ROLLUP: NFTs Are Hot Again | Macro is Breaking?! | CFTC Prosecuting DAO Token Holders

5th Week of September, 2022 ------ 📣 Swell | Liquid Staking for the People https://bankless.cc/swelldiscord ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: 🌱 LENS | WEB3 SOCIAL PROTOCOL https://bankless.cc/Lens 🚀 ROCKET POOL | ETH STAKING https://bankless.cc/RocketPool ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum 🦁 BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave 🌉 JUNO | BRIDGE FIAT TO LAYER 2 https://bankless.cc/Juno ⚡️ ZKSYNC | THE LAYER 2 SCALING ENDGAME https://bankless.cc/zkSync ----- Topics Covered 0:00 Intro 3:44 BTC Price 4:15 ETH Price 4:33 ETH/BTC Ratio 5:40 Crypto Market Cap 6:27 DYX at 20 Year High https://www.tradingview.com/x/nRFvPloa/ 9:10 U. S. Economy ~25% of World GDP https://twitter.com/biancoresearch/status/1573699077228957697 9:50 Current Depreciation Relative to Dollar https://www.reddit.com/r/dataisbeautiful/comments/xn13w5/oc_how_much_other_currencies_have_depreciated/ 10:15 All is Not Well in the Bond Market https://twitter.com/biancoresearch/thread/1574877075336470537 12:10 Drawdown of Equity and Fixed Income https://twitter.com/dtapcap/status/1574883689242279941 13:35 Rumor UK Pension Funds Breaking https://www.wsj.com/livecoverage/stock-market-news-today-09-29-2022/card/private-assets-fueled-VqnloBS8V3GaU2qzurea 17:20 ETH Economy… https://ultrasound.money/ 18:25 Miner Payouts Artificially Increased Gas Prices https://twitter.com/Butta_eth/status/1573601195847041026 21:22 Ethereum Weekends vs. Weekdays https://twitter.com/TrustlessState/status/1574792875539402754 22:40 Profitability New Meta? https://tokenterminal.com/leaderboards/earnings 28:13 CFTC Prosecuting DAO Token Holders? https://twitter.com/tier10k/status/1573069619895615488 https://www.cftc.gov/PressRoom/PressReleases/8590-22 https://twitter.com/DeFiDefenseLaw/thread/1575071268000665601 33:08 Jake Chervinsky Take https://twitter.com/jchervinsky/status/1573082859358851073 34:10 Everything Might Be Okay? https://twitter.com/BillHughesDC/status/1573090075004608513 34:55 Dissent! It Didn’t Have to Be This Way https://www.cftc.gov/PressRoom/SpeechesTestimony/mersingerstatement092222 38:26 Are NFTs Back? 38:30 Tyler Hobbes Sells 2nd Collection for $17.6m https://twitter.com/Loopifyyy/status/1575179183864434688 https://twitter.com/Loopifyyy/status/1575180053859643393 https://twitter.com/realrubberjesus/thread/1574031608297836545 40:40 Christies 3.0 - Metaverse Auction House https://nft.christies.com/?cid=EM_SM_O_TW_Inc_DPT____________ 46:56 Disney Doubles Down https://decrypt.co/110572/disney-pushes-further-into-crypto-defi-nfts-with-recent-job-post 51:44 $4.4M Punk Sale https://twitter.com/cryptopunksbot/status/1575238937081221128 https://twitter.com/PabloPunkasso/status/1575245441293119488 54:00 First NFT Spotted on Instagram https://imgur.com/BXHWP5U 57:07 Apple Wants to Impose 30% Commission on NFTs https://cointelegraph.com/news/grotesquely-overpriced-apple-s-app-store-wants-30-cut-on-nft-sales 58:30 Tim Sweeney (Epic Games) Denounces Apple https://twitter.com/timsweeneyepic/status/1573377990100238338 1:00:44 New Cosmos White Paper https://www.coindesk.com/tech/2022/09/26/new-cosmos-white-paper-revamps-cosmos-hub-atom-token 1:02:44 Reversables Transactions? https://twitter.com/kaili_jenner/status/1573727505491673088 1:05:12 Lark Bad https://twitter.com/zachxbt/status/1575494380072611847 1:09:50 Robinhood Selects Polygon to Launch Web3 Wallet https://blog.polygon.technology/robinhood-selects-polygon-to-launch-web3-wallet-beta/ 1:10:44 SafeDAO and SAFE… https://twitter.com/safe/status/1575047966183653376 https://safe.mirror.xyz/p1aonqM1NSZeOFN8iY2_Ms8y6Ikuz5E76HRiEPKnCEA 1:11:10 Opensea Live on Optimism https://twitter.com/opensea/status/1574799977649422339 1:11:20 Sound Protocol https://twitter.com/soundxyz_/status/1572633595818422272 1:12:00 USDC on 5 New Chains https://decrypt.co/110800/circle-expands-usdc-stablecoin-support-to-five-new-blockchains 1:16:08 JOBS https://pallet.xyz/list/bankless/jobs 1:19:18 NATION QUESTIONS https://twitter.com/wesleytate/status/1575156426493857792 https://twitter.com/DiscoverCrypto1/status/1575171727117545477 https://twitter.com/seangilll23/status/1575490743422005249 1:30:00 TAKES https://twitter.com/ryansadams/status/1573356668439728128 https://twitter.com/onewayfunction/status/1573346913856131073 https://twitter.com/0xtuba/status/1573910439842357248 https://twitter.com/kevinolearytv/status/1574822440110362642 https://twitter.com/TrustlessState/status/1575529128862027776 https://twitter.com/punk4156/status/1574072728482627592 https://twitter.com/ryansadams/status/1575279081070944257 1:39:00 What We’re Bullish On 1:42:24 MEME of the Week https://twitter.com/0xLawl/status/1574823004382662664 1:44:00 Closing & Disclaimers 1:44:18 Moment of Zen https://twitter.com/BanklessHQ/status/1573255803724861445 ------- Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.

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

• 0:00Ryan Sean Adams?

  Everyone has mistakes in crypto. Bury those mistakes deep down. Never think about them. That's my strategy for coping. All the things I've missed, David. How many things have you missed? Oh, my God. I've missed so many things in crypto.

• 0:09David Hoffman?

  I've missed, I've missed zero things. There's not a single thing that I've missed.

• 0:14Ryan Sean Adams?

  Well, bring that alpha to me, man, because I've missed a lot over the years.

• 0:20Ryan Sean Adams?

  Bankless Nation, happy 5th Friday of September, September 2022, that is. David, how you doing today?

• 0:27David Hoffman?

  Absolutely fantastic, Ryan. How are you?

• 0:29Ryan Sean Adams?

  Good, man. What are we getting into today?

• 0:32David Hoffman?

  So you know how, was it last week that was like the cope bear market weekly rollup?

• 0:36Ryan Sean Adams?

  Yeah.

• 0:37David Hoffman?

  This one's, this one's good one. NFTs came alive this week in a very unexpected ways. So the theme of this week is that NFTs won bigly. So I'm pretty stoked about that.

• 0:50Ryan Sean Adams?

  So is this a glimmer of hope in the midst of the, in the bear market that NFTs had a crazy big week?

• 0:56David Hoffman?

  Oh, I don't really think anyone who's still at this point in this market now is like doubtful about the future of this industry. And I think this is a great example of a build market. Prices are down, but things are moving. There are tectonic shifts happening both in the layer two space and also in the NFT market. And there's like, there's like five different massive things that happened. And we're going to talk about all of them because Ryan, it's a Friday weekly rollup where we cover the entire weekly news in crypto, which is always an ambitious endeavor, yet we persevere nonetheless into the frontier with a cup of coffee.

• 1:29Ryan Sean Adams?

  Yes, I have my, I have my cup of coffee. I do. I know it's a little late for you. And by the way, David, the other reason Bankless listeners, David is bullish today on today's episode is because he just told me he had a fantastic night of sleep. All right?

• 1:41David Hoffman?

  It's a rare occurrence.

• 1:42Ryan Sean Adams?

  Yes. And David with like nine plus hours of sleep in him is a different David. He is a bull market David. Is that fair?

• 1:51David Hoffman?

  Yeah, people who pay attention to know I have troubles with sleep. So when I wake up at somehow 9 a.m. after sleeping all the way through the night, I get real excited.

• 2:00Ryan Sean Adams?

  Well, we got some huge wins across the board in NFT to talk about. Christie's doing some stuff. Also, the Fidenzer creator just sold out a new batch of NFTs. Yeah. What else in the NFT world, David?

• 2:11David Hoffman?

  New England Patriots football team are going web three. What the hell does that mean? And a massive CryptoPunk sale. Again, and that's just the tip of the iceberg for what happened this week. Of course, some bad things did happen as well. CFTC going after DAO token holders, joining the ranks of the SEC, doing the regulation by enforcement strategy. We thought the CFTC were the good ones. Sad. But we'll get into all these details and more as we go throughout the weekly roll up.

• 2:42Ryan Sean Adams?

  Before we get in, want to tell you about our friends and sponsors at Swell Network. David and I are angel investors with this product too, because we think it is really cool. It's decentralizing Ethereum staking. David, tell them about Swell and how people can get involved.

• 2:57David Hoffman?

  Yeah, Swell is joining the ranks of Rocketpool and Lido as a decentralized staking as a service DAO. It's permissionless like Rocketpool, so any node operator can come join the network with a 16 ETH bond, but it's also permissioned like Lido, where DAO with the DAO votes on who is allowed to run a validator node without a bond. So both trustless and trusted at the same time, trying to go after the best of both worlds. Community owned and operated DAO, they want you in the Discord so they can grow this network out. And so there is a link in the show notes for you to get started with that.

• 3:32Ryan Sean Adams?

  I just noticed Mark Cuban is involved in this too.

• 3:34David Hoffman?

  Oh, wow. Wow. Yeah. Angel Brothers with Mark Cuban. All right. What's up, Mark?

• 3:38Ryan Sean Adams?

  Trying to decentralize staking right here. Yeah, definitely check out that Discord. Get in on the ground floor of this community. They're building something really cool. All right, David, let's get to markets today. Got to start with King Bitcoin. It is still the king right now. What's it trading at this week as at the time of recording?

• 3:54David Hoffman?

  I think this week, Ryan, the prices this week set an all time record for the most flat weeks. We are literally. At the same price as we were seven days ago. I think Bitcoin is down 0.15%, which, you know, if you're going to call anything flat in crypto, it's that. So start of the week at 19,300, ending the week at 19,300.

• 4:14Ryan Sean Adams?

  We're flat in Bitcoin. We also flat on ETH, David?

• 4:17David Hoffman?

  Same, sorry. Uh, start of the week at 1320, ending the week at 1320. Wow.

• 4:21Ryan Sean Adams?

  Okay, flat, a flat week, crab market, as we've called it before, I guess, the last seven days, the crypto markets don't know what to do. How are we looking on the ratio, David? Is that giving us any signal in this? This is the ETH to Bitcoin ratio.

• 4:33David Hoffman?

  Well, no, because everything else is flat too. People noticed last week, Ryan, when we skipped over the ETH BTC ratio. We started talking about something about like the ETH gas markets and then we just decided to skip the ratio. And people were like, oh yeah, super convenient of David to skip the ratio on like the bad week.

• 4:48Ryan Sean Adams?

  Well, were they wrong, David?

• 4:51David Hoffman?

  They might, they might have clued into something perhaps, but yes, uh, over the two week period, the ETH BTC ratio is down. Uh, we are down to 0.069. Nice. Um, but, uh, this week it was flat. This week it was flat.

• 5:04Ryan Sean Adams?

  This week is flat, other week is down. Kind of weird to see it down post-merge, I guess, maybe. Are you surprised about that?

• 5:11David Hoffman?

  Yeah, I guess it's the merge unwind, but also the bear market. Uh, again, the merge, it was, the merge trade is never about the week after the merge or the month after the merge. It's about the year after the merge.

• 5:24Ryan Sean Adams?

  And a year from now, David's going to be saying, the next three to five years.

• 5:27David Hoffman?

  The next three to five years after the merge.

• 5:30Ryan Sean Adams?

  Not yet, not priced in yet, guys. Give it time, all right? Give that supply burn some time to activate fully. Are we?

• 5:37David Hoffman?

  We had a good burn day today, by the way. We'll talk about that.

• 5:39Ryan Sean Adams?

  How about cryptocurrency market caps as a whole? Are we above or below a trillion dollars?

• 5:45David Hoffman?

  We are below a trillion dollars. We're up on the week though. So where Bitcoin and Ether were, the blue chips were flat, we're actually slightly up on the total crypto market cap, uh, 0.094 trillion, up to 0.097 trillion in the last seven days. So we went up $30 billion, uh, in seven days. So that means somebody, some tokens in the low cap gem category has got an increase in valuation.

• 6:08Ryan Sean Adams?

  30 billion in value created, just like that. Boy, oh boy. I remember when the crypto market cap as a whole was less than $30 billion. Now we're just talking about 30 billion being like...

• 6:20David Hoffman?

  30 billion movements, yeah.

• 6:21Ryan Sean Adams?

  Yeah, a minor movement from week to week. Alright, let's talk about the dollar for a minute because I think...

• 6:29David Hoffman?

  That looks like a bullish chart.

• 6:30Ryan Sean Adams?

  Yeah, this is a bullish chart. I kind of wish this was the Bitcoin or ETH chart, but it's not. This is actually a chart for the DXY. This is the dollar relative to a basket of other fiat currencies, primarily I think the euro. Yeah, the Dixie and the yen. And it looks like it is pumping.

• 6:49David Hoffman?

  Yeah, that's a parabola right there. So yeah, the dollar is just... And other currencies, of course, are going down versus the dollar. The British pound fell off a cliff recently. That was a big topic in the macro world. The euro is down to like 96 cents on the dollar. The dollar, everyone wants dollars. Dollars are in. So dollars are pumped. So if you are a dollar holder, it's as if your chart is going up versus like the rest of the world. So congrats to all dollar holders out there, you fiat trash monkeys.

• 7:21Ryan Sean Adams?

  Hey, I'm a dollar holder. Don't call me a trash monkey. Don't you have dollars? You're a trash monkey too. What are you doing?

• 7:28David Hoffman?

  But I will say that this is a parabola, right? And so that's unsustainable. Have we topped out on this parabola? I don't know.

• 7:36Ryan Sean Adams?

  Well, so that why is the dollar a wrecking ball? There's this kind of the dollar milkshake theory at play. Who's the gentleman behind the dollar milkshake theory? His name escapes me at the moment, but I know we've had him on the podcast.

• 7:46David Hoffman?

  Brett Johnson. Brett Johnson's the guy. Yeah.

• 7:49Ryan Sean Adams?

  Brett Johnson. So this is Brett Johnson, basically theory playing out. So markets are down.

• 7:54David Hoffman?

  Half of it. Half of it. The first half is there's demand for the dollar. The second half is there's the collapse of the demand for the dollar. So like if the dollar pumps and keeps on going.

• 8:05Ryan Sean Adams?

  Oh, you mean order of operations. You mean his

• 8:06David Hoffman?

  Yes.

• 8:07Ryan Sean Adams?

  His dollar milkshake theory has two parts to it. There's a part one, the dollar pumps, pumps, pumps. And then there's a part two where it collapses.

• 8:15David Hoffman?

  Correct. Yeah. There's a, the anti-dollar milkshake theory is that the dollar pumps and it doesn't collapse, which I actually think is a pretty fair take. And when we talked to Noah, unreleased podcast, No Opinion, he was like, yeah, everyone really wants dollars right now. And so you could see a world where the dollar grows in relative strength versus all fiat currencies and then doesn't lose that. And it just is the last standing fiat currency. Like, I think that's a

• 8:41Ryan Sean Adams?

  What's always interesting is there doesn't seem to be another fiat currency that is like

• 8:45David Hoffman?

  Right.

• 8:45Ryan Sean Adams?

  contending the dollar right now, not even close. But you're seeing all of liquidity from the other fiat currencies being sucked out. Have you seen those images, David, lately of Hurricane Ian, like Tampa Bay? We're just like looking at kind of the coast of Tampa Bay and all of the tide has been sucked out for the hurricane. This is like liquidity getting sucked into the dollar. That's what's happening right now from other assets as other assets are going down. We'll talk about bonds in a minute. This is Jim Bianco, though, talking about the dollar. And he says this, "The US economy is about 25% of world GDP." All right, Americans, your economy is 25% of world GDP. So you got about a quarter of the GDP, but the dollar is 85% of world trade.

• 9:31Ryan Sean Adams?

  85% of world trade is priced in dollars. So you got a GDP worth about 25%, but you have this exorbitant privilege Bianco is talking about of 85% of the world trade is priced in dollars. You just look at that. The dollar is the absolute champion right now in the fiat currency world. And David, this is a graph I saw actually on Reddit. Look at these numbers. This is year to date of the dollar and all of the other world currencies falling relative to the dollar. You could see the yen in there, down 20%. The pound in there is probably worse by now, but down 20% at the time of this recording. So the dollar is actually is operating as a wrecking ball and sucking

• 10:12Ryan Sean Adams?

  All of the liquidity into it. At the same time, David, the bond market seems to be getting torched. The bond market, okay, these are treasuries and sovereign bonds. This is another tweet from Jim Bianco, I think. The bond market is very big, very opaque, and very complicated. This is why it blows up regularly. GFC 2008, uh, GFC 2008, uh, the repo 2019, COVID 2020 now? Question mark, question mark, question mark. Is that what's happening now? What have been the warning signs trouble is brewing. Jim goes through some of the tweets above, but look at this, David. This is year to date bond market, okay? The absolute worst-

• 10:54David Hoffman?

  That line looks different than all other lines in there.

• 10:56Ryan Sean Adams?

  This is a scary line, okay? And this is year to date total return for the-

• 11:00David Hoffman?

  Technical analysis by Bankless.

• 11:01Ryan Sean Adams?

  It's scary. This looks scary to me. Bloomberg Global Aggregate Index, alright? And we are down in the bond market, down about 20% year to date. Look at all of the other like starts of years that that were bad. The second worst in 1999, which around this time was down about 5%. Here we are in the bond market, down 20% year to date. So bonds not doing too well.

• 11:27David Hoffman?

  I remember when we had Jim Bianco on, it was about at that first mark, I believe, in the the blue line there, that first dip around June. And my mind was like, oh, okay, it's really, really bad. How bad can it get? Can it really get much worse? Maybe it reverses here, and then it got better, and then it got a lot worse. Uh, so this thing has continued. This this line has continued to diverge from all other previous lines. Again, some high quality technical analysis, not technical analysis, and high quality market analysis by Bankless. Lines looking different. Lines are different.

• 11:58Ryan Sean Adams?

  Lines looking different, lines looking bad, um, lines going down on the bond market while line going up on the strength of the US dollar. This is another line. This this looks scary as well.

• 12:08David Hoffman?

  Here's a great line.

• 12:10Ryan Sean Adams?

  This is the tweet, no words, and this is depicting the drawdown in total market capitalization of US equity and fixed income. Of course, fixed income is primarily in the form of bonds. US equity, we know what those are, uh, that is stocks. And look, we are down 57.8 trillion.

• 12:30Ryan Sean Adams?

  On the year to date basis.

• 12:32David Hoffman?

  What does that mean? Can you explain like on five?

• 12:34Ryan Sean Adams?

  This is the total market cap of stocks and fixed income, stocks and bonds, down 57.8 trillion from their all time highs.

• 12:44David Hoffman?

  Wait, so 57.8 trillion dollars of wealth is gone in the last like half of a year?

• 12:52Ryan Sean Adams?

  From all time high, yeah.

• 12:53David Hoffman?

  From all time highs. That's a, that's a lot bigger than the crypto total market cap.

• 12:58Ryan Sean Adams?

  Yeah, it's big.

• 12:59David Hoffman?

  The crypto total market cap is under 1 trillion. So we've lost, we've lost 58 crypto industries in 2021, 2022.

• 13:08Ryan Sean Adams?

  There you go. When you put it that way, I don't feel so bad, David.

• 13:11David Hoffman?

  I cannot.

• 13:11Ryan Sean Adams?

  Doing great. Mike Novogratz makes the comment that this is 3X GDP. So we're talking about 57.8 trillion dollars is 3X GDP. All right. So if you have your money in equities and you have your money in bonds, which most pensions do, you're feeling a wee bit of pain right now. Like this does not feel good. This does not feel, uh, this does not feel healthy, certainly. And we are actually maybe starting to see signs of pensions, uh, get into hard times. Pensions going bust, question mark? I don't know too much about this story, how it's developing, but this is a headline from the Wall Street Journal. UK pensions push into hard to sell assets, expose them to a cash squeeze. That headline sucks.

• 13:57David Hoffman?

  Yeah, that, that headline's pretty bad. What, what it means, UK pensions push into hard to sell assets. That means previously, UK pensions bought hard to sell assets and that exposure to them has put them into a cash squeeze. Wall Street Journal, improve your headlines. But basically pensions have a bunch of illiquid assets, uh, and they can't sell them because of illiquidity crisis.

• 14:18Ryan Sean Adams?

  Get, get advice from Bankless headlines, okay? Line's going down. All right?

• 14:23David Hoffman?

  That headline sucks.

• 14:26Ryan Sean Adams?

  Break it down so people understand, all right, Wall Street Journal? So that's what's going on. And I guess the macro take here has always been the take, as we had sort of that macro sprint back over the summer of just trying to understand what's going on, right? Strengthening dollar, bonds getting worse. The question is, how long will bondholders be holding the bag for all of the inflation costs, right? And so the question in my mind, and the question that Bianco and other macro analysts that we brought on Bankless have always brought up is, how long will the central bank, will Jerome Powell, continue to tighten? And the answer has always been, until things start to break, all right? Are these signs of things breaking?

• 15:08Ryan Sean Adams?

  I mean, bondholders cannot be happy at this point in time. We have UK pensions maybe feeling some pressure and a squeeze. Are things starting to break? Are we starting to see early signs of a fracture? And yet, the Fed continues to tighten. So this is the question, and I almost think, David, I want to get some more macro voices on Bankless to answer this question of, how far can the Fed actually push the markets before things break?

• 15:34David Hoffman?

  Well, it seems to be it's breaking in a number of different ways all at once. There seems to be a number of things that seem to are on like the precipice of breaking. The bond market, I guess that pushes the pension plans into bad spots. Stock market's bad, down bad. Like, people are going to start to go insolvent in the stock market. I mean, now it's a game of like, no way, what's going to break first? Like, because there's many different fractures.

• 15:59Ryan Sean Adams?

  Well, including there's talk of like, you know, inflation being sort of a lagging indicator, and maybe we're actually entering deflationary territory. And, I mean, that can be worrisome, because if you tighten too hard, too fast, and you're only responding to lagging indicators, what if you turn the entire economy into worse than a recession, into a deflationary depression?

• 16:20David Hoffman?

  I think the idea that we have a ton of inflation because the Fed was too slow to increase interest rates, followed by now we have a bunch of deflation because the Fed was too slow to pivot and reduce interest rates, seems like a reasonable future scenario to have.

• 16:36Ryan Sean Adams?

  That's too simple, though. They've got to see that, right? Let's not, if you're Powell, you're just like, let's not make the same mistake we made by responding too late to the thing.

• 16:45David Hoffman?

  You would hope.

• 16:46Ryan Sean Adams?

  Okay.

• 16:47David Hoffman?

  Are our central bankers smart, or are they dumb?

• 16:51Ryan Sean Adams?

  I've never been able to answer that question.

• 16:53David Hoffman?

  I've never been able to answer that question.

• 16:54Ryan Sean Adams?

  Because sometimes I wonder if they are smart, but they're acting dumb. That could be part of the game too.

• 16:59David Hoffman?

  That whole angle really throws a curveball into the whole analysis.

• 17:03Ryan Sean Adams?

  I think they're actually smart. I think they're smart.

• 17:05David Hoffman?

  And playing dumb?

• 17:06Ryan Sean Adams?

  And sometimes they play dumb. I think that's the case. And sometimes they're just dealing with the cards they were dealt.

• 17:11David Hoffman?

  Sure.

• 17:12Ryan Sean Adams?

  And like, kind of the political, yeah, the tools at their disposal as well. But let's talk about the crypto economy, an economy that we understand.

• 17:21David Hoffman?

  A little bit more. Ultrasound on money makes me feel so comfortable. I understand everything on this page.

• 17:27Ryan Sean Adams?

  So do I. I understand this page. It all makes sense to me. It's just like,

• 17:32Ryan Sean Adams?

  I don't have to worry about, like, it's all algorithmic.

• 17:35David Hoffman?

  The lines on this page look good.

• 17:38Ryan Sean Adams?

  Yes, the lines look good. Alright, so we are actually not ultrasound though, David. Post-merge, yet. So we looked at this last week, just, I gotta look at it again this week. We have increased supply of ETH, 8,500 ETH worth of supply. However, I'm gonna click this button. This is a fun button. If we didn't merge, we would have been, how much, David, you said?

• 18:01David Hoffman?

  180,000. So 8,500 versus 180,000 ETH are issued. Yeah, that's different.

• 18:12Ryan Sean Adams?

  So ETH issuance hanging at about 0.18%. That's the annual issuance as of now, but that can change quickly. And David, maybe we go through that in a few tweets. What's this first tweet we're looking at?

• 18:25David Hoffman?

  Yeah, so this was an interesting take that actually a lot of people in my circles were like, oh, I didn't think about this. This tweet says, "Miner payouts artificially increase the gas price. Now that there are 500,000 less of such regular transactions." I think they mean that, I don't know on a timeframe that is, maybe on a daily timeframe. But basically, here's how this works. Minor pools, if you are an independent miner, mining at home, or you have just like, you're not a massive, you're not massive, you generally join a mining pool. Almost everyone joins a mining pool. You just smoothed out your payouts that way. You group together so that instead of like, once a year, You receive two ETH, you get a regular payout of like 0.1 ETH every, every bit of time, every time you accrue a balance.

• 19:08David Hoffman?

  And so I remember doing this when I was, I would mine with a Nano Pool. And so I would get every time my threshold, my like balance would hit 0.2 ETH, I would get a payout, it would go to my wallet and Nano Pool would pay me out. They would mine the block, they would get all the rewards and they would pay me for my hash power. That's how a mining pool works. And so all these individual miners are getting paid smaller microtransactions.

• 19:30Ryan Sean Adams?

  On chain?

• 19:31David Hoffman?

  On chain, as they, as miners are paid out. And so this was a huge part apparently of Ethereum block space consumption of just regular Ether payments to miners all over the world. As they comprise these mining pools. So eliminating the proof of work mining also eliminated all of these highly regular micro Ether payments to all these miners all across the world. And so that's a big reason as to why gas prices have been down so much post-merge. Is because we are no longer paying out like thousands and thousands and thousands of miners all at once, all over the world. People, people forgot to consider this.

• 20:05Ryan Sean Adams?

  So the take here is the merge made Ethereum transactions cheap.

• 20:08David Hoffman?

  Yeah.

• 20:08Ryan Sean Adams?

  What is the gas price right now, David? 15 kuai?

• 20:10David Hoffman?

  15 kuai, yeah. We actually had a huge spike an hour ago. Actually, I think I put that into the week of the world. Yeah, you're about to click on that tweet. So we had an NFT drop, I think, I believe. Gas price hit 100 kuai. It was between 60 and 100 kuai for a good like almost hour or so. And the cool thing is, is that we burned about eight hours worth of Ether inside of 40 blocks. So like in five to 10 minutes, we burned eight hours worth of Ether issuance. And like this is a point I've been trying to drive home. We could go like a year of inflationary Ether. And then if another NFT market or NFT bull or DeFi season, whatever happened, we could burn all of that inflated issued Ether for the last year.

• 20:53David Hoffman?

  Inside of two weeks, if the gas markets pick up again. And so Dom, I'll shout out to Dom, but I'm gonna, this is gonna be the last time I shout this out because I'm totally gonna take all future credit for this. Dom in my, in my replies said, capped issuance, uncapped burn. Nice job, Dom. Capped issuance, uncapped burn. And so that's a great way of illustrating the monetary system of Ether.

• 21:16Ryan Sean Adams?

  And Dom, every time David tries to steal that from you, I'm going to remind folks where it came from, okay? That's yours, Dom. Take that.

• 21:23David Hoffman?

  The other interesting thing I saw this week is back onto that ultrasound money supply growth chart. You can actually flip back to the actual website. You can see the days of the week in the Ether issuance. And so you see in the left hand of that curve, that waviness. Where like, you know, the mornings, people wake up and they, you know, do some transactions. And then, and then the weekends Ether gets issued because like gas markets are depressed, it's depressed. This week, this week was almost an ultrasound week, like that, it looks like it's capped over the last like five or six days. So there hasn't been much issuance over the last five or six days. And it's the difference between the weekends where the wavy parts, where you get the congestion, the rush hour, if you will, of Ethereum. Versus the weekdays, excuse me, the weekdays are where you get the rush hour, the weekends are where you get the supply growth.

• 22:07Ryan Sean Adams?

  Wait, wait, you say on Ethereum, we're bankless, yet we're keeping banker hours? Like, we don't do gas transactions on weekends?

• 22:13David Hoffman?

  The society organizes around a human economic activity. And so, like, yeah, like.

• 22:18Ryan Sean Adams?

  Take holidays off.

• 22:19David Hoffman?

  Exactly. The express, expressways on highways go point in certain directions based on user demand, right? And so I just think it's cool that Ethereum is such a finely tuned machine that you can see the days of the week on the supply growth chart, which I think is illustrative of a great system.

• 22:38Ryan Sean Adams?

  Great system, absolutely. Really cool. David, let's talk about one of the other pieces of meta we think might exist during this bear market season that we're in. And that is an emphasis on protocol profitability.

• 22:53David Hoffman?

  Love it.

• 22:54Ryan Sean Adams?

  This was a really good dashboard put together by the folks at Token Terminal. And it shows the earnings of all sorts of different DeFi and Layer One protocols. I think actually only Ethereum, Ethereum is the only Layer One here. I haven't been able to see the others, but you can actually look at this on a 24 hour day, time horizon, a seven day time horizon, 30, all the way out to kind of max and see, let's look, over the last week Ethereum earned negative $5 million.

• 23:26David Hoffman?

  Negative $5 million.

• 23:28Ryan Sean Adams?

  It's not profitable, but that was a lot worse previously when it was issuing so much, so. The way you get profits, of course, is like, what are the revenue? What's the revenue of a blockchain? Blockchain spell sell blocks, as we've said so many times. So the revenue is burnt ETH essentially and fees as a result of a payment for blocks. And the cost is the issuance itself. And so the earnings over the long run of ETH look real bad. Negative $21 billion in ETH issuance.

• 24:01David Hoffman?

  That went to miners. This is why miners are so toxic. Sorry to cut you off, but this is $21.7 billion that got handed to miners. So miners got all that money.

• 24:12Ryan Sean Adams?

  They got all that money. It was very expensive, is what we would say. It's like a combustion engine relative to a new engine that gets far, far more. Yeah, electric. And so we have other DeFi protocols as well. And you can look the last seven days. OpenSea made 2 million in earnings. DYDX, we've got MetaMask here, we've got Magic Eden here, Lido Finance. What do you make of this dashboard and earnings in general, David?

• 24:38David Hoffman?

  So the first thing I'm noticing on the, on the right side, the earnings is like, there's a lot of red. Ethereum negative $343 million over the last 30 days. That's because a lot of the last 30 days had proof of work issuance. But Uniswap negative $302, I mean, $302, whatever. OpenSea made $904 million. That's why it's a good business. Lido negative 5.9. Convex Finance negative 2.8. Aave negative 72,000. So not that, not that much. GMX negative 3.4. DYDX negative 3.8 million. Lots of negatives, lots of negatives. They're all red. The next era of crypto, and crypto is going to die if these things don't flip green. They have to flip green at some point in time.

• 25:20David Hoffman?

  And I think we're going to, this, I think this is going to be the crescendo of the next bull market. Is that slowly one of these, one of these orgs figures out their issuance, their costs, their revenues, and it flips green. And then the next one flips green. And then the next one flips green. And this is going to trigger the next bull market is that these things all start to flip green and their earnings outweigh their costs. We already have a decent number of things that have flipped green. OpenSea, MetaMask, they're centralized companies, so they don't have like protocol issuance. But MakerDAO, green. Perpetual Protocol, green. One Inch, green. Arbitrum, green. Magic Eden, green. But then if you keep on scrolling down, it's just like red, red, red, red, red. Token issuance, yield farming, like DAO payments, yields incentives, blah, blah, blah, blah.

• 26:04David Hoffman?

  Make it green. If you're, if you're part of the Dow that's red, go into your Dow and start making it green so we can have our bull market back. That's what you need to do.

• 26:12Ryan Sean Adams?

  Go find profit. I think there's some gems here too, to, to be looking at from an investment perspective is investing in profitable protocols. It might be some alpha.

• 26:20David Hoffman?

  Crazy alpha. Could you imagine?

• 26:23Ryan Sean Adams?

  Yeah. Can you imagine a protocol, a crypto protocol that actually makes money? Uh, David, we got a lot coming up next. Number one, the CFTC is attacking DAOs next.

• 26:33David Hoffman?

  Sad.

• 26:34Ryan Sean Adams?

  Did our good regulator just turn bad? Did they go the way of the SEC? And also we're going to talk more about the NFT industry, how it's exploding in activity. Guys, we'll be right back with the rest of the roll up, but before we do, we want to thank the sponsors that made this episode possible.

• 26:48David Hoffman?

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• 27:31David Hoffman?

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• 28:13David Hoffman?

  The CFTC charges OK Dow for an illegal offering of off-chain digital asset trading, registration violations, and failing to comply with the Bank Secrecy Act. All normal things to charge something for if they did all of that stuff, but they charged a Dow and they're going after token holders, which is very new and very different and puts forth an interesting premise that the CFTC will actually have to prove in court that Dow token holders did these things. But that is exactly what the CFTC is going to try and do. Apparently, they are trying to sue a Dow. How that is going to work will be interesting.

• 28:56Ryan Sean Adams?

  I was pretty stunned by this last week when I saw these tweets, David.

• 28:59David Hoffman?

  Pretty disappointed.

• 29:00Ryan Sean Adams?

  This is the filing itself. And so the CFTC, which is the Commodity Futures Trading Commission, of course, they regulate commodities in the US. And their, I guess, their brother organization is the SEC, which regulates securities. They just issued an order and a filing to charge B0X.

• 29:20David Hoffman?

  B0X, yeah.

• 29:20Ryan Sean Adams?

  Also, also known as OK Dow. It's one of the same thing. I guess they rebranded. And so they are charging the founders, Tom Bean and Kyle Kistner, for illegally offering leveraged and margin retail commodity transactions in digital assets, engaging in activities only registered futures CFTC merchants can perform, and failing to adopt a customer identification program as part of the Bank Secrecy Act compliance program. So these are the charges laid. That in itself is somewhat surprising. I'm not sure exactly what B0X was into and up to. And the most surprising part about it was not the charges,

• 30:02Ryan Sean Adams?

  but who the charges are laid against. This is a tweet from Carlo dot ETH. Yesterday, the CFTC filed a declaration informing the court that it seeks to essentially charge every voting member of OK Dow via its chat bot and forum posts. So the CFTC filed a lawsuit against members of the Dow itself. This is a stunning new development for the space because if approved by the court, it will create legal precedent allowing regulators to claim proof of service of illegal action against every member of the decentralized entity, every member of the DAO via notice to its website. The CFTC claims that it got confirmation that members were served by monitoring the chat posts between DAO members. It remains to be seen how the DAO members

• 30:47Ryan Sean Adams?

  will mobilize and fight and respond. Stay tuned for more. So the CFTC was actually monitoring chat posts between DAO members and they are not only charging the founders of this protocol, they are charging individuals inside of the DAO, particularly those individuals who voted in governance of this protocol. That to me, David, is absolutely stunning and it is completely unclear that they have jurisdiction over this. This is really a regulation by enforcement type of move by the CFTC. What's interesting here, David, is as you were alluding to earlier, the CFTC has traditionally been kind of crypto-forward, crypto-friendly, curiously innovative. Well, it seemed like

• 31:30Ryan Sean Adams?

  the SEC to date has been much more aggressive, you know, like a much more aggressive and hostile and unclear take on the crypto industry writ large. We haven't previously seen that from the CFTC. And so this is a kind of a stunning move and I was very surprised to see it.

• 31:50David Hoffman?

  Yeah, this is, this is going to take a while to unpack. There's a lot of things to think about here. I'll always stand by what I say, which is if it can be regulated, then it should be regulated. And so it's interesting to watch the attempt of the CFTC to regulate a DAO. Just because something is a DAO doesn't mean it has immunity, right? And so if the DAO is doing illegal stuff and those members of that DAO are like KYC'd and identified and known to the CFTC, that gives the CFTC Kind of the surface area they need to go after the BZX entity, like the DAO itself. If they're going after the individual members. So they're not like taking the BZX, like LLC to court because that's not an entity.

• 32:34David Hoffman?

  That's what a DAO is, but they are taking individual members and leadership of the DAO and going after them, which kind of effectively is the same thing, kind of even scarier if there's no limited liability corporation protecting these individuals. All I see here, Ryan, is like, there's probably members of the DAO that are anonymous and the CFTC can't go after because they don't know who they are. All this is doing is promoting and incentivizing anonymity, which is probably bad.

• 32:59Ryan Sean Adams?

  I think it's pushing anonymity. It's also pushing DeFi innovation outside of the borders of the US. Because why would you do this as a US citizen? This is Jake Trivinsky's take. "The CFTC's BZX enforcement action may be the most egregious example of regulation by enforcement in the history of crypto. We've complained at length about the SEC abusing this tactic, but the CFTC has put them to shame." Wow, strong words coming from Jake. He continues, "It's deeply disappointing to see the CFTC damage its own reputation like this among those who care about the future of crypto in the United States, especially at a critical moment, while it pitches itself to Congress as the right agency to regulate digital commodity trades."

• 33:41Ryan Sean Adams?

  This is kind of like, you know, the Obi-Wan and Anakin meme of like, "You were the chosen one." And the CFTC has previously almost promoted itself to Congress and legislators as the group that could both support the regulatory ambitions of the US, but also foster innovation for crypto. And it feels like we're almost trading one devil for the other if this is the kind of action they're going to take against the crypto industry. But here's a bright side, David. I want you to read this tweet from WC Hughes dot ETH.

• 34:16David Hoffman?

  Sure. He says, "A court has to agree with the CFTC for these theories about DAO liability for a token to be meaningful. Basically, if you own the token, are you a DAO member, DAO leader, DAO executor?" The bill continues and says, "That's not going to be an easy fight for the CFTC. Chill out, everyone. The world hasn't ended." So this is opening a door, but there's still so much left to unpack what is behind this door. So this is going to be an ongoing saga.

• 34:44Ryan Sean Adams?

  It's another example of this all gets settled in courts, I guess. We're seeing more of that.

• 34:49David Hoffman?

  I love it when my industry gets settled in courts.

• 34:52Ryan Sean Adams?

  Right. There's also a silver lining that there was a commissioner, Summer Mersinger, who dissented. And Hester Purstile, she wrote an entire dissent on the CFTC's action. Of course, she is a commissioner, so she is a representative of the CFTC. But why don't you read her statement here, David? It's basically under the headline, "It didn't have to be this way." And she's talking to her own organization by saying that it didn't have to be this way. What does she say?

• 35:21David Hoffman?

  Yeah, basically, she says, one small paragraph in the longer dissenting statement says, "Unfortunately, I cannot support the commission's approach to this particular matter. While I do not condone individuals or entities blatantly violating the CEA or our rules, we cannot arbitrarily decide who is accountable for these violations based on an unsupported legal theory amounting to regulation by enforcement while federal and state policy is developing. For these reasons, I am respectfully dissenting in this matter." Thank you, Summer. Thank you. Appreciate it. This was surprising. Out of the CFTC, like we said, like, CFTC has always been like the good guy in stark contrast to the CSEC. So I'm kind of hoping this is a little bit of like,

• 36:02David Hoffman?

  not a mistake, but just like, since it's out of character, the CFTC has like more like, we know Gary Gensler is coming after us. This could be an anomaly out of the CFTC. And that is like, perhaps my fingers crossed silver lining is this is an anomaly?

• 36:18Ryan Sean Adams?

  I think that's a good take, and that's a hopeful take. I also wonder, I have another take on this, and this might be a more pessimistic take on it. And that is that the CFTC is getting drained of its crypto-friendly advocates. So Brian Quintan's left the CFTC, who was formerly, you know, a commissioner in the CFTC.

• 36:38David Hoffman?

  Now works in crypto.

• 36:40Ryan Sean Adams?

  He now works in crypto. We've also had Christian Carlo, who's the former head of the CFTC, on the podcast. He was very crypto-friendly. He kind of consults and works in crypto. And so I wonder if- The only regulators that are left standing, or soon to be left standing, will be crypto unfriendly regulators. Because those that have kind of caught the crypto bug and see the vision for this thing are just like, I don't want to stick around this agency that's prosecuting crypto. I'm going to get into, so I, I, I wonder if that's partially what's happening as well. This is of course just Ryan's speculation, but that would be a more pessimistic reading of what's going on.

• 37:22David Hoffman?

  I can definitely see that take that it seems like a very reasonable take, which is extremely bearish.

• 37:28Ryan Sean Adams?

  It's kind of like, do you remember?

• 37:29David Hoffman?

  Crypto is so bullish and such a magnet for talent that it takes all the people that see it away from the regulators where we need them to be.

• 37:37Ryan Sean Adams?

  Well, there's this warped view, I think, among regulators too. Do you remember when they were talking about like preparing the White House reports on crypto? And anyone who owned crypto assets actually had to recuse themselves from that. And so it's like, that means all of the people who actually understand crypto, like all of the crypto bulls. If you understand crypto, you're probably going to want to own some crypto, right? By nature of it.

• 38:01David Hoffman?

  That's the way it works.

• 38:01Ryan Sean Adams?

  That's kind of the way it works. But now everyone who understands crypto and holds crypto has to now recuse themselves in the process. I mean, it's almost to me, it's just like asking everyone who holds dollars to like recuse themselves from some sort of legislation impacted dollars. Like it's just, you're going to eliminate everyone that kind of understands how the dollar system works. Anyway, that might be what we're up against, but let's move on to some more optimistic takes. David, NFTs are back, baby. What's going on with Fidenzas?

• 38:31David Hoffman?

  You remember the name Tyler Hobbs, Ryan? Tyler Hobbs, the creator of Fidenzas?

• 38:36Ryan Sean Adams?

  I don't remember him, but I do remember Fidenzas, certainly.

• 38:39David Hoffman?

  Yeah, so he, the creator of Fidenzas, coming out with his second generative art collection. 900 new NFTs. And he just finished a sale of at 14 each. So he raised, raised revenue, made money of 12,600 ether inside of the sale. 17.6 million dollars in a bear market. And Ryan? They are beautiful. They are beautiful NFTs. If you are into this game of generative art, ooh, that one is great. They're looking like, kind of like, patterned embroidery, like seashell art kind of thing for the podcast listeners out there. But there is some new mechanisms at play here. And so this isn't just another art blocks drop that somehow did very, very well.

• 39:23David Hoffman?

  This is a brand new style of drop where there was a, something called like a strike price, where you could bid how much ether you're willing to pay for an NFT. And then there would be one price selected after the fact, and everyone would pay that same price. And if you overbid, you got some of your ether back. So that was a cool mechanism. And then also, you get to mint your own NFT. So the people that bought what these things are, they actually bought a mint pass, not the actual NFT themselves. And so minting will start soon, but you, if you have a mint pass, you can go into like this, kind of create your own, build an NFT algorithm workshop. So the minter and the artist and the algorithm are all having like this three-way relationship.

• 40:06David Hoffman?

  And so if you, as a mint pass owner, you can start to tinker with some dials and make your NFT look a particular way, and then you get to mint it, which is kind of cool. But overall, I think the big takeaway is that Tyler Hobbs, creator of Fidenza's, had an absolutely massively successful NFT drop with his QQL art drop. That's what it's called, QQL, raising 17.6 million dollars, in the middle of an era where people thought that art blocks, specifically art blocks, were dead.

• 40:35Ryan Sean Adams?

  That's really impressive. I would not have guessed it. Not in this economy, David.

• 40:41Ryan Sean Adams?

  How about Christie's? They're doing something with NFTs.

• 40:43David Hoffman?

  Yeah, Christie's. Christie's, they were the place, the auction house that sold the Beeple art for 69 million dollars. Remember that, Ryan?

• 40:51Ryan Sean Adams?

  Yes.

• 40:52David Hoffman?

  This is awesome. Like, we're just recapping the bull market right now. Christie's announced the first ever global auction house to host fully on-chain sales on Ethereum. So according to Christie's, all transactions on this new platform, including after an auction, will be recorded on Ethereum, and all requisite transactions and compliance tools also integrated, streamlining the Process that it was at times a strange hybrid of crypto tech and 20th century bureaucracy in the early days of the NFT boom. The launch of Christie's 3.0 can be seen, I'm reading from the announcement here. The launch of Christie's 3.0 can be seen as a direct result of the Beeple sale in which Christie's accepted cryptocurrency Ether and allowed buyers to transfer the crypto to the auction house directly from their digital wallets.

• 41:37David Hoffman?

  That sale was orchestrated in part by Christie's specialist Noah Davis, who subsequently left this firm to go work for Yuga Labs, now pioneering the CryptoPunks. And then also from the Christie's website, here's where it gets really, really cool. Straight on the website, it's what is Christie's 3.0? Christie's 3.0 is an on-chain auction platform dedicated to exceptional NFT art. Whether you're new to NFTs or already a committed member of the community, discover and bid on exclusive drops curated by Christie's. And then there's the question like, how do I buy? To bid on Christie's 3.0 auctions, you need to connect a digital wallet. For the best experience, we recommend connecting via a desktop browser using a browser extension such as MetaMask or Coinbase. After you connected your wallet, you can then set up a Christie's 3.0 account.

• 42:22David Hoffman?

  If you're already a Christie's client, you'll be able to bid without further identity verification. If you're a new user, it will ask you to verify your identity. Once verified, you are good to go. So MetaMask Coinbase integration into Chriskey's, add some KYC and boom, you are making bids on the Christie's virtual Metaverse auction house. Wow, that's pretty cool. And also the website looks fantastic.

• 42:45Ryan Sean Adams?

  This is just like, like right in the art world, right? Christie's is probably at the center of the art auction house world. And they're basically pivoting and they're saying stake in the ground. Our new auction house, all of our resources are going to be in crypto based on Ethereum. Look at this question from the FAQs, David. What currencies can I use on Christie's 3.0?

• 43:06Ryan Sean Adams?

  Christie's 3.0 accepts Ethereum ETH.

• 43:09David Hoffman?

  That's it. That's the whole thing.

• 43:11Ryan Sean Adams?

  Right, this is like NFTs being denominated in Ether once again. And blows my mind if we didn't just live through a crazy NFT bull market. And you had told me two years ago that there would be such a website and this would be in the Christie's FAQ, I would have been over the moon excited about the adoption. And because I think this is happening during a bear market, no one really notices, right? Life goes on.

• 43:34David Hoffman?

  So Ryan, this to me, here's the most bullish scenario for this. The normal Christie's business continues to go on. The regular Fiat, like paintings, physical paintings, you know, analog art. That's still going to go on. But there's also infrastructure for normal analog art to receive a digital corlet, a digital like version of itself. And the reason why this is so bullish for Christie's, like this auction house, is because the internet is global, right? You have more market, market participants because they don't have to leave their own home. They use internet rails like Ethereum to get money into Christie's. Who can participate in this in Christie's 3.0 versus the actual physical Christie's? Is an order like orders of magnitude, the scale of the internet, right?

• 44:17David Hoffman?

  And so you can totally and easily see analog art starting to be auctioned off on Christie's 3.0 because of the global liquidity of ether and accessibility. And so I think, you know, this is going to start as normal NFTs as we know them, but it's going to also start to bleed into like regular boomer analog art also auctioned off on this platform. And eventually the art market, the physical art market is just going to be consumed by the digital art market. Because that's how the, that's how technology works. Software eats everything.

• 44:46Ryan Sean Adams?

  Yeah, totally agree. Guys, more hot NFT news coming up next. This has been NFT week, NFT bull week, I think. Disney's doubling down on NFTs. And so they've just revealed some big things we're going to talk about. Also, Apple wants a ginormous cut of all NFT sales. What are they talking about, Tim Cook? What are you doing? We'll talk about that. There's so much activity, guys. We'll be right back, but before we do, we want to thank the sponsors that made this episode possible.

• 45:11David Hoffman?

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• 45:56David Hoffman?

  You can find me hanging out there sometimes in the chat, so I'll see you there. Lens Protocol is an open source tech stack for building decentralized social media applications. It is the new era for social media. We all have toxic relationships with our Web 2 apps. We want to break up with them, but we can't. These applications own our digital lives and all the relationships that we've made. We need to break through to a new paradigm of social networking applications that we control, rather than them controlling us. Lens isn't a social media app. It's a protocol to let a thousand Web 3 social apps bloom. Lens is a permissionless and transparent social graph that is owned by the user. In crypto, we say "not your keys, not your crypto." And on Lens, we say "not your keys, not your profile." With Lens, your followers go with you to whatever social media application you want to use. And instead of being trapped by an algorithm chosen by that app, Lens lets you choose

• 46:40David Hoffman?

  the way you want to experience your social media. Lens is the last social media handle that you'll ever need to create. So in order to get started, there's a secret code word in the show notes. Enter that code word in the Google Form link, and you'll be well on your way to entering the world of Web 3 social. Disney is revealing some of its intentions with a job listing, because they are looking to hire a principal counsel specializing in NFTs, the metaverse, blockchain technology, and decentralized finance, to guide the company through what appears to be its coming and aggressive push into Web 3. So there's a job posting for this position explaining that the attorney, the name of this position, will provide legal advice and support for global NFT products made

• 47:23David Hoffman?

  in collaboration with Disney Media and Entertainment Distribution, as well as Disney Parks, Experience, and Products. Ryan, to me, that sounds like the full thing. That sounds like the whole of Disney. Marvel, Disney, the princesses, it's all of it. And additionally, the announcement continues, or the article continues, "The principal counsel will provide day-to-day legal advice to Disney legal and business teams on NFT and cryptocurrency-related matters and issues, and provide thought leadership and strategic direction on products involving digital currency and blockchain technology." Wow, that doesn't sound like a "hey, who's some Zoomer millennial kid who knows about NFTs?"

• 48:04David Hoffman?

  This sounds like, "hey, who is an operator who's done some awesome bang-up job in the Web 2 space that is all super knowledgeable about NFTs and wants to lead the entire Disney company into this NFT thing?" So this is going to be a huge hire. Congratulations ahead of time to whoever lands this job. It's going to be some Chad, probably. And wow. I mean, what, I mean, think about the surface area between Disney and NFTs. It's got to be infinite.

• 48:32Ryan Sean Adams?

  Yeah, I think one thing, you know, we've been talking so much about like building the, through the bear market, right? And when I think of builders, I think of like just all of the DeFi builders that we've had on the podcast, you know, the Hayden Adams and the, you know, the Stannys and the Kane Warwick's and all of these people, of course. But this season of the bear market, it's actually companies, it's actually corporations that were like, huh, that NFT thing was incredible. And we know it's not over. And so then we just saw Christie's open up their auction house in the bear market. Now we're seeing Disney doubling down and hiring a strategic position to guide all of their global NFT efforts during the bear market, right? These companies are building during the bear market as well.

• 49:16Ryan Sean Adams?

  And I think we'll, we'll see the fruits of that on the other side when things get frothy again.

• 49:21David Hoffman?

  Ryan, I remember your take that NFTs are less threatening to the web two traditional world than DeFi is to the banks. DeFi disrupts the banks. NFTs enhances the rest of the world. And I think we're definitely seeing that take play out. And now as a DeFi bro, I'm like, damn, those NFT people are having a lot of fun.

• 49:44Ryan Sean Adams?

  Well, that's all right. You're an NFT bro too, if you wanted me, David. What's this? The Patriots with NFTs?

• 49:51David Hoffman?

  Yeah, the New England Patriots. For the international listeners, that's a football team. Sorry, an American football team.

• 49:58Ryan Sean Adams?

  Yes.

• 49:58David Hoffman?

  Headline reads, well, no, not soccer.

• 50:02Ryan Sean Adams?

  Yes, not soccer.

• 50:03David Hoffman?

  Not soccer, yes. NFT software company Chain inks four-year deal with the New England Patriots. A deal with Kraft Group, which I'm not familiar with, who makes Chain, the official blockchain and web three sponsor of the Patriots, the New England Revolution, Gillette Stadium and Patriot Place. So the Patriots football team has a official blockchain and web three sponsorship in the Kraft Group.

• 50:28Ryan Sean Adams?

  David, who's your favorite player on the Patriots, huh?

• 50:32David Hoffman?

  Is Tom Brady on the Patriots?

• 50:35Ryan Sean Adams?

  I'm gonna say yes, because I have no idea.

• 50:37David Hoffman?

  Okay. Well, first off, he's definitely not my favorite player. Is Tom Brady on?

• 50:41Ryan Sean Adams?

  It's just the only one that David can think of.

• 50:43David Hoffman?

  Who does Tom Brady play for?

• 50:45Ryan Sean Adams?

  Huge football fans on bankless.

• 50:48David Hoffman?

  He plays for, oh, he's now on the Tampa Bay Buccaneers. When the hell did that happen?

• 50:52Ryan Sean Adams?

  Damn, we're about to get destroyed in the comments.

• 50:54David Hoffman?

  Oh, we are gonna get absolutely destroyed.

• 50:56Ryan Sean Adams?

  Should we cut that?

• 50:56David Hoffman?

  Hang on, can I make sure that he was actually on the Patriots?

• 50:59Ryan Sean Adams?

  He better have been, or we're definitely cutting this. This is not making his show for this wrong.

• 51:05David Hoffman?

  Yeah, it was the Patriots. It was the Patriots. I got that one.

• 51:07Ryan Sean Adams?

  I knew it. All right, we just don't keep up with football all the time since crypto. That's all it is.

• 51:14David Hoffman?

  You want to hear a fun fact, Ryan, about football?

• 51:16Ryan Sean Adams?

  Yeah.

• 51:17David Hoffman?

  I played on my high school's football team.

• 51:18Ryan Sean Adams?

  You did?

• 51:19David Hoffman?

  Yeah.

• 51:20Ryan Sean Adams?

  What position?

• 51:21David Hoffman?

  Wide receiver and kicker.

• 51:22Ryan Sean Adams?

  Wow. Like, was it fun? Were you good?

• 51:25David Hoffman?

  No. Oh, I was a good kicker. I was a super good kicker. I was called kicker. That's what they called me. That was my name on the team. They called me kicker.

• 51:36David Hoffman?

  It wasn't endearing, let me tell you.

• 51:38Ryan Sean Adams?

  Kicker, get the water for us.

• 51:42Ryan Sean Adams?

  That's awesome. David, punks are still hot, too. More NFT bullishness.

• 51:48David Hoffman?

  A CryptoPunk2924, aka an ape hoodie punk, if you're in the punk world, you know both apes are extremely rare and hoodie is a well sought after property, was sold for $4.4 million. Casual, casual CryptoPunk sale. I will say, like, when I bought my CryptoPunk, it was like, all right, I'm not that much of an NFT pro, but I want to have exposure, so I'll just buy this CryptoPunk because it feels safe. It feels like buying Bitcoin after its second bubble, which is way safer than buying after its first bubble, because you don't know if it's ever gonna come back. So, yeah, now CryptoPunks have the Lindy effect, and so I can't wait for the third bubble of CryptoPunks.

• 52:26Ryan Sean Adams?

  Well, I bet you're, like, this is the kind of headline, straight from the bull market. It almost feels like an anachronism. It almost feels like completely out of place here, right?

• 52:33David Hoffman?

  Yeah, except that 3,300 ETH in the bull market would have been like $20 million, not $4.4 million.

• 52:38Ryan Sean Adams?

  That is true. There's still a lot of ETH, right? And if you're buying for ETH-denominated returns, like CryptoPunks haven't gone down that bad in ETH-denominated terms.

• 52:47David Hoffman?

  There's a small chance that that 3,300 Ether sale was also simultaneously a tax loss harvesting event for the buyer.

• 52:55Ryan Sean Adams?

  Okay, so this might not be as bullish as it appears.

• 52:58David Hoffman?

  No, I'm kidding.

• 52:59Ryan Sean Adams?

  By the way, I love that you have no idea who, what team Tom Brady plays for, but you can tell me about a hooded CryptoPunk and why it's valuable. This is bankless in a nutshell.

• 53:10Ryan Sean Adams?

  What about this? Is this another?

• 53:12David Hoffman?

  Yeah, I saw this tweet. Yeah, so Pablo Paconso dot ETH, great name by the way, retweets the sale of this CryptoPunk and says, "Five years ago, I sold this CryptoPunk for $1,400."

• 53:25Ryan Sean Adams?

  Ouch.

• 53:25David Hoffman?

  Wow.

• 53:26Ryan Sean Adams?

  No.

• 53:27David Hoffman?

  I mean.

• 53:27Ryan Sean Adams?

  Sorry Pablo.

• 53:28David Hoffman?

  Okay.

• 53:29Ryan Sean Adams?

  But he's got a CryptoPunk in his profile, so he's doing okay.

• 53:31David Hoffman?

  He's got a great Punk in his profile, yeah. But like, remember, you can't really hate on when you sell something five years ago. Plus, you don't know. You can't hate on it. But Pablo, that's a fun fact.

• 53:41Ryan Sean Adams?

  Yeah.

• 53:41David Hoffman?

  I hope you feel good about it.

• 53:42Ryan Sean Adams?

  Everyone has mistakes in crypto. Bury those mistakes deep down. Never think about them. That's my strategy for coping. All the things I've missed, David. How many things have you missed? Oh my god. I've missed so many things in crypto.

• 53:52David Hoffman?

  I've missed, I've missed zero things. There's not a single thing that I've missed.

• 53:56Ryan Sean Adams?

  Well, bring that alpha to me, man, because I've missed a lot over the years. But you didn't miss this on Instagram. This is from your Instagram. I think this is a recording. What are we looking at?

• 54:05David Hoffman?

  Yeah, this is one of my friends who, this is the first time I saw this. We reported on NFTs on Instagram a while ago, but it was with very select artists. And so this is the first NFT that I've seen in my own personal Instagram feed, in the wild, yeah. And so it's nice because it's a cool cat, so we're looking at a cool cat here. But you know it's an NFT because these NFTs in Instagram have a little shine to them. They like, they kind of like shine, they gloss over a little bit.

• 54:31Ryan Sean Adams?

  Yeah. Can I see the shine? Is this the gradient you're talking about? Is that the shine?

• 54:34David Hoffman?

  Well, you need to play it because this is a video, so you need to play it. But here, there it is.

• 54:37Ryan Sean Adams?

  Oh, I see it.

• 54:37David Hoffman?

  A little shine, yeah.

• 54:38Ryan Sean Adams?

  A little glimmer.

• 54:39David Hoffman?

  Yeah.

• 54:39Ryan Sean Adams?

  Only NFTs get that.

• 54:41David Hoffman?

  Only NFTs get that. Yes, exactly. That's right. This is a screen cap recording, so we can't do this. But there's a little digital collectible tab in the bottom left of the NFT. And if you tap on that, it tells you what Ethereum address owns it.

• 54:52Ryan Sean Adams?

  No way.

• 54:53David Hoffman?

  What chain it's on, Ethereum, yeah.

• 54:54Ryan Sean Adams?

  Really?

• 54:55David Hoffman?

  And who owns it, yeah.

• 54:56Ryan Sean Adams?

  This is still like, I think, beta launch, so it's not available to everyone?

• 55:01David Hoffman?

  Nope, it's available to everyone, yeah. So I was, I was going to screen record. Record my profile of like you can go down into. Okay, so here's how you do this. Everyone pull out your Instagram and follow along. If you have an Instagram, you go and you go to your profile, the bottom in the bottom right, and then you hit the menu. I'm doing it on my phone so the listeners and viewers can follow along. Your profile and then the top right, the dropdown menu, the menu button, and there is a digital collectibles.

• 55:26Ryan Sean Adams?

  I see it. Oh, my God.

• 55:28David Hoffman?

  It is. It is rolled out to absolutely everyone.

• 55:31Ryan Sean Adams?

  Share digital collectibles with followers and fans. Connect to digital wallet. So I click get started. I hit to tap getting started, connect. Oh, my God.

• 55:40David Hoffman?

  MetaMask.

• 55:41Ryan Sean Adams?

  Dapper, MetaMask, Rainbow.

• 55:43David Hoffman?

  Yeah.

• 55:43Ryan Sean Adams?

  What?

• 55:44David Hoffman?

  How awesome, dude.

• 55:45Ryan Sean Adams?

  This is bear market stuff, man. This is what I was just saying. Corporations are building. This is meta. What? How many billions of users they have? Like two point something?

• 55:54David Hoffman?

  All of them.

• 55:55Ryan Sean Adams?

  They have almost all of the humans at this point in time. I'm literally connecting my MetaMask. And you see this panda behind me?

• 56:03David Hoffman?

  Yeah. Oh, you have it on your MetaMask. I was gonna do this with my CryptoPunk, but my CryptoPunk is not on a hot wallet.

• 56:08Ryan Sean Adams?

  Here's the thing. I'm super private with my Instagram. Like, I have it locked down.

• 56:11David Hoffman?

  Yeah, you don't even have me on there.

• 56:14Ryan Sean Adams?

  I don't. Yeah, I don't.

• 56:16David Hoffman?

  I've noticed.

• 56:17Ryan Sean Adams?

  It's super. It's super locked down.

• 56:20David Hoffman?

  Because it's mine. That's why I didn't put up. That's why I didn't put up my own Instagram account.

• 56:25Ryan Sean Adams?

  Follow David. Everyone follow David.

• 56:27David Hoffman?

  Don't follow me. Don't follow me. I delete it. I have less than 500 followers because I delete everyone.

• 56:32Ryan Sean Adams?

  Well, when are you gonna change that, though? Now you could be an NFT influencer on Instagram.

• 56:37David Hoffman?

  Nope.

• 56:37Ryan Sean Adams?

  Not gonna happen?

• 56:38David Hoffman?

  Nope. Twitter only.

• 56:39Ryan Sean Adams?

  Twitter is for like businesses, crypto. Instagram is for friends. That's just my life. That's the way I decided to do it.

• 56:44David Hoffman?

  My Instagram is specifically for people I have met in real life.

• 56:48Ryan Sean Adams?

  Yeah, there you go.

• 56:49David Hoffman?

  And like the last time I talked about this on Bankless, I got roughly like 300 follows on my Instagram account. I was like, you guys didn't fucking listen, Scary.

• 56:56Ryan Sean Adams?

  No, no, no, no, no. This is. This is the thing with crypto. You tell people not to do the thing and then it makes them more bullish about doing the thing. Don't buy my token.

• 57:06David Hoffman?

  Don't buy my token.

• 57:07Ryan Sean Adams?

  Every time. But you know what's crazy about this? Meanwhile, so we've got one tech giant, which is adding NFTs to their social media profile. Meanwhile, Apple wants to charge a 30% cut on all NFT sales.

• 57:21David Hoffman?

  Shocker.

• 57:22Ryan Sean Adams?

  If there's an app, like say OpenSea, for example, I'm imagining, that you download from the Apple Store, you put that app on your iPhone, they want 30% of all of those sales. Like, that just doesn't work in crypto. What are you guys talking about?

• 57:40David Hoffman?

  That's not gonna do it. The fact that this was even, OpenSea charges 2.5%, Luxray charges 2%. Like, how did we ever become okay with 30%? How were we ever okay with

• 57:54Ryan Sean Adams?

  Your take rate is my opportunity, right? That's the whole thing around crypto. It's like, these margins, these 30% margins can't last, not in Web 3. We'll just bypass Apple, somehow, I suppose.

• 58:07David Hoffman?

  The Solana, well, the Solana phone, that's what this was for.

• 58:09Ryan Sean Adams?

  I guess I don't really know a viable way, aside from using the open internet, right? Rather than app stores to kind of bypass these sorts of fees. But this can't continue. But Apple thinks it can. They think they've got a monopoly on the Web 3 NFT space. 30%?

• 58:25David Hoffman?

  Fine, they're just gonna, they're just gonna foster more and more innovation faster, so.

• 58:30Ryan Sean Adams?

  Have you, have you been following Epic? Like Epic Games?

• 58:33David Hoffman?

  No, I haven't been following it, no.

• 58:35Ryan Sean Adams?

  This is, well, Tim Sweeney has been taking shots at Apple for a long time. There's been some beef between Epic and Apple.

• 58:41David Hoffman?

  I remember, yeah.

• 58:42Ryan Sean Adams?

  This is Tim Sweeney tweet about this 30% NFT charge. "Now, Apple is killing all NFT app businesses it can't tax, crushing another nascent technology that could rival its grotesquely overpriced in-app payment service. Apple must be stopped."

• 58:57Ryan Sean Adams?

  Tim Sweeney says, "Apple must be stopped."

• 58:59David Hoffman?

  Spicy, spicy Tim.

• 59:00Ryan Sean Adams?

  Well, it's hard. I mean, you talk bad about Apple, right? And what do they do? They have to delist your app, deplatform you. Bad to get deplatformed from Apple.

• 59:08David Hoffman?

  Yeah, you don't want that.

• 59:09Ryan Sean Adams?

  Yeah, it's another, uh, another web two company we have to route around in order to make this, uh, make this work, make this happen. Meanwhile, David, what is the Fed doing with their central bank digital currency?

• 59:21David Hoffman?

  I love how the block, this is the block that tweeted this out. They added, "Breaking, breaking. The Fed has decided to not proceed with a digital dollar," says Powell.

• 59:32Ryan Sean Adams?

  Breaking.

• 59:33David Hoffman?

  Which was not exactly breaking news. This has been the meme that we have been laughing about on Bankless the entire time. Federal Reserve Chair Jerome Powell says he will not push forward with a US central bank digital currency. Uh, the, in the coming years, he says, "The coming years are focused on research and building public confidence in CBDCs," which is the same thing that they said last year, which is the same thing that they said the year before.

• 59:56Ryan Sean Adams?

  Meanwhile, China keeps building.

• 59:58David Hoffman?

  Yeah, exactly. I mean, but also they don't even know this yet, but they should be saying, "Thank God for USDC," because that is the CBDC.

• 1:00:08Ryan Sean Adams?

  This is, this is the take, I think, which is then if they're deciding not to do a central bank digital currency, then de facto, they're adopting a ERC20 stablecoin, they're adopting a USDC in something that's bank regulated, and they're turning it over to the private sector because the private sector ain't gonna stop. So it's all fine with me, but, um, I think that's what they're de facto doing is the US will not have a CDBC anytime soon, or its CDBC will effectively be USDC, and we should start thinking about it in those terms. David, Cosmos is revamping its Cosmos hub and the Atom token economics. I haven't read this full paper, but I do know we are having the Cosmos folks on the podcast recording tomorrow.

• 1:00:54Ryan Sean Adams?

  I think that episode's gonna come out in a couple of weeks or so. Uh, so I don't know the details here, but I'm actually pretty excited about what the Cosmos ecosystem has been building lately. Do you have any takes here?

• 1:01:05David Hoffman?

  Yeah, we're recording with Sonny and Zaki from the Cosmos ecosystem. And I talked to Sonny at ETHCC and he gave me the line that the Ethereum and Cosmos visions converge upon the same end game. And so where Ethereum has really prioritized security and, you know, in the community has emphasized ultrasound money. The cool thing about Ethereum and one of the big reasons why I think Ethereum has done so much better as an ecosystem than Cosmos is because we had Ether to focus on as like an intentional focal point. And Cosmos never really had that because they focused on app chains. And so we, as a, as a layer two ecosystem on Ethereum, are now focusing on like layer threes, which are like the equivalent of app chains in Cosmos. But Cosmos has already figured out the app chain. They figured that out forever ago.

• 1:01:49David Hoffman?

  So Ethereum is playing catch up on the app chain world where Cosmos is now playing catch up on the monetary properties of the atom token, shared security model.

• 1:01:58Ryan Sean Adams?

  Yeah.

• 1:01:58David Hoffman?

  And so, uh, really going to be an interesting podcast. I'm really looking forward to that. I don't know much about the economics. I'm going to have to dive into this before we do the podcast.

• 1:02:06Ryan Sean Adams?

  Of Adams.

• 1:02:06David Hoffman?

  Stay tuned. Of Adams, yeah.

• 1:02:08Ryan Sean Adams?

  Yeah, super inflationary, never meant to be money. It's very interesting. I was an old Cosmos staker from way back.

• 1:02:16David Hoffman?

  Yeah, I remember.

• 1:02:17Ryan Sean Adams?

  Yeah, I want to talk to him a little bit about that, but a lot of building going on in this space and these new economics look interesting.

• 1:02:23David Hoffman?

  I will say that I judge a lot of protocols by their names and Ethereum and Ether, oh my God, it's such a good name. Cosmos and Atom can definitely give Ethereum a run for its money.

• 1:02:33Ryan Sean Adams?

  Do you like that?

• 1:02:34David Hoffman?

  Great. I love the names. I love the names.

• 1:02:36Ryan Sean Adams?

  It's Cosmos and the atoms or atomic units? Is this why?

• 1:02:40David Hoffman?

  Yeah, sure. Yeah.

• 1:02:41Ryan Sean Adams?

  Yeah, it's kind of cool. All right, here was something that happened over the weekend. Talk of reversible transactions. Imagine an ERC 20 transaction, David, that you could reverse after the fact. But I thought blockchains were for immutability, not the case. This is the case by Cali dot ETH. Billions in crypto stolen. If we can't stop the thefts, can we reduce the harmful effects? Over recent months, a couple of other Stanford researchers, and I have Stanford as in the university, Nigeria and prototype ERC 20 R slash.

• 1:03:15Ryan Sean Adams?

  721R to support reversible transactions on Ethereum. So an NFT standard and an ERC20 token standard that supports reversibility of transactions. There was a lot of, I guess, back and forth about this because there's a camp that says, like, immutability is part of crypto. What are you guys talking about? Bringing reversibility into our ecosystem, like immutable is the whole point. And there was another take that said, hey, this is just an option. Use it or don't use it. You can do either. Where do you fall on this spectrum?

• 1:03:48David Hoffman?

  I initially was compelled by like, you know, this is open source software Turing complete, we can write whatever code that we want. This is just another tool and a massive tool belt of what we want to do with stuff. So I was initially in the option like, sure, like, whatever, like, people might use this, they might not. I don't really, I would never see a reversible transaction being a token being collateral inside of like AVE or, or Compound or something because you need settlement assurances. But then I've thought about it more and more and more, and Eric Connor helped convince me is that it's just like a Trojan horse for so many bad things. And a reversible transaction belongs in the centralized layer of things. Put reversible transactions where there are central authorities to arbitrate. Reversibility requires arbitration. Arbitration requires centralization.

• 1:04:33David Hoffman?

  And so it doesn't make any sense. It requires humans. So reversibility doesn't, should not be at the bare metal, right? And so be sure anyone can build this, anyone can use it. I don't support it.

• 1:04:48Ryan Sean Adams?

  But you would be upset if all of the tokens from here on out adopted it, for example?

• 1:04:52David Hoffman?

  Oh, my God, that would make it C-Fi. That would make, that would break the whole entire point of Ethereum. That would be terrible.

• 1:04:58Ryan Sean Adams?

  Right.

• 1:04:59David Hoffman?

  Yeah, that's bad.

• 1:05:00Ryan Sean Adams?

  Yeah, so I get the duality of these takes. Like, it's, to me, it's fine to have as an option, but I don't want it to be the de facto option on Ethereum, certainly. We'd have a problem if that was the case. Interesting standard, though. David, what's going on with Zach XBT?

• 1:05:14David Hoffman?

  Yeah, Zach XBT, he is this famous, what would you call him, investigator, I guess.

• 1:05:19Ryan Sean Adams?

  Private detective, almost like a private eye.

• 1:05:22David Hoffman?

  Yeah.

• 1:05:22Ryan Sean Adams?

  But vigilante, he works for himself, right? He's not hired by anyone.

• 1:05:25David Hoffman?

  Exactly, yeah. I would put him shoulder to shoulder with Sam Z's son. Sam Z's son is a white hacker, so when there is an exploit that needs to be patched, Sam Z's on his first. Zach is, not, he doesn't do that, but he like, discloses people that aren't disclosing their things. He's the guy, he's the guy that...

• 1:05:42Ryan Sean Adams?

  He finds out all the dirty little secrets on-chain that people don't want you to see.

• 1:05:46David Hoffman?

  He's the guy that revealed Zero X Sifu to be the Quadringa CX, Jeryl Patton, or John Patton, that guy. So Zach BXB is renowned for showing who is pumping and dumping what. And so Lark Davis, the crypto Lark, is the next person to have been found out as a pumper and dumper.

• 1:06:05Ryan Sean Adams?

  And who is the crypto Lark? Just kind of an influencer, right?

• 1:06:08David Hoffman?

  He's been around since 2017. I remember listening to his YouTube videos in 2017. He's kind of this, just like, unintimidating, white crypto YouTuber dude, who has just a big following and turns out...

• 1:06:22Ryan Sean Adams?

  Friendly looking?

• 1:06:22David Hoffman?

  Friendly looking face, yeah. And turns out, he has more or less explicitly been like pumping and dumping on his followers. So, Zach, another one bites the dust.

• 1:06:32Ryan Sean Adams?

  I think 2019 or 2020, yeah. He invited me on the show. I didn't know him very well, and he was just like, "Come on and talk about Ethereum. You seem to know a lot about it." So I went in and I talked about my bags, David. Ether.

• 1:06:43David Hoffman?

  Yeah.

• 1:06:44Ryan Sean Adams?

  Yeah.

• 1:06:44David Hoffman?

  Ether.

• 1:06:45Ryan Sean Adams?

  And I dumped them on Lark's followers.

• 1:06:48David Hoffman?

  You sell ether?

• 1:06:50Ryan Sean Adams?

  I don't sell ether, actually. I mean, very infrequently. I'm a, I'm a fine collector of ether tokens.

• 1:06:56David Hoffman?

  Fine collector of ether, yeah. See, I think, okay, it's, it's tough. And this is one of the, when I talk about the genesis story of Bankless Ryan, I say like, "Hey, the crypto media world was starved for a trustworthy media institution that's business model isn't dumping..." The bar was extremely low, dude. This was our competition.

• 1:07:16Ryan Sean Adams?

  We don't dump on our followers, that's all. Like, that's all you have to do. Don't be a dick.

• 1:07:21David Hoffman?

  Let's make a, let's make a media institution that, instead of dumping on followers, has ads. So, for all the people that hate on the ads, like, pick your paddles.

• 1:07:32Ryan Sean Adams?

  Yes, we don't. I do think so. I mean, you can go through all of the details of what Zach XPTC uncovered, but it's basically like low-cap tokens, pump them up, shill them near followers, and then dump, make millions of dollars. Right? This is a certain breed of crypto influencers' business model. It is not the bankless business model. I mean, we get paid through premium subscribers and also through advertisers, not by dumping on you. And we're also long-term investors. And I also kind of suck at low-cap coins and like dumpage anyway. But one thing I will say is I think the entire crypto industry, particularly crypto media entities like us,

• 1:08:13Ryan Sean Adams?

  have to do a lot better when it comes to disclosures and transparency. And so-

• 1:08:18David Hoffman?

  Something we're working on, for sure.

• 1:08:19Ryan Sean Adams?

  On the back of some of this stuff from Zach XPT, we've had internal meetings about, okay, how can we like rapidly, how can we drastically increase the transparency of anyone who works on content within bankless and kind of what they're holding? So we're actually looking to roll out a new page with all of kind of the stats and all of our holding, all of our angel investments, everything we have, starting the beginning of next month. So we'll be including that in the link in the YouTube show notes and the podcast show notes for all of our listeners. And I think there are other organizations that do this well, but we also want to like, you know, carry the flag. And because we recognize that it's a problem in the space.

• 1:09:00David Hoffman?

  And if you're asking why haven't we done this sooner, we have, we do have a page that is like this, but we haven't had a website. So when Ryan says we're rolling out a site, we're actually rolling out an entire website as well, unrelated. And because of that website, we have like a landing page for disclosures. We've had our disclosures out for a while. It's just they're not easy to find and easy to get to.

• 1:09:22Ryan Sean Adams?

  And not as much detail as we now have. Look at this detail.

• 1:09:26David Hoffman?

  So it is all getting blown up, glowed up. We list our wallets, our public wallets.

• 1:09:30Ryan Sean Adams?

  Yes.

• 1:09:31David Hoffman?

  Not our dumping wallets.

• 1:09:32Ryan Sean Adams?

  Particularly, David, don't even joke, man. Don't even joke. Hey, Zach XPT, I mean, come look at our account.

• 1:09:40David Hoffman?

  He would find me out in a heartbeat. I'm so bad.

• 1:09:42Ryan Sean Adams?

  I'm too fearful of Zach XPT.

• 1:09:44David Hoffman?

  Now that tornado cash is gone, I can't.

• 1:09:47Ryan Sean Adams?

  It's not gone, it's still there. It's just, you're not allowed to use it.

• 1:09:52Ryan Sean Adams?

  This is cool. In releases this week, Robinhood selects Polygon to launch its Web3 wallet beta. Do you remember when Vlad, the CEO of Robinhood, we had that conversation with him at Permissionless, I believe? And he told us this was coming. Here it is. Now it's based on Polygon, which is pretty cool. And you know, Robinhood has great UX wallets, right? So like, he was talking about the haptic response. Do you remember this?

• 1:10:11David Hoffman?

  Yeah, I remember that.

• 1:10:13Ryan Sean Adams?

  When you press a button, you just feel kind of a vibration.

• 1:10:17David Hoffman?

  Yeah, it bounces back to you.

• 1:10:18Ryan Sean Adams?

  Bounces back to you. Gives you nice pleasure sensations. I don't know what this is, but... Does something to the endorphins. Anyway, I'm looking for a really cool UX wallet. Dave and I are hoping to get on the beta program so we can test this out for you guys too and tell you what we think.

• 1:10:34David Hoffman?

  Yeah. There was always a large number of questions. It's how Robinhood plans on releasing some of their promises, like gas-free trading, etc. So we're starting to get some clarity on that.

• 1:10:44Ryan Sean Adams?

  Yeah, that's good.

• 1:10:45David Hoffman?

  Cool. Safe tokens and Safe DAO are here. This is safe from Nosis Safe. If you have a multi-sig or have had a multi-sig or operated a multi-sig, you might have gotten an airdrop. There's a link in the show notes to go check that out to see if you got some tokens.

• 1:10:59Ryan Sean Adams?

  I think we gotta claim some tokens, David, at some point.

• 1:11:01David Hoffman?

  We do have to claim some tokens.

• 1:11:02Ryan Sean Adams?

  We have a Nosis Safe, don't we?

• 1:11:04David Hoffman?

  Yeah. Also, coming out of OpenSea, excited to share that Optimism is currently live on OpenSea. Really, actually, I think OpenSea's live on Optimism, since Optimism is the actual platform, but semantics.

• 1:11:17David Hoffman?

  So OpenSea and Optimism now working together, so that's pretty cool.

• 1:11:20Ryan Sean Adams?

  Tail wagging the dog there. Sound Protocol, what is this?

• 1:11:24David Hoffman?

  Sound Protocol, sound.xyz aka music NFTs. They are announcing the Sound Protocol. Permissionless base layer, artist-owned and non-upgradable song contracts, permanent and decentralized metadata, custom mint formats, and payments with end-to-end royalties. Cooper Turley's music NFT thesis, slowly but surely playing out.

• 1:11:45Ryan Sean Adams?

  Are you a sound NFT pilled yet, David? A little bit?

• 1:11:48David Hoffman?

  I am music NFT pilled.

• 1:11:50Ryan Sean Adams?

  Music NFT pilled?

• 1:11:51David Hoffman?

  I am music NFT pilled.

• 1:11:52Ryan Sean Adams?

  It could be any sound, though.

• 1:11:54David Hoffman?

  Yeah.

• 1:11:54Ryan Sean Adams?

  I mean, when bankless intra music, NFT. We should do that sometime. This is cool. Circle expands USDC stablecoins to support five new blockchains. So Circle getting USDC everywhere and Cosmos, Near, Optimism and Polkadot this time around.

• 1:12:09David Hoffman?

  And Arbitrum.

• 1:12:10Ryan Sean Adams?

  And Arbitrum. Oh, cool. And they just announced that at their Converge 22 conference, of course, we've been talking about for a while, that conference. David, let's get to raises.

• 1:12:19David Hoffman?

  USDC is not on Arbitrum? Yes, it is. It definitely is. What does that mean?

• 1:12:24Ryan Sean Adams?

  I don't know what that is. I literally own USDC on Arbitrum.

• 1:12:28David Hoffman?

  I own USDC on Arbitrum.

• 1:12:29Ryan Sean Adams?

  I hope it's the right USDC, David.

• 1:12:31David Hoffman?

  Oh, go no.

• 1:12:33Ryan Sean Adams?

  Well, maybe they're doubling down on their support. Maybe it's a different Arbitrum network, right? Like, you know, one of the...

• 1:12:38David Hoffman?

  Arbitrum Nova, yeah.

• 1:12:39Ryan Sean Adams?

  Not Arbitrum Nova or something like this?

• 1:12:41David Hoffman?

  Yeah.

• 1:12:41Ryan Sean Adams?

  What's going on in the world of raises?

• 1:12:43David Hoffman?

  Raises. Coinbase Ventures backed crypto firewall provider Harpy. Harpy, $4.5 million raise. Cool.

• 1:12:51Ryan Sean Adams?

  There we go. Pantera, our friend Dan from Pantera is launching a new fund, potentially a $1.25 billion fund. Couldn't resist these bear market prices. You gotta deploy some more capital. So that's what Pantera looks to be about to do. David, FTX and CZ from Binance, they're both bidding for Voyager. Guess who won?

• 1:13:16David Hoffman?

  Guess who won? And place your bets right now. If you are listening to the podcast, not viewing it, place your bets. Here it goes. Here we goes. Sam Bankman-Fried won.

• 1:13:22Ryan Sean Adams?

  Yep.

• 1:13:23David Hoffman?

  $1.4 billion bid. SBF wins. Kind of make that sense, like the... Yeah, I feel like that was the logical one. So sorry, CZ.

• 1:13:33Ryan Sean Adams?

  Do you know, SBF is kind of like the Morgan... I was gonna say Morgan Freeman. No, not the Morgan Freeman. The JP Morgan of the era and buying up all of these kind of underwater banks and coming out stronger on the other side. I think both CZ and SBF are going to be an absolute force to be reckoned with on the other side of this bear market. By the way, the Celsius token just jumped as SBF said. He is maybe eyeing buying Celsius next as part of his buying spree. So Celsius token owner is excited about that. Not much to be excited about if you're Celsius token owner, but I guess that little

• 1:14:08David Hoffman?

  I also don't know why that that's bullish to begin with.

• 1:14:10Ryan Sean Adams?

  I don't know that it is either. I guess, you know, some bailout is bullish. What else we got?

• 1:14:15David Hoffman?

  Because Celsius token holders, there are no rights. So like Sam could be like, well, we're buying Celsius. I don't give a crap about the sell token holders because they have no investor rights. Like ignore them.

• 1:14:27Ryan Sean Adams?

  David, give him something to be excited about. Okay. They've had a pretty hard year. I think if you're a Celsius token owner.

• 1:14:33David Hoffman?

  Are you a Celsius token holder?

• 1:14:35Ryan Sean Adams?

  I still have funds in Celsius and I think they were giving me Celsius tokens too. But that's the least of my concerns right now. I want my ETH back. Alex, you know, Alex Mashinsky?

• 1:14:45David Hoffman?

  Now you have to ask Sam. Now I have to ask Sam for your ETH.

• 1:14:47Ryan Sean Adams?

  Well, well, I, we've had Sam on the podcast, so maybe I can. It's not his problem though. It's just he's, he's going to buy the assets. He didn't discard all of the liabilities. It's going to be a bankruptcy court's problem.

• 1:15:01Ryan Sean Adams?

  Alex Mashinsky resigned this week, by the way. I can't believe he was still in charge. Yeah, he resigned from Celsius.

• 1:15:07David Hoffman?

  So I just finished a, so remember, remember my, one of my bullish on last week, Ryan? It was the bankless YouTube, like short form, eight to 20 minute long videos. I just finished my video on crypto grifters. Why is, why is crypto full of scams? And I say the word Alex, the name Alex Mashinsky a few times.

• 1:15:28Ryan Sean Adams?

  Yeah, he's one, he got in your top five grift list?

• 1:15:32David Hoffman?

  Yeah, yeah. Top three grifters. Yeah.

• 1:15:34Ryan Sean Adams?

  He'd definitely be in my, well, I could guess the other ones. Do Kwan, the three hours capitals boys?

• 1:15:40David Hoffman?

  Yep.

• 1:15:40Ryan Sean Adams?

  Those are top three?

• 1:15:41David Hoffman?

  Nope. They were not grifters. No, well, because they just took, they, they're not grifters. Cause they, they didn't like take in users deposits or, or.

• 1:15:49Ryan Sean Adams?

  I guess there are levels of grift. I mean, they were super irresponsible, right?

• 1:15:52David Hoffman?

  They're very, very irresponsible, but they were irresponsible with, I guess they were irresponsible with other people's money. But like.

• 1:15:59Ryan Sean Adams?

  What's a grifter anyway? What's a grifter among friends?

• 1:16:02David Hoffman?

  Yeah. Anyways, you got two out of the three, so we'll save the third for the video.

• 1:16:05Ryan Sean Adams?

  There we go. Jobs time. This is our reminder. Even though it's a bear market, there's tons of companies doing tons of hiring because they have a lot of money that they've raised during the bull market. David, should I read a few out? Are you going to dance?

• 1:16:16David Hoffman?

  Please do. I'm going to dance.

• 1:16:17Ryan Sean Adams?

  Uniswap Labs. Hey, they're on here. A developer relations lead. What is that?

• 1:16:23David Hoffman?

  Non-technical, Ryan.

• 1:16:24Ryan Sean Adams?

  It seems non-technical. You're talking to technical people, but it's absolutely non-technical. Senior front-end engineer at Uniswap Labs, senior backend engineer for their trading platform, Uniswap Labs, hiring a lot. Solid World DAO, senior Web3 developer. Ribicon, smart contract engineer. Bankless needs a social lord for socials.

• 1:16:41David Hoffman?

  Non-technical.

• 1:16:42Ryan Sean Adams?

  Molecule needs a head of engineering. Bankless also needs a growth marketer.

• 1:16:46David Hoffman?

  Non-technical.

• 1:16:47Ryan Sean Adams?

  Economia needs a lead designer. Silent Protocol, a full-stack smart contract engineer. Get your job in crypto during the bear run. The way you do it is by logging on to bankless.pallet.com. Put your email address in. You get these alerts via email. That is the way to do it. David, what do we got coming up next?

• 1:17:05David Hoffman?

  Questions from the nation. Got a nice spread of questions and also the takes of the week. The five horsemen of DeFi, Mr. Wonderful's investment strategy, aka Kevin O'Leary, which I thoroughly disagree with, so we'll talk about that. And why you don't cut corners in crypto, as well as what Ryan and I are bullish on. So all of that and more, right after we talk to some of these fantastic sponsors that make this show possible, and so we don't have to dump on you. The Brave browser is the user-first browser for the Web3 internet with over 60 million monthly active users. And inside the Brave browser, you'll find the Brave Wallet, the secure, multi-chain crypto wallet built right into the browser. Web3 is freedom from big tech and Wall Street. More control and better privacy. But there's a weak point

• 1:17:47David Hoffman?

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• 1:18:32David Hoffman?

  DeFi protocols continue to see increased liquidity and usage. You can now bridge straight into Arbitrum for more than 10 different exchanges, including Finance, FTX, Huobi, and Crypto.com. Once on Arbitrum, you'll enjoy fast transactions with cheap fees, allowing you to explore new frontiers of the crypto universe. New to Arbitrum, for a limited time, you can get Arbitrum NFTs designed by the famous artists Ratwell and Sugoi for joining the Arbitrum Odyssey. The Odyssey is an eight-week-long event where you complete on-chain activities and receive a free NFT as a reward. Find out more by visiting the Discord at discord.gg/Arbitrum. You can also bridge your assets to Arbitrum at bridge.arbitrum.io and access all of Arbitrum's apps at portal.arbitrum-one in order to experience DeFi and NFTs the way it was always meant to be:

• 1:19:15David Hoffman?

  fast, cheap, secure, and fiction-free.

• 1:19:18Ryan Sean Adams?

  Got a question for the nation? Here's some questions we have coming up. As always, you can follow Bankless HQ on Twitter. Every Wednesday, we tweet this out, a question from the nation. You can put your reply here, and we may read it on the rollup. This is how we interact with the community. Here's the first one from Wesley Tate is asking this question. I'm gonna tee you up for this, David. "What are some examples of Layer 3 apps that you guys can envision for the future of ZK Sync or other ZK rollups? And do you have any thoughts in whether or not optimistic rollups will successfully reach Layer 3 without sacrificing ease of use, cost, or most importantly, security?" I can hear in some people's reading of this question, like, another question, which is, "Layer 3? What you guys just been talking about Layer 2?

• 1:20:03Ryan Sean Adams?

  What is Layer 3? Is this some new marketing mumbo jumbo term? What is Layer 3?" I could tell Wesley Tate listens to the Bankless Podcast because that came up in our earlier State of Nation episode with ZK Sync. But tell us really quickly what Layer 3 is, and then attempt to answer Wes's question here.

• 1:20:21David Hoffman?

  Yeah, so I mentioned earlier about the app chain model of Cosmos versus the Layer 3s on Ethereum. So we have Layer 2s, we have generalized Layer 2s, which kind of feel and act like Ethereum itself. It's a generalized platform. You can put any code on it, you can deploy anything. But even those things can actually approach some level of saturation. Or congestion. Now, the difference of Ethereum being congested is like the transaction fees go from $5 to $100. A layer two gets congested and it goes from one penny to maybe a dollar. But even a dollar is like too high of a transaction fee to pay for like so many use cases. So many use cases require like .1 cent transactions or less to really be unlocked.

• 1:21:07David Hoffman?

  And that and that is where we go from, you know, a lot of scale to infinite scale. And layer threes is where we get that done. So not only are layer threes the ultra, super, super cheap, super fast layers, but they're also the more expressive and like customizable and specific layers. Going back, so when DYDX Ryan left Ethereum to go to the Cosmos ecosystem and become an app-specific chain, that was in contrast to what it could have done, which is become a layer three on Ethereum, either on top of like CK Sync or Starkware or something. But the layer three ecosystem just wasn't ready yet. But it's really starting to be, especially with CK Sync mainnet coming right around the corner.

• 1:21:50David Hoffman?

  And so what are some examples of layer three apps that we can envision for the future of CK Sync or other ZK rollups? Let's think about things that are going to be crypto-enabled, but also want to be domiciled of one specific use case. And I could see like, if we have like a big AAA game, for example, World of Warcraft, where Ryan and I use this idea of just like, we kill a boss and like a sword falls on the ground and that sword is an NFT. And if you pick it up, that NFT goes into your wallet. First, that NFT needs to get minted when the boss gets killed. Then it needs to get transferred into your wallet when you pick it up. Then you have a taxable event.

• 1:22:27David Hoffman?

  But like we need these cheap, free transactions to really make this possible. But also at the same time, like say this is World of Warcraft or Blizzard. Blizzard doesn't want to share a chain with like a competitor or another games or anyone else. They want full control over what that chain looks like. And by the way, if they want irreversible transactions, that's the way they could put it in. And so layer threes are going to be like one chain for one thing at a time. Reddit is on top of Arbitrum, using Arbitrum's AnyTrust model, which is actually a layer two, an optimistic rollups strategy of going over this app chain model. And I could actually even see like a specific subreddit, which somehow becomes really, really crypto-enabled. Shout out to Ares Finance, this would probably be the first

• 1:23:11David Hoffman?

  one, where that activity, those rewards, upvotes, updues, like wards, whatever, all of those things become like economic assets on a chain. Maybe they're all worth pennies, but when the transaction fee is .0001 pennies and your upvote is worth a penny, that's economic activity. And so those are the two ones that come to mind. But it's really like any sort of like coordinated community on the internet could find a layer three. And there's a lot of, there's a lot of communities on the internet.

• 1:23:41Ryan Sean Adams?

  I think one way to think about layer threes is chains on chains on chains, right? So Ethereum being the base chain, the layer one, and then ZK EVM, for example, being a layer two, and then you can actually stack chains, sovereign chains, on top of the ZK EVM, and that becomes layer three. And these, as you said, can be app-specific, but they get to retain their full sovereignty. So DYDX is a great example of this. I think there could be other DeFi applications, maybe big DeFi applications that adopt this as a strategy. I don't know if you saw the article this week, David, from Dan Elitzer, but he talks about-

• 1:24:15David Hoffman?

  Oh, Dan Elitzer wrote something?

• 1:24:16Ryan Sean Adams?

  Yeah, he, basically, the title of the article, I can't, I'm paraphrasing here, is "But Uniswap will have a chain," is the title of the article.

• 1:24:23David Hoffman?

  Oh, yeah. He gave out that tweet forever ago. We included it in the weekly rollup. And then, and then, and then I went over to Uniswap headquarters in Soho, and I was like, "Yo Hayden, what's going on?"

• 1:24:36Ryan Sean Adams?

  So like, I, you know, I mean, Dan Elitzer is making the case that Uniswap will need its own chain at one point in time. And you could imagine that, being a sovereign chain of some sort, maybe a layer three of some sort. So these are the types of applications that we might see in the, in the higher layers of the stack. Let's go to the next question.

• 1:24:54David Hoffman?

  Great question.

• 1:24:55Ryan Sean Adams?

  Yeah. "When talking about Luna," this is from discovercrypto.eth, "When talking about Luna, we often use phrases like '50 billion deleted,' I think that's a verbatim David Hoffman quote."

• 1:25:05David Hoffman?

  Yeah, that's, that's a, that's a me.

• 1:25:07Ryan Sean Adams?

  "What does this really mean? Was the money actually burned, or is the money still existing just in the pockets of early Luna adopters and/or shorters? What are we talking about there?" It's like, I think there's like 50 billion deleted. What do we actually mean? It's like- Where does that come from?

• 1:25:23David Hoffman?

  Yeah, so this is, it's a facetious, kind of sadly funny, some funny sad way of saying capital destruction. There's capital creation and then there's capital destruction. So say, say like somebody makes a, makes a company, five, 10 people all start working on this startup. And then they go public and then all of a sudden there's equity on the public market and that company has a market cap valuation of $500 million. $500 million just got created out of thin air because the market values whatever startup they had at $500 million. So that was a capital creation event of $500 million.

• 1:26:02David Hoffman?

  Now, when economies are good and they have stable foundations and people are innovating and exploring and building, capital is created. Yet, when economies are bad, when we've invested, we've made bad investments, interest rates have to go up, capital gets destroyed. And so capital is largely a story that humans tell each other. And this is why we emphasize like hard assets sometimes, the dollar, the gold, base layer assets that things collapse back down into when times are bad. And then there's risk on assets, which where people buy when times are good. But capital is just a story that we tell each other as to what this thing is worth.

• 1:26:40David Hoffman?

  So we can't sell the entire market cap of Apple and Amazon and like Netflix, like the Apple market cap is like $3 trillion. If everyone sold all of their Apple stock all at once, there would not be a transfer of $3 trillion from buyers to sellers, right? It would destroy a ton of capital because Apple stock would basically go to zero. Because there's not enough buying, like there's a pretty, Apple's super illiquid, but it's not $3 trillion worth of liquidity. And so when we talk about Luna and use a phrase $50 billion deleted, it's because the bid for Luna evaporated. And so one day Luna was worth $50 billion.

• 1:27:23David Hoffman?

  And then the buying pressure for that Luna asset went to zero. Therefore, $50 billion of capital, which existed because there was once enough buying, there was enough of a story to buy Luna. Once that story ran out, once the bid evaporated, all of a sudden the $50 billion that people had on their net worth balance sheet turned into zero. And that is what I mean when I say $50 billion was deleted.

• 1:27:45Ryan Sean Adams?

  Yeah, I think that's a good, I think that's a good way to think about it. It's like the story was deleted essentially, right? And like, it's important. I think, I like that you brought liquidity into the picture there because we have to remember, what, how is a market cap determined? Well, you just take the most recent price, someone bought the thing and multiply that by the existing supply, right? That's it. That's all the market cap is. And you have to look at kind of like liquidity of if, you know, how many, how much is available on the market to actually sell or like actually buy? And how resilient is that market cap to sell pressure? And Luna was not very resilient to sell pressure.

• 1:28:27Ryan Sean Adams?

  Something like gold has really good liquidity. Something like the US dollar has a lot of liquidity. There's a lot of trading volume every single day on the dollar. It's a much stronger asset. And I do think, you remember we did that episode way at the beginning of Bankless about liquidity? And how liquidity is actually a pretty good definition of, of money? Because that's kind of the, I guess it shows the resilience of money.

• 1:28:51David Hoffman?

  Assurances, that you actually have the asset.

• 1:28:53Ryan Sean Adams?

  Yeah, exactly. And that it's priced for what, what, you know, you think it will be priced. Let's, let's go to this question from Sean Gill 23. Will we ever see high APR liquidity pools like DeFi Summer 2021? Can we go back to the good old days, David?

• 1:29:09David Hoffman?

  Yes and no. Mostly no. I think the high liquidity pools of DeFi Summer were the phenomenon of the bull market. In the same way, like we don't, we don't really see ICOs anymore, but we do see token creation events. I don't see, we're gonna, we're not gonna see high liquidity pool, pool twos of DeFi Summer. I think that was the high watermark. We will see high yields. We will see yields return some way, somehow. It won't be as big or grandiose or risky as we saw in DeFi Summer. It will return. It won't be that crazy. It'll be much more sustainable and much more pragmatic.

• 1:29:46Ryan Sean Adams?

  I think particularly in the frontier, right? That'll move to like the frontier, to layer twos, to new DeFi protocols, to risk your things. There is like a risk of return trade off here where you see the higher APYs. They're probably going to be more risky. And so keep that in mind as well. All right, David, let's get to some takes. Here's one for me. Why don't you read it?

• 1:30:04David Hoffman?

  Ryan Schott Adams says, "The US government literally sending our crypto developers into hiding right now. Imagine if we sent our internet entrepreneurs into hiding in the 90s. I guess we're happy to let China fill the vacuum while we regulate the open internet out of existence." And Ryan, you are retweeting an individual under the Twitter handle "OneWayFunction", who says, "I've removed all of my crypto-related code I've written from GitHub, about seven years' worth of contributions to the space, and will no longer be contributing code to the space under my real name. All future code contributions will happen via a pseudonym." Oof.

• 1:30:38Ryan Sean Adams?

  David, I just wrote this tweet out of pure frustration. We are literally, I'm angry at the US, I'm angry at our regulators. We are literally sending our crypto internet entrepreneurs into hiding in America. It's what we're doing. I can no longer, imagine this, imagine the early 1990s, we set Mark Andreessen into hiding because he was trying to hack on Netscape, and he had a vision for this Netscape Navigator browser, and there was some kind of regulation against, I don't know, encryption technology. And we said that was illegal in the US. Andreessen had to go into hiding, become an anonymous developer in order to do it, had to maybe move to a different country or deploy this stuff. Like, that's what's at stake here.

• 1:31:23Ryan Sean Adams?

  And I'm angry that it seems like inaction by legislators and reaction by regulators is making this happen in the US. We are losing a generation of crypto entrepreneurs. It's maddening, it's frustrating, it's completely unnecessary. I go back to Commissioner Sommer from the CFTC, her line from her dissent, "It didn't have to be like this. It doesn't have to be like this. This is so stupid. We're shooting ourselves in the foot. Crypto's gonna be fine. I don't know if America is, if it continues to persist in trying to regulate itself out of innovation and insist its population live in a financial prison."

• 1:32:08Ryan Sean Adams?

  Done rant, David. What's next?

• 1:32:10David Hoffman?

  Thank you, thank you. 0xTuba says, "I would say that these are the five horsemen of DeFi. I don't think any other protocol comes close." And it's a screenshot of MakerDAO, Lido, Curve, AVE, Uniswap. 0xTuba is saying, "These are the five CHAs of DeFi, the five DeFi apps that aren't going anywhere, that are probably relatively low-risk bets," is what 0xTuba is saying. Would you agree with these five?

• 1:32:35Ryan Sean Adams?

  I like this list a lot, actually.

• 1:32:37David Hoffman?

  Yeah?

• 1:32:37Ryan Sean Adams?

  Yeah.

• 1:32:38David Hoffman?

  I think people are gonna take offense to Lido being in there, but it's hard to argue with. They have a lot of ETH in their contracts.

• 1:32:44Ryan Sean Adams?

  I certainly like Maker, Curve, AVE, and Uniswap. And what I'll note is, this is all very like, class of last bear market. This is very class of 2019, 2020. Do you see Plenya had to take this week? Which is like, hey, all of the innovation actually happened in 2019, or 2018 and 2019. And not a lot has happened after that, in terms of like, apps that we've built that are valuable and persistent. I mean, you could point to NFTs, but beyond that, I mean, what else have we built?

• 1:33:15David Hoffman?

  I mean, I think that answer will come out as more and more DeFi 2.0 apps do make it through the bear market. Not all will. But I'm reminded of one of my favorite Vance Spencer tweets saying, "Stop asking for new narratives. We are 1% of the way through the current narratives." Like, we still like-

• 1:33:35Ryan Sean Adams?

  This is enough. Uniswap is enough.

• 1:33:37David Hoffman?

  You're like, being able to mint your own token and put it on Uniswap instantaneously-

• 1:33:40Ryan Sean Adams?

  Incredible.

• 1:33:40David Hoffman?

  -is huge. Like, don't forget about how massive that is.

• 1:33:44Ryan Sean Adams?

  Yeah, don't fade the OG DeFi protocols, that's for sure.

• 1:33:48David Hoffman?

  Kevin O'Leary says, "My investment strategy for crypto is the same I've learned from stocks." In all caps, "Diversify. I own positions in 32 different coins and tokens." Ryan, what do you think about this tweet?

• 1:34:01Ryan Sean Adams?

  I think that's the opposite of what I do. I do not diversify. I mean, I think, personally, I think this is terrible advice. No disrespect to Mr. Wonderful.

• 1:34:12David Hoffman?

  That's pretty bad advice.

• 1:34:13Ryan Sean Adams?

  It seems like you're just random, like, you could find yourself randomly shotgunning into a bunch of different tokens that are actually highly correlated or basically the same thing, and calling that diversification? That's not really diversification, in my mind. But what's your take on it?

• 1:34:30David Hoffman?

  My take on this is that

• 1:34:31Ryan Sean Adams?

  Did you reply by the way?

• 1:34:33David Hoffman?

  No, I quote tweeted him.

• 1:34:34Ryan Sean Adams?

  Oh, you quote tweeted. Okay, here it is. Can I read it?

• 1:34:37David Hoffman?

  Sure.

• 1:34:37Ryan Sean Adams?

  Guys, this is David's take. ETH is a diversified index. It's an index of the aggregate tokens and economic activity on top of Ethereum where 90% of DeFi is located. ETH is diversification. Phew. Tell us what you mean.

• 1:34:50David Hoffman?

  So many, I don't, maybe there are 30 tokens out there that are quality enough. And maybe Kevin O'Leary has like a very beautifully diversified portfolio.

• 1:35:00Ryan Sean Adams?

  He could.

• 1:35:00David Hoffman?

  I just, I think, I think over two thirds of his tokens are going to go to zero over the long term, just by the nature of tokens. And the cool thing is with tokens on Ethereum and EIP1559, Ether gets the benefit of that. So every token that comes, attempts and then dies, that token went to zero, but it burnt some Ether along the way. And so this is why Ether is such a nice asset. Even in bull markets, when there are all these PonZs and all these stupid tokens getting minted and all these tokens are going to zero, it's burning Ether along the way. And then there's also the tokens that will work. Maker, Uni, Ave, Compound, Curve. Those tokens are good tokens to have, so maybe diversify amongst those. But even those tokens also add to the aggregate economic activity on Ethereum.

• 1:35:46David Hoffman?

  And so Ether, the asset, as the index of the aggregate Ethereum economy, nothing better will do an awesome job of representing the Ethereum economy as a whole than Ether the asset. And Ethereum economy is where like 95% plus of all NFT activity is. 95% plus activity of where all DeFi is. And so Ether is a beautiful index of some of the most alive parts of the whole entire crypto world. And so the whole like pulling in diversification, even, even the S and P isn't actually a very good diversification tool. So you have to diversify amongst that. But this is something that like older boomer investors don't understand about crypto. And that's why you can't just take stock strategies and apply them to crypto. It doesn't work.

• 1:36:31Ryan Sean Adams?

  I feel like you're about to dump on us, David. Are you about to dump all your ETH on us?

• 1:36:34David Hoffman?

  Right after that. Because I'm the person that can move markets of ETH, Jesus.

• 1:36:40Ryan Sean Adams?

  Do you know what I don't hate, though? I actually don't hate, like, you know, the Cryptex approach? Which is just a straight index of the top 30 by, or top X, I can't remember. Top X, let's call it 30, by market cap cryptocurrencies.

• 1:36:52David Hoffman?

  It's the whole market cap.

• 1:36:53Ryan Sean Adams?

  The whole market cap?

• 1:36:54David Hoffman?

  It's the whole market cap.

• 1:36:54Ryan Sean Adams?

  Okay, the whole market cap. I do not hate that at all.

• 1:36:57David Hoffman?

  That's similar.

• 1:36:58Ryan Sean Adams?

  If you're talking about-

• 1:36:58David Hoffman?

  That's great, that's great.

• 1:36:59Ryan Sean Adams?

  If you're talking about diversification, because I agree with you about ETH, and of course, we're like, you know, perma-bullish ETH. What that doesn't capture, though, is like, growth of BNB, for example, outside, growth of Cosmos outside of- It doesn't capture growth outside other ecosystems. You could buy the entire crypto market cap and you'd get all of that. Now, that's like, that's definitionally perfect diversification. Rather than go, like, rando pick 30 coins, you're bullish on and call that diversification. I think people get into trouble that way, but maybe not Mr. Wonderful.

• 1:37:29David Hoffman?

  I'd love to see Kevin's 32 coins, because I would probably make fun of them.

• 1:37:34Ryan Sean Adams?

  Well, let's, David's portfolio against Kevin's portfolio, throw it down. You guys should make a, you know, Warren Buffett-style bet. Let's go here. "In almost all cases, it's a mistake to try and speed up adoption by compromising on crypto-centric product design." That is Punk4156 saying this. What does he mean?

• 1:37:52David Hoffman?

  He's saying, "Don't cut corners." And so, compromising on crypto-centric product design, I would call this what Luna did. I would call this what Wonderland did. There are, like, certain properties or ethos of crypto that you can ignore if you build a DeFi project. And then, as that DeFi project is stress-tested, it accidentally becomes a Ponzi scheme. Whether you're intending it to be that or not. And so, the call to action here is, build something that doesn't cut corners and is crypto-centric. And this is also a topic in my Grifters video that'll come out next week.

• 1:38:27Ryan Sean Adams?

  Do you know what's an interesting rule of thumb? I wonder how well this applies, is like, don't buy anything that was built during the bull market.

• 1:38:34David Hoffman?

  Yeah.

• 1:38:35Ryan Sean Adams?

  Because you can't really trust it.

• 1:38:38David Hoffman?

  Where you don't know.

• 1:38:39Ryan Sean Adams?

  You don't have the signal.

• 1:38:40David Hoffman?

  It needs to weather the downside, yeah.

• 1:38:42Ryan Sean Adams?

  Yeah, buy the thing that was built during the last bear market and survived. Anyway, all right, David, what are you bullish on this week, my friend?

• 1:38:51David Hoffman?

  Ryan, I'm bullish on New York.

• 1:38:53Ryan Sean Adams?

  The city?

• 1:38:54David Hoffman?

  I've been having a great time, man. Yeah, I don't really know much about New York, the state, but New York, the city, has been amazing. It has fulfilled all of my hopes and dreams after moving here. So this is my call to action for people who are curious about going full-time crypto society, not just crypto work. If you want to have the maximum exposure to the crypto industry, you gotta move to New York. It is the best. I am having a fantastic time.

• 1:39:20Ryan Sean Adams?

  Sponsored by the New York Tourism Bureau, so David doesn't have to dump his ETH on you.

• 1:39:27Ryan Sean Adams?

  That's awesome, man.

• 1:39:27David Hoffman?

  This is a burning joke.

• 1:39:29Ryan Sean Adams?

  You've lived in some great places, though. Like, you've lived in, you know, Seattle, that's a great place, nice place. You've also, San Diego, people move from all over the, like, country to get to San Diego. And you, like, New York, and it's because of the people, because it ate the weather, my friend.

• 1:39:44David Hoffman?

  Yeah, well, the weather's not so bad, but it's definitely the people. The people that are, Williamsburg specifically, where all the crypto people are, is, it's so awesome just to have everyone around. And there's something just magical about the crypto people that want to be around other crypto people and talk crypto. The people here, and New York specifically attracts very interesting people. And then there's crypto side of New York, that, you know, you add another layer of crypto interestingness on top of that. And it's just a fun time, man. I've been having a great time here.

• 1:40:14Ryan Sean Adams?

  One day, I'll take the northbound train, come up, see you, one day.

• 1:40:17David Hoffman?

  Oh, yeah.

• 1:40:17Ryan Sean Adams?

  We'll do that. I'll am track it up. Definitely.

• 1:40:21David Hoffman?

  All right, Ryan, what are you bullish on?

• 1:40:22Ryan Sean Adams?

  ZK Sync, my friend. The ZK EVM, it was a great episode that we did, but just in general, ZK technology. It was really cool. I mean, coming off the podcast with Vitalik, where he said a few things. He said, "ZK is as fundamentally important as blockchains themselves." ZK technology, ZK cryptography, as fundamentally important as blockchains. He said, "They plan to, in the future, Ethereum roadmap plans to ZK-snarkify the EVM." I don't fully even know what that means, even after an episode with Vitalik. I feel like we need a deep dive, like, title of the episode, if anyone downloads it. ZK-snarkifying the EVM, like, just that, because I want to learn?

• 1:41:04Ryan Sean Adams?

  So that's cool. But then also, he said, I'm surprised at the progress of the ZK EVM. And now in less than 30 days, we're going to have the first ZK EVM on mainnet. Now, it won't be accessible to users, but like, I was mentally, probably two years ago, thinking that ZK EVMs were five years out, if they even happened.

• 1:41:26David Hoffman?

  The whole industry was.

• 1:41:27Ryan Sean Adams?

  I was kind of preparing myself to just say, oh, this is gonna be like another Plasma thing, gonna be like a state channel thing. They'll get far enough along the design and just, something won't work and they'll have to pivot. And yet, here we are. So that's what I'm really excited about. This has been called the Holy Grail. I mean, you have to launch the thing and kick the tires and actually test it before we know for sure. But I think it's the most exciting thing happening in crypto right now, like in the post-merge world. What's next? ZK EVMs are what's next.

• 1:41:58David Hoffman?

  Yeah, I can't emphasize how awesome that State of the Nation was this week with Steve from ZK Sync. It was definitely on the longer side for State of the Nation, but it was just so good. It's so good. The YouTube comments loved it.

• 1:42:13Ryan Sean Adams?

  That's awesome.

• 1:42:13David Hoffman?

  This is Ryan and David dumping on you because we are advisors to ZK Sync, so disclaimer there.

• 1:42:18Ryan Sean Adams?

  That's true. We are advisors to ZK Sync. And you'll find that in the advisor page. But that's actually not why I'm excited about it. I don't know if anyone believes that. I'm like, I'm here for the tech, bro. Okay? ZK EVMs. All right. What's the meme of the week, David?

• 1:42:32David Hoffman?

  Meme of the week, here we go. This is Trustless State and Ryan Chud Adams on Trustless State. When Ether is getting burned more than it's issued. I actually don't know where this meme is, but I think this is two people, what, two people.

• 1:42:46Ryan Sean Adams?

  These are professional, these are sport, these people play sports. I could tell this.

• 1:42:49David Hoffman?

  They play sports. They definitely play sports. It looks like the Olympic team, but the Olympics are not going on. Yeah, maybe it's soccer, but the guy has a Europe shirt. Anyways, it's two dudes who are definitely playing sports, watching something happening, and they are just holding hands, looking like, looking on the edge of tears.

• 1:43:03Ryan Sean Adams?

  They're, they're just broken at the, just the feeling of euphoria. That was my exact face. That guy on the right is my exact face when.

• 1:43:11David Hoffman?

  Wait, so are you the guy on the right?

• 1:43:14Ryan Sean Adams?

  I don't know.

• 1:43:14Speaker 02

  Is that, is that how you identify? Cause I did identify myself as the guy on the left.

• 1:43:18Ryan Sean Adams?

  Oh, wow. There you go. Yeah, I'm, I'm the guy on the right. My, my face contorts in that way when I'm very emotional. Like, that's definitely me. You get, you see the hair, it's a little patchy, you know? Like, that's me. I'm the guy on the right, for sure.

• 1:43:30Speaker 02

  Oh, maybe it's the hair. Yeah, I have the hair on the guy on the left. Yeah, that's right. It's the hair that did it.

• 1:43:34Ryan Sean Adams?

  It's accurate, right? People, people would have said it. I may as well claimed it.

• 1:43:39Ryan Sean Adams?

  All right, guys, risks and disclaimers, of course. Got to tell you once again.

• 1:43:42Speaker 02

  Wait, no, first.

• 1:43:43Ryan Sean Adams?

  No?

• 1:43:43Speaker 02

  We have a fantastic moment of Zen. Coming up after Ryan gives, it's one of my favorite moment of Zen's. It's, it's a interview on Capitol Hill of bankers and Congress. And then it also cuts to, where was that movie? The Big Short as well. So you know it's good. So pay attention to that cut, otherwise you'll, you'll get confused. But first, Ryan's going to read you some disclaimers.

• 1:44:04Ryan Sean Adams?

  None of this has been financial advice. Eth is risky, so is Bitcoin, so is DeFi. It always is. You definitely 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.

• 1:44:18Speaker 03

  The gentleman from Indiana, Mr. Hollingsworth, is now recognized for five minutes.

• 1:44:23Speaker 02

  Well, good afternoon. I'm excited to be here with each of you. Before I get started on my questions, Mr. Moynihan, I wanted to let you know, Saruthi, raise your hand, Saruthi. She has been my team member for a couple of years now, but on Monday, she becomes a Bank of America team member, about which she is very, very excited. So I hope you'll take good care of her and know and recognize the talent that she has shown already in our office. I'm sure she'll do the same at Bank of America.

• 1:44:47Speaker 04

  We will do that, and her father already works for us, so he'll take care of it. You should have called us.

• 1:44:54Speaker 02

  Well, good, well, I appreciate the opportunity to chat about some of these issues today. What I'm really interested in is the state of the economy.

• 1:45:02Speaker 02

  How are you floating your resume to big banks? I mean, you're supposed to be the ones, you know, policing the big banks.

• 1:45:07Speaker 05

  Grow up, Jamie.

• 1:45:08Speaker 02

  There must be some kind of law against working for a financial institution right after you've been working in financial regulation, right?

• 1:45:15Speaker 05

  No. No.

• 1:45:19Speaker 05

  Hey! Doggy!

• 1:45:22Speaker 06

  Hey! Come over here! What are you doing at Caesar's? He's a Goldman. Yeah.

• 1:45:28Speaker 04

  Her father already works for us, so he'll take care of it. You should have called us.

• 1:45:33David Hoffman?

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

• 1:46:18David Hoffman?

  fantastic content. Thanks everyone for watching and being on the journey as we build out the Bankless Nation.