← Bankless
Bankless
ROLLUP: Downtober Drags | Tempo Poaches Dankrad | Coinbase Buys Echo | Gold Surge! | Fed Access
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- [00:00]
A
Foreign.
- [00:05]
B
It is the third week of October downtober, I should say. And it's continued on the week.
- [00:11]
A
You would know, actually. No, Bitcoin up 2% on the week.
- [00:15]
B
Wait, really?
- [00:16]
A
Up 2% on the week? Bitcoin's at $111,000, which is not a cheap bitcoin.
- [00:21]
B
You know what?
- [00:22]
A
And Ether up a whopping 0.2% on the week.
- [00:25]
B
All right, so we're already doing prices. Look at how come it feels like downtop.
- [00:30]
A
How come it feels bad?
- [00:31]
B
How come it feels bad on the week?
- [00:33]
A
I mean, I think the new numbers that are bad are like bitcoin below like fourteen hundred and fourteen thousand dollars and ether below four thousand dollars. Yeah, that's a new feel bad level.
- [00:43]
B
That's why. Okay, that's why.
- [00:45]
A
All right, well, we'll talk about that Hedonic adaptation. Yeah.
- [00:48]
B
Yes. I'm not feeling great about these prices, but you're saying they're up on the week?
- [00:52]
A
They are. They're technically up on the week.
- [00:53]
B
We're going to talk about three ways this cycle could play out. Two of those ways, David, are bullish. So there's still some hope in the air. Also, a big question. Gold's been on a tear. Can crypto catch up? We'll talk about that. What else we got?
- [01:04]
A
Ethereum loses EF researcher Donkrad Feist to Tempo. That's Stripe's new thing. So the Ethereum community has kind of a split among it. So I'm just, you know, thanking Dankrad, wishing him well, like, thank you for all your contributions. And others are a little salty. A little salty. A little mixed bag. And it's kind of hard to tell what the real reaction are. It's also hard to tell which chains are Ethereum's friends versus Ethereum's competitors. A nuanced conversation we will not be using. We will not be using the A word, but we will find ways to work around that.
- [01:37]
B
I gotta find out what David means by the A word. Also, we got Coinbase. They made a big acquisition on the week, Kobe. They acquired Kobe's token investing project Echo and they also are bringing back the Up Only podcast. Also Polymarket, David strikes a deal with the NHL and DraftKings. Also, I think they have a competitor that's close behind them too. And we've got AI models, grok, chatgpt, Claude. They're all competing to determine who is.
- [02:04]
A
The best trading on Hyper Liquid. They are all making trades on Hyper Liquid and some of them are better than others. And then lastly, is The Fed about to give crypto companies direct access to Fed wire. So crypto weaving itself right into the heart of the financial system. We're going to talk about that first. This is your warning on Ryan screen. It says 40 days until bankless summit. That's actually incorrect. There are 28 days until the bankless summit. That is the Tuesday of DevConnect where we have some just absolutely gargantuan speakers speaking at DevConnect. So if you're not, if you're going down to DevConnect, which you should be because it's the crypto capital of the world, you go down to Argentina, you just fast forward five years into the future. Wait. Argument.
- [02:47]
B
The crypto capital of the world. I thought this was America. Trump told me it was America.
- [02:51]
A
Yeah. Okay. Crypto adoption capital.
- [02:56]
B
Okay.
- [02:57]
A
The one that matters. Yeah. So we got some pretty incredible speakers. Don Cred will be speaking there. I have to actually have to change the little logo next to donkrad's name to the temple logo. But he's going to be talking about Tempo. He's going to be talking about Tempo's relations with Ethereum amongst other speakers as well. Ticket prices are going up. They have been going up. If you've heard me say this multiple times, they are currently at $130 and they're going to be higher.
- [03:22]
B
That's so cheap.
- [03:23]
A
They're going to be higher by this time next week. And tickets are running out. We are going to sell out. It's a 400 person capacity event. We're going to sell out tickets and that's because it's at capacity. If you're my friend and you're like, david, I didn't get any ticket. Doesn't matter. It's too bad. Fire code. They have fire codes in Argentina. Anyways, there is a link in the show notes for you to go get a bankless summit ticket brought to you by M0. That's our partner for the Bankless Summit, Luca, the CEO founder of M0. He's going to talk about stablecoins, of course, stablecoins and their M0 platform for distributing stablecoins. It's going to be pretty good.
- [03:57]
B
We got a lot of stablecoins to distribute so we're going to need their help doing that. David, we already did prices. All right. You said we're up on the week. Give us those prices. Just to get us in the frame of mind.
- [04:06]
A
Give us $111,000 Bitcoin and $3,920 ETH.
- [04:13]
B
My God. You're right, we are up on the week. How about that?
- [04:15]
A
Technically up on the week.
- [04:16]
B
Let's talk about bitcoin performances. In other words, October's compared to this October. So going into this October is the fourth year of a bull cycle. We thought it would be bullish. Everyone in crypto thought it would be bullish because we've had a lot of up Tobers previously. 2013 plus 60% Bitcoin, 2017 plus 50%, 2021 plus 40%. 2005, it's been negative 5% in October. That's probably why people are feeling bad about this.
- [04:49]
A
It just means we're due. The other reason I think we are owed green candles.
- [04:56]
B
I mean, okay, so we're owed green candles, but we are still also above 100K Bitcoin. Okay. And it's like 102 is K. Bitcoin is the 50 week moving average. As long as we're above that price, we're still, at least compared to previous cycles, we're still in a bull market. So the question is, why is everyone so bearish? It feels like sentiment is bad. We're in the extreme fear zone of the spectrum. And Luke Martin offers one reason. What's this?
- [05:26]
A
Well, Ryan, just because bitcoin is doing well doesn't mean people own bitcoin. The middle of the market, and this has been the theme of the last like two years, is like the middle of the market is far more hollow than it has been previous cycles. This is related to bitcoin dominance. But bitcoin, you know, bitcoin's doing great. Bitcoin's on the regular path. It's always been, it's on track, it's had a good run and it's, it's kind of the only one, except for a few like small token outliers. The middle of the market, the tokens, altcoins as you call them, are all below where they were post ftx crash in 2022. Not all, but just like the majority of the market. And so yeah, just like if you were holding the middle of the market, which again is, it's not just like people's investments in like altcoin speculation. That's, that's people's jobs, that's people's like salaries, that's like BD revenue, like this is like the industry, the crypto industry. And so yeah, there's like a malaise in the middle of the market. And that has continued. It kind of has had spikes. There's been like altcoin surges, Altcoin spikes. But overall, really the only asset that's truly on track since inception is bitcoin.
- [06:39]
B
Yeah. So if you had faith in One of those 50 altcoins, now in this. In this basket that Luke is pointing out, you're still down, so you're not feeling great about this. I got to say, though, in general, the cycle has felt a little disappointing. What do you see when you look at this chart? This is a chart. Compare all the way from 2011, looking at various crypto cycles, and the percentage moves on the year and usually get three strong years. Yeah. Yeah, Three strong years. And this would be the third strong year. Right. And the new year, I guess, is the bull cycle. But we're only 18% this year on bitcoin.
- [07:16]
A
And this is supposed to be the frothy blow off top year. And we're getting to. Yeah, I mean, I just. When you ask me, what do I see when I look at this chart, I see moderation. And that's been the story of crypto since I got into it. Like, as crazy as the 2021 cycle was, like, 2017 was insane, dude. That was stupid. Yeah. And things just moderate over time. And when we get institutions in and we get ETFs and BlackRock gets involved, like, things are just not going to be as crazy. And that's kind of what I see. Like, oh, no, we're up 18% on the year. Like, okay, yeah, we're not down.
- [07:53]
B
That's. By the way, that's only if you held bitcoin. Right.
- [07:56]
A
So, although maybe we are down as.
- [07:58]
B
As somebody who is, you know, like, bullish on eth, it feels for ETH holders like they still haven't gotten it.
- [08:05]
A
Yeah. ETH does not feel like it's on track.
- [08:07]
B
Yeah. So I think it's been disappointing to a lot of folks. Dude, I was looking at this. There's kind of three cycles in or three possibilities for the cycle in the different takes here. One is that we topped already. This is Michael NATO's take. I had him on the episode earlier this week. And his point is the volume is slowing. There's no net new buyer catalyst coming. So he's like majority cash. He's like 70% cash. Another take is we're not done yet. Q4 is not over. We've got one last push. We'll probably see a bitcoin top in November, December. Ben Cowen thinks that this is a distinct possibility, but that's his take. Bitcoin top. Maybe we get an after boom after that. The third Take is more the Raoul Paul super bull take, which is we're going to get an extended cycle. And the reason here is because global liquidity ain't over and we're still continuing to print money. Crypto is up big in. Will go up more in 2026. We'll at least get a Q1 and a Q2. Probably bullish there. And look at this. In six days, David, there's going to be another Fed rate cut. It's basically 100% guarantee. So fed rate cuts too, at the same time. So an extended cycle of those three. I know which one you prefer. What's. What's your take? Like, what do you think is most likely?
- [09:27]
A
I think charting a path. If you pick a path, you're. The only way I can be wrong, Ryan, is to say one of those three is going to happen.
- [09:35]
B
Yes. So just don't say one of the three is the same.
- [09:39]
A
It's gonna be. They're all, all of those points that you just. All those particular paths, I think all have merit to them, and they will all have some semblance of the truth. And the way that the market moves forward will have some coherence between all three of those things. I think we're starting to just look closer and look more like the S and P, where we're starting to look like things are churning out less. The top 20 cryptos are starting to actually solidify themselves. And the chart that Luke Martin tweeted out is like the basket of the top 50 altcoins now trading below from where they were with the ftx crash in 2022. Those are the. The 2022 altcoins. We've had things like Athena come in and add like 6 or 8 billion dollars to the total crypto market cap, and now it's like, established itself as a top coin. And I think this is kind of just also happening slower, as in, like, things are just churning out less. And so I think we're starting to enter the. The phase where, like, crypto just slowly grinds upward for a very long time. And I think. I think maybe we're all kind of disappointed that we didn't get this, like, 20x10x phenomenon fever. But I think that means is we're not going to crash by 70, 80% either.
- [10:46]
B
Well, here that starts to indicate another possibility. And here's where you bring someone from the outside looking in, somebody from macro, and they say, this is Quinn Thompson. The current setup for Bitcoin and ETH is rare. Largest positioning rents in history. He was Talking about the washout that we got, we got liquidation cleared and opportunity ahead is similar to the pre Trump victory of 24. He's still ultra bullish on Bitcoin and ETH. And the reason he gives is like, because the question is, well, why is everyone selling? Why in crypto are people bearish right now? And he said four year cycle fears. It probably sounds silly to you coming from traditional, the traditional world, but it's a deeply held belief in crypto. They've been wrong plenty of times. But the four cycle beliefs. And so like four year cycle belief, that is so enshrined, it's very, it's part of our DNA in all cryptonatives we're like, oh, it's gotta be cycles. It doesn't always have to be in cycles. Like who said that? That's not.
- [11:43]
A
That's where I'm at. The laws of the universe, that's where I'm at. Yeah, it's like, I think we should remove four year cycle from our vernacular.
- [11:50]
B
Maybe we'll see. But they have held up previously. So you're.
- [11:53]
A
But it can't. If everything happens in four year cycles, like this is how markets work. If the market knows it's going to be a four year cycle, knowing that is what ends the four year cycle.
- [12:02]
B
Yeah. Okay, for me, David, here's the thing, here's the Zen play which is basically like you don't even have to play cycles. As you can tell, no one knows what's going to happen in the future with cycles where they're going to have them, when they're going to end, when they're going to begin, whether we even have them anymore. You still have to play them. One data point I often look at is the, the days where bitcoin and crypto just go on a rampage. If you miss those days, if you're out of the market those days, it makes a big impact in your portfolio. So here's the top.
- [12:33]
A
The top 10 days is what you mean.
- [12:35]
B
Missing just 10 days can destroy your bitcoin returns. If you held Bitcoin from 2017 to 2024 without selling, your return was 847%. But if you missed the 10 best trading days, you'd be down 23%.
- [12:49]
A
That sucks.
- [12:50]
B
Okay, if you miss the best 20, you're down 67%. If you just missed 10 days in Bitcoin, being in Bitcoin from 2017 to 2024, the difference is being up 8x and down 20%. That's the difference. And so like you don't have to play the market, you can just buy and hold. It's, you know, it's. This is why it's hard for me to like think about doing much on these cycles because we just don't know. The question is, are you bullish on crypto assets in general? Is the world becoming more digital? Is this a debasement resistant asset? If the answer is yes and you're bullish in the future, you can also just not play cycles. You could just hold.
- [13:37]
A
Yeah, I mean I think we even see that in ether more clearly. Ether went from $1,800 to $2,600 in two days and then it did $2,500 to $3,700 also across like three or four days. And then it's been flat and then it's been grinding flat.
- [13:55]
B
You're talking about just this year.
- [13:56]
A
This happened in the most recent six months? Yeah, yeah, yeah, yeah. And so yeah, like whenever I, whenever I buy or, or whenever I sell eth, which is rare, I'm always in the back of my mind and I was like, but could be tomorrow, it could move tomorrow.
- [14:12]
B
Yeah, but the thing is you gotta be careful which assets you believe in. Cause look at this, when you go back to that Luke Martin chart again. Yeah, look at all these assets that people were believing in since 2022 and they're just, they're dead. Dead networks here.
- [14:24]
A
On the flip side of things, all those tokens that were in that chart in 2022, we're all kind of like not the most high quality tokens like the tokens that died out in 2022. There's something worth noting about the current crypto meta between like Pump Fun, Hyperliquid and Athena, we have some massively revenue generating applications for the first time in history that we have apps generating a ton of revenue beyond just chain. So pump. Jason Yanowitz tweeted this out three days ago, so I'm assuming this has already happened, but he said Pump is now just $10 million away from $1 billion of all time revenue. So I'm assuming we're at like 1,05 billion of pump revenue. And so like to some degree, like this is why I think the cycles start to moderate is like when we have revenue based token analysis versus whatever token analysis we had in 2022, things can like stabilize around the revenue. And that's again, it's just a part of a maturing industry. I think that's just the story.
- [15:24]
B
I agree with that. Let's talk a Little bit about gold and broader macro here. Here's a chart for you, David. This was interesting to me. A staggering 7.5 trillion is now sitting in money market funds. This is a new all time high. Look at all this cash in money market funds.
- [15:39]
A
It's hard to reason about a trillion dollars, let alone seven of them.
- [15:43]
B
Seven trillion. Okay. It's all time high. And now that rates are beginning to go down. Right. Another rate cut may buy next week. Do you think that people are going to start deploying some of this money market fund? This is liquidity sloshing around. So that's happening in the background. We also have M2 money supply. A new all time high of 22 trillion that's going on. But actually the biggest macro story of this year has got to be gold. It's got to be gold. So gold still above $4,100 per ounce today. It got even higher late last week. And then there was like a, a day this week where there was like a 5 to 6% drop.
- [16:24]
A
Gold got spooked.
- [16:25]
B
Look at this.
- [16:26]
A
A 5 to 6% drop in the number one asset. And like gold isn't even number one by a little bit. It's number one by a lot. 6 to 7% drop in gold. That's like. How many bitcoins is that? That's like three or four bitcoins.
- [16:39]
B
Yeah, it's at least, it's at least all of crypto's market and it just lost it in one day.
- [16:46]
A
Oh, I can't comprehend that.
- [16:49]
B
Gold is still a very popular trade though. And it's been the most popular trade of the year actually.
- [16:54]
A
I mean it's turning into a momentum trade.
- [16:56]
B
Oh, let me find the chart. Look at this Long gold, institutional capital. It's the most popular trade. It's even more popular than AI at this point in time.
- [17:05]
A
Wow. Wow.
- [17:07]
B
Let me give you some other numbers on gold. Part of this. It's a big part of it. I think actually the driver of it is central banks. So this is a table year 2000 versus 2024. Look who is buying the gold.
- [17:23]
A
Russia and China, the two largest economic adversaries to the global reserve dollar.
- [17:29]
B
Yep. And they've really ramped up over the last five years. Let's say particularly after 2022 when Russia.
- [17:35]
A
Got followed by India and Turkey. Yep.
- [17:38]
B
Weird. Look who's selling gold.
- [17:39]
A
It's weird how that happens.
- [17:40]
B
It's like European countries like France. I actually learned that Canada has zero gold now over the last 30 years. They sold all their gold. They used to be top 15 gold country.
- [17:48]
A
And they were just like, that's the most Canadian thing.
- [17:50]
B
We'd rather have Fiat. That's what they did.
- [17:53]
A
That's so Canadian.
- [17:54]
B
Here's another thing. Look at this. This is a chart of foreign central bank reserves. Okay. Gold in orange and green is Treasuries. Got a flipping here.
- [18:06]
A
Yeah. Yep.
- [18:08]
B
Gold is now exceeding Treasuries in central bank reserves for the first time since 1995. 1995, it was the first time Treasuries actually flipped gold. And now it's gone the other direction.
- [18:23]
A
Yeah, I wonder if we look when we're all old, Ryan, when we're like 80, 70 and we look back and like Treasuries are like back down, closer to zero. And golds are actually back in the like all time high in central banks. Oh, remember that weird time where Treasuries were the dominant collateral asset?
- [18:41]
B
That's what weird 1970, David. 13% of central bank reserves were treasuries, 48% was gold.
- [18:48]
A
Okay, there's a fourth turning comment to be made here, but I'll just leave that to the imagination of the listeners.
- [18:54]
B
Look at this. Gold is the best performing major asset over the last 20 years. This has got to be infuriating for like everyone.
- [19:02]
A
Who the hell has gold in their portfolio?
- [19:04]
B
Okay, 11% annualized return, number one. It beats the US market at like 10.9%. It beats small US stocks, REITs, bonds, and beats every single asset class. All you had to do over the last 20 years was hold gold. No other decisions.
- [19:22]
A
Yeah, but that's also kind of not fair because it's a bit cherry picking because we happen to be talking about gold when it's peaking at a very high price.
- [19:31]
B
And so, okay, look at it over 10 years, look at it over 5 years. Look at it over 3 years, look at it over 1 year on all of those oh God, maybe dimensions it's exceeded. I mean, that does got to mean something. This is kind of a disturbing tweet too, which is like this is a chart of the hours of work to buy one ounce of gold. This spike up. So it takes a lot more work to buy gold. This is something about debasement. Also says something about the relationship between labor and capital. And it says something about capital unrest as well. You could see so much in gold, but like the question is, could it move even more?
- [20:11]
A
You gold pilled?
- [20:12]
B
I don't know. I'm just so fascinated by gold right now.
- [20:15]
A
Wait a second, what's going on here?
- [20:18]
B
Well, we haven't talked about the crypto gold catch up trade, which. Which could happen, by the way. Okay, look at this. As a percent of share investable assets, though, gold is only 6% and it's moved up from 4% two years ago. So that's still not its peak. 22% is its peak. What I'm saying here, David, is gold could still run for a lot longer.
- [20:40]
A
Dude, Ryan's turning into a gold bug.
- [20:43]
B
No, I'm not. No, I'm not. All that to say this. All that to say this. Bitwise, put out a chart that says a 5% capital rotation from gold to bitcoin. You know, if people get sick of the physical gold and they move to Bitcoin, 5% could send Bitcoin to $42,000.
- [21:03]
A
Wait, wait. So if 5% of gold was sold to buy bitcoin, bitcoin goes to a quarter million.
- [21:10]
B
Yep. Capital rotation. Right.
- [21:12]
A
So why do I feel like 5% is kind of a lot?
- [21:15]
B
Because it's a lot of money. That's a lot of money. But it takes a lot of money to move bitcoin these days. But I mean, if you'd like physical gold, why not? Don't you like digital gold? Come on, right?
- [21:25]
A
I don't know. You should ask Peter Schiff.
- [21:28]
B
Peter Schiff's never going to be convinced. I heard actually he was launching tokenized gold on the blockchain earlier this week.
- [21:34]
A
This is hilarious.
- [21:36]
B
Yeah, good for him. Right? Wow. Anyway, coming to the story, we're going.
- [21:41]
A
To get into some crypto native subjects. We're going to talk about prominent EF researcher Dankrad Feist, of which Dank Sharding is named after, has left Ethereum to get a new job. Where did he go and what does that mean for Ethereum? Ryan? Not only has he been gold pilled, but he's also been bitcoin pilled. So he's going to talk to us about knots versus Core. Yeah. And his political stance as to which bitcoin side of this re emerging civil war is Ryan on.
- [22:09]
B
Yes.
- [22:09]
A
And also right before he started recording, Trump pardoned cz. So we're going to talk about that and more. But first, a message from some of these fantastic sponsors that make the show possible, like Uniswap. It's a browser wallet. It's a mobile wallet. It is the fastest chain ever and it's the best place to do defi. Let's go hear from Uniswap right now. Ethereum's layer 2 universe is exploding with choices. But if you're looking for the best place to park and move your tokens. Make your Next stop Unichain first. Liquidity Unichain hosts the most liquid Uniswap V4 deployment on any layer 2, giving you deeper pools for flagship pairs like ETH USDC. More liquidity means better prices, less slippage and smoother swaps. Exactly what traders crave. The numbers back it up. Uni chain leads all layer twos in total value locked for Uniswap V4. And it's not just deep, it's fast and fully transparent. Purpose built to be the home base for Defi and cross chain liquidity. When it comes to costs, Uni Chain is a no brainer. Transaction fees come in about 95% cheaper than Ethereum mainnet, slashing the price of creating or accessing liquidity. Want to stay in the loop on unichain? Visit unichain.org or follow unichain on X for all the updates. Bit Digital Ticker BTBT is a publicly traded ETH treasury company that combines the two biggest metas of our time, Ethereum and AI Compute. Bit Digital believes that ETH will power finance and AI Compute will power everything. Bit Digital gives you direct exposure to both. Bit Digital holds more than 150,000 ETH with institutional grade staking and validator operations. On top of that, the company owns roughly 73% of White Fiber, an AI infrastructure business that runs high performance GPU data centers. That adds a meaningful exposure to the growth of AI compute with over 27 million shares. This is an Eth treasury backed by real operations designed to capture staking yield today while positioning for the future of intelligent computing tomorrow. The ticker is btbt. This ad is not financial advice. Do your own research, learn more about Bit Digital and try their M Nav calculator at bitcoin hyphen digital.com that's bit-digital.com Bankless is being compensated by Bit Digital for this ad. You can find out more information by clicking the link in the show Notes Introducing Kgen AKA Verify, the world's largest verified distribution protocol or vdp. If you're trying to grow a real protocol or app, you need real users doing real actions. If it's not Verify, it's just noise. At the core of Verify is Poggy Kjens identity and reputation framework. It helps you reach humans, not bots. Improves what your users actually did so your budget goes to the right people. With Verify, you can run verified user user acquisition with confidence, keeping people coming back with retention tools like Loyalty Rewards, Quests and achievements and even power AI training and evaluation using trusted verified user groups, ensuring your models learn from clean data. And when it's time to reward your community, there's the K Store, a global rewards marketplace where users can redeem perks that connect directly back to your app. Put simply, when growth is built on real users, you grow faster. And that's exactly what Verify delivers. If you're building a Web three AI or gaming, request a demo to grow your protocol@www.kgen.IO demo. That's www.kgen IO demo.
- [25:04]
B
This is CZ, the founder of Binance. Deeply grateful for today's pardon and to President Trump for upholding America's commitment to fairness, innovation and justice. We'll do everything we can to help make America the capital of crypto is and Advance Web3 Worldwide. He's still got more to come. TRUMP Pardon cz David that's what happened on the week. It just happened at the time of recording. This was reported by the Wall Street Journal. Trump Pardons Convicted Binance Founder There is a press secretary in the White House who said Trump has exercised his constitutional authority by issuing a pardon for Mr. Zhao, who is prosecuted by the Biden administration and in their war on cryptocurrency, she then added, the Biden administration's war on crypto is over.
- [25:55]
A
Okay, so let me, let's just refresh the listeners. Why was CZ convicted at all? CZ was convicted for violating the Bank Secrecy act. So being intentionally and with awareness lenient on KYC on the Binance platform, allowing money laundering to occur and knowingly so, especially with terrorists. And so like when we were talking about this, when this was happening, you and I, I think we were of the opinion of like, you know, CD hasn't really harmed any retail individuals. No one was really harmed. Maybe, you know, funneling money into terrorist organization, that, that can totally count as harm. But really it was an offense to the nation state's banking apparatus. Binance was and so they charged him with violating the Bank Secrecy Act.
- [26:41]
B
So there was also, I'd add here too, there's also, it seemed like some selective punishment going on. Right. So there's a lot of different entities in crypto you could go after for aml KYC stuff. And they went after C trad fi.
- [26:54]
A
Banks you could go after for AML kyc.
- [26:56]
B
So there was definitely some selective punishment that felt. Yeah, like there was some, there was some story there, some, some reason they targeted him specifically.
- [27:06]
A
Yeah. And so they. He paid a 4 billion. Binance paid a $4 billion fine and then he went to jail in Seattle for four months and then came out. Does he need to get pardoned for that?
- [27:16]
B
I think it was. It was longer than four months, wasn't it?
- [27:18]
A
No, no, no, no. That was the whole. Remember when it was announced that he had a four month sentence and because it was four, like crypto Twitter, like blew up. Yeah, yeah, yeah. Does he need to get pardoned for that?
- [27:30]
B
Well, I mean, he's a felon, so that's on his record in the U.S.
- [27:33]
A
And he's not even a U.S. citizen. He doesn't even live in the U.S. doesn't he?
- [27:37]
B
I don't know, actually. I think he has family in the US or something. I'm not sure. I'm actually not sure. Don't quote me on that. But also, he can't operate Binance under the terms of the court case. Right? He can't go back to Binance. He can't be in crypto. He can't do stuff in crypto. And this pardon alleviates that.
- [27:55]
A
Wait, does that. Yeah. Part of this was that Binance cannot operate in the US does that, is that pardon?
- [28:02]
B
That's a separate step.
- [28:03]
A
That's separate.
- [28:03]
B
That's separate. That's separate. But, but CZ specifically could no longer, I think, being crypto. And actually he certainly couldn't be the CEO of Binance or be involved in that way.
- [28:13]
A
So now he gets to go back to Binance.
- [28:16]
B
He could, I suppose. I think again, the details of this are not clear, but we do know that CZ wanted a pardon. Arthur Hayes got a pardon too. So similar situation, of course, with Bitmex perps exchange. Arthur Hayes was on house arrest, so didn't go to jail, but he got the Trump pardon. Remember when we talked to Arthur, we were like, hey, what's your advice for getting the pardon? I don't know. He said something silly. He said, like, write those letters and you know, just. I don't know what he said.
- [28:42]
A
I'm assuming that earlier, before Trump pardoned, money went from ZZ's hands and then ended up in Donald Trump's.
- [28:52]
B
Do you think so? Do you think so, David?
- [28:54]
A
Yeah, I think, I think Donald Trump has more money in his pockets today than, and because of that fact has pardoned, I think.
- [29:03]
B
Okay, but I don't know. So that's. That. That would be an allegation, of course, but there's like all sorts of direct ways to sort of quote unquote, put, put money in Trump's pocket, Right?
- [29:13]
A
Sure. Yeah. He has you can open so many different doors to putting money in his pocket.
- [29:18]
B
All sorts of assets that you could buy, including meme coins, you could do. Like, there's all sorts of ways you can sort of grease those wheels.
- [29:25]
A
If you want to just, like buy $10 million of my meme coin and burn it for get out of feel free card.
- [29:32]
B
That I think is just like the thing that does not feel great if presidential pardons are for sale. Like, if you want a pardon, I don't blame you for trying and paying to go get that. But, like, presidential pardons should not be for sale. At the same time, like, CZ was selectively prosecuted for aml kyc and like, the war on crypto is over. I mean, that's a true. That's a through line as well.
- [30:01]
A
Mm.
- [30:02]
B
No, it's hard. Here's my line, though. Do not pardon Sam Bankman Fried.
- [30:05]
A
Do not pardon Sam Bankman Fried.
- [30:07]
B
All right, that's at least my line. Tell.
- [30:11]
A
Donated way too much money to the Biden administration to get a pardon from Trump.
- [30:15]
B
You never know. Like, I. That could. This could be a headline. I'm sure there's a polymarket for this. But tell me the story. Donkrad.
- [30:23]
A
Yes.
- [30:23]
B
EF researcher moving to Tempo. What's happening here?
- [30:27]
A
Yeah, so Don Cradd announced on Twitter that he is leaving the Ethereum foundation to join Tempo. So again, maybe a little bit of backstory on who donkrat is pretty prominent EF researcher, would you say?
- [30:39]
B
David on the Mount Rushmore of Ethereum. You say one of those four sort of figures?
- [30:44]
A
Yeah. Yeah. I don't know who is more significant to Don Grad after Justin Drake. So, like, Justin Drake's. Justin Drake's definitely on Mount Rushmore. And then after Justin, I don't know who comes before Don Grad, but like donkrad. I mean, like, again, there is a part of the Ethereum protocol named after donkrat is called Dank Sharding. It's one of the reasons why Ethereum Layer twos are going to become hyperscaled is because of dank sharding. It's like the original inception of sharding. Anyways, he's been. Donkrad has been one of the chief pushers for aggressively scaling the layer one and doing it so aggressively that it's like, kind of pushed against Ethereum culture where, like, donkrad wants it in the protocol to automatically scale the layer one, like, automatically. And if we think that it's going to 3x per year. 3x per year in, like, Programmatically, just like saying, hey, that's what's going to happen. And if we don't want that to happen, we can hard fork away from that. But having that happen by default. And it's been like, it's saying, he said he wrote this blog post and like, hey, we, we need this level of aggression or else Ethereum is going to become irrelevant. So he's like kind of the guy that's like, I think, frustrated. Some of his goals and aspirations for Ethereum were kind of thwarted or frustrated by just the bureaucratic, slow consensus, rough consensus nature of Ethereum.
- [32:00]
B
It's a big ship to turn.
- [32:01]
A
Yeah, big ship to turn. And overall, just a great guy again. He's speaking at the bank of the summit. He's going to. He's been around the Ethereum community, extremely well respected. He tweeted out. I'm excited to announce that I will be joining Tempo. This last year has been a turning point for crypto, where we have finally seen the outlines of our vision being materialized. While payments used to be front and center in the early days of crypto, I see a special opportunity to finally achieve this ambitious goal with relentless execution on both the technical and distribution fronts. I believe the real moment is now and I want to make sure that we do not dismiss this moment to touch normal people's lives. That was his tweet. He goes on to say a little bit about his history in Ethereum. And this was, this was surprising, I would say. I did not see this coming of this, like, high caliber of talent going straight from the Ethereum foundation to Tempo. We've seen like pretty big talent moving to Tampo elsewhere, like Liam Horn from Optimism, Malesh from smg. So, like pretty big people. Don Cred is in a league of his own. And so this kind of like, was a big shot, maybe call it a shot across the bow on the Ethereum community of simply the level of, like, talent suck that Tempo is causing across crypto.
- [33:13]
B
It caused a lot of conversations for sure. So Donkrat had been in Ethereum for seven years, so of course, like people aren't going to. I mean, it's not a lifetime commitment. You're not like a Supreme Court justice. Right. So of course people are going to move on. I think part of the reaction was like, where he moved, which is, which is Tempo. This is Stripe's Layer one. Okay. So Stripe invested in it. It's also a paradigm invested in, kind.
- [33:39]
A
Of built by Paradigm.
- [33:40]
B
Right. And it's going to be an EVM chain, but they claim they want to be as permissionless and decentralized as possible. So it seems like with all of the forces they're assembling, they're almost going to like front run Ethereum's roadmap. And I think that's likely case, right? They have Giorgio's with with ref and that Ethereum client. So I mean that could be a good thing for Ethereum in some ways which is just like you almost get to like test out all this frontier tech in a production ecosystem. They're building this back their engineering so long as they're open source and they, they give this back to the community. People like Donkrad, you know, the likelihood of that being the case increase. But also it's a separate layer one. It's going to have its own token, one would presume it's going to have its own economic incentives. It's going to take state stablecoins assets attention users from the rest of crypto, including Ethereum. At least this is the possibility. So like the same day, which was really interesting, Tempo announced a raise of $500 million at a $5 billion valuation. So how do you pay those investors back? You have to carve out some market share, right? You have to compete in the space of chains. But are they competing against Ethereum? Are they helping Ethereum? It's kind of squishy. What's your take on all this?
- [35:03]
A
Yeah, I've read a number of people's tweets and announcements saying hey, I'm excited to announce that I'm going to and basically all of these tweets have two of the same components in them. One is the time is now to take blockchains mainstream and provide real world value to everyday people. That's the first one. And then the second one is Tempo will grow the pie for all of crypto. I see those same two components in like everyone's announcements. That second one, Tempo will grow the pie for all of crypto is like probably true. Like the pie will grow. Crypto adoption will happen faster. What is not said is that Tempo, just like every other layer one has every incentive to gobble up as much as that pie as possible. They, they want the pie. That's the whole premise of building a layer one and even addition in addition to that. Like Tempo is supposed to be a payments focused chain. That's where they penetrate. Like Tempo in the future will happily have any valuable defi application that suits it and so like it, it'll eventually become a very generalized multipurpose layer one that just has Very high throughput. It's just starting with stablecoins which is a fantastic place to start because you, you always want to penetrate with a niche but the stablecoin niche is huge. It's billions of dollars, soon to be trillions of dollars. And so like some people are kind of like calling, throwing flags saying like yeah, you know Tempo is good for Ethereum. The only thing that is this is equivocally, unequivocally good for is the evm. The EVM takes home a huge victory here because the Tempo is the Ethereum virtual machine. But again the economics of Tempo are for Tempos to own and not Ethereums. And that's just to be expected from a corpo stripe chain that wants to do what it wants to do. And this is all pretty rational.
- [36:51]
B
Some people saw this as basically a corporate chain, VCs raiding a public good. This is David from Blockwork saying that's a nice public good he got over there. It'd be ashamed if we ripped it off, hired all the talent that built it, used our massive distribution to ensure no one ever uses again. Joe Lubin had a take here. He of course is Ethereum co founder, founder of sbet. Right now it's a pretty long take but basically he admits that Paradigm which is a VC behind this has been trying to control Ethereum for a while. That was his take control. But he also said that they were developing Ethereum too. Certainly they've given back a ton to the Ethereum community and overall he's not worried because corporate blockchains are a gold rush but they can't compete with permissionless, credibly neutral, decentralized non corporate chains like Ethereum. And while he'd prefer folks like donkrad to focus on Ethereum, they probably need to, they need new challenges to stay motivated. Basically this is kind of what happens. So all sorts of takes in the community here. I think it did boil down to like which chain is Ethereum's friend and which is not.
- [38:01]
A
Overall this idea of that there's this boogeyman EVM alt layer one out there that's going to pay much more money, much more profit motivated rent seeking chain is going to pay for the talent and just co opt the EVM and all the other like public goods that's always been this like theorized boogeyman. Like Avalanche for example. Again an EVM all air one tried to pay Peter Silgazi from from Geth like a very high salary to defect from Ethereum and go to Avalanche. So like this concept has been out there. I think Stripe is. And Tempo is like the actual real instantiation of this. And so like, yeah, people in Ethereum are like valid, their fears are valid. But it's again, it's just, it's partly rational. I think people are just kind of disappointed because, you know, Ethereum has these principles and these, this ethos and it's special. And you can't recreate Ethereum in the same way you can't recreate Bitcoin. And so people are kind of bummed that like Tempo is even existing at all. And like, I, I understand that. I think it's fine to be bummed. I don't think it's, it's just, but again, it's just rational. So like there's no point in complaining about it.
- [39:05]
B
Do you want to talk about the fight for Bitcoin Soul move from Ethereum, Davis?
- [39:08]
A
Okay, so, so Ryan, Ryan's gold bugged, but now he's also bitcoin bugged?
- [39:12]
B
Well, no, I've just been following this, this argument in the bitcoin community, just like at a surface level. But I find it kind of interesting because it's an argument for whether the block space on Bitcoin should be neutral or whether it should be bitcoin only. When I say neutral, what I mean is like, can you store other things inside of the block space.
- [39:32]
A
Like ordinals?
- [39:33]
B
Yeah, like ordinals. Basically, bitcoin.
- [39:36]
A
This debate has been happening for a while, right?
- [39:37]
B
This has been happening for a while, but the reason it's heated up is because Bitcoin Core recently unveiled an upgrade which would basically expand Bitcoin's OP returns. That's the data field where they, you know, put all sorts of non bitcoin data. The arbitrary.
- [39:52]
A
It's like Ethereum blockchain arbitrary data.
- [39:54]
B
Yeah. Remember the tokens that they were launching inside of the OP return blob space? Anyway, they're increasing the data fields from 80 bytes to 100 kilobytes. So this is a 1280x increase. Right. So they're basically saying, yeah, like stuff our blocks full of.
- [40:11]
A
And that's also, that's the difference between like text only and an actual compressed JPEG for sure.
- [40:18]
B
Right. You could store a lot more in that space with 1,280. And so the people who think that bitcoin block space should just be auctioned off to the highest bidder and you shouldn't control what's actually inside of the block space, whether it's bitcoin or Whether it's some other kind of data, those might be the bitcoin core folks, right? Sort of maybe call them the neutral blockers or something. Or the neutral block space people. There's another group in the bitcoin community with a forked client of bitcoin core called bitcoin Knots. And what the knots community is doing.
- [40:53]
A
K N o T S. Yes, that's right.
- [40:55]
B
And what they're doing, Luke Dash Jr. He's a Bitcoin core developer, he's kind of like forked this and launched this. It's got about 30% of all Bitcoin nodes that are running knots right now. So it's like a sizable portion of the community and been growing fast. They want to block, they want to filter out all non money transactions from their clients. They could do this locally at the client level. So if it's something like ordinals, if it's all the stuff in the block space that they don't want, they just basically filter it out. Okay. And so this has caused a big community like Rift a cultural question of like what is bitcoin block space for? And the knots people say it should only be for bitcoin. It should like just financial transactions, basically.
- [41:38]
A
Bitcoin is for bitcoin.
- [41:39]
B
Yeah. And part of their rationale is like, well, if you start shoving other things inside of it, you could, you could, you know, shove child pornography in it, for instance. You could shove all sorts of unsavory things that could be illegal. And then in various jurisdictions around the world, people would refuse to either more morally, ethically or legally run bitcoin nodes. And so we'll have fewer nodes out there.
- [42:00]
A
So yeah, some people are saying that this is a potential attack on bitcoin because a state, a somebody who is interested in taking down the bitcoin network can leverage this space in bitcoin blocks to put illegal pictures in there. And then like people running those nodes are like almost compelled to shut down their node because it's illegal to host those pictures. And so it's an attack on bitcoin. It's actually a risk to bitcoin.
- [42:27]
B
That's right. That's exactly right. And so the other side, kind of the neutral side, the bitcoin court side, says no. Bitcoin has always been a system that basically operates based on neutrality of block space. And it's the economics and self interest anyway, that's the debate that's going on in the community. Greg Maxwell, original bitcoin developer of legends and lore, weighed in and he's basically on the neutral block space side of things, but people are firing back at him, and it's quite the debate, quite the controversy. So I've been roughly following it. We're actually trying to schedule a debate between Eric Wall, who is on the neutral block space side, and somebody from the Naz community to go debate him. And so we can surface some more of these issues. But it's been fascinating to watch.
- [43:10]
A
The problem with that is that the people on the knots side are just the most. Most hardcore bitcoiners. And so, like, not only do they not want to go on a shitcoin podcast, but Eric Wall is too much of a shitcoiner to even, like, legitimize.
- [43:26]
B
Because I think he's been called a scammer by Luke Dash Jr. And such. So I just.
- [43:30]
A
This is something I actually kind of just love about bitcoin is like, you take a. Like, they take a difference between like 28 bytes and 1,208 kilobytes or something.
- [43:41]
B
Yes. And they make it a hell to die on.
- [43:43]
A
They make it a civil war of a philosophical difference, of just. This matters so much. Like, it's three. Three bytes, dude. Three bytes.
- [43:54]
B
But it matters to a lot of people in the bitcoin. Like, it's an unresolved debate, and actually, I'm not sure how it will resolve. Yeah.
- [44:01]
A
Okay, so. And one of the reasons why it's. It's happening right now is because there's now two different versions of bitcoin. There's bitcoin Core and bitcoin Knots. And Knots is gaining market share. And so that's like, you know, the different Ethereum client Geth or Prism or whatever. And one of them has a more opinionated stance about bitcoin. And the knots side is growing in market share because people like Luke Dash Jr. Are saying, like, yeah, downloaded run knots don't download Core.
- [44:24]
B
When you start filtering bitcoin blocks, though, like, where does it end? Is that not a slippery slope? Like, I wonder about that, and I worry about that. What if it becomes illegal to, you know, transfer bitcoin because of OFAC sanctions? There's, you know, like, it's become acceptable to filter that out. Like, what happens? Right.
- [44:42]
A
Can I say something, Ryan?
- [44:44]
B
Oh, you want to weigh in on this bitcoin or deep bitcoiner argument? Go ahead.
- [44:47]
A
I kind of like the knots.
- [44:49]
B
Oh, my God.
- [44:50]
A
I kind of like the knots. For bitcoin, for bitcoin, for bitcoin, for bitcoin.
- [44:55]
B
Because there's Ethereum and other Chains that are doing other things.
- [44:59]
A
Yeah, exactly, exactly. Like Bitcoin is never going to have robust defi. So like I might as well prune it out and just focus on Bitcoin. The cool thing about this is that there is a very similar, not a debate but a conversation in Ethereum about fossil and fossil is this part of Ethereum which forces nodes to download data, the node ahead of you? So like when, when you're running a node, when you're staking eth and you see transactions that you can't fit in your block but you want the next person to put it in their block, you can force the person to download their transactions and put them in the block and that is a complete. It's the inverse of knots which is like preventing any sort of data. You're actually forcing people to download the requisite data in order to run your Ethereum node, which is actually crazy.
- [45:48]
B
It's an extreme take at some level. It's a censorship resistant maximalist take. And Ethereum is probably going to be implementing this next year, which is wild. Yeah, these networks are really diverging in truly important ways. David, we got more to discuss. Coinbase bought Echo from Kobe for almost $400 million. We'll talk about that. Also, is the Fed allowing crypto companies on fedwire? I think so. There's an AI trading competition going on as well. Grok, Chat, gpd, Gemini, Claude, we gotta check in, see who is the best trader. All this and more. But before we get there we want to thank the sponsors that made this possible, including our friends over at frax. Let's go hear from them.
- [46:25]
A
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- [48:52]
B
A beloved trader, I would say, who has not scammed anyone.
- [48:55]
A
Trader and social commentator. Yeah, and like you know, pretty, pretty, pretty smart. Like pretty smart guy. And so when they, when they shut down upon not too terribly long after that, he jokingly made this NFT and listed it for something like $25 million. I think it was like $40 million or $50 million. But he had to, he had to lower it because like he was talking.
- [49:16]
B
About someone buys it then they would come back up over.
- [49:18]
A
Yeah. So it's like whoever buys this nft, we will come back for an eight episode Season. Yeah, we. And then there was like a bunch of like funny ass, like parameters. It was like. And we. We are not obligated to like talk about. You are not sponsoring this. We get to pick the guests if we like you. Yeah, it's like very gone brain for copy. It's just like, I'm too fucking rich to care. Coinbase buys this NFT and everyone on Cryptojeer is like, what the fuck just happened? Why did coinbase buy this NFT? It's a terrible marketing ROI. 25 million for eight episodes and there's no guarantees of like any sort of like whatever.
- [49:52]
B
Yeah, 3 million per episode.
- [49:53]
A
Yeah. The next day it's announced that Kobe's ICO platform, Echo was sold to Coinbase for 375 million. And I can only assume, assume it's in a part, part stock, part cash deal. I can only assume that the cash is the $25 million that he got, the rest is stock.
- [50:10]
B
Or it's all negotiated as part of the same.
- [50:12]
A
It's all part of the package. Yeah. And so they, they did it as a marketing stunt, which was pretty. Pretty savvy of them.
- [50:16]
B
Yeah, pretty. Pretty well done.
- [50:18]
A
Yeah. And so why did Coinbase buy Echo? And what, what is Echo? Echo is a place for individuals, both accredited investors, to access private sale and then later retail investors to access public ICOs. Like Mega ETH, for example, is running their public ICO on. So which is Echo's ICO platform. And so it's just a KYC platform that also just helps you launch and list tokens.
- [50:42]
B
Right.
- [50:43]
A
And Coinbase is building out this, I'll call it this, like Internet capital formation pipeline, which they are a part of because they have like the spot. The spot trading and the margin and all that kind of stuff. But they are also building out. They also acquired Liquify earlier this year. Yeah, Liquify, which is a place for you to kind of like start your startup and then also issue rewards to your employees and stuff like that, like compliance for token startups and stuff like that. And then Echo and Sonar kind of fit in the middle of this pipeline, which is like, okay, now that you are ready to like go public and have liquidity, you can do some of your final public sale private sales raises, Series A, whatever, inside of Echo and then also with Sonar. And then once those tokens are listed, like what do you think, where do you think the liquidity is going to be found? It's going to be found on Coinbase. So Coinbase now has a kind of a complete End to end capital formation pipeline, which is pretty cool. And so that's why they acquired Echo. So you got to tip your hat to Kobe for a $375 million exit. He started building Echo like two years ago, so incredible returns. Yeah. And then also we get up only back for eight episodes. That's pretty cool.
- [51:48]
B
It is. It is kind of cool because it's giving retail access to more deals that basically only VCs would have access to. And I think that was his whole founding mission and so he brought that to completion. It's going continue at Coinbase. So I mean, like, well done there. Speaking of Brian Armstrong and Coinbase, he's on Capitol Hill right now and he's got some news about the market structure bill. Let's play that clip now. Hey, everyone, Brian Armstrong here. I'm back in D.C. and even though the government is shut down, the Senate is working hard on getting market structure legislation passed for crypto, which is great to see. I attended some meetings this morning with both the Senate Dems, the Senate Republicans, and I'd say they're 90% percent on the same page. There's draft text being shared back and forth between both parties. Both sides want to get this done. That last 10%. There's a couple remaining issues open, like for instance, DeFi. We want to make sure that we're pushing to protect Defi and all the innovation potential that can have and that the centralized intermediaries in crypto, like Coinbase, should be regulated, not the protocols. And then, of course, we're making sure to preserve stablecoin rewards for you as well. The big banks are coming for their cash grab, trying to block that, even though it was just recently decided in the Genius act, which just recently became law. We're not going to let them re litigate that. So with these last few issues getting wrapped up, we're hoping to see this bill by come out of committee by Thanksgiving. That would be a great outcome. Fingers crossed. We're going to keep showing up for your rights and we'll keep you.
- [53:12]
A
Thank you for the source.
- [53:13]
B
You know what, I'm really glad he said that. I'm glad he said that about Defi, though. Do you remember when SBF was in Capitol Hill, he was the only one lobbering for us and he was basically on the side side of let's aml kyc, all the defi and all the front ends, and that's the only way the US is going to allow us to do this. He didn't even put up a fight and that was so contrary to the entire reason we're here. So let's hold Brian to that.
- [53:35]
A
Right.
- [53:36]
B
If he's going to lobby and represent crypto, he's got to be supportive of Defi, and he says he is, so that's fantastic. David. Polymarket with some news on the week. Polymarket and the NHL. What's this?
- [53:49]
A
Yeah, so it was announced that polymarket is the official prediction market for the NHL. So, like, top, pretty big sports league. I mean, not bigger than football, not bigger than baseball. Top four. I don't know what the third is because I'm not a sports fan.
- [54:04]
B
NBA, man.
- [54:05]
A
NBA. Yeah, yeah, sure, sure, sure. And so, yeah, polymarket is the official prediction market for the NHL. Onto the next bit of news, it was also announced that Kalshee is now the official prediction market for the NHL.
- [54:19]
B
Wa. You said NHL? Both NHL.
- [54:23]
A
Yeah, they both announced this at the same time.
- [54:26]
B
That's so crazy. Who got there first, though?
- [54:28]
A
Kalshee tweeted it out first.
- [54:30]
B
Oh, they did?
- [54:31]
A
Yeah, they had. They. They beat him, like, by an hour or something.
- [54:33]
B
Oh, my God.
- [54:34]
A
I'm like, what the hell is going on here?
- [54:36]
B
Yeah, what is going on?
- [54:37]
A
The. The word the implies that there's only one, but there's apparently two official prediction market partners of the NHL. So a little birdie came into my DMs and whispered something to me. So here's a rumor, Ryan, is that these big corpo accounts and the NHL, it would be one of them. I think Twitter also did this. Just smells the blood between Kalshi and Polymarket and they just caused them to bid each other up. And so they, like both Kalshi and polymarket presumably paid the NHL, saying, hey, tell the world that we're your official prediction market platform.
- [55:10]
B
Yeah.
- [55:11]
A
And then NFL's like a sweet deal like call. She's offering this much. So Polymarket, like, you're have to beat their price. And then. And then they go to call. She'd be like, well, Polymarket's offering us this much, so you have to beat their price. And then they take both because apparently that's allowed. No, no, that's gammy. That's scammy.
- [55:29]
B
No, it's not. Whatever, it's fine for. It's fine for whatever consumers, you know. Well, I guess benefit. Why not put these things on both platforms? Why does one have to be the official.
- [55:38]
A
I mean, if I was either Kalshi or Polymarket, I'd be pissed.
- [55:43]
B
Oh, of course I would be pissed. I'm talking about from the Consumer though, I'm talking about from the user's perspective, like, whatever. Let these, let these two giants compete for our love. That's what I say. They'll get better in the process.
- [55:55]
A
Not doing that. Yeah, that's just the NHL opportunistic.
- [56:00]
B
Okay, what is this, though? Polymarket is acting as DraftKings clearinghouse now. So we did this whole thing about sports books versus prediction markets.
- [56:09]
A
Really good episode. I enjoyed doing that.
- [56:10]
B
Okay, now, prediction markets teaming up with sports books. What's happening here?
- [56:15]
A
No, no, no, no. Not teaming up.
- [56:16]
B
No.
- [56:17]
A
Defi Mullet, Ryan. Defi mullet.
- [56:19]
B
What?
- [56:19]
A
So DraftKings in the front, polymarket in the back.
- [56:23]
B
No way. So they're just gonna be the UI for polymarket?
- [56:26]
A
Yeah, yeah, yeah, yeah. And so like, because DraftKings can't. Doesn't have a CFTC license, they're registered as a casino. What they are doing is they are just being the front end to polymarket.
- [56:36]
B
If you can't beat them, join them.
- [56:37]
A
That's right, that's right, that's right. I think that's brilliant. I think that's brilliant.
- [56:43]
B
Polymarket also getting into every crypto wallet on the planet. So metamask, that was a week or two ago. Now Rabi Wallet is going to have polymarket prediction market. Gotta be Phantom next. I think they'll all have. It's a source of revenue for wallets and why not? David, a blast from 2022. OpenSea is doing something. This is a tweet from Devin Finster. OpenSea crossed 2.6 billion in trading volume this month. Wow. That's actually impressive with 90% from token trading.
- [57:14]
A
But now transitioning importantly, Ryan, not NFT trading, token trading. That token word is important.
- [57:19]
B
NFT marketplace to trade, everything. Okay, what's happening with OpenSea? What are they doing?
- [57:24]
A
So they announced the Sea Token. That's actually what this tweet is. Sea Sea. And so they are. They're finally doing an airdrop. I think that's probably why they crossed $2.6 billion in trading volume is because people are like, oh, token, no, no, I love opensea.
- [57:42]
B
Let me go trade. Yeah.
- [57:43]
A
But they've also expanded just being an NFT platform to token trading. And this is what Denver's saying. It's like, okay, OpenSea needs to pivot because NFT volumes are just dog. And they just have not come back. They blew up incredibly in 2021 and then they just went to zero. So they need a new business. So they're expanding their platform to be the trade everything up and so that's what the announcement is. And then also the C token from the OpenSea foundation is coming, will be in Q1. 50% of the supply will go to the community, which is a large amount. A large amount. And then 50% of the revenue from OpenSea will go back to buy back the seat.
- [58:20]
B
David, you think that's gonna make up for any of the money lost on NFTs, man? Or money we all collectively lost, bro.
- [58:27]
A
I'm up on NFTs. I don't know. No, you aren't.
- [58:29]
B
You're the only guy. Are you actually up on NFTs?
- [58:32]
A
I mean, my CryptoPunk has saved me quite a lot because I bought my cryptopunk early.
- [58:37]
B
Besides cryptopunk, are you anything?
- [58:39]
A
Every other NFT I'm down bad on?
- [58:42]
B
It's been brutal. They did not come back this cycle, that's for sure. Yeah, this is some cool news. So the Fed, David, is going to give crypto companies direct access to fedwire. All right, so have you ever tried to wire something into a crypto exchange, like into Coinbase or something like that? Yes. Okay, so what you'll notice is you're actually not wiring it directly to Coinbase, like you're wiring it to Coinbase's bank. Right. It's like customers bank or something like this. And you have to do that. Even brokerages, they all have these go between banks. It's the banks at the end of the day, because the banks are the only ones connected to fedwire. That's where wires are actually settled. Well, Chris Waller came out, so he's one of the members of the fomc. Governor Waller said that they were going to create skinny accounts so that crypto companies, stablecoin companies, organizations like Coinbase, could access fedwire directly and they don't have to go through banks. This is pretty historic because this has never happened before. Used to be the groups, the nodes that could settle onto Fedwire, let's call it, were all permissioned and they were like a good old boy bank club of just a bunch of bank names and no one else could get in. Well, Waller is proposing that they all get access to fedwire too, or will have a more liberal licensing structure. He also said some pretty bullish things about crypto. I'm just going to play this clip.
- [60:08]
A
This is an acknowledgment. The distributed ledgers and crypto assets are no longer on the fringes, but are increasingly woven into the fabric of the payment and financial system. Now, before we hear from these innovators, I would like to touch on roles that the Federal Reserve plays to support the private sector. These include serving as a convener to solve coordination problems and and operating core payment and settlement infrastructure. We are also looking ahead conducting hands on research on tokenization using smart contracts and the intersection of AI and payments for use in our own payment systems. We do this to understand the innovation happening within the payment system as well as to evaluate whether these technologies could provide opportunities to upgrade our own payments payment infrastructures and to enable us to have deeper conversations with the industry on these new technologies. Wow, that's great. Yeah.
- [61:04]
B
Actually fun fact too. David. Do you know on Polymarket, Chris Waller is the number two listed probability of becoming the next Fed chair? Wow. That same guy. Can you imagine the Fed?
- [61:19]
A
Usually when I hear the Fed doing research about crypto, it's like research about CBDTs and I'm like, okay, that's nothing. But researching about how the market has adopted specific payment opportunities. Being stablecoins.
- [61:31]
B
Pretty wild, right?
- [61:32]
A
Hopefully. Hopefully a little bit more real.
- [61:33]
B
Pretty wild, David. You know, last week we talked about this asset Seizure by the US government from a group of 127 Bitcoin, a group of scammers, Chenzai, still on the run. We talked about all that.
- [61:47]
A
Yep.
- [61:47]
B
I was doing some more research on this. This means that the US government would have 30 slaves, $36.3 billion worth of Bitcoin right now, which is like three and a half percent of the US government's gold stockpile. And that's at current bitcoin prices.
- [62:04]
A
Wow.
- [62:05]
B
And you remember that there was an executive order earlier this year where Trump said, hey, we're going to make a strategic bitcoin reserve. But the thing is, it had to be budget neutral. So they were going to do a strategic bitcoin reserve without buying any bitcoin. You know how they're doing it?
- [62:19]
A
Yeah. Seizing.
- [62:20]
B
They're seizing it, they're stealing it. This is part of the strategic bitcoin reserve. They're actually going and getting it. And you say stealing it, Right? There's an element to that actually, a little bit.
- [62:30]
A
It's taking things by force.
- [62:32]
B
Okay. So whenever the government seizes something, it doesn't get forfeited yet. So they seized it. So it's unclaimed right now or it's subject to claims by other individuals. But only 3% of forfeited assets are ever returned to claimants. So I was thinking about this, right? All this funds, this $15 billion, whatever. It's all victims money. Does it ever get Back to victims. Historically, only 3% of funds have gotten back to victims.
- [63:01]
A
And legal process, there's no incentive for them to give money back.
- [63:05]
B
Tons of documents. The government makes it very hard to get back your assets.
- [63:10]
A
So, you know. You know when they seized bitcoins from the Silk Road.
- [63:13]
B
Yeah.
- [63:13]
A
And then they was just in. And then the FBI agents stole those. Remember those? Yeah. They don't want to give them back because, like, somebody can. Like, somebody can have those.
- [63:22]
B
This is like, okay, so I'm glad criminals are getting prosecuted. That's great. It makes me very uncomfortable that the. The way the government, The US Government is going to get its crypto reserve is to basically, like, go take it.
- [63:36]
A
So say you get, like, raided and arrested, and then your bitcoin is seized, and then you go through the court system and you come out non not guilty. You don't necessarily get your bitcoins back. Like, that is another legal process that you have to go through. And you don't know where those bitcoins are. And then they're like, we lost them. Oh, they ended up in the stockpile somehow. I don't know.
- [63:59]
B
Yep. So anyway, it's not great. I mean, I'm glad we have a strategic bitcoin reserve, but it's also not great at the same time. David, tell me about this competition between. Between AIs, this trading competition. What's going on here?
- [64:09]
A
Okay, so there's this website called Alpha arena, and it has taken six of probably the most used LLM models. Deepsea Quad, Grok 4, Gemini, ChatGPT, and Quen. So, like, two Chinese models, three, four Silicon Valley models. This individual gave $10,000 to every single model and set it loose on Hyper Liquid. And it was like, go maximize profit. And some of these. Some of these models, Quinn, the one. The one of the Chinese ones is at 15,600 dol. Deep seek $12,600. So, Ryan, the two Chinese models are up.
- [64:46]
B
They started with 10k. Did you say that? You should say that.
- [64:49]
A
Yeah.
- [64:49]
B
They started.
- [64:49]
A
They started with 10k. Yes. Grok used to be up. Grok used to be in the lead.
- [64:54]
B
Had a few good days.
- [64:54]
A
Had a few good days. It's down 12% to $8,700. Claude Sonnet is at $8,700 as well. And then Gemini and ChatGPT.
- [65:04]
B
Do not trust them with your money. Okay.
- [65:06]
A
Don't give them your money. Chat. The Chat GPT chart looks. Looks like somebody who just is a bad trader.
- [65:11]
B
That looks like my trading chart, to be honest. But even I I feel like could outrage.
- [65:15]
A
I think you could do better than that. I think you're good.
- [65:17]
B
It's kind of cool though, right? You give an AI model some money and it does stuff on a perps exchange and you get to see who the bet what the best model is. It's a pretty objective measure of how sort of trading Intelligent.
- [65:29]
A
Yeah. How intelligent they are at least.
- [65:31]
B
It's hard to game this. You actually have to be good.
- [65:33]
A
It's impossible to game it. It is a very good benchmark. So we have a sister podcast, it's called Limitless. It's hosted by Joss and Josh. They did an episode on this. Currently this episode is. Is. Is trending. Trending. Hitting the algorithm. Hitting the algorithm. They did a. One of. My favorite part of this episode actually was Josh kind of psychoanalyzing each of the LLMs talking about like, yeah, you know, Grok. Grok. This was when Grok was up like $18,000 or whatever. Grok is like unhinged and just calls.
- [66:00]
B
It as it is.
- [66:00]
A
And it's unfiltered and takes a lot of risks. And so of course it's up.
- [66:04]
B
And then is that what you want in your. In your trading vault? You want somebody who's unmanaging your money?
- [66:09]
A
Yeah. So these things are taken between like 2 and 20x leverage and then you have like ChatGPT, which is like, you know, glazes you.
- [66:17]
B
Maybe we shouldn't do this.
- [66:18]
A
It's a little bit of a soy boy, you know, it doesn't. And then now it's down to $2,000.
- [66:23]
B
That's. You can't recover from that. I want to check this in on this weekly because it's kind of entertaining.
- [66:29]
A
Yeah.
- [66:30]
B
David, one last thing before I let you go. We're talking about AI. You know, one thing we've both been very excited about is this X402 basically payments protocol, right. Using crypto, using stablecoins, anything. But it turns any API gateway into kind of machine to machine microtransaction portal. There's this website called Nexus where it lists like all of the different services that you can call using this right now. And I was looking at a demo that Coinbase put out, and so here's a demo of their MCP wallet. Okay, so this basically gives you an MCP wallet that you can now connect to your AI, basically. So this is a model of Claude. Basically what you're doing here is you're downloading this thing, it's companioning with Claude, and then you can fund it so you put like $5 into your wallet and the AI gets. Claude gets to control this. And then you can ask it questions like, here's an example of, you know, like, what. What different services are available in x402? And then Claude can just enhance its answers by spending money from its wallet. And you could set limits. Right. But CLAUDE can spend money from its crypto wallet to go and prove its answers and consume these X402 services. So the idea of an AI agent having a crypto wallet is like, now here, and we are beginning to build a whole data consumption infrastructure of micropayments to make. Create a marketplace basically for AI data consumption. And I think this is one of the coolest things happening right now in crypto is a beautiful intersection between AI and crypto.
- [68:08]
A
Yeah. I mean, it's not just micropayments. X402 is just native payments inside of the Internet. It goes back to Marc Andreessen's comment about, like, the original sin of the Internet was not having payments embedded in it. And that's what X402 is. Lincoln Mer is the head of X402 product at Coinbase, speaking at the Bankless Summit.
- [68:26]
B
Oh, really? Cool.
- [68:27]
A
Yeah.
- [68:28]
B
Well, hopefully he's got. He's talking about AI agents and everything they're doing over there.
- [68:31]
A
So I don't know. I just know he's talking about, guys.
- [68:36]
B
We will end it there. Of course, 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. Not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.
- [68:50]
A
Sam.