ROLLUP: Arbitrum Layer 2 Launches | LOOT NFT | El Salvador BTC | FTX | ETH & EIP 1559 (Septemer 3rd)

1st Week of September, 2021 🔊 PERMISSIONLESS CONFERENCE https://bankless.cc/permissionlessdiscount ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: 💰 GEMINI | FIAT & CRYPTO EXCHANGE https://bankless.cc/go-gemini 🔀 BALANCER | EXCHANGE & POOL ASSETS https://bankless.cc/balancer 👻 AAVE | LEND & BORROW ASSETS https://bankless.cc/aave 🦄 UNISWAP | DECENTRALIZED FUNDING http://bankless.cc/uniswap ------ 📣 SoRare | Collect and Play! https://bankless.cc/SoRare ------ Topics Covered: 0:00 Intro 3:50 MARKETS 4:00 BTC Price 4:25 ETH Price 5:34 ETH/BTC Ratio 7:40 DeFi Action 9:13 BED Index https://www.indexcoop.com/bed 9:59 Layer 2 Action https://l2beat.com/ 12:09 EIP 1559 Issuance: https://twitter.com/RyanSAdams/status/1432679086158196736?s=20 Adoption: https://twitter.com/blocknative/status/1433206965753171968?s=21 18:44 NFT Volume https://twitter.com/DuneAnalytics/status/1432252689824550914 19:28 Cross-Chain Hop: https://twitter.com/richardchen39/status/1431265424394506244 Connext: https://twitter.com/ConnextNetwork/status/1430873159821971457 22:30 Spot Volume UP https://www.theblockcrypto.com/linked/116381/august-spot-exchange-volume-breaks-1-trillion-for-first-time-since-may 25:00 RELEASES 26:30 Arbitrum https://twitter.com/arbitrum/status/1432817424752128008?s=20 32:25 Sassano Thread https://twitter.com/sassal0x/status/1431278544588443649?s=20 33:00 3AC NFT Fund https://twitter.com/Vince_Van_Dough/status/1432346847113359361 34:40 Merit Circle https://medium.com/@meritcircle/introducing-merit-circle-ea7700fd0c15 35:25 pleasrDAO DOGE https://twitter.com/PleasrDAO/status/1432721875059286031 39:24 Other Releases Gas Estimator: https://twitter.com/sassal0x/status/1433292350713851905?s=20 Floor Perpetuals: https://twitter.com/_Dave__White_/status/1432768645843746817 Arbitrum Raise: https://www.theblockcrypto.com/post/116148/ethereum-scaling-solution-arbitrum-launches-mainnet-raises-120-million-funding Offchain Raise: https://techcrunch.com/2021/08/31/offchain-labs-raises-120-million-to-hide-ethereums-shortcomings-with-arbitrum-scaling-product/ Jobs: https://jobs.banklesshq.com/ 43:00 NEWS 43:54 Chain Split https://twitter.com/kelvinfichter/status/1431336698911338496 45:34 Coinbase Layer 2 https://blog.coinbase.com/coinbase-protocol-team-advances-crypto-community-aa9b3748bac5 47:08 Metamask 10M MAU https://twitter.com/ConsenSys/status/1433055817633345541?s=20 47:53 Not Selling ETH https://twitter.com/RyanSAdams/status/1431224022977630208?s=20 50:20 Larva Labs & UTA https://twitter.com/TheBlock__/status/1432815773085405185 51:40 Mutant Apes https://decrypt.co/79718/bored-ape-yacht-club-sells-96-million-of-nfts-in-hour-for-mutant-apes-launch 55:47 El Salvador Trust Fund: https://twitter.com/TheBlock__/status/1432890332228767748 El Salvador Protests: https://www.euronews.com/next/2021/08/28/bitcoin-protests-break-out-in-el-salvador-as-central-american-neighbours-wait-to-see-its-s 58:20 Twitter BTC Tipping https://www.theblockcrypto.com/post/116320/twitter-appears-to-be-adding-the-ability-to-tip-using-bitcoin 59:20 Tether Squeeze https://twitter.com/Bitfinexed/status/1431267971939323910?s=20 1:00:11 SBF & LedgerX https://www.theblockcrypto.com/post/116134/ftx-us-acquires-crypto-derivatives-exchange-ledgerx 1:01:38 Giancarlo Quits BlockFi https://www.coindesk.com/business/2021/09/01/crypto-dad-giancarlo-to-quit-blockfis-board-after-4-months/ 1:03:33 LOOT & The Metaverse https://twitter.com/TrustlessState/status/1433169234864001032?s=20 1:19:00 TAKES 1:20:30 DeFi for Capital, NFTs for People https://twitter.com/ASvanevik/status/1431058200535601154?s=20 1:21:45 Twitter Identity for NFTs https://twitter.com/ryansadams/status/1431951967643967492?s=21 1:25:20 Diamonds vs. Jpegs https://twitter.com/realnatashache/status/1433098070565195779?s=21 1:26:08 Vitalik’s Thread https://twitter.com/VitalikButerin/status/1433195737907564545?s=20 1:29:43 David is Tired https://twitter.com/TrustlessState/status/1433441995133837315?s=20 1:32:32 What David’s Excited About 1:33:58 What Ryan’s Excited About 1:37:06 Meme of the Week https://twitter.com/flamingodao/status/1432874403717652480?s=21 Moment of Zen https://twitter.com/BanklessHQ/status/1433435923266502671?s=20 ----- 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.

• 0:07Ryan Sean Adams?

  Bankless Nation, it is roll up time. This is the first week of September. Wow, starting to feel like fall, starting to feel like time to get back to school. But I haven't taken the summer off, David. I don't know about you.

• 0:18David Hoffman?

  No, no, the summer has only gotten more and more just like energetic and crazy. And like every, every week that has happened is just like, how are we going to do the weekly roll up? Like, this is absolutely insane.

• 0:32Ryan Sean Adams?

  Yeah. How are we going to fit this within, you know, a two to three hour?

• 0:36David Hoffman?

  How do I explain what's going on?

• 0:39Ryan Sean Adams?

  Guys, we will keep this as short as possible. As always, we're going to cover markets, releases, news, takes, what we're excited about, and with the meme of the week. I think we have a moment of zen for you too. Hey, before we do, we got to talk about our friends at SoRare. NFTs are going mainstream. It's happening this cycle. It's happening now. SoRare is a way to collect, trade, and do fantasy sports with soccer, your favorite soccer players. Europeans will call this football, of course. What's super cool from a tech side is this is NFTs on ZK rollups. So they got the tech figured out. It is fast and seamless. And there's utility along with these cards. So you can play with them in a fantasy sports

• 1:22Ryan Sean Adams?

  type arena. Bankless wants you to play global fantasy football. That is the message here.

• 1:28David Hoffman?

  For those that are into the world of fantasy sports, fantasy sports has now arrived on Ethereum. I was actually just last weekend playing with, hanging out with my friends while they were doing their fantasy football draft. So I kind of expect that to also follow along right after this. Fantasy football is here and it's on ZK rollups on Ethereum. So check it out.

• 1:49Ryan Sean Adams?

  Yeah, absolutely, guys. All right. Collect and play. There will be a link in the show notes, or you could go to sorare.com. That's S-O-R-A-R-E.com and check that out. David, also, we got to talk about a conference. It's coming in 2022, next year, in May, in Florida. It's called Permissionless. We are helping to throw the biggest DeFi conference that's ever been had. I said conference, maybe I should say party, because I think it's going to be both. And we are in the stages of planning that with our friends at Blockworks. I wish I could tell you there were tickets available, but the first tranche is all sold out. That said, there will be new tranches that open every two weeks. So the first opportunity

• 2:33Ryan Sean Adams?

  to get in on that is on the 15th of September. If you are a Bankless Premium member, so you are a member of our Bankless newsletter, you get the premium podcasts, all that good stuff, then you got an additional 30% off discount that's available for you. I am psyched about this conference. I wish people could, could get into it now, but as soon as we tweeted that out yesterday, it was like insta-sold out. But there will be lots of opportunities, hopefully, in the future. I forgot to mention this too, David. Every two weeks, the price goes up on this thing. So it's like crypto. You gotta get in now, or you have to FOMO in at a higher price later.

• 3:10David Hoffman?

  What do you think is gonna go higher, faster, ticket prices or ether? I don't know.

• 3:15Ryan Sean Adams?

  They're both gonna 10x.

• 3:16David Hoffman?

  I'm super looking forward to this. Like, there's, there hasn't really been a DeFi forward slash like Metaverse forward conference yet. And so we're teaming up with the people at Blockworks to help coordinate this and get this done. Like you said, it's maybe a conference, but more of a party. I think they're, and crypto, they're kind of the same. And so, I mean, this, it's not, it's pretty far out. It's May of 2022, so we got plenty of time before it actually happens. But it's going to be a blast. Ryan, I might actually meet you for the first time.

• 3:47Ryan Sean Adams?

  In person?

• 3:48David Hoffman?

  Wow. We might actually host a podcast live on stage in person. That's kind of crazy to think about. But yeah, it's gonna be an absolute blast.

• 3:56Ryan Sean Adams?

  Yeah, check that out, guys. We'll, we'll have more info in the weeks to come. All right, David, let's get to the markets, man. Bitcoin, what's Bitcoin doing?

• 4:04David Hoffman?

  Yeah, Bitcoin started the week at $48,000, fell down to the low, low price of $46,700, and then has zoomed up to $49,970 at the time of recording. It's, it touched 50K earlier this week, but it has not been able to hold its head above water. Overall, up 2.3% on the week.

• 4:23Ryan Sean Adams?

  Nice to see us above 50K, even though it was brief. Let's talk about ETH. Wow, this looks like an ascent.

• 4:29David Hoffman?

  Yeah, absolutely. Ether started the week at $3,000, which was also the low of the week, and it has zoomed all the way up to $3,840 currently at the, and that was the high just set, I think, last night, early this morning. We're currently at $3,810, up 16% on the week. It was absolutely Ether's week this week.

• 4:52Ryan Sean Adams?

  Uh, what day did the Raul Paul podcast come out, David? I wonder if we could see that on the charts?

• 4:58David Hoffman?

  That was, that was exactly on the 30th.

• 5:02Ryan Sean Adams?

  The 30th?

• 5:02David Hoffman?

  Which is the low for the week.

• 5:05Ryan Sean Adams?

  Correlation is not causation, but also, I also wouldn't be surprised. That was a very bullish podcast we put out with Raul Paul, and I think it's set up to be one of our most downloaded ever, talking a lot about Ether. He talks about it as the greatest trade ever, and it's funny because we've been talking about Ether fundamentals for like, three years, right? A long time, but now it's very clear to even smart macro people like, like Raul Paul. So, there you go. All right, what's, what's the ratio doing, David? This is the ETH to Bitcoin ratio. I've got the three month open.

• 5:39David Hoffman?

  As you can tell, the ratio has done phenomenally this week. It started the week at .066, and it touched .0785 at the very top, and it's currently coming in at .076. So if we go to, yeah, to go to the year to date, we are almost breaking into new highs on the Ether BTC ratio. There's been some, some murmurings on Twitter of what happens when Ether breaks its all-time highs before Bitcoin does. That's kind of like the sentiment right now.

• 6:09Ryan Sean Adams?

  David, speaking of sentiment, I saw Chris Berninski tweet. He said something to this effect. Bitcoin no longer has the stranglehold on crypto culture, and in, in kind of the mainstream mind, that has transitioned. And I think that's true. NFTs are incredibly bullish for Ether. Now it's got this narrative, EIP 1559, burn. Yeah, it's hard not to. Agree with Raul Paul.

• 6:35David Hoffman?

  Yeah.

• 6:35Ryan Sean Adams?

  That this is going to be an absolutely crazy year. He called for 20K end of year.

• 6:40David Hoffman?

  Like I also call for that.

• 6:42Ryan Sean Adams?

  Okay, David also calls for that. Like, on the one hand, I wouldn't be surprised.

• 6:47David Hoffman?

  Right.

• 6:48Ryan Sean Adams?

  On the other hand, that's a lot of territory to move.

• 6:51David Hoffman?

  Right.

• 6:52Ryan Sean Adams?

  But this is crypto and we'll see how the fall goes. I feel like we've been in the crab season long enough. Feels like everything's prime for breakout.

• 6:59David Hoffman?

  Yeah, absolutely. And going back to the whole culture thing, I mean, it makes sense that a Turing complete platform that has generalizability offers more and more surface area for culture because we can just do anything with it rather than whatever Bitcoin culture is around like sound money. It's just like one instantiation of the culture. On Ethereum, you can have all cultures instantiated and then made economically viable. So there's there's communities, there's DAOs, there's NFT orgs, like there's everything on Ethereum. And like all of that is kind of coming to a head right now.

• 7:30Ryan Sean Adams?

  Look, it just captures all these narratives too, right? Like even the narrative of the metaverse that that's spinning up, we're going to talk about later.

• 7:35David Hoffman?

  Definitely.

• 7:36Ryan Sean Adams?

  It has a key role to play. All right. Well, let's get to some more metrics. We're still in markets.

• 7:41David Hoffman?

  Ooh, new high. Wow. I didn't notice that before. 96 billion locked in DeFi. That's a new all time high.

• 7:46Ryan Sean Adams?

  New all time high. Wow. We didn't look at this going in. Congrats, David. We're almost at 100 billion, sir.

• 7:52David Hoffman?

  100 billion, almost. Wow, wow, wow. I can't, I can't believe I missed that. Can you zoom out to the all time?

• 7:58Ryan Sean Adams?

  Yeah.

• 7:59David Hoffman?

  For tomorrow, you mean? Yeah. Look at this. That is great. That's fantastic.

• 8:05Ryan Sean Adams?

  Yeah, okay. So for people who can't see, this is basically a kind of a straight ascent up from October 2020 or so. Actually, I could go back before that from DeFi summer all the way up to here. We had, I guess, a dip from May until now, and then we're out of that dip and we are on our way to new all time highs with total locked value in DeFi. Let's talk about this. DPI. DPI, DPI to ETH ratio. So is it ETH season? Is it DeFi season? It ain't DeFi season, Dave.

• 8:40David Hoffman?

  Well, not comparatively to ETH season. DeFi tokens had a Fantastic week this week. It's just that Ether absolutely crushed everything. And so the DPI is coming in at point 112, which is meaningfully below my bottom call of point 13. But I would like to say on dollar terms, it's doing great.

• 9:00Ryan Sean Adams?

  He's just hanging to everything he can. It's like this tiny life raft that he's clinging to at this point. You know, David's still smiling though. He doesn't care because he's he's got his ETH position. So, you know, if it goes that way, it's fine too for a time. Well, let's talk about the bed index. So this is a combination of one third Bitcoin, one third ETH, one third DeFi. When crypto is doing well, how does it not also go up? And of course, that's what it did on the weekly. Where did we start? Where did we end?

• 9:27David Hoffman?

  Yeah, we started at $143 and are currently clocking at $164 for one bed index. We maxed out the week at $169. Nice. And again, like bed index, never gone down in the entire. Can you can you zoom out to the the three months? It is up only. It has never ever gone down. It is absolutely incredible. So yeah, the bed index, literally proving exactly what I say every single week, the best crypto index of all time.

• 9:56Ryan Sean Adams?

  Excellent way to get crypto exposure. Hey, let's talk about L2 beat because new layer twos are launching and we are at, I don't think this is quite an all time high. It's not, but it's a 90 day all time high on value inside of layer twos. And I think this is all true layer twos, right? So it doesn't include side chains. But look at this new entrant to the mix here. That guy?

• 10:19David Hoffman?

  Wow, look at that.

• 10:21Ryan Sean Adams?

  Look at that.

• 10:21David Hoffman?

  Plus 200 and 2,700% increase. I mean, that's just, I mean, it's 21 million dollars. So it's like relatively new, but like, we're going to see very large percentage increases on on both optimism and Arbitrum over the next few weeks. And this is why we have started to get ahead of of this narrative. But other other L2s are also doing fantastically. Look at Immutable X up 27% on the week. We got a DYDX up 11% in value locked on the week, almost breaching $300 million locked. A ZK Sync up 15% on the week. Aztec plus 21% on the week.

• 10:57Ryan Sean Adams?

  Looks so rare.

• 10:58David Hoffman?

  L2's are up only. So yeah, look at that. Good for you guys.

• 11:02Ryan Sean Adams?

  11 million locked.

• 11:04David Hoffman?

  Not a small number.

• 11:06Ryan Sean Adams?

  Yeah, this of course is a ZK roll up as well. Really cool, man. I, you know, I, I wonder if you could almost like bet on what's going to go up, like sort of horse race style.

• 11:16David Hoffman?

  How to get synthetic gases on these things?

• 11:18Ryan Sean Adams?

  Well, I, I feel like so Arbitrum is definitely going to be in the top like three before long. It just launched, right? I also, I, I'm pretty bullish on ZK sync, not yet, but in the future, when they roll up, when they roll out an EVM compatible ZK roll up, that's going to be really cool to see. So some great, Immutable X, dude, that could be a dark horse as well. As, as soon as they onboard some like large NFT projects and, um, you know, everyone, everyone loves NFTs, but gas is too high on mainnet. Immutable X is kind of solving that. So a lot of cool solutions being built out here.

• 11:55David Hoffman?

  Also new to l2b.com is that risk panel. So they've actually added in some like, you know, ways to measure, measure risks, which is pretty cool.

• 12:03Ryan Sean Adams?

  Escape hatch.

• 12:04David Hoffman?

  Yeah.

• 12:05Ryan Sean Adams?

  Interesting. Very cool. Spend more time looking at that. Okay. Let's talk about ETH issuance, David. This is in the context of ultrasound money. This is the effect of EIP 1559. I saw CoinMetrix put out this chart. And it just, I mean, it shows you very visually. Tell me at what point EIP 1559 gets deployed, right? It's this point where you see ETH issuance, it's steady, it's above 4%, you know, 4.1%. EIP 1559 hits and bam, down, annual issuance down to 3%. Down another leg, annual issuance down to like 1.5%, down to 1%.

• 12:44Ryan Sean Adams?

  Annual issuance for Ether on its proof of work chain was below Bitcoin for a period of time. And this is the thing to remember as NFT mania like continues as basically, and it, that means it's, it's block space demand mania for Ethereum. And what that means is ETH issuance goes down. So, uh, no doubt in my mind that we will. Be in the ultrasound money territory post merge, perhaps well under it. I mean, what would we be looking at like, you know, negative two annual issuance, negative three annual issuance, something to that effect. Uh, but it's absolutely crazy how quickly ETH gets burnt when block space demand goes off the charts.

• 13:28David Hoffman?

  Yeah. And this is just the symbiosis between all native economies on Ethereum and Ether, the asset. I mean, this is dependent on actual economic activity, right? So like if the NFT mania actually like cools off, then then this would rise back back up. Uh, it's only been heating up and it's also just one sector of Ethereum. Uh, and so like regardless of like the merge, which we, you didn't yet mention the triple halving, which is still on the menu. Like there's just more and more generalized economic activity coming to Ethereum, consuming block space.

• 14:00Ryan Sean Adams?

  Absolutely. Well, let's talk more about EIP 1559 because now we were a month in or so, just about a month in. And we've got some actual visuals, some, some metrics on this. What are we looking at here, David?

• 14:13David Hoffman?

  Yeah. So this first graph is kind of a model for what you would expect for, uh, the gas markets and EIP 1559. So those are, those are two different things. There's the markets for actual block space demand. And then there's the EIP 1559 mechanism. And there's this predicted, um, overshooting based because the gas markets, uh, EIP 1559 is a lagging mechanism. It reacts to the environment around it. It reacts to the gas markets. When an NFT drop comes, everyone apes in, uh, and the base fee goes up and up and up because everyone consumes all of the block space. And so base fee rises 12.5% per block if the block space is maxed out. Uh, and so EIP 1559 responds to the over, over demand, over consumption of block space by increasing.

• 14:58David Hoffman?

  But first there's this overshoot of, uh, of, uh, the base fee is too low and the tips come in. And that's what raises the block space. Uh, and then we actually saw this model, we actually saw this model actually live in real time. Uh, with the, the next picture in this thread, which you can actually see it, it exists. So like first we have this first hump right here. With this gray, this gray tip amount, you also have the purple line, which is the moving average. So they're basically the same thing. And then that overshoots and that tells Ethereum, that tells EIP1559 like, hey, you need to react to this. And then we see EIP1559 take effect. The base fee goes up and then it responds by reducing the tip amount.

• 15:41David Hoffman?

  And then over time, this also settles out as the NFT drop ends. So like the fundamental, the takeaway is that you are seeing EIP1559 allow Ethereum to respond to the environment that it finds itself in. And this is what it takes to have an anti-fragile, maximally like adaptive protocol, rather than something that's rigid and can't react. Ethereum has this EIP1559 mechanism that reacts to the world around it and allows it to maintain stable equilibrium. And this is what it means to have a monetary system operated by algorithms, operated by code.

• 16:14Ryan Sean Adams?

  It kind of reminds me of, you know, buildings they build in areas of the world that are earthquake prone, where they build, you know, an extra, a little bit more sway built into them. So there's an earthquake, the building can sway and doesn't immediately fall apart. Yeah, it's vibes. That's what's happening. Ethereum is just vibing. What does this mean for the average ETH user? So if, if an ETH user sees gas price spike, this generally means that just wait a little bit and they'll come down faster than in a pre-EIP1559 world. Is that the correct interpretation?

• 16:49David Hoffman?

  Yeah, I would also add that like this Ethereum like mechanism that's reacting to the markets means that the users have to react less. As in this, this like Ethereum, this nebulous thing that we call Ethereum is doing its own internal computation. And that means the brains of humans have to do less computation because Ethereum did the thinking for it. So this is Ethereum working for us. Technology is a bicycle for the mind.

• 17:14Ryan Sean Adams?

  I don't, look, I don't want to get too weird on this, but like here's the other thing I think this means is there is this weird notion in Bitcoin that, you know, Satoshi created the perfect mechanism and it was fully baked at the beginning. There was no possible improvement to the underlying mechanism, right?

• 17:33Ryan Sean Adams?

  It just seems empirically false.

• 17:34David Hoffman?

  Right.

• 17:35Ryan Sean Adams?

  Okay, this is not a huge tweak to Ethereum, but it is a slight mechanism change and it's massively improved the system. Right. It's like, I think some iteration on our mechanism designs is hugely important. This is not just, this is technology in addition to money. And like, technology can improve and it can change and can get better. The importance of being able to upgrade and change things when they make sense. Let's talk about some of these metrics coming out of block native. David, what are we seeing from EIP 1559? What is block native showing us here?

• 18:11David Hoffman?

  Yeah, this is just the story of EIP 1559 adoption. You can see the differing transaction types, type one and type zero, which is like, you know, EIP enabled, EIP 1559 enabled versus not enabled. There's a big jump in the middle of these graphs right here. I can't remember what wallet provider just started implementing EIP 1559, but we are now well over 50% of EIP 1559 type of transactions. And I mean, again, we're just going to watch this approach 100% over time.

• 18:42Ryan Sean Adams?

  There we go. All right. Let's talk about OpenSea. They've just had a killer

• 18:47David Hoffman?

  Get that bar.

• 18:48Ryan Sean Adams?

  Month, absolutely killer month. 3 billion trading volume in August, 3 billion in August. And it's just a straight line up. This just shows how quickly things can happen in crypto.

• 19:00David Hoffman?

  In July, it looks like there was roughly like 300 million.

• 19:04Ryan Sean Adams?

  Yeah.

• 19:04David Hoffman?

  But we did a 10x.

• 19:06Ryan Sean Adams?

  Nice 10x on the month there. Congrats to OpenSea on that. And NFTs, of course, are just popping off. So that explains a huge chunk of why that's happening.

• 19:15David Hoffman?

  Congrats to all the investors that invested in OpenSea's raise literally like two months ago.

• 19:22Ryan Sean Adams?

  Exactly. This is, yeah, this is just such a crypto thing to happen. Talk me through this tweet. This is one from our friend, Richard Chen, who always digs into the analytics, the on-chain analytics behind these chains. We did an episode with him where he's talking about his approach to Dune analytics. Looks like he's got some analytics based on Cross chain, cross chain bridging. What's going on here?

• 19:46David Hoffman?

  I believe maybe it was last week or the week before, but one of my takes was that the whole phrase of cross chain is going to move from layer ones to layer one cross chains like Bitcoin to Ethereum or Ethereum to like Tezos. And instead, cross chain is going to start to increasingly mean cross layer twos. And I think this is evidence of that. Richard Chen says hop protocol, which is a protocol that lets you hop from layer two to layer two and then also back to Ethereum. He says, is doing the same amount of volume as Thor chain, which is a layer one to layer one, like swap protocol, liquidity protocol. Doing the same amount of volume of Thor chain before Thor chain got hacked, which was another point I made is cross chains are really complicated and really dangerous.

• 20:27David Hoffman?

  Whereas layer two to layer twos all operate on the EVM, all use the same standards and are much safer. And so this is exactly proving exactly what I was talking about. Layer twos to layer two hopping is going to be a hundred times easier, a hundred times more safe. And is ultimately going to become whatever it means to say cross chain. Cross chain is now L two to L two.

• 20:47Ryan Sean Adams?

  I think we got to finish the rest of this tweet too, because this is important. He said that about hop protocols doing the same amount of volume as Thor chain before the hack. And then he says, no token, there's no army of shills, just a missionary team, heads down, focused on building. Shot across the bow to Thor chain. I don't know. I don't know what Thor chain is doing now in terms of market cap. It's like I saw at one point in time, like six billion or so. David, you could probably look that up, but like it's, it's kind of the difference between, I think, actually like building and seeing the numbers on chain and investing in that versus investing in a potential narrative. And you can make both, you can make money both ways in crypto, right?

• 21:30Ryan Sean Adams?

  From a fundamentals perspective or from a narrative perspective. And yes, these two things also blend. But when in doubt, man, always, always buy fundamentals, always invest in the on-chain data. That's at least how, how I think we approach things at Bankless. Yeah. So what was Thor chain's market cap, David?

• 21:48David Hoffman?

  Currently coming in at 2.7 billion.

• 21:51Ryan Sean Adams?

  2.7 billion. Real, really interesting to see how that evolves. Of course, connects is also doing some big things here. This is another hop type protocol. This is another bridge between different layer twos. And this is an arbitrum to polygon in 70 seconds transaction. The tweet says, you aren't excited enough. I do feel like that's true. I don't think the entire crypto space realizes how good bridging is going to be between these layer twos before long.

• 22:19David Hoffman?

  The bridges are already being finished before people have even migrated onto layer twos.

• 22:26Ryan Sean Adams?

  Absolutely. All right. Well, let's talk about this, David. Maybe we'll end markets with a spot volume up and what that means. So apparently August, if you look at centralized exchanges, the spot exchange volume broke $1 trillion. Okay. And this is the first time it's done so since May. So if you look at the numbers here, this is kind of what the chart looks like. This is the story. If we're to sum up the entire market section, it feels very much to me like we've gotten through crab season. We're at the end of the summer and bullish fall. That's what this is looking at like, like Thanksgiving is going to be one of those Thanksgivings where you might be sitting around with your family and everyone's asking you about crypto.

• 23:10Ryan Sean Adams?

  And I don't know what they'll be asking you, but be asking about NFTs or Ether or like tokens or Bitcoin or what. But it feels like it's going to be one of those Thanksgivings, David.

• 23:20David Hoffman?

  Oh, that's exactly right. And we'll talk about this later in the roll up, but like the cool thing about the last few months of Ethereum and of DeFi and of crypto is that like things that we've created lately, while they're all kind of crazy, like we're selling like JPEGs for millions of dollars. Like JPEGs are still easier to understand than like Uniswap, right? Like, and so some of these conversations are going to be easier to have.

• 23:41Ryan Sean Adams?

  Yeah, absolutely. You could show people, you know, absolutely. All right, guys, we're going to be back.

• 23:45David Hoffman?

  Show them your penguins.

• 23:47Ryan Sean Adams?

  Show them your penguins. Why? That's worth hundreds of thousands of dollars. Then try to explain that. We should do an article on that, David. All right. We are going to be back with releases, but before we do, we want to thank the sponsors that made this episode possible.

• 24:01David Hoffman?

  Proud to be supported by Uniswap. Uniswap is a new paradigm in asset exchange infrastructure. Instead of a cumbersome order book system where trades are matched with other humans, Uniswap is an autonomous piece of software on Ethereum, which is what Ryan and I call a money robot. No human counterparties or centralized intermediaries, just autonomous code on Ethereum. Input the token you want to sell and receive the token you want to buy. Something brand new in the Uniswap ecosystem is the Uniswap Grants Program is now accepting applications for grants. We have been saying this for a while and we'll say it again. DAOs have money and they are in need of labor. If you think that you have something to contribute to the Uniswap DAO, apply for a grant to Uniswap. Just look at the size of the Uniswap treasury.

• 24:47David Hoffman?

  It's almost $3 billion. This mountain of capital is looking for labor. Do you have something of value to contribute to the Uniswap DAO? No matter how big or small your idea is, you can apply for a UniGrant at unigrants.org and help steer Uniswap in the direction that you think it should go. That's exactly what we did to get Uniswap to be a sponsor for Bankless and you can do the same for your project. Thank you, Uniswap, for sponsoring Bankless. Balancer is a powerful platform for flexible automated market makers. Typical AMMs just have two tokens inside of one liquidity pool, which can lead to fractured liquidity across the many pairs in DeFi. With Balancer, you can access the full power of multiple tokens inside of one single AMM, which unlocks an entirely new playing field of possibility.

• 25:32David Hoffman?

  This makes Balancer an awesome building block for so many different use cases. Balancer pools can make asset indices, but instead of paying fees to portfolio managers, Balancer lets you collect the fees from traders who use your portfolio for liquidity. Additionally, Balancer smart pools can be programmed to have properties that change according to predetermined rules, such as changing the swap fee based on market conditions, or even liquidity bootstrapping pools, which can help you launch and distribute your token with day one liquidity. At Bankless, we use a liquidity bootstrapping pool to sell our BAP t-shirts to much success. Balancer V2 brings powerful new features that makes your money work even harder for you. In V2, idle tokens are capable of generating yield in DeFi without sacrificing liquidity in the pool using Balancer's asset managers.

• 26:18David Hoffman?

  Balancer's Vault Architecture lets you trade between Balancer pools at a fraction of the cost versus trading on other platforms. Balancer's mission is to become the primary source of liquidity in DeFi by providing the most flexible and powerful platform for asset management and decentralized exchange. Dive into Balancer pools at app-balancer.fi.

• 26:39Ryan Sean Adams?

  All right, guys, we are back with the releases. David, we got to start here. Another layer two has shipped. We talked about it before. Now it's actually happening. The tape is being cut. The theme park is open. Arbitrum is ready for business. What does this mean?

• 26:55David Hoffman?

  Oh, God. It means that one of Ethereum's most hyped scaling solutions is that we can go into the theme park and go on all the rides. Not only is the theme park open, but the rides are also open. That's what's been going on for the past like two months or so is that like all these dev teams have been building their rides. The rides have been under construction. Now, most of them are finished. And so now we can go play in this new theme park that's called Arbitrum. And so like the list of things that have been, that are already ready for you to go ride on is like pretty insane.

• 27:23Ryan Sean Adams?

  We're going to go through some of that list. But David, I haven't had an opportunity to actually use Arbitrum. So we're recording this on Thursday just because this has been such a crazy week, but I intend to. My understanding is if like, one of the big, of course, you know, reasons to migrate to Arbitrum is lower gas fees. So it's not eliminating gas fees completely, of course, because you're still ultimately securing things from mainnet. But if you look at Arbitrum versus mainnet, here's one comparison. The cost to send ETH $1 on Arbitrum, right now, gas prices being what they are, about $11 or $12 to send Ether from one address to another. The cost to use a Uniswap, $5 on Arbitrum.

• 28:07Ryan Sean Adams?

  Where on mainnet costs about 80. And this is all with like the governor's on. So Arbitrum still hasn't let everything through. They're throttling transaction throughput and they are deploying this in a cautious way. So I anticipate these gas fees could go down over time, too. Of course, it's partially depending on what mainnet does, but not that bad, right? Like when we talked to Arbitrum, they were anticipating like 90 to 95% reduction in gas fees for typical transactions. And that's kind of what we're seeing right now, which is good. I know one concern I've heard people have is, hey, there's not liquidity yet. And I'm also like, look, we're on day one.

• 28:52David Hoffman?

  Not liquidity, we have to put our money there first.

• 28:54Ryan Sean Adams?

  There was like $2 million in liquidity. And I think I've heard some complaints. So it's like, hey, the theme park's great, but like, we don't have the liquidity yet.

• 29:03David Hoffman?

  You gotta wait when they turn, when the water park turns on, you gotta wait for the water to flow all the way down the slide before you can run up, you can slide on it.

• 29:09Ryan Sean Adams?

  That's what's happening. That's what's happening. And now we're already at 40 million and we saw that on their two scans. So by the time you guys listen to this, I don't know, it could be 60, could be 80 million. It's going to take some time for the water to get down the slide. But yeah.

• 29:23David Hoffman?

  You're so good at names, bro.

• 29:25Ryan Sean Adams?

  I just copy you, David.

• 29:28Ryan Sean Adams?

  Layer two is here. This is what we've been waiting for. This is different than optimism in that everything is kind of generally available out of the gate. They're not deploying things in application at a time. Yeah. Well, what's your take here, David?

• 29:42David Hoffman?

  Oh, it's kind of going to be a wait and see type of thing. The cool thing about layer two is we can take all of our DeFi stuff and put it on the L2. And then yay, we save on gas fees. The cool thing that I think is really exciting is like, well, there's also DeFi things that couldn't happen on layer one that can only happen on layer twos. And that's going to be like this big zero to one moment. As soon as we figure out what those things are, you can't, can't really ever predict them. But like, that's kind of what I, what I'm really, really excited about. And just overall, there's a going to be a great migration to the Arbitrum layer two. I'm pretty sure is what I say in the sponsor.

• 30:18Ryan Sean Adams?

  Well, guys, you know, stay tuned for Tuesday. We're going to have Arbitrum back on the podcast, doing a show with them to review their progress since the last time we talked to them. But maybe let's just scan a few things that have been deployed. So there's a block explorer by the people who made EtherScan. It's called Arbiscan and that is up and ready. So we love EtherScan.

• 30:39David Hoffman?

  Looks and feels like EtherScan, which is great.

• 30:41Ryan Sean Adams?

  How many times a day do I use this thing?

• 30:43David Hoffman?

  Right.

• 30:43Ryan Sean Adams?

  And now it's deployed on Arbitrum. Also, our friends at Balancer, they have expanded to layer two. They are on Arbitrum live now. Sushi is on Arbitrum.

• 30:55Ryan Sean Adams?

  And they've got some rewards. I didn't realize this. So they're already doing yield farming on Arbitrum. Uh, definitely something to check out. Uniswap also deployed on Arbitrum. So this is the first layer two, where we've seen both of those solutions, both Sushi Swap and Uniswap. So they get to battle it out in a new realm. I'm kind of excited about that, honestly. Um, look at all this.

• 31:20David Hoffman?

  All of them, everything. Yeah. H, shout out to Tracer, Curve, Odo, Dex, Ave, Future Swap, MC Dex, MakerDow, Perpetual Protocol, DeForce, whatever Wee Piggy is. So much, so much is on Arbitrum.

• 31:33Ryan Sean Adams?

  Love you, Wee Piggy.

• 31:36Ryan Sean Adams?

  Yeah, Tracer, Notes is Safe. Um, some of these are cool because they're actually new apps that, that haven't been deployed on mainnet too. Um, so anyway, lots to go check out. We're going to be releasing a guide next week to Arbitrum, next Thursday. So if you've read some of our previous guides, like we did a guide to Polygon, doing a whole comprehensive guide for Arbitrum. So stay tuned to the newsletter, check that out. That's newsletter dot banklesshq.com. If you are not signed up, go do that now.

• 32:04David Hoffman?

  Yeah. And shout out to Ben, literally the best guide writer in all of DeFi. Uh, we got him, uh, great find, got him on the team. And now he's going to be re-releasing an optimism guide as well.

• 32:13Ryan Sean Adams?

  Yeah, we just see him quit college and work for us.

• 32:15David Hoffman?

  Just quit college, bro.

• 32:17Ryan Sean Adams?

  Hey, worked for Vitalik.

• 32:20Ryan Sean Adams?

  Yeah, Zap was on there.

• 32:21David Hoffman?

  That's what you say to your parents.

• 32:22Ryan Sean Adams?

  Yeah, worked for Vitalik.

• 32:26Ryan Sean Adams?

  All right, man. The, the other point I want to make is there's just a thread from Anthony Sisano that goes through all of the other layer two solutions that are coming to mainnet. So he goes through Starkware, he goes through ZK Sync, that's coming, optimism, that's coming, Arbitrum. If, if, if you want a collection of all of the layer twos, we will include this link in the show note, notes, and you can go check that out because it still is layer two summer. I know we're almost out of summer. So it's like layer two summer fall edition is what I think is happening. Uh, in the next few months, this is definitely going to pick up some more. David, should we talk about this? This is interesting. Why don't you explain what's going on with Vincent Van Deau and Three Arrows Capital?

• 33:08David Hoffman?

  Right, so Three Arrows Capital famously was one of the big reasons why this NFT mania got so much steam, picked up so much steam so quickly. They ape into a bunch of CryptoPunks, some Fidenza, some Ringers, and now they look like they are just doubling down on NFTs as investments. And so they have brought on whoever Vincent Van Deau is on Twitter, saying, "Excited to be working with Suzu and Kyle Davies from Three Arrows Capital to launch Starry Night Capital, an NFT fund." I love the name. And he says, "Our thesis is simple. We believe the best way to gain exposure to the cultural paradigm shift being ushered in by NFTs is owning the top pieces from the most desired sets." So, that's pretty cool. Investing in culture directly.

• 33:52David Hoffman?

  And I think that's just a fantastic option to... The fact that you can even invest in culture is fantastic.

• 33:59Ryan Sean Adams?

  And David, you said whoever Vincent Van Deau is, and that's because he's pseudo-anonymous, not because he's unknown on Twitter. He is a big deal in NFT circles, as far as I understand it. Like, one of the top collectors in the space, able to identify these things early. So, this is the kind of talent acquisition for Three Arrows Capital, too. They've got the capital, they need the talent through which to deploy it, and they're matching those things together. Really cool to see an NFT-focused fund? That's what this is.

• 34:29David Hoffman?

  And if you read my Digital Culture Revolution, you might have seen this coming.

• 34:35Ryan Sean Adams?

  You gotta hit the buy button, though, David. That's the hard part.

• 34:37David Hoffman?

  Yeah, I forgot that part.

• 34:40Ryan Sean Adams?

  All right, Merit Circle. This is interesting. This is a fork of optimism. So, optimistic rollups, we've talked about so much. Optimism is a solution, similar to Arbitrum on optimistic rollups. Merit is apparently forking their code, tweaking it in some ways, doing sort of their own thing. I don't know all of the details, but I'm just kind of of the mindset, like, let a thousand rollups bloom, and we'll see which ones win. Very excited that this is our scalability path for DeFi and Ethereum. I don't know, David, if you have anything to add?

• 35:14David Hoffman?

  There's not going to be a few rollups or a few L2s. There's going to be infinity numbers of them. And so this is just, you know, one more.

• 35:24Ryan Sean Adams?

  Absolutely. Pleaser DAO. What's Pleaser DAO doing? And, you know, maybe give some folks some context for what Pleaser DAO even is.

• 35:33David Hoffman?

  Yeah. Pleaser DAO is a DAO that got spun up in a, in a, just a hasty fashion to, in order to purchase people pleasers, famous X times Y equals K Uniswap V3 NFT that got launched at the same time as Uniswap V3 debuted. And just a bunch of friends just pooled their money so they could buy this NFT. And then the DAO kind of took that and ran with that. And so there's a bunch, a bunch of more internet culture NFTs that Pleaser DAO has purchased. One of them was the original Doge, the Shibui Inu Doge meme, the actual picture from the actual owner of, of the Doge who actually took the photo. It's that, it's that one right there.

• 36:11Ryan Sean Adams?

  This is the original.

• 36:12David Hoffman?

  And so the, the artist, artist, the, the owner of the Doge, who is at Tsuko Sato, apparently she only speaks Japanese, but the DAO is actually in contact with her. She minted the photo as an NFT and Pleaser DAO bought it, I think for $5.5 million, 169.696969 ETH. Nice. And now this is on the balance sheet. Now, what Pleaser DAO is doing is they're using Andy8052's fractional platform, which we did an AMA on, if you want to learn more about that. They are putting the Doge NFT into fractional and fractionalizing 20% of it. They'll do, they, they are trying to do more in the future, but they're starting off with 20% into 69.696969

• 36:56David Hoffman?

  billion units. Six, oh, excuse me. 16 billion 969696 units. There's a bunch of memes going on here. And, and so this sale is actually ending right now. And then all of a sudden, the Doge ER, the, excuse me, the Dog E R C 20 token is going to be a token on Ethereum and is going to represent a fractional share of the Doge NFT. And I would just like to show my own bags here and say that Doge, the blockchain, the Doge currency is clocking in at $38 billion. And the Doge token, which is the actual NFT, the actual meme itself, only clocking in at roughly six to 10 million. You know, there's a discrepancy there.

• 37:35Ryan Sean Adams?

  So, so, okay, so let me get this straight. What's happened is there was a DAO that was created to purchase cultural artifacts called Pleaser DAO. They purchased one of the biggest cultural artifacts, which is the Dogecoin Dog, the picture from the artist, the actual original, the most legitimate one. Now they are fractionalizing that thing and releasing it as an ERC 20 token that people can buy. So I think it's being auctioned off, but people can also buy this token. And the meme is this token now could compete against the original Dogecoin meme, which is Dogecoin, the blockchain plus the currency. That's what you're saying.

• 38:13David Hoffman?

  I mean, they wouldn't say compete. I, I, that's, that's my interpretation.

• 38:18Ryan Sean Adams?

  It's memetic competition.

• 38:19David Hoffman?

  It's a little bit of memetic competition. But also, like, we, we did a livestream with Andy and Jameis from Pleaser DAO. And they talked about how like, well, this, this can become a community, like, operated organization. This can become like a DAO that's centered around the Doge meme now that the Doge NFT is in the hands of the people. So there actually could be collaboration between the Doge blockchain and the Doge token holders on Ethereum.

• 38:43Ryan Sean Adams?

  It's so weird. The, the numbers, the value we're talking about, like, if aliens, like, unearth civilization years from now, after humanity destroys itself, they will have thought we worship dogs during the internet culture of time.

• 38:56David Hoffman?

  Hey, maybe, maybe they would understand. Maybe they have their own pet aliens that they worship.

• 39:00Ryan Sean Adams?

  Maybe.

• 39:01David Hoffman?

  I, I think the potential for this is actually pretty crazy. So like, there's Badger DAO on Ethereum, which is BTC infrastructure. I think there could be like Doge, Doge DAO for like Doge infrastructure. And we all know that Elon Musk would absolutely join that DAO, that's for sure.

• 39:15Ryan Sean Adams?

  Yeah, absolutely. It's getting suppressed too. This is Pleaser DAO, Emily Yang on Bloomberg TV talking about this. So very cool. Hey, let's burn through these other releases. BlockNative just released a gas estimator for your browser. So it's a great browser extension. Now you can just click a button and see how much you should be paying. This is all EIP 1559 ready. So great way to estimate and not overpay on your blocks.

• 39:42David Hoffman?

  And that's meaningfully different from all the other gas estimators that you might already have installed, because the current gas estimators, they only look at like recent transaction history. BlockNative goes very deep into the mem pool, into the mem pool. So it has a lot more insights and a lot more clarity to give you better information.

• 39:59Ryan Sean Adams?

  Let's talk about this too. We probably don't have time to cover it. Maybe it's a podcast in the future, but a new NFT derivative from the brilliant minds at Paradigm. What is this derivative? What's the TLDR?

• 40:10David Hoffman?

  Right. So any NFT project that has a decent amount of liquidity, which then establishes a floor price. Paradigm has established floor perpetuals, which allows you to make a perpetual contract upon the floors of an NFT project. So this is now a synthetic asset for any NFT project. So like synthetic Penguin tokens, synthetic punks, synthetic cool cats.

• 40:31Ryan Sean Adams?

  And the floor price is just like the absolute lowest price that on the open market, a, say, a punk has been listed, right? It's the like the very minimum layer. So what would you do with this kind of synthetic? Would this be a way to speculate using an ERC 20 token on a given NFT market? Maybe create an index out of this eventually?

• 40:53David Hoffman?

  Yeah, exactly. It's just financializing NFTs, which is fantastically cool. Right below the floor is where you find liquidity, which is why these perpetuals are pointed at the floor. And it's just like for people that don't care for a particular punk, but are still bullish on punks, they can buy these floor perpetuals.

• 41:12Ryan Sean Adams?

  Sir, I wonder what a CFTC commissioner would, what their take would be on something like this, an instrument like this?

• 41:19David Hoffman?

  Well, it's such a fantastic little coincidence that we actually interviewed a former CFTC commissioner coming out on the podcast on Monday, and we asked a question kind of like this, but I framed it a little bit differently. He's like, bruh, there are like 10,000 NFT projects and there's going to be 10,000 synthetic assets. Like what's the CFTC going to do about that? His answer is pretty interesting.

• 41:40Ryan Sean Adams?

  Yeah. Stay tuned to that for that podcast. It's Brian Quintez. He's a former CFTC commissioner. He just resigned this week.

• 41:49David Hoffman?

  The day before we recorded.

• 41:50Ryan Sean Adams?

  The day before we recorded. So he's kind of has some more freedom license to speak. Anyway, hot episode coming up there. We missed this little raise, by the way, in all the talking about Arbitrum, they actually raised another 120 million in funding. I think their valuation's like 1. something, 1.2 billion.

• 42:09Ryan Sean Adams?

  I want to say, so they've got a war chest to keep building what they're building. But look at this, David, like a big raise in crypto, TechCrunch, our friends at TechCrunch, the Bloomberg of technology blogs, I don't know, but they had this crazy, they had this crazy headline, Offchain Labs, those are the people behind Arbitrum, raises 120 million. Why? To fix Ethereum shortcomings. That's why.

• 42:36David Hoffman?

  I, I, taking the perspective of somebody who's not in Ethereum, you can kind of see why, like a $70 uniswap trade, like, I guess that's a shortcoming. But again, they, they aren't, it's not, it's not, it's more nuanced than that. Like Ethereum's decentralization is not a shortcoming.

• 42:51Ryan Sean Adams?

  It's expensive.

• 42:52David Hoffman?

  And decentralization is expensive, yes.

• 42:55Ryan Sean Adams?

  Yeah, the, the thing that we're building is a very slow computer that does one thing, which is it's, it's, it's trustless, it's decentralized, like that is the entire point. It's just shocking to me that popular technology blogs, even like TechCrunch, still don't understand this, still don't get this. This is why we need crypto media publications to actually, crypto natives talking about their own industry in a way that makes way more sense because TechCrunch is not getting it right. Speaking of the crypto industry, though, uh, jobs, get a job if you're in crypto.

• 43:29David Hoffman?

  A goddamn job.

• 43:30Ryan Sean Adams?

  Check out the Bankless Job Boards. We have a senior front-end Web3 developer at Tracer DAO. You got to check that position out. There are a number of others. Make sure you look at that. You can also subscribe to the Bankless Jobs newsletter and get updates. We'll include a link in the show notes. All right, David, uh, should we get on to the news? Do you want to talk about the chain split first?

• 43:56David Hoffman?

  Yeah, sure. So there was, right after we recorded on last Thursday, there was Friday morning, there was a chain split to Ethereum. And what that means is there was a consensus failure, consensus bug, and then we had the chain go in two different directions. This didn't really cause too much of an issue at the time because most of Ethereum all went in the same direction. Some parts of the Geth client, excuse me, some parts of the Geth client went in a different direction. People that hadn't updated their Geth client found a different chain to go off of. And basically what happened was there was a bug in Geth in the code that handles the static call op code. It was found and fixed in an update and that the new update to Geth was deployed and all those nodes that updated

• 44:37David Hoffman?

  didn't fork, but the ones that didn't update ran off with an unfortunate consensus failure, like I said. And because of this very specific smart contract that was deployed, somebody actually exploited this and all the non-updated Geth clients, because of this weird contract thing, went off in a different direction. As soon as these clients downloaded the latest Geth client, although they pointed back to the original Ethereum chain and then we went on our merry way. But this is why Ethereum has multiple clients and also why you need to update your nodes.

• 45:10Ryan Sean Adams?

  Yeah, absolutely. I do think it was a bullet that was maybe narrowly dodged, I think. So, you know, this definitely could have been worse, but this had already been an exploit that was patched. And so only affected older Geth nodes, which is why we saw it sort of a brief chain split and then everything kind of merged back and fixed. Yeah, so I think points well taken, David. Let's talk about this Coinbase Layer 2. They are doing stuff on Layer 2. This is a whole blog post about that. Telling the crypto community what they intend to do. They said, "We just announced support for Polygon Network for the Coinbase Wallet

• 45:49Ryan Sean Adams?

  and the Coinbase Wallet extension with plans to integrate Polygon as our first scaling solution for Coinbase." But they are not stopping there. Their goal, they say, is to explore scaling initiatives with L2 such as Optimism, Arbitrum and Starkware over time. That is music to my ears, David. We've been talking about the Protocol Sync thesis, which is those protocols that have the highest levels of decentralization, incredible neutrality, the highest levels of legitimacy, as we've talked about before. Those will be at the bottom, form the bottom of all other settlement layers on top of them. And so this is...

• 46:29Ryan Sean Adams?

  Essentially Coinbase doing that, recognizing that, executing that. I think this is the critical sync thesis coming true. Pretty soon they'll have deposits to all of these layer twos. So there'll be a direct fiat bridge from a Coinbase and all of the other exchanges will also do this directly to layer twos. They will build products on top of these layer twos. And I think this is a very bullish for the future of bankless decentralized finance.

• 46:53David Hoffman?

  If I remember reading this blog post correctly, I think there was also a call to action from Coinbase asking for people who want to, they're looking to hire people. And so if you know about this stuff and you think you can help Coinbase, they are looking for your attention and for your help.

• 47:08Ryan Sean Adams?

  This is huge too, David. MetaMask, our favorite browser extension wallet, just surpassed 10 million monthly active users. 10 million monthly active users. Seems like we're just talking about the 1 million mark. I don't know, that was maybe a few months ago, maybe six months ago. Insane growth here.

• 47:28David Hoffman?

  It's gotta be NFTs too. Like what else would it be? If you want to buy on OpenSea, you gotta use MetaMask. And you can also use Wallet Connect, but most people use MetaMask. So congrats to MetaMask for being the most bankless browser wallet ever, allowing so many people to actually take control of their own private keys. It's such an important concept and MetaMask has made it easy. So they deserve all the success.

• 47:51Ryan Sean Adams?

  Yeah, absolutely. Huge growth story there. All right, let's get to some NFT stuff. We gotta lead with this story. 12-year-old kid just made 350K, $350,000 in ETH. How? By selling NFTs. This was an article in CNBC that I saw last week and I love this quote for him. They asked if he's gonna sell and he said, nope. I plan to keep all my ETH and not convert it to fiat money. I love that he said fiat money.

• 48:16David Hoffman?

  That's so awesome.

• 48:17Ryan Sean Adams?

  CNBC are like, fiat money? Do you mean like money? And he goes on to say, it might be early proof that maybe everyone doesn't need a bank, just has an ETH wallet, just has an ETH address and a wallet. I said the next generation is bankless. Look, this is a zoomer 12 years old. He's making his way, making his first 350 K in the crypto economy using ETH as his bank account. You think he's ever opening an account at Wells Fargo? Not if he can help it. If he does, it's only to pay like stupid bills. This kid is sold for life. And I think this is how the zoomer generation, Gen Z is growing up, right? They are like eating and breathing this stuff. Some of the innovators,

• 49:02Ryan Sean Adams?

  like a 12 year old kid, did this from his own home, was able to generate that kind of cash. Like, I mean, he's telling all his friends, like, this is propagating on CNBC. Man, it's over. Like, the world is going to be bankless and starting with the next generation.

• 49:18David Hoffman?

  This also speaks to the power of actually using these things. Like, we can talk about it, and you guys can listen to podcasts and read articles, but it's a meaningfully different when you actually have an Ethereum wallet and make your own transactions and actually use some of these infrastructures. Like, that's when we had our podcast with Preston Pish about, like, Ethereum versus Bitcoin. And I asked him if he had ever used Uniswap. He's like, no, dude, I've never made like a transaction on Ethereum. I'm like, dude, what the hell? Like, this 12 year old kid can get it. And the difference between Preston Pish and this 12 year old kid, that this 12 year old kid actually went and used Ethereum.

• 49:53Ryan Sean Adams?

  Yeah, it's just curiosity.

• 49:54David Hoffman?

  Just use this stuff.

• 49:56Ryan Sean Adams?

  We had a 12 year old kid. We also have, in the Banks program, our favorite, Bill Ford. He is 77 years old.

• 50:02David Hoffman?

  He gets it.

• 50:03Ryan Sean Adams?

  And he's doing things with MetaMask. He's claiming tokens. He's doing DeFi, right? So that's a large span. So, once again, 12 year old kid, 77 year old person.

• 50:13David Hoffman?

  Running circles around everyone who hasn't touched Ethereum.

• 50:17Ryan Sean Adams?

  Exactly. All right, let's talk about this. CryptoPunks creator, Larva Labs, they just signed up with a major talent agency. This agency is called UTA. I've not heard of them, but I'm not in the talent industry space. What did they do? Some kind of a business partnership? Vance Spencer explains it a little bit, David, but what's the summary here?

• 50:36David Hoffman?

  Yeah, I'm also unfamiliar with this territory, but I think it's more just about Allowing all the products from um Larva Labs, CryptoPunks, uh um uh MeBits, Autoglyphs, to be a part of uh you know uh like licensing agreements with like

• 50:52Ryan Sean Adams?

  Content licensing?

• 50:53David Hoffman?

  Like content licensing, so like maybe we see like just you know kids TV shows with a CryptoPunk in it.

• 50:58Ryan Sean Adams?

  Toys?

• 50:59David Hoffman?

  CryptoPunk toys. I I don't know. I don't know how this works, but I think this is kind of where what we're diving into. I still have open questions about like what happens if somebody uses my CryptoPunk? Like, do I get like royalty fees for that or like?

• 51:12Ryan Sean Adams?

  I I feel like you should.

• 51:14David Hoffman?

  Like I should. I bought it. I bought the damn thing. Um I anyways, I'd still be happy to see my CryptoPunk on like Nickelodeon or something.

• 51:21Ryan Sean Adams?

  That'd be awesome because you're the only owner of that legitimate CryptoPunk, so I guess.

• 51:26David Hoffman?

  CryptoPunk 1118, best CryptoPunk of all time.

• 51:28Ryan Sean Adams?

  E- even if you don't get a share of this, uh then this also still kind of propagates the meme and benefits your.

• 51:34David Hoffman?

  Exactly, at the very least, yeah.

• 51:36Ryan Sean Adams?

  Yeah, it's it's super interesting to see that play out. Um let's talk about this. Board Ape Yacht Club, they just sold 96 million of their mutant ape NFTs in an hour. And uh so this is a massive rage raise in and of itself. We also have like major artists. This is the Chain Smokers. They just changed their profile picture on Twitter to a board ape. Um what's up with board apes? Are they uh are they the new CryptoPunks?

• 52:02David Hoffman?

  Yeah, I mean, they're they're the runner up, that's for sure. And this whole mutant CryptoPunks, if you can uh find a some pictures of mutant CryptoPunks, that'd be great because they're really, really creative.

• 52:11Ryan Sean Adams?

  These things.

• 52:11David Hoffman?

  Yeah, the uh Bankless editor Lucas put this well. I I really like this is like somebody asked like, yo, what happened to uh like the board apes? And Lucas said, oh, they leveled up. So this kind of feels like an evolution of the board apes. Like first they were just like or normal board apes and now they're mutant board apes. They had like a leveling up moment, an evolving moment. Uh and so this kind of tells like the story of a particular set of like Ethereum objects. It's like they did something, they changed. Uh the the story of the the board ape meme has evolved with mutant apes. Mutant apes, I think, are actually way cooler than the originals.

• 52:47Ryan Sean Adams?

  Okay, but can I ask you a question, right? So this is me just um getting into NFTs, right? As you know, I've been on sort of like a mini quest uh of the over the last two weeks to just get up to speed on everything, okay? Do you remember in the early days, there was this um? Criticism of Bitcoin, particularly from people outside of the space that just said, "Hey, Bitcoin's not valuable because you could just fork it. Create a Bitcoin diamond, create a Bitcoin gold, you know, create a Litecoin, create a Dogecoin, whatever. And, um, you know, it will never be valuable because it's so inflatable. You could just create these new, you know, chains and in perpetuity, right? And so it's just going to inflate the value away. This was an early criticism of Bitcoin. Um, what about that

• 53:32Ryan Sean Adams?

  criticism for NFTs, right? So like if Board Ape Yacht Club has now turned board apes and created a whole new set of, I don't know how many there are, but say 10,000 mutant apes, does that not dilute the value of the original board apes? And what's to stop somebody else from going and creating another set of like 10,000 board apes that are, I don't know, robotic board apes or something like that? Uh, does that not start to dilute things? What's your take there, David?

• 54:01David Hoffman?

  Yeah, there's, there's a lot to unpack there, actually. Like, for one, like the mutant apes add to the richness of the story of the original board apes. Um, I don't know if this is completely true, but if you had a board ape, that doesn't mean you actually got a mutant ape. You'd also have to buy it with everything, everybody else. So there was no like original, like sometimes with Bitcoin, like when Bitcoin would fork into Bitcoin Cash, Bitcoin owners also got the Bitcoin Cash, right?

• 54:25Ryan Sean Adams?

  True.

• 54:26David Hoffman?

  But Bitcoiners also say like every time that Bitcoin forks, it's just an airdrop of free Bitcoin because you can sell that Bitcoin for the original Bitcoin and that actually instantiates value back to the original Bitcoin. Um, but there's also a difference to talk about, like, punks are kind of considered like the Bitcoin of NFTs, like the original, it was valueless for such a long time.

• 54:46Ryan Sean Adams?

  It's a shelling point.

• 54:47David Hoffman?

  It's a shelling point, OG. Um, but the difference between Bitcoin and CryptoPunks is that Bitcoin has a massive security expenditure budget and board and CryptoPunks or any other NFT, they don't because they're tokens on Ethereum and they don't have a consensus. They, they're just items on Ethereum. Uh, and so like that also kind of changes the, the, the conversation.

• 55:06Ryan Sean Adams?

  Well, that would make me think they're, they're, they're more easily inflated then, right? Because Bitcoin Bitcoin at least has that moat where, hey, you're never going to achieve Bitcoin's level of security if you're just kind of a fork or a, you know, a new chain that's based on Bitcoin code. Whereas like every NFT has equal amount of security and it's all social consensus around these things.

• 55:28David Hoffman?

  Yeah, but I would say it's also social consensus around what is the most valid Bitcoin thing.

• 55:32Ryan Sean Adams?

  So it's all just so social consensus.

• 55:35David Hoffman?

  And that's why we have layer zero.

• 55:39Ryan Sean Adams?

  All right. Well, turtles all the way down, David.

• 55:41David Hoffman?

  God damn.

• 55:42Ryan Sean Adams?

  Had to say it.

• 55:45Ryan Sean Adams?

  Walked right into that one. Well, let's talk Bitcoin stuff. What's El Salvador doing with Bitcoin? That that seems to be the story for the last couple of months, but something new happened. They just approved $150 million trust fund to support Bitcoin's ambitions. What is this? This is part of the original plan when El Salvador rolled this out, correct?

• 56:04David Hoffman?

  Right. So yeah, this $150 million trust fund is committed to buying Bitcoin from El Salvadorian citizens citizens who want to swap Bitcoins for dollars. El Salvador, before this whole Bitcoin thing, its national currency was the dollar and now it's also Bitcoins. And now they have two national currencies and this trust fund allows people to swap between Bitcoins and dollars for people that want dollars. So that's what this is for. It's basically a $150 million fund that will eventually turn into, but only purchase Bitcoin over time.

• 56:38Ryan Sean Adams?

  What do you make of all the protests that we're seeing? So we're starting to see these protests of El Salvadorians who are anti Bitcoin, like no Bitcoin, they're holding up signs that say this in Spanish, like what are they protesting and what do you make of this?

• 56:52David Hoffman?

  Right. So this was one of the big criticisms of this whole move is that Bitcoin is supposed to be free to money. It's allowing, it allows people to opt out, but then a nation state imposed Bitcoin upon its citizens. Granted, it went from like having one choice of currency to a dollar to having two choices, but like it's still like now businesses are forced to accept Bitcoin. Now you can, there's our like legal precedent for opting out of that, like forced coercion into owning, into accepting Bitcoin if you don't have the technology for it. But I think people are kind of just like, they don't really care and they just don't want Bitcoin to be like a thing in their country and they're expressing that.

• 57:29Ryan Sean Adams?

  That's really, it's really weird to see. It's kind of a juxtaposition I've not seen. Like, so you'd see protests against Bitcoin or cryptocurrency for energy reasons, energy consumption reasons. But this is a protest from some citizens, their government, saying, like, "We don't want this thing as legal tender. We don't want to use this thing as money and you're forcing us to." And that is like new territory. I'm not sure what their specific concerns are, but that feels top-down in a way that Bitcoin has never really been. It's always been this opt-in, bottom-up movement. Now, I almost wonder if this is like, hmm, a backlash against, against kind of that approach. I don't know if it's a great look, to be honest. It's, it's, it's different than anything I've seen in crypto.

• 58:14David Hoffman?

  Yeah, that's why it's important to maximize choice.

• 58:18Ryan Sean Adams?

  Well, let's talk about this. Jack Dorsey is still doing a lot with Bitcoin. Looks like they, Twitter is adding the ability to tip using Bitcoin on Twitter. I don't know, man. This feels very like 2017, 2018 to me.

• 58:37David Hoffman?

  Lost the plot.

• 58:39Ryan Sean Adams?

  If you're Bitcoin, or do you want to spend your Bitcoin? We talked about that. Like, probably not.

• 58:44David Hoffman?

  Payments. Remember, payments, payments using Bitcoin, like, never has taken off.

• 58:48Ryan Sean Adams?

  Stablecoins? Like, it's just, yeah. Any takes here?

• 58:53David Hoffman?

  It's such like a, it's like, "Oh, Bitcoin's innovating. We made tipping inside of Twitter." It's like, "God damn it. Do something cool."

• 59:00Ryan Sean Adams?

  Another story.

• 59:01David Hoffman?

  Bitcoin, like, the Bitcoin section in the Weekly Rollers are always famished, and I swear to God, we try and find Bitcoin news every single time. And it's just, and this is what we get. We get Twitter tipping with Bitcoin. God damn.

• 59:12Ryan Sean Adams?

  That's all we have right now. It'll get better, though. You know, Bitcoin's got a little straight ahead, David. Never fear.

• 59:18David Hoffman?

  Convinced.

• 59:19Ryan Sean Adams?

  Okay. Let's talk regulation. I don't know about the growth story behind Tether. So, the, the province of Ontario has actually prohibited Tether. Look at this list of prohibited crypto assets.

• 59:31David Hoffman?

  A list of what?

• 59:32Ryan Sean Adams?

  One bullet point.

• 59:33David Hoffman?

  Leather.

• 59:33Ryan Sean Adams?

  Tether.

• 59:35Ryan Sean Adams?

  It's interesting to me, though, that like nation states, I guess this is a province in this case, are starting to squeeze Tether, maybe try to squeeze it out of existence. And maybe we'll see more of this for Tether in the future. Probably not a good sign. Now, there are other more legitimate stablecoins out there like USDC that seem to be taking steps to say, hey, we're not like Tether. Like, look at, the whole thing is backed by treasuries. You know, we have money in the bank account. We're super transparent. So I think that USDC and other stablecoins like it will probably win off of this move. David, do you have any takes on this? FTX acquired a crypto derivatives exchange Ledger X. I think Ledger X has some

• 1:00:20Ryan Sean Adams?

  CME blessing, or some CFTC blessing, if I'm remembering correctly. Yes, they do. What do you make of this acquisition from SBF of FTX?

• 1:00:32David Hoffman?

  I don't have too much of a take. I didn't even know what Ledger X was. I don't-

• 1:00:38Ryan Sean Adams?

  Kind of like a small crypto CME, basically.

• 1:00:41David Hoffman?

  Are US citizens are going to be allowed to use it?

• 1:00:44Ryan Sean Adams?

  Yeah, well, they are allowed to use it.

• 1:00:46David Hoffman?

  Okay.

• 1:00:46Ryan Sean Adams?

  Right now. It's kind of just like a mini CME futures for crypto, I believe. It's my understanding of it. I guess my take here is like, SBF is buying everything right now.

• 1:00:57David Hoffman?

  Yeah, not Goldman Sachs, though.

• 1:01:00Ryan Sean Adams?

  Not Goldman Sachs, not yet. He's worked his way up to it. But like, people have heard me say this before, that doesn't make me super comfortable. I have this fear that what we might end up doing is just replace one set of bankers with a new set of bankers. And SBF is definitely-

• 1:01:19David Hoffman?

  In his name. It's in his name.

• 1:01:22Ryan Sean Adams?

  Sam Bankman-Friedman, yeah. And I, you know, like, nothing against him. He's a capitalist making capitalist plays. But like, I don't want to see that. I want to see more decentralized money system. So we'll keep monitoring this kind of activity. Did you see this, David, speaking of centralized exchanges? Crypto Dad, Giancarlo, he was the former head of the Chair of the CFTC. He had joined BlockFi's Board of Advisors and he just quit. So he just kind of quit. And we know BlockFi has been under increasing regulatory scrutiny for their interest products. So it's a little bit jarring to see somebody like Giancarlo quit their advisor board. It seemed like in a sudden way.

• 1:02:07Ryan Sean Adams?

  Do you have any takes on this?

• 1:02:08David Hoffman?

  Yeah, it definitely feels like when Brian Brooks quit Binance just like months after becoming a Binance US, after like becoming its CEO. People just don't want to be part of companies that have like significant amounts of regulatory scrutiny. The BlockFi is going through like a securities issue. The SEC deemed one of their lending products to be securities and they are currently fighting that fight. Meanwhile, also BlockFi was going through a raise. And I don't know if the details of the fallout on that have come out, but it was a big question mark as to whether or not they would actually be able to pull funding as a result of after the SEC came and said that their products are securities. So that story is still unfolding.

• 1:02:47Ryan Sean Adams?

  Yeah, and do you know if the SEC said this? You know, my understanding is definitely New Jersey has raised some flags about it and maybe some other states. I don't know if the SEC has fully weighed in about it.

• 1:02:57David Hoffman?

  I'm pretty sure that's true. Maybe listeners need to double check.

• 1:03:00Ryan Sean Adams?

  Well, I do, I do know it does look like here in the story, Lead Investor Third Point LLC pulled out of their, their recent raise. So they were partway through, they're getting some investors pulled out. There's some regulatory risk that's being raised in organizations like BlockFi. I do think they have a legitimate product and regulators need to give them a path towards legitimacy. I mean, it's not a DeFi product, but I don't know.

• 1:03:25David Hoffman?

  For sure, yeah.

• 1:03:25Ryan Sean Adams?

  Yeah, do we live in a financial prison or what? I mean, BlockFi interest account, I can't, can't open one, can't understand the risks. We'll see how this turns out.

• 1:03:33David Hoffman?

  All right, to wrap up this week in the news, we have to talk about this whole loot phenomenon. Ryan, have you been following this whole loot thing?

• 1:03:40Ryan Sean Adams?

  I, I have loot, David.

• 1:03:41David Hoffman?

  All right, so there's this whole insane, insane loot phenomenon that has gone on. And it's really, really important, I think, as a, as a concept. We don't know if this, this particular loot thing is going to be the thing that it promises to be, but people have gotten really, really excited about it. And it's taken the NFT Twitter sphere, DeFi people by absolute storm. And so, um.

• 1:04:03Ryan Sean Adams?

  Can we explain what loot is first? Because what's so crazy is it's bizarre. It's just a list of text, right, David?

• 1:04:11David Hoffman?

  Mm hmm. Yeah, if you maybe, maybe if you scroll down, you can find, uh, find.

• 1:04:14Ryan Sean Adams?

  I'm gonna go to OpenSea and just like open.

• 1:04:16David Hoffman?

  Type in loot, yeah. Okay, so we all know NFTs. They are JPGs. We're all trading JPGs. And so these new NFTs came out. And if you look on OpenSea, it's just a black square with eight lines of text on them. And if you're familiar with like Diablo two, a lot of these items came out of Diablo two. Short sword, uh, ancient helm, mesh belt of reflection, divine slippers of brilliance, necklace of skill, silver ring. These are all like loot items you would find in an RPG game. Uh, and so like, what, what the hell is this like JPG doing with this list of items? And it's important to differentiate what's actually going on here. When you buy these NFTs on OpenSea or anywhere, you're not buying the JPG.

• 1:04:58David Hoffman?

  The JPG is a reflection of the properties of the token. And so there are properties inside of these tokens that have eight items inside of a loot bag. And these eight items, when you purchase the bag, you get all of the items. And so this has, this has like flip flopped what an NFT is. Like previously, an NFT would be a JPG and it would tell you what it looks like. Now we have these loot bags, which are just a token with properties inside of them that have, that are associated with items. And that allows the, uh, whoever wants to manifest these properties to choose how to manifest them visually, right? And so we have this great graphic, um, by, uh, the Twitter account Tan Davos, who says

• 1:05:42David Hoffman?

  a typical NFT is a top down approach where the creator determines what it looks like and then the purchasers buy it. But you know, the NFT just looks like that. But on the loot approach, we have this like bottom up approach where, uh, the people around the NFT can build the game. They can create the avatar. They can write the lore, write the novels and it's, and it's all bestowed upon one token. Uh, and so this is a complete like, you know, paradigm shift of what it means to have an NFT. And I mean, there's so much energy that went into this in the last week that like, God, it was exhausting trying to keep up with it. It felt like DeFi summer.

• 1:06:19Ryan Sean Adams?

  Okay, so let me make sure I'm tracking so far. So this is kind of like if anyone's played an MMO RPG, right? Like Diablo or a World of Warcraft or something like this. This is almost as if that entire items list, including all of its rarity, was like exported, right? And now it is, it's being exported and put on chain in these NFTs that individuals can buy. And each NFT might give you, you know, kind of like a certain set of items and armor and all of these things. But that's it. It's just like the bare bones export of this kind of scarce rarity system and list of items. And there's how many, like 7,500 or so of these loot drops?

• 1:07:01David Hoffman?

  Uh, yeah, yeah, I think there's, yeah, 7,500, but there's, but that's also just one component of it, right? Like, there could be more. It's, it's, this is kind of like creating a community, creating a DAO. In the sense that like, all these people are participating. It's like, hey, I think we should do this next. And some people, and like, not only do you, can you suggest it, but you can also just go and do it. And you can append on whatever you add on to these base, like primitives, right?

• 1:07:24Ryan Sean Adams?

  So why are people going and doing it though? Like, so, so I have two kind of questions for you on this. Like, one is, why are loots so valuable right now? So, I mean, a few days ago, these things were like, what did they start? I mean, you could mint them for free.

• 1:07:38David Hoffman?

  Minted them for free, like, yeah, fair, fair launch, right? Everyone likes fair launches.

• 1:07:43Ryan Sean Adams?

  When I first looked, these things were trading at like half an ETH or something like that, or one ETH. And I was probably like later to the game, right? But now these things that, you know, that the floor rate is like 10 ETH.

• 1:07:55David Hoffman?

  Yeah.

• 1:07:55Ryan Sean Adams?

  Or loot.

• 1:07:56David Hoffman?

  There's 12, 12 last time I checked right before we were recording.

• 1:07:59Ryan Sean Adams?

  30, 40, 50 ETH, like, so A, why are they valuable?

• 1:08:02David Hoffman?

  Right.

• 1:08:03Ryan Sean Adams?

  And like, like B, what, like, what do you do with these things?

• 1:08:07David Hoffman?

  Why are they valuable? People are speculating that these items become like the epicenter for the future metaverse, right? They are the first NFT tokens that don't impose what they actually look like upon their surrounding environment. And they allow the metaverse To come around them. And this is what I wrote about my article this week, which is very much a part of this story. And I think, Ryan, if you actually go to that article, we can actually look at, illustrate what's actually kind of going on with this. And there's a few examples that we can talk about. First off, definitely read the article. It's relatively long, but it's, in my opinion, a pretty good definition for how the metaverse is actually going to emerge. And if you scroll down, Ryan, to the loot section is going to be like most of the way through it.

• 1:08:51David Hoffman?

  Uh, right. Keep going, keep going, keep going, keep going, keep going. Right here. Okay, okay. So here's what the loot looks like on OpenSea. But there are more specialized websites like zeroxinventory.app that actually illustrate the properties of these tokens better than OpenSea does. And so you can actually see the colors of the rarity of each of these tokens. If you want to scroll down, Ryan, just a little bit more. And so think about this difference. We have OpenSea that is just like, gives you eight lines of text and they're all white. But we have zerox.app, which gives you the same eight lines of text, but it also illustrates the properties of the tokens to a significantly more degree.

• 1:09:31David Hoffman?

  It tells you the rarity of them. And so there's actually, this is a different layer upon these same tokens that express those tokens differently. And right now, like all of the difference between OpenSea and this website is just that now the text is colored according to the rarity of the object. But take that into, like, keep going with that logic, right? Like, what happens when a website doesn't just like tell you the text of the objects, but actually manifests the objects into a character's hand? Or what happens when you put on VR goggles and the token that you have in your VR wallet actually puts a heavy belt of rage on your character? Right? Like, this is where this is going.

• 1:10:12Ryan Sean Adams?

  Okay, so that would be insanely valuable, but like now this kind of gets to the the second part of my like two-part question, which is like, why are people actually building all of these universes and games on on top of things? And like, like, what's the economic incentive for them to do that, right? So if I'm building a massive multiplayer RPG of some sort, right, of course, I have to create like this, the scarce items engine internally, but that's because I'm building a game. And at the end of that game, I'm going to charge like my customers for that make money, and that's how the economic engine works. Why would somebody build on top of loot? Why not just like, create their own?

• 1:10:53David Hoffman?

  Right, so that's a really good question. And like, we're just going to have to watch this unfold in order to answer that. Some preliminary answers are that if you own a bunch of loot tokens, you kind of are incentivized to add on more rich parts of the universe on top of the loot tokens to give the tokens utility. Since you own the tokens, you want them to have utility because that makes them more valuable. So there's that. There's also, you can build parts of the universe that you can charge for. So this, this is why my article, I think I super recommend if you want to dive deeper into the subject. And I, the point of the article is to illustrate how the metaverse will actually arrive. And the metaverse will arrive by a bunch of distinct, separate components

• 1:11:34David Hoffman?

  becoming interoperable with each other. And so people who have, you know, all these loot bags have minted other things. And so now we also have like, ability scores that give you like, a character, strength nine, dexterity seven, constitution thirteen. And then there's characters, which are actually literally illustrations of a character. Lucas, I have the editor, I think accidentally took out that photo. But there's also realms. And there's realms, which are parts of literally maps, like generative maps. In the same way that art blocks are generative, realms are also generative. And I wasn't able to put it in my article, because this came out this morning. But now there's also gold. And so there's a now a fungible part of this like loot universe that is gold. And importantly,

• 1:12:16David Hoffman?

  in order to mint gold, you had to give the creators point zero three ether. And so they actually got paid for the creating that part of the metaverse, the gold part of the metaverse. And so I think all of these are going to be stitched together, like they're all kind of puzzle pieces, money Legos. In the same way that like DeFi has money Legos for all the applications, like the Legos of Ethereum, just of NFTs just creates the metaverse around the loot. And this concept is why so many people have gotten so excited about it because by not imposing a visual cosmetic layer upon these tokens, it allows the people around these things to impose their perceptions as to what these tokens are. And that like expressivity is, allows more things to be built.

• 1:13:00Ryan Sean Adams?

  It's like a writing prompt.

• 1:13:01David Hoffman?

  Yes, yeah.

• 1:13:02Ryan Sean Adams?

  The story's not written, but we've got this prompt. And I think you alluded to the economic incentive here. So like, this, this is why this, this week has been so crazy for anyone who's gone down this rabbit hole and purchased some loot is because it's not only purchasing loot and like speculating on, on that entire market, but all of these derivatives that you generate, like the abilities and the characters and the realms that you're mentioning, even the, the adventure gold that you mentioned, you actually have to own, you have to own loot in order to mint those things and participate in those other products. And also like these things just keep spinning up on a daily basis, maybe multiple times a day. These new kind of like loot derivative products, it's kind of clunky.

• 1:13:45Ryan Sean Adams?

  Like in order to claim them, you have to go to EtherScan and you like, you're interacting directly with the smart contract.

• 1:13:53David Hoffman?

  There is no website. There's only EtherScan.

• 1:13:55Ryan Sean Adams?

  No website to do this, but everyone's speculating that this entire loot universe is going to be absolutely massive. And these are the economic incentives that essentially like inject energy into this entire system. It's because now you have this entire loot economy. And if you want to, you know, create a new product on top of it, then you can charge a fee for that. Maybe like it's some fee when, when things are minted and like, it's very organic and very weird.

• 1:14:23David Hoffman?

  Very bottom up.

• 1:14:24Ryan Sean Adams?

  Decentralized, right? Very bottom up, but also magical. Like I think, I think skeptics will look at this and be like, uh, but guys, you didn't actually do anything.

• 1:14:35David Hoffman?

  Yeah, and it's so true.

• 1:14:36Ryan Sean Adams?

  There's no game. What are you talking about? All I see is, you know, a list of. Seven words and somebody's gonna pay like $20,000 for that. This makes no sense. Right. But I don't know, something about it makes makes more sense.

• 1:14:54David Hoffman?

  Right.

• 1:14:54Ryan Sean Adams?

  When you put on that, like the framing of the metaverse and this collective building that that we're doing to to bring it about.

• 1:15:03David Hoffman?

  And so people are speculating that these like loot tokens are like the CryptoPunks of the metaverse, right? They're the very first ones. They're the zero to one moment and they're going kind of in the same way. There's like the fat CryptoPunk thesis where all NFT value gets gets pushed down to CryptoPunks because they're the OGs. Like the people are speculating that these loot bags are kind of like the same thing for the metaverse. And so that energy behind that speculation can actually like manifest it into reality. Because if there enough value goes into these tokens, like, well, there's enough incentive to actually build the damn thing because of all the speculation that's going into them.

• 1:15:38Ryan Sean Adams?

  So weird. Also so cool. I can't wait to see this experiment unfold. You know, there is an element, though, of does this feel like a, you know, a massive multiplayer game only for the rich, though? Like, you have to fork over some significant cash. Or you have to be early. You need to be wealthy or you can be early in order to get in on this. What's your take?

• 1:15:57David Hoffman?

  Yeah, so the original 7,500 loot bags, like, if the community wanted to mint more, like, as and if we collectively decided that that was a legitimate choice, then I think that's possible. That's possible for for the community to do. And so this that might actually be a route for funding. Say, like, enough contributors, dedicated contributors, rise to the top and maybe some team forums around this loot ecosystem. And maybe that team needs funding. Maybe they fund themselves by minting more loot bags so that instead of just having 7,500 bags, we have enough for the whole entire planet to play in this whole RPG. Now, the cool thing about this loot thing is that, like, when we talk about

• 1:16:38David Hoffman?

  RPGs or Diablo 2, or like, my favorite RPG was Borderlands, like, we're talking about just items inside of that one game. And it's on Ethereum. It's an RPG for the whole entire internet, right? And so we are increasing the scale as to what this where and how this game can be played. So like, and ultimately RPGs are just life. Like, you go through life, you acquire items, you put them on your bookshelves, you acquire new skills, you level up, and now we're doing it on Ethereum, and that is what is creating the metaverse.

• 1:17:11Ryan Sean Adams?

  So bring your item, bring your loot item into any game.

• 1:17:14David Hoffman?

  Right.

• 1:17:15Ryan Sean Adams?

  Basically, that supports it.

• 1:17:16David Hoffman?

  Right. And any game that answers to the properties of the tokens is a part of that tokens metaverse.

• 1:17:22Ryan Sean Adams?

  And the loot community is economically incented to propagate loot everywhere. So we actually, like, the loot community actually wants to talk to you, you know, Blizzard or Epic Games or all of these like game publishers and get them to support loot, right?

• 1:17:38David Hoffman?

  Yeah.

• 1:17:38Ryan Sean Adams?

  Maybe like provide grants for new games to support loot.

• 1:17:41David Hoffman?

  Sure. And like the interoperability nature of loot incentivizes it kind of in the same way that like, like Taco Bell allowed, like gave out free Crunchwrap Supremes to Doge, like coin holders, whatever.

• 1:17:55Ryan Sean Adams?

  Right.

• 1:17:55David Hoffman?

  You've got free marketing, free engagement, free customers.

• 1:17:58Ryan Sean Adams?

  Composable community.

• 1:17:59David Hoffman?

  Composable communities, right? And so like games can be like, hey, like we included loot tokens. Like now you can play our game with loot tokens. And all the loot token holders are like, yay, we reward you with our engagement. And now we're actually gonna play your game.

• 1:18:12Ryan Sean Adams?

  As crazy as this sounds, like, you know, I think this is why the crypto is feeling like this is a new unlock. It really does feel like that.

• 1:18:21David Hoffman?

  It was like a paradigm breaking moment, for sure.

• 1:18:22Ryan Sean Adams?

  Yep. We unlocked something new here. We're in uncharted territory and it's going to be exciting to see where this goes.

• 1:18:28David Hoffman?

  Yeah. Extremely speculative, extremely risky. Nothing is certain. This could just be the top of the NFT markets. Who knows?

• 1:18:35Ryan Sean Adams?

  It could be that too. We could look back and be like, we were paying what for lists?

• 1:18:40David Hoffman?

  For lists of tokens, what?

• 1:18:42Ryan Sean Adams?

  That was the bubble. That was the top.

• 1:18:43David Hoffman?

  People were gonna build it? Like, that's crazy. Why would you think that?

• 1:18:48Ryan Sean Adams?

  Never know, guys. That's the fun of crypto. Guys, we will be right back with the takes for the week and of course, the meme of the week. But before we do, we want to thank the sponsors that made this show possible.

• 1:18:59David Hoffman?

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• 1:19:44David Hoffman?

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• 1:20:29David Hoffman?

  With Aave, you can leverage the full power of DeFi Money Legos, yield, and composability all in one application. On Aave, there are a ton of assets that you can supply to the protocol in order to gain yield. And all of those same assets can also be borrowed from the protocol if you have supplied collateral. Here you can see me borrowing 200 USDC against my portfolio of a number of different DeFi tokens in ETH. I'll choose a variable interest rate, because it's a lower rate than the stable interest rate option. But I could choose the stable interest rate option if I wanted to lock in that interest rate in permanently. V2 also features the ability for users to swap collateral without having to withdraw their assets, trade them on Unswap, and then deposit them back into Aave.

• 1:21:13David Hoffman?

  With Aave, users can do this in one seamless transaction, saving you time and gas costs. Check out the power of Aave at ave.com. That's A-A-V-E dot com.

• 1:21:23Ryan Sean Adams?

  All right, guys, here are the hot takes of the week. Let's start with this one from Alex. "DeFi brings the capital, NFTs bring the people." Capital, people. DeFi for capital, NFTs for people. What do you think, David?

• 1:21:37David Hoffman?

  Short, sweet, to the point. These memes about how DeFi operates and how NFTs operates are getting more concise and more punchy. I like it.

• 1:21:46Ryan Sean Adams?

  I had this take this week, David. It says Twitter should roll out a blue checkmark for NFT profile pics. Just validate them against Ethereum. Every social network will be doing this soon. It's the most obvious feature ad ever. Dude, I feel like it's the most obvious feature ad ever.

• 1:22:02David Hoffman?

  No, no, no, no, no. Bitcoin tipping. Bitcoin tipping.

• 1:22:05Ryan Sean Adams?

  Bitcoin tipping. That's why I was getting like, meanwhile, we're doing that with Twitter? I mean, if social media is asleep at the job, new social networks will come up that actually use these valuable NFT items as profile pictures, as items in their universe, to use their lore and like leapfrog them. So I think Twitter will be forced into doing this, but it just seems to be the most obvious feature ad ever, right? It's like, I know you've seen some people who are kind of plagiarizing, I guess, your crypto punk. And anyone could do that. It's true. You can right click. But if you had a social network that was like enforcing the validity of that punk and like verifying that on chain and putting kind

• 1:22:47Ryan Sean Adams?

  of just a simple checkmark, this is valid or not. I mean, it just seems so obvious you do that. And by the way, that would inject a tremendous amount of additional value in the NFT economy. Because if that becomes a standard and all all social networks do that, then like the whole right click save thing becomes completely delegitimized. Like you can't right click save because you have a fake crypto punk and anywhere you propagate that on the internet, in the metaverse, it's going to show up as a fake.

• 1:23:18David Hoffman?

  NFTs are a social phenomenon and any like they absolutely belong in any and all social media platforms. They are, they're people flexing, flexing their stuff and they do that on social media. So the profile picture avatar movement, I think, has absolute staying power. And also to the point, like crypto is rampant with like scams. Like I see fake Ryans all the time trying to, trying to DM me and get my ether from me. But if I was, it's actually me, David. I'm trying to get your ether.

• 1:23:48Ryan Sean Adams?

  You're making your own accounts. But like, imagine if like all these, you know, Vitalik impersonators or whoever impersonates.

• 1:23:55David Hoffman?

  impersonators had to put an NFT as their profile picture and couldn't verify their ownership of that NFT like all of a sudden this becomes extremely easy to to differentiate impersonators versus non impersonators because NFTs are unique. Another part of my metaverse article talks about how identity, human identity of the human spirit can actually be captured by Ethereum addresses on Ethereum based on the NFTs that they interact with. Like every NFT is its own object and as an Ethereum address, you have your own story and the story that you write is of the NFT objects that you come to interact with.

• 1:24:31Ryan Sean Adams?

  Yeah, you could be you could be a turtle or you could be a crypto punk in this new in this new economy.

• 1:24:36David Hoffman?

  Anyways, crypto punks are way better than turtles, by the way.

• 1:24:40Ryan Sean Adams?

  Yeah, but you know what's cool too is we did this article with Brantley from ENS about single sign on for Ethereum, right? And so it's like, oh, that would be cool if we had the ability to sign on to every app using a private key, an ETH private key, right? But the question is like, oh, how is that going to happen? Why would new platforms adopt it? Maybe it happens because NFTs are awesome, right? Like, and your public-private key pair owns an NFT and has to own an NFT. So that could be a way to propagate like a public-private key, single sign on Ethereum everywhere, because if you have that NFT functionality, you're already doing like 90% of the work to integrate that. Anyway, super cool. Let's do this take diamonds versus JPEGs. Which would you rather have, David?

• 1:25:25David Hoffman?

  Yeah, Tasha says, carrying a rock around your finger is no less absurd than buying a rock JPEG on the internet. If you can't appreciate the absurdity in all human rituals, you'll be a slave to past rituals, not a creator of future ones. Such a punchy take. It almost has 10,000 likes. That's crazy awesome. So like, this is why it's important to stop being skeptical on NFTs. Like, you don't get to right-click, save them. And she hits this so hard at the end. You'll be a slave to past rituals rather than create future ones. That's so awesome. Get on board with the NFT train people.

• 1:25:59Ryan Sean Adams?

  Look, it's memes all the way down and crypto is just exposing the fact that it is and it always has been. I love that take. Let's do this, David. So Vitalik did this experiment on Twitter. So he follows 268 people. And there's a Twitter setting where you can only, you can set your replies to only the people that follow you, basically. And so he did an impromptu Ask Me Anything on Twitter. A lot of interesting questions and answers arose. But this is one of my favorites, David. Someone asked him his biggest regrets in his Ethereum journey, and had to be non-technical. Vitalik said, "The whole eight

• 1:26:39Ryan Sean Adams?

  co-founders thing, and choosing them so quickly and nondiscriminately, was his biggest regret." Super interesting insight there.

• 1:26:48David Hoffman?

  This is definitely like a hindsight 2020 thing, right? Like, when you don't know how big Ethereum is about to become, you're trying to just get this out the door, you choose to help you do that. And then you accidentally choose people like Gavin Wood, and co-founder of Cardano, Charles Hoskinson. Yeah. Like, hmm, hmm. Of all the Ethereum co-founders, Vitalik is the only one that's left.

• 1:27:12Ryan Sean Adams?

  Except Joe Lubin is kind of on the periphery-ish.

• 1:27:15David Hoffman?

  Oh, yeah. Was he a co-founder? Was he one of the eight? Oh, okay.

• 1:27:18Ryan Sean Adams?

  Yeah, he's one of the eight.

• 1:27:19David Hoffman?

  Okay. Joe Lubin definitely counts. Absolutely. Okay.

• 1:27:22Ryan Sean Adams?

  Yeah.

• 1:27:23David Hoffman?

  There's still, there's still, too many of them forked off and did their own thing.

• 1:27:25Ryan Sean Adams?

  Many of them, like, many of them forked off, did their own thing, you know, didn't really help Ethereum that much. Others just totally dropped out, like, just didn't really develop the idea beyond the initial months. You've read The Infinite Machine by Cami Russo, right? It goes through that entire story, and you could see it. The thing that Vitalik said was good, though. His three favorite podcasts, Bankless.

• 1:27:50David Hoffman?

  Number one.

• 1:27:50Ryan Sean Adams?

  The top one he listed.

• 1:27:51David Hoffman?

  Number one. But I'm sure he put it in order.

• 1:27:53Ryan Sean Adams?

  Wow. I'm sure he put it in order. Two other podcasts. One is called Rationally Speaking, which I've not listened to. And his third favorite, Hardcore History, which I absolutely love. So, man, huge honors there, David. I'm like, I saw that tweet come out last night, and I was just like, oh, my God. You know, this feels good.

• 1:28:12David Hoffman?

  I was able to ask Vitalik my question, because Vitalik follows me, and my question is how do you define the metaverse? And he gave, in a single tweet, the same definition that I gave in my, like, 20,000-word article, which is even more reason why you need to go read the Metaverse article that I put out on Bankless not too long ago.

• 1:28:30Ryan Sean Adams?

  Yeah, absolutely.

• 1:28:34Ryan Sean Adams?

  He also did this, David. I guess Elon Musk asked him a question. What is love?

• 1:28:39David Hoffman?

  I don't even know how to pronounce this, but then Vitalik responds with Elon Musk's kid's name that he has with Grimes, which is like X A E A 12. Don't hurt me. It was what Vitalik said. So Elon Musk says, what is love? And then Vitalik responds, child's name, don't hurt me. So like, you know, doing a little bit of a meme, which is, this is going to become important very soon.

• 1:29:02Ryan Sean Adams?

  So I was not in pop culture. I was not plugged in enough to know that Elon actually named his kid this, like a series of symbols. I didn't even know what this means. Do you?

• 1:29:11David Hoffman?

  Uh, yeah. Okay. The A 12 is the SR 7020, SR 71 plane. The version that came before the SR 71 was called the A 12. Uh, and so they named it one part after a plane X. And each one of these things has reasons behind them. They're all stupid. Don't name your kid this. Like, you're not, you're not cool, Elon.

• 1:29:31Ryan Sean Adams?

  Pronounce this.

• 1:29:32David Hoffman?

  It does have a correct pronunciation. I don't know what it is.

• 1:29:37Ryan Sean Adams?

  Well, it's, it's been done. So, you know, the child's there. Maybe he'll go by A 12. Who knows?

• 1:29:43Ryan Sean Adams?

  David, give me this last, take us home with this last take.

• 1:29:46David Hoffman?

  Yeah, I tweeted this out right before we did this roll up. I said, can we please just pause all Ethereum blocks this weekend? We can resume after Labor Day. I need a break. Brian, this week has been absolutely exhausting. Not, not only have we done like 17 shows this week, but we also had this fucking loot phenomenon, which takes forever to keep up with and moves. It's almost a full-time job just to keep up with that. And like, god damn dude, like, I also, we also have three shows today and three shows tomorrow. Uh, I mean,

• 1:30:17Ryan Sean Adams?

  Did you call this Ethereum brain?

• 1:30:18David Hoffman?

  I called this Ethereum brain. And Eric has a great take like right under me. He goes, have you ever seen the 1950s horror film Blob? Uh, it's basically Ethereum. It traps us and we can't get out. Apparently there's a movie about like a blob that just like sucks everything in. This is what Ethereum does. It sucks you in and it doesn't let you leave.

• 1:30:36Ryan Sean Adams?

  Mental energy, time, capital, every single asset. Like, I can't be mad because this is so amazing and exciting in the future, but it's hard to do anything else in the real world. Guys, if you're feeling that Ethereum brain, that fatigue, what's the best advice you have, David?

• 1:30:53David Hoffman?

  I mean, this is why. Okay, so this is why everyone should also listen to the Layer Zero podcast that I did with Eric that came out this week. We talked about strategies and he talked about like, it's just like quitting cigarettes, or like quitting drugs, or like quitting alcohol, or quitting whatever you're like you're addicted to. It's a skill. You have to learn how to like, take a step back and like, do something else. Because if you don't, like Ethereum will suck up all of your time. It will give you, it will suck up as much time and energy as you give it.

• 1:31:21Ryan Sean Adams?

  It totally will. So if you feel it yourself going down that, that, that track and have some Ethereum brain, like encourage it, take some time away from screens. Just take some time over the weekend, maybe this Labor Day, relax, enjoy some time with your family. Don't worry, Bankless is holding it down.

• 1:31:37David Hoffman?

  We will be releasing. We will take that energy off of your shoulders and put it on ours.

• 1:31:41Ryan Sean Adams?

  I mean, some people like, look, man, how many podcasts do we do every week, right? Like, like five a week, plus the newsletter, plus everything, right? There's a lot. Some people, you know, just listen to the weekly rollups, and that's kind of enough for them for some weeks, right? And then they go back and listen to other episodes later, right? So, anyway, be careful, the space can do a number on you. Crypto addiction is a real addiction, and it can exhaust you. It can, you know, you can miss out on things in the real world.

• 1:32:11David Hoffman?

  Right, yeah. Ethereum is redefining humanity, and it will also take your humanity from you if you let it.

• 1:32:17Ryan Sean Adams?

  I'm, I feel like we're speaking to ourselves.

• 1:32:19David Hoffman?

  Yeah, we got, we damn it, we need, we need some goddamn therapy.

• 1:32:25Ryan Sean Adams?

  All right, wait for new NFT.

• 1:32:28David Hoffman?

  Somebody drop an NFT so I can get distracted.

• 1:32:32Ryan Sean Adams?

  All right, let's get to this. What are you excited about this week, David?

• 1:32:35David Hoffman?

  Oh, God, I, I'm, I'm just excited, man. Like, I don't have a single, specific thing, but like, there's so many things to be excited about. It really feels like the stars are aligning for Ethereum. Like, there are so many things that are happening on Ethereum that are making it more and more useful for the outside world, also making more and more sense for the outside world, even though like, million dollar rocks are kind of crazy, like, at least you can talk about them. EIP1559 is outperforming everyone's dreams. We get

• 1:33:03David Hoffman?

  All these numbers and things to look at. So that's crazy. Uh, there's also this NFT mania going on, which is really letting time fly. And that's all of a sudden like proof of stake is just going to be here. So that's really exciting. There's just so much to be bullish about. And like you talked about it in the market section, like we're kind of getting out of this like crab season and starting to get bullish again. Like it's super, it's the super cycle, man. Super cycle is back on the menu. Uh, it's just gonna be like, uh, so much crazy.

• 1:33:27Ryan Sean Adams?

  Wait, super cycle and then crash, you think?

• 1:33:30David Hoffman?

  No.

• 1:33:30Ryan Sean Adams?

  We're going up, up, up, up?

• 1:33:31David Hoffman?

  Up only, up only. I mean, we'll, we'll have a bunch of like little, little crashes, but they won't be as much as they are up. Yeah.

• 1:33:37Ryan Sean Adams?

  We're never gonna see a negative 95%.

• 1:33:39David Hoffman?

  No, ever. Never, never, ever. Uh, not financial advice. Uh, I mean, 50, 50%, 50% crashes over and over and over again, along with like 300% runups.

• 1:33:50Ryan Sean Adams?

  There you go.

• 1:33:51David Hoffman?

  Super cycle. Anyways, that's what, that's what I'm excited about. I'm excited about being excited.

• 1:33:57Ryan Sean Adams?

  That's good, man.

• 1:33:58David Hoffman?

  What are you excited about, Ryan?

• 1:33:59Ryan Sean Adams?

  I think I'm excited about the metaverse this week, right? So like, um,

• 1:34:03David Hoffman?

  Did you read an article?

• 1:34:04Ryan Sean Adams?

  A few, I read that article. It's absolutely fantastic. Um, we asked Raul Paul what his definition of the metaverse is, and he said digital fluidity, which is super interesting. But like, we've had the internet for a while and people have, um, do you remember that game like Second Life?

• 1:34:19David Hoffman?

  Yeah.

• 1:34:20Ryan Sean Adams?

  I don't know when that came out, but it was like, oh, this is how humans are going to like spend their time and we're all going to be in this virtual world. And you know what I think the thing that's been missing from all these experiments in the past is, it's Ethereum, right? There, there's never been a, um, an organic economy on top of these systems. There's never been a property rights system. There's never been like a, a center of commerce. It's always been built more like the metaverse and virtual reality experience. They've always been built more like university campuses rather than like cities, you know, like a city is like organic and, you know, it's like, there's different sectors and different groups and it's very chaotic. It's very bizarre rather than cathedral, right?

• 1:35:03Ryan Sean Adams?

  The metaverse hasn't risen up because it's basically been all cathedral-based. And I think the Ethereum piece is going to accelerate the movement to the metaverse. And you know, some people might not like that, like some people like the physical world, but I just feel like it's inevitable, right? So it's kind of like, you may not like that JPEGs are so valuable, but like by resisting that movement, you're just going to disconnect yourself from the wider movement that is humanity. And I don't know, you're going to FOMO and later, I don't know, you're going to realize it on the back end of this. I want to be pressing into the frontier of the metaverse. And that's the thing. The experiments are going to get weirder.

• 1:35:46Ryan Sean Adams?

  There's going to be massive opportunities for everyone who discovers this early. So I guess what I'm excited about is the metaverse and the invitation, the opportunity is like, plug in now. We are so, so early. This whole loot phenomenon is just like another unlock and we'll see where that goes. But it is so early to be here, but make sure you're here. Make sure you're plugging in.

• 1:36:09David Hoffman?

  Yeah, just think about how valuable the metaverse is and how fortunate and lucky we are to be at the beginning of it. I think people are all have the conviction that whatever the metaverse is, it's coming. And I think, I think there's a very valid case that it is being built because of the property management system of Ethereum, actually instantiating objects into the metaverse, whatever the metaverse is. And you are watching that in real time and you get to tap into the value that is created. And so like, that's why there's so much like energy and excitement on this loot phenomenon. And that is just the beginning, right? Like, there's going to be so many more loot things that come out. And if you are paying attention and if you are on, on, on the ride, like you will be able to take advantage of the creation of the metaverse.

• 1:36:52David Hoffman?

  You are watching the metaverse being born. Make sure you have stories to tell your kids about how you were there.

• 1:37:00Ryan Sean Adams?

  But also take breaks.

• 1:37:01David Hoffman?

  Also take breaks. Also take breaks.

• 1:37:05Ryan Sean Adams?

  Not too much. All right, David, meme of the week time. Hey, this art piece is phenomenal. Explain this art piece and then we'll get to the meme.

• 1:37:11David Hoffman?

  Yeah, so this is a famous Renaissance painting out of the Romantic era. And it's, I can't remember, it's like journeyman standing on frog over sea storm. Just a very, just like romantic image of this guy, like, looking over this vast, like, foggy sea ocean. Again, like, it's a meme of the Romantic era of the Renaissance paintings. And now we have this.

• 1:37:36David Hoffman?

  And so this is the same image overlaid, but instead of the guy standing on the sea rocks, he's standing on an ether rock, which is going for like $400 million. And then there's just a sea of JPGs in front of them. And also, this guy is now an alien crypto punk with a beanie.

• 1:37:54Ryan Sean Adams?

  This is the new frontier.

• 1:37:55David Hoffman?

  This is the new frontier.

• 1:37:56Ryan Sean Adams?

  Yeah, absolutely. Great meme. Guys, thank you so much for hanging with us. Of course, none of this has been financial advice. Ether is risky, so is DeFi, so is Bitcoin, so is everything in this space. But we are entering the metaverse. This is the frontier and we're glad you're with us on the Bankless journey. Thanks a lot.

• 1:38:17David Hoffman?

  And if you're on the YouTube, get ready for our moment of zen.

• 1:38:45Ryan Sean Adams?

  Hey, we hope you enjoyed the video. If you did, head over to Bankless HQ right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence. We recommend joining our daily newsletter, podcasts, and community as a Bankless premium subscriber to get the most out of your Bankless experience. You'll get access to our market analysis, our alpha leaks, and exclusive

• 1:39:09David Hoffman?

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