Anthony Sassano & Eric Conner | Luna Demise, Bear Survival, Bullish ETH Merge

Anthony, Eric, and David dive into the downfall of Luna, takeaways from this week, bear market survival, and why they're bullish on the ETH merge. ------ 📣 OPOLIS | Sign Up to Get 1000 $WORK and 1000 $BANK https://bankless.cc/Opolis ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: ⚖️ ARBITRUM | SCALED ETHEREUM https://bankless.cc/Arbitrum ❎ ACROSS | BRIDGE TO LAYER 2 https://bankless.cc/Across 🏦 ALTO IRA | TAX-FREE CRYPTO https://bankless.cc/AltoIRA 👻 AAVE V3 | LEND & BORROW CRYPTO https://bankless.cc/aave ⚡️ MAKER DAO | THE DAI STABLECOIN https://bankless.cc/MakerDAO 🦁 BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave ------ Resources: Anthony Sassano https://twitter.com/sassal0x https://twitter.com/thedailygwei https://www.youtube.com/c/TheDailyGwei Eric Conner https://twitter.com/econoar https://podcast.ethhub.io/ ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures

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

• 0:10David Hoffman?

  Yeah, Anthony, what's up?

• 0:13Speaker 01

  Hey, man, what's up?

• 0:15David Hoffman?

  You know, survived another week. How about you?

• 0:19Speaker 01

  Yeah, yeah, survived another week. I think my brain didn't survive the week, though. I don't know about you, but I am feeling very mentally exhausted. That's for sure.

• 0:28David Hoffman?

  What's doing it to you most? It's like Twitter doom scrolling? Usually my doom scrolling I do on Instagram, not on Twitter.

• 0:36Speaker 01

  Really? Instagram doom scrolling? That's uh, my Instagram is just like random pictures of kind of like computers, watches and cars. So it's not doom scrolling. It's kind of like wealth scrolling.

• 0:49David Hoffman?

  Poor timing, dude.

• 0:52Speaker 01

  Yeah, yeah. That's really poor timing. No, no, I think um, I, I, I think what, what did it to me most was just the speed at which it happened. Right? We basically ran through like a crypto's 2008 moment in like three days. It was just insane, right? And I think that's what fries my brain the most is when like, and it's especially happened during like the five summer a lot when things would have just happened really, really quickly, right? You, you spend like all this mental energy trying to keep up and just catch up. And then you would just get like completely blown out by it and then you do it all again the next day, right? So yeah, it's just the speed of it, I think for me.

• 1:24David Hoffman?

  Yeah, it's, it's a, it just reminds me of like the classic line when people are hung, hung over and they're like, I'm never drinking alcohol again. And then a week later, there's just like another farm to like ape into. Like that, that's what, what deep summer felt like. If we're, if we're doing the whole like crypto is speed running the history of money and finance thing, we just like sped, sped ran like had a hyperinflation event, right? We went through like usually hyperinflation events take, I mean, it can take months, right? But this one took like 36 hours. Uh, like we did just like Weimar Germany in like 36 hours.

• 1:58Speaker 01

  Yeah, exactly. And I think that's what I think shocked a lot of people. It was like, yeah, a lot of people called this and kind of like had been calling it for a long time. But I don't think anyone expected it to unwind as fast as it did. Like, it literally went, like, I mean, what, the Luna token went down like 99% in 24 hours or something? That was just insanity, right? It wasn't just like some small shitcoin either. It was like, it was worth tens of billions of dollars. It was a top 10 coin. And then it just collapsed and we're and everyone's just like trying to keep up with it. They're trying to keep up with kind of like, I think they're in disbelief because they're trying to actually process the fact that this is actually happening. Like, this is actually happening. This is not a meme. Like, this is not kind of some dream that everyone's having.

• 2:38Speaker 01

  It's an actual reality that we're all going to have to adjust to. And of course, that bled into the wider markets. It wasn't just Terra. Like, everything came crashing down. And then people were trying to short the other stable coins, which was like peak stupidity. I was like, what the hell? Like, what is this? So, so yeah, just absolute insanity, man. Seriously. I, I, I think that I'm still going to be processing this for a while. I mean, it was my craziest week in crypto. I don't know about you, but definitely I haven't felt like that before in crypto.

• 3:03David Hoffman?

  Yeah, I was thinking about that question. Is this the craziest week in crypto? And it's, it definitely is in a like catastrophic sense. I would say that like crazy as in just like I'm having to process so much with still, still DeFi summer. But yeah, barring that, which is like a completely tangential thing. Yeah, I would say like this, this had like the most amount of just like news per hour of any single week. And like comparing it, comparing it to like last, last year's cycle, like oddly also in 2018, right? Like 2018, the downside of the peak mania halfway through 2018 ish is when Bitconnect blew up.

• 3:45David Hoffman?

  And like, I think Bitconnect was a top 10 coin, like at one point in time.

• 3:49Speaker 01

  It was.

• 3:49David Hoffman?

  And it went to absolute zero at some point in time. And it took, it took basically like 36 hours. But like the, the reason why no one really cared about that, well, people cared, but we all just expected it. Everyone was like, Bitconnect took way too long to implode. Like, it made people like. Question reality is like, why hasn't this thing imploded yet? Uh, and then one day there was some bad news and three days later it went to zero. Uh, and so like the pattern fits and it was a top 10 coin. And then it just went to zero. Uh, and it was 3.8 billion dollar market cap when it went to zero. Which just A like tells you how big the crypto market has gotten in the last cycle.

• 4:30David Hoffman?

  Because if like Terra was also a top 10 coin, it went to zero and it was something like over 40, it was like 42 billion dollars at the time Luna was. Uh, and so like the scale of the thing is like proportional to the crypto markets as in like the crypto markets. Allowed Bitconnect and Terra to get to the same size. Uh, as a relation of the total crypto market and then it also went to zero roughly around the same time of the peak. Right? Like as the markets were fleeing, as like the game was up, as like the dance of chicken was like, all right, who's gonna sell, who's gonna sell? Uh, and then like, you know, roughly halfway through 2018, Bitconnect crashed and roughly halfway through 2022. Uh, Terra crashed. I mean, those are the patterns I'm seeing.

• 5:14Speaker 01

  Yeah, yeah, no, the, the patterns are definitely very similar. I think the main difference, as you mentioned, is like the scale of it. Like obviously Terra was much bigger, but I think it wasn't just like the Luna token. Terra was like a double whammy, right? Because like there was the Luna token, but there was also the stablecoin that was attached to it, right? And then on top of that, there were all the people going through these kind of like neo banks, which are like front ends for, for Terra. That had no idea what they were doing. They just saw this APY number like, oh, I can earn 20% of my dollars. I'm gonna put it in here, right? Um, and then they didn't read the fine print because if you read the fine print, it says you can lose all your money potentially. Cause that's just, you know, classic legal speak. No one ever expects that to actually happen, but it happened this time. And I think that that's what caught a lot of, a lot of people and obviously a lot of people have lost a shit ton of money.

• 5:57Speaker 01

  I mean, not just individuals, um, not just kind of like everyday people, but massive funds and, and, and kind of like. Uh, prop trading firms and market makers like, uh, there, I mean, I think that like most people in crypto were hurt by this in one way or another. Um, everyone was, was hurt by it indirectly because the prices went down because of this, I think. Um, but yeah, it was just such a shock to the system, I think. But the thing is, is that just kind of looking for positives in this. I think ETH fared quite well, like in, in, in it all. Um, I don't know, so far at least. I think that, um, the Ethereum has gotten a lot of tailwinds from this. Uh, I think like, and, and, and I think that. You know, the people that have kind of like been hurt, maybe they're not going to come back to crypto for a while.

• 6:41Speaker 01

  Especially the ones who were just like in it for for the yield, they weren't even maybe holding Luna, they just had like the U S T. And that's sad, it's kind of like set adoption back a kind of kind of kind of quite a while there. But it really does validate like the Ethereum thesis, I think, of building, you know, decentralized, secure and sustainable kind of infrastructure, rather than just doing it in a cowboy fashion. And I remember, I don't know if I've said it on bankers before, but I've said it on my own show plenty of times, where I say to people, you have to reframe the decentralization argument as security. So instead of asking, do you care about decentralization? You ask, do you care about security? And now you ask any terror people about this question now, they're going to say yes, right? But if you ask them if they cared about decentralization before, they may have just given you a non answer and not really paid attention to it. But you know, no one cares about it until they need it.

• 7:26Speaker 01

  And then when they need it, they really, really need it, right? So I think that's the main takeaway for me from all of this, that's for sure.

• 7:32David Hoffman?

  And this has been the drum that has been beat by like a number of like core crypto people for a very long time. Like this was a conversation back in 2017, 2018, when it was EOS and the zero transaction fees of EOS versus like the trend, the blockchain fee model of Ethereum. Right? Like we've, we've seen this rodeo before. I was actually talking to, there's also like this whole prioritization of scale over security, both works at the layer one layer and also the app layer two. Right? And so I was talking to our guy, our analyst at Bankless, Ben, and talking about the patterns here. And I said, like, die supply always lags die demand, which is like the, it's, it's there.

• 8:12David Hoffman?

  If there is demand of die, it'll prop up the value of the stablecoin and then people will mint more die, but with real collateral. And so like die only scales out its supply of die if there is actual real bona fide demand of die. And like in the same thing with like Ethereum, this block space demand for Ethereum lags behind demand. Right? So when there's, when transaction fees are high, it creates the need for layer twos, it creates the need for scale. But it doesn't, it doesn't answer scale first, right? And neither does die, die doesn't mint excess die and then give it to the market. Market Ethereum doesn't mint excess block space and give it to the market. These things lag demand because they prioritize security.

• 8:53David Hoffman?

  Uh, but then on the flip side of things, the Terra U S T supply, they just minted that thing like, like fucking mint, mint, mint, mint, mint U S T, buy Bitcoin, buy Bitcoin, like short, like and without creating any amount of demand. And this is what Solana is doing when it's minting infinite block space. It is just the money printer block space and it causes the chain to go down over time. And so these like bull market chains, which is like my new word for monolithic blockchains. These bull market chains are just minting out supply, selling their product for a discount, devaluing their product because that's the competitive advantage. They're like the off brand blockchain. So they're devaluing their products and just like injecting into the market, say cheap, cheap, cheap, buy it, buy it, buy it.

• 9:34David Hoffman?

  Uh, but then when the bear market comes, like they have no real sustainability and they have like infinite supply. Uh, and so like the, the, it exists in the app layer, it exists at the core protocol level. And like in, in hindsight, it just makes total sense that things that devalue their product to go out to the market can't sustain themselves in a bear market.

• 9:53Speaker 01

  Mm hmm. Yeah, well, exactly. And I think that's why like our, maybe our points fall on deaf ears a lot of the time during the bull markets is because this is, this is stuff that it's not immediately apparent to most people, especially new people. They've got no idea for the context around this. They haven't been around, they haven't experienced, uh, you know, a bear market or anything like that. To them, it's kind of like all the coins are going up, you know? And, and if you say anything against that, you're just a dirty fada, dirty ETH maxi. We don't want to listen to you sort of thing, right? Um, and that's what exactly what happened with you. I mean, you guys, uh, you and Ryan, um, were some of the champions of calling out Terra, right? Like the show that you did just a few weeks ago, um, and everything like that. And you guys were called out relentlessly for it, especially by Dodo himself, right?

• 10:36David Hoffman?

  Like my, my emotions, I felt that.

• 10:39Speaker 01

  Yeah, yeah, exactly. And you know, this is one of the reasons why I try not to get too involved with it as well is because I don't want to have to deal with like all that crap, even though I know that, um, you know, I'm, I'm, I'm right. I don't want to have to kind of like deal with the, the crap that gets swung at me. And then, yeah, just seeing you guys go through that. I was like, holy shit, this is insane. And I think that's what a lot of people miss is that we're not like now that everything clubs, we're not dancing on the graves of people who lost money. We're dancing on the graves of Doquan and his lunatic army who literally didn't listen to anyone. You know, kept insulting everyone who ever brought up anything wrong with the system and acted like kings and gods and nothing could, you know, I think nothing bad could happen to them. Um, and, and, and that's it. Like, yes, it may be, it may be a little bit too much, but I think,

• 11:21Speaker 01

  I think social signaling is very, very important in here because that's the only accountability and recourse we really have in crypto is social signaling. Because there's no, I mean, the government might go after Doquan himself, but there's no government to bail out anything here. Like, they let, everyone let Luna go to zero and U S T basically go to zero because there's no bailout. Like who's going to bail them out? The only bailout comes from the private enterprise and eventually the private enterprise was like, no, no, no, man, this is too toxic. We're not going to touch this, right? Doesn't matter if, if, if it was quote unquote, too big to fail or something. There's none of that in crypto. Things will, will fail and they'll fail very, very quickly. And I think to prevent this sort of stuff happening in the future, you really have to social signal. You really have to get everyone on board with this. So next time there's a algo stablecoin that comes out, you have everyone calling it out, right?

• 12:04Speaker 01

  Like there was people calling Terra out, but it wasn't the majority. And a lot of people were scared to call it out because they had this massive army that would swarm you as soon as you did. So we need to break past that. Like if we let that dominate the industry, then this stuff's just going to keep playing out again and again. And as a lot of people have already mentioned, it's going to bring with it a lot of bad regulation, right? That's, and it's going to, uh, set crypto adoption back years. So, I mean, again, kudos to you guys for calling it out for so long and, and, and kind of like putting up with all that crap. Because that's not something that I really, really, uh, can do. Like I really hate, I, I try to avoid conflict most of the time. Um, with these, especially with these armies, man, they just come from nowhere. I don't even know, I don't think a lot of them are real people. They have to be bots, right? Like it's just insane.

• 12:43David Hoffman?

  Supply, yeah. And the bots have to like find real people to convince themselves, like mix themselves in with the rebuild, real people. So the bots can be like, or the bots, not the necessarily bots, but just like the civil attackers, right? Just like one guy with like 10, 15, 100 accounts or something like that, which you would consider bots. Um, like, Well, I think there's two things I want to say to that. Like, there also, there were a lot of like VCs that were very much a part of this whole thing. Like, at some point, there's like so many people ended up supporting this ecosystem that you just have to say that they were duped. Like, it's like some people just like took the Kool-Aid, so like Algo stablecoins, they work this time. Like, this time it's different, like that funds in it and this funds in it, so like I'll be in it too.

• 13:26David Hoffman?

  Like, we're all promoting its legitimacy, even though like at the base layer, like there's like a bunch of like hot air here. And, and I had a, I did a podcast with a VC who talked, and I asked about like, okay, what are the fundamentals of VCs like as a concept? It's like, why are there VCs? And one of his answers was that like, well, VCs provide legitimacy, right? And so like when you, when you onboard with a VC, when you take money from a VC rather than a bunch of angels, that VC has network connections, that VC can do things for you, like the best VCs create the best premium because they have the best returns. And so the competition is based on what VCs can provide the most value to, blah, blah, blah, blah. And so like if we're talking about like the fallout collateral damage of these things, like the market needs to reassess the value of various VCs in this industry.

• 14:12David Hoffman?

  Because some VCs were on one side of this trade in this industry and the other VCs were not, right? Like Fred Arisim from Paradigm tweeted out the, um, the guy from the, the 2008 crisis movie, The Big Short. And who's like the, uh, I can't remember his name, the guy that also was in the GameStop.

• 14:26Speaker 01

  But Michael Berry, I think his name is, played by Christian Bale in that movie.

• 14:30David Hoffman?

  Exactly, yeah. I like, who knows if they like were actually short or are they just tweeting out a meme? I don't know, but it kind of implies that they were taking the other side of this trade, as in shorting Luna. And there were some VCs that were very much in promotion of it to the point of shilling it, right? Like, as some of these VCs do. And so like we need to like reassess which VCs were on like the right side of history. And especially Tarun Chitra, uh, which is actually where I was going with this next. He had, was on, um, the Laura Shin's like, um, All In styled podcast. And he talked about how people that make Algo stablecoins just inherently must have this god complex. And they don't look at history and they just.

• 15:10David Hoffman?

  Your history and they're like, I've just created alchemy. Like I am the stablecoin god. I can mint coins out of thin air. Like, look at this magic. I'm like a billionaire. I will bet on like the future price of my token in a $20 million bet that I make on Twitter. Because I'm a fucking Chad and if anyone denies me and if anyone doubts me, like I'll just like throw my stablecoins at you. Uh, and like this is Do Kwan, man. And like he, I'll go stablecoins and I'm getting, I'm learning about this too in like the last week. So it's not like I knew this ahead of time, but like the whole algo stablecoin thing. Is the same thing as like the Zimbabwe dollar. It's the same thing as Weimar Germany. It's just a straight up hyperinflation event sped up in real time. And Do Kwan should have known this because he did basis cash on the app layer.

• 15:54David Hoffman?

  But then like it's because it was on the app layer, it failed. And so he had to go make an L, a separate L1. So it couldn't be economically attacked by flash loans or all that other shit or whatever. Uh, and then he just starts playing god, right? Uh, and so like, there's so much like hubris and status and legitimacy that's involved in these things that are inherently faith based at the end of the day. Anyways, end rant, end rant.

• 16:16Speaker 01

  No, no, I, I mean, I, I think, I think from all of that, the main takeaway for people should be that. Just because someone is a VC or is a fund or works at a fund or whatever and has money, doesn't make them more intelligent than you, right? There is no, there's not much correlation between money and intelligence. That's, that's one thing I've learned, definitely being in crypto the last few years. There are billionaires who are really dumb, like, and that might, might seem counterintuitive. You might think just have, how can a billionaire be dumb? Well, put it this way, guys, crypto has created so much wealth in such a short period of time. There are people that could have become billionaires by literally just throwing, you know, maybe, uh, six figures into either the ICO, for example, right?

• 16:53David Hoffman?

  There's also a difference between like, uh, like intelligence and ability to make money at the same time.

• 16:59Speaker 01

  Yeah, yeah, yeah, yeah. Exactly. So I think, um, you know, that, that should be like one of the main, main takeaways from this. And also. These things can, can go on longer than you, than you think they can. I mean, you know, the, I think the reason why, uh, that picture was shared of Michael Berry on, on Twitter. Well, one of the reasons, I don't know if that was short or not, was that in the movie, it shows how Michael Berry was. Against the housing market really early on and the housing market kept going crazy, right? And and he was betting against it for such a long time and everyone was calling him out. They were saying, man, it's still growing. Like, what are you talking about? This is crazy. Like, this is a crazy trade. You're pissing away our money. Uh, and then the same thing happened here where people were calling this out for a very long time. And then it kept growing and growing and growing. And everyone was like, oh, okay. Well, it's gone to such a big size now. It's too big to fail, right? Like, it's it's not gonna fail. It's all well and good.

• 17:45Speaker 01

  Um, and then people were waiting. They were like, no, it's gonna fail. Like, we're gonna get our dues eventually. Like, it's it's basically mathematically programmed to fail, which it was. Um, and it did. It failed exactly how the bears said it would. It didn't even deviate from that because it it was programmed. Like, all you needed to do was read the white paper to see exactly how this worked. And it did that. And and the funny thing is, though, is that the Terraform Labs, uh, the main team behind Terra, could have wound this down a lot, uh, kind of like, um, a lot more gracefully than what happened, right? They did nothing. They actually let it go to zero. They could have paused the chain. They could have paused minting. They could have done all this other stuff, right?

• 18:21David Hoffman?

  And they didn't have any contingency plan. They had no idea this could happen.

• 18:25Speaker 01

  That's what I'm saying. Like, so that that's that's that's kind of like we were talking about with with Doquan and kind of like him feeling like a god and him feeling like nothing would go wrong. And he was like, you know, had all this alchemy. He could just print money out of thin air. They had no plan for when everything went to shit inevitably. And because of that, everything went to shit. Like, it went to, it actually went to zero. Like, CoinGecko did one, a minus one hundred percent on, um, on on Luna, because it rounded it to the nearest zero, which was zero. Um, I was like, what the hell? This is crazy. Um, but yeah, no, I I think that it's right. And the thing is, is that you talk about kind of like people not learning from history. Um, yeah, I mean, the Algo stablecoins within the crypto context actually went back really far. I think as far back as 2014 or even earlier than that, right?

• 19:07David Hoffman?

  Even before Ethereum was a thing.

• 19:09Speaker 01

  Yeah, exactly. So this is, this is definitely not new. But the thing is, is that these things are very easy to grow in a bull market when everyone's throwing money at you. They're very reflexive on the upside as well as to the downside. And, uh, you can easily kind of like pump your token like this, right? And and make it work for a little bit. So I think because of those facts, this isn't going to be the last of them that we see. They're gonna take other. Forms, people are gonna be like, oh, it's not like the other algo stable coins. This one's actually gonna work, right? And it's not, and we're just gonna see this play out again. But that's why I said the social signaling is so powerful. Because you keep signaling that these things, you know, they can't work. They're they're just kind of like fundamentally broken. More and now more people will believe you when you say that, because it's not just crying wolf anymore. The wolf came to fucking eat the chickens, right? And it ate a lot of chickens.

• 19:55David Hoffman?

  I don't know. There was like the the optimistic cautiously optimistic take that like, okay, when the fifty billion dollar algo stablecoin ecosystem goes to zero. Then we learn our lesson like we won't learn it at ten billion dollars. We won't learn it at twenty billion dollars. But okay, at fifty billion dollars, we'll learn the lesson. How do you feel about that?

• 20:13Speaker 01

  Have have we learned the lesson? Because there's gonna be new people coming in who haven't learned this lesson at all next cycle.

• 20:18David Hoffman?

  I did say that, like, okay, the last bull market, we did have like a top ten coin do the same thing. It was an actual Ponzi. Yeah. That is one of the differences about this whole Ponzi collapse is that like this one was pumped by a lot of just like ecosystem people. I mean, as you and I pump ETH, but like at least he doesn't blow up, though. Like, we pumped the thing that stays around.

• 20:40Speaker 01

  But I mean, also, like, atheists can't just go to zero like that at all. I mean, ETH has fallen a lot in the past, but it can't do that unless it was like. I mean, I don't even know the scenario where ETH would go to zero if unless there was like an infinite mint bug, but then it would just get reversed.

• 20:54David Hoffman?

  We would fix it, right? And like, that's what you were saying about like the the Terra ecosystem could have mitigated this. And like, yeah, if even in worst case Ethereum scenarios, like we can still mitigate that.

• 21:03Speaker 01

  Yeah, exactly. And and the funny thing is, is that you're right, they would have had no plan at all. Like, they should have had a worst case scenario of plans like, hey, guys, like, what happens when it goes into a death spiral? But I I truly believe that Do Kwon and probably his closest kind of like people within the company didn't believe that it could death spiral. They actually believed that they had created something that was basically a perpetual motion machine, an infinite money printer. And that obviously wasn't the case. And I think his ego is infinite. Like, I actually don't think he's learned his lesson. I've been seeing his tweets. He's not remorseful. It seems like he just wants to try and get it back up and running and kind of like, you know, restore his god status. Yeah, and do it again, right?

• 21:41Speaker 01

  But it's not gonna happen. It's the same with every other one that we've seen, like Daniel Sesta, right? You guys called that out as well, the Frog Nation crap, like same thing happened there. Much others. Andre Cronje is a bit of a different scenario, but he eventually got to that status like, you know, but but he is a bit of a different scenario. Yeah, it was it was definitely adjacent, but there's so many of these things, right? And and I think that people just need to stop creating cults.

• 22:08Speaker 01

  Let's stop creating cults of personality around these people, guys. Like, it's just, it's not healthy, it doesn't lead us anywhere good. Um, but yeah, man, like, I don't know, craziest kind of like week in in crypto for me just because of the speed and and, you know, just the the mental kind of like mind fuck of it all was just insane. And I think the legitimacy thing is the last thing I wanted to talk about. You're right in that, like, I think what ended up happening was that because it kept growing and because it didn't fail like it's the track that said it would for such a long period of time, at least in crypto, you know, a year is like an eternity, right? And and and then all these kind of like VCs and funds and legitimate people piled on because I think it was partly due that they didn't want to miss the train, but they also didn't want to get kind of like

• 22:49Speaker 01

  attacked, right, for going against the grain, because they're like, oh, you know, as as we're discussing, it's really hard to put up with this sort of stuff. Like, it's actually, it makes you feel really bad. You feel it when you're getting attacked by this mob. So I think a lot of them either defaulted to just being neutral and not really saying anything about it, or going in on it and being like, I can join this train too, I can make money, I can, you know, have everyone loving me because of it. And the people that did that, they've, yeah, they're they're like massive, kind of like, uh, taken massive reputational hits here. And I don't know, like, I think they're going to be the most affected by it in the long term because the people in this industry know those people and they remember things, they keep the receipts, right? And they definitely don't let this slide. But on the retail side of things, yeah, I mean, I don't expect the the the retail investors to to

• 23:33Speaker 01

  learn too much about about this sort of stuff.

• 23:36David Hoffman?

  Yeah, you did mention about how this was gonna set us back and like hinted at regulation. So I want to, I want to talk about that next. But before you do, guys, every now and then I pull my friend Anthony here into a livestream. Every Friday, sometimes Thursdays, it used to be consistent, but that was during COVID. And since non-COVID, it's been a little bit harder. But every now and then we do this, I'd say about once a month, maybe once every six weeks. Uh, I don't know if you guys are living under a rock in it, but if you are living under a rock, you can follow Anthony at his Daily Gray YouTube channel, which I just posted in the chat there. He does these YouTube videos a ridiculous amount of days, almost every single, every single day. Uh, except for Sunday.

• 24:10Speaker 01

  Every single weekday.

• 24:11David Hoffman?

  Every single weekday.

• 24:12Speaker 01

  No, not Saturday and Sunday. Yeah, just weekdays.

• 24:14David Hoffman?

  I ask you that every single time because I always forget. Um, but like I, there's one of the few podcasts that I listen to every single day. Uh, and his YouTube channel is right there. He also does a daily great newsletter, which he puts out also every fricking day. Uh, so he's one of these guys that produces a lot of content like bankless, which you can also go ahead and subscribe to. Uh, okay. I've gotten better at this, by the way.

• 24:33Speaker 01

  The shilling is done.

• 24:37David Hoffman?

  Okay. So how far is this going to set back our industry and regulation? I think those are the, perhaps the topics next. People, I've heard this line that like, okay, it set back the crypto industry like one to two years. Uh, like, and I think my gut take was like, oh, wow, really? That's seems like a long amount of time. Um, so first question there. Also, I'm kind of down for that. Like, I'm kind of down for a slow bear market. Like, how do you feel about these things?

• 25:04Speaker 01

  Look, the timeline on it is basically impossible to say. Like, anyone giving timelines on this sort of stuff is just guessing, pure guessing. There is no rhyme or reason to any timelines you could give, right? Because, for example, we could go to all time highs again and the adoption would pick up like exponentially again, right? Because I think the main thing that drives adoption in crypto is prices going up. Like, we have enough evidence to support that. So I don't think you can actually put a timeline on how long this is kind of like, quote unquote, set adoption back or anything like that. What I think, um, is, is true here is that it has set adoption back in the sense that it's going to suppress the prices for a while. It's going to put us into this deep bear market and it's going to bring with it more regulation and increased scrutiny, scrutiny,

• 25:45Speaker 01

  which is going to make teams probably ships slower because of the fact that they're going to be more scared to ship certain things due to regulations, due to, um, kind of like law enforcement and things like that. Uh, and we're probably going to get less innovation out of that too, because everyone's going to be scared of, it, does this look like a Ponzi or does this look like, you know, terror? Can I get in trouble for this? And this is probably most true for the docs teams. Maybe the anon teams keep kind of doing what they're doing. Um, and I think that people are going to be cautious about jumping into these things for a while as well, because they might be like, you know, is this going to blow up like terror again? Like, I don't want to put money into this. I don't want to lose my money. I don't want what happened to, to terror folks to happen to me. So th- those are kind of like the effects that I see happening, but timelines, I don't know. It's impossible, man. Like, I don't think anyone can give a timeline on this sort of stuff.

• 26:28David Hoffman?

  Yeah, but how do you feel about that being a good thing or neutral thing or bad thing? Like, I think the gut take is like, oh, it's a bad thing because we want crypto to take over the world. But taking the perspective of like a first cycler, especially perhaps a first cycler that just got hurt, right? Like, maybe they were in Bitcoin and ETH and they only have seen a 65% drawdown instead of being in Terra or being 100% of drawdown or in an alt layer one and being at 85%. Like, for the first liker out there who's like looking at crypto prices being like, F, I'm pro good thing for that part of the population.

• 27:05Speaker 01

  Yeah, I mean, I mean, most first cyclers are already gone, I think, like, they leave, right? I mean, in terms of kind of like, if they're, if they're here for like a first cycle and they just kind of like speculate and they lose money and they leave, right? But i- if we're talking about like first cyclists who actually stick around and wait for the next cycle to come around, I think they're like, from my experience talking to some of them, they're actually very excited, right? They're very excited because they're going to be able to buy things at a cheaper price, of course. They're going to be able to scoop up some value, kind of like out there, right? And they also, I think, have the same belief that I have in that this industry isn't ready for mainstream adoption, dude, like nowhere close, right? I'm sorry, but like, there are so many issues with what we're building still.

• 27:45Speaker 01

  The scale issues is a major one, UI UX, like, I'm sorry, but like, how are we ready for mass adoption? I mean, you know, Paulina actually goes on about this a lot and he's, and they're pretty steadfast about this, but they say they're still very disappointed in this industry because we've built so many Ponzi's and so many money games and things like that, but we're not actually building anything that's mass adoptable because we're still waiting for scale, right? And that's, that's here and coming and improving over time. We're still building out the core infrastructure, still upgrading things, blah, blah, blah, still getting Ethereum through the merge and things like that. But like even on the UI UX side of things, like it's still very hard. And, and the funny thing is that where we were making progress on this with the neo-banks, a lot of them just went to Anka because that was the top yield and they've wrecked their users, right?

• 28:30Speaker 01

  So, like, it was getting better and now we've kind of like been set back by that a little bit. And regulators are definitely coming for those neo-banks. They're, they're fucked. Like honestly, like this is anything that that that kind of like does that and sits as a front end on top of things. It doesn't actually make the risks like readily available to users is fucked like in my eyes.

• 28:48David Hoffman?

  Yeah, and and they should be regulated, right? Like, like, if they're a centralized entity, if you can be regulated, you should be regulated. If you can't be regulated, then you shouldn't be regulated. And this is a very fair take because a ton of like, like you said, layers around Anchor just like F'd a lot of people who put in deposits thinking, wow, like 20% savings account, amazing, take all my money.

• 29:10Speaker 01

  Mm hmm.

• 29:11David Hoffman?

  Uh, and like, you know, like, some people are good, a lot of people are gonna get sucked in by that. Um, where was I gonna go with this? Uh, going back to like the whole first cycle or like prices thing, like the ones that stick around. There's this very savage quote out of the Bitcoiner camp that I like, uh, what's the word? Schadenfreudingly love, uh, which is, um, uh, people buy Bitcoin at the price they deserve it, which you can extrapolate that to Ether, right? But like, uh, it's basically a timing in the market as in just like people who got in early deserved it because they saw the vision early. But also if we're going down into a bear market and, uh, people are like, you know, losing their wealth because it's their first first cycle and they're getting hurt.

• 29:52David Hoffman?

  But they stick around, like they're gonna buy Ether, Bitcoin, their preferred asset at the price that they deserve it, right? Uh, and so, uh, it's great to hear that, like, people are coming into this bear market like excited, uh, especially when there's like, so like, I think we're in the golden age of building right now. Uh, the the layer two summer, which is not at the sound of things going to be like a price summer, but it's going to be a building summer, is perfect. If we have the golden age of building on layer twos, which is literally surface area for further, it's like surface area for high growth DeFi apps with tokens and user acquisition onboarding, uh, capacities because of low fees.

• 30:31David Hoffman?

  Uh, if that golden age of building happens during a bear market, it means the people that stick around and believe just have this opportunity for, I don't know, how many years are people saying this Terra thing is going to set us back? One to two years. Uh, and so we're gonna have like the golden age of Ethereum building because people can't fucking. Like differentiate Ethereum from the rest of DeFi. And so like the people who have that information asymmetry about the secure, sustainable layer two app layer building, which also has bridges in between those things. So there's surface area there to build stuff as well. Like there's going to be so much opportunity while people just forget about the crypto industry once again, as they do every four years.

• 31:13Speaker 01

  Yeah, yeah. And I think the reason why, at least the first cycles that I talked to are so excited is because like, I've given like my personal story many times in my community on my show about how like I stuck around, I doubled down during the bear market. And like, not just myself, but like so many of the people that you see that are really successful today did the same thing. And I give like the reasons why it's like really good to do that and why kind of like it can work out for you. It's not guaranteed to, but like it can work out for you and why you should stick around. And I think that's why they're just so excited, right? Like some of them obviously are going to be underwater on their ETH buys already because maybe they got in later and they bought it like 3, 4K. Yeah, exactly, exactly. And I explained that to them. I'm like, and I put a percentage number on it because I say to them like, hey,

• 31:55Speaker 01

  you know, if you bought at 4K right now, and it's sorry, 4K back a few months ago and the price is 2K now, you're down 50% of course, right? And I say to them, I did the same thing in October 2018 where I bought ETH at $220, thinking it was the bottom. And then ETH went into $80. So I was down more than 50%. And the thing is, people don't realize the intuitiveness of kind of like the numbers and the percentages. Like just because the numbers are much smaller, it doesn't mean the percentages were different. Like it's the same thing. It's the same amount of money lost. So, so kind of like from that perspective, I think that's what my, my viewers and my listeners, people kind of like who are in my community are really, um, are really paying attention to that sort of stuff. So that's why they're excited about it.

• 32:36Speaker 01

  But I think there's not many of those people, like the majority do not stick around for the bear market. They leave and they come back and they regret it. They're like, oh my God, why did I leave? Right? So I think there's a lot of that going on, definitely. And no, I, I think that's exciting for those people. I, you know, I hope they do stick around. Like they get jobs too. Like a lot of them are getting jobs within crypto, which is something that a lot of us couldn't do back in the day because there wasn't that many jobs to go around. But now there's heaps, right? Yeah. So, um, you know, I think it's exciting. Oh, my camera's gone out of focus. Oh, we're back, we're back.

• 33:06David Hoffman?

  Yeah, yeah, the differences between these bear markets, I think, are very, very stark. So much more surface area to build stuff. Like, going back to the 2017, 2018 bear market, as when I started this, when I decided that, like, I'm gonna be in this crypto thing. Like, I can't remember why I was bullish about Ethereum. Like, there was nothing in 2018 that was, like, worthwhile to stick around for. Like, DeFi wasn't a thing, NFTs weren't a thing. And, and like, why the hell did I stick around? I don't really know. But that lends itself to, like, people, those, people buy crypto at the price of their choice. People buy Ether at the price that they deserve it, right? Like, there are the people that stuck around, saw, saw the potential.

• 33:47David Hoffman?

  And so, like, Ether is a little bit higher now, but like, the amount of surface area and jobs and, and just cash that is in this ecosystem right now, because there's been a ton of money being raised. So like, there's gonna be a lot more jobs and a lot more room for jobs for people to come into this market and stick around, and then actually just buy the dip for two years straight. Hopefully not that long.

• 34:08Speaker 01

  Yeah. Yeah, yeah. No, I think in 2018, there was a spark, basically, like a small, little, kind of like spark that we all kind of potentially saw. Like, there's something here. We don't know exactly what it is, but there's, there's definitely something here. And I now, I think in 2022, there's a raging wildfire. There's no spark. It's kind of like, we know what's here. We know what we're gonna build. We know what works. We know everything that's coming. Well, not everything, but we know, like, you know, what we're building, what we're doing. And I think that's the, like, a key difference. But yeah, also the fact that it's just much easier to get a job now. So more people are gonna stick around for that. Like, 2018 was basically impossible to get a job in crypto.

• 34:42David Hoffman?

  It was so hard, dude. I was lucky enough to get three jobs in crypto and two of them blew up after like six months.

• 34:48Speaker 01

  Yeah, exactly. Yeah, yeah, so, yeah, exactly. Okay, there was getting a job and then there was getting a sustainable job, right? One that didn't, wasn't gonna run out of money or blow up or anything like that. I mean, I got my job in mid 2019 with, with kind of like, sets. And they hadn't raised, I think, since their first raise or whatever, and they, they kind of needed to raise, but the market was like, super quiet. And then, you know, all that, the rest is history from there. But yeah, joining a crypto startup back then was much riskier than it is today. Like, today they have so much money. Like, it's just stupid amounts of money, right?

• 35:16David Hoffman?

  And real products and real customers. Like, these, these are the differences here.

• 35:20Speaker 01

  Yes, exactly, exactly. So I think, you know, the first cycle was this time around are gonna have a way easier time than than than we had, but that's good. I like that. I I don't want to. Yeah, I don't want to experience 2018, 2019 again. Like, it wasn't a fun time, that's for sure.

• 35:36David Hoffman?

  Right, right, right.

• 35:39David Hoffman?

  Oh, did you? Okay, changing subjects here, unless you have anything else you want to touch on. Did you watch the the Hal Press Super Polish Ether video that we did on Bankless?

• 35:47Speaker 01

  I'm like, I'm like halfway through it, yeah. I've heard really good things about that from my community as well. They've watched it too. But yeah, I mean, if you want to TLDR for people, I guess.

• 35:56David Hoffman?

  I think the the quickest thing I'll TLDR is that he just he just makes the illustration that the Ethereum is at this particular equilibrium right now because of minor cell pressure, like all proof of work blockchains are. And because like every single day, the equilibrium of the ETH price has been like set towards a particular amount, a million dollars of cell pressure every single day to to secure the blockchain. And as soon as we go and do the merge, it flips on its head where it goes, I can't remember the numbers. I think it was something like 15 million dollars a day, which is like, not small, 15 million dollars a day of cell pressure every single day. Is like, you know, you you gotta tally some numbers up over the time. And then when the merge happens, it flips. So it goes from 15 million dollars of cell pressure to 15 million dollars of buy pressure.

• 36:40David Hoffman?

  And so over the last, how many years of Ethereum, seven years of Ethereum's lifespan, like it's just come to this equilibrium of just figuring out how to live inside of a market that has 15 million dollars a day of cell pressure. And then all of a sudden it flips and goes to to buy pressure, just like the snap of the fingers, right? And so like, and so one of my questions for him was like, okay, how many, how long will that flip turn to like, manifest in the actual price of the thing? Like, his answer was basically like, pretty fucking fast. And so this guy has calls out for $8,000 Ether in December, bro. This December.

• 37:17Speaker 01

  Yeah.

• 37:19David Hoffman?

  That's not his only position, but that's like his most bullish position. But like, nuts, dude.

• 37:24Speaker 01

  Yeah, I mean, I'm, I'm, yeah, obviously super bullish on ETH, but 8,000 by December seems, I mean, it's a good bet, like if it happens, because like he's probably gonna make a lot of money on that. If it does materialize, but yeah, I mean, the speed at which things happen is kind of hard to tell as well. I think in this industry, because it's like suddenly, sorry, slowly, then all at once is kind of like the motto, right, for a lot of these things. But I think the main takeaway I've had, as I said, I've only listened to half of it. But the main takeaway I got from what he was talking about was that he looks at these things as like just businesses, right, like cash flow, businesses with expenses, all that sort of stuff. And he kind of like articulates the point quite well in that these other blockchains, even if they're proof of stake, they're leaking so much value because they're paying validators to inflation, but not offsetting that with a fee burn

• 38:08Speaker 01

  that can actually offset that. Yes, they have, may have a fee burn implemented, but they're not burning enough to kind of like be sustainable, right? Whereas Ethereum is, Ethereum is net deflationary, literally every single block, once the merge goes through. And we've been at deflationary on proof of workdays, which is just like insane, right? And yeah, that minor cell pressure gone, there's no withdrawals after, directly after the merge for like at least six months.

• 38:30David Hoffman?

  Which is a gimmick, but like for six months, it matters.

• 38:33Speaker 01

  I mean, I think, I think it's a narrative, right? It's a narrative that'll push the price higher in my mind. But, but, but definitely, I, I, I think that he articulated all that quite well. And I mean, him betting his whole fund on ETH, right? That's what he's doing. Yeah, he's betting his entire fund on ETH.

• 38:48David Hoffman?

  ETH and ETH-related upside. And he watches the all-court devs call, bro. He actually, which is actually crazy to think about, as in like, the Ethereum ecosystem builds in the open, right? Like it builds transparently, it builds inside out. And so there's like this one guy who has like, I don't know, 30, 50 million dollar fund. I don't know the numbers, but he was like, yeah, no one else is doing this. But I'm gonna listen to the all-court devs call and just like expose myself more and more and more to, as the merge comes. And so he's, we asked him, is it like, is anyone else doing this? He goes like, no one else is doing this. I don't, I don't know why, right? It's like, it's like some people tune into the investor calls, some people turn into, tune into the Federal Reserve notes,

• 39:31David Hoffman?

  and other people tune into like how much progress. Ethereum client teams have made on the merge and that's this guy and like he's aping the entire fund into the merge. His prediction is that like, and this is a guy who's like, he's got skin in the game, right? And so like, he's not you and me who are like, you're, you're pretty balanced about this. Sometimes I get a little bit over my ski tips and I'm like, guys, merge coming soon, merge coming soon. But I'm inside of the Ethereum ecosystem and he is outside of the Ethereum ecosystem with the fund on the line, like neutral, unbiased third party and he's like, August, I think it's August.

• 40:04Speaker 01

  Yeah, yeah.

• 40:04David Hoffman?

  Which is nuts.

• 40:06Speaker 01

  Yeah, yeah, yeah. And the thing is, that matches exactly with my expectations that I've had for, for a while now, which is, which is cool to just see that kind of like validated there. But I think, yeah, there's kind of like listening to the call itself and then reading like the headlines. Like for example, yesterday I put out a tweet announcing that Robston was going to be kind of like run through the test net. Sorry, the, the merge on June 8th or approximately June 8th, right? That's the headline. That's like a tiny bit of that, you know, whole core devs call. And you can get so much alpha by just listening to the call itself, right? And kind of like getting all the nitty gritty details, not just around the merge, but around kind of like everything else. And I think that's, you know, what he's trying to do, which is, which is awesome. Like, you know what? The funny thing is, I don't even listen to the calls because a lot of the time that happens when I'm sleeping.

• 40:49Speaker 01

  But I do, I do read the notes and keep, I keep on top of it. But yeah, there's even more alpha to be had by just sitting there, listening to the calls and like embracing kind of like the whole, the whole thing, the whole Ethereum thing. So, yeah, I mean, I, I, I think he's, uh, he's gonna, he's gonna have a very good time over the coming years with that bet. Definitely. I mean, obviously I'm biased, but I think he's, uh, he's making an amazing bet then. And I'm, I'm glad to say that because it sends a signal to, to the kind of ecosystem, to other money managers that, hey, you know, you don't have to bet your whole fund here, but there is, there is something here, definitely. And he articulates it in such a way that maybe you and I don't, um, from like a traditional finance perspective, which is what we need because it's all well and good for me to give the bull thesis for ETH, but I give it as a, as an Ethereum. I give the kind of like in the weeds stuff. I don't articulate it.

• 41:34Speaker 01

  Exactly. I don't, I don't give the analogies that, that, that he was giving. So I think that is extremely important because most people are not crypto natives. Most of the money in the world is, 99% of it is not in crypto, right? So to get it into crypto, we need people to articulate it in such a way that normies can understand, right? And people, normies in the crypto context can understand. And I think that's exactly what he's doing. So yeah, I mean, I, I'm keen to finish the, the rest of it. But a lot of alpha in that, you know, that show just in itself.

• 42:00David Hoffman?

  Yeah, it was definitely our first episode with him and it was our first time like engaging with this guy. So like the episode, we, it was like a very long episode for, for what we did was like an hour, one and three quarters hours. But we're definitely going to have him back on as we get better talking to this guy and communicating with him and seeing how he perceives things. Cause like there's value in the crypto native pitch because I mean, I'm all for tearing down old standards of doing things and like replacing tradFi with better Fi. But also at the same time, the fact that we can retrofit Ether fundamentals onto tried and true fundamentals of the old world. And it's not like they just like, it's not like their thing is just made up. Like those are real metrics with real analysis and real fundamentals that a lot, the mo, the majority of wealth in this world understands.

• 42:44David Hoffman?

  And the fact that we can retrofit Ether into those models and it comes out with an output that makes a ton of sense. And not only makes a ton of sense, but it's really effing bullish. Then all of a sudden, like the old money can couple to the new money via this common understanding, right? Like one of my favorite lines is that the bolt, the bolt most bullish thing for Ether is to be understood, right? And we can take Ether metrics and plug them into old algorithms to spit out a very bullish answer that is interpretable by trillions of dollars. Right? Like that's, that's as collapsed as I can get the whole, the whole thesis.

• 43:20Speaker 01

  Yeah. Yeah. And I think on that understood notion, so the, the bet on Ether, I think, or the bet on, on like just assets in general, like investing in general is that there is information asymmetry. There is kind of like an understanding or an information arbitrage to be had here where you have access to this information before the majority of people. And, uh, you know, you are making the bet that that information is going to continue being dispersed. Going to continue kind of like flowing into the rest of the world, the rest of the money. And that money is going to eventually understand and kind of like come into ETH. And that's how obviously the price appreciates over time, over the long term at least. So that's kind of like the bet. And I, I, I think that it's a really good bet because over time ETH and Ethereum have become more understood.

• 44:01Speaker 01

  Right. It was, it went from basically not being understood at all in, in, you know, 2018, 2019 to being the, you know, people, you know, even, even like the most kind of like ardent, like not anti ETH people, but the people that wouldn't really support Ethereum or ETH. And now collapsing in and saying, I was wrong. ETH actually has kind of like value, all this sort of stuff, right? So I think that's the most bullish thing I, I think for me. Um, but, uh, but yeah, I mean, we could talk about being bullish on ETH all day, of course.

• 44:26David Hoffman?

  And I think we shall, right?

• 44:28Speaker 01

  Are we, are we, are we got a surprise guest?

• 44:30David Hoffman?

  Uh, yeah, he's not coming in yet. Uh, I, I kind of jumped the gun on that, but he should be here in, in a couple of moments.

• 44:36Speaker 01

  Okay.

• 44:36David Hoffman?

  Yeah, we'll, we'll, we'll leave the guest hanging with, with who's coming in here, but he, he can only stay for a few minutes, but now so can we? Um, I guess there's another time to do one of these. Uh, oh no, not that one. Don't share that link. Then we'll get 10,000 people in here and that's bad. Okay. What's up guys? Uh, Anthony and I do this every now and then. Uh, if you're new to Bankless, which is crazy, you should definitely subscribe, but you should also subscribe to the link that I put in the top chat, which is Anthony's Daily Way YouTube channel, which he puts out daily videos about the Ethereum ecosystem. Uh, and you know, it keeps us up to speed and also critiques the things that should be critiqued every now and then. And so, uh, yeah, you should, uh, subscribe to his channel there.

• 45:15David Hoffman?

  Let's see, where do we want to, where do we want to go from here?

• 45:18Speaker 01

  I mean, so many, well, it's on my mind actually, um, right now, uh, outside of all the craziness of the last week, is just how close the merge is. I know that we were just talking about, but like, come on, man. Like it's May and we're expecting it in August. Like it's, it's so close.

• 45:34David Hoffman?

  That's three months. That's three months.

• 45:37Speaker 01

  Exactly, exactly. Like I, I, I was just, cause like the shadow forks are going well. They announced the test net, as I mentioned before, the Robson test net fork, um, on the call, Dev's call today. Like it's so goddamn close. Like I, I feel it. Like I can, I can see it. Like it's, it's there. I just want to grab it and kind of like, yeah. So I'm, I'm just like, I'm ecstatic. Like I, I just, I can't believe that we're just like almost at the finish line after so, so long. And, um, I don't think people realize how close it is. There are still people who think that it's not going to happen at all. Like, ah, what? Like, how does that even make any sense?

• 46:06David Hoffman?

  Did you see Corey clips, you know, Swan Bitcoin? It's like this Bitcoin neo bank savings only neo bank Corey Clifton, the CEO, who I interviewed on POV crypto way back in the day. He was a nice guy because he had to put on the nice I'm a CEO face. He tweeted out something, something here's the secret that ETH Maxies don't want you to know Ethereum is just a more convoluted, like ridiculous version of Terra. And like I read that tweet and it would have been one thing if it was like 10, 15, 20 likes, but it had like 2,500 likes. And I was looking at this tweet. I'm like, what do I do with this? Like, how do I even begin here? Because you can't fight that fight on Twitter.

• 46:47David Hoffman?

  People that 2,500 people liking a tweet that says Ethereum is just as convoluted is more convoluted than Terra. Like, what are you going to do? You're going to fight that fight on Twitter? Are you serious? But like, the information asymmetry is only getting worse. Here's Eric. I mean, Doquan. Here's Doquan.

• 47:04Speaker 01

  Doquan. It's Doquan.

• 47:08David Hoffman?

  What's up, man?

• 47:09Speaker 02

  Yeah. What's up, guys?

• 47:11Speaker 01

  How's it going? I think you're all the mics not on. I think your good mics are on.

• 47:17Speaker 02

  Here we go.

• 47:18Speaker 01

  Yeah, there you go. That's much better.

• 47:20David Hoffman?

  Eric Conner's in the house, man. Dude.

• 47:22Speaker 01

  So we're doing an ETH podcast now with David as a guest.

• 47:27Speaker 02

  Yeah, if you guys remember, Anthony and I used to do a podcast together like four years ago.

• 47:33Speaker 01

  We haven't done one in like four weeks now. Oh, God. We've got to do it next week, man. Like, we've let it go on too long.

• 47:41Speaker 02

  Yeah, I think we have some angry listeners out there.

• 47:45Speaker 01

  Yeah. Yeah, yeah, yeah.

• 47:47David Hoffman?

  Well, maybe you guys can just do it here, huh?

• 47:49Speaker 01

  Yeah, yeah. Yeah.

• 47:51Speaker 02

  You can be the host.

• 47:54Speaker 01

  Eric, you know what I'm loving? I'm loving the most lately, like your return to Twitter has just been, hey, guys, I'm back. ETH gone to 10K. Shitpost, shitpost, shitpost. It's just constant shitposting. It's just such a great return, man. I bet you haven't fun, right?

• 48:10Speaker 02

  Yeah, I'm loving it. I mean, you guys know I love a good bear market. I'm not going to shy away from that, so.

• 48:17David Hoffman?

  They all have their times.

• 48:19Speaker 02

  Right, exactly. The second I saw some desperation on Twitter, I decided it was time to hop back. But it was a good hiatus.

• 48:24David Hoffman?

  You could just smell the blood in the air and just like, I'm coming back.

• 48:28Speaker 02

  You had to. Yeah, I mean, we need, we need some comedy out there during bear markets. So no one take my post too seriously these days, but you know, I, I, I do truly believe though, that people are overreacting. Like I, I just, I mean, I know we hit seventeen hundred or whatever, but we're still at like two K. Like eighteen months ago, we were all crying and we were at like eighty. So I don't know. I'm not, I'm not fully buying into the bear market stuff, but I mean, I know some people bought a lot higher than we're at, but.

• 48:56David Hoffman?

  No, it was, it was over two years ago. It was like two year, four months or something. When was it last? Two years, two, two months? Yeah, yeah.

• 49:03Speaker 02

  Well, the, the phase, phase zero launched December of twenty twenty twenty. So. And that's right when Eve started taking off. So, yeah.

• 49:14David Hoffman?

  Yeah, but, well, okay. Yeah, yeah. So, well, also we hit two thousand, we hit like seventeen hundred last May, right? Uh, and so like, it's been one year since we've hit these prices.

• 49:25Speaker 01

  It was the one year anniversary when we, like, May 12th was like the first big crash to seventeen hundred. And then we did it again. It's like, like, it's so poetic how that happens. Like literally on the one year anniversary. Like, um, but yeah, no, I mean, I'm with Eric on that. Like, I know it's easier for us to say since we bought Eve like at a lot, a lot cheaper than what it is today. But I don't know. Like, I feel like people are acting like the world is ending. Like, I mean, guys, if Eve goes down ninety four percent again from its all time high, it's like three hundred bucks. If that's not happening, like, if that happens, I feel like, uh, I, I mean, I'd be panicking like pretty badly. I'd be like in a corner being like, what happened? How did it all go wrong?

• 50:04Speaker 01

  So, yeah, I don't know.

• 50:05David Hoffman?

  Cause you bought? Is that what happened?

• 50:07Speaker 02

  Um, you know, I didn't do my typical like YOLO. This is the bottom buy. I was talking to Anthony a little bit yesterday. I, I, I bought a few NFT dips mainly because I just see NFTs as like leveraged ETH. Um, so, and there were a couple desperation plays out there I saw going on. So, you know, I did deploy some capital, but I haven't yet. So that's the thing though, like I don't make my like blood in the street YOLO ETH bottom buy slash calls unless like it's really blood in the street. And to me, 2000 is not blood. What Anthony was just talking about is blood in the street. Like if we're talking like three, four, 500 and people are like, you know, it's funny. People are just spoiled these days, right? Like 55% off the highest. Not that bad. It's just not.

• 50:51David Hoffman?

  Right. But does that mean we're going down more?

• 50:53Speaker 02

  Uh, I don't know. It's hard to say. I, I don't think so. I, I think ETH is, you know, Bitcoin only went down, what, what was it? Like 80% when ETH went down 94, whatever last cycle. And I think every cycle, the big guys will go down less. I, I think ETH came out stronger out of all this drama. Of course it's going to suck and like, we're going to bounce around Chop City for a while, but I, I don't know. I, I think ETH max pain downs in like the seventies percentages, but which will happen if the macro environment stays ugly. That's one thing people need to remember, right?

• 51:27David Hoffman?

  Yeah, that's, that's certainly true. But also at the same time, we're seeing an acceleration of just like the biggest bear market signals as a result of this whole Terra thing, like funds are blowing up, people are losing all their net worth. Like we're, we're doing the suicide hotline thing on the pin on top of subreddits.

• 51:42Speaker 02

  Regulators.

• 51:43David Hoffman?

  Regulators are coming in. Like these are all the same conversations and the, and the happenings like, uh, like right now, the, the suicide hotline is like contained into one ecosystem. But like dude, it was pinned across like many, many ICOs, like our cryptocurrency throughout all of 2018 and 2019.

• 52:01Speaker 02

  Oh, yeah.

• 52:02David Hoffman?

  And like, and this is where funds would blow up on leverage over and over and over again. And so like, I'm wondering if we just like brought some of the bear market pain forward a little bit because of this whole Luna crash ecosystem thing. Yeah, that's my take.

• 52:15Speaker 02

  Yeah, I mean, I definitely agree with you. I think also like I had tweeted this the other day, but it seems like every freak out quote unquote bear market event to me is less and less systematically scary. Like for me, I've witnessed four big ones like Gox was the first one for me and like everyone thought that could be the end of Bitcoin. Then the Dow hack, everybody thought was the end of Ethereum. Then we had like, you know, Black Thursday where oh shit, did we scrub this whole DeFi thing? And like, you know, it all going to zero. And to me, like a Ponzi collapse thing. Yeah, I get it. People lost a lot of money. I mean, I feel bad about that. But like Ethereum itself is just not really affected by this. Like funds blowing up does not affect the future of Ethereum, right?

• 52:57Speaker 02

  And that wasn't the case in like past, you know, collapses that we've seen.

• 53:02David Hoffman?

  Yeah, yeah. Go for it, Anthony.

• 53:04Speaker 01

  I think, yeah, I was gonna say, I think the current debate right now, at least in my circles is, was May 2021 the start of the bear market? Was November 2021 the start of the bear market? Because people are saying, oh, well, the new all time high in November was just a dead cap bounce. Yeah, we went to new all time high, but it was still technically, if you look at the chart, like a dead cap, right? And I can see both sides of this. So if you fall into like the May 2021 top camp, we've already been in a bear market for a year, right? But then if you fall into the November one, it's six months. I actually think the November one was driven by the macro environment going nuts. Like it's last hurrah before like all these Fed kind of rate rises and stuff kind of started coming out, right? And the really big inflation numbers. So I don't know. I don't know where I sit on that one. I'm leaning toward more towards May being that kind of like top.

• 53:49Speaker 01

  Because the thing is, we blew off really fucking hard in May, right? Within a week, we went down from 4.4K to 1700. Like that was a massive blow off top. People got absolutely destroyed on leverage. We had a huge volume candle. Like it was, it was one of the biggest in history, right? So I think if you're depending on what camp you fall on is kind of like, it determines like how you feel about the current market. Like if we're gonna stay at 1700 as the bottom or if we're gonna go to max pain, triple digits like that. So I agree with Eric. That's like max blood in the streets. You know, I would pull out all the stops to buy as much as I could at that price point, right? But like, you know, I don't have much ammo left at this point. Just keep buying ETH, but prematurely.

• 54:28Speaker 02

  Throw some of those figurines.

• 54:29Speaker 01

  Yeah, yeah, yeah, yeah. Max.

• 54:31David Hoffman?

  I'm not sure about the liquidity on those markets right now.

• 54:34Speaker 01

  Yeah, you might just start seeing the room get very bad and like because the eighth is in triple digits. But no, I think that's like, yeah, depending where you fall on that kind of like opinions, kind of spectrum there is how you're going to feel about the current kind of market, I think.

• 54:48David Hoffman?

  Well, Paul, when we had our interview with him, gave a take that I think I'm leaning into, which is that inflation came from asset price appreciation. All the people that had assets in the stock market and crypto assets started buying a bunch of houses and just like being super price insensitive. And like I heard some stat from some article, so of course it's true, that one fifth of all mortgages in the United States in the year 2022 were came from crypto wealth or 2021 came from crypto wealth. So you know that like a lot of this asset depreciation is coming from just or this inflation is coming from asset appreciation. So if you take that fact, the fucking crash of the tech stocks, which were the big growers, and then the overall the crash of the market and the crypto market is just killing demand. Right. And so the source of inflation came from asset price appreciation.

• 55:33David Hoffman?

  And now that we're back to like pre inflation levels, where Paul thinks that the inflation is already dead, but since CPI is a lagging indicator, the Fed can't act on it. Because they have to wait for the verifiable like numbers to show up saying, yo, inflation is actually dead, even though it's already been dead for months. And like one very small anecdote that I've been thinking about lately is I'm moving to Brooklyn. And so I bought a bunch of patio furniture coming to San Diego to put on on my patio. And like relatively nice stuff, but like now I've got to sell it. And so I'm selling it one year use and I have it like 50 to 70% off. And like they're not going, I'm actually kind of stressed by it.

• 56:12David Hoffman?

  And I don't know what to do with this shit, but like, yo, like one year old patio furniture, five to 50 to 70% like that, like, and no one's going for it. And so like, yo, demand's dead, like verifiable, like there's your data.

• 56:24Speaker 01

  Mm hmm.

• 56:25David Hoffman?

  Yeah.

• 56:25Speaker 01

  Just one anecdote, but verifiable data point. Um, yeah, yeah.

• 56:32Speaker 02

  Don't get liquidated on your patio furniture.

• 56:34Speaker 02

  Yeah, it's fine. Oh, go ahead. No, no, you go, Eric. Okay. No, I was just gonna say, like, what, like, going back to the markets a little bit, I think people are pointing to Luna as this collapse, which obviously was a factor, but it was like macro, the stock market was getting ugly to begin with. I think we were headed generally in this direction, no matter what, and it just kind of accelerated. I mean, if you look at the S and P 500 graph, they've had six straight weekly red candles, which is like pretty unheard of for the S and P 500, right? But one of the funny things, like, you know, you go mainstream and like Wall Street Journal, CNBC, they're all talking about the great crypto crash. Meanwhile, like, if you look at some of the stocks year to date, like PayPal is down 50% year to date, Netflix is down, Meta is down 40, like, there are a lot of tech stocks down more than ETH is from, you know, over the last 12 months or whatever.

• 57:25Speaker 02

  So that's a, that's a new paradigm for sure. That used to not happen. And that's a, that spooks me a little bit on the macro side, but also maybe the selling's wearing out, you know, at the same time.

• 57:36Speaker 01

  A lot of those stocks also wiped out like their entire pandemic gains. Like they're back to March 2020 prices, basically, whereas ETH is still up like over 20x since its bottom back then, right? So just looking at like that, I think is amazing because everyone's like, oh, you know, crypto is like super volatile, super risky stocks are like where you need to be. I mean, okay, a lot of the, the long tail of crypto assets definitely just giga wrecked, like they're down 90 plus percent, right? But like, when I talk about crypto investing, and I'm talking about like, you know, ETH, right? At, at the end of the day. So I think when you look at it like that, ETH is faring, you know, amazingly, which is, which is, which is quite a cool thing. It's something to keep in mind, I think, for people as well. Like, if people were in other assets that got destroyed in crypto, like, I'm sorry, guys, but that's just what happens every single time. Like, you know, you're speculating on things that are inherently worthless a lot of the time.

• 58:21Speaker 01

  They got no value accrual at all, right? They got no value, like, valueless governance token.

• 58:26Speaker 02

  They're just new too. And so like, people get scared.

• 58:29Speaker 01

  Super risky, right? Yeah. Exactly. Super risky. And like, a lot of them also, what a lot of people forget is that they have early investors unlocking all the time, right? And dumping like huge amounts of tokens onto the market and liquidity mining programs, things like that. I mean, we all saw this play out already in DeFi summer. Like, we learnt our lessons. And that's why I think, I don't know, I speak, don't speak for you guys, but for myself, like, I don't speculate on many of these tokens anymore. Like, it's just, I know what ends up happening. They all have the same graph. Like, it's just insane, right?

• 59:01David Hoffman?

  Yeah, well, I mean, it's natural for like the coin market cap or now coin Gecko like the tokens, the further down the the tokens are, the more the capital flies up, right? It flies up to the the quality assets with the most liquidity that are the most stable. Uh, but over like I I think Bitcoin and Ether are down like the same percentage. I think Ether was down 65 and Bitcoin was down 64% from the top. Uh, which is just fantastic in comparison to last cycle.

• 59:30Speaker 01

  They're down about the same right now, though, I think. Um, they got a little bit wrecked on that sell off there.

• 59:35David Hoffman?

  Right, yeah.

• 59:36Speaker 02

  Yeah. But like the The ratio, the ratio, ratio charge is priming for post-merge breakout. I mean, it's like perfectly aligned for it.

• 59:45David Hoffman?

  I don't take opinionated positions very often. I usually just buy ETH, but I did put ETH into Compound, borrow Bitcoin, bought more ETH and put that back in the Compound to to trade the merge. I did do that.

• 59:57Speaker 02

  Yeah, yeah. I mean, it's it's coming. People are just sleeping. I mean, it's going on Robston, what, in a month or something like that it was they said on all core devs today? Yeah.

• 1:00:07Speaker 01

  Approximately, yeah.

• 1:00:08Speaker 02

  Yeah, it's about a month. I mean, it's going to catch people, I think, off guard, just like Phase Zero launch did, just like 1559 did. Most people, like, I don't think this stuff's priced in. I don't think the market's educated enough to really understand it. And I think the one thing that's really going to catch people off guard is what the staking odds are going to look like once you add in transaction fees and MEV.

• 1:00:28David Hoffman?

  What do you think that number is going to be?

• 1:00:31Speaker 02

  I I've been estimating ballpark 15 to 20% just randomly, but

• 1:00:37David Hoffman?

  On that. I think consensus has settled around 7%.

• 1:00:40Speaker 02

  Well, it depends. Well, it's it depends, right? Because I think, say, we get up to 15%, people are going to flood it. So I, like, I think equilibrium will probably end up settling around where you're saying, 7%, something like that. But early on, we might see, before people kind of catch on to what it is. But yeah, it's tough to say. I haven't done any real number crunching on it.

• 1:01:01David Hoffman?

  Yeah, the the numbers that came out to like 13 to like 17% a while ago were based on two assumptions. Like, that was during DeFi summer when there was like 2 to 400 per, like Data gray prices, so a lot of just like transaction fees, but then all the estimation also came from a 70 30 base fee tip split, uh, which was also hypothesized and then kind of was true a little bit, but then kind of it's dwindled to the new equilibrium now, which is 90 10. Uh, and so there's 90, 90% of a transaction fee goes to the base fee and only 10% goes to the tips. Uh, and so with the reduction of, uh, the gray price for gas prices as well, like the, the new like kind of consensus I've heard lately is like about 7% post-merge.

• 1:01:41Speaker 02

  The one big thing I've, I haven't seen good analysis around, I've asked on Twitter a little bit, just haven't got there is what to expect on the MEV side, like how much are miners truly pulling in on the MEV side right now? I don't know. It's hard to, I, I saw a couple of links and it just was kind of complex to go try to calculate.

• 1:01:57David Hoffman?

  My, my gut take is that that gets you back up to like 13 to 15%.

• 1:02:01Speaker 02

  Right.

• 1:02:02David Hoffman?

  If you are the best MEV miner, I bet you get up to 13 to 15% again. You gotta be doing some real shady shit.

• 1:02:08Speaker 02

  Well, I mean, tech guys, people are just gonna release open source software to just run as a, and you just basically take it, right? Kind of like flashpods.

• 1:02:16David Hoffman?

  I think that's right. Well, there's also the dynamic that MEV actually doesn't stay on the layer one and the layer one actually stays like relatively efficient with our arbitrage. But the MEV actually moves up to the layer twos where there's a lot more transaction volume and a lot of transaction demand. That's, I think Hazu gave that take, uh, where, or no, it's actually, it's actually Kyle Samani gave that take, uh, where, uh, uh, layer twos, uh, eat up all the MEV, uh, which I mean, he, that he's claimed was that disparage for the layer one, which I don't agree with at all. Uh, but I actually just think that's especially bullish for layer twos though.

• 1:02:48Speaker 02

  Fun fact, that was optimism's initial profitability plan was just take all the MEV themselves and be profitable before they.

• 1:02:56David Hoffman?

  I think that's, that's become like the new table stakes for all layer twos is that you generate revenue from the layer two, but I think optimism very quickly realized that like, oh, well, if we want to beat other layer twos, we have to basically, uh, incur all of this revenue into public goods. Uh, because that makes that starts the feedback loop, right? And so like, that was them going through their thinking process of the whole thing.

• 1:03:20Speaker 01

  I think, yeah, no, I think the layer two thing, like, it's right, like, they're gonna be the transactional layers, right? So they're gonna generate so much of this kind of like fee revenue and MEV and stuff. And I think the token in that sense makes sense because the token will be staked or something like that. And people run validators and sequences and things like that and earn fees like that. But the thing is, is that, and the point that Samani gets wrong here is that these layer twos have to pay Ethereum layer one, like, in ETH, right? And that ETH, most of it gets burned, so it doesn't take away from the, and ETH is also the unit of account and like the money of these layer twos. Like, it's not, the native token of these layer twos isn't going to be the fee token for pretty much any of them.

• 1:03:59Speaker 01

  I know people point to Matic as being the fee token of the Polygon POS chain, but that was just like a byproduct of an old kind of design. And the POS chain is obviously not a layer two. So I think for their layer twos, they just use ETH, right? Matic will be the staking token and things like that. So same is true for pretty much all the layer two tokens, I think, there. But yeah, I think the post-merge staking yields is, yeah, hard to calculate because of the MEV component and how that's all gonna shake out. But yeah, we could see 10% plus just based on that. And then, as Eric said, we're gonna see a flood of ETH come in, like, staking, because 10% plus near risk-free yield, pretty much risk-free yield on, don't nominate in ETH? Like, come on, like, I mean, you know, there's gonna be a flood of kind of like people coming in for that, I think.

• 1:04:43David Hoffman?

  I think the last topic perhaps to talk about before we wrap things up here is how to get exposure to the merge that isn't with Ether. So there's like, layer two tokens like Matic, there's two tokens on layer twos, like the Libra token or the Magic token. And then there's, you're trying to farm airdrops themselves, there's Lido and Rocket Pool. Did you guys have any, like, thoughts on how to gain exposure to the merge without just, like, buying Ether? The obvious thing.

• 1:05:13Speaker 01

  Eric, you go. You probably have different thoughts to me.

• 1:05:15Speaker 02

  Yeah, I would say personally, I would make plays on the infrastructure side of things. So I think right now it's still a little complex for people to enter, whether it's like Coinbase or running their own node. Coinbase is complex, but people don't want to put it on Coinbase. And I think people are really yet to hear about, say, like a Rocketpool. I'll just use Rocketpool as an example, not like promoting them or whatever. And just I own zero RPL tokens, so I have no incentive in saying this. But I think people are kind of waiting for the merge to happen. That's going to be like a huge news event and people are going to flood it because of deals and stuff. And you know, Rocketpool has been building for years. And all of a sudden, people are going to say, hey, either I don't have 32 ETH, which is very understandable, or hey, I don't want to like worry about running this node infrastructure myself.

• 1:06:00Speaker 02

  And I think we're going to see a big push of ETH and users and popularity into a Rocketpool or other infrastructure type plays that just make this easier for people, right? Because like, look, I'm running my own ETH to ETH to phase zero nodes, but shit's complex. Like, it is not easy. Like, if my machine blows up, I look, I got my private key somewhere, but recreating what I did, you know, 16 months ago is not the easiest thing in the world. And so I think that'll get better, but most people are going to want to just click a couple of buttons, you know, via their MetaMask hardware wall or whatever, and just stake can be done. So I think the popularity there is going to rise.

• 1:06:40Speaker 01

  Yeah.

• 1:06:43Speaker 01

  Look, it's kind of like hard for me to say with respect to the tokens themselves, like LDO and RPL and things like that. Like, I do hold some of those. So just like, but they're not like a huge part of my portfolio. But I think ETH is just such an easy thing to bet on and such a like, I guess, shelling point, not just for people within crypto, as kind of like a bet on the merge and on staking in general, but outside of crypto, like the big money outside of crypto is not going to be buying these staking tokens. They're going to be buying ETH if they buy anything, right?

• 1:07:12David Hoffman?

  Is your answer ETH after I told you it couldn't be ETH?

• 1:07:15Speaker 01

  Yeah, no, I'm getting, I'm getting to my answer.

• 1:07:17Speaker 02

  Rap, it's rap, rap, rap.

• 1:07:20Speaker 01

  Yeah, yeah, it's, it's, it's rap, yeah, I'm getting, I'm getting to my answer. Um, I think that when looking at tokens, it doesn't matter if it's a staking token or a defi token, whatever, you can't just look at like the narrative as, as anything more than a trade. Like maybe these things will pump into the merge on the narrative, but then they're probably just gonna bleed out like if they do that, right? You can't, so when investing in, in tokens, um, you, you can't just look at one thing and be like, oh, I'm gonna hold this thing for three years because it's a merge narrative. Like, no, you have to look at, you know, what's the distribution? What's the supply like? How much more tokens are coming to market? What's the value accrual? All that sorts of stuff. You can't just base a long-term investment on a narrative that's gonna play out over a few months. Right? So I think from that perspective, like, I'm just gonna give ETH as my answer. I don't care if you said I can't give ETH.

• 1:08:05Speaker 01

  I'm giving ETH as my answer. Like, that's my answer. As my final answer, lock it in. That's it. So that's my, my view on, on betting on tokens, basically.

• 1:08:14David Hoffman?

  All right, guys. Eric, thanks for coming into the stream, man. It's good to see you.

• 1:08:17Speaker 02

  Yeah, for sure. Thanks for the invite. It's my, my first comeback in a while on, on any kind of podcast or video chat.

• 1:08:24Speaker 01

  We, we, we need to do the ETH podcast next week, man. We've been leaving them hanging for too long.

• 1:08:28Speaker 02

  We should probably get back on that, yeah.

• 1:08:30David Hoffman?

  Yeah, let's, let's do it. Who's not doing that?

• 1:08:35Speaker 01

  No, let's, let's book it in. We're good. We're good. Um, yeah, cool.

• 1:08:40Speaker 02

  All right, guys. Good stuff.

• 1:08:41David Hoffman?

  Cool. Thanks for stopping by, Eric. Uh, for the, the YouTube listeners, uh, you guys know what to do. Like and subscribe and all that stuff. Here is Anthony's, uh, daily, Eric was like, I'm out. Here's Anthony's daily guide YouTube, YouTube link to subscribe to that if you guys don't follow him. So thank you, everyone, for tuning into this semi-regular Friday Bake List Daily Guide livestream. We'll see you next time we do it. Bye, Anthony.

• 1:09:05Speaker 01

  Thanks, everyone. Bye, everyone.

• 1:09:07David Hoffman?

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

• 1:09:52David Hoffman?

  fantastic content. Thanks, everyone, for watching.