📺 ROLLUP: Ethereum Burning | Penguins & Axie NFTs | Poly Network Hack | Infrastructure Bill

welcome bankless nation to this friday edition of the bankless weekly roll up another special edition with the substitute teacher of the bankless nation anthony cesano anthony welcome to the friday weekly roll up how's it going man hey mate i'm going good i'm glad to be the substitute teacher again you know that ryan is always slacking right like i'm always going to have to fill in but it's alright i get paid double time for this right yeah it's like can you imagine just like having a family in crypto just like what a guy who does such a thing because goes how he maintains like that i don't i couldn't

do it all right for all the people without kids and vacations every friday weekly roll up we go through at the markets what's going on in the market what got released in the last week as well as what's going through the news cycle and then we go through the ecosystem takes who has some good takes around the world of crypto twitter and then lastly we finish up with what david and anthony are excited about anthony you ready to get get going yeah let's get into it before we get into the show we gotta talk about pool together because it is summer time and

it's all time to get into the pool if you don't know pull together it is a no loss lottery which means you put your stable coins your comp tokens whatever tokens that pull together accepts into a pool and then you have a chance to win the accrued interest that accrues weekly from everyone's collective funds so you don't lose your principal you might lose your opportunity cost of money but you also might win everyone else's interest as well it's a fun no loss lottery on ethereum every single week roughly 50 to 60 000 gets awarded in

usdc and that is just the usdc pool there is usually a drawing every single day of the week they have also recently deployed their polygon implementation where you can deposit tusd tether into the polygon pool together pool together pool and they are also rolling out their l2s coming soon in the future so check them out there's a link in the show notes so you can have fun in the pool all right starting with the markets bitcoin coming in at the price of forty four thousand eight hundred and forty two dollars started the week right

around forty three thousand five hundred anthony any comments on the bitcoin price i mean i think just generally the markets kind of trending up uh i think people are i mean it's funny because i see some people on twitter talking about you know a bitcoin dominance move and how bitcoin's going to like uh gain dominance into the s into the winter actually for the northern hemisphere summer ins for me like towards the end of the year because you typically see kind of uh i guess bitcoin dominance increase over that time but i'm not convinced uh i have a different opinion there maybe when we talk about the eighth price i can give my opinion on

that absolutely there's always uh are those people that talk about the cyclicality of crypto markets and i think those times are coming to an end if they're not already over you too many people talk about them too many people talk about the the cyclical nature of these things and i don't know bitcoin dominance have never really been very bullish on that particularly all right ether price starting the week at around 2 680 coming in at the current price of 3 130 hit a almost hit 3 300 earlier this week

uh pretty much a straight line up and to the right all throughout the week anthony thoughts on the ether price yeah i mean it's it's just been funny to see like how quickly we've rebounded i think we're at 1700 only you know two or three weeks ago uh and we were pretty much almost doubled since then you know hanging around the 3100s right now and this is coming off obviously one five five nine uh going live and people realizing that we're burning a lot of eight like i don't know why people thought that we weren't going to burn a lot of aid considering that the fees have been high i always thought that was funny like everyone was complaining

about the high fees and then they didn't realize that we're gonna burn a lot of eighth because those fees were high so i think um you know people are finally real you know what you know what i mean that's just weird but um i think people are finally realizing that uh you know the one five five nine is in in fact burning a lot of eighth and it's not just the only thing um that's going to be affecting each price like over the i guess maybe medium term we've got the merge coming up you know nfts have exploded but if you look at the the um the projects burning the most amount of eighth i'm pretty sure open c is at the top of the list when usually you would see something like unisop up there so

we're seeing uh i think just eighth have like uh this positive price movement in part because of that but just generally like i mean the ecosystem ecosystem's on fire right now we're going to talk a lot about that but just to go back to what we were talking about before with the seasonality if people monitor the seasonality of these things i think uh crypto is very cyclical and is very seasonal but i think that's been a big part due to the fact that like it's all been speculative like 100 speculation for most of crypto's life whereas now we're actually seeing the the use cases be adopted in a really

kind of real way yes nfts are full of speculation but a lot of people are actually interested in them building cool new things doing a lot of different things there and and kind of like adopting this technology rather than just buying it for purely speculative reasons they want to be part of a community or whatever um so yeah i think the cydical nature over time over probably the next couple years um is gonna definitely change a lot um we're gonna see like definite changes in that behavior yeah the thought that these crypto markets are just gonna stay cyclical until like crypto takes over the world and over the

universe like no that's way like patterns don't work like that over the long term what do you make of this uh very straight line from like roughly the 19th of july to where we are almost a month later it seems to me ether has going on this like very straight up into this line up into the right line for the last almost a whole entire month do you is there is there anything to talk about there or is that just a coincidence i mean it it's hard to tell because some people call this like a complacency bounce where the price will bounce off it's if

it's low after a big crash and no one will cash out and then you know it'll drop down again because everyone was complacent about this everyone thought that the bull market was going to continue and all these sorts of stuff couldn't that have been right here yeah i mean that's the thing like it could have been any of these bounces right uh to me this is just um so to me i think two things are playing out right now with eighth price there's disbelief a lot of people are like you know wow we're already back over 3k how is this possible and there's a bit of complacency of people like you know we're back over 3k going straight to all-time high so i think the market's

gonna do what the least amount of people kind of like expect and and that's probably go sideways from here for a little bit maybe um you know in the short term while uh kind of like people change from i guess like i think a lot of people are neutral right now rather than being like overly bullish they're just waiting for like a signal where they're like okay let's break out of this kind of like uh a range here let's go straight to all-time high and all that sort of stuff um but yeah it's kind of hard to tell with the short term but i do think that uh as i was saying about the cyclical nature of things i don't

know i think the four-year kind of cycle is like dead i don't think that's a thing anymore like really yeah the fact that it continued three times is already telling you that in my opinion that's already overextended in its cyclical nature all right moving on to the eth btc ratio we are at point zero six nine on the east btc ratio which is like i always say historically pretty high like always if we go back throughout the like the very beginning of like the whole ether btc ratio thing

we are at always very high levels and we have been for basically all of 2021. anthony anything to talk about here with the eth btc ratio maybe in the last like few weeks and months or so yeah i think the the cyclical seasonality kind of plays out here the most with eighth btc i don't think too many people trade this pair i think it's just good for looking at for overall sentiment uh around like bitcoin versus eth and and how their prices are going i think what's going to happen is you know i mean i don't think this is going to happen i'm actually curious to

see what happens in that typically in q3 more so in q4 ether bitcoin bleeds like and it bleeds hard right it basically makes ethereans feel like [ __ ] for like all of q4 and then in late december early january typically explodes upwards again like there's that kind of like bounce because everyone's kind of like um feeling really shitty and that's kind of like the typical place to bounce but if we if you pay attention to what's been happening with bitcoin and kind of like seeing the the change there i don't i'm not convinced that we're going to see this play out again like it's played out pretty much every year since

ethereum's existed like since the 8th was trading but if we break this cyclical nature i mean you can look on the chart and see that it's played out every single year every single q3 q4 ether bitcoin has bled um you know since the earliest days then it's bounced after that um but like if we don't bleed now if if eth actually takes its uh you know if bitcoin doesn't bleed and it can either go sideways or keeps going up that will show the entire market that there really is a real change and shift in how people are viewing eth as a standalone thing

compared to bitcoin i think people more and more people are realizing that ethereum as a network does just obviously so much more than bitcoin does and we shouldn't be comparing the the two um you know in in lots of different ways so yeah i just think that if we do break that seasonality that is an absolutely massive break of of pattern and i mean that's breaking like six years worth of patterns so yeah it's a pretty big deal if that does play out there and the reason why i think anthony and i are focusing on this whole like cyclicality theme in the market section is that we

see a lot of uh just excitement in the news cycle we see a lot of adoption and there's a discrepancy between what this cyclical pattern of uh crypto market history would predict for the next quarter or so and what we are seeing when it comes to on-chain fundamentals and things just like in the news cycle and and the rate of adoption which is going to be something that we revisit uh throughout the rest of this weekly roll up so stay tuned for that but actually we're going to get to one of those subjects right now coming out of a business wire which is apparently a

berkshire hathaway company a genesis q2 report shows decreasing bitcoin dominance and hedge funds diving into a d5 so this is one of the fundamentals that we are seeing that would disagree with the nature of the cyclical nature of the markets as we've seen so far genesis a digital asset industry provider in digital currency prime brokerage released its q2 2021 market observations report which highlights major trends across institutional digital asset markets the report shows a

significant rotation out of bitcoin and into ethereum and explains how clients search for yield drove activity across genesis throughout q2 man it's as if some of the core ethereum community members were talking about this for the past like year or so institutional investors institutional money they love yield and that they love the narrative that surrounds around yield and we all know that they were largely uh un not sufficiently exposed to ether and

overexposed to bitcoin because everyone started with bitcoin right when you only start with bitcoin you only have other places to go and when you see like the next step after bitcoin is perhaps this thing called ethereum and there's all these yield opportunities on ethereum that just makes a ton of sense to me anthony what are your thoughts yeah i i mean we've been talking about this for years at this point like both of us uh you know wherever on twitter on bank lists on on ether whatever it is uh but essentially ethereum just appeals to so many more people than bitcoin does like what you do with bitcoin is you buy

btc and you hold on to it right there's not much else you can do with it um maybe you can put it in some kind of like uh uh centralized custodians to earn a little bit of yield on it but a lot of the time they'll be earning yield on it by putting it into ethereum so it's kind of like ironic when you think about it like that so i'm not surprised to see this at all uh i'm i i've been a long-term proponent that i think bitcoin dominance is gonna fall dramatically from here and probably fall to under 10 eventually i think that the space is is much bigger than bitcoin it is even bigger than ethereum like i don't think ethereum is going to be the absolute

kind of like um juggernaut and everything else will be like this tiny little thing i do think we're going to be in kind of like this i mean i guess people call it like a multi-chain ecosystem but i do think a lot of that value is still going to accrue to ethereum right like ethereum as it's kind of like the base chain and and as this economic nexus that sits in between everything uh and from that point of view i think a lot of people realize that and so with especially with one five five nine in place now people are like well how do i get exposure to all of this well you know you buy each right you buy east to get exposure to everything doesn't matter if you know

this defy app is hot one you know one month this deep app is hot another month or you know same with nfts you get exposure to the entire ethereum ecosystem by buying each and then with that eth you can choose to stake it or you can put it into d5 borrow against it you know and earn some yield on stable coins and there's an infinite amount of things you can do with with ethereum uh and if you're trying to bet on i guess like a falling bitcoin dominance because uh you're betting on like the world kind of waking up to things like they find nfts well then you you kind of like buy atheists so i think we're going to continue to see this i don't think this

is an outlier and and i'm just i'm very happy to see institutions finally realizing the value of each and ethereum absolutely and this is also backed up by the fact that ether had its first whole entire quarter having more volume on coinbase than bitcoin which is a pretty monumental milestone a whole entire one-fourth of the whole entire year ether trading volume is higher than bitcoins and as we all know in the world of crypto there is a competition to be the internet money and money means liquidity uh and so

seeing the volume shift from bitcoin to ether for a whole entire quarter tells us a new story about where the liquidity in this industry lies yeah exactly and i think it's interesting to see how dramatic the shift has been in only a year like a year ago bitcoin was 57 percent if ethereum was only 15 uh and now uh if you go back to the other kind of like screenshot um that i was reading off uh yeah yeah yeah when ryan does that to me and and and bitcoin is now 24 whereas

ethereum is 26 then has not only been like a massive catch up from from ethereum and you can see like the pattern it basically played out mostly in q1 and q2 um but you know bitcoins lost a lot of dominance to other crypto assets as well because other crypto assets over the over the last year have increased from 28 to 50 so obviously people are just like very very uh excited to to trade other assets that's very interested in trading other assets and atheists like the big i guess like one of the biggest beneficiaries of this and we felt that with the price as well with the ratio going up to like as

i said i don't think many people trade eighth btc but either btsc tells the story and it tells the story of eighth dominance increasing while btc dominance decreases and then we also have this tweet coming out of uh frank shaparo from the block uh institutional demand for eth has surged and it's pushing fidelity and naidig to expand their btc-focused offerings nydig which is is known for one of the biggest bitcoin funds ever and it's one of the reasons why so many commercial banks can tap into bitcoin via nydig nydig which bills

itself as bt for btc first has quietly been offering eth custody to an increasing number of clients plus fdas could offer east services by q4 or q1 2022 so this is kind of like this while there was so much going on this week with the whole like regulatory tax stuff the penguins there's been this underlying story of just like institutions quietly rotating and finding infrastructure and rotating into ether exactly uh yeah i mean i i it's funny

like i responded to frank's tweet there saying like it doesn't pay to be a btc maxi shop and it doesn't right you you eventually have to pay because your customer demand is so high there's revenue sources elsewhere why not go them go go to them all right turning now to money locked in d5 we are coming in at 79 billion dollars locked in defy which is about roughly where it started a week ago but has been a lot higher where than it has been all throughout july so really coming back into the that high 70s low 80s range which again uh we

i believe we capped out at 88 or 90 billion dollars locked in defy and of course the d phi pulse index coming in at 390 dollars starting the week at around 350 dollars peaked out at over 400 415 and then we are currently at the price of 390 dollars anthony any comments on money locked in defy or the dpi yeah so the the money locked in d5 measured in usd is going to trend up based on the market right because a lot of it is a thought of it is bitcoin and

other kind of tokens so obviously it's going to go up and the market goes up um but i think deep phy you know the last i mean maybe a couple of months has taken a backseat because nft mania is kind of what everyone's talking about but d5 is quietly building in the background there are a lot of things going on and it's not going anywhere and i think we're gonna see like a d5 renaissance happen over the next few months especially as these layer twos go live and more and more people kind of like i can play with these things uh i think we're definitely gonna see a resurgence here and i wouldn't be surprised to see 100 billion plus locked in d5 uh very very soon yeah

that will be a fun day to uh to be in d5 that's for sure you can definitely see that number be tweeted out on twitter if you don't want to miss it because there will be a race for all the twitter influencers to get that first hundred billion locked in d5 we all know it's coming uh all right moving on to the dpi ether ratio coming in at point two one two at six a little bit below my point one three call but again not all that far away uh it is below the call i will not i will not deny that but uh anthony do you

have any comments about this dpi ratio yeah i mean it doesn't look so hot so so i have a i have a thesis at the moment that i i'm wondering if it's gonna play out it seems to be playing out already but i think that in a post one five five nine world our performing eighth over the long term is going to be very very hard uh especially um you know maybe like the blue chip d5 things and stuff like that things are already kind of large cap it's going to be very hard for them to outperform either the long term i believe because

of the fact that all the activity generated by d5 is going to feed back to 8th anyway because we're going to be burning 8 because of it so um you know and a lot of and and because we have so many d5 tokens now i think buying the d5 pulse index is still a really good idea of people who don't want to sift through all the all the default tokens but if you kind of like look at it from the point of view of maybe like the complete normie who sees everything going on they're like okay well you know there's d5 nfts like i don't know what to buy like what do i buy and then they think to themselves well this is all happening on ethereum why don't i just buy eighth as like the

shelling point index sort of thing for the entire ethereum ecosystem and i think that's going to be a big reason why why over the long term say like you know a year plus it's going to be very hard to outperform uh just you know holding vanilla eighth um or even like maybe i guess like you guys have the bed index like bitcoin ethan defy which i think is is is less volatile so it's something that people will be interested in as well but uh yeah the the dpi eighth ratio is not looking too hot but at the same time it can always reverse very violently if for some reason people like all of a sudden say

oh well d5 is on the price i'm going to buy d5 then over the short to medium term it can definitely outperform right we are like anthony said we are in the middle of what seems to be an nft hype session uh if that session were to ever turn to d5 things would move really really quickly this is kind of how this industry works is we are only ever extremely hyped or extremely subdued and never ever in the middle uh you mentioned uh the bed index and the bed index is coming in at 142 dollars uh it has performed really well for basically all of its genesis

started the month right around uh ninety dollars and then has peaked out at 153 dollars and on the week we are up 8.6 so as an industry which is why the bed index is so great as a whole entire industry we are roughly up 8.6 so that is pretty cool uh all right uh here is l2b and we haven't talked about l2b for a while even though that we have it in the show templates but the reason why i wanted to bring it up this week is a we haven't talked about in a while but uh we were going through a little bit of a downtrend in in uh

money locked in layer two so excuse me l2b it's kind of like d5 pulse it's like you know money locked in d5 but instead it's money locked on layer twos and we have been seeing a resurgence in some value in some deposits coming in at layer two largely because i think uh the dydx token dydx coming in at number one and over the last seven days it's had a hundred and sixty percent extra value being deposited into its l2 um but of course we are also seeing a strong showing by optimism uh and a few other

layer twos as well anthony any comments on the layer two world yeah i mean you can see with dydx this is the power of adding a token right like as soon as you add token incentives you get a lot of liquidity and i'm really glad to see their growth there i think they're one of the best l2s out there right now obviously built on starcraft technology um has a really great platform um but like i'm always curious to see how these things perform when there isn't token incentives in place so i've been watching something like optimism where they've got synthetics and they've got uni swap but i've in particular been

watching unisop v3 on optimism because synthetics has token incentives technically because of the staking um so with unisof v3 on optimism there's zero token incentives on there so i've been really curious to see that also very um happy to see that the tvl has been growing steadily on there and the volumes i think they picked out at maybe over four million uh 24-hour volume which you know is small when you consider a layer one is like in the billions but uh you know as i said no token incentives still very new very limited guardrails everywhere um and you know we have other l2s like arbitrary

going live this month you know in a fully public fashion so i think this tbr is going to explode and i think the early tbr they're measuring here might have been just like all synthetic staking and when the snx price was like three times what it was now um you know and that was i think that was on optimism but uh for for a little while too earlier on just staking um but like i'm just looking at the the 30-day if you could be changed to the 30-day chart on on there uh yeah you can see that the trend is is very strong like we've basically like you know almost pretty

much doubled here um you know and i think that's just going to keep continuing and it's just great to see and there's a lot of eighth locked in there as well i think that's measuring uh eighth if it was priced in usd there but i'm being seeing like eighth locked in in l2s go up as well like dydx is a big kind of like uh a big driver of that for sure yeah and we did have the optimism team on the banquet show last week if you did not catch that episode absolutely go watch it it's not often that optimism comes and talks on a show we did ask them if they were going to do a token uh

because anthony i'm pretty sure you agree with me we kind of think everyone's going to do a token yeah but when they uh answered that question they said that they had no plans so um they no plans to do a token well they didn't say that but we totally will all right no no no yeah yeah for sure now in the uh new to the bankless weekly roll-ups and also continuing for all future weekly roll-ups we are now seeing 36 000 ether get burned since

eip159 got introduced a little bit over seven days ago seven and a half days ago so in the last seven days thirty six thousand dollars or excuse me thirty six thousand ether was burned which is coming in at a uh 111 million dollars fun tracked roughly about uh three and a half ether per uh minute for over the last 24 hours anthony did you see this ether burn thing coming like did you know about this no like this is this is caught me by

surprise like i am so totally surprised like where did this come from like this one five five nine thing it just came out of the blue right oh but okay but did you think that it was going to burn this much ease yes yes i mean i've been obsessing over this for a very long time and i have been screaming about it because um justin drake put out his assumption saying that 70 to 75 percent of the uh fees would be burned and that's exactly where we are today it's about 75 on average so he was he was right about and

i based a lot of my assumptions uh on his work and you know given that how much work he's done throughout the um ecosystem with research on ethereum monetary policy 1559 everything like that uh i tended to kind of like believe his estimates and you know when i saw this happening i was like yeah this is this is exactly what i what i expected but a lot of people didn't and it just really surprised me because i mean maybe a lot of people don't watch my stuff but i mean i've been screaming about this for so long i really like this watchtheburn.com website over the last seven days it's been keeping a tally of the burned

versus issued amount of eth and this is one of the metrics that i talked about forever ago the eath issue to burn ratio in the last seven days we've issued almost 67 000 eath and we've burned 35 800 east so we are burning more than half of the issue of the east that we are currently issuing and that is in a proof of work environment right so actually excuse me we burned 35 800 eats and then the net issuance was 66

800 okay so so we actually only burned roughly 35 percent uh and so you know 35 percent like no like and that is largely e that would be otherwise being sold by miners and so 35 percent of ether being issued is no longer being sold it is just being burnt it's as if people saw this coming this fits in with my napkin math about how if we wanted a full net deflationary eighth in a proof of work world we would need about 150 gray uh on average we've had i think about 50 60 way on average

over the over the past like seven days um so yeah it's not going to be deflationary but we have had ultrasound blocks right which is like blocks where we've burned more eight than we've um that we've issued as block reward and we've had many of those uh which i think is really cool to monitor but i mean yeah like the thing is is that it's funny because i've been seeing people say oh well you know how much eat was issued during that time like who cares how much was burned how much was still issued and it's like guys like this is like so missing the point right now like it's just it's insane um but like other than that i just think it's it's funny when you look

at the dollar values too like there's ten thousand dollars on average over the last 24 hours each minute being burned with eight so don't just look at these value look at the dollar value ten thousand dollars a minute that's like someone buying ten thousand dollars every minute and sending it to the burn address it's the same thing at this rate it's faster than michael saylor is dollar cops averaging in to bitcoin um and and the crazy thing is is like you said that we've had ultrasound blocks we've also had ultrasound hours as in for a whole hour ether was deflationary during dependent like times of nft drops usually um but i mean in defy summer we

sustained over 150 way for weeks if not months right and there was times where we were holding three to four hundred gray for for an entire week right and so to some degree like when we have a really really high congestion environment like that burns way way way more ether uh and like it does it retro like if we want to retroactively become ultrasound that is possible right because you know the maximum amount of ether that you can burn inside of a single block is infinite right and so you know the maximum amount of ether you can burn in a single month is also infinite right uh

and so uh and and of course this just gets so much easier under proof of stake you you said your nap can mess with like 150 gwei uh well i think it was like at the previous like yeah i think it was like 10 to 15 guests right depending on the age stakes yeah 10 to 15 grey like we've been sustaining 10 to 15 grey like 97 of the time for the last like two years yeah yeah exactly so yeah and this is why i think i've been saying it on twitter leaking a bit of alpha the merge is like a hundred times more bullish for eight than one five five nine like

one five five nine was like the appetizer guys like the merge is the main course like it's the main course it's the dessert it's the drinks you have with your food right it's just it's everything it's it's huge yeah and the cool thing is we can actually do a little bit of like again napkin math here is like so we call the merge the triple happening right because it's happening having the amount of issuance of and then doing it again and then doing it again so what is it what is that 50 25 12.5 nothing percent it's about a 90 reduction yeah 90 reduction which is triple you should have them like if you have it fifty

percent fifty percent fifty percent it's it's about ninety percent yeah right and then with this uh burn rate we are burning uh i think oh god this is why i'm not a math major but anyways take take a third of the issuance of under this proof of stake proof of work form and then also keep on burning that like these things are really symbiotic uh okay all right we got to move on so we're gonna stick in into the the markets for a little bit too long but before we do a shout out to michael silberling which he was listening to the

eip159 expert panel which another great piece of content and made this dune analytics board which i found very very useful uh but apparently it's not loading but if you want to get a very in-depth uh dune analytics board about eip1559 check out that link in the show notes shout out to michael for making that dune analytics board uh and then again i guess we're not done with eip159 here's here's a nice visual visualization of all the eath being burnt versus the eat being paid to minors like look the dark blue is how much is being burnt and then the light

turquoise-ish is uh revenue paid to miners and there's a lot of dark blue there like it's most of it moving on to axi infinity which is the first nft project to hit 1 billion dollars in all-time nft trading volume which is a very large number absolutely massive actually infinity we brought them on to the markets a couple weeks ago because the price was just going absolutely bonkers and we brought that on after two weeks after before that we brought them on the show

because the price was going absolutely bonkers and the revenue of this whole entire ecosystem continues to be sustained which is very very impressive anthony any comments here yeah i mean this is just like to me the the story of axiomfinity is what's going to bring in the the kind of like next wave of nft uh kind of like um you know adoption and builders because think about all the game development studios that have now realized how big the total adjustable market is for play to earn games and

think about all of them integrating these sorts of things into uh their mobile apps right like there's a lot of apps with in-app purchases and stuff like that but they're gonna be able to supercharge it by tapping into these play to earn things so i'm gonna i can pretty much guarantee that every single game company worth its salt right now is contacting you know whether that be ethereum layer 2s that are focused on nfts or anyone who knows about this stuff they're contacting them to like the team at polygon as well and stuff like that to say hey hey how do we do this nft thing and you're going to see an absolute explosion of this stuff