📺 ROLLUP: China Crypto Ban | NFTs & Bitcoin on Twitter | Compound Bug | Virgil Griffith

Last Week of September, 2021 ------ 📣 ZERION | Your Gateway to the Metaverse! https://bankless.cc/Zerion ------ BANKLESS SPONSOR TOOLS: 💰 GEMINI | FIAT & CRYPTO EXCHANGE https://bankless.cc/go-gemini​ https://bankless.cc/go-gemini%E2%80%8B 💧LIDO | DECENTRALIZED STAKING https://bankless.cc/Matcha 👻 AAVE | LEND & BORROW ASSETS https://bankless.cc/aave 🦄 UNISWAP | DECENTRALIZED FUNDING https://bankless.cc/UniGrants ------ Topics Covered: 0:00 Intro 8:15 MARKETS 8:45 BTC Price 9:18 ETH Price 11:45 ETH/BTC Ratio 12:39 DeFi Action 16:10 EIP 1559 https://dataalways.substack.com/p/below-the-surface-of-eip-1559 20:07 dYdX https://twitter.com/AntonioMJuliano/status/1442234625120608256?s=20 24:06 Settlement Assurances Nic’s Article: https://medium.com/@nic__carter/its-the-settlement-assurances-stupid-5dcd1c3f4e41 David’s Talk: https://youtu.be/z3ufil39z5o 34:39 Reserve Asset of DeFi https://coinmetrics.substack.com/p/coin-metrics-state-of-the-network-a0e 35:48 Polygon Daily Active Addresses https://twitter.com/MihailoBjelic/status/1443041767725674499?s=20 37:16 TracerDAO https://tracer.finance/ 39:00 RELEASE 40:00 Connext NXTP Protocol https://www.coindesk.com/tech/2021/09/28/connext-launches-nxtp-protocol-to-improve-liquidity/ 42:42 Andre’s OpenSea Competitor https://www.coindesk.com/tech/2021/09/24/andre-cronjes-new-nft-marketplace-is-a-vampire-attack-suicide-pact/ 45:25 Coinbase Direct Deposits https://blockworks.co/coinbases-new-direct-deposit-feature-allows-users-to-get-paychecks-in-crypto 47:45 USDC Enabled Funds https://twitter.com/angellist/status/1442901252552101888?s=21 48:06 Affirm Super-App https://www.bloomberg.com/news/articles/2021-09-28/affirm-to-debut-crypto-debit-products-in-push-toward-super-app 49:54 Polygon x Index Coop https://twitter.com/crypto_texan/status/1443292276940316673?s=21 50:30 Nahmii 2.0 https://blog.nahmii.io/launching-nahmii-2-0-layer-2-commercial-scaling-for-ethereum-ee790a8af2d2 51:14 Roll Social Tokens https://decrypt.co/82080/roll-raises-10m-expand-social-tokens-service-creators 52:21 Bankless Jobs https://jobs.banklesshq.com/ 53:00 NEWS 53:15 NFTs on Twitter https://twitter.com/TheSmarmyBum/status/1443259893411049475?s=20 56:53 China Ban https://www.bloomberg.com/news/articles/2021-09-24/china-deems-all-crypto-related-transactions-illegal-in-crackdown Blocks: https://www.theblockcrypto.com/linked/118878/coingecko-coinmarketcap-blocked-china-internet-firewall 1:01:03 $23M Gas Tip https://cointelegraph.com/news/bitfinex-paid-a-colossal-23m-fee-to-send-100k-of-usdt 1:02:58 Aave Arc & Fireblocks https://www.theblockcrypto.com/linked/118822/permissioned-defi-platform-aave-arc-gears-up-for-launch 1:03:56 Compound Bug https://twitter.com/rleshner/status/1443380518498848768?s=20 1:05:59 Axie Airdrop https://twitter.com/AxieInfinity/status/1443536552211124230?s=20 1:07:20 ETH Staked https://twitter.com/LidoFinance/status/1443259897878040578 1:09:53 Snoop & Sandbox https://twitter.com/TheSandboxGame/status/1441069396567412736?s=20 1:11:49 Dapper NFL Top Shot https://cointelegraph.com/news/dapper-labs-to-launch-top-shot-for-nfl-as-ftx-signs-the-packers-aaron-jones 1:13:48 Lightning Network https://www.theblockcrypto.com/linked/119025/bitcoin-lightning-network-capacity-reaches-all-time-high 1:15:36 Visa Payment Channels https://www.theblockcrypto.com/post/119117/visa-universal-payment-channel-interoperability-cbdc 1:17:07 1inch Blocking US Trades https://www.theblockcrypto.com/linked/119055/dex-aggregator-1inch-blocks-out-us-trades-in-preparation-for-separate-american-platform 1:19:44 CFTC vs Kraken https://www.cftc.gov/PressRoom/PressReleases/8433-21 1:20:38 Wells Fargo Sucks https://twitter.com/BanklessHQ/status/1443202690805293061?s=20 1:23:54 Sen. Lummis CBDC https://www.theblockcrypto.com/linked/119035/senator-lummis-lays-out-principles-for-a-us-digital-currency-alongside-continued-role-of-private-stablecoins 1:24:45 Virgil Griffith https://twitter.com/ameensol/status/1442170786941444106?s=20 1:33:00 TAKES 1:34:00 Advice for the US https://twitter.com/ryansadams/status/1442864882274107396?s=21 1:36:40 Protecting the Public? https://twitter.com/ojuice_eth/status/1441406498186227720?s=20 1:39:27 Nerfing SEC https://twitter.com/TrustlessState/status/1442846197085917187?s=20 1:41:38 Bankrupting Our Youth https://twitter.com/BanklessHQ/status/1443549124062851075?s=20 1:43:38 Golden Age of Building https://twitter.com/TrustlessState/status/1443603632973176835?s=20 1:45:26 What David’s Excited About 1:47:42 What Ryan’s Excited About 1:50:38 MEME of the Week https://www.instagram.com/p/CT0z-FLloi0/?utm_medium=copy_link 1:51:24 Closing & Disclaimers ----- 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.

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

• 0:07Ryan Sean Adams?

  Hey Bankless Nation, it is the fifth week and last week of September and you know what time it is, David, tell them.

• 0:13David Hoffman?

  It is roll up time, time to roll up the entire week of crypto, which like I always say is an ambitious endeavor in this industry. An insane amount of things happen every single day and we are going to roll up the last week of September here on this Friday, Bankless Weekly Roll Up. Ready Ryan?

• 0:31Ryan Sean Adams?

  Yep, I'm ready. Enjoy this with your cup of coffee guys and David, it looks like you've had a few cups of coffee. Looking good man, you're back in your place, right? Off the road.

• 0:38David Hoffman?

  Yeah, in stark contrast to a very, very tired hotel room weekly roll up, I'm back in San Diego with my setup, with my coffee in the morning, multiple cups of coffee today. So yeah, it's going to be a fun weekly roll up this week.

• 0:51Ryan Sean Adams?

  Alright guys, we have so much to cover. I think we're going to hit the China ban. They banned crypto for the 500th time, but this time maybe they mean it? We're going to get into that. We're also going to touch on NFTs on Twitter. Is this the new blue checkmark? We got to talk about Virgil Griffith as well, guys. So this is going to be a jam packed roll up for you.

• 1:08David Hoffman?

  A bunch of cool things mixed in with some unfortunate things and the China, the China ban actually has some silver linings, which we're about to get into into the market section. The Virgil Griffith story, no silver linings there. So you're going to hear some frustration coming out of me and Ryan later in the show. But I think that the coolest thing is Twitter, led by Jack Dorsey, who only talks about Bitcoin, is, did, did two things, like you said, one was integrate NFTs on, on their platform. So you can get your verified NFT and you can also tip with Bitcoin now with Twitter. So they're doing two things. One's Ethereum focused, one's Bitcoin focused. I wonder which one the market will like more in the future, we will see.

• 1:50Ryan Sean Adams?

  I can't wait to talk about that some more. So we're going to get into those items. Um, one, a few announcements we need to share with you. So if today you're listening to this, it is Friday, October 1st, then that means discounts have just launched for Permissionless. So Permissionless is a DeFi conference. are putting this on with our friends at Blockworks. I think it's gonna be the biggest DeFi party of 2022. And you guys need to be there. This is going to be in Florida, where we headed, David.

• 2:22David Hoffman?

  West Palm Beach.

• 2:23Ryan Sean Adams?

  West Palm Beach, that's right. Almost forgot. And so what they're doing with the ticket rollout is they're rolling out 250 at a time. So every two weeks, 250 new tickets get issued up. They get snapped up quickly. If you are a Bankless Premium member, you can get the tickets at 30% off. Every two weeks, tickets increase in price. I think it's $300 and something. But if you're a Bankless Premium, you get $95 off this week. So if you're interested in coming with us, partying in Florida, then check this out in the show notes and jump on Permissionless Train.

• 2:58David Hoffman?

  As the resident conference goer here, it's no surprise that Ryan forgot where we were going. But yeah, Ryan is actually gonna be there too as well.

• 3:05Ryan Sean Adams?

  I'll be there by iPad or am I actually attending in person? We haven't discussed this yet.

• 3:09David Hoffman?

  I mean, you don't live too far away from West Palm Beach.

• 3:12Ryan Sean Adams?

  Yeah, I'm gonna be there in person, guys, definitely.

• 3:16David Hoffman?

  It's been a ton of fun organizing this event with the Blockworks team. They definitely understand that crypto conferences aren't just about the conferences and more about how it's a cultural festival. So if you've never been to a crypto conference before, don't think of it like a boring conference. Think of it as something much more closer to literally a festival of the arts, a festival of culture. There's going to be the actual conference with actual like good content and talks. But then after the fact, it's going to be just a bunch of good vibes. So looking forward to that. Bankless gonna throw a party? Question mark? I have to convince Ryan of this. I haven't talked about it to him yet, but.

• 3:54Ryan Sean Adams?

  You sent it to me in Discord. I was definitely down. I haven't commented on that, but guys, we are throwing a party. Absolutely. So be there. Also, NFT Gallery, they're gonna have like tons of cultural things too. So make sure you check this out. One last thing on this is we're working a little bit with the sponsor team. And there's been a ton of interest from prospective sponsors, but we want some DeFi sponsors to partake in sponsorship. So if you are interested in being a DeFi. Sponsor. We've got a lot on the list. We want the premium. We want the cream of the crop DeFi sponsors to show their force at this conference. Then ping one of us, I don't know, DM us or something and we'll get you in touch with the right people.

• 4:32David Hoffman?

  We have, we are just holding the floodgates of the dam of centralized companies who are all chomping at the bit, right? But like DeFi companies generally A, don't have the opportunity or don't like think about this as like, uh, as a, as a place to like get their branding out. Cause like generally DeFi companies have their own community to help support their branding. But like, let me tell you, if the DeFi companies don't take it, the C5 companies absolutely will. So we're holding, we're holding the doors closed on the C5 companies.

• 4:59Ryan Sean Adams?

  We're making room.

• 5:00David Hoffman?

  We're making room. So like, come talk, come talk.

• 5:03Ryan Sean Adams?

  Uh, also, this is like an offer that I think you have maybe three more days before, if you're listening to this. If you become a bankless premium member by Sunday, in the next three days, you get a bankless t-shirt. This is the bankless essential t-shirt. It's the one I'm wearing right now. The one David and I are displayed in, in many of our shows. All you have to do, I think the value on this is like $28. All you have to do is sign up for bankless premium. You can see the benefits. We'll include a link in the show notes, but it's a full market opportunity report every Monday. You get to hang out with the crew in the inner circle discord chat, podcast debriefs. You're not catching all of the podcasts unless you are bankless premium. David and I do extra podcasts after the show and release that on a bankless premium feed.

• 5:48Ryan Sean Adams?

  Alpha lurk, uh, alpha leak emails. You would have known about DYDX in advance if you got these emails. Also a 30% discount to the conference we were just talking about and an NFT badge. All of that is included in bankless premium.

• 6:02David Hoffman?

  The newsletter is designed to pay for itself. So don't get left behind.

• 6:07Ryan Sean Adams?

  All you need is one alpha leak and it's like a 10x return. Uh, I tell you, uh, we'll get to one of those alpha leaks later, but. Lastly, we gotta talk about Xerion, David. So Xerion wants us to get the word out to you. They are doubling down on NFTs, tripling down on NFTs. I think we are looking, you probably use Xerion for your, like, your DeFi user interface to do. Like, for me, Xerion is like a go-to tool. I can't be without it. But right now, I'm displaying on screen one of David's ETH addresses, and I'm seeing a lot of NFTs in this address, and these are your NFTs, right?

• 6:43David Hoffman?

  Please ignore the Fidenza rocks, which are 100% scams that I thought that, like, oh, like, I thought it was gonna be like in the 80s.

• 6:50Ryan Sean Adams?

  You need to delete these yet?

• 6:50David Hoffman?

  I need to send them away from my portfolio. So please ignore the Fidenza rocks. They are scams. Do not buy them. I got, I got rugged. But here are my flowers. Look at my flowers, right? Wait, you just scrolled right by my fantastic flower collection.

• 7:03Ryan Sean Adams?

  I'm sorry, I was trying to get to your punk, dude.

• 7:05David Hoffman?

  The portfolio gets better as you go along, right?

• 7:08Ryan Sean Adams?

  Alright, so we're looking at flowers.

• 7:09David Hoffman?

  Here are my flowers. The black and white ones are the rare ones, fun fact. But I really like that rose one in the middle here. And then if you keep on scrolling, then also ignore those. Those are bad. And you also get rid of those. Gender-Rep Mass and Cyber Kongs, the London EIP1559 gift, my pudgy penguins, which are super cute. Super cute penguins. They both look a little rare. And then, of course, finishing off is the CryptoPunk1118. Also, you can see it right behind me. Yeah, Xerion doing a really good job making an NFT portfolio interface alongside your DeFi portfolio.

• 7:42Ryan Sean Adams?

  Sir, no, no, no turtles in this portfolio yet. What are you doing, man? You sleeping on turtles still? Tiny turtles?

• 7:48David Hoffman?

  I'm absolutely sleeping on turtles. As soon as I see a turtle in my Twitter feed, I put it away.

• 7:54Ryan Sean Adams?

  You mute, you block?

• 7:56David Hoffman?

  I mute the turtles. Yeah.

• 7:58Ryan Sean Adams?

  You know what's awesome about this, too, is I haven't used this yet, but you can actually configure this interface to display a, an NFT through Xerion on your Apple Watch, too. So, something else to check, another way to flex when you're off your screen, where you're just out in public, it becomes like your NFT Rolex, just like that with the new features, NFT features that Xerion is adding. So if you're interested in checking that out, we'll include a link in the show notes. Thanks to Xerion for sponsoring this message.

• 8:29David Hoffman?

  Yeah, cheers. So that galaxy act is dope.

• 8:33Ryan Sean Adams?

  The Denzorox, man, that's awesome. I love that.

• 8:36David Hoffman?

  The Denzorox are not, are not awesome.

• 8:40Ryan Sean Adams?

  You are proud of them. Alright, guys, we're going to get to the markets next. David, you want to start with Bitcoin markets?

• 8:46David Hoffman?

  Bitcoin, starting the week at roughly $44,000, got up to the high price of $45,000 and then it has fallen after that. Down, hit the lows of roughly $41,000 a number of times throughout the week. And then it has reclaimed $43,200 at the time of recording. Generally flat, down 1% on the week. Unexciting.

• 9:09Ryan Sean Adams?

  It's a good day when Bitcoin is above 40K. That's what I say.

• 9:15David Hoffman?

  Yeah, every 10K, right?

• 9:16Ryan Sean Adams?

  Yeah, every 10K, absolutely. How about ETH? How's it doing?

• 9:19David Hoffman?

  ETH, starting the week at roughly, what was it, $3,000, got smacked pretty hard, fell all the way down to $2,750, where we did see some liquidations, reclaimed $3,150 twice inside of the week. And then also fell again twice inside of the week down to $28,000 where we, and we are now almost trying to get our heads right above $3,000 at the time of recording. So some volatility this week between $2,750 and $3,150.

• 9:50Ryan Sean Adams?

  A lot of volatility, right?

• 9:51David Hoffman?

  A lot of volatility, yeah.

• 9:52Ryan Sean Adams?

  This is pretty crazy. We're back to the chop. Are we back to the crab season once again? I thought we were almost out of that at the end of the summer. September was looking promising. Now it's let me down in the second half. What's going on, David?

• 10:04David Hoffman?

  Well, we have, we have a bunch of FUD, right? So we have like this, the regulatory FUD that scared a lot of people. We also had China banning crypto, which apparently the market is actually reacting to this time, which is like a first since 2017. And then there was this whole like treasury debacle, insider trading, like insecurity in the legacy markets. The traditional markets got hammered this week. The first day that legacy markets got hammered, crypto fell right in parallel with it. The second day, which was today, I believe, today or yesterday, crypto markets have instead become resilient to that. So like, I think. Crypto markets are done being scared and they're now just kind of waiting for everything else in the world to solidify so they can like finally show some strength.

• 10:49David Hoffman?

  I think, like I always think this, crypto markets want to show strength. There's just been like a bunch of FUD in the last week or so. So many, coming from so many different directions. And so like, once we, once the rest of the world can just deal with that, I think we can resume bullishness. But that's my take.

• 11:07Ryan Sean Adams?

  Yeah, I still feel like David, we are in like a major bull trend, right? If this kind of level of FUD had, had happened during a bear market when everyone's pessimistic, I mean crypto would have tanked and it would have stayed down for a while. The fact that we're even kind of seeing this volatility and rebounding, it still indicates to me we're in this secular bull market.

• 11:25David Hoffman?

  Yeah, we are not hitting new lows. We are getting FUD and we are not hitting new lows. Yeah.

• 11:29Ryan Sean Adams?

  I, I do think that the fourth quarters, you know, generally it's been good for crypto, particularly in bull years. So we'll see how this fourth quarter pans out, but it still could be good for crypto. We'll, we'll keep you updated every Friday as we do. All right, let's talk about this. Updates on the ETH to Bitcoin ratio. What's going on here?

• 11:48David Hoffman?

  Uh, nothing too much. I believe last week it was at point zero seven something, something. And right now we are at point zero six nine. Uh, so flat on the week for ETH BTC.

• 11:59Ryan Sean Adams?

  There's rumors of like a Bitcoin ETF in October. You know, remember Raul Paul said that and Bitcoin has shown some resilience, some strength. I wonder if it's kind of feeding on that rumor. I wonder if we'll actually see something. I've been waiting for like a, a kind of a mea culpa from Gensler to just be like, here's an olive branch crypto. Your ETF, I hate you in all of these other ways, but I'm going to give you this ETF. Uh, maybe that's going to happen in October. That could shed some light or that, that could give, give some life to Bitcoin, but we'll have to see.

• 12:32David Hoffman?

  Absolutely. The two faces of Gary Gensler, the nice face we haven't seen yet, so maybe that one does come on.

• 12:37Ryan Sean Adams?

  Come on, Gary, help us out here. All right. DeFi Pulse, this is lower than I've seen for a while. So we're at 68 billion total locked value. I think it's because crypto has gotten sort of pummeled in the last quarter.

• 12:51David Hoffman?

  You know, I actually think that that might be a bug on DeFi Pulse, because if you look at the chart, that chart is definitely above 80 billion dollars.

• 12:59Ryan Sean Adams?

  Yeah, it is.

• 12:59David Hoffman?

  So there's a little bit of a discrepancy there. Sometimes the defipulse.com front end does experience some bugs just because like there's so many different ways to count this data.

• 13:08Ryan Sean Adams?

  So what's the real number? It's 81 billion then it looks like on the graph.

• 13:11David Hoffman?

  Yeah, well, that's the higher one, so we'll go on that one as the source of truth. 81 billion locked in DeFi.

• 13:17Ryan Sean Adams?

  When in doubt, skew bullish, folks. Crypto's in a 10-year secular bull market again.

• 13:22David Hoffman?

  Wait, Ryan, you're giving away all of our bankless secrets.

• 13:26Ryan Sean Adams?

  Let's look at ETH locked in DeFi, though. That's where I think this chart gets interesting. I'll focus on the chart. We're at 7.8 million ETH locked in DeFi.

• 13:34David Hoffman?

  Which is an all-time high.

• 13:35Ryan Sean Adams?

  This is an all-time high. Well, let's see. Let me scan out. Yeah. No, close.

• 13:41David Hoffman?

  Close, close.

• 13:42Ryan Sean Adams?

  Super close.

• 13:43David Hoffman?

  Yeah, count it, tied.

• 13:44Ryan Sean Adams?

  All-time high since April, right?

• 13:47David Hoffman?

  Yeah.

• 13:48Ryan Sean Adams?

  And really close to the all-time high ever. So that's a good sign. I think it's nice for ETH to become more reliant on this much more trustless piece of collateral, rather than all of kind of the stablecoins that we've seen going around the ecosystem. So, okay, how about DeFi Pulse Index? Where are we at with DeFi tokens themselves?

• 14:09David Hoffman?

  Yeah, the DeFi Pulse Index started the week roughly, can you go to the one-week chart? Started the week at $327, hit the high of the week at $348, and the low was $275. Again, you're seeing a lot of that volatility in the DPI token, ending the week at $304, overall down 6% on the week.

• 14:32Ryan Sean Adams?

  All right, now we're going to take a look at this chart, which is the ratio of DPI to ETH. It's not DeFi season yet, David.

• 14:40David Hoffman?

  No, it's flat. Last week it was at point 1, this week it's at point 1, so we are flat on the week, with some inter-week volatility as well, but...

• 14:49Ryan Sean Adams?

  You sound sad about that. Are you sad about that? You want DeFi season to come back?

• 14:54David Hoffman?

  I do want DeFi season. It's always so much fun. But like NFTs just don't stop being bullish. And so like all the attention keeps on going there.

• 15:03Ryan Sean Adams?

  Yeah, we should start putting some NFT indices on this. Like, I don't know the best one.

• 15:07David Hoffman?

  We need some, we need some DeFi NFT infrastructure to come out. People need to start using fractional more so we can stop talking about the floor price because the floor is just such a terrible metric to actually measure the value of these things. Yeah, dude, if there's a bankless listener out there who has a good idea for a consistent metric we could use to talk about the value of NFT markets over time, let us know.

• 15:28Ryan Sean Adams?

  We've seen some indices, but nothing that has kind of the mind share of something that we would need to to report on this like prestigious, high journalist integrity media outlet, which Bankless is.

• 15:42David Hoffman?

  Wait, I can't tell if you're being facetious or not.

• 15:44Ryan Sean Adams?

  Oh, no, that was 100% serious. Let's talk about the bed index. That is our favorite index in crypto composed 30% Bitcoin, 30% ETH, 30% DPI itself. What are we looking at on the week?

• 15:57David Hoffman?

  Yeah, down 4% on the week. Started the week at 136, hit the high of 143, hit also a low of 115, ended the week at roughly $134.

• 16:09Ryan Sean Adams?

  There you go. You know, David, I think it's time we check in on our friend EIP1559. I mean, it's been

• 16:15David Hoffman?

  Great guy.

• 16:16Ryan Sean Adams?

  Two months now. Yeah, great guy, doing great things, just like busy burning. You know, every day ETH is burnt is a day that I am bullish, sir. But let's look below the surface. That's the title of this article itself. And what does EIP1559 look like below the surface? Has it accomplished its goals?

• 16:34David Hoffman?

  Yeah, so the author, who is named T, does a fantastic write-up, just kind of trying to parse apart the data of EIP1559. And the cool thing about EIP1559 is that like, the data that comes out for it is like, not known how significant that data is, what it really means. EIP1559 is emergent, as in the properties and behaviors and data that arrive out of EIP1559, there is no canonical like

• 17:01David Hoffman?

  Definition of what these things mean. And so this was actually one of the best.

• 17:06Ryan Sean Adams?

  There's no history. It's never been done.

• 17:07David Hoffman?

  There's no history, like not only has it never been done in crypto, but like blockchains and EIP. Like, everything is new. Everything is new. And so there's a lot of data here and T gives his interpretation and analysis. But he definitely qualifies it saying like, hey, this is just my take and like it's we're gonna need to have more data to see what these things mean. There's a ton of fantastic graphs and and some analysis which with each one. So if you want to just learn more about how EIP 1559 is impacting Ethereum and Ether. Definitely check this out. It's a great homework assignment for people who are trying to dive deeper to the code of Ethereum and the ETH markets. And they're just over some great analysis.

• 17:47Ryan Sean Adams?

  What is his take here, David? Like, what's the the summary of it? Is EIP 1559 working as designed or no?

• 17:54David Hoffman?

  Yeah, it's absolutely working as designed. What he was trying to indicate is like, well, okay, it's working as as designed. But like, how does that actually change things, right? Like, we know, we know EIP 1559, it like, it makes it easier to transact. It burns ETH. But what does that actually do?

• 18:13Ryan Sean Adams?

  Like, so like, what does it do to daily miner sell pressure, for example, is one graph in here?

• 18:18David Hoffman?

  Right. And like, how does it actually impact the ETH price at all, right? And his his take, if I remember correctly, is like, in the short term, it actually doesn't impact the ETH price at all. Because the Ether that's being burnt is like the literally the most elastic portion of the ETH supply. It's the most flexible that actually doesn't impact the price. But what it does do in the future is that it it'll prevent price drops in the future, right? So really, it's like, and this is actually.

• 18:46Ryan Sean Adams?

  Setting a floor, a higher floor.

• 18:48David Hoffman?

  Helping set a floor, right? And so in the in the future, especially in the long term future, this is like, and this is actually what I said in my original EIP 1559 article is that it's paying like EIP 1559 when it burns ETH. It's like Ethereum putting security in a rainy rainy day fund, right? It's like when it when there does come a time of high stress environments, that reduction in sell pressure because we've been burning it for the past one, two, five, 10 years, there's just simply less ETH available to sell. And so one of one of his takeaways, which again is up for interpretation, is that during future like volatility events, the downside should be dampened as a function of how much total ETH was burned.

• 19:30Ryan Sean Adams?

  Yeah, that's why I say a full circle. It goes back, every day that ETH is burnt is a day that I am bullish. And that's long-term bullish. I can't tell you what's going to happen in the short run, but long-term, this is a secular trend. I mean, we passed a billion dollars worth of ETH burnt, right? Over 300,000 ETH.

• 19:48David Hoffman?

  Today, we actually passed 400,000.

• 19:50Ryan Sean Adams?

  400,000 today, right? And so like, this, um, this pressure is just going to keep compounding on Ethereum, then you get the merge. Everything bankless listeners know, so we don't have to belabor that point, but bullish. I'm glad someone has done, uh, some deep diving on EIP 1559. David, let's also talk about DYDX. That was a story with some numbers in the market section. We love to talk about numbers. This is Antonio. Antonio is the founder of DYDX. He's going to actually be coming on the podcast on Citi Nation on Tuesday, right? So he says, "Five years I left Coinbase." I remember when he tweeted that he left Coinbase. He eventually founded DYDX. Today, DYDX is doing more trade volume than Coinbase.

• 20:33David Hoffman?

  God, like, hell yeah. Just a, what is the moment of reflection? Five years it takes, that's what it takes, five years for a DeFi protocol to get built? And then do more volume than the company that originally hired the guy? Like, wow, that's crazy. Congratulations, Antonio.

• 20:47Ryan Sean Adams?

  Yeah, it's, it's, uh, it's huge, Antonio. So like, uh, looking forward to talking to you soon. And, um, this is the market share. This is a, a graph of the market share of DYDX. They're up to 27% market share of decentralized exchanges.

• 21:02David Hoffman?

  Right, yeah, Dex volume, right.

• 21:05Ryan Sean Adams?

  And this includes some of the, you know, cellular Dexes like PancakeSwap and that sort of thing too. So actually even higher than that, probably in terms of real Dex volume.

• 21:15David Hoffman?

  Totally, totally. And like, the other cool thing is like, this is the second decentralized exchange app to pass Coinbase in volume. Uniswap being the first. Uh, I'm pretty sure Coinbase actually, I mean, over time has done more volume and like sustains itself like as the leader over time. But like, hey, like breaking it over a 24-hour period or even a seven-day period, which Uniswap has done, is just the first step.

• 21:37Ryan Sean Adams?

  Yeah, well, D Y D X is doing a lot of things right, right? So like Perpetuals is a fantastic product. Everybody loves that. They were one of the first to roll out on layer two. So under the hood, this is all Z K roll up technology, right? And also, I think what's given them steroids, some extra juice is kind of their token rollout, the token launch, which they're using for liquidity mining. But you have an alternate theory as well as to why it's gained so much traction recently. Tell us about that, David.

• 22:08David Hoffman?

  I think these theories are definitely paired. Like, everyone likes tokens, and when tokens exist, they attract a lot of attention towards the app. But also, at the same time, we have China banning crypto, and apparently it's real this time. And the reason why we know it's real is because we can see Chinese actors actually making decisions to

• 22:27Ryan Sean Adams?

  Exchanges.

• 22:27David Hoffman?

  Exchanges, like outflows. You can actually see this in the blockchain, right? Which is like the ultimate source of truth. And that is the clear differentiator between this China ban and the infinity other China bans that we've seen. And so, there was speculation that all of this demand out of all these Chinese exchanges to trade and speculate and do exchange things has gone from these Chinese exchanges to D Y D X, to a trustless DeFi exchange, which operates on a similar performance level because of the layer two as the exchanges that they are fleeing from. And so I think the big takeaway here is that when a nation state like China comes and bans crypto, where do they go?

• 23:10David Hoffman?

  They don't go to another alternative, like more Western centralized exchange. They go to DeFi, right? Because they just got, quote unquote, censored. And so they're not going to go on to another censorable platform. They're going to go on to a DeFi platform. And so there's an article here out of Coin Telegraph that says, "The D Y D X token gains 80% in a week. What's driving the Dex token rally?" And their subline is, "Traders raised their bids for the decentralized exchange token, believing as it would benefit from China's decision to classify all crypto transactions as illegal." And so there's speculation that people are moving on to D Y D X in order to escape China, which just makes sense. Like, go on to the censorship resistant platform after you get censored by your nation state. That's what they're for.

• 23:51Ryan Sean Adams?

  Well, yeah, there's sort of a crypto narrative for you. It's like China ban equals bullish for DeFi.

• 23:58David Hoffman?

  Bullish banning.

• 23:59Ryan Sean Adams?

  That could be what's happening. Love that, man. Love that. I think that could be what's happening. David, let's also explore another trend that's happening. This is the trend to total locked value in the multi-chain, as people say. So this is interesting. This is a plot of market cap of Ethereum and a number of other chains. And obviously, we've seen sort of a alternate layer two kind of resurgence with, you know, I guess Binance earlier in the year, and then Solana and Avalanche more recently, starting to really increase in market cap. And this is interesting when you look at a market share perspective, but I think it's actually

• 24:43Ryan Sean Adams?

  more interesting to look at from a total locked value perspective, right? So Ethereum dominance has dropped from 84% of total locked value to 77%. So it's down, you know, I guess 7%, right? And then Binance has gone down a little bit. Solana has gone up from about 1% to 4% to 5%. Terra has gone up a little bit. Avalanche has gone from basically nothing to 2% in Phantom as well. I want to get your take on like, what do you make of this? Is total locked value, is it moving into these other ecosystems? And is that to the detriment

• 25:24Ryan Sean Adams?

  of Ethereum? What does that mean for the space? Is that bullish alternative layer ones? What do you think?

• 25:31David Hoffman?

  Yeah, so the take here, and I've been, we've been saying this for forever now, is like during bull markets, Ethereum's capacity gets consumed. And there's overflowing demand that Ethereum cannot satisfy because it has not done like layer one sharding in the L2 ecosystem is about as nascent as the alternative L1 ecosystem. So when there's overflow for Ethereum main chain demand, when gas fees like, you know, exceed $100 a transfer, people need to go elsewhere. So some go to layer twos, some go to other L1s. And so what we're seeing here is that like, the crypto industry has done a fantastic job bringing new people in. And they, a lot of new people don't want to or simply can't transact on the Ethereum

• 26:12David Hoffman?

  L1, so they go elsewhere. The interesting story here to me is the lack of consensus as to where else to go, right? So Binance Smart Chain was like the first app, the first like other alternative L1 to like absorb some of Ethereum's overflow. But we've seen that actually go down this week while Solana, Terra, Avalanche and Phantom have all gone up. There doesn't seem to be a clear consensus as like, oh, Ethereum is full. Here's where we go next. Everyone's just going everywhere, right? And anti-prosynthesis, one of like, he's probably the only person that will actually accept the ETH maxi label willingly, has tweeted out this one tweet, which I really, really like is like, you

• 26:52David Hoffman?

  know, if you ask like, what alternative L1 is going to kill Ethereum, you'll get 10,000 different answers. Because like, there actually isn't like a viable, like the next second place to Ethereum, right? There's just like five third places. And that's why you don't see any of the overflow to Ethereum going into one specific blockchain. They're all kind of getting spread out.

• 27:15Ryan Sean Adams?

  I remember when Raul Paul came on the podcast and he mentioned briefly about like Ethereum dominance going down from its highs, right? In terms of total locked value. He's like, yeah, it'll probably like decrease from 85% to like 75%, maybe 70%. But that's still a lot.

• 27:35David Hoffman?

  Right. Especially when everything is 10x-ing, right?

• 27:38Ryan Sean Adams?

  Yeah. It's basically sort of a, you know, prediction of power law winners in this space, which, you know, I tend to kind of agree with. But I have another take on this too, which is like, I think actually David, total locked value can be a flawed metric in some ways. And made this point in an article that I wrote in 2020 on Bankless, talking about trustless economic bandwidth versus like economic bandwidth that is more trusted. And what I meant by that is like, it is more valuable from a bankless and decentralization perspective, right? To have capital on chain, which I call economic bandwidth, so value

• 28:21Ryan Sean Adams?

  on chain, that doesn't have any outside trust dependencies, right?

• 28:25David Hoffman?

  Which is the whole point of this whole thing.

• 28:28Ryan Sean Adams?

  The whole point, right? So like, if you're looking at USDC versus DAI, right? DAI is better. It's more trustless because it has less trust guarantees. It has less USDC inside of it. It's backed by other things like ETH, for example. And if you look at another asset on-chain like RAI, which is fully backed by ETH, that is, you know, less trusted still. And if you look at ETH in and of itself, right, that is the most trustless asset on Ethereum, right? And so what we miss when we look at just pure total locked value, total value locked, is we miss whether this is like actual trustless value, or whether it's just some kind of a, you know, a stablecoin.

• 29:12Ryan Sean Adams?

  We also miss the settlement guarantees of the chain, right? So like, if we wanted to look at this and put another, I guess, column here, we could look at the Coinbase sidechain, right? What's Coinbase? It's a ledger. It's a sidechain. It has one validator, and that is like the Coinbase organization. But it has like shareholders, right? It has DAO participants. Anyone who owns coin shares, I guess, has governance vote over it, right? So why not include them from a total locked value perspective? Well, we don't, because we don't call that DeFi. But there is this scale, right? Ethereum is the most decentralized, you know, DeFi platform. Coinbase is not decentralized at all.

• 29:55Ryan Sean Adams?

  And some of these chains are like somewhat in the middle. And I think a lot of this looks, starts to look a bit more like, like a Phantom, for example, or a Terra, for example, or even a Polygon in sidechain. Example, looks a bit more like fintech and a bit less like permissionless, trustless DeFi. That's why I think total locked value can be misleading. Are we talking about trusted total locked value? Are we talking about purely trustless total locked value? The trustless is the stuff that I care about and the stuff that is, I think, the most sustainable and, you know, fits the protocol sync thesis of being like the most permanent and foundational for this whole operation. That explain that? Does that make sense?

• 30:39David Hoffman?

  A hundred percent, a hundred percent. And if listeners want to dive more into this, I highly recommend reading the article from Nick Carter called "It's the Settlement Assure" Assurances stupid and then or if you want to consume something out of bankless there is

• 30:54David Hoffman?

  A talk I gave at ethereal called settlement assurances and the protocol sync thesis and it describes the spectrum of just like not all When you make a transaction on a blockchain not it doesn't necessarily they're not all created equal right not all transactions are equally as Trustless or equally have as strong settlement assurances right so like when you send a Litecoin transaction Litecoin blocks happen every 2.5 Minutes does that mean when that block finalizes on Litecoin that you have as the same amount of settlement assurances as when you do when you make A transaction on Bitcoin no absolutely not those are different levels of settlement assurances therefore different levels of trustlessness and each

• 31:33David Hoffman?

  One of these blockchains have are on that same sort of spectrum how strong are the assurances that you have when you make a transaction that That that transaction actually settles and the answer to this question needs to go into the architecture of the actual blockchain itself but also The asset that you are also transferring right and so if you send us DC

• 31:53Ryan Sean Adams?

  Both of those things

• 31:54David Hoffman?

  It's both of those things if you send if I send Ryan us DC on Ethereum well actually did it really settle or not is actually not really Related to the architecture of Ethereum or any other blockchain that's on because you're actually trusting circle to actually be these final arbiter Of final settlement right and so these are very nuanced subjects and this is if you do not if you have this is a new concept for you settlement Assurances I highly and highly encourage you to go go read it's the settlement assurances stupid by Nick Carter and then also the settlement Assurances and the protocol sync thesis video which is on the eth ethereal YouTube and then there's also some things I will put them in the

• 32:34Ryan Sean Adams?

  You know what yeah that's it we'll just do you guys a favor and put some of this stuff in the show notes but it does require but the last thing I'll Say on this is this David is I don't think this is a zero sum game either right like more value more eyeballs more entrance into whether it's A more like centralized side chain or some alternative layer one it's all good for the space it's all good Ethereum, I think it's all good for Bitcoin, right? People often think that like this is some sort of a tribal game where there's going to be big losers and big winners. But like, even like, look, man, Ethereum is good for Bitcoin. Like Bitcoin maximalists don't know it, but it is. It's been, you think Bitcoin would be above 40K if not for Ethereum? Hell, no.

• 33:19David Hoffman?

  Absolutely.

• 33:19Ryan Sean Adams?

  Absolutely no chance, right? And it works the other way, too. I mean Bitcoin, Ethereum wouldn't even been possible about Bitcoin. So none of this guys is a zero sum game either. This is all going to be good. And we think the most decentralized protocols eventually will sink to the bottom, win the most market share and be the most dominant. And that's a good thing if that happens.

• 33:40David Hoffman?

  Well, it actually even goes even further than that, right? So like when you have a maximally decentralized protocol, you can build centralized stuff on top of that. You can compromise on decentralization later, right? And so another article that, and also a bankless podcast, I think number five. It's called the two faces of Ethereum or the DeFi risk spectrum or the DeFi trust spectrum. The cool thing about maximizing decentralization is it allows you to compromise on decentralization later, right? But you have to get decentralization first. And so if you want to build a centralized permission sidechain on Ethereum, like you can do that, right? Like you have that option available.

• 34:19Ryan Sean Adams?

  But you can't do the opposite.

• 34:20David Hoffman?

  Yeah, exactly. You can't put the cart before the horse.

• 34:24Ryan Sean Adams?

  Yeah, you can't build Ethereum on the sidechain. Absolutely, guys. Well, we got excited about that portion, but we got to keep moving on.

• 34:30David Hoffman?

  I wonder why our rollups last so long.

• 34:33Ryan Sean Adams?

  I have no idea. Hopefully you guys enjoy them. We definitely enjoy doing them. So, all right, well, this is what's a graph that graphic that caught my eye. This is from Coin Metrics. Their newsletter is fantastic, by the way, comes out weekly. But this is a chart of the Uniswap three trading pairs. And you can see the various assets that are trading with. You see Tether, you see USDC, you see DAI. But this big pink cloud that you're seeing, that's all ETH, right?

• 35:02David Hoffman?

  Trustless economic bandwidth.

• 35:04Ryan Sean Adams?

  Trustless economic bandwidth on Ethereum and.

• 35:08Ryan Sean Adams?

  I think the position, what this graph is really showing us is on Ethereum, and I think in general, across DeFi, ETH is positioning itself and becoming positioned by default to be the reserve asset of DeFi, right? This is back to that narrative. We talked about reserve asset of NFTs, talked about reserve asset of the metaverse even, which is kind of a newer thing. But back to the reserve asset of DeFi, it's bearing out on the graphics. That's what Uniswap is using as its primary trading pair, and that's a great thing for decentralization. Any other follow-ups on that, David?

• 35:42David Hoffman?

  No, I think this actually fits in right into the conversation we were just having. Yeah.

• 35:46Ryan Sean Adams?

  Yeah, absolutely. Okay, last thing for you, on the market side of things, pretty big milestone for Polygon. Again, this is their sidechain solution, the proof-of-state type solution, but they just eclipsed Ethereum Layer 1 in daily active addresses for the very first time.

• 36:04David Hoffman?

  Okay, so this is a great illustration of why it's actually valuable to compromise on decentralization, because you can scale better that way. Centralization actually scales really, really far, because you've actually compromised on decentralization. But because Polygon is built on Ethereum, they get to give all of their users the ability to exit into the more trustless, into the more decentralized version of the universe, right? So you can get more scale by reducing decentralization, but once you hook into Ethereum, you also get the benefits of Ethereum.

• 36:39Ryan Sean Adams?

  Yeah, absolutely. And look, this is not a new idea either. We just call them sidechains, this sort of thing now, but like, where did you guys start your crypto journey? I bet it was on an exchange, a centralized exchange, right? Which is a sidechain, which then you then exited to continue the DeFi world. Same thing is happening here. But anyway, I think a lot of users will start their journeys on, obviously, exchanges, on sidechains, and on Layer 2s, and that's where we're going to see the user growth. We'll probably see the capital growth on mainnet, but the user growth will happen on these Layer 2s and sidechains.

• 37:13David Hoffman?

  100%.

• 37:14Ryan Sean Adams?

  All right, David, last thing, total locked value in Tracer just exceeded $20 million. So it's super cool. And I know you did a Meet the Nation with them. When's that coming out?

• 37:25David Hoffman?

  It's coming out Monday at 12:00 PM Eastern Time, 12:00 PM Eastern Time. It walks us through the history of Tracer DAO. They have one of the most interesting genesis stories I've ever heard. As well as where the team actually got the expertise, where they got the idea, how, what their roadmap is and where they are going. So if you want to learn more about one of the most promising young DAOs that I've ever seen, check out Tracer DAO.

• 37:48Ryan Sean Adams?

  Yeah.

• 37:48David Hoffman?

  On the Meet the Nation, on the Bankless YouTube.

• 37:50Ryan Sean Adams?

  Building on Arbitrum, Perpetual's protocol, you've heard us talk about it in previous rollups as well. All right, guys, we are going to be back with the releases for the week, but before we do, we want to thank the sponsors that made this episode possible.

• 38:02David Hoffman?

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

• 38:46David Hoffman?

  Just look at the size of the Uniswap treasury. It's almost $3 billion. This mountain of capital is looking for labor. Do you have something of value to contribute to the Uniswap DAO? No matter how big or small your idea is, you can apply for a UniGrant at unigrants.org and help steer Uniswap in the direction that you think it should go. That's exactly what we did to get Uniswap to be a sponsor for Bankless and you can do the same for your project. Thank you, Uniswap, for sponsoring Bankless. The era of proof of stake is upon us. Proof of stake systems like Ethereum, Terra and Solana allow the industry to move away from the hot, loud and wasteful proof of work systems and return back to a cottage industry of individual stakers and individuals.

• 39:28David Hoffman?

  Individual validators, and that is what we need to make this industry stay decentralized. Individuals must play their part in crypto network validation. And that is what Lido is here to do. Lido makes staking accessible to everyone at the click of a button. By delegating your stake to Lido's network of nodes, you can access the yield offered by proof of stake systems and claim your share of the network transaction rewards. Do you have 32 ETH and want to stake it to Ethereum? But running a node sounds intimidating? Or maybe you have less than 32 ETH and you need to pool your ETH with others so you can access staking yields. Lido offers a solution for both. Simply go to lido.fi, choose which assets you want to stake, and deposit them to the Lido validating network.

• 40:10David Hoffman?

  Lido is working to make sure proof of stake stays as decentralized as possible and is committed to decentralizing its own validating network to eventually become a completely permissionless protocol. So if you want to stake your ETH, Terra, or Sol and get liquidity on your stake, go to lido.fi to get started.

• 40:27Ryan Sean Adams?

  All right, guys, we are back with the hot releases of the week. The first is this, David. Connects is launching an NXTP protocol, they say, to improve liquidity. Connects, of course, is dealing with the Ethereum multi-chain space. So the ability to transition and move seamlessly assets from, say, an Arbitrum to an Optimism back to mainnet without waiting for anything. It's kind of an interoperability protocol. What are they doing here?

• 40:55David Hoffman?

  Yeah, if you guys remember, Ryan and I are talking about hop protocol. It's very, very similar, just hopping assets between layer twos. Connects has actually been in the Ethereum space for as long as I can remember, working on payment channels, which we all know is a very foundational, fundamental piece of technology. But it's kind of been a solution looking for a problem. Because we tried, we all, we used to think, oh, we'll scale Ethereum with payment channels. And then we forgot that, like, well, you don't have generalizability on payment channels. That's really, really hard. And so like, we have this awesome piece of technology led by Arjun Bhupthani and a bunch of other people working on payment channels. But now with this layer two ecosystem absolutely exploding,

• 41:37David Hoffman?

  we actually now have the problem that we have the technology to solve for. And so Connects has been re-appropriating their already existing payment channel tech to span payment channels between all the different layer twos. I think two weeks ago, we shouted them out because they recently passed $500 million in volume over their NXTP protocol, but that was before they announced the mainnet, which is what they are announcing right here. So they have the NXTP protocol mainnet, which is going to help you live a life on Layer 2 by bridging all the Layer 2s, so you never actually have to touch the Ethereum L1. They had a blog post forever ago announcing

• 42:18David Hoffman?

  what they were building, and they had a fantastic meme called "The L1 is lava," as in like, you never actually have to touch the L1.

• 42:24Ryan Sean Adams?

  Don't touch it?

• 42:24David Hoffman?

  Don't touch it, yeah. And so this is what it means to be a citizen, I think, in the whole global nexus of Ethereum, which is, only if you want to, do you have to actually go to the L1.

• 42:36Ryan Sean Adams?

  These bridges are super important, really essential infrastructure for the next wave here. Speaking of infrastructure, Andre, the founder of Wire and YFI, of course, a famous DeFi builder in this space, he is launching an NFT marketplace, or has launched an NFT marketplace. But the title of this article, this is a Coinbase article, says, "Andre's new NFT marketplace is a vampire attack suicide pact." Wow. Well, like, what is that? That sounds like some hyperbole. He's going up against OpenSea, I guess? That's the vampire part of this. What's your take here, and what does this mean?

• 43:14David Hoffman?

  Well, I think after OpenSea had that drama with the insider trading employee, who they have since let go, everyone has been asking, it's like, "Hey, wait a second, OpenSea, it's not a DApp. It's not an application. It's a company." And so now, there's been some attention on decentralized marketplaces, peer-to-peer marketplaces for NFTs. And so Andre, in his tweet that we're watching here, he's demoing what very much looks like an OpenSea-type format, but apparently it's a P2P version of that.

• 43:45David Hoffman?

  It's also built on Phantom, apparently, which Andre Cronier is a big fan of. But he's also built other things on Phantom before that. He ultimately just ports to Ethereum because that's where all the users are. And the title of this piece, "The Vampire Attack," is alluding to like, well, OpenSea doesn't have a token, and we all know what happens when like something that doesn't have a token gets forked and then a token is added before that original token exists, right? We saw this with the Sushi Swap drama. That's how Sushi Swap came into existence in the first place, and Vampire Attacked Uniswap before Uniswap had a token. And so the idea is that this new NFT marketplace is, in theory, going to get a lot of adoption if it can find a way to Vampire Attack OpenSea.

• 44:27David Hoffman?

  OpenSea's code is not open source and verifiable, so I think that makes it a little bit more difficult to actually do that. I'm not a coder, so I don't know, but I'm pretty sure that's true. But either way, the incentive to Vampire Attack OpenSea before it has a token is really, really strong. We were actually recording with Devin Finzer tomorrow, Friday.

• 44:50David Hoffman?

  Today's Thursday, and so I'm actually going to be asking this question, like, yeah, like, wait, wait a second, Devin, like, how are you guys going to like have a moat if you don't have a token?

• 44:59Ryan Sean Adams?

  Yeah, the other important piece here, of course, is like they're going to be expanding each chain, but this is all open source as well. So Andre's going to release this as an open source project. But in general, I love competition like this, David, because I think it leads to better user experience, better products, cheaper products for the end customer. So Vampire Tax, bring them on. It's great. It just ups our game. Let's talk about this, David. Coinbase just released a direct deposit feature. So this allows users to get paychecks in crypto. It's not what you've always wanted. If you're like working in a corporation, right? Getting a paycheck in crypto, in USDC, or maybe some slice of that in Bitcoin or ETH,

• 45:44Ryan Sean Adams?

  maybe the Bed Index someday, rather than getting it into your Wells Fargo account? How much more convenient is that? Looks like... Coinbase is making a play there and it's fulfilling sort of some speculation that we've had in the very early days of Bankless that all of these exchanges would slowly transform into banks. We called them crypto banks in the early days and this is the next checkmark, right? Oh, direct deposit, just like a bank? Yup, we're doing it. What's your take?

• 46:11David Hoffman?

  First off, much better banks. Let's divide a line between

• 46:15Ryan Sean Adams?

  Upgraded banks.

• 46:16David Hoffman?

  Upgraded banks, like crypto-powered, crypto-enabled banks. And we're going to talk about this later, but like, the more and more that Coinbase becomes a bank, the more and more it threatens all the other banking institutions out there, which according to, I think, some of the incumbents will be argued it presents a systemic risk, right? Like, if Coinbase is literally so successful that it sucks up all the deposits of the other banks, the other banks are literally in trouble and they are very, very integrated into the rest of the financial system. So this is probably causing a bunch of concern from all the boomer banks out there that aren't crypto-powered, while they watch Coinbase just like run circles around them when it comes to innovation and just consumer benefits.

• 46:58Ryan Sean Adams?

  Look, it's not just us saying this. This is exactly what Kathy Wood told us when we had her from Ark Invest on the podcast a few weeks ago. She's like, "Hey, you're seeing this ugly regulation? Because the banks are scared. Like, they're pushing on the regulators to go do something in DeFi and crypto." And maybe that's what we're seeing. Endgame-type stuff, I think.

• 47:17David Hoffman?

  If I never have to touch Wells Fargo again, I can get all of my basic financial services out of Coinbase, which are so basic, by the way. I just need direct deposit, which they just enabled, and then just the ability to like transfer money and pay my credit cards. Like, there is not very many steps left before I just have to fundamentally question why I keep my Wells Fargo account.

• 47:36Ryan Sean Adams?

  Oh, David, we've got some more shade on Wells Fargo coming in this podcast. Wait to the news section, my friend. Wells Fargo, get ready. All right. USDC as well has been enabled in AngelList. So AngelList is a very popular kind of angel investing platform. And now they are enabling not just Fiat, but USDC. So this is another step for USDC to gain Some traction in kind of the emerging fintech space, which is also awesome. Speaking of fintech and DeFi mullet type stories, we got fintech in the front and DeFi in the back. Affirm, have you ever used Affirm? They're like a fintech type product, but they like split payments or no, they delay payment, right?

• 48:19David Hoffman?

  Yeah. So they turn some one expensive purchase into like a monthly thing that you can pay for over time.

• 48:24Ryan Sean Adams?

  Okay. I hate those things personally, but I understand that, um, you know, there it's an interesting product and clearly they have some adoption. What's interesting about this story is they're kind of pivoting to DeFi, not entirely pivoting, but they're rolling out debit cards that allow customers to buy and sell crypto directly from savings accounts as a product. So, you know, I think it's interesting here is they've got some traction, product market fit with their single killer app feature, right? And now where are they looking for the green space opportunity? Well, it's all crypto and they appeal to millennials, Gen Z, sort of that demographic.

• 49:03Ryan Sean Adams?

  Guess who likes crypto? Same demographic. This is the DeFi mullet thesis playing out where fintech companies start building on top of decentralized protocols and I'm here for it, man. I love this stuff. We're going to see more and more of this stuff throughout the year and throughout the like the years to come.

• 49:22David Hoffman?

  It's kind of interesting that the crypto thing about their, their new product has nothing to do with the core business. But that's also also kind of cool, right? It's like, it doesn't even matter. It's just, they think it's valuable enough that they're doing it anyways. And the more and more we can get companies to do this, the more and more crypto gets integrated into our actual economy, our fintech economy, our existing economy. The harder and harder it is for regulators to gut that stuff out after it already gets integrated.

• 49:48Ryan Sean Adams?

  It's a heat shield for the regulatory heat for sure. When we have more adoption like this. Dave, this is interesting too. So I guess the index co-op folks are creating a polygon index, right? It's called PDI. It sounds like it's an investment, it's an asset that you hold that invests in a whole bunch of polygon assets? Like polygon apps and this sort of thing?

• 50:11David Hoffman?

  Yeah. I think it's like the polygon app layer token. So if you want to not only bet on polygon by buying Matic, you can also bet on the polygon app layer by buying the polygon diversified index from index co-op.

• 50:23Ryan Sean Adams?

  That's really cool. I was curious where Index would grow and it looks like they're pressing into all of these interesting spaces. David, last thing for the week, NAMI is a Layer 2 scaling effort as well. I don't know too much about NAMI, but they have just announced 8 million in funding led by Dharma Partners, and they are supposedly bringing some ETH scalability to Layer 2. It's kind of an optimistic roll-up type approach, plus some state channels, but I don't know much about this project. Any takes here?

• 50:56David Hoffman?

  Yeah, I also don't know much about it. It seems to be coming out of left field for me. A couple of people I've talked to have had some grumblings about being, they're just a little bit unsure as to what the product actually is. I think it's going to be a wait and see for me.

• 51:11Ryan Sean Adams?

  Yeah, absolutely. But that is out now. Let's talk about raises, David. The big raise of the week, I think, is this social token raise with the Roll Protocol. So, we've been talking about social token infrastructure. It's starting to attract more and more capital. They just raised, Roll raised $10 million, and Roll's kind of like this social money experiment, would you say? It allows people with followings, communities, to issue their own token in easy ways. You don't have to deal with smart contracts and fork code. They just make the whole thing easy. Any takes here?

• 51:45David Hoffman?

  My take is that actually I think social tokens and DAO tokens are actually kind of closer than what people think. These things aren't very well-defined, and I think we're only going to define them as they get more and more used and more and more built out. And so, stay tuned.

• 52:03Ryan Sean Adams?

  This goes back to like thousands and thousands and tens of thousands and millions eventually of tokens are coming, right? I don't know that regulators are prepared for that world either, but they're coming, like it or not.

• 52:16David Hoffman?

  The regulators are waiting for them to show up at their door to ask permission.

• 52:20Ryan Sean Adams?

  Yeah. Last thing for you guys before we get into the news is jobs. This is your weekly reminder. Get a job.

• 52:26David Hoffman?

  Get a job.

• 52:27Ryan Sean Adams?

  For a DAO. Go, go work for crypto. Go do your part. We've got a community manager role from Aragorn. I'm, I'm lord of the re- this is like Aragon and also a founding blockchain engineer at Highlight, a senior software programmer from Popcorn, community lead from Popcorn as well, senior front end web developer for Tracer DAO. In addition, I don't know, there's dozens more of jobs on this board. So if you are looking for a job in crypto, best way to get it is on the Bankless job board. Go check that out. We'll include a link in the show notes.

• 53:03David Hoffman?

  And I bet you a decent number of those jobs come with tokens and everyone likes tokens.

• 53:08Ryan Sean Adams?

  Never know, never know. All right, guys. News time. David, what are our news headlines for the week? What are we going to talk about?

• 53:15David Hoffman?

  Yeah. Coming up first, we're going to lead with the fun stuff is NFTs on Twitter. Yay. And so if you have an NFT that you think is especially cute, or you're crypto punk that you think is especially cool, you can now prove to the rest of Twitter that has literally something that you do actually own, instead of just right click saving it. And so that's pretty cool. Ethereum has found its way into the depths of Twitter and is doing it with NFTs. I've been saying this a bunch of times on the Bankless program and I'll say it again. NFTs are how Ethereum markets itself to the rest of the world. It's literally Ethereum's marketing surface area. It's the social flexing aspect of things and it's also the verifiable aspect of things.

• 53:57David Hoffman?

  And so Ryan, you got a tweet here that you tweeted out saying Twitter should roll out a blue checkmark for NFT profile pics. Just validate them against Ethereum. Every social network will be doing this. It's the most obvious feature ad ever. And that came in August 29, which was a month ago. And then just recently, we have a developer at Twitter teasing what an NFT verified profile might actually look like. And so that involves actually syncing up your address with some of the various options that we all know and love, like MetaMask, Coinbase Wallet, Trust Wallet.

• 54:29David Hoffman?

  Argent and if you have an NFT in those addresses that you link, you can sign a transaction to verify you own a NFT. That's pretty cool.

• 54:40Ryan Sean Adams?

  This is awesome, man. This is exactly what crypto wanted. This is exactly it. All we wanted was for Twitter to authenticate and verify our NFTs as profile pictures on, on the platform. Right. And here they are. They're doing it.

• 54:54David Hoffman?

  Look at that little ETH logo right next to their profile picture.

• 54:57Ryan Sean Adams?

  Yeah.

• 54:58David Hoffman?

  Do you think they're actually, do you think Jackson will allow that to make it into the production version?

• 55:01Ryan Sean Adams?

  Yes. It's not an Ethiopia flag, right? It's the ETH logo this time.

• 55:05David Hoffman?

  Checkmate, Jack.

• 55:06Ryan Sean Adams?

  It's kind of cool that they'll differentiate on what chain you own this thing, right? Because like, somebody could create a CryptoPunk clone on some other chain and it wouldn't be the same thing, right? So yeah, this is exactly what crypto needs. I think this will add massive legitimacy for NFTs. I think this is going to add value to NFTs. I also think every single social media platform is going to follow in their footsteps, right? Like Twitter is the lead here, then next is going to be Instagram, like Facebook, TikTok. Everybody's going to follow this trend. No one cannot now that Twitter's rolling this out. They're probably already working on it, David, right? Like when I tweeted this out in August, you know, I was just thinking about it. It was just like a shower thought. Like, wouldn't that be cool?

• 55:52Ryan Sean Adams?

  They were working on it at the time, obviously. It's a very obvious feature for these social network platforms.

• 55:57David Hoffman?

  I don't know, Ryan. I think they took your tweet and they ran with it.

• 56:00Ryan Sean Adams?

  I think it was your idea. I should, I've been tweeting Jack to like do lots of things on Ethereum and this is the only, only.

• 56:06David Hoffman?

  He listens to every single one. He just, I swear to God.

• 56:09Ryan Sean Adams?

  He just picks and chooses.

• 56:11David Hoffman?

  And at the same, at the same time, I'm going to front run this. We're going to, we were going to talk about this later. What am I going to talk about right now? You can now also tip on Twitter with Bitcoin. This is the other, the Bitcoin thing that they integrated as well. And so I'm looking forward to seeing the data as to what comes out. Who do, what do you think is going to be used more?

• 56:28Ryan Sean Adams?

  I know what I think, dude. I think people don't want to spend their Bitcoin. They want to flash their NFTs. They don't want to spend their Bitcoin. One's going to have product market fit. The other's barely going to do anything. Like unfortunately, like it's great, but.

• 56:42David Hoffman?

  Payments on Bitcoin. We've, we've tried this before.

• 56:44Ryan Sean Adams?

  We've tried that. We've been trying it since the inception of crypto, right? Like.

• 56:48David Hoffman?

  People don't care about payments.

• 56:52Ryan Sean Adams?

  Anyway, all right, let's talk China, David.

• 56:55David Hoffman?

  Okay.

• 56:55Ryan Sean Adams?

  So China banned.

• 56:56David Hoffman?

  Yeah.

• 56:56Ryan Sean Adams?

  Yeah, sad face. Okay, this, this is, I guess, stuff getting real in China. We've had bans before. This time, maybe it's different. We had Sahil on the podcast. If you guys missed that earlier this week, go check out our State of the Nation with Sahil, where we cover this in depth. But what's the, the high level take here? What are they banning? What does this mean for us?

• 57:15David Hoffman?

  Yeah, so what are they banning is a little bit kind of up in the air. I think it's more related to actual businesses. So if you are helping facilitate crypto transactions, then that's bad. But there, there's a little bit of speculation that simply holding crypto and owning crypto is still okay. It's going to be one of those things where we're just going to have to find out after the fact. Chinese regulators, they kind of get to do whatever they want, right? And so they will interpret their own laws in ways that will benefit them by their choosing. But as far as being a business in China, you are shutting down, basically, is what's going, going on. And not only are businesses inside of China, but businesses that are serving Chinese customers

• 58:00David Hoffman?

  are also restricting access to their platforms to Chinese customers. So we've seen mining pools not allow Chinese miners. We see exchanges that are based in China with a lot of Chinese customers have extreme outflows. And this is why we know that this ban is real, because we are actually seeing on-chain verifiable data and decisions being made by companies that are in China or relating to Chinese customers actually change their policies. So it's kind of like the easiest tell ever to figure out, oh yeah, this one's actually real.

• 58:29Ryan Sean Adams?

  Yeah, Huobi, which is a large exchange based in China, they are getting rid of, if you're, if you're a Chinese citizen and you're on Huobi, you have to exit, you have to leave, right? They're, they're blocking them all from their platform that's going to phase out. Also, you mentioned outflows, David. There was a Coinbase chart that just showed like ETH and Bitcoin outflows from Huobi like over the last few months, but then on, on, on the, the news of this. And it was just like this single red spike down.

• 58:58David Hoffman?

  Yeah.

• 58:58Ryan Sean Adams?

  Right?

• 58:58David Hoffman?

  Exit, exit all Chinese exchanges.

• 59:01Ryan Sean Adams?

  Largest decrease ever. Now, to some of your thoughts earlier, as we're talking about, maybe some of this is going to end up in DeFi. Like, this capital has got to go somewhere. And China's just squeezing the balloon. They're squeezing it outside of their borders, outside of their regulated exchanges. Seems like a short sighted move, but it's going somewhere else. Maybe it's going to DeFi. Maybe it's going to US exchanges. Maybe it's going to the binances of the world, but they don't want it in their jurisdiction. This is also something that I noticed this week, David, is they blocked CoinGecko, CoinMarketCap, and TradingView. It's all blocked in China now. So, great firewall, of course, you can VPN around that, I guess. But this is now more censorship of DeFi, maybe a direct

• 59:43Ryan Sean Adams?

  attack on DeFi and crypto to make these websites blocked in China. It's the first time they've been blocked ever.

• 59:52David Hoffman?

  Hey, as we all know, you actually can't ban crypto. You can only ban your own citizens from touching crypto. And so crypto, it's still actually in China, it's just now illegal for you as a Chinese citizen to actually touch it. And that's an important distinction, an important takeaway. I mean, how much can China, they've already banned video games, apparently. And so like, how much is China actually going to ban before their citizens are just fed up with it? I mean, it's China, so the answer is like, a lot. But there's a tipping point somewhere.

• 1:00:21Ryan Sean Adams?

  Yeah, absolutely. And I think they're just going to, you know, many citizens are just going to not listen, right? They'll just, they'll just find other avenues, ways of doing this, move capital the way they want to. All right, those are the three, well, actually, the third item that we wanted to talk about, I think we should save to the end of this, David, because that's kind of a deep, sober topic. Virgil Griffith, an Ethereum developer, was pled guilty, just pled guilty on Monday to some charges. We'll get into that in the detail. But first, let's talk about some happier subjects.

• 1:00:58David Hoffman?

  I'm not ready for that.

• 1:00:59Ryan Sean Adams?

  And then get back to Virgil Griffith.

• 1:00:59David Hoffman?

  Happy first, sad later.

• 1:01:01Ryan Sean Adams?

  Okay, so let's talk about this on Ethereum, is this $23 million fee. So, Bitfinex paid a $23 million fee accidentally, I believe, in just a kind of a routine type of transaction. What happened here?

• 1:01:18David Hoffman?

  Yeah, so what happened here was they swapped out the send value with the gas fee value, and so how much they wanted to send, they actually accidentally put into how much gas they were willing to pay. Whoopsies.

• 1:01:30Ryan Sean Adams?

  Have you ever done that?

• 1:01:31David Hoffman?

  I have not done that, no.

• 1:01:33Ryan Sean Adams?

  I've never done that either.

• 1:01:34David Hoffman?

  And I mean, things get really complicated when you're in an organization as large as Bitfinex and you're sending that much money. It's like, they're not using MetaMask, right? They're using their own proprietary software.

• 1:01:43Ryan Sean Adams?

  Yeah.

• 1:01:44David Hoffman?

  And when you do that, and they were, they were sending it on to Diversify, the ZK proof, Layer 2, and something just went wrong in the transaction. Fortunately, 99% of the time, transactions go to a centralized mining pool, and those mining pools are known individuals, and like, they don't miss when they just like get a random $23 million transaction. So that transaction actually got sent back because like, hey, you can just go knock on, knock on the centralized company's email address and, hey, we accidentally mailed you guys $23 million, can you send that back to us, please? And like, everyone knows who these people are. And so they sent it back. So the money ended up back in the, in the right spot. But the lesson here is that Layer 2 transfers have growing pains with them.

• 1:02:28David Hoffman?

  We still have to nail down our protocols and harden our code. These are the early days of Layer 2s, and things go wrong every now and then.

• 1:02:35Ryan Sean Adams?

  Yeah, absolutely. I wonder what would happen if a validator in kind of ETH 2 received this amount of money, and it was like an anonymous validator?

• 1:02:44David Hoffman?

  Right. At that point, you would just pray, pray and pray that that person was altruistic.

• 1:02:49Ryan Sean Adams?

  Yeah, here's your $23 million back. Wow. What a block, what a reward, though, as a validator to suddenly have that pop up. All right, let's talk about this. Aave, we've talked about this before, but the institutionalization of DeFi that's starting to happen. Aave Arc is a platform on Aave. It's built on the same protocol, but is open and primarily whitelisted and targeted towards large institutions. Now they are gearing up for launch. Anything to talk about here, David?

• 1:03:17David Hoffman?

  Nothing other than the previous Fireblocks podcast episode that we did that talks about all this infrastructure, that something like an institutional version of Aave needs to support their institutional clients. This is a huge frontier that we are just now pulling the curtains back behind.

• 1:03:35Ryan Sean Adams?

  Yeah, I think they just want, they just, yeah, well, but it's fine. It works. It works on bankless. They just want some KYC, right? They have to have that. And this institutional capital is kind of sitting dormant with low APYs, you know, outside of DeFi, and they want access to some of these yields. So this is a way to get them that access. Also, David, there was a blip, a scare in Compound earlier this week, and I noticed that some people, you know, pinged me on Discord. It's like, what? What is this? What's going on with Compound? I was concerned at first that the worst was happening, which was maybe there's some kind of zero day bug

• 1:04:15Ryan Sean Adams?

  in Compound itself, and like contracts are getting drained, right? Because so much of this industry is built on Compound yield. But what actually happened was less severe. What happened?

• 1:04:28David Hoffman?

  Yeah, so the actual bug was that the comp token, which is issued at a regular rate to all the people supplying or borrowing from the Compound application, over time, you get a trickle of comp to reward you for participating either on the supplier or the demand side. What happened was that I believe there was an update to the comp controller, which controls the comp token like a week ago, and apparently people were allowed to claim more comp than they were actually supposed to be issued. And so this was more or less like an inflation bug in the comp token. I don't think it was like-

• 1:05:03Ryan Sean Adams?

  Just the comp token.

• 1:05:03David Hoffman?

  Just the comp token. Just the comp token, yeah. Pools are fine, deposits are fine, like all funds are safe, except for the comp token had a little bit more supply get sent out into the markets than was intended. I don't know how much more supply. Apparently it was actually a decent amount. I think it was like $80 million. But other than that-

• 1:05:20Ryan Sean Adams?

  Yeah, a lot. Yeah, it was, exactly. I think it was $80 million. So I ran this calculation. There's 280,000 comp tokens that were released, which is equivalent of about $80 million released into the wild. So not awesome.

• 1:05:35David Hoffman?

  Not awesome. But I mean, if you tell me that like this is the bug that Compound has, I'm like, okay, thank God, Jesus.

• 1:05:42Ryan Sean Adams?

  It's okay. I was super relieved to hear about this, and they'll get that fixed and upgraded. So I guess no big deal this time around. We gotta wait for those zero day bugs.

• 1:05:54David Hoffman?

  Knocking on wood like a billion times.

• 1:05:56Ryan Sean Adams?

  You know what's cool here too, David? Next bit of news is if you ever played Axie Infinity, before October 26, 2020, check your wallet. This is Axie Infinity tweeting this out from their account. They just airdropped $60 million, 800,000 AXS tokens to their earliest gamers, just to thank you, like just a reward. Here, OGs, you believed in us when no one did, and so here's $60 million. How freaking awesome is that?

• 1:06:25David Hoffman?

  Yeah, that's pretty crazy.

• 1:06:26Ryan Sean Adams?

  It's really cool.

• 1:06:27David Hoffman?

  I've seen people report, they got $9,000. I heard another person report they got $16,000. I'm not sure of the metrics as to how they distributed it to their players, but like $60 million to early players, when there wasn't nearly as many players as there are today. That's a nice chunk of change.

• 1:06:44Ryan Sean Adams?

  You know, David, we ran a post on Axie, a tactic, a how-to on Bankless, March 2020. That would have been well before this. If you did your Bankless homework, you got some money from AXS. That's all I'm saying.

• 1:06:55David Hoffman?

  Brian, did you do your Bankless homework?

• 1:06:59Ryan Sean Adams?

  My homework is to publish the post, David. Okay?

• 1:07:04David Hoffman?

  You give out the homework? You don't actually do it?

• 1:07:07Ryan Sean Adams?

  I mean, Bankless is alpha. I'll just say that. Maybe I have some more homework to do.

• 1:07:15David Hoffman?

  Can't take our own lessons.

• 1:07:17Ryan Sean Adams?

  Can't take our own lessons. Moving on, let's talk about the amount of ETH that is staked, because it's absolutely colossal amount at this point. Almost 8 million ETH staked. So at current prices, Lida reports this, that's $22 billion worth of ETH backing the economic security of the beacon chain, which of course, doesn't have state on it yet, right? But will. And it's really cool to see this amount of value is far more efficient than proof of work. If you guys listen to any of our Justin Drake episodes, where we talk about like ultrasound money, you've heard that meme for ETH, the asset, whatever it comes from, came from Justin Drake

• 1:08:00Ryan Sean Adams?

  episodes on Bankless, where he actually describes the economic efficiency and the importance.

• 1:08:06Ryan Sean Adams?

  The importance of having a massive amount of money backing a network like Ethereum. Any other takes here?

• 1:08:12David Hoffman?

  Yeah, with ETH and Ether, right? Two sides of the same coin. You have ultrasound money on the Ether side. You have ultra-secure Ethereum on the Ethereum side. And it's, yeah, you like that one?

• 1:08:23Ryan Sean Adams?

  I like that.

• 1:08:24David Hoffman?

  And as we get closer and closer to the merge date, the number of how the dollar value, the capital measure of how much is staked on the beacon chain, on the future Ethereum chain, is just making it safer and safer and safer. When we do port over, that's just more and more security towards DeFi.

• 1:08:43Ryan Sean Adams?

  There was the myth at one point in time, David. I remember in the doldrums of 2018, 2019, that the price of ETH doesn't matter. That is, that was so wrong.

• 1:08:54David Hoffman?

  I have a button for that.

• 1:08:55Ryan Sean Adams?

  So wrong.

• 1:08:55David Hoffman?

  I have a button for that.

• 1:08:59Ryan Sean Adams?

  Thank you. It deserves another one. Please, push that again, please. That's how wrong it is.

• 1:09:05Ryan Sean Adams?

  Now we know, right? Now we can see as we transition to proof of stake, it's becoming self-evident that the value of ETH is the economic security of the network. It's super important. Look at this slope up. Yes.

• 1:09:18Ryan Sean Adams?

  Look, this is ETH deposited over time, and it's just a nice curve up.

• 1:09:24David Hoffman?

  It does not go down at all. Well, I mean, it can't, it can't go down, so there's that. But it continues to stay. No, it can't, because it can't get withdrawn.

• 1:09:31Ryan Sean Adams?

  Well, I mean, we're still at 6.6% yield from staking. So still not a bad yield.

• 1:09:39David Hoffman?

  Yeah, ETH-denominated yield, 6.6%.

• 1:09:42Ryan Sean Adams?

  Eventually, this has got to drop to like something like the risk-free rate, right? Which has got to be like 3%, 4%, something like that. So this is all playing out as expected. David, let's get into NFTs really quick. Snoop is getting into NFTs. We talked about it last time, but now he's actually got something going on in the metaverse. I see a Snoop car here. I see what looks like a, you know, virtual party. Here you go.

• 1:10:07David Hoffman?

  Oh, wow, look at this. Oh, my gosh. Okay, so what we're looking at here is the Sandbox game. And I think what's going on is that they've signed on Snoop Dogg as like their influencer, right, to get onboarding and traction. If you're, for people listening to the podcast, it looks very much like Minecraft, very blocky. And when you actually, I've actually gone and done a little bit of investigating as to what this thing actually is, it actually looks like a very well-built-out, sort of like, for those that remember Second Life, kinda like that. You get to build your own assets, you get to build your own avatars. Each of these assets are NFTs. You can buy it with this native sand token currency. So it's very much a virtual world universe that is NFT-powered.

• 1:10:52David Hoffman?

  And they've gotten Snoop Dogg on their, like, their influencer team. So it's pretty cool. We'll see if this actually gains any traction. The only reason why I noticed it was because of Snoop Dogg. It didn't really come from any of my, like, internal NFT Ethereum circles. But hey, like, NFTs are exploding beyond of what I can comprehend or pay attention to. So who knows?

• 1:11:13Ryan Sean Adams?

  Yeah, that's what's cool. Do you see some board apes in the, in the screen clips here?

• 1:11:17David Hoffman?

  Oh, I missed them.

• 1:11:18Ryan Sean Adams?

  They're integrating other NFTs. Right, here it is.

• 1:11:20David Hoffman?

  So I can run around with my crypto, my CryptoPunk would actually, or CryptoPunks at large would fit very well into this aesthetic because they're already very pixely.

• 1:11:27Ryan Sean Adams?

  Yeah, import, you can import them into this world, I'm sure. But by the way, do you know what Sandbox is built on? Is it some kind of a?

• 1:11:33David Hoffman?

  It's all Ethereum. Uh, I don't know if it's on a layer two. I can't imagine it wouldn't be, but I do know it's on Ethereum.

• 1:11:40Ryan Sean Adams?

  If it's got board apes, it also reads the Ethereum blockchain and like imports those NFTs in, which is super awesome, man. Entire world's being built around this. Let's talk about another NFT news. Dapper Labs, whom you know, the, the folks behind NBA Top Shots and also the original CryptoKitties, they're expanding into the NFL. So I think they're just doing the same play in the, in the NFL as they did with the NBA. And they're signing Packers' Aaron Jones as well. No, sorry, that's wrong. FTX is signing Aaron Jones. I guess all of crypto is trying to get some legitimacy and credibility.

• 1:12:21Ryan Sean Adams?

  With the NFL market, but let's talk about this Dapper Labs thing. Seems like an obvious play for Dapper after you hit the NBA to go after the NFL. And probably a big deal for them. What do you think?

• 1:12:33David Hoffman?

  I mean, we all know that there is this massive world of collectibles that runs alongside sports, right? Like you can go into any sports stadium, go into the, the, to call like the, where does, where do you go buy things inside of sports stadiums? Like the, by the collectible, yeah, but there's this.

• 1:12:50Ryan Sean Adams?

  David and I are really good at sports.

• 1:12:52David Hoffman?

  Once upon a time, once upon a time, yeah. Like the player shop, I don't know. You can go in and like, you can buy signed baseball bats, signed baseballs. And now we can make more virtual representations of like whatever, I don't know, however, they want to do this, but like virtual collectibles. And again, like, I don't think people are gonna go and be like, why would I buy this like digital version? They're just gonna buy it. They're just gonna buy it.

• 1:13:14Ryan Sean Adams?

  My favorite athlete did this, right? Like I want this memorabilia. It's digital now. That's even better because now I can display it on my phone. It doesn't have to take up space in my house.

• 1:13:22David Hoffman?

  Exactly.

• 1:13:23Ryan Sean Adams?

  So onboarding the world again. Again, I think like, I think of Dapper more as sort of a side chain, right? And I think all of this will flow into the rest of the crypto economy. It's all pie expanding, good stuff.

• 1:13:36David Hoffman?

  Team store. It's called a team store. That's what it's called.

• 1:13:40Ryan Sean Adams?

  Listeners need to know that. Listeners are probably like, what the hell, guys? Don't you do any sports? All right. Bitcoin stuff. Bitcoin's Lightning Network just reached all time highs, which is super cool to see. I'm a huge supporter of Lightning, David. Like it is a trustless way at lower cost of transaction to said Bitcoin. So I'm, I'm pleased to see some adoption here and they're getting up to.

• 1:14:05David Hoffman?

  3K. They broke 3K.

• 1:14:07Ryan Sean Adams?

  Yep. 3K Bitcoin, that is. So that's the equivalent of about 120 or so million dollars. So it's great to see Lightning catch on. Part of this might be El Salvador. Part of this might be, you know, maybe the Twitter traction on tipping. Maybe that's too early. I don't know. But it's like other things like that. I will say, if you go to DeFi Pulse right now. Lightning is number 41 on the DeFi. Like, it's not an apples-to-apples comparison, right? But, um...

• 1:14:38David Hoffman?

  A 3K is more Bitcoin than I have, but like, in the grand scheme of things, it's not a lot.

• 1:14:42Ryan Sean Adams?

  Not a lot, yeah. Yeah, but we'll be monitoring this and see how it goes, and I think this is a good sign. This is a bankless money system as well. It's just always the question, David, do people really want to spend their Bitcoin? I don't know. And have you ever used Lightning? It's pretty clunky.

• 1:14:58David Hoffman?

  No, and most people haven't, and most people think that they have, except they've actually just used a custodial service that runs a Lightning node for them.

• 1:15:05Ryan Sean Adams?

  Exactly right, and I think there's a reason the Ethereum community abandoned state channels.

• 1:15:11David Hoffman?

  Yeah.

• 1:15:12Ryan Sean Adams?

  Right?

• 1:15:12David Hoffman?

  Yeah.

• 1:15:13Ryan Sean Adams?

  Um, and it's easy to like, hop across protocols, but like, payment channels, state channels never really took off on Ethereum, and, um...

• 1:15:21David Hoffman?

  Until this whole L2 thing, but also, also, like, state channels built on, um, on an EVM is fundamentally different than state channels built on a UTXO model.

• 1:15:32Ryan Sean Adams?

  Yep, absolutely. But anyway, good news there. Uh, David, we should talk about the Visa regulation, or sorry, not Visa regulation, but Visa's actually just released a white paper. They're developing an interoperability concept so that central bank digital currencies can talk to cryptocurrencies, uh, and, um, I guess, exchange trade with one another, so this is like a...

• 1:15:55David Hoffman?

  And other central bank digital currencies too. It's like a general, generalized hub.

• 1:15:59Ryan Sean Adams?

  Interoperability network, right?

• 1:16:00David Hoffman?

  Yep.

• 1:16:01Ryan Sean Adams?

  Okay, so I didn't read this entire white paper, um, but cool to see Visa expanding the space. Any other takeaways for us here?

• 1:16:09David Hoffman?

  Yeah, my takeaway is their, the, uh, infrastructure for CBDCs is getting built out faster than the CBDCs actually are. Like, the United States has not started...

• 1:16:18Ryan Sean Adams?

  Except in China.

• 1:16:18David Hoffman?

  Except, except in China.

• 1:16:19Ryan Sean Adams?

  China's crushing it, right?

• 1:16:21David Hoffman?

  Crushing it, right? Like, they don't even need infrastructure. They just need, they just need, you know, the actual CBDC, which is getting rolled out. Uh, so Visa is, is like, "Hey, we have this interoperability-like mechanism to bridge all the CBDCs in crypto." And then, like, the actual, like, Federal Reserve of the United States is like, "CBDCs? Do we really need that?" I mean, the answer is yes, but like, they don't even know it yet. But yeah, the private market is like ahead of the public markets by orders of magnitude. So I think Visa is just like taking a gamble that at some point in time, the US regulators will get their head out of their blanks and figure out that they do need a CBDC. And then Visa is like, hey, we've been waiting for you.

• 1:17:00Ryan Sean Adams?

  Yep, absolutely. Visa is absolutely getting ahead. They've seen the light with crypto, even though the US government has not. Let's talk about some more US government stuff. This will tee us up for our next conversation, David. But One Inch, which is a DEX aggregator, did you know that they just blocked US traders for the first time? So it's a geo-block. If you go to One Inch from the US, you will be kicked off the site. You'll be geo-blocked out of it. I know some folks use VPNs, but step. And I think they're doing this because they're planning to create a US-only product. It's like bifurcate, but like, this is back to the story of like, okay, so One Inch is an aggregator and user interfaces can be blocked. The underlying smart contracts that

• 1:17:45Ryan Sean Adams?

  power One Inch and that power all of the assets and decentralized exchanges behind them, those are things that cannot be blocked, right? So you could still have access to those because it's DeFi, because it's on Ethereum. But aggregators have a role and can definitely block individuals from using their platform. And I hate going to these sites, David, and being present in the US. And just because I'm a US citizen, I can't freaking use it. Like, what's up with that, right? Missed a DYDX airdrop because of that. Tons of US citizens did, right? Like, it's no other country, by the way. It's not even like North Korea and Iraq.

• 1:18:27David Hoffman?

  China.

• 1:18:29Ryan Sean Adams?

  China. But like,

• 1:18:32Ryan Sean Adams?

  It's so strange to be blocked out of this emerging financial system as a US citizen, as a citizen of like a free country. And I don't understand. What's your take?

• 1:18:43David Hoffman?

  Yeah, so DEX aggregators, they are actually on the more centralized side of the spectrum. They're not completely on-chain. I do believe there is some like web two infrastructure that is a component of aggregating all the DEXs.

• 1:18:57Ryan Sean Adams?

  For sure.

• 1:18:58David Hoffman?

  Yeah, the order routing is a smart contract on-chain, but I think the API pings and like getting in the information, that is all done in a centralized fashion. So like in theory, like the DEX aggregators are a like do have a centralized front end that can be blocked and that will actually mess up.

• 1:19:14Ryan Sean Adams?

  The choke point.

• 1:19:14David Hoffman?

  The choke point, right? That will actually mess up the product, unlike Uniswap, unlike Balancer, unlike the actual true DEXs out there. And so like, and they are, and I think one of the reasons why we can definitely say that that's true is because they would, well, they're making a US version of their front end, right? What they actually like put on the US version versus the international version of how they differentiate those things, who knows? Also.

• 1:19:36Ryan Sean Adams?

  At least they could say they tried, right? I think that's what what some of these companies are trying to do is we're trying to comply. Speaking of trying to comply, so the CFTC just imposed a penalty, this is the Commodities and Futures Exchange regulator in the US, of 1.25 million against Kraken for offering illegal off-chain digital asset trading and failing to register as required. So I think this is maybe some of the futures.

• 1:20:02David Hoffman?

  The TLDRs, they gave their, they gave their customers margin accounts and they didn't register with the CFTC. Which, I mean, I guess that's actually like pretty straightforward.

• 1:20:11Ryan Sean Adams?

  Yeah, totally.

• 1:20:12David Hoffman?

  I won't go harp on like, yeah, that's actually relatively normal. That's not like anybody targeting crypto.

• 1:20:17Ryan Sean Adams?

  I see normal, relatively normal things coming out of the CFTC.

• 1:20:20David Hoffman?

  Right, yeah.

• 1:20:21Ryan Sean Adams?

  David, like they seem, at least to date, they've been much more reasoned and rational about this. And what's interesting about this is 1.25 million, that's just like a slap on the wrist for somebody like Kraken.

• 1:20:32David Hoffman?

  Yep.

• 1:20:33Ryan Sean Adams?

  I mean, Kraken's probably like, yep, worth it.

• 1:20:37Ryan Sean Adams?

  Wells Fargo, man, I told you we'd get back to Wells Fargo. Here they are. Wells Fargo has been overcharging customers for like seven years in a row. This is a final settlement from the case that goes that span from like 2010 to 2017 or 2018. And what they were doing, David, if you were a small business customer and you were trying to exchange, say some like dollars for like euros or something, they would actually give you the wrong amount. Okay. So if it's like, if the exchange rate was like 1.025, they do like 1.052.

• 1:21:18Ryan Sean Adams?

  Just like switch around two digits and then pocket the rest. Okay. And the whole cult, like all of the, like many, the culture was to do this, to cheat their customers. Right. And this is what the, what the settlement actually says. Wells Fargo created an atmosphere in which employees openly joked about and celebrated taking advantage of the bank's customers. Okay.

• 1:21:39David Hoffman?

  Nice.

• 1:21:40Ryan Sean Adams?

  Right.

• 1:21:40David Hoffman?

  You know what fixes this? Dex aggregators.

• 1:21:44Ryan Sean Adams?

  Tell me, right?

• 1:21:44David Hoffman?

  Yeah.

• 1:21:45Ryan Sean Adams?

  Like no person in the middle of this, like you could see all of the transactions on chain, on exchange. That's what we're moving toward. That is the reason for bankless. So banks can't screw people over. And it's nice for the DOJ. The DOJ had to go prosecute this, right? In court, had to catch them. How many times are the banks not caught doing these things? We'll never freaking know, right? But like, the DOJ doesn't have to worry about this sort of thing. If all of this is on chain and they could see the full transaction history.

• 1:22:16David Hoffman?

  And the customer does too, which is important, which is why what a huge missing component that Wells Fargo doesn't have to deal with is like, report their on-chain data of like, how they actually got the number that they got, right? And Ryan, if you remember, I think in like 2013 or 2014, there was a big story as to how Wells Fargo did so well after the 08 crisis. And then in 2014, they were charged with like, the culture at Wells Fargo promoted their like salespeople, their bankers, to open up as many accounts from their customers as possible. And so they were charged with like, their bankers being really, really aggressive with their customers, saying like, hey, you need to open up this account and this account and this account. Because they needed to make quota. Their bankers were salespeople.

• 1:23:01David Hoffman?

  And so they got charged in 2014 for having a culture that promoted opening unnecessary accounts and they were also doing it to their customers without even asking their customers permission because the pressure on these bankers to make sales quotas were so incredibly strong that it became a toxic abusive relationship between the bankers and their employees. Right. And so this is what happens when you have a financial system that is no longer innovating and growing and developing, but has just switched to an extraction based model because there's nothing left in the web legacy financial world. So you have to extract as maximally as possible and there's no innovation. There's only extraction left in that world.

• 1:23:41Ryan Sean Adams?

  Absolutely. Rent collection, gouging. These are words that come to mind as you're talking about. You know what we need to do, David, is break up with our banks.

• 1:23:48David Hoffman?

  Yeah, I've heard this one before.

• 1:23:49Ryan Sean Adams?

  That's what we need to do. Open finance, guys. This is the solution. This is why we're on the journey. Senator Lummis might be on the journey as well. At least she seems to be in our court. We've been looking for advocates coming out of the Senate. She might be one. In fact, we're hoping to get her on the Bankers Podcast at some point in time. But she laid out in front of the Senate some principles for US digital currency, talked about the role of stable coins, talked about America's leadership in global financial services is something that the country should be proud of and they should extend that into cryptocurrency, lean into it rather than trying to, uh, try to stop it and trying to create barriers and blockers every time someone wants to do something with cryptocurrency.

• 1:24:33Ryan Sean Adams?

  That is a welcome message, David. Any other takeaways from her notes here?

• 1:24:37David Hoffman?

  Yep. And I think we should keep on going.

• 1:24:40Ryan Sean Adams?

  Absolutely.

• 1:24:40David Hoffman?

  Other than good job and thank you.

• 1:24:42Ryan Sean Adams?

  Yep. Well, let's get to this. Um, while we're talking about the US, Virgil Griffith, David, you want to start with this story because people might not be familiar with this story and the context. Give us that.

• 1:24:53David Hoffman?

  Yeah. Virgil Griffith, he is an Ethereum developer that was actually before my time. I never had the honor of meeting this guy. For those that know the, uh, the hamster dance or the little, uh, skunk dance or the raccoon dance that like a lot of these core Ethereum people did, I can't remember. A dev con or something. There's a funny little dance out there. There are Vitalics out there, Color Flora, so all doing this funny, funny little dance. And Virgil Griffiths was there too, right? And that's, that's kind of where I see him in, in the space, but like, he's a very core part of some of the early days of Ethereum. Very, just overall proponent of how blockchains and crypto economic systems that span global communities cannot create global peace.

• 1:25:36David Hoffman?

  And he actually made the decision to go to North Korea to give a talk at a North Korean blockchain conference out there. Turns out, North Korea has crypto conferences too. And then when he came back, he was arrested for violating sanctions and helping teach Korea how to get around sanctions. The criticism of that decision by the US government was that he didn't teach North Korea anything that you couldn't have already found on YouTube or just Googled it, apparently. But this, so like, granted, there is a little bit of naivete, like, hey, don't go to North Korea and teach about crypto transactions.

• 1:26:12Ryan Sean Adams?

  A lot of naivety.

• 1:26:13David Hoffman?

  Yeah. But also, at the same time, like, I, like, he's not doing anything inherently illegal, right? Like, according to the United States, he was, but like, he was just promoting knowledge and education about this thing that is inherently open source, right? Like, they're gonna learn about it anyways. And so, the, he got arrested. This news story has come out here is that he got arrested a couple of years ago. The news story came out here that he had a trial. He's been hammering on the fact that he's not guilty, but his trial just started last Monday. And he opened up that trial with a guilty plea and a request for 6.5 years in jail, whereas the maximum sentence could be up to 20.

• 1:26:52David Hoffman?

  So he requested six. And there's, the story has to go from there, but that's the gist of it.

• 1:26:59Ryan Sean Adams?

  Yeah, I think it's, it's definitely sad, right? I think that Virgil, it seemed to me, had sort of a, you know, crypto utopian sort of vision. And I think he was going to North Korea, which is obviously one of the worst regimes on the planet, right? Very oppressive, like terrible regime, right? But I think Virgil was going there perhaps with with good intentions as far as like, you know, talking about cryptocurrency and the freedom this could provide and kind of the enhanced coordination it could provide and didn't realize the full impact of his decisions, right?

• 1:27:40Ryan Sean Adams?

  And the US arrested him, I think, when he was coming home to visit family on Thanksgiving, coming to the US. And he's actually been in the same, for the last two months anyways, in the same prison that Jeffrey Epstein was in for like the last two months. So it can't have been pleasant. I think there was increasing amount of pressure on him to maybe plead guilty and not actually risk going to prison. Yeah, 20 years in prison. So it's an unfortunate story because I don't think that what he was doing was legally wrong in the in the eyes of the US government, right? I think his defense would say, hey, he was just teaching them things that like they could find online.

• 1:28:22Ryan Sean Adams?

  And this is like an open conference and this is all publicly available on YouTube. And for my part, I believe that that's true. But like, even if you think it was legally wrong, I mean, not morally wrong, right? And this is a very harsh sentence for, I guess, the stated crime of what Virgil may or may not have done. So kind of sad to see it, David, from my perspective. I don't know if there's anything more to say on it.

• 1:28:51David Hoffman?

  It was so for those that listened to the before Bitcoin series we did, where I read out Peter Pan's four part series about the history of the cypherpunks. This is, in my mind, a continuation of that story of people that dedicate their their lives towards cryptography in the social public systems, public good systems that they create, and that ultimately runs and butts heads with nation states who don't like systems that are outside of their control, of which cryptography is inherently about that. So Amin Soleimani, who's the writer of this thread that we that we are looking at right now, starts this thread off with, his name is Virgil Griffith. It was fun to see everyone this week in New York, but I'll admit I was walking around with a hole in my heart and a looming sense of dread.

• 1:29:34David Hoffman?

  Virgil's trial starts this Monday. #FreeVirgil. And then he goes through the history of both this case and also where it fits into the greater case of the story of the cypherpunks. He said,

• 1:29:52David Hoffman?

  Tweet #12, he goes, "All of us in crypto today are downstream of the original cypherpunks. We inherit their 50-year struggle to emancipate cryptography as a weapon exclusively for militaries and provide it as a tool for individuals to use to protect their speech from illegitimate surveillance." And so I feel like maybe if I put, I don't, again, I never met Virgil Griffith, I don't know what he's like, but if I want to put my mind, my brain inside the mind of a cypherpunk, when you promote adoption of cryptography, you promote adoption of public resources that can escape oppression. And so maybe Virgil's mind is like, "Well, I'm gonna go to North Korea, which is the site of the most oppression in the world, and hope this information leaks out." I don't know how that works, but like-

• 1:30:34Ryan Sean Adams?

  I think from a cypherpunks perspective, right, and from somebody who's deep into cryptography, you're going to a terrible oppressive regime, and you're kind of preaching the gospel. You're kind of preaching like, um, freedom technology. It's like going to a regime like this and talking about the value of freedom of speech. At least, I think that's what it is like in Virgil's mind, right? And I just contrast this, it's very clear, I think, that the US government wanted to make an example out of Virgil, right? Because clearly, this is not actually a national security threat in any way, shape, or form, right? But like technically, you know, was a crime committed, he just absolutely wanted to make

• 1:31:19Ryan Sean Adams?

  an example out of this. And I just contrast that with like, man, the amount of people who went to jail after the, you know, 2008 shenanigans that went on. It's like, one guy, maybe, like, virtually no-

• 1:31:33David Hoffman?

  Zero people.

• 1:31:34Ryan Sean Adams?

  Right? We're just talking about the Wells Fargo incident, you know, $73 million slap on the wrist, right?

• 1:31:42Ryan Sean Adams?

  Sometimes the punishment far exceeds the quote-unquote "crime committed." I think this may be one of those cases, so it's sort of a sad day in crypto.

• 1:31:51David Hoffman?

  And just to tie this thread off, tweet number 17, Amin goes, "Today, the US government treats cryptocurrency with as much superstition as it did with encryption in decades past." I really like that framing, treating crypto as superstition. "In that context, they are attempting to cast Virgil's presentation as a military-grade violation, but just like encryption, cryptocurrency will inevitably triumph. For years now, when cryptocurrency is widely adopted across the globe, Virgil's presentation to North Korea will appear trivial. It will seem as silly as prosecuting someone for sharing the 'military secrets' of HTTPS."

• 1:32:28Ryan Sean Adams?

  Absolutely. Well said. We'll leave it at that. Guys, we're gonna cut to our sponsors and then we'll be back with some takes of the week. Here they are.

• 1:32:37David Hoffman?

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• 1:33:21David Hoffman?

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• 1:34:02David Hoffman?

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• 1:34:46David Hoffman?

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• 1:35:02Ryan Sean Adams?

  All right, guys, we are back. Takes of the week. Let's start with this, David. This is a, why don't you read this take and then I'll comment on it.

• 1:35:09David Hoffman?

  Read your own tweet. I will read your tweet for you.

• 1:35:11Ryan Sean Adams?

  I don't want to read my own tweet. That's too, uh...

• 1:35:12David Hoffman?

  This guy, this guy Ryan Sean Adams, I don't know who he is, never met him before, says, "My advice for the US. One, buy ETH and BTC for your treasury. Two, issue a Fedcoin as an ERC20 token. Three, become the world's most friendly DeFi jurisdiction. That's it. That's literally all you have to do to win the next chapter of the internet." Ryan, what's this guy saying?

• 1:35:33Ryan Sean Adams?

  I mean, I couldn't have said it any better. I really do think those are the three things that the US needs to do. And if it just does those three things, hell, like, let's take two. Pick any two of those US government and you will be ahead of any other geographic jurisdiction on the planet. But, um, I don't know, they're not doing, they're not doing any of these right now, which makes me worried. It's very simple. Some people think it's... It's maybe more complicated than it is, but it really is this simple. Buy Bitcoin and ETH, issue a Fed coin of some sort as an ERC 20 on Ethereum, and just be really friendly to the talented engineers that are building DeFi in your country.

• 1:36:17Ryan Sean Adams?

  Make it an appealing jurisdiction rather than pushing them outside, which is what they're doing right now.

• 1:36:22David Hoffman?

  Ryan, you've made it seem really, really simple, but that's because you skipped a step, which is step zero, stop caring about all the incumbents and check your biases at the door.

• 1:36:31Ryan Sean Adams?

  That's why they're not doing it.

• 1:36:32David Hoffman?

  That's why it's not simple.

• 1:36:33Ryan Sean Adams?

  That's the tweet behind the tweet.

• 1:36:35David Hoffman?

  Yeah.

• 1:36:36Ryan Sean Adams?

  Some guy should tweet that out.

• 1:36:40Ryan Sean Adams?

  All right, David, why don't you take this one? So this is interesting. I'll read the headline here. "The SEC is Threatening Coinbase to Protect the Public, But Not in the Way You Think." Okay.

• 1:36:51David Hoffman?

  This was a fantastic thread that you should absolutely go and check out yourself. We're not going to read the whole thing because it's a little bit long. But basically, Juice, O Juice underscore ETH, talks about how because of the like trying to get the recovery going after their pandemic, the reserve requirement ratios for banks have gone from 10% to 0%. And if we go, yeah, we're going to start at tweet number six here. It goes, "Banks are more or less offering the same interest rates as each other. Right now, this is around 0.05%. For decades, there have not been any significant products with better rates whilst maintaining the convenience of the liquidity of the savings account until now. At a 5% interest rate, which is literally a 100x improvement than any savings account at a bank,

• 1:37:33David Hoffman?

  is what Coinbase Earn has offered, what was going to offer, except here's the problem. The problem is that the product is so good and is such a no-brainer and can very realistically cause millions of depositors to move their savings to the Coinbase Earn product." And then the last tweet that we're going to read is, "Which means a concentration of dollars will suddenly be siphoned off into the institution Coinbase banks with, and every other bank would be left unable to meet that 10% reserve requirement." So what they are worried about is that Coinbase's products are going to be so incredibly successful that banks will never be able to actually return to a 10% collateralization requirement, which is saying something about

• 1:38:14David Hoffman?

  the power of the product, the Coinbase Earn product, that the SEC told them that they were going to sue them if they've released that product.

• 1:38:23Ryan Sean Adams?

  Okay, so basically what he's saying is Coinbase Earn and crypto-related products like this are so good that it's going to slurp in all of the money from the banking system, cause the banks to collapse, and public, we don't want a banking system collapse like 2008 again, do we?

• 1:38:39David Hoffman?

  Right.

• 1:38:40Ryan Sean Adams?

  So we're protecting you from that.

• 1:38:41David Hoffman?

  The product was so good that it's going to collapse the economy.

• 1:38:45Ryan Sean Adams?

  It's going to collapse this banking, this strong foundational banking system that we've propped up. Yeah, you know, I think that could be it.

• 1:38:57David Hoffman?

  I'm sorry, if good products collapse the economy, what the actual F are we doing?

• 1:39:03Ryan Sean Adams?

  Look, it goes back to the tweet that you were just talking about, right? Which is like, we don't want to disrupt incumbents. That's why we're doing this. That's the tweet behind every tweet.

• 1:39:14David Hoffman?

  Too big to fail.

• 1:39:16Ryan Sean Adams?

  Behind every regulatory action that we're seeing that's aggressive towards crypto.

• 1:39:20David Hoffman?

  Literally not allowed to have nice things because it'll break all the bad things. And our entire society's built on bad things.

• 1:39:26Ryan Sean Adams?

  Well, you've got a take on this, right? So this is actually, well, I don't know if it's your take, or you know, this guy David Hoffman dot ETH on Twitter, goes by the handle Trustless State, really smart guy.

• 1:39:37David Hoffman?

  He's got a cool punk.

• 1:39:38Ryan Sean Adams?

  Crypto is going to nerf the SEC, is what you said. And this goes back to a post you wrote earlier in the week. What did you mean by this?

• 1:39:45David Hoffman?

  Yeah, so Gary Gensler is coming at crypto super hard, right? Trying to, I think more or less, do everything he can to have more and more jurisdiction over crypto. Basically wants everything to be a security, right? And like, careful what you wish for, Gary. Like, if everything becomes a security, I don't think you realize how trivial it is to spin up a new token, like spin up a new ERC20 token, spin up a new social token, a new DAO token, a new NFT that represents- Some in-game asset like if you do you want all of those to be securities? Because what's more likely is it more likely that as a result of your desire to regulate all of these things? You actually have to ease back what it actually means to regulate those things?

• 1:40:29David Hoffman?

  Or do you want everyone who ever issues a token to come knocking on your on your door? Wait in line with their forums and say, hey, Gary Gensler, will you please give me my stamp? Like, what's gonna what's gonna be more likely? I think it's gonna be more likely that we're going to use this asset printing press, which is the ERC 20 or ERC 721 standard and print a bajillion tokens. Gary's gonna get real upset that they're all securities. And but in order for him to legitimize what the SEC does as a regulatory body, they're just going to have to water down what it actually means to be a security. Right? And so like, sweet, like this thing on the my wall is a security like, yay, like everything's a security.

• 1:41:08Ryan Sean Adams?

  The SEC does not want to have jurisdiction and regulate like a flaming sword of god.

• 1:41:16David Hoffman?

  Right, you're right, yeah.

• 1:41:17Ryan Sean Adams?

  Right? Like, that's what you're saying is they're biting off way too much.

• 1:41:22David Hoffman?

  Right.

• 1:41:22Ryan Sean Adams?

  Like much more than they can chew and it's actually going to completely, I guess.

• 1:41:28David Hoffman?

  Water, water down the definition of an S of a security. Yeah.

• 1:41:32Ryan Sean Adams?

  Yeah. So if everything's a security, nothing is, guys.

• 1:41:37Ryan Sean Adams?

  Let's take your neck, this next tweet, David. This is a, I think a meme tweet that some people took seriously from Bankless HQ Twitter. What is this?

• 1:41:45David Hoffman?

  Wait, is the headline isn't a meme? That's a real headline, right?

• 1:41:50Ryan Sean Adams?

  No, this is a meme, dude.

• 1:41:51David Hoffman?

  Oh, is it? Oh, okay. Well.

• 1:41:56David Hoffman?

  Oh, I got, I just ate the onion there in that case.

• 1:41:58Ryan Sean Adams?

  Love it. Got him. Got him.

• 1:42:00David Hoffman?

  All right. Well, okay. So the headline is, that's, that's makes more sense as to actually who's actually the picture depicting. Limsy Graham, I believe, is who that is. And then the bottom headline is Senate Bans NFTs. Quote, "The trend is bankrupting our youth," which I guess is a wink, wink to the fact that like when you buy one NFT, the next thing that happens is you buy a second one and then right after that you buy a third one. That's funny because I'm pretty sure the guy that tweeted this, Michael Wong, he's working on a crypto satire website, very much like The Onion. And we talked about how like our KPIs is like, how many people can we get to? Do you know the term eat the onion?

• 1:42:35Ryan Sean Adams?

  Uh, okay. No, tell me.

• 1:42:37David Hoffman?

  It's like when somebody like reads an Onion article and then they take it seriously and they start blowing it up on Twitter.

• 1:42:42Ryan Sean Adams?

  So you just ate the onion here?

• 1:42:44David Hoffman?

  I just ate the onion, yeah. And so like the, the secret skunk works project out of the bankless Dow is there's gonna be a crypto satire website show. TV website, like news organization, very much like the Onion, that has meme only headlines. And the KPI is like, alright, how many times can we get people to like actually believe some of the BS headlines that we're gonna write?

• 1:43:04Ryan Sean Adams?

  That's awesome.

• 1:43:05David Hoffman?

  I guess I'm the first victims, son of a bitch.

• 1:43:07Ryan Sean Adams?

  Yeah, well, here's, here's the bottom behind this. This is a meme, guys, but the fact that people think it's real is exactly why Congress is failing us, right?

• 1:43:14David Hoffman?

  There's a take.

• 1:43:15Ryan Sean Adams?

  This, this trend is bankrupting our youth. Senate bans NFTs. That's why Congress is failing us, because people actually believe that's true. I have another confession for you, David. This, this is my meme.

• 1:43:26David Hoffman?

  Is this yours? This is not Michael Wong's?

• 1:43:30Ryan Sean Adams?

  I was thinking about the satire thing and everything you said, and I was like, you know what? I'm gonna throw a meme up.

• 1:43:37David Hoffman?

  Yeah, hey, sometimes the Ryan Sean Adams memes, they'll get you.

• 1:43:40Ryan Sean Adams?

  They're okay.

• 1:43:41David Hoffman?

  They're, they're, they're great. You just don't know, you just don't know when they come.

• 1:43:44Ryan Sean Adams?

  Yeah, you just, it's a surprise every time. Alright, um, let's do this. Golden age of building, David. We'll look back on the 2020s and remember it as the golden age of building. This is another tweet that you, uh, put out there last week. What does this mean?

• 1:43:59David Hoffman?

  Yeah, um, uh, once upon a time in high school, I was really into the world of aviation and in the world of aviation, there's the, the golden age of aviation, which was the 1930s. Uh, it's just, which was when so much innovation happened and a lot of the same technologies that we use today for flying and aviation was found in the 1930s. And I think that that is what we are seeing here with the 2020s. Uh, when, when this decade is over, uh, I think we're gonna look back and be like, God, that was fun. Remember when there was cool? Those were great times, yeah. So like, it's actually a call to action for everyone listening, just to like, hey, take a moment, reflect and remember what it's like to be where we are today, because we only get to do this once.

• 1:44:39David Hoffman?

  Uh, and it's, it's, it's a good time regardless of all the regulator FOMO, uh, out there, uh, or regulator FUDS, excuse me.

• 1:44:46Ryan Sean Adams?

  FUD, yeah.

• 1:44:46David Hoffman?

  Yeah.

• 1:44:48David Hoffman?

  FOMO, but with denial is FUD.

• 1:44:51Ryan Sean Adams?

  There you go.

• 1:44:52David Hoffman?

  Um, and so, yeah, like, hey, we're, we're in the golden age of building. There's cool stuff being built every single week. There's cool things happening and I, I'm, I, I think we will look back with nostalgia on this era.

• 1:45:02Ryan Sean Adams?

  I totally agree. I'm super grateful to be here. Like, I'm grateful for all the listeners. And, you know, that kind of that sense of gratitude really underlies, I think, the best projects. They know they're early. They know they're doing something super cool. And, yeah, it's really important to pause and just reflect on that sometimes, David. Good thought, man.

• 1:45:22David Hoffman?

  Absolutely. Thank you.

• 1:45:22Ryan Sean Adams?

  Let me ask you this. Last question of the week. What are you excited about?

• 1:45:25David Hoffman?

  Dude, okay, so I was at MCon last week and Main, or, excuse me, MCon two weeks ago and MainNet in New York last week, met a ton of cool people. And like, the number of times that I would go up to one of the booths at MainNet, at Mazzari MainNet, and just like, meet with some people, somebody would say like, hey, like, the reason why I got this job at company X or project Y is because like, you and Ryan kept on like, just yelling at me to get a job in crypto. Either on, either on the newsletter or on the podcast, like, you guys say like, hey, like, you can do it. Like, you can, you can quit your legacy job and get a job in crypto. And so I did it. I think I ran into like, I think, seven people at MainNet, and that's not even counting, MCon. That said like, hey, like, I got a job in crypto because you, because you guys at Bankless

• 1:46:10David Hoffman?

  really encouraged me and inspired me to do that. And so I'm honored and humbled that people actually listen to us at all. And the fact that you guys, so many of you have gotten jobs in crypto is also, thank, thank you for helping turn this into the golden age of building. Because the people that quit their jobs to take the, take the step into crypto and take that risk are the people that are going to be pioneering so many more people in crypto in the future. So, thank you for taking that leap. And if you are yet to take that leap, what are you waiting for? Like, don't miss out. It's a fun time.

• 1:46:42Ryan Sean Adams?

  As we say, it's people all the way down. Nothing more exciting than attracting good people to this space. That's absolutely awesome to hear, David.

• 1:46:49David Hoffman?

  Yeah. And before I ask you what you're excited about, Ryan, hey, look, according to Twitter, it's International Podcast Day. Look at that. Hey!

• 1:46:55Ryan Sean Adams?

  Happy International Podcast Day. Do you know what episode number this is?

• 1:46:58David Hoffman?

  Uh, this will be the weekly, I don't know what weekly roll-up number this is, but we are on-

• 1:47:02Ryan Sean Adams?

  I mean, how many podcasts do you think we've done right now?

• 1:47:04David Hoffman?

  Uh, the actual Monday podcast will be number 89. I think State of the Nation, we're up to like, 60-ish. Weekly roll-ups, we're at like, 40.

• 1:47:14Ryan Sean Adams?

  Yeah, take 80, I guess, and like roughly like multiply that by four.

• 1:47:18David Hoffman?

  Yeah.

• 1:47:18Ryan Sean Adams?

  Probably what we're, what we're doing, because we do like.

• 1:47:20David Hoffman?

  Well, no, because the podcast started earlier than all the other ones. So I say like, like, like three, maybe. So I, we're definitely over 200. I think we're over two, two to 300.

• 1:47:28Ryan Sean Adams?

  Well, there you go.

• 1:47:29David Hoffman?

  Okay.

• 1:47:29Ryan Sean Adams?

  One day will count.

• 1:47:30David Hoffman?

  While you tell me what, what you're excited about, I'm going to go to Libsyn and actually count. Yeah, I'm going to look that up right now.

• 1:47:34Ryan Sean Adams?

  Do it, do it. Okay.

• 1:47:34David Hoffman?

  What's, what's your number? What's your number?

• 1:47:36Ryan Sean Adams?

  Uh, my number is 364.

• 1:47:41David Hoffman?

  Okay. All right. Now tell me what you're excited about, Ryan.

• 1:47:43Ryan Sean Adams?

  All right. So while you're looking that up, what am I, what I'm excited about is also the Bankless podcast right now, because we.

• 1:47:49David Hoffman?

  245.

• 1:47:51Ryan Sean Adams?

  Oh God, I was way up.

• 1:47:53David Hoffman?

  245 podcasts.

• 1:47:54Ryan Sean Adams?

  That's still good.

• 1:47:55David Hoffman?

  That's so great.

• 1:47:55Ryan Sean Adams?

  Really good.

• 1:47:56David Hoffman?

  Uh huh.

• 1:47:56Ryan Sean Adams?

  Now, how many hours is that? Multiply that by like.

• 1:47:59David Hoffman?

  At least 1.5, yeah.

• 1:48:01Ryan Sean Adams?

  1.5, multiply that by 1.5. Uh, all right. So, um, we just secured a dream guest on Bankless, right? It's like, when we started the Bankless podcast, we had a list of like, I don't know, five, 10 names that were like, hey, we, we'll, we'll be doing it if we get this name. And now we got one of those names, another one off the list. Super excited about it. Not going to reveal it now, coming later in October. We'll have a big reveal soon. But we're very excited. And I think this just reflects as like, one of the reasons I got into crypto and started like in, you know, crypto media. I got into crypto first. I thought all I wanted to do was invest, right? But then I realized like, like investment and kind of like narrative and learning about this stuff. We can learn about this stuff collectively, right? That's why we started Bankless.

• 1:48:45Ryan Sean Adams?

  Uh, and that's why we started the Bankless podcast to go on the journey together, because we can level up together. And one thing we realized very early, David, is if crypto is going to go mainstream, there has to be a big tent around it, right? It can't just be like this isolated cult of weirdos and geeks, right? It has to saturate itself into all areas of culture. And so that's why we're doing Bankless is to saturate crypto and DeFi and these values into culture. So that means like politicians, that means regulators, that means musicians, that means investors, anybody who's out there.

• 1:49:23Ryan Sean Adams?

  We want to get them on the Bankless podcast. And here's the beautiful thing about it, David, is like, if they adopt crypto protocols, okay? They adopt crypto values.

• 1:49:33David Hoffman?

  Ooh.

• 1:49:35Ryan Sean Adams?

  All right.

• 1:49:36David Hoffman?

  Ooh.

• 1:49:36Ryan Sean Adams?

  We tricked them. We got them. And that's how we change the world. As long as our values are embedded in the protocols, when they adopt crypto, they don't know it, but they're adopting crypto values. When they buy that NFT, what's that NFT secured by? What's it paying out? Right? What's it propagating? The economic security of Ethereum, which is a decentralized money system that embodies crypto values. So this is a covert ops, man. And we're doing it by getting these big guests, by like listeners tuning in, by you hitting the subscribe on YouTube. If you haven't subscribed yet, you are helping to propagate crypto values and crypto culture to the world. And that's what I'm excited about today.

• 1:50:17David Hoffman?

  That was a great answer. I'm looking forward to talking to that guest of which we've named on this show before. So I will say that.

• 1:50:26Ryan Sean Adams?

  Of which? Of which we've named? So you can go back in past episodes.

• 1:50:30David Hoffman?

  All of them. Start writing.

• 1:50:32Ryan Sean Adams?

  All 200 and how many?

• 1:50:33David Hoffman?

  245, yeah.

• 1:50:35Ryan Sean Adams?

  Yeah, it shouldn't take long. Mean of the week. Mean of the week time. Let's do this. What are we looking at?

• 1:50:41David Hoffman?

  All right, we are looking at that famous picture of two people getting divorced and they're separating out their beanie babies. This was in the 90s, I believe. But instead of beanie babies, they're NFTs. So we got these couple ones pulling out a cool cat. The other one's about to grab a me bit. There's a chromie squiggle in there. If you get divorced, make sure, make sure you know which, who's getting what NFTs.

• 1:51:05Ryan Sean Adams?

  That is a very, very important point, sir. That's awesome. All right, guys.

• 1:51:08David Hoffman?

  Hopefully, there's not.

• 1:51:10Ryan Sean Adams?

  Don't get divorced.

• 1:51:11David Hoffman?

  Hopefully, don't get divorced. But also hopefully, our NFTs don't go by the way of beanie babies.

• 1:51:15Ryan Sean Adams?

  Yeah, is that what this is a prelude to?

• 1:51:19Ryan Sean Adams?

  Yeah, what are those beanie babies worth now, huh?

• 1:51:23Ryan Sean Adams?

  Hilarious.

• 1:51:23David Hoffman?

  Too much inflation.

• 1:51:25Ryan Sean Adams?

  This has been the weekly roll up. Of course, none of this has been financial advice. Eth is risky. DeFi is risky. Beanie beep. I'm sorry. I mean, NFTs are risky as well. You could lose what you put in, but we are headed west. This is a frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.

• 1:51:42David Hoffman?

  And for those that missed the top signal show, here is your moment of zen.

• 1:51:56Speaker 02

  Jeez.

• 1:51:59Speaker 02

  Keep a tight perimeter.

• 1:52:17Speaker 02

  Begin!

• 1:52:34David Hoffman?

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

• 1:53:19David Hoffman?

  Ask Me Anythings, and weekly rollups where we summarize the week in crypto and other fantastic content. Thanks everyone for watching and being on the journey as we build out the Bankless Nation.