📺 ROLLUP: Steph Curry & Tom Brady FTX | Crypto Regulation & SEC | Solana & Arbitrum

hey bankless nation it is the second week of september and it's roll up time how you doing david pretty good ryan ready to get into the weekly rollup again so much happened this last week the crypto world only gets crazier and crazier got celebrities getting into crypto we had a flash crash nfts continue to do nft thing uh so we got to go ahead and get right into it and roll all of this up david did you uh get some gray hairs from that flash crash man it's like it's like an instant 25 down uh did that uh cause any pain nah

no we we were on we were on a call while it happened i was like hey ryan look at the uh look go look at the eath price and you were like what what was it at is that what and i said oh it's at 3 000. you go oh wow 3000 is really doing well like no no no dude not 4 000 3 000. yeah for some reason yeah and then we popped right back up i was also not bothered by that anyway this is crypto this is what you come to expect and this is definitely what you come to expect in the roll-ups we get you the entire week that was crypto all packed into markets news some hot takes meme of the week we're about to get into it but before we do david we gotta tell

them about so rare yeah so rare fantasy football on ethereum where you can actually pick out your team and create a fantasy sports but using nfts on ethereum so you can even create your lineups you create a select a captain you get points based on real performances as one does with fantasy sports and you can even get weekly prizes by playing fantasy football with silver what's super cool is these are all nfts right and they're all layer two nfts so that means like buy buy gas fees no gas fees on this um so

rare just let us know too that laliga which is one of the top um five world football leagues just signed a major long-term nft partnership with them that just happened this week if you were a soccer fan if you're a football fan you know that is absolutely massive news that includes both of their leagues their first division laliga santander and also la liga smart bank that's super cool and i didn't know this david but uh so rare already has half a million registered users they've

sold over 130 million dollars worth of nfts since january so this is absolutely exploding and it's no wonder right like you could see it coming we've got sports over here fantasy sports we've got nfts over here match made in heaven you add some some layer two so low gas fees and you've got a platform that is expanding and growing so bankless nation if you are interested in this go check them out at so rare dot com we'll include a link in the show notes that's s-o-r-a-r-e-dot-com

go check it out just further proving that nfts are how ethereum markets itself to the rest of the world so thanks to solarware for sponsoring this bankless blitz totally true okay david we should get to the markets what's happening in bitcoin land yeah bitcoin started the week at 46 000 got down to the low of 45 250 got up to the high of 52 700 and then back down to where it is currently at 47 000 so overall down 3.5 percent on the week

yeah look at that yeah you're muted ryan but yeah that is a straight line down from 52 000 down to 47 000 that it all happened within like two hours it looks like yeah i was just saying it looks like an elevator all the way down that happened on tuesday was it right like tuesday morning okay it's solid blur uh same thing happened with eath price right we see that elevator down effect so where did we start where do we end on the week started at 3760 uh hit a high of 3975 and then found a low at three thousand

three hundred and we are currently clocking in at three thousand five hundred and twenty dollars overall down six point five percent on the week okay what's our ratio looking like the east to bitcoin ratio which we monitor uh on a weekly basis is are we up are we down we're a little bit down but not by much i believe we started the week at uh 0.7877 and now we are clocking in that point excuse me point zero seven eight i think is the the high that we also started the week at and then we are at point zero seven five so down three point four

percent on the week let's explore this flash crash a little bit that's what they're calling it a flash crash of course this is larry cermak he said more than 2.6 billion worth of positions were liquidated in the last hour looks like there was a lot of leverage clean out and that was over 1.1 billion in bitcoin leverage flushed down the toilet 700 million dollars worth of eth larry says if you ask me perfectly healthy leverage flush uh funding rates on ultra spiking

too much he says what's your take on this was just this just leverage getting flushed out of the market do we need to detox ourselves it's like leverage dude it's always like everyone gets really scared when like like some sometimes the crypto markets just like cut off like you know 15 of the total market cap in like you know like five blocks right like 15 minutes right and like and everyone like all my normie friends everyone asks like what caused the market crash was it a whale that dumped like no the answer is always leverage this has been leveraged every

single time it will continue to be leveraged when you see these extremely violent rapid moves and it looks like the whole entire industry is going to zero for a brief moment and everyone gets spooked it's always leveraged people got too leveraged then they they levered up way too much then the market moved in a you know modest degree to the downside which caused some people to get liquidated cascading liquidity liquidations was caused liquidations and then it bottoms out at some point in time and overall like as far as a like uh cascading liquidations event this one was pretty modest uh this one was pretty

modest it's it's funny because so i tweeted out uh not long after this david quick everybody go look for an unrelated news event to blame this flash crash on because i think that's what always happened what was interesting about tuesday was there was nothing really going on in the news so uh crypto media and like wider media couldn't attach any event to this thing i think if it happened maybe like wednesday or thursday they would have blamed it on the sec uh news with coinbase but of course this happened before that so sometimes these things just happen as david says it's

like it's just leverage flushing its way out of the system one take for you i want to ask you a question i i saw a reddit post somebody said this is why crypto will never be mainstream it's because you can get it like uh an instant 10 15 20 uh drop in in terms of price what's your take on that yeah so the the reason why crypto always gets like these leverage flushes is because people keep on leveraging up because people are so incredibly bullish they're like oh i'm i missed out i need to grab more so i'm

going to go on leverage and so it's really just like there's a the everyone in crypto is bullish so they're always leveraging up and like if everyone in this industry is bullish like that is a mainstreaming phenomenon like all all people in the crypto markets are bullish and that's why we this whole entire industry is proponent towards leverage and so when someone comes and says like this is why crypto will never be mainstream the reason why this happens is because everyone in crypto understands that we are going mainstream right like that's why we're all leveraging up all the time i also feel

like uh what's going to happen is actually volatility is going to become normalized right yes i think people are just going to get used to it yeah right just like yeah a 10 20 day whatever as soon as we start creating tokens out of everything and then markets out of all of the tokens we just created we're gonna have spikes in volatility like this and it will become just part of the daily thing that happens this is not the s p 500 folks we don't have a fed backing these assets and a plunge protection team

that's going to come out and make sure everything's like super stabilized we live in a real wild free market so we're not this volatility is not going away i think people just get used to it yeah i mean this is a different subject maybe not for the weekly roll up but i also think that like volatility volatility is going towards the traditional markets as well i think uh crypto is just a sign of things to come and also volatility if you can handle your volatility you are anti-fragile right it's the markets that can't handle anti that can't handle

volatility are the ones that break uh and so this is why like crypto is a great foundation because we are born inside of like volatility like we are birthed inside of it it's like that bain meme like we understand volatility to the nth degree yeah absolutely one last thing i'll say is um don't take leverage folks be careful with margin this can happen in a hurry if this is your first cycle be very wary of taking leverage uh you could be the next one liquidated all right let's talk about this total locked value in d5 ah man we were skimming that

100 billion mark we got to 98 billion but now we're we're down david what are we looking at for total locked value in d5 yeah i think at the last weekly rollup we had just breached the last all-time high and even after of this liquidation flash like flash crash which again didn't really set us back all that much we are still like tied with the previous all-time high right so now that now the all-time high is 98 billion dollars locked in d5 we are clocking in currently at 90 billion locked in d5 uh but the overall definitely up on the week uh for sure let's talk about defy

tokens themselves um where are we on the week it looks like we're down yeah we're down a little bit with the dpi start of the week at 425 dollars and we went down to 366 overall down 14 on the week so dpi d5 got hit harder than btc and eth down 14 on the week part of me wonders david if these defy tokens are starting to get attractive uh at least these ethereum d5 tokens like they haven't seen a bull run in a while and some of them i mean yfi is

cranking out some serious cash i think it's valuation something like you know fair fairly low billion dollars or something like that uh anyway uh let's talk are you just teeing this up about how low the dpi ratio is i was trying to help you out here david but why don't you tell me what the dpi to width ratio is uh holding its head above water at point one um which is meaningfully below my point one three bottom call about thirty percent lower than it looks

he said it beautifully blow yeah i know this is it did not hold hey it held it for a while put up a valiant effort but overall that downward slope from like the march high that dpi versus eth painted at 0.25 we are just continuing this downtrend setting new lows with with dpi versus eth well ether is holding up fairly strong and then dpi is kind of staying stagnant right i mean it's sort of the reason for this is a really tough benchmark to be evaluated against right like this isn't dpi versus the dollar this is dpi versus eth so like yeah like

losing versus eth is kind of expected we've also seen some seasonal seasonal shifts which we'll get to in a little bit further as we talk about markets it very much seems like uh eath killer season alternative layer one season which we'll discuss in just a minute but before we do let's talk about the bed index where are we on the week this is of course bitcoin eth and dpi 30 30 33 uh a third a third a third split what are we looking at yeah this is the first week that the bet index had a meaningfully down week it's had other down weeks before but it was only like

one or two percent this week the bet index is down eight percent from 164 to 149 but if you zoom all the way out the total all-time chart looks great it is still pretty solid and so we are the the bed index has some sort of floor that is painted right around like 145 to 150 uh and that's kind of what it's been doing for the past uh like month or so um ranging between 175 and 145 dollars uh so uh yeah that's the bed index invest

in bed sleep comfy at night folks uh uma protocol is doing that they just purchased a million dollars worth of the bed index for their treasury it's pretty cool to see other dows dipping their toes in the water a good way to diversify your treasury if you are a a dow um let's talk about layer two's david one billion now locked in ethereum layer twos this does not include this is just layer twos we crossed that mark last week pretty massive yeah up to almost 13 percent on the week i believe

we might have dipped below one billion uh in the because this tweet is i think two days old um but we crossed one billion and like we're right around it right now but overall definitely a lovely adoption by the l2 ecosystem yeah that's pretty impressive and we'll continue to monitor l2s but another way to look at l2 is this new metrics board that came out this is uh l2 fees dot info you can check out ethereum layer 1 is expensive but how much does it cost to layer 2 to use layer 2 that's the question and look at this loop ring clocks out at the cheapest

this is to transfer eth only 37 cents per each whereas on ethereum right now if you're moving each round costs like nine dollars nine to ten dollars and then we see some other uh solutions here like hermes polygons hermes is uh 40 cents to transfer eth all the way up to optimism and arbitrary arbitration costs about three dollars optimism close to six dollars uh what's your take here yeah this is this there's a couple takes here this a illustrates the how more cheap zk roll ups are the versus

optimistic roll ups all the zk roll ups are this the extra super super cheap ones uh clocking in at below a dollar the optimistic roll ups which are optimism and arbitrary they have throttles on their l2s right now because they're kind of still in their that rollout phase so they haven't actually totally unlocked all the capacity that they have uh and so like they just they just don't want to like just yeet into a fully just like open ecosystem and they want to have a more controlled rollout so they've throttled their their layer two capacity which is why those the eth transfers are still in the multiple

dollars range um and but like as as they open up more capacity and as more people enter the l2 those numbers are actually going to come down and down and down over time so while we while we're kind of watching uh the ethereum l1 gas fees kind of be up only i also kind of think the l2 fees are generally going to be like flat or down only until it actually does hit some like inflection point where the actual capacity of these things do max out but we are still pretty far away from maxing out the capacity of our both arbitrary and optimism we talked about the subject

in length with the arbitrary team on today's state of the nation and so if you want to understand the gas markets on optimistic roll-ups like to a pretty like expert level degree definitely watch that show with them yeah absolutely it helps me really understand um like gas fees on on arbitrary in particular optimism works similarly but as you were saying david as they get more users they actually are able to spread some of the fixed fees that it cost to settle on main chain across a wider set of users so gas fees

go down for everybody and i i think we will see a continued decrease in gas fees on layer two but then um which is super interesting and we'll get to this maybe toward the end of the episode once we get data sharding in eth 2.0 that's just a massive unlock right where we get like a 90 reduction in fees yeah yeah even like it's just going to be absolutely crazy uh and that is a big unlock coming to e2 happening after the merge um sort of put that together after

talking to arbitrator i'm talking about sort of ethereum's roll-up centric scalability path that it's on anyway some cool stuff there but let's talk about this they're also printing the revenue too these layer two so optimism had a record trading volume day yesterday um uniswap on optimism oh excuse me record trading yeah so you swap traded almost seven million dollars on optimism yesterday uh and so if you are frustrated by the gas prices on ethereum and you're still using uniswap on l1

consider moving over to optimism that's what it's for what's it like to move over david you've moved over i i assume a few times straight trialling poly poly gone trying optimism that sort of thing it just costs some fees to bridge across and then it's fairly easy after that right you use the same tools you have right no that's exactly right like you just point your metamask to a different rpc endpoint it's as simple as like dragging and dropping uh on a drop down menu i think if you go to the optimism site they actually even generate the prompt for you so you just have to click accept and then it's just one

l1 transaction from your wallet to the optimism contract and then once you do that the money shows up in your wallet on the optimism chain uh and then you can like you know swap freely for funsies as much as you want it's great easy as that all right let's talk about the eath burn david it's had a crazy week in terms of the amount of eath being burnt of course that's because gas fees are high that's because ethereum block space demand is high but what are we looking at on the week as far as eth burn is this a record-setting week yeah

we almost had seven days of deflationary issuance right so we had uh how much total issuance 94 000 ether issued in the last seven days and 87 000 of that ether was burnt due to eip1559 so we had a net issuance of 7 300 ether over the last seven days which over proof of work because or excuse me over uh pre eip1559 we actually reduced issues eip1559 reduced issuance by 92

uh and that is ex not even talking about proof of stake which also like lowers issuance by another like 90 uh so we are seeing watching ether become ultrasound in real time you know i saw this metric yesterday we don't have it up but um you know all of the eth that's been minted for eth 2.0 and as a result of of people staking right that's kind of collecting on this deposits into the deposit contract uh yes and but the issuance from the deposits in the deposit so the the staking reward essentially you take that

entire like reward um and and you subtract well if you take the the entire amount of reward and you subtract the burn we've actually burnt more than everything we've issued in eth 2.0 which is absolutely crazy over the first like it's been 30 40 days now of eath burnt and we've already compensated for all of that additional issuance that has come up from the ethe 2.0 seeking contract so

pretty phenomenal there um what what are we looking at this particular block you wanted to highlight this data yeah this is the new highest burned block ever so block number 13180434 congratulations to that block it burned 96 ether inside of one block 96 ether that's more ether than is what is issued over the next uh 45 blocks i think that's the right math um so that is pretty crazy the base fee

for this block clocked in at 3 200 gray so like that's if going in like imagine going into your metamask and you're seeing like okay setting setting my next price to 3 200 well it was definitely an nft drop or no maybe this this actually could have been the liquid one one of the liquidation blocks right so this could have been a lot of like arbitrage uh and uh people like people actually liquidating people out of their positions in ave compound or dydx or any direct like leverage

platform uh and so like this is uh where a bunch of like uh mev bots are competing to to buy out people's collateral because they were over collateralized and so this is where we get into the meme of bullish selling right so like if there's a bunch of liquidations it actually burns more ether because everyone's clamoring to buy block space uh it's always a fun little meme when we see like eath price goes down it but then it also burns a ton of eth in the process but that's what's funny about this right so we'd only see a block with gas prices gas fees this high if it was worth it

for somebody to actually pay these to get the economic value out of that transaction if it wasn't worth it like we wouldn't see the gas fees bid up to this so this is an economically valuable block right i suppose it was worth it to somebody this block produced at least 96 ether worth of value for all the transactions inside of it that's one way to put it absolutely this is another graph of each first deflationary day david so if you guys are watching on on youtube you can see it depicted very well what are we

looking at here yeah we're just seeing so in the blue we have the issuance and in the red we have the burn and i mean this is almost implied uh we said that we almost had our first week of deflation uh with with ether and its monetary policy we had actually two days inside of this week where ether was actually more deflationary than it was uh inflationary and we were just seeing these these gas fees just go up and up and up and it's largely because of nfts uh and there's actually some fantastic data about this that we're going to show yeah here is the second day so the two

the top two days number one was the eighth of september which is yesterday at the time of recording and then the the number two day was uh the ninth of september which is today um and that was sixteen thousand eighth burned and then fourteen 14 800 eat burned on those last two days and then number three day was the fourth so it's all in september it's all in the last like two weeks or so and this is correlate correlated with nfts uh you could see that in this graph what are we looking at yeah so nfts are gas intensive since they are unique

tokens they are unique objects and require like much more gas and computation to make a transaction and so all these nft activity is really that's over it's really over consuming gas on ethereum more than anything else right and so according to takes theorem this was a fantastic tweet um nfts account for 42 of the variation in the base fee as in like when you go and you look at like the base fee or the gui costs that get your transaction in 42 of the reason of why that number is

whatever that number is when you look at it is because of nfts as in like nfts are dictating the direction of the gas cost on ethereum 42 of it like there's there's 58 of unaccounted like generalized ethereum activity uh that's not nfts and then 42 of that activity is nfts and so you can see like as nft markets heat up base feed prices also heat up well this is an interesting i think like segue into our next conversation which is this monster solana run and maybe

even more broadly than this like a monster uh layer one alternative layer one non-ethereum eth-killer sort of run that we've seen because here's the narrative david um the ethereum people are over here celebrating like uh fee burns right and yeah we're celebrating hive nights we're celebrating high fees in a way right with this fiber metric which is good for the entire ecosystem uh and certainly way better than than pre-eip1559 meanwhile the it's costing eighty dollars to to do

a uniswap transaction if i want to mint an nft maybe that's going to cost 150 like people are saying we can't afford to use ethereum and then they're also starting to see some nfts on other chains like some defy on other chains so solana is one avalanche is another so let's talk about that in the context of what we have seen over the last 30 days and even just this week even with despite the flash crash an absolutely monster run that solana has had so this

is kind of 90 days 90 days ago solana was 37 now we're above 200 and i could look at that on the one year too it was even further yeah yeah it's like three dollars to over 200 an absolutely monster run what do you think is going on here what's the what's the narrative that's taken hold yeah well first and foremost it's always something when something moves this violently especially to the upside um and especially when it didn't have that much of like a history prior it's always reflexivity like people are seeing

people pile into a trade and then they pile into a trade and then more people pile into the trade the amount of reflexivity that this uh kicked into gear was like absolutely insane i think this is one of the biggest like reflexivity price movements we've ever seen but when something goes from like 50 to 200 in the course of like 30 days like it's it's traders traders are acknowledging that people are uh also acknowledging like how solana might actually be the east killer that actually takes the east killer slot but

then you also see like there's other other quote unquote eat killers that have also performed like just as well as solana in the last month like phantom comes to mind even binance smart chain polka dot and this happens every single bull run and just like we were talking about with with the high fees like ethereum has a certain amount of block space and it has like its population of people that's willing to consume that block space and as that population of people that is willing to consume that block space goes up so does the cost of buying that block space which also pushes out more and more people who and out prices them out

of that block space and so those people have to find alternatives we like uh we are proponents of layer two alternatives but the other answer is that there's other blockchains that you can go do like crypto stuff on uh and so the the narrative the why these trades get reflexive is that everyone's like all right like people are going to like get priced out of ethereum where are they going to go and i think a lot of people have uh included solana as like the first and primary destination after ethereum that people go once they get price out of that block space

and so this kind of kind of created that reflexivity in the price action and so people in my opinion people are pricing in solana as like the eath killer that like beat out all the other eats killers the eath killer that lived in the east killer that lived yeah yeah so i mean that that's an interesting narrative right it's like and here here's actually what this looks like on on token terminal as well so you can definitely see that as a function of the amount of transaction fees the revenue that it's producing it's it's still trading at a colossal multiple to eat so like as a function of

transaction fee revenue eth is a price to sales ratio of about 40 whereas solana is 3 800. so salon is definitely pricing as if you if you take the lens of a capital asset it's it's pricing in a tremendous amount of growth right in order to justify that fee revenue would have to increase by 100 right to match what uh ethereum's doing but it feels like it has sort of consolidated and taken the mantle from a bunch of the other eighth killers although i will also make the argument that maybe we're just in a season here

david like eath killer season okay we didn't get d5 season this summer uh but maybe we got eath killer season at least over the past couple of months because if you look at this um this is an assortment of all smart contract platforms and i'm going to sort this by 30 day david so you see like phantom you're talking about earlier that's even up more than solana over 30 days it's up 509 solana's up 388 but then you also have like near protocol 250 percent uh

cadena 180 that's a blast from the past elgo rand 171 avalanche 161 over the last 30 days if you look at this year to date it's absolutely even like it's even crazier um you have to scroll all the way down i think to like number 40 or something to see ethereum uh in in the 30 days so it's also possible we're just in a season that we see every other cycle that this is kind of a new narrative that's taken hold

do you think that's what's going on or do you think that some of these alternative layer ones actually have some staying power yeah i mean we definitely saw this in 2017 2018 like when ethereum was congested in 2017 we saw eos pump right afterwards uh but as soon as like the bear market came uh all the activity on the actual ethereum blockchain and the developer activity just died out and then as went the the eos price do i think that that is good we're going to just see a repeat of that like perhaps not i don't really think a bear market is going to come and therefore like more and more activity

can come onto these non-ethereum chains because people are going to continue to be priced out of the l1 and then also not migrate over to the l2 and just choose to migrate to a different l1 also at the same time like eos has not seen the level of just like um brute force like marketing from like uh sam bankman freedom ftx right so this is going to be another thing we're going to talk about later on the show but like we get there there's tom brady like shilling ftx on on like global commercials right along with steph curry who also just signed a deal with ftx and

fdx is kind of just a proxy for solana right like ftx is sam bankman freed solana's sam bregman freed so like if you're seeing ftx cast a wide net trying to capture new users those new users might be going over to solana because ftx is like incentivized to to like you know shill solana more than anything else so what does this mean does this mean do you think that the eth killer value proposition is winning is correct or are we just in a in a cycle that assumes it is what are we what are we what's the

market pricing in here david yeah i think the market is pricing in people not prioritizing decentralization as the current cohort of people that find themselves inside of crypto um i think the people that aren't yet in crypto the people that are still not crypto people but destined to become crypto people in the future i think those people will care about decentralization less than the people that are already in crypto because if you're already in crypto you probably cared about decentralized decentralization more that's why you came here already uh and so i think traders and and like the solana run are

pricing in um a new generation of crypto people who might not have the same like decentralization values as the old crypto people uh and so like that which is something to be concerned about um i'm kind of concerned about the concept of like if you can be regulated you will be regulated it's an outstanding question as to whether or not solana can be regulated but when you have like a centralized company ftx and a centralized person sam bankman freed like promoting this thing like and and like also there are significant decentralization compromises to the

solana ecosystem right and so like that is going to be the the thing that this industry has to like parse apart and come to terms with is like do if we want to onboard all the world like can we how how significant can we uh sacrifice our decentralized values in order to onboard more and more people and is that going to be a net positive trade in the long term yeah you know two other things that that might indicate that this is kind of a cyclical narrative is you know one i don't think we've seen layer two on ethereum really hit its stride and so