ROLLUP: 4th Week of March (Uniswap V3, Fidelity ETF, BTC Energy Waste, Jack Dorsey NFT)

Download the crypto meta to your brain in this weekly show. ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ GO BANKLESS WITH THESE SPONSOR TOOLS: ⭐️ AAVE - BORROW OR LEND YOUR ASSETS https://bankless.cc/aave 🚀 GEMINI - MOST TRUSTED EXCHANGE AND ONRAMP https://bankless.cc/go-gemini 💳 MONOLITH - GET THE HOLY GRAIL OF BANKLESS VISA CARDS https://bankless.cc/monolith 📱 DHARMA - MOBILE ONRAMP DIRECTLY INTO DEFI https://bankless.cc/dharma ------ TOPICS COVERED: 0:00 Intro 0:50 MARKETS 0:58 BTC Price 1:51 ETH Price 3:06 DeFi - TVL & $DPI 5:37 Ethereum Q1 Recap https://twitter.com/intotheblock/status/1375043056228048903?s=20 7:03 DeFi Revenue Crosses $1B https://twitter.com/DocumentEther/status/1374444448214515714?s=20 9:19 Crypto Indexes https://cdn.discordapp.com/attachments/765296914554945567/823573839128690708/unnamed_43.png 12:42 GBTC Keeps Dropping https://twitter.com/TheStalwart/status/1375077050269237253?s=20 15:45 BlockFi Cutting Rates https://twitter.com/MattBallen4791/status/1374906879722323979?s=20 17:20 RELEASES 18:50 OpenSea Raises $23M https://t.co/WlM1tngJDH?amp=1 AMA with Devin - https://youtu.be/5VaJ1qwPyOI 20:55 Alpha Tokenomics https://twitter.com/AlphaFinanceLab/status/1374700279736586244?s=20 23:24 Dune Analytics v2 https://duneanalytics.com/blog/dune-v2 25:35 Crypto.com NFT | Hermez L2 https://crypto.com/nft https://hermez.io/ 27:43 Maker Increasing Debt Ceiling? https://twitter.com/MakerDAO/status/1372979697517174785?s=20 30:19 EthLife Podcast https://twitter.com/DenizOmer/status/1374741993528655875?s=20 31:25 NEWS 31:35 Uniswap V3 https://uniswap.org/blog/uniswap-v3/ 34:52 Decentraland Casino Pays in DAI https://www.coindesk.com/this-casino-in-decentraland-is-hiring-for-real 37:26 Maker & A16z https://bafybeies2vgpzxnrrc7i76wuefswn2tnnqboqzckpnognfklfhkit2x5ry.ipfs.dweb.link/ 40:06 Beeple Cashes Out https://decrypt.co/62547/beeple-immediately-changed-his-53-million-nft-takings-from-eth-to-usd 42:50 ETH 2.0 Validators https://twitter.com/evan_van_ness/status/1372948495418675200?s=20 44:57 Elon: "Don't Defy DeFi" https://twitter.com/elonmusk/status/1375031060753346564?s=20 45:40 Starkware https://twitter.com/StarkWareLtd/status/1373936192421519366?s=20 https://www.theblockcrypto.com/post/99211/starkware-funding-round-ethereum-paradigm 47:11 Jack Dorsey NFT https://www.theblockcrypto.com/linked/99023/twitter-ceo-jack-dorsey-sells-nft-of-first-ever-tweet 49:07 Nifty's V2 and MEME https://dontbuymeme.medium.com/niftys-backed-by-major-investors-buys-into-meme-v2-date-announced-5eba2867ff86 50:55 Time Magazine NFT Auction https://time.com/5948741/time-nft-covers/ 52:42 Fidelity BTC ETF https://www.theblockcrypto.com/linked/99279/fidelity-bitcoin-etf-filing 54:00 Chinese Digital Currency Anonymity https://www.theblockcrypto.com/linked/98925/pboc-anonymous-cbdc-not-option 55:23 FATF Targeting DeFi https://www.coincenter.org/a-quick-analysis-of-fatfs-2021-draft-cryptocurrency-guidance/ 1:02:13 BitClout https://decrypt.co/62162/bitclout-reaped-160m-tokens-pegged-celebs-followed-money 1:06:11 TAKES 1:06:21 NFTs, Simply Explained https://twitter.com/jackbutcher/status/1374025919342477316?s=21 1:07:55 Efficiency https://twitter.com/ryansadams/status/1375090768201793537?s=21 1:10:22 The Scalability Trilemma https://twitter.com/defipulse/status/1374397104550944777 1:13:14 Dollar-Pegged Stablecoins... https://twitter.com/RyanWatkins_/status/1375078200980742153?s=20 1:15:15 Rai is a Stablecoin https://twitter.com/TrustlessState/status/1373781357797646342?s=20 1:18:00 What David's Excited About 1:25:58 What Ryan's Excited About 1:28:28 MEME OF THE WEEK https://twitter.com/i/status/1373642150521360392 1:31:13 Closing & Disclaimers ------ THIS WEEK ON BANKLESS: 🦄 Uniswap V3 Alpha Leak (3/23): https://youtu.be/TRJYs7v7gYo 🎙️ ULTRA SOUND MONEY (3/22): https://shows.banklesshq.com/p/-ultra-sound-money-justin-drake ----- 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://newsletter.banklesshq.com/p/bankless-disclosures

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

• 0:08Ryan Sean Adams?

  Bankless Nation, it is the last week of March. David, what are we doing this morning?

• 0:13David Hoffman?

  We are rolling it up. We are rolling up the last week of March, getting a full week's worth of crypto news injected into your brain as fast as possible. First, we're going through the markets. What is the market saying? Then, we are going through releases. What got released in the last week? Then we go through the news cycle. What was the conversation like in the news over the last week? Then lastly, we finish up with some ecosystem takes. Who had some good opinions? Then we go into what David and Ryan are excited about, and then we finish things off with the meme of the week.

• 0:43Ryan Sean Adams?

  Guys, there is a lot to fit in this week. Absolutely. This comes out at you every Friday morning, both on the podcast and YouTube, so catch it that way. David, you ready to get into markets?

• 0:54David Hoffman?

  Let's do it.

• 0:55Ryan Sean Adams?

  All right. What is the market telling us about Bitcoin this week?

• 0:58David Hoffman?

  Bitcoin in a little bit of a slump this week. We are down to $52,200. Again, still $50,000, still relatively expensive Bitcoin. But from people's expectations of what a bull market is like, this is low, I guess. And so we've been having a number of red days ever since, I think, like March, the middle of last week, so 10 days ago, Bitcoin has been in this downtrend, and people are bearish, honestly, is my sentiment read of the market.

• 1:32Ryan Sean Adams?

  It's funny. The market certainly has a short-term memory, David. Like, when in doubt, guys, zoom out. If you zoom out, we're doing pretty well on the year, aren't we?

• 1:40David Hoffman?

  We're doing okay. We're doing okay. Bitcoin started this 2021 roughly a little bit over $20,000. So let's remind us of that fact.

• 1:52Ryan Sean Adams?

  Doing just fine. How about ETH? ETH is kind of the same story and I feel like Ethereum's are even more bullish. This despite our ultrasound... Yeah, bearish, excuse me. And this despite our ultrasound money podcast this week. So maybe enough folks haven't heard it. Maybe the right people haven't heard it. I'm not sure. What is making people bearish on ETH these days?

• 2:12David Hoffman?

  Yeah, when Bitcoin trends down, Ether always trends down harder again. And when Bitcoin trends up, Ether also trends up harder. So like when there is bearishness in the market, there is more bearishness with this Ether price. So we are at the low, low price of $1,612 for the Ether price. Only a little bit more than $200 above the previous all-time high versus Bitcoin, which is two and a half times its previous all-time high. So like a bunch of Ethereum market commentators are just feeling bearish, I guess, which is weird. But again, I guess it's really about people's expectations versus reality. And people have really high expectations, I think.

• 2:55Ryan Sean Adams?

  I will stick to what we've been saying for the last year or so. Hilariously undervalued even at these prices, specifically in a bull run. I think we'll see higher highs before this is all over. Let's talk about total locked in DeFi, David. Actually, let's do total value locked in DeFi first with DeFi Pulse. So we are kind of flat, I guess, in this first quarter ever since February. 40 billion or so locked in DeFi. What is this telling us?

• 3:23David Hoffman?

  Yeah, it's just telling us the same thing as the market at this point. Prices are going up, prices are going down, and that's really just changing the value locked in DeFi. I don't think that's much of a different story other than the asset prices of these things that are in these applications. There's only so much that value locked in DeFi can really tell us. And especially when this market is guided by price movements. This is really at this local point in time, just a proxy of price movements.

• 3:50Ryan Sean Adams?

  How about DPI? So this is the top 10 DeFi assets by market captured in this index. It's down on the week too. So DeFi is taking a tumble along with Bitcoin and Ether. What's the story here?

• 4:04David Hoffman?

  Yeah, last week DPI was at $440. This week we're at $380. Again, same tumble that we're all talking about. And then I believe DPI is also down versus ETH. And so this is just, people are being, having fear, I guess. So people are moving into safety, which means they're moving up the market cap stack. DeFi tokens are moving into ETH. ETH is moving into BTC. BTC is moving into the dollar. Then that's just the general like 10 weeks or 10 days of bearishness that we've seen lately.

• 4:36Ryan Sean Adams?

  So has this slowed down DeFi season then in your mind? Are we maybe kind of in a holding pattern? The DeFi season is on pause?

• 4:45David Hoffman?

  Yeah, I'm stuck between like, we are about to finish this consolidation period and April's gonna be really, really awesome. And the other, the other thing I'm stuck behind is like, oh, this could be like a really long flat period. And we don't actually break out of this flat period until something like June or July with EIP1559 when that gets triggered. And if you look at the DPI versus ETH on those timeframes, the 2021 timeframes, you do kind of see this wedge that is forming. Ryan, if you hit that, maybe that six month marker at the very bottom of your screen.

• 5:20David Hoffman?

  Yeah, yes, yeah. So, so people are thinking that that, this area needs to get filled over the next like three to four months. And then, and then we can have DeFi season. But DeFi season unofficially on pause.

• 5:34Ryan Sean Adams?

  Unofficially on pause. All right. We'll see where that heads in the weeks and months to come. It does feel like overall, David, the market is taking a little bit of a breather during this bull cycle. Let's talk about this tweet because even though prices are down, the Ethereum economy just keeps humming. This is some analytics, some stats from Into the Block. We've got almost 600,000 daily active Addresses being used in Ethereum. An active address is like a bank account. These are all representative capital pools, 600,000 of them being used daily. That is absolutely massive. Addresses with a balance have increased by over 4.4 million.

• 6:18Ryan Sean Adams?

  There's about a trillion dollars being transacted on-chain. 96% and this is all Q1, this is all year-to-date stats. 96% of the ETH addresses are also profitable on their ETH. And a lot of ETH is leaving exchanges too. Anything else we should highlight on some of these Into the Block stats?

• 6:39David Hoffman?

  Yeah, this is, to me, this just indicates the discrepancy between market fundamentals and user expectations or price expectations. People, people are expecting things like 2017 to happen now. And I think that's perhaps why the price maybe got a little bit ahead of itself, even though I don't really think it did. But like the fundamentals that are behind the Ethereum economy, again, just keep on chugging.

• 7:02Ryan Sean Adams?

  Keep on chugging, keep on getting stronger, as does DeFi revenue, David. So we just passed the 1 billion mark in total DeFi protocol revenue. $1 billion in revenue generated by these new money protocols. That's super exciting, David. Like, look at this. Look at the growth here.

• 7:22David Hoffman?

  So much of this has come since January.

• 7:25Ryan Sean Adams?

  Yeah, it's, and it looks like it's kind of that hockey stick, parabolic growth that you look for in emerging high-growth tech stocks, economies, high-network effect, sorts of, sorts of areas. That's what we're seeing here. And this, again, is something there was no inkling of in the 2017 bull run. A lot of projects, a lot of, yeah, there were zero DeFi, basically, in 2017 and no capital assets. So part of this 2021 bull market is the story of the rise of capital assets in crypto, primarily being led by these DeFi tokens. Even though prices are down, revenue just keeps going up.

• 8:06David Hoffman?

  Yeah, we started this year again at 0.4 billion revenue in DeFi. And so that means in Q1, 0.6 billion dollars of DeFi revenue has been made. This DeFi revenue metric, I think, is a really blunt instrument because it doesn't talk about, not all revenue in every single DeFi app is the same. Not every single DeFi app captures the same amount of upside of that revenue. For example, so like liquidity providers in Uniswap, those are 100% of the people receiving the Uniswap fees and Uniswap tokens receiving 0% of that fees. That may change in the future. So yeah, it's a very blunt instrument, but also it does a very good job of seeing like, well, it doesn't, call it blunt, but like a billion dollars of cash flow is a billion dollars of cash flow.

• 8:49David Hoffman?

  Like in aggregate, DeFi has made a billion dollars of cash flow and has made 0.6 billion dollars of cash flow in the last quarter. And so if anyone tells you that like DeFi is just a bubble, like you can point them to a billion dollars of money being flown around at the direction of these governance tokens, which is an important thing to note.

• 9:08Ryan Sean Adams?

  Yeah, in our conversation earlier this week, when we were talking about Wall Street, Wall Street is starting to understand these DeFi tokens as capital assets as well. So that is a narrative paradigm shift also. David, have you ever wondered what is in some of these crypto indexes? Because this chart from Misari, this table layout from Misari, kind of, kind of shows what the various options are. And the question I often get from people who are new to crypto is like, what's a way I can just set it and forget it? Like buy an index and then just, just leave it? And here are four different options and the composition of those options. You hear us all the time talking about the DPI, the DeFi Pulse Index.

• 9:51Ryan Sean Adams?

  It's an index that we really like because it's compiled of these top 10 DeFi tokens by market cap. But you can also go the traditional route and buy indices from what we would call crypto banks. There's the Bitwise 10, there's the Grayscale Large Cap, there's the Bloomberg Galaxy Index of Tokens, and there's also Bitwise, which we've talked about. This is a new index with DeFi-specific tokens. Kind of cool to see it laid out in this way. Do you have any favorites here, David?

• 10:23David Hoffman?

  Yeah, well, I can have some very much some unfavorites here. Look at the Bitwise 10. It's 80% Bitcoin, 15% Ethereum, and then the next, the next biggest, largest allocation is 1% to Litecoin, and everything else is so small. 0.9% chain link, 0.8% Bitcoin cash, 0.6% Stellar Lumens. This is absolute crap, and this is like the Bitwise 10 is like the biggest index for crypto there is. And so like my, my head is that, look at the Bitwise top 10 versus the Bitwise DeFi, and look at that difference in quality. Bitwise DeFi is Uniswap, Ave, Synthetix, Maker, Compound, Urn, UMA, 0X, Loopring. All of those have, all of those have revenue associated with them.

• 11:05David Hoffman?

  Do you know, Ryan, do you know how much revenue Litecoin made in the last year?

• 11:10Ryan Sean Adams?

  How much, David?

• 11:10David Hoffman?

  The blockchain, it took in less than $100,000 worth of fees in the last year. And so like, and Stellar Lumens, I'm pretty sure it's less than 2 grand of fees in the last year. And like, fees for store value assets are a different story than, than revenue tokens. That's important to note. But like, just look, you might as well, if you're gonna invest in the Bitwise 10, you might as well just put Bitcoin and Ether on your balance sheet and call it a day. Use the Bitwise DeFi index or the DeFi Pulse DPI index to, to get your, your real indices here. Because what's the point of allocating 0.3% to EOS? Like, what? That makes no sense.

• 11:45Ryan Sean Adams?

  Well, Bloomberg Galaxy, and I think this index, if I'm, if I'm correct, the Bloomberg Galaxy index was created in like 2018 or 2019. It has a 3% EOS allocation and a 8% Bitcoin cash allocation, which feels like very arbitrary to me as well. So that one might make even less sense than the Bitwise 10. But I think the point here, David, is like, we're still very early stage in these indexes, in these indices, and more need to be, more need to be made that, that capture the, the good assets in this space, the good, maybe the most bankless assets in this space.

• 12:24Ryan Sean Adams?

  And I think, David, we're gonna have some stuff to announce along those lines with Bankless pretty soon. More on that at some future. Episode, but

• 12:34David Hoffman?

  Bankless has opinions on what should be in an index. Let me tell you that.

• 12:38Ryan Sean Adams?

  Strong opinions, strong opinions. So stay tuned for that. Um, let's get to this last one in the markets. This is a tweet from Joe Weisenthal. Wow. The GBDC, that is the grayscale Bitcoin trust, of course, that we've talked about so often on Bankless. Premium to NAV just keeps getting more negative now at negative 14%. Almost the entire time I've been in crypto, while this product has been here, David, it's been trading at a, it's been trade GBDC has been trading at a premium to NAV. That means it's, it's more expensive than buying Bitcoin on spot.

• 13:12Ryan Sean Adams?

  The last few weeks that has reversed and it's getting even more negative. So, um, you can actually buy GBDC in your fidelity account at a 14% discount to spot. Uh, what we've, we talked about this a few times on, on rollups, but it, it hasn't ever dropped, uh, to, to this degree. What's kind of the net effect of this?

• 13:35David Hoffman?

  Yeah, this is simply a product of the fact that it takes six months for people to deposit their BTC into the trust. And then be able to turn that BTC into GBTC and then sell that and pocket that premium. There, that six month lead time means that people are committing to this, this trade for six months. They don't know what premium they're going to get at the other end. And so, you know, when, and people have been making so much money on this trade. This has been such a common trade. The premium for the, for GBTC was, has been positive, which means that people have just like institutionalized this premium, which is terrible. Because at some point, the premium must become efficient, right?

• 14:14David Hoffman?

  If it's positive for as long as it has been, which it's been positive ever since like 2015, really people haven't really been, uh, working this, this premium. Uh, it really has been about 2019 or later, but still, um, People have been just assuming that this premium is going to work and so they've been throwing Bitcoin into grayscale and now the premium is going in the opposite direction and it makes sense that the premium should fluctuate above and below zero and try to hold zero as steady as possible but because of the regulatory requirements, we have to have that six-month gamble where people submit their BTC and hope that the premium lasts. And this actually reminds me of like the whole ample fourth rebasing mechanism where

• 14:56David Hoffman?

  it would rebase positively and then it would rebase positively again and it would rebase positively again and then people got stuck in that psychology. It's like, oh, this thing just prints money and so they would throw money into it and at some point it just becomes inefficient and it starts to unwind in the other direction. I think it's possible that this negative premium is the new status quo for quarters, multiple quarters long, because that's what it's going to take to unwind all of these people that have made these bets into turning BTC into GBTC and pocketing that premium.

• 15:26Ryan Sean Adams?

  It definitely could be, especially as we've talked about before, if more competition starts to enter the horizon. This is a news item, but Fidelity has just filed for an ETF, a Bitcoin ETF. That is a competitive pressure on the less efficient GBTC product and maybe the market's starting to price some of those things in. But I'll tell you what's interesting, David, is some of the downstream effects of what you were saying. People ask the question, like, when you deposit your crypto, say Bitcoin, in a centralized crypto bank and you lend it out to someone like BlockFi, you earn a decent interest, 5%, 6%? A lot of that interest was generated off of this GBTC arbitrage opportunity. Now that that's going away,

• 16:10Ryan Sean Adams?

  we're starting to see some downstream effects. So BlockFi has recently slashed their rates. It used to be you could deposit a fairly large amount of Bitcoin into BlockFi, receive 5% to 6% interest on a loan. That has dropped down to like the 1% to 2% interest rate. So we're seeing some of this downstream effect on the crypto lending markets as well, at least the centralized crypto lending markets. I think that's going to Filter into into DeFi. Now, some people have gone so far as to as to say, well, this makes crypto lenders like BlockFi insolvent. I think there's a lot of FUD going around like that. I don't believe it. I don't think somebody like BlockFi is going to, unless they're terribly mismanaged behind the scenes,

• 16:54Ryan Sean Adams?

  going to go insolvent in the middle of a bull run like this with the balance sheet they have and with the investors they have. But it does change around the market dynamics and there are some downstream effects of this. Anything more we should say on that, David?

• 17:08David Hoffman?

  I got nothing.

• 17:10Ryan Sean Adams?

  All right. Well, guys, we are going to get to releases in just a minute, but first we want to talk about the fantastic sponsors that made this roll up possible.

• 17:20David Hoffman?

  If you are looking for a product that connects your fiat bank account with DeFi tokens and products, you need to download the Dharma mobile app. Dharma is a non custodial smart contract wallet and comes with a bridge that connects you right into your bank account. Dharma is the fastest and most efficient wallet between your fiat in your bank account and any token on Uniswap, or even any vault in Yarn. With Dharma, you can get over $25,000 per week into the DeFi universe and you can do it non custodially. If you or anyone you know is hot on DeFi and you're trying to get your money into a DeFi investment, Dharma is the place to go.

• 18:00David Hoffman?

  Signing up and going through KYC is an absolute breeze. It took me just under three minutes and after signing into my bank account via Plaid, I am now just one transaction away from any token that Uniswap has to offer. Go to www.dharma.io, that's D H A R M A dot I O. Download the Dharma app and get yourself unbanked today. If you want to live a bankless life, you need to get a Monolith DeFi Visa Card. Monolith is both a one-two punch of an Ethereum smart contract wallet, as well as an accompanying Visa Card that lets you spend the money that you have in your Ethereum wallet wherever Visa is accepted.

• 18:39David Hoffman?

  It's really a fantastic tool that lets you use Ethereum for what it does best, which is holding and managing your financial assets. But also keeps you connected to the rest of the world's payment rails. Monolith also offers on-ramp services for getting your fiat money into the world of DeFi. So it's trivial to top up your Monolith card if ever you need to. And your deposited money goes straight into your non-custodial wallet. So your money is never held by a centralized intermediary because your Monolith wallet is native to Ethereum. Monolith helps you transcend both the legacy and the crypto worlds because the money that you hold in your Monolith wallet has the power of DeFi behind it. Swapping assets on Uniswap or earning yield in DeFi is at your fingertips.

• 19:21David Hoffman?

  But with Monolith, so are the groceries at your grocery store or the coffee at your coffee shop. Go to monolith.xyz to sign up and get your Monolith Visa card today.

• 19:31Ryan Sean Adams?

  All right, guys, we are back with releases. Let's talk about this monster release. David, we had Devin, who is a founder of OpenSea on the podcast just a couple of weeks ago. Now, OpenSea is raising $23 million to scale the largest marketplace for NFTs. What is OpenSea and why is this raise significant?

• 19:53David Hoffman?

  Yeah, OpenSea is basically the Craigslist, eBay, Amazon of NFTs, right? So like, like duh, like that's the easiest business model ever. So congrats, congrats to Devin and OpenSea. I expect, I expect this to work out. And I would imagine that most listeners of this podcast have been on OpenSea at least once. And it's really just an NFT explorer along with like an NFT transaction history, right? And so you can see, because everything is on-chain, you can see previous offers being made and accepted or denied for any NFT, right? And so, pretty cool.

• 20:30Ryan Sean Adams?

  Yeah, check out that Ask Me Anything we did with Devin, who's the co-founder of OpenSea. For more info on this, you know, it's pretty amazing too, is the investors who are leading this round. People like Naval, you see, but also Mark Cuban, Tim Ferriss.

• 20:44David Hoffman?

  Wow.

• 20:44Ryan Sean Adams?

  Alexis Ohanian from Reddit. So Plow, RAC, a lot of the people who are in the NFT scene are part of this. A lot of mainstream people too, so that's great to see. David, let's also Talk about another past Ask Me Anything guest, the folks behind Alpha Finance.

• 21:01David Hoffman?

  As soon as this is going to be everyone.

• 21:03Ryan Sean Adams?

  Yeah, that's true. We're collecting them all, guys. We produce a lot of content around here. All right, but this is Alpha Finance. Really interesting protocol when we took a look at it. But now they're adding another layer to their token, which is token economics. They are adding, I believe, cash flows to their token. What's going on here?

• 21:24David Hoffman?

  Yeah, so Alpha token holders will actually be receiving fees from the protocol, right? And so this is, this is something I'm, I really hope, and I'm not sure if this is the future of DeFi, but I really hope it is. And my, one of my biggest critiques of, and not mine, this is, this is an opinion that I share with many other people, is that equities on the equity stock market, the ones that don't release dividends, mainly the tech stocks, they're really just a valuation on greater fools, right? Like you'll buy Apple just because it's Apple, and then you will hope that you'll sell it for a higher price later. You're not buying it because it's paying you money. And this is something I'm hoping that DeFi really doesn't fall into this trap of not like, there are fundamentals and then there's a token, but there's a discrepancy between those two things.

• 22:09David Hoffman?

  So when we actually, as an, as an industry, pay out the dividends generated from the protocol to the token holders, that actually is an intrinsic link between the value of the protocol and the value of the token. And so this is what Alpha is doing. So nice job, Alpha, actually paying out money to the token holders. And I hope this trend continues because I want there to be a link, an associative link, between the value of the token and the actual revenue and value of the application that isn't just association, but is actually intrinsic to actually passing value. And so nice job, Alpha, paying their token holders. Good job.

• 22:43Ryan Sean Adams?

  Fees accrued in the first six months would have been 1.7 million. So not insignificant and growing quite fast. You know, I agree with you there, David, because what else do you do with excess capital that your protocol generates? You've got two, only two other options besides releasing it in some sort of a dividend form. One is you put it in a Dow Treasury. And then the question is, what are you going to do with all of that capital? Find a productive use for it. The Dow Treasury is so large, I think they're like, it's hard for them to find a productive use for all of this capital. The second thing you can do is buy back your tokens as well. Buy and burn. That's what Maker does. So all of these mechanisms are super interesting.

• 23:22Ryan Sean Adams?

  And, uh, and I think the future of DeFi tokens, let's talk again about the future of DeFi analytics. These assets, of course, are open source. These networks are completely open source. Dune Analytics, which is, I think the go-to spot, if you are trying to be a DeFi financial analyst, this is the tool that you're using. They just released their V2 version. It's now live. I have to confess, I haven't taken an exhaustive look at this, but why is, why is, why is Dune Analytics? Why is this important for us to, to know about this tool, David?

• 23:57David Hoffman?

  Yeah. Dune Analytics is all about, uh, data analysis of DeFi. And so like, like we've been saying before on the Bankless Podcast is like DeFi, Ethereum. And these, uh, economies are inside out. They're completely transparent. And by that definition, there is so much data. It's like as much data as you can possibly need. So now it's about how do we parse through that data? How do we consume that data? And Dune Analytics is a data consumption tool. So I expect this to, to really just inject itself into the mainstream consciousness when, uh, especially when the Wall Street bros come over and, and want to play in DeFi. They're going to need data analytics and things like Dune Analytics are going to be able to provide that to them.

• 24:40David Hoffman?

  And so it's really going to be about who can use these, uh, data digestors, these data processors. That is really going to be a very valuable skill moving forward. And we are already seeing, um, VCs and DeFi teams and almost every, anyone, uh, tried and find people that can, uh, use these, uh, DeFi data consumers like Dune Analytics. That is a really valuable skill that everyone wants. And so, uh, banging on that drum, if you are looking for a job in crypto, in DeFi and Ethereum, get good at Dune Analytics. It's really valuable.

• 25:13Ryan Sean Adams?

  Absolutely. Here's a chart from our friend, Richard Chen, who was on the podcast, the One Confirmation Podcast. This is DeFi, total DeFi users over time. Look, man, we just silently crept up to over 1.6 million unique DeFi users. This is the sort of analytics you can get in real time on Dune. Super cool, man. Super cool tool. Let's talk about NFTs for a second. And a release, Crypto.com is coming out with an NFT distribution tool. You know what this, this kind of, I'm starting to wonder about NFTs. We've got people who just kind of said, NFTs are absolutely a bubble. He sold all of his proceeds that he made from his art from crypto into fiat.

• 25:58Ryan Sean Adams?

  We have groups like Crypto.com now starting to enter that it just really doesn't feel as authentic as it once was. I wonder if we're starting to see the early signs that NFTs are kind of getting overcrowded. The lower quality things are starting to flood into the space. This just felt like a signal to me. You know, God bless Crypto.com, use the credit card, but getting into the NFT space, you know, months in, it feels kind of top signaling. What do you think here?

• 26:25David Hoffman?

  Yeah, I'm reminded of Su Zuo's metaphor of the shitcoin roller coaster. For those that aren't familiar, if, go Google search, the euthanasia of roller coaster. And it's just a roller coaster with, that goes in loop to loops to loops, but the loops get tighter and tighter and tighter. And the metaphor is that the iterative cycles on these things are just faster and quicker and shorter and of lesser quality because people are trying to get in on the hype. That's what this feels like to me. It feels like we're going through the euthanasia roller coaster of NFTs right now.

• 26:54Ryan Sean Adams?

  Possibly, possibly so. But we are just getting started, I think, on Ethereum Layer 2. Here is Hermes. This is a ZK rollup Layer 2 that just came out this week. I think this is targeted on payment use cases. This is something that's kind of flown in under the radar, David. We've talked about so many different Layer 2 projects. This has been out there building. Now they're deployed on Ethereum for the payment use case. I just, I think this is part of the theme that we're seeing. Going into the second quarter of 2021, that Layer 2 is coming with like a force and it's here and the tech is being built out and a lot of different approaches are being tried.

• 27:35Ryan Sean Adams?

  So, pretty cool. You guys can check out Hermes at hermez.io and start using Layer 2s now today. David, I think you might have some commentary on this. What is going on with Maker? They are increasing their debt ceiling. What are they doing here and what does this mean for Ether and Maker?

• 27:55David Hoffman?

  Yeah, dropping an absolute cannonball into the protocol change for Maker DAO. Increasing the maximum debt ceiling for Ether as collateral from 2.5 billion DAI to 15 billion DAI. And so what this means is that each collateral inside of Maker DAO has certain risk parameters and one of these risk parameters is called the debt ceiling. And that's how much DAI is allowed to be drawn out of certain specific collaterals, right? And so Ether has this maximum 2.5 billion DAI that is allowed to be borrowed against Ether, the collateral type, and the risk parameters can get adjusted in order to make sure that the Maker DAO system is appropriately solvent, appropriately controlling risk.

• 28:36David Hoffman?

  But they are deciding that it's an okay move to increase the debt ceiling from 2.5 billion to 15 billion DAI for Ether as collateral. And so Maker DAO is letting Ether be far more capital efficient as a collateral type in its Vols. And so I think what we are going to see is an increase of Ether inside of Maker DAO and we're going to see a very significant increase of DAI circulating supply. And the moral of the story is that Ether is becoming, again, the most capital efficient asset on Ethereum due to its trustlessness advantages. Absolutely massive amounts of DAI liquidity are possible as a result of this and that's pretty cool.

• 29:19Ryan Sean Adams?

  Yeah, and the reason they can do this goes back to a theory that we talk about so often on Bankless. We term this economic bandwidth. So Ether has more economic bandwidth than it did a year ago when some of these debt ceilings were set at 2.5 billion. Why does it have more economic bandwidth? Because ETH has increased in moneyness. It's become more liquid. Its total market cap has increased by a tremendous amount. So that allows Maker to, and DAI, to consume more of this value, more of this trustless economic bandwidth. And ETH is increasing in its store of value property, in its moneyness, as we would say.

• 29:58David Hoffman?

  Just for added perspective, there's currently only 2.9 billion DAI outstanding, and so going from a 2.5 billion DAI debt ceiling for Ether to 15 billion DAI is a big deal. Like, that is a lot more DAI out in the ecosystem.

• 30:12Ryan Sean Adams?

  Bullish Maker, bullish for ETH as a monetary unit, as a monetary asset. Very cool. David, something else that's very cool is the Bankless community has offshoots now. This is somebody who's starting a new podcast, inspired partially by Bankless HQ and ETH Hub, about ETH life, ETH culture, the story behind builders. Do you know much about this? I haven't given it a listen yet, but I'm excited to do so.

• 30:41David Hoffman?

  Yeah, no, I haven't listened to it yet either, but I have it in my rotation. Dennis, he works at Kyber, been in the Kyber team for years now, been in Ethereum since before I was. I met him in Tel Aviv when I did my ETH triple-point asset talk. And so he's doing the ETH Life podcast, which is a podcast dedicated to the countless Ethereum's passionately building on the best blockchain in the world. So Dennis, perhaps an ETH maxi, join the club, I guess. I only point myself as an ETH maxi because everyone else does. I actually don't accept that identifier, but I take it as a funny joke. So I'm a big fan of more Ethereum content. Like, please, someone else help. We need more Ethereum content.

• 31:25David Hoffman?

  So Dennis, I'm super happy to see that you started a podcast.

• 31:28Ryan Sean Adams?

  Yeah, it's awesome, guys. Check out that podcast. Definitely. All right, David, let's flip to news. We got to talk about the big news item of the week, the Alpha League.

• 31:37David Hoffman?

  What was that? I missed it. What happened?

• 31:38Ryan Sean Adams?

  Uniswap, man. It's something to do with unicorns. So Uniswap is dropping its version 3. This is like long awaited, much teased version 3. We actually put out a whole Alpha League video about this that we'll include in the show notes that you can take a look at, which was our sort of first analysis, first reaction. I think we got some things right, a lot right. We probably got a few things wrong.

• 32:00David Hoffman?

  We got something wrong.

• 32:01Ryan Sean Adams?

  We got something wrong. Would be the first time. But look, Hayden Adams is going to come on the podcast and clear it all up for us. That will release sometime in the next week or so on the Bankless Podcast. But give us the skinny. What is new in Uniswap V3?

• 32:20David Hoffman?

  Yeah, the cool new feature about Uniswap V3 is what they call concentrated liquidity. And so previously, if you want to provide liquidity, for example, to the ETH-DIE pair, you would provide it for the full range of possible ETH-DIE trading valuations, which is literally infinite in both directions, right? Like up to $1 million Ether to down to $1 Ether, right? You would be providing liquidity for that full possible range of money expressions. With concentrated liquidity, you can just provide liquidity for between $1,800 Ether and $2,200 Ether. And what this means is like you are taking on more impermanent loss risk, as in, take for example, you are providing in just those same parameters,

• 33:02David Hoffman?

  $2,200 to $1,800 ETH liquidity on the ETH-DIE pair. If Ether is at $1,800, that means you have 100% of your liquidity position in Ether and you have 0% of it in DIE. And then if Ether goes from $1,800 to $2,200, that it flips. Because you have concentrated liquidity in just that spectrum at $220 Ether, because you are supplying between $220 and $1,800, when the Ether price moves to $220, you have 0% Ether and 100% of your LP position as DIE. And so it allows you to market make around a very specific band of liquidity

• 33:42David Hoffman?

  inside the Uniswap curve. And that has enormous implications to what it can do. And so I think people are going to get really creative with these variable liquidity across the same curve of spectrums that Uniswap V3 is offering.

• 33:58Ryan Sean Adams?

  Absolutely. It makes parts of the curve very deep in terms of liquidity, maybe deeper than anything we've ever seen in an automated market maker. One thing it does not do is we sort of thought it did at the very beginning is act as kind of a stop loss for a liquidity provider. It really doesn't do that. It's almost more like you're you're adding leverage in a way between those positions. You're taking on even more impermanent loss risk if you if you, you know, do an ETH die pair in a specific narrow band. More on that when we talk to Hayden. Anything else we should say on that for now?

• 34:32David Hoffman?

  Yeah, Hayden's just been begging us to get him on the Bancliff Podcast. And so finally, now that he finally released Uniswap V3, I guess we'll let him come on.

• 34:42Ryan Sean Adams?

  Maybe.

• 34:42David Hoffman?

  I guess, I guess.

• 34:44Ryan Sean Adams?

  I guess.

• 34:44David Hoffman?

  We'll be generous.

• 34:46Ryan Sean Adams?

  Yeah, we'll let you on this time. But, you know, just because you released V3.

• 34:49David Hoffman?

  Just because he released V3.

• 34:53Ryan Sean Adams?

  All right, David. Decentraland Casino pays in DAI. This like file this under weird jobs categories, like weird crypto jobs categories. Decentraland, of course, is this entire virtual world. And inside of Decentraland, this populated virtual world, almost like a virtual reality city, we have a casino. And this virtual casino is hiring people to operate the casino tables and paying them full time positions in DAI in order to do so. This is crazy. This is like, you know, Ready Player One stuff. Very cool. But we talk all the time about the jobs that are available for you in the crypto and the DeFi economy. Did you know you can get a job

• 35:35Ryan Sean Adams?

  at as a virtual casino table operator, maybe at a poker table or something like this? Crazy stuff.

• 35:43David Hoffman?

  Yeah, imagine working at a casino at home. How crazy is that? And just think about the and so this is kind of like exactly what Ready Player One predicted, where like the economy inside of like the virtual world will come to dwarf the economy out at the outside world. And if that prediction comes true, we would see like something like this, where, you know, some of these very initial use cases would would come to manifest manifest themselves in the virtual world. No surprise that it's something along the lines of gambling. That seems to be where where these things start off with. And so that I think that's just absolutely fantastic. There are jobs available for inside of VR to operate a casino. That's just so cool.

• 36:22Ryan Sean Adams?

  Also, you're getting paid in crypto money, right? It's like, people talk about, well, where are these monies actually going to be used? Well, they're being used in this new crypto economy. That is the unit of exchange. It's DAI, it's not physical fiat dollars.

• 36:35David Hoffman?

  Yeah, the other thing that this reminds me of is the sovereign individual thesis, where people around the world are going to compete in these same job markets. And so, somebody in some third world country gets to compete with somebody from the United States. And that wage, maybe the wages are less interested for somebody who is in the first world rich countries, but more interesting for people in the third world countries. And so, this could be a great equalizer for people in third world countries, who are trying to access better wages, because everyone is operating on the same playing field in VR and online. That's pretty cool.

• 37:13Ryan Sean Adams?

  Look, man, we are entering an entirely new economy, entirely new job market. And I'm glad you're with us, because this is the cusp of things. We need to learn these sorts of things in order to stay relevant and to earn wages in the 21st century here. All right, let's talk about this petition letter coming from the MakerDAO community. And they're petitioning one of their largest investors, which is a A16Z. Chris Dixon and team, we've had Chris on before. This is the Maker community actually asking A16Z, they own a bunch of MKR tokens, asking them to get more involved in governance here. Apparently, they want their input, they want their votes on various MakerDAO proposals.

• 37:57Ryan Sean Adams?

  And A16Z is currently less active than the community would like them to be. You know, what's interesting here is, this is sort of the same problem that stocks fallen under, right? So like, whoever votes in major shareholder decisions, like I own various mutual funds, I never vote. I always use some sort of a proxy. And I do think sometimes these DAOs struggle from almost a tragedy of the commons problem. Whereas, like, you know, A16Z, if the governance decisions are going according to plan, they don't necessarily have to spend time on these issues and provide governance feedback if the rest of the community is already doing it for them.

• 38:40Ryan Sean Adams?

  So, I wonder if we have to kind of tweak around incentives to get better governance participation in the future for some of these DAOs like Maker. What do you think?

• 38:48David Hoffman?

  I think the other half of this story is that Maker DOW is trying to dissolve the DAO. They're trying to dissolve the foundations. And so therefore, they need the next biggest MKR holder to step up, right? Because as soon as the foundation dissolves, A16Z will be the next largest governor of Maker DOW, holding 6% of all MKR tokens. And also, I believe when A16Z bought those MKR tokens, they said that they wouldn't use them for governance because they wanted the community to govern things. And they didn't want to tinker with that, right? They wanted to be a bottom-up system. But the Maker DOW, that was two years ago, two-plus years ago.

• 39:29David Hoffman?

  And so now, the Maker DOW protocol is in a state where we need all players to get involved, right? Because the foundation is no longer steering the ship. And so I think it's more of an invitation to say, hey, it's cool to play in governance now. There's a conversation here to be had about governance by VCs or governance by hedge funds. But at the end of the day, these systems are really governed by capital. And so I feel like it's going to be a normal distribution between retail traders who own MKR and A16Z who owns MKR.

• 40:03David Hoffman?

  It's going to be an interesting story to follow, absolutely.

• 40:05Ryan Sean Adams?

  I agree, absolutely. Okay, Beeple. So we've reported on this in the last few weekly updates. He made a massive amount in the NFT market, $69 million sale. And those funds were raised in ETH. Apparently, it's come out that he immediately converted $53 million of his NFT earnings. It's almost all of them after, I think, the third parties took a chunk from the sale. He converted that from ETH to USD. David, what does this mean to you?

• 40:38David Hoffman?

  I mean, this is just the logical thing to do. Like Beeple, he's got taxes to pay. He received this money in this volatile cryptocurrency, which he wasn't really familiar with. And so it's like the rational thing to sell this into USD. Like, the guy wasn't rich before. Like Beeple wasn't rich. And now he has six... Now he has fifty three million dollars and he has it in a volatile crypto asset that he's not familiar with. Of course he's going to sell it like it'd be crazy not to. Now, at the end of the day, like we can say, but like he's going to miss out on all the gains like blah, blah, blah. Like, and I think you're kind of right. Like this is going to ultimately, I think, turn into a Bitcoin pizza story. This is going to be the people ETH story.

• 41:19David Hoffman?

  But at the end of the day, I also don't completely don't blame him like he doesn't understand ETH is ultrasound money. He doesn't understand Ethereum is the native settlement layer on the internet. He just got paid fifty three million dollars for making some digital art. Like, we don't have to hold him accountable to make sure that he just like holds ETH so like he can help us pump our bags. Like, no, like, let the guy cash out.

• 41:40Ryan Sean Adams?

  Yeah, totally agree. He had like full, he owes the community nothing. He has the full ability and right to cash out. I do think at some point in the future, he may be regretting this, but who knows? Maybe, maybe not, you know, maybe he's just happy with like, he should be happy with fifty three million dollars.

• 41:55David Hoffman?

  Yeah, what does that mean where he's crying with the cash, wiping cash with the tears away from his eyes with dollar bills?

• 42:00Ryan Sean Adams?

  It's gonna be okay for people. Yeah, it's gonna be okay for him. But I do think that, um, you know, the that this is why it's also important to get the narrative out that that ether is a store of value because people don't quite understand and they might have may be making some decisions that they later regret sort of ETH pizza type moments. The other thing he said here, which I understand the context is that NFTs are absolutely a bubble. So he's feeling that he's feeling like I just created a piece of digital art. It just sold for sixty nine million dollars. I don't understand any of this. I'm just gonna like get out while this thing is bubbling and like end of story because it could be over tomorrow. So I I understand that perspective too.

• 42:42David Hoffman?

  Yeah, daily reminder that one year ago ether was one hundred dollars. So.

• 42:48Ryan Sean Adams?

  Crazy.

• 42:48David Hoffman?

  It's probably it's time to sell if you're people.

• 42:51Ryan Sean Adams?

  Number of ETH validators. This is a tweet from Evan Van Ness. So one thing that people don't understand is the sheer amount of validators in ETH 2.0 right now versus other proof of stake chains. So this is a, this is a table of ETH 2 validators. There's 110,000 unique validators versus Tezos. There's about 400 versus Cosmos, 125 versus other proof of stake networks like Nano, 117. Ethereum is a different flavor of proof of stake. I think people miss that. You know, proof of stake is not all alike. There is

• 43:32Ryan Sean Adams?

  various levels of democratization of your ability to actually run a node. And Ethereum is on one end of the spectrum, which is the most decentralized proof of stake consensus mechanism that exists right now. Some of these other proof of stake networks are much less centralized or much less decentralized. Any takes here, David?

• 43:54David Hoffman?

  Yeah, it's important to note that like validators on Ethereum are inherently different because like you could be running multiple validators on one machine, right? Like one validator equals 32 ETH. Two validators equals 64 ETH. If you have 64 ETH, you can stake it on one machine. Tezos and the 397 validators there, that might actually be 397 unique machines. I think that's true. Still, only less than 400 is incredibly like not decentralized. That is not a good number. And so like there is some parsing apart to fully understand the impact of this number. But at the end of the day, the economics, the game theory

• 44:34David Hoffman?

  of this is converges upon decentralization no matter what, because you know, maybe you have 3,200 ETH and you have 100 validators. Well, you have the 100 times more incentive to protect Ethereum, right? And so the game theory holds up.

• 44:51Ryan Sean Adams?

  Absolutely. All of these proof of stake networks have different trade offs with respect to decentralization, other things. Elon Musk, another tweet came out this morning. Don't defy DeFi. So now Elon is talking DeFi. So it was like Dogecoin, it was, you know, NFTs, it was Bitcoin, and now it's DeFi. What does this mean? Is he just trolling all of us, David?

• 45:16David Hoffman?

  No, no, this is him. I mean, no, I don't know. But here's my opinion. He's going down the DeFi rabbit hole and he's figuring it out. Maybe he read ETH's ultrasound money. I'm pretty sure he came across Bankless earlier in his lifetime. And so who knows? Who knows?

• 45:32Ryan Sean Adams?

  Yeah, we'll have to see. Definitely Elon, you are invited on the Bankless podcast. That's a standing invitation. So you just let us know when you're ready. Let's talk NFTs, David. Starkware is raising some funds. This actually isn't specific to NFTs, but it's a technology that Immutable X is using to create sort of an NFT trading chain. We've talked about that a little bit before. But Starkware has just raised a whole bunch of money as well. It's part of the story. And they've got technology that allows you to kind of scale on Ethereum's Layer 2. It seems like so many Layer 2s are using Starkware tech. What should we talk about here?

• 46:12David Hoffman?

  Yeah, I think what this means is that Immutable X is going to launch sometime, maybe next week, question mark? And Immutable X is this, it's got crazy tailwinds behind it. It's both NFTs plus Layer 2. And this is the team behind the Gaza Unchained. These guys have really been optimizing for scale and gas optimization since day one, right? And so I think this is really, people are going to always ask, like, you know, how is Ethereum going to do anything for the world if it costs like $200 to mint an NFT? Well, the answer is Starkware and Immutable X. I'm looking forward to seeing that Immutable X story play out over the long term, because I think they're going to be really important NFT scaling infrastructure.

• 46:53David Hoffman?

  And for anyone that's read my article, "Digital Cultural Revolution," I have high aspirations for what NFTs can do for the future world of creators and art and general digital culture.

• 47:03Ryan Sean Adams?

  Short term, there might be a bit of a bubble in the NFT market. We're not sure. But long term, all of this stuff is hugely, hugely bullish, definitely. Twitter CEO Jack Dorsey sells his first NFT tweet for $3 million, sold it on Ethereum-based platform called Scent. So Jack Dorsey is getting in the scene as well. This is kind of a DeFi-NFT combo and he's active. Jack Dorsey has been a pretty strong Bitcoiner. I don't know if I'd call him a maximalist, but hasn't talked, you would, okay. He hasn't talked much about any other network. So talks a lot about the value of protocols, decentralized protocols, but only talks about crypto in the context of Bitcoin. Do you think that's going to change?

• 47:49David Hoffman?

  Oh God, I don't think so, unfortunately. I think Jack Dorsey is pretty well entrenched. For some reason Bitcoin maximalism kind of just like takes hold in people's brains and when it stays there, it stays there.

• 48:01Ryan Sean Adams?

  Yeah, well, we'll have to see. He's doing something with NFTs, but he's donated all of this to charity. Maybe that's a part of the rabbit hole for him, or maybe he just stays a Bitcoiner forever.

• 48:12David Hoffman?

  I want to know why he did this, though, because that is really the bigger question. It's like, why is Jack Dorsey NFTing tweets? And we know that Jack Dorsey is interested in turning Twitter into more of a client system, where Twitter itself would just run one client, but open, it would enable more, more open source technology to Twitter and allowing different clients to make tweets. And so he wants to decentralize the actual Twitter protocol. So that's interesting. And so that, and that comes from his very deep rooted knowledge in distributed systems and crypto systems. And so why is he minting NFT tweets? Because that's also highly relevant. I want to see what the long-term, he's doing it for a reason. This is a research and development type move from Jack Dorsey here.

• 48:56Ryan Sean Adams?

  Yeah, there's definitely a lot in the broader crypto market for, for what Jack's trying to do, which is kind of create a, create protocols out of social media platforms. We'll see where he goes with that.

• 49:08Ryan Sean Adams?

  Nifty's backed by major investors buys into meme V2 date announced that this story is about the meme founders. Maybe you could explain this project a little bit. They've just teamed up with some pretty large investors to launch something new, something called Nifty's. Mark Cuban is involved in this, Joe Lubin, other VCs. The whole meme story, we had Jordan from Meme on a while back to kind of tell us about the inception of this thing. But it's a crazy bizarre story how this organization formed. And now it's actually receiving like traditional mainstream investment to extend what it's doing, which is like, what, building out meme based NFTs and selling them like an NFT production house?

• 49:53David Hoffman?

  Yeah, the crazy, this is my through line for this story is like how much demand there is for good projects. Because if people who are familiar with meme, the meme story, memes started off as a joke where people minted this token called meme and then they airdropped it to people. And then all of a sudden, the people that it got airdropped to just decided to start doing work for it. And they accidentally created this meme protocol, which is now receiving funding and legitimate seed investment to carry the vision out. And so I'm fuzzy on the details, but it's something along the lines of like, you can mint your NFT and deposit it into meme and meme will issue you like rewards.

• 50:35David Hoffman?

  It's kind of like some bank account, like savings interest system for artists. Again, I'm fuzzy on the details, but like the fact that this thing started off as literally a meme and is now receiving VC funding is pretty crazy. And that just indicates to people how much demand there is for good investments in this space.

• 50:53Ryan Sean Adams?

  Yeah, absolutely. Time Magazine is also getting in on the NFT. This is our last NFT story this week. They've got three special edition covers. One says, is God dead? The other is, is truth dead? And the third, which is probably my favorite, is Fiat dead? So Time Magazine timed the company, of course, like just this is, this is traditional media, right? Now they're Joining the NFT, the NFT, I guess, hype train engine and they're selling these magazine covers. The third one is Fiat Dead is kind of interesting to me, David, because it's like it's clearly targeted to the crypto market to for crypto culture.

• 51:35Ryan Sean Adams?

  Essentially, it's in a way we are incenting mainstream media to give crypto what it wants, which is more crypto culture. And I find that that kind of interesting too. They're definitely trying to sell these to crypto natives.

• 51:50David Hoffman?

  My, my, my head is at the is God dead one actually, and that takes a little bit longer to explain, but God is dead is that Nijitse quote where he ran through the streets and said, God is dead, God is dead. And really what that was a parable of how Nijitse, I'm terrible pronouncing his name, but he was saying like, are, are old institutions, no one pays attention to anymore. And so what is going to organize us in the future? That is what he meant by God is dead. And to me, that's like a heralding of like, are we about to migrate from one set of archaic institutions into what? And that is, that is the question, is God dead? Like, well, if, if our previous ways of organizing are, are defunct, what do we move into? That's my takeaway.

• 52:34Ryan Sean Adams?

  Absolutely. Time is trying to tap into something that appeals to crypto natives for sure with this. Very cool to see them enter. Bitcoin stuff, David, Fidelity, the massive, the massive bank, the massive asset manager in traditional finance. They have now filed for a Bitcoin ETF. David, if Fidelity can't get this done, right? Who can get it done? I think traditional big banks get what they want from the federal government. So I think what this means is that an ETF is all but inevitable. There's no way regulators are going to hold out when their, their lobbyist bankers even want Bitcoin ETF. So a big, big move, I think for, for Bitcoin, big move for crypto in general.

• 53:19David Hoffman?

  Yeah, that's exactly right. If Fidelity can't do it, no one can. And if Fidelity can't do it, again, I'll re-echo what I said in the last week weekly roll-up. If Fidelity can't do it, then this is definitely a political move to protect the interests of the US dollar. And they're putting those interests ahead of retail investors who are getting effed up by trusts, as we talked about with GBTC premium debacle earlier. And so, the listing of a Bitcoin ETF does not help the US dollar. It hurts it. But it's what the people want. And so, we're going to see this play out. Can Fidelity break through to the SEC and get the Bitcoin ETF? Hopefully, they can.

• 53:59Ryan Sean Adams?

  While we're on the subject, David, maybe we should touch on regulation as kind of a category. This is the People's Bank of China has now officially said about their central bank digital currency. Of course, we've told you that they're moving full steam ahead on deploying a digital currency, a central bank administered digital currency in China. The quote is that a completely anonymous central bank digital currency is not an option. This is kind of one of those headlines, which is like, yeah, we knew that. Surprise, surprise. Central banks, government coins do not want, when they go digital, will not preserve anonymity, will not preserve privacy. They want to track all of the transactions for many reasons. I

• 54:44Ryan Sean Adams?

  think, David, that this is going to be true, not just for China, but for any country, Western countries, Europe, anybody that deploys a central bank digital currency, there's going to be a, there's going to be no incentive for these states to actually implement privacy measures as part of the deployment. Like, civil rights groups will fight, have to fight awfully hard to make that happen. And it feels like such an uphill batter, battle. So, the digitization of central bank digital currency means the death of privacy, at least in my mind. That's my prediction.

• 55:20David Hoffman?

  Yeah, that's exactly right. I have no further takes.

• 55:24Ryan Sean Adams?

  All right, well, let's get to this then. FATF is drawing up some cryptocurrency guidance. I think, David, we should, um, this is not, this is not really good news. They may be targeting DeFi and NFTs, but people need to understand what FATF is because it's not central to anyone, nation states, sort of an association of nation states. Can you talk about what FATF is and the implications of this guidance that they've just put out?

• 55:50David Hoffman?

  Yeah, it's kind of this just this global advisory group that all of these global powers, like United States, countries in the EU, even more, that they just listen to and generally subscribe to. And, and people are talking about, well, since they're just an advisory group, does this even matter? But apparently like the social contract between all of these people that subscribe to the FATF as an advisory group, um, according to Coin Center, uh, if a member of the nation state was to refuse to implement FATF guidance, then there could be severe diplomatic or financial consequences could result. So there, there are three specific things that this slew of guidance brings to, and brings to these, brings to these countries who apparently are supposed to listen to the FATF. One is surveillance obligations for non-custodial entities.

• 56:35David Hoffman?

  And so I'm just gonna, I'm just gonna read here because this is outside of my domain of expertise. The draft advocates for an expanded definition of VASPs, uh, virtual asset service providers, the persons or businesses obligated to register and conduct AML surveillance. That, that these people could now include non-custodial, custodial participants in cryptocurrency networks, such as multi-sig minority key holders and various participants in smart contracts and layer two mechanisms. And so I'm actually a Gitcoin multi-sig signer, and so I would have to actually prevent, present KYC AMLs to, I don't know who, uh, maybe, maybe Gitcoin, I guess, I don't, I don't know. But, uh, because I'm a multi-sig minority key holder for something that spends money and manages funds. That's, that's weird.

• 57:20David Hoffman?

  And then there's also scrutiny of peer-to-peer transactions and privacy enhancing technologies. The draft subtly advocates against peer-to-peer transactions and transactions involving privacy enhancing technologies, think Zcash from Naro, but also ZK Money that got released on Ethereum recently. This draft argues that regulated virtual asset service providers should limit support for transactions with non-regulated parties, so-called unhosted wallets, aka uncustodial wallets, aka your personal Ethereum address, and insists that developers of new protocols should limit the availability of private and peer-to-peer transactions by design. Ooh, don't like that. And then last one is customer counterparty identification.

• 58:03David Hoffman?

  The draft recommends that virtual asset service providers should subject all transactions to the travel rule. This would obligate exchanges to collect specific information about who their customers are paying or being paid by. This is similar to the proposal counterparty identification requirements in FinCEN's ongoing midnight rulemaking, the one made by Steve Mnuchin, which said that if you ever want to withdraw money from a crypto wallet, you have to attest to your ownership of the money that you are sending it to, and then vice versa, if you're sending it from your crypto wallet to Coinbase, you have to attest that those are your wallet as well. So just overall, just more and more surveillance going on, or suggested for surveillance from FATF. So yeah, we don't like this.

• 58:48David Hoffman?

  This is bad.

• 58:49Ryan Sean Adams?

  Yeah, I guess it's important to realize that this is just kind of guidance, or some sort of a proposal that they put forward to these countries. But David, this definitely feels like final boss type stuff, right? And it's throwing down the gauntlet and saying, we want all transactions to be identified. We want to know, AML KYC, we want to know the sending and receiving parties on both sides of those transactions. And we don't like peer-to-peer transactions, and we especially don't like peer-to-peer private transactions. So this is final boss stuff. This is stuff that is going to be hard to fight, and I'm not sure what the implications of all this are.

• 59:32Ryan Sean Adams?

  Some folks are saying, look, it's just a proposal. We've seen stuff like this over the years for crypto all along, and others are saying that this might have teeth in the future. So we'll have to watch this one and see how it plays out. I guess in good regulatory news... There are some people like Hester Pierce, crypto mom, as people in the crypto industry know her. Hopefully, she's coming on the Bankless Podcast at some point, too. We've been in touch, who take a much more rational view on this growing industry. So here's a quote from Hester Pierce in a recent speech, I believe. "Perhaps government officials should pause to consider the flip side of crypto. It's value in protecting people from illicit activity."

• 1:00:16Ryan Sean Adams?

  She has always been very pro crypto, seeing this industry blossom, seeing all of the good things that come for countries and citizens that adopt cryptocurrency, and advocates for things like we should have an SEC-approved ETF for mainstream. So there are some good people in regulatory bodies and government that actually understand this space. And wherever possible, David, I think we need to elevate the conversation to them and elevate their roles in government bodies.

• 1:00:48David Hoffman?

  Yeah, and at the end of the day, this is a nuanced subject. But crypto is a populist movement. It's bottom-up, it's money and systems by the people for the people. And there's a certain amount of resonance that we see certain people in governmental bodies have resonance with that populist movement. We saw people like AOC immediately align with what I call a populist uprising with the whole GME debacle, the people versus the hedge funds. And so many members in government just immediately aligned with the people, not the hedge funds. And so there's a certain amount of pro-populism, I would say, in the United States Congress. And I think certain things about crypto, if as an industry, if we represent them in the right way,

• 1:01:31David Hoffman?

  we can convince them that this is actually populist technology for the populist movement, that they are also helping support. And so we need to figure out how to share that populist message in this technology. Because what the FATF is really is doing is helping entrenched players. And people like AOC and Bernie Sanders, the very populist left movement, don't like entrenched players. That's exactly who they're going against. And so there's an angle here that we can definitely work with.

• 1:01:59Ryan Sean Adams?

  Yeah, and the same is true, I think, for the populist right and those groups as well. But this is absolutely a battle for hearts and minds. That is certainly important. We need to propagate these narratives to win that battle. David, have you kept up with this? This is BitClout. Maybe we'll end on this. What is BitClout? This story says it's an insider's only pre-launch. But it's really a social media revamp. So it's almost like a Twitter on some form of a, maybe a Bitcoin-forked blockchain. Have you kept up with this story?

• 1:02:34David Hoffman?

  Yeah, I have not kept up with it. But what I have gathered is that it is supposed to be a censorship-resistant platform for general DeFi stuff. And this DeFi stuff, this version, flavor of DeFi, is leveraging the clout of celebrities to help people speculate and monetize. And so where the censorship resistance comes into play is like celebrities are getting their image monetized by someone else. And if this thing is truly censorship-resistant, then that'll just happen regardless because it's censorship-resistant. And so it's going to be tested, I guess, on that spectrum. But I don't really know much more about it other than that.

• 1:03:14Ryan Sean Adams?

  Yeah, so I looked into it a little bit and I actually tried to use it and started using it. And so one of the interesting things they did is they took about 15,000 accounts from Twitter and they just autoported them over to BitClout, right? It's almost like, you know how Sushi Swap sort of did a vampire attack on Uniswap? It's almost like a vampire attack on Twitter in trying to bring those profiles over. But the other thing that they're doing is like crypto-economically incenting all of these accounts. So every individual who has an account on BitClout gets a certain amount of these BitClout tokens that can be claimed.

• 1:03:55Ryan Sean Adams?

  And then people can buy or sell them, trade the various assets and trade the various accounts. So like, I don't know if you know this, David, but like, you're in here too. Like, if I look up Trustless State...

• 1:04:09David Hoffman?

  How much am I worth?

• 1:04:11Ryan Sean Adams?

  Let's, let's find out.

• 1:04:12David Hoffman?

  Is that how it works?

• 1:04:13Ryan Sean Adams?

  I think, I think it will show you, at least it will show you how much, uh, let's see. Trustless.

• 1:04:20David Hoffman?

  Three S's.

• 1:04:22Ryan Sean Adams?

  There you are. This is you. I'm pulling up your BitClout account, okay? So this is your coin price, $749, okay?

• 1:04:30David Hoffman?

  750 smackers.

• 1:04:32Ryan Sean Adams?

  You've got two followers. People will trade that up or down. And in order to claim this, you have to, um, actually create a, a private key for yourself. And then tweet out something from your Twitter account to actually claim it. But, uh, I don't know if you know this dude, but you've got some creator coins already. So you've got 25K worth of, uh, creator coins.

• 1:04:52David Hoffman?

  Now, I have $25,000 I can go get?

• 1:04:54Ryan Sean Adams?

  Yeah, I'm pretty sure that's what. You can't actually go get it though. So here's the thing, you can go claim your account, but apparently there's only a way to buy BitClout tokens with Bitcoin. Okay. So you can buy them, but they haven't yet turned on withdrawals. So I don't know. I don't know if actually you can like, by the time you go to withdraw this, whether it'll be worth that much. But, um, that's how they're incenting people to start using these. Like, look at, uh, Tyler Winklevoss here. Let's see how much money, let's see how much Bitcoin value he has.

• 1:05:27Ryan Sean Adams?

  So almost 900K is market value that Tyler's been awarded with, uh, the tokens he holds. So, anyway, maybe an interesting.

• 1:05:37David Hoffman?

  Interesting experiment, yeah.

• 1:05:38Ryan Sean Adams?

  Maybe, yeah. The other thing is like, a whole bunch of insiders got in first, right? So, and these are insider VC firms that, you know, pre-invested in this.

• 1:05:47David Hoffman?

  Wow, that's like all of them.

• 1:05:49Ryan Sean Adams?

  It's, it's almost like, it feels a little bit like the opposite in some ways of, uh, some of the fair distribution, sort of community distribution trends that are going on this summer. So, um, some people don't love that about BitClout.

• 1:06:01David Hoffman?

  Yeah. If the, if the actual account holders were made all the money, not the VC funds, that I bet this would have made a much bigger splash.

• 1:06:08Ryan Sean Adams?

  It's possible, but, uh, yeah, we'll have to see where this evolves. David, are you ready to get to, uh, takes?

• 1:06:14David Hoffman?

  Yeah, let's do it.

• 1:06:15Ryan Sean Adams?

  Okay, what's the first take here? NFTs explained in two images. What are we looking at here?

• 1:06:20David Hoffman?

  Yeah, so we are looking, I don't even know if this is an image. We just see a white box with JPEG in it, and then we see another white box with NFT in it, except the NFT box has a little blue Twitter checkmark on it of authenticating the legitimacy of the NFT. And this is what we've been saying about NFTs all along. It's not about the image, it's about the legitimacy, it's about the authenticity. And so if you want to understand why NFTs are going for millions of millions of dollars, when like you can just take a screenshot and get the same thing, it's because one is legitimate and one's not. And people fight over these Twitter blue checkmarks all the time. And Vitalik actually recently just put out a blog post on his blog talking about how

• 1:07:02David Hoffman?

  one of the most underappreciated forces in the world is legitimacy. And so I see this as an extension of that. NFTs are valued because of their legitimacy.

• 1:07:13Ryan Sean Adams?

  Yeah, Vitalik's blog post was just like brilliant this week, and right, that's the same thing that gives cryptocurrencies its value, right? Why is Ether more valuable than Ethereum Classic? Why is Bitcoin more valuable than like Bitcoin Diamond or Bitcoin Satoshi's Vision? It's because legitimacy.

• 1:07:31David Hoffman?

  The people make it so.

• 1:07:32Ryan Sean Adams?

  The people make it so, and the social coordination mechanism underlines all of these cryptoeconomic systems, and underlines like all of our traditional legacy systems as well. It's like this hidden force that operates everywhere. And it's very clear to see, I think, in NFTs, the aspect of legitimacy coming out and being assigned some level of value.

• 1:07:54David Hoffman?

  Totally. Ryan, this one's you. Tell us about efficiency.

• 1:07:58Ryan Sean Adams?

  Yeah, so you know, what's really striking to me with Uniswap V3 launch is how they did it with so few people, right? So Wells Fargo has about 200,000 employees, right? One of the largest banks in the world, 200,000 employees. Coinbase is an order of magnitude smaller in terms of its number of employees, and so an order of magnitude more efficient. They have 2,000 employees. And again, like Coinbase with a... A, you know, a hundred billion dollar market cap is getting, is closing in on Wells Fargo's market cap as well, but they're doing it with much fewer employees, right? And then we've got Uniswap, which is even an order of magnitude more efficient. They're doing everything that they're doing.

• 1:08:41David Hoffman?

  Or two orders of magnitude.

• 1:08:42Ryan Sean Adams?

  Yeah, that's right, David, like two orders of magnitude more efficient. And because of all this, it just really feels like traditional banks don't stand a chance, right? You can do everything you need to do with much fewer employees when you use crypto as a, you know, economic settlement. And then when you get into DeFi, we're even talking about more orders of magnitude more efficient, like the amount that that Uniswap has done, they've, they've grown uni tokens to a $15 billion valuation with just 20 employees. And that's the benefit of deploying something on Ethereum. And I think like, what's the net benefit for the world and society? Right now, the finance industry in the US consumes 6% of GDP.

• 1:09:23Ryan Sean Adams?

  A lot of this is like rent seeking, low value finance, just like a lot of, you know, there's some efficiency there, but there's a lot of paper pushing. There's a lot of inefficiency there. And what if we could allocate all of that GDP to something better? That, that is the promise of DeFi. The arts, you know, social good, public good, who, like, who knows what we could do with that? But this technology is really transformative. You can do everything that like a bank can do with 20 employees rather than 200,000. That's the bottom line.

• 1:09:52David Hoffman?

  Yeah, the Uniswap has a little trick up its sleeve and it's really 20 employees plus Ethereum. And Ethereum is where it gets so much tailwinds, right? Ethereum is providing security to Uniswap intrinsically. And that's why Ethereum as a piece of technology is so powerful. Free security to anyone that builds on it. And so that's where so much of that efficiency comes from.

• 1:10:15Ryan Sean Adams?

  Yeah, free security, a, basically a banking layer to plug right into with, without the overhead of an entire nation state. David, this DeFi poll I know caught your eye. This was a poll done by DeFi Pulse, a Twitter poll. And the question was asked, which quality of the scalability trilemma do you find the most important? Decentralization, security, or scalability? Decentralization won with about 50%. Second came security. Third came scalability. What, what is this, you know, Twitter? Poll, survey, telling you.

• 1:10:50David Hoffman?

  Yeah, what's the takeaway? So happy to see that decentralization is coming in first at 50%, but it needs to be way higher than 50% because, you know, we have security in the legacy system. Like, we have encryption and SHA 256, like encryption that protects your bank account. We've got that. We have scalability. We already have that as well. It's decentralization that is the unique thing that cryptoeconomic networks bring to the table. So the fact that like people are saying, "Well, we know we need priority and we need to prioritize more security and more scalability," is missing the whole entire point. And so like, people that who are in crypto who don't value decentralization are missing the point.

• 1:11:33David Hoffman?

  Like decentralization comes first and decentralization is why this is a movement by the people for the people. And so, again, I'm glad that decentralization came in first. But also, it basically needs to be 100%, right? Because this whole entire industry is based on top of decentralization. If we don't have decentralization, we don't have anything.

• 1:11:52Ryan Sean Adams?

  How do you change their mind, then?

• 1:11:55David Hoffman?

  Probably answering to more scalability, because I think what people are talking about is just like, "I don't want to pay gas fees." And so like, the way that you don't pay gas fees is you use a centralized system. And I think the way that we change people's minds is by solving security and scalability, so that people can be reminded about why decentralization is so important.

• 1:12:16Ryan Sean Adams?

  It's difficult to know that how important decentralization is until something like really bad happens. Like, I feel like the GME moment where everyone realized that, you know, all of traditional finance is completely rigged. Yeah, gated, backdoor deals, that's when they realize the value of decentralization. But absent that, like, you can kind of go on your merry way and not realize that you're on, you know, a centralized system that has these people who can pull the strings.

• 1:12:45David Hoffman?

  Granted, though, if Ethereum and crypto at large is doing things right, people should forget about decentralization, because like, it's securing the system, right? Like, we have decentralization, therefore, we can kind of forget about it. It should just be in the background. You're totally right that like decentralization only becomes relevant when somebody rug pulls somebody or attacks something, or etc. So maybe perhaps that people are devaluing decentralization is actually an indication that the decentralization is actually working.

• 1:13:14Ryan Sean Adams?

  David, I don't know if you saw this report by Ryan Watkins, but it was talking about creating an independent monetary system on top of Ethereum. And the difference between stablecoins that are really pegged to the dollar versus this new crop of non-pegged stablecoins that we've talked about so often on Bankless. And here's a graphic I liked in particular. Let me see if I can find it. It paints Ethereum and Ether as sort of the base reserve asset of the system in the same way that gold was a reserve asset of the legacy traditional financial system before the 1930s.

• 1:13:55Ryan Sean Adams?

  And then these new assets like RAI, which we might talk about OHM and Float, being sort of based on top of this reserve asset. And then DeFi protocols being kind of the banking layer. I was really struck by this comparison and this analysis. Because on the Ethereum side, this is really a self-sovereign, completely, you know, parallel monetary system from the central banks that has no external dependencies. And that's really the vision that we're building for and building towards on top of Ethereum. It's really cool to see a Mazzari analyst put it in this way and like really understand that Bankless is the end destination here.

• 1:14:37David Hoffman?

  Yeah, I made a very similar graphic back when my Ether Triple Point Asset article. And I'm pretty sure that's where Ryan got the inspiration for this one. But when I made it, I made the Ethereum triangle reversed because Ethereum is being built, we are building on top of Ethereum. And Ethereum Ether, the asset, gets injected upwards into DeFi, right? It gets sucked up into the DeFi economy to make these new products. With a legacy system, it's very much a top-down system where gold is captured by the central banks and then forcibly makes the people below it use the dollar. And so I do think that illustration of a bottom-up versus top-down system is important.

• 1:15:15Ryan Sean Adams?

  Let's talk about something else because this is one of those self-sovereign reserve assets that are being built on top of Ethereum, an asset we've talked about called RAI. You said, "Get your brain synced to this new paradigm. USDC, DAI are dollars or dollar coins, but RAI, that is a true stablecoin." What's the difference between a dollarcoin and a stablecoin, David?

• 1:15:39David Hoffman?

  Yeah, we have crypto dollars in USDC and DAI and USD tether, and those are crypto dollars. And then there are stablecoins. I'm trying to get people to re-architect in their brain what a stablecoin is, because, you know, previously, stablecoins are things that are pegged to the dollar, but that's because we didn't really have any alternatives. I think the more accurate definition of what a stablecoin is, is something that is stable that isn't a dollar. If it was a dollar, we would just use the word dollar, but stable is its own thing. And when we call dollars "stablecoins," that is using this false anchor of the stability of the dollar. And people should be reminded that the dollar is actually not stable. We just

• 1:16:20David Hoffman?

  don't have any other anchor better than it to anchor things to. And something that could come out of crypto economics, could come out of Ethereum, is a new paradigms of stability. And so I think RAI, which is, again, a new paradigm in stability, is the new stablecoin. And so Ryan, if you go to my next tweet, I think, what I say when I'm talking about this to Stefan from the Reflexor Project, CEO of Reflexor, the team that put out RAI, I've said, "I've become a huge fan of intentionally using the less optimal word, 'stablecoin,' even though it's still accurate on a technical level, as the mechanism is a claim-to-claim semantic territory." And so I say, "RI," RAI is speaking this next quote, "No, fuck

• 1:17:05David Hoffman?

  you. You're $1. I'm a stablecoin." Because, again, the dollar is not necessarily stable. Stability is referential. You need two points. It's relative. You need two points to claim stability. And what RAI is, is it's a new paradigm in stability. It's a new paradigm in what a stablecoin can be. So, DAI, USDC, those are crypto dollars. RAI is the stablecoin. And that's my take.

• 1:17:29Ryan Sean Adams?

  Yeah, that's a very cool take. I think that's going to become increasingly important to the Ethereum economy and to the crypto economy to have our own source of self-sovereign, non-central bank-dependent monetary assets out there. That's definitely a cool difference. David, we are going to get to what we are excited about and of course, the meme of the week. But before we do, we want to tell you about the sponsors that made this episode possible.

• 1:17:56David Hoffman?

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• 1:18:38David Hoffman?

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• 1:20:23Ryan Sean Adams?

  All right, David, what are you excited about this week?

• 1:20:26David Hoffman?

  I'm excited about, I think, a lot of narrative tailwinds coming for Ethereum. First off, as we all know, money printer go burr is the meme of the year, the meme of COVID, and we're about to have ether burner go burn noises for ether. And that's coming in in July.

• 1:20:44Ryan Sean Adams?

  EIP 1559?

• 1:20:45David Hoffman?

  EIP 1559, the one we know and love. But also, what I'm also kind of worried about for the industry at large is that the these are coming massive coming headwinds for Bitcoin because of the energy conversation. And this is something I've really been thinking about lately. I've actually kind of changed my mind on the whole Bitcoin energy debate because while Bitcoin itself is useful, and I'm glad that it exists, that doesn't mean that the energy consumption of Bitcoin is actually useful energy consumption, because Bitcoin can be a useful product, but literally the way that it works is it becomes a useful product by wasting energy. And so there's an important nuance there because people think that like, whether you what side of the the

• 1:21:30David Hoffman?

  energy debate that you land on is determined on whether you're not you think Bitcoin is valuable or not. But I think there's a more nuanced take where you can say that Bitcoin is valuable, and it's made Bitcoin is made by a race to waste energy, right? Proof of work is also proof of waste. And so Bitcoin can be valuable, but it's by wasting energy and like maybe it's not a waste and when we encompass everything because bitcoin is useful but it's still wasting energy the energy is still unproductive and so I don't think bitcoin the the climate change narrative and bitcoins is wasteful narrative I think will actually be the biggest threat bitcoin has ever faced and as a result that's going to put massive tailwinds behind ethereum

• 1:22:15David Hoffman?

  in its proof of stake form I don't think people are ready to assume that like ethereum is is going to be this green efficient energy savings system that the the ethereum community knows it to be because it's not there yet but once proof of stake is here there's going to be a massive juxtaposition behind bitcoin's intentionally wasteful uses use of energy and ethereum's absolutely zero use of energy and and that is something I'm perhaps I guess I'm excited about but I'm really just like that's going to be an interesting story to follow

• 1:22:47Ryan Sean Adams?

  Yeah, yeah, absolutely. I think so. Today I tweeted something out, you know, we had our ethos ultrasound money episode which is, you know, it's just fantastic, I thought, and there were a lot of arguments about about ethereum there, but there were a lot of I guess criticisms about bitcoin's engine, right? Just Justin Drake, you know, at least compared the bitcoin engine to the ethereum engine and said that the bitcoin engine economic engine was must much less efficient and I tweeted out and I asked if any bitcoiners would like to kind of respond to these criticisms rebut them any like bitcoiners who are like rational and can you know, make an argument

• 1:23:27Ryan Sean Adams?

  it seems that way, but one name that always comes to mind is is Nick Carter, right? And someone actually tagged Carter on that tweet to come respond to some of these, you know, criticisms and he said, I can't I'm too busy fighting people over the energy debate eco-socialists, he called them about the energy debate and I just thought to myself man, I'm really glad I don't have to fight that debate on the like when when we're talking about ethereum in like 18 months once the the network merges and once ethereum transitions to proof of Stake, there is no need to go into the into into media and fight the eco socialists, as as he called them on any of this. You could just say, yeah, and the answer to the

• 1:24:09Ryan Sean Adams?

  energy problem is a more efficient engine and it's called proof of stake and we're not burning energy anymore. So I think you're right. This is the early phases of Bitcoiners having to fight that narrative. And what they're going to have to do is justify Bitcoin's value proposition, not just for consuming all of this energy, but for consuming this energy and and and like in the while there's other systems out there like Ethereum proof of stake and that's going to be a hard case, I think, to to make. And it's not just a one month, you know, media picks up this story. It's going to be like the next 10 years of fights in this whole climate debate.

• 1:24:51David Hoffman?

  And we've already seen Bitcoiners really struggle to explain Bitcoin's value proposition outside of proof of work, because people don't like to admit that Bitcoin is valuable after it's done like a 10,000% three years for the for the three years after you said it was rat poison squared, right? People have the cognitive dissonance of not wanting to accept Bitcoin. And then like and then they just get to align themselves with, well, it's wasteful, right?

• 1:25:14Ryan Sean Adams?

  Right.

• 1:25:15David Hoffman?

  And like, also, imagine not having imagine trying to fight like the the the climate change fight. The whole world is against climate change, right? And then all of a sudden, Bitcoiners are having to align themselves for better or for worse with like the climate change deniers. Like, those are the Bitcoin allies, right? Which is kind of weird. Like, that's not the most ideal group of people that you want to align yourself with. And it's just not they're not finding themselves in good company. Again, regardless of whether Bitcoin is a useful useful end result of all of that energy, that's where Bitcoin has found itself to be, which is not a favorable position.

• 1:25:56Ryan Sean Adams?

  Yeah, agreed. Definitely.

• 1:25:58David Hoffman?

  Ryan, what are you excited about?

• 1:26:01Ryan Sean Adams?

  You know, I'm gonna say Uniswap V3. And the reason is, we get to explore a whole new money Lego. I feel like the the version 3 design is just a it's a significant departure from Uniswap V1 and V2. It's like a whole new design space that that that's opened up. And the cool thing about this is, we've said so often, David, anything that can be tried and made on DeFi will be, right? This is a whole nother design, but we don't lose the Uniswap V2 design. That's still out there, that can still live, that can still accrue liquidity. If the market selects for for V3 and V3 wins over V2, then that just means V3 was superior. But we don't lose anything in the process.

• 1:26:43Ryan Sean Adams?

  And even, you know, forks, Uniswap, formerly Uniswap forks, like Sushi Swap, get to execute on that original V2 design. So we've just created this whole new, potentially revolutionary, automated market maker design called like Uniswap V3. And we don't lose anything that made the previous iterations of this work. And then it's all going to be deployed on optimism come springtime, right? So this is Ethereum Layer 2, an option in action, a whole new automated market maker design. It's just super bullish. And then, of course, David, we finally have Hayden Adams coming to the podcast.

• 1:27:22David Hoffman?

  Finally letting him on.

• 1:27:23Ryan Sean Adams?

  To talk about all of this. Yeah, finally letting him on. Seriously, he's a hard guy to to track down. We got Mark Cuban on Bankless before we got Hayden Adams. So this is a much anticipated episode. So I'm pretty excited about all of that.

• 1:27:37David Hoffman?

  Yeah, for for those that aren't understanding the the joke about Hayden Adams, is we've been trying to get Hayden Adams on the podcast since the genesis of Bankless.

• 1:27:45Ryan Sean Adams?

  Since we started.

• 1:27:46David Hoffman?

  Yeah, we did this like intro series of like all the basic DeFi apps. And we got like Mariano from Maker Dow to talk about Maker Dow, fantastic representative. We got Robert Leschner from Compound to talk about Compound. We got Stani from AVE, we got Kane from Synthetix. And and we had to talk to to not not Hayden. We talked to Caleb, who, again, fantastic representative for from Uniswap. But Uniswap was the only application that we couldn't get the actual founder for. So a whole year later, we're finally getting Hayden on the podcast. It's it's gonna be a good one. We asked him to specifically set aside two whole hours of recording time to make that podcast happen.

• 1:28:23Ryan Sean Adams?

  Yeah, absolutely. So that's much anticipated, a year in the making podcast. All right, David, let's get to meme of the week.

• 1:28:31David Hoffman?

  The whole point about the weekly rollups, the whole point, the meme of the week.

• 1:28:34Ryan Sean Adams?

  This is why the rollups exist. Here it is. It's a, you know, look, it's Justin Drake week, so we got a Drake meme. What's going on in this meme?

• 1:28:42David Hoffman?

  Yeah, this is the traditional Drake meme, the one where like the first panel is Drake saying no, and then the second panel is Drake saying yes. So the first panel is Drake saying no to learning finance at school. And then it's Drake saying no to learning about finance through crypto. And I can personally-

• 1:28:57Ryan Sean Adams?

  He's saying yes. He's saying yes to learning-

• 1:28:59David Hoffman?

  Oh yeah, saying yes to learning about finance through crypto. And I can personally 100% relate to this because I don't know about what you studied in college, Ryan, but I studied psychology and health sciences. And so all of my financial like and like learning has happened through crypto. And I kind of consider myself to be pretty well educated with how finance works. I can keep up with all my like my finance bros that went to actual finance school. And so, you know, learning, learning about finance through quote unquote, the dark forest, where you have to get to the other end of crypto to really understand crypto. And once you do, you know about finance.

• 1:29:35Ryan Sean Adams?

  Yeah, it's funny because I actually took finance as part of my undergraduate. And I feel like I actually didn't truly learn finance until I started learning crypto. And it's because what they teach you in business school, like, you know, you know, traditional education is like corporate finance, which is this small sliver subset of-

• 1:29:52David Hoffman?

  Corporate finance?

• 1:29:53Ryan Sean Adams?

  Of finance, right? It's like finance for the old world. They don't teach you the history of money. They don't teach you like in-depth economics. They don't teach you about the social coordination systems behind all of these monetary assets. They don't really teach you anything from a personal finance perspective in terms of- Yeah, game theory, how to grow your net worth, like individually, you know, long-term games, all of these things. All of that came through studying crypto. So, man, if you want to actually learn finance, like not just like corporate finance, lowercase finance, but finance with a capital F, crypto is the crash course. Man, I think even writing for Bankless and doing these podcasts, David,

• 1:30:37Ryan Sean Adams?

  it's been a massive education experience for me, certainly. And, you know, I haven't, I haven't learned anything as fast as, as in crypto. And the cool thing about it too is like, every decision costs you, you know, like, or, or benefits you. So you get to, you get instant feedback as well.

• 1:30:58David Hoffman?

  Did that work or did you fail?

• 1:31:00Ryan Sean Adams?

  Yeah, exactly. So look, if you're trying to learn real finance, listening to Bankless, learning crypto is the way to do it. I think there's some truth in this Drake meme.

• 1:31:10David Hoffman?

  Absolutely, absolutely. This was a good one.

• 1:31:13Ryan Sean Adams?

  All right, man. I think that's all we have. Of course, risks and disclaimers. DeFi is risky, ETH is risky, so is crypto. You could lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us for another Bankless roll up.

• 1:31:35Ryan Sean Adams?

  Bankless Nation, it is the last week of March. What time it is? Kill it, kill it. Restart.

• 1:31:43David Hoffman?

  What time it is?

• 1:31:46Ryan Sean Adams?

  Will Yoda speak for you on a Friday, Friday morning?

• 1:31:49David Hoffman?

  We should do that for the April Fool's weekly roll up.

• 1:31:53Ryan Sean Adams?

  Oh, that's gonna be fun. All right.

• 1:31:55David Hoffman?

  That'd be terrible. I would rather shoot myself.

• 1:31:59Ryan Sean Adams?

  How would we do it in an accent? Do you have any like, you have a British accent or something? That's what makes it good. All right. If neither of us can do accents. All right.

• 1:32:09David Hoffman?

  I'll just copy Anthony's daily gray intro. Have you heard Anthony's daily gray intro? It's so funny.

• 1:32:15Ryan Sean Adams?

  So we'll try to speak like an Australian and he'll try to speak like an American that week.

• 1:32:21Ryan Sean Adams?

  All right. Ready?

• 1:32:22David Hoffman?

  Yep.