ROLLUP: Coinbase is Suing the SEC

Bankless Weekly Rollup 2nd Week of April 2023 ------ 🚀 TOKEN HUB 🚀 https://www.bankless.com/join?utm_source=YouTube&utm_medium=Intro&utm_campaign=Intro_CTA1 https://www.bankless.com/join?utm_source=YouTube&utm_medium=Intro&utm_campaign=Intro_CTA1 ------ BANKLESS SPONSOR TOOLS: 📣 SAFE (Gnosis) | ACCOUNT ABSTRACTION https://bankless.cc/AA ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://bankless.cc/kraken 🧠 AMBIRE | SMART CONTRACT WALLET https://bankless.cc/Ambire 👻 PHANTOM | FRIENDLY MULTICHAIN WALLET https://bankless.cc/phantom-waitlist 🦊METAMASK LEARN | HELPFUL WEB3 RESOURCE https://bankless.cc/MetaMask ------ Topics Covered 0:00 Intro 4:30 MARKETS 6:30 Mt Gox https://twitter.com/tier10k/status/1651317391626846214?s=20 10:00 ETH Staking https://www.theblock.co/data/on-chain-metrics/ethereum/cumulative-eth-deposited-to-beacon-chain-and-validators 12:00 Staking Dashboard https://dune.com/hildobby/eth2-staking 15:25 Polynya Post https://polynya.mirror.xyz/1ZTJ3_BG2-wnBTy6dJLM5E3TPH8wvLGKQVDAnv7VLIw 20:30 Coinbase Suing the SEC https://twitter.com/iampaulgrewal/status/1650655451720318976?s=20 22:00 MetaLawMan Comments https://twitter.com/MetaLawMan/status/1650847807480135681?s=20 24:50 Coinbase Responds to SEC https://youtu.be/pvbWPUCFdKA 36:30 Shield NFT https://twitter.com/coinbase/status/1650612986980048897?s=20 38:30 John Oliver https://youtu.be/o7zazuy_UfI 51:00 Voyager Binance Deal https://twitter.com/investvoyager/status/1650921887512272917?s=20 52:45 SBF Parents https://www.courtlistener.com/docket/66631291/133/united-states-v-bankman-fried/ 54:30 Lens Bonsai Layer 3 https://twitter.com/lensprotocol/status/1651270830729592832 55:05 DevConnect Istanbul https://twitter.com/EFDevconnect/status/1649069463797481472 55:45 Mad Lads https://twitter.com/Pinapaan/status/1651413751378354176?s=20 57:30 MiCA Going Through https://twitter.com/paddi_hansen/status/1649070968579452933?s=20 59:53 TransUnion DeFi Credit Score https://newsroom.transunion.com/transunion-spring-labs-and-quadrata-partner-to-deliver-credit-scoring-to-blockchain/ 1:00:45 Phi Bankless https://twitter.com/phi_xyz/status/1650801856329949184 1:02:10 Swell Maine https://twitter.com/swellnetworkio/status/1650672099382685698?s=46 1:02:50 Jobs https://pallet.xyz/list/bankless/jobs 1:06:20 Questions from the Nation https://www.bankless.com/join?utm_source=YouTube&utm_medium=Intro&utm_campaign=Intro_CTA1 https://www.bankless.com/join?utm_source=YouTube&utm_medium=Intro&utm_campaign=Intro_CTA1 1:12:00 Chamath Says Crypto is Dead https://youtu.be/WvTTDxMuAis?t=4870 1:15:50 Running an ETH Node https://twitter.com/EthereumOnARM/status/1650805006872768512 18:30 AGI Alignment https://twitter.com/TrustlessState/status/1651538022360285187?s=20 1:22:45 What David’s Bullish On 1:24:40 What Ryan’s Bullish On 1:29:00 MEME of the Week ---- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://www.bankless.com/disclosures

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

• 0:00Ryan Sean Adams?

  Coinbase is suing the SEC, or as David would say, we are suing the SEC.

• 0:04David Hoffman?

  We're suing the SEC.

• 0:10Ryan Sean Adams?

  Bankless Nation, it is the last Friday of April 2023. What time is it, David?

• 0:15David Hoffman?

  It's the Bankless Friday Weekly Rollup, where we cover the entire weekly news in crypto, which is always an ambitious endeavor. We got some lawsuits to talk about, this time in our favor. We're the ones doing the suing. Feels good, man. But in order to prepare for all of that content, make sure that you have your morning coffee. You got your coffee, Ryan?

• 0:35Ryan Sean Adams?

  I totally do.

• 0:35David Hoffman?

  You're gonna need it.

• 0:37Ryan Sean Adams?

  Yep. Also, we should clarify, it's not you and I suing anybody, at least not in this case.

• 0:41David Hoffman?

  We, we, we as the crypto industry are doing the suing. We the people are suing the powers that be.

• 0:49Ryan Sean Adams?

  This is Coinbase suing the SEC.

• 0:51David Hoffman?

  It's taken a while to get into that. I guess I should just say that.

• 0:55Ryan Sean Adams?

  We'll talk about that. Also, John Oliver, he's got some fighting words for crypto. Well, I think, you know, it's mostly fair coverage. We're going to talk about this. I think it was the mainstream take, though. We'll talk about what that means. David, what else are we covering?

• 1:08David Hoffman?

  Authorities are looking into SBF's parents. So SBF, the Bankman Fried name, back in the menu today. But then, of course, we're going to get back into our roots. Talk about Chapella two weeks forward, some more Rocket Pool stats, and something on Solana I think is cool. So we'll talk about that as well. Yeah, go figure.

• 1:29Ryan Sean Adams?

  Is it a phone, David?

• 1:30David Hoffman?

  It's not a phone. It's not the phone.

• 1:32Ryan Sean Adams?

  It's a backpack. It might be a backpack.

• 1:33David Hoffman?

  It's not the backpack. I don't know what the backpack is.

• 1:36Ryan Sean Adams?

  To be continued. Guys, and of course, if you like Bankless and if you like crypto, make sure you like and subscribe, rate and review. That's how we pop to the top of the charts. Want to get to the top of the charts in Spotify and YouTube and any other charts that exist, we want to get the crypto message out there. David, before we-

• 1:52David Hoffman?

  See how much AI Ryan is? Like, if that's a chart, I want to be there.

• 1:55Ryan Sean Adams?

  It's a chart. Let's, let's optimize. Speaking of this, speaking of optimization, the Safe Wallet wants you to know about account abstraction, which is an optimization that they are working on. So Safe, of course, used to be called Nosis Safe. It's now called Safe. It's the multi-sig that everybody in Ethereum uses, including Bankless. You've heard us talking about account abstraction before as well. Account abstraction is kind of the new smart contract wallet that is going to put fintech user experience to shame. And now Safe has something they are rolling out, a way for you to tap into their account abstraction. David, tell them about this SDK.

• 2:37David Hoffman?

  So if you are a developer, and like we all know, have been chanting on Bankless, we are in the paradigm of externally owned accounts. It's a terrible name. They're called private keys. 99% of wallets are private key externally owned account wallets. Eventually, in the future, 99% of wallets will be account abstraction. Also a bad name. Smart contract wallets. And Nosis Safe, also called Safe, is helping us get there with this SDK for developers to build more smart contract wallets so that we can fix all of crypto's goddamn terrible UX problems. And so Safe and their Safe Core Account Abstraction Software Development Kit.

• 3:20David Hoffman?

  Devs name stuff so weird. But they've got a dev package for all the devs out there. So it helps you build on-ramps. It helps you build your protocol. It helps you build relays for gasless transactions and meta-transactions. It's got a little plugin for your fiat on-ramps because you're going to need to get money into your wallet. And so if you are building in the world of account abstraction, if you're building a smart contract wallet, or you need something like this for your Web3 game or whatnot, the Core SDK, which is available in the link in the show notes, is for you.

• 3:52Ryan Sean Adams?

  And also, there's a hackathon going on on Monday. This is Monday, May 1st.

• 3:56David Hoffman?

  May 1st.

• 3:56Ryan Sean Adams?

  If the dev stuff didn't appeal to you, this is a hackathon for everybody. They call it an anything goes hackathon?

• 4:03David Hoffman?

  A, anything. It's really hard to explain. The word anything, but with two As and they're both capitalized because it's an contraction hackathon. But anything goes. So anything goes. If you're a non-tech, if you're a non-developer, you can do stuff just like, explain a project. You can do the marketing, the presentation. You can make memes. Anything goes hackathon. So it's like everything else is non-technical.

• 4:27Ryan Sean Adams?

  I love these.

• 4:28David Hoffman?

  Also a great way to start and get on a team and to get some practice and sharpen your sticks in the Web3 world.

• 4:34Ryan Sean Adams?

  Yeah, more inclusive hackathons. That's, that's cool. I hope this trend continues. David, let's get to the market. Speaking of trends and whether they're continuing or not. Got to start with the Bitcoin price today. Are we continuing the trend up, down, or flat?

• 4:47David Hoffman?

  Dude, crypto prices were super weird this week. Net flat. Net flat on the week. So Bitcoin is down 0.33%, so it's flat. We are currently at $29,000. Almost touched $30,000. Almost broke below $27,000. But here we are at the end of the week, flat. But I will remind Bankless Sis, you should probably just pull open your phone and check the price right now because I don't know what it's going to be like in 24 hours.

• 5:15Ryan Sean Adams?

  Well, speaking of which, before you do pull out the phone, let's talk about the ETH price at the time of recording. Did that do similar things to Bitcoin flat on the week?

• 5:23David Hoffman?

  Slightly down, but it's, it's flat. Ether went down 2% this week. It's.

• 5:28Ryan Sean Adams?

  You know what's really funny?

• 5:29David Hoffman?

  It's flat.

• 5:30Ryan Sean Adams?

  Do you see these red candles? You see them both on the Bitcoin chart and the Ethereum chart?

• 5:34David Hoffman?

  Yeah, so, okay, so we had a pump. So, yeah, the red candle happened while we were recording with Ledger. Ether pumped from 1,800 almost up to 2,000 and we were like, we're back, baby. Same thing with Bitcoin. Bitcoin almost, it like hit 30,000 and it bounced off of it. And then like five hours later, everything dumps back down. Ether goes from almost 2,000 down to 1,800. Bitcoin goes from 30,000 down to 27,000. And now we're back right in the middle of the. Those two things. So Ryan, what the hell happened?

• 6:05Ryan Sean Adams?

  Well, this was happening, by the way, during, we don't usually do shows on just prices and just charts, but we did a show on just prices and just charts. And this is the candle we experienced during that show.

• 6:15David Hoffman?

  Right.

• 6:15Ryan Sean Adams?

  Do you see that, like, talk on Twitter, people were blaming the thumbnail of that show as the problem? It's like a big goofy, a picture of like Ledger with his like mouth up and he looks scared.

• 6:24David Hoffman?

  Yeah, that one might have been our fault.

• 6:26Ryan Sean Adams?

  But that, that wasn't the case. So I don't, I don't think we can be blamed for this, at least, David. There was news breaking during the show, Mt. Gox and the US government wallets making transactions. The infamous original Mt. Gox wallets that were supposed to be sort of locked up, maybe doing things, maybe causing a sell off. This news sort of propagated. It turns out, David-

• 6:47David Hoffman?

  The Mt., so the TLDR of Mt. Gox is that there has been a decent amount of Bitcoins, something like 10 to 20% of the supply of the Mt. Gox hacked Bitcoins that has been locked up in the court proceedings. Because some of the Mt. Gox-

• 7:00Ryan Sean Adams?

  Forever.

• 7:01David Hoffman?

  Forever. Because some people keep on delaying and delaying, delaying. I don't know why the strategy is behind that. Anyways, the Mt. Gox Bitcoin unlock FUD has been with us since I've been in crypto.

• 7:12Ryan Sean Adams?

  Like, oh, yeah.

• 7:13David Hoffman?

  It's like that meme of like the truck running into the wall, but the camera cuts every single time. It's been like that for like four, four years. And so the news broke that a Mt. Gox wallet actually started sending transactions, implying that the FUD has finally arrived. The, the truck is finally going to crash into the wall. And so an alert, like a Bot alert, alert about like, hey, this wallet's making transactions went out, which is what triggered this tweet from DB, who does all of these breaking tweets, saying Mt. Gox, Mt. Gox wallets are moving, they're gonna sell, they're gonna sell. The implication is that like the 10 to 20% of the Mt. Gox exploited Bitcoins are basically going to be sold-

• 7:54Ryan Sean Adams?

  Gonna tank the market.

• 7:55David Hoffman?

  Right. Because they were 1,000 to, they were like 300 to $1,000 at the time of purchase. And now it's whatever the price it is now, $30,000. So you're gonna assume that these people are finally going to liquidate that, that like almost decade-long force hold. So that's the story. And then these things actually start moving on chain to set off this alert, this Arkham alert, which triggers this tweet, which forces the market to sell off. That was all that backstory. Turns out, it was an errant bug. So, once again, the truck did not crash into the wall. So-

• 8:24Ryan Sean Adams?

  Turns out, we just totally wasted your time by telling you this. Just like the markets wasted our time.

• 8:30David Hoffman?

  Yeah.

• 8:30Ryan Sean Adams?

  In like producing this errant signal. I, I, I feel like this is a bigger picture of the markets right now, David, which is like, no one really knows what to do. And so there's all of this noise.

• 8:41David Hoffman?

  Right.

• 8:41Ryan Sean Adams?

  This is just more noise.

• 8:42David Hoffman?

  Yeah.

• 8:42Ryan Sean Adams?

  People asking like, why the price up and down? It was a false alert, but now it's kind of stayed down, at least from the highs, but like.

• 8:48David Hoffman?

  It bounced like a little bit.

• 8:50Ryan Sean Adams?

  There's so much noise in this kind of market and I just kind of filtered out.

• 8:53David Hoffman?

  I'm just, I'm just done with it. I'm over it.

• 8:57Ryan Sean Adams?

  How about the ratio? You done on the ratio?

• 8:58David Hoffman?

  I'm also done with the ratio.

• 9:00Ryan Sean Adams?

  Okay. Cause it's going down.

• 9:03David Hoffman?

  It's, it's, it's at point 065. So like downer ish, but it's still within the last range. It's been in the last two years. Nothing is significant below, until we get, start to get below like point 055.

• 9:15Ryan Sean Adams?

  Ledger had good commentary.

• 9:16David Hoffman?

  Eight, point 08.

• 9:18Ryan Sean Adams?

  Ledger had good commentary on the ratio.

• 9:20David Hoffman?

  Yeah, he did. That was a really good episode. People should go watch that.

• 9:23Ryan Sean Adams?

  Did it change your mind at all? Are you still holding the ratio for a?

• 9:27David Hoffman?

  Well, yeah, because like, cause he was like, they, like David, if like, you know, Bitcoin goes Bitcoin Hulk mode and Bitcoin's at a hundred thousand dollars and Ether's only at five thousand dollars, that is a ratio of like point, I'm gonna catch you with the math. It was something like point 05 or something. And I'm like, well, that's, I held that my, my ratio trade down to the three hours capital liquidation when it got down to point 04 or something. So like.

• 9:50Ryan Sean Adams?

  Not scared.

• 9:51David Hoffman?

  Come at me, bro. Like, I'm not scared. Yeah.

• 9:53Ryan Sean Adams?

  No, ETH, ETH is a different ETH than the last bear market. And that was the main thrust of Ledger's argument. Last bear market, it was weak.

• 10:00David Hoffman?

  It was so weak.

• 10:01Ryan Sean Adams?

  So weak in comparison to Bitcoin. We've got a much stronger ETH this time around. Global crypto market cap, I'm going to say it this time, David, because it's so uninteresting.

• 10:09David Hoffman?

  You're taking it from me two weeks in a row.

• 10:10Ryan Sean Adams?

  We're above a trillion, 1.24 trillion. That's, that's what you need to know. Tell us about this story though. Human of ETH deposit with beacon chain and validator. Should we shook the snow globe? What's happening with all the, the ETH that was staked? Is it being unstaked? Is it staking elsewhere? What's going on?

• 10:25David Hoffman?

  So I've become a connoisseur of Chappella metrics, dashboards, et cetera. This dash, this particular dashboard from the block, I think is, is the best one to illustrate the Chappella snow globe. So this is the ether supply deposited into the beacon chain since the launch of the beacon chain in December of 2020. And of course, the chart is up only the entire time up until the Chapella withdrawal fork that happened two weeks ago. And so the line is literally cannot go down up until two weeks ago. And then the withdrawals happened. And this was like, though, the withdrawals are coming, the withdrawals are coming, everyone's going to withdraw. And you can see, you can see the first moment that this line goes down at the teeny little top right there. And it goes from a whopping 18 point something

• 11:08David Hoffman?

  million ether staked down to like 17.7, 17.5 million ether staked. And we have continued on the same uptrend that we've been on since December of 2020. Withdrawals seem to have slowed down and deposits have continued. And so the withdrawal seemed to be over two weeks.

• 11:30Ryan Sean Adams?

  David, I want to take you back down memory lane crypto grandpa. Do you remember when it was, we were worried, the Ethereum community is worried about getting 500k ETH staked?

• 11:42David Hoffman?

  Cause we, cause we needed 500k to kickstart the beacon chain and like, we weren't necessarily getting there.

• 11:46Ryan Sean Adams?

  Are we gonna get it? Look, look at this. That's way back here. 500k ETH. And now we're talking about like, just, you know, yeah, 18 million.

• 11:55David Hoffman?

  500k ETH got withdrawn, and that is a blip.

• 11:58Ryan Sean Adams?

  Yeah, it's just a blip. What about this? Another dashboard for, for the fine connoisseur of dashboarding that you are, how do you rate this Hill Dobby dashboard? What can we take away from ETH staking here?

• 12:09David Hoffman?

  This Hill Dobby dashboard is a top tier, very fine, very fine dashboard. It's very nice. We are net inflows sent to the Shanghai Chapella hard fork, a negative 440,000 ether in the deposit in the beacon chain. So that is the number of ether that has been net withdrawn. That used to be lower. I think it was as low as something like point seven million. Now we're at point 44 million. The total supply of ether on the beacon chain, 18.7 million. And the, actually, the cool parts about this thing, if you go to scroll down a little bit further. So stakers, the delta stakers in the last month. So you can filter that Ryan by market share. And so you can see who's won and who's lost in the last like month or so by clicking on the market share word.

• 12:54David Hoffman?

  That's in the last week, but go over to the one, go over to the month because it's been more of more than one week. So Kraken, obviously the big loser because of lost all their stake to because Gary Gensler forced them to. But even Coinbase, who was unforced, also is a net loss of ether, net net outflows of ether. Who will be Gemini decentralized exchanges. Now, if you click that one again, we will see who the winners are. So the market share increase, if you order by who has won the most of the snow globe. So where has all that snow landed? That good old ether. Unidentified is the winner here at 1.5% growth in market share, which is big, by the way. Who's identified unidentified? Who is that, Ryan?

• 13:37Ryan Sean Adams?

  It's probably a lot of solo stakers.

• 13:39David Hoffman?

  Right. They're identified because they're solo stakers. Those are the many people at 1.5% coming in second is staked.us. I think that is staked wise coming in second at they gained 0.6% market share. Stakefish, P2P, OKX, followed by Rocketpool at 0.2%. And so that is the winners and the losers. Pretty cool.

• 14:01Ryan Sean Adams?

  So the snow globe is happening to some, to some extent. And you know, what's really interesting is this is just a blip off of the high. Do you think we've bottomed already, David, on the

• 14:11David Hoffman?

  Oh, yeah.

• 14:11Ryan Sean Adams?

  Withdrawal to deposit ratio?

• 14:12David Hoffman?

  I think we bottomed. Yep. I'm famous for calling bottom, for calling bottoms. Calling the bottom.

• 14:18Ryan Sean Adams?

  You know what? I'm gonna, I'm gonna agree with you. It's both David and Ryan calling the bottom. So you know, it can't be wrong.

• 14:23David Hoffman?

  That doesn't happen often.

• 14:24Ryan Sean Adams?

  Two, two bankless hosts calling the bottom right now. It's gotta be the bottom.

• 14:28David Hoffman?

  The other thing that's worth noting actually is that Lido has not yet enabled withdrawals. They had like two, they have had like two or three more weeks. I think it's at the end of May when they, so like they still have their snow globe moment. And honestly, like when you're in the lead of staking derivatives and you're like taking your time to like enable withdrawals, like, yeah, I bet you guys would take your time to enable withdrawals.

• 14:53Ryan Sean Adams?

  I, uh, well, maybe I shouldn't have called the bottom just now because who knows what could happen with the Lido. That's a pretty

• 14:59David Hoffman?

  I, well, I wouldn't be too worried about that because you can always exit as a Lido person with steak teeth. And so there is an exit route. But yeah, there will be some pent up demand. Lido has definitely got a lot of net inflows. But that's because they're, it's kind of unfair because they literally don't allow outflows. So it's still in only for Lido.

• 15:22Ryan Sean Adams?

  You know, it's a market piece I really enjoyed this week was a piece by Palenia, who is an L2 researcher in general, pseudonymous, had them on the bankless podcast before, and they do a quick tour of the top five chains by economic activity. This is a post I think is worth reading. We'll include a link to it in the show notes, but I'll go through the kind of the breakdown. Number one, top chain by economic activity.

• 15:46David Hoffman?

  I'm holding my breath.

• 15:47Ryan Sean Adams?

  Of course, you know it, Ethereum at number one by a lot. Okay, Ethereum secures 420 billion across ETH, ERC20s, and NFTs. Palenia goes through different dimensions to kind of judge both passive and active economic activity. And Ethereum is the lead on both, both passive and active. Of course, it's far in the lead over the number two, which is Bitcoin on active. And number two indeed is Bitcoin. After that, Palenia mentions this very large gap, this very large delta. Yeah, there's like, it's a two horse race, basically, with Ethereum leading by a lot on the active side on economic activity. But then after that, you get into Arbitrum.

• 16:31Ryan Sean Adams?

  It's number three on Palenia's list, followed by Tron and Binance Smart Chain. What's interesting is if you have been mostly absorbing bankless content, right? We don't talk much about the Tron story, do we? We don't talk much about the Binance Smart Chain story. The reason we don't is because

• 16:50David Hoffman?

  We're biased ETH maxies.

• 16:51Ryan Sean Adams?

  Well, we're biased decentralization maxies. And I totally will admit that. Like, I am a biased decentralization maxi. Like, I can't, like, both of us are. And so, but Tron is doing a lot of activity and somewhere in the spectrum of like, is it sort of a bank? Is it fintech? Or is it crypto? Is it an open banking system? I think the answer to that is yes. And it's doing a lot with Tether right now. Binance Smart Chain as well. So if you talk to people in Argentina right now, and what crypto are they actually using? It's like stablecoins on Tron and Binance Smart Chain. That's what's happening.

• 17:29David Hoffman?

  And that Tron has great adoption in financially underserved parts of the world.

• 17:36Ryan Sean Adams?

  I think it's great. I'm not mad about this. It's more private keys in the hands of more people.

• 17:40David Hoffman?

  Yep.

• 17:41Ryan Sean Adams?

  Hopefully it doesn't rug everyone at some point, but it's got some rug resistance in it, not a lot, a little bit.

• 17:47David Hoffman?

  It's got some, it's got a decent amount of Lindy, I'd say.

• 17:49Ryan Sean Adams?

  Yeah, that's kind of cool. Anyway, that's the breakdown.

• 17:51David Hoffman?

  He does follow up, excuse me. They, they also follow up saying that the once dominant number two player, Binance Smart Chain, and also Tron, has been dethroned by Arbitrum One this last bear market. If the YouTube viewers are confused about the tweet that was on screen that didn't go by the list that Ryan and I just said, that's because Polenya elaborates further on about his reasoning, their reasoning.

• 18:12Ryan Sean Adams?

  Oh, yeah, yeah. I've shown a faulty tweet. All right, David, what do we got coming up next?

• 18:16David Hoffman?

  Coming up next, Coinbase suing the SEC. That's us, I claim.

• 18:22David Hoffman?

  And a public response, interesting strategy. They're posting their response to the SEC, both as a written letter, because that's what you do, and a YouTube video, taking a leaf out of influencer Gary's book. So we're going to watch a clip out of that, that YouTube video. And we'll also take a peek, Ryan, at a case study of some character development, if you will, of a pre-SEC Gary Gensler at MIT giving some takes. So we're going to watch some clips. Been, we've been clip heavy on the weekly roll up in the last couple of weeks.

• 18:53Ryan Sean Adams?

  I like clips.

• 18:53David Hoffman?

  And that continues. Speaking of clips, John Oliver, got some John Oliver clips as well. And he's got some takes for crypto as well for the mainstream. So we're going to play all those scripts and talk about them and all that stuff as soon as we talk to some of these fantastic sponsors, especially Kraken, our strategic sponsor for 2023, the one that we always look at when we look at prices earlier in the show. So thank you, Kraken, for helping us look at these prices. Let's go hear from Kraken right now. Kraken Pro has easily become the best crypto trading platform in the industry. The place I use to check the charts and the crypto prices, even when I'm not looking to place a trade. On Kraken Pro, you'll have access to advanced charting tools, real-time market data, and lightning-fast trade execution, all inside their spiffy new modular interface. Kraken's new customizable modular layout lets you tailor your trading experience to suit your needs.

• 19:36David Hoffman?

  Pick and choose your favorite modules and place them anywhere you want in your screen. With Kraken Pro, you have that power. Whether you are a seasoned pro or just starting out, join thousands of traders who trust Kraken Pro for their crypto trading needs. Visit pro.kraken.com to get started today. If you haven't yet experienced the superpowers that a smart contract wallet gives you, check out Ambire. Ambire works with all the EVM chains, the layer 2s like Arbitrum, Optimism, and Polygon, but also the non-Ethereum ecosystems like Avalanche and Phantom. Ambire lets you pay for gas and stablecoins, meaning you'll never have to spend your precious ETH again. And if you like self-custody, but you still want training wheels, you can recover a lost Ambire wallet with an email and password, but without giving the Ambire team control over your funds. The Ambire wallet is coming soon for both iOS and Android.

• 20:20David Hoffman?

  And if you want to be a beta tester, Ambire is airdropping their wallet token for simply just using the wallet. You can sign up at ambire.com, and while you're there, sign up for the WebApp Wallet experience as well. So, thank you, Ambire, for pushing the frontier of smart contract wallets on Ethereum.

• 20:34Ryan Sean Adams?

  Coinbase is suing the SEC, or as David would say, "We are suing the SEC."

• 20:38David Hoffman?

  We're suing the SEC.

• 20:40Ryan Sean Adams?

  This is a tweet from Paul, the chief legal officer at Coinbase. He says, "Today, we filed a narrow action in the US Circuit Court to compel the SEC to respond yes or no to a rulemaking petition we filed with them last July, asking them to provide regulatory guidance for the crypto industry. All they want is a simple yes or no." David, what is happening here?

• 21:01David Hoffman?

  So, I've never heard of this "narrow action" phrase before. I'm assuming it's a legal term to sue... They're suing them to do this one thing, which is reply yes or no to this petition, which you've got pulled up that they filed with them last July. So, they filed a petition... If you want to skip over to that one, Ryan. They filed this petition forever ago, and Coinbase...

• 21:24David Hoffman?

  As suing the SEC to get them to just say yes or no to this petition.

• 21:27Ryan Sean Adams?

  Reply to our letter.

• 21:29David Hoffman?

  Follows up his tweet saying, "The SEC is required by law to respond to petitions, quote, "within a reasonable time, but they have not yet responded to our petition from last July, which we are coming up to almost a year on, being May almost. And so that they are suing them for not doing that, their job in a reasonable amount of time." Cool. I mean, it's not that big of a deal. Like it's just a yes or no lawsuit. But I mean, the implications of that are large.

• 21:56Ryan Sean Adams?

  Have they not gone in for office hours with Gary David?

• 21:58David Hoffman?

  They have not gone, they have not gone in for office hours.

• 22:00Ryan Sean Adams?

  Well, come on Coinbase. All you have to do is go to office hours.

• 22:03David Hoffman?

  So we found this Twitter thread from Meta Lawman, who is a lawyer who comments on this. And so here's what they, here's everything you need to know about this real quick, real quick. This case will move fast, he claims, unlike the Ripple case. This will begins in the appellate court, not the trial court. I don't know what an appellate court is. There will be no discovery, just a briefing and a hearing. He follows and says Coinbase has an all-star legal team led by Eugene Scalia, former Secretary of Labor and son of Supreme Court Justice Antonin Scalia. Coinbase is seeking a writ of mandamus, which is, God, the legal system, which is a court order compelling the SEC to do its job and announce a decision on Coinbase's request for rulemaking.

• 22:47David Hoffman?

  This action does not necessarily affect the SEC's timing for suing Coinbase as it has threatened to do. Again, it's a separate issue which we will talk about. And then he follows up and says, "I expect major industry players to pile in with amicus briefs supporting Coinbase's position. We might also see the House Financial Services Committee or individual members come in with briefs in support of Coinbase, which we recently saw from last week's hearing that yes, there is a lot of support for this. The SEC commissioners will have to approve any response to Coinbase's action. There's a tiny chance that the SEC will blink and agree in exchange in rulemaking. If just one commissioner withdraws their support for Gary Gensler's regulation by enforcement strategy, he's done." Wow. "While Coinbase's action does not directly affect pending SEC cases against Ripple,

• 23:30David Hoffman?

  Bitrex and others, it does a great job in shining a spotlight on the SEC's contradictory positions about its authority to regulate digital assets. Other judges will take note." I remember, I think. A month ago, I can't remember when, but one theme of the roll up was like Gary Gensler is Icarus-ing. He's flying too close to the sun. He's gone too far. It was probably the weekly roll up where they, the SEC announced the Wells notice against Coinbase. And what we said is like, oh, they just, Coinbase is too big. They're gonna fight them tooth and nail. And also, they're gonna lose because they're standing on shaky footing. And so, all of that is seemingly shaping up. And this is where we are.

• 24:10Ryan Sean Adams?

  Yeah, by the way, in that thread that you read, if just one commissioner withdraws their support for Gary Gensler, what Meta Lawman means is one additional commissioner. We already have some SEC commissioners. Hester Purce, of course, has famously dissented with just about everything Gary has tried to do with his crypto policy. If she can get one more commissioner to dissent and defect from Gary's side of things, then Gary is done.

• 24:36David Hoffman?

  What does that mean?

• 24:39Ryan Sean Adams?

  He's like, that's a great question. What does this mean by done? Like, I don't think it means he's fired. I just think it means he has to like capitulate to this one particular issue. There's some other things going on from Coinbase as well, including this video, which was just released as of this morning. David, what are we about to watch?

• 24:58David Hoffman?

  Okay, so this is the Coinbase response to the SEC in video format. It's a longer video. It's 13 minutes. This is a four minute clip. They are releasing their response. They're also filing like a normal document that looks like a legal document. But they're also doing the 2023 thing, which is apparently to also

• 25:18Ryan Sean Adams?

  You gotta wear suits.

• 25:19David Hoffman?

  You gotta wear suits and you also have to fight on social media. And so, we're taking the, we're taking the fight to the, the algorithms. And so, they are posting this video on the Coinbase YouTube. And here is Brian and Paul with their response to the SEC Wells notice, the, the Icarus-ing of, of the SEC. This is their response. So, let's watch this. Actually, Ryan and I have not watched this. So, we are watching this for the first time right now. Let's go.

• 25:46Speaker 02

  To the Chair, other Commissioners, and staff of the Securities and Exchange Commission, I want to thank you for this opportunity to speak directly to you. My name is Paul Graywell. I'm Coinbase's Chief Legal Officer. And with me is Brian Armstrong, the Chief Executive Officer and Chairman. Hi, Brian. I'd like to start by turning things over to Brian to say a few words. Brian?

• 26:07Speaker 03

  Yeah, thanks, Paul. So again, thank you for the opportunity to respond to this Wells notice. And I thought I'd share a few words just about the founding story of Coinbase and why I decided to base it here in the US and how we've practically sought out compliance over the last 11 years. So back in 2012, I had just read the Bitcoin White Paper, and you know, something clicked in my head when I first read this, that this might be a very important technology breakthrough that could help update the financial system globally. You know, I'd had a firsthand experience seeing how difficult and challenging certain aspects of the financial system were. I had been a software engineer at Airbnb, and I had seen how difficult it was to send and receive payments globally to 190 countries. It was slow and expensive and difficult.

• 26:50Speaker 03

  I had lived in Argentina, actually, for a year, studying abroad and working abroad. And I had seen what a country looked like that had gone through hyperinflation, where people had lost trust in the currency and they didn't have access to good financial services. They couldn't get loans, for instance, to buy a car or a home. And so when I read the Bitcoin White Paper, I thought, this might be an important breakthrough, something on the order of what we saw with the internet, a new global and decentralized system that could make it easier for people to transmit value and update financial services globally. The next decision I had was, where do I want to start this company? Once I realized I wanted to start a company. And you know, I went to some early Bitcoin meetups in San Francisco, and people were telling me, you know, you shouldn't base it in the US, it's going to be too challenging,

• 27:34Speaker 03

  there's 50 state regulators and multiple federal regulators, and you should start it in Hong Kong or Singapore. And there was other firms that were starting at that time that did that. But I made the choice at that moment to start the company in the US because I knew that even if it was more difficult, the US was a major market, there was respect for rule of law, the US was a financial hub, a technology hub, it was a place where I felt entrepreneurs could work in good faith with regulators to help define clear rules for new industries as they emerged. And so I was lucky enough to raise some venture capital money, you know, the prototype on my laptop nights and weekends turned into a small company and we went off to the races. You know, 11 years later, fast forward, this strategy

• 28:17Speaker 03

  of proactively working with regulators in cases where it really wasn't clear what we should do because it was a new industry, we tried to do the right thing in the absence of clarity and demonstrate good faith effort that would allow us to bring this technology in a safe and thoughtful way to hopefully a billion people someday. So here we are as a public company, I think we've made enormous strides and I think the message I'd really like to leave with the commissioners and the SEC is that we're committed to working within the regulatory perimeter. We want to see a clear market structure for trading crypto securities. Not all crypto assets are securities. There's also crypto commodities, there's stable coins, there's crypto that's artwork. We're going to work with multiple

• 28:58Speaker 03

  regulators to make this industry safe and trusted. And a Wells notice at this stage when there is not a clear rulebook is not constructive and it's not good for America. We are prepared to defend that position in court, but it doesn't have to come to that. We welcome a true dialogue about a workable path forward for our industry. Now I'll hand it back over to Paul.

• 29:21Speaker 02

  Coinbase has been talking to the SEC about our business for many years now, including sharing our legal views on our asset listing and staking services. We have repeatedly asked the SEC for its own views on how securities laws might apply to Coinbase and our industry. And to be candid, we've mostly gotten silence in response. Coinbase will defend itself vigorously in litigation if it comes to that, but it does not have to come to that. We will show up at your offices any day, anytime to discuss a workable path forward for our industry, but we won't find that path without true dialogue.

• 29:57David Hoffman?

  Yo.

• 29:58Ryan Sean Adams?

  There you go.

• 29:59David Hoffman?

  Bringing in the lawyer.

• 30:00Ryan Sean Adams?

  That's interesting. I think it's a great format, actually, rather than just a press release or a letter. It's just like a four minute YouTube video.

• 30:07David Hoffman?

  And you would say that as a podcaster.

• 30:09Ryan Sean Adams?

  Well, of course I would. I'm, you know, I'm a video maximalist, podcast maximalist. But also I think that it's interesting, the way Brian started with telling his personal story. And it's like the story that kind of like, I chose to base this company in America.

• 30:23David Hoffman?

  And I'm a patriot.

• 30:24Ryan Sean Adams?

  I did the American dream thing where you start with an idea and then you develop that in America. And then you like, turn it into a publicly traded company.

• 30:36David Hoffman?

  Right.

• 30:37Ryan Sean Adams?

  I did all of the things that I thought you wanted me to do.

• 30:43David Hoffman?

  Right.

• 30:43Ryan Sean Adams?

  And now we're getting penalized with, with regulators who are just unworkable. And you sent Wells notices that there's going to be enforcement and like, just stop it. Right? Like, you're not even willing to talk to us. What's going on? I think it's effective. I hope it lands. What do you think? You think this video is going to land?

• 31:05David Hoffman?

  Well, I think when you compare and contrast this video versus the Gary influencer video, like they didn't need to make this video. They just needed to submit a document, a legal document, which they did, which so few people are going to watch. So many more people are totally going to watch this video. And like, if you compare this video to Gary's stupid stock footage influencer video, this is going to resonate way more.

• 31:29Ryan Sean Adams?

  Well, you know, it's the reason everyone's doing these videos is because I think they all recognize that this is a battle for hearts and minds at this point in time.

• 31:37David Hoffman?

  Hundred percent.

• 31:38Ryan Sean Adams?

  Right? It's not just, it's not just, we'll see you in court, even though that was kind of the not so veiled threat there, which is, thank God, we have another check and balance.

• 31:46David Hoffman?

  But it's like Brian showing up to tell a story and then his lawyer next to him, the bad cop being like, and we're going to sue you.

• 31:55Ryan Sean Adams?

  Anyway, I think it's effective. David, you want to do some throwback clips of Gary Gensler, the way he used to be before accepting the job here?

• 32:03David Hoffman?

  Yeah, this is, this is pre-SEC Gary Gensler. This is before he turned into a paid shield for the banking sector, when he was a free man, if you will, giving his free, unadulterated takes as a professor of knowledge at MIT. So here's what Gary has to say about how you start a decentralized crypto network. Let's hear from Gearbear.

• 32:23Speaker 04

  And, and, and it could be something that has no central authority right now, no central intermediary, and it's just how to jumpstart something. I think in that circumstance, it's more likely you need a native token.

• 32:37David Hoffman?

  Hmm. So you want to start a decentralized network, you need something to jumpstart it. And so Gary says, that's why you use a native token. Interesting. Interesting. Okay.

• 32:50Ryan Sean Adams?

  Go on, Gary.

• 32:50David Hoffman?

  But Ryan, do you think that those native tokens are securities? Let's, let's ask 2018 Gearbear. Here we go.

• 32:59Speaker 04

  So we already know in the US and in many other jurisdictions that three quarters of the market are not ICOs or not what we call securities, even in the US, Canada, and Taiwan, the three jurisdictions that follow something similar to the Howey test that we've talked about. Three quarters of the market is non-securities. It's just a commodity, a cash.

• 33:24David Hoffman?

  Three quarters. Three quarters of the crypto market, according to Gary.

• 33:28Speaker 04

  Initial coin offerings and what's a security and what's not a security relevant, relevant and important debate. But for three quarters of the market, it's not particularly relevant as a legal matter, as a regulatory matter, British.

• 33:41David Hoffman?

  Wow. 2018 Gary sounded like he's making a lot of sense.

• 33:47Ryan Sean Adams?

  I would get a beer with that guy. That sounds great.

• 33:49David Hoffman?

  That guy sounds, I like that. I would take that class.

• 33:53Ryan Sean Adams?

  That's incredible. This is Brian Armstrong actually responding to this, to this tweet.

• 33:58David Hoffman?

  He's retweeting it.

• 33:59Ryan Sean Adams?

  The clip. And he just goes, wow.

• 34:02David Hoffman?

  Wow. Okay. So that could be interpreted like, how, how do you think he actually intended that to sound? Was that like a wow? Or was that like a wow? Or do you think that was like a whoa? How do you think he meant that?

• 34:20Ryan Sean Adams?

  You know, I think it's up to interpretation and all of the above are fantastic interpretations. So, you know, do that in your head, but like I, I gotta say the same thing. Wow.

• 34:29David Hoffman?

  Wow.

• 34:30Ryan Sean Adams?

  Completely different person in 2018 where he said 75% of the market, the, you know, the security versus commodity thing is not even up for debate, right? 70, at least 75% of the 2018 market. By the way, that market was less clear than today's market.

• 34:46David Hoffman?

  Yeah.

• 34:46Ryan Sean Adams?

  Yeah. The 2018 market was very different.

• 34:50David Hoffman?

  They were all ICOs.

• 34:51Ryan Sean Adams?

  A whole bunch of things. So what has changed?

• 34:55David Hoffman?

  I want, I can't wait to see Gary Gensler be presented with this in the court. Just like, hey, curious Gary, what made you change your mind?

• 35:03Ryan Sean Adams?

  On state, like on, on trial?

• 35:04David Hoffman?

  Yeah.

• 35:05Ryan Sean Adams?

  You're talking about like an actual prosecution?

• 35:08David Hoffman?

  When, when did you go from everything is a security? When did you go from three quarters of these things are not securities? And we need native tokens to boot up a network to 99% are securities. Where was the change? What changed? Cause something happened. Something acute happened. There was a, there's a clear before after moment and I would like to know what caused that.

• 35:29Ryan Sean Adams?

  I think it's like you get in a position of power and then your incentives totally change. So you're not incentivized towards kind of, kind of like truth and actual communication of the story. You have a different agenda, whether that's more power accrual is maybe part of the agenda here. Whether this is more like political influence is part of the agenda where there's actually some kind of like lobby group that is drastically influencing you. We may never know, but we can only judge him by the 2018 Gary versus the 2023 Gary. And these are two completely different people. That, that's the thing. When, do you remember at the time when Gary Gensler was actually replaced Jay Clayton?

• 36:04David Hoffman?

  Right.

• 36:05Ryan Sean Adams?

  As the SEC chair? And there was actually an air of maybe hope about this.

• 36:08David Hoffman?

  There was cautious optimism about Gary Gensler, including us.

• 36:10Ryan Sean Adams?

  We knew, we knew these 2018 clips and we're like, finally a regular that understands this industry. And now he's used that understanding and completely like abandoned it in pursuit of some different agenda. It's very unfortunate.

• 36:23David Hoffman?

  Yeah.

• 36:24Ryan Sean Adams?

  But let's, uh, let's talk about what we can do. So there is some action that, that we can take. What is this David? Can I mint an NFT and support a cause here? How does this work?

• 36:37David Hoffman?

  That's exactly what you can do, Ryan. So Coinbase is starting a stand with crypto campaign where you can mint a commemorative shield NFT. It's an NFT with a shield. It's literally an emoji and it's a very, very low priced mint, something like .007 ether, I think. So Ryan's going to go there right now. He's going to connect our friends and sponsors at MetaMask, the wallet there, so he can go and mint this thing.

• 37:01Ryan Sean Adams?

  Are you making me mint it right now?

• 37:03David Hoffman?

  I'm making you mint it right now, yeah. The mint is free, but there is, Azora charges a fee. That fee is like .077 ether or something, so like a couple of dollars, which goes to the Gitcoin advocacy round. So all of the fees from this SHIELD mint NFT, plus 100,000 dive donated, I believe by Coinbase, is going to the Gitcoin advocacy round. So Ryan is going to mint his NFT with MetaMask, our friends and sponsors at MetaMask. Thank you for doing that. And then a little bit of, oh, excuse me, .000777 ether.

• 37:37Ryan Sean Adams?

  It's real cheap. The gas will cost you a lot more than the actual price of the NFT. Let me tell you, about $10 in total right now.

• 37:44David Hoffman?

  Okay, so Ryan just minted one. So thank you for donating to the Gitcoin advocacy round. And that's going out. And thank you for supporting crypto, Ryan. I appreciate that.

• 37:53Ryan Sean Adams?

  I also burnt some ether in that transaction, David.

• 37:58Ryan Sean Adams?

  That's awesome. So we are fighting back. We are pushing back on this. David, we actually have Paul, the chief legal officer at Coinbase, coming on the show a little bit later, too. What's happening there?

• 38:07David Hoffman?

  Yeah, it will be out by the time the bank of the station is listening to this. So Thursday night, we are live streaming with Paul, who is coming up. You're going to come on and we're going to talk to him about suing the SEC. So that's going to be pretty sweet, looking forward to that one.

• 38:22Ryan Sean Adams?

  I can't wait to hear what he says.

• 38:23David Hoffman?

  I prefer to talking to the bad cop in this scenario.

• 38:27Ryan Sean Adams?

  Yeah. David, another fight for crypto, though, is the mainstream narrative. That's a fight I think we still need to put in some work on. John Oliver, on his show last week tonight, covered crypto. It's his second major crypto episode in about a 25-minute segment. And I think he really expresses what the mainstream thinks about crypto right now. Of course, he covered the events of 2022. So he talked about FTX, he talked about Terra, he talked about Celsius. His conclusion was pretty much that crypto is mostly a scam, almost 100% a scam. And I don't blame him necessarily for reaching that conclusion, given 2022.

• 39:08David Hoffman?

  Yep.

• 39:08Ryan Sean Adams?

  And yet it falls so short. So David, I think we should maybe play some clips.

• 39:12David Hoffman?

  Let's do it.

• 39:12Ryan Sean Adams?

  And give the Bankless listeners a flavor of what the conversation was.

• 39:16Speaker 05

  But FTX has been just one of the many dominoes that fell in the crypto world. Over the past two years, the market value of all cryptocurrencies fell from around 3 trillion in late 2021 to around 1 trillion last year. And there are small investors who got badly hurt by all of this. One in five Americans has invested in, traded, or used cryptocurrency. And you can find countless stories of people losing most of their life savings in the recent implosions, underscoring that everyone in crypto was never actually going to make it, no matter how much Randy Zuckerberg screams sang otherwise. So tonight, we thought we'd take a look at what has been happening in the world of crypto by looking at three of the biggest collapses over the past year.

• 39:57Speaker 05

  Each of these companies was founded on the promise that they would replace some part of our financial system. There is Terra, a cryptocurrency, Celsius, a crypto bank, and FTX, a crypto trading platform. In theory, they were supposed to be our next dollar, our next Bank of America, and our next stock exchange. But in reality, they are fiascos.

• 40:17Ryan Sean Adams?

  So far, David, he's not wrong on these takes.

• 40:20David Hoffman?

  Yeah.

• 40:20Ryan Sean Adams?

  These are the exact takes that we had in 2022. It's just.

• 40:25David Hoffman?

  Well, we didn't think of these about the, not these specifically, but we are replacing the dollar. We are replacing the stock exchange. It's not FTX, it's Uniswap. It's not Terra. It might be something like DAI.

• 40:39Ryan Sean Adams?

  It's not Celsius, it's DeFi, right?

• 40:41David Hoffman?

  Yeah.

• 40:41Ryan Sean Adams?

  That's the thing. And so.

• 40:43David Hoffman?

  These are our narratives. These are the words that I use.

• 40:46Ryan Sean Adams?

  He's not wrong, is what I'm saying. Let's play another clip.

• 40:49Speaker 05

  Just as a reminder, every single crypto coin is just something someone with a laptop made up. That is true for all of them, like Dogecoin, Catcoin, PandaCoin, Furrycoin, CumRockets, ElonSperm, and MonkeyJizz. Those are all real, by the way. We were going to come up with a fake one as a joke, but then we saw MonkeyJizz and it felt like a hat on a hat.

• 41:12Speaker 05

  To the extent any of these coins have value, it's based on whether people believe they do, which often comes down to their confidence in the person or group who made the coin. And that basic fact makes the crypto business very attractive to a certain type of person. One columnist who's covered this intensively summed it up like this. If you are running a scam, you will be drawn to crypto. You are running a confidence game, and crypto offers the most efficient market for turning confidence into money.

• 41:41Ryan Sean Adams?

  David, I mean, he's also right about that, right?

• 41:44David Hoffman?

  He's also right about that. Money is a confidence game. That's what we've been saying on Bankless this entire time. He's just applying it in this more narrow. It's like, yeah, the largest, most chest pounder dude or developer is the new winner in this world.

• 41:59Ryan Sean Adams?

  Well, the idea that scammers are attracted to crypto is also right.

• 42:04David Hoffman?

  We've also talked about this, yeah. He's right about everything so far.

• 42:07Ryan Sean Adams?

  OK, OK, so that was, that was a flavor.

• 42:10David Hoffman?

  This video got 3.3 million views.

• 42:12Ryan Sean Adams?

  Yeah, this is mainstream. This is what mainstream actually thinks, and they're not wrong about FTX and Celsius and Terra. I mean, they're exactly right. But let's finish with the conclusion here, which is where I think John Oliver goes off track.

• 42:23Speaker 05

  And the thing is, there are still companies out there making all the same claims that you've seen tonight. And I'm not saying that they are all scams. Maybe these three are the exceptions, although they would be joining all the other exceptions that we haven't had time to talk about tonight, from Bitconnect to Quadriga to so, so many more. But the truth is, in a financial system where the only real currency is confidence, scammers are going to thrive. And I know that we usually like to point to a solution at the end of our stories, and that often means calling for more regulation. But I'm not sure that's a good idea here. The danger is, regulation might give this sector more legitimacy. It'd make a risky investment look safe when it is clearly not. And that in turn might entice banks

• 43:07Speaker 05

  to start getting more involved in crypto, giving the sector even more legitimacy and also exposing all of us to its volatility. It really says a lot that one of the leading advocates for the government to strongly regulate crypto was Sam Bankman-Fried. And look, I'm absolutely not saying that we should get rid of crypto entirely. It could eventually be useful. Maybe the third time that we talk about it, we'll all be using a digital coin to buy everything. I doubt it, but I can't predict the future. After all, I'm no Jim Cramer. But we should recognize that right now, the main thing you can really do with crypto is gamble with more crypto. This is all still a casino. So if you do want to invest, do your own due diligence, never put in more than you can afford

• 43:51Speaker 05

  to lose, and if you ever see someone doing this, run.

• 43:56David Hoffman?

  This is Alex Mashinsky doing like the Archer post. So what do you think? That was a rough conclusion. That was a rough conclusion.

• 44:03Ryan Sean Adams?

  What? Not entirely wrong, but what parts are rough to you?

• 44:07David Hoffman?

  Oh, how we shouldn't regulate it to give it legitimacy? Because then if you give it legitimacy, it might integrate and, oh, well, the regular financial system will absorb the scams and the volatility of crypto. It's like, no, you regulate it so you get rid of the scams and volatility.

• 44:23Ryan Sean Adams?

  See, I mean, I think it's important.

• 44:25David Hoffman?

  I'm not saying we should do that either, but.

• 44:26Ryan Sean Adams?

  This is, this though, David, is the narrative that crypto is up against in 2023. And it's both kind of a headwind.

• 44:34David Hoffman?

  This is what 2021 cost us.

• 44:36Ryan Sean Adams?

  2022 cost us, yeah. It's both a headwind. And 2021, like you're talking about the bull market run up and 2022 is when the scammers. Yeah, that whole period, the last, the last bull market cost us this.

• 44:48David Hoffman?

  Exactly, yeah.

• 44:49Ryan Sean Adams?

  Here's, I think, the interesting part about this and why I think there's an opportunity. For me, the scam slamming he just did was, was actually cathartic. I mean, we did a lot of that ourselves and the ridicule for SBF and Do Quan and Mashinsky is totally deserved. But the conclusion that all crypto is a scam, that's where I think there's some hubris, right? And I think the, the problem with the mainstream narrative here is you can finish John Oliver's show, and I watched the whole thing, and you could feel like you completely understand crypto.

• 45:20David Hoffman?

  Right.

• 45:21Ryan Sean Adams?

  Like, that is the, I guess, the hidden, the hidden problem with a show like this is you're like, oh, that crypto thing, all, you know, all the, everything that was going on, the big price run up, it was just a bunch of scams. Ha, I thought so. And then you're going to dismiss it. And you're going to miss out on the alternative to Celsius, which is DeFi, and the alternative to FTX, which are.

• 45:46Ryan Sean Adams?

  Uniswap and Coinbase type regulated exchanges and Kraken. And you can miss the alternative to, you know, a stable coin, for instance, like Terra. And you'll miss something like DAI and everything, all the innovation that's going on. So the reason it's an opportunity, David, is because I think right now, just like in 2019, when crypto was dead and the cycles before that, we're getting the same sentiment. And I am happy to have the counter trade to that because I think this is what the mainstream narrative thinks right now. And so to me, this is a massive buying opportunity. If you believe the opposite, if you believe that crypto isn't a scam, if you believe there is real innovation here, if you believe that stable coins will be absolutely massive,

• 46:29Ryan Sean Adams?

  if you believe that DeFi will actually change the world and be the way we bank in the future. This is a massive counter trade opportunity.

• 46:37David Hoffman?

  No, that's, that's exactly right. Yeah, this is a great signal of how, when you are being a contrarian investor about something that you know, have high confidence in being right about. It gives me 2018 to 2020 vibes when we felt that about Ethereum.

• 46:55Ryan Sean Adams?

  Dare we call this a bottom signal?

• 46:57David Hoffman?

  Oh, certainly.

• 46:57Ryan Sean Adams?

  I mean, it's one of the bottom signals, right? And the same way Randy Zuckerberg video was a top signal, we're all gonna make it.

• 47:02David Hoffman?

  Sure. I mean, and like also this, John Oliver's audience is the exact kind of people, I'm gonna blank a statement here, is like all of the people who were bitter about the crypto people making a bunch of money in 2021, 2022, this show is for them. They want to watch the show and be like, oh, I'm so right. I believe in myself. Yeah, all the, all the crypto haters that got bitter that their crypto friend made a bunch of money, I'll call them smart fart smellers, are watching this show and being like, hmm, oh yeah, that's great.

• 47:42Ryan Sean Adams?

  That's totally what happened.

• 47:43David Hoffman?

  Right. And so that is his audience, right? And that's why the conclusion he has of like, don't even give it any legitimacy, don't even regulate it. The conclusion of that show doesn't matter. It doesn't have to be a good take for him to conclude, to get the views, to get the people to smell their farts.

• 48:00Ryan Sean Adams?

  That's exactly how he was gonna end the show. On exactly that note, because that's what the audience wanted.

• 48:06David Hoffman?

  Right. And you know that he would never produce a counter show in the peak of a market, talking about like how the crypto is doing the crypto thing. You know, you would never see that. You would only ever see the show on the bear market.

• 48:17Ryan Sean Adams?

  Yeah. So I don't act, I mean, crypto gave him all of the ammo to produce that show that he needed.

• 48:23David Hoffman?

  We just serve that to him on a platter.

• 48:25Ryan Sean Adams?

  I do not, do not blame him at all for that take. I'm just pointing out that it's an incredibly shallow take. That's what the overall mainstream narrative thinks about crypto right now. And so if you counter trade that, I think it could be a good move right now, if you believe the opposite. David, what do we have coming up next?

• 48:43David Hoffman?

  Coming up next, we got some updates on the Binance Voyager deal. Sad for Voyager. We're also going to talk about SBS mom, of all people. SBS mom. I won't sing the song. Lens launching in layer three. And Solana has got a thing that's making me feel things. And we're going to talk about that. But first, we're going to talk to all of these sponsors that make this show possible, especially MetaMask, who, if we're using all these weird crypto words, crypto jargon, MetaMask has a product for you called MetaMask Learn. Let's go hear about it. Learning about crypto is hard, until now. Introducing MetaMask Learn, an open educational platform about crypto, Web3, self custody, wallet management, and all the other topics needed to onboard people into this crazy world of crypto. MetaMask Learn is an interactive platform

• 49:28David Hoffman?

  with each lesson offering a simulation for the task at hand, giving you actual, practical experience for navigating Web3. The purpose of MetaMask Learn is to teach people the basics of self custody and wallet security in a safe environment. And while MetaMask Learn always takes the time to define Web3 specific vocabulary, it is still a jargon-free experience for the crypto curious user. Friendly, not scary. MetaMask Learn is available. In 10 languages with more to be added soon. And it's meant to cater to a global web three audience. So are you tired of having to explain crypto concepts to your friends? Go to learn dot metamask.io and add metamask learn to your guides to get on boarded into the world of web three.

• 50:07David Hoffman?

  Arbitrum one is pioneering the world of secure Ethereum scalability and is continuing to accelerate the web three landscape. Hundreds of projects have already deployed on Arbitrum one, producing flourishing DeFi and NFT ecosystems. With a recent addition of Arbitrum Nova, gaming and social dApps like Reddit are also now calling Arbitrum home. Both Arbitrum one and Nova leverage the security and decentralization of Ethereum and provide a builder experience that's intuitive, familiar and fully EVM compatible. On Arbitrum, both builders and users will experience faster transaction speeds with significantly lower gas fees. With Arbitrum's recent migration to Arbitrum Nitro, it's also now 10 times faster than before. Visit arbitrum.io where you can join the community, dive into the developer docs,

• 50:51David Hoffman?

  bridge your assets and start building your first app. With Arbitrum, experience web three development the way it was meant to be. Secure, fast, cheap and friction free. Voyager tweets out, "Today, we received a letter from Binance terminating the asset purchase agreement. While its development is disappointing, our Chapter 11 plan allows us for direct distribution of cash and crypto to customers via the Voyager platform." So Binance US is backing out of the crypto deal. They cite regulatory challenges for that termination of that deal. And so Binance says, "While our hope throughout this process was to help Voyager's customers access their crypto in kind, the hostile and uncertain regulatory climate in the United States has introduced an unpredictable operating environment impacting the entire American business community." Oof, thanks, Gary.

• 51:37David Hoffman?

  So pour one out.

• 51:38Ryan Sean Adams?

  They're blaming regulators for not doing this. So, so Voyager, of course, was like another Celsius in that a bunch of depositors were left holding the bag. Retail depositors, unfortunate situation.

• 51:48David Hoffman?

  Voyager lends 300's capital, $600 million unsecured. So that was pretty dumb of them of retail money.

• 51:52Ryan Sean Adams?

  They did a ton of dumb things, but this was also an opportunity for all of the creditors to actually do a little bit better than kind of a pure asset sale bankruptcy. And Binance is blaming that on regulators for not going through. But imagine if you're a Voyager creditor, right? This is basically what happened to you.

• 52:07David Hoffman?

  Right.

• 52:08Ryan Sean Adams?

  First, you thought FTX was going to save you. And then FTX imploded. Then you thought Binance was going to save you. And then the US blocked the sale. Now the court allows the sale to go through. Then Binance pulls out. That's the full story. If you're a Voyager creditor and you had funds tied up in Voyager. Very sad, just getting dunked in the tank again and again and again. Feels bad to have put money in any kind of quote unquote crypto bank these days.

• 52:34David Hoffman?

  Yeah. And it's because of Gary. It's because of Gary. 100%, right? Right?

• 52:39Ryan Sean Adams?

  Gary and everything that represents. He's become the main character for Operation Checkpoint. So yes, I agree. It's Operation Checkpoint. It's Gary Gensler and friends. Speaking of friends, does SBF have any friends left, David? I guess his parents are still friendly because he's living back at home with mom and dad. And now there's some scrutiny on SBF's parents. What's going on?

• 53:00David Hoffman?

  Yeah, so a judge has approved restrictions for SBF's parents. So SBF's mom and dad are now getting strict cellphone monitoring while he is under house arrest because they are fearful that SBF will just say, hey, mom, can I use your phone? So a consultant will-

• 53:18Ryan Sean Adams?

  Just one tweet, mom.

• 53:21David Hoffman?

  Just one post. A consultant will review keystroke logs and screenshots of Joseph Bankman and Barbara Frankman's free bank, Barbara Freed's cellphones at least three times per week. Monitoring software are on the Bankman Freed's parents' phones. And they photograph the user every five minutes to make sure it's not Sam. So the phone takes a picture every five minutes. And if Sam Bankman Freed's face is there, they get in trouble. Dude, that's hilarious.

• 53:50Ryan Sean Adams?

  Can you, like, how mad would you be at your son if this was like the situation here? The weird thing about this, though, is we don't know if they're innocent part, that they're innocent parties at all. Like, there seems to be a lot of evidence that they may have actually been tied up in this whole criminal enterprise. Like, I think like Nick Carter and friends call it the crime family or something of SBF. Yeah, crime syndicate. And so you don't know how deeply they're involved. But it's hilarious to think SBF back at home, can't use mom and dad's cellphone even. Is he completely walked out of that?

• 54:23David Hoffman?

  That's so funny. I have so many jokes I can make and we just need to move on or else I'll make them.

• 54:28Ryan Sean Adams?

  Lens Protocol, what are they doing?

• 54:31David Hoffman?

  Optimistic Layer 3 solution. So Lens deploying a Layer 3 to process transactions at hyperscale, they say, and designed to support the next generation of Web3 social users. This is called a roll app, an app chain as a roll up.

• 54:45Ryan Sean Adams?

  Well, I like that. Roll app.

• 54:47David Hoffman?

  Yeah. Yeah. You've heard that before, right?

• 54:49Ryan Sean Adams?

  No, that's the first time I've heard that, that term.

• 54:51David Hoffman?

  Well, I sadly can't take credit for that one, but to you I will. So yeah, Lens Layer 3 Roll App. I'm assuming this is deployed on Polygon because that's where Lens is. So Bonsai is what they're calling it because of the whole plant metaphor.

• 55:06Ryan Sean Adams?

  That's very cool.

• 55:08David Hoffman?

  DevConnect Istanbul, Ryan. This is not necessarily for the Bankless Nation, although they're welcome to listen to this announcement about DevConnect Istanbul 2023. This is actually for me to you to tell you that I'm going to be in Istanbul in the 13th to the 19th of November for DevConnect. Also, if any Bankless listeners wants to come, I'll be there too.

• 55:28Ryan Sean Adams?

  DevConnect is different than DevCon, right, David?

• 55:30David Hoffman?

  Yes. Yeah. So think of it like a binary star system and one's bigger than the other. And this is the little star, but they rotate. And so it goes DevCon, DevConnect, DevCon, DevConnect. Every like nine months or so.

• 55:40Ryan Sean Adams?

  Oh, man. You're traveling all over the world, David. Are you ever at home anymore?

• 55:44David Hoffman?

  God, it has been a while, dude.

• 55:46Ryan Sean Adams?

  It has been a while. But tell us about this. So you are excited about a Solana project.

• 55:52David Hoffman?

  A Solana project, yeah.

• 55:54Ryan Sean Adams?

  It's an NFT project. So I, you know, maybe people would have suspected that's the way they get you. They hook you into the Solana community. Mad Labs. Mad Labs. What is it?

• 56:06David Hoffman?

  I mean, I don't know. It's an NFT project. They look really cool. Their volume was the number one most traded volume, at least in the last seven days. So they are just eking above board apes and mutant apes. And so this is why this is news, because they are dominating the seven day volume, at least on NFT sales. The Mint went live. They had some like Mint drama, but they're past that. I think they look pretty cool. I like the art. I like the art. I do not own one because I don't, I don't know how to use Solana.

• 56:41Ryan Sean Adams?

  Wait, what'd you say? Wait, what'd you say?

• 56:43David Hoffman?

  I've never used it. I own some Sol tokens that I bought at like $9 or something. But yeah, they're sitting on Coinbase.

• 56:51Ryan Sean Adams?

  Just grab a phantom wallet, just connect. I've done stuff on Solana. I have a podcast NFT on Solana.

• 56:58David Hoffman?

  Yeah, I know you do. Yeah, yeah, yeah. Yeah, okay, I'll probably go, I'll go buy one of these on Solana and I'll be the first one to use it.

• 57:03Ryan Sean Adams?

  You heard it. Solana community, you heard it here. Tweet it out when you do.

• 57:07David Hoffman?

  I mean, look at these. They're, they're pretty cool looking. So like 20s, 20s mobster themed, like, um, uh, like, it's like a comic book noir theme, I think. I, I'd say like a noir movie type. Yeah, I think, I think they're pretty cool. I think they're pretty cool.

• 57:22Ryan Sean Adams?

  Yeah, I get this. I vibe with this.

• 57:24David Hoffman?

  Yeah, you like it.

• 57:25Ryan Sean Adams?

  If you nominate in Sol, if you buy it though.

• 57:27David Hoffman?

  Yeah, I don't know about that one. Okay, anyways, uh, moving on. You want to take this one?

• 57:34Ryan Sean Adams?

  Well, David, we can't just talk about US regulatory system. We got to talk about what's going on in Europe. MICA, we did an entire episode on this legislation. Looks like it is going through. After more than two and a half years of consultation, heated debates, last minute amendments, and very close votes in the committee, the EU's parliament today passed the new EU crypto framework with an impressive majority. 517 MEPs for and 38 votes against. This is the most comprehensive regulatory framework for crypto that's ever been passed by any major government body. We did an entire episode on this and the conclusion from our crypto EU MICA experts

• 58:18Ryan Sean Adams?

  was this was about a B minus in terms of its, its quality and its goodness for crypto. So it could have been a lot worse. We could have had a failing grade, an F or, or a D or something like that. Average would have been C. They rated it as B minus. And I think I mostly agree with that. It leaves much to be desired, but it provides some clarity. Like, for instance, Europe, David, doesn't have the problem of is Ether a security or a commodity or not? There's no Gary Gensler of Europe blocking all of these things. It's quite clearly detailed as to what the nature of Ether, the asset is. It's a commodity in EU legislation. A few comments from, from the panel that we talked to.

• 59:02Ryan Sean Adams?

  The US is getting its pants beat. By global regulation is a comment that

• 59:07David Hoffman?

  We're getting our pants beat by a B minus. Nice.

• 59:10Ryan Sean Adams?

  Yeah, it's a B minus ahead, but there's still room for the EU to fail here. There's some other regulation that that might be upcoming. AMLR, the Data Act is is one of them. There's some more. So before anyone in the US says, we're moving to Europe and throws that party. I think we've got to get through this heavier regulation and see where we come out on the other side. So there's still room to fail the semester. This was just one test, but B minus on the first test. It's better than the United States. That's for sure.

• 59:39David Hoffman?

  Okay. All right. I don't know if I should be optimistic or pessimistic. B minus. My first reaction is like, B minus. Cool. We can start from there and get better. But then I guess you could start from there, get worse. Anyways.

• 59:51Ryan Sean Adams?

  You can.

• 59:52David Hoffman?

  Whatever. So some of the most boomer news that we'll ever put into a weekly roll up. TransUnion, the credit scoring company is allow, working with some partners to deliver credit scoring to blockchain.

• 1:00:04Ryan Sean Adams?

  Hey, that's cool though.

• 1:00:06David Hoffman?

  So TLDR, they are allowing, they're basically being an oracle for credit scores on a blockchain. So you have your credit score.

• 1:00:14Ryan Sean Adams?

  Like your FICO score.

• 1:00:14David Hoffman?

  Your FICO score. Yeah, you can put that on a blockchain so that something like AVE could like review that credit score and be like, okay, I'll give this person a line of credit. It's not going to work exactly like that, but that's kind of the deal.

• 1:00:25Ryan Sean Adams?

  I think that's awesome, actually.

• 1:00:26David Hoffman?

  It's not a terrible use case. There's like, you can get, it's private as well. So you can get some privacy. It's one of the earliest, most primitive building blocks for building like uncollateralized lending. It's a thing. Cool.

• 1:00:39Ryan Sean Adams?

  We do need credit in DeFi. We have none. It's all collateral backed loans at this point.

• 1:00:43David Hoffman?

  You need credit.

• 1:00:44Ryan Sean Adams?

  Speaking of releases, Fee has released something here. PHI, that's Fee. What are they doing?

• 1:00:50David Hoffman?

  FeeLand. So this is like a super cute project that I just think is awesome. FeeLand, we talked about it before. It's like this 3D landscape for building a little metaverse for yourself that you put objects on based off of what you've done in your Ethereum wallet. So if you've traded on Uniswap, you get a little Uniswap building. If you bought on OpenSea, you get a little OpenSea ship. Bankless has got some stuff. So if you're a FeeLand user, you got some Bankless things that you can claim. So if you are a bank holder, you get a little wagon. If you are a podcast NFT holder, you get a little cute little version of me and Ryan, a little icon to claim. If you are a Poap holder, you get a wallpaper. So if you are a user of FeeLand, if you're not a user of FeeLand, you should definitely check it out.

• 1:01:32David Hoffman?

  It's like the most fun identity web three, non-financial app. So checks all those boxes and it's just pretty fun. It's also a great way to like, you go on quests to claim these things, right? And so some of these are what we're looking at, these four quests that we've got. And so if you are a FeeLand user and you are a Bankless Nation member, you have some objects that you can go play, claim and go put in your little FeeLand. So go do that and then take a screenshot and tweet it and tag Bankless so we can see and we'll retweet it.

• 1:02:02Ryan Sean Adams?

  This is like your on-chain resume or maybe like your on-chain trophy case or something like this? It's just a lot of fun to build your profile.

• 1:02:08David Hoffman?

  The artist behind this, by the way, is the same artist for the noun style. This is why it's pixelated and it looks like that.

• 1:02:13Ryan Sean Adams?

  Very cool. Another release this week, Swell Network. What are they up to?

• 1:02:17David Hoffman?

  Swell Network, we've talked about them before. Live Mainnet is now in public beta. So this is a staking as a service like Rocketpool, like Lido, like all the other ones. Brand new DAO with plans to integrate distributed validator technology, which is more technology that I get super hot on. And so they are launching, their mainnet is launched. So they would like you to join their community is their deal. And also stake, also stake.

• 1:02:43Ryan Sean Adams?

  Should also mention both Fee and Swell. David and I are angel investors in these projects, really excited about them. Jobs of the week, David, speaking of excitement here, we got some jobs at Coinbase, a staff blockchain engineer, a staff smart contract engineer. I think working with Jesse Powell and team.

• 1:03:02David Hoffman?

  Jesse's a nice guy. We like Jesse.

• 1:03:03Ryan Sean Adams?

  That's what I've heard. Phantom, software engineer in mobile. Phantom's hiring a software engineer, front end. They just released their wallet, by the way. The Polygon and Ethereum, awesome project. Lots of jobs here today. Premio wants a web three product management and architect.

• 1:03:18Ryan Sean Adams?

  Didera wants a smart contract engineer. Uniswap Labs needs a senior backend engineer. Senior product designers for Uniswap as well. There's a ton of jobs.

• 1:03:27David Hoffman?

  Dude, scroll down. There's so many jobs. There are so many. Look how many jobs there are. It keeps on growing. It's one of those things that you keep on scrolling and it keeps on loading. There's so many jobs.

• 1:03:36Ryan Sean Adams?

  Crypto, this is a bear market in crypto and it's still hiring like crazy, which is impressive.

• 1:03:40David Hoffman?

  Coming up next, we got the questions from the nation. We're going to talk about AI and blockchain and what that intersection looks like. So that's the question from the nation. It's also similar, a take from the week. Chamath Poliapetia from the All In Podcast gives a take that crypto is dead. Do we disagree with that take or do we not disagree with that take? We'll talk about that. And then we're going to talk about what we are Bullatron. So all of that and more. But first, I want to talk about some of these fantastic sponsors that make this show possible. The Phantom Wallet is coming to Ethereum. The number one wallet on Solana is bringing its millions of users and beloved UX to Ethereum and Polygon. If you haven't used Phantom before, you've been missing out. Phantom was one of the first wallets to pioneer Solana staking inside the wallet and will be offering similar staking features for Ethereum and Polygon. But that's just staking.

• 1:04:25David Hoffman?

  Phantom is also the best home for your NFTs. Phantom has a complete set of features to optimize your NFT experience. Pin your favorites, hide your uglies, burn the spam, and also manage your NFT sale listings from inside the wallet. Phantom is of course a multi-chain wallet, but it makes chain management easy, displaying your transactions in a human readable format with automatic warnings for malicious transactions or phishing websites. Phantom has already saved over 20,000 users from getting scammed or hacked. So get on the Phantom waitlist and be one of the first to access the multi-chain beta. There's a link in the show notes or you can go to phantom.app/ waitlist to get access in late February. Bankless is launching the Bankless Token Hub. At Bankless, we've been studying the crypto markets ever since 2017 and all of our research

• 1:05:09David Hoffman?

  has led us to this, the Token Hub. You're a one-stop shop for alpha to help you navigate through the crypto markets. Have you ever wished for a trusted resource that would share their thoughts, ratings, and their opinions about tokens? Boy, do we have the product for you. The Bankless Token Hub is where we provide Bankless citizens with the alpha on the hottest tokens in crypto. We do- The research, so you don't have to. The Bankless Token Hub includes the token ratings, where our team shares their research and outlook on the hottest tokens in crypto. Also, the Token Hub includes Bankless Bags, our own internal investment club. Bankless Bags is where we put our money where our mouth is. And for the Bankless power user out there, you can access the analyst team 24/7 inside the Bankless Nation Discord. You can ask them questions and learn from a group of people deep in the weeds of crypto investing.

• 1:05:54David Hoffman?

  The last feature of the Token Hub is the ability to upvote or downvote token ratings. The Bankless Token Hub lets you learn from your fellow citizens to rate these tokens yourselves. The Bankless Token Hub is launching right now and it's already been beta-tested by your fellow Bankless citizens. So stay tuned in the Bankless Discord for updates. And if you're not a Bankless citizen, well, you better sign up if you want access, because this corner of Bankless is available for citizens only. I'll see you in the Discord.

• 1:06:19Ryan Sean Adams?

  We have a question from RocketPulster this week. David, you ready for this?

• 1:06:23David Hoffman?

  Yeah, hit me.

• 1:06:24Ryan Sean Adams?

  RocketPulster goes, "Given a future of AI, deep fakes, disinformation, and blockchains, what companies and projects are at the forefront of ensuring provenance? And how?" Is in brackets, "Hardware?" So, we acknowledge all of these problems with AI becoming... Like, we don't know who the robots are online. You know, whether the robots created this piece of content or a human did. And robots are like infinitely scalable, okay? Very, very cheap to spin up. We've always had sort of a... When it was just the humans on the internet, there was a cost to kind of producing information. And now there's this ability to mass-spread

• 1:07:08Ryan Sean Adams?

  all sorts of information, like information that's not credible, all sorts of things. So is there a blockchain solution to this? Or is there any solution to this that you've seen?

• 1:07:19David Hoffman?

  Yeah, so, really prescient question, I'd say. I think there is... And dare I say, RocketPulster is looking for alpha.

• 1:07:29David Hoffman?

  About like, okay, what are the companies here? Because they're probably, I'm assuming that they are bullish on the intersection of AI and crypto, and specifically provenance, right? This was one of the really early use cases of crypto that we've seen before. Once upon a time, there was fake news shared about Vitalik's death and about Vitalik's assassination, and the ether price started to plummet. And so Vitalik took a selfie with a piece of paper of the current block height of Ethereum, and just to prove that it was recent enough, and then tweeted that out.

• 1:08:01Ryan Sean Adams?

  Like, proof of life, right?

• 1:08:02David Hoffman?

  Proof of life, right? And then, and then the price recovered, and we moved on. So like, you could use the same sort of format with, with like AI, right? And this is just called timestamping. You just like submit a hash and a block about the origination of some content before you release it to the public, so that when everyone's like, what's the real source of this? You can prove that you have the most original piece of content.

• 1:08:25Ryan Sean Adams?

  So you could sign that with a private key as well, right?

• 1:08:27David Hoffman?

  Sign that with a private key, right? Yeah. And like, that's actually not really a revolution in cryptography, that is, or cryptocurrency, that is a revolution in database design as a blockchain. That's a database solution.

• 1:08:39Ryan Sean Adams?

  And cryptography. It's totally a cryptography solution.

• 1:08:41David Hoffman?

  Yes. That is actually a solution that's absent of the currency, other than we need a system to secure the database, and that's what we use, need the currency for. Anyways, I digress. I kind of see two venues here. There is the venue of just like, identity. So like, WorldCoin is implicitly going after this. Any sort of identity on a blockchain, the identity play is a part of this. Like provenance in the world of AI, we need human AI. You can trust me because you're listening to me on Bankless, and I'm a human, and you've been listening to me for a while, and I'm going to tell you that I own David Hoffman dot ETH, so you can go to David Hoffman dot ETH, and you can assume that that's a human player.

• 1:09:19Ryan Sean Adams?

  And another human like me is going to socially verify that you own David Hoffman dot ETH, right? And that's kind of enough to prove that you're a human.

• 1:09:26David Hoffman?

  Yeah, but you're an AI, so.

• 1:09:29David Hoffman?

  That does get precarious. So there's need, there could be more perfect ways of doing that. But there's like the, the, what I'm saying is like, there are companies that will go directly after this problem. And then there are other ways that are adjacent to this that provide solutions to this problem adjacently. And that's the identity world. And then there perhaps there are companies that are going directly after that, after this, which is just like a timestamping company. I remember in 2017, there was like an ICO that was like a timestamping company on Bitcoin. And for some reason, the Bitcoiners thought it was bullish. But I don't know of any, I can't name any specific ones, but it is a very, that's a, that is a worthwhile place of research to explore, I would say.

• 1:10:11Ryan Sean Adams?

  I think it's huge. I think it's so important. Yeah, this tidal wave of manipulative content is about to hit the internet. So we got to find out who the humans are and who the robots are. It's, it's also a national security threat. Like this is kind of nation state, like when nation states can attack other nation states with robo propaganda, right? Like, how do you actually, like, this is just a massive tidal wave that's going to hit everybody. And what I've seen, David, is like, we have the building blocks in crypto. It's going to be something crypto or crypto adjacent. Like, we have the, the ability to store uncensorable, provable data on, on computers that are always running, cannot be taken down, cannot be censored. We got that. We got the private key cryptography

• 1:10:53Ryan Sean Adams?

  and kind of the management. We have some of the early stages of identity type systems. WorldCoin kind of takes it to the, we can actually prove a human using like iris scan type data. And by the way, I think we want to get WorldCoin on the podcast at some point to discuss this.

• 1:11:08David Hoffman?

  Oh, it's scheduled. We have that scheduled. Sam Altman and the co-founder are coming on.

• 1:11:12Ryan Sean Adams?

  I haven't seen anybody who's put this together in a way that's like scalable and going to work. There's like a lot of slides and a lot of companies promising and decentralized identity has been a theme. Verifiable credentials have been a thing that people have talked about. But who is actually putting it all together? A lot of talk, right? But like, who's actually putting it together and making it scalable and making it ready for the world? So the solution is completely clear. I know it's going to, I like, I feel very strongly it's going to be crypto or crypto adjacent. What can I invest in? Like, where's the alpha? I mean, that's what I want. I'm kind of back with Rocket Pollster. And the truth is, I haven't quite seen the project that really excites me on this yet. But it's gotta come, right? We gotta solve this. Someone's gonna solve it.

• 1:11:55David Hoffman?

  Yeah. I think the big question is just like, does this get solved emergently by a collection of adjacent technologies, like I was saying? Or is there one particular startup that's going to tackle this problem head on? Like, that's an interesting question.

• 1:12:09Ryan Sean Adams?

  Yeah, I agree. All right. Well, we'll keep our eyes peeled. We'll let you guys know, Rocket Pollster. Let's get to some takes this week. David, the first take is one we teased earlier from Chamath from the All In Podcast. He says, David, crypto is dead in America. I saw this tweet from CNBC. He said in the US, it's dead, but I think we should go straight to the source and actually hear what he said in context. So let's play that.

• 1:12:32Speaker 06

  I was just curious to get your thoughts. SEC obviously sent to Wells notice, we talked about this before, to Brian Armstrong of Coinbase. He said he's thinking about or considering relocating out of the US if the regulatory clarity does not improve.

• 1:12:48Speaker 07

  Crypto is dead in America.

• 1:12:49Speaker 06

  It is dead in America.

• 1:12:51Speaker 07

  Crypto is dead in America. I mean, now you had Gensler, you had Gensler even blaming the banking crisis on crypto. So they've, the United States authorities have firmly pointed their guns at crypto.

• 1:13:05Speaker 06

  Is it a scapegoat or was it a fuck around, find out moment for crypto? In your mind, or a little bit of both?

• 1:13:12Speaker 07

  I don't know. I just think that they were probably the ones that were the most threatening to the establishment.

• 1:13:19Speaker 06

  Okay.

• 1:13:20Speaker 07

  And they were the ones that, in fairness to the regulators, did push the boundaries more than any other sector of the startup economy. And yeah, so now they're paying the price for them. The bill has come due for them.

• 1:13:32Ryan Sean Adams?

  What do you think about that take?

• 1:13:33David Hoffman?

  I love how they talk about this. They talk about us as like, all of them, them, the crypto industry. And like, we do the same, we do the same things, of course. Everyone does this, but it's like interesting.

• 1:13:43Ryan Sean Adams?

  Blanket in the industry with?

• 1:13:44David Hoffman?

  Yeah.

• 1:13:45Ryan Sean Adams?

  Yeah.

• 1:13:45David Hoffman?

  The crypto people, their check has come due, right? I was like, that is not my check, Chamath. I didn't cash that one.

• 1:13:53Ryan Sean Adams?

  Well, what do you think of his overall take then? So, yeah.

• 1:13:55David Hoffman?

  Yeah, that was our take for last week on the weekly roll ups. Like, yeah.

• 1:14:00Ryan Sean Adams?

  Crypto is dead in America?

• 1:14:01David Hoffman?

  I mean, that's a hyperbolic statement. Chamath is a little bit of a diva. All of these guys are a little bit of divas. So are we. Content producers are kind of divas. He's being a little bit of a diva. He's not wrong. Everything he says right.

• 1:14:13Ryan Sean Adams?

  By saying his statement so emphatically and hyperbolically, that's what you're saying. And you agree with the, the, the tone and the thrust of, of that statement. But I bet you'd have some like quibbles with, it's not actually dead in America. Yeah. I mean, we haven't like outlawed crypto. We just, we're in front of Congress last week and Gary Gensler was thoroughly grilled for his anti-innovation, anti-crypto posturing. I think it's, um, for me, it's a step too far to say crypto is dead in America.

• 1:14:42David Hoffman?

  Hundred percent. It's hundred percent. And I think if you, if we were having a conversation with him and we were nitpicking, he would become much more moderate about it. Which is like as the high level headline, crypto is dead in America. Yeah. And it's like, it's a little bit of like a quote unquote bottom signal, right? Like he is, he is presenting a specific snapshot in time. And what he's saying, a way to interpret this is like, this is the worst moment in crypto's American relationship ever.

• 1:15:10Ryan Sean Adams?

  Yeah, that's accurate.

• 1:15:11David Hoffman?

  And Coinbase is going to sue the F out of Gary Gensler in the SEC and we're going to come back. And so it's up only from here in terms of the health of our relationship with America.

• 1:15:21Ryan Sean Adams?

  I think so. If he's also making the broader point, like one purpose of the soundbite, that headline on CNBC is like, you could phrase this another way. The regulators or the government is killing crypto in America. Right? That's also hyperbolic, but that also kind of like prompts for some action. Like, what are you guys doing? You're screwing this up. You're leaving America behind. And I hope that's kind of the, the takeaway here too. Get some more takes here. David, here is from Ethereum on ARM. This is, uh, what are we looking at? Looking at some hardware here?

• 1:15:52David Hoffman?

  Yeah, so I put this one in here. This is an Ethereum staking node. You can tell like how close up we are to this tiny little box because of the blur effect on the, on the camera. This has got to be what? Three inches by three inches by one inch of a, of a computer, full, full computer. That's an Ethereum staking node. This is. Dissident, I had to phrase it this way because, but it's so awesome. This is the smallest, most powerful dissident technology form factor that exists. This is a nation state, this is a network state.

• 1:16:24Ryan Sean Adams?

  Freedom technology.

• 1:16:25David Hoffman?

  Freedom technology, there's like, you can't, this is Ethereum. You cannot shut this down. One, one of these things in every person's home, in like one in 100 people's home. It doesn't matter. It's like so powerful. There's capital on this thing. It's verifying a network. It is an online network state. It is, it is cryptography. It is cryptocurrency. It is just the instantiation of everything that is so cool about the frontier of technology, the industry that we are building. And it's, it's, it's like, I hate to be an anti-statist. I am an anti-statist, but it's like big F you to nation states because like,

• 1:16:59Ryan Sean Adams?

  I don't see, I don't think.

• 1:17:00David Hoffman?

  Look what we can do on top of our, in our little computer box.

• 1:17:04Ryan Sean Adams?

  I actually don't think you're as anti-statist as, as you just maybe expressed if somebody took that, you know, that, that sound clip out is I think this, another way to put this, and guys, we're coming out with an episode on liberalism, the protocol of liberalism on Monday, is not necessarily anti-statist. It is anti-authoritarian, I think. And this is, this is liberalism protocol preserving. So property rights, censorship resistance, freedom of speech, you know, those things in the amendments in the constitution that we set up our democratic republic protocols with. It's that kind of technology.

• 1:17:41David Hoffman?

  This is a new institutional form factor. It's so awesome.

• 1:17:44Ryan Sean Adams?

  I know. It's awesome. I like that you pulled that out. I didn't know what you were going to say on, on that image, but that's, you know, way cooler.

• 1:17:50David Hoffman?

  This is the part two of this tech, of this take, actually. So it continues. You'll, you'll be happy to hear. So here's a take from tycoon.eth. When your ETH validator gets chosen to build a block, you gotta step back and appreciate one of the greatest miracles of open source coordination and collaboration. For 12 seconds, your tiny machine in your bedroom is responsible for carrying on a network worth billions of billions of dollars.

• 1:18:12Ryan Sean Adams?

  That's so cool.

• 1:18:13David Hoffman?

  It's so awesome. It's so awesome.

• 1:18:15Ryan Sean Adams?

  It is. Wow. That's why, that's why I'm in this community, David. That's why I'm in this industry. This is, I really believe in this technology as a force for good. Yeah.

• 1:18:24David Hoffman?

  Ah, yeah.

• 1:18:25Ryan Sean Adams?

  All right, cool. You got a take too. Let me read David Hoffman's take. Bankless is an AI alignment podcast until further notice. Track record so far. Eliezer Yudkowsky, 99% chance of doom. Paul Cristiano, 50% chance of doom. I just recorded with somebody's Twitter name.

• 1:18:42David Hoffman?

  Is his name.

• 1:18:43Ryan Sean Adams?

  Muri. He says there's a 95% chance of doom. Oh, that's bad news, David.

• 1:18:47David Hoffman?

  Yeah, that's not.

• 1:18:47Ryan Sean Adams?

  95% chance?

• 1:18:49David Hoffman?

  Yeah, the executive director of the Machine Intelligence Research Institute, he's at 95%.

• 1:18:54Ryan Sean Adams?

  He works with Eliezer Yudkowsky, so I expected he'd be in like the 80s to 90s, but 95% isn't awesome.

• 1:19:02Ryan Sean Adams?

  And then you finish it with this. Want ETH to hit 10K? We got to solve AI alignment. I don't know. I think we can hit 10K before that, but you know, what's the good of your 10K ETH? If the robots come and destroy it anyway?

• 1:19:14David Hoffman?

  Right, yeah.

• 1:19:15Ryan Sean Adams?

  I think that's the take here. So what did you want to say about this?

• 1:19:20David Hoffman?

  Yeah, that's it.

• 1:19:22David Hoffman?

  Yeah, our hands are, what's the word? Our hands are forced. Like, what's the point of doing anything else if we can't solve AI?

• 1:19:30Ryan Sean Adams?

  Why are we giving this one more special attention? There's all sorts of existential threats, right? There's nuclear proliferation, there's biotech. Why do you think that?

• 1:19:39David Hoffman?

  It's, it's one order, it's one level, one dimension higher than all other existential. It's the meta existential threat because it can cause all the other existential threats to happen or not happen.

• 1:19:50Ryan Sean Adams?

  I kind of agree with this and the other thing is if we get it right on the good side, it starts to solve all of the other existential threats, potentially.

• 1:19:59David Hoffman?

  Not just potentially. So that was actually, so I'm here in Montenegro doing this whole like network stake thing with a bunch of different experts from different corners of the, of the world. And so Nate, I was talking to Nate, the longest interview, I usually do 20 to 40 minute interviews while I'm out here. I did over an hour with him. The last question and the last point that we, point of things that we talked about is like all of the doom that these people feel. Cause I, I started to get into the personal, I was like, okay dude, like, how do you wake up in the morning? How do you keep going when you, when you are at 95%?

• 1:20:30Ryan Sean Adams?

  I'm glad you did that. I'm glad you got into that, by the way.

• 1:20:32David Hoffman?

  So that was, that was the end of it and he, and he just talked about like, I, I had my, same thing with Eliezer dude. I had my cry and then picked it up and I kept on going because what else am I going to do? I'm going to solve this problem. And then I did the whole like bankless internal optimist thing. Because, you know, we're optimists. And I'm like, okay, well, understanding that there's a 99% chance of doom, that we can't solve AI problems. It's Terminator, it's the worst, it's hell, it's all bad. We all get our atoms repurposed, all the bad stuff that is the apparently likely, most likely outcome for the AI alignment problem. Under the conditions that we do solve AI alignment, and I'm not saying that we know how to do that, but under the assumption that we do

• 1:21:13David Hoffman?

  get there, we do through thread that very small needle, it's not just like, oh, phew, we solved AI alignment, we're not dying. It's actually all of the evils that we are trying to avoid invert, and they go from evils to positive because we fix AI alignment. And so it not just goes like, oh, no, phew, we're still, we still get to operate society. Society starts to become literally perfect. It becomes a utopia. It becomes heaven, because we solved AI alignment, and because we are working with them, and they are producing the heaven that we want. And so like, maybe the 99% is bad, but the 1% chance that we solve AI alignment is so good.

• 1:21:53Ryan Sean Adams?

  You're telling me there's a chance?

• 1:21:54David Hoffman?

  There's, no, I'm not telling you that there's a chance. I'm telling you that if, once we, if we do get through that chance, the other side of that chance is so cool and awesome, because AIs are doing cool stuff for us, alongside us, shoulder to shoulder with us, that that is, should be motivating. And it cancels out how bad the 99% is.

• 1:22:15Ryan Sean Adams?

  I don't know if it cancels it out for me, but I think it's, it's definitely the stakes are, like, we don't often talk about the other side of this, if we do get it right. I mean, all of our episodes have been doomer, but like, I think it can solve a whole bunch of the existential problems that are outside of the category of AI.

• 1:22:31David Hoffman?

  Not just a whole bunch, all of them. It's, that's the whole, that's the cool thing. It solves every problem.

• 1:22:36Ryan Sean Adams?

  Is that what you're bullish on this week, David? I think I saw that. Is this what you're bullish on AI, crypto? Tell me what you're bullish on.

• 1:22:43David Hoffman?

  Yeah, so actually, that goes back to Rocket Pulser's question. Yeah, and that topic. I am bullish on, all of a sudden, this AI alignment problem is going to like sweep the world, slowly, but surely. We're front running the opportunity here at Bankless with this. Eventually, everyone's going to be talking about this, because we're going to be faced with the problem. Crypto. Is going to provide some tools and some like like timestamping like proof of humanity, like all of this stuff is going to provide parts of the solution. We need to live in an AI world and it starts to it's going to start to legitimize crypto because we've been thinking about these problems for the last decade and web two has not and nation states have not. We are

• 1:23:24David Hoffman?

  creating future technologies and crypto that we need to live in an AI world and we've been building them for a decade now. And so we as an industry are the most prepared to help humans live in a post AI world and that is going to be extremely legitimizing. And so AI is going to come in and then people will be like, okay, that crypto thing, we kind of need those guys.

• 1:23:46David Hoffman?

  Thanks for building the identity stuff. And that's, that's what I'm bullish on. Oh, I'm also bullish on a prescient bankless listeners will notice that it's a different time of the day from the last pre sponsor break. That's because we have to pause the pause the episode, go do like three meetings and then come back because Ryan and I are super busy. In that amount of time, I bought one of the NFTs from earlier, the Mad Lads.

• 1:24:06Ryan Sean Adams?

  Hey, you did Solana. You did the Solana thing.

• 1:24:10David Hoffman?

  For the first time I bought. So here's, here's my little dude. I tried to get one that looks like me. Did I get good enough?

• 1:24:17Ryan Sean Adams?

  Yeah, that's pretty good. So this is a Mad Lad.

• 1:24:20David Hoffman?

  There's a Mad Lad, yeah.

• 1:24:21Ryan Sean Adams?

  Yeah, that's good. There you go.

• 1:24:23David Hoffman?

  Also, I'm now bullish Mad Lads and I own one. So that's.

• 1:24:27Ryan Sean Adams?

  David is now a Solana bull.

• 1:24:28David Hoffman?

  I'm now a Solana maxi.

• 1:24:29Ryan Sean Adams?

  Eat that. Eat the maximalist. Sorry, he's turned.

• 1:24:33David Hoffman?

  It's gonna be so mad at me. Okay, Ryan, where do you bullish on?

• 1:24:39Ryan Sean Adams?

  I am bullish that we won't go the way that the US won't go the way of China in terms of banning crypto. We're already seeing like Europe do something that was much more measured with Mika. That's great. But like actually reflecting on the hearing, the grilling of Gary Gensler last week, crypto has a lot of friends in Congress. Pretty surprised, right? Patrick McHenry, Tom Emmer. These people maybe.

• 1:25:02Ryan Sean Adams?

  Hopefully, they care about Western liberal values. They care about things like free speech. But even if they don't, maybe they're just doing this for the money or whatever. Crypto also has some of that, too, like votes and dollars. And so I'm bullish that we won't go the way of China. And I'm also bullish that we have a court system that can check nation-state regulators and powers. I don't know if this works in all the countries around the world, but the fact that a company, an entrepreneur, can effectively sue the SEC, Gary Gensler, and that there is another power, a higher power in the court system, a check and imbalance on a regulator that wants to completely quash this industry, that's another bullish signal.

• 1:25:46Ryan Sean Adams?

  I also think that we can win the court of opinion, right? So you heard the Brian Armstrongs, like, hey, I started the company, entrepreneur. I decided to locate it in America. What Gensler is doing, he's driving this out of the US. How is it fair? How is it fair? How can you be called a credible regulator of securities? When after seven years, you don't even know, you can't even tell us, you won't give us the clarity on whether Ether is a security or not. It's not that freaking hard. In fact, we saw those clips earlier. Gensler knew it was a commodity in 2018. Like, it was obvious. And now he can't tell us it's a commodity? I think we win that battle in the court of public opinion.

• 1:26:28Ryan Sean Adams?

  And I do think, like, in a democracy, hopefully that's what the US still is. It has that semblance. It calls itself a democracy. That will matter as well. And so I think we win there, too. So winning in Congress, or early stages of like turning the tides in Congress, court system check and balance, I think we can win the court of opinion as well. So all of this to say, you know, this has almost been the year, we've been talking so much about regulators in 2023. And it's all because of the backlash of SBF and Do Kwon and Maschinsky in 2022. And I get it, but I feel like... I feel like we've seen the worst. I don't want to say it's the bottom. Like, there could still be some things in Operation Choke Point that are happening,

• 1:27:11Ryan Sean Adams?

  but I'm starting to see blue skies ahead and the tide turning a little bit. And I don't think that this ends with kind of a, you know, US ban on crypto or some disaster scenario.

• 1:27:23David Hoffman?

  Yeah, I think that's right. And when we were doing our Ledger show, the State of the Nation we did yesterday, the chart show, we, for a brief moment, we were talking about how like you and I got very bullish on Ether in the 2018 to 2020 bear market. And it was, it was perhaps one of the most contrarian things that you and I will ever do with our lives, was be bullish Ether in that timeframe. And like, one thing I mentioned in that show, and it may, I've been reflecting on it in the last like day or so, was that I haven't been able to feel that level of contrarian since. Because like, well, it was easy to be contrarian at $100 Ether. It's not, it's 20 times less hard to do it at $2,000 Ether.

• 1:28:01David Hoffman?

  But like, reflecting on the current state of the world right now, Gary Gensler and the SEC, John Oliver, just like, public opinion about crypto and NFTs. Everyone like crypto, crypto is dead, NFTs are scams. We don't need crypto.

• 1:28:16David Hoffman?

  Upon reflection, it actually is, once again, very contrarian right now. And makes it feel very safe, because we know crypto is not going anywhere. We need, they, they don't even understand how AI is going to come force their hand and make them use crypto. They don't even know that. We know that. That's why we're here. That's what we're doing.

• 1:28:38Ryan Sean Adams?

  I agree. It doesn't feel quite as contrarian, but it's still like the age old trope, but we're still early. Can I say that without sounding cliche and dumb? Right? It's still actually true. We're still early.

• 1:28:49David Hoffman?

  Super early.

• 1:28:50Ryan Sean Adams?

  Guys, to prove that, we have a meme of the week, a combination, moment of zen for you. The normies won't understand this, David. Balenciaga. If Balenciaga met crypto, that's what you're about to see. It's super weird, but I hope you stick around.

• 1:29:04David Hoffman?

  It's super weird.

• 1:29:06Ryan Sean Adams?

  I'll do the risk and disclaimers.

• 1:29:07David Hoffman?

  Podcast viewers won't get it.

• 1:29:10Ryan Sean Adams?

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

• 1:29:20David Hoffman?

  There is only crypto in fashion, and fashion is Balenciaga.

• 1:29:41Speaker 08

  If you're not wearing Balenciaga, you will get liquidated.

• 1:30:02Ryan Sean Adams?

  Crypto is risky, but we're headed west, dressed in Balenciaga.