ROLLUP: Market Uncertainty | Trump’s Bullish Plan? | Coinbase ICOs Return | Uniswap Fee Switch On | JPM Base Coin | Crypto Privacy Season?

TRANSCRIPT

Ryan Sean Adams:
[0:03] Bankless station it is the second week of november it's time for the bankless weekly roll up guys uh david is still off climbing mountains so i have tom schmidt dragonfly vc uh he is a partner of hasib hasib was on the podcast last week filling in for david he's also a podcaster on the chopping block as well tom welcome to the bankless weekly roll up

Tom Schmidt:
[0:26] Hey thanks for having me.

Ryan Sean Adams:
[0:28] How are you feeling in the week, man? Like prices and stuff? Are you a little down?

Tom Schmidt:
[0:32] You know, VC is weird where, like, you know, when prices are down and people are bummed, you kind of, you know, are like a therapist and you're kind of like, you know, giving Portco's a pat on the back. But, you know, I think you, like me, you've been in the industry a long time. Like, yeah, it sucks when prices are down on the week, but you got to zoom out a little bit and kind of appreciate where we are.

Ryan Sean Adams:
[0:53] I don't even feel it, Tom. I'm in it for the tech. Okay. I've always been in it for the tech. That's what people have said. Yes. Not about prices for me. But we could. I think some Bankless listeners

Ryan Sean Adams:
[1:02] could use some of that therapy this week as we talk about prices. So that's one thing we'll discuss. The market uncertainty. Are we going to break up or break down? It's kind of flat on the week, but what direction are we going in? Trump has a plan to inject some bullishness in this economy. We'll discuss this. Also, ICOs are back, baby. On Coinbase this time, I guess tokens are legal again. Speaking of which, we'll also talk about the UNI token. When fee switch. I think the moment is now. Looks like Uniswap is about to turn on their fee switch. What does that mean? Also, banks getting in the crypto action. JP Morgan coin, it's going live on base. What does it do? Can I buy it? We'll talk about that. And also, Tom, I want to get your perspective on privacy season. Zcash is making some moves. We also have a privacy wallet developer going to jail for five years. That's all happening the same week. A ton to unpack. We'll get to all that and more.

Ryan Sean Adams:
[1:56] I got to ask you, Tom, are you going to DevConnect at all?

Tom Schmidt:
[2:00] I, unfortunately, had a family obligation, so I cannot make it. But I really wanted to go. I mean, I see the event invites, and I heard Buenos Aires is beautiful.

Ryan Sean Adams:
[2:09] You're going to have a ton of FOMO, my friend. Yeah, a ton of FOMO.

Tom Schmidt:
[2:12] I'm already having FOMO, honestly. I FOMO of David. I see his mountain pics, and they look incredible.

Ryan Sean Adams:
[2:17] Yeah, and speaking of David, so he's throwing an event at DevConnect. It's going to be called the Bankless Summit. Of course, it's called the Summit because it's David. And that's going to be happening in Buenos Aires. This is 12 of the best Ethereum speakers. That's kind of Ethereum coded, which makes sense for DevConnect. It's like TED Talks. We got Donkrad, Timash from the EF, Justin Drake. Actually, I'm not sure if Justin Drake is actually going to be there, but he might be. Who knows? He could make a surprise appearance. Anyway, you can find out more about this. There's a link in the show notes. Bankless, I think Bankless Citizens get some discount on these tickets. So go check that out and we'll see you there, hopefully. Well, I won't, but David will, and neither will Tom. Someone will be there. It'll be great.

Ryan Sean Adams:
[3:02] Let's talk about markets on the week, Tom. So the first is this. The government shutdown is officially over. It felt like there was some relief from that. I'll read the line. The government, this is the Kobayashi letter. The US government borrowed 619 billion of debt during the 43-day government shutdown. It was 43 days we've been in shutdown? I barely noticed. That's $12.4 billion per day while the federal government was shut down. There's only one thing never stops the U.S. government and that's deficit spending. I guess that's a slant on it. We're still spending a lot of money, but the government is now officially open. I guess maybe markets can recover a little bit or is this a non-event?

Tom Schmidt:
[3:42] I don't know how much of this was, you know, shutdown driven. I mean, ultimately, like fiscally, like, you know, people are getting back pay for the amount of time that, you know, the government was shut down. So I think I don't quite know what's sort of causing it. I mean, obviously, gold's been moving up and down as well and so like hey maybe some like um exhaustion and kind of the overall like ai driven tech um tech boom but um i you know i think people are maybe banking that like hey maybe we're going to see fewer rate cuts this year than we were anticipating or you know maybe there's some overall like more hawkishness in the fed than people are imagining but it's always i think uh you know easy to forget like how much macro kind of drives overall like market sentiment 100.

Ryan Sean Adams:
[4:23] I feel like we got a little bit of bump in crypto when this news was announced that there's possible resolution, the government shutdown list. I feel like this happened over the weekend. We got a little bit of a bump, but now we're down again. So let's talk about prices.

Ryan Sean Adams:
[4:34] So Bitcoin is, at the time of recording, 1,900 down 1% on the week. We'll call it flat. ETH price, 3,312, also sad, down 0.7% on the week. We'll call that flat. There's a number I was talking to Hasib about last week that our charter friends over there, people like Ben Cowan talk about? And this is a key number he says is the 50-week moving average close for Bitcoin specifically. And he says that if we close below the 50-week moving average twice, that means the bull market is over. And why? It's because every time we've done that, the bull market has been over in the fourth year. And so this is the fourth year. And the number, by the way is something like $1,000 or $103,000 for Bitcoin. Last week, we just eked above it. Look how close we're coming here, Tom. Look at this. We're just like- We squeaked it. Yeah, we just squeaked it. All right. And now we're below that number. Again, it's not the weekly close yet. But if we close below that number, Ben says the bull market's over. Do you believe in this stuff?

Tom Schmidt:
[5:49] I'm more of a McRib believer. Are you familiar with the McRib indicator? And the McRib just got re-announced just got relaunched. So I think we're in for, you know, an extendable market. So I don't know what the reliability of it is, but the McRib is, I think, pretty high resolution.

Ryan Sean Adams:
[6:08] All right, well, we'll tell Ben to work that into his analytics, into the cryptoverse and everything you can access there. Here's a take on the week. And I feel this from Chow. He said, the brain says we go up. You got QE, you got TGA, you got the rate cuts, you got everything that the macro bros are saying, which is like more liquidity, more money. So that's what the brain says. But the gut says it's over because crypto is a self-fulfilling asset class and the four-year prophecy must self-fulfill. And this is a very frustrating situation. I completely agree with that. It feels like we should go up given like loosening market conditions with respect to the Fed and easy money. But there's something about this market that feels very unsettled. It feels like we could go down. So I'm split between those as well.

Tom Schmidt:
[6:58] Yeah, I know what you mean. I mean, I think there's like this strong sort of like trend following component in crypto. But I think that the bigger thing is, I think it's almost kind of like this like FOMO idea where people look at other asset classes and like, you know, you're like Squidward in the house looking outside. Everyone else is like outside having fun. And it's like Bitcoin or ETH. It's like flat or down on the year. Like, especially when everything else is rallying. You know, I understand why people maybe are excessively bearish on the asset, but I'm like, the flip side is, hey, maybe there's some like mean reversion and, you know, these things can kind of get tired and people looking for elsewhere to deploy. But again, I kind of encourage people to zoom out a little bit. And I think when you do, like it's hard to kind of deny, you know, on a multi-year time horizon, kind of the trend that we see. And again, the headlines that we see every single week, I think are like unimaginable, you know, five years ago. And it's like, imagine the headlines you'll see five years from now.

Ryan Sean Adams:
[7:55] Actually, we're going to talk about some of those headlines later in the episode, like JP Morgan coin on base, like the biggest bank in the US, like Jamie Dimon basically kind of controls the US financial system. They're launching a coin like what? Yeah. So there's some big headlines embedded here, but give me your over under like is the bull market over? Tom, do you think if I could pin you down? I know in the long term, we're all bullish. It's all very exciting. The tech is going great. We got some headlines. We got some adoption, all of these things. but here and now do you think that this is like the cycle over or do you think we still got some life do you think you believe in the extended cycle into 2026

Tom Schmidt:
[8:30] I think we still have life i think the thing that is also bumming people out is we never really got a full like alt season this year uh or this cycle and in my mind that means as always it will come at some point whenever people get most bearish and people think oh there's there's never going to be an alt season again that's exactly when it's going to happen um, I would be shocked, I guess, if we are lower like a year from now, I think given all the kind of positive trend momentum and we were looking at like DATS the other day and sort of data, you know, data and it's like, these are, these things are still doing like, you know, billions of dollars in volume a day. And there's, there's still obviously a lot of interest and excitement around them. And so if you think of that, even as like a small percentage of interest and buy pressure, like how can you can really, you know, deny that?

Ryan Sean Adams:
[9:16] I mean, that's my take, too. And that's what part of my gut says. Like these markets don't end until at least crypto cycles don't end until there's drunken euphoria. And I never felt the drunken euphoria. I mean, did you feel it? Did I was I the only guy missing?

Tom Schmidt:
[9:28] No, no, no. I yeah, I was thinking, too. I'm like, maybe maybe I'm now too old to experience you for you again. But I also felt like it was pretty muted. And I'm like, I never know when no one was buying a sports stadium naming rights this time around. So I think we're not we're not over.

Ryan Sean Adams:
[9:43] Well, maybe Trump's got some ideas to add some bullishness to the market in general. Let's talk about two of those ideas. One, maybe these are ideas to kind of fix the economy, or maybe he's looking at the election results and being like, okay, well, I don't want Republicans to lose 2026. We had two ideas. And you know Trump, he's throwing spaghetti against the wall here. So the first idea was this. I'm going to get your take on it. The 50-year mortgage. We've got some 30-year mortgages in the US. Of course, you can get a 15-year and a 30-year mortgage. And by the way, most countries don't have the 30-year mortgage product, but many do. And that's like a fixed rate mortgage you can get. Donald Trump is proposing 50-year mortgages, an extra 20 years. He tweeted this on November 8th via Truth Social. And the idea is lower monthly payments for all the millennials, all the Gen Zs who can't afford a mortgage, can't buy a house. He's drawing parallels to Franklin D. Roosevelt's 30-year mortgage expansion. So FDR did this on the 30-year. Some people, Tom, hate this idea, right? So here's a take, a cynical take. How's the, here, enjoy this 50-year mortgage different from, you will own nothing and you will like it. Here's another bearish take. Well, actually, let me get to this. So you can't afford a 30-year mortgage, but you're going to take out a 50-year mortgage to pay $300 less per month, but pay $500,000 more to the bank by the end of the loan.

Ryan Sean Adams:
[11:12] That's correct. Yeah, that's what this is. It's more money to bankers. So there's some cynical takes. There's actually some bullish takes here too. Here's a take. People are losing their minds over the 50-year mortgage, which you can choose not to use. So it's optional to begin with. And let's do some math. He goes through some math. But basically the gist of it is rather than you save a few hundred dollars per month on a home price of 400K. And if you take that excess money and you just invest that in the stock market, in the S&P, you make more money, right? You make millions of dollars potentially, right? And so the idea that this is an option that people don't have to take, that there can be some savings, that they make up for that in owning a home and they get 4% per year, maybe asset price inflation, asset price appreciation in the home, plus they could also invest that excess in the S&P and generate 8% yield and it's actually a deal. And if you don't like the deal, they just go to the 30 year mortgage. What's your take? You think this is a kind of a scam, bad idea or good idea, a good option?

Tom Schmidt:
[12:14] Yeah, I think it's always you get these strange artifacts when it's like the federal government is in some ways insuring or backstopping some part of the financial system. And so, you know, whether or not it's a good idea or not, I'm like, I don't really love the idea of the government being prescriptive about like what financial services or products should be offered or should be kind of promoted. I think ultimately, this doesn't really solve the kind of issue with housing in the US, which is like, you didn't build enough. And so therefore, I was going to be a little bit more expensive. And I was actually seeing some data the other day that like in these cities that have had these big booms and have had like, you know, big apartment explosions, like real rents are actually down from, you know, 2019. Because it's like, yeah, you build a shit ton more housing and great, like then people can actually afford it. So, you know, maybe either way, it's kind of like you inject a little bit more leverage into the system. But I don't know. Maybe it's, like you said, overall good for asset prices if you think this is going to create some more buy pressure from people who have now more income they can use to invest in the stock market or even buy crypto.

Ryan Sean Adams:
[13:15] I'm totally with you. I don't think this fixes the underlying problem.

Ryan Sean Adams:
[13:19] And let's go to the underlying problem. So I don't know if you saw this graph on the week, but this just popped out at me. It was on my timeline. So this is when people in the U.S. buy their first home. And let's see, the blue chart is the one you want to look at. And so it's the median age of first-time homebuyers. They're renting and they become a first-time homebuyer. It's late 1980s. It was 29 and 30, right? That's when you bought your first home. And it's been about low 30s for most of the period up until 2019. Right now, the median age of a first-time homebuyer in the U.S. is 40 years old. 40 years old. You slap a 50-year mortgage on that. You're 90. You paid off your home when you're 90?

Ryan Sean Adams:
[14:04] Like, I don't think that this is good. Like, I think this is a drag on, I guess, the U.S. economy. Like, if you have fewer homeowners, then you have fewer people invested in the whole capitalist system, capitalist project. This is what Peter Thiel says, you know. He wrote this, I don't know, email to somebody four years ago. He said, it's extremely difficult these days for young people to become homeowners. If you have extremely strict zoning laws and restrictions on building more houses, it's a good time for boomers whose properties keep going up in value. Terrible for millennials. If you proletarianize young people, you shouldn't be surprised if they eventually become communist. That's a take. And I think that's part of what's going on. And I don't think the 50-year mortgage really solves the underlying problem.

Tom Schmidt:
[14:50] Yeah, I agree. I think... You know, I don't think it is a problem with people or people wanting to rent or more people wanting to buy. The problem is in the U.S., homeowners are like a, you know, privileged class of people. Effectively, you get, you know, all these sort of financial incentives. You have these tax breaks. Yeah, the legal code is basically set up to favor you. And so then when you exclude people, great. Of course, they're going to they're going to be pissed. But maybe the answer is we shouldn't just like, you know, a lot of those.

Tom Schmidt:
[15:17] Yeah, that favorable treatment for homeowners. And like, if you want to rent, go for it.

Ryan Sean Adams:
[15:21] That wasn't the only idea Trump had on the week. And another idea he threw out was a $2,000 per citizen tariff dividend. This reminds me of the stimulus checks that we received during COVID. And it's basically like, we'll take all the money we're tariffing, which I believe is something in the hundreds of billions of dollars per year. It's projected right now. And we're going to give that plus some more in the form of a check to individual citizens. Again, these are Trump ideas that he tweets out, not necessarily going to come to fruition. In fact, the poly market on a Trump dividend this year is only about 7% right now. So unlikely to happen this year. It could maybe happen next year, but stimulus check rather than off the deficit. We're just going to issue stimmy checks and juice the economy that way. And he takes.

Tom Schmidt:
[16:11] I mean, you know, credit to the man. You know, you learn something works and you're probably going to keep running it back until it's almost working. And he learns people love the stimmy checks. So how do you kind of make it happen again? It does kind of, you remind me, there was also this ruling recently on credit card points. And basically, you know, hey, retailers now being able to sort of discriminate around which kind of points are going to take. But I find the whole credit card point system to also be just very wasteful. It's like you spend more money through this like interchange fee. And then it kind of comes back to you in this like very weird form of kind of pseudo money that you have to spend. And this is like, OK, you pay more on the tariffs and then you get like a check. I'm like, doesn't this kind of defeat the purpose of the tariffs in the first place? It's all kind of cyclical. So but, you know, again, people love free money and they don't really ask questions about where it came from. So I wouldn't be surprised if he leans into it.

Ryan Sean Adams:
[17:03] Yeah, we'll see what happens there. So a few more things to talk about when we get back. Privacy season in crypto. Zcash is up 4,000% in the last six weeks in a bear market. How does that happen? At the same time, the Samurai wallet developer was just sentenced to five years in prison. We'll talk about that. And of course, the Uniswap fee switches here kind of restored a little bit of belief in tokens again for me. So we'll talk about all that and more. But before we do, I want to thank the sponsors that made this episode possible. Tom, Zcash is on a run.

Ryan Sean Adams:
[17:34] Some people have called this privacy season in crypto. I want to ask you the question of how much... Of this is actually real. But let's first talk about Zcash. So Zcash, Zek, erased almost eight years of downside in just four weeks. Look at this chart. This is a crazy chart. Let me just say, so we got like some all-time highs, it looks like,

Ryan Sean Adams:
[17:55] way back in 2017 for Zcash, right? This was like Bitcoin going on a run, Ether going on a run, number of coins going on a run. And then there was this big move to, well, Bitcoin and Ether don't have privacy. So you need some Monero, you need some Zcash. And I remember the spike of Zcash at this time. Well, it has been down only since then until about six weeks ago. And now in the last six weeks, it's popped up 4,000%. So Zcash surged from $50 to $750 in early November. Right now it's about $480. dollars um what's going on here

Tom Schmidt:
[18:36] I wish i had a good answer i um when i see that chart i'm like when people talk about the most hated rally this is exactly the kind of chart that i imagine where you know everyone is totally caught off sides everyone's like oh yeah maybe this is a good idea maybe i should have some exposure and i'm like and that's i think how you get these kind of spikes i um i've heard all sorts of, you know, causal or all sorts of hypotheses of like, why is this happening now? Like, oh, there's some cabal of people who are like promoting it. I think, you know, certainly some people have been talking about it on Twitter.

Ryan Sean Adams:
[19:08] Who would this be? Like, I've seen Barry Silbert. I've seen Arthur Hayes. Look at this. Arthur Hayes sat next to Naval at dinner. He showed me Zach. I aped. All my brokers said I couldn't trade, so I have to have it.

Tom Schmidt:
[19:19] Yeah, there you go. It's caught off sides, you know. I think Balaji's been talking about privacy and Zcash for a while. For sure. There's a bunch of these kind of like influential people in crypto. But I think part of it, I think also near intense has been really big for Zcash. I think they're like the number three or number four coin in terms of volume at your Bitcoin.

Ryan Sean Adams:
[19:37] So explain that. It's basically you can buy Zcash and trade in and out of it using intense via DeFi. That's near intense, right? Yeah. And this is all integrated into the Zcash wallet as well, right?

Tom Schmidt:
[19:49] Yeah, it's in Zashi. So you can swap from any asset into Zcash and back. And it all sort of happens under the hood, trustlessly. It's really slick. So I've heard that also, you know, just straight up access. It's almost sort of like an exchange listing of now more people can buy this more easily. So maybe that's part of it too. But I don't know. I think as with always all ideas in crypto, there's no bad ideas. There's just ideas that are too early. And I feel like maybe the answer is like, hey, maybe now is like privacy is time to run. You know, why did it take, you know, 10 years for prediction markets to become a thing? And it's like, there are maybe all these small reasons, but the real answer is, hey, at a certain point, the right ingredients are in the pot and then you kind of get a stew out of it. I don't know where the analogy was going.

Ryan Sean Adams:
[20:28] But- Well, so the market is just repricing the stew then, I guess. Yes. Other things, people who might be in on that cabal, Tyler Winklevoss, of course, longtime crypto person, Bitcoiner, one of the twins, founder of the Gemini Exchange. He says, privacy is a precondition for many of our freedoms. He talks about that more. And then he says, that's why we founded Cypherpunk. Okay, this is a company dedicated to privacy and self-sovereignty, what is this actually going to be?

Ryan Sean Adams:
[20:56] You guessed it. It's a DAT. We got a DAT. Another DAT. It's a Zcash DAT. They're going to put $50 million into the cypherpunk. They've got a ticker, LPTX. I think it used to do cancer research. But now it does a privacy DAT.

Ryan Sean Adams:
[21:10] And Zcash is there. The narrative around this is basically Zcash's encrypted Bitcoin, right? So what's the... And this was the same narrative, by the way, back in 2017 when Zcash had its first run. And it's basically like the original sin of Bitcoin was no privacy and therefore Zcash. And the market is pricing all of this in and we have DATS and we have... And there's something that feels kind of coordinated about this. At the same time, yeah, this could be the market repricing some fundamentals. When we talk about some of those fundamentals though, this has been an interesting chart. So this is a chart from Masari. Zcash has flipped Ethereum in private total value locked. So if you're looking for the amount of value locked inside of some sort of shielded, private kind of pool, you've got a few protocols on Ethereum that do this. Tornado Cash, of course, notoriously. Also, Railgun.

Ryan Sean Adams:
[22:06] And then there's a smattering of other privacy pools. And Ethereum has really dominated this for a while. It's had, you know, 90% of market share in terms of TVL. Well, with a ZEC run-up, with a Zcash run-up, that is substantially eroded. Now Zcash has about 60% of the total value locked inside of shielded transactions and privacy transactions. What's your take on this? Do you think Zcash maintains this lead as kind of the private store of value?

Tom Schmidt:
[22:35] Yeah. Yeah, you know, hard to say. I think Zcash's story is in some ways kind of different where it also wants to be its own kind of money, kind of like Bitcoin. Whereas I think, you know, ETH and these private solutions on ETH, it's about facilitating privacy and privacy solutions for other assets. I think when I look at this, really like the, you know, the litmus test and sort of gold standard for any protocol or any asset is like, okay, is there actual volume? Is there actual willingness to pay? When I see, you know, TVL, I'm like, okay, this kind of looks like it's just

Tom Schmidt:
[23:07] the price of Zcash has gone up 5x and or, you know, 10x. So therefore, that.

Ryan Sean Adams:
[23:10] Explains the chart basically feels kind of superficial,

Tom Schmidt:
[23:13] You know, and it's like, sure, I'd love to see some more data around Zcash usage. And I have seen some light data that looks like, again, even like the near intense example. Okay, there is actual volume swapping into it. And there's some actual interest into it. But really, like that is, I think, the thing that you want to kind of goal on versus, the price go up, which is nice, but not the goal per se.

Ryan Sean Adams:
[23:35] I totally get that. I think maybe the counterpoint to that would be, well, Tom, though... Store of value is a use case. And we have more store of value, more liquidity that's being protected in something shielded here. So maybe this is meaningful.

Ryan Sean Adams:
[23:50] Ethereum hasn't given up yet on privacy. In fact, part of the theme coming out of the EF this year has been doubling down on it. This is a take from Hasu. I have a long running thesis that only ETH can succeed in bringing meaningful privacy to the space simply because it is too big to ban. Bitcoin obviously as well, but they will never make sweeping changes again. Vitalik has a post here talking about all of the things that Ethereum is doing with privacy, including this Kohaku, I think, roadmap, which is a wallet that the EF, a privacy wallet that the EF is putting up. We've talked about a number of the privacy initiatives at the Ethereum Foundation within the Ethereum ecosystem as well. Do you think that it's going to take something big like Ethereum? And I'll give you one other data point here, Tom. So this is Binance. Binance is basically banning Zcash on its exchange if the Zcash has ever touched a shielded pool. And this is kind of the bare case for an independent app chain like Zcash without DeFi, which is basically like, well, the central exchanges will just ban it. Now, maybe some of that is less true now that you have near intense and you can sort of do the DeFi thing. But yeah, what's your take? Do you think it takes something like Ethereum to push this through and you need this all integrated into DeFi?

Tom Schmidt:
[25:10] You know, I got to say, I think the tweet from the last two you're looking at, I don't think is an unbiased observer, given that his name is Mr. Monero. And, you know, Monero is famously not allowed on many exchanges because it doesn't have, you know, clear, clear transactions. Um so i i mean i i think i agree with the point which is like um you know for all these other smaller chains or smaller protocols like it's it's easy to kind of you know fence them off and box them off which is kind of like what we've seen with all these other privacy solutions mineral being one example but even you know tornado there was a long period of sanction, when you know if you had touched tornado previously you know a lot of these apps would you know blacklist you or flag your address um even if you had done it pre pre-sanctions So, you know, unless you really embed something at the kind of core layer or you make it too difficult to actually block the same way you could say it's too difficult to require Ethereum nodes to blacklist some address, then I think that's always going to be the way that the industry kind of leans. I would love to see more upgrades at kind of the core L1 layer for ETH, for Bitcoin. I think the question is just like, how do you actually go and do that? But we've seen, I think, how resistant a lot of these sort of core L1s are to making, you know, big changes to sort of the feature set, to the functionality. And I would love to see it, but it's kind of like handling it delicately, I guess.

Ryan Sean Adams:
[26:37] Handling it delicately. Yeah, this is a very interesting area with respect to kind of the government forces as well. You mentioned TornadoCache. I mean, speaking of which...

Ryan Sean Adams:
[26:47] Is a wallet, another case, similar to the Roman Storm case, but with some key differences. This has been the Samurai Wallet developer case. And what just happened here, Samurai Wallet was sort of a non-custodial Bitcoin wallet. The developers behind Samurai Wallet were prosecuted by the DOJ. I believe the developer in this case, Kione Rodriguez, he pled guilty, unlike Roman Storm, who decided to sort of fight this. And the judge now sentenced him, this just happened this week, to five years in prison for unlicensed money transmitting. So at the same time, Zcash is kind of pumping and crypto is having its privacy season. We have a developer, a privacy developer who is going to jail for five years. And the judge here really had no mercy

Ryan Sean Adams:
[27:45] On this case, basically. So Kioni wrote a kind of, I guess you'd call it an apology or an explanation to the judge. I'm sorry, I'll change. You should kind of lighten my sentence. And the judge was not hearing it. This is what she said. The defendant engaged over a period of years in very serious antisocial criminal behavior. I don't understand his letter to reflect that he's come to terms with that. And then she went on to say, there is no acknowledgement in that letter of the criminal world for whom digital currency is a gift. The criminal world for whom digital currency is a gift. This is a judge who I think has a very dim view on digital currency and the privacy associated with it because she's just seeing all the nefarious bad use cases associated with this. And that led to me like tweeting out, I don't understand really like where we are with privacy in the US right now. So we have a samurai wallet developer got five years in prison. That just happened this week. What does this mean for all of the privacy stuff that we're doing in crypto? What does this mean for Zcash? What does this mean for Railgun? Aztec Chain, which is doing an ICO as well as we speak. That's a privacy-enabled layer two. What does this mean for all the privacy wallets we're working on? The Zama protocol, FHE? Like, is privacy legal in the U.S. or not? I don't even understand how devs are kind of like working on this in the U.S. with this lack of clarity.

Tom Schmidt:
[29:14] Yeah, I mean, this has been the issue from the start. I think most of these developers were relying on this 2019 FinCEN guidance around, you know, what does it mean to be a developer in privacy? What does free speech? What does being a money transmitter mean? And now it seems like the government has basically backpedaled on that 2019 FinCEN guidance. I do want to caveat that there are some differences between the Samurai case and Tornado and some of these other protocols in terms of, okay, how interactive was the actual developer in sort of facilitating privacy? It's obviously you can't run, you know, a mixer, but if you're just publishing, you know, permissionless, non-cutorial software, that should obviously be totally kosher. And I think, you know, broadly speaking, people want guidance and they want sort of, you know, a clear set of rules from the government around what is allowed and what is not allowed. I think for Samurai, I think really the thing that kind of sunk them was, you know, they have in text that they acknowledge that, you know, you know, criminals were using the platform. They were still allowing it. They were still getting paid.

Ryan Sean Adams:
[30:18] They were very cavalier about this, weren't they?

Tom Schmidt:
[30:20] Extremely. Even in their marketing materials, they were very cheeky about it. And so, I mean, obviously no one wants criminals to use their platform because that's a very, very small percentage of total users compared to all the other people who want this kind of thing. So I think more broadly speaking, the industry seems to be shifting more towards these truly non-custodial, open source, trustless protocols for facilitating privacy. Which is, I think, overall, a good standard to be moving towards. So I try not to kind of, you know, take Samurai as maybe an indicator of where the industry is going, but maybe where the industry has been. And I think sort of a counter indicator and seeing, you know, this new class of protocols I'm not kind of put in the same bucket. But I guess, Tom.

Ryan Sean Adams:
[31:05] Do you feel like we have bright lines yet? So I think we have some in the Samurai. Right. So where are the lines? Doesn't it still seem like it's whatever the DOJ actually wants to prosecute? And right now it's a more favorable administration. So they're backing off a little bit. giving these projects breathing room. But like, if it was a less favorable administration, they changed their mind. I don't know that anyone's safe.

Tom Schmidt:
[31:25] Yeah, I would agree. And I think that was the frustrating part is people were relying on, you know, guidance from FinCenter and what was allowed, what was not allowed. And it didn't really matter. And people also forget that, you know, even the DOJ looking at you or bringing charges, even if you're innocent, can still cost millions of dollars and kind of ruin your life.

Ryan Sean Adams:
[31:42] And so it can ruin your life. Absolutely. Yeah. Even if you have to face, Like, even if you get to the point where you can raise funds, you could fight this in the court system, like your life is completely on hold.

Tom Schmidt:
[31:53] Yeah. So it's really terrible. I think it's frustrating to feel like the government is sort of going after, you know, developers who I think, again, for the most part are operating in good faith and using the best of their judgment and legal guidance from what's been given out so far. But, you know, people want very clear rules around, you know, what is in balance for this kind of software. And it just gets more and more important by the day, as well as people have strong privacy on chain.

Ryan Sean Adams:
[32:22] Let's talk about maybe a win. And this is something I was very excited about. Couldn't have happened in, I think, previous administrations and regimes. This is the Uniswap token, the Uniswap turning on the fee switch. So it hasn't officially happened, but it looks like it's going to. It's going before governance vote. Hayden Adams, today, I'm incredibly excited to make my first proposal to the Uniswap governance on behalf of Uniswap and alongside the Uniswap Foundation,

Ryan Sean Adams:
[32:51] Like executive directors. This proposal turns on protocol fees and aligns incentives across the Uniswap ecosystem. So what does it do? At a high level, turns on protocol fees and uses them to burn the UNI token. This is the when fee switch, when fee switch. This is what we've been asking for. It's there. Also the Unichain, the sequencer is now also burning Uniswap as well, UNI tokens. And they're also going back and retrospectively burning 100 million uni from the treasury, representing the protocol fees that could have been burned if fees were turned on a token launch.

Ryan Sean Adams:
[33:28] So overall, there's basically all fee switch. Oh, I should mention Uniswap Labs. Remember there was the Uniswap Foundation, which was kind of involved in the uni token. There's Uniswap Labs. Uniswap Labs has a Uniswap wallet where they had a fee switch. That revenue was going to Uniswap Labs. They're turning that fee switch off. Basically, complete alignment, complete direction of revenue and fee burns to the UniToken. And this was very welcome news. This is Paul Frambot, I believe, from Morpho Labs saying, I've got immense respect for Hayden Adams and the Uniswap team. For years, people harshly criticized their entity and their asset setup because it was kind of divided alignment, assuming bad intentions, when in reality, they simply couldn't act or explain yet. They took the hits quietly and still delivered a durable, aligned solution that they could have

Ryan Sean Adams:
[34:23] And I think that's probably my take, too. It's like people were saying that Uniswap would never turn on the fee switch.

Ryan Sean Adams:
[34:30] Meanwhile, others were saying, well, it's because of the hostile regulatory regime. And look, they have Wells notice from the SEC. They're being investigated. They can't turn on a fee switch right now in this regime. They will when they can. And now they are. What's your take on this?

Tom Schmidt:
[34:45] Yeah, I have a huge, huge respect for Hayden. This is like an extreme Chad move that honestly, I was very pleasantly surprised by I um you.

Ryan Sean Adams:
[34:55] Didn't think it would happen

Tom Schmidt:
[34:55] No I um I you know I was also not as huge fan of the labs foundation split and them you know marizing the front end but I understood why they did it I think it was not malicious it's it's purely like existential, um sort of drive that I think you know forced them to kind of have this split and you know find the sources of revenue and um you know I kind of assumed more teams would go down that path of like, you know, we have some sort of labs entity that maybe looks to, you know, IPO or, you know, monetize elsewhere. And then the foundation is for the strict nonprofit. And it was always frustrating, but I understood why people were doing it.

Ryan Sean Adams:
[35:32] Were you frustrated? Like, so the reason I was frustrated is because it kind of neuters our tokens, basically, our DeFi tokens, basically. They become sort of not even pseudo equity, just like weak futility governance coins that don't really command any revenue or any sort of economic value inside of the network. Yeah.

Tom Schmidt:
[35:49] Totally. And you ultimately have two different classes of shareholders that are rowing in two totally different directions. You know, fees on the front end, you know, to a certain extent are cannibalistic with overall volume on the protocol. You know, that's fees, that's dips that should be going back to LPs or back to traders and instead is being sort of pocketed. And so I think this is like an incredible move. I'm hoping a lot more teams sort of follow their footsteps and we sort of see this, you know, coalescing of, you know, labs, products and foundations. And hopefully also just a removal of this split in general. It's so expensive and so wasteful. It's a really strange legal setup that we've kind of agreed is the way that the industry is going to operate. And I'm like, you know, this is kind of where Andreessen was going with their, you know, DUNA proposal. And that's right. Maybe we see it do more DUNAs and more things like that. But it feels like maybe there's just some more sanity kind of coming back to the industry too.

Ryan Sean Adams:
[36:49] Tom, do you have any token economic takes? So Uniswap went with a burn,

Ryan Sean Adams:
[36:54] right? So all the fees generated this, they're just going to burn tokens. There are other ways of doing this. I mean, you could redistribute the rep, have them stake or something, you need token holders stake and redistribute the fees that way. There's also more complicated things. You could do the VE model, right? The Airdrome type stuff. You go down that track. Do you have any take on which sort of revenue distribution approach is best? Do you like burn or are you against it?

Tom Schmidt:
[37:21] Yeah, I think burn is, you know, kind of time tested. This is like the OG, OG, like maker, you know, model when they would do the maker auctions. And I think it's... The downside is that it's not super responsive to the needs of the foundation or the needs of the market of, hey, maybe you'd be pocketing some of that cash or sending it for grants or development initiatives or not necessarily sending it always back to token holders. But I'm a little bit skeptical of the E-model, in part because people end up building their own abstractions on top of it. It's like, in theory, this is, okay, you're committing your capital to tie it up and therefore get compensated for it. But then people end up just building their own wrapper on top of it and becomes liquid again. And so it feels like also just a big distraction. Like ultimately, you know, the reason why I think Uniswap won and also largely won on stable points is because they've just stayed focused on product and, you know, really just shipping the best AMM possible versus, hey, how do we actually kind of get very cute around reengineering our token? So I understand the temptation and intellectually, I understand the argument, but I think this is one of those like left curve, right curve kind of things of, you know, keeping it simple.

Ryan Sean Adams:
[38:34] Well, I'm very excited about it. It restores a little bit of belief. I mean, this is promises made, promises kept. And I think we've been drifting into nihilism around, you know, DeFi tokens recently. And this kind of, I don't know, it's just a fantastic, it was a fantastic thing to wake up to that morning when it happened. And of course, now we get the ability to comp the Unitoken to other things. So it's a question of, is this a good buy or not from an FDV to sales perspective? And you can comp it with other DEXs of the same sort. And then Uniswap has been losing some market share recently, at least from November 2022, when it was sort of the dominant and the only DEX out there. So investors can make their own decisions on that. I want to ask you a question about the DAO model here. So this is DeFi Ignis saying, Uniswap fee switch proposals killing the decentralized DAO model. And I think the reason he gives is the decision power is moving from a nonprofit organization governed by uni holders to a Delaware centralized corporation. So there's this fusion. It seems like Uniswap Labs has kind of like more of the control. There's been an alignment and a fusion there. This is Mark Zeller from Aave. He said, I'm not so hyped by Uniswap dropping the governance theater to re-centralize things under labs. So he's taking it even stronger. He's saying this is a re-centralization vector.

Ryan Sean Adams:
[39:56] Hayden responded to this and said, not accurate at all. We're participating in governance, not removing it. It's literally a governance proposal. And the governance controls the same thing. It always has fee parameters, treasury. and he goes on to say like those that's kind of the minimum viable governance those are the core parameters that you actually want token holders to vote on you don't want token holders to vote basically on the minutiae of every single thing that happens and so it seems also like Jake Travinsky agrees he says this is the Uniswap proposal isn't the end of the DAO model it's the next generation tokens like uni can provide holders real ownership of on-chain infrastructure and cash flows without asking them to design and vote on every single change possible. An improvement of the project. Tom, you and I, I mean, living through this, we saw so many DAOs that just were so disorganized, couldn't actually vote on anything, kind of disintegrated due to that. I personally like this structure. I think it's kind of a narrow DAO. You get that fee revenue on chain. What's your take on this?

Tom Schmidt:
[40:55] Yeah, I like that narrow DAO tagline. I think we've seen the opposite end of this spectrum. I think of, again, of like kind of some of the early maker activities where it's like there was you know this um um uh what do you call it like like the principal um vote upgrade where it's like you're always moving to like a new code version and it's like you know restake your maker to the new thing that's like yeah oh my god and you end just getting a lot of shareholder apathy or you know stakeholder apathy where it's like yeah i keep other people don't have the time and energy required to um understand and vet and make every new proposal and and so instead you want a little bit of like a um you know sort of loop where, hey, some team is obviously out there operating and then for big decisions, we can make those decisions as token holders collectively. I liked, Hayden actually had a good tweet today. It was Amanda Fisher, who's like at better markets and it was kind of, she's obviously tripping the whole proposal and saying, oh, these shareholders, these token holders.

Ryan Sean Adams:
[41:50] Oh, I got this actually. So, okay, Amanda Fisher, just some context here. You tell me what you think, but like she is the former chief of staff of the SEC. All right, during the Gensler administration, Got to assume friend of Gary and all that his regime did during this era. And she made a snarky comment on Jake Trevinsky's take. She said, so shareholders should vote broadly on the direction of an org, but not get into the day-to-day managerial decisions and in return get cash flows and ownership rights. Do people realize what this sounds like? She's saying, it's a security. It's a security. That's Amanda Fisher. Yeah. So you were saying you saw this tweet from Hayden. What was that?

Tom Schmidt:
[42:30] I mean, basically making the argument that like, well, you know, there's things that we wanted to do that we weren't able to because of the Gensler regime and, you know, the millions of dollars and thousands of hours of time wasted trying to sort of butt their head against the wall. And I think people like her don't really understand that, hey, there can be a new third type of thing. We don't always have to go back and try to, you know, fit technology that was invented in the past 10 years into laws that are over 100 years old. we can do a new thing. We can be inventive and creative and try to adapt the law to current day. And I don't know, it's just an insane type of mind to have, I think.

Ryan Sean Adams:
[43:08] I actually do have Hayden's clapback that I think you're referring to. She says this to, again, the former chief of staff of the Gensler regime there at the SEC. This is Hayden. The fact that we were restricted in how we operated while you and Gensler weaponized the government against us simply proves the chilling effect that a weaponized agency can have. It's not evidence of anything else. F you for thousands of wasted hours of my life. Wow.

Tom Schmidt:
[43:33] Dude, huge respect to Hayden. Huge respect to Hayden and the whole Uniswap team, honestly.

Ryan Sean Adams:
[43:37] Does this really feel like now founders are saying it? Like they've had to keep this all bottled inside. Like, why now? What's really interesting is it must be the case that Hayden and Uniswap sort of feel safe, right? Safe enough. Like this does take some courage, no doubt about it. But they didn't do this while they were under Wells notice and under prosecution. I guess it's changed such that they can put, you know, Hayden can post something publicly to a former SEC administration because they're completely out of power. They're completely sidelined. So that's where we are with crypto, aren't we?

Tom Schmidt:
[44:12] Yeah um i i do you know always sort of caution people remind people like we don't actually have the mark searcher bill passed clarity who knows who's actually going to and i'm like you know be be a little careful with i think some of the language i use but it feels like you know in my mind even in a worst case scenario we kind of revert to a mean of hey you know the worst actors get get targeted and i think that's what the industry has wanted versus um hey everyone kind of gets this, you know, broad, you know, dragnet kind of, you know, approach to and to enforcement. And so maybe if you think things are a little bit too lax right now, maybe they get dialed back a little bit, but I think we'd never go back to a true, like, you know, Biden era regime.

Ryan Sean Adams:
[44:54] Well, that's what Hayden Adams thinks. That's what Uniswap thinks. I think that's what Coinbase thinks because we're about to talk about ICOs being back. This time, Coinbase has its own ICO platform and the Monad token is the first out the door. You got some details on that. Also, JP Morgan and the JPM coin, that's on base. We'll talk about that. And then Tom, I want to pick your brain on some crypto geopolitics, all right? China versus the US, what's going on there? And the first country I learned this week is to launch a stablecoin, is launching a stablecoin. All that and more, but before we get there, we want to thank the sponsors that made this episode possible. All right, here's the news from Coinbase. Token launches just got a whole lot better. They are launching what I would call an ICO platform. I'm not sure if they actually use those words here, Tom. But early access to your favorite tokens. Real supporters are prioritized. Sustainable token distribution. U.S. Users can finally join. So you don't get the Geoblock paywall. And the first sale is going live November 17th. It's the sale of Monad. So this is a new layer one blockchain. We've talked about it previously. And that is happening. I think that's at a $2.5 billion FDV. So there's some user agreement details. So there's no fee being charged from Coinbase on that, though in the future, Coinbase reserves the right to charge a fee. Coinbase is not verifying any of the information that the seller is providing

Ryan Sean Adams:
[46:20] If it's inaccurate coinbase has no responsibility for that they want to make sure you know that and you assume if you buy one of these tokens you assume all risks in participating with the token sale but what this looks like is a ICO platform Brian Armstrong genuine long-term supporters deserve more Whales, Insiders, and Flippers shouldn't be the only winners from token launches. We're launching a token sales platform. He doesn't say ICO. On Coinbase, to give teams a new way to distribute their token to the community. And for the first time since 2018, retail users in the United States can widely participate. They must be looking at this and saying the road is clear. I mean, Coinbase is pretty conservative with respect to regulations. And historically they have been always within the bounds of what's legal in the U.S., trying to push up against it where they can, they must see that it's open season, really, to have tokens that aren't securities. What's your take on all this?

Tom Schmidt:
[47:20] Yeah. If anything, I'm more impressed with how quickly they've integrated, I guess, Echo post-acquisition into the overall sort of Coinbase experience.

Ryan Sean Adams:
[47:30] And remind people what Echo is here.

Tom Schmidt:
[47:31] Echo is a crowdsale platform founded by Kobe, aka Jordan Fish that basically lets these group leaders run their own sort of syndicates and allow teams to sort of sell into, you know the community and sort of a broader group of shareholders and previously they could it does seem to be the way the industry is going is hey this is I think what people always want to do is be able to get tokens in the hands of more people, people have realized a lot of the perils of airdrops the whole farming meta feels extremely played out and toxic. And so now, if you can actually... Uh, limit access to only people who are individuals and are going to add value. Like, why would you not want to do that as a team to allow more people to have ownership in your product? And so, uh, not surprising. And I think obviously these exchanges are also thinking about kind of going more, um, verticalized in terms of having more, um, shares and having more, more sort of touch points in the life cycle of, um, a token even before it launches. And so, um, you have not surprisingly that they'd also be thinking about ways to integrate, kind of pre-launch sales into the exchange as well.

Ryan Sean Adams:
[48:42] But Coinbase launching an ICO platform, Uniswap adding a fee switch, they must see, I mean, these are very plugged in organizations, right? That have been on the other side of a hostile US government. They must see clear skies ahead for all this stuff.

Tom Schmidt:
[48:57] Yeah, I think, I mean, I'm assuming for Brian, too, it's kind of like a what do you even have to lose at this point? They were extremely conservative, and they still got hit with SEC lawsuits.

Ryan Sean Adams:
[49:07] Yeah, that's right. That's right.

Tom Schmidt:
[49:08] And so I think, you know, I look at a lot of their products, even a lot of their DeFi stuff, their lending stuff, their Dex integration stuff. It's very cool. And I'm I'm it makes me glad that we have someone like that in the industry that's actually willing to take a little bit of risk and push the industry forward. Especially given that, hey, it seems unlikely that, you know, anyone's going to come after them. And even if they didn't do this, they probably still have people coming after them. And so, you know, why not sort of take the risk?

Ryan Sean Adams:
[49:35] That's an interesting calculation. I think you're right. What's the probability? You know, they've said that Coinbase is exploring a base token, right? Jesse said this, Jesse Pollack, we're just exploring it. What's the probability that they actually launched the base token on their own ICO platform sometime in 2026? Maybe they're gearing up for that.

Tom Schmidt:
[49:54] I think the rhetoric historically has been either you can be a public company or you can have a token, but you can't do both. And right, we've now seen at least, I think of figure markets, which I did recently, and they also have provenance blockchain. So the chain is maybe you can do both. And I think, as always, again, the Uniswap thing being maybe one example where when someone kind of breaks the seal, I think so many people kind of draft behind them and copy their playbook and, you know, sort of absorb the fact that there's sort of a first mover. And so, hey, maybe, you know, the Coinbase team is looking at the public markets and saying, well, you know, maybe we can also launch a token too. Why not?

Ryan Sean Adams:
[50:33] I think that's going to become a common model. Like Circle, even I was reading their earnings report earlier this week, and they talked about Circle, of course, just went public this year. And they also talked about the potential of the Circle ARK token, right, which is the new layer one that they're launching. So I think that that's going to be a...

Ryan Sean Adams:
[50:51] Something that picks up some steam. Let's talk a little bit about bank adoption on the week. And this has been certainly exciting area in 2026. This is pretty big news, I think. JP Morgan rolling out a deposit token called JPM coin on the base network. This was talked about, I think maybe a month or two ago, we first covered it. Well, now it is live. So what the heck is this thing? And I'm not sure I totally understand it, Tom, but I'm going to give my best shot and then maybe you can help me here. This is not a stablecoin. So this is a bank deposit token. It's called JPM coin. So that'd be JPMD. It is on base. It's on the public chain. It is different than stablecoin in a number of ways. So number one, it's backed by fiat and treasuries, but it's really, it's like cash on the JP Morgan balance sheet. So bank balance sheet cash is basically fractional reserve. So it's not one-to-one backed by treasuries. It's kind of fractional reserve, just like a bank deposit account. Access is not available to everyone. It's only available to institutions, right? Whereas a stable coin, anyone can basically use this. Also, it can generate yield. So it can be yield bearing.

Ryan Sean Adams:
[52:09] Issuers of stable coins, of course, cannot provide yield back to customers. At least that's a genius act thing. Now, We have ways that we can still get that yield if you're a non-issuer. But the big point is JP Morgan is the biggest bank in the US, right? And they're doing this on a public open blockchain platform. They move trillions of dollars per day, something like $10 trillion per day in these deposits generally. So this seems pretty big. I know that Simon Taylor, who covers fintech pretty well, he's very excited about these kind of deposit coins. He thinks this is going to be a huge thing. It's going to open up a whole new landscape for banks. Coming from the crypto native side, I'm not so sure, because I can't access it. We can't really use it in DeFi. It's not like it's integrated in the rest of the system. So it's cool, but it almost feels a little bit, I'm not sure that I get it yet. I'm not sure that I'm bullish on it. What do you think?

Tom Schmidt:
[53:06] Yeah, I don't know enough to have a totally informed opinion, but I also agree I'm a little bit skeptical. I think, you know, in DeFi, the stuff that's worked is really this kind of barbell. Either you get kind of the true, you know, narrow bank kind of implementation, which is basically a stable coin, which is just like, yes. Or you get, okay, it's literally just a one-to-one tokenized representation of a money market fund or a RWA or like a private credit fund. And then maybe it gets wrapped and kind of re-syndicated in the yield goes elsewhere in DeFi. But it's like, you either are literally buying this asset or you have a functionally cash and short-term treasuries. This feels actually kind of like the worst of both where it's like, I'm not actually getting any, you know, it's like you said, It's just kind of like I'm getting a deposit in like a fractional reserve bank. It's like I'd rather just go own the treasury myself or I'd rather own the cash. This feels kind of like this weird in between.

Ryan Sean Adams:
[54:03] Now, Simon Taylor says like one of the use cases here is you can swap JPM coin for USDC. Like right there. So maybe this is some sort of institutional onboarding connection bridge to stable coins via USDC. I don't know. I'm not a bank. I'm not an institution. I don't know.

Tom Schmidt:
[54:17] Yeah, maybe. I look at some of the other banks that have done, you know, Coinbase integrations, and it's like a much simpler flow. You can just move cash from the bank into Coinbase and vice versa. And I'm like, okay, that feels easier than having this weird intermediary token.

Ryan Sean Adams:
[54:31] All right. We'll have to see. But it is nice to see JP Morgan warming up to crypto. Also, another bank on the week. This is pretty big news, too. So a bank called SoFi. So SoFi is the 67th largest bank in the U.S., but they're a pretty innovative bank. So they've got about $36 billion of assets. And I'll let the CEO explain what they are about to do.

Tom Schmidt:
[54:53] We've wanted to be a one-stop shop for all your financial services needs. And one of the holds we've had for the last two years was in cryptocurrency, the ability to buy, sell, and hold crypto. We were not allowed to do that as a bank. It was not permissible. But in March of this year, the OCC came out with an interpretive letter that it's now permissible for banks like SoFi to offer cryptocurrencies. So this morning we're launching as the only national bank, the first and only national bank, the opportunity to buy, sell and hold cryptocurrencies like Bitcoin, Ethereum and Solano. So I was going to ask, are we just talking about three for now? We'll expand well beyond three. It'll be a pretty broad assortment. We try to differentiate on being fast, having broad selection, great prices, ease of use. So we'll try to give members, SoFi members, as much selection as they would like. And what's the difference between going through you and going through Coinbase or going through Robinhood or somebody else? Yeah, there's a couple of really big differences. First, we're a nationally chartered bank, which means we have the infrastructure, the processes, the financial conditions that provides the safeguards that a consumer would expect from a bank, which is going to allow us to scale responsibly. The second thing is because we are a one-stop shop, you can do all your banking, checking and savings at SoFi, your borrowing and your investing and now crypto. And one of the unique things about that is when you come to SoFi and fund your crypto investments, you'll fund them in a SoFi checking and savings account.

Tom Schmidt:
[56:12] Yeah, it does strike me that I can think of very few traditional, you know, financial services companies that have had real success launching crypto products. Like I think of actually like, you know, Robinhood at Cash App being two where it's like, oh, this is actually a meaningful source of revenue for them. Or obviously, you know, BlackRock and Fidelity with, you know, their ETF launches. Everyone else, I feel like they kind of tip their toe in and maybe it doesn't turn into a huge overnight success. And so it kind of being this weird, you know, redheaded stepchild kind of, you know, product in the product lineup. And so maybe SoFi will go all in. I would love to see, you know, more companies prioritize and sort of make crypto a true first party experience.

Tom Schmidt:
[56:54] But I just feel like I've seen this movie before, you know.

Ryan Sean Adams:
[56:58] It's cool. I guess it's cool that banks can now custody crypto assets. But yeah, I'm with you. Like, why? I don't know why. Like, they're probably custodying it with like Kraken or Coinbase anyway under the hood, right? So it's not like it's a separate thing.

Ryan Sean Adams:
[57:11] But I mean, some progress there on the banking side. Let's talk a little bit about the geopolitics of crypto. I was thinking about this question when I saw this story about Kyrgyzstan. Okay, so Kyrgyzstan, if you didn't know, Tom, they're actually launching a stablecoin. Okay, so Kyrgyzstan, the country, it's sort of in the Russian sphere of influence, let's say, borders China. if you don't know your geography, this is going to be fully backed by gold. So the unit of account is the dollar. The collateral is not treasuries. This is not genius compliant. The collateral is gold because apparently Kyrgyz Xistana has a lot of gold. They have about 40 tons, which is kind of big, but they have 900 below ground tons of gold, 900 tons of below ground gold. So I was thinking about this and I was like, Well, Kyrgyzstan has been

Ryan Sean Adams:
[58:07] Many of their banks and institutions have been under Western sanctions because, again, it's in kind of the Russia sphere of influence. So there's some probably Russian oligarch, you know, bypassing sanctions stuff going on there. And now they are launching a gold-backed stablecoin. What if the U.S. doesn't want this thing to exist? Like, what do they, what does, how does the U.S. respond? How does that play out?

Tom Schmidt:
[58:32] I i think um i mean in some ways this is kind of like you know euro dollars but you know russia dollars if you kind of think about it um i i i guess i kind of question what role like having this as a token is even playing here what if it's.

Ryan Sean Adams:
[58:48] Just like sanction bypassing what if that's the role for

Tom Schmidt:
[58:51] Instance but i don't think you need to issue a token to do that right like you can have you know the gold and you can sort of you know move you know debts around on someone's you know ledger somewhere. I think the things that really make stable coins, you know, valuable or robust is people know, hey, there's reserves, there's a very clean mint redeem loop to keep them really tightly pegged. There's good liquidity, there's sort of a good install base. Doesn't really feel like it has any of those features. I don't know enough about it. But having sort of a, you know, dollar denominated stable coin backed by gold feels like there's just ripe for some kind of, meddling in the backing.

Ryan Sean Adams:
[59:28] Yeah, like where's the gold? Does it really exist? How would you ever know? This sort of thing.

Tom Schmidt:
[59:32] Why would someone choose this over any of the other stable coins or even any of their synthetic dollars in DeFi? I don't know. Maybe they would choose this, but for the For the for the most part, this seems like it's a, you know, weird, weird niche low product.

Ryan Sean Adams:
[59:47] I think it could get more interesting if other like maybe larger countries, U.S. Adversaries outside of the SWIFT network start launching some sort of not necessarily stable coin, but maybe stable coin that's dominating their fiat or maybe something gold backed. Right. Russia does it. Let's say China does it. Does this bypass SWIFT altogether? And if so, how does the U.S. react? Right. That's where things get geopolitically interesting.

Tom Schmidt:
[1:00:10] Yeah, that seems more likely to me versus having, you know, a dollar-backed asset with, you know, or a dollar-denominant asset with non-dollar-backed assets. I think all these other countries are looking at kind of USD stablecoins now and kind of getting some envy. And so I wouldn't be surprised if we see, you know, more countries announcing or endorsing, you know, stablecoin approaches in, you know, the coming years.

Ryan Sean Adams:
[1:00:35] Well, I'm going to add to that and I'm going to put a little tinfoil hat on.

Ryan Sean Adams:
[1:00:38] This is maybe a little bit more out there, but I want to get your take on it. So I think there could be a geopolitical race heating up for actually nation states hacking DeFi protocols or hacking weak entropy addresses or just getting their hands on whatever crypto they can and starting to hoard it. And so here's what inspired this take. China accuses the U.S. of orchestrating a $13 billion Bitcoin hack. So there was a massive confiscation by the DOJ. I don't know if you saw it last month, but it's basically this Cambodian mob was doing sort of a pig butchering scam. They're stealing crypto from all sorts of retail wherever they could. And the U.S. Confiscated $13 billion worth of Bitcoin. All right. What's interesting is earlier this year, Trump executive order, he said, we want a strategic crypto reserve, a strategic Bitcoin reserve, but it has to be budget neutral, right? So my take is, what if he just kind of

Ryan Sean Adams:
[1:01:35] Got the three-letter agencies to go acquire some Bitcoin from criminals, of course, so that you don't get in trouble with the public, but use that to start to stockpile your strategic Bitcoin reserve. Now, this is China saying, hey, the US is hacking people all over the place. This was illegitimate. And I'm wondering if it's kind of China giving themselves ground cover to respond in kind. We will start hacking the low-hanging fruit that they find out there. The interesting thing is the DOJ is not reporting how they actually acquired the $13 billion. So did they find some way to, kind of like a social engineering type leak? Did they break some weak entropy generated addresses in the Bitcoin network? I mean, they'll never tell us, but they certainly have the cyber skills to do some, probably some crazy shit that we don't know about, right? Maybe China will do that. Maybe this creates a geopolitical race to go hack and hoard as much crypto as possible.

Tom Schmidt:
[1:02:31] It does create a nice bounty for people to really up their, you know, cybersecurity defense skills. So I like that part of it. But I am, I'm a little bit skeptical of this story. I remember hearing this when this came out that, okay, you know, maybe the NSA hacked these Cambodian, you know, pig butchers. And I'm like, I think as always, there's kind of like an Occam's razor where I'm like, okay, actually, I'm sure they just like, you're able to detain someone or there's some sort of social engineering thing or like, Like it's always, you know, the simpler answer, I think, tends to be the more accurate one. And I would not be surprised if that were the case here. It's, you know, classic, you know, wrench attack kind of scenario.

Ryan Sean Adams:
[1:03:05] That's even scarier to me, actually, the wrench attack scenario. But we'll leave it there. Tom, thank you so much for joining us today. This has been fantastic. Bankless listeners, got to leave you with this. Of course, 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. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.