Why We're Bullish L2s

Are L2 tokens worthless governance coins? Will they accrue value? Are L2 tokens bullish? Ryan and David dive into the details in this week’s episode of Bankless Takes. ----- 🏹 USE PODCAST24 FOR 10% OFF https://bankless.cc/Citizen2024 ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE ⁠https://k.xyz/bankless-pod-q2 ⁠ 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle ⚖️ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum 🔗CELO | CEL2 COMING SOON https://bankless.cc/Celo 🗣️TOKU | CRYPTO EMPLOYMENT SOLUTION https://bankless.cc/Toku ------ TIMESTAMPS & RESOURCES 0:00 Intro 3:03 L2s Numbers https://www.growthepie.xyz/fundamentals/daily-active-addresses https://l2beat.com/scaling/summary https://defillama.com/chains 16:55 Tokens Worthless? https://x.com/RyanSAdams/status/1745919415604883725 32:30 P/E Ratios 36:05 Token Valuations 38:40 Alt-L1 Bull Case 44:40 Summarizing 47:00 Closing & Disclaimers ------ Not financial or tax advice. 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?

  Why are L2 tokens bullish? That is the topic today on Bankless Takes. Bankless Takes is an episode where David and I just speak our mind on whatever we want to talk about. And today, we decided to talk about-

• 0:09David Hoffman?

  We want to talk about Layer 2 tokens.

• 0:11Ryan Sean Adams?

  Yeah. Are they bullish? Are they bearish? I mean, that was kind of a question, a few things we're going to take on. The question of, are L2 tokens worthless governance tokens? That is narrative going around. Will they accrue any value? Or are they actually bullish?

• 0:26David Hoffman?

  Brian, before we get into the conversation, why? Why are we having this conversation? Where did this come from?

• 0:31Ryan Sean Adams?

  Well, you were out mountain climbing, David. There was some robust discussion in the Bankless Citizen Discord, as there always is, by the way. So if you are a Bankless-

• 0:39David Hoffman?

  It's been crescendoing-

• 0:40Ryan Sean Adams?

  You should join.

• 0:41David Hoffman?

  In a big way.

• 0:41Ryan Sean Adams?

  Great discussions. Anyway, the question was posed exactly as I stated, like, are L2 tokens going to go up? Are they bearish? Are they bullish? Are they just worthless governance tokens? How should we think about them? How do you guys think about them? And so, this is essentially my answer to this, and I want to see how much you agree with that answer. And we may as well record it as an episode. Sound good?

• 1:05David Hoffman?

  I think we should do it, and we'll get right into that conversation. But before we do, a moment to talk about some of these fantastic sponsors that make this show possible, especially Kraken, our preferred exchange, for getting off and on the Layer 2s that we're probably about to talk about here in this episode today. Let's go hear from Kraken right now. Kraken knows crypto. Kraken's been in the crypto game for over a decade, and as one of the largest and most trusted exchanges in the industry, Kraken is on the journey with all of us to see what crypto can be. Human history is a story of progress. It's part of us, hardwired. We're designed to seek change everywhere, to improve, to strive. And if anything can be improved, why not finance? Crypto is a financial system designed with the modern world in mind. Instant, permissionless, and 24/7.

• 1:49David Hoffman?

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• 2:10Ryan Sean Adams?

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• 2:13David Hoffman?

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• 2:57David Hoffman?

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• 3:03Ryan Sean Adams?

  All right, David, so the first place, and if we're going to talk about L2 tokens, we have to see if there's zombie chains or not. Like, is anyone actually using these things? And it's been a few days since I've looked at some of these metrics, but in-depth, probably like a few weeks. And it's maybe, maybe worth a review to look at some of the core metrics. So I've got a website pulled up. Yeah, let's set the table. It's called growthepie.xyz. And fun fact, David, you can get a lot of L2 metrics, layer-two metrics, on the internet these days, all right? There's a series of fantastic. What a great place. I know. It's a series of fantastic sites that put this out. The first is GrowthePie. And let's take a look at daily active addresses. So you can think of a daily active address almost like a bank account.

• 3:47Ryan Sean Adams?

  It's true that like a user can have multiple addresses. That is also true. So it's like a one-to-many relationship. Some users probably have like, I don't know, thousands? Probably. But this gives you a sense of, you know, the number of addresses on the chain. ZK Sync Era is right now leading in daily active addresses. So these are kind of bank accounts, as it were, using the chain, 428,000 daily. Arbitrum, right behind that, 185,000. Linear, right behind that, 88K. OP Mainnet, 66. Base, 63. Scroll, 40. 44K on down, Zora, Polygon are also in there, Immutable X, etc. Polygon POS is not in there because not technically a layer two.

• 4:32David Hoffman?

  Sidechain, yeah.

• 4:33Ryan Sean Adams?

  Yeah, it's a sidechain, but that is in the process of being converted to a layer two. I expect we see that sometime in 2024. Anyway, that gives you a sense of some of the activity and it's, it's kind of up only, David. If you look at sort of the maximum, look at this.

• 4:49David Hoffman?

  Right.

• 4:49Ryan Sean Adams?

  I mean, it's growing now.

• 4:51David Hoffman?

  Yeah.

• 4:51Ryan Sean Adams?

  I should probably say not all of this activity corresponds to one like user. I think some of these chains are like airdrop hunting, airdrop farming.

• 5:01David Hoffman?

  Yeah.

• 5:01Ryan Sean Adams?

  As it were.

• 5:02David Hoffman?

  The chains that have not issued tokens have a probably a significant premium of activity from people who are just using the chain to hunt the token. And you can probably see that both in the daily active addresses and also the transaction counts for some of these chains.

• 5:17Ryan Sean Adams?

  And which ones would those be like ZK?

• 5:19David Hoffman?

  Yeah, ZK Sync Era is the big one. Linnea also very big. Base is probably not being airdrop hunted because I don't think people are really like thinking about a base token. And so there's opportunity cost to hunt the base token when you could be hunting like ZK Sync has been talking about their token for like 2019 or something like they haven't been shy about that.

• 5:40Ryan Sean Adams?

  Yeah.

• 5:40David Hoffman?

  And so probably base is more or less above 95% organic.

• 5:46Ryan Sean Adams?

  So good numbers on that and certainly up only. On the transaction count, we're seeing kind of up only numbers as well. So you'll notice some massive spikes here too, like see this arbitrum spike.

• 5:58David Hoffman?

  Those are going to be inscriptions, right?

• 6:00Ryan Sean Adams?

  Inscriptions.

• 6:00David Hoffman?

  Oh, that was the, that was the spike that took down the arbitrum chain.

• 6:03Ryan Sean Adams?

  Exactly, this was.

• 6:04David Hoffman?

  But also was the number one largest daily transaction volume of any layer two.

• 6:10Ryan Sean Adams?

  Yeah, so really stress tested arbitrum.

• 6:13David Hoffman?

  Super stress tested.

• 6:14Ryan Sean Adams?

  So this is definitely a metric of for usage, but it can be gamed in like all various ways that we've sort of seen.

• 6:20David Hoffman?

  One transaction is, does not equal one transaction. Not all transactions are the same.

• 6:24Ryan Sean Adams?

  But still, I mean, you want to see an up trend line over time and you'll see spikes for volatility. It's also a good stress test of how many transactions these networks can actually handle before falling over. So ZK Sync Era right now is the current lead with 1.3 million transactions on a daily basis, Arbitrum a second with 720,000 right now.

• 6:47David Hoffman?

  Did you hear the report as to why Arbitrum toppled over when the inscription attack got it?

• 6:54Ryan Sean Adams?

  A little bit. I don't recall the details.

• 6:56David Hoffman?

  I think it was something like super trivial. It was like an out of date Prism client. And once they, once they updated it, it was like, oh, it's done. We fixed it.

• 7:06Ryan Sean Adams?

  That's the problem when you just have one sequencer as well, right? Which multiple sequencers can start to fix.

• 7:10David Hoffman?

  Liveness failures.

• 7:12Ryan Sean Adams?

  OP mainnet is next, 369,000, and then Base and Immutable X is on there. Linnea is on there as well.

• 7:21David Hoffman?

  Congratulations to Arbitrum for passing 500 million transactions. I don't know if that makes them number one in total, like, raw transaction count. It could be. They could be number one in that.

• 7:32Ryan Sean Adams?

  For layer twos.

• 7:33David Hoffman?

  So that's pretty cool for layer twos. Yeah, that's pretty cool. And Arbitrum, like, probably has the highest ratio of total transactions to total organic transactions, because they've had, like, a decent amount of activity post-token launch.

• 7:46Ryan Sean Adams?

  Yeah, they've been around for a while, too. Stablecoin metrics as well. So Arbitrum has about $2 billion worth of stablecoins on chain. OP has 610 million. And then Base, all right, this is one to watch for stablecoins. You know that Coinbase is going to send some love Base's way.

• 8:04David Hoffman?

  They're gonna put the USDC on the Base chain. That's where it's gonna go. And then Circle, which Coinbase owns 25% of, is gonna go public. And then Base is going to be the Visa competitor. That's my prediction.

• 8:17Ryan Sean Adams?

  That feels like a good, solid prediction. So this is at 300 million right now. But I expect that to, like, 10x, you know, 50x. I don't know, something like that. It's going to be pretty large. Then a total value locked, this is a pretty astounding statistic. So, yeah, so if we look at the total.

• 8:36David Hoffman?

  Look at that Arbitrum chart.

• 8:37Ryan Sean Adams?

  22 billion across all layer twos, all right? But so Arbitrum has about half that at 10 billion. OP has about 6 billion, and then Base, 750 million. So pretty respectable. ZK Sync, Era.

• 8:51David Hoffman?

  I really like having Base metrics here because they feel so pure.

• 8:57David Hoffman?

  Optimism in Arbitrum, probably pretty damn pure, too. Arbitrum, I think, recently has some liquidity incentives going on that are kind of juicing some numbers. But like, the Base, they're not gonna juice liquidity. They're not launching a token. So like, the Base just feels like it gives us... Like a control to compare against?

• 9:14Ryan Sean Adams?

  Yeah.

• 9:15David Hoffman?

  I think a really useful like metric to have.

• 9:17Ryan Sean Adams?

  I agree. And by the way, this is, we're talking about the, the big ones, but there's this massive long tail of layer twos that aren't even listed on this website, right? That are kind of like trying to compete. Like, we haven't even talked about mantle. That's been a like massive grower lately. Then there's another metric, which I think is useful, which is on-chain profit.

• 9:36David Hoffman?

  Okay. So this is the kind of the punchline that we're getting to, right?

• 9:38Ryan Sean Adams?

  I think so. This is going to be part of like how we talk about L2 tokens and why they're valuable. But this says Arbitrum yesterday was about 60K in on-chain profit. And you could see, like, look at these massive spikes. So there was a day where Base was making, let's see, 380K per day. That was July 30th. So this must've been FriendTech.

• 10:04David Hoffman?

  That must've been like launch. Yeah.

• 10:06Ryan Sean Adams?

  Yeah, launch around that like series. So it's spiky. This is these, these averages.

• 10:12David Hoffman?

  It's not smooth. Yeah.

• 10:12Ryan Sean Adams?

  Yeah. These daily averages are not necessarily kind of like the annual averages, which would be.

• 10:16David Hoffman?

  This is a seven, seven day rolling average, it says.

• 10:19Ryan Sean Adams?

  Okay. Seven day rolling average. So.

• 10:21David Hoffman?

  It's still spiky, by the way, instead of seven days.

• 10:23Ryan Sean Adams?

  We should explain what profit is. Okay? So what profit basically is, why don't you explain it, David?

• 10:29David Hoffman?

  Well, the Grow the Pi website has it actually pretty laid out strong, pretty strongly here because they have this economics section of the tabs that we're looking into. And page number one in this section is fees paid by users, AKA layer two gas fees. The next page is rent paid to the layer one, AKA the gas fees paid by the layer two to the layer one. And then the third page is on-chain profit. And if you take the first fees paid to users to the layer two, subtract the second, which is fees paid by the layer two to the layer one, you get the third on-chain profit, the difference. And so I'm pretty sure if we just go through these pages, you'll be able to calculate the numbers. Yesterday Arbitrum pocketed a difference of $61,500.

• 11:12David Hoffman?

  Between the difference of what the users paid to Arbitrum versus what Arbitrum paid to the Layer 1. Let's go check how much Arbitrum was collected revenue from users yesterday. So Arbitrum, if you could click on that tab, Arbitrum collected $188,000 yesterday from users who paid for Arbitrum block space. And then yesterday Arbitrum paid Ethereum, how much? Let's go to that tab. Arbitrum paid Ethereum $126,000. And so if you subtract those, that number from the first, you get the profit, which is $61,000. And this is the profit in a pre-Proto Danksharding, pre-full Danksharding state where 95% of

• 11:53David Hoffman?

  the costs for these Layer 2s are data availability. And that goes down with Proto Danksharding, which is coming in March. And then we'll like, almost approach a very low number, I don't want to say zero, but a very low number with full Danksharding, which is coming 2025-ish, maybe. No one knows.

• 12:11Ryan Sean Adams?

  And they'll pass these savings on to the user, right? So what I love about this is it's such a simple model. It's like a value-added reseller type of model, right? So you have a supply of block space that Ethereum sells wholesale. It's like, hey, who wants my block space? I'll sell it to you. And a bunch of Layer 2s are bidding on that block space. What do they do? They buy that block space from Ethereum, and then they resell it. Who do they resell it to? Users, DApps. They resell it. They add their bit of value on top of it, which is execution layer value. And then on that delta, they make a profit. So they have revenue, they have expenses, and they have profit. It's a P&L business. This is something Larry Fink could understand, okay?

• 12:54David Hoffman?

  There's three lines.

• 12:55Ryan Sean Adams?

  It's like, it's not hard. And the interesting thing about this is, they're all profitable. And we'll talk about where that revenue is.

• 13:02David Hoffman?

  By default. They're profitable by default.

• 13:05Ryan Sean Adams?

  Yeah. Now, of course, we're not taking into account like, how much it costs to run the sequencers. We're not taking into account how much it costs to like, develop the software, do the marketing for these chains. All of that is additional cost that's outside of this type of a P&L, right? But you can clearly see profits are Being made and like if you turned off everything else, you would have a profitable business right here as long as you kept the sequencer running. All right. So one last thing to show you, and then we'll get to the question of art layer two tokens. Great. Or do they suck? And what do we think about this? This is a total value locked across all chains. So this is kind of one metric. It's kind of important because what I think you want to do is you want to start benchmarking.

• 13:44Ryan Sean Adams?

  Layer twos and you know how much value that they are accruing right now and managing right now versus maybe alternative layer ones or Ethereum itself. So right now Ethereum is over 50%. Let's see, it is about 55% in total value locked, right?

• 14:03David Hoffman?

  Next Ethereum layer one.

• 14:05Ryan Sean Adams?

  Ethereum layer one. Next is Tron. All right. And this is because there's a

• 14:09David Hoffman?

  I would never not laugh at that.

• 14:11Ryan Sean Adams?

  David, there's 50 billion dollars worth of USDT primarily on Tron.

• 14:16David Hoffman?

  There is 69 billion dollars. Nice. In stables on Ethereum and there's 50 billion dollars on Tron and Tron doesn't even have DeFi. It just has payments.

• 14:26Ryan Sean Adams?

  Exactly. So that's an interesting sort of, I guess, like edge case, but is real utility for some people. Binance Smart Chain. Let's see. Binance Smart Chain is next with about 6%. And then Arbitrum, 4%, 4.6%, Solana, about two and a half percent. Optimism, 1.5%, Polygon, 1.5%, Avalanche, 1.5% on down. Okay. So Arbitrum is about double the size of Solana. Okay. And in the same ballpark as optimism right now. And Avalanche is, you know, roughly the size of Polygon from, you know, total assets under management.

• 15:04Ryan Sean Adams?

  So all told, alternative layer ones, if you disclude Tron and Binance Smart Chain, it's primarily going to come from Solana and Avalanche right now. And it's about 4% of total value locked in in the market right now. So that's the kind of benchmark, the size that that we're looking at. And certainly the layer two ecosystem is probably what like this looks like about seven or eight percent of total value locked. So it's about double the size of alternative layer twos right now. That makes sense?

• 15:36David Hoffman?

  Yeah. And the way I would perceive TVL on chain, on chains is a little bit like potential energy. Just having TVL on chain doesn't actually natively produce any economic activity. Like you can just hold, you know, all your stables on Arbitrum and not do anything with it. And you actually won't make Arbitrum any money because you won't be spending any gas fees. But having TVL opens up doors for reasons to have economic activity. So it's not a perfect one to one. It's a correlation, not a causation. But just if you have a bunch of TVL, you have a bunch of opportunities for economic activity. And so that's, there's like a loose coupling.

• 16:14Ryan Sean Adams?

  Yeah, for sure. It's a gameable metric. It's a metric you can't fully rely on when the native token goes up. Like it's going to spike in terms of TVL, right? We've saw that with Solana.

• 16:23David Hoffman?

  Are we counting native tokens in TVL here?

• 16:25Ryan Sean Adams?

  Oh, yeah.

• 16:25David Hoffman?

  I don't think we are.

• 16:26Ryan Sean Adams?

  Oh, heck, yeah, we are. Yep.

• 16:27David Hoffman?

  Oh, okay.

• 16:28Ryan Sean Adams?

  It's, it's all like total value locked on these chains.

• 16:31David Hoffman?

  Okay.

• 16:32Ryan Sean Adams?

  Like sole token goes up, you're going to get a massive increase in total.

• 16:36David Hoffman?

  Well, that makes sense. That makes sense for the native asset of a layer one on a layer one. Does, but like if OP goes up and there's OP on optimism, I guess TVL, I guess, yeah. TVL optimism goes up. Okay, sure.

• 16:49Ryan Sean Adams?

  All right. So that's kind of the baseline setting of, you know, state of the L2s from a metrics perspective. So the big question that we're trying to answer here is, are L2 tokens going to go up in price? Or are they just worthless governance tokens? This was the question posed in the, in the bankless discord that I mentioned earlier. And I want to give you some takes here, David, and see how much you kind of agree. And maybe we'll take this in pieces here. But just to set the stage, I do have a bias, I would say. Okay. And like everyone, hopefully, if you're an investor in the space, you're not just being whipped around by the winds of like, whatever the most popular narrative is. Hopefully you have a bias, AKA a thesis. Like you have some sort of conviction.

• 17:32David Hoffman?

  Concept for understanding the world.

• 17:34Ryan Sean Adams?

  Yeah. And so my biases, let's call them, are one, long-term time horizons, right? So I'm not a narrative trader. I'm talking when I, in the context of this, two to seven year intervals. Okay, this is different. If you're doing narratives, you're doing like three to 12 month time horizons. So for the listeners. This may not be your time horizon. You want to do narrative, there's a different play. What I'm saying probably is just like not relevant to you because I, you know, it's a different time horizon. The second thing I would say is I weigh something called fundamentals highly in my investment. And I don't want to like, sound, um, hmm, how do I put this? I have a specific, yeah, high and mighty. Oh, I, I. Cool here than now. Fundamentals. What do you?

• 18:18Ryan Sean Adams?

  My investment thesis is fundamentals. Yeah, okay, because there's holes with the idea of fundamentals, right? So I have a specific.

• 18:24Ryan Sean Adams?

  Your fundamentals are not everyone else's fundamentals. Exactly. And fundamentals are just like a consensus technology at the end of the day and right? So what I'm trying to do is get everyone else to agree to my fundamentals. My, my fundamentals are better than your fundamentals. Yeah, exactly. But mine are better, David. No. That's why, that's why we talk about them. My specific definition of fundamentals is for chains that sell blocks, right? This would be an alternative layer one or a layer two. Uh, a long-term profitability, that's the fundamental I look, which we just talked about what that means. It's the revenue that the chain brings in by selling blocks less its costs, which are the amount that it pays for, for gas to the parent chain or the amount that it issues. Like, remember, alternative layer ones, they have to pay for their security.

• 19:07Ryan Sean Adams?

  They don't pay Ethereum for their security. So what do they do? They issue block rewards. They issue new supply of their token to pay for that security. Okay? That to me is the most ungameable metric. Profitability is the most ungameable metric for proof of value creation for a chain. All right. Now, this may not be. Money flows from elsewhere into your vault and you can measure that, that is fundamentals. I mean, this is kind of how equities like are valued, right? It's like, I, you know, of course, there's. Cash flows and perceived growth ratios. Discounted cash flows over time, right? That is at least some utility value consensus that the market kind of believes, right?

• 19:47Ryan Sean Adams?

  So, but this may not be the way the market decides to value blockchains anytime in the near future. Or even in the fullness of time. I don't know. Maybe there's some other fundamental that becomes more important, right? Maybe active addresses become kind of the, the metric or something else becomes more important. So I'm looking at this from a P and L perspective. So caveats aside, my take on, um, L2s is that they are positioned.

• 20:14Ryan Sean Adams?

  Incredibly well for their tokens to accrue value. All right, so are L2 tokens bullish? Are they going to go up in price? My take is, when I look at this, yes. All right, and here's why. Three reasons for this. One, and this is probably the most important. David, they have 100x more advantage in the block space profit game because they don't have to pay for their security through issuance of the base token. All right.

• 20:40David Hoffman?

  It is a cheat code.

• 20:42Ryan Sean Adams?

  They're just value-added resellers, right? Instead of like

• 20:45David Hoffman?

  Ethereum's doing the hard work.

• 20:47Ryan Sean Adams?

  Instead of bootstrapping their own military and, you know, court service and police force and all of these things.

• 20:52David Hoffman?

  Right, Ryan means security and smart contracts and ecosystem.

• 20:57Ryan Sean Adams?

  Exactly. They just take all of that and then they resell it. And they could resell both Layer 1 block space and data availability block space. So they could go take Celestia and resell it. They could go take Ethereum and resell it.

• 21:09David Hoffman?

  Which LiveR just started doing.

• 21:11Ryan Sean Adams?

  Yeah, they could go take EigenDA and resell it. And that's what they're doing. And so they're always going to be more profitable than somebody who is issuing their native totally. Just look at the P&Ls. Just look at costs. So they have an advantage there that I think is hard to compete with. Now, this is a caveat, and this is where the kind of the second comes in, right? It is dependent on their ability to attract users and capital to their execution environments. So if they get outplayed by an alternative Layer 1 or some Layer 1 that is better able to capture users and capital, okay?

• 21:42David Hoffman?

  Mindshare, adoption, trust, brand.

• 21:45Ryan Sean Adams?

  It won't matter. An L2 zombie chain is just still a zombie chain and it's not producing revenue or profits. And if an alternative Layer 1 is able to kind of capture that value, then they will. Now, I would just say, what have we just seen? I mean, we looked at the numbers. We've seen traction for Arbitrum, for OP, for Polygon, for Base, for ZK Sync. And they have shown that their rates of accruing users and traction are even exceeding their L1 competitors. So I don't think you can say alternative Layer Ones are just going to attract users and capital at a far faster rate. I think that's already been disproven at this point in the market. Like, nah, L2s got game.

• 22:26David Hoffman?

  You're saying it's being disproven as in it's the only strategy that can do that? It is. It's still, it's still happening.

• 22:32Ryan Sean Adams?

  It's still in the mix, for sure. And there's still competitive risk.

• 22:35David Hoffman?

  So for people who are valuing Layer Ones who are negative in economics, as in they're issuing more tokens than they are accruing in fees, the market is assigning a growth premium, a PE ratio for Layer Ones who are like operating at a loss in order to incentivize growth, which is a tried and true strategy that we've seen for decades. And so, yeah, this, and people generally, I would say, ascribe high PE ratios to Layer Ones.

• 23:02Ryan Sean Adams?

  Exactly. And so I'm just making the case that L2s are not positioned to be valueless governance tokens. Not necessarily that they will exceed alternative Layer Ones, but you can see that they're doing a lot in terms of traction. The last piece on this kind of worthless governance stakes is I am not bearish on governance tokens. Okay? So if you think about equities, David, what are equities? Governance tokens with cash flows.

• 23:29David Hoffman?

  Governance certificates with raw pieces of paper.

• 23:31Ryan Sean Adams?

  Exactly. But they have some sort of legal guarantee to cash flows. So long as the governance token has a code-based guarantee eventually to cash flows, to me, that is a value accruing device. Okay? We'll contrast this with something like the uni token right now, does not have a fee switch. There are transaction fees and value accrual mechanisms that can happen outside of the protocol. It is closer to like a worthless governance token, although I do think the fee switch will be turned on. I think for, for Layer 2s, it's going to be much closer to Layer Ones in that you have a sequencer which accrues all of the profit, basically.

• 24:16Ryan Sean Adams?

  That profit is just going to be passed on in the form of staking, let's say, or in the form of like a work utility token. This is what Matic is moving towards for PoL. And I think we see other chains kind of moving to this type of model to essentially enable the token holder to participate in that on-chain cash flow. So it's a governance token with cash flows. I think that's what we're seeing emerging here. And that's why I would say it's different. So what's your, what's your, or that's, that's why I would say L2 tokens are actually bullish as long as they continue to have this, these positive revenues, new user base, you know, usage. And that number goes up, then I see the token accruing value. What's your take on that?

• 25:01David Hoffman?

  Yeah, you said L2 tokens are governance tokens with cash flows. I would just amend that just a slight, in a slight way, just to L2 tokens are governance tokens over cash flows. That's the thing that they govern over.

• 25:15Ryan Sean Adams?

  That's right.

• 25:15David Hoffman?

  And so like the base case is what I would say Arbitrum currently is, which is you can go look at the smart contracts of Arbitrum and you can see Ether flowing into the Arbitrum sequencer vault, which is governed by the Arbitrum DAO. And so if you are an arb token holder, you have some amount of say over where that money goes. And I think it's really the next phase of the value capture conversation is like, well, it's up to governance to apply that capital in value added ways in the most, in the highest ROI possible. And so sitting in the treasury is one thing, but you know, let's take Amazon, for example. What did Amazon do with its money?

• 25:58David Hoffman?

  It just sent it right back into the company. It incentivized growth, which was a good strategy. Is that Arbitrum's strategy? I don't know. Arbitrum governance will have to determine what is the best way to incentivize growth using the capital that it's receiving. But the thing is, is like Arbitrum is cash flow positive. And so now it's kind of up to Arbitrum treasury management and just like DAO governance, which is, you know, what crypto is, to apply that capital in a way that grows is accretive to Arbitrum even more. And we're so early into crypto. What is it 20, it's 2024. Arbitrum is how many years old? Five, actually, wow, five years. In the grand scheme of things. We're at the very beginning of these things.

• 26:42David Hoffman?

  Uh, and so we still have, um, I don't know, 98% of the world left to capture, 99% of the world left to capture and get on chain. Uh, and so these treasuries, these positive treasuries that are, uh, being accrued by layer twos, need to go to capture the remaining 99% of people that are not on chain yet.

• 27:00Ryan Sean Adams?

  I mean, when it's in treasury, uh, you can, uh, distribute it by, by almost like a dividend to those who are staking those token holders. So this is kind of, I think the, the convergence of this is we will have a kind of a network type equity or an internet type equity that returns funds to the holders of these tokens in the same way that like equities in, uh, you know, traditional capital markets are a right for governance over cash flows. Uh, and so like, that's similar to me. And the last thing is listeners might say, well, but like, none of that matters right now. Like P and Ls don't matter. No one's actually looking at it like this. Here's a reason I think people might start to listen, like, look at it like this.

• 27:42Ryan Sean Adams?

  Blocks based fees, David, they're going to commoditize and collapse to zero. That, that is my belief.

• 27:47David Hoffman?

  Layer two fees are going to zero.

• 27:49Ryan Sean Adams?

  Yes, for all chains, except master settlement chains like Ethereum, okay? Cause Ethereum is doing a different service. It is providing settlement. It's taking its block space and it's selling it to a whole bunch of chains. But the chains themselves, right? The rollups, the layer twos themselves, their fees will collapse to zero. You just see it right now. Look at the DA layers. We were just talking about Live.

• 28:10David Hoffman?

  They're just at the very beginning of the DA wars.

• 28:13Ryan Sean Adams?

  It's getting, it was like, what? 99% cheaper or 90% cheaper?

• 28:17David Hoffman?

  95% cheaper. Yeah.

• 28:18Ryan Sean Adams?

  And then Eigenlayer DA comes in, that's going to make it another like, you know, 90% cheaper. Uh, again, we've got paralyzed VMs, which are going to increase our transaction throughput. We've got massive advances in compression. Vitalik has talked about this. We've got ZK Tech. The bottom line is I think block space, execution layer block space is going to turn into a complete commodity product. And so if you're an L1 and you're trying to generate profitable block space in this environment, or you're trying to differentiate yourself on low fees, I don't think. That's going to be a differentiator for you anymore, right? And it's like, it is true that block ordering MEV can be a source of revenue. And I think that that could be a source of revenue in the future for alternative layer ones.

• 29:01Ryan Sean Adams?

  But it is also a source of revenue for layer twos. And if you have too much MEV extraction and block ordering, users are going to leave your chain. They don't want the slippage cost. They don't want the sandwich attacks. They're going to go to somewhere where they don't have those types of hidden, let's call them transaction fees. So that is like the last point I would say on how this I see this game evolving from a blockchain commodity perspective.

• 29:25David Hoffman?

  I think everything we've talked about, Ryan, is the bottom of the pyramid, if you will, the fundamental foundation that all value, future value capture of layer two stands upon. The law, the reason why these layer twos work at all over the longest amount of terms is what we've talked about so far in this episode. I call that the bottom of the pyramid because then there's another layer of why will tokens go up? Which is a more of a medium, short term narrative trade. The narrative, right? So the reasons why people are going to buy these tokens now in the

• 29:59Ryan Sean Adams?

  This cycle in 2024.

• 30:01David Hoffman?

  The short term amnesia that crypto has when it's a bull market. And so I think there's plenty of reasons, which are valid reasons, by the way, like brand is one of these reasons. And so I want to talk about that middle section, the narrative trade. I'm not, I'm not a trader. You're not a trader. I don't look at charts. So that's not what we're going to talk about, but I want to talk about like kind of the next shorter term phase of like what happens when you have fundamentals. So we're going to talk about that as soon as we talk to some of these fantastic sponsors that make their show possible like Mantle, which is a layer two, which is what we've been talking about all today. But it's also a layer two with a liquid stake token ME. So you can stake your ETH with Mantle. You can also use the Mantle layer two. Let's go here for Mantle right now. Mantle, formerly known as BitDow, is the first DAO-led Web3 ecosystem, all built on top of Mantle's first core product, the Mantle Network.

• 30:46David Hoffman?

  A brand new, high-performance Ethereum layer two built using the OP stack, but uses Eigenlayer's data availability solution instead of the expensive Ethereum layer one. Not only does this reduce Mantle Network's gas fees by 80%, but it also reduces gas fee volatility. Creating a more stable foundation for Mantle's applications. The Mantle Treasury is one of the biggest DAO-owned treasuries, which is seeding an ecosystem of projects from all around the Web3 space for Mantle. Mantle already has sub-communities from around Web3 on-boarded, like Game7 for Web3 gaming and Bybit for TVL and liquidity and on-ramps. So if you want to build on the Mantle network, Mantle is offering a grants program that provides milestone-based funding to promising projects that help expand, secure, and decentralize Mantle. If you want to get started working with the first DAO-led Layer 2 ecosystem,

• 31:31David Hoffman?

  check out Mantle at mantle.xyz and follow them on Twitter at @zeroxmantle. Cello is the mobile-first, EVM-compatible, carbon-negative blockchain built for the real world. And now, something big is happening. Introducing the Cello Layer 2. It's a game-changing proposal that's going to bring Cello's rapidly-growing ecosystem home to Ethereum. Vitalik has shared his excitement for the Cello Layer 2 on the Cello forum, so has Ben Jones from Optimism. But why? The Cello Layer 2 will bring huge advantages, like a decentralized sequencer, off-chain data availability, and one-block finality. What does all that mean? Rock-solid security, a trustless bridge to Ethereum, and more real-world use cases for Ethereum without compromise. And real-world adoption is happening. Active addresses on Cello have grown over 500% in the last six months. With the Cello Layer 2, gas fees will stay low,

• 32:16David Hoffman?

  and you can even pay for gas using ERC20 tokens. But Cello is a community-governed protocol. This means that Cello needs you to weigh in and make your voice heard. Join the conversation in the Cello forum. Follow @celloorg on Twitter and visit cello.org to shape the future of Ethereum. Ryan, we talked about in the first half of the episode for a little bit, PE ratios, growth metrics, growth multipliers that I think the market perceives upon many chains, Layer 1s, Layer 2s.

• 32:45Ryan Sean Adams?

  PE is interesting, right? You call that a growth metric? That is basically the amount that investor is paying for, like, future growth. That's kind of like a metric, because it's price that you're paying over earnings, which is profit in the future. And that can be applied to Layer 2s.

• 32:58David Hoffman?

  Right, so it is a perceived metric. So like, what is the premium that the market is paying for a particular asset? And if it's a high premium, it's implied that there's a lot of growth baked into these things. And so for Layer 1s that are negative economics, as in they're issuing more than they're capturing in fees, technically, they have like infinite PE ratios. As soon as it turns positive, then PE actually turns into a number. But the idea is like, there's a premium here. And different, I think, all different assets that have cash flows will all have this PE ratio. What factors impact a Layer 2 tokens or Layer 1 token PE ratio? I think one of the big ones is brand.

• 33:38David Hoffman?

  And I think the very high PE ratio that Solana has currently comes from the brand of Solana, which is growing in strength, growing in mindshare. The universal composability idea is in being incepted into people's heads. And so people are paying a very high premium for Solana because they think that Solana has a lot of growth potential. So it has a very high PE ratio. Optimism, for example, I think has the brand of A, the OP stack, which has been forked, like 100 times now. And we'll talk about actually the OP collective fee that the OP collective charges OP stack chains that are a part of the superchain.

• 34:21David Hoffman?

  But really, I would say the forking of the OP stack and the adoption of the OP stack by companies as large as Coinbase, which is a huge vote of confidence, is a huge plus one to the brand of optimism, to the trust of optimism. And humans place a lot of value on trust. And so there's this, there's a narrative that like, oh, well, if Coinbase has selected the OP stack to spawn the base chain, a Fortune 500 company that's public, then they are leading the way for other large companies to also use the OP stack. And that is a narrative that could, over time, morph into fundamentals if it comes true. But these are, these are kind of the mindshare metrics, brand and awareness conversations

• 35:04David Hoffman?

  that I think people will be paying attention to as the bull market continues and the price of attention, the value of attention is like at 100x premium in a bull market. I think these are kind of some of the things to pay attention to in the short term speculative nature of the bull market. What say you about this?

• 35:21Ryan Sean Adams?

  Yeah, I think there's tons of narratives to kind of latch on to if you want to do sort of that, that shorter time horizon type of trade, right? Including like what, like what happens if BlackRock launches like a sidechain that, you know, like for tokenizing world.

• 35:35David Hoffman?

  OP stack based tied inside chain, right?

• 35:37Ryan Sean Adams?

  Sure. Starts as a sidechain on the path to.

• 35:39David Hoffman?

  They would never join the collective though.

• 35:41Ryan Sean Adams?

  Right? You know, maybe they would. You like, who knows what could happen? I've, I've been constantly surprised, but I mean, that, that type of thing can happen. I also think layer twos are in general, kind of having a, a renaissance from a narrative perspective, because people have watched an alternative layer one run up and they're like, well, layer twos are looking pretty good now from a valuation perspective. I mean, just look at this, David. Um, this is, let's go to CoinGecko, actually. And let's see what the valuations are. I'm going to turn, this is fully diluted valuation, right? So

• 36:12David Hoffman?

  Can you go to Arbitrum?

• 36:14Ryan Sean Adams?

  So Arbitrum is here, 21 billion for Arbitrum.

• 36:19David Hoffman?

  And Arbitrum recently reached all time highs. This is not my analysis, but it makes sense to me is like traders have started to purchase Arbitrum on the hype of proto Danksharding, EIP 4844 that is coming in March.

• 36:34Ryan Sean Adams?

  I think that's a plausible narrative, for sure.

• 36:36David Hoffman?

  And I think this is totally plausible narrative. Anytime I find myself like aligned with traders, I'm like, huh, weird.

• 36:44David Hoffman?

  But like, yeah, this is one of the things that happens. Like they are, traders have decided that there is a shelling point around the growth of a narrative about the growth of a, of a fundamentals. And so sometimes like the pyramid of the traders on top, the narrative layer in the middle and the foundation fundamentals at the bottom, like align in stars. And I always think that's like a funny time in crypto and like everyone's like lined up.

• 37:04Ryan Sean Adams?

  Well, that's nice. Yeah. It's nice when your fundamentals.

• 37:06David Hoffman?

  It's very fleeting. It doesn't stay for very long. That's already in the rearview mirror.

• 37:10Ryan Sean Adams?

  Yeah. It lasts a few weeks and then you get sad again. At least that's my experience. But, um, okay. So Arbitrum is the number one highest value layer two right now at 21 billion. Uh, next to that would be

• 37:20David Hoffman?

  Fully diluted value, yes.

• 37:21Ryan Sean Adams?

  Yeah. Uh, next to that would be optimism, 15 billion. Uh, they have a ton of tokens that are locked up, right? And so that's why market cap is so different than fully diluted valuation, because fully diluted is like the full market cap that, um,

• 37:34David Hoffman?

  All tokens that exist, yeah.

• 37:36Ryan Sean Adams?

  Yeah. And so, and like, those are the top two. And notice that they are, um, well, where's Matic on this list? They, they should definitely make a presence. Here it is. Matic

• 37:46David Hoffman?

  Matic hasn't pumped yet.

• 37:48Ryan Sean Adams?

  Billion.

• 37:49David Hoffman?

  Yeah.

• 37:49Ryan Sean Adams?

  8.4 billion.

• 37:50David Hoffman?

  Matic's been lagging behind.

• 37:52Ryan Sean Adams?

  So it's less than half.

• 37:56Ryan Sean Adams?

  Arbitrum and also look at Solana, 55 billion. So it takes two arbitrums to make a Solana, right? Which is interesting, just how the market is valuing all of this at this point in time. And so to, I could zoom out to say, I do think that there are some narratives that might shift this a little bit and there could be an L2 season renaissance. And I'm not sure exactly what those like narratives might lead to that. That's someone else's specialty, but blockchain sharding could, like base using a layer two, more traction in general for these layer twos, or just price pumps can just cause narratives to be told for why the price is pumping, right? And that prices don't need a reason to pump. Sometimes they just do.

• 38:39Ryan Sean Adams?

  It's just time for that specific asset or token. Well, one thing though, I want to say, David, is, and I want to actually now give the case to you for why I think alternative layer ones could be more bullish than it first appears under this thesis, right? So, okay, so this is still within the bounds of the framework and I want to give you a bull case for alternative layer ones.

• 39:05David Hoffman?

  Okay.

• 39:05Ryan Sean Adams?

  So so far we've said, from a fundamentals perspective, profitability of block space is the thing that matters, right?

• 39:13David Hoffman?

  In our armchairs.

• 39:14Ryan Sean Adams?

  Okay, so

• 39:17Ryan Sean Adams?

  layer ones, alternative layer ones, like Solana and Avalanche, remember, they always have the ability to become layer twos if they want, okay? So, look, I don't know all of the like technical engineering behind this, but we, we know, we've already seen Wasello Network, which was an alternative layer one, now starting to use Ethereum for settlement.

• 39:41David Hoffman?

  Right, it's not a large technical lift to be, switch from being a layer one to a layer two. All you do is post data elsewhere.

• 39:49Ryan Sean Adams?

  Yes, and so here's what that means. It means every alternative layer one already has an option. The fact that Ethereum exists, they have an option to become a layer two at any point in time, if they choose to exercise that option. And they will choose to exercise that option game theoretically, if it will increase the value of their token and their ecosystem, but they can pull out that option.

• 40:12David Hoffman?

  Being Amazon and want to start being Apple, you mean? Like, once they are done growing and they are trying to then turn into profit?

• 40:20Ryan Sean Adams?

  Yes. So, you know, Amazon, the story famously Bezos was like, hey, I'm not going to return any profit. We're going to lose money every year. We're going to make fantastic revenue, but we're going to lose money. And all the shareholders who said, but profitability Bezos is not even profitable.

• 40:33David Hoffman?

  What are you doing? You're driving this, this, this chain into the ground.

• 40:37Ryan Sean Adams?

  Yeah, they left. They left. All of those kind of whiners left. And what he had was-

• 40:41David Hoffman?

  And Bezos was probably like, sick, get out of here.

• 40:44Ryan Sean Adams?

  Yeah. Cause what he had was a whole bunch of people who were along the ride for unprofitable block space. Okay. And so like, here's a way Solana could win, for instance, right? If something like Solana, if their, their model is just grow and grow and grow.

• 41:00David Hoffman?

  Capture, mindshare, capture users.

• 41:02Ryan Sean Adams?

  Just like, we're just going to acquire users. I don't care about profitability.

• 41:06David Hoffman?

  We're going to penetrate the market.

• 41:07Ryan Sean Adams?

  Yeah. Just acquire users, acquire apps, get network effects, dilute soleholders along the way. Soleholders won't care because number's going up in the interim. It's a bull market. Everything's going up. And then when it becomes an issue, like when the market starts to say, huh, you really need to solve that issuance problem. Because soleholders are getting diluted who aren't staking.

• 41:27David Hoffman?

  Well, then they just- Solana has succeeded so well that they've captured two thirds of the internet. And there's no longer that many more people to capture. And all of a sudden they're like, oh, we've, we've won, we've captured the, the users. Let's become profitable.

• 41:42Ryan Sean Adams?

  And we're saying Solana because that's had the, like a big run for the last six months, but it could be Monad. It could be Sui. It could, like, it could be any of these avalanche. Who knows? It could be any alternative layer one. Well, then all they have to do is, oh, it's about, the game is now profitable block space. Okay. Hey, yo, we're a layer two now. We're just going to settle on Ethereum. And they no longer have to issue their token. So from that perspective-

• 42:06David Hoffman?

  That's what's always so genius about the Ethereum like fundamental model. It's just like, yeah, fees, bro. High fees.

• 42:13Ryan Sean Adams?

  Yeah. Well, like, I do think that, so, okay, this is, you know, like the Ethereum fundamental kits. It seems likely that Ethereum will win in any case. Now, you're like, Solana and alternative layer one may decide to play the settlement chain game too. They could start to launch, they could try to compete as a money. Okay? The last chain to compete with ETH as a money, do you know what that chain was, David?

• 42:36David Hoffman?

  Uh.

• 42:38Ryan Sean Adams?

  Terra Luna.

• 42:39David Hoffman?

  Oh.

• 42:40Ryan Sean Adams?

  That, that was the last chain to actually try to compete with ETH and Bitcoin as money. Okay. So a chain could do that-

• 42:46David Hoffman?

  And look what happened.

• 42:49Ryan Sean Adams?

  A chain could do that, be a settlement layer, compete with ETH's money. Or it always has the option to pivot into profitable block space by starting to use Ethereum as a settlement chain. So that's actually-

• 43:01David Hoffman?

  In my opinion, if your chain wants to be money, you must also be a settlement layer for other chains.

• 43:08Ryan Sean Adams?

  I think that's going to be true. I also think that's going to be true. That feels like a core kind of like thesis.

• 43:14David Hoffman?

  First principles, ground up, doesn't even have to say the words Ethereum. If your chain is money, other chains settle to your chain.

• 43:22Ryan Sean Adams?

  But do you see how like, under this lens, you can actually start to be like, okay, the value of Solana or Avalanche at 55 billion for Solana? All right, that's definitely assuming that it outcompetes a whole bunch of the layer twos and becomes like a dominant player, an execution layer. But like, the block space P and L thing, it doesn't matter because Solana still preserves the option to always switch and start settling on Ethereum. So it may as well recycle all of the so-called profits and goodwill and brand narrative and all of these things back into growing the chain. And if it can marshal that capital to acquire users, apps and network effects, then it has a path to winning.

• 44:04Ryan Sean Adams?

  And maybe outcompeting all of these layer twos that kind of quote unquote, "did it the right way."

• 44:09David Hoffman?

  Right, right, right.

• 44:10Ryan Sean Adams?

  What do you think about that?

• 44:12David Hoffman?

  I think that is a crazy scientist theory that I'm totally on board with.

• 44:16Ryan Sean Adams?

  Yeah, anyway, I think probably I've missed that sort of component of this for a while. And I think a lot of fundamentals analysts, like, or ETH maximus, have maybe missed that vantage point. But like, it very much could be the case, so.

• 44:33David Hoffman?

  I'm on board. I'm super on board.

• 44:36Ryan Sean Adams?

  That's what I got, man. Anything else? So where do we summarize all of this, right? So we've got L2 tokens out there, and the question was posed, where are they worthless governance coins? I don't think they are. It seems like- Yeah. How would you summarize all of this?

• 44:55David Hoffman?

  Yeah, maybe before I summarize all of this, I'll say a little bit more about the Layer 2 upside case. I think we've presented the vanilla Layer 2 upside case, the case that is true for all Layer 2 tokens. But I think in addition to that, every single Layer 2 token will also adapt a more specific strategy. The Optimism Collective's strategy is to spawn the superchain, create a shared standard for what it means to be a part of the superchain, create some sort of ecosystem benefits, a union for why you join the superchain, and then being a part of the superchain requires a 15% of your sequencer fees to the Optimism Collective. That's the optimism upside case. The Polygon upside case is different.

• 45:38David Hoffman?

  They have the work token medallion model about the interoperability chain that they have, in addition to other mechanisms as well, which is completely different from the optimism upside case. Arbitrum Orbits, I think, still has some fleshing out to do with its upside case, but it has a similar 10% fee to join the collective type of model. Starknet has gas fees paid in the Stark token. And that's a ZK EVM, or not a ZK EVM, it's Kyro-based, but it's a ZK chain, a Stark chain. And what is the upside model for that? It is a different flavor. And so in addition to just like the value-added reseller case, which is true for all chains, there's also more specific, chain-specific strategies, businesses,

• 46:23David Hoffman?

  for what they are actually doing and why they're capturing value. So each one will kind of develop its own way of navigating the world, right? And it's this own business model. Mantle, for example, has M-Eth. Because the Mantle treasury is just absolutely massive, and so they made their own liquid staking token. They're probably also going to do a liquid re-staking token, calling it. Why wouldn't you? That's a mantle strategy. And so in addition to just the fundamental case that we laid out in this episode, each layer two has the opportunity to kind of make their own additional way of capturing value.

• 46:56Ryan Sean Adams?

  Yeah, I think that's what's so exciting about this space right now is all of this is emerging. And maybe the place I'll leave us is kind of the opening for another set of questions that are questions in my mind for 2024. And I know they're in your mind as well, which is, okay, now we have kind of this new block space thing that we've created. In fact, I would say that's like, that's the core innovation that crypto has created is a trustless censorship resistance block space. What can you do with block space? Banking system, you could do sound money, you could do store of value, you could do property rights online, all of these things, right? You can do all of these things with this commodity that we've created called block space.

• 47:34Ryan Sean Adams?

  Now, we have separated out the block space supply chain in kind of three different levels of like value accruing tokens, if you will. There's the consensus settlement layer, right? Which like Ethereum is trying to dominate very much. And the case for like ether or some asset as a money or as an internet bond, right? There's that layer. And then there's the data availability layer, which Ethereum is also a player. It's trying to sell its block space as a DA provider, but then you also have Celestia in there and you have Eigen layer DA, which takes its cut. And then there's a veil from formerly Polygon founders, like taking its cut. Near is competing for the DA layer.

• 48:16Ryan Sean Adams?

  And then you have the execution layer, which is where the majority of these layer twos are really competing. That's where users come, that's where states are, that's where you can create like super chains, that's where it's an app acquisition game. Solana is playing full stack, but also very much on the execution layer side.

• 48:33David Hoffman?

  Emphasis on the execution layer, yeah.

• 48:34Ryan Sean Adams?

  100% execution. And so the question there is now, in my mind, and I think a major topic for 2024 is, okay, where's the value going to accrue? And the answer is all three, okay? All three are going to accrue some value, but are we going to get more fat protocol? Are we going to get more value accrual at the bottom of this pyramid? Or is it going to be an upside down pyramid? That's what some people think, where like value accrual is actually tiny at the settlement layer, and it's like bigger at the DA layer and even bigger at the execution layer. And that, in my mind, is the major fundamental question for this asset class as we move into this year.

• 49:10David Hoffman?

  Has always been. The big question.

• 49:13Ryan Sean Adams?

  Probably has.

• 49:14David Hoffman?

  One of the questions that we started Bankless to try and answer. And it is four years later and

• 49:20Ryan Sean Adams?

  Still asking.

• 49:21David Hoffman?

  The question is better defined, but the answer is still just as opaque.

• 49:25Ryan Sean Adams?

  Yeah, well, now the question has three parts to it, right? We have three different components. So Bankless Nation, we're going to be exploring this this year. And thanks for hanging with us on the Bankless Takes. We should mention.

• 49:37David Hoffman?

  A couple of hot episodes that are coming down the pipeline on this. John Charbonneau and Neil Somani from Eclipse doing an episode titled, Is DA A Good Business Model? So we're attacking one of those points on the triangle head on, followed by an episode co-hosted by John Charbonneau, replacing you, Ryan, bye,

• 49:59David Hoffman?

  with Sri Ram from Eigenlayer and Nick White from Celestia, comparing the differences between EigenDA and Celestia as a DA construction layer. So we're doing some exploring.

• 50:11Ryan Sean Adams?

  Ooh, let's go figure it out. It's as always, Bankless, we're trying to bring you guys to the frontier. Should disclose before we end this episode. We're investors in a whole bunch of the L2s and other tokens that we mentioned today. We also hold some ETH. As you'll know, you can access all of our disclosures, bankless.com/disclosures. And got to end with this. We have no idea what prices will do in the short run. Crypto is just generally risky. You could lose what you put in, but we are headed west. This is the frontier, not for everybody, but we're glad you're with us on the Bankless journey. Thanks a lot.