created the Uniswap V3 X times Y equals K NFT movie, which created Pleaser DAO, which has already also done so much stuff. People Pleaser, the artist, created the, directed the music video for "Lost" for Linkin Park. Congrats. People Pleaser is a dear friend of mine. I think she's becoming probably one of the iconic NFT artists of this space. The fact that she's working with Linkin Park, I think, is fantastic. You know what else she's done, Ryan? Before she came into the world of crypto,

• 1:04:33David Hoffman?

  she did the cinematic shorts for Diablo IV.

• 1:04:38Ryan Sean Adams?

  No way.

• 1:04:38David Hoffman?

  Yeah.

• 1:04:40Ryan Sean Adams?

  Diablo has some epic cinematics. It's amazing.

• 1:04:44David Hoffman?

  Yeah, she did. She does killer work.

• 1:04:45Ryan Sean Adams?

  Is there an NFT related to this at all? Sorry, is this gonna be an NFT?

• 1:04:49David Hoffman?

  I actually don't know, actually.

• 1:04:51Ryan Sean Adams?

  Oh, this is all about People Pleaser?

• 1:04:52David Hoffman?

  This is all about People Pleaser, yeah.

• 1:04:54Ryan Sean Adams?

  Okay, alright.

• 1:04:55David Hoffman?

  So I don't believe that there is an NFT, but it's People Pleaser and also her startup Shibuya, who's kind of like a choose-your-own-adventure type of a production studio. So their community does have tokens, NFTs, and using those tokens, you can choose the outcome of what this production company will make their story like. So Shibuya is also part of this music video for Linkin Park. So just an overall success for People Pleaser and Shibuya, a crypto DeFi NFT native team. So that's how it's related.

• 1:05:26Ryan Sean Adams?

  David, so Coffeezilla is somebody who exposes scammers and has been doing a lot of scam exposing in the crypto space lately. This is a tweet from Coffeezilla just earlier this week. "We just tricked Dylan Danis into promoting a fake NFT project. We paid him $1,000 to post. He didn't disclose it was an ad and posted copy that literally spells out S-K-A-M."

• 1:05:51David Hoffman?

  That's not how you spell scam.

• 1:05:54Ryan Sean Adams?

  How do you spell scam, David?

• 1:05:55David Hoffman?

  You spell it with a K.

• 1:05:58Ryan Sean Adams?

  S-C-A-M. That is scam. The word scam, David.

• 1:06:03David Hoffman?

  So he's promoting, he got, again, Coffeezilla told Dylan Danis, "Hey, we'll pay you $1,000 to promote this. It's our NFT project. It's called Sours Candies Are Moonbound." S-C-A-M. And then Dylan just tweets this out. "Check this out. Sours NFT candies are moonbound. #NotFinancialAdvice." And then soursnft.com. What this man did not do, Ryan, if you scroll down, is that he did not go to the website. So Coffeezilla follows up and says, "The entire project is fake, and if you mint it, it takes you to the website devoted to all the scams that he has done in the past." He being Dylan Danis, the guy that's tweeting this out.

• 1:06:42Ryan Sean Adams?

  Who is this guy? Who's Dylan Danis?

• 1:06:44David Hoffman?

  Some MMA fighter, not related, not relevant.

• 1:06:50David Hoffman?

  Made a website that is of all of these scams that Dylan Dennis has promoted. And then they paid him to promote this token mint. And the token mint website was actually this website that was about how all of Dylan Dennis has promoted scams. So the guy didn't even check the link.

• 1:07:07Ryan Sean Adams?

  Wow.

• 1:07:08David Hoffman?

  And he did it for a thousand dollars, Ryan.

• 1:07:10Ryan Sean Adams?

  That's some poor diligence.

• 1:07:11David Hoffman?

  Thousand dollars.

• 1:07:12Ryan Sean Adams?

  How much would you sell your reputation integrity for, David?

• 1:07:15David Hoffman?

  At least $2,000.

• 1:07:19David Hoffman?

  Guy's low palling himself.

• 1:07:20Ryan Sean Adams?

  I mean, what do you think? What do you think of this kind of like honeypot activity by people like Coffeezilla? Like baiting the influencers and getting...

• 1:07:27David Hoffman?

  I think it's awesome.

• 1:07:28Ryan Sean Adams?

  Do it more?

• 1:07:29David Hoffman?

  Yeah. Oh, yeah, please.

• 1:07:30Ryan Sean Adams?

  I, you know, I will say, this is maybe a good time to shill our disclosures. Bankless.com slash disclosures. I actually think we do a pretty good job of this, David, which is...

• 1:07:40David Hoffman?

  I think we have the best disclosures in the crypto industry. I don't know of anyone who has more strict disclosures than we impose on ourselves.

• 1:07:48Ryan Sean Adams?

  If you see somebody that's better, send them to us.

• 1:07:50David Hoffman?

  Let us know, because we'll beat them.

• 1:07:52Ryan Sean Adams?

  Yeah, we'll, we'll one up.

• 1:07:53David Hoffman?

  We'll change it.

• 1:07:54Ryan Sean Adams?

  We will one up your disclosures.

• 1:07:55David Hoffman?

  We'll up the ante.

• 1:07:56Ryan Sean Adams?

  Anyway, you could see the, all the sponsors for Bankless, individual investments that we have, investments of people on our team, disclosures of Bankless LLC. Anyway, it's all there. And I think this is really important to hold people who have influence in society to this type of a standard. And we don't have kind of the regulations or the, you know, the ad police. Not necessarily, I don't necessarily want that either. But I do want disclosure to be a social norm across all of crypto. I think that's really important.

• 1:08:25David Hoffman?

  Hundred percent.

• 1:08:25Ryan Sean Adams?

  David, FTX, tell us about the bad boys. So let's start with SBF and then get to Doquan. What's happening with SBF?

• 1:08:32David Hoffman?

  This is just FTX debtors want their political donations back. So FTX debtors are sending confidential notes, apparently not that confidential, because we heard about them, to the recipients of donations from FTX as lawyers review $93 million in political contributions as part of the bankruptcy case. So they are sending out all of the political figures or entities or whatever.

• 1:08:53Ryan Sean Adams?

  I love it.

• 1:08:54David Hoffman?

  To saying them, hey, that money that FTX donated to you.

• 1:08:58Ryan Sean Adams?

  You should give it back.

• 1:08:58David Hoffman?

  Give it, give it back.

• 1:08:59Ryan Sean Adams?

  Yeah. Wasn't his.

• 1:09:01David Hoffman?

  Politicians who received contributions linked to FTX should return the money by February 28th. Some political groups have already taken steps to return the money. The Democratic National Committee and Senate and House Campaign Committees have set aside a million dollars in cash and to return to bankruptcy lawyers as well as others as well.

• 1:09:17Ryan Sean Adams?

  There is justice in the world, David. This is good news.

• 1:09:20David Hoffman?

  Oh, and this is also, if you don't do this, that just means that FTX is going to go to court to claw back the funds. So this is like volunteer to do this now, or we take you to court to claw it back. So this is like.

• 1:09:33Ryan Sean Adams?

  Do this the easy way, the hard way?

• 1:09:34David Hoffman?

  Do this. Exactly. That's exactly right. Yeah.

• 1:09:36Ryan Sean Adams?

  There was a rumor going on earlier this week, speaking of FTX, that the Super Bowl was going to ban cryptocurrency TV commercials. Now, I don't think that's true.

• 1:09:44David Hoffman?

  Yeah.

• 1:09:44Ryan Sean Adams?

  That said, David, I don't expect to see many, if any, crypto commercials this year. And that was such a contrast. I remember last year at this time, this exact roll up last year. We were excited about anticipating.

• 1:09:56David Hoffman?

  It was, we had an article about it.

• 1:09:58Ryan Sean Adams?

  Right. And just after it, and in fact, I hate to say this now, it sounds terrible, but you gotta give FTX credit. At least whoever did their ads, they actually had the best ad from last year.

• 1:10:10David Hoffman?

  I mean, it's on brand for the scam to have the best one. Like, they're all marketing, right?

• 1:10:14Ryan Sean Adams?

  I mean, it was such a well-done scam, wasn't it? I mean, you can't, like, SPF pulled that part of it off. Anyway, but there's Coinbase, there was, who else? There was Etoro. There's a whole bunch of them last year. None of that this year.

• 1:10:26David Hoffman?

  Budweiser had shout-outs to crypto projects. They had the Nouns goggles, which was the most, what would I call, tasteful? And just well-researched way of putting crypto into your, your.

• 1:10:38Ryan Sean Adams?

  I don't think we're gonna see.

• 1:10:39David Hoffman?

  It was a way that like, wouldn't offend normies because they don't know what those goggles, the noggles were, the Nouns goggles. But all the crypto people knew.

• 1:10:46Ryan Sean Adams?

  This is for those in the US, if you're watching the Super Bowl this weekend, if you notice a Super Bowl commercial about crypto, then tweet Bankless. Want to hear about them. If you see anything subtle.

• 1:10:56David Hoffman?

  The Super Bowl's this weekend?

• 1:10:58Ryan Sean Adams?

  Uh, isn't it?

• 1:10:59David Hoffman?

  Uh, I, I don't know.

• 1:11:01Ryan Sean Adams?

  Look, I, look, neither of us know, which is maybe tells you something. Uh, maybe it's another fact check. It's sometime in February.

• 1:11:07David Hoffman?

  Oh, it is? Oh, my God. It's the 12th.

• 1:11:09Ryan Sean Adams?

  Yeah.

• 1:11:09David Hoffman?

  What day is that?

• 1:11:10Ryan Sean Adams?

  Well, you got this party planned?

• 1:11:11David Hoffman?

  I had no fucking idea.

• 1:11:14Ryan Sean Adams?

  Big sports fans over here.

• 1:11:15David Hoffman?

  I have no idea.

• 1:11:16Ryan Sean Adams?

  But you, do you know where Do Kwon?

• 1:11:17David Hoffman?

  But the rumor was, it was that crypto ads are, crypto ads in the Super Bowl are banned. They're not banned. Two companies.

• 1:11:27Ryan Sean Adams?

  They just don't have any money?

• 1:11:28David Hoffman?

  Yeah, all the, all the money fell through. So two other companies were on the one yard line, they said, quote from the article, before the collapse of FTX. And then that created the NFT, the NFL motivated to look elsewhere for their ads. And so it's not banned. It's just like all the deals fell through.

• 1:11:44Ryan Sean Adams?

  Can we find this guy though? Do Kwon? We talked about SBF. Where's he?

• 1:11:49David Hoffman?

  Unknown. And that is what Korean officials are, who they're looking for him. So Korean officials traveled to Serbia, to the far reaches of Serbia last week to help seek out Do Kwon, who was a fugitive. So a long time ago, an arrest warrant was issued. Yeah, dude, he's still tweeting, man.

• 1:12:08Ryan Sean Adams?

  They can't like somehow track an IP address and like figure out?

• 1:12:13David Hoffman?

  I don't know, man.

• 1:12:14Ryan Sean Adams?

  Are they trying? How hard are they trying?

• 1:12:16David Hoffman?

  There's an international red notice out for his arrest, which means that like, yo, all governments who are anything, if you find this guy, arrest him. So people are, are going as far as Serbia to find Do Kwon. Like, there's only a matter of time. Like, we're gonna, we're gonna get this guy. Do Kwon's going to jail.

• 1:12:35Ryan Sean Adams?

  Yeah, real small world. Hard to hide. Kyle Davies is also hiding, David. What's this headline?

• 1:12:42David Hoffman?

  Yeah. So a few weeks ago, we covered the Twitter subpoena because Kyle Davies was also still tweeting. And so since they couldn't find the man, they just tweeted out his subpoena because they knew that he was still tweeting. And so a quote from this article, a quote from one of the attorneys says, "He is without question aware of the subpoena, having been tagged in 41 replies and 64 retweets," and one of those was mine, "and has once again chosen to ignore his duties to Three Arrows Capital," says Russell Crumpler and Christopher Farmer, who are overseeing the bankrupting training firm.

• 1:13:16Ryan Sean Adams?

  When we talked about it? Yeah. Well, Kyle Davies was taking interviews like at least a couple of months ago. He, remember, he's raising. To build an exchange.

• 1:13:25David Hoffman?

  I mean, he's just doing this blatantly. He's like, hey, all of the charges that I'm probably guilty for, I'm not going to answer to. Meanwhile, I'm going to stay in Dubai and raise for my new fund.

• 1:13:39Ryan Sean Adams?

  And also, do you want to invest in my startup?

• 1:13:41David Hoffman?

  Did I share my DMs with him with you? He messaged me, dude. Kyle, I'm going to pull up my DMs right now on my phone. Hold on. Kyle Davies, when did he message me? Monday, January 30th. Hey, David, hope you're well. Sue and I are launching Open Exchange soon. It would be great to get your feedback if you're free this week. What does Kyle Davies expect from me, dude? I am not your friend.

• 1:14:02Ryan Sean Adams?

  I hope you told him you were free and that I would love to do a show.

• 1:14:06David Hoffman?

  I didn't respond.

• 1:14:07Ryan Sean Adams?

  Well, it's not too late. Go ahead. I'd be curious. I would. I'd just be like, Kyle.

• 1:14:14David Hoffman?

  So I was joking with a few friends. It's like, yeah, I'll do this, but I'm also bringing on five of my friends and we're going to roast you as you talk. But I don't think he'd be interested.

• 1:14:22Ryan Sean Adams?

  Yeah, that's probably not appealing to him right now. I think he wants to pitch his company. Meanwhile, this is going on. Consensus is fighting to get staking tax-free. Essentially, they're backing a lawsuit against the IRS over taxing staked crypto. And here's the arguments. Basically, some appellate's are arguing the position that staking rewards should not be considered taxable income because there's no employer that's doubling them out. It's a protocol. It's not employer. It's just code. They should instead be considered effectively self-generated or created property. And there actually is some precedent for this, David. Similar to a farmer who grows crops,

• 1:15:03Ryan Sean Adams?

  staking rewards are created by the protocol to incentivize participating in providing security for the protocol. So created property is not taxed until sale. Right now, the tax treatment of a staked income, most people assume, or of staked ether or any asset, most people assume is just as income. So you receive, it has income and it's taxable income the same way a salary might be in your job. Well, this argument that's happening in the court system right now is that it should be treated more like growing crops. And when you grow more crops, those aren't, that's not a tax at the end. It remains to be seen whether this holds up in court, but that would be incredible if it did.

• 1:15:45Ryan Sean Adams?

  That would mean all of the staked, all of the staked revenue that people receive. is not actually taxable at the time they receive it.

• 1:15:54David Hoffman?

  I love those words.

• 1:15:55Ryan Sean Adams?

  Yeah, just when you sell, just when you sell.

• 1:15:57David Hoffman?

  Yeah.

• 1:15:58Ryan Sean Adams?

  We'll see. I'm rooting for him.

• 1:16:00David Hoffman?

  That makes too much sense.

• 1:16:01Ryan Sean Adams?

  David, it's ship season. What are we shipping?

• 1:16:03David Hoffman?

  Ship season.

• 1:16:03Ryan Sean Adams?

  What do we got?

• 1:16:04David Hoffman?

  Oh, my God, so much. Lido V2, Path Towards Decentralization, a new architecture for Lido that is supposed to be the architecture that allows for Lido to accept anyone to be a validator in the Lido system. It is a big step, is one of the biggest steps that Lido has needed to take for a long time to open up Lido to more permissionless validation. So anyone, not just a permission set of validators, can join the Lido DAO. This is also where technologies like DVT come into play. And this is also how Lido can become more modular and composable. So that is really cool. Congratulations.

• 1:16:38Ryan Sean Adams?

  This makes Lido a bit more like Rocketpool, yeah?

• 1:16:41David Hoffman?

  In that direction. So this is much more similar to Stakewise's design philosophy, but overall, the same ethos is applied here. And so we like this. This is more decentralization from what has previously been by some hardliners in the community. Fixes Lido's too centralized nature. So there's that. Ave Go, G H O, is their stablecoin, is now on the Gorley testnet. So another decentralized stablecoin is coming to play to follow after makers die. Curves stablecoin is also coming soon. There's Elements Hyperdrive. Element is an interest rate vehicle inside of DeFi, totally permissionless. It has previously been plagued by having to pick a very specific term

• 1:17:24David Hoffman?

  and having to fragment liquidity across all their different pools. Hyperdrive is fitting into this theme that I've been noticing, Ryan, where a lot of these DeFi apps that have to segment liquidity and pick different terms, like LiveRefine's compels into this camp.

• 1:17:38David Hoffman?

  They have found a way to put and pool all liquidity together and allow for any term length for any sort of market. And so much more, just much a better, stronger evolution of what Element is trying to do. Congratulations to Element. There is Infinity Pools, which Dan Elitzer, who is, I got one of these giga-brains when it comes to just like crypto economic on the app. App layer protocols. So Infinity Pools is out there and Dan Elitzer says this is by far one of the most interesting things I've seen built on top of UNEV3. Any asset, unlimited leverage, no oracles, no liquidations, no counterparty risk. Nailing the UX will be tricky, he says, but this design is this design is a very cool breakthrough in what I thought was

• 1:18:19David Hoffman?

  not possible in DeFi. I have not yet looked into Infinity Pools, but I definitely want to because Dan said something like this, I pay attention. Mean Finance, Mean Finance is a dollar cost averaging tool in DeFi. So dollar cost averaging without a bank have introduced their meta aggregator. So you know all the Decks is Ryan, unit swaps, sushi swap, etc. Well, they have Dex aggregators, right? Like matcha and one inch. Well, Mean Finance is a Dex aggregator aggregator. So it's it's recursing one more time. If you want to connect to MetaMask and try this out. Yeah,

• 1:18:56Ryan Sean Adams?

  So I just connect to my MetaMask wallet here. Let me do that. Connect. And this will allow me to dollar cost average in to crypto position. So I could

• 1:19:05David Hoffman?

  Mean Finance. So that is the invest tab over there on the left. Yes. But you can also swap now with Mean Finance's Dex aggregator aggregator.

• 1:19:15Ryan Sean Adams?

  This is awesome. And this is, you know, in our opinion, the the most foolproof way to build positions in crypto is to dollar cost average over time.

• 1:19:24David Hoffman?

  Yeah, I believe Mean Finance is on multiple networks, including Polygon, I think.

• 1:19:29Ryan Sean Adams?

  It's fantastic.

• 1:19:30David Hoffman?

  So rare. And we're not done yet with the ship season. So rare. Partners with the Premier League, which I think is a big deal. Football fans, check me on this. Premier League sounds pretty premier. So from the article, football fans from around the world can now collect, buy, sell and trade officially licensed digital cards featuring every player from across the Premier League's 20 clubs. I'm assuming this is like Well, the premier league of football. I'm assuming this is a big deal for football.

• 1:19:57Ryan Sean Adams?

  I think it is a big deal, David. I definitely do.

• 1:20:00David Hoffman?

  You know, I am striking out on my sports stuff.

• 1:20:03Ryan Sean Adams?

  This is the tech behind this is Starkware, right? So it's ZK technology behind this, which is the thing that you and I geek over about football. The sports stuff is kind of lost on us.

• 1:20:14David Hoffman?

  It's a means to an end.

• 1:20:17Ryan Sean Adams?

  David, with all this shipping going on, that means there's been a lot of building and to build, we need people in crypto. The Bankless Jobs Board is popping. Been a couple of weeks since we told you about it, but remember, bankless.pallet.com is where you can see some jobs. I'm going to shout some out. Uniswap Labs, they're looking for a senior software engineer of a protocols. Bankless, we need a social growth lead.

• 1:20:39David Hoffman?

  That's non-technical and also at Bankless, which is dope.

• 1:20:41Ryan Sean Adams?

  Needs a producer. We want a growth marketer, senior backend typescript engineer and investment associates. A lot of things we're hiring for.

• 1:20:47David Hoffman?

  Yeah, Bankless is hiring.

• 1:20:48Ryan Sean Adams?

  Wants a director of engineering. Adidas? Are you kidding me?

• 1:20:51David Hoffman?

  Wait, we have Adidas on the jobs board?

• 1:20:53Ryan Sean Adams?

  Yeah.

• 1:20:54David Hoffman?

  Global head web three strategy and planning? Bullish.

• 1:20:57Ryan Sean Adams?

  Oh, my God, I might.

• 1:20:58David Hoffman?

  So bullish.

• 1:20:58Ryan Sean Adams?

  I could do this. Uh, pre, po, a senior web three front end engineer. There's a whole bunch more. Go check it out. Bankless.pallet.com/jobs. David, what's coming up next?

• 1:21:09David Hoffman?

  Coming up next, we got some questions from the nation. We're going to talk about ZK EVMs as well as account abstraction, which has dominated my brain lately. And then we've got the takes of the week as well. So stay tuned for all of that and more. But first, a moment to talk about some of these beloved sponsors that help pay for all of the goddamn content and all the conferences that I go to at the Bankless Nation. Thank you.

• 1:21:30Ryan Sean Adams?

  Hey, Bankless Nation. If you're listening to this, it's because you're on the free Bankless RSS feed. Did you know that there's an ad-free version of Bankless that comes with the Bankless Premium subscription? No ads, just straight to the content. But that's just one of many things that a premium subscription gets you. There's also the Token Report, a monthly bullish, bearish, neutral report on the hottest tokens of the month. And the regular updates from the Token Report go into the Token Bible, your first stop shop for every token worth investigating in crypto. Bankless Premium also gets you a 30% discount to the permission.

• 1:22:02David Hoffman?

  Conference, which means it basically just pays for itself. There's also the airdrop guide to make sure you don't miss a drop in 2023. But really, the best part about Bankless Premium is hanging out with me, Ryan, and the rest of the Bankless team in the Inner Circle Discord, only for premium members. Want the alpha? Check out Ben the Analyst's DGEN pit, where you can ask him questions about the token report. Got a question? I've got my own Q and A room for any questions that you might have. At Bankless, we have huge things planned for 2023, including a new website with login with your Ethereum address capabilities. And we're super excited to ship what we are calling Bankless 2.0 soon TM. So if you want extra help exploring the frontier, subscribe to Bankless Premium. It's under 50 cents a day and provides a wealth of knowledge and support on your journey west. I'll see you in the Discord.

• 1:22:47David Hoffman?

  How many total airdrops have you gotten? This last bull market had a ton of them. Did you get them all? Maybe you missed one. So here's what you should do. Go to Earnify and plug in your Ethereum wallet, and Earnify will tell you if you have any unclaimed airdrops that you can get. And it also does PoApps and mintable NFTs. Any kind of money that your wallet can claim, Earnify will tell you about it. And you should probably do it now because some airdrops expire. And if you sign up for Earnify, they'll email you anytime one of your wallets has a new airdrop for it, to make sure that you never lose an airdrop ever again. You can also upgrade to Earnify Premium to unlock access to airdrops that are beyond the basics and are able to set reminders for more wallets. And for just under $21 a month, it probably pays for itself with just one airdrop. So plug in your wallets at Earnify and see what you get.

• 1:23:30David Hoffman?

  That's E A R N I dot F I. And make sure you never lose another airdrop.

• 1:23:36Ryan Sean Adams?

  Guys, we're back. Questions from the nation. Here's one from faro.eth in the Bankless Citizen Discord. As ZK EVMs rapidly grow to new ecosystems on top of Ethereum, could you outline the major selling points for most prominent projects like Starknet and ZK Sync? He said, "As David, you've recently been to Israel for Starknet. So tell us about the major selling points of Starknet, of ZK Sync, maybe even of Scroll if you're feeling extra ambitious."

• 1:24:05David Hoffman?

  Yeah, so it's really just, there's a few areas, a few frontiers of innovation that is specifically being hosted by the ZK rollups specifically. Why ZK rollups? Because all the optimistic rollups out there, optimism, Arbitrum are trying to be EVM equivalent, EVM Ethereum equivalent, which means there are certain things that are not enabled. Ethereum does not have this thing called account abstraction enabled, which prevents all of our optimistic rollups to have what we call smart contract wallets, which are something I'm going to explain in the next question. But the frontier of account abstraction and smart contract wallets are absolutely happening on ZK rollups. And so we'll talk about smart contract wallets in a second, but eventually, everyone's going to have

• 1:24:46David Hoffman?

  a smart contract wallet. And that is starting on the ZK rollups. Argent, Bankless listeners might be familiar with, also Bravos as well. There's some other smart contract wallets that are out there. That's a big one. Massive, massive field of innovation and opportunity there. There's also the world of on-chain gaming. We all know the term web three gaming, and this is generally known as like gaming, but with assets. That's different and much smaller in my mind of an opportunity than on-chain gaming, which is where all of the logic goes on-chain. Why? Why not? You can put more composable components of your game on-chain and allow that like metaverse, if you will, to be organically built. And so

• 1:25:31David Hoffman?

  this is a very limited example, but say like your chess moves go on-chain, like knight to knight to F3, great move. And that can be composed upon for whatever goddamn reason that you can think of. And so just use your imaginations. Your like physical location in Minecraft is stored on-chain, and that can trigger if this then that statements. And so more stuff on-chain produces games that we can't even think about. And it's the ZK rollup technology that the insane levels of compression that ZK rollups have enables stuff like this to happen. So

• 1:26:04Ryan Sean Adams?

  So you get more compression versus optimistic rollups. So that's what separates ZK versus optimistic rollups. Now we have ZK EVMs. But the difference between like Starkware Versus something like Scroll. My, my high level, you know, take on it is we have like four main ZK EVM types of ecosystems. One is the Starkware ecosystem, another is ZK EVM from Matter Labs. Another is what Polygon is doing with Hermes that they acquired. And the fourth is Scroll. Now, I think on the far side of the spectrum, the most EVM equivalent, I probably put Scroll.

• 1:26:41David Hoffman?

  Correct.

• 1:26:41Ryan Sean Adams?

  And the least EVM equivalent, that is mirrors the Ethereum main net, virtual machine environment. You could just port code from here to here is probably Starknet. They use even a different

• 1:26:52David Hoffman?

  Yes.

• 1:26:53Ryan Sean Adams?

  Language. They use

• 1:26:54David Hoffman?

  Cairo.

• 1:26:55Ryan Sean Adams?

  Cairo rather than Solidity. And, and then ZK Sync and Polygon.

• 1:27:02David Hoffman?

  Somewhere in between.

• 1:27:03Ryan Sean Adams?

  Yeah, it's somewhere in between. That's sort of how I think about them. But it's like, you know, from a high level, if you're just sort of a user, you don't see a lot of the trade offs here. It's, I think a lot of the trade offs are going to come from actually developers and the builders. And it will remain to be seen which of these ZK EVMs really hit product market fit and really nail it. And what communities they attract. And it's still super early to call any winners or to even understand which of these ZK EVMs, what niches they're going to exist in and dominate in.

• 1:27:36David Hoffman?

  Yeah, I think that's right. And I think they're all going to find product market fit in their own particular ways. Each one like optimism and Arbitrum are differentiating in what's being built on top of them. And I think they're all, they're all viable. They're just optimizing for different things and along with their be relevant BD teams.

• 1:27:53Ryan Sean Adams?

  At this stage, use them all. Try them out and see what you like. Here's another question from Killjoy from the Bankless member Discord as well. Hey guys, I've heard you mention account abstraction. There you go, David. Teed me up.

• 1:28:04David Hoffman?

  There we go.

• 1:28:04Ryan Sean Adams?

  A lot, but I'm wondering if you can explain it in more detail. I'm not sure how to grasp what it unlocks in Ethereum that can't already be done with tools like Nosa Safe. Nosa Safe, of course, is a multi-sig wallet, fantastic wallet. We use it at Bankless all of the time. Everyone uses this. What's different? Why is account abstraction better? You mentioned smart contract wallets. Is that part of the, the puzzle here?

• 1:28:26David Hoffman?

  Yeah, so you said NOSA Safe is a multi-sig wallet. Technically, it's actually a smart contract wallet. And what that smart contract does, Ryan, is enable multi-sigs. So it's like semantics, but important. It is a smart contract wallet and that smart contract is meant to be a multi-sig wallet. Account abstraction is this term that is, it's one of these terrible words that we come up with in crypto and doesn't really help anyone understand it. But account abstraction enables smart contract wallets on the Ethereum Layer One more natively. NOSA Safe has kind of had to brute force it in a way. And so what is a smart contract wallet? What is account abstraction? Like I said, account abstraction enables smart contract wallets to exist.

• 1:29:10David Hoffman?

  And it is perhaps like an EIP or technical standard that needs to be embedded in the actual protocol of a blockchain in order for native smart contract wallets to exist. So, like I said earlier, externally owned accounts, which are like public addresses, public accounts, public wallets that are externally owned, externally being like a private key, which is external to the Ethereum protocol. Again, another terrible phrase, another terrible word that this crypto came up with. But to apply a metaphor here to get you to understand what the hell I'm talking about. If Bitcoin is to externally owned accounts, Ethereum is to smart contract wallets. Currently, an externally owned account is a dumb input-output-only, very primitive wallet.

• 1:29:52Ryan Sean Adams?

  And let's just be clear, whenever you're saying externally owned account, that is probably the ETH address that you have today.

• 1:29:58David Hoffman?

  Probably. Do you use a MetaMask? Do you use a Ledger? Do you use a Trezor? Do you use Coinbase wallet?

• 1:30:04Ryan Sean Adams?

  Do you have a private key?

• 1:30:05David Hoffman?

  Do you have a private key?

• 1:30:06Ryan Sean Adams?

  These types of things. That means, these are all externally owned accounts, right? And that's what you're saying?

• 1:30:12David Hoffman?

  Yes.

• 1:30:12Ryan Sean Adams?

  Okay.

• 1:30:13David Hoffman?

  And so Ethereum is smart contract wallets. Bitcoin is like externally owned accounts. So that's why this is kind of so hard to explain, because a smart contract wallet is like a smart contract. It's a Turing-complete wallet, where your Ledger or MetaMask is just, it just signs messages. Your smart contract wallet can do anything. And so you can input any bit of code that you want. You can input rules. You can make it expressive. And so the UX upgrades that smart contract wallets will bring to crypto are going to eliminate so much of what makes crypto wallets difficult and unintuitive. And account abstraction unlocks the ability to have smart contract wallets like enshrined into the protocol rather than having to be built on on top of it.

• 1:30:55Ryan Sean Adams?

  Do you know how I would explain account abstraction and just like the dumbest possible way is like, you guys know how hard it is to use crypto wallets? Even good ones like like MetaMask, for instance, or Ledger. It's still really hard to use them. Account abstraction will make a crypto wallet like Venmo, as smooth as a Venmo, or maybe if you're in Europe, like a Revolut, like the fintech. Fintech apps where you just log in, you get your face ID, you unlock it, you can set limits, you can transfer out, you're not paying outrageously high gas fees and hitting. Clicking sign transaction, sign transaction. Oh, my God, did I just send the wrong account?

• 1:31:33Ryan Sean Adams?

  It will smooth all of that out and to make crypto wallets look like fintech. That is the bottom line. And we can't unlock account abstraction. On Ethereum main net today, right?

• 1:31:44David Hoffman?

  That we need an EIP.

• 1:31:45Ryan Sean Adams?

  Needs to be implemented first, but we can start in the layer two environment. And that's what you're saying is is ZK of rollups are really doubling down, tripling down on account abstraction wallet. If you've ever used Argent, for instance, on where's that deployed? Is that ZK sync right now?

• 1:32:06David Hoffman?

  So Argent has two. They have Argent, which is the Ethereum main net smart contract wallet, which as soon as Ethereum left its one way gas fee paradigm.

• 1:32:15Ryan Sean Adams?

  It was just not sustainable.

• 1:32:16David Hoffman?

  Broke so bad because we don't have account abstraction on the layer one. So while they've been maintaining their Argent wallet at the layer one, they've really been focusing on what they're calling Argent X, which is their ZK. ZK rollup smart contract wallet, which is dominated by on the Starknet, uh, Starknet layer two.

• 1:32:36Ryan Sean Adams?

  Yeah, and that that's going to be more what the experience you know will be for the everyday users. This is how we mainstream crypto.

• 1:32:43David Hoffman?

  Right. I don't have this tweet in here, but I tweeted tweeted this out like you are not using your imagination big enough to understand how big of a deal smart contract wallets are. It's a zero to one moment in wallets. Ethereum was like, okay, let's put software into our tokens, software into our money. That's what ERC 20 token is like asset plus software. That's what smart contracts are. That makes it so cool. That's why we love it. We have not yet had that zero to one moment for our wallets. Our wallets are still like just simple Bitcoin input outputs. We are not having the Bitcoin to Ethereum moment about our wallets yet in the Ethereum world.

• 1:33:20Ryan Sean Adams?

  Yep, that's right. Huge improvements coming and getting closer. David, some takes of the week. I'll read yours. All blockchains are illegitimate in their early days. They have unknown founder alignment, poor token distribution, highest risk of bugs and exploits, unknown economic sustainability, legitimacy is only gained by proof and time. David, you saying a new chain has to earn it?

• 1:33:43David Hoffman?

  New chain has to earn it. Yeah. And actually I have a follow on tweet if you want to keep on going.

• 1:33:47Ryan Sean Adams?

  I'll go. This is why incumbent blockchain communities haze the newer ones. Don't trust them until they prove they're here for the long term. Bitcoiners haze the Ethereum's, Ethereum's haze the Solonians. Did I say that right? So on and so forth. It's not maximalist behavior. It's a healthy immune response.

• 1:34:06David Hoffman?

  How do you feel about that take? Some people said that that was a pretty spicy take.

• 1:34:09Ryan Sean Adams?

  I completely agree. I hundred percent agree with it. This is called the social layer is an immune system. If your social layer of your chain doesn't have an immune system, what happens? Imagine if your body didn't have an immune system, David. You had no white blood cells.

• 1:34:23David Hoffman?

  Get eaten alive.

• 1:34:24Ryan Sean Adams?

  You get eaten alive by viruses, by malignant cells, by cancers. And those, all of those types try to enter the the social layer in crypto, like scammers and grifters. So you have to have some resistance against them. That said, David, I think like. Protocols like Bitcoin, projects like Bitcoin can develop a, an unhealthy immune system, call it immune system disorder, where the white blood cells just attack everything.

• 1:34:49David Hoffman?

  Autoimmunity, yeah.

• 1:34:50Ryan Sean Adams?

  Yeah, and that's, that's a big problem, an autoimmune disorder. Is that what you meant here?

• 1:34:56David Hoffman?

  I wasn't talking about the autoimmunity, but yes, the natural, like, all blockchains are illegitimate on day one, and they slowly become legitimate over time. And I'll kind of give like, if you are a single-cycle blockchain, you have not yet earned your stripes. You only earn your stripes by coming out of the inevitable bear, inevitable bear market that you're gonna go through, and proving to the crypto world that you are able to make it through a bear market. Because if you haven't made it through a bear market, you're not legitimate, in my mind.

• 1:35:26Ryan Sean Adams?

  David, you know, I, I apply this to people now, too.

• 1:35:29David Hoffman?

  Yeah, yeah, it's a good take.

• 1:35:31Ryan Sean Adams?

  Like, I, I just, I, I don't, does this sound bad? Like, I don't trust people who haven't been through a cycle in crypto.

• 1:35:39David Hoffman?

  Who, who didn't make it through one single cycle in crypto in their last cycle? Three Ours Capital got, got, made all their money, starting in 2019 and 2020, and then reaped, reaped it all, like, just harvested so much in 2021, and then came crashing down in 2022. FTX was not here last cycle, came crashing down in 2022. Terra Luna, a single-cycle blockchain, did not, it crashed in April of 2022. It didn't even make it halfway.

• 1:36:05Ryan Sean Adams?

  Don't trust the singlecyclers.

• 1:36:07David Hoffman?

  Singlecyclers.

• 1:36:08Ryan Sean Adams?

  And not to say that, like, if you're a singlecycler, you're sharing that, and you're like, oh, they're elitists, they, like, no, you can, you can become, you have to stay here for a while.

• 1:36:16David Hoffman?

  You have to prove your stripes.

• 1:36:18Ryan Sean Adams?

  Proof and time. Legitimacy is only gained by proof and time. That's what you said here. I apply that to people, too. I apply that to projects. I apply it to exchanges. That's why we like working with Kraken. That's why we like other exchanges like Coinbase.

• 1:36:29David Hoffman?

  How many cycles has Kraken been through?

• 1:36:30Ryan Sean Adams?

  A long time.

• 1:36:31David Hoffman?

  Literally all of them, every single cycle.

• 1:36:34Ryan Sean Adams?

  They haven't gotten solvent yet. I mean, that's like Lindy effect there. And, uh, yeah, so I, I agree with that take, David, and just, I would apply it to people, too.

• 1:36:42David Hoffman?

  All right, I guess we're just reading our own tweets out.

• 1:36:44Ryan Sean Adams?

  Speaking of people, yeah, this, this section has become, read our own tweets. Um, well, why don't you read it, so it's not that?

• 1:36:52David Hoffman?

  This guy Ryan Sean Adams tweets out, "Not everyone's opinion on crypto is valuable. A lot of smart people in other areas have absolutely no idea what they're talking about when it comes to crypto. Don't listen to them." Man, are we doing elitist takes this week or what?

• 1:37:05Ryan Sean Adams?

  David, I got fooled by this in my early days. I thought like, if you're an expert in something, then you must like, know what you're talking about with crypto. It took me a while, honestly, in my crypto journey to like, start trusting my own instincts and my own opinions. But I've, I've definitely come to that place. And I, I hope I don't overcorrect and be like, "I know freaking everything."

• 1:37:22David Hoffman?

  Right, yeah.

• 1:37:23Ryan Sean Adams?

  And like, there's, there's obviously that failure mode. But, I mean, I was looking at this last week, right after the last roll up. Charlie Munger, notable investor, I've admired this guy, his investment takes, he's like a Warren Buffett type, wrote an opinion commentary, "Why America should ban crypto. It isn't currency, it's a gambling contract with near, with a nearly 100% edge for the house." He goes on, Charlie talks about the government of China, the communist government of China actually doing the right thing in banning cryptocurrencies because they wisely concluded that they would provide more harm than benefit. He thinks the Chinese communist leaders had

• 1:38:04Ryan Sean Adams?

  splendid common sense. He says, "Obviously, the US should now enact new federal laws that prevents crypto from..." He's calling for a ban on crypto. And do you know what, David? This guy's opinion doesn't matter at all. Just because he's an expert in other domains, maybe in stocks, maybe that sort of investing that he knows about, he knows nothing about what we're trying to do here and about the, like, the crypto movement or about these assets. He knows absolutely nothing about it. And so, if you're hearing his opinion, you're going like, "Whoa, what does Charlie Munger think?" Or some notable economist with a Nobel Prize.

• 1:38:45David Hoffman?

  Warren Buffett, it's like Bitcoin is trash.

• 1:38:48Ryan Sean Adams?

  Have they used Uniswap? Have they looked into the fundamentals behind DeFi protocols? Do they understand why Ethereum is worth greater than $0? Do they understand why Bitcoin is worth greater than $0? If they don't, if they can't answer those questions, don't listen to them.

• 1:39:07David Hoffman?

  Have they been through a crypto cycle? No, they haven't even started. Yeah, my first introduction to this was John Pfeffer. You know John Pfeffer, right?

• 1:39:17Ryan Sean Adams?

  I remember John Pfeffer, yeah.

• 1:39:18David Hoffman?

  He wrote this paper about how Ethereum Ether. The velocity of Ether is too high to be treated as a currency because it's all gas.

• 1:39:27Ryan Sean Adams?

  We'd never accrue value.

• 1:39:28David Hoffman?

  Never would accrue value. And when I read that, I took that personally. And that is one of the main motivations when I was reading that paper to develop the triple point asset thesis, which is one of the earliest bankless thesis about how Ether, no, is it not just this velocity gas coin? It is actually the world's greatest monetary asset that humans have ever produced.

• 1:39:51Ryan Sean Adams?

  Same here, but I remember reading that paper. He was very persuasive, wasn't he?

• 1:39:57David Hoffman?

  Oh, no, I thought I didn't believe it at all. I was like, this doesn't make any sense.

• 1:40:01Ryan Sean Adams?

  It didn't make sense to me, but also I was like, but he's a seasoned investor.

• 1:40:06David Hoffman?

  Yes, yes.

• 1:40:07Ryan Sean Adams?

  Listen to these arguments, listen to like the white paper and the language surrounding it and the expertise and the credentialism flowing out of it.

• 1:40:14David Hoffman?

  Dude, this is where I personally got over like imposter syndrome where I was like, this doesn't make any sense. I'm going to write a thesis that counter argues this. And I'm just a no one, but I have differing ideas and I think I'm right. And then I think I have been proven right.

• 1:40:31Ryan Sean Adams?

  Yeah, well, I guess the only reason you've actually earned some legitimacy, David, is proof and time. Because legitimacy is only gained it by proof and time.

• 1:40:41David Hoffman?

  Thank you, Sher.

• 1:40:42Ryan Sean Adams?

  So it takes some time.

• 1:40:44David Hoffman?

  Do you know the plank principle?

• 1:40:46Ryan Sean Adams?

  What's the plank principle?

• 1:40:47David Hoffman?

  It's pretty, it's really savage. It's paraphrased as a society progresses one funeral at a time.

• 1:40:54Ryan Sean Adams?

  Well, this is this is very, very much true of like, science. Isn't this what people say about science, right? Scientists clinging to like, old ideas and the new generation has to totally disrupt it.

• 1:41:03David Hoffman?

  Yeah, like Munger, Buffett, all of these like, very old, older than boomer like, era people are like, crypto is bad. Like, well, yeah, you also missed the tech boom, Warren Buffett. So, I'm not listening to you.

• 1:41:16Ryan Sean Adams?

  Yeah, well, someday, we will be there, David. And when that day comes, no longer listen to us, I suppose.

• 1:41:21David Hoffman?

  There will be some, some younger generations talking about how dumb we are.

• 1:41:25Ryan Sean Adams?

  I'm hoping. I'm trying to preserve this open mindedness as I get older. Maybe preserve some of that wisdom. David, what, what, what, what makes you bullish this week?

• 1:41:33David Hoffman?

  Well, we went through all of what was going on in ship season. And I had this take last week. Markets are being resistant to bad news. And even though we are down on the week, we are down to 1620 Ether price and $22,000 Bitcoin price. Like, we're still up pretty damn good on the year. Like, we started the year at like, $1,100 or $1,200 Ether. And we had this bad, bad choke point news, which does threaten very much how this crypto world works. We've only dumped a little bit, dumped 2.5% since that news came out. So I'm calling that still resistant to bad news. And I think, Ryan, if crypto prices and tokens bounce back from this, and go back into that, the

• 1:42:18David Hoffman?

  TA that I was talking about at the very beginning, which we don't usually do, and we go back up to like, the high 1600s, maybe 1700s, that is the market shrugging off bad news and being very perceptive to bullish news. So that makes me bullish. As if we can shrug this off, that's so awesome. And 2023 shipping so far has been like, an order of magnitude greater than what we saw in 2019. And so like, just what is being built right now, the fundamentals that DeFi protocols are going through, is so bullish, man. Like, this is, this is what 2019 felt like. It's like, you are watching the fundamentals grow at an accelerating pace around you. Meanwhile, just like everyone else, that's not in crypto is not paying attention anymore.

• 1:43:03David Hoffman?

  That's what I'm bullish on.

• 1:43:03Ryan Sean Adams?

  I agree. You know, I would say I probably got nothing to add to that because like that was my, that was also my take. It's ship season.

• 1:43:11David Hoffman?

  I have the ability to rug your tapes.

• 1:43:13Ryan Sean Adams?

  I know, because you go first. And but yeah, it's we're in this bear market, but it's hard not to get bullish when you see the ship season, when you see all the shipping. And you're right, this does smell like 2019, except 10x. All the building that was going on in 2019, this is just so much bigger, right? The Arbitrum, multi-linked which support. You compile the EVM. This is so big for developers. The optimistic.

• 1:43:37David Hoffman?

  Sorry, we didn't say this earlier, but when Arbitrum develops Stylus, like their EVM equivalent, that extends to the rest of Ethereum. Other people can take this and run with it. It's not just Arbitrum.

• 1:43:48Ryan Sean Adams?

  Optimistic, like the OP stack with Bedrock that's coming too.

• 1:43:51David Hoffman?

  Oh my god, it's so bullish dude.

• 1:43:53Ryan Sean Adams?

  100 different chains. Like, all of this stuff is happening now for builders. And we've got CK EVMs right around the corner. The app's shipping hard.

• 1:44:04David Hoffman?

  Stark Resession was so bullish. Everything's so bullish.

• 1:44:06Ryan Sean Adams?

  I mean, the building, right? And it's not reflecting in price right now, but it is a little bit. So I don't know about your earlier take. Like, I don't know if I read the TA, right? It could go up. It could go down. Who knows? But it's all, it's all, it's build season, man. And it's huge. It's, we've come so far.

• 1:44:24David Hoffman?

  Feels great.

• 1:44:24Ryan Sean Adams?

  That's it. All right, meme of the week.

• 1:44:26David Hoffman?

  Before, before meme of the week, I remember Luke, the editor who's editing this right now, gave us when it was like officially the bear market, like this was after like 3RO's capital collapse. Luke was like, you and Ryan are like giddy about the bear market. You guys are so excited. And it's because of moments of the shipping that has happened in the last, like, since 2023 started. It's because stuff like this happens, like progress happens. And the signal about progress is so clear, because the noise is all gone. And so like, this is what we were looking forward to.

• 1:44:59Ryan Sean Adams?

  We don't have to wave our hands around and be like, stop, ignore this. Like, look at this. It's just very clear. Now, I think we'll go months into this and we'll be like, ah.

• 1:45:09David Hoffman?

  I'm hungry for a bull market. Can the tokens move? That's partially why. Tokens are moving, though. I know. That's why it's just like, this is happening so quickly. I don't feel like we've embraced enough pain yet. But anyway, we'll see. Meme of the week, David, what are we looking at here? Meme of the week, we actually got two memes of the week. So this is some guy who's doing his one phone call out of jail and somebody in the background saying, hey, man, what are you in for? And the guy who's giving the phone call says, I staked ETH with RocketPole and now I have life sentences with no parole.

• 1:45:39David Hoffman?

  Oh, my God. It's funny, but it's also scary. I know. Second meme, this was Ryan's meme. Nice job, Ryan. This is Bitcoiners when they discover NFTs. And what we are looking at is what looks like a retirement home. And I think that I'm pretty sure this is physical therapy. This is like physical therapy. Gamified. Yeah, gamified physical therapy. So they're playing all these fun games, but they're just like, you know, just puttering along. Do you know what? It's honestly, I've never seen some elements of the Bitcoin community so happy with NFTs. Like, other elements are seething in rage. Everyone loves NFTs, dude. They do. They do. That's why this video reminded me of the good parts of the Bitcoin community. That's it. That's the show today. Thanks for hanging with us. Extra long one, but I hope you enjoyed it.

• 1:46:23David Hoffman?

  A lot of news to download during ship season. Risks and disclaimers, gotta let you know. Crypto is risky, so is DeFi, so is Ethereum, so is Bitcoin. All this stuff is, you definitely lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the Bankless journey. Thanks a lot. Hey, we hope you enjoyed the video. If you did, head over to Bankless HQ right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence. We recommend joining our daily newsletter, podcast, and community as a Bankless premium subscriber to get the most out of your Bankless experience. You'll get access to our market analysis, our alpha leaks, and exclusive content, and

• 1:47:06David Hoffman?

  even the Bankless token for airdrops, raffles, and unlocks. If you're interested in crypto, the Bankless community is where you want to be. Click the link in the description to become a Bankless premium subscriber today. Also, don't forget to subscribe to the channel for in-depth interviews with industry leaders, Ask Me Anythings, and weekly rollups where we summarize the week in crypto and other fantastic content. Thanks, everyone, for watching and being on the journey as we build out the Bankless nation.