ROLLUP: $EIGEN Token Launch | CZ Going to Jail | Stripe Crypto Support | Market Bottom In?

Bankless Friday Weekly Rollup First Week Of May ------ 📣 TRANSPORTER - SECURED BY CHAINLINK CCIP | TRY IT OUT https://www.transporter.io ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2 ⁠ 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle 🌐 CARTESI | APPLY FOR A GRANT https://bankless.cc/CartesiGovernance 🔗CELO | CEL2 COMING SOON https://bankless.cc/Celo 🏠 CASA | SECURE YOUR GENERATIONAL WEALTH https://bankless.cc/Casa 🗣️TOKU | CRYPTO EMPLOYMENT SOLUTION https://bankless.cc/toku ⚖️ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum https://%E2%81%A0https//bankless.cc/Arbitrum ------ TIMESTAMPS & RESOURCES 00:00:00 Start 00:01:04 David's Eye Update https://x.com/TrustlessState/status/1783846598813814785 00:05:52 Markets https://pro.kraken.com/app/trade/btc-usd https://pro.kraken.com/app/trade/eth-usd https://twitter.com/nicrypto/status/1785607112682246286 00:11:17 BTC Miners Struggling https://twitter.com/RhoRider/status/1784720608691159410 00:13:55 BTC to $3.8 Million? https://twitter.com/DeItaone/status/1785695402819207296 00:18:52 Solana Season Over? https://x.com/0xGumshoe/status/1784240017017069849 00:25:31 The $EIGEN StakeDrop https://twitter.com/eigenfoundation/status/1785000124646572108 00:30:31 The 2 Token Model https://imgur.com/YE7PBL3 00:34:36 Distribution Details https://imgur.com/y7BEqUu 00:39:29 Locked Tokens https://x.com/TrustlessState/status/1785729436895084571 00:47:33 Eigen Team Perspective https://twitter.com/jchervinsky/status/1785373696862924997 00:56:51 Industrial Airdrop Farmers https://twitter.com/Takuiten/status/1785220889161998635 01:01:05 CZ Sentenced to Jail https://x.com/BitcoinMagazine/status/1785384669812273570 https://x.com/cz_binance/status/1785465555899822488 https://twitter.com/MikeIppolito_/status/1785388427849961678 01:08:48 Stripe Crypto Support https://x.com/collision/status/1783559623511011535 https://twitter.com/RyanSAdams/status/1783854777622724683 01:10:55 Visa's Onchain Dashboard https://twitter.com/cuysheffield/status/1783471909533106610 01:12:04 USDC overtakes Tether https://visaonchainanalytics.com/transactions https://x.com/paoloardoino/status/1785645617651274040 01:13:42 Tokenizing Treasuries https://www.franklintempleton.com/press-releases/news-room/2024/franklin-templeton-announces-availability-of-peer-to-peer-transfers-for-franklin-onchain-u.s.-government-money-fund 01:14:55 AAVE V4 https://x.com/aave/status/1785749923893223485 01:17:22 Coinbase Integrates Lightning Network https://www.coinbase.com/blog/coinbase-integrates-bitcoins-lightning-network-in-partnership-with 01:17:58 The War on Crypto https://consensys.io/blog/consensys-suing-sec-to-defend-ethereum-ecosystem https://www.ic3.gov/Media/Y2024/PSA240425 https://twitter.com/RyanSAdams/status/1783586883194265820 01:22:12 Square and Cash App Investigated https://x.com/RyanSAdams/status/1785751225062809832 01:22:56 Roger Ver Tax Fraud https://www.justice.gov/opa/pr/early-bitcoin-investor-charged-tax-fraud 01:24:37 Etherscan Bankless Partnership! https://twitter.com/etherscan/status/1785357882181214215 01:25:42 Meme of The Week https://x.com/dabit3/status/1785886486165942380 ------ 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.

• 0:03Ryan Sean Adams?

  Bankless Station, it is the first week of May and it is time for the Bankless Weekly Rollup. David, where should we start this week, huh?

• 0:11David Hoffman?

  Eigenlayer releases their token and everyone's mad. What happened? How did that happen? I thought everyone was stoked about the Eigenlayer airdrop. After that, CZ gets sentenced to jail and you won't believe for how many months he is going to jail for.

• 0:24Ryan Sean Adams?

  Wow.

• 0:24David Hoffman?

  Yeah, there's a specific number that is very related to CZ. After this, Stripe broke up with crypto in 2022, but now it wants to get back together.

• 0:34Ryan Sean Adams?

  We also got some updates on the war on crypto. David, it feels like a full frontal assault these days. We gotta go through what's happening in that war, all the battles that we're facing right now, and some market commentary, because markets are down these days.

• 0:47David Hoffman?

  It's a bad month. April was a bad month.

• 0:49Ryan Sean Adams?

  Yeah, so we gotta figure out, is this the end of the bull run? Or is there like, is there some reason for this? So let's consult the oracles and figure that out.

• 0:57David Hoffman?

  When up, when up.

• 0:57Ryan Sean Adams?

  Yeah, also, a Solana season, is it over? Is it coming back? Hey, before we get in though, I noticed, you know, Bankless listeners that are looking at this on video may have noticed your left eye, no, it's your right eye. It looks a little bruised, looks a little damaged.

• 1:13David Hoffman?

  Yeah.

• 1:14Ryan Sean Adams?

  Yeah, so you sent me a picture, I think this was on Friday, last Friday?

• 1:18David Hoffman?

  It was Thursday evening.

• 1:20Ryan Sean Adams?

  Thursday evening, I knew it was after we recorded the rollup.

• 1:23David Hoffman?

  It was right after the rollup.

• 1:25Ryan Sean Adams?

  This should be like a viewer discretion is advised type segment. So, I mean, like, maybe we should censor some of this out, because dude, that is gruesome. What happened to you?

• 1:34David Hoffman?

  Yeah, so like, right after the weekly rollup, last week I went straight to Muay Thai sparring. And on Thursdays is like the intense sparring, Tuesdays is technical easy sparring, Thursdays is intense sparring. And I went up against this guy who's like 230 Samoan guy, who was like a whole head taller than me. And like, usually when you suss out your sparring partner, you kind of like get a vibe for how good they are and how intense you want to go. This guy did not do that, he just kicked me straight in the face.

• 2:00Ryan Sean Adams?

  This was a kick to the face? How many seconds into your spar did this kick to the face happen?

• 2:04David Hoffman?

  So you do like three rounds of sparring and he kicks me like, he like kicks me a bunch of times. And a bunch of times I had to like stop and be just like collect myself and he like gave me some room. But then like when we went back at it, he was like, just started kicking me again. And then like the third time he kicked me, I was like, oh my god, like I can either ask this guy to like calm down, or I can just like take this and like learn to get beat up. I chose the latter. And then he kicked me in the face and I like had a like a two inch gash, one inch gash, like right above my eye.

• 2:34Ryan Sean Adams?

  Alright, so what's protocol for, so I have not actually got in a fight in my adult years, like it's been, it's been a long time since I've actually like, since I've been in a fight, you know, in the ring or anywhere else. So what's the protocol for this? Does somebody just, oh, I'm sorry, like, do they apologize once they kick you in the face and cause you to bleed?

• 2:52David Hoffman?

  Well, so like I, we started like sparring again and then he was like, oh, your eyeball. And I'm like, what do you mean my eyeball?

• 3:00David Hoffman?

  And then I went to the bathroom to like go to like, you know, I get, I get nosebleeds a lot of the time, which, but that's totally normal. And but then I go back and I see just like an open like flap of skin above my eye. And I'm like, hmm, I think that's bad. So then I went to talk to the people at like the front, the front of the whole like office, the front of the gym. And they were like, you should just glue it. And I'm like, hmm, I'm gonna get a second opinion on that. I'm gonna, I'm gonna go to the hospital and get some stitches.

• 3:25Ryan Sean Adams?

  Wow, so nonchalant, just glue it, huh? Yeah, okay, so the reason we're doing this at the top of the segment, I imagine, is to put fear in the heart of Nick Carter.

• 3:33David Hoffman?

  Nick Carter, that's right.

• 3:34Ryan Sean Adams?

  Cause we are less than 30 days out to the fight, alright?

• 3:38David Hoffman?

  Is Nick Carter getting four stitches from Big Samoan guy? I don't think so.

• 3:42Ryan Sean Adams?

  What's the polymarket? What's the polymarket say?

• 3:44David Hoffman?

  Polymarket's actually pretty even.

• 3:45Ryan Sean Adams?

  Really? Okay, I, cause I'm surprised. I would have expected the picture that you posted of yourself, like bleeding from your eyeball, getting like stitches. I would have expected the markets. A rational market would have swung in your direction. Cause that's hardcore.

• 4:00David Hoffman?

  The current polymarket odds are 45% Nick, 47% me, and then 9% draw. So that's actually pretty, pretty even. I actually know that there are two funds out there, either VC funds, liquid funds, whatever, two actual real funds in crypto with liquid capital deployed into the polymarket between me and Nick Carter.

• 4:20Ryan Sean Adams?

  Wait, VC's are bidding on this?

• 4:22David Hoffman?

  Yeah.

• 4:23Ryan Sean Adams?

  Those are weird.

• 4:24David Hoffman?

  There's only $68,000 in the market in total, so it's just definitely just like not like petty change, but yeah.

• 4:31Ryan Sean Adams?

  Well, I just, I just want to announce, I know you're gonna be busy, so we're gonna do a bankless viewing party on this.

• 4:37David Hoffman?

  Yeah, it's gonna be streamed on the bankless YouTube.

• 4:39Ryan Sean Adams?

  I don't know if I am worthy to be an announcer on, on this. Like, I feel like I need someone who knows. Kickboxing? Or else it'll be a very dry, like, dry analysis. Oh, David got punched. Oh, like, Nick looks tired.

• 4:54David Hoffman?

  Ooh, some kicks.

• 4:57Ryan Sean Adams?

  Anyway, stay tuned for that, Bankless Nation, for, you know, what's going to be the most hype event in crypto of this year.

• 5:04David Hoffman?

  The biggest fight of all time.

• 5:06Ryan Sean Adams?

  Uh, David, our friends over at Transporter got something to say. What's up with Transporter?

• 5:10David Hoffman?

  Transporter, a brand-new bridging app on the scene to bridge between all of the Layer 2s inside of the Ethereum ecosystem. And Transporter, super intuitive UX, it uses Chainlink's CCIP bridge in the background. And you can bridge ETH, Link, USDC, and other assets between all of the locations that you can see on transporter.io. There is a link in the show notes to use the new Transporter bridging app.

• 5:34Ryan Sean Adams?

  David, can you do the History Channel thing? Last time you did this, Blitz, you did this. You did the thing when you described Transporter.

• 5:41David Hoffman?

  Bridging.

• 5:42Ryan Sean Adams?

  That was awesome.

• 5:44David Hoffman?

  I actually had no idea that, for the listeners, somebody caught me in a frame doing the History meme aliens thing.

• 5:50Ryan Sean Adams?

  That's perfect. It's my new meme template. Let's talk about prices.

• 5:53David Hoffman?

  Bitcoin, 64,000 is where we started, down 7.7%. 59,000 is where we are ending. Ether doing something similar, 3150 at the start, down 5.2%. 2990. This month, or last month, the month of April, was the first monthly red candle since September of 2023, which is kind of an insane streak. We had seven green monthly candles in a row from September up until March. And then finally, April broke that combo with the first red candle, monthly red candle, down 15% in April.

• 6:26Ryan Sean Adams?

  Okay, do you know the nerve of some people? They're calling for under 50K Bitcoin at this point.

• 6:32David Hoffman?

  Oh, down another $10,000?

• 6:34Ryan Sean Adams?

  Yeah, there's serious calls for this. Do you have any reason why? Like, what do you think's going on here?

• 6:39David Hoffman?

  Well, first, seven green candles in a row is insane. And so just like, at some point, the party has to stop.

• 6:47Ryan Sean Adams?

  Okay.

• 6:48David Hoffman?

  Uh, we also got jitters from like geopolitical tensions in the Middle East. But also like inflows into the Bitcoin ETFs have also slowed off, slowed down. James Safer, he tweeted out this, that IBIT, the BlackRock Bitcoin ETF, had its first day ever of net outflows. So the Bitcoin ETF, BlackRock's Bitcoin ETF, lost $36.9 million, which is like overall like pennies in the grand scheme of things. But it had literally had a 100% track record of only inflows. But like in final equilibrium, ETFs have both inflows and outflows. And so like Jared, they generally like, you know, balance out. This is the first day we've had an outflow since only having inflows into the BlackRock ETF.

• 7:32Ryan Sean Adams?

  So if I'm reading the Kraken charts, right? And by the way, thanks to Kraken for sponsoring this entire segment. We are back to February prices for March Ethereum, which doesn't sound bad when you say it like this. Are you ready for another explanation of like why down, David?

• 7:48David Hoffman?

  Tell me.

• 7:48Ryan Sean Adams?

  Okay, so here's a seasonality explanation, and it goes like this. This is apparently something they say in TradFi, okay? Sell in May and go away.

• 7:58David Hoffman?

  I've heard this, yeah.

• 7:59Ryan Sean Adams?

  People like to take their summers off. I suppose investors do. And so that's what happens in TradFi markets, I guess. You know, like traditionally, markets are down during May, June, July, August, you know, the summer months. And then we come back, we come back like toward, toward the fall. If you map this same principle to crypto, actually, look at this. Buying Bitcoin in October and selling in April had a 1500% cumulative return. That's over the past five years. However, if you buy in May and you sell in September, you're down 29%. It looks like crypto likes to take the summer off. Look at this chart, man.

• 8:37Ryan Sean Adams?

  This is, you know, if you just skip the summer and you sell in May, the nice like green line here and the other is if you're buying in April and you know, like you just you're just kind of like

• 8:49David Hoffman?

  Weird. So it's aggregating seasons across years.

• 8:52Ryan Sean Adams?

  Yeah.

• 8:53David Hoffman?

  That seems weird. That doesn't, I'm not sure how I feel about that, but I'm not going to argue with the data.

• 8:58Ryan Sean Adams?

  I mean, how can you argue with it with the data? I mean, like, do you take it easier during the summer in crypto? Do you have like, you know?

• 9:04David Hoffman?

  No, bro. I am always on.

• 9:06Ryan Sean Adams?

  You're always on? Well, then for you, for you, it's a fantastic buying opportunity, I suppose, in the summer. But what this could mean, if we're in the sell in May regime, then it means that prices won't bounce back immediately. We got to get through kind of a slumpy summer. And you're, you're, you're right about those Bitcoin ETFs. Like, just to put an aggregated perspective on this, there's been a steady outflow of ETFs in the US. The past five days have seen

• 9:30David Hoffman?

  Net outflows.

• 9:31Ryan Sean Adams?

  Net outflows of 632 million. So it's not just BlackRock's ETF. It's all of them that are bleeding. But I guess you'd expect this, right? We built a pipe.

• 9:41David Hoffman?

  Right.

• 9:41Ryan Sean Adams?

  So that means capital can come in faster.

• 9:43David Hoffman?

  And it did.

• 9:45Ryan Sean Adams?

  And it did. And they can also leave faster when people are selling in May.

• 9:48David Hoffman?

  That's a good point. Can also leave faster. I never really thought about that.

• 9:52Ryan Sean Adams?

  Yeah, the leaving part is, is new for us, I guess. I mean, we've been used to up only. David, how about the total crypto market cap?

• 10:01David Hoffman?

  Total crypto market cap, $2.32 trillion, slightly down on the week. Also, in ETF land of Bitcoin and ETH, ETFs launched in Hong Kong. The first day of trading volume had a whopping $12 million of spot ETH and ETF volume. If that number seems low, it's because it is. The average Bitcoin spot volume alone in the United States is 4.6 billion.

• 10:23Ryan Sean Adams?

  For one day?

• 10:25David Hoffman?

  For one day, yeah.

• 10:26Ryan Sean Adams?

  So 12, 12 million versus 4.6 billion?

• 10:29David Hoffman?

  Yeah, on the first day, on the first day of the ETF approval.

• 10:33Ryan Sean Adams?

  I see, I see.

• 10:34David Hoffman?

  So very, very big deal when it was like launched inside the United States.

• 10:38Ryan Sean Adams?

  It's a baby.

• 10:39David Hoffman?

  And we've always known the Hong Kong markets are like just miniscule. It's more symbolic than anything. So it's not a surprise. We've always known that the Hong Kong ETFs and overall the Hong Kong capital markets are just like miniscule in comparison. So it's more of a symbolic thing that Bitcoin and Ether ETFs are launched, but nonetheless, small.

• 10:57Ryan Sean Adams?

  Yeah, when you look at it in absolute size, it's absolutely small. However, David, if you look at it just compared to other Hong Kong-based ETFs, it actually ranks as sixth of 82 ETFs that have launched in the past three years. So it's the top 20% overall relative to other Hong Kong.

• 11:12David Hoffman?

  Of a very small market.

• 11:13Ryan Sean Adams?

  Yeah, of a very small market. So there you go, not totally unexpected. I wanted to get your take on Bitcoin miners. I'm hearing that they're starting to struggle, which doesn't really make sense to me because it seems like fees are at an all-time high with the launch of runes lately. Like there was one day, we talked about it on the last roll-up. It was like almost an $80 million day in terms of fees. I had expected that miners would just be reeking it in, but they're not?

• 11:38David Hoffman?

  That $80 million day, Ryan, was just that, just one day. Bitcoin miner revenue has been on like, it's all down only because margins always just get compressed and compressed and compressed. And then the happening comes in and like cuts in half.

• 11:52Ryan Sean Adams?

  Literally cuts it in half.

• 11:54David Hoffman?

  Literally cuts in half the basal like income of Bitcoin into miners. And so like while there was, there are spikes of revenue from like DGEN, ordinal rune activity on Bitcoin. It's not sustainable. It's just like, it's actually just acute and anomaly rather than just like the actual basal level of Bitcoin inflows into miners. And so miners are, this is right after the happening, which miners are totally prepared for. They know this is coming, but it is the hardest time to be a miner, right after the happening. And this is really when the least efficient miners get washed out and the more efficient miners win. Just based on overhead and capital costs and all this kind of thing. So this is the culling of the herd of the miners. And so the strong miners are going to get replaced, weak miners are going to get replaced by strong miners.

• 12:40Ryan Sean Adams?

  And I'm not a miner. You formerly were a miner, a small-time miner.

• 12:44David Hoffman?

  I got washed out.

• 12:45Ryan Sean Adams?

  You got washed out just like this. So that like purged you of any ideas that you'd create a larger mining entity. Why should we care? If you're not a miner, why should we care?

• 12:56David Hoffman?

  Because this ultimately impacts the security of Bitcoin. When less efficient miners get washed out and more efficient miners win, ultimately, I think the data represents this, is that this is a centralization of Bitcoin miners. Two large-scale capital efficiencies economies of scale. This has been like the longstanding critique of proof-of-work-based security from the proof-of-state camp, is that ultimately, proof-of-work is just defined by economies of scale, which is a very strong centralization force. And so if your long tail can't be sustainable, then you actually just are left with only the fat tail. And so this impacts the security of the Bitcoin network. The theory around Bitcoin security, again, from the proof-of-state camp,

• 13:39David Hoffman?

  is eventually it runs out, simply because it literally does approach zero over time. And so every halving is like one step closer towards that.

• 13:47Ryan Sean Adams?

  Mining is supposed to be super competitive as well, from the Bitcoin mining perspective. But you know what could really help the miners at this point in time?

• 13:55David Hoffman?

  Fees?

• 13:56Ryan Sean Adams?

  Yeah, but also Kathy Wood's prediction of 3.8 million for the price of Bitcoin price. Bitcoin price by 2030. Kathy Wood of Arc Invest is predicting this. This is a raise on her previous prediction, which was 1.5 million.

• 14:14David Hoffman?

  Kathy raises it, she's raising her price target?

• 14:16Ryan Sean Adams?

  She's raising it, she's raising it at a time-

• 14:18David Hoffman?

  That's typically a no-no.

• 14:20Ryan Sean Adams?

  Now Kathy's not afraid to do that, alright? So 3.8 million, again, one Bitcoin, right now is 60,000, we just went over this. But by 2030, Kathy Wood says 3.8 million. That seems really high, but let me tell you-

• 14:34David Hoffman?

  That seems very high.

• 14:35Ryan Sean Adams?

  Let me tell you how she arrived at this number. It's a simple calculation. If institutional investors, you know, there's a lot of those, and they have a lot of money, if they were to allocate just over 5% of their portfolios, that's all it would take, then that alone would send the Bitcoin price to 3.8. So that's what she's saying. David, 5% doesn't sound like a lot.

• 15:01David Hoffman?

  Of an entire portfolio to dedicate to one asset, it kind of does seem like a lot.

• 15:07Ryan Sean Adams?

  I feel like it's more 5% to crypto and that'll happen. I don't think all of that gets allocated to Bitcoin.

• 15:14David Hoffman?

  That makes more sense to me.

• 15:15Ryan Sean Adams?

  That's my take.

• 15:16David Hoffman?

  By 2030 Bitcoin will not be the only ETF on the market.

• 15:19Ryan Sean Adams?

  But actually, here's a, I blanked this out in the agenda, so you couldn't see. So it's a true trivia question.

• 15:25David Hoffman?

  Parts of our agenda have been redacted from me.

• 15:27Ryan Sean Adams?

  On my, on my agenda, a big, big reveal. I still use paper for my agendas every week.

• 15:35David Hoffman?

  That's going to turn into a screenshot on Twitter.

• 15:37Ryan Sean Adams?

  Yeah, David makes fun of me for that. Okay, so how much do you think? So Bitcoin's at about 1.1 trillion in terms of total market cap. How much do you think that, of that 1.1 trillion is held by countries and companies? How much?

• 15:53David Hoffman?

  Companies, okay, so MicroStrategy is a company and MicroStrategy owns 1%. I know that.

• 15:57Ryan Sean Adams?

  Oh, man.

• 15:58David Hoffman?

  Countries, El Salvador is much smaller than MicroStrategy, so I don't even think country is even, is registering here.

• 16:08David Hoffman?

  BlackRock and all of the others, is that counting as ETFs companies? I think so, right?

• 16:13Ryan Sean Adams?

  Swag it, swag it. You know, no, no, an ETF, if it's owned by an individual, it's not. If it's owned by a company, it is. It's not just everything that's custodied.

• 16:22David Hoffman?

  I'm gonna go with 4% is held by countries and companies.

• 16:27Ryan Sean Adams?

  A lot more. All right, so this is Van X's estimate and maybe they're off by a factor of X amount, but it's probably in the ballpark. Van X says they own about 175 billion. That'd be closer to like, you know, I guess 17, 18, 17% or so, something like this, right? 16, 17%.

• 16:47David Hoffman?

  14%, yeah.

• 16:48Ryan Sean Adams?

  14%.

• 16:49David Hoffman?

  14%? What?

• 16:50Ryan Sean Adams?

  Yeah, 14% is held by, actually, actually, this does include ETFs in the headline. It looks like it's ETFs, nations and companies.

• 17:00David Hoffman?

  Yeah, yeah, that's what I thought.

• 17:02Ryan Sean Adams?

  That's still a lot.

• 17:02David Hoffman?

  ETFs are the big one.

• 17:04Ryan Sean Adams?

  It's still a lot more than I thought, right? I mean, 14% already owned by companies. We know that crypto, like Bitcoin has always been retail first. And it's still retail, you know, predominantly owned, but now.

• 17:16David Hoffman?

  If it's 14% companies, ETFs, all these things, everything else is retail.

• 17:19Ryan Sean Adams?

  Yeah.

• 17:20David Hoffman?

  Or I guess VC funds.

• 17:22Ryan Sean Adams?

  Yeah. David, do you want to hear a quick Fed Watch, like maybe just a drive by?

• 17:27David Hoffman?

  Yeah, that's it.

• 17:27Ryan Sean Adams?

  So Chairman Powell made some statements this week. Just the summary is not unexpected. Number one, a rate hike, very unlikely, not in the, in the short term anyways. His base case is to cut rates later this year, but not a given, no promises. There's no sign of stagflation. He, he wanted to make that explicit. And he still maintains that the 3% inflation that, that like we're in right now, that's not acceptable. He said something, there was like a direct quote, 3% inflation and satisfied shouldn't even be in the same sentence. Is what he said. It's kind of entertaining. So did you expect, I mean, this is pretty much what I expected. I don't know if this is news to you, but it's what I expected.

• 18:10David Hoffman?

  So inflation is no longer out of my, this is my take about the current state of the economy. Inflation is no longer out of control, but definitely still present.

• 18:17Ryan Sean Adams?

  Yeah.

• 18:17David Hoffman?

  So like, I think he's just saying like, yo, we're actually still in like middle of 2023 state of inflation.

• 18:24Ryan Sean Adams?

  Yeah, I think what's most interesting about this is doubling down, tripling down, quadrupling down on saying 3% inflation is not acceptable. All right, because that kind of, I don't know, paints him in a, in a corner, right? But if, it's harder for him to say, no, actually 3% is the new normal, just kidding.

• 18:41David Hoffman?

  Right.

• 18:42Ryan Sean Adams?

  When he keeps doubling and tripling down on this. So that should be interesting. He's, he's definitely trying the, the Volcker tactic of I'm going to break the back of inflation.

• 18:51David Hoffman?

  Sure, sure. All right, back to crypto topics. We're talking about Solana.

• 18:55Ryan Sean Adams?

  Yeah, yeah. So Solana's had a massive, absolutely massive run. I think the question on people's minds is, is that it? Is it over? And we've got some-

• 19:03David Hoffman?

  Where does the future of Solana lie?

• 19:05Ryan Sean Adams?

  Yeah, so there's some usage metrics from ex-user Gumshoe, Twitter ex-user Gumshoe. Solana's season is said to be over, it can't pump more, yet it's solidified itself as the best chain on a lot of relevant metrics. Let's talk data. What's the data that Gumshoe is presenting here?

• 19:24David Hoffman?

  Some actually pretty useful charts here. So number one, chart number one, usage increasing. And this is just a matter of transaction fees inside the Solana ecosystem. And you can tell when exactly, you can just point to where the GTO drop happened, right? As non-vote priority fees got kicked in, this is like Solana contention. And so that's been up only ever since the GTO drop, which happened-

• 19:46Ryan Sean Adams?

  Actual user transactions, right?

• 19:48David Hoffman?

  Yeah.

• 19:49Ryan Sean Adams?

  It's big.

• 19:50David Hoffman?

  Well, yeah, users, bots, it's all kind of the same thing. Like MEV bots, these are the same thing as on Ethereum. But like, net aggregate user transactions are up. After that, stablecoin transactions. This is actually a new dashboard from Visa, which we're gonna show in a second. The stablecoin transfer and transaction size on Solana is also just very, very healthily up. Solana is actually the, according to this chart, the largest bar by far, followed by Binance Smart Chain, followed by Polygon, followed by Tron, followed by Arbitrum, followed by Base, also all in like a Pareto curve. So Solana, definitely the dominant total transaction size in stablecoin transactions.

• 20:30David Hoffman?

  And then there's DEX volumes, which is on an 18x increase between 2023 and 2022. And then active addresses hovering around 20 million, 20 million plus in the Solana ecosystem. TVL definitely needs some work, but I mean, it makes sense for a transaction and high-speed throughput blockchain. But nonetheless, the Solana TVL, up from 210 million to 4 billion since August. So definitely, like, it's pretty hard to argue, like, some pretty healthy charts and pretty healthy metrics in the Solana ecosystem.

• 21:03Ryan Sean Adams?

  It's totally benefited from kind of the meme coin- It's kind of the place to go for meme coins. Also, the airdrops have been juicy on Solana so far this cycle, like some of the biggest that we've seen. And the question is, will all of that continue?

• 21:16David Hoffman?

  So I don't know if that's true. Like Jupiter was one big one, but like even the Gito drop, Gito actually only dropped like 100 million or something. It was pretty small.

• 21:25Ryan Sean Adams?

  Maybe it was more, I was thinking more like from a received by individuals perspective. Cause Gito went to like 10,000 people or something, a very small number, but it was a lot of money for each of those users.

• 21:37David Hoffman?

  Yes, it was an average of like $10,000 per user. It was like $130 million to 10,000 addresses. And this was, this was before the airdrop meta really even like was a thing. And so one of the reasons why the Gito airdrop was, it is as big a deal as it was, even though it only went to 10,000 addresses because no one expected it.

• 21:57Ryan Sean Adams?

  Well, it feels, it feels so big if you're an individual and you get just like $15,000 or something, 10 to 15, that feels like generational wealth overnight. Like that's the crypto dream, right?

• 22:07David Hoffman?

  Especially when comparison to Uniswap, which like actually created the airdrop meta and Uniswap was like $1,400 rather than 14,000 or whatever.

• 22:13Ryan Sean Adams?

  So David, do you have any conclusion? Do you think Solana season is over or do you think it pumps more?

• 22:18David Hoffman?

  Uh, I mean, Solana is approaching, in post FTX, it was definitely under oversold, right? Like under indexed on by the industry and since then it's reverted to the mean, right? And then maybe it's also like justifiably grown just by just the UX and all these kinds of things. But like, it's no longer totally disregarded by the market, right? It has approached a closer, like what your close number is, what your approximate fair value is for Solana, up to you. But it's closer there than it was six months ago, that's for sure.

• 22:48Ryan Sean Adams?

  Yeah. David, we got a lot coming up. Eigenlayer introduced its token. They dropped it, but everyone's mad. We got to talk about that. Also, crypto hits a record for the richest person ever to go to jail, because of course you know CZ.

• 23:01David Hoffman?

  Oh my God, that's the most classic crypto headline. The richest person ever who goes to jail is a crypto person.

• 23:07Ryan Sean Adams?

  So stay tuned for all that, guys. We'll be right back. But we want to shout out the sponsors that made this episode possible, including Kraken, our number one recommended crypto exchange for 2024. If you are a bankless listener, you have to have an account at Kraken. Go create one.

• 23:19David Hoffman?

  If you want a crypto trading experience backed by world-class security and award-winning support teams, then head over to Kraken, one of the longest-standing and most-secure crypto platforms in the world. Kraken is on a journey to build a more accessible, inclusive, and fair financial system, making it simple and secure for everyone, everywhere, to trade crypto. Kraken's intuitive trading tools are designed to grow with you, empowering you to make your first or your hundredth trade in just a few clicks. And there's an award-winning client support team available 24/7 to help you along the way, along with a whole range of educational guides, articles, and videos. With products and features like Kraken Pro and Kraken NFT Marketplace and a seamless app to bring it all together, it's really the perfect place to get your complete crypto experience. So check out the simple, secure, and powerful way for everyone

• 24:03David Hoffman?

  to trade crypto, whether you're a complete beginner or a seasoned pro. Go to kraken.com/bankless to see what crypto can be. Not investment advice. Crypto trading involves risk of loss. Have you ever felt that the tools for developing decentralized applications are too restrictive and fail to leverage advancements from traditional software programming? There's a wide range of expressive building blocks beyond conventional smart contracts and solidity development. Don't waste your time building the basics from scratch and don't limit the potential of your vision. Cartesi provides powerful and scalable solutions for developers that supercharge app development. With a Cartesi virtual machine, you can run a full Linux OS and access decades of rich code libraries and open-source tooling for building in Web3. And with Cartesi's unique roll-up framework, you'll get real-world scaling and computation. No more competing for block space.

• 24:47David Hoffman?

  So, if you're a developer looking to push the boundaries of what's possible in Web3, Cartesi is now offering up to $50,000 in grants. Head over to Cartesi's grant application page to apply today. And if you're not a developer, those with staked CTSI can take part in the governance process and vote on whether or not a proposal should be funded. Make sure you're vote-ready by staking your CTSI before the votes open. Launching a token? Worried about the IRS? Talk to Toku for five minutes to learn how to save hundreds of thousands of dollars for you, your team, and your investors. Now, if you do an initial consultation, Toku will cover the cost of your token valuation, which is what you need for your launch. So, don't wait. Reach out to the Team right now at [email protected]. That's [email protected].

• 25:31Ryan Sean Adams?

  The much anticipated Eigen restaking protocol, the token has dropped. They're calling it a stake drop. So what happened?

• 25:38David Hoffman?

  Okay, so we're gonna, we're gonna break this down into, into a number of sections here. We're gonna go through the actual Eigen token and the tokenomics and what the hell intersubjective means. Then we're gonna get into the stake drop details, the distribution of the token, who got what? How people feel about that. And then we're gonna go through the list of grievances that the people, the nebulous people feel about Eigen, the actual details of the drop. And then me and Ryan are gonna reflect on all of these things and some other people's reflections in the space. So, starting with the actual Eigen token. It's called a universal intersubjective work token. Ryan, right off the bat, did you understand what universal intersubjective work token meant when you first read that paper?

• 26:19Ryan Sean Adams?

  I had, I had no idea. That sounds like a white paper, you know?

• 26:22David Hoffman?

  Well, it was. It was a 40-page, very academic white paper, which is extremely on-brand for the writer of that white paper, Sriram, who is literally an academic who has written white papers before. Okay, so let's go through this. Universal intersubjective work token. What is a work token? A work token is a token that gives its holders the right to contribute work to a network and earn rewards based on their contributions. This is a model that has been pioneered before. People who remember the Augur platform, this Augur was a work token. This has been a tried and true token model. Many tokens are actually work tokens. You just don't know them, you just don't call them that. A holder of a token stakes their work token, which gives them the right to perform some work that is required by the protocol

• 27:06David Hoffman?

  and then is compensated as a result. This is actually in contrast to a governance token, of which Eigen is not. Eigen is not a governance token.

• 27:15Ryan Sean Adams?

  So it's a work token, it's not a governance token. And work token, like the model, I used to always explain this is like, you know, taxis and taxi cab medallions. It used to be in old taxi networks, in order to be a taxi cab driver, you had to buy a medallion in whatever jurisdiction you're in. And that was essentially your work token to operate within the taxi cab network, right? And like earn fees for providing work to it. That's what you mean when you say work token, in case people aren't familiar with that term. It's that.

• 27:43David Hoffman?

  Yeah, that's right. We've seen this model of assets in TradFi, right? Like the taxi cab work token aspect, like medallions in New York used to go for like millions of dollars before Uber came in and like upped all that up.

• 27:55Ryan Sean Adams?

  Nerfed them.

• 27:56David Hoffman?

  And to nerf the app, but like it was actually kind of a sad story for like people who like were saying that was their business is they had capital expenditure. You invest in a taxi medallion.

• 28:05Ryan Sean Adams?

  Sometimes you took a loan against all sorts of things, but anyway.

• 28:08David Hoffman?

  Yeah, so like the idea is like the work token, like a taxi medallion is like a $1 million asset and then it nets you something like 1.5% APY because of the work that you get to do as like you get to loan it out to your taxi cab drivers.

• 28:22Ryan Sean Adams?

  Okay, same thing here. That's the work token piece.

• 28:25David Hoffman?

  Inter-subjective. Okay, blockchains are very good at penalizing objective faults. These are like double spends, CK proof violations, fraud proof violations, all things that math can ascertain to be incorrect or correct. Inter-subjective faults are things that blockchains cannot ascertain to be a fault or not, but are nonetheless completely objective to a rational observer. So two humans can agree 99.9% of the time whether something was a fault or not, but a blockchain simply does not have the knowledge or awareness or the data to be able to decide what's a fault or not. An example of this is a data withholding attack, which is why we need data availability,

• 29:09David Hoffman?

  where some validator is holding data hostage, but the blockchain itself isn't actually aware of that fact because it's being withheld. So the blockchain can't do any slashing because it's not aware of the data being withheld. But two humans, two rational observing humans can look at this and be like, oh, somebody's withholding data, so there's a fault at here somewhere. So that's what inter-subjective means. It's there are faults and two rational humans, two or more rational humans can totally agree without reasonable doubt that like there's a fault here. And then universal, the last part? Like I said, we've seen this work token model before. We've also seen, what I'm about to explain is this forking contract before.

• 29:50David Hoffman?

  Augur, like I said, built this forking contract prediction market back in 2018. But Augur's intersubjective fault system was application-specific. Augur was built to settle disputes between prediction market outcomes. That's what Augur was. Eigen is universal because you could, in theory, build Augur as an AVS on Eigen layer, and then you can use Eigen as the work token for that application to use Eigen to settle disputes. But you could also use the same Eigen token to settle intersubjective faults for any other AVS that also needs to settle intersubjective faults. Okay, that was universal. Part of this key component of the Eigen system is this forking contract. So there's actually a two-token model to the Eigen token.

• 30:34David Hoffman?

  So there is the fungible, normal Eigen token, which is like the typical token that people are familiar with. These are the token that goes in DeFi, that will be on Uniswap, that will be in Aave, etc. And then there is B Eigen, which is backed Eigen. And this is like a derivative form of Eigen that creates this forking contract. And this is how the intersubjective faults are settled. And so if there is a fault that the Eigen layer community has determined is a fault, it goes to court, and this is a court case. And so you can see in section 2 here, you have B Eigen, number 1, which will split into

• 31:13David Hoffman?

  two universes, but one universe representing one outcome or the other, who was in the correct or who was in the wrong. And these two universes split, and people stake their Eigen to one of these two different universes. And then in a typical scenario, like the vast majority will just all agree on which is the correct universe. Somebody was being a malicious attacker here. Everyone else was being honest. People are going to stake their Eigen tokens to the honest side, and then all of the Eigen tokens stake to the dishonest side get burnt. And so this would actually decrease the supply of Eigen. And so this is how a Two different universes are birthed for the Eigen token. And then all of the attacking malicious Eigen gets burned.

• 31:58David Hoffman?

  And then the Eigen token goes off into this future universe. And this is how intersubjective faults are settled in the Eigen ecosystem. It cannot do this with Ether because you cannot fork the blockchain just to settle disputes in the Eigenlayer ecosystem. This is highly related to Vitalik's post about don't overload Ethereum consensus about Eigenlayer. And so this is the answer to how you can have intersubjective faults in Eigenlayer AVSs without having to worry about forking the Ethereum blockchain. You actually just fork Eigenlayer. Why there needs to be a two-token model is because you also need to have the tokens just be working in DeFi, as everyone is familiar with, and be totally unaware that all of this is going on. And this is also the why there's work in the Eigenlayer ecosystem. Does all that make sense?

• 32:41Ryan Sean Adams?

  Yeah, can I just say something about that, David?

• 32:44David Hoffman?

  Sure.

• 32:45Ryan Sean Adams?

  That's kind of a lot. Like, so I think the question on people's minds who are excited about this token is like, but how much am I getting? Like, where's my airdrop? I mean, you just, that's a whole bunch of vegetables that like are, you know, you have to digest. And I think there's a good percentage of the population who's just like never going to understand this or only understand a small sliver of it, right? And I actually think this gets to, I know we're going to talk about the criticism. This actually gets to some of the criticism of the airdrop from kind of like the person, average crypto native person on the street, which is like, I kind of want to hear about my token and how much it's worth and how I can unlock it.

• 33:29Ryan Sean Adams?

  And what I feel like I got any like was a

• 33:32David Hoffman?

  Intersubjective work token?

• 33:34Ryan Sean Adams?

  Yeah. And that's like a academic, like 40-page type thing. And I think, by the way, I think this is why Eigen had some, you know, like some of the comms problems around this drop in the first place. And so it's like, the nerd in me is really excited about what you just said. And also I feel like I have to like digest that and understand what it means in the context. But like, you know, the degen, the crypto, like, I'm just like, but like, give me the details, how much did I get?

• 34:01David Hoffman?

  So this is, yeah, this goes at the heart of like, kind of the conflict between, well, Eigenlayer is producing this very sophisticated forking contract to increase the scope of what security and trust it can provide the universe. And then, on the crypto side, I was like, "Stop talking to me about intersubjective work." Like, I would like to know, give me my tokens, please.

• 34:20Ryan Sean Adams?

  I think the average person got something from what you said, which is, "Oh, cool, it's a work token, it has utilities, it's not just a futile governance token, there's a purpose to it." So checkbox, right? I don't know how much more I need to understand about, or could understand about intersubjective forking at this point in time. Okay, so, let's get to the details of the distribution. What did that look like?

• 34:40David Hoffman?

  Okay, Eigen distribution, 1.67 billion tokens, 5%. It was released in this initial Season 1 stake drop, claiming we'll go live in 10 days. We'll talk about the transferability in a second. Of the total supply, 5% is Season 1. There are multiple seasons, 15% of the total supply of Eigen is allocated into the stake drops, which are just airdrops, but the only thing you can do is you can stake your token. 5% is getting released now. You can see your allocation, we'll talk about that again in a second. And then, let's see, early contributors, this is the Eigenlayer team, gets 25%. Investors, 29%.

• 35:21David Hoffman?

  Community initiatives and ecosystem are 15% each, and you put those together, and you basically have what I'm pretty sure is the foundation. So this is like, community incentives, bootstrapping the decentralization, whatever a foundation does, which is the typical model of a foundation that we've seen.

• 35:38Ryan Sean Adams?

  So 15% total will be dropped to, quote-unquote, "the ecosystem" or "the community," right? 5% announced in this first kind of drop.

• 35:48David Hoffman?

  Yeah.

• 35:48Ryan Sean Adams?

  You can't actually claim the tokens at this point in time, but you can see if your address is eligible, and you can claim them, what, it was like May 10th or something like that? That's when you can actually claim it? Okay, I'm with you so far.

• 35:59David Hoffman?

  That's right. Okay, so like a lot of the feedback about Eigenlayer is the nature of the distribution. People, some people do not like the linear-ish nature of the Eigen distribution. So it's linear-ish because of the point system. You put your ether into Eigenlayer, you start accruing points. The more points that you get, the more Eigen tokens that you got. Except with some small caveats. People who restaked their ether into Eigenlayer in the very first phase, who took on, like, who were very early, like the first depositors into Eigenlayer, they took the extra risk because they were the first to the door. They got a small boost of Eigenlayer rewards just for being early. Native restaking, as opposed to liquid staking tokens, restaking,

• 36:43David Hoffman?

  got a boost. So if you deposited ether or natively staked ether into Eigenlayer, you got a boost. And then everyone got at least 10 Eigen tokens. And so the long tail of addresses got a boost. So if your rewards were below a total of 10 Eigen, then you just got bumped up to 10 Eigen. So no one got less than 10 Eigen. This actually impacted 130,000 addresses. So what would have been 400,000 Eigen tokens given to the bottom 130,000 addresses actually turned into 1.2 million Eigen tokens, which were given to the bottom 130,000 addresses. Overall, 260,000 addresses got Eigen tokens in the season one allocation.

• 37:24Ryan Sean Adams?

  Yeah, and so I guess, like, the question is, how many addresses, evaluate an airdrop, how many addresses got it, right? So how wide is the distribution? And I guess that's a proxy because some of these things can be civil attacked. And then like, how much, how much value was actually dropped, right? And so if you do an implied Eigen valuation at about 18 billion, and by the way, there are some small illiquid perps markets that value Eigen at 18 billion. Is it 5 billion? Is it 10 billion? Is it 50 billion? We don't actually know, but let's take 18 billion. That would mean about 900 million was awarded to those 280,000 addresses at this point in time. And again, they can't, they can't claim it yet. They will be able to claim it. And by the way, once they claim it, it's locked. We'll talk about that in a second. But if you do some comps on that...

• 38:09Ryan Sean Adams?

  And then, and then, by the way, there's another 1.8 billion. So that's, again, that's 15% of supply that is set aside for our future drops to the ecosystem, to the community, right? So, I mean, how much is that in total? Are we talking about, like, we're talking about north of 3 billion, I guess, in total? That would be dropped at an 18 billion valuation?

• 38:29David Hoffman?

  Yeah, just counting season one, which is 5 of 15% of the total amount of Eigen tokens that's going eventually to the community, however you wanted to find that. Just counting the first 5% is $903 million, which puts Eigen as number three of the total amount of value distributed to 260,000 addresses. So just, just for comparison purposes, Arbitrum dropped 1.5 billion to 625,000 addresses. ENS dropped 1.07 billion to 138,000 addresses. DYDX did a quarter billion to 64,000 addresses. So, again, Eigenlayer, 903 million to 280,000 addresses. Oh, 280,000, sorry, that's the right number.

• 39:10David Hoffman?

  So like, actually, just, just with season one, not counting the unknown, season two and season three, we don't know where that's going, just season one, it puts it at number three in airdrop terms.

• 39:19Ryan Sean Adams?

  Okay, one other fact here is Eigenlayers aren't transferable at this point in time. So you can check your eligibility, you can claim them on the 10th, and you could stake them, but even once you claim them, you can't actually transfer them to another address. So you couldn't list them on, like, you can sell them on Uniswap or anything like that. The tokens are locked. Can you talk about that?

• 39:39David Hoffman?

  So it was stated that Eigen will be non-transferable for some amount of time. The specific amount of time was not released, but they put some milestones in there. First, the whole intersubjective forking relies on, like, actual social consensus. People actually need to learn what intersubjective forking actually is, because it's a work token, you have to know how to do the work. And so there is a phase of just people needing to learn what intersubjective forking is and what their role is. And then also, there are additional components of the Eigenlayer engine that also need to be turned on. These are just like internal milestones that the team needs to hit, which is payments and slashing. So key payment and slashing features should be well-established and understood, as well as core elements of a sustainable marketplace. This is the Eigenlayer team saying, hey, we got work to do.

• 40:22David Hoffman?

  Once these, once these things are live, and once the community digests what a work token is, then we will unlock the token.

• 40:29Ryan Sean Adams?

  I think it's safe to say, so those are all the facts. Now we get into like every, a lot of people were upset about this.

• 40:36David Hoffman?

  Yeah.

• 40:36Ryan Sean Adams?

  A lot of, there was a lot of grievances. And I think one of the things is, based on what you just said, is people were upset that they were receiving a locked token and not a completely, an unlocked token. And by the way, there was no actual date. It was kind of an estimate of, hey, we'll let you know later when these things happen as far as when Eigen itself gets unlocked. So there was a lot of upset around that. And that was, I think, one of the core grievances that I heard, but not the only one, because this, this token was, or this was dropped, right, on Monday? And David, Twitter, like, went absolutely wild. It was one of the-

• 41:13David Hoffman?

  It was crazy.

• 41:14Ryan Sean Adams?

  It was one of like, I would say, the most attacked airdrops that I've seen, right? In terms of like Twitter sentiment. And we could talk about like, how real that is, how fake that is, or what that is, but it wasn't just on Twitter. It was like from channels that we look to for, for actual signal. So the bankless citizens in Discord, a lot of people were upset. They had different issues. So what were those issues? What were the primary grievances, would you say, of airdrop recipients?

• 41:40David Hoffman?

  One of the biggest ones was the VPN restrictions, which were pretty aggressive. So there's, there's two types of like website restrictions out there. There's geo-blocking, saying, hey, if you're accessing this from any particular country, like the United States, you, you can't access this website. And like, we're pretty used to that. Like, that's like half of DeFi. And it's simple. You just turn on your, you're, somebody might just turn on their VPN and just get around it. But then there's also more sophisticated VPN restrictions. So like, you actually can't access the Eigenlayer claiming website using a VPN, because VPNs are like taggable, they're loggable. So any sort of like consumer, like, business-based VPN, like, it's not gonna work.

• 42:20Ryan Sean Adams?

  And so the criticism was, there was like, no VPN blocking on the way in, when you stake, you know, re-stake your tokens, but there's VPN blocking when you go to claim, was the basic criticism.

• 42:29David Hoffman?

  Yeah. So like, the, the criticism is that like, why, why are you guys blocking our ability to claim the token, but you're not blocking our ability to deposit the ETH? Right? Like, one is, one is like- Can you use the application? And the other one is like a token securities conversation, but we'll talk about that later. The non-transferability is probably the next big grievance. It's non-transferable until a later date and a date that actually wasn't stated. And so like, what's the point of having points if you're going to just release a token that's non-transferable? Like, that's just on-chain points. It's still like, it's not real until it's transferable. And so that was another big grievance. The linear distribution, people didn't like, even though it was like, still linear-ish, it still kind of benefited the long-term, but people wanted more.

• 43:11Ryan Sean Adams?

  Like at the bottom tier, right? So rather than that 10 minimum, they wanted a higher amount, minimum type of thing? More linear at the bottom?

• 43:18David Hoffman?

  They wanted large whales to not have such a strong, a linear return on capital. This is the classic, like, Justin Sun comes in, deposits 23 million Ether for two weeks, and then he gets like a million-dollar airdrop, just because he has so much capital. And so many people would like that not to be rewarded so strongly. That's why people don't like the linear distribution. Now, there's of course, problems with sublinear distributions, but again, a topic for a different day. There's also, I'll agree, there was some sloppiness about the snapshot. So the snapshot for season one was taken March 15th, and then it was announced that the snapshot was taken on April 30th.

• 43:59David Hoffman?

  So there's a 45-day period where anyone who deposited during this window, or anyone at all earning points during this window, were actually excluded from this drop. So people didn't enjoy that. And then, there's like, team investor distribution lockup terms. So like, the token is non-transferable, but teams and investors have started their vesting, so people didn't like that. But that's actually not actually the case. The vesting schedule of investors and teams starts when the token is transferable. Most people don't know that, but that is the case.

• 44:30Ryan Sean Adams?

  Well, what's the overall, the summary of the vibe? I think here's a take from a bankless citizen, which is not a rando Twitter account. This is PM Lebs. Says, "From the outside looking in, it looks like they accepted ETH from everywhere. They pumped the TVL, raised cash, and then decided they couldn't give out rewards for challenging jurisdictions. Why not prevent the US from participating upfront? I don't know, it just seems greedy." There was like this feeling of like, I don't know, a lot of people-

• 44:56David Hoffman?

  Individuals feel farmed by Eigenlayer.

• 44:58Ryan Sean Adams?

  Yes, individuals feel farmed by Eigenlayer. That would be a summary of the vibe.

• 45:02David Hoffman?

  So this is the caricature of like what people think is the typical like raise strategy for big teams these days is like, hype up your token, hype up your points, issue a points farm, get TVL in, go to A16Z, raise a billion dollars, and then also release a locked token, ha, ha, ha, ha, ha.

• 45:20Ryan Sean Adams?

  Gotcha.

• 45:21David Hoffman?

  Gotcha. And so like, I get the perspective, this is many people's conclusion who are viewing this thing as, either as community members and like, there were like 10,000 X meme coins on Solana that people elected to not go and participate in because they had their capital inside of Eigenlayer, right? There were other opportunity costs, there were other things that they could have done. And many people feel like they just got nothing. They can't claim their tokens because they're geo-blocked, and even if they can claim their tokens, they can't transfer them. And so like, what did they really get? They feel like they got nothing.

• 45:54Ryan Sean Adams?

  I just want to double down on that, right? I get how it could feel like that if you're at the sort of the bottom and you only deposited a very small amount, you're only eligible for 10, maybe didn't pay for your gas fee. At the same time, it's not clear to me that that's what the Eigen drop was actually rewarding here, right? And so like, when you look at the actual APY of, I put X amount and I got Y amount return, wasn't it something like, it's like 60%?

• 46:22David Hoffman?

  The base case APY.

• 46:24Ryan Sean Adams?

  18 billion dollar valuation, so that's an assumption. But base case APY is, for the amount that you put in to the token, you got about a 60% APY return. Which is like, it's not going to turn you into, like, it's not life-changing money. But it's a pretty good APY, I would say.

• 46:44David Hoffman?

  Pretty good return.

• 46:45Ryan Sean Adams?

  Especially, I guess, considering that, obviously, the more ETH that goes into Eigen, the fewer, like, Eigen...

• 46:53David Hoffman?

  The rewards get spread around.

• 46:55Ryan Sean Adams?

  The rewards get spread around more. So like, but, but just to, you know, level set here, APY was about 60%. Is that, is that correct?

• 47:03David Hoffman?

  That APY at 60% is base case. If you were in the bottom 130,000 addresses, that got the bump up to 10 Eigen.

• 47:10Ryan Sean Adams?

  You got more.

• 47:11David Hoffman?

  You, you got more. You got between 90 and 170% APY.

• 47:15Ryan Sean Adams?

  Okay.

• 47:15David Hoffman?

  For, for just being there. But like, people are still saying, well, if you do the calculation, that, that 10 Eigen is $180.

• 47:23Ryan Sean Adams?

  Okay.

• 47:23David Hoffman?

  And so like, that's just, it's just not much.

• 47:25Ryan Sean Adams?

  So I don't think Eigenlayer has like responded officially to all of the clamoring that's going on, but what do you think, like, in Eigen? If you're, if you're a builder in Eigenlayer, say you're Shri Ram, what do you think their perspective is on this?

• 47:40David Hoffman?

  Okay, so the perspective of people building the Eigenlayer engine, they're, they're, they have a different focus. And so like, again, emphasizing that like Eigenlayer engine that's being built, Eigenlayer mainnet went live a couple of weeks ago. EigenDA was, is now online. They are slow rolling out different components of the Eigenlayer engine, turning them on, hooking them into each other. So the whole entire ecosystem of incentives and participants in the Eigenlayer world are all, are all humming. And so the Eigen token is actually just the next inline component to complete the Eigenlayer engine that the Eigenlayer team needed to turn on. And so that, the Eigenlayer team is like, okay, we are slowly building out the engine. We are slowly releasing components one by one by one.

• 48:24David Hoffman?

  Now it's the next inline component is the Eigen token. Let's get that out there. Our lawyers don't want it transferable, so we're gonna lock it, but you can stake it to EigenDA and then you can provide economic security to EigenDA. Then we're gonna turn on slashing and then we're gonna have some systems and then everything is gonna be like humming. And then the engine's gonna be complete and then we're gonna unlock the token. Like, that's the perspective of the Eigen builder and that's their focus.

• 48:48Ryan Sean Adams?

  Yes.

• 48:49David Hoffman?

  So they're not exactly taking into account... Like the perception of everything. They are they are just focused on turning on the Eigenlayer engine.

• 48:56Ryan Sean Adams?

  Yeah, because Eigenlayer has been a series of like releases and like

• 49:00David Hoffman?

  Slow incremental releases.

• 49:02Ryan Sean Adams?

  Slow incremental releases. So I could expect that this would be a next like slow incremental release.

• 49:08David Hoffman?

  But on the flip side, the community just some don't care. They don't perceiving that they are just like, oh, I'm here for the token. I'm here for the rewards. It's a bull market. There's only so much time to reap the rewards of a bull market. I'm going to do the Eigenlayer thing and like, oh, what? I got a I got a wet dud of a token that doesn't have a market value associated with it because it's not transferable.

• 49:26Ryan Sean Adams?

  Right.

• 49:27David Hoffman?

  And so like these are different perspectives. Different time horizons. Yeah. Yeah. There's also Jake Stravinsky also put out a very long tweet about this. Basically summarizing that this was one of the most risk off token release events that you can do. He says, "The Eigen token kicked off a discussion about two particular design decisions. One, the token can't be transferred and two, it can't be claimed by United States Eigen users. So what is a risk averse lawyer to do? Enter non-transferability." He says, "In general, securities law only applies to assets that can be bought and sold, and then also geofencing. In general, securities law only applies to transactions that occur within the United States.

• 50:08David Hoffman?

  Both of these options are on the conservative end of the regulatory risk spectrum for token distributions. But there are other points, he says, on the risk spectrum that are also defensible, even when the SEC might not agree. For example, free airdrops aren't securities transactions." So the vibe of the thread is that Eigenlayer chose a very conservative regulatory cover for itself. And I think another perspective that the typical user doesn't have is like Athena, great airdrop, very happy community, team based in Portugal, right? Eigenlayer, Sury Ram, Eigenlayer team, United States based team. Like Sury Ram lives in Seattle. He's a professor at University of Washington. And so different teams and different projects have different levels of risk associated with them when they release a token.

• 50:50Ryan Sean Adams?

  Yeah, I think that's an interesting point. It adds some friction to the claiming experience. I will point out, though, no one has been able to claim yet. So you're just sort of geo-blocked from assessing your eligibility, I guess, at this point in time. It's hard not to imagine-

• 51:03David Hoffman?

  Which you can also check your eligibility on Bankless Canables.

• 51:06Ryan Sean Adams?

  It's just, yeah, it's just hard not to imagine that there would be third-party apps that would allow you to kind of check eligibility and to maybe even, you know, claim this elsewhere, right? If Aigen's in a position where they have to, they feel like the most, the least risky thing is for them to geo-block that, like, they do this. But, yeah, there was not very much tolerance for the geo-blocking, in particular, the VPN restriction, I would say. And that counts for something. I guess you could also take the flip side of this, which is basically like, hey, if you're in the game in crypto, you're gonna get sued anyway. Like, look at MetaMask, you know, Unis, they're all sued. Coinbase, Kraken, they're all sued. And so-

• 51:45David Hoffman?

  Gary doesn't care about your VPN block.

• 51:46Ryan Sean Adams?

  Yeah. And so I sort of, I get that take as well, but, you know, look, I'm not a lawyer. Don't make these decisions. All right. So what is, then, your assessment on this? What do you think?

• 51:57David Hoffman?

  I've kind of given bits of it throughout this, like, analysis. I think, once the token is transferable in the future, like, everything's gonna be fine. Like, 60% APY is very strong. That's a very good farm for a very long amount of time, especially for $13.5 billion that that 60% had to get spread around. Once the token is transferable, people are gonna figure out how to get around the VPNs. It's not that hard. People are going to make it easier for other people to get around the VPNs. Then the token's gonna be transferable. It's gonna come at some billion-dollar market cap, and then everyone's gonna be fine. People are gonna forget about it. That's kind of my base case.

• 52:33Ryan Sean Adams?

  So just, like, super noisy? And you think people are eventually gonna be happy? Let me ask you, because there's a lot of charge that if you think like that, you are basically an out-of-touch elite, or like, you are kind of a core investor in the project, or you have some exposure, or you have some upside. You're paid to think like that, basically? And, yeah, what do you say to that?

• 52:54David Hoffman?

  Yeah, that's kind of like the base opinion, I would say. It's like, that's the opinion of the community is that like, anyone affiliated with Ironlayer, or associated with a team, or like, one degree removed, is all of the opinion that like, the things are good.

• 53:10Ryan Sean Adams?

  You can't have an opinion. I think you can't have an opinion. Alright, so you are a long time promoter, like, you're excited about the project.

• 53:16David Hoffman?

  I'm a big believer in Ironlayer, yes.

• 53:17Ryan Sean Adams?

  I think that's genuine, because I know you, and you've been like, excited from the very beginning, particularly because of like, ETH being a risked monetary asset, like, it checks all the boxes for what I know about David Hoffman. You're also an advisor for the project, as well as I am. So, somebody's gonna listen to this whole segment and be like, "Your opinion is invalid. Of course you think that. You're financially incentivized to think that." Alright, and like, so it's worthless. The analysis is worthless. And I just want to say that, because that's the actual mood. That's the mood.

• 53:47David Hoffman?

  That's the mood.

• 53:47Ryan Sean Adams?

  What I think, my big takeaway here, is there's actually like this, in this new, kind of like, airdrop meta 2024, there's like, this dichotomy that has strengthened, between kind of like, what I'll call labor and capital. You know all the labor and capital battles that, like, we've seen throughout history, right? Of, you know, labor's on one side, they're doing the work, and like, capital takes all of the proceeds? I think there's like, you're almost forced into this dichotomy of, you are on Team Labor, which means you are a user, you are trying to, you're like, be eligible for the airdrop, trying to do the activities that the protocol wants, that's labor. Or you're capital, you're a developer, you're a project, you're an investor, you're a VC, in the kind of like, behind the scenes, and you have to choose one or the other.

• 54:30Ryan Sean Adams?

  And it's interesting, because I think like, Bankless, you and I have been placed between both, right? I mean, so, yeah, but like, because you're on the capital side, you know? And because you're giving an argument on the capital side, your opinion's just invalid here. So, there. I think some people will listen to this and just come to that conclusion. Just like, turn it off.

• 54:54David Hoffman?

  Yeah, there's somebody in my replies on Twitter who is like, the team and the Eigenlayer team and the VCs got something like 60% of the total distribution of Eigen. Meanwhile, the community only got 5%, even though, again, 15%. But, and they say like, hey, like, you could just easily take away 5% from the teams and the VCs, and you could double the supply going to the community. And that, that's just an easy thing to do, and you could have a massive outsized increase to the community. And I remember thinking some of these very similar like sentiments back in like 2017, just like-

• 55:26Ryan Sean Adams?

  When you were on labor side?

• 55:27David Hoffman?

  When I was on labor side, yeah. And I was like, it's just so easy just to have an outsized benefit to the long tail, to the community.

• 55:34Ryan Sean Adams?

  Yep.

• 55:35David Hoffman?

  But I also just think that invalidates the risk that investors and the team have also put into Eigenlayer.

• 55:41Ryan Sean Adams?

  That's a very capital opinion of you, David.

• 55:43David Hoffman?

  There have been Eigenlayer teams who have been working 40 to 80 days an hour a week since 2021. There have been Eigenlayer investors who actually gave up capital. They put in their capital, just like, just like to have the community put in their capital into the airdrop farm-

• 55:58Ryan Sean Adams?

  Sure. It's a capital argument to make. It's a capital argument to make that basically, without Free ROM and the developers-

• 56:04David Hoffman?

  Right.

• 56:05Ryan Sean Adams?

  It would be zero. There would be no-

• 56:06David Hoffman?

  And then the community is like, Eigenlayer is nothing without like, without us, right? Eigenlayer is nothing without our community and our capital. And then on the, on the flip side of things, well, like, the investors are saying the same thing with their capital, and then the Eigenlayer team is saying the same thing with their labor.

• 56:21Ryan Sean Adams?

  Yes.

• 56:22David Hoffman?

  And so it's like this three-way like standoff between investors, team, and community.

• 56:26Ryan Sean Adams?

  I agree.

• 56:27David Hoffman?

  But the thing is, like, the community has like 80% of the people, 80% of the voices.

• 56:31Ryan Sean Adams?

  Sure, they do. And I think that's what's happening. And at some level, like, the, the give and take is kind of like good. I feel like it's good. I feel like this will equate to situations that everyone is more happy with, or, you know what I mean? I think there'll be some give and take. I think there'll be some check and balance. I, I think it'll, I think it'll work out. But I actually think there's another force here at play, okay? And I'm not sure how many people see it, which is like, I think there are genuine, not usals, not users, not people who are excited about this, individual citizens. I think- There are a whole bunch of like people that are industrially farming airdrops right now. And they are effing it up for everyone. Well, but I actually think that there is like, it's really hard to perceive, but there is like

• 57:17Ryan Sean Adams?

  an influence on social media and like, like hiring, you can literally hire swarms of bots to like preach a narrative and like push it. And then so, so some of the people who are disappointed with the drop and are individual citizens get pushed into that mob. I mean, we've seen mob attacks at play so many times on Twitter. And it's, it's almost impossible to know how much of that is at play, but it is a third party that is just civil attacking. So fourth, the fourth part. Fourth party, civil attacking. Well, there's labor capital and I guess, I don't know what these are. Eigenlayer team, VC investors, community, three legitimate parties. I, I, I think most people see Eigenlayer devs and investors in the same, their, their, their capital.

• 57:59Ryan Sean Adams?

  But anyway, so this, there's this other party that's like, you know, pushing their advantage to. The industrial farmers who are like bullying Eigenlayer into giving many, many tokens to the long tail. But they are half the long tail. You have a hundred addresses that you civil attacked, right? Yeah. Well, 10 is fine. It's a fine return, but like, you know, what's better, you know, 20, 30, 40, 50, as far as that minimum Eigen drop? That's going on too. Totally. Yeah. And, and it's, it's the most undetectable part of this whole thing. Yeah. The last thing I want to say about this is I actually think that's at play, but the biggest thing at play to me is just the delta between expectations and reality. And when there's a delta between expectations and reality, there's going to be disappointment.

• 58:41Ryan Sean Adams?

  And I actually think it was impossible. No, no matter what this airdrop did, I feel like it was, the expectations were so hyped. I mean, Eigen restaking, this whole thing has grown so fast and so big that there were so many people expecting like something far beyond what was probably reasonable to expect because like just. People, people are trying to retire off of airdrops. Yes. And it's just not going to happen. This, the space is too crowded. And so that was never going to happen, but because people had that expectation and the kind of the, the reality was like, ah, and I got something that was locked. So I can't sell it. And now you're talking about interjective, uh, like Interjective forking. Forking and like, I don't care about this. And, you know, I, I wasn't in it for the, like, I'm just.

• 59:27David Hoffman?

  There are a lot of parties around the Eigenlayer ecosystem who are very incented to hype it up. Because like, all of the LRTs are trying to hype up Eigenlayer because that's how they get inflows, all the AVSs. Like, I like Eigenlayer because it is a very Ethereum-centric piece of infrastructure. That I think removes the need of the long-tail blockchains and puts it all into the same spot. Like, that's my interest in this. And like, I'm probably one of the main proponents of the whole Eigenlayer ecosystem. And I've been saying, like, I think Eigenlayer, before this, I said I think Eigenlayer could be the number one airdrop of all time. And if you look at the actual dollars of capital that's going to be, that is set aside for the community.

• 1:00:09David Hoffman?

  It is, by far, the number one airdrop by value, sent to 280,000 addresses. And so, like, there's some disconnect going on, and it's all just very weird.

• 1:00:21Ryan Sean Adams?

  I was trying to convince David to not talk about this at all, by the way. Because I don't know that people want to hear these opinions at this point in time. But, there you go. There it is.

• 1:00:29David Hoffman?

  We got a meme for you, though.

• 1:00:30Ryan Sean Adams?

  Oh, you got a meme?

• 1:00:31David Hoffman?

  We got a meme. Yeah, yeah, yeah, yeah.

• 1:00:33Ryan Sean Adams?

  Oh my god, this. Yes, I've seen this. What are you looking at?

• 1:00:36David Hoffman?

  Okay, so this is a caricature of the Eigenlayer token presenting itself to a crowd of community. And then the community just starts absolutely beating the shit out of Eigenlayer. But then you see, in the next frame, you see both Layer Zero and ZK Sync just in absolute fear. Who are about to drop their tokens, and they're just living in fear of getting beat up because the mob's gonna come for them next.

• 1:00:57Ryan Sean Adams?

  Everyone learns from the last one, but I gotta say, depending on the time and place you drop it, it's gonna be a unique experience every single time. It's almost like you never know. All right, David, moving off Eigenlayer, let's talk about CZ. Okay, so, his sentence came this week. Tell us, what did he get? How many months or years?

• 1:01:14David Hoffman?

  Everyone listening, guess how many months CZ is going to jail for? Because if you don't know, it's because you haven't been on Twitter. There's an ancient meme in CZ of him just flashing the 4 number. And it's his commitment. He spawned this from this tweet where he's always going to remember the fourth list in his tweet that he's going to say. And I can't even remember what 1 through 3 is, but 4 was always ignore the FUD. And so 4, CZ flashing 4, has just turned into a meme. It's just like probably crypto's biggest meme. CZ got sentenced to four months in jail, which is just absolute proof that we live in a simulation. So Binance is ordered to pay a $4.3 billion fine and forfeiture. CZ has to pay a $50 million fine and he is going to jail for a whopping four months.

• 1:02:00Ryan Sean Adams?

  This is what he said. "I would like to thank everyone for your care and support, writing letters, showing support on X. They mean a lot to me and keep me strong. I will do my time, conclude this phase and focus on the next chapter of my life, which is education. I will remain a passive investor and holder in crypto. Our industry has entered a new phase. Compliance is super important." And he ends this and says, "And funds are SAFU. Protect users," he said. So that's how he's going out on crypto Twitter, at least for this period of time.

• 1:02:29David Hoffman?

  If this is the end of the era of CZ, he never lost a customer dime. Binance never got exploited. I think that's true. All funds have been SAFU since the beginning of time. So like, there are people out there who think-

• 1:02:43Ryan Sean Adams?

  He kept his commitments to the crypto community.

• 1:02:45David Hoffman?

  He made, he kept his, he made his promises and he kept them. And that is extremely exceedingly rare.

• 1:02:51Ryan Sean Adams?

  Yeah, I will say, I think that crypto is basically treating him as going to jail as a hero. Or at least not a villain. Certainly not a villain.

• 1:03:00David Hoffman?

  CZ's going to come out as a martyr, for sure.

• 1:03:02Ryan Sean Adams?

  This is Eric Voorhees with a related take. "Do you know CZ, David, will be the wealthiest person to ever serve time in a US federal prison." Okay, so that's another record that crypto is setting.

• 1:03:11David Hoffman?

  Number one.

• 1:03:14Ryan Sean Adams?

  Maybe because no bank execs ever go to jail before he's coming. And that is true. There's definitely a sense that they are making example out of CZ. This is great. Binance gets a $4 billion fine. That was also 4 billion.

• 1:03:28David Hoffman?

  It was 4.3. It's 4.3. That one, I reject this one. He's trying.

• 1:03:34Ryan Sean Adams?

  All right, he's trying. Okay.

• 1:03:35David Hoffman?

  This one's good, though. This is a meme from Mike at Bilito. This is a pretty, I think I remember seeing this meme in high school. The original meme is Judge says to the victim or the person he's about to sentence, "I hereby sentence you to 68 months in jail." And then the person whispers to my lawyer, and the lawyer says, "My client has requested that you add one more month, so it would be 69 months." But this is CZ saying, "I request that you add one more month to my three-month sentence, so you can make it four months, because crypto Twitter will think that's hilarious." And it did.

• 1:04:08Ryan Sean Adams?

  Do you actually think that's what happened?

• 1:04:09David Hoffman?

  No, no.

• 1:04:11Ryan Sean Adams?

  You actually think the universe made it four? Like, you actually think that's what happened?

• 1:04:15David Hoffman?

  I think that's a happenstance, yeah.

• 1:04:17Ryan Sean Adams?

  Man, that is too good, though.

• 1:04:19David Hoffman?

  Like, I do think that there was negotiation between CZ and his legal counsel and the judge ahead of time for like that $4.3 billion fine. Like, CZ could have just remained on his yacht, wherever. So like, maybe the four was negotiated ahead of time, and CZ like, it would be really funny if it was four months.

• 1:04:35Ryan Sean Adams?

  I want to get CZ on the podcast to hear about this after he's out, so maybe five months later. David, we got a lot coming up. Next, Stripe is coming back to crypto in a big way. And also, I want to update you on the tokenized treasury wars. It seems like they're starting, and it's a little bank-on-bank action for you. Roger Ver? Do people know who Roger Ver even is?

• 1:04:55David Hoffman?

  People do not know who Roger Ver is, no.

• 1:04:58Ryan Sean Adams?

  We got all that and more coming up, but before we do, we want to thank the sponsors that made this episode possible, including one of our favorite Layer 2s to recommend. That is Mantle. Go check them out.

• 1:05:07David Hoffman?

  Mantle, formerly known as BitDow, is the first Dow-led Web3 ecosystem, all built on top of Mantle's first core product, the Mantle network, a brand-new, high-performance Ethereum Layer 2 built using the OP stack, but uses Eigenlayer's data availability solution instead of the expensive Ethereum Layer 1. Not only does this reduce Mantle Network's gas fees by 80%, but it also reduces gas fee volatility, providing 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 onboarded, like Game7 for Web3 gaming and Bybit for TBL and Liquidity and OnRats. So if you want to build on the Mantle network, Mantle is offering a grants program that provides milestone-based funding

• 1:05:52David Hoffman?

  to promising projects to help expand, secure, and decentralize Mantle. If you want to get started working with the first DAO-led Layer 2 ecosystem, check out Mantle at mantle.xyz and follow them on Twitter at @zeroxmantle. Taking self-custody of your crypto is one of the most important things you can do on your bankless journey. It's also one of the hardest things to get right, with huge consequences if you don't. If you want help going bankless, talk to CASA. CASA helps you take custody of your crypto assets, so you don't have to wonder whether you're doing it right. CASA is a one-stop shop for doing self-custody the right way. With CASA Vaults, you can hold Ether, Bitcoins, stablecoins, all with one simple app and multiple keys for the ultimate peace of mind with a support team to help you every step of the way.

• 1:06:33David Hoffman?

  But it doesn't stop at self-custody, because even though crypto is forever, you are not. We all plan on making life-changing wealth in crypto, but with CASA's inheritance product, life-changing wealth can elevate to generational wealth for your kids and your loved ones who don't know anything about crypto. With CASA, you won't lose your private keys, and you won't accidentally take them to the grave either. Click the link in the description to get started securing your generational wealth. Cello is the mobile-first, EVM-compatible, carbon-negative blockchain built for the real world, driving real-world use cases like mobile payments and mobile DeFi. And with Opera MiniPay as one of the fastest-growing Web3 wallets, Cello is seeing a meteoric rise with over 300 million transactions and 1.5 million monthly active addresses. And now, Cello is looking to come home to Ethereum as a Layer 2.

• 1:07:17David Hoffman?

  Optimism, Polygon, Matter Labs, and Arbitrum have all thrown their hats in the ring for the Cello Layer 2 to build upon their stacks. Why the competition? The Cello Layer 2 will bring huge advantages, like a decentralized sequencer, off-chain data availability secured by Ethereum validators, and one-block finality. What does that all mean for you? With Cello Layer 2, gas fees will stay low and you can even pay for gas natively using ERC20 tokens, sending crypto to phone numbers across wallets using social connect. 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 forums. Follow Cello on Twitter and visit cello.org to shape the future of Ethereum. Arbitrum is the leading Ethereum scaling solution that is home to hundreds of decentralized applications.

• 1:08:00David Hoffman?

  Arbitrum's technology allows you to interact with Ethereum at scale with low fees and faster transactions. Arbitrum has the leading DeFi ecosystem, strong infrastructure options, flourishing NFTs, and is quickly becoming the Web3 gaming hub. Explore the ecosystem at portal.arbitrum.io. Are you looking to permissionlessly launch your own Arbitrum Orbit chain? Arbitrum Orbit allows anyone to utilize Arbitrum's secure scaling technology to build your own Orbit chain, giving you access to interoperable, customizable permissions with dedicated throughput. Whether you're a developer, an enterprise, or a user, Arbitrum Orbit lets you take your project to new heights. All of these technologies leverage the security and decentralization of Ethereum. Experience Web3 development the way it was always meant to be. Secure, fast, cheap, and friction free.

• 1:08:43David Hoffman?

  Visit arbitrum.io and get your journey started in one of the largest Ethereum communities. It was rumored last week, but here we are, Stripe bringing back crypto payments this summer. They demoed a platform, their brand new platform, their interface for checking out using Stripe. And you have the normal Stripe interface, but there's this also pay with crypto button. Actually links to Solana, so it's integrated with the Solana blockchain. John Colson, Stripe's president, says at the Future of Payments conference, "Transaction settlements are no longer comparable with Christopher Nolan film lengths, and transaction costs are no longer comparable with Christopher Nolan films for budgets." Stripe is bringing back crypto payments, this time with stablecoins, which are a way better experience. So yeah, Stripe getting back together with crypto.

• 1:09:27Ryan Sean Adams?

  Are you seeing this on the screen? So what's super cool is in the Stripe checkout flow, right? It's connect your wallet.

• 1:09:33David Hoffman?

  Yep.

• 1:09:33Ryan Sean Adams?

  Connect your non-custodial wallet, right? And the example is Phantom. There's also like the option to, you know, Rainbow, Metamask, Coinbase Wallet, all of this. And that statement that John was making, so like for full context of this, Stripe has like entered and exited crypto multiple times over the years.

• 1:09:52David Hoffman?

  Yeah, right.

• 1:09:52Ryan Sean Adams?

  Right? Like, oh, there's hype, let's go check it out. And they go and they deploy it and they find like it's not good for the payments use case. So I remember they integrated the Lightning, they like did all sorts of things. This time it feels very much like Stripe is doing something that is sustainable and here to stay.

• 1:10:06David Hoffman?

  Right.

• 1:10:07Ryan Sean Adams?

  Based on what John just said, which is these are super cheap now and it can handle the transaction throughput. And I think this is absolutely massive. Do you know there are like over 130 million businesses that use Stripe today?

• 1:10:20David Hoffman?

  Right. Well, I mean, this means you can show up to wherever Stripe, like I use Stripe in New York all the time because like every single restaurant has it. And that means I can have crypto on my phone. I can pay with crypto on my phone.

• 1:10:29Ryan Sean Adams?

  So did all the, most of the websites use, like a bankless citizenship. Like we use Stripe behind the scenes too.

• 1:10:35David Hoffman?

  The internet just uses Stripe.

• 1:10:36Ryan Sean Adams?

  The internet uses Stripe and it is, I don't know if you know this, like a $90 million, sorry, a $90 billion private company. It's one of the largest private companies in the world, so it's still, it's still private. Anyway, I just think it's absolutely massive and it's a testament to how far we've come because they're trying crypto this time and they're actually going to stay for it. A pretty cool.

• 1:10:55David Hoffman?

  Not just Stripe, but also Visa. This is, this is kind of a funny announcement, but Visa has a new dashboard for everyone. If you would like to look at stablecoin volume and metrics across blockchains and value, Visa actually has a very good dashboard. So this is Kai Sheffield tweeting this out, saying, "We decided to partner with Aluminum Labs to create the Visa on-chain analytics dashboard to create a closer look at stablecoin activity." So it is just a dashboard, but it's also a very accurate and precise one. And it's, it's done by Visa. Pretty cool. And you can actually see in this chart, the absolute dominance that is Tether. Like USDC and Tether were like almost 50/50 with a slight Tether lead in the middle of 2022 last year.

• 1:11:36David Hoffman?

  And now like Tether is just completely just a gargantuan. It's like a, it's like three times larger than than USDC.

• 1:11:43Ryan Sean Adams?

  You're talking, when you say large, you're talking in terms of supply and that's one metric, but here's another interesting metric actually is they're neck and neck. USDC actually briefly overtook Tether in terms of stablecoin transactions. It's a number of transactions.

• 1:11:56David Hoffman?

  I think USDC might actually be transacting more than Tether. I think like USDC is the transaction currency.

• 1:12:00Ryan Sean Adams?

  Yeah, it's more of a payment coin.

• 1:12:02David Hoffman?

  And then Tether is the store of value currency.

• 1:12:03Ryan Sean Adams?

  Which is kind of cool, but I will tell you David, Tether is absolutely printing money.

• 1:12:09David Hoffman?

  Printing, printing.

• 1:12:10Ryan Sean Adams?

  Printing money. Okay, so this is one quarter of profits, 4.5 billion. 4.5 billion last quarter, Q1 2024 on that Tether trade, right?

• 1:12:20David Hoffman?

  That is zero labor in that company.

• 1:12:22Ryan Sean Adams?

  Because the stablecoin, like when you hold Tether, right, you don't get any of the interest, but Tether holds T-bills. They get 5% interest. When you got $100 billion of Tether out there, or more, I think it's about that, then you get to capture that 5%.

• 1:12:37David Hoffman?

  Yeah, that's insane.

• 1:12:38Ryan Sean Adams?

  And it's a darn good business.

• 1:12:39David Hoffman?

  How many employees do they have, like 20?

• 1:12:41Ryan Sean Adams?

  80 is what I was told from Paulo last time. So, yeah, it's pretty good. Pretty good margin on that business. David, speaking of this, look at this. You know, we thought securities, tokenized securities were going to be a big deal. They're almost at $1 billion.

• 1:12:57David Hoffman?

  Oh, wow.

• 1:12:58Ryan Sean Adams?

  So they're climbing right up there and BlackRock is still.

• 1:13:02David Hoffman?

  I'm going to call this the on-chain boomer index.

• 1:13:03Ryan Sean Adams?

  It's pretty cool actually. So we got 800 million in tokenized treasuries out there and I think there's going to be more. So this is the bank.

• 1:13:12David Hoffman?

  Can I give you some alpha actually about this?

• 1:13:13Ryan Sean Adams?

  Yeah, go.

• 1:13:14David Hoffman?

  You know, is actually the surprising interested marginal buyer of on-chain treasuries in the crypto ecosystem?

• 1:13:21Ryan Sean Adams?

  Who's the marginal buyer of on-chain treasuries? Is it going to be like DAOs or crypto projects or something like this?

• 1:13:27David Hoffman?

  Apparently the demand for on-chain treasuries from DAOs is really, really strong.

• 1:13:32Ryan Sean Adams?

  Yeah, because they want to last a couple of cycles, right? They just don't want to see their treasuries go to like, you know, negative 80% territory, next bear market.

• 1:13:40David Hoffman?

  Plus their costs are in dollars. They pay their people in dollars, not ether. And so they have like Arbitrum has like Arbitrum arb token. They also have ether, but they also need some dollars, some working capital. And on-chain like Buildafund, for example, is like a great tool for that.

• 1:13:55Ryan Sean Adams?

  Yeah, and Biddle Fund, Scott, that's the BlackRock Fund, of course. They've gotten a lot of the, like, the growth here recently. But this is the bank on bank action I was talking about, right?

• 1:14:03David Hoffman?

  You really want to say that.

• 1:14:04Ryan Sean Adams?

  I really want to say it. I'll say it. Bank on bank, okay? So, uh, bank on bank war.

• 1:14:09David Hoffman?

  Getting a little steamy over there?

• 1:14:10Ryan Sean Adams?

  Franklin Templeton, uh, they've been tokenized treasuries for a long time, but they actually have a little app where it looks like individuals. It's called Benji. So they just released this this week. They're offering.

• 1:14:24David Hoffman?

  Benjamins?

• 1:14:25Ryan Sean Adams?

  Yep, yeah. Again, it's Franklin Templeton, right? Benji, Benji tokens. Each maintain a stable $1 price. Each token represents a share of the tokenized treasury, okay? They have 380 million treasury fund. And who can purchase it? You know that this whole thing has been mostly the institutions? Like, you know, companies, DAOs, that kind of thing? Well, Benji provides, apparently, a way for individuals to purchase it.

• 1:14:49David Hoffman?

  Cool.

• 1:14:49Ryan Sean Adams?

  You get an app, you get your Benji as tokenized treasuries.

• 1:14:52David Hoffman?

  Get your Benji.

• 1:14:53Ryan Sean Adams?

  Get your Benji.

• 1:14:55David Hoffman?

  Exciting stuff. What dollar bill is the Benjamin Franklin on?

• 1:14:59Ryan Sean Adams?

  A hundred.

• 1:15:00David Hoffman?

  Okay, all right.

• 1:15:01Ryan Sean Adams?

  I'm all about those Benjamins.

• 1:15:03David Hoffman?

  As soon as I thought, like, Ryan totally knows that.

• 1:15:06Ryan Sean Adams?

  Yeah, I mean, you, you, you said last, like, do you say this over the weekend? That I don't listen to Eminem?

• 1:15:12David Hoffman?

  Yeah, I did say that.

• 1:15:13Ryan Sean Adams?

  Come on, come on.

• 1:15:17Ryan Sean Adams?

  I'm real, David.

• 1:15:18David Hoffman?

  All right, back to crypto subjects. Are you done with, are you done with on-chain treasuries? Can I talk about crypto stuff?

• 1:15:22Ryan Sean Adams?

  That was a crypto subject. Where you been?

• 1:15:25David Hoffman?

  AVE, introduce AVE V4. So there's a number of big updates in the AVE world coming online with AVE V4. A unified liquidity layer, which is the big one. This is the multi-chain part of, like, Ethereum. AVE is learning to contend with its many different AVE deployments on Optimism, Arbitrum, Polygon, mainnet. It is building out using all of the different, like, cross-bridging, like, messaging layers, like Layer Zero and, um, Socket and all these different, like, inter, inter-op layers. A universal liquidity application. So liquidity on Optimism and Arbitrum and mainnet all ought to be the same. That is the vision for the AVE unified liquidity. They also have some new features, fuzzy controlled interest rates. I'm so glad you asked what that was.

• 1:16:11David Hoffman?

  These are just interest rate curves that adjust both on the X and Y axis. So it's just a little bit more rigid. And so as demand for a particular asset in AVE increases, the interest rate curves moves higher on the Y axis, but the steepness of the curve becomes more shallow. Basically, a much more dynamic interest rate curve in AVE protocol. And then also just with increased emphasis of Go. So if you want to look more at the details of the AVE before, there's a link in the show notes.

• 1:16:38Ryan Sean Adams?

  Down, kink point down. Kink point down. Up.

• 1:16:43David Hoffman?

  I wasn't gonna say kink point, but now you said it, so I feel like I have to.

• 1:16:46Ryan Sean Adams?

  I don't know what that means. No, you don't have to explain it. You don't have to explain kink points.

• 1:16:50David Hoffman?

  There is an inflection point in AVE interest rate curves. Where if you can't hit 100% utilization because then no one can withdraw. So basically, the interest rates goes to infinity as it approaches 100%. But like, there's a kink point where like, the interest rates are marginal and then kind of like at 90% and goes really, really steep. So the kink point adjusts more dynamically.

• 1:17:11Ryan Sean Adams?

  Inter-subjective work token.

• 1:17:13David Hoffman?

  More flexible kinking in AVE. AVE has tolerance of many types of kinks inside of this interest rate curves.

• 1:17:20Ryan Sean Adams?

  I'm not gonna touch that one. Do you want to hear a headline from 2018? That's here. Coinbase just added Lightning to the Coinbase stack. I'm sorry, Lightning. I'm sorry. All right, so this is cool. May as the context of we just recorded an episode with Eric Wall, who's kind of a Bitcoin builder, talking about L2s. And he basically said Lightning's dead. I guess it's not dead. Maybe that's too mean, David, but anyway.

• 1:17:47David Hoffman?

  It's dead.

• 1:17:48Ryan Sean Adams?

  Okay, but Coinbase is now supporting Lightning.

• 1:17:51David Hoffman?

  You're still allowed to integrate with permissionless protocols even when they are dead.

• 1:17:57Ryan Sean Adams?

  Wow.

• 1:17:59Ryan Sean Adams?

  David, I gotta give you an update on the war on crypto. You ready for this? Yep. All right, so there's three things. The SEC apparently has been trying to make Ethereum a security this entire time. We didn't know it. So they were going to sue Coinbase over MetaMask. And now Coinbase is fighting back. Also, there was this weird ominous warning from the FBI this week. And I want to tell you about that. And the DOJ is attacking the Square and Cash app. So it's these three things. The first is, so consensus versus the SEC. I don't need to get into all the details because we did an entire episode about this with Joe Lubin. And like, I think it's a dynamite episode. I actually re-listened to it this morning. It was really good. It was fantastic.

• 1:18:41Ryan Sean Adams?

  But Coinbase is taking the SEC to court to prove in a court system, US court system, once and for all, that Ethereum is not a security, that it's instead a commodity. And that's really the headline. That's the thing that you need to know. And it seems like from their list of evidence and their court filings, well Coinbase has dug up all of these things about the SEC actually coming after Ethereum developers themselves. Like sending letters to companies that employ Ethereum developers. And like sending letters apparently to individual Ethereum developers, right? So this is all part of a broad narrative that Joe Lubin was painting of like, they're trying to cut off Ethereum, this is the US government, to US citizens, right? That's how high he thinks the stakes are.

• 1:19:25Ryan Sean Adams?

  And I gotta say, after listening to that episode and seeing what else is going on, it kind of seems like that's what's going on here. Also, same week, just like, you know, last few days, the FBI put out this bizarre public service announcement, okay? And I'm gonna just TLDR it. You can read it yourself if you want to. But it's basically like, don't use unregistered cryptocurrency money transmitting services, okay? And they reference a FinCEN database that shows you if the thing that you're using, the application you're using, is registered. And if it's not unregistered, you shouldn't be using it. And they're not real clear on whether wallets are money services.

• 1:20:08Ryan Sean Adams?

  Businesses or code is maybe, maybe not. We don't really know what they mean. They're just issuing a warning to all US citizens to not use unregistered cryptocurrency money transmitting services. Why issue this warning? We don't know, David. We do know that two Samurai wallet developers were arrested last week. What? For having a money transmitting services business, essentially. We do know that the DOJ has filed against tornado cash, the tornado cash developers, and called their code, their immutable code on chain, a money transmitter service. All right, so where does this leave us? With a really bizarre and ominous public service announcement from the FBI.

• 1:20:50Ryan Sean Adams?

  Basically, our nation state's police, internal police organization. To who? To US crypto native consumers? I don't know, but this is kind of creepy to me, and I don't like it. And the last thing is the Samurai wallet co-founder, they pled not guilty. So they're going to be released on a $1 million bond. But the indictment against Samurai wallet, those details were revealed as well. And the justice, so again, this is the DOJ. They claimed that there's been $2 billion in illegal transactions. Illegal, all of them illegal because Samurai isn't a registered transmitter. So basically, everything that went through Samurai was an illegal transaction. But actually, only 100 million was kind of the criminal part. You know what I mean?

• 1:21:35Ryan Sean Adams?

  So the remainder of that $2 billion was actually probably legitimate, like people using this service.

• 1:21:42David Hoffman?

  For privacy, yeah.

• 1:21:43Ryan Sean Adams?

  For privacy, but you know, it doesn't seem like the DOJ cares. They're just bundling it all in here, so.

• 1:21:49David Hoffman?

  Well, of course, if you are seeking privacy, you are by definition a criminal, of course.

• 1:21:53Ryan Sean Adams?

  We are in like weird times, like bad, like really bad times. It does feel like crypto is under this full frontal assault. The tornado cash is one, a case that we got to watch very carefully. There was more updates this week. We don't have time to get into it, but maybe, okay. So here's the last one, David, on the crypto wars.

• 1:22:10David Hoffman?

  Oh, my God, there's more.

• 1:22:11Ryan Sean Adams?

  There's more. Last one, I promise. Square and Cash App are now being investigated for processing crypto transactions linked to sanctioned companies, countries, and terrorist organizations. So this is Jack Dorsey, Square and Cash App. And it's basically similar charges, we don't know the details, to what they just busted CZ for, right?

• 1:22:31Ryan Sean Adams?

  All right, I mean, put all these things together. That's just one week. That's just one week.

• 1:22:35David Hoffman?

  Mm-hmm. I'm reminded of my favorite tweet from Niraj from Coin Center where he says, "I'm sorry, your warrantless surveillance regime was based on the fact that you would always have intermediaries in your financial system."

• 1:22:47Ryan Sean Adams?

  Yeah.

• 1:22:48David Hoffman?

  And but like, they're just finding the next most proximate intermediary. That's not actually an intermediary, but they're finding someone.

• 1:22:54Ryan Sean Adams?

  Yep. It's such a chilling effect. David, do the kids know who Roger Ver is?

• 1:22:58David Hoffman?

  The kids, the kids do not know who Bitcoin Jesus is.

• 1:23:04David Hoffman?

  Roger Ver is basically the Satoshi of Bitcoin Cash, as in, he was the biggest proponent of Bitcoin Cash.

• 1:23:13Ryan Sean Adams?

  Okay, I see what you mean.

• 1:23:14David Hoffman?

  Do you remember, do you remember the whole crying babies meme?

• 1:23:18Ryan Sean Adams?

  Uh, no.

• 1:23:18David Hoffman?

  Oh, no, excuse me, dying babies. Yeah, there was like a, this like rant that Roger Ver went on saying like, "There are babies dying because Bitcoin is not forking into Bitcoin Cash, and we're not accepting eight megabyte blocks into the Bitcoin block space."

• 1:23:29Ryan Sean Adams?

  Big blocker, real big blocker.

• 1:23:31David Hoffman?

  Big, big, big blocker. He was the OG big blocker. Yeah. He's like, super hardcore libertarian. Indicted for tax fraud. He is accused of failing to file tax returns for the sale of his Bitcoin. He, Roger Ver has like, sub $10 Bitcoin, and he has a lot of them. Also, also- Or Bitcoin Cash, actually, now that I think about it.

• 1:23:49Ryan Sean Adams?

  Also, it's alleged in this, alleged in this, across his companies as well, because he's invested in his companies. And it's like, so he, I guess fun factor, maybe not so fun, I don't know, depending on your perspective, he actually renounces US citizenship, and when you do that, there's an exit tax. So, all of your, it's, all of your-

• 1:24:06David Hoffman?

  You have to pay to not, not be a citizen of the United States.

• 1:24:10Ryan Sean Adams?

  Well, basically, it's like, so you have a whole bunch of unrealized capital gains. Say you bought Bitcoin at 10, now it's appreciated a whole lot more. An exit tax taxes you as if you sold them all. Like, when, when you leave the US, you have to pay that. And Iris is saying he didn't pay that. So, they're, they're, they're like, taking him, extraditing him.

• 1:24:29David Hoffman?

  Extraditing him from Spain to the United States.

• 1:24:31Ryan Sean Adams?

  Yeah, extraditing him. There you go. It's Roger Ver.

• 1:24:34David Hoffman?

  That's just some like OG lore. Update on some OG lore. EtherScan, that's a partnership with us. So, there's some news out of EtherScan and Bankless this week. You can now find all of your airdrops on your wallet directly through EtherScan, powered by Bankless Claimables. Pretty cool.

• 1:24:50Ryan Sean Adams?

  Look, this is Vitalik's address. Do you know, Bankless told him, this is on EtherScan. It's always been like, by the way, a bucket list item for me to have like some product, something that we do be meaningful to EtherScan. Because EtherScan is really what made Ethereum real to me and crypto real to me.

• 1:25:05David Hoffman?

  Top-tier infrastructure, yeah.

• 1:25:07Ryan Sean Adams?

  Yeah, it's top-tier infrastructure, but the fact that you can-

• 1:25:08David Hoffman?

  You can't understand Ethereum without EtherScan.

• 1:25:11Ryan Sean Adams?

  Yeah, the fact that you can go to an EtherScan address and see like all of your assets, that was just like magic for me. Anyway, so this is Vitalik Buterin's address, and you know, he's got $7,000 worth of airdrops that he could claim.

• 1:25:22David Hoffman?

  Should I go tell him that?

• 1:25:23Ryan Sean Adams?

  Maybe. I'm sure he knows. I'm sure it's not. Claim your drops.

• 1:25:27David Hoffman?

  Hey, you have $1.9 million in your wallet, but you were missing $7,000 of airdrops, bro.

• 1:25:36Ryan Sean Adams?

  Well, you know, anyone can claim that. The Bankless Claimables app, of course. There's always a link in the show notes. David, meme of the week. Let's end this. What do we got?

• 1:25:45David Hoffman?

  This is a, this is a throwback of a meme. This is how crypto feels this week, and it is, this is for all the OGs who watched Lost way back in the day. I can't remember this character's name, but she's like the preppy girl, and the plane is, has crashed, and there's like debris and fire everywhere, and she's wearing her like pink like shirt, and she's just very sad. And that's, that's your first crypto cycle. And then, four years later, you are sun tanning on a beach in the middle of all that debris and all that fire, because you're just used to it. That's, that's what we're working, that's what we're working in crypto cycle.

• 1:26:19Ryan Sean Adams?

  Is that, is that the way you feel? Now this is your-

• 1:26:22David Hoffman?

  Yeah, right, like, you know, mob attack, right, right before the gym. Yeah, it's like a normal, normal Tuesday, normal week in crypto. Yeah.

• 1:26:28Ryan Sean Adams?

  Yeah, you know, another SEC lawsuit, another couple developers get arrested, just a, just a normal week.

• 1:26:34David Hoffman?

  Yeah, and then you go get drinks with friends and call it a day. Yeah.

• 1:26:37Ryan Sean Adams?

  Oh my god. Crazy times we live in. What a crazy industry. I wouldn't be anywhere else. I don't know about you, though, David.

• 1:26:42David Hoffman?

  Completely ruined.

• 1:26:44Ryan Sean Adams?

  Too much fun. Too much fun.

• 1:26:46David Hoffman?

  Not going back.

• 1:26:46Ryan Sean Adams?

  Alright guys, we gotta end with this, of course. Risk and disclaimers. Crypto is risky. You could lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the Bankless journey. Thanks a lot.