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- [00:00]
A
Foreign Station is the second week of September, David. Down Timber is continuing, I think, on the week. Actually, this is more like Flat Timber.
- [00:12]
B
Flat Timber. Flat Timber. Yeah. Down Timber is ahead of us.
- [00:16]
A
Yeah. Still, we've got some more days left in the month. I guess things could be. This is. This is why people are wondering, is the bull market over? Actually saw Anson tweet this over the weekend. He was like, really? I'm feeling like it's over.
- [00:26]
B
Why do people even bother asking that question?
- [00:29]
A
I don't know.
- [00:30]
B
It's not to say it's not a valid question, but.
- [00:32]
A
Ye.
- [00:32]
B
If anyone asks that question, the answer is always dubious. No one knows.
- [00:38]
A
Not true. I actually have the answer. I have one chart in this agenda that holds the answer to that question of, is the bull market over? I'm gonna show you that chart.
- [00:47]
B
I don't know what that is. I guess we'll just stumble into it. In the middle of the agenda, we're also gonna talk about Hyper Liquid somehow just getting every stablecoin company to fight for its love. Who gets to be the Hyper Liquid stablecoin service provider? That's been like, the theme of the week. Yeah. And Justin sun separately also woke up to a pretty nasty surprise of getting over $100 million of his WFLI tokens just yoinked. Just frozen. Turns out that can happen, and we're gonna cover that drama as well.
- [01:18]
A
The NASDAQ also wants to tokenize equities. What does that mean? And I dug in this week, David. I was looking at the world of real world assets, and I've got some analysis here. Okay. Ethereum's actually doing pretty darn well on that front. And shocked. Also, David, the SEC lost Gary Gensler's text messages from 2022 and 2023. How could that have happened?
- [01:44]
B
That's. That's real convenient. I have. I'm going to put on my conspiracy hat. When we get to that section of the agenda, I'm just, like, giving you.
- [01:51]
A
A little take much. I think that hat will fit, like, pretty nicely in that part of the agenda. All right, but we got to shout out our friends and sponsors over at Sanctum. What are they about?
- [02:00]
B
Yeah. Okay, so if you hold soul, if you choose to do that, you better be staking it, because your soul just, you know, it just leaks. It's leak. It's a leaky accent, you know, and so in order to make your soul not link, you should stake it with Sanctum, because they are perhaps one of the better. One of the best service providers out there for staking your soul. They are the fourth largest Solana Protocol and they just help you make sure that your sole performance doesn't inflate away. They have better historic yields than Jitosouli and Emsil. And then they are also on the Blockworks token transparency report. So you can check out how exactly transparent their token is. They There's 40 points that you can score on the Blockworks token transparency report. They have all 40. Good for them. Bankless CC Sanctum report will give you a comprehensive report of a clear picture of how exactly their business is doing. They want you to go look at it. They want you to go to look at that report. And there's a link in the show notes so you can go click on that link.
- [02:57]
A
David, the markets this week got some good news and some bad news. What do you want first?
- [03:03]
B
Bad news.
- [03:04]
A
You want to do the bad news.
- [03:05]
B
Bad news, bad news.
- [03:06]
A
Down timber. Get the bad news over with.
- [03:07]
B
Yes. Down timber.
- [03:09]
A
The bad news is unemployment jumped in August 4.3%. This is nearly a four year high.
- [03:17]
B
Okay, it jumped to 2.4.3%.
- [03:20]
A
Yes. Yeah, it didn't jump a whole 4.3%. We'd be having a very different roll up. That would be know what kind of downtober that was something else. Anyway, the US economy added 22,000 jobs in the month of August. Let me show you a little chart in case you're not chart savvy on unemployment. Is this the chart? This is the chart of unemployment over time. This is on the five year. Yeah.
- [03:45]
B
Oh, this is not. This is not the chart that proves that we are still in a bull market.
- [03:48]
A
No, no, no, no.
- [03:50]
B
I don't know. When that chart comes in the rolls. I don't know. So I have to ask.
- [03:54]
A
Yeah, you're going to ask every single chart until we get there. No, you will know. It will be quite obvious anyway. Okay, look at this. Covid spike. Remember that?
- [04:01]
B
Yeah.
- [04:01]
A
Wow, that's an aberration right there. This is unemployment spike in 2020 jumped all the way up to almost 15%. But then since then, after going all the way back down in 2023, it's kind of flat now. I guess it's ebbing up a little bit. But like, I mean look at this chart. It's not too much.
- [04:18]
B
That looks flat. Going from 3.5% to 4.3% over three years. I don't care about that.
- [04:23]
A
Yeah, well, you haven't been fired, David, or lost your job. Okay, so that's a, you know, some privilege Talking. But, you know, I guess 4, 4% is pretty good historically is maybe the broader point. Okay, so that's the bad news. How about, you know the good news? It's right in the agenda. Tell me the good news.
- [04:39]
B
The good news is I'm looking for PPI numbers, which. I don't know what PPI is.
- [04:44]
A
Yes, you do. It's. It's cpi. It's producer version of cpi.
- [04:49]
B
Okay. You don't even know it what it is.
- [04:51]
A
Yeah, well, whatever you know what it is.
- [04:54]
B
PPI numbers have indicated that the numbers are cooling. The numbers are cooling. They unexpectedly fell by 0.1% in August of 2025. That's the first decline since April over a yearly basis. Year over year, PPI has risen 2.6%. But that was a. It has come down from being at 3.1% in July. So this is just another way to measure inflation. It's a different, it's a different.
- [05:17]
A
The producer side rather than the consumer side.
- [05:20]
B
Yeah. And it fell by 0.1%, which is not a lot, but it's in the right direction. So we feel good about that.
- [05:26]
A
All right. But we're all wondering what's going to happen. This is why it was kind of a week. Where these decisions are at play is because next week, by the next roll up, we will know what Fed chair Jerome Powell is going to do to the fed funds rate.
- [05:40]
B
His September says it already knows.
- [05:42]
A
Yeah, well, you know, it's probability, so it's probabilistic. So the prediction saying it's still at about 86% of a 25 basis point decrease. Everyone thinks it's going to be a decrease. Imagine if he showed up and he's like, I'm gonna keep rates flat. Imagine what would happen. We, we'd have down temper for the.
- [06:02]
B
Rest of the bad. Yeah, we don't want that.
- [06:03]
A
So that's the, that's the probability. There's still some probability that it's going down, that we might see a 50 basis point decrease. That's at around 12%. So market's pretty convinced he's going to cut rates no matter but like be moderate in his cuts, you know, only 25 basis point cut.
- [06:19]
B
Yeah. Yeah. But I think the direction is more important than the magnitude of cuts. Yeah.
- [06:25]
A
Because it's been flat for a long time. Right.
- [06:27]
B
Yeah. So that, the fact that we are just going down, I think is a bigger deal than the size of how we are going down. I like it when the Fed goes slow.
- [06:35]
A
Yeah, you like. I don't like slow and steady wins the race.
- [06:37]
B
I like, I like. Like we said, we have been in a bull market since bitcoin had its ETF be announced. Not even approved. Yeah, and that was a long time ago, dude. That was like two and a half years ago. Yeah, we have been up since then and I don't want it to go any faster. I just keep going. Just, just this current speed, please.
- [06:58]
A
We've said some things about Powell on the show. I'm sure everybody says things about Powell, right?
- [07:03]
B
Yeah.
- [07:03]
A
I think I'm going to miss him when he's gone, dude.
- [07:06]
B
I think he's done a pretty good job. Like we all like, it's easy to hate on the Federal Reserve, but like everyone was at the end of COVID is like every. There was so inflationary. They waited way too long.
- [07:17]
A
Yeah.
- [07:18]
B
Now they're going to crash the economy.
- [07:19]
A
I think. I feel like we gave him the hardest time when he was on the transitory inflation path.
- [07:23]
B
Totally, totally.
- [07:24]
A
And we were like, nah, it's going to be a new normal. But I guess he can't say that, right?
- [07:28]
B
Yeah, the, the Fed has whatever tightrope that the Fed has had to walk by insofar that there is not a recession and jobs are doing fine and inflation is like sticky at 3%. But 3% is a totally fine new normal to me. Like the Fed has done a great job to you. Like I don't know how else you cut it.
- [07:48]
A
Yeah. Anyway, he's going to be gone. Who knows who's going to replace him. It's going to be a new era. So yeah, we'll see what he does. It's a big, big moment, I suppose, for Jerome Powell. David, the chart you've been waiting for. Okay. This is the chart. Okay.
- [08:01]
B
Oh, that is bullish.
- [08:04]
A
I knew I wouldn't have to pre announce it.
- [08:06]
B
All right, there are two things that I need to look at on this chart. The word liquidity at the title. And it's going up and to the right in a big way.
- [08:16]
A
Okay. So for, for people who can't see this on their screen, this is the chart that to me, the one chart I look at to tell whether the bull market's over or whether we're still going to have a bull market remaining in crypto. This is the weekly global liquidity chart. And David, you see the point of direction here.
- [08:34]
B
It goes all the way back to January of 2024. So it spans 111 3/4 years. So pretty good amount of time.
- [08:42]
A
And this is about. We're at about 185 trillion in global liquidity. And this is an all time high number and it's continuing to increase at this point in time. You saw a dip earlier in the year. There was a dip earlier in the year. We also saw a dip in crypto prices, didn't we?
- [08:58]
B
Yeah.
- [08:59]
A
Here's another chart.
- [09:00]
B
So we know that crypto prices lag liquidity. Oh, that's what you're showing us.
- [09:03]
A
That's what it is.
- [09:04]
B
Yeah, that's what it is.
- [09:05]
A
So this is the price of bitcoin as a proxy for all of crypto and global liquidity. And you can see historically the price of bitcoin. I don't know, it's in black, should be in orange. But anyway, global liquidity is in orange in this chart. Price of bitcoin is in black. You can see there's always kind of a little lag of whatever global liquidity does.
- [09:22]
B
It's a little bit of a lag.
- [09:24]
A
September lag and then up global liquidity chart, man, this is the thing that puts juice and energy into all of crypto markets and it's still going up. So I think we got some runaway ahead.
- [09:38]
B
Yeah, Liquidity to me also is just like. Yeah, the denominator is just getting larger. As in the dollar's devaluing. It's almost the same thing.
- [09:49]
A
Yeah. I mean it's not just the dollar. It's all fiat. Right. It's like everything we're, we're, we're printing money. And that's been the story of this asset.
- [09:56]
B
Counts as liquidity, does that count as liquidity?
- [09:58]
A
Yeah, man, more, more money, more liquidity out there.
- [10:00]
B
Yeah, yeah, that's what's happening. Yeah, it's like more nominal liquidity, which counts.
- [10:07]
A
Yep. So get through September, guys. And I think, I think bull market will resume. That's my prediction. Now this is financial advice. Blah, blah, blah, blah, blah. Tell me about bitcoin price in the week, David.
- [10:18]
B
Bitcoin price, it is up on the week. We are coming in at $114,500. That means it is up. How much is it up? It is up a 4.5%, 4.5% eth. Doing something similar. $4,430, up 3% on the week. And also the total crypto market cap. Ryan, we're back above four.
- [10:36]
A
Oh, I feel like that.
- [10:37]
B
We like that. Yeah, we had a little venture below three.
- [10:40]
A
We did.
- [10:41]
B
Kind of checked out the weather down there. Didn't really like it. Now we're back above four.
- [10:45]
A
Weather feels nice up Here. ETF launched this week. Actually, it is launching.
- [10:50]
B
Launching.
- [10:50]
A
Okay, this is. We're in the ETF meme. Coin.
- [10:53]
B
Brand new coin. A brand new coin, One of the oldest and most beloved coins in the crypto industry is getting its first etf.
- [11:00]
A
What is it?
- [11:01]
B
What is it? What is. Everyone, Place your bet. Lock it in. It's Dogecoin. Dogecoin is getting the ticker sign doje from a service. A service provider. An ETF service provider that. I'm not really sure who it is.
- [11:16]
A
Not blackrock. We'll say that.
- [11:18]
B
It's not blackrock.
- [11:19]
A
This is Eric Balchunas announcing it, and he follows it up and he says this. Pretty sure this is the first ever US ETF to hold something that has no utility on purpose. And I would say, Eric, not the first. Bitcoin was the first, my friend.
- [11:38]
B
That's a good point. Okay, well, then also gold.
- [11:42]
A
Gold.
- [11:42]
B
Actually, no, gold has utility because it's in electronics.
- [11:46]
A
Yeah, it does.
- [11:47]
B
Yeah.
- [11:48]
A
But bitcoin has utility because you can use it to move bitcoin around.
- [11:52]
B
Yes, certainly Dogecoin has utility.
- [11:54]
A
There's a tiny bit of utility. So I take that back. Let's take a look at. Let's go check in on our crypto treasury stocks. David, that. That's been a running theme for the entire entire summer, let's say, and now into September, and part of it has been M Navs are down. Okay. M Navs are bleeding a little bit. We talked last week about SBET being probably below 1 from an M Nav perspective, and they are striking back. So this is Sharplink Gaming. They have started a $1.5 billion share of buyback. Why are they doing this, David?
- [12:28]
B
Because their MNAV is below one, I'm assuming. Like, why else would they be buying back shares? I mean, my big question is, like, okay, how are they buying back shares? Where'd they get the money from? Are they selling eth or do they have cash?
- [12:41]
A
They're not selling quiche. They're not selling kiche either. They're not selling eth.
- [12:46]
B
How do you know? How do you know? Do we know that?
- [12:48]
A
I. Yeah, they're not selling ETH because they're either doing. I think it's cash that they have already. Probably.
- [12:54]
B
They just already have cash on their shares. Yes, they minted shares. And the past, which is what they do when MF's above and now MF's below. It's like, okay, well, like, let's just.
- [13:01]
A
Buy back our share. The book value of your share is at least, you know, $1, right. That's the $1 book value of your share. If M nav equals 1, then that's what that means. So if it goes below, then it's. It'd be silly not to buy your own shares. Yeah.
- [13:18]
B
I guess you're just like. If you minted above M Nav and buying below mnav, that's just a good trade.
- [13:22]
A
Yeah. And what you're doing is you are. If you're buying back your shares, you're getting that off of the supply and you're increasing the outstanding kind of shareholder ETH per share, essentially increasing ETH per.
- [13:35]
B
Share, which is the mandate.
- [13:37]
A
Yeah. You're concentrating your eth. So why wouldn't they do this? And that's what they've seen and so that's what they are doing. I think Joseph Shalom has a quote here. He said, he explained that this is a reaction to SBET trading below its M Nav. He said they believe SBET is significantly undervalued and they're going to do this anytime that it's under one and significantly undervalued, they're just going to buy back their shares.
- [14:00]
B
Yeah.
- [14:00]
A
Yeah.
- [14:01]
B
So the sentiment around the whole DAP market, I think is kind of depressed in this. In this moment because M Navs are like low and there's been tweets going around that people like, oh, yeah, these are all Ponzis. They're unraveling. It's over.
- [14:12]
A
I got one right. This is a back and forth I had with Defi Ignis and he was like, hey, that's make me nervous already. And now we got M Navs compressing. They're trading below one. I don't feel great about these. There's already Ponzi economics at play. What do you think about this?
- [14:26]
B
Not not feeling great and feeling nervous is a fantastic thing to feel in a healthy financial market. And so I'm totally okay with this. I replied to this tweet, you and you had a back and forth with him. I replied to the suite and I said like, dude, these, these things could just totally be cyclical.
- [14:41]
A
Yeah.
- [14:42]
B
And if everyone's feeling depressed right now, that's because we were all feeling pretty euphoric a second ago. Yeah.
- [14:46]
A
Yeah.
- [14:47]
B
And like we're depressed now and I think we can be euphoric in the future.
- [14:51]
A
Your take was the rubber band. It's going to go back and forth.
- [14:54]
B
Yeah, we're just going back and forth, back and forth. Like all it takes is that, like, ETH is creeping up all it takes is to, like, have a momentum in the whole crypto market over the next two months. And then all of a sudden, M. Nav goes back up and we just rinse and repeat this whole cycle.
- [15:07]
A
Yeah.
- [15:08]
B
Is a possible future.
- [15:09]
A
I think that's a good take. I also think, like. So this take, he said, we all know these Ponzis will collapse, but we think it's still early. Calling them Ponzis is not quite right.
- [15:17]
B
That's technically incorrect.
- [15:18]
A
Right. Unless you think eth itself or Bitcoin itself is a Ponzi. Which. Okay.
- [15:24]
B
Which then begins to be unhelpful use of the word Ponzi.
- [15:27]
A
Sure. But, like, when, Like. No, Ponzi means it's. It's not backed by anything. It's just backed by confidence. And there's actually nothing like underlying here in these dad cases. There is an underlying asset. Right. So at one or below one is definitely not a Ponzi. I think as you coil up and you get higher. Yeah, sure. There's some, like, yeah, greater fool theory at work above 1, but it's not a Ponzi. In the same way that, like, use of the word Ponzi is not quite right for dats. Yeah, is my take. I get the vibe, though. I get the vibe.
- [15:59]
B
Things above 0.1 require greater. Greater fools. It requires momentum. It requires a bunch of stuff. But, yeah, inherently, they are not Ponzis.
- [16:08]
A
So Tom Lee actually made a move outside of buying eth this week. Okay. Actually, he may have bought some eth.
- [16:15]
B
Raise my eyebrow.
- [16:15]
A
Did he buy some eth probably last September 11th. Oh, he just bought eth this morning.
- [16:21]
B
That's today.
- [16:21]
A
Hey, thanks, Tom. That's another 10. 10? How much did he buy?
- [16:26]
B
A lot.
- [16:27]
A
Almost a billion. Let the record stand. Tom Lee's still bullish, honey. A billion?
- [16:33]
B
How come we didn't see that on Twitter?
- [16:36]
A
Because he does it every week now. We've come to expect it.
- [16:39]
B
Eminev of 1.13. That's. That's good.
- [16:41]
A
Yeah. Okay. But anyway, he bought something else. What did he buy?
- [16:45]
B
Uh, he bought a world coin dat.
- [16:47]
A
Yeah.
- [16:47]
B
Right.
- [16:47]
A
Yep.
- [16:48]
B
Yeah. Uh, and there's, like, $20 million of it.
- [16:51]
A
He bought. He bought it in Bitmine, we should say, in that structure.
- [16:53]
B
In Bit Mine. In Bitmine. Yeah, yeah, yeah. So, like, if you own Bit Mine, then you own, like, $20 million of this world Coin Dat, which then went up like, 6,000% and turned into, like, $600 million. Yeah. Which I would imagine. I would hope he has already sold and converted that into Ethan. I kind of thought it was. I raised an eyebrow. This is like, oh, wait a second. You can just buy anything.
- [17:16]
A
Yeah. So Tom Lee loves a good photo op. This is Tom Lee and Michael Saylor. You're like, buddies. Bitcoin and Ethereum are friends, which.
- [17:27]
B
Dude, this photo, man.
- [17:29]
A
I actually love this photo, man. I didn't appreciate it when I saw it in my timeline.
- [17:34]
B
There's so much you could look into and comment on this.
- [17:37]
A
You know, I think from Michael Saylor, that's a genuine smile.
- [17:41]
B
I think that's a genuine smile. Yeah.
- [17:42]
A
And it's definitely a genuine. From Tom Lee. Now Tom Lee is showing a bit more, I think, affection, enthusiasm. Over.
- [17:49]
B
I would say, yeah, over the shoulder, but.
- [17:52]
A
But Michael Saylor's happy to be there.
- [17:53]
B
I could tell he's very happy to be there. I will say it is very obvious whose idea it was to take this photo.
- [18:00]
A
Anyway, that's as I say, Tom Lee likes a good photo op. So he was getting photo ops with the Orb. I don't know if you saw that. The World Coin Orb. Right. In celebration. I think of this Worldcoin dat. It's doing well. You were just like, oh, you know, if you're doing an Ethereum dat, you should only do eth.
- [18:17]
B
Yeah, kind of. Otherwise, these are just hedge funds.
- [18:21]
A
I know, but he's got. Look, dude, he's got a lot of eth. He's got $10 billion worth of eth, and then he's got $20 million worth of world Coin. If this becomes a thing, a trend of him doing all sorts of other things, I'd agree with that more. And I understand your spirit, which is you're a purist, right? You just want give me the eth.
- [18:41]
B
It's just like, what's the mandate here? The mandate is to grow the amount of eth, and. Which he did with that pressure. But he could have missed. You know, he could have swung and it might have been a miss.
- [18:51]
A
Give him a break. He's buying 10 billion eth. David. Give him a break. Okay? It's not just eth in the debt story this week, we should also talk about Solana's Michael Saylor. Okay. Maybe a photo op with this guy. Solana's Michael Saylor has popped in, and his name is Kyle Samani. Kyle Samani will chair a Solana dat. This is set to be the biggest one. This is called. What's it called? It's with Galaxy Digital Jump, and of course, Multicoin Capital. And the dat's name is. What what is this called?
- [19:25]
B
I don't know. Unnamed. Unnamed Solana Dat. Chaired by Michael. By Kyle Sumani.
- [19:30]
A
Yeah. Okay. Son name. That's why we couldn't find it. This is going to be a big one because it also. There's some cash in addition to the pipe. The pipe is generally where these investors just. They take the existing soul that they have, they deposit it in kind. Right. So big deal. That's not net new pressure.
- [19:45]
B
Yeah.
- [19:46]
A
But they also raised, it looks like 1.65 billion potentially to buy net new SOL. Least that's what I think is happening.
- [19:56]
B
The notes that I have, it says the pipe raised led by multicoin galaxy jump attracted $1.65 billion.
- [20:01]
A
But this says 1.65. Okay. 1.65 billion in cash and stablecoin commitments.
- [20:07]
B
Oh, my God. Wow.
- [20:08]
A
Really? So that could be net new buying pressure.
- [20:10]
B
That's a lot.
- [20:11]
A
Seems like it is.
- [20:12]
B
That's a lot. Yeah, that's a lot. Okay, so comparatively, bitmine initially raised $250 million and they are just at the starting gun of 1.6.
- [20:22]
A
Yeah.
- [20:22]
B
I would like a. I would like a second news source to say that that's $1.65 billion of cash.
- [20:28]
A
I don't know. I don't know if the. The filings are always like, clear and you kind of know it. Start knowing it after the fact. But a couple things that are happening. Look at the crypto, treasury share of percent supply of the network. And Seoul is creeping up above 1% in DATS right now. So ETH is almost caught up fully with bitcoin. Almost above 3% of all eth supply is in Dats, same as in bitcoin. Bitcoin's a little higher and soul's catching up. Also, Seoul on the last 30 days, David up 25%. Okay. Whereas eth is down 1% on the 30 day. So there's a dat story here.
- [21:05]
B
Dat rotation. Like first bitcoin, then Ethereum, then Solana. Okay, that makes sense. Yeah. I have a bearish take about Kyle Somani's Solana.
- [21:12]
A
Wait, why? You don't think he's going to be the Michael Saylor?
- [21:16]
B
So what did Michael Saylor do? He was a net new buyer of bitcoin and a net new espouser of bitcoin to a net new audience.
- [21:24]
A
Yeah.
- [21:25]
B
What did. What did Tom Lee do? He was a net new buyer of ETH and a net new espouser of ETH to a net new tradfi audience.
- [21:32]
A
Yeah.
- [21:32]
B
Kyle Somani has already saturated his network of the Solana narrative. He has already been a buyer of Solana and his network is the same. It's not. Hasn't changed anything because he's got the dat. So he's got. The whole idea is like you need to pass on a torch to a bigger figure. And Kyle Somani has already been that figure.
- [21:53]
A
I feel like Kyle Somani is maybe equivalent to Joe Lubin and the two cancel each other out because Joe Lubin has that position in Ethereum. He's kind of always been here, has a bag of eth. You know, he's going to be supportive. Whereas Tom Lee was like net new buyer. And so Joe is more like Kyle and there is no Michael Saylor yet or there's no Tom Lee yet for Solana. Position still vacant, I think.
- [22:19]
B
I think Kyle actually kind of has an edge over Lubin because like Kyle can like dress up in a suit and walk amongst like way better than Joe can.
- [22:28]
A
And he thinks so Joe is plugged in. He just doesn't. Okay.
- [22:34]
B
But like he's a little too.
- [22:35]
A
Kyle is way more bamba bombastic. So he has that in common with like a.
- [22:41]
B
He is product market fit with like the all in, like Zeitgeist.
- [22:46]
A
Oh, that's right. Is he speaking there or has he spoke at.
- [22:48]
B
He spoke at the all in Summit about Internet capital markets.
- [22:51]
A
Yeah. Which is basically salon. Right.
- [22:53]
B
So like Kyle. Kyle can schmooze with like the all in types, which are. It's like a large part of the financial world.
- [23:00]
A
Kyle's bringing it. That's what's happened there.
- [23:02]
B
Yeah.
- [23:03]
A
David, one area I was looking at this week, you know, we've done a lot of episodes on tokenization. We've been talking about the Tempo stripe blockchain that's been in the news. And the. The question is, well, are real world assets on Ethereum under threat? Right. This is some of the debates even that we've been having. I decided in preparation for our conversation with Ando to actually look at some numbers behind this. And what I found was ETH is actually doing pretty damn well from a pretty dominant. Yeah. From a real world assets perspective. So just a few stats. Stablecoins. ETH L1 has 57% of all stablecoins. But if you add EVM, so all the change with EVM, that increases to 95%. And before someone goes, wait, stop, you can't do EVM. That doesn't count. I think that Ethereum's network effect is kind of like threefold. So it has the best network effects. If the real world assets are on the layer one. That's best for Ethereum, best for eth.
- [23:59]
B
Better network effects. It's just the network that's.
- [24:02]
A
Yeah, that's the thing. Better if it like. Well, liquidity is a network effect, you know, a better if it's on Ethereum L L2, but still good if it's an EVM. Why still good? Because all the EVMs can become L2s can become L ones. They're all much more interoperable. You get the tooling. I'm not saying that it's the same level of network effect, but it's still good to be on an EVM. It's much more proximate to Ethereum. 95% on either Ethereum or the EVM. That's stablecoins, treasuries. Ethel1 has 70%. If you add the EVM, it's 86% gold. It's crazy dominant. 78% of all tokenized gold is on Ethereum L1. If you add EVM, it's 99%. And stocks, this is the most nascent. So there's only like $500 million worth of tokenized stocks right now. And Ethereum has about. Let's see, if you ignore some of the big ones like Algorand, which have just like one stock on them and it just seems like it's kind of a. A beta experiment Type play, Ethereum L1 is 44% and this is where Solana is actually doing fairly well. At least right now it has 30% in comparison to Ethereum. So anyway, but that's before Robinhood has entered, Etoro has entered and we know that these and Coinbase has really entered. We know that these are all going to be Ethereum layer twos and Robinhood alone has like 170 billion in equities that it could tokenize on top of and Ethereum layer 2. So if you like zoom out and you take like market share of real world assets, Ethereum's at like in the 70% range right now for everything on the L1. And then if you add EVM and you say that's also Ethereum network effect, it's 93% of all token real world tokenized assets are actually on Ethereum or the evm. It's kind of doing well on that score. And it was surprising because I, I feel like the crypto Twitter like I was surprised. It, it felt almost like in areas Ethereum was losing its edge. But it looks like Ethereum is actually gaining some things now. It's all still early. I get that. But pretty well positioned from a market share perspective right now. Yeah.
- [26:09]
B
My, my take on why you like were surprised or like didn't know that Ethereum had this level of dominance about real world assets is that like no one is really responsible for like beating the drum of Ethereum Ethereum's dominance in any particular regard.
- [26:26]
A
And so like wait, isn't that us Doesn't Bayless.
- [26:28]
B
That's. That's what we're. Yeah, that's what we're supposed to be doing.
- [26:30]
A
So here we're not doing our jobs.
- [26:32]
B
Well now we are.
- [26:34]
A
Oh good. Okay.
- [26:35]
B
But like every leader of a respective chain is going to be like yo, we are the real world asset chain and they've got like 3% but like no one is like doing because it's open source. The open source doesn't have an inherent.
- [26:45]
A
Voice, doesn't have a marketing doesn't have a market.
- [26:48]
B
Ethereum is actually the real world asset chain and it's not even close.
- [26:53]
A
Doing pretty well. And on that David Fidelity Stealth launched a money market on Ethereum. The first that Fidelity has launched. They have about 1.4 trillion in money markets and they launched this on Ethereum. L1 already has over 200 million. That happened in Stealth last week. It's just so cool to see Fidelity on Etherscan. Look at them. Fdit kind of cool.
- [27:17]
B
The combination of Tradfi financial institutions and Etherscan I think is just like exactly what we are here for.
- [27:23]
A
Yeah I know.
- [27:24]
B
It's like Inspect Source. Let me just go pop open the hood of my financial institution without their permission.
- [27:29]
A
Well speaking of that something that Justin's son probably regret regrets is not popping up the hood on the World Liberty financial tokens that he bought. So we're going to talk about that when we come back. Also it's been Hyper Liquid week. Everybody's competing. All the stablecoins competing for hyper liquids. Love. We're going to talk about all that more but before we do we want to thank the sponsors that made this episode possible. Uniswap. It is a browser wallet, a mobile wallet. It's an Exchange. It's a L2 chain. They do it all. Let's hear from them.
- [28:00]
B
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, Unichain 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 uni chain? Visit unichain.org or follow unichain on X for all the updates. Degen started as a tight knit community on Farcaster and organically grew into one of the top meme coins on base. What began as a simple idea tip anyone who joins the fund sparked an economy that turned into a movement. The community runs the show from the logo and the lore to funding and building ambitious ideas together, over 1 million degens now power each other with their generosity, creativity and ability to get things done. At the center is the Degen Token. It rewards engagement, fuels tipping and drives the marketplace for builders and fans. That same energy gave rise to Degen Chain, a fast, low cost layer 3 for new projects and now the Degen app, the easiest way to connect, earn and participate in decentralized social media. With a built in wallet and real token utility in Degen, the hat stays on. Join Degen and get on the app waitlist@www.degen.tips. justin sun learns a tough lesson about property rights. The Trump World Liberty Financial Project has frozen all of his tokens that belonged to Justin sun that contained over $100 million in unlocked WFLI.
- [29:45]
A
That's just unlocked by the way, David, it's if you, if you add the lock too, it's like 420 million.
- [29:51]
B
Remember when we were talking shit about people who are investing in the wfli cuz not me.
- [29:56]
A
Must have been you, not me.
- [29:59]
B
Turns out that was an okay thing to do financially speaking. And just purely financially speaking. Okay, so as a result of Justin's son's investments into Word Liberty financial, he owns 3% of the supply. 3%. And so all investors have 20% of their investment unlocked at launch. Justin said Justin Sutton said he would publicly that he wouldn't sell. But then he transferred $9 million of his tokens to HTX. That is an exchange that he owns and this got flagged suspicious for some reason by A variety of different service providers. The transfers to the exchange were flags is suspicious and, and once they're inside the exchange, it's in a hot wallet. It gets all commingled with other depositors. Justin sun announces that he is encouraging to he's giving out 20% yield for other WLFI depositors.
- [30:52]
A
He.
- [30:52]
B
I think he's kind of encouraging like a mixing. Everyone just mix up your tokens in my HTX hot wallet.
- [30:57]
A
Sure.
- [30:58]
B
And then this is what causes the FLI team to freeze the tokens. We don't really know like, what the justification was for freezing the tokens because I'm assuming that the unlocked tokens are truly unlocked and the lock tokens are still locked according to the smart contracts. But nonetheless, when this, when their tokens were frozen, the FLI price pumped. It pumped downstream of the tokens being frozen.
- [31:22]
A
Wow.
- [31:23]
B
Yeah, not like a crazy amount, but like price stopped going down and started going up instead.
- [31:29]
A
The sellers disappeared.
- [31:32]
B
Sellers mysteriously disappeared.
- [31:33]
A
Yeah.
- [31:36]
B
WFLI tweeted out we've heard community concerns about recent wallet blacklist transparency. First, WLFI only intervenes to protect users, never to silence normal activity. They said 272 wallets were blacklisted over the past few days. They said that this is a very small segment of total holders and was done solely to prevent harm while to investigate and help impacted users. Uh, some were phishing attacks, others were wallets that reported compromised ownership, et cetera, et cetera. But overall, Justin sun felt very upset. He denied any sort of allegations of any sort of wrongdoing. Uh, if he has liquid tokens, I think he gets to, to sell them. And he, he makes a tweet, a plea to the World Liberty financial team in the global community and just says, as an early major investor in wfli, I have contributed not only capital, but also my trust and support for the future of this project, blah, blah, blah. I call on the team to basically unlock my tokens and let's move. Do we know why his tokens were frozen?
- [32:33]
A
I mean, I don't know that World Liberty has commented on his tokens specifically, but they said that the tokens we froze were fishers, were tokens that were compromised, misappropriation, things like that. So I guess maybe they're, they're sort of saying that he was in that bucket.
- [32:50]
B
Yeah, I guess when you do commingle your funds with a bunch of other people, you kind of do run that risk. There was another person who stated that their tokens were also frozen, and he emailed WFLI compliance and saying, yo, wtf? And then he tweets out, I just got a reply from World Liberty Financial tldr, they stole my money. And it's because it's the POTUS at POTUS Family, that's the President, United States. I can't do anything about it. This is a new age mafia. There's no one to complain to, no one to argue with, no one to sue. It just is. And so they are claiming kind of like racketeering. You can invest in World Liberty Financial, but then when you get your tokens, we freeze them. I don't think anyone truly knows what's going on.
- [33:30]
A
Well, okay, we do know one thing that's going on. Okay. So one thing that's going on is that the WLFI project is a project that started according to trumps because of DeFi, because they were frozen out of the US banking system and they didn't want that to happen to other people. And thus we get defi. Molly White was like one to obviously like, you know, comment on that irony, that association. Yeah. And okay, so like one thing that is crazy to me right, is looking at. It's a token on Ethereum. How is it getting frozen? It's on Ethereum. Well, the WLFI token specifically includes a blacklist address function, the Guardian set blacklist status function that allows them to essentially blacklist tokens. This is not normal.
- [34:24]
B
Yeah. Do not have this property.
- [34:27]
A
No, we don't because we actually want tokens to preserve the property rights of their users. Ethereum. Right. So this token had a backdoor in it from day one. And that's a design choice. Doesn't have to be like that.
- [34:40]
B
It has a debanking button on it.
- [34:42]
A
Yeah. We can extinguish your property rights with a function call basically. And so that's what happened to Justin Sun. But there's definitely some, some irony to it I think. And what like one thinks about, like what are they trying to build here? World Liberty Finance, they're trying to build a stablecoin, which of course that's going to be blacklisted. I understand, understand that. And then also like a defi lending and borrowing protocol. Okay. And this is their first move. We're going to just start blasting, we're going to start freezing, freezing stuff. I don't know where you go from here. I mean it's maybe it's a great meme coin but like how defi is this? What advantage are we actually getting? So that'd be my critique over it.
- [35:25]
B
Just you vave Just you vave.
- [35:29]
A
We're back full circle to actual defi. Speaking of that, let's talk about what's going on with Hyper Liquid on the week. And they had like a. I don't know, it was like the Bachelor for stablecoins, Everybody trying to apply.
- [35:39]
B
That's the right way to put it. It was the Bachelor for stablecoins. Okay, so Hyper Liquid, just the darling of the last year. Perps exchange, doing more revenue, more volume, not more making more money than NASDAQ is definitely like the number one revenue generator in crypto at this very moment, followed by Ethereum, I think there is $200 million worth of annualized yield from the amount of Stable coins, USCC specifically that is on Hyper Liquid. So there's. There's billions of dollars on Hyper Liquid in usdc. And because of that demand for USDC, that Hyper Liquids product has created, Circle is getting basically $200 million of profit from the yield of the USCC that's on hyper Liquid and Hyper Liquid. Yep.
- [36:26]
A
Yeah, the 200 million, we should say half of that is split with Coinbase. Right. Who also has a perps exchange and is kind of a Hyper Liquid competitor. Right. So $200 million and half goes to your competitor.
- [36:38]
B
Yeah. So because HyperLiquid uses USDC, Coinbase is making $100 million a year, which I would imagine is just like bad. That's just bad for Hyper Liquid versus what could be the alternative? Right, so what's the alternative? The alternative is they host the Bachelor for hosting the native stablecoin on the hyperliquid blockchain. And so they are auctioning off basically a ticker, very valuable ticker, USDH on hyperliquid. And they are auctioning this off to whoever wants to come and be the external service provider to provide Hyper Liquid with a native stablecoin. So it'd be natively minted on Hyper Liquid. But really the mechanics of how the stablecoin would work would be up to whoever wins this proposal. It's kind of like when the government just makes a contract in like Northrop Grumman or it's like an rfp, right? Request for. Yeah, exactly. Request for quote. Request for whatever. And so a bunch of stablecoin projects all came to bat, like, kind of all of them, actually. Athena was in there. Native markets was in there.
- [37:43]
A
Wait, wait, wait. All of them was. Was World Liberty Finance in there? I hope they were.
- [37:49]
B
David, is there stablecoin live?
- [37:52]
A
I think so.
- [37:52]
B
What is it? USD1, whatever. No, that one wasn't in There they.
- [37:56]
A
Would have to promise to not freeze anyway.
- [37:58]
B
Yeah, that'd be. They would need it for. Yeah. So who entered who in the Athena sky, formerly Makerdao, Frax, Agora, Paxos Bastion and Native Markets. And David C. From the Bankless Deep did a fantastic job just putting a chart together. If you just kind of want to compare and contrast all of the different, like properties or strengths, weaknesses of all these different proposals. And this was what the theme of the week was on crypto Twitter. It's like everyone was kind of talking about all the different pitches that stablecoin service provided.
- [38:28]
A
They did it all out in the open, right? It was.
- [38:30]
B
They did it all out in the open. So every single, like Frax, Athena, all of them just made public proposals to this public auction. And we all, as a community kind of all got to put our eyes on it and talk about which one was the best one. And so I'll just kind of quickly run through some of the different. Some of the different competitors. 12 total teams, actually, versus the ones that I said. There's 12 total teams. Paxos offers 95% revenue sharing, so Hyper Liquid gets 95% of the revenue of the profit of the supply of stablecoin in buybacks.
- [39:00]
A
Like they buy tokens or something. Right.
- [39:04]
B
Frax proposes cross chain redeemable stablecoin structure. 100% of yield goes back to Hyper Liquid. Athena Labs backing USDH entirely by USTB, which is basically BlackRock's Biddle Fund, returning 95% of reserve revenue to HyperLiquid and pledging at least 75 to 150 million in ecosystem incentives. So just like a bribe, which is fair game.
- [39:28]
A
Incentive. Incentive, yeah.
- [39:30]
B
Agora Sky USDs built on the Hyperliquids risk framework. Yield split 4.8% return on all USDH held on Hyperliquid, which is like it's not. They're giving most of that, that the yield back to Hyper Liquid. So a bunch of different competitors, polymarket can basically tell you what it thinks and it's coming in.
- [39:51]
A
It's not even close.
- [39:52]
B
It's not even close. Native markets coming in at 94%. Again, I had never really heard of Native markets. Turns out it's been founded by like a pretty good team.
- [40:03]
A
They're plugged into the Hyper Liquid community, I believe. Right?
- [40:06]
B
Yeah, yeah. The one person I do know is MC Lauder, former COO of Uniswap Uniswap Labs, who came from blackrock. So she knows a thing or two. And so Native Market is just like the big favor to win by 96%.
- [40:21]
A
Yeah. So this was like a bidding war. It was just like a public RFP process. So all the proposals and all of the replies almost felt dao. Like in governance forms. Right. That's where these proposals were essentially set, submitted. That's why it was so noisy on crypto Twitter. Everyone so much to comment on, so much like content, basically. Now, Haseeb, his take was basically the. The RFP process was a little bit of a farce to begin with. So he had heard. This is like venture capitalist rumor mill. I'm sure maybe he had heard from sources that perhaps it was always going to go to native markets all along. And hyperliquid had always intended this. And so issuing a public RFP and having kind of. Because the hyper liquid validators were going to vote on this was sort of a. A farce. Like they already knew who they were going to pick. And by the way, this is how RFP processes work oftentimes in governments and other RFPs. Like you already know who you kind of want, but you have to. You have to issue the RFP anyway. So that was his take. Whether that's true or not, you know, like, not sure. The final vote though is scheduled for September 14th. So we. We should know next week who's going to win the. The Bachelor and have USDH as. As their. As their stable coin.
- [41:31]
B
Do you know what else happens on September 14th, Ren?
- [41:33]
A
No, I don't.
- [41:34]
B
This incoming September 14th specifically is bankless fifth birthday.
- [41:39]
A
No way. Really? Yeah. Yeah. What do you celebrate by? When the LLC was born or when.
- [41:44]
B
When we were given back the approved llc. Oh, from this. From the state that we filed so many birthdays.
- [41:50]
A
Because we started the podcast before that, right?
- [41:52]
B
We started the podcast well before that. Yeah.
- [41:53]
A
And then we started writing it the other way before that. So we have multiple. We have multiple birthdays. Well, that's a great day.
- [41:59]
B
The legal entity was formed on September 14, 2020.
- [42:03]
A
I kind of regret we didn't launch a stablecoin company though. Rather than a podcast here, should we.
- [42:10]
B
Have launched a token? We could be our birthday.
- [42:14]
A
Speaking of stablecoins though, we should end the section with this. Mega Eth introduced a stablecoin on their platform. And this is kind of cool. It's more embedded into the Mega Eth chain, right? The yield. Does the yield go to validators in some way? Tell me about this.
- [42:28]
B
Yeah, okay, so they are trying to figure out a way. So Mega Eth hyperscale, the most scaled chain that perhaps will ever exist but.
- [42:35]
A
They'Re not taking that yet.
- [42:37]
B
We should specify theoretically. Theoretically, the most hyperscale chain that will ever exist. We've been told, conceptually speaking, they will be the most scalable chain. Which means, Ryan, that they can't really take chain fees because the whole, whole concept of a hyperscale chain, which is like you can't pay fees. It has to be. Every fee has to be zero.
- [42:56]
A
Oh, everything's going to be free.
- [42:58]
B
Every pay. Super free. Yeah, yeah, super free.
- [43:00]
A
So how do you fund this exactly?
- [43:02]
B
How do you make money as a mega eth Org if you can't sell? If you can't make revenue selling block space. And one solution that they have is minting enable stablecoin and they just collect the yield on the back end of the stablecoin. And so they're doing the same thing that hyperliquid is, which is they are using an external service provider to supply them with a stablecoin. And the supply of the stablecoin will give them an ongoing supply revenue that is not block space sales that they get to actually fund their operations with. So it's an alternative way for a blockchain to make money having enabled native stablecoin and collecting some of that yield. So they are working with Athena and they are making usdm. So Athena is the backend service provider. They are going to mint USDM natively on Athena. And that is what allows mega Eth to grow revenue because they get the yield and they have a native stablecoin to help grow the supply of on their chain.
- [43:55]
A
I like that. So I think that the three business models that we've seen for chains or the way that number goes up, basically right, is you can sell your block space. Either the ordering of that block space or the actual, you know, space within the blocks for transaction fees. L2s can do this. L1s can do that business model. And there's this model which is you get a percent of total assets on the chain, effectively, right? So they're getting, you know, 4% treasuries. They get 4% of all of the stablecoin assets that they have on Megyth. That's, that's the second. And then there's the OG business model is you just meme yourself into a store of value you get.
- [44:33]
B
I like that one.
- [44:33]
A
The special snowflake status, right. That bitcoin has. And we would say on bankless ether is getting and has to some degree. And I think all L1s are in a competition to get that. Those are the three Business models for chains. I feel like we've, we're trying them all, aren't we?
- [44:48]
B
Coming up next, is NASDAQ tokenizing US Equities? What does that mean? Are they tokenizing US equities on chain or are we trading tokenized US equities on nasdaq? What's going on over there? And Gensler lost his phone.
- [45:01]
A
Oh no.
- [45:03]
B
How could that happen? I don't know what was on his phone and why did it so coincidentally conveniently get deleted? And also just two big wins for optimism and the OP stack. Two new chains are now op chains. We're going to talk about them, but first we're going to talk about another OP stack chain, frax. And their frax still layer two is an OP chain just juiced up for massive throughput. And that's where they put all their yield on and their stablecoin and all that kind of stuff. Let's go hear it from frax. Right now, in the wild west of Defi, stability and innovation are everything. Which is why you should check out FRAX Finance, the protocol revolutionizing stablecoins, Defi and Rolex. The core of FRAX finance is Frax USD, which is backed by BlackRock's Institutional Biddle Fund. Frax designed Frax USD for best in class yields across defi t bills and carry trade returns all in one. Just head to frax.com then stake it to earn some of the best yields in Defi. Want even more? Bridge your Frax USD over to the fractal layer 2 for the same yield plus fractal points and explore fractals diverse layer 2 ecosystem system with protocols like curve convex and more, all rewarding early adopters. FRAX isn't just a protocol, it's a digital nation powered by the FXS token and governed by its global community. Acquire FXS through frax.com or your Go to Dex, stake it and help shape Frax Nation's future. Ready to join the forefront of DeFi? Visit frax.com now to start earning with Frax USD and staked Frax USD. And for Bankless listeners, you can use frax.comrich/bankless when bridging to Fraxel for exclusive Fraxel perks and boosted rewards. Imagine a world where traditional finance meets the power of blockchain seamlessly. That's what Mantle is pioneering with Blockchain for banking, a revolutionary new category at the intersection of TradFi and Web3. At the heart is you are the world's first money app built fully on Chain. It gives you a Swiss IBAN account blending fiat currencies like the Euro, the Swiss Franc, the United States dollar or the renminbi with crypto all in one place. Enjoy real world usability and blockchain's trust and programmability transactions. Post directly to the blockchain compatible with Tradfi Rails and packed with integrated DEFI futures. UR transforms Mantle network into the ultimate platform for on chain financial services unifying payments, trading and assets like the MI4, the Meath Protocol and functions FBTC backed by developer grants, ecosystem incentives and top distribution through the UR app reward stations and BYBIT launch pool for MNT holders. Every economic activity in urban drives value back to you embodying the entire stack and future growth of this super app ecosystem. Follow Mantle on X at Mantle Underscore Official for the latest updates on blockchain for banking. That's X.com mantle underscore official. Ronin, the gaming chain that was the scaling solution towards the Axie Infinity. Okay, so remember, let's go through history really quick, Ryan. Axie Infinity blew up crypto gaming in 2021. So got like a billion people on chain using Axie Infinity. I may be exaggerating, maybe exaggerating, but like a lot of people, a lot of people, a lot of people and then they were like, oh, we need our own chain to scale. And so they built their own chain and that is where things have been so far. Ronin actually has more activity today, like meaningfully more activity today than they had at the height of the Axie mania because they have like way more games now and they just have always been an independent layer one. They took the permissions off of Ronin Chain like roughly a year ago, maybe nine months ago, six months ago, something like that. And now that the chain is like pretty mature, they want to come back to Ethereum. So they are coming home. So they have chosen the OP stack to build their chain and they are becoming a layer two. And so what are they getting? What are they getting as an Ethereum layer 2? I actually asked Jiho this when I talked to him recently. One of the big ones is just like the code reuse in Ethereum is just so big. They love the OP stack because so many other chains are using the OP stack and so there's just like an ecosystem there. Yeah, exactly. They just want the same code that everyone else is using, but they get 15 times faster, faster block times. So they're going for 100 to 200 milliseconds, which is like faster than I thought possible throughput of a million transactions per second, inheriting Ethereum security. Security, Ron, is the token for the Ronin chain that will remain the gas token.
- [49:08]
A
Okay.
- [49:09]
B
And then they also get 7ish million dollars in milestone based grants.
- [49:14]
A
Also a bribe. Also a bribe. Also a bribe.
- [49:17]
B
Also bribe.
- [49:17]
A
Yeah, yeah. That they're not the only one. A second big win for the OP stack was upbit. So upbit is a crypto exchange in Korea. Maybe bankless listener, you have not heard of upbit? It's actually a pretty big deal. I was looking at the volumes here. They are consistently number four. Look at this, just like a hair behind Coinbase in 24 hour volume. So Upbit is a pretty large exchange, dominates Korea as far as I understand. And they have chosen the op stack. So Ethereum layer 2 to launch what they're calling Giwa. Is this a Giwa? So what we know about GIWA is it stands for Global Infrastructure for web 3 access 1 second block times. Okay. And they want to focus mainly on dominating on chain in South Korea. I kind of think this is the base of South Korea, you know, if.
- [50:07]
B
If it's got to be the coinbase of South Korea. So this is by proxy the base of South Korea.
- [50:12]
A
Yeah. And so more chains, more L2s. Two big wins for the OP stack on the week. And we are seeing actually blob get consumed as well.
- [50:22]
B
Yeah. And this is before a lot of chains are actually online. So we last hard fork, we increased blobs tar the blob target from three to six and slowly that is getting saturated. If you just like, like, like deep nerd Ethereum economics, this is kind of what this subject is. So we are up to five blocks a block, every Ethereum block being consumed. So Ethereum blob space consumption is healthy.
- [50:45]
A
And of course bankless listeners know that L2s use blob space. Right. So when this goes up, it signifies that more L2s are using, you know, Ethereum effectively.
- [50:54]
B
That's right, that's right.
- [50:55]
A
Okay. David Hood just joined the S and P indice, which is great. Okay. So when you join the s and P500 Indice, you get that nice sweet passive bid.
- [51:07]
B
Yeah, you kind of, you're just done like you win life as an equity, you are just very happy.
- [51:16]
A
So sweet premium, right? Because like a whole bunch of people, passive investors, right. Vanguard Group type investors, they just, what do they do?
- [51:23]
B
They buy the S and they buy, they buy persistently.
- [51:26]
A
So all of that's going into these 500 companies that have joined these ranks and now Robinhood is among them. Coinbase, actually, was that earlier this year they joined the S and P. And so this is almost the second crypto company to join the s and P500.
- [51:39]
B
Yeah. Robinhood jumped, like, something 15% on the news there. There. A bunch of companies were eyeing this one slot because, like, there's a churn in the s and P500 at a decent click, click rate. You know who was also eyeing this bot but didn't get it?
- [51:54]
A
Who?
- [51:56]
B
MicroStrategy.
- [51:57]
A
Oh, no, MicroStrategy wanted. Well, okay, that would be that. That's always been the goal of. Part of the goal of MicroStrategy is right, is you can kind of, like, bid yourself and, like, win enough that you get into the S and P and then you get that nice, sweet, passive bid. Yeah.
- [52:12]
B
And it's an even bigger deal for MicroStrategy, I think, than it is from Robinhood, because, like, Robinhood has to fight to get there. And all Michael Saylor has to do is just leverage up on Bitcoin.
- [52:22]
A
Huh. Okay, well, sorry Robinhood took your slot.
- [52:26]
B
I'm sure he'll get it. I'm sure.
- [52:28]
A
Do you think he'll get it eventually? Yeah, I don't know. I would actually like to dig into the criteria by which the S and P kind of. Yeah, I have a committee that decides this. And I wonder, like, what the rationale was.
- [52:39]
B
That's a very powerful committee.
- [52:40]
A
It's a powerful committee, for sure. There are many powerful committees in this world, David, including whoever runs the SEC in that committee. So let's talk about the mysterious case of Gary Gensler's missing text messages. All right, so this was an entire report that actually came out of the sec. And I'm gonna get you to describe it, but I think the summary is nearly a year of Gary Gensler, former chair of the sec. Text messages were lost. So this would be the time period of October 2022 to September 2023. They were permanently lost due to a series of avoidable errors within SEC's IT department. There's some description as to how this happened, but Notice those dates. October 2022 to September 2023. What was going on during that?
- [53:31]
B
Generally, I would just call that the height of operation choke point 2.0 of.
- [53:37]
A
Gary Gensler's villain arc over the.
- [53:39]
B
Like, we still had more to go. Yeah, like, I don't think we really got out of that until.
- [53:45]
A
That's actually.
- [53:46]
B
Wait, no, that's the. The Bitcoin ETF was filed right around then and then approved A little bit later. So, yeah, I would call that the height of Gary.
- [53:53]
A
That's when he. He was the reign of terror. That's when he charged Genesis and Gemini. That's when he set like, $30 million fine with Kraken for staking. Dropped all the coinbase lawsuits. Like, he was going. He was going wild.
- [54:09]
B
Dropped the lawsuits as in. As in made the lawsuits happen.
- [54:13]
A
Yeah. And you always hope, okay, new administration comes in and you. You kind of. That's a check on the previous guys. You get to go through kind of their. Their text messages and their email, and you say, what were they up to? I mean, there's a lot of allegations of Gary Gensler.
- [54:26]
B
Yeah.
- [54:26]
A
Being kind of unfair and being just.
- [54:28]
B
Why did you do this? But unfortunately, do this.
- [54:31]
A
We can't do that because his text messages have gone. They're. They're gone.
- [54:35]
B
They've disappeared according to avoidable, unresolved software errors.
- [54:41]
A
That's just.
- [54:42]
B
Okay, so 38 of the 1500 messages have been recovered from colleagues and related logs that were mission related. Okay. So conversations around enforcement actions or against crypto were formed. Texts from May 2023 show Gary Gensler and his staff discussing when to take action against big crypto trading platforms and their founders. But nothing, nothing material, I think, has really, really been found.
- [55:08]
A
This is Hayden Adams. He says, shaking my head, bro. Subpoenaed the text of every founder in crypto and then deleted his own before leaving office.
- [55:16]
B
Yeah. Can I bring something up?
- [55:19]
A
Sure.
- [55:20]
B
Do you remember when Gary Gensler's. What he did on April Fool's Day 2023 was the.
- [55:27]
A
Just deal with it. That's burned into my memory banks.
- [55:30]
B
He put on the Just deal with it sunglasses on his profile picture.
- [55:33]
A
Yeah.
- [55:34]
B
Can we. Can we go to that? So here's Gary Gensler sitting at his chair. This is on Twitter, his Twitter profile pictures. Wearing the. Just deal with the glasses. When I saw this, Ryan, I. I can count on, like, one hand the number of times I've been mad in, like, the last decade.
- [55:49]
A
It just pissed you off?
- [55:50]
B
This pissed me off. This was one of them. Yeah. Quiet.
- [55:52]
A
It just shows how intentional and blatant it is.
- [55:55]
B
To me, this is an admission of guilt. This was a very clear admission of guilt.
- [55:59]
A
It's kind of like a. And you can't do anything about it.
- [56:01]
B
And you can't, like. And it's so subtle. It's like it's a dog whistle. Is like, Just fucking deal with it, you crypto bros. And like, I can't take. I could never take no One could ever take this to court and be like, he's guilty. Look at this. What he did on April Fool's Day 2020.
- [56:16]
A
But we know, don't we?
- [56:17]
B
We knew. No, we know he knows what he did was illegal. Yeah, that's the whole point. He deleted his sex images. He put on the dust and dress. Deal with the glasses.
- [56:25]
A
Hey, we don't know if he deleted it. It could be an it accident, David. But it accidents happen. Totally.
- [56:32]
B
I feel like we can't conclusion accidental boat. Boat accident or whatever. Yeah.
- [56:36]
A
Meanwhile, in the Senate. Yeah. You remember the Clarity Act. So we got the Genius bill and the Clarity Act. We got the Genius bill, Stablecoin. Done. Now we have clarity. What's a commodity? What's a security? Who gets to decide that? Passed the House. Remember that. Now it gets kicked back to the Senate for a Senate version of it. So the Senate has not reviewed all the Clarity act material. They're in the process of doing this. We don't know fully what it's going to look like. But one thing that's kind of cool in the Senate version of the Clarity act is there is some language explicitly clarifying that non custodial software developers are not criminal money transmitters under section 1960. Remember 1960. That's the Roman Storm.
- [57:19]
B
That's the Roman Storm, Yep.
- [57:20]
A
Okay, so the Clarity act says that's not illegal. And here's some. Some clarity on that right now. So hopefully that makes it to the final revision. There's some other things.
- [57:31]
B
Can we retroactively apply that, please?
- [57:33]
A
It'd be nice. You'd think it would. I. I got it. This has got to make it in the court case, right? Look, guys, the US just passed laws about this, right? It's got to help this court case. Another thing. That was great.
- [57:45]
B
It is a nice. I'll just remind people that Roman is back home with his daughter in Washington and he has been. And that's just great.
- [57:53]
A
Maybe. Maybe he's listening to this episode. Maybe he's not thinking about crypto at all.
- [57:57]
B
Yeah, hopefully that one.
- [57:59]
A
Anyway. Also this. Validators are exempt from aml, KYC and anti fraud requirements. So they specified this. And they also said NFT transactions aren't automatically security. So just in case. You were worried about your Pokemon cards, David. They got that.
- [58:13]
B
I was. I was worried about those.
- [58:15]
A
The NASDAQ thing that you mentioned. Let's dig into this because I saw this. NASDAQ is tapping into tokenized equities. The headline here is NASDAQ seeks nod from US Sec to Tokenize stocks. Then I also saw the CEO Adena Friedman, the CEO of Nasdaq at the all in Summit. And here's what she said about this.
- [58:38]
B
So this morning we announced that we're going to be bringing tokenization into our markets.
- [58:43]
A
So making sure that equities are tokenized.
- [58:46]
B
And traded on market in the markets, not in a side, a side sleeve.
- [58:50]
A
But actually in the core markets. So the eventual goal, it goes on and asks, like, eventually are you going to have, you know, 24 by 7 exchange? And she says, not yet. It'll take a while. Anyway, they go on, but that was the news. Nasdaq tokenizing, it's, it's providing the option, if you want to listen the Nasdaq to either go the tokenization route or the kind of the normal route.
- [59:14]
B
So it's an either or.
- [59:16]
A
Yeah, you could do either. Either or. And these would be native, by the way. So it's, it's like native property rights, right? It's actually like NASDAQ level property rights. So at first glance, that sounds kind of cool, right?
- [59:26]
B
Yeah, that sounds, it sounds like they're just doing the thing that we want them to do.
- [59:30]
A
Yes.
- [59:31]
B
Is there, is there a catch here?
- [59:32]
A
I just, I dug into it a little bit more because the headlines were cool. It's all flashy. Unfortunately, it's not as cool as it sounds. So they're still settling on the dtcc, right? Which is the Depository Trust and Clearing Corporation. And so when they mean tokenized, they're talking about tokenizing it on the DTCC's private instantiation of a blockchain. Okay. Do you remember R3 Corda? Do you remember that? Was that like IBM or something?
- [59:59]
B
Yeah, I remember this from years ago.
- [60:00]
A
They have one of those instances running the blockchain, not R3 was the, was.
- [60:05]
B
The like institution blockchain that bought like an audio codec for some ridiculous amount of money. And everyone was like, why the hell did you.
- [60:13]
A
Trivia, man. We should do some crypto trivia sometime.
- [60:17]
B
I actually do have like 50 on. You know, Cahoots is an app called Cahoots or something. Yeah, I have like a crypto trivia.
- [60:23]
A
It's like do that as a fundraiser sometime. We just host a whole bunch of people for crypto trivia. Anyway, okay, so it's just on R3 Corda. So it's an enterprise blockchain. So it's kind of like little more than a database. This is not permissionless validators in any way.
- [60:38]
B
Who the hell cares?
- [60:39]
A
No, on chain composability no public wallets or bridges.
- [60:43]
B
I don't even know how to get there.
- [60:45]
A
You can't. Yeah, I don't know. I don't know either. Anyway, so it sounded cool, but it's not so cool unless they go to the next.
- [60:50]
B
You can't use the tokenization word on a private blockchain. That's not.
- [60:54]
A
That's our word.
- [60:55]
B
That's not. That's our word.
- [60:56]
A
Yeah, they can't use that even if you have a corporate L1. It has to be public.
- [61:02]
B
It has to be public or there's not a token.
- [61:04]
A
Exactly.
- [61:04]
B
That's our word.
- [61:05]
A
They don't know what they were. Anyway, last story of the week. David. Give me this. Robinhood. They're doing something.
- [61:12]
B
Yeah, this is pretty cool. Robinhood Social. So what's going on right now is a Robinhood summit in Vegas where they announced a bunch of things like Robinhood banking is coming, which I know we're not supposed to like banks, but I would at least like to trade Wells Fargo for Robinhood. I'll take that trade. They introduced a Robinhood Social and so a social app. So you, like, traders, I think are really going to be like first class citizens here. Social.
- [61:35]
A
Like Instagram. Like, is it like screenshots of my.
- [61:37]
B
Portfolio, imagining it's something like. Did you ever go onto Fintwit back in the day or. I think that still exists.
- [61:44]
A
What is this, a subreddit?
- [61:46]
B
No, it's like a. It's like a. It's like a finance version of Twitter, basically. And so like you can tweet out your trades and your thoughts about stuff in charts. It's just like Twitter but with more finance features built in. It's kind of like this. So it's like, it's very much like a Twitter feed, but it's. There's like embedded tickers, embedded buy, sell buttons on tickers and then you can write stuff and then you have a profile and your profile can like disclose if you're up or down. Interesting. And I, I kind of think it's interesting that like this is happening at the same time that base is going social in their own particular way, in their, in their consumer crypto way. Yeah, Robinhood's just going way more into like the financial end of things, whereas Coinbase is always trying to be consumer crypto. But. And then we also know that Sam Altman wants to make a social app as well. And so there's like a new generation of social apps coming online and that's kind of cool.
- [62:36]
A
Yeah. Do you use any of them. Is there anything that's kind of.
- [62:39]
B
Now I use Twitter. Yeah, I've.
- [62:42]
A
Social app. Has any social app kind of made it to your, like your daily active user, you know, David Hoffman, Are you a daily active user of anything new that's come about in the last, like, five years?
- [62:52]
B
I kind of would like to go the other way.
- [62:57]
A
It's kind of.
- [62:58]
B
I'd like to get off Twitter, but I can't.
- [63:00]
A
Especially this week, huh? Especially this week.
- [63:03]
B
We don't want to talk about that.
- [63:05]
A
Yeah, let's end it here. You guys know none of this has been financial advice. Even. Even that chart that I showed earlier is not actually financial advice. All right. We don't know if the buy button crypto is risky. You 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.
- [63:24]
B
Thanks a lot.
- [63:30]
A
Sam.