📺 ROLLUP: China Bitcoin Miners | RIP John McAfee | EIP-1559 Testnet | Layer 2 Summer

thankless nation welcome to this friday's episode of the bankless weekly roll up once again for the second time this week we have a special episode because our fearless leader ryan sean adams is out on vacation and so we have brought in a substitute teacher anthony cesano the second time that he stepped in for ryan uh and anthony welcome to the bankless weekly rollup thanks for helping us go through the news man hey david thanks for having me again you know i'm ryan keeps slacking off i have to keep making up for for it so uh you know i'm always happy to do that

yeah yeah well right ryan does a ton of the leg work behind the uh behind the scenes and so uh happy to get a new face in on the show and while ryan deserves a a well-deserved vacation or slacking off one of the two things all right bankless nation i'm sure this isn't your first weekly roll up so you know what to do get out your coffee because we are going to be moving through a bunch of topics really quickly first we're stopping at the market what happened in the last week in the market releases what got released news what happened in the news cycle some eco system takes who had good

opinions in the last week of crypto and then finally we will finish off with what david and anthony are excited about and the cherry on top after that the meme of the week anthony you ready to get going here let's do it it's been an exciting week but guys first before we get into the show we got to talk about ledger and how you kind of need one have you been just fooling around in d5 doing yield farming and all that other stuff and you've been doing it on your metamask and your hot wallet if you've been using a hot wallet you have to get a ledger hardware wallet

and the ledger hardware wallet only becomes more and more useful as ledger integrates more and more defy apps and the most recent defy app that they've integrated is paraswap and so you can now use paraswap directly from the ledger live software which is the the software you can download on your computer it's extremely friendly to all of the all of your friends that you're trying to get into crypto send them get them a ledger first and foremost and then send them to the ledger live app which is a very safe environment to be in crypto while also being your own bank if you are unfamiliar with what pair

swap is it is a dex aggregator that combs the world and landscape of dexes and make sure that you get your the best optimized trade whenever you swap your crypto assets and now you can use it inside of your ledger so check out the link in the show notes if you want to download the ledger live app and also get a ledger hardware wallet which like i said if you don't have a hardware wallet you're playing it risky so protect yourself with a ledger and just start using the ledger live app all right bitcoin at the price of thirty four thousand three hundred dollars

anthony got any opinions as the ads to the trajectory or price action that we've seen in the last week with bitcoin not not really not any strong opinions it's just been uh weak uh price wise for a little bit you know i tried to to bounce up a bit after falling under 30k again and you know i think everyone's just holding their breath and seeing if it's going to maintain that because i feel like at this point in time not just with bitcoin but with everything people are just kind of like too scared to open long positions at right now because they're like okay if i can buy it back in cheaper there's no rush

really right now um but yeah who knows what's gonna happen from here it's really uh everyone that i follow that's either a trader or investor whatever no one really knows what's gonna happen in the short term i think it's the most confused i've seen in the market in a very long time yeah confused definitely really seems to be the word of choice for the last week what do you think about this head and shoulders formation that people traders are really talking about where the shoulder the left shoulder is in january february of 2021 and now we are establishing that right shoulder and then the high range between

50 and 60 000 was the head what do you think about this head and shoulders formation yeah i've been watching it it seems like something that the bears really really want to play out because that would mean that btc would go to around 20k or even below 20k which would be obviously like the buying opportunity of a lifetime on bitcoin or at least what people will consider to be the buying opportunity of a lifetime but it still has time to invalidate i mean it has to get back over 40k uh it seems like to and and stay there like it tried to do that a little while ago and then it just failed um but yeah i think this is this is

quite scary if it plays out uh because just based on technicals if it does play out properly yeah it'll be going to the old all-time high uh to test it again and you know that's always scary uh i there's a lot of precedent there to say that going underneath the old all-time high is just not something that bitcoin does when it comes down but at the same time you know who knows right this has been a weird bull market so maybe it's going to be a weird bear market if we go into that yes again that's an interesting way to put it i i my opinion here is that so many people have their eyes on the head and shoulders that it's it can't play

out too many people are watching it and so it's it's a crowded trade if it is a trade at all let's move to ether price ether price currently hanging at around nineteen hundred and seventy dollars it's been flirting above two thousand dollars uh recently uh yesterday and the day before it got up to i think as high as two hundred and or two thousand and forty dollars uh and it's struggling to keep its head above that with that two thousand dollar mark but um doing a pretty good job of it uh again right now falling below nine uh nineteen thousand and seventy dollars anthony any opinions on at the

eth price yeah i mean i think it feels like it's just following bitcoin at this point in time uh it doesn't seem like kind of like head and shoulders pattern underneath or anything like that or any kind of like i guess obvious technical patterns but i feel like bitcoin led the the way down and it's kind of like leading the the strength now in the market and if bitcoin seems strong then it's going to seem strong but yeah i just it's just limbo again like the eighth i guess the eighth price is even more confusing than the bitcoin price because it's just not acting on its own it's waiting for a for a signal from

bitcoin which is waiting for a signal from whoever to kind of go um and to go back up basically yeah absolutely uh i think in a confused market uh everyone is kind of waiting for for bitcoin to make its first move right it reminds me of that meme from um uh forrest gump where all the runners are running behind forests and everyone's waiting to see what forest will do next uh and so i think if when we are going to finally get some clarity as to what this direction of the market is it's gonna probably come from bitcoin first um everyone's looking at the

biggest whale in the room here and of course um bitcoin is still it's still king still number one that's why we always start with bitcoin price but if any other asset happens to uh surpass bitcoin in uh total market cap we will lead with that one first um speaking of the most recent and the most likely candidate is perhaps ether so let's talk about the btc ratio currently at .057 which historically still high again still high versus bitcoin uh coming off the highs that we touched just above 0.08 when it was the flipping mania uh

anthony is are you seeing strength or weakness in the eth btc ratio again uh it's i i think this is related to what bitcoin's doing so i think if bitcoin starts going up and trying to confirm some bullish continuation the ratio is just going to fall because everyone's going to be piling into a bitcoin trade and i feel like ebtc does really well during bullish momentum um but during kind of like bearish momentum it seems to either just trend down slowly get stuck in kind of limbo um i'm i'm eyeing that 0.055 level that it

tested last time but uh you know it could go lower than that it just depends on if bitcoin starts sucking up uh all the air again and uh sorry sucking in all the air out of the room again uh we can see this drop further so generally i don't know people that kind of trade btc they more trade sentiment around btc and eat which is which gets reflected in this chart so it's a very messy chart that's for sure and let's go to the d5 pulse index which i have to admit defeat on my .013 bottom

call we are at point zero one two which is meaningfully below point zero one three and it's been a week without trying to regain it uh i thought it put up a valiant effort uh but uh i guess we are just going lower than than what i thought however i i still think that this is a good buying opportunity for dpi uh this it's just approaching lower lower lows and lower lows and the the fundamentals behind a lot of these c5 tokens are only getting stronger especially when we talk about price to sales ratio and and uh

the cash flow as as a price of earnings and comparing that to traditional valuations and traditional metrics uh really really cheap defy tokens in my opinion anthony got any opinions here i mean it's a little bit surprising how weak the fire has been against 8th in particular uh this is you know it's pretty much like i think it's at an all-time low or something like that or lower than it's going to last low there we can see in the chart um you know we could i guess talk about uh dpis performance in

general and like d5's performance for for hours but i think the one thing that uh caught a lot of people off guard was the fact that they thought during like the mania people were going to pile into default tokens when in reality they piled into like dog tokens and scams and like retail never came for d5 at least ethereum d5 i mean you could there's other quote-unquote d5 out there that um you know it is kind of falls into that category because they market themselves as such but i just really think that that the retail investors didn't come

and we don't have enough institutional and and traditional investors in this space to really care about price to sales price to earnings you have to move the needle there but at the same time each is just like such an amazing showing point of an asset for the firm ecosystem i mean if you own defi like ethereum default tokens you own eight like that already is enough signal to me because like you know d5 is a broad kind of thing and if i own eighth it doesn't necessarily mean i own any kind of like specific defy token i might own some of them but it's not like everyone owns the same like me and you would own different

kind of default tokens or we might have some overlap but generally we both own ether so that that shelling point of an asset i think is incredibly important i think that's why it's so so hard to outperform each in over the long run yeah as we know eth is ultra sound money and so that's that's always why we kind of look at this dpi versus eth ratio because to me the dpi dollar number is only only tells so much of a story right um the d5 and ultrasound money i think orbit around each other they it's really the ratio

between the magnitude of these two things i think is really the signal versus the noise and i mean we're all pretty convinced that over the long term both defy tokens and ether going up in dollar terms anyway so why don't we get ahead of that conversation and just start comparing these things to each other we are currently standing at 51 billion dollars locked in d5 again coming out the highs i used to be at 90 billion but 50 billion dollars 50 billion dollars is still a pretty high number not setting any new flow floors i would say uh staying above the the 50 billion

markers is pretty cool anthony any opinions here yeah i mean the dollar value locked is just going to follow um the prices obviously so as prices come down especially of eighth that dollar value is going to fall so i mean yeah yeah basically like i i feel like it's it's completely natural um and you know if you zoom out to like all on that chart the growth is still like incredible uh absolutely incredible right even over um yeah it really does look like it really does look exactly like the heating chart which is which is pretty

funny but i think i think yeah generally like obviously if 8 is going down then that number is going to be going down um you know at this point in time because eighth is the prim you know premier collateral the pristine collateral that everyone uses within these systems um and you know that that that's why it's tied i think ave coming in still at number one with the most value locked at in 15 dominance according to d5 pulse ave and d5 pulse report different numbers locked if you go to the ave page they report a different number and so i'm wondering

i'm wondering where that discrepancy is is counted from uh something new that we might be revisiting a lot on the bankless weekly rollups is this new website called layer2bl2beat.com and this is kind of similar to d5 pulse in that it compares the amount of value deposited onto different layer twos and interestingly it's decided to not include polygon here which i guess because polygon isn't a true layer two i guess they are are drawing that line there um i personally consider polygon a layer two just because any scaling solution i

think that's politically aligned with the theorem at the very least as a layer two that's a subject for perhaps a different day um but uh loopering coming in at number one with 120 million locked uh followed up by zk swap with 70 million and dydx with 43 million we got optimism in there we got hermes in there we got uh zk sink and uh uh let's see what's what's the other one um arbitrary as well uh with a you know just a relatively low number of sixty six thousand dollars in arbitrary but i think that these numbers are going up and to the right and it's gonna happen pretty damn fast

yeah i think i think you can look at what happened with polygon even even if polygon isn't included here i think you can look at what happened there and kind of like extrapolate that out to what's going to happen with things like optimism arbitrarily you know evm compatible zk sync and things like that like once you have the platform live and the apps on there the users come very very quickly as we've seen because liquidity is so easy to move and as long as you have the correct infrastructure tools and the correct kind of plumbing in there you can get users across so yeah i think this this is kind of noise right now because the layer 2 ethereum

ecosystem is still so so early um you know and and a lot of these things aren't even live in a public fashion hopefully arbitram goes live very soon um and optimism obviously you know said that said they'd be going live in july i think they still might hit that but uh and then you know the other ones are coming later so i feel like in the next six months this is going to look very very different and the top projects will probably be uh the the kind of like generalized platforms because loopering is amazing but loopering isn't a general generalized platform right it's just its own ecosystem uh so it probably can

never be as big as the generalized ones but that's not what they're going for so that's fine uh same with things like diy dx and and zk swap and all that sort of stuff so yeah i think it's really cool that this site exists and i can't wait to to see what it looks like in six months time do you have an opinion as to why dydx builds on its own layer 2 or or rather instead of just picking out something like arbitrary or optimism that has more generalizability and and perhaps a more diverse ecosystem in the future yeah you get i guess you get more

control build like building out your own thing it's like it's kind of like this theory that like every app should have its own chain so to speak so app specific blockchain and that's kind of like the cosmos uh model i guess and unless to a lesser extent maybe the polkadot model but um you know i think for them they just wanted to like be laser focused on their own products and not have like the noise of of of anything else um in the background there they they also rebuilt i believe dydx in cairo in starkware's programming language they didn't build it in solidity and they're using

starkwear's new virtual machine uh stock os or something like that the operating system there so yeah i think it's just like a different kind of um uh uh a model it's like the loop ring model so to speak but they want to create their own ecosystem they want to be laser focused on their own product they don't want to have anyone in there you know crowding out them out or whatever but they still want to live on ethereum and they still want to inherit ethereum security so yeah and i think there was a podcast done i can't remember where it was what it was done i don't know if it was done on bank or somewhere else where uh dydx and stock were on there they

were talking about like their philosophy through this and how they didn't mind having to so yeah yeah okay but then yeah they didn't mind having to rebuild uh the thing from scratch because i only took like six months and now they have like a fully you know um scalable roll up so to speak using some some of the best technology in the space so yeah i don't i i think it's just like a different model at the end of the day totally yeah and if you guys want to check out the anthony that or the podcast that anthony's talking about that was a state of the nation with dydx and starkware you can find that on the youtube here is something new that happened this last week over a hundred

thousand ether 200 million dollars was staked into ethereum 2.0 in a single day uh anthony do you know who who did this yeah it was me uh i didn't want to die i didn't want to dox myself till today but uh yeah no you know what it's funny because like uh on bitfinex at around 1700 to 1800 when eighth was falling through there was a massive massive whale buying up eight like i think they bought over a hundred thousand each and i don't know if that sam whale is the one that put

this into staking but this is a lot of aid going into staking i mean the confidence that that this signals about eighth like because this went in directly it didn't go in through some custodian it didn't go in through uh lighter or anything it went directly into the deposit contract which means this is locked until the merge so this person is essentially saying i don't want to sell this eid until at least the merged um so yeah it's a huge photo of confidence it's really great to see i i believe like every bit of east going into staking um direct staking not through like a third party let you exit

whenever you want um is a vote of confidence for the future of ethereum and and you know this is just a huge like hundred thousand eighth i mean the dollar value on that right now is what like two is it two billion dollars 200. sorry 200 million not not billion that is that is a massive amount of money going in um so yeah really really cool to see this i'm not sure who it is like there's only a very few people who can afford that that amount of ethan who would actually buy that amount of eight maybe it was already someone that was already a whale i'd have to do some on-chain analysis but i haven't looked at it too closely yet that would be insanely cool if we got a story out

about somebody who bought the dip and then just immediately just yeted it into the deposit contract that would be really really cool the other the other indicator you said a vote of confidence it to me it's just like obvi there's provable data of on-chain bulls like only bulls are in the deposit contract only bulls are people that have are buying ethan and putting it there because like like you said it's people that don't care about the price of ether they are they are holders until the end of time right um staking is nice because it intrinsically rewards bullishness uh

people we talked on the bank list a weekly roll up a few weeks ago about people that had fears that you know when the merge finally happens if there's going to be a bunch of eth coming to the secondary market to dump because uh a lot of eth that got to place a place into the deposit contract got placed between like 300 and and 1 000 ether and so people might want to take some profits but my response to that is if you are depositing ether into the the deposit contract you are intrinsically an ethboll and so you actually are the person that

is most inclined to not sell your ether and so we'll see how that plays out when the merge actually decides to come around and and i think it depends on what price uh what price is at that point in time as well and also uh for those who don't know there's actually a withdrawal queue like not everyone can withdraw at once i think a max 900 validators can get out a day which is 900 times 32 whatever that is um can get out a day so that's the max amount of selling pressure if you assume that they're all going to sell that we would have uh so

you know when you think about that i just i don't know i i'm with you i feel like staking your eat is like a sign of bullishness and i feel like most of that eighth is just gonna stay in there forever i really don't believe uh that it's just gonna become like the merger is gonna go through the withdrawals are gonna be enabled and everyone's going to rush to the exits to sell i just i don't see that happening totally agreed another sign that this bull market is not over is a16dz launches a new 2.2 billion dollar crypto venture fund which means 2.2 dollars of investment is

coming into this industry that is the largest uh fund that i have ever seen ever by a long shot uh i i think that's what this article is about is it's actually saying like yeah this is the largest fun out of crypto uh so congratulations to a16z well deserved part of that brand of power that you guys got there uh anthony any comments here yeah this this is definitely the largest fund it's it's uh their third fund so they've got two other ones that they've already deployed uh and i think the the most exciting thing about these funds is that they have to deploy um you know

unless all the limited partners or lp's they're called one or their money back uh which you know a lot of the time they don't uh these funds have to be deployed which means that there's a lot of money coming into i think a lot of it will go into the private markets but they uh a16z still does otc deals with uh with projects i mean i think they did one recently with solana uh so this money is going to make its way into the ecosystem for sure regardless if it's a private deal or or a public deal or whatever um but this just means that anyone who wants to get funding i mean it's not just a16z either there are so

many funds out there who recently raised money off the back of the bull market where people kind of foamed in like i think when people look at funds they think oh they're sophisticated they don't foam a win no man they're humans they foam away in just like everyone else um so so there's this money here just like for builders and we've seen some mega razors recently like uh stock wet 75 or 80 million or something diy decks at like 60 million so these teams are going to be able to build through any kind of bear market if we go into for some reason another two two year bear these teams are fine and there's

more capital to raise you know series a's or series b's or seeds or whatever from these funds so this is incredibly bullish i think um for the builders space especially and for the fact that you know during the bear market there were not not that many funds in the 2018-2019 bear market and not many things were getting getting uh kind of funding now i mean there's billions just waiting to be deployed which is which is really exciting yeah there's a very strong conversation in 2018 and 2019 as to like yo how do we fund our industry

ethereum really had that problem and and seeing these numbers come into funds like a16z and and like you said a16c it's the biggest by now so congratulations to them but there are so many that are also very large uh and so like guys we got we got fuel in the tank if anything bad happens uh for the long term with crypto prices ban tag out of the urine team posted this chart that i thought was pretty interesting where it compares and contrasts the revenue generated by the urine protocol versus some uh tradify some traditional finance correlates like

betterment wealth threatened blackrock and interestingly it also compares it as a revenue per employee basis and so urine made 123 million dollars in revenue and compared to betterment which made 50 and wealthfront that made 30 million dollars in revenue but interestingly revenue per employee urine made 5.86 million dollars per employee and betterment just made .17 and wealthfront made 0.13 million dollars per employee ryan sean adams if he was here he would

say exactly what i'm about to say right now but d5 protocols don't have much costs they are protocols they are autonomous software on ethereum once they work they work in ethereum and ethereum security is what actually is the thing that is costly to maintain and that is that's that's a whole separate consensus mechanism that's that's proof of work and proof of stake and ultrasound money and all that once that is taken care of defy apps are free to maintain and so all that's needed for things like urine or uniswap is just a little bit of continued development from a relatively

small team which makes them some of the most efficient um capital generating entities that we have ever seen in this world i i wrote about a bit about this in in the delegate newsletter the other day where i basically said that it's just absolutely incredible the uh the flattening of costs here across d5 protocols with their um centralized counterparts i guess you could call them uh you know you went through the the table here i think it's funny because you can look at the the number here for year and 21 team members there's also

the community as well i think the difference between these kind of like betterments wealthfronts or whatever and yearn is that yearn has a core team that does you know the core development but then they also have a massive community betterment and wealthfront don't have any organic communities from what i've seen or even blackrock right there they're just like their community is their company so to speak um whereas you can be a young community member or a you know wi-fi token holder and have absolutely nothing to do with the core development and on top of that there's a lot of other protocols out there that are essentially done and don't need uh

stewarding or don't need kind of like i guess like continued building you know uni swap's a perfect example here where v2 is still going strong v3 is out there but v2 is very strong and there is no development on v2 because you can't you can't do anything on v2 because the contracts are immutable it's completely decentralized governance doesn't have any control over v2 um so essentially it's done it's zero employees and it's still making revenue uh for the protocol and the lps and things like that so i i think uh this is just going to be a massive kind of thing

going forward where as i was saying before there's not enough sophisticated investors in this space yet to care about this stuff but going forward there will be and they'll be like you know how is this possible like this this protocol is doing um this you know price of show they have like such low costs um you know their growth prospects are insane why is this token only trading at x and x market cap and i i think that is going to be a massive shift here because at the end of the day yearn wants to be like similar to something like blackrock or betterment and wealthfront and they're already doing more revenue than

betterment in wealthfront um with way less team members and and and and also with way higher growth prospects too so yeah i don't know i just feel like the market can't just stay really dumb forever no that i'm i'm with you 100 brother like so to some degree i'm on my bearish days i'll be confused i'd be like well some of these apps aren't actually throwing off cash some of these like governance tokens do people actually want governance tokens are they really what we say they are but at the end of the day when i put my bullish hat back on it's like

all that all that people have to do is make the association right all that all that people have to do is believe that it makes sense to buy these things because they generate revenue for the protocol and maybe maybe they're not throwing off cash into your pocket maybe there's just a lot of traffic controlling of value by these governance tokens but all people have to do is believe that they are generating the numbers because a lot of these uh typical equities they don't pay dividends either and so to some degree it's very much a belief systems like do these tokens have control over the value

that they say that they have and there's a lot of value that these defy apps are controlling and so at some point i do think there's just going to be like a herd mentalities like oh yeah these tokens are really valuable let's buy them all right on the same vein of protocols with cash flow and fees alpha femoral is one of the few protocols that actually does put cash in your pocket as a token holder so and uh alpha more v2 has already generated almost 700 thousand dollars in protocol fees in just about one month annualized total fees collected by all

half of hamura products v1 v2 and on binance marching will be 13.85 million dollars if that was annualized over a year uh which puts alpha hemorrha you know decently up the the charts of revenue generating cash flowing assets in d5 yeah i mean i think this is really cool uh that alpha's already like kind of like that big and returning things to token holders but at the same time i have a little bit of a maybe a different view here where i actually believe that token holders shouldn't be getting

anything at this point in the life cycle of these products it's too early all the money and all the revenue that's being generated should be reinvested back into growing the protocol uh that's a lot of money that can be reinvested into building and i i really i don't okay i don't really think that uh token holders should be getting like a dividend what and not even a year after alpha finance as a launch for example and you know you see this play out a lot in the traditional kind of finance system or the traditional any any kind of company system where dividends or or maybe a public a company won't even go public

for a long time and they won't pay dividends for a uh for for a long time there as well so and they just reinvest i mean amazon does it still they reinvest all their profits into growing amazon and the amazon stock price hasn't suffered at all like it's you know um so i think i have a bit of a different uh opinion there but i i think it's still cool to be paying out to token holders but maybe it's just a bit too early to be doing so and i don't know about alpha finance specifically i know some protocols do both where they take uh money for their treasury and they take and they pay out some to stakers to act

as like an insurance backstop which i think is cool if there's actually like a productivity being done here where staking tokens gives you access to like revenue of the system but it also means that your tokens are at risk if you're part of like some insurance pool or you have to act as like a backstop for the protocol whatever so i think that that that's a better model but just straight paying people for staking you know and and not giving and then not taking on any risk i think is too early and probably not the best model going forward let's actually camp on this point here because i want to parse this apart um

i agree with you in the sense that there's certain laws about finance just are exist no matter what and you know young upstarting protocols shouldn't be paying out dividends because they need that cash flow for themselves at the same time i think it would be really important if like the dfi ecosystem planted a flag and be like no we are not a because there's a critique of the legacy financial markets that all of these non-dividend paying stocks are really just a greater fools analysis like or greater fools like valuation theories like oh i'm going to buy apple stock why am i buying apple stock it

doesn't pay me any money but i'm going to buy it so i can sell it to somebody else at a higher price later which is greater fools like uh like argument for why you think that's uh apple does stock buybacks too i guess that's another thing it's like it's like the wi-fi model right where essentially you you would uh um buy it because you you know they're gonna buy it back and it doesn't matter if they're not gonna burn it or whatever um they're still buying it back which adds by pressure but i get what you're saying like there is definitely a faith-based or greater full element if you want to call it to a lot of these things but yeah sorry go on well so we

have the option to pay dividends to token holders which is one option we can buy back and and and kind of make or dials the buy back and burn uh wi-fi is buy back and put it in the treasury wi-fi is and urine is also buying back eath and putting eth on the treasury and so these are three different ways to like add value to your protocol dividends um buybacks and then ethan and stablecoins put that on the treasury and i actually think buying uh dye or or uscc or ethan putting that on on the treasury and

inside the protocol which is governed by token holders is actually a nice compromise because that allows the protocol to still tap into the revenue that they're generating but it allows for the governance tokens to govern over what is a growing mountain of cash and so that's a pretty direct way to add value to the token yeah yeah i think so definitely monthly average borrowing volume on ave has just gone up through the roof and so in june 2021 we are already past where we were in may uh