ROLLUP: Rate Cuts! | ZK Breakthroughs | Farcaster’s Pivot | SEC Onchain | NYT’s Stablecoin FUD

Summary

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Bankless Weekly Rollup — December 12, 2025

Episode Overview

This episode of Bankless recaps the biggest news in crypto and crypto finance for the second week of December 2025. Hosts Ryan Sean Adams and David Hoffman walk through rate cuts and Federal Reserve policy, a breakthrough in Ethereum Layer 2 ZK technology, Farcaster’s pivot from social network to wallet-centric product, major regulatory reversals in the U.S., the impact of stablecoins, cross-chain drama (Base x Solana), and shifts in community sentiment around Ethereum vs. other layer ones. The tone throughout is energetic, sometimes irreverent, and highly bullish on Ethereum and the maturing DeFi landscape.

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Highlights & Key Segments

1. Fed Rate Cut and Macro Overview

• Fed Cuts Rates: The last FOMC meeting of 2025 delivers a 25bps cut (now in the 3.5–3.75% range). Markets expected a slightly dovish shift, but crypto reactions were subdued.
• Discussion: Is easy money automatically bullish for crypto? Hosts debate pros and cons, with David advocating for a slow grind up in asset prices, not a dramatic pivot.
• Trump’s Stance: Trump voices clear preference for an immediate rate cut should he select the next Fed chair:

  • "Is it a litmus test that the new chair lower interest rate immediately? Yes." (19:25)

• Market Reactions: S&P up, crypto flat-to-down, with Bitcoin down 3% on the week to around $90k and ETH flat.

Timestamps:
[00:00] – [06:49]: Market moves, “Bart” chart formations, “Bitcoin After Dark” ETF
[16:34] – [22:01]: Fed policy, macro discussion

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2. Crypto Sentiment — Ethereum’s Resurgence

• ETH Sentiment Flips Bullish: Noteworthy, former skeptics turn positive on Ethereum.
  • Ryan Watkins: "The more time passes, the more I believe crypto natives have completely lost the plot on eth and it's becoming impossible to replicate the product that Ethereum has built..." (10:16)
  • Mike Ippolito: "Ethereum is in the best looking place that it's been in four years to me." (11:08)
• Drivers:
  • Tom Lee now owns 3.2% of all ETH (bought $420M last week) — institutional support is massive.
  • Stronger builder momentum, roadmap clarity, and ZK/L2 progress are cited as key reasons.
• ETH as Institutional Pick: “All of Wall Street, as Tom Lee says, Wall Street has picked Ethereum to do all of its stuff, mainly tokenization being the very big narrative.” (12:23)
• ETH’s Moment? Hosts draw parallels to Ethereum finally “having its cycle” after being leapfrogged by Bitcoin and Solana in recent years.

Timestamps:
[08:21] – [16:19]: ETH sentiment, Tom Lee’s accumulation, L2 roadmap momentum

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3. Farcaster’s Strategic Pivot — Decline of Crypto Social

• Pivot: Dan Romero (Farcaster founder) announces shift from social-first to wallet-first model:

  • "On chain social or decentralized social is a service to add on to a wallet... the wallet is actually the center of the ecosystem." (25:27)

• Reflections: After 5 years, Farcaster concedes decentralized social wasn't “5-10x” better than Twitter. Strong network effects keep everyone on X, even as user experience on X declines.
• Web3 Applications as Tombstones: Broad failure of “on-chain social” and “on-chain gaming” as leading narratives — maybe they’ll “sneak in quietly” in 10–15 years, but they’re not core to crypto’s next phase.
• Decentralization Not a Feature: Hosts argue: decentralization itself isn’t a killer feature—users want property rights/security, not just “blockchain versions” of web apps.

  • “Decentralization is just anti-corruption technology. And it’s not a feature.” (33:27)

• Growing Up: Crypto is maturing, refocusing on finance, sound money, and property.

Timestamps:
[25:27] – [36:12]: Farcaster pivot, why crypto social didn’t take off, broader Web3 introspection

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4. ZK Breakthrough: ZKsync Atlas & The Era of “Unified Liquidity”

• Atlas Upgrade: ZKsync launches its “Atlas” upgrade, enabling L2s to tap into unified Layer 1 Ethereum liquidity—without needing separate liquidity pools per L2.

  • “L2s tapping into L1 liquidity. No need to replicate the same DEFI ecosystems on L2s and fractionalized world liquidity well baked.” — Stani (Aave), (40:25)

• Seamless UX Demo: Example—taking out a loan from L1 Aave via ZKsync L2, no bridging or waiting, feels unified and instant. A major step in solving Ethereum’s fragmentation problem.
• Institutional Chains: UAE’s ADI Chain launches on ZKsync, complete with a central bank-regulated stablecoin, using Ethereum’s DeFi rails for real-world finance.
• Race to ZK: Celo announces being the first Ethereum L2 to use OP ZK fault proofs, following this trend.

Timestamps:
[37:36] – [44:27]: ZKsync Atlas upgrade, demos, market impact

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5. Regulatory Landscape: Full 180 in the U.S.

• SEC, CFTC, OCC — All Pivot Pro-Crypto:
  • SEC closes investigations (Ondo, dozens more), with new chair Paul Atkins stating:

    “All U.S. markets will be on chain within two years.” (02:09 / 58:00)

  • CFTC trial launches allowing BTC, ETH, and USDC as collateral, formalizing their monetary status.
  • Major U.S. banks (Citi, JPM, others) now issuing credit against bitcoin (59:51).
  • OCC, formerly a “choke point” operator, now admonishes banks for debanking crypto users.

  • "That's hilarious to me because the OCC was one of the groups telling them to go debank crypto customers." (61:19)

  • Direct connection to Trump-era executive orders pressuring regulatory review and reversal.
• Hosts’ Tone: Compare “regulatory winter” thawing to “Sauron’s tower collapsing” and classic villains being cast out.
• Clarity Act: Still stalled—50/50 chance of passing; would unlock huge growth for Ethereum and tokenization.

Timestamps:
[56:17] – [65:02]: Regulatory reversals, clarity act politics, reflections on progress

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6. Market Moves & Ecosystem Updates

• Base/Solana Bridge Drama:
  • Base launches bridge to Solana, prompting Solana ecosystem pushback; ultimately friendly but exposes tribal frictions and “vampire attack” anxieties.

  • “You didn’t talk to Solana Foundation!”—Solana community; “We just built a bridge so Solana assets can access Base!”—Jesse Pollak (Coinbase/Base) (48:34)

• Blob Upgrades: Ethereum’s Fusaka upgrade increases blob parameter for more L2 transaction throughput, with another big upgrade due in January—keeping L2s scalable and fees down.
  • “Ethereum is upgrading its supply of Blob space faster than the market can consume it...” (54:02)
• Prediction Markets: Gemini receives CFTC license to launch fully regulated prediction markets, joining Kalshi in the U.S.
• Other Memes/Quips:
  • Satirical discussion of the NYT’s “hit piece” on stablecoins:

    “It is the federal government. The only reason [FDIC] insurance exists is because the banks are fractional reserves, whereas your stablecoin is not.” (66:05)

  • "Are we in Bart season?" re: price charts (05:49)
  • “Decentralization gets in the way for most things.” (33:31)

Timestamps:
[46:47] – [53:26]: Base x Solana discussion
[52:42] – [55:50]: Ethereum's blob parameter upgrades
[65:02] – [67:51]: NYT stablecoin coverage, prediction markets

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Notable Quotes

• On Fed rates:

  “I want [the President] to be cool, calm, collected, and highly rational. Don’t shock the system. We got a good thing going.” — David, (21:49)

• On Ethereum sentiment:

  “Ethereum is in the best looking place that it's been in four years to me.” — Mike Ippolito (11:08)

• On ZKsync Atlas:

  “L2s tapping into L1 liquidity—no need to replicate the same DEFI ecosystems on L2s and fractionalized world liquidity well baked.” — Stani (Aave), (40:25)

• On Farcaster and social:

  “The wallet is actually the center of the ecosystem and all of Farcaster’s engagement has really come from people doing trading or token stuff.” — David, (25:27)

• On regulatory shift:

  “All U.S. markets will be on chain within two years.” — Paul Atkins, SEC Chair, (02:09 / 58:00)
  “That's hilarious to me because the OCC was one of the groups telling them to go debank crypto customers.” — Ryan, (61:19)

• On crypto maturity:

  “Crypto will still do the things I dreamed it would when I first entered—just much slower and more quietly than I originally thought.” — Ryan, (36:12)

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Episode Structure & Timestamps

| Topic | Timestamp | |---------------------------------------------|---------------| | Market/Crypto Macro, Price Moves | [00:00]–[06:49]| | ETH Sentiment Shift, Tom Lee’s Accumulation | [08:21]–[16:19]| | Fed Policy, Rate Cuts | [16:34]–[22:01]| | Farcaster Pivot, Web3 Social Reflections | [25:27]–[36:12]| | ZKsync Atlas & ZK Composability | [37:36]–[44:27]| | Regulatory Reversals, SEC/CFTC/OCC | [56:17]–[65:02]| | NYT Stablecoin Critique | [65:02]–[66:50]| | Base/Solana Bridge Drama | [46:47]–[53:26]| | Ethereum Blob Upgrades | [52:42]–[55:50]| | Prediction Markets & Closing Memes | [65:02]–End |

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Final Takeaways

• Ethereum is regaining both institutional and builder bullishness—layer 2 scaling and ZK innovation may unlock the “institutional cycle” long promised.
• “Crypto social” as a standalone concept is dead, but wallets, property, and programmable finance are more alive than ever.
• Regulation in the U.S. has done a complete about-face—crypto is being embraced at every level, with SEC/CFTC/OCC now in approval mode.
• Market moves are muted, but beneath the surface, crypto infrastructure and policy are at inflection points—especially for Ethereum.
• The crypto journey continues: old narratives die, others quietly mature, and the community rides “the next cycle”—hoping for more clarity and continued innovation.

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(For further detail and direct quotes, see section-level timestamps.)

Transcript

[A]

Foreign. Station is the second week of December's time for the bankless weekly roll up. We got the latest Fed meeting. The last one of 2025 is now behind us. We got a rate cut. Okay. Rates went down. So can we be bullish now? I don't know. Maybe. Depends what the prices are telling us on the week, actually. I don't know, David. Are we like. I don't know if we're flat or if we're down on the week or we're up. I just, like, I have no. I have no sense of this.

[B]

This is the information that people really tune in to the podcast to really get.

[A]

I know, I know.

[B]

If you want to be bullish, you can be bullish, Ryan.

[A]

Okay, that's okay.

[B]

That's okay. I'll give you some things to be bullish about. We're going to talk about ZK technology really maturing to the point of actually unlocking synchronous liquidity across the Ethereum rollup design space. This is a ZK sync innovation. It's going live. It is live, fixing some of the fragmentation problems that we all know Ethereum has had, which is pretty cool.

[A]

You said the S word, though. You said synchronous. I'm not sure if it's synchronous. Might be async, David.

[B]

As I understand it, Layer twos get to tap into layer one liquidity on their Layer two, which means we don't.

[A]

It's atomically composable in a transaction, I don't think. Not quite. It's async.

[B]

Not quite.

[A]

Not quite happening at its own.

[B]

But. But layer 2s don't need their own liquidity anymore. Okay. So, yes, maybe it's not synchronous, but it is one. There's one liquidity pool downstream of this innovation.

[A]

I'm sorry for getting the detail. Let's just be bullish. It's bullish.

[B]

Yeah. I got some things for you to not be bullish about. Crypto Social. We got some news around. Far Far Cast are quitting social and focusing onto wallets. As it turns out, crypto has always been about assets and trading assets. So we're going to talk about that and what that means, and then also, Ryan's going to take us down perhaps memory lane about all of the three and four letter agencies that have done a 180 pivot when it comes to the regulation around crypto. And so I'm excited for that part of this roll up.

[A]

Yeah. Especially this. Okay. This week, Sec chair Paul Atkins, the anti gensler Said this. This is a direct quote I'm gonna give you. You ready for this? All US markets will be on chain within two years.

[B]

Wow.

[A]

He used the term on chain.

[B]

On chain he doesn't mean 100% of the markets. But there will be an instantiation of all US markets on chain within two years, which is a very short a.m. no, David.

[A]

All means all. He's saying all you gotta take him at all. Also, it's pretty funny. The occ remember they were debanking people last cycle? Well, this time they're getting angry at the banks for debanking people. They're doing some finger wagging. I had to tell you about that story. And a New York Times article writes about stablecoins. It was a stablecoin explainer piece. Except for the fact they explained how stablecoins are bad and dumb and we shouldn't have them.

[B]

Wait, I thought the world loved stablecoins.

[A]

Not the New York Times. David, before we get in, we got to shout out our friends and sponsors over at Raya. This is a perps trading platform. Tell us about it.

[B]

Yeah, so there's just overall a problem in the perps trading space. You either get the speed of a centralized exchange, which traders don't just love but kind of need in order to be competitive, or you can get the security and property rights of a decentralized exchange. But that's often way too slow for any amount of meaningful activity on in the perp space. Raya is closing that gap. They have built a base roll up with ZK Proofs sub 1 millisecond trading. That seems like Lightspeed. Zero trading fees while also inheriting 100% of Ethereum's uptime and and security. No sequencer risk and no trade off between speed and decentralization. That's Raya now a top six perp decks driving over $1.5 billion in daily volume. And for all the ETH Maxis out there, 20% of Raya's fees. Burn ether. Burn ether. That's pretty cool. And so there is more information in the show. Notes Bankless CC/ Raya R E Y A to learn more.

[A]

You know, they're also doing the thing that I know you're a fan of because we recorded an episode that you researched this week is they're doing the ico. So they're on. They're doing the ICO thing. Yeah.

[B]

You know, since we published that episode, I have discovered four more token sales. I think. I think it's on. I think the meta is on.

[A]

Or did they announce post the. They listened to an episode and they were like, we got ICO stumbled maybe.

[B]

No, there's four more ICOs since researching that article. Token sales that are out in the public. So a little teaser to the bankless listeners. We're going to put some effort into aggregating all of the information, standardizing a lot of the information that ICOs are putting out so informed investors can be informed.

[A]

That's going to tell me which ones I should. I should buy and which ones I shouldn't. That's all.

[B]

I'm not going to. I'm not going to do that.

[A]

Yeah, it wouldn't be financial advice on a bankless, but give me some pricing advice.

[B]

I'll give it to you in the DM. So I'll give you financial advice in.

[A]

The DMs and I will, I will screenshot those and tweet them out as a separate product for bankless citizens. Bitcoin price on the week. Don't keep us guessing. Why are we.

[B]

No one knows. No one knows until this moment. On the weekly roll up, bitcoin is down 3% on the week to basically exactly 90 down thousand dollars.

[A]

Yeah, it was up yesterday.

[B]

Well, it's down today. People are pissed off about it.

[A]

The.

[B]

I saw a tweet of the Bart. You know, do you remember the bart formations of 2018 through 2020?

[A]

Are we getting those back? And that's. Can you describe that? Use your fingers to describe what it is.

[B]

So, so the Bart head is like this, going flat and then it goes vertically up and then it chops around and then goes vertically down.

[A]

Yeah.

[B]

And basically this is indic. Pretty low liquidity market.

[A]

The most annoying graph, I would say like chart. Like chart.

[B]

First you're bullish, then you're bearish, then you're bullish, then you're bearish.

[A]

Hate Barts.

[B]

Yeah, we hate Barts.

[A]

Are we in Bart season? Is that what we're doing?

[B]

For the last 10 days we've been in Bart season. Yeah, we're kind of grinding around. Yeah, it's ever since 1010 BART season has been around.

[A]

All right, well, I've got some. Something maybe a little bullish for you if you're. If you're a trader but you don't like to trade, which is a product that is called. That is called Bitcoin After Dark. Okay. This is not a new podcast. Sounds like that's like a TV show or something. This is an etf. A Bitcoin After Dark etf.

[B]

Sounds like a Bitcoin themed Lingerie brand.

[A]

Okay, so what is this thing doing?

[B]

This is real.

[A]

Okay. Bitcoin After Dark is a newly proposed ETF concept that would give investors exposure only to Bitcoin's overnight moves. See how the market closes, at least in US equities. Market closes at what, 4pm every day? Is it 4? 4:30? I can't remember.

[B]

4:30.

[A]

Okay, 4:30, we'll say.

[B]

I don't know.

[A]

Actually, Bitcoin still trades after that. Did you know? Yeah. So what if there was an ETF fund that only held Bitcoin during the nighttime when US markets were not trading, and then it sold it the next morning? That's what you get in the.

[B]

Bitcoin After Dark buys and sells Bitcoin every day.

[A]

It's just a nighttime product. It only holds at night, after hours.

[B]

You're paying trading fees twice a day on a huge amount of size.

[A]

Look, man, it's innovative, okay? Who says Tradfi doesn't innovate? This is the type of ETF product I think a lot of people have been waiting for, is just, what do.

[B]

You use this for? What kind of, like, position are you trying to express by only owning Bitcoin during hours?

[A]

I don't know, but Eric Balcunas is bullish on it. He said, I'm glad they're innovating, basically. What did he say?

[B]

Is that innovation?

[A]

Yeah, this is something you'd find in a defi product, I think some sort of algorithmic trading thing. And now we're getting them packaged in ETFs, which is just.

[B]

I'm only bullish on Bitcoin when the sun's down.

[A]

Want to recommend your family over Christmas? All right. ETH price, I gotta imagine, also down.

[B]

No, no, flat.

[A]

Okay.

[B]

Zero, zero percent.

[A]

Move zero percent. Yeah.

[B]

Ether doing okay? Yeah. We're gonna talk about this later, but I think because everything else was down and ether was, you know, flat, there was a moment where it was up. Like, people are bullish. Ether. Bullish Ether on the timeline this week.

[A]

Well, I'll tell you why, like, one person who's been consistent, relentlessly consistent, relentlessly bullish is Tom Lee. He's been the Ethereum hero of the cycle of 2025. He now owns 3.2% of all ETH supply. Remember, like, I didn't think he was serious when he came on Bankless and told us, I'm going to buy 5% of all ETH. And now it's less than six months later and he has 3.2%. Tom Lee, how do you do it.

[B]

Who do you think's more responsible for eth's market cap, Tom Lee or Bankless?

[A]

I think this cycle. You've got to give it to Tom Lee. You got to give it to Tom Lee. All right.

[B]

People are going to hate that I even said that.

[A]

Heavy lies the crown.

[B]

We will give you the crown, Tom Lee.

[A]

You've earned it. All right. You know all the percentages of ETH that Bankless has bought over the years, I'm sure. Okay. Anyway, so he bought about 300. No, $420 million worth of ETH last week.

[B]

Yeah. Same in the bear market.

[A]

Same. Yeah. So he's still doing his part and continues to stack. I don't know where he's getting all the money. But let's talk about the sentiment shift. You were saying. Now, this is, you know, our world is kind of the crypto native world, and that's dominated still by crypto Twitter. And so when you're talking about sentiment change, you're talking about on crypto Twitter. And there was some of that this week. Former skeptics, Ethereum, skeptics became bullish, became supporters. This was a tweet that kind of encapsulated it for me. This is venture capitalist and investor Ryan Watkins, who has since, who has previously.

[B]

Notably very bullish on Ether, very bought into the whole triple point asset thing. He was back in the day, back in 2021, 2022, five years ago. Yeah. Then his fund backed up the truck, as I understand it, on Solana in 2023, and got very bullish. Solana, very bearish.

[A]

Ethereum. Okay. And now. But now what's happened? He says the more time that passes, the more I believe crypto natives have completely lost the plot on eth and it's becoming impossible to replicate the product that Ethereum has built. He goes on and he talks about product market fit for Ethereum. He talks about network effect. He talks about entrenchment. He says Ethereum is like Bitcoin and it's got this kind of immaculate conception type of story. And he also says now that Ethereum has really gotten its shit together from a shipping roadmap perspective. I guess he's talking about sort of the future prospects of the roadmap and also the fact that Ethereum shipped to Hard Forks this year. He's like, now it's Ethereum's game to lose. And I've changed my mind on that. And that was just one of the, I guess, tweets that I read this week that embodies this Sentiment shift.

[B]

Yeah. The other one comes from Mike Epolito, who just puts it very succinctly. Ethereum is in the best looking place that it's been in four years to me. So this is kind of. This take, the sentiment is going around. I saw another tweet, I saw it in the agenda, but it was something to the effect of, you know, Ethereum last cycle of the. Of this most recent cycle 23 to the 25ish era of crypto, which I think we're calling a cycle now, is where bitcoin was in 2021. The 2021 cycle where, like, you know, bitcoin did pretty well in 2021, but it was Ethereum cycle. Ethereum, it was kind of a miss. It did pretty well. It definitely led the market. So it's hard to call it a miss for Bitcoin, but it was really Ethereum cycle. And a lot of bitcoiners felt that. They felt that just like they had just a negative attitude about that cycle because it was Ethereum's show. And I think you can play that forward. Where Ethereum got skipped this last cycle, it was Solana that really stole the show. And actually Bitcoin resurged because of what it was very, very good at, just being a 21 million hard cap asset.

[A]

I guess they decided in 2021 to just double down, triple down on narrative and institutional adoption. And that was really what gave them such a successful cycle this time around.

[B]

Yeah, now I think is that this is. The stars could be aligning for a very similar thing to happen to Ethereum, where just like all of Wall street, as Tom Lee says, Wall street has picked Ethereum to do all of its stuff, mainly tokenization being the very big narrative. So clarity, very good for Ethereum. The genius act, very good for Ethereum. Clarity is not yet through yet. But like, I think the stars could be aligning for some of Ethereum's properties that really held it back last cycle to really shine through this next coming cycle. I remember you and I had a meeting with, just a call with Chris Berniski, like two years ago.

[A]

Yeah.

[B]

And he said something that both you and I, like, didn't really like, which is like this cycle could just get Ether.

[A]

Yeah.

[B]

And that's what, that's what happened. You know what, Ryan? Like, cycle's over.

[A]

Oh, is it? Wait, I thought you told me there was no cycles. Last week you told me there was no cycles.

[B]

Cycle's over, Ryan. And now we're on to the next one. We're on to the next cycle. So like the whole cycle has skipped Ethereum. It's in the rear view mirror now. We're looking forward to the next phase of crypto. And to me, the next phase of crypto is tokenization on Ethereum.

[A]

Okay, so, but what accounts for some of the sentiment shift and the reason we highlighted the tweets that we highlighted is because previously these have been more Ethereum skeptics. Certainly Ryan Watkins has like Ippolito, I think he's been pretty. He's basically like Bitcoin is a special snowflake. Ethereum ain't nothing special. Show me how it produces revenue and then I'll believe you. Basically. So kind of a doubting Thomas on eth. From a monetary perspective, some of that sentiment is shifting and it's happening all of the sudden. Do you have an explanation for that?

[B]

Well, I know Mike Apolito would definitely agree with Ryan Watkins concept or idea that you can't really replace Ethereum. And in a very world of very saturated smart contract layer ones, the only one that truly is differentiated is Ethereum.

[A]

But that was true a few months ago. That was true like three months ago, four months ago.

[B]

Yeah. I think the market and the attitude is reorienting Ethereum from being comped to Solana to comped to Bitcoin because of that whole like immaculate ICO decentralization, censorship, resistance. Like Ethereum. The properties of Ethereum are finally starting to show through. And this is always going to be what was happened. Like Ethereum is in it for the long game and it is the tortoise, whereas Solana was the hare. And now, now the hare is like doing the whole end of story, like nap. And there's Ethereum just chugging along.

[A]

Not to over explain it, but I think it could be like three factors. Factor one is Tom Lee. Yeah. You can just institutional purchasing the message going out there like buying it because it's a story of value. You can't replace Tom Lee and that's markedly different. Okay. And he is stacking up to 5%. The second thing, I do think that Ryan is right in that we have seen much more builder momentum and clarity around the Ethereum roadmap. And that is a change. I haven't seen this much momentum in building in Ethereum. So much of a sense that, okay, it's getting its shit together since like 2022.

[B]

Yeah.

[A]

And the third thing I think is people are seeing the L2 roadmap start to come together. It's not quite there. There's still the Problems exist. But we had this this week. Lighter overtook hyper liquid. In terms of it. Lighter is a perp cell, too, in terms of volume. Perps volume. And so people are seeing ZK, people are seeing the L2 roadmaps start to work. Some of the fragmentation issues have a path to resolution, and they're just getting more bullish on the roadmap, too. I think that stuff might account for it. Some skeptics might say, well, it's just because ETH price outperformed on the week. But I think there's some fundamental changes here, too.

[B]

I do think it was a decent amount of ETH price outperformed on the week. I do think that that's just something to do with it. But why did it outperform on the week? Like, what was some of the reason? Well, because Tom Lee bought a bajillion dollars of ETH.

[A]

Thanks, Tom.

[B]

Thanks to total crypto market cap $3.15 trillion. So still pretty low. So pretty.

[A]

I'm.

[B]

I don't know about you, Ryan, but I've been buying. I've been buying crypto assets and other assets over the last, like, two weeks.

[A]

Not financial advice on Let's.

[B]

I didn't say that. I was saying what I was doing.

[A]

I know, I know. And I'm getting ready to package everything that you're doing and selling that as a product. You want to talk about what the Fed is doing? So this was the fomc, last FOMC meeting of the year, and there was a rate cut. 25 bips. Yay. You think? Okay, so David's in favor of rate cuts. He likes easy money policy.

[B]

Yeah, I like easy money.

[A]

He's got crypto bags.

[B]

Who doesn't like easy money?

[A]

No, I think maybe it's not good for us. How about that? Maybe it's not good for the US to have easy money.

[B]

It's only. It's only 25 bips.

[A]

Okay.

[B]

Never hurt anyone.

[A]

Yeah, 20. 25 bips, all the way to zero. I don't know where we're going, but we're at between three and a half to 3.75%. And the framing of this, because it's always, you got to justify your BIPs, whether they're up or down with a story. And the story was because there were slower job gains, slight rise in unemployment, and inflation that's somewhat elevated, but, like, not so bad. So we can cut the rates here. The vote was 6 to 3. Of course. 1. Governor, this is maybe Trump's favorite. Steven Moran. He wanted a Larger cut. He wanted to go to 50bps, isn't it, Steven Mirren? Yeah, thank you. That's probably right. So that happened. And also a little bit of, I'm not going to call it QE because it's not. But a little bit of Fed balance sheet adjustment up is happening.

[B]

Not QE though.

[A]

Not qe. It's actually kind of not QE because it's more on the T Bill side of things.

[B]

No one knows what QE is anymore.

[A]

Well, Powell stressed that these bill purchases. Let me tell you what he did. So the Fed is going to buy $40 billion. So this line is going to go up about $40 billion in the next 30 days. That's not in the trillions. Like you see. This is measured in the trillions. Right.

[B]

Pretty billion number.

[A]

Just a little bit. Just qe. When it was going full steam ahead, you know, it was like 800 billion, like that level. So we're talking 40 and it's all Treasuries. So these are short duration bonds. True. QE would be a bit more on the long duration side where you really get to kind of adjust rates around this. And so a little bit of that is happening. And Powell emphasized that this is just temporary. Basically, we're just. How do you say it? We're just trying to balance. What's the word he used? It's policy neutral. I don't know. It's not a big deal. It's not QE. Okay.

[B]

Dude, $40 billion seems like such a small number. I'm just kind of like, why bother?

[A]

Yeah, why bother? Well, Powell will not be the Fed chair for much longer. His tenure does expire and Trump was actually asked about this in an interview.

[B]

I'm so glad he was asked.

[A]

Let's play it. I want to ask about interest rates because a lot of Americans agree with you that they're too high. You're going to pick a new Fed chair soon. Is it a litmus test that the new chair lower interest rate immediately? Yes.

[B]

Oh my God. The timing on that. I don't even. Maybe that was edited. But just like the speed at which the yes comes out of that man's mouth is just.

[A]

He just says what's on his. Like, he, he's a, he is an open ledger.

[B]

Totally. Which I appreciate.

[A]

Yeah, I mean this would be, you know, most politicians would be like, well, I don't want to seem like I'm influencing, you know, independent monetary policy.

[B]

I want easier money. I don't.

[A]

So what do the markets do? S and P went up crypto closed red on the day the two year and the ten year treasury went down, dollar went down a little bit, 0.3%. The big question here is like easy money, right? It seems like this is easy money, rates going down. It seems like that dovish monetary policy should also be good for risk on assets. Michael Nadeau, always with the kind of the contrary take around this lately, says that doesn't necessarily mean it's dovish for risk assets. So first of all, it's only $40 billion. This was short duration. So this is not the type of QE that we've seen before with long duration bonds. So there's not a suppression of the long ended yield and broadly financial conditions are easing. So he said if this was risk on the way, we would want it. The way you want it, David, that you're excited about. I would expect to see long bonds dropping and more of an impulse from Bitcoin. So he would have expected Bitcoin to kind of react to this. Although I do think I haven't looked at gold prices. I think maybe they were up a little bit. I don't know. I'd have to go check on that.

[B]

To reiterate, I am a fan of the slow long term rate cutting without any sort of like material changing, of course, which I actually would consider like Donald Trump coming in with a, with a Edward Scissorhands and I don't want him to do that because I don't want him to. Just like I've said before, we've got a good thing going. Like if you look back historically over the last two years, prices are up and I want them to stay on that slow grind up and I don't want anyone to.

[A]

So you just want the President to be cool, calm, collected and highly rational? Yes, no problem. We got, that's easy.

[B]

Don't shock the system. Like we got a good thing going.

[A]

That's going to go great. We'll see who he nominates. David, what else are you talking about?

[B]

Coming up next, we're going to talk about crypto social forecaster pivoting to just crypto pivoting to a full wallet. We're going to talk is crypto social over? And were we naive to even think it was a thing in the first place? And then Also, did the ZK Sync upgrade fix Ethereum's layer 2 fragmentation problem? We're gonna talk about all this and more. But first a message from some of these fantastic sponsors that make this show possible right now. I talked about how ICOS are back. Well, Uniswap's CCA model is the bankless on chain way to float your token into the market. Let's go hear from Uniswap right now.

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[A]

Yeah, I mean wallet first approach rather than social approach. Whereas previously I, you know, they would have been reversed. They were a social network with a wallet. They had pretty big ambitions around this and they've been doing it for five years and they've built through multiple bear markets. I, I don't think it's a, it's a good take to say that they haven't tried. Yeah, this is Dan, he said the goal has always been to build an at scale decentralized social networking protocol with 1 billion people using it every day. They were trying to get to Twitter level usage and saturation. How are they doing that? Well, it's Twitter but it's decentralized. Was the take you own as a user, you own your own property. Any client can build on top of it. We're protocol first. That was the pitch and it didn't take off. And I'm curious your thoughts on why it didn't take off because I do think they genuinely tried and they aren't the only team that has tried and there's been like lens protocol, there's been a Number of crypto social networks have tried. This is one of the most legitimate bilious teams actually working on it and they couldn't make it work. My take is it just wasn't ever. It's so it wasn't ever 5 to 10x better than Twitter in order to get kind of the network and like the network effects in social networks are surprisingly strong.

[B]

Yeah. Like, I mean you and I have tried out Farcaster. I've gone on to Forecaster four times over the last two years and it. Does it ever. Is it ever sticky? Not really.

[A]

And why not? I like, I went in series where I'd be like, okay, like I'm going to use Farcaster, this one. Yeah. You're trying to get way more serious regime. Yeah, I'm like, I'm going to do it. You know, I'm going to do it. I'm going to build here. And I just kept getting pulled back to Twitter and that's in. Despite. Despite the fact that X is kind of shitty. Yeah, it's bot. It's bot farmed. It's. But like that's still where things happen, news breaks, conversation is happening. The people I know are like, it's the center point even for crypto conversation.

[B]

Yeah.

[A]

Why do you think this didn't work?

[B]

Partly because of what you just said. X network effects are very large. But you could also just look at kind of a graveyard around Crypto Social with other Web three subjects. Like there's a lot of Web three subjects that are just tombstones. On chain gaming, for example, is one of them. Just like generally speaking, Web3 hasn't done well as a concept. I know Chris Dixon's whole like, read, write, own thing, which he. Like that's what he'll equate to Web3 is, is like, yeah, you get to own stuff. Like, yeah, that's true. That's totally what crypto is. But like there was a on chain maximalist position where it's like on chain gaming and on chain social and you know, pick your, pick your thing and you're going to move it on chain. That never really has happened. And they kind of coincides with some of one of those articles that went around Crypto Twitter of just this one guy, founder of Ribbon Finance, wrote an article saying like, I've dedicated eight years of my life to building out this casino and now I have rag rats.

[A]

Did you. I know you read Nick Carter's counter to this. Yes. And I think that's a, that's a clue. So Nick Carter wrote an article Entitled I do not regret spending eight years of my life in crypto. And he actually talks about, he talks about five kind of canonical use cases or like reasons to loy.

[B]

Dude. Is that the word?

[A]

He's throwing some lag in there.

[B]

He's such a. What is it? Classicist.

[A]

Yeah, yeah. Anyway, so he, he said there's really, there's like five reasons or like moral virtues or goods that like crypto is providing the world. Number one, the sound money thing, the hyper bitcoinization of the world, or if you're an eth maxi, the hyper etherization of the world. Number two, make everything smart contracts. You take existing business logic, you turn this into smart contracts. You know, maybe defi fits in here. Number three was what you just said with Chris Dixon that would be making digital property real. And that's where we get NFTs and Web3 Social. That kind of fits there. Number four is you take tradfi, but you make it more efficient. Right? Making capital markets more efficient. That's something that crypto can do connected to, number two, COBOL mainframes. And we're upgrading that. And then number five is broadening financial access, so giving everyone basically a bankless bank account and you can come on the world's greatest financial system. Now, of course, all of these are tied together, so it's sort of a Venn diagram of interlinking circles here. But number three, making digital property real. We had NFTs. You mentioned Web3 gaming, the whole Web3 concept, even of what, you know, like socials wrapped up in there. Yeah. Are we giving up on all that or are we like, are we like growing up and just realizing that maybe crypto can't do all of the things we hoped, but it does do some of these things. Like are we giving up on the web three thing?

[B]

I'm not. I think there is a more suitable suited order of operations on some of this stuff. Like sound money obviously comes first. Bitcoin obviously comes first. And then after that comes something along the lines of defi and smart contracts and putting Wall street on chain and some of the big aspirational kind of grandiose ideas that I think we all got starstruck by both in 2017 and 2021 on chain gaming and on chain social being two fantastic examples. Like, I think we'll kind of get there and we'll get there last. We'll get there at the end. We'll kind of like go full circle in like 2040. We'll, we'll look at some of the stuff going on be like, oh, that's on chain gaming and that's on chain social. And actually it kind of just like showed up. It kind of just sneaked its way into the ecosystem without actually anyone really building it in particular. We're kind of just like end up there to kind of realize that a lot of the original ideas actually did end up playing out. Not in ways that we thought we didn't get there directly, but we did kind of get there in a roundabout way. And I think we kind of have to just do a few things. First we have to legitimize crypto, get stablecoins into people's wallets, give people wallets in the first place, you know, get people using the finance side of crypto. And then all of a sudden when like literally everyone is using a wallet on a day to day basis in one way or another, whether it's through, I don't know, like Robinhood or Coinbase or anyone's got a wallet somehow, then all of a sudden like it's going to be a lot easier to do on chain gaming and on chain Social than it was prior. But first we have to kind of go through the correct order of reparations. And I think we just were too early on a lot of stuff that we labeled Web3 in 2021 and 2022.

[A]

I think part of Web3 that made sense to me was the part that was around property and property rights and the part closer to kind and ownership and everything tied in with kind of like finance fits that. The part that made a lot less sense and never had heat around it was like the we're going to take the Internet thing but we're going to make it decentralized and acting as if decentralization was like a feature. And it's not. Decentralization is just anti corruption technology. And it's not, it, it is not a feature. Right. If you take that and you build sound money on top of it because you need anti corruption technology, well then you have a feature. But the feature is like the sound money.

[B]

Yeah.

[A]

It's not decentralized. Decentralization just gets in the way for a lot of things.

[B]

Yeah, yeah. It's actually inappropriate in most circumstances. Yeah.

[A]

And I think we went, some, some aspects of crypto went in the wrong direction. But I also agree with you, like, I think in the fullness of time a lot more will be in cover. And so like you're part of. Maybe there is a version of Web3Social that works and it's probably around kind of like more like property rightsy type stuff. But also it could be the case that the time is not now and the time will be later. But one thing you said about this article was that you said you strongly resonate you came into crypto as a starry eyed dreamer, but there's seeing the good future that crypto could bring. But you said, I see much less of that in me now. I was also dumb and naive back then. You were dumb and naive back then. So are you smart and wise now? Like what do you think is incredibly.

[B]

I mean, in 2017 when I got into crypto, I didn't know shit, dude. I fully believed every single ico, every narrative, every narrative that I.

[A]

Did you invest in a dag?

[B]

I did invest in a dag.

[A]

You know.

[B]

You know what? I also invested in Substratum. Do you remember that one? Yeah, it's something to do with decentralizing web pages or something like that. I can't remember.

[A]

I bet you invested in the interoperability networks too.

[B]

Probably. Yeah, yeah, yeah, yeah, yeah. No, I didn't, I didn't know shit, dude. And yeah, I mean that was me growing up and I, I feel like that's probably how everyone gets into crypto is like this is going to revolutionize everything. Not only is it going to revolutionize everything, it's going to revolutionize, revolutionize everything tomorrow. And I need to buy right now and tell all my friends about it. And then like you realize, you know, I know you know this Tyler Cowan's main argument about why AI is just not that revolutionary.

[A]

Yeah.

[B]

Is that it just takes a while for new revolution to technology to get to the rest of society. It takes a while.

[A]

That's because the rest of society, things move a lot slower than the tech. Right. It's like regulatory is an example of this. Right. The existing regulatory systems have to adapt to see smart contracts as some sort of law type of thing. That can be respect respecting a court system. Right. All that, the human stuff takes so long. That's his point around AI.

[B]

Yeah. And like I, I live in New York City, which is a very fast paced city. I worked in crypto, which is a very fast paced industry. Most crypto people use AI, which is also pretty fast paced. Have you ever talked to somebody who, I don't know, lives in like Oklahoma.

[A]

Doesn'T change very much.

[B]

They, their life is mostly the same year in, year out. Yeah. And like the rest of society, like we're in a very, we, we go fast here. We go fast in crypto and we have fast. We're in a bubble.

[A]

Bubble, yeah.

[B]

Rest of society doesn't go that fast. And it takes time.

[A]

No, it takes time. I, I see, that's true. But you also said this crypto will still do the things I dreamed it would when I first entered, just much slower and more quietly than I originally thought. I, I kind of resonate with this too. I feel like simultaneously crypto is doing less of what I thought it would do and also more so less in terms of total expressivity of all the use cases that I thought it might do at one point in time. But the things that it's doing is to a deeper level and in a way that seems so full steam ahead and it's accomplishing more the speed at which it's actually revolutionizing Wall street and saturating that getting the genius bill signed. These are huge things, milestone moments. And so at the same time, it's come farther than I thought it would when I started in crypto, but also just in a more limited, In a different direction. Anyway, let's talk about zk, David. So part of maybe why people are bullish Ethereum, as we talked about early, is ZK technology. So tell us about this. This is ZKsync. They are deploying ZK technology in a layer two and unlocking some pretty cool things with. They call it the Atlas. That's. That's their name for Atlas upgrade.

[B]

Yeah.

[A]

Okay, that's an upgrade. Tell us about this.

[B]

Yeah, it's kind of. It'll probably be ZK Sync's biggest upgrade ever. Maybe mainly because it's just like kind of fulfilling one of the early visions of ZK and ZK Sync, generally speaking. So they went through the Atlas upgrade to transition zk sync from a single layer 2 into the elastic network. In order to visualize the elastic network, I want you to imagine lightning or tree and tree branches, things branching off of each other and new chains are spinning up with an elastic amount of scale. So elastic scale with like permissionless addition of new chains. But the whole cool thing about this is that whole meta network, that whole network of networks all has unified liquidity to Ethereum. Okay, so earlier when we started the episode, I said synchronous. I meant to probably should have said unified. So the, the ZK elastic network has direct access to layer one liquidity in layer one smart contracts. And so if you got ether on the ZK elastic chain layer two meta network, you can you make a layer one transaction that accesses the business logic of layer one smart Contracts as if they were on the layer two.

[A]

This is. Can I show you this? This is a demo. So this is a demo of. I believe what they're trying to do is they're taking out a loan, they're on a zk sync L2 and they're taking out a loan on L1AAVE. So interacting directly with L1AAVE in a seamless slip way without having to bridge over.

[B]

Correct.

[A]

And you could see in this kind of. This is a test environment, but this is essentially what the Atlas upgrade does, is this all feels very seamless. You don't have to move assets anywhere, you don't have to wait, you don't have to bridge. You're in your same wallet if you're in a Zksync L2 and you can just get access to all of the defi and all of the liquidity on top of Ethereum. So it feels much less fragmented. And they can do this because ZK proofs essentially. Right. Rather than optimistic fraud proofs with long withdrawal windows and they do some magic with bundling transactions. Integrate that in the wallet and it all feels nice and seamless. If you're in a Zksync L2, which.

[B]

Is a big step, this is a pretty big deal. One of the ways to illustrate why this is a big deal is you got to know that AAVE just loves this. Just because imagine zksync not being able to do this. I mean like aave, please build and maintain a nave deployment on our chain for.

[A]

Yeah, deploy another thing of aave.

[B]

Yeah. Whereas where now ZK Sync is like, no, we're just going to use the layer one aave. Like the layer one AAVE is the zksync Layer two aave. So that's pretty sick for aave. Pretty sick for zksync users who get to access to Ethereum's Layer one AAVE implementation, which is the most liquid implementation.

[A]

It's exciting to me when the builders say it right, because like we've got all the infrastructure stuff. But here's Stani, he said from AAVE, of course, this is a game changer. L2 is tapping into L1 liquidity. No need to replicate the same DEFI ecosystems on L2s and fractionalized world liquidity well baked. He's a big fan of this model.

[B]

Yeah, yeah.

[A]

For exactly the reasons you said.

[B]

The thing to pay attention to is like this was always going to happen with ZK. There's kind of a race to get here with ZK now that ZKsync has layer two users accessing layer one liquidity with their ZK implementation. That kind of sets a standard, a ZK standard. That other layer 2s might also want to use that same sort of infrastructure. This is also going to speed up, by the way, as ZK proving gets faster and faster and faster so that we can get cross chain synchronous composability. This is like the first step to get there. And as more people use zksync's technology, then all of a sudden that technology gets more robust and might become the standard for the ecosystem.

[A]

That's right. And maybe we can on bankless coin another phrase here like the defi mullet, you remember that? What about the L2 mullet? Okay, where it's a bank in the front, but it's an L2 in the back. And some of that seems to be happening because this is appealing in particular for institutions. That's who Zksync is going after. And these are institutions. I'm like, oh my God, you're doing something in crypto. I can't believe it. And it's hard for me to know how serious they are about it. But look at this. This is the ADI chain. ADI chain that just went live. I'd never heard of this. Went live with zksync Atlas. This is actually the United Arab Emirates. It's a chain backed by their central bank. Okay.

[B]

Oh, what?

[A]

Yeah. So a bunch of regional banks in the uae, a sovereign country, got together and launched this chain. And they have a stablecoin that's regulated by the UAE central bank on top of it. So it's all sanctioned. And the idea is that UAE residents can use a digital currency, basically a stablecoin, as a bank account. Essentially. They didn't even know necessarily they're using crypto. Of course, all of this is private. So part of zksync is it could be, it can be private as well. But then it's all connected to the L1 ecosystem. So if anybody or even some of these regional banks on this ADI chain want to go take out a hundred million dollar money market loan against aave, they can do that seamlessly without having.

[B]

To bridge or provide any user the yield that AAVE provides.

[A]

That's right. Default what? L2 mullet, baby.

[B]

That's crazy. That's crazy.

[A]

Kind of cool. Kind of cool.

[B]

All right, all right. Not just ZK Sync building stuff in the ZK world. Celo is also the first Ethereum layer 2 to use op zk fault proofs. God, if Any new listener of Bankless is listening to this. We lost them all going on op ZK fault proofs using on an Ethereum.

[A]

Simplify it. Where do they actually go?

[B]

Okay, so this is the jello hard fork out of the Celo ecosystem. Celo was an OP stack chain. Let me make this as complicated as possible. It was an OP stack chain which is naturally an optimistic roll up. So you have the optimistic seven day settlement windows of non interoperability fraud proofs. But they just did their hard fork brings in using Succinct op succinct which we've covered before. They're calling it the light version of that. A light configuration of an OP powered system by Succinct proving network to give the OP stack roll up ZK fault proofs without turning them into full ZK rollups that prove every transaction. Dude. Oh my God.

[A]

Why isn't crypto mainstream? Why isn't crypto. It's really cool. It's cool though, right?

[B]

It is.

[A]

Basically the story is all of these fault proof optimistic roll up chains with seven day withdrawals, they're all going to get upgraded the way Celo is upgrading Jello to zk.

[B]

We're just not ever gonna have to use fraud proofs ever again. And they're just gonna be ZK proofs and when there's just one implementation, we don't even have to talk them at all. Jesus. All right, let's go. Let's go to our next section. We we got this will be a more accessible BAS built a bridge to Solana and Solana totally loved it. Three major regulators continue their complete 180 on crypto regulation and also the New York Times runs a piece on how much they love stablecoin. So we're gon about all of this and more. But first a moment to talk about some of these fantastic sponsors that make the show possible. Mantle has launched a global hackathon until the end of 2025. The focus is on building the future of real world assets from now until December 31st. Mantle is inviting developers, founders and innovators around the world to design and launch new real world asset and defi products on Mantle. The reason to build here is simple. Mantle is not just another blockchain. It is an ecosystem built for builders who want real distribution and real users. Projects on Mantle have access to tap directly into Bybit, one of the largest exchanges globally, giving teams exposure to more than 70 million verified users and potential listings through Bybit launchpad and launch pool. The Mantle ecosystem is backed by a $4 billion treasury that supports growth with grants, liquidity and venture investment, and all of it runs on a modular Ethereum layer 2 stack that delivers high performance, low fees and and full EVM compatibility. The hackathon features $150,000 in prizes plus grants, incubation and direct access to top VCs across six tracks including real world assets, DeFi, AI, ZK infrastructure and gaming. If you're ready to build where real world finance meets on chain innovation, join the Mantle Global Hackathon at MantleNetwork IE Hackathon or click the link in the show notes for more information. Introducing FRAX USD the Genius Aligned Digital dollar from frax. It's a secure, stable and fully backed by institutional grade real world assets, Custody by BlackRock, Superstate and Fidelity. It's always redeemable one to one, transparently audited and built for payments, defi and banking. The best of all worlds. At the core is fraxnet, an on chain fintech platform built to align with emerging US regulatory frameworks where you can mint, redeem and use FRAX USD with just a few clicks, deposit usdc, send a bank, wire or tokenized Treasuries and receive programmable digital dollars straight to your wallet. Fraxnet users benefits from the underlying return of US Treasuries and earn just by using the system. Whether you're bridging, minting or holding your FRAX USD works for you. FRAX isn't just a protocol, it's a digital nation powered by the FRAX token and governed by its global communities. Join that community and Help shape Frax Nation's future by going to frax.comrbankless Frax designed for the future of compliant digital finance.

[A]

Base is a layer 2 chain from Coinbase, of course, and they launched a bridge to Solana. But was this a hidden vampire attack against Solana or was this an act of love? They're just trying to get more people on chain as Jesse always says, answer.

[B]

Is yes, answer is yes. So it's a pretty simple like proprietary Coinbase based bridge. So you just lock up assets on a base controlled contract on Solana and then base will mint those same assets on base. In theory you can go the other way, but there's definitely a clear emphasis on the directionality of the bridge. Jesse commented, saying we built a bridge from base of Solana because we think the global economy should be connected and that base builders and creators should be able to access the capital markets on Solana. And so some of the early integrations here include Zora Aerodrome Virtual's Flaunch and Relay. These are all BASE applications that you can now put Solana assets into the base applications.

[A]

The Solana Tokens, they live in a different world pretty much, right? Yeah, it's all in the Solana ecosystem. There's tons of them, lots of meme coins and such, but it's not ERC20 standard, so none of that exists inside of base.

[B]

Yeah, so you need some sort of like central operator to coordinate assets across these ecosystems that don't talk to each other because naturally Solana is on the Solana virtual machine and bases on the Ethereum virtual machine. These things can't communicate. And so the base bridge does that work of communicating assets across chains.

[A]

Makes sense.

[B]

Makes sense. The important thing is, is you can just do this. Base can just do this. They are both our permissionless ecosystems. And so BASE did a thing to put Solana assets on side of the base chain. That's not really how the Solana ecosystem community received it. They took the more of the vampire attack position here. The founder of a Solana platform tweeted out, these are not partners talking about base. If they had it their way, Solana would not exist. Jesse, the founder of base, replies to this on Twitter saying, what? We just built a bridge to Solana because we think Solana assets deserved to have access to the base economy and that base asset should have access to Solana. That same person replies saying, you didn't set up a single Solana partner for launch, didn't talk to Solana foundation for Marketing or Ops for you just dropped a repo. Uh, and then Jesse replies, which I actually think there's a bunch of extra context that I'll have to say to. To help with this. He replies, just for everything, everyone following along here, there was some communication breakdown here that we are digging into and solving, but it's not true that we didn't talk to Solana folks or work with Solana Partners. We spent the last nine months building this, including publicly announcing it five months ago. @ many point during that time we tried to get engagement from people across Solana, but folks weren't really interested. But we did end up with a bunch of great memes like Trencher and Chill House collaborating with us on it. Now, Ryan, I know you don't know what those two things are. Chill House is this Solana meme that ported, as I understand it, ported over to BAS when BAS announced this like a number of months ago. And so there was this drama about the Chill House Lana meme. Now migrating, moving Doing something with Base. Like taking this opportunity to move to.

[A]

Base. Oh.

[B]

No. And Jesse supported this and that caused of drama. So like this has been the base Solana Bridge that was announced forever ago. We talked about that on a week.

[A]

Ago. I remember talking about.

[B]

It.

[A]

Yeah. That's why I'm wondering why people are.

[B]

Surprised. Yeah. And so the. The fact that somebody said you didn't talk to the Solana foundation marketing or Ops. I didn't know you needed to do.

[A]

That. This all feels really silly to me. And I don't know if this is just like actual drama or if it's just stupid Twitter drama. The net of this is Solana. They're doing their Breakpoint conference right now, I believe. Right. So it's mid Breakpoint and Base went on stage, or at least Coinbase did. Somebody went on stage and they announced. This should keep the Solana folks happy. A way to trade all Solana tokens through Coinbase through kind of their Dex ui. The Coinbase wallet.

[B]

App. Yeah. Similar to how you can trade any token on aerodrome, which is a Dex on base. On the Coinbase front end they are now just in the enabling that with a Solana Dex. Don't know which one, but you can now do that through the Coinbase front.

[A]

End. I guess they're all friends again, huh? Or maybe that was I. They'll always be frenemies a little bit. Just like everything in crypto, I think. But it is interesting to see Base versus Solana. Some of these head to head fights and.

[B]

Competition. I love the line. You didn't talk to the Solana Foundation. Totally. Okay. Anatoly, just as a last comment on this whole.

[A]

Thing.

[B]

Yeah. He did tweet out that that the bridge is bidirectional in code, but not in economic gravity. If the bridge just lets Base app import Solana assets while keeping all execution and fee revenue on base. It extracts value from Solana without reciprocating. Is there an alignment notion of alignment coded in.

[A]

Here?

[B]

Yeah. Am I saying is this.

[A]

Alignment? That sounds like alignment to me. Economic alignment is another version of alignment and pretty important to Anatolia, I'd.

[B]

Imagine. Sorry, I'm having news. I'm having too much.

[A]

Fun. Yeah, I mean, I barely paid attention to that. So thanks for explaining it all. Ethereum Fusaka upgrade shipped last week. We talked about it. Maybe one of the things to emphasize and underline was bpos blob parameter only.

[B]

Upgrade. Here we fucking.

[A]

Go. All right. So you think this is a big deal? It was actually activated on Tuesday, so this didn't happen at the hard fork last week, it happened Tuesday. So there's a bit of a delay and by the way, BPOs are going to go up again now. There's going to be another blob increase, I believe in.

[B]

January. Have we said what a BPO.

[A]

Is? No, we.

[B]

Haven'T. A blob parameter only is now.

[A]

Live on the network and that gives us basically layer 2s. So chains that settle on Ethereum will have more transaction throughput as a result because blobs are their fast lane for transaction throughput so they eat a lot more. Which means transactions on L2s get cheaper and become much more.

[B]

Scalable. Yes, correct. Blob parameter only. We don't really need to know that. What we do know, what we do need to know is that this was bundled in Fusaka. This was an intentionally delayed activation. So however many days after Fusaka it got activated like five or a week or something. And really I'm pretty sure the purpose of that is just to like not change too many things at once. Kind of had siloing of.

[A]

Concerns. That's.

[B]

Right. And so the blob target. So Ethereum blobs increase from 6 to 10 and then the maximum blob limit increased from 9 to 15 and so roughly like a 40% increase of blob.

[A]

Size. And the one in January, what's that going to.

[B]

Do? 10 to 14 with a maximum of 15 to.

[A]

21. So another 40% 6 to 14? Basically, yes. No, no.

[B]

Sorry. In January we will have gone from 6 to 14 with a fusaka fork. Yes, which is quite a big.

[A]

Deal. So much blob space. This is a dashboard Dune analyst dashboard from Hildabi of average blob count per block. And you could see we were just about reaching the ceiling of demand, starting to exceed supply. And then we just got another boost upgrade, another blob stimulus upgrade and we're going to get another one. It's going to be a while before L2s probably hit those things. Well, it depends on how fast they.

[B]

Grow. Yes. I mean we could see between the period of October of 2024 until April of 2025 blobs were at saturation and layer 2s were consuming as many blobs as Ethereum was able to supply to the market. And so layer 2s had to go look elsewhere, they had to go to Celestia or Eigen Da. And then Ethereum increased its blob count from three to six. And then as we just upgraded just now, like Ryan said, blob's consumption basically was approaching 6. Hadn't quite got there. Which is good because what that means is Ethereum is upgrading its supply of Blob space faster than the market can consume it, which means Ethereum is scaling. Transaction fees continue to be extremely cheap on Layer twos. And again, like Brian said, we are going to increase this even more in January, which means there is a significant amount of slack in the Blob system for Layer Twos. And the fact that Ethereum is delivering this ahead of actual saturation and not, not six months of saturation after, I think is very, very bullish because that means just Ethereum is scaling and.

[A]

There'S a path to continue delivering on this. Right. At a very frequent cadence. This is kind of Daven's Parad type thing of like, you know, the more. The cheaper the cost resource. Yeah, the cheaper resource, the more that will be consumed. And I think that's exactly what's happening.

[B]

Here. Saturated blobs is a legitimate argument as to why a chain would launch as a layer one instead of a layer two. And so if blobs aren't saturated, then that argument doesn't.

[A]

Exist. David, I want to tell you about the different world we are in from a regulatory perspective. And I know we've covered this so much, but every time I look at it and zoom out, we need it. Yeah. Okay, so regulator's doing a complete 180 on crypto this year. And it really feels to me like do you know, like in the Disney movies when the spell is broken and the villain gets. Or like take Lord of the Rings, you know, Sauron. The ring gets cast in the fire and Sauron's tower collapses and all of the darkness fades away. That's what's happening right now is all of the darkness is receding.

[B]

From. Is Gary Gensler Sauron in this.

[A]

Example? Yes, pretty much. Anyway, okay, let's talk about three agencies here and what they're doing. So the first sec. The SEC is ending a two year investigation into Ondo finance tokenization platform. I want to zoom out and remind you that the SEC had enforcement actions in close to 20 different crypto companies. Many of these notable a dozen inquiries and lawsuits have now ended with no enforcement. Ondo being the latest. So and we had Corey Frayer on, who was actually Gary Gensler's lieutenant and he didn't like this at all. I mean he was orchestrating a lot of this, but he basically said this is unprecedented. It's never been the case that it.

[B]

Was. They were.

[A]

Unprecedented. They were Unprecedented first and now we're undoing the.

[B]

Unprecedentedness. It's unprecedented that we had to deal with your.

[A]

Bullshit. We were so kind to him though. I do appreciate him coming on. Let's talk about the new, the new SEC chair. He had a quote this week. I'm just going to play. This is Paul Atkins. There were only two countries in the world here in last few years.

[B]

That were working to make cryptocurrencies illegal.

[A]

And that was communist China and the US through the.

[B]

Sec. So that's changed. It's a new day.

[A]

Now. And so we want to embrace this new technology. I love how he just compared the Gensler SEC to communist China, David as the SEC chair doing that. And he's saying we're completely changing now. We're going to embrace it. So that's the sec. They could not be more pro crypto, more bullish on crypto. Also, the CFTC launched a digital asset pilot allowing Bitcoin, ETH and USDC to be used as collateral. Okay, so this effectively recognizes both Bitcoin and ETH as well as USDC as money for margin collateral. This is a legitimate legitimization process of Bitcoin ETH as commodity monies and for use in derivatives and other CFTC regulated collateral. So that's a big deal too. Joseph Shalom from this, the CEO of the co CEO of Sharplink says this is further recognition of ETH as the pristine collateral bridging tradfi and defi. So more legitimacy on that side. You could also see this with Bitcoin. US banks are now able to issue credit against Bitcoin. Okay, so being Bitcoin being used as a unit of debt is kind of important and interesting. Here. This is Citi, JP Morgan, Wells Fargo, BNY Mellon, all of these, Michael Saylor said this are now issuing credit against Bitcoin. So it's not just the crypto companies doing this. This is major banks allowing you to take loans against your crypto money.

[B]

Collateral. That's kind of huge. I feel like that's a very big.

[A]

Deal. I.

[B]

Know. Going back to Nick Carter's article of like the five things that crypto is really good for. Number one, the restoration of sound money. This is that banks issuing credit against Bitcoin banks are saying, yeah, we'll give you a loan against the biggest banks in the world. Coin your world, it gets your magic Internet.

[A]

Money. Isn't that.

[B]

Insane? We'll give you dollars backed by your magic Internet money. That is a.

[A]

Monument. Yeah, I know. Sometimes we don't zoom out and reflect about how far we've come. Last thing I want to tell you about on the regulatory front is the occ. So that's another three letter agency. And do you remember this is the.

[B]

Office. Office officer of the currency comptroller. Yeah, comptroller is such a weird.

[A]

Word. Comptroller, like a super finance accountant guy. Anyway, the occ, they regulate a lot of things, including I believe the FDIC or they're involved in the.

[B]

FDIC. They were the people that back in the operation 2.2.0 days would send messages to banks saying that they what you're doing is risky. What you're doing is risky. And like raising eyebrows between the lines if they have to send you a letter saying what you're doing is risky, that basically says stop doing it or we're going to yoink your.

[A]

License. That's right. They were one of the implementers of Operation Choke Point, which is debanking a bunch of crypto companies and crypto investors. They signed in 2023 a joint crypto statement, a joint statement with the Fed and the FDIC explicitly warning of the risks of crypto and public blockchains and all of these.

[B]

Things. We say, banks don't do this now. They're using it as collateral for.

[A]

Loans. Right, okay. And not only that, this week from the new comptroller of the occ. So the guy in charge of all of this, they came out with a report that was basically finger wagging David. So they said the OCC called out America's top banks for unlawful debanking behavior. And they said that these banks targeted industries, among them the cryptocurrency industry, and they shouldn't have gone and debanked everybody. And they wrote an entire report about it, which is hilarious to me because the OCC was one of the groups telling them to go debank crypto customers. Anyway, part of the reason this is being unwound is because of an executive order. Donald Trump. This is an executive order from August guaranteeing fair banking for all Americans, where he specifically asked the executive branch and the OCC to go investigate this. And so they did, and they came back saying the bank shouldn't have debanked.

[B]

Anybody. Yeah, why did you guys do that? You guys don't have to do that.

[A]

Anymore. Anyway, this is the theme of the cycle. All of the winter winters.

[B]

Thawing. The evil witch is.

[A]

Dead. That's right. That's.

[B]

Right. The snow witch is dead. Yeah. Shenanigans like this just kind of makes me think like China's gonna Kick our ass.

[A]

Dude. I don't think so. I think their dairy genslers are like 100 times worse and they actually have guns and can't get voted out of office. So I don't think they'll ever be embracing a free and open.

[B]

Internet. My point is like at least they're not flip flopping on themselves every four years. Yeah, no.

[A]

They. Yes, that's true. They are very Gensler reigns for a thousand years there, I.

[B]

Guess.

[A]

Yeah. How about the Clarity act though, David? This is actual hard coded legislation we need in order to get some clarity on crypto. People have called this the market structure bill. What's happening.

[B]

There? Okay, so maybe just a level set about the Clarity Act. The Clarity act is uniquely a bullish Ethereum and tokenization. Why Ethereum is because it really is like effectively the legalization of anything Wall street might ever want to do with a smart contract. Is that a fair, fair.

[A]

Assessment? I think so. It's. Yeah, it's definitely tokenization.

[B]

Right. Tokenization is the big one. So if we want tokenization to grow, we need Clarity act to pass. And so I think specifically as an Ethereum believer and supporter and holder, I'm watching Clarity act very closely, hoping that it does pass. There's no guarantee that it passes. I think it could be like.

[A]

50. 50 seemed kind of stalled out. It seems kind of stalled recording. Right. This is a senator calling the crypto bill talks decently frustrate. Frustrating. It seems like it's kind of stalled in the Senate and unlikely anything's going to happen over the holidays. And I don't know, 50. 50 sounds about right to me.

[B]

Too. Yeah, yeah, yeah. Key jurisdictional and policy issues remain unsolved, according to Senator Moreno. He is signaling that he would rather let the process slip than accept a compromise he views as structurally bad for the industry or for Republican.

[A]

Priorities. Democrats are flagging corruption stuff with Trump and they don't want Trump to get a win.

[B]

There. Yeah, they want, they want the President to be barred from doing any sort of crypto stuff like issuing tokens or crypto.

[A]

Businesses. That would be fine with me, but Trump's never going to sign.

[B]

That. Give it, give that to.

[A]

Them. He's never going to sign.

[B]

It. Oh, God damn.

[A]

It. I know, but come on, he's.

[B]

Like, he's already started like four or five businesses. He gets to keep them. He just can't start.

[A]

Anymore. Yeah, yeah. Tell that to Trump. I don't.

[B]

Know. I.

[A]

Will. Lastly, let's talk about the New York Times. So they had an Education article around stablecoins and this was from their article. You could see on the left we've got bank deposits being compared against a stablecoin wallet. They say in a bank deposit, your deposit is insured up to 250k by the federal government. But with a stablecoin wallet, your money is not insured by the federal government. Number two, the bank lends out your deposit for mortgages, business loans and other types of borrowing. Whereas with stablecoin wallets, the coin issuer invests the money in financial markets, often buying bonds. The bank shares a portion of the proceeds with your interest, whereas with stablecoins in most cases, the coin issuer keeps all the.

[B]

Proceeds. That one is completely inverted. That one is the most.

[A]

Wrong. It was basically the whole thing was kind of like a fud about stablecoins and there's a whole list of things like first of all, the idea that your money is not insured by the federal government. It's T bills.

[B]

Bro. It is the federal government. And not only that, the bank. Your FTIC insurance for $250,000. The only reason that exists is because the banks are fractional reserves, whereas your stablecoin is.

[A]

Not. That's right. That's.

[B]

Right. It doesn't need insurance that gets a better.

[A]

Product. How about this? In most cases, the coin issuer keeps all the proceeds, whereas the bank shares a portion of your proceeds with you with.

[B]

Interest. Does.

[A]

It? 0.15% in my wealth gives me 4% and that's low. This is a really bad article. But this is, it's a terrible article. Let's you know, it's just seems like a hit piece. I mean a poorly researched hit.

[B]

Piece. So of course it does come out of the New York Times. So at least that's the appropriate.

[A]

Venue. Yeah, we're still dealing with that in mainstream.

[B]

Media. Coming up last, we gotta sneak some prediction market news in here. Gemini, the Winklevi Twins exchange is now offering can offer a prediction market in the United States. And also Gemini, which is a publicly traded company, we actually, I don't think we covered that. IPO stock surged 14% on the news. So kind of just an indication of how hot prediction markets are. So Gemini's affiliate, Gemini Titan received a CFTC license allowing it to launch fully regulated prediction markets for US customers. This is the same registration category that the CME has for derivative contracts. And so Gemini can list and clear standardized event contracts on Gemini. So pretty cool. That's our second. So Gemini will join Kalshi as a CFTC Regulated prediction market operator inside the United States. So just growth. Growth in.

[A]

That. Their own thing, too. It's not. They're not integrating polymarket or Kalshi. It's Gemini's own prediction market that they're growing from. Huh.

[B]

Yeah. So pretty cool. Congrats to the Winkleby twins. Ryan, I've got a meme for.

[A]

You. I've seen your meme. I saw this around. I can't believe you got so much clout for this meme, David. It's incredible, actually. So what your tweet is up to. How many. How many, like.

[B]

Viewers? 32,000 likes or.

[A]

Something. Is that your most successful tweet.

[B]

Ever? By far. I mean, it would have been better if I had actually gone to. This isn't in Times Square. It's, like, right next to Times Square. And actually taking a selfie with it. That would have probably gotten even more likes.

[A]

But. I'm.

[B]

Joking. I didn't have a.

[A]

Problem. This is not real. This is not.

[B]

Real. My most successful tweet of all time quoted this tweet saying.

[A]

Real. Your most successful tweet of all time quoted this tweet of AI generated. Not.

[B]

Real. I don't know what you're talking.

[A]

About. From the real.

[B]

Meme. This is a real.

[A]

Ad. Okay, what. What are we looking at.

[B]

Here? This is a real ad on a big LCD out of Times Square. This might be, like, right next to the NASDAQ or something. And it's a pen. This is a Ryan Sean Adams OG Meme. You know, you know how you go to the bank and you have to, like, write down your little, like, request to withdrawal or something? And then you have little pen, and it's on the little ball chain thing because they don't want you to steal the.

[A]

Pen.

[B]

Yeah. And so the. The line. There's a picture of the pen with. This is how much the banks trust you. Go bankless instead of. We got so much traction on this very real ad. 1.8 million views. And that's just the bankless one. Mine also had, like, 1.2 or 1.3.

[A]

Million. Listeners can decide. It's. I think it's great, though. Yeah. Go bankless instead. Fantastic. Why don't we leave it there? Risk and disclaimers. None of this has been financial advice. That ad was not real. Okay? Just so you know, crypto is risky. You could lose what you put in. But we are headed west. It's the frontier. It's not for everyone. But we're glad you're with us in the bankless journey. Thanks a lot.

[B]

Lot. I need blow my.