ROLLUP: 2nd Week of March (Beeple NFTs, EIP1559, Stimulus Checks, GBTC)

Download the crypto meta to your brain in this weekly show. ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ GO BANKLESS WITH THESE SPONSOR TOOLS: ⭐️ AAVE - BORROW OR LEND YOUR ASSETS https://bankless.cc/aave 🚀 GEMINI - MOST TRUSTED EXCHANGE AND ONRAMP https://bankless.cc/go-gemini 💳 MONOLITH - GET THE HOLY GRAIL OF BANKLESS VISA CARDS https://bankless.cc/monolith 📈 KWENTA - DERIVATIVES TRADING WITH INFINITE LIQUIDITY https://bankless.cc/kwenta​ https://bankless.cc/kwenta%E2%80%8B ------ 📣REGISTER FOR COINDESK CONSENSUS 2021 AND SAVE $20 W/ BANKLESS http://bankless.cc/consensus2021​ http://bankless.cc/consensus2021%E2%80%8B ------ MARKETS BTC Price: $55k ETH Price: Low-Mid 1800s Mostly TVL in DeFi: $41.2B $DPI: ~$450 MEV Dashboard https://explore.flashbots.net/ DeFi Undervalued? Coinbase vs. DeFi https://twitter.com/StaniKulechov/status/1369314364944244737?s=20 Global Banking $6.2 Trillion, DeFi $85B https://twitter.com/0x_Lucas/status/1369808216490602498?s=20 $3B valuation BlockFi: https://twitter.com/BlockFiZac/status/1370012146503929856?s=20 DAOs With Treasury Reports https://twitter.com/Matthew_Graham_/status/1367521656927838209?s=20 GBTC Trading 15% Below BTC Spot Prices https://www.coindesk.com/grayscale-halts-new-investments-in-gbtc-after-trading-at-15-below-bitcoin ------ RELEASES Send From Arbitrum to xDAI (Hop Protocol) https://twitter.com/HopProtocol/status/1367914160483299332?s=20 Optimism Dai Bridge with Fast Withdrawals https://forum.makerdao.com/t/announcing-the-optimism-dai-bridge-with-fast-withdrawals/6938 Superfluid https://twitter.com/superfluid_hq/status/1369676939913486337?s=21 FEI Protocol https://www.coindesk.com/coinbase-naval-framework-ventures-19m-raise-fei-stablecoin ------ NEWS $1.9T Covid Relief Bill and $1400 Stimulus Checks https://www.nbcnews.com/politics/congress/senate-passes-1-9-trillion-covid-relief-bill-including-1-n1259795 Fed Says Reopening Could Cause Inflation https://www.cnbc.com/2021/03/04/fed-chairman-powell-says-economic-reopening-could-cause-inflation-to-pick-up-temporarily.html EIP1559 Approved for London Hard Fork https://twitter.com/TimBeiko/status/1367858606889037824?s=20 EIP1559 - Front Page of Bloomberg https://i.redd.it/hdgboaz8xml61.jpg ETH Miners Protesting EIP-1559 https://cointelegraph.com/news/ethereum-miners-plot-hash-power-show-of-force-against-eip-1559 Meitu Buys $22M ETH, $17.9M BTC https://twitter.com/TrustlessState/status/1368639534770966537?s=20 Beeple NFT $69M https://www.telegraph.co.uk/technology/2021/03/11/digital-artwork-snapped-69m-record-sale NFT Environmentalism https://joanielemercier.com/the-problem-of-cryptoart/ SuperRare Response https://medium.com/superrare/no-cryptoartists-arent-harming-the-planet-43182f72fc61 US Lawmakers Introduce Crypto Bill https://www.coindesk.com/lawmakers-digital-asset-regulation Wyoming DAO Bill https://twitter.com/awrigh01/status/1369328856260354051?s=20 NBA Top Shot Freezes Funds https://defited.medium.com/my-centralized-experience-dapper-3d3e3a99cbd7 New Grayscale Job Postings - ETF? https://twitter.com/coindesk/status/1369451478428090369?s=21 JPMorgan Crypto Proxy Basket https://www.coindesk.com/jpmorgan-to-launch-cryptocurrency-exposure-basket-of-bitcoin-proxy-stocks Logan Paul Sponsored Tweet Paid in SFI https://twitter.com/Buhlaque/status/1369149498098860041?s=20 ----- TAKES Everything is Broken https://www.zerohedge.com/markets/mauldin-everything-broken Reinvesting in Crypto https://twitter.com/ryansadams/status/1368944228382965765?s=21 Steinworld’s Ethspansion from Genesis https://twitter.com/takenstheorem/status/1351409209305305090?s=20 Today Show Laughing About NFTs https://twitter.com/econoar/status/1369344244880527361?s=20 ----- MEME L2 vs ETH Killers https://www.instagram.com/p/CMLVE2YAQQ2/ ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures

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

• 0:08Ryan Sean Adams?

  Bankless Nation, happy 2nd week of March. This is your roll-up. David, what are we doing today?

• 0:13David Hoffman?

  We are rolling up the 2nd week of March. It's always an ambitious endeavor in the world of crypto to condense a full week of news into as short a time period as possible. And this is what we try and get done on the weekly roll-ups. We talk about the markets, what has happened in the last week of the markets. We go into news, what is in the news cycle in the last week. And then we go into releases, what got released in the last week. And then we finish up with some ecosystem takes. Who had some good opinions in the last week of crypto? And then we go into what David and Ryan are excited about. And last, and my personal favorite, the meme of the week to finish things off.

• 0:48Ryan Sean Adams?

  Yep, you come for the roll-up, you stay for the meme. That's how it goes. David, you ready to get into the roll-up?

• 0:54David Hoffman?

  Let's roll it up, Ryan.

• 0:55Ryan Sean Adams?

  Alright, man. Hey, before we do, one thing we should mention to our listeners is that Consensus is having a conference. This is a bull market conference, and there's only like 5 more days. I think by the time you listen to this, it might be 4 more days to get a ticket at a reduced price with a Bankless code. You can get that for $79, so make sure you check that out. I will be going. David, Ray Dalio is gonna be there. You know, what if he announced he was buying Bitcoin at this conference? I'm not saying that's gonna happen, but like, what if? You know? You wanna be there for that? I wanna be there for that.

• 1:27David Hoffman?

  You know, it's more likely that he would because he's going, right? Like, why would Ray Dalio go to a crypto conference if he isn't intrinsically interested in crypto? Question mark?

• 1:36Ryan Sean Adams?

  Wow, this is how rumors start. We don't know, guys, of course, but check out that conference. It's gonna be a lot of fun. David, let's get to markets. What is Bitcoin telling us this week? It's not telling us that Ray Dalio purchased, but it's telling us something good, I have a feeling. What's the price?

• 1:52David Hoffman?

  Yeah, Bitcoin is really pushing again up against a previous all-time high. It is at $57,474. What is that previous all-time high, Ryan? If you go out into the longer timeframes, I think it's something like $58,000 something? We have got to be really close.

• 2:10Ryan Sean Adams?

  Yeah, there it is. We're really close to the peak there, so we're almost climbing Everest again.

• 2:14David Hoffman?

  A little over $58,000, and we are just under that. Just one more $1,000 pump out of Bitcoin, and we could be seeing Bitcoin all-time highs once again.

• 2:23Ryan Sean Adams?

  Ether is not doing us any favors this week. It's, you know, it's just hanging. It's just hanging. Under 2,000. I want to celebrate that ETH 2K again, but not going to be this week. What, where are we at and what's going on?

• 2:36David Hoffman?

  Yeah, Ether price, I think it's moving up off the floor pretty strongly, struggling to keep itself above $1,800. At the time of recording, $1,700 and not, I always mess that up. 107, $1,796 is the Ether price. And I, I think it's in a little bit of a holding pattern, but we are definitely moving up to $2,000. 4K by May, question marks?

• 3:03Ryan Sean Adams?

  4K by May. Well, look, your last call of it won't drop below 1,300 kinda held, so congrats on that, sir.

• 3:10David Hoffman?

  Perfectly held. It went down to 1,297 and then just got right back up there. It did not like the 1,200s.

• 3:17Ryan Sean Adams?

  Sir, sign me up for your hedge fund, sir. When you, when you found that? David's making the calls here. All right, let's, we'll make some calls. We've got total locked in DeFi. That is holding steady as well. Over 40 billion though. That's a lot locked in DeFi. Anything you want to say about that or should we skip to DPI?

• 3:35David Hoffman?

  More DeFi protocols, more assets deposited into DeFi protocols. Eventually we are going to just resume this climb up this mountain. And, you know, next stop, 100 billion dollars. Maybe I'm just a permable.

• 3:47Ryan Sean Adams?

  You know what? You are a permable, but it's crazy to me. Do you remember we had that conversation with Vance from Framework? Like way back over the summer and he was predicting total locked value. And he said something like 100 billion would be like the low estimate of total locked value. And now here we are at close to 50 billion, right? Well done Vance. Another guy who could, you should start a fund with Vance, David.

• 4:08David Hoffman?

  Fantastic podcast episode. The bull case for DeFi. 100 billion dollars locked in DeFi at the time of recording was a little bit absurd. But now we're only a little bit over a doubling away from that. And there's so much left in this bull market too.

• 4:23Ryan Sean Adams?

  Dude, our, our previous podcasts were fire. Like if you listen to those, even like, um, the bull case for NFTs has held up very strongly. We recorded that back in the fall. Uh, anyway, go check out Bankless Archive. You guys can see some of those predictions.

• 4:37David Hoffman?

  Bankless doesn't age. I dare any listeners to go and find, find something that has aged poorly. I dare you.

• 4:44Ryan Sean Adams?

  Wow, someone will now. So you just, uh, you just taunted all of Twitter. Um, all right. Tell us about DPI. That's at 450. So once again, this is the DeFi Pulse Index. We talk about it every week because it's important. These are the top 10 DeFi protocols. We're hanging out at 455 or so. Um, a little up on the week, actually. Not bad.

• 5:07David Hoffman?

  Yep. Started, uh, ended the last week at $420. Now we are at $455 in the DeFi Index. Again, a slow, slow march up and to the right for the DeFi Index. Let's look at it versus Ether, Ryan. All right, here we are, DPI versus ETH, .251 DPI for, versus ETH. Um, and we are seeing that channel play out in the longer timeframes, DPI versus ETH over the course of 2021, doing a really good job of staying in a channel, uh, down versus ETH on the week, but still in that upwards trend up and to the right. And again, DPI versus ETH is the indication that people are being risk on. Ryan's having trouble navigating charts. He clearly doesn't look at the charts.

• 5:51Ryan Sean Adams?

  Look, man, I'm a long time, long-term permable, so I don't care what's going on in the minute by minute, David. But like, what is this telling us? Are we still in DeFi season?

• 6:00David Hoffman?

  Yeah, we are still in DeFi season. Go ahead and hit that, uh, year to date, YTD in the bottom left corner. And we can see what it's been looking like. There we go. Uh, yeah. So again, a, a local, in, local down in the last week, but in that solid up and to the right trend.

• 6:16Ryan Sean Adams?

  Very good. Okay. Um, let's talk a little bit about this dashboard. We like showing dashboards. We like showing. Data in the market section. This is the MEV explorer. You're gonna have to explain this. Minor extractable value is what MEV stands for. What is it? Why is it important? It looks like it's going up, but unlike our other numbers, going up has been a good thing. This is not necessarily a good thing. We don't necessarily want this number to go up. Get into this for us, David.

• 6:45David Hoffman?

  Yeah, it's a nuanced conversation. I wouldn't say that MEV is exclusively a bad thing, but if it's unanswered for or unaccounted for, it definitely can really mess with your blockchain. A minor extractable value is the value that you can extract if you are a person that has the right to order transactions. And in proof of work, those are the miners, right? So miners are collecting transactions throughout the ecosystem. When you broadcast a transaction, it goes into what is called the mem pool, which is where all the miners listen to, and they start pulling out of all the transactions with the highest gas fees, and then they include them in a block. But what sophisticated miners can do is they can order transactions as they see fit

• 7:26David Hoffman?

  to maximize their own returns, because they also get to inject their own transactions as well, right? And so miners can tinker with trades. If people are putting in trades into Uniswap, USDC for DAI or Ether or whatever, miners can take that spread between the input and the output of those trades, and they can take that for themselves, because they're the ones ordering the transactions. And we see this in bidding wars when bots try and arbitrage or compete for the rights to make, to take this spread. And what ultimately happens is that these arbitrage just bid up the value of the gas and into, up to the value of the transaction that they would have received, right?

• 8:06David Hoffman?

  And so if through an arbitrage trade that they would have gotten $100, they'll bid up to $99 worth of gas. So ultimately, it just goes to the miners. And this can be destabilizing for a blockchain. If a block in Ethereum gets mined and it has 100 ETH worth of fees, well, Ethereum only issues 2 ETH per block. And so Ethereum, the blockchain, won't be stable for 50 more blocks until the issuance of Ether catches up with the fees issued by that one block. EIP 1559 is a fantastic mitigator of this, but there are plenty of other things to be concerned about because this is a destabilizing event for for blockchains. And why this is in markets is that this is an important metric that people need that is not found in legacy in legacy finance.

• 8:51David Hoffman?

  This is not something that has correlates. I guess we could talk about like the extremely high frequency traders.

• 8:57Ryan Sean Adams?

  Yeah, exactly. One correlate, I would say, is sort of the the flash boys, high frequency traders who who literally park their servers like as close as possible next to the the NASDAQ servers and and have an advantage that way by getting their orders in before everybody else. This is somewhat similar to that, right?

• 9:14David Hoffman?

  That's exactly right, right? Except now now that now there's a new party, now it's the miners or in future this is the proof of stake validators. And and this is going to be a metric that traditional finance is going to first be intimidated about, but I think will really increasingly come to love because of how much rich data, amongst other things, is provided to them through this metric. And so this is going, paying attention to MEV is going to be a decades long experiment. And it's going to be one of the most fascinating economic experience experiments that humans have ever gone through.

• 9:46Ryan Sean Adams?

  Yeah, it'll it'll follow us to into this multi chain future. It'll follow us to to layer two when layer two validators have the ability to reorder transactions. We'll see MEV there. So it's it's something kind of, I guess, pernicious in some ways. It's something that we definitely have to to monitor.

• 10:02David Hoffman?

  It's harnessable.

• 10:03Ryan Sean Adams?

  And it's track. It's harnessable, it can be used for good. Anyway, we've talked about it a lot enough, but we'll look at this metric from time to time in the weekly roll up. I think the key takeaway is it's going up.

• 10:13David Hoffman?

  It's going.

• 10:13Ryan Sean Adams?

  Miners are finding ways to extract value out of reordering transactions and and we should continue to monitor that in the future.

• 10:21David Hoffman?

  MEV is a double edged sword and it's up to consensus mechanism designers, mechanism designers to make sure that that sword is a weapon for good, not for bad.

• 10:31Ryan Sean Adams?

  Let's slay Moloch with that sword, shall we, sir?

• 10:34David Hoffman?

  Indeed.

• 10:34Ryan Sean Adams?

  All right, David, this is an interesting take, a take by Sani from Ave. Is DeFi undervalued? Well, Coinbase is worth $100 billion. That valuation demonstrates maybe how undervalued DeFi is. Look, David, if you compare the Coinbase valuation right now, it's 100 billion. Hasn't, hasn't released its IPO yet. It will, but this is what it's trading for on secondary, like prediction type markets, right? So it's a fairly good proxy. $100 billion, one crypto bank, all of DeFi put together, David, you know how much that is?

• 11:06David Hoffman?

  How much?

• 11:08Ryan Sean Adams?

  I'll tell you, 85 billion. It's less, all of DeFi is worth less than one single solitary crypto bank. The interesting thing, of course-

• 11:15David Hoffman?

  Are these the aggregate of DeFi tokens? Is that how we measure it?

• 11:17Ryan Sean Adams?

  Yes, aggregate of DeFi tokens right now. So total value of DeFi is about 85 billion market cap, according to CoinGecko. Valuation of one crypto bank, 100 billion. Feels to me like DeFi has a long ways to catch up. Maybe it's undervalued at this point. And if you look at the banking, global banking system right now, global banking market cap, Lucas from our team put this together, 6.2 trillion dollars, whereas the market cap of DeFi is only 85 billion. So we are very early on, is the point. One thing I'd like to say about this is DeFi tokens don't have the overhead that Coinbase's and traditional banks have, David, right? Like, they don't have offices, they don't have many employees.

• 12:02Ryan Sean Adams?

  Like, Uniswap is a team of like 15 people compared to Coinbase, which employs, you know, thousands. And then big banks like crypto, like JP Morgan, they're employing tens of thousands, right? So market cap has got to flip in at some point, too. We are in the early days. Any takes here?

• 12:19David Hoffman?

  Yeah, I think the reason why Coinbase is valued at such a high level versus DeFi is because DeFi is harder to understand than Coinbase. And a constant theme that we talk about on Bankless is it's bullish to be understood. And people are understanding Coinbase sooner than they are understanding DeFi. And that is my explanation for the discrepancy between these two. These two valuations and that's also the alpha that bankless listeners should be paying attention to because if you understand DeFi, you can be bullish on it and express that. And if hopefully we're right, cross our fingers, but like the discrepancy between these two things should definitely not just equalize. Another reference to Vance Spencer's podcast

• 13:01David Hoffman?

  with us, the bull case for DeFi is that people that build DeFi protocols, they're not going for the typical C corp, you know, a public IPO valuation. They are going for many hundreds of billions, if not trillions of dollars worth of value created. And there's no way that that equates in the legacy world. We are trying to create something substantially new and value generative and the valuations of DeFi protocols at maturity should be orders of magnitude larger than the typical company IPOing on the stock market.

• 13:35Ryan Sean Adams?

  David's bullish. DeFi maybe undervalued. You know, it's up to you to use these protocols and determine for yourself. That's part of the bankless journey as well. Don't just take our word for it. Go use this stuff and see for yourself. David, let's skip to this. We mentioned this last time on the rollups, but grayscale is still, this is the GBTC product and the ETH product. They are still trading under NAV. And traditionally, when we've talked about these products, these of course can be purchased in traditional brokerages like Fidelity, you can buy GBTC that is not actual Bitcoin. It's a trust. It's a proxy for Bitcoin. It comes with its own management fees, but it's always traded over spot. Same thing with

• 14:15Ryan Sean Adams?

  ETH. It's always traded for more than the value of its underlying. No longer, David. Now, last week, it's trading for 15% below spot price of Bitcoin. I asked crypto Twitter, like, what's going on here? Because we talked a little bit about it, but like last time, but we didn't talk about it in detail. And David, you know, the most interesting answer, I got a lot of different answers. Some people are trying to figure out what's going on. But the most interesting answer to me was that actually GBTC is facing

• 14:50Ryan Sean Adams?

  Some competition these days. Okay, so MicroStrategy, what is that? Well, that's a stock that you can buy in your fidelity account that can be a proxy for the price of Bitcoin. There's rumors of ETFs on the horizon. There's increasing competitive pressure on GPTC. And so it is trading at a discount as a result of this, this increasing competition. So net, David, I feel like that's a good thing for the space. Like, we want competitive pressures for these, these proxy financial products. And you know, the thing we want most of all, David, is we want the SEC to let retail get access to an ETF because it's a complete ripoff right now.

• 15:35Ryan Sean Adams?

  And all they have to do is hit that button to approve and they've been holding back all this time. Gets me upset every time I talk about it. Any takes here?

• 15:43David Hoffman?

  Yeah, there's a huge story here. I think what my opinion as to why this, this, the premium is below the, the NAV. As in like when you buy something, you buy one Bitcoins worth of value. You actually only get 85% worth of a Bitcoin because of grayscale. The, the people have been arbitraging the grayscale premium for forever. And there's a certain, there is a six months commitment that you must do. And so when you deposit your Bitcoin into grayscale with the intention of generating, of capturing that premium. So previously, the, the GPTC premium was 50% over NAV. Meaning that the, the value of the market cap of GPTC was 50% higher than the Bitcoin that was backing it. The reason why this premium was so high because of demand, people wanted it.

• 16:28David Hoffman?

  And so people will come in, submit their Bitcoin and in, in six months, because of the rules of regulation, six months, they would be able to turn their one Bitcoin into 1.5 Bitcoins worth of GPTC. Sell that on the open market and it's for dollars, take those dollars and buy 1.5 Bitcoins. So you magically poof, turned one Bitcoin into 1.5. This has been a massive arbitrage opportunity for so many companies. And it, my opinion is it got flooded. Too many people tried to take the same premium. And as a result, people, when they sell GBTC, they push the pressure down. And it's a really sad story for the typical uninformed retail investor, who wants to go buy Bitcoin in their brokerage and the ways that they are comfortable with.

• 17:10David Hoffman?

  And they buy GBTC at 150% premium. And now it's 15% below the value of Bitcoin. Meanwhile, actual Bitcoin has gone up. And so during times where actual Bitcoin holders have made money, GBTC holders have lost money. And this is the fault of the SEC, not grayscale in the slightest. It is the SEC's fault for not protecting consumers by approving an ETF. This is what an ETF is supposed to do. And instead, we have these shitty inefficient mechanisms to try and get Bitcoin exposure. Just approve the ETF. Come on, let's get this done.

• 17:48Ryan Sean Adams?

  It's really, it's causing the ripoff, like a mass ripoff of retail investors. And it's really a shame, absolutely. I'm sure there's tons of people from the SEC listening to this right now that heard that message, David, and are rushing to approve the ETF.

• 18:02David Hoffman?

  Just do it. David said so.

• 18:05Ryan Sean Adams?

  David says so. David wants it. Look, retail wants it. It's very clear from a demand perspective. David, the last thing we should mention is our favorite Gitcoin grant organization. This is a grant organization funding public goods on Ethereum. They have just launched their latest grant running, uh, grant. They just launched their latest grant funding round. That is hard to say. And there's a matching process here. Tell us about that and how folks can get involved.

• 18:34David Hoffman?

  Yeah, Gitcoin is a beloved platform of the Ethereum ecosystem. Gitcoin, I consider a public good, but it's importantly distinct from typical public goods because it is a public good that funds other public goods. And what is Ethereum other than a layer of hosting public goods of money and finance on the internet? And so using Gitcoin is really important. And so if you like something, if you like to use an application or a protocol, and you would want to help fund that, Gitcoin Grants is for you. The cool thing about Gitcoin Grants- Is that your dollar is amplified, right? And so if you use something for free, but you would like to contribute value to it, you can donate a dollar. And because of quadratic funding, which is something that everyone listening should be familiar with.

• 19:18David Hoffman?

  I think it's a little bit too much to explain all the details about, but I'll do my best. Is that there is outsized matching. And so if you donate $1, you could get matched up to $10 or $100. And how much you are matched by is determined by how many other unique people are also donating to the same thing that you are donating. It's a very clever mechanism. And it's a way to fund things on Ethereum that otherwise wouldn't have gotten funded. So if you like to use stuff in Ethereum, either protocols, or you want to see protocols built out. Last, last Bitcoin grant, I donated to tornado cash because I want privacy on Ethereum. I also am going to intend on donating to connects network of this, this cycle. Because I want that L2 liquidity mesh network to be built out.

• 20:04David Hoffman?

  If you believe in something, donate to it. Now's the time. You've probably made a decent amount of money in the last few months. Throw a few dollars at Bitcoin.

• 20:11Ryan Sean Adams?

  Yep. Every dollar, depending on the project you fund could be worth like, we're not talking small amounts, a dollar. You get $20 matching, $50 matching, $100 matching. That is the power of quadratic matching, as David was saying. So check that out, guys. Before we get into the releases section, which we're super excited about, we want to tell you about the fantastic sponsors that made this episode possible.

• 20:34David Hoffman?

  Gemini is the world's most trusted cryptocurrency exchange. I've been a customer of Gemini since I first got into crypto in 2017, and it's been my main exchange of choice to make my crypto buys and sells. Gemini is available in all 50 states and in over 50 countries worldwide. And on Gemini, there are markets for over 30 various different crypto assets, including many of the hot DeFi tokens. And it's one of the few exchanges that has liquid die markets. Gemini just launched their earn program where you can earn up to 7.4% interest on 26 various crypto assets. If you're tired of paying fees in DeFi, or you don't want to worry about DeFi exploits, but you still want to earn interest on your crypto assets, Gemini Earn.

• 21:15David Hoffman?

  is the product for you. Another product I'm stoked to get my hands on is the Gemini Crypto Back Credit Card, which gives you 3% cash back on all of your purchases, but paid to you in your preferred crypto asset. When I get my Gemini credit card, I'm going to make sure that I get my cash back in ETH. So whenever I buy something, I get a little bit of ETH bonus back to me at the same time. You can open up a free account in under three minutes at Gemini.com/goBankList. And if you trade more than $100 within the first 30 days after signup, you'll be gifted a free $15 Bitcoin bonus. Check them out at Gemini.com/goBankList. Aave is a borrowing and lending protocol on Ethereum, and just recently released Aave version 2,

• 21:56David Hoffman?

  which has a ton of cool new features that makes using Aave even more powerful. 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 deposit in order to gain yield, and all of those same assets can also be borrowed from the protocol if you have deposited collateral. Here you can see me getting a 200 USDC loan against my portfolio of a number of different DeFi tokens and 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 that interest rate in permanently.

• 22:36David Hoffman?

  One of Aave's V2 features is the ability to swap collateral without having to withdraw your assets, trade them on Uniswap, and then deposit them back into Aave. Aave does all of this for you, all in one seamless transaction. So you don't have to repay loans in order to change the collateral you have backing them. Check out the power of Aave at Aave.com. That's A-A-V-E dot com.

• 23:00Ryan Sean Adams?

  All right, David, let's get to releases. This is one I am super excited about. What I'm showing here on Twitter is Hot Protocol, and this is showing a MetaMask connection. And we're moving from one Layer 2 to another sidechain or another Layer 2. From Arbitrum, the Layer 2 rollup to XDi, we're actually moving funds in this transaction. That's what you're seeing if you're viewing this on YouTube. David, explain what is going on here with Hot Protocol?

• 23:29David Hoffman?

  Right, so the problem that is being addressed is that liquidity can be fractured across various L2s, and that's bad, because we want liquidity to be centralized, or centralized into specific exchanges. And HOP protocol, I don't know if this is true, but I'm assuming what they are doing is some sort of payment channel mechanism, where they have liquidity providers on both sides, or they're actually sending it, routing it through the L1. I don't think that's true. I think what must be going on is a payment channel. And they are just connecting assets across various L2s. So somebody has DAI on both sides of X DAI and Arbitrum, and then somebody wants to trade ETH, and they want to get ETH on one side, DAI on the other.

• 24:12David Hoffman?

  Market makers on both sides of the L2s are allowing people to just swap assets. So they're not sending their assets, they are just swapping assets, and the assets can be either the same or different on both sides. That is a really important tool to make sure that liquidity across L2s and overall L2 usability stays really, really accessible. So getting onto an L2 can take lots of gas, but with something like HOP protocol, you can stay on various L2s and experience all L2s without actually having to go back to Ethereum, because if you end up going back to Ethereum, you're gonna have to pay another gas fee. And that's $100 every time you want to go onto an L2, or so, which, you know, while

• 24:53David Hoffman?

  it's still an improvement on 100% L1 transfers, it's still too much for people that want to be able to use Ethereum. So this is helping them with that.

• 25:01Ryan Sean Adams?

  Yeah, very cool stuff. And of course, we want to be precise in our language, and sometimes we're not always precise, but it's important for listeners to know that the difference between a side chain and an L2, the difference is this: a side chain to Ethereum is not secured by the Ethereum protocol or ETH asset. A layer two, an L2, as David was saying, absolutely is. And so this is a transfer from Arbitrum, which is a rollup, which would be L2, which would be secured by the Ethereum chain, to a side chain, X DAI, which has its own validator set and is not secured. By the Ethereum chain. We'll repeat that every once in a while. So you guys get the flavor of that.

• 25:44Ryan Sean Adams?

  But David, this also reminds me of your conversation with Connect. There is a whole Meet the Nation video on YouTube about that where you talk to Connect. What can you give us the TLDR of that conversation? Because it seems very related to this topic of chain to chain interoperability without having to go back to the main chain.

• 26:04David Hoffman?

  Yeah, Connect has been with Ethereum since 2017, working on payment channels. Because we understand payment channels to be an extremely useful piece of technology. But Connect has really kind of struggled to see where payment channels fits into Ethereum. Except for lately with this exact same problem. And so the conversation I think was really cool because it was one part a lesson in Ethereum history. It was one part a lesson in cryptography. It was one part a lesson in liquidity and one part a lesson in L2s. And so there was a bunch of information all wrapped into one. And basically where Connect has landed is the system for matching orders across L2s, across any L2

• 26:47David Hoffman?

  that is EVM compatible and even stuff that isn't EVM compatible, including Bitcoin's Lightning Network. So if Bitcoin's Lightning Network does ever actually achieve adoption, we could match Bitcoin's Lightning Network with a payment on an L2 via Connect, which is pretty crazy. And so there's a bunch of cross-protocol interoperability and communication that is viable due to these payment channel levels in like that acts as like this mesh network middleware layer between all of these various L2s.

• 27:16Ryan Sean Adams?

  It's super cool to hear state channels actually having almost a rebirth moment just as we need them. And we need this this chain to chain interoperability and state channels may be a solution for that. Super cool.

• 27:27David Hoffman?

  Listeners should double check us if state channels are actually part of hot protocol. I'm not 100% sure on that. So take note.

• 27:34Ryan Sean Adams?

  That is true. Okay. This is another interesting, I think, update from Maker Dow this time. And this is they are announcing optimism. So this is optimism roll up, die bridge with fast. Withdrawals. This is a theme that I think we'll hear. It's really like Layer 2 season. I think we'll see a ton of DeFi protocols over the coming weeks and months start announcing what their Layer 2 initiatives are, what their Layer 2 solutions are, where they're going to deploy next. We heard that last roll up. This is it again. This is Maker Dow, though, a pretty longstanding DeFi protocol, making an announcement of how they're going to handle this. What's the TLDR for us?

• 28:15David Hoffman?

  Yeah, the TLDR for me is that we are solving problems before they actually even arise, right? And so we are allowing tokens, starting with Dai, on and off of L2s with immediate or relatively fast withdrawals. Near instant is what they say. And this is a similar problem to what we were just talking about, but it's fixing the problem of getting on and off L2s from the L1, which, at least with optimistic rollups, getting on is instant and does cost money, and getting off can take up to a week or even longer, depending on the construction of the optimistic rollup. And so fixing that problem is already being addressed, even before optimistic rollups have actually been deployed to Ethereum.

• 28:56David Hoffman?

  And so maybe it's a cart before the horse, but what really my takeaway is that we are having compounding progress in the Ethereum ecosystem.

• 29:04Ryan Sean Adams?

  Yeah, super cool, definitely. This is another DeFi protocol. This one's called Superfluid, and they are announcing that they've deployed not on Ethereum mainnet, but interestingly, they've deployed on right-on sidechains, basically, or Layer 2, with the deployment to Polygon and XDi. And David, when I looked at what Superfluid is doing, I thought it was super cool, because this is an idea that a protocol called Sablier had, which was like streaming payments. So almost a new DeFi money protocol unlock, where if I want to send you $100, I could stream that to you over a 24 period of time. Or let's say I want to pay you as a contractor, David, and I owe you, you know, $2,000 a month.

• 29:49Ryan Sean Adams?

  I could stream that to you over the 30-day monthly period of time. It's like the idea of streaming money is super cool. It just wasn't actually practical. On Ethereum mainnet because of gas fees and because you know Ethereum mainnet is not not really great for this these peer to peer transactions that are small amounts, but it works super well on something like Polygon, something like XDi, and that's what super where super fluid is deploying it, handle subscriptions, salaries, rewards, any composable stream of value with continuous settlement and per second net netting for what for extreme capital efficiency. This is a cool new unlock, David, and I'm super excited to check this out and actually try it out.

• 30:33David Hoffman?

  Yeah, listeners should understand that this starts with money, but it ends with everything. And that's why they have composable stream of value. So think about equity distributions or vesting periods where like you get unlocked in tranches and it's just rigid and we can smooth that out. Vitalik, I know, likes to talk about streaming payments for compensation for people that allow people to use their Wi-Fi. And so you could pay someone a penny for every megabyte you download using their Wi-Fi, meaning you can go anywhere in the world and and somebody might be able to let you use their Wi-Fi if you just pay them with streaming payments. The the use cases for this are infinite, infinite, any any type of asset, any valuable asset, any

• 31:15David Hoffman?

  sort of logic about about time. I think time is actually the really strong component here because it allows you to link assets and time. I think that's kind of cool.

• 31:25Ryan Sean Adams?

  Yeah, absolutely. Something you cannot do again in the traditional space for sure. Last, we should talk about this release and it's a release that is actually upcoming, but the the announcement is that some pretty large VCs, Andreessen Horowitz, Framework Ventures, we were just talking about Vance earlier from Framework, Coinbase Ventures, Angel List, the Vaul, a bunch of people are investing in the Faye Protocol. This is David, a new algorithmic stablecoin. We talked about algorithmic stablecoins a lot in the past. Empty Set Dollar would be an example of this. Also, Maker Dow is kind of an algorithmic stablecoin, but it is collateral backed, whereas Empty Set Dollar is not. This Faye

• 32:08Ryan Sean Adams?

  Protocol seems to kind of mix a bit of that collateral backed world, but rather than being backed by vaults that are put in place by individual users, it's actually backed by a protocol. So it's almost like protocol collateral backed. There are a ton of specifics here and actually the mechanism design gets pretty complicated, right? But again, this is back to the idea that what is a stablecoin trying to do? It's trying to be stable over time. It's trying to have a predictable stability mechanism attached to it. This is an even more complicated way to do it. And we're innovating. Again, back to the theme we always talk about on Bankless David, which is every money experiment on Ethereum

• 32:50Ryan Sean Adams?

  will be tried. Any conceivable experiment that can be tried will be tried. This is just another one. I'm not sure if I'm bullish or bearish on this, but in the category of algorithmic stablecoins in general, something's got to work. We're just trying too many experiments for it not to.

• 33:05David Hoffman?

  Yeah, that's exactly right. I dove into this white paper trying to get my head wrapped around this to be able to explain it. And I saw some pretty crazy math equations that are well beyond my interest. My takeaway was that there are things being tried on Ethereum that are increasing in complexity and increasing in sophistication. And I'm kind of reminded that the bare bones DeFi protocols, well, we don't consider them bare bones, but they, I think in the future, they could be considered the bare bones DeFi protocols. The DeFi protocols that are based off of addition, subtraction and division.

• 33:40Ryan Sean Adams?

  Like Uniswap, it's super simple.

• 33:43David Hoffman?

  Whereas like DeFi protocols based off of like calculus or whatever was more complicated than calculus. I didn't do very well in math in school is coming and that is a potential feature. And so can't wait for all the crazy calculus DeFi apps to come.

• 33:57Ryan Sean Adams?

  Yeah, they're definitely increasing in complexity. This is interesting because it actually has a launch event where it's going to be distributed. People can park ETH in it to get some of the Faye protocol. We'll have some stuff on the newsletter about that. Maybe an alpha leak as it launches. We will see. David, all right, that's releases. Let's get to news. Here's the big news. This isn't crypto news. This isn't just crypto news. I mean, this is like.

• 34:23David Hoffman?

  Global.

• 34:23Ryan Sean Adams?

  US news, but it's also global news. The Senate has just passed a $1.9 trillion COVID relief bill. It was much talked about. Everybody gets another $1,400 stimulus check. Of course, if you have children, you get even more than that. David, what's going on here? What are some of the, I guess, key points and takeaways?

• 34:45David Hoffman?

  Yeah, this is a huge victory for Biden, who was kind of leading the charge with trying to get stimulus checks into the hands of Americans. And so this will be the third, yeah, the third stimulus check for Americans. First was 1,200, then another $600 one came and then next a $1,400 stimulus check came. This is in stark contrast to 2008, where I don't think any Americans got stimulus checks. And so we are learning that we have the power of the money printer. The people learned that and the people demanded it. And so while it's one thing that I'm glad bailouts are going to people, not just corporations, we also have to be reminded, at least for us in the United States, of our American privilege,

• 35:27David Hoffman?

  because we have the global reserve asset that everyone else wants. And the money printer of America is printing it out for Americans as a gift because they are Americans. Whereas the rest of the world doesn't actually get access to that money printer, even though they want the dollars. So American privilege being expressed here.

• 35:45Ryan Sean Adams?

  Everybody has, every other country has their own money printer. Some work better than others. The US arguably has the one that works better than them all right now. But the problem with money printers, of course, is that if they are abused, that might no longer be the case. You could run out of ink, I guess, if we're using that metaphor. You know, the interesting thing about this, David, is whatever regime, whatever political regime is in control, is gonna hit the money printer button, like no matter what. This whole modern monetary theory, that is in full swing and in full effect. I think the last 10 to 20 years, what we've seen is money printing that's gone to capital. Essentially, those that control the capital.

• 36:27David Hoffman?

  Oh, yes, yes, yes.

• 36:28Ryan Sean Adams?

  Last 10 to 15 years, I'd say it's more capital, right? So like, you know. We've talked about this on Bankless, the the Cantillon effect, basically, if you're in close proximity to the money printer, you get it first. And so we've seen this in asset appreciation, these stocks, real estate, this sort of thing. But now labor, the people, as you said, are starting to get control of the money printer and bending it to their will. This is what UBI is. And like, I'm not here to say that that's a good thing or a bad thing. I think it is a thing that is happening, and anyone listening to this should absolutely understand that the money printer trend is not going away. We've had the first, I guess, chapter of this whole money printer that's gone to capital.

• 37:11Ryan Sean Adams?

  I think the next chapter is going to go to labor, going to go to the people. We're not going to see the end of these checks that are going to US citizens or citizens of any other country. Their central bank is going to continue to do this. It's going to be a major theme of the decade. And in the backdrop stands crypto, which is not based on central bank monetary policy, something I think about a lot.

• 37:37David Hoffman?

  Very, very, very true. I wouldn't, again, like the the usage of the money printer, I don't think is ever a good thing. I guess that makes me a little bit of an Austrian, but you're totally right. We've been using it and we're going to be using it. And so now the fact that we're giving the the fruits of the money printer out to more people, I guess, is better, in my opinion. I'd still be a fan of destroying the money printer, right? Like that, it's like the one ring that should be destroyed, right? Like, no one should have that power, but we do have that power. So if we're going to have that power, let's distribute it to as many people as possible. That's the ethos behind proof of stake, too, by the way, is staking rewards can be done by anyone, anywhere, anyone with a laptop, right? And so that's the same kind of energy.

• 38:20David Hoffman?

  And the Bitcoin energy is the opposite, saying like, no one should have that power, so we delete it, right? And America is coming to terms with like, well, the American citizens have figured out, well, we have this power. How can we harness it? And then the wealthy elite have been like, damn it, they found out that we have this power. Like, now they know, oh, no, that's my story. Now that's my TLDR of what's going on.

• 38:41Ryan Sean Adams?

  Yeah, yeah, very much. I think, look, the difference between this form of money printing and the money printing that we saw over the last 10 years is this is fiscal, right? This is not, not just the Fed chair, like, you know, adjusting rates or providing quantitative, quantitative easing. This is Congress and the executive branch, like, on behalf of the people, voting to increase money supply and put that in the hands of the people. So this is a whole new chapter, you know, and, look, it's, it's all part of the same story. Let's talk about another story that is super important. This is a crypto native story, but we've been tracking it for a while. This is EIP 1559.

• 39:21David Hoffman?

  In stark contrast.

• 39:22Ryan Sean Adams?

  Yes. What a segue. So in crypto, we're not trying to print more money, actually. We're trying to, to burn money, apparently, right? Bitcoin is the story of fixed supply money, but Ether is becoming a story of actually a negative issuance? Possibly? A burning? Light the furnaces, my friend. EIP 1559 has been approved to go in, not the next hard fork, but the hard fork after, which could be slated for a July release of Ethereum, and that would put this thing, EIP 1559, into the protocol. For, for folks that haven't been paying attention to what EIP 1559 is, could you give a quick summary and tell us why this

• 40:07Ryan Sean Adams?

  is so important?

• 40:08David Hoffman?

  Right. EIP 1559, instead of making a transaction in Ethereum and that transaction fee going to validators or miners, instead it just gets burned. And there's a number of reasons behind this. One, it's just more game theoretically stable if you just burn that fee. And the important juxtaposition here is that transaction fees on Ethereum, it reflects demand for Ethereum's block space, which reflects demands for Ethereum economy, right? And so Ethereum has a protocol when it collects fees. That is like the Ethereum system collecting revenue. That is the GDP of Ethereum. The revenue that Ethereum collects is directly correlated with the GDP of the Ethereum economy.

• 40:52David Hoffman?

  And because we are now burning this Ether, the asset, the scarcity of Ether should also be tracking the GDP of Ethereum. As the GDP of Ethereum grows, we should be burning more and more Ether, making Ether more and more scarce. So this is in stark contrast to the United States economy where our GDP, except for during COVID, our GDP has never been higher, yet we are still issuing money at an all-time high rate. Those two things are backwards because if the American economy, if the American nation state was efficient, it would be able to generate revenue from its own GDP. This is what a nation state does. This is what Ethereum does. It generates security to fund itself, to fund its growth through the GDP that it taxes.

• 41:34David Hoffman?

  In the United States, we tax our citizens and then we also print money. Ethereum taxes the people that use it and then it burns money. And importantly, burns, it issues like a stock buyback on Ether, the asset, because the more and more Ether that it can pull away from the secondary market to make Ether more and more scarce, makes Ethereum and Ether harder to attack under a proof-of-stake paradigm. There's your EIP 1559 lesson, like bang, bang, into like two minutes.

• 42:04Ryan Sean Adams?

  That was awesome, man. And guys, go check out the opening note that David wrote about EIP 1559. It's a great summary. So basically what we're doing is we're taxing transactions and we're giving that back to ETH holders in the form of a burn. Good times to be an ETH holder. The last thing I'll say, David, is I don't think the market has woken up and realized that this is an actual protocol going into a store of value commodity asset like Ether. I don't think the market understands what EIP 1559 is. Guys, I think this is alpha. This is if you are in this space, you see, do you see anybody talking about this? Oh, well, here's the closest thing, actually.

• 42:43David Hoffman?

  Actually.

• 42:44Ryan Sean Adams?

  This is Bloomberg. This is the Bloomberg front page, the first time I've seen an Ethereum-related article. But David, this is what they, this is their headline.

• 42:54David Hoffman?

  So awesome.

• 42:54Ryan Sean Adams?

  Crypto coin outperforming Bitcoin is about to see supply reduced. David, crypto coin, I guess they're talking about Ether?

• 43:04David Hoffman?

  Are they? Crypto coin? That's my favorite crypto coin.

• 43:08Ryan Sean Adams?

  It turns out they are, but this is the first like, I guess, narrative that we're seeing of EIP 1559 escaping into mainstream. So it's still stupor early. The market doesn't understand this. The market has just wrapped its head around 21 million fixed supply Bitcoin. Wait till they figure out EIP 1559 burning supply Ether.

• 43:30David Hoffman?

  Dude, so EIP 1559 extremely elegant upgrade to a blockchain. It just, it is so perfect in every single way. Yet, the best thing about EIP 1559 is not anything about the code. It's about the narrative. It's about the story that is told, which is the best fucking thing about it. Oh, it's so crazy. It's so crazy.

• 43:51Ryan Sean Adams?

  David, we're gonna do an entire episode about EIP 1559, guys, and we have a fantastic guest who's been EIP 1559. Like, the best analyst, the guy who understands it the best, Hasu, who's a pseudo anonymous, I guess, analyst and thinker, researcher.

• 44:08David Hoffman?

  Crypto economic researcher, I would call him.

• 44:10Ryan Sean Adams?

  Yes, we are camping an entire episode on this. It is that important. So stay tuned to Bankless Podcast. Make sure you check out that episode coming. Last thing on EIP 1559, not everyone's a fan. Not everyone's a fan. Miners do not like it.

• 44:24David Hoffman?

  Can't, can't please everyone.

• 44:26Ryan Sean Adams?

  We can't, well, this is Ethereum miners, and this is a headline saying Ethereum miners plot a hash power show of force against EIP 1559. So there's undercurrents of threats coming from miners, of course. Miners' revenue is going to get cut as a result of this, 20%, 30%. I mean, they're doing pretty well, and they've been doing pretty well. Okay, so that's the, that's the backdrop of this. That's the context. But I've had, actually, a lot of people reach out to me, David. And like, are you concerned about this, that it won't go through? Are you concerned that miners might fork? My response to that is no, I'm not concerned at all, not even in the slightest. I think miners think they are, some miners think they are far more powerful over this ecosystem than they are.

• 45:11Ryan Sean Adams?

  They, if they fork, that's great for ETH holders, right? Thanks for the free coin. See you later. I'm gonna sell it. I'm gonna buy some more ETH. That's it. End of story, right? I think that the the threat of miner fork is definitely overinflated. In fact, I think a lot of this might be saber rattling. We'll see if they fork or not. But it could very well be just saber rattling. If they do fork in the end, I'm not concerned about it. What's your opinion on this?

• 45:40David Hoffman?

  Yeah, it's absolutely saber rattling. And the reason why, like the title of this, a hash power show of force. And what that means is that a bunch of miners are going to all signal with their hash power, saying that, hey, we do not approve this. And this is just the wrong paradigm. Ethereum doesn't answer to hash power. That's not what it does. It's not Bitcoin. This isn't Bitcoin Cash versus Bitcoin. This is Ethereum. First off, proof of stake is coming where your hash power is just going to get deleted anyways. And so like, goodbye. And also, cool, you can, anyone can fork a blockchain. It doesn't matter if all of the hash power goes in one direction. If all of the community goes in a different direction and starts valuing the, a different fork,

• 46:24David Hoffman?

  hash power is going to go to the fork that is valued because that's where revenue comes from. It doesn't matter if you have, if 99% of hash power is signaling in support of something. If all of the value goes into a different fork, then miners are just going to go back to that one. Like, the hash power is not the the saber. It's not a weapon. Like, no, it's a bluff.

• 46:46Ryan Sean Adams?

  We, we've, and look, man, we've seen this play out already time and time again, even in the Bitcoin ecosystem, right? With kind of these other miner instigated forks or other party instigated forks like Bitcoin Cash and all of these things. And it's the community that decides what Bitcoin is, the same, same with Ethereum. In fact, more so, because now we have assets that are issued on top of Ethereum. We have a whole DeFi ecosystem that gets to choose which chain is going to be the chain that it supports, right? And so miners have very little power here. I'm not worried at all. EIP 1559 is going to go through, and it's going to be great, I think, for the stakeholders of the platform who are users, DAP developers, people who believe in a decentralized future and want more economic

• 47:32Ryan Sean Adams?

  Bandwidth. I'm super bullish. It's gonna be fine. Don't worry about the miners, guys. All right. Let's talk about this, David. Beeple is setting some more records. Dude, you know what? Seventy million. Beeple Art sold for seventy million on Christie's. Seventy million. You know, this is the-

• 47:49David Hoffman?

  Today, this morning.

• 47:51Ryan Sean Adams?

  Yeah. This just happened. This is the third largest art sale from a living artist in human history. The third largest. Yeah. Like, this is happening in crypto right now. And this is like, almost, it's on the brink of breaking all traditional records.

• 48:11Ryan Sean Adams?

  Look, we've done a lot of NFT content lately. We just talked to OpenSea and Ask Me Anything. It's fantastic. You can check it out on YouTube. We talked to Nifty Gateway. We just had Blau on the podcast. So there's tons of material here, but how would you- What would you summarize, David? Like, what's going on here?

• 48:29David Hoffman?

  Dude, it's, it's pretty overwhelming. And like, people keep on saying, like, this market, the NFT market-

• 48:35Ryan Sean Adams?

  He just had a deep sigh.

• 48:36David Hoffman?

  It's, there's so many things to talk about. And like, I feel out of my element. And many, many people are talking about how it's, it's, this is the top. It's too frothy. And if you're telling me that like, an all-time high record, or a third, third highest or whatever, is, is setting the records in its crypto, and it's just such a short amount of time into this, that, that makes me concerned. But also, it keeps on going up, right? And so it keeps, I, I don't know. But like, I'm optimistic that NFTs are going to innovate and improve in ways that ICO tokens didn't, and in way that DeFi tokens did. And I'm optimistic about that. I'm optimistic about just being able to make NFTs more legitimate, because there are kind of just like

• 49:19David Hoffman?

  dumb NFTs out there. I'm optimistic. But damn, is this accelerating really quickly, really fast. You know, congrats to Beeple. I was listening to a Clubhouse conversation of many, many artists that were all trying to get their heads wrapped around NFTs. And I can't remember who, who was speaking. But they said that, and I don't know Beeple. Trying to get him on the podcast, so if anyone knows him, connect us.

• 49:43Ryan Sean Adams?

  Go Beeple.

• 49:43David Hoffman?

  But they said that Beeple is the best representative to represent NFTs and Ethereum for the space, just as a testament to his character. So that makes me feel very good. So congrats Beeple and thank you.

• 49:59Ryan Sean Adams?

  Yeah, super cool. And look, it pays to be an innovator here and Beeple's certainly an innovator doing stuff when no one else believed it got all the way to Christie's and the third largest sale ever. And it does feel like this is just getting started, as weird as that sounds. We'll see what happens. But this could put a dampener on it, David. There's been a lot of talk.

• 50:17David Hoffman?

  Oh, no.

• 50:18Ryan Sean Adams?

  Yeah, there's been a lot of talk in, I guess, NFT Twitter, right? Which is sort of a subset maybe of crypto Twitter, but also intersects with like Creator Twitter and art, like all of these other communities that were not as plugged into you about the problem of crypto art. And the summary is, the problem is some artists are starting to get their head wrapped around proof of work. In particular Bitcoin proof of work, but also Ethereum is now based on proof of work. And the energy consumption behind proof of work. So at least one artist said that it's a disaster. I issued a first NFT, but now that I realize its environmental impact is kind of the, you know, the summary.

• 51:01Ryan Sean Adams?

  I am no longer issuing an NFT. And so this is of course caused a, I guess, tremors in the NFT community. And there have been responses and other responses. Give me, give me a quick take on this, at least your take, David. Is this overblown? Is this, is this real? Could this curtail the NFT market in a significant way?

• 51:24David Hoffman?

  Yeah, I've never been compelled by the energy sustainability arguments behind proof of work and blockchains, even with Bitcoins. We have to realize that Bitcoin is something that is doing a very useful and good thing. And that unfortunately, that thing consumes energy, but so do so many other things in our world that we also like. It also consumes energy. The counterpoint that I've heard to that is like, well, we also know of this thing called proof of stake. So if we can achieve the same results, but without the energy, why not, why not, you know, say no to proof of work and say yes to proof of stake, which I'm also compelled by. But at the end of the day.

• 52:02David Hoffman?

  The artist connecting NFTs to energy consumption is just too far, too disparate of a connection to make. Like, I just wrote an article about the cultural revolution that I think could come as a result of artistic creation and artistic expression, specifically empowered by NFTs and what those things can do for the world. And there are trade-offs to everything, I guess, and I guess if we could make those trade-offs better, that's always better. But if, if proof of work Ethereum, which hosts economic activity based on NFTs, allows for this cultural revolution, along with all the other innovations behind DeFi, like, it's worth it. And, and things cost things.

• 52:43David Hoffman?

  And at the end of the day, like, the reason why electricity with proof of work is so targeted is it's because it's such an easy target, right? Like, you can see the miners, you can see them just sucking up all the electricity. And we don't know how much, like, the Federal Reserve or the inflating money system, or like, the battleships that the, that the United States employs, or the aircraft carriers, or the F-35s that cost like $10 billion a plane that we don't really use, like, all of that cost stuff, and that's the system of the US dollar. Uh, and so I, I think it's just a bunch of do about nothing.

• 53:18Ryan Sean Adams?

  It's interesting, like, so I, I am sympathetic to a lot of elements of that, that argument. And I think probably Nick Carter from Bitcoin, like, um, makes them best, right? In, in that, you know, everything you just said, basically. Um, I will also say, though, that I'm, I'm compelled by the argument that, well, basically, um, you're saying that there, you know, proof of work does consume energy, right? Um, and that that is worth it for society, and that we're not seeing all of the other energy consumption devices. And I, I, I would say probably someone like Nick would also say, and by the way, some of this energy consumption is actually producing, uh, and accelerating

• 54:01Ryan Sean Adams?

  the move to more renewable energy sources, right? So I think that's all part of the, the argument. But the, the thing I think that is interesting as well is That that may be true with for proof of work, but as you were saying, like if you compare proof of work to everything else, you know, that's really not the argument. What you should be doing is comparing proof of work to a better mechanism potentially like proof of stake. And when you do that and you say, well, is proof of work worth it or not? And what what are we trying to get from proof of work? Well, with Bitcoin, you're trying to get an ultra hard ultrasound digital money. Well, if you could do achieve the same end with proof of stake

• 54:43Ryan Sean Adams?

  and it like the energy consumption is almost like it's nil compared to proof of work. Then why not? Whereas then your argument for proof of work, which is ultimately, David, where I see Ethereum coming down on that side, right? So this whole conversation about NFTs on Ethereum, well, Ethereum is not going to be a proof of work blockchain for very much longer. Like two years, I that would be a long, like I think the merge happens a lot sooner. And so this this entire commentary is going to be nil. Anyway, we'll be issuing NFTs on proof of stake blockchains like Ethereum moving forward and it won't even be a factor. So it's all temporal.

• 55:27Ryan Sean Adams?

  In my opinion, but that does not discount. I do think that this narrative, David, you're seeing echoes of this NFT narrative, but it's going to persist in other ways. Like a company like Tesla putting Bitcoin on its balance sheet in the future. Bitcoin is going to have to wrestle with this anti proof of work narrative in a way.

• 55:46David Hoffman?

  Very strong.

• 55:46Ryan Sean Adams?

  On whatever side, whatever side of the argument you're on in a way that proof of stake chains do not, and that could give proof of stake chains like Ethereum, a narrative advantage regardless of of what the data actually falls down on, what side it falls down on.

• 56:02David Hoffman?

  I don't know who this artist is that made this blog post or if they are a big deal artist or just a minor deal artist. I don't really know. But I do know that NFTs are a democratizing piece of infrastructure that can help creators monetize. So instead of going and and working their nine to five job, perhaps that job is minimum wage. Perhaps they're living a less than life, less than comfortable lifestyle than they really deserve because they can't find ways to monetize their own labor. If NFTs can do that, the costs of the, the proof of work costs of that $70 rarrable minting transaction is completely justifiable. Like, think about the other downstream implications of this. If we can harness the energy behind NFTs and employ a generation

• 56:47David Hoffman?

  who is otherwise doing meaningless work in their nine to five gargantuan job that they felt was meaningless and it sucked on their soul. Let's consume some energy and get that done. Like, it's worth it. It's worth it.

• 56:59Ryan Sean Adams?

  Yeah, absolutely. Look, guys, I think the bottom line is it's, uh, it's way too soon to cancel NFTs. Let's not do that just yet. We've got more work to do. It's getting better.

• 57:08David Hoffman?

  Don't cancel NFTs.

• 57:11Ryan Sean Adams?

  Yeah, so anyway, that's a, that's a narrative we will keep you updated on as well. All right. Regulation narrative. We actually have some good regulation news this week. U.S. lawmakers, well, they haven't done it yet, but they're introducing a bill to clarify crypto regulations. One of the key clarifications here would be what is a security and what is not? Can you give us some clarity? We've been asking for this for a long time. That would definitely help in the U.S. if this bill goes through. I'm more excited about this at the state level, uh, because this is even more forward looking. Uh, in the state of Wyoming, which has been a very cryptic crypto friendly, uh, state. Wyoming passed a bill through, I believe, maybe the first, um, the first phase of the bill process, or is it totally passed?

• 57:56Ryan Sean Adams?

  Oh, it's passed the Wyoming Senate Committee on its way to being passed by the Wyoming Senate to, um, essentially recognize DAOs. These are decentralized autonomous organizations, so smart contract systems, property management systems on Ethereum to recognize them and give them a legal status under the Wyoming law structure, legal structure. This is super cool. This is like, um, this is the kind of thing that regulatory regimes, if they really cared about pushing things forward. This is the kind of thing they could do to help accelerate the innovation and the crypto economy. And, um, ultimately it'll be good for any regulatory.

• 58:40Ryan Sean Adams?

  regime that does this and and and any state or country or government that institutes these crypto friendly laws. So I'm pretty bullish on this, David. What's your take?

• 58:50David Hoffman?

  Yeah, the legal recognition of DAOs is something that is pretty sci fi and also nicely harmonious between the legacy nation state and the sci fi versions of social organizations. We don't have to conflict. We don't have to fight. We can cooperate and integrate. And that's what I see happening here. I don't know if Caitlyn Long had anything to do with this, but she is a huge proponent out of the state of Wyoming. If that was anything to do with her, Caitlyn, thank you. Thank you for your work. We appreciate it. Come on the podcast. All this stuff. Yeah.

• 59:21Ryan Sean Adams?

  Absolutely. Yeah, it's she's doing great work in that state. And so are many of the Wyoming lawmakers. David, let's talk about this. This is back to NFT land. A report from somebody who is an MBA Top Shot user talks about.

• 59:36David Hoffman?

  DeFi Ted. Yeah, we like DeFi Ted. I've been engaged with him.

• 59:38Ryan Sean Adams?

  Do you know DeFi? Okay, I don't know DeFi Ted.

• 59:41David Hoffman?

  Yeah, he's in, I believe he's in the bankless nation.

• 59:44Ryan Sean Adams?

  Okay, so a real person here, DeFi Ted, shout out. He is relaying his experience on Medium of being like having his funds frozen on NBA Top Shots. And you can go through the call thread. He provides kind of the history of what it's like $40,000, something like that of funds he could not withdraw from NBA Top Shots, which is interesting because NBA Top Shots in the flow chain definitely talks about itself as a as a layer one, right? But it does not have the same level of decentralization baked into it as as Ethereum does. And I think we want to get some of the folks from NBA Top Shots on Bankless. Actually, we'll do that in the near future to

• 1:00:27Ryan Sean Adams?

  kind of get get get their take on this and get their take on whether flow is an Ethereum killer, the future of NFTs. What makes an NFT an NFT, David? I think is a really important question. How decentralized does it have to be to be an NFT? Do you have any hot takes here?

• 1:00:44David Hoffman?

  Yeah, again, to take this to the extreme, like I can spin up my centralized database and start issuing unique digital assets that trade on that centralized database. And then I can call those things NFTs. That's not what flow is. Flow is a blockchain, but it's not Ethereum. It's not Bitcoin. It's not maximally decentralized. And I think that flow.

• 1:01:04David Hoffman?

  Is committing to a huge loss in potential by not having their tokens settle on Ethereum. Because part of the digital nature of this ecosystem is the reduction of dependencies, the increasing levels of assurances that you, the user, has your asset. And if the Flow blockchain can censor your NFT, is it really an NFT? If it doesn't have maximum, maximally decentralized and trustlessness assurances about the ownership of said asset and the true link between the NFT and the art, then the question of the NFT gets thrown into question. The nature of the NFT gets thrown into question.

• 1:01:42Ryan Sean Adams?

  This is kind of hard because where would you put this, right, is the question, right? So is this, is this a sidechain? Is this similar to like a Coinbase or Binance for NFTs? That's not, that's not how Flow advertises itself. It advertises itself as a layer one chain for NFTs essentially, right? But if you can't withdraw your funds from it, if you have to ask permission, if there's any sort of censorship involved, if there's not a decentralized validator set, then what are you actually dealing with here?

• 1:02:16David Hoffman?

  What are you?

• 1:02:18Ryan Sean Adams?

  Yeah, what are you? So, look, you know, we talked about this a little bit on the AMA with Devin Finster from OpenSea and kind of the, where we came down is basically like, this is going to be up to the market to decide. How decentralized does the market want its NFTs to be? Protocol Sync thesis would say the most valuable NFTs, the most valuable assets, everything will have to be on the most credibly neutral settlement layers. Right now, that is something like Ethereum. But also, these other chains will play a role. Maybe some of them will settle to Ethereum. But from what I hear you saying, David, is you would prefer that Flow was not a layer one chain at all, that it would be some sort of a roll up chain, some sort of a layer two with settlement on Ethereum. So I hear that too.

• 1:03:04David Hoffman?

  Yeah, I think when people make an L1 blockchain, they, I hope they are informed about the magnitude of that decision. If you're an L1 blockchain, you are competing to be money. If you're an L1 blockchain, you are competing to have nation-state level resistance. There is no alternative to that. You have to be self-sovereign and you have to be able to protect yourself from external attack. Because as soon as the flow blockchain has a meaningful level of value to it, it will invite people to come and attack it. And this is the whole point of crypto economic system design, is it needs to be able to withstand attack. And if you're an L1 blockchain, you need to be able to do that.

• 1:03:47David Hoffman?

  Or you can just deploy to Ethereum and outsource all of that energy to Ether the asset and proof of stake. The whole point of Ethereum is to make state-level sovereign-level resistance to any application that exists on top of it. So just go on Ethereum. Plus, you get to tap into the power of DeFi. The whole centralized blockchain, application-specific centralized blockchain thing doesn't make any sense to me.

• 1:04:12Ryan Sean Adams?

  Well, we are gonna have, hopefully, Rome from NBA Top Shots on the program to discuss that very thing. I'm sure he'll have some responses to that, but we will talk about it. It's an interesting conversation, I think, one of the most important ones. David, let's talk about this. We'll just do a quick drive-by here. JP Morgan is launching cryptocurrency exposure basket. But these are just basically Bitcoin proxy stocks. So this is buying MicroStrategy Square, Riot. JP Morgan is putting this into some sort of fund or index where you can purchase this. Look, man, like, why not buy Bitcoin? If you're gonna do this, like, why are you buying proxy equity stocks that might have some relationship to Bitcoin? Why not just, like, buy Bitcoin?

• 1:04:57David Hoffman?

  Yeah, Bitcoin is this once-in-a-lifetime opportunity of value capture and value generation. And so I'm gonna buy infrastructure around it. Like, what? No, just buy the asset.

• 1:05:07Ryan Sean Adams?

  Stocks that own some of it on their balance sheet.

• 1:05:10David Hoffman?

  Yeah, no, just go for the asset. I don't get it. Well, some people want this. It doesn't make any sense to me. They're probably boomers. Whatever.

• 1:05:19Ryan Sean Adams?

  This is for people who want to purchase in a way and they can't custody crypto. It's definitely not for for folks that are on the bankless journey, but good to see JP Morgan, I guess, you know, providing some sort of proxy asset exposure to the class.

• 1:05:33David Hoffman?

  People are gonna want it.

• 1:05:35Ryan Sean Adams?

  Yeah, Logan Paul. We talk about Logan Paul, I guess. Just one, maybe one thing here. So I'm not sure that, okay, so is this the tweet?

• 1:05:45David Hoffman?

  Yeah, that's the tweet.

• 1:05:45Ryan Sean Adams?

  Yeah, SFI, Safran Finance. So this is a DeFi protocol. It's kind of cool. It's a cool DeFi protocol.

• 1:05:52David Hoffman?

  Has legitimate investors and legitimate users.

• 1:05:54Ryan Sean Adams?

  As legitimate investors is is sort of really interesting. But I saw a Logan Paul tweet that said something like, I just bought, or I'm super bullish on SFI, which is Safran's.

• 1:06:06David Hoffman?

  It was right after Coinbase Ventures, the venture arm of Coinbase, announced that they had invested in it. And Logan Paul was like, look, Coinbase is investing in SFI, or something like that.

• 1:06:14Ryan Sean Adams?

  Yeah, yeah. So I saw this and I was like, what, what Logan Paul, like, what's going on? Is this like a Cuban case?

• 1:06:19David Hoffman?

  How did he jump all the way to SFI? That's extremely niche.

• 1:06:22Ryan Sean Adams?

  Right. Well, like, but, but we brought on Mark Cuban and it turns out Mark Cuban had been playing in D5 for months. Like, he was legit. He was crypto native. He knew what he was doing. It turns out that the case with Logan Paul is not this. Turns out that SFI.

• 1:06:36David Hoffman?

  Allegedly.

• 1:06:36Ryan Sean Adams?

  Allegedly. Okay, so, but this is backed by some blockchain data. So also alleged, but also with some possible evidence that possibly someone paid Logan Paul 30K. To tweet that out. Right. Whether or not this is true, David, whether SFI, somebody from SFI, somebody paid Logan Paul to tweet this out, whether or not that's true, I think there's a lesson here for us.

• 1:07:00David Hoffman?

  Right.

• 1:07:01Ryan Sean Adams?

  What do you think that lesson is?

• 1:07:02David Hoffman?

  I think that lesson is that crypto is a dark forest and there are monsters that can eat you every step of the way. And so if you saw that Logan Paul tweet and he's like, oh, my God, Logan Paul's tweeting about SFI, I'm gonna go buy it. Somebody who, if they did allegedly reward Logan Paul for that paid tweet, they got their bags pumped and that was worth it for them. So you gotta be careful. Gotta be careful.

• 1:07:23Ryan Sean Adams?

  You have to be super careful, especially when you see these celebrity tweets. And it's gonna get crazier and crazier in the bull run. David, okay, that's news. Yeah, good practice run. We've issued some takes so far. Let's issue some more takes. This is one from Zero Hedge. I just like the title of this article and the entire article is fantastic. But everything is broken is the title. Is everything broken? By Tyler Durden, "Everything is broken, broken lines, broken strings, broken threads. Everything is broken." He quotes a Bob Dylan song, and then he gets into all of the things that are broken, broken credit. And he talks about the credit market and the debt markets in the US, broken retirement, boomers cannot retire, and God help Gen X and millennials

• 1:08:07Ryan Sean Adams?

  and Zoomers in retirement, a broken stock market that doesn't actually track value, it just is tracks monetary policy, yield curve, price pumps, broken data in the whole system writ large, a broken unemployment system. Institutions are broken, is the summary of this article. David, is everything broken?

• 1:08:29David Hoffman?

  Well, that is, it's pessimistic to say everything is broken, but we are allegedly in a late-stage fiat credit cycle, which means our money isn't working. We have extremely entrenched institutions with wealthy elites not allowing any new institutions to come or those institutions to morph or evolve or adapt. They are staying as the same old institutions because they're funneling value into the elites that own them. Things just seem to be aging and decrepit as social infrastructure. So perhaps everything is broken, breaking or broken or something. Either way, there's a bunch of stuff that just is not working right.

• 1:09:08Ryan Sean Adams?

  You think it's the case that it also depends on, you know, your generation, your stage of life, how you view the world as, as far as whether you see things as broken or not, does that factor in?

• 1:09:21David Hoffman?

  Yeah, yeah. I mean, I think, I think the younger generations, me particularly, would be more inclined to think things are broken because younger millennials and Zoomers are just kind of quote unquote fed up with the system because the system doesn't incorporate them into the world. And so the things aren't working for them, they aren't working for the, for the systems, everything is just misaligned.

• 1:09:42Ryan Sean Adams?

  Well, let's talk about the the next take here, which I think is maybe related to this. And this is, I think I just thought out, I was thinking of is people that get rich off of crypto will just reinvest in crypto. And that's how multi generational sectors are born. When I was thinking of this tweet, David, I was really thinking about Silicon Valley, you know, and it started with Hewlett Packard back in the, you know, 1960s and 70s. That's, that's where Silicon Valley comes from, right? The silicon chips that they created. And then the, those who were successful from these early chip manufacturer investments, then went on to invest in and put capital into the, the microprocessor revolution, the PC revolution, right?

• 1:10:27Ryan Sean Adams?

  And that formed Silicon Valley, who later invested in the infrastructure of the internet, which became all of our social media companies today. So it's like

• 1:10:34David Hoffman?

  The PayPal mafia.

• 1:10:36Ryan Sean Adams?

  PayPal mafia, they created a sector. Well, we're seeing the same thing happen in crypto. There are a lot of people in crypto doing well right now. We've had many cycles of this, right? But if you were in early, you're doing fairly well right now. Some people have even gotten rich off of crypto, shocked as you might be to hear that. And what are they doing with their funds? Well, they're just reinvesting it. They're doing what everybody who's gotten rich on something that they care passionately about does, which is they become venture capitalists. They become investors. They invest in the next generation of this

• 1:11:07David Hoffman?

  Art speculators?

• 1:11:09Ryan Sean Adams?

  Yeah, art, like it's, it's very much like it's similar to how galaxies are formed, right? There, there are multiple generations of stars and you get the first generation that really breeds the, the birthplace for the second generation of stars. And it keeps going, right?

• 1:11:23David Hoffman?

  Resources get recirculated.

• 1:11:25Ryan Sean Adams?

  The resources get recirculated. And by the way, the, the, the materials get richer and richer every time because the materials after a supernova explosion are like, you know, different on the periodic table of, of elements. And that's exactly what's happening in cryptum, which is why I think we're seeing this very rich, organic soil of activity. When crypto people get rich, they are plowing that back into crypto. And that is Is how crypto becomes a multi-generational cycle of of investments. We're just in cycle one, man. This is just like the very first cycle. There's going to be multiple waves of innovation, investment. And I like, I'm already seeing it. All of these new DeFi protocols that are coming up and they're just like,

• 1:12:10Ryan Sean Adams?

  they're being invested in by the people who who did well on the previous cycle. What, what, any thoughts on this?

• 1:12:17David Hoffman?

  Yeah, going back to that Zero Hedge article that we just came from where it says everything is broken. This is how we fix everything. This is the opposite of that. This is why we keep talking about new institutions that are going to fix the old ones. New digital institutions built on Ethereum, built on crypto, that fix all the problems by necessity, right? And I'm not saying that they're these perfect new institutions and they're just a complete upgrade. We're going to adopt these institutions because we don't have any other choice. There aren't any other institutions else else out there that are solving our own problems, right? And so I'm particularly bullish on just like the adoption of these new digital institutions that we are trying to erect on Ethereum. And you're totally right. Like when people make a bunch of money off of an asset,

• 1:13:02David Hoffman?

  they fall in love with that asset. They marry that asset. There's this phrase called like being married to your bags. Perhaps I'm married to Ether. And when people, when crypto makes a bunch of money for people, they're not going to like, oh, well, now I can go back to the legacy world. Like, no, no, they're going to stay in crypto and they're going to help fund and seed it, right? And so I shouted this out.

• 1:13:24Ryan Sean Adams?

  Or buy art from it, right?

• 1:13:25David Hoffman?

  Or buy art from it, which again funds artists, which of funds jobs, which funds families, right? At the end of the day, and this goes back to what I was shouting, yelling about last weekly roll up. Listener, have you done something this week to find a job in crypto? Because if you haven't, why not? Because these new institutions need your help to build them. And if you build them and build them faster, this whole revolution can just be a lot easier. And so, you know, people getting rich off crypto and then recirculating that that value. Oh, this is a really good point that I want to talk about. The reason why all the legacy institutions aren't working.

• 1:14:02David Hoffman?

  It's in my cultural revolution article, I talked, I harped on the boomers saying like the boomers didn't pass down the wealth, but actually wasn't the boomers fault. That was actually an inaccuracy. It's the, it's the wealthy elite, which also happens to be boomers, but specifically the wealthy elite boomers, which are fucking over all the us or other boomers, just like the rest of us. And the reason why our legacy institutions aren't working for us is because the value that they are creating isn't circulating, it got captured. And this is the lesson that we need to learn from that. If we build new institutions on Ethereum or new social organizational structures that produce value for the world, they will be adopted.

• 1:14:38David Hoffman?

  But if they don't recirculate that value, we will just do the same things that we did over again. It's not about new institutions just by themselves. We need new institutions. But we need new institutions that can recirculate the wealth intrinsically, perpetually, so that they don't calcify, so that they don't become rigid and fix and only benefit some of the early adopters that just managed to get rich off this whole ecosystem.

• 1:15:02Ryan Sean Adams?

  Then is a fee burn a problem?

• 1:15:05David Hoffman?

  Could be, could be. Like these problems aren't solved. I believe Ethereum is magical, but it has plenty of problems that are ahead of it. If we want to truly be revolutionary.

• 1:15:15Ryan Sean Adams?

  Yeah. And the interesting thing here is I think that everyone out, many people outside of crypto see this speculative nature as a bad thing. But the speculative nature, like the, the ability to generate wealth in this space is actually what, it's the, it's the heartbeat of this space. It's drawing the crowds into this space is all of the opportunity. And there's definitely something to that. David, this goes off maybe my supernova, like take here, right? So this is, this is ETH expansion from Genesis. I hope they make an NFT of this.

• 1:15:50David Hoffman?

  Sorry, podcast listeners. Go watch the YouTube.

• 1:15:52Ryan Sean Adams?

  Yeah, go watch the YouTube. Look, okay, how would you describe this? This is almost like a big bang, a big event, right? From like, like a very small point and what we're looking at is, I guess the Ethereum network expansion from Genesis looks very much like maybe the, the start of the universe. All right, David, I'm about to play a clip from somebody at the Today Show and some, some anchors who are trying to get their heads wrapped around this NFT revolution that we've talked so much about. This is, um, this is somebody from NBC. On the Today Show, talking about NFTs and describing it to the other anchors.

• 1:16:31Speaker 02

  You own it. Yeah, it's an internet thing, complicated, but.

• 1:16:36Speaker 03

  A non-fungible token.

• 1:16:37Speaker 02

  Guys, non-fungible token.

• 1:16:38Speaker 04

  Savannah has a very important question.

• 1:16:40Speaker 05

  No, my question is, huh? No, but really, what do you do with it? Like, if you have a digital file that you paid 2.5 million dollars of? Yeah, but then what? You can't hang it up?

• 1:16:53Speaker 02

  Yeah, I know. Well, I guess you could say it's kind of like.

• 1:16:55Speaker 05

  And then you show it to your friend.

• 1:16:57Speaker 02

  You know.

• 1:16:57Speaker 05

  You're like, here it is. I have it right here. And they're like, yeah, me too. And it looks the exact same.

• 1:17:02Speaker 03

  But I paid for it. I paid two and a half million for it.

• 1:17:03Speaker 05

  Yeah.

• 1:17:04Speaker 03

  Oh, you're an idiot.

• 1:17:07Speaker 02

  You can resell it. I hope, you guys. A little confusing.

• 1:17:10Speaker 05

  Carrie, we don't want to shoot the mess.

• 1:17:12Speaker 04

  By the way.

• 1:17:13Speaker 05

  That's so crazy.

• 1:17:14Speaker 04

  That was, that was, that was an entertaining end.

• 1:17:17Ryan Sean Adams?

  And it goes on from there. Yeah. Yeah. So you know what this reminded me of is there is, there's this clip of, well, yeah. Is that who, wait.

• 1:17:30David Hoffman?

  Yeah, where they're all trying to figure out what the at sign is. Is the at sign the internet? Is that what the internet is?

• 1:17:35Ryan Sean Adams?

  Tell me, tell me about that. I remember that clip. I was actually thinking of a clip of Bill Gates. And he was on The Tonight Show with David Letterman. And he was trying to describe like the potential of the internet. This is like 1994, 95. And he's describing it to Letterman. And he's like, well, the ability to like, you know, stream music online. You can listen to your favorite songs. And Letterman keeps going like, what, like the radio? Like, I already have that. I don't need that. But what were you talking about?

• 1:18:04David Hoffman?

  Yeah, I was talking about that Katie Couric, Matt Lauer, which is also the Today Show, by the way. So this is the same exact show.

• 1:18:10Ryan Sean Adams?

  History repeats.

• 1:18:11David Hoffman?

  I think it happened in like 1998, somewhere in the 90s, where they're talking about the internet. And so they're asking about like, the at sign, is that what the internet is? Like, where is the internet? Oh, is it the dot com? Is that what the internet is? What's the internet? And they just couldn't wrap their minds around it. So this kind of feels like the reprise to that, which it was pretty hilarious. They're asking good questions. So like, you buy this 2.5 million dollar NFT, and then what? And then, I don't.

• 1:18:36Ryan Sean Adams?

  But they were also answering them too. He's like, "Well, you could resell it." "And you could definitely resell it, right? That shows that there's a market for it." So, um, yeah, super fascinating, but there's definitely echoes of the early internet in people trying to wrap their heads around this NFT thing. I don't think this is going to be the case for like Zoomers or even like younger millennials, right? We're just going, they're just newer generations are just going to natively get this.

• 1:19:01David Hoffman?

  You mean, there's going to be new digital institutions that the younger people are just going to accept because they're different and better? Weird.

• 1:19:06Ryan Sean Adams?

  Weird. That feels like an article. It feels like an article you just wrote. Let's get to our last section, but before we do, we want to tell you about the fantastic sponsors who made this roll up possible.

• 1:19:17David Hoffman?

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• 1:19:57David Hoffman?

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• 1:20:40David Hoffman?

  Monolith is both a one-two punch of an Ethereum smart contract wallet as well as an accompanying Visa Card. That lets you spend the money that you have in your Ethereum wallet wherever Visa is accepted. It's really a fantastic tool that lets you use Ethereum for what it does best, which is holding and managing your financial assets, but also keeps you connected to the rest of the world's payment rails. Monolith also offers on-ramp services for getting your fiat money into the world of DeFi. So it's trivial to top up your Monolith card if ever you need to, and your deposited money goes straight into your non-custodial wallet. So your money is never held by a centralized intermediary, because your Monolith wallet is native to Ethereum.

• 1:21:22David Hoffman?

  Monolith helps you transcend both the legacy and the crypto worlds, because the money that you hold in your Monolith wallet has the power of DeFi behind it. Swapping assets on Uniswap or earning yield in DeFi is at your fingertips. But with Monolith, so are the groceries at your grocery store or the coffee at your coffee shop. Go to monolith.xyz to sign up and get your Monolith Visa card today.

• 1:21:47Ryan Sean Adams?

  All right, David, let's get into what we're excited about. What are you excited about this week?

• 1:21:52David Hoffman?

  Oh, I'm excited about this digital cultural revolution that's upon us. Just no big deal or anything. I wrote this article, came out on the Bankless newsletter on Wednesday, titled "The Digital Cultural Revolution." It's one of the longer articles I've ever written, so I've done you a favor and I've read it for you, so you can go consume that on the Bankless YouTube.

• 1:22:09Ryan Sean Adams?

  Eighteen minutes? Eighteen minutes or so, read?

• 1:22:12David Hoffman?

  Eighteen-minute read, and I think it took me... Reading it out loud is different. It's a little bit slower, so I think it's a 35-minute-long video.

• 1:22:19Ryan Sean Adams?

  Wow, well worth your time though, guys.

• 1:22:21David Hoffman?

  At 2X speed, it's 18 minutes.

• 1:22:22Ryan Sean Adams?

  Yeah, there you go.

• 1:22:23David Hoffman?

  The TLDR is that the social institutions that we've known aren't doing us any favors. And the crypto, the culture found in crypto is unique and offers really like a strong tailwind towards why this industry, I think, is going to be adopted. Crypto culture is fucking awesome, and maybe I'm biased, but it resonates with young people, it resonates with the digitally native, and it also is really hard-hitting for the people that can't really find their place in the normal outside world, the outside world, who are struggling to like find a way to contribute value back to the world, because social institutions are entrenched and they are not passing down wealth

• 1:23:07David Hoffman?

  to the people that need it, the young people. And there's this unfortunate reality that happens when so many people try and find ways to achieve their goals and to and try and find ways to contribute to society and then they don't actually and they those goals end up getting thwarted. When you're, eh eh eh, this is a lesson in psychology. When your goals get thwarted over and over and over again, you stop trying. You end up becoming, you learn to be helpless. And this is a state of learned helplessness. It's bad. We want to avoid that. And we need an environment that allows younger people to achieve their goals. And there's nothing more like rich and fertile than the crypto ecosystem to make a name for yourself and build something up

• 1:23:47David Hoffman?

  and then contribute something valuable, a value, whether it's art for NFTs or community members in DeFi protocols. Or again, $200 million in DAOs available for funding. You can go make a name for yourself and then get convinced DAOs to pay you money. This is how labor works. Um, and so the culture behind crypto, I think, is going to offer very, a very compelling new host, a new landscape for digital, digitally native generations, the Zoomers and the Millennials, to come over and start building stuff.

• 1:24:17Ryan Sean Adams?

  Yeah, you, you wove together, I think, a, a number of different themes in an interesting way in this, in this article. We're talking about the cultural renaissance because you're not just talking about a cultural renaissance, right? And like the, the aging and the, the falling apart of our, and the failings of our institutions. But you're also talking about like this opportunity renaissance, right? Where there's all of this opportunity for young people in institution. And then these new institutions that are forming, they're in the kind of their proto phases and their birth phases that is, are not present. These opportunities are not present with the established institutions. Everything is calcified, is hardened. Um, I think this is why like many young people like choose not to vote.

• 1:24:59Ryan Sean Adams?

  I think that's a mistake. You should vote, but like they choose not to because of this learned helplessness that you're talking about. But this, these new institutions, these crypto institutions, this infinite white space that we've been talking about is, uh, much more malleable and it feels like much more open. It feels Much, much more free. And I think culture is a reflection of, of all of these things. It's a reflection of these new institutions and the new opportunities that come as a, as a result of creating this whole new digital economy. And it seems to me that culture just falls out, falls out of that. But it's, you know, in your, in your article, you're talking about like all of

• 1:25:39Ryan Sean Adams?

  these sort of memes about, you know, how lonely people are and how depressed they feel about their, their certain, their life circumstances. Crypto is the opposite of that, dude.

• 1:25:52David Hoffman?

  It's so opposite.

• 1:25:53Ryan Sean Adams?

  It's so optimistic.

• 1:25:55David Hoffman?

  So optimistic.

• 1:25:55Ryan Sean Adams?

  Right? Like, it's, it's almost optimistic to a fault.

• 1:25:58David Hoffman?

  Right.

• 1:25:58Ryan Sean Adams?

  I feel like, like, if we make mistakes on bankless, it's because we're like overly bullish about things and overly optimistic, or like the timing isn't, isn't correct. But it's very different than I think the, the cloud of helplessness that persists over, over some of the younger generations in our established institutions. So that, that was my takeaway from it. It's like a great article, dude.

• 1:26:24David Hoffman?

  Yeah, thank you. And I, I hope people take that article and run with it because it's supposed to inspire people to, to, you have the opportunity to do something new in a new realm that is asking for people to do something in it. So it's really a call out to people that are interested in helping build out this world because it needs to be built out. I use this line in the, in the article saying, they, there's two people, there's two things that are missing from this world. It's people and structures. And those structures are getting built every single step of the day. Those are the DeFi apps. Those are the NFT infrastructures. Those are all the things that help people do things. But we also need more people. So we need your help to build out the world. We can make the world a better place. Ryan, what are you excited about?

• 1:27:09Ryan Sean Adams?

  Look, I'm just gonna say it. EIP 1559 is what I'm excited about. It's finally approved. It is the third leg of the stool for Ether's value proposition. And look, it's full steam ahead, man. Maybe this summer. We'll see. Sometimes hard forks can get delayed, of course, but possibly this summer Ethereum will have its scarcity engine installed and activated. And I think that anybody who was Doubting or pessimistic about the the value accrual mechanisms of Ether as an asset. Like this just kind of slays that argument because block space demand Ethereum is already the the highest demanded block space network that has been built.

• 1:27:52Ryan Sean Adams?

  It is generating the most revenue from transaction fees. Pouring that into the scarcity of its asset. Look dude, that's going to be just a powerful mechanism, but also, as you said earlier, a powerful narrative. So that's what I'm excited about, man. It's coming.

• 1:28:07David Hoffman?

  So question to you, the most the most bullish thing is to be understood. But when EIP 1559 gets integrated into Ethereum, it doesn't mean that the world automatically understands it. How long are they? How long is it going to take for them to catch up?

• 1:28:20Ryan Sean Adams?

  You know, I think actually price follows narrative in these in these kind of circumstances and narrative follows price, right? So, look, even think about the name EIP 1559, right? Like, what is that? What a terrible, like, what a terrible name for mainstream consumption and the Ethereum community hasn't really come up with something better. So we're like, we're like rallying around EIP 1559. But but when ETH price starts to go up, the outside world mainstream will start to look for explanations as to why. And that's where the feedback loop of narrative to price comes in.

• 1:28:58David Hoffman?

  Ah, it must have been that EIP 1559 thing.

• 1:29:01Ryan Sean Adams?

  Yep, and they'll they'll explain it this cycle and they'll go figure it out this cycle and then it'll start to make sense and we'll even come up with better terms, better memes. It'll no longer be called EIP 1559. Or if it does, it's because geek speak has somehow translated into mainstream speak.

• 1:29:17David Hoffman?

  I think we lose the term EIP 1559. And actually, the bullish case is that we just start to call it Ethereum once it gets integrated.

• 1:29:25Ryan Sean Adams?

  Totally, that could be the case. I've also seen this weird thing where sometimes geek speak actually becomes the mainstream speak. Yeah, like GIFs, right? Was that like, you know, like NFTs?

• 1:29:36David Hoffman?

  Right.

• 1:29:37Ryan Sean Adams?

  It's surprising.

• 1:29:37David Hoffman?

  I do hope NFTs start to become nifty, start to be called nifties. I think that's a better name. Also, huge boon to nifty gateway if that becomes true.

• 1:29:45Ryan Sean Adams?

  Yeah, they're definitely betting on that. We'll see. All right, David, time for the meme of the week.

• 1:29:51David Hoffman?

  Favorite part of the week?

• 1:29:52Ryan Sean Adams?

  The meme of the week. I know, guys, you've been waiting for this all week. This is another bankless week, a bankless meme week. Bankless Instagram is where this was first published. What are we looking at here? Tom and Jerry, did you watch that cartoon as a kid?

• 1:30:05David Hoffman?

  Yeah, I did. Not enough clearly, though, because I had to retrack my memory as to which one's Tom and which one's Jerry. Turns out Jerry, Tom is the cat and Jerry's the mouse, just if anyone else needs that help.

• 1:30:17Ryan Sean Adams?

  Thank you for clarifying. All right, what are we looking at? We're looking at Tom then, who is like this big, bulky, muscular figure as the cat. And he's reaching out to Jerry and Tom is labeled ETH L2s, reaching out to ETH killers. And the caption here is competitors are stuck in a rat race. I think that this is saying that basically L2s are going to, are going to win against these ETH killers. It's kind of, this is kind of a maximalist tweet. I don't know what to say, David.

• 1:30:45David Hoffman?

  Super doober maximalist tweet, but it's okay because I think it's the correct one. The whole point about this is that economic activity on Ethereum, of which there is a ton of, is closer to Ethereum L2s than it is to ETH killers. And so if Ethereum L2s offer the same things that ETH killers do, well, people, the economic activity will just go to the L2s. Because it's closer to Ethereum, it's closer to the Nexus, it's closer to the heartbeat.

• 1:31:11Ryan Sean Adams?

  Now, we should point out that in the, in the actual show, Jerry always ends up winning. So this tweet may have actually backfired.

• 1:31:19David Hoffman?

  We can't talk about that.

• 1:31:20Ryan Sean Adams?

  Okay, all right. Don't read into this tweet too deeply, guys, if you've watched the show. Look. All right, man, that has been meme of the week. This has been another roll up, the second week of March, almost into springtime. Definitely springtime for crypto, really exciting.

• 1:31:37David Hoffman?

  New growth on the plants everywhere, new growth in DeFi assets, new growth all around. Optimism about the future, optimism about digital culture.

• 1:31:45Ryan Sean Adams?

  Look dude, the plants in your office are looking pretty good too. I don't know if you added something recently, but it's definitely flourishing under your care. Well done.

• 1:31:53David Hoffman?

  Thank you, sir.

• 1:31:54Ryan Sean Adams?

  Guys, risks and disclaimers, of course. ETH is risky, crypto is risky, Bitcoin is risky. All of these DeFi protocols are, you could lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the Bankless journey. Thanks a lot.

• 1:32:11David Hoffman?

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

• 1:32:52David Hoffman?

  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.