ROLLUP: The ETH Issuance War | $130M Coldcard Exploit | Saylor Sells Again | Uniswap Launchpad

Summary

Bankless Weekly Rollup: The ETH Issuance War | $130M Coldcard Exploit | Saylor Sells Again | Uniswap Launchpad

Date: August 7, 2026
Hosts: Ryan Sean Adams & David Hoffman

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Episode Overview

This episode of the Bankless Weekly Rollup delivers an in-depth exploration of some of the most pressing and controversial developments in crypto finance for the first week of August 2026. Ryan and David cover the ongoing "ETH Issuance War" and the proposal to alter Ethereum’s staking incentives, the headline-grabbing $130 million Coldcard Bitcoin exploit, Michael Saylor’s latest Bitcoin sales, and Uniswap’s launchpad expansion. The conversation weaves together market action, technical debates, and the emotional pulse of the crypto ecosystem, with candid debates and community reactions.

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Major Topics & Insights

1. Stock Market Chaos & AI Trade (00:22–14:51)

Key Points:

• Market Recovery: Despite “blood on the streets” last week, S&P 500 hits an all-time high in the first week of August. NASDAQ lags a bit but shows a strong V-shaped recovery.
• Liquidation Events: Discussion of a major liquidation (400% leverage!) of a top-performing fund manager, reportedly during his wedding—fund drops from a $30 billion peak to $8–10 billion but remains up 80% on the year.
• AI Trade Dominance: The persistent dominance of AI stocks and the question of whether crypto can reclaim the narrative.
• Crypto Market Dynamics: Bitcoin bouncing at the 200-week moving average ($62K–64K) and the psychological ties between crypto and NASDAQ.

Notable Quotes:

• "Apparently you can have an all time high in the stock market at any time, no matter what happened the day or a week prior." — Ryan (01:39)
• "He was reportedly on 400% leverage, which, yeah, like, you get liquidated at that number." — David (05:05)
• "I think the rest of the market... they're still disproportionately in AI...I don't think we get that full recovery until that happens, until the AI trade might have to die in order for crypto to live." — Ryan (12:26)

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2. Michael Saylor Sells Bitcoin... Again (06:50–10:46)

Key Points:

• Another MicroStrategy Sell: Saylor sells 1,638 BTC ($105M) and, in a change from previous events, the market shrugs it off—Bitcoin price goes up.
• Diminishing Keyman Risk: Saylor’s influence on market movements is waning, removing a “key man risk” from Bitcoin’s price dynamics.
• Leverage Unwind Context: Ongoing, orderly unwinding of MicroStrategy’s leveraged BTC positions.

Notable Quotes:

• "Saylor, the number one holder of bitcoin, selling over a thousand and a half bitcoin and bitcoin goes up. The bull case for me is that Michael Saylor needs to be removed from the market as a key man risk to bitcoin price." — David (07:39)
• "He's no longer the main character of bitcoin price action, which is probably healthy." — Ryan (08:14)

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3. The ETH Issuance War: Tapered Issuance Burn Proposal (15:31–39:41)

Summary of the Debate:

Background:

• Proposal by EF Researchers: A group of Ethereum Foundation researchers proposed the “tapered issuance burn” (ETH/stake targeting). If adopted, ETH staking yields would sharply drop above 50% of ETH staked—aiming to cap staking and preserve ETH's 'moneyness.'

Arguments For:

• Overpaying for Security: Ethereum regularly reduces issuance for economic efficiency (citing past reductions pre-merge).
• Preservation of Vanilla ETH: Prevents the evaporation of "vanilla" ETH in favor of LSTs (liquid staking tokens) as the main unit of account.
• Technical Simplicity: Credible, simple change—just a few constants; no tweaks to MEV, EIP-1559, etc.
• "If we like minimum viable issuance, this is that."

Arguments Against:

• Accelerates Centralization: Lower yields disproportionately hurt solo/home stakers, favoring large, industrial stakers (e.g., Lido, Figment).
• Undermines DeFi: Staking yield is DeFi's "base rate." Lowering it undercuts the viability and economic richness of DeFi protocols.
• Credibility Risk: Changing monetary policy, even for the “better,” creates uncertainty, aligning with Bitcoiners’ critique of Ethereum’s flexibility.
• Hurried Process: Only 48-hour comment window; perceived ivory-tower push from EF researchers, not community-driven.
• "Why Fix What's Not Broken?": Ethereum's issuance is already ultra-low.

Community & Builder Reactions:

• Near-unanimous opposition from Dapp/DeFi founders: Stani (AAVE), Mike (EtherFi), Lido, and community voices (DCInvestor).
• Credibility of ETH's “moneyness” central to both sides, but routes diverge.

Notable Quotes:

• "Ethereum should not focus on gaming, staking, issuance and cutting staking rewards. ...Yield becomes unpredictable, a negative factor for any institutional buyer, making ETH borrowing strategies mostly unviable." — Stani, AAVE (32:27)
• "Every builder on Ethereum opposes this. ...This reinforces the Ethereum critics position that the network is run by a small group of insiders." — Mike, EtherFi (32:27)
• "I can't, I mean I can't in good faith vote yay for this proposal when every single defi builder is saying no... If they're not happy, then like it's, it's hard to in good conscience vote yes for this." — David (34:23)
• "Anytime you open the window to changing the dials on monetary and issuance, you kind of reset the clock... you sully the experiment at all." — Ryan (28:44)

Final Sentiment:

• Overwhelming community resistance; hosts agree the proposal won’t pass ("probability quickly approaching zero percent." — 37:34) and view the process as a healthy sign of decentralization.

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4. $130M Coldcard Bitcoin Exploit: When “Doing Everything Right” Isn’t Enough (39:41–49:47)

What Happened:

• Coldcard Hardware Wallets Compromised: $130 million in BTC stolen from cold storage wallets due to weak random number generation in seed phrase creation—a flaw in randomness allowed AI brute-force attacks.
• Victims Did Everything “By the Book”: Hardware wallets kept offline, seed phrases never exposed; still, funds were drained.

Larger Implications:

• Limits of Self-Custody: Even diligent self-custody is vulnerable to manufacturer-level errors; risk that people may abandon self-custody for exchanges/ETFs.
• AI’s Role in Attacks: AI accelerating attack vectors, both on hardware/software flaws and social engineering.
• No Known Similar Issues in Trezor/Ledger: The flaw is specific to certain Coldcard versions.

Notable Quotes:

• "I did everything right. I never shared my seed phrase. My devices never touched the Internet. Everything was kept in multiple safes and safety deposit boxes. None of it mattered. Oof." — Jonathan Goodman (41:14)
• "Yeah dude, it's like the darkest days for self custody ever. ...AI has been just like the big... there's seemingly more holes to find using AI maliciously than it is easier to like patch them." — David (47:00)
• "I think maybe we talked about it earlier in the episode. People won't love crypto again... until they start hating AI. So that probably needs to play itself out too." — Ryan (65:54)

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5. Uniswap Launches Its Own Token Launchpad (52:00–56:24)

Key Points:

• Pools.Trade & Meme Coin Mania: Uniswap introduces 'Pools Trade,' a native launchpad for meme coins and tokens, with features to minimize botting/sybil attacks and more integrated fee mechanics.
• Uniswap’s Dominance: Uni V3/V2/V4 together now account for 99% of DEX volume on Robinhood Chain, mainly due to meme coins.
• Fee Burns & UNI Token: Protocol buybacks and burns accelerating, creating new life for UNI token.

Notable Quotes:

• "Uniswap is Doing pump fun now." — Ryan (52:17)
• "Dominating... on Robinhood chain. That actually does go into the Uni token fee burn. ...Robinhood chain and Uniswap have kind of seen some new life and I think this. Can they keep this motion going?" — David (55:30)

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6. Regulatory, Infrastructure, and Market Odds

Clarity Act Stalls (56:24–58:06)

• Probability of US regulatory clarity now at 15% (down from 41% two weeks ago); likely nothing before elections. Positive long-term for BlackRock-scale incumbents, but a hit for emerging startups.

Cloudflare & Near AI Launches (58:14–60:17)

• Cloudflare Wallets: Launched to facilitate content monetization (esp. for bots) and payments via stablecoins.
• Near AI Staking: Stake NEAR, receive confidential AI inference, potentially kickstarting a work/utility token resurgence.

Polymarket Raises at $20B+ Valuation (60:25–62:21)

• Reflects prediction markets’ growing mainstream viability; still dwarfed by traditional exchanges.

General Ecosystem Sentiment & Market Boredom (63:02–66:09)

• Meme coins dominate, DeFi/real-world asset tokenization slow but steady. Waiting game for "rubber to meet the road" as regulatory and technical hurdles remain.

Notable Quotes:

• "It just feels like a little bit like a waiting game right now. And then in the midst of that waiting game, people are getting hacked." — David (65:54)

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Timestamps for Key Segments

• Stock Market & Liquidations: 00:22–14:51
• Saylor Sells BTC & Market Context: 06:50–10:46
• ETH Issuance War: 15:31–39:41
• Coldcard Bitcoin Exploit: 39:41–49:47
• Uniswap Launchpad & Meme coins: 52:00–56:24
• Clarity, Cloudflare, Near, Polymarket: 56:24–62:21
• General Sentiment & Wrap Up: 63:02–66:09

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Memorable Moments & Community Tone

• The episode is charged with debate and skepticism, especially concerning the ETH issuance proposal—hosts advocate strongly for overwhelming community consensus on monetary policy.
• The emotional fallout from “doing everything right” and still losing funds to the Coldcard exploit highlights mounting security challenges in a post-AI-acceleration world.
• There’s an undercurrent of impatience but cautious hope—crypto feels in a holding pattern, with meme coin insanity on the surface but foundational progress (tokenized assets, infra) slow but ongoing.

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Final Sentiments

• On ETH: The "war" over issuance policy is a sign of a maturing, decentralized ecosystem—debate is healthy, consensus essential.
• On Security: Self-custody’s risk profile is evolving with AI in the wild. Even best practices aren't a guarantee.
• On the Broader Crypto Market: We're in a waiting game—momentum will return once "AI trade" dies down and new real-world use cases and infra take hold.

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For the full texture and the passionate discussions, listen to the original episode. But as Ryan wryly observed: "People won't love crypto again... until they start hating AI."

Transcript

[Ryan Sean Adams]

Foreign.

[David Hoffman]

Nation. It's the first week of August and it's time for the bankless weekly roll up. We got some topics of the week coming your way. The ETH issuance war. We got another debate about an EIP in ethereum lands. This one's, this one's different in the sense that it talks about ether as money. So everyone has an opinion on it, including me and Ryan, maybe.

[Ryan Sean Adams]

David. Yeah. I want to find out your opinion because we haven't discussed this yet, but. I know, I think it was like three weeks ago when we heard rumor that this was on the horizon. You said to me you were excited for the drama, so, my friend. Did I. You got some drama, all right. You got some, some discussion about this and I want to get your take.

[David Hoffman]

Yeah, it's basically the ETH researchers versus the app layer, which usually you don't get such a clean line dividing this drama, but that's what we got. So we're going to talk about that. We're also going to talk about the cold card exploit. So over $100 million of bitcoin drained from what was thought to be very safe and secure bitcoin cold storage. Everyone, the, the, the common line was that everyone did everything right and yet the bitcoin got yanked. We're going to talk about how that happened and what is happening as a result of that over in bitcoin land. Talking about the stock market S and P and Dow Jones and the, the indices hitting all, all time highs when there was blood on the streets last week. Dude, wild. Yeah, wild. What? Apparently you can have an all time high in the stock market at any time, no matter what happened the day

[Ryan Sean Adams]

or a week prior by the dip week. Also, we got to talk about Sailor. He sold some bitcoin again and he explained himself this time. He said, I speak as one saver to another. What was he talking about? We'll discuss that as well. Let's start actually, David, with the stock market all time high. This is the S and P. So it's not the Nasdaq S and P. What had been off in July, like 5, 6%. I know NASDAQ was down about 10%, something like this. And we got what looks to be in the first week of August, a V shaped recovery out of that hole. And Now S&Ps all time high, not NASDAQ has not quite hit it. But like, can you explain that? What happened?

[David Hoffman]

I don't know, man. Like, look, I'm sharing my screen. You can see the candle. The candle's Big like we had that gargantuan rise out of the bottom of the Iran war with three massive candles that brought up the S and P up 11% across like 20 days. The candle looks like that it is a, the weekly candle in the S and p is a 3% candle that brought it from 7,500 all the way up to the tippy top on almost 7800. We're down a little bit at the time of recording, but just like a gargantuan like recovery out from like where the S and p was down 3.5% off of its, off of its highs. And then it rocketed up 6 or 7% in a very short amount of time. And this was all on the backs of Leopold from situational awareness getting liquidated right at the bottom. So he must have been the absolute pico bottom because he had a pretty decent fund that had had a lot of the assets that had just made incredible gains. And for seller at the bottom and then, and then I think, I think maybe that gave the conf the market the confidence it needed to just hit the hit the buy button because the game's not over and Citadel was stepping in like I, I, that's my read.

[Ryan Sean Adams]

It does seem like confirmation that at least the market thinks the game is not over for AI and the AI trade continues. I mean this is even more stark if you look at nasdaq. Right. Right. Kind of that V shaped recovery. It almost looks like Ashenbrenner got margin called, he got carried out, he got liquidated here. And then once his positions were liquidated, the market recovered and so it was like almost looked like it was targeted to take him out. And then like the market spins back on the other side of things. Now last week we weren't sure if he was like out out. You know, Thero's capital style hedge fund is kind of like deleted. They are underwater. Apparently this was still a flesh wound. Maybe it took a pretty large chunk out of his fund. So he is down 67% in July, but David still up big on the year. Okay. This fund was outperforming, doing incredible work earlier this year. It's been a absolute superstar fund. Had a rough month but did not completely collapse under the weight of this liquidation. The the fund went from 20 to 30 billion peak to about 8 to 10 billion remaining. Most of that in privates. A lot of the public positions were sold off and liquidated as a result of this. So he's still around, he's still fighting and it looks like the market has just recovered from this large liquidation.

[David Hoffman]

He was reportedly on 400% leverage, which, yeah, like, you get liquidated at that number.

[Ryan Sean Adams]

Didn't you tell me he was at his wedding when this happened? When he.

[David Hoffman]

That. So that he was. I think. I think it was the day. So there's a Vanity Fair article, there's a bunch of articles titled how to Lose Billions and Gain a Wife in Two Days. Whether or not he was like in his tuxedo, like, you know, like, ready to walk up to the altar. I don't know the timing of that, but, like, it was inside of that window of opportunity where he was getting liquidated and had to get on the phone with Citadel's Ken Griffin to bail him out. Not bail him out, but just like, buy his bags. But, yes, story for the grandkids. Sorry, not. Not the best codedness of that memory, I think, for his future. But, like, whatever. But yeah, ultimately his fund is still up 80% on the year, so it's still one of the best performing funds in a while.

[Ryan Sean Adams]

But yeah, you'd have to be assets

[David Hoffman]

in crypto assets as an lp, you would have to at least be like, at best, mixed feelings because you were previously up like 5x6x on your money and now you're up 80%. And so you're still doing very well. But yeah, you were doing really well a second ago.

[Ryan Sean Adams]

Yeah, but it's. It's also just sort of the risk management wasn't there.

[David Hoffman]

Right.

[Ryan Sean Adams]

I mean, this is quite a cascading collapse. So, I mean, LPs got to be a little shaken, little rattled. But the FOMO is back in. The AI trade continues. How about our friend Michael Saylor over at Strategy? He sold some bitcoin on the week. What was that about?

[David Hoffman]

Yeah, so we have like, I think three main instances of Saylor selling bitcoin. The first one where he sold 32 bitcoin, collapsed for the bitcoin price by like $18,000. The next sell of bitcoin, I can't remember the numbers, but it was much more than 32. It was like in the hundreds, maybe a couple hundred. Bitcoin.

[Ryan Sean Adams]

Yeah, that's.

[David Hoffman]

And bitcoin was like flat or like even marginally up on the week. This week, Micro Strategy Strategy announced that it sold 1,638 bitcoin worth 105 million. And bitcoin jumps from 62,000 to 63 and a half thousand dollars. So bitcoin up on the week. Ryan, I'm bullish about this news. I'm bullish about this news.

[Ryan Sean Adams]

Wait, why

[David Hoffman]

Michael Saylor, the number one holder of bitcoin, selling over a thousand and a half bitcoin and bitcoin goes up. The bull case for me is that Michael Saylor needs to be removed from the market as a key man risk to bitcoin price. And when he is selling $105 million of Bitcoin and the bitcoin market doesn't care and actually goes up like, oh, you like the market no longer cares about you. You're free to like move to the background as like the main marginal pricer of bitcoin.

[Ryan Sean Adams]

Yeah, I think that's true. He's, he's no longer the main character of bitcoin price action, which is probably healthy because the market, I think when he sold the 32 bitcoin priced, all of these future sales in basically and, and now right now the market outlook on what strategy is going to do is it's going to be a graceful unwind process of some of this leverage. It's not going to be chaos, it's not going to be cascades. We know what Saylor's going to do. If there's an M nav premium, he'll mint some more MSTR shares. MSTR holders might feel differently about this. They might not feel great about what's happening, but you know he's going to sell bitcoin in order to pay preferred share owners. I noticed SDRC is back up above 90, is back to 93.

[David Hoffman]

SDRC looks good.

[Ryan Sean Adams]

So much, much healthier. It's up 30% from the June lows, which at 71, that was like a good buy back then. Right now Str. Yeah, I'm STRC right now. Bitcoin is kind of in an interesting place. Like what are we at the time of recording? 60, 64K, something like that.

[David Hoffman]

64 and a half thousand dollars. We are, we have been the 200 week moving average since the middle of June basically. So like six weeks we have been riding the 200 week moving average from $62,000 to where it is right now at like $64,000.

[Ryan Sean Adams]

So the 200 week is about $64,000 and we're just riding that. And we have been under that, what like 40 days, like a few times briefly during this bear market, haven't we?

[David Hoffman]

But like not a long time, 40 days? No, I would say under a week. We have been under the 200 week

[Ryan Sean Adams]

that's lately

[David Hoffman]

historically like we were under the 200 week moving average for like. Yeah, I think 40 to maybe a little bit longer. But that was again post 3 hours capital Luna FTX contagion which come on, you don't see any blood on the streets like that.

[Ryan Sean Adams]

Well, it's interesting. So bitcoin has been highly correlated to nasdaq. So part of the reason bitcoin is up on the week is because NASDAQ is also up and the correlation, I

[David Hoffman]

don't know if that's true. I don't know if that's true.

[Ryan Sean Adams]

It's the correlation has like not been higher in recent, like recent terms. But the question, the question, if you

[David Hoffman]

look at the NASDAQ chart and the bitcoin chart, those are just different looking charts.

[Ryan Sean Adams]

I mean they, yeah, I, I guess like in, in recent times over the last 30 days. But I, I guess I think the question is has bitcoin bottomed relative?

[David Hoffman]

It's always the question. It's always the question.

[Ryan Sean Adams]

So like are like how are you feeling about it personally? Are you prepared to sell your AI stocks? Are you like fading this recovery market recovery and like buying crypto assets or are you still like okay, AI trade back on? I guess we're in for like I don't know, round three, round four, whatever round this is in terms of AI trade recovery here. What, what's your, what's your outlook right now?

[David Hoffman]

Yeah, yeah, I, I, I've been asking and talking about this question a lot in the last week or so and I think we've been talking and asking about this question a lot on the weekly rollup as a vibe, the most non technical like pseudo answer possible. If you just look at this chart, which is the bitcoin chart with weekly candles that goes all the way back to 2020. You see the cycles, right. You see the 2020 cycle, you see the 2022 to 2023 and a half bear market. And then you see the current cycle where bitcoin went up to 130. This the tail end of the current cycle coming down from 130,000. It just doesn't look done yet. The chart doesn't look like it's done completing its cycle. So as a vibe like you can see it going down a little bit more. Yeah. And then, and then having a big U shaped bear market for like a year and a half.

[Ryan Sean Adams]

Sure.

[David Hoffman]

So as, as just speaking as to the visual aesthetics of the chart, it doesn't look done yet. Which is a not a good answer. But it kind of correlates with like the whole the cycles are intact and if we believe the cycles intact, the visual shape of the chart looks 85% complete, but not a hundred percent.

[Ryan Sean Adams]

I'll give you another vibe that I feel which is kind of sort of similar to this, which is we don't fully bottom until the AI trade is over and the market acknowledges that. Because I think what's happening even as I'm looking at you, you're not prepared to sell your AI tech stocks and your QQQ and whatever else you have in your tradfi portfolio and buy crypto right now because you don't quite think it's over yet. And that's what I think the rest of the market also sees. They're still disproportionately in AI, they're still in NASDAQ and they haven't yet come back to crypto. And I don't think we get that full recovery until that happens until the AI like the AI trade might have to die in order for crypto to live. I think that's from a vibe perspective how this could all play out.

[David Hoffman]

I, I'm, I've been thinking about that more and more and more. You. I was listening to your episode with Michael Nadeau this last week and the word time based capitulation came up a bunch.

[Ryan Sean Adams]

Yeah.

[David Hoffman]

Where like I don't have, I don't have any reasons for why there's any more forced sellers or sellers at all in bitcoin. Like who like Sailor is selling a thousand and a half bitcoin and the price is going up. Like no one is a for seller. There's not there that much leverage in the system. Plenty of leverage and perps in the down market coins, but whatever. So like who's going to be the 4 seller? The answer is like no one. But there could be opportunity cost sellers where the QQQ and like micron and like SK Hynix is just doubles in price and you're like what am I doing with stupid fucking bitcoin? Yeah, that $60,000 I'm. And I want to get into the AI trade so I'm selling so I can buy the top of the AI trade and like you can kind of see, you can kind of see that. And that that could take the rest of. When I, when I just said the aesthetic completion of the AI of the, of the bitcoin cycle could needs six more months and you could see the AI trade running for six more months, nine more months and then the time based capitulation of bitcoin holders being like fuck these stupid bitcoins. Let me buy, let me buy some more memory stocks. Even though memory stocks have gone up 5,000%, I kind of think you can see that happening.

[Ryan Sean Adams]

I could see it too. I could see it too, that that might be what is playing out right now and what has to play out before we see the bottom and before we see the bear market conclude. David, we got more to discuss. I want to talk to you about the eth issuance war. What is going on? What is the proposal that rocked the Ethereum world this week? Also, the cold card exploit victims did everything right. What happened? Could this happen to other self custodial holders? You said it seemed like no one did anything wrong, but somebody did. Okay, there was, there was a problem in this. We'll unpack what that is, all this and more. But before we do, we want to thank the sponsors that made this possible.

[David Hoffman]

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[Ryan Sean Adams]

Can I stop you? So there's no cap, but there is a curve to issuance, right? Issuance does go down. The more stakers that. That come into the.

[David Hoffman]

That's not. That's not true. Always. Issuance always goes up. The more eth gets staked, the rate of new issuance goes down.

[Ryan Sean Adams]

Yeah, but proportionate. Like a smaller proportionate amount. The rate of new issuance. Right, that's the way to say it.

[David Hoffman]

Yes, yes. So right now we have a third of all ETH staked, but there's been a perpetual march upwards. And this proposal, like, proposes the idea that we don't want that number to approach 100%. We don't want 100% of ETH staked, but there's nothing to stop that from happening because there's always an incentive to stake more because more ETH will be minted to pay for the security of the ETH being staked. And so what this proposal does is that Ethereum starts destroying, burning a slice of the rewards before stakers receive them. The more of the supply the stake that staked, the bigger the slice that is burned. So this is called ETH targeting. This previously was called ETH targeting or excuse me, stake targeting. So once staking ETH staking hits about half, 50% of all eth and we're about 33% of all eth right now, the entire reward gets burned, meaning staking pays essentially nothing beyond 50% stake and the incentive to stake more ETH basically shuts off. And so this caps the incentive for staking eth beyond 50%. So at like 45%, the staking rewards is almost nothing. You only have like 5% of these otherwise issued staking rewards being paid to stakers and then at 50% is zero. So for people taking today, if this proposal were to go through, the practical effect would be that their base staking yield drops roughly in half from about 2.6% yield to 1.2% yield. If this change were to go in right now. Who is pushing this and who is against this? The EF and EF researchers like this proposal. One of the.

[Ryan Sean Adams]

Is that generally true or is it just the. The subset of EF and research types who have their names on this proposal? By the way, Justin Drake is one of them. So I don't think he said anything public in support about this, but he is named on the proposal.

[David Hoffman]

So that's. He's on the authoring the proposal.

[Ryan Sean Adams]

Yeah, but you're not saying it's like all of the ETH researchers and all of the ef.

[David Hoffman]

Yeah, definitely. I mean, there's no consensus inside of the ef. Yes, you're right. So the people who are who have proposed this are all EF researchers and like the researcher type. The people who are against this are Interestingly all the Dapp layer people. So DeFi founders like Stani from AAVE, Mike Silagazi from Ether Fi Lido is against this. DC investor as a community member, he is very anti this. And so it's basically EF a handful of EF researchers and then basically everybody else.

[Ryan Sean Adams]

Sounds like a great proposal.

[David Hoffman]

Let me try and just like run through the arguments for both sides, because

[Ryan Sean Adams]

here's the thing, here's the thing. As you're running through that I think I really want to understand. Right. Because the proposal takes as a given that there is some problem right now and some problem with this. And it takes a given that we are on this march towards 100% and the closer we get to 100%, the more problems that we'll see. I think that assumption really needs to be reinforced. Yeah. So what do the authors say about the problem here?

[David Hoffman]

Yeah, so, so the, the, the pro case, the pro argument for tapering slash targeting is that Ethereum is overpaying for security. And as a broad strokes, Ethereum, it's been discussed that Ethereum is overpaying for security. So therefore we should reduce issuance. That has happened many times. When we were in the proof of work phase, eth issuance went from 5 ether a block down to 3 ether a block down to 2 ether block before we had the merge. And so there's a little bit of precedent of hey, we're overpaying for security, let's pay less for security. And that's just a matter of like economic efficiency and making ether. It goes along the social contract of minimum viable issuance. Like if we like minimum viable issuance, this is that. So that's one pro argument. The next pro argument is that unbounded staking, so a, a capless, a constraint list amount of incentive to stake ETH erodes vanilla ETH's moneyness and centralizes the network on LSTs. And so with 100% ETH staked you're going to see like Lido's stake to eth or like rocket pool reath. Those will be ether in the Ethereum economy because vanilla eth will all be staked. So you'll actually see a disappearance of vanilla eth and it will be replaced by liquid staking derivative tokens. And so as far as the Ethereum economy is concerned, basically it's going to be Lido's staked ETH or rocket pool's reath, some sort of LST rather than vanilla eth. And so that essentially that captures a network by these liquid staking tokens and vanilla ETH kind of disappears.

[Ryan Sean Adams]

And also there's an argument there under that, that ETH would eth. Vanilla Eth would lose its moneyness relative to those other units. Right. It'd be almost like rather than in the US economy, rather than us using the dollar, we're using like Treasuries or something like that, or not even Treasuries, we're using like bank of America money

[David Hoffman]

markets in order to pay private money Market tokens, right? Yeah, exactly. Yeah. Huh. And yeah. And so like this also just kind of, if you are just trying to hold vanilla ether, it, this allows, if this proposal goes through, holding vanilla ether will be much more palatable and you won't get diluted nearly as much by holding vanilla ether. And so it's a, it's a pro eth is money change is, is an argument.

[Ryan Sean Adams]

Is.

[David Hoffman]

And then like is an argument. Yeah. And then lastly it's like, it's like a, a minimal change. It's really not that complicated. They call it credible. It's just a permanent single constant that leaves most things intact. Like MEV is not being changed, EIP 1559 is not being changed. And it's kind of being framed as like just completing the post merge monetary architecture.

[Ryan Sean Adams]

It's a minimal like technical change. It's just like a few variables in the code we have to change to make this happen. Like saying it's a minimal change from us. Like anytime you do anything to monetary like policy and issuance, this is, it ain't a minimal change. This is a pretty big social change. But they're saying it's minimal from a tech perspective, not complicated. There's not going to be a bug in the system. It's pretty easy to implement.

[David Hoffman]

Yep. Okay. The opposition argues that this actually just accelerates the centralization that it claims to fix. So compressing yield, reducing the amount of issuance for E stakers makes it more difficult for the marginal ETH staker. So solo stakers and home stakers are going to have a harder time because they are less efficient than the industrial commercial stakers like Lido or Figment.

[Ryan Sean Adams]

So well, you just cut their revenue in half. But they have the same fixed costs.

[David Hoffman]

Exactly. And so people who really like operationalize and minimize their fixed cost do better here. But you know, the hobbyist staker, the people that carry their own hardware pay for all the costs. Those people are getting pushed out and that's going to be the home staker, the solo validator, which as a social contract and as like a system, you know, Ethereum has always preserved the sovereignty and power of the individual solo staker that it's like that's who runs Ethereum. You know, Ethereum is not a product by corporations and institutions, it's a product by the user, for the user and this makes that harder. The next argument is that staking yield is Defi's base rate. So leveraged staking loops, LST collateral on aave, you know, structured product, institutional treasury allocations. All of that, all the fact that staking yield is a thing is a pretty core primitive that holds up a lot of defi. Tapering it towards zero, collapses so much of what defi is built on and just reduces a lot of the ether in defi. So if your vanilla ether isn't getting yield, well, you can get it in defi and taking the yield away from ether. I think the argument is that a lot of ether would not have a reason to be in defi and defi would just have less TVL and be overall less rich as like a sector. And then lastly credibility and process. This is just like the issuance debate. There's like a 48 hour comment period, an aggressive timeline from the researchers who are saying like, yo, let's, let's push this through. And then the community is like, you know, it's too, too fast. And then also just like issuance in Ethereum is all already extremely low. It's one of the lowest, if not the lowest chain with the lowest issuance. Why are we trying to lower it anymore? This is not a problem.

[Ryan Sean Adams]

It's as low as bitcoin after like 12 years, you know, Bitcoin doing this.

[David Hoffman]

So it's just, why are we trying to fix a problem that's not actually a problem? Why? Perfect is the enemy of good. We're pretty good here. Why are we trying to be perfect? And then also modelers of saying that this is just like we underestimate second order effects. If this changes go through, we don't really know the second order effects and that is dangerous and so let's just not touch it. So I feel like those are the two sides.

[Ryan Sean Adams]

There's another sub argument here that I've seen which I think is also good, which is like, hey, anytime you open the window to changing the dials on monetary and issuance, you kind of reset the clock and now everyone knows your store of value asset can actually be tweaked and changed. This is the ancient Bitcoin 21 million argument. And their core criticism of Ethereum is like you guys move the dials and so like anytime you move the dials, you prove that the dials can be moved and you prove that there's some sort of centralized cabal, you know, like doing this. And so like if you move the dial, you sully the experiment at all. Right? And the Ethereum position is now we'll move it a few times and, and

[David Hoffman]

we'll move it to being more restrictive and beneficial to eth holders.

[Ryan Sean Adams]

That's right, that's right.

[David Hoffman]

That's always in that direct direction. Not like, always in favor of less issuance, not more issuance. I'm not. I'm not into that argument. I think the version of that argument that I do agree with is, yo, Tom Lee just bought 5% of ETH and his whole entire idea is that he gets to stake it and get the yield, and we're just rugging that from him. What the. And so that, as a adulteration of the social contract, I think is very valid. And Tom Lee is gonna be like, what the fuck are you guys doing?

[Ryan Sean Adams]

What.

[David Hoffman]

What if this pisses off Tom Lee and he sells the ether? Not inherently because Tom Lee is like, I'm worried about you guys, like, tinkering with the monetary policy, but because I'm worried about you guys destroying the value of my investment.

[Ryan Sean Adams]

I actually think that you might be underrating that, or at least I rate that so, like, much higher.

[David Hoffman]

I think that the tinkering of the dials of monetary policy.

[Ryan Sean Adams]

Oh, yeah. I think there has to be absolute, overwhelming consensus. Like, it has to be like a. A bill going through Congress with 99 senators voting yes for any issuance change to happen. And especially when we're at this point

[David Hoffman]

of like, I agree with that, I agree with that.

[Ryan Sean Adams]

We already have, like, really good issuance. It's already fine. What problems are you solved? I guess I'm sort of revealing my hand of, like, where I sit on this debate a little too much. But I guess I really do believe the bitcoin argument of, like, you got to ossify that monetary policy, and the faster that Ethereum gets to complete ossification of it and that no one touches it because it's good enough, the better for the moneyness use case and the store value use case. What I think is interesting about both sides, and then we could talk about some of the takes that we've seen and what you think. And maybe what I think is both sides are speaking on behalf of the solo stakers, you know, of decentralization. This is about the solo stakers. Both sides are saying, hey, this is good for the moneyness of eth, right? So the side that's saying, hey, we gotta push this forward is saying, yeah, we're doing this because ETH is money. And the side that says, no, no, no, no, no, don't do this because you'll. You'll kill eth's ability to be money because you're. You're dialing with a monetary policy and you lose credibility that way. And also ETH is money in the defi economy. You nuke the defi economy somehow because of staking yields going down then you also lose money in is there right? So it is I guess if you zoom out refreshing that both sides really care about ETH as a monetary asset. To me that's a, that's a win I take from this episode. They're just divided in terms of how to actually do this. So what are some takes that you've seen that from around the community that you've enjoyed or some points that we really didn't highlight yet?

[David Hoffman]

Most of the takes on crypto Twitter, Ethereum Twitter have really just been from the anti camp because it's, it's their position to react to this proposal. So Stani says Ethereum should not focus on gaming, staking, issuance and cutting staking rewards. That is not the problem Ethereum needs solve. Priorities are privacy, scalability and security. Yield becomes unpredictable, a negative factor for any institutional buyer making ETH borrowing strategies mostly unviable. Ethereum should not be punished for its growth. DC investor says issuance is already very low. Staking yield is now a key driver. Predictability matters. Solo stakers should not be priced out. Focus on scaling Mike from Etherfi says disappointing on every level. EIP released with only 48 hours notice. Every builder on Ethereum opposes this. This reinforces the Ethereum critics position that the network network is run by a small group of insiders. I think that has been interesting to me is like if you build a ETH product and the eth deposit product like AAVE or Ether Fi, you don't like this. No one, no one who's building an Eth Defi product likes this. And I think that is very important signal and I think this is something that like the Ethereum community has been like trying to elevate in the 2024 like EF crisis of like please listen to the builders building on Ethereum and making Ethereum valuable and Ether valuable and that is Mike and Stani and Lido. And so like those people have, these people have skin in the game and the people with skin in the game are saying no. And the ETH researchers, you can argue, maybe they, they love the ivory tower, like technical perfection but they have less skin in the game than Donnie from AAVE or Mike from Etherfi because they're researchers. They don't have businesses built on this ecosystem on top of this foundation.

[Ryan Sean Adams]

So what's your take on this? You think it's a good idea? You think it's a bad idea? If it was up to David, would you vote yay or nay?

[David Hoffman]

I mean like you just exactly what I just said. Like I can't, I mean I can't in good faith vote yay for this proposal when every single defi builder is saying no, like that's defi is how east became monetized as a monetary asset. And if they're not happy, then like it's, it's hard to in good conscience vote yes for this. I like this proposal from a technical purity standpoint, like in, in a vacuum.

[Ryan Sean Adams]

Sure.

[David Hoffman]

I think this is a good proposal if we didn't have defi and Tom Lee and all of the path dependency that we have. But we do have that. So this would have been a great proposal to have introduced like years ago, six years ago, seven years ago, eight years ago, when like as soon as possible basically. Maybe, maybe one improvement to the proposal is that let's not have this jump from 100% eth targeting to 50% e targeting. Maybe we can implement it over a very long time, like a decade. So like at first it targets 100, then it targets 99%, then it targets 98% and that takes 10 years to approach 50%. So it smooths it out. But I don't think even defi would really like that at all. And so I also agree with your point is like it's, it's eth the monetary asset. We need overwhelming consensus in order to change this. All right, so you like the proposal. I like the proposal in a vacuum, but there's too much baggage to say yes.

[Ryan Sean Adams]

Yeah, I think that my position is I don't even like the proposal in a vacuum. Probably interesting. Like it's interesting as like a hypothetical and a white paper, like what if we did this? But I think you need overwhelmingly good reasons in order to actually change issuance. And I don't see those reasons. Like the benefit does not seem worth the cost as opposed to the merge. Okay, incredibly obvious full community buy in that we were going to take proof of work issuance to proof of stake issuance and change issuance policy accordingly. There was a technical reason for that. There was massive benefit, there was overwhelming consensus. This doesn't even have anywhere near the mark. Like the, the benefits are sort of ethereal and vague and second order and we don't like, know. But the other thing I, I go to is like just kind of an Occam test of just would this, if this got implemented, would this make me more bullish or more bearish on ETH and the Conclusion. There is more bearish. Like I would not be more bullish if this proposal was actually pushed out and implemented. And on that basis alone it's, it's kind of, it's not a good idea from my perspective now. Yeah, there's another question, which is what's the probability that this goes forward and actually gets pushed, gets moved through? And I think that probability is like quickly approaching zero percent. So I think we're like under five. Like we're just. I don't think this is going anywhere.

[David Hoffman]

I don't think this is going anywhere,

[Ryan Sean Adams]

particularly given the reception that it received. If it had a completely different reception, if there was overwhelming positive sentiment, then maybe it would have a shot. But it is dead in the water at this point. And I, I predict there will be no issuance changes. So at some level, some of the people saying, aha, look over Ethereum, it's just like it's changing issuance policy again. See, it's not decentralized, it's captured all these things. No, this is what decentralization actually looks like. This is the messy process of decentralization taking place. There's a proposal, it's pushed out there. The rough consensus of all of the stakeholders and participants and investors and researchers, nap builders weigh in on it and it hasn't reached the threshold and so it doesn't happen, it gets shot down and that's all healthy. So we just had a long conversation about it. But like, I don't think it's going anywhere. And you know, if, if this would make you bearish, you don't have to worry about that because I don't. It's just not going to happen.

[David Hoffman]

Yeah, I would agree. Yeah. Like I said, it's one thing to be frustrated about the EF for not being communicative to its app builders and its defi ecosystem. It's another thing to push a proposal where the defi builders are all saying, this harms my business.

[Ryan Sean Adams]

Yeah.

[David Hoffman]

And also my business is in the business of monetizing eth and making it more valuable. So wtf? Yeah.

[Ryan Sean Adams]

Are you going to host some debates on this though?

[David Hoffman]

I was thinking about hosting a debate, but instead I think I'm just going to talk to some of the defi app builders about their, their opinions. Because like we, I did, I did this episode actually with Casper and Ansgar forever ago. Like, this is not a new proposal. This is, this proposal is like two years old now. It, for some reason it's turning back

[Ryan Sean Adams]

around targeting proposal and particularly at a time where Some assumptions didn't play out. Remember, like, people were thinking that Lido would sort of dominate everything and, like, get all of the stake and like, I, I think some of the things that people assume just like, haven't played out fully. But yeah, we, we have covered this train before, haven't we?

[David Hoffman]

Yeah, yeah. And so, so I've already technically done the, the pro side of it, and so now I'm going to do the anti side of it. And like, I can embody the pro argument well enough where, like, I can throw my interesting, like, angles at them and they can see what I can see what they do with it. All right, let's move on to the cold card exploit. So this is an individual named Jonathan Goodman who tweeted out. $1.6 million in Bitcoin was drained from my account on July 29th in the cold card wallet hack. My bitcoin was in cold storage. My keys were on a cold card device kept in a safety deposit box that had never been connected to the Internet. This part's nerdy, but here's what happened. Hackers discovered a vulnerability in the part of the hardware wallet code used to create seed phrases. This allowed them to use AI to brute force guessing seed phrases. I was at our cottage and heard about the hack today. No way this affects me, I thought. I logged on to Wasabi, the software that lets me view my bitcoin wallets online. Right away I saw lines of red transactions, withdrawals, and I knew from 9:36 to 9:43pm on July 9, every wallet I ever had had been emptied. 18.2 Bitcoin gone over $1.6 million Canadian. Perhaps the hardest part about this is that I did everything right. I never shared my seed phrase with anyone. My devices never touched the Internet. Everything was kept in multiple safes and safety deposit boxes. None of it mattered. Oof.

[Ryan Sean Adams]

Absolutely brutal. Absolutely brutal. So the cold card, for those not familiar with it, is sort of like a ledger wallet or a Trezor. Some more popular devices I think, optimized really for the bitcoin community. So it was a smaller wallet in terms of footprint, but didn't support other coins. It was more the bitcoin purist approach to it. And of course, this same story played out in, I don't know, maybe thousands of other cases.

[David Hoffman]

$130 million total in Bitcoin being exploited from offline hardware wallets.

[Ryan Sean Adams]

And some of these, you know, are pretty like smaller holders. Of course, these are retail investors and they're doing the thing that bitcoiners are supposed to do, going bankless can do, which is like, not your keys, not your crypto. Okay, not. Not my keys, not my crypto. I will have custody of some keys. That's what they decide to do. And they use a hardware wallet, and still it gets drained.

[David Hoffman]

Maybe.

[Ryan Sean Adams]

Let's talk about what went wrong here specifically. So the original poster said something to do with the way randomness that the seed phrase was generated. What went wrong in the cold car? Yeah.

[David Hoffman]

So with it, with a, with a seed phrase. A seed phrase has theoretical randomness, as in, like, there are so many different possible combinations that even with AI, there's no way to, to try all of them. Because there's more possible ways to create a seed phrase or a private key than there are like atoms in the universe. Like, that's a theoretical security of Bitcoin.

[Ryan Sean Adams]

Right.

[David Hoffman]

Apparently, the way that Coldcard was generating seed phrases was imperfect in its randomness. As in it had like a, a kink or a flaw in its randomness generation that allowed for AI to like, detect that pattern and reduce the scope of how much randomness it would need to do. And this is actually just like once upon a time read a book on ciphers. You would actually like it. I should send it to you. And like, the number one way to break a cipher is that there is an imperfect, imprecise way of generating randomness and there's like a flaw and that gets exploited by some, some pattern analysis,

[Ryan Sean Adams]

like some kind of weak entropy. So whenever you're generating a private key of some form, you have to have actual true randomness.

[David Hoffman]

Perfect randomness.

[Ryan Sean Adams]

Yeah. There are many ways to do. It's not like an unknown thing. It was just apparently the cold car wallet, it had a, a random number generator that was like, much better, but it was not actually switched on, so it was using this much weaker form of randomness instead. And they switched on, did they? It wasn't in, I don't know, wasn't switched on. They were using the weaker method rather than the stronger that they actually had. And so that means everyone who used a cold card, cold card, wal, from this time period from like, you know, 2021 and beyond, actually generated private keys that could be guessed by some attacker, some sort of, that was not impervious to a brute force attack. And so that's what's happening right now. And there have been waves of these attacks, right, where, you know, hackers are just looking for cold card wallets, finding that profile and then guessing at the seed phrase, using AI to do that. And then once they do, they drain the wallet.

[David Hoffman]

Brutal.

[Ryan Sean Adams]

Is this.

[David Hoffman]

We don't really know who the hackers are. Like obviously I think everyone's first reaction is is North Korea. We don't really have any evidence that it's North Korea.

[Ryan Sean Adams]

It could be anyone at this point, especially after this gets publicized, then anyone who wants to go try to do this can like then go do this. I think we should tie this off with a few other things. One is this problem does not exist in the Trezor ledger wallets and the more popular wallets they have since, you know, released and emphasized how their randomness is actually generated. So it's not a flaw that happens in some of these other hardware wallets. So should be like safe if you're using one of those. I guess the other thing though is does this pose an existential question as to like self staking and self custody or sorry, not self staking, self custody in general. So if like you're still trusting the hardware wallet manufacturer with this type of thing to like generate private keys correctly and to do things correctly, like, I guess it's a wake up call that you can do everything right from a self custody perspective and still be vulnerable to this. Some people are saying this will cause everyone to move their Bitcoin to ETFs or to put it on exchanges where these sorts of attacks aren't possible. Do you think this is the end of self custody, David? Do you think it's just like too hard, there's too many problems with it and people choose not to do this moving forward and it'll all go in custodial providers.

[David Hoffman]

I was getting lunch with a friend this week and she told me that she was working at a company and somebody connected her with a contact that they wanted her to talk to. And they took a few meetings and built some trust, got them to download Obsidian, which is a thing that you use and I use. But it was a, it was a borked version of Obsidian. So after three meetings she downloaded it and it stole all of her money in her, in her browser extension.

[Ryan Sean Adams]

Are you serious?

[David Hoffman]

Yeah. And the reason why I bring this up is because they were using AI to fake themselves on the call and, and to. To run this exploit. And so like the common denominator here is AI. AI has been just like the big and. And that wasn't imperfect math, that was social engineering nonetheless, AI assisted and you know, AI is the reason why people are scared to have their money in defi at the moment. Like AI is shaking the foundations of Self custody and that, that's scary. And like there's probably the, the fewest self custody and the fewest bankless people since 2021, 2022 because of AI and it's, there's seemingly more holes to find using AI maliciously than it is easier to like patch them using AI to, to be defensive. And so like yeah dude, it's like the darkest days for self custody ever. Like no matter how you want to secure yourself, like AI can find a way there. Whether it's like exploiting perfect randomness or your friends accidentally connect you to the wrong telegram account because like the name looks kind of similar and they were, they weren't checking.

[Ryan Sean Adams]

So right now the, the, the attack abilities are exceeding the defense abilities right now and so just finding vulnerabilities.

[David Hoffman]

So yeah, whether that continues long time to recover from that because that is like losing all of your money strikes straight into the heart of your emotions. And like once it does that then like no one want, no one wants to go doing self custody like like this guy, this guy that lost $1.6 million of his of it after doing everything like ever going to do self custody ever again.

[Ryan Sean Adams]

Yeah right. And like I guess from one perspective this could totally have been avoided if ColdCard did things the right way instead of doing it the wrong way. But at another level, like what is an individual supposed to do? Like am I, am I supposed to like analyze exactly how the randomness was like, you know, for the hardware wallet that I purchased, how that was generated in order to feel safe, that it's like actually working. Like that's just not feasible for the average person. So yeah, it's a, it's definitely a big pothole here and hopefully, hopefully things turn around a little bit. But for now do not. If you are using Cold Card, of course the, the message is get off

[David Hoffman]

of that wallet, do something else.

[Ryan Sean Adams]

Your assets do something else and we'll, we'll hopefully the attacks subside and people are able to migrate.

[David Hoffman]

All right, let's move on. We're going to talk about a few more things we got to talk about Clarity act not looking good on a lifeline in the teens probability on polymarket. We're gonna talk about that. We're gonna talk about Uniswap Pools. Pools Trade is. Yes, Pools Trade is their new product. Or I'm gonna tell Ryan exactly what he needs to know about Uniswap's new token Launchpad and then also cloudflare. Bankless listeners know this if they listen to the our episode with Matthew Prince. But Cloudflare is introducing crypto wallets for anyone who wants it. What are they doing? What are they doing? We got the answers. We'll talk about all that and more. But first we're gonna talk about some of these fantastic sponsors that make the show possible. Markets don't move one asset at a time. One day it's Bitcoin, the next Nvidia, then Gold, and then the S and P. But most traders are still managing their portfolio across different platforms, different accounts and different pools of capital. Bitget just changed that. Their new Stocks 2.0 product lets you trade tokenized equities directly with USDT, all inside the same app you already use for crypto. This is not just another tokenized stock product. Stocks 2.0 is designed around deeper liquidity, faster execution and the lowest fees in the market at just 0.504%. And 1 to 1 economic exposure to the underlying stock dividend, stock splits and other corporate actions are reflected automatically, helping your position stay aligned with the asset. You actually want exposure to one platform, one account, multiple markets, crypto equities, commodities and more, all accessible with USDT Bitget Trade Smarter. Start trading today through the link in the show Notes. This is not investment advice.

[Ryan Sean Adams]

Some exciting news. We are launching a new podcast to help people figure out the crypto cycle. How to navigate it. The best crypto cycle investor I know, his name is Michael, Michael NATO. He runs the Defi Report. This is the guy that sent me a sell alert before the 10:10 price drop happened. His cycle analysis has been absolutely on point. I've been following him for years and this year we started recording weekly podcast episodes. Each one we get into his portfolio, what he's holding, the market structure, entry targets, fair market value of Bitcoin and ether and where we are in the cycle, there's new episodes that are released every Wednesday. They're 30 minutes, they're short, they're punchy. I think this crypto cycle is harder to navigate than most. So let's do it together. Go subscribe to this podcast, Search the Defi Report Wherever you get your podcasts, YouTube, Apple, Spotify, or find a link in the show Notes. There's a new episode waiting for you now.

[David Hoffman]

UNISWAP introduced a 24 hour countdown yesterday for pools trade. It took them like 27 hours. They had a little bit of a shaky start, but they introduced Pools Trade, which is Uniswap's own native token launch pad. Like Pump Fun is Pump Fun for Ethereum.

[Ryan Sean Adams]

Uniswap is Doing pump fun now.

[David Hoffman]

Yeah. And like, granted there are so many token launch pads on Ethereum. This is not a new thing. But it is new that Uniswap is going verticalizing and going down to the actual token creation mechanism. And so they have a couple ways to launch a token, a couple of different mechanisms. Both end up in a Uniswap V4 pool with a fixed 1 billion supply of tokens. So there's the crowd launch token. So that's a four hour T wop auction to help make bun like just bundle resistant. Because like a big problem in the meme coin token launchpad world is that like one person will bundle up a bunch of wallets and own like 30% of the supply, then dump on your head. So that kind of fixes that. And then it graduates at a $10,000 fully diluted valuation. Or it refunds everyone if, if the $10,000 market cap doesn't get launched or there's instant launch, which is just like no rules, wild west, like buy at your own risk. It's live immediately, classic bonding curve style. And so yeah, Uniswap has released a token launchpad. Looks pretty similar to all the other kind of like token launch pads out there. But it is kind of exciting that Uniswap is launching it. And so there is a. I think one of the interesting things is that the, the fees collected by this go back into buying the token itself. And so there's, and there's, it's like touted as like more volume. It's even more beneficial for the price of the token as opposed to that coming out of the pool of the liquidity pool. It goes back into the Uniswap pool in the token itself. And so it was an incentive for people to use it. What's your reaction?

[Ryan Sean Adams]

What do you think? Just like Robinhood Beam coins kind of woke them up to this possibility. I mean, that's one reaction. The other reaction is just it does seem like Uniswap is shipping, like shipping harder again. And I'm wondering kind of why. I mean, I know they were always shipping, doing a lot in the background, but it feels like some regulatory malaise has maybe lifted and they are getting back to trying new products and experiments again. That.

[David Hoffman]

That is what you're saying. It kind of feels different in Uniswap land these days. Yeah, yeah, because I was talking to, I was hanging out with some crypto friends last night and like I. We all said the same thing. Is like Hayden's tweets for the last two Months feel more like founder Modi about Uniswap and they're like shipping more things. Yeah, I would agree. I think maybe at some point just like the, the safety nest of your treasury kind of like runs out and you realize that you need to like generate positive economics. And Uniswap as an org has been a pretty big organization in the past. And again, also to your point, with the launch of Robinhood, if you go to the Robinhood metrics like Uniswap, dominance in Dex volume is massive. So the number 1 dex on Uniswap is on Robinhood chain is Uniswap v3, the number 2 dex is Uniswap v2, and the number 3 dex is Uniswap v4. And that's to combined 99% of dex volume on Robinhood chain.

[Ryan Sean Adams]

Wow, that's a big win for them.

[David Hoffman]

They're dominating on Robinhood chain. And that actually does go into the Uni token fee burn. And so with the launch and success of Uniswap on Robinhood chain, the amount of uni being bought back and burned by the protocol has doubled because of Robinhood Chain, particularly because of meme coins. And so because meme coin activity Ron Robinhood is 50% of all meme coin activity in crypto as a total and all that volume is on Uniswap. And so Uniswap is burning uni tokens twice as fast versus like all the other chains combined. And so you can see like, oh, Uniswap sees value here, like revenues coming in. This is working. The token hit like a, like a, like a 10 month high or an 8 month high recently the uni token. And so, yeah, like Robinhood chain and Uniswap have kind of seen some new life and I think this. Can they keep this motion going?

[Ryan Sean Adams]

Yeah, it's very, very good to see Uniswap in motion. Clarity seems to be completely stalled.

[David Hoffman]

Losing. Losing motion.

[Ryan Sean Adams]

Losing motion. So two weeks ago we were at 41% probability on poly market, 28% last week, now it's 15%. So the there, there was no filing of cloture before recess. So that means it's not going in front of the Senate. Democrats are still holding out on the ethics issue. I guess the White House compromises weren't enough. And also they have other concerns. I think it's not going to happen this year for sure. And we have to wait until the outcome of the elections to see if the new incoming Congress. Yeah, the midterms actually wants to pick this up. Or not. I don't think it passes. We may have lost our shot, may have lost our opportunity. I don't think that's the end of the world because we have a pro crypto regulatory force. And as long as we stack up enough wins and get enough momentum, there's no way future administrations can kind of unwind that. Like once BlackRock has tokenized its assets, it's like Democrat administration. Are they going to tell blackrock Larry Fink, like, hey, sorry, you got to undo all of that. That's now illegal. No, that, that, that will already be in motion. It'll be too late. So that's probably the move crypto needs to do to get ahead of this.

[David Hoffman]

I think there's probably a big loss for, you know, like young startups and future startups because of clarity. And so yeah, blackrock is protected, but there are probably a bunch of theoretical hypothetical startups that won't exist because clarity, clarity is not a thing.

[Ryan Sean Adams]

I think that's probably true. David, Good news on Cloudflare front though. We've been covering them for a while. So what move did this week?

[David Hoffman]

They introduced cloudflare wallets which it's pretty simple, allow you to store stablecoins, purchase services and receive funds across the web. Wallets are not new, but Cloudflare using wallets is definitely new. Cloudflare is basically the Internet's firewall and so if you go into a website that is protected by cloudflare, they have a little gate though when we talked to Matthew Prince, the CEO of Cloudflare, he was very into the idea of protecting the content of the Internet from the Google AI crawler bots that extract your content and then don't pay you for it. And I think this is the first tool introducing like a wall between user generated content on the Internet and the bots of the of the Internet scraping that content. And so he's trying to like protect users and make the bots pay for them. And so the idea is like this is actually a wallet for bots. Maybe, maybe it's your bot, but you need to pay in order to scrape the Internet and you need to pay the people who produce the content. And so the first tool of like a big series of like mechanisms that need to be introduced for this vision to come into fruition. But it's pretty cool to see it in action. New this week out of the near ecosystem is staking for near AI. So you can now stake near token and then you get confidential inference, you just get free inference because from the near AI part of Near. So you just know there's no, you don't pay for it with your card. There's no like cloud account. You stake near, you get inference. Pretty comparable to what Venice is doing where like you buy APA API credits and you get inference and also Venice uses Near AI. And so near is kind of just building its own vertical of hey, we have distributed GPU clusters all over the world. That's the Near AI product. If you stake near, you just get inference.

[Ryan Sean Adams]

David, that's a work token. Do you remember work tokens?

[David Hoffman]

It's a utility token.

[Ryan Sean Adams]

Very cool. Yeah, you're doing a number of things from a utility perspective that's I think going to be accretive to the value of near.

[David Hoffman]

Yeah, I'm talking to Ilya today actually about like exactly how this works and why and how like what near really represents with all of this. I'll definitely be using the work token as a concept to talk to him about it. Another, another news on the week. Polymarket seeking investment at more than $20 billion valuation. Ryan, what's your reaction to $20 billion?

[Ryan Sean Adams]

That sounds about right to me. I mean they are. Yeah, it does. I mean prediction markets are markets. Polymarket is an exchange. Exchanges are product market fit, hugely profitable business. Prediction markets are going to increase in the future. Polymarket gets a take rate. I don't know, I haven't looked at the math behind exactly how they're justifying this valuation. But what Was it like 9 billion? Was it that earlier this year? Was that a year ago during the ICE deal talks? And so 20 billion seems about right. I mean is the future. I hope they ipo, I hope or like there's a token or something. I hope Polymarket is becomes investable to retail investors because that's been the only, the shame of this whole process. But yeah, 20 billion seems right. What do you think? Do you think it's, do you think it's maybe the prediction markets is overplayed? You see sports books coming back to take a chunk out of them.

[David Hoffman]

Sports books are coming back trying to take a chunk out of them. Sports books are valued in the 2 digit billion range. So like 10 to like $30 billion is the sportsbook like arena. And then like what they're, what prediction markets are going for is like the CME which is in the three digit billion range, like 100 to 200 billion. So it's still in the sportsbook range. I think everyone in crypto wants less of the sportsbook comp and more of the cme. Comp. But I don't. But they're nowhere near getting anywhere close to the cme. There's like, a lot left to do on that story.

[Ryan Sean Adams]

A lot of competitors have entered, that's for sure. Including, you know, Robinhood. Of course. I know their friend. But they could also do lots of things with their own prediction markets.

[David Hoffman]

Robinhood's prediction market revenue is now 2x's its crypto revenue. And so prediction markets as a category, very lucrative, very monetizable.

[Ryan Sean Adams]

That's right.

[David Hoffman]

Last news on the week. Ark from Circle Mainnet is coming September 16th. Ryan, are you holding your breath?

[Ryan Sean Adams]

I'm not super excited about it, but maybe it's a backend infrastructure type thing. I don't know. It's another chain. Like, I probably won't see it. So not super interesting to me. What about you?

[David Hoffman]

No, no.

[Ryan Sean Adams]

Just before we close, David, like, zooming out. What do you think crypto is right now? Like, are we lost in the wilderness? Is this another bear market where it's just like the tourists have left, the settlers stay? Does it feel different? Like, what's your state of crypto right now?

[David Hoffman]

You know that there's a meme of the. The girl watching the guy place like the square peg in the square hole and like the circle peg, but it always fits into the same hole. Like, that's the joke is like, it doesn't matter what shape it is, it always goes into the same hole. Yeah. And then he's like, the circle goes. It goes in the circle hole and goes like, that's right in the square hole again. It's like explaining this meme is like, oh, meme coins again. Like, oh, see the shape? And like, oh, we're doing meme coins again. And it's just like, dude, like, not defy is not great. Like, self custody not great. Like, it's just meme coins and that. It's a bit. It's a bit frustrating. I've kind of capitulated it to just like, okay, like, they're at least fun and I'm having fun with my friends. But in terms of just like, what we're doing on chain is like sick. We're doing meme coins again.

[Ryan Sean Adams]

That's the new thing.

[David Hoffman]

Frustrating.

[Ryan Sean Adams]

Yeah. But, like, what about. I don't know, there's a lot that is working and has been set in motion and is kind of continuing to build, I suppose. Right. So defi is actually working. It's growing, like, at a much slower rate than I think we hoped. Store of value. That's Still a thing in Bitcoin and maybe ether at some point takes. Takes more of that. Those are some use cases that are working.

[David Hoffman]

Yeah, yeah, maybe. Maybe I'm being overly pessimistic. There are a bunch of things that feel like they're like kind of close but not quite here yet. Like we still don't have a very big ecosystem of tokenized stocks, tokenized real world assets. There's like 17 competing standards and not one of them has really taken the lead. We need that in order for like per platforms to create a fully internalized per spot basis trade and which unlocks so much opportunity in the per platforms. But we don't quite have that yet. So like there, there's. We feel like we're close but making really slow progress on that front. And that I feel like, is also constraining on like the creativity of what we can do here. Clarity was supposed to be really helpful with that, but doesn't seem like we're getting it. I don't know, you can. Going back to like the market conversation, you can kind of see just like nine months. Six. Six months. Nine months of boredom happening. And then. And then like there's capitulation and then. And then you realize that, oh, actually wait, some of this stuff is working. The rubber's hitting the pavement and then it'll work. Yeah. It just feels like a little bit like a waiting game right now. And then in the midst of that waiting game, people are getting hacked.

[Ryan Sean Adams]

I think that's right. It's a waiting game. I think maybe we talked about it earlier in the episode. People won't love crypto again. Investors, at least they won't love crypto again until they start hating AI. So that probably needs to play itself out too. Yeah. Yeah.

[David Hoffman]

All right, well, Ryan, this is the first time we've recorded the roll up. And you? I'm home and you're elsewhere, so go and go enjoy your vacation. Wherever you are, my dude, I appreciate it. Bank of this Nation. That was a weekly roll up. Thanks for being with us. Once again, crypto is risky. You can lose what you put in, but the institutions are here, so we're going even further west. This is the frontier. It's not for everyone. And we're glad you're with us on the bankless journey. Thanks a lot, Sam.