ROLLUP: 2025 Crypto Meta & Predictions | ETH Roadmap Updates | DEX's Hit All Time High | Vitalik Adopts Moo Deng?

This week’s rollup kicks off our 5th year with exciting updates! We dive into our top 10 predictions for 2025, from AI-driven crypto market surges to ETH hitting $15K. DeFi faces new challenges with the IRS’s rule to KYC all “DeFi brokers” by 2027, while Ethereum’s “blobs” dominate as the top ETH burners. DEX volumes soared to record highs in December, and Do Kwon’s extradition to the U. S. moves forward. On a lighter note, Vitalik Buterin adopted a memecoin-inspired pygmy hippo! 🚀 Don’t miss our market updates and insights on what’s next for Ethereum this year. ------ 📣The Rodman Law Group | Best Crypto Law Firm https://bankless.cc/RodmanLaw ------ BANKLESS SPONSOR TOOLS: 🪙 FRAX | SELF SUFFICIENT DeFi https://bankless.cc/Frax 🦄UNISWAP | BUG BOUNTY PROGRAM https://bankless.cc/Uniswap-Bug-Bounty 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle ⚖️ ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum 🌐 CELO | BUILD TOGETHER AND PROSPER https://bankless.cc/Celo ------ ✨ Mint the episode on Zora ✨ https://zora.co/collect/base:0x4be6cd4d402fed49eb2de95fbc8e737e8ffd3e7f/6?referrer=0x077Fe9e96Aa9b20Bd36F1C6290f54F8717C5674E ------ TIMESTAMPS & RESOURCES 00:00 Welcome To 2025 04:42 MARKETS https://farside.co.uk/?p=1518 05:55 ETF Flows https://x.com/Cointelegraph/status/1874342291114008989 https://x.com/nategeraci/status/1872415447276257654 10:07 Movers Of The Week https://imgur.com/poIQakM https://x.com/_kaitoai/status/1874830476189565343 12:40 L2 Update https://imgur.com/EC5mjnT https://imgur.com/BsK26dr https://x.com/smyyguy/status/1873928354661085362 15:57 Blobs Are Burning https://imgur.com/BsK26dr https://x.com/smyyguy/status/1873928354661085362 17:13 Record DEX Volume https://defillama.com/dexs 21:11 10 Predictions for 2025 https://x.com/pythianism/status/1869522809212543204 https://x.com/EffortCapital/status/1873192369891533193 https://www.coinbase.com/en-sg/institutional/research-insights/research/market-intelligence/2025-crypto-market-outlook https://x.com/MikeIppolito_/status/1870938936144761211 https://x.com/galaxyhq/status/1874843463293849712 https://x.com/stacy_muur/status/1871130706157486540?s=46&t=dAxCjT2P_GIrJMvMgWIpfA https://x.com/stacy_muur/status/1871130706157486540?s=46&t=dAxCjT2P_GIrJMvMgWIpfA https://x.com/shaughnessy119/status/1867675171487986086?s=46 https://x.com/cryptopunk7213/status/1874101935353041056?s=46 https://avc.xyz/what-will-happen-in-2025-1 https://x.com/RyanSAdams/status/1874173947731992810 38:28 New IRS KYC Rules https://home.treasury.gov/news/press-releases/jy2762 https://gordonlaw.com/learn/1099-da-revised-draft/ https://x.com/lex_node/status/1872649212804104254 https://www.galaxy.com/insights/research/irs-broker-rule-proposal-puts-defi-in-tough-spot/ https://x.com/TheCryptoCPA/status/1872714549243023830 https://x.com/fund_defi/status/1872694713108545576 https://x.com/KMSmithDC/status/1872869271660818887 https://x.com/jchervinsky/status/1873029020478292346 https://x.com/jchervinsky/status/1873746395137773816 47:30 Ethereum Expectations In 2025 https://tim.mirror.xyz/CuRtFjkujKBqVsdvCGvthiPIYaZyzNc5sWIaExw2UpE 50:37 Microstrategy Accelerates https://x.com/BitcoinNewsCom/status/1871333716511097151 51:37 Do Kwon’s Extradition https://www.theblock.co/post/332477/montenegro-justice-minister-signs-do-kwons-extradition-to-us 53:05 Vitalik Adopts Moo Deng https://x.com/KhaokheowZoo/status/1872151683700248587 ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures⁠

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

• 0:03Ryan Sean Adams?

  Bankless Nation, welcome to the first Bankless Weekly Roll-Up of the Year of Our Lord 2025. David, we're here, we made it. It's been a long time since I've seen you, man. It's, I think this is in our four years of doing this episode, entering the fifth year, or this podcast, and doing the fifth year of doing this podcast, I think the last two weeks have probably been the longest that we haven't even interacted over Zoom virtually anywhere.

• 0:29David Hoffman?

  I think we sent each other four or five messages in Discord over the last three weeks. I've been in Argentina and then the holiday break, went straight into the New Year's break. This is the longest that we have ever just been chill.

• 0:44Ryan Sean Adams?

  I feel like that's good for our mental health.

• 0:47David Hoffman?

  Really good. It's been really good. How are you?

• 0:50Ryan Sean Adams?

  I took, I took kind of a spring, a screen break. So I kind of like disconnected. And then I just like today, I kind of re-downloaded, you know, fired up the OS again and got up to speed on crypto and we're here bringing it up. But like, you gotta, you gotta take a break from time to time. All right. Because like, yeah, it felt really nice. Felt very grounded. I felt more human again. Yeah. You know, I think that we just spend so much time looking at charts on screens, like absorbing information, and it felt good just to be like normal. And just to be still.

• 1:22David Hoffman?

  That was the most normal I have ever felt since getting into crypto. Three weeks, while I was out, I put a one-minute-long time constraint on Twitter on my phone. And one minute is just long enough. If somebody sends you a tweet, you can open up Twitter and look at the tweet. But then one minute later, if you, if you start scrolling, you're one minute later, okay, your time, time's up. Time's up. We're done, done for the day. And that was really nice. So if you go to my Twitter feed right now, there's just seven retweets over the last three weeks and zero tweets.

• 1:50Ryan Sean Adams?

  It's very sparse.

• 1:51David Hoffman?

  Which is, that is the first time I've ever done that.

• 1:53Ryan Sean Adams?

  I can't believe you're allowed to do that, apparently. You can get off screens for a little bit in crypto.

• 1:58David Hoffman?

  You can do that. But now we're back.

• 2:03Ryan Sean Adams?

  Taking the pain so you don't have to be on Twitter all the time, Bankless listener. We got a really busy week. Actually, we're going to start with the curated list of our 10 favorite predictions for 2025, because everyone wants to know what's going to happen this year. We've got 10 fantastic things to look forward to. What else we got?

• 2:21David Hoffman?

  The crypto AI sector did not get the memo of the holiday break season. Many tokens are up 3X from their pre-Christmas prices, which is extremely recent. This is like 10 days ago. So that's pretty nuts. And then also some less fun news. The IRS is about to force all DeFi brokers to KYC their users, which, as we know, doesn't make any sense in the crypto world. So we're going to talk about this. Who is actually viewed as a DeFi broker and what might they need to do?

• 2:51Ryan Sean Adams?

  Also, blobs became the top ETH burners, which is pretty impressive over a seven-day time period. DEXs hit their record highs in December. DoKwon is about to be sent back to the US, into US hands. And Vitalik Buterin adopted Mu Dang, you know, the cute little hippo?

• 3:08David Hoffman?

  What a headline.

• 3:09Ryan Sean Adams?

  That's Vitalik's now. Vitalik owns that, I guess.

• 3:12David Hoffman?

  Vitalik doesn't own that.

• 3:14Ryan Sean Adams?

  He's supporting him.

• 3:15David Hoffman?

  Before we get into all that news and more, a message from our friends and sponsors and our lawyers, the Rodman Law Group, our Bankless lawyers, want you to know that they are the best damn lawyers in crypto. And I believe this sentence wholeheartedly, "best damn lawyers." Dave Rodman and Rodman Law are crypto native lawyers. I was hanging out with Dave Rodman at DevCon in Bangkok, walking around the venue while he was rocking the Tornado Cash t-shirt, which I think is pretty damn based. Rodman Law has been helping out Bankless for all of our lawyer needs. If you are a startup or, you know, even an individual who's operating heavily in this space, you kind of need a lawyer.

• 3:55David Hoffman?

  Preemptively, even preemptively. Having Dave Rodman just a phone call away, a Telegram message away when we need him. For example, when Justin Sun sends us a cease and desist for writing a bearish statement about Tron, it was really nice to have Rodman Law. They know about crypto. They are in the trenches with crypto. They know how to be pragmatic, which is what many lawyers in crypto don't know how to be about pragmatic in crypto. And so they are offering you a free consultation with Rodman Law, banklist.cc/rodmannlaw, to schedule a free consultation with the best damn lawyers in crypto.

• 4:28Ryan Sean Adams?

  They really are best damn lawyers in crypto. Go establish a relationship with Rodman Law Group. Even if you don't think you need a crypto lawyer, you actually do need a crypto lawyer.

• 4:38David Hoffman?

  You need a crypto lawyer before you need a crypto lawyer.

• 4:41Ryan Sean Adams?

  Yes, exactly. All right, David, let's get into markets this week and the price of Bitcoin. So what did it do over the holiday break? Where are we on the week?

• 4:51David Hoffman?

  We are up 1.3% on the week, starting the week at 95,500, ending the week 96,800. So flat, flatty up, flatty with an up bias. Ether doing something similar, a little bit more green than Bitcoin this week, started the week at $3,333, up 3.8% on the week to $3,450. Still Ether kind of slammed down from where it got above 4,000, which makes everyone feel good. Now we're at the bottom end of the 3,000 range, trying to get our head over 3,500.

• 5:23Ryan Sean Adams?

  Okay, let's look at the one month on Ether. Look at this. Do you remember this? It was early December and we were above 4K. And I was thinking, I was thinking, December for the holidays, I thought Santa Claus would leave us some all-time highs in the stocking. I thought we'd be closing in on 5K about right now. And then just like none of that materialized. So here's to 2025. Maybe this course corrects in 2025 because the ETH ETF flows have been pretty hot lately.

• 5:53David Hoffman?

  Large.

• 5:54Ryan Sean Adams?

  Maybe they are front-running some of the price appreciation that we hope to see in ETH. Tell us about those flows.

• 6:00David Hoffman?

  Yeah, so on the December 31st alone.

• 6:04David Hoffman?

  Ether, the ETFs drove 57 Bitcoin into the ETFs and 10,710 Ether, which is $5.3 million of net inflows into Bitcoin. And Ether had $36 million of net flows into the Ether ETF. That's on December 31st. Overall, December was a huge win for the Ether ETFs. Just really outpacing Bitcoin, really punching above, way above his weight. And we're finally really getting into some very positive numbers on the Ether ETFs. Coming in at $2.6 billion in total net inflows. It was just pretty damn crazy.

• 6:40Ryan Sean Adams?

  That's good to see. I mean, all of that happened, I think, like it started, I mean, we were negative for most of, most of November, weren't we? And then it kind of turned around toward the end of that month and now it's positive.

• 6:50David Hoffman?

  Quickly turned around. And now we are way more positive than we've ever been negative. It really, it really, the momentum changed tune really, really fast.

• 6:58Ryan Sean Adams?

  It feels nice going into the year. Speaking of ETFs, so Bitwise did this cool thing. Bitwise filed for a Bitcoin Standard Corporate ETF, Bitcoin Standard Corporations ETF. And really, the incentive here is to incent the stocks of companies that have adopted the Bitcoin Standard. So they're creating an ETF, an indexy, that's full of these companies. Look at these companies here. All the companies that own, in order to get into this club, get into this ETF, you have to have on your corporate treasury, the Bitcoin Standard, which they define as holding 1,000 Bitcoin or more. So what's 1,000 Bitcoin times the price of Bitcoin? You're $100 million or more worth of Bitcoin on the treasury. If you have that on your corporate treasury, then you get into this club

• 7:43Ryan Sean Adams?

  of the Bitcoin Standard Corporation ETF that Bitwise is going to roll out. Yeah. And I guess the investment base this year.

• 7:50David Hoffman?

  What exposure are you getting? You're getting exposure to companies that put Bitcoin on the balance sheet. But the companies could be anything. It could be a tech company, it could be a bank.

• 7:59Ryan Sean Adams?

  It's weird. It's like, it's like.

• 8:01David Hoffman?

  That's kind of odd.

• 8:01Ryan Sean Adams?

  You're kind of getting exposure to like, you know, companies led by laser eyes, right? It's kind of that, right? It's like. Well, I don't know. Maybe there's, you know, you know, the, the theory that if you're, you know, the. The CEO of the company, the co-founder of the company starts like lifting, like you're doing squats and like bench presses and stuff. They get like gym fit, then like that's bullish or like bald is bullish, right? And like people have run correlations with this. Maybe it's, maybe it's something like that, like you have laser eyes, you can see the future.

• 8:31David Hoffman?

  I don't hate it.

• 8:31Ryan Sean Adams?

  You're stacking Bitcoin. Anyway, this club right now is composed of, you can see it's about, it would be about 22 companies right now with MicroStrategy at the top. No one can touch MicroStrategy. 444,000 in Bitcoin, okay? And then assortment of other companies that Coinbase, of course, has some Bitcoin on treasury, but other companies like Tesla. You might recognize Galaxy Digital, of course, some of these are crypto companies, some, some aren't. Similar, similar scientific, I don't know who they are, but again, it's like this whole own Bitcoin or your corporate treasury kind of incentive meme. Plus an investment thesis, kind of neat.

• 9:10David Hoffman?

  Interesting, I will love to see how this tracks over the year and how Bitcoin pilled company leaders compared to non Bitcoin pilled company leaders. Cause I guess that's the signal that we're going to get from it.

• 9:22Ryan Sean Adams?

  As usual, I'd just rather own Bitcoin than these companies.

• 9:24David Hoffman?

  Yeah, right.

• 9:25Ryan Sean Adams?

  Okay. To each their own. Where, where are we at on the ratio, David?

• 9:29David Hoffman?

  Ratio is, we are kind of still in no man's land. We are higher than the lows. We are not higher than the recent highs. We are at point 055. So still kind of waiting for some action on the ratio. Really no signal here. Total crypto market cap, we are above 3.5 trillion, coming in at 3.57 trillion dollars. Still looking at that $4 trillion number.

• 9:52Ryan Sean Adams?

  Yeah, that was nice hitting that 4 trillion briefly. Okay, tell me about the, well, no.

• 9:58David Hoffman?

  I think we did, I think we got 3.9.

• 10:00Ryan Sean Adams?

  3.9, yeah, pretty close. We didn't hit 4 trillion, so we got that to look forward to. I'm sure it's coming anytime, maybe in January. All right, tell me about some movers of the week that I missed over the holidays. This is brought to you by our friends over at Uniswap with a weekly reminder. Go get the Uniswap wallet, just pops out in your browser, it's fantastic extension. Okay, who, what were the tokens that you were looking at on the, on the week?

• 10:24David Hoffman?

  Two big movers of the week, and these are the top two movers. Usually I go to CoinGecko, sort by seven day and kind of like pick out a collection of the quality tokens that aren't like flukes. But these are actually the number one and number two seven day movers of the week. Coming in at number one, AI 16Z up 150% on the week.

• 10:44Ryan Sean Adams?

  Wow.

• 10:44David Hoffman?

  2.2 billion dollar market cap, followed by Virtuals up 60% on the week at a 4.6 billion dollar market cap. AI 16Z is the token associated with the Eliza framework, which is really kind of leading the charge in producing AI agents. But Virtuals is got this AI agent launchpad to make it super easy to launch your AI agent. This is where AI XBT comes from. This one's on base, AI 16Z is on Solana. And so just it was the last 10 days. In addition to the 10 days before that and the 10 days before that was driven by AI token movement.

• 11:20Ryan Sean Adams?

  It's super impressive. And this at a time when the rest of the crypto market was kind of flat, flattish down.

• 11:25David Hoffman?

  Over Christmas. Imagine how infuriating that is in which like the biggest movers of the week of the meta is happening when you're in the holidays. And I am, I am just gone. I am not paying attention.

• 11:34Ryan Sean Adams?

  Hey, AI agents don't celebrate.

• 11:36David Hoffman?

  Tokens like yesterday.

• 11:38Ryan Sean Adams?

  These? No, you knew about these. Come on.

• 11:40David Hoffman?

  I knew about them, but I didn't know that they had moved to three X their prices since like December 22nd.

• 11:45Ryan Sean Adams?

  It's super impressive. And this is maybe gets into a prediction that we'll talk about. What are AI agents and this whole narrative going to do in 2025? But did you listen to that episode we did with Jensen while you were out from Virtuals Predicall?

• 11:56David Hoffman?

  To that one, yeah.

• 11:57Ryan Sean Adams?

  Did you hear how he described Virtuals basically as like a digital state for AI agents, right?

• 12:03David Hoffman?

  When I heard that line, I was like, oh, Ryan, that nerd sniped the hell out of Ryan.

• 12:07Ryan Sean Adams?

  Yeah, dude, it was over. Yeah, like he knew exactly what to say to me to get me to like, you know, like be uber bullish on this. I should have bought more though. But anyway, there's always more time, right, David? Right?

• 12:18David Hoffman?

  Yeah, this is the biggest opportunity cost. Instead of researching tokens in the trenches, we just do podcasts and we forget to buy.

• 12:24Ryan Sean Adams?

  Yeah, well, you know, sometimes we buy. AI Mindshare, nearly to 60% of all Mindshare. This is according to Kaido AI, which tracks kind of a Different narratives. So completely dwarfing meme coins at this point in time. It's a very hot narrative.

• 12:40David Hoffman?

  Getting into the layer twos, our layer two update brought to you by Frax, crypto's decentralized central bank, which is now a fractal layer two. I've always enjoyed the fractal ecosystem. Okay, so starting to look at 2025, the roll up horse race in base has crossed $15 billion in TVL, up 10% on the week, zeroing in on Arbitrum at its whopping $18.6 billion. So $3.5 billion behind Arbitrum. So base, of course, I think many people have said basis will inevitably become the number one roll up by TVL. We are looking at not that far away, especially when it seems like Virtuals itself adds $3, $4 billion of TVL.

• 13:21David Hoffman?

  Is it token on base? Not all of the token is on base, but a lot of it is. And so I think base is really getting the AI meta tailwinds here. Base usage as well is just a chart that is up and to the right, just steadily increasing the daily activity on base. It's just a straight, straight line. Base usage also has just been up and to the right for such a long amount of time, just consistently up. It's not really ever dipping. But I think we've done something like a 3X, 4X of activity on base since the middle of last year. And so that this chart is only looking to increase. You can also see that that spike of AI activity, the end of December and also to right now.

• 14:02Ryan Sean Adams?

  I think that this, this layer2beat.com, if you go there and you look at the rollups, right? Go to the rollups tabs, you look at them. This is kind of the roll up horse race. And this is sort of the starting line, beginning 2025. And the two big KPIs to take a look at are total value locked, which is, you know, like all the assets on the chain, which is some, you know, almost like the mass of the chain, right? How big it is, how trusted it is, that number matters. And then also the UOPS, which is basically user operations per second. This is kind of like TPS, transaction throughput, but also sort of measures kind of like the complexity. Of a transaction as well, so it's a bit more of an accurate.

• 14:47Ryan Sean Adams?

  So it's basically how many transactions are going through? How much throughput is there on this chain? These are kind of the two big metrics to take a look at for all of these. Arbitrum still hanging on to its number one slot in terms of total value locked. But it's also, you know, like Base, as you mentioned, is catching up to it. It's also being dwarfed right now, at least the past day in terms of UOPS. So user operations on Arbitrum was 15, on Base 155. Okay?

• 15:14David Hoffman?

  Awesome. That's pretty happening on Base.

• 15:15Ryan Sean Adams?

  Yeah, and then you got third OP mainnet, fourth ZK sync era, fifth blast, sixth Starknet, seventh Linnea, eighth Scroll, ninth World Chain, and then 10th Zerkit. I think that this is going to be one of the most interesting kind of leaderboards to watch. Because it almost feels like up to this point, getting to 2025, has just been like the pregame, right? We're just now at the starting line of, okay, we have the tech.

• 15:43David Hoffman?

  And beta.

• 15:45Ryan Sean Adams?

  Everything's beta. And now like it's gonna go and it's gonna be incredibly competitive for the rest of this bull cycle.

• 15:51David Hoffman?

  What is it? Mainnet beta? They've all been in mainnet beta.

• 15:54Ryan Sean Adams?

  Yeah, exactly. Always in mainnet beta. Tell me about blobs, David, because it's been chewing some resources here.

• 16:02David Hoffman?

  Top 10, top ETH burner, the top ETH burner in the last seven days have been blobs. Ahead of Uniswap, which is nuts because, you know, at the end of the day, what do blockchains do the best? They trade tokens. But now the Ethereum blockchain, what does it do best? It burns blobs. So over the last seven days, 490 ETH has been burned due to blobs. Over 480 ETH burned from Uniswap. Dan Smith from Blockworks Research says blob fees hit a share of REV, that's real economic value, hit a record high over the weekend, making up 9.9% of Ethereum's daily real economic value. Base purchased 40% of the blobs, followed by Tyco at 15% and World Chain at 11%. So Base, a huge blob burner.

• 16:48David Hoffman?

  Interesting.

• 16:49Ryan Sean Adams?

  This is kind of cool because this is a prediction that a lot of people in Ethereum have made, that one day blob fees would actually dwarf all other like fees generated on top of Ethereum. And what are blob fees?

• 17:00David Hoffman?

  What the rollup centric roadmap is.

• 17:02Ryan Sean Adams?

  Yeah, blob fees are essentially layer twos, rollups, consuming Ethereum block space. That's what blobs are. So now they're big consumers and it's great to see that thesis play out. Another thesis that's been great to see play out is DEX volumes. And David, they just hit record highs in December, not record highs for this cycle, record highs, period. They've never been higher. Monthly trading volumes soared to over 462 billion, highest ever for DEX volumes. The leaders in decentralized exchanges for the last month in December were Uniswap with number one, 106 billion, PancakeSwap, 96 billion.

• 17:41David Hoffman?

  On Binance Smart Chain.

• 17:42Ryan Sean Adams?

  Yeah, Binance Smart Chain. People forget about Binance Smart Chain, but it's always done numbers.

• 17:47David Hoffman?

  It's big in the East.

• 17:48Ryan Sean Adams?

  And then Radium with OnSolana with 58 billion. So that's where we end December, some record high DEX volumes. I bet we'll exceed those records this month and the month after and many times.

• 18:02David Hoffman?

  You do have to give a tip of the hat to the AI agent meta because of how damn bankless it is. It's bankless by default. So DEX volumes are going to get tailwinds because of AI agents. TVL on-chain is going to get a tailwinds from the AI agent meta. And centralized exchanges are going to really lag because in the same way that we saw this happen in DeFi summer and NFT mania is like this is you, you get benefits, you get premiums by being on-chain.

• 18:30Ryan Sean Adams?

  Hundred percent. You're so right. I actually didn't make that connection. But what you're saying is AI agents, they're not going to open up a Coinbase account or a Kraken account. They can't. Well, they can't, right? I mean, not really. And so they're just going to use the on-chain decentralized exchange resources. And so everything that that benefits AI agents and that upsurge, that'll all accrue to DeFi.

• 18:53David Hoffman?

  That's right. That's right. All right. Coming up next, our favorite predictions for 2025. We've gone around the Twitter sphere and the blog sphere, so you don't have to, and collected the 10 best predictions that we think are also true in 2025, or at least worth noting. And then later, Ethereum's getting a full year of upgrades. What's on tap for the incoming Ethereum upgrades and the ones that come after that? So we're going to get to all of this and more. But first, a message from our fantastic sponsors that make this show possible. Uniswap, the place where AI agents love to trade, on-chain, on whatever chain you're on, actually, whether it's on Ethereum Layer 1 or Base or Arbitrum. But it's also got a mobile wallet, browser wallet for all you humans out there that are listening to this as well. So we're going to go here for Uniswap right now. Uniswap Labs is making history with the largest bug bounty ever.

• 19:36David Hoffman?

  $15.5 million for critical bugs found in Uniswap V4. This isn't just any update. Uniswap V4 is built with hundreds of contributions from community developers and has already undergone nine independent audits, making it one of the most rigorously reviewed codebases to be deployed on-chain. And with 2.4 trillion in cumulative volume processed across Uniswap V2 and V3 without a single hack, the commitment to security and transparency is rock solid. Now, Uniswap Labs is taking an extra step to make V4 as secure as possible with a $15.5 million bug bounty. Head to the link in the show notes to dive in and participate in the Uniswap V4 bug bounty. All the details, from eligibility and scope to the rewards, are there. The Arbitrum Portal is your one-stop hub to entering the Ethereum ecosystem.

• 20:20David Hoffman?

  With over 800 apps, Arbitrum offers something for everyone. Dive into the epicenter of DeFi, where advanced trading, lending, and staking platforms are redefining how we interact with money. Explore Arbitrum's rapidly growing gaming hub. From immersed role-playing games, fast-paced fantasy MMOs, to casual luck battle mobile games. Move assets effortlessly between chains and access the ecosystem with ease via Arbitrum's expansive network of bridges and on-ramps. Step into Arbitrum's flourishing NFT and creator space, where artists, collectors, and social converge and support your favorite streamers all on-chain. Find new and trending apps and learn how to earn rewards across the Arbitrum ecosystem with limited-time campaigns from your favorite projects. Empower your future with Arbitrum.

• 21:04David Hoffman?

  Visit portal.arbitrum.io to find out what's next on your web3 journey.

• 21:11Ryan Sean Adams?

  10 predictions for 2025. All right, we curated these from many of the thought leaders around crypto because every sort of thought leader puts out their list of predictions and we took the best, we thought, from many of them. So why don't we get into the first one here, David? So you picked this one. Vance Spencer Framework, what's the prediction?

• 21:29David Hoffman?

  Vance Spencer predicts that the SPX, which is just an index on the S and P 500, goes to 7,500. Where is it right now, Ryan? 5,800?

• 21:38Ryan Sean Adams?

  You know, it's funny, I had to look this up, but it's something around there, something at 5,800 that range. So I mean, going up to 7,500, that would be a pretty big increase as far as

• 21:48David Hoffman?

  That's a huge year in the stock market, in the stock market, followed by AI delivers on his promises. And since the AI delivers on his promises line is being paired with the SPX to 7,500, I'm guessing he means that that's like AI in the traditional fintech equities space. Well, this is something that is happening this cycle, Ryan, that is unique to all crypto bull markets that have come prior. This is being, this bull market, the crypto AI bull market is happening in parallel to an AI bull market happening in the real world. And so the AI bull market is coming into crypto. Now there's like these two parallel bull markets happening.

• 22:24Ryan Sean Adams?

  Yeah, I think Vance is basically saying that it's a bullish year for stocks and primarily led by the Mag7, right? Is all of these AI stocks will continue to overperform. All right, that's number one. Number two, this is Dee from Blockworks. So stablecoin market cap hits 500 billion. It is currently, a reminder, at 210 billion. That's the take here. Either Stripe or Robinhood launched their own stablecoins is a pairing take and Walmart or Amazon begin accepting stablecoins for payments. Stablecoins, 500 billion. That feels pretty safe to me. What do you think?

• 22:58David Hoffman?

  Oh, I, it's, that's big. It's more than a doubling and doubling something that's already at 210 billion is a big doubling. More than doubling. So like, that's a, that's a pretty bullish prediction. I don't, I don't, I'm not disagreeing with it. I'm not saying I don't think that's a free space at all.

• 23:17Ryan Sean Adams?

  Yeah, I guess that's, maybe that seems aggressive, but I don't know, man. Given the yields that we're seeing in DeFi these days, given kind of, you know, what I expect to be favorable legislation, we could even get a stablecoin bill in 2025. You know, all the fintechs are going to front run that. The

• 23:36David Hoffman?

  If we do hit it, it's going to be a buzzer beater at the end of the year.

• 23:38Ryan Sean Adams?

  Yeah, you think so? I mean, like, think of all the fintechs. They got to get in this. Like Stripe just acquired that, you know, DeFi.

• 23:45David Hoffman?

  Yeah, that could take a while. That could take a year to really get rolling here.

• 23:49Ryan Sean Adams?

  Yeah, that's true. Anyway,

• 23:51David Hoffman?

  I'm, I'm very bullish on the stablecoin market cap. I'm just, 500, 500 billion is just like a big goal. That's a big goal.

• 23:58Ryan Sean Adams?

  That's the prediction.

• 23:59David Hoffman?

  Coming in at three, this is a, an official prediction from Coinbase. The next administration's projected deficit spending, if it materializes, should translate into greater risk buying, crypto buying, as more dollars circulate in the economy. So Coinbase is making the prediction that the fiscal policy of the next administration is actually going to overwhelm any amount of Federal Reserve action, which is, I think, what Lynne Alden predicted when we had her on the podcast not terribly long ago.

• 24:27Ryan Sean Adams?

  Yeah, okay. So this is, it's funny, this is much more formal prediction, you know, like phrasing. So it takes a second to interpret it because it's aimed at institutions, I guess. Deficit spending. So Congress, the executive branch, the US government is going to continue to overspend, right? That's not going to change under Trump. And that should translate into greater risk taking as more dollars circulate. So more liquidity, so more risk taking. So basically, the prediction is risk on, risk on assets for 2025, and then crypto goes up.

• 25:00David Hoffman?

  Government's spending money, we're going to get some inflation, crypto and risk on assets are going up.

• 25:04Ryan Sean Adams?

  That feels pretty reasonable, too. All right, let me give you number four. And by the way, Mike Ippolito had about 27 great predictions, one of my favorite lists of the year, but this was one of them. The US will reemerge as the dominant global hub of crypto. He adds founders will move back and open offices in New York. US conferences will be larger than their Asian counterparts. So

• 25:26David Hoffman?

  Great for permissionless, right?

• 25:27Ryan Sean Adams?

  Yeah. So I guess, you know, everyone comes back to America for crypto on the back of the, the Trump win, the victory. What do you think?

• 25:35David Hoffman?

  Yeah, I think that's right. I think we've already seen indications of a lot of companies coming back home to the United States or coming to the United States for the first time. Coming in at number five, this one's from Galaxy Digital. Five NASDAQ 100 companies and five nation-states will announce that they have added Bitcoin to their balance sheets or sovereign wealth funds. Nice.

• 25:57Ryan Sean Adams?

  Okay, so this is five new nation-states?

• 26:00David Hoffman?

  Five new nation-states.

• 26:02Ryan Sean Adams?

  It matters a lot who those nation-states actually are.

• 26:05David Hoffman?

  Definitely.

• 26:06Ryan Sean Adams?

  It's one thing I would say.

• 26:07David Hoffman?

  Yes, yeah.

• 26:09Ryan Sean Adams?

  I could definitely see that happening. All right, this is number six, Delphi Digital. This is a long one.

• 26:14David Hoffman?

  I like this one. I like this one a lot.

• 26:16Ryan Sean Adams?

  So, the base prediction is crypto splits into two major verticals and everything else gets sidelined. So, two major verticals and everything else gets sidelined. What are these two verticals? The first is Web3 natives, and these are defined as traders that are deeply embedded in the crypto market. These are people that possess a nuanced understanding of crypto's unique characteristics and engage in high-risk trading, including meme coins, AI agents, and pre-sales. The elements reminiscent of the Wild West. So, these Web3 natives, Wild West, that's the first major vertical.

• 26:49David Hoffman?

  Bull market froth traders.

• 26:50Ryan Sean Adams?

  Yeah, okay. We've always had that, but okay, let me go on.

• 26:53David Hoffman?

  In bull markets, yeah.

• 26:54Ryan Sean Adams?

  All right, and then the second major vertical this year is regular investors. These are institutional and retail investors. They often differ in their risk management approaches and generally adhere to a more fundamental investment and trading strategy, viewing crypto as an alternative to the growth, to the stock market. Okay, these are the two major verticals. And then, also point out, the prediction continues. There will be a number of people who are sidelined, and the sidelined people are early-stage DeFi, real-world assets and deep-in protocols that don't secure leading positions in their segments, or at least on their chain. So, there's always going to be sidelined investors, but they're basically saying there's going to be kind of these degens, frontier crypto natives that are trading almost like-

• 27:35David Hoffman?

  They're following the hot ball of money.

• 27:37Ryan Sean Adams?

  Yeah, and that's the growth stuff, right? That's the next big thing, the next wave, whether it materializes fully or not. And then, there's going to be a new class, I guess, of regular investors, but fundamentals types of investors. So, it's degens and it's fundamentals is one way to phrase this.

• 27:51David Hoffman?

  Highly active, highly passive. And then if you're not in the hot ball of money, which they're saying earliest HD5 real world assets deep in, then you're getting left behind. Your pie is not going to grow this year.

• 28:01Ryan Sean Adams?

  Do you have to pick? You think you have to pick either be a web three native or a regular investor? Can you just split your portfolio?

• 28:08David Hoffman?

  I've always liked. Oh, no, you'd definitely split your portfolio. So I, you know, my strategy, take 10% of my net worth, gamble to hell with it. When I make wins, you put it into the long-term, super passive side of, yeah, you do both.

• 28:23Ryan Sean Adams?

  Yeah, do both, not just one. You don't have to pick one lane here.

• 28:27David Hoffman?

  Coming in also from Delphi Digital, this is Tommy from Delphi. He says agent-driven transactions will make up 10% of all on-chain transactions by end of year 2025. And also a follow-up prediction, there will be a wave of buy-in by San Francisco traditional AI developers into crypto AI due to tokens, which afford them the ability to break out of web to AI labs and raise capital and community overnight, which has always been the power of tokens, permissionless capital formation outside of the system. And so tokens pull, the prediction is that tokens create a gravitational pull for AI talent out of San Francisco, out of Silicon Valley and into the Wild West of crypto.

• 29:09Ryan Sean Adams?

  Yeah, I think these are pretty solid predictions. That first one, that AI agents transactions will make up 10% of all on-chain transactions by end of year. How much do you think we are right now? Like, do you know the latest on that? It's probably less than 1%, right? It's gotta be, even though it's starting to increase. AI agents have just only been a thing for like the last couple of months.

• 29:31David Hoffman?

  Yeah, you're right. Yeah, you're right. It's gotta be less than 1%.

• 29:33Ryan Sean Adams?

  All right. This is prediction number eight from EJAS, which is our resident AI expert doing the weekly.

• 29:42David Hoffman?

  AI roll-up, yeah.

• 29:43Ryan Sean Adams?

  AI roll-up with us. So EJAS says this, an AI agent platform will enter the top 10 crypto by market cap. Right now, to get in that club, that's the plus 35 billion club to make it its top 10. So an AI agent platform.

• 29:57David Hoffman?

  Virtuals, after its banger week last week, doing, hitting an all-time high is currently at 4%. 4 billion dollar market cap.

• 30:04Ryan Sean Adams?

  Wow.

• 30:05David Hoffman?

  EJAS is looking for like almost a 10x on that.

• 30:08Ryan Sean Adams?

  A 10x on that?

• 30:09David Hoffman?

  Specifically on Virtus, but that is, that is, Virtus is in the lead at the highest market cap.

• 30:13Ryan Sean Adams?

  Okay, what are the?

• 30:14David Hoffman?

  He's saying 35 billion.

• 30:15Ryan Sean Adams?

  What are the big AI agent platforms? Let me see if I can name them, given my, I did a roll up where you're at, David, and I learned a lot. So.

• 30:22David Hoffman?

  Dude, they're so informative.

• 30:24Ryan Sean Adams?

  There's Virtus. There's AI 16Z and that platform, right? There's also, what, what's am I missing? Those are the two big ones.

• 30:34David Hoffman?

  There are actually quite a lot. There's a pretty big long tail as well. And so I think there's a lot incoming. There's MyShells, which is an AI agent platform. There are, there's kind of going to be one per chain. There's one on the crypto.com chain that I'm forgetting the name of. But I think these things are turning from like kind of a premium service, which is where Virtus started into kind of a commodity. Because a lot of people are competing to become, these are, this is being called the layer one trade of the cycle, which is AI agent platforms.

• 31:06Ryan Sean Adams?

  Yeah, I, I, I think that's a good take and I could totally see that coming true. Let's get to number nine. This was actually was mine from Fred Wilson from Union Square Ventures. He puts out a list every year and I've read these for like 10 years. It's usually pretty interesting. I just pulled off one from his list. TikTok turns all videos into meme coins that can be traded on decentralized exchanges all over the world.

• 31:28David Hoffman?

  TikTok, actual TikTok, the TikTok does this?

• 31:32Ryan Sean Adams?

  Yeah, the TikTok. That's what he said. Okay, but, but hold on. I think you could say, just leave the, leave the prediction as is and say it's TikTok actually, right? Or you could just substitute another large social media entity kind of doing this. And I think like.

• 31:47David Hoffman?

  TikTok makes the most sense.

• 31:48Ryan Sean Adams?

  This feels like a, it almost feels, felt to me like it was a 2021 prediction. You know what I mean? Like the end of 2021 going into 2022, NFTs are huge and people would start making these types of predictions. That was not the time because I think we had massive regulatory overhang at that time. It's like, are NFT securities? Well, the guy in charge of securities says they are. His name's Gary Gensler. And so now that he's gone, now that we have really cheap transaction fees just all across crypto, you can almost see that we have like the fertile ground for this prediction actually happening. So I present that to you. What do you think?

• 32:27David Hoffman?

  No, I can see that. Yeah. I think it kind of remains to be seen how clear the skies are regulatorily speaking. Are they, are people really going to take the maximum freedom that people are saying that we have with the Trump administration? Who's, who's going to go first and start to do really bold stuff? TBD on when that happens and how far they go. All right, Ryan, this next one is also yours. So I'm going to need you to give it to me.

• 32:53Ryan Sean Adams?

  All right, cool. Well, since we didn't have an ETH price prediction on the list, you got to give an ETH price prediction. David, I've been seeing a lot of ETH price predictions from kind of the large institutions. And let me tell you, they're uninspiring to me. People are saying, hey, next year, we could see 7K ETH, 8K ETH. That does not excite me at all. And in fact, I think people are still, they have a 2024 overhang of bearishness on ETH or the asset because it had an okay year, but like not a great year. It's certainly not a Bitcoin year.

• 33:21David Hoffman?

  Gloomy tinted glasses.

• 33:23Ryan Sean Adams?

  Pretty much. And so I felt like all of those bullish ETH predictions were weak. I wanted to give my own. I think 10K ETH is the absolute base case. All right. That's like if, I mean, if we barely get a bull market, I think we're looking at something between 15K and 20K ETH. And if people think that like, that's like, you know, I make these predictions every year sort of thing. Yes, I do. Full confession.

• 33:48David Hoffman?

  You gotta be, you only have to be right once. You only have to be right once.

• 33:51Ryan Sean Adams?

  Honestly, it's only a matter of time until we see these numbers. So like, why shouldn't it be the 2025 bull cycle is my take. You see blob space heating up, you know, fees, revenue, you know, going crazy, the AI meta, all the layer twos heating up. There's a lot of things in place for, for ETH this year. And if it fixes a few things narrative wise, Think it's off to the races. It might even not even need that fix. Could just be the institutional buyers and ETFs that propel us to 10K and above.

• 34:18David Hoffman?

  Passive investors.

• 34:19Ryan Sean Adams?

  It doesn't take that much. I mean, we just saw this happen with Bitcoin. I mean, it feels like a pretty obvious trade to me. What do you think?

• 34:26David Hoffman?

  Yeah. Yeah. To this day, like I've said, we have still not yet seen a complete bull market with both proof of stake and EIP 1559. And now also Block Fee Burn. So we still have not seen what, how price sensitive Ether is to marginal flows incoming to buy. And then the last prediction, this is a Bankless signed prediction. I think we have consensus between myself, Ryan, and our AI expert at Bankless, EJAS. We do the AI rollups, which if you're not listening to AI rollups, you need to be listening to the AI rollups. If you want to be one of the active traders on the frontier in crypto, it is the meta. Then that is the prediction that we are making here. Crypto AI agents dominates the 2025 meta and then hits $250 billion in market cap. Where it is coming in right now at $17.3 billion.

• 35:11David Hoffman?

  The prediction here is it is going to $250 billion for AI agents. This is inspired by EJAS, our co-host of the AI rollups, but I'm co-signing it. Ryan, are you co-signing it?

• 35:21Ryan Sean Adams?

  I think I could co-sign this, right? Again, it's not for sure that this is going to happen, but I feel like this is the, the, the best upside prediction that we have going to 2025.

• 35:31David Hoffman?

  Most precise, most specific, the most bullish.

• 35:33Ryan Sean Adams?

  Yeah. And you know, your 10% DGEN portfolio, you know, that's where I would allocate almost all of that. I would put like 9% on this specific narrative and on that number because to go from 17 billion to 250 billion, that's like a far more upside.

• 35:48David Hoffman?

  Turns your 10% into the 100% and then you take that and you put that into.

• 35:53Ryan Sean Adams?

  Your fundamentals assets.

• 35:54David Hoffman?

  Bitcoin, whatever you want, your fundamentals. Yeah.

• 35:56Ryan Sean Adams?

  100%.

• 35:57David Hoffman?

  The things that are not going to go down 99% and might only go down, you know, 75%.

• 36:01Ryan Sean Adams?

  And what this assumes, of course, is that this gets kind of a narrative upsurge, the same narrative upsurge that DeFi did previous cycle. Where honestly, DeFi hits similar numbers and it got way ahead of itself. It got overinflated. It went too high, of course, and that's basically what I anticipate could happen with AI agents. So this is a huge number to watch and it came from nowhere, by the way. So it's at 17 billion. What was it three months ago? Like under 100 billion?

• 36:28David Hoffman?

  Zero.

• 36:28Ryan Sean Adams?

  Something close to that, right? So incredible.

• 36:31David Hoffman?

  And then we have not a prediction, but a bonus take about predictions. This is, I thought this was funny, from David Phelps, who tweeted out, MFers will write their top predictions for 2025, and then everyone will be like, AI crypto will take off next year. Like, my man, the goal is not to predict what will happen six months ago, which I thought was funny.

• 36:51Ryan Sean Adams?

  So he's just saying everyone's extrapolating in their 2025 predictions. The thing that's hot, like right now, recency bias.

• 36:57David Hoffman?

  Exactly, exactly.

• 36:59Ryan Sean Adams?

  So take these predictions with a grain of salt. Probably will be blindsided by something absolutely crazy that hits us in 2025, and hopefully to the bullish upside, and they were on no one's list. That's usually what happens.

• 37:11David Hoffman?

  That's right. Coming up next, the IRS decides to AML KYC all DeFi over the holidays. A little Christmas present from the tax man. And we're getting an RSA PSA on some other weird tax stuff that happens, because y'all know RSA is the tax guy on the bank list, right, Ryan? And then also, our favorite, Do Kwon, coming back to the United States.

• 37:31Ryan Sean Adams?

  Just not, not in a good way.

• 37:32David Hoffman?

  Not in a good way, yeah. And then also, Vitalik adopted a meme coin hippo. So we'll talk about all of this and more, but first a moment to talk about some of these fantastic sponsors that make this show possible, especially Frax, crypto's decentralized central bank. With over $1.5 billion in TVL, the METH protocol is home to METH, the fourth-largest ETH liquid staking token, offering one of the highest APRs among the top 10 LSTs. And now, CM ETH takes things even further. This restaked version captures multiple yields across Karak, Eigenlayer, Symbiotic, and many more, making CM ETH the most efficient and most composable LRT solution on the market. Metamorphosis, Season 1 dropped $7.7 million in Cook rewards to METH holders. Season 2 is currently ongoing, allowing users to earn staking, restaking, and ABS yields,

• 38:17David Hoffman?

  plus rewards in Cook, METH protocol's governance token, and more. Don't miss out on the opportunity to stake, restake, and shape the future of METH protocol with Cook. Participate today at meth.mantle.xyz. All right, and we're back. We have some drama, some, some bad news coming out of the world of taxes in crypto. Ryan, what do we need to know? Because I don't.

• 38:38Ryan Sean Adams?

  Okay, so let me get you up to speed, David. So this is what I kind of have digested as I came back. So over the holidays, the IRS finalized a tax rule requiring all DeFi brokers, I put that in air quotes, to collect user trading information. So what this does, David, is it could be a de facto AML KYC for all DeFi frontends, and that would start in 2027. So not starting 2025, but 2027. Do you remember all the proposed rule stuff that like came out? That the IRS was basically going to do this? And everyone in crypto commented. We had somebody on the podcast explain this to us. We all commented on the rulemaking. And the IRS received like, I don't know, 40,000 different comments, some of which were AI-generated, one of mine was,

• 39:23Ryan Sean Adams?

  and saying how much we didn't like this rule, basically. Do you remember that? That happened sometime last year? Okay, well, over the holidays, they basically clarified their interpretation of the rule. It's kind of as bad as we would expect. What they're going to do is require all DeFi brokers, which are DeFi frontends, to issue 1099s to anybody who uses the platforms. So they didn't just make this up, Gary Gensler-style. You know how Gary Gensler, his operating model was just like, oh, that, you know, I own this, that's a security. This actually came from some legislation. You remember the Biden infrastructure bill that was signed in 2021?

• 40:06Ryan Sean Adams?

  Well, it included some language around the expansion of broker reporting requirements that would hit crypto, okay? And it didn't quite clarify what a broker was. It was pretty clear that anybody, any exchange that had custody crypto assets would be defined as a broker and have to issue 1099s. But it's super unclear as to whether DeFi would. And that's when, you know, vague legislation, what happens is regulators like the IRS interpret that vague legislation in the way that they wish to interpret it, and they put out a rule. And that, this is the clarification of that rule, and it's kind of bad news. They're saying that this rule applies to DeFi. Does that make sense so far? Yep, I'm tracking.

• 40:49Ryan Sean Adams?

  Yeah, so what they're trying to do is get as many people as possible to fill these things out. You see what's on the screen here?

• 40:55David Hoffman?

  They're trying to get people to voluntarily fill out a form.

• 40:58Ryan Sean Adams?

  Well, okay, so this is a 1099. So anytime you make an exchange, you have some proceeds from a sale of stocks or something, then like the E-Trade or the Schwab, they issue you a 1099 for the proceeds of that exchange. So you know, as a taxpayer, you're like, okay, well, my proceeds were like 5K for the year or something, right? And IRS gets a copy of that too. And they say, oh, taxpayer David Hoffman, you know, the Robin Hood says you owe 5K, so we expect to see 5K for you. So they issue it to you as the taxpayer and they issue it to the IRS. You could see from the IRS's vantage point, they basically want more of these things filled out. Because the more of these they have filled, it's seeing like a state.

• 41:36David Hoffman?

  They want NEXs to fill these things out.

• 41:40Ryan Sean Adams?

  They want somebody to fill it out, right?

• 41:41David Hoffman?

  Somebody, yeah.

• 41:42Ryan Sean Adams?

  And their model is because they know if more people fill it out, they'll get more tax compliance. And they prefer big centralized institutions to kind of fill them out for everybody else. Because then they don't have to go to every individual citizen.

• 41:54David Hoffman?

  Yeah, if Coinbase doesn't fill out the form, then they can just, you know, take Brian Armstrong to jail. So Brian Armstrong is going to make Coinbase fill out the form.

• 42:03Ryan Sean Adams?

  It's way easier.

• 42:04David Hoffman?

  On behalf of all millions of their users.

• 42:05Ryan Sean Adams?

  Yeah, it's way easier. And so some people see this and they're like, well, the IRS is coming out to crush crypto. And maybe there's an element to that. I mean, there's people in the US government that really just don't like crypto. We've seen some of that in Gensler. That's probably true to some extent. But like, a more simple explanation is basically seeing like a state. The IRS just wants more of these forms filled out. And so they, yeah, this is how it works. So they prefer that Uniswap fills it out. They'd prefer that MetaMask fills it out. They prefer that like some sort of centralized entity fills it out. So they can get more, you know, tax compliance and more people paying.

• 42:37David Hoffman?

  The argument about decentralization and permissionlessness just doesn't, they just don't care. They're like, I don't care about your decentralization, fill out the goddamn form.

• 42:44Ryan Sean Adams?

  Exactly. Right? Exactly. And so who is viewed as a DeFi broker? It's still kind of unclear. This is Gabe Shapiro saying, it looks like nearly all DeFi web app providers will be covered. Some wallets will as well. Right? So you can imagine MetaMask swap certainly being covered. You can imagine Uniswap being covered. Probably unlikely That something like EtherScan is covered by this.

• 43:08David Hoffman?

  Right.

• 43:08Ryan Sean Adams?

  But what this means in terms of a compliance is that for every single person who uses Uniswap, let's say, or a MetaMask, Uniswap or MetaMask on the front end side of things would have to fill out the name and address for each customer, social security type information, right? It's kind of like an AML KYC type check because they need to know who to send the form to. So they need to know who's actually pressing the buttons and making the trade. So what this does, David-

• 43:40David Hoffman?

  It's untenable for the design of these systems.

• 43:42Ryan Sean Adams?

  Of course, it just de facto AML KYC's everything. That's like any kind of verb, any kind of action you're trying to make in DeFi becomes all AML KYC.

• 43:53David Hoffman?

  This is the monopoly on violence that the nation state owns, running up against the self-sovereignty of decentralized blockchains.

• 44:02Ryan Sean Adams?

  Yeah.

• 44:03David Hoffman?

  Is it an immovable force runs into an unstoppable object?

• 44:06Ryan Sean Adams?

  Right. And it's, again, it's rulemaking. So it's, remember where this came from? Some vague kind of legislation and then IRIS is interpreting it a certain way. So it could be interpreted differently, but this is how they choose to interpret it, at least for right now. So what do DeFi frontends do? Well, they can either just accept that they're a broker and kind of comply. So that would mean like all the web frontends that use for DeFi, they would not just connect to wallet. They would have to like have you-

• 44:35David Hoffman?

  Sign up, make an account.

• 44:37Ryan Sean Adams?

  Make an account, fill out your information before you click the button and trade, right? Or, that's option one, or they could just block US users.

• 44:45David Hoffman?

  Right.

• 44:45Ryan Sean Adams?

  Because this only applies to US taxpayers.

• 44:47David Hoffman?

  What are they gonna do? What do you think they're gonna do, Ryan?

• 44:51Ryan Sean Adams?

  Right.

• 44:51David Hoffman?

  Are they gonna make all of their users give email, password, you know, address, EIN number?

• 44:58Ryan Sean Adams?

  It puts them in a bad spot. It depends, right? It puts them in a bad spot. And, you know, or they could just abandon all of the front end upgradeability and everything entirely and go full decentralization, right? So you can imagine a world where like Uniswap doesn't actually host the Uniswap front end itself. There's some way that users run this locally or something like that. You know, you become more like a broker if you're taking a fee on the actual trade. So maybe if you're not taking a fee on the trade, then maybe you're not a broker. So you could go full throttle, fully decentralized. And what this means for users, of course, is that you have to share your KYC information, similar to an exchange.

• 45:42Ryan Sean Adams?

  So the rule goes into effect after January 1st, 2027. But the good news is, David, yeah, 2027, the good news is it's two years away. And the good news is crypto is fighting back. This is the DeFi Education Fund. Today's announcement by the Treasury and IRS to finalize their broker rulemaking is yet another attempt by the outgoing administration to undermine the crypto industry. And basically TLDR, we're fighting back. This is Kristin Smith from Blockchain Association. We already filed a lawsuit. So they did all this over the holidays, which is kind of cool that crypto is like not taking this lying down. This is Jake Trivinsky. The crypto industry sued the IRS less than 24 hours after it finalized its anti-DeFi broker rule.

• 46:26Ryan Sean Adams?

  And basically, the crypto industry is saying, you know, according to the Administrative Procedures Act, you shouldn't be interpreting and making a rule in this way. It's like, you don't have the power to do this. And kind of kicking it back to Congress. So and then also, then also, we have kind of the Trump Uno card, which is maybe when Trump comes into office, he goes and reverses. Yeah, he tries to reverse all of these things. And so we got that going for us as well.

• 46:56David Hoffman?

  Okay, so my main takeaway is I'm going to wait for further news.

• 47:01Ryan Sean Adams?

  I think so, probably. It's just kind of, it's just kind of bad that it has, they think it has to be like this because it doesn't have to be like this.

• 47:10David Hoffman?

  This is what I've learned has always been the case with crypto regulation is that it starts basically as bad as possible. And then the crypto community starts rabbling and we get it walked back slowly incrementally into a more favorable position. It kind of seems to be what this world is like.

• 47:26Ryan Sean Adams?

  Yeah, I think we've got some ability to do that going.

• 47:29David Hoffman?

  And we've gotten really good at rabbling.

• 47:31Ryan Sean Adams?

  That's right, that's right. David, tell us what we can expect from Ethereum in 2025. I knew you've been tracking kind of the roadmap, the near term for Ethereum. So what's happening?

• 47:43David Hoffman?

  Yeah, so the EIP mempool of which Ethereum EIPs are getting added to which Hard Fork is starting to settle as we get closer to Pectra as we move forward in time. So things will always be shifting and this is not the final state of things, but there's a little bit of an update here. Pectra, which hopefully goes in this year in 2025. Some of the key EIPs that are currently going to be in Pectra. Max EB, Max Effective Balance. This allows for Ethereum validators to have 32 Ether or more. And so as you accrue Ether, that newly accrued Ether is not just a reward to be claimed, but also itself becomes staked. And this can consolidate a bunch of validators down. Like, so if you're more running, if you have 32, what's 30?

• 48:28David Hoffman?

  You say you have 10 validators, you have 320 Ether, you're running on your machine, you're actually running 10 validators with Max EB, that could actually be consolidated down to one validator. This actually reduces a lot of messaging overhead and actually does impact the scalability of the Ethereum Layer 1, because there's less messaging going on. And so people have enjoyed this EIP for a variety of reasons, both for just staker quality of life, but also for some reducing some bandwidth. So that is most likely definitely going in. Account abstraction for EOA wallets. EOA wallets that's externally owned accounts, that's most likely what your wallet is. So that, so allowing an EOA wallet to also act like an account abstracted wallet, that's going in.

• 49:11David Hoffman?

  Blob throughput increase from an average of 3 to an average of 6. So doubling blobs in Pectra, along with increasing call data costs. These are the current consensus things for going into Pectra. Notably, not PeerDAS. And PeerDAS is a massive upgrade, kind of like a 10x upgrade to BlobSpace. PeerDAS is data availability sampling. It's kind of the next zero to one moment. It's the next order of magnitude moment for BlobSpace. So we're getting a doubling of BlobSpace in Pectra, but unfortunately, we're not getting PeerDAS in Pectra. We're gonna have to wait for Fusaka, which is the next Hard Fork after Pectra to get PeerDAS.

• 49:51Ryan Sean Adams?

  So that probably means we won't get PeerDAS in 2025.

• 49:54David Hoffman?

  We will probably get PeerDAS in later 2026, which is slow.

• 49:59Ryan Sean Adams?

  Which means the only additional BlobSpace we'll get is that increase you said from, you know.

• 50:06David Hoffman?

  3 to 6.

• 50:07Ryan Sean Adams?

  3 to 6.

• 50:08David Hoffman?

  Which is a doubling.

• 50:08Ryan Sean Adams?

  Yeah, but will that be enough? That's the question.

• 50:13David Hoffman?

  Yeah, well, it's gonna, it'll send blob space burn back down to zero for the foreseeable future, but I mean, what was our, one of our predictions is that AI agents represent 10% of transaction volumes on chains. Well, that's not, it's not eating away at pre-existing transactions. That's 10 additional percentage points of transaction volume. So the AI agent meta, I think, will come with a massive consumption of blob space. Moving into some Bitcoin stuff, MicroStrategy wants to accelerate its 2121 Bitcoin plan. So the news is not that MicroStrategy bought more Bitcoin, but I'm sure that it will. The news is that MicroStrategy would like to accelerate its purchasing of Bitcoin. So last year, there was a 2121 Bitcoin plan where MicroStrategy was gonna put in $42 billion

• 50:58David Hoffman?

  through debt instruments and equity to expand its Bitcoin holdings. It's now announced a special meeting for shareholders to vote on speeding up the streamlining and capital raising efforts to make sure that we can put in $42 billion.

• 51:13Ryan Sean Adams?

  Okay.

• 51:14David Hoffman?

  Michael Taylor just wanting to front run himself, so no one else front runs him. So that is going, that's going to be put to a vote.

• 51:22Ryan Sean Adams?

  David, I've seen FOMO before. This is kind of what FOMO looks like, right?

• 51:27David Hoffman?

  It does look like this. It doesn't. Like, Michael Taylor's just self referentially making himself bullish.

• 51:35Ryan Sean Adams?

  Okay, Montenegro, the Justice Minister signed Do Kwon's extradition to the United States. So you guys remember Do Kwon, previous Bankless Podcast, you know, guest. By the way, we have four or five previous Bankless Podcast guests that have gone to prison or on their way.

• 51:51David Hoffman?

  That's because we have everyone on the podcast.

• 51:53Ryan Sean Adams?

  Yeah, well, I told my family this over the holidays and they were like, what? You what? What are you doing over there? Anyway, he is being extradited to the US. So Do Kwon was, of course, the founder of Terra Luna, the collapse. There was some question as to where he'd be prosecuted. So he's being held in Montenegro.

• 52:10David Hoffman?

  There was a fight between, a tug of war between South Korea, of which he is an original citizen from.

• 52:15Ryan Sean Adams?

  I believe.

• 52:16David Hoffman?

  But then the United States, where he went to school, got his First job.

• 52:19Ryan Sean Adams?

  Yeah.

• 52:19David Hoffman?

  He went to Stanford. Do Kwon was at Stanford.

• 52:22Ryan Sean Adams?

  Yeah, he did. And the US won that tug of war. And so.

• 52:26David Hoffman?

  Surprise.

• 52:27Ryan Sean Adams?

  Do Kwon is coming to the US to get prosecuted. So that's going to happen. I don't know how many years he's up for. If he, if he was under prosecution in South Korea, the penalty could be between 20 and 40 years. I don't know if that'll be less significant or more in the US.

• 52:42David Hoffman?

  I'm sure he's happy to get out of the Montenegro jail system, which I cannot imagine is, you know, all that great. I don't think the United States jail system is that great either. I bet the, I bet South Korea is pretty good as far as jails go.

• 52:54Ryan Sean Adams?

  You said happy. I don't know if like happy is a, is an adjective I'd use to describe Do Kwon's situation at like at all. I mean, it's gotta be pretty, pretty shitty.

• 53:02David Hoffman?

  I don't, I don't think you want to be in the Montenegro jail system.

• 53:06Ryan Sean Adams?

  All right, David, now we gotta get to the most important news of the week, which is Vitalik Buterin is adopting a hippopotamus, right? Mu Dang is a hippopotamus, right, of some kind?

• 53:18David Hoffman?

  That is right. Mu Dang, yes, correct. You are correct, Ryan. Mu Dang is in fact a hippopotamus.

• 53:22Ryan Sean Adams?

  But it's like a tiny hippopotamus. It's not, it's a.

• 53:25David Hoffman?

  I don't think she's tiny anymore. Yeah, she's a hippo.

• 53:29Ryan Sean Adams?

  It's a regular hippo?

• 53:30David Hoffman?

  Oh, no, she, she's a pygmy hippo. I didn't know that.

• 53:33Ryan Sean Adams?

  Yeah, tiny hippo.

• 53:35David Hoffman?

  Oh, I thought she was just a baby hippo.

• 53:36Ryan Sean Adams?

  No, that's why she's so cute. Well.

• 53:38David Hoffman?

  Oh.

• 53:38Ryan Sean Adams?

  She might also be a baby pygmy hippo. I'm actually not sure. Someone could fact check us, but.

• 53:43David Hoffman?

  She's becoming just a normal pygmy hippo.

• 53:47Ryan Sean Adams?

  Anyway, the news here is Vitalik Buterin is sponsoring Mu Dang with a generous 10,000 TBH. What is TBH?

• 53:55David Hoffman?

  Thai baht.

• 53:56Ryan Sean Adams?

  Thai baht funding for the, the adoption. Adoption, meaning like basically adopting Mu Dang. But Do Kwon's not taking Mu Dang home, right? It's just paying to support Mu Dang in the Thailand.

• 54:09David Hoffman?

  Is ready for hippo as a pet. That's about $300,000 for anyone who is curious.

• 54:14Ryan Sean Adams?

  All right. So, you know, thanks to Vitalik for doing that, supporting wildlife and the zoo. The zoo thanked him as well. Vitalik responded, actually. Thanks for the warm welcome to the family and your work for wild animals. I'm happy to be the adoptive father to Mudang as she grows up over the next two years.

• 54:31David Hoffman?

  Adoptive father.

• 54:33Ryan Sean Adams?

  And support her with my donation, maybe more, as I set aside 88 ETH for Mudang plus friends. So it's not just Mudang, it's also Mudang's friends that are the beneficiaries.

• 54:42David Hoffman?

  Mudang, up 25% on the week to a $300 million market cap.

• 54:48Ryan Sean Adams?

  What is that? You're talking about a meme coin now, right?

• 54:51David Hoffman?

  Yes.

• 54:52Ryan Sean Adams?

  So Vitalik, Vitalik has, he receives some proceeds from the Mudang meme coin. I believe he's like sold all the proceeds as well.

• 55:00David Hoffman?

  Oh, that makes more sense. I think he's, so he's trying to be a little bit more of like an activist philanthropist meme coin regen influencer type. I think that's his strategy here is like, he knows that he's a subject of meme coin shenanigans.

• 55:15Ryan Sean Adams?

  Yeah.

• 55:16David Hoffman?

  And he's trying to learn how to make that productive.

• 55:18Ryan Sean Adams?

  Yeah.

• 55:18David Hoffman?

  And be making an alliance with, oh, you send me meme coin, I donate to charity. Because I did something, your meme coin goes up. And so that is an alignment of what Vitalik wants, which is capital for charity and an alignment with what the meme coin community wants, which is Vitalik to acknowledge the existence of their meme coin.

• 55:36Ryan Sean Adams?

  It's pretty funny. It's pretty funny. You know, I, so do you know Tyler Cowen? Economist, well, previous bankless guest?

• 55:43David Hoffman?

  Podcast guest, yes.

• 55:44Ryan Sean Adams?

  Okay, so he started a new podcast, which I just sent you an episode that I think you should listen to.

• 55:49David Hoffman?

  Oh, that one? Okay, yeah.

• 55:50Ryan Sean Adams?

  It's Marginal Revolution. Okay, so it's his, it's him and another economist and they just talk about different, like geeky economist subjects. Okay, so anyway, one subject that we're talking about is who should receive the Nobel Prize in economics? And Tyler Cowen goes, I think Vitalik Buterin should receive it.

• 56:07David Hoffman?

  Absolutely.

• 56:08Ryan Sean Adams?

  He said, like, the whole economics world has not paid any attention to crypto. And yet here's Vitalik Buterin using applied economics and actual mechanism design and creating an entire like economy, open, like open finance DeFi economy, and economists aren't even paying attention. He should be the recipient of a Nobel Prize.

• 56:29David Hoffman?

  The economic system of Ethereum is incredible. It's incredible that it works. And it works. And it's doing amazing things.

• 56:36Ryan Sean Adams?

  And I'm a big plus one for that. I would love to see it. I don't think we see it in 2025, but I think we'll see it sometime this decade. I think that happens before 2030 is economists start to wake up to this and start to recognize what's going on in crypto. So, there you go. Nothing to do with Mu Ding, but it does have something to do with Vitalik. David, we'll send him off with this. This is the end of the roll up. Thank you, guys, for being with us in 2025. Of course, you know crypto is risky. You could lose what you put in. But we're headed west. This is the frontier, not for everyone. But we're glad you're with us on the Big List journey. Thanks a lot.