ROLLUP: David Sold His ETH | EF Exodus | Hyperliquid’s Breakout | Stagflation Fears

Summary

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Bankless ROLLUP: David Sold His ETH | EF Exodus | Hyperliquid’s Breakout | Stagflation Fears

Date: May 22, 2026
Hosts: Ryan (A), David (B)
Main Theme: A shifting landscape in crypto, marked by an Ethereum Foundation (EF) talent exodus, new on-chain innovations, macroeconomic headwinds, and—most notably—David selling his ETH for the first time ever.

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1. Overview

This episode captures a reflective, disruptive moment in crypto. Bankless host David has sold all his ETH, sparking deep conversation about Ethereum’s trajectory and the crypto market’s direction. The duo unpacks stagflation fears, a possible historic IPO season for tech, emergent DeFi products, and questions the future of Ethereum Foundation after unprecedented talent departures.

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2. Key Discussion Points & Insights

A. Macro Bear Case & Stagflation Worries

Timestamps: [03:28] – [12:38]

• Stagflation Risks:
  • Rising CPI inflation (April print at 3.8%), bond yields hitting highs unseen since 2008 ([04:11]), oil prices pushing upward ($104 Brent; risk of breaking $120–$140).
  • Credit card delinquencies highest since 2010, indicating broad economic stress.
  • Markets pricing in “no rate cuts” in 2026 ([04:25]).
  • Ongoing Strait of Hormuz closure and tense Iran–US geopolitics could drive oil, inflation, and market pain.
• Historical Parallels:
  • 1970s-style “double top” inflation a possibility—chart overlays between that era and today are “concerningly similar” ([08:30]).
  • Consumer expectations fueling inflation: “Consumer expectations can almost cause inflation to rise.” – Ryan ([09:01])
• Crypto Response:
  • Short-term tough for risk assets (incl. crypto); long-term, “scarce assets, alternatives to the fiat system have got to outperform…this is an inflationary money printing decade.” – Ryan ([10:08])

Quote:
“Do you imagine 10% inflation? … The only answer has been the long term thesis of crypto… You gotta print the money to get out of this.” – Ryan ([08:55])

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B. Bullish Pockets: Hyperliquid, Zcash, Venice

Timestamps: [15:05] – [19:16], [21:27] – [32:15]

• Market Standouts Despite Macro Weakness:

  • Hyperliquid:
    • All-time high ($61.50, up 47% in 30 days); surging due to real-world asset perps, especially pre-IPO markets for SpaceX, OpenAI ([15:19], [23:49]).
    • FT valuation surpasses Solana’s despite big unlocks yet to come ([15:38]).
    • Real-world asset trading: Oil, S&P 500, gold, pre-IPO stocks now >60% of volume.
    • “Hyperliquid is not a crypto app. It’s a super app…targeting the $600 trillion global asset market.” – Matt Hogan, quoted by Ryan ([21:27])
    • Bitwise Hyperliquid ETF: “They’re taking 10% of the fees from that ETF and they are just buying Hype with it and holding it on the Bitwise balance sheet.” – David ([22:02])
  • Zcash:
    • Up 25% on the week; privacy trend is “in.” Railgun, Vail also up.
    • “Zcash is a fork of the Bitcoin code base launched in 2016. It was developed by taking the original Bitcoin core software and altering it to introduce enhanced privacy features.” – David ([18:19])
  • Venice (VVV):
    • Private AI inference dApp on Base; also reached new ATHs, riding the AI and privacy narratives.

• General Theme:

  • Privacy is back; “Privacy is in, dude. Privacy is in.” – David ([19:00])

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C. Pre-IPO Trading Innovation & Historic IPO Season

Timestamps: [24:19] – [32:15]

• Pre-IPO Markets:
  • Hyperliquid, Lighter offer pre-IPO perps; SpaceX, OpenAI in focus; provides unique price discovery for private companies before listing.
  • Pre-IPO perps rely on market-set reference prices before spot exists; after IPO, reference swaps to live spot prices ([26:31]).
  • TradFi attention turning to crypto-based price discovery: “It’s actually incredible and I think Tradfi is probably looking at this and being like, oh shoot, we should have thought of that.” – Ryan ([29:39])
• Upcoming Tech IPOs:
  • SpaceX’s S-1 registration filed; valued $1.7–$1.8T on Hyperliquid.
  • OpenAI, Anthropic plus others rumored next.
  • SEC rumored to release a framework for tokenized/digital securities—major change from Gensler era: “It’s much more embracing, almost encouraging…free market discovery.” – Ryan ([32:15])

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D. Vaults and DeFi Professionalization

Timestamps: [32:56] – [37:50]

• Wintermute Launches Vaults:
  • Rolling out two risk-tranch vaults on Morpho (“Prime” and “Select”).
  • Vault curation by pros: Bitwise also in this trend.
  • Reputational risk as a moat—“Professionals are on the scenes with these vaults. … I think vaults are going to be a big deal this year“ – Ryan ([35:54])
• Nostalgia & Maturity:
  • Less “degen” farming, more institutional structure. Some hosts lament the loss of the wild West days (“Do you miss the yam farms?” – Ryan, [36:24]).

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E. Quantum Computing: Industrial Policy & Government Investment

Timestamps: [37:50] – [41:56]

• US Government Invests:
  • Trump administration investing $2B+ in quantum (IBM, chipmakers); a continuation of “industrial policy” strategy.
  • Conversation about the implications of state-ownership, corruption risks, “USA Inc.” model, and echoes of Chinese state capitalism.
  • “It’s like, as far as being bullish goes, [government] is a pretty good owner to have.” – David ([40:18])
  • Ryan: “Probably necessary, but the trade-offs should be acknowledged and we should be careful…” ([41:59])

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F. L2 Migration & Cost Efficiency: Ronin’s Model

Timestamps: [42:42] – [44:38]

• Ronin Chain migration:
  • Moved to Ethereum L2, slashing token issuance from 20% to <1%—channeling cost savings into the Ronin treasury.
  • Outsourcing security to Ethereum to “save issuance” lauded as a “great business” ([44:14]).
  • So far, few chains have made this efficient move.

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G. Ethereum Foundation Exodus & Mission Schism

Timestamps: [44:51] – [59:55]

• Talent Flight:
  • Notable departures: Carl Beek (7 yrs), Julian Ma (4 yrs), Tim Beiko (EIP-1559), others. “If you recognize a name…it means they’re kind of a big deal.” – Ryan ([47:38])
  • Pattern: Many long-term key contributors leaving in recent months, often “all at once.”
• Why Are They Leaving?
  • Multiple theories:
    • “Loyalty pledge”/CROPS mandate controversy (Censorship-Resistance, Open Source, Privacy, Security) ([49:13])
    • Underpayment; better opportunities elsewhere.
    • Morale & management concerns.
    • Philosophical schism—a push away from growth/adoption toward ideal-driven protocol focus.
    • “CROPS is becoming…the end, whereas…crops is a means to a greater end…growth and adoption” – David ([52:26])
    • Some want to “bring CROPS to the world today,” not just maximize for hypothetical futures ([56:40]).
    • Concern that EF is “protecting Ethereum from corruption, but not from irrelevance” ([55:47]).
• Possible Solutions:
  • Call for new organizations in the Ethereum ecosystem to fill these gaps (e.g., Bitmind, large dApps).
  • Ex-EF talent likely to remain in Ethereum, but seeking more direct impact.

Notable Quote:
“Losing this talent…feels like a setback.” – Ryan ([59:09])

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H. David Sells All His ETH: A New Bankless Era

Timestamps: [60:08] – [69:38]

• David’s Reasoning:

  • Frustration with Ethereum leadership focusing on “the soul” over growth, adoption, and “putting points on the scoreboard” ([60:24]).
  • Sees EF’s CROPS focus and protocol purity as a hindrance to making ETH a broadly adopted, valuable asset.
  • “There are interests that prohibit, are prohibitive for Ethereum growth…and now like I kind of feel there’s just been so much momentum lost and I don’t know how Ethereum gets it back.” – David ([61:54])

• Ryan Retorts:

  • Argues ETH price remains central to Ethereum’s value as a decentralized substrate for DeFi; money is a meme and needs believers ([62:26]).
  • Accepts ETH’s “money meme is in a trough,” but holds out belief that the story can change: “I’m still bullish. I still think it can happen.” – Ryan ([65:04])

• A Transition for Bankless:

  • Ryan plans to step back from guest interviews, but will host the weekly Rollup with David ([67:38]).
  • David: “I’m now kind of just like investigating what’s bullish in crypto…I don’t want people thinking that I’m like swapping to being like an Ethereum antagonist. … I’m just not holding eth… doing it while I’m not holding eth. And that’s fine.” ([66:36]–[67:38])
  • Both reflect on marking the “end of a first era for…Bankless.”

Quote:
“This feels a little bit to me like 2019 where confidence in the Ether…the asset is at those types of lows and it feels like the Ethereum foundation is not really stepping in to help.” – Ryan ([62:58])

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3. Notable Quotes & Memorable Moments

• On ETH selling as a bottom signal:

  • “There’s a non-zero chance here that David bottom ticked…this could be the bottom signal we were all waiting for. Eth maxis.” – Ryan ([69:27])

• On Hyperliquid Price Discovery:

  • “You’re trading nothing. But you are trading something. You’re trading what investors demand and supply for the IPO.” – Ryan ([29:20])

• On the EF Exodus:

  • “Morale is low. I think it is downstream of the leadership hammering the importance of this mandate, like being a little totalitarian about the mandate…” – David ([51:34])

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4. Important Segment Timestamps

• [00:00] – David no longer holds ETH; what changed?
• [03:28] – Stagflation, inflation, and macro bear fuel
• [15:05] – Hyperliquid, Zcash, and Venice breaking out in a bear market
• [24:19] – Hyperliquid’s dominance in pre-IPO and RWA perps
• [32:56] – Wintermute, Bitwise, and the rise of “pro” DeFi vaults
• [37:50] – US government’s investments in quantum tech
• [42:42] – Ronin migrates to Ethereum L2, cost savings
• [44:51] – Ethereum Foundation’s talent exodus (who, why, what’s next)
• [60:08] – David sells all his ETH; new Bankless era
• [67:38] – Changes to Bankless podcast hosting/content focus

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5. Conclusion

This episode marks a dramatic inflection point for Bankless and Ethereum alike. The shows deepen, question, and critique both the blockchain industry’s direction and its own role within it. The hosts are candid about uncertainty, market pain, and the possible end of an era—while also highlighting innovation (Hyperliquid, L2 efficiency, pro vaults), calling for new leadership in Ethereum, and renewing a commitment to question, explore, and adapt on the frontier of crypto.

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Transcript

[A]

This is the first time we've had a bankless podcast and you are no longer holding ether, so. That's right. From bankless to ethless. David. What? Why? What changed your mind? What happened here? Bankless Nation. It is the third week of. Wait, May. Yes, May.

[B]

May.

[A]

Hey, welcome to May. Third week. We've been here for three weeks. Bitcoin and ETH continue to look weak. Maybe that's why I don't remember. But that hasn't stopped some down market coins to reach some almost all time highs. They are pumping. We got zcash, we got hype, we got Venice. I know, David, you've been following those. So we're gonna take a look at these pockets of bullishness. Hype in particular. I think they've got SpaceX pre IPO. I think maybe OpenAI. They're getting a lot of, should we say hype this week.

[B]

Nice, nice. The hype. Hyper liquid has certainly broken out further into mainstream specifically because of how much just attention there is on the pre IPO markets that hyper liquid has. I also, Ryan, I have some bear fuel for you from you.

[A]

Coming from me?

[B]

Yeah. That macro bear fuel that I don't know if the broader macro market is pricing in. I'm not saying I'm bearish, but if things hit the fan, if shit hits the fan, I do want to say that I told you so.

[A]

You want to say both things. You want to give us now you said the bull case. You want to give us the bear case. You can always be right.

[B]

That's right. That's right. That's right, that's right.

[A]

Also, we got to talk about this exodus from the ef. It seems like every week more and more ETH researchers are resigning. Is this a trend? What's going on here? What insights do we have? Also, David, for the first time in history talking about the bear case, you have entered this podcast owning no eth.

[B]

Sir.

[A]

Oh my God. What happened? Yeah. Did that mark the bottom? I'm really hoping so.

[B]

Okay. I also hope so. I also hope so.

[A]

We got to discuss that, what your reasons are and my position on things and this new era of Bankless that I think we've just jumped into.

[B]

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[A]

I gotta tell you, it's truly the future when you can get tokenized stocks inside of your Metamask wallet.

[B]

That was always the dream.

[A]

Oh yeah.

[B]

That was always the dream.

[A]

It was always the plan.

[B]

That was always the plan. Yeah.

[A]

All right, give us the bear case. Last week we talked about inflation numbers jumping up. We said April CPI inflation rose to 3.8%. We got some more bearish action I think in the treasury market. Tell us what's going on here.

[B]

Yeah, the word of the week is stagflation. It's a word that we all should send shivers down our spine. So downstream of the April CPI print rising to 3.8% highest it's been since like 2023. I think the United States 10 year note hit 4.3%. That is the highest yield bond yield on the 10 year since February of 2025.

[A]

Wait, did you say 4.3? I'm reading 4.63.

[B]

Excuse me, you are right, it is 4.63. 4.63. I misspoke. 4.63 which is the highest since February 2023. The 30 year note rose to 5.16 which is the highest since 2008. And this is not just United States bond market, Ryan. This is just all global bond market yields around the world. Our rising fiat is just, it's just inflationary. Like there's global inflation happening. This is because of oil prices. Oil prices are also up. They have not broken through the Iran wartime highs but they continue to just push higher for longer. We're currently at $104 on Brent. That's the oil coming out of the straight of Hormuz. The, the, the highs are $11012 to break all time highs. So we're again, we're still below that, but things have just moved higher for longer which is going to just further the input into inflation. Just, just another data point, Ryan. Credit card delinquencies keep rising, which is now at the highest level since 2010. It's just one small data point amongst a pool of others. We can go to the poly market, Ryan, and we can look at the decreasing likelihood of Fed rate cuts in 2026 over the last, just couple weeks. We went from a chance of zero hikes in 2026 going from 36% to, to almost 80%. 70% is where we're at right now. And so the market is pricing in no rate cuts. Overall, things just don't look good from an inflation perspective. But then it always brings us back to what happens with the Strait of Hormuz. Donald Trump once again tweeted out, we are in the final stage of talks with, with Iran around a deal. How many, how many times have we heard this?

[A]

I think since the first week, four.

[B]

We have like, yeah, there's been a peace deal on the table since. Yeah, since the first moment.

[A]

Peace was always an option.

[B]

Peace was always an option. For some reason I think the market is ascribing some amount of legitimacy to this. Like people are taking this one slightly seriously. There is a, a verbal statement from Trump that there is a letter of intent being drafted between Trump and Iran. I'll believe, I'll believe it when I see it. Put the poly market odds on this are saying that this is not likely. There is a 55% chance that there is a peace deal by the end of July 31, which is not anytime soon. And if you can imagine the Strait of Hormuz stays closed until then, oil prices are probably going to break through all time highs. And I don't know, man, like, I don't think the global economy can take 120, 130, $140 oil. And according to Rory Johnson, who knows way more about oil than me, he's like, I don't understand why it's not at $180.

[A]

He's saying 180. Now I know when he came in the podcast it was 150, but now he's saying 180.

[B]

Yeah. And so all things come down to will Iran relinquish the Strait of Hormuz. And I have no reason to understand why they would ever do that, Especially

[A]

when the pain is increasing, right?

[B]

Totally.

[A]

I mean they can look at charging, they can listen to the bankless show and realize that 30 year treasuries are increasing to the highest level they've been since 2008.

[B]

And they look at that and they're like, nice pain. This is our retaliation against America.

[A]

Exactly. And the longer they keep the straight close, the higher it goes, the higher cpi. Now you used the stagflation word a little bit earlier. I actually hadn't seen that on the timeline, but I know this term comes up all of the time and it's often sort of a. Yeah, it does strike fear in the hearts of investors and those monitoring the economy because it means we have negative growth, we're in kind of a recessionary type phase and also we have inflation at the same time. Interesting. I'm not seeing the negative growth with recession. I mean we've had a pretty strong year when it comes to kind of gdp. You're definitely seeing the inflation numbers. I think at least it seems like more the near term fear is inflation. Let me show you some nightmare fuel on the inflation charts. This is a chart that I picked up from the DEFI report this week when I was talking to Michael. This is US inflation comparing the 1970s line chart to today. And if you just overlay these things,

[B]

they overlay pretty well.

[A]

They overlay pretty well in a concerning way. There was actually two tops to inflation during the historic 1970s kind of inflation. There was 1974 when we jumped all the way above 9%. But then there was another one in the early 1980s that was the second top. There was a double top to inflation where we actually inflation went above 10% all the way up. Oh my God. The chart kind of breaks.

[B]

Can you imagine 10% inflation?

[A]

Yeah, I mean can you imagine that? This chart is asking whether that could be in the future for us, if there could be a double top. And the reason people are giving for the possibility of double top is of course the straight remains closed. But then also consumer sentiment, consumer expectations can almost cause inflation to rise. The first time we had inflation, you know, after Covid, people hadn't seen it in 40 years. This time they're anticipating it. And will that drive consumer behavior towards more inflationary tendencies? That could be a possibility. And all of this and you have treasury, you have Besant and you have Warsh and what are they going to do when they have over 100% debt to GDP and the interest payments keep going up as their yields are increasing. Right. That's a rock and a hard place for treasury and the Fed. And so the only way out, the only answer has been the long term thesis of crypto, the long term bankless thesis, which is fiat. You gotta, you gotta print the money to get out of this. Yeah. Now in the short run, that could be bearish for our risk on assets, which crypto is kind of lumped in the risk on category right now.

[B]

Right.

[A]

Over the long run, scarce assets, alternatives to the fiat system have got to outperform. And this is an inflationary money printing decade. You could just see it in the charts.

[B]

This is kind of where I've concluded, I think that it could just be short term hard, but debasement ultimately just benefits anyone. Like as you said, it benefits all of crypto because we are scarce assets. Maybe Bitcoin specifically. Maybe there's idiosyncratic ways that the different, the crypto industry responds to this. But man, I, I see a world where it's like short term difficult because of interest rates. But then I do a 10% inflation. You know how much money we're going to print when, when we do that?

[A]

Well, there could be, it could be the case that was comes in and he's like, oh, inflation, it's just transitory. Remember when we were talking about transitory inflation because you have the deflationary force of AI, it's transitory. There'll be good news soon. Maybe the strait will reopen. So he might be able to kind of, you sweep this under the rug for some period of time. But I don't know. I think that the market forces here are pretty strong and consumers are expecting inflation and supply chains are being hit with it. I think we're in for an inflationary set of months, maybe years.

[B]

When Kevin Warsh says AI is deflationary and this gives me room to cut rates. I don't know where he's getting off on that. Like, I kind of understand the logic, but as a governor of the Fed,

[A]

do you understand the logic? I mean, the logic is right. You know, the economy is humming and cost of services go down.

[B]

Yeah.

[A]

Right.

[B]

Yeah. So productivity is up.

[A]

Health care costs decrease.

[B]

Yes. Go down. Because, because of AI.

[A]

Yeah.

[B]

Which is the, the thought. But we don't know, dude. Like, we don't know if that's what happens.

[A]

And what we're seeing right now is 3.8% rising.

[B]

Yeah. And like I'm, I'm. That would be great if that. But it seems aspirational and I don't think that A federal governor should be aspiring manifesting in order to create Fed policy.

[A]

Dude, no. You don't believe in manifesting.

[B]

I do not believe in the Federal Reserve manifesting.

[A]

We'll see. I mean, he hasn't gotten in yet, so we don't want to prejudge him, but definitely a tough place for the Fed and Treasury. I'm sure they have a way to, to get out of this one, but it's going to be more money printing.

[B]

And the stock market reacted to everything that we're saying Friday through last Tuesday.

[A]

Oh yeah, we didn't start the episode with all time highs. So we didn't get an all time high in stocks.

[B]

Yeah, no, all time high in the S and P. The all time high was last Thursday. Friday it was red at the end of Friday, Monday, Tuesday, and it was down like 2%. But now we're back up 1%. So we're less than 1% off of the all time highs. And so the, the market is seeing everything that we're talking about and it's like, meh, I don't care yet. I don't care yet.

[A]

It's all about the AI trade. I mean, I guess that's fueling all of this. There are some pockets of bullishness in crypto though, so blue chip assets, the bitcoins of the world, the ethereums of the world. Not much movement to the Upside down on the week, but there are a few things that are happening. Oh, we should mention strategy, Microstrategy, bot.

[B]

Bitcoin. Keeping bitcoin afloat. Yeah, keeping bitcoin afloat.

[A]

Thanks, Mike.

[B]

That comes downstream to all of us.

[A]

Little 2 billion dollar donation a little too.

[B]

Yeah. So he bought. It was something like $20 million of Bitcoin last week. And everyone was like, dude, why even bother announcing this? Yeah. But then the following week it gets $2 billion.

[A]

So much money. That's crazy. Also Bitmine locking in that ETH target of 5%. They are on track. Did you know to hit 5% of all ETH by September? Just over a year later from when he started, Tom Lee has almost has 5% of all the eth. Did he buy some more last week?

[B]

No, no, he didn't. This is just somebody extrapolating to where and when he has.

[A]

Why is this Tom Lee working at Starbucks?

[B]

I don't know.

[A]

Oh, he's handing me a latte.

[B]

An eth latte.

[A]

The milk foam in the ETH prism here.

[B]

Yeah, beautiful. What happens when he hits 5%? Because I feel like that's the big question for Bitmine, like what happens next? I don't know.

[A]

Mission accomplished.

[B]

Yeah, mission accomplished.

[A]

He did it.

[B]

But it's a company. It's a company. What are they going to just stake ETH into the sunset?

[A]

Look, you just stake it and right now he's making like 300 million a year for just staking that ETH.

[B]

Nice little yield, but he's also not selling that.

[A]

Right?

[B]

What happens next?

[A]

What happens next?

[B]

What happens next? That is a, that is a big question.

[A]

Maybe Tom Lee will come in and help us fix the Ethereum Foundation a little bit. I don't know.

[B]

That would be, that would be good. That would be good.

[A]

More to discuss later. But first let's get to Hyper Liquid. Zcash and Venice. These are tokens in this crypto bear market that are actually up. They are breaking the trend line. You got some charts for us here. What are we looking at?

[B]

Yeah, first Hyper Liquid all time high, new all time high coming in. Oh, it's down a little bit, but it hit 61 and a half dollars. That is a new all time high for.

[A]

What's the market cap here? Are we talking like 50 billion or so?

[B]

There is a big dislocation between the market cap and fully diluted valuation of Hyper Liquid. The market by the way, is it

[A]

just surpassed on ftv. Do you see this? Hyperliquid surpassed Solana ftv. It's a little bit going on.

[B]

And a half billion dollars on the FTV, only $14 billion on the market cap. So big, big dislocation there. I'd actually like to learn a little bit more about what that dislocation is.

[A]

Oh, it's just tokens that haven't unlocked yet.

[B]

Yeah, but like how and why? What's the nature of those unlocks? How quickly are those going to come unlocked? Like all the nuances. You think so?

[A]

Oh yeah. I mean Michael, NATO's got it in the TDR. He did a report on this and read up on it. Of course he did.

[B]

Of course he did.

[A]

But don't let that be a reason. You're bearish with unlocks, right? Because that happens over time. And the here and now we got what on the week? A 47% increase in price. The week?

[B]

Yeah. 47% increase over 30 days. 40% increase in the last week. There has been particular momentum behind Hyper Liquid in the last week. We'll talk about that in a second. Zcash up 25% as well this week, knocking on all time highs. Not quite at all time highs, but knocking on all time highs.

[A]

All time highs in a bear market. I thought Bitcoin was supposed to lead.

[B]

Yeah. Nope, nope. There has been idiosyncratic moves down market coins. Yeah, you're right. We don't really see firm all time highs, but we are. That's what we are. And also Venice vvv, the private AI inference application on base. Also new all time highs that's coming in.

[A]

That's so surprising to me. So I could. I know we're going to talk about hyperliquid more, but obviously that's some kind of perps. It's perp season IPOs, you get stocks. It's kind of not necessarily purely correlated to crypto. Right. And then you got Venice, which is part of the AI trade and picking up traction and like, pretty amazing private AI. Zcash is the truly idiosyncratic thing because it is a quote unquote altcoin. It literally is an alternative, literally an altcoin to Bitcoin.

[B]

Yes.

[A]

Okay.

[B]

It's literally a fork of Bitcoin.

[A]

No, it's not. Yeah, yeah, no, it's. It's not a fork of Bitcoin. What?

[B]

Yeah, dude, it's a. It's a 21 million hard cap.

[A]

No, I know they forked the supply and such, but it's not like they didn't actually.

[B]

Oh, the blockchain did not fork. It's a code based fork.

[A]

Wait, what? They forked the. It's actually a fork.

[B]

Yeah, I don't know about that. It's not a blockchain fork, but they took the bitcoin code base and they forked it to make zcash.

[A]

I know they forked, obviously the supply schedule and some of those details, but the whole code base, I mean, it's all. Pretty sure, Zuko. Pretty sure. Fact check, David. Okay, we're going to fact check and

[B]

come back to this.

[A]

Didn't you just do a podcast episode on zcash?

[B]

Yes, which is where I got this from.

[A]

Oh, really? Okay, well, maybe I'm out of the loop then. Quite possibly.

[B]

Is zcash a fork of Bitcoin? Yes, zcash is a fork of the Bitcoin code base launched in 2016. It was developed by taking the original Bitcoin core software and altering it to introduce enhanced privacy features. Yeah, it's a fork of Bitcoin.

[A]

I just found that out. Yeah. And so they forked it and then they added the ZK stuff.

[B]

You got to keep on listening to Bankless you.

[A]

Yeah, I guess I do. All right, so that I guess my point is that is the truly idiosyncratic thing. Like it's not supposed to happen in a bear market, that some altcoin is like drastically outperforming. Actually, have you looked at the zca, the Bitcoin zcash ratio, the pair here?

[B]

Oh, that's gotta be at all time highs.

[A]

It's gotta be right?

[B]

It's gotta be at all time highs.

[A]

Somebody can go look at that.

[B]

Yeah, not even close.

[A]

Not even close. What do you think that means?

[B]

Well, this is also why Venice is pumping. Privacy is in right now. And you also see Railgun, which is a more niche privacy project on Ethereum and also Vail, a more niche privacy product on base. All those tokens are also doing well. Privacy is in, dude. Privacy is in.

[A]

Well, that's great. I'm very glad it's in. It needs to be in. We need more privacy. David. We got more on hype coming up. And what else?

[B]

After we're done talking about the hyper liquid momentum, we'll talk about the incoming, potentially biggest, most historic IPO season ever. We got SpaceX, who filed this week, OpenAI on the cusp of filing. And then there are even more after that. And then we're going to talk about Wintermute getting into vaults and the SEC framework that got teased about tokenized securities. We're going to talk about all this and more. But first, a message from these sponsors that make the show possible. Trading is changing, not gradually. Right now. OkX just launched trading bots directly inside the OKX app grid. Trading DCA arbitrage. You set your strategy once and it executes around the clock. No staring at charts all day, no manual entries, no missing moves while you're asleep. And for the first time, automated trading actually feels simple. But OkX is thinking bigger than just trading. They also launched the Agent Payments Protocol, an open standard that lets AI agents execute full commercial transactions on chain. The Ethereum Foundation, Uniswap and AWS are already building on it. And now it's live inside the United States. And new users who deposit and trade can get up to $500 in Bitcoin through the bankless link. The link is in the show Notes to learn more, not investment advice. Not available in New York or Texas. What's something you're actually looking forward to next month? Because Coinbase is doing something interesting. Coinbase One member month starts with 20% off your first year Coinbase One, plus a $50 Bitcoin bonus when you spend $100 with a new Coinbase One card. In your first 30 days. They're also layering in extra rewards and perks throughout the month. And if you're active in crypto, Coinbase One is basically designed for you. You get zero trading fees on thousands of crypto assets, 3.5% APY on USDC and boosted staking and lending rewards, and up to 4% Bitcoin back with the Coinbase One card. So if you're going to try it, now is the time to lock in a 20% discount before the weekly rewards kickoff. Start your month of more with 20% off the first year of your annual plan at coinbase.combankless that's coinbase.combankless visit coinbase.combankless to get 20% off of the first year of your annual plan today. Offers are valid until May 31. Terms apply. Coinbase One card is offered through Coinbase Inc. And Cardless Inc. Card issued by First Electronic Bank. Bitcoin back rates are based on cardholder

[A]

assets on Coinbase, up 47% on the month. Why is Hype so strong? Here's a tweet from Matt Hogan. Hyperliquid is not a crypto app. It's a super app. It's not targeting the $3 trillion crypto economy. It's targeting the $600 trillion global asset market. That's all the trillions. I think that's the tam of the just about everything. Matt, he said investors are valuing it as one thing, it's the other. The other. He means the bigger number.

[B]

The bigger number, yeah. It's the bigger number. Yeah.

[A]

And this is Bitwise is pretty bullish on Hype on the week. There was some bitwise news, right?

[B]

Yeah, they, they launched their hyper liquid ETF last week. We covered that briefly. They're taking 10% of the fees from that ETF and they are just buying Hype with it and holding it on the bitwise balance sheet, just bitwise Treasury. So just an alignment statement, a marketing statement from Bitwise that I obviously the Hyper Liquid community really, really likes. There's only two ETFs, Bitwise has one and then 21 shares has the other. They are doing some pretty okay volumes to start and so it's definitely penetrating into the tradfi circles pretty well. Ryan, do you follow this account? Geiger Capital.

[A]

I've seen Geiger Capital usually a meme in meme form or some chart.

[B]

He's a decently well informed Tradfi kind of fin twit investor. But really his strengths are fintwit memes and he tweeted out Hyper Liquid. First time I've seen him tweet about anything about Hyper liquid. And this person is just like the meme guy of all of fintwit tweeting out hyperliquid. Now why, why is it, where is this attention coming from? First, it's worth noting that real world asset volume on HyperLiquid is breaching 60%. And so it's servicing the normal economy. It's servicing that $600 trillion that Matt Hogan said. It's also got, you know, bitcoin perps, solana perps, ether perps, dogecoin perps. It's got all the normal stuff, but really normal stuff. Our normal stuff, yeah. Uh, but really like the growth of Hyper liquid has come from just real world assets. It launched oil markets, it launched the S&P 500 with a real partnership with the actual S&P 500, launched gold and silver during their gold and silver mania of a couple months ago. And that's where the dominant volume has come on. And now the new thing, the thing that has pushed a ton of momentum into it in the last couple of weeks is the pre IPO stonks.

[A]

Because you can't get these anywhere.

[B]

Because you can't get these anywhere. And so ahead of IPO filings, really this is Trade xyz, which is the dominant market deployer on hyperliquid. They create a pre IPO market and allow people to trade it, which is why you can trade SpaceX on hyperliquid ahead of the IPO, which is the most hyped IPO, the biggest IPO in history. And so Hyper Liquid is getting noticed by Tradfi by doing a service that Tradfi doesn't have. And so it's getting its momentum.

[A]

It's also a source for Price Discovery for these assets where we don't really know where they're valued. I mean, the last valuation was some sort of private round. Maybe it's somewhat opaque. Right. And now Price Discovery for some of the world's largest companies and these companies that are getting ready to IPO is happening first where on Hyper Liquid in this market. So that's price discovery 24 7, like in on crypto rails for assets that just aren't available anywhere else.

[B]

There was a tweet that rocketed around the Hyper Liquid community of somebody doing the Sarah Breast. There was the IPO that happened last week, the Nvidia community.

[A]

We talked about this. Yeah, yeah.

[B]

And somebody. There was a, like on the Wall street trading floor There was somebody from this. I don't know if I'm pronouncing the company right, but the Cerebras company was like, yo, congratulations for like the Cerebras team. And they had computers in the background and there was very clearly the Hyper Liquid interface on the trading floor of Wall Street.

[A]

And.

[B]

Yeah, and so, you know, people are using hyperliquid to determine prices, to look at prices.

[A]

And this is SpaceX, last week, I believe, officially filed their S1 registration statement with the SEC ahead of this IPO. Their revenue is about $5 billion. But the value of this, the current value in hyperliquid, is it like north of 1.8 trillion? Something like this?

[B]

I mean, that's what I thought the IPO price was. It's like 1.7 trillion or something.

[A]

That's the. Okay, yeah. Okay. So I was kind of curious, I was thinking about this. With Hyper Liquid, they're releasing an asset called SpaceX. It's SpaceX price exposure. You're definitely. This is a synthetic. So this is a perpetual. Of some kind. You definitely don't. If you buy this, you don't own SpaceX equity. Okay. You're not an equity holder, but you do have price exposure. But the question is, follow the other perps on Hyper Liquid, right? Bitcoin has spot price, ETH has spot price. There's all some sort of reference, spot price Oracle to refer to. How do you get a reference point for the price of SpaceX if there's no spot market? It doesn't even exist in the real world. What is this thing? What are you buying if you buy Space X on Hyper Liquid, that.

[B]

That's exactly why this is an innovation. This is an innovation. Is that. How do you find the price when there is nothing to refer to? And so just a small nuance. It's not Hyper Liquid that's deploying or like listing Space X, it's Trade X, y or any Hip3 deployer. So it's like a third party who's a service provider on Hyper Liquid. And so they just go and they do a little bit of due diligence. They look at the last funding round of SpaceX, how much that was valued at. They look at some, some documentation. The 409 as the secondary bids, they kind of like, you know, lick their finger, stick it up in the air and be like, seems about 1.7 billion. And so we'll pick a number that seems correct and then that's the anchor number, that's the reference number. And then traders can Trade around that number. And as perps work if that number, if the price that traders are trading around that number dislocates the in the yields, the interest rates go up. But they hyper liquid and the pre market IPO IPO platforms they dampen the the volatility or the severity of the yields. If it dislocates too far because they want it to dislocate away from the anchor price because that's, that is the price discovery. And so this is in contrast to Bitcoin ether or anything with an actual known Oracle where there the, the interest rate, the yields paid by the people going long and short are set off by how many people are going long and short. And so the yields can get really high. If it's too one sided the yields, the interest rates that's charged to traders stays pretty manageable which allows for the price discovery. And so this is all before the actual IPO actual moment traders are free to push the price around this arbitrary number set in stone by whoever is deploying the market. But then there is the moment of the IPO and then that is when kind of like the Indiana Jones things happen where they hot swap the actual anchor price. So the former anchor price, the arbitrary number is just discarded and then now an actual Oracle price of the actually trading equity takes over and then it kind of resumes to being a normally like more traditional perpetual. That explain that.

[A]

Okay, you did. Yeah. And so there's a before ipo it's kind of this, this reference number set by hyperliquid After IPO the spot market becomes kind of the, the reference Oracle and the pricing around that provided you have enough liquidity and hyper liquid has shown that it does seems to be pretty close, pretty accurate to what the actual market would price these things at. It all works I guess even better than you you think it would like work on, on paper because it's.

[B]

Yeah, it's because there's literally trading nothing before the ipo and then they're trading around an Oracle price.

[A]

You're trading nothing. But you are trading something. You're trading what investors demand and supply for the ipo. So you're effectively you're finding a market price for this thing. Yeah, that's why it all works.

[B]

But then also there's the mechanism of in the future it will be.

[A]

That's right.

[B]

There's some trust to the Oracle so that you know that it will settle.

[A]

It's actually incredible and I think Tradfi is probably looking at this and being like oh shoot, we should have thought of that.

[B]

We do have to give tip of the hat to Lighter Lighter, the purpose platform on Ethereum. They actually listed SpaceX two weeks ago.

[A]

Oh, they did, yeah.

[B]

They were way ahead of the curve here.

[A]

Well, actually, so did HyperLiquid, right? It's been available.

[B]

No, HyperLiquid just launched it like a couple weeks ago.

[A]

They did. Okay.

[B]

Lighter beat them by like two weeks.

[A]

Yeah, I mean, yeah, it's fantastic. We're innovating here in crypto. What's so striking to me about this too, David, is this is some of the original things we've been excited about in Defi for a long time. It's happening outside of the platforms and the apps that were originated here. But this is like Kane Warwick Synthetics, this OG Synthetics, everything.

[B]

Yeah.

[A]

It just like we're in a different regulatory regime where apparently this is. Okay, okay. Now we have the ability to scale this. We have the kind of user demand. It strikes me that so much about sometimes getting these things right is so much about timing. Totally. You need all of the prerequisite infrastructure and regulatory apparatus in order to make the thing happen. But the idea has been around. Synthetics was early years.

[B]

Synthetics was early.

[A]

Synthetics, yeah. Synthetix was early.

[B]

So that's the SpaceX IPO again. Going to be the biggest IPO of all time. 1.7 billion. They're trying to raise something like $1.7 trillion out of the gate. It's already going to be like a top, top 10, top 20 company, which is just wild, fun fact. Ryan, did you know SpaceX holds almost 19,000 Bitcoin?

[A]

I didn't. Wow. I knew. Tesla did. I guess all Elon companies own a little bit of bitcoin on the balance sheet.

[B]

Yeah. Yeah. I actually don't know how SpaceX got so much bitcoin. That's a lot of Bitcoin. That's $1.3 billion of Bitcoin.

[A]

Oh, yeah, That's a lot of bitcoin. I mean, we're not talking Michael Saylor levels. That's probably the second large though, for bitcoin, right?

[B]

Dude, it's more bitcoin than that.

[A]

Something like that, yeah.

[B]

But then, okay, so it's not just SpaceX, it's also OpenAI. OpenAI is rumored to be filing potentially as early as this week for their ipo. And then also, you know, just anthropic and other companies are just shortly thereafter, which why people are calling it the most historic IPO season of all time. Just in terms of size which is why Hyper Liquid's positioning here is particularly strong. Adding to the momentum, Ryan, the SEC this week hinted at releasing a framework for trading tokenized or digital versions of securities. There's a rumor that was leaked somehow that the SEC is expected to release an innovation exemption for tokenized stocks potentially as soon as this week, which will be today or tomorrow. So we should be hearing about this.

[A]

Such a different era of the sec, right? Like with Gensler's sec, you would have had office hours with Gary Post where he would have a video wagging his finger at you and saying, don't buy, don't believe those SpaceX, you know, like those aren't real products. It's not the real thing. Like you can only get the real thing from an SEC regulated like trading market, whatever. And now the SEC is much more embracing, almost encouraging. Certainly not preventing some of this free market discovery. David, there was some news about Wintermute as well. Opening vaults. The vault theme is a pretty big deal. I think this is on Morpho. Tell us about this.

[B]

Yeah. When we had Matt Hogan from Bitwise on the end of last year to do a predictions episode, this is one of their big predictions was vaults are going to become a very big deal. Wintermute, probably crypto's biggest market maker, is getting into a new line of business, brand new line of business. A new defi vault curation business. They have two vaults that they are deploying on Morpho, USDC prime and USD Select. This is just two different levels of risk appetite. One's less aggressive. Prime is less aggressive at 4 to 5% is their target. And select is more aggressive at 4.

[A]

Which do you prefer?

[B]

Obvious?

[A]

More aggressive.

[B]

I'm not here for 8% yield on my USDC.

[A]

Dude, wake David up. When you have an ultra hardcore aggressive,

[B]

wake me up for double digits, okay?

[A]

Anyway, it's great for less aggressive investors than you. And this is on usdc. So it's a stablecoin type product, right?

[B]

Yes, yes. Yeah, that's right. That's right. Yeah.

[A]

So what's interesting about this is they're doing it in Morpho, right? So it seems to be these companies. This is not exactly Wintermute. It's. It's what, a subsidiary? No. Well, today we're launching Armitage. So they're doing this under a separate brand, I suppose, but they're bringing all of their market making expertise and risk management skills to these vaults. So rather than just, you know, throw stablecoins into a vault from somebody who you don't know or is Part of some governance form or something else. It very much feels like professionals taking over the management and the accountability and the risk with a brand name of these vaults. Right. So Bitwise did this earlier in the year with a Bitwise Vault. This is a press release. Bitwise expands on chain solutions with non custodial vault curation. Also on Morpho, theirs was a 6% APY. They have a whole team around this, a whole risk management team that you can just be like, these guys have looked at what's going in the vault, how the yield is generated. It's got the Bitwise brand name. We're doing this, you know, we're dotting all the I's and crossing all the T's. And so this is implied. Something you can trust because it's. The Bitwise brand is being staked on it. I like that model. It's a cool model. It's still a smart contract. But there's some reputational skin in the game from risk managers so that you have a bit of assurance that you're not just like chucking your money into something that who knows where the yield is coming from. Right. Some like Defi farm somewhere that's gonna get hacked or gonna get rugged. The professionals are on the scenes with these vaults. I think bitwise now they're 15 billion in assets under management. So they're a pretty large and upcoming financial company, quite honestly. How long until BlackRock does this? Or Fidelity? All of the. I think Matt Hogan is exactly right. Like this is a big move. I think vaults are going to be a big deal this year and then into the next year.

[B]

While I enjoy seeing Defi evolve and get more sophisticated and mature, I can't help to feel a little bit sad because the juxtaposition between the hacks on AAVE and Defi native stuff in some of the OG DeFi platforms, the juxtaposition between that and then these legal entity managed financial structured products, there's just. There's just a gap there.

[A]

Oh, do you miss. Do you miss the. The yam farms? Do you remember that?

[B]

Yeah, that's not exactly what I was going for, but I think that's a different topic. I do miss the yams. What was that.

[A]

What was that era where you were

[B]

just, oh, that was deep. That was Defi summer.

[A]

Yeah. You would just put your stablecoins in some vault. We had no idea where the yield was coming from. It was double digits, sometimes triple digits, the way you like it, David. But like, I think it was not

[B]

something different because the Reason why it wasn't sustainable was because people were speculating on a token called dms which had no plan whatsoever. I'm just talking about, like putting USDC in aave. Like, people like, I was listening to Kane Warwick on his podcast. Well, on Laura Shin's platform, he's like, I feel so stressed out about putting my money into defi right now.

[A]

Just hacks.

[B]

You're talking just hacks. Just hacks, Defi risk. Had that.

[A]

Agree.

[B]

Yeah. And then like, I look at Bitwise's vault strategy and be like, that is a completely valid answer to this problem. Why is it a valid answer? Because there's someone with accountability. There's a legal entity with accountability. Not really the bankless, like true defi, you know, code, not kings philosophy. And so again, why. I like, I like that this is growing. I like things that grow. This is clearly working. This is clearly a solution here. I can't help to feel like, yeah, I think you get what I'm saying.

[A]

I get what you're saying, but you know what I mean, it's still permissionless. Anyone can spin this up. It's nice to have stake back, replacement reputation. It's nice to have somebody who's looking where the yields are coming from and giving investors that. That level of assurance. I'm not sure how they're handling smart contract risk. That might be another question. But that might be required before some of the big, big guys, the fidelities and blackrocks, come aboard. David, the Trump administration is investing $2 billion in quantum computing companies right now. I know quantum has been a big theme for us this year as we've talked about the effect of quantum computing on all of our crypto cryptography, including Bitcoin. Now Trump, the U.S. government is spending 2 billion in this area. So 1 billion going to IBM, another to chip maker, some to some startups. By the way, I was looking at, where does this funding come from? Where do you think it comes from?

[B]

Taxpayers.

[A]

Yeah, yeah, that's right. It's from taxpayers. More specifically, it's Biden's 2022 Chips Act. You know, Trump's kind of allocating some of that and throwing that at Quantum and putting his name on it.

[B]

That's. That is humorous to me.

[A]

Yeah. Do you support this? So, like, I think in our agenda somewhere it said this was a grant. It's an investment.

[B]

It's an investment.

[A]

US government owns these companies, they own equity stake.

[B]

It's an interesting that they use the word grant, but then they get equity. And so it's an investment.

[A]

They are investors. Right. So we are investors. You're a taxpayer in the U.S. you're an investor. You own some of this. How do you feel about that? You think the government should be doing this?

[B]

Yeah. So, like, what's, what's the rationale here?

[A]

Industrial policy.

[B]

Right, industrial policy. But these are the. What he is investing in, what the White House has invested in. It's. It's semiconductors with intel, it's chips, critically important in the world of AI. It's. It's minerals. Also critically important in the world of drones.

[A]

You're talking about previous investments, not this quantum one, Just practically.

[B]

Yeah. This is actually not the first or second or even the third time they've done this. This is the fourth time they've done this.

[A]

Yeah.

[B]

And like, Quantum is just the new tech stack that the government is deeming a national security interest that they need to invest in and also own and govern over. So critical minerals, they also did this. There's six different critical mineral companies that the White House owns now. There's a nuclear energy company, there's semiconductors, as I said with. With Intel.

[A]

And Trump is like, up on his.

[B]

He's up so big.

[A]

He's like, up five.

[B]

He's up so big on all of them. Even all of the Quantum companies, like IBM is up 4%, and that's the one that's up the least. Like, the other eight companies that he invested in are up between 7 and 10%. So, like, anytime Donald Trump dumps money into these things, these things go up, obviously, because they have, like, regulatory protection because they're owned by the government. It's like, as far as being bullish goes, is a pretty good owner to have. But, like, how do I. How do you feel about the government politics having corporate governance over?

[A]

Yeah, this is libertarian. Right. This is not like free market. Let the free market play out. This is industrial policy. This is selecting winners. This is. I don't know what else this is. This is also a vector for corruption, quite possibly. Right. Give the right person a bribe, find the right contact, they will invest in your company. Everyone wins. There's some challenges. There's some bad sides to it as well.

[B]

Yeah, this is basically explicitly the China model. This is what China does. They just. They effectively own all of the companies inside of China just because they govern. They govern everything. And so this starts to look a little bit like that, which I probably is a good play because China's. China's been winning that they are efficient. I don't know if it's the long term I'm worried about it eroding everything at least in the short term I think is a good move.

[A]

I need to do some study up on industrial policy in governments and what I think because I don't really have a strong opinion on this yet and I would like to have a really strong opinion on this that I can.

[B]

What does your gut say? What does your gut say?

[A]

Probably necessary but the trade offs should be acknowledged and we should be careful so that particularly the corruption vector and the over the loss of private competitiveness those are the things I sort of worry about but like there's kind of the idea of like USA Inc. Moving well no, I mean like oh the United States is a corporation now. Right. Like and it kind of is but it you know anyway I have some hang ups with it but like maybe necessary but we've got to have some moderation around it. That's all I've come to. I need to give it more thought and to really have an opinion on it.

[B]

A thread will continue to pull on

[A]

blockchain.com has filed for IPO so they're doing it. David also Ronin, you remember the gaming chain.

[B]

Yep.

[A]

They have now completed their migration to Ethereum L2 I feel like we were talking about that maybe six weeks ago. Anyway that happened. Here's the big thing for me because they're on a layer two this has been a big bankless theme. They actually did the thing where they reduced inflation from 20% a year to less than 1% a year their token issuance and they're taking those savings and they're putting it into the Ronin treasury. So David, they're doing the thing where they are saving issuance by outsourcing that to Ethereum effectively outsourcing their security to Ethereum and they're picking up the proceeds. I haven't seen many.

[B]

When you say picking up the proceeds what are those proceeds?

[A]

Well inflation token economics goes 20% issue their token less. Yeah.

[B]

So they're just spending less on their token.

[A]

So they were spending 20% per year and now they're spending less than 1%. It's a cost savings. That's the benefit.

[B]

I saw somebody's tweet which they were making some bearish Ethereum layer 2 tweet and they're like look, only base is the only layer 2 making above like a million dollars a week or something or a day or something and like you know Arbitrum is at like 600,000 I think it was a month. It was like 607 how much are

[A]

they saving in issuance?

[B]

You in. That same screenshot that they were tweeting out there was like a margin column, and all of them are like, 97% margin. Yeah, we're like, whatever, dude.

[A]

It's a great business.

[B]

We're making $700,000 a month and it costs us nothing. Oh, y.

[A]

Exactly. Anyway, Ronin did the thing that we've talked about. One of the virtues of the L2.

[B]

Few have.

[A]

Few have done this. But Ronin did. And that deserves some congratulations. David, More to discuss, including. I think the next section is all about Ethereum, the EF Talent flight. Is everything okay over there? We gotta look at that.

[B]

What's going on at the ef?

[A]

Yeah, also what's going on at Bankless? Huh? A new era. What's going on with.

[B]

Why are those happening at the same time?

[A]

We'll discuss all this and more, but before we do, we want to thank the sponsors that made this episode possible.

[B]

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[A]

Yeah, it usually starts like after X amount of years I am announcing that I am and then the departing the ef. Yeah, there's been a lot of those.

[B]

There's been a lot of those. The most recent one, Carl Beek. After seven incredible years, I've decided that Friday, May 2029 will be my last day at the Ethereum Foundation. Carl led the KGZ ceremony which enabled Denun charting. All this good stuff.

[A]

The kids don't remember that.

[B]

Yeah, it's been forever since I've said that.

[A]

Kzg, they don't remember that.

[B]

Yeah. But let's just kind of quickly go back in time a little bit. We can go back to February when Tamash stepped down as the executive director. In April we lost Josh Stark and Trent Van Eps. In May we lost Barnaby, Tim Baco and Alex Stokes from the Protocol cluster leadership.

[A]

Those are some big names. If you know any.

[B]

Tim bates, go shipped EIP 1559.

[A]

Dude, like if you know any of the names that we said, like it takes a lot for an E3. Most of the work that EF researchers do is behind the scenes. You'll never hear about them. They're like unsung heroes. If you recognize a name out of the list that David just said, that means they're kind of.

[B]

Yeah, a big deal. Yeah. Barnaby, six plus years at the EF. Tim Baco. It was there since 2020 or 2021 or something when he just like saw EIP 1559 and be like I'll grab a shovel and do that. Alex Stokes had been at the ef. He was working on proof of stake since forever.

[A]

You know what I've been terrified of? Like set notifications on for Justin Drake's Twitter.

[B]

Justin Drake will not. I don't think so.

[A]

Can you imagine?

[B]

I cannot imagine.

[A]

I cannot. I don't.

[B]

Let's not talk about that. And then, and then the, the most recent ones, Carl Beek and Julian Ma. Carl, seven years at the ef, Julian Ma, four years Built Fossil and the fast confirmation rule. All like pretty critical infrastructure for Ethereum.

[A]

There's more too. We've heard of more.

[B]

There are more There are more. There are about as many as we know. There are about as many as we don't know. Is kind of like what I'll say.

[A]

Why are they leaving?

[B]

That is up for interpretation, I think.

[A]

Can I give you some interpretations that I've seen and see if you resonate with them? Please do so. It's not your words yet. So one interpretation is. Do you remember the loyalty pledge?

[B]

I think this is the big one.

[A]

Yeah. So this was the.

[B]

This spun off from the mandate.

[A]

The mandate. So the Ethereum foundation released a mandate where they talked about emphasizing crops, which stands for let's test our knowledge. Censorship, resistance, open source privacy, and S. Oh, P. Privacy. And then censorship, reset, Open source privacy. Is there an S? God, what's the S?

[B]

Censorship, resistance, open source privacy and not security.

[A]

Maybe it is. I like that.

[B]

We already have security. I don't know.

[A]

Okay, so there's an S too. We're missing an S. Embarrassing. We don't. I guess we wouldn't have passed as employees at the EF because apparently you were supposed to. There was a mandate to sign this. That was the rumor anyway. And so this is Defi Ignis saying that people that didn't want to sign the mandate, for whatever reason didn't want to be forced to sign the mandate. They were leaving. And that's maybe the reason for some of these departures, at least. So the loyalty pledge was kind of controversial. Yeah, that's one reason. I've seen other reasons. Of course, EF researchers are notoriously underpaid. There's other opportunities for them. There's been management concerns at the ef, Right. Like, how well is it managed? How well is it governed? We've heard rumors of that over time. So anyway, there's a number of things that, that you could point to as. As reasons. What. What do you. Why do you think they're leaving?

[B]

Yeah, I don't know. I'm sure being underpaid doesn't help. Like there's that famous Vitalik quote that he said, like, if people aren't complaining about how much they are paid, then they are paid too much. And so like, if people should be complaining about how much they are underpaid by, I'm sure that doesn't help. But like, nonetheless, EF people have been working at the EF for six plus years, seven plus years.

[A]

And so I don't know another reason. That's a long time. It's a long time to work anywhere. And so there's just a natural reason for this, which is just like hey, people have been doing something for a long time and they want to change, they want to do something new.

[B]

Yeah, but that answer the question as to why it's happening all at once.

[A]

You're right. So why is it happening all at once?

[B]

Why is it happening all at once? I think that there. I think morale is low. I think it is downstream of the leadership hammering the. The importance of this mandate, like being a little like totalitarian about the mandate and saying this is the mandate, like sign it's funny though.

[A]

Why would the mandate be a. Be a center point for this? Because everyone who works at the ef, everyone who supports Ethereum, like censorship, resistance, open source privacy, S. Sign me up. Those are the things.

[B]

S is security. It is.

[A]

Thank you. I knew it. We knew it.

[B]

We knew it. We did get that one right.

[A]

But. Okay, but isn't everyone on board with that already? If you work at the ef, if you care about Ethereum? Of course, CROPS is the thing we've been doing. And thanks to the mandate, there's, there's an acronym for it.

[B]

Yeah, I. The mandate's different though, because like crops. CROPS is becoming like the end. The means to the end. Like it's the end. Whereas other people like me and, and maybe also you is like crops is a means to a greater end. And that greater end is like growth and adoption and the mandate. My interpretation of the mandate has always been that it was a dog whistle to say that we are not actually doing the growth thing and we're actually not doing.

[A]

Not prioritizing the growth thing. If it happens, it happens.

[B]

If it happens, it happens. But we're not, we don't care about it. And I think maybe making that explicit and doing this whole like sign the mandate thing just was a big turnoff.

[A]

I think that. Okay, so you and I don't know, we have no particular insight. The Ethereum foundation is a fantastic organization, by the way, in all sorts of ways, is the reason Ethereum is what it is today. We're not insiders, so we don't know. But I do think you're right about that. I do think that there's a pattern to these departures and almost like kind of an organization to them. They're not random, they're not one offs. I think there is a contingent of the folks who are leaving, it seems to me, who are leaving because they don't want Ethereum to just be a niche project that focuses on focusing on sanctuary technology. Right. So they care about building Ethereum as a world financial system for Instance, and not just a. It's crops. And you know, if we build it, they will come. I think the EF has really focused on the protocol only, and the protocol is incredibly important. But there's also an ecosystem around this. Right. Like coordination for interoperability among all of the L2s. And I think some of the departures are maybe frustrated that that hasn't happened. Also, it's just like the tone of the EF is kind of philosopher ish. It's kind of academic and it's long term. It's kind of like the galaxy brain, a thousand year time horizon. In fact, it was like a pledge. The mandate was a pledge for a thousand years. Right?

[B]

Yeah.

[A]

And I know that's somewhat tongue in cheek, but I think some of the defectors are just like the people departing are like, hey, but what are we shipping now?

[B]

What about I'm alive today?

[A]

Yeah. And we want this to be relevant, like next year and the year after in our lifetimes. And so not that Ethereum has failed on that entirely, but it hasn't succeeded in all of the ways that I think many of the believers thought it could and thought it should. And there's a number of people who said this. I thought the EF was supposed to do all of these things, turn Ethereum into a global financial system, be kind of a padding for the ecosystem, work up the stack, not just at the protocol layer. I think my take though, David, is the EF is what it is. They are guarding the soul of Ethereum. They're doing this crops thing that is a useful function. They can protect Ethereum from corruption. And this is kind of the focus a thing for me is just like I feel like the decisions of addition through subtraction and max decentralization, some of the structurelessness you see, the focus on crops, they are protecting Ethereum from corruption that you see with many other chains and many other cryptosystems. But they're not protecting Ethereum from irrelevance.

[B]

Right, Totally.

[A]

And that to me, this is something you and I have talked about, but that to me is at this moment of time actually the bigger threat. Because what if you build this max ivory tower, decentralized system, but like it has a few tens of thousands of users only. What have you actually achieved? And that I think is what some of the defectors are maybe seeing and why there's some departure jadedness with the EF direction. But I guess my point is I don't think the EF will ever get us that I Think what Ethereum needs is new institutions to kind of step up and fill those gaps. Let the EF protect us, do the sole thing, preserve, you know, keep us max crops and save us from corruption. Other organizations need to work on the real world. Adoption.

[B]

Yeah, yeah. What do we know about the EF people? As you said, they are crops people but I think they were all crops people, the Ethereum people to change the world. And I think that's been the more the bigger schism in the EF right now where a lot of the people who are leaving the EF are like I'm trying to change the world today and I want to bring crops to the world today. And what does that look like? That looks like, you know, impact and adoption and changing the world around Ethereum where this thousand year mandate is much more of just like hey, like we're going to maximize crops in the eventual eventuality the hypothetical, the circumstantial need, potential need for crops. And that's just not. It's hard. All these people are motivated by impacting the world and Ethereum needs to impact the world, not be a check on a particular version of the world. That might not happen.

[A]

Yeah, I get it. I think that and I think the people who would be hardcore crops would just be like, no, but like this is the one thing that we can do and it is actually the key to unlocking adoption. And they're partially right about that because Ethereum is special in so many ways. It is, I think you could argue, even more than Bitcoin, the most maximally decentralized network.

[B]

Yeah, I agree.

[A]

And that is unique, that is special and maybe adoption will come from that. Donkrad actually had this the post. He said the way to save Ethereum. Donkrad of course, former ef now at Tempo. The community needs to create an organization that's economically aligned with Ethereum and accountable to it. Because the EF only holds less than 0.1% of all eth. There is no flow of Ethereum staking or fee revenues to it. But I think donkrad is calling for like hey, there should be like capitalistic incentives. There should be number go up incentives to the organization that is helping to steward the Ethereum Foundation. My take on this has been like I would love to see some of the big Ethereum dats right? I know sharply consensus Joe Lube and he's already done so much. Tom Lee feels like new blood here. I would love to see bitmind step up and fill some of the gaps that the EF is leaving in terms of, like, global adoption. I don't know. Maybe there's an opportunity to fund some of the EF developers who are leaving to create a separate structure. Because, man, losing this talent from the Ethereum ecosystem feels like a setback.

[B]

Yeah. And they also don't want to leave Ethereum. Like, they're still Ethereum believers. They still want to work on Ethereum. I think they're just kind of looking like, how can I better commit my time and energy and actually create impact on the world? And so, like, this talent, I don't know if this talent's leaving. I think it's just trying, is trying to find a new home. Did you see Laura Shin's post about this, by the way?

[A]

I did, yeah.

[B]

Yeah, I thought it was pretty good. There's a line that stuck out to me. She said, I think Ethereum's original sin was not considering tokenomics with every move it made. From Denkun on the Ultrasound Money thesis was a good one. And with Deng Kun, they should have stopped to say that this was going to hurt the Ultrasound Money thesis and consider how perverse it is. I think that's up for debate. It's not really.

[A]

I, I debate that.

[B]

I. I debate that. What she said next, I think she says most people don't want to believe in something that isn't also putting up points on the scoreboard. True. That I believe in.

[A]

Oh, well, speaking of, David, this is the first time we've had a Bankless podcast and you are no longer holding Ether. That's right. From Bankless to Ethless. David. Why? What changed your mind? What happened here?

[B]

It's what Laura Shin said, dude. It's like there's not too many parts of Ethereum that's focused on putting points on the scoreboard. I actually think that Vitalik is doing this thing where he's trying to maximize crops to create Ethereum as a bulwark against some of the worst possible futures of the world. And I think that's great. I think there's actually a part of him who's just adverse to growth and the time for Vitalik to have, like, handed over the keys to somebody who could take the momentum that ethereum had in 2022 and 2023 and run with it and grow. It was like, back in 2023. But he sees himself as like a protector of Ethereum's soul. And if you understand the trials that Vitalik had to go through navigating all the co founder mess, you can totally understand and empathize with why he's doing that. But it seems that there are interests that prohibit, are prohibitive for Ethereum growth to happen and therefore ETH growth to happen. And a lot of the things that we see on Ethereum, like the layer twos, all of the banks tokenizing money markets on Ethereum, all this Ethereum adoption is great. The Ethereum network is great. Like Blean, Ethereum is also great. And in fact it doesn't need a valuable ether to do any of those things. Like, which has been some of the counter arguments for Ethereum for forever is like ETH is just gas. And it didn't have to be that way, but we needed to have leadership to think like that and push forward like that. When Ether wasn't gas, when Ether was more money back in a previous era. But now like I kind of feel there's just been so much momentum lost and I don't know how Ethereum gets it back. Especially when we have like a leader who's trying to protect Ethereum's crops for a thousand years and is like somewhat disinterested in growth and adoption today.

[A]

You know, there's one part there I disagree with and you'll know why I disagree, which is I actually don't think Ethereum the network work is very valuable without Ether the asset doing extremely well. And the reason for this is because I think in order to have actual decentralized finance, you need a crypto native censorship resistant store of value with like the shares of the same security as everything else.

[B]

I totally agree. Yeah, that feels like a It should be this way.

[A]

Exactly. It is a. It very much is a hopeful it should be this way. And I would also acknowledge what you're saying, which is the last cycle it hasn't put points on the board to proving the ETH is a store of value thesis to the extent which, I mean as we said since the very early episodes, money is a coordination game. Store of value is a coordination game. You have to have believers believe this thing is an actual store of value for it to become one. It's a memetic game that was like episode five we did at Bankless. It's like money is a meme. We talked about all of this stuff. Totally, totally. And while it's done well since 2020, ETH is a money meme, is in a trough, I would say store of value meme. And now it's like, oh, what is it after ultrasound money. What is it if it doesn't burn? I still think that story can change. I'm still bullish, but I understand, man. Confident. This feels a little bit to me like 2019 where confidence in the Ether, the asses at those types of lows and it feels like the Ethereum foundation is not really stepping in to help. So I get it. But this is definitely like, it marks a new era, I think, for Bankless because part of the reason we started this podcast was actually Ethereum. It was. We were excited about Defi, we're excited about crypto money and we thought Ethereum was the platform that put all of those things together. ETH as a store of value, asset defi on top of it, smart contracts, all the same environment, same ecosystems, same shared security. And you know, I think now that's like end of an era at some level, right? Like, it's kind of like we've been doing this for six years and it's just like when you tweeted that out. And this was the same week, by the way, that we had to let go some members of the Bankless team, which was really difficult. Like a bunch of team members that

[B]

have been doing fantastic four plus years.

[A]

And by the way, I should say you should hire some of these people. So the people on our media team, the people in our newsletter, fantastic people, David and I have been tweeting about them. So I'm sure they'll get. Get snapped up if they don't have job offers already. Go take a look at this talent set that we had to let go. And part of it is bear market stuff, right? Companies expand and contract. But part of it, I feel like is the end of a first era for us for Bankless, which is like Crypto, Ethereum, DeFi, six years of doing this, we brought the thesis to this point and now what's happening? Well, well, ETH probably still has another era. There's the opportunity for it to become a store of value asset. The confidence in that has somewhat decreased. But I'm still bullish. I still think it can happen. I'm still a believer. We've got things like Justin Drake's lean Ethereum, Quantum resistance scaling L1 that's happening now. We've got ETH and Ethereum is truly unique, decentralized assets. Bitmine, Tom Lee. I mean, he can come in and do some stuff. I still think the architecture is correct, but it's a different era now. We got tradfi. We have all sorts of new horizons that you want to explore too. And that sometimes I'm less interested in, sometimes I'm more interested in. But like, I think so for instance, I think hype is super cool, but is not as cool to me as Ether the asset and Ethereum when we started this thing.

[B]

I totally agree and maybe I'll take the time to talk about what's not changing at bankless. Ethereum is the most interesting thing in crypto that does not change. And like I'm not even even Ethereum

[A]

at like a very low market cap price, David.

[B]

It's more interesting when the price is higher.

[A]

Yes, it is.

[B]

But like, yeah, Justin Drake's lean Ethereum, Ethereum getting over the quantum hurdle. There are things that are like bullish and exciting and I have absolutely no interest in pivoting away from not doing content like that.

[A]

That.

[B]

So like I don't want people are thinking that I'm like swapping to being like an Ethereum antagonist. Not at all the case. I absolutely intend on covering all the interesting cool stories about Ethereum from whether it's adoption from Tradfi or again, whatever, whatever Justin Drake is building or stuff like this like that. Still going to cover all of that. I'm just not holding eth, just doing it while I'm not holding eth. And that's fine.

[A]

And that's why it is, I think, a new era in part, but the other part for some of the reasons I said. So I'm going to be stepping back a little bit from the podcast. Not completely. So for listeners, I will be here every single week for the rollup. Dave and I are going to do these together. We just enjoy hanging out, we just enjoy talking about crypto. I'm staying up to date on things anyway, so it's a fun platform to still do and we appreciate all the listeners dialing in every single week and listening to what we're doing. David is going to be taking on more guest interviews. So I'm less a part of that. I'm going to be less a part of the content focus moving forward. And what are you going to be exploring, David? On the frontier. So I know it's crypto. Is it primarily crypto? Is it other things as well?

[B]

More primarily crypto? I think when you and I would do interviews together, we would be pretty expansive about the subjects. With just one of us, I think it's just more apt to laser focus about the crypto specifics. So I'm kind of, I'm now kind of just like investigating what's bullish in crypto. As we know on the week, there are three crypto assets that hit all time highs, Hype, zcash, VVV I want to talk about those. I also want to talk about the other assets that might also hit all time highs. And so a little bit of just like learning what's bullish and poking around corners that I otherwise haven't. That I didn't mean to like offend anyone when I said on my public tweet that like, I don't have any more eth. But it's also the every conversation I would ever go into. I was always the ETH guy and that was that steered and shaped the conversation in a way that now I don't feel like I have to do that anymore. And so, yeah, a lot of crypto,

[A]

I totally get that. And I will say there's a non zero chance here that David bottom ticked. Okay, so David may have just sold the bottom. This could be the bottom signal we were all waiting for. Eth Maxis.

[B]

I'll take that too.

[A]

Guys, thank you so much for hanging with us. We will see you next week. Of course. And gotta end like this as we end each roll up. Actually, no, we have a moment of Zen too. This is a scenario where bottom. Where David has bottom sold here. Okay, we're gonna play that one for you right after the break. But gotta let you know, none of this has been financial advice. Crypto is risky. You could lose what you put in. But we are headed west. This is the frontier. It's not for everyone. But we're glad you're with us on the bankless journey. Thanks a lot.

[B]

Yes.

[A]

Sam.