ROLLUP: Silvergate Liquidate?! | Elizabeth Warren vs. Binance | Bankless 2.0 Announcement | SEC Taking Ls?

Bankless Weekly Rollup 3rd Week of March 2023 ------ 📣 RhinoFi | Makes DeFi Frictionless https://bankless.cc/rhino ------ 🚀 JOIN BANKLESS PREMIUM: https://www.bankless.com/dashboard ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://bankless.cc/kraken 🦊METAMASK LEARN | HELPFUL WEB3 RESOURCE https://bankless.cc/MetaMask ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum 🚁 EARNIFI | CLAIM YOUR UNCLAIMED AIRDROPS https://bankless.cc/earnifi 👻 PHANTOM | CROSS-CHAIN WALLET https://bankless.cc/phantom ------ Topics Covered 0:00 Intro 3:23 Markets 8:04 Total Crypto Market Cap 8:50 Fed https://www.reuters.com/markets/rates-bonds/feds-powell-previews-tougher-rate-hike-path-starting-soon-2023-03-08/ 10:00 Warren vs. Powell Address https://youtu.be/8Kz4pm5l4Og?t=126 14:35 Records of the U. S. https://twitter.com/kobeissiletter/status/1632408557101432833 15:50 Stablecoin Check-In https://www.coingecko.com/en/categories/stablecoins 19:32 Silvergate https://www.coindesk.com/policy/2023/03/08/crypto-bank-silvergate-announces-voluntary-liquidation/ 26:49 Warren https://twitter.com/SenWarren/status/1633611272372486144 30:21 Binance https://twitter.com/MikeBurgersburg/status/1631489833838297088 https://archive.ph/w7QNe 36:20 Voyager https://cointelegraph.com/news/sec-snubbed-as-voyager-wins-court-approval-for-sale-to-binance-us 37:43 Grayscale v. SEC https://twitter.com/jeffjohnroberts/status/1633130559353372672 https://www.reuters.com/legal/court-set-hear-arguments-grayscales-lawsuit-against-sec-over-bitcoin-fund-2023-03-07/ 42:57 Bankless 2.0 https://www.bankless.com/dashboard 47:12 Bankless ETH Denver Interview series https://twitter.com/BanklessHQ/status/1633559479588454401 49:33 Coinbase https://twitter.com/coinbase/status/1633473042000101378 51:35 One River https://www.coinbase.com/blog/coinbase-has-acquired-one-river-digital-asset-management 52:20 Commercial https://twitter.com/coinbase/status/1633222932255358976 54:25 Tornado Cash Contributors' Proof of Innocence https://twitter.com/ameensol/status/1629942658008514560 https://www.privacypools.com/ 57:25 Uniswap Wallet https://twitter.com/uniswap/status/1631691330031169537 58:21 Rocket Pool https://medium.com/rocket-pool/rocket-pool-atlas-upgrade-7c69e39a3d5f 1:00:00 rETH Collateral on EulerFinance https://twitter.com/MacroMate8/status/1633490076511666176 1:00:50 Arbitrum Token https://twitter.com/PolymarketHQ/status/1632815834858164225 1:02:10 Cosmos Interchain Security https://blockworks.co/news/cosmos-greenlights-interchain-security 1:05:58 Sovereign Rollup on Bitcoin https://twitter.com/RollkitDev/status/1632438374513676288 https://twitter.com/ercwl/status/1632460687069913088?s=20 1:09:55 Yuga Labs $16.5M Bitcoin NFT Auction https://twitter.com/yugalabs/status/1632878847778512898 1:11:31 Casey’s Take https://twitter.com/rodarmor/status/1632573965897170948 1:13:05 Ordinals Not dead! https://twitter.com/zackvoell/status/1633879858915704846?s=20 1:13:59 Amazon NFT Marketplace https://blockworks.co/news/amazon-nfts-real-world-assets-token 1:15:13 Multicoin Capital’s Hedge Fund Lost 91.4% in 2022 https://www.coindesk.com/business/2023/03/04/multicoin-capitals-hedge-fund-lost-914-last-year-investor-letter-reveals 1:17:58 Emojis https://therug.mirror.xyz/TZVv0Y5TG74q3ARKa8DcTSiGgAyeKAOIlndW4MHya1M 1:19:37 Cooper Turley new Music NFT podcast https://twitter.com/invinmusic/status/1633543529493577728 1:20:02 Scroll $1.8B Valuation https://www.theblock.co/post/217340/ethereum-scaling-scroll-50-million-funding-round-1-8-billion-valuation 1:21:10 Jobs https://pallet.xyz/list/bankless/jobs 1:23:48 Questions from the Nation 1:30:25 Takes https://twitter.com/mdudas/status/1633571193344126979 https://twitter.com/pmarca/status/1633738311922782209 https://twitter.com/joonian/status/1632899301230669824 1:34:00 What David’s Bullish On https://twitter.com/TrustlessState/status/1632479927093035009 1:35:30 What Ryan’s Bullish On 1:39:12 MEME of the Week https://twitter.com/BanklessHQ/status/1632066015428497418 1:39:53 Risks & Disclaimers 1:40:07 Moment of Zen https://imgur.com/6H07xT1 ---- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://www.bankless.com/disclosures

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

• 0:00Ryan Sean Adams?

  We got something called Bankless 2.0 that's just dropping at 12:00 PM today Eastern on March the 10th, 2023, a whole new website, a whole new experience for members, a whole new bankless, a whole new era. My God, it's a whole new everything, whole new media company. What else, David?

• 0:18David Hoffman?

  The bull market starts today.

• 0:23Ryan Sean Adams?

  Bankless Nation, it is the second Friday of March. David, what time is it?

• 0:27David Hoffman?

  Ryan, it's the Bankless Friday Weekly Roll-Up, where we cover the entire weekly news in crypto, which is always an ambitious endeavor, especially in this economy. Yet we persevere nonetheless because we've got Coffee with us.

• 0:40Ryan Sean Adams?

  We have Coffee, we've got news, we've got crypto. What more could you ask for this morning? We've got some topics of the week, too. The Silvergate liquidation event, we're going to cover that. This is crypto's TradFi bank. Did the politicians cause a bank run here? We're going to get into that story. What else we got, David?

• 0:57David Hoffman?

  Elizabeth Warren versus Binance also on the table. Liz Warren on a rampage. It's not Gary Gensler this week, it's Elizabeth Warren. And then after that, the SEC taking an L. So as Elizabeth Warren comes into the main character, Gary Gensler taking a backseat. Maybe two Ls. Is it too good to be true? We'll talk about all of that and more. And perhaps the biggest news of the week, Ryan, which I know you're excited about. Tell me about it. Tell me what's the biggest news of the week.

• 1:28Ryan Sean Adams?

  We got something called Bankless 2.0 that's just dropping at 12:00 PM today Eastern. All right, so listen to this on a Friday morning, maybe later. If it's later, this thing has dropped already. 12:00 PM Eastern on March the 10th, 2023, a whole new website, a whole new experience for members, a whole new bankless, a whole new era. My God, it's a whole new everything, whole new media company. What else, David?

• 1:53David Hoffman?

  The bull market starts today.

• 1:56Ryan Sean Adams?

  We're calling it.

• 1:57David Hoffman?

  The drop of Bankless 2.0.

• 1:59Ryan Sean Adams?

  Guys, we're super excited about this because we've been working on this for a while. This is a new experience for our free members and then for those of you who are Bankless citizens to upgrade. So go check it out, bankless.com. We'll talk about it a little bit more in the episode. David, before we get in here, gotta talk about our friends at RhinoFi. Tell us about the Rhino, David.

• 2:19David Hoffman?

  Rhino is the one-stop DeFi app to do all of your Layer 2 things. So if you don't want to do any more bridging, if you don't want to do any more network switching, if you don't want to deal with native gas tokens, but you still like doing DeFi things like trading, swapping, investing, pooling, and generally earning yield wherever yield is available in DeFi, Rhino is available for you. It gathers all of the best multi-chain opportunities and puts it all into one specific, beautiful interface, unless you do your DeFi stuff in a bankless way on Layer 2s without all the Layer 2 complexity. There is a link in the show notes to get started. You can go to app.rino.fi to check it out.

• 3:00Ryan Sean Adams?

  That's the key, in a bankless way. So don't have to depend on the BlockFi's or the Celsius's. This is all bankless technology. This is all DeFi.

• 3:08David Hoffman?

  Chains, all the chaininess. All the chaininess without all of the the surface area for, you know, having to deal with what chain you're on.

• 3:16Ryan Sean Adams?

  All the chaininess, zero of the Mashinsky-ness.

• 3:21David Hoffman?

  We gotta work on this.

• 3:23Ryan Sean Adams?

  All right, markets. What are the markets this week? Bitcoin?

• 3:26David Hoffman?

  Bitcoin down. It's a sad week and we're gonna talk about why shortly. Started the week at $23,500, down 8.7%, oof, down to $21,500.

• 3:37Ryan Sean Adams?

  Did the Fed do this? Is this why?

• 3:39David Hoffman?

  The Fed did this one, yeah.

• 3:40Ryan Sean Adams?

  The Fed did this.

• 3:41David Hoffman?

  Yeah, we were like, I'm not some sort of market guru, but my sentiments were like bully, bully, bully. And then the Fed came and was like, no, no bully.

• 3:49Ryan Sean Adams?

  You can't have that, not this week.

• 3:51David Hoffman?

  Not yet, not yet.

• 3:52Ryan Sean Adams?

  You're telling me Powell doesn't care that Eat Denver was going on and he was just striking us down anyway? He's not coming off the high of Eat Denver and he's just like pushing down crypto prices? Can he do that to us?

• 4:04David Hoffman?

  We were just having way too much fun out there. He's like, that is an illegal amount of fun. So I'm going to raise rates. That's what happened.

• 4:11Ryan Sean Adams?

  How about ETH price?

• 4:12David Hoffman?

  ETH price, also sad. Started the week at 1650, down 7.3% to where we are now at 1525.

• 4:20Ryan Sean Adams?

  Well, you know what? We had, what did we have? Three, four good weeks in a row?

• 4:23David Hoffman?

  It was a pretty good one. We had a good, we had a good attempt. It was, it was fun while we, while it lasted. Now we're back down to Goblin Town. Down we go.

• 4:31Ryan Sean Adams?

  This isn't Goblin, this isn't Goblin Town to me.

• 4:33David Hoffman?

  I'm saying we're going there.

• 4:35Ryan Sean Adams?

  Well, like, what is Goblin Town to you right now? This phase of the market?

• 4:39David Hoffman?

  If we get down to 1200, maybe below 1300, I will say we are, have arrived at.

• 4:45Ryan Sean Adams?

  Bitcoin.

• 4:46David Hoffman?

  No, Ether price.

• 4:47Ryan Sean Adams?

  Oh, okay. 1200, not 12,000.

• 4:49David Hoffman?

  Correct. Oh, God, if we're a 12,000 Bitcoin man, we are, we're in a nine circle. We did something wrong. Yeah, so this is, maybe this is the run up to like 1700 that Ether had and like whatever Bitcoin got to, 25,000.

• 5:07David Hoffman?

  Maybe that was the mid, the year high, maybe.

• 5:10Ryan Sean Adams?

  Look, man, I still.

• 5:11David Hoffman?

  Maybe we're going to Goblin Town.

• 5:12Ryan Sean Adams?

  It's the same people. It's still the same people that are in. So like, if you were holding three weeks ago, you're holding last week, you're holding the week before, you're still holding now. I feel like this is the same crowd. It's not like.

• 5:22David Hoffman?

  Yes, there's no.

• 5:23Ryan Sean Adams?

  People saw a minor run up and were like, oh, crypto's back. That has not happened yet anyway. So we're just crabbing with the same people in the market. And I'm not surprised. I think this is just part of the build market that we're in.

• 5:35David Hoffman?

  This is, here's my take is that I'm always, I'm the purple ball. We're both purple balls here. I think that there's like regulatory FUD that keeps on hammering at us. And crypto is scared of that. And it's always been scared of regulatory FUD. Like regulatory FUD comes in, crypto dumps, and it dumps for like a day or a week, but it never is sustained. It's always a short-term blip. My bull case is that that is also true of this rising interest rate fears is like.

• 6:06Ryan Sean Adams?

  Yeah.

• 6:06David Hoffman?

  Crypto's like, oh, no, interest rate's still not over yet. And then we'll like, we're right, we're ready to move on from all of this shenanigans. And so it's gonna, we're gonna keep on taking these blows, but they're not systemic blows. They are short-term blows. And so, so long as the blows keep. On coming, they prices are going to be suppressed. As soon as they stop coming, Ryan, I think it's bullish.

• 6:27Ryan Sean Adams?

  Rocket ship.

• 6:28David Hoffman?

  Yeah, Chris Bernisky put out this tweet not too long ago. It's like it's a Bitcoin is a beach ball that's trying to like rise to the surface. As soon as the Fed and soon as Elizabeth Warren goes away, that ball is poking right up. But right now they're doing a pretty good job of pushing it down, but it's like.

• 6:42Ryan Sean Adams?

  Beach ball underwater.

• 6:44David Hoffman?

  Underwater, excuse me. Yes, the beach ball is underwater. Yeah. And so crypto wants to rise. It just keeps getting pummeled. But the, the point is that equilibrium is that crypto wants to rise. It needs external forces to keep it suppressed. That's my take right now.

• 6:58Ryan Sean Adams?

  Good take. Good take. I support that take, David.

• 7:00David Hoffman?

  I made that one up just now.

• 7:02Ryan Sean Adams?

  How about the Bitcoin ETH price? What do you think?

• 7:04David Hoffman?

  We are up 1.5% on the week, above point 07. For the first time in a while, we are at point 071.

• 7:10Ryan Sean Adams?

  I want to thank Kraken for providing these incredible charts. This is all by way of Kraken Pro. And let me remind you, Kraken was a crypto exchange and a crypto platform that did not fail you in 2022. These are one of the good guys, one of the OGs that been with us from the beginning, doing things the right way. And putting out some great charts.

• 7:31David Hoffman?

  Yeah, if you want some, some reckless history, like go back, go back a year from now on the weekly roll up, like go to a 2021 weekly roll up and see just Ryan floundering on the charts. Sorry.

• 7:43Ryan Sean Adams?

  And now look at him, man. Now, now look at how good these charts look. I got candles. I got ratios. I got tabs and tabs.

• 7:51David Hoffman?

  Candle at the end. Man, that's just great.

• 7:53Ryan Sean Adams?

  Yeah, I got the sole Bitcoin ratio. If I want that.

• 7:57David Hoffman?

  How's that doing? Oh, still not great.

• 7:59Ryan Sean Adams?

  It's still not great. No, I don't, but I like to keep it there just for fun because I can.

• 8:04Ryan Sean Adams?

  Crypto market cap, are we above a trillion?

• 8:07David Hoffman?

  Yeah, but not by much. We are at 1.02 trillion. Just holding it there.

• 8:13Ryan Sean Adams?

  Yeah, below a trillion is starting to feel bearish. It's starting to feel, not Goblin Town. Goblin Town for me is like, eh, 600 million.

• 8:22David Hoffman?

  I don't think we got down to 600 million. 800 million is Goblin Town.

• 8:25Ryan Sean Adams?

  What did we do? Let's, let's look at it.

• 8:27David Hoffman?

  I think we got down to seven, the high 700 million.

• 8:30Ryan Sean Adams?

  What do I have to do? Max. See, this is not a nice, um, this is not Kraken level charts.

• 8:35David Hoffman?

  Charts are not Kraken's charts.

• 8:36Ryan Sean Adams?

  Let me see.

• 8:37David Hoffman?

  Their charts are not charts.

• 8:39Ryan Sean Adams?

  I can't see it here. Yeah, you're fine. Oh, actually, whatever. I've given up on this chart. Kraken, can you guys do a total crypto market cap chart? Please, Kraken. Please. Let's get into some market news. Okay, so we alluded to this, but here's a Reuters headline. The Fed Powell's preview, the Fed's Powell previews tougher rate hike path starting soon. Here's a quote from Fed Chair Powell, who controls all things markets, of course, we know. He is, he is the god. The god, dollar is god and Powell is the word of the dollar. High priest. Powell's the post, the pope. Nothing about the data suggests to me that we've tightened too much. Indeed, it suggests that we still have work to do.

• 9:21Ryan Sean Adams?

  It's getting, getting hawkish on the rate hikes there. It's hard to make the case that we've, that we've over tightened means we need to continue to tighten. That's what he said. There was a, I saw this clip, David, and I want to play it for you. I don't know if you've seen this, but this was a Warren versus Powell on this very point. And as we get into this clip, basically Powell is saying, hey, we need to fix inflation. Here's how we have to do it. You, you keep tightening until inflation is fixed. And Warren is saying, but what about a recession? What about the jobs? What about my votes? Right. So let's play this. I'm going to get your reaction to this. You ready? I haven't seen this. Okay.

• 10:01Speaker 02

  Putting 2 million people out of work is just part of the cost and they just have to bear it.

• 10:05Speaker 03

  Well, they will, will working people be better off if, if we just walk away from our jobs? And, and inflation remains 5, 6%?

• 10:13Speaker 02

  Let me ask you about what happens if you do this. Since the end of World War II, there have been 12 times in which the unemployment rate has increased by one percentage point within one year, exactly what you're aiming to do right now. How many of those times did the US economy avoid falling into a recession?

• 10:37Speaker 03

  You know, it's not as black and white as it very

• 10:40Speaker 02

  Just looking at the numbers. It actually is pretty black and white.

• 10:43Speaker 03

  Alan Blinder's written a book on this and

• 10:44Speaker 02

  There have been 12 times that we've seen a one-point increase in the unemployment rate in a year. That's exactly what your Fed report has put out as the projection and the plan based on how you're going to keep raising these interest rates. How many times did the economy fail to fall into a recession after doing that out of 12 times?

• 11:05Speaker 03

  I think the number is zero.

• 11:07Speaker 02

  I think the number is zero. That's exactly right. So

• 11:12Ryan Sean Adams?

  There you go.

• 11:12David Hoffman?

  She's like trying to do a checkmate on Powell.

• 11:17Ryan Sean Adams?

  Gotcha. We're going to lose jobs. You're going to send us into a recession. And Powell's response is inflation is worse.

• 11:25David Hoffman?

  Right.

• 11:25Ryan Sean Adams?

  Inflation is also not good for American citizens, nor workers, nor those 2 million people. It erodes. And Warren is saying, but you're going to cause a recession this way. What's interesting

• 11:37David Hoffman?

  And then he says, yeah, you're right. And she's like, gotcha. And he's like, you idiot, read a book. And I feel for him because he's like, trying to explain himself, but she won't let him. And when I see this clip, I just see like, this is the politician playing the politician game.

• 11:54Ryan Sean Adams?

  Yes.

• 11:54David Hoffman?

  And it's so cringe, man. It's so cringe.

• 11:56Ryan Sean Adams?

  Let's remember that politicians are definitely influencers and they are happy to throw anyone under the bus, including central bankers.

• 12:04David Hoffman?

  Right.

• 12:04Ryan Sean Adams?

  If it scores them influencer clout points, right?

• 12:08David Hoffman?

  This is the state trying to politicize the money. This is what this is.

• 12:13Ryan Sean Adams?

  The fact that obviously this is working because we just played the clip. Like, it was just, that's the exchange. But I do think that there is a pressure from Congress coming to Powell saying, you can't cause a recession. But Powell's going like, well, what are you guys going to do about inflation?

• 12:27David Hoffman?

  Right.

• 12:27Ryan Sean Adams?

  What's interesting to me, David, is Congress doesn't, they don't have answers to what we're going to do about inflation. In fact, I would argue that a lot of the consumer CPI inflation is actually not Powell's fault. You guys know we are not Powell simps at Bankland, all right? There's a lot of things that central bankers Do that are not awesome for like all sorts of things, right? They definitely have their their hands on the money printer. You know who else does fiscal policy, Congress, our executive branch? They can also print money and they did a lot of that fiscal spending during during.

• 13:01David Hoffman?

  They only print money. That is up into the right chart.

• 13:03Ryan Sean Adams?

  I think you can say central bankers are largely responsible for massive wealth inequality, mass asset price inflation since like the bailouts of 2008. It's been a flawed policy from the beginning. But I don't think you can point to them and say, hey, you are the sole reason for the last two to three years of CPI inflation. You can't, you have to take responsibility for fiscal policy and the fact that countries are overspending relative to the tax earnings. And so you have to either increase taxes or you have to not spend as much. And there is no accountability on Congress to actually do. So I feel like they're kind of throwing Powell under the bus and I can't believe I'm defending Powell right now.

• 13:42David Hoffman?

  But I said the same thing. It's like, wow, I'm on Powell's side on this Elizabeth versus Powell debate. My gosh.

• 13:49Ryan Sean Adams?

  Anyway, like, what does this mean for crypto? Look, battles back and forth. It means that fiscal policy and the money printer will continue to like go burr. Like, I think no matter what, I think some of that's going to come from Congress. Some of that's going to come from central bankers.

• 14:05David Hoffman?

  Right. The political influence of aggregate congressional members is significantly more than what the Fed can probably withstand, probably.

• 14:14Ryan Sean Adams?

  And no one wants to pay, like, we don't want to swallow the the difficult medicine. We don't want to get off the morphine drip.

• 14:19David Hoffman?

  We don't want to reduce our quality of life because that's ultimately what this means. It's like, do we want to pay back our debts? Do we want to increase interest rates? Well, we all need to stop, start consuming less. We all need to start being more efficient. We all need to stop having this extravagant American lifestyle that we're used to over the last 50 years. And no one wants to hear that. Especially not the boomers.

• 14:37Ryan Sean Adams?

  Let's talk about that.

• 14:38David Hoffman?

  Sorry boomers.

• 14:39Ryan Sean Adams?

  Debt. What about the debt here? Read this tweet out.

• 14:43David Hoffman?

  The US now has a record 16.5 trillion in household debt, a record 11.9 trillion in mortgages, a record 1.6 trillion in auto loans, a record 986 billion in credit card debt. This is what I was talking about. This is the extravagant lifestyle. We're beyond our means as a country. We have been for my entire life, all of probably all of these listeners' entire lives. Total mortgage debt is now double the 2006 peak, right before the 2008 crash. Meanwhile, 30% of Americans have more credit card debt than savings, with balances rising at the fastest pace since 1999. This is all while mortgages rates just hit 7.1% and credit card debt hit a record 25%. We are fighting inflation with debt. This cannot end well. Wow, that's a long tweet.

• 15:28Ryan Sean Adams?

  Yeah, okay. But by the way, how have tweets? Like, how long can tweets be now?

• 15:32David Hoffman?

  That was a really long tweet. My gosh.

• 15:34Ryan Sean Adams?

  Like, you can keep going. It's not only...

• 15:36David Hoffman?

  Oh, yeah, you can. They're almost limitless, dude.

• 15:38Ryan Sean Adams?

  Limitless tweets. I don't know if I like that, but I'll see how it goes.

• 15:41David Hoffman?

  You know, we're inflating. Inflation is the name of the game these days, including tweet length.

• 15:45Ryan Sean Adams?

  Got to inflate tweets. Inflating our tweets. The Twitter money printer keeps going. Stablecoin check in. Let's talk about crypto markets for a second, though. USDT is on the rise. It's the highest level in 15 months. That is, of course, Tether. David, why is Tether going up?

• 16:02David Hoffman?

  This has got to be as a result of outflows from BUSD, right? So, BUSD going down, USD going up, right? That's got to be the conclusion here.

• 16:11Ryan Sean Adams?

  I think that's what's happening, yeah. Tether's gain came mostly at the expense of BUSD. After the Paxo announcement, we talked about that last week, announcing they were halting new minting of BUSD, and it's grown 5.3 billion to a total of $71 billion in Tether, which, is Tether fully backed? We think so, kind of, mostly. I don't know.

• 16:35David Hoffman?

  That's not, that's not Tether's product, brother. Tether's product is being an offshore stablecoin.

• 16:39Ryan Sean Adams?

  That's right. And that's what BUSD was maybe filling part of, and Tether is just going to take that. So, the US system has no ability to go find, hunt down Tether. Can they do that? I mean, this is outside of the bounds of US jurisdiction.

• 16:54David Hoffman?

  Right.

• 16:55Ryan Sean Adams?

  But the US does have jurisdiction over some other things. We're going to talk about that when we come back. David, what are we covering next?

• 17:01David Hoffman?

  Silvergate liquidate is the only two words I'll say about that. Elizabeth Warren returns versus Binance and the SEC taking an L, perhaps two, is the tide turning against the SEC. And we'll probably talk about some ETH and B Chatter as well, among other things. Also, of course, beyond all of that, the biggest news of the week, Bankless 2.0. You know that's coming. So we're going to get to all of that and more right after we talk to some of these fantastic sponsors that makes this show possible, especially Kraken, our strategic sponsor for 2023, who supplies this market section of the Bankless Weekly roll up with the most beautiful charts that you've ever seen. Here we go. Kraken has been a leader in the crypto industry for the last 12 years. Dedicated

• 17:43David Hoffman?

  to accelerating the global adoption of crypto, Kraken puts an emphasis on security, transparency, and client support, which is why over 9 million clients have come to love Kraken's products. Whether you're a beginner or a pro, the Kraken UX is simple, intuitive, and frictionless, making the Kraken app a great place for all to get involved and learn about crypto. For those with experience, the redesigned Kraken Pro app and web experience is completely customizable to your trading needs, integrating key trading features into one seamless interface. Kraken has a 24/7 365 client support team that is globally recognized. Kraken support is available wherever, whenever you need them, by phone, chat, or email. And for all of you NFTers out there, the brand new Kraken NFT beta platform gives you the best NFT trading experience

• 18:27David Hoffman?

  possible. Rarity rankings, no gas fees, and the ability to buy an NFT straight with cash. Does your crypto exchange prioritize its customers the way that Kraken does? And if not, sign up with Kraken at kraken.com/bankless. Learning about crypto is hard. Until now, introducing MetaMask Learn, an open educational platform about crypto, Web3, self custody, wallet management, and all the other topics needed to onboard people into this crazy world of crypto. MetaMask Learn is an interactive platform with each lesson offering a simulation for the task at hand, giving you actual practical experience for navigating Web3. The purpose of MetaMask Learn is to Teach people the basics of self custody and wallet security in a safe environment. And while Metamask Learn always takes the time to define web three specific vocabulary,

• 19:12David Hoffman?

  it is still a jargon free experience for the crypto curious user. Friendly, not scary. Metamask Learn is available in 10 languages with more to be added soon, and it's meant to cater to a global web three audience. So are you tired of having to explain crypto concepts to your friends? Go to learn.metamask.io and add Metamask Learn to your guides to get on boarded into the world of web three.

• 19:34Ryan Sean Adams?

  Crypto bank Silvergate announces voluntary liquidation. David, why would you voluntarily liquidate? What's happening here?

• 19:42David Hoffman?

  You would voluntarily liquidate when things look so bad that you don't see any viable paths forward. And so crypto friendly Silvergate Bank, of course, has said that it's going to unwind its assets and wind down operations of Silvergate Capital Corporation. Quote from Silvergate, "In light of recent industry and regulatory developments, Silvergate believes that an orderly wind down of bank operations and a voluntary voluntary liquidation of the bank is the best path forward. The bank's wind down and liquidation plan includes full repayment of all deposits." So that's good news. All deposits will be fully repaid according to the liquidation plan. The company did not say how it plans to resolve claims against its businesses.

• 20:24David Hoffman?

  Silvergate is a crypto bank is one of the two main banks for serving crypto companies, along with New York based Signature Bank is the other main one. Just as a size comparison, Silvergate had over $11 billion in assets compared with $114 billion at Signature.

• 20:41Ryan Sean Adams?

  Oh, I didn't know that. So Signature is much bigger, 10x bigger, huh?

• 20:46David Hoffman?

  The FDIC was in urgent talks with Silvergate to find ways to save the crypto friendly bank from shutdown. FDIC examiners arrived at the firm's headquarters last week and have been since reviewing the firm's books and records. The department is evaluating compliance with all financial laws, as well as safety and soundness obligations and is working closely with relevant federal counterparts. So I think there's probably a big question out there is like, was it Silvergate's fault or was it external forces that have caused this?

• 21:15David Hoffman?

  I don't, we'll have to find out. I don't know if there's any reason to suspect Silvergate of anything, but I guess we're going to find out either way. What, do you have a take on this, Ren?

• 21:25Ryan Sean Adams?

  Well, a lot of people in crypto are saying that this is basically a run on the bank.

• 21:30David Hoffman?

  Sure.

• 21:30Ryan Sean Adams?

  Perpetrated by people in power, those regulators and politicians going on the megaphone and saying, like the Operation Choke Point sorts of, sorts of measures. People like Elizabeth Warren, for example, broadcasting this and saying, withdraw, withdraw funds from these crypto banks, these crypto companies. And I would say the broader point is like, remember, guys, we live in a fractional reserve banking system.

• 21:54David Hoffman?

  Right.

• 21:55Ryan Sean Adams?

  That means any bank, whether it's Wells Fargo, Bank of them, any commercial bank that, that you use.

• 22:01David Hoffman?

  Operates on faith.

• 22:02Ryan Sean Adams?

  Operates on faith. And so if there was a run on the bank and you decided to withdraw, all of us decide to withdraw all of our money at once, that's, we can't all get it. It doesn't exist, guys. It doesn't exist. It's a.

• 22:17David Hoffman?

  By design. That's how the system works.

• 22:19Ryan Sean Adams?

  Yes, it's a figment of our imagination. It's all kind of on the ledger and it all works as long as everyone trusts it. And the FDIC has a, you know, 250K guarantee and all of these things. So there is some element, David, where, um, yes, they probably were sloppy in areas is kind of my, my take right now, based on the evidence I've seen. Yes, Silvergate could have done additional AML KYC in places. Um, they could have had some, you know, tighter risk policies, but I don't think it, this is not an FTX type situation, right? I don't think that there was anything incredibly nefarious going on. At least the evidence hasn't borne that out yet. But what I do know is there has absolutely been a run on this bank

• 23:00Ryan Sean Adams?

  and perpetuated in some, in some cases by regulatory congressional influencers who are pushing Silvergate towards the edge. And to that extent, I mean, I would say that is extremely irresponsible.

• 23:15David Hoffman?

  Right. Just to, just to start this from, from the beginning of like, a run on the bank is a fear and emotion based phenomenon from all bank. Customers, clients, depositors of that bank. And so if there is this run on the bank that's happening and the reason why Silvergate is shutting down is because there's just so much net outflow out of the bank because everyone is fearful that Silvergate is going under and that fear perpetuates, right? Like turns into a mind virus. We have to ask ourselves, why did that fear happen in the first place?

• 23:46Ryan Sean Adams?

  Yeah.

• 23:47David Hoffman?

  What's, what is the, the patient zero or the, the trigger of that fear? Do you have an answer for me, Ryan?

• 23:54Ryan Sean Adams?

  I mean, I, I think obviously the entire market is incredibly jittery coming off of FTX. I'm not sure who exactly the patient zero is or what. I do know that the White House is making some comments on the back of this. This is the press secretary at the White House. In recent weeks, banking regulators have released guidelines and how banks should protect themselves from risks associated with crypto. As you know, this is a president that has repeatedly called on Congress to take action to protect everyday Americans from the risk posed by digital assets and he will continue to do so. The risk by digital assets. So that's what's being thrown under the bus here is, is crypto, is digital assets. This is Senate Banking Committee, friend of banks, I might say, Sherard Brown, saying,

• 24:39Ryan Sean Adams?

  as the impact of FTX's collapse continues to ripple outward, today we are seeing what can happen when a bank is over reliant on a risky, volatile sector like cryptocurrencies. So whatever is happening, David, whether this is a bank run and kind of Silvergate is somewhat a victim in this situation, or whether Silvergate did some things that were irresponsible and they're not a victim, they are responsible. We do know that, that politicians are definitely ready and eager to throw crypto under the bus and throw crypto banking under the bus. And to me, this is just like the continuation of the operation choke point we've been talking about for the last, like since the beginning of this year.

• 25:19David Hoffman?

  Right, yeah, this is such a nefarious line. As the impact of FTX's collapse continue to ripple outwards, today we are seeing what can happen when a bank is over reliant on risky, volatile sector like cryptocurrencies. FTX was not cryptocurrencies. FTX was a bank that was pushed offshore and with all of those quality products that drove people into FTX not enabled to be held onshore by onshore banks. This was not a cryptocurrencies problem. As we know, as we've reporting on Bankless for quarters now, every single DeFi app in the crypto world held up completely solvently.

• 25:58David Hoffman?

  FTX, which is a bank, which was ignored by the SEC and all of the onshore regulated entities were hamstrung by onshore regulation. And so the FTX incident explodes, comes back to hit... This is a banking crisis. It happens that there are crypto rails. It is a banking crisis. That is the center of this whole thing.

• 26:20Ryan Sean Adams?

  The public's not going to understand the details. Maybe people in the crypto community will, but like, they're going to paint this as a problem with crypto. I mean, Sherrod Brown continues, "I've been concerned that when banks get involved in crypto, it spreads risk across the financial system and it will be taxpayers and consumers who pay the price." When banks get involved in crypto, what do you think that means? They're going to continue to choke the banking sector from touching this whole asset class of crypto. That is very disturbing to me. David, we have an Elizabeth Warren tweet here. What does this say?

• 26:52David Hoffman?

  Oh, boy, my favorite. Elizabeth Warren says, "As the bank of choice for crypto, Silvergate's bank's failure is disappointing but predictable. I warned of Silvergate's risky, if not illegal, activity and identified severe due diligence failures. Now customers must be made whole and regulators should step up against crypto risk." So in my mind, Ryan, I'm just saying regulators... Putting undue burdens upon the crypto banking sector and then as a result of those burdens and perhaps also other things, FTX and interest rates, but also as a result of what Elizabeth Warren is doing here in this tweet, putting undue burdens upon the crypto banking sector, then the big crypto banking sector fails. And then she's like, I told you so, even though she's part of the problem that caused it to not be a well

• 27:37David Hoffman?

  serviced industry in the first place.

• 27:39Ryan Sean Adams?

  Remember Tyler Cowen's caution? He wrote an editorial about this, came on our podcast and he was like, hey, I'm most worried that regulators and those in Congress will backlash far too far. And yes, there was problems with FTX, but you're really going to try to choke United States citizens, US citizens from this entire asset class? I worry about that. That's what's going on. I think Nick Carter had a fantastic take here on Silvergate. He said this about Silvergate, about the situation we were just talking about. The politicians are now telling us that because a single bank, peaking at 16 billion in assets, that's Silvergate, wound down in an orderly manner, making depositors whole. No one lost money here, David. No depositor lost money. Affecting no one but shareholders, causing

• 28:23Ryan Sean Adams?

  no knock on effects, that crypto firms must be shut out of the banking system.

• 28:28David Hoffman?

  Right.

• 28:29Ryan Sean Adams?

  Those holding equity, the shareholders of Silvergate, lost in this. That's how it should be.

• 28:35David Hoffman?

  That's how this works.

• 28:36Ryan Sean Adams?

  It's a risk asset. Holding equity is a risk asset that the company is going to go bankrupt, of course. So in that sort of situation, equity holders get liquidated. No one that deposited funds in Silvergate has lost anything.

• 28:51David Hoffman?

  So like a bank wound down in a correct and orderly fashion and Elizabeth Warren is like grave dancing. Is that what's going on?

• 28:59Ryan Sean Adams?

  I think so. I mean, Nick Carter, Nick goes on and says, they cry out safety and soundness while chipping away at the foundation and then act vindicated when the structure starts to crumble. I think that's what's going on here. Here's another take.

• 29:12David Hoffman?

  Yeah. So this is a take from a Mike from Blockworks. Liz Warren has a $67 million net worth, even though her salary is $285,000 per year. Either she saved 100% of her earnings for 235 years, or she's making money another way.

• 29:30David Hoffman?

  I love this.

• 29:32Ryan Sean Adams?

  Why do you love this?

• 29:33David Hoffman?

  Well, this just calls into question the legitimacy of what she's doing, right? She's an influencer who is talking against other people's bags, our bags, our crypto bags. And then she's, what Mike is implying here, is making money in ways that we don't understand. And so as an influencer of this state, he is calling into question the legitimacy of where she has made her money. And I think that's a good thing to call into question.

• 29:58Ryan Sean Adams?

  Yeah, I get it.

• 29:59David Hoffman?

  I think if, and if people think that that's below the belt, I think that what Elizabeth Warren is doing is below the belt.

• 30:05Ryan Sean Adams?

  I don't necessarily think it's below the belt. I do worry a little bit about the, kind of the, just because someone's wealthy doesn't mean they made it in like nefarious ways. And we don't know the source of, of her wealth, but um, yeah, I.

• 30:20David Hoffman?

  Sixty-seven million dollars, brother.

• 30:22Ryan Sean Adams?

  It's a lot. It's a lot of wealth. Let's talk about this. Binance under scrutiny as well. That is happening this week. This is a letter sent yesterday by, wow, Senator Warren. I guess this is the Senator Warren episode.

• 30:34David Hoffman?

  Senator Warren is the main character of this week.

• 30:36Ryan Sean Adams?

  Van Hollen and Marshall to Binance and Binance US. It's absolutely devastating, this, this tweet says. They are flat out accusing Binance of fraud and money laundering. This is not good for CZ. Have you read this letter? What's the TLDR here, David?

• 30:51David Hoffman?

  Yeah, basically, well, it's, it's a pretty damning accusation of CZ and Binance's operations. Basically saying that Binance has knowingly enabled money laundering, reduced KYC compliance checks, allows, allowed for higher and higher limits of non-KYC accounts in order to trade on Binance, in order to just like make revenue, right? Like that's, that's their business model. It also says that accuses them of creating Binance US as like the compliant distraction, so that Binance itself could grow larger offshore and do all of its perhaps illicit ways of, you know, generating revenue.

• 31:29Ryan Sean Adams?

  That's, that part's true, right? We all saw that.

• 31:31David Hoffman?

  That's probably true, yeah. Now the thing is like. I wouldn't necessarily rush to the defense of Binance here. I think also, we know that CZ and Justin Sun are buddies and we know that Justin's son used his ownership over Poloniex. Remember that one article? Justin Sun was like, "Just pass any KYC check. Always pass, never fail, always pass, doesn't matter." Remember that? That's the story that came out, right? And so like, they're very close with each other. This is kind of, I don't really think anyone's really gonna rush to the defense of Binance here. So it's tough, you know? It's tough.

• 32:09Ryan Sean Adams?

  Well, so is this the big? That's different than fraud. Is that the big charge here? That they were bypassing AML KYC?

• 32:16David Hoffman?

  Yeah, basically, they were negligently enabling like money laundering and illicit use of Binance. Whether or not they were the ones actually doing it is a different story. I don't know if that's what this is charging them, but yeah.

• 32:28Ryan Sean Adams?

  This is the Wall Street Journal breaking some things about Binance too. What does this say?

• 32:32David Hoffman?

  This says, "Text from crypto giant Binance reveals plan to elude US authorities." So this was, "Messages revealed from CZ and Binance leadership saying, 'Hey, we're totally going to do our best to circumnavigate, evade US regulations. We're going to spin up Binance US in order to like prop that up and have that be like the fault, the, you know, the subject of their scrutiny and that thing is gonna be totally compliant. But meanwhile, we're gonna do all the shady stuff in the back.'" And apparently that has been explicitly made in text form and leaked to the Wall Street Journal.

• 33:08Ryan Sean Adams?

  So what's the take here? Then are we back to like, okay, is this all true? Are the regulators right? Are they right in stamping out this entire industry from the United States because it's only full of scammers? Is that what Binance is doing here? What do you say to this?

• 33:23David Hoffman?

  I say, "This is all just so tiring, man."

• 33:27Ryan Sean Adams?

  What part of it?

• 33:28David Hoffman?

  I got, I got, I got nothing. It's like, damn it, it's like,

• 33:33David Hoffman?

  we need to have regulation, but our regulators are being shitty at it. Like, it's, there's, it's a double edged sword.

• 33:40Ryan Sean Adams?

  Bad people on both sides?

• 33:41David Hoffman?

  Yes. It's just like, no one's got it right, dude.

• 33:44Ryan Sean Adams?

  I just, I don't, it's like, I don't, we don't know enough to, to know if, what CZ is doing. I, I do know he's smarter than SBF. That's for sure. Um, just don't know. And how, how would we know? It's a centralized exchange. We just don't know. It's, it's, it's by nature, it's trust based. But we do know that no one is talking here about like, okay, central, centralized exchanges are failing us in a variety of ways. Here's how we could shore up the regulation for centralized exchanges, right? And by the way, isn't it cool, American citizen, that crypto has also provided a self sovereign option called decentralized finance,

• 34:24Ryan Sean Adams?

  which you can audit on chain. We never have to question whether it's a fraud. We never have to question whether it's fully backed or has reserves. It's proof of reserves built in. They're not pointing people in that direction. They're saying the whole crypto thing is a fraud, is a scam. They're not engaging with the members of the crypto community who are like, yeah, we hate FDX 2 and SBF. And by the way, we've been saying that for a long period of, of time that like, we're worried about centralized exchange as a, as a, an attack vector. You know, they're not engaging with us at that level. So it doesn't feel collaborative. So I, I share your frustration. I don't like,

• 35:07Ryan Sean Adams?

  but they've got us in this spot where they can just point to like five to 10 scams last year in crypto, bad things that happened and say, look, I told you, I, like Elizabeth Warren, I was right. I was right. I predicted this. I told you this was going to happen. It's a difficult situation.

• 35:24David Hoffman?

  Yeah, I'll put on my libertarian free market anti-state hat and say that Binance has banked more people than any with his technology and his crypto rails and Binance Smart Chain for that matter, has banked more people using crypto technology than any nation state has ever done ever with a CBDC or any of their legacy traditional financial system. So I'm sure there's nothing, I'm sure there's a lot of skeletons in the closet of Binance. I'm sure there's money laundering happening. I'm sure CZ is aware of it, probably. I don't know any of this stuff, but like, I'm sure there's a bunch of stuff that pisses off the state, but like my Eric Voorhees raw, human perspective is that Binance is unequivocally

• 36:07David Hoffman?

  a net positive for the world in terms of banking the unbanked and allowing financial freedom to proliferate. That's my take.

• 36:14Ryan Sean Adams?

  I think there's a way for regulators in Congress to cooperate with the Binance's of the world rather than just attacking them, trying to stamp this thing out of existence. David, this is somewhat related, the SEC snubbed as Voyager wins court approval for the sale to Binance. So Voyager, that defunct, I guess crypto bank, crypto lending and borrowing platform, is trying to sell to Binance US and is that going through?

• 36:37David Hoffman?

  Well, it looks like it. The Voyager is the one that lent out that unsecured $660 million loan to Three Hours Capital, which I'm assuming they haven't gotten back. It's safe, safe assumption there. But approval was granted by United States bankruptcy judge Michael Willis, which came four days after arguments presented by Voyager and the United States Securities Exchange Commission were processed by that judge. Judge says this can proceed. And so this is actually really good news for anyone who's lost money on Voyager. This article is claiming that if you are a Voyager customer, an impacted Voyager customer, you are going to get back approximately 73%.

• 37:19Ryan Sean Adams?

  Wow.

• 37:20David Hoffman?

  Approximately 73%, which is a very precise number for saying the word approximately. So that's great news. That's great news.

• 37:26Ryan Sean Adams?

  That is great. Definitely.

• 37:28David Hoffman?

  This judge's decision comes over a week after 97% of the 61,300 Voyager account holders. Found were voted in favor of the current Binance US restructuring plan, according to a February 28 filing. That's pretty cool.

• 37:42Ryan Sean Adams?

  That's what shareholders want, it sounds like.

• 37:45Ryan Sean Adams?

  Grayscale versus the SEC. David, this next story is, I think, a win. If you were asking yourself in the last two stories we were talking about, like, where are the checks and balances here? How do we stop this type of activity? I think the court system is one possible solution to that. So this is judges that are skeptical of the SEC's argument in the Grayscale versus Bitcoin ETF hearing. Can you tell us about that, David?

• 38:13David Hoffman?

  Yeah, so this is a court that has reviewed the facts and circumstances of the Grayscale Bitcoin ETF application. We want the Grayscale Trust, the GBTC Trust, to fold into elegantly and cleanly a Bitcoin ETF, a spot market Bitcoin ETF. We have a Bitcoin Futures Market ETF. Why not a Bitcoin spot market ETF?

• 38:35Ryan Sean Adams?

  Why do we want that?

• 38:36David Hoffman?

  We want that, Ryan, because right now the GBTC asset trades at a 45% discount to actual GBTC. And so of all the Bitcoins that are in the GBTC Trust, locked in there, one way, can't come out, they are worth only 55% of their actual real value because no one, there's not enough demand for GBTC, partly because of the whole like Grayscale 3Rs capital like loop.

• 39:03Ryan Sean Adams?

  So retail is getting screwed, basically.

• 39:06David Hoffman?

  Yeah, so there is, like, how much is the Grayscale GBTC Trust? Let me go look that up real quick. And so as a result of that discount, there is a $4 billion gap. And what that means is that GBTC owners collectively are short $4 billion. There's $4 billion of wealth that could be created if the SEC allowed for a spot market Bitcoin ETF out of Grayscale. They could make $4 billion just appear out of thin air if they did this. And so the judge is like, hey, SEC, why aren't you doing that? Which is a really, which is a really good question.

• 39:40Ryan Sean Adams?

  Why aren't you protecting investors?

• 39:42David Hoffman?

  Right.

• 39:42Ryan Sean Adams?

  This is like the second judge.

• 39:44David Hoffman?

  Facilitating capital markets?

• 39:46Ryan Sean Adams?

  Yeah.

• 39:47David Hoffman?

  Capital coordination.

• 39:47Ryan Sean Adams?

  The whole vision on your website thing.

• 39:49David Hoffman?

  You can make $4 billion. Why aren't you doing it?

• 39:52Ryan Sean Adams?

  For retail, the people that you're supposed to protect. This is the second judge saying this, who's skeptical of the SEC's decision to approve the futures ETF, but not the spot one, not the one that we all want. The SEC hasn't offered any information that the petitioners are wrong, the judge says. SEC has to explain why they're wrong. Yes, they do. Thank you, some accountability. David, you and I could say it all day. Crypto Twitter can say it all day. A judge is requiring them to answer that question. And that is a nice check and balance. That's a product of our system, and I'm glad that we have it right now.

• 40:27David Hoffman?

  Gary Gensler is like, mm, uh, well, uh, well, so you know how, well.

• 40:33Ryan Sean Adams?

  Office hours with Gary.

• 40:34David Hoffman?

  Office hour, yeah. Turn it into influencer video, Gary.

• 40:38Ryan Sean Adams?

  Yeah, so that's what's going on there. And maybe some hope for the future there. Some of this power gets checked by the court system. David, what do we have coming up next?

• 40:46David Hoffman?

  Coming up next, we have an onslaught of Coinbase news, all of it good, thank God. So there's like four things that we're going to talk about all related to Coinbase. Tornado Cash 2.0 pulls a jujitsu move against privacy haters. We're going to talk all about that. We got Uniswap Wallet, we got our ETH supply, and most importantly, Ryan, the biggest news of the week, which is Bankless 2.0. So all those details and more coming right after we talk to some of these fantastic sponsors that make Bankless 2.0 possible. Uniswap is the largest on-chain marketplace for self-custody digital assets. Uniswap is, of course, a decentralized exchange, but you know this because you've been listening to Bankless. But did you know that the Uniswap web app has a shiny new fiat on-ramp?

• 41:31David Hoffman?

  Now you could go directly from fiat in your bank to tokens in DeFi inside of Uniswap. Not only that, but Polygon, Arbitrum, and Optimism Layer 2s are supported right out of the gate. But that's just DeFi. Uniswap is also an NFT aggregator, letting you find more listings for the best prices across the NFT world. With Uniswap, you can sweep floors on multiple NFTs, and Uniswap's universal router will optimize your gas fees for you. Uniswap is making it as easy as possible to go from bank account to bankless assets across Ethereum, and we couldn't be more thankful for having them as a sponsor. So go to app.uniswap.org today to buy, sell, or swap tokens and NFTs.

• 42:14David Hoffman?

  How many total airdrops have you gotten? This last bull market had a ton of them. Did you get them all? Maybe you missed one. So here's what you should do. Go to Earnify and plug in your Ethereum wallet, and Earnify will tell you if you have any unclaimed airdrops that you can get. And it also does PoApps and mintable NFTs. Any kind of money that your wallet can claim, Earnify will tell you about it. And you should probably do it now because some airdrops expire. And if you sign up for Earnify, they'll email you anytime one of your wallets has a new airdrop for it to make sure that you never lose an airdrop ever again. You can also upgrade to Earnify Premium to unlock access to airdrops that are beyond the basics and are able to set reminders for more wallets. And for just under $21 a month, it probably pays for itself with just one airdrop. So plug in your wallets at Earnify and see what you get. That's E-A-R-N-I dot F-I.

• 42:59David Hoffman?

  And make sure you never lose another airdrop. And we are back. But first, watch this sick promo video for Bankless 2.0.

• 43:14Ryan Sean Adams?

  It's loading.

• 43:28David Hoffman?

  That's great. I love that. That gets me going, man.

• 43:31Ryan Sean Adams?

  On repeat, on repeat. Here it is. Bankless.com, Bankless 2.0, it's here. It's our new website. We have fully migrated from Substack at this point.

• 43:40David Hoffman?

  Piece web two.

• 43:40Ryan Sean Adams?

  If you're listening to it. We are doing this so that we can start being much more of a crypto-native media company. And you know what's cool about this, David? Is I'm not sure we entirely know what that means. All right?

• 43:55David Hoffman?

  The point is, we can find out. We're going to explore our own frontier. We have our own frontier now.

• 44:02Ryan Sean Adams?

  Are we going to front-run the opportunity here?

• 44:03David Hoffman?

  We are front-running the opportunity. Yeah, Bankless is going from just like, you know, being all web two-y to we, I think we have one of the best platforms to experiment and innovate and iterate about web three things natively because now we have our own settlement. This is our settlement. This is our home.

• 44:19Ryan Sean Adams?

  This is, this is our home on the internet, on this protocol that we call home. Everyone's welcome. What are we doing here? Obviously, we're posting the podcast. This roll up that you're listening to will appear here. We're posting our articles, everything we write. We have this thing called a daily brief. If you only listen to Bankless and you don't consume it in your inbox every day, you have to start consuming it that way as well. It's a daily brief. It's a guide to crypto for every day. We're posting that here. There is a fantastic ability to search for different guides, David. If you want-

• 44:52David Hoffman?

  You can tag your interests.

• 44:54Ryan Sean Adams?

  Tag your interests. If you want a guide to investing, all of our how-tos, if you want to get into kind of opinion pieces, guide to Arbitrum, guide to optimism, guide to Polygon, it's all here on the website. The crypto native features, all right, we had the hardest time. In fact, Substack would never integrate this for us, which is our previous platform, just paying via crypto. All right, so people would be like, "I'm trying to like sign up for Bankless, but you're making me pay with a credit card." And we're like, "Oh, well, there's this separate link. We can send it to you."

• 45:25David Hoffman?

  It's manuals, it's coinless commerce.

• 45:28Ryan Sean Adams?

  It was never really connected. And so now it's all connected. Now it's all seamless. Now it all works. You can pay via crypto. That's just a simple thing, but you can also, we're going to add the ability to log in with Ethereum, right?

• 45:41David Hoffman?

  Of course.

• 45:41Ryan Sean Adams?

  So you can access this function. We're adding podcast NFTs to the post. We're going to do some other things that I can't speak about right now, but that are coming soon, that we are super excited about and bullish on. And in general, we just want to grow this movement and grow this community in crypto native ways and push forward into the frontier. So that's what we're up to, man.

• 46:01David Hoffman?

  Yeah, that's exactly right. And if you look on that far left, you have your home, listen, read, tools, four little icons, four little tabs to explore different places. The number of icons there can grow as we grow the number of products and tools and things to do on bankless.com.

• 46:20David Hoffman?

  There's also native PoAP minting. So if, yeah, this is, we have built the best native in the browser, in the website, PoAP minting apparatus that I think exists.

• 46:35David Hoffman?

  And so there is a Po app to mint for those that are already Bankless subscribers. We sadly can't open it up to everyone because we can't like spam attack Po app or allow Po app to be spam attacked. But if you are already a Bankless subscriber, including free subscribers, you can go mint the inaugural ship Po app because we are ship, we're sailing west. We're going into a new world, ship season. So go mint that Po app. That's a big call to action. Go, go do that.

• 47:01Ryan Sean Adams?

  Bankless.com, guys. Thank you. Thank you for all the support. Thank you for everyone

• 47:05David Hoffman?

  for bearing with us. Thank you for listening to all the ads that helped finance the building of this website.

• 47:10Ryan Sean Adams?

  It's important. We got to build our settlement. So that's how we're doing it. Anyway, so much more we could talk about. David, speaking of Bankless content and cool stuff, you've got some ETH Denver video, a whole series that will make you feel like you went to ETH Denver and hung out with David and listened into all the conversations that he was having, except for that one conversation last week with the lawyer where you talked about Lido. Not that one. All the other ones, though.

• 47:37Ryan Sean Adams?

  Inside joke, guys.

• 47:38David Hoffman?

  All the good ones to bring back to the nation.

• 47:40Ryan Sean Adams?

  All right. Well, so what is this? Give us the highlights.

• 47:42David Hoffman?

  So this is part one of two parts. Every other time I've done this, and this has been a reoccurring theme of like what I do when I go to conferences is I interview people and I bring back interviews, like 20 minute bite sized interviews. So you can feel like you were there. This is, I did that twice, Ryan, two times at ETH Denver. This is, so this is part one. This is at the Axolar Interoperability Conference, which was like a who's who of interoperability.

• 48:07Ryan Sean Adams?

  Builders, right?

• 48:08David Hoffman?

  Builders, yeah, all the builders. I was trying to understand like, all right, because like there's Ethereum layer twos and layer threes here. There's Cosmos people, there's the Axolar team, there's like all of the people doing like Omni chain and layer zero and all that kind of stuff. It's like, what is the theme of this conference? Like clearly it's interoperability. When I was writing about this for the newsletter, this is also going to turn into a newsletter on the Bankless newsletter coming out today. So you will already have that in your inboxes. The theme, Ryan, is like literally everything that's not the Ethereum layer one or Bitcoin.

• 48:38David Hoffman?

  That was the theme of this conference. Anyways, so like Layer 2 content, Eigenlayer content, Cosmos content, Axelar content. So that's part one. Part two is me and Luke running around with a microphone at Shelling Point and ETH Denver, just randomly ninja interviewing people. We got Kevin Awaki and Simona Pop from Shelling Point. We got Jesse from Base. We got Victor Bunyan from Coinbase Cloud. We got Lisa from Aztec. So many different interviews of people actually at ETH Denver. That is part two. That is coming soon, TM. Absolute Chad of a production team that is pushing this content out within one week post ETH Denver.

• 49:20David Hoffman?

  They helped me film it. They helped me get the audio. They're processing. Tip of the hat to the Bankless Pod Squad. Tip of the hat.

• 49:26Ryan Sean Adams?

  Absolutely. And of course, you can go find all of that content right now at bankless.com.

• 49:31David Hoffman?

  Dot com. Bankless. Bankless.com. Say it again.

• 49:34Ryan Sean Adams?

  Bankless.com. Coinbase is doing some things too. Not just Bankless that's been building. Coinbase has been building some things. Today, we introduce Wallet as a Service. What is Wallet as a Service? This is a Coinbase offering now that makes it seamlessly seamless to onboard users to Web 3. What is this, David?

• 49:52David Hoffman?

  Yeah, so it's an API. Wallet inside of an API. Never really thought that was possible, which allows companies to create and deploy fully customizable on-chain wallets. So users can create, access, and restore mainly their wallets with authentication as simple as a username and password without needing to worry about seed phrases. So they have built a way to allow, I'm assuming, the rest of Web 2 to easily spin up a wallet on demand, on notice. And like, I think the most obvious use case that I'm just going to imagine off the top of my head, Ryan, is like, you know, the digital collectibles in Instagram?

• 50:25Ryan Sean Adams?

  Yeah.

• 50:25David Hoffman?

  What percentage of Instagram users have a wallet?

• 50:28Ryan Sean Adams?

  Not zero, because there's some, but very-

• 50:31David Hoffman?

  Less than 1%.

• 50:32Ryan Sean Adams?

  Yeah.

• 50:32David Hoffman?

  Less than 1%.

• 50:32Ryan Sean Adams?

  Less than 0.1%, I would say.

• 50:35David Hoffman?

  So say NFT creators who are now able to promote and share their NFTs on Instagram. That is a feature that is all throughout Instagram now. Say one of their fans wants to buy that NFT. Does that, and that fan does not have a wallet. Well, Instagram could just ping the Coinbase Wallet API and be like, serve this, serve this user a wallet, because they want to buy that NFT.

• 50:57Ryan Sean Adams?

  And it's there.

• 50:58David Hoffman?

  And they could buy that NFT with Trad payment rails, like with Stripe or whatever. And all of a sudden, there's a wallet inside of Instagram that is accessible by the Instagram authentication service that's already built in. I think that's really what this bull case for this thing is.

• 51:10Ryan Sean Adams?

  That's a bankless wallet.

• 51:11David Hoffman?

  That's, yes.

• 51:12Ryan Sean Adams?

  Non-custodial. This is multi-party computation technology to make this non-custodial.

• 51:17David Hoffman?

  It can be non-custodial, and it can also be custodial. It's customizable for both. It is really the wallet infrastructure that we need to be able to push wallets into every single corner of the internet. This is insanely, this just makes crypto adoption so easy. It lowers the barrier for getting a wallet down to the absolute minimum.

• 51:35Ryan Sean Adams?

  We got Stripe for crypto wallets. They also, Coinbase has also acquired One River Digital Management. Now, we just released our episode with Eric Peters. He's the CIO of One River. He is kind of the institutional crypto guy. I mean, all the kind of the billionaires with, with a lot of money respect Eric Peters. And Coinbase has now acquired their company as, I guess, a bridge to institutional investors, increasing that. All right, do you have any other takes on that?

• 52:03David Hoffman?

  I, I, it's just, they're doing everything, man. They're going in every single direction at once.

• 52:10Ryan Sean Adams?

  It's pretty cool, including the direction of public relations. And I think repairing crypto's image, their brand image. I know, David, you wanted, you wanted us to take a look at this, this commercial.

• 52:22David Hoffman?

  I think this is, this is just good content. So we're going to watch this Coinbase, Coinbase commercial. They don't even pay us for this.

• 52:27Speaker 04

  What is this archaic system?

• 52:30Speaker 05

  Mother's maiden name? Evil wit?

• 52:32Speaker 04

  You're telling me this guy is how things get verified?

• 52:36Speaker 02

  That's my job.

• 52:37Speaker 04

  I'm just saying, you shouldn't have to buy $10 worth of gum if you just want 79 cents worth of gum. Why do you get charged your money to take your money from your account? And if you're out of money, they charge you for being out of money? What? An overseas transfer takes five days? Business days. Why? What are they using? A zeppelin? I deposit the check Monday.

• 52:59Ryan Sean Adams?

  But Monday was a bank holiday.

• 53:01Speaker 04

  Why is this the way it is? A bank holiday? This system? What's a bank holiday? Makes no sense. This makes no sense. Who designed this system? Ma'am? Is this really the best we can do? Hello? Don't we deserve better?

• 53:23Ryan Sean Adams?

  Nice.

• 53:24David Hoffman?

  It's it's it's a Coinbase ad, obviously. It is the best PR, one minute of PR for the crypto industry as a whole that I've ever seen.

• 53:35Ryan Sean Adams?

  It's it's it's basically the bankless. It's basically banks suck.

• 53:38David Hoffman?

  Yeah.

• 53:39Ryan Sean Adams?

  And we can do better.

• 53:40David Hoffman?

  Finance sucks.

• 53:41Ryan Sean Adams?

  Let's use crypto to update it.

• 53:42David Hoffman?

  Yes.

• 53:42Ryan Sean Adams?

  That is the message. And it's a much better message.

• 53:45David Hoffman?

  Right.

• 53:45Ryan Sean Adams?

  I feel like than the 2022 message that crypto was sending, which was come here to get really rich.

• 53:51David Hoffman?

  Right.

• 53:51Ryan Sean Adams?

  And because we have.

• 53:52David Hoffman?

  Come get yield.

• 53:53Ryan Sean Adams?

  Yeah. And because we have like social boosting NFTs.

• 53:56David Hoffman?

  Right.

• 53:56Ryan Sean Adams?

  Which, yeah, sure. But this is the message.

• 53:59David Hoffman?

  This is the real message. This is the long term message.

• 54:01Ryan Sean Adams?

  We also are coming out with a podcast, Brian Armstrong. So we just talked to him earlier this week. I think it's a good kind of recap on everything that crypto is doing. You know, we spent a lot of time on regulatory in this episode, David. And I think that's because that's where crypto is right now. That episode comes out Monday. But if you are a citizen of the bankless nation, that means you are a premium subscriber. You should have access to that episode right about now, early access.

• 54:28David Hoffman?

  On bankless.com.

• 54:29Ryan Sean Adams?

  There you go. That's what we were waiting for. David, some cool news with tornado cash, which is an illegal and not crypto privacy anonymized. It's on the OFAC sanction list anyway.

• 54:42David Hoffman?

  It's not illegal. It's just illegal for us as US citizens.

• 54:46Ryan Sean Adams?

  Okay.

• 54:46David Hoffman?

  It is. It is an agnostic neutral piece of technology. It's just illegal for you and me.

• 54:51Ryan Sean Adams?

  Well, what are they doing?

• 54:53David Hoffman?

  So, well, this isn't anything to do with tornado cash specifically. This is not the tornado cash team. This is a mean Soleimani announcing privacy pools V zero, which he is calling the sequel to tornado cash. Also similarly branded as tornado cash. I think the TLDR is it's tornado cash and this additional fun little mechanism that lets you prove the specific anonymity set. What does that mean? You can prove that you are not. A tornado cash user who is of a certain address as in your you can achieve privacy versus with these brand new tools without being associated with any other specific address that you determine aka one on the OFAC sanction list.

• 55:37Ryan Sean Adams?

  So you can you can prove that you are not and are not interacting with an address on the OFAC sanction list. So let's say, you know, the OFAC FinCEN identifies this particular set of addresses. This is North Korea. This is a well-known terrorist group. These people are bad actors. You can prove your innocence essentially using this this tool now. And so this should like defang all of the reasons.

• 56:06David Hoffman?

  Right.

• 56:06Ryan Sean Adams?

  That the code itself and let's remind people the tornado cash code itself, the smart contract on chain. If you live in the US, OFAC FinCEN, the US has made it illegal for you to have on-chain privacy because they're saying you might be one of these bad actors. But now you can prove your innocence. So doesn't this David defang the whole like, I guess, front?

• 56:31David Hoffman?

  Right.

• 56:31Ryan Sean Adams?

  Of FinCEN saying, yeah, this is because terrorists and criminals and.

• 56:35David Hoffman?

  It takes away the whole entire premise of making the tornado cash smart contracts illegal in the first place.

• 56:41Ryan Sean Adams?

  There you go. Your move. Your move.

• 56:43David Hoffman?

  I think, I mean, I mean, everyone, people who are listening to Bankless know I have like infinite respect for Amin. He's the guy that will go toe-to-toe with the with Goliath in a heartbeat without thinking twice about it.

• 56:55Ryan Sean Adams?

  He's a shit disturber, man.

• 56:55David Hoffman?

  Yeah, he really, oh, he's a sower of chaos in the best of ways, like chaotic, the embodiment of chaotic good. I hope he deploys it on base.

• 57:04Ryan Sean Adams?

  On base?

• 57:05David Hoffman?

  On base chain, yeah. Privacy pools on base chain.

• 57:08Ryan Sean Adams?

  That'll be fine. I'm sure Coinbase Compliance and Legal has really appreciated that you just said that, David.

• 57:13David Hoffman?

  I will permissionless code, you know, they made they made their chain permissionless. They know what they signed up for.

• 57:17Ryan Sean Adams?

  Let's see. Let's see how it goes. I mean, we want a free permissionless open internet. So let's push that boundary.

• 57:22David Hoffman?

  If you want to learn more, yeah, privacypools.com is the place to go.

• 57:26Ryan Sean Adams?

  There we go. All right. Also, bankless.com.

• 57:28David Hoffman?

  Also, after bankless.com.

• 57:29Ryan Sean Adams?

  Yeah. Make that your next visit. Uniswap Labs, they introduced a mobile wallet. David, you and I got a chance to sit down with Cal, who is kind of the lead product design of this wallet. It's pretty cool. I really liked it.

• 57:41David Hoffman?

  I'm very bullish.

• 57:42Ryan Sean Adams?

  It's. Apple has blocked them from launching in the App Store right now, but it is available on test flight. Unfortunately, we don't have an access code for you. In order to get that, you had to be listening to the conversation we had earlier this week, and there were about 100 of them. But here's David, he's showing off.

• 57:58David Hoffman?

  I got $48.87 and a crypto coven.

• 58:03Ryan Sean Adams?

  That, well, that's worth something. And the access code itself is worth something because it'd be pretty cool to use this wallet. I don't know, I'm pretty bullish on the future of this. I really like the design, it's nice and clean. I think Uniswap is dedicated towards iterating on it. A lot of cool things in store and bullish wallets in general, wallet innovation in general.

• 58:24David Hoffman?

  Certainly. Moving on to Rocketpool is set to launch their eight Ether mini pools. Okay, how does Rocketpool work? You have the node operator who spins up a node in the decentralized Rocketpool network. They need to put up a bond to make sure that they don't do anything funky with the other people who come and deposit Ether into their node. So what you do, you put in 16 Ether, one half of what it takes to spin up a node. Other people backfill that with 16 more Ether and boom, you have a Rocketpool mini node and 16 our Ether is minted and distributed into the wild. That is a capital intensive way to produce a staked ETH token. And while that is, the capital intensivity is how we get decentralization and security, it is still capital intensive.

• 59:08David Hoffman?

  Rocketpool has created this system called mini pools, which actually lowers the collateral requirement down to eight. So instead of putting up a 16 ETH bond, you put an eight ETH bond. And instead of that being a one to one ratio of your Ether to other people's Ether, it is a one to three ratio where you put in eight Ether and then 24 Ether comes in to create three different Rocketpool mini nodes. And so the capital efficiency of RPL doubles. And then also, if you are a node operator, you increase the amount of fees that you charge the people who use your node to stake as well. So you, if you are a node operator, you're getting more yield and the total supply of our ETH goes up. This is a very long awaited upgrade from the Rocketpool community.

• 59:53David Hoffman?

  By Rocketpool. It's actually not launched yet. It's coming. It's in no later than early April, which is one month away. So very hype, very hype.

• 1:00:03Ryan Sean Adams?

  This is Rocketpool getting more capital efficient, which is bullish. And also our ETH is now on Euler, which is a lending and borrowing marketplace, a permissionless lending and borrowing marketplace, similar, I guess, to Aave and Compound. It's cool to see liquid staking derivatives saturating all of our DeFi lending platforms.

• 1:00:22David Hoffman?

  Yeah, our friends at Coinbase staking and others, liquid staking tokens, Ryan would request that you call them liquid staking tokens, not liquid staking derivatives, because derivatives have a very specific legal meaning.

• 1:00:33Ryan Sean Adams?

  Somebody's gonna slap me about that.

• 1:00:36David Hoffman?

  Yeah, but no worries. Disclaimer, sorry?

• 1:00:40Ryan Sean Adams?

  They are derivatives, though, for real, though.

• 1:00:42David Hoffman?

  Sure, semantics. Semantics. Disclaimer, Bankless holds a bunch of RPL, and we also run Rocketpool Mini nodes. And then Ryan and I are also angel investors into Euler.

• 1:00:53Ryan Sean Adams?

  And bullish ETH.

• 1:00:55David Hoffman?

  Certainly.

• 1:00:56Ryan Sean Adams?

  Polymarket tweeting out here, David. Looks like someone knows something about the Arbitrum airdrop. What is this? What is this graph we're looking at?

• 1:01:03David Hoffman?

  Polymarket is a predictions market that allows people to gamble about the probability of future events. And the theory behind prediction markets is that if one or a very low number of people know something, that they can sway the entire market because they can make a gamble. So if they know that the Arbitrum airdrop is coming by March 31st, they would go to this Polymarket market, and they would bet that on the knowledge that they have. And so as of recently, the probability that an Arbitrum airdrop comes by March 31st on Polymarket has moved to greater than 50% chance. And so the implication here is that someone knows something and has taken a bet on that market. I took this tweet into the

• 1:01:46David Hoffman?

  Arbitrum, our Telegram with the Arbitrum team, Ryan. And I was like, hey, you guys, you guys wouldn't drop a token without scheduling a livestream with us first, right? And they were like, Uh, they didn't say anything. They didn't say anything.

• 1:01:58Ryan Sean Adams?

  They said, "You never know, but you'll be first to know when we do, if we do," that kind of thing, right?

• 1:02:03David Hoffman?

  Yeah, exactly.

• 1:02:05Ryan Sean Adams?

  Yeah, as we'd expect.

• 1:02:06David Hoffman?

  So here's something that is not news, but is perhaps news. We don't know.

• 1:02:11Ryan Sean Adams?

  Yeah, another rumor, David?

• 1:02:13David Hoffman?

  Another rumor.

• 1:02:14Ryan Sean Adams?

  Perpetuating?

• 1:02:15David Hoffman?

  Thank you, Ryan.

• 1:02:15Ryan Sean Adams?

  More rumors of rumors. Cosmos Governance, they gave the green light to interchain security. I remember Zaki telling us a little bit about this when we had them on the episode for the Cosmos thesis. If you want to hear about that, you can go listen to that episode in the archive at where, David? Where can they go find that?

• 1:02:34David Hoffman?

  bankless.com?

• 1:02:36Ryan Sean Adams?

  That's it.

• 1:02:37David Hoffman?

  bankless.com, that is it.

• 1:02:38Ryan Sean Adams?

  bankless.com.

• 1:02:38David Hoffman?

  bankless.com. Go there right now.

• 1:02:41Ryan Sean Adams?

  Anyway, they're actually doing it. So what does this mean? What is interchain security?

• 1:02:46David Hoffman?

  Right, so Cosmos is the app chain mesh network vision. It is basically the Ethereum layer two, layer three vision without the layer one. So if you take out, if you only have networks like connected to other networks and you don't have the single shared security model of Ethereum, that's Cosmos.

• 1:03:04Ryan Sean Adams?

  It's a mesh.

• 1:03:05David Hoffman?

  It's a mesh. Cosmos has given the green light to interchain security. That is Cosmos becoming more like Ethereum. So they are starting to enshrine Cosmos Hub as the central security provider for the rest of all app chains that opt into that security, which is kind of like the Ethereum L2 thesis. And so Adam is starting to fill these shoes that Ether is for Ethereum.

• 1:03:31Ryan Sean Adams?

  That's a token. It's a Cosmos token.

• 1:03:33David Hoffman?

  Cosmos token, yes.

• 1:03:34Ryan Sean Adams?

  Yes.

• 1:03:34David Hoffman?

  Exactly. And so like when I was talking to Sonny Agarwal about this forever ago, he's like, "Yeah, the Cosmos and Ethereum long-term conclusion of that design pattern is actually the same pattern. They have just started at different paths." Arbitrum, excuse me, not Arbitrum, Cosmos, I got an Arbitrum token on my mind. Cosmos has opted into prioritize the app chain mesh network vision first, shared security later. Ethereum did the shared security layer one first, also ETH as money first, and now is Now moving into layer twos and layer threes. The conclusion is the same. This is as the Ethereum layer two, layer three, a super chain, hyper scaling vision starts to unfold.

• 1:04:17David Hoffman?

  Cosmos is also doing shared security and atoms as the reserve asset of Cosmos if the market wants it.

• 1:04:24Ryan Sean Adams?

  And I think this means if you're launching an app chain on Cosmos, rather than bootstrap your own validator set, you just get to hire the atom holders as mercenaries.

• 1:04:33David Hoffman?

  For a fee.

• 1:04:34Ryan Sean Adams?

  For a fee.

• 1:04:35David Hoffman?

  A gas fee, perhaps.

• 1:04:37Ryan Sean Adams?

  Their mercenaries, use their military instead, but you gotta pay them because they're mercenaries. So that's cool to see. And I think his value accrual related to Adam, the token, at least it should be on the fundamentals perspective.

• 1:04:50David Hoffman?

  In theory, yeah.

• 1:04:51Ryan Sean Adams?

  Let's talk about another token that started this whole crypto thing off. It's called Bitcoin.

• 1:04:55David Hoffman?

  A token?

• 1:04:56Ryan Sean Adams?

  Bitcoin. Bitcoin's a token.

• 1:04:58David Hoffman?

  You just offended every single Bitcoin maxi that listens to this.

• 1:05:00Ryan Sean Adams?

  It's a token, guys. They're all tokens.

• 1:05:03David Hoffman?

  No, no, no. It's a coin.

• 1:05:04Ryan Sean Adams?

  I say Bitcoin's a token. What is the difference between a token and a coin?

• 1:05:08David Hoffman?

  A token is an asset that is issued on top of another blockchain. A coin is the asset that is the native currency for the crypto economic system. Ether, Bitcoin is a coin. Uni token, any ERC 20 token is a token. Coins are innately related to blockchains. You can't have a crypto system. You cannot make a blockchain without creating an economic security model. And so therefore, every single crypto economic system has to have the economic part, the security part, which is the coin, the currency, the gas, ether, Bitcoin. I feel like this is a simple answer.

• 1:05:46Ryan Sean Adams?

  You win this round, David Hoffman. You win. You got that. That was a good answer. Maybe I was teeing you up for that fantastic answer in a bankless explainer.

• 1:05:56David Hoffman?

  We just wanted to teach a quick lesson.

• 1:05:59Ryan Sean Adams?

  All right, so this is RollKit saying you can now run a sovereign rollup on Bitcoin. Wait a second, I didn't know Bitcoin could have a rollup. Is that possible? What is this?

• 1:06:09David Hoffman?

  Apparently, it's been possible for a very long time, just no developer has wanted to actually do it. Yeah. So sovereign rollups on Bitcoin, now a thing. This is a tweet out of RollKit Dev, a modular framework for rollups. And so this is a toolkit to produce sovereign rollups on Bitcoin. Okay, why are we emphasizing this sovereign word? A sovereign rollup is different from a sidechain, which is a chain that just... What is a sidechain, actually? It's just like a normal independent blockchain.

• 1:06:40Ryan Sean Adams?

  So own validator set, yeah.

• 1:06:40David Hoffman?

  It's own validator set that like checkpoints to a different blockchain kind of...

• 1:06:43Ryan Sean Adams?

  Doesn't have to. I mean, it could just checkpoint to itself.

• 1:06:46David Hoffman?

  A sovereign chain, a sovereign rollup, is a rollup that puts all of its data on a dominant chain, a bigger chain, and all of the data that it puts onto that chain can be used to reconstruct the rollup's state. So it is much more trustless than a sidechain. So Bitcoin has advanced in the layer two, trustless layer two phase, well beyond Liquid. God, all the asshats at Liquid, I hope they're just embarrassed. I know they're not, though.

• 1:07:12Ryan Sean Adams?

  Can I ask, though? Can we call this... Give me the case for why we can call this a rollup. I understand it's a... You're saying it's a sovereign rollup, but is it really a rollup? And this is a tweet where... That I'm gonna read where I think somebody was asking Eric Wall that question. Let me pull it up. This is Mahalo asking Eric Wall, commenting on his tweet, being excited about this. And Mahalo says, "That is not a rollup, though. There are no fraud ZK proofs." You're not actually doing the fraud ZK proof on the layer one. You're just doing the data layer, the data storage on the layer one. Which, does that make it a rollup, David? Or is this something else?

• 1:07:52David Hoffman?

  I'm gonna answer your question with a really annoying response. A ZK rollup doesn't have ZK proofs, Ryan.

• 1:07:58Ryan Sean Adams?

  What do you mean?

• 1:07:59David Hoffman?

  A ZK rollup does not use ZK knowledge proofs.

• 1:08:02Ryan Sean Adams?

  No fraud or ZK proofs? I'm quoting Mahalo here, so, okay.

• 1:08:07David Hoffman?

  Sure. Validity proofs is what a ZK rollup actually uses.

• 1:08:11Ryan Sean Adams?

  Somebody who went to eat Denver and I did not.

• 1:08:14David Hoffman?

  Actually, this one, that little bit of knowledge came from Starkware Sessions.

• 1:08:17Ryan Sean Adams?

  Well, look, there's advantages to being a conference or.

• 1:08:20David Hoffman?

  Yeah, this is gonna break my brain to try and explain. This is one of those, I have to like go back to basics about like, okay, how does it work again? Oh yeah, this works like that. I don't know. Ask Mahalo, Ryan.

• 1:08:32Ryan Sean Adams?

  I think we lose something here, and I'm not sure what we lose. As far as settlement assurances, I don't think that this is quite the same as a ZK rollup or a optimistic rollup on Ethereum, because it's not doing the fraud and validity proving on the layer one, but I'm not sure, like, from a user perspective, what we've lost here? What security guarantees, settlement guarantees we've lost?

• 1:08:58David Hoffman?

  I'm gonna let you be the negative Nancy of Bitcoin of this episode. I'm going to say, I am just happy that the pendulum in the Bitcoin ecosystem has moved very quickly away.

• 1:09:09Ryan Sean Adams?

  That they're even having these conversations.

• 1:09:10David Hoffman?

  Yes, exactly, that this is happening. Yeah, the fundamentalist maxis are losing their control over the Bitcoin narrative, and the builders and innovators and optimists of the Bitcoin ecosystem are getting pigeonholes to finally grasp onto and take back Bitcoin from the crypto bloodites of the world.

• 1:09:29Ryan Sean Adams?

  That's it. Build back Bitcoin. And take it back.

• 1:09:32David Hoffman?

  Yes.

• 1:09:32Ryan Sean Adams?

  Maybe this is happening. Maybe the builders are coming and taking it back. Yeah, no, I'm not going to be bearish on that. I'm actually very bullish that these types of conversations are happening. I was just wondering like what the difference is. So we'll flag that. Maybe I'll ask Mahalo or somebody else who can tell me.

• 1:09:49David Hoffman?

  It's not some magical, cool, new rollup that's any better than you can do on a smart contracting layer, that's for sure.

• 1:09:55Ryan Sean Adams?

  Yes, and I think it might be.

• 1:09:56David Hoffman?

  But it's something.

• 1:09:57Ryan Sean Adams?

  It's something. It's huge. Good for Bitcoin. I'm very bullish about this. Yuga Labs is also maybe good for Bitcoin. Yuga Labs just made 16.5 million in the first Bitcoin.

• 1:10:08David Hoffman?

  NFT auction. What is this, David? So they have created a set of NFTs on the Bitcoin Ordinals Protocol. They did this funky little auction mechanism where they took in Bitcoin deposits from people and then took in their bids for what those Bitcoin transfers would be. And then they said, okay, and then they did the auction and then they returned all the extra Bitcoins that people lost. And so $16.5 million in revenue for UGA Labs for their 288 NFTs that they minted. The top bids were seven Bitcoin and four Bitcoin, which was insane. And they made $16.5 million in 24 hours. Were people upset at?

• 1:10:52David Hoffman?

  Extremely upset. Really? Why? Because of the auction mechanism. Basically, they were their own, I don't even know what to call it, custodian. So people would say, hey, send us your Bitcoin and your bid amount. And then we will run this auction in our like private black box, closed environment. And then we will determine the winners and spit back out all the money to the auction losers. Oh, that is terrible. That is not decentralized nor credibly neutral at all. Hence, the limitations of a blockchain that doesn't have a native smart contracting layer on it. Yes, it's very not bankless whatsoever. The auction mechanism itself, but the actual entity's storage. Bad and broken, yeah. I mean, I don't think they did anything bad or anything, but the point is, is that like. Well, we don't know, do we?

• 1:11:36David Hoffman?

  Here's Casey's tweet, which is extremely spicy. Dear UGA Labs, this Ordinals Twitter account that he's retweeting is correct. Actions like this prove that for some entities and for people, once a shitcoiner, always a shitcoiner. If I personally, Casey Rotemore, ever see you, Luga Labs, the entity, fuck around with the degenerate bullshit like this again, I will wash my hands of you forever and encourage others, including those close to me, to do the same. Get F'd, you highly regarded morons, Casey Rotemore. Who's this guy? Who's Casey Rotemore? He's, I had him on bankless with Eric Wall. That's, oh, is that Casey? This is the creator of the Ordinals Protocol, bro. And he is really pissed that they're using it in this way. Well, I don't think he.

• 1:12:18David Hoffman?

  Really cares about like them being bad. He thinks that they are setting a precedent for spammers and attackers like See any any bad person who sees this model is like, oh, I can just like copy what Yuga Labs did and people will send me their Bitcoins and I'll tell them I'll just, you know, give back the losers, but then I'll just run off with it. It does set a bad precedent.

• 1:12:36Ryan Sean Adams?

  You know what? I um, I wasn't on that episode of KC, but I listened to it. I really like this guy. I respect this guy. He's a new class of Bitcoin builders. And look at him taking a stand against like faulty auction mechanics.

• 1:12:48David Hoffman?

  He's got like the spicy, sharp edges that Bitcoiners have, and he's also got this like builder. It's like, it's a new character arc of Bitcoiner. You're totally right.

• 1:12:57Ryan Sean Adams?

  I like it. And of course, a whole bunch of Bitcoin fundamentalists hate him for even doing this.

• 1:13:03David Hoffman?

  Certainly. Yeah, but I'd have never aligned with the fundamentalists ever. Okay, so here is the update of Blockspace Bitcoin Blockspace fees.

• 1:13:13David Hoffman?

  Because of the ordinals, Bitcoin Blockspace demand was up for four weeks in a row. It then became down for two weeks in a row, and that was last week. In the last 10 days or so, it is up very big. I'm pretty sure that spike at the very far end has got to be this Yuga Labs ordinals demand. But the power shifting back into the favor of ordinals are here to stay. So we'll see how this pendulum shifts left and right. But we had some very big weeks in Bitcoin Blockspace demand in the last week or so.

• 1:13:41Ryan Sean Adams?

  I like it. I'm

• 1:13:42David Hoffman?

  I love this. This is so fun.

• 1:13:43Ryan Sean Adams?

  Yeah, it's been a while since Bitcoin put a big smile on my face, but like it's doing some cool stuff. I'm enjoying this arc.

• 1:13:50David Hoffman?

  I'm loving the pluralism coming out of Bitcoin.

• 1:13:52Ryan Sean Adams?

  I like this new season of Bitcoin. Yeah, 2023 season is great. Good job, creators of the show.

• 1:13:58David Hoffman?

  Bankless listeners are like, I never thought this was possible.

• 1:14:01Ryan Sean Adams?

  They just had to do stuff.

• 1:14:03David Hoffman?

  Yeah, they had to enable builders, man.

• 1:14:04Ryan Sean Adams?

  This is Amazon news that hit crypto this week. Amazon NFTs will be tied to real world assets. Tokens are possible. Amazon stepping into the NFT world, it sounds like.

• 1:14:16David Hoffman?

  Yeah.

• 1:14:16Ryan Sean Adams?

  We're not exactly sure what this means. What do you make of this? Do we have any details?

• 1:14:23David Hoffman?

  I don't have too many details. They are working, here's a statement. For instance, people would be able to purchase a fashion oriented NFT tied to a pair of jeans. So I think this is real world, high value, physical items paired with an NFT. How they managed to do that, I don't know.

• 1:14:44David Hoffman?

  It's not clear what's going on here, but it is clear that something's happening. My take here is that someone is advising Amazon on what to do and how to do it.

• 1:14:54Ryan Sean Adams?

  Or maybe, do you think there's a small Skunk Works team working inside of Amazon that are like bankless listeners and are hearing this?

• 1:15:00David Hoffman?

  If there is, they're definitely bankless listeners.

• 1:15:02Ryan Sean Adams?

  And hit us on Telegram?

• 1:15:03David Hoffman?

  Someone hit us up.

• 1:15:05Ryan Sean Adams?

  Give us some details so that we know more about this.

• 1:15:08David Hoffman?

  Yeah.

• 1:15:08Ryan Sean Adams?

  But not break any NDAs, of course.

• 1:15:10David Hoffman?

  Of course, of course not.

• 1:15:11Ryan Sean Adams?

  Yeah, it's cool.

• 1:15:12David Hoffman?

  We're not journalists. We're a thesis driven media company. We're not journalists at all.

• 1:15:15Ryan Sean Adams?

  Yeah, that's right. Bankless.com.

• 1:15:17David Hoffman?

  We keep secrets.

• 1:15:18Ryan Sean Adams?

  Let's find, let's, let's monitor that as we get new news. David, MultiCoin Capital, their hedge fund lost 91% in 2022. That was last year, of course. Big loss. Is this a big loss or is this just like the average crypto investor's portfolio? What's your take here?

• 1:15:36David Hoffman?

  It is a big loss. It's certainly worse than the average crypto person's portfolio. I've, no, I've been known to be a multicoin disagreeer, at the very least. I was initially like, ready to like gravedance, but then I like looked at my portfolio and I was like, well, okay.

• 1:15:57Ryan Sean Adams?

  You aren't down, you're not down 91%.

• 1:16:00David Hoffman?

  I'm not down 91.4%, not, not nearly that bad. But you can like, 2022 was a bad year.

• 1:16:06Ryan Sean Adams?

  Yes.

• 1:16:06David Hoffman?

  MultiCoin had very significant exposure to both, I'm assuming FTX, I think, rumors on that one.

• 1:16:12Ryan Sean Adams?

  Oh, they lost, David, they lost funds in FTX.

• 1:16:15David Hoffman?

  Oh yeah, they had money in FTX. Yeah, right.

• 1:16:17Ryan Sean Adams?

  The old fashioned way. They got scammed by SBF.

• 1:16:19David Hoffman?

  Had a ton of exposure to Solana. And so, like, yes, MultiCoin Capital, down 91.4%. That looks pretty damn bad. That sucks. They should have sold more, obviously. But also a reminder, like, 2022 was a very bad year and they were probably up decently big in 2021.

• 1:16:37Ryan Sean Adams?

  Oh, yeah.

• 1:16:39David Hoffman?

  Yeah.

• 1:16:39Ryan Sean Adams?

  They were the, do you remember Ryan Selkis?

• 1:16:41David Hoffman?

  You fly very high, you fall very fast.

• 1:16:43Ryan Sean Adams?

  Ryan Selkis' end of the year report, multi, multicoin were like the big winners of 2021. Yeah, I.

• 1:16:49David Hoffman?

  I would just like to talk to some of the multicoin LPs and investors because like it's really, the real signal here is like, are they happy? And I would like to hear more about that. I've heard my rumors. I've heard that people are upset. I haven't heard anything more beyond that.

• 1:17:03Ryan Sean Adams?

  Yeah, there, there's also rumors. Should we get, we shouldn't say any more rumors, huh?

• 1:17:08David Hoffman?

  Rumors.

• 1:17:08Ryan Sean Adams?

  We, we got slapped last week, but you know, when hedge fund founders sell the top as well, it tends to leave a bad taste in everyone's mouth.

• 1:17:17David Hoffman?

  Bad taste.

• 1:17:18Ryan Sean Adams?

  And also calling this thing.

• 1:17:19David Hoffman?

  Don't, don't take a Zoom call in a Ferrari. Don't do that.

• 1:17:22Ryan Sean Adams?

  That's not a rumor. That did happen, by the way.

• 1:17:24David Hoffman?

  That did happen. That is confirmed. Yeah.

• 1:17:26Ryan Sean Adams?

  Yeah, it's, it is, I think, odd sometimes when people hear the term hedge fund, which is supposed to hedge you against risk. And they see a 91.4% loss. It's really not how these funds operate in crypto. They're more like just liquid VC firms almost.

• 1:17:43David Hoffman?

  I don't operate a hedge fund. I don't intend on operating a hedge fund. I think if you are up some bajillion percentage points and it's, at some point, it's your duty to hit the sell button.

• 1:17:53Ryan Sean Adams?

  Is it? I wish I could take my own advice. I don't do that personally. I never hit sell.

• 1:17:57David Hoffman?

  Yeah. Well, you're not, you're not operating a hedge fund. You're operating a media business.

• 1:18:01Ryan Sean Adams?

  True. David, what's this story? This is crazy. I think this is a follow up to our story last week, right?

• 1:18:06David Hoffman?

  Yeah. So last week, a judge ruled that rocket ship upward chart and money bags emojis are, can be construed at as financial advice. A second judge has ruled that the shruggy emoji completely nullifies all previous emojis.

• 1:18:22Ryan Sean Adams?

  This is great news.

• 1:18:23David Hoffman?

  Yeah. So you can just say whatever you want and then you end your tweet with a shrug.

• 1:18:27Ryan Sean Adams?

  Wow.

• 1:18:28David Hoffman?

  Not financial advice.

• 1:18:29Ryan Sean Adams?

  Yeah, that's all you have to do. That's a disclaimer. So a shrug can be a financial disclaimer, not financial advice.

• 1:18:35David Hoffman?

  At least this is according to the rug dot me or dot XYZ. I'm getting the sense that Ryan did not get brugged this week.

• 1:18:41Ryan Sean Adams?

  No, I saw it. It almost got me and then I clicked it this time.

• 1:18:45David Hoffman?

  Yeah. All right. This is a pretty good one. So. I mean, I think that's a, I think if you ca- I think this is actually a pretty good-

• 1:18:52Ryan Sean Adams?

  It's fair. I actually think this is fair.

• 1:18:54David Hoffman?

  This is a fair take.

• 1:18:55Ryan Sean Adams?

  I think that if a rockin emoji means you're pumping your bags and you are soliciting or it's financial advice, then a shrug emoji should mean you are not doing those things.

• 1:19:06David Hoffman?

  Yeah. So there's that meme out there where he's like, the crypto investor just tells his friend, you know, totally buy this token, it's gonna make us rich.

• 1:19:15Ryan Sean Adams?

  Yeah.

• 1:19:16David Hoffman?

  I don't know, though. You always finish up with IDK, though, so that you don't ruin their life. That's what the shrug emoji is.

• 1:19:22Ryan Sean Adams?

  Oh, that's great. All right. I don't know, though. Perfect. We have a new disclaimer, actually, at the end of the Bankless Podcast. We'll just replace it with, "I don't know, though, shrug emoji."

• 1:19:33Ryan Sean Adams?

  Thank you, The Rug, for bringing a little levity to the situation here. What's this? Invest in Music. Welcome to Invest in Music. Fans become collectors. That's cool. Sounds cool. What is it?

• 1:19:44David Hoffman?

  Yeah, this is a brand new podcast. New podcast on the scene for people who want to consume more podcasts than what Bankless can offer you, although that's probably a surprise. If you are into the world of music NFTs, this is a podcast out of Cooper Turley. And so if you want to keep up with the world of music NFTs and the growing economy that relates to investing in and sharing Web 3 music and other things of that nature, Invest in Music is the new podcast for you. So check it out.

• 1:20:07Ryan Sean Adams?

  That's a good idea. Very cool. All right. On the raises this week, there've been a bunch, but here's the one notable one. Ethereum Layer 2 Scroll, which is a ZK EVM Layer 2, reaches 1.8 billion in valuation in their new funding round. That's a, that's a big valuation for a bear market.

• 1:20:25David Hoffman?

  Big valuation. Yeah, that's, that's right. They raised $50 million. So $50 million in the bank at a $1.8 billion valuation. And disclaimer, Ryan and I are angel investors into Scroll.

• 1:20:35Ryan Sean Adams?

  You said it in the bank. What bank do you think they use? Hopefully it's not Silvergate Signature. Who knows?

• 1:20:40David Hoffman?

  I mean, that, that was the metaphorical bank. I bet you it was USDC.

• 1:20:44Ryan Sean Adams?

  Yeah.

• 1:20:45David Hoffman?

  When we invested in Scroll, we said USDC.

• 1:20:46Ryan Sean Adams?

  When is, when is our language going to adapt to, like, rather than say "in the bank," or like, I still catch myself, I say, "we got money in the bank," or like, "I'll write you a check." And I'm not literally writing, writing a check anymore.

• 1:20:59David Hoffman?

  Right, right, right.

• 1:21:00Ryan Sean Adams?

  It'll take some time to kind of catch up.

• 1:21:01David Hoffman?

  Oh, I think we still use the words. It just mean, it starts to mean something different.

• 1:21:05Ryan Sean Adams?

  Okay, okay.

• 1:21:06David Hoffman?

  It just landed in my account because you sent it five seconds ago.

• 1:21:10Ryan Sean Adams?

  Yeah. That feels a lot better.

• 1:21:12David Hoffman?

  And I didn't have to wait.

• 1:21:14Ryan Sean Adams?

  Jobs this week, of course. We got companies raising, that means we got companies hiring. Big one to point out this week. Bankless is hiring, of course, but I want to point this one out. Immutable wants a protocol blockchain engineer. This is layer two. Very technical. Yeah, fantastic. Work in gaming, gaming infrastructure, gaming platform. Go check this out. There's a whole bunch more jobs I could list, but I won't right now. Go check that out at the banklist.pallet.com job sport. David, what do we got coming up next?

• 1:21:43David Hoffman?

  Coming up next, we got questions from the nation, as well as the hot takes of the week, as well as the meme of the week, as well as what Ryan and David are bullish on. We'll probably chatter about some ETH Denver stuff as well for those that want to stick around after all the news and just hear about what ETH Denver was like. So all of that and more coming up as soon as we talk to some of these fantastic sponsors that make the show possible. The Phantom Wallet is coming to Ethereum. The number one wallet on Solana is bringing its millions of users and beloved UX to Ethereum and Polygon. If you haven't used Phantom before, you've been missing out. Phantom was one of the first wallets to pioneer Solana staking inside the wallet and will be offering similar staking features for Ethereum and Polygon. But that's just staking. Phantom is also the best home for your NFTs. Phantom has a

• 1:22:25David Hoffman?

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• 1:23:09David Hoffman?

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• 1:23:53Ryan Sean Adams?

  Question from Siogi this week from the Bankless Discord. Here it is. "Is there some economic or technical reason that chains cannot use a stablecoin as the native token for gas? I know Terra did, but that was a unique setup, which didn't work." Yes, it didn't. "Why is there no chain using a fully collateralized stablecoin as gas and providing non-inflationary staking rewards based on fees for block space?" Seems like a good idea.

• 1:24:17David Hoffman?

  Interesting question, yeah. I really love some of these questions that really illustrate to me where the question asker is on their journey down the crypto rabbit hole. This person is at like the very like, starting to get into some like really technical like level questions, like why can't we use stablecoins for gas? Yeah, it's a good place to be.

• 1:24:33Ryan Sean Adams?

  Thinking of novel ideas here.

• 1:24:34David Hoffman?

  Right, yeah. Asking why can't we do this is a like a great way to learn. Okay, so great question. Why can't we use a stablecoin for gas? Terra did. And so they said, is there some economic or technical reason? And the answer is yes, both. Going back to when we were talking about tokens versus coins, Ryan, we need Ether, the coin of Ethereum, to be the gas. Why do we need that? Well, because in proof of work, so this also applies to Bitcoin, you need Ether and Bitcoin to have value, because they are the things that economically secure systems. The outside world calls the crypto industry like blockchain. These are blockchains. A blockchain is actually just one part of a grander system of technologies that combined

• 1:25:18David Hoffman?

  together create what we know as like Bitcoin or Ethereum. The way that Vitalik, and I've been using this language, have called these things crypto-economic systems. And so it's a semblance of cryptography.

• 1:25:31David Hoffman?

  A database and economics. You must have a native currency of a crypto economic system to be self sufficient and independent and autonomous.

• 1:25:40Ryan Sean Adams?

  Cause that's what secures the thing.

• 1:25:42David Hoffman?

  That's what secures the thing. Miners don't mind Bitcoin unless Bitcoin has value. Stakers don't stake Ether unless stakers have value. Where does that value come from? It comes from the enshrined relationship between the economics of buying block space from Bitcoin and buying box block space from Ethereum. Using the native currency. If you don't have that relationship between block space, demand and currency of the chain. Then why does that currency exist at all?

• 1:26:09Ryan Sean Adams?

  That that It has to be intrinsic.

• 1:26:11David Hoffman?

  That that relationship must occur. That has to be. And therefore, on the Ethereum layer one, we cannot use DAI, for example, to pay for gas. Because we must enshrine the value of Ether. So that is the economic reason. Also, in EIP 1559, this made this formal. So before EIP 1559, people were talking about like, oh, you can just like pay miners, you know, OTC. You can like Venmo them to process your transactions and that could have worked. And actually, actually still is true for Bitcoin, actually. Bitcoin is actually not enshrined. Miners can put things into the blockchain for, you know, zero Bitcoins if you pay them in the pocket. So that's still a thing for Bitcoin. In EIP 1559. It formally enshrined Ether as the native currency of Ethereum.

• 1:26:55David Hoffman?

  So you can't route around Ether. Ether must be burnt in order to make a transaction on Ethereum. So that is the technical reason that you can do this. Now, what's cool is that that is true of the Ethereum layer one. That is not true of layer twos. You can use any token that you choose on a layer two to pay for gas. However, that layer two must pay for Ether for layer one block space. But any layer two could use a stablecoin or any other type of asset, for that matter, as gas. Coinbase Coinbase chain, they would be violating securities laws. Could tokenize the coin security and the coin equity. Turn that into a token on base and that could be the gas token for base. That's not what's happening. I just made that up.

• 1:27:40Ryan Sean Adams?

  That would, by the way, that would make

• 1:27:42David Hoffman?

  Possibility.

• 1:27:42Ryan Sean Adams?

  Make way more sense, in my opinion, like securities laws aside, that would be like a much more aligned kind of ecosystem.

• 1:27:49David Hoffman?

  That would be very, very bullish for the coin asset.

• 1:27:51Ryan Sean Adams?

  Sure.

• 1:27:52David Hoffman?

  Except for the fact of violating securities laws. That part would be bearish.

• 1:27:55Ryan Sean Adams?

  Yes. Now, okay, so. Tell me about, by the way, that was a, I think that was a great answer.

• 1:28:01David Hoffman?

  Thank you.

• 1:28:01Ryan Sean Adams?

  A couple of things this triggered for me, but like, tell me about this new account abstraction ability, where through a smart contract wallet, I actually don't have to pay for my Ethereum gas fee with ETH the token. Is that a thing that's happening? Is that part of what you meant by kind of the technical reason you can't?

• 1:28:21David Hoffman?

  Okay, now we're, now on to new horizons. Now we're talking about wallet design and account abstraction. What account abstraction does is that say you've got a brand new wallet and you throw 25 USDC in there, there's zero ETH in there, so you don't have any ETH to pay for gas, and you would like to send that 25 USDC outbound, or do something with it, or deposit and to pull together, but you don't got any gas.

• 1:28:42Ryan Sean Adams?

  Yeah, wouldn't it be nice? It would be nice.

• 1:28:43David Hoffman?

  Wouldn't it be nice? Yeah. So with account abstraction, you can have a different wallet to pay your gas fee, and so you actually never have to have ETH inside of your wallet, and you can still do crypto and DeFi things. Someone else on your behalf pays for your gas, but that person is still paying for gas.

• 1:29:01Ryan Sean Adams?

  Yeah.

• 1:29:01David Hoffman?

  The economic rules of you must use ETH still apply to someone, somewhere, but with account abstraction, you can change who's responsible for those rules.

• 1:29:10Ryan Sean Adams?

  A relay could pay for it, the smart contract wallet could kind of provide some reason to pay for it, all of those things. You know, that was a great answer. Do you know that the other thing that kind of reminded me of is when you were talking about, yeah, in Bitcoin, this is still an unsolved problem, that somebody could go in a Telegram group and, and send someone money out of bound in order to reward them for, you know, processing their transaction in, like, first, before everyone else. This is the problem of MEV, minor extractable value, and we could call it minor extractable value in the case of Bitcoin. All this kind of throws to me is like, with Bitcoin doing this ordinals thing, and with block space demand going up, my God, they're gonna have to go solve all of

• 1:29:52Ryan Sean Adams?

  the same problems that Ethereum has had to solve over the past three to four years, including challenges with their monetary policy, like, and enshrining Bitcoin as the asset for, for block space, and also including like issuance, and like, they're going to have to follow this exact same path and solve it, whether they know it or not. Why? Because if your block space is demanded... In the same way that Ethereum is, then you're going to face the same challenges that Ethereum did. It's hilarious to me, like in a good way, like, oh, that's like, that's sweet. You're growing up.

• 1:30:25David Hoffman?

  They're doing it.

• 1:30:26Ryan Sean Adams?

  You're doing it. Yeah. Anyway, they'll figure it out. I'm sure.

• 1:30:30David Hoffman?

  Okay, so that brings us to the take of the week, which because you've said that, I'd like to skip to the last take of the week and we can go to the other ones first. This was from Wang Zhongian. Sorry for butchering your name. Apologies. Who tweets out Ethereum culture and technology is influencing Bitcoin culture and technology. Now, for people that have been around for the last bear market, Nick Carter says this, I believe Hozu also says this, that, or previously said this, is that Ethereum culture is downstream of Bitcoin culture in that Bitcoin, Bitcoiners, Bitcoin is at the spearhead of the crypto movement and everything else is downstream of Bitcoin, including Ethereum. That was very true. You and me, Ryan, being like, and Anthony Sazano and all the others saying like ETH is money, that was us like being downstream.

• 1:31:15Ryan Sean Adams?

  Trying to catch up.

• 1:31:16David Hoffman?

  Trying to catch up, right? Block space demand, security, all of that kind of stuff.

• 1:31:20Ryan Sean Adams?

  I learned about settlement assurances as well as you did from Nick Carter.

• 1:31:23David Hoffman?

  Exactly, right? And so so much of what is Ethereum today, we learn from Bitcoiners. Bitcoiners have stalled out, man. And now I think the tables have turned. And so ordinals, all of what you just said, just like Bitcoiners have to learn about, like enshrining the value of BTC, all that kind of stuff. Now they have to do all the hard work that Ethereum has done over the last five years and they haven't done any of it because the fundamentalists have been in the lead. They've had, they've had control. And so like now, like now we're finally bullish on Bitcoin builders, but it's also now bearish because they now realize how far behind they are in this conversation.

• 1:31:59Ryan Sean Adams?

  It's going to require some protocol upgrades and do they have the social layer, the layer zero that can, can adapt and sustain that?

• 1:32:05David Hoffman?

  I don't think they do.

• 1:32:06Ryan Sean Adams?

  Right? It's going to be an uphill battle and a challenge, but it's, it's definitely cool to see. We've got some other takes of the week. This is one from Mike Dudis.

• 1:32:13David Hoffman?

  Mike Dudis is retweeting two of Paul Krugman's very old tweets. One goes back to January of 2018 where Paul Krugman says, cryptocurrency lets you make electronic transactions, but so do bank accounts, debit cards, PayPal, Venmo, all of these other methods involving trusting a third party, but unless you're buying drugs, assassinations, that's not really a big deal. And so kind of disqualifying crypto as a payment.

• 1:32:37Ryan Sean Adams?

  All crypto users are criminals, aren't they?

• 1:32:39David Hoffman?

  So fast forward to his tweet just now, so five years later. "I've been using Venmo for years," says Paul Krugman, "but now it won't allow me to make payments. I spent a long time in chat with representatives. They told me they can't explain why or fix it. The software has taken control."

• 1:32:55David Hoffman?

  Mighty how to turn tables in five years.

• 1:32:59Ryan Sean Adams?

  Oh, Paul, you know, sometimes you don't realize it until you happen, until it happens to you. I mean, like, Paul Krugman is an economist, of course. He's said some pretty anti-crypto things in the past, not seeing its utility, but until it happens to you, in the country where you live, when the situation that you have in front of you, you actually don't appreciate the value.

• 1:33:20David Hoffman?

  It just always brings me back to my like two mental models of people in the world. There's people that see crypto for what it can be in the future and then therefore believe in it today. And then there's people who see it for what it is today and see just like a fucking mess.

• 1:33:33Ryan Sean Adams?

  Yep. Those are the two camps. I totally agree. Mark Andreessen, this is somewhat related. He said this, "I can't convince you to want freedom, but if you do want freedom, it can't come to you in the form of a centralized system, whether that's communism, backdoored cryptography, or centrally controlled AI." That was a good take. You want freedom, it can't come built on top of centralized systems.

• 1:33:58David Hoffman?

  Love it.

• 1:33:58Ryan Sean Adams?

  Very true.

• 1:33:59David Hoffman?

  It cuts so deep for like what we're trying to do here.

• 1:34:01Ryan Sean Adams?

  Yeah.

• 1:34:02David Hoffman?

  Like crypto's here to set you free.

• 1:34:04Ryan Sean Adams?

  Absolutely. David, what are you bullish about?

• 1:34:07David Hoffman?

  Oh, God, I am bullish on the Bankless Nation, man.

• 1:34:09Ryan Sean Adams?

  Are you?

• 1:34:10David Hoffman?

  So people who listen to Bankless will know that I'm very, very bullish on ETH Denver as an event, because it was the place that I decided that I'm going to just yeet myself out of my previous life and do whatever this crypto thing means. So I was like alone, going off to ETH Denver with zero friends. I just like awkwardly.

• 1:34:28Ryan Sean Adams?

  First day of school.

• 1:34:28David Hoffman?

  Ask this stranger.

• 1:34:30Ryan Sean Adams?

  Oh, my God, it is the first day in school picture.

• 1:34:34David Hoffman?

  So like, I didn't know anyone at ETH ever, so I just gave this person my phone like, "Hey, can you take a photo of me in front of this sign?" And here's that photo. Fast forward five years later, we're at the first ever Bankless meetup and there's 150 people here and we had to keep it a secret because we knew that it was just going to be overwhelmed. So shout out to everyone that came for the Bankless meetup and had the free beer at the brewery. It was a fantastic time. I enjoyed meeting absolutely everyone. Ryan, I got up on stage, grabbed a microphone, zero plans whatsoever and just started talking for a little bit and ended up just like thanking all of the HQ team for all of the support. It's, it's cool. It's great to have company. It's dangerous to go alone.

• 1:35:15David Hoffman?

  And the fact that 150 people want to show up for the same movement that I saw five years ago is just incredibly humbling. Yeah.

• 1:35:22Ryan Sean Adams?

  It is. It's super humbling. This is the other how it started, how it started, how it's going. Only in like a positive way.

• 1:35:29David Hoffman?

  It's going pretty well.

• 1:35:31Ryan Sean Adams?

  That's awesome.

• 1:35:33David Hoffman?

  So that's what I'm bullish on. What are you bullish on, Ryan?

• 1:35:34Ryan Sean Adams?

  Look, I'm gonna say it again, bankless.com, bankless 2.0. I just want to take a moment because we talked about it already so much about like why we're, why we're doing this, I think. And the big reason is because it was time to get more freedom, David, and kind of-

• 1:35:51David Hoffman?

  Time to set sail.

• 1:35:52Ryan Sean Adams?

  Yeah. At the, at a high level, I mean, Substack is, it's kind of, it's its own platform, a bit more, that's the platform we were using for our newsletter and for Bankless, you know, premium membership and that sort of thing. It was constraining. We couldn't build crypto features on top of it. So we set sail, we created our own path, we created some more white space. It's been a tremendous effort. This is just the beginning, though. That's what excites me the most because now we can start building on top of this platform. And I just want to take a minute to thank the entire Bankless team that has made this possible. In particular, I want to thank Jason and James, who are our key web devs and front-end experts that actually brought this to fruition. And of course, our entire

• 1:36:37Ryan Sean Adams?

  newsletter team, alpha team, and the pod squad for populating all the content. It's a fantastic job. And I want to thank- You, Bankless listener, we appreciate you guys like a lot like the picture that David was just showing earlier. Like to have, I think I was asking David like, oh, so how is, how is the Bankless Nation? When you meet people from the Bankless community, how are they in person? Are they, are they cool? Like, do they have good vibes? It was like, it's like-

• 1:37:04David Hoffman?

  Do they like us?

• 1:37:05Ryan Sean Adams?

  Yeah, it's, it's like, these are all united people, like with a shared set of values. And it's so cool. They're instant friends, right?

• 1:37:13David Hoffman?

  Right.

• 1:37:13Ryan Sean Adams?

  And we would not be able to kind of launch this and carry this movement forward. We really consider ourselves in this whole Headless brand of the Bankless movement, just torchbearers. We're just trying to set the path.

• 1:37:24David Hoffman?

  Just trying to show the way.

• 1:37:25Ryan Sean Adams?

  Yeah, Bankless is for everyone and now we have more resources to do it. And we have those resources because you tune in every week to the show and support us. Because some subset of you have become Bankless citizens and are taking that journey with you, with us. And we just appreciate you all. It's just fantastic. So, thank you. Thank you to everyone who made this possible. This is just the beginning.

• 1:37:48David Hoffman?

  Yeah, we've been wanting a website for a while, but we've wanted to also do it right. And this is finally a website that we just feel so damn good about. And like Ryan said, it is just the beginning in meaning that now we have our own vehicle, our own ship, our own structure to do cool things on top of.

• 1:38:09Ryan Sean Adams?

  David, did you send me a cool thing?

• 1:38:11David Hoffman?

  I just sent you a cool thing.

• 1:38:12Ryan Sean Adams?

  I got no friends.

• 1:38:13David Hoffman?

  First thing that you can, you can already do something, Bankless Nation on the Bankless website. Which is if you are a, if you already are subscribed to Bankless, if you already have given us your email address to receive the newsletter or the podcast or whatever, you can go mint a Po app. And Ryan's about to show the Po app on the screen because it's ship season, because we are sailing west. So this is the inaugural Po app for christening, if you will, the Bankless website. It's a ship because we're sailing west. It's a ship because it's ship season. And it's just really just a badass looking ship.

• 1:38:44Ryan Sean Adams?

  This is the first time I've seen this, man. I love this. Shout out to Logan who produced this for us.

• 1:38:49David Hoffman?

  On his birthday, by the way. Sorry for making that request, Logan.

• 1:38:52Ryan Sean Adams?

  Thank you. And look, we got the black- Flags at the top, you see that?

• 1:38:55David Hoffman?

  It's so good, yeah. So if you want to mint the Po app, you go to bankless.com, sign in with the email address that you've already created an account. If you have not yet already created an account, I'm sorry, you can't mint the Po app. Because of anti-sibyl and spam mechanisms, we have to gate it to people who have already given us their email addresses, otherwise people will attack the system. Go with the Po app and celebrate. Sailing westward, we're going west.

• 1:39:17Ryan Sean Adams?

  This is awesome. Alright, David, let's end here. Meme of the week, what are we looking at this week?

• 1:39:21David Hoffman?

  So this was the toilet paper at December. It was a roll of toilet paper.

• 1:39:25Ryan Sean Adams?

  Was this everywhere? Are you serious?

• 1:39:27David Hoffman?

  It was in quite a lot of places, yeah. This is Sam Bankman-Fried on toilet paper. So if you ever took a number two, you wiped your butt with Sam Bankman-Fried's face.

• 1:39:38Ryan Sean Adams?

  Did you get the opportunity, David, or is that a personal question?

• 1:39:41David Hoffman?

  I'll leave that up for the Bankless Nation to wonder about.

• 1:39:44Ryan Sean Adams?

  For the imagination, oh my god.

• 1:39:45David Hoffman?

  For the imagination. Please picture that.

• 1:39:48Ryan Sean Adams?

  That's been the end. That's it, guys. We've got a cool moment of zen for you. Again, celebrating the new Bankless 2.0 website.

• 1:39:55David Hoffman?

  If you're listening, it won't really make sense, so watch the YouTube.

• 1:39:57Ryan Sean Adams?

  Yeah, watch the YouTube. Risk and disclaimers, guys. Crypto is risky. You could definitely lose what you put in, but we're headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the Bankless journey. This has not been financial advice. Shrug emoji.

• 1:40:12David Hoffman?

  Shrug emoji.

• 1:40:52Speaker 05

  When the bus moved and I saw that house for the first time, in my wildest dreams, I never could have imagined something so gorgeous.