# ROLLUP: Markets at ATHs | Saylor’s STRC Bid | Trump DeFi Scandal | SEC Clears DeFi

*Author: Ryan Sean Adams, David Hoffman*
*Published: Apr 17, 2026*
*Source: https://www.bankless.com/de/podcast/rollup-markets-at-aths-saylors-strc-bid-trump-defi-scandal-sec-clears-defi*

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## TRANSCRIPT
Ryan Sean Adams:
[0:04] Bankless nation we got a green week this week it is the third week of april very.

David Hoffman:
[0:08] Green week it's a very green week

Ryan Sean Adams:
[0:10] Markets are up big we got um just days ago it seemed we were down 10 percent on the s&p and now going.

David Hoffman:
[0:17] Downer yeah it was trending down

Ryan Sean Adams:
[0:20] And how are we now today at all time high all.

David Hoffman:
[0:23] Time highs all in a week's period who knew

Ryan Sean Adams:
[0:26] I mean i think that's begging the question for crypto, where are we going next, up or down? We're going to name some names on today's episode. We got some bulls that we're going to name and some bears that we're going to name. We're going to call people out. I actually don't know which side I'm on right now, David. So that's a strange feeling for me.

David Hoffman:
[0:44] Meanwhile, Sailor's stretch, his new STRC, not that new, but new into the Zeitgeist is printing billions of dollars. The market clearly likes it. It's putting a very healthy bid on Bitcoin.

David Hoffman:
[0:55] Is this the best instrument Sealer has ever created? Will it be the catalyst to send Bitcoin to all-time highs or alternatively, Will it be our demise? Bear or bull? Bear or bull?

Ryan Sean Adams:
[1:08] It's kind of like AI, you know? It could be like the next iPhone or it could kill us all. We don't know. Could be both. That's the fun. Also, World Liberty Finance had some drama in the week. This is, remember, Trump's DeFi project. It was caught doing some on-chain shenanigans. We're going to explore that and ask the question, is this the new cycle FTX? Did World Liberty just pull a Sam Bagman-Fried? We got Justin Sun weighing in on that.

David Hoffman:
[1:33] Notable morality commentator, Justin Sun. But we do have some fundamental, serious good news, you know, putting on the serious hat at the moment. The SEC just gave DeFi a broker exemption. Very material for a lot of the company's protocols, apps that we know and love.

David Hoffman:
[1:49] We'll talk about the significance of that and what we can do now. And also, the Bitcoin community taking quantum seriously, putting forward a quantum plan to free Satoshi's Bitcoins. making progress on the big quantum threat to Bitcoin. All of this and more. We're going to talk about it one by one by one. But first, we've got to start with the markets, which are greener than green. Like we said, just 10 days ago, we were down. The S&P was down a whopping 9.67% from its highs. The highs that it painted in January 28th of this year was the highest that the S&P was at, which was exactly 7,000. And Ryan, as of today, we are at 7,036 on the S&P 500. So we are up into new all-time high territories as of today, the day of recording the 16th and also the 15th. Two all-time highs in a row.

Ryan Sean Adams:
[2:41] We got NASDAQ on the all-time high too. So both indices and Joe Weisenthal makes the point, basically the entire Iran war sell-off has been erased. I guess quite obviously because we're at all-time highs. You know, this dip here in the S&P chart looks a lot like this dip over here. the.

David Hoffman:
[2:57] Trade war dip

Ryan Sean Adams:
[2:58] Yeah the trade war dip in April of 2025 doesn't it although that dip was steeper but they both have this kind of this V-shaped recovery right now.

David Hoffman:
[3:09] Yeah, the trade war dip was pretty significant. That was 20% from top to bottom, peak to trough. So the Iran war dip was just 10%. And this is what I've been saying, I think, on every roll-up and also on Twitter. It's just like the market is just like, ah, Trump's causing some chaos,

David Hoffman:
[3:24] but we'll get over it and we'll move on. And that seems to be the case, and we didn't totally price in so much chaos this time around.

Ryan Sean Adams:
[3:33] Are you feeling good about your predictions on David that hold nuts?

David Hoffman:
[3:37] Yeah, yeah, I think so. Yeah, like I think the market does what it does. It's like, oh, Trump's doing the tariff wars. How far is it going to go? It's the same thing with the Iran. Let's talk about the Iran progress.

Ryan Sean Adams:
[3:49] Some of the reason for this recovery was Iran war de-escalation of some form. So give us the deal. What happened? Because last I had understood, we were in some sort of a mediated ceasefire.

David Hoffman:
[4:05] Yes. Ceasefire started, two-week ceasefire, which gave time for Iran and the United States to come to the table and talk. We came to the table and talked, didn't last that long, 21 hours, one single day before Vice President Vance just talked to them and it's like, oh, we cannot come to terms.

Ryan Sean Adams:
[4:25] After 21 hours? Can you imagine that?

David Hoffman:
[4:27] Yeah, 21 hours straight. It seems like a lot, but also just like one instance of a day of talks. And then we're like, OK, we can't clearly can't come to terms here. So then, but the ceasefire was maintained. So this is just because we, between us and Iran, the United States 10-point plan, the Iranian 15-point plan, just because we couldn't close that gap didn't mean the ceasefire ended. So we are still under the ceasefire. We just have not come to negotiating terms about how to proceed after that two-week ceasefire.

Ryan Sean Adams:
[4:54] That was on Friday, that negotiation took place.

David Hoffman:
[4:57] That was on Friday, yes. Notably, the big line out of the Vance talk, the three-minute address that he gave, giving in the post-mortem, was that the United States called it bad news, but way more bad for Iran than it is for the United States. And that was kind of how that was left. The next action that was taken was Trump says that we are actually going to blockade the Strait of Hormuz because we were trying to figure out how to open the Strait of Hormuz to let oil flow out of the strait to minimize economic pain across the world. And Iran was really holding onto its grip on the Strait of Hormuz. And so Trump did something that I don't really think anyone saw coming, at least most people did not see coming, He just blocks the Strait of Hormuz. It's like, oh, you guys are going to block it? We're going to block it.

Ryan Sean Adams:
[5:42] Yeah, that's what I thought. It's just like if our ships can't get out, then no one's ships can get out.

David Hoffman:
[5:46] That's right. Except, just one small detail, it actually is, according to international law, illegal to block passage in international waters. And so Trump and the United States Navy are kind of just strong-arming Iran, and we push our Navy boats through the strait to prove that you could actually go through it. And now we are securing this rate to allow for ships who are not going to Iran. So any country going to the UAE, to Saudi Arabia, those ships can go to those ports so long as they are not going to Iranian ports. So actually, it's a complete, you know, 180 uno reverse card to Iran. It's like Iran was saying, you know, we're not allowing anyone ships but ours. And now Donald Trump comes in with our military and says, oh, we were more powerful than you guys. actually the only ships going through the Strait of Hormuz are everyone else's and not yours.

Ryan Sean Adams:
[6:40] And that's the state of play. Is that the good news? Is that why the markets recovered? Was that a de-escalation?

David Hoffman:
[6:46] So it was a... Yeah, well, we are not escalating back into the kinetic war that that ceasefire is being maintained. It's all about the boats in the Strait of Hormuz. And one of the reasons why I think specifically the American indices have done so well is there have been a ton of oil tankers that have rerouted towards the Gulf of Mexico, Gulf of America. And so a lot of demand for Middle Eastern oil is being rerouted as demand for American oil. is something that happened this last week is American oil exports hit all-time highs. So we are exporting oil at levels never seen before at prices that are way higher than where they were pre-Iran war. And so this is being perceived by the market as very good. And oil prices are coming down from the Iran war highs, still higher than when we went into the war. But there is the oil markets are sort of just rebalancing and being reallocated. And I think in addition to that being kind of a pretty strong win for the United States and the United States revenue and like a domestic boom, potentially, it's also I think people are saying like, oh, this looks like somewhat of a

David Hoffman:
[8:00] stable equilibrium here. Like this is something that we can plan on going forward.

Ryan Sean Adams:
[8:05] So there's no peace deal in place. Correct. This feels like a stable equilibrium and the pressure is still being applied quite heavily now on Iran. That's right. I guess, you know, the principle of wars is oftentimes the winners of the war are those that can just sustain pain for the longest.

David Hoffman:
[8:23] Correct. Yeah.

Ryan Sean Adams:
[8:24] And so now this is Trump in the U.S. applying more pain to Iran because there's a real economic cost, isn't there?

David Hoffman:
[8:32] It's a very significant economic cost. So much of Iran's incoming money capital flows comes from, A, the Strait of Hormuz, specifically their ability to sell crude, Brent crude oil. 90% of Iran's $110 billion annual trade goes through the Gulf. Oil and gas accounts for 80% of government export earnings and 24% of the entire country's GDP. All of that is gone. So that is an immense amount of pressure on the Iranian regime, just taking away basically their biggest 80%-

David Hoffman:
[9:22] Is at 105% year over year in February of 2026. Rice prices in Iran is up 7%. And so now, if you're paying attention to just the outcome of the Iranian conflict, your eyes are going back to the hyperinflation of the Iranian riyal. So there has been now material inflation because the costs of everything is going to go be so high. And you're looking at the Islamic regime's inability to finance the IRGC, the BASIGI, and really just do things. And so there's a big chokehold around the entire country because they don't have access to A, buy food, or B, sell oil.

Ryan Sean Adams:
[10:05] So oil prices down in response to this. And President Trump, we've got a truth social tweet here. President Trump's saying China has agreed to not send weapons to Iran. So maybe the market interpreted that, you know, in a positive direction as well. And then there's some more news that the U.S. and Iran, they're still talking. They're still they're extending the ceasefire for two more weeks as a possibility. And President Trump, you're saying the Iran war is very close to over. So I guess the market is just smushing all of that together and saying, OK, we feel good. Well, this is going to be recovered. This is going to be wrapped up soon. Oil is is it oil is not flowing though right.

David Hoffman:
[10:49] Oil is flowing out of saudi arabia do you like the rest of the gulf okay it's not flowing out of iran so iran production is stunted this is why this this economically hurts china and also why if you are paying attention to like how does this war like wrap up china is likely also going to put pressure on iran because china wants the iranian oil. And so they want Iran to wave the white flag so that China can get its flow of cheap oil going as well.

Ryan Sean Adams:
[11:18] I've got to say, I've been surprised by this recovery. Polymarket, the odds right now, U.S. and Iran, a permanent peace deal. By what date? There is right now the highest probability is a 50% chance by May 31st. By the end of April, only a 33% chance. But by the end of June, a 64% chance. And this is probably all in the fine print of what does a permanent peace deal actually look like.

David Hoffman:
[11:42] But notably, I say the important thing about the polymarket is the direction of travel because all of the dates on the table have double-digit green changes as of a week ago.

Ryan Sean Adams:
[11:51] That's right. That's right. Okay. So where does this leave markets in general? You show us some assets, David. I know you've got a trading view pulled up. So tell us what you're seeing in the markets.

David Hoffman:
[12:02] All right. So we started talking about the S&P. Here it is back in June at the all-time highs, and we're just poking above that. And we went from the trough of the bottom of the Iran conflict to the peak where we are now in 16 days, 16 days from down 10% to new all-time highs. So equity indices looking good. If I pulled up the NASDAQ chart, it would look just like this. It's basically the same chart. So all-time highs in the equities markets. We'll pull open WTI, that's West Texas Intermediate Crude. And so you can see we're still at wartime prices, but it's on the low end of that, $91 a barrel. What do you mean by wartime prices?

Ryan Sean Adams:
[12:37] Because before this whole thing started, what, we were in like the 60s?

David Hoffman:
[12:40] Yeah, it was as the United States military was moving towards Iran, we went from $55 to $60-ish a barrel up to $65. And then when the actual conflict started, that's when it went from $65 all the way to like $110 at the peak. And then it's been between $85 and $106 for the entire month of March and April. Yeah. We're at $91. And so we're still in the high zone. It's still high because of the war, but we're on the lower end of the whole entire war pricing. So this is something that I'm watching. If we can see oil break down below this, then this gives Donald Trump even more tolerance and flexibility with what he can do in Iran. And then let's see, here is 10-year yields. 10-year years are up And recently, up in the last two days,

Ryan Sean Adams:
[13:31] But overall. This is another constraining factor for Trump, right? This is another constraining factor, yeah. Those yields get too high, and he starts breaking. If you could scroll out for a second, David, I would love to see. Where did these go during the 10-year yields go during the tariff scare in April last year?

David Hoffman:
[13:45] So the tariff scare was from here to here,

Ryan Sean Adams:
[13:47] I believe. Okay. Yeah. So they spiked from, what, 3.8%? From 3.8%.

David Hoffman:
[13:52] To 4.7%, yeah.

Ryan Sean Adams:
[13:54] And they didn't go quite that high. They went to 4.5%.

David Hoffman:
[13:57] No, they've been more muted. They went from 4 to 4.5. And when they were at 4.5, that's when Donald Trump was like sweating. That's when things did not look very good.

Ryan Sean Adams:
[14:06] I think this is the big one. This is the big constraint, maybe even bigger than oil price.

David Hoffman:
[14:10] Yeah. Since the peak of where they were at 4.5, they have come down to 4.3. Could come down more. It's still high. Like we still have a huge debt burden.

David Hoffman:
[14:19] The direction of travel here is very important. But it has trended down and it needs to continue to trend down. We can look at some crypto prices. So this is Bitcoin. Bitcoin doesn't look anything like the S&P index, Ryan. It is just trended down.

Ryan Sean Adams:
[14:35] It's not at all time highs, I noticed.

David Hoffman:
[14:36] No, definitely not. But it has gone up during the war. So there's that. It's still kind of in this range that I think everyone is kind of watching this right now between the $65,000 and $75,000 range. We are poking at the $75,000 Bitcoin number. We all want it to break through that. is Michael Saylor's, Michael Strategies' Stretch product. Michael Strategies, yeah. The reason why it punches through this range that it's been trading in for over two months now, it could be. Yeah. There's a lot of momentum in Stretch. We'll talk about that later. We can also talk about the ETH price, which is kind of doing the same thing. It's been ranging between $1,900 and $2,350, which is exactly the price it is right now, $2,350 in that same sort of range. But Ryan, can I tell you my favorite chart? Yeah. That I don't want to spend too much time on. No. Because I don't want to be too excited about it.

Ryan Sean Adams:
[15:27] Take a quick peek. Okay, just a glimpse. We're just going to take a quick peek. We won't even talk about it. We'll just take a glimpse.

David Hoffman:
[15:32] We'll put it on. The same range that Bitcoin has been trading at and Ether has been trading at, you can see that same range behavior in the ETH-BTC ratio. That'd be the only time I say those words. But it has been trending up since the start of the Iranian conflict. It has been trending up. Wow. Poking through at 0.032.

Ryan Sean Adams:
[15:54] Is ETH even more of a wartime asset than Bitcoin? Huh? That'd be weird.

David Hoffman:
[15:57] It is at least more of an Iranian wartime asset specifically. Specifically during this time period very specifically yeah so i find all of these charts to be very interesting and they all kind of tell their story but overall it's i kind of think it's hard to paint it's harder to paint a bearish picture than it is a bullish one in my opinion it certainly makes me a bill this week this

Ryan Sean Adams:
[16:19] Makes you a bull you're coming out you're coming out.

David Hoffman:
[16:22] As a coming out of the closet no way i'm no way i'm kind of bull

Ryan Sean Adams:
[16:27] Are you just partial.

David Hoffman:
[16:29] I'm not, I'm not full bowl yet. Never go full bowl.

Ryan Sean Adams:
[16:33] Yeah, I've seen you full bowl.

David Hoffman:
[16:35] But like, I don't know, man. Like there's a pretty, like the market, in my opinion, is pricing in a pretty firm US victory in Iran. I think it's pricing in an Iranian white flag waving at some point in time. They're just going to have to give up a lot of stuff. Meanwhile, just like fundamentally, we, the United States economy is going to get a big boost because we are exporting more oil at higher prices than we were going into this war. That's very big for us domestically. I think the U.S. dollar gets a boost as a result of that as well. There's enough evidence here to paint a bullish picture.

Ryan Sean Adams:
[17:10] I'm going to confirm some of your biases with some statements by some other bulls. You ready for that? Hell yeah. All right. I got three bulls for you who agree. The first is Raoul Paul, and he's been saying this for a little bit.

David Hoffman:
[17:21] Raoul Paul's always bullish.

Ryan Sean Adams:
[17:22] Okay, well, he happens to agree with you at this moment in time. Total global liquidity is rising. Global M2 is rising. U.S. total liquidity is rising. U.S. M2 is rising. China total liquidity is rising. ISM is rising. There's a lot of things that are rising, including David's. Bullishness. Try not to overthink it is what he says. So don't overthink it. You know, there's a contrast point that I've been trying to get at the root of because Raoul Paul and Real Vision keep saying liquidity is rising. Whereas my liquidity quant, Michael Howell has said it's already peaked and it peaked late last year and it's now falling. It's now slowing. And so I've been trying to get at the bottom of that. Raoul Paul says he honestly doesn't understand where the discrepancy is. So this is like a to-do for me to understand why their measures and metrics are different. I still give a bit more weighting to Michael Howells because it's longer lasting. It's more comprehensive. I get the sense that Raoul Paul's global liquidity stuff, it maybe has more metrics that are sort of US centric, although I don't know all the details there.

Ryan Sean Adams:
[18:31] So I will caveat with that. But Raoul Paul joins the bull camp has been in the bull camp. And he said that the NASDAQ has a 97% correlation with the total global liquidity. So if total liquidity is going to all-time highs.

Ryan Sean Adams:
[18:49] Then the NASDAQ is obviously following. That doesn't necessarily mean that crypto also follows, but I think he also still believes that. Michael Saylor is another bull, but again, he's in the camp of, I'm only always accumulating. I'm always bullish on Bitcoin. Bitcoin is going, as you said earlier this week on our podcast, to $20 million by the year 20, what?

David Hoffman:
[19:11] 21, 21, 21 million.

Ryan Sean Adams:
[19:13] 21 million, of course, yeah. It's gotta be 21. By the year 2050, I think that was his prediction. 2046. Okay.

David Hoffman:
[19:20] We did the podcast with the man.

Ryan Sean Adams:
[19:22] Yeah, I can't. Jeez, those numbers just, you know, didn't sink into my brain. Matt Hogan, he gives the case that Bitcoin is kind of the bunker coin. Chaos is the latter. If you look at this chart, David, which is Bitcoin and S&P and gold from the start of the war in Iran to now, Bitcoin has outperformed those other two assets by quite a bit. Bitcoin up 11.7%, up about 19% from the February lows. So his comment is, nations can't trust each other. They can't trust financial rails. The world gets a bit more chaotic, a neutral asset like Bitcoin wins. So those are the bulls that agree with you. You want some bears?

David Hoffman:
[20:05] I'm glad that they agree with me. There's some analysis here that I'm slightly skeptical of, which is like the post, the war performance of Bitcoin is positive because Bitcoin is a chaos asset. It's like, well, It also had just fallen by like from $140,000 to $70,000. It's allowed to go up 19% after that. I don't know if we can correlate that to the war. Okay.

Ryan Sean Adams:
[20:28] So does that mean you're getting a little bearish after those bull takes?

David Hoffman:
[20:32] No. It means that I don't agree with that analysis, but I'm still bullish independently of that.

Ryan Sean Adams:
[20:35] I mean, that's what on the bear side, someone like Michael Nadeau would say, this is just kind of a mean reversion tactic. He thinks actually global liquidity tells a different story. It's tapering off. It's going down. There's a macro slowdown. But also the main thing that he waits in his analysis of why he thinks that we haven't dipped, we haven't seen the final dip yet, is the on-chain cycle data. This has been a much milder winter with respect to on-chain holdings and all of the activity there than previous winters. It doesn't usually, bear markets don't usually end like this.

David Hoffman:
[21:10] And easily, yeah. If you think that this is going to be an easier bear market, I've heard that before. I said that last bear market and then it wasn't.

Ryan Sean Adams:
[21:16] Yeah, and it might be slightly easier, but this would be just way too easy. Now, again, Bowles will say that's because Stretch, that's because Michael Saylor, which we'll get into. Ben Cohen tends to agree with him. He thinks that even if the S&P goes above all-time highs, which now it has, that doesn't mean the S&P is kind of in for a bullish 2026. we could still be headed down. So those are some takes. I thought the biggest indicator for me or the bubble indicator for me was actually this. Have you ever had Allbirds, the shoes you ever worn those?

David Hoffman:
[21:53] I know of them. Yeah, I know they're famous for San Francisco Tech Bro.

Ryan Sean Adams:
[21:57] Yeah, yeah, yeah. So I bought a pair. I did this in 2020, okay, during COVID. Apparently, I didn't keep track of their stock. This was just a shoe company. They IPO'd in 2022 a $4 billion valuation. They then proceeded to lose 99.5% of their value, Over the next four years, they closed all their U.S. stores. They sold the brand. They just this week renamed to New Bird AI. And the plan, get this, the plan is to pivot to GPUs and competing by renting out GPUs, AI, GPUs, competing with AWS, basically.

David Hoffman:
[22:36] On this news- And they're pivoting into like a core weave play.

Ryan Sean Adams:
[22:41] Renting out AI, data center stuff.

David Hoffman:
[22:43] Do they have any of their core business that means that they're competent in what they're pitting to?

Ryan Sean Adams:
[22:49] No, and that's fine. They're in San Francisco, so there's that. That's fine, but they're up 450% on the back of this news.

David Hoffman:
[22:56] No, I think they're up 800% because that's an old snapshot. It went up. The price doubled after that screenshot was taken.

Ryan Sean Adams:
[23:03] You're making my point even more starkly. And this reminded me when I saw this. Do you remember 2017?

David Hoffman:
[23:09] I know exactly where you're going with this.

Ryan Sean Adams:
[23:11] Where am I going?

David Hoffman:
[23:12] Long Island Blockchain Tea Company. What was it called? Long Island Iced Tea Blockchain?

Ryan Sean Adams:
[23:18] Yeah, they had like hard iced tea or something. Long Island Iced Tea.

Ryan Sean Adams:
[23:23] In December of 2017, they rebranded to Long Island blockchain. Right. Their stock went up 200%. Three weeks later, Bitcoin hit all-time high. And then after that, all-time high. It was the absolute pico top of the 2017 cycle. It was the pico top.

David Hoffman:
[23:39] It was the pico top. That was followed by a- That was around the same time that Katy Perry did her crypto token nails. Yeah. Yeah, yeah, yeah.

Ryan Sean Adams:
[23:48] Top markers, top marker. And of course, three weeks later, we hit the top and it was all over. where Bitcoin trades down 87%, you know, 12 months later.

David Hoffman:
[23:55] Yeah, but that's not crypto. That's AI. That's an AI problem. I'd be worried if I was an NVIDIA holder, not an Ether or Bitcoin holder.

Ryan Sean Adams:
[24:02] There's other things like- Because Bitcoin and Ether are.

David Hoffman:
[24:04] Clearly not in the bubble.

Ryan Sean Adams:
[24:05] Can you explain consumer sentiment then? Like, so this is, here's a tweet. The share of consumers saying their financial situation is worse compared to a year ago due to higher prices jumped to 54% in April versus 47%. It's now the highest on record. There's another consumer sentiment. put out by the St. Louis Fed. We are at, this looks like COVID lows. Do you remember during this time period, 2020, actually this is post-COVID lows, 2022, Kyla Scanlon was talking about the recession.

David Hoffman:
[24:35] The vibe session.

Ryan Sean Adams:
[24:36] The vibe session, yeah. The economy looked good, but the vibes were off. Consumer sentiment was down. She called this the vibe session. What's happening now? Are we in like the second round of the vibe session?

David Hoffman:
[24:47] Yeah, I don't know how to weight this, But it has to be one one part reality. Like it's never been affordable to be in the bottom 50 percent in America. Like we have had wealth discrepancy problems throughout this country. That's like a reality of the thing. Like the job. I don't think the job market is amazing right now, from my understanding. And then on the other side of things, I'm like, social media just makes this way worse. Everyone just talks about how bad their vibes are. And that is also contagious. And that's why it's a vibe session, not just like, you know, bad consumer sentiment.

Ryan Sean Adams:
[25:25] Yeah. Something about uncertainty that has skewed these numbers.

David Hoffman:
[25:28] Yeah. AI uncertainty, I think, is also showing up in this chart. I think that's a good point.

Ryan Sean Adams:
[25:32] So there you go. So Kevin Warsh is going to be the incoming Fed chair, likely. He just has a Senate vote. And, you know, one direction of travel is where are the Fed rates going? Donald Trump came out and said, hey, look, as soon as my guy Warsh comes in, interest rates are going to drop. President Trump says interest rates will drop once Kevin Warsh becomes Fed chair. I don't know if Kevin has any autonomy on that situation. I will tell you, Polymarket is not reflecting that. Still, there's a 41% that we get 0% increase in Fed rates in 2026 or decrease. No change. There's only 27% that we get a 25 bps change. So that's interesting.

David Hoffman:
[26:16] And notably, these percentages did not change despite Trump saying that.

Ryan Sean Adams:
[26:22] Yeah, that's right. I mean, no, like the market's not believing it. I mean, these poly markets has actually been pretty good on Fed rate cuts. That's like when people have run the analysis.

David Hoffman:
[26:32] Yeah. I mean, there's $20 million of volume. That is a liquid market when it compares to other prediction markets.

Ryan Sean Adams:
[26:39] But I don't know if you saw this week. So Kevin Warsh had to disclose his finances this week. So it's like a 70-page document. And this is Perry, someone on crypto Twitter tweeting out, Kevin Warsh owns 30-plus crypto projects, and you're bearish, and he lists all of these holdings. Like, look at these things. Compound, DYTX, Blast, Later.

David Hoffman:
[27:00] Wait, these are some previous era tokens.

Ryan Sean Adams:
[27:04] On Juno, Solana, Kinetic. There was Friends with Benefits is on here, okay? And so, a bunch of crypto people.

David Hoffman:
[27:10] Friends with FWB? I mean, they're still around, but wow. That's a blast from the past.

Ryan Sean Adams:
[27:13] Getting very excited that the incoming Fed chair was going to be, like, was holding all of these assets. So just to put a little, I guess, rain on that parade, it represents a very small percent of Kevin Warsh's net worth. So his net worth is like, he's doing quite well for himself. $200 million or so, between $130, $200 million. All of those tokens, I bet Kevin didn't even know he had them because they were

Ryan Sean Adams:
[27:38] helped through a VC firm.

David Hoffman:
[27:39] That would be a surprise. I've been to some FWB events.

Ryan Sean Adams:
[27:43] You've never seen Kevin?

David Hoffman:
[27:44] Not only have I not seen Kevin there, it's not his type of people. It's the wrong cohort.

Ryan Sean Adams:
[27:53] Yeah. So, and unfortunately, nothing disclosed that he owned Bitcoin or ETH directly.

David Hoffman:
[27:59] Oh, I see.

Ryan Sean Adams:
[28:00] So, I would have liked to have seen some of that. Still, he's probably going to be the most crypto, obviously, he will be the most crypto-friendly Fed chair that we've ever had.

David Hoffman:
[28:09] What does it mean to be a crypto-friendly Fed chair?

Ryan Sean Adams:
[28:11] I don't know, because, like, Jerome Powell really didn't do anything to curtail crypto.

David Hoffman:
[28:16] I don't know if the Fed chair, I mean, I can understand that him and personally and intrinsically, he's crypto friendly. And then he is also FedShare. I don't think there's a lot of overlap between those two things.

Ryan Sean Adams:
[28:27] I think you'd want the FedShare to not be anti-stablecoin or anti-Bitcoin or anti-Ethereum. Other than that, I suppose it doesn't matter too much. But he's not going to be like.

David Hoffman:
[28:37] Bitcoin is crashing. I got a lower interest rate. I don't think he's going to do that.

Ryan Sean Adams:
[28:41] No, he's not the guy. We'll have to wait for a few generations later for that. We got a lot more coming up. Michael Saylor, is he the guy saving us from crypto winter right now with his new stretch asset? It offers an 11.5% yield. CoffeeZilla does not like it, though. We'll talk about that controversy. Also, World Liberty Finance, are they running an FTX-style rug? We'll talk about all that more. But before we do, we want to thank the sponsors that made this episode possible.

David Hoffman:
[29:08] Okay, Ryan, so over the eras, MicroStrategy, otherwise known as Strategy by Michael Saylor.

Ryan Sean Adams:
[29:14] Otherwise known as MichaelStrategy.

David Hoffman:
[29:16] I love MichaelStrategy. They've released all of these different equity instruments. They have Stride, Strife, and they're all different structuring to basically borrow from the future in a particular way, targeting a particular investor.

Ryan Sean Adams:
[29:30] It's preferred shares, too. It's not like the MSCR common shares.

David Hoffman:
[29:35] Yeah, some of them are preferred. Some of them are like junk bond. It's all over the place.

Ryan Sean Adams:
[29:40] Yeah.

David Hoffman:
[29:41] There's this one that they've issued, that they've released, that is just dominating. And on our podcast episode with Michael Saylor, he said like, oh, yeah, we tried all the different ways and it's Stretch that is the winner. That's our iPhone. That's our iPhone. That's the debut product. That's the thing that's going to take us to Valhalla. Stretch is now over 40% of all of the market cap of all strategies preferred stocks that they released, the equity instruments. The strategy has issued $7.8 billion of preferred shares in total. Over $3 billion of that is now stretch alone, and that number is increasing. The trading volume of stretch—

David Hoffman:
[30:25] Oh, yeah. It has gone up. It has gone up. Yeah. So we're looking at over 50%. Over 50%. Yeah. It's also trading at basically as much as MicroStrategy's common equity is in trading volume is basically equal to that. Five months ago, it was just 10% of the volume. Now it's almost equaling the trading volume. That's impressive because that stock gets some volume. Yeah. So just as a recap of what Stretch is, Stretch trades at $100. If it trades above $100, strategy issues more stretch and sells it into the market to lower the price. If it trades below $100, there's, I'm sure, market making going on to push it back above $100. But the reason why it will go back above $100 is that if it ever consistently trades below $100, strategy will increase the yields that it pays, making it more desirable. Right now, it pays 11.5%. 11.5%. strategy can continuously sell, like inflate more shares of stretch at the market and constantly be selling, which is why this thing represents a constant flow of capital into strategy, which allows them to buy Bitcoin on the back end. So for strategy's purposes, it's a very tight loop between any excess demand of stretch above $100 and them buying Bitcoin because they instantly get to pocket that difference by Bitcoin with it. And this has... In the zeitgeist of, you know, fin twit, financial commentators, people are talking about this thing.

Ryan Sean Adams:
[31:51] It has caught a moment.

David Hoffman:
[31:53] A lot of opinions. Very strong opinions, yes.

Ryan Sean Adams:
[31:54] Yeah, there's this Twitter account called STRC Live that shows various STRC purchases and what happens. And this is an example. Tuesday this week at 8.27 a.m., 41,000 shares were purchased. $4.1 million of stretch was purchased. It didn't even, you know, no price slippage there. It didn't even, you know, up zero, up barely a cent. And that directly converts to 153 Bitcoin. That 4.1 million converts to 153 Bitcoin that Michael Saylor and Strategy can purchase on the back of that. What's happening is people are buying the stretch to get the 11.5% yield. It's not really moving the price. And Michael's saying, thank you for that. Thank you for your dollars. Thank you for your cash. I'm going to go buy Bitcoin with that. And that happens pretty continuously and fairly instantly gets converted to demand. So that is a case where you can kind of see it maybe blunting some of the crypto winter then, right? If there's this sustained bid for Bitcoin.

David Hoffman:
[32:58] The big question is how many investors or how much capital is there in the world that is interested in 11.5% yield year over year? Now, it's not risk-free, but I think a lot of people will take this unknown risk, this risk that strategy will simply not pay because they're not obligated to pay. And so many people are like, yeah, they're probably going to pay me. I'll take the 11.5%. And that's a very popular, like 11.5% is huge, dude. Like a relatively unknown risks, but I think the market is perceiving it as low risk. Low risk, 11.5%, like wowzer.

Ryan Sean Adams:
[33:37] There's no free lunch though, right? Like who's losing from this interaction? Van Spencer makes the point. Saylor's best year ever was 2024. He bought 320,000 Bitcoin that year. He's on pace this year, 2026, for 400,000 to 600,000 Bitcoin. The case for new all-time high is relatively straightforward, he says. Then Nick Carter follows up with this and he says, okay, but every dollar of stretch issued subtracts a dollar from MSTR common shares. The higher the ratio of stretch to MSTR, the more tenuous the situation becomes. Good for Bitcoin, though. And then Vance says, sir, I don't give an F about that. MSTR common.

David Hoffman:
[34:21] And Nick follows up with you and Michael both, which I think is the punchline.

Ryan Sean Adams:
[34:27] Nick is making the point that some of this excess demand for stretch is coming at the cost of MSTR common shareholders. Now, it all benefits Bitcoin, of course, but at the cost of common shareholders. And of course, because these are preferred shares, they're higher on the capital stack. And so if there was some sort of forced liquidation, preferred shareholders are going to receive the benefit. And common shareholders will be more caught kind of holding things. Their shares will go down.

David Hoffman:
[35:00] And Nick's point is that it's not a high-fidelity mechanism. It's $1 of stretch issued subtracts more than $1 of master common valuation. So he's saying this is a lossy transfer of value in order to do this drop. My big query quandary concern, Ryan, is that there's no limit to the amount of stretch that can be issued. It's literally a money printer. He could print 10 bajillion shares.

Ryan Sean Adams:
[35:31] But there needs to be a limit. I mean, his financial quants, the people at strategy have to limit this because the ratio to stretch to MSDR can't get too high or things get lopsided and the teeter-totter wobbles too far in one direction.

David Hoffman:
[35:46] I have not talked, I've not heard in the discourse of some constraint on the level of stretch issuance because the more stretch that's out there, the more a strategy is obligated to pay in like, it's like the government debt. It's like they have a big amount of debt because they have all this stretch out there. If they are just hammering the ATM on the market and constantly issuing shares, they're hammering their obligation to pay and have yearly bills to pay. and at some point That has to become overly burdensome.

Ryan Sean Adams:
[36:20] Well, I wonder if you are critical in the same way CoffeeZilla is critical. So CoffeeZilla is a notable YouTuber. He quite often talks about rug pulls, scams, at least when he's interacting with crypto. I don't know what his general content is about, but... He weighed in with a video on STRC this week. Let's play a clip.

Speaker2:
[36:39] Now, what is the problem with that? Well, ultimately, Stretch is nothing like a savings account. It is a stock, meaning the company has no obligation to pay you that money back. Like you give them $100, they have no obligation to pay you back. Why haven't people realized this? Why haven't people realized there could be a risk of this stock going down and them ultimately not getting their $100 back that they put in? My entire problem is that they are leading people like a pied piper with this kind of ludicrous idea. Their pitch is of a money market and a bank when that's just not what this is. And this is a snowball of yield that will accumulate for this company, which admittingly does have tons of Bitcoin. They have this massive treasury, but Bitcoin, it's very well known, does not yield anything. So eventually, Stretch will have to be funded by what exactly? Right? They have a cash reserve, but that'll eventually run out. Bitcoin doesn't yield anything. So you'd have to sell it at some point, which would put a negative pressure on your entire treasury, or they can try to keep issuing shares in perpetuity. But how are they going to do that?

Speaker2:
[37:50] Well, maybe they just keep raising the yield of stretch. Doesn't seem like that would work forever. You can pretty quickly realize that, hey, this is maybe not as sustainable as they're claiming it is.

Ryan Sean Adams:
[38:00] So I think CoffeeZilla's main critique here is that it's being pitched or sold as a risk-free money market account, you know, except it has 11.5% interest. And he's saying, look, there's some risks there. That's too simple. The risk by the investor, by anyone who buys this thing aren't properly understood. It's not like savings in a bank account. It's not like a money market because the stock itself, the asset itself can go down. It's a share at the end of the day.

David Hoffman:
[38:25] The principle can go down. Yeah.

Ryan Sean Adams:
[38:26] The principle can go down. And he is right about that. Although, it is called a preferred share. Yeah. I feel like, I don't know. I mean, maybe there's some people in retail who don't actually know what they're purchasing, but... For someone like me, and hopefully for bank listeners, they know that this is a preferred share. This is not a bond.

David Hoffman:
[38:45] There is no obligation to pay. Yeah. But it is preferred to the common equity. It's mixed. The risk is mixed.

Ryan Sean Adams:
[38:54] It is mixed. I just can't hate the product because he's right about maybe the way it could be advertised. But if it's advertised in the correct way, I don't really.

David Hoffman:
[39:03] Have a problem with the product. This is an AI video of the babe in the bikini who was like, I made all my money with Stretch. Yes. But he did that to rage bait people, not to market to normies.

Ryan Sean Adams:
[39:15] Yeah, I think so, right? And it's kind of the same thing. So, you know, retort to that is what is dollars in a money market fund? This is a Bitcoiner saying this. Oh, you need cash flow for retirement? Just continue lending your money to a government going insolvent, covering up for pedophiles, and drones striking the Middle East. That way you can get 8% less than STRC and feel a lot safer. Of course, that's a bombastic kind of take on this, but... The point that's not being made is wherever, if you have money in a money market, you're taking currency risk. That is the currency risk of the US government. If you have preferred shares in STRC, you're also taking currency risk. That's the currency risk of Bitcoin. Like you should know that. That's what the product is. If you're comfortable with the currency risk, it's not a bad product. In fact, I know I was talking to you in the debrief of like, oh, do you like stretch? Would you buy it? But my take on this now is I wouldn't buy MSTR. I kind of like Stretch and I kind of like Bitcoin.

David Hoffman:
[40:18] Stretch and Bitcoin. Yeah. It's like F-MSTR, Stretch and Bitcoin.

Ryan Sean Adams:
[40:22] The strategy barbell is Stretch and Bitcoin, right? Yeah. So I don't know. I can't hate the product. I don't agree with CoffeeZilla's take here.

David Hoffman:
[40:31] Hating the product is, going back to my original point, just downstream of how willing they are to hammer the ATM and issue a ton of shares that they can't. It could get out of hand. It could get out of hand.

David Hoffman:
[40:42] And so this is up to the discretion of the management company.

Ryan Sean Adams:
[40:45] Let's talk about Ethereum's Michael Saylor. That is Tom Lee because he just hit a milestone on the week. He now has 4.1% of all ETH total supply. It wasn't that long ago he came on Bankless last summer and he told us he was going to go for 5%. He called it the alchemy of 5%.

David Hoffman:
[41:01] And we were astounded. I was like, 5% is so high.

Ryan Sean Adams:
[41:05] I thought maybe in the fullness of time in some universe he could hit it.

David Hoffman:
[41:09] Yeah, at Terminus, right?

Ryan Sean Adams:
[41:10] He's hit it in less than a year. And he plans to hit 5% this year. And this means, of course, that 60% of that is now staking. So they're making between $250 million and $300 million per year on staking. If ETH hits $10K at some point, David, that's over a billion in revenue every year just from letting the ETH sit there and stake.

David Hoffman:
[41:31] I will say that there is a tale of two cities going on here. You have the strategy for Bitcoin. You have BMNR for ETH. two DATs doing kind of similar things buying their respective assets strategy is doing stretch issuing a crap ton of debt bitmine no debt

Ryan Sean Adams:
[41:50] Hasn't yet no debt we're only no stretch.

David Hoffman:
[41:53] To buy however obviously that's true but like still no debt so like there are divergences in strategy and no pun intended uh happening here

Ryan Sean Adams:
[42:03] One thing i do think it's safe to say is that bitmine has won the ethereum debt horse race and that was not clear last summer i mean there's a lot of contenders there not to say there isn't uh some other strong contenders here but the ether machine they're no longer going public so they're staying a private company uh ethzilla has kind of dropped they are pivoting their strategy from ethereum dat so the big dats are sharplink sbet and bitmine and bitmine has you know um, 4X more than Sharplink, than SBET right now. So they've definitely pulled ahead in this race.

David Hoffman:
[42:39] Coming up next, we're going to talk about World Liberty Financial, the Trump family DeFi projects and some of the shenanigans, the ways that they are cleverly making a lot of money at World Liberty Financial token holders expense? And was Justin Sun a victim here? Poor, poor guy. We're going to talk about this. And we're also going to hear from the SEC's statements about DeFi interfaces and how they are not broker-dealers. Which is great for our industry. So we're going to get to all that and more. But first, the message to talk about some of these fantastic sponsors that make this show possible.

Ryan Sean Adams:
[43:09] Okay, so the question this week, did World Liberty Financial just rug a DeFi protocol and was Justin's son a victim? Here's the allegation, a tweet. They're pointing to a screenshot of the World Liberty Finance website. It's saying the World Liberty Financial, it's on their About page, why they exist. It's to break barriers for the unbanked. Our mission is to unlock financial access by replacing the limits of the traditional banking system with an open on-chain infrastructure.

David Hoffman:
[43:36] Are those a bunch of stock photos from developing countries?

Ryan Sean Adams:
[43:39] Wow. It seems like it, David. Yeah, it seems like it. And, of course, World Liberty Finance is the Trump son's crypto project. It was kind of their brand to do some sort of lending and borrowing protocol in DeFi because they had been unbanked in the past. and they were basically bringing the Trump brand to DeFi. So the allegation is that they minted this week millions of tokens out of thin air. That would be the WLFI token. They then used them as collateral to withdraw hundreds of millions of dollars and then they've now distanced themselves from the project. So taking their name off the website. That's what this tweet is alleging anyway. What actually happened is they did borrow $150 million in USDC from a lending and borrowing protocol called Dolomite, and the collateral that was pledged was their $400 million in WFLI tokens.

David Hoffman:
[44:36] Which they had just minted.

Ryan Sean Adams:
[44:37] Those would be the tokens they minted when they started the project. So the idea is they mint tokens, right? And then they get real money, which is USDC, pledging these tokens as collateral. David, you know what Dolomite is?

David Hoffman:
[44:50] I remember learning more about Dolomite when we learned that the co-founder of Dolomite, Corey Kaplan, was an advisor to World Liberty Financial. And so as it seems, they advise them to use the Dolomite protocol, which is their protocol, to say, hey, there are people who are lending USDC to Dolomite. You can mint WFLI tokens, put them in Dolomite, and then you can have all the USDC.

Ryan Sean Adams:
[45:19] You can get the money, yeah.

David Hoffman:
[45:20] You print the fake token, you know, the easy to print token to get the dollars.

Ryan Sean Adams:
[45:25] It's a real token. It just might not be worth real money.

David Hoffman:
[45:28] Right, yes. Especially when they can mint them at their discretion.

Ryan Sean Adams:
[45:32] That's right. So Dolomite, it's on Arbitrum, by the way. And so the problem here is, of course, WFLI can mint their token, zero cost basis. Is if the token goes to zero and the collateral goes to nothing, they still get to keep the $150 million. It's the lenders who get the bag. They're the exit liquidity. And the problem is, even right now, David, if you try to sell $8 million in WLFI tokens, that's a 72% slippage, just on $8 million. So it's already underwater. Right. So that's the problem here is there's no risk to world liberty and they could just keep the $150 million. And who are the Dolomite lenders? These are probably regular DeFi farmers.

David Hoffman:
[46:19] People with USCC depositing for yield.

Ryan Sean Adams:
[46:21] Yeah, that's right. So they were getting 10 plus percent yield. Most of them had no idea the risk. 80% of this pool was in one entity's position.

Ryan Sean Adams:
[46:29] So these are retail farmers, really, that might be on the receiving side of this very bad debt.

David Hoffman:
[46:36] So when we saw WFI, World Liberty Financial, the DeFi app on chain as a project created, I would say that this outcome was pretty close to a worse possible outcome.

Ryan Sean Adams:
[46:51] I think you're right.

David Hoffman:
[46:52] Where innocent USDC lenders to an otherwise previously neutral DeFi app. If this happens, are not going to get their money back because of improperly balanced and poor risk-managed accounts because Dolomite whitelisted the WFLI token and didn't account for or were paid off or something about how you could just mint that out of thin air and then drain the – as far as I'm concerned, this is an attack on the protocol.

Ryan Sean Adams:
[47:25] Well, does it remind you a little bit of FTX in 2022? You remember that Alameda, so this was Sam's fund that was supposed to be separate. They had held a massive amount of the FTT token. You remember FTX had an FTT token that they basically invented, they minted, and they used FTT as collateral to borrow billions. Now, they did this off-chain. They didn't do this in DeFi. So we didn't discover everything that was going on. It's crazy that we can see all of this activity just in plain sight. And then what happened is FTT price dropped after Coinbase exposed that Sam was using customer deposits in improper ways. The collateral was worthless as FTT price dropped and all the loans were called and then Alameda couldn't repay as part of the downward spiral of this thing. And so this is smaller scale, but it's still a similar play, it looks like. It reminds me very much of the FTT case.

David Hoffman:
[48:20] It's quite blatant. One of the potential victims of this is Justin Sun. Justin Sun was an investor in World Liberty Financial in 2024, 2025. He invested $75 million. Uh, he moved nine millions of that to an exchange and then because maybe for some shenanigans for some reason, like it was, uh,

Ryan Sean Adams:
[48:40] They didn't want him to do it. His telling is they didn't want him to move the money. And so they froze all of his tokens.

David Hoffman:
[48:46] Yes. For all of his tokens.

Ryan Sean Adams:
[48:48] And so they could do that in the smart contract. They had that ability.

David Hoffman:
[48:51] They basically have total control over the smart contract. So Justin's son, I think is like trying to like sue them or something to like get his tokens back. Uh, and now this is also happening. And so it kind of adds fuel onto the fire. I don't know if Justin Sun was uniquely harmed in this particular instance. Why is Justin Sun relevant here?

Ryan Sean Adams:
[49:10] He's just relevant because he's complaining about it again. And there's back and forth with the WLFI account. And look at this. Does anyone, this is WLFI.

David Hoffman:
[49:20] The World Liberty Financial Twitter account. Yes.

Ryan Sean Adams:
[49:22] Does anyone still believe Justin Sun? Justin's favorite move is playing the victim while making baseless allegations to cover up his own misconduct. Same playbook, different target. WFLI isn't the first. See you in court, pal.

David Hoffman:
[49:35] That's why he's relevant. If there's going to be a court case where we get to see, I'm bringing my popcorn. God. And it's going to be great.

Ryan Sean Adams:
[49:42] Yeah, it's brutal. Now, WLFI calls all of this FUD. It's wrong. Here's what's actually happening. They basically describe themselves as an anchor borrower. So they're doing this maneuver so they can generate yield. That makes the protocol more attractive for their depositors. Also, they claimed that their tokens were nowhere near liquidation. That's true. It's 400 million collateral on 150 million. So liquidation hasn't technically happened yet. It's kind of a Schrodinger's cat type scenario. And if it got close to liquidation, they just put more WLFI tokens in. The problem with all of that- Hey.

David Hoffman:
[50:17] Print more shit coins, sure.

Ryan Sean Adams:
[50:19] The problem with all of that is, of course, if you hit a downward spiral, none of that works. You have thin order books, only 8 million in liquidity sends the books down 70%, right? That won't work in that scenario. But that is their retort. I guess all of this brings about the question of, what do you think, David? Has Trump been good for crypto or bad? I mean, we could talk about the meme coins. Bankless listeners know there's been meme coins. There's this project in DeFi. Do you remember, was it the Saudis that bought 500 million?

David Hoffman:
[50:53] It was a stable coin?

Ryan Sean Adams:
[50:55] Well, it was WLFI token. Who was it that did this?

David Hoffman:
[50:59] I think that's right.

Ryan Sean Adams:
[51:00] That was a journalist coverage that happened in February of this year. There's just a lot of scandal and corruption, it seems, and grifting activity. And yet, at the same time, we have Paul Atkins. We have the Genius Act. We have some definite positive moves for crypto. So what's the net?

David Hoffman:
[51:19] What's the net? There's been two distinct phases. The first half of Trump's presidency has been overwhelmingly good. And then the second half has been like, okay, I did all the good stuff. Now I get to grift. Now I got to pay the grift tax. And so I think when you ask this question, the zeitgeist is like, oh, now it's bad because he's doing the bad things. So I think the momentary pulse is people will say that it's not bad. To me, it's close enough where it's kind of a toss-up.

Ryan Sean Adams:
[51:51] I asked this question on crypto Twitter and at least my followers. 70% net good at this point in time. Or 30% net good, excuse me, 70% net bad.

David Hoffman:
[52:01] Yeah. And I'm saying that's the expected outcome because he's done all the bad stuff recently. There's recency bias in here.

Ryan Sean Adams:
[52:07] Let's talk about something good he did, which was appoint Paul Atkins as chair

Ryan Sean Adams:
[52:12] of the SEC. They came out with guidance this week, which is great news for DeFi. The SEC said DeFi interfaces aren't brokered dealers.

David Hoffman:
[52:22] So all of this guidance comes down to what the SEC defines as a covered user interface. What is a covered user interface? Thank you for asking. Website, browser, extension, app, anything that assists with making a blockchain transaction in a self-custodial wallet. And so if things assemble code for you to make a transaction, that is a covered user interface. It goes way further than that. It actually carves out, Ryan, a pretty granular definition of what a covered user interface is. It has 12 points of what a CUI is. It makes nine points about what a CUI isn't. If you go and read the report, the line that is drawn is basically down the principal agent problem. like is a covered user interface trustless or is it trusted? And if it's trustless, it's a covered user interface. If it's trusted, it's a broker. It's very smart. Yeah. It's very intelligent.

Ryan Sean Adams:
[53:21] It makes complete sense.

David Hoffman:
[53:21] It's doing the right job And so like some of the big questions it has is like, does the interface route transactions fairly and neutrally or does it bias certain exchanges? Do they sell transaction order flow or are they making opinionated choices on behalf of the user or are they giving the user maximum choice and autonomy? And if it's always like the user has the maximum choice and autonomy, it's generally a covered user interface. And if it's not, it's a broker dealer. But what does this cover? things like uniswap and sushi swap are covered metamask phantom coinbase wallet these are our opinions this is not stated uh so like this this isn't like a legal opinion but like this is what it seems reads to me like phantom for example uh order routers and aggregators like one inch and cow swap might might be a little bit unclear because they might be a little bit more opinionated uh so like tbd but overall it's like very well defined lines between what is a broker dealer was not and how an app or a project or a company might be in that criteria or not.

Ryan Sean Adams:
[54:25] And this is a big deal because Gensler's SEC, of course, was claiming that DeFi front ends were broker dealers and therefore all of them were illegal, you know? And so we've come so far from that. I remember actually, remember Sam Bankman-Fried in 2022?

David Hoffman:
[54:40] What an SPS remembrance today.

Ryan Sean Adams:
[54:42] He was saying, part of his core claim is that the SEC and the U.S. Government would never allow DeFi interfaces to exist without being registered as broker dealers. And he was going to go to DC, Washington, DC, and go lobby and fix this for us, of course, because they would never allow it. Now, here we are in 2026, and we have some of this guidance, some of this clarity. Alex Thorne makes the further point that this is another example of the SEC showing that it can just move crypto market structure along without Congress. It's giving the clarity that we need in crypto without the actual Clarity Act. So I'm glad of that because I'm not sure if that act is actually going to progress farther this year. It's probably a 50-50 at this point.

David Hoffman:
[55:24] Are we freezing some Bitcoins?

Ryan Sean Adams:
[55:27] I don't know yet, David, but Jameson Lopp has put out, he's a Bitcoin developer. Sorry, he's a Bitcoin community member. I'm not sure if you wouldn't call him a Bitcoin developer, but he's got some developers behind him have proposed BIP 361 to freeze all the quantum vulnerable wallets. So here's the website with the full description. But as we've covered, about 30% of all Bitcoin has an exposed public key that could be taken if a quantum computer is powerful enough to go take it. This could happen stealthily. We wouldn't necessarily see it coming. We would just start seeing keys get yoinked. That's 7.1 million Bitcoin that's at risk. And over 2 million of that.

Ryan Sean Adams:
[56:15] Probably satoshi keys are probably lost keys and so jameson put together a three-phased plan okay let me you know i'm going to spell this out and you tell me if you like this the first phase would be three years after act was uh activation so say this bip gets activated in 2027 no new funds could be sent to that 7.1 million bitcoin in exposed public addresses so those would be kind of locked out. You couldn't push new Bitcoin into them. Then phase two, which would be about five years after activation, all the signatures would be invalid. So all of the coins essentially would be frozen. So you'd have five years to move your Bitcoin from one address to a quantum safe address. And then phase C, which wasn't completely defined as there might be a way to do a ZK proof where you could actually prove you had the C phrase and unlock some of that Bitcoin. So that's the plan. It's tangible. Remember we were asking about like, oh, of the 7 million, how do you decide what's gone and what's not? Well, Jameson's proposal is just you lock them all and you force everybody else to move. And then those that haven't moved are, you know, coins that can't be spent, that are permanently lost that are satoshi's coins that sort of thing what do you think of this plan it.

David Hoffman:
[57:42] Is pragmatic and doesn't ring bitcoinery by because of that fact it's like in order to solve this problem

Ryan Sean Adams:
[57:52] It's the part c that's pragmatic to you i think this is just if you look at just a and b it's basically what nick carter was saying which is it's burning yeah.

David Hoffman:
[58:00] Yeah it's the c part It's the extra...

Ryan Sean Adams:
[58:03] Ignore C. That was kind of the TBD part anyway. Sure, sure, sure, sure, sure.

David Hoffman:
[58:08] Yeah. It's the burn. Yeah.

Ryan Sean Adams:
[58:11] You just burn it.

David Hoffman:
[58:12] Yeah. I mean, you listened to my conversation with Hasib last week. He was like, yeah, the social contract's not violated here. And I kind of take that point.

Ryan Sean Adams:
[58:22] I understand that point. I think it is somewhat violated and the property rights are somewhat violated, but I also take that point. And Jameson said, look, I don't even like this proposal. I wrote it, but I don't even like it.

David Hoffman:
[58:34] Because the alternative ideas are even worse. Yeah. Yeah. Like it is going to be something like this. It's like, it's not going to make anyone happy.

Ryan Sean Adams:
[58:41] Exactly. So it's a straw man. He put it out there and now the Bitcoin community can comment on it. Actually, there's a new post Nick Carter just put out about this and the three paths, but it's basically burn, let quantum treasure hunters go find it or Nick Carter's favorite approach,

Ryan Sean Adams:
[58:57] which is, you know, the US government goes and claims it. Salvage.

David Hoffman:
[59:02] Yeah. Yeah. He would like that. He would like that. It is fun, Ryan. I will say I do enjoy. Maybe there's a little bit of schadenfreude. Maybe schadenfreude is not the perfect word, but just like watching Bitcoiners have to flex this muscle that is so weak, like coming to consensus about stuff.

Ryan Sean Adams:
[59:17] On a governance thing. On a governance thing. In a protocol that has no governance. Yeah, exactly.

David Hoffman:
[59:22] It's like watching an infant learning to walk for the first time.

Ryan Sean Adams:
[59:26] Yeah, it's good. I do think they'll figure it out, though. I mean, proposals like this, this is the Overton window shifting.

David Hoffman:
[59:31] This is how you do it. This is how you do it. Nice job, Jameson Law. Nice job, Jameson Law.

Ryan Sean Adams:
[59:35] I agree. and also Nick Carter. You guys have been in the forefront of this. All right, well, let's end it there. Guys, you know, none of this has been financial advice. Crypto is risky. You could lose what you put in, but we are headed west. This is the frontier. Not for everyone, but we're glad you're with us on the Bankless journey. Thanks a lot.