ROLLUP: EIP-1559 | Infrastructure Bill | CryptoPunks & NFTs | Bitcoin ETF | DyDx Token (August 6th)

1st Week of August 2021 ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: 💰 GEMINI | FIAT & CRYPTO EXCHANGE https://bankless.cc/go-gemini 🔀 BALANCER | EXCHANGE & POOL ASSETS https://bankless.cc/balancer 👻 AAVE | LEND & BORROW ASSETS https://bankless.cc/aave 🦄 UNISWAP | DECENTRALIZED FUNDING http://bankless.cc/uniswap ------ 📣 PoolTogether | Break up with your Lottery! https://bankless.cc/PoolTogether ------ Topics Covered: 0:00 Intro 1:56 MARKETS 2:08 BTC Price 2:27 ETH Price 3:28 ETH/BTC Ratio 4:24 DeFi Action 6:27 EIP 1559 https://ultrasound.money/ 11:44 Ultra Sound Block https://twitter.com/AlexanderFisher/status/1423277318773088257 13:14 1559 Wallets https://metamask.io/1559.html 15:26 Going Mainstream https://twitter.com/TrustlessState/status/1423293814312108039?s=20 16:05 Uniswap Burning https://twitter.com/haydenzadams/status/1423292792617402371?s=21 19:09 221M Crypto Users https://twitter.com/RyanSAdams/status/1421108123016830982?s=20 21:16 OpenSea Volume https://twitter.com/dfinzer/status/1422016457290956800?s=21 22:29 DeFi Addresses https://decrypt.co/77593/ethereum-addresses-using-defi-rose-65-last-quarter 24:45 RELEASES 25:13 Starkware & SoRare https://medium.com/sorare/were-live-on-our-scaling-solution-starkware-62438abee9a8 25:54 Thales https://thalesmarket.medium.com/the-day-has-come-thales-dapp-launches-on-ethereum-mainnet-366b98ed0c71 26:21 DyDx Token https://newsletter.banklesshq.com/p/-alpha-alert-dydx-retroactive-drop Sad Meme: https://twitter.com/monetsupply/status/1422745261986631682?s=21 29:10 Bitwise UNI & Aave Funds https://www.bitwiseinvestments.com/resources/press-releases/bitwise-asset-management-expands-defi-suite-with-launch-of-the-worlds-first-uniswap-and-aave-funds 29:58 Argent Layer 2 Waitlist https://twitter.com/argentHQ/status/1422262937423597571 31:09 Rocket Pool Testnet https://medium.com/rocket-pool/rocket-pool-prater-testnet-guides-2428ecdc565e 31:32 ETH Modeler https://www.ethmodel.io/ 32:12 Diversifi Polygon Bridge https://twitter.com/deversifi/status/1422596299216543746 32:46 RAISES Messari: https://twitter.com/DelRayMan/status/1423284038811492372?s=19 Point72: https://markets.businessinsider.com/news/currencies/steve-cohen-point72-hire-boss-head-digital-asset-crypto-jobs-2021-7 Sense Finance: https://medium.com/sensefinance/sense-finance-raises-5-2m-to-add-a-new-dimension-to-defi-bbccb508d271 Krystal: https://www.theblockcrypto.com/post/113483/defi-platform-krystal-crypto-seed-funding 34:51 Jobs https://bankless.cc/jobs 35:27 NEWS 35:37 Trustless ETH Staking https://blog.lido.fi/the-road-to-trustless-ethereum-staking/ 38:05 Zcash Proof of Stake? https://twitter.com/zooko/status/1422575010221199361?s=20 39:53 Punk Pump https://decrypt.co/77392/cryptopunk-prices-rise-53-in-week-after-ethereum-whales-feeding-frenzy 43:28 Polygon & Knicks https://twitter.com/mihailobjelic/status/1421535583856439298?s=21 43:57 Treeverse https://twitter.com/TheTreeverse/status/1423047756667629578 43:30 Infrastructure Bill https://twitter.com/jchervinsky/status/1421150344051048451 Amendment: https://twitter.com/jerrybrito/status/1422974253876580355?s=20 Do your part: https://www.fightforthefuture.org/actions/stop-the-senate-from-sneaking-through-total-surveillance-of-the-crypto-economy/ Bailout: https://twitter.com/RyanSAdams/status/1423097584034402308?s=20 55:00 Gary Gensler Speech https://www.sec.gov/news/public-statement/gensler-aspen-security-forum-2021-08-03#_ftn10 Nic Carter: https://twitter.com/nic__carter/status/1422602420119556098?s=20 Positives: https://twitter.com/prestonjbyrne/status/1422602012060004356?s=20 ETF: https://www.bloomberg.com/news/articles/2021-08-03/sec-s-gensler-signals-pathway-for-a-bitcoin-etf-with-tough-rules 1:04:09 China Pressure https://shows.banklesshq.com/p/-early-access-chinas-digital-currency 1:07:30 Drive-By’s Wealthfront: https://www.thestreet.com/crypto/news/wealthfront-adds-grayscales-bitcoin-and-ethereum-trusts-for-clients Spagni: https://cointelegraph.com/news/monero-s-former-maintainer-arrested-in-u-s-for-allegations-unrelated-to-cryptocurrency 1:09:00 TAKES 1:11:00 Maxi’s Coping https://twitter.com/econoar/status/1423143520781553668?s=20 1:15:00 Talking Crypto Daily https://twitter.com/jdorman81/status/1418253693829357572?s=20 1:15:56 Binance Squeeze Bullish DeFi https://twitter.com/iamjosephyoung/status/1421058386704035840 1:16:54 America’s Biggest Export https://twitter.com/RealNatashaChe/status/1422270993498705921 1:18:33 EIP-1559 Ju-jitsu https://twitter.com/RyanSAdams/status/1422920975600037888?s=20 1:21:22 Success is a Muscle https://twitter.com/hasufl/status/1423295802705735686?s=20 1:22:48 What David’s Excited About 1:24:49 What Ryan’s Excited About 1:27:28 The Merge 1:28:28 Meme of the Week 1:30:25 Closing & Disclaimers

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

• 0:07Ryan Sean Adams?

  Hey Bankless Nation, happy Friday to you. It is the first week of August. David, it's roll up time. This is the EIP 1559 edition, 1559, 1559. However you say it, it is the day that we have deployed EIP 1559. Actually, we will have deployed it one day after you guys are listening to this. David, that's pretty exciting, dude. I'm pumped.

• 0:30David Hoffman?

  There is so much to talk about, and so I'm going to try and refrain from talking about it right now. But it is, has been a long time coming, and the fact that EIP 1559 is here and we have things to talk about, that it's actually live is just absolutely stellar, and I'm really stoked to get into the weekly roll up this week.

• 0:49Ryan Sean Adams?

  Okay, yeah, do not drink a swig of coffee every time you hear EIP 1559, or you will be coffee drunk by the end of this episode.

• 0:56David Hoffman?

  Before we get into the show, we gotta talk about pool together, because it is summertime and it's all time to get into the pool. If you don't know Pool Together, it is a no loss lottery, which means you put your stable coins, your comp tokens, whatever tokens that Pool Together accepts into a pool, and then you have a chance to win the accrued interest that accrues weekly from everyone's collective funds. So you don't lose your principal, you might lose your opportunity cost of money, but you also might win everyone else's interest as well. It's a fun no loss lottery on Ethereum. Every single week, roughly $50,000 to $60,000 gets awarded in USDC, and that is just the USDC pool. There is usually a drawing every single day of the week.

• 1:38David Hoffman?

  They have also recently deployed their Polygon implementation, where you can deposit TUSD tether into the Polygon Pool Together pool. And they are also rolling out their L2s coming soon in the future. So check them out. There's a link in the show notes, so you can have fun in the pool.

• 1:56Ryan Sean Adams?

  That's a lot of pool time, guys. This is, if you haven't yet tried many DeFi apps, this is one to try and tell your friends. Super easy to use, and you can't lose. It's a lot of you can't lose. So check that out, guys. All right, David, you ready to get into Bitcoin markets, my friend?

• 2:11David Hoffman?

  Yeah, let's do it. Bitcoin is down on the week, starting at the high prices of roughly $42,000, touch the low price of just below $38,000, to where we are currently at right now at $39,300 for one Bitcoin.

• 2:27Ryan Sean Adams?

  All right, let's talk about ETH price.

• 2:30David Hoffman?

  ETH price doing a little bit of the opposite, started right around $2,500 on the week, and that was roughly about the low, and it is currently at the high price of roughly $2,800. Feels like it's pumping on the news of EIP1559 finally going live, which is always kind of funny to me, because there's no way you've been able to pay attention to Ethereum without understanding EIP1559. We talk about it all the time, and now it's live, and now people are buying?

• 2:58Ryan Sean Adams?

  Yeah, it's just like, yeah, why did you wait so long? Like, people who just bought ETH after EIP1559, like, why?

• 3:07David Hoffman?

  Right.

• 3:07Ryan Sean Adams?

  Why did they wait? Do you think there's some worry that maybe it wouldn't ship? Maybe the hard fork wouldn't go right?

• 3:13David Hoffman?

  I have no clue, man, but, I mean, I know I wasn't waiting, so.

• 3:18Ryan Sean Adams?

  We knew this was coming, guys. We also know the merge is coming on the horizon, too, so that'll be another catalyst in the future. We'll get to a bit more of that later, but let's review some more metrics. So ETH Bitcoin ratio, how's the ETH ratio doing?

• 3:31David Hoffman?

  Yeah, listeners will remember last week that we talked about how there was a descending wedge, if you want to use, again, trader terminology, which I'm not very good at using trader terminology, but I'm gonna do it anyways. There was a descending wedge that Ether looked like it broke out of versus Bitcoin, and turns out that that continuation just happened even further this week. Ether is above 0.07 ETH per BTC at the price of 0.0712, looking really, really strong. And there's a lot of traders, and I know a lot of people, that are looking at the ETH BTC ratio, looking like, oh, man, it just looks like it's going to resume going higher versus Bitcoin, back to the highs of maybe 0.1 ETH per BTC, just speculation here, but ETH BTC looking really strong,

• 4:16David Hoffman?

  as you would expect during EIP1559 week.

• 4:19Ryan Sean Adams?

  Yeah, also not surprising, given these ETH tailwinds, right? These ETH catalysts. Let's talk about total value locked in DeFi. That is also up on the week. I remember hanging in the 50 to 60 billion range. Now we're at 70 billion.

• 4:33David Hoffman?

  Yeah, that is the theme of markets this week, at least on the Ethereum side of things, is up. It's really nice to see that 7 number, leading a total locked value back in DeFi. I remember, I think the peak that we set back in May was just around 90 billion locked in DeFi. We are back up to 70 billion locked in DeFi.

• 4:52Ryan Sean Adams?

  All right, let's take a look at the DPIs. This is the DeFi Pulse Index. This tracks some of the top DeFi tokens in crypto. To give you a sense of that, we are up on the week as well, David.

• 5:03David Hoffman?

  18% on the week, 18% green for DPI at the price of $362, which is the local high for the week. So congratulations to DPI holders.

• 5:15Ryan Sean Adams?

  Okay, well, it seems to be ETH season over Bitcoin season. That's what that ratio is telling us. But is it DeFi season, David? What are we looking at? Oh, are we below your amount? We're below your number.

• 5:25David Hoffman?

  Yeah, I mean, horseshoes, hand grenades, like, we're around my number. We are currently at 0.128 ETH DPI ratio, which means that it is ETH season, not necessarily DeFi season.

• 5:39Ryan Sean Adams?

  I'm okay with that. Give DeFi a breather for a bit. Okay, let's talk about the Bed Index. So the Bed Index, of course, composes all of these assets together. You get 1/3 Bitcoin, 1/3 ETH, 1/3 DPI, all in one token that you have to hold. That is up on the week because all three of those assets are up on the week. Where are we right now?

• 5:58David Hoffman?

  We are up 10% on the week. Bed started at $113 and we are currently at $130. So that is the summary of the crypto markets at large, up 10% on the week. Again, the Bed Index, the best DeFi crypto index that there ever will be, I'm pretty sure.

• 6:18Ryan Sean Adams?

  Tell your friends, guys. Easiest way to get exposure to crypto, at least the premium assets, at least the assets you want to be part of on the bankless journey. David, let's talk, man. EIP.

• 6:30David Hoffman?

  What do you want to talk about, Ryan?

• 6:31Ryan Sean Adams?

  Look.

• 6:33David Hoffman?

  Do we have something to talk about?

• 6:35Ryan Sean Adams?

  I know you flew all the way to San Diego last night, but you woke up early in the morning to be available for this. It was like, what, 5 o'clock your time?

• 6:43David Hoffman?

  Yeah, I woke up at 4:30 because Eric Connor and Anthony Cisano was like, why isn't the Zoom up yet? I'm like, God, it's an hour before the fork. I guess they were really excited to get the livestream up and running. Yeah.

• 6:55Ryan Sean Adams?

  Kids in front of the Christmas tree, just like waiting for Santa to come down the chimney. I mean, they were really excited about this. But we're excited too. So EIP 1559 got deployed today as part of the London Hard Fork for Ethereum. This is a massive event. There are a slew of other feature updates in that, but EIP 1559 was the one we've all been waiting for. That means a number of things, but one thing it definitely means is we are burning ETH. Effective 8:30 or so Eastern time this morning, we have started burning ETH and we will continue to burn ETH until maybe the end of the Ethereum network. Like this is going to last into the the feature upgrades and it's going to be, it has become a core part of the protocol.

• 7:39Ryan Sean Adams?

  And David, there are so many like dashboards where you can see ETH getting burnt in real time that I've become addicted to these things. So like, here's one, etherchain.org/burn. You'd see, look, man, eight, almost 800 ETH burnt.

• 7:55David Hoffman?

  We are only like four and a half hours into this. 800 ETH in four and a half hours.

• 8:02Ryan Sean Adams?

  Burnt, gone. And remind folks, why is ETH getting burnt? And people are asking the question like, that seems weird. Why are you burning ETH? Are you like wasting it? Like, why is this a good thing? Why are you so excited about burning money?

• 8:14David Hoffman?

  Yeah. So here is like a kind of a 400 level bankless content take is that if you listen to our podcast with Vitalik Buterin on legitimacy, the same reason why Bitcoin has a shelling point of zero issuance and a hard cap is the same reason why we burn ETH. It is just the best default option because if we didn't burn ETH, then we would have to figure out where we should send it to.

• 8:38Ryan Sean Adams?

  Who gets it?

• 8:38David Hoffman?

  Who gets it? And that is a very heavy political decision that bestows a kingmaker. Like, that's a kingmaker decision, like who gets the ETH? And so instead of just like deciding who should get all of this ETH, which is a ton of money, or like $3 billion or $3 million every like four hours or so, it's just easiest to say that no one gets it.

• 8:59Ryan Sean Adams?

  Or everyone gets it.

• 9:00David Hoffman?

  Or everyone gets it, right? Because if no one gets it, then everyone gets it, right? And everyone, I mean, like ETH holders, which is one of the benefits of holding ETH. So EIP 1559 changes the way that we allocate. ETH when you pay for a transaction. You used to pay for a transaction and that money used to go to miners. And now instead, because we have decided that EIP 1559 is a stronger security mechanism and an overall UX upgrade for Ethereum, we've decided that the best thing that we should do is we should burn that ETH and not give it to anyone. And if you want to dive deeper into the subject, definitely listen to our podcast with Hazu, EIP 1559. And that will go into further depth as to why we burn ETH. And when you, Ryan, you and I talked

• 9:43David Hoffman?

  about this like multiple years ago, we really just framed it in a conversation of the last puzzle piece, the last really important component of Ethereum's monetary policy. It makes Ethereum more secure. It makes Ether more valuable. It's just overall a net beneficial change. And now it's finally live. In the time that I have been ranting, we have burned nine more ETH. The ticker just went up from 799 to 808. Now it's at 810. That is a lot. We burned $5,000 in the time that listeners listen to this.

• 10:15Ryan Sean Adams?

  All right, David, remind me, we got to check it again at the end of this episode. Or maybe continuously throughout the episode. I don't know. We will have people every five minutes. Like, there's so many places you can, you can look at this burn rate. This is probably my favorite, David, ultrasound.money. Go check this out. Like, fantastic memory around this. Ultrasound Money not only has the ETH cumulative ETH burn rate, but also has a burn leaderboard. So we see like, some of these NFT platforms are burning the most ETH, right?

• 10:43David Hoffman?

  OpenSea. How crazy is that?

• 10:44Ryan Sean Adams?

  Yeah.

• 10:45David Hoffman?

  NFT is burning more ETH than DeFi. Not cumulatively, but just as OpenSea is burning more ETH than Uniswap. Like, cool.

• 10:52Ryan Sean Adams?

  I'm less mad about high gas fees from NFT launches now. I'm a lot less mad about that. I might be okay with it. You can also see it on, of course, your favorite Block Explorer, like EtherScan, for example. And this is cool because you can dig into the actual block, David. You're pulling it up here. And you could see the block reward, of course, that is issuance. But then you see the amount of ETH burnt on this block, which is super cool. Nice breakdown for you.

• 11:16David Hoffman?

  And there's so many new metrics in the Block Explorer now. And this is kind of front running what I'm going to say later in the episode with what I'm excited about. But there's new things to look at, which means more things to talk about, which makes me so excited.

• 11:28Ryan Sean Adams?

  More numbers, more metrics, more it's of course, it's open and available to anyone. I think Micah put together a fantastic dashboard on Dune Analytics where you can see ETH burnt per block, base fees over time, all of this is open and available. So check that out. They'll be in the show notes and this is cool too, David, we just, we had this morning, our first deflationary Ethereum block. You might say our first ultrasound.

• 11:53David Hoffman?

  Ultrasound.

• 11:54Ryan Sean Adams?

  Ethereum block because while we issue just over two ETH or so every block, according to the protocol.

• 12:01David Hoffman?

  Exactly.

• 12:02Ryan Sean Adams?

  Exactly two ETH, that generally goes to miners. We burnt more than we issued in this particular block. So like the amount burnt per block will fluctuate based on kind of the, you know, the formula algorithm that's set up in EIP 1559. This particular block, I'm not going to say the number 12 million something. You guys can look it up yourselves, but there was a ETH burnt of 2.078 and ETH block reward, of course, of two. So the net is actually deflationary in that block. Now, that's not to say Ethereum as a whole is deflationary right now because it's not. It's, it seems like we're issuing, like we're probably burning, what would you say?

• 12:44Ryan Sean Adams?

  25 or 30% of proof of work issuance.

• 12:48David Hoffman?

  I'd say that's a good estimation. I think there's a lot of like settling that needs to happen. Like we are still kind of in this period of a little bit of chaos because like miners still have to update, like wallets still need to update.

• 13:02Ryan Sean Adams?

  Hasn't shaken out yet.

• 13:02David Hoffman?

  Yeah, so we are still settling. We are washing this play out in real time. And that's going to be one of the fun things about the next week is seeing where things settle, seeing how full blocks become, seeing miners get on board, seeing wallets get on board. Because something to talk about is that there's actually two transaction types now. There's the legacy transaction types and then there's EIP 1559 transaction types. Both types burn ETH, but one is just a little bit better for the user. One of one's a little bit easier. And so it's really up to wallets to update how they allow transactions to occur on Ethereum. And they should update to the EIP 1559 over time because that's beneficial to the users. MetaMask is now updated. MyCrypto is now updated. So people are doing this pretty quickly, but it's going to take at least a few days for everyone to get on board and synced up with EIP 1559.

• 13:47Ryan Sean Adams?

  Yeah, absolutely. And so the net of that is Ethereum is not net deflationary at this moment, but it is more deflationary. So we are burning a, you know, maybe 25%, 30%. As David said, this will take a while to pan out. But post-merge, it's sure looking like things are going to be deflationary when that happens. That merge we're referring to is when proof of work gets fully turned off, that 4% or so issuance per year goes to zero. That's going to happen. A fly just buzzed my head, David. Anyway, you were talking about wallets. So for the typical user, right? This is all backwards compatible. So if you're using MetaMask and it has not updated, then you can just send a transaction the way you always have.

• 14:28David Hoffman?

  No change.

• 14:29Ryan Sean Adams?

  Yep, no change. It might be a bit more expensive relative to using the new transaction that David was mentioning. But once MetaMask rolls out, they've got a fantastic EIP 1559 helper page to show you how to set transaction priority. It's actually, I think it's going to be more intuitive and easier to use if you're doing that second transaction type, the EIP 1559 transaction.

• 14:53David Hoffman?

  Have you made a transaction yet on Ethereum, Ryan?

• 14:55Ryan Sean Adams?

  I haven't.

• 14:56David Hoffman?

  Oh, God. It's like this pseudo, like, speed update. It actually feels faster just because like your transaction gets included into the next block by, almost by default. So like, it's not faster, but it feels like it is, which is kind of actually the more important part.

• 15:11Ryan Sean Adams?

  Yeah, that's awesome. And like, gas fees aren't going down as a result, right? Like, this is not a improvement in, probably in terms of gas fees. There's some intricacies there that we don't have time to touch.

• 15:22David Hoffman?

  Again, listen to the HAZU EIP 1559 episode with Bankless.

• 15:25Ryan Sean Adams?

  Yeah, absolutely. But you noticed this, David.

• 15:28David Hoffman?

  Yeah, and well, you can actually see it twice. You can see it on the lower right-hand side of the screen as well. EIP 1559 is straight up trending on Twitter. Again, like, think about that for a second.

• 15:39Ryan Sean Adams?

  That's hot.

• 15:39David Hoffman?

  Ethereum improvement proposal to this random esoteric, little-known piece of like, internet corner, which is going to be larger in the future, is trending on Twitter. EIP 1559 is on the front page of the internet. That is absolutely crazy.

• 15:55Ryan Sean Adams?

  Yeah, that's really cool and such a yeah, strange esoteric name like what is EIP 1559? But that's the question they should be asking right now. David, let's get this take from Hayden Adams.

• 16:07David Hoffman?

  Yeah, Hayden tweets out, "It has been two hours since the launch of EIP 1559," and he tweeted this out a few hours ago. And he says, "Uniswap, both V2 and V3, is doing its part, burning 80 ETH so far." Again, these numbers are already outdated. "At this rate, Uniswap alone is burning 350,000 ETH, close to $1 billion worth per year." And then he says, "Congratulations to everyone who made EIP 1559 happen. Huge win for Ethereum." And great tweet, great piece of content, but also what I want listeners to take note of is this is just Uniswap. Just Uniswap is burning 350,000 ETH per year. Just reminder, there's roughly around 115,000

• 16:52David Hoffman?

  or 115 million ETH total, and just Uniswap is burning a little bit over 1/3 of a million ETH per year. That's just Uniswap. And so like, imagine when there's just more applications. Imagine all the other applications. Imagine the applications into the future. Imagine the killer apps that we haven't even thought about yet. Imagine when like, completely trustless, like, Composable Oracles comes online and we can get any data from the world onto Ethereum. Think about that, because imagine how much ETH we will be burning at that point in time. It will be a large number.

• 17:25Ryan Sean Adams?

  I'm thinking about it. You know what? And this is absolutely a massive upgrade to Ethereum's monetary policy. And it's kind of the conclusion of a lot of work that a lot of people have been like, put in over time. I just want to give a special bankless shout out and thank you to all of the developers in the Ethereum community, coordinators, you know, even some of the people who are sharing the gospel and spreading the news of this and garnering community support. This community are the people who made this happen. And it's like hard to get work done, in a way, in a decentralized community. It's also better, easier, in some other ways. And the fact that the Ethereum community pulled this off. Is is pretty phenomenal, pretty exciting. I mean, this is a live network, right?

• 18:09Ryan Sean Adams?

  Like a $250 billion network. And this is a pretty major economic upgrade to it. And it took like years of, literally years of research to to come to this point. And a ton of work went in. So thanks to the community, thanks to the devs that made this possible. Thanks to the researchers. We did it. We did it, fam.

• 18:28David Hoffman?

  Did it, fam. The Ethereum upgrade, EIP1559 upgrade. It feels like we are having this $250 billion jet that we upgraded the engines on while in flight. And so like, that's kind of the degree of complication. And that's also the degree of the skills of the developers that we have in this community. So just like Ryan said, thank you for everyone who played a part in getting this out the door. The world is literally better for it. I will make that argument.

• 18:54Ryan Sean Adams?

  Yeah, that's super cool. As by the time when the time we started talking about this, let's see how much ether we burnt.

• 19:01David Hoffman?

  55 more ether since the last time we brought it up in conversation. Let's just keep on doing that every few minutes.

• 19:07Ryan Sean Adams?

  There you go. There you go. All right, guys, moving on from EIP1559, which is hard to do. So we're very excited about it.

• 19:13David Hoffman?

  We'll be back.

• 19:14Ryan Sean Adams?

  Do this. We'll be back. 221 million crypto users. All right, that's how many crypto users we have. This is according to a study put out by crypto.com. Kind of charts crypto users over time, the market size. Of course, this, these are all estimates. No one could tell for sure. Not sure the exact, you know, methodology they used for this. But it feels ballpark. It feels about right. And that's an absolutely massive amount of crypto users. Now, we say users, that's super broad. We're talking about anybody who has ever purchased a crypto asset. This is not DeFi users. These are not people who even necessarily know what they bought.

• 19:54Ryan Sean Adams?

  But these are people who have interacted with, maybe purchased a crypto asset, possibly done something more. It's not just a fad. 221 million, that is starting to become critical mass. This is moving from like early adopters, like the very early stage adopters to kind of this, this, you know.

• 20:12David Hoffman?

  Mid-stage adopters.

• 20:13Ryan Sean Adams?

  Mid-stage adopters. Range.

• 20:15David Hoffman?

  Yeah, 220, 221 million is not a low number. This, like you said, this has got to be like the lowest threshold for what is considered a crypto user, right? So if you like bought $20 worth of Bitcoin on Coinbase and then, and then you left it and didn't do anything, you're a crypto user, I'm guessing. I would like to know more methodology about how crypto, crypto.com came about these numbers. Maybe, maybe on the website, they have more details. The other important point to make out is that this is in June 2021. And in January 2021, just six months ago, it was 106 million users. So we have more than doubled the entire, like entire user base of this entire industry in just six months. And so that kind of illustrates kind of how crypto moves in waves.

• 20:57David Hoffman?

  Like it moves in, it moves in step functions, like, like nothing will happen for two years and then all of a sudden it's an order of magnitude better, more order of magnitude, more users. And Ryan, 221 million users, that's a lot of people that can go and make transactions on Ethereum and burn ETH with EIP1559.

• 21:15Ryan Sean Adams?

  That's right.

• 21:17Ryan Sean Adams?

  All right, let's talk about OpenSea. Speaking of more burning of ETH, OpenSea, which is one of the top in the ETH burn charts right now, they, they did, this is a tweet from Devin Finser, who's been on the podcast before. In 2020, OpenSea did about 21 million in total transaction volume. That's the total for the year. In the last two days, he's tweeting this August 1st, we did 95 million. Two days, 95 million. It, in an entire year in 2020, they only did 21 million. The growth curve for NFTs is insane. Yeah, it is insane. Absolutely going bonkers and OpenSea is crushing it.

• 21:57David Hoffman?

  Yeah, no wonder OpenSea had that monster raise not too long ago. NFTs are definitely hot. Turns out the bear market was, this was what I wrote in the Market Monday this week. Turns out the NFT bear market was just a meme and it turns out it was an NFT land grab opportunity for the people that believed in it. And then the market realized it all, like all in the last like two days that Devin was talking about. Sadly, those two days where OpenSea had such insane amount of volume was before EIP1559, so we didn't burn that ETH. But all future volume going through OpenSea will indeed burn more ETH.

• 22:29Ryan Sean Adams?

  Look at this. This is worth a quick gander to. Ethereum addresses using DeFi rose 65% last quarter. So more ETH addresses going Bankless using DeFi up into the

• 22:40David Hoffman?

  Burning ETH. Wait, is that not what you're gonna say? Oh, okay.

• 22:43Ryan Sean Adams?

  No, no. All right, guys, we will be back with some more Burning ETH talk. But before we do, we want to thank the sponsors that made this episode possible.

• 22:52David Hoffman?

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

• 23:36David Hoffman?

  Just look at the size of the Uniswap Treasury. It's almost $3 billion. This mountain of capital is looking for labor. Do you have something of value to contribute to the Uniswap DAO? No matter how big or small your idea is, you can apply for a UniGrant at unigrants.org and help steer Uniswap in the direction that you think it should go. That's exactly what we did to get Uniswap to be a sponsor for Bankless and you can do the same for your project. Thank you, Uniswap, for sponsoring Bankless. The AVE protocol is a decentralized liquidity protocol on Ethereum, which allows users to supply and borrow certain crypto assets. AVE version 2 has a ton of cool features that makes using the AVE protocol even more powerful.

• 24:19David Hoffman?

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

• 25:03David Hoffman?

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

• 25:14Ryan Sean Adams?

  Hey guys, we are back with the releases. Dave, there's so much to talk about. We still have some EIP 1559 to cover, but we want to get to regulatory. So we're going to burn through some of these releases and get to the regulatory section, get to the news. The first is this, Starkware and SoRare are teaming up. They are releasing the SoRare scalability solution on Starkware. So SoRare is another NFT project for soccer, football in Europe, and it's been doing super well. It's good to see them deploying on Layer 2 with Starkware as their scalability tech.

• 25:47David Hoffman?

  Layer 2 summer continues, and so does NFT summer. So awesome. Let's keep going.

• 25:53Ryan Sean Adams?

  Yeah, absolutely.

• 25:54David Hoffman?

  Brand new Ethereum application now on mainnet, Thales. A binary options trading platform has deployed. It's got a seed investment from Synthetix, so communities seeding other communities. So that's pretty cool. There's a lot to talk about there, but unfortunately we don't have the time. If you're interested in binary options trading, go to Thales, T-H-A-L-E-S dot market and see what it's like. I have not tried this out yet, so if you are a binary options trader, ping us on Twitter and let us know what you think.

• 26:21Ryan Sean Adams?

  Guys, speaking of the Synthetix world, the derivatives world, DYDX just dropped their token this week. So this is a governance token for DYDX. David, we've written tactics about DYDX a number of times, most recently when they deployed their Layer 2 technology. I think that was like April or May or so. And the good news is they're doing a retrospective airdrop. So if you have ever used DYDX, you might be eligible. We actually put out what we call an alpha alert to Bankless Premium subscribers on the newsletter with all of the details of this retroactive airdrop, what it includes. You can also find some of this information on the DYDX website. Again, you're eligible if you paid fees.

• 27:04Ryan Sean Adams?

  D Y D X and then you have to use layer two. It looks like they are also receiving some bumps in adoption. Post governance, post governance token launch. So this again, this is a story of kind of the, the previous DeFi summer when the comp token launched and comp usage went off the charts. This is now also happening with D Y D X. So go check that out. You might be eligible for that retrospective airdrop. There's also, there's also future ways to earn D Y D X token. If you are a liquidity provider and some other things, so make sure to check that out.

• 27:38David Hoffman?

  Here's a quick bankless self chill. We told you this was going to happen like six months ago. So shout out to the guys in the bankless discord who said that they started using D Y D X. When we, when we guessed that D Y D X is going to listen airdrop and they got the airdrop because of that. So sometimes listening to the bankless weekly roll up gives you alpha.

• 27:57Ryan Sean Adams?

  David, one sad part for residents of the U S is that residents of the U S are not eligible for this retrospective airdrop. So this is Jake Travinsky saying, I feel so safe and protected in response to Anthony Sisano saying the U S investors are missing out on this airdrop because of stupid regulations. David, this doesn't feel great that the S E C is protecting U S investors from free money. I mean, they're definitely here to, to prevent scams and to help make sure that markets are transparent. This does not feel like those, either of those two objectives.

• 28:33David Hoffman?

  No, that's, that's exactly right. U S investors are people just like the rest of the world. I was a previous user of D Y D X before they implemented the, the I P ban. So I did not get my D Y D X tokens, which I feel like I should have gotten because like I said, I'm a user, but I'm glad other people were able to get the tokens. D Y D X unfortunately, but also fortunately for them, did a very good meticulous job of tracking I P addresses and linking that to Ethereum addresses. And so if your Ethereum address was associated with the U S I P address, you did not get the airdrop and you can thank the S E C for that one.

• 29:09Ryan Sean Adams?

  There you go. In other news, Bitwise has just launched two new DeFi funds, one for Uniswap, one for Aave. So investors who are accredited investors, because of course, Bitwise is kind of this bridge from old finance to DeFi. They can invest in these assets without having MetaMask, without taking self custody. Sort of an easy way to do this through kind of brokerage accounts in traditional finance. Great to see Bitwise investing further and expanding further in the DeFi space and giving more exposure to traditional investors there.

• 29:39David Hoffman?

  Yeah, basically, this is just a wrapper around Aave and uni tokens, making them available to accredited investors in the TradFi world. It's progress, I guess, but again, limited and hampered by regulations. So we're going to have to, we're going to be talking about regulation here in a second, Ryan, soon.

• 29:55Ryan Sean Adams?

  Yeah, I feel like we got some axes to grind here. Okay. Argent, though, this is great news. Argent, one of our favorite smart contract wallets, they are now going to Layer 2. This has been probably the biggest feature, this UX problem with, with Argent Wallet, smart contracts wallets in general, is high gas prices. Well, no longer. Right now, they have a Layer 2 waitlist. You can enter that. They've got prizes, almost 300K in crypto sweepstakes to celebrate. So it's not out yet, but you can enter that waitlist. And I can't wait to see what they have in store. I'm pretty excited about this one.

• 30:29David Hoffman?

  Yeah. Also, definitely go listen to Vitalik's smart contract wallets on Layer 2. That was a fantastic episode about why specifically Layer 2 is very good for enabling smart contract wallets. I was a heavy user of Argent Wallet when, back in the early days. But as soon as gas fees on Ethereum stopped being one guay, and for the Ethereum newcomers, like it used to be one guay, which is kind of insane now. The Argent worked pretty well. Like, gas fees were basically nothing and you didn't have to wait too long. But now, gas fees with Argent are really expensive and the transactions take a really long time. This is something that really needs Layer 2 to work. So I'm really excited to see what Argent on Layer 2 is like.

• 31:08Ryan Sean Adams?

  I'm going to keep us moving, David. Rocketpool is going to testnet, which is super exciting. A new decentralized staking protocol, Rocketpool, going to testnet on August 2. I hope they can keep shipping. There are a lot of, I think, staking organizations that have come up and deployed solutions ahead of them. We've been super excited about Rocketpool because of their focus on decentralization. It's good to see them progress to testnet. David, you want to talk about this? This is a new ETH modeler, like a wrist modeler of some sort? What is this?

• 31:38David Hoffman?

  Yeah, this is an ETH supply simulator, a little bit like ultrasound dot money, but just a few more things to tinker with, a nice little graph. And so you can change the validator, how many validators there are, you can change when the proof of stake activation comes, you can change the gas fee, and then it will model out the future supply of ETH for you. So don't let anyone tell you that you can't predict the future supply of ETH. It is capable of being done, and you can also see how low that number goes, which is where I get excited.

• 32:08Ryan Sean Adams?

  Yeah, you can model this based on your own assumptions, whatever those are. Also, cool, David, in continuation of Layer 2 summer, Diversify, which is a decentralized exchange, is now bridging directly to Polygon, which is super cool to see.

• 32:24David Hoffman?

  Remember Ethereum is an economic nexus. We have the main chain, we got Layer 2s, we got sidechains. All those things are going to interconnect with each other in different ways. And so this is one of those many bridges that just got built. You can now go straight from Polygon to Diversify without even touching Ethereum. And so no longer can you say that gas prices are an issue, because you can just go to the L2 and stay there.

• 32:45Ryan Sean Adams?

  Absolutely. Guys, David, let's get to raises. So this just in Messari, which is a crypto media company, crypto analysis company, just launched, just released information about their 21 million Series A funding, which is cool in and of itself. It's also cool is that another billionaire has joined the banks, is investing in that Series A, Steve Cohen. So you might know him from 0.72, a large kind of crypto capital, or sorry, a large traditional capital firm.

• 33:17Ryan Sean Adams?

  In July, there was news released that point 72 is hunting for a crypto chief after saying it would be remiss to ignore digital assets. So it's a link there, too. Again, this is the story of traditional finance billionaires starting to get into crypto and deploy capital there, not just in the assets themselves, but in some of the infrastructure companies, in this case, in Messaries. It's kind of cool to see. Another DeFi protocol, Sense Finance, announced their raise of $5.2 million. They're saying to add a new dimension to DeFi. So this is essentially creating fixed income types of markets. So similar to Element Finance, if you're familiar with that, Sense has a kind

• 33:58Ryan Sean Adams?

  of a different take on it, but also building out that fixed income primitive. It's super exciting to see. David, you want to talk about Crystal? This is a DeFi platform that raised 6.1 million. What are they up to?

• 34:11David Hoffman?

  Yeah, this is Crystal out of Kyber. So Kyber moving out of just being the liquidity provider to Ethereum to also being a kind of a DeFi dashboard. We've seen a bunch of emergencies of new DeFi dashboards out on the scene, especially as DeFi becomes more rich and more complex. So Crystal is going to be a new place to interact with all of DeFi. We've been joking about, and Jim Bianco really gets credit for this joke, is like, people are looking for like, all right, I downloaded Coinbase, where's the DeFi? And there's actually more and more like people out there working to provide the DeFi for people. And this is the new product out of Kyber called Crystal. And let's see where it goes.

• 34:48Ryan Sean Adams?

  People want their DeFi button.

• 34:50David Hoffman?

  Where's the DeFi button?

• 34:52Ryan Sean Adams?

  We say it every time, but if you are looking for a job in crypto, the way to check that out is through the Bankless Job Sports. Got a lot of fantastic jobs featured there. Senior Product Manager at Immutable Gaming, crypto gaming company. Full Stack Engineer at Pallet. A Senior Solidity Engineer at Quant Finance. Chief Investment Officer at Yield App. A Software Engineer at Arbitrum. A Designer at Pull Together. Of course, Bankless is still looking for its editors. So there's tons of opportunities to plug in during this season, this, I guess, crab season, bull market season still on, but crypto firms are hiring like crazy.

• 35:30David Hoffman?

  Crab market with big bull horns, big bull horns on that crab.

• 35:34Ryan Sean Adams?

  All right, David, you ready to get to the news?

• 35:36David Hoffman?

  Yeah, let's do it.

• 35:37Ryan Sean Adams?

  All right, man. Let's start with this. This is a blog post entitled "The Road to Trustless ETH Staking." We've been doing a lot of deep dives on ETH staking recently. We had that ETH staking panel. One of the panelists was from Lido, and this is a blog post from Lido. They are kind of moving really quickly in the ETH staking industry. And they just rolled out this post about becoming more trustless. David, what's the TLDR of what they're attempting to do here?

• 36:06David Hoffman?

  Yeah, basically, the TLDR is that there is a few low-hanging fruit things to be, become completely trustless as a staking as a service provider. And maybe just to back up as context, is there are two main significant, staking as a service providers that aren't just like a centralized exchange. One of them is Lido, which we're talking about now. The other one is Rocketpool, which we talked about earlier. Rocketpool has always had the ethos of being maximally and completely decentralized without compromise from day one. Lido has made some sort of compromises to trustless staking by starting with a DAO multi-sig model. This is the same critiques that Polygon has been getting for being secured by a multi-sig and rather than being a protocol.

• 36:47David Hoffman?

  But the ethos behind Lido is that, well, if we wait to become a completely decentralized protocol, the centralized exchanges like Coinbase and Kraken might gain too much of a lead, and that is kind of a threat in of itself. And so in order to get out the door quickly, Lido started as a DAO with permission validators. And now this blog post talks about the way that they are going to further their trustlessness, further their decentralization, and turn into something closer to what their ethos behind Rocketpool is. And so they talk about the problems that they have ahead, how they're going to tackle them, and what the various routes towards the trustless future that they want out of Lido.

• 37:28David Hoffman?

  It's really awesome to see Lido have that commitment, have that ethos, and so that makes me excited. There's also some pretty cool cryptographic Ethereum stuff. Shared secret validators is something that I am paying attention to, which has a mention here in the post. So if you are interested in seeing how a DAO can turn into a protocol, shared secret validators is one of the points here. And if you are into that world, definitely check out this blog post. It's a very just educational one to read.

• 37:56Ryan Sean Adams?

  We definitely have to make sure ETH staking remains decentralized, remains trustless. So this is an initiative we will continue to support at Bankless. David, interesting news, Zoku, who is kind of the lead

• 38:08David Hoffman?

  Zuko.

• 38:09Ryan Sean Adams?

  Zuko, sorry, was the lead founder of Zcash. Asked this question on Twitter, this is a governance question. Should Zcash switch from proof of work to proof of stake? It's kind of interesting here, right? Even that this question is being posed, I have to ask myself, does this mean proof of stake has won, is winning? Like when a longstanding proof of work chain, you know, raises this question, you have to ask yourself why?

• 38:36David Hoffman?

  Right, totally. And Zuko, the Zcash community and the Ethereum community have always been really, really close. You and I have critiqued Zcash in the past about like, does privacy need its own L1? And to some degree, I think this is actually an illustration of that because proof of stake is just like, just a leaner consensus algorithm, which is just like making the whole thing just leaner and smaller and more condensed, which kind of goes to show that like, no, you are just trying to optimize for zero knowledge proofs, which should be an app on Ethereum. That's really a different story. I take your point that a longstanding proof of work blockchain, and it just started with proof of work because that's what Zcash had to work with at the time, is now saying like, hey, proof of stake might work better for us.

• 39:18David Hoffman?

  And there is definitely a stronger, a very strong argument to link proof of stake with cryptography. Cryptography is easier with proof of stake. I'm not technical enough to explain how, I just, it's my gut take.

• 39:29Ryan Sean Adams?

  I mean, but I was like, there's a huge efficiency gain. And that might be it. Like, I know Zcash spends a whole lot of money in terms of block rewards in order to fund the security of itself, Zcash. And so if you transition to proof of stake, you don't have to spend as much, maybe like one tenth the amount. It's kind of estimates with, that Justin Drake gives for a switch from proof of work to proof of stake. So we'll see how that goes. David, let's talk NFT stuff because that is a big story this week as well. CryptoPunks are just pumping. CryptoPunks price rise 53% in the week after Ethereum wails a feeding frenzy. Is the title. Half of the top 10 CryptoPunks have been sold over the past two days. This happened last week. What is going on in the CryptoPunk world?

• 40:13David Hoffman?

  Yeah, this is what I wrote about again in the Market Monday. There was, people thought it was the NFT bear market, but the convicted knew that it was an NFT like land grab opportunity. And so there was a bunch of people that were bullish on NFTs, that were buying of the cheap NFTs as people left the NFT like mania from, from earlier. And then enough people realized what was going on, that NFTs weren't actually bearish and they were quite bullish. And then all of a sudden, the market kind of all realized it at once and people descended upon first CryptoPunks, which were kind of like the, you know, Bitcoin of NFTs, the OG NFTs. And that's, the CryptoPunks got bought up first. The first event that happened was that Gary Vee paid $2.7 million for a knitted cap ape.

• 40:59David Hoffman?

  And then he tweeted out something like, here we go or something. And then, and then people connected it and that kind of kicked off the frenzy. I was part of that frenzy. I got the FOMO. So I bought my CryptoPunk right after, right after I saw this frenzy like pick up. Cause I kind of felt, I was part of that, like, I was part of that environment where people thought that NFTs were bearish. And then realized that everyone else is also bullish on NFT. So I FOMO'd into a Punk and I FOMO'd into a Punk Friday morning. And the, and the Punk mania just absolutely continued for the next like 48, 72 hours. Where if you go, there's a Doona analytics dashboard for punks that compares all time volume. And just the, the last week of volume is like three times higher than any other candle.

• 41:44David Hoffman?

  There's a, and then millions and millions of dollars got purchased or got spent on, on CryptoPunks. After Gary Vee bought the, the ape knitted cap NFT for 2.7 million, another ape gold chain CryptoPunk, got sold for 5.5 million. An Alien Punk got bought yesterday for a thousand ether. A new Alien CryptoPunk got listed, available to be sold for 90 million. We'll see if that gets purchased. And then we also saw Three Arrows Capital come in, throw in a bunch of money, CryptoPunks and art blocks. And some other NFT projects. We saw the floor price, which is the lowest price that you can buy a specific NFT for for so many different NFT projects run up.

• 42:25David Hoffman?

  Board apes got purchased, like art blocks got purchased, cool cats got purchased. And so there was just a bunch of reallocation rotation into the NFT industry. And that all happened last weekend and is still kind of happening to this day.

• 42:38Ryan Sean Adams?

  Are you ever going to sell your CryptoPunk, David?

• 42:40David Hoffman?

  Well, so I realized like right after I bought my CryptoPunks, like, great, I got a CryptoPunk. Now I'm really bullish CryptoPunk. Now I'm going to put it as my avatar. And now I've realized that I only have one and I can't ever sell it because I it's my only one. It's become it's like it's it's part of me now. And so I can't ever sell my one CryptoPunk. So I bought relatively expensive CryptoPunk and now I can't ever sell it. So.

• 43:01Ryan Sean Adams?

  You do expect us to appreciate over time, right?

• 43:03David Hoffman?

  In ether terms, yes.

• 43:05Ryan Sean Adams?

  In ether terms, not just fiat terms.

• 43:07David Hoffman?

  Absolutely.

• 43:07Ryan Sean Adams?

  Ether terms.

• 43:08David Hoffman?

  In ether terms, totally.

• 43:09Ryan Sean Adams?

  More bullish CryptoPunks than ether. Wow.

• 43:11David Hoffman?

  Ether CryptoPunks are just wrapped ether.

• 43:16Ryan Sean Adams?

  Interesting.

• 43:18Ryan Sean Adams?

  Wrapped ether in pixel form is, I guess. Okay, cool. Yeah. Anything else on CryptoPunks?

• 43:26David Hoffman?

  Bullish.

• 43:27Ryan Sean Adams?

  Bullish. Talking about this, more more NFTs. Polygon has become a sponsor of the New York Knicks. That seems super big.

• 43:36David Hoffman?

  What?

• 43:39David Hoffman?

  Wow. New York Knicks Twitter account says.

• 43:41Ryan Sean Adams?

  Did I say sponsor?

• 43:43David Hoffman?

  Proud. Yeah, you said sponsor. Yeah. Proud. Proud to power the NFT collection.

• 43:46Ryan Sean Adams?

  Sorry, they are powering the NFT collection. Yes, I read sponsor, but yes. So they are powering. So New York Knicks are using Polygon tech in order to deploy NFTs. That's what this looks like.

• 43:56David Hoffman?

  Absolutely.

• 43:57Ryan Sean Adams?

  While we're talking NFTs, David, tell me about Treeverse. What is that?

• 44:00David Hoffman?

  At Treeverse, I've heard, I haven't played this myself. This is a new game on Ethereum that is token enabled. I've heard this described as like a RuneScape, a new RuneScape, which I definitely played when I was younger. And it is a token enabled game played to win, actually infinity type game. And while this is kind of in its early stages, just wanted to call attention to this. If you want to explore the play to earn games version of Ethereum, side of Ethereum, check out Treeverse. The Twitter account is the Treeverse.

• 44:30Ryan Sean Adams?

  All right, David, let's talk regulatory. You want to start with the infrastructure bill, man? So this infrastructure bill has been just huge. It seems like there's momentum to pass it. And the problem with it is there was a provision that got added to the infrastructure bill, bill in part of the pay for section that put in some handcuffs, I'll say, some just stringent requests, unrealistic requests on crypto, in particular tax reporting of crypto that could extend to individual wallets, maybe wallet providers, maybe even exchanges like Uniswap, doing things that none of these protocols actually have the capability to

• 45:12Ryan Sean Adams?

  report, like the requirements don't even make sense in the bill. And so there was a huge crypto rally and pushback against this. We had folks from Coin Center, for example, working with with senators to try to change this information, change this this bill, have it amended. And it looks like there's some progress here. Why don't you, could you update us on what that progress is?

• 45:37David Hoffman?

  Yeah, first off, just to reiterate, the bill made anybody that ever provided any service to any user of any cryptocurrency, it labeled them as a broker, which means that they had to do reporting on all of their users, which to some degree is really, really hard and not even relevant. And then best case scenario, and then worst case scenario is actually straight up impossible. Right? So like that, it would make MetaMask defined as a broker, which means MetaMask would have to do reporting requirements. Jerry Britto, who is at Coin Center, he tweeted out that they have made improvements into the language. And so they were able to exclude validators, which means like node operators are no longer required to report hardware and software wallets are no longer required to report. So that's like Ledger and MetaMask.

• 46:22David Hoffman?

  There are still many more things, many more battles to be had to make this legislation make any sense at all, but it's made a step in the right direction. We've had, I've heard some interesting takes about just straight up the logistics of this.

• 46:37Ryan Sean Adams?

  The other thing about this, David, is it's really nice to see some US senators on our side. So Senator Wyden, Senator Loomis, Senator Toomey, they were part of working through this amendment, changing the language, working with coins that really understand the crypto industry. So we do have some senators that are crypto sympathetic and seem to understand this. And of course, Senator Loomis was the individual who in Wyoming had some Dow legislation passed in her home state. So that's cool to see. That said, I mean, this is a great example of the crypto industry kind of rallying and saying, like pushing back against this. I heard tons of people call senators, like tweet about this, you know, write letters, this sort of thing, write emails, this sort of thing.

• 47:21Ryan Sean Adams?

  And I think part and parcel of that, like part of that action was actually why we were able to get this amendment language in place. It was definitely put out there as a fire alarm, like everybody in crypto, come react to this and make sure that this, this legislation doesn't go forward. And at the end of the day, it seems like it is being resolved. There's still some action that people can take to call their senators. In fact, we have a link in the show notes to call your senator to save crypto and make sure that this, this doesn't happen, that this amendment does go through. And I'm curious to hear your perspective on this, David. Do you feel like this is, um, this is a crypto success story? Or do you feel like at some level, this is, um, I don't

• 48:04Ryan Sean Adams?

  know, a bit of a, of a false alarm? Or like we were overly worried, the crypto industry was overly worried about, you know, language that was going to be changed at some, at some stage anyway. And there was, you know, too much regulatory flood going on. What's your take on this?

• 48:21David Hoffman?

  Yeah. So the, the take that I've kind of agree with, but I'm not really highly convicted in this, in this belief is that the legislation was so incredibly just nonsensical and like, and I feel like you could see this in the markets because the markets did not negatively react to a legislation that could like, in theory, completely break the industry. But the legis- was so bad, was so uninformed, was so like nonsensical.

• 48:45Ryan Sean Adams?

  Didn't even make sense.

• 48:46David Hoffman?

  Didn't even make sense that like as soon as like regulators would try to enforce this legislation, they would realize what absolute like shitstorm they accidentally caused for themselves. Imagine going to like Dan Finley at MetaMask and saying, hey, Dan Finley, like, give us the all of the like reporting tax details of like all like 50 million of your users, which you don't collect tax information on by default like it is. And that's just one example, right? Like the ledger doesn't know what your addresses are in your ledger like ledger can't report. So it can provide you the wallet and therefore in theory it should be a broker in providing that information to regulators, but it has no idea. So like, to some degree, this regulation was so incredibly nonsensical that as soon as any

• 49:28David Hoffman?

  enforcement attempt would come, it would be so easy to defend in court. It would be so easy, like regulators would just be overwhelmed with what to do. And that's why I think the markets didn't react because the nonsensical nature of this was so incredibly crazy that like it was going to be impossible to be even forced anyways.

• 49:45Ryan Sean Adams?

  It didn't seem malicious. It just seemed inept.

• 49:48David Hoffman?

  It seemed, it seemed like just straight up like, uh, what's the word? Uh, inept is a great word. Inept is a great word, right? And so to some degree, while like, uh, you know, very, very important efforts were taken to rally the community to get good legislation in. And we should always, as an industry, always get good legislation in when we can. It was, I'm very glad to see that crypto, the crypto community, the crypto industry rose to the occasion and actively participated in governance over a nation state, which impacts our industry. Our, our, our industry is like kind of branded as they like this anti-state, anti-regulation, anti-government like, uh, industry. And like, to be fair, like the crypto world is, is a straight up anti-regula, uh, non, and

• 50:33David Hoffman?

  anti-nation state. Is it really anti, it's a non-nation state technology. So like, that's what you get.

• 50:38Ryan Sean Adams?

  It's extra.

• 50:39David Hoffman?

  It's extra, extra nation state. Right. Like non, non-bias to the nation state. It just is. And the crypto community, regardless of that branding, showed up to like senators telephone, showed up to, to. Like where regulation gets done and participated. And so that makes me bullish on the community. When we need to, we will rally and get what we need to done. That being said, was this a not a drill or was this a drill? And it's one of those things where like, if this wasn't a drill, we acted accordingly and we kind of turned it into a nothing burger. At the end of the day, I think that's like a take.

• 51:15Ryan Sean Adams?

  Yeah, I mean, it's like you have to treat every fire drill as if it's real because one of them like will be real. Yeah. Right. So you have to react to everyone and I'm really proud of what the crypto community has accomplished, guys. But still, we'll have a link in the show notes for fightforyourfuture.org where you can contact your senators. It's like pre-made information. They will help you through the process to make sure this amendment sticks in crypto. But like, I think part of the reason we're so worried, David, is because it just seems like coming out of US lawmakers. They just don't understand this asset class at all. So this was a headline from Senator Elizabeth Warren. She, she said crypto markets might need bailout someday without the proper regulation.

• 51:58Ryan Sean Adams?

  So she's making the case essentially that, hey, if we don't regulate crypto, tax, US taxpayers are going to be on the hook the next time crypto wants a bailout. And I'm like, what? Like, no, literally the opposite. You're thinking of banks.

• 52:13David Hoffman?

  Right.

• 52:14Ryan Sean Adams?

  Elizabeth Warren. Banks are the groups that need bailouts. Crypto has never asked, can't even ask for.

• 52:21David Hoffman?

  Too proud to ask. I wouldn't dare ask regulators for a bailout.

• 52:26Ryan Sean Adams?

  Like, but like, how could that work? I just, it's just a fundamental mismatch understanding. If this is part of the reason you're, you're saying this is a case you're making to support crypto regulation? Because crypto regulation might need bailout some days like? No, I mean, we've gone through 95%, 99% price drops.

• 52:49Ryan Sean Adams?

  Not asking for a bailout. DeFi gets hacked all of the time. No bailouts. Was there a bailout for Mount Gox, David? Like, no bailouts are coming. We know that. Everyone in crypto knows that. And that is a feature. It is not a bug. And that is a

• 53:03David Hoffman?

  Absolutely right.

• 53:04Ryan Sean Adams?

  It's a feature we need inside of our existing financial system. This is why we're going crypto is because big banks and plutocrats and oligarchs cannot be bailed out. That's why we're doing this. So it's like, swing and a miss, man. Totally whiff on the point.

• 53:20David Hoffman?

  Absolutely.

• 53:21Ryan Sean Adams?

  Why we're worried. That's why we're worried.

• 53:23David Hoffman?

  This just like gives you such a great insight into the inner workings of Elizabeth Warren's brain, thinking just like, oh, they might need a bailout. Like, that is straight up, like, in inner circle, just like incumbents paying off regulators. The reason why bailouts happened is because people who are insiders were able to make them happen. Who is literally the not insiders of the world is the crypto people. We are the outside. That's why we are here. We are too proud of an industry to ask for regulations. We would never want them in the first place. We are building our protocols to be regulation resistant and bailout unnecessary. Like, the whole point. And so like, the fact that Elizabeth Warren even would associate like bailouts with crypto

• 54:08David Hoffman?

  just tells you what mindset she's in. She is in an MMT mindset. She's in a nanny state mindset. She thinks that we're going to ask for bailouts and therefore we deserve regulation. We really, we want neither of those things. We don't need bailouts. We get rug pulled and then we carry on the next day. That's what it means to be a crypto person. Like, it just puts you too much insight into how Elizabeth Warren doesn't understand at all what this, the ethos of this industry is. And she's using this whole like, oh, they're gonna ask for a bailout. Now we need to regulate them.

• 54:39Ryan Sean Adams?

  I, you know what, I, you know, I also want to lend a hand of like, hey, come learn about this to US senators.

• 54:45David Hoffman?

  I don't trust it. Other people, yes.

• 54:48Ryan Sean Adams?

  I don't necessarily trust it. Like, I, I don't know. But like, I just want them to know that this open finance thing is not a way to escape, like, regulation. Like,

• 55:00Ryan Sean Adams?

  You know, this brings me to maybe the Gary Gensler letter, and we should talk about this, you know, for a minute. But like, so Gary Gensler put out a, so he's the new SEC Chair, and he put out a new, a letter. And I think this was a speech given at the Aspen Security Forum. And there are some concerning things in here. You know, one of the things he said that that stuck with me is that some people in crypto are trying to shirk the legal system.

• 55:30David Hoffman?

  Right.

• 55:30Ryan Sean Adams?

  And that is the reason why they use crypto. Like, David, I don't see very much of that at all. Like, that just, we're not trying to shirk the legal system in crypto. We're trying to shirk the shitty banking system that we have in place. Like, if the banking system was better,

• 55:49Ryan Sean Adams?

  and if it was, if it was digital, if it had the features that crypto had, like, we would be using the banking system, right? It's because the banking system failed that this bottom-up movement is happening. That's, that's one thing that stuck out for me from this letter. But what are some of the other things for you, David?

• 56:06David Hoffman?

  Well, one point that I'll make on that is like, one of the reasons why there's this inherent, like, like, tie to being anti-regulation is that banks, the incumbents, are making the regulations to protect themselves. And so if we want to be anti-regulation, we don't want to be anti-regulation, we want to be anti-banks. We're just frustrated that banks are buying regulations that they want that protect them. And so who do you think is...

• 56:30Ryan Sean Adams?

  They turn everything into banks.

• 56:31David Hoffman?

  They turn everything into banks. They take away our individualism, they take away our self-sovereignty, and then they just extort us. That's the natural, organic pattern of banks over the centuries. And that's what we want to get away from. And so let's make good crypto regulation happen. And this, and this was my last rant on the last weekly roll-up, is that we, the crypto industry, would love fantastic, good, precise, clean regulation. Please provide that. Regulate us in an educated fashion, so you can come get your tax money. But if you come and regulate us by saying that any wallet provider or any node is a, is a broker and needs to provide information... You're not going to get any tax money because it's nonsensical and you're just going to F it up. And then there's going to be resistance. So we should shake hands. We

• 57:16David Hoffman?

  should rally behind people like Jake Shervinsky and the other lawyers in this space who are informing regulators about how to properly do this so that the regulators can get the tax money from this industry that they want to pay for the infrastructure bill. Just do it right rather than come in heavy handed. I think the mistake that that this tax bill made was thinking that like the crypto people are just like this corner of the internet. They don't care about society. They don't care about government and we'll just tax them just because we can and we'll bully them. Like, oh, no, wrong. Crypto people are some of the most like politically engaged people on this planet because people think that this is a money, a revolution in money and finance, and it totally is. But this is also a political revolution. These are all political people in this industry.

• 57:56Ryan Sean Adams?

  Social revolution. We're fighting for hearts and minds here. And I think the big question with this Gary Gensler letter is like, he's the new SEC chair, taking over from Jay Clayton. The question is, is he crypto friendly or not? So there's some takes around the crypto universe on the back of this letter. Like, he mentioned, Gary Gensler mentioned that he agrees with the previous SEC chair, that most ICOs, he said in the letter, are probably securities, right? So that was one point that stuck out. There are a few other points here. But here's a take from Nic Carter. Somebody asked him, like, what's your explanation? Like, how do you, what, what do you think of this letter? And he said, it's not clear that the SEC can actually fulfill its agenda, given current

• 58:39Ryan Sean Adams?

  resources. But at minimum, a crackdown on exchanges, both onshore and offshore, might be coming. This is sort of what he took from Gary Gensler's letter. He also said, Gary Gensler, it seemed, was expressing a need for additional legislation. So it could be the case that the SEC actually doesn't have the power or authority to do some of the things that that Gary Gensler is suggesting. But there were some more upbeat takes here, David. So this is a take from a, you know, crypto Twitter lawyer, Preston Byrne. What did, what did Preston think about this?

• 59:16David Hoffman?

  Yeah. And this, I've heard this sentiment echoed by other lawyers as well. That Preston said that Gensler's speech today was straight down the middle and entirely consistent with what more conservative legal advice in this space has been for years. This guy at the top 100% understands crypto. We knew that. And Preston finishes saying, I think this is actually bullish for prospects like the Bitcoin ETF. And so if you were, what he's saying is that there has been generally like more conservative legal advice in this space. And if you were following that legal advice, then Gary Gensler is not doing anything unexpected for you. And so like no erratic ICOs, like, you know, know your customers, don't sell the US investors sadly. But then I think the take here is that Gary Gensler, he's going to be a stickler. He's going to be strict. He's going to be a bit of a hard ass.

• 1:00:00David Hoffman?

  And he's going to let this industry progress forward at the same time, which, fine, I'll take it. I'll take it.

• 1:00:07Ryan Sean Adams?

  Yeah, it's definitely not the worst it could be for sure. This is a headline in Bloomberg saying Gensler signals pathway for Bitcoin ETF with tough rules. This is from, partially from his speech. And I think the key clip here is this, Gensler is hinting that he'd like to see a filing. This is an ETF filing. All of the previous ETF filings have been denied for Bitcoin ETF. But he's hinting, he'd like to see a filing that seeks approval through a 1940s law that governs mutual funds. Most of the pending applications have been filed under a 1930s law. It's back to your point about like being a stickler, right? Like it's like, hey, if you fill out the right forms and you do it the right way, then I'll give it to you, but you have to do it

• 1:00:52Ryan Sean Adams?

  the right way. Right? This is maybe the signal that he's sending to crypto. In addition to the signal of like, I want more legislation in this space. Unless he gets the legislation, I'm not sure how much more the SEC is going to be able to do.

• 1:01:06David Hoffman?

  Right. And I think another very telling comment towards the bottom of this article is, he says, "We don't have enough investor protection in crypto," Gary Gensler said. "It's more like the Wild West." And this definitely shows you the difference in mindset and disposition of people in crypto, because he's saying this, "It's more like the Wild West," as if it's a bad thing. And Ryan, you finish off every single Bankless episode is- We are heading west. It's not for everyone, but we are glad you are with us on the bankless journey. And so kind of, yes, we don't have enough investor protection in crypto to sometime, sometimes to some people, when you say the words investor protection, we hear incumbent protection, not investor protection.

• 1:01:46Ryan Sean Adams?

  That's exactly it.

• 1:01:47David Hoffman?

  Exactly. And, and we like the Wild West. It's fun out here. There's 10,000 X gains and rug pulls. Who knows what comes next, but we're here for it because we're self sovereign and we're individuals and control our own money.

• 1:02:00Ryan Sean Adams?

  It is the Wild West, but we do have an investor protection that they don't see. They, they think investor protection means like, like regulatory action and new legal codes, right? Like investor protection is an open source, transparent financial system where you can view source in every asset. You can see exactly what's inside of it. That's investor protection, right? So yeah, it's the Wild West, but you know what? I'll take that over the closed like financial system where I have no idea how the money is, is moving, right? Like this is all open. This is transparent. That is our investor protection. I wish they would acknowledge that more in some of these statements. You know, Senator Warren and even

• 1:02:41Ryan Sean Adams?

  Gary Gensler is like, take some of the good like that is coming out of this system. We've built a more transparent financial system from the ground up and regulators again should be falling over themselves in support of a system like this. It's going to make their jobs easier.

• 1:02:56David Hoffman?

  You know what the best investor protections are is, is financial services built by code where no one is allowed to break the rules. And so that code is enforced equally, transparently across everyone. And so there's no, and the whole point about Ethereum is that no one is the admin. Everyone is a user. Everyone is treated equally. Everyone can audit the code. That is the best investor protections that money can buy. It's code protecting hu- like investor protections is a human to human thing where like, oh, there's like privileged information. Somebody has, somebody like big wealthy whale has privileged information, entices a lot of retail people and then, and then rug pulls them and takes all of their money. In code, if we can enforce that against that and-

• 1:03:39David Hoffman?

  I've never been rug pulled. I've stuck to the major DeFi apps like Compound, Maker and Aave. I've never been rug pulled. Code has protected me from rug pulls and also my own due diligence. And so to some degree, like there's going to be the same tricks in every single financial market. And we need to avoid scammers and fraudsters and all that. But the lack of appreciation for the fact that code is protecting all of us is frustrating. And but I also understand that's a complicated subject.

• 1:04:08Ryan Sean Adams?

  Yeah, I agree. All right. So that's what the take the US is is taking right now. It's a little bit of this, a little bit of that, some ritual against crypto, maybe some support, kind of wishy washy, definitely not a policy towards crypto yet. But China definitely has a policy to crypto and that's, I want crypto out of here. We want crypto outside of our borders. They've been putting pressure on miners, on exchanges. We've talked about that in the past. And they say the PBOC, that's the People's Bank of China, is saying it's going to continue to keep high pressure on crypto trading. David, I just want to highlight our podcast that's coming out on Monday. It's already available. If you are a Bankless Premium member, you can listen to this podcast now.

• 1:04:49Ryan Sean Adams?

  We recorded it last week. This is with a gentleman by the name of Richard Turin, who wrote a book called Cashless, all about what China is doing, their plans for digital currency, a digital currency revolution, as he calls it in China. And something that's interesting that I learned from this book and from the podcast is that China's digital currency strategy is explicitly a deterrent against cryptocurrency. Okay, they don't want capital flight. They don't want a free money system that is outside of the PBOC's control, inside of their borders. So in addition to pushing it out, they're actually trying to build a controlled, centralized crypto alternative.

• 1:05:33Ryan Sean Adams?

  This is the China Central Bank Digital Currency, essentially. It's explicitly part of their strategy. Instead of like not replacing it with, you know, they're replacing all of the crypto stuff with something that looks a little bit like crypto, is digital. In the same way, but it's completely controlled and centralized. That's their approach. And it's a pretty smart approach. If you are a, you know, centralized, authoritarian kind of power, and you want to go down this route. So, anyway, eye-opening podcast, fantastic podcast. I think we need to learn about China's approach because it's going to make waves in terms of what the US does next as well. And it's going to be pretty important to the world.

• 1:06:15David Hoffman?

  Yeah, I can't recommend this podcast enough. It opened my eyes to what really the true story is behind the China, Chinese central bank digital currency. And if you thought the last section made you like question our regulators competency about how to approach DeFi, listening to this will make you question it even more.

• 1:06:32Ryan Sean Adams?

  Yes.

• 1:06:34Ryan Sean Adams?

  China's all over it.

• 1:06:35David Hoffman?

  China's all over the central bank digital currency. Recently, there was a, I can't remember what it was.

• 1:06:41Ryan Sean Adams?

  Smart contracts, dude.

• 1:06:43David Hoffman?

  Yeah, they have smart contracts coming. And meanwhile, like not too long ago, there was like a US banking regulations panel that talked, that was headlined cryptocurrencies, what are they even good for? Meanwhile, China saw crypto and applied it to the central bank digital currency and is releasing one of the most powerful forces that this world has ever seen in decades in the East. And then meanwhile, in the West, people are questioning if crypto is even useful.

• 1:07:08Ryan Sean Adams?

  Is it just a fad?

• 1:07:10David Hoffman?

  And then just allocating like terrible regulation to it when they have forced themselves into a corner where their only option is to leverage DeFi and do combat Chinese bank digital currency. I need to stop or else I'm going to explode.

• 1:07:24Ryan Sean Adams?

  Well, look, man, this is what happens when your average senator is 65 years old, right? This is exactly what happens.

• 1:07:29David Hoffman?

  Nice, nice.

• 1:07:30Ryan Sean Adams?

  All right, let's move on, David.

• 1:07:32David Hoffman?

  Yeah, we got to burn through this.

• 1:07:33Ryan Sean Adams?

  Drive By's. All right. Wealthfront is offering grayscale Bitcoin trust. That is a robo lender. Wealthfront, a lot of people use. Pretty cool to see them doing that as continuation of the story. Also, Germany institutions, they are allowed to hold, I think up to 20 million in crypto now. So Germany is coming down the pike with some crypto-friendly regulation, legislation. It's kind of cool. And you want to get this last one, David?

• 1:07:57David Hoffman?

  Yeah, Richard. No, excuse me. Ricardo Spagni, the one of the original members of Monero, not the OG Monero person, because that's a very interesting story, was actually arrested for things unrelated to crypto. Apparently defrauded a company in South Africa and was extradited to South Africa. So basically, he's considered basically the founder of Monero, even though that's technically inaccurate, got arrested for unrelated to crypto reasons, which is an interesting side quest of a story.

• 1:08:25Ryan Sean Adams?

  Look, there are still some shady people in crypto. Definitely have to acknowledge that for the regulators listening in here. Okay, guys, we're going to get to the takes in just a minute. But before we do, we want to thank the sponsors that made this episode possible.

• 1:08:37David Hoffman?

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• 1:09:20David Hoffman?

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• 1:10:05David Hoffman?

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• 1:10:49David Hoffman?

  is the Gemini Crypto Back Credit Card, which gives you 3% cash back on all of your purchases, but paid to you in your preferred crypto asset. When I get my Gemini credit card, I'm going to make sure that I get my cash back in ETH. So whenever I buy something, I get a little bit of ETH bonus back to me at the same time. You can open up a free account in under 3 minutes at Gemini.com/go-bankless. And if you trade more than $100 within the first 30 days after signup, you'll be gifted a free $15 Bitcoin bonus. Check them out at Gemini.com/go-bankless. All right, guys, and we are back into the ecosystem takes that have come out in the last week. This one comes from Eric Connor, who has a bunch of screenshots from a different Bitcoin Maxies. And he says, "The Bitcoin community has gotten so pathetic

• 1:11:33David Hoffman?

  that they have actively begged regulators to classify ETH as a security." This has been going on for years. And then he has some examples. And so he has some examples of, you know, some of the most maximalist of the Bitcoin Maxi camp, Samson Mao from Blockstream, Neil Jacobs, Pierce, Pierce, I can't remember his last name, talking all about how Ether is a security and making jokes about how Ether is a security, and then asking Gary Gensler to classify ETH as a security. And I want the listeners to, and here's why I feel so passionate about this. I want the listeners to think about, the SEC is supposed to protect individuals, investor protections. Who is protected? Ether gets classified as a security.

• 1:12:17David Hoffman?

  Or is if ether gets classified as a security, is this just Bitcoin maximalists being really happy that the second largest, biggest threat to Bitcoin is being classified as a security? Like, who is it? Are they? Do they care about investor protections? Or are they trying to like, you know, cope with the fact that Ethereum is extremely successful? And so I really just want, shame on Bitcoin Maxis, who are trying to protect their own bags by begging Gary Gensler to classify ether as a security, when they should be talking, focusing on themselves, focusing on their own merits, focusing on their own blockchain, rather than looking over the fence and being jealous about all the cool things happening on Ethereum. And they get jealous about it, and so they beg Gary Gensler to classify ether as a security, because they're insecure about their bags.

• 1:13:02David Hoffman?

  That's my take about Eric's take about the Bitcoin maxi takes.

• 1:13:05Ryan Sean Adams?

  Yeah, and ultimately, like, I would just say, like, it doesn't really matter what they think, right? They don't get to decide.

• 1:13:11David Hoffman?

  It's embarrassing.

• 1:13:12Ryan Sean Adams?

  The CFTC chair also pushed, pushed back in general, and this is partially in response to, I think, Gary Gensler's comments about certain ICOs being securities. And he said, hey, like, many cryptos are actually commodities, and the SEC has no jurisdiction over the things that are commodities. Bitcoin is a commodity. CFTC has said as much. So is ether. The CFTC has said as much. So I'm not even sure why this is a conversation. Like, maybe you could have this conversation in certainly 2015, 2016, maybe 2017. But like, this conversation has already been had, right? Like, it's over, it's done.

• 1:13:52Ryan Sean Adams?

  The CFTC, you know, are the, are the regulators for ether, the asset, and Bitcoin maximalists don't get to decide. So it just seems like a bunch of cope, and I don't know, man.

• 1:14:05David Hoffman?

  Massive cope, massive cope.

• 1:14:06Ryan Sean Adams?

  I don't understand.

• 1:14:07David Hoffman?

  Samson Mao is the guy behind Liquid, which is basically trying to be the Ethereum version of Bitcoin as a sidechain, which is already just compromised on the values. But like, Bitcoiners are known for being the, the, the, the cypherpunks, who are very anti-regulation, like extremely Nation state or one of the Antown nation state, there's one of the reasons why this whole entire industry has that branding in the first place, even though I don't agree with it, yet they are begging the nation state to protect their incumbent investments by classifying ETH as a security. To me, it's no different than the bankers having like regulation against like the same against our industry trying to protect them. The Bitcoin maxies are just trying to do it for their own purposes.

• 1:14:49David Hoffman?

  It's just embarrassing. It's a compromise on their values, compromise on their ethos, and it's just a bad look for the space.

• 1:14:55Ryan Sean Adams?

  Yeah, I agree. Ultimately, it won't amount to anything.

• 1:14:58David Hoffman?

  Yep.

• 1:14:58Ryan Sean Adams?

  Uh, but I agree. It's a bad look. Uh, David, let's, let's take Jeff Dorman's take. So what's his take away from everything that's going on? So all of the news, he said his internal slack is blowing up with tons of positive information about crypto, but also negative information about crypto. What's his takeaway, David?

• 1:15:16David Hoffman?

  Yeah, Jeff Dorman, we had him on to talk about Coinbase. When Coinbase went public, that was a fantastic episode. His takeaway is that it doesn't matter, positive, negative news. Every single news outlet and investor in the world is now talking about digital assets every single day. And he finished this up with betting against growth from here would be insane. And so this is why I've been saying like, regulation, it's finally here and it's bullish. It doesn't matter what it is, good regulation, bad regulation, we prefer good regulation. It's bullish either way, just because the attention is on the space.

• 1:15:48Ryan Sean Adams?

  They are not ignoring crypto any longer. They are forced to reckon with it and that is bullish for the space for sure. Let's do this take. It's kind of a regulatory take, I suppose, but this is from Joseph Young. Binance futures trading not allowed in Germany and Italy is one of the biggest advertisements for DeFi this year. I could not agree more. That Binance squeeze we've been talking about, where Binance has to de-list assets is not available in certain countries. That's just pointing the world to DeFi. This is why we need DeFi. We need something that is outside of the borders of a nation state that doesn't have a geographic jurisdiction or a geographic location that's just public, freely available to anyone with an internet connection.

• 1:16:34Ryan Sean Adams?

  Huge advertisement for DeFi.

• 1:16:36David Hoffman?

  And this also largely impacts Binance Smart Chain just as well, because the only on-ramp to Binance Smart Chain is through Binance. And so if Binance gets restricted, Binance Smart Chain gets restricted, which is why we were always harping on Binance Smart Chain in the first place, because it's just a masquerading as decentralized, even though it's actually not.

• 1:16:54Ryan Sean Adams?

  Yep, absolutely. Let's see this next take. This is from Tasha. She has a whole thread about this. I just thought it was a fantastic thread. And the crux of it is this. Maybe I'll read the first tweet or so. "The US is in big trouble with twin deficits and high debt. We know that. But few realize that Fed-issued digital currency USD token can change the fate of America. How?" She says, "Grab a coffee and read on." Do not have time to read the entire thread. But she makes the case that actually, the biggest export from the US is not technology export. It's not a manufacturing export. It's not like military arms dealing. Do you know what the biggest export is, David?

• 1:17:33David Hoffman?

  The dollar.

• 1:17:34Ryan Sean Adams?

  The US dollar. That's what the US is exporting to the world right now. Everybody wants the US dollar, right? Now, that's not necessarily a long-term product. So Tasha says, "We might have like 15 to 20 years or so left to go on the US dollar's reserve currency status." But she said, "The US should use that while it can, essentially, and create a central bank digital currency of some sort. Support crypto in some way and export this to the world to stay ahead." If they don't, per our previous conversation, man, China will, and they're in it to win it. The US has this asset. Why not use it? They absolutely should. I thought it's a brilliant take. We'll include that thread in the show notes here.

• 1:18:18David Hoffman?

  The TLDR is that the American empire has its interests, and it can use crypto to leverage those interests rather than fighting it. And if it does choose to fight it, it's just going to hasten its own demise.

• 1:18:31Ryan Sean Adams?

  Absolutely. All right, David.

• 1:18:34David Hoffman?

  Oh, this is a good one.

• 1:18:35Ryan Sean Adams?

  Yeah, I thought this... Look, so we've been talking about EIP1559. By the way, David, how much are we burnt since the start of this recording? Well, you're looking that up. I think EIP1559, I said this, is the ultimate jujitsu move for Ethereum. Why? Because in order to copy it, competitors have to get the one thing they've never had, and that is actual block space demand, David. So you can't copy and paste this EIP1559 feature. Like, sure, you can start burning some of your transaction fees, but you have to have transaction fees to burn in order for it to be meaningful. Now, you're about to tell me that the number of ETH that has been burnt since the beginning of this episode. How much is it?

• 1:19:15David Hoffman?

  Yes.

• 1:19:17Ryan Sean Adams?

  Uh, I'm gonna say

• 1:19:18David Hoffman?

  It was 880 since when, since we last talked, I believe. How much, how much do you think is that now?

• 1:19:23Ryan Sean Adams?

  We're, I, okay, so I said 200, 950, how about that?

• 1:19:28David Hoffman?

  So, gas prices have jumped significantly since then. Gas prices are currently at 277, so something's going on.

• 1:19:33Ryan Sean Adams?

  Yikes, whoa.

• 1:19:35David Hoffman?

  And the most recent block that just got mined burned five ether. We are at 1500 ether. We are at 1500 ether.

• 1:19:44Ryan Sean Adams?

  What happened?

• 1:19:44David Hoffman?

  For the last few, I don't know, something's going on, something's going on.

• 1:19:47Ryan Sean Adams?

  You better check the price.

• 1:19:47David Hoffman?

  NFT, uh, yeah, holy shit, like, is it up or down? I have no clue. But yeah, uh, for the last, like, 10, 20, all the block, all the blocks that I can see right now have burned more ether than issued.

• 1:19:59Ryan Sean Adams?

  That's insane.

• 1:20:00David Hoffman?

  That's insane. Well, I don't know what's going on, but bullish, bullish.

• 1:20:03Ryan Sean Adams?

  Okay, I mean, and, and here's the thing that's

• 1:20:05David Hoffman?

  It's not the price, price is stable.

• 1:20:07Ryan Sean Adams?

  The thing that's impossible to emulate, and the reason why this is a jujitsu move for Ethereum versus all ETH killers, other competitors, is Ethereum's biggest strength, block-based demand. People will pay to get a transaction in, and they've been building this for the last five or six years. It's already flipping a Bitcoin by far on that count. Um, like, no other chain is even close in terms of transaction volume, right? Like, in terms of block space, uh, revenue or demand. Um, Ethereum is the only chain that can essentially pull off EIP 1559

• 1:20:39David Hoffman?

  Effectively, yeah.

• 1:20:40Ryan Sean Adams?

  And use it and pump it into its, uh, its assets. So, dude, game, set, match.

• 1:20:45David Hoffman?

  Right.

• 1:20:45Ryan Sean Adams?

  I mean, like, you gotta work hard and get that block-based demand. That's how you compete against Ethereum, if you want to do that.

• 1:20:51David Hoffman?

  Yeah, the, the Avalanche community has always been teasing Ethereum about how they implemented EIP 1559 on Avalanche like nine months ago, and in the first three hours of EIP 1559 going live on Ethereum, ETH, more ether was burned than in all of nine months of Avalanche's EIP 1559 being live, right? And so, like, cool, you guys got it first, but like, when, as, it takes two seconds for us to catch up with you once it goes live, and that's the power of block-based demand.

• 1:21:17Ryan Sean Adams?

  You got to put the hard work in and the hard work is block space demand. So get there. Let's see this last take from Hsu, David. Why don't you read it out?

• 1:21:25David Hoffman?

  Yeah, Hsu says, "Success is a muscle. Every important upgrade that Ethereum has successfully merged, the beacon chain, now EIP 1559, increases the chance that future important upgrades, the merge, sharding, block proposer slash builder separation, will also be successful. Another way of framing it, ETH prices in a ton of execution risk. I know because I was, that was a big part of my own thesis. Every milestone makes that execution risk go down. This is what we have been saying on a bank list forever. If you're cool with execution risk, buy ETH early. But every time we successfully hard fork, that execution risk goes down, right? And so you should plan for that accordingly in your valuation of Ether. And honestly, at this point, with the beacon chain behind us and EIP 1559 behind us,

• 1:22:10David Hoffman?

  two very complicated updates in the rearview mirror, the last major update is the merge. And like maybe sharding, but like not that major and very distant off into the future. Like, how much execution risk is left before people FOMO? And maybe that's why people have been definitely FOMOing into Ether right after EIP 1559 went live and Ether went from 26 to 2800 in just an hour or so. Success is a muscle. Ethereum is proven out that it executes upon its roadmap, maybe late, but it does execute. And so betting against Ethereum at this point is just completely irrational.

• 1:22:45Ryan Sean Adams?

  Again, in my opinion. There you go. Got nothing to add. David, what's exciting this week for you?

• 1:22:51David Hoffman?

  EIP 1559, sir. I would like to go back two years and say, like, there was a time where EIP 1559 got introduced. A few people like latched on to it. You, me, Anthony Cisano, Eric Connor, who introduced it, DC Investor, a few others. They all saw the power in this. We all like wrote articles. We made podcasts. We tweeted about it. We tried to do our best to shout from the rooftops, like, this is coming. And now it's finally here, which makes me feel really good, is one important step forward to Ether as ultrasound money. And what really excites me that's specific and nuanced other than just Saying EIP 1559 is here is that EIP 1559 has so much metric surface area that are so many new

• 1:23:34David Hoffman?

  metrics that have come alive now that EIP 1559 is here. ETH burn rate, the base fee, the tip amounts, like the block, the how full the block is. There are so many things and numbers and variables to talk about. And honestly, like, what gives more people more confidence in in an unknown asset are like numbers and metrics to like consume and analyze and discuss. And not only that, it gives new people confidence. It gives older people like us more things to talk about. This is why I said earlier, there's so many more metrics that we get to talk about on the weekly roll up. So like, we're going to go back and like, talk about how much ETH is burned. It's probably going to be part of the the every single week. Since we last talked about how much ETH was burned, we burned 70 more ETH. So that's pretty cool.

• 1:24:20David Hoffman?

  And so all of these metrics are legitimizing in of themselves, even though we literally invented them out of thin air. Like, we just, the industry invented this thing called crypto economics. Ethereum invented this thing called EIP 1559. Now we've invented this metric called ETH burn rate. And now because we get to talk about it, it's legitimizing. It's cool. People get to talk

• 1:24:38Ryan Sean Adams?

  about it. I can't, I can't wait to read all about it in Goldman Sachs next white paper on why you should invest in ETH. We're going to see burn metrics in these, in these like analyst papers now. Super cool.

• 1:24:48David Hoffman?

  Yeah. Ryan, I think I have a guess what you're excited about. Why don't you tell me?

• 1:24:52Ryan Sean Adams?

  Look, man, it's gotta be EIP 1559.

• 1:24:54David Hoffman?

  Oh, really?

• 1:24:55Ryan Sean Adams?

  EIP 1559 roll up. And I'm just gonna riff on what you said. I feel like, you know, coming off of the the 2017, 2018 crash, right? Like, everyone, I think a lot of people recognize that the Ethereum network was amazing. And there was this whole mantra of Ethereum, not ETH. Like, Ethereum, the network is amazing. ETH the asset, who cares? That thing sucks. Buy Bitcoin instead. Just a means to an end. And like, some of us felt like that was a massive mistake, right?

• 1:25:29Ryan Sean Adams?

  Like it didn't even make sense, doesn't make economic sense. If you are striving to become

• 1:25:36Ryan Sean Adams?

  a strong, highly secure economic network, you need the price of ETH to reflect that as well. That's where you get your economic security. And so we pushed back against that. I think there was this concept, David, you remember of economic abstraction, right? The idea that we don't even need ETH to even pay for miners. Why is it even there? It can collapse to basically zero and no one would care. We can use stablecoin or maybe Bitcoin to pay miners. We pushed against that. Well, now we no longer have economic abstraction. Like I think we've never had it in reality, but the protocol has enshrined. What's the opposite of abstraction, like concreteness? Now I have economic concreteness of ETH asset.

• 1:26:20David Hoffman?

  I don't think that meme is gonna stick.

• 1:26:21Ryan Sean Adams?

  I don't think it's gonna stick either, but like that's what we have. And this is, this is really exciting because I think there's been a renewed emphasis at the protocol level on ETH asset that we've been pushing for since 2018, 2019, 2020, 2021. Now it's here, it's being baked into the protocol and it's just super exciting to see. And like, this is why it's important is because the end game, we want to build a bankless, open financial system for everyone. And in order to do that, we need high security, right? We need the economic bandwidth to support all of the world's assets, all of the world's transactions. And man, that chink in the armor that ETH had, where it had a great network, didn't have a great asset,

• 1:27:04Ryan Sean Adams?

  completely like equalizing here. Now you got the, you got the yin and the yang, you got a great network. You also have a fantastic asset and people are starting to realize that. And I think they'll realize it more as those metrics are going to be displayed everywhere. And we're going to keep refreshing those burn pages to see how much ETH that we're going to burn. And then it's onward towards the merge. That's the next live stream we're doing, David. In the live stream this morning, last question for you. Did you hear the dates? What are like the anticipated dates for the ETH to merge? And the end of proof of work, what do you think that's gonna be?

• 1:27:38David Hoffman?

  Yeah, Justin Drake, who's famous for giving out dates a little bit ahead of consensus, said Q1 2022, which is the date I've been giving out more or less. If we hit it in Q1 2022, that would be actually, well, the first hard fork that we actually got on schedule. For some reason, maybe I'm naive, I actually believe in it. So Q1 2022.

• 1:27:59Ryan Sean Adams?

  All right. You know, I thought we had a good shot of hitting July for EIP 1559. And that was like some early estimates, like two months off. So still pretty close. Right. And I think this is going to be, if it's not Q1 2022, it's got to be Q2. Right. It's going to be really close to Q1 anyway.

• 1:28:16David Hoffman?

  Just like Kazu said, success is a muscle. And now our core developers are getting better and better and better at hitting hard fork deadlines.

• 1:28:23Ryan Sean Adams?

  Yeah, totally.

• 1:28:24David Hoffman?

  Even though there's not, there's not a deadline, but like not delaying too much.

• 1:28:27Ryan Sean Adams?

  David, let's talk meme of the week, man. What is the meme of the week? I'm going to share my screen. This is one from Robert Leschner and some of the DeFi builders, some of the crypto native builders.

• 1:28:36David Hoffman?

  Right. So Robert Leschner randomly tweets out, who is in crypto in New York City right this second and wearing blue, wearing blue? I need you for a mission. And then later Hayden Adams tweets out this photo, how it started. And then new photo, how's it going? And so the first photo is that, that weird meme going around of Bill Murray, plus three other actors. Kind of just like all awkwardly standing weirdly, plus with interesting outfits. And there's this one lady in this like very, very vibrant fiery blue suit, uh, look like an absolute rock star. And then like everyone kind of has their own deal going on. Nothing really makes any sense.

• 1:29:11Ryan Sean Adams?

  Feeling on this. This is definitely a vibe going on.

• 1:29:13David Hoffman?

  Definitely a vibe. It looks like there's four vibes going on for every four actors. And then, and then Robert, uh, and excuse me, Hayden Adams tweet this tweets this out. We got from, from left to right, we got Hayden Adams, we got Kane from Synthetix, we got Jameis Johnson from Pleaser Dell. And then we got Robert Leschner on the right, and they are just recreating the meme, which is hilarious because this is a decentralized industry. Kane is from Australia, Hayden is from New York, Robert Leschner, I'm pretty sure is from San Francisco. And they, they all made, they all made it happen. And then interestingly, Kane was the only person that had a white haired crypto punk before this image. But for some reason, they all decided to buy white haired crypto punks and put it as their avatar.

• 1:29:57David Hoffman?

  And so now this is the white hair crypto punks moment. The other cool, interesting, like a little bit, little Easter egg in this photo is that Bill Murray, for some reason, is wearing two watches. And so is Robert Leschner, the person that's Bill Murray's correlate. Yeah. Robert Leschner got two watches on. It was just, I think this was a fun little moment. When, when Robert Leschner tweets out, who's in New York City wearing blue right this moment? We get Jameis Johnson showing up, looking like an absolute G in a blue suit. Uh, I thought that was pretty cool.

• 1:30:24Ryan Sean Adams?

  Yeah, that's awesome. All right, guys. This has been the Weekly Rollup Special Edition EIP 1559. As always, none of this was financial advice. Ether is risky, crypto is risky, all of DeFi is risky. You could definitely lose what you put in, but we are headed west.

• 1:30:41David Hoffman?

  And we like it!

• 1:30:41Ryan Sean Adams?

  The wild west. We're okay with heading west. Thanks for joining us on the Bankless journey. See you later.

• 1:30:48David Hoffman?

  Hey, we hope you enjoyed the video. If you did, head over to Bankless HQ right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence. We recommend joining our daily newsletter, podcast, and community as a Bankless Premium subscriber to get the most out of your Bankless experience. You'll get access to our market analysis, our alpha leaks, and exclusive content, and even the Bankless token for airdrops, raffles, and unlocks. If you're interested in crypto, the Bankless community is where you want to be. Click the link in the description to become a Bankless Premium subscriber today. Also, don't forget to subscribe to the channel for in-depth interviews with industry leaders, Ask Me Anythings, and Weekly Rollups,

• 1:31:31David Hoffman?

  where we summarize the week in crypto and other fantastic content. Thanks, everyone, for watching and being on the journey as we build out the Bankless nation.