ROLLUP: Solana Wallet Hack | Nomad Bridge Hack | Ethereum PoW Chain | DeFi Tokens | Coinbase ETH Staking

First Friday of August, 2022 ------ 📣 Forta | Help Make Web3 a Safer Place https://bankless.cc/Forta ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: 🚀 ROCKET POOL | ETH STAKING https://bankless.cc/RocketPool ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum ❎ ACROSS | BRIDGE TO LAYER 2 https://bankless.cc/Across 🦁 BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave 🌴 MAKER DAO | DECENTRALIZED LENDING https://bankless.cc/MakerDAO 🔐 LEDGER | SECURE STAKING https://bankless.cc/Ledger ------ Topics Covered: 0:00 Intro 5:00 MARKETS 7:23 All Time High https://messari.io/screener/bear-market-vibes-C66F0A22 9:30 Mainstream ETH https://twitter.com/TheStalwart/status/1554061312443006976 11:15 Bullish on the Merge https://twitter.com/data_always/status/1554521769591144448 15:20 Ethereum ESG https://twitter.com/Data_Always/thread/1554560847585886210 17:02 ENS Boom https://twitter.com/ensdomains/status/1554099225352290304 20:20 Opensea.eth https://twitter.com/degentraland/status/1554592812674449410 22:00 NEWS 24:00 $200m Nomad Bridge Hack https://www.coindesk.com/tech/2022/08/02/nomad-bridge-drained-of-nearly-200-million-in-exploit/ 31:55 Returning Funds https://www.theblock.co/post/161175/nomad-hack-ethical-hackers-return-9-million-to-exploited-crypto-bridge-platform 33:45 Are All Bridges Vulnerable? https://twitter.com/bkiepuszewski/thread/1554375783577276416 38:45 Bridge Security https://twitter.com/RyanSAdams/status/1483803596055621632 48:35 Solana Wallet Hack https://thedefiant.io/solana-wallet-breach/ 49:30 Explaining the Hack https://twitter.com/milesdeutscher/thread/1554853898497576960 52:20 Plaintext 54:00 David’s Wallet Advice https://twitter.com/trustlessstate/status/1554628479848685572 59:05 Ethereum Proof of Work Chain https://twitter.com/ceterispar1bus/status/1553113853361258505 1:06:00 Other News 1:08:00 Aave Multichain Strategy https://cointelegraph.com/news/aave-devs-propose-freezing-fantom-integration-citing-lack-of-traction-and-potential-vulnerability 1:10:10 SushiSwap Chef Compensation https://thedefiant.io/sushiswap-head-chef-may-pocket-a-third-of-all-tokens-paid-to-staff/ 1:10:40 Optimism Bedrock https://twitter.com/optimismFND/thread/1554528451767451650 1:13:15 Happy Birthday Ethereum! https://twitter.com/BlockGeekDima/status/1553331229285548044 1:13:35 Michael Saylor Steps Down https://twitter.com/tier10k/status/1554558287940669440 1:15:30 NFT News Tiffany CryptoPunks https://twitter.com/tiffanyandco/status/1553742328652877827 Magic Eden Supporting ETH https://twitter.com/MagicEden/status/1554497669032206336 Rainbow Wallet https://twitter.com/rainbowdotme/status/1551978336359890944 StarkNet https://twitter.com/aspectdotco/status/1554119172262490112 1:19:00 Robinhood Fined $30M https://twitter.com/alyssachoo_/thread/1554493577249669123 1:20:08 Commodity Senate Bill https://www.reuters.com/markets/us/senate-bill-would-hand-bitcoin-ether-oversight-commodities-regulator-2022-08-03/ 1:21:00 SEC Charges Forsage https://www.theblock.co/post/160624/sec-charges-forsage-founders-promoters-in-300-million-crypto-ponzi-scheme-lawsuit 1:21:50 Quick News Hits Celsius Leak https://blockworks.co/celsius-admits-customer-emails-leaked-in-third-party-data-breach/ Babel Finance https://www.theblock.co/post/160230/babel-finance-crypto-lost-280-million-proprietary-trading-restructuring Coinbase ETH Staking https://twitter.com/CoinbaseInsto/status/1554186523800526848 Swell Network https://twitter.com/swellnetworkio/status/1552891765237026816 Immutable X Gamestop https://twitter.com/Immutable/status/1552821358773448705 1:23:36 Raises Variant Fund III https://variant.fund/articles/introducing-variant-fund-iii/ Vee Friends a16z https://blog.veefriends.com/veefriends-closes-seed-round-from-a16z-crypto-afa151561051 1:24:15 Jobs https://pallet.xyz/list/bankless/jobs 1:26:00 Questions from the Nation 1:27:30 DCA into a Token https://twitter.com/Madge_80/status/1554862719223963652 1:31:00 Getting a Job in Crypto https://twitter.com/patduds/status/1554876401928454144 1:33:00 TAKES 1:33:30 Authoritarian vs Libertarian https://twitter.com/balajis/status/1552776283968323585 1:35:30 Goalposts Moving https://twitter.com/sassal0x/status/1553750144515842049 1:36:30 Call Out Scammers https://twitter.com/VitalikButerin/status/1554258761727938561 1:39:55 Caring About Decentralization https://twitter.com/RyanSAdams/status/1553488247564767234 1:41:00 Fees-Driven Bulls Market https://twitter.com/TrustlessState/status/1553477269544484864 1:42:12 What David’s Bullish On 1:43:25 What Ryan’s Bullish On 1:46:20 Meme of the Week https://twitter.com/memejority/status/1554493706945720321?s=21&t=tu1DynjBZTppSHroSEfswg ----- Not financial or tax advice. 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.

• 0:00Ryan Sean Adams?

  There's just the bridge risk. People understate the bridge risk. And events like this kind of highlight what a mistake it is to understate the bridge risk.

• 0:11Ryan Sean Adams?

  Bankless Nation, happy first week of August. David, it's Friday morning. What time is it?

• 0:17David Hoffman?

  Oh, Brian, it's the Friday Bankless Weekly Roll-Up Time, where we cover the entire week of news in crypto, which is always an ambitious endeavor, yet we persevere on into the frontier nonetheless.

• 0:29Ryan Sean Adams?

  Into the frontier, that's right. And I gotta remind you, enjoy this roll-up with a cup of coffee. David, you said you got a coffee upgrade earlier this week, and I forgot to ask you about it. So, you know, how's coffee at the apartment in in New York?

• 0:42David Hoffman?

  You know, coffee is a tough thing. I was making my coffee with an Aeropress, which I love.

• 0:47Ryan Sean Adams?

  That is good.

• 0:48David Hoffman?

  But really, it's a little time consuming. It's a little laborious. It's really meant for like camping or just like things when you're in a pinch. So I got a Chemex, which is, you know, definitely like a standard, nothing special.

• 1:01Ryan Sean Adams?

  Is that drip?

• 1:03David Hoffman?

  Yeah, it's a pour-over. Yeah.

• 1:06David Hoffman?

  It's more suited to like the particular ground that I have and the kettle that I have. So definitely got an upgrade, but still lots of work to be done on my coffee setup. So looking forward to that.

• 1:16Ryan Sean Adams?

  I'm glad you're in better shape, and I know it's a continuous improvement. Just Dave's got to remind you, don't let milk in your coffee, or it becomes a beverage. All right, we're not talking about coffee today. We're talking about crypto, and a lot happened as usual. What's the first thing we're gonna cover today?

• 1:31David Hoffman?

  Yeah, it's a bad week for crypto this week. Some exploits, another bridge hack. So reset the clock on that one. Zero days since our last accident. Nomad was hacked for almost $200 million on a smart contract exploit. So we'll go into how that happened, because it's very unique, actually. The hack, first of it's kind of a hack. And so we'll talk about that and kind of what it means for the whole like multi-layer-one thesis.

• 1:56Ryan Sean Adams?

  Speaking of hacks, all right, almost 10,000 Solana wallets were just randomly drained this week as well.

• 2:04David Hoffman?

  Also a unique hack.

• 2:06Ryan Sean Adams?

  That's not supposed to happen. And a lot of the week was spent with people trying Figure out how in the world this happened. So we're going to talk a little bit about that and the the conclusion of what happened with this wallet hack. Pretty alarming. What's the other thing we're going to cover?

• 2:20David Hoffman?

  And lastly, there's just been a bunch of hubbub, a bunch of drama about the ETH POW chain, the ETH proof of work chain. That is probably going to come out of the fork. Once we merge, we're going to leave a proof of work chain behind. And so some people are descending upon that proof of work chain as a selling point. Are you listener about to get some free ETH POW POW ETH?

• 2:43Ryan Sean Adams?

  Please?

• 2:44David Hoffman?

  Yeah, well, personally, I wouldn't get your hopes up. We'll talk about that.

• 2:48Ryan Sean Adams?

  Well, I don't know. I'm a little more bullish on it. So we'll definitely talk about that. And of course, if you like the weekly roll up, you like bankless content. Make sure you like, subscribe, rate and review. If you are listening to this on a podcast channel on Spotify, especially you can now get this in video format. It's always better in video, seeing faces along with the words. David, before we get into it, got to relay a quick message from our friends and sponsors at Forta. Did you know in 2021, that was just last year. Speaking of hacks, we were talking about hacks in the intro, there's $2.3 billion in crypto web three related hacks. And Forta has something to help with this. What is Forta doing, David?

• 3:32David Hoffman?

  Forta is a live smart contract monitoring service. And so what they do is they monitor the mempool. And so, you know, there's plenty of things that you need to do as a smart contract dev, like, you know, go through audits, do formal verification. But there's still plenty of stuff you can also do while your smart contracts are live, you know, in the wild, live in production. And there are types of transactions that can be detected that are incoming that are known to be like malicious. Like they drain treasuries, they hack bridges, you know, they mess with your governance or whatever. And so Forta, there's that like video game that way back when in the 90s, like this meteor game where the meteors were coming in and they would got to shoot them before they hit the earth, right? So like they would zap the incoming meteors.

• 4:15David Hoffman?

  This is what Forta does for incoming malicious transactions. And so you can identify a set of transactions. That if they do this, then you know they're malicious and Forta will zap them before they get into your into your smart contract. And so there's over 36 billion in TVL monitored by Forta's decentralized network, including protocols and applications like DYDX, Compound, Balancer, Maker, Lido, Yuma, not Nomad, not Nomad. Maybe they could have used Forta. Yeah. There's a link in the show notes if you are interested in learning more about getting a smart contract exploit zapper on your squad.

• 4:51Ryan Sean Adams?

  One thing I know is you don't want to find out that your smart contract has been hacked on Twitter. You want to receive some alert and have a defense system set up. So Forta monitoring is there for that.

• 5:02David Hoffman?

  And of course, Forta, thank you for sponsoring this message. Ryan, shall we get into markets?

• 5:07Ryan Sean Adams?

  Yeah, let's do it. What's Bitcoin showing us this week? I'm gonna show some charts.

• 5:10David Hoffman?

  Yeah, got some new charts on the screen. Bitcoin, we are down a whopping 0.9%, which I would consider flat. I would consider that flat on the week. Started the week at $23,100, ending the week at $22,900, flat on the week.

• 5:26Ryan Sean Adams?

  Just flat on the week. Okay. Neither up nor down, just tepid, just flat. How about ETH, same thing?

• 5:31David Hoffman?

  Yeah, start of the week at 1640, ending the week at 1620, down 1.5%. Again, I would just consider that flat. That was a flat week.

• 5:41Ryan Sean Adams?

  All right, David, how about the ETH Bitcoin ratio? What's that looking like on the week?

• 5:45David Hoffman?

  Yeah, super flat on the week, down half of a percent at .0707. So, nothing.

• 5:52Ryan Sean Adams?

  Nothing. Markets still deciding Bitcoin or ETH.

• 5:55David Hoffman?

  Bitcoin, ETH, blue chips are flat. Tokens, Ryan, up bigly. We'll talk about that later in the show, but tokens are on the move.

• 6:02Ryan Sean Adams?

  Tokens like DeFi tokens?

• 6:03David Hoffman?

  DeFi tokens, yeah.

• 6:04Ryan Sean Adams?

  They're on the move?

• 6:05David Hoffman?

  Yeah, they're on the move. We will cover that in what I am bullish on at the very end of this podcast.

• 6:10Ryan Sean Adams?

  Bring our DPI chart back?

• 6:11David Hoffman?

  Oh, God, I'm not toast. I'm not ready for that.

• 6:15Ryan Sean Adams?

  Not, not quite that bullish.

• 6:16David Hoffman?

  Tokens, please.

• 6:18Ryan Sean Adams?

  How about global cryptocurrency market cap? Are we at a trillion yet?

• 6:23David Hoffman?

  Yeah, we've been at a trillion for a while. We ended last week at 1.14 trillion. We are at 1.11 trillion. So down $30 billion again. If it's less than one Terra of downwards, that's flat.

• 6:37Ryan Sean Adams?

  Less than one Terra. Wow. Too soon, David. Gas markets.

• 6:43David Hoffman?

  Gas markets.

• 6:43Ryan Sean Adams?

  Gas markets in real life kind of suck, price at the pump. But price at the Ethereum pump, still kind of good. Is this nine Gua this week?

• 6:51David Hoffman?

  Yeah.

• 6:51Ryan Sean Adams?

  It's low as nine Gua?

• 6:53David Hoffman?

  Yeah, you can scroll down to get that chart a little bit. Yeah, so last week it was keep going down. God, every single time you miss this. There we go. Okay, green, green chart, green chart and green. Top right. Yeah, so the average, well, we'll start here. The average total transaction gas distribution, the peak, was at nine Gua this week. Down one Gua from last week. Seven, Ryan, is the number we got to beat to be deflationary in the merge. And we are at nine.

• 7:18Ryan Sean Adams?

  That's too close for comfort. All right. That would be so disappointing. But let's take a look at Bitcoin and ETH from all time high perspective. Bitcoin, down 65% from all time high this week. ETH, down 64%. And the difference between ETH and Bitcoin from their respective bottoms is ETH is up 76% from its bottom and Bitcoin is only up 26%. So ETH took a harder crash, harder dip than Bitcoin, but it has recovered much faster. And now it's kind of neck and neck on the percent down from all time high. What do you make of this?

• 7:58David Hoffman?

  Yeah, I mean, this is definitely the merge trade. Like, it's very infrequently that I feel like we can confidently say what is making the market do the things that it's doing. But right now I have some of the most confidence I've ever had that this is the merge trade. This is what this is. This, yeah.

• 8:12Ryan Sean Adams?

  Yeah, absolutely.

• 8:13David Hoffman?

  Merge is bullish.

• 8:14Ryan Sean Adams?

  Let's look at the other percentage tokens down from all time high. So besides Bitcoin and ETH, how about Binance Chain? What's that looking like?

• 8:23David Hoffman?

  Yeah, Binance Chain, BNB always does very, very well. And honestly, one of the reasons is because it's one of the few tokens that actually has cash flows embedded in it. Like, it's kind of got this like manual EIP 1559 buyback and burn, because that's what Binance does with its revenues. It buys BNB and burn it.

• 8:39Ryan Sean Adams?

  It's a massive exchange, which is a cash cow in bull markets and bear markets. It's still a cash cow and it's still sort of backing the Binance Chain.

• 8:46David Hoffman?

  Always has been.

• 8:47Ryan Sean Adams?

  Or sorry, BNB Chain.

• 8:48David Hoffman?

  BNB Chain, yeah. So it's down 56% compared to Bitcoin and Ether is down 66%. So definitely better than those two. XRP down 88%. Cardano down 83%. Solana down 85%. PoWédot down 85%. Dogecoin down 91%. Polygon down 69%. Nice. Avalanche down 84%. Uniswap only down 28%. Wow, uni only down 28%. That's pretty good.

• 9:14Ryan Sean Adams?

  That's pretty good. I gotta admit, David, I look at the chart and I see a little bit like nature's healing. I mean, this makes more sense to me than the bull market. This makes complete sense to me, but like, it's still more reasonable than things in the bull market. Let's talk a little bit more about the bullish ETH narrative. It's kind of going mainstream. You know Joe Weisenthal, right, from Bloomberg?

• 9:39David Hoffman?

  Big time. Yeah, yeah.

• 9:40Ryan Sean Adams?

  He has a podcast I listen to occasionally, also has a newsletter. And in his newsletter this week, Joe Weisenthal, who's never really been an ETH bull at any point in time, any of my reading of his, he just wrote why ETH is taking over the narrative and why Bitcoin's narrative is busted. And yeah, I think this is starting to escape into mainstream is probably the takeaway here, that ETH like surpassing Bitcoin on the narrative front is a real thing that's happening right now.

• 10:14David Hoffman?

  Yeah, and there's two reasons for this. I think if you're inside of the crypto industry, you are bullish ETH, if you are bullish ETH over Bitcoin, then it's because of Ether being deflationary post-merge. But if you're outside of the crypto industry, you think that Ethereum is going to be in a better place than Bitcoin because of the ESG, like green energy narrative. So like, it's kind of pick your reason, but we got two of them as to why people are trending in favor of ETH lately. Ryan, really quickly, I just talked about how Uniswap was only down like 28%, 29%. That didn't feel right. It's actually down 70, it's down 80%. I just checked on it.

• 10:50Ryan Sean Adams?

  Yeah, that was weird.

• 10:50David Hoffman?

  Yeah, it's actually down 80%.

• 10:52Ryan Sean Adams?

  The Missouri chart, is that wrong?

• 10:54David Hoffman?

  I don't know where that came from.

• 10:55Ryan Sean Adams?

  Yeah. Thanks for that correction. Yeah, but to your point, and the two reasons to be bullish, when you're inside of the space, you're kind of bullish because of the structural sell pressure that just decreases in a post-merge.

• 11:08David Hoffman?

  In my mind, the correct reason for being bullish?

• 11:12Ryan Sean Adams?

  I think so. I mean, like, the narrative, I mean, the narrative side, we knew proof of stake, we knew proof of work was going away, and Ethereum was becoming ESG, it's like, kind of forever. But I think this is less well-known, but this has a greater, more immediate impact. What is the chart that we're looking at on the change in theoretical annual structural sell pressure with the massive issuance reduction? All the proof of work issuance, it's like 4.1%, something like this, it goes away completely the day of the merge. What are we looking at in this chart?

• 11:43David Hoffman?

  Yeah, so we are looking at a bar chart that's titled "Reduction in Theoretical Annual Structural Sell Pressure." And what that means is that some chains, some bigger chains, have gone through changes in monetary policy throughout their history. Ether, Ether used to be issued five Ether per block at Genesis, that got reduced down to three in 2017, and then it got reduced down to two in 2019, to where it is now. Other blockchains have also done similar things, like the Bitcoin halving, famously. There was a 2016 Bitcoin halving, a 2020 Bitcoin halving. And the sizes of these bars are a function of how much sell pressure is getting reduced. So when Bitcoin goes through a halving, you take

• 12:24David Hoffman?

  How much Bitcoin would have been issued in a year, multiply that by the USD price, and then take away like how much is not being issued as a result of the halving. And so the 2020 Bitcoin halving reduced $3 billion in theoretical annual sell pressure that got reduced from the halving. The Ether reduction from 3 ETH to 2 ETH in the proof of work mining reward in 2019 removed 500 million in yearly annual sell pressure. But reminder, that's when Ether was like $100 or $200. And so if you multiply that by 10 or 20 to get where we are now, that would control for that. On the very far left, we have two upcoming changes. We have the Bitcoin halving in 2024,

• 13:09David Hoffman?

  which if you, again, multiply the amount of Bitcoin being issued versus its current price, where it is now at $23,000, Bitcoin will receive almost a $4 billion reduction in annual sell pressure. This is why Bitcoiners like love the halving, right? We reduce sell pressure. This is why the halving celebrated like scarcity coming in.

• 13:28Ryan Sean Adams?

  And it's scheduled every four years. You know it's coming.

• 13:31David Hoffman?

  Right. And then in the ETH merge, the ETH merge, which is upcoming very, very quickly, is going to be a theoretical reduction in $7.5 billion of annual sell pressure. And so almost double the annual reduction in annual sell pressure from ETH to Bitcoin, which is also saying something when it's double a reduction in US dollar sell pressure. But the difference in market cap between Bitcoin and Ethereum is about 2.5X. So the Bitcoin market cap is 440 billion. The Ethereum market cap is 195 billion, call it 200. And so the Bitcoin market cap is 2.5 times larger than Ethereum's,

• 14:12David Hoffman?

  but the Ethereum US dollar sell pressure reduction is twice as big as Bitcoin's. And so this is why, like, this is so incredibly bullish. It's such an outsized reduction in sell pressure versus this much smaller Ethereum market cap.

• 14:27Ryan Sean Adams?

  Yeah, another way to say this too is in a post-merge world, Ethereum's going to have to find, in order to stay flat, in order for prices not to explode upwards, Ethereum's going to have to find $7.5 billion in new sellers.

• 14:43David Hoffman?

  Right.

• 14:44Ryan Sean Adams?

  And if it doesn't find those new sellers...

• 14:46David Hoffman?

  Won't be finding it here, Ryan.

• 14:48Ryan Sean Adams?

  If it doesn't find those new sellers, has no choice but to go up.

• 14:51David Hoffman?

  Has no choice but to go up.

• 14:53Ryan Sean Adams?

  That's why the economics of the merge are so interesting and so attractive. And I think why the market is starting maybe to price this in, though I don't think they've fully priced it in. You know, of course, we'll see what happens.

• 15:05David Hoffman?

  The merge is literally like checkmate sellers.

• 15:06Ryan Sean Adams?

  I just don't, why would you sell? There's like, there's two times you could, you can, you know, buy or sell ETH, right? One is before the merge and the other is after, right? And I'm definitely a buyer before the merge. I think it's a historic opportunity. Anyway, not financial advice. Okay, but the second reason, the reason maybe mainstream thinks this is interesting as well, is the whole ESG narrative. So this is the energy reduction narrative when Ethereum transitions to proof of stake and gets rid of all of the energy inefficient mining that happens. What tweet are we looking at here, David?

• 15:41David Hoffman?

  Yeah, so we're looking at just a chart of Google searches for ESG over time. And it's like a hockey, it's on the beginnings of a hockey stage, a hockey stick, it looks like. Popularity of Google searches for ESG over time. I don't really know what this X axis is, maybe it's arbitrary. But we are roughly three times higher than we were in 2020, if that is any sort of indication. So we're extrapolating here and saying just like ESG as a concept, which is just like in sustainable investing, both in ecological standpoint, but also like a political and governance standpoint. And so implying that ESG is in vogue. And so a reduction in energy usage by a bleeding blockchain will be very, a very popular

• 16:25David Hoffman?

  move with people because, because ESG is in vogue. Now, personally, I don't really enjoy the ESG. I think it's just adding a political element to investing, but that is just a political take, I guess. Like, I think, I think there's better ways to optimize for investments, but it's what the pop, it's what the people want and the people want things that are green. And that's what Ethereum is doing when it goes to the merge.

• 16:49Ryan Sean Adams?

  You definitely have to track it as a narrative and the bottom line here, as the tweet said, is Bitcoin has decided to ignore the ESG issue entirely, whereas Ethereum is unlatching itself from proof of work. And that's the narrative going forward. And I think people are buying into that narrative as well. David, people are also buying into ENS. We just got the July 2022 stats and ENS is an NFT that just is doing very well in this bear market. What are we looking at for the high level stats here?

• 17:17David Hoffman?

  Yeah, let's go through some of the numbers. 370,000 new dot ETH registrations, bringing the new total to 1.86 million ENS names that have been minted. That's $6.8 million in protocol revenue going to the DAO. That's 5,400 ETH in revenue with 48,000 new ETH accounts, new Ethereum addresses that have at least one ENS name in it. And greater, and I never have understood this last metric, greater than 99% of OpenSea domain volume. Does that mean ENS is dominating OpenSea volume by 99%?

• 17:51Ryan Sean Adams?

  Just domains. There are other domains besides dot ETHs and ENS. There are dot cryptos, there are all sorts of other dot names.

• 17:57David Hoffman?

  So it's market share, like ENS owns that. Well, that makes sense. Yeah, like the domain space is like a monopoly game. So that makes sense. ENS definitely has won that game.

• 18:05Ryan Sean Adams?

  It's kind of feeling like it's the dot com, right?

• 18:08David Hoffman?

  Yes, yes.

• 18:10Ryan Sean Adams?

  Yeah, this is, this is really interesting. And all of that protocol revenue goes to the DAO?

• 18:15David Hoffman?

  Yeah.

• 18:15Ryan Sean Adams?

  6.8 million protocol revenue? That was 6.8 million for the month, just one month?

• 18:20David Hoffman?

  For the month, yeah.

• 18:21Ryan Sean Adams?

  What?

• 18:22David Hoffman?

  Yeah.

• 18:22Ryan Sean Adams?

  That's a cash cow.

• 18:23David Hoffman?

  Right. And like, I can't imagine the DAO has all that many expenses.

• 18:27Ryan Sean Adams?

  Okay, what is the, what is the token price of ENS?

• 18:32David Hoffman?

  That's a good question.

• 18:34Ryan Sean Adams?

  How's that doing? Remember the ENS token, you got some airdrop?

• 18:37David Hoffman?

  Yeah, which I couldn't claim because my Argent wallet lost my private keys, my Argent wallet.

• 18:42Ryan Sean Adams?

  It's, it's off the bottoms here.

• 18:44David Hoffman?

  Yeah, it's off the bottoms, for sure.

• 18:45Ryan Sean Adams?

  It's still climbing.

• 18:46David Hoffman?

  Yeah.

• 18:46Ryan Sean Adams?

  Bottom around nine.

• 18:47David Hoffman?

  The ENS is a good buy. It's a good buy.

• 18:50Ryan Sean Adams?

  Double from the bottom.

• 18:51David Hoffman?

  Yeah. But I mean, if you put, if you go to crypto fees.info, just talking about the DAPs. Uniswap, $1.5 million in revenue in one day. Ave, $0.6 million of revenue in one day. GMX, which is an app that's spitting out ETH to its token holders, .2 million. Sushi Swap, 1.16 million. ENS coming in, in one, two, three, four. Coming in fifth at $1.15 million per day, $150,000 per day in revenue.

• 19:22Ryan Sean Adams?

  Still three times more than Solana.

• 19:26David Hoffman?

  It's not a fair comparison because Solana is like explicitly like, we won't collect any fees. We will not have economic sustainability and that's how we'll just like onboard everyone by collecting zero money.

• 19:37Ryan Sean Adams?

  Yes, but I think it's more of a fair comparison than people actually think.

• 19:43David Hoffman?

  We actually should think this, yes.

• 19:45Ryan Sean Adams?

  We actually get into this conversation with, I was gonna say Polenya.

• 19:50David Hoffman?

  Polenya. Polenya, Polenya.

• 19:52Ryan Sean Adams?

  Yeah, so David and I did an Anon interview with Polenya last week. We talked a lot about.

• 19:58David Hoffman?

  Previously known as, the Anon previously known as Polenya. It turns out we have not been pronouncing that name correctly at all.

• 20:03Ryan Sean Adams?

  Anyway, it's, it's not coming out this Monday, but the next Monday, we talk all about alternative layer ones versus Ethereum and layer twos and where the value accrual is going to lie. And anyway, don't miss that episode is all I'm saying. We get into this discussion around fees and how it impacts valuation. David, what else we got here?

• 20:24David Hoffman?

  Speaking of ENS names, OpenSea bought OpenSea.ETH for $165,000. Yeah, so a nice payday for whoever minted OpenSea.ETH. Congratulations. Oh, that's basically 100 ETH. Well done.

• 20:38Ryan Sean Adams?

  I'm glad we got Bankless.ETH back in the day, David.

• 20:40David Hoffman?

  Yeah.

• 20:41Ryan Sean Adams?

  Before this.

• 20:42David Hoffman?

  Could you imagine how much we'd be gouged if we hadn't gotten Bankless. ETH?

• 20:46Ryan Sean Adams?

  It'd be so sad. I don't know if I'd do it.

• 20:47David Hoffman?

  What did we pay for that? We paid like $2,000 for that? Like, good buy.

• 20:50Ryan Sean Adams?

  We paid ETH for it. So you have to translate that into ETH terms. Maybe, maybe it's worse than that. Who knows? But ETH is down. I don't know.

• 20:58David Hoffman?

  No, we're probably okay. I'm gonna go, I'm gonna go, what, I'm gonna go find this out right now. Ryan, we bought Bankless. ETH, August 2nd, 2020 for 5.15 ETH. That's, that's more than $2,000. Sad.

• 21:12Ryan Sean Adams?

  That's, that's very steep. What is that? Right now, yeah, that's like $8,000. 5.15, you said? Yeah, 5.15. Yeah, you know, under 10,000. 8,250, yeah. I mean, it's still over the long term. Yeah, over the long run. I mean, we would have paid, we would have had to pay a lot more for it now. An egregious amount. And by the way, we caught this when somebody let it expire. So somebody had purchased it and they let it expire. We came in and sniped it in the bid process. Wait, how did we? If it expired, why did we pay 5.15 ETH? Because there was like this, there was like this bid process that they had in place with some expired domains where it started very steep. And then over the next 30 days, like it descended in price. But anyone could buy it?

• 21:57Ryan Sean Adams?

  Anyone could buy it, but like we bought it right away. Oh, yeah, yeah. So we bought it kind of at the top of that because not taking the risk. Anyway, guys, coming up next, we're going to talk more about the hack season that seems to be happening. It's sort of a bad week for hacks across crypto, especially if you're using the bridges to some of these other ecosystems, a $200 million hack. And then this Solana private key hack, going to talk about that. And then also, David, you're going to tell us whether proof of work ETH, a fork of Ethereum, if that's a real thing or fake news. And I'm still hoping for my ETH forked tokens that I could sell for more ETH. Don't hold your breath. We'll see. Guys, we'll be right back, but before we do, we want to thank the sponsors that made this episode possible.

• 22:41David Hoffman?

  Maker Dow is the OG DeFi protocol, the first DeFi protocol to ever exist, even before we called it DeFi. Maker Dow produces DAI, the industry's most battle-tested and resilient stablecoin. Using Maker, you don't need to sell your collateral if you need liquidity. Instead, you can spin up a Maker Vault and use your collateral to mint DAI directly. With Maker, the power to mint new money is in your hands. And there's something new in the Maker Dow ecosystem. Every time a new Maker Vault is opened, the owner can claim a PoW, which contributes funds to One Tree Planted, an organization with ongoing global reforestation efforts, creating a world where digital participation and the health of our environment can live side by side. Soon, Maker will be present on all chains and Layer 2s, bringing the biggest and best DeFi credit facility to everywhere there is DeFi.

• 23:23David Hoffman?

  Today, you can mint DAI on oasis.app, DeFi Saver, or other DeFi protocols that you use. So follow Maker on Twitter, at Maker Dow, and learn from the oldest and most resilient Dow in existence. Rocketpool is your friendly decentralized Ethereum staking protocol. You can stake your ETH with Rocketpool and get our ETH in return, allowing you to stake your ETH and use it in DeFi at the same time. You can get 4% on your ETH by staking it with Rocketpool, but you can get even more by running a node. Rocketpool is the only staking provider that allows anyone to permissionlessly join their network of validating nodes. Running a Rocketpool node is easier to set up than running a solo node, and you only need 16 ETH to get started. Why would you do this? You get an extra 15% staking commission on the pooled ETH, so your APY is boosted. So if you're bullish ETH staking, you can increase your APY and get some extra tokens

• 24:08David Hoffman?

  by adding your node to the decentralized Rocketpool network, which currently has over 1,000 independent validators. It's yield farming, but with Ethereum nodes. You can get started at rocketpool.net and also join the Rocketpool community in their Discord. You can find me hanging out there sometimes in the chat, so I'll see you there.

• 24:22Ryan Sean Adams?

  All right, guys, we are back with another big bridge hack. This time, a bridge called Nomad was drained of nearly $200 million in an exploit. This was a code-type exploit, so a technical exploit. David, you want to tell us what happened?

• 24:36David Hoffman?

  Yeah, so Cross Train Bridge, Nomad, it goes to a number of different ecosystems: Avalanche, Ethereum, EV... EV MOS? EV MOS?

• 24:44Ryan Sean Adams?

  Cosmos chain with EVM.

• 24:46David Hoffman?

  Right. Milk Omida and Moonbeam. And so, like you said, it was a smart contract exploit as opposed to like an economic or oracle attack. We lost almost $200 million. And the person that really unpacked this the best is Sam C. Sun, who put a thread together. And so we'll go ahead and read out the thread because it's not too long. So Sam says, "Nomad just got drained for over $150 million in one of the most chaotic hacks that Web3 has ever seen. How did this happen exactly and what was the root cause? Allow me to take you behind the scenes." Please do, Sam. And so he says, "It all started when a Twitter... a Telegram account shared another Telegram's accounts... or Twitter account's tweet in an Ethereum security Telegram channel. Although I had no idea what was going on at the time,

• 25:30David Hoffman?

  the sheer volume of assets leaving the bridge was clearly a bad sign." And he shows a tweet of 100 WBTC leaving the Nomad Bridge, like transaction after transaction after transaction. So 100 WBTC, 100 WBTC. Somebody says Nomad Bridge getting rugged looks very, very sus. Sam says, "My first thought was that there was some misconfiguration for the token's decimals. After all, it seemed that the bridge was running a send .01 WBTC, get 100 WBTC back promotion." And then here he's showing a tweet where somebody was sending in literally .01 BTC, but hundreds of WBTC were going out. That's a bad promotion to run. That's a bad promotion, yeah. Sam says, "However, after some painful manual digging on the Moonbeam network,

• 26:12David Hoffman?

  I confirmed that while the Moonbeam transaction did bridge out .01 BTC, somehow the Ethereum transaction bridged in WBTC. Further, the transaction bridge in the WBTC didn't actually prove anything. It's simply called process, like a function process directly. Suffice to say, being able to process a message without proving it first is extremely not good." And so what they mean is by proving it is that there's a thing called a prover. Maybe this is what we're talking about. But basically, like, anybody can send a message to a bridge, but the message needs to be correct. And that's part of the functionality of the bridge. At this point, there were two possibilities. Either the proof had been submitted separately in an earlier block, or there was something extremely wrong in the replica contract.

• 26:58David Hoffman?

  However, there was absolutely no indication that anything had been proven recently. Again, this is like terminology about how contracts need to be receiving messages that are correct, to whatever degree that the smart contract in that bridge deemed something correct. It's kind of up to how the bridge is constructed. But a correct message would be something that is coming from one chain to another, and a proof is generated that is correct or so. Sam continues and says, "There's only one possibility left. There was a fatal flaw in the replica contract. But how? A quick look suggests that the message emitted must belong to an acceptable route. Otherwise, the check on line 185 would fail."

• 27:38David Hoffman?

  Fortunately, there is an easy way to sandwich to check this assumption. I knew that the root of the message, which had not been proven, would be 0x00, because message brackets underscore message hash bracket would be uninitialized. All I had to do was check whether the contract would accept that as a root. And then the next one is, oops. That's the only thing the tweet says. It says, oops. And basically, Sam just put in 0x000000 as an address, and it comes back true, meaning that every single thing will come back true, meaning that like, the bridge is like an open vault. Everything is true. The contract returns everything true.

• 28:14Ryan Sean Adams?

  So that means anyone could go call that function and pull funds out?

• 28:18David Hoffman?

  More or less, yeah.

• 28:19Ryan Sean Adams?

  Of the bridge?

• 28:20David Hoffman?

  Yeah. And so Sam says, "It turns out during a routine upgrade that the Nomad team initialized the trusted root to be 0x000. To be clear, using zero values as an initialization values is a common practice. Unfortunately, in this case, it had the tiny side effect of auto-proving every message."

• 28:37Ryan Sean Adams?

  Oh my god.

• 28:38David Hoffman?

  So every message, every possible message was approved. As in like, "Hey, can you send me 100 WPTC?" Approved, approved. And so Sam says and finishes, "This is why the hack was so chaotic. You didn't need to know about solidity or Merkle trees or anything like that. All you had to do was find a transaction that worked, find and replace the other person's address with yours, and then rebroadcast it." So not every single transaction works, you have to have a certain hash. But it's just, you need to find a transaction that starts with 0x00, and you can go find that by going to a previous bridge transaction, and then copying that transaction and just replacing it with your outbound address, and then sending that. And so TLDR, "A routine upgrade marked the zero hash as a valid root,

• 29:20David Hoffman?

  which had the effect of allowing messages to be spoofed on Nomad. Attackers abused this to copy and paste transactions, and quickly drained the bridge and it frenzied free-for-all." So, once one person realized it, everyone realized it, that the gates to the vault were open. There was an open vault, and all the money was just like sitting there. Somebody realized it, and then as soon as one person realized it, everyone realized it.

• 29:42Ryan Sean Adams?

  That's the analogy, right? So this Nomad bridge had code that essentially vaulted off massive amounts of money, hundreds of millions of dollars in value here. So like, close to $200 million. And then they... Issued a update to this vault and the door swung wide open and they didn't even realize it. And then, you know,

• 30:07David Hoffman?

  No one realized it for 43 days. So this vault has been open for 43 days in a row.

• 30:11Ryan Sean Adams?

  Wow.

• 30:11David Hoffman?

  Only, only like two days, two or three days ago that somebody was like, hey, there's money there.

• 30:16Ryan Sean Adams?

  There's money there.

• 30:17David Hoffman?

  No one's stopping me from going and getting it.

• 30:19Ryan Sean Adams?

  And so they went and the first couple of people grabbed the money.

• 30:22David Hoffman?

  Yeah.

• 30:23Ryan Sean Adams?

  And then an entire crowd assembled to go pick up the money from the vault and like, you know, stuff it under their trench coats and run home with it.

• 30:30David Hoffman?

  Yep.

• 30:31Ryan Sean Adams?

  Wow. Are these white hats, David?

• 30:34David Hoffman?

  Yeah. So, I mean, so not everyone who's doing this is evil, of course. There are a number of people that just went and grabbed the money because if they didn't grab the money, then somebody malicious would grab the money. So like, if you're a person saying, well, that money's free, everyone's taking it. I'll be a good person and I'll take the money and I'll return it.

• 30:50Ryan Sean Adams?

  Before someone else does?

• 30:51David Hoffman?

  Before some, an evil doer does it. And so like, it's kind of like, a little bit like game theory. If you know that you are going to return the money, then you can safely go get the money and return it to the people later. So there's somebody who made a transaction to go get this money and knew what they were doing. They, they write in the message field in their transaction saying, I'm returning this money. FBI, please calm down. No, I didn't plan to steal it. And yes, I know this address is ghosted.

• 31:15Ryan Sean Adams?

  That's amazing. Just leaving a message for the FBI.

• 31:18David Hoffman?

  My hands are up. My hands are up. Like, don't shoot. Don't shoot.

• 31:22David Hoffman?

  That was a super funny tweet where somebody says, accidentally exploited the Nomad Bridge for $17,000. We'll return the funds ASAP.

• 31:31Ryan Sean Adams?

  Did you see this clip of like the monkeys?

• 31:33David Hoffman?

  Yeah. So, so this is a tweet from Haskah Trade saying, the Nomad hack explained. And here's just like a plastic bin of a bunch of bread. And then there's like 100 monkeys coming in there, all grabbing the bread out of the basket.

• 31:46Ryan Sean Adams?

  I mean, this is, uh, this is kind of, you know, of the 190 million dollars, apparently nine million has been returned. So there's $9 million worth of, of white hacks that are actually doing the right thing and returning these funds. But that's quite a gap, man. That's like 180 million that has not been returned.

• 32:05David Hoffman?

  And what's that? 5%, was captured by white hackers?

• 32:09Ryan Sean Adams?

  Yes. So

• 32:10David Hoffman?

  It's not zero.

• 32:11Ryan Sean Adams?

  I mean, the big question is, do you remember the wormhole hack that happens? Man, it feels like another lifetime ago, but honestly, it wasn't that long ago. But that got a bailout from Jump Capital. The question is-

• 32:22David Hoffman?

  Wasn't that a billion dollar bailout?

• 32:24Ryan Sean Adams?

  Yes, something like that. It was a lot of money. I can't remember. I don't know if it was quite a billion, but I don't know if the deep pockets are coming to rescue the bridge this time.

• 32:34David Hoffman?

  Right.

• 32:35Ryan Sean Adams?

  What do you think?

• 32:35David Hoffman?

  Right. Well, there's also a lot less money in the ecosystem now. $320 million is what it was.

• 32:41Ryan Sean Adams?

  320 million?

• 32:42David Hoffman?

  Yeah.

• 32:42Ryan Sean Adams?

  So this is a pretty big one.

• 32:45David Hoffman?

  Plenty of people have hundreds of millions of dollars in the top of the market. Fewer people have hundreds of million dollars in this current state of the market.

• 32:52Ryan Sean Adams?

  I mean, I think Nomad has recently been funded as well by VCs.

• 32:56David Hoffman?

  Yeah, but not for 190 million. They raised like 22 million.

• 33:00Ryan Sean Adams?

  Not even close, not even close. So what are you gonna do?

• 33:02David Hoffman?

  And that's their operating money. They have to pay employees with that.

• 33:05Ryan Sean Adams?

  What's also interesting is this was a bridge to many kind of the like alternative layer one ecosystems. So as you said, Avalanche, the Cosmos.

• 33:15Ryan Sean Adams?

  Milcomida?

• 33:16David Hoffman?

  Milcomida?

• 33:17Ryan Sean Adams?

  Milcomida is.

• 33:19David Hoffman?

  That's Cardano.

• 33:19Ryan Sean Adams?

  It's Cardano. And what's Moonbeam? You know what Moonbeam is?

• 33:23David Hoffman?

  Moonbeam? I don't know what Moonbeam is.

• 33:25Ryan Sean Adams?

  Yeah, neither do I. So what do you think this means?

• 33:28David Hoffman?

  Very powerful dragon type attack from Pokemon.

• 33:33Ryan Sean Adams?

  Really? Okay. Your Pokemon lore exceeds mine, my friend.

• 33:38Ryan Sean Adams?

  All right.

• 33:38David Hoffman?

  It's a PoWédot platform.

• 33:40Ryan Sean Adams?

  The question is, it's PoWédot? Okay, so it's not Pokemon. Nothing to do with Pokemon. So the question is, are all bridges susceptible to this?

• 33:52David Hoffman?

  Yes.

• 33:52Ryan Sean Adams?

  So you know, like Bankless, we're very excited about layer twos, obviously.

• 33:56David Hoffman?

  Yes.

• 33:56Ryan Sean Adams?

  Optimism.

• 33:57David Hoffman?

  Also have bridges.

• 33:58Ryan Sean Adams?

  Arbitrum, the ZK EVMs, you've heard us talk about these before, and they also have bridges, to David's point. These bridges are not susceptible to economic attack, which is one category of attack, and probably less susceptible to oracle attack. We haven't delved into that in all the details, but is susceptible to similar kinds of technical attack as we saw with Nomad. So does that worry you that like, hey, anytime we bridge from mainnet Ethereum, there's some smart contract risk here on any of these layer two ecosystems? Do you think that'll be an inhibitor to scale?

• 34:41David Hoffman?

  Yeah, so, uh, layer two, layer twos are bridges that have less attack surface area. Like you said, there, you can't do an economic attack on a layer two bridge. And you also cannot do an oracle attack on a layer two bridge if that bridge has an oracle. But, you know, smart contracts are smart contracts and bridges are smart contracts. And so a layer two bridge to optimism, ZK sync, you know, Arbitrum, these are all have bridges that all have smart contracts that, and those smart contracts can be exploited. There is one major difference for optimistic rollups in that optimistic rollups have a seven day withdraw window.

• 35:18David Hoffman?

  And so if you have a bunch of ether on optimism or Arbitrum and then, and then you like exploit that bridge, it's going to take you seven days to get back to the Ethereum layer one. But that's, I guess that's only true if that smart contract exploit happens on the, on the layer two side. Because that ether does exist on the Ethereum layer one inside the bridge contract. So if the Ethereum layer one bridge contract is exploited, I guess you could just get it out immediately. So smart contract risk is always going to be smart contract risk. The, the spicy hot take that I'll have is that if you are building a layer two on Ethereum, one of the core reasons why you would choose to do a layer two on Ethereum rather than alternative layer one is that you believe in, you prioritize security utmost.

• 36:01David Hoffman?

  Like if you are doing your own blockchain, your own layer one blockchain, you have to build your security from scratch and you're going to be inherently less secure than the Ethereum layer one. Cause that's what the Ethereum layer one has optimized for. So if you are a layer two, you are prioritizing security that is in your culture as a team. So if you are a team that prioritizes culture, security in your culture, you're likely also doing a much higher effort on securing your bridge and your bridge smart contracts than you would if you are a team that doesn't prioritize security as much. And teams that don't prioritize security don't build rollups, they build alternative layer ones. Is that a fair take? I feel like that's a fair take.

• 36:37Ryan Sean Adams?

  I think that's a fair take, but also at the same time, I mean, it's nice to say, right? But like, I don't know, it's kind of verify, don't trust.

• 36:46David Hoffman?

  Sure.

• 36:47Ryan Sean Adams?

  It's not great to be in the position of having to trust the expertise and the skill level and the security, like the security profile of devs of a particular bridge. So yeah, I would say I am moderately worried about this and it's not something that we should take lightly. Like, the good, the good news, I think, with, with all of these, bridges in the rollup ecosystem is they're upgradable. So we haven't like turned off, we haven't removed the upgrade button from any of them. So if something goes wrong, you know, a patch could go in quickly. But yeah, I think there is some risk and we should be real about that when people are bridging to even layer two ecosystems, they

• 37:32Ryan Sean Adams?

  have this risk. Now, I think that risk will decrease massively over time. There was a time, David, where I was too freaked out to put any funds inside of a multi-sig, like the Gnosis multi-sig wallet, for instance. And do you remember there was a Gnosis multi-sig wallet, kind of a V1, and then they, they created a V2, and you sort of reset the clock back to zero when a new upgrade is kind of issued. And now I'm not like, Gnosis multi-sig holds, you know, tens of billions of dollars at this point. It's been around for years, has a very strong Lindy. And I think the only way around kind of the, the bridge hack

• 38:13Ryan Sean Adams?

  concern is you have to have bridges that have been in place without being touched for a long period of time, securing massive amounts of money. And this is going to take time. So, I don't know, I'm not putting all of my funds on a layer two as a result of this because it's still in the early phases. Do you think that's a fair take?

• 38:35David Hoffman?

  I definitely think that's a fair take. And just to, I think we should definitely take some time on this, on this topic because bridges is, you know, always has been a huge theme of the last 12 months. This is a Bartek thread from Layer 2 B is doing a fantastic job just putting in risk frameworks and helping to define the risks of bridges and layer twos. So Bartek puts this thread together and he says, "With the recent hack of Nomad, I think it's time to reflect more broadly on bridge security as by now they have become far more the most critical piece of blockchain infrastructure. Here are some things to consider. Externally validated bridges, as in bridges that require a kind of multi-sig to process messages can obviously be drained by the key owners and the keys might be compromised.

• 39:17David Hoffman?

  But the smart contract there is very simple to implement, audit and independently verify. As in, there's a trade-off here. Your smart contract is more simple because you've exported a bunch of risk to the multi-sig. And sometimes, especially in the beginning stages of a bridge, I would definitely advocate for this model. Let's just like, like, remove all the complexity and just trust the founders, trust the multi-sig for the beginning stage.

• 39:41Ryan Sean Adams?

  This is similar to the Polygon bridge, to the previous stake chain.

• 39:45David Hoffman?

  Granted, Polygon has an extra layer of defense because it has Ethereum sidematic staking, which is a very meaningful difference than like your typical side chain or cross-layer-one bridge.

• 39:56David Hoffman?

  Bartek continues and says, "There is downside, of course. With that bridge, you need to trust the off-chain code, which is completely opaque. Who knows what's going on there? Shout out Ronin Bridge with the Axie network." Bartek says, "Nomad is way more complex and it fell due to an obscure bug in a smart contract code, not an architectural flaw. Compared to Nomad, optimistic roll-ups are still more complex. Compared to optimistic roll-ups, ZK roll-ups are insanely complex. You do the math. It makes sense to let the bridge code ossify with time before you move bigger funds, but after the upgrade, the ossification timer is reset to zero. As the upgrade may introduce a critical bug as it happened with Nomad. This is what happened. They upgraded their bridge contract."

• 40:38Ryan Sean Adams?

  It was fine previously.

• 40:39David Hoffman?

  Right. And so, yeah, it was fine. And they're like, "Okay, cool. Let's up the security. Let's up the hands-off nature of this bridge." And that upgrade was the thing that introduced the risk. Whoops. Bartek says, "Nomad is also permissionless. Anyone could process messages and bridge. The bridge could not be stopped. No central actor to trust." Which like yay, we like that in a bankless world, but also ooh scary in the early days. This removed power from Nomad Team, but also left them helpless watching the bridge being drained. As noted many times before, this base critically needs a solution for design that is trustless and secure against critical bugs at the same time. Seven day delay windows in optimistic rollups gives an honest actor, an honest operator, plenty of time to stop withdrawals. Hence, it makes sense virtually impossible, hence it makes it virtually impossible for

• 41:24David Hoffman?

  an attacker to exploit the bug in a smart contract.

• 41:27Ryan Sean Adams?

  So the operator could pause things.

• 41:29David Hoffman?

  Operator could pause things. And I actually think that that actually does protect against Ether deposits on the layer one from being revoked or like exploited from the bridge contract because that contract has a seven day window on it, on the Ethereum.

• 41:41Ryan Sean Adams?

  Yeah, totally. That, that, that actually makes me feel better about optimistic rollups.

• 41:45David Hoffman?

  Yeah. Therefore, it may be, and so what he's saying here is there, there's a balance here with like the seven day window. We can make things trustless and smart contract based without it being a multi-sig. But you see, but you also have like the, if, if it comes down to it, like an operator can step in and do something inside of that seven days. Famously, this is what saved Ethereum during the DAO hack.

• 42:05Ryan Sean Adams?

  Right. And same with the upgrade ability. While that is like a knock against, you know, it's more centralized for a optimistic rollup team to have upgrade ability. The, the fact that they have that sort of makes the funds more secure if you, you know, have some trust in them to be an honest actor.

• 42:21David Hoffman?

  Yeah. Last few tweets from Bartek. Hence, it makes it virtually impossible for an attacker to exploit the bug in a smart contract because of that seven day window. ZK rollups, if they contain the bug, might not be so lucky as there is no delay window there. Fun fact about ZK rollups, you can go in and out of ZK rollups instantaneously, but then you lose that seven day window protection. Bartek continues and says, therefore, it may be good to have a delay for big withdrawals and a cap on fast withdrawals to limit the potential damage. This is the approach that Maker DAO is taking with its teleport for canonical multi-chain DAI. They're making, Maker DAO is making wormholes for DAI's across layer twos. So this is relevant there. Bartek says, if the fast withdrawal infrastructure is breached, Maker DAO, not DAI users, will take the loss, but up to a predefined limit. It's a risk that the DAO may be willing to take.

• 43:06David Hoffman?

  The risk is no. No different than issuing a bad loan. If this is one bad loan out of a thousand good loans, this is okay. You can be even more fancy and have more complex risk framework, taking advantage of architectural properties of a given layer two, to which you want to bridge to. Check out this proposal if you want to dive deeper. And then last couple tweets. "One prominent project that limits deposits is Starknet. Openly admitting to still being alpha is one thing, but users typically ignore that. Deposit limits keep Starknet's TVL artificially low, but this is good and responsible. We still need to look for the perfect bridge design and the cost of mistakes for the whole space is massive. In the meantime, users should be reasonable with how much funds they are moving out from the base layer." I just want to go back to my culture statement.

• 43:48David Hoffman?

  Bartek, previous at MakerDAO, which is one of the DAOs that has been optimized for security since before this whole like multi-chain like world. Like MakerDAO has been so risk focused in its culture. And so like that has now extended to Bartek and what they're doing at Layer 2B and all their risk frameworks for Layer 2s. And now all these Layer 2s are like also focusing on like the Layer 2B risk framework, coming from this very conservative Layer 2B team that's optimized for security the most. I will ask you, if you consider yourself a citizen, to be a citizen of a different chain, Layer 1 chain, whether it's Avalanche, Solana, like, you know, pick your chain. Is there a culture of security in those chains that resembles the culture of security that happens on Ethereum?

• 44:33David Hoffman?

  Because this is the thing that has saved Ethereum from all of these bridges, from all of these exploits that you see happening elsewhere. There's a reason why so much exploits is happening external to Ethereum.

• 44:43Ryan Sean Adams?

  Only the paranoid survive.

• 44:45David Hoffman?

  Only the paranoid survive. That's a great way to put it. So this culture of security is why so fewer exploits happen inside of the Ethereum ecosystem.

• 44:56Ryan Sean Adams?

  But also knock on wood there, David.

• 44:58David Hoffman?

  Oh, I gladly knock on wood. And we can also compartmentalize out parts of the Ethereum app layer, like Wonderland, for example, very risk-taking. There's many DeFi apps on Ethereum that are very, very not risk averse, but that's different. It's different from being risk averse on the app layer versus risk averse on the protocol layer.

• 45:17Ryan Sean Adams?

  You definitely want to prioritize projects that, or you definitely want to lean into projects that prioritize security over speed, right, in this case. And there are many shortcuts you can make.

• 45:29David Hoffman?

  Kyle.

• 45:30Ryan Sean Adams?

  On the speed front. Thanks, Mr. Cosmoni. But we're dealing with a lot of money. This reminds me to what we always end Bankless with, which this is the frontier. You could lose what you put in. It's not for everyone. The frontier has kind of moved from mainnet Ethereum into the layer two space and into the sidechain space. So now, in order to bridge funds to a sidechain, you know what, David? I need to receive a bit more return on my investment because it's a bit more risky over there than on mainnet. So these are all considerations as you're thinking about your journey, your Bankless journey and your journey into crypto. I'm confident, though, over time, these kind of like technical challenges, the code, will become trusted, cemented, ossified, and that's really going

• 46:15Ryan Sean Adams?

  to save us. Kind of similar to a Gnosis Safe. I was skeptical of that in the early days. Now I'm not. Like, I'm fine putting a lot into, inside of Gnosis Safe. But I do think, this is back to kind of a sad prediction that we made, Bankless made, the beginning of 2022, that there will be more of these monster bridge hacks. So this is what we said. There will be some monster bridge hacks in 2022, we're starting to see them, that will make people question their multi-L1 chain thesis. And here's also what I mean. Because over time, you can get rid of and reduce the risk, the technical risk and the

• 46:54Ryan Sean Adams?

  code risk, but you cannot reduce the economic risk and the oracle attack risk. Okay? And unless you're on a layer two, unless you're, you know, doing some level of a roll-up strategy in the sidechain. Strategy where you've got like, you know, networks of side chains. You will always have the economic risk of bridges. You will always have the oracle attack risk of bridges and that ain't going away. And so this is a reason why I am much more bullish on kind of the Ethereum roadmap. Pooled security vision than on kind of like, there will be many chains. And like, there's no real settlement platform of shared security between them.

• 47:37Ryan Sean Adams?

  And because, because there's just the bridge risk, people understate the bridge risk. And events like this kind of highlight what a mistake it is to understate the bridge risk. Anything else on this story, David?

• 47:49David Hoffman?

  Yeah, just to finally tie it off, like this industry is built on top of settlement assurances, which is basically property rights. Are you, are you in a bankless paradigm where you own your own assets? And no one can revoke those assets from you. Like, that is what this industry is built on. Everything is built on strong settlement assurances. And so this is by the same way, same vogue that the strongest, most secure layer one will always end up winning out. The most secure and strongest bridges will also be winning out. And this is why bridges that have the least amount of risk surface area will win over the bridges that have more surface area. And those bridges are always going to be roll up cryptographic bridges.

• 48:31Ryan Sean Adams?

  There, there's your bridication there. We, I think, I think we've covered that thoroughly. Let's talk about the mysterious Solana wallet hack too. That was crazy.

• 48:40David Hoffman?

  Unrelated to bridges, however.

• 48:41Ryan Sean Adams?

  Unrelated to bridges, but it was crazy this week. It's something there's like 5,000 wallets upwards, like maybe closer to 10,000 wallets. Basically Solana wallets. People looked inside of their wallet and they were like, oh my God, my money is no longer there. How could this happen? And I'm not talking about a centralized exchange wallets. I'm talking about sort of, you have the private key to your wallet. It's in, you know, phantom or some sort of, you know, meta mask, for instance. And then all of a sudden, the fees are like, the, the, the funds are withdrawn. How could this even happen? That was the question.

• 49:12David Hoffman?

  A lot of Solana users, for those that don't use Solana, it's like they opened up their meta mask and like, there was no money there anymore.

• 49:19Ryan Sean Adams?

  Yes.

• 49:19David Hoffman?

  Like, it's all gone.

• 49:20Ryan Sean Adams?

  It was all gone. And so, big question of how does this happen? And how did it happen? Because there's kind of like a Sherlock Holmes, you know, the entire community, Ethereum, Solana, the entire crypto community was trying to figure out how this mass wallet drain actually happened. Fortunately, not a lot of money, but it was like $6 million or something like this. But a lot of wallets were affected. Do you want to tell us the story here, David?

• 49:44David Hoffman?

  Yeah, so here's the tweet thread, and I'll just explain it better than I can. It says, "Six million dollars of Sol and USDC have been stolen from over 8,000 Solana wallets. The hacker used private keys to drain user funds in what has been one of the craziest and most mysterious hacks in recent times. It all started when a few people noticed that some unusual outflows were happening from Phantom wallets on Solana. Phantom, I think, is the most popular wallet on Solana. Numerous reports started to pop across Twitter and Discord of users having fund drained from their wallets. Phantom Wallet was quick to issue a statement saying that they do not believe that this is a Phantom-specific issue." Interesting, interesting. And so, developer and auditor X Fubar, Zero X Fubar, found that the attacker was stealing both Sol and USC tokens from people's Slope and

• 50:27David Hoffman?

  Phantom wallets, Slope and other wallet in the Solana ecosystem. The most logical thing to do like this is to revoke any access to any DApps, as in like, you know, undo all permissions. But Avalanche co-founder Emin asserted that it's likely that the attack acquired access to private keys. How did they do that? How'd they get the hands on 8,000 different private keys?

• 50:46Ryan Sean Adams?

  Not supposed to happen.

• 50:47David Hoffman?

  Not supposed to happen. And so, this means that the only way to protect your assets is to move them onto a hardware wallet or onto a centralized exchange. So this was a hot wallet exploit. Solana finally responded after hours of speculation that stated that over 7,767 wallets had been affected by the exploit so far. But what was soon made matters worse was that RPC nodes started pinging as offline. This indicated that the Solana network was down, causing more panic across Twitter. It was theorized that the nodes were being purposely DDoS'd by developers in order to slow down the hackers. This backfired as it caused additional confusion. Oof. Supposedly, the DDoS attack was aimed at the hacker, which subsequently resulted in RPC nodes failing.

• 51:30David Hoffman?

  God, what a mess. Okay, keep going. The most concerning part of the is the lack of clarity surrounding the root cause of the issue. Even Solana co-founder Anatoly couldn't offer verdict despite alluding to iOS imported wallets being the key target. He and other key Solana figures surveyed their audience for data, trying to get to them to the bottom of the exploit, almost attempting to conduct an on-the-go poors modem. This indicates to me that we are dealing with a highly complex exploit. As of now, the issue is still being investigated. Solana's latest update says that they continue to investigate the root cause, and it does not appear to be a bug within Solana core code.

• 52:08Ryan Sean Adams?

  We do know the root cause, though, now. I think this tweet thread kind of trails off at a time when we didn't know the root cause. Do you have any information on the root cause, David?

• 52:18David Hoffman?

  So in a different tweet, Xerxe Fubar, who is apparently really good at deducing stuff like this, says, "It looks like the SLOPE wallet sent plain text seed phrases to external integration partners." I'm sorry, what? What?

• 52:32Ryan Sean Adams?

  Not mysterious at all, just like another noob mistake.

• 52:34David Hoffman?

  They just sent... Okay, so that's like if, you know, Metamask, it gives you your seed phrase, and like it lets you, it makes you copy it down. That's like if Metamask was sending that same seed phrase to like Infura, and Infura was just like logging that. And so that's absolutely crazy. Compromised Phantom wallets came from seed phrases imports used in SLOPE. Compromised ETH wallets were also from seed phrase reuse. So I guess some Ethereum wallets were even compromised for people that generated their wallet using SLOPE. This is not a blockchain or a randomness issue. This is a terribly irresponsible service provider issue. Fubar then later issues a correction, saying the SLOPE wallet did not send seed phrases to external partners, but may have logged them in their own centralized servers. Okay, well, then they're the external partner.

• 53:20David Hoffman?

  Apologies for getting a bit ahead of myself.

• 53:22Ryan Sean Adams?

  Whether they sent it to a third party or not, the fact that they were logging seed phrases in a database anywhere in plain text, where it could be hacked, that is a massive problem.

• 53:32David Hoffman?

  That is terrible. Don't save other people's seed phrases.

• 53:36Ryan Sean Adams?

  Nothing mysterious here. It's just a really bad wallet provider, basically.

• 53:41David Hoffman?

  Extremely bad wallet provider.

• 53:43Ryan Sean Adams?

  I mean, people were worried that, you know, there was like a blockchain issue, a randomness issue. It's like quantum computers, it's like hack people's private keys, something like this. It was so mysterious and it turns out it was just average, every day, sharing private keys via plain text. And that's what screwed it over. So, mystery solved, I guess, David. Do you have any private key advice for us, though?

• 54:05David Hoffman?

  I do, I do have one, but actually before I do that, I would like to actually just show the Coinbase app. I don't have, I'm not logged in because I don't have a Coinbase account. But like they have a multi-party computation wallet. So you can go and like use your Coinbase app as like a centralized, you know, exchange, like as everyone does. But you can also go and like trade specifically on Uniswap or do stuff on Maker Dow or pool together. Because Coinbase has a multi-party computation wallet built into their app. So not only is it like a centralized custodian with a, you know, exchange built in like, like we know. But it's also a self-sovereign wallet with multi-party computation, meaning that they have a shard of your private key. Your phone also has a shard of your private key. So they can restore your private key, but they don't have your private key.

• 54:48David Hoffman?

  That's crazy. So like Coinbase doesn't, doesn't get enough credit for that. And so Coinbase, Coinbase app, this is, and this is not even Coinbase wallet. This is the Coinbase consumer app. So like, I, I want to go find out more about that wallet because that is a really cool feature.

• 55:02Ryan Sean Adams?

  We talked about it on a roll up, but like, remember they, they came out with it at the permissionless conference?

• 55:06David Hoffman?

  Yeah, I didn't know, didn't realize they had already rolled it out to the, the main core consumer app.

• 55:11Ryan Sean Adams?

  Yeah, it's great. It's great. It's, it's like, um, you know, there are some pieces of the design that are a bit more centralized than say a smart contract wallet. But it's like this nice place in the middle where it's a cool compromise. And as you said, they're getting it out to, to users right away. It's much better than a completely custo- custo- custodied centralized wallet provider. But anyway, what do you do? What's your?

• 55:31David Hoffman?

  Wait, before that though, we had a guest on who was like, uh, they were explaining, maybe it was Mark Cuban. Yeah, it was Mark Cuban. He was, he was talking to his friends and like, I downloaded Coinbase and like, I couldn't find like the DeFi tab. There is now literally a DeFi tab in the Coinbase app and you can do DeFi things. And from the user perspective, they get private keys, but they don't even know it. It's and they can't lose them. It's great. It's great. Anyways, so here's what I say. I don't. This isn't the best advice, but it definitely works. It's a little bit of a brute force method. I say every six months or so, I generate a new set of private keys and I rotate my wallets. And this removes all buildup of smart contract approval risk. And so I generate my own private keys using, using like the my ledger.

• 56:13David Hoffman?

  And then every six months ago, I just take my assets and I plop them into the new address. There are ways to achieve these same results. If you're worried about approval risk, you can just manually unapprove things. But also this

• 56:25Ryan Sean Adams?

  Approval risk is another thing to worry about. It's not at play in either of these two hacks. It's just yet another thing you have to worry about.

• 56:31David Hoffman?

  Yes. If you approve a contract that sets permissions to all, like that contract can do whatever you want with all of your money. But you can manually revoke those. So you like, you can get security that way. But this also removes like any sort of like accidental internet exposure to my private keys. There's been one time I have like a piece of paper. I don't have it with me. I keep it elsewhere.

• 56:51Ryan Sean Adams?

  Careful, opsec sir.

• 56:52David Hoffman?

  But I have like a piece of paper with every previous seed phrase that I've ever used ever, whether, whether I've generated it with MetaMask, whether I've generated it with Ledger. It's got all my historical private keys on it and it's somewhere in the world. I'm not going to say where it's not with me. It's not where I live. But, but like, and the reason why I keep that is for like airdrops, right? Like sometimes some airdrop happens and I'm like, fuck, I have to go like type in all of these likes old seed phrases to go to check out which one of these addresses is relevant to the airdrop. And I typed them into MetaMask. And so what was previously a ledger seed phrase becomes like a MetaMask key phrase, making it a hot wallet. And so like I, I, hold on, I'm basically like putting all of my previous ledger seed phrases into my MetaMask, making it exposed to the internet.

• 57:37David Hoffman?

  And so what I do is then I generate a new set of private keys. And then, you know, in the appropriate way, not release to the internet. And then I make you find a new address and I send all my assets to that brand new address. And so it's like, always like a rotation of just like, you know, you can't find me, can't catch me, can't catch me.

• 57:52Ryan Sean Adams?

  I do not do any of those things, but I'm not sure if your method is like better than what I do.

• 57:58David Hoffman?

  What do you do?

• 57:59Ryan Sean Adams?

  Well, yeah, I'm not going to disclose that, David.

• 58:02David Hoffman?

  But this is, this is the beautiful thing about this is like, I can tell like about my private key management because it doesn't matter because it's always changing.

• 58:11Ryan Sean Adams?

  Yeah, so I do think we should have an episode that is just all about like best practices for OPSEC and private key management, like on the bankless journey. Just, you know, it's not somebody that needs to disclose what they're doing, but it's like, what are the best practices? 10 best practices, different methods, practical, real world. Because like, this stuff's hard. As we call it, the bankless journey for a reason, like, and bad things can happen to you, like, bridge hacks, like oracle attacks, like economic attacks. You have to be careful what you use. And suddenly, one day, if you use the wrong wallet, all your money gets stolen. Like, this is not easy stuff. And the rewards are great on the other side, as we always say, with, you know, kind of going bankless. But so are

• 58:53Ryan Sean Adams?

  the risks. The risks are great as well. Anyway, that's your strategy. That's David's strategy.

• 58:58David Hoffman?

  It's a nuclear of a strategy. You know, like, there's definitely other ways to achieve the same ends, but it's just what I do.

• 59:03Ryan Sean Adams?

  It's interesting. Yeah, it's definitely cool. All right. Are we gonna get any tokens, David? Last thing. Are we gonna get any tokens from a new ETH proof of work chain, do you think? Some free forked ETH before the merge?

• 59:16David Hoffman?

  No. No, you will not. Yes, I mean, yes, you will have Ether proof of work. No, it will be worth pennies. There's like, a bunch of like, people on Twitter talking about, oh, the proof of work chain, the proof of work chain, we're gonna fork Ethereum and get all the like, this extra tokens and extra ETH. Like, no, no, you're not. Some, what's gonna happen is that some people are going to, are writing, already writing transactions, right now, that are going to be sent in that very first or second block on the Ethereum proof of work chain, that sells all of their tokens for Ether and Uniswap. It removes all of their Ether from Compound and Maker. It basically, there's going to be a massive run on the bank, except the bank is proof of work Ether. So every single token is going to go to zero.

• 59:58David Hoffman?

  And there's actually a thread that we should read. So let's go to the thread by Lemonscape. And this is Mark Zeller from AVE, and goes, "A short thread about ETH proof of work and was quite likely to happen. Overnight with a fork, a carbon copy of the full Ethereum ecosystem appears. You have 10 ETH, well, you also have 10 ETH proof of work. You have a position in AVE, now you have that same position on proof of work AVE." So let's begin with the big Simple consequences. ETH proof of work means no proof of stake. So staked ETH is now worth zero because it'll never be redeemable because it's on the staked ETH chain. On AVE proof of work, that means there's a 1 billion dollar hole in the book because the AVE accounts for the value of staked ETH. But the proof of work staked ETH goes to zero. On Maker proof of work, that's 100 million dollars of DAI backed by zero.

• 1:00:42Ryan Sean Adams?

  That is absolute mayhem, by the way.

• 1:00:44David Hoffman?

  Absolute mayhem. Yeah, all of a sudden, all the collateral and all the lending apps goes to zero. You can't have any fiat backed stablecoin doubling the supply, obviously overnight. So USDC and USDT proof of work supply goes to zero. So also collateral Maker DAO and elsewhere. Circle and Tether can perhaps later support ETH proof of work, but the only way is to issue new ERC 20 tokens and forget the old ones. That's an additional 1.7 billion dollars hole in AVE proofs of work. That also means that 73% of Maker DAO collateral overnight is worth zero. So sorry to say, but this means that DAI proof of work and MKR proof of work are now also worth zero because MKR needs to get minted to cover debts in the Maker DAO system. But when your debt is billions of dollars

• 1:01:26David Hoffman?

  and that brand new MKR token on the proof of work chain is already worth zero. So like, you know, you have to inflate your token that's already worth zero by infinity, making it worth zero even more. And so like just massive holes in collateral because like none of these tokens are worth anything on the proof of work chain.

• 1:01:42Ryan Sean Adams?

  Basically, what's happening is like the token ecosystem, the DeFi app layer is gonna be complete mayhem.

• 1:01:49David Hoffman?

  The application layer of the proof of work chain is dividing by zero. It is imploding on block number one. And so this also happens for like Uniswap, Sushi Swap, all your favorite protocols. All tokens become worth zero because there's nothing there. And so if all the tokens are worth zero, what happens? And this is where like the whole run on the bank metaphor comes from. The agenda for...

• 1:02:15David Hoffman?

  Yes, conclusion, DeFi proof of work is dead on arrival. And so here's what Lemon's Gate says, "The agenda for ETH proof of work shills. AMM liquidity will still be around because there will be like uni versus ETH pairs on the proof of work chain. But if you have any uni tokens, you're just going to like remove them all and buy as much ETH pow as possible. You have staked ETH tokens?

• 1:02:34Ryan Sean Adams?

  ETH pow is the new ether. It's kind of the leftover ether.

• 1:02:37David Hoffman?

  Yes, unofficially, it's just what people are calling it. So do you have any staked ETH tokens? Because those are worth zero. So you go to Curve, proof of work Curve, and you dump those for ETH pow. Until AMMs are full of tokens and empty of proof of work ether. So all tokens are being immediately sold for ether, proof of work ether. Because it's the only token that has any like feasible semblance of having any value whatsoever. The plan is to collect as many ETH proof of work tokens as possible, while shilling it on Twitter as like the one true ETH. Because that's what people do. That's what our opportunists do. And then they wait for tier C centralized exchange listings like Poloniex, deposit it there, and then try and dump it on like victims trying to buy this shill. That's the plan. Everyone knows it. People have been talking about this for years. We've known this is going to be a thing for years.

• 1:03:22David Hoffman?

  And so if you are a listener who's like, "Ooh, yay, I get like proof of work ether. I get some extra ether." Are you going to be the bot that writes these transactions? Because this is, there's going to be a war on the first and second block of the proof of work Ethereum chain to do all of these things, and it's all going to be over in two blocks. Are you, the listener, capable of fighting that fight and getting your transaction in first ahead of the bots? Because if you are not, then you are not getting anything. That's the end of story.

• 1:03:51Ryan Sean Adams?

  I still think, so, yes, that is one.

• 1:03:53David Hoffman?

  Get out of here, Ryan. What do you still think?

• 1:03:56Ryan Sean Adams?

  What I still think that what could happen is some narrative spinner rises up. You know, the Craig Wright of pow ETH, the Roger Ver.

• 1:04:08David Hoffman?

  Some religious figure.

• 1:04:09Ryan Sean Adams?

  The ETH pow Jesus rises up and says, "I will bring you a new narrative for this asset class. This is the true thing." And like, we've just seen this happen so many times, David. Yeah, there've been a lot of Bitcoin forks previously. Most of them have completely failed. But a few of them have had some actual like multi-month, multi-year shelf lives. And those are the ones that are led by kind of some benevolent dictator, cult figure, you know, sort of religious figure. There's ultimately. I don't know about in Roger Vera's case, but Craig Wright's case, very clearly manipulating the community and trying to kind of like exit scam, exit dump them. I know it's more complicated than a Bitcoin fork because Ethereum has this massive DeFi app layer.

• 1:04:55David Hoffman?

  Right.

• 1:04:55Ryan Sean Adams?

  But as you said, that's going to sort itself out. It's going to be completely drained. It's all going to go to ETH pow. There could be a figure that rises up and says, I'm going to take this narrative. I'm going to push it forward. I'm going to create a developer roadmap. I'm going to gather some funding. I'm going to get the help of ETH pow miners. And the narrative could have a shelf life longer than a week, maybe multiple months. Again, I really don't care in either case. Like if that happens, then maybe there's some ETH pow I can later sell and that's a great thing. But I, all I would say is I think that is also a possibility. Possibility this thing fades out in like a day or a week. It's also a possibility because we've seen it before. Some cult leader rises and brings a narrative

• 1:05:39Ryan Sean Adams?

  to this chain and gives it some, some level of life because we've also seen that before.

• 1:05:44David Hoffman?

  Is that going to be you, Ryan? You're going to be that cult leader?

• 1:05:46Ryan Sean Adams?

  I, it's not me, David. It's not me. I mean, like, I do not have that will and no interest in doing that, but.

• 1:05:56David Hoffman?

  So there's a, there's a video that I like that I think resembles what's going to happen in blocks one and two of the proof of work chain. And here's a video of a San Diego fire 4th of July where they accidentally had like a computer exploit, a computer bug. And instead of having a 45 minute fireworks show, every single firework just went off at once. So we had like 45 minutes worth of fireworks all going down in like 30 seconds. And that's basically what's going to happen to this proof of work app layer.

• 1:06:24Ryan Sean Adams?

  You think it's just going to be short, very short show and then it's over?

• 1:06:27David Hoffman?

  Yeah.

• 1:06:27Ryan Sean Adams?

  David, what's coming up next?

• 1:06:29David Hoffman?

  All right, coming up next, Sailor stepping down as CEO of MicroStrategy. To do what? To do what? Perhaps to buy more Bitcoin? Probably. And also Tiffany's selling CryptoPunk jewelry? I have a CryptoPunk. Will I be getting a Tiffany's CryptoPunk necklace? Stay tuned to find out, but I think you already know. But if you don't, stick around to find out. We'll be right back, right after we talk about some of these fantastic sponsors that make the show possible. Arbitrum is an Ethereum Layer 2 scaling solution that is going to completely change how we use DeFi and NFTs. Some of the coolest new NFT collections have chosen Arbitrum as their home, while DeFi protocols continue to see increased liquidity and usage. You can now bridge straight into Arbitrum for more than 10 different exchanges, including Binance, FTX, Huobi, and Crypto.com.

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• 1:08:40Ryan Sean Adams?

  Alright guys, we're back and speaking of bridge compromises again, AVE seems to be stepping back from its multi-chain strategy and why? Because of some of these bridge compromises that have been happening. So AVE stepping back from Phantom, I believe, which is sort of an EVM fork chain. Mark Zeller, who we were just talking about, said this.

• 1:09:01David Hoffman?

  Lemonscape, yeah.

• 1:09:02Ryan Sean Adams?

  Yeah, Lemonscape is, "The rationale is after the Harmony Bridge event, the recent Nomad Bridge exploit, the AVE community should consider the risk benefits of keeping an active AVE V3 market on Phantom, as this network is dependent on any swap multi-chain bridge." Zeller, actually, in the tweet thread as well, he said he was wrong. He said, "Hey, I was wrong to be so aggressive on kind of the multi-chain strategy." And yeah, that was just really, really interesting to hear from him. It's like, not wrong in a big way, but maybe a bit more aggressive during the bull market and now seeing that, hey, some of these risks are real. And by the way, kudos to anyone who ever admits they're wrong in crypto.

• 1:09:42David Hoffman?

  Certainly.

• 1:09:43Ryan Sean Adams?

  Because that is a rare event in and of itself.

• 1:09:45David Hoffman?

  Yeah. I mean, basically, this is a classic cost-benefit calculation. Is, how much fees is AVE generating on Phantom? And how much is that risk of that multi-chain bridge? And AVE governance, this isn't a formal thing, this is a governance proposal. But the proposal is saying, "Hey, the cost of rewards is just not there, so let's just trim Phantom." I mean, it makes sense in a bear market where like, you know, some chains don't really make it. So Phantom, not doing so hot. Alright, moving on, SushiSwap new head chef is asking for 1/3 of all the tokens that are paid to the staff, which is a very contentious proposal. But there's a DAO debate with SushiSwap about how well compensated the SushiSwap head chef should be.

• 1:10:27David Hoffman?

  I kind of think that SushiSwap needs some sort of like highly competent, highly centralized leader to like kind of steward this ship, especially as we're seeing things kind of like drift off in the bear market. But SushiSwap going through some governance debates right now.

• 1:10:40Ryan Sean Adams?

  That's like executive compensation debate in DAOs right now. That's kind of interesting.

• 1:10:44David Hoffman?

  Here's a great thread out of optimism about optimism bedrock, which is optimism bedrock coming soon TM, and when it does, it will change the rollup game forever. It will lay the protocol's foundation for years to come and serve as the model for rollup architecture. Its name is bedrock for good reason. There are a few awesome things that this bedrock architecture does for optimism. It reduces the L1 to L2 deposit time by 4X and also slashes the cost of data submission by 20%, making fees 20% cheaper. But those are all really cool things that all the users can understand. But really, the really bullish thing is this third thing, cuts the difference with Geth down to a slim 500 lines of code.

• 1:11:24David Hoffman?

  And so Kevin Filchner, who is on the optimism team, he puts this tweet together and goes, optimism's bedrock design is the most advanced rollup architecture ever built. It's not a competition. Bedrock is close to theoretically optimal on every front. Optimal transaction fees, optimal diff, difference, optimal networking, optimal block production. And what they are mean by optimal is related to this 500 fee difference between optimism bedrock and Geth. They're trying to get as close to Ethereum equivalents as possible. And so when we talk about bridge risk and all of these smart contract risks, when you reduce the lines of code down to something like Geth, which has been tried and true in Ethereum for eight years and running now, then you have stronger assurances that

• 1:12:09David Hoffman?

  there's less and less attack surface area. And so when I see these words like theoretically optimal on every front, I get like really hot and bothered, Ryan, because I love things that are theoretically optimal. And so the fewer lines between Geth and a layer two, the more secure you can feel about using these layer twos. And the other thing I'll say about this is when you have something that is closer and closer and closer to Geth, the software that we've already been using Ethereum for years, you can like, bedrock can become like a foundation for a thousand rollups to bloom because it's not that complicated. It's so simple. It's so close to this infrastructure that we've already had. So the forkability of bedrock to allow a thousand secure layer twos to bloom is like off the charts. So I'm just super bullish about that.

• 1:12:54Ryan Sean Adams?

  Yeah, I am glad that optimistic rollups are innovating and of course Arbitrum's Nitro is coming up too. So it's like Bedrock versus Nitro and they're both kind of competing for attention and narrative here.

• 1:13:05David Hoffman?

  Nitro also, also something that is trying to emulate Geth as well. These are the same, same design structures.

• 1:13:10Ryan Sean Adams?

  Yeah, very, very, very similar design structures and patterns and I'm just happy to see them wearing it out for users. David, did you know Ethereum chain is seven years old?

• 1:13:20David Hoffman?

  Happy birthday, I said eight. Happy birthday to Ethereum, yay.

• 1:13:24Ryan Sean Adams?

  Who are we looking at here?

• 1:13:25David Hoffman?

  Here's a picture of Vitalik and his dad. Unrelated, actually, from Ethereum's birthday.

• 1:13:30Ryan Sean Adams?

  Yeah, definitely related, father, son.

• 1:13:32David Hoffman?

  Yeah, sure.

• 1:13:33Ryan Sean Adams?

  Yeah, great to see them on Ethereum's birthday.

• 1:13:36David Hoffman?

  Moving into some Bitcoin stuff. Yeah, Michael Saylor leaves the CEO role to assume executive chairman role. So, Michael Saylor, no longer the CEO of MicroStrategy, has stepped down while a different individual stepped into the CEO of MicroStrategy. Which makes sense.

• 1:13:54Ryan Sean Adams?

  I mean, he's become so interested in Bitcoin, he's much less interested in like, you know, MicroStrategy is a business analytics company? You know, kind of software for like business dashboards and stuff like this.

• 1:14:04David Hoffman?

  Things that are unrelated to Bitcoin, yeah.

• 1:14:05Ryan Sean Adams?

  Yeah, so he's, he's very interested in Bitcoin. He has like 70% voting majority over MicroStrategy. It's basically, he governs MicroStrategy, now has decided to step down to pursue Bitcoin initiatives.

• 1:14:20David Hoffman?

  To buy more Bitcoin.

• 1:14:21Ryan Sean Adams?

  I guess, I guess that's what he's doing. There's a take from Nassim Taleb here, what is he saying?

• 1:14:26David Hoffman?

  Yeah, Nassim Taleb, who's famously anti-Bitcoin, says, "How much of the 120,000 Bitcoin will they have to sell? Another nail in the coffin to the will never sell." I actually don't think there's any precedent, like, no, like, actually, they're leaning into buying Bitcoin, not trying to sell, but it's just funny to see.

• 1:14:41Ryan Sean Adams?

  You mean MicroStrategy?

• 1:14:42David Hoffman?

  MicroStrategy, yeah.

• 1:14:42Ryan Sean Adams?

  You don't think, like, Saylor was kind of like asked to, to leave or something and go focus on Bitcoin if that's what he's so interested in?

• 1:14:49David Hoffman?

  I think that is what happened. They're like, Saylor, like, this MicroStrategy company still needs to do its MicroStrategy things. You become like the chairman of buying Bitcoin.

• 1:14:58Ryan Sean Adams?

  Bitcoin CEO.

• 1:14:59David Hoffman?

  Yeah, Bitcoin CEO, yeah, but no, Nicholas just wants a grape dance, even though there's no. Great to dance on.

• 1:15:04Ryan Sean Adams?

  We'll see. I don't know. They might sell more Bitcoin as a result of this, but hopefully not in the bear market. I still contend, I think MicroStrategy's Bitcoin buys are going to pay off for them. And like, these kind of tweets will not hold up well, because Bitcoin is going to go up in price. That's still like, the bottom line to me, and just people are impatient. They always like to point when things are down and say, "Oh, it'll never work out." And then they never come back and correct themselves.

• 1:15:28David Hoffman?

  Right.

• 1:15:28Ryan Sean Adams?

  But Tiffany's, what are they doing in the NFT space?

• 1:15:32David Hoffman?

  They are doing NF Tiff's, NF Tiffany's, I guess.

• 1:15:35Ryan Sean Adams?

  Oh god, no.

• 1:15:36David Hoffman?

  Releasing on August 5th, is that tomorrow? Yeah, that is tomorrow. 250, I believe, Tiffany's Crypto Punk NFT necklaces, jeweled necklaces are being released at the low, low price of 30 ETH. 250 limited edition Crypto Punk necklaces being sold for $51,000 at the price of 30 ETH.

• 1:15:57Ryan Sean Adams?

  What's a Crypto Punk necklace?

• 1:15:59David Hoffman?

  Yeah, so here's the video, it'll play out.

• 1:16:05Ryan Sean Adams?

  Wait, how much is this? What are we looking at?

• 1:16:06David Hoffman?

  $51,000. So like a bunch of like-

• 1:16:10Ryan Sean Adams?

  This is just an NFT, so you can't have your Crypto Punk-

• 1:16:12David Hoffman?

  No, no, no. It's a real necklace. It's a real necklace.

• 1:16:14Ryan Sean Adams?

  It's a real necklace. Oh, this is a real necklace.

• 1:16:16David Hoffman?

  Real diamonds, real rubies. Yeah, it's a real necklace.

• 1:16:20Ryan Sean Adams?

  What's the NFT part?

• 1:16:21David Hoffman?

  It's your, so you can't mint any Crypto Punk. You can have a Tiffany's necklace of your Crypto Punk for 30 ETH.

• 1:16:31Ryan Sean Adams?

  Is this something that is wanted? Like, what's the market for this, David?

• 1:16:34David Hoffman?

  Well, there's only 250 of them, and it's one of these things where like, if you are somebody who's going to buy one of these things, you're going to confuse all the other people who are like, "Why the hell are you buying it?" Like, it only takes 250 people to be like, "Yeah, fine, I'll buy one of those."

• 1:16:47Ryan Sean Adams?

  $50,000. I love this tweet from Aubrey.

• 1:16:50David Hoffman?

  Aubrey Strobel, "Imagine your boyfriend gives you a Tiffany box, and you open it up, and it's a Crypto Punk." I'm sure that they would just love that. That would be so great for them. I'm sure they would just be overjoyed.

• 1:17:03Ryan Sean Adams?

  There's someone out there, though, that's gonna buy one and be happy to receive one. Maybe you just have to find that special someone, David.

• 1:17:09David Hoffman?

  Yeah, right, yeah. Keep on looking.

• 1:17:12Ryan Sean Adams?

  Magic Eden. Oh my god, they changed their Twitter handle to Magic Ethan. First of all, what is Magic Eden?

• 1:17:18David Hoffman?

  Yeah, it's a Solana NFT platform. It's like the OpenSea of Solana. What are they doing? They are now becoming the Magic Eden of Ethereum. So they are integrating Ethereum into their NFT platform.

• 1:17:30Ryan Sean Adams?

  It seems like wise expansion strategy.

• 1:17:33David Hoffman?

  Yep.

• 1:17:34Ryan Sean Adams?

  What do we got here, David? Shaq?

• 1:17:35David Hoffman?

  Yeah, yeah. So this is like, of course, I am sure triggered some of like the Solani maxis out there. It's like, oh, you guys are abandoning Solana to go into Ethereum, even though they are just trying to make the best NFT platform that exists. And Shaq replies to the tweet, Shaquille O'Neal replies to the tweet and says, I wonder, and people wonder why I took dot soul out of my name. I didn't even know Shaq had dot soul in his name. Ryan, Ryan commenting saying, but you didn't add dot ETH. 1700 likes on that. Shaq wearing what it looks like some sort of like ape as his profile picture.

• 1:18:08Ryan Sean Adams?

  What do you think he's saying? This is not clear to me. Why did he take dot soul out of his name? Is it because?

• 1:18:13David Hoffman?

  You can scroll down and there'll be a little bit more of a conversation. He says, there's no point in picking a side anymore. Everyone needs to stop tearing each other down.

• 1:18:22Ryan Sean Adams?

  Well, I take that to be back.

• 1:18:23David Hoffman?

  And then Evan Van Ness says, no one needs to tear Solana down. It's always down.

• 1:18:26Ryan Sean Adams?

  Oh, jeez. Man, burn culture in crypto traders, great. What's Rainbow doing? The wallet, NFT wallet?

• 1:18:34David Hoffman?

  Speaking more NFT stuff, now supporting NFTs on mainnet Polygon, Arbitrum and Optimism. For some reason saying, thank you, Treasure Dow for the gift. I wonder, oh, they got, they got a little, some small, the Treasure Dow is an ecosystem, NFT ecosystem on Arbitrum. Anyways, NFTs on Rainbow Wallet.

• 1:18:52Ryan Sean Adams?

  That's cool. Optimistic NFTs, Arbitrum NFTs on Rainbow Wallet. And what do we got here? Aspect, Starknet mainnet? Is this NFTs for Starknet?

• 1:19:03David Hoffman?

  Yeah, NFTs on Starknet, the, the generalized ZK rollup platform out of Starkware. So cool. That, that means super cheap NFTs, super cheap, super fast.

• 1:19:14Ryan Sean Adams?

  Regulation, let's talk about this really quick. So Robinhood was just fined $30 million from the New York State Department of Financial Services, NYDFS. And why were they charged for this? It looks like some sort of money laundering issue. What did they do?

• 1:19:32David Hoffman?

  Yeah, they said, the NYDFS charged Robinhood because they were inadequately staffed, didn't have sufficient resources to address risks, risks, and failed timely transaction from a manual transaction monitoring system to one that was adequate for its user size and transaction volume. Basically not adequately monitoring like AML and money laundering shenanigans.

• 1:19:54Ryan Sean Adams?

  I have no takes on this. Kind of, you know, New York State Department's always a bit. You know, crypto unfriendly, I would say, so I wouldn't be surprised if they're blowing a big, a small thing out of proportion, but also I do not know. But this is cool, David, a Senate bill that would hand Bitcoin and Ether oversight to the commodities regulator, the CFTC, basically institute by law and say that Ether and Bitcoin are commodities. It's kind of a reining Gary Gensler in the SEC back. I know there's been, like, the SEC's never given us a super straight take on whether Ether is a commodity or a security or how they view it. They've been a bit more clear on Bitcoin as being a commodity, but we sort of need this legislation, this bit of reining in from the SEC to at least say, these two

• 1:20:39Ryan Sean Adams?

  assets, we know clearly are commodities.

• 1:20:41David Hoffman?

  Right. And this follows from, I think, Hester Person, a few others takes of saying, like, good crypto regulation is ultimately going to come from Congress, not these three-letter agencies that we do not elect. And so if Congress could go ahead and please approve this one, that would be great. Gary Gensler, niner niner boo boo, get your hands off our commodities.

• 1:21:02Ryan Sean Adams?

  And yet, I gotta give credit where it's due. The SEC this week charged a group called Forsage. Forsage?

• 1:21:11David Hoffman?

  Forsage, Forsage.

• 1:21:12Ryan Sean Adams?

  Forsage, Forsage. I don't know, Forsage. This was a $300 billion crypto Ponzi scheme. And I vaguely remember this. It was just blatantly a Ponzi, kind of Bitconnect level stuff. And this is the sort of thing that we want the SEC to do. It's like, there's so many bad guys and clear scams in the crypto space. Please help us, go catch them.

• 1:21:32David Hoffman?

  Right.

• 1:21:32Ryan Sean Adams?

  Right? Like, go after them. Give us clarity. Give the good actors in the space sandbox a playground and go chase after the clear scammers because there's enough of that work to go do. And this is an example of them doing that, doing the right thing, going after a clear Ponzi scheme. Well done. Thank you, Gary. You did something great. David, can you believe this is still happening? So like, add insult to injury. What's happening here?

• 1:21:56David Hoffman?

  Celsius admits customer emails linked in third-party data breach. So not only did you lose your money, but you also lost your privacy with Celsius. Two for one punch.

• 1:22:05Ryan Sean Adams?

  Thanks, guys.

• 1:22:06David Hoffman?

  Babel financed $280 million loss.

• 1:22:10David Hoffman?

  Finances a C5 crypto lender. We've seen them before. Lost $250 million, $280 million in customer funds doing trading. They're trying to trade their way into profit, but they traded their way into losses.

• 1:22:23Ryan Sean Adams?

  With their customers' funds.

• 1:22:24David Hoffman?

  With their customers' funds.

• 1:22:25Ryan Sean Adams?

  Another C5 company more popular in Asia. David, some good news on the releases front. Coinbase Prime is now offering Ethereum staking to institutions in the US. More staking heating up. What is the swell network here, David?

• 1:22:39David Hoffman?

  Yeah, swell network is also part of the Ethereum staking world. Lido, Rocketpool, Stakewise, a few others, but also swell network soon. This is a kind of a highly anticipated staking as a service.

• 1:22:53David Hoffman?

  Like Dow, kind of like, kind of like Lido, but also a little bit like Rocketpool. Mainnet release candidate is now live, which means that they are only one step away from mainnet go live. So I'm very excited for swell. Also, we know that GameStop has been working with Immutable, but now that relationship is formally intertwined with a GameStop wallet. And so the GameStop NFT ecosystem and the Immutable Layer 2 system are now integrated. And so you can only imagine that like the Immutable X Layer 2 is going to be facilitating the marketplace for GameStop, getting a little bit closer to that here.

• 1:23:26Ryan Sean Adams?

  I think the wallet has been based on Loopring. So it looks like they're using multiple Layer 2s as their strategy, not just Loopring, but also.

• 1:23:33David Hoffman?

  Both Ck rollups, though.

• 1:23:34Ryan Sean Adams?

  Yeah, absolutely. David, on the, on the raises front, Variant Fund. This is a fund from Jesse.

• 1:23:43Ryan Sean Adams?

  Who else is on the.

• 1:23:44David Hoffman?

  Jesse Walden, Legion.

• 1:23:45Ryan Sean Adams?

  Yes, Legion, of course. $450 million to support the leading founders in Web 3. This is kind of the, the creator economy type of investment. And they just raised $450 million. So impressive raise. Gary Vee from V Friends just closed a round with A16Z Crypto. So this is a $50 million round, I believe.

• 1:24:07David Hoffman?

  That's a lot of money.

• 1:24:08Ryan Sean Adams?

  That's a lot for Gary Vee's NFT project. Yeah, kind of impressive valuations happening during the bear market still, too. So I guess there's money, there's raises. What does that mean for jobs, David?

• 1:24:20David Hoffman?

  That there are jobs. If there's money and there's raises, then there are jobs.

• 1:24:24Ryan Sean Adams?

  What do we look at here? Let me read a few out. The first from Boardroom Labs, they're looking for a software engineer over DAO governance. Manticore Games, a manager of crypto marketing.

• 1:24:33David Hoffman?

  That's not technical.

• 1:24:34Ryan Sean Adams?

  We're looking for thread orders. You can write a good Twitter thread.

• 1:24:38David Hoffman?

  You're gonna be on Twitter all day.

• 1:24:39Ryan Sean Adams?

  Yeah, like as we are, but apparently we don't have time to write enough threads. Vertex Protocol, a marketing coordinator.

• 1:24:46David Hoffman?

  That's not technical.

• 1:24:47Ryan Sean Adams?

  Bankless, we're looking for a UX UI designer. Bankless also, we need a senior newsletter engineer.

• 1:24:52David Hoffman?

  Best job in crypto.

• 1:24:53Ryan Sean Adams?

  Streams, a financial analyst. Stakefish, smart contract software engineer, also a backend software engineer, also a blockchain marketer.

• 1:25:01David Hoffman?

  Non-technical.

• 1:25:01Ryan Sean Adams?

  Also, a DevOps engineer, and the Bankless Academy is hiring a product manager. There's a ton more jobs here. You can go find them at the bankless job boards.

• 1:25:08David Hoffman?

  Wait, wait, wait. There's a head of marketing at Pleaser DAO. I just want to shout that one out. Also, gotta be a very, very cool job. $100 to $200,000 salary, head of marketing at Pleaser DAO. Come join the DAO.

• 1:25:19Ryan Sean Adams?

  A Willy Wonka. Pleaser DAO is the people's Louvre and the 21st century and a Willy Wonka factory combined. It's very attractive.

• 1:25:29David Hoffman?

  Only in crypto. Only in crypto.

• 1:25:31Ryan Sean Adams?

  All right, when we get back, some questions from the Bankless Nation. What's the safest token to dollar-cost average into over the next 12 months? Also, the best advice for actually getting a job in crypto, and some hot takes from crypto Twitter, as usual. We'll get right to those things, but first we want to tell you about the sponsors that made this episode possible.

• 1:25:50David Hoffman?

  There is a brand-new staking feature in the Ledger Live app today. We all like staking the assets that we're bullish on, and now you can stake seven different coins inside the Ledger Live app. Cosmos, Polkadot, Tron, Algorion, Tezos, Solana, and of course Ethereum. With Ledger Live, you can take money from your bank account, buy your most bullish crypto asset, and stake that asset to its network, all inside the Ledger Live app. Through a partnership with Figment, Ledger also lets you choose which validator you want to stake your assets with, and Ledger is running its own validating nodes, offering a convenient way to participate in network validation, and it even comes with slashing insurance. Ledger Live is truly becoming the battle station for the bankless world, so go download Ledger Live. If you have a Ledger already, you probably already have it, and get started securely staking your crypto assets.

• 1:26:35David Hoffman?

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• 1:27:19David Hoffman?

  it's time to ditch those risky extensions and it's time to switch to the Brave Wallet. Download Brave at brave.com/bankless and click the wallet icon to get started.

• 1:27:26Ryan Sean Adams?

  All right, guys, we are back. And just a reminder, if you have a question for David and myself to read out on the roll up, make sure you follow Bankless HQ on Twitter. Every Wednesday, a tweet goes out and asks for those questions. Here's the first question from Madge80.eith. "If you had to monthly dollar-cost average into one asset for the next 12 months, what would it be?" Except ETH. I'm thinking RPL, that's the Rockpool token, and Uni. Of course, got to say, none of this is financial advice. He's asking David's personal opinion from an entertainment perspective.

• 1:27:57David Hoffman?

  What's the entertaining answer?

• 1:27:59Ryan Sean Adams?

  I want, yes, I want the real answer, but also, it's fine if it's entertaining, David. I actually genuinely want to know, what would you buy besides ETH right now?

• 1:28:07David Hoffman?

  Yeah, I think Madge is on to something with Uni. I think that is, if we're not talking about Ether and we're not counting staked Ether, which I'm assuming we're not, then the Uni token definitely comes next. And the reason why it's, I feel like, very arguably the safest, is because it's generating the most fees. And so that, I feel like, is a great definition of safety. Like, right now, Uniswap generated $1.000.000 today in 24-hour fees. And there's already discussions on the Uniswap Governance Forum about turning on the fee switch. So like, we're getting there. And so if we're going to define, like, what is the Best asset for the next 12 months to buy, it's the one with fees.

• 1:28:49David Hoffman?

  The ones that come after that, like AVE, GMX, also surprisingly up there. And so like, you know, tokens with fees are bullish. And so there's probably some analysis to be done about like, how much fees is the protocol generating? Compared to how big that market cap is with a, with a controlling function of how much revenue, how much percentage can that protocol capture as a result of those fees? Some analysis to be done there. Rocket pool, great token because of the, the merge trade. But is the merge trade going to last for 12 months? I'm not sure, but Uniswap fees will definitely last for 12 months.

• 1:29:24Ryan Sean Adams?

  Yeah, I, I kind of agree. So it's like, I'm going to ignore Bitcoin because I actually think I would still prioritize DeFi tokens right now over Bitcoin. And maybe that's for the first time ever. I would have, generally my answer is Ethan Bitcoin. Those are the assets to dollar cost average into you. But if like you're going to ask my personal opinion, it would probably be some of those blue chip DeFi assets. Like I like uni and Ave, know they're going to be around very strong. Although I also like a lot of the strong layer two projects that have tokens right now. I feel like that's a decent bet. And I would pick those over the alternative layer one bet, even though like

• 1:30:02David Hoffman?

  Oh god, yeah.

• 1:30:03Ryan Sean Adams?

  Solana is going to survive. Obviously Cosmos, they're all going to survive. But I still feel like layer two is being underappreciated. So you got Matic token, you got OP, some of those things as well. I would consider dollar cost averaging into some of those as well. But you know, this isn't necessarily the question that's like, what's the, um, the token, the asset that you're going to make the most money on over the next 12 months? This is more the one that you're going to kind of buy and hold. Yeah, risk from a risk reward perspective. Good question.

• 1:30:31David Hoffman?

  I do think that they even it's like RPL and like Lido and Stakewise are all benefiting from like the merge trade. I think general DeFi tokens that like Uniswap and Synthetix are also going to benefit from just like the beta of the merge. Like Ether goes up, staking as a service tokens goes up, but then Ethereum apps are also going to go up. So it's, it's going to be like an Ethereum rotation. So I think the, the beta is in heavily favored of, of the Ethereum ecosystem at the moment.

• 1:30:59Ryan Sean Adams?

  Yeah, I would say that too. And I do like some of those staking tokens as well. I'd start to classify them as close to blue chip. All right, here's another question, David from Patrick Dudley. What advice would you give a college student looking to get a job in crypto after they graduate? I'm going to my senior year at SDSU and really want to pursue a career in crypto.

• 1:31:18David Hoffman?

  Yeah, definitely the unequivocally best advice for getting a job in crypto. If you want to get a job, the formula is as simple as this. Write really good threads on Twitter. People are doing this. If you want to get a job at a fund, funds will like notice you on Twitter. If you want to get a job at Bankless, we are literally hiring a tweet threader. People that can write threads and get like a thousand likes and just generate a following and capture capture attention on Twitter, if you can do that, you will be handed a job on a silver platter.

• 1:31:47Ryan Sean Adams?

  Okay, so for people who aren't on Twitter, though, like, what what does it take to actually write a thread, David? What does a thread do on Twitter?

• 1:31:54David Hoffman?

  Right, so it distills information down and like the the reason why Twitter is what it is in this crypto space is that it forces big ideas to be like condensed and collapsed and concentrated down to into a very short, a single tweet, 280 characters. And so what you are doing when you are writing a tweet thread is you are learning how to communicate and explain things with extremely extremely small packages. And so that's just good, efficient communication. So it's basically like a litmus test for can you communicate very, very well? If you can thread well, you can communicate well. If you can communicate well, that's like the meta skill. And so people are judging other people's like abilities to like do good work by their ability to write threads.

• 1:32:34Ryan Sean Adams?

  Yeah, I'm gonna plus one that also forces you to go digest some complicated information and break it down atomically. So you have to really understand it if you're going to publish a thread. And then, of course, because Twitter is a social network, it's basically your online resume. You could tweet people.

• 1:32:49David Hoffman?

  Yeah, get off of LinkedIn, get on to Twitter.

• 1:32:51Ryan Sean Adams?

  Totally. That's where that's where crypto is. That's where you're getting noticed. I've seen so many people launch their careers by doing that is, you know, becoming threaders. And then you you start to write in other areas or you get hired by a VC company or, you know, whatever your whatever your main skill set is, that's the way to launch.

• 1:33:09David Hoffman?

  Both me and Ryan like launched our public personas on Twitter and then we found each other on Twitter. And then we started Bankless on Twitter. And now we're hiring tweet threaders.

• 1:33:19Ryan Sean Adams?

  For Twitter. It's yeah, it's like, there's just such serendipity to it. You gotta be part of it. You can't you can't ignore Twitter right now. All right, David, let's get to some takes. First from Balaji. This is, I'm gonna read it out, from Balaji. Srina Vasan, actually, podcast episode coming with him on Monday. That is a do not miss episode. We talk about concepts like this, but here's what he's tweeting. The realigning from red versus blue to orange versus green. Decentralized network versus centralized state. Internationalists and capitalists versus nationalists and socialists. The cloud versus the land and Bitcoin versus the dollar. And he's showing that political compass square. Maybe you can describe this image for us, what we're seeing here, David.

• 1:34:04David Hoffman?

  Yeah, the political compass is on the left. You have the left. On the right, you have the right. So liberals on the left, conservatives on the right. Yeah, politically. But top to down, you have authoritarianism versus libertarianism. And so like we've, we've said on Bankless, Bankless isn't a left or right movement, but it is an individual versus like, versus authoritarian movement. So we lean down towards like the libertarian side of things. Although we do appreciate structure. It's definitely like prioritizing the individual over like the state. And so what Balaji is saying is that what is previously like a red versus blue, left versus right phenomenon is slowly turning into a 99% versus 1%, which he's resembling as Bitcoin versus the dollar.

• 1:34:47David Hoffman?

  The dollar being the state, Bitcoin being the people. And so I think that makes sense, especially as we've been putting this into a context of the end, the end of a cycle of nation-state power, where like the nation-state is no longer concerned about like, do we want to be conservative or do we want to be progressive? We are now just like, all right, who's capturing all the value? Is it the individual or is it the incumbents? And so this is, this is the, instead of left versus right, Balaji is saying it's top versus down.

• 1:35:14Ryan Sean Adams?

  Yeah, and this goes into his idea, a book he recently come up with, that we, we talk about at length is a book called The Network State. And he's really meaning this as it's kind of the authoritarian nation-state versus the people's network state. Anyway, really fascinating conversation with him. Stay tuned for that on Monday. David, a tweet from Sassel, Anthony Solana, what's he saying?

• 1:35:34David Hoffman?

  Yeah, first he says, "First, Layer 2s won't work and are useless technology." And now it's, "If Layer 2s get big enough, it will become its own Layer 1 and abandon Ethereum." If this is the first time you've heard this take, it means you need to get on Twitter. And Saz will finish it saying, "When you see the goalposts move like this, it means the critics never actually knew what they were talking about in the first place."

• 1:35:53Ryan Sean Adams?

  Do you know what this also means, I think? Because I think the rotators are rotating into Layer 2s, or they're getting ready to. And that's why they're seeding this as the next kind of narrative. I think the alt-1 trade is somewhat dormant right now, somewhat over for the time being. And now the L2 narrative trade is on. So what do you have to do? You have to prop up Layer 2s and their value accrual mechanisms from a narrative perspective, and put down ETH in order to get that trade going. So I think they'll probably be effective, and I'm starting to see some of the rotators rotate in.

• 1:36:26David Hoffman?

  Rotators gonna rotate.

• 1:36:28Ryan Sean Adams?

  Always gonna miss Suzu and 3 Hours Capital, the alt-1 rotators. Not gonna happen this cycle, though. This is a Vitalik tweet. What's he saying?

• 1:36:36David Hoffman?

  Yeah, Vitalik says, "Call out scammers. You get hate in the moment, but time vindicates you. Even if you're some CEO with 'reputation' and need for 'professionalism', do it anyways and be savage. People look up to you and your warning will be taken seriously."

• 1:36:51Ryan Sean Adams?

  Is this Vitalik speaking? Be savage?

• 1:36:53David Hoffman?

  Yeah, this is Vitalik. Yeah, be savage, yeah. So Vitalik called out the For Sage people, the people that just got charged with the SEC forever ago. And so, and then he got attacked, probably. This, I think this is a Chinese community, Chinese project, maybe, I don't know. Which is why I didn't really hear about it. But he said, he's alluding to how he got attacked by the For Sage community, probably. But now, now they're being charged with running a Ponzi scheme. So who's laughing in the end?

• 1:37:19Ryan Sean Adams?

  He said this about For Sage back in 2020. "Please leave and don't pollute the Ethereum ecosystem in the future." Thank you.

• 1:37:28Ryan Sean Adams?

  Very Vitalik thing to say. What do you think about this? Is it incumbent on the community to call out scammers more often? Well, one thing I struggle with about this, David, is sometimes the term scammer gets overused, right?

• 1:37:41David Hoffman?

  Right.

• 1:37:41Ryan Sean Adams?

  I think in this case, it was like very clearly a scammer. So maybe when something is very clearly kind of black, in the black category, and there's no gray about it, that's the time to pile on. But it was not clear to me, for example, if we start putting like Luna and Terra into that category, whether Luna and Terra was a complete scam at the time. I thought it was like a flawed mechanic and like a very risky, broken thing to invest into. And I didn't think it would work long term. But I can't necessarily call that a scam. I don't think that Vitalik is talking about that category of things, is he?

• 1:38:16David Hoffman?

  I think so. Like, it's definitely one of the things that I learned out of 2020 is that like my intuitions are better than I thought they were. And so like, you know, I got into that fight with Danny Sesta from Wonderland. And then like his army like descended on me and like made me put my tail between my legs because of like Twitter drama. And then, and then he blew up. And if I had been like, had a like, a little bit more like confidence and conviction, it's like, yo, this is not right. I might be would have said something. Same thing with Doquan, just repeated it. It's like, got attacked by Doquan, it's like, damn, their army's really loud. I don't really wanna, don't really wanna like pick my head up. And then boom, they blow up. And if I had a little bit more of just like, I don't really give a fuck about you, I'm gonna be proven right in the long term, then I think I would have gotten more credit than we did, even though we did like call out Terra, I think decently.

• 1:39:01David Hoffman?

  I think we could have done it better.

• 1:39:03Ryan Sean Adams?

  So maybe David's gonna lean into that a little bit more. I'm still probably gonna be a bit more conservative. Like, I think Vitalik's right for calling out something like this. But sometimes I am wrong, right? Like, sometimes it's not, like, the mechanic does actually work in the, in the long run. Anyway, I think there's time for me, at least me personally, like a period of skepticism before I start using the S-word. But then there are things that are very clearly scam. Like, for example, Celsius. Some people were saying Celsius was a scam. I just didn't have enough information to know whether it was or not, right? But like, turns out it was. I don't know, stuff like that, there's a lot in the gray area.

• 1:39:38David Hoffman?

  Celsius is a scam? I thought Celsius was just egregiously mismanaged.

• 1:39:42Ryan Sean Adams?

  I think, I think that verges on scam of like Alex Mashinsky calling himself a DeFi bank and then taking the funds.

• 1:39:49David Hoffman?

  Yeah, right, yes, calling himself DeFi and not a banker. Yeah, that makes sense. Yeah, yeah, yeah.

• 1:39:54Ryan Sean Adams?

  All right. What take from me? I say this, it's true. People don't care about decentralization. There's a lot of talk about that this week. A lot of talk about people not caring about decentralization. And I said, it's true. People don't care about decentralization. People don't care about decentralization until they get Mt. Goxed, or Suzued, or Do Quand, or Mashinsky'd. They don't care because they're new and haven't been screwed yet. Eventually, people care about decentralization. When I got into crypto, very beginning, I didn't care very much about decentralization. You know what I cared about, David? Number go up.

• 1:40:27David Hoffman?

  Number go up.

• 1:40:27Ryan Sean Adams?

  Like, it was like, I cared about other things. This idea of Bitcoin, you know, sovereign money. But I didn't understand the intricacies of like, why decentralization matters, until I started to see things in the crypto space. You know, read about the Mt. Gox, see kind of the centralization vectors. And I do think people start to care about it over time, but they don't start with that position as their default. They have to kind of learn it, sometimes by being in crypto for a period of time.

• 1:40:56David Hoffman?

  Of course, as one does.

• 1:40:58Ryan Sean Adams?

  That's my take. What's yours?

• 1:41:00David Hoffman?

  I think this was my take last week, but here's my take. The best thing that could ever happen to crypto? A fees-driven bull market, AKA a sustainable and rational bull market. Is that like too much to ask? Is a rational bull market?

• 1:41:14Ryan Sean Adams?

  Why is that more rational?

• 1:41:16David Hoffman?

  Because if it's fees-driven, it means it's revenue-driven. I mean, if it's revenue-driven, this is how we've been like, measuring assets since like, the beginning of time. It's fundamentals. It's asking for a fundamentals-driven bull market. Can we have one of those, please?

• 1:41:29Ryan Sean Adams?

  Real people are paying for the service, and it's actually providing real profit to the owners of the asset? Yeah, that would be pretty healthy. That'd feel pretty good.

• 1:41:38David Hoffman?

  I would like that.

• 1:41:39Ryan Sean Adams?

  You think we're gonna get it?

• 1:41:40David Hoffman?

  Can I have this, please? Is it that crazy?

• 1:41:43Ryan Sean Adams?

  David only wants one thing for Christmas.

• 1:41:45David Hoffman?

  A fee-driven bull market. Now, some people think it's cringe-rind that we read out our own tweets as takes of the week.

• 1:41:50Ryan Sean Adams?

  No, really?

• 1:41:52David Hoffman?

  Yeah, well, some people think it's great. Whatever we do is cringe.

• 1:41:55Ryan Sean Adams?

  I should, I should read out your tweets and you read out my tweets. Is that less cringe?

• 1:41:58David Hoffman?

  That's what we usually do, yeah.

• 1:41:59Ryan Sean Adams?

  And they're called takes of the week, so we have takes sometimes.

• 1:42:02David Hoffman?

  Yeah, I feel like we have good takes.

• 1:42:04Ryan Sean Adams?

  Sorry for the cringe, guys. Udi, I'm sorry for the cringe. David?

• 1:42:09David Hoffman?

  People don't know that metaphor.

• 1:42:10Ryan Sean Adams?

  What are you excited about this week?

• 1:42:12David Hoffman?

  I'm excited for tokens, Ryan. There's a bunch of tokens. This is my CoinGecko watch list. And so these are the tokens I'm currently looking at, and there's a bunch of them that are up bigly. Stakewise, up 107% in seven days. Optimism up 90%. Euler up 69%. Nice. Yearn, up 51%, again about fees. GMX, up 42%. I don't own any of that, but perhaps I should look into how much fees it's making, because it's making a bunch of fees. Rocketpool and Lido, both up 32 and 37%. Immutable X, a layer two, up 30%. Uniswap up 10%. I just feel like it's ETH maxi token season right now, and it's just making me feel really good. And there's like almost an oxymoron about ETH maxi token season, because like if you're an ETH maxi, then you only buy ETH.

• 1:42:56David Hoffman?

  But that's not exactly true, because if you're an ETH maxi quote unquote, then you also must believe in the tokens and the ecosystem. So when I see all of like these tokens that are heavily aligned with the Ethereum protocol going up, I'm like, nice.

• 1:43:07Ryan Sean Adams?

  Are you gonna, like, how much of these would you sell ETH for in order to get in, though? That's the harder part, right? Fiat's easy, but which of these are going to continue to go up in ETH-denominated terms?

• 1:43:17David Hoffman?

  It's always hard.

• 1:43:18Ryan Sean Adams?

  That's the hard part.

• 1:43:19David Hoffman?

  It's always hard. I don't know.

• 1:43:20Ryan Sean Adams?

  Whenever I get to that point, I'm like, I don't want to sell my ETH.

• 1:43:24David Hoffman?

  Ryan, what are you bullish on?

• 1:43:25Ryan Sean Adams?

  I am bullish on the Ethereum roadmap. So we obviously have, like, if you zoom out, we have the merge coming up, right? That's an economic upgrade, so we get 90% issuance reduction, more security. We talked about that. Our discussion with Palenia around EIP 4844 this past week made me excited about kind of the next upgrade of Ethereum. So first, we have an economic upgrade with the merge, but hopefully... Fingers crossed. The hard fork after that will get something like EIP 4844, which makes rollups 1,000x cheaper potentially. When you add all of the rollup compression techniques with EIP 4844,

• 1:44:08Ryan Sean Adams?

  you get 1,000x cheaper rollups. This according to Polenya. That's big. So we got first an economic upgrade.

• 1:44:16David Hoffman?

  That's a large number.

• 1:44:16Ryan Sean Adams?

  Yeah. And then we got a scalability upgrade. And then David, we just had a conversation with Stefan from Flashbots this week about MEV, that's maximum extractable value mitigations. And that is kicking in right after the merge. It's a long story, but Flashbots has a project called MEV Boost that all validators will use, that also generates more returns for anyone who uses it as a staker. But I'm actually really excited about the MEV protection that's going to be baked into Ethereum at the protocol level as well. This is called Protocol Builder Separation, PBS. And that is coming sometime after EIP 4844 in the future. All this to say, I've probably never been more excited about the Ethereum roadmap.

• 1:45:00Ryan Sean Adams?

  And the reason I'm most excited is because I feel like we finally got our shit together on it.

• 1:45:06David Hoffman?

  Like from an It's actually defined.

• 1:45:08Ryan Sean Adams?

  There was a while where like honestly Ethereum didn't have it together.

• 1:45:12David Hoffman?

  Right.

• 1:45:12Ryan Sean Adams?

  From a roadmap perspective.

• 1:45:13David Hoffman?

  I would say it was 20, late 2019 was when it finally came together.

• 1:45:16Ryan Sean Adams?

  Yeah, we didn't have like kind of the monetary policy was like, I don't know. We'll wait for proof of state. We have that figured out with the merge. Scalability? I don't know. Plasma, statios, what's it gonna be? No, now we have a path, rollup centric roadmap, EIP 4844, like that's within sight. How are we going to solve this MEV problem? MEV Boost, PBS, like the roadmap's looking good these days. I'm pretty bullish on it.

• 1:45:41David Hoffman?

  Yeah, it's looking good and it also makes like fundamental sense. Kind of like going back to like Kelvin Finchner was saying about the theoretical Like maximum, like there are things about the Ethereum roadmap, the design philosophy that is just like the theoretical best way to execute on that idea. And I don't have enough time to go into that right now, but I'll tease an article that I think is coming out next week, which is what you're alluding to, which is about the blockchain supply chain, as in like how a block becomes produced on Ethereum and where the value goes in that supply chain and how it ultimately always converges down to ETH stakers. And so I think we are bullish on the same thing, brother. All right, what's the meme of the week this week? What are we looking at? Meme of the week, meme of the week.

• 1:46:24David Hoffman?

  We are, this is a Top Gun poster, Top Gun Maverick, but instead we got Nancy Pelosi in his F-18 zooming her way to Taiwan. Why? For people who haven't been watching the news, what's the context for this? Yeah, Nancy Pelosi went to Taiwan of her own accord. Interestingly, after her husband bought a bunch of calls in Taiwan semiconductor businesses right before a bill went to Congress, so that's a different story. But then Nancy Pelosi, of her own accord, not as a part of her job as Secretary of State or whatever she is, Speaker of the House, decides to go to Taiwan and thoroughly pisses off China, who is now, as a result, doing military exercises in that region as well. So Nancy Pelosi just going rogue, Top Gun Maverick style,

• 1:47:08David Hoffman?

  getting herself into Taiwan and pissing off the two biggest superpowers or one of the biggest superpowers in the world. Nice job, Nancy. Well, the 2020s geopolitical tension, that's gonna be fun. I feel like we need to do an episode on that in the future. Guys, as always, it's been great to have you. Of course, crypto is risky, 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. 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.

• 1:47:49David Hoffman?

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